most volatile forex pairs

The AUD/USD pair updated its 4-month price low last Friday, hitting 0.6567. The bears managed to end the trading week within the 65th figure, despite the general weakening of the U.S. dollar. At the beginning of the current trading week, the buyers took the initiative but their achievements remain relatively modest. On Monday, the pair sharply surged to 0.6720, but by the end of the trading day it retreated to the 66th figure, where it drifted.

The Aussie seems to be the outsider on the backdrop of the other major currency pairs. For instance, the pound gained almost 300 points against the greenback, and the yen gained 400 points. The Australian dollar, in its turn, could not take advantage of the situation to the full extent: the buyers of AUD/USD are wary of the upward price surges and take profit at the first opportunity (thus canceling the upward momentum). This skepticism towards the Aussie seems an echo to the March RBA meeting, the outcome of which was not in favor of the Austr

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Is British Pound (GBP) Really Strong? GBP To (AUD) Australian Dollar

Is British Pound (GBP) Really Strong? GBP To (AUD) Australian Dollar

Richard Nasr Richard Nasr 19.04.2022 13:28
GBPAUD – Potential Bearish Reversal! GBPAUD is sitting around a strong resistance zone in green so we will be looking for sell setupson H1: GBPAUD formed a valid wedge pattern in red but it is not ready to go yet. Trigger => Waiting for a momentum candle close below the last low in gray to sell. Meanwhile, until the sell is activated, GBPAUD can still trade higher. Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
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Euro To US Dollar (EUR To USD): That's An Amazing USD Performance, Will USDCAD (Canadian Dollar) Stay Close? USDJPY (Japanese Yen) Beats Records!

Jason Sen Jason Sen 20.04.2022 10:39
EURUSD retests 37 YEAR TREND LINE SUPPORT AT 1.0760/20. Longs need stops below 1.0670. Obviously there is nothing more important than this level this week. Longs at 1.0760/20 initially target 1.0820/50. Above here is more positive targeting 1.0900/20 then 1.0960/70. USDCAD strong resistance at 1.2650/70. Shorts need stops above 1.2690. A break higher is a medium term buy signal. Related article: Monetary Policy Drives EUR/USD, The Future of the EUR/GBP Awaits the Bank Of England's Speech - Good Morning Forex| FXMAG.COM Very minor support at 1.2610/1.2590 & again at 1.2525/05 today. If we continue lower look for 1.2480/70. We have another buying opportunity at 1.2440/10. Longs need stops below 1.2370. A break lower is an important medium term sell signal. USDJPY beat 14 year trend line resistance at 127.10/50 & rocketed another 200 pips!! The pair has 13 blue bodied daily & 7 weekly candles in a row. So sell signal yet despite severely overbought conditions. Above 129.50 look for 129.90/95 then 130.25/35, perhaps as far as 130.75/85. First support at 128.45/25. Further losses can target 127.80/70. Unlikely but if we continue lower look for strong support at 127.10/126.90. Read next: Gold Price Falls, Volatility in Wheat Futures and The Price Of Palladium| FXMAG.COM EURJPY higher as expected reaching 139.67 & no sell signal yet as we become overbought. Further gains can target 139.95/99 then 140.40/50 & 140.85/95. GBP To USD GBPUSD retests last week's low at 1.2990/70 after the bullish engulfing candle so now we just have to see if we get a double bottom buy signal or if the pair break lower for a sell signal. So far the bulls are winning as we bounce from 1.2977. A break below 1.2955 should be a medium term sell signal. Our longs target 1.3060/70 & 1.3100/10, perhaps as far as first resistance at 1.3150/70. Please email me if you need this report updated or Whatsapp: +66971910019 – To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk
Market Update: UK Inflation Softens, US Stocks Rally, Bank Earnings, and AI Dominate Headlines

Monetary Policy Drives EUR/USD, The Future of the EUR/GBP Awaits the Bank Of England's Speech - Good Morning Forex

Rebecca Duthie Rebecca Duthie 20.04.2022 10:17
Summary: EUR/USD and Monetary Policy. Bank Of England's Speech on Thursday effect on the GBP related currency pairs. AUD/CHF as a reflection of investor risk sentiment. Related article: Japanese Yen (JPY) Weakens Against The Dollar, USD/CAD Stable And The Inevitable Strengthening Of The USD, IMF/World Bank Events Monetary Policy driving the EUR/USD price action. Since the market opened this morning, the EUR has strengthened against the USD and the market sentiment is bullish, the rise in price is small but significant given the current economic conditions. With the differing monetary policy of the European Central Bank (ECB) and the US Federal Reserve (Fed) the EUR/USD currency pair price is low. In the coming weeks it is likely to see the dollar strengthening thanks to the expectations of the Fed to tighten monetary policy. Whereas, there is no certainty on when the ECB will begin rising interest rates. EUR/USD Price Chart Value of the GBP Awaits BOEs Speech Since the market opened this morning the price of the currency pair has increased, however, market sentiment for the EUR/GBP has changed from bullish yesterday to a mixed today. The strengthening EUR against GBP comes in light of the Bank of Englands (BOE) announcements tomorrow regarding the future monetary policy of the country, investors are expecting more hawkish actions. EUR/GBP Price Chart  Read next: Altcoins' Rally: Solana (SOL) Soars Even More, DOT and SHIBA INU Do The Same! | FXMAG.COM AUD/CHF Since the market opened this morning, the value of the AUD/CHF has increased, and has a bullish market sentiment. This currency pair can be used as a good reflection of risk sentiment, this is because the AUD is risk-on and the Swiss Franc is considered as a safe-haven currency. AUD/CHF Price Chart GBP loses some ground on the JPY The price of the GBP/JPY currency pair has (in general) been on the rise as a result of the rapidly depreciating value of the Yen. However, since the market opened this morning the price has decreased despite the bullish market sentiment, possibly due to the uncertainty regarding the future of the GBP and the upcoming BOE’s announcements. GBP/JPY Price Chart Sources: Finance.yahoo.com, teletrade.eu, dailyfx.com
EUR/CHF: Features and recommendations Read more: https://www.instaforex.eu/forex_analysis/313786

Euro To Swiss Franc Chart May Surprise! EUR/CHF – Top-Down Analysis!

Richard Nasr Richard Nasr 20.04.2022 12:08
DAILY: Left Chart. EURCHF is overall bearish and now approaching a resistance so we will be looking for sell setups on lower timeframes. H1: Right Chart EURCHF is forming a channel in red but the lower trendline is not valid yet, so we are waiting for a new swing low to form around it to consider it our trigger swing. Read next: Altcoins' Rally: Solana (SOL) Soars Even More, DOT and SHIBA INU Do The Same! | FXMAG.COM Trigger => Waiting for that swing low to form and then sell after a momentum candle close below it (gray zone) Meanwhile, until the sell is activated, EURCHF can still trade higher. Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun Good luck! All Strategies Are Good; If Managed Properly! ~Rich
The US Has Again Benefited From Military Conflicts In Other Parts Of The World, The Capital From Europe And Other Regions Goes To The US

Powerful (USD), Really Strong (CAD) - US Dollar To Canadian Dollar, Solid NZD Performance, UKOIL To Stabilize?

Jing Ren Jing Ren 21.04.2022 07:40
Key takeaways: The Canadian dollar soared after red hot inflation readings in March The New Zealand dollar inched lower after the Q1 CPI fell short of expectations Brent crude finds support from a surprise drawdown in inventories USDCAD breaks support The Canadian dollar soared after red hot inflation readings in March. The greenback’s struggle to reclaim 1.2670 suggests a lack of momentum from the buy-side. A fall below 1.2540 triggered a new round of liquidation and further confirmed the bearish RSI divergence. 1.2480 is the next support and an oversold RSI may attract some bargain hunters. However, there is an expectation of stiff selling pressure around 1.2645 as the mood sours. A deeper correction could send the price below the critical floor at 1.2400. Related article: Japanese Yen (JPY) Weakens Against The Dollar, USD/CAD Stable And The Inevitable Strengthening Of The USD, IMF/World Bank Events NZDUSD tests resistance The New Zealand dollar inched lower after the Q1 CPI fell short of expectations. A break below the daily support of 0.6730 revealed a lack of buying interest so far. Sentiment turned cautious after the daily chart exhibited a bearish MA cross. On the hourly chart, the RSI’s oversold situation led to some profit-taking off 0.6720. A bullish divergence suggests a slowdown in the current sell-off. Nonetheless, the bulls need to lift offers in the supply zone between 0.6820 and 0.6880 before a reversal could happen. Related article: Monetary Policy Drives EUR/USD, The Future of the EUR/GBP Awaits the Bank Of England's Speech - Good Morning Forex| FXMAG.COM UKOIL bounces off support Brent crude finds support from a surprise drawdown in inventories. On the daily chart, the price is taking a breather in a flag-shaped pattern after a parabolic ascent. The uptrend can remain intact as long as the support of 98.00 stays still. A tentative break above 114.50 has prompted short-term sellers to cover. The latest pullback saw bids at the 61.8% (104.20) Fibonacci retracement level while the RSI recovers to the neutrality area. A break above 117.80 could extend the rally towards 127.00.
Want To Exchange 100 GBP To USD? GBP/USD Below 1.3000! (GBP) British Pound Weakens! GBP To USD - 17-Months-Low!

Want To Exchange 100 GBP To USD? GBP/USD Below 1.3000! (GBP) British Pound Weakens! GBP To USD - 17-Months-Low!

Alex Kuptsikevich Alex Kuptsikevich 22.04.2022 09:34
GBPUSD fell below 1.3000 to its lowest level in 17 months due to a weak retail sales report. Sales excluding fuel fell 1.1% after 0.9% in February ONS reports a 1.4% drop in total sales for March after a 0.5% decline a month earlier. Sales excluding fuel fell 1.1% after 0.9% in February and showed a year-on-year decrease of 0.6% - a clear signal of the severity of the current economic situation. Read next: ECB Announcements to Possibly Tighten Monetary Policy Strengthens the Euro. EUR/USD, EUR/GBP, AUD/NZD and EUR/CHF All Increased | FXMAG.COM Consumer demand is migrating from retail to services Rising prices and wages have little impact on retail activity so far, which may prove to be a complication for the Bank of England in further tightening monetary policy. Sales returned to their long-term trend level in March after a significant pullback in the second half of 2020. Consumer demand is migrating from retail to services. Related article: Altcoins: IOTA, Litecoin (LTC) and Cardano (ADA) Threatened? Crypto Markets Lie in The Hands of Regulations and Government Policies? | FXMAG.COM According to the Fibonacci model, the next major stop could be near the 1.26 area Weak sales data interrupted the Pound's consolidation above the 1.3000 area, hoping that the UK economy could digest decisive rate tightening. GBPUSD is renewing multi-month lows, building on the momentum formed a month ago when a rebound in the pair was interrupted. According to the Fibonacci model, the next major stop could be near the 1.26 area, where the 161.8% mark from the initial decline from February to March passes. Read next: (XAGUSD) Price of Silver Vs. U.S Yields, Lumber and Corn Futures Dependent on Demand and Supply | FXMAG.COM  
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(USD) Dollar Index - Fed Floors It! Hawkish Rhetoric And Interest Rate Hike? British Pound In Crisis? GBP/USD Affected By Weak Retail Sales Data!

Conotoxia Comments Conotoxia Comments 22.04.2022 12:02
The Dollar Index appears to have risen on Friday to its highest level since July 2020 as expectations rise for a rapid tightening of monetary policy in the US both this spring and summer. Learn more on Conotoxia.com Speaking Thursday at a panel organized by the IMF, the Fed chairman said the central bank is committed to raising interest rates quickly to bring inflation down Investors may have heard hawkish comments from Federal Reserve Chairman Jerome Powell yesterday, who suggested more aggressive rate hikes in the future. Speaking Thursday at a panel organized by the IMF, the Fed chairman said the central bank is committed to raising interest rates quickly to bring inflation down, and added that a 50 basis point rate hike is still on the table for May. Powell pointed out that aside from damaging inflation, the U.S. economy is very strong and the labor market is in good shape. The dollar index seems to have gained for the third week in a row. Powell's speech was followed by opinions from various institutions on how further monetary policy in the US may shape up. Among them, Nomura points to the possibility of hikes of as much as 75 basis points both in June and July. This seems to be one of the bigger predictions for Fed action. Read Next: How To Hedge Against Inflation? Crypto? Is Bitcoin (BTC) The Answer?| FXMAG.COM UK consumer morale was the weakest since 2008 In addition to the strength of the US dollar, today on the currency market we may also observe the relative weakness of the British pound. Macroeconomic data from the UK may have contributed to the GBP depreciation. Retail sales in the UK fell by 1.4 percent in March 2022, which seems to be much worse than market forecasts of a 0.3 percent decline. The data suggests that consumers may be spending less due to rising prices. Additionally, UK consumer morale was the weakest since 2008. The GfK consumer confidence index in the UK fell to -38 points in April 2022, the lowest level since July 2008. As a consequence of the above events, the GBP/USD pair price could fall by almost 1% today, to the lowest level since the end of 2020. Yesterday the pair was quoted at the area of 1.3030, and fall today to the region of 1.2900. The market can still wait for the speeches of Bank of England Governor Andrew Bailey later today. Read Next: Record-Breaking US Dollar To Japanese Yen (USD/JPY): Turbo-accelerated Dollar Index (DXY) Makes Not So Strony JPY Plunge Against The Greenback | FXMAG.COM Since the beginning of the year, the yen seems to have lost about 10 percent against the US dollar Among the world's major currencies, it is also impossible not to pay attention to the recent weakness of the Japanese yen, which is trying to stabilize under the level of 130.00 on the USD/JPY pair. The talks between the Japanese and American sides on taking joint steps to slow down such rapid changes in the exchange rate could help in this process. A meeting was to be held between the Japanese Finance Minister and the US Treasury Secretary on this matter. Since the beginning of the year, the yen seems to have lost about 10 percent against the US dollar. Read Next: Fed Vs. ECB! Market Shocker Is Here! EUR/USD Plunged! (EUR) Shows Its Strength Amid ECB Rhetoric| FXMAG.COM Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Only Ugly US Data Could Reverse Sentiment | Gilt Yields In UK Were Steady To Lower

Dynamic Australian Dollar Against US Dollar (AUD/USD), (CAD) Canadian Dollar's Amid Crude Oil Price, BoE's To Empower British Pound (GBP)? What Are The Trends Of Forex Pairs?

Saxo Bank Saxo Bank 22.04.2022 14:11
Forex 2022-04-22 13:00 5 minutes to read Summary:  An ugly and broad deterioration in risk sentiment yesterday, in part on fresh hawkish comments from Fed Chair Powell, has the US dollar and Japanese yen rallying hard against all other currencies, with EM and commodity currencies seeing the most weakness. This morning, the bottom has dropped out of GBPUSD on greenback strength, but also a sudden jolt of GBP weakness after a sharp contraction in UK Retail Sales in March. FX Trading focus: The twin USD and JPY wrecking balls swinging, GBP thrashed after data, commodity FX also taking it on the chin Well, the euro focus on a more hawkish ECB and a likely solid showing for Macron in the French presidential election run-off this weekend is more than a bit out the window today on the sudden intrusion of an ugly deterioration in risk sentiment yesterday. It started right around the opening bell in the US equity session and continued all day long, aggravated by fresh hawkish comments from Fed Chair Powell that boosted the 2-year treasury yield over 15 basis points. Powell indicated he is in favour of a 50-basis point move in May (already priced, in fact the market has priced marginally higher levels for that meeting, possibly as some believe that the Fed could take the yield straight to 1.00% (maybe, please, please, ditching the 0.25% range of the target yield?). He also said that it is appropriate for the Fed to move a little more quickly and that the US labor market is “unsustainably hot”. This supported the US dollar more broadly than some of the previous surges in US yields on more hawkish Fed rhetoric as risk sentiment took a dive and there is a very different energy suddenly in many commodity linked assets, as markets perhaps begin to fear more for forward demand and recession. More on that in the AUDUSD chart discussion below. The JPY has actually managed to maintain altitude against a very strong US dollar here as the US yield curve has flattened over the last couple of sessions, with longer yields unable to maintain the pace of rises at the front-end of the treasury yield curve. JPY may also be supported on the change of focus as commodity and other traditional pro-cyclical EM currencies have weakened sharply here as well.  A more profound and broader rally in the JPY, however, would likely require a equally powerful rally in long duration global safe haven bonds. Read next (Saxo Bank): Many To Hear About! Fed's Powell, Nasdaq 100, Grains, FX In Today's Saxo Market Call| FXMAG.COM The Riksbank is seen raising rates next Thursday as well The Powell comments yesterday should be the last we see from any Fed member as we enter the blackout period for Fed comments until the other side of the May 4 FOMC meeting. After yesterday’s jolt, we are firmly into a regime of risk sentiment swings dominating until volatility calms, with the starting point quite low for equities and middle-range for FX, although yesterday saw a dramatic acceleration in realized volatility across a broader spectrum of FX and beyond the JPY focus of late, with the CNH weakening move this week adding a significant extra twist. Next week’s US data highlights are the Thursday Q1 GDP estimate and the Friday Mar. PCE Inflation data, while elsewhere, the Bank of Japan meets on Thursday (any tinkering with the existing policy would elicit a massive reaction, particularly as none expected, though discomfort with recent JPY volatility is high). The Riksbank is seen raising rates next Thursday as well – a lot has been priced in there and EURSEK is back above its’ 200-day moving average after a break below on Wednesday due to the weak risk sentiment – but SEK still looks solid. Read next (Saxo Bank): Hawkish Fed Strikes Again! Dynamic US Stocks: Nasdaq 100, S&P 500, Volatile AUDUSD, Microsoft (MSFT) And (GOOG) Alphabet Earnings - QuickTake By Saxo Bank| FXMAG.COM Chart: AUDUSD It is difficult to limit the chart coverage to just one chart, but the sharp and profound reversal in commodity currency- and EM-strength deserves special attention as it has been the most jolting. This broad selling in the US equity market yesterday saw the commodity sector performing weaker than the broader averages and overnight, a pivotal equity for the Aussie outlook, BHP Billiton has likewise suffered a sharp markdown of more than four percent since the Thursday Asian session close and some 9% from its recent peak. The mounting concerns for the Chinese outlook now coupled with the sharpest one-week weakening in the yuan in years are perhaps adding some downside energy to the Antipodean currencies here as well. This morning’s action is already seeing the 200-day moving average in play just below 0.7300 as we are suddenly in danger of a capitulation that re-focuses attention on the massive 0.7000 level that survived its last attack back earlier this year and which still looks like an enormous head-and-shoulders neckline. Source: Saxo Group Sterling took a nasty dive this morning on a very weak March Retail Sales report (off -1.4% m/m for the headline and -1.1% ex Auto Fuel), which underlines the Bank of England’s fear of an impending slowdown on the unfolding cost-of-living crisis. Underlining the risk of cratering activity was the most recent GfK confidence survey, the one released last night for April, which registered the second lowest reading in its more than 40-year history, with only one month in the teeth of the GFC showing a lower level than April’s -38. The market has likely over-estimated the BoE’s potential to hike rates this year, with UK rates slavishly moving higher in sympathy with US rates yesterday. GBPUSD burst down through 1.3000 today and the next natural target is the psychological 1.2500 level, although the ultimate range support is 1.2000. EURGBP is worth watching after this weekend’s French poll as well and with the ECB needing to play some catch-up in the rate tightening game, at least in relative terms (i.e., whether because expectations are over-baked elsewhere or even if expectations continue to ratchet higher everywhere.) Read more: What A Plunge Of Japanese Yen (JPY)! US Dollar (USD) Is Really Strong! Will Bank Of Japan (BoJ) Raise The Interest Rate? USDJPY And More In Eyes Of Saxo Bank| FXMAG.COM CAD binned after its sharp rally.  The market since yesterday proving once again that when risk sentiment deteriorates and crude oil prices head south, CAD will come under pressure, with the timing particularly jolting this week after the very high CPI print brought BoC tightening expectations sharply higher. If oil continues to correct and equity markets capitulate, the local key resistance above 1.2650 doesn’t look to have a chance of holding, with the 1.3000 level the next focus. Table: FX Board of G10 and CNH trend evolution and strength. CAD has gone from top of the lot to a sudden dog in such quick fashion that it has yet to register on the FX Board, which measures trending behaviour – but expect a sharp deceleration in CAD in coming sessions. The CNH move is the most remarkable shift this week, together with the silver weakness as can be seen in the 5-day momentum change reading – a real change of pace. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs. Note the EURGBP crossover attempt today to the upside – this could have legs next week – as could EURNOK also flipping positive, provided oil prices continue to correct. USDCAD is doing its latest whiplash routine, but could hold the new uptrend here if it stays above 1.2600, while gold’s flat performance has been quite impressive but looks threatened on a close to new lows. Note the 12.8 (!) reading for USDCNH – the reason this is so extreme is that it is volatility adjusted and this is the most significant weekly move in USDCNH since at least 2019. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – Canada Feb. Retail Sales 1300 – ECB President Lagarde to speak 1345 – US Apr. Flash Markit Manufacturing and Services PMI’s 1430 – UK Bank of England Governor Bailey to speak
Powell signals Fed needs to be nimble, Canada Inflation hits near 40-year high, bitcoin tries to hold USD20k

What Moves Forex Rates? Strong US Dollar Affects British Pound (GBP), Japanese Yen (JPY) And CNH

Alex Kuptsikevich Alex Kuptsikevich 22.04.2022 13:32
The world's major currencies continue to surrender to the dollar one after another. Since the start of March, the yen has lost 11.5% and fallen to a 20-year low. But just as we saw the third world economy currency stabilise, the currency of the second one went on the move. Chinese currency had previously successfully resisted the strengthening of the USD since the middle of last year, but The dollar has added over 2% to the renminbi since the start of the week, the most significant move since 2015. It is also noteworthy that the Chinese currency had previously successfully resisted the strengthening of the USD since the middle of last year, but in an abrupt move, entered the area of the extremes of the last 12 months. Read next (FxPro): Still Going Up The Price Of Crude Oil (WTI/BRENT) When Energy Stocks Will Start To Soar? | FXMAG.COM We see an equally impressive attack on the Pound. The GBPUSD broke the support at 1.3000 on Friday, and it is already losing more than 1% so far today. USDCHF reached its highest point since June 2020, exceeding 0.9550. Read next (FxPro): Want To Exchange 100 GBP To USD? GBP/USD Below 1.3000! (GBP) British Pound Weakens! GBP To USD - 17-Months-Low! | FXMAG.COM The New Zealand and Australian dollars have been declining steadily since early April, despite hawkish action and comments from respective central banks. Moreover, the export-oriented economies of these countries should benefit from the emerging commodity prices. EURUSD is trading below 1.0800, near 2020 reversal levels and maintaining a very moderate trading range The USDCAD went back to month highs in less than two days, reversing Wednesday's sharp rally and earlier gains from hawkish comments by the Bank of Canada. EURUSD is trading below 1.0800, near 2020 reversal levels and maintaining a very moderate trading range. However, the swing in GBPUSD today and USDCNH throughout the week and the USDJPY drama since early March suggests that EURUSD could be the next victim of dollar bulls.
U.S Yields Expecting Further Increases!?, Announcement Of PMIs Prelims For The Private Sector - FOREX Today

U.S Yields Expecting Further Increases!?, Announcement Of PMIs Prelims For The Private Sector - FOREX Today

Rebecca Duthie Rebecca Duthie 22.04.2022 19:00
Summary: Market sentiment for the EUR/USD currency pair showing bearish signals. Bullish outlook for the EUR/GBP as the EUR strengthens against the GBP. UK retail sales saw a large decrease, causing investor confidence for the currency to fall. USD gains ground on the EUR in light of further expected increases in yields in May The Dollar has strengthened against the EUR since the market opened this morning, in general the dollar is strengthening against all currencies at the moment. After the prelims on private sector PMIs this morning, the EUR originally gained some ground against the USD but has since fallen again, possibly as a result of the new expected increases in U.S yields in May, causing more investor confidence in the USD. EUR/USD Price Chart EUR gains on the GBP as expectations arise for ECB to increase yields. Since the market opened this morning, market sentiment for this currency pair is bullish. The Euro has gained ground on the GBP inlight of the Private sectors PMIs announcements this morning as well as the expectations that the European Central Bank could increase yields in July. EUR/GBP Price Chart GBP Weakens against the USD Since the market opened this morning, market sentiment for this currency pair is bearish. The GBP has weakened against the USD inlight of the announcement of the Feds intentions to increase the U.S yields by a further 50bps, at the same time, UK retail sales saw a large decrease. This fall counteracted the strengthening seen after the increased expectations of the BoE’s interest rates. GBP/USD Price Chart   Related article: https://www.fxmag.com/forex/ecb-announcements-to-possibly-tighten-monetary-policy-strengthens-the-euro-eur-usd-eur-gbp-aud-nzd-and-eur-chf-all-increased The Japanese Yen strengthened against the AUD today. Market sentiment for this currency pair is showing as mixed. In general the JPY has been weakening in the past days. This weakening had pushed the value of this currency pair higher, however, since the market opened this morning, the AUD has weakened against the JPY. AUD/JPY Price Chart Sources: finance.yahoo.com, dailyfx.com
Group Of Market-Movers Collect Next Members!

What's Ahead? New Zealand Dollar To Canadian Dollar (NZD To CAD)! Top-Down Analysis!

Richard Nasr Richard Nasr 25.04.2022 13:10
WEEKLY: Left Chart NZDCAD is overall bearish however, it is approaching a strong support zone in green so we will be looking for buy setups on lower timeframes. M30: Right Chart   Read next: A Reward For A Transaction!? What Is Kishu Inu Coin? ($KISHU) Let's Take A Look At This New Altcoin | FXMAG.COM   NZDCAD is forming a channel in red but the upper trendline is not valid yet, so we are waiting for a new swing high to form around it to consider it our trigger swing. (projection in purple) Trigger => Waiting for that swing to form and then buy after a momentum candle close above it (gray zone) Meanwhile, until the buy is activated, NZDCAD can still trade lower inside the support zone . Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
Fluctuations Of Forex Pairs! US Dollar's Strength Against Japanese Yen Performance (USD/JPY), Jason Sen Comments On Euro To Japanese Yen (EUR/JPY) And NZD/JPY Forex Rate

Fluctuations Of Forex Pairs! US Dollar's Strength Against Japanese Yen Performance (USD/JPY), Jason Sen Comments On Euro To Japanese Yen (EUR/JPY) And NZD/JPY Forex Rate

Jason Sen Jason Sen 25.04.2022 10:11
USDJPY running out of steam in severely overbought conditions as predicted but there is no sell signal yet so I cannot suggest shorts. A break above 129.50 however targets 129.90/95 then 130.25/35, perhaps as far as 130.75/85. First support again at 127.80/70. Expect strong support at 127.10/126.90. Longs need stops below 126.70. A break lower can target 126.00. EURJPY no sell signal yet despite overbought conditions but less than positive candles for the last 3 days probably signal a consolidation ahead. Having held the next target of 139.95/99 perfectly, if we do continue higher look for 140.40/50 & 140.85/95. Minor support at 138.70/50 but below 138.30 can target 137.70/50. ON further losses look for 137.20/10 with best support at 136.50/30 this week. Longs need stops below 136.10. Read next (By Jason Sen): Can (XAUUSD) Gold Price Plunge To $1800!? Silver Price (XAGUSD) To Decrease As Well? | FXMAG.COM NZDJPY holding below 8540 is a sell signal for today targeting 8500 & perhaps as far as strong support at 8450/30. Longs need stops below 8410. First resistance at 8545/65. Shorts need stops above 8485. EURUSD holds 37 YEAR TREND LINE SUPPORT AT 1.0760/20. Longs need stops below 1.0670. Obviously there is nothing more important than this level this week. Again we must beat 1.0840/20 to target 1.0920/40. A break above 1.0960 is a buy signal targeting 1.1030/50. USDCAD messy as we trade sideways for 9 months. We are back above the February lows & the sideways 100 & 200 day moving averages. Further gains test the strongest resistance for this week at 500 day & 100 week moving average at 1.2775/85. Shorts need stops above 1.2800. A break higher should be a medium term buy signal. Read next (By Jason Sen): Euro To US Dollar (EUR To USD): That's An Amazing USD Performance, Will USDCAD (Canadian Dollar) Stay Close? USDJPY (Japanese Yen) Beats Records! | FXMAG.COM First support at 1.2660/40. Longs need stops below 1.2620 GBPCAD support at the April low of 1.6293/81 held again. Strong resistance at 1.6400/20. Shorts need stops above 1.6450. A break higher is a buy signal initially targeting 1.6530/50. A break below 1.6265 is a sell signal. Look for 1.6190/80. Please email me if you need this report updated or Whatsapp: +66971910019 – To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk
5% for the US 10-Year Treasury Yield: A Realistic Scenario

A Market Crash Is Coming? Check How S&P 500, Crude Oil, Hang Seng, USDCNH And Other Assets Performs

Saxo Bank Saxo Bank 26.04.2022 10:34
Macro 2022-04-26 08:34 6 minutes to read Summary:  Market sentiment stabilized yesterday ahead of the heart of earnings season kicking off today, with the slide in the Chinese renminbi halted after official moves signaled some support for the currency. Still, the threat of Covid lockdowns looms in Beijing with tens of millions set for testing. Elsewhere, Elon Musk is set to take Twitter private in a debt-heavy deal, oil rebounded from a deep sell-off and gold has tested existential support. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - S&P 500 futures tested the 4,200 level yesterday as we highlighted was possible but found quick support before bouncing back to close above Friday’s close. That is a short-term positive signal but earning releases this week can still wreck this rebound trade, so we expect volatility to remain high over the coming days. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) - with another round of supportive rhetoric from central bank officials and pledge from the State Council to boost domestic consumption, markets found a bid in morning trading but their gains pared in the afternoon. Hang Seng Index was up 1.5% while CSI300 was down modestly. Chinese mega cap internet names traded in Hong Kong and retailers traded in the mainland were among the top gainers. HSBC reported in-line earnings, but common equity tier 1 (‘CET1’) capital ratio came at 14.1%, down 1.7 per centage point from 4Q21. Share price fell over 3%. Stoxx 50 (EU50.I) - signals from PBOC to support the Chinese economy and better than expected earnings from HSBC, UBS, Santander, and a FY profit guidance increase from Maersk are lifting equity sentiment with Stoxx 50 futures trading around the 3,735 level in early trading hours. That puts European equity futures back into the trading range from the past two weeks, but technically European equities remain weak it requires good news from earnings, China, and the war in Ukraine to move things higher. GBPUSD and USD/commodity currency and USD/EM pairs – with some relief in risk sentiment yesterday, the US dollar rally eased after first having extended its strength earlier in the day. As noted below, much of the force of the recent move has been linked by a jolt higher in USDCNH, which after a long period of quiet is finally catching up to the broader picture of USD strength and adding to that USD strength elsewhere. The weakest of currencies against the greenback in recent sessions have been commodity-linked, EM and Asian currencies with a significant exposure to China, but also sterling, which has suffered a vicious sell-off as the outlook for the UK economy rapidly deteriorates amidst soaring cost-of-living headwinds, cratering confidence, supply-side limitations, and massive external deficits. GBPUSD traders may eventually eye the ultimate support of 1.2000. USDCNH  at the center of the recent violent extension of the US dollar rally has been a marked weakening of the Chinese renminbi, which has come after a long period of extreme quiet even as volatility picked up elsewhere. Yesterday, China moved to cut the reserve-ratio-requirement for Chinese banks’ forex reserves by 1% (to 8% from 9%) to increase the supply of USD, a gesture suggesting that the recent pace of CNY devaluation has proceeded more rapidly than desired. The PBOC overnight promised targeted support for the economy, but the concerns linked to China’s zero-Covid strategy and threat weighs of a lockdown of Beijing similar to the recent experience in Shanghai.  Gold (XAUUSD)  trades back above $1900 supported by higher oil prices and a softer dollar. This following a two-day sell off that was triggered by aggressive US rate hike signals and a sharp drop in silver (XAGUSD) on growth concerns. With support around $1890 holding once again the yellow metal needs a break above support-turned-resistance at $1915. The Fed is currently on a collision course with the PBoC which needs to add stimulus on mounting growth fears, and it raises the question of whether the FOMC will be able to hike rates as aggressively as expected by the market. Until that question gets answered, the market is likely to get its directional input from oil (inflation and geo-risk gauge) as well as developments in China. Crude oil (OILUKJUN22 & OILUSJUN22)  bounced back following a two-day decline that briefly saw Bent crude dip below $100. A lockdown related drop in Chinese demand for fuel together with the prospect of a rapid succession of US rate hikes to curb growth have been the focus this past week. However, with the supply picture being as tight as it currently is, especially with Europe considering a ban on Russian crude imports, any signs of an improve situation in China would attract a renewed bid. Until then these major opposing forces are likely to keep the market rangebound and nervous. In Brent, only a break below $98 would signal additional and potential deep losses from technical selling. Resistance just above $106.50 where the 21- and 50-day moving averages meet. US Treasuries (IEF, TLT)  were sold late yesterday after posting a new 1-week low in yields, taking the yield for the 10-year benchmark back into the range above 2.82%. The high for the cycle in that important yield has been just above 2.95% - with 3.00% perhaps a psychological resistance ahead of the 2018 high near 3.26%. What is going on? US planting progress and crop conditions continue to highlight a challenging situation. A weekly report released Monday showed corn planting (CORNDEC22) had advanced by 3% to being 7% complete, the slowest pace in almost ten years and trailing last year’s pace of 17%. Winter wheat rated good/excellent dropped 3% to 27% and was near the worst on record. The planting delays and conditions have been caused by the weather being too cold, too wet, or a combination of both. Big grain harvests in North America are needed this year after Russia’s invasion of Ukraine has reduced shipments out of the Black Sea, from where 25% of the global wheat export originates, while raising doubts about this year’s crop production in Ukraine. Twitter board agrees with Musk on deal.  The two parties agreed yesterday with a purchase price of $54.20/share translating into a takeover market value of $44bn and part of the deal is massive use of debt which multiplied with the current interest rates will eat most of Twitter’s immediate operating profits, but since the company is going private the profit generation is no longer the main objective. Our view is that Musk’s acquisition of Twitter could be a problem for Tesla going forward as governments may use Musk’s ownership of Twitter against him in negotiations with Tesla. Bank of Canada Governor Tiff Macklem says BoC considering 50 basis point hike.  In testimony before Parliament, Macklem admitted that the BoC “got some things wrong” in its policy mix, voiced concern about broadening price pressures and guided for further tightening. Bank of Canada rate expectations were actually slightly lower yesterday, with CAD moves of late, at least in USDCAD, yesterday more correlated with risk sentiment and crude oil prices. The Bank of Canada is already priced to hike at least 50 basis points at each of its next three meeting. USDJPY lacks direction ahead of BoJ meeting on Thursday. The Japanese yen gains yesterday and overnight were capped by a rebound in US treasury yields. Japan finance minister Suzuki said that there is no truth to the media report on Japan/US discussion on joint FX intervention. While there may be room for a further fall in USDJPY given the outsized gains we have seen so far, policy divergence between the Fed and Japan remains the key theme and any BOJ policy tweak this week remains on watch. US earnings recap.  Coca-Cola beat expectations yesterday and is seeing higher revenue growth than what analysts had expected suggesting analysts are behind the curve on inflation dynamics and what it means for revenue growth. Activision Blizzard also reported earnings yesterday, which is part of the entertainment industry, and reported worse than expected figures with revenue especially disappointing at $1.48bn vs est. $1.81bn. IMF warns on Asia stagflation risk.  IMF has said that the Asian region faces stagflationary outlook with growth being lower than previously expected and inflation being higher. The larger-than-expected slowdown in China due to prolonged or more widespread lockdowns, longer-than-expected slump in the property market, constitutes significant risk for Asia. Monetary tightening will be needed in most countries, with speed of tightening depending on domestic inflation developments and external pressures. IFO April German business confidence surprises on the upside.  The headline index was up at 91.8 versus an estimated 89.0. The current assessment index is moving upward too, at 97.2 versus estimated 95.9. Finally, the expectations index is out at 86.7 versus estimated 83.5. This is very positive, of course. But we think optimism will not last. There are several factors which will negatively impact the German economy in the coming months: the possible new cold war, prevalent supply chain disruptions, higher energy bills, the acceleration of deglobalisation etc. All of this will have negative consequences on the German export industry. Be ready for worse data in the coming months. Inflation is hitting the UK consumer hard. According to the latest ONS survey, 43 % of UK households said they encountered difficulties paying their energy bill in March and 43 % say they will probably be unable to save in the next twelve months. These data are compared with a year ago. Expect UK consumption to fall sharply in the coming months. The likelihood of a recession is increasing, of course. What are we watching next? Risk of further Chinese Covid lockdowns.  The current focus in China as Covid spreads there is Beijing, where partial shutdowns were already ordered yesterday of one region of the city, but with mass testing of 20 million Beijing area residents set to begin. The province of Inner Mongolia is also a focus on concerns that Covid-related disruptions are set to reduce rare earth metal production there. Technology earnings and their profit margins.  Net profit margins are confirming their downtrend in Q1 according to preliminary earnings data, but technology companies measured by the Nasdaq 100 are seeing less impact on margins from rising input costs. As technology companies are the biggest constituents in the main indices it crucial how these companies perform on earnings this week, but also that they can demonstrate less impact from inflation. The first test of this thesis is tonight with earnings from Microsoft, Alphabet, and Visa. Earnings Watch.  Today’s earnings focus is on Microsoft, Alphabet and Visa which are all reporting after the US market close, which is the first real test of the US technology sector for the Q1 following preliminary disappointments from Netflix and yesterday’s Activision Blizzard earnings. Today: Kweichow Moutai, Ganfeng Lithium, First Quantum Minerals, Tryg, FANUC, Canon, HSBC, Banco Santander, Iberdrola, Atlas Copco, Novartis, UBS Group, Kuehne + Nagel, Microsoft, Alphabet, Visa, PepsiCo, UPS, Texas Instruments, Raytheon Technologies, General Electric, Mondelez, Chubb, 3M Wednesday: LONGi Green Energy, Teck Resources, DSV, Novozymes, Kone, Dassault Systemes, STMicroelectronics, Deutsche Bank, BYD, China Shenhua Energy, China Petroleum & Chemical, UniCredit, Keyence, GlaxoSmithKline, Lloyds Banking Group, Yara International, Iberdrola, Assa Abloy, SEB, Credit Suisse, Meta, Qualcomm, Amgen, Boeing, PayPal, ServiceNow, Ford, Southern Copper Thursday: Nokia, Sanofi, TotalEnergies, Denso, Hitachi, Barclays, Nordea, Apple, Amazon, Mastercard, Eli Lilly, Thermo Fisher, Merck, Comcast, Intel, McDonald’s, Linde, Caterpillar, Hershey, Twitter Friday: ICBC, China Yangtze Power, Midea Group, WuXi AppTec, TC Energy, Imperial Oil, Orsted, Neste Danske Bank, BASF, China Construction Bank, Agricultural Bank of China, Ping An Insurance, COSCO Shipping, Eni, AstraZeneca, BBVA, Hexagon, Exxon Mobil, Chevron, AbbVie, Bristol-Myers, Honeywell, Colgate-Palmolive Economic calendar highlights for today (times GMT) 0900 – ECB’s de Cos to speak 1040 – ECB's de Cos to speak 1200 – Hungary Central Bank Rate Decision 1215 – ECB's Villeroy to speak 1230 – US Mar. Preliminary Durable Goods Orders 1300 – US Feb. S&P CoreLogic Home Price Index 1400 – US Apr. Conference Board Consumer Confidence 1400 – US Apr. Richmond Fed Manufacturing Index 1400 – US Mar. New Home Sales 0130 – Australia Q1 CPI  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:    
A Bright Spot Amidst Economic Challenges

Eurozone Amid War And Strong US Dollar (USD), Very Weak Euro (EUR), Poor Australian Dollar (AUD), Recovering (?) UK100?

Jing Ren Jing Ren 27.04.2022 08:31
EURUSD breaks critical support The euro struggles as the eurozone’s growth prospect dampens. The pair remains under pressure after it broke below a short-lived congestion area around 1.0770. A bearish breakout below March 2020’s lows near 1.0650 (a major demand zone) could send the single currency to 1.0580. In the meantime, the RSI’s double-dip in the oversold territory may trigger a buy-the-dips behavior. 1.0750 is a fresh resistance and its breach could alleviate the selling pressure. The bulls must clear 1.0840 before they could regain control. Read next: Powerful (USD), Really Strong (CAD) - US Dollar To Canadian Dollar, Solid NZD Performance, UKOIL To Stabilize? | FXMAG.COM AUDUSD sees limited bounce The Australian dollar recovers over a better-than-expected Q1 CPI reading. A break below March’s low at 0.7170 may have invalidated the recent rebound and put the Aussie on a reversal course in the weeks to come. A bearish MA cross on the daily chart indicates an acceleration to the downside. An extremely oversold RSI on the hourly time frame prompted sellers to take profit, driving the price up momentarily. Stiff selling pressure could be expected around 0.7370. 0.7100 would be the next stop in case of another sell-off. Read next: EUR/USD: US Dollar (USD) Supported By A 75bp Rate Hike!? EUR Influenced By Last Week's Activities, Price Of Gold (XAUUSD) May Not Stop Below $1980 | FXMAG.COM UK 100 struggles for bids The FTSE 100 tumbles as China’s lockdowns hit sentiment. A plunge below the demand zone at 7500 further weighs on the market mood after buyers failed to lift offers around this year’s peak at 7670. The RSI’s overextension led to a rebound. Nonetheless, downbeat sentiment capped the price at 7490 where a new round of sell-off started. Trapped buyers could be scrambling for the exit, compounding existing selling interests in the process. A deeper correction below 7370 would send the index to 7250. Read next: What Is Chia Coin? - (XCH) - First New Nakamoto Coin Since Bitcoin Launch (2009) | FXMAG.COM
US Treasury Yields Surge: Implications for Global Markets and Economies

Solid (USD) Dollar, Not So Strong Euro (EUR)... Who Will Win The Battle? Dollar Index (DXY) Is Rising!?

Saxo Bank Saxo Bank 27.04.2022 15:31
Summary:  EURUSD is closing in on parity. Will it test it and break it? US Dollar Index close to test 2017 peak and resistance. If broken the Index is likely to reach levels not seen in 20 years. A test and especially a break of Parity is for sure something that will create headlines worldwide EURUSD has broken below support at around 1.0730 and is dropping fast towards key support at 1.0340. A break below, which is likely EURUSD will be set for parity i.e. EURUSD at 1.00.That level is not a technical level but merely a psychological level. A test and especially a break of Parity is for sure something that will create headlines worldwide. Read next: Saxo Bank: "FX Update: Tension builds on BoJ policy stance ahead of meeting tonight."| FXMAG.COM If parity is broken we are likely to see a dip to around 0.96 before a bigger correction. 0.96 was the bullish break out level from the 2000-2002 Bottom, Consolidation and Reversal area in the form of a Symmetrical Triangle pattern. RSI below 40 and no signs of exhaustion. Bollinger Bands expanding i.e. we are in initial phase of the (down)trend Source: Saxo Group The US Dollar Index is closing in on 2017 peak at around 103.82. If broken a likely price target is around 110 where there is a cluster of Fibonacci levels. Source: Saxo Group Source: Saxo Bank
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

(GBP) British Pound And (EUR) Euro! Two Weak Currencies! Who's Going To Win? EUR/GBP – Purple War Zones!

Richard Nasr Richard Nasr 27.04.2022 13:05
EURGBP is overall bearish and approaching the upper brown trendline so we will be looking for Trend-Following Sell Setups As per my trading style/plan; Here are the two strong zones where I will be looking for high probability buy setups: I call them War Zones, (highlighted in Purple circles) Zone 1: (around 0.85) This highlighted purple circle is a strong area to look for sell setups as it is the intersection of the green resistance and upper red trendline. (acting as non-horizontal resistance) Zone 2: (around 0.83) This highlighted purple circle is a strong area to look for buy setups as it is the intersection of the blue support and lower red trendline. (acting as non-horizontal support) As per my trading style:As EURGBP approaches one of the purple circles, I will be looking for reversal setups (like a double bottom /top pattern, trendline break , and so on...) Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
Only Ugly US Data Could Reverse Sentiment | Gilt Yields In UK Were Steady To Lower

ING Economics: "Rates and FX are waking up to a less hawkish Bank of England reality"

ING Economics ING Economics 28.04.2022 15:36
Markets are expecting too much tightening from the Bank of England and are slowly waking up to a less hawkish reality. This means gilts will struggle to follow Treasury and Bund yields higher, and the curve should price out hikes. Sterling has started to react to the weaker consumer data and, barring a very hawkish surprise, risks look skewed to the downside In this article The gilt canary in the coal mine Click to scroll down FX: Waiting for the penny to drop We're expecting the Bank of England to hike in May and June, but the tone is turning more cautious. The BoE's voting pattern and lower growth forecast should be hints that hike expectations at the front-end of the curve are excessive. As the central bank hits the pause button in the summer, we expect markets to wake up to the less hawkish reality. The gilt canary in the coal mine After months of being at the forefront of the core rates market sell-off, with a clear underperformance in the second half of 2021 relative to US Treasuries and German Bund when the BoE ramped up its hawkish message, gilts are now warning that the sell-off is running out of steam. A string of weak sentiment data had the market re-rate recession probabilities and gave weight to the comparatively cautious tone adopted by the BoE.Breaking 2% to the upside remains a possibility for 10Y gilts but we expect them to continue to lag Bund and USTs if bond selling resumes. We foresee yields ending 2022 at 1.8% and the rally should accelerate next year. We also caution that impaired liquidity conditions in the gilt market make outright selling by the BoE less likely in the near term. Source: Refinitiv, ING The UK is far from being the only economy with a worrying growth trajectory, and we should eventually see German Bund and US Treasuries catch up to the gilt rally. Our best guess is that will happen in the third quarter this year once the Federal Reserve has a few hikes under its belt and once inflation has stabilised. It is however noteworthy that, after being ahead of the pack when it came to tightening, it now looks as if the BoE has the luxury to adopt a more prudent approach when inflicting more policy tightening on its domestic economy. Source: Refinitiv, ING We have been warning for months that the policy rate path implied by GBP swaps looked too aggressive, but that a turnaround was only likely once the BoE tightening cycle is well underway. "The gilt curve should re-steepen helped by deflating rate hike expectations" Hike expectations have now started to come off, but we think this is only the beginning of the adjustment lower. This has started a race between front and back end rates. We think curve dynamics will depend on when global yields peak. If we’re right in seeing a few more months of global bond sell-off, then the gilt curve should re-steepen during the same period, also helped by deflating rate hike expectations. Our four scenarios for the May BoE meeting and expected market reactions   FX: Waiting for the penny to drop Sterling has had a bad week at the office. The Bank of England's broad trade-weighted measure of the pound has sold off 2% over the last week due to a combination of weak UK consumer data and a much tougher risk environment on the pincer movement of higher US real rates and weaker Chinese growth prospects. Incidentally, GBP/USD has had one of the highest G10 FX correlations with global equities over the last few months. "Sterling has had a bad week at the office" In looking at the various EUR/GBP reactions to the four BoE scenarios outlined above, we have used our Financial Fair Value (FFV) model as a guide. This identifies key drivers of EUR/GBP pricing such as yield differentials, the shape of the UK yield curve, and the equity environment as inputs. The problem is those yield differentials have lost some of their explanatory power recently. In fact, one has to go back to earlier in 2021 when say a 5bp move in the GBP/EUR yield two-year differential was worth about a 1% move in EUR/GBP. A repricing lower of hike expectations means GBP could take a leg lower Source: Refinitiv, ING Assuming that the beta on the yield differential driver is lower, we present more conservative EUR/GBP levels in our scenario analysis above. Our baseline scenario sees some modest GBP weakness, for example, EUR/GBP to 0.8450 on the BoE event risk. But James Smith has been making his case that the BoE Bank Rate will end the year at 1.25% as opposed to the 2.15% currently priced by the market. If and when that penny drops, GBP could take another large leg lower and GBP/USD may end up far closer to the 1.20 level than we had originally forecast. TagsSterling | Interest Rates | Fx | Bank Of England DisclaimerThis publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more (link to: https://think.ing.com/about/content-disclaimer/)
German Export Weakness In The Fourth Quarter Suggests That Recession Fears Are Real

German consumers react to record-high inflation - "ING Economics"

ING Economics ING Economics 03.05.2022 12:20
Inflation in Germany is higher than it has been in decades and consumers are feeling the impact. In our latest ING Consumer Research survey, we take a look at how consumers adapt their financial planning, spending behaviour, and use of home energy and cars to deal with rising prices In this article Impact on budgeting and financial planning Perceived inflation at nearly twice the official figure Car use is down, but not so much for electric vehicles Three in four report having to deal with rising prices for daily-use goods Supporting those that are most impacted will be a challenging task Record-high inflation in Germany has had an impact on consumers’ budgeting and financial planning Impact on budgeting and financial planning German consumers are feeling the effects of record-high inflation numbers. A representative ING survey shows that nearly every other participant has made changes to their budgeting or financial planning. 22 percent have reduced payments into savings accounts or do not save anymore at all, 10 percent have taken money out of savings accounts to deal with rising prices and 7 percent even felt the need to borrow money or use credit lines. Have the rising prices impacted your budgeting or financial planning?Source: ING Consumer Research Perceived inflation at nearly twice the official figure While official headline inflation numbers reached a 40-year high in March at 7.3 percent (and went on to top that at 7.4 percent in April), consumers report even bigger numbers as their perceived inflation over the previous 12 months for goods and services they usually buy – 14.0 percent on average, nearly double the official figure. And they don’t expect inflation to stop there: 86 percent think that prices will continue to rise, whereas a mere 2 percent expect an easing of price pressures. 11.4 percent is the average expected price increase over the coming 12 months. Energy prices have played a large role in driving up inflation. Nearly 80 percent of German consumers report that energy costs with respect to their home have increased during fall and winter. Out of those, 44 percent have responded by using less heating. Over a third have reduced the use of electric and electronic devices. Have the rising energy prices led you to try to save more than before on utilities (electricity, natural gas, heating, etc)? Source: ING Consumer Research Car use is down, but not so much for electric vehicles But it’s not just energy for home use that has become more expensive – German consumers are feeling the inflation at the gas pump as well. More than half of those who own a conventionally powered vehicle report that they have reduced its use. This number is considerably lower for owners of hybrid and electric vehicles; here, 33 percent and 43 percent, respectively, even report increased use due to changing energy prices. These are most probably the ones that own more than one car with different types of power train and have shifted their driving habits from conventional to electrical use. Have the changing energy prices led you to use your car less or more? (Without those that reported a change in use unrelated to energy costs) Source: ING Consumer Research Three in four report having to deal with rising prices for daily-use goods Aside from energy costs, consumers are also impacted by rising prices across many different types of expenses. Daily-use goods such as food and groceries top the list with 75 percent of participants reporting price increases, even though more than half of these have not yet changed their spending habits. How has the rise in prices affected your spending on the following? Source: ING Consumer Research Supporting those that are most impacted will be a challenging task Those that have actually changed their spending behaviour are mainly trying to benefit from sales and special offers (84 precent), switching to cheaper brands is somewhat less popular (56 percent). Just over a fourth have even reduced their consumption to deal with rising prices. Special offers and cheaper brands can only go so far in helping people maintain their level of consumption; and those that feel the worst pressure from rising prices are probably the ones that in the past have already made the most use of these options. Supporting those that are most severely hit by rising prices will prove a challenging task – especially as a number of difficult political decisions lie ahead that could fuel the fire of rising prices even more. TagsInflation Germany Consumers Consumer spending   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Intraday Market Analysis – AUD Is Still Under Pressure

Intraday Market Analysis – AUD Is Still Under Pressure

Jing Ren Jing Ren 04.05.2022 08:35
AUDUSD struggles to rebound The Australian dollar recovered after the RBA raised its cash rate for the first time in over a decade. A break below 0.7100 further weighed on sentiment. Caution still prevails as buyers are wary of catching a falling knife. The RSI’s oversold condition on the daily chart may attract increasing buying interest, notably some short-covering. Nonetheless, the bulls need to lift offers near 0.7170 before a reversal could gain a foothold. This year’s low at 0.6970 is a critical floor and its breach could send the Aussie into 0.68s. NZDUSD becomes overextended The New Zealand dollar steadied after the Q1 jobless rate met expectations. The break below January’s lows at 0.6540 sent the kiwi into a free fall. On the daily chart, a bearish MA cross exacerbated the downward pressure, though the RSI’s incursion into the oversold area may temper the bearish drive. A rebound to 0.6540 may be necessary to recover from the overextension, which could be an opportunity to sell into strength. June 2020’s low at 0.6390 would be the next target when momentum returns. UK 100 grinds resistance The FTSE 100 rallies ahead of the BOE meeting on Thursday. A bullish RSI divergence could be a soothing sign for the bulls as it indicates a slowdown in the sell-off. A bounce above 7490 prompted sellers to cover their positions, further easing the downward pressure. 7580 is the next hurdle and its breach would bring the index back to the double top at 7670, where a breakout could resume the uptrend in the medium-term. 7420 is an immediate support and 7300 an important level to keep the recent rebound intact.
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

AUDNZD – Potential Bearish Reversal!

Richard Nasr Richard Nasr 04.05.2022 13:09
H4: Left Chart AUDNZD is overall bullish however, it is approaching a strong resistance zone in green and upper brown trendline so we will be looking for sell setups on lower timeframes. M30: Right Chart AUDNZD is forming a channel in red but the lower trendline is not valid yet, so we are waiting for a new swing low to form around it to consider it our trigger swing. (projection in purple) Trigger => Waiting for that swing low to form and then sell after a momentum candle close below it (gray zone) Meanwhile, until the sell is activated, AUDNZD can still trade higher. Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
The EUR/USD Pair Showed Local Speculative Interest In Short Positions Yesterday

Key events in developed markets next week - ING Economics - 9/05-13/05

ING Economics ING Economics 08.05.2022 22:15
The Fed will continue with 50bp rate hikes throughout this year despite the fall in CPI figures expected next week. However, the lack of activity in the UK may put a dent in the Bank of England's plans In this article US: Inflation may be past its peak UK first quarter bounce to mask weaker performance in March We expect further rate increases from the Bank of England in June and August before the committee presses the pause button US: Inflation may be past its peak Consumer price inflation is the key number out of the US next week and it should hopefully show inflation has passed the peak with the year-on-year rate slowing from 8.5% to 8.3%, and core inflation edging down to 6.1% from 6.5%. Lower gasoline prices will be a big help, as will a drop in second-hand car prices as heralded by data from the Mannheim car auctions. However, it will be a long slow descent to get to the 2% target. China’s zero-Covid strategy will continue to pressure supply chains as production and distribution of inputs remain disrupted. Geopolitical tensions add to the problems, while the incredibly tight labour market is also putting upward pressure on wages and labour costs more broadly. In an environment of strong corporate pricing power, these costs are being passed onto customers, meaning inflation will be sticky and slow to fall. As such, the Fed will continue to hike rates swiftly with 50bp rate hikes expected in June, July and September. Consumer confidence will also be published by the University of Michigan and equity market weakness coupled with anxiety over the rising cost of living looks set to keep sentiment subdued.  UK first quarter bounce to mask weaker performance in March A strong bounce in UK activity during January should be enough to put in a quarterly growth figure just shy of 1%. But this masks less exciting performance as the quarter went on, and we expect the monthly GDP figure for March to show no growth in economic activity overall. Retail sales fell for the second consecutive month, while health output probably fell again ahead of the end of free Covid testing at the end of that month. That latter factor, combined with early signs of the cost of living squeeze, as well as an extra bank holiday, suggest we should brace for a negative second-quarter GDP figure and indeed weak activity for the rest of 2022. Increasing concerns surrounding growth likely means the Bank of England will hike fewer times than markets expect this year. We expect further increases in June and August before the committee presses the pause button. Developed Markets Economic Calendar Source: Refinitiv, ING, *GMT TagsUnited States Inflation Federal Reserve Bank Of England   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Oil Defies Broader Risk-off Sentiment: Commodities Update

Key events in EMEA next week - ING Economics - (09/05-13/05)

ING Economics ING Economics 08.05.2022 22:33
CPI readings across emerging markets will show fresh increases in prices due to ongoing supply-side shocks Despite anti-inflationary measures in place in Hungary, we expect a further acceleration in headline inflation Hungary: Further acceleration in price pressures expected The highlight of the week in Hungary is the release of the April inflation print, although we don’t think we will have too much to cheer about. Despite the anti-inflationary measures in place, we expect a further acceleration in headline inflation as supply-side shocks and the impact of a weaker forint spill over. Food, durables and services will be the main drivers of the pick up in price pressure. Core inflation is expected to show an even stronger acceleration (here the anti-inflationary measures are having a more muted impact), moving close to the double-digit territory already in April. Based on seasonal patterns, the budget balance could show some improvement in April, but we won’t rule out another downside surprise as the expenditure side remains under pressure. EMEA Economic Calendar Source: Refinitiv, ING, *GMT TagsHungary EMEA   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Pound rises despite Boris turmoil

Is JPY Idle? British Pound To US Dollar (GBPUSD) And EUR/USD Have Decreased. "Risk-aversion lifts (USD) US dollar in Asia" | Oanda

Kenny Fisher Kenny Fisher 09.05.2022 12:54
China concerns boost the US dollar The US dollar booked some modest gains post-Non-Farm Payrolls on Friday, but the dollar index resistance zone at 104.00 held once again. The dollar index finished 0.11% higher at 103.66 having traded in a wide range intra-day. The risk aversion China slowdown price action seen in equities has spilt into currency markets today, lifting the US dollar after US 10-year yields closed comfortably above 3.0% on Friday. The dollar index has risen 0.34% to 104.00 and is, once again, making a determined test of resistance here. Support at 102.50 remains intact. A close above 104.00 will signal rapid gains to 105.00 and in the bigger picture, the technical picture still says a multi-month rally to above 120.00 is possible. EUR/USD and GBP/USD have fallen by 0.35% today to 1.0508 and 1.2290. EUR/USD support at 1.0470 is in jeopardy, while GBP/USD is threatening the Friday lows of 1.2275, having closed on support at 1.2325 last week. EUR/USD rallies above 1.0650 will be challenging to sustain now, with the 45-year trendline at 1.0800 now distant. Similarly, GBP/USD will run into headwinds between 1.2400 and 1.2500. The technical picture signals much lower levels for both and a formal declaration of war from Mr Putin against Ukraine today will signal a test of 1.0300 and 1.2000 in the coming days, if not sooner. USD/JPY has crept higher over the past few sessions, rising 0.30% today to 130.95. With the Bank of Japan showing no signs of adjusting its 0.25% JGB yield cap, and US rates continuing to climb as the Fed gets busy fighting inflation, downside pressure on the yen seems inevitable. Support lies at 128.50, but a rally by USD/JPY through 131.35 sets the stage for a move to the 135.00 area. Plummeting stock markets in Asia appear to be prompting heavy outflows from Asian currencies today, with USD/CNH and USD/CNY over 0.50%, as are the USD/THB and USD/INR. Elsewhere across the region, the US dollar has booked 0.30% plus gains versus the IDR, SGD, MYR, and KRW. Chinese officials have still not made overt noises about the pace of the CNY sell-off to 6.7050, despite setting a slightly stronger fixing today. USD/INR has traded at all-time highs around 77.255 today and has fallen around 1.80% since the RBI’s last week. That does leave the RBI in somewhat of a bind, and it is an issue the Bank Indonesia and others around Asia will be feeling sooner, rather than later. In the first instance, thanks to Asia’s huge FX reserves, I expect some judicious “smoothing” to be the first strategy. Indonesia, the Philippines, and South Korea have already taken this route, I suspect. If international sentiment continues to fall and the US dollar continues to gain, those noises may get louder, but ultimately, regional central banks will fight a losing battle if China remains comfortable with yuan depreciation. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
(EUR/USD) - An Eye For An Eye And A Tooth For A Tooth, US Dollar To Canadian Dollar - CAD Has Weakened, DAX (GER 40) Has Slid | Orbex

(EUR/USD) - An Eye For An Eye And A Tooth For A Tooth, US Dollar To Canadian Dollar - CAD Has Weakened, DAX (GER 40) Has Slid | Orbex

Jing Ren Jing Ren 09.05.2022 13:00
EURUSD consolidates The US dollar climbed after better-than-expected NFP in April. The euro is licking its wounds after it broke March 2020’s lows near 1.0640. The price is seeking support above March 2017’s lows (1.0500). The previous rebound came to a halt at the support-turned-resistance at 1.0640. A bullish breakout could drive the bears into giving up their chips, reducing the pressure and potentially paving the way for a rally towards 1.0810. A fall below the current consolidation range (1.0480) would send the single currency to 1.0400. USDCAD bounces higher The Canadian dollar softens as April’s labour market performance fell short of expectations. A combination of a break above March’s high (1.2900) and a bullish MA cross on the daily chart confirms the market’s upbeat mood. The latest retracement found support in the major demand zone over 1.2720. A break above 1.2840 may have flushed remaining selling interests out. Last December’s high at 1.2960 is the last hurdle and its breach could open the door for an extended rally above 1.3100. GER 40 struggles for support The Dax 40 tumbles as risk appetite subsides amid global policy tightening. The index has met stiff selling pressure at the origin of the late April sell-off at 14300. A drop below the psychological level of 14000 prompted buyers to bail out, invalidating the latest rebound in the process. A bearish MA cross is another sign that an imminent sell-off could be building up. A deeper correction below 13570 would send the price action to 13300. 13820 is a fresh resistance in case of a rebound.
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

ING Economics: FX Daily: Renminbi re-appraisal keeps emerging market FX on back foot

ING Economics ING Economics 09.05.2022 08:52
The dollar starts the week at marginal new highs, driven by the three key themes: i) Fed tightening ii) the war in Ukraine, and iii) the China slowdown. All three themes are showing no signs of reversing, although we should see slightly softer US inflation this week. For the near term, however, expect the dollar to continue higher and EM FX to stay pressured In this article USD: Dollar may receive most support from external events this week EUR: ECB concern against the weak euro offers little help GBP: Plenty of challenges this week CZK: Personnel changes un-nerve the koruna USD: Dollar may receive most support from external events this week We can probably all agree that there are three key themes driving the dollar at the moment. The first is the Fed's aggressive tightening prospects as it responds to core inflation above 6%. Importantly, expectations of the Fed cycle remain resolute, with a terminal rate priced near 3.25% next year. The second is the tragedy of the war in Ukraine, which has delivered a stagflationary shock most keenly felt in Europe. And the third is China's keen pursuit of its zero Covid strategy, which is now triggering a fresh round of growth downgrades and disruptions to global supply chains. What's the path for these themes this week? Let us start with Ukraine. The G7 has committed to a Russian energy embargo as soon as possible and the fact that the US is now sanctioning executives at Gazprombank - the key transit for European energy payments to Russia - looks like a sign that a full energy embargo is close at hand. This has implications for European growth. The market will also be on the lookout for any fresh messages today from the Kremlin on Russia's victory day commemoration. Any benign communication here looks unlikely. Regarding China, investors continue to re-appraise the prospects for China's economy and asset markets. The onshore renminbi has today broken through the important 6.70/USD level. As we have noted recently, USD/CNY losing its anchor has added to global FX volatility and weighed on China-correlated currencies, such as the South African rand and the Brazilian real. An extra layer here could be the reluctance of investors to hold BRICS currencies as 'sphere of influence' geographic preferences start to emerge. With industrial metals taking another leg lower, it still seems too early to call the low in the renminbi. Perhaps the best chance of dollar stability this week comes from the US April CPI data released on Wednesday. Lower gasoline and used car prices should knock headline and core CPI off its highs. Any larger than expected falls can perhaps suggest that the Fed need not be as aggressive in its hiking plans. And there are plenty of Fed speakers this week too. But some softening of the Fed tightening profile looks wishful thinking at this stage and it looks dangerous to position against further dollar strength. DXY is now trading at the highest levels since 2002. Barring a much weaker than expected US inflation figure on Wednesday, we should expect it to grind higher still. At the same time, US 10 year real yields pushing further into restrictive territory make for a challenging time for equity and credit markets - favouring risk-averse positioning.   EUR: ECB concern against the weak euro offers little help EUR/USD remains very soft and has derived little or no support from European Central Bank comments in effect that any further euro weakness is undesirable. Looking at a variety of ECB estimates on the relationship between euro FX changes and eurozone CPI, the largest estimate is somewhere in the region of a 1% fall in the trade-weighted euro adding 0.1% to headline CPI. Currently, the trade-weighted euro is down 6% year-on-year - potentially adding 0.6% to headline CPI. That would normally be large, but in today's world of supply shocks and war in Europe, is being rather dwarfed. And equally, ECB remarks that it could hike three times this year has had little effect on EUR/USD - faced with a 300bp tightening cycle from the Fed. Expect EUR/USD volatility to stay high and a break below 1.0500 could easily be seen this week towards the next major support at 1.0350. Asian FX intervention to support local currencies may also be depressing EUR/USD - as reserve managers reduce euro holdings in reserves to rebalance portfolios after dollar intervention in Asia. GBP: Plenty of challenges this week Having suffered heavily last week, this week looks to be an equally formidable one for sterling. 1Q22 GDP is released on Thursday which may start to show the slowdown emerging in March, ahead of what could be a negative quarterly reading in 2Q22. The market still prices the Bank Rate at 2.15% by the end of the year - pricing which looks vulnerable. However, we do have a hawkish MPC member, Michael Saunders, speaking at 14CET today. Tomorrow sees the Queen's speech at the opening of parliament. Political commentators have been discussing the risk that, after a poor showing in local elections, the UK government will look to push ahead with a legislative agenda that could be more combative on Northern Ireland trade. The current UK trade deal is not that much better than a no deal - yet UK government threats to tear up the N. Ireland protocol will likely weigh on a vulnerable pound. Cable looks headed to 1.20 and EUR/GBP to 0.86.  CZK: Personnel changes un-nerve the koruna EUR/CZK spiked on Friday afternoon after Czech media reported that the Czech National Bank (CNB) dove, Ales Michl, would likely be the successor to outgoing governor Jiri Rusnok whose term ends in June. Given that the CNB has been one of the most hawkish central banks in the world over the last few years, this has naturally raised much uncertainty. Volatility looks assured over the next two months as the existing hawks have one last chance to express themselves at the 22 June meeting. Yet, the Czech koruna may remain fragile on a potentially big shift in direction in the second half of this year. And it may be hard to rule out EUR/CZK heading back to the 25.80/26.00 area, where the CNB will likely threaten to intervene again to support the CZK. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Short Squeeze - What Is It? | Binance Academy

End Of Utopia!? Current Strength Of (USD) US Dollar Has Some Disadvantages... Does Fed Bear Them In Mind?

Chris Vermeulen Chris Vermeulen 09.05.2022 17:26
The US Dollar continues to attract capital from investors all over the world. But could this be a double-edged sword for US stocks? As capital flocks to the USD, this in turn hurts US multinationals as they need to convert their weak foreign currency profits back into USD. The USD safe-haven trade may eventually trigger a broad and deep selloff in US stocks. As the USD continues to strengthen, corporate profits for US multinationals will shrink or disappear. US Multinational $1 Billion Revenue Example: $1 billion in revenue-generating a 15% net profit with a net neutral 0% currency translation equals a $150 million profit. $1 billion in revenue-generating a 15% net profit with a negative -15% unfavorable currency translation expense equals a $0 profit! In addition, the impact of inflation on the global consumer will lead to a pullback in consumer spending which will further reduce corporate revenues and profits. The combination of the global currency dislocation along with the economic cool off will bring on a global recession. The following chart by Finviz shows the percentage the USD has appreciated against all the major global currencies year to date: Let’s review a few of these primary currencies to get a better idea of how much capital is migrating out of each of these countries and into the US dollar.       CANADIAN DOLLAR LOSING -7.29% The Canadian Dollar CAD peaked in the first week of June 1, 2021. The Canadian economy has benefited greatly from soaring energy and commodity prices, strengthening metals markets, and strong real estate prices. But despite this economic strength capital is still migrating out of the CAD and into the USD. INVESCO CURRENCY SHARES • CANADIAN DOLLAR TRUST ETF • ARCA • WEEKLY SWITZERLAND FRANC LOSING -12.53% The Switzerland Franc CHF peaked in the first week of January 6, 2021. The CHF has long been considered a safe haven for global capital during times of risk-off global market stress. The primary factor hurting the CHF is its current fiscal policy and negative interest rate of -0.75%. Therefore, the USD is still the preferred safe-haven currency due to CHF’s negative rate. Capital continues to flow out of the CHF into the USD. INVESCO CURRENCY SHARES • SWISS FRANC TRUST ETF • ARCA • WEEKLY BRITISH POUND LOSING -13.87% The British Pound GBP peaked in the first week of May 24, 2021. The GBP was the primary global reserve currency in the 19th century and the first half of the 20th century. However, that status ended when the UK almost bankrupted itself fighting World Wars I & 2. Since that time the US dollar has replaced the GBP as the primary reserve currency. The USD has a similar interest rate to the GBP and is also benefiting from its strong presence in energy and commodity markets. Therefore, the GBP is experiencing capital flows out of its currency and into the USD. INVESCO CURRENCY SHARES • BRITISH POUND TRUST ETF • ARCA • WEEKLY JAPANESE YEN LOSING -23.76% The Japanese Yen JPY peaked in the first week of March 2, 2020. The JPY has also long been considered a safe haven for global capital during times of risk-off global market stress. However, the primary factor hurting the JPY is its current fiscal policy and negative interest rate of -0.10%. Therefore, the USD is still the preferred safe-haven currency due to the JPY’s negative rate. Capital continues to flow out of the JPY into the USD. INVESCO CURRENCY SHARES • JAPANESE YEN TRUST ETF • ARCA • WEEKLY How We CAN HELP YOU Navigate Current Market Trends At TheTechnicalTraders.com, my team and I can do these things to assist you: We reduce your FOMO and manage your emotions. We have proven trading strategies for bull and bear markets. We provide quality trades you can trust. We tell you when to take profits and exit trades. We save you time with our research. We provide above-average returns/growth over the long run. We have consistent growth with low volatility/risks. We make trading and investing safer, more profitable, and educational. Sign up for my free trading newsletter so you don’t miss the next opportunity! Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens. Historically, bonds have served as one of these safe-havens, but that is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there and how can they be deployed in a bond replacement strategy? We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

FX Daily: Beware of short-lived rallies | ING Economics

ING Economics ING Economics 10.05.2022 10:22
Some stabilisation in risk sentiment after yesterday's equity sell-off could help high-beta currencies recover some ground today. The dollar might feel some pressure, although buy-the-dip interest may emerge given the backdrop of Fed tightening, growth concerns and an unstable risk environment. The illiquid NOK may struggle to recover just yet In this article USD: Any weakness looks unlikely to last EUR: Eyes on ZEW and ECB speakers GBP: Seeking more stability NOK: Liquidity is an issue We have published our monthly FX update, for more details see: "FX Talking: Feeling the squeeze" USD: Any weakness looks unlikely to last Global equity futures are pointing to a tentative rebound in global risk assets today after a major sell-off yesterday triggered by fears of an economic slowdown at a time when central banks are tightening policy. It is not surprising to see the dollar remain strong in such an environment, retaining its safe-haven attractiveness whilst still benefiting to a certain degree from the Fed’s front-loaded tightening story. It is also quite predictable to see high-beta currencies bear most of the brunt in the current market conditions: liquidity considerations could be behind the Norwegian krone's exceptional underperformance (more in the section below), while concerns over China’s economic outlook continue to weigh on the Aussie and New Zealand dollars.  Low-yielding currencies, including the pro-cyclical euro and pound, seem to be finding some favour from the markets, although prolonged market volatility and instability in sentiment look unlikely to generate any other winners outside of the dollar or the traditional safe-havens (Japanese yen and Swiss franc). Yesterday, the Fed sounded the alarm on worsening liquidity conditions across key markets and warned of the increasing risk of a “sudden material deterioration”. Historically, tighter financial conditions tend to raise demand for dollars. It’s a quiet day in the US calendar today, with some focus only on the NFIB Small Business Optimism survey for April. There are, however, a number of Fed speakers scheduled this afternoon: the “neutral” John Williams and Tom Barkin, the dove Neel Kashkari and the hawks Loretta Mester and Christopher Waller. The impact of any policy comment might, however, be reduced as markets may wait for tomorrow’s CPI figures before any material re-adjustment in the Fed’s rate expectations. We think risk sentiment will drive almost all FX moves today. A risk-on rebound may be on the cards after yesterday’s slump, and commodity currencies may recover some ground, to the detriment of the dollar. Given the general instability in the global risk environment, some interest in buying the dip in the dollar should remain high and we do not expect any sustained USD underperformance in the near term. EUR: Eyes on ZEW and ECB speakers EUR/USD is once again attempting to find some support in the upper half of the 1.05-1.06 range. Some resilience amid yesterday’s turbulent market conditions and a potential stabilisation in risk sentiment today could combine to fuel a break above 1.0600 today. Still, the upside remains limited – in our view – given some USD buying and lingering concern about the ban on Russian oil currently under discussion in the EU. Hungary’s opposition is the key hurdle at the moment, and talks between Brussels and Budapest are set to resume today after President Orban opposed the embargo despite the EU allowing more time for Hungary to comply. On the data side, markets will focus on ZEW figures out of Germany today. Both the “expectations” and “current situation” surveys are set to show another drop in May given high energy prices and the prolonged geopolitical risk. However, the impact on EUR/USD of the latest ZEW releases has been quite negligible. There are also a few ECB speakers to keep an eye on today, as markets now appear to cement their expectations around a July hike (which is also our base case) but remain torn around the size of rate increases in 2022. One of the most hawkish members of the Governing Council, Germany’s Joachim Nagel, will speak first this afternoon, followed by the more moderate François Villeroy and Luis De Guindos. We see some modest upside risk for EUR/USD today, with any rally possibly stalling already around the 1.0650 level. GBP: Seeking more stability The pound is finally finding some stability after a rough couple of weeks. Some stabilisation in sentiment should offer additional support today, and possibly help a return to the 1.2500 mark in GBP/USD. Still, the market’s overly hawkish expectations on Bank of England tightening and uncertainty around the British economic outlook are set to keep GBP/USD capped in our view. We have a 1.2400 target for cable for the summer months, followed by a very gradual recovery in 2H22.   The UK data calendar is empty today, and there are no scheduled BoE speakers. NOK: Liquidity is an issue The Norwegian krone is finding some modest support this morning, following a general rebound in high-beta currencies and some above-consensus CPI figures in Norway, which showed an acceleration in headline inflation to 5.4% and in the core rate to 2.6%. The release endorses our view that Norges Bank will bring interest rates to 1.50% by year-end, with risks skewed towards an even faster pace of tightening. The domestic backdrop is therefore set to remain quite supportive for NOK, and so should the commodity picture – especially if the EU implements the Russian oil ban. However, NOK is the least liquid currency in the G10, which makes it exceptionally vulnerable and volatile during periods of risk sentiment turbulence. Until risk assets find some peace, despite monetary tightening and global slowdown concerns, NOK will struggle to recover. Once the dust settles, however, NOK’s set of attractive fundamentals should fuel a gradual return to the 9.50-9.70 area – which we expect to materialise in the second half of the year. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

FX Talking - Feeling the squeeze | Introduction, EUR/USD & USD/JPY | ING Economics

ING Economics ING Economics 10.05.2022 11:47
Global financial markets have started to really feel the squeeze as the Fed pushes ahead with aggressive tightening at a time when events in Europe and China are repricing global growth prospects lower. This is clearly a bullish environment for the dollar – a currency that tends to correlate inversely with the global growth cycle. In what should be a difficult period for equity and credit markets, we would expect the dollar to stay strong this summer. After all, we are still at the stage of front-loaded Fed tightening. Doubts about the end of globalisation and the need for structurally higher interest rates should also maintain FX volatility at its recently elevated level. In practice, we think this means that EUR/USD can trade in a pretty wide range for the rest of the year – perhaps 1.00-1.10 with a downside bias over coming months. USD/JPY gains over 130 may well be harder work now, but GBP looks increasingly vulnerable given that investors still price the Bank of England’s Bank Rate well over 2.00% this year. Read next: FX Daily: Beware of short-lived rallies | ING Economics| FXMAG.COM Elsewhere in Europe, currencies in the Central and Eastern Europe region remain very volatile and under pressure. The zloty would be our preferred pick on a longer-term view, while the forint remains fragile as twin deficits return to focus. Personnel changes at the Czech National Bank have raised uncertainty around the path of the most favoured currency – the Czech koruna. Risk aversion and the China slowdown are making life hard for many commodity currencies. Most vulnerable look the likes of the Brazilian real and South African rand – with close links to China. The renminbi itself remains fragile, with USD/CNY risk to 6.80. Developed markets EUR/USD Push Me, Pull Me Current spot: 1.0522 The dollar is being pulled higher by the Fed’s decision to take some steam out of the US economy by hitting the monetary brakes hard. 75bp of tightening has been seen so far this year and another 200bp could be seen by December. US 10-year real interest rates have turned positive, in a sustainable way, for the first time since 2019. These could well rise another 75-100bp. And the dollar is being pushed higher by weakening growth prospects in Europe and China, where the war and lockdowns have added to supply chain dysfunction and hit growth prospects EUR/USD is a pro-cyclical currency, and the cycle doesn’t look good. We cannot rule out EUR/USD at parity this year. Read next: Rates Spark: Markets are doing central bankers’ job | ING Economics| FXMAG.COM USD/JPY Official concern and stretched valuations may help JPY Current spot: 131.22 The USD/JPY rally has temporarily stalled around the 130 area. Limiting the move may be two factors: i) Japan’s Ministry of Finance expressed ‘extreme concern’ with the recent spike to 131 – suggesting intervention may not be far off. ii) USD/JPY looks pretty stretched on our medium-term BEER valuation model. We think we’re now in the hard yards of the USD/JPY rally. That it is not to say that USD/JPY cannot push further were US Treasury yields to push substantially higher, but the move will be hard work. Given a tough risk environment (higher real rates, weaker growth, credit markets unprotected) JPY can outperform on crosses. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

(EUR/USD) Wall Street Tanks, Allowing the Euro To Slightly Recover, (EUR/GBP) Goldman Sachs Betting Against GBP, JPY Gets The Better Of The US Dollar And EUR - Good Morning Forex!

Rebecca Duthie Rebecca Duthie 10.05.2022 11:58
Summary: Euro gained slightly against the USD after the poor performance of the US markets on Monday. Goldman Sachs placing their confidence in the value of the EURO. JPY gains slightly against the EUR and USD on Tuesday. Read next: (EUR/USD) US Dollar Continues To Trump the EUR, (EUR/GBP)(GBP/JPY) Pound Sterling Unlikely To Recover Anytime Soon.  EUR gains some ground against the USD. Markets turned around on Monday with the EUR/USD currency pair with market sentiment showing bullish signals. The Euro is gaining value despite the surging US Dollar, at the end of the trading day on Monday Wall Street has tanked with the Nasdaq down 4.29%. As investors turn away from risky assets such as forex, and move to safer investments such as treasuries, the value of the US Dollar is facing potential pressure. Investors are concerned around the Feds shrinking balance sheet as liquidity dries up. EUR/USD Price Chart Pound Sterling losing value against the Euro. On Tuesday, Goldman Sachs bet the EUR will continue to gain against the GBP, as the market for the EUR/GBP currency pair continues to reflect a bullish sentiment. The European Central Bank (ECB) seems intent on raising interest rates by the summer, showing a more hawkish attitude than the Bank of England (BoE) who believe that inflation will return to normal levels on its own. This BoE attitude is causing investors to lose confidence in the Pound Sterling and causing its value to decrease. EUR/GBP Price Chart JPY receives momentary relief from the USD Although the JPY has gained on the US Dollar on Tuesday, the USD/JPY currency pair is reflecting a bullish market sentiment. The strengthening against the USD comes after the carnage the US markets saw on Monday. Whether or not this strengthening will continue is unlikely as the Bank of Japan (BoJ) continues their monetary easing in their attempt to boost the economy. USD/JPY Price Chart JPY markets best performer on Monday The EUR is losing ground to the JPY during the trading day on Tuesday, the EUR/JPY currency pair is reflecting a mixed market sentiment. As risk averse investors fled to safety assets given the US markets performance, the Japanese Yen was the forex markets top performer on Monday, which gave it the chance to strengthen against the EUR and the USD. EUR/JPY Price Chart Read next: (EUR/USD) All Eyes On The US Bureau Of Labour Statistics’ Results Due On Friday, (EUR/GBP) Bleak Economic Outlook For the UK Sends GBP Spiralling - Good Morning Forex!  Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com
Happy CPI-Day, with love, OPEC: S&P500 Slips, Oracle Plummets, and Oil Hits a 10-Month High

Is Euro (EUR) Going To Rise And Successfully Pursue (USD) US Dollar? Unexpected rise in German economic sentiment supports the euro | FxPro

Alex Kuptsikevich Alex Kuptsikevich 10.05.2022 15:42
Economic Sentiment in Germany rose unexpectedly, according to the latest May assessment. The corresponding ZEW indicator rose to -34.3 in May from -41.0 a month earlier against expectations of a dip to -43.0. Germany, for which China is the main export market, is looking with concern at the lockdown in the second world economy Meanwhile, current assessment of the economic situation continues to deteriorate, both under the influence of the situation in Ukraine and due to a slowdown in China. Germany, for which China is the main export market, is looking with concern at the lockdown in the second world economy and the resulting economic slowdown and falling demand for machinery and cars from Germany. The positive surprise helps EURUSD stabilise near 1.0500 Despite the lapse in the current assessment, investors and traders are paying more attention to sentiment. The positive surprise helps EURUSD stabilise near 1.0500 and reinforces bulls' hopes that a straight road below parity is not yet a done deal.
Bitcoin Stagnates at $30,000 Level, Awaits US Bitcoin ETF Update and Fed Meeting

Saxo Bank | FXO Market Update - AUDUSD makes new lows and vols are bid

Saxo Bank Saxo Bank 10.05.2022 19:27
Summary:  Risk continue to trade fairly poor while FX getting some relief from the USD bid. EURUSD and USDJPY been relative stable over the last session while AUDUSD is down from 0.7075 on the opening yesterday to 0.6920 lows today. Vols continue to trade bid and AUD vols are considerably higher after the last days move, 1 month AUDUSD up 2 vol from Friday to 15.25. Saxo Bank publishes two weekly FX Options Market Update reports covering changes and updates on the FX Options and FX Volatility market. They describe changes in FX volatility levels, risk premium and ideas how to trade based on these.FX volatility, source Saxo Bank. Vol column: At-the-money volatility for the given maturity. 1w column: Change of the at-the-money volatility for the given maturity over the last week. Source: Bloomberg, Blue: AUDUSD spot, Black: AUDUSD 1 month vol, Red: AUDUSD 1 month risk premium Risk continue to trade poor with equities another leg lower yesterday. FX trades relative stable with EURUSD holding above 1.0500 and USDJPY trading around 130.00 for the last week. Implied vol trades bid while realized vol starts to come lower in some pairs. AUDUSD traded down to 0.6920 today before data came out and showing strength of retail volumes. AUDUSD vols are turbo bid after spot has dropped from 0.7075 on the opening yesterday to 0.6920 lows today. 1 month is up from 13.25 on Friday to 15.25 now, trading as high as 15.70 earlier in Asia with spot on the lows. 1 month risk reversal has moved from 1.8 to 2.8 for puts in the same time and the risk premium has widen over the last days and currently trades at 2.3 vol. Next big data point is USD CPI tomorrow and consensus is for a move lower to 8.1 from the peak at the last reading at 8.5. If this happens we might get a relief rally in risk and USD to trade lower as we get a first indication of a turn around. The elevated vol and risk reversal makes it attractive to sell AUDUSD puts as a trade for a low CPI reading tomorrow. Sell 1 week 0.6900 AUDUSD putReceive 36 pips Alternative Sell 1 month 0.6700 AUDUSD putReceive 40 pips Spot ref.: 0.6960 Source: Saxo Bank The Top/Bottom charts shows the top 5 and bottom 5 values/changes for at-the-money vol, risk reversal (RR) and risk premium of the 45 currency pairs we are tracking. Risk premium: Implied (Imp) minus realized volatility. A positive risk premium means implied volatility trades above realized volatility, i.e. the implied volatility can be seen as “rich”. Change: The difference between current price/volatility and where it closed 1w ago. FX Options Trading: You should be aware that in purchasing Foreign Exchange Options, your potential loss will be the amount of the premium paid for the option, plus any fees or transaction charges that are applicable, should the option not achieve its strike price on the expiry date If you write an option, the risk involved is considerably higher than buying an option. You may be liable for margin to maintain your position and a loss may be sustained well in excess of the premium received. By writing an option, you accept a legal obligation to purchase or sell the underlying asset if the option is exercised against you; however far the market price has moved away from the strike. If you already own the underlying asset that you have contracted to sell, your risk will be limited. If you do not own the underlying asset the risk can be unlimited. Only experienced persons should contemplate writing uncovered options, then only after securing full detail of the applicable conditions and potential risk exposure. Learn more about FX Options: Forex Options – An introduction Forex Options – Exotic options Forex Options - Webinars
Podcast: BoJ losing control. Geopolitical risks for Tesla

Skyrocketing US Dollar (USD) Can Be Even More Boosted! US CPI Preview: Hard core inflation to propel dollar to new highs, and two other scenarios

FXStreet News FXStreet News 10.05.2022 16:50
Economists expect core US inflation to have risen by 0.4% MoM in April, a dollar-supportive figure. A repeat of March's 0.3% gain would sink the greenback on talk of "peak inflation." Conversely, an increase of 0.5% in underlying prices would put a 75 bps rate hike firmly on the table. Is that the peak over there? That question for mountain climbers resonates with investors, who are eager to see where inflation reaches its limits. The longer the fog continues, the longer the bloodbath in markets. For the dollar, it is a boon. The greenback's next significant moves hinge on the Core Consumer Price Index (Core CPI) which is projected to have risen by 0.4% in April and 0.3% in March. That surprisingly low figure in the previous month fuels hopes for a lower read this time and a light at the end of the tunnel for stock traders. I will argue that this light is only a fleeting glimpse. Why it matters First, why is Core CPI more important than headline CPI? While Americans undoubtedly consume gasoline and food, these items' prices are volatile and the Federal Reserve has little impact on them. These are mostly supply-side issues driven by global forces such as Russia's war in Ukraine and OPEC+ petrol output. The dollar moves to the tune of the Fed's interest rates. What the Fed can significantly impact is demand – if it raises interest rates, consumers are motivated to save money rather than take loans to make big purchases. It has vowed to bring inflation down with higher borrowing costs – and it can afford to do so. The latest jobs report showed a tight labor market. Employment has room to climb down from the highs. Why are monthly figures more important than yearly ones in the upcoming release? In the upcoming annual calculation, April 2021 will be omitted to include changes seen in April 2022 – and that month was different. Stimulus bump: Source: FXStreet At this time last year, inflation jumped due to the one-off effects of the rapid reopening of the economy and stimulus checks, while April this year was already a normal month. Core CPI leaped by 0.9% in April 2021 and no economist expects a similar rise this time. That is why annual figures are set to fall significantly, putting the focus on monthly data. Expectations and reactions 1) Core CPI at 0.4% as expected: As I have mentioned, estimates stand at a 0.4% increase in Core CPI MoM and every tenth of a percent matters. This is the most likely scenario and is a dollar-positive one. The 0.4% estimate comes after economists had missed last month's figure by 0.2%, so they are likely more cautious this time around. On an annualized basis, it would reflect a rise of almost 5%, substantially above the Fed's 2% target. It would also be higher than the 0.3% level recorded in March and would label that figure as a one-off slow down in price rises. In other words, peak inflation would remain a mystery. At the time of writing, bond markets foresee a 95.9% chance of a 50 bps hike. That may change. Source: FXStreet For the dollar, it would extend the greenback's rise – give it a green light to move higher after the pause in recent days. This scenario has a high probability. 2) Core CPI at 0.3%, below expectations: This scenario is based on the fact that persistently high energy prices have left less money in Americans' pockets for other goods and services, alleviating price pressures. It is also backed by the slowdown in monthly Average Hourly Earnings for April– 0.3% vs. 0.4% expected – but these monthly changes are prone to revisions. March's wage figure was revised up. Nevertheless, if America records two consecutive months of 0.3% underlying inflation rises, it would strengthen the Fed's conviction of raising rates by only 50 bps in June, lowering the chances of a bigger 75 bps increase. That would hurt the dollar and this scenario has a medium probability. An even bigger downfall with 0.2% would already put "peak inflation" high on the agenda, but the chances are low. 3) Core CPI at 0.5%, above expectations: This figure beat estimates in three of the past six releases, so an upside surprise cannot be ruled out. I will stress again, that it is only a tenth of a percentage point, but one that can make a big difference in the dollar's direction. Latest Core CPI outcomes: Source: FXStreet Such an outcome could represent a catch-up in price rises after the relative slowdown or could be boosted by one-off factors. For the dollar, it would represent a considerable shot in the arm, propelling it higher. Bond vigilantes would begin circling around a 75 bps hike once again. This scenario has a lower probability. Final thoughts The Fed is focused on inflation, not employment, and every tick in underlying prices would have an outsized impact on markets. The base case scenario is of ongoing high inflation – an ongoing hawkish approach by the world's most powerful central bank – and a driver of further dollar gains.
Crucial Upcoming PMI Data and High-Stake Meetings Shape China's Economic Landscape

Is It The Time British Pound Unleashes Its Potential!? British Pound To US Dollar (GBP/USD) – Potential Bullish Reversal!

Richard Nasr Richard Nasr 10.05.2022 14:58
GBPUSD is sitting around a strong support in blue so we will be looking for buy setups. on M30: GBPUSD formed an inverse head and shoulders but it is not ready to go yet. Trigger => Waiting for a momentum candle close above the gray neckline to buy. Meanwhile, until the buy is activated, GBPUSD would be overall bearish can still trade lower inside the blue support zone . Good luck! All Strategies Are Good; If Managed Properly! ~Rich
UK Budget: Short-term positives to be met with medium-term caution

(GBP/USD) British Pound Stable But Markets Uneasy, How Does It Perform Against US Dollar (USD) | Oanda

Kenny Fisher Kenny Fisher 10.05.2022 21:39
The British pound is in calm waters early in the week, as GBP/USD trades slightly above the 1.23 line. There are no major releases out of the UK or the US, which means that the pound should enjoy a quiet day. Can the BoE get it right? The British pound plunged over 2% last Thursday, a most difficult feat, considering that the Bank of England actually raised interest rates at its meeting that day. What went so wrong for the pound? The BoE dutifully raised rates at the meeting, but investors lasered in on the central bank’s downbeat message which warned of a recession, while at the same time forecasting that inflation will top 10% this year. The UK is experiencing soaring inflation at growth remains weak, which are the ingredients for stagflation. The Bank slashed its growth forecast from 1.25% to -0.25%, and the spectre of negative growth may have shaken up investors and sent the pound on its laurels. The rate hike, which in any event was relatively small at 0.25%, failed to impress the markets. BoE Governor Bailey was brutally honest when he said after the meeting that “It is a very weak projection, a very sharp slowdown”. I always appreciate when central bankers don’t hide behind gobbledygook, but the markets tend to reward good news, not honest news. There appears to be a heavy dose of scepticism as to whether the BoE can get it right, as it navigates between raising rates in order to curb inflation, while at the same time not choking economic growth. BoE Governor Bailey will need to show some achievements, such as lower inflation, in order to re-establish the central bank’s credibility, which has taken a blow in recent months. The pound has stabilized for the time being but remains vulnerable. There is plenty of risk aversion in the air, with spiralling inflation, a slowdown in China and the Ukraine war. With the Federal Reserve in hawkish mode and the US economy performing well, the risk towards GBP/USD is tilted to the downside. . GBP/USD Technical There is support at 1.2199 and 1.2056 GBP/USD faces resistance at 1.2418 and 1.2561 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
ECB stuck in sequencing | ING Economics

The Dollar is King! | MarketTalk: What’s up today? | Swissquote

Swissquote Bank Swissquote Bank 10.05.2022 20:53
The selloff in stocks, bonds, and Bitcoin deepened on Monday. Even commodities sank and crude oil tumbled more than 8% on the back of mounting worries of a seriously tighter, and potentially ineffective Federal Reserve (Fed) policy that would, to fight back the skyrocketing inflation, pull back support aggressively enough to cause recession. Goldman says the S&P500 could fall to 3600 in case of contraction. Another worry is that, even with a significantly tighter monetary policy, the Fed may not be able to tame inflation as much as desired. This is what the inflation expectations tell us. The S&P500 dive another 3.20% yesterday, as Nasdaq tanked another 4.30%. And money doesn’t flow to ‘safer’ US sovereign bonds, as investors are rapidly unloading the US treasuries as well, given the Fed is now letting its holdings mature to reduce the size of its balance sheet which went through the roof since the 2007 subprime crisis. The US 10-year yield hit 3.20% yesterday, the highest level since November 2018. Read next: Tech Stocks Plunging!? Trade Desk Earnings Announcement Pushes Tech Giant Stock Down, Russian Ruble Strengthening and Ford Motor Co. | FXMAG.COM Gold lost more than 1.50% along with the everything rout yesterday and Bitcoin slipped shortly below the $30K level. The yen and the Swiss franc depreciated against the US dollar, as well. So, where does the money go? To the US dollar – the safest of the safe haven assets. But, there is one potential catalyzer this week, that could eventually slow down the market selloff: US inflation data due Wednesday. The consumer price index is expected to have eased to 8.1% in April from 8.5% printed a month earlier. A softer inflation is the only thing that could give hope to investors. Here is the link to the Medium blog article: https://medium.com/swissquote-education Watch the full episode to find out more! 0:00 Intro 0:25 Market selloff intensifies 3:03 Gold & Bitcoin fall along with traditional risk assets 4:29 Safe haven currencies fall, as... 4:55 ...the US dollar is the safest safe-haven 7:32 Goldman cuts its S&P500 price forecast 8:42 Soft US inflation could reverse sentiment in the short-run 9:09 ... but perhaps not for Rivian. Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
A Bright Spot Amidst Economic Challenges

Commodities Prices And Problems With Supplies Are Still In Charge Considering US Inflation | US corporate pricing power set to delay inflation’s decline | ING Economics

ING Economics ING Economics 11.05.2022 09:23
US small business optimism held steady in April after three consecutive falls. Nonetheless, businesses retain the ability to pass higher costs onto their customers and this will keep inflation sticky. Ongoing supply chain issues and rising fuel costs mean 2% inflation is a distant prospect Business sentiment holds steady, but firms still want to hire The recent US data has been mixed and that has helped to fuel fears that the economy could experience a marked slowdown, especially with the Federal Reserve firmly focused on inflation and hiking interest rates. Dollar strength is acting as a further headwind to growth by making US exports less price competitive in what is already a challenging external demand environment for companies. In this regard this morning’s National Federation of Independent Business survey for April was marginally better than expected at the headline level with optimism holding steady versus expectations of a fourth consecutive monthly drop. Nonetheless it is still the weakest level since April 2020 in the immediate aftermath of the pandemic striking. The details show a slight improvement in the proportion of small businesses expecting higher sales, but there was a little more pessimism on the outlook for the economy and whether it was a good time to expand. Set against this softer environment, firms are still struggling with worker shortages and are desperate to hire. The NFIB released the labour components last Thursday, which a net 46% having raised worker compensation during the past 3 months and 27% expecting to do so further. Inflation pressures show no sign of moderating Looking to tomorrow's inflation data the NFIB report shows a net 70% of companies raised their selling prices in the past 3 month - down from last month's 72% balance, but this is still the second highest reading in the survey's 47-year history. Moreover, a net 46% of firms plan to raise their prices further over the next three months (down from 50%, but this is still the 6th highest reading in the survey's history). This reinforces the message the despite concerns about where the economy is heading, businesses continue to have pricing power and highlights the breadth of inflation pressures in the economy. The ability to raise prices is seen across all sectors and all sizes of businesses NFIB price indicators show no sign of a turn in inflation Source: Macrobond, ING Inflation may be peaking, but 2% is a long way away Tomorrow's CPI report will probably show that inflation has passed the peak, due largely to lower used car prices, but in the absence of major improvements in supply chains and geopolitical tensions, the descent to the 2% target will be very slow and may not be achieved until the very end of 2023. However, with national gasoline prices hitting a new all-time high yesterday that will come as little comfort to most households. TagsUS Inflation Federal Reserve Business optimism   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Hungarian Forint (HUF) May Be Rising! ING Economics Expects Bank Of Hungary To Hike The Rate By 100bp!

Worsening (HUF) Hungarian Forint? Inflation - Can Hungarian Situation Get Any Worse? | Double-digit inflation arrives in Hungary | ING Economics

ING Economics ING Economics 11.05.2022 09:18
The pro-inflationary impact of the war in Ukraine is finally filtering through into the data. Monetary policy might shift to a higher gear Food inflation came in at 15.6% year-on-year, showing a significant acceleration 10.3% Core inflation (YoY) ING forecast 9.7% / Previous 9.1% The impact of the war is finally appearing in inflation data April's inflation data is finally showing the impact of the Ukraine war. While the March release was a relatively pleasant surprise, with only a moderate acceleration in price pressure, inflation in April was the total opposite. There has been a sharp rise in prices: on a monthly basis, it reached a 1.6% rate. The last time we had such a strong dynamic was in 2012 after a VAT increase. The bad news is that the current tide in prices is not the result of a single measure. Roughly 50% of the consumer basket items showed double-digit year-on-year inflation in April. Against this backdrop, the 9.5% year-on-year headline inflation print is hardly surprising. Main drivers of the change in headline CPI (%) Source: HCSO, ING The details Food inflation came in at 15.6% year-on-year, showing a significant acceleration. Both unprocessed and processed items are contributing to the elevated price pressure. Despite prices of some basic food being capped, there is strong repricing everywhere: the monthly food inflation is three to four times higher than usual. This is a result of several supply-side shocks (transportation, agricultural commodities, energy, wages, etc.) and probably the weak forint. The second-most important contributor behind the sharp acceleration is the other goods and motor fuel category, which covers household goods, toiletries and pharma products and goods for recreation and education. Durables are also showing a remarkable 11.1% yearly price increase, a major contributor to inflation pressure. Rising industrial producer prices are showing up in consumer prices as demand-supply mismatch prevails. Services inflation accelerated by only 0.3ppt reaching 6.3% year-on-year in April, but monthly inflation has remained much stronger than usual, pointing toward a significant repricing pattern. Only clothing, alcoholic beverages and tobacco hold back the year-on-year inflation print. The latter is only a base effect due to an excise duty hike in tobacco products carried out in April 2021. The composition of headline inflation (ppt) Source: HCSO, ING Underlying inflation reaches double-digit territory The last point also means that, as alcoholic beverages and tobacco are not part of the core inflation basket, this base effect didn’t have a beneficial effect on core inflation. While headline inflation accelerated by 1ppt, the core reading rose by 1.2ppt. With that, double-digit underlying inflation has arrived in Hungary: the Statistical Office registered a 10.3% year-on-year core indicator. The central bank’s underlying inflation indicators, which are good predictors of medium-term developments in price changes, have also moved into the double-digit category. Headline and underlying inflation measures (% YoY) Source: HCSO, NBH, ING Further acceleration ahead Inflation in Hungary is expected to rise further in the coming months, as the economy continues to show a significant demand-supply mismatch. Labour shortage, rising wages and other supply-side shocks are increasingly spilling over into consumer prices, with companies enduring significant pricing power. Recent surveys are showing that roughly 60-80% of companies (depending on their respective sectors) are planning further price rises. In light of today’s upside surprise, headline inflation will soon reach double-digits as well. The extent and timing of the peak in price pressure highly depend on the fate of price caps, but as of now, we see the peak well above 11% in the third quarter. On average, we forecast a 10% headline reading in 2022. The central bank might raise the pace As far as monetary policy is concerned, as underlying inflation is also strengthening to an extraordinary extent (1.8% month-on-month), the National Bank of Hungary will hardly have an opportunity to think about stopping the interest rate hike cycle anytime soon. In our view, the recent data will urge the central bank to rethink its tightening path both from the perspective of its length and its peak. We see a possibility that the central bank will speed up its effective rate hiking from the recent 30bp tempo to 50bp or even 75bp in May. Against this backdrop, our 8.25% terminal rate call seems outdated and we now see the peak in base and 1-week deposit rates at above 9%. TagsNational Bank of Hungary Monetary policy Inflation Hungary CPI   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Nasdaq Slips as Tech Stocks Falter, US Inflation Data Awaits

Rising Inflation In The US Means Rising US Dollar (USD), Chinese COVID Policy Seems To Be Almost Impossible | US inflation, a make-or-break moment for investors! | MarketTalk: What’s up today? | Swissquote

Swissquote Bank Swissquote Bank 11.05.2022 11:12
It’s D-day of the week: we will see whether inflation in the US started easing in April after hitting a four-decade high in March, and if yes, by how much. A soft inflation read will come as a relief that the Federal Reserve’s (Fed) efforts to tame inflation start paying off, but any disappointment could send another shock wave to the market. In the FX, the US dollar extended gains, despite the easing yields yesterday, as the risk-off flows continued supporting the greenback For now, activity on Fed funds futures give almost 90% chance for a 50-bp hike in FOMC’s June meeting; there is a lot left to be priced for a 75bp hike, if the data doesn’t please. To avoid pricing in a 75bp hike at next FOMC meeting, we must see an encouraging cooldown in inflation. In the FX, the US dollar extended gains, despite the easing yields yesterday, as the risk-off flows continued supporting the greenback.   The barrel of US crude tipped a toe below the $100 level on news that the Europeans softened their sanctions proposal against the Russian oil The levels against the majors like euro, yen and sterling remained flat, but the positive pressure in the dollar, combined with Turkey’s unconventional monetary policy start giving signs of exhaustion. The dollar-try advanced past the 15 mark, and the government asked institutions to make their FX operations within the most liquid trading hours. Two weeks ago, the bank had revised its regulations on banks' reserve requirements, applying them to the asset side of balance sheets in order to strengthen its macroprudential policy toolkit. The latter required reserves now pressure the overnight rates to the upside – suggesting that the unconventional policy is near limits. Energy are up and down… but mostly up. The barrel of US crude tipped a toe below the $100 level on news that the Europeans softened their sanctions proposal against the Russian oil, but oil is already above the $100 this morning. The upside potential is fading due to slower global growth prospects, and the Chinese lockdown. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Watch the full episode to find out more! 0:00 Intro 0:24 All eyes on US inflation data! 2:30 Market update 3:50 Strong US dollar threatens lira stability 5:50 Risks in energy markets remain tilted to the upside 6.35 Why Chinese zero Covid policy won’t work 8.07 Coinbase hit hard by crypto meltdown 8:39 Energy, still the best option for investors Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.  
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

Here Is Why US Inflation Data (CPI) Is That Important Not Only For US Dollar (USD) Its Index (DXY), But Also For Stocks, Bonds And Other Assets | Conotoxia

Conotoxia Comments Conotoxia Comments 11.05.2022 15:28
Today at 14:30 important macroeconomic data for the US economy will be published, which may also affect asset valuations outside the United States - we are talking about inflation data. In March 2022, inflation in the United States rose to 8.5 percent, which was the highest reading in 40 years. The rise in prices, in turn, may have affected several market measures. First, it forced the Fed to act, as the Federal Reserve is supposed to care about price stability and should raise interest rates if prices rise. This in turn could have influenced expectations of higher USD interest rates in the future and a strengthening of the dollar to levels last seen 20 years ago. Further expectations of rising rates could lead to an increase in bond yields, where for 10-year bonds they are in the region of 3%. The increase in bond yields, expectations of further tightening of monetary policy, and shrinking of the Fed's balance sheet, in turn, are information that could adversely affect the stock market, which in the case of the Nasdaq 100 index found itself in bear market territory. This spiral seen in many markets may continue until investors fully discount inflation, rising yields, and expectations of interest rate hikes. Interestingly, the latter had already begun to fall earlier in the week as recession fears increased. Currently, based on the federal funds rate contracts, the market is assuming a peak for hikes in mid-2023 at 3.00-3.25 percent. That's lower than the 3.5-.375 percent assumed as recently as the beginning of the month. The determinant, in turn, of whether there is a chance of full pricing for U.S. rate hikes may be where inflation will be. If this one peaks this six months and starts to fall, the market may stop assuming very aggressive Fed action. This, in turn, could bring relief to the bond market, the stock market, and also lead to the US dollar being close to its cyclical peak. Hence, today's and subsequent data on price growth in the U.S. economy could be so important. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Forex: GBP/USD. The Support Has Been Rejected 3 Times. Uptrend!

Inflation (US CPI) Rises, So Does US Dollar (USD)! (SPX) S&P 500 And Nasdaq Have Decreased! Is Hawkish Fed Going To Hunt Again? | FxPro |

Alex Kuptsikevich Alex Kuptsikevich 11.05.2022 15:36
The dollar got a fresh boost, with stocks coming under renewed pressure after a new batch of US inflation data. The annual inflation rate slowed from 8.5% to 8.3% The US consumer price index rose 0.3% in April after 1.2% a month earlier. The annual inflation rate slowed from 8.5% to 8.3% but was higher than the expected 8.1% y/y. Particularly worrying for markets is the development of core inflation. The corresponding index added 0.6% m/m and 6.2% y/y last month, higher than the expected 0.4% and 6.0%, continuing the sprawl of inflation. Higher-than-expected inflation is now positive for the dollar and weighs on equities as it suggests a more robust Fed response While the annual rate of core and core inflation seems to have peaked, higher-than-expected inflation is now positive for the dollar and weighs on equities as it suggests a more robust Fed response. With inflation far from the 2% target, the Fed will be inclined to act faster (raise rates more than 50 points at a time) or stop hiking at a higher level. A significant risk demand indicator, bitcoin, has already moved out of the range with a lower boundary in January 2021 Locally, we see a tug-of-war around the dollar against the euro and yen near the lows of the past two weeks and swings against the pound and the franc near this week’s extremes. However, a significant risk demand indicator, bitcoin, has already moved out of the range with a lower boundary in January 2021. The S&P500 and Nasdaq futures were also pushed back to this week’s lows, indicating continued bearish pressure.
The Commodities Feed: Anticipating LNG Strike Action and Market Dynamics

Philip Morris Buys Match, Fed Members Spills The Tea And Gold Price Nears Quite Low Values | Saxo Bank

Saxo Bank Saxo Bank 11.05.2022 17:29
Summary:  Global equity markets have bounced after the US briefly hit new cycle lows yesterday. One development at the margin that has helped is the sharp decline in longer bond yields, even as a couple of Fed members were out with hawkish comments. A strong 3-year US treasury auction showed strong demand. Elsewhere, gold remains under pressure and is on life support. The data focus today swings to the US and the release of April CPI data.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - the rebound in US equities succeeded closing above the prior session’s close but met resistance above the 12,500 level in Nasdaq 100 futures. However, this morning Nasdaq 100 futures continue to rally trading around the 12,450-level attempting to break above the 12,500 level again which is needed to close Monday’s selloff range. Sentiment is still weak but a pause in the momentum in US 10-year interest rates is providing some support to US equities in the short-term. Q1 earnings results yesterday confirmed the slowdown in gaming and cryptocurrency trading activity. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I). China’s A shares surged with ChiNext rising 4.3% and CSI300 up 2%. Electric equipment, semiconductors, EV battery, consumer electronics, wind and solar names led the charge higher. EV battery maker, CATL (300750) rose 7.7%. Hong Kong’s Hang Seng Index rose 1.7% and Hang Seng TECH Index gained 4.6% by mid-day.  After reporting better than market expected earnings and margin expansion, Li Auto (2015) surged 11%. The COVID related disruption to logistics and production, plus food and daily necessities stockpiling by households seems to make their impact felt on general price levels. China’s April PPI came at +8.0% YoY and CPI at +2.1% YoY, both higher than market expectations.   AUDUSD and USDCAD – the two key commodity currencies broke through key support against the US dollar this week, but so far the reaction to the development has been restrained and would likely take a further slide in risk sentiment, including in the commodity space for a notable extension lower. As the break levels remain nearby, the pairs deserve watching for the trend status and a possible reversal as well – resistance in AUDUSD is 0.7000-0.7050 and support in USDCAD comes in at 1.2900-50. Read next: Don't Worry Coffee Lovers! The Price Of Coffee Futures Falling Amidst Current Market Conditions, Crude Oil (WTI) Recovers Slightly, Palladium Prices Show Steady Downward Price Trend | FXMAG.COM USDJPY and JPY pairs – global sovereign bond yields have tumbled from their highs at the start of the week and crude oil has corrected sharply lower, two developments that support the Japanese yen, as Japan relies so heavily on energy imports and BoJ yield-curve-control policy means that the currency absorbs weakness when the domestic bond market is not “allowed” to. And yet, the JPY bounce on supportive developments has proven surprisingly muted – an opportunity or indication of further weakness to come? Watching for the reactivity in JPY pairs around the US CPI release today and 10-year US T-note auction later today as USDJPY is often one of the more sensitive currencies to US treasury yields. Gold (XAUUSD) dropped below $1850 support yesterday after several Fed officials backed multiple 50 basis point rate hikes. These comments helped drive fresh dollar strength and a continued rise in US real yields ahead of today’s US CPI print. Recent dollar strength, especially against the yuan and rupee has reduced demand from China and India, the world’s two biggest buyers of physical gold. With gold trading near a three-month low, demand for bullion backed ETFs has also ebbed with total holdings falling to a three-week low on Tuesday. Silver (XAGUSD) meanwhile slumped below previous support at $21.5, thereby adding an additional layer of weakness. From a technical perspective, the next key support level in gold is the 61.8% retracement of the March 2021 to March 2022 high at $1827. Crude oil (OILUKJUL22 & OILUSJUN22) traded higher in Asia with Brent bouncing before reaching key support below $100 per barrel. Catalyst for the move ahead of today’s US CPI print was a decline in the Covid19 infections in China providing some cautious optimism about a pickup in demand from the world’s largest importer. The cost of fuel due to lack of refinery capacity and sanctions against Russia remains very elevated with retail gasoline in the US hitting a record. The EIA meanwhile lowered its forecast for US production in 2022 and 2023 while Saudi Arabia and the UAE oil ministers warned that spare capacity is decreasing in all energy sectors. Developments that may offset any slowdown in global consumption due to lower growth and punitive high inflation. Monthly oil market reports from OPEC and IEA on Thursday. US Treasuries (TLT, IEF) – The US yield curve flattened sharply yesterday as hawkish talk from a couple of Fed members (see below) kept the shorter end of the yield curve elevated, while longer yields continued their sharp retreat ahead of a tone-setting 10-year T-note auction today, with the benchmark yield there trading just below 3.00%. The 3-year notes yesterday saw the strongest demand in over a year. What is going on? Fed officials continue to back rate hikes. Fed speakers are back on the wires backing multiple 50 basis point rate hikes, even as that might mean a bumpy ride for the economy and the markets. Cleveland Fed President Loretta Mester, in fact, also brought 75bps rate hikes back on the table for H2 if inflation doesn’t recede. US earnings recap. The big negative surprise was Coinbase reporting Q1 revenue of $1.17bn vs est. $1.48bn and a dark Q2 outlook expecting lower trading activity. Unity was in line with Q1 estimates but puts out a very low Q2 revenue figure of $290-295mn vs est. $360mn, but the fiscal year guidance is closer to consensus suggesting timing issues. Electronic Arts surprised investors given the weakness in gaming results recently guiding fiscal year 2023 (the company is not following the traditional calendar year) revenue a bit above consensus. Staying with gaming results, Roblox reported a slowdown in user activity (bookings) as so many other gaming companies have done in Q1. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Philip Morris to buy Swedish Match for SEK 106 per share. This is one of Europe’s largest transactions this year worth $16bn in an all-cash deal translating into a premium of 40%. Philip Morris is acquiring Swedish Match to get assets that are less about visual cigarettes to better cope with increasing regulation around the world against cigarettes. Declining Covid-19 cases in China helped boost sentiment across battered stock markets in Shanghai and Hong Kong overnight. The industrial metal sector has seen a sharp correction during the lockdown with the Bloomberg Industrial Metal Index currently up just 5% on the year after hitting a 39% gain on March 7. As lockdowns start to ease the focus across the sector is likely to return to tight global inventories and the prospect of a revival in demand with the Chinese government likely to initiate projects to support an economic revival. Six major mining companies who derive more than 60% of their revenue from copper have slumped between 25% and 50% from peaks achieved during the past year. What are we watching next? US CPI and 10-year T-note auction today. The 3-year T-note auction yesterday showed the strongest demand for 3-year US paper since early 2021. A 10-year T-note auction is set for today, with yields having retreated to near 3.00% from the highs earlier this week near the 2018 cycle high of 3.25%. Liquidity in the US treasury market is at its weakest levels since the pandemic-outbreak panic moment even before the Fed is set to begin reducing its balance sheet (requiring the market to absorb more treasury issuance). Reactivity in the US treasury market and the US dollar is also worth close observation today on the release of the April CPI data, expected to show the headline rising at only +0.2% MoM, but the core rising +0.4% MoM. The YoY expectations are +8.1%/+6.0% vs. +8.5%/+6.5% in March. EU gas prices jumped on Tuesday and may rise further today after Ukraine’s network operator warned Ukraine won’t accept gas at Sokhranivka, one of two cross-border points handling Russian flows, from today after occupying forces disrupted operation at the compressor station. It’s still possible for gas to be rerouted to the second entry point, Sudzha, allowing European contracts to be fulfilled, it said. How Gazprom reacts to these changes will set the tone in today’s trading. Dutch TTF benchmark gas briefly traded below its 200-day moving average support line at €89/MWh yesterday before ending the day near €100/MWH on the Ukraine news.  Earnings Watch. In Europe this morning the focus is on earnings from E.ON and Siemens Energy given the energy crisis in Europe. Genmab is also important to watch being one of Europe’s largest pure plays within the biotechnology industry. Later in the US session the focus is on Walt Disney given the latest weak results from Netflix and more reopening post the pandemic benefitting Disney’s physical entertainment assets. We will also watch Coupang, the largest e-commerce company in South Korea, given the bad Q1 results from most e-commerce companies. Today: Genmab, E.ON, Siemens Energy, Continental, Toyota, SoftBank, Takeda Pharmaceuticals, Delhaize, Mowi, Swedish Match, Walt Disney, Coupang Thursday: Verbund, KBC Group, Brookfield, Fortum, Siemens, Allianz, Merck, Hapag-Lloyd, RWE, Atlantia, Snam, NTT, SoftBank Group, Aegon, Naturgy Energy, Motorola Solutions Friday: Deutsche Telekom, KDDI, Honda Motor, Alibaba Economic calendar highlights for today (times GMT) 0715 – ECB's Nagel to speak 0800 – ECB President Lagarde to speak 0800 – ECB’s Vasle to speak 0830 – ECB's Makhlouf to speak 0850 – ECB's Knot to speak 1220 – ECB's Schnabel to speak 1230 – US Apr. CPI 1230 – US Apr. Real Average Hourly Earnings 1600 – US Fed’s Bostic (non-voter) to speak 1800 – US 10-year T-Note auction 2301 – UK Apr. RICS House Price Balance Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Saxo Bank
OPEC+ Are Expected To Keeping Oil Production Unchanged, AUD/USD Trades At Its Highest Levels

Crude Oil (USOIL) Trades Quite Lower, Australian Dollar Has Weakened Against US Dollar (AUDUSD), Gold Price Has Slid | Orbex

Jing Ren Jing Ren 12.05.2022 09:21
AUDUSD saw brief recovery The Australian dollar struggles as Beijing vows to support its Covid-hit economy. A drop below the psychological level of 0.7000 near this year’s low may have put the Aussie on a bearish trajectory in the medium-term. On the hourly chart, the RSI’s double bottom in the oversold area may cause a limited rebound. Selling interest could be expected at 0.7100 at the origin of the latest sell-off. A drop below the intermediate support at 0.6920 would extend losses towards June 2020’s lows around 0.6820. Read next: Tech Stocks Plunging!? Trade Desk Earnings Announcement Pushes Tech Giant Stock Down, Russian Ruble Strengthening and Ford Motor Co.  XAUUSD tests demand area Bullion steadied after the US CPI receded in April. The price action has found some support at the base of the February bullish breakout. A bullish RSI divergence indicates a slowdown in the downward momentum, a prerequisite for a reversal. 1868 is a key resistance and a breakout would confirm the demand zone and prompt sellers to cover their bets. Then 1910 is the last hurdle before sentiment would turn around. On the downside, a break below 1831 would send the precious metal to the psychological level of 1800. Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100.  USOIL bounces higher WTI crude rallies as Russia retaliates by sanctioning European gas companies. A fall below the rising trendline near 106.00 has put the bulls on the defensive. The price has met bids at 98.50 and in conjunction with a bullish RSI divergence could attract more buying interest. Optimism may gain traction if buyers succeed in holding above this demand zone. A close above support-turned-resistance at 107.00 would put the bulls back in the game. Then a break above 111.00 could trigger an extended rally above 117.00.
Fed Expectations Amid Mixed Data: Wishful Thinking or Practical Pause?

Asian currencies falter

Jeffrey Halley Jeffrey Halley 12.05.2022 12:15
US dollar in choppy waters The dollar index had another choppy range overnight but ultimately closed nearly unchanged once again as the G-10 currency space was content to watch from the sidelines. Recessions fears being offset by lower US yields. The dollar index closed slightly higher at 104.00. Although the index has support at 103.50, it is struggling to make a material close above 104.00, although it has moved higher to 104.07 in Asia. A daily close above 104.00 will signal rapid gains to 105.00 and in the bigger picture, the technical picture still says a multi-month rally to above 120.00 is possible. Support lies at 103.50 and 102.50. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Asian FX weakness is being exacerbated by the fall of both the onshore and offshore Chinese yuan today Most of the activity today in Asia has been in the regional currency space and USD/Asia is sharply higher. With cryptos and equities falling heavily Asian currencies seems to be suffering as part of a generalised risk-aversion wave. USD/KRW has jumped 0.80% to 1289.50, with USD/TWD and USD/PHP rising by 0.55%, and USD/INR, USD/MYR, USD/SGD, and USD/IDR between 0.25% and 0.35% higher. EUR/USD is treading water at 1.0510 this morning having failed ahead of 1.0600 overnight Asian FX weakness is being exacerbated by the fall of both the onshore and offshore Chinese yuan today. USD/CNH has risen 0.555 to 6.8000, and USD/CNY by 0.65% to 6.7650. Their next target is the 6.8500 region. Until the PBOC signals that yuan depreciation has gone far enough, Asian currencies will remain under pressure, and I fully expect to see a few regional central banks in the market selling US dollars today. Read next: Tech Stocks Plunging!? Trade Desk Earnings Announcement Pushes Tech Giant Stock Down, Russian Ruble Strengthening and Ford Motor Co.  EUR/USD is treading water at 1.0510 this morning having failed ahead of 1.0600 overnight. Any negative developments around Russian natural gas exports today are likely to spur another wave of selling, testing support at 1.0450. Notably, despite ECB officials overnight signalling rate hikes soon, EUR/USD finished lower than its open overnight. GBP/USD has fallen 0.30% to 1.2210 this morning and faces plenty of downside risk on Northern Ireland developments, emergency budgets, or poor data this afternoon. Rallies should be limited to 1.2400 with 1.2000 a real possibility in the next 36 hours. Short-dated US yields are rock solid though, limiting USD/JPY downside USD/JPY has finally eased slightly to 129.70 as long-dated US yields fell again overnight. Short-dated US yields are rock solid though, limiting USD/JPY downside. ​ Overall, the US/Japan rate differential and technical picture suggest further USD/JPY appreciation is a matter of when, and not if. Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100.  AUD/USD and NZD/USD both gave up intraday gains overnight a sentiment turned sour in New York. The general risk aversion selloff sweeping Asia today has punished both currencies. AUD/USD has fallen through support at 0.7000 on its way to 0.6880, and NZD/USD dropped through 0.6400 on its way to 0.6240 in Asia. The 1.0% losses have left both oversold on short-term technical measures, but unless risk sentiment swings abruptly higher for some reason, both still look like sells on rallies, caught in a US rate hike, China slowdown, pincer move. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

China Update: In time of trouble, go with the flow of government money | Saxo Bank

Saxo Bank Saxo Bank 12.05.2022 12:11
Summary:  A new round of COVID outbreaks and a stringent pandemic control policy have dampened the growth outlook in China. In anticipation of the rolling out of massive infrastructure construction by the Chinese government to boost the economy, we look at the investment opportunities in the traditional an new infrastructure space. We also consider the medium-term cases for growth in hydrogen energy and cybersecurity. China is to increase spending on infrastructureAs U.S. bond yields have moved higher than those of China and the Chinese renminbi has weakened substantially versus the U.S. dollar within a short period of time, China’s central bank’s room to manoeuvre in monetary easing is quite limited without jeopardising its goal of maintaining the relative stability of the renminbi versus the U.S. dollar, in which, energy and commodities are priced internationally.The property sector is still in dire situation and will not be making the kind of contribution to the overall economy as in the past decade.  Exports, the key growth driver last year, will very likely to be unable to do the heavy-lifting to support the economy this year.  In April, China’s export growth decelerated to 3.9% YoY in USD terms.  Adjusting it for the rise in export prices, the real rate of growth in exports was negative in April. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COMThe Chinese Government is set to increasingly rely on additional infrastructure spending to boost the economy.  At the Central Financial and Economic Affairs Commission meeting on April 26, President Xi Jinping called for stepping up infrastructure construction.  It is particularly noteworthy that he emphasized the need to look beyond economic returns of infrastructure projects and to consider the projects’ benefits to national security and social returns as well.  In other words, projects that have been rejected on internal rate of return and cash flow considerations may be reconsidered and launched.  He also pledged supports to local governments in getting financing for infrastructure projects.  Moreover, Xi’s call for rolling out more infrastructure construction can provide a cover for local government officials from balancing the risks between carrying out infrastructure construction and devoting time, effort and resources to pandemic control.  Without that, the assessment of political risks and rewards might tend to incentivize local government officials to focus on pandemic control at the expense of executing infrastructure projects.  Read next: Tech Stocks Plunging!? Trade Desk Earnings Announcement Pushes Tech Giant Stock Down, Russian Ruble Strengthening and Ford Motor Co. Although local governments’ budgets have been constrained substantially by the sharp fall in land sales revenues, they can tap on funding raised from the  RMB1.2 trillion special bonds issued last year and the RMB 1.4 trillion special bonds issued thus far this year to finance infrastructure projects, in addition to other supports to come their ways from the central government. The Central Financial and Economic Affairs Commission’s meeting on April 26, 2022 emphasized transportation, energy, and water conservancy among the traditional infrastructure projects.On May 6, 2022, the General Offices of the Chinese Communist Party’s Central Committee and China’s State Council released a joint guideline to boost the development and urbanization of county seats throughout China’s rural areas.  The guideline calls for building industrial bases and constructing public infrastructure and services in county seats and making medical care, education, and elderly care more accessible in rural areas surrounding county seats. New InfrastructureIn addition to traditional infrastructure, China is taking to high gear of its spending on new infrastructure.  The term “New Infrastructure” was coined in December 2018 and has been more frequently mentioned in the Chinese Government policy initiatives since the beginning of 2020 and the scope has been expanded to include industries in seven key areas: (1) 5G base stations and networks, (2) data centers, (3) Ultra High Voltage (UHV), (4) electric vehicle charging piles, (5) artificial intelligence, (6) Industrial Internet of Things, and (7) intercity rail and urban transit network.  One of the key characteristics of new infrastructure is its potential in enhancing technological innovation and improvement in productivity.  Hydrogen EnergyWhen China launched its 13th Five Year Plan in 2016, fuel cell electric vehicles was first mentioned.  In November 2020, in its New Energy Vehicle Industry Development Plan 2021-2035, the State Council set out initiatives to develop a wider hydrogen energy infrastructure, in addition to fuel cell applications. Since 2020, the Ministry of Finance (the MoF) has been providing financial incentives for cities that launch pilot programmes to build up hydrogen energy and fuel cell vehicle industries and its supply chain. The MoF focuses on promoting the use of hydrogen energy medium to long-range and medium to heavy commercial vehicles and their related hydrogen infrastructure networks.  About 20 cities in China, including Beijing and Shanghai have launched such pilot programmes in using hydrogen energy vehicles.China 14th Five Year Plan in 2021 reiterated the development initiatives for hydrogen energy and fuel cell vehicles.  Accordingly, in March 2022, the National Development and Reform Commission (NDRC) and the National Energy Administration jointly released a Hydrogen Energy Medium to Long-term Plan 2021-2035 (the Plan), which affirms the strategic position of hydrogen energy in China’s green transformation and set out the development goals for the hydrogen energy and fuel cell vehicle industries. Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100. The Plan aims at establish a system and environment for the development of technologies and processes for the production, storage and transportation of hydrogen energy as well as working towards clean energy hydrogen production.  It targets to reach annual deployment of 50,000 fuel cell vehicles and build comprehensive networks of hydrogen refuel stations by 2025. There are three major types of technology to manufacture hydrogen.  1) grey hydrogen: using coal, petroleum or natural gas as feedstock; 2) blue hydrogen: using conventional natural gas-based process coupled with carbon capture; 3) green hydrogen: using renewable energy to produce hydrogen from water electrolysis.  The plan targets to construct a clean energy (blue and green) hydrogen production and supply system by 2030 and envision to establish a diversified hydrogen ecosystem of manufacturing, transportation and storage of renewable energy hydrogen production by 2035.  CybersecurityChina released the Critical Data Infrastructure Security Protection Regulation in 2021.  The regulation seeks to protect critical data from hacking and malwares that could result in damage to national security, social order or public interest.  It defines the required responsibilities of the entities that hold the critical data and penalties for those fail to comply.  In particular, it requires local governments and enterprises to be responsible for monitoring, defending, and managing cybersecurity risks in their network and information systems.  The regulation also requires local governments and enterprises to set up early warning mechanism against cybersecurity threats and vulnerabilities, to carry out defence exercises and to conduct regular checks of their information systems. In addition to the regulation mentioned above, China enacted the China Data Security Law in September 2021. The new law regulates data collection, processing, and transition, beyond the traditional measures of database audits and encryption. When China rolled out its 14th Five Year Plan, it increased its cybersecurity budget by three times from the 13th Five Year Plan.  The Ministry of Industry and Information Technology (MIIT) guided government departments and state-own enterprises with critical data to raise their cybersecurity spending to 10% of information technology spending from 3% previously. The new regulation, law, the enlarged national budget allocation, and the MIIT’s guidance help induce growth in demand for cybersecurity.  Going with the flow of government moneyIn a turbulent global investment environment and slowing Chinese economy, we consider that it may be rewarding to go at the direction in which the Chinese government’s money is going. We expect that the Chinese authorities are on high gear to roll out infrastructure construction projects in transportation, energy and water conservancy and the new infrastructure areas in 5G, data centers, ultra-high voltage, EV charging piles, AI, industrial internet of things and inter-city rail and urban transit network.  It may be more fruitful to look for investment opportunities in these areas than the others that have less tailwinds behind them.For the medium-term, we see interesting multi-year growth potentials in the areas of hydrogen energy and cybersecurity.  Monitoring companies in these industries and relevant value chains may prove to be fruitful. Source: Saxo Bank
Doge (DOGE) Vs Bitcoin (BTC) - Elon Musk Comments!

(USDT) Tether's Not That Stable? JPY Goes Higher, How Will It Perform Against US Dollar? | Saxo Bank

Saxo Bank Saxo Bank 12.05.2022 15:42
Summary:  Fires are springing up everywhere and it feels like markets are under siege, but the volatility curve doesn’t even look particularly alarming yet. We focus on the areas that could continue to keep markets on tilt, including the breaking of the largest "stable" coin Tether already in evidence today after Bitcoin melted through a huge chart level yesterday, the Hong Kong dollar peg under pressure, the Tesla-Bitcoin-Ark triangle, etc. In FX, the focus is on the jolt higher in the JPY even more so than the ongoing USD strength, while commodity traders have it relatively easy on the volatility front. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast and have a look at today’s slide deck. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next: Saxo Bank: Markets are assessing the global growth outlook and the pace of Fed tightening| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Read next: Philip Morris Buys Match, Fed Members Spills The Tea And Gold Price Nears Quite Low Values | Saxo Bank| FXMAG.COM   Source: Saxo Bank
Euro-dollar Support Tested Amidst Rate Concerns and Labor Strikes

FX Update: Bond rally supercharges JPY comeback rally. | Saxo Bank

John Hardy John Hardy 12.05.2022 16:01
Summary:  An extension of the rout in risky assets has continued to drive the US dollar higher against the smaller currencies and most G10 currencies as well, but the Japanese yen has not only taken on a new shine, but is even sharply stronger against the strong US dollar as global bonds have suddenly rediscovered their safe haven appeal. Elsewhere, HKD is worth watching as the HKMA intervened for the first time of this cycle to maintain the top of the USDHKD band. FX Trading focus: JPY woke up and smelled the coffee. Watching HKD as USD presses upper level of USDHKD band. The JPY upside potential has been more fully realized since yesterday on the heavy weight of falling yields in global sovereign bond, which are finally serving their function as a go-to safe haven in an environment of generally risk deleveraging. The JPY is even handily outpacing the ongoing strength in the US dollar as the yield focus dominates. And the technical damage in JPY crosses is spreading: NZDJPY and GBPJPY, the latter our focus yesterday, are already trading back into old ranges that preceded the JPY sell-off sparked by the commodity rally in the wake after Russia invaded Ukraine. Now watching AUDJPY and EURJPY for whether the feat is repeated there (key levels around 86.00 and 134.00, respectively), and CNHJPY has come down hard, with more to come. More thoughts on the most important USDJPY pair below in the chart discussion. The JPY can continue higher, but the price is far “fairer” now relative to long term bond yields. Yields must extend lower still, possibly with a helping hand from crude oi and LNG prices for a full reversal of the JPY sell-off since late February.  Chart: USDJPYYesterday, our focus in JPY crosses was on GBPJPY, which took out the 160.00 and 158.00 area supports yesterday. Today we have a look at the big one: USDJPY and what levels might trigger a more notably slide. Arguably, the first of these has already been under strain today in the 128.50 area. Regardless, the direction of the US 10-year benchmark yield is the key coincident indicator, with global energy prices a secondary indicator. The next support area below is the 127.03 pivot low followed perhaps by the 125.00 area, which was a stopping point on the way up. Source: Saxo Group Sterling suffered a sell-off to new lows in the wake of the Q1 GDP data, which showed a +8.7% growth rate, slightly below expectations, but a -0.1% month-on-month figure for March, with weak production figures to boot. The March Trade Balance data was also out and showed a toe-curling negative £23.8B trade balance, a staggering figure. Still, after a run to fresh lows against the G3 currencies, the EURGBP rally reversed rather sharply, in part as EURUSD tipped over to new lows after a couple of weeks of defending the 1.0500 support area. All traders should monitor the crypto situation as a possible aggravator of additional volatility risk across markets. The TerraUSD “stable coin” broke its parity level with the US dollar earlier this week and traded as much as 70% below par. Then yesterday, a key Bitcoin support level at 30,000 broke, possibly inspiring the instability of the Tether stable coin, which is a commonly used as a kind of parking space between going in and out of crypto trades and in and out of the crypo market itself. The Tether coin traded as much as 5% below par against the US dollar this morning before the whole crypto-complex recovered. More directly pertinent to FX, we have to watch the Hong Kong dollar (HKD), as the USD strength has taken the USDHKD exchange rate to the upper limit of its band at 7.85 and has seen the Hong Kong Monetary Authority out intervening for the first time of this cycle overnight. The HKMA will also need to copy Fed policy to avoid the worst of pressure on the HKD, even with Hong Kong’s economy in a funk. The HKD band is one of those legacy set-ups that makes little sense here almost forty years after its creation, but Hong Kong remains a key gateway into and out of the mainland Chinese economy, and China probably doesn’t want to add HKD instability to its long list of challenges. Note the Chinese demand concerns continuing to weigh on the copper price, which has punched to the lowest reaches of the range since early 2021. This in turn weighs on the Aussie, which itself has punched to new lows for the cycle. The CAD has gotten off easy so far by comparison, perhaps as oil prices remain in the higher range here – but after breaking above resistance, if USDCAD loses its tethering to the 1.3000 area it is in danger of a sharp extension higher. Table: FX Board of G10 and CNH trend evolution and strength.We have noted the euro resilience of late, but signs of this crumbling today as EURUSD, EURCHF and especially EURJPY come under pressure. But the development of note here is the strong revival of the JPY momentum and outright positive trend measurement in recent days. Elsewhere, CAD looks too strong with this backdrop, although there is quite a race to the bottom of late among the weakest horses in G10 FX. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Note EURJPY and CADJPY trying to join other JPY crosses in flipping to the negative side after the sharp JPY rally today. All G10 currency pairs save for a few GBP pairs (due to Brexit-related events) are in the highest 10% of their ATRs of the last 1000 trading days, as shown in the dark orange shading for the ATR readings. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – US Apr. PPI 1230 – US Weekly Initial Jobless Claims 1800 – US 30-year T-Bond auction 1800 – Mexico Overnight Rate Announcement
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

Euro Against US Dollar - (EUR) Euro Drops To January 2017 Lows | Oanda

Kenny Fisher Kenny Fisher 12.05.2022 16:40
The euro has fallen close to the 1.04 level, which has held since January 2017. In the European session, EUR/USD is trading at 1.0429, down 0.81% on the day. ECB hints at a rate hike in Q3 After years of monetary easing which was fueled by low inflation levels, the ECB is slowly but surely switching gears and talking openly about a rate hike. It wasn’t long ago that ECB President Christine Lagarde was dismissing high CPI numbers as “transitory” and saying that the ECB would remain out of sync with the Fed and its tighter policy. Lagarde has been forced to change her tune, however, as eurozone inflation has soared, hitting 7.5%. Germany’s inflation rate, released today, rose to 7.4%, an all-time high for a second successive month (7.3% prior). Eurozone inflation is being driven by high energy and food prices, both of which are largely due to the war in Ukraine. With no end to the conflict on the horizon, inflation could climb even higher, putting pressure on the ECB to start tightening policy. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Lagarde said on Wednesday that the ECB will end asset purchases in Q3 and follow with a rate hike “some time later”. Other ECB members have been less vague and are calling for a rate hike in July. There is a debate within the ECB whether to raise rates by 0.50%, which would bring the deposit rate to zero, or deliver a modest 0.25% increase. The ECB meeting in June should give the markets a better idea as to whether the July meeting will be live. US inflation dips, but less than expected US inflation slowed in April, but still came in stronger than expected. CPI dropped from 8.5% to 8.3%, higher than the consensus of 8.1%. This slowdown was not enough for the markets to price in “peak-US inflation”, and the dollar managed to hold its own against the major currencies. The Fed’s hawkish stance appears justified after the inflation release, as the markets are digesting the fact that if US inflation is easing, it will be at a slow pace. Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100.  EUR/USD Technical 1.0557 remains a weak resistance line, followed by resistance at 1.0632 There is support at 1.0473 and 1.0398 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

Can British Pound To US Dollar (GBP/USD) Reach 2-year-low? NZD/USD Doesn't Seem To Be Improving And US 100 Sends A Small Recovery Signal

Jing Ren Jing Ren 13.05.2022 07:46
GBPUSD to reach 2-year lows The pound remained under pressure after a slowdown in the UK’s GDP growth in Q1. A break below the lower range (1.2260) of a brief consolidation signalled a bearish continuation. Sterling is heading towards its two-year low at 1.2100. Short-covering could be expected and in conjunction with dip-buying could drive the price up momentarily. 1.2400 is the first resistance and the bulls need to lift the recent high at 1.2640 before they could regain control. Otherwise, the psychological level of 1.2000 would be the next stop. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM NZDUSD grinds lower The New Zealand dollar tumbles as traders continue to pile into safe haven assets. The sell-off accelerated after the pair sank below June 2020’s lows near 0.6400. Downbeat sentiment may attract more trend followers after a faded rebound. 0.6100 near a two-year low would be the next target. 0.6370 is a fresh resistance and the bears may sell into strength at the next bounce. The support-turned-resistance at 0.6450 sits next to the 20-day moving average and is a major level to clear before a reversal could materialise. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM US 100 may see limited bounce The Nasdaq 100 struggles to find bottom as investors continue to flee risk assets. The index sees no sign of stabilisation yet as it approaches 11500. The price action has been capped by a falling trend line from last April. An oversold RSI may prompt sellers to take profit and possibly trigger a mean reversion trade to the upper band (13000) of the line. A break above 12400 may attract enough buying interest to make this happen, but the rebound could be limited unless the bulls succeed in pushing higher. Read next: Binance Academy: Crypto Fear And Greed Index Explained| FXMAG.COM
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

(GBP/USD) British Pound Dips On Soft GDP (Gross Domestic Product) | Oanda

Kenny Fisher Kenny Fisher 12.05.2022 21:09
The pound continues to lose ground and is trading at its lowest level since May 2020. GBP/USD fell below the 1.22 level earlier and hasn’t had a daily winning session since May 4th. Negative growth raises alarm bells The UK economy is struggling, a grim fact which was brought home by the Q1 GDP report earlier today. On a quarterly basis, GDP came in at 0.8%, down from 1.3% in Q4 of 2020 and shy of the 1.0% estimate. Even worse, the economy contracted in March by 0.1%, after a 0.1% gain in February. This missed the forecast of 0.0%. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM The BoE has raised rates to 1.0%, a 13-year high, but it’s clear that the BoE has fallen behind the inflation curve and is playing catch-up The negative growth reading was a result of the crushing inflation that has gripped the UK. CPI hit 7% in March and the markets are braced for a reading of around 9% from week’s April CPI release. The cost of living crisis has dampened consumer spending, a key reason for the negative reading for March GDP. The BoE has raised rates to 1.0%, a 13-year high, but it’s clear that the BoE has fallen behind the inflation curve and is playing catch-up. At last week’s policy meeting, the central bank warned that inflation could top 10% and there was the danger of a recession. The pound tumbled over 2% in response, even though the BoE increased rates by 0.25%. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The grim economic outlook does not bode well for the pound, which has tumbled 7.1% since May 1st The BoE finds itself between a rock and a hard place. It needs to raise rates in order to curb soaring inflation, but weak growth means that the higher rates could tip the economy into recession. The grim economic outlook does not bode well for the pound, which has tumbled 7.1% since May 1st. Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100. US inflation eases, a bit US inflation weakened in April, but not as much as the markets had expected. CPI dropped from 8.5% to 8.3%, higher than the consensus of 8.1%. This slowdown was not enough for the markets to price in “peak-US inflation”, and the dollar managed to hold its own against the major currencies. There had been talk of an “inflation peak”, but the inflation data indicates that even if inflation is falling, the pace could be much slower than the markets would like. GBP/USD Technical GBP has breached support at 1.2199 for the first time since May 2020. Below, there is support at 1.2056 GBP/USD faces resistance at 1.2272 and 1.2418 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
A Bright Spot Amidst Economic Challenges

(NZD/USD) New Zealand dollar sinks after US CPI | Oanda

Kenny Fisher Kenny Fisher 12.05.2022 21:13
This week has gone from bad to worse for the New Zealand dollar, as NZD/USD has taken a tumble on Thursday. In the North American session, NZD/USD is trading at 0.6248, down 0.74% on the day. The currency has dropped 2.66% this week and is trading at lows not seen since June 2020. US inflation stays hot The US inflation report for April showed that CPI eased, but the decline was much smaller than expected. US CPI dropped from 8.5% to 8.3%, above the estimate of 8.1%. This chilled any speculation of an ‘”inflation peak”, as the markets digested the fact that even if inflation is moving lower, it could do so at a very slow pace. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Fed member James Bullard said on Wednesday that 50-bps moves were his base case and this appears to be the majority view For the Fed, the high inflation reading confirms that its hawkish stance is justified, but now there are calls for policy makers to be even more aggressive in tightening the monetary screws. The Fed has signalled that it plans to deliver 50-bps increases in June and July, but the markets aren’t dismissing the possibility of a massive 75-bps hike. Fed member James Bullard said on Wednesday that 50-bps moves were his base case and this appears to be the majority view. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Fed member Mester said on Tuesday that she supports raising rates by 50-bps Still, inflation was higher than investors or the Fed had expected, and the May inflation report, which will be released just a few days prior to the Fed’s next meeting on June 14-15th, will be critical in determining the size of the next rate hike. The Fed has embarked on a rate-hike cycle primarily because of soaring inflation, so it stands to reason that inflation will be a key factor in rate policy. Fed member Mester said on Tuesday that she supports raising rates by 50-bps at the next two meetings and then speeding up or slowing down the pace of increases based on inflation levels. Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100.  At the April meeting, the RBNZ said it would act to ensure that “current high consumer price inflation does not become embedded into longer-term inflation expectations.” The RBNZ is also under pressure to tighten more aggressively after Inflation Expectations for Q2 crept upwards to 3.29% (3.27% prior). Inflation Expectations have now risen for an eighth successive month, and the RBNZ is looking to reverse this trend. At the April meeting, the RBNZ said it would act to ensure that “current high consumer price inflation does not become embedded into longer-term inflation expectations.”  With Inflation Expectations not showing any signs of easing, the RBNZ is widely expected to raise rates by 50-bps at the May 25th meeting. NZD/USD Technical NZD/USD is down sharply and has broken below support at 0.6281. Below, there is support at 0.6169 There is resistance at 0.6344 and 0.6456 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
PLN Soars to Record Highs Ahead of NBP Decision

FX Daily: Time to talk about parity | ING Economics

ING Economics ING Economics 13.05.2022 09:55
EUR/USD is close to the 1.0340 key support, below which would see the prospect of parity become quite material. The support may hold today as risk assets correct higher. But parity in the near term wouldn't be a shock. Elsewhere, the CNB's announcement of FX intervention is supporting the koruna, although more action may be needed given dovish prospects In this article USD: Another short-lived correction? EUR: One step closer to parity GBP: Trying to stop the bleeding CZK: CNB intervenes in the FX market for the second time this year USD: Another short-lived correction? Western equity futures are in the green this morning, in line with a rebound in Asian equities overnight after a very rough week for risk sentiment. In FX, the four G10 currencies that have been most strictly correlated with risk-asset dynamics – Norway's krone, Sweden's krona, and the Australian and New Zealand dollars – are attempting a recovery this morning. The liquidity factor is inevitably a key driver of the recent market moves, as often happens during times of market distress: it is therefore not surprising to see the most illiquid G10 currency – NOK – emerging as an underperformer (-11% in a month) despite the otherwise very supportive commodity picture. Some recovery in risk appetite today could help mitigate recent losses for high-beta currencies and take some steam out of the dollar rally for now. Still, we’ll need to see a material stabilisation in sentiment in the coming days to actually reverse some of the recent FX moves. The market’s concerns around the combination of Fed tightening and expected global slowdown continue, however, to argue in favour of volatility and instability in risk assets. Ultimately, this should keep many investors interested in buying the dollar dips after a potential correction today. Today’s main focus in the US is the University of Michigan survey for May, with the main sentiment gauge expected to have inched lower while the 1Y inflation expectations index may have increased marginally to 5.5%. We’ll also hear some more post-CPI Fed comments today as the dove Neel Kashkari and the hawk Loretta Mester are both due to speak. Earlier this week, Mester seemed to re-open the door to a 75bp rate hike, a prospect which has not, however, seen much support from other FOMC members so far. EUR: One step closer to parity EUR/USD broke the key 1.0500 support yesterday as a rocky risk environment continued to favour a stronger dollar while uncertainty around the implications of the Ukraine war in Europe remains elevated. Now, the next major support to watch is the 1.0340 January 2017 low. A break below such a level would make the risk of EUR/USD hitting parity quite material. As we discussed last week in this article, we wouldn’t be shocked to see the pair at 1.00 in the near term. Indeed, after losing the 1.0500 “anchor”, EUR/USD volatility may well increase again. A break below 1.0340 may not be a story for today though as the US session could endorse the rebound in risk assets and ease some of the dollar's momentum. The eurozone calendar includes industrial production figures for May, as well as a bunch of European Central Bank speakers, including Germany’s Joachim Nagel (who recently fully endorsed a July hike), the arch-hawk Isabel Schnabel, as well as Luis Guindos and Mario Centeno. The EUR has blatantly struggled to draw any tangible benefits from the increasingly hawkish tone among ECB policymakers, which in our view boils down to the already quite aggressive tightening expectations (80-85 bp fully priced in by year-end) and lingering uncertainty around whether the ECB will be able to deliver many more hikes afterwards given the deteriorating economic outlook in the euro area. In this environment, another technical break lower in EUR/USD in the coming days is a very material risk. GBP: Trying to stop the bleeding The pound is trying to find some support around the 1.2200 level after what has been a near-freefall from the upper half of the 1.20-1.30 range. Yesterday’s weaker-than-expected growth numbers in the UK seemed to feed the narrative that the Bank of England might soon reach a peak in its tightening cycle as the British economy materially slows down. The way ahead looks likely to remain very uneven for the pound considering that markets still have a good deal of monetary tightening to price out from the GBP swap curve (which continues to imply a policy rate at 2.00% by year-end). Incidentally, with Brexit-related risks back to the fore as the UK appears close to unilaterally scrapping parts of the Northern Ireland agreement, the downside risks for GBP remain quite significant and a move to 1.2000 next week may be on the cards. At the same time, EUR/GBP may remain close to the 0.8500 mark (as the euro is facing weak momentum of its own), although we see greater potential for a return to 0.8600 rather than a drop to 0.8400 in the near term. CZK: CNB intervenes in the FX market for the second time this year The Czech National Bank announced intervention in the FX market a day after the appointment of a new governor, who will take over on 1 July. As we expected, it did so in response to the recent reassessment of market expectations and the depreciation of the koruna. As a result, yesterday it returned below 25.0 EUR/CZK, which we believe is the CNB's goal. For now, in our view, this is mainly a verbal intervention, just like after the outbreak of the Ukrainian conflict, with minimal central bank activity in the market. However, this time the situation is more complicated. Markets are bracing for the arrival of a dovish board, which is taking away support for the koruna in the form of record interest rate differentials. Thus, it can be expected that the central bank will have to stay in the market longer and at a greater cost than before. By 1 July, we expect nothing to change in the CNB's current approach and the koruna to remain below 25.0 EUR/CZK. In the long run, if the new board is serious about its dovish direction, we can expect a much more frequent central bank presence in the market. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Crypto Crash Shocked Many, The Most Sensational Bit Was The Terra (LUNA) Plunge. Is (USD) US Dollar's Rally About To End? BP Has Decreased Slightly, So Does GBP/USD. This Week Has Been Full Of Events | Swissquote

Crypto Crash Shocked Many, The Most Sensational Bit Was The Terra (LUNA) Plunge. Is (USD) US Dollar's Rally About To End? BP Has Decreased Slightly, So Does GBP/USD. This Week Has Been Full Of Events | Swissquote

Swissquote Bank Swissquote Bank 13.05.2022 10:35
The dust seems to be settling in cryptocurrencies. Terra and Luna are now worth almost nothing but Bitcoin returned past the $30K, which is a sign that the confidence in the broader sector may have not been damaged as much as we first feared. European stocks opened in the green and US futures are pointing to the upside, yet volatility remains high, warnings that the wind could change direction rapidly, and the high volatility environment is more favourable for further losses than sustainable gains. European gas futures gained another 13% yesterday, and the pressure on energy prices remain clearly tilted to the upside   On the geopolitical front, the Europeans are going around their own sanctions against Russia by opening accounts with Gazprom bank to pay the Russian gas in exchange of rubles (!!), but the latest news suggest that Russia is now cutting the German gas as a retaliation to its sanctions. Of course, the Europeans have been quite bad in this poker game - they showed too openly how scared they were to lose the Russian gas that now, Russia is gaining the upper hand. European gas futures gained another 13% yesterday, and the pressure on energy prices remain clearly tilted to the upside. Saudi Aramco has surpassed Apple in terms of market capitalization this week, to become the world’s most valuable company, and the US dollar index extended gains to a fresh 20-year high. Everyone is now wondering when the dollar rally will end! Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM   Watch the full episode to find out more! 0:00 Intro 0:32 The dust settles in cryptocurrencies 2:22 Market update 3:13 Energy remains upbeat... 4:21 ... and Aramco is now the world's biggest compagny 5:00 High vol hints at further headache 6:34 Meme pop up 7:28 Dollar extends gains, raising bets that it's soon time for correction! Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
Turbulent Times for Currencies: USD Dominates, SEK Shines

Hong Kong's And Malaysia's GDP Are Printed Today So Does US Michigan Sentiment | Asia Morning Bites | ING Economics

ING Economics ING Economics 13.05.2022 11:33
Just in case markets need another excuse to panic - its Friday the 13th In this article Macro outlook What to look out for: US sentiment Source: shutterstock Macro outlook Global: US stocks took a breather yesterday, and both the S&P500 and NASDAQ finished broadly unchanged, though it was a choppy session with big swings in both directions. The same cannot be said about the benchmark FX index, EURUSD, which plunged to new lows of 1.0380 from the low-1.05s yesterday. The plunge dragged the AUD with it, which is now 0.685, though the JPY seems to be catching a bid here, and it has dropped back to 128.50. With the exception of the JPY, Asian FX was all down against the USD yesterday with the CNY showing little sign of halting its recent slide. Treasury yields were lower again, 2s falling more than 10s. 10Y US Treasury yields are now down 36bp from their May 5 peak at 2.86%. Have US treasury yields already seen their peak for this cycle?  Discuss… really, I’d be interested in your thoughts…I’m not sure what the answer is but it must be worth considering… Data wise, it is a quiet day with the US University of Michigan consumer confidence index and associated inflation expectations measures. We’ve had Powell and Daly re-iterating the idea that the next FOMC meetings will deliver 50bp hikes, not 75bp, though this doesn’t seem to be enough to quell market anxiety anymore. Kashkari has a speaking engagement today on energy and inflation, so we’ll see if he has better luck. India: Late yesterday, India released April CPI, which came in at 7.8%YoY, a fair bit higher than the 7.4% consensus expectation. The upside surprise was partly food-related but was also supported by strength in the fuel and light component and transport (all reflecting higher energy prices) as well as clothing. Now that the RBI is in hiking mode after their 40bp hike this month, it may be worth considering if the next move will need to be 50bp? India also releases April trade data today. The market consensus is for the deficit to widen to -$20bn – for choice, I’d probably go wider still, reflecting domestic economic strength and higher-priced imported commodities. China: Beijing has three days of residents staying at home for Covid testing. Though not officially considered a “lockdown” the economic impacts will be similar. The zero-Covid policy is once again confirmed. Damage to the economy is difficult to estimate from the uncertainty of the timing and duration of lockdown. Guangdong province is experiencing floods from heavy rainfall. This may also affect the operations of some factories, adding another headwind to manufacturing and exports.  South Korea: The government has proposed its 2nd supplementary budget worth 59.4 trillion won, of which 36.4 trillion won is allocated to the central government and 70% of the budget is allocated to compensate small business owners. The size of cash transfer is at least 6 million won to 10 million won each (USD450 – 800). The remaining 23 trillion won is earmarked to transfer to local government.  No bond issuance is required as the budget is mostly financed through excess tax revenue of 53 trillion won and expenditure restructuring. This is expected to provide some relief to the bond market due to better supply conditions. However, higher-than-expected government spending could add further upside risk to the current CPI forecast of 4.6% in 2022 and trigger more aggressive monetary tightening. For now, we think that the Bank of Korea would stop at 2.25% and try not to go beyond that. What to look out for: US sentiment Malaysia GDP (13 May) Hong Kong GDP (13 May) US Michigan sentiment (13 May) TagsEmerging Markets Asia Pacific Asia Markets Asia economics   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Oil Defies Broader Risk-off Sentiment: Commodities Update

Gold Price (XAUUSD) Nears 3-Month Low, The US Dollar (USD) Performance Agains (EUR) Euro Makes EUR/USD Decrease 2016's Lows And (BTC) Bitcoin Price Is Back Above $30K | Conotoxia

Conotoxia Comments Conotoxia Comments 13.05.2022 11:43
Gold held near three-month lows near 1,825 USD per ounce on Friday and is falling for the fourth week in a row from 1990 USD. One factor for the decline in gold prices could be the strengthening U.S. dollar, which seems to have stabilized near the 20-year high reached on Thursday. The USD strengthening may have followed the release of US consumer and producer inflation data, which seems to reinforce expectations of aggressive interest rate hikes by the Federal Reserve. This, in turn, may raise concerns about a weaker global economic outlook, helping to boost USD demand. The recent strengthening of the USD may also be related to the divergence in monetary policy on both sides of the Atlantic Recall that the U.S. core CPI remained near a 40-year high of 8.3 percent in April, while the core CPI also exceeded expectations at 6.2 percent, fueling fears that high price levels may persist. Thus, markets are anticipating increases of 50 basis points at each of the next two Fed meetings in June and July. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM This could also be significant for the EUR/USD major pair, which approached the 1.0350 level this week, its lowest level since December 2016. The recent strengthening of the USD may also be related to the divergence in monetary policy on both sides of the Atlantic. The Fed is moving towards aggressive hikes, while the European Central Bank may raise interest rates by 50-75 basis points in total by the end of the year. Thus, the scale of divergences seems to be very large. Bitcoin rebounded yesterday from its lowest level in almost 17 months and crossed the $30,000 mark today In addition to gold and the dollar, attention should again turn to the cryptocurrency market and towards stock market indices, where in both cases an attempt to defend against possible further declines may be underway. Bitcoin rebounded yesterday from its lowest level in almost 17 months and crossed the $30,000 mark today. Despite this, the world's most popular and widely used cryptocurrency is at this point on its way to its worst week in four months, falling more than 10 percent. Yesterday, the market additionally saw a likely panic as the tether to USD exchange rate departed at 1:1. At the apogee of fears for the collapse of the largest stablecoin, the cryptocurrency market seemed to have reached its weekly lows. Currently, USDT is trying to get back to the 1:1 exchange rate, and the rest of the market seems to be stabilizing. Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

(EUR/USD) US Dollar Continues To Rally Against The EUR, (EUR/GBP) Fears Of Eurozone Recession Rise, USD/JPY Reflecting Mixed Market Sentiment - Good Morning Forex!

Rebecca Duthie Rebecca Duthie 13.05.2022 10:12
Summary: The US Dollar strengthens as investors seek safer assets. EUR weakens against the GBP. USD/JPY showing mixed signals despite contrasting monetary policies. EUR/CHF currency pair reflecting mixed sentiment. The US Dollar attracts risk averse investors. The market sentiment for this currency pair has been showing bearish signals throughout the past week. Investor sentiment seems to be the main driver for the consistently decreasing price of the EUR/USD currency pair. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The hawkish Federal Reserve has investors turning to the greenback as a safety net against inflation and rising prices. This trend may be due for a slight change as investors expect the European Central Banks (ECB) to increase yields in the summer. EUR/USD Price Chart GBP Shows strength against the EUR Market sentiment for this currency pair is showing bearish signals. The EUR is struggling against the Pound Sterling amidst rising gas prices increasing the likelihood of sending the European Union into a recession later in 2022. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Fears of stagflation are causing investors, who are already risk-averse, to turn away from the Euro.The repricing of gas comes after Russia tightens gas supplies to the Eurozone in retaliation for sanctions. EUR/GBP Price Chart US Dollar and Japanese Yen Market sentiment is mixed for this currency pair. With the Fed hiking interest rates to fight inflation and the Bank of Japan (BOJ) pumping stimulus into the in order to keep the 10 year government bond yield anchored, the contrast is what is driving the mixed sentiment for this pair. USD/JPY Price Chart Earlier on in the trading week the EUR managed to strengthen against the CHF - EUR/CHF currency pair The market sentiment is showing mixed signals for the trading day today. Earlier on in the trading week the EUR managed to strengthen against the CHF, but the CHF has since gained some ground. Neither the ECB not the SNB have made moves to increase interest rates to fight inflation. EUR/CHF Price Chart Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com
Fed Announced That A Further 50bps Rise In US Interest Rates Is On the Table - Dow Jones, Bitcoin & US Dollar Rally In Response

Fed Announced That A Further 50bps Rise In US Interest Rates Is On the Table - Dow Jones, Bitcoin & US Dollar Rally In Response

Rebecca Duthie Rebecca Duthie 13.05.2022 17:14
Summary: The market's reaction to the Fed's announcement for the potential for further interest rate hikes. DJI, Bitcoin and USD Dow Jones rallied on friday The Dow Jones rallied during early trading on Friday. The market seems to be attempting to recover from the poor performance of the past week. This price increase comes after the Federal Reserve Chairman announced that two more 50 bp rises in interest rates are on the table for the next two Fed meetings. The daily rise is unlikely to rule out that the Dow Jones will end the trading week on an overall loss. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM DJI Price Chart US Dollar reacts well to the Fed's announcement On Friday the US Dollar strengthened further against its major rival, the Euro. In the wake of the Feds continuing hawkish attitude, the US Dollar is continuing on its strengthening path. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM The week for the US Dollar has been volatile, earlier in the week market participants were hesitant to place their confidence in the greenback whilst they awaited the U.S CPI report. When the report exceeded market participants expectations along with the Fed’s recent announcement regarding the likelihood of further interest rate hikes the US Dollar recovered and saw further strength. Bitcoin showing signs of recovery The price of Bitcoin has also recovered today after setting its lowest level since December 2021 on Thursday. The price of Bitcoin recovers back up to over $30,000. Whether or not this rally will continue is in question, especially with the volatility the markets saw this past week. Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100. Bitcoin Price Chart Sources: investors.com, finance.yahoo.com
Chart of the Week : An ECB rate hike is imminent

How Is Euro Performing Against US Dollar (EUR/USD)? (EUR) Euro under pressure, falls below 1.04 | Oanda

Kenny Fisher Kenny Fisher 13.05.2022 16:15
The euro has stabilized on Friday, after a dreadful Thursday in which EUR/USD fell 1.26%. Russian announces sanctions The euro continues to struggle and is trading at lows last seen in January 2017. The Ukraine war has taken a bite out of the eurozone economy and sent the euro tumbling. The latest development weighing on the euro was Russia’s announcement of sanctions on some European gas importers, at a time when the EU is trying to garner support for a ban on Russian oil. Germany has said that it could manage without Russian oil, but the main stumbling block to the ban appears to be Hungary, which is very dependent on Russian energy supplies. The euro has broken through major support lines at 1.08 and 1.05, and if it breaches the 1.03 line, we could see move towards parity with the dollar. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The wobbly euro hasn’t received any support from the ECB, which has been slow to shed its dovish policy. After years of monetary easing, ECB members are becoming more vocal about the need for tighter policy, and ECB President Christine Lagarde said earlier this week that QE would end in the third quarter, and a rate hike would follow “some time” after that. We could see a rate increase as early as July, although it’s unclear if the ECB will launch a rate cycle with a hike of 25 or 50 basis points. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM The US dollar has shined against the majors, buoyed by an aggressive Federal Reserve. The April US inflation report indicated that expectations of an inflation peak were premature, as CPI fell only slightly, from 8.5% to 8.3%. Fed Chair Powell has signalled that the Fed will deliver 0.50% rate increases in June and July, as the Fed is focused on lowering inflation, which has hit a 40-year high. There has been some talk of a 0.75% hike, but it is far more likely that the Fed will stick with 0.50% moves, hoping that they can do the trick and wrestle down inflation. EUR/USD Technical 1.0398 has switched to resistance. It is a weak line and could see further action during the day. Above, there is resistance at 1.0473 There is support at 1.0321 and 1.0246     This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
UK Budget: Short-term positives to be met with medium-term caution

COT Currency Speculators raised British Pound Sterling bearish bets for 10th week

Invest Macro Invest Macro 15.05.2022 14:26
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for this week’s Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday May 10th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar. Highlighting the COT currency data this week was the rise in bearish bets for the British pound sterling currency futures contracts. Pound speculators have raised their bearish bets for a tenth consecutive week this week and for the eleventh time out of the past twelve weeks. Over the past ten-week time-frame, pound bets have dropped by a total of -79,261 contracts, going from -337 net positions on March 1st to a total of -79,598 net positions this week. The deterioration in speculator sentiment has now pushed the pound net position to the most bearish standing of the past one hundred and thirty-seven weeks, dating back to September 24th of 2019. Pound sterling sentiment has been hit by a recent slowing economy as the UK GDP declined by 0.1 percent in March after flat growth in February. Also, weighing on the UK economy is the war in Ukraine that has sharply raised inflation in the country (and elsewhere) and which could see the UK economy with the lowest growth rate among G7 countries in 2023, according to the IMF. Overall, the currencies with higher speculator bets this week were the Euro (22,907 contracts), US Dollar Index (1,705 contracts), Bitcoin (315 contracts) and the Mexican peso (2,102 contracts). The currencies with declining bets were the Japanese yen (-9,660 contracts), Australian dollar (-13,198 contracts), Brazil real (-1,010 contracts), Swiss franc (-1,856 contracts), British pound sterling (-5,785 contracts), New Zealand dollar (-6,386 contracts), Canadian dollar (-14,436 contracts), Russian ruble (-263 contracts) and the Mexican peso (2,102 contracts). Speculator strength standings for each Commodity where strength index is current net position compared to past three years, above 80 is bullish extreme, below 20 is bearish extreme OI Strength = Current Open Interest level compared to last 3 years range Spec Strength = Current Net Speculator level compared to last 3 years range Strength Move = Six week change of Spec Strength Data Snapshot of Forex Market Traders | Columns Legend May-10-2022OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index USD Index 57,556 84 34,776 86 -37,174 13 2,398 43 EUR 705,046 84 16,529 40 -43,026 64 26,497 18 GBP 264,594 80 -79,598 17 95,245 86 -15,647 23 JPY 247,278 87 -110,454 1 124,927 97 -14,473 24 CHF 51,282 37 -15,763 40 29,819 69 -14,056 16 CAD 151,009 31 -5,407 38 2,939 67 2,468 35 AUD 153,209 47 -41,714 46 47,126 54 -5,412 39 NZD 56,235 56 -12,996 49 16,874 56 -3,878 7 MXN 153,858 28 16,725 34 -20,866 64 4,141 61 RUB 20,930 4 7,543 31 -7,150 69 -393 24 BRL 61,450 55 40,778 90 -42,031 10 1,253 79 Bitcoin 10,841 57 703 100 -789 0 86 15 Open Interest is the amount of contracts that were live in the marketplace at time of data. US Dollar Index Futures: The US Dollar Index large speculator standing this week came in at a net position of 34,776 contracts in the data reported through Tuesday. This was a weekly lift of 1,705 contracts from the previous week which had a total of 33,071 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 85.8 percent. The commercials are Bearish-Extreme with a score of 12.8 percent and the small traders (not shown in chart) are Bearish with a score of 42.8 percent. US DOLLAR INDEX Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 86.6 3.2 8.6 – Percent of Open Interest Shorts: 26.2 67.8 4.5 – Net Position: 34,776 -37,174 2,398 – Gross Longs: 49,864 1,837 4,970 – Gross Shorts: 15,088 39,011 2,572 – Long to Short Ratio: 3.3 to 1 0.0 to 1 1.9 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 85.8 12.8 42.8 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 6.6 -3.4 -19.3   Euro Currency Futures: The Euro Currency large speculator standing this week came in at a net position of 16,529 contracts in the data reported through Tuesday. This was a weekly increase of 22,907 contracts from the previous week which had a total of -6,378 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 40.1 percent. The commercials are Bullish with a score of 63.8 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 18.3 percent. EURO Currency Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.4 53.3 12.0 – Percent of Open Interest Shorts: 30.0 59.4 8.3 – Net Position: 16,529 -43,026 26,497 – Gross Longs: 228,230 376,043 84,921 – Gross Shorts: 211,701 419,069 58,424 – Long to Short Ratio: 1.1 to 1 0.9 to 1 1.5 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 40.1 63.8 18.3 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -1.5 1.2 0.9   British Pound Sterling Futures: The British Pound Sterling large speculator standing this week came in at a net position of -79,598 contracts in the data reported through Tuesday. This was a weekly fall of -5,785 contracts from the previous week which had a total of -73,813 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 16.6 percent. The commercials are Bullish-Extreme with a score of 86.0 percent and the small traders (not shown in chart) are Bearish with a score of 23.2 percent. BRITISH POUND Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 11.1 79.6 7.6 – Percent of Open Interest Shorts: 41.2 43.6 13.5 – Net Position: -79,598 95,245 -15,647 – Gross Longs: 29,469 210,627 20,157 – Gross Shorts: 109,067 115,382 35,804 – Long to Short Ratio: 0.3 to 1 1.8 to 1 0.6 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 16.6 86.0 23.2 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -28.5 25.6 -7.7   Japanese Yen Futures: The Japanese Yen large speculator standing this week came in at a net position of -110,454 contracts in the data reported through Tuesday. This was a weekly decline of -9,660 contracts from the previous week which had a total of -100,794 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.8 percent. The commercials are Bullish-Extreme with a score of 96.6 percent and the small traders (not shown in chart) are Bearish with a score of 24.0 percent. JAPANESE YEN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 4.5 86.2 8.0 – Percent of Open Interest Shorts: 49.2 35.7 13.9 – Net Position: -110,454 124,927 -14,473 – Gross Longs: 11,196 213,084 19,811 – Gross Shorts: 121,650 88,157 34,284 – Long to Short Ratio: 0.1 to 1 2.4 to 1 0.6 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 0.8 96.6 24.0 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -5.1 0.0 16.7   Swiss Franc Futures: The Swiss Franc large speculator standing this week came in at a net position of -15,763 contracts in the data reported through Tuesday. This was a weekly fall of -1,856 contracts from the previous week which had a total of -13,907 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.8 percent. The commercials are Bullish with a score of 69.2 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 15.5 percent. SWISS FRANC Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 9.2 74.6 16.1 – Percent of Open Interest Shorts: 40.0 16.5 43.5 – Net Position: -15,763 29,819 -14,056 – Gross Longs: 4,727 38,258 8,271 – Gross Shorts: 20,490 8,439 22,327 – Long to Short Ratio: 0.2 to 1 4.5 to 1 0.4 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 39.8 69.2 15.5 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -7.7 8.0 -7.6   Canadian Dollar Futures: The Canadian Dollar large speculator standing this week came in at a net position of -5,407 contracts in the data reported through Tuesday. This was a weekly fall of -14,436 contracts from the previous week which had a total of 9,029 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 38.3 percent. The commercials are Bullish with a score of 66.9 percent and the small traders (not shown in chart) are Bearish with a score of 34.7 percent. CANADIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 25.6 49.8 21.8 – Percent of Open Interest Shorts: 29.2 47.9 20.1 – Net Position: -5,407 2,939 2,468 – Gross Longs: 38,679 75,215 32,880 – Gross Shorts: 44,086 72,276 30,412 – Long to Short Ratio: 0.9 to 1 1.0 to 1 1.1 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 38.3 66.9 34.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -4.0 14.5 -29.0   Australian Dollar Futures: The Australian Dollar large speculator standing this week came in at a net position of -41,714 contracts in the data reported through Tuesday. This was a weekly decrease of -13,198 contracts from the previous week which had a total of -28,516 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 46.2 percent. The commercials are Bullish with a score of 54.0 percent and the small traders (not shown in chart) are Bearish with a score of 39.2 percent. AUSTRALIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.1 59.9 13.1 – Percent of Open Interest Shorts: 51.3 29.1 16.7 – Net Position: -41,714 47,126 -5,412 – Gross Longs: 36,869 91,731 20,131 – Gross Shorts: 78,583 44,605 25,543 – Long to Short Ratio: 0.5 to 1 2.1 to 1 0.8 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 46.2 54.0 39.2 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 7.3 4.7 -34.4   New Zealand Dollar Futures: The New Zealand Dollar large speculator standing this week came in at a net position of -12,996 contracts in the data reported through Tuesday. This was a weekly fall of -6,386 contracts from the previous week which had a total of -6,610 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 49.5 percent. The commercials are Bullish with a score of 56.4 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 7.4 percent. NEW ZEALAND DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 27.0 68.5 3.9 – Percent of Open Interest Shorts: 50.1 38.5 10.8 – Net Position: -12,996 16,874 -3,878 – Gross Longs: 15,203 38,541 2,216 – Gross Shorts: 28,199 21,667 6,094 – Long to Short Ratio: 0.5 to 1 1.8 to 1 0.4 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 49.5 56.4 7.4 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -20.4 26.0 -54.4   Mexican Peso Futures: The Mexican Peso large speculator standing this week came in at a net position of 16,725 contracts in the data reported through Tuesday. This was a weekly advance of 2,102 contracts from the previous week which had a total of 14,623 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 34.5 percent. The commercials are Bullish with a score of 64.1 percent and the small traders (not shown in chart) are Bullish with a score of 60.6 percent. MEXICAN PESO Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 41.5 53.1 4.2 – Percent of Open Interest Shorts: 30.7 66.7 1.5 – Net Position: 16,725 -20,866 4,141 – Gross Longs: 63,921 81,735 6,467 – Gross Shorts: 47,196 102,601 2,326 – Long to Short Ratio: 1.4 to 1 0.8 to 1 2.8 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 34.5 64.1 60.6 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 10.6 -10.1 -3.5   Brazilian Real Futures: The Brazilian Real large speculator standing this week came in at a net position of 40,778 contracts in the data reported through Tuesday. This was a weekly lowering of -1,010 contracts from the previous week which had a total of 41,788 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 90.5 percent. The commercials are Bearish-Extreme with a score of 10.3 percent and the small traders (not shown in chart) are Bullish with a score of 79.4 percent. BRAZIL REAL Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 79.5 15.4 5.0 – Percent of Open Interest Shorts: 13.1 83.8 3.0 – Net Position: 40,778 -42,031 1,253 – Gross Longs: 48,835 9,454 3,070 – Gross Shorts: 8,057 51,485 1,817 – Long to Short Ratio: 6.1 to 1 0.2 to 1 1.7 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 90.5 10.3 79.4 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -1.8 3.5 -20.6   Russian Ruble Futures: The Russian Ruble large speculator standing this week came in at a net position of 7,543 contracts in the data reported through Tuesday. This was a weekly fall of -263 contracts from the previous week which had a total of 7,806 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 31.2 percent. The commercials are Bullish with a score of 69.1 percent and the small traders (not shown in chart) are Bearish with a score of 23.9 percent. RUSSIAN RUBLE Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 36.6 60.6 2.8 – Percent of Open Interest Shorts: 0.5 94.7 4.7 – Net Position: 7,543 -7,150 -393 – Gross Longs: 7,658 12,679 593 – Gross Shorts: 115 19,829 986 – Long to Short Ratio: 66.6 to 1 0.6 to 1 0.6 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 31.2 69.1 23.9 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -15.6 16.7 -18.8   Bitcoin Futures: The Bitcoin large speculator standing this week came in at a net position of 703 contracts in the data reported through Tuesday. This was a weekly gain of 315 contracts from the previous week which had a total of 388 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 100.0 percent. The commercials are Bearish-Extreme with a score of 0.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 14.9 percent. BITCOIN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 81.1 2.1 9.1 – Percent of Open Interest Shorts: 74.6 9.4 8.3 – Net Position: 703 -789 86 – Gross Longs: 8,789 227 989 – Gross Shorts: 8,086 1,016 903 – Long to Short Ratio: 1.1 to 1 0.2 to 1 1.1 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 100.0 0.0 14.9 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 19.0 -24.9 -13.6   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
British Pound To Japanese Yen (GBP/JPY) Reaches Lower Levels! British Pound (GBP) has been producing some weaker data as of recently and I expect it to continue. | Saul Lokier

British Pound To Japanese Yen (GBP/JPY) Reaches Lower Levels! British Pound (GBP) has been producing some weaker data as of recently and I expect it to continue. | Saul Lokier

Saul Lokier Saul Lokier 16.05.2022 08:02
The BoE have hiked their rates for a 4th time but have signalled there is less to come. A dovish hike and mixed data reports is giving a bearish tone for the currency.  Weekly trade idea on GBP/JPY. Week: 16-20.05.2022 Weaker PMIs and Retail Sales for the GBP. JPY on the other hand has had a recent re-evaluation after the steep runs. Potential profit taking moving the market. Rising rates and the central bank's level of hawkishness could drive stocks lower, therefore driving the JPY higher. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Key Levels: Resistance 159.00 Support 156.400 Trend GBP/JPY. Bearish Overall trend recently has been to the downside on the pair, I think this trend will continue into the near future and breaking lower lows as it moves. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Call to Action/Trade Idea Wait for a pullback and a fair value price to enter short on this pair for the short term future.
Analysis Of USD/CHF Pair: The Swiss Currency Pair Rebounds

US Dollar Against Swiss Franc (USD/CHF) - Dollar Reaching Three-Year High!? Norwegian Krone Strengthens As Crude Oil Gains, DAX Goes Back To The Early-May Levels! | Orbex

Jing Ren Jing Ren 16.05.2022 09:09
USDCHF grinds higher The US dollar consolidates its gains as traders ponder whether inflation has peaked. A close above the parity, last seen in November 2019 indicates strong bullish sentiment. Trend followers have been eager to buy at pullbacks and may continue to do so in this directional market. The RSI’s overbought condition has prompted intraday buyers to take profit. 0.9960 is the closest support and 0.9870 a second line of defence for the bulls. A rebound would bring the greenback back to a three-year high at 1.0120. USDNOK rides trendline The Norwegian krone recoups losses as oil prices bounce back. The US dollar has been grinding up a rising trend line after a bullish breakout in early May. Sentiment remains extremely bullish and the pair is on its way to the psychological level of 10.0000. The RSI’s repeatedly overbought situation and a break below the trend line may cause a retracement as buyers would be unwilling to chase after higher bids. The demand zone around 9.6300 is a key level to keep short-term sentiment upbeat. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM GER 40 tests daily resistance The Dax 40 bounces higher amid bargain hunting after earlier sell-off. The index found support at the base of the mid-March rally at 13300. A bullish RSI divergence revealed a deceleration in the latest sell-off and a close above 13850 prompted sellers to cover their bets. The daily resistance at 14300 is a major hurdle and its breach could turn sentiment around. An overbought RSI may cause a pullback to test buyers’ commitment. 13750 is a fresh support and 13300 a floor to keep the current rebound relevant. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM
Elections in North Rhine Westphalia could bring tensions in Berlin | ING Economics

Elections in North Rhine Westphalia could bring tensions in Berlin | ING Economics

ING Economics ING Economics 16.05.2022 10:38
The elections in North Rhine Westphalia were the most important in Germany this year, not only bringing the second defeat in a week for chancellor Olaf Scholz but also a comeback for what Germans call ‘Volksparteien’ (people’s parties). Learn more on ING Economics German SPD leader Olaf Scholz On Sunday, 13 million German were eligible to vote in the state of North Rhine Westphalia, the country’s most populous state. As so often in the past, state elections are affected by both national and regional factors, issues and politicians. Very often election losers blame ‘Berlin’ for their losses, while winners see their own regional strength as the reason for victory. In Sunday’s elections, it is fair to say that war in Ukraine and the federal government’s performance since the September elections clearly left their mark. According to the projections at 9pm CET, the CDU of incumbent state premier Hendrik Wüst has come in as largest party with 35 percent of the votes; up 2 percentage points from the last elections in 217. The SPD recorded its worst result since the end of World War II, coming in at 27.5%. The biggest election winners were the Greens, rising to 18.5%, from 6.4% in 2017. In contrast, the FDP, which has governed North Rhine-Westphalia in a coalition with the CDU, is projected come in at just above 5%, from 13% in 2017. With these results, the current CDU/FDP government can no longer stay in government. A coalition of CDU and Greens looks most likely, even if a coalition of the SPD and Greens could currently also be possible. Impact of regional elections on federal politics and policies Already last week, the elections in the much smaller state of Schleswig Holstein brought a painful defeat for Olaf Scholz’s SPD. The CDU’s votes went up by 11.4 percentage points to 43.4%, while the SPD’s votes went down by the same amount to 16%. The Greens also improved their popular vote, while the FDP’s votes collapsed. Even though these were ‘only’ two regional state elections, there are a few observations which could shape German politics and policies in the coming months: The return of the Volkspartei (people’s party). At last year’s federal elections, the winning party, Olaf Scholz’ SPD, had 25.7% of all votes. The times in which the winning party received 35% to 45% and often only needed a junior coalition partner, seemed to be over. The elections in North Rhine Westphalia, Schleswig Holstein and, earlier this year, Saarland saw the winning party again getting between 35% and close to 50% of the votes. At least in times of uncertainty, Germans seem to long for stability. The fragmentation of the political system has been completely reversed. Both populist left-wing and right-wing parties, AfD and Die Linke, saw their votes dropping significantly. SPD under pressure. With two important defeats in a week, the SPD’s grassroots could become uneasy. Pressure on Olaf Scholz to demonstrate clearer leadership could increase. Don’t forget that last year not everyone in the party embraced Scholz. It was only the party grassroots that embraced Scholz’s winning streak in the weeks leading to the federal elections. Greens on the rise. The Greens' good performance in the last two regional elections does not come as a surprise. The two leading Green ministers in the federal government, Robert Habeck (Economy and Environment) and Annalena Baerbock (Foreign Affairs) are very visible, have communicated well and enjoying high popularity. The current tailwinds for the Greens could accelerate the energy transition. Finally, the collapse of the FDP. North Rhine Westphalia is the stamping ground of German finance minister Christian Lindner. Two sharp defeats, bringing the FDP again close to the 5% threshold, are likely to put pressure on the FDP in the federal government. Policies currently supported by Lindner as minister of finance, including significant fiscal stimulus and higher deficits, more government support and potentially more fiscal burden sharing in Europe, are not very popular among FDP voters. Increasing tensions within federal coalition possible The good thing for the federal government is that the next regional state elections will only come in October (in Lower Saxony). The two recent elections will not go down well, at least not with two of the three coalition partners in Berlin. This does not mean that there could be a government crisis any time soon. Not with less than one year in office. But the pressure to sharpen each party’s profile will increase and this by nature will eventually increase tensions in any three-party-coalition. TagsPolitics Germany Eurozone Elections Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

EURCHF - My Trading Plan in a picture. Euro To Swiss Franc (EUR/CHF) is overall bullish trading inside the orange channel | Richard Nasr

Richard Nasr Richard Nasr 16.05.2022 11:57
As per my trading style/plan; Here are the two strong zones where I will be looking for high probability buy setups: I call them War Zones, (highlighted in Purple circles) Zone 1: (around 1.060) This highlighted purple circle is a strong area to look for sell setups as it is the intersection of the blue resistance and upper orange trendline. (acting as non-horizontal resistance) Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Zone 2: (around 1.030) This highlighted purple circle is a strong area to look for buy setups as it is the intersection of the green support and lower orange trendline. (acting as non-horizontal support) As per my trading style: As EURCHF approaches one of the purple circles, I will be looking for reversal setups (like a double bottom /top pattern, trendline break , and so on...) Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

Euro To US Dollar (EUR/USD) Chart Shows A Sliding Price Line | EU forecast: growth down, inflation up | Oanda

Kenny Fisher Kenny Fisher 16.05.2022 17:59
The euro is drifting at the start of the week, as EUR/USD trades slightly above the 1.04 level. The euro remains under pressure, as it continues to weaken against the US dollar. EUR/USD hasn’t mustered a winning week since March and hit a dubious milestone on Thursday, closing below the 1.04 line for the first time since January 2003. If the euro breaks below support at 1.03 it would be on track to fall to parity, a psychologically significant level. EU forecast sees lower growth, higher inflation The EU gave the eurozone a report card on Monday, and the data wasn’t pretty. The report was the EU’s first forecast since the Russian invasion of Ukraine. The forecast stated that eurozone growth would expand by 2.7% in 2022 and 2.3% in 2023. In February, the forecast stood at 4% and 2.7%, respectively. On the inflation front, the forecast was revised upwards to 6.1% in 2022 and 2.7% in 2023, up from the previous forecast of 3.5% and 1.7%, respectively. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The takeaway from the EU forecast is that as a result of the Ukraine war, the eurozone is experiencing lower growth and higher inflation, raising concerns that the eurozone could soon be gripped by stagflation. The eurozone has been particularly hard-hit by the conflict, due to its heavy reliance on Russian energy and geographical proximity to Ukraine. Unsurprisingly, investors don’t like what they are seeing, and the euro has taken it on the chin. Reports that the EU is trying to garner support for a ban on Russian oil, which would mark the ratcheting up of sanctions against Moscow, is putting further pressure on the wobbly euro. Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM The upheaval caused by the Ukraine war seems to have woken up the ECB from its dovish slumber. After years of monetary easing, ECB members are becoming more vocal about the need for tighter policy, and ECB President Christine Lagarde said earlier this week that QE would end in the third quarter, and a rate hike would follow “some time” after that. We could see the launch of a rate-tightening cycle as early as July. EUR/USD Technical 1.0398 has switched to resistance. It is a weak line and could see further action during the day. Above, there is resistance at 1.0473 There is support at 1.0321 and 1.0246 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

(USD/CAD) - Strong Performance Of Canadian Dollar - CAD rallies on US consumer confidence | Oanda

Kenny Fisher Kenny Fisher 16.05.2022 18:04
The Canadian dollar is unchanged on Monday, as it trades at the 1.29 line. Weak US consumer confidence boosts Canadian dollar The Canadian dollar ended the week in splendid fashion, with gains of over 1 per cent. This marked the Canadian dollar’s best one-day performance this year and recovered all of the week’s losses. The strong gains were driven by a disappointing UoM Consumer Sentiment index for May, which dropped to 59.2, down sharply from 65.2 in April and the lowest since October 2011. Just one year ago, the index was 82.8, indicative of a massive erosion in the confidence levels of the US consumer. Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM Consumers were more pessimistic about current and future expectations, and inflation expectations remained at 5.4% for a third straight month, a 40-year high. A fall in consumer confidence has so far not spilled over to consumer spending, but soaring inflation could cause consumers to cut back on spending, which would hurt economic growth. Canada posted some solid numbers earlier today, although that wasn’t enough for the Canadian dollar to extend Friday’s impressive gains. Housing Starts and Wholesale Sales improved and were stronger than expected. Manufacturing Sales rose 2.5% in March, crushing the estimate of 1.7%. Oil and metal sales rose, reflective of high commodity prices, which is bullish for the commodity-based Canadian dollar. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Canada’s tightening job market is putting further pressure on the Bank of Canada to raise rates at a faster pace than expected. The benchmark rate is currently at an even 1.00%, after the 0.50% hike in April. Governor Macklem has hinted that he could deliver more 0.50% hikes and we could see rates rise to 2% by the end of Q2. Macklem has signalled the rate-hike cycle could be very aggressive, saying that he will lift rates above 3% if necessary, in order to beat back spiralling inflation. USD/CAD Technical USD/CAD is testing resistance at 1.2962. Above, there is resistance at 1.3023 There is support at 1.2848 and 1.2787   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
US Dollar To Japanese Yen (USD/JPY) Forecast: Three reasons to sell the pair as the tides turn against it | FXStreet

US Dollar To Japanese Yen (USD/JPY) Forecast: Three reasons to sell the pair as the tides turn against it | FXStreet

FXStreet News FXStreet News 16.05.2022 16:09
The yen has returned to attracting safe-haven flows as China's covid crisis intensifies. Fear of a Fed-fueled recession is pushing 10-year Treasury yields lower. Technicals are pointing to a clear peak and a clearer downtrend. USD/JPY bearish – there are good reasons to expect the currency pair to fall, and the trade seems more straightforward than other ones. *Note: This content first appeared as an answer to a Premium user. Sign up and get unfettered access to our analysts and exclusive content. 1) When things go wrong in Asia, buy the yen The yen benefits from safe-haven flows related to China's aggressive policies against covid. Lockdowns in Shanghai and Beijing, the world's second-largest economies largest and most important cities, are hurting the economy. Recent retail sales figures showed a plunge of 11.1% YoY in April, nearly double the early expectations and a sign of falling demand. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Not only consumption is dropping. Industrial output also badly missed estimates with a fall of 2.9% YoY, worse than the 0.5% increase projected. Japanese investors are repatriating investments in China and other places in Asia. The yen's status as a safe currency is mostly seen when there is trouble in its own continent. 2) The wrong yields are rising The second reason for the USD/JPY decline – and the potential for more – comes from the US. The Federal Reserve's aggressive policy of raising interest rates has been positive for the pair, especially as it contrasted with the Bank of Japan's dovish policy. However, there can be too much of a good thing. Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM While short-term Treasury yields continue rising – reflecting expectations for higher inflation and higher borrowing costs – the part that is relevant to USD/JPY is turning south. Returns on 10-year bonds have declined from their peak above 3% as investors begin pricing in growing chances of a recession. Lloyd Blankfein of Goldman Sachs said it is "a very high risk" and that consumers and businesses should get ready. That prophecy may be self-fulfilling. 3) Technical decline Third, the technical tide has turned against the pair. It has begun trading in a downtrend channel, with lower highs and lower lows. Momentum on the 4h-chart has turned negative, the RSI has failed to climb above the 50 level, and the price is capped at the 100-SMA – after falling below the 50-SMA. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Support is at 128.70, which cushioned the pair twice in May. The monthly low of 127.50 is the next level to watch, and it also converges with the 200-SMA. Further down, 126.90 and 126.40 are noteworthy. Resistance is at 1.2950, and then at 130.90. Final thoughts The list above provides ample ammunition for bears, and bulls may need to cling to hopes for further yen-printing from the Bank of Japan – a highly unlikely scenario given the current, already extremely loose monetary policy.
(EUR/USD, EUR/GBP, EUR/CHF) ECBs Hint To Raise Interest Rates Offers Some Relief For The Euro - Good Morning Forex!

(EUR/USD, EUR/GBP, EUR/CHF) ECBs Hint To Raise Interest Rates Offers Some Relief For The Euro - Good Morning Forex!

Rebecca Duthie Rebecca Duthie 16.05.2022 15:13
Summary: Rising of European government bond yields. Despite the Euro’s likelihood to strengthen, market sentiment is still bearish for the EUR/GBP USD continues to show bullish sentiment against the JPY Raised government bond yields allow the EUR some relief The price of the EUR/USD currency pair increased by more than 0.15% on Monday. Market sentiment for the EUR/USD currency pair has turned bullish on Monday. The European Central Banks (ECB) representative, Villeroy, hinted at the possibility of an active summer for the European bond yields, this comes amidst concerns that a weak Euro threatened price stability in the currency bloc. A weak Euro can steer the ECB away from its inflation target. The possibility of raising interest rates from the ECB is likely to instill investors with confidence in the Euro going forward and in the ECBs determination to fight against rising prices and inflation. EUR/USD Price Chart Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM EUR/GBP showing bearish signals Market sentiment for this currency pair is showing bearish signals. In general the market risk sentiment has soured over the past weeks, investors are still concerned over the lockdowns in China, the war in the Ukraine and rising interest rates at the Federal Reserve Bank. With the UK economy bordering on a recession, and Villeroy’s comments, the Euro is strengthening against the Pound Sterling, after the drop in value mid last week, the recovery is welcome. EUR/GBP Price Chart CHF not keeping up with the EUR The Euro strengthens against the CHF amidst the bullish market sentiment for this currency pair. The volatility in the forex market is felt daily by investors, as investors risk sentiment sours, the value of safe-haven currencies, like the Swiss Franc, usually strengthens. However, investor confidence in the EURO has improved as expectations for the ECB to raise interest rates increase. EUR/CHF Price Chart Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM USD/JPY bullish The market sentiment for this currency pair is showing bullish signals. Despite the bullish signals, the JPY has gained on the USD on Monday. As the hawkish Fed continues, it is likely that the sentiment will remain bullish for this currency pair. If there are to be bearish signals for the pair, they are likely to be short lived if the Bank of Japan (BoJ) continue with their dovish monetary policy. USD/JPY Price Chart Sources: Finance.yahoo.com, poundsterlinglive.com, dailyfx.com
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

FX Update: Euro waxes resilient as G3 horse-race steals focus. | Saxo Bank

John Hardy John Hardy 16.05.2022 23:08
Summary:  The Friday squeeze in equity markets saw the US dollar roll over after its most recent bout of strength. As market stumbled a bit to open this week after weak Chinese data in the Asian session overnight, the more interesting relative race to watch is the relative moves between G3 currencies as the euro shows signs of putting up a bit of a fight, at least against the Swiss franc to start, but EURGBP also found support at important levels. FX Trading focus: G3 horse race the focus as euro, JPY resilience creep into the picture The consolidation in treasury markets last week as risk deleveraging intensified at least briefly changed the narrative in FX, as the JPY enjoyed a massive comeback on Thursday on the safe haven appeal of long bonds finally kicked in. The short squeeze in equities on Friday saw that development reversing sharply, but the potential for JPY strength remains in play if we have seen at least a cycle high in bond yields for now. Both Fed tightening expectations and the longer end of the US yield curve have peaked recently and a follow through in 10-year yields below 2.75% opens up the next layers of resistance down to 2.50%. Today, after a brought bout of new JPY and USD strength overnight, the most interesting independent mover today is the euro, which finally found support against GBP at important levels in EURGBP (ahead of the 0.8450 area and 200-day moving average slightly lower that was a breakout zone on the way up) and against CHF, as EURCHF pulled back higher to threaten the 200-day moving average and the psychologically important 1.0500 level. The readily identifiable drivers for positive Euro outlook today are ECB governing council member Villeroy out warning that an eye must be kept on the euro, but also helping are the reversal of the most recent surge in Nat Gas prices, and for the longer term, Netherlands prime minister making a strong pro-EU comment Chart: EURCHFEURCHF jumped back higher today, likely in part on the ECB’s Villeroy warning on the euro, but the pair needs to punch higher through the psychologically key 1.0500 area and the 200-day moving average to suggest a further revaluation higher is afoot (the 1.0600 looks even more prominent, but we need to recall that the massive cycle low in early 2020 was also near 1.0500). Certainly, the ECB warning does point to limits in the ECB’s willingness to sit on its hands and could prompt the central bank to indicate a willingness to shift into a higher gear in its tightening regime.  There has certainly been a strong regime change in CHF of late, as USDCHF smashed through the range high in late April and has been testing well above parity lately, even with US treasuries in consolidation mode. Source: Saxo Group Data focus this week is on the US housing market indicators and the Apr. Retail Sales report up tomorrow. It took only three months for the US mortgage rate to go from the unprecedented range lows (relative to pre-pandemic levels) as late as the beginning of January to a more than 10-year high by late March, and we have headed another 50 basis points higher since then. This is the largest rate shock by a mile on this very important financial condition. The first places to look for signs that the housing market is rolling over are in the volume of transactions and a slowing in new builds. The NAHB Survey of new home buying interest has rolled over but it is still at extremely high levels (higher than during housing bubble peak of 2005), while New Home Sales peaked in early 2021 and Building Permits are still at cycle highs – a mixed picture but overall, significant loss of momentum. The headline expectations for Retail Sales look strong, but we have to remember the multi-decade highs in inflation here, meaning real growth in retail sales requires very strong numbers indeed. Given very ugly sentiment numbers (see below), would expected downside risks in real retail sales lie ahead. Friday saw a very weak US May preliminary University of Michigan sentiment reading at 63.6 for the “current economic conditions” half of the overall survey, a dramatic new cycle low and far below the 69.6 expected. Only three other readings in the 2008-09 cycle were lower still (record low in November of 2008). The overall index also made new lows for the cycle at 59.1. The longer term inflation expectations in the survey were stable at 3.0%. The last few days have seen new record high prices for gasoline in the US, which could affect the final UMich survey for the month and then inflation expectations bear watching for that survey and next month as an input for Fed policy. Table: FX Board of G10 and CNH trend evolution and strength.The Euro rally in broader terms has eased, but still positive, while interesting to note the divergence of JPY and CHF as the JPY retains some of the strength from the momentum introduced last week. What is gold indicating other than the cross-the-board challenge of recent USD strength? Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.The EURGBP and EURCHF pairs put in a rally today that keeps the positive trend for those two pairs alive – watching for follow through (or not) in coming days for the trend status there. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – US May Empire Manufacturing  1255 – US Fed’s Williams (voter) speaking  1300 – Canada Apr. Existing Home Sales  1415 – UK Bank of England Governor Bailey and other MPC members to speak  0130 – Australia RBA meeting minutes Source: Saxo Bank
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

British Pound (GBP) yawns after Bailey (BoE) warnings | Oanda

Kenny Fisher Kenny Fisher 16.05.2022 23:11
The British pound is trading quietly on Monday, as the currency markets have started the week with a whimper. BoE’s Bailey says dark times ahead BoE Governor Bailey testified before lawmakers earlier today, and his message was a grim one. The BoE has predicted that soaring inflation could top 10%, and Bailey today admitted that “this is a bad situation to be in”.  Bailey said that the Ukraine war could cause a further energy shock and that his concern about the surge in food prices was “apocalyptic”. Bailey gets full credit for not sugar-coating what is a difficult economic situation, but his candidness will not help support the struggling pound, which hasn’t posted a winning week since mid-April. I appreciate Bailey’s honesty, but the BoE has run into a credibility problem with its rate policy in recent months, and it’s questionable whether his message that dark times lie ahead is the way to restore confidence in the central bank. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The economic picture in the US is brighter, but the Fed’s aggressive policy will lead to a slowdown in growth. The big question is can Fed Chair Powell guide the economy to a soft landing and avoid a recession. On Sunday, Goldman Sachs lowered its forecast for US growth to 2.4% in 2022 and 1.6% in 2023, down from 2.6% and 2.2%, respectively. Federal Reserve officials last week reiterated their intention to deliver 0.50% rate increases at the June and July meetings, which will help limit US dollar gains. At the same time, any US data that is worse than expected could lead to calls for a hike of 0.75%, which would be bullish for the US dollar. GBP/USD Technical 1.2199 remains under pressure in support. Below, there is support at 1.2056 GBP/USD faces resistance at 1.2272 and 1.2418   Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
(IXIC) NASDAQ Loses More On Monday, Villeroys Comments Leaves Investors Hopeful For EU Bonds This Summer

(IXIC) NASDAQ Loses More On Monday, Villeroys Comments Leaves Investors Hopeful For EU Bonds This Summer

Rebecca Duthie Rebecca Duthie 16.05.2022 19:31
Summary: Economic news from China affecting the US stock market. The possibility of a recovery of the Euro. NASDAQ falling again After China released their poor economic data in the wake of the covid lockdowns around the country, the NASDAQ experienced poor performance on Monday. The Chinese economic data added to worries of economic slowdown against the simultaneous Federal Reserve’s aggressive monetary policy. Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM This declining NASDAQ on Monday follows the week-long decline experienced by the main indexes. In addition, investors are concerned that the aggressive Fed continuously tightening monetary policy may tip the US economy into a recession, also affecting the NASDAQ index. NASDAQ Price Chart EUR/USD Historically, the month of May is usually a good month for the value of the US Dollar. In the past it has been normal for European currencies to weaken during May. On Monday European Central Bank (ECB) representative Villeroy commented on concerns regarding the weakening Euro and the adverse effects it could have on reaching inflation targets. This comment sparked investor interest as it indicates the possibility of a busy summer for the ECB regarding treasury yields. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Sources: finance.yahoo.com
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

Will Petrol Prices Scare Drivers Again!? Crude Oil Price Reaches Really High Levels! US Dollar (USD) To Slowdown Its Skyrocketing? | Saxo Bank

Saxo Bank Saxo Bank 17.05.2022 11:09
Summary:  Market sentiment is mostly stable after a rare, uneventful day for global markets. Crude oil has pulled to a new local high as petrol prices in many countries have risen to record highs. The US dollar is on its back foot, helping to spark a sharp gold rally from capitulation lows after the precious metal had broken down through all major support levels. The mood in Asia brightened overnight on hopes China is set to ease its clampdown on the tech companies.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - S&P 500 futures closed just above the 4,000 level yesterday as US equities failed to extend their gains from Friday’s session. Tesla shares fell 6% as bubble stocks and crypto related companies fell almost 5% suggesting weakness in technology stocks continues. While the Empire State manufacturing PMI figures yesterday were from a little region of the US, they surprised significantly to the downside hitting levels typically consistent with low economic activity or even a mild contraction. S&P 500 futures are pushing higher trading around the 4,024 level with yesterday’s high at 4,043. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) rallied 2% and 1% respectively on prospect of relaxation of Covid restrictions in China.  JPMorgan’s 180-degree reversal to turn overweight in Chinese internet stocks also help the market sentiment. Alibaba (09988), Tencent (00700), Meituan (03690) and JD.COM (09618) gained about 5% to 6%. Auto makers, batteries and semiconductors surged on the prospect of normalization of supply chain from lockdown. Great Wall Motor (02333) rose over 10%. Ganfeng (01772) rose 6.7%. Hua Hong Semiconductor (01347) gained 6%.  Stoxx 50 (EU50.I) - European equities continue to trade at levels lower than a year ago as weakness is still widespread due to the war in Ukraine with BOE chief Bailey warning yesterday of the extreme risks related to galloping food prices and security of supply. Stoxx 50 futures are trading just below the 3,700 level this morning with the 50-day moving average at 3,732 being the key resistance level to watch on the upside. USD pairs – the US dollar weakened rather sharply yesterday as risk sentiment continued to stabilize. Traders should be on the lookout for whether the sell-off could extend sufficiently to trigger a tactical reversal in the USD bull trend. Levels worth watching include the 1.0500 resistance area in EURUSD, 0.7050-0.7100 resistance zone in AUDUSD, and 1.2400 resistance in GBPUSD. The Apr. Retail Sales report up later today could trigger market volatility. JPY pairs – JPY crosses have bounced hard from the steep sell-off late last week as risk sentiment has stabilized since Friday and, to a lesser degree, as bond yields pulled back higher. The volatility looks excessive relative to coincident developments. USDJPY will watch US treasury yields over the US data today with resistance around 130.00, while a break down through the important 128.00-127.50 area and consolidation back toward 125.00 likely needing a significant consolidation lower in US treasury yields. AUDJPY and GBPJPY have been particularly volatile JPY pairs since a one-off meltdown last Thursday that has now largely been erased. Gold (XAUUSD) trades higher supported by a softer dollar, higher oil prices and tailwind from silver (XAGUSD), as the industrial metal sector receives a boost from the prospect of easing lockdowns in China. The recent loss of momentum which helped attract fresh tactical short sellers was driven by the relentless rise of the dollar and the markets belief in the FOMC’s ability to bring down inflation without hurting growth. With the latter increasingly seeing downgrades, the risk of recession has not gone away, and it raises the question of whether real yields may pause following its March to May near 1.5% jump. Further weakness below 0.09% may signal a period of consolidation in US ten-year yields. Gold needs to break above its 200-day moving average at $1838 to force a further improvement in sentiment. Crude oil (OILUKJUL22 & OILUSJUN22) returned to an eight-week high overnight after China signaled it would start unwinding lockdowns in the Shanghai. Also underpinning prices is the continued strength in the price of fuel products, driven by strong demand and restrained refining capacity. Recently led by a record high price of RBOB gasoline future. Global demand has yet to show signs of demand destruction and with Chinese demand starting to recover the risk of higher prices remains, not least considering Europe’s continued efforts to reduce its dependency on Russian oil and gas. HG Copper (COPPERUSJUL22) has bounced back after hitting a seven-month low last week, and as we highlighted in a recent update, the market has been under pressure due to China lockdowns, and with those now starting to ease a bid has returned. If the change in sentiment towards a more favorable outlook takes hold, hedge funds may soon be forced to cover a short position which according to the latest COT report doubled to a two-year high in the week to May 10. The industrial metal sector slumped 25% during since early March as China closed, but with lockdowns now easing, stimulus policies focusing on the property sector and infrastructure will likely support a recovery. What is going on? High yield credit spreads continue to widen, signaling rising stress in corporate debt markets.  One measure of credit spreads, the Bloomberg US Corporate High Yield Average option-adjusted-spread, has widened to above 450 basis to US treasuries, the highest levels since late 2020. Back in late 2018, the spread peaked at 537 basis points just before the Powell Fed pivoted to easing policy. Lockdowns start to ease in Chinese cities. China’s nationwide (excluding Hong Kong) new local cases fell to 1,049 (sharply lower from the April 13 high of 29,317 cases), of which 823 cases from Shanghai and 52 cases from Beijing.  Shanghai reported three consecutive days of zero community (i.e. outside of quarantine) transmission.   The municipality expects to gradually resume public transportation services from May 22.  Starting from today train services and air flights to and from other Chinese cities is gradually resuming services.  The Shanghai government expects that the lockdown will be completely lifted in June.  Chinese tech stocks trade higher on hopes for easing stance from regulators. A symposium hosted by a prominent advisory body today in China has sparked hopes for a revival of tech stocks as executives of prominent companies like Baidu Inc were invited. JP Morgan Chase & Co. analysts yesterday announced upgrades to ratings on major Chinese tech names like Alibaba and Tencent Holdings. Bank of England Governor Bailey fears “apocalyptic” risk from rising food prices. Governor Bailey testified before a parliamentary committee yesterday and said the rise in prices is “a major worry not just for this country but for the developing world.” Bailey bemoaned the series of supply shocks that are driving a cost-of-living crisis for the many UK citizens as the price of food and energy, in particularly have risen sharply, the latter a direct result of the Russian invasion of Ukraine. Bailey also noted a 1.3% fall in the size of the labor market, which also limits economic growth potential. Deputy Governor Ramsden added that “we hear companies telling us that even people on median incomes are overextended.” RBA opening the door for bigger rate hikes. Minutes of the Reserve Bank of Australia's May monetary policy meeting showed that members considered three options, raising the cash rate by 15 basis points, 25 basis points or 40 basis points. The 40bps rate hike was avoided considering that the board meets monthly and would have the opportunity to review the data flowing in to decide on the size of future interest rate hikes. With inflation being seen as a key concern and Q1 inflation hitting 5.1% - the fastest pace in two decades – this likely suggests that there is room for 40bps (or more) of rate hikes in the upcoming meetings. What are we watching next? The European Commission downgraded GDP forecasts for 2022 and 2023. The EU Q1 GDP estimate is out later this morning. Official real GDP growth in both the European Union and the euro area is now forecast at 2.7 % in 2022 and 2.3 % in 2023, down from 4.0 % and 2.8 % (2.7 % in the euro area) in the last forecast released in February 2022. The forecast for 2022 is likely too optimistic. Several countries are facing a very challenging economic environment (stagflation risk in Germany and risk of technical recession in France, for instance). France’s wage negotiations are kicking off. According to a blog article published by the Bank of France last week, wages are likely to increase by 3% this year, on average. From 2014 to 2020, wages barely moved (+1 %). This is still not enough to cope with higher inflation (4.8 % YoY in April). April U.S. retail sales are out today. Expect the positive momentum to remain in place. Several factors are pushing retail sales up: solid auto sales, significant cash savings buffers (built during the pandemic) and rising wages (though they are not keeping pace with the increases in the cost of living). In the short-term, we believe consumer spending will remain robust and the domestic economy will be in a good position. Earnings Watch. As with many earnings release dates for Chinese companies they are postponed and that happened to Meituan yesterday. The Q1 earnings release has been postponed to 23 May. Today’s focus in Europe is Vodafone which could show its qualities as a defensive company during the current declines and then Nibe Industrier which is big on air-to-heat water pumps which are a declared preferred technology by the EU in its quest to become independent of Russian natural gas. In the US session, the focus will be on Walmart, Home Depot, JD.com and Sea Ltd. The two big retailers Walmart and Home Depot will provide great insights into consumer behaviour in their outlook. Today: Engie, Vodafone, Nibe Industrier, Sonova, Walmart, Home Depot, JD.com, Sea Ltd Wednesday: Tencent, Experian, Burberry, Singapore Airlines, Cisco, Lowe’s, Target, Analog Devices, TJX, Synopsys, Copart, Trip.com Thursday: Xiaomi, Generali, National Grid, Applied Materials, Palo Alto Networks, Ross Stores, DiDi Global Economic calendar highlights for today (times GMT) 0900 – Euro zone Q1 GDP forecast 1005 – UK Bank of England’s Cunliffe to speak 1230 – US Apr. Retail Sales 1315 – US Fed’s Harker (non-voter) to speak 1315 – US Apr. Industrial Production and Capacity Utilization 1400 – US May NAHB Housing Market Index 1700 – ECB President Lagarde to speak 1800 – US Fed Chair Powell Interview at event 1830 – US Fed’s Mester (voter) to speak 2030 – API Weekly Report on U.S. oil and fuel inventories 2350 – Japan Q1 GDP estimate 0130 – Australia Q1 Wage Price Index Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Saxo Bank
The Canadian Dollar Gains Momentum as Crude Oil Prices Surge

Chart of the Week : Real Effective Exchange Rates (EUR and USD) | Saxo Bank

Christopher Dembik Christopher Dembik 17.05.2022 21:52
Summary:  In today’s ‘Macro Chartmania’, we focus on the Real Effective Exchange Rate (REER). All the data are collected from Macrobond and updated each week. Click to download this week's full edition of Macro Chartmania composed of more than 100 charts to track the latest macroeconomic and market developments. The below chart shows the Real Effective Exchange Rate (REER) for the euro and the U.S. dollar. This is the weighted average of a country’s currency against a basket of other major currencies. It is used for international comparisons, especially by the International Monetary Fund and the World Bank, for instance. Currently, the U.S. dollar is 27 % too high compared to the euro, based on the REER. The last time the gap was so wide was when the outbreak started in 2020. This is only the beginning, in our view. U.S. dollar net speculative positioning continues to increase at a speedy pace. Several factors are pushing investors to look for the default safe haven : risk of technical recession or stagflation in several developed economies (France, Germany and the United Kingdom, for instance), skyrocketing commodity prices (especially for agricultural goods due to the Ukraine war and the drought in India), equity bear market, lockdowns in China which will push down global GDP growth this year, persistent inflationary pressures (resulting from supply chain disruptions and higher wage compensations, amongst other things) etc. From a technical point of view, the USD is likely to move upward in the short-term. We expect that risk-off waves will push the DXY index well above 105.00. The EUR/USD is likely to remain under pressure too. How long do you think this can go on before something snaps ? My bet : the European Central Bank (ECB) will have no other options but to increase interest rates at the July meeting to bring support to the EUR and close the gap with the U.S. dollar. Timing is everything : the July meeting will take place just one day after the release of the first estimate of the eurozone Q2 GDP. If the Governing Council decides to move forward with a rate hike, this would reduce imported inflation, in theory. The ECB is caught between a rising dollar and a weak euro. This is simply intolerable. Several governing council members, including those considered as the most pragmatic, are now leaning in favor of a rate increase and exiting negative rates by the end of the year (Banque de France’s Villeroy de Galhau, for instance). This will certainly not solve from one day to another inflationary pressures within the eurozone (inflation is partially driven by external forces such as commodity prices). But it will at least reduce the FX-passthrough into inflation which is becoming problematic. Source: Saxo Bank
Week Ahead – Rate hikes keep coming - 12.08.2022

British pound soars on strong jobs data | Oanda

Kenny Fisher Kenny Fisher 17.05.2022 21:47
The British pound continues to rally on Tuesday. GBP/USD is trading at 1.2463 in the European session, up 1.15% on the day. UK employment numbers sparkle The tight UK labor market is getting even tighter, as reflected in the March employment report. The unemployment rate fell to 3.7% (3.8% prior), below the 3.8% forecast and its lowest level since 1974. Employment change jumped by 83 thousand, smashing the estimate of 5 thousand. Wage growth in Q1 was up 7%, but without bonuses, the gain was only 4.2%. This means that inflation is far outstripping wage growth and exacerbating the cost of living crisis for UK households. The UK continues to grapple with a severe shortage of workers, as Covid resulted in some 500 thousand workers leaving their jobs, and many continental European workers left the UK after Brexit. For the first time on record, there are more job vacancies than unemployed persons in the UK. This economic landscape leaves the Bank of England stuck between a rock and a hard place. The central bank must raise rates to contain soaring inflation, but this could tip the economy into a recession if the BoE is unable to guide it to a ‘soft landing’. Governor Bailey didn’t pull any punches on Monday in his testimony before lawmakers, saying that he was extremely concerned about inflation. We’ll get a look at UK inflation on Wednesday, with the markets bracing for a reading of 9.1% in April. I expect the inflation report to be a market-mover for the pound – a stronger than expected release will likely send the pound higher, while a weak release would put strong pressure on the currency. Today’s employment report has raised expectations that the BoE will have to remain aggressive with its rate cycle, which has pushed UK yields and the British pound sharply higher. If the US/UK rate differential continues to narrow, the pound should be able to make up ground against the dollar. . GBP/USD Technical 1.2275 is providing support. Below, there is support at 1.2143 GBP/USD has broken above resistance at 1.2393. Above, there is resistance at 1.2525 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

(JPY) Japanese yen remains directionless. How Is US Dollar (USD) Performing Against Japanese Yen (JPY)? | Oanda

Kenny Fisher Kenny Fisher 17.05.2022 21:13
The Japanese yen has posted slight gains on Tuesday. In the North American session, USD/JPY is trading at 129.32, up 0.17% on the day. The US dollar pummelled the yen in the months of March and April, but the yen has held its own in May. Still, USD/JPY remains at high levels and the 130 line, which has psychological significance, remains vulnerable. If there is a line in the sand for the Japanese government or the BoJ to intervene and prop up the yen, it certainly is not the 130 level, as the dollar broke through this line without a response. The yen is extremely sensitive to the US/Japan rate differential, and with the BoJ demonstrating that it will tenaciously defend its yield curve, the yen is at the mercy of Powell & Co. Japan releases GDP for Q1 on Thursday. The markets are braced for a decline of 0.4%, after a respectable gain of 1.1% in Q4 of 2020. Investors never like to see negative growth, and a lower-than-expected GDP report will put downward pressure on the yen.   US retail sales within expectations Over in the US, retail sales for April came in at 0.9%, just shy of the consensus estimate of 1.0%. Core retail sales rose 1.0%, above the forecast of 0.7% and close to the 1.1% gain in March. The numbers were not spectacular by any stretch, but were respectable, given that consumer confidence has weakened – the UoM Consumer Sentiment index fell to 59.42 in May, its lowest level since October 2011. US households continue to spend, despite a deterioration in consumer confidence. Wages are not keeping up with the cost of living, but consumers appear to be using savings which accumulated during the Covid pandemic. . USD/JPY Technical USD/JPY is testing resistance at 1.2938, followed by resistance at 1.3123 There is support at 1.3000 and 1.2918   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Only Ugly US Data Could Reverse Sentiment | Gilt Yields In UK Were Steady To Lower

(WMT) Walmart Price Dropped Down As The Earnings Turned Out To Be Quite Low. Jerome Powell (FED) Seems To Be Ready To Get His Foot Down Regarding Monetary Policy And Boost US Dollar (USD) Further | Saxo Bank

Saxo Bank Saxo Bank 18.05.2022 09:10
Summary:  Risk sentiment remained strong in the US yesterday, as the major indices closed strongly at a more than one-week high on a day that saw both a strong US Retail Sales report for April and largest US retailer Walmart’s stock punished by the most in a single day since 1987 on a weak profit forecast. Fed Chair Powell said that the Fed won't hesitate to raise rates above neutral if necessary, helping to lift the entire US yield curve and perhaps helping to cool sentiment overnight.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - S&P 500 futures pushed higher yesterday closing the recent short-term selloff cycle that started last Monday but are trading a bit softer this morning around the 4,075 level. US retail sales yesterday showed that the US consumer is still alive and comments from Home Depot’s CEO suggest that the US housing market is still strong despite recent higher mortgage rates with tight supply of homes to last several years. Overall, the dynamics are still the same with tighter financial conditions ahead and hawkish comments yesterday from several Fed members suggest our defensive stance on US equities is correct. Stoxx 50 (EU50.I) - Stoxx 50 futures closed above its 50-day moving average that we highlighted as the key focus point for the market in yesterday’s quick take. This is the first time since 20 April when technology stocks were staging a comeback with risk appetite before everything turned lower again. If Stoxx 50 futures can manage to stay above this moving average, there might be enough energy for a test of the 3,800. European car sales figures are out this morning and they are still weak which might add a bit of negative pressure among carmakers and car parts suppliers. EURUSD – strong risk sentiment and a weaker US dollar clearly go hand in hand, as yesterday’s market action demonstrated, but the euro got an extra boost from ECB governing council member Klaas Knot saying that the ECB shouldn’t exclude 50-basis point hikes from the menu of options. This drove a strong boost in ECB rate expectations, with end-2022 now priced for a +0.45% policy rate, 10 bps higher than the previous day. EURUSD traded up through 1.0500, a bullish reversal as that was a sticking point on the way down. Still, very heavy lifting would be needed to turn the bearish tide, with next resistance at the prior pivot higher near 1.0640, while more like 1.0800-1.0850+ would be needed to suggest a structural reversal. A new sell-off in risk sentiment will test the degree to which the latest hawkish tile from a growing number of ECB members weighs on the EURUSD exchange rate. USDJPY and JPY pairs – watching JPY crosses and USDJPY closely after US treasury yields jumped yesterday, especially at the long end of the curve, to which the JPY is traditionally most sensitive. Japan’s Q1 GDP estimate out overnight was better than anticipated as nominal GDP rose +0.1% and the economy (in real terms) contracted less than expected. In the JPY crosses, we have seen a wild ride on the recent swings in risk sentiment that now have pairs like EURJPY, AUDJPY and GBPJPY back near important retracement levels after steep sell-offs last week. These will likely tilt lower if bond yields stay calm and we see renewed risk aversion. Otherwise, the Bank of Japan will likely only come under fresh pressure to alter its policy if the USDJPY rate jumps to strong new highs and, for example, if global oil prices do likewise, increasing cost-of-living in Japan, etc. Gold (XAUUSD) trades lower after Fed chair Powell said the Fed will keep raising rates until inflation is brought under control. His comments helped lift inflation adjusted US Treasury yields with the 10-year real yield rising to 0.25%. The weaker dollar yesterday also helped boost risk appetite with stocks being the main recipients of these flows. For now, the bears remain in control, especially after the rejection yesterday at $1838, the 200-day moving average on XAUUSD. Silver (XAGUSD) meanwhile enjoyed some tailwind from recovering industrial metals with the XAUXAG falling to 83.90 after hitting a 22-month high of 88.5 last week. Crude oil (OILUKJUL22 & OILUSJUN22) tried but failed to break higher on Tuesday after the tailwind from a potential pickup in Chinese demand, as lockdowns begin to lift, was being offset by hawkish comments on interest rates from Fed chair Powell, and news that the US may ease some economic sanctions on Venezuela, a 2m b/d producer in 2017 reduced to just 0.7m b/d at present. The bid, however, returned late in the day when the API published a bullish inventory report that pointed to a continued and worsening tightness in the US crude and gasoline market after they saw stocks falling by 2.4m barrels and 5.1m barrels, respectively. The EIA will release its official report later Wednesday. Dutch TTF benchmark gas (TTFMM2) remains rangebound within a €85 to €110 range despite the fact Europe's gas inventories are rebuilding at the fastest rate on record as the region's buyers outbid competitors from Asia to acquire as much gas as possible at any price. According to Gas Infrastructure Europe total stocks have since the March low climbed by 202 TWh to 446 TWh, and at this rate will surpass the five-year average within the next few weeks. Asia’s LNG buyers have been less active than normal, driven by a combination of stocks being allowed to run down due to soaring prices and lower Chinese demand as its coronavirus outbreaks and lockdowns take its toll on demand for gas. US Treasuries (TLT, IEF) - sold off yesterday and took the 10-year Treasury benchmark yield sharply back higher toward 3.00% in the wake of strong US Retail Sales data and amidst positive risk sentiment. If the 10-year yield continues higher after yesterday’s 10 basis point jump, it is worth nothing that the recent top of 3.2% was within a few basis points of the 2018 high for the cycle at 3.26%. Meanwhile, the 30-year T-bond yield closed at 3.185, the second-highest daily close for the cycle, with an intraday cycle high of 3.31%. The US Treasury is set to auction 20-year T-notes later today. What is going on? Fed Chair Powell says “won’t hesitate at all” to take Fed Funds rate above neutral after saying that “what we need to see is inflation coming down in a clear and convincing way, and we’re going to keep pushing until we see that.” Powell admitted that taking levels above neutral could bring some pain and a rise in the unemployment rate. End-2022 Fed expectations rose about 10 basis points yesterday and sit at 2.82”, just shy of the 2.88% cycle highs from before the May 4 FOMC meeting, at which Powell discouraged the idea of hiking more than 50 basis points at a time. UK Apr. CPI out this morning in line with expectations. The headline year-on-year reading was 9.0% vs. 9.1% expected and 7.0% in March, while the Core CPI was 6.2% as expected and vs.5.7% in Mar. The month-on-month headline CPI was 2.5% vs. 2.6% expected and 1.1% in March. Walmart, the world’s largest retailer, suffers worst single-day price drop since 1987 as it cut its profit forecast, citing margin pressure concerns due to inflation, and the CEO vowing that “price leadership is especially important right now.” Home Depot gains on strong Q1 and better than expected Q2 outlook. The US home improvement retailer gained yesterday on a surprise Q1 comp sales of +2.2% y/y vs est. -2.4% y/y and saying on the conference call that Q2 was off to a strong start; the company says it is not seeing the consumer holding back and sees tight housing inventory lasting for five years. Japan Q1 GDP contracted less than expected. Japan’s Q1 GDP showed a contraction of 1% q/q sa following a 3.8% expansion in Q4, but it was still better than expected. The omicron wave and supply drags created pressures, but the outlook for Q2 is appears to be improving as the economy reopens and pent-up demand boosts consumer spending. UK unemployment drops to a 50-year low of 3.7%. For the first time since records, job openings (1.3 million) outnumber those out of work. In addition, the number of payrolled employees grew by 121,000 between March and April, to 29.5 million. A lot of people have chosen salaried employment over self-employment due to fear of recession and higher cost of living. Wages continue to move upward. But this is not enough to cope with inflation. Pay, excluding bonuses, rose by 4.2 % between January and March while cost of living was at 7 % in March and is expected to jump to 9 % in April. The situation is becoming unbearable for many households. We believe that the Bank of England will have no other choice but to speed up the interest rate hike cycle before pausing perhaps after the summer. As expected, U.S. April retail sales show the U.S. domestic economy is very resilient. Retail sales were out at 0.9 % versus the expected 1 %. After adjusting for monthly inflation, it was at 0.6 %. This is still very solid. There is no sign of imminent recession in the United States when we look at the U.S. consumer. Peloton sees twice the demand for its $750 bond offering. The struggling health company has seen strong demand for its bonds in a sign that risk appetite is still intact in the high yield debt market in the US. Australian wage growth in Q1 slightly softer than expected. The report showed Australian wages rising only +0.7% QoQ and +2.4% YoY vs. +0.8%/+2.5% expected, respectively and vs. +2.3% YoY in Q4. What are we watching next? Earnings Watch. Today’s focus is Tencent given the latest support from the Chinese government including comments yesterday from the Vice Premier signaling support for platform companies. Consensus is looking for Q1 revenue of CNY 141.1bn up 4% y/y and EPS of CNY 2.77 down 5% y/y. SQM is also reporting today and is one of the world’s leading lithium miners earning 41% of its profits from lithium and 59% from fertilizers and plant nutrients including potassium, and as well as other agricultural sector products. Both lithium and fertilizers are seeing high prices due to tight supply-demand situation. Today: Tencent, Experian, Burberry, Singapore Airlines, Cisco, Lowe’s, Target, Analog Devices, TJX, Synopsys, Copart, Trip.com, SQM Thursday: Xiaomi, Generali, National Grid, Applied Materials, Palo Alto Networks, Ross Stores, DiDi Global Economic calendar highlights for today (times GMT) 0800 – South Africa 1230 – US Apr. Housing Starts and Building Permits 1230 – Canada Apr. CPI 1230 – Canada Apr. Home Price Index 1430 – EIA's Weekly Crude and Fuel Stock Report 2000 – US Fed’ Harker (Non-voter) to speak 2350 – Japan Apr. Trade Balance 0130 – Australia Apr. Employment Data Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Saxo Bank
Risks in the US Banking System: Potential Impacts and Contagion Concerns

How Are USD (US Dollar), (Canadian Dollar) CAD, (Euro) EUR, (British Pound) GBP Doing? | FX Daily: Hold your horses | ING Economics

ING Economics ING Economics 18.05.2022 08:58
The rebound in global equities is fuelling a widespread recovery in G10 pro-cyclical FX against the USD. Still, yesterday's remarks by Jay Powell were a reminder of the very hawkish Fed policy. Ultimately, rate and growth differentials should curb the dollar's weakness against most peers - except for the CAD where today's CPI should endorse more hikes Learn on ING Economics USD: Don't forget the rate and growth factor The rebound in global equities has continued to fuel a recovery in pro-cyclical currencies, and a correction in the safe-haven US dollar and Japanese yen. Overnight, Asian equities were mixed, and the CSI300 failed to follow yesterday’s jump in US-traded Chinese tech stocks following some unusually supportive comments for China’s tech companies from one of Beijing’s top officials, which fuelled speculation of some easing in the current crackdown. Stock index futures suggest a flat open in major Western equity markets today. Clearly, the monetary policy story is playing a secondary role in the market narrative at the moment, but yesterday’s comments by Fed Chair Powell were quite relevant from a signalling perspective, as he firmly reiterated the Fed’s determination to bring inflation sustainably lower, even by hiking beyond the neutral rate if necessary. While the dollar momentum is set to remain weak as long as global assets stay in recovery mode, the notion of aggressive Fed tightening continues to argue against a sustained bearish dollar trend. Incidentally, this week’s moves have likely placed the dollar in a less overbought condition. With this in mind, DXY should find increasing support below the 103.00 area. The US economic calendar includes some housing data today, and Patrick Harker is the only Fed speaker scheduled for remarks. EUR: Upside room starting to shrink EUR/USD has risen in line with other pro-cyclical pairs this week, breaking back above the 1.0500 level and now being at a safe distance from the key 2017-low support of 1.0340, which if breached would probably pave the way for a move towards parity. Today, the eurozone calendar is not busy and only includes the final print of April’s CPI numbers. We’ll also hear from European Central Bank hawk Madis Muller today, although the recent re-pricing higher in ECB rate expectations (markets now fully price in a deposit rate at 1.0% in December) means that the bar for any hawkish surprise is set very high. Our view on the limited downside risk for the dollar beyond the very short term obviously implies that the room for appreciation in EUR/USD should also start to shrink soon. We also believe that markets are pricing in too much tightening by the ECB – though not by the Fed – and expect the theme of growth divergence (exacerbated by the EU-Russia standoff on commodities) to become more relevant into the summer. With this in mind, we suspect that any further rally in EUR/USD may start to lose steam around the 1.0650-1.0700 area, with risks of a return below 1.0500 in the near term being quite material. GBP: Inflation rises, but double digits aren't assured This morning’s inflation report in the UK was broadly in line with consensus expectations, as headline CPI rose to 9.0% (largely due to the increase in the electricity price cap) with the core rate rising to 6.2% year-on-year in April. This means inflation is largely where the Bank of England expects it to be. Still, the BoE projections embed a move to double-digit inflation by the end of the year, a prospect that we are still not convinced will materialise. There are no BoE speakers today. The oversold pound has faced a strong rebound this week, recouping some of its recent sharp losses as global risk appetite improved. While the good GBP momentum may continue as equities find some stability in the coming days, the pound still faces two major downside risks in the coming months: a) a further dovish repricing of BoE rate expectations (the implied rate for end-2022 is still 2.0%); b) Brexit-related risk, as the unilateral suspension by the UK of parts of the Northern Ireland agreement would likely trigger a trade war with the EU. We think cable will mostly trade below the 1.2500 mark during the summer. CAD: Inflation data unlikely to affect BoC policy expectations Inflation data will be released in Canada today, and the market is expecting some signs that the headline rate has peaked (at 6.7% YoY), which would imply a monthly increase of 0.5% in April. Core measures may however continue to inch marginally higher. Barring major surprises in the data today, we suspect that the impact on the Bank of Canada's rate expectations and on the Canadian dollar will be limited. The BoC remains on track to deliver 50bp of rate increases in tandem with the Fed, being able to count on a tight labour market, growing workforce and positive commodity story. In our view, the BoC will ultimately have to deliver more monetary tightening than the Fed in the next year. USD/CAD has broken below 1.2800 and should continue to weaken if we see further signs of stability in global sentiment today. Crucially, the rate and growth differential that may curb EUR/USD don't apply to CAD vs USD given a hawkish BoC and strong growth in Canada, which means that a rally in the loonie should prove more sustainable than the EUR/USD one. We continue to target sub-1.25 levels in USD/CAD by the second half of the year. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Supported Euro Affects EUR/USD, Recovering New Zealand Dollar Duels With US Dollar (NZD/USD), Scared Investors And US 30 Performance | Orbex

Supported Euro Affects EUR/USD, Recovering New Zealand Dollar Duels With US Dollar (NZD/USD), Scared Investors And US 30 Performance | Orbex

Jing Ren Jing Ren 17.05.2022 09:14
EURUSD goes sideways The euro edged higher after an ECB official supported the idea of a stronger currency to combat inflation. The pair is bouncing off December 2017’s lows at 1.0350. The RSI’s oversold situation on both daily and hourly charts led some sellers to cover as a wave of profit-taking could help the euro snap back from this demand zone. The bias remains down unless the bulls lift the first hurdle (1.0530) from the latest sell-off. 1.0640 on the 30-day moving average is a major resistance to clear before a bullish reversal could happen. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM NZDUSD stays under pressure The New Zealand dollar recovers as weak data from China may trigger more policy support. The RSI’s double dip into the oversold territory shows an overextension. The sell-off has become such a crowded one-way trade and the kiwi could use some breathing room. A bullish RSI divergence suggests a slowdown in the downtrend but needs a breakout to confirm buying interest. 0.6380 is a fresh resistance and 0.6450 on the 20-day moving average a major obstacle. A drop below 0.6220 would further extend the kiwi’s losses. US 30 tests resistance The Dow Jones 30 struggles as investors still ponder a recession scenario. A break below the daily support at 32600 has put the bulls on the defensive. Bargain hunting may cause limited rebounds, but the lack of buying momentum means that the mood is still extremely cautious. 32600 has become a resistance and its breach could extend the recovery to 34000, where sell orders could be expected from trend followers. 31250 is the closest support and a breakout may send the index to the psychological level of 30000. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM
Thursday's Bank's of England decision may be record-breaking!

GBP/USD - British Pound Finally Shows Its Potential, But US Dollar Can Be Supported By Fed Shortly. USD/JPY Is Likely To Become A "Boring" Battle, Gold Price (XAUUSD) Looks Like It Can't Get Any Higher | Orbex

Jing Ren Jing Ren 18.05.2022 09:33
GBPUSD tests daily resistance The pound surged after the UK saw a jump in average earnings over the past three months. Solid bullish momentum above 1.2400 has prompted sellers to cover their positions, exacerbating volatility in the process. The daily resistance at 1.2640 coincides with the 30-day moving average and is an important supply zone. Its breach could pave the way for a bullish reversal in the weeks to come. In the meantime, an overbought RSI may cause a pullback as intraday buyers take profit. 1.2310 is the closest support. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM USDJPY enters narrowing consolidation The yen recouped some losses after Japan’s GDP growth beat expectations in Q1. The US dollar is taking a breather after a prolonged rally. The latest retreat has found support at 127.50 over the 30-day moving average. Medium-term sentiment would stay upbeat as long as the price remains above this demand zone. 130.80 from a previously faded rebound is a key resistance and a bullish breakout could resume the rally towards 133.00. 128.70 is the immediate support for the current consolidation. Follow us on Google News! XAUUSD tests critical floor Gold inched higher as the US dollar index pulled back from a two-decade high. The price action has stabilised near January’s lows at 1790. A bullish RSI divergence indicates a loss of bearish momentum in this critical demand area, triggering a buy-the-dip behaviour. Sellers’ profit-taking could drive the precious metal higher. A bounce above 1858 may trigger an even broader short-covering. On the downside, a fall below 1790 would send the price into bearish territory with December’s lows (1750) as the next stop. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM
Podcast: BoJ losing control. Geopolitical risks for Tesla

Fed hawks may not let the equity rally extend! | MarketTalk: What’s up today? | Swissquote

Swissquote Bank Swissquote Bank 18.05.2022 10:58
The US equity markets rallied yesterday after taking over a positive session from the Europeans. However, the US retail sales data didn’t necessarily hint at slowing spending, and Jerome Powell didn’t say things that investors would normally like to hear. Powell’s words didn’t hit the investor appetite immediate, but mixed activity in US futures hint that appetite may not remain as strong in the coming sessions. In the FX, the US dollar eased from two-decade highs. Gold trades around the $1800 mark and crude oil bumps into solid topsellers approaching above the $115pb   The EURUSD rebounded past the 1.05 and Cable traded past 1.24. Yet, prospects of higher US rates, and the positive divergence between the Fed and other central banks should prevent the dollar from falling significantly. Eurozone’s final inflation data is due today, and should confirm a rise to 7.5% in April, an eye-watering number which should keep the European Central Bank (ECB) hawks and the euro bulls alert, and help the single currency consolidate its latest gains against the US dollar. Gold trades around the $1800 mark and crude oil bumps into solid topsellers approaching above the $115pb. On the earnings front, the US retailers reveal mixed earnings but they all agree on one thing: inflation impacts activity. Watch the full episode to find out more! 0:00 Intro 0:22 Market update 2:06 Jerome Powell is decided to bring inflation down! 2:48 High EZ inflation to keep euro bulls alert 3:41 ...but the dollar may not ease much! 4:42 Gold under the pressure on rising rates 5:31 Crude oil bumps into topsellers past $115pb 6:47 US retailers reveal mixed results, but agree that inflation is an issue Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
USD/CAD hits 1.3000 on weak oil price ahead of Fed's Powell Testimony and CPI Data Release | ICM.COM

Canadian dollar eyes CPI | Oanda

Kenny Fisher Kenny Fisher 18.05.2022 15:12
The Canadian dollar has looked sharp, taking advantage of recent US dollar weakness. USD/CAD barrelled past the 1.30 line on Thursday, but the Canadian dollar has rallied and is currently trading at 1.2830. Has Canada’s inflation peaked? Investors are keeping both eyes on Canada’s April inflation report, which will be released later today. On a monthly basis, the markets are expecting a significant drop – headline CPI is expected at 0.5% (1.4% prior) and core CPI is projected at 0.4% (1.0% prior). If the readings are within expectations, we can expect some headlines trumpeting that inflation has peaked. I would argue that it would be premature to declare that inflation is easing based on a single reading. Still, the CPI release could be a market-mover. If inflation is weak, the markets may expect the BoC to be less aggressive in its rate hiking stance and that could send the Canadian dollar lower. Conversely, a stronger than expected CPI would likely send the Canadian currency higher. The BoC raised rates by 0.50% in April, and there is strong pressure to deliver another 0.50% hike at the June 1st meeting, especially if inflation is higher than expected. The US dollar lost ground overnight, even though US Treasury yields moved higher and Fed Chair Powell said rates could rise above the terminal rate (around 3.50%) in order to contain inflation. Former Fed Chair Ben Bernanke weighed in on Fed policy, saying that the central bank waited too long to respond to inflation. Bernanke warned that he expected to see stagflation in the next year or two. Despite the talk of recession and stagflation, the US posted strong numbers on Tuesday, led by retail sales. The headline reading came in at 0.9% and core retail sales at 1.0%, as both beat the estimates. Consumers are in a spending mood, despite a weakening in consumer confidence. If inflation doesn’t show signs of easing in the next few months, consumers might reduce spending, which could dampen economic growth. . USD/CAD Technical USD/CAD is testing resistance at 1.2848. Above, there is resistance at 1.2962 There is support at 1.2787 and 1.2673 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Oanda Podcast: US Jobs Report, SVB Financial Fallout And More

What are investors afraid of? | Conotoxia

Conotoxia Comments Conotoxia Comments 18.05.2022 15:42
As it does every month, Bank of America conducts a survey of fund managers with nearly $900 billion AUM. Its results in the May edition seem very interesting, indicating the risks and actions of institutional investors. According to the survey, investors appear to be hoarding cash as the outlook for global economic growth falls to an all-time low and fears of stagflation increase. Cash holdings among investors have reached their highest level since September 2001, according to the report. A survey this month of investors managing $872 billion also found that hawkish central banks are seen as the biggest risk to financial markets. A global recession came in second, and concerns about stagflation rose to their highest level since 2008. The findings could show an uninspiring outlook for global equities, which are already on track for their longest weekly losing streak since the global financial crisis, as central banks turn off the tap on money at a time of stubbornly high inflation. The BofA report said the stock market may be in a bear market, but the final lows have not yet been reached. More interest rate hikes by the Federal Reserve are still expected, and the market is not yet in full capitulation. The BofA survey also found that technology stocks are under the most pressure since 2006. Overall, investors were most attuned to holding cash, and are least inclined to go for: emerging market stocks, eurozone stocks and bonds at the moment. The report also found that the so-called most crowded trades at the moment are long positions on oil (28%), short positions on U.S. Treasury bonds (25%), long on technology stocks (14%), and long on bitcoin (8%). According to the respondents, the value to which the S&P 500 index would have to fall for the Fed to start refraining from further monetary policy tightening falls at the level of 3529, i.e. about 12% below the current level. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
GBP: Softer Ahead of CPI Risk Event

FX Update: Powell brings back the hike-until-it-breaks narrative. | Saxo Bank

John Hardy John Hardy 18.05.2022 15:57
Summary:  After the odd tapping on the brakes at the May 4 FOMC meeting, when the Fed wanted to take the idea of 75-basis point rates off the table, Fed Chair Powell reminded the market of its mission to ensure that it will not let up on policy tightening until it has achieved a sustained drop in inflation. Elsewhere, the sterling squeeze is fading fast and the status of key USD charts is pivotal. FX Trading focus: Powell puts back on the hawkish hat, GBP squeeze fading fast, USDCAD spotlight Fed Chair Powell reminds us of the Fed’s mission in saying that the Fed “won’t hesitate at all” to take the Fed Funds rate above neutral, and that “what we need to see is inflation coming down in a clear and convincing way, and we’re going to keep pushing until we see that.” Powell admitted that taking levels above neutral could bring some pain and a rise in the unemployment rate. End-2022 Fed expectations rose about 10 basis points yesterday and this morning were at 2.82%, just shy of the 2.88% cycle highs from before the May 4 FOMC meeting, at which Powell discouraged the idea of hiking more than 50 basis points at a time (why?). This only offered the USD a modicum of support overnight as risk sentiment absorbed the news without much fuss. GBP shorts caught in quite the squeeze yesterday, likely aggravated badly by positioning, which is quite heavily bearish in the US futures market and in general. Yesterday I mentioned the very strong payrolls data as a driver, but there was also the news that the UK government may be considering tax cuts, including a lowering of the VAT, as well as cost-of-living support for the most vulnerable citizens. In the first instance, this could eventually help ease inflation levels and thus allow the Bank of England to hike more than previously expected, but the follow-on thinking is that it could also keep demand higher than it would be otherwise and continue to driver extreme external deficits for the UK, eroding the sovereign UK balance sheet and therefore possibly trust in sterling as well. Sterling has surrendered much of yesterday’s gains – watching for a capitulation again in GBPUSD, while the EURGBP has bounced back above the existential 0.8450 area that  was pivotal on the way up. A very choppy chart there. USDCAD and US vs. Canada Housing spotlightThe CAD has received a double dose of support from the recent strong bounce in risk sentiment and crude oil prices pulling into the top of the range and beyond at times recently. But let’s look a bit further ahead at the inevitable gathering storm that is set to hit the housing market in coming months, after yields have lurched sharply higher. The headline is that if an ugly housing slowdown lies ahead, it will hit Canada’s economy with far more force than it will the US economy. Construction itself contributes about 75% more to GDP in Canada than the US (about 7.5% vs. 4.3%), and private balance sheets in Canada are far more levered, with notable local housing bubbles in Toronto and Vancouver making UBS world top ten list (at #2 and #6) of worst housing bubbles in 2021. The Greater Toronto area, by the way, represents over 17% of the Canadian population. I have better data on the US market and can see solidifying signs in leading indicators that the US housing market is set for a slowdown, including yesterday’s worst of the cycle drop in the NAHB for the May data point, which fell 8 points to 69 versus 75 expected and 77 in April. The latest Housing Starts and Building Permits data is up today (for April), although this lags the NAHB historically by about six months in directional terms. US Pending home sales have also rolled over as discussed in today’s Saxo Market Call podcast and are another leading indicator. So, while near term, an additional boost to sentiment and energy prices could see a break-down in USDCAD, the Canadian economy will face disproportionately large end-of-cycle pressures once the recession arrives, so clouds remain over the cycle outlook for the loonie. Chart thoughts below for USDCAD Chart: USDCADThe USDCAD chart has retreated to critical levels for bulls, as a significant punch below 1.2800 makes the chart look a lost cause for the bulls (arguably, the last, last gasp area is just ahead of 1.2700 at the prior pivot lows or even 1.2660 if using the 61.8% retracement and the 200-day moving average, although the reversal back down through 1.2900-50 has already been a disappointment after that level to the upside was broken. An impulsive recovery back above 1.3000 to put the momentum back on track higher. Source: Saxo Group Underwhelming wage price data for Q1 from Australia overnight, which rose a mere 0.7% QoQ and 2.4% YoY, both 0.1% below expectations. This is meant to be the key data that would drive the RBA to accelerate its tightening regime if it provided evidence of a wage price spiral. Alas, the AUD seems more focused on hopes for China lifting Covid restrictions and swings in risk sentiment. The 0.7000-0.7050 zone remains the tactical resistance focus, with bears possibly needing to retreat back to 0.7200-50 if it does not hold. Table: FX Board of G10 and CNH trend evolution and strength.The USD is losing steam in a trending sense, and would need a solid new impulsive move higher soon to avoid a further breakdown in key pairs, and versus the G10 currencies generally. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.USDCAD is on the verge of flipping into a positive territory on the trend readings if it can’t rally soon. Also note the EURGBP rally hanging on by a thread here. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – US Apr. Housing Starts and Building Permits 1230 – Canada Apr. CPI 1230 – Canada Apr. Home Price Index 2000 – US Fed’ Harker (Non-voter) to speak 2350 – Japan Apr. Trade Balance 0130 – Australia Apr. Employment Data Source: Saxo Bank
Steel majors invest in green steel, but change might be driven by contenders

US dollar falls as risk sentiment rises | Oanda

Jeffrey Halley Jeffrey Halley 18.05.2022 16:05
US dollar retreats on higher risk appetite The US dollar weakened overnight despite US yields moving higher and hawkish Fed officials. Like equity markets, currency markets concentrated on positive US data, and a fall in oil prices which lifted risk-seeking sentiment, although I believe this is all part of a bull market correction. The dollar index slumped by 0.85% to 103.30, edging higher to 103.40 in Asia as US index futures fell. Resistance remains at 105.00, and the daily close below 104.00 suggests support at 102.50 could be tested. Failure suggests a deeper correction still. EUR/USD was one of the main beneficiaries of the swing in risk sentiment, jumping 1.15% to 1.0555 before edging lower to 1.0535 in Asia. Having based at 1.0350 on Friday, EUR/USD has rallied through 1.0500 overnight and could test 1.0650 and possibly even the 1.0800 37-year breakout line. I continue to believe that any rally above 1.0700 will be hard to sustain in the medium term. In a similar vein, GBP/USD has traced out a low at 1.2155 last week and leapt 1.40% higher to 1.2490 overnight, where it remains in Asia. The next resistance is at 1.2650; however, like Europe, the United Kingdom’s structural headwinds leave the longer-term picture still bearish. The rise in US yields overnight has left USD/JPY trading sideways at 129.20 in Asia, barely changed over the past few days. If US yields remain at these levels, a deeper correction to 127.00 becomes unlikely. In the bigger picture, USD/JPY remains at the mercy of the US/Japan rate differential. The rally in global sentiment has allowed AUD/USD and NZD/USD to book 0.85% gains once again overnight, rising to 0.7030 and 0.6360 respectively, where they remain in Asia. Any rally to 0.7200 or 0.6500 is likely to see sellers lining up though as both will continue to be buffeted by swings in investor sentiment, especially in China. Likewise, Asian currencies had a good night overnight, with CNY, CNH, KRW, and SGD the standout performers. USD/CNY at 6.8000 and USD/CNH at 6.8500 have proved formidable barriers, and if both USD/Yuans remain below these levels, more Asia FX strength is possible. Lower oil prices will also help, but if US yields continue to track higher from here, then the US dollar correction versus Asia is likely to quickly run out of steam. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

(EUR/USD, EUR/GBP) Market Participants Betting On A More Hawkish ECB, A Dovish BoJ Weighs On The Safe-Haven Currency (USD/JPY) - Good Morning Forex!

Rebecca Duthie Rebecca Duthie 19.05.2022 12:39
Summary: The market sentiment for the EUR/USD currency pair turns mixed. Inflation and economic data weighing on the GBP. BoJ continues to fight rising interest rates. AUD strengthens amidst favourable unemployment data. The market seems to be favouring the Euro for a change The market is signalling mixed market sentiment for this currency pair. The U.S dollar lost ground to the EUR during Thursdays early trading, however, the demand for the safe-haven asset remains steady due to investor risk sentiment still being fragile. Earlier this week the Fed announced they would push interest rates as high as necessary to fight the surging inflation. On Thursday the market is waiting for the minutes from the latest European Central Bank (ECB) meeting to be released, hoping there will be an indication of a tightening in monetary policy. Read next: (EUR/USD) Hopes Of A Hawkish ECB Shows Favour To The Euro, (EUR/GBP) UK CPI Inflation Data Knocks The Pound Sterling - Good Morning Forex!  This begs the question: despite the Fed's already hawkish monetary policy, why is the market not pricing in much for the hawkish Fed, but pricing in a lot for the European Central Bank (ECB) ? EUR/USD Price Chart BoE and ECB expected to raise interest rates The market is reflecting a mixed market sentiment on Thursday. Earlier in the trading week, UK economic data releases weighted on the value of the Pound Sterling, global investor sentiment and the current equity bear market are both aspects that could mean further losses for the GBP. Earlier on in the trading week, the GBP gained on both the Euro and the US Dollar, but a midweek sentiment turn around has bought the Pound Sterling back down. Both the ECB and the Bank of England (BOE) are expected to raise interest rates. EUR/GBP Price Chart Follow FXMAG.COM on Google News! USD continues to beat the JPY The Japanese yen seems to be an underperformer in the past week, perhaps this is due to the rising U.S yields by the Fed amidst the Bank of Japan (BoJ) fighting against tightening their monetary policy. Should the market face a big risk-off sentiment, the JPY might see some gains, however in this currency pair, it may not be noticeable due to the USD also being seen as a safe-haven currency. USD/JPY Price Chart AUD regains some investor confidence Market sentiment for this currency pair is bullish. Investor confidence has increased in the Australian Dollar after the unemployment rate for April came in at 3.9% which not only exceeded market expectations but is also the lowest rate since the 1970s. AUD/JPY Price Chart Read next: (EUR/USD, EUR/GBP) Euro Strengthens In The Wake Of Villeroys Comments On Monday, (AUD/JPY), (GBP/USD) Pound Sterling Showing Strength - Good Morning Forex!   Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com
Sticky US Inflation Expected to Maintain Dollar Strength Ahead of FOMC Meeting

FX Update: Is the JPY finally ready to roar? | Saxo Bank

Saxo Bank Saxo Bank 19.05.2022 15:33
Summary:  The backdrop has increasingly weighed in support of the JPY as safe haven seeking in sovereign bonds has eroded the negative implications of the Bank of Japan’s yield-curve-control policy. And speculative positioning is very short the Japanese currency. Last week’s brief blow-up in the JPY crosses may have been a trial balloon for a far larger squeeze on JPY shorts. FX Trading focus: JPY focus on supportive backdrop The market action yesterday and overnight was at times rather out of synch with recent cross-market correlations. Yes, the worst day in two years for US stocks did see the US dollar rallying in most places, but only modestly so relative to the negative energy in risk sentiment that has been the "norm" in recent months. One possibly source of this was the big mark-down in USDJPY intraday yesterday, which shows that attention may be shifting more towards the old safe-haven role of the Japanese yen on the latter’s traditional sensitivity to the strength in safe-haven bonds, which picked up a powerful bid yesterday, flattening the US yield curve and suggesting a weaker economic growth/inflation outlook. Since much of the early USD buying in the aggravated rally in the greenback since late February was in USDJPY due to the rise in US long treasury yields, any further fall in these yields will likely continue to support the JPY the most among major currencies. A potential “after-burner” for the risk of a tremendous bout of JPY volatility here is market positioning, with the US futures speculative positioning at historically stretched levels.  That’s it for today’s update – JPY volatility is likely to dominate for the coming sessions if it is properly unleashed. Chart: USDJPYUSDJPY poking at the important local 127.50 support and other JPY crosses on the verge of (EURJPY and AUDJPY) or already having broken down (GBPJPY and NZDJPY) through some key support levels. The next obvious focus here could be the 125.00 round-level area, but when the yen works up a head of steam, it has a tendency to overshoot – so potential to 120.00 can’t be ruled out if equity markets are suffering a real liquidity event and safe-haven seeking in US treasuries sends the US 10-year yield benchmark, for example, back to 2.50%. Source: Saxo Group Table: FX Board of G10 and CNH trend evolution and strength.Holding breath here for JPY volatility potential – and with USDJPY under so much pressure, it could block the USD from serving as a safe haven in the crosses. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Apropos JPY crosses – USDJPY is on the verge of crossing over to negative finally if it closes near or below the 127.50 trigger level. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1130 – ECB publishes minutes of April ECB meeting 1230 – ECB’s Guindos to speak 1230 – US May Philadelphia Fed survey 1230 – US Weekly Initial Jobless Claims 1400 – US Apr. Existing Home Sales 1500 – Sweden Riksbank’s Floden to speak Source: Saxo Bank
Romanian GDP Slows Beyond Expectations: Revised Forecast and Economic Outlook

Tough day for retailers and Tesla in the US, and Tencent broadens the rout in Asia | Saxo Bank

Saxo Bank Saxo Bank 19.05.2022 08:15
Summary:  Asian markets joined the overnight selloff in US equities although some reversals were seen subsequently. Risk sentiment saw a mild recovery but the outlook for consumer discretionary remains murky amid rising cost pressures and inventory building. Australia’s unemployment rate dipped to record lows and watch for Japan’s CPI and China’s loan prime rates due on Friday. What’s happening in markets? Wall Street stocks hit new lows as the market anticipates earnings declines and further slowdowns in consumer spending, amid tighter financial conditions. This is what’s dragging tech and consumer spending stocks (ex-reopening stocks) to new lows. The S&P500 fell 4% on Wednesday, eroding most of its recent gains. The Nasdaq fell 4.7%, taking the top 100 stock index to its lowest level since November 2020. We think the market is not yet at capitulation point - further selling is ahead. The extra risk now is that volatility, is causing boutique investment managers to be on the brink of margin collapse, which could add to further selling pressure in markets and stocks that are down heavily. Asian equity markets join the global sell-off. Japan’s Nikkei (NI225.I) was down over 2.5% led by tech such as Tokyo Electron (8035) and consumer discretionary with Fast Retailing (9983) down over 3%. Singapore’s STI index (ES3) also dropped close to 1% on Thursday morning after Singapore Airlines reported earnings with a narrower loss and an upbeat outlook. Hong Kong and mainland China equity markets gapped down but losses narrowed at mid-day.  Following overnight US equity market’s worst sell-off since June 2020, Hang Seng Index (HSI.I) slumped as much as 3.5% in the morning. Tencent’s (00700) over 8% plunge in share price after reporting Q1 results below market expectations dampened sentiment further. Tencent’s Q1 revenues and EPS coming at flat and -23% YoY respectively and both were 4% below consensus estimates. Online games revenues (PC + mobile) declined 2% YoY and online advertising revenue dropped 18% YoY. Investors were also troubled the management’s remarks saying support initiatives from the Chinese Government to the tech industry takes time and will not benefit the Company much in near-term.  By mid-day, Tencent is down 6.6% and Hang Seng Tech Index (HSTECH.I) is down 3%.  Hang Seng Index and CSI300 (00300.I) fell 2% and 0.3% respectively. Tesla (TSLA) shares slide 7%, more selling to come as S&P500 boots it out of ESG Index, at a time when market anticipates earnings growth to fall and costs to rise. S&P explained why it kicked Tesla out of its ESG index saying Tesla’s “lack of a low-carbon strategy” and “codes of business conduct,” along with racism and poor working conditions reported at Tesla’s factory in Fremont, California, affected the score. Separately, new research suggests battery cell prices will surge 22% from 2023 to 2026 amid the scarcity in raw materials needed to make EV batteries. This is why we continue to advocate that clients would be better served in commodity companies who are benefiting from price inflation, rather than commodity consumers (EV makers). Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM Cisco (CSCO) – a proxy for business IT spending, guides for weaker earnings. Cisco is of the largest IT and networking businesses in the world (catering to a 1/3 the world’s market). It reported its Euro and Asian sales fell 6%. But the real story is its weak guidance. Cisco CEO guided for a drop in revenue ahead, expecting a 1-5% revenue decline for Q4, at a time when the market expected revenue growth of over 5%. This reflects that businesses are not willing to open up their pockets, at a time when inflation (wages, energy) is rising and interest rates are going higher. Consumer spending retail proxies hugely disappoint - as their profit outlooks dim. Target (TGT) shares fell 25% (biggest drop since Black Monday). Walmart (WMT) fell almost 8% as both retailers cut their forecasts for profit amid a slowdown in home-good sales at a time when they’re guiding for rising costs pressures (fuel, freight costs, rising wages). Target and Walmart make $600 billion in combined revenue, that’s double the size of the biggest company on the ASX. So given that both the retail giants are proxies for consumer spending, their demise could translate to other companies. What to consider? US retailer earnings signal shifting consumer spending patterns. We have seen a number of weak retailer/ecommerce earnings from the US now starting with Amazon (AMZN) to Walmart (WMT) to Target (TGT) reporting a 52% decline in profits overnight. While US retail sales show that the consumer is still resilient, there is certainly a shift in spending patterns away from home appliances that were the most sought after during the pandemic to reopening and travel related items such as luggage and services. But it is also important to note that inventory levels are building up, which may mean more write downs or a mark down in prices to sell off. Higher costs are also weighing and only likely to get worse in the second quarter. This means retailers will continue to face the brunt for now. Offshore investors were net seller in onshore RMB bonds for the 3rd consecutive month.  In April, foreign investors sold RMB88 billion (USD13.3bn equivalent) worth of onshore RMB bonds.  The amount of selling moderated somewhat from March’s RMB98 billion. Net inflow of foreign currency from China’s trade settlement declined. In April, net trade settlement was only 42% of China’s trade surplus of that month, below the 2021 average of 58%.  The key driver for the low net inflows seems coming from higher than usual demand from importers to buy foreign currencies, staying at escalated level of 65.1% in April versus 2021 average of 55.8%.  Exporters repatriated 60.8% of the total goods exports in April.  It was down from March’s 65.8% but still well above 2021 average of 54.6%.  Dollar trimmed gains in Asia. The USD moved higher as risk sentiment was eroded overnight, but trimmed gains in Asia. GBPUSD rose back towards 1.2400 while EURUSD was seen back above 1.0500. UK inflation shot up to 9% y/y in April from 7% previously, continuing to complicate the task for the BOE. Yen weakened in Asia, but the cap in 10-year yields as equities lose momentum is suggesting yen weakness has mostly run its course, at least on the crosses. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM AUDUSD rises 0.9%, off its low as Australian unemployment fell to a new historical monthly low (3.9%). This is the lowest reading for the survey. Unemployment was lower in 1974 when survey was quarterly. However, the AUD rose modestly off low, up 0.9% today to 0.7020, as the strong employment data gives the RBA more ammunition to raise rates - given Australia’s economy strengthened. China’s reopening theme also adds to upside for the AUD. However, longer term, as the Fed raises rates, this strengthens the USD, will likely cut the AUD’s grass. Japan imports swell on energy and weak yen. April trade deficit was seen at 839 billion yen as exports grew 12.5% y/y but imports rising 28% on higher energy prices and the drop in yen to two decade lows. Following a negative GDP print for Q1 reported yesterday, the impeding trade position is adding to Q2 risks and pent up demand remains the key to provide an offset in order to avoid a technical recession. Rising inflationary environment may however weigh on consumer spending and Japan’s April CPI will be on watch tomorrow. Consensus expects a rise to 2.5% y/y from 1.2% in March with core CPI also turning positive at 0.7% from -0.7% previously. Potential trading ideas to consider? Short CNHJPY trade that we put on last month may still have room to go. The larger foreign currency outflows due to offshore investors’ bond selling and smaller inflow of foreign currency from trade settlement tend to give add to the depreciating pressure the renminbi. At the same time, the Japanese Yen is benefiting from a safe haven bid in the midst of global equity sell-offs.  Both Japanese investors and overseas leveraged investors who fund their positions in Yen tend to repatriate and need to buy Yen in the time of turmoil.  In addition, the prospect of a pickup in inflation in Japan may trigger traders to cover their bearish positions in the Japanese Yen.  Asian retailers likely to see pressure from global counterparts. Consumer discretionary sector was leading the decline in the S&P overnight, and the rout is likely to spread to Asia. Watching key Asian retailer shares like Japan’s Fast Retailing (9983), Hong Kong’s Sun Art Retail (6808) and Australia’s Harvey Norman (HVN). With liquidity conditions only starting to tighten, there is likely room for the equity rout to run further, but cash is not a viable asset for long term investors. We remain overweight commodities and reopening.   Key economic releases this week: Friday: Japan nationwide CPI, China loan prime rates   Key earnings release this week: Thursday: Xiaomi, Generali, National Grid, Applied Materials, Palo Alto Networks, Ross Stores, DiDi Global   For a global look at markets – tune into our Podcast. 
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

FX Daily: Activity currencies remain under pressure | ING Economics

ING Economics ING Economics 19.05.2022 09:56
Wednesday was another bad day for equities where the MSCI World equity index fell another 3%. The fact that expectations for Fed policy tightening remain intact is a sign that investors appreciate that tackling inflation is now the priority for central banks. This continues to favour the anti-cyclical dollar, but also now the Japanese yen Source: Shutterstock USD: The cavalry ain't coming Yesterday saw the S&P 500 sell off 4%, led by consumer stocks. The fact that some of the biggest main street names are under pressure on the back of profit warnings is a reminder that the squeeze on real incomes is starting to hit home. Over prior decades, decades associated with very dovish Fed policy, one might have expected this magnitude of an equity market sell-off to put a dent in Fed tightening expectations - or expectations that the Fed would come to the equity market's rescue. In fact, the Fed funds futures strip barely budged yesterday. We read this as a sign that investors now appreciate that tackling inflation is the number one priority of the Fed - and the Fed will not easily be blown off course. At the same time, we are still only hearing concerns from Chinese policymakers about the slowdown, rather than any promise of major fiscal support. And one could argue what would be the use of major fiscal support if workers and residents remain trapped in Covid lockdowns? For that reason, it seems very difficult to argue that renminbi depreciation has run its course and we cannot rule out USD/CNY pushing through the 6.80 area over coming weeks and months. This all leaves the anti-cyclical dollar quite well supported. We had made the case on Tuesday for a bounce in the oversold dollar. That bounce did not last long and again it is hard to rule out the dollar edging back to recent highs. Not until the Fed blinks on policy tightening or the rest of the world's growth prospects start to look attractive - neither of which seem likely over coming months - will the dollar put in an important top.  For today, the US calendar is light with just initial claims and existing home sales for April. Housing looks to be one of the most vulnerable sectors of the US economy, but its slowdown (and its effect on dragging core inflation lower) looks a story for much later in the year. DXY has seen a modest bull market correction this week, but can probably edge higher to 104.10 today. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM EUR: ECB will have to talk a good game Providing the euro a little support this week has been even more hawkish commentary from the European Central Bank. We had felt that the market would struggle to price in more than 75bp of ECB tightening this year, but central bank hawks such as Klaas Knot have introduced the idea of the ECB moving in 50bp increments. This has helped narrow the two-year German Schatz-US Treasury spread to 225bp from recent wides at 250bp and provided some modest support for the dollar. This can be seen as verbal intervention from the ECB to support the euro. An important policy paper from the ECB a few years ago concluded that two-year rate differentials were the most significant driver of EUR/USD and the ECB's best hope of stablising EUR/USD may indeed be to talk up prospects of the forthcoming tightening cycle. For today, look out for the minutes of the April ECB meeting, where again it might choose to emphasise the more hawkish elements. EUR/USD has had its oversold bounce to 1.0550 and with the global environment remaining challenged, EUR/USD could today drift back through 1.0450/60 to 1.0400. Elsewhere, we note some short-term similarities between both the Swiss franc and the Czech koruna. The central banks behind both currencies would prefer stronger currencies to play their role in delivering stable/tighter monetary conditions. We conclude that EUR/CHF upside may be more limited - and the downside more open - than most believe. While for EUR/CZK, the Czech National Bank (CNB) will want EUR/CZK to continue trading under 25.00 and perhaps lower still - until at least 1 July when a new CNB governor takes over.  GBP: One month realised volatility at 8%! EUR/GBP one month realised volatility is back at 8% - which is very high for a European FX pair. Expect this volatility to continue given much uncertainty about the policy path for both the Bank of England (BoE) and the ECB. Here, we happen to think that tightening cycles in both are over-priced and one would probably think that the BoE cycle gets repriced lower first. Expect EUR/GBP to continue to trade in a very wide 0.8400-0.8600 range, while cable looks more one-way traffic. We have seen the bear market bounce to 1.2500 this week and the difficult external environment would favour a break of 1.2330 support in a move back to the 1.22 lows.  Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM ZAR: SARB expected to hike 50bp today The South African Reserve Bank (SARB) is widely expected to hike 50bp to 4.75% today. The policy rate is quite low by emerging market standards, but that is because core inflation is only running at 3.9% year-on-year. A 50bp hike looks unlikely to generate much support to the rand, which is currently being re-priced off of the Chinese growth cycle. With $70bn of portfolio capital having left emerging markets since Russia invaded Ukraine - and with South Africa having large weights in emerging market debt and equity benchmarks - we expect the rand to stay under pressure for the time being.  16.35 is big resistance for USD/ZAR, above which 17.00 beckons for later in the year. Rising US real yields and the China slowdown continue to make the bear case for emerging markets.   Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Sunrun's Path to Recovery: Analysts Place Bets on High Growth Amidst Renewable Energy Challenges

Nasdaq And S&P 500 Have Fallen, USD Is Still Really Strong. What About Asia? | Asia Morning Bites | ING Economics

ING Economics ING Economics 19.05.2022 08:59
Plunging US equities set the tone for Asian markets  Source: shutterstock Macro outlook Global: Yesterday was a horrible session for US stocks. Selling pressure was evident from the starting bell, and equity futures today are signalling no sign of buying the dip either. The S&P500 fell more than 4% and the NASDAQ was down 4.73%. The S&P now stands just one bad day away from an official bear market. The NASDAQ is already there. Benchmark FX markets reflected the risk-off tone and reversed yesterday’s moves and more. The EURUSD is now back down to 1.0474, and this has helped pull the AUD back below 70 cents. The JPY has begun to appreciate again and is now at 128.24 whilst the KRW also made gains on a day when most Asian FX was looking fairly weak. US Treasuries too were benefiting from the fall in risk sentiment. Yields on the 2Y US Treasury note fell 3.1bp to 2.669%, while those on the 10Y bond fell 10.2bp to take the yield to 2.884%. There’s not much on the macro calendar today. US existing home sales may just be worth a second or two’s glance. With growing talk of recession vs soft-landing, the interest-sensitive housing sectors may provide a sneak preview of any turn in the economic cycle. Australia: Australia releases its April employment report shortly, and the market is looking for employment growth of about 30,000 and a further slight fall in the unemployment rate to 3.9% from 4.0%. We don’t have any issues with these assumptions. A 3.9% or lower unemployment rate would be a new record low, but we don’t think it particularly changes the story for the RBA, now that they have accepted that inflation is sustainably above their target. Likewise, yesterday’s slightly lower than expected wage price index is not particularly binding right now. All that a very strong labour report may do is raise the prospects of greater than 25bp hikes at forthcoming meetings. China: The Shanghai lockdown is unwinding gradually. The government expects the end of the lockdown will be in early June. For now, Beijing and Tianjin both have districts under lockdown. We expect more districts will be locked down as more Covid clusters are found. The port of Tianjin is important for hard commodity trade. Though we have not seen disruption in Tianjin’s port yet, this could become an issue if stricter social distancing measures are applied. Domestic prices of commodities could increase in this case. Japan: The trade deficit widened to -JPY839bn in April (vs -JPY412.4bn in March), recording the 9th consecutive month of deficit. Exports grew 12.5% YoY while imports rose by 28.2%. Import growth remained rapid, but probably peaked last November (+ 43.8%). Meanwhile, March core machinery orders rebounded by 7.1%MoM (vs 3.9% market consensus), partially offsetting the previous month’s loss of -9.8%.  Yesterday’s 1Q22 GDP was better than expected. But this means that the 2Q rebound will probably be weaker than we previously thought. Pent-up demand-driven consumer spending will lead growth in 2Q, but higher inflation will dampen household purchasing power and moderate any bounce. Today’s data suggest that trade will remain the main drag on 2Q growth, while investment spending will decelerate further. We are planning to revise down 2Q22 GDP soon. Philippines: Bangko Sentral ng Pilipinas (BSP) meets to decide on policy today.  Governor, Diokno, who previously vowed to keep rates untouched through to the second half of the year now indicates that the space to keep accommodation has “narrowed significantly”.  We expect BSP to hike policy rates by 25 bps and possibly hint at additional tightening at the 23 June meeting.  What to look out for: US initial jobless claims Japan trade balance (19 May) Australia unemployment (19 May) Philippines BSP policy meeting (19 May) Singapore 1Q GDP final (19 May) US initial jobless claims (19 May) Japan CPI inflation (20 May) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Key Support Levels in Forex Pairs: EURUSD, GBPUSD, and EURGBP

Australia: unemployment rate falls to record low | ING Economics

ING Economics ING Economics 19.05.2022 09:03
Labour market indicators suggest that 25bp rate hikes may not be enough to bring inflation swiftly back within the RBA's target range Reserve Bank of Australia Governor Philip Lowe Source: Shutterstock 3.9% Unemployment rate Record low As expected Unemployment rate falls to record low Today's April labour market data showed a smaller than expected gain in total employment of only 4000. But as this was the net result of what looks like a huge transformation of part-time jobs to full-time jobs, the impact on consumer demand will be far more than this headline employment figure suggests. Full-time employment rose by 92,400, just exceeding the 88,400 decline in part-time jobs. But in addition to longer hours, full-time jobs tend to be better paid, and also offer more perks and job security, all of which are likely to encourage greater spending.  Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM Perhaps even more importantly, the unemployment rate fell to 3.9% from 4.0%. This is a new record low, and suggests that the labour market is very, very tight. Wages, inflation and the unemployment rate Source: CEIC, ING Labour data more of a marginal consideration now Before the Reserve Bank of Australia (RBA) responded to the recent surge in inflation with a 25bp increase in the cash rate target, labour market data was scrutinized for signs that the central bank's dovish resolve would be challenged. Now that rates have already been raised, that is no longer the case. But labour market data is not irrelevant. Today's drop in the unemployment rate to a new record low, even alongside the relatively more subdued 1Q wage data released yesterday, raises questions about the pace of future hikes.  The question worth pondering is this: "Does it make sense to raise rates in 25bp increments when the inflation rate is so far above target, and so far above the level of policy rates? Or does it make more sense to front-run the early tightening?" Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM A number of other central banks in the Asia Pacific region are having the same internal conversation right now, having emerged from a similar period of dovishness assuming that most of the inflation spike would be transitory, or largely bypass their economies for various reasons. The consensus of these other central banks seems to be swinging behind a more rapid pace of withdrawal of accommodation, at least for a while. Rate hikes from the RBA in excess of 25bp in the near future can't be ruled out either.   Read this article on THINK TagsRBA rate policy Australian wages Australian unemployment rate Australian inflation AUDUSD Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Follow FXMAG.COM on Google News
The Complex Factors Influencing Gold Prices in 2023: From Interest Rates to China's Impact

Stronger Euro (EUR)? Rates Spark: Four ECB hikes and a bit more | ING Economics

ING Economics ING Economics 19.05.2022 09:08
Curves pivoting flatter fits a narrative further shifting towards growth concerns. As European Central Bank pricing gets more hawkish there is more than just the possibility of 50bp moves that could explain how 100bp in four meetings after June could come to pass, even if that is not our view    USD and EUR curves pivoting flatter around the belly of the curve amid weaker risk assets is a pattern that fits the narrative of market concerns having shifted toward rising risks to the growth outlook as central banks tighten policies amid high inflation. Continuing to lean more hawkish on the hawk-dove seesaw In EUR, markets have further ratcheted up their ECB rate hike expectations. By the end of the year they expect an overnight rate more than 100bp higher from now. If one assumes that the ECB will use the June meeting to prepare the grounds for rate hikes by announcing also the end of all net asset purchases, then this would imply an expectation of 25bp hikes at each of the other four remaining policy setting meetings in 2022 – and a bit more. 25bp hikes at the four ECB meetings starting with July – and a bit more Does that mean the possibility of a 50bp hike by the ECB is catching on?  After all it had been floated by the ECB’s Klaas Knot earlier this week, but his remarks may have been more about signaling a commitment to act forcefully. A sources article published yesterday outlined that a majority of the Council supported at least two 25bp hikes this year, but downplayed the notion of a 50bp move. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM Curve flattening fits a pattern of growth concerns and tightening central banks Source: Refinitiv, ING Other factors driving aggressive market pricing The aggressive market pricing will to a degree also reflect a higher risk premium amid volatile times, but we would also not exclude some uncertainty being reflected about the evolution of excess reserves in the banking system and how the ECB proceeds with the tiered deposit rate. The expectation is still that larger early repayments of banks’ targeted longer-term refinancing operations borrowings loom in the months ahead, although higher comparable market rates may have now made it more compelling for banks to hold on to the funds beyond June until the September repayment date. On the forwards strip for the ECB meeting periods markets see c.4bp higher overnight rates for the upcoming June meeting, though it may also include outside chances for an immediate ECB rate hike. It is conspicuous that the market prices the largest increase for September, a rise of noticeably more than 30bp while it is below 25bp for the other meetings this year save July. More than 100bp from the ECB in the four 2022 meetings after June Source: Refinitiv, ING   For September the market prices an increase of more than 30bp Perhaps the ECB minutes to be released today will shed more light on the ECB’s internal deliberations on what needs to be done in the face of rising inflation and the balance of risks tilting less favourably. But given how far official communication has already evolved since the April meeting to converge with the market view, the minutes should look dovish, not to say outdated. It was a meeting that still signaled a very gradual move. To be sure, our own expectation is also that aggressive market pricing will likely not be realised with our economists looking for three ECB hikes by the turn of the year. Today's events and market view In the Eurozone the ECB minutes of the 14 April meeting will take the spotlight amid an otherwise quiet data calendar. The minutes have seldomly been market moving, and they should appear especially outdated this time around as ECB communication has evolved quickly since then. We will also hear from the ECB's de Guindos and de Cos today. The other market focus will be today’s busy supply slate. France sells up to €13bn across shorter dated bond lines, including a new 6Y, and linkers. Spain reopens four bond lines including its 20Y green bond for up to €6bn in total.   The US sees publication of initial jobless claims and existing home sales. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Australian CPI Expected to Rise to 5.2%: Impact on AUD/USD and RBA's Rate Hike Dilemma

Rates Spark: The rates upside remains real | ING Economics

ING Economics ING Economics 20.05.2022 08:41
Completing the shift of the market narrative towards growth concerns, bonds are reasserting their role as safe havens. The European Central Bank minutes confirmed the Council's desire to act faster, also with an eye on still ultra low real yields  Risks remain to the upside for rates Bonds' negative correlations with risk assets consolidates amid growth concerns As markets continue to trade in a risk-off fashion, bonds have managed to reassert their role as safe havens. The pattern of bond curves consistently rallying flatter as risk assets sell off has only reestablished itself over the past few sessions. In a way this dynamic completes the transition of the market narrative toward growth concerns, away from being dominated by central banks' prospective tightening lifting market rates out the entire curves. bonds have managed to reassert their role as safe havens This does not mean that data releases couldn't shift the focus again. Next week will offer some opportunities with the release of the flash PMI surveys for instance. And if the Fed deems inflation (expectations) are not coming down fast enough, it may well use the FOMC minutes next week to signal more hawkish moves. The 75bp-hike discussion is not entirely off the table. Unlike the ECB, the Fed has used its meeting minutes as a more active communications tool, such as outlining its plans for the balance sheet run-off. We will also watch the PCE deflator, the Fed's preferred inflation gauge at the end of next week. Risk-off drives curves flatter Source: Refinitiv, ING ECB minutes, outdated but also highlighting the upside in rates The ECB minutes have been overtaken by the quick evolution of ECB communication since the last meeting. The indication now is that a majority of the Council is backing ending net asset purchases in June and hiking for a first time in July is already common place. And markets are attaching some probability to hikes larger than 25bp. The ECB has to increasingly grapple with potential de-anchoring of inflation expectations That does not mean that the known objections of the Council’s doves are invalid: too fast tightening being counterproductive, weighing on growth without being able to do anything about inflation driven by supply shocks. The line of reasoning still holds and explains market concerns reflected in current curve flattening. But the ECB has to increasingly grapple with potential de-anchoring of inflation expectations with some of the related measures already displaying notable shifts. This shift in some inflation expectation measures had been outlined by Isabel Schnabel in one of her more recent speeches. She had also highlighted the still very low level of real yields. This hawkish argument was also found in yesterday’s minutes, with real yields remaining low while the rise in nominal yields was not enough to dampen aggregate demand and bring down inflation in the medium term. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM EUR real rates have a long way to go Source: Refinitiv, ING   It is worth noting that back around the April ECB meeting the 10Y swap rate was just below 1.6% versus a current level of 1.65%, although following a decent rally after a brief excursion above 2% earlier this month. Real rates remain deeply negative regardless of the maturity, and if this is a measure considered instrumental at reining in inflation over the medium term, then we may have to reckon with more upside to rates. The important question is whether the ECB will have enough time to realize its goals.   The ECB's "separation principle" is still lacking detail The "separation principle" referenced in the ECB accounts states the idea that monetary policy could be set independently from any measures designed to avoid disruptions triggered by any such policy tightening. More specifically to the current situation, Eurozone sovereign bond spreads could be managed while the ECB starts hiking. However, as of now the ECB has still not provided any details on how such a tool could look in practice. Beyond stating the need to keep flexibility and pointing to the potential use of pandemic emergency purchase programme reinvestments, it appears there is no desire to have a broader discussion on the topic just yet. With ECB plans still vague, Italian bonds especially remain vulnerable With ECB plans still vague, Italian government bonds especially remain vulnerable. In the current risk-off environment Italian bonds are still positively correlated with Bunds, ie, they do not trade as risk assets, but the spreads have started to rewiden towards 195bp in 10-year maturities. We still think the market could test out widening this spread towards 250bp before the ECB steps in. ECB plans remain vague, leaving Italian bond spreads vulnerable to further widening Source: Refinitiv, ING Today's events and market views In terms of data and events it will be a quieter session today. The main focus will be on central bank speakers with the ECB's Muller, Kazaks Lane, and Centeno all scheduled for the day. In the UK we will hear from the Bank of England's Chief Economist Huw Pill. Main data of note is the Eurozone consumer confidence. In this shaky risk environment, we expect bonds to retain their poise. It would take a lot of good news for yield upside to resume at the long-end, but central bankers should keep the heat on shorter rates. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Follow FXMAG.COM on Google News
China: Slowdown in Non-Manufacturing Activity Raises GDP Downgrade Concerns

US Close – Stocks Near Bear Market, Crude Oil Price Higher On Supply Concerns, Gold Price (XAUUSD) Pops, Bitcoin (BTC/USD) Stabilizes | Oanda

Ed Moya Ed Moya 19.05.2022 23:51
US stocks edged lower as Wall Street became more focused over a deteriorating growth outlook that could see stubbornly high pricing pressures for the Fed into a much more aggressive tightening cycle. It doesn’t seem like we will see a deceleration in pricing pressures and that has many traders worried that the Fed will send the economy into a recession.  Right now markets are functioning properly but if we see another 5% decline with stocks, credit conditions will worsen and that could provide the Fed an excuse to stop tightening so aggressively.  Tighter financial conditions will hurt the parts of the economy that are doing well and further selling of stocks could remain the theme if the S&P 500 enters a bear market.  The S&P 500 is looking vulnerable here as more strategists slash their forecasts as recession risks rise.  Fed (Federal Reserve) Fed’s George affirmed the board’s stance that a half-point rate increase pace is appropriate.  The Fed remains focused with fighting inflation and they will remain aggressive with tightening policy until liquidity becomes a concern.  FX (Forex) The dollar is in freefall as investors buy up Treasuries over concerns that the economy is headed for a rough patch. The dollar was ripe for a pullback and today’s across the board weakness might continue a while longer. Read next: Altcoins: What Is PancakeSwap (CAKE)? A Deeper Look Into The PancakeSwap Platform| FXMAG.COM US Data A wrath of US economic data painted a gloomy picture of the economy: Jobless claims rose, the housing market is clearly cooling, another Fed regional survey showed the weakest print since early in the pandemic and the leading index turned negative.  Weekly jobless claims rose from 197,000 to 218,000. The Philly Fed manufacturing outlook fell sharply from 17.6 to 2.6.  Surging mortgage rates and record home prices led to a drop in April existing home sales  Crude Oil Price Crude prices rallied as the EU nears a key deadline to pay for Russian oil with a roubles account.  The oil market just has too many risks to supplies and still a strong short-term travel outlook both in the EU and US.  WTI crude should be well supported at the $100 level as US production is slowly increasing. Recession fears are rising but that impact won’t be felt for quite a while, which means the oil market won’t see imminent crude demand destruction. Crude inventories are too low for oil traders to turn bearish with WTI crude. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM Gold Price Gold is acting like a safe-haven again as recession fears are triggering massive demand for Treasuries, which is sending both yields and the dollar lower. The US labor market is showing signs of weakness and that could lead fears that consumer spending will deteriorate much faster than most are expecting. The dollar is getting sold against everything and that is great news for gold. Right now, investors are looking for safety and Treasuries and gold should both outperform in the short-term.   Bitcoin (BTC) Bitcoin is hovering around the $30,000 level as investors continue to shy away from stocks.  A weaker dollar and bear market stock fears are making Bitcoin attractive again.  It seems the fallout from all the stablecoin drama that sent cryptos sharply lower is finally fading.  Bitcoin looks poised to consolidate here, but bulls should be happy to see prices are not mimicking what happens with the stock market.   Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
Hungarian Labour Markey Data And Turkish Monetary Policy Are Going To Arouse Our Interest | Key events in EMEA next week - 19/05/22 | ING Economics

Hungarian Labour Markey Data And Turkish Monetary Policy Are Going To Arouse Our Interest | Key events in EMEA next week - 19/05/22 | ING Economics

ING Economics ING Economics 19.05.2022 23:47
Labour market figures in Hungary and Turkish policy rates are the key releases to look out for next week The Central Bank of Turkey Content Hungary: Double-digit wage growth expected in March Turkey: Policy rate to remain on hold Hungary: Double-digit wage growth expected in March Next week we will see the latest set of labour market data in Hungary. After a significant jump in wages in February due to a six-month bonus payment to the armed forces, we expect a more moderate growth rate in March. However, due to the labour shortage and the minimum wage increase, this moderate rise will still be well into double-digit territory, around 14% year-onyear. We don’t see any significant change in the unemployment rate as the latest surveys show that companies are still complaining about a lack of labour and are ready to hire new workers. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM Turkey: Policy rate to remain on hold Recent Central Bank of Turkey moves that 1) tightened reserve requirements to curb TRY commercial loan growth and 2) aimed to encourage a higher take-up of FX-protected deposits on the retail side and strengthen its FX reserves moves, signal that there is no reason to expect the bank to change its stance and policy rate in the near term. This is despite ongoing challenges to external balances and the inflation outlook. Given this backdrop, we expect that the policy rate will be kept unchanged at 14%. Read next: Altcoins: What Is PancakeSwap (CAKE)? A Deeper Look Into The PancakeSwap Platform| FXMAG.COM EMEA Economic Calendar Source: Refinitiv, ING, *GMT TagsTurkey Hungary EMEA Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

FX Daily: Dollar rally pauses for breath | ING Economics

ING Economics ING Economics 20.05.2022 10:57
Some support measures for the Chinese economy and some stability in the Chinese renminbi have helped usher in a period of consolidation in FX markets. This may well last into next week, although we would consider this a pause not a reversal in the dollar's bull trend. The stronger dollar is also exporting Fed hikes around the world Not until the Fed pours cold water on tightening expectations should the dollar build a top USD: Some consolidation is in order The dollar is now about 2% off its highs seen late last week. Driving that move has probably been some position liquidation and a preference for currencies like the Japanese yen (JPY) and the Swiss franc (CHF) during turbulent times in global equity markets. In fact, yesterday's FX activity looked like the big sell-off in EUR/CHF on Swiss National Bank (SNB) comments which triggered downside stops in USD/CHF and prompted a slightly broader dollar adjustment. Also helping this period of consolidation has been this week's stability in the Chinese renminbi (CNY). The overnight 15bp cut in the 5-year Loan Prime Rate – aimed at supporting the property sector – has instilled a little more confidence in Chinese assets markets. However, we cannot see USD/CNY heading straight back to 6.50. Instead, a 6.65-6.80 trading range may be developing after the recent CNY devaluation.  However, the emerging market environment still looks challenged given that the stronger dollar is effectively exporting tighter Fed policy around the world. Yesterday we saw rate hikes in Egypt, South Africa, and the Philippines. After devaluing the Egyptian pound by 15% in March, authorities there are very much struggling with the external environment. This has seen Egypt's 5-year Sovereign Credit Default swap rise to news highs of 940bp and is a reminder of the challenge North Africa faces from surging food prices. For today, the data calendar is relatively quiet and there may be some interest in what G7 finance ministers and central bank governors have to say after their meeting in Bonn. Reports suggest Japan would like some tweaks to the final G7 communique, but we very much doubt there will be any change in the core FX language that FX rates be market-determined and that excessive volatility and disorderly moves be avoided. DXY could correct a little lower to 102.30, but we see this as bull market consolidation, rather than top-building activity. Not until the Fed pours cold water on tightening expectations should the dollar build a top. And yesterday Fed hawk, Esther George, said that even this 'rough week' in equity markets would not blow the Fed off course.  EUR: ECB hawks in control Minutes of the April ECB meeting released yesterday show that the hawks are calling the shots. The market now prices a 31/32bp ECB rate hike at the 21 July ECB meeting – pricing which has plenty of scope to bounce between +25bp and +50bp over the next two months. This could drag EUR/USD back to the 1.0650/70 area over the coming days – helped by brief periods of calm in the external environment – but as above we would see this as a bear market bounce. Our core EUR/USD view for 2H22 is one of heightened volatility and probably EUR/USD getting close to parity in 3Q22 when expectations of the Fed tightening cycle could be at their zenith. Read next: Altcoins: What Is PancakeSwap (CAKE)? A Deeper Look Into The PancakeSwap Platform| FXMAG.COM GBP: April retail sales provide a reprieve UK retail sales have come in a little better than expected and break/suspend the narrative that the cost of living squeeze is large enough to derail the Bank of England tightening cycle. We would not get carried away with the sterling recovery, however. Sterling is showing a high correlation with risk assets – trading as a growth currency – and the outlook for risk assets will remain challenging for the next three to six months probably. Here's what our credit strategy team thinks of the European outlook.  Cable may struggle to breach the 1.2500/2550 area and 1.20 levels are very possible over the coming months. New-found hawkishness at the ECB means that EUR/GBP may struggle to sustain a move below 0.8450 before returning to 0.8600. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM CHF: SNB policy makes the case for EUR/CHF sub 1.00 next year As we discuss in an article released yesterday, it looks like the SNB is targeting a stable real exchange rate to fight inflation. Given that Switzerland's inflation is roughly 4% lower than key trading partners, a stable real exchange rate means that the nominal exchange rate needs to be 4% stronger. This will be an added factor supporting the CHF over the coming months and may start to generate interest in trades positioning for a lower GBP/CHF. 1.2080 is a big support level but 1.1860 looks like the near-term target. Read this article on THINK TagsGBP FX Daily ECB CHF Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
This Week's Tesla Stock Split Could Be The Best Moment To Buy The Stock! Twitter Stock Price Plunged!

Could XAU extend rally? Are Apple, Tesla good to short? | MarketTalk: What’s up today? | Swissquote

Swissquote Bank Swissquote Bank 20.05.2022 10:23
The US equities closed Thursday’s session in the negative following a choppy trading session, as investors’ hearts pounded between buying the dip, or selling further on recession fear. The US 10-year yield declined yesterday, and the sharp retreat in the US yields gave a boost to gold, raising question on whether the gold rally could be sustained, and if yes, how high could it extend. The dollar gave back gains, letting the EURUSD and GBPUSD rally, but the gains may remain short-lived if the dollar skew in market pricing continues. Tesla got kicked out of the S&P’s ESG index, which could have implications on its long-term price potential   On the individual stocks, news that Michal Burry opened a bet against Apple heated conversations about whether Apple is a good ‘short’. And finally, Tesla got kicked out of the S&P’s ESG index, which could have implications on its long-term price potential. Read next: Altcoins: What Is PancakeSwap (CAKE)? A Deeper Look Into The PancakeSwap Platform| FXMAG.COM Watch the full episode to find out more! 0:00 Intro 0:28 Market update 1:20 Is Apple a good stock to short? 3:50 US yields boosted gold. Is gold rally sustainable? 6:25 FX update: euro, pound up on softer dollar 7:58 Tesla out of S&P ESG index: what does it mean for stock performance? Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. Follow FXMAG.COM on Google News
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

FX Update: Poking at pain points for USD bulls. | Saxo Bank

Saxo Bank Saxo Bank 20.05.2022 13:32
Summary:  After avoiding new cycle lows in US equities yesterday, risk sentiment bounced strongly overnight on China easing a key lending rate. In FX, this pushed the US dollar lower and the JPY lower still after yesterday’s fuss and bother in JPY crosses that ended leading nowhere. The status of the USD rally is the current burning question as we head into next week, and the remarkable volatility in USDCHF is a novel diversion. FX Trading focus: Further important USD supports under pressure Yesterday, I looked at the potential for JPY volatility to come unglued should risk sentiment continue to deteriorate in combination with a significant further drop in long US treasury yields amid mounting evidence that the US economy faces headwinds. Yesterday, treasury yields did dip to new three-week lows in the wake of weekly US jobless claims ticking up to the highest levels since late January and an ugly miss for the Philly Fed survey (2.6 vs. 15.0 expected and 17.6 prior), now the second US regional manufacturing survey in May to hit a huge air pocket after the volatile Empire figure turned suddenly negative this month. But while USDJPY poked below the first pivot lows of 127.50 in the wake of the US data yesterday, there was little follow through and then both the JPY and the USD were sent back lower. Boosting that move and sentiment overnight was a larger than expected rate cut in China (for the 5-year Loan Prime Rate generally associated with real estate loans) of 15 basis points has helped to buoy sentiment further. The USD pair showing the most volatility over the last few sessions is USDCHF, which managed to pull all the way above parity at the peak of the strong USD wave before retreating sharply all the way to below 0.9700 as of this morning before finding support. Surprisingly, that more than 300 pip retracement has only seen the pair testing slightly through its 38.2% retracement from the end-March lows below 0.9200 (!). The franc has found support on lower safe-haven yields that have also supported the JPY recently, but also after yesterday saw the SNB President Jordan out with the first firm hint that the bank is concerned about the inflation outlook and the risk of second round effects. No specifics, and Swiss rates haven’t really responded, but the CHF jumped on the news. All of this after the recent EURCHF attempt on 1.0500 has failed and USDCHF posted that parity milestone. Will revisit this if EURCHF Is down through 1.0200 support, for now the CHF move looks a bit of an overreaction. Chart: USDCHFUSDCHF has managed the rare feat of providing significant volatility in recent weeks after a long period of choppy action as both currencies have often been classified as “safe-havens” in recent years. After launching a rocket ride from the sub 0.9200 base, USDCHF rose as high all the way above parity on the extreme Fed-SNB policy divergence story (Swiss short government debt will be some of the last negative yielding stuff standing for this cycle) as well as the disproportionate pressure on all things European in the wake of the Russian invasion of Ukraine. The consolidation has been sharp for the reasons noted above, but is still far above the break-out line below 0.9500. Looks like the pair has staked out the new range above that figure and at least to the old range highs into 1.000-1.0200 for now. Looking cheap here? Source: Saxo Group The chief question for me heading into next week is whether the US dollar is set to find support here or fall to the next layers of support perhaps 2-3% lower, depending on the pair (EURUSD structural bears can easily stand a move to 1.0750, but above 1.0800 and the bearish stance comes under fire. For AUDUSD, the next layer of resistance is into 0.7250+, near a previous pivot high and the 200-day moving average). A chunky USD rally into the close today on a weak equity market would be just the signal USD bulls are looking for to establish fresh positions, while another leg lower suggests next week could be about poking around for new lower support levels. Next week’s calendar highlights include a German IFO survey up on Monday, flash Euro zone and global PMI’s on Tuesday, a presumed 50 basis point hike to the OCR from the RBNZ and the FOMC minutes on Wednesday, and on Friday, the Apr. PCE inflation data. Next week will be the last week before the beginning of actual Fed balance sheet tightening to begin on June 1 of the following week. Table: FX Board of G10 and CNH trend evolution and strength.The JPY volatility didn’t happen, although don’t write off its potential if the US equity lurches into bear market territory, which is demarcated at the 19.9% drawdown of the cycle lows. Note that the USD has lost nearly all of its positive steam – needs a boost or it is at the risk of falling farther. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.The USDJPY pair didn’t stick the move to the downside yesterday, so the trend reading has not yet flipped – although it is threatening to do so today as the moving averages settle. Note USDCHF and USDCAD having a look at a trend-flip as well today – although as we note above, the USDCHF picture would require more downside to suggest the prior large rally has failed, while USDCAD does indeed look beyond the local tipping point as of this writing.Source: Bloomberg and Saxo Group Source: Saxo Bank
Rates Reversal: US Long Yields on the Rise as Curve Dis-Inverts

Is the yen making a comeback? | Oanda

Kenny Fisher Kenny Fisher 20.05.2022 18:14
After a brutal slide over the past two months, the Japanese yen is showing some bounce in its step. Japanese yen bounces back The yen registered 10 straight losing weeks but finally ended that nasty streak last week, with gains of about one per cent. Barring any surprises today, the yen will repeat with another strong week. On Thursday, USD/JPY dropped to 127.02, its lowest level since late April. Has the yen turned the corner? The US dollar pummelled the yen in the months of March and April, and earlier this month USD/JPY touched 131.34, its highest level in some 20 years. The yen’s descent was rapid and drew warnings from the BoJ and Japan’s Ministry of Finance. There was speculation that the exchange rate was nearing an unknown ‘line in the sand’, which if breached, would trigger an intervention to prop up the yen (clearly, 130 was not that line in the sand). The yen’s movement is largely dependent on the US/Japan rate differential. With the BoJ showing no hesitation to intervene in order to defend its yield curve, the yen has been at the mercy of the direction of US yields. Over the past few months, yields have been generally going up, which has pushed the yen sharply lower. The Federal Reserve remains in aggressive mode, but with concerns of stagflation and a possible recession, the Fed may have to ease up on the pace and size of its rate hikes, which would weigh on US yields, thus boosting the yen. The recent turbulence in the stock markets, which has seen equities fall sharply, has benefited the yen, which traditionally acts as a safe-haven asset. The yen may have flexed some muscle, but I would still consider yen risk tilted to the downside. The US economy remains in good shape, and the US dollar is also a safe-haven asset. If the Ukraine war continues to cause increases in energy and food prices, risk appetite would fall and investors would likely flock to the safety of the US dollar. . USD/JPY Technical USD/JPY is testing resistance at 1.2938, followed by resistance at 1.3123 There is support at 1.3000 and 1.2918 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
German industrial production slumps for third straight month, raising recession risk

Forex Speculators weaken Commodity Currency sentiment over last month

Invest Macro Invest Macro 22.05.2022 11:53
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Click for larger image Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday May 17th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar. Highlighting the COT currency data was the commodity currency speculator positions that have been on the defensive in recent weeks. Canadian dollar positions declined for a fourth straight week this week and have fallen by a total of -35,722 contracts over the past four weeks. This has pushed the overall speculator standing into a bearish position for a second straight week and to the most bearish level since October 2021. Previously, from the middle of January, CAD positions had started to trend higher and mostly maintained a bullish position into April, reaching a 40-week high on April 19th before seeing speculator sentiment weaken (-14,496 contracts this week). Australian dollar spec positions slipped for a third straight week this week and the overall speculator position has now hit a 7-week low. Aussie positions have maintained a bearish speculator bias since last May (52 consecutive weeks in bearish territory) but had recently seen a reprieve of the weak sentiment. Aussie positions improved strongly from late-February to late-April with a 10-week contract rise of +59,043 positions from February 22nd to April 26th. The speculator positions hit the least bearish level (on April 26th) of the previous 42 weeks before these past 3 weeks has seen speculators re-up their bearish levels. New Zealand dollar speculators also added to their bearish bets for a fourth straight week and have now pushed the position to the most bearish level since March 17th of 2020, a span of 113 weeks. Kiwi speculator positions had spent almost all of 2021 in bullish levels but spec bets started to falter at the end of the year and into the new year (through early March). Recently, positions had turned positive to bullish positioning in the middle of March and again later in April before turning lower in recent weeks. The NZD speculator sentiment has now been in bearish territory for the past three weeks after dropping by a total of -18,132 contracts from April 26th to this week. Overall, the currencies with higher speculator bets this week were the US Dollar Index (1,437 contracts), Japanese yen (8,145 contracts), Euro (3,810 contracts), British pound sterling (357 contracts), Bitcoin (103 contracts) and the Mexican peso (11,490 contracts). The currencies with declining bets were the New Zealand dollar (-4,771 contracts), Canadian dollar (-9,089 contracts), Australian dollar (-2,928 contracts), Brazil real (-2,683 contracts) and the Swiss franc (-829 contracts). Speculator strength standings for each Commodity where strength index is current net position compared to past three years, above 80 is bullish extreme, below 20 is bearish extreme OI Strength = Current Open Interest level compared to last 3 years range Spec Strength = Current Net Speculator level compared to last 3 years range Strength Move = Six week change of Spec Strength Data Snapshot of Forex Market Traders | Columns Legend May-17-2022OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index USD Index 61,899 93 36,213 88 -39,506 9 3,293 53 EUR 706,712 85 20,339 41 -51,517 61 31,178 26 GBP 253,811 73 -79,241 17 94,344 85 -15,103 24 JPY 241,308 83 -102,309 6 115,062 92 -12,753 28 CHF 53,291 42 -16,592 37 31,181 72 -14,589 14 CAD 151,585 31 -14,496 28 12,591 75 1,905 34 AUD 163,809 55 -44,642 43 54,437 59 -9,795 29 NZD 60,804 64 -17,767 41 21,390 63 -3,623 10 MXN 170,924 36 28,215 39 -32,249 59 4,034 60 RUB 20,930 4 7,543 31 -7,150 69 -393 24 BRL 55,990 48 38,095 88 -39,436 13 1,341 80 Bitcoin 11,644 63 806 100 -875 0 69 15   US Dollar Index Futures: The US Dollar Index large speculator standing this week resulted in a net position of 36,213 contracts in the data reported through Tuesday. This was a weekly rise of 1,437 contracts from the previous week which had a total of 34,776 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 88.2 percent. The commercials are Bearish-Extreme with a score of 9.0 percent and the small traders (not shown in chart) are Bullish with a score of 52.5 percent. US DOLLAR INDEX Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 86.5 3.4 8.8 – Percent of Open Interest Shorts: 28.0 67.2 3.5 – Net Position: 36,213 -39,506 3,293 – Gross Longs: 53,519 2,105 5,449 – Gross Shorts: 17,306 41,611 2,156 – Long to Short Ratio: 3.1 to 1 0.1 to 1 2.5 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 88.2 9.0 52.5 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 7.5 -7.2 -0.5   Euro Currency Futures: The Euro Currency large speculator standing this week resulted in a net position of 20,339 contracts in the data reported through Tuesday. This was a weekly boost of 3,810 contracts from the previous week which had a total of 16,529 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 41.2 percent. The commercials are Bullish with a score of 61.4 percent and the small traders (not shown in chart) are Bearish with a score of 26.0 percent. EURO Currency Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.7 52.7 12.1 – Percent of Open Interest Shorts: 29.8 59.9 7.7 – Net Position: 20,339 -51,517 31,178 – Gross Longs: 230,770 372,113 85,455 – Gross Shorts: 210,431 423,630 54,277 – Long to Short Ratio: 1.1 to 1 0.9 to 1 1.6 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 41.2 61.4 26.0 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -2.2 -0.5 14.8   British Pound Sterling Futures: The British Pound Sterling large speculator standing this week resulted in a net position of -79,241 contracts in the data reported through Tuesday. This was a weekly advance of 357 contracts from the previous week which had a total of -79,598 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 16.9 percent. The commercials are Bullish-Extreme with a score of 85.5 percent and the small traders (not shown in chart) are Bearish with a score of 24.3 percent. BRITISH POUND Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 10.5 79.4 8.2 – Percent of Open Interest Shorts: 41.7 42.3 14.1 – Net Position: -79,241 94,344 -15,103 – Gross Longs: 26,613 201,647 20,811 – Gross Shorts: 105,854 107,303 35,914 – Long to Short Ratio: 0.3 to 1 1.9 to 1 0.6 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 16.9 85.5 24.3 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -27.0 21.6 1.9   Japanese Yen Futures: The Japanese Yen large speculator standing this week resulted in a net position of -102,309 contracts in the data reported through Tuesday. This was a weekly advance of 8,145 contracts from the previous week which had a total of -110,454 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 5.9 percent. The commercials are Bullish-Extreme with a score of 91.8 percent and the small traders (not shown in chart) are Bearish with a score of 27.5 percent. JAPANESE YEN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 5.0 84.7 8.7 – Percent of Open Interest Shorts: 47.4 37.0 14.0 – Net Position: -102,309 115,062 -12,753 – Gross Longs: 12,113 204,417 20,933 – Gross Shorts: 114,422 89,355 33,686 – Long to Short Ratio: 0.1 to 1 2.3 to 1 0.6 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 5.9 91.8 27.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 0.9 -5.0 17.6   Swiss Franc Futures: The Swiss Franc large speculator standing this week resulted in a net position of -16,592 contracts in the data reported through Tuesday. This was a weekly reduction of -829 contracts from the previous week which had a total of -15,763 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 36.6 percent. The commercials are Bullish with a score of 72.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.8 percent. SWISS FRANC Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 9.8 74.5 15.2 – Percent of Open Interest Shorts: 41.0 16.0 42.6 – Net Position: -16,592 31,181 -14,589 – Gross Longs: 5,240 39,722 8,094 – Gross Shorts: 21,832 8,541 22,683 – Long to Short Ratio: 0.2 to 1 4.7 to 1 0.4 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 36.6 72.3 13.8 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -7.9 12.9 -19.8   Canadian Dollar Futures: The Canadian Dollar large speculator standing this week resulted in a net position of -14,496 contracts in the data reported through Tuesday. This was a weekly reduction of -9,089 contracts from the previous week which had a total of -5,407 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 28.5 percent. The commercials are Bullish with a score of 75.0 percent and the small traders (not shown in chart) are Bearish with a score of 33.6 percent. CANADIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 23.8 52.7 20.6 – Percent of Open Interest Shorts: 33.4 44.4 19.3 – Net Position: -14,496 12,591 1,905 – Gross Longs: 36,069 79,825 31,228 – Gross Shorts: 50,565 67,234 29,323 – Long to Short Ratio: 0.7 to 1 1.2 to 1 1.1 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 28.5 75.0 33.6 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -22.4 33.9 -43.0   Australian Dollar Futures: The Australian Dollar large speculator standing this week resulted in a net position of -44,642 contracts in the data reported through Tuesday. This was a weekly decrease of -2,928 contracts from the previous week which had a total of -41,714 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 43.4 percent. The commercials are Bullish with a score of 59.5 percent and the small traders (not shown in chart) are Bearish with a score of 28.5 percent. AUSTRALIAN DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 25.3 60.4 11.7 – Percent of Open Interest Shorts: 52.6 27.1 17.7 – Net Position: -44,642 54,437 -9,795 – Gross Longs: 41,473 98,903 19,187 – Gross Shorts: 86,115 44,466 28,982 – Long to Short Ratio: 0.5 to 1 2.2 to 1 0.7 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 43.4 59.5 28.5 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -6.6 24.0 -60.9   New Zealand Dollar Futures: The New Zealand Dollar large speculator standing this week resulted in a net position of -17,767 contracts in the data reported through Tuesday. This was a weekly decrease of -4,771 contracts from the previous week which had a total of -12,996 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 41.5 percent. The commercials are Bullish with a score of 63.4 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 10.4 percent. NEW ZEALAND DOLLAR Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 24.7 71.1 3.9 – Percent of Open Interest Shorts: 53.9 35.9 9.8 – Net Position: -17,767 21,390 -3,623 – Gross Longs: 14,998 43,219 2,358 – Gross Shorts: 32,765 21,829 5,981 – Long to Short Ratio: 0.5 to 1 2.0 to 1 0.4 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 41.5 63.4 10.4 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -27.2 32.7 -57.5   Mexican Peso Futures: The Mexican Peso large speculator standing this week resulted in a net position of 28,215 contracts in the data reported through Tuesday. This was a weekly gain of 11,490 contracts from the previous week which had a total of 16,725 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 39.4 percent. The commercials are Bullish with a score of 59.4 percent and the small traders (not shown in chart) are Bullish with a score of 60.1 percent. MEXICAN PESO Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 45.5 49.1 4.1 – Percent of Open Interest Shorts: 29.0 67.9 1.7 – Net Position: 28,215 -32,249 4,034 – Gross Longs: 77,819 83,844 7,000 – Gross Shorts: 49,604 116,093 2,966 – Long to Short Ratio: 1.6 to 1 0.7 to 1 2.4 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 39.4 59.4 60.1 – Strength Index Reading (3 Year Range): Bearish Bullish Bullish NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 11.6 -11.0 -3.5   Brazilian Real Futures: The Brazilian Real large speculator standing this week resulted in a net position of 38,095 contracts in the data reported through Tuesday. This was a weekly decline of -2,683 contracts from the previous week which had a total of 40,778 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 87.8 percent. The commercials are Bearish-Extreme with a score of 12.8 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 80.5 percent. BRAZIL REAL Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 76.8 16.9 6.1 – Percent of Open Interest Shorts: 8.7 87.3 3.7 – Net Position: 38,095 -39,436 1,341 – Gross Longs: 42,989 9,470 3,438 – Gross Shorts: 4,894 48,906 2,097 – Long to Short Ratio: 8.8 to 1 0.2 to 1 1.6 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 87.8 12.8 80.5 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: -7.3 8.3 -12.8   Bitcoin Futures: The Bitcoin large speculator standing this week resulted in a net position of 806 contracts in the data reported through Tuesday. This was a weekly gain of 103 contracts from the previous week which had a total of 703 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 100.0 percent. The commercials are Bearish-Extreme with a score of 0.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 14.5 percent. BITCOIN Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 82.1 1.7 9.3 – Percent of Open Interest Shorts: 75.2 9.2 8.7 – Net Position: 806 -875 69 – Gross Longs: 9,564 194 1,081 – Gross Shorts: 8,758 1,069 1,012 – Long to Short Ratio: 1.1 to 1 0.2 to 1 1.1 to 1 NET POSITION TREND:       – Strength Index Score (3 Year Range Pct): 100.0 0.0 14.5 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX:       – 6-Week Change in Strength Index: 20.1 -29.8 -13.0   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.  
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

Fighting With The EU Inflation. Naturally, Strong Euro (EUR) Would Help | Why some ECB officials are suddenly concerned about the weak euro | ING Economics

ING Economics ING Economics 23.05.2022 08:30
Several European Central Bank officials have become more vocal, showing their concern about the weakening euro. As much as we think that these concerns are overdone, strengthening the euro could for the ECB currently be the single most efficient way to temper inflation quickly   In recent days, ECB officials have become more vocal with their concerns about the weak euro. French central bank governor, Villeroy de Galhau, pointed out that a weaker euro would undermine the ECB’s goal of price stability. ECB Executive Board member, Isabel Schnabel, was quoted saying that the ECB was closely monitoring the impact of the weaker euro on inflation. This is in stark contrast with the minutes of the ECB meeting in April, when the exchange rate was only mentioned four times. There was also market speculation that major central banks could go for a kind of Plaza Agreement, using coordinated action and even fx interventions to stop the US dollar from strengthening further and the euro from weakening further. How much of a concern should the recent weakening of the euro really be for the ECB? Since the last ECB staff projections in March, the euro has lost some 5% against the US dollar. The trade weighted euro exchange rate lost almost 2%. However, compared with one year ago, the euro has depreciated by more than 13% vis-à-vis the US dollar and around 6% in trade-weighted terms. In normal times, this weakening of the currency would have been a welcome relief for eurozone exports but at the current juncture it is an additional inflation concern. According to standard estimates, the euro depreciation since March could add another 10 percentage points on inflation this year and 20pp next year. However, at a time in which the main inflationary drivers are energy and commodity prices, which are invoiced in US dollar, the impact of the weaker euro on inflation might be even stronger. With headline inflation rates above 7%, it is hard to see why some ECB officials are concerned about a few additional percentage points. The weak euro might not be the reason for high inflation but it is at least reinforcing it. The main reason why ECB officials have become more vocal on the exchange rate could be the fact that even if higher policy rates will not bring down energy prices or fill containers in Asia, higher policy rates could strengthen the euro. The so-called exchange rate channel could at the current juncture be the most, and probably only, efficient way to ease inflationary pressures relatively quickly. This is why the hawks at the ECB might be inclined to use the currency as an argument to support a 50bp rate hike in July and strong forward guidance that more rate hikes are to come. Expect more than the four references to the exchange rate at the April meeting in the coming weeks ahead of the ECB’s 9 June meeting. Read this article on THINK TagsMonetary policy Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
MSFT Stock Price Analysis: Bearish Signals Point to Potential Decline

FX Daily: Looking beyond the squeeze | ING Economics

ING Economics ING Economics 23.05.2022 10:59
The dollar long-squeeze continues to support G10 FX, but a more balanced positioning picture may soon allow the supportive monetary and growth considerations for USD to re-emerge. This week, PMIs in the eurozone and the UK will be watched closely to gauge the risk of stagflation. Elsewhere, Australia's election result should be no game-changer for AUD New US dollar loans are choosing between term SOFR and SOFR in arrears USD: Still feeling the long squeeze European stocks are higher and US equity futures are pointing to a positive start to the week, as global risk sentiment continues to drive the majority of FX moves amid strong volatility. This morning, the Australian and New Zealand dollars are leading the rally against the dollar on the back of risk-on sentiment and yet another strong day for the Chinese yuan. Reports that President Biden is considering lifting some of the tariffs on China are also helping. We doubt the Australian election had much of an impact – as discussed in the AUD section below. At the moment, it still appears the market is in the process of rebalancing a positioning picture that was heavily skewed towards a long dollar. Given the large and widespread unwinding of dollar longs in the past 10 days, we suspect such a position-squaring effect may start to run out of steam soon, and markets will be left once again with the prospect of aggressive monetary tightening by the Fed (three back-to-back 50bp hikes are on their way, in our view) and a widening growth differential between the US and other parts of the world – in particular, Europe. The positive outlook for the US economy, despite recession fears, should be confirmed by the flow of US data this week, with the focus mostly on the April personal income and spending report, which will also include the Fed’s favoured measure of inflation – the core personal consumer expenditure deflator. This should show decent real spending growth with households prepared to run down some of the savings accumulated through the pandemic, and inflation topping out, which could help to ease growing recession concerns. The FOMC minutes from the May meeting should see a confirmation that 50bp rate increases in June and July are backed by the vast majority of members. We’ll also hear comments from Fed Chair Jay Powell later this week. Today, the data and Fedspeak calendar are quite quiet. All in all, we think that the USD long-squeeze may add some extra pressure to the greenback in the coming days, but we see a higher probability this week that the dollar will find some stability or show signs of rebounding given the still supportive monetary and growth outlook for the US. The 101.00-101.50 area could represent the bottom of the dollar correction. EUR: Rally may soon run out of steam EUR/USD is pressing the 1.0600 resistance at the time of writing, still benefiting from a soft dollar environment, but still not showing clear signs of building idiosyncratic EUR strength. This week, markets will keep a close eye on PMI data in the eurozone. An intensifying debate around the stagflation risk elevates the importance of high-frequency data, although PMIs, which have had a tendency to surprise to the upside, have also had a quite negligible impact on the euro in recent months.   Indeed, there appears to be quite limited room now for a further re-pricing higher of ECB rate expectations, considering that around 90bp of tightening are already fully priced in, and recent comments by ECB members have mostly fallen on the hawkish side of the spectrum. Today, another high-frequency release will be watched, the Ifo business survey out of Germany, along with some ECB speakers (Holtzmann, Nagel, Villeroy and de Cos). The IMF World Economic Forum in Davos has started, and we’ll see ECB President Christine Lagarde deliver remarks along with other governing council members later this week. We think the upside room for EUR/USD is shrinking and with the dollar potentially stabilising or mildly rebounding, the rally may start to look quite tired as it approaches the 1.0700 mark. Beyond the very short-term, a return to 1.0500 appears likely in our view. GBP: Shrugging off the downside risks (for now) Economic surveys will be very much in focus in the UK as well, especially given how central the growth outlook has become for the Bank of England's tightening plans. The pound has enjoyed a solid rebound, both against the dollar (back above 1.2500) and the euro (EUR/GBP having moved in the lower-half of 0.8400-0.8500 this morning). Still, downside risks remain material for the pound, both due to a potential forced dovish re-pricing of BoE rate expectations (currently at 2.20% for year-end) and a resurgence of Brexit-related concerns. Those risks may take time to materialise though and the pound may retain some good momentum this week, especially against the euro, and EUR/GBP may break below 0.8400. AUD: Not many implications from change in government As briefly discussed in the USD section above, this morning’s strength in the Australian dollar appears once again fully motivated by external factors. The result of the election in Australia does not appear to be a straightforward positive or negative for the AUD, also considering it was in line with projections. The Labor Party leader, Anthony Albanese, was sworn in as Prime Minister this morning, and appears on track to secure a fully-fledged majority in the parliament. Labor’s manifesto leads with improvements to medicare, investing in vocational training, and cheaper childcare. Although it is possible that Labor will represent a slightly more fiscally supportive government than its predecessors, we don’t see many implications for financial markets from this election result.  AUD remains strictly tied to China-related sentiment (which has improved lately) and global risk dynamics. For now, AUD/USD should be able to hold above 0.7100, although some material downside risks persist. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ECB stuck in sequencing | ING Economics

S&P 500 And Nasdaq 100 Definitely Don't Feel Really Well, Further Rally Of US Dollar (USD)? FOMC Minutes To Be Released Shortly | Conotoxia

Conotoxia Comments Conotoxia Comments 23.05.2022 11:33
For the past two months, stocks, precious metals, bonds, and cryptocurrencies have all seemed to fall at the same time. Today, however, and perhaps throughout the week, there may be an attempt to break the bad run in many of the markets mentioned above. The S&P 500 and Nasdaq 100 indexes have fallen for seven weeks in a row The Dow Jones Industrial Average index has fallen for eight weeks in a row, something that previously happened in 1923, a few years before the Great Depression occurred in the United States - the most significant economic crisis of the century. Some market observers say that now, nearly 100 years later, history may be repeating itself, and the bear market is just beginning. The S&P 500 and Nasdaq 100 indexes have fallen for seven weeks in a row, which was the longest series since 2001. Technically, the U.S. indexes, having fallen more than 20 percent from their peaks, may already be in a bear market. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM However, there are indications that a turnaround may be underway. Investors may have already discounted the U.S. interest rate hike cycle, assuming that the Fed will raise interest rates to 3.00-3.25 percent within a year. Yields on 10-year U.S. Treasury bonds have already peaked in that area, at one point exceeding 3.10 percent, while on Monday their rate fell to 2.80 percent. The lower U.S. bond yields, the more attractive stocks, and other risky assets can be, including precious metals like gold and silver. This week, the minutes of the latest FOMC meeting will be released at 8 p.m. on Wednesday, May 25..., which could give investors further clues about monetary policy in the U.S. and how to price the interest rate hike cycle further possibly. This could again impact many markets: from the US dollar to stock indices, precious metals, and cryptocurrencies. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM Read more on Conotoxia Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Follow FXMAG.COM on Google News
US dollar pares gains in Asia | Oanda

(USD) US Dollar Pares Gains In Asia | Oanda

Jeffrey Halley Jeffrey Halley 23.05.2022 14:31
US dollar eases in Asia after firm CNY fixing The US dollar posted modest gains on Friday, despite weaker US bond yields, as traders reduced US dollar shorts into the weekend. The dollar index rose 0.15% to 103.05. A firm CNY fixing by the PBOC seems to have been the catalyst for more US dollar weakening today, along with a slow newsreel over the weekend. That has allowed risk sentiment to reassert itself modestly, pushing the dollar index 0.33% lower to 102.69 today. It seems US recession fears are weighing on sentiment ever more heavily for now, and the technical picture suggests the US dollar correction has more to go. A close below support at 102.50 could see the dollar index test 101.00 before the reality of a hawkish Fed reasserts itself. GBP/USD has traced out a low at 1.2155 last week and has risen 0.40% to 1.2545 in Asia EUR/USD has risen by 0.35% to 1.0590 today, continuing its recovery from its 1.0350 lows last week. A test of 1.0650 and possibly even the 1.0800 37-year breakout line remain possible, but this is a weak US dollar story and I believe that any rally above 1.0700 will be hard to sustain in the medium-term. In a similar vein, GBP/USD has traced out a low at 1.2155 last week and has risen 0.40% to 1.2545 in Asia. A test of 1.2650 is possible this week but like Europe, the United Kingdom’s structural headwinds leave the longer-term picture still bearish. The fall in US long-dated yields on Friday has pushed USD/JPY down to 127.35 this morning. Given the weight of long USD/JPY positioning, failure of support at 127.00 could trigger a capitulation trade potentially targeting the 125.00 support area. At those levels though, given the trajectory of US and Japan interest rates, being short becomes a dangerous game. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Beware of a dovishly hawkish RBNZ statement on Wednesday though AUD/USD and NZD/USD have resumed their recoveries after a quiet weekend news-wise green-lighted the sentimentalists to resume buying. AUD/USD has risen 0.60% to 0.7090, and NZD/USD has risen 0.70% to 0.6455. ​ Any rally above 0.7200 or 0.6500 will be challenging though as both currencies remain at the mercy of sudden negative swings in investor sentiment, especially from China. An RBNZ rate hike on Wednesday should allow the NZD to outperform AUD in the earlier part of the week. Beware of a dovishly hawkish RBNZ statement on Wednesday though. If US yields resume their move higher, I expect Asian currency weakness to reassert itself The PBOC has helped the recovery in risk sentiment rally by Asian currencies along today, setting the CNY at a much stronger than expected 6.6756. Most of USD/Asia is lower by around 0.25% today, although USD/MYR and USD/IDR are unchanged. It seems that USD/CNY above 6.8000 is a bridge too far now for the PBOC. But overall, they are probably more concerned about how fast it moved there, and not the overall direction of travel. In the short term, the PBOC’s actions will be supportive of Asian currencies in general. USD/INR and USD/KRW have put in decent tops at 77.80 and 1290.00 respectively. If US yields resume their move higher, I expect Asian currency weakness to reassert itself, although with regional central banks starting to hike now, we should see a slow grind and not an abrupt sell-off. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Learn more on Oanda Follow FXMAG.COM on Google News
Crucial Upcoming PMI Data and High-Stake Meetings Shape China's Economic Landscape

How Is Euro Performing Against US Dollar? Check Out EUR/USD Chart! | Euro surges to 1-month high | Oanda

Kenny Fisher Kenny Fisher 23.05.2022 14:32
The euro has jumped out of the gates on Monday with sharp gains. In the European session, EUR/USD is trading at 1.0673, up 1.12% on the day. Euro rebounds The euro looked hopelessly lost earlier this month, when it dropped to 1.0349, its lowest level since January 2017. There was increasing speculation that the euro was heading to parity with the US dollar. EUR/USD has rebounded back in impressive style, gaining 1.42% last week and extending the rally today. However, the upswing will be difficult to sustain above the 1.07 line, as the euro’s rally is more a story of US dollar weakness rather than euro strength. The dollar has fallen out of favour as fears of a US recession are weighing on sentiment towards the dollar. US yields were above the lofty 3% threshold just two weeks ago, but nervous investors have snapped up US Treasury bonds, sending yields lower. In turn, the US dollar has also retreated. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Despite the euro’s turnaround, the medium and long-term picture is bearish for the currency. The ECB remains in dovish mode, and upcoming Fed rate hikes will widen the US/Europe rate differential and weigh on the US dollar. The ECB might raise rates in July, but will clearly lag behind an aggressive Fed, which is likely to deliver 50-bps hikes at the July and August meetings. The euro faces a persistent headwind coming out of Ukraine, as the war between Russia and Ukraine continues. Heavy fighting has been reported in the east of the country, and a ceasefire, let alone an end to the fighting, appears unlikely anytime soon. That means oil and wheat prices will remain elevated, contributing to high global inflation and weighing on risk appetite, which is bearish for the euro. Follow FXMAG.COM on Google News EUR/USD Technical EUR/USD is testing resistance at 1.0648. Above, there is resistance at 1.0736 There is support at 1.0519 and 1.0431 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Learn more on Oanda
Trading Signals For The New Zealand Dollar To Swiss Franc Pair (NZD/CHF)

Ebury Weekly Analysis: Australian Dollar (AUD), Canadian Dollar (CAD), Chinese Yuan (CNY) | Ebury

Matthew Ryan Matthew Ryan 23.05.2022 15:20
AUD A broadly weaker US dollar, the easing of restrictions in China and expectations of a more rapid pace of tightening by the RBA boosted the Australian currency last week. The Australian dollar was one of the best performing currencies in the G10, briefly rallying through the 0.71 level against the US dollar this morning. The Reserve Bank of Australia’s May meeting minutes showed that the board is prepared to raise rates by larger increments at upcoming meetings in order to tame inflation. The minutes also showed that inflation is expected to increase further in the near-term, which has raised expectations in favour of more aggressive tightening. The latest economic data supports these expectations, with Australia’s unemployment rate falling to 3.9% in April, the lowest since August 1974. The most important event for AUD this week will likely be the release of the May preliminary PMIs on Tuesday, which are expected to remain in expansionary territory. On Friday, April retail sales will be published. Learn more on Ebury CAD The Canadian dollar ended the week modestly higher against the US dollar as Canadian inflation reached a three-decade high, although the currency underperformed most of its G10 peers. Canada’s April inflation surprised to the upside, reaching a 31-year high of 6.8%. The rise in commodity prices, mainly due to the war between Russia and Ukraine, continues to pressure inflation higher. But this is not the only reason and it seems that price pressure is spreading to more components, as core inflation rose to a record high of 5.8%. This data reinforced expectations of another 50 basis point hike at the Bank of Canada’s June meeting, which has continued to provide a bit of support for the Canadian dollar. On Thursday, March retail sales will be published. Aside from that, CAD is likely to be driven by events elsewhere. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM CNY Last week was a turning point for the yuan, with the USD/CNY pair returning to early-May levels amid a weaker US dollar and improving headlines out of China. News on the Covid front has taken a turn for the better. Shanghai has begun lifting some of its restrictions, with the city set to exit lockdown at the start of next month. Beijing has also continued to resist calls for a lockdown, despite another increase in virus caseloads. Last week’s 15 basis point cut to the PBoC’s 5-year loan prime rate, a reference rate for mortgages, has also raised hopes of an economic revival. The scale of the rate adjustment was larger than expected, and suggests China is serious in its efforts to support the struggling housing sector. Sentiment toward China received an additional boost from President Biden’s suggestions that the US may lift some of the Trump-era tariffs. The noises in that regard have been getting louder in the past few weeks, but the decision itself is not an easy one considering the geopolitical landscape in Asia and doubts about benefits to Americans from such a change. This week we’ll focus primarily on news from China’s Covid front as well as any headlines from president Biden’s trip to Asia, a first since he took office. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM To stay up to date with our publications, please choose one of the below: 📩 Click here to receive the latest market updates👉 Our LinkedIn page for the latest newsâœÂï¸Â Our Blog page for other FX market reports 🔊 Stay up to date with our podcast FXTalk
Selling opportunity? Why GBP/USD's rally is unjustified and could lead to a downfall

Selling opportunity? Why GBP/USD's rally is unjustified and could lead to a downfall

FXStreet News FXStreet News 23.05.2022 16:44
ECB President Lagarde's hawkish comments have dragged the pound higher. BOE's Bailey is set to cool expectations with potential recession warnings. The four-hour chart shows that GBP/USD is entering overbought territory. GBP/USD’s short-term bullishness looks like a selling opportunity – the currency pair has been extending its gains, somewhat influenced by the strengthening euro, which got a boost from ECB President Christine Lagarde. She said that the bank could raise rates by 50 bps by September, a relatively aggressive timeline. There is a feeling that central banks are catching up with the hawkish US Federal Reserve and raising rates quickly. The ECB's determination is boosting the euro and also dragging the pound higher on the way. But is it justified? Recession warnings Later in the day, Bank of England Governor Andrew Bailey is set to speak about monetary policy, and he will likely reiterate his stance that the BOE is ready to tighten its policy to curb inflation. We know that another 50 bps or so of rate hikes are coming. On the other hand, Bailey warned that price shocks could already send the British economy into recession, The cost-of-living crisis is, therefore, self–correcting. Higher prices curb expenditure, lower growth, raise unemployment and eventually push inflation lower. That means the scope for the BOE to further hike rates is limited. My analysis above implies that if Bailey merely repeats his warnings – if so the current upside move of the pound could be reversed. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM GBP/USD Technical Analysis The technicals back it up. Initially, they give GBP/USD scope to rise toward 1.2640, May's high, but not to the next big round level at 1.27. The 4h-RSI is almost at 70, and moving some 100 pips from current levels would put it in overbought territory. There is a greater chance of a climb down to support at 1.2545 than an upside move. Follow FXMAG.COM on Google News
Trading Signals For The New Zealand Dollar To Swiss Franc Pair (NZD/CHF)

FX Update: Rates trump risk sentiment as USD driver. | Saxo Bank

John Hardy John Hardy 23.05.2022 14:17
Summary:  The US dollar found only very modest support on Friday as US equity markets plumbed new cycle depths. As risk sentiment rebounded Friday and carried through higher to start the week today, the USD selling has become more aggressive. The fact that risk sentiment has only rebounded since Friday while the US dollar has been selling off for nearly two weeks suggests that US treasury yields, which peaked slightly ahead of the USD, may be the dominant market driver. FX Trading focus: Rates trump risk sentiment as USD driver. As noted on Friday, the near-term focus for FX traders is where and when the USD finds support, if it is going to find support. I suspect that the USD will only properly roll over for the cycle once the Fed has turned back toward easing – at least in a relatively sense, and perhaps this only becomes clear as a reduction in the perceived end-point of this rate hike cycle. In that sense, the market seems in a rush to declare that we have reached that point and that inflation is set to fade from here. Breakeven inflation rates peaked back In late March and have really swooned since the beginning of May. Yields at the short end of the US yield curve remain elevated, but are below the peak reached just before Fed Chair Powell took jumbo hikes of greater than fifty basis points off the table at the May 4 FOMC meeting. The longer end of the US yield curve has consolidated even more and I suspect the combination of the easing back of US yields and inflation expectations, combined with hefty long-USD speculative positioning, that have the USD on its back foot. I have a hard time that peak Fed rate expectations are in the rear view mirror a week before actual quantitative tightening has even begun, but let’s see From here, there is still some room for the USD to fall further without reversing the well-established bull trend, but the comfortable (for USD bulls) portion of that room has been about reduced by half in today’s trade. The yield-fixated USDJPY is in its own category (given BoJ yield-cap policy and the enormity of the move since the pair broke above the 116.35 range top back in March) . For other major USD pairs, the next major area for EURUSD is into 1.0800+, for USDCHF is 0.09525, for USDCAD last gasp support is into 1.2660-1.2715, AUDUSD is discussed below. GBPUSD has a little resistance at the 1.2638 pivot high, but has a lot more wood to chop to suggest a trend reversal, as this downtrend started on the break below 1.3000. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM Chart: AUDUSD The AUDUSD has carried through higher after bobbing back above the pivotal 0.7000 level, one that has served as both support and resistance on many occasions since early 2019. Supporting the AUD are the structural shift in the country’s external imbalances for the better, the recent rebound in risk sentiment, a solid recovery in some industrial metal prices associated with Australia’s traditional export mix, and hopes that China is set to stimulate. Working against the Aussie’s favor are a new left turn from the Australian government at the margin, rising concerns that the global economy is set to slow, and the risk that we are far from the end of the asset market deleveraging cycle. From here, bears, for an ideal fresh trading hook, need a quick rejection of today’s action and for the price action to dip back below 0.7000. On the flipside, if this rally persists into 0.7250+ area (most recent major pivot high in that area and just ahead of the 200-day moving average) the latest down-wave would have been rejected and this would suggest the softening up of the bearish risk has been neutralized for now – the next figure (100 pips) in either direction looks very important here for the pair. Source: Saxo Group ECB President Lagarde was out jawboning today on rate outlook, with her comments largely rhyming with market expectations, therefore triggering a modest pick-up from intraday lows in forward ECB expectations, but a rather more pronounced reaction in the euro itself, especially as EURUSD cleared the local pivot high of 1.0642. She basically spelled out that the ECB will hike in July due to the winding down of asset purchases and in saying that a negative interest rate policy will be over by late Q3, suggests that another hike will come at the September meeting. As background concerns continue to plague the Chinese economic outlook and a rise in Beijing Covid case counts has driven new fears of widening lock downs there, China has been out today touting new measures to encourage activity resumption elsewhere and other easing measures in the works, including SME loans and a tax cut on car purchases. Sentiment in general has also gotten a boost from increasing chatter that US President Biden could be set to roll back some of the China tariffs in the all-out effort to get inflation readings down ahead of the US mid-term election in November. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Table: FX Board of G10 and CNH trend evolution and strength.For the trend window the FX Board operates with, the USD bull-trend has effectively been erased. As emphasized above, some USD charts still have more room to allow the USD to consolidated lower, but clearly USD bulls are down if not yet out. Otherwise, it is clear we are in flux when no trend reading has an absolute valuer greater than 2 save for NOK. By the way, Poland’s prime minister has been the first politician (that I have noticed) to call for Norway to share its windfall gains from high energy prices. Interesting to watch the political optics on this issue – certainly a forward risk for NOK. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.EURUSD is trying to cross into a positive trend reading today, but note that the chart context is important for trend status and the downtrend is so entrenched that it is too early to bite on this move. Likewise for USDCHF, although the USDCAD chart looks more credibly bearish on a weak close today. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – US Apr. Chicago Fed National Activity Index 1415 – ECB's Holzmann, Nagel to speak 1415 – UK Bank of England Governor Bailey to speak 1430 – ECB's Villeroy to speak at Davos 2245 – New Zealand Q1 Retail Sales  2330 – US Fed’s George (voter) to speak Source: Saxo Bank
Economic Calendar For July 21st. EUR/USD And GBP/USD - Trading Ideas

What's Going To Affect EUR, USD And CHF? Ebury Weekly Analysis: Euro (EUR), US Dollar (USD), Swiss Franc (CHF)

Matthew Ryan Matthew Ryan 23.05.2022 15:18
EUR The retreat of the ECB doves in the face of inflationary reality accelerated last week, as the hawkish Dutch member of the council suggested that not only is a July hike a near certainty, but a 50 bp hike could be on the cards. This is happening at the same time US short term rates are having trouble pushing higher, partially because so much is priced in on the part of the Federal Reserve. As a result, interest rate differentials across the Atlantic have shrunk and are no higher now than in March. This trend should be supportive for the euro and we may have already seen the bottom. This week’s PMIs should be strong and partially assuage recession fears in the US, enabling the ECB to continue its policy turnaround and focus squarely on containing inflation. Learn more on Ebury USD Strong retail sales last week confirmed that so far there is little sign that higher prices are doing much to deter the US consumer. However, it is a volatile indicator and one cannot extract a lot of information from a single print. US yields fell in sympathy with stocks, and for now the US dollar seems to have recoupled to rate differentials with the rest of the world, so it fell as well. On tap for this week is the publication of the minutes for the last meeting of the Federal Reserve, which we expect to reiterate that the next two hikes are likely to be “doubles”, i.e., 50 bp. However, all of this is already priced in by markets, and it will be difficult for US short term rates to price in any more. We think the dollar is vulnerable to a sustained pullback here. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM CHF The Swiss franc outperformed all other G10 currencies by a significant margin last week, rallying by close to 3% against the US dollar on growing speculation about monetary policy tightening in Switzerland. SNB president Jordan suggested on Wednesday that the bank was ready to act should an inflation threat materialise. Investors might have been further encouraged to bet on a shift in the SNB’s approach by a hawkish ECB, which looks ready to kick-start its rate hike cycle in July. We think that the market is perhaps a bit too aggressive, and think that the SNB would likely prefer to increase currency interventions in the near-term, before thinking about rate increases. While interventions have been relatively limited, suggesting a degree of acceptance of the currency’s strength in light of elevated inflation, the bank still seems determined to not allow the franc to appreciate too much. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM We believe the scale of the franc’s recent rally has been excessive and think it may give up some of its gains, particularly if global sentiment improves. That will be the focus for the franc this week, namely the PMI prints from the main economies, news from China, and behaviour of global equity and bond markets. Follow FXMAG.COM on Google News
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

Will Pound (GBP) Strengthen? Ebury Weekly Analysis: British Pound (GBP) | Ebury

Matthew Ryan Matthew Ryan 23.05.2022 15:16
Last week saw some strange market action. Financial headlines were dominated by the relentless sell-off in world equity markets that left the S&P 500 index flirting with the semi-official bear market line of 20% below its record high. Among G10 currencies, the Swiss franc notched a rare win as the flight to safety bid combined with a hawkish central bank to send it soaring by over 2% against the US dollar. More surprising was the general weakness in the US dollar, which failed to benefit from its safe-haven role. In fact, the winners of the week were Latin American currencies, which is particularly impressive in the current risk averse environment. As long standing LatAm bulls, we are not complaining, however.  Learn more on Ebury This week the focus will be on any spillovers from the volatility in stock markets to the FX market, on one hand, and the PMIs of business activity on the other. The Eurozone and UK indices are all expected to print well above 55.nWe think that these levels belie the fears of recession that appear to be gripping asset markets. It is difficult to reconcile still massively negative real rates, huge government deficits and economies at full employment with any sustained economic pullback. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 23/05/2022 British Pound (GBP) Data out of the UK continued to suggest a dichotomy between sentiment and reality. Consumer sentiment was dismal, but jobs data came out very strong, as did retail sales. Inflation in April was sky high, as expected. Sterling bounced back in line with the general dollar selloff and managed some gains against the euro as well. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM We think there is little to suggest a recession is likely, and this week’s PMI data should be further evidence. It seems that the Bank of England’s apparent willingness to tolerate inflation due to the risks to growth is misplaced. In the short-term, Bank of England dovishness may weigh on the pound, but after the recent sell-off we think that the currency is quite cheap and offers a solid opportunity over the longer term. Figure 2: UK Inflation Rate (2017 – 2022) Source: Refinitiv Datastream Date: 23/05/2022
Steel majors invest in green steel, but change might be driven by contenders

Forex Pairs - Buy Or Sell? Having A Look At EUR/USD, AUD/USD And NZD/USD With Jason Sen (DayTradeIdeas) - 24/05/2022

Jason Sen Jason Sen 24.05.2022 09:58
EURUSD longs at support at 1.0560/40 worked perfectly & so did buying a break above 1.0600 as we hit the 1.0670/80 target, reaching 1.0697. This week we could reach as far as 1.0800. I think the downside should be limited with minor support at 1.0650/40 & strong support at 1.0620/00. AUDUSD rallied from 7036 targeting 7095/99, with a high for the day just 8 pips from very strong resistance at 7135/55. Shorts need stops above 7175. Minor support at 7050/45, strong support at 7030/20. Longs need stops below Holding below 7000. A break lower however targets 6940/30. NZDUSD broke higher for a buy signal targeting 6490/6500, with a high for the day here. First support at 6420/00 on this dip. Longs need stops below 6385. Longs at 6420/00 target 6470 & 6490. Above 6500 look for 6520/30. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk
China: PMI positively surprises the market

China slowdown weighs on Asian markets | Oanda

Jeffrey Halley Jeffrey Halley 24.05.2022 11:08
Asian equities ease once again on China worries It was another rollercoaster session on Wall Street, with equities rallying powerfully as JP Morgan raised its income outlook and was upbeat on the US economy. The S&P 500 jumped by 1.86%, the Nasdaq rallied by 1.59%, while the Dow Jones leapt 2.0% higher. Snap’s downbeat forecast for this quarter saw its stock slump in aftermarket trading, dragging Meta with it. In what has become typical whip-saw price action these days, US index futures have slumped with investors having zero appetite for positioning moving against them. Nasdaq futures have slumped by 1.45%, S&P 500 futures are 0.85% lower, and Dow futures have fallen by 0.50%.   Asia has shown a reluctance to blindly follow New York of late, with China concerns being a more existential threat. The fall of US futures has been followed by JP Morgan and UBS sharply downgrading China growth, while Covid-19 cases remain stubbornly high by local standards in Beijing, prompting lockdown fears. That has seen Asian markets fall into the red today for the most part.   In Mainland China, the overnight stimulus measures were forgotten as the Shanghai Composite falls by 1.10%, with the CSI 300 losing 1.15%. In Hong Kong, the Hang Seng is 1.35% lower. Japan’s Nikkei 225 has eased by 0.65%, with South Korea’s Kospi losing 1.10%, and Taipei falling by 0.70%.   Singapore is just 0.15% higher, while Jakarta has jumped by 1.10% as markets price in no change in interest rates from BI later today. Kuala Lumpur is down 0.10%, while Bangkok has eased by 0.30% and Manila has retreated 1.0% lower. Australian markets are unchanged today.   European equities will likely open a bit softer this afternoon, in line with the price action in Asia. Their fate will be dictated on the day how firm, or not, the pan-Europe PMI data is. As for New York, that really depends on how much coffee the gnomes of Wall Street decide to consume before work, it’s that sort of market. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
End Of US Dollar (USD) Rally!? How Is The Dollar Index? Is S&P 500 (SPX) Going To Recover? (EUR/USD) Euro Seems To Be Stronger Recently! EUR/GBP Keeps Fluctuating | Luke Suddards (Pepperstone)

End Of US Dollar (USD) Rally!? How Is The Dollar Index? Is S&P 500 (SPX) Going To Recover? (EUR/USD) Euro Seems To Be Stronger Recently! EUR/GBP Keeps Fluctuating | Luke Suddards (Pepperstone)

Luke Suddards Luke Suddards 24.05.2022 12:07
Every Tuesday our Global Macro Strategist Luke Suddards will be analysing the charts of key global asset classes such as FX, commodities and more. Catch him on Twitter - @lukesuddards Also, he produces The Weekly Close Out every Friday, which provides key insights into the main catalysts for all the major global macro assets throughout the week. The analysis takes a hybrid approach - combining fundamental and technical analysis with charts to enhance your trading experience. Sign up here to receive it directly in your inbox: https://cloud.go.pepperstone.com/week ➡️ Follow us on Telegram for daily market news and insights: https://t.me/s/PepperstoneFX Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Follow FXMAG.COM on Google News
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

Euro To US Dollar (EUR/USD) Has Gone Up! | Hawkish Lagarde Sends (USD) US Dollar Lower! | Oanda

Jeffrey Halley Jeffrey Halley 24.05.2022 12:53
Hawkish Lagarde sends dollar lower EUR/USD leapt 1.30% higher to 1.0690 overnight after the Lagarde comments The US dollar slumped overnight, losing ground against both the G-10 and EM space. That contrasted with a rise in US yields, but equities, bonds and currencies seem to be running their own separate races now. ​ The catalyst was a hawkish blog post by ECB head Christine Lagarde who said rate hikes were on the way in the next few months. That prompted a massive rally by EUR/USD which spread to other currencies. The dollar index slumped 0.90% to 102.09, closing below support at 102.50. That should see the dollar index test 101.00 before the reality of a hawkish Fed reasserts itself. In Asia, China concerns have seen equities fall and some short-covering come into the US dollar, pushing the index back up to 102.25. EUR/USD leapt 1.30% higher to 1.0690 overnight after the Lagarde comments. It has eased back to 1.0665 in Asia but has nearby support now at 1.0650. Initial resistance lies at 1.0700 and then 1.0750 followed by 1.0820, the multi-decade breakout line. A weekly close above the latter is needed to suggest a medium-term low is in place. I believe sustaining rallies above 1.0700 will be challenging though. GBP/USD coat-tailed EUR/USD higher by 0.77% to 1.2585 overnight, easing to 1.2865 in Asia. It now has support at 1.2500, with resistance at 1.2600 and then 1.2650. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM AUD/USD and NZD/USD booked another night of gains, rising the sentiment wave 0.90% higher overnight Higher US yields have kept USD/JPY steady at 127.60 today with initial resistance at 128.00. We would need a large rise in US yields now to offset the weight of long USD/JPY positioning in the nearer term. Failure of support at 127.00 could trigger a capitulation trade potentially targeting the 125.00 support area. Once again, at those levels though, given the trajectory of US and Japan interest rates, being short becomes a dangerous game. AUD/USD and NZD/USD booked another night of gains, rising the sentiment wave 0.90% higher overnight. In Asia, China’s nerves have seen AUD/USD fall 0.40% to 0.7080, and NZD/USD fall by 0.50% to 0.6435. Any rally above 0.7200 or 0.6500 will be challenging though as both currencies remain at the mercy of sudden negative swings in investor sentiment, especially from China. Asian currencies have rallied powerfully overnight, led by a 1.25% gain by the KRW, and 0.75% gains by the THB and TWD. Both USD/CNH and USD/CNY have fallen by 0.50% also overnight. Notably, the MYR and IDR had little to show for the US dollar sell-off. China nerves have already reversed some of those overnight gains by Asia FX, highlighting the low risk appetite and fragile sentiment typifying currency markets and others now. USD/KRW has risen by 0.50% to 1264.50, making the won the worst performer in Asia today. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM The recovery in Asian currencies has been led by stronger CNY fixings from China but is overall, a weak US dollar story. A reassertion of risk aversion, or a jump in US yields, will have the recovery back to square one as quickly as it began. I believe Asian central banks will need to accelerate tightening to stave off medium-term weakness. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
Week Ahead: US Dollar Falls As Growth Fears Rise on Fed Hawkishness

Week Ahead: US Dollar Falls As Growth Fears Rise on Fed Hawkishness

OneRoyal Market Updates OneRoyal Market Updates 23.05.2022 08:24
Weekly Recap The main story this week was the reversal lower in the US Dollar. The Dollar Index closed out its first losing week since the final week of March as recession fears took hold. The reversal was seemingly fuelled by comments from Fed chairman Powell midweek suggesting a more aggressive course of action from the Fed. Powell warned that the central bank is prepared to raise rates above the neutral level, if necessary, to bring inflation down and will not stop until inflation is back at target. With inflation still at elevated levels and with interest rates higher and expected to rise materially in coming months, traders are concerned over the impact on growth. These fears were well reflected this week in the sharp reversal lower in USD. UK inflation was seen hitting 40-year highs last month at 9%, putting BOE rate hike expectations back into focus. The SNB was seen making a U-turn on monetary policy with SNB chairman Jordan warning that the SNB is ready to act on inflation, which is travelling well above the SNB’s target. The release of the ECB meeting minutes this week highlighted the hawkish shift taking place among members, with the market now increasingly pricing in a July rate hike. It was a volatile week for equities with the FTSE ending the week roughly flat (as of writing) after plenty of two-way action. The ASX200, the DAX and the Nikkei ended the week higher while the S&P and the Nasdaq were firmly in the red as Fed rate-hike expectations overtook USD weakness. It was a better week for precious metals with both gold and silver rallying on USD weakness. Oil prices were unable to capitalise on USD weakness, however, as focus remains on the ongoing EU negotiations regarding potential sanctions on Russian oil. While many EU leaders are pushing for an EU-wide ban on Russian oil by year end, the chances of achieving this look unlikely given fierce opposition from Hungary and Greece among others. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Coming Up Next Week US, Eurozone, UK PMIs Traders will get the latest insight into the performance of the factory and non-factory sectors in the US, eurozone and UK. With inflation surging in all three economies and with supply-chain issues remaining a real problem there is a very real threat that these readings highlight weakness. Given the recessionary concerns which have taken centre stage recently, if these readings underperform asset markets are likely to come under pressure over the week. RBNZ Rate decision The RBNZ meeting this week is expected to see the bank hike rates by a further .5%. 20 out of 21 economists polled by Reuters are calling for such a move. Given these hawkish expectations, if the bank hikes by less than .5% NZD will likely come under heavy selling pressure. If a .5% hike is announced, the focus will then be on forward guidance with NZD likely to rally if the RBNZ points to further hikes incoming. FOMC Meeting Minutes The May FOMC minutes this week are expected to highlight the uptick in Fed hawkishness recently. There’s potentially some reduced impact in the wake of recent comments from Fed’s Powell suggesting that the Fed has turned more aggressively hawkish since that meeting. Nonetheless, the details are likely to be firmly hawkish and market volatility can be expected in response to them. Forex Heat Map Coming up This Week Technical Analysis Our favourite chart this week is GBPCHF GBPCHF has been moving lower in a well-defined channel over the correction from 2021 highs. Recently price has been underpinned by support along the 1.2114 level. This has been a major support area since late last year. If price can breach below this level on a weekly closing basis, this would suggest a continuation of the downtrend towards the next big support at the 1.1687 level. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM Economic Calendar – High Impact Another busy data week coming up, key highlights include: US, eurozone and UK PMI readings on Tuesday, US GDP on Thursday and US trade data on Friday. See the calendar below for full schedule.
Declines At The Close Of The New York Stock Exchange, The Drop Leaders Were Nike Inc Shares

Global stocks retreat after rebound in previous session - 24.5.2022 | IFCMarkets

Ara Zohrabian Ara Zohrabian 24.05.2022 14:05
Todays’ Market Summary The Dollar weakening has halted Futures on three main US stock indexes are down Brent is edging lower currently as an agreement on Russian oil imports ban still escapes European Union though German economy minister says he expects EU embargo on Russian oil 'within days'. Gold prices are edging up currently Top daily news Equities are pointing down currently as US Treasury yields inch down while markets rebounded on Monday. Amazon slipped 0.03% amid reports it is planning to sublease some of its warehouse space because the pandemic-fueled surge in online shopping has slowed, Microsoft shares rose 3.2% outperforming market on Monday. Forex news Currency Pair Change EUR USD -0.32% GBP USD -0.04% USD JPY +0.37% AUD USD -0.36% The Dollar weakening has halted currently. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, lost 0.5% on Monday. EUR/USD joined GBP/USD’s continuing climbing Monday while the Ifo institute reported German business sentiment continued to improve in May. Both pairs are down currently. AUD/USD resumed its advancing yesterday while USD/JPY continued its climbing with the yen higher against the Greenback currently and Australian dollar retreating. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Stock Market news Indices Change Dow Jones Index -0.59% Nikkei Index -1.14% Hang Seng Index -1.62% Australian Stock Index -0.58% Futures on three main US stock indexes are down currently ahead of U.S. manufacturing purchasing managers survey report at 15:45 CET with the yield on benchmark 10-year Treasury notes inching down to 2.841%. US stock market reversed the selloff yesterday as President Biden said that he was considering easing tariffs on China. The three main US stock index benchmarks booked daily gains in the range of 1.6% to 2.0% Monday led by mega-cap growth shares. European stock indexes are down currently after closing up Monday led by banking and mining shares while European Central Bank President Christine Lagarde surprised markets by stating about possible rate hike as early as July. Asian indexes are falling today with Hong Kong’s Hang Seng index leading losses while Markit reported Japan's manufacturing activity grew at the slowest pace in three months in May. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM Commodity Market news Commodities Change Brent Crude Oil -0.52% WTI Crude -1.31% Brent is edging lower currently as an agreement on Russian oil imports ban still escapes European Union though German economy minister says he expects EU embargo on Russian oil 'within days'. Prices advanced marginally yesterday. US West Texas Intermediate WTI added 0.01% but is lower currently. Brent gained 0.7% to $113.42 a barrel on Monday. Gold Market News Metals Change Gold +0.15% Gold prices are edging up currently. Spot gold yesterday closed up 0.39% at $1852.74 an ounce on Monday.
Navigating Adobe's Earnings with Options: Opportunities and Risks for Investors

New Zealand dollar rally fizzles | Oanda

Kenny Fisher Kenny Fisher 24.05.2022 14:12
The New Zealand dollar has reversed directions after a solid 3-day rally. In the European session, NZD/USD is trading at 0.6432, down 0.55% on the day. China jitters weigh on NZ dollar New Zealand’s number one trading partner is China, and it’s no exaggeration to say that when China sneezes, New Zealand catches a cold. China has tenaciously implemented a zero-tolerance policy for Covid, which has meant lockdowns that have confined millions of residents. Unsurprisingly, this has dampened growth in the world’s number two economy. The Covid restrictions were in full force in April, and UBS has projected that China’s economy plunged by 8.0% in Q2 and has downgraded China’s 2022 GDP to 3.0%, down sharply from 4.2%. Investors should not assume that China’s economy will re-energize once the Covid restrictions are eased – UBS is warning that China does not have a clear exit strategy from its current stringent Covid policy, which will hamper a recovery. The downgrade in China’s GDP (JP Morgan also lowered its forecast from 4.3% to 3.7%) has soured sentiment towards the New Zealand dollar. Over in New Zealand, retail sales for Q1 came to a screeching halt. The headline figure declined by 0.5%, down from 8.3% in Q4 2020, while core retail sales came in at zero, down from 6.8%. The weak numbers have contributed to today’s New Zealand dollar’s descent. The Reserve Bank of New Zealand will be in the spotlight on Wednesday when it holds a policy meeting. The central bank is expected to raise rates by 50-bps for a second straight month. This would bring the cash rate to 2.0%, which is considered a “neutral” stance. It’s noteworthy that the cash rate hasn’t been at the neutral level since 2015, so the RBNZ is moving into rarified air. The RBNZ will likely continue its rate-tightening cycle to 3.0% in order to curb spiralling inflation, and at tomorrow’s meeting, the Bank will likely state that more hikes are on the way. . NZD/USD Technical NZD/USD has support at 0.6352 and 0.6287 There is resistance at 0.6475 and 0.6540 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
What Is Going On Financial Markets Today? Russia Will Not Resume Deliveries Of Gas

(EUR) Euro Rises To 1-Month High On Christine Lagarde (ECB) | Oanda

Kenny Fisher Kenny Fisher 24.05.2022 19:53
The euro has extended its gains on Tuesday. EUR/USD has broken above the 1.07 line for the first time since April 26th. ECB’s Lagarde sends euro soaring The euro was red hot on Monday, as EUR/USD jumped 1.29%, its best one-day showing this year. The upswing was courtesy of ECB President Christine Lagarde, who detailed the Bank’s rate plans in a blog post. This unusual move certainly caught the attention of the markets, who gave the euro a massive thumbs-up. Lagarde has been a strong supporter of an accommodative policy and rather dismissive about inflationary pressures. However, Lagarde has had to recalibrate as eurozone inflation continues to accelerate. The war in Ukraine has resulted in soaring oil and food prices, and there are no indications that the conflict will end anytime soon. The ECB has been sending signals that it planned to tighten policy, and Lagarde’s post confirms the shift in policy. The ECB will embark on its rate-tightening cycle in July and will exit negative rates in September. Interestingly, the Bank will continue its QE programme, which raises the question of whether the ECB’s moves are really that aggressive. Perhaps the new stance is mostly symbolic until we see a significant increase in rates. Judging by the euro’s sharp climb, however, the markets sense that Lagarde is signalling a significant shift from the ECB. The euro is flexing some muscle, but I would maintain that risk is tilted to the downside in the medium term. The US dollar has lost ground against most of the majors over the past few days, as fears of a US recession have escalated. Still, the Fed is committed to significant tightening in the next few months, and higher US rates should provide a boost for the greenback. . EUR/USD Technical The euro is putting pressure on resistance at 1.0736. Above, 1.0820 is a multi-decade breakout line There is support at 1.0648 and 1.0519 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Romanian GDP Slows Beyond Expectations: Revised Forecast and Economic Outlook

Hawkish European Central Bank (ECB)? (Euro To British Pound) EUR/GBP – Further gains to come? | Oanda

Craig Erlam Craig Erlam 24.05.2022 19:57
Hawkish ECB boost the single currency The ECB will become the latest central bank to concede on the inflation argument and raise rates in July and September The euro has caught a strong bid against the pound in recent days on the back of some very hawkish commentary from the ECB and poor economic data in the UK. The ECB will become the latest central bank to concede on the inflation argument and raise rates in July and September, as per President Christine Lagarde’s blog, although some support an even more aggressive approach. That’s boosted the euro at a time when the UK economy is facing the prospect of a recession, with PMI data today highlighting the struggles already appearing in the all-important services sector. EURGBP has rallied strongly on the back of this, holding above the 200/233-day SMA band in the process and pushing a breakout of the recent highs. It also broke above the 55/89-period SMA band on the 4-hour chart in the process which has capped its rallies over the last week. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM The next test for the pair is 0.86 and 0.8650 which has been a key area of resistance on numerous occasions over the last year, with 0.87 potentially offering further resistance above. Eventually, the euro area and others will likely be dragged into the recession conversation which may see the bullish case wane but for now, it’s interest rates that are dominating the conversation and giving the euro a major lift. Follow FXMAG.COM on Google News This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
ECB's Dovish Shift: Markets Anticipate Softer Policy Guidance

Can Japanese Yen Finally Go Up!? US Dollar To Japanese Yen (USD/JPY) – Head and shoulders breakout? | Oanda

Craig Erlam Craig Erlam 24.05.2022 20:03
Major correction on the cards? The rally in USDJPY from early March to early May was huge, driven by a combination of a soaring greenback and a BoJ determined to support its yield curve control policy tool. But the last couple of weeks have brought some relief in the pair, driven primarily by the dollar paring gains against the broader market. And the pair may have just broken below an interesting technical support level that could signal a more significant correction. A head and shoulders appears to have formed over the last month and the break of the neckline is potentially in progress. This also comes immediately following the break of the 200/233-period SMA band on the 4-hour chart which did provide support for most of the last week before finally giving way. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM If this breakout holds, it could potentially point to quite a significant correction based on the size of the head and shoulders formation and the projections that could indicate. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Sunrun's Path to Recovery: Analysts Place Bets on High Growth Amidst Renewable Energy Challenges

Japanese yen rises on strong BoJ CPI | Oanda

Kenny Fisher Kenny Fisher 24.05.2022 23:25
After several days of trading sideways, the yen has posted strong gains on Tuesday. In the North American session, USD/JPY is trading at 126.58, down 1.02% on the day. The yen is currently trading at its highest level in five weeks. BoJ CPI stronger than expected The Bank of Japan’s preferred inflation gauge, BoJ CPI, surprised the markets with a gain of 1.4% in April, higher than the consensus estimate of 1.0%. The index was up from 1.1% in March and is reflective of inflation moving higher. Of course, Japan is not facing the surging inflation which has hit the US, UK and other developed economies, but it is a significant change nonetheless, after years of deflation. Japan’s CPI excluding fresh food is expected to remain above 2%, which is the BoJ’s inflation target. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM While other major central banks have tightened policy in response to spiralling inflation, the BoJ continues to insist that cost-push inflation will ease. The Bank has tenaciously defended its yield curve control, maintaining that ultra-low rates are critical in order to support the fragile economy. The BoJ has not hesitated to intervene in order to cap JGB rates but has not made any moves to prop up the yen, which hit 20-year lows earlier this month. The yen may have flexed some muscles, but I would still consider yen risk tilted to the downside. The US economy remains in good shape, and the US dollar is also a safe-haven asset. If the Ukraine war continues to cause increases in energy and food prices, risk appetite would fall and investors would likely flock to the safety of the US dollar. The yen is at the mercy of US yields, which have generally been on an upswing over the past few months, pushing the yen sharply low. USD/JPY Technical USD/JPY has broken below support at 1.2759 and 1.2672. Below, there is support at 1.2550 There is resistance at 1.2825. Above, 1.2947 is protecting the 130 level   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
GBP: Softer Ahead of CPI Risk Event

Eurozone wages are on the rise (finally) | ING Economics

ING Economics ING Economics 25.05.2022 07:32
The ECB negotiated wages indicator increased more than expected in the first quarter. This puts pressure on the ECB to act quickly in normalising monetary policy A 50 basis point hike from the ECB in July is not off the table   The most reliable indicator of where wages are currently headed was released this morning and rose from 1.5% YoY to 2.8% YoY, a notable jump that was much larger than anticipated. The combination of a tight labour market and high current inflation provides a strong argument for unions to demand higher wages and this seems to be feeding into results at the moment. With important German negotiations only happening at the end of the year, there seems potential for higher wage growth from here on.  While the increase alleviates the blow to households from current high inflation rates, we do want to stress that real wage growth remains deep into negative territory at the moment. This still leads to a substantial weakening of household consumption in the months ahead, according to our expectations. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM For the ECB though, this is key from the point of view of second-round effects emerging. As mentioned above, we’re still far from a wage-price spiral emerging, but ECB chief economist Philip Lane had mentioned that wage growth at 3% is consistent with reaching the goal of 2% inflation in the medium term. Reaching this more quickly than expected could result in the ECB becoming more concerned with inflation trending above target for longer. Like the PMI that was released this morning, this adds a hawkish argument to the debate about how quickly the ECB should increase rates from here on. In our view, a 50 basis point hike in July is not off the table. Read this article on THINK TagsInflation GDP Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
JPY: Assessing the FX Intervention Zone and Market Conditions

What's It Going To Be Czech Krone (CZK), NZD, Euro (EUR), USD? | FX Daily: How hawkish is too hawkish? | ING Economics

ING Economics ING Economics 25.05.2022 08:55
The RBNZ signalled a terminal rate around 4.0% in 2023, following a 50bp hike today. We suspect the rate projections may be too hawkish, but this is a story for the long run: for now, 50bp hikes should keep the NZD on track for a return to 0.70 by year-end. Elsewhere, USD may struggle to recover, but a move to 1.08-1.09 in EUR/USD is not our base case The Reserve Bank of New Zealand hiked rates by another 50bp to 2.0% today. Pictured: RBNZ Governor Adrian Orr USD: Risk sentiment remains the primary driver, but downside risks are smaller now The shockwaves that originated from the slump in US tech stocks yesterday seem to have been absorbed without too much trouble by global equity markets, although more signs of sentiment instability did take some steam off the rally in pro-cyclical currencies. The dollar has found some stabilisation after a negative start to the week and should, for now, continue to trade primarily in line with swings in global risk sentiment. Yesterday, new home sales in the US dropped much more than consensus, a first sign of how higher interest rates are starting to impact the US economy. The data also increases the significance of today’s mortgage application numbers, where another big drop (surely possible given the rising mortgage rates) would likely fuel concerns about an economic slowdown. After all, construction makes up 4% of GDP and retail sales are correlated with housing activity. It may be too soon for the dollar to start discounting a higher risk of US slowdown via the Fed rate expectations channel, but some grim mortgage application figures could contribute to the dollar's softish momentum if equities enjoy a session in the green as futures seem to suggest this morning. At the same time, we think that the downside potential for the dollar is shrinking, especially given a more balanced positioning after a widespread position squaring and a still supportive Fed story. When it comes to the Fed, markets will surely take a close look at the minutes from the May FOMC meeting this evening to gauge how much consensus there was about multiple 50bp increases over the summer and whether there were some dissents about ruling out 75bp hikes. We’ll also hear from Lael Brainard today. EUR: A move to 1.08-1.09 would be too stretched EUR/USD broke the 1.0700 mark yesterday, as markets probably feared a wider drop in the eurozone PMIs, which instead came in only slightly below consensus. The combination of some easing in stagflation-related concerns, hawkish re-pricing of ECB rate expectations, and a weak dollar momentum have all contributed to the recent EUR/USD rally. Now, it appears most of the positives are in the price, especially considering that markets are already pricing in 100bp of ECB tightening by year-end, and we think a consolidation looks more likely than an extension of the rally to the 1.08-1.09 region. The eurozone calendar doesn’t include market-moving data releases today, but there is a long line of scheduled ECB speakers to keep an eye on: Christine Lagarde and Klaas Knot in Davos, Robert Holtzmann, Pablo Hernández de Cos and Philip Lane elsewhere. NZD: Has the RBNZ gone too far with rate projection? The Reserve Bank of New Zealand hiked rates by another 50bp to 2.0% today – in line with market expectations – but delivered a substantial hawkish surprise with its updated rate projections, which signalled an even more aggressive front-loading of monetary tightening. The Bank now forecasts the policy rate at 3.25-3.50% by year-end (up from 2.25-2.50% in the February projections) and around 200bp of total tightening by the end of 2023 – therefore signalling a terminal rate around 4.0%. We start to suspect that the RBNZ might have gone too far on the hawkish side with its rate projections and could struggle to deliver on them, especially if we see a considerable cooling-off in the New Zealand housing market and a generalised global slowdown. That, however, is a story for the long run. In the short term, we have a near-guarantee that the RBNZ will deliver two more half-point hikes this summer, which should keep rate expectations anchored to the new RBNZ projections and allow NZD to maintain a wide rate differential against all other G10 currencies. Ultimately, this should fuel a return to 0.7000 in NZD/USD by 4Q22 or 1Q23 at the latest, in our view. However, the short-term outlook for NZD (and its ability to consolidate above 0.6500) remains strictly tied to swings in global risk sentiment and the Chinese economic outlook, which remains a major source of uncertainty. CZK: CNB intervenes rather verbally, but that may change soon Daily banking sector liquidity data over the past two weeks, during which the CNB has officially been intervening in the FX market, do not suggest significant central bank activity. This is in line with our expectation that the CNB's initial intervention was mainly verbal as in March. This was confirmed in an interview last week by Vice Governor Tomáš Nidetzký, who indicated that the market does not want to fight the CNB. Nevertheless, the koruna continues to lose support from the interest rate differential, which has returned to the level of early May. Thus, in our view, the next CNB dovish move (for example the appointment of new board members, new governor forward guidance) will require a more aggressive approach by the central bank in the FX market if it is serious about intervening. We continue to expect the central bank to keep the koruna below 25 EUR/CZK and, given the again surprisingly high CPI prints, may try to get the koruna closer to 24. However, we still don't have much indication of what will happen with interventions after 1 June, when the new board's term begins. Aside from the name of the new governor, we have no indication yet as to who else will be appointed to the board. In our view, this will be a topic for next month and we expect to know the composition of the new board before the CNB meeting in June. Read this article on THINK TagsRBNZ NZD GBP CZK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Euro To British Pound (EUR/GBP) Keeps High Levels! USD/CHF And AUD/USD Have Been Consequently Rising. Swiss Franc And Australian Have Strengthened | Orbex

Euro To British Pound (EUR/GBP) Keeps High Levels! USD/CHF And AUD/USD Have Been Consequently Rising. Swiss Franc And Australian Have Strengthened | Orbex

Jing Ren Jing Ren 25.05.2022 09:13
USDCHF struggles for bids The Swiss franc rallied further after the SNB said it would tighten if inflation persisted. The pair has given up more than half of its gains from the past month. A fall below 0.9710 which sits on the 30-day moving average has put the bulls on the defensive. The discount and the RSI’s repeatedly oversold condition may attract some bargain hunters, but buyers need to clear the support-turn-resistance at 0.9710 before a rebound could take shape. On the downside, a break below 0.9570 would deepen the correction to 0.9500. AUDUSD tests resistance The Australian dollar continues to recover as commodities bounce higher. The rebound gained traction after it broke above the first resistance at 0.7050. A combination of short-covering and fresh buying has sent the aussie to the key supply zone near 0.7160. A bullish close would send the pair 100-pip higher to the last hurdle at 0.7260, the bears’ stronghold on the daily chart. Strong selling pressure could be expected due to bearish inertia. The psychological level of 0.7000 is the first support. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM EURGBP attempts bullish reversal The euro continues higher fuelled by the ECB’s latest hawkish hint. Sentiment stayed bullish after the pair found support over 0.8400. A pop above 0.8530 suggests that sellers scrambled to cover their positions. The RSI’s overbought situation may temper the upward drive momentarily. As the dust settles, the bulls may look to accumulate above 0.8500 ahead of their final breakout attempt. A close above 0.8620 could trigger an extended rally above 0.8720, setting the tone for a bullish reversal in the medium-term. Follow FXMAG.COM on Google News
USD/JPY: Japanese Authorities Signal Intervention Amid Rapid Currency Appreciation

US stocks snap 7-day downtrend. Commodity stocks in wheat, energy and lithium brighten | Saxo Bank

Saxo Bank Saxo Bank 24.05.2022 14:34
Summary:  A technical rally occurred overnight, seeing the S&P500 gain after 7 days of declines, while Agriculture and Energy stocks shone the most, gaining even more momentum proving they are an inflation hedge. In quality tech, Apple shares rose 4% with long-term investors dripping in buy orders. Meanwhile, in big banks JPMorgan gained 6% upon forecasting net interest income to rise, which supported gains in Bank of America, Citigroup. We don’t think the market is at breaking point yet. However see Commodity gains intensifying and offering further upside, as the world worries global wheat supplies could run out in 10 weeks, while demand for lithium batteries rises seeing lithium companies upgrade their earnings and rally. What’s happening in markets that you need to know Big picture themes? Of the Equity Baskets we track across different sectors, we can see select risk appetite is starting to come back in to the market; China’s little giants are up the most month-to-date, supported by China’s fresh interest rate cut. Meanwhile, Cybersecurity stocks were up overnight (but are still down 24% YTD). Year-to-date though, our high conviction asset class, Commodities continues to see the most growth, followed by Defence. In the S&P500 oversold Ag and Bank stocks shine; Agri and Farm Tech stocks were up the most overnight, followed by Diversified Banks. In terms of standout stocks; Ross Stores and Deere (DE) rose the most (9%, 7%), after being two of the most oversold stocks last week. In S&P500 Deer was THE most oversold member. Deer makes 65% of its revenue from Agricultural equipment and selling turf. Earnings are expected to grind higher in 2022 and Deer pays a small dividend yield (1.25%). Asia Pacific’s stocks are trading mixed following more Tech disappointment in the US. While risk sentiment was upbeat overnight on Wall Street, Asia Pac’s markets turned most lower following Snap’s warning that it is unlikely to meet revenue and profit forecasts. Tech sentiment eroded again and further consumer staples earnings results this week are keeping investors cautious. Australia’s ASX200 trades flat, weight by tech falling,  with Block (SQ) down 6% after Bitcoin trades under $30k (Block makes most of its money from BTC transactions). Meanwhile, ASX lithium stocks continue to surge, supported by the new Australian government’s EV stimulus, seeing Liontown (LTR), Allkem (AKE), MinRes (MIN), Pilbara (PLS) dominate the leaderboard and rise 3-4%. Japan’s Nikkei (NI225.I) is down 0.3% led by Recruit (6098) which operates the popular HR engine “Indeed” and company information website “Glassdoor”. Singapore’s STI index (ES3) was however up 0.2% despite a record high inflation and a potential chicken-price shock. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Chinese and Hong Kong equites see lackluster trading despite incremental stimulus measures from the State Council and Biden’s remarks on reviewing tariffs on goods from China.   The attempt to rally in the opening hour in response to positive news of 33 stimulus measures from China’s State Council failed.  Overnight news that Biden will discuss with Treasury Secretary Yellen about reviewing tariffs on goods from China as part of the Biden administration’s effort to ease U.S. inflationary pressures did not incur much excitement. Hang Seng Index (HSI.I) fell 0.8% and CSI300(000300.I) was 0.3% lower. Among the 33 measures was a reduction of RMB60 billion in the purchase tax on passenger cars Great Wall.  Great Wall Motor (02333), Geely (00175) and Guangzhou Automobile (02238) rose 3% to 10% while shares of EV makers fell 3%-9%.  Although reporting a larger than expected 159% YoY increase in revenues and a 30bp improvement of gross margins to 10.4% in Q1, XPeng’s (09868) share fell almost 9% on cautious Q2 guidance.  What to consider? Fed speakers remaining flexible. Fed’s Bostic backed a series of 50bps rate hike moves overnight but hinted at a pause in September if inflation comes down but also opened doors to more aggressive moves if inflation doesn’t cool. Fed’s George said she expects the central bank to raise interest rates to 2% by August (which also means about 100-125bps of rate hikes from the current 0.75-1% rates or 2-3 50bps rate hikes). While the base effects may make headline inflation appear to be softening into the summer, real price pressures aren’t going anywhere and Fed’s hiking pace is likely to continue to prove to be slow. AUD and NZD unable to sustain gains. A fresh slide was seen in NZD this morning following the unexpected decline in retail spending reported today. RBNZ decision is due tomorrow  (in early Asian hours) and it is still a close call between 25 and 50bps rate hike. But it’s more important to note that RBNZ is way ahead of other central banks and getting close to neutral faster than others, which means room for further upside in NZD is limited. AUDUSD is also back below 0.7100 and remains prone to a reversal in risk sentiment more than any domestic developments. While the AUDUSD rose to a 3-week high yesterday, supported by the Australian Labor Government being sworn in after winning the election and bringing in an EV policy ($2k tax incentives), vowing to keep Defense Spending at over 2% of GPD and pledging to offer more childcare support to keep employment high. The USD will likely remain favored for now as risk aversion returns and cut the rally of the AUD.  ECB getting ready to move to exit negative rates. ECB President Lagarde’s comment that the central bank is likely to exit negative rates by the end of the third quarter put a massive bid into the EUR overnight but the pair turned lower from 1.0700 with focus on Fed Chair Powell and PMIs due today. With Fed comments getting repetitive, there is room for ECB’s hawkishness to support the EUR even as Lagarde continues to downplay the possibility of a 50bps rate hike. Germany’s economy shows signs of unexpectedly strengthening in May. Germany’s IFO reading was out at 93.0 versus prior 91.9 in April. The increase is mostly explained by an improved current assessment. The expectations component is almost unchanged and close to levels last seen at the start of the pandemic. Several factors are pushing respondents to be careful regarding the future: supply chain frictions, the Shanghai lockdown, persistent inflationary pressures and lower real disposable incomes of households etc. The German economy will not plunge as it did at the start of the pandemic, of course. But we think that risks of a stagflation are clearly titled on the upside. We will watch closely the first estimate of the May PMIs this morning to have a better assessment of the economic situation in Germany and in the rest of the eurozone.  Potential trading ideas to consider? Singapore’s inflation pain is rising. Core CPI was at a decade high in April at 3.3%, and this is still not a peak. Singapore’s national lunch meal chicken rice is set to get expensive as Malaysia is halting exports of chicken. About 34% of Singapore's chicken imports come from Malaysia. While alternate sources of fresh chicken and options such as frozen chicken may be possible, this is not the last inflation shock to hit the island economy. Vegetable prices are also on the rise due to shortages of supply and the high fertilizer prices. In times like this, we would reiterate the possible inflation hedges remain gold, REITs and commodities. In summary, it is important to look for value investments or stocks that have a solid cash flow generation ability and pricing power but still priced below their fair value. The plot for investing in Lithium thickens.Lithium remains one of our preferred metal exposures for 2022 for upside. Albemarle Corp, the world’s largest lithium producer upgraded its outlook for the second time this month expecting higher lithium prices and demand to further boost their sales. We’ve seen many EV companies sell out of some of their electric vehicles, and this highlights the lack of supply in battery metals, which is also pushing up the lithium price. Albemarle Corp, expects sales to now be as high as $6.2 billion this year, up from its previous estimate of up to $5.6 billion. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM If have a long time horizon for investing, you could consider dripping money into the market (this is called dollar cost averaging). Remember Shelby Davis said you can make most of your money in a bear market, you just don’t realize it at the time. But the key is to look at quality names that are in a position to return cash to shareholders. So if you want to be in tech for example, you could look at names like Apple, Microsoft and Google, who lead the S&P500 and Nasdaq indices and are growing their earnings and this is likely to continue over the next several years and longer term. The idea is that names like these, will likely lead a secular bull market, once the Market eventually begins to recover. And you ideally want to be in names with growing earnings, rather than throwing darts at some of those names with patchy results that are akin to Ark innovation ETF for example. China’s State Council announced 33 stimulus measures.  An additional VAT credit refund of RMB140 billion brings the overall target of tax refunds, tax cuts and fee reductions to RMB2.64 trillion in 2022.  China is also introducing a reduction of RMB60 billion (equivalent to about 17% of auto purchase tax last year) in tax on passenger car purchases.  The Government is increasing its supports to the aviation industry and railway construction via special bond issuance and loans and is rolling out a series of energy projects.  It is doubling the lending quota for banks to lend to SMEs and allow certain borrowers to postpone repayments.  The State Council also reiterates its support to promote legal and compliant listings of platform companies in domestic as well as overseas markets. Key company earnings to watch this week: Tuesday: Kuaishou Technology, Intuit, NetEase, AutoZone, Agilent Technologies Wednesday: Bank of Nova Scotia, Bank of Montreal, SSE, Acciona Energias Renovables, Nvidia, Snowflake, Splunk Thursday: Royal Bank of Canada, Canadian Imperial Bank of Commerce, Lenovo, Alibaba, Costco, Medtronic, Marvell Technology, Baidu, Autodesk, Workday, VMware, Dell Technologies, Dollar Tree, Zscaler, Farfetch Friday: Singapore Telecommunications   For a global look at markets – tune into our Podcast.  Follow FXMAG.COM on Google News Source: Saxo Bank
China's Deflationary Descent: Implications for Global Markets

(USD) US Dollar’s Orderly Retreat Continues | Having A Look At EUR/USD, GBP/USD And AUD/USD | Oanda

Jeffrey Halley Jeffrey Halley 25.05.2022 14:09
Recession jitters send US dollar lower The US dollar eased once again overnight, as US recession fears continue to lead to a repricing lower of Fed tightening expectations. With quantitative tightening starting next week and no signs of inflation falling, that may be more hope than reality. Nevertheless, one must respect the momentum in the short term, and the US dollar bull market correction still looks to have legs in it. ​ The dollar index fell by 0.32% to 101.77 overnight, but Asia is doing its usual countertrend moves today, pushing the dollar index back up to 101.95. The multi-year breakout line is at 102.40 today, forming initial resistance, while 101.50 and 101.00 loom as immediate supports. EUR/USD continued edging higher overnight, rising 0.42% to 1.0735 before falling by 0.28% to 1.0705 in Asia. Momentum already appears to be waning for EUR/USD, but I do not rule out at least a test of 1.0750 and 1.0825, the multi-decade breakout line. A weekly close above the latter is needed to suggest a medium-term low is in place. GBP/USD fell overnight, crushed by EUR/GBP buying, poor data and tax and political risk. It finished 0.42% lower at 1.2535 where it remains in Asia today. Sterling faces political risks, outlined above, today, and these will limit gains. It now has support at 1.2470, with a double top now at 1.2600. Even if the US dollar sell-off continues, sterling will remain euro’s poor cousin. AUD/USD remains steady at 0.7100 today, having probed the downside overnight Lower US yields saw USD/JPY fall 0.85% to 126.85 overnight where it remains in Asia, just below support, now resistance, at 127.00. A deeper selloff, potentially targeting the 125.00 support area, remains entirely possible given the market is still clearly very long USD/JPY. Once again, at those levels though, given the trajectory of US and Japan interest rates, being short becomes a dangerous game. AUD/USD remains steady at 0.7100 today, having probed the downside overnight. AUD/NZD buying is capping gains for now. A hawkish RBNZ today has sent the Kiwi dollar flying, NZD/USD jumping 0.65% to 0.6500. The rally is already showing signs of fatigue and a weekly close above 0.6550 is required to signal a potential medium-term low. Support is distant at 0.6420. Asian FX continued gaining against the US dollar overnight, but a stronger greenback in Asian time has erased those gains. A neutral USD/CNY fixing by the PBOC has given Asian markets little to go on today, with USD/CNY, USD/CNH and USD/THB rising by around 0.30%, while USD/KRW has risen by 0.10%. An impending Bank of Korea hike on Friday should limit the won’s weakness. The Malaysian ringgit looks like the most vulnerable regional currency right now, USD/MYR trading near 4.4000 today. With policy tightening gaining momentum among other Asian central banks, today’s benign inflation data reinforced that outlook. USD/MYR could potentially test 4.4500 by early next week. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
Navigating the New Normal: Central Banks Grapple with Policy Dilemmas

Hawkish RBNZ has strengthened the NZD. Is there more to come?

Alex Kuptsikevich Alex Kuptsikevich 25.05.2022 12:07
More and more developed central banks are coming out with the pace of policy tightening in the USA. This morning the Reserve Bank of New Zealand raised its rate by 50 points to 2.0%, repeating its move in April. Analysts expected the decision, but NZDUSD strengthened by 1.4% to levels above 0.6500 hours after the decision. Since the beginning of last week, the NZDUSD has shown substantial gains after touching levels near 0.6200 Buyers were attracted by comments from the RBNZ on its willingness to continue to tighten monetary conditions. In today’s commentary, policymakers point out that raising the rate sooner and faster reduces the risk that inflation becomes sustainable. In its very hawkish comments, the RBNZ hints at a willingness to slow economic demand, i.e. slow growth. Since the beginning of last week, the NZDUSD has shown substantial gains after touching levels near 0.6200. Technical analysis points to a relatively bullish outlook for the pair. The RSI index has reversed to growth on the weekly timeframes after touching oversold levels. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM RSI and the price chart also indicates the potential for further growth On the daily charts, the bullish divergence of the RSI and the price chart also indicates the potential for further growth. The NZDUSD has corrected 23.6% from the February 2021 peak to the early May 2022 bottom, potentially paving the way for a stronger recovery towards 0.6700 due to the latest bounce. However, with the RBNZ’s resolve and the country’s favourable export conditions, we could well see the beginning of an extended kiwi trend which could return to 0.7200 in the next 12 months. The RBNZ example looks like one of the first indications of a broader trend, where other global central banks will adopt the Fed’s speed. Possibly they can surpass it, as they have done so many times in history, which would form a retreat of the dollar after almost a year of gains. Follow FXMAG.COM on Google News
TEST

Podcast: Bubble sectors are dragging hard on this market | Saxo Bank

Saxo Bank Saxo Bank 25.05.2022 14:38
Summary:  Today we look at the normally high-beta bubble sectors continuing to weigh very heavily on the US equity market, even as the S&P 500 managed to pull solidly off the lows yesterday. We continue to highlight the "Bermuda triangle" of Tesla-ArkInvest-Crypto as an ongoing contagion risk. We also look at the market impact of a trio of weak US economic data points, the latest on crude oil and natural gas, FX moves and the status of the US dollar, upcoming earnings including Nvidia and Snowflake, and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast and have a look at today’s slide deck. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Saxo Bank   Follow FXMAG.COM on Google News    
Industrial Metals Outlook: Assessing the Impact of China's Stimulus Measures

Will US Dollar To Canadian Dollar (USD/CAD) Plunge? Canadian dollar (CAD) eyes retail sales | Oanda

Kenny Fisher Kenny Fisher 26.05.2022 15:48
The Canadian dollar is drifting just above the 1.28 line, but that could change in the North American session, with the release of Canada’s retail sales for March. The headline figure is expected to jump to 1.4% MoM, after a negligible gain of 0.1% in April. Core retail sales is projected to come in at 2.0%, little changed from the previous reading of 2.1%. A stronger-than-expected reading would likely boost the Canadian dollar, while an underperforming release would raise questions about the recovery and could push the currency lower. FOMC minutes soothe market nerves The FOMC minutes, released on Wednesday, didn’t contain any surprises, which was just fine as far as the markets were concerned. Investors have become increasingly nervous over the spectre of a recession in the United States. Recent data is pointing to a possible slowdown, at the same time that the Federal Reserve has embarked on an aggressive rate-hike cycle which will slow the economy. With inflation still not showing signs of peaking, there have been calls from some Fed officials to deliver a super-super-size 75 bps hike. To the relief of the nervous markets, the minutes appeared to put to rest that drastic scenario, as the Fed signalled that it will hike by 50 bps in June and July, followed by a pause in September. This would allow the Fed to monitor the effects of the June and July hikes on the economy and whether inflation is finally easing. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM The US dollar showed modest gains after the minutes were released, but we are seeing limited movement across the majors today. The dollar index rose slightly to 102.07, but has retreated to 101.83, as resistance at the multi-year breakout line of 102. 35 held firm. There is support at 101.50 and 101.00. USD/CAD Technical There is resistance at 1.2866 and 1.2955 USD/CAD has support at 1.2750 and 1.2661 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
(USD/CNH) Yuan Could Fall Below 7.10 Per US Dollar (USD) In The Next Two Months | FxPro

(USD/CNH) Yuan Could Fall Below 7.10 Per US Dollar (USD) In The Next Two Months | FxPro

Alex Kuptsikevich Alex Kuptsikevich 26.05.2022 11:56
The yuan has been losing 1.6% in the past two days amid fears of an economic slowdown. This is a solid move compared to how unexpected the bad news was. In our opinion, the appreciation of the last two days should be seen as a continuation of the trend that started at the beginning of April. At that time, the renminbi definitively went against the current and succumbed to the Dollar’s general appreciation, and this weakening accelerated sharply at the end of April. The renminbi recovered some losses from May 12th to 24th, but it was just a recharge for yuan bears. USDCNH - US Dollar To Chinese Yuan The depth of the retreat in the USDCNH coincided with a classic Fibonacci retracement of 61.8% of the initial move. China’s slowdown leads to a loosening of monetary policy, and Xi Jinping’s worrying comments set up markets that could see more economic measures in the coming days or weeks. This is especially important for the Chinese leader as 2022 is an election year, and the authorities will therefore try to create as favourable a macroeconomic backdrop as possible. A weaker CNY could give the Chinese economy a helping hand to boost exports. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM   In addition, the fact that monetary policy in China and the US is heading in opposite directions leads to a weaker renminbi. According to the psychoanalysis, the USDCNH could now target levels around 7.15 - the highs for 2019 and 2020 - where the 161.8% level of the move mentioned above also passes and where the renminbi could reach mid-July. Follow FXMAG.COM on Google News
Fed's Bowman Highlights Potential for More Rate Hikes; German Industrial Production Dips to 6-Month Low

Having A Look At Australian Dollar And New Zealand Dollar Against USD - (AUD/USD) & (NZD/USD) - 27/05/2022| Jason Sen (DayTradeIdeas)

Jason Sen Jason Sen 27.05.2022 09:31
AUDUSD finally tests very strong resistance at 7135/55. Shorts need stops above 7175. First support at 7060/50 for some profit taking on shorts before the weekend with better support at 7020/10. Longs need stops below 7000. NZD/USD - New Zealand Dollar To US Dollar NZDUSD shorts at strong resistance at 6505/25 need stops above 6545. A weekly close above here is a buy signal for the start of next week. Shorts at strong resistance at 6505/25 target 6475 & 6450/40, perhaps as far as 6410/00. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk
Expectations of decent sales during holiday season have let Best Buy gain

What's Fed Going To Do!? Which Way Will USD Go? Bitcoin Price (BTC/USD) Is Still Near $30K | Citi says buy the dip in European & EM stocks! | MarketTalk: What’s up today? | Swissquote

Swissquote Bank Swissquote Bank 27.05.2022 10:18
Fed minutes released on Wednesday weren’t as hawkish as many investors feared: the Fed deciders mostly agreed that inflation is too high and labour market is too tight and that they should raise the rates by 50bps for the next two meetings. But, there was no sign that the Fed would go down the 75bp hike road. US Indices, EUR/USD And Gold Price US indices gained for the second day as the FOMC minutes helped improving the investor mood. Nvidia jumped. But the futures are slightly in the negative at the time of writing, as the rally in energy prices certainly throw a shadow on the latest optimism, keeping the inflation worries tight, as the soaring energy prices are one of the major responsible for the skyrocketing inflation. The barrel of US crude rallied above the $115 mark, and consolidates above this level this morning. The US dollar continues softening, the EURUSD tests 1.0750 offers, gold remains bid above the 200-dma though with a fading positive momentum. Turkish Lira (TRY) The lira, on the other remains, and should remain under decent negative pressure as the central bank insists keeping its policy rate at 14% level. And finally, Bitcoin slides below the $30K mark as the ECB points to financial stability concerns due to cryptocurrencies. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM Watch the full episode to find out more! 0:00 Intro 0:32 Fed is not 'that' hawkish after all! 2:54 Market update 4:19 Dark clouds above our head 5:17 Citi says 'buy the dip' in European & EM stocks 7:14 I say 'be careful' with Turkish BIST & the lira 9:00 FX, commodity update: EUR, Gold and Bitcoin Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. Follow FXMAG.COM on Google News
US Nonfarm Payrolls Disappoint: Impact on Dollar and EUR/USD Analysis

Australian Dollar To US Dollar (AUD/USD) Climbed To A High Last Seen On May 6 | ICM.COM

ICM.COM Market Updates ICM.COM Market Updates 27.05.2022 08:40
AUD/USD rose to the high of 0.7134 on Friday's Asian session following the release of Retail Sales data that matched market forecasts. The market assumes that it is due to the fresh monthly low of the US Dollar Index (DXY). How Weak US Dollar (USD) Can Affect AUD/USD? The weakness of the US Dollar Index may lift AUD/USD ahead of the US Core Personal Consumption Expenditure (PCE) Price Index for April later today, expected at 4.9% YoY versus 5.2% prior. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Follow FXMAG.COM on Google News
RBA Pauses Rates as Australian Dollar Slides; ISM Manufacturing PMI in Focus

Forex (FX) Daily: Dollar’s (USD) downside risks are shrinking | What About (EUR) Euro, (GBP) British Pound And (HUF) Hungarian Forint? | ING Economics

ING Economics ING Economics 27.05.2022 10:16
We think that the combination of a material improvement in the global risk environment and further USD-adverse widening of short-term rate differentials is unlikely, and therefore expect the (now less overbought) dollar to find a floor soon. This means that a EUR/USD return below 1.0700 in the coming days looks more plausible than another rally USD: Bearish arguments are not very strong The dollar is set to face a second consecutive week of losses against all G10 currencies, as yesterday’s very positive session in US equities helped Asian equities trade in the green along with most European stock index futures. While the risk sentiment channel has, by and large, remained the primary driver of FX moves, the market’s tentative speculation about a pause in the Fed’s tightening cycle in September is surely contributing to keeping the dollar soft. In the past week, we have seen around 10bp of tightening being priced out of the Fed’s rate expectations for this year, while the likes of the ECB have seen all but a consolidation of expected tightening plans. In our view, however, it's hard to see a much calmer risk environment amid global monetary tightening and multiple downside risks (China, Russia/Ukraine), and a further shrinking of the USD’s short-term rate advantage over other G10 currencies, given that the FOMC rhetoric is still very hawkish. We see a higher chance of recovery in US rate expectations, which should put a floor under the greenback. When adding a more balanced positioning picture following the latest moves, we think that the dollar’s downside risk is now looking less pronounced, and we favour instead a recovery to the 103.00 level in DXY. Today, risk-sentiment dynamics are still set to drive the vast majority of dollar moves, although markets will keep an eye on any drop in the US personal spending figures for April and in the Fed’s preferred inflation measure – the PCE deflator. There are no scheduled Fed speakers. EUR: Upside potential more limited now EUR/USD is making a fresh attempt at breaking significantly above 1.0750 (the 50-day moving average) this morning, continuing to benefit from the soft dollar environment and some recent eurozone data having left markets more comfortable with pricing in front-loaded tightening (100bp) by the ECB this year. As discussed above, we see a higher chance of some recovery in the dollar from the current levels rather than an extension of the drop, and with a lot of ECB tightening now in the price, the room for the euro to benefit further from the monetary-policy factor appears limited. We expect a return below 1.0700 in the coming days. Today, we’ll hear from the ECB Chief Economist Philip Lane, whose recent comments have however merely backed President Christine Lagarde’s recent guidance. GBP: Bar to trigger a hawkish repricing is set high The pound received only some modest support yesterday as British Chancellor Rishi Sunak announced a £15bn support package to fight the rising cost of living. The fiscal measures should in theory allow the Bank of England to fully focus on fighting inflation and feel more comfortable hiking interest rates – ultimately, a GBP positive. However, markets had previously been quite reluctant to price out the bigger chunk of the BoE tightening cycle, and were already pricing in a policy rate in the 2.00-2.25% area for year-end before Sunak’s fiscal package. This helps explain the pound’s somewhat muted reaction yesterday, and also suggests the bar to trigger further hawkish repricing in the BoE rate expectation curve is quite elevated. In the longer run, as we expect the BoE to underdeliver compared to rate expectations, the pound is still looking likely to face some pressure from the short-term rate differential side. For now, swings in risk sentiment should continue to drive most day-to-day moves. A consolidation around 0.8450-0.8500 in EUR/GBP seems plausible. HUF: Another blow for the forint but let's not throw it overboard Wednesday's decision by the Hungarian government regarding the state of emergency found the forint unguarded and suddenly we are at the weakest levels since the beginning of March. Yesterday's announcement of the tax package, which is expected to bring in more than HUF800bn this year and next, did not help the forint much. For now, the HUF has settled in the 390-395 range. With such FX weakening, markets are raising bets on an emergency rate hike next week. However, in our view, this is far from certain. Thus, market disappointment may lead to further forint weakening to the 400 level, which would be the weakest in history. On the other hand, it is necessary to keep in mind that the market has already priced in a lot of negative news, led by the Ukrainian conflict and the halt of EU money inflows. In addition, the central bank's dovish tone may quickly revert back to aggressive rate hikes after the next inflation print. Thus, we are negative on the forint in the short term, but we continue to monitor headlines that should unlock the hidden potential of the forint in the second half of the year. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Central Bank Policies: Hawkish Fed vs. Dovish Others"

It's Good To Watch The US And The EU Data | What's Ahead Of US Dollar (USD) And Euro (EUR)? | Rates Spark: The pressure cooker eases | ING Economics

ING Economics ING Economics 27.05.2022 10:06
Market rates have drifted off their highs. It mostly reflects an easing in inflation expectations. But its also been helped by the severe risk-off seen in previous weeks which has pushed the bond market on to the ropes. The thing is, if we move to risk-on, that would provide room for real yields to resume their uptick, ultimately pressuring yields up again too Risk-off has morphed to some risk-on, correlating with a decompression of the dollar premium A key undercurrent of price action in the past few weeks has been the bursting of the dollar bubble, or at least a denting of it. We see this not just in the FX crosses and the dollar trade weighted index, but also in the key cross currency swap basis, where for example the EUR discount has tightened from in excess of -30bp to -26bp and it continues to edge lower. The dollar premium is shrinking. The dollar premium is shrinking This is helping to take some stress away from emerging markets. And the stall in the rise in real rates has helped the higher beta space generally. We also see an element of this in a tightening of the Treasury – Bund spread, which had topped out at over 200bp, and is now in the 170bp area. The fall in US Treasury yields in the meantime has correlated with falls in inflation expectations, which had been above 3% in the 10yr, and are now in the 2.6% area. All in all, a pronounced decompression of stress. Have we seen the turning point in rates? Maybe; but unlikely Given that, have we seen the turning point in rates? Maybe; there’s enough there to make the beginnings of a case. But still unlikely. The 5yr is still too cheap to the curve, the 2/5yr is showing resistance to flattening, and the rise in real rates is not necessarily over. This risk-on phase has a way to run yet, but it still smells like many of the above new trends can easily prove to be short-term ones, and we revert to a re-test higher in market rates. The US front end remains bubbly though, in part reflecting super strong tax revenues on a firm economy On the US front end, the cash going back to the Federal Reserve in the past week has been heavily impacted by Government Sponsored Enterprises (GSE) cash that has been parked on repo. That came to an end yesterday as that cash gets taken out of repo. It should allow for an easing in volumes going back to the Fed. But it still remains very elevated. Market repo continues to struggle Market repo continues to struggle to match the 80bp on offer at the Fed’s reverse repo window. The latest SOFR reading at 78bp is in fact an underestimate of the downside risks seen in the past week. Not only has chunks of GSE cash been a factor on repo, but less T-bill issuance has been a feature too. The US Treasury is chock-a-block full of tax revenues as the contemporaneous economy continues to boom. The US Treasury is chock-a-block full of tax revenue There may be credible talk of recession and slowdown in the air, but the front and centre economy remains hot. Hence the reduced need for the US Treasury to come in and issue bills, which typically can help to redress the imbalance between excess liquidity and collateral, helping to push repo rate higher. Balance sheet roll-off ahead will help, but realistically is may not be till 2023 before there is a material impact from this. A flurry of US data to watch ahead of a long US weekend Yesterday's US 7yr auction was stellar. Phenomenal actually. There was a huge indirect bid, indicative of foreign (including central bank) interest. A massive cover too. It helped to place something of a cap on the effort being made for yields to be tempted higher. Overall, this is indicative of an improved demand for fixed income. This always looks more impressive when the market is risk-on. It shows there are certainly buyers out there. With the key supply behind us, today sees a focus on the the US core PCE deflator. It has been one of the favourites of the Fed. It is currently running at 5.2% year-on-year, and the market is looking for an easing to 4.9% YoY. A sub-5% number would gel with the notion that inflation has peaked, and should help underpin the easing seen in inflation expectations in recent weeks. We'll also see US personal income and spending, but there should be more interest in the forward-looking University of Michigan indices for May. The market discount is for these to be stable, but the risk is for a surprise to the downside. The eurozone awaits a smattering of regional consumer confidence readings for May and retail sales reading for April. They are in fact quite important given the slowdown seen in eurozone data of late, but as is typical tend not to have a big market impact, barring an exceptional outcome. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Steel majors invest in green steel, but change might be driven by contenders

(USD) US Dollar: Brief Correction Or The Start Of A Downturn? | FxPro

Alex Kuptsikevich Alex Kuptsikevich 27.05.2022 11:52
The Dollar is continuing its retreat, which started precisely two weeks ago. Over this period, the Dollar Index has retreated 3.5% from the 20-year highs, losing about half of the gains from the last leg of the rally since late March. And now the big question for investors and traders is whether we see a correction before a new wave of US currency strength or whether the highs reached were a peak for years to come, as they were in 2017 and 2020. While the picture is mixed, there are more factors in favour that buying the Dollar at current levels is not good. Many of the major central banks have verbally (Bank of England and ECB) or already actually (RBNZ, Bank of Canada) come out at the pace of the Fed’s rate hikes. Consequently, short-term bond yield spreads, which had driven the demand for the Dollar in the previous few months, are no longer driving the prices. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM The latest Fed minutes have indicated a “flexible approach” - a hint of willingness to reduce the pace of rate hikes in the event of economic problems. Before the Dollar’s retreat, there was a peak in 10-year Treasury yields, which declined from 3.2% to 2.8%. Yields have been hovering around that level for the last three days, falling back to the 50-day moving average. A pullback below this line could be the first signal of a break in the uptrend. In that case, be prepared for increased pressure on the Dollar. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM China Elsewhere, there are rumours that China is cutting its more than trillion-euro investments in US Treasuries, following the Russian experience with blocking the Central Bank reserves. However, China may be reducing its holdings for another reason: capital outflows and pressure on the currency due to the economic slowdown. The current uncertainty in the US debt market and the currency market is likely to resolve in the next few days and has a high chance of sending important signals to all markets, from FX and debt to cryptocurrency and commodities, over the coming weeks or even months. Follow FXMAG.COM on Google News
Video: A Wide Range Of Forex Pairs AUD/USD, USD/JPY, EUR/JPY, EUR/USD And GBP/USD Analysed By Jason Sen (DayTradeIdeas)

Video: A Wide Range Of Forex Pairs AUD/USD, USD/JPY, EUR/JPY, EUR/USD And GBP/USD Analysed By Jason Sen (DayTradeIdeas)

Jason Sen Jason Sen 30.05.2022 07:45
AUDUSD finally tests very strong resistance at 7135/55. Shorts need stops above 7175. A break higher this week is a buy signal targeting 7230/50. Shorts need stops above 7275. Shorts at 7135/55 target 7090 then 7060/50. Further losses test support at 7020/10. Longs need stops below 7000. USDJPY shorts at resistance is at 127.50/70 need stops above 127.80. A break higher is a buy signal targeting 128.20/30, perhaps as far as strong resistance at 128.70/90. Holding resistance is at 127.50/70 targets 127.20/00. A break below 126.80 targets 126.30/20 & eventually 125.80. EURJPY holding strong resistance at 136.50/70 (perfectly on Thursday & Friday) targets 135.60/50 for profit taking on shorts. Further losses target 135.35/25. If we continue lower look for 134.65/55 then strong support at 134.20/00 for profit taking on any shorts. We should have strong resistance again at 136.50/70. Shorts need stops above 136.95. A break higher targets 137.20/30 then 138.00/20. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM EURUSD longs at support at 1.0670/50 start to work on the bounce towards strong resistance at 1.0800/20 for profit taking. Shorts need stops above 1.0835. Support again at 1.0670/55. Longs need stops below 1.0640. Strong support at 1.0600/1.0590. GBPUSD made a high for the day 6 pips above strong resistance at 1.2640/60. Shorts need stops above 1.2680. A break higher this week is a buy signal initially targeting 1.2725/45. Shorts at 1.2640/60 target 1.2590, perhaps as far as 1.2555/45 for profit taking. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk Follow FXMAG.COM on Google News
PLN Soars to Record Highs Ahead of NBP Decision

(USD) US Dollar - First Days Of June May Bring A New Stimulus, Forex Traders Keep An Eye On Mexican Peso (MXN), Hawkish ECB May Turn EUR/USD Upside Down! Looking Forward To Changes In PLN And HUF Exchange Rates | ING Economics

ING Economics ING Economics 30.05.2022 09:47
A holiday-shortened week starts with risk assets in demand as China marginally softens lockdown curbs and the pricing of a Fed pause allows interest to return to FX carry trades. That could see the dollar hand back a little more of its recent strength, although strong US data later in the week should limit the extent of the dollar's downside Source: Shutterstock USD: Interest in dollar-funded carry emerges The dollar is now about 3% off its highs in early May. Driving that correction has certainly been the view that the Fed could pause its tightening cycle after hiking 50bp in both June and July. The Fed funds rate for the 21 September meeting is now priced at 2.15%. At the start of May, it was priced at 2.35%. Clearly, US data and Fed speak will have a big say in the pricing of that Fed cycle. Today US markets are closed for the US Memorial Day public holiday, but the big data point of the week, Friday's release of May nonfarm payrolls, will have an important say for the Fed. Here James Knightley looks for another strong set of numbers, which should prove supportive for both US yields and the dollar. Until then, the dollar remains subject to corrective forces on the back of renewed interest in carry trades. Here, one month USD/JPY implied volatility has sunk back below 10% to signal calmer market conditions and for us, Friday's standout move was the huge rally in the Mexican peso. The peso is the big beast in the emerging market FX space and the USD/MXN drop to 19.50, the lowest level since early 2020, represents some confidence returning to the emerging market FX space. Indeed, some brave investors may be making the play that the dollar has topped and that putting money to work in EM local currency bonds can help cement the top in EM local rate cycles and trigger a virtuous cycle of gains in both the currency and the bond. For example, Mexican 10-year local currency bond yields have recently topped out at 9% and now trade at 8.50%. We think it is too early for those trades since both US yields and the dollar may well have another leg higher later this year, but this is a trend that certainly bears watching. US holiday-thinned trading should keep FX subdued today, but some modest reopening in China and some healthy equity gains should maintain the slightly softer dollar bias for the next few days. DXY is undertaking a slightly deeper correction than we thought and can continue to drift down to the 101.00 area. EUR: Another high German CPI to keep hawks in the ascendancy EUR/USD continues to nudge higher as the Fed pause, marginally better risk environment and ECB hawkishness all combine. Recent reports suggest the speculative community has been cutting its short euro positions. Yet we do not think there are strong arguments for EUR/USD to move back to and above 1.10. After all, the surge in energy prices is being more keenly felt in Europe and the deterioration in Europe's terms of trade has damaged the euro's medium-term fair value. Our preference would be for this EUR/USD correction to top out near 1.08. But for the short term, the external environment will keep EUR/USD supported. For today, we will get the first look at German inflation data for May. This is expected to push up to a new cycle high at 7.6% year-on-year and keep the hawks in the ascendancy at the ECB. That said, the recent narrowing in the two-year Germany-US sovereign spread seems to have run its course and unless one expects the ECB to sound even more hawkish (four to five ECB hikes are already priced this year) or the Fed to turn decisively less hawkish, EUR/USD looks unlikely to get too much more support from the yield spread side. GBP: Quiet week for the sterling story The UK data calendar is quite light this week. That leaves sterling mildly bid after last week's £15bn fiscal stimulus provided some support to otherwise fragile pricing of the BoE tightening cycle. The GBP/USD bounce has certainly been slightly stronger than we thought (we had thought 1.2600/2650 would be the corrective top) and a slightly negative dollar environment at the start of this week could see GBP/USD extend to 1.2730/2770. Longer term, we can still see GBP/USD heading back to the low 1.20s later this summer. EUR/GBP looks set to gravitate around 0.8500 for a while. CEE: Return of a hawkish tone to tame inflation In central and eastern Europe, the main event this week will be the Hungarian central bank meeting. This, in our view, will bring a 60bp hike in the base rate to 6% and a 30bp increase in the deposit rate to 6.75%. However, the weak forint may force the central bank to make a bolder move. Across the region, a breakdown of 1Q GDP growth will be released, which surprised positively in the flash estimate, so the market will be watching the reason behind this and indications for the second quarter. A piece to the puzzle will also come from the PMI for May, which like the eurozone should stagnate or fall just slightly. As always, Poland will be the first in the region to show the way for inflation. We expect it to rise from 11% to above 12.5% YoY, which should reignite the hawkish tone from the central bank, supporting higher rates and prompting the FX market to erase the losses of recent days. Of course, the biggest focus this week will be on forint, which is within reach of all-time lows following recent government decisions. A possible market disappointment would thus bring a move towards the magic level of 400 EUR/HUF, but we assume that this is not the central bank's intention. The zloty reached its strongest levels since the start of the Ukrainian conflict at the end of the last week and a strong CPI number and higher rates should ensure that it holds onto its gains at least. The koruna remains under central bank control and despite the currency's weakening last week, we do not expect the Czech National Bank to allow a move towards EUR 25/CZK territory. Read this article on THINK
GBP: Softer Ahead of CPI Risk Event

EUR/USD Performs Quite Well, Euro Is Supported By ECB. US Jobless Data Incoming, So Does NFP- How Will They Affect (USD) US Dollar Index (DXY)? Bank Of Canada (BoC) May Boost Canadian Dollar (CAD)! Is It Time To Buy (AMZN) Amazon Stock? | Swissquote

Swissquote Bank Swissquote Bank 30.05.2022 10:03
The week starts on a positive note after the rally we saw in the US stocks before last week’s closing bell. European futures hint at a positive open. The US 10-year yield stabilized around the 2.75% mark, and the US dollar index is now back to its 50-DMA level, giving some sigh of relief to the FX markets overall. Bonds and Equities One interesting thing is that we observe that the equities and bonds stopped moving together since the 10-year yield hit 3% threshold, suggesting that investors started moving capital to less risky bonds if they quit equities, instead of selling everything and sitting on cash. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM US Jobs Data, Expensive Crude Oil   That’s one positive sign in terms of broader risk appetite and should help assessing a bottom near the actual levels. But the end of the equity selloff depends on economic data. Released on Friday, the US PCE index fell from 6.6 to 6.3% in April. Due this week, the US jobs data, and the wages growth will take the center stage in the Fed talk. Weak dollar pushes the major peers higher, but the rising oil prices preoccupy investors this Monday. The barrel of US crude is above $117, and the news flow suggests further positive pressure. But till where?   Watch the full episode to find out more! 0:00 Intro 0:24 Market update 1:04 Equity, bond correlation is down since US 10-yield hit 3%! 2:58 Economic data is key: what to watch this week? 4:22 BoC to raise rates 5:09 EURUSD pushes higher 6:10 Oil under positive pressure: OPEC, UK windfall tax 9:19 Corporate calendar: GME, HP earnings, Amazon stock split Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. Follow FXMAG.COM on Google News
Fed And US Dollar (USD) Are All About Mixed Feelings, Christine Lagarde And ECB In General May Support Euro Even In July. BoE's Bailey Also Teases A Rate Hike. XAU, XAG And Crude Oil Went Higher As USD Weakened | OneRoyal

Fed And US Dollar (USD) Are All About Mixed Feelings, Christine Lagarde And ECB In General May Support Euro Even In July. BoE's Bailey Also Teases A Rate Hike. XAU, XAG And Crude Oil Went Higher As USD Weakened | OneRoyal

OneRoyal Market Updates OneRoyal Market Updates 30.05.2022 10:14
Weekly Recap It was another bearish week for the US Dollar as the greenback continued to sell off from YTD highs. The FOMC meeting minutes, released mid-week, did little to inspire a fresh rally in the Dollar. While the minutes confirmed the Fed’s hawkish stance and reinforced expectations for further 50bps hikes in June and July, there was little in the way of exciting details to get bulls reinvigorated. Additionally, with the Fed having seemingly turned more hawkish since that meeting, the minutes felt a little outdated. Christine Lagarde, ECB And Rate Hikes On the data front, a string of weaker-than-expected indicators out of the eurozone heightened growth concerns. With ECB’s Lagarde essentially confirming a July rate-hike, recession fears weighed on European asset markets though EUR itself remained well bid. Elsewhere, equities markets generally saw a choppy week though most indices ended the week in the green, benefitting from the weaker US Dollar. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM BOE’s Bailey warned that further rate hikes will likely be necessary in the face of rising inflation. The new fiscal package announced by the UK government this week, aimed at helping households fight rising energy bills, has further increased the likelihood of BOE rate hikes in the near-term. Weaker Dollar, Stronger Crude, Gold And Silver Commodities prices were higher over the week also. Gold, silver and oil all rallied on the back of a weaker US Dollar. With monetary policy divergence between the Fed and other central banks drying up, USD pressure has helped commodities stay afloat recently. Coming Up This Week Australian GDP Australian GDP will be closely watched this week on the back of the recent RBA rate hike. With the bank lifting rates and sounding firmly hawkish in its outlook and assessment, this week’s data might further support growing RBA rate hike expectations. With the country having emerged from one of the longest lockdowns of the pandemic, the economy has been on the bounce-back. However, as we have seen elsewhere, the economy has still been rocked by rising inflation and supply constraints. Traders will be keen to see the extent to which these factors weighed on the economy over the last quarter. BOC Rate Decision The BOC is widely expected to raise rates when it convenes for this month’s meeting mid-week. All 30 economists polled by Reuters ahead of the event are looking for a .5% hike. With this in mind, the focus will be on the bank’s forward guidance. If the BOC gives a clear signal that further hikes are coming in the near future, this should drive CAD higher near-term. However, if there is any indication that the BOC might look to hold off on any further rate hikes near-term, this will likely see cad dragged lower. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM US Non-Farm Payrolls The latest set of US labour market indicators this week will be closely watched as we head to the June meeting. Recent Fed commentary has been decidedly hawkish and it would likely take a major downside shock to change this narrative. Even then, it certainly wouldn’t impact the June rate hike and would likely only factor in forward guidance issued by the Fed. Still, with slowdown fears building, any weakness would no doubt act as a headwind to risk sentiment in the short-term. Forex Heat Map Technical Analysis Our favourite chart this week is the Dollar Index (DXY) The DYX has pulled back from recent multi-year highs and is now sitting on a make-or-break level at 101.94. This level was the 2020 closing high price. While the level holds as support, DXY is likely to recover and continue the longer-term bull trend. Below here, however, there is room for the correction to develop further towards next support at 100.37 Economic Calendar Plenty of key data releases to keep an eye on this week including Australian GDP, BOC rate decision and US Non-Farm Payrolls to name a few. Please see full calendar below for the complete schedule . Follow FXMAG.COM on Google News
UK Inflation Shows Promising Decline, Signaling a Path to More Sustainable Levels

In Times Of Hawkish ECB, This Week's Eurozone Inflation Plays A Vital Role, As Euro (EUR) May Need Some Boosting, So Does Hungarian Forint (HUF)... On Tuesday We Meet HP Earnings, So Better Let's Watch HP Stock Price Closely! | Saxo Bank

Saxo Bank Saxo Bank 30.05.2022 11:01
What is going on US core PCE prices.  US core PCE data was out on Friday, and it came in as expected at 4.9% y/y and 0.3% m/m. This was slower than last month's 5.2% y/y and may prompt more talk of inflation peaking out. While PCE is the preferred Fed metric, what cannot be ignored right now is that food and energy prices still have more room to run on the upside suggesting that inflation will remain higher for longer. The May CPI print is due on June 10, so that will be the next one on the radar for further cues in terms of Fed's rate hike trajectory but for this week, the focus will be on the jobs report due on Friday Goldman predicts end of battery metal bull market – saying that the prices for key battery metals cobalt, lithium and nickel will fall over the next two years after an over-eager speculation phase. Goldman predicts that lithium prices could drop slightly this year to $54k from recent spot prices near $60k and fall to near $16k in 2023 before rising again further down the road. There’s been “a surge in investor capital into supply investment tied to the long-term EV demand story, essentially trading a spot driven commodity as a forward-looking equity,” the analysts said. “That fundamental mispricing has in turn generated an outsized supply response well ahead of the demand trend.” Oil prices are becoming an important cross-asset driver.  Brent crude oil closed last week just shy of the $120/barrel level (see above) and also just shy of the highest weekly close for the front month contract since the outbreak of war in Ukraine. As the $120 area was often a resistance area during the high oil price period during 2011-14 (although at that time, the US dollar was far weaker), any further significant advance from here will likely dominate market attention and work against further strong improvements in risk sentiment as high energy prices cloud the growth outlook and would erode corporate profit margins. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Benchmark Capital and Sequoia Capital put out a dim outlook for technology.  Both venture capital firms were around during the dot-com bubble run-up and burst, and they have both put out perspective and action plans for the companies they have invested in. Those presentations talk about a much dimmer outlook and investors are shifting focus from revenue growth and revenue multiples to that of free cash flow here and now. Cost-cutting and focus on profitable unit metrics are now paramount to survive the coming years. What are we watching next? US Memorial Day Holiday today. This is a major national holiday, so all US markets are closed today. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM Eurozone inflation prints out this week.  The energy price shock has been bigger for Europe, and May prints are due for Spain, Germany, France, Italy and the Euro-area in the week ahead. Food price pressures continue to build up amid the supply shortages and protectionist measures, and further gains in May will add more weight to the ECB’s resolve to exit negative rates from Q3 with more aggressive tightening. Special meeting of the European Council today and tomorrow.  Talks will focus on the implementation of a proposed embargo on oil imports from Russia (from 2024 onwards according to the latest draft). Hungary is the only EU country against it. The problem is that any new sanctions against Russia require the unanimous agreement of the 27 member states in order to pass. Expect tough negotiations. Hungary’s Prime minister Viktor Orban has recently passed on a “wish list” of demands he wants met to support oil sanctions. This includes a swap line with the European Central Bank and end to the rule of law Article 7 and “conditionality mechanism” procedures, amongst other things. Australian GPD and balance of trade on watch and could disappoint.  Australian GPD data due Wednesday is expected to show economic growth fell from 4.2% YoY to 3% YoY in Q1. Quarterly GPD is expected to grow just 0.7%, following the 3.4% rise in Q4. If data is stronger than what consensus expects, the RBA has more ammunition to rise rates more than forecast, so the AUDUSD might rally. If GPD is weaker, then, the AUD will likely fall. For equities, Australian financials could rally if data is stronger than expected. Secondly, Australian Export and Import data is released Thursday. The market expects Australia’s surplus income (Export income minus imports payments) to rise from $9.4b to $9.5b in April. But given the iron ore price fell 13% in April, the trade data could miss expectations. Follow FXMAG.COM on Google News Several central banks in focus this week.  Tomorrow, the National Bank of Hungary (NBH) will likely deliver a hike of 50 basis points to 5.9 %. The NBH has recently flagged a slowdown in the pace of rate hikes which had a detrimental impact on the Hungarian currency. What the central bank needs to do now is to define more explicitly the risks to growth, the effect that it would have on inflation this year but especially in 2023, the pace of rate hike and how financing conditions could evolve in the next 12-18 months. On Wednesday, the Bank of Canada is expected to increase interest rates by 50 basis points, from 1% to 1.5% (it has downplayed the possibility of a 75-basis-point hike in the short term). The move has already been priced in the market. Further interest hikes will come in the coming months in order to fight inflation which is running at a 31-year high of 6.8% YoY in April. Last week, former Bank of Canada governor Stephen Poloz mentioned the risk that the country will fall into stagflation this year. Earnings Watch.  This week’s earnings releases are weak in terms of impact expect from earnings from Salesforce, Lululemon and Meituan. Analysts are expecting Salesforce to report FY23 Q1 revenue (ending 30 April) growth of 24% y/y on top of a significant operating margin expansion expected to boost free cash flow generation substantially. Monday: Sino Biopharmaceutical, Huazhu Group Tuesday: DiDi Global, Salesforce, HP, KE Holdings Wednesday: Acciona Energias Renovables, China Resources Power, Veeva Systems, HP Enterprise, MongoDB, NetApp, Chewy, GameStop, UiPath, SentinelOne, Elastic, Weibo Thursday: Trip.com, Pagseguro Digital, Remy Cointreau, Toro, Cooper Cos, Meituan, Crowdstrike, Lululemon, Okta, RH, Asana, Hormel Foods Economic calendar highlights for today (times GMT) 0900 – Euro zone Economic, Industrial, Services Confidence surveys 1200 – Germany May Flash CPI 1500 – US Fed’s Waller (Voter) to speak 1700 – ECB's Nagel to speak 2030 – New Zealand RBNZ’s Hawkesby to speak 2300 – South Korea Apr. Industrial Production 2330 – Japan Apr. Jobless Rate 2350 – Japan Apr. Jobless Rate 2350 – Japan Apr. Industrial Production 0030 – New Zealand May ANZ Business Confidence survey 0130 – China May Manufacturing/Non-manufacturing PMI 0130 – Australia Apr. Building Approvals 0130 – Australia Apr. Private Sector Credit Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Saxo Bank
The Commodities Feed: OPEC+ meeting ahead

Crude Oil Is Said To Shape Euro To US Dollar (EUR/USD). Forex Cable (GBP/USD) May Be Supported By BoE Sooner Than Later. (USD/JPY) - Can Japanese Yen Rise? | Oanda

Jeffrey Halley Jeffrey Halley 30.05.2022 13:22
Still improving risk sentiment sends US dollar lower The US dollar declined once again on Friday as improving risk sentiment continues to unwind the 2022 US dollar rally. That has spilt over into Asian markets today, with regional currencies booking some decent gains versus the greenback this morning. On Friday, the dollar index edged 0.12% lower to 101.64, losing another 0.13% to 101.50 in Asia. Support remains at 101.00, with resistance at 102.50. EUR/USD EUR/USD held steady on Friday, closing almost unchanged at 1.0735, with US dollar weakness being reflected in EMFX and the commonwealth currencies. It has gained 0.20% to 1.0755 in Asia, but overall, seems locked in a 1.0700 to 1.0800 range. Oil’s rally may temper single currency gains, with the multi-decade breakout line, today at 1.0830, still a formidable barrier. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM GBP/USD GBP/USD closed 0.20% higher at 1.2630 on Friday, adding another 0.14% to 1.2640 in Asia. GBP/USD looks set to trade in a noisy 1.2600 to 1.2700 range as the week gets underway. The government’s cost of living package may prompt faster BOE tightening, supporting the downside, while the economic slowdown continues to slow upside progress. USD/JPY USD/JPY is trading sideways, ranging each side of 127.00 as US yields trade in narrow ranges. That is likely to continue with US bond markets closed today. The chart suggests USD/JPY has further downside potential that could target 125.00. Only a move through trendline resistance at 127.80 changes the picture. AUD/USD & NZD/USD AUD/USD and NZD/USD continue to be driven entirely by swings in global risk sentiment. Another strong performance by Wall Street on Friday maintained that upward momentum and both AUD and NZD were prime beneficiaries. AUD/USD rallied by 0.85% to 0.7160, adding another 0.20% to 0.7175 today. It has resistance at 0.7260, and support at 0.7100. NZD/USD rose by 0.86% to 0.6536 on Friday, rising another 0.17% to 0.6547 today. Resistance nearby at 0.6570 opens a larger rally to 0.6650, with support at 0.6475. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM Asian FX rode improving investor risk sentiment higher on Friday, moves reflected throughout the EM space. Gains were led by the Chinese yuan, Korean won, and New Taiwan dollar, all gaining around 0.70%, while even the beleaguered Malaysian ringgit out in a good show, USD/MYR falling to 4.3770. Both the Indonesian rupiah and the Malaysian ringgit should find further strength on higher oil prices, even though it increases their domestic subsidy bills. Oil’s strength is likely the reason the Indian rupee has remained unchanged from Friday through today. CNY, KRW and NTD are rallying strongly today, likely boosted by China’s reopening hopes. USD/CNY, USD/KRW, and USD/NTD have fallen by around 0.80% today. However, if oil prices continue to rise this week, the rally in energy-importing Asian currencies may run out of steam. Follow FXMAG.COM on Google News This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Reserve Bank Of New Zeeland Is Likely To Deliver 50bps Rate Hike

NZD/USD - No Time To Waste! If US Dollar (USD) Weakens, Forex Market Reacts So Does New Zealand Dollar (NZD) Which Has Gone Up! | Oanda

Kenny Fisher Kenny Fisher 30.05.2022 15:59
The New Zealand dollar continues to take advantage of US dollar weakness. NZD/USD posted sharp gains last week, climbing 2.01%. Will Business Confidence improve? The week kicks off with ANZ Business Confidence, which has been in deep-freeze for months. The indicator was almost unchanged at -42.0 in April, which means that close to half of New Zealand businesses expect economic conditions to worsen during the next 12 months. The government has eased Covid restrictions, which is good news for the business sector, in particular for services such as hospitality and recreation. The upcoming survey is likely to show that businesses continue to struggle with two main issues – surging inflation and shortages of materials and workers. Businesses have seen their operating costs, including wages, accelerate rapidly and this is forcing them to pass on higher costs. Inflation has hit 30-year highs and no ‘inflation peak’ appears in sight, despite aggressive rate hikes from the RBNZ. Perhaps as important, business expect CPI to remain high. Two-year expectations have risen to 3.29% and five-year expectations have risen to 2.42%, well above the RBNZ’s inflation target of 1%-3%. The RBNZ has repeatedly said that its hawkish policy is aimed at curbing both inflation and inflation expectations. Governor Orr said last week that it was crucial that inflation expectations remain “anchored” and that a situation where higher inflation expectations become persistent had to be avoided “at all costs”. Orr added that he expects the cash rate, which is currently at 2%, to rise to 4% in mid-2023. This means that the RBNZ will continue be aggressive and we can expect further 50-bps rate hikes, if the central bank feels that the economy is strong enough for aggressive rate therapy. NZD/USD Technical NZD/USD is testing resistance at 0.6475. Above, there is resistance at 0.6540 There is support at 0.6352 and 0.6287 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
German Export Weakness In The Fourth Quarter Suggests That Recession Fears Are Real

Powerful Euro Incoming? Is ECB's Rate Hike Sure!? German Inflation Is Almost 1% Higher What Can Stimulate European Central Bank (ECB) Monetary Policy Tightening! | ING Economics

ING Economics ING Economics 30.05.2022 16:18
German inflation continues to accelerate, keeping alive the European Central Bank's discussion on a possible 50bp rate hike in July Record-high inflation in Germany has had an impact on consumers' budgeting and financial planning   German headline inflation surged once again as the war in Ukraine pushed up energy and commodity prices, and inflationary pressure broadens. According to a first estimate based on the regional inflation data, German headline inflation came in at 7.9% year-on-year in May, up from 7.4% YoY in April. The HICP measure came in at 8.7% YoY, from 7.8% in April. Unless there is a sharp downward correction of energy prices in the months ahead, German headline inflation will continue to increase and only start to level off in late summer. Still more inflation in the pipeline We've stopped digging out illustrations of the times when inflation in Germany was at comparable levels. Let’s put it like this: most citizens and policymakers have hardly ever seen these kinds of inflation rates in their professional lives. Sure, the surge in headline inflation is still dominantly driven by energy and commodity prices. However, looking at available regional data, the pass-through of these higher prices to the broader economy is in full swing. In some regional states, food inflation was already at double-digit levels and prices for leisure activities, hospitality, and more general services have been accelerating in recent months. The inflation rate for these items is far above the European Central Bank's 2% target. In fact, in April only 17 out of the 94 main components of the German inflation basket had inflation rates of 2% or less. The only significant U-turn in the upward inflation trend was in packaged holidays. However, this was rather driven by the so-called Easter Bunny effect (the timing of the Easter break) and not so much by disinflationary trends. Consequently, any drop in core inflation on the back of lower packaged holidays inflation will be temporary. Looking ahead, the fact that monthly price increases are still far above their historic average (0.9% month-on-month in May compared with 0.2% in a ‘normal’ May) illustrates the high inflationary pipeline pressure. As much as we would like to see a levelling off in inflation rates, with the war in Ukraine and continued tension and upward pressure on energy, commodity and food prices, headline inflation in Germany will accelerate further in the coming months. We think that the pass-through to all kinds of sectors is still in full swing. Add to this the additional price mark-ups in the hospitality, culture and leisure sectors after the end of lockdowns and it is hard to see inflation coming down significantly any time soon. Against the backdrop of recent geopolitical events, we now expect German inflation to average at more than 8% this year with a chance that monthly inflation rates will enter double-digit territory in the summer. ECB 50bp rate hike not off the table The ECB has clearly passed the stage of discussing whether and even when policy rates should be increased. The only discussion seems to be on whether the ECB should start with a 25bp rate hike in July or 50bp. In this regard, it is quite remarkable that both ECB president Christine Lagarde and ECB chief economist Philip Lane have tried to take back control of this particular discussion. In an interview released this morning, Philip Lane definitely broke with the previous ECB communication strategy to never pre-commit. Instead, he spelled out the roadmap for normalising monetary policy, de facto announcing an the end of net asset purchases in early July, a 25bp rate hike at the ECB meeting of 21 July and another 25bp rate hike at the September meeting. There is nothing wrong with the content of his remarks as it is exactly what we have already been expecting the ECB to do. However, a de facto pre-announcement almost two months ahead of the 21 July meeting is remarkable, to say the least. In any case, as today’s German inflation numbers mark an upside surprise for many, the debate on the magnitude of the first hike, be it 25bp vs 50bp, is not entirely off the table. If core inflation in the eurozone continues accelerating in May and June, Lane and Lagarde could still regret their new pre-commitment. Read this article on THINK TagsMonetary policy Inflation Germany ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
White Label Solutions: A Boost To Your Business? | B2Brokers

White Label Solutions: A Boost To Your Business? | B2Brokers

B2Brokers Group of Companies B2Brokers Group of Companies 30.05.2022 16:04
Those wishing to start a Forex brokerage business are increasingly turning to white label solutions. These solutions can either provide their brand of trading platforms or make changes to the standard platform. White label solutions are becoming an attractive proposition for smaller broker companies, allowing them access to a product that would be otherwise difficult and expensive to develop in-house. Benefits of white label brokerage One of the most significant advantages of white label brokerage software is its low cost. Using a pre-existing platform with little or no modifications can save broker companies money. This allows the brokers to have their unique product without employing developers themselves, reducing costs and allowing them to focus on other business areas. Another benefit is that the broker often has access to the platform's source code. This means changes can be made if necessary, allowing brokers to distinguish their products from others on the market. The ability to tailor a trading platform offers the brokers a competitive advantage over their competitors. Many people would prefer to work with a broker who stands out from others in some way rather than use one who offers little difference. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM A further benefit of white label Forex brokerage solutions is the complete scalability for different markets and languages. With most platforms being fully automated, it allows clients or developers easy integration into new markets with language translations, ensuring the product meets multi-jurisdictional regulations. Clients of white label brokerage platform solutions know that they will be receiving a complete and fully functional product. This guarantees that the platform will have all the features necessary to trade, and customers won't be disappointed with their product. Additional features can be added if required, allowing brokers to provide new updates as and when they see fit. Disadvantages of white label solutions  The downsides of a white label Forex broker often come down to how much control you want over your brand and its image. While some platforms might allow for almost total freedom when designing your trading interface, others will provide very few customization options and may be limited in terms of functionality too. Additionally, if you want any significant changes made, this could cost extra money. There are also disadvantages in security and technical support when using a third-party product for your trading platform. Making changes could prove difficult if you have poor coding skills, especially if no access is given to the source code. While customer service may not be an issue for some broker companies, others may prefer instant access to a technical team that understands their platform inside out. Another disadvantage is that there are limited options in terms of different platforms which might be used as a white label solution. As well as this, new updates will need to go through rigorous testing before they are rolled out to brokers and their clients. While this ensures quality, it can also add time to the process, meaning sometimes traders have to wait a little while before using the new features. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Finding a reliable platform that is suitable for your company may prove difficult. The cost involved in having a custom-built platform developed will ultimately be worth it if you plan on being in business for some time. However, smaller start-up businesses might find it more beneficial to access an off-the-shelf solution. Ultimately, if you want to get your trading firm up and running quickly, white label solutions are a big help. Access to a fully customizable platform and source code allows traders to have complete freedom when designing their interface. In addition, the product is scalable to different markets and languages, which means that clients or developers can integrate their operations into new locations with ease. Disadvantages include limited customization options in terms of design, lack of control over technical support, and waiting for an update before its publication. However, given the cost-effectiveness and time-saving benefits associated with using off-the-shelf solutions such as white label products, it could be worth considering these aspects while making your decision on which one would work best for you and your business needs.  Follow FXMAG.COM on Google News
Record-Breaking German Inflation Affects Euro To Dollar (EUR/USD) And Reminds European Central Bank (ECB) Of Potentially Needed Rate Hike | FxPro

Record-Breaking German Inflation Affects Euro To Dollar (EUR/USD) And Reminds European Central Bank (ECB) Of Potentially Needed Rate Hike | FxPro

Alex Kuptsikevich Alex Kuptsikevich 30.05.2022 15:30
A preliminary estimate showed that German inflation continues to pick up, reaching 7.9 y/y in May. This is a new inflation record since 1951, and the reading was also above the forecast of 7.6%. Energy, Food Prices, EUR/USD A separate release of import prices noted an acceleration of this type of inflation from 31.2% to 31.7%. Although it was slightly lower than the expected 32.0%, this extreme reading was not only due to a jump in energy and food prices but also to a 15% fall in EURUSD over the past 12 months. Euro Is Falling When It's Not Expected to... Historically, EURUSD has fallen in this way, with even more amplitude several times, but as a rule, it was during times of economic recession. Now we are seeing one of the rare instances of the single currency failing in a growing economy, which further inflates the sails of inflation. With such inputs, there remains pressure on the ECB for more dramatic monetary policy tightening measures. Hawkish ECB Perhaps a hawkish U-turn by the European Central Bank is now the most plausible way to halt the weakening of the EURO and contain inflation. And it seems that the ECB is just in the process of this turn, forming the basis for buying the euro against the dollar and pound after touching multi-year lows earlier in April and May.
Fed's Bowman Highlights Potential for More Rate Hikes; German Industrial Production Dips to 6-Month Low

Strong Investor Sentiment Toward The Euro Continues (EUR/USD), EUR/GBP Currency Pair, As China Ease Lockdowns The AUD Outlook Seems Positive (GBP/AUD, AUD/USD)

Rebecca Duthie Rebecca Duthie 30.05.2022 16:37
Summary: Expectations for the ECB to raise interest rates grow. GBP doing well in the wake of HM Treasury’s Thursday announcement of the stimulus package. As China eases lockdowns, the AUD strengthens. Read next (COST) (Retail Stores) Costco Stock Beats Market Expectations  Euro still gaining on the US Dollar Market sentiment for this currency pair is reflecting bullish signals. The current combination of a strong Euro and a weak US Dollar is giving room for the Euro to bounce back to a level almost equal to that of 5 weeks ago. The market expectations for the European Central Bank (ECB) to raise interest rates have been growing over the past few weeks, whilst the expectations for the US Dollar have weakened as market price out some of the Feds hawkish decisions. EUR/USD Price Chart Market sentiment toward the Pound Sterling remains strong Market sentiment for this currency pair is reflecting bearish signals. On Tuesday, Eurostat is expected to release their estimate for May inflation, which could have an impact on the Euro. The move made late last week by HM treasury to implement a stimulus package to struggling households has the markets favouring the Pound Sterling over the EURO. EUR/GBP Price Chart Australian Dollar benefitting from the opening Chinese economy The Australian Dollar is performing well against the Pound Sterling amidst China continuing with the phased re-opening of the economy in the wake of its most recent Covid-19 lockdowns. It is well known that what is good for the Chinese economy is normally good for the Australian Dollar. If the global economic outlook continues to improve (especially in China), the AUD could outperform. GBP/AUD Price Chart AUD/USD reflecting mixed market signals The market is reflecting mixed market sentiment signals. The Australian Dollar is strengthening as the Chinese economy outlook seems positive in conjunction with the weakening US Dollar, giving the AUD a chance to strengthen against the USD. AUD/USD Price Chart Sources: finance.yahoo.com, dailyfx.com
EUR: Testing 1.0700 Support Ahead of ECB Meeting

It's Time For Markets To Discount EU Ban On Russian Oil! EUR/USD And AUD/USD Have Gone Up. How Will Euro Exchange Rate Change In The Following Days? Let's Watch Eurozone Inflation! | ING Economics

ING Economics ING Economics 31.05.2022 08:01
EU partial ban on oil and hawkish commentary from Fed's Waller were the headlines with the US out on holiday. Indian GDP for 1Q22 out later.  Source: shutterstock Macro outlook Global: With the US out on vacation yesterday, there isn’t too much overnight catch-up to do for Asia, though commodity markets are responding to the partial EU ban on Russian oil agreed upon yesterday. FX markets continued their recent gains against the USD though. EURUSD  has now risen to 1.0787, bringing it close to resistance levels just above 1.08. The AUD also continued to make gains, and is currently flirting with 0.72. Within the Asia FX pack, the KRW led the charge, shooting lower to 1238, with the CNY close behind in terms of gains at 6.66. Despite the holidays, the Fed’s Waller struck a more hawkish tone at a speaking engagement than his colleague, Raphael  Bostic, who had recently advocated a possible September pause in hikes. Waller, in contrast, suggested that 50bp hikes should remain on the table until inflation was closer to 2%. Newswires continue to run with stories looking for the trough in the equity sell-off, but also suggesting that the bond sell off is also over. One of those views is likely to be wrong. But whichever is the case, it is a good reflection of the current market sentiment which is looking for turning points. More choppiness ahead seems likely as a result. It is a relatively light day for G-7 macro data today. The EU’s May inflation should show a rise from 7.5% to 7.8%. But ECB rate hike intentions have been clearly flagged for now, so this shouldn’t make too many ripples. And in the US, we have house price figures and consumer confidence numbers. Consumer confidence has barely any correlation with consumer spending, so we can probably give it only a cursory examination. House prices appear to be reaching a peak in year on year growth, but until or unless they show a marked reversal in direction, can probably also be glossed over. India: 1Q22 GDP, which is released at 8pm SGT tonight, should come in at about 4.0%YoY (consensus is 3.9%YoY). That should bring the annual fiscal-year GDP growth for 2021/22 to 8.7%. For the 2022/23 fiscal year, we are forecasting 7.2% GDP growth. Rising prices and tighter monetary policy as well as global disruptions and a less helpful base comparison account for the apparent slowdown.  China: Official PMIs will be released this morning. We expect both the manufacturing and non-manufacturing PMIs will come in under 50, i.e. signalling monthly contraction. That result will mainly reflect the fact that Beijing was in lockdown for most of May, adding extra pressure on activity while Shanghai was also still in lockdown. Unemployment should remain high and will add uncertainty to the non-manufacturing PMI even if Shanghai residents resume work and production starting from 1st June.   Korea:  April monthly activity data signals that China’s lockdown dragged down Korean manufacturing production while local reopening supported services, construction, and consumption activity. Manufacturing production plunged -3.3%MoM (vs -1.3% market consensus), the first monthly drop in seven months. Meanwhile, the construction and services sectors rose modestly for the second straight month, with notable rises in hotels & restaurants and personal services (11.5% and 8.7%) respectively. Consumption fell -0.2% but mainly due to a decline in pharmaceutical consumption, while durable goods, including automobiles, rose slightly. Overall, the April data was on weak side, yet the recent approval of a supplementary budget (62 trillion KRW) and the reopening of China should boost the recovery in the coming months.  Japan: April Industrial production fell -1.3% MoM sa (vs -0.2% market consensus) the first fall in three months, with China’s lockdown hampering supply chains and production activity. However, consumer sales were relatively sound with retail sales and department store sales up by 2.9% YoY and 4.0% respectively. Meanwhile, labour conditions also improved. The jobless rate in April dropped to 2.5% (vs 2.6% market consensus and March) and the job-to-application ratio ticked up to 1.23 (vs 1.22 in March). We ought to be on the watch for tighter labour market conditions leading to wage growth, which is the key that the Bank of Japan has been looking for to gauge a sustainable inflation trend. What to look out for: EU inflation and US non-farm payrolls South Korea industrial production (31 May) Japan retail sales and job-applicant ratio (31 May) China PMI manufacturing (31 May) Thailand trade balance (31 May) Eurozone CPI inflation (31 May  US Conference board expectations (31 May) South Korea trade (1 June) Regional PMI manufacturing (1 June) Australia 1Q GDP (1 June) US ISM manufacturing (1 June) Indonesia CPI inflation (2 June) Australia trade balance (2 June) US ADP jobs, initial jobless claims, durable goods orders (2 June) South Korea CPI inflation (3 June) US non-farm payrolls and ISM services (3 June) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

EUR/USD And GBP/USD Have Gone Down, Euro To Dollar - Rising US Yields, Oil Prices And The Russian Oil Ban Has Affected This Forex Pair | Oanda

Jeffrey Halley Jeffrey Halley 31.05.2022 22:20
Dollar stages corrective recovery on a quiet day Currency markets are quiet post the US holiday overnight, and that has allowed a modest short-covering US dollar rally to develop after US yields ticked higher in Asia. The dollar index has added 0.26% to 101.63 this morning, mid-range between support/resistance at 101.00 and 102.50. EUR/USD has given back most of its overnight gains, easing 0.28 to 1.0750 today. The overnight rise in oil prices, the EU Russian oil ban, and the tick higher in US yields are likely the cause of the retreat. EUR/USD is struggling to find the momentum to challenge resistance at 1.0800 and 1.0830, with support remaining at 1.0700. GBP/USD also faded ahead of resistance at 1.2700, falling 0.36% to 1.2610 this morning. That has brought support at 1.2600 back into play, with failure potentially extending losses to 1.2500. USD/JPY has seen an immediate reaction to firming bond yields overnight and this morning internationally. USD/JPY rose through resistance at 127.50 overnight, gaining 0.405 to 127.62. Today it has booked another 0.28% gain to 128.00. If nothing else, it highlights that the overriding driver of USD/JPY direction remains the US and to a lesser extent, European/Japan rate differentials. AUD/USD and NZD/USD posted modest gains overnight but have given all of those back as long-covering set in today and risk sentiment dipped. AUD/USD has faded ahead of 0.7200 resistance, falling 0.22% to 0.7180 today, with interim support at 0.7150. NZD/USD has fared worse, falling 0.37% to 0.6535, with resistance at 0.6570 holding overnight. Both currencies remain at the mercy of global swings in risk sentiment. USD/Asia is also rising today as the EU Russian oil ban and the rise in US yields have flowed through into US dollar strength. That said, the losses today have only partially retraced the recent gains by CNY, CNH, KRW, NTD and MYR, and as such I am not reading too much into the price action given it is a quiet day. At this stage, it looks corrective, and we will have to wait until the US session for more direction. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Reserve Bank Of New Zeeland Is Likely To Deliver 50bps Rate Hike

New Zealand Dollar: Although NZD/USD May Lost Its Momentum As Business Confidence Has Dropped, Reserve Bank Of New Zealand (RBNZ) Is Expected To Act | Oanda

Kenny Fisher Kenny Fisher 31.05.2022 22:40
The New Zealand dollar rally has fizzled out on Tuesday. In the European session, NZD/USD is trading at 0.6517, down 0.63% on the day. Business Confidence slides New Zealand’s business sector remains deeply pessimistic about the economy. ANZ Business Confidence has been mired in negative territory for close to a year and the May reading fell to -55.6, down sharply from -42.0 in April. This means that more than half of New Zealand businesses expect economic conditions to worsen during the next 12 months. There weren’t any surprises in the ANZ survey, with businesses noting that their two biggest problems are inflation and cost pressures. Inflation continues to be broad-based, and inflation expectations remain intense. One-year inflation expectations rose to 6.2%, much higher than the RBNZ’s inflation target of 1%-3%. The RBNZ is very concerned about inflation expectations, which can manifest into actual inflation. Governor Orr said last week that it was crucial that inflation expectations remain “anchored” and that a situation where higher inflation expectations become persistent had to be avoided “at all costs”. The RBNZ finds itself in the middle of its aggressive rate-tightening cycle. The Bank raised the cash rate to 2.0% last week, up from 1.50%. Governor Orr has stated that he is looking to raise rates to 4% by mid-2023, which means that investors can expect plenty of tightening, which could mean additional 50-bps hikes. The RBNZ’s chief economist, Paul Conway, has acknowledged that a soft landing amidst aggressive rate hikes is “difficult to engineer” but said the economy was strong enough to handle a downturn due to the strong labour market. Conway added that 75-bps hikes were not being considered by the central bank. NZD/USD Technical 0.6492 is under pressure in support. Below, there is support at 0.6435 There is resistance at 0.6593 and 0.6650   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
ECB's Dovish Shift: Markets Anticipate Softer Policy Guidance

Is It A Turning Point For Australian Dollar To US Dollar (AUD/USD)!? Gross Domestic Product (GDP) Decreased! | Oanda

Kenny Fisher Kenny Fisher 01.06.2022 15:27
The Australian dollar is in calm waters this week, as AUD/USD trades quietly just below the 0.73 level. GDP slows to 0.8% Australia’s Q1 GDP slowed to 0.8% QoQ, after a massive 3.6% QoQ gain in Q4 of 2021. Investors were braced for a softer release after the impressive Q4 surge, and the Q1 reading actually outperformed, beating the estimate of 0.5%. This has resulted in a muted response to GDP, with the Aussie edging slightly higher. The whipsaw movement in GDP makes it difficult to predict the underlying strength of the economy. As far as the RBA is concerned, the respectable growth in Q1, which translates into 3.2% annualized growth, doesn’t interfere with its rate-tightening plans. Monetary policy has not focused all that much on GDP, with the RBA concentrating on the labour market, wage growth and inflation. The RBA holds its meeting next week, and is likely to tighten by another 25-bps, which would bring the cash rate to a (still low) 0.60%. Australia’s current account contracted to AUD 7.5 billion in the first quarter, down sharply from AUD 13.2 billion in Q4 of 2021. The decline was a strong increase in imports, which outstripped exports. This is consistent with strong retail sales, as consumers continue to spend in the follow-up to the removal of Covid restrictions. In the US, the Fed commenced quantitative tightening this week and the Fed continues to send out hawkish messages. Fed Governor Christopher Waller urged the Fed to continue its rate hikes and said that he supported raising rates above the “neutral level”, which is not supportive or restrictive for growth. The Fed estimates the neutral level around 2.5%, which leaves plenty of room for further hikes. Fed Chair Powell has signalled that the Fed will deliver 50-bps hikes in June and July, followed by a pause in September. AUD/USD Technical 0.7207 is under pressure in resistance. Above, there is resistance at 0.7252 There is support at 0.7121 and 0.7076 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

Forex: US Dollar (USD) Is Being Supported, EUR/USD Affected By Ban On Russian Oil. Jubilee - British Pound (GBP) Is Going To Take A Rest Because Of Market Holidays In The UK, Canadians Await BoC's Decision | ING Economics

ING Economics ING Economics 01.06.2022 14:14
While our base case is that the Bank of Canada will hike by another 50bp today, the strong macro picture means that a 75bp move cannot be excluded. Elsewhere, data resilience and higher yields should lay the basis for a re-strengtheining of the dollar, and the contrast with a worsening growth picture in Europe may send EUR/USD back to 1.05 in June Source: Shutterstock   Thursday 2 June and Friday 3 June are national holidays in the UK. We will resume the publication of the FX Daily on Monday 6 June. USD: Finding fresh support The dollar has continued to find some support this morning, benefiting from a general sell-off in the bond market, the impact of the EU oil embargo on Russia, and better-than-expected US data (consumer confidence yesterday was a case in point). The past few days seem to have conveyed the message that the Fed’s tightening cycle is based on a sturdier growth story than Europe's (especially after the Russian oil embargo) and the speculation around a September Fed pause is being kept at bay for now. Ultimately, we think all this is laying the basis for a period of gradual re-strengthening in the dollar. Today, data will remain in focus in the US, as the ISM manufacturing and JOLTS job openings for May are released. On the Fed side, John Williams and the arch-hawk James Bullard are both scheduled to speak today, and markets will also keep an eye on regional trends emerging from the Fed’s Beige Book released this evening. All in all, we expect the dollar to find some consolidation and possibly inch higher against most G10 peers for the rest of the week, with the weak bond environment offering a short-term supporting driver (the yen is set to remain the main victim here) and US data - our economist expects another solid US payrolls reading on Friday - still supporting the Fed tightening story and offering a longer-term bullish USD argument. Some stabilisation in global sentiment may allow high-beta currencies – and especially oil-sensitive ones like Canada's dollar and Norway's krone - to find a floor, while other European currencies may remain on the back foot due to a worsening growth outlook in the region. DXY may advance to the 103.00 area in the run-up to the 15 June FOMC meeting. EUR: On track for a return to 1.05 EUR/USD is re-testing the 1.0700 support this morning after a marginal recovery late yesterday proved very temporary. Indeed, the common currency is discounting the re-assessment of the European economic outlook after the EU announced a ban on Russian oil. That news came in conjunction with evidence that inflationary pressures in the eurozone are still not easing, as eurozone-wide CPI figures for May jumped to 8.1% while the core rate advanced to 3.8% year-on-year. While high inflation is keeping the ECB tightening expectations supported, the euro – which is already embedding a good deal of monetary tightening – is struggling to find any solid bullish driver at the moment. In our view, this was a matter of time and we continue to target a return to the 1.0500 area in EUR/USD by the end of this month. Elsewhere in Europe, the Hungarian central bank raised its base rate by 50bp yesterday in line with market expectations, but didn't meet all expectations, including ours. Even the almost historically weak forint did not persuade the central bank to make a bolder move. We did get assurances that monetary policy tightening will continue, but at a slower pace regardless of market or economic conditions. Although the central bank tried to be as hawkish as possible in its communication, it was not enough for the market to reverse the forint's direction. The forint continues to be our least preferred currency at the moment, but on the other hand, still has the most potential to strengthen in the region. We see EUR/HUF around 390 in the short run with a possible quick move to 380 should one of the external factors (war, rule-of-law debate, etc.) show early signs of improvement, reducing the risk premium. GBP: Some weakness (but not a collapse) ahead The pound seems to have been caught in the crossfire of the EU-Russia oil embargo story, largely following other European currencies (except for NOK) lower. This has meant that EUR/GBP has remained tied to the 0.8500 level, which appears to be an anchor for the short term. Given a deteriorating growth outlook in the UK, we expect some GBP weakness ahead and see a move to 0.8600 in the coming weeks as likely. However, we do not see a sterling downtrend morphing into a collapse.   With UK markets closed for two days, expect reduced GBP volatility into the weekend. CAD: We expect 50bp by the BoC today, but 75bp is possible The Bank of Canada is set to raise interest rates for a third consecutive meeting today, and the Bank’s recent communication has strongly suggested we’ll see another 50bp hike. As discussed in our BoC preview, 50bp is also our base case scenario for today, given the strong economy (and an outlook helped by high commodity prices) and jobs market, as well as elevated inflation. Against such a macroeconomic backdrop, we don’t exclude a 75bp move: markets seem to attach a relatively high probability to this scenario given that 70bp are priced in ahead of today’s meeting. As we see a 50bp hike as more likely, there are some downside risks for CAD today, as markets may have to price some 10-20bp out of the CAD swap curve. That said, we think that the BoC will reiterate a very strong commitment to fighting inflation and allow markets to consolidate their bets on at least another 50bp hike in July and a terminal rate around 3.0%. Ultimately, this should put a floor under the loonie, which has been displaying some resilience against the USD rebound, and may not depreciate beyond the 1.2700-1.2750 area even if the 75bp bets have to be scaled back today. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Chart of the Week : An ECB rate hike is imminent

AUD/USD: Strong Trade Balance Of Australia Doesn't Seem To Be Supporting Australian Dollar At The Moment. Crude Oil (WTI/BRENT) Prices Decreased | ICM.COM

ICM.COM Market Updates ICM.COM Market Updates 02.06.2022 09:32
Currencies Australia Trade Balance data fails to lift AUD/USD AUD/USD remains pressured around 0.7162 on early Thursday in Asia despite Australia's Trade Balance for April released strong figures. Australia's Trade Balance printed at 10,495M versus the forecasted 9,300M. The downward pressure may be related to concerns on faster Fed rate hikes following recent solid US data and hawkish statements from the Fed. News on China as well as the US NFP this Friday may also weigh on the currency pair. Commodities Oil prices dropped amid expectations on OPEC+ policy Oil prices dropped today, ahead of a key producers meeting later in the day, with expectations of a boost in oil production by Saudi Arabia in response to urging by the United States.Brent crude down 1.8%, at $114.21U.S. (WTI) crude down 2.0%, to $113.01
Dollar Could Gain Momentum from Hawkish Fed Stance

USD - Waiting For NFP! Check How Are EUR/USD & AUD/USD Doing Ahead Of The US Data Release!| Oanda

Jeffrey Halley Jeffrey Halley 03.06.2022 12:25
US dollar eyes nonfarm payrolls There was a wax on, wax off feel to currency markets overnight. Soft ADP Employment data spurring a risk-on rally across asset classes as the Fed hiking outlook was tempered. The US dollar staged a broad retreat, unwinding all its gains from the day before in the major space except for USD/JPY. Asian market volatility is being dampened by holidays across the region today, including mainland China and Hong Kong, and the UK later today.  US dollar loses all of its previous gains - MarketPulseMarketPulse The dollar index tumbled by 0.78% to 101.75 overnight, an exact reversal of the rally from the day before. It is unmoved in Asia and support/resistance lies at 101.40 and 102.70. Its fate will be decided by this evening’s US Non-Farm Payrolls.   EUR/USD reversed all its previous day’s losses, rising 0.91% to 1.0750 where it remains in Asia. Resistance between 1.0770 and 1.0830 remains a formidable barrier, with support at 1.0650. Sterling reversed all its previous day’s losses, rising 0.75% to 1.2575 where it remains in Asia. It has support/resistance at 1.2460 and 1.2670. USD/JPY was almost unchanged at 129.85 as US bond yields barely moved. It remains unchanged in Asia. It has support/resistance at 129.00 and 131.30. Their fate will be decided by this evening’s US Non-Farm Payrolls.   AUD/USD staged a bullish outside reversal day overnight, making a new low before closing higher than the high of the day before, thanks to the broad-based risk-on rally after the US data. It leapt 1.27% higher to 0.7260 overnight where it remains today. AUD/USD has support at 0.7150, and the overnight rally took it above its 50/100/200-day moving averages (DMAs) between 0.7230 and 0.7255 as well. A soft Non-Farm print tonight could see AUD/USD rise to test 0.7350, with a weekly close at these levels being a bullish signal technically. Its fate will be decided by this evening’s US Non-Farm Payrolls.   Asian FX currencies booked modest gains overnight, with the rise in oil prices tempering the fast money inflows. Both the Malaysian ringgit and Philippine peso actually fell overnight, a result I suspect, of rising subsidy bills as oil prices climb higher. The Indonesian rupiah has rallied 0.70% to 14,420.00 today, while the KRW and MYR have risen by 0.10%. With a swathe of holidays across the region today, and no PBOC USD/CNY fixing, Asian markets look content to watch from the sidelines as we head into US data this evening and the weekend. Their fate will be decided by this evening’s US Non-Farm Payrolls. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. https://www.marketpulse.com/20220603/us-dollar-loses-all-of-its-previous-gains/
Market Update: UK Inflation Softens, US Stocks Rally, Bank Earnings, and AI Dominate Headlines

Shocking Forex Rates!? EUR/USD Decreased A Little Bit, So Does British Pound (GBP) And AUD/USD. USD/JPY (US Dollar To Japanese Yen) Showed Decent Performance | Oanda

Jeffrey Halley Jeffrey Halley 06.06.2022 16:23
US dollar pares gains from NFP report Friday’s higher Non-Farm Payroll data saw the US dollar reverse much of its losses from Thursday, characterising a very choppy back-and-forth week last week. The dollar index rose by 0.40% to 1.0217, leaving the index slightly higher for the week. Notably, the rally was not enough to lift the index above its 102.35 pivot point, suggesting that the downside remains the path of least resistance still. Support/resistance lies at 101.30 and 102.70. In Asia, the China reopening trade has pushed the index slightly lower to 102.11.  US dollar eases lower in Asia - MarketPulseMarketPulse EUR/USD fell only slightly by 0.27% to 1.0720 on Friday post-data, where it remains in Asia. ​ Resistance between 1.0770 and 1.0830 remains a formidable barrier, with support at 1.0650. However, the single currency continues to show resilience at these levels, and resistance could be seriously tested if China’s reopening trade continues to support risk sentiment. Volumes will be impacted by European holidays today.   Sterling tumbled by 0.70% to 1.2490 on Friday in yet another whipsaw session. It remains there in Asia today. It has support/resistance at 1.2460 and 1.2670. A UK leadership challenge this week may serve to limit gains but a clean break of 1.2670 opens a potentially larger rally to 1.2800 and 1.3000, while the failure of 1.2460 could see sterling fall to 1.2400.   USD/JPY rose 0.73% to 130.85 on Friday, accounting for most of the dollar index gains post US data as US bond yields firmed slightly. USD/JPY has edged 0.15% lower to 130.65 today despite dovish BOJ comments, but the US/Japan rate differential should continue to support the downside unless US yields suddenly fall sharply. It has support at 129.00 and resistance at 131.00, a double top, and 131.30.   AUD/USD fell post US data as risk sentiment turned south. It finished 0.80% lower at 0.7205, easing another 0.20% to 0.7195 in Asia. AUD/USD has nearby support at 0.7180, an ascending one-month trendline, with resistance between its 50/100/200-day moving averages (DMAs) between 0.7225 and 0.7255. RBA hiking concerns ahead of tomorrow’s RBA meeting look set to limit gains in the short term.   USD/Asia moved higher on Friday on firm US data, with the Korean won, New Taiwan dollar, Singapore dollar, and India rupee the main losers, being favourites by fast-money to express risk sentiment of late. Yuan trading was impacted by a China holiday. Markets are quiet in Asia today, with Asian currencies booking only small gains versus the greenback. The sharp rise in oil prices on Friday, which continues in Asian trading today, is likely limiting Asia FX gains. The double-edged sword of China’s reopening is that oil prices are likely to remain firm as well as demand returns. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Asia Morning Bites: Inflation Data in Focus, FOMC, ECB, and BoJ Meetings Ahead

USD/PLN To Plunge Soon!? Is Zloty (PLN) Gearing Up For... Skyrocketing!? Get Ready Poles... NBP Is About To Speak Its Mind | ING Economics

ING Economics ING Economics 06.06.2022 15:58
The Monetary Policy Council in Poland meets on Wednesday, 8 June. Rates are expected to be increased and the National Bank of Poland is still far from the end of its hiking cycle The Monetary Policy Council in Poland is expected to raise rates Rates expected to rise The negative short-term impact of the war in Ukraine on GDP is limited. With a high level of production backlogs, output growth remains high, but new orders contraction is significant, which bodes ill for the rest of 2022. However, CPI gets sticky and maybe persistent, requiring further NBP hikes to offset fiscal expansion (c.3% GDP). The high level of activity at the turn of 2021/22 means that 2022 GDP growth is likely to average around 4.7%. Supporting consumption is a slew of nearly 2 million refugees from Ukraine. After a successful first half of 2022, we face a more difficult second part of the year due to the negative impact of the war on Polish exports to the East and West, no sustainably high contribution of inventories in 1Q21 (7.7% of GDP), weaker investment constrained by uncertainty and availability of supplies, and a downturn in construction as a result of interest rate hikes. An extended period of elevated inflation lies ahead. We forecast average annual CPI of over 13% in 2022, with a peak of 15-20% YoY in 4Q22. The commodity shock was so strong and widespread that inflation will remain elevated even when GDP returns near to its potential. Prices are being pushed up by increases in energy, materials, and transportation. More worrisome is that core inflation shows one long stream of month-on-month rises, which we find as evidence of second-round effects. Domestic demand is so firm that businesses can easily pass higher costs to retail prices. It will take 2-3 quarters for the recent war shock to fully translate into consumer prices. Hence, the rhetoric of the National Bank of Poland remains very hawkish. We expect a series of recent CPI surprises to force the Council to increase rates by 100bp this week, above market expectations (75bp). We believe the MPC will continue raising rates, bringing the reference rate to the target level of 8.5% in late 2022/early 2023. With expansionary fiscal policy, we see rate cuts no sooner than in 2024. FX and Money Markets We believe the NBP's policy tightening will be much stronger than either the Fed or the European Central Bank. In our opinion, this justifies further strengthening of the zloty, especially as market tensions related to the war are clearly easing. Moreover, comments from the European Commission point to the imminent launch of the Recovery Fund. This will provide additional support for the zloty, as EU funds will be exchanged on the market. We expect the €/PLN exchange rate to reach 4.50 or slightly below by the end of the year. In 2023, the appreciation of the zloty should continue, even below 4.40 in 4Q23. Domestic Debt and Rates We believe that PLN IRS rates are pricing in too low a path for NBP rates. In particular, markets expect rate cuts as early as next year, which seems unlikely given the expansionary fiscal policy. This, in our opinion, gives room for PLN IRS to grow. Read this article on THINK TagsPoland central bank National Bank of Poland Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Steel majors invest in green steel, but change might be driven by contenders

AUDUSD: Yes, US Dollar (USD) Is Really Strong And Boosted But What About Its (AUD) Australian Cousin? | InstaForex

InstaForex Analysis InstaForex Analysis 06.06.2022 15:16
Relevance up to 11:00 2022-06-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/313016 Divergences in the Fed's monetary policy with other central banks and American exceptionalism, when US GDP growth was faster than that of its main competitors and the global economy as a whole, allowed the USD index to soar to 20-year highs. However, an increase in the federal funds rate slows down the gross domestic product in the States, while in some other countries the opposite process is underway. Divergence in economic growth is no longer playing on the side of the US dollar. It has serious opponents. The decline in employment growth and inflation, disappointing statistics on business activity, and the real estate market are strong evidence of the loss of a pair of US GDP. This is normal in the context of the tightening of the Fed's monetary policy. The question is, will an aggressive rate hike provoke a recession? Australia's economy, by contrast, continues to accelerate. The strongest labor market in the last 48 years, benefits from problems with grain supplies from Ukraine and India, a strong raw materials market in general, and hopes for monetary incentives from China to open the way for further economic growth of the Green Continent. In the first quarter, it accelerated to 3.3% y/y and to 0.8% q/q, which, against the background of the sliding of the American analog into the red zone, became one of the drivers of the AUDUSD rebound from the levels of the May lows by 5.7%. Rapid GDP growth, inflation at 5.1%, which is above the upper limit of the targeted range of 2-3%, and the lowest unemployment in almost half a century allowed the RBA to begin a cycle of tightening monetary policy. Dynamics of the main economic indicators of Australia     Now the markets are worried about how much the cash rate will grow at the meeting on June 7? 15 out of 29 Bloomberg experts predict that by 25 bps, three - by 50 bps, and the remaining 11 - by 40 bps. Financial markets also adhere to the latter opinion. Proponents of gradual monetary restriction nod to household debt, and an increase in the cost of services will lead to a decrease in consumption. The latter accounts for 60% of GDP. "Hawks" talk about the need to rein in inflation as quickly as possible and cite the example of the Fed and other central banks that use big steps. In my opinion, when a significant part of the positive from the increase in the federal funds rate is already embedded in the US dollar quotes, while Bloomberg experts' forecasts for the cash rate growth limit of up to 2% fall short of market expectations of 2.8% by December and up to 3.6% a year later, the AUDUSD pair has not yet revealed its potential. UBS predicts its growth to 0.76 by the end of 2022 and to 0.78 by the end of March 2023, and this makes sense. AUDUSD, the daily chart     Technically, finding AUDUSD above fair value and moving averages indicates the dominance of "bulls". A breakout of resistance at 0.7255, where an important pivot level is located, or a rebound from supports at 0.714 and 0.71 should be used to form long positions.
Fed's Bowman Highlights Potential for More Rate Hikes; German Industrial Production Dips to 6-Month Low

AUD/USD: Maybe Australian Dollar (Like On A Rollercoaster) Has Held Its Breath, But It Surely Wants To Go Up Rising Against US Dollar... | Oanda

Kenny Fisher Kenny Fisher 06.06.2022 23:43
The Australian dollar went on a wild ride late last week. AUD/USD jumped 1.27% on Thursday, only to cough up most of these gains on Friday.  The Aussie is showing little movement today, as the markets eye the Reserve Bank of Australia rate decision on Tuesday. Aussie in calm waters ahead of RBA - MarketPulseMarketPulse RBA poised for back-to-back rate hikes The RBA is widely expected to raise interest rates back-to-back, for the first time since 2013. It’s not clear what the size of the hike will be, with the most likely scenario being a 40-bps increase, which would raise the cash rate to 0.75%. If the RBA opts for a modest 25-bps hike, investors could be disappointed and the Australian dollar could lose ground. The RBA started its rate-hike cycle last month and is expected to raise rates to 3% or even higher, which means that the Bank will be raising rates in the second half of the year and into 2023. The aggressive rate hiking by the RBA will help the Australian dollar keep pace with the US dollar in terms of the US/Australia rate differential. US yields climbed on Friday after the May nonfarm payrolls were stronger than expected. The economy added 390 thousand jobs, above the forecast of 325 thousand and indicating that the labour market remains robust. The report has solidified expectations that the Fed will deliver 50-bps hikes at the June and July meetings. Federal Chair Powell has signalled that the Fed will take a pause from rate hikes in September, but that view is by no means unanimous. On Thursday, Fed Vice Chair Brainard said the Fed should not take a break from rate hikes in September, and that the Fed might continue with 50-bps hikes if inflation doesn’t peak. What makes Brainard’s comments noteworthy is that she is considered a leading dove on the Fed, which is indicative of the hawkish pivot the Fed has taken as inflation continues to accelerate. Echoing Brainard, Fed member Mester said that the Fed had to act aggressively to contain inflation and that could mean an increase at the September meeting. . AUD/USD Technical AUD/USD is testing resistance at 0.7207. Above, there is resistance at 0.7252 There is support at 0.7121 and 0.7076 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Potential Impact of Inflation Trends on the AUD and RBA's Rate Decisions

(JPY) Japenese Yen Hasn't Shocked Markets (Yet?), What Does It Mean For USD/JPY? | Oanda

Kenny Fisher Kenny Fisher 06.06.2022 23:37
The Japanese yen has started the week quietly. In the European session, USD/JPY is trading at 130.63, up 0.15% on the day. Yen steadies after slide - MarketPulseMarketPulse It was a week to forget for the yen, as USD/JPY surged 2.91%, the biggest weekly gain this year. The driver of the yen’s downswing was primarily the rise in US bond yields, which have started the week with gains and are closing in on the 3% level. US yields climbed on Friday after the May nonfarm payrolls were stronger than expected. The economy added 390 thousand jobs, above the forecast of 325 thousand and indicating that the labour market remains robust. The report has solidified expectations that the Fed will deliver 50-bps hikes at the June and July meetings. Ahead of the NFP release, Fed members were sending out hawkish messages to the markets. On Thursday, Fed Vice Chair Brainard said the Fed should not take a break from rate hikes in September, and that the Fed might continue with 50-bps hikes if inflation doesn’t peak. What makes Brainard’s comments noteworthy is that she is considered a leading dove on the Fed, which is indicative of the hawkish pivot the Fed has taken as inflation continues to accelerate. Echoing Brainard, Fed member Mester said that the Fed had to act aggressively to contain inflation and that could mean an increase in September.   BoJ’s Kuroda dismisses tightening With the Japanese yen declining in health and trading above 130 to the dollar, there has been talk that the BoJ might intervene in order to prop up the currency. BoJ Governor Kuroda poured cold water on any such expectations on Monday, stating that monetary tightening was not “suitable”. Kuroda said that the economy was still recovering from Covid and high commodity prices were adding pressure on the economy. He added that the BoJ would adhere to its ultra-loose policy until the Bank achieved its inflation target of 2%. With Kuroda doubling down on the Bank’s accommodative policy, the risk for the yen is clearly tilted to the downside, barring a decline in US Treasury yields. . USD/JPY Technical USD/JPY faces resistance at 1.3124 and 1.3226 There is support at 129.56 and 128.14 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
B2Trader & B2Core With Newest Update - What Can Brokers Expect?

B2Trader & B2Core With Newest Update - What Can Brokers Expect?

B2Brokers Group of Companies B2Brokers Group of Companies 06.06.2022 08:59
Our professionals at B2Broker would like to announce the newly reformed B2Trader & B2Core, including newly implemented features. We strive every day to develop the most accessible, secure, and efficient platforms in the industry. These recent updates are yet another evidence of our commitment to bringing the most innovative solutions. Here are some of the main features of the latest update:  Brand-new commission framework New and unique tips for customers P&L filters and client ID record Upgraded one's performance and stability Fresh interface for more delicate clients' experience We believe you will enjoy our improvements, and we look forward to sharing with you more attractive features! New Commissions Structure We are always active when it comes to looking for new options to empower our client's trading journey. For that reason, we have utterly reevaluated the commission system. It is no longer necessary to set a role for each client since we have installed a flexible group system where your admins set desired conditions for a specific community of users. It will be possible for each of these groups to adjust the commission for the selected tools. This progressive feature gives our customers even more control than they used to have. With B2Trader, we will provide you with the opportunity to push your trading platform to the maximum potential.  Updated UI Our developers successfully added a series of handy tips that significantly boost the experience of every client. Since then, it has become pretty simple to understand the interface of the trading platform. It became possible because every component is now described separately. Furthermore, we will update the tips regularly to make sure they always reflect the latest replacements to the platform. Customers are welcome to choose their level of qualification at the onboarding stage, and there are currently three main statuses: New, Experienced, and Pro. Depending on the user's experience, they are able to choose different outlines that clarify every detail of the trading platform. For instance, if a client decides to choose a Newcomer alternative, they will obtain a step-by-step guide that will show them how to use the platform and how to trade or treat their account. When choosing "Experienced," customers will acquire appropriate information. These cover different topics, such as analysis of financial markets together with risk management. We assure that all newcomers have a great experience and can enjoy every aspect of our platform by offering these various alternatives. Client ID Reports With this latest update, we have reduced monotonous manual operations for our customers. Registration for local financial regulators is currently a simple process. It became a reality because of the inclusion of unique client IDs. Clients' emails and IDs are automatically uploaded to all pages where the user is active. It will include all transfers, transaction/trades, transaction/orders, balance/users, and commission/users. Thanks to this update, complying with regulations has never been easier for our clients. We're honored to achieve such an accomplishment and finally offer it to our valued customers. New Pair Field Update Yet another update is the improved field of creating a new pair. Please, find the buttons: Settings → Markets → Add Market + Edit Market. These hint areas are now enriched with error notifications. From now on, our users have the ability to see what should be entered in the fields and can no longer save an invalid market. This update is certainly going to ensure that all markets are set up in the right way and will function properly. Optimized Filters The Profit and Loss area in the supervisor board has changed as well. Now it includes a filter by year option to provide a more straightforward analysis of the client's data. This field will now present the date the customer's data was last adjusted to make it less complicated to trace changes. The update also includes several other bug fixes and improvements. Conclusion B2Trader and B2Core are the most efficient platforms in the industry that provide traders with many benefits. These two solutions make the trading experience even smoother and more enjoyable. The new series of updates coming in the near future will boost these features even more. Therefore, be sure not to miss them. And if you haven't tried out our platforms, do not hesitate and go ahead!
Risks in the US Banking System: Potential Impacts and Contagion Concerns

Let's Check InstaForex's Trading Plan For EUR/USD & GBP/USD? Check It Out!

InstaForex Analysis InstaForex Analysis 07.06.2022 11:52
Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Even before the opening of the US trading session, the dollar began to steadily strengthen its positions, which is rather strange given the empty macroeconomic calendar. Just like today. In addition, there was also nothing in the news background that could somehow affect the development of events. Thus, what happened most likely lies in the plane of technical factors, which is not surprising in general, since against the background of the absence of obvious fundamental factors, the market switches to technical ones. Another similar situation may hint at the lack of market participants' faith in the prospects of Europe as a whole. After all, representatives of the European Central Bank are already directly talking about the imminent increase in the interest rate, which should be the first since 2011 and should contribute to the strengthening of the euro. However, the general state of the European economy, coupled with the ever-increasing risks of energy shortages, which are most acute in the euro area, cause more and more concerns. Olaf Scholz's trip to Africa in order to find alternative sources of supply is worth it after the decision of the European Union to abandon Russian energy carriers. It is quite obvious that even if Europe can find a replacement for Russian oil and gas, it will cost much more. And this is despite the fact that inflation is not even slowing down, and fuel prices are higher than ever before. In such circumstances, it is difficult to feel a sense of optimism about the European economy.     The EURUSD currency pair has a characteristic amplitude move within the framework of a two-week stagnation. The quote is squeezed between two levels of 1.0636 and 1.0800. It can be assumed that there is a gradual change of trading interest in the market. This may lead to the completion of the correction from the pivot point of 1.0350.     Since the beginning of June, the GBPUSD currency pair has been in a downward cycle from the resistance level of 1.2650. This movement indicates the completion of the correction and the gradual recovery of dollar positions within the main trend. Read more: https://www.instaforex.eu/forex_analysis/313115
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

Australian dollar swings after RBA shocker | Oanda

Kenny Fisher Kenny Fisher 07.06.2022 18:27
The Australian dollar showed some bounce on Tuesday, courtesy of the RBA rate decision. AUD/USD produced a flash spike of 60 points after the move and touched a daily high of 0.7248, but was unable to consolidate.  In the European session, the Aussie is trading at 0.7180, unchanged on the day. RBA surprises with 50bp hike The RBA had a huge surprise up its sleeve, as it delivered a 50bp rate hike, bringing the cash rate to 0.85%. The meeting was live, with the markets had expected a modest 25bp rise, although there were some forecasts of a 40bp increase as well. The super-size 50bp move indicates that the RBA is determined to curb inflation with an aggressive rate-tightening cycle. At the same time, the RBA runs the risk of appearing to be in panic mode with such a large hike and runs the risk of losing credibility if inflation doesn’t start to ease soon. The RBA’s rate statement was not particularly hawkish, considering the massive rate hike. That could explain why the Australian dollar was not able to capitalize on the rate hike, as the spike quickly fizzled. The statement noted that inflation had accelerated more than anticipated and was expected to increase further before declining next year. The Bank expressed confidence that today’s rate hike would contribute to inflation falling “over time”. The statement also noted that the economy was resilient and the labour market remains strong. The US dollar received a boost from US Treasury yields, as the 5, 10 and 30-year yields are all above the 3 per cent level. The upward move in US yields could be related to this week’s USD 96 billion in government bond sales in the 3, 10 and 30-year tenors. Will yields remain above 3% during the week? If so, the dollar could show some strong movement after the CPI release on Friday. . AUD/USD Technical AUD/USD tested resistance at 0.7211 earlier in the day. The next resistance line is 0.7280 0.7158 is under pressure in support. Below, there is support at 0.7069   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Reserve Bank Of New Zeeland Is Likely To Deliver 50bps Rate Hike

RBA joins super-sized club | Oanda

Craig Erlam Craig Erlam 07.06.2022 18:31
Stock markets are back in the red on Tuesday, giving back the bulk of Monday’s gains in a sign of ongoing uncertainty as to the direction of equity markets and the economy.   There is clearly appetite at these levels but that’s not being backed up by momentum of any kind. Hardly surprising given the sheer uncertainty around inflation, interest rates and the economy. Central banks are racing to catch up but that may come at a great cost.   RBA surprises with 50bp increase The RBA overnight became the latest to join the super-sized club, following in the footsteps of the Fed, BoC and RBNZ, among others. The decision to hike by 50 basis points came as quite a shock to the markets, with 25 priced in ahead of the meeting. It was the biggest hike in more than two decades and another sign of policymakers belatedly recognising the urgency of the inflation problem. And there’s plenty more to come.   The ECB is very late to the party but will likely announce an end to net asset purchases on Thursday and a desire to raise rates from next month, bringing the deposit rate out of negative territory in the third quarter. This doesn’t exactly fall into the bracket of recognising the urgency but then it is the ECB, so by its standards perhaps it does.   The BoE was early to the party compared to many of its peers and it’s also been the first to concede defeat on a recession, something others may follow on in the months ahead. If today’s UK BRC retail sales data is a sign of things to come then the BoE is right to be so pessimistic. The cost-of-living crisis has well and truly arrived and the data suggests households are already cutting back. The final PMI data, while much better than the flash reading, was also a big drop from April and reflects the more pessimistic outlook.   One thing the UK won’t have to deal with (yet) is political uncertainty after Boris survived the no-confidence vote. He didn’t exactly do it in emphatic fashion though, leaving many to believe he has merely postponed his departure rather than prevent it altogether.   Another failed break higher Bitcoin is also trading around the same level it has for most of the last month but at least the price action this week has been a little more interesting. A 6% rally on Monday has been followed by a 6% decline today, taking bitcoin back below USD 30,000 and confusing crypto traders in the process. It’s really struggling to hang onto rallies much to the frustration and perhaps even concern of the crypto crowd. This remains a key level and a break to the downside could cause far more stress than it did almost a month ago.   For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

What. A. Plunge! Japanese Yen (JPY) Has Reached 20-Year Low! Let's Have A Look At USD/JPY Chart

Kenny Fisher Kenny Fisher 07.06.2022 18:55
Dollar continues to pummel yen The Japanese yen continues to lose ground. USD/JPY touched the 133 line earlier in the day, as the yen hit a 20-year low. In the North American session, USD/JPY is trading at 132.55, up 0.50% on the day. The dollar index rose as much as 0.39% today and hit its highest level since May 23rd, before giving up these gains. The sharp descent of the yen can be attributed to two factors. First, US Treasury yields are moving higher, and on Tuesday, the 5, 10 and 30-year yields are now above the 3 per cent level. The upward move in US yields could be related to this week’s USD 96 billion in government bond sales in the 3, 10 and 30-year tenors. The dollar has momentum and if Treasury yields remain above 3% and Friday’s US CPI print is high, USD/JPY should respond with further gains. The second factor weighing on the yen is the Bank of Japan’s ultra-accommodative policy. BoJ Governor Kuroda said on Monday that monetary tightening was “not suitable and that the central bank would maintain its ultra-loose policy until the Bank achieved its inflation target of 2.0%. The BoJ has been quick to intervene to defend its yield curve, purchasing JGBs in order to cap yields on 10-year bonds at 0.25%. There has been speculation that the BoJ has a ‘line in the sand’ at which it would intervene to prop up the yen, but the yen continues to fall and touched 133 today with no signs that the BoJ is planning to step in. It should be remembered that Kuroda has stated on more than one occasion that a weak yen is mostly positive for the economy. In addition, surging oil prices are pressuring the yen, as crude oil is priced in US dollars. With US rates moving higher and the BoJ keeping a cap on JGB yields, the US/Japan rate differential continues to widen, and the risk to the yen remains tilted to the downside. . USD/JPY Technical USD/JPY is testing resistance at 1.3226. Above, there is resistance at 1.3368 There is support at 131.24 and 129.56   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen falls to 20-year low - MarketPulseMarketPulse
The Upside Of The EUR/USD Pair Remains Limited

FX Update: JPY dragged lower still on fresh bump in yields.

John Hardy John Hardy 07.06.2022 19:13
Summary:  Global yields posted new cycle highs nearly everywhere yesterday save for in the US, a factor that has held the US dollar back recently. That didn’t stop USDJPY from posting aggressive new highs, however, as the JPY remains under intense pressure from rising yields. Elsewhere, the RBA surprised with a larger hike than most expected, while the calendar focus this week is on the Thursday ECB meeting and Friday May US CPI reading. FX Trading focus: JPY dragged to new cycle low on fresh yield rise Rising global yields are punishing the Japanese yen once again, with all major JPY crosses surging higher again overnight on the fresh pop in yields. USDJPY posted a new 20-year high of 133.00 this morning as the next chart focus is on the 135.00+ highs of 2002 next, and this despite US yields lagging global peers of late (more below). If this rise in yields continues, the Bank of Japan will rapidly find itself in a political pinch due to its insistence on the yield-curve control (YCC) policy under which it caps 10-year JGB’s at 0.25%. Only a strong backdown in yields and commodity prices in coming weeks may be able to save Governor Kuroda from an embarrassing climb-down from its YCC commitment that would unleash tremendous volatility. Stay tuned and beware the volatility potential in JPY crosses. As discussed in Friday’s update, the latest leg of the rise in global bond yields has seen the rise in US yields lagging considerably, as these have not yet posted highs for the cycle even after yesterday’s strong surge, while yields elsewhere hit new cycle highs already late last week. The US dollar did get a bump on weaker risk sentiment yesterday and overnight, but the move has been modest and financial conditions have not tightened. The US dollar only seems to threaten on the strong side when rising US yields also drive a tightening of general financial conditions. We’re well off the highs in the US dollar, but I am reluctant to call a cycle top for the greenback until we get a sense of whether markets can absorb the Fed’s intended QT at its full intended pace of $95B/month by September 1 and we are beyond the trough of the bear market that we suspect is on the way. Among G-10 currencies only the USDCAD pair strongly suggests a cycle top for the US dollar. The AUDUSD pair is the possibly next shoe to drop if the US dollar continues to weaken. Currently, that AUDUSD chart is in limbo, for the USDCAD pair, the USD has capitulation lower. AUDUSD is the next possible focus for cementing a USD reversal if last week’s highs above 0.7250 fall. Chart: AUDUSDThe RBA hiked the policy rate more than most expected, choosing a full 50-basis point move to take the cash target rate to 0.85% rather than an odd-sized hike many were expecting of 40 bps to get the rate back on a “normal” 0.25% increment of 0.75%. This suggests more urgency to normalize policy than the market was expecting. The reaction in AUDUSD was modest even as AUDNZD, for example, jumped to new multi-year highs. Major AUDUSD resistance at the converging moving averages around 0.7230-60 held last week. The bearish case remains in limbo, however, after the pair reversed so aggressively back above the major 0.7000 chart level. A shift in the narrative on commodities (to the downside) and a weaker global growth outlook and/or a new tightening of financial conditions is likely needed for the old bear trend to reassert, with a move below 0.7000 to prove the point on the chart. Source: Saxo Group The ECB meeting this Thursday arrives after the market has raised the anticipated ECB policy trajectory aggressively over the last couple weeks. The bank has thoroughly guided for an end to  bond purchases this month, with the first hike to come in at the July meeting. Looking further out the curve, the ECB policy rate through the December ECB meeting is now marked at +0.66% versus below 0% as recently as early April. Since mid-May, the rise in the ECB yield trajectory at the front end of the curve has outpaced that of the Fed by around 25 basis points.  Can the ECB exceed these aggressive market expectations? Assuming that the ECB isn’t set to shock relative to its own guidance for July lift-off, a hawkish surprise would seem more likely to take the form of a surprisingly strong upgrade to staff inflation projections, which are due for a refresh after the March set of projections. In March the 2022-24 CPI was projected at 5.1%, 2.1%, and 1.9%. Particularly the 2024 projection being revised above 2.0% might be seen as a strong signal. This might have the market solidifying expectations for 50 basis points moves starting in September (market currently 50/50 on whether the September meeting will see a 25-bp or 50-bp move). The final versions of the various PMI surveys rarely see significant adjustments, but the final May UK Services PMI print out this morning showing 53.4, up from the flash estimate of 51.8. Oddly, this wasn’t what suddenly lit a modest fire under sterling this morning about a half hour before that data release. Sterling has been gyrating all over the place since Boris Johnson survived last night’s party leadership confidence vote 211-148. Political observers still suggest his days may be numbered, but the market implications of political uncertainty aren’t clear – still impressive that EURGBP has steered clear of the key 0.8600 area – may need to wait for the ECB reaction to get a firm sense of that pair’s next move. Table: FX Board of G10 and CNH trend evolution and strength.The JPY under massive new pressure on the rise in global yields, while CAD leads the charge higher, with AUD not far behind. In momentum terms, one of the more interesting developments is the CHF dropping sharply to start this week. Next week features an SNB meeting. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Interesting to note the weak Scandies as EURNOK and EURSEK have both recently been at tipping points to trend lower, but aren’t doing so. Elsewhere, the USDCHF attempt to flip the trend back higher and NZDUSD to flip lower despite the current status of AUDUSD and USDCAD are interesting subplots as well. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – US Apr. Trade Balance 1230 – Canada Apr. International Merchandise Trade 1400 – Canada May Ivey PMI Source: FX Update: JPY dragged lower still on fresh bump in yields. | Saxo Group (home.saxo)
Industrial Metals Outlook: Assessing the Impact of China's Stimulus Measures

EUR/USD analysis on June 7. The European currency continues to build a corrective wave

InstaForex Analysis InstaForex Analysis 07.06.2022 19:28
Relevance up to 15:00 2022-06-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   The wave marking of the 4-hour chart for the euro/dollar instrument continues to look convincing and does not require adjustments. The instrument has completed the construction of the descending wave 5-E, which is the last in the structure of the descending trend section. If this is indeed the case, then at this time the construction of a new upward trend section has begun. It can turn out to be three-wave, or it can be pulsed. At the moment, two waves of a new section of the trend are already visible. Wave a is completed, and wave b can take a three-wave form, and in this case, the decline in the quotes of the instrument will continue with targets located around the 6th figure or slightly lower. Wave 5-E turned out to be a pronounced five-wave, so its internal wave marking is beyond doubt. The only option now in which the decline of the euro can resume for a long period is the rapid completion of the correction section of the trend and the construction of a new downward impulse. However, to identify this option, you need at least the completion of the ascending wave c, the targets of which are located about 9-10 figures. There are no news and reports, and the dollar enjoys a pause The euro/dollar instrument fell by 40 basis points on Tuesday. The news background of today was simply absent, so the market moved the instrument only based on wave markup. And the wave marking is now almost unambiguous - it assumes a further decrease in the instrument by another 50-100 basis points. Already on Wednesday and Thursday, the news background for the instrument will be much stronger, but this does not mean that demand for the European currency will begin to grow again. American inflation may cause a decline in the European currency and the construction of the corrective wave b will be completed. And on Thursday, the ECB should announce the completion of the APP program or its readiness to raise the interest rate at the next meetings, then the demand for the European currency will already grow. Thus, the wave analysis and the news background still look very harmonious with each other. It is the European Central Bank that can fail. Although the heads of the central banks of the Eurozone have already openly stated the need to raise the rate by 50 basis points, this does not mean that the ECB will decide on such a step. And for sure it will not dare to take such a step in June. By and large, the pressure on the ECB's position is exerted by the inflation indicator, which continues to grow and will continue to do so in the near future. The European economy is showing very modest growth, but this growth still allows you to raise the rate once or twice. I think that in 2022, we will still see a tightening of monetary policy. In addition, the APP program, according to which the ECB still buys securities for not very significant amounts monthly, should be completed this summer. Thus, I believe that monetary policy in the European Union will tighten, but at a very slow pace, much lower than in the United States. This should be enough for the euro currency to build at least a corrective section of the trend. General conclusions Based on the analysis, I conclude that the construction of the downward trend section is completed. If so, then now you can buy a tool with targets located near the estimated mark of 1.0947, which equates to 161.8% Fibonacci, for each MACD signal "up". It is best to wait for the completion of the construction of wave c-b, its low should be located slightly below figure 6.     On a larger scale, it can be seen that the construction of the proposed wave E has been completed. Thus, the entire downtrend has acquired a complete look. If this is true, then in the future for several months the instrument will increase with targets located near the peak of wave D, that is, to the 15th figure.   Read more: https://www.instaforex.eu/forex_analysis/313184
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

USD/JPY analysis for June 07, 2022 - Potential for the upside continuation

InstaForex Analysis InstaForex Analysis 07.06.2022 19:46
Relevance up to 17:00 2022-06-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical analysis: USD/JPY has been trading in strong upside cycle and I see potential for further upside continuation. Bullish continuation al patterns are preferable. Trading recommendation: Due to the strong upside cycle on both short and mid term, I see potential for bullish continuation. Watch for buying opportunities on the pullbacks with the upside objectives at the price of 132.90 and 135.00. MACD is showing positive reading, which is good sign that trend is still bullish. Stochastic oscillator is showing potential oversold condition and potential for the rally. Key support s set at the price of 132.20   Read more: https://www.instaforex.eu/forex_analysis/279155
Inflation Outlook: Energy Prices Drive Hospitality, Food Inflation Eases

FX Pairs: Cable - Has British Pound Strengthened? Let's Have A Technical Look At GBP/USD

InstaForex Analysis InstaForex Analysis 07.06.2022 21:27
Relevance up to 20:00 2022-06-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Overview : The GBP/USD pair set above strong support at the level of 1.2548, which coincides with the 50% Fibonacci retracement level. This support has been rejected for four times confirming uptrend veracity. Hence, major support is seen at the level of 1.2548 because the trend is still showing strength above it. Accordingly, the pair is still in the uptrend from the area of 1.2548 and 1.2560. The GBP/USD pair is trading in a bullish trend from the last support line of 1.2548 towards the first resistance level at 1.2614 in order to test it.     This is confirmed by the RSI indicator signaling that we are still in the bullish trending market. Now, the pair is likely to begin an ascending movement to the point of 1.2666. The level of 1.2666 will act as second resistance and the double top is already set at the point of 1.2666. In overall, we still prefer the bullish scenario as long as the price is above the level of 1.2666. Furthermore, if the GBP/USD pair is able to break out the top at 1.2666, the market will climb further to 1.2726. On the other hand, if the GBP/USD pair fails to break out through the resistance level of 1.2666; the market will decline further to the level of 1.2520 (daily support 2). then this scenario may be invalidated. But in overall, we still prefer the bullish scenario.     Read more: https://www.instaforex.eu/forex_analysis/279172
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

Can We Call USD/JPY Record-Breaking FX Pair!? US Dollar Against Japanese Yen Has Reached 20-Year-High. Has RBA Helped Australian Dollar (AUD)?

Marc Chandler Marc Chandler 07.06.2022 21:21
June 07, 2022  $USD, consumption, Currency Movement, ECB, Japan, RBA, Trade, UK Overview: The jump in US interest rates helped lift the greenback to new 20-year highs against the Japanese yen and pushed the euro back below $1.07. US equities saw initially strong gains pared and this set the tone for today’s activity. Most of the equity markets in the Asia Pacific region fell, but Japan and China. Europe’s Stoxx 600 is giving back more than half of yesterday’s 0.9% gain. US futures are off about 0.5%. The US 10-year yield is off a couple of basis points but still above the 3% threshold. European yields are lower and the peripheral premium over the core is narrowing today. The greenback is stronger against all the major currencies, including the Australian dollar, where the central bank delivered a larger than expected half-point hike. Emerging market currencies are also mostly lower. The South African rand and Mexican peso are the two notable exceptions. Gold slipped to $1837, a four-day low, but has recovered to approach $1850. July WTI is in a narrow range below $120. It is holding above the five-day moving average near $117.50. US natgas prices are at new highs near 9.50, while Europe’s benchmark is off for the third consecutive session and briefly traded at four-month lows. Iron ore extended its gains for the fourth consecutive session and reached its highest level since late April. On the other hand, copper is off for the third session as it extends the pullback that began at the end of last week. Lastly, July wheat has come back offered after yesterday’s 5.10% gain.   Asia Pacific The Reserve Bank of Australia surprised the market by delivering a 50 bp hike earlier today. It was the largest move in more than two decades. Saying that the central bank will "do what is necessary" to check inflation, Governor Lowe signaled additional rate hikes in the coming months. There are six meetings left this year and the swaps market has discounted nearly 235 bp of tightening. The economy is solid and new government is pushing for a 5.1% hike in the minimum wage (to be decided later this month) and new fiscal measures. Australia's two-year yield jumped 17 bp and at 2.84% is back to a small premium over the US, the most in nearly a month. The currency initially rallied through yesterday's high (~$0.7230) to reach almost $0.7250 before returning to little changed levels straddling the $0.7200 level. The key driver of the dollar-yen exchange rate is the 10-year US Treasury yield. On a purely directional basis, the correlation over the past 30 session is more than 0.8. On the basis of change, the correlation is a little above 0.55 and has not been above 0.6 since late March. Given the nearly 10 bp jump in the US 10-year yield, the dollar's push higher against the yen is understandable. BOJ Governor Kuroda's comment that a steadily depreciating yen would be positive for the Japanese economy seemed excessive, even though the Swiss franc declined by more than the yen yesterday. Many businesses have expressed concern about the yen's weakness. After all, corporate strategies had evolved in a strong yen environment, like the offshoring of production. The price of Brent has risen by around 90% since early December and the yen has declined by about 14.5% against the dollar at the same time. A weaker yen boosts inflation but is the type of price pressures the BOJ would arguably look pass. Large companies are expected to be able to better cope in the changing economic environment. The Topix 100 is off a little more than 2.25% this year, while the Mothers Index (start-ups) is off 33%. Still, it shows one reason that a Plaza-like agreement is unlikely. The BOJ does not want it (which is not to suggest any other member is calling for one). Separately, Japan's April cash earnings rose 1.7% after the March increase was revised to 2% from 1.2% (year-over-year). This, coupled with the lifting of Covid restrictions helped boost household spending 1% in April month-over-month, and pare the year-over-year decline to 1.7% from -2.3%. China's May reserves unexpectedly rose last month. It was the first increase of the year. The $8 bln increase is about a quarter of a 1% gain to almost $3.128 trillion. It is practically a rounding error and likely accounted for by the appreciation of other reserve currencies against dollar. In May, the euro rose by 1.8%, the Australian and Canadian dollars, by about 1.6%, the yen by 0.8%, and the Russian rouble by nearly 15%. Note too that the 10-year Treasury rallied, and the yield fell nearly 9 bp. The dollar rose to JPY133.00, a new 20-year high. It is the sixth gain in the past seven sessions, and it has risen by more than 4.5% during this run. The high from 2002 was a little above JPY135.00. The pace of the move may again spur cautionary comments from officials. Initial support is seen by JPY132.50. The Australian dollar has traded on both sides of yesterday's range (~$0.7185-$0.7230), and technically, the close is important, if it is outside of that range. In the European morning, it is spending time below yesterday's low. The Aussie is threatening to fall for the fifth session in the past six. Recall that as of the end of May, speculators in the futures market had the largest net short Australian dollar position in around two months. The greenback gapped higher against the Chinese yuan today and hardly looked back. The move was not particularly large. The US dollar rose 0.3% to around CNY6.6750. Last week's high was set near CNY6.7060 ahead of the Friday holiday. The PBOC set the dollar's reference rate at CNY6.6649. The median projection (Bloomberg survey) was CNY6.6638. Europe Prime Minister Johnson survived the confidence vote as widely expected, but it was a tighter vote than anticipated. He won 211-148. About 40% of the Tory MPs rebelled. It was more than had sought to force Johnson's predecessor May out. She was out within six months and much of the press accounts speculate on the damage inflicted on Johnson. Meanwhile, the Tories are seen losing the two special elections later this month, and some polls suggest the Tories would lose a snap national election. Technically, the party rules protect Johnson from another vote of confidence for a year. However, the next important opportunity may be the Conservative Party conference in October. Meanwhile, the economic challenges, and the cost-of-living crisis will likely deepen, even though the sharp drop in the May services and composite were pared in the revision. The consumer continues to be squeezed as the 1.5% decline May BRC sales showed. It is the third consecutive monthly decline.  Amid talk that some EMU members may seek an immediate end to the bond buying, reports suggest others may propose a new mechanism to prevent fragmentation (divergence). This seems unlikely for three reasons. First, the ECB has a great deal of flexibility with the reinvestment of maturing proceeds as well as being able to bring forward by up to 12 months other future maturities. Second, a facility for this already exists: The European Stabilization Mechanism. Thirdly, a similar idea was proposed last year--a precautionary instrument but was rebuffed by several creditor nations demanding conditionality. The compromise struck was for the flexibility in reinvesting. German factory orders fell 2.7% in April after the March decline was revised to 4.2% from 4.7%. The data is very disappointing. The median forecast (Bloomberg's survey) looked for a small gain (0.4%). The war in Ukraine and China's lockdowns took a toll. Foreign orders fell 4% in April after a 5.8% fall in March and a 2.4% decline in February. Orders from other eurozone members fell 5.6% after increasing 4.4% in March. Non-eurozone orders slumped 3% in April after a dramatic 11.2% plunge in in March. Domestic orders were off 0.9% after a 1.6% drop in March. There had risen 0.4% in February. Germany reports April industrial output figures tomorrow. The median forecast (Bloomberg) for a 1.2% gain (after the 3.9% drop in March) seems at risk of being too optimistic. The euro slipped to a three-day low near $1.0665 in late Asian turnover and bounced to the session high, a few ticks above $1.07 in early European activity. There is an option for slightly more than 1 bln euros at $1.0730 that expires today, which may be sufficient to cap upticks. For a little more than two weeks, the euro has been trading broadly sideways in a $1.06-$1.08 trading range. It can persist until at least Thursday's ECB meeting. Sterling barely reacted to the initial news that Johnson survived the vote of confidence. However, today, sterling broke out of the four-day consolidation to the downside, to record a low near $1.2430. That is the lowest sterling has been since May 18. It bounced back to trade to almost $1.2535 in the European morning. If that is not the high, we suspect it is close.  America Given the attention Microsoft drew recently when it said the exchange rate developments cut earnings by $460 mln, and other software giants also noted the exchange rate, the April trade figures may draw attention. However, there are two mitigating factors. First, the challenges to the software companies were not that the dollar made exports less competitive but that the dollar's appreciation made the translation of their foreign sales worth less for the dollar-functioning company. The trade figures have little to say about that. Second, US exports soared by 19% in March to a new record high of $180.8 bln (not seasonally adjusted, nominal terms). And we know from the advanced goods trade report that April good exports rose another 3%. Still, the important takeaway from the trade figures is that next exports are unlikely to be as large of a drag in Q2 as they were on growth in Q1. Recall trade subtracted a little more than three percentage points from Q1 growth. Consumer credit (excludes mortgages) soared by a record $52.4 bln in March. The April report comes late in today's session. The median forecast in Bloomberg's survey is for a $35 bln rise. This is would another strong increase. Consider the average in 2019 was $15.4 bln a month. Consumer credit fell in 2020 and rose by almost $20.6 bln on average last year. It seems that after a surge in consumption, and in the face of rising prices, households are sustaining, even if shifting the basket of goods, they are purchasing, consumption by four things:  more people working, drawing down savings, use of revolving credit, and equity withdrawals on mortgage refinances. Borrowing from the past and future to fund current consumption seems to be characteristics of late cycle behavior.  Canada also reports merchandise trade figures for April today. It is experiencing a positive terms-of-trade shock, and this has resulted in the trade surplus swinging into surplus. In 2019, the average monthly goods deficit was C$1.5 bln. Last year, the average was almost C$380 mln. The monthly average in the Q1 22 was C$3 bln, the highest since 2008. Separately, Canada's two-year yield has risen even faster than in the US. Since the end of April, the 10 bp US premium has become a swung to a nearly 30 bp discount. This is the most since late last year. The US dollar extended the rebounded that began yesterday against the Canadian dollar. The greenback recorded a low near CAD1.2535 yesterday and recovered to almost CAD1.26. The low had not been seen since April 21. Follow through buying today lifted the US dollar to almost CAD1.2620, but it is straddling the CAD1.26 area near midday in Europe. A move, and ideally, a close above CAD1.2630, lifts the greenback's technical tone, but the CAD1.2650-CAD1.2660 area may offer more formidable resistance. The US dollar recorded an outside day against the Mexican peso yesterday, trading on both sides of the pre-weekend range. However, the close was neutral and the consolidation phase looks set to continue. Resistance is seen near MXN19.62 initially with support around MXN19.50. Lastly, note that after trade figures this morning, Chile's central bank is expected to hike its overnight target rate by 75 bp to 9%. It has hiked rates at alternating meeting this year, but it hiked 125 bp in May. Tomorrow, May inflation figures will be released. The May CPI is expected to have jumped to 11.4% from 10.5% year-over-year. The quarterly monetary policy report is also due tomorrow. Officials want to keep their options open but also want to reassure businesses and investors that the tightening cycle in nearly over.   Disclaimer
What's ahead of Euro against greenback today? Let's look at Stefan Doll's review

1 EUR To USD (US Dollar) Forex Rate? EUR/USD Has Been Experiencing A Bumpy Road

InstaForex Analysis InstaForex Analysis 07.06.2022 21:19
Relevance up to 20:00 2022-06-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Overview : The trend of EUR/USD pair movement was controversial as it took place in a narrow sideways channel, the market showed signs of instability. Amid the previous events, the price is still moving between the levels of 1.0634 and 1.0732. Also, the daily resistance and support are seen at the levels of 1.0732 and 1.0634 respectively. Therefore, it is recommended to be cautious while placing orders in this area. So, we need to wait until the sideways channel has completed. Yesterday, the market moved from its bottom at 1.0634 and it continued to rise towards the top of 1.0711. Today, in the one-hour chart, the current rise will remain within a framework of correction.     However, if the pair fails to pass through the level of 1.0732, the market will indicate a bearish opportunity below the strong resistance level of 1.0787 (the level of 1.0787 coincides with the double top too). Since there is nothing new in this market, it is not bullish yet. Sell deals are recommended below the level of 1.0787 with the first target at 1.0634. If the trend breaks the support level of 1.0634, the pair is likely to move downwards continuing the development of a bearish trend to the level 1.0598 in order to test the daily support 2 (horizontal green line). This would suggest a bearish market because the RSI indicator is still in a positive area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.0598 with a view to test the daily support 2.   Read more: https://www.instaforex.eu/forex_analysis/279170
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

EURUSD Investing: Focusing On Major FX Pair - EUR/USD? Have A Look At This Technical Review

InstaForex Analysis InstaForex Analysis 07.06.2022 21:04
Relevance up to 19:00 2022-06-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   In late September, Re-closure below the price level of 1.1700 has initiated downside-movement towards 1.1500 where some recovery was witnessed. Shortly after, Price levels around 1.1700 managed to hold prices for a short period of time before another price decline took place towards 1.1200. Then the EURUSD has temporarily moved-up within the depicted movement channel until downside breakout occurred recently. Since then, the price zone around 1.1500 has applied significant SELLING pressure when a valid SELL Entry was offered upon the previous ascending movement towards it. Shortly after, the EURUSD looked oversold while approaching the price levels of 1.0800. That's where the recent upside movement was previously initiated. That's why, the recent movement towards 1.1200 was considered for another SELL Trade which is already running in profits now. The current ascending movement above 1.0600 enabled further advancement towards 1.0850 where bearish rejection can be applied.     Read more: https://www.instaforex.eu/forex_analysis/279168
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

USD/CAD: Ivey PMI And BoC Are Boosting Canadian Dollar (CAD)

Kenny Fisher Kenny Fisher 07.06.2022 19:17
The Canadian dollar has extended its gains on Tuesday. USD/CAD is trading at 1.2545, down 0.26% on the day. The Canadian dollar received a boost as Ivey PMI for May climbed to 72.0, up sharply from 64.3 in April. The PMI hit a record high of 74.2 in March. BoC hiking rates, cutting assets The Bank of Canada is matching the Federal Reserve’s aggressive tightening cycle, after back-to-back 50bp rate hikes for the first time since 2000. Inflation accelerated to 6.8% in April and remains Public Enemy number one. Although we’re not yet seeing an ‘inflation peak’, the results from the sharp rise in interest rates can be seen in the housing market, as home sales fell 12.6% MoM in April. As is the case with other major central banks, the BoC is concerned about inflation expectations becoming unanchored, which makes it critical that the BoC maintains credibility that it will bring inflation down. Aside from hiking interest rates, the BoC commenced quantitative tightening (QT) in April, whereby government bonds are no longer being replaced once they mature. The BoC is committed to QT becoming an important plank in its tightening programme, with a plan to slice its Canadian government bonds total from about CAD 440 billion to CAD 280 billion by the end of 2023. The BoC’s hawkish monetary policy is helping the Canadian dollar keep pace with its US cousin, at a time when the Fed is also tightening aggressively and US Treasury yields are moving higher. Yields on 5, 10 and 30-years are currently above the 3 per cent level. The BoC will need to continue to keep pace with the Fed; otherwise, the US/Canada rate differential will widen and send the Canadian dollar lower. . USD/CAD Technical There is support at 1.2608 and 1.2548 USD/CAD is testing resistance at 1.2664. Above, there is resistance at 1.2775 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Economic Calendar For July 21st. EUR/USD And GBP/USD - Trading Ideas

Lower Demand For FX Cable (GBP/USD)? British Pound Against US Dollar Analysis

InstaForex Analysis InstaForex Analysis 07.06.2022 19:38
Relevance up to 16:00 2022-06-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   For the pound/dollar instrument, the wave markup continues to look very convincing and does not require adjustments. The downward section of the trend is completed, and the wave e-E, although it has taken a rather complex form, is also five-wave in the structure of the five-wave downward section of the trend, as well as for the euro/dollar instrument. Thus, both instruments presumably completed the construction of downward trend sections. According to the British, the construction of an upward section of the trend has begun, which is currently interpreted by me as a corrective one. I believe that it will turn out to be three-wave, but there is also a second option, in which it will take a pulsed, five-wave form. Now, presumably, the construction of a corrective wave b is continuing, after which wave c will begin with targets located around 30 figures. Wave b can take a three-wave form, as with the euro/dollar instrument. I will note once again that the wave markings of the euro and the pound are very similar now, so we can expect that both currencies will move approximately the same in the next few weeks. There is no news background and the dollar rules the ball The exchange rate of the pound/dollar instrument decreased by 40 basis points on June 7. However, if we consider the whole wave picture holistically, the decline in the British dollar in the last few days looks rather weak. Of course, the news background, or rather its absence, reduces the market's interest in trading. However, I believe that at the same time, the market is very correctly using the pause that has arisen to build a corrective wave. And when important data begins to arrive, the demand for the Briton may grow again. I can't make a clear conclusion that this is exactly how it will be, but there are times when the wave markup is ambiguous, that is, it assumes several scenarios. This is not the case. Over the past few months, there has not been a single situation where it would require additions or adjustments. Once the impulse downward trend section is completed, it means that we must see three waves up. An interesting event happened yesterday in the UK. Unexpectedly for many, the Conservative Party decided to announce a vote of no confidence in Boris Johnson and failed in its desire. The Prime Minister has collected enough votes to stay in his seat, but the bell for the British prime minister is very bad. I cannot say that Boris Johnson is the best prime minister in the history of Britain. Most likely, this is not the case, but still, the personality is quite charismatic. The Briton was not too interested in this news, and given the absolute identity of the movement of the euro/dollar and pound/dollar instruments, it can be concluded that the market did not show any interest in this event. Thus, now we are waiting for the report on American inflation, which will be released tomorrow. Now it is unclear whether it will decline, as it was in April, or resume growth. Therefore, I do not undertake to make forecasts for this indicator. But if the real value surprises the market, then the movements on both instruments may be strong. General conclusions The wave pattern of the pound/dollar instrument still assumes the completion of the construction of wave E and the entire downward trend segment. Thus, I now advise buying the British for each MACD signal "up" with targets located above the peak of wave a, not lower than the estimated mark of 1.3042, which corresponds to 76.4% Fibonacci. Under certain circumstances, wave marking can become very complicated, but now there is no reason to assume this.   At the higher scale, the entire downward trend section looks fully equipped. Therefore, the continuation of the decline of the instrument below the 22nd figure is postponed indefinitely for the time being. Wave E has taken a five-wave form and looks quite complete. The construction of a minimum three-wave ascending trend section has begun. Read more: https://www.instaforex.eu/forex_analysis/313188
Chinese Data Shakes Dollar, US Stocks Higher Amid Disinflation Concerns and Bank Earnings Awaited

Will British Pound (GBP) FX Pairs - EUR/GBP And GBP/USD (Cable) Drop Soon? What's The Impact Of The No Confidence Vote? Has RBA Rate Hike Helped AUD? | ING Economics

ING Economics ING Economics 07.06.2022 11:07
Markets appear to be overestimating the policy implications of a possible change in UK leadership, which explains the big GBP swings around Monday's no-confidence vote, which the PM narrowly survived. We see downside risks for the pound, but not related to political noise. Elsewhere, JPY remains on a slippery slope, as does AUD despite the RBA's 50bp hike Britain's Prime Minister Boris Johnson leaves after attending a cabinet meeting in London Source: Shutterstock USD: Yen underperformance in focus Global risk sentiment started to weaken yesterday during the US trading session and stock indices have opened lower across Western markets today. Let’s see whether this triggers some recovery in the bond market, after another material correction higher in yields yesterday has once again proven to be narrowly dollar-positive. The yen remains the major victim in the higher-yield environment, with USD/JPY breaking fresh two-decade highs and currently trading close to the 133.00 mark. At a time when the prospect of Fed tightening is a major driver of USD strength, the sharply widened differential with the ultra-dovish Bank of Japan surely warrants a sharp rise in USD/JPY. Yesterday, BoJ Governor Haruhiko Kuroda firmly reiterated that no tightening plans are under discussion, so it may be down to FX intervention (or the threat to deploy it) by Japanese authorities to stabilise the battered yen. When USD/JPY was last trading above 130.00 – in May – it appeared that verbal intervention may have been enough to stop the JPY selloff. Still, most of the steam out of the USD/JPY was taken from an actual correction in Treasury yields from the 3.12% peak throughout May. Now, markets are seriously testing Japanese authorities’ determination to act in support of the currency, and mere verbal intervention may not prove enough this time. For today, some potential correction in global yields if risk sentiment deteriorates may offer a breather to the yen, but unless we see a material recovery and stabilisation in the currency, we’ll likely hear more on FX intervention in Japan by the end of the week. Looking back at the US, the data calendar is very light today and will remain so until Friday, when inflation numbers for May are released. Some risk-off today may offer some support to low-yielders but apply pressure to higher-beta currencies, and we think the dollar will remain broadly supported on balance, as the underlying stories of Fed tightening and good US economic momentum continue to put a floor under the greenback. EUR: Gently pressing lower EUR/USD has broken back below the 1.0700 mark, largely on the back of widespread dollar strength. We’ll have a bunch of non-market moving data out of the eurozone today and tomorrow, but we might see a decrease in EUR volatility relative to other G10 currencies as a “wait-and-see” approach dominates price action ahead of the European Central Bank announcement on Thursday. Here is our preview of the meeting. As we discussed in yesterday’s FX Daily, the bar for a hawkish surprise on Thursday is set quite high and we see some downside risks for EUR/USD. For today, we expect either some stabilisation or another marginal depreciation in the pair as external factors dominate, and we could see it test the recent 1.0627 low. GBP: Political impact may fade soon Prime Minister Boris Johnson survived a no confidence vote yesterday evening, although as many as 148 party members voted to oust him. This is a narrower victory than the one secured in December 2018 by former PM Theresa May, who resigned six months later. According to the rules, Johnson cannot face another no confidence vote for a year, but lots of commentators are making the point that when this has happened before, leaders have often struggled to carry on beyond a few months given the open division in the party. Accordingly, uncertainty surrounding the leadership is unlikely to fade despite Johnson winning last night’s vote. That said, we currently cannot see any clear implication for economic policy and – by extension – for the pound’s fundamentals. Looking at yesterday’s swings in the pound, we must remember that UK markets were reopening after a four-day break and that might have contributed to increased trading volumes on GBP. At the same time, it is clear that markets attached some positive implication to the currency from a change in leadership in the UK, and the bigger drop this morning may instead signal some concerns of political instability ahead as the Conservative party appears quite divided and the Prime Minister weakened. However, we think markets are overpricing the impact of recent political noise on the UK economy and we expect volatility in the pound to decrease over the coming days, with the focus potentially shifting back to other drivers such as the Bank of England's policy or a slowing economic outlook. In our view, downside risks to the pound persist, but they are not strictly linked to the recent political developments. EUR/GBP may soon touch 0.8600 while cable may extend the drop to the 1.2300-1.2350 area in the near term. AUD: Still vulnerable despite RBA 50bp hike The Reserve Bank of Australia raised interest rates by 50bp, above the market (25bp) and consensus (40bp) expectations. While flagging the risk of a 50bp move, we thought that the RBA still wanted to “do less” compared to the Fed in regard to tightening. Now, this bigger-than-expected hike means that the RBA has given itself some extra time to turn a bit more data-dependent and possibly default to 25bp increases in the coming meetings even if the Fed goes on with 50bp hikes. We discuss all this in our RBA Review piece, where we also highlight the reasons behind the very short-lived positive reaction by the Aussie dollar. In our view, this is another testament to how short-term rate differentials have de-linked from AUD/USD dynamics and how markets are still reluctant to turn less bearish on AUD given its exposure to China’s clouded demand outlook. We continue to expect a drop to 0.7000 over the coming weeks in AUD/USD. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/AUD Pair May Have The Potential To Continue Its Decline

Once Again (USD) US Dollar Is Leading The Pack And Outperforming Weak Japanese Yen (JPY). USD/JPY Rallies | Saxo Bank

Saxo Bank Saxo Bank 07.06.2022 18:34
Summary:  USD trades higher after US10y yield trades back up above 3.0% while JPY underperform as rate differential comes back in play. USDJPY vols are sharply higher with 1 month up 2 vol since Friday close and risk reversals has flipped back to favor calls, 1 month now 0.25 for topside. Saxo Bank publishes two weekly FX Options Market Update reports covering changes and updates on the FX Options and FX Volatility market. They describe changes in FX volatility levels, risk premium and ideas how to trade based on these. FX volatility, source Saxo Bank. Vol column: At-the-money volatility for the given maturity. 1w column: Change of the at-the-money volatility for the given maturity over the last week. Source: Bloomberg, Blue: USDJPY spot, Black: USDJPY 1 month vol USD trades stronger after US10y yield trades back up above 3.0% and JPY is sharply lower as rate differential comes back in play. USDJPY spot is up 200 pips from Friday close and touched 133.00 highs this morning, this is the highest level in 20 year. Vols are sharply higher with 1 month USDJPY up 2 vol from Friday, now trading around 11.65, while 1 week is up 2.5 vol to 12.0. The whole curve is lifted with 1 year up 1 vol to currently trade 10.0. Risk reversals have flipped back to favor USDJPY calls out to 9 months with 1 month trading 0.3 for calls and 1 week at 0.60. The sharp move higher in vol has pushed the risk premium to just above 2.0 vol which makes USDJPY the most expensive currency pair in G10. Next resistance comes in at 135-136 area and above that there is no targets before the 1998 highs at 147.66. We can’t rule out some corrections given the magnitude and speed of the recent move and we can expect BoJ to come in and try talk down UDSJPY when we get closer to 135. The trend is higher and the 135-136 resistance could easily be taken out if US10y makes new highs above 3.20. With that said we like to sell short dated USDJPY call with strikes at or above 135 after the sharp repricing of vol and risk reversals. Sell 1 week 135.00 USDJPY callReceive 20 pips Alternative Sell 2 week 136.00 USDJPY callReceive 30 pips Spot ref.: 132.85 Source: Saxo Bank The Top/Bottom charts shows the top 5 and bottom 5 values/changes for at-the-money vol, risk reversal (RR) and risk premium of the 45 currency pairs we are tracking. Risk premium: Implied (Imp) minus realized volatility. A positive risk premium means implied volatility trades above realized volatility, i.e. the implied volatility can be seen as “rich”. Change: The difference between current price/volatility and where it closed 1w ago. FX Options Trading: You should be aware that in purchasing Foreign Exchange Options, your potential loss will be the amount of the premium paid for the option, plus any fees or transaction charges that are applicable, should the option not achieve its strike price on the expiry date If you write an option, the risk involved is considerably higher than buying an option. You may be liable for margin to maintain your position and a loss may be sustained well in excess of the premium received. By writing an option, you accept a legal obligation to purchase or sell the underlying asset if the option is exercised against you; however far the market price has moved away from the strike. If you already own the underlying asset that you have contracted to sell, your risk will be limited. If you do not own the underlying asset the risk can be unlimited. Only experienced persons should contemplate writing uncovered options, then only after securing full detail of the applicable conditions and potential risk exposure. Learn more about FX Options: Forex Options – An introduction Forex Options – Exotic options Forex Options - Webinars   Source: Saxo Bank
India: Reserve Bank hikes and keeps tightening stance

Indian Rupee: How Will 1 USD To INR Change In The Near Future? Reserve Bank Of India Hiked The Interest Rate!

ING Economics ING Economics 08.06.2022 09:45
A pick up in the pace of tightening by India's Reserve Bank indicates that the inflation threat is being taken seriously Reserve Bank of India Governor Shaktikanta Das 4.90% Repurchase rate   Higher than expected 50bp, the mode not the median While more forecasters were expecting the RBI to hike by 50bp today than by any other number, the median, which is what is usually referred to as the consensus expectation, was for a hike of only 40bp. Even so, the market response has been relatively muted. USD/INR started today trading at about 77.69, slightly stronger than at the end of trading yesterday, but it weakened throughout the day and experienced only the most fleeting of rallies on the announcement.  India inflation and policy rates india inflation Source: CEIC, ING Governor's statement indicates more to come The governor's statement is well worth a read and contains a number of useful pointers about the path ahead. Here are some of the highlights we note, together with our interpretation:  "The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth. It may be noted in this context that the repo rate still remains below its pre-pandemic level". The pre-pandemic repo rate was 5.15%, so today's hike still leaves it 25bp lower than it was then. At a minimum, there is this much more tightening to come.  "There are growing signs of a higher pass-through of input costs to selling prices. The MPC noted that inflation is likely to remain above the upper tolerance band of 6 per cent through the first three quarters of 2022-23". We are likely to see policy being moved steadily towards a much less accommodative setting over the remainder of the year, but rates could start to come down in 2023.  "Available information for April and May 2022 indicates that the recovery in domestic economic activity remains firm, with growth impulses getting increasingly broad based." The economy is resilient, and can weather tighter monetary policy. Where will this end? Figuring out where and when all this will end is something of a wet-finger waving exercise. But at a very simplistic level, we would expect policy interest rates to rise to a point where by the end of the year, they are at or slightly higher than the inflation rate, so delivering a modestly positive real rate. We currently have rates peaking at 5.80 in 1Q23, though it would probably make sense to bring that forward to 4Q22. That in no way would mark a restrictive policy rate, but would remove much of the extraordinary accommodation that is still present today. It is of course subject to considerable uncertainty - the path of the Russia-Ukraine war and its ongoing impact on global commodity prices, China's on-off lockdowns, as well as the impact of international interest rates on the global economy (growing recession concerns).  Read this article on THINK  
Forex: USD/JPY Is Expected To Reach 145 In The End Of The Year. Why Is That?

FX: Can Anything Help (Japenese Yen) JPY? Let's Look At CNH/JPY Chart | Saxo Bank

John Hardy John Hardy 08.06.2022 14:07
Summary:  Global bond yields, and especially US treasury yields, consolidated lower yesterday and yet the JPY weakening move that has been nominally coincident (inversely) with the direction in global bond yields kept ride on trucking. This suggests that aggressive speculative flows in JPY are behind at least some of the move. And it is worth noting that the CNHJPY exchange rate is pushing at the range highs that stretch back several years and have twice signaled major shifts in the CNH. FX Trading focus: JPY drop extends despite consolidation in global bond yields The Japanese yen weakening move continued apace overnight in the wake of an upward Q1 GDP revision and a solid uptick in the May Eco Watchers Survey. The aggressive extension lower in the currency looks slightly odd, given that global bond yields, and especially US Treasury yields, saw a solid consolidation lower yesterday. Looking at the origins of this latest leg lower in the JPY, the move in USDJPY began on May 31, the day when US long treasury yields halted their slide lower and lifted off from their consolidation lows as well. But a good friend and far-more-clever market observer than I argues that the move makes sense in light of a shift in the wording on that very day of a new fiscal draft away from a commitment to balancing the budget by 2025. This did merely make explicit something that was widely considered unlikely anyway, and other countries are hardly likely to get their fiscal houses in order before the next recession strikes (presumably well before 2025), but it is an FX negative, together with other recent signs the PM Kishida has few qualms with the current BoJ policy mix and is therefore more likely to nominate someone like him when Kuroda’s term expires next year. But the aggressive move lower in the JPY also has a clear speculative element, as is visible in rather stretched speculative US futures positioning and indications that “Mrs. Watanabe” is enjoying the strong carry trade as the JPY weakens, going long other currencies like the AUD and especially BRL in recent months. This speculative element and the Japanese external capital flows focus driving a good portion of the JPY weakness (as has so often been the case in the past) is covered very well in a column from Bloomberg’s John Authers today. The question is how late in the game we are here – is this the beginning or middle of a climax phase or do we have months to run? It is hard to tell, the higher yields go and the lower the JPY goes, the more explosive the blowback when and if either the BoJ is forced off the YCC commitment, or the speculative bubble plays itself out.   Chart: CNHJPYInteresting to watch the JPY move in isolation, but also the CNHJPY exchange rate in coming days as it is interesting to note that China chose to allow its currency to weaken just as the CNHJPY cross was poking at the 20.00 level for the first time since 2015, which was near the time frame in which China chose to dramatically rework its foreign exchange policy. If the USDJPY rate continues higher, we should expect a renewed bout of volatility in the USDCNH rate as well. Source: Saxo Group The low-yielder theme is also prominent in EURCHF today as EURCHF challenges above its 200-day moving average, which it has generally traded below since July of last year. We’re seeing new highs in EU yields and pricing of the ECB heading into tomorrow’s ECB meeting (previewed in yesterday’s update) after an upgrade of the Q1 GDP estimate to 0.6% QoQ from 0.3% originally. Sterling was sharply strong yesterday after the gyrations before and after the Boris Johnson leadership vote, with the strength likely stemming from the rebound in risk sentiment yesterday together with promises of tax cuts for companies from Chancellor Sunak in the fall budget statement, but these latter sources of support are eroding fast today and still looking for the potential for a EURGBP break higher post ECB if Lagarde and company can support the repricing of the forward yield curve for the euro. Watch the 0.8600 area post-ECB tomorrow. The Turkish lira has been in for an ugly drubbing in recent weeks, with the deterioration picking up sharply today in the wake of fresh comments from Turkish president Erdogan, who has been out talking up interest rate cuts as the needed medicine for reducing inflation. This after the country posted a year-on-year inflation rate of 73.5% in May (although month-on-month it was 3.0% vs. 4% expected) After a tenuous period of stability when USDTRY traded below 15.00 from early March until early May, the currency has now moved over 12% lower in carry adjusted terms since early May versus the US dollar. At the same time, President Erdogan is complicating Sweden and Finland’s application to join NATO with claims that Sweden must stop supporting “terrorism”, with a single deciding vote in the Swedish parliament holding the Swedish government together an ethnic Kurd and former Peshmerga fighter. You can’t make it up. Table: FX Board of G10 and CNH trend evolution and strength.The pressure on the JPY continues to mount, with some fresh downside in the CHF as well. As noted above, curious to see if CNH responds to the JPY situation soon. Elsewhere, CAD is riding high on oil and Euro is in a holding pattern – let’s see what the ECB can deliver. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Watching USDCNH as a derivative of the CNHJPY and USDJPY situation and after the recent USDCNH new lows were rejected. USDCHF has also crossed back to positive. Source: Bloomberg and Saxo Group Source: FX Update: JPY drop extends despite yield consolidation. | Saxo Group (home.saxo)
Global Investment House, ICM.com Partners with London’s Chestertons Polo in the Park Event

Global Investment House, ICM.com Partners with London’s Chestertons Polo in the Park Event

ICM.COM Market Updates ICM.COM Market Updates 08.06.2022 15:09
London, UK – Tuesday 10th June 2022: ICM.com, a multi-regulated online trading provider is preparing once again to partner with London’s Polo in The Park Event. After both the 2020 and 2021 International Polo events were canceled due to COVID restrictions, ICM.com is excited to be sponsoring the International Chestertons Polo in the Park event for its 6th consecutive year. A firm fixture in London’s social calendar, the prestigious event will be taking place in Hurlingham Park in Fulham, bringing world-class polo to the capital. The annual event typically marks the start of the summer season and will be taking place on the 10th, 11th & 12th of June 2022 in Hurlingham Park, England. As well as the games, there will be lots of entertainment for everyone, including kids. Chestertons Polo in the park is one of a series of renowned British sporting events alongside the likes of Wimbledon, the boat race, ascot, and the London marathon. The event brings together six city Polo teams from around the world, including Buenos Aires, New York, Zurich, Sydney, London, and Dubai. ICM.com first became a partner of the event in 2016, you can look out for the ICM.com logo on the teams’ shirts, teams’ jeans, pitch side hoardings, event program, and prizegiving backdrop. Shoaib Abedi founder and CEO of ICM.com commented on the partnership ‘The Chestertons Polo in the Park event is iconic in the British calendar, we’re proud to be supporting a team that shares the same dedication to teamwork, discipline, and determination to succeed.’ For further information please visit www.ICM.com
JPY: Assessing the FX Intervention Zone and Market Conditions

Euro edges higher as markets eye ECB

Kenny Fisher Kenny Fisher 08.06.2022 15:28
The euro is in positive territory on Wednesday. In the European session, EUR/USD is trading at 1.0727, up 0.20% on the day. ECB to terminate QE, start rate-hike cycle It has been a calm week for the euro thus far, but that could change on Thursday, as the ECB holds a key policy meeting. It is widely expected that the Lagarde & Co. will pivot to a tightening bias, which in itself is a dramatic development as the ECB has maintained an accommodative monetary stance for years. The ECB has been signalling a more hawkish stance for months, as policy makers have scrambled to battle surging inflation in the eurozone, which has hit 8.1% in May. At tomorrow’s meeting, ECB President Lagarde is expected to take the formal step of announcing that the QE programme will wind up early in Q3, with the interest rate liftoff to continue in July. The markets will be looking for guidance with regard to the size of upcoming rate hikes. Any hints of a supersize 50bp increase would be bullish for the euro. The ECB will also release updated inflation and GDP forecasts, with inflation likely to be revised upwards and GDP downwards. This would indicate that the risk for eurozone growth remains tilted to the downside, which means the euro will have a tough time gaining on the dollar in the short to medium term. The eurozone released employment and GDP data for Q1 earlier in the day, and the numbers were nothing to write home about. Employment and GDP both rose by 0.6%. Consumers are holding their purse strings tight, as household final consumption expenditure in Q1 came in at -0.7%, weaker than the -0.3% reading in Q4 2021. Weak consumer demand hurt GDP and with the ECB poised to hike rates, consumer spending could continue to decline which would be bad news for the fragile eurozone economy. . EUR/USD Technical EUR/USD is testing resistance at 1.0711. Above, there is resistance at 1.0796 There is support at 1.0636 and 1.0551 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The EUR/AUD Pair May Have The Potential To Continue Its Decline

Eurozone May Experience Slowdown In Growth, But FX Pairs With EUR (EUR/USD, EUR/GBP) And Inflation Definitely Needs A Solution

ING Economics ING Economics 08.06.2022 16:12
Persistent headwinds are pushing the eurozone into a 'muddling through' scenario, and there is a high probability that the region will see one quarter of negative growth this year. But sticky inflation and higher inflation expectations will force the European Central Bank to abandon negative interest rates in the third quarter Muddling through? President of EU Commission Ursula von der Leyen and European Council President Charles Michel at a summit this week in Brussels Content Farewell to negative interest rates Mixed feelings Not exactly the roaring twenties Higher inflation expectations Farewell to negative interest rates In a blog on the ECB’s website, President Christine Lagarde brought forward the growing consensus that has been building within the governing council, namely that stickier-thanexpected inflation requires the quick removal of non-conventional policy measures. A first rate hike in July looks like a near certainty and a 50bp increase cannot be excluded, especially if core inflation comes in higher than expected in the run-up to the July meeting. In any case, negative rates will have disappeared come September. It now seems that the ECB wants to seize the window of opportunity to normalise monetary policy. This requires policymakers to walk a fine line between the rising inflation expectations and economic headwinds. Sentiment divergence between consumers and businesses Source: Refinitiv Datastream Mixed feelings The first quarter showed an upwardly revised 0.3% quarter-on-quarter growth rate, but the second quarter looks more of a conundrum. There is no hard data yet and the sentiment data has been rather inconsistent. Since the start of the war in Ukraine, consumer confidence has dropped to recessionary levels, with the May reading showing hardly any improvement. However, business confidence figures have held up better while still declining. The flash eurozone PMI composite index came in at 54.9, firmly above the boom-or-bust 50 level. This is largely on the back of a strong services sector, which seems to be benefiting from some post-pandemic catch-up demand. Indeed, holiday reservations are back or even above pre-pandemic levels. In the manufacturing sector, the deceleration is more obvious on the back of renewed supply chain problems, higher input prices, and falling orders. Not exactly the roaring twenties There is no clear weakening yet in the labour market, but wages, although rising a bit more rapidly now, are definitely not keeping pace with inflation. At the same time, oil prices are climbing on the back of a (partial) European boycott of Russian oil, further sapping households’ purchasing power. As such, we don’t think that consumption will be a strong growth driver in the coming quarters. And businesses might also become more cautious in their investment plans. That said, there still seems to be a willingness among governments to support the weakest households with fiscal measures. And as the European Commission has proposed extending the escape clause for the Stability and Growth Pact into 2023, not a lot of fiscal tightening should be expected for the time being. We still believe the second or the third quarter of this year might see negative growth. Thereafter, we think the growth pattern will be pretty much in 'muddlingthrough' mode. That should still result in 2.3% GDP growth in 2022 and 1.6% in 2023. Not a recession, but not exactly the roaring twenties either. And downside risk prevails. Both headline and core inflation continue to surpass expectations Source: Refinitiv Datastream Higher inflation expectations Barring a strong increase in natural gas prices amid fewer imports (or a stoppage of supply) from Russia, inflation is probably close to its peak. In May, headline inflation rose to 8.1%, with core inflation at 3.8%. We expect the decrease to be very gradual and it might take until the second half of 2023 before headline inflation falls back below 2%. At the same time, longerterm consumer inflation expectations have now seen an upward shift to 3% in the most recent survey, which explains why the ECB wants to get rates out of negative territory pretty soon. In an interview in Cinco Días, Philip Lane, the ECB’s chief economist, made it very clear that this should be a done deal by September. What happens afterwards will be data-dependent. We don’t think a wage-price spiral will develop, as in the most recent wage agreements the increase foreseen for 2023 is only 2.4%, below the 3% the ECB considers consistent with its 2% inflation objective. That said, we can imagine that the ECB will want to get a bit closer to the elusive “neutral interest rate”. Therefore we think the deposit rate will be raised to 0.25% by year-end, moving to 0.50% in 1Q 2023. Thereafter, a long period of 'wait-and-see' might follow. Source: The eurozone’s muddling through at best | Article | ING Think TagsInflation GDP Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Euro May Attempt To Resume An Upward Movement

ECB officially ends its long era of unconventional monetary policy

ING Economics ING Economics 09.06.2022 14:21
The European Central Bank has just announced its stopping net asset purchases by the end of the month and pre-announced two rate hikes of 25bp each in July and September. The door for 50bp in September is set wide open ECB President, Christine Lagarde and President of De Nederlandsche Bank, Klaas Knot in Amsterdam   The ECB definitely pre-commits. In its just-announced policy decisions, the European Central Bank has not only made the upcoming 2.30 pm CET press conference less interesting but also laid out a clear path for the normalisation of monetary policy in the eurozone. The only open question is actually why the ECB hasn't already hiked interest rates today but intends to wait for lift-off until the next meeting on 21 July. The ECB's press release also includes the latest staff projections, showing that inflation is now expected to come in at 6.8% in 2022, 3.5% in 2023 and 2.1% in 2024. GDP growth is expected to come in at 2.8% in 2022, 2.1% in 2023 and 2.1% in 2024. Stagflation is the word in the eurozone. What did the ECB decide? Net asset purchases will end as of 1 July Reinvestments of the Pandemic Emergency Purchase Programme will continue at least until the end of 2024 and will remain the main instrument against a widening of yield spreads The policy rate remains unchanged, but the ECB announced it ‘intends’ to hike rates by 25bp in July and 25bp in September. The door for a rate hike of 50bp in September is wide open as the statement says, “If the medium-term inflation outlook persists or deteriorates, a larger increment will be appropriate at the September meeting.” Door open for 50bp in September With inflation running red hot but at the same time the eurozone economy slowing down and facing stagnation or even recession, the ECB’s window to normalise monetary policy has been narrowing almost by the day. Today’s decision shows it's managed to find a compromise between the doves and the hawks. A 50bp rate hike in July seemed to be fended off by opening the door for 50bp in September. The era of net asset purchases will come to an end in three weeks, and the era of negative interest rates will come to an end before the autumn. Simply put, the ECB just announced the end of a long era. Whether this will also be the start of a new era of continuously rising interest rates, however, is still far from certain. Read this article on THINK TagsMonetary policy Inflation Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
US Dollar Soaring Again!? High US CPI Can Affect Stock Markets, But Also Help US Dollar (USD) To Go Even Higher! | FxPro

US Dollar Soaring Again!? High US CPI Can Affect Stock Markets, But Also Help US Dollar (USD) To Go Even Higher! | FxPro

Alex Kuptsikevich Alex Kuptsikevich 10.06.2022 16:20
The US consumer price index accelerated by 8.6% in May from 8.3% a month earlier. The new data exceeded expectations, rebutting hopes that US inflation is already slowing. Today's inflation report is the last big release before the Fed meeting next Wednesday. A renewal of inflation to 40-year highs will surely attract the public's attention at the weekend and will pressure the Fed. Potentially, such high reading could trigger a tougher FOMC stance in the accompanying commentary. Recently, the Fed has been expected to raise rates by 50 points next week and hints of another such move in late July. However, with a strong labour market and persistently high inflation, there are increasing chances that more such double-sized rate hikes are required, which is speculatively good news for the dollar in the coming weeks. A separate issue is quantitative tightening. The Fed could also adjust its plans to sell assets off the balance sheet to tighten financial conditions in the country further. Proponents of such an approach point to the record amounts of excess liquidity that commercial banks are parking on central bank balance sheets. High inflation is bad news for the stock market because it will force the Fed to tighten the monetary policy screws even further. The Fed's open intention to suppress inflation creates risk-off market sentiment when the price growth remains high. In this environment, dollar-denominated money market assets become attractive because of higher yields. This is in stark contrast to last year when the Fed reassured us that everything would pass by itself, so investors preferred to sell dollars that were losing value.
ECB (European Central Bank) is two steps behind the Fed (Federal Reserve), digging a hole under the euro (EUR) | FxPro

ECB (European Central Bank) is two steps behind the Fed (Federal Reserve), digging a hole under the euro (EUR) | FxPro

Alex Kuptsikevich Alex Kuptsikevich 10.06.2022 13:09
As expected, euro buyers' optimism faded immediately after the ECB press conference began, returning EURUSD to a repeat of 1.0600. Shortly after the initial surge in reports of an actual reversal in ECB policy, investors and traders delved into assessments of how slower the policy reversal in Europe was. The ECB will only stop buying assets on its balance sheet later this month - two steps behind the US, where purchases were curtailed months ago and active sales are already due to begin in June. The Fed raised its rate by 25 points in March and 50 points at the start of May, promising two more 50-point hikes in June and July. From the ECB, we see a conditional promise to consider a rate hike of more than 25 points in September in case of high inflation forecasts for 2023. That said, inflation in the eurozone is comparable to the US, and economic growth is just as, if not more, vulnerable to logistical failures and energy prices. Not only has the ECB started its policy turnaround later, but it is also doing so more slowly than the Fed so that the interest rate differential only widens over time. Such differences are a fundamental reason to sell the euro against the dollar. Moreover, the EURUSD bounce in the second half of May erased the pair's oversold conditions, clearing the way for another step down. Yesterday's comments from the ECB convinced us not to expect any hawkish surprises from Lagarde and Co, triggering a new sell-off impulse. It won't be surprising if EURUSD makes another test of the May low at 1.0350 or if it makes a new 20-year low below that level during the next couple of weeks.
Tuesday's EUR/USD Analysis: Chaotic Movements on 30M Chart

1 USD To CAD: What's Ahead USD/CAD? The US Inflation And Canadian Job Report | Oanda

Kenny Fisher Kenny Fisher 10.06.2022 14:08
The Canadian dollar has extended its losses today. USD/CAD is trading at 1.2743, up 0.35% on the day. Thursday saw the US dollar gives its Canadian cousin a spanking, as USD/CAD jumped 1.13%, its highest daily gain this year. A rise in US Treasury yields helped boost the US dollar, as the 10-year yield remains above 3%. As well, US unemployment claims disappointed, rising to 229 thousand. This was higher than the previous release of 202 thousand and above the estimate of 210 thousand. The rise in claims was not massive, but nonetheless has fed into the market’s nervousness over the US economy, and the result was a drop in risk appetite which sent the Canadian dollar tumbling lower. It could be a busy end to the trading week, with Canada’s employment report and US inflation on today’s schedule. Canada’s job numbers for May are expected to be solid – the economy is projected to have created 30.0 thousand new jobs, up from 15.3 thousand in April. The unemployment rate is forecast to remain unchanged at 5.2%. All eyes on US inflation The highlight of the week will be US inflation for May. Headline inflation is expected at 8.3% (unchanged), while Core CPI is forecast to fall to 5.9%, down from 6.2%. If inflation does indeed drop, there will likely be voices proclaiming that the long-sought inflation peak is finally here. It would, however, be premature to assume that inflation is on a downswing based on one reading alone. Still, there is plenty of anticipation around the inflation release, such that it could be a binary outcome for USD/CAD – if inflation outperforms, Fed hiking expectations will rise. If, however, inflation drops, we could see a move to sell US dollars. . USD/CAD Technical USD/CAD is testing resistance at 1.2703. Above, there is resistance at 1.2812 There is support at 1.2628 and 1.2519   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Markets eye Canadian job report, US inflation - MarketPulseMarketPulse
FX Talking - Summer of discontent keeps dollar in demand | EUR/USD | USD/JPY | GBP/USD | ING Economics

FX Talking - Summer of discontent keeps dollar in demand | EUR/USD | USD/JPY | GBP/USD | ING Economics

ING Economics ING Economics 14.06.2022 10:04
The global economy can now be characterised as one in which many central bankers are poised to hike rates more forcefully, even as growth prospects are being revised lower. Investors are now having to ask which economies can best withstand these tighter monetary conditions and which currency to back? During this summer of discontent the answer to these questions largely remains the US economy and the dollar. Unlike the supply-driven inflation suffered in Europe, price rises in the US are far more a function of demand-side factors and suggest stagflation is less of a likelihood in the US than in Europe. And with no end in sight to tight energy markets, the US remains better positioned here too. We expect the Fed to deliver at least another 175bp of hikes this year as the Fed drives real US interest rates into restrictive territory. This is not good news for global growth – but that is the point, the Fed needs to slow demand. Flatter yield curves consistent with the latter stages of the US business cycle are normally good news for the dollar. In all this means that the dollar should stay bid this summer (1.00/1.02 is possible in EUR/USD), while USD/JPY in the 135/140 region looks ready to trigger Japanese intervention. GBP/USD can move to the low 1.20s as the BoE cycle is repriced lower and the CHF should start to outperform in Europe as the SNB guides it higher. CEE FX has become more mixed. We still favour the PLN, but HUF and now CZK look more vulnerable. This will be a fragile environment for most EMFX – especially those most exposed to China. Here USD/CNY can still push higher taking most of $/Asia with it. Developed markets EUR/USD A long, hot summer for the euro Current spot: 1.0476 Both the Fed and the ECB are in hawkish mode – both battling inflation near 8%. Both are probably happy with stronger currencies. The difference is the stagflationary shock from the war in Ukraine which makes the ECB unlikely to deliver on the 150bp of tightening priced in. There is also the issue of growth differentials and what they mean for international equity flows. These could start generating some euro under-performance. EUR/USD looks biased towards the lower end of a 1.02-1.08 range this summer. It looks far too early to pick the top in the Fed cycle. Higher US real rates also spell trouble for risk assets, including EM in general. This will also lend further support to the dollar USD/JPY Official concern and stretched valuations may help JPY Current spot: 134.43 The combination of aggressive Fed tightening (we look for at least another 175bp of Fed rate hikes this year), high energy prices and BoJ dovishness has sent USD/JPY to 135. Japanese officials are now officially unhappy with the rapid pace of JPY weakness. Sensible arguments go that the BoJ cannot intervene to sell $/JPY since: a) markets are not disorderly and b) BoJ is still printing money with QQE. Yet intervention is political & one never knows whether deals get cut behind the scenes We cannot rule out USD/JPY marching towards 140 given that this is a fundamentally driven, but intervention signals are flashing amber/red. Traded USD/JPY volatility can rise further. GBP/USD Bank of England tightening expectations are extreme Current spot: 134.43 GBP/USD looks as though it can trade back down to the 1.21/22 levels – largely on the back of dollar strength. But certainly an Unexploded Bomb (UXB) for sterling is the incredibly aggressive 175bp of tightening priced into the BoE cycle for year-end. This seems very extreme given that not all the MPC were on board with May’s 25bp hike. The 16 June BoE meeting is an event risk. UK growth will struggle in 2Q, although there is increasing speculation over tax cuts coming through this Autumn – in a bid to shore up Conservative support ahead of a possible ‘23 election. We doubt a Tory leadership change or Brexit tension has too much impact on sterling – a lot of bad news is already priced. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more This article is a part of the report by ING: Source
Fed's Bowman Highlights Potential for More Rate Hikes; German Industrial Production Dips to 6-Month Low

Australian Dollar (AUD) Aussie stabilizes after nasty tumble. How Is AUD/USD Doing? | Oanda

Kenny Fisher Kenny Fisher 14.06.2022 12:48
It has been a rough spell for the Australian dollar, which has steadied after a four-day slide. This downswing saw AUD/USD plunge over 300 points and break below the symbolic 70 level. Market nerves weigh on the Australian dollar Ahead of today’s FOMC rate meeting, risk sentiment is nowhere to be found. The US inflation report and expectations that the Fed will remain very aggressive have raised fears of a recession in the US. This has allowed the US dollar to surge, especially against risk-related currencies like the Australian dollar. Back in early April, AUD/USD was trading close to the 0.76 line, but the Aussie has been hammered, with drops of some 400 points in April and May. With US inflation hitting a new 40-year high of 8.6%, some commentators are using the word “panic” to describe the financial markets. There are voices calling on the Fed to deliver a massive 0.75% hike at today’s meeting, though it would be a shock if the Fed did anything other than raise rates by 0.50%. Fed Chair Powell may use his press conference to hint at a 0.75% hike at a later date if inflation doesn’t start to fall soon, and such a message would likely boost the surging US dollar. With no sign of an inflation peak, it’s clear that the Federal Reserve will have to keep its foot pressed to the floor when it comes to upcoming rate hikes. This makes it likely that the Fed will deliver 50-bp hikes in June, July and September. Just a couple of weeks ago the Fed signalled it would take a break in September, but that now seems a luxury it can’t afford, given that inflation continues to accelerate. The Australian dollar didn’t get any relief from Australian releases, as NAB Business Confidence for May slowed for a second straight month, with a reading of 6 points, down from 10 previously. We’ll get a look at Westpac Consumer Confidence for June later today. The May reading came in at -5.6%, and another sharp loss could see the Aussie resume its downward movement. . AUD/USD Technical There is weak support at 0.6902, followed by support at 0.6765 There is resistance at 0.6973 and 0.7110   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Diesel Supply Concerns Grow as Russia Bans Exports: Impact on Middle Distillate Markets

Can Apple Stock Plunge Today!? Fed Decision May Affect US Dollar (USD), S&P 500, Gold (XAUUSD) And Crypto (e.g. Bitcoin Price & ETHUSD) | Swissquote

Swissquote Bank Swissquote Bank 15.06.2022 10:28
The Federal Reserve (Fed) will announce its latest rate decision today, but most of the wild ride is certainly done by now; the market fully prices in a 75bp hike at today’s decision. The aggressive rise in hawkish Fed expectations pushed the US 2-year yield to 3.45% on Tuesday. The 10-year yield flirted with 3.50%. The S&P500 lost another 0.38%, while Nasdaq eked out a small 0.20% gain, but after hitting a fresh low since November 2020. The US futures are in the positive this morning, but the market will likely remain tense until the Fed breaks the news that it hikes by 75bp. The updated economic projections and the dot plot have an important weight for future expectations. Bigger rate hikes from the Fed, and the soaring US dollar are certainly not a gift for other central banks. The US dollar is a base currency, and the rapid appreciation in the greenback increases the cost of the goods that the other countries negotiate in terms of US dollars on international markets, starting from oil and commodities. As a result, a stronger US dollar is a bigger inflation threat for the world. This is why, the hawkish Fed expectations have a bigger domino effect power on the rest of the world. The German 10-year yield continues pushing higher, and the EURUSD sees a decent support near the 1.04 threshold after the European Central Bank (ECB) announced an unscheduled meeting to discuss the market turmoil. Cable slipped below the 1.20 mark, and a 25bp hike from the Bank of England (BoE) may not suffice to compensate the hawkish Fed, and the renewed Brexit fears.   Watch the full episode to find out more! 0:00 Intro 0:27 The Fed decision 4:26 Market update 5:32 Gold, Bitcoin down 6:43 FedEx jumps & dividend paying stocks see higher interest 7:41 Expensive dollar threatens ECB, BoE 8:52 FTSE to feel the pinch of engdangered Brexit deal Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #FOMC #decision #dotplot #ECB #unscheduled #meeting #BoE #USD #EUR #GBP #CHF #Bitcoin #MicroStrategy #crude #oil #gold #market #selloff #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH  
Forex: What to expect from British pound against US dollar - January 17th

How Much Is 1 EUR To USD? FX: Bristish Pound To US Dollar. Tips for beginner traders in EUR/USD and GBP/USD on June 15, 2022 | InstaForex

InstaForex Analysis InstaForex Analysis 15.06.2022 11:13
Relevance up to 09:00 2022-06-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Details of the economic calendar from June 14 Data on the UK labor market came out worse than expected. The unemployment rate increased from 3.7% to 3.8%, while the forecast assumed a decline to 3.6%. Employment in the country rose by 177,000, while jobless claims fell less than expected. In general terms, the indicators for the UK labor market are not the best. Analysis of trading charts from June 14 The EURUSD currency pair has slowed down its downward movement in the area of 1.0400. This move has led to variable turmoil, with the downside sentiment remaining among market participants. On the trading chart of the daily period, there is a gradual recovery of the downward trend relative to the recent correction. The GBPUSD currency pair has accelerated the decline after the prolongation of the medium-term downward trend. The increase in the volume of short positions led to the weakening of the pound sterling towards the psychologically important level of 1.2000. The scale of decline for three trading days amounted to about 550 points.     Economic calendar for June 15 The results of the Fed meeting are at the center of everyone's attention, where, due to a sharp increase in the inflation rate, experts are revising forecasts for the interest rate hike. Based on the last meeting, the regulator planned to continue hanging the rate by 50 basis points. The market, in turn, is concerned about rising inflation and lays down a rate increase of 75 basis points at once, which has already affected the US dollar exchange rate. Time targeting Results of the Fed meeting - 18:00 UTC Fed press conference - 18:30 UTC Trading plan for EUR/USD on June 15 Price stagnation within 1.0400/1.0500 keeps speculators on itself for a while. It can be assumed that the current stop plays the role of the accumulation of trading forces in the forthcoming acceleration in the market. Based on the above range, the best trading tactic is the outgoing momentum method, which will indicate the subsequent price move. We concretize the above into trading signals: Buy positions on the currency pair are taken into account after holding the price above the value of 1.0500 in a four-hour period. Sell positions should be considered after holding the price below 1.0400 in a four-hour period.     Trading plan for GBP/USD on June 15 The area of psychological level 1.1950/1.2000/1.2050 puts pressure on sellers. This led to a reduction in the volume of short positions and, as a result, a local pullback. Taking into account the oversold status of the pound sterling, we can assume further formation of a correction if the price holds above 1.2050 in a four-hour period. At the same time, the high interest of traders in speculative positions allows blocking the technical signal about the pound being oversold. In this case, holding the price below the value of 1.1950 in a four-hour period will lead to the subsequent inertial movement. What is reflected in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future. Read more: https://www.instaforex.eu/forex_analysis/313480
MSFT Stock Price Analysis: Bearish Signals Point to Potential Decline

Reviewing USD/CAD, AUD/USD, NZD/USD, EUR/PLN And More - Precious Forex Report By ING Economics!

ING Economics ING Economics 15.06.2022 12:44
USD/CAD Loonie strength to extend into 2H22  Current spot: 1.2840 The loonie has been the best performing G10 currency in the past month (+3% vs USD), benefiting from a desirable combination of rising oil prices, limited exposure to main sources of global risks (Russia/Ukraine and China) and a hawkish domestic central bank. In our view, the USD/CAD downtrend has further to go, as the factors that have helped CAD strengthen of late should last into year-end. We target 1.22 in 4Q, with risks skewed to 1.20. However, in the shorter term, some temporary spikes back to 1.29-1.30 can’t be excluded given the unstable risk environment. Given Canada’s strong domestic economic performance and high inflation, we expect 50bp hikes by the BoC in July and September. We estimate the BoC’s terminal rate 50bp above the Fed’s. AUD/USD Still looking unattractive Current spot: 0.6994 We remain of the view that the Australian dollar is the commodity currency with the least attractive outlook for the remainder of the year. The RBA has surprised with a 50bp rate hike in June, but a) AUD has been quite detached from domestic monetary policy developments and b) markets are pricing in too much tightening (285bp in the next 12 months) considering the inflation picture in Australia is less worrying than in the US or the eurozone. External risks remain significant, especially from China’s economic slowdown and potential spill-over into the iron ore market. We see a drop below 0.70 in the near-term, and a return to 0.72 only in 4Q22. NZD/USD A safer option than AUD? Current spot: 0.6313 The Kiwi dollar is also set to be negatively impacted by the clouded outlook for the Chinese economy. However, New Zealand’s exports are not as reliant on China as Australia’s. Incidentally, inflation is higher and appears more entrenched into the NZ economy than in Australia, which suggests the RBNZ will remain more hawkish for longer. We expect the RBNZ to bring rates to 3.5% at the start of 2023, potentially earlier should housing inflation prove sticky. In our view, all this should lead AUD/NZD to slip back to 1.07-1.09 in 2H22, and NZD/USD to climb to the 0.69 mark towards the end of the year, benefiting from some potential USD weakness. Emerging markets EUR/PLN NBP hikes call for further PLN gains Current spot: 4.6252 The National Bank of Poland's policy tightening will be much stronger than either the Fed’s or the ECB’s. This justifies further appreciation of the zloty, especially as market tensions related to the war are clearly easing. Moreover, comments from the EC point to the imminent launch of the Recovery Fund (actual flows may start as soon as in September but will not be large). This will provide some support for the zloty, as EU funds will be exchanged on the open FX market, not off-market via the NBP. We expect €/PLN to reach 4.50 or slightly below by the end of the year. In 2023, the appreciation of the zloty should continue, driven by high NBP rates and inflow of EU money, even below 4.40 in 4Q23. We see the policy rate heading to 8.5% into 2023. EUR/HUF Too many burdens for the forint to shine Current spot: 397.44 The forint took a major blow after the government announced new fiscal measures and the situation was not helped by the NBH raising rates by "only" 75bp. HUF is still our least preferred currency in the CEE region, but on the other hand it still has the greatest potential for appreciation. In the short term, we see EUR/HUF around 395 with a possible quick move to 385 if any of the external factors (war, rule of law debate, etc) show early signs of improvement, which would reduce the risk premium. EUR/CZK FX intervention as new standard Current spot: 24.71 The appointment of new Czech National Bank board members has made the situation a little clearer. However, regardless of the board's view, we think that more CNB activity in the FX market is inevitable in 2H22. The CNB does not comment on FX interventions, but our estimates are that it has been more and more active recently and we continue to believe that the EUR/CZK 25 level is a key pain threshold. With inflation rising, we believe they will gradually move down to 24.70-24.90 levels. However, we do not see much reason for CZK to appreciate without CNB intervention. Therefore, we expect it to remain relatively stable. EUR/RON Business as usual still Current spot: 4.9463 The 4.95 level remains untouchable for the moment, with strong offers in the 4.9480-4.9500 range taming any upward pressure. We expect another 75bp hike from NBR in July to bring the key rate at 4.50%. Inflation continued to surprise to the upside and will most likely exceed 15.0% in June. This should be the peak but the road to lower levels will be very gradual. The liquidity shortage remained ample in May, at over RON12bn. This continues to keep market rates very much decoupled from the NBR’s key rate and even from the credit facility. We maintain our 5.50% estimate for the terminal key rate, but upside risks are building again. EUR/HRK On autopilot until 1 January 2023 Current spot: 7.5225 In the 2022 Convergence Report issued on 1 June, the European Commission and the ECB have concluded that Croatia is ready to adopt the euro on 1 January 2023. The decision was largely expected. The Convergence report shows that Croatia meets the nominal convergence criteria. The final decision on euro adoption -which at this point seems only a formal one – will be taken by the EU Council in the first half of July. The FX rate at which the euro adoption will take place will likely be very close to the 7.5345 central parity rate at which Croatia was included in the ERM-II. EUR/RSD Increased – but still limited – flexibility Current spot: 117.42 After selling EUR1.17bn in March – an historically high amount, the NBS reduced its selling to only EUR155m in April. The trend has reversed in May when the NBS intervened by buying euros. Somewhat surprisingly but fully explainable by the inflation dynamics, the NBS has allowed the dinar to appreciate mildly in May towards 117.4 area. This might signal that the FX rate could be used in-sync with the interest rates to tame inflationary pressures. The 50bp rate hike pace continued in June, bringing the key rate to 2.50%. We maintain our estimate for the key rate to reach 3.50% by the end of 2022. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Inflation Outlook: Energy Prices Drive Hospitality, Food Inflation Eases

FX: GBP/USD - British Pound jumps ahead of Fed, BOE meetings

Kenny Fisher Kenny Fisher 15.06.2022 19:03
The British pound is in positive territory on Wednesday. This follows an abysmal 5-day slide which saw the pound fall as much as 600 points. In the North American session, GBP/USD is trading at 1.2060, up 0.53% on the day. FOMC expected to deliver 75-bp salvo All eyes are on the Federal Reserve, with the FOMC rate decision later today. The Fed is clearly under pressure as inflation surges with no peak in sight – CPI accelerated to 8.6% in April, up from 8.3% in March. This was the highest inflation rate since 1981. The Fed’s aggressive stance may shift into overdrive, with a 75-bp hike priced in by the markets at almost 100%. Just a few days ago, the most likely scenario was a 50-bps increase, but hawkish winds are blowing, and a 75-bp move will likely elicit a sharp response from the financial markets. Investors will also be closely monitoring the rate statement and Fed Chair Powell’s press conference. I would not be surprised to see the US dollar cash in with strong gains following today’s meeting. The Fed finds itself in a tough spot as it struggles to combat inflationary pressures, which are now more than four times higher than the Fed’s inflation target of 2 per cent. The price for the Fed’s aggressive rate-hike cycle could well be a recession, but Fed policy makers clearly prefer a (hopefully) short recession rather than inflation expectations becoming unanchored. The big question is will the Fed manage to guide the US economy to a soft landing as it continues to aggressively raise rates. BoE expected to hike by 25bp After the Fed is done, attention will shift to the Bank of England, which holds its policy meeting on Thursday. The likely scenario is that the cautious BoE will raise rates by a modest 25 bps, but we could see a larger hike if the Fed is overly hawkish at its meeting. With unemployment in the UK at a low level of 3.7%, the BoE has room to be more aggressive with its monetary policy. As for the British pound, a 0.25% hike won’t be of much help. If the BoE surprises with a larger rate increase, the pound would likely respond with gains. . GBP/USD Technical GBP/USD faces resistance at 1.2108 and 1.2215 There is support at 1.1916. This is followed by 1.1772, a major support level. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Reserve Bank Of New Zeeland Is Likely To Deliver 50bps Rate Hike

(NZD) New Zealand dollar fights back | Oanda

Kenny Fisher Kenny Fisher 15.06.2022 22:12
NZD/USD is in positive territory on Wednesday, after an extended slide. In the North American session, NZD/USD is trading at 0.6244, up 0.46% on the day. The New Zealand dollar received a boost today from an unexpected source, the European Central Bank. In a surprise move, the ECB held an emergency meeting earlier in the day and announced a new tool to combat the risk of eurozone fragmentation. The meeting was in response to rising yields in highly indebted countries, such as Italy and Greece, which has sparked fears of a debt crisis. After the announcement, yields on Italian and Greek bonds fell, sparking stronger risk appetite and pushing the New Zealand dollar higher. Markets brace for 0.75% hike from Fed This week’s highlight is the FOMC rate decision later today. The Fed is under pressure as red-hot inflation shows no signs of easing. CPI accelerated to 8.6% in April, up from 8.3% in March. This was the highest inflation rate since 1981. Just a few days ago, the most likely scenario was a 50-bps increase, but the markets are now pricing in (at almost 100%) a 0.75% hike. This will likely result in a sharp response from the financial markets. A massive 0.75% move, even one that has been priced in, should be bullish for the US dollar. Investors will also be closely monitoring the rate statement and Fed Chair Powell’s press conference. The price for the Fed’s aggressive rate-tightening cycle could well be a recession, but Fed policy makers clearly prefer a (hopefully) short recession rather than inflation expectations becoming unanchored. The big question is will the Fed manage to guide the US economy to a soft landing as it continues to aggressively raise rates. New Zealand releases first-quarter GDP on Wednesday, with the markets expecting a modest gain of 0.6% QoQ. This follows a 3.0% gain in Q4. The Reserve Bank of New Zealand will be keeping a close eye on the strength of the economy, as the Bank tries to steer the economy to a soft landing while raising interest rates. The FOMC rate announcement will likely overshadow the GDP release and play the pied piper for NZD/USD movement. . NZD/USD Technical NZD/USD is testing resistance at 0.6224. Next, there is resistance at 0.6288 There is support at 0.6099 and 0.5947 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. New Zealand dollar fights back - MarketPulseMarketPulse
GBP: Softer Ahead of CPI Risk Event

Market Insights Podcast (Episode 341)

Craig Erlam Craig Erlam 15.06.2022 22:15
OANDA Senior Market Analyst Craig Erlam reviews the latest market news with Jonny Hart. They discuss the emergency ECB meeting and preview the upcoming Fed, BoJ and BoE monetary policy decisions. https://itunes.apple.com/us/podcast/oanda-market-insights/id1358715867?mt=2 https://subscribeonandroid.com/audioboom.com/channels/4947364.rss This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Source: Market Insights Podcast (Episode 341) - MarketPulseMarketPulse
JPY: Assessing the FX Intervention Zone and Market Conditions

Podcast: Three days that could shake the world

Saxo Bank Saxo Bank 15.06.2022 22:18
Summary:  Today features Saxo CIO Steen Jakobsen as we look at the tremendously important event risks set for the balance of this week, with a sudden emergency ECB meeting cropping up on today's schedule, the FOMC set for a likely super-size hike tonight, but is the market really prepared? Finally, and potentially most important for the risk of cross-market contagion, the Bank of Japan is set to meet on Friday and the market has thrown down the gauntlet and is already actively challenging the bank's yield-curve-control policy with heavy selling of JGB futures ahead of that meeting. All of this while cratering crypto markets are aggravating risk sentiment at least at the margin. Helmets on, as this could prove an historic week. Today's pod also features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are also located via this link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Three days that could shake the world | Saxo Group (home.saxo)
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

A hidden force could soon be released by BoJ | Saxo Bank

Peter Garnry Peter Garnry 15.06.2022 22:22
Summary:  The equity market is not prepared for a 75 basis points rate hike tonight by the FOMC judging from retail investors behaviour over the past week. The buy-the-dip mentality and hopes of a V-shaped recovery are so ingrained after a decade of relentlessly higher equities interrupted a few times by a quick recovery, that the tightening of financial conditions will come as a shock. Bank of Japan will also be forced to reconsider its yield-curve-control policy and if BoJ pivots then a hidden force might be unleashed as Japanese investors might move into selling mode on its foreign assets. Bank of Japan decision could unleash selling of foreign assets Today at 1800 GMT the FOMC could surprise the majority of economists with a 75 basis points rate hike as between the lines leaked in the Wall Street Journal yesterday (perceived to be the primary source for the Fed to leak information). The market has already priced in a 75 basis points rate hike with a 90% probability so if the FOMC wants to be in line with the market and retain its credibility it must follow through. Despite the Fed Funds Rate futures are pricing in a 75 basis points rate hike the equity market in particularly is not prepared. We still observe a high degree of complacency among retail investors still exhibiting buy-the-dip mentally and that things will soon normalize. They are in for reckoning. One thing is the Fed’s need to move fast but even more importantly other central banks such as BoE, ECB, and BoJ must change cause or else creating a far bigger problem down the road. Maintaining a too loose monetary policy vs the Fed will weaken the GBP, EUR, and JPY against the USD importing even more inflation as the world’s natural ressources are priced in USD. Bank of Japan is probably the central bank with most at stake and Kuroda has fought hard to maintain its yield-curve-control (YCC) with its 25 basis points upper limit on the Japanese 10-year yield. The policy is becoming to costly now for Japan that import too much inflation due to its weaker currency (see chart) and weakening the credibility of BoJ. If BoJ breaks away from its YCC policy then a hidden force will be unleashed. Japan has a large net international investment position (NIIP) which has risen dramatically since 2017 which was introduced in September 2016 reaching 70.7% of GDP by September 2021 up from 59.5% in 2017. These foreign assets represent $3.4trn. If Bank of Japan pivots on its monetary policy we could see a large reversal of the JPY which in theory could increase the propensity of Japanese investors to sell their foreign assets. Japanese investors have recently been the main source of selling in Danish mortgage bonds suggesting some “smart” investors are anticipating the death of the YCC policy. An eventual policy pivot by Bank of Japan could unleash large selling pressure in USD and EUR assets, so Friday’s rate decision in Bank of Japan is crucial to monitor for investors. USDJPY | Source: Saxo Group Is the market even prepared for what is coming? In many ways it feels surreal to observe market behaviour and pricing across certain pockets given the policy trajectory from the Fed and the already now visible cracks the current tightening of financial conditions have already caused. Asking prices on houses are coming down in several countries and companies are freezing hiring. Meanwhile sell-side analysts have a 12-month forward EPS estimate on S&P 500 of $236.84 implying an EPS growth of 18.4% over the next 12 months. It just makes no sense at all. The dividend futures market which prices expected dividends is pricing future profitability and here we observe a 6% decline in S&P 500 dividends in 2023 from the peak last year responding to margin pressure that we observed in the Q1 earnings releases. But is 6% decline in dividends even enough? It reflects of course that energy companies will likely increase dividends to attract capital and investors, but the pricing seems a bit off relative to much tighter financial conditions expected over the coming 12 months. S&P 500 earnings estimate S&P 500 dividend futures Dec23 | Source: Bloomberg Source: A hidden force could soon be released dividend futures live in la-la land | Saxo Group (home.saxo)
UK Budget: Short-term positives to be met with medium-term caution

GBP/USD Intraday technical analysis and significant key-levels - 15.06.2022

InstaForex Analysis InstaForex Analysis 15.06.2022 22:26
Relevance up to 20:00 2022-06-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   The short-term outlook turned bearish when the market went below 1.3600. This enhanced the bearish side of the market initially towards 1.3360 then 1.3200 which initiated a temporary bullish movement towards 1.3600 for a final re-test. The price level of 1.3600 corresponding to the upper limit of the ongoing bearish channel initiated an aggressive bearish movement towards 1.2980 - 1.3000. The price level of 1.3000 stood a transient Support where a short-term consolidation movement existed. This happened just before two successive bearish dips could take place towards 1.2550 and 1.2160. Considerable bullish rejection was expressed around 1.2200. However, the pair failed to persist above 1.2550. This was needed to abolish the short-term bullish scenario for sometime. Instead, a quick bullish movement was executed towards 1.2650 where extensive bearish rejection existed. The GBP/USD pair remained under bearish pressure to challenge the new low around 1.2150 again which was recently bypassed. Price action around the current price levels of 1.2000 should be watched for a possible intraday BUY entry. Otherwise, further bearish continuation may pursue towards 1.1750 if sufficient bearish momentum is maintained Read more: https://www.instaforex.eu/forex_analysis/280271
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Euro To US Dollar - EUR/USD Intraday technical analysis and trading plan

InstaForex Analysis InstaForex Analysis 15.06.2022 22:34
Relevance up to 20:00 2022-06-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. In late September, Re-closure below the price level of 1.1700 has initiated downside-movement towards 1.1500 where some bullish recovery was witnessed. Shortly after, another price decline took place towards 1.1200. Then the EURUSD has temporarily moved-up within the depicted movement channel until downside breakout occurred. The EURUSD looked oversold while approaching the price levels of 1.0800. That's when an upside movement was initiated towards 1.1200. This recent movement towards 1.1200 was suggested for another SELL opportunity which already reached its targets. The previous ascending movement above 1.0600 enabled further advancement towards 1.0800 where evident bearish rejection could be applied. On the other hand, the pair remains under selling pressure to re-visit the new daily low around 1.0350 where price action should be watched.   Read more: https://www.instaforex.eu/forex_analysis/280273
B2Core x Shufti Pro Integration Is Real | B2Brokers

B2Core x Shufti Pro Integration Is Real | B2Brokers

B2Brokers Group of Companies B2Brokers Group of Companies 17.06.2022 11:20
B2Core has now been integrated with Shufti Pro, a prominent AI-powered identity verification solution. We wanted to make the identity verification process for our clients faster and more straightforward than ever. That's why B2Core and Shufti Pro have teamed up to provide advanced, fully automated technology to protect clients while onboarding legitimate new users. By collaborating, B2Core and Shufti Pro can offer all users a safer and more secure verification experience! Shufti Pro is a renowned KYC provider that offers high-quality and quick verification services. To use Shufti Pro, all our clients have to do is go to their profile settings, click on the verification page, and then send their ID papers, such as passport and photo. Shufti Pro will use its technology to instantly authenticate the documents, decreasing fraudulent activities and improving the customer journey. All you need is less than 30 seconds, and you are ready to go! What is Shufti Pro? Shufti Pro is a SaaS (Software as a Service) firm that helps organizations authenticate their end-users with completely automated KYC (Know Your Customer) solutions. Face verification, document verification, video-interview KYC, address verification, 2-factor authentication, consent verification, and biometric sign-in using facial recognition are among Shufti Pro's services. Its services are available to businesses of all kinds in over 230 countries and territories, and it supports over 150 languages. Shufti Pro offers a single API that is easy to integrate with any existing system and multi-layered risk cover against digital identity fraud, money laundering, and terrorist financing. Moreover, Individuals and organizations are screened against 1700+ watchlists by Shufti Pro's AML screening services, making it a complete solution for avoiding financial crime. Shufti Pro is a fast and simple option for organizations wishing to optimize their client onboarding process because all verifications take less than 30 seconds. Shufti Pro is the only firm in the industry that offers huge worldwide organizations, such as payment gateways and banks, not just SaaS but also on-premises solutions. So If you are looking for a fully automated KYC solution to verify your end-users, look no further than Shufti Pro. Finale At B2Broker, we are always striving to provide the best possible service for our clients. Whether it's expanding our offerings or streamlining existing processes, we want to make sure that we are always meeting your needs. That's why we're excited to introduce our new KYC service. This service is designed to simplify the onboarding process and make it more efficient. We hope that you will take advantage of this service to make your experience with B2Broker even better. Thank you for choosing us as your trusted partner in Forex and cryptocurrency services! Please contact us if you have any queries or thoughts regarding our KYC service.
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

Let's Have A Look At USD/JPY Chart. Japanese Yen falls back down after BoJ (Bank Of Japan) balks | Oanda

Jeffrey Halley Jeffrey Halley 17.06.2022 13:38
The Japanese yen continues to post strong swings this week and is up sharply on Friday. USD/JPY is trading at 134.67 in Europe, up 1.86% on the day. BoJ maintains yield curve control It’s been a busy week, with the markets still digesting some dramatic moves by central banks. The Fed and SNB delivered massive salvos in their fight against inflation, and the BoE continues to tighten, albeit at a more modest pace. The week wrapped up with the Bank of Japan policy decision earlier in the day. These meetings are usually on the dull side, with the central bank merely reaffirming its ultra-loose policy, with the occasional tweak. Today’s meeting was closely watched, however, as the BOJ’s yield curve stance has been under pressure and there was speculation that the BoJ might retreat and release the cap of 0.25% on 10-year JGBs. In the end, the BoJ did not blink or budge, maintaining its policy for yield curve control and QE. The BOJ reaffirmed it will continue its policy of rock-bottom rates, even though other major central banks are tightening policy, as we saw this week with the Fed, BOE and SNB. Governor Kuroda has insisted that monetary easing remain in place, given Japan’s slow recovery from the Covid-19 pandemic. With inflation barely at 2%, the central bank’s target, Kuroda can afford to continue his loose policy and tenaciously defend the BoJ’s yield curve. The BoJ didn’t adjust policy today but it was noteworthy that the policy statement added the exchange rate to its list of risks, something we haven’t seen in previous statements. The yen hit a 24-year low at 135.60 earlier this week and could fall even further. The Bank is sending a message that it is monitoring the exchange rate, but I question whether this will deter the markets from continuing to test the yen – previous jawboning from the BoJ and Ministry of Finance didn’t succeed in stemming the yen’s slide, and we could well be on our way to a 140 yen if the US/Japan rate differential continues to widen. . USD/JPY Technical USD/JPY is testing resistance at 133.14. Above, there is resistance at 1.3585 There is support at 131.72 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen falls back down after BoJ balks - MarketPulseMarketPulse
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

Fluctuating FX Pair - AUDUSD! How Much Is 1 Australian Dollar!? Trading plan for AUDUSD for June 17, 2022 | InstaForex

InstaForex Analysis InstaForex Analysis 17.06.2022 14:19
Relevance up to 12:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical outlook: AUDUSD rose through the 0.7070 mark on Thursday before finding resistance. The currency pair is pulling back and is seen to be trading close to the 0.6995 mark at this point of writing. Also note that prices have confirmed a huge Engulfing Bullish candlestick pattern on the daily chart after bouncing from the 0.6850 low early this week. AUDUSD bulls will be poised to hold prices above 0.6850 to remain in control and push at least towards the 0.7450 level going forward. The currency pair seems to be unfolding a corrective rally, which might terminate above 0.7275 before reversing lower again. Immediate price resistance is seen towards the 0.7660 mark and a break is required to confirm a change in the larger degree trend. AUDUSD is working on a meaningful downswing between the 0.7660 and 0.6830 levels for now. The 0.618 Fibonacci retracement of the above drop is seen through the 0.7345 mark as projected on the daily chart. The currency is expected to face formidable resistance as prices attempt to push through that mark going forward. Trading plan: Potential rally through 0.7300-400 against 0.6800 Good luck!   Read more: https://www.instaforex.eu/forex_analysis/280625
Will GBP/USD Surprise FX Traders!? Swiss Franc (CHF) Bounces Back! Some May Say S&P 500 (SPX) Is Not Very Strong At The Moment | Orbex

Will GBP/USD Surprise FX Traders!? Swiss Franc (CHF) Bounces Back! Some May Say S&P 500 (SPX) Is Not Very Strong At The Moment | Orbex

Jing Ren Jing Ren 17.06.2022 11:21
USDCHF breaks supportThe Swiss franc soared after the SNB delivered a surprise 50-basis-point rate hike. The dollar came to a halt at May’s peak at 1.0050. A bearish divergence indicated a slowdown in the upward momentum. Then a fall below the base of the latest rebound at 0.9880 acted as a confirmation of a correction. Heightened volatility suggests that short-term buyers have bailed out and a break below 0.9780 further weighs on sentiment. 0.9550 is a critical floor to keep June’s rally intact. The bulls need to clear 0.9820 first to ease the pressure. GBPUSD attempts to reboundThe pound rallied after the BoE raised its interest rates to 1.25%. A surge above 1.2200 has forced sellers to cover their positions, paving the way for a sharp rebound. A combination of profit-taking and momentum buying is propelling Sterling to the supply zone around 1.2500. Strong selling pressure could be expected though as the medium-term trend remains bearish. An overbought RSI may trigger a limited pullback as intraday traders take profit. 1.2050 at the origin of the rally is a major support should this happen. SPX 500 falls into bearish trendThe S&P 500 struggles as the FOMC anticipates an economic downturn. A fall below the daily support at 3840 which has turned into a resistance might confirm the bear market. Sellers would continue to fade rebounds as sentiment deteriorates. The RSI’s dip into the oversold area may prompt some short-term sellers to cover. But unless the buy side manages to lift offers around 3840, the index could be vulnerable to a new round of sell-off. 3550 from November 2020 would be the next target.
British Pound (GBP) Touched The Below-1.05 Levels!

1 GBP Price To Increase!? Is British Pound Going To Rally!? How Has USDCHF Changed After SNB Meeting? | Saxo Bank

John Hardy John Hardy 17.06.2022 14:47
Summary:  The Bank of Japan continues to swim against the stream of global central bank tightening as it maintained course overnight with its policy mix of negative yields and yield-curve-control, triggering a wave of fresh JPY weakening that was only moderated slightly by a sharp drop in US treasury yields. Elsewhere, the Swiss franc remains firm after the SNB-inspired spike and sterling is taking a stand after the Bank of England meeting yesterday. FX Trading focus: BoJ not for turning, GBP takes a stand. USD status check. The Bank of Japan refused to budge overnight, standing pat on its policy of yield-curve-control and announcing daily operations in the bond market to defend the policy, with no guidance suggesting a change of course, though a brief comment on foreign exchange was inserted into the policy statement: Concerning risks to the outlook, there remain extremely high uncertainties for Japan's economy, including the course of COVID-19 at home and abroad and its impact, developments in the situation surrounding Ukraine, and developments in commodity prices and overseas economies. In this situation, it is necessary to pay due attention to developments in financial and foreign exchange markets and their impact on Japan's economic activity and prices. That suggests that there is some level of JPY weakness at which the Bank of Japan may be forced to revisit its policy commitments, but that we aren’t there yet. Two key points to make in the wake of this announcement: first, additional JPY weakness from here is likely only a function of global yields continuing to trend higher, something we did not at all see yesterday as a weak batch of US data drove a strong rally in US treasuries and punched the US 10-year benchmark yield back toward the pivotal 3.20% area. Second is the CNHJPY rate, which has traded north of 20.00 in the wake of this BoJ meeting and whether China is set to make another move to prevent further JPY weakness relative to the renminbi after it appeared that the threat of the 20.00 level prompted China to weaken CNH sharply relative to the US dollar after a long period of stagnant USDCNH price action just at the point when CNHJPY hit 20.00 back in April. Elsewhere, we continue to digest the repercussions of the Swiss National Bank 0-basis point rate hike, which continues to reverberate. While the Bank of Japan pulls in the opposite direction as a country that is willing to risk further deterioration in the real value of its currency, the SNB has done the opposite with this move, allowing itself to front-run the ECB and establishing the franc’s purchasing power as a key consideration and going a long way to buying real yield credibility. Looking ahead, the concern will likely arise as the cycle plays out that the Fed simply can’t raise rates sufficiently drive solidly positive US real yields. USDCHF has suffered a complete derailing of the former up-trend as discussed in the chart below and when looking at the USD versus European currencies, at least, from SEK and GBP to CHF and EUR, we could suddenly be at a turning point here. Where is that turning point “confirmed”? We are already there in USDCHF, but a broader, at least tactical turn lower in the USD would require a pull higher and close above 1.0600 in EURUSD and perhaps 1.2500 in GBPUSD (the day after I thought GBPUSD might be in danger of a meltdown below 1.2000 on the small BoE hike…). Until then, the USD sell-off may be a one-off result of titanic USDCHF flows on the SNB decision. Chart: USDCHFThe bulls found their case broken all in one go in the wake of the SNB meeting, as USDCHF has been crushed seemingly irrevocably lower, suddenly creating a double-top formation. But the huge brushback may not yet lead significantly lower unless the USD is capitulating elsewhere (levels for other major USD pairs noted above) and the full break down here requires a capitulation down through the 0.9545 low and the old range highs below 0.9475. Source: Saxo Group Sterling rallied hard yesterday in the wake of the Bank of England meeting yesterday, with UK rates and the currency focusing more on the hawkish guidance the meeting produced rather than due to the small 25-basis point hike. The bank said it would react “forcefully” if inflation doesn’t develop as hoped (which will take some doing – the Bank of England expecting the CPI to hit north of 11.0% before falling back after October) which suggests the willingness to hike by 50 basis points even if the economic outlook is not promising. The price action post-BoE took GBPUSD well away from the cycle lows of 1.2000 posted earlier this week, trading as high as 1.2406 late yesterday, just above a major local 61.8% Fibonacci retracement of the recent sell-off at 1.2387 and far above the prior low-water mark from May of 1.2156. As noted above, a full reversal in GBPUSD requires another rally surge through 1.2500, while the bears will only feel comfortable here again if the price action punches back down through 1.2200. Elsewhere, sterling hopefuls should have a look at EURGBP, where the latest leg higher above 0.8600 has been sharply reversed, carving out a more well-defined reversal. Watching the 0.8500 area for whether we follow through lower and back into the range extending below 0.8300 again there. Table: FX Board of G10 and CNH trend evolution and strength. The JPY is reversing sharply back lower after last night’s BoJ – note the huge new momentum in CHF, while sterling is trying to shift out of negative territory in broad terms. CAD looks very heavy. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Interesting to note sterling pushing back and trying to flip to a positive trend against not only JPY, but also AUD and CAD here. Elsewhere, watching 1.3000 on the USDCAD and noting AUDCAD rolling over – is CAD in for a broader drubbing? Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1200 – Poland May Core CPI 1230 – Canada May Teranet/National Bank Home Price Index 1245 – US Fed Chair Powell to make opening remarks at a conference 1315 – US May Industrial Production / Capacity Utilization 1430 – UK Bank of England Chief Economist Pill to speak Source: FX Update: BoJ not for turning. GBP takes a stand. | Saxo Group (home.saxo)
Industrial Metals Outlook: Assessing the Impact of China's Stimulus Measures

Have Tech Stocks Plunged!? FX: So Bank Of Japan Seems To Delay Supporting JPY, British Pound (GBP) Rallied| Stock Markets: S&P 500 Lost 3.2%

Saxo Bank Saxo Bank 17.06.2022 12:40
Summary:  The Bank of Japan continues to swim against the stream as it insisted on maintaining its yield-curve-control and negative policy rate at the meeting overnight, with daily operations to defend the yield cap on Japanese government bonds. Elsewhere, US equity markets continued to new lows even as US treasuries found strong support as a batch of weak US data points raises concerns on the US economic outlook.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The Nasdaq 100 and S&P 500 futures fully reversed and more the FOMC pump with S&P 500 futures closing at the 3,671 level yesterday down 3.2%, while technology stocks fell even more. The current drawdown is now the second deepest at the same time into the drawdown compared to previous historical drawdowns underscoring the seriousness of the current market regime. Initial jobless claims weakened yesterday, and the Philly Fed survey showed significant downward pressure on new orders hitting levels typical of recessions. The fear of recession could short-term keep a lid on interest rates and thus ironically support equities and maybe cause a mild rebound over the coming weeks. The VIX forward curve remains well behaved suggesting no panic yet in US equities. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) The indices were up more than 1% despite ugly selloffs in overseas markets overnight. The fall in property prices in the top 70 cities slowed to -0.2% m/m vs April -0.3%.  Property prices in Tier-1 cities rose 0.4% m/m and the declines in Tier-2 and lower-tier cities moderated. On the other hand, JD.COM’s (09618) JD Retail CEO told Bloomberg that recovery in consumption in China had been slow from the reopening of cities, such as Shanghai. The Company was expecting that it would take a long time for household consumption to recover as the economy and household income had been severely hit over this wave of lockdown. EURGBP and GBPUSD Sterling rallied hard yesterday in the wake of the Bank of England meeting yesterday on the guidance the meeting produced rather than due to the smaller 25-basis point hike. its reversal yesterday took GBPUSD well away from the cycle lows of 1.2000 posted earlier this week, trading as high as 1.2406 late yesterday, just above a major local 61.8% Fibonacci retracement of the recent sell-off at 1.2387 and far above the prior low-water mark from May of 1.2156. A full reversal in GBPUSD requires another rally surge through 1.2500. Elsewhere, sterling hopefuls should have a look at EURGBP, where the latest leg higher above 0.8600 has been sharply reversed, suggesting a more well-defined reversal. Watching the 0.8500 area for whether we follow through lower and back into the range extending below 0.8300 again. USDJPY and JPY pairs With the Bank of Japan voting 8-1 to maintain course and the 0.25% cap on 10-year JGB yields, the JPY weakened sharply after a bout of speculation this week that Governor Kuroda and company might relent on its policy and bring a sharp resetting of the JPY higher. In the background, ironically, a powerful rally in global bonds yesterday was a JPY-supportive development that has eased the JPY-negative impact of the overnight BoJ decision. The BoJ statement did say that the Bank needs to pay attention to the FX level, from which one might infer that there is a JPY weakness level that the BoJ would find unacceptable and could prompt a change of course in the future. From here, the only route to a higher JPY is via a new drop in bond yields and shift away from CB tightening elsewhere or if the Bank of Japan is seen as giving up on its policy at a later date, possibly on coming inflation releases and risks of a weaker JPY raising the cost of living to an unacceptable degree. Crude oil (OILUKAUG22 & OILUSJUL22) Crude oil is heading for its first weekly decline in six with global growth concerns and prolonged lockdowns in China being the main catalyst. On top of that the short-term technical outlook has weakened following several failed attempts to break higher, but given the tight supply outlook, highlighted by the IEA earlier in the week. Support in Brent is likely to emerge already between $116 and $113.25. NY Harbor Diesel (HOc1) and gasoil (GASOILUKJUL22) both trades higher on the week, a reflection of the tightness that despite growth concerns, is likely to keep the energy sector supported.  Gold (XAUUSD)  Gold remains rangebound following a two-day rally that was supported by US growth concerns and a continued rout in cryptos and global stock markets. Together with another dose of weak U.S. data (see below) they helped send US treasury yields and the dollar lower on Thursday, thereby easing some of the recent pressure on bullion.  Total holdings in bullion-backed ETFs have declined by less than 0.25% this past week, a strong sign that investors look to gold for protection against the rout in global markets, together with increased focus on the need to hedge against the risk of stagflation.  On a relative basis gold’s year-to-date outperformance against the S&P 500 has reached 24%, long-end bonds 26% and 75% against blockchain (BKCH:arcx). US Treasuries (TLT, IEF) US treasuries rallied hard yesterday amidst ugly sentiment in the equity market and on a set of weak US data points pointing to a decelerating housing sector (more below), with weekly jobless claims remaining near the highs of the last few months. The US 10-year treasury yield has declined back to the pivotal area around 3.20%, which was the cycle high before the latest surge toward 3.50%. An extension of the rally that takes yields significantly back below that 3.20% mark would suggest that we have reached a cycle peak for now and further consolidation is set to follow, perhaps on concerns for an incoming recession. What is going on? Bank of Japan defies the global tightening wave The Bank of Japan maintained the negative 0.10% policy rate today, confirming that it won't join the Federal Reserve and other major global central banks in tightening monetary policy. The Japanese central bank will keep its target for the 10-year Japanese government-bond yield at+0.25% and announced daily operations to ensure the cap on yields is maintained. While the central bank said we will take additional easing measures without hesitation if needed, there was a rare reference to the yen weakness. Swiss National Bank surprises with 50 basis point hike yesterday The Swiss National Bank, according to surveys, was not expected to hike rates yesterday, though a rapidly growing minority of observers were looking for a rate rise. The hike of 50 basis points brought the policy rate to –0.25% and makes it clear that the SNB is happy to separate itself from ECB policy and allow the CHF to strengthen as one of the tools to combat rising inflation risks in the country. EURCHF sold off below 1.0200 after trading above 1.0400 ahead of the decision. USDCHF slid to lows of 0.9632 from above parity the day before the decision. The Bank of England hikes 25 basis points, sharpens forward guidance language The majority of observers were looking for the 25-basis point move from the BoE, with some residual uncertainty on whether the bank might hike by more due to the large Fed rate hike this week and the weakness in sterling. Three MPC members of the nine voting wanted a 50-bp hike. At the same time, the BoE predicted that CPI would peak slightly above 11% in October, said that it would respond “forcefully” on any signs of worsening inflation, language that kept the short end of the UK yield curve pinned near the cycle highs. China centric commodities remain under pressure China centric commodities such as iron ore SCON2), coal and copper (COPPERUSSEP22) remain under pressure after China advised its covid restrictions probably won’t ease until next year. In addition, the recent spate of weaker than expected economic US data combined with central banks stepping up their fight to combat inflation have raised concerns about the outlook for global growth in general. US economic indicators weaken US building permits and housing starts eased in May to 1.695mn and 1.549mn respectively while the initial jobless claims were at 229k versus 217k expected. Further, Philadelphia Fed manufacturing survey printed a negative figure of -3.3 for June, the first such contraction since May 2020. More so, the future activity index was contractionary for the first time since the GFC. Adobe shares slip 5% in extended trading on revenue outlook miss As we highlighted on our podcast yesterday Adobe’s earnings were a test of business investment in marketing and content activities. While the business remains sticky the company put out a revenue outlook at $17.7bn vs est. $17.9bn due some demand weakness, Russia impact and USD headwinds.   What are we watching next? US recession concerns rising The mix of data this week generally raises concerns that the US economy is decelerating, but the evidence is patchy and will need confirmation for this to become a a more entrenched theme. At the same time, equity traders have to figure out whether they should celebrate weak data as something that will eventually lead US yields lower and see the pace of Fed tightening eventually reversing or fret weak data because of the implications for corporate profits. The next US data points of interesting include the preliminary Services and Manufacturing PMI surveys for June next week. Fed blackout period ending The Fed speakers will be back in action as the blackout period ends. Chair Powell is speaking later today at the inaugural conference on the International Roles of the US Dollar. Other Fed speakers are due as well including Esther George who voted for a 50bps rate hike this week. Earnings Watch Next week’s earnings calendar is light but there are three important earnings releases to watch and those are Lennar, FedEx, and Accenture that all will give insights into the US housing market, logistics, and recruitment dynamics. Monday: Kanzhun Tuesday: Lennar Thursday: FedEx, Accenture, Darden Restaurants, FactSet Friday: Carnival, China Gas, CarMax Economic calendar highlights for today (times GMT) 0900 – Eurozone May Final CPI 1200 – Poland May Core CPI 1230 – Canada May Teranet/National Bank Home Price Index 1245 – US Fed Chair Powell to make opening remarks at a conference 1315 – US May Industrial Production / Capacity Utilization 1430 – UK Bank of England Chief Economist Pill to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – June 17, 2022 | Saxo Group (home.saxo)
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

FX: Euro To US Dollar Trading! Technical analysis recommendations on EUR/USD and GBP/USD for June 17, 2022

InstaForex Analysis InstaForex Analysis 17.06.2022 14:58
Relevance up to 11:00 2022-06-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher timeframes Bulls are still trying to limit the current decline, so they continue to insist on the continuation of the rise and the restoration of positions. For this event to be a success and further prospects in the near future, it is necessary to overcome the resistance of the daily Ichimoku cross (1.0516 – 1.0568 – 1.0620 ), two resistances of the higher timeframes (1.0539 – 1.0643) and gain a foothold in the Ichimoku cloud (1.0568). The failure of the bulls may let bears resume the downward trend (1.0339–49).     H4 – H1 Yesterday's corrective movement managed to overcome the resistance of key levels. As a result, the advantage in the lower timeframes shifted to the side of the bulls. The key levels, located at the boundaries of 1.0510 (the central pivot point of the day) and 1.0466 (the weekly long-term trend), serve as supports and are currently trying to defend the interests of the bulls. If this succeeds, then the reference points for the rise from the higher timeframes will be added to the reference points of the lower timeframes at 1.0639 – 1.0730 – 1.0859 (resistances of classic pivot points). In case of loss of key levels (1.0510 – 1.0466), the balance of power will once again be changed and the prospects for movement will again be aimed at restoring the downward trend, first on the lower timeframes (1.0359) and then on the higher ones (1.0349–39). Additional reference points will be the support of classic pivot points (1.0419 – 1.0290 – 1.0199 ). *** GBP/USD     Higher timeframes Bulls continued to rise, as a result, the resistance of the daily Ichimoku death cross (1.2213 – 1.2266 – 1.2300 – 1.2386) is now being tested for strength. Breakdown and reliable consolidation above will open new horizons, which will be weekly levels (1.2511 – 1.2626) and entry into the daily and monthly Ichimoku cloud (1.2523 – 1.2678).     H4 – H1 At the moment, the advantage in the lower timeframes belongs to the bulls. The pair is now testing key levels—the central pivot point of the day (1.2264) and the weekly long-term trend (1.2184). Keeping them as supports will provide opportunities for bullish sentiment to develop. The next reference points for the continuation of the rise will be 1.2489 – 1.2629 – 1.2854. The loss of key levels will deprive the bulls of an advantage, which can contribute to increased activity and performance on the part of the opponent. Downward references today can be noted at 1.2124 – 1.1899 – 1.1759 (support of the classic pivot points). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/313780
It's Time To Meet iPhone 14! Apple Stock Price May Fluctuate Today!

When Will Japanese Yen Wake Up!? USD/JPY: Bank of Japan did not become an ally of the yen | InstaForex

InstaForex Analysis InstaForex Analysis 17.06.2022 15:11
Relevance up to 12:00 2022-06-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The yen is losing ground again. On the eve of the June meeting of the Bank of Japan, the USD/JPY pair tried to make a downward rush, breaking the lower limit of the range of 133.50–135.00. Rumors that the Japanese regulator would still decide to adjust its monetary policy towards tightening (at least by announcing the corresponding shifts) allowed the sellers of the pair to reach the level of 131.50. In addition, the dollar was hit by a wave of sell-offs after the announcement of the results of the June Fed meeting. And although the Fed surprised the markets with a 75-point rate hike, the greenback became a victim of the trading principle "buy the rumour, sell the fact." Due to the combination of these factors, USD/JPY bears approached the support level of 131.10 (the middle line of the Bollinger Bands indicator coinciding with the Kijun-sen line on the D1 timeframe). But the downward impulse quickly faded away. The US dollar index began to gain momentum again, and the yen was under pressure from the Bank of Japan, which summed up the results of the next meeting today.     USD/JPY bulls have every chance to test multi-year price highs again in the medium term. Note that on June 15, the pair reached a 24-year price peak, marking 135.60. The last time the price was at such heights was back in 1998. After a short-term price decline, buyers again seized the initiative, reacting to the rhetoric of Bank of Japan Governor Haruhiko Kuroda. Kuroda remained true to himself as he once again announced that the central bank would not follow the path of the Fed and most other central banks of the world's leading countries, which are tightening monetary policy parameters. At the same time, Kuroda repeated the mantra that his department would not hesitate to ease monetary policy "if necessary." Although "at this stage" he does not see the need for this. On the one hand, such "dovish" results were predictable. Kuroda and most of the members of the Board of Governors are strong supporters of loose monetary policy. But on the other hand, Japanese inflation for the first time in many years exceeded the target levels, and this factor could affect the members of the central bank accordingly. According to the latest data, the overall consumer price index in Japan has already risen to 2.5% (against the forecast of growth to 1.5%), the strongest growth since November 2014. The consumer price index excluding fresh food prices (the most monitored inflation indicator by the central bank) also showed positive dynamics, rising to 2.1%. The growth rate of this indicator has become the highest since March 2015. However, even such long-term records could not change Kuroda's position. According to him, he plans to create conditions in the country's economy for stable inflation, while at the moment the increase in the growth rate of the consumer price index "is due to single factors, such as rising energy prices." Arguing his position, he recalled that consumer prices excluding food and energy increased by only 0.8% in annual terms. At the same time, he tactfully kept silent about the fact that this indicator left the negative area for the first time in many months.     In other words, the Japanese regulator has maintained its dovish rhetoric, even despite the record devaluation of the national currency. The depreciation of the yen (paired with the dollar) to 24-year lows worried the head of the Bank of Japan, but "only in words." Kuroda said that the rapid weakening of the Japanese currency negatively affects the economy, but at the same time, "the authorities are not striving to achieve a specific exchange rate." At the moment, the USD/JPY pair is approaching the borders of the 135th figure again. The yen is depreciating not only against the greenback, but also in many cross pairs (for example, GBP/JPY and EUR/JPY). The American currency, in turn, is strengthening its positions throughout the market against the backdrop of rising treasury yields and the "ultra-hawkish" results of the June Fed meeting. Considering the pace of the upward movement, we can assume that the buyers of the pair in the medium term will not only gain a foothold within the 135th figure, but also "swing" to the next price level. The USD/JPY technical picture shows similar signals. On all "higher" timeframes (from H4 and above), the pair is either on the top or between the middle and top lines of the Bollinger Bands indicator. In addition, on the daily and weekly charts, the Ichimoku indicator has formed one of its strongest bullish signals. Therefore, it is advisable to use any corrective pullbacks to open long positions with the first target at 135.50. The main target is 100 pips higher, at 136.50, which is the upper line of the Bollinger Bands on the timeframe.   Read more: https://www.instaforex.eu/forex_analysis/313795
Australian CPI Expected to Rise to 5.2%: Impact on AUD/USD and RBA's Rate Hike Dilemma

The Yen is Beaten Down after BOJ Stands Pat

Marc Chandler Marc Chandler 17.06.2022 15:36
June 17, 2022  $USD, Australia, BOE, BOJ, Bonds, Currency Movement, ECB, Federal Reserve, Japan Overview:  The large bourses in the Asia Pacific fell today after sharp losses in the US yesterday. China and Hong Kong were exception, posting more than 1% gains. The mainland markets closed higher on the week. Europe’s Stoxx 600 made a new low for the year before recovering. It is up a little more than 1% around midday. US futures are around 0.75% higher. The US 10-year yield is firm near 3.20%, while the rally in European bonds and narrowing peripheral-core spreads continues. Italian, Spanish, and Portuguese benchmark yields are 18-20 bp lower, while German, French, and Dutch yields are 7-9 bp lower. The greenback is trading with a firmer bias, with the yen being tagged for around 2% after the BOJ showed no intention of addressing the yawning divergence of monetary policy. The Norwegian krone and Swiss franc are the most resilient. Among emerging market currencies, the freely accessible ones are the most resilient today, including the South African rand, the Polish zloty, and the Mexican peso. Gold has risen by almost $50 an ounce over the past two sessions but has come back offered today and is hovering around $1850. July WTI continues to recover from its 4.4% slide in the first few sessions this week. It gained almost 2% yesterday and is up another 1% today and is near $119. US natgas is edging higher and is near $7.50 having finished last week near $8.85. Europe’s benchmark has surged 55% this week as US and Russian supplies have been disrupted. Iron ore extended its sell-off for the seventh consecutive session. It is off about 18% in this run. Copper is faring a bit better, but it has fallen in five of the past six sessions coming into today and is off another 0.5% today. It has fallen a little more than 8% during this downdraft. July wheat rose 2.7% yesterday and is little changed so far today.  Asia Pacific The Bank of Japan stood pat, recommitted to its yield-curve control and daily bond purchases, driving the yen sharply lower. Governor Kuroda appeared to have made one seemingly minor concession. The BOJ's statement included a reference to the markets, saying that the impact on foreign exchange market and financial markets would be watched. This did not deter market participants from selling off the yen as the divergence of monetary policy is maintained. The dollar recovered from yesterday's low around JPY131.50 to almost JPY134.65. In this context, intervention, which has not seemed particularly likely seems even more remote now. A statement from the G7 (June 26-28) may not deviate from the boilerplate references that foreign exchange rates are best set by the markets, but excessive volatility is undesirable. The combination of a larger than expected RBA rate hike last week, a bigger than expected rise in the minimum wage, and hawkish comments from central bank Governor Lowe has sparked a dramatic adjustment in Australian rate expectations. The implied year-end rate of about 3.85%, is up 70 bp this week after the 80 bp rise last week. The 10-year yield has risen for the third consecutive week for a cumulative increase of almost 90 bp to above 4.10%. The dollar peaked on Wednesday at a 22-year high around JPY135.60 before reversing lower. It posted a key reversal by making new highs for the move and then settling below the previous session's low. There was follow-through dollar selling yesterday to JPY131.50. In the aftermath of the BOJ meeting, the dollar has jumped back and approached yesterday's high that was just shy of JPY134.70. There is an option for almost $700 mln at JPY135 that expires today. The greenback was around JPY134.40 at the end of last week. The two-day rally that lifted the Australian dollar about 2.5% stalled near $0.7070 yesterday. It is straddling the $0.7000 level in late morning dealings in Europe. At $0.6960, it would have given up half of the gains since the June 14 low (~$0.6850). The option for almost A$500 mln at $0.7000 that expires today appears to have been neutralized. The Aussie settled last week near $0.7060. The greenback traded quietly against the Chinese yuan and was confined to the smallest range of the week, trading between roughly CNY6.6915 and CNY6.7060. The PBOC set the dollar's reference rate at CNY6.6923, a little lower than the median in the Bloomberg survey of CNY6.6944. The fixings have alternated this week between a stronger and weaker than projected yuan. The dollar is a little lower on the week, having closed near CNY6.7090 last week.  Europe The Bank of England hiked the base rate by 25 bp. It warned that rather than expand by 0.1% this quarter, the economy was likely to contract by 0.3%, and inflation would peak closer to 11% than 10% as it suggested previously. Three members dissented in favor of a 50 bp increase. The statement said the central bank is prepared to act more forcefully if necessary. The year-end rate implied in the swaps market jumped 16 bp to 3.0% yesterday and is edging a little higher today. It is pricing in about 185 bp of hikes in the four remaining meetings of the year. That is more than a 50 bp hike that are fully discounted for the next three meetings, plus a little more. The ECB built market expectations earlier this week when it needlessly announced an emergency meeting to discuss the market. Nothing new came of it but instructions for others to have another meeting and devise a tool that can be used to fight the divergence of interest rates, which ECB President Lagarde says can interfere with its price stability mandate. Lagarde appears to have briefed the eurozone finance ministers that the ECB intends to put limits on bond spreads. Details are still lacking, but ostensibly the purpose is to curb sharp moves in short-time periods, and address what Lagarde called "irrational" moves. The tool sounds a lot like the Outright Market Transactions, which focused on the short end of the coupon curve, the purchases were to be neutralized, ostensibly by the sales of another asset, and required the beneficiary country to request it. Conditions were to be attached. If it is the ECB's tool and it is used under it discretion, won't that dilute conditionality?  Selling German Bunds might make sense if the ECB thought that a shortage of them was an important factor driving the spread. However, determining what is an irrational move can be an expensive exercise. The euro traded a little above $1.06 yesterday, its best level of the week amid what appeared to be a short squeeze. Earlier in the session it traded below $1.04. The narrowing of intra-EMU bond spreads seemed to encourage the move. The US 2-year premium over Germany fell from 213 bp to 194 bp yesterday, its least in four months. The euro is consolidating today after advancing for the past three sessions, the longest advance this month. It briefly traded below $1.05 in late Asian turnover, where options for 1.2 bln euros expire today. It settled last week near $1.0520. Sterling rallied by nearly 3% over the past two sessions, its biggest two-day rally this year. It poked above $1.24 yesterday but was unable to sustain the strong upside momentum. Sterling has been capped today around $1.2365 as a consolidative tone is seen ahead of the weekend. Initial support is seen around $1.2250, and a break could spur another half cent decline. Sterling settled near $1.2315 last week. America Although Fed Chair Powell pushed back against any suggestion that the economy is fragile, the latest string of May and June data have disappointed. It actually began with the June Empire State manufacturing survey (-1.2 vs. 2.3 median forecast in Bloomberg survey), and carried through May retail sales, and yesterday's news of a 14.4% drop in housing starts (which partly was blunted by a revision to the April series to 5.5% from -0.2%). The Philadelphia June survey unexpectedly fell to -3.3 from 2.6. The six-month outlook for orders, ostensibly a lead indicator, fell sharply to levels associated with economic contractions. Weekly initial jobless claims were a little higher than expected and have averaged 230k over the last couple of weeks, the most in five months. On tap today are the May industrial production and Leading Indicators Index. Industrial output likely slowed after the heady 1.1% gain in April. Economists expect a modest gain (0.4%) with manufacturing output growth slowing to 0.3% (from 0.8%). The manufacturing sector added 18k jobs in May, according to the recent employment report, the least since April 2021. Given the recent track record of not appreciating the economic softness, the risk is on the downside. The components of the LEI are largely known, and the index is expected to have fallen for the second consecutive month for the first time since Covid struck. Powell makes opening remarks at a conference between the equity market today, and Governor Waller discusses monetary policy tomorrow at a Dallas Fed gathering. Canada reports May industrial prices and April securities transactions, neither are typical drivers of the Canadian dollar. The swaps market is strongly leaning toward a 75 bp hike at the July 13 Bank of Canada meeting. Several Canadian banks have switched and now look for a 75 bp move. The market has 200 bp of tightening priced in the next four meetings. It looks like a 75 bp move, two 50 bp moves and a 25 bp in December. However, the broader risk appetite seems more important for the day-to-day movements. Since it almost reached CAD1.30 in the middle of the week, the US dollar has consolidated. The Canadian dollar did not take part in yesterday's wider move against the greenback. A break above CAD1.30 targets last month's high near CAD1.3075. Important support has developed around CAD1.2860. The Canadian dollar is one of the weakest of the major currencies this week, falling about 1.5% against the US dollar. So far today, the dollar trading between MXN20.30 and MXN20.50. It settled near MXN19.96 last week. Mexico's central bank meets on June 23. A 75 bp hike is expected after four 50 bp hikes and the Fed's large move. A 100 bp hike seems more likely than a 50 bp move.    Disclaimer
The US Dollar Weakens as Chinese and Japanese Intervention Threats Rise, While US CPI and UK Jobs Data Await: A Preview

How Is GBP/USD Doing? British pound pares post-BoE gains | Oanda

Kenny Fisher Kenny Fisher 17.06.2022 15:40
Pound jumps after BoE rate hike The pound had a wild day on Thursday, trading in a 350-point range. Sterling traded in a 300-point range overnight, with markets not quite sure to make of the BoE’s 0.25% rate increase. In the end, the pound received a thumbs-up and posted a gain of 1.45%.  The rate hike, which was the fifth in a row, was indeed modest, but investors liked that the BoE signalled that more rate hikes were on the way. As well, the MPC’s split 6-3 decision (3 members voted for a 0.50% hike) no doubt sent a signal that the BoE could provide a hawkish pivot if inflation does not peak. The BoE has warned of a recession and has forecast that inflation will top 11%, making it difficult to feel reassured by the central bank, but it appears that with the MPC unanimously voting to raise rates at the meeting, investors had something to feel positive about. The US dollar has shown that it can recover quickly and the risk for the pound remains tilted to the downside, with dark clouds hovering above the UK economy. GDP fell by 0.3% in April after a 0.1% decline in March, the first back-to-back contractions since March 2020, at the start of the Covid pandemic. The OECD has forecast that the UK economy will grow by 3.6% this year, but will stagnate in 2023, which would make it the worst-performing G-7 economy in 2023. In a week of dramatic central bank decisions, the Federal Reserve won the highlight of the week. The Fed delivered a 0.75% salvo, the first since 1994, bringing rates to a target range of 1.50-1.75%. The Fed downgraded its US growth forecasts for 2022 and 2023, but insisted that there would be no recession. Some analysts would beg to disagree, but the financial markets were relieved, as Fed Chair Powell said he didn’t expect 0.75% rate hikes to become common. The move is a clear signal that the Fed plans to use all available tools to wrestle down inflation, which has hit a 40-year high. . GBP/USD Technical GBP/USD has support at 1.2215 and 1.2016 There is resistance at 1.2407 and 1.2514     This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. British pound pares post-BoE gains - MarketPulseMarketPulse
EUR/CHF: Features and recommendations Read more: https://www.instaforex.eu/forex_analysis/313786

EUR/CHF: Features and recommendations

InstaForex Analysis InstaForex Analysis 17.06.2022 15:53
Long-term review Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   EUR/CHF belongs to the category of "cross-pairs" and shows how many units of the Swiss national currency (franc) you need to pay for one euro, which is the legal tender of 19 countries (as of September 2020) that are members of the eurozone (Austria, Belgium, Germany, Greece, Ireland, Spain, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, Finland, France, Estonia) and the national currency of another 12 states, 7 of which are located in Europe. The base currency in the EUR/CHF pair is the euro. This means that the commodity in the EUR/CHF pair is the euro, and the Swiss franc is the second currency in the pair, with which the base currency (the euro) is bought. The euro is included in the IMF basket, consisting of five major world currencies (in descending order): the US dollar, the euro, the yuan, the yen, and the pound sterling. At the same time, the euro and the franc are the world's reserve currencies, and the franc is considered the most stable currency in the world. At the moment (after the meeting of the Swiss National Bank on June 16, 2022, when the central bank of this country unexpectedly raised the key interest rate on deposits by 0.50% to -0.25%), the EUR/CHF pair is trading on the Forex market at a price below 1.0200. This means that for one euro they give less than 1.0200 francs.     Features of trading the EUR/ CHF pair 1. Both the euro and the franc and the EUR/CHF pair are characterized by high liquidity. At almost any moment, there will be both buyers and sellers for the franc or euro. The trading volumes of the EUR/CHF pair are quite high. According to various estimates, the euro accounts for slightly less than 30% of the total trading volume on the foreign exchange market. 2. Germany, whose economy is the locomotive of the Eurozone economy, at the beginning of 2020 was in 5th place in the world in terms of GDP (3.13%), while Switzerland is in 39th place (0.40%). 3. At the same time, Switzerland ranks 9th in the world in terms of GDP (according to the IMF rating) per capita, and its economy is one of the most stable in the world. The share of Switzerland in world GDP is approximately 0.40%, the share of the Eurozone is 17%. 4. The EUR/CHF pair is actively traded throughout the trading day. The highest peak of trading activity with the euro, the franc, and the EUR/CHF pair and the largest trading volumes occur during the European session (06:00 – 16:00 GMT). Moreover, the first two or three hours at the beginning of trading in London (07:00 – 10:00) are the most active in trading the EUR/CHF pair. In the period from 10:00 to 15:00 (GMT), sharp, as it seems, sometimes unreasonable, movements of the pair are often observed, and in any direction. 5. The surge in trading volatility in the EUR/CHF pair falls, in addition to the release of news of a political nature, during the publication of important macroeconomic indicators for the Eurozone, Germany, and Switzerland. The following macroeconomic factors and indicators give the greatest volatility to the EUR/CHF pair: Decisions of the Swiss National Bank and the ECB regarding monetary policy in Switzerland or the euro area; Speeches by the heads of the SNB and the ECB (currently Thomas Jordan and Christine Lagarde, respectively); Publication of minutes from the latest meetings of the SNB and the ECB on monetary policy issues; Data from the labor market of Switzerland, Eurozone, Germany; GDP data for Switzerland, Eurozone, Germany; Publication of inflation indicators for Switzerland, Eurozone, Germany Strong macroeconomic data in Switzerland or the euro area lead to the strengthening of the franc or the euro, respectively, as they contribute to the growth of "tough sentiment" of the central banks of Switzerland or the Eurozone regarding an increase in the interest rate. And this is a positive factor for the national currency, which leads to an increase in its value. 6. Important political events in Switzerland, the euro area, and in the world also affect the quotes of currencies, and above all, the franc and the euro. The sale of assets on the stock markets of Europe leads, as a rule, to an increase in the value of the euro, including in the EUR/CHF pair. And vice versa. The growth of the stock market in the euro area, as a rule, is accompanied by a decrease in the value of the euro. 7. Although the franc has recently lost its status as a safe-haven currency due to active intervention in the trades of the Swiss central bank, it is still in active demand among investors during periods of economic or political uncertainty in the world. The franc retains a fairly strong direct correlation with the yen and gold, which have the status of safe-haven assets in the financial markets. 8. Investors still have fresh memories of when the Swiss National Bank "untied" the franc rate from the euro on January 15, 2015. The EUR/CHF pair saw a dramatic jump in volatility. In one day the EUR/CHF lost 2250 pips. In the next 4 weeks, the EUR/CHF pair "beat off" about a third of the losses, however, the EUR/CHF pair never again rose to levels near the 1.2000 mark. Currently, the EUR/CHF pair is trading near the 1.0700 mark, and the SNB periodically interferes in the trading in the foreign exchange market with the sale of the franc. In recent years, the SNB has traditionally considered the franc overbought and relatively expensive, which, according to the bank, hinders the growth of the Swiss economy and harms the country's exporters. 9. The intraday volatility of the EUR/CHF pair fluctuates in different periods of the month and year. On average, it is 65 points, but it can exceed 150 points during periods of publication of important news of a political or economic nature. 10. Many traders prefer to trade this pair at the end of the trading day and the American session. The strategy is scalping.   Read more: https://www.instaforex.eu/forex_analysis/313786
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

USD/CHF: Has Swiss Franc Been Supported By SNB? How Has US Dollar Reacted? USDCHF Technical Analysis and Trading Tips on June 17, 2022 | InstaForex

InstaForex Analysis InstaForex Analysis 17.06.2022 15:57
Relevance up to 13:00 2022-06-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   As of this writing, USD/CHF is trading near 0.9660, down from an intra-month high of 1.0049 (the last time the price was near this mark was in May 2022 and in May 2019). Despite today's renewed dollar strength, the USD/CHF remains under strong negative pressure after yesterday's unexpected decision by the Swiss Nation Bank to raise interest rates. As SNB Chairman Thomas Jordan said yesterday, the Swiss franc is no longer grossly overvalued, i.e. it accepts the possibility of further strengthening of the franc, which the SNB so consistently fought against recently by keeping the interest rate on deposits at a record low of -0.75% and intervening in the trading market with the sale of the franc.     Yesterday, USD/CHF reached a local low of 0.9629, breaking through an important support level of 0.9670 (50 EMA on the daily chart and the 61.8% Fibonacci retracement to the downward wave that began in April 2019 near 1.0235).     The breakdown of yesterday's local low may become a driver of further USD/CHF decline towards the local support level of 0.9555, the breakdown of which, in turn, will strengthen the negative dynamics of USD/CHF, sending it to the zone of key support levels 0.9435 (200 EMA on the weekly chart) and 0.9415 (200 EMA on the daily chart), separating the long-term bullish trend of the pair from the bearish one.     In an alternative scenario, and in view of the renewed strengthening of the dollar, an upward correction may begin from the current levels. The first signal to resume long positions will be a breakdown of the important resistance level 0.9731 (200 EMA on the 4-hour chart). In case of a breakdown of the resistance level 0.9820 (200 EMA on the 1-hour chart), USD/CHF is likely to continue rising towards recent highs above 1.0000. Support levels: 0.9630, 0.9555, 0.9500, 0.9495, 0.9475, 0.9435, 0.9415, 0.9380, 0.9325 Resistance levels: 0.9670, 0.9731, 0.9800, 0.9820, 0.9900, 0.9970, 1.0000, 1.0060 Trading Tips Sell Stop 0.9615. Stop-Loss 0.9715. Take-Profit 0.9555, 0.9500, 0.9495, 0.9475, 0.9435, 0.9415, 0.9380, 0.9325 Buy Stop 0.9715. Stop-Loss 0.9615. Take-Profit 0.9731, 0.9800, 0.9820, 0.9900, 0.9970, 1.0000, 1.0060   Read more: https://www.instaforex.eu/forex_analysis/313799
JPY: Assessing the FX Intervention Zone and Market Conditions

EURUSD: Euro Has Rallied Recently, What Will Be US Dollar's Answer? Technical analysis of EUR/USD for June 17, 2022 | InstaForex

InstaForex Analysis InstaForex Analysis 17.06.2022 16:06
Relevance up to 15:00 2022-06-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Overview : The EUR/USD pair continues to move upwards from the level of 1.0435. Today, the first support level is currently seen at 1.0435, the price is moving in a bullish channel now. Furthermore, the price has been set above the strong support at the level of 1.0435, which coincides with the 23.6% Fibonacci retracement level. This support has been rejected three times confirming the veracity of an uptrend. According to the previous events, we expect the EUR/USD pair to trade between 1.0435 and 1.0602. Also, the daily resistance and support are seen at the levels of 1.0602 and 1.0435 respectively. Therefore, it is recommended to be cautious while placing orders in this area. The support stands at 1.0435, while daily resistance is found at 1.0602. Therefore, the market is likely to show signs of a bullish trend around the spot of 1.0435. The market is likely to show signs of a bullish trend around the spot of 1.0435. Moreover, the major support is also coinciding with the major support today. Additionally, the RSI is still calling for a strong bullish market as well as the current price is also above the moving average 100. Therefore, it will be advantageous to buy above the support area of 1.0435. In other words, buy orders are recommended above the spot of 1.0435 with the first target at the level of 1.0554; and continue towards 1.0602. However, if the EUR/USD pair fails to break through the resistance level of 1.0602 today, the market will decline further to 1.0383 so as to test the weekly bottom - the last bearish wave. Read more: https://www.instaforex.eu/forex_analysis/280651
Sustainability-Linked Products: Navigating Growth and Challenges for the Future

FX Cable (GBPUSD): Technical analysis of GBP/USD for June 17, 2022 | InstaForex

InstaForex Analysis InstaForex Analysis 17.06.2022 16:14
Relevance up to 15:00 2022-06-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The GBP/USD pair is at an all-time low against the dollar around the spot of 1.1933. The GBP/USD pair is inside in downward channel. Closing below the major resistance (1.2342 - 61.8% of Fibonacci) could assure that GBP/USD will move lower towards cooling new lows. The GBP/USD pair is continuing dropping by market cap at 3% in a day, 16.33% in a week, and 61.09% in a month, and is trading at 1.2230 after it reached 1.2186 earlier. The GBP/USD pair has been set below the strong resistance 1.2342, which coincides with the 61.8% Fibonacci retracement level. This resistance has been rejected three times confirming the veracity of an downtrend. RSI (14) sees major descending resistance line acting as resistance to push price down from here (1.2342). Equally important, the RSI and the moving average (100) are still calling for an downtrend. Therefore, the market indicates a bullish opportunity at the level of 1.2264 in the H1 chart. Also, if the trend is buoyant, then the currency pair strength will be defined as following: GBP is in an uptrend and USD is in a downtrend. The market is likely to show signs of a bearish trend around the spot of 1.2342 and/or 1.2264. Sell orders are recommended below the area of 1.2264 with the first target at the price of 1.2186; and continue towards 1.2089 in order to test the last bearish wave. The descending movement is likely to begin from the level 1.2264 with 1.2186 and 1.2089 seen as targets. Amid the previous events, the pair is still in a downtrend, because the GBP/USD pair is trading in a bearish trend from the new resistance line of 1.2264 towards the major support level at 1.2089 in order to test it. If the pair succeeds to pass through the level of 1.2089, the market will indicate a bearish opportunity below the level of 1.2089. On the other hand, if the GBP/USD fails to break through the support price of 1.2089 today, the market will rise further to 1.2342 in coming hours. Read more: https://www.instaforex.eu/forex_analysis/280655 Read more: https://www.instaforex.eu/forex_analysis/280655
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

Forex forecast 06/17/2022 USD/JPY, EUR/JPY, SP500, Oil and Bitcoin from Sebastian Seliga | InstaForex

InstaForex Analysis InstaForex Analysis 17.06.2022 22:42
Relevance up to 20:00 2022-06-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Let's take a look at the technical picture of USD/JPY, EUR/JPY, SP500, Oil and Bitcoin Read more: https://www.instaforex.eu/video_analysis/280665 Read more: https://www.instaforex.eu/video_analysis/280665
UK Budget: Short-term positives to be met with medium-term caution

FX: Will (GBP) British Pound Strengthen For Good!? GBP/USD Intraday technical analysis and significant key-levels | InstaForex

InstaForex Analysis InstaForex Analysis 17.06.2022 22:54
Relevance up to 22:00 2022-06-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   The short-term outlook turned bearish when the market went below 1.3600. This enhanced the bearish side of the market initially towards 1.3360 then 1.3200 which initiated a temporary bullish movement towards 1.3600 for a final re-test. The price level of 1.3600 corresponding to the upper limit of the ongoing bearish channel initiated an aggressive bearish movement towards 1.2980 - 1.3000. The price level of 1.3000 stood a transient Support where a short-term consolidation movement existed. This happened just before two successive bearish dips could take place towards 1.2550 and 1.2160. Considerable bullish rejection was expressed around 1.2200. However, the pair failed to persist above 1.2550. This was needed to abolish the short-term bullish scenario for sometime. Instead, a quick bullish movement was executed towards 1.2650 where extensive bearish rejection existed. The GBP/USD pair remained under bearish pressure to challenge the new low around 1.2150 again which was temporarily bypassed before Immediate bullish rejection could brin the pair back above 1.2150 again. Bullish persistence above 1.2300 will probably enable further bullish continuation towards 1.2650 where further decisions can be taken. On the other hand, another bearish visit may be expected to challenge 1.1950 again if sufficient bearish momentum is expressed.   Read more: https://www.instaforex.eu/forex_analysis/280669
JPY: Assessing the FX Intervention Zone and Market Conditions

EUR/USD Intraday technical analysis and trading plan

InstaForex Analysis InstaForex Analysis 17.06.2022 23:03
Relevance up to 22:00 2022-06-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The EURUSD looked oversold while approaching the price levels of 1.0800. That's when a temporary upside movement was approaching the price levels around 1.1200. This recent movement towards 1.1200 was suggested for another SELL opportunity which already reached its targets beyond the price level of 1.0400. The previous ascending movement above 1.0600 enabled further advancement towards 1.0800 where evident bearish rejection arises again. On the other hand, the pair remains trapped under selling pressure to challenge the recent daily low around 1.0350 where price action should be watched.   Read more: https://www.instaforex.eu/forex_analysis/280671
GBP: Softer Ahead of CPI Risk Event

EUR/USD daily technical review and trading opportunities | InstaForex

InstaForex Analysis InstaForex Analysis 17.06.2022 23:07
Relevance up to 22:00 2022-06-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   In late September, Re-closure below the price level of 1.1700 has initiated downside-movement towards 1.1500 where some recovery was witnessed. Shortly after, Price levels around 1.1700 managed to hold prices for a short period of time before another price decline took place towards 1.1200. Then the EURUSD has temporarily moved-up within the depicted movement channel until downside breakout occurred recently. Since then, the price zone around 1.1500 has applied significant SELLING pressure when a valid SELL Entry was offered upon the previous ascending movement towards it. Shortly after, the EURUSD looked oversold while approaching the price levels of 1.0800 few weeks ago. That's where the recent upside movement was previously initiated. However, the recent movement towards 1.1200 was considered for another SELL Trade which is already running in profits now. The previous ascending movement above 1.0600 enabled further advancement towards 1.0800 where bearish rejection could be applied again.   Read more: https://www.instaforex.eu/forex_analysis/280673
Markets May Shock You Today! FX: EUR/USD & USDCAD, DAX (GER 40) And FTSE (UK 100) - Daily analysis by DayTradeIdeas - 20/06/2022

Markets May Shock You Today! FX: EUR/USD & USDCAD, DAX (GER 40) And FTSE (UK 100) - Daily analysis by DayTradeIdeas - 20/06/2022

Jason Sen Jason Sen 20.06.2022 08:05
EURUSD recovery from the May low of 1.0360/50 leaves a potential double bottom buy signal although on Friday we made a high for the day at 1.0545/55. Above here today retests Thursday's high at 1.0660/62 then last week's high at 1.0640/42. Minor support at 1.0460/50. Below 1.0330 risks a retest of the double bottom low at 1.0360/50. Longs need stops below 1.0325. USDCAD clearly at the upper end of the 1 year range as we retest the May high at 1.3060/80. This will be key to direction for this week. Probably worth trying a short with stop above 1.3100. A break higher however targets 1.3160/70 & 1.3240/60. Shorts at 1.3060/80 target 1.3030/20 & 1.3000/1.2990. Expected good support at 1.2955/35 for today. Dax looks likely we can hold important longer term support at 13250/150 for a bounce to 13360/380 then 13500 & resistance at 13600/650. We have a gap to fill at 13730/750. A break above here is anther buy signal. A break below 12950 is a very important medium term sell signal initially targeting 12700/600 before a retest of the March low at 12450/425. FTSE broke lower to the next target of 7000/6990 last week, holding just 56 ticks above very strong support at 6940/10. Longs here this week need stops below 6870. The bounce on Friday held 8 ticks from strong resistance at 7120/40. Shorts need stops above 7160. A break higher is a buy signal targeting 7240/50, perhaps as far as strong resistance at 7300/20. To receive this report every morning please subscribe at our website www.daytradeideas.co.uk or email jason@daytradeideas.co.uk
TRY: Central Bank set to deliver significant rate hike today

FX: USD/TRY: Is Turkish Lira (TRY) Going To Weaken!? What Are Forecasts For USD/ZAR, USD/KZT & USD/ILS? | ING Economics

ING Economics ING Economics 20.06.2022 09:15
USD/KZT Tenge withstands geopolitical uncertainties so far Current spot: 437.05 USD/KZT moved to 420-440, in line with our positive scenario. High prices keep oil exports strong (+98% YoY in 1Q22), and capital account is protected by capped outward FX transfers, 10% subsidy to KZT deposits, and forced 75% FX sales by oil exporters. Kazakhstan renamed its oil exports via Russia (totaling 80% of annualised oil export) to KEBCO, allowing to reach US$11-12bn oil exports in 2Q22F (US$7.9bn in 1Q21) under average Brent price US$110/bbl. Geopolitics, trade ties with Russia (c.11% exports and c.42% imports) and potential relaxation of capital controls may return USD/KZT to 440-500 range, but a stronger KZT is also possible on higher oil, repatriation of previous grey capital outflows, and more inward FDI following the recent constitutional referendum. USD/TRY Currency pressures rising again Current spot: 17.25 May inflation showed no respite with continuing broad-based pricing pressures mainly driven by an accommodative monetary policy stance. Upside price risks remain at the forefront with ongoing geopolitical issues and less supportive global backdrop. Current account deficit has remained on expansionary path in March driven by commodity imports - particularly higher energy bills. As oil prices are expected to remain elevated, the current account will likely maintain the widening trend in the near term. Given this backdrop, sentiment in the currency market has turned negative since early May. Global developments as well as inflation expectations in an environment of negative real rates will remain as the determinants of the currency. USD/ZAR Impressive rand recovery Current spot: 16.06 The strength of the rand recovery has surprised us. ZAR real yields are not particularly impressive, where the policy rate is 4.75% and headline inflation is at 5.9%. The commodity story no doubt continues to help and was evidenced by a decent 1Q22 current account surplus of 2.2% of GDP. We still have our doubts about the strength of the Chinese recovery and unless Beijing introduces some bazooka-style stimulus after a late July politburo meeting, ZAR stays fragile. Our baseline view is that higher US real rates lead to a stronger dollar in 2H22 and $/ZAR heads back to the 16.00/16.20 area again. Later in the year politics will again play a role with ANC elections held in December. Ramaphosa remains the favourite to win. USD/ILS ILS poised to recover Current spot: 3.4422 $/ILS is consolidating about 3% off the highs of the year seen in mid-May. Interestingly in its review of FX markets in 1Q22, the BoI blamed ILS weakness on the domestic buy-side for uncharacteristically buying FX. It is not clear that those outflows will continue, but what may have a little more longevity are Israel’s current and FDI inflows, helped by the service sector. On the policy rate, the market may be too aggressive in pricing the policy rate at 2.50% next summer, but with growth still strong, hikes towards 1.00/1.25% look likely this year. When the dollar trend turns (early 2023?), $/ILS should turn decisively lower and sub 3.00 may well be the 2023 story. This article is a part of a report by ING Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Inflation In Philippines Hit 6.1%, Its Pace Is Record-Breaking. What Are The Predictions Of BSP (Bangko Sentral ng Pilipinas) Monetary Policy?

Gold Price Or FX - What's More Volatile Now? What's Ahead EURCHF And USDCHF After SNB Decision? Price Of Crude Oil Dropped. Awaiting Powell's (Fed) Testimony | Saxo Bank

Saxo Bank Saxo Bank 20.06.2022 10:26
Summary:  Equity markets tried to end last week’s grueling sell-off with a positive flourish on Friday, as oil prices dropped by the most in several weeks and firmness in safe haven bond markets kept bond yields at the low end of the week’s range. But are those developments down to investor concern that a recession is incoming? The week ahead features semi-annual testimony from Fed Chair Powell before Congress and global preliminary June PMI surveys.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Despite extreme volatility in cryptocurrencies and another “stablecoin (USDD)” losing its peg to the USD, US equities futures are starting the week on mild positive note. S&P 500 futures are trading slightly higher at the 3,690 level and will likely try to test the opening price from last Wednesday’s session at around the 3,743 level if risk sentiment remains positive today. There are no important macro events today so trading will be light, also due to today being a holiday in the US so cash equity markets are closed, and potentially take their lead from cryptocurrencies, although we expect the correlation to begin to decline with cryptocurrencies reducing itself to a small and isolated pocket of the market again. Hong Kong’s Hang Seng and China’s CSI300 Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) were fluctuating between modest gains and losses. Chinese property names surged with COLI (00688) and CR Land (01109) rising 9% and 8% respectively. According to Beke Research, secondary market home sales volume in China’s top 50 cities rose more than 20% in the first 10 days of June from last month. June Emerging Industries PMI came at 52.5, 3.6pp higher than May. With COVID outbreak, Macao gaming stocks fell. China’s 1-year and 5-year Loan Prime Rate remain unchanged. EURCHF and USDCHF The Swiss franc was in for a positive shock last week after a surprise hike – and a large 50-basis point one – from the Swiss National Bank altered the landscape for CHF traders, suggesting the central bank is less concerned with always lagging the ECB in its policy move and a moderating of concerns about the CHF level versus EUR, as a strong franc is potentially one tool that can help ease inflationary pressures. EURCHF reset lower to sub-1.0200 levels after trading between 1.04-1.05 before last week’s meeting. Focus now is on the parity level that was briefly touched in the wake of the Russian invasion of Ukraine. USDCHF is another focus, trading below 0.9700 after trading as high as parity before the decision. The 0.9500-0.9550 area is the next technical focus area there. USDJPY and JPY pairs A very challenging backdrop here for JPY traders, as the Bank of Japan’s insistence on maintaining its negative 0.10% policy rate and more importantly, the yield-curve-control policy by which it caps 10-year Japanese government bond yields at 0.25%, was seen as very JPY negative last week in the wake of a US Fed hiking the most since 1994 and the SNB executing a surprise large hike etc. At the same time, global bond markets rallied hard to close the week, particularly in the dominant US treasury market, with oil markets in a nosedive on Friday, both supportive developments for the Japanese yen. Focus for USDJPY traders remains on the 135.00+ cycle top, which may hold as long as US longer treasury yields are capped below cycle highs. To the downside, last week’s low near 131.50 was close to the prior major pivot high of 131.35. Crude oil Crude oil (OILUKAUG22 & OILUSJUL22) plunged almost 7% on Friday after growth worries signaled by the FOMC aggressive action to bring down inflation spread from the stock market and industrial metals to fortress oil and fuel. A sector which up until now has seen limited contagion risks given the tight supply outlook amid Russian sanction, OPEC+ producers struggling to raise production and lack of refinery capacity. Speculators turned net sellers of WTI in the week to June 14 following several failed attempts to break higher, potentially a signal we have entered another period of consolidation, but still with the underlying risk of eventually moving higher.  Gold Gold (XAUUSD) remains rangebound following a week of high drama that saw dramatic yield spikes being offset by growing unease about the economic outlook with recession worries on the rise as central banks step up their efforts to curb inflation. Focus on the dollar and Fed Chair Powell’s semi-annual testimony before the Senate Banking Committee on Wednesday (see below). Speculators cut bullish futures to a nine-month low ahead of last week’s FOMC rate hike announcement while total bullion-backed ETF holdings on Friday dropped to three months low, both highlighting the current uncertainty about the short-term direction. Copper HG Copper (COPPERUSSEP22) has returned to the key $4/lb support area after falling around 10% during the past two weeks on China and global growth worries. Iron ore (SCON2) traded in Singapore and metallurgical coal in Shanghai, both key inputs to the production of steel have lost around 20% during the same period. China’s slumping property market and the country’s inability to put the coronavirus behind it remain a major headwind, and one that inadvertently is supporting the efforts to curb inflation through lower input costs. Copper, rangebound for more than a year, is in the short-term at risk of breaking lower with the next level of support at $3.86 before $3.50. US Treasuries US treasuries (TLT, IEF) remained firm on Friday, keeping yields at the lower end of the week’s range and near the important tipping point around 3.20% for the 10-year Treasury yield benchmark, which was the prior yield high on the way up. US data surprises have tilted increasingly negative of late and a huge sell-off in crude oil on Friday may drive slightly lower inflation expectations if the lower prices stick. US Fed Chair Powell is up this week with semi-annual testimony before Senate and House committees on Wednesday and Thursday, respectively. Crypto rout extends with Bitcoin The largest and one of the more stable crypto assets, plunging below the critical 20k level over the weekend after it slid 15% on Saturday. This signals not just further stress in the crypto space but also broader stress in financial markets as liquidity conditions tighten. What is going on? French President Macron loses absolute majority in Parliament After the second round of parliamentary elections completed yesterday, President Macron’s centrist coalition will only win about 245 of of the 277 seats, with a leftist coalition headed by Jean-Luc Melenchon taking 131, and Marine Le Pen’s right populist National Rally at 89 seats.  The euro is taking the news in stride, but this result will hamper President Macron’s reform agenda, including his intent to raise the retirement age and reform the pension system. The tug of war between inflation and recession means room for policy error With the central banks bucking up on the tightening bandwagon last week, we are seeing a more serious fight against inflation which is set to rise further above 9% levels in the UK this week and remains in the 8% range for the US. However, this historic tightening pace following the Fed’s 75bps rate hike last week has meant further fears of an economic slowdown. A slew of weak US data reported last week also aggravated those concerns. Markets will continue to be choppy as investors weigh inflation/recession concerns, but the long-term bear trend is here to stay. The abrupt policy turn also means an increasing scope of policy error. Keeping an eye on corporate credit markets... ... after at least one measure of US high yield corporate spreads rose to a new cycle high last week above 500 basis points above US Treasury yields, above the mid-May high of 482 basis points and up over 100 basis points from the lows in early June. The two most widely tracked high yield ETF’s, HYG and JNK, closed sharply lower last week and are down around 15% (less in total return terms) from their late 2021 highs. What are we watching next? US Fed Chair Powell semi-annual testimony this week before House and Senate committees The Fed Chair will be in the hot seat this week in the required semi-annual testimony before Congress, where politicians on the committees often take a chance to grandstand on their own political positions and observations, but after several months of decades-high inflation and record gasoline prices, will this week’s testimony show that the political pressure on the Fed is mounting? The market will also watch for any new comments from the Fed Chair, although we are just a few days removed from the FOMC press conference. U.S. housing data are out on Tuesday The housing market is in a vulnerable position. Prices are up almost 40 % since the outbreak, mostly reflecting stimulus-fueled demand. But with high inflation across the board pushing consumer confidence downward and mortgage rates surging following the U.S. Federal Reserve’s tightening cycle, the risks of hard landing are tilted on the upside. Over the past few weeks, several large real estate firms such as Redfin Corporation have warned against the risk of slowdown. Expect a drop in May’s existing home sales and perhaps a new plunge in the number of new home sales after disappointing data in April (minus 16.6 %). The U.S. housing market is certainly the most vulnerable segment of the U.S. economy at the moment. It will be key to monitor the upcoming data in order to assess whether there is a material risk of recession or not. May UK CPI is out on Wednesday This will be painful. Expect a new increase to 9.1 % year-over-year in May against 9.0 % in April. Last week, the Bank of England (BoE) hiked rates by 25 basis points. This was expected. But political pressure is increasing on the central bank to do more while other developed market central banks have embraced a more hawkish tone (U.S. Federal Reserve, Reserve Bank of Australia, National Bank of Hungary, for instance). If inflation continues to rise (which is our baseline), we would not be surprised if we see the BoE go for an inter-meeting 25 basis points hike before the 4 August meet. Other central banks have done it recently, such as the National Bank of Hungary which decided a surprise 50 basis point hike to support the HUF last week. This only eased temporarily downward pressure on HUF. Earnings Watch This week’s earnings calendar is light but there are three important earnings releases to watch and those are Lennar, FedEx, and Accenture providing insights into the US housing market, logistics, and business spending dynamics (if you believe management consultancy is part of business spending). Today: Kanzhun Tuesday: Lennar Thursday: FedEx, Accenture, Darden Restaurants, FactSet Friday: Carnival, China Gas, CarMax Economic calendar highlights for today (times GMT) 0800 – Switzerland Weekly Sight Deposits 0800 – UK BoE’s Haskel to speak 1300 – ECB President Lagarde to speak 1500 – ECB President Lagarde to speak 1645 – US Fed’s Bullard to speak 1930 – ECB Chief Economist Lane to speak 0000 – Australia RBA Governor Lowe to speak 0130 – Australia RBA Meeting Minutes Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – June 20, 2022 | Saxo Group (home.saxo)
The EUR/USD Pair Showed Local Speculative Interest In Short Positions Yesterday

FX: EUR CHF - Swiss Franc Goes Like A Bomb! USD/JPY: Japanese Yen (JPY) Falls Back | Orbex

Jing Ren Jing Ren 20.06.2022 10:46
USDJPY recoups losses The Japanese yen fell back after the Bank of Japan vowed to keep interest rates ultra-low. A sharp U-turn above 134.50 has taken sellers by surprise and forced them to cover. A bullish MA cross suggests a possible acceleration to the upside. The recent peak at 135.60 is a key resistance and its breach could resume the rally towards 137.00. As the RSI goes into the overbought area, momentum buying could be fading as intraday traders take profit. The base of the latest surge at 132.40 would be the first support. EURCHF to test critical floor The Swiss franc edges higher as the market continues to price in the SNB’s hawkish turn. The euro’s plunge below the daily support at 1.0230 caused leveraged long positions to close out, driving up volatility. As the dust settles, an oversold RSI caused a brief rebound as short-term sellers bagged their profits. The price action is near April’s lows around 1.0090. A bearish breakout might trigger a new round of sell-off below the parity. On the upside, 1.0270 is the first resistance to clear before a recovery could materialise. GER 40 struggles for bids The Dax 40 struggles as investors grapple with the prospect of stagflation. A break below the daily support at 13300 invalidated the May rebound and could put the index on a bearish course in the weeks to come. Buyers’ failure to hold onto 13250 suggests that the bears have doubled down at the latest bounce. The index is heading towards 12750, though the RSI’s oversold condition attracted some buying interest. The rebound might come under pressure near 13650 as the bears could be waiting to sell into strength.
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

Is USD Going To Outperform Euro And JPY!? Let's Take A Look At EUR/USD & USD/JPY. | Oanda

Jeffrey Halley Jeffrey Halley 20.06.2022 16:34
Dollar in choppy waters The US dollar held onto its intraday gains on Friday, as US bond inflows seemed to support it as investors preferred safety over risk into the weekend and today’s US holiday. With the weekend being relatively uneventful, the US dollar has eased in Asia, but overall continues a pattern of choppy range trading. The dollar index rose 0.82% to 104.65 on Friday, thanks mostly to a weak yen. In Asia, it has eased 0.26% to 104.38. The dollar index has support at 1.0350 with resistance now distant at 1.0570.   EUR/USD eased by 0.56% to 1.0495 on Friday in another 100-point session, climbing by 0.31% to 1.0525 in Asia as weekend hedges are taken off. Dutch natural gas futures prices remain elevated, so the single currency is not receiving much of a boost from last Friday’s oil retreat. It has initial resistance at 1.0600, with challenging resistance at 1.0650. Support is at 1.0450 and 1.0400 now although I note that EUR/USD has based twice at 1.0350. That leaves the door open slightly to a corrective recovery this week.   Sterling has another awful day as its economic picture darkens, falling by 1.10% to 1.2215 on Friday, edging 0.22% higher to 1.2240 in Asia. ​ GBP/USD has initial resistance at 1.2400 and 1.2500, with support at 1.2200 and then 1.1950.   USD/JPY powered higher on Friday as the Bank of Japan left monetary policy unchanged and continues to heavily intervene to cap ultra-low JGB yields. With Japan’s inflation only expected to hit 2.50% this Friday, I can’t really blame them, but with the US, Switzerland, the United Kingdom, et al hiking, the interest rate differential continues to power USD/JPY higher. USD/JPY leapt 2.10% higher to 135.00 on Friday, with last week’s 131.50 low a distant memory and a bargain for somebody. Having probed 135.45 today, USD/JPY has eased back to 134.85 this morning, as commodity prices fell. It is likely to be only a respite though unless US yields move sharply lower this week. USD/JPY has resistance at 135.60 with support distant at 132.20.   Swings in investor sentiment continue to generate all the two-way volatility in the Australian and New Zealand dollars. AUD/USD fell 1.60% on Friday to 0.6935 before rising to 0.6955 in Asia. NZD/USD fell 0.80% to 0.6315 on Friday before rising to 0.6330 in Asia. A US holiday is dampening volumes but both Australasians have traced out bottoming patterns on the charts. As long as 0.6850 and 0.6200 hold respectively, further gains to 0.7150 and 0.6450 cannot be ruled out.   On a 24-hour basis, Asian currencies are mostly unchanged today after the losses on Friday and were mostly unwound this morning. The main reason has been a rally by China’s CNY and CNH after the PBOC left both the 1 and 5-year LPRs unchanged. USD/CNY has fallen 0.60% to 6.6760, while USD/CNH has fallen by 0.50% to 6.6745, dragging USD/Asia lower. Although the KRW, INR, MYR, THB, and IDR look the most vulnerable and remain near last week’s lows, a US holiday today should mean range-trading continues into Wednesday. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US dollar remains firm but choppy - MarketPulseMarketPulse
Inflation Outlook: Energy Prices Drive Hospitality, Food Inflation Eases

Pound steady after rough week | Oanda

Kenny Fisher Kenny Fisher 20.06.2022 16:47
The British pound is slightly higher at the start of the week, and I expect a quiet session, with US markets closed for a holiday. British pound under pressure There was plenty of volatility from GBP/USD last week, as the currency started the week with gains, only to reverse directions and end the week in the red, the third losing week in a row. Perhaps the biggest red flag from the pound’s slide was the break below the symbolic 1.20 level last week, for the first time since 2020. The pound has been hammered in 2022, plunging as much as 1500 points. The BoE rate hike of 0.25% on Thursday failed to impress the markets, with GBP/USD sliding 1.37% in the Thursday session. Three of the nine MPC members voted for a 0.50% increase, and it appears that the 0.25% was too feeble a move by the BoE, even though the benchmark rate is now at its highest level since 2009. The markets have priced in a 60% chance of a 0.50% rise at the next meeting in August, and there will be strong pressure for the BoE to deliver a 0.50% salvo unless inflation unexpectedly begins to ease. The UK releases May CPI on Wednesday, with an estimate of 9.1%, up slightly from the April reading of 9.0%. The dark clouds hovering above the UK economy are not good news for the struggling pound. GDP fell by 0.3% in April after a 0.1% decline in March, the first back-to-back contractions since March 2020, at the start of the Covid pandemic. J.P. Morgan said on Friday that the likelihood of a recession in the UK has increased over the next year or two, warning that a recession in the US would spill over to the UK. . GBP/USD Technical GBP/USD has support at 1.2187 and 1.1969 There is resistance at 1.2441 and 1.2659   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound steady after rough week - MarketPulseMarketPulse
ECB's Knot: July Rate Hike Necessary, Beyond July Uncertain; Canadian CPI Supports Rates on Hold; Global Crypto Market at $1.2 Trillion; Oil Market Tightens with Russian Shipments Drop and China's Support Measures

FX: US Dollar To Japanese Yen - USDJPY short-term strategy | InstaForex

InstaForex Analysis InstaForex Analysis 20.06.2022 17:49
Relevance up to 15:00 2022-06-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Blue line -support Blue rectangle- target if support fails to hold USDJPY is trading around 134.93. Price is again near its 2022 highs. The chances of a major reversal and pull back towards 130 remain high. Today however we will focus on a short-term pull back that might be triggered soon. After a sharp rise from 131.47 towards 135.35, price is moving sideways over the last couple of days. Support is at 134.50. Failure to hold above this support will be a bearish signal. If the break down occurs, we should then expect USDJPY price to move towards the blue rectangle target area.   Read more: https://www.instaforex.eu/forex_analysis/280895
The EUR/AUD Pair May Have The Potential To Continue Its Decline

Ichimoku cloud indicator analysis on EURUSD for June 20th, 2022 | InstaForex

InstaForex Analysis InstaForex Analysis 20.06.2022 17:51
Relevance up to 15:00 2022-06-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   EURUSD is trading above 1.05. Even in the 4 hour chart price remains below the 4 hour Kumo (cloud). This indicates that trend remains bearish. Price is above the tenkan-sen (red line indicator) and the kijun-sen (yellow line indicator). This is supportive for the short-term. But bulls need to show more signs of strength and push price above the cloud. Support by the tenkan-sen is at 1.0495 and by the kijun-sen at 1.0480. Bulls need to defend these support levels. Failure to hold above these support levels will lead EURUSD back towards 1.03. Bulls are challenging the lower cloud boundary. They will need to break inside the cloud to change trend to neutral.   Read more: https://www.instaforex.eu/forex_analysis/280897
FX Daily: Testing the easing pushback

EUR/USD Technical Analysis and Trading Tips on June 20, 2022 | InstaForex

InstaForex Analysis InstaForex Analysis 20.06.2022 17:58
Relevance up to 12:00 2022-06-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   As of this writing, EUR/USD is trading near 1.0535, testing an important short-term resistance level at 1.0527 (200 EMA on the 1-hour chart). In case of its breakout, the upward correction may continue to the resistance level of 1.0616 (200 EMA on the 4-hour chart).     EUR/USD is in the zone of a long-term bearish market below the key resistance levels 1.0955 (144 EMA on the daily chart) and 1.1085 (200 EMA on the daily chart). Therefore, for now, its further corrective growth will most likely be limited by the resistance level of 1.0670 (50 EMA on the daily chart), and in the main scenario, there will be a rebound from the resistance level of 1.0527.     A breakdown of the local support level 1.0485 will return downside risks to 1.0300, and further towards parity with the euro against the dollar against the backdrop of a steady strengthening of the dollar and a deterioration in the prospects for the Eurozone. In an alternative scenario, the price will break through the resistance levels of 1.0527, 1.0616, and 1.0670 and grow to the local resistance levels of 1.0780, 1.0800, and 1.0810. Further movements will largely depend on the dynamics of the dollar and the actions of the Fed and the ECB regarding their monetary policies.     Support levels: 1.0500, 1.0485, 1.0400, 1.0355, 1.0300, 1.0200, 1.0100, 1.0000 Resistance levels: 1.0527, 1.0616, 1.0670, 1.0780, 1.0800, 1.0810, 1.0955, 1.1000, 1.1085 Trading Tips Sell Stop 1.0470. Stop-Loss 1.0565. Take-Profit 1.0400, 1.0355, 1.0300, 1.0200, 1.0100, 1.0000 Buy Stop 1.0565. Stop-Loss 1.0470. Take-Profit 1.0616, 1.0670, 1.0780, 1.0800, 1.0810, 1.0955, 1.1000, 1.1085   Read more: https://www.instaforex.eu/forex_analysis/313948
GBP: Softer Ahead of CPI Risk Event

FX: Euro To US Dollar: Technical Analysis of EUR/USD for June 21, 2022

InstaForex Analysis InstaForex Analysis 21.06.2022 10:15
Relevance up to 09:00 2022-06-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The EUR/USD bulls keep trying to continue the bounce, Currently, the market is consolidating the recent gains in a narrow zone located between the levels of 1.0489 - 1.0545 that looks like a Bullish Pennant pattern. The nearest technical support is seen at 1.0469 - 1.0448, so as long as the market trades above this zone, the outlook remains bullish. Please notice, that despite the recent efforts, the bulls are still trading inside the bearish zone, the level of 1.0615 is still unreachable for them, and they need to break above the level of 1.0678 to enter the bullish zone.     Weekly Pivot Points: WR3 - 1.0840 WR2 - 1.0724 WR1 - 1.0600 Weekly Pivot - 1.0479 WS1 - 1.0363 WS2 - 1.0238 WS3 - 1.0113 Trading Outlook: The up trend can be continued towards the next long-term target located at the level of 1.1186 only if the complex corrective structure will terminate soon (above 1.0335) and the market breaks above 1.0678 level. The bullish cycle scenario is confirmed by breakout above the level of 1.0726, otherwise the bears will push the price lower towards the next long-term target at the level of 1.0335 or below.   Read more: https://www.instaforex.eu/forex_analysis/281013
Inflation Outlook: Energy Prices Drive Hospitality, Food Inflation Eases

FX: What Is Cable? British Pound To US Dollar (GBPUSD). Technical Analysis of GBP/USD for June 21, 2022

InstaForex Analysis InstaForex Analysis 21.06.2022 10:20
Relevance up to 09:00 2022-06-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The GBP/USD pair has been seen steadily moving towards the technical resistance located at the level of 1.2468, just where the main channel lower line is located. The bulls are temporary in change of the market, the momentum is strong and positive, so after the pull-back to the nearest technical support is done, the price keeps bouncing up. The nearest technical support is seen at the level of 1.2281 and 1.2207. Nevertheless, the supply zone located between the levels of 1.2618 - 1.2697 is still the main obstacle for bulls that needs to be broken if the rally is expected to be continued.     Weekly Pivot Points: WR3 - 1.2922 WR2 - 1.2665 WR1 - 1.2442 Weekly Pivot - 1.2193 WS1 - 1.1971 WS2 - 1.1712 WS3 - 1.1494 Trading Outlook: The price broke below the level of 1.3000 quite long time ago, so the bears enforced and confirmed their control over the market in the long term. The Cable is way below 100 and 200 WMA , so the bearish domination is clear and there is no indication of trend termination or reversal. The bulls are now trying to start the corrective cycle after a big Pin Bar candlestick pattern was made last week. The next long term target for bears is seen at the level of 1.1989. Please remember: trend is your friend.   Read more: https://www.instaforex.eu/forex_analysis/281021
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

Trading plan for EUR/USD and GBP/USD on June 21, 2022

InstaForex Analysis InstaForex Analysis 21.06.2022 10:24
Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The problem of high inflation is becoming more acute, and along with it, fears are growing about the possible slide of the US economy into recession. And against this background, US President Joe Biden made a frightening statement. According to Biden, in order to curb inflation and avoid a recession, the unemployment rate must rise to 5.0% and remain there for five years. Now the unemployment rate is 3.6%. It turns out that in order to stabilize prices, it is necessary that millions of Americans remain unemployed, and therefore without means of livelihood, which will reduce aggregate consumer demand and, according to the law of supply and demand, will lead to lower prices. But even without taking this into account, talking about the need for an increase in unemployment does not add to optimism. After all, if the head of state declares such a thing, then the entire state machine will direct its efforts in this direction. And it is quite obvious that this will lead to a decrease in investment interest in relation not only to the American economy, but also to the dollar as such. So the dollar is likely to lose its positions today.     The EURUSD currency pair formed a flat within the limits of 1.0500/1.0545 during low activity. In this situation, the stagnation is of a short-term nature, thus the most optimal trading tactic is the method of breaking through one or another flat border.     The GBPUSD currency pair is in the stage of a pullback from the level of 1.2170, where, based on recent price fluctuations, there is a slowdown. Failure to hold the price above 1.2285 may lead to a reverse movement.   Read more: https://www.instaforex.eu/forex_analysis/314027
China: PMI positively surprises the market

FX: It's Time To Recover (CNY) Chinese Yuan! ING Forecasts - USD/CNY, USD/INR, USD/IDR

ING Economics ING Economics 21.06.2022 11:52
USD/CNY Lockdown remains the main risk Current spot: 6.7344 The Yuan weakened in May due to a two-month long lockdown in Shanghai. The announcement of an easing in movement restrictions has led to a moderate appreciation. We can't rule out further lockdowns. But we expect they will be more flexible and will not do as much damage to the economy. Consequently, future yuan weakness should be less dramatic. The recovery of economic activity is focussed on the rebound of retail sales in June. But as residents are still hesitant about cross-province travel due to uncertain travel restrictions, we believe the retail sales recovery in June could remain quite soft. USD/INR Protected by the RBI, but for how long? Current spot: 78.14 After its sharp depreciation at the beginning of May, the INR has been improbably stable during the second half of May and early June. The stability in the INR is consistent with the shift of the Reserve Bank to a more hawkish stance, and the first rate-hike this cycle. But it also looks as if there has been some considerable central bank action behind its stability. We don’t think this will last, and we don’t think the Reserve Bank of India is fundamentally opposed to depreciation, just “disorderly” depreciation, so we believe it will depreciate further. Even with the RBI hiking again, we believe the INR will resume its weakening in the near-term. USD/IDR IDR under pressure following palm oil export ban Current spot: 14680 • In early May, the IDR retreated sharply as the government’s palm oil export ban was expected to weigh on export earnings. A narrowing of the trade surplus could undermine a key support for the currency. • Bank Indonesia also (BI) kept policy rates untouched at their last meeting, citing “manageable” inflation. They did, however, announce a plan to hike reserve requirements to 9% by 3Q to mop up excess liquidity. • The IDR has since stabilized after the authorities allowed select companies to resume palm oil exports. But the currency will remain pressured as long as the partial ban remains in place. This article is a part of a report by ING Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
MSFT Stock Price Analysis: Bearish Signals Point to Potential Decline

Tempting FX Market: How AUD/USD, USD/JPY And EURUSD Are Doing? USD: US dollar steady after US holiday | Oanda

Jeffrey Halley Jeffrey Halley 21.06.2022 12:07
Currency markets trade sideways over the US holiday Not a lot has changed in currency markets overnight despite some decent intraday ranges. The US holiday and a slow news reel ensured that currency traders took the option of easing into the week, awaiting the US return this evening. The dollar index edged 0.16% to 104.48 overnight, easing another 0.14% to 104.34 in Asia. thanks mostly to a weak yen. The dollar index has support at 1.0350 with resistance now distant at 1.0570. EUR/USD rose just 0.17% to 1.0511 overnight, adding another 10 pips to 1.0525 in Asia. It has initial resistance at 1.0600, with challenging resistance at 1.0650. Support is at 1.0450 and 1.0400 now although I note that EUR/USD has based twice at 1.0350. That leaves the door open slightly to a corrective recovery this week. Sterling rose just 0.27% to 1.2248 overnight, edging 0.20% higher to 1.2270 in Asia. ​ GBP/USD has initial resistance at 1.2360 and 1.2400, with support at 1.2200 and then 1.1950. USD/JPY is holding steady at 135.00 today, almost unchanged for the past 24 hours. It is likely awaiting the reopening of the OTC US bond market this evening. It once again failed ahead of 135.45 overnight and the 135.45/60 region is shaping up as decent resistance now. ​ Unless US yields move higher again this week, the odds of a USD/JPY correction lower are rising. USD/JPY has support at 134.50 and then 132.20. AUD/USD and NZD/USD have booked modest gains to 0.6975 and 0.6345 over the last 24 hours, with trading volumes muted, but a tentative rise in sentiment proving supportive to both. A US holiday has dampened volumes but both Australasians have traced out bottoming patterns on the charts. As long as 0.6850 and 0.6200 hold respectively, further gains to 0.7150 and 0.6450 cannot be ruled out. Asian currencies are barely changed overnight as regional markets await the return of the US later today. Noises from officials in Seoul and Tokyo about currency speculation are probably limiting US dollar gains for now. Two notable exceptions are the Indonesian rupiah and Philippine peso, with weakened sharply by around 0.65% to USD 14,825.00 and USD 54.10 overnight. It is no coincidence that both have monetary policy meetings this week and both are reluctant rate hikers, as they prioritise the pandemic recovery. More selling pressure this week could force their hand on Thursday, but if both hold policy unchanged, could see more waves of selling into the end of the week. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US dollar steady after US holiday - MarketPulseMarketPulse
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

Analysis and trading tips for GBP/USD on June 21

InstaForex Analysis InstaForex Analysis 21.06.2022 13:14
Relevance up to 08:00 2022-06-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Analysis of transactions in the GBP / USD pair GBP/USD reaching 1.2220 prompted a sell signal in the market, however, having the MACD line far from zero limited the downside potential of the pair. Shortly after that, pound jerked up and hit 1.2265, forming a buy signal. At that time, the MACD line was far from zero, limiting the upside potential of the pair. When the pair tested the level again, the MACD line was in the overbought area, so the signal to sell triggered a decrease of around 30 pips. No other signal appeared for the rest of the day.     Although the lack of statistics helped pound, there was no upward correction in GBP/USD yesterday. But today there is every chance for further growth as the absence of statistics will play on the side of buyers, allowing them to push the pair above 1.2274. Furthermore, in the afternoon, US data may harm dollar as the US housing market has not been in the best shape lately due to higher interest rates. This, however, may be offset by the speech of Fed member Loretta Mester. For long positions: Buy pound when the quote reaches 1.2274 (green line on the chart) and take profit at the price of 1.2331 (thicker green line on the chart). There is a chance for a rally today, but only in the morning. Nevertheless, remember that when buying, the MACD line should be above zero, or is starting to rise from it. It is also possible to buy at 1.2231, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2274 and 1.2331. For short positions: Sell pound when the quote reaches 1.2231 (red line on the chart) and take profit at the price of 1.2178. Pressure will return if there are no active purchases above 1.2274. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2274, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2231 and 1.2178.     What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Read more: https://www.instaforex.eu/forex_analysis/314031
B2Broker's B2Core Now Integrated with cTrader Trading Platform

B2Broker's B2Core Now Integrated with cTrader Trading Platform

B2Brokers Group of Companies B2Brokers Group of Companies 21.06.2022 09:09
We are happy to announce that B2Broker's B2Core has been integrated with cTrader, the world's leading FX & CFD trading platform. This integration provides B2Broker clients and their customers with access to cTrader's advanced trading features and functionality, making it easier than ever to trade forex and CFDs. The B2Core client cabinet provides an added level of convenience and security for cTrader users. cTrader is a fast, reliable, and user-friendly trading platform that offers a wide range of features to traders worldwide. As with other platforms in the B2core ecosystem, the cTrader platform will work the same way. This means that brokers using the B2Core system can offer their users a seamless experience, with the ability to open and manage trading accounts (both demo and live) directly from the trader's room, accessing the platform quickly and easily. The B2Core team has developed an improved frontend for the cTrader platform. The new design is user-friendly and provides all of the tools that traders need to be successful. With the brand new frontend, trading on cTrader has never been easier. B2Core provides users who want to utilize cTrader with a number of features and benefits. In addition to demo and live accounts, traders can also take advantage of the various currencies, leverage options, account types, and other features. If you have lost the password to your cTrader account and are unable to restore it through the trading terminal, B2Core provides a solution. You can change your password directly through the trader's room, giving you an extra layer of security. The new password can be generated automatically or manually. Either way, this will give you peace of mind knowing that your account is safe and secure. The cTrader integration will soon offer several powerful new features, including support for fractional leverage volumes and hedging/netting account types. This will give users much greater flexibility in how they approach different instruments. Additionally, users will be able to archive their accounts and track key account metrics like Free Funds, Leverage, Free Margin, Balance, and Equity. Also, we are working hard on improving the B2Core panel to give users more control over their businesses. The new features we are developing will allow admins to customize their accounts even more. We believe that these improvements will help our users run their businesses more efficiently and effectively. "Staying aligned with our philosophy of being an open platform, we always welcome new integrations, and we are committed to bringing them to life," said Panagiotis Charalampous, Head of Community Management at Spotware - the company behind cTrader. "We are delighted that B2Core has successfully joined the flourishing ecosystem of cTrader integrations, and we look forward to offering this great new option to brokers and traders." "The new integration will fulfill the needs of multiple trading platforms availability and inevitably boost our user experience," added Daniel Skitev, Head of the Marketing Department at B2Broker. "We are constantly striving to push the boundaries of what is possible in order to provide our users with the best possible services in the Fintech industry," — Daniel concluded. B2Core's newest integration extends the number of trading platforms supported to seven, benefitting both clients and the B2Core itself. These platforms are cTrader, MT4, MT5, OneZero, B2Trader, PrimeXM, and DXtrade. Our goal is to support all existing trading platforms and expect to integrate with ActTrader soon. This will provide our clients with even more choice and flexibility when it comes to selecting a trading platform that best suits their needs. If you're looking for a powerful and user-friendly trading platform, cTrader is the way to go. And with B2Core's world-class customer service, you can be sure you're in good hands. So why wait? Get your cTrader account today and start enjoying all the benefits this integration has to offer!
ECB's Knot: July Rate Hike Necessary, Beyond July Uncertain; Canadian CPI Supports Rates on Hold; Global Crypto Market at $1.2 Trillion; Oil Market Tightens with Russian Shipments Drop and China's Support Measures

USDJPY bullish trend weakening according to the RSI

InstaForex Analysis InstaForex Analysis 21.06.2022 15:26
Relevance up to 15:00 2022-06-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Red lines- bearish divergence Blue line- resistance USDJPY is making new higher highs above 136. Trend remains bullish. Price has not broken below the key short-term support we warned yesterday. Price has respected support at 134.90 and is now moving higher. However the RSI is not following price. The RSI is providing us with bearish divergence signals. The bearish divergence is a sign of weakening bullish trend. The chances of a bigger reversal and pull back have increased. Bulls need to be cautious.   Read more: https://www.instaforex.eu/forex_analysis/281107
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Ichimoku cloud indicator analysis on EURUSD for June 21st, 2022

InstaForex Analysis InstaForex Analysis 21.06.2022 15:28
Relevance up to 15:00 2022-06-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   In the Daily chart EURUSD is challenging the lower cloud boundary and both the tenkan-sen (red line indicator) and the kijun-sen (yellow line indicator). Resistance is important at 1.0570. Traders need to be cautious in case we see a rejection at resistance. We have a confluence of resistance levels around 1.0570. So a break above this level could be big news for bulls. If this happen, then I will be expecting price to move even higher towards the upper cloud boundary at 1.0770.   Read more: https://www.instaforex.eu/forex_analysis/281109
Inflation Outlook: Energy Prices Drive Hospitality, Food Inflation Eases

FX Cable: Technical Analysis of GBP/USD for June 22, 2022 | InstaForex

InstaForex Analysis InstaForex Analysis 22.06.2022 08:55
Relevance up to 07:00 2022-06-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The GBP/USD pair has been seen steadily moving towards the technical resistance located at the level of 1.2468, just where the main channel lower line is located. The bulls managed to hit the level of 1.2323 and then the Bearish Engulfing candlestick pattern occurred and soon after that the price fell out of the acceleration channel. The nearest technical support is seen at the level of 1.2207 and 1.2165. Nevertheless, the supply zone located between the levels of 1.2618 - 1.2697 is still the main obstacle for bulls that needs to be broken if the rally is expected to be continued.     Weekly Pivot Points: WR3 - 1.2922 WR2 - 1.2665 WR1 - 1.2442 Weekly Pivot - 1.2193 WS1 - 1.1971 WS2 - 1.1712 WS3 - 1.1494 Trading Outlook: The price broke below the level of 1.3000 quite long time ago, so the bears enforced and confirmed their control over the market in the long term. The Cable is way below 100 and 200 WMA , so the bearish domination is clear and there is no indication of trend termination or reversal. The bulls are now trying to start the corrective cycle after a big Pin Bar candlestick pattern was made last week. The next long term target for bears is seen at the level of 1.1989. Please remember: trend is your friend.   Read more: https://www.instaforex.eu/forex_analysis/281201
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

Technical Analysis of EUR/USD for June 22, 2022

InstaForex Analysis InstaForex Analysis 22.06.2022 08:57
Relevance up to 07:00 2022-06-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The EUR/USD pair had broken out from a narrow zone located between the levels of 1.0489 - 1.0545 that looked like a Bullish Pennant pattern. Nevertheless, the rally was short-lived as it was capped at the level of 1.0582 after a Piercing Pattern was made. The nearest technical support is seen at 1.0469 - 1.0448, so as long as the market trades above this zone, the outlook remains bullish. Please notice, that despite the recent efforts, the bulls are still trading inside the bearish zone, the level of 1.0615 is still unreachable for them, and they need to break above the level of 1.0678 to enter the bullish zone.     Weekly Pivot Points: WR3 - 1.0840 WR2 - 1.0724 WR1 - 1.0600 Weekly Pivot - 1.0479 WS1 - 1.0363 WS2 - 1.0238 WS3 - 1.0113 Trading Outlook: The up trend can be continued towards the next long-term target located at the level of 1.1186 only if the complex corrective structure will terminate soon (above 1.0335) and the market breaks above 1.0678 level. The bullish cycle scenario is confirmed by breakout above the level of 1.0726, otherwise the bears will push the price lower towards the next long-term target at the level of 1.0335 or below.   Read more: https://www.instaforex.eu/forex_analysis/281203
ECB's Knot: July Rate Hike Necessary, Beyond July Uncertain; Canadian CPI Supports Rates on Hold; Global Crypto Market at $1.2 Trillion; Oil Market Tightens with Russian Shipments Drop and China's Support Measures

Will GBP/JPY Go Higher? CAD/CHF Resembles A Lake! FX: EUR/USD Looks Stable, How Will Today's Powell's (FED) Testimony Affect It?

Jing Ren Jing Ren 22.06.2022 09:21
EURUSD attempts to rebound The US dollar finds support from higher Treasury yields. The pair saw strong support near May’s lows (1.0380). A surge above 1.0500 prompted short-term sellers to cover and paved the way for a rebound. This is a sign of robust interest in keeping last month’s rally intact. 1.0660 is a former support that has turned into a resistance. Its breach would bring the single currency to the recent peak near 1.0770, which is the last hurdle before a meaningful recovery. On the downside, 1.0460 is a fresh support in case of a pullback. GBPJPY to test peak The Japanese yen weakens as the BoJ’s meeting minutes confirm its ultra-loose stand. The sell-off came to a halt at the psychological level of 160.00 where the pair first broke out in late May. The latest rally above 166.00 further trimmed the downward pressure. A break above 168.60 would put the rally back on track. The uptrend remains intact in the medium-term and the bulls may see pullbacks as an opportunity to jump in. 165.50 is the first support as buyers may wait for the RSI to drop back into the neutral area. CADCHF grinds demand zone The Canadian dollar recoups losses as April’s retail sales beat market expectations. The price action is hovering above the origin of a mid-April rally around 0.7400. A bullish RSI divergence indicates a slowdown in the liquidation momentum, and in conjunction with a demand zone, sellers could be taking some chips off the table. A rebound will need to clear 0.7580 before it could gain traction. Otherwise, a fall below 0.7400 may trigger a new round of sell-off towards 0.7300.
Analysis Of USD/CHF Pair: The Swiss Currency Pair Rebounds

Trading plan for USDCHF on June 22, 2022 | InstaForex

InstaForex Analysis InstaForex Analysis 22.06.2022 09:34
Relevance up to 07:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Technical outlook: USDCHF is inching higher through 0.968 as the Asian session progresses on Wednesday. The currency pair drifted in a tight trading range and tested the 0.6950-60 support zone on Tuesday. A push above the 0.9700 mark will accelerate further and push prices close to the 0.9800-0.9900 zone going forward. Potential triangle consolidation continues for now. USDCHF rallied from 0.8760 to 1.0064 carving a religious uptrend. The recent larger degree upswing is between 0.8930 and 1.0064 as marked on the daily chart. Prices have dropped through the Fibonacci 0.382 retracement level of the recent upswing and found interim support at around 0.9550 before oscillating within a potential triangle consolidation. USDCHF might continue within the above contracting triangle and produce another two waves around 0.9900 and 0.9600 in the next several trading sessions before breaking higher above 1.0064. On the flip side, if prices break below 0.9559 from here, bears might further drag the price towards 0.9400. Trading plan: Potential consolidation range continues as bulls are eyeing 0.9900 against 0.9550 in the near term. Good luck!   Read more: https://www.instaforex.eu/forex_analysis/281213
ECB's Dovish Shift: Markets Anticipate Softer Policy Guidance

Indicator analysis: Daily review of EUR/USD on June 22, 2022

InstaForex Analysis InstaForex Analysis 22.06.2022 10:17
Relevance up to 09:00 2022-06-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1). The euro-dollar pair may move downward from 1.0533 (close of yesterday's daily candle) to the target of 1.0479, the 50% retracement level (red dotted line). After testing this level, the price may move upward with the target of 1.0573, the 50% retracement level (yellow dotted line). Upon reaching this level, upward movement may continue.     Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – down; Volumes – down; Candlestick analysis – down; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today the price may move downward from 1.0533 (close of yesterday's daily candle) to the target of 1.0479, the 50% retracement level (red dotted line). After testing this level, the price may move upward with the target of 1.0573, the 50% retracement level (yellow dotted line). Upon reaching this level, upward movement may continue. Alternative scenario: from the level of 1.0533 (close of yesterday's daily candle), the price may move down with the target of 1.0479, the 50% retracement level (red dotted line). After testing this level, continued downward movement is possible to the historical support level 1.0464 (blue dotted line). Upon reaching this level, the price may move up.   Read more: https://www.instaforex.eu/forex_analysis/314165
FX Daily: Testing the easing pushback

Powell's report to the US Senate Banking Committee will drive the markets (expect EUR/USD and AUD/USD to decline) | InstaForex

InstaForex Analysis InstaForex Analysis 22.06.2022 13:45
Relevance up to 09:00 2022-06-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Markets await the report of Fed Chairman Jerome Powell to the US Senate Banking Committee as it would contain hints on the future of monetary policy. The US central bank already raised interest rates by 0.75% last week, the first time in decades. But Powell made it clear that rates might not rise further at such a pace, making markets relieved. Surprisingly, although there was another collapse last Thursday, many still hope that rates will rise by about 0.50%, then stop as inflationary pressure decreases. Powell may talk about this during his report to the Senate Banking Committee, in relation to high inflation and its impact on the economy. Powell may also mention the disruption of transport links, which has already led to a drop in imports and the like. But investors will be more interested on how exactly the Fed will act in July and beyond. There are two opinions on the market right now. The first has already been described above, which is a kind of soft option. But there is another, tougher one. According to Reuters, many market participants expect the Fed to increase the rate again by 0.75% in July, then raise it by 0.50% in September. Under these conditions, the market may again experience sharp sell-offs, while dollar and Treasury yields will see further growth. In this case, the ICE dollar index may again test the recent local high of 105.56. Which option will be implemented is difficult to determine as both have a high potential. This is why traders should wait for Powell's speech before making any move in the market.. Forecasts for today:     EUR/USD The pair has overcome 1.0500. A consolidation below may lead to its further decline to 1.0400.     AUD/USD The pair broke through 0.6900, which may lead to a further decrease to 0.6800. The driver will be the declining commodity prices and negative sentiment in the stock markets.   Read more: https://www.instaforex.eu/forex_analysis/314179
UK Budget: Short-term positives to be met with medium-term caution

FX: How Is GBP/USD Doing!? (GBP) British pound yawns as CPI matches estimate | Oanda

Kenny Fisher Kenny Fisher 22.06.2022 14:03
UK inflation nudged higher in May, as was expected. The headline release rose to 9.1% YoY, up slightly from the 9.0% gain in April. On a monthly basis, CPI nudged higher to 0.7%, up from 0.6% in April. UK inflation nudges higher The fact that UK inflation accelerated and an inflation peak remains elusive is not positive news. Still, the 9.1% reading matched the estimate and the market reaction has been muted. The ball is in the court of the Bank of England, but the trouble is that Bailey & Co. appear to have raised the white flag in response to the inflation onslaught. The BoE is projecting that inflation will peak above 11%(!) later in 2022, which is cold comfort for Britons who are grappling with a serious cost of living crisis. Inflation expectations are rising, and if these become unanchored, it will be a mammoth task for the government and the BoE to get expectations back into the box. There is a wave of discontent among workers and this week’s paralysing rail strike could be just the start of major labour unrest. Consumer confidence is understandably down, and if this translates into less consumer spending, the economic woes will only compound. With no US releases today, investors will be directing their full attention at what Fed Chair Powell has to say on Capitol Hill. The markets will be looking for clues on the direction of monetary policy and the tone of Powell’s testimony will be doubly important to jittery markets which are becoming more concerned about a recession by the day. Powell’s appearance could shake up the currency markets, which are having a quiet day. . GBP/USD Technical GBP/USD tested support at 1.2187 earlier in the day. Next, there is support at 1.1969  There is resistance at 1.2441 and 1.2659 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. British pound yawns as CPI matches estimate - MarketPulseMarketPulse
Inflation Outlook: Energy Prices Drive Hospitality, Food Inflation Eases

GBP/USD: Pound Remains Under Pressure After Inflation Report

InstaForex Analysis InstaForex Analysis 22.06.2022 15:58
Relevance up to 06:00 2022-06-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The pound-dollar pair is declining amid the release of data on inflation growth in the UK. The inflation report itself turned out to be very contradictory, but the downward momentum of GBP/USD is due to the general strengthening of the US currency. Demand for the dollar is growing ahead of the speech of Fed Chairman Jerome Powell in the US Congress. Powell will announce the semi-annual report and answer questions from congressmen. This is an important event that, as a rule, has a significant impact on the mood of the market. Moreover, at the moment there is a certain intrigue regarding Powell's rhetoric. According to some experts, he will admit the probability of a 75-point rate hike not only at the July meeting, but will not rule out such a scenario in the context of the September meeting.     But back to British inflation. Today's release really turned out to be controversial—the published figures can be interpreted both in favor of the pound and against it. On the one hand, the overall consumer price index rose again year-on-year, this time to 9.1%. The indicator has been showing consistent growth over the past 8 months. A similar dynamic was demonstrated by another indicator—the producer price index, which growth may be an early indication of increased inflationary pressure. Growth of up to 2.1% (in monthly terms) was recorded, with a growth forecast of up to 1.9%. In annual terms, the indicator also came out in the "green zone," rising to 22.1%. The producer price index added to the positive picture, also being above the forecast values. On the other hand, core inflation disappointed. And this factor, by and large, leveled the achievements of the other components of the release. The core consumer price index has shown positive dynamics over the past 7 months, but in May it still slowed down its growth, contrary to the opposite forecasts of most analysts. The indicator came out at around 5.9% with a forecast of growth to 6.0%. In the previous month, the indicator peaked at 6.2%. After the publication of the inflation report, the market was again cautiously talking about the fact that the Bank of England might revise its policy regarding the pace of interest rate hikes. To be more precise, the regulator can maintain the pace that was indicated at the end of the June meeting. Note that significant disagreements arose at the June meeting of the Central Bank's Monetary Policy Committee. Three members of the BoE—Michael Saunders, Catherine Mann, and Jonathan Haskel - voted to raise the rate by 50 basis points. But they remained in the minority, as the other six of their Committee colleagues insisted on a 25-point increase. If the pace of core inflation slows further, the 50-point boosters will remain in the minority (if not reconsidered at all).         This factor did not allow GBP/USD buyers to develop corrective growth: the mark of 1.2300 (Kijun-sen line on the daily chart) remained unconquered. Traders have been trying to overcome this target for the past two days, but in vain. Moreover, today the bears of the pair once again seized the initiative and tested the area of the 21st figure. In general, if we disregard intraday price fluctuations, we can conclude that the GBP/USD pair is stuck in flat ahead of Powell's speech in Congress. Last week, the pound fell to 1.1933, after which GBP/USD sellers took profits and provoked an upward pullback. The upward corrective trend also quickly choked—as mentioned above, buyers were unable to conquer the area of the 23rd figure. As a result, the price got stuck in the range of 1.2160–1.2290, waiting for the next information impulse. It is obvious that Powell will set the tone for trading today. It is likely that he will voice a hawkish position, declaring the need to tighten monetary policy at an aggressive pace. Yesterday, Richmond Fed President Thomas Barkin made it clear that many members of the Fed support the idea of a 75-point rate hike following the results of the July meeting. Note that earlier Powell announced that in July the Fed would increase the rate by either 50 or 75 basis points. It is likely that today the head of the Fed will make it clear to congressmen that the regulator is ready to raise the rate by 75-point steps, not only in July but also in September. Such a message will significantly strengthen the position of the US currency, including in pair with the pound. Thus, in my opinion, before Powell's speech, the GBP/USD pair will be trading in the range of 1.2160–1.2290. Further prospects will depend on the rhetoric of the head of the Fed: if he supports the greenback, the pair may go to the base of the 21st figure. Otherwise, buyers will overcome the resistance level of 1.2300 (Kijun-sen line on D1) and try to approach the next price barrier 1.2380 (middle Bollinger Bands line on the same timeframe).   Read more: https://www.instaforex.eu/forex_analysis/314199
FX: Can USD/JPY Hit 150!? How Weak Will Japanese Yen (JPY) Get? US Dollar (USD) - Where Is The Limit? | FxPro

FX: Can USD/JPY Hit 150!? How Weak Will Japanese Yen (JPY) Get? US Dollar (USD) - Where Is The Limit? | FxPro

Alex Kuptsikevich Alex Kuptsikevich 22.06.2022 15:15
The Japanese yen leads in losses against the dollar amongst the G10 currencies. And so far, there are indications that the USDJPY’s rising trend will only be interrupted by technical corrections in the coming weeks or months. The main fundamental driver for the USDJPY is the substantial divergence in the US and Japanese monetary policy. The former has raised its key rate by 150 points in the last three meetings and started selling assets off the Fed balance sheet. The latter has maintained its crisis rhetoric, promising to continue with QE and increasing bond purchases to keep 10-year yields close to 0.25%. The currency market is not only wagering on the present but is actively putting expectations into prices. From this perspective, the USDJPY exchange rate results from an overlay of the key rate expectations, which are best reflected in 2-year bond yields. The spread started rising steadily in early 2021, at the same time as USDJPY began to rise. The spread between the US and Japanese 2-year yields exceeded 3% this month, reaching 3.5%, the highest since 2007, although it was only 0.25% at the beginning of last year. Approaching a spread of 3% has not stopped the Fed from tightening, nor the Japanese rhetoric, so it makes sense to tune in to a return to pre-World Financial Crisis norms, i.e., above 4.3% versus 3.2% now, leaving the potential for around a third of the movement that already passed. If these correlations between the USDJPY and USDJPY 2-year yield spreads remain in place, we could see the USDJPY continue to rise to 150 yen, last seen in 1990 and twice as high as the historic lows of 2011. Suppose the Japanese monetary authorities and the Ministry of Finance manage to steer the yen through such a devaluation, preserving confidence in the financial system. In that case, this could revive the economy by raising export competitiveness, potentially returning the Land of the Rising Sun to export-oriented status.
The EUR/AUD Pair May Have The Potential To Continue Its Decline

Technical analysis of EUR/USD for June 23, 2022

InstaForex Analysis InstaForex Analysis 23.06.2022 12:03
Relevance up to 11:00 2022-06-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Overview : The EUR/USD pair has broken support at the level of 1.0567 which acts as a resistance now. According to the previous events, the EUR/USD pair is still moving between the levels of 1.0567 and 1.0360. Therefore, we expect a range of 207 pips in coming two days or three. The trend is still below the 100 EMA for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. Hence, the price spot of 1.0567 remains a significant resistance zone. Consequently, there is a possibility that the EUR/USD pair will move downside. The structure of a fall does not look corrective. In order to indicate a bearish opportunity below 1.0567, sell below 1.0567 with the first target at 1.0458. Besides, the weekly support 2 is seen at the level of 1.0360. If the pair fails to pass through the level of 1.0458, the market will indicate a bearish opportunity below the level of 1.0458 . So, the market will decline further to 0.6604 in order to return to the daily bottom point (1.0360 - S2). However, traders should watch for any sign of a bullish rejection that occurs around 1.0616. The level of 1.0616 coincides with 61.8% of Fibonacci, which is expected to act as a major resistance today. Since the trend is below the 61.8% Fibonacci level, the market is still in a downtrend. Overall, we still prefer the bearish scenario.   Read more: https://www.instaforex.eu/forex_analysis/281501
Financial World in a Turbulent Dance: Lego, Gold, and Market Mysteries

FX Update: Commodities to lead bonds to lead JPY?

Saxo Bank Saxo Bank 23.06.2022 13:21
Summary:  Commodity markets are commanding the most attention across markets and may be dragging bond yields down on the implications for easing inflation. In turn, then, shouldn’t JPY find a bit more support, as it did today when EU core bond yields cratered on weak flash June PMIs? Also, today the Norges Bank surprised many with a 50 basis point hike, although the NOK price action in the wake of the decision is underwhelming. FX Trading focus: Fresh pressure on JPY as BoJ losing control. USD triangulating. The JPY jumped overnight in the wake of comments by a prominent ex-Ministry of Finance official suggesting that intervention from the MoF can’t be ruled out, though he indicated the bar is high for intervention as it generally requires a sense of crisis. This price action came after the USDJPY rate managed to peak out at 136.70 on Tuesday despite softer US treasury yields this week, yields that are breaking down further today, as the 10-year benchmark US Treasury yield looks like it is in reversal mode, though a more profound sense of reversal would require a drop through 3.00% (trading near 3.10% as of this writing). Today, the weaker than expected flash June PMIs in Europe (France: 51.0 Manufacturing and 54.4 Services vs. 54.0/57.5 expected and 54.6/58.3 previous and Germany 52.0 Manufacturing and 52.4 Services vs. 54.0/54.5 expected and 54.8/55.0 previous, and Eurozone at 52.0 Manufacturing, 52.8 Services and 51.9 Composite) have brought EU core yields tumbling aggressively and taken EURJPY down several notches, a deserved re-alignment with the fundamentals. With or without intervention jawboning from Japan (and this is from an ex-official with no contact to the MoF personnel actually in charge), shouldn’t BoJ YCC policy per se should only pressure the JPY as a function of rising global yields, and when these head lower, the pressure should come off the JPY, after all? A massive sell-off in crude oil, even if a big chunk of the fall was retraced since late yesterday, is also a nominal JPY positive. Longer bond yields are likely in part reinforced by weak commodity prices as the latter are seen at the forward edge of the inflation drivers. And then the question becomes – if inflation pressures are seen as receding, will risk sentiment eventually celebrate that development or fret the reasons that price pressures are abating: on fears of recession? The easiest read is that commodity-related FX should struggle as long as the narrative is that commodity prices are retreating due to recession-induced demand destruction. On that note – watching the 1.3000 area in USDCAD and the cycle lows in AUDUSD near 0.6830. Chart: EURUSDEURUSD is weighing back on the 1.0500 area that has been the approximate mid-point of the range since 1.0600 fell about two weeks ago after weaker than expected flash June PMI survey figures out of the EU this morning. Interesting as well that EURUSD is breaking down as the key US 10-year treasury benchmark it breaking down through local support, but that is likely on core European yields beating an even more severe retreat on the soft data this morning. The EURUSD sell-off here likely to correlate with general risk sentiment and is showing signs getting any real downside momentum until we are closer to threatening the 1.0400 area, with the latest price action emphasizing the tactical importance of the 1.0600+ resistance. Source: Saxo Group Norges Bank hiked the deposit rate 50 basis points, a nominal surprise as observers were split on whether they would hike 25 bps again or 50 bps. I imagine USDNOK trading near 10.00 and EURNOK trading near the 10.50 area weighed in the decision to go with the bigger hike, as a weak currency is doing the Norges Bank’s inflation fighting intentions no favors. Governor Wolden did note that the krone has been weaker than expected. Interesting in the Norges Bank forward economic projections that the bank is far more concerned about persistent inflation than the ECB and Fed are, as the 2023 “underlying” CPI forecast was raised to 3.3% from 2.4% and the 2024 forecast was raised to 3.0% from 2.5%. GDP forecasts were lowered and the path of the policy rate was steepened and raised: in March, the Norges Bank forecast the policy rate to 2.5% at the end of 2023, and today’s statement sees the rate at “around 3.0% in the period to summer 2023. The NOK pulled off support, but the price action was not overwhelming, likely on the massive turmoil in the oil market. Table: FX Board of G10 and CNH trend evolution and strength.While the CHF posts the strongest trend reading, nothing has happened in the key EURCHF And USDCHF pairs since the shock SNB move to hike 50 bps last week. Watching the commodity currencies, AUD in particular, for more downside risk if the recent commodity corrections deepen – and as a flip-side of that, whether the JPY could start flipping positive in places as well. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Lots of odd crosses criss-crossing trends – chief focus on JPY pairs like AUDJPY and CADJPY if commodity correction continues, and on whether the USD rally is set to extend. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1100 – Turkey Rate Announcement 1230 – US Weekly Initial Jobless Claims 1345 – US Jun. Flash Services and Manufacturing PMI 1400 – US Fed Chair Powell to testify before House Panel 1800 – Mexico Rate Announcement 1800 – ECB's Villeroy to speak 2301 – UK Jun. GfK Consumer Confidence 2330 – Japan May National CPI Source: FX Update: Commodities to lead bonds to lead JPY? | Saxo Group (home.saxo)
Declines At The Close Of The New York Stock Exchange, The Drop Leaders Were Nike Inc Shares

FX: GBP To USD | Negative statistics from Europe and the US will worsen the situation (expect GBP/USD to decline)

InstaForex Analysis InstaForex Analysis 23.06.2022 13:30
Relevance up to 09:00 2022-06-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Although the report of Fed Chairman Jerome Powell to the US Senate Banking Committee did not have a negative impact on the markets, it did not contribute to growth either. This is because his statements confirmed the course of the bank, that is, to continue aggressively raising interest rates at least in the coming months. Since this was already announced at the end of the Fed meeting last week, markets did not show much reaction. Now, all attention is focused on the upcoming business activity reports from Germany, Europe, the UK, and the US, as those will give investors an idea of whether a recession has begun. Authorities have denied this in every possible way, trying to weaken its influence on financial markets. However, inexorably growing inflation and the need to raise interest rates will definitely push the economies of Europe and the US into a long-term crisis. In short, if the figures show growth, stock markets will soar, which, in turn, will put pressure on dollar and Treasury yields. Risk appetite will also return. But if data is worse than expected, the mood in the markets will change, causing a decrease in the stock markets and, as a result, will increase dollar demand and raise Treasury yields. Forecast for today:     GBP/USDAlthough the pair is currently trading above 1.2220, negative statistics from the UK will bring it down to 1.2160.   Read more: https://www.instaforex.eu/forex_analysis/314305
Top 10 Stocks to Watch: August 2023 - BY: RYAN SULLIVAN

FX: Euro To US Dollar - Trading tips for EUR/USD

InstaForex Analysis InstaForex Analysis 23.06.2022 13:32
Relevance up to 10:00 2022-06-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Active growth was noted in EUR/USD during the European trading session. However, the pair fell and closed lower during the US trading session, showing the strength of dollar in the market. The bearish trend has not changed since June 17.     In this situation, the best action is to abandon long positions, focusing on short positions with targets at yearly lows. And given that there is a three-wave pattern (ABC), where wave A represents the selling pressure last week, traders can sell up to the 50% retracement level, with stop loss at 1.07. Take profit on the breakdown of 1.03300. This strategy is based on the Price Action and Stop Hunting methods. Good luck and have a nice day!   Read more: https://www.instaforex.eu/forex_analysis/314323
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Euro slips on weak PMIs EUR/USD May Be Surprising! | Oanda

Kenny Fisher Kenny Fisher 23.06.2022 13:40
The euro is in negative territory on Thursday and has pared most of this week’s gains. EUR/USD is trading just above the 1.05 line in the European session, down 0.58% on the day. German, eurozone PMIs soften Today’s German and eurozone PMIs indicated slower activity in May, which reflects weaker economic activity. Manufacturing and Services PMIs in both Germany and the eurozone weakened, although they still pointed to expansion, with readings above the neutral 50.0 level. Nevertheless, the releases are a cause for concern. As the largest economy in the eurozone, Germany is a bellwether for the bloc. With the outlook for the German economy looking gloomier, it’s a bad sign for the rest of the eurozone. The German economy has been hit by a fall in exports, and high inflation and economic uncertainty have hurt domestic demand. Businesses are more pessimistic about the economic outlook, pointing to the war in Ukraine, supply disruptions in China and higher prices. The latest setback is that Russia is decreasing its supply of natural gas to Germany, raising fears that Germany may run short of natural gas in the winter. This has prompted German to enter Phase 2 of its three-stage emergency gas plan. The euro has taken a tumble and EUR/USD is down over 550 points since April 1st. The slow response of the ECB to spiralling inflation hasn’t helped, as the ECB is yet to embark on a rate-tightening cycle, while the Fed has been raising rates and delivered a mammoth 75-bps hike last week. This has widened the US/Europe rate differential and sent the euro lower. Unless US yields fall, the euro is likely to continue losing ground. . EUR/USD Technical EUR/USD has initial resistance at 1.0612, followed by resistance at 1.0727 EUR/USD tested support at 1.0485 in the Asian session. Below, there is support at 1.0370   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
SEK: Riksbank's Impact on the Krona

Johnson's Ability to Lead Tories into Victory at Risk with Today's By-Elections

Marc Chandler Marc Chandler 23.06.2022 15:51
June 23, 2022  $USD, Currency Movement, Fed, Intervention, Mexico, Norges Bank, PMI, Sweden Overview: Asia Pacific equities were mixed. Gains were recorded in China, Hong Kong, Australia, and India, among the large markets, while Japan was mostly flat and South Korea and Taiwan shares fell. Europe's Stoxx 600 is off about 0.7%, the same as yesterday. US futures are slightly firmer. The rally in bonds continues. After falling nearly a dozen basis points yesterday, the US 10-year yield is off another 5 bp today around 3.10% it is near two-and-a-half week lows. European yields are down 14-19 bp. The 10-year Italian yield that had poked above 4% earlier this month is now near 3.40%. It is the sixth session in the past seven that yields have fallen. The dollar is trading with a firmer bias except against the yen, where the threat of verbal intervention and falling US rates helps the yen recovery. Despite Norway's larger than expected 50 bp move, the krone and the Swedish krona are the weakest of the G10 currencies. Emerging market currencies are mostly lower, led by central Europe. Gold is consolidating in a narrow range around $1835. August WTI fell over 3% yesterday and today it is pinned in the lower end of yesterday’s range but looks poised to recover more in North America. US natgas is off 2%, but the shock in Europe continues. Its benchmark is up for the ninth consecutive session and today’s 7.5% surge is the most since the middle of last week. The Singapore iron ore futures we track, jumped nearly 8% today, the most in three months. However, copper is not getting such a reprieve. It is off 2% after a similar decline yesterday. September wheat is also down about 2% today and is at its lowest level since March.  Asia Pacific Japan's composite PMI rose for the fourth consecutive month, and at 53.2 it stands just below the cyclical high set last November. It contrasts with most others who have reported a decline in the June flash PMI composite. However, that is arguably not the most important development today as Japan's recovery has already been in tow. Instead, there are two other developments to note. First, last week, when the BOJ bought around $80 bln of bonds, foreign investors sold a record amount (~$35.5 bln) and liquidated almost JPY945 bln Japanese equities. Second, into the fray waded former Ministry of Finance head of fx, Nikao, who raised the specter of unilateral intervention. This threat marks another step-up the intervention escalation ladder. Just because he says it is so, does not make is so, and we hasten to point out that the sometimes failed intervention is worse than no intervention. In an intervention operation, Japan would be isolated, and the action would not signal a change in monetary policy. Australia's preliminary manufacturing PMI ticked up to 55.8 from 55.7 but was not sufficient to offset the erosion of the service PMI to 52.6 from 53.2. The composite slipped to 52.6 from 52.9. It was the first back-to-back decline since July and August (which was part of a four-month fall). It is the lowest since January. The market is gradually moving away pricing in a 50 bp hike on July 5. The futures market has a 39 bp increase discounted, down from 56 bp in the middle of last week. Central bank Governor Lowe pushed against a 75 bp hike. It is near a two-week low today. A combination of lower US yields and the threat of unilateral intervention has knocked the greenback down against the yen for a second session. It set a high yesterday near JPY136.70 and has been sold to around JPY135.25 today. A break of JPY135 would likely spur a test on the week's low set Monday near JPY134.55. The Australian dollar is also pushing lower for the second consecutive session. It is near a six-day low by $0.6865. Last week's low was closer to $0.6850, and last month's low was near $0.6830. The Aussie appears to be trying to stabilize in the European morning. The Chinese yuan is trading in a narrow range today, roughly CNY6.70 to CNY6.7150, and remains within yesterday's range. The PBOC set the dollar's reference rate at CNY6.7079, a little lower than the median projection of CNY6.7084 from the Bloomberg survey. Separately, note that the Philippine central bank hiked by 25 bp as expected (to 2.50%), while Indonesia stood pat at 3.50%. Europe The preliminary PMI in the eurozone was weaker than expected. The manufacturing PMI ticked down to 52.0 from 54.6. The German reading fell to 52.0 from 54.8 and the French reading fell to 51 from 54.6. The aggregate service PMI dropped to 52.8 from 56.1. Germany's stands at 52.4, off from 55.0. France's is at 54.4, down from 58.3. The composite reading for the region stands at 51.9 compared with 54.8 in May. Germany's composite fell for the fourth consecutive month and stands at 51.3 (from 53.3). France's composite fell for the second consecutive month to 52.8 from 57.0. By the time the ECB meets in September, where a 50 bp move may be on the table, is it unreasonable to suspect the PMI will be below the 50 boom/bust level?  The UK flash PMI was mixed. The manufacturing PMI fell to 53.4 from 54.6. However, the services PMI was steady at 53.4. The market had looked for a small decline. The result was that the composite was also unchanged at 53.1. Meanwhile, two byelections are being held today and polls warn that the Tories could lose both. If so, the results will further tarnish the Prime Minister, whose ability to lead the Tories into victory in the next election will be questioned. Norway surprised many with a 50 bp hike today. The majority of those surveyed by Reuters and Bloomberg anticipated a quarter-point move, which the central bank had previously indicated. The deposit rate stands at 1.25% now and Norges Bank said a 25 bp hike in August was likely. It now sees the key rate at 3% in the middle of next year, up from 2.50% it had previously projected for the end of 2023. It cut its GDP forecast and raised its inflation forecast. The focus turns to Sweden's Riksbank that meets next week. It has only hiked rates once and at 0.25% it seems out of line with the 7.3% headline inflation and the 5.4% pace of the underlying rate excluding energy. The euro is trading heavily but within yesterday's broad range (~$1.0470-$1.0605). There are options for 1.8 bln euros at $1.05 and around 1.4 bln euros at $1.0455. After trading up to $1.0580 in Asia and early Europe, the single currency sold off after the PMI report. It stabilized but is now likely to find the $1.0540 area as the nearby cap. The price action also underscores the more formidable cap at $1.06. Sterling is also trading lower and is within yesterday's range (~$1.2160-$1.2315). But this does not do justice to the large consolidation. For the fifth session, sterling remains within last Thursday's range (~$1.2040-$1.2405). Immediate resistance is seen in the $1.2240-$1.2260 area in North America. America Some argue that in his testimony before Congress, Powell represents the Federal Reserve not just his opinion. Fair enough, but surely at the press conference after the FOMC meeting he is explaining what the FOMC decided and talks about its median projection. Maybe it is too fine of a distinction, but in any event, Powell's remarks in an answer to the Senator's questions seemed somewhat more dovish and more cognizant that the effects of the tighter financial conditions are beginning to have the desired impact. The Fed Chair seemed to play down supply chain bottlenecks and sharpened his focus on demand, which lends support to some political arguments that the American Rescue Act is responsible for the inflation. At the press conference following the FOMC meeting, Powell seemed to acknowledge that among large countries, the US inflation was in the middle of the pack, and that fiscal stimulus could not explain the relatively modest inflation differentials. Yet, what may be more relevant for the foreign exchange market was Powell's answer to a question from Senator Warren. Powell explained that the Fed's goal of weakening demand is being pursued over three channels. The first is reducing the demand for interest-rate sensitive spending. Housing, autos, and other durable goods come to mind. The Fed wants to see a weaker sale. The second weakening asset prices to curb the wealth effect and reduce the wherewithal to spend. This means weaker stocks (so much for the Fed put), higher interest rates, and lower house prices. It was the third channel that is arguable most notable, a strengthening dollar. He recognized that the changes in the exchange rate influenced import and export prices. By suggesting that the strong dollar was part of the fight against inflation Powell seemed to reduce the likelihood, which was not particularly high in the first place of intervention to check the dollar's rise. To say it somewhat differently, US participation or support of intervention to weaken the dollar is unlikely as long as the Fed is tightening financial conditions. It also means that the strong dollar policy is alive and well. That makes a good segue into today's release of the US Q1 current account balance. It is going to a blowout deficit. The median forecast in Bloomberg's survey is for a whopping $275 bln deficit. Last year it averaged $205.4 bln a quarter. In 2018, the current account deficit averaged slightly less than $110 bln a quarter and in 2019, the average was about $118 bln. As we have noted before, according to the OECD's purchasing power parity model, the euro, yen, and sterling are most under-valued in at least 30 years. Few talk about the current account deficit that is approaching 4% of GDP. When the dollar is strong, the narrative is about interest rate and/or growth differentials. When the dollar falls the twin deficits are often part of the narrative. We imagine the dollar's bottom will be a process that takes some time to form and that the markets will anticipate the peak in inflation and rate. Interest rate differentials often turn before the dollar. If the key to the Fed's decision to hike by 75 bp instead of 50 bp was based on the CPI and preliminary University of Michigan's June consumer inflation expectations, then the significance of other high frequency data points is somewhat less important. That includes today's preliminary PMI, where the composite is expected to have fallen for the third consecutive month. The decline will likely put it at its lowest level since January, which itself was the lowest since July 2020.   Canada's strong jobs report earlier this month and strong retail sales and firmer than expected inflation have not helped the Canadian dollar very much. Its sensitivity to the general risk environment has weighed on it, and although rising oil price did not seem to help it either, some are attributing the heaviness now to the drop in crude prices. The swaps market has a 75 bp hike early next month nearly fully discounted. The US dollar is chopping between CAD1.29 and CAD1.30. It had reached almost CAD1.3080 last week. While some observers point to a double top in place, the problem is that it will not be confirmed until CAD1.25 goes. Meanwhile, it is a big day for Mexico. The biweekly CPI through mid-June followed by April retail sales will be released today. But the big event is Banxico's meeting, and regardless of today's data, a 75 bp hike is expected. The central bank may also signal its intent for a similar move when it meets next on August 11. The US dollar fell to a seven-day low near MXN20.00 yesterday. It has recovered to almost MXN20.1425 today. Yesterday's high was near MXN20.25. A break of MXN20.00 could spur losses toward MXN19.90.    Disclaimer
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

Japanese yen eyes inflation report | Oanda

Kenny Fisher Kenny Fisher 23.06.2022 15:15
The Japanese yen is in positive territory today, extending its gains from yesterday. USD/JPY is trading at 135.46 in the European session, down 0.56% on the day. Yen rises as US yields dip The yen has gained a bit of strength as USD/JPY is back below 136.00, after rising close to 136.71 earlier in the week, its highest level since September 1998. The yen received a reprieve from its recent slide due to a drop yesterday in US Treasury yields, rather than any newfound strength related to the yen. This is another indication that USD/JPY movement is at the mercy of the US/Japan rate differential, with the Bank of Japan holding firm on its yield cap for JGBs. The BoJ is not showing any signs of adjusting its ultra-accommodative policy, leaving the yen to bear the brunt of this inflexible stance. As a result, the yen has been pummelled by the US dollar, with the yen plunging some 17% in 2022. The BoJ and Japan’s Ministry of Finance have jawboned about the exchange rate, noting their concern. The verbal intervention has clearly not worked, raising the question as to whether Tokyo has a ‘line in the sand’, which if crossed, would trigger intervention in the currency markets to support the ailing yen. There had been speculation that a move above 125.00 or 130.00 could result in a response, but that failed to happen. Currently, there are voices stating that the 140 level is that line in the sand. BoJ Governor Kuroda has insisted that the Bank needs to support Japan’s fragile economy with monetary easing, and has said that the exchange rate is not a policy target. Kuroda has even said that a weak yen has benefits for the economy, such as making exports more attractive. Given this stance, I question whether a 140.00 yen will trigger currency intervention. True, the yen is at 24-year highs, but let’s not forget that USD/JPY has been above 200.00 and even 300.00 in the past, and the BoJ has indicated that the exchange rate is not a priority. . USD/JPY Technical There is resistance at 1.3657 and 1.3814 USD/JPY has support at 1.3404 and 1.3247 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen eyes inflation report - MarketPulseMarketPulse
Unlocking the Future: Key UK Wage Data and September BoE Rate Hike Prospects

FX Daily: Outlining the paths for EUR/USD

ING Economics ING Economics 24.06.2022 11:53
Yesterday's PMIs triggered a "sell Europe" dynamic, and demonstrated how growth differentials are becoming an increasingly important driver for the FX market. Such differentials are one of the inputs of our EUR/USD scenario analysis for 2022-23, where we outline different paths ranging from 0.85 to 1.30. Today, central bank speakers will be in focus USD: Fed rhetoric remains hawkish The release of June’s PMIs yesterday generated some diverging dynamics in the G10 space. A widespread increase in recession fears continues to fuel a recovery in the bond market and by extension in the safe-haven yen, while pro-cyclical European currencies trended lower on the back of grim surveys out of the eurozone. PMIs dropped significantly also in the US, but the dollar is not usually highly sensitive to the release and a generalised “sell Europe” market attitude triggered some defensive inflows into the dollar. Incidentally, we continued to hear a rather hawkish tone from Fed speakers. Michelle Bowman fully backed a 75bp increase in July and suggested multiple 50bp increases should be delivered after that one. Fed Chair Jerome Powell toned down the recession discussion, sounding more upbeat on the economic outlook yesterday compared to Wednesday’s Senate testimony. Today, the Fedspeak calendar includes James Bullard’s speech on central banks and inflation and an interview with Mary Daly. Signs of building consensus around a 75bp rate hike within the FOMC should help consolidate the market’s expectations for a Fed rate around 3.25%-3.50% at the turn of the year. All this should continue to provide a rather supportive undercurrent to the dollar, and we see limited downside risks for the greenback over the near term. EUR: Growth factor becomes more relevant A larger drop than expected in eurozone’s PMIs yesterday triggered a quintessential flight-to-safety in European assets, as eurozone equities underperformed their US counterparts, bond yields dropped sharply and both the euro and the Scandies came under pressure. A set of decent PMIs before the June reading had allowed markets to maintain a relatively complacent approach to the eurozone growth story. Now, some re-alignment with the reality of a quite clouded economic outlook and persistent external woes has begun, and we cannot exclude that this continues to add some pressure today, where all the focus will be on another important survey – the German Ifo. Without doubt, the US-EZ growth differential story is becoming increasingly relevant for EUR/USD. In the scenario analysis we released yesterday, we identify this differential as one of the four major drivers of EUR/USD for the next 18 months, along with developments in the Russia-Ukraine conflict, China’s economic outlook, and the ECB-Fed policy outlook. We think that assumptions on these drivers can help outline different scenario paths for EUR/USD that vary between the bottom (0.85) to the top (1.30) of the FX option-derived range for the pair at the end of 2023. Our baseline scenario remains unchanged for now: EUR/USD to oscillate around the 1.05 mark until the end of 3Q22 as the Fed presses on with aggressive tightening, rising modestly to the 1.08 area in 4Q22 as US rates peak, staying on a moderate upward path in 2023 as the Fed turns from tightening to easing, and the EZ exits stagflation early in the year, finally reaching the 1.15 area by year-end. More details about the different scenarios and our calculation methods are included in the article. Back to today’s price actions, we suspect that the balance of risks remains skewed to the downside for EUR/USD on the back of deteriorating eurozone growth sentiment, and the pair may re-test the 1.0500 level before markets close for the weekend. Also, keep an eye on some relatively dovish ECB speakers: Mario Centeno, Pablo Hernandez de Cos and Luis de Guindos. GBP: A couple of BoE speakers to watch The UK June PMIs surprised on the upside staying flat compared to a month before, with the release gaining more importance given the sharp contrast with the eurozone and US figures. That is surely not enough to trigger a sizeable re-pricing higher in the UK’s growth expectations (retail sales this morning sent fresh warning signals), but may at least allow markets to feel more at ease with their aggressive Bank of England tightening expectations (seven hikes priced in by year-end), offering some support to GBP. All eyes today will be on speeches by the BoE Chief Economist Huw Pill, and from Jonathan Haskel, one of the three MPC members who voted for a 50bp hike last week. GBP/USD may stay in the 1.22-1.23 range for now, while EUR/GBP may keep inching lower towards the lower half of the 0.8500-0.8600 range. NOK: No benefits just yet from hawkish Norges Bank In line with our call, Norges Bank hiked by 50bp yesterday, and upgraded its rate path projections to include a 3.0% terminal rate by mid-2023. As discussed in our Norges Bank review, we are not particularly doubting the bank’s guidance for a 25bp move at the August meeting, but a weak currency and elevated commodity prices mean that another 50bp increase in September shouldn’t be ruled out. The reaction in EUR/NOK appeared rather counterintuitive given the hawkish surprise delivered by Norges Bank, with the pair quickly jumping back to 10.50 after a brief and very contained drop. We doubt this signals that the 50bp move was largely priced in (we had no evidence of that in the rates market) but instead that the challenging risk environment continues to keep investors quite structurally bearish on the krone. We believe that we’ll need to witness some material stabilisation in global sentiment for NOK to re-connect with its very attractive set of fundamentals. This may only happen later this year, and we continue to see chances of EUR/NOK trading below 10.00 before year-end. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

Watch: What’s next for EUR/USD?

ING Economics ING Economics 24.06.2022 13:35
The outlook for EUR/USD over the next 18 months is clouded by uncertain growth prospects, uneven policy responses, and unpredictable geopolitical events. In this video, ING's Francesco Pesole outlines four potential scenarios for the currency pair, including our base case for a weak rally through 2023   EUR/USD: Sizing up the scenarios   Read this article on THINK TagsUS FX Federal Reserve Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
GBP: Softer Ahead of CPI Risk Event

EUR/USD | Euro drifting as German confidence dips

Kenny Fisher Kenny Fisher 24.06.2022 15:08
It has been a relatively quiet week in the currency markets, and the limited activity has continued today, with the euro unchanged. German consumer confidence drops Germany, the bellwether for the eurozone, continues to churn out weak numbers, raising concerns that the bloc could be headed toward a recession. German ifo Business Climate dipped to 92.3 in June, down from 93.0 in May (92.8 est.) Germany and the rest of the eurozone remain vulnerable to negative economic factors which, unfortunately, do not show signs of improving anytime soon. These are the war in Ukraine, supply chain disruptions due to lockdowns in China, and spiralling inflation. The ECB has been slow to respond to higher inflation and the danger of stagflation is a serious risk. Germany has been slowly trying to wean itself off of Russian energy exports, but Moscow has decided to retaliate by decreasing its natural gas exports to Germany. This prompted Berlin to implement phase two of its emergency energy plan earlier this week. The energy crisis is getting worse and could result in the euro losing ground. The currency slipped below the 1.0500 line last week, and the risk is tilted to the downside for the euro due to the deteriorating situation with regard to Russian energy exports. Fed Chair Powell’s appearance on Capitol Hill this week was keenly watched by nervous markets. Powell didn’t hold back any punches, acknowledging that a recession was possible and a soft landing for the economy would be a challenge. At the same time, Powell sounded relatively optimistic about the strength of the US economy, and this message appeared to calm the financial markets, for the time being at least. . EUR/USD Technical EUR/USD has initial resistance at 1.0612, followed by resistance at 1.0727 EUR/USD has support at 1.0485 and 1.0370 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro drifting as German confidence dips - MarketPulseMarketPulse
Credit Suisse case: Western Assets expects Swiss authorities to act if sentiment doesn't improve

Trading plan for USDCHF on June 24, 2022

InstaForex Analysis InstaForex Analysis 24.06.2022 14:47
Relevance up to 14:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Technical outlook: USDCHF has reversed its early gains of 0.9630 and dropped through the range bottom close to 0.9560 before finding mild bids. The currency pair is seen to be trading close to 0.9570 at this point in writing and is expected to break below the 0.9550 range bottom. If successful, bears will remain in control and further drag prices towards 0.9365 going forward. USDCHF might change its near-term price action from unfolding as a triangle to completing a standard flat and terminate below 0.9550. On the other side, if prices hold above the 0.9550 interim support, the range might persist. The currency pair has produced a larger degree upswing between 0.8760 and 1.0064 recently, which is being retraced. USDCHF's potential bearish target is seen towards 0.9365, which is the Fibonacci 0.618 retracement of the recent larger degree upswing between 0.8930 and 1.0064 respectively. It would be interesting to see how prices will react at around 0.9550 as bulls might get back in control from there. Trading plan: A potential break below 0.9550 might trigger a sell-off at 0.9365 Good luck!   Read more: https://www.instaforex.eu/forex_analysis/281734
The Collapse Of The Silicon Valley Bank Weakened The Dollar And USD/JPY But Supported EUR/USD, AUD/USD, And GBP/USD

FX Update: Currencies awaiting a new catalyst.

John Hardy John Hardy 24.06.2022 15:31
Summary:  Commodity markets are commanding the most attention across markets and may be dragging bond yields down on the implications for easing inflation. In turn, then, shouldn’t JPY find a bit more support, as it did today when EU core bond yields cratered on weak flash June PMIs? Also, today the Norges Bank surprised many with a 50 basis point hike, although the NOK price action in the wake of the decision is underwhelming. FX Trading focus: Waiting for the next FX catalyst when historic moves in yields see little more than a polite nod. Yesterday’s weak flash June PMIs from the Eurozone and the US triggered a massive rally in bonds. By later in the day, the German 2-year Schatz yield had fallen the most in a single day (25 basis points) since the day after Bear Stearns was sold to JP Morgan – so the most in 14 years. And back then, the German 2-year was over 300 basis points versus just over 100 bps before yesterday’s rally in safe haven bonds on the weak data. US yields were also marked sharply lower, with the 10-year event trading all the way to 3.00%, but that move has been chopped in half from yesterday’s lows. Given the recent focus on the immovable Bank of Japan policy that caps Japan’s yields for 10 years and shorter, one would have expected a historic rally in EU bonds and chunky rally in US treasuries to support a fairly solid rally in the JPY on the reduction of pressure on EU-Japan and US-Japan yield spreads. The JPY did rally, but the scale of the rally was distinctly underwhelming in light of the underlying spread adjustment. This lack of reactivity is remarkable and has me reserving judgment on the potential for a more significant JPY rally here, even if I’m happy to revisit JPY upside potential if USDJPY droops through the 134-133.50 zone. As I discuss in what has moved the remarkable USDCAD chart over the last month, I suspect FX traders are caught in the crossfire of narratives that is keeping us rather bottled up in the ranges for most USD pairs. On the one hand, the profound reversal in Fed expectations out the curve is quite USD bearish, but on the other, if we are headed for a weaker global economy on still-tightening financial conditions, the USD could yet prove a safe haven until the Fed is not only marked to hike less, but to actually actively ease policy. Far too early for the latter. Next week will prove interesting, with the next round of data, including the June ISM’s from the US, and whether these corroborate the private initial June PMI’s from this week. As well, we’ll get a look at the May PCE indicator, even if markets are looking more at commodity prices, especially energy, as a forward inflation indicator. Chart: USDCAD over the last monthFrom late May through early June, the USDCAD pair broke down through key support and the 200-day moving average on the persistent rise in crude oil and as US equities had rebounded sharply from the lows of May. CAD was the strongest G10 currency for much of this period. Then, things suddenly turned south for CAD and USDCAD launched a sharp rally higher from nearly 1.2520 to 1.3000 when global stocks suffered an ugly rout from June 9-11, accelerated by the US May CPI release on June 10 that send US and global yields soaring in anticipation of a tighter Fed and the WSJ tip-off that the June 15 FOMC meeting would deliver 75 basis point hike. USDCAD peaked (and risk sentiment bottomed) on June 17, two days after the FOMC. Since then, the WTI crude oil benchmark has backed off from highs well north of 120 dollars per barrel to as low as 101.50 before rebound to about 106 as of this writing. That is extremely CAD negative, and yet USDCAD has traded in a tight range over the last week because off-setting that is the USD-negative sudden mark-down in Fed hiking expectations accelerated yesterday by weak flash June PMI data that mimicked the weak EU flash June PMI data. The market has marked the peak rate from the Fed by around 50 basis points and pulled the anticipated peak in the policy rate into very early next year. So what is to drive USDCAD from here? As long as yields continue falling and risk sentiment prefers to celebrate that fact rather than fact that this is an expression of the fear of recession, the pressure for the USD to rise fades. But if the next batches of economic data show that the Fed can’t back down any time soon due to persistent inflation readings from services inflation, rising rents and/or a still-tight jobs market, the USD could yet rise on a re-adjustment back higher of Fed tightening anticipation. On the other hand, if risk sentiment begins to falter on recession concerns, the US dollar may trade higher as a safe-haven. Technically, the comeback of the last couple of weeks is remarkable and trend-followers will look for a solid fall of the very well-defined 1.3000 area to indicate and next leg higher toward 1.3500. The tactical situation to the downside is rather more uncertain due to the huge swings in both directions within the range in recent weeks. Source: Saxo Group Table: FX Board of G10 and CNH trend evolution and strength.The CHF enjoying the falling yields here and is the strongest of G10 currencies of late. Watching the relative fortunes of the commodity currencies on the recent wobbles and the USD and JPY as discussed above. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.EURCHF is poking aggressively lower and looks set for a test of parity and USDCHF is eyeing major range lows. Watching the status of individual JPY pairs after the big rate shock yesterday failed to drive as much JPY volatility as one might have expected. For USD pairs, USDCAD and AUDUSD look the most pivotal in terms of the proximity of major levels (1.3000+ for USDCAD and 0.6830 for AUDUSD). Source: Bloomberg and Saxo Group Source: FX Update: Currencies awaiting a new catalyst. | Saxo Group (home.saxo)
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

ECB's Marathon. Earnings Season Is Coming! What's Up Equities?

Saxo Bank Saxo Bank 27.06.2022 10:51
Summary:  Today we discuss Friday's huge equity market rally and its likely proximate causes, especially the revision lower of a key US inflation expectations survey. Looking ahead, we consider the importance of the quarterly roll this week after a horrific quarter for equities as of last week's lows that may be driving rebalancing flows. As well, options exposures may be a key driver into quarter end. We also discuss the mounting impact of quantitative tightening in the weeks ahead, the outlook for the Q2 earnings season with a few interesting names reporting out-of-synch earnings this week, the US dollar and the macro calendar ahead as the ECB hosts a three day conference starting today. Today's pod features Peter Garnry on equities, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are also located there. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Technically and seasonally pivotal week ahead | Saxo Group (home.saxo)
Sustainability-Linked Products: Navigating Growth and Challenges for the Future

1 GBP To USD Indicator analysis: Daily review of GBP/USD on June 27, 2022

InstaForex Analysis InstaForex Analysis 27.06.2022 10:58
Relevance up to 09:00 2022-06-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1). The pound-dollar pair may move upward from 1.2269 (close of Friday's daily candle) to the target of 1.2385, the 61.8% retracement level (red dotted line). Upon reaching this level, the price may continue to move upward to the upper fractal 1.2404 (yellow dotted line). From this level, a downward pullback is possible.     Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today the price may move upward from 1.2269 (close of Friday's daily candle) to the target of 1.2385, the 61.8% retracement level (red dotted line). Upon reaching this level, the price may continue to move upward to the upper fractal 1.2404 (yellow dotted line). From this level, a downward pullback is possible. Alternative scenario: from the level of 1.2269 (close of Friday's daily candle), the price may start moving down with the target of 1.2213, the historical support level (blue dotted line). Upon reaching this level, an upward movement is possible with the target of 1.2299, the 50.0% retracement level (red dotted line).   Read more: https://www.instaforex.eu/forex_analysis/314567
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

FX: EUR To USD - Tips for beginner traders in EUR/USD and GBP/USD on June 27, 2022

InstaForex Analysis InstaForex Analysis 27.06.2022 11:02
Relevance up to 09:00 2022-06-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Details of the economic calendar from June 24 UK retail sales data showed a slowdown in the decline from -5.7% to -4.7%. This is a positive factor, if not for the revision of the previous indicators for the worse from -4.9% to 5.7%, as well as the forecast of a stronger slowdown to -4.1%. The bottom line shows bad statistics, which negatively affects the British currency. Analysis of trading charts from June 24 The EURUSD currency pair is moving within the range of 1.0500/1.0600, having local breaks, from time to time, that did not lead to violation of the set amplitude. The GBPUSD currency pair has formed a stagnation within the stagnation. For the second week, the quote has been moving within the flat 1.2150/1.2320, where a stagnation was formed within its upper border. Price fluctuations in a closed corridor indicate a characteristic uncertainty among market participants, which can lead to the accumulation of trading forces.     Economic calendar for June 27 Today, during the American trading session, data on orders for durable goods in the United States will be published, where May figures may decrease by 0.3%. If the data is confirmed, this is a negative factor, which can negatively affect the US dollar. Trading plan for EUR/USD on June 27 The flat is still relevant in the market, for this reason, traders are considering a scenario of a price rebound from the upper limit. If expectations coincide, the quote may slow down the growth rate, showing downward interest. At the same time, market participants are considering a flat breakout scenario. An increase in the volume of long positions may occur when the price holds above the value of 1.0600 in a four-hour period.     Trading plan for GBP/USD on June 27 In this situation, a short-term stagnation within the upper limit can become a lever in the subsequent acceleration in the market. Buy positions are taken into account after holding the price above the value of 1.2325 in a four-hour period. This step will indicate the completion of the flat. Sell positions should be considered after holding the price below 1.2250 in a four–hour period with the prospect of a move to 1.2200-1.2150.     What is reflected in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.   Read more: https://www.instaforex.eu/forex_analysis/314575
The Upside Of The EUR/USD Pair Remains Limited

FX: EURUSD & GBPUSD Technical analysis recommendations on EUR/USD and GBP/USD for June 27, 2022

InstaForex Analysis InstaForex Analysis 27.06.2022 13:00
Relevance up to 11:00 2022-06-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher timeframes The weekly short-term trend went down and now the main zone of attraction, where the levels of different timeframes have united, is located in the area of 1.0568 – 1.0539. The exit from the zone of the current consolidation, and the liquidation of the daily Ichimoku cross (1.0624) will open up prospects for a rise to the important resistance level of 1.0767 – 1.0787 (the upper limit of the daily cloud + weekly Fibo Kijun). The preservation of consolidation and further activity of the bears will allow considering plans to return to the supports of 1.0339 – 1.0349 (local low). Consolidation below will restore the downward trend on all higher timeframes.     H4 – H1 The uncertainty of the higher timeframes has led to the pair spinning around the key levels in the lower timeframes, consolidating in their zone of attraction. At the moment, key levels are located at 1.0538–46 (central pivot point of the day + weekly long-term trend). Finding and working above the levels gives preference to the development of bullish sentiments, their further reference points for the rise today can be noted at 1.0581 – 1.0605 – 1.0640 (resistance of the classic pivot points). Consolidation below key levels will support a shift in priorities in favor of the bears. The downward reference points within the day will be the support of the classic pivot points (1.0522 – 1.0487 – 1.0463). *** GBP/USD     Higher timeframes The center of attraction is now the weekly short-term trend (1.2300). If the pair leaves the consolidation zone and liquidates the daily death cross (1.2386), then the resistance of the daily cloud (1.2500 – 1.2727), reinforced by weekly (1.2626) and monthly (1.2678) levels, will wait for it. If the bears manage to maintain their ability to decline, coming out of this confrontation, then the support area of 1.2000 – 1.1933 is waiting for them. Consolidation below will allow us to consider new downward prospects.     H4 – H1 On the lower timeframes, the pair has been in the zone of influence and attraction of key levels for a long time (1.2277 central pivot point of the day + 1.2261 weekly long-term trend). At the same time, on H4, bullish players managed to enter the bullish zone relative to the Ichimoku cloud. As a result, resistance and reference points for the rise in the lower timeframes can now be noted at 1.2313 – 1.2357 – 1.2393 (resistance of classic pivot points) and at 1.2532 – 1.2598 (H4 target). If the priorities change and the activity will be inherent in bears, then their reference points for a decline within the day can be noted at the supports of 1.2233 – 1.2197 – 1.2153 (classic pivot points). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/314602
USD/JPY Tops Majors in Past Month; Strong Verbal Intervention from Japan's Ministry of Finance as Resistance Nears

FX: GBP/USD: plan for the US session on June 27 (analysis of morning deals). The sellers of the pound are back in business.

InstaForex Analysis InstaForex Analysis 27.06.2022 13:20
Relevance up to 12:00 2022-06-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. In my morning forecast, I paid attention to the 1.2317 level and recommended making decisions from it. Let's look at the 5-minute chart and figure out what happened there. Growth and another unsuccessful attempt to get above 1.2317 by analogy with Friday's attempt to break out of the side channel – all this led to a sell signal for the pound. At the time of writing, the pair has gone down more than 40 points and the pressure on the trading instrument remains. From a technical point of view, nothing has changed, nor has the strategy itself changed. And what were the entry points for the euro?     To open long positions on GBP/USD, you need: The lack of statistics on the pound allowed buyers to make another attempt to break 1.2317, but it was not possible to gain a foothold above this level. During the American session, data on the volume of sales of long-term goods were released today, which may increase pressure on the pound - if the indicators turn out to be much better than economists' forecasts. If the reports coincide with the forecasts, most likely the pair will continue trading in the side channel with the prospect of re-updating the resistance at 1.2317. In case of a return of pressure on the pound after the data, the bulls will try to protect 1.2241. Only the formation of a false breakdown there will give a signal to open new long positions in the expectation of growth to the nearest level of 1.2317. In the morning forecast, I said that this level is critically important for bulls since by returning it under control, it will be possible to count on the resumption of the bull market formed on June 14. A breakout and a top-down test of 1.2317 will give a buy signal based on the 1.2400 update. A similar breakthrough at this level will lead to another entry point into long positions with the prospect of reaching 1.2452, where I recommend fixing the profits. A more distant target will be the 1.2484 area. If GBP/USD falls and there are no buyers at 1.2241 in the afternoon, the pressure on the pair will increase. In this scenario, I advise you to open new long positions only on a false breakout from the lower border of the side channel 1.2171. You can buy GBP/USD immediately for a rebound from 1.2102, or even lower – around 1.2030 with the aim of correction of 30-35 points within a day. To open short positions on GBP/USD, you need: The bears did everything possible to return to the market and defended 1.2317. Most likely, the emphasis will now be placed on 1.2241 and on fixing below this range. In the case of weak data on the index of pending sales in the real estate market and the volume of orders for durable goods in the United States, it will be possible to observe another upward jerk of the pound. Therefore, only the formation of a false breakdown at 1.2317 will lead to the formation of another sell signal with the prospect of a return to 1.2241. Its breakthrough will lead to a sell-off and a return of GBP/USD to the area of the lower border of the side channel. However, only a consolidation below 1.2241 and a reverse test from the bottom up will give an entry point into short positions. A more distant target will be the 1.2102 area, the test of which will testify to the defeat of buyers. With the option of GBP/USD growth and the absence of bears at 1.2317, we will only have to count on the nearest resistance of 1.2400. A false breakout at this level will give a good entry point into short positions in the expectation of at least some downward correction. If there is no activity at 1.2400, another upward jerk may occur against the background of the demolition of stop orders of speculative sellers. In this case, I advise you to postpone short positions to 1.2452. But even there, I advise selling the pound only in case of a false breakdown, since going beyond this range will increase demand for GBP/USD. Short positions can be viewed immediately for a rebound from 1.2484, or even higher – from 1.2516, counting on the pair's rebound down by 30-35 points inside the day.     The COT report (Commitment of Traders) for June 14 recorded a reduction in both long and short positions, which led to a slight decrease in the negative delta. After the meeting of the Bank of England, at which it was announced that it would adhere to the previous plan to raise interest rates and combat high inflation, the pound strengthened its position, which will affect future COT reports. For sure, the big players are taking advantage of the moment and buying back the much cheaper pound, despite all the negative that is happening with the UK economy now. However, one should not rely too much on the pair's recovery in the near future, since the policy of the Federal Reserve System will seriously help the US dollar in the fight against risky assets. The COT report indicates that long non-commercial positions decreased by 5,275 to the level of 29,343, while short non-commercial positions decreased by 10,489 to the level of 94,939. This led to a decrease in the negative value of the non-commercial net position from the level of -70,810 to the level of -65,596. The weekly closing price decreased to 1.1991 against 1.2587.     Signals of indicators: Moving averages Trading is conducted around 30 and 50 daily moving averages, which indicates market uncertainty. Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1. Bollinger Bands In the case of growth, the average border of the indicator around 1.2310 will act as resistance. In the case of a decline, the lower limit of the indicator in the 1.2240 area will act as support. Description of indicators Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow. Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green. MACD indicator (Moving Average Convergence / Divergence - moving average convergence/divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-profit speculative traders, such as individual traders, hedge funds, and large institutions use the futures market for speculative purposes and to meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between the short and long positions of non-commercial traders.   Read more: https://www.instaforex.eu/forex_analysis/314610
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

EUR/USD Went Up, FX: USD/JPY Was Supported Again. Russian Natural Gas Theme Is Still Present In Europe. Where Will GBP/USD Go?

Jeffrey Halley Jeffrey Halley 28.06.2022 11:23
US dollar shows muted reaction to US releases A rise in US yields overnight boosted the USD/JPY slightly, but elsewhere, the greenback continued its modest retreat versus the G-20 space as currency markets showed very little reaction to the US data. The dollar index eased 0.17% lower to 103.95, where it remains in Asia. The charts do suggest the downward correction still has more to run, with a failure of 103.50 signalling a deeper correction. The dollar index has support at 1.0350 and 102.50, with resistance at 105.00 and 1.0570. Elsewhere, currency markets are comatose in Asia, with both DM and Asian currencies almost unchanged from their overnight closes. EUR/USD rose by 0.25% to 1.0580 overnight, where it remains in Asia. It continues showing resilience as the Russian natural gas exports to Europe situation deteriorates, but initial resistance at 1.0600 and 1.0650 remains challenging. Support is at 1.0450 and 1.0400. Sterling was unchanged at 1.2275 overnight once again, unmoved in Asia. GBP/USD has initial resistance at 1.2360 and 1.2400, with support at 1.2200, 1.2160, and then 1.1950. USD/JPY edged 0.25% higher to 135.45 overnight as US yields moved slightly higher. It has fallen slightly to 135.30 in Asia. USD/JPY has support at 134.25 and 132.00, with resistance at 136.65 and 138.00. The short-term direction remains at the mercy of US yields, although a fall by the US 10-year through 3.0% could provoke an unwinding of USD/JPY longs. Asian currencies continued to trade sideways overnight, mostly booking some small gains, but overall, remaining near recent lows versus the US dollar. That suggests that the rise in investor sentiment in equity markets is yet to spill out into the broader EM complex. The Chinese yuan has had zero reaction once again to another large liquidity injection by the PBOC this morning. Markets are clearly anticipating the PBOC draining all the liquidity via the repo next week after the quarter-end has passed. Reserves data suggests that Asian central banks have been busy selling US dollars recently to smooth out currency volatility, but it looks like any consistent rally is going to need a big US dollar move lower. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US dollar mixed - MarketPulseMarketPulse
ECB's Knot: July Rate Hike Necessary, Beyond July Uncertain; Canadian CPI Supports Rates on Hold; Global Crypto Market at $1.2 Trillion; Oil Market Tightens with Russian Shipments Drop and China's Support Measures

Dollar may halt growth, while the collapse of the crypto market will continue (expect a local increase in USD/JPY and XAU/USD) | InstaForex

InstaForex Analysis InstaForex Analysis 28.06.2022 14:23
Relevance up to 09:00 2022-06-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The currency market continues to move in a tight horizontal channel, driven by many factors that balance each other. They prevent the formation of a distinct trend, but since dollar already halted its growth, euro has every chance of rising noticeably in the short term. This is also possible in other currencies pair with dollar. In principle, the reason why the market is like this right now is because dollar is overbought and Treasury bonds eased its sell-offs, leading to the stop of yield growth. Another factor is the rate hikes implemented by world central banks, as well as the impending increase of ECB's cost of borrowing, which reduces the difference in interest rates and supports the exchange rates of currencies traded against dollar. While relative calm has been established in the forex market, the crypto market continues to suffer significant problems, ruining not only holders of bitcoins and other crypto instruments, but also companies. For example, the well-known crypto hedge fund Three Arrows Capital defaulted on a loan in the amount of more than $670 million. Problems in the crypto market arose after the factors supporting it earlier changed dramatically at the beginning of this year. Most likely, if central banks continue to tighten policies and trigger a stagflation, the market will collapse further. This is why many are closely monitoring the data on inflation, as well as business activity indices in Europe and the United States. Forecasts for today:     USD/JPY The pair is trading upwards, thanks to lower market tensions and growing risk appetite. Further increase above 135.55 will bring the pair to 136.65.     XAU/USD Spot gold is consolidating in the range of 1820.30-1845.20. There is a high chance that it will remain trading within these levels until the end of this week.   Read more: https://www.instaforex.eu/forex_analysis/314713
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

FX: USD/JPY is growing despite the weakening of the dollar, first target is 136.70

InstaForex Analysis InstaForex Analysis 28.06.2022 16:09
Relevance up to 13:00 2022-06-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The USD/JPY pair is slowly but consistently developing the upward offensive, intending to gain a foothold in the area of the 136th figure. Over the course of three trading days, the price is gradually growing, overcoming intermediate resistance levels. And it looks like this trend will continue in the medium term. The US currency is the main engine of growth for USD/JPY, despite the fact that it is under general background pressure. The US dollar index is stuck in the middle of the 103rd figure after falling from 105.55. That is why the pair is growing rather slowly, with impressive intraday pullbacks.     The demand for the greenback has been falling for two main reasons. First, the market saw signs of a slowdown in inflation growth in the US. The reason for such conclusions was the June index of consumer confidence, which is calculated by the University of Michigan. It collapsed to 50 points, while in May it was at 58.4 points. After this release, the dollar came under pressure, while the S&P 500 index showed the highest increase since May 2020. The second reason for the general weakening of the greenback is the indecisive position of Federal Reserve Chair Jerome Powell regarding the prospects for tightening monetary policy. After all, the above inflation report should be viewed precisely through the prism of the position of Powell, who has not yet decided on the pace of interest rate increases. After his recent speech in Congress, the dollar lost its position, retreating from its reached highs. The de facto dollar rally ended after Powell did not defend the "ultra-hawkish" scenarios. On the one hand, the head of the Fed made it clear that the regulator will maintain a hawkish course, continuing to raise the interest rate until it breaks the inflation growth. But on the other hand, he stressed that "the pace of further rate increases will continue to depend on incoming data and changing economic conditions: the Committee will make a decision from meeting to meeting." This phrase can be interpreted unambiguously: the further pace of monetary tightening will depend on the dynamics of key inflation indicators, such as the consumer price index and PCE. The latest release of the CPI showed that inflation does not even think of slowing down: after a two-month decline, the index resumed its growth again, updating 40-year highs (after this release, the Fed raised the rate by 75 points, provoking a stronger dollar). As for the base price index for personal consumption expenditures in the US (PCE), now we can only use April data, while the report for May will be published on Thursday. Given the market reaction to the consumer confidence index from the University of Michigan, it can be assumed that PCE will provoke increased volatility for all dollar pairs, including USD/JPY. But note that while the greenback in the main pairs of the major group is losing its positions, the USD/JPY pair is slowly but still creeping up. In my opinion, this anomaly is explained by the divergence of the rates of the Fed and the Bank of Japan, which will persist regardless of the degree of Jerome Powell's hawkishness. As you know, the US Federal Reserve is now facing a choice: to raise interest rates in July by 50 or by 75 points. The Japanese regulator does not have such a dilemma: despite the growth of inflation indicators, the Bank of Japan decided to adhere to an accommodative monetary policy—"to support the economy." Moreover, representatives of the Japanese Central Bank, at every opportunity, declare that they are ready to soften the parameters of monetary policy, "if necessary." For this reason, the USD/JPY pair demonstrates an upward trend. The price goes up, albeit with deep corrective pullbacks. If we look at the MN timeframe, we can see that since March the pair has grown by more than 2,000 points. At the same time, there is no consensus in the market on where the pair will eventually end up. In June, the price renewed its 24-year high, so it is quite difficult to talk about any borders and "red lines." For example, according to currency strategists at Societe Generale, the pair will rise first to 138, then to 141. Westpac economists expect the pair to reach 137 in the near term. In turn, Rabobank experts say that there is a high probability that the pair will reach 140 in the short term. In my opinion, in the foreseeable future, it is necessary to consider more mundane targets. The first of them is 136.72 (a 24-year high, which was updated on June 22). The main target (in the medium term) is 137.70 (the upper line of the Bollinger Bands indicator on the D1 timeframe).   Read more: https://www.instaforex.eu/forex_analysis/314731
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

EURUSD rejected at Kumo (cloud) resistance

InstaForex Analysis InstaForex Analysis 28.06.2022 15:25
Relevance up to 15:00 2022-06-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   EURUSD bulls made another attempt to enter the Daily Kumo (cloud). Yesterday the daily candle closed above the kijun-sen (yellow line indicator) and inside the Kumo (cloud). Today price is getting rejected. If things stay like this, price action will be bearish. Support by the tenkan-sen (red line indicator) is at 1.05. The cloud rejection today if combined with a close below 1.0573 (kijun-sen), will be a bearish signal. Failure to stay above 1.05 will also be a bearish signal. Bulls need to react now and recapture 1.0590. As long as price is below the Kumo we remain bearish.   Read more: https://www.instaforex.eu/forex_analysis/282263
Crucial Upcoming PMI Data and High-Stake Meetings Shape China's Economic Landscape

USDJPY ready to make new higher highs for 2022.

InstaForex Analysis InstaForex Analysis 28.06.2022 15:24
Relevance up to 15:00 2022-06-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Red lines- bearish RSI divergence Blue line- resistance trend line USDJPY trend remains bullish as price continues making higher highs and higher lows. Price is soon expected to make new higher highs towards 137.10 but bulls need to be very cautious. In previous posts we warned that the bearish divergence in the RSI is a warning that the up trend is weakening. Support at 134.60-135 has been held so far and price is moving higher. Price has the potential to reach the blue resistance trend line at 137-137.20. However it seems very possible to see also a new bearish divergence combined with the new higher high. This is not a reversal signal but only a warning that the reversal is getting close. Bulls need to protect their gains.   Read more: https://www.instaforex.eu/forex_analysis/282261
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Rates Spark: The hawks are circling | ING Economics

ING Economics ING Economics 29.06.2022 09:40
Central banks have proven their ability to move rates higher once again, trumping recession fears for now. We expect no let-up at the ECB’s Sintra forum today, but any further rise in yields is subject to risk sentiment holding up. The EUR curve structure is at odds with the worsening macroeconomic backdrop All eyes will be on the European Central Bank's forum in Sintra, Portugal The ECB out-hawks the market At the start of this week, one could reasonably have doubted central bankers’ ability to push market pricing into an even more hawkish territory. After all, recession fears boiling over in the eurozone, and elsewhere, cast a long shadow on policy tightening forecasts. In addition, the European Central Bank’s (ECB) Sintra forum promised to be a hawk-fest where officials try to regain control of the narrative, and inject some much needed confidence in the market. ECB comments have rekindled EUR rates upside Source: Refinitiv, ING   Today’s line-up promises even more hawkish comments The ECB has delivered on hawkish expectations, and then some. Martin Kazaks broke ranks with the 25bp July hike consensus, and President Christine Lagarde repeated ad nauseum that inflation-fighting remains the ECB’s utmost priority. The latter was expected, and the former was a risk at least partially priced by the market going into the event. And yet, this was enough for the market to add to Monday’s double-digit rise in EUR yields. It is difficult to extrapolate this into a third day of a bonds sell-off but, if anything, today’s line-up (see events section) promises even more hawkish comments. The EUR curve structure anomaly Once again, the policy-sensitive part of the curve finds itself in the firing line. Traditionally, this has meant 5Y and maturities around it. As central banks scramble to catch up with high inflation, effectively front-loading hikes, shorter maturities have seen the most volatility. This week’s underperformance of the 5Y point may be an accident, perhaps due to supply in the sector from Germany and KFW. If it isn’t, it would signal a greater confidence into this tightening cycle being a more protracted affair than previously thought. In light of growing recession fears, we have our doubts and would expect the 5Y sector to come in on the curve, for instance with the 2s5s10s butterfly in EUR swaps converging towards zero. The EUR forward OIS curve is the only one that isn't inverted Source: Refinitiv, ING   We expect the 5Y sector to come in on the curve Similarly, a more hawkish re-pricing should in our view come with an inversion of the near-dated forwards, effectively pricing the possibility of a subsequent cut. This has long since been the case in USD and GBP rates, but the EUR swaps term structure has so far remained flat. Should the terminal deposit rate climb above the 2% line, we expect inversion to occur… provided recession doesn’t become the market’s central scenario before then. Today's events and market view Spain and Germany kick off this round of June CPI releases today. A slight acceleration in the annual EU-harmonised measures would give weight to the barrage of hawkish ECB comments we’re sure to get from and around the Sintra forum. This being said, regional Germany inflation indices available at the time of writing suggest further inflation acceleration is not a given in June. Talking of which, no less than ECB President Christine Lagarde, Fed Chair Jerome Powell, BoE Governor Andrew Bailey are taking part of a policy panel early in the European afternoon. Recent comments suggest that central bankers will look to out-hawk each other to project an aura of confidence to markets roiled by inflation risk. They will be joined by Augustin Carstens of the Bank of International Settlements who, judging by his foreword to its annual report, will lean heavily in the hawkish direction. US data consists of mortgage applications and the third read of the now dated 1Q GDP report. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Maintains The Bullish Sentiment

EUR/USD In Focus! ECB Meeting In Sintra Is Like A Blockbuster Starring Lagarde, Powell And Bailey

Kenny Fisher Kenny Fisher 29.06.2022 13:15
The euro remains under pressure and briefly fell below the symbolic 1.0500 level in the Asian session before recovering. Lagarde says ECB ready to act if needed The ECB forum in Sintra, Portugal this week is a chance for the heads of central banks to hobnob and provide encouragement in these challenging times. ECB President Lagarde, Federal Reserve Chair Powell and BoE Governor Bailey are all in attendance. Inflation has become public enemy number one, and the BoE and the Federal Reserve have responded with an aggressive rate-hike campaign as inflation nears double-digits in the US and UK. Inflation has not spared the eurozone and accelerated to 8.1% in May. It wasn’t that long ago that Lagarde was dismissive of inflation, stating that it was temporary. Lagarde has been forced to change her tune, and the ECB has finally joined the tightening bandwagon, saying earlier this month that it would raise rates in July and again later in the year. Lagarde admitted on Tuesday that the ECB had revised downwards its growth forecasts, but downplayed concerns about a recession. Many market players would disagree, with Russia cutting energy supplies to the bloc and a very real possibility of the US economy tipping into recession. Lagarde’s hawkish comments at the ECB forum didn’t help the euro, which lost ground on Tuesday. Investors will be listening closely as Lagarde and Federal Reserve Chair Powell address the forum later today. Market jitters over a US recession are rising, which has boosted US equity markets of late, the logic being that the Fed will have to ease up on its hawkish bias. Powell may opt to play it safe on his visit to scenic Sintra, but any hints of dialing back on rate hikes could send the US dollar lower. . EUR/USD Technical 1.0544 is a weak resistance line, followed by resistance at 1.0618 There is support at 1.0482 and 1.0408 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Lagarde talks tough, Powell next at ECB - MarketPulseMarketPulse
Steel majors invest in green steel, but change might be driven by contenders

FX Update: USD jolted higher on fitful safe haven bid. JPY risks mount.

John Hardy John Hardy 29.06.2022 14:16
Summary:  The US dollar has generally risen in recent months on the increasingly rapid pace of Fed tightening and perceived changes to that pace, so it was interesting yesterday to note that the US dollar rose purely as a function of weak risk sentiment in the wake of an ugly US Consumer Confidence number for June, as treasury yields and Fed expectations actually dropped modestly on the day. Elsewhere, the JPY is looking nervous again for testing the BoJ. FX Trading focus: Hard to find any path to sustained US dollar weakening. The equity market lurched suddenly into risk-off mode yesterday, just two days after one of the strongest rallies this year, showing an unsettling volatility of volatility. In Q1, the market rallied steeply in March, but rolled over starting on the second to last day of the quarter. This quarter, we found a bottom in sentiment right around the FOMC meeting and rallied steeply, only to roll over (so far) on the third to last day of the quarter. Are these portfolio rebalancing effects and are they already fading ahead of the new quarter? In any case, the jolt weaker in risk sentiment offered traditional safe-haven support for the US dollar, which has generally traded since late last year as a function of Fed tightening anticipation. The USD won’t roll over durably, I argue in our upcoming Q3 outlook, until the Fed is seen as launching into a sustained easing again. So, although yesterday saw a modest apparent safe-haven bid into treasuries, we also had Fed officials out staying on message for further tightening (Cleveland Fed’s Mester: Fed is “just at the beginning” of raising rates) and we have a QT that is on autopilot to continue tightening financial conditions. One key data point that spooked the market yesterday was the huge drop in expectations component of the US Consumer Confidence reading for June, which fell to 66.4 from the revised 73.7 in May (revised down from 77.5!). This is the worst for that data point since 2013 and further inverts the Expectations-Present Situation spread. But we’re not really “there yet” in terms of clear recession unfolding until the Present Situation is moving clearly negative. Technically, nothing has broken down among USD pairs – the EURUSD has merely shied away from the key 1.0600 resistance and traded back toward the pivotal 1.0500 area, the AUDUSD is having a look at a minor consolidation triangle support, but is still above the 0.6829 cycle low and GBPUSD finally halted its string of days of nearly unchanged daily closing levels at six and lurched lower yesterday, but traded nearly two figures above the cycle lows below 1.2000 this morning. So let’s wait and see for the next round of data to test USD direction and whether it has potential higher again. The easiest upside path would be US data that proves less bad than expected or even distinctly inflationary on earnings next week (the Citi economic data surprise index for the US is about as negative as it ever has been over the last several years, if we remove the pandemic outbreak months from consideration), together with a fresh leg higher in crude oil, all of which supports the USD from the Fed policy outlook side and safe-haven angle, if risk deleveraging continues . Good data is likely bad for risk and good for the US dollar, while very very bad for the JPY, as discussed below. Chart: USDJPYA decent little retreat in US treasury yields, and yet here we are pegged near the highs in USDJPY – possibly ready for an aggravated ascent in coming days if the US data fails to confirm the “recession incoming!” scenario and US yields tick back up higher toward the 3.50% level for the US 10-year treasury yield benchmark, for example. While US yields have remained rangebound recently, we also have to consider the relative balance sheet situation of the two central banks as the BoJ has added to its balance sheet at a record pace recently to defend the yield-curve-control policy and has effectively lost control of its balance sheet in a rising yield environment, while the Fed is set to accelerate the shrinking of its balance sheet (QT) from here. We have a potentially explosive situation on our hands that could lead to a spike higher in USDJPY to well above 140 and possibly even 150, which could then lead to the Bank of Japan to finally capitulate and driving a 10% or greater boomerang move in the opposite direction. Beware volatility potential in both directions! Source: Saxo Group Table: FX Board of G10 and CNH trend evolution and strength.JPY fading to the weak side again – will BoJ be forced to capitulate before other central banks change direction/yields in general roll over? USD comeback nothing to write home about just yet – watching through next US data points as noted above. But sterling weakness is picking up again, while CHF is riding highest and EURCHF is pushing on parity. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Interesting to note the USDCNH poking back into an “uptrend”, although really there was just the one-off move from the base there and then a subsequent period of range-trading. Elsewhere, note more sterling pushing to negative in more place - yesterday on the close versus SEK and NOK. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1200 – Germany Flash Jun. CPI  1300 – Central Banks speakers at ECB Conference: Fed Chair Powell, BoE Governor Bailey, ECB President Lagarde  1500 – ECB President Lagarde to speak  1530 – US Fed’s Mester (voter) to speak  1705 – US Fed’s Bullard (voter) to speak  2350 – Japan May Industrial Production  0100 – New Zealand Jun. ANZ Business Survey  0130 – China Jun. Manufacturing and Non-manufacturing PMI Source: FX Update: USD jolted higher on fitful safe haven bid. JPY risks mount. | Saxo Group (home.saxo)
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

USD/JPY Technical Analysis and Trading Tips for June 29, 2022

InstaForex Analysis InstaForex Analysis 29.06.2022 14:57
Relevance up to 12:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   In the middle of this month, USD/JPY broke a multi-year high and 135.19, reached in January 2002, and today the pair continues to develop an upward momentum. In our previous reviews, we assumed that the divergence in the monetary policy rates of the Fed and the Bank of Japan is likely to increase, creating prerequisites for further growth of USD/JPY. In this case, the pair will head towards multi-year highs near 135.00, reached in January 2002. Our forecast was fully justified, and the set targets (Buy Stop 125.50. Stop Loss 124.40. Take-Profit 125.65, 126.00, 127.00, 128.00, 134.00, 135.00) were achieved. Moreover, the price rewrote the multi-year high of 135.19 and hit a new all-time high of 136.70 last week.     USD/JPY is currently trading near 136.50, with potential for further gains. There is a strong upward momentum, fueled by increasing divergence in the direction of the monetary policies of the Fed and the Bank of Japan. The breakdown of the local high at 136.70 will be a signal to increase long positions. In an alternative scenario, the signal for short-term sales will be a breakdown of the support level of 135.19 (local support level and 200 EMA on the 1-hour chart).     In this case, the downward correction may continue to the support level of 132.37 (200 EMA on the 4-hour chart) and even lower to the support level of 131.00 (local highs, 50 EMA and the lower line of the rising channel on the daily chart), where pending buy orders can be placed. A deeper decline is unlikely. Volatility in the market and in USD/JPY quotes may sharply increase again today at 12:30 and 13:00 (GMT).     In the main scenario, we expect continued growth. Support levels: 136.00, 135.19, 132.37, 131.00, 126.55, 124.20, 121.65 Resistance levels: 136.70, 137.00 Trading Tips Buy Stop 136.55. Stop Loss 135.70. Take-Profit 136.70, 137.00, 138.00, 139.00, 140.00 Sell Stop 135.70. Stop Loss 136.55. Take-Profit 135.19, 132.37, 131.00   Read more: https://www.instaforex.eu/forex_analysis/314851
EUR/USD In Times Of Possible Parity, USD/JPY And GBP/USD – Detailed Analysis And Forecast By ING Economics

EUR/USD In Times Of Possible Parity, USD/JPY And GBP/USD – Detailed Analysis And Forecast By ING Economics

ING Economics ING Economics 11.07.2022 13:04
How low can you go? Given fears of a global recession, ‘How low can you go?’ is now a pressing question being asked of many risk assets and of key FX pairs like EUR/USD. Investors hold out little hope for improvement in energy supplies anytime soon and central bankers are showing no signs of being distracted from forceful monetary tightening cycles. That all points to equity markets perhaps another 10% lower and a worst case for EUR/USD near 0.95. The ECB in particular faces the conundrum of trying to address inflation fears, while at the same time trying to avoid driving the Eurozone economy into recession. While it may only deliver 100bp of the 175bp tightening currently priced by the market, our team now look for a Eurozone technical recession in 4Q22/1Q23. This will weigh on pro-cyclical currencies like the euro, sterling, the Swedish krona, and many currencies in CEE. Outperformers in what will be a difficult summer for risk will likely remain the dollar, the yen and the Swiss franc. In fact, the Swiss National Bank is now using its huge war chest of FX reserves to ensure the Swiss franc does just that – strengthen. Peak pain this summer and the focus on demand destruction will keep commodity currencies on the back foot. Most vulnerable may well be the likes of the South African rand and the Brazilian real – the latter shaping up for contentious elections in October. And in Asia, high beta currencies like the Korean won will remain soft as will the Philippine peso and Indonesian rupiah, the latter pair left vulnerable by dovish central banks. USD/CNY set to remain range-bound while Covid policy and geopolitics dominate. Developed markets EUR/USD How low can you go? Current spot: 1.0133 • As we put pen to paper, EUR/USD is within striking distance of parity. The stagflationary effects of the war in Ukraine are being felt far more in Europe than in N. America. Thus, short term rate spreads continue to move against EUR/USD as does the risk environment, where equities could have another 10% leg lower. • Based on recent correlations, a 10% fall in equities and a 25bp widening in spreads this summer would put EUR/USD somewhere near 0.98. A 50bp widening in spreads, were the Fed to move more aggressively or ECB hawks to soften, would be worth 0.95. • Don’t look for a substantial turn higher in EUR/USD this summer, since it seems far too early for Fed hawks to back down. USD/JPY Deteriorating risk sentiment to support the JPY Current spot: 136.97 • One of the core challenges faced by central banks the world over is to get inflation lower. The only tool they have at their disposal is to tighten monetary conditions and try to slow demand. Slowing demand is taking its toll on equity markets, which look vulnerable as central banks tighten further even as growth slows. The JPY, like the USD and CHF, should out-perform this summer. • The big USD/JPY rally looks to have stalled near 135 and certainly the going above here will be harder. US 10-year yields, a key driver of USD/JPY, have probably peaked at 3.50%. • The BoJ meeting of July 21st is unlikely to see the BoJ turn hawkish. A lower USD/JPY will be driven by equities & US yields. GBP/USD Bank of England keeping a close eye on sterling Current spot: 1.1971 • Away from the political circus in Westminster, sterling has been hit by the super-strong dollar, but is outperforming the euro. Here the BoE has started to highlight sterling’s role in monetary conditions. With UK CPI expected to push up to 11% in October, expect the BoE to stay hawkish and to hike 50bp on August 4th. • Yet, as a growth-sensitive currency, sterling will be in a for a tough summer and Cable looks set to trade down to 1.17 and possibly 1.14/15 again. We tentatively think these could again prove the lows for the year if, as we expect the $ turns by yr-end. • UK politics mean we won’t have a working government until September, but looser fiscal policy this Autumn can help GBP. This article is a part of the report by ING Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

FX: Volatility May Be The Keyword! Let's Look At EUR/USD, GBP/USD (British Pound Against US Dollar) And Other Forex Pairs! | Oanda

Jeffrey Halley Jeffrey Halley 12.07.2022 12:40
Flight to safety boosts US dollar The US dollar caught another flight-to-safety boost overnight, running rampant over DM currencies with the euro, sterling, yen, and Australian dollar coming in for particular attention. In Asia today, EUR/USD continues to flirt with parity, while the US dollar has strengthened broadly across the Asia FX space. US Dollar Index (DXY) The dollar index soared 1.23% higher to 108.21 overnight, gaining another 0.16% to 108.38 in Asia as the euro and sterling losses continued. Overall, the technical picture remains constructive for the dollar index, although the daily relative strength index (RSI) is now in overbought territory, suggesting a temporary downward correction is possible. Having broken out of a 5-year triangle at 102.50 in April, its longer-term target remains in the 1.1700 area. More immediate resistance is at 108.45 and 110.00. Support is at the 1.0585 breakout point, and then 1.0500, followed by 1.0350 and 102.50. ​ EUR/USD EUR/USD tumbled by 1.43% to 1.0040 overnight, edging 0.17% lower to 1.022 today, having traded as low as 1.0006 earlier in the session. I expect there to be plenty of bids into parity initially, likely option and exporter-related. A break of 1.0000 is likely to trigger a sharp move lower as stop-losses and algos kick in. Since breaking a multi-year support line at 1.0850 in April, the euro has looked consistently weak, the recovery rally failing ahead of 1.0850 in a technical analysis nirvana. An oversold RSI allows for short-term recovery, with resistance at 1.0200 and 1.0270. Support is at 1.0000, and failure targets the 0.9900/25 area. British Pound To US Dollar GBP/USD fell by 1.19%% to 1.1890 overnight, dragged lower by the euro and a rampant US dollar. With a new Prime Minister not due to be announced until early September, this uncertainty will continue to weigh on the sterling. In Asia GBP/USD has edged 0.20% lower to 1.1867. Immediate support is nearby at 1.1860 and 1.1800, with 1.1400 the medium-term target. Resistance is well defined at 1.2060 and 1.2200. US Dollar To Japanese Yen USD/JPY rallied by 0.98% to 137.40 overnight despite US yields easing. In Asia, it is steady at 137.30 as Finance Minister Suzuki’s comments add some two-way risk into being long USD/JPY at these levels, at least temporarily. USD/JPY has resistance at 138.00 and 140.00, with support at 136.00, 134.25 and 132.00. Only a sharp fall in US yields seems likely to turn USD/JPY lower. Australian Dollar To US Dollar AUD/USD slumped by 1.70% overnight to 0.6735 on a combination of haven-based US dollar buying, a reversal in global investor sentiment, and China lockdown concerns. In Asia, it has eased 0.17% lower to 0.6725. A correction above resistance at 0.6900 looks unlikely for now, with risks skewed towards the downside and a test of 0.6600. NZD/USD also plummeted overnight and is facing a test of 0.6100 today. Asia Asian currencies fell overnight as investors moved into risk-aversion mode and bought US dollars across the board. The won, baht and yuan led losses, and today USD/Asia is higher by around 0.30%, with the Philippines peso falling 0.60% after poor trade data, while USD/IDR is testing 15,000.00 and USD/MYR looks set to test 4.4500. USD/INR and USD/PHP are trading at record lows although the price action in USD/INR, USD/IDR, USD/KRW, USD/PHP and USD/THB suggests that local central banks are offering US dollars at these levels. That is likely to be smoothing rather than lines in the sand, and US inflation above 7.0% this Thursday will probably spur more selling. USD/CNH has also moved sharply higher in the last 24 hours, and any indication that China is enacting lockdowns again in major urban centres will see it and the rest of the Asia FX space move sharply lower. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
German Export Weakness In The Fourth Quarter Suggests That Recession Fears Are Real

Germany: Recession Caused By The Concerns Around Gas? ECB's Reponses To Others Have Been "Unhurried"

Walid Koudmani Walid Koudmani 12.07.2022 14:30
EURUSD is in the center of attention today since after a months-long drop, the euro is nearing parity with the US dollar. It was almost 20 years ago when the main currency pair traded at 1.00 for the last time. What are the reasons for the euro underperformance? On one hand, implications of the Russia-Ukraine war play a big role. Energy prices   Energy prices in Europe spiked as gas flows were being limited and now there is a real risk of complete halt to gas supply from Russia as tensions continue to escalate and after the "temporary" shutdown of Nordstream 1. This would most likely lead to a recession on the continent, especially in gas-dependent countries like Germany. Another reason for the weak performance of the common currency is the European Central Bank, which has been very slow compared to other major central banks when it comes to policy tightening and is yet to deliver its first rate hike. Fed Meanwhile, the Fed embarked on an aggressive rate hike cycle in an attempt to contain rampant inflation, providing support for the US dollar, which is also benefiting from safe haven flows. As a result, EURUSD keeps moving lower. However, traders should expect some support around the 1.00 area due to the psychological nature of this level which could lead to some efforts from buyers.  
EUR/USD Pair Has Potential For The Downside Movement Today

Podcast: Speaking Of EUR/USD And The Future Of Euro, COVID-19, British Pound And Bank Of England | Oanda

Jeffrey Halley Jeffrey Halley 12.07.2022 14:39
Senior Market Analyst Jeffrey Halley talks about news impacting the market and the week ahead. In this week’s podcast, the Euro is approaching parity with the US Dollar for the first time in decades. We discuss the move, the reasons behind it, and what lies ahead for the single currency. But first, it is a quick look at Asian markets where covid-19 concerns in China are weighing on sentiment. Then it is the British Pound and UK data and of course, British politics. From there it is the Bank of England before getting our teeth stuck into US inflation data due tomorrow. We ponder its implications for the market and why it matters to the Fed.   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Market Insights Podcast (Episode 351) - MarketPulseMarketPulse
TEST

(EUR/USD) Euro To US Dollar Close To Parity As Europe Is Scared Of Recession And Concerned About Energy

Saxo Bank Saxo Bank 12.07.2022 10:26
Summary:  US equity market weakness on Monday continued overnight in Asia with the dollar strengthening towards parity against the euro in response to the region’s energy crisis and acute recession fears. Bonds also benefited from the current state of unease about the global economic outlook amid high inflation, China’s continued struggle with Covid, and geo-political uncertainties. Precious and industrial metals trade lower with crude oil still range bound ahead of two monthly oil market reports. Key focus being Wednesday’s US CPI print, not least considering it was last month’s print that helped trigger an aggressive FOMC rate hike and the current recession focus.   IMPORTANT NOTICEThe Saxo Market Call podcast is on holiday and will return later this month. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equity futures traded lower overnight after slumping on Monday, with traders positioning for another hot inflation reading on Wednesday and the start of a key earnings season that may provide clues on the direction of the economy. While the weakness was being led by megacaps like Tesla and Apple, it is also worth noting that the trading volumes across the US equity market was the lowest of the year, reflecting the current holiday season where liquidity dries up, thereby raising the risk of higher volatility. Into the earnings season, traders will be watching whether corporate America is resilient enough to pass on higher costs to consumers.  Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) In spite of stronger-than-expected total outstanding aggregate financing (+10.8% YoY) and outstanding RMB loan data (+11.2% YoY) released yesterday after market close, investors’ primary concerns are the renewed worries about potential disruptions to economic activities due to rise in Covid-19 cases and looming recession risks in the U.S. and Europe.  For Monday July 11, mainland China reported 347 new locally transmitted cases, including 59 cases in Shanghai.  Shanghai is doing mass PCR testing today and again on Thursday in nine out of 16 districts.  PCR mass testing and VAT rebates have been putting a lot of pressures on local governments’ budgets and limiting their capacities to stimulate the economy.  While China reported sharply higher passenger car sales (+41% YoY) and EV sales (+130% YoY) in June, BYD (01211.xhkg) fell 11% on speculation that Berkshire Hathaway may be unloading the company’s shares.   EURUSD trades near parity The dollar’s continued push higher against most major currencies has taken it to within a few cents of parity against the euro, a level last seen 20 years ago. The European energy crisis, driven by reduced supplies from Russia, has taken gas prices to demand destructive territory more than ten times above the long-term average. The risk of recession and the ECB’s inability to combat inflation by raising rates, thereby widening interest rate spreads to the Greenback, have all fueled the drop in the common currency. While parity is the focus, the next key area of support is closer to €0.96, the top of the 2000 to 2002 consolidation range. Crude oil (OILUKSEP22 & OILUSAUG22)Crude oil and the fuel market in general has so far managed to find support despite the recession and strong dollar led sell-off across most other commodities, most notably the industrial metal sector. However, with the focus on recession and financial traders positioning themselves accordingly, tight fundamentals have not prevented the sector from taking a hit either. The losses seen in Asia today being driven by a Covid-19 resurgence in China adding to concerns about a global economic slowdown. It highlights the current challenge with traders having to navigate recession fears against a supply side challenged by sanctions and under investments. Focus on monthly oil market reports from OPEC and IEA. Gold and silver clobbered by strong dollar The yellow and white metals continue to struggle amid a surging dollar which has taken the Greenback to decade highs against the euro and the Japanese yen. Overnight, gold slid to a nine-month low with the key focus being the strong dollar worsening the technical outlook which during the latest reporting week to July 5 saw hedge funds cut their net long in COMEX gold to a three-year low, while investors in ETFs have been net sellers in all but one out of the last 14 trading trading sessions. While the dollar continues to rise, the focus on gold-supportive geopolitical and financial market risks is likely to take a back seat. In addition, continued weakness across industrial metals have battered silver to the extent the XAUXAG ratio trades above 90, a two-year high. US Treasuries (TLT, IEF)The US 10-year yield dropped back below 3% after rallying above following Friday’s stronger than expected job report. This despite expectations that Wednesday’s US CPI print may edge closer to 9%, thereby supporting the Federal Reserve’s case for another jumbo rate hike at the July 27 meeting.   What are we watching next? Natural gas focus on Nord Steam 1 and current heatwave European gas trades higher on Tuesday with the Dutch TTF benchmark near €170/MWh or $51/MMBtu. Punitive and demand destructive high prices has strengthened European recession risks while making it very difficult for the ECB to combat surging inflation through hiking rates, thereby supporting the decline in the euro towards parity against the dollar. Reduced supplies from Norway supporting the price at a time of heightened worries that the Nord Stream 1 pipeline will stay shut following annual maintenance that ends around July 20. The fact Russia/Gazprom have decided not to ship additional gas through other pipelines, has been seen as a warning that Russia will further weaponize its gas weapon on Europe in retaliation for the regions support for Ukraine. This at a time where a heat wave across Europe has raised demand for electricity towards cooling. Earnings WatchA preview of Q2 earnings releases over the next two weeks can be read on the trading platform or at analysis.saxo. Economic calendar highlights for today (times GMT1600 – EIA's Short-Term Energy Outlook2030 – API's Weekly Crude and Product Stock ReportDuring the day: OPEC’s Monthly Oil Market Report The week ahead from Saxo’s APAC team: Saxo Spotlight: What’s on investors and traders radars this week? Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – July 12, 2022 | Saxo Group (home.saxo)
How Much Could UK Data Assist GBP Battling With USD And Euro? Were Stocks Supported?

How Much Could UK Data Assist GBP Battling With USD And Euro? Were Stocks Supported?

Alex Kuptsikevich Alex Kuptsikevich 13.07.2022 10:43
A new package of UK macro statistics showed some recovery and exceeded expectations, supporting pound buying, although it did not help the stock market. The monthly economic growth is estimated at 0.5% in May after a decline of 0.2% in April and +0.1% in March. And this is significantly better than the 0.1% expected. Manufacturing showed an impressive jump, adding 1.4% for May - the best growth in 14 months.The service sector grew by 0.4% m/m, contrary to expectations of a 0.1% increase. Equally surprising was the construction sector, where workloads grew by 1.5% mom and 4.8% YoY, coming out of the lockdown pit, renewed historical highs. The foreign trade deficit of 21.4B was higher than the expected 19.8B, but this widening came at the expense of faster growth in imports, although exports also added impressively. The UK’s trade deficit was 24% of trade turnover. These are historically high figures but a marked improvement on the record 30% in January. Much of the credit for the recovery can be attributed to a weaker pound, which has boosted export competitiveness and increased construction activity. The latter can be attributed to the tailwinds from historically low-interest rates, while there are questions about whether the housing boom will continue. A positive batch of data will likely provide the pound only a temporary respite in its decline against the dollar and spur gains against the euro. The EURGBP pair seems to have completed its corrective rebound after a long decline between September 2020 and March 2022. By the end of the year, the pair may fall to the last six years area near 0.8250. In the event of further problems in the Eurozone, the EURGBP could lose support and move towards 0.75, which has not been since the Brexit referendum
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

Forecast For EUR/USD - There Are Chances Of Going Below Parity! Could CPI Move This FX Pair Towards Such Levels?

ING Economics ING Economics 13.07.2022 12:30
It's inflation day in the US, and consensus is centred around a further acceleration in the headline rate and modest slowdown in the core. A 75bp hike by the Fed in July is almost certain. This is also the case in Canada today after New Zealand delivered 50bp this morning. Elsewhere, EUR/USD remains at risk of a break below parity  USD: Another acceleration in headline inflation The dollar gave up a portion of its recent gains yesterday against a pool of currencies which are generally driven by diverging factors. The high-beta Swedish krona, and Australian and New Zealand dollars rose along with the safe-haven yen, in what might have been a position-squaring dynamic. Oil-sensitive currencies (Norway's krone and the Canadian dollar) came under pressure as crude prices plunged. Yesterday's price action in the oil market was peculiar, as the news that OPEC sees crude demand exceeding supply by one million barrels per day seemed to be completely overshadowed by growing recession fears, which pushed Brent back below the $100/bbl mark.   China’s growth concerns likely played a role in the oil slump – although surprisingly did not hit AUD and NZD – as a new rise in Covid cases in Shanghai is fuelling speculation that more restrictive measures will be put in place. The implications of another re-rating lower of China’s economic outlook may end up offering even more support to the dollar across the board. Today, the focus will shift back to US data, as June’s headline inflation is widely expected to have accelerated again. Our economics team expects an 8.7% year-on-year reading, as prices of gasoline, food, shelter and airline fares have all continued to rise. The core rate may instead decelerate to 5.8% from 6.0% YoY. Barring a sizeable contraction in inflation measures, it appears likely that today’s numbers will do very little to dent the market expectations of a 75bp Fed hike in July. Later today, the Fed’s Beige Book will be released. We think the dollar could remain mostly a function of global dynamics today. With China’s Covid numbers rising again, we suspect markets will stay mostly on the defensive side, and the dollar may consolidate around current levels. But if we see a break below parity in EUR/USD (a very big CPI figure could be the trigger), then we should see a ripple effect (dollar positive) across many USD crosses.   EUR: Risks of a break below parity still high EUR/USD heavily tested the parity level yesterday, but to the best of our knowledge, the 1.00000 (unrounded) level did not print. Now, we are back where we were yesterday morning, around 40 pips above parity. After the final release of German inflation numbers this morning, which were in line with the previous reading, we should expect something similar for France and Spain later today, and no market impact. There are no other releases to highlight in the eurozone today, except for the rarely market-moving industrial production figures from the eurozone for May. To be sure, the region’s growth sentiment has remained quite weak after yesterday’s grim ZEW figures. The dollar should remain largely supported today around the US CPI release, and a big jump in inflation (not our base case, but possible) may actually be the trigger for another round of USD appreciation and potentially for a break below parity in EUR/USD. On the European front, the lingering uncertainty around a potential reduction in gas supply from Russia may continue to prevent a recovery in the euro for now. We continue to think that the chances of a break below parity are higher than a material rebound in EUR/USD. If we do see a break lower, we suspect that a further technical drop to the 0.9800-0.9900 area is possible. Elsewhere in Europe, EUR/GBP has traded on the soft side as the euro remains in a fragile position, and UK industrial production figures for May beat expectations this morning. Yesterday, Bank of England Governor Andrew Bailey sounded quite hawkish as he suggested bigger rate hikes will be used if necessary to curb inflation. When it comes to the Tory leadership contest, Rishi Sunak appears to be consolidating his role as the front-runner, although the implications for FX markets appear quite limited for now. EUR/GBP could stay around 0.8400-0.84500 today, but downside risks would be magnified if EUR/USD breaks parity. CAD: 75bp hike by the BoC today The Bank of Canada will announce monetary policy today, and we expect a 75bp rate hike, in line with what is now widely expected to be the next Fed move. Here is our full preview of today’s announcement. The rate decision will be accompanied by the release of updated economic projections, and a press conference by Governor Tiff Macklem. Given the still good economic backdrop – a correction in employment figures last week did not dent the notion of a tight labour market – and the fastest inflation rate in three decades, we see no reason for the BoC to scale down the hawkishness of its policy message today. Indeed, markets are fully pricing in a 75bp move today, and expect around 120bp of additional tightening for the rest of the year. Such rate expectations are definitely not too hawkish, in our view, as we believe that two more 50bp rate hikes in September and October, followed by 25bp in December are warranted. As today’s policy message by the BoC may not dent such rate expectations, we believe the overall impact on CAD should be rather limited or – if anything – slightly positive. At the moment, the prevalence of external factors is not boding too well for CAD as oil prices have come under fresh pressure, even though we expect the loonie to perform better than other oil currencies thanks to a still good domestic backdrop and aggressive BoC tightening. Spikes to the 1.31-1.33 area in the near term are possible in USD/CAD, but we still expect sub-1.25 levels by year-end. Elsewhere in the commodity FX space, the Kiwi dollar was very little impacted by the RBNZ 50bp rate hike. Despite the Bank reiterating its hawkish message about more aggressive rate hikes, we see rising risks of a recalibration in the hawkish tone at the August meeting (or anyway before the end of the year) due to a falling housing market and worsening economic outlook. In any event, NZD/USD should remain driven by external factors for now, and 0.6000 might be tested in the coming weeks. CEE: The region defies the strengthening dollar Currencies in the Czech Republic, Hungary and Poland have now reached our levels for this week. What else will the rest of the week bring for the region? The koruna has stepped out of the shadows and become the star of the week. As we expected, the Czech National Bank likely moved its levels a bit lower and combined with the liquidation of short positions, the koruna reached EUR/CZK 24.40, the strongest level since late April. Today's release of June inflation leaves us hopeful that the koruna still has room to strengthen further towards 24.30. However, early data shows that in last week's FX intervention, the CNB spent as much as in May and June combined. In addition, we think the August CNB meeting will renew the pressure on the koruna to weaken. Thus, it is only a matter of time before intervention becomes too costly. Meanwhile, the National Bank of Hungry delivered an interest rate hike yesterday as promised, which helped the forint for a while. Although the interest rate differential has reached new record levels and the NBH is the most open central bank in the region to further rate hikes, we believe the forint will soon return closer to the 410 EUR/HUF level and it remains our least favourite currency in the region. On the other hand, in Poland, the market has restored some of its hawkish expectations after misreading Governor Adam Glapinski's speech. In our view, this opens up room for the zloty to erase some of its current losses and return closer to 4.70. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
FX Daily: Testing the easing pushback

FX: GBP/USD And EUR/USD Can Be Really Tempting! Let's Have A Technical Look!

InstaForex Analysis InstaForex Analysis 13.07.2022 15:47
Relevance up to 12:00 2022-07-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher timeframes During testing, the level of 1.0000 appeared on the daily timeframe, the result of the interaction is being formed. Bulls are still interested in slowing down with a transition to consolidation or rebound. Having realized this, they will be able to count on the further development and strengthening of their moods. The resistances of the higher timeframes are now still located quite far from the price chart and are of little relevance so far. The nearest resistance is the daily short-term trend at 1.0243. The breakdown of the met support at 1.0000 will open opportunities for bears to move to the next benchmark—the local low of 2000 (0.8225).     H4 – H1 On the lower timeframes, the pair is in the upward correction zone, now trying to overcome the attraction and resistance of the central pivot point of the day (1.0037). With the development of the correction, the resistance of the weekly long-term trend (1.0118) will be of primary importance since this level is responsible for the current balance of power in the lower timeframes. In case of exit from the correction zone and continuation of the decline, the support of the classic pivot points (0.9999 – 0.9963 – 0.9925) will serve as reference points within the day. *** GBP/USD     Higher timeframes The pair continued to decline yesterday, but the final nature of the daily candle has the prerequisites for slowing down and the emergence of a correction. It is important for bulls in the current situation to rise and gain a foothold above the 1.2000 mark. Having seized the daily short-term trend (1.1992), the bulls will be able to count on the continuation of the rise to new benchmarks, while their most important task, in this case, will be the elimination of the daily death cross (its final levels today are 1.2203 – 1.2295) and gaining support for the weekly short-term trend, which is now at 1.2237. The continuation of bearish activity in the current environment is still focused on the support area of 1.1411 (the local low of 2020).     H4 – H1 The slowdown led to the development of a correction in the lower timeframes. Bulls have taken over the central pivot point of the day and are now using it as support (1.1869). Further, the conquest and reversal of the weekly long-term trend (1.1941) is important. The classic pivot points R2 (1.1977) and R3 (1.2038) can serve as additional upward reference points today. The return of bearish sentiment within the day will bring back the relevance of the support of the classic pivot points (1.1822 – 1.1761 – 1.1714). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/316063
Sustainability-Linked Products: Navigating Growth and Challenges for the Future

FX: GBP/USD (British Pound To US Dollar) - Possible Scenarios

InstaForex Analysis InstaForex Analysis 14.07.2022 10:57
Relevance up to 07:00 2022-07-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1). The price may move downward from the level of 1.1885 (close of yesterday's daily candle) to the target of 1.1806, the lower fractal (red dotted line). When testing this level, the price may continue to move downward with the target at 1.1778, the support level of the downward channel (bold red line). Upon reaching this level, the price may move up.     Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – down; Volumes – down; Candlestick analysis – down; Trend analysis – down; Bollinger bands – down; Weekly chart – down. General conclusion: Today the price may move downward from the level of 1.1885 (close of yesterday's daily candle) to the target of 1.1806, the lower fractal (red dotted line). When testing this level, the price may continue to move downward with the target at 1.1778, the support level of the downward channel (bold red line). Upon reaching this level, the price may move up. Alternative scenario: from the level of 1.1885 (close of yesterday's daily candle), the price may move down with the target of 1.1806, the lower fractal (red dotted line). When testing this level, an upward pullback is possible with the target of 1.18820, the 14.6% retracement level (red dotted line). Upon reaching this level, the price may move up.   Read more: https://www.instaforex.eu/forex_analysis/316135
The Pound (GBP) Will Probably Continue To Move Sideways

What Helps GBP (British Pound)? Canadian Dollar (CAD) Influenced By Interest Rate Hike | Orbex

Jing Ren Jing Ren 14.07.2022 11:06
GBPUSD sees limited bounce The pound finds support from better-than-expected GDP growth in May. The pair is having a hard time holding onto its rally attempts. Bearish sentiment means that rebounds have rather been opportunities for trend followers to sell into strength. The RSI’s double bottom in the oversold area caught some buyers’ attention. But strong selling could be expected between the psychological level of 1.2000 and 1.2050. 1.1810 is a fresh support and its breach could trigger a new round of liquidation towards 1.1600. USDCAD hits resistance The Canadian dollar soared after the Bank of Canada surprised the market with a 1% hike. The greenback consolidated its gains after it broke above June’s peak at 1.3070. 1.2940 at the base of a previous bullish breakout has offered some support, though its retest is a sign of hesitation. 1.3050 is the last hurdle ahead and a bullish breakout may attract momentum buyers and resume the uptrend. On the downside, a fall below 1.2940 may cast doubt on the bulls’ commitment and deepen the correction to 1.2840. XAUUSD attempts to rebound Gold recouped some losses after the US dollar bulls took profit following inflation data in June. The price action has struggled to stay above September 2021’s lows at 1723. A bullish RSI divergence showed a slowdown in the sell-off. A rally above 1750 would act as confirmation and prompt sellers to cover their bets, paving the way for an extended recovery. Then 1805 along the 30-day moving average could be within reach. A drop below 1710 may attract more bears and send the metal to August 2021’s lows near 1682.
USD/JPY Tops Majors in Past Month; Strong Verbal Intervention from Japan's Ministry of Finance as Resistance Nears

Forex: EUR To USD - It's Time To Discover Analysis And Tips!

InstaForex Analysis InstaForex Analysis 14.07.2022 11:26
Relevance up to 09:00 2022-07-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Analysis of transactions in the EUR / USD pair EUR/USD tested 1.0020 on Wednesday. At that time, the MACD line was just starting to move below zero, so selling was quite appropriate. However, there was no downward movement, so short positions led to losses. Some time later, euro tested 1.0064, but this time the MACD line was far from zero. That situation limited the upside potential of the pair. Another test of the level occurred during the time that the MACD line was in the overbought area. This led to more than a 60-pip increase in the pair, which offset the previous losses.     Industrial output and inflation reports in the Euro area were ignored by markets as traders were more focused on the June CPI data in the US. The latter jumped to 9.1%, raising demand for the dollar ahead of further policy decisions by the Fed. There are no reports that could support euro today, so expect EUR/USD to fall along the trend. In the afternoon, the US will release a report on producer prices, which is expected to show a slight slowdown amid declining energy costs. Following that are weekly jobless claims data, as well as a speech from Fed member Christopher Waller. For long positions: Buy euro when the quote reaches 1.0032 (green line on the chart) and take profit at the price of 1.0081 (thicker green line on the chart). There is a chance for a rally today, but only in the afternoon as there are no good reasons for growth during the European session. And take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0000, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0032 and 1.0081. For short positions: Sell euro when the quote reaches 1.0000 (red line on the chart) and take profit at the price of 0.9964. Pressure will continue as there are no reasons for growth in risky assets at the moment. Also, strong statistics on the US will return the demand for dollar. And take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0032, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0000 and 0.9964.     What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Read more: https://www.instaforex.eu/forex_analysis/316151
Thursday's Bank's of England decision may be record-breaking!

FX: Can We Expect A Decrease Of GBP/USD? What Are The Tips For British Pound To US Dollar?

InstaForex Analysis InstaForex Analysis 14.07.2022 12:53
Relevance up to 09:00 2022-07-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Analysis of transactions in the GBP / USD pair GBP/USD tested 1.1891 on Wednesday. At that time, the MACD line was just starting to move below zero, so selling was quite appropriate. However, the decrease was limited because after moving down by just 10 pips, the pair reversed and went to 1.1940. Sometime later, the pair tested 1.1891, also at a time when the MACD had just started to move below zero. This signal was more successful as it led to more than 50 pips price decrease.     UK's data on industrial production, GDP and trade balance helped pound rise yesterday morning, albeit not as much as some would like. Then, in the afternoon, it fell because traders focused more on the June CPI data in the US, which jumped to 9.1%, raising demand for the dollar ahead of further policy decisions by the Fed. There are no reports that could support pound today, so expect GBP/USD to decline even more. In the afternoon, the US will release a report on producer prices, which is expected to show a slight slowdown amid declining energy costs. Following that are weekly jobless claims data, as well as a speech from Fed member Christopher Waller. For long positions: Buy pound when the quote reaches 1.1875 (green line on the chart) and take profit at the price of 1.1950 (thicker green line on the chart). Although there is little chance for a rally today, traders can still take long positions when the MACD line is above zero or is starting to rise from it. It is also possible to buy at 1.1842, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1875 and 1.1950. For short positions: Sell pound when the quote reaches 1.1824 (red line on the chart) and take profit at the price of 1.1774. Pressure will return if latest data indicate growing inflationary pressure in the US. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.1875, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1824 and 1.1774.     What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Read more: https://www.instaforex.eu/forex_analysis/316157
UK Budget: Short-term positives to be met with medium-term caution

Euro To US Dollar (EUR/USD) And GBP/USD - What Do We Learn From Technical Analysis

InstaForex Analysis InstaForex Analysis 14.07.2022 13:03
Relevance up to 10:00 2022-07-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher timeframes Interaction with 1.0000 support continues. The emerging inhibition has formed. As a result, the situation in its conclusions and expectations has not changed significantly. Bears are interested in passing the level and consolidating below. At the same time, it is desirable for the opponent that the deceleration becomes not just a pause before the next stage of decline but leads to more significant results and the beginning of a new corrective rise. The nearest resistance today is located at 1.0231 (daily short-term trend).     H4 – H1 The pair continues to trade in the correction zone on the lower timeframes, limited by key levels. Key levels are bearish today, consolidating around 1.0059–92 (central pivot of the day + weekly long-term trend). Consolidation above will change the current balance of power in favor of a possible increase in bullish sentiment. The succeeding upward reference points within the day will be the resistance of the classic pivot points (1.0121 – 1.0184 – 1.0246). The exit from the correction zone and the continuation of the downward trend will return the relevance to the downward benchmarks of the current day—the support of the classic pivot points (0.9996 – 0.9934 – 0.9871). *** GBP/USD     Higher timeframes The pair traded in the daily correction zone for the past day. The nearest boundaries of the current movement are Tuesday's low (1.1807) and the resistance area of 1.1986 – 1.2000 (daily short-term trend + weekly long-term trend). Consolidation above or below these boundaries will allow us to consider new perspectives.     H4 – H1 At the moment, the pair remains in the correction zone. The correction has been supported for a long time by the first classic pivot point of the day—S1 (1.1819). Further, S2 (1.1752) and S3 (1.1678) can serve as reference points for the decline. The key levels of the lower timeframes are now holding back the development of the correction and are located today at 1.1893 (central pivot point of the day) and 1.1932 (weekly long-term trend). Consolidation above will change the current balance of power in favor of strengthening bullish sentiment. Further reference points for the rise within the day today will be the resistance of the classic pivot points (1.1960 – 1.2034 – 1.2101). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/316180
Eurozone Bank Lending Under Strain as Higher Rates Bite

Is FX Market Turbulent!? Let's Look At Headline-Topping EUR/USD, GBP/USD, USD/JPY And Other Pairs

Jeffrey Halley Jeffrey Halley 14.07.2022 13:35
US dollar in choppy waters Currency markets had another choppy overnight session, which ultimately ended up sideways again, despite US inflation unexpectedly rising. EUR/USD traded to parity but managed to finish higher at 1.0040, a pattern repeated across most major currencies. With the US dollar looking overbought on short-term indicators as well, I suspect that the odds of a US dollar correction lower have risen sharply, especially as Asian central banks and others have rushed to tighten monetary policy this week. I could see the correction persisting in some shape or form until the FOMC meeting later this month. The dollar index traded in a 100-point 107.50 to 108.50 range overnight but ultimately finished just 0.13% lower at 108.02. It has risen by 0.23% to 108.27 in Asia, led by a much weaker Japanese yen. Resistance is at 108.50 and 110.00. Support is at 107.50 and then the 1.0585 breakout point, followed by 1.0500. ​ The relative strength index indicator (RSI) is overbought, signalling a potential correction lower by the US dollar. EUR/USD traded through 1.0000 to 0.9998 overnight, but held this level once again, and rose back to finish the day 0.21% higher at 1.0058. In Asia, it has eased to 1.0035. A clean break of 1.0000 is likely to trigger a sharp move lower as stop-losses and algos kick in, but it is significant that it has held this level for two days in a row, although its rallies have been limited. ​ The oversold RSI and underwhelming post-inflation performance by the US dollar suggests the euro could be tracing out a low for now and a correction back towards 1.0200 is possible. EUR/USD has support at 1.0000 and then 9900/25. It has resistance at 1.1020, the overnight high, and then 1.0200. GBP/USD traded as high as 1.1965 overnight before closing unchanged at 1.1890. It has fallen to 1.1870 in Asia but looks to be trying to trace out a temporary low at 1.1800, which is initial support. Resistance is at 1.1965 and then 1.2060 and 1.2200. USD/JPY continued rallying overnight as US short-dated yields rose, finishing 0.41% higher at 137.45. In Asia, USD/JPY has continued rallying quite aggressively, rising 0.44% to 138.05. With a procession of central banks capitulating and hiking rates aggressively in the past 24 hours, Japan’s super-easy policy leaves it an outlier and that seems to be weighing on the yen. ​ USD/JPY’s next resistance is at 140.00, with support at 136.00, 134.25 and 132.00. I expect the “watching markets closely” noise to increase from Tokyo today and being long above 138.00 could be a dangerous trade in the shorter term. AUD/USD was unchanged at 0.6755 overnight, quite the surprise, given the US inflation data and another reason to think a greenback correction lower is imminent. ​ In Asia, super-strong employment data had lifted rate hike expectations and pushed AUD/USD 0.30% higher to 0.6775. It also looks like some decent AUD/JPY buying is going through. It has resistance at 0.6800 and 0.6850, with support between 0.6700 and 0.6730. NZD/USD is unchanged at 0.6130 again today, suggesting increased downside risks post the RBNZ yesterday. AUD/NZD buying post the Australian data is also capping NZD/USD gains. Asian currencies ranged overnight once again and have edged lower in Asia as some US dollar strength had returned. Overall, though, the response by Asian FX has been relatively muted post the US data and the moves seen by the MAS and BSP this morning. That said, USD/MYR continues to creep closer to 4.4500, USD/IDR to 15,000.00 and USD/INR and USD/KRW remain close to recent highs. The SGD and PHP have outperformed today as both central banks sprung unscheduled monetary tightening on markets. With South Korea, Singapore and the Philippines tightening this week, the pressure will be increasing on other regional currencies to follow suit as Asian central banks break ranks on inflation. Most notably, the INR, IDR and MYR look the most vulnerable and the recent slump in commodity prices will be another headwind for Indonesia and Malaysia. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US dollar consolidates - MarketPulseMarketPulse
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

BoC Move Was Unexpected And Record-Breakin A Technical Look At USD/CAD

Kenny Fisher Kenny Fisher 14.07.2022 14:56
The Canadian dollar has posted sharp losses on Wednesday. In the European session, USD/CAD is trading at 1.3132, up 1.18%. BoC shocks with 100bp salvo The Bank of Canada has been in an aggressive mode, but nobody was expecting the massive 100bp hike on Wednesday, the largest rate increase in 24 years. The markets had priced in a 75bp move, and the Canadian dollar responded with modest gains. The cash rate now stands at 2.5%. The massive increase shows that the BoC is pulling out all the stops in order to curb hot inflation, which has hit 7.7%, a 39-year high. The BoC is well aware that over-tightening could tip the economy into a recession, but this is the price to pay to ensure that inflation does not become entrenched through wage gains and price increases. Consumers and businesses are expecting high inflation to persist, and this can become a self-fulfilling prophesy and lead to even higher inflation. Along with the huge rate hike, the BoC had some grim news. The central bank raised its inflation forecast, which is expected to hit 8 per cent in the second and third quarters of this year. Growth is forecast to fall to 3.5% this year, down from 4.2% previously. The Canadian dollar wasn’t able to hold onto yesterday’s gains and has dropped sharply today. Investors remain risk-averse after the US inflation report, as headline CPI jumped to 9.1% YoY, up from 8.8%. Core CPI dropped a notch from 6.0% to 5.9% but this didn’t ease the disappointment that the inflation peak remains as elusive as ever. The inflation report has dramatically elevated the likelihood of a massive 100bp, which according to the CME’s FedWatch stands at 84% – less than a week ago, the likelihood of a 100bp move was a mere 7%. USD/CAD Technical USD/CAD has broken above resistance at 1.3068 and 1.3129. Above, there is resistance at 1.3199 There is support at 1.2953 and 1.2822 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar slides post-BoC - MarketPulseMarketPulse
The RBA Surprised With A Smaller 25 bp Hike , Sterling (GBP) Rose, The USD Has Weakened

FX:AUD/USD Chart Shows A Long, Gradual Slide. RBA Is Fuelled With Strong Australian Labour Market Data.

Kenny Fisher Kenny Fisher 14.07.2022 15:11
Australian employment sparkles It has been a week of the good and the bad/ugly from Australian releases. The employment report for June, released earlier today, improved from May and easily beat expectations. The economy created 88.4 thousand jobs, up from 60.6 thousand in May and well above the 30.0 thousand estimate.  The unemployment rate dropped to 3.5%, down sharply from 3.9% in May (3.8% exp.). This is good news for the RBA, which is relying on a robust labour market to bear the weight of an aggressive rate policy. The RBA has raised the cash rate to 1.35%, with more hikes on the way. The relatively low cash rate hasn’t had much effect on soaring inflation, which surged to 5.1% in the first quarter. Australia releases Q2 inflation on July 27th, the same day as the Federal Reserve policy meeting. The RBA has said that inflation could top 7%, which would exacerbate the current cost of living crisis. Higher inflation has taken a bite out of business and consumer confidence, which headed southward earlier in the week. Westpac Consumer Confidence index for July came in at -3.0%, its ninth decline in 10 months. As well, NAB Business Confidence for June slowed to 1, down from 6 in May. Consumers and companies don’t have much confidence in the economic outlook, and that can translate into decreased spending in a time of uncertainty, which would be bad news for the economy. Inflation releases tend to grab the headlines, especially with inflation going up and up. However, the RBA is no less concerned with inflation expectations, as inflation will be even harder to curb if consumers and businesses expect inflation to continue to rise and rush to make purchases, thus exacerbating the pressure on prices. Earlier in the week, Melbourne Institute Inflation Expectations remained high at 6.3%, although this was an improvement from the previous reading of 6.7%. . AUD/USD Technical There is resistance at 0.6782 and 0.6839 0.6706 is a weak support line, followed by 0.6649 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie shrugs off superb jobs report - MarketPulseMarketPulse
Chinese Data Shakes Dollar, US Stocks Higher Amid Disinflation Concerns and Bank Earnings Awaited

Technical - FX Pairs: US Dollar To Japanese Yen, AUD/JPY, EURJPY, British Pound To Japanese Yen

Saxo Bank Saxo Bank 14.07.2022 15:38
Summary:  Covered FX pairs: AUDJPY, EURJPY, GBPJPY and USDJPY AUDJPY is breaking out bullish of its falling wedge like pattern. If it closes above the upper falling trend line AUDJPY is set for higher levels. Resistance at 94.80 and 95.60.However, there is no divergence on RSI indicating higher levels above June highs 96.88. A move to around 99 is not unlikely .To demolish this bullish scenario a close below the upper falling trend line is needed. Source: Saxo Group EURJPY: The break below support at 137.83 seems to have been false. If EURJPY closes above for the second day it is post likely cancelling the Double Top picture. If EURJPY closes above the medium term rising trend line the RSI indicator will have broken above its falling trendline and most likely also above 60 i.e. bullish sentiment. If that scenario plays out EURJPY is back in bullish territory and could test previous highs.Resistance at 142.50. A close below 136.85 and EURJPY is likely to collapse to around 133. Source: Saxo Group GBPJPY stays above its short term rising trend line and seems to be set for a re-test of previous peaks around 168.45. RSI has broken its falling trendline supporting the bullish picture. A close below 161.80 will reverse that. Source: Saxo Group USDJPY moving higher and could break above its upper rising trend line in what looks like a rising wedge. If that occurs the wedge pattern is demolished and USDJPY is set for 142. See in-depth analysis of USDJPY here: https://www.home.saxo/content/articles/forex/ta-usdjpy-11072022 Source: Saxo Group Source: Technical Update - JPY weakening against all currencies. Expect more of that | Saxo Group (home.saxo)
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

FX: What Could Drive USD/CAD (US Dollar To Canadian Dollar)?

Kenny Fisher Kenny Fisher 13.07.2022 21:30
USD/CAD is trading quietly at the 130.00 line, with a busy day ahead. The Bank of Canada holds its rate meeting and the US posts the June inflation report. Bank of Canada could deliver 75bp salvo The Bank of Canada is expected to press the pedal to the gas later today, with the markets expecting a supersize 75bp hike. This would bring the cash rate to 2.25%. Similar to the Fed, the BoC is showing that it can be aggressive with its rate policy as it pulls out all the steps to curb enemy number one, which is runaway inflation. In May, Canada’s inflation rate rose to 7.7%, a four-decade high. Inflationary pressures have been broad-based, raising fears of inflation expectations becoming unanchored. A massive 75bp move by the BoC should give a boost to the Canadian dollar, but the gains could be modest if the market has fully priced in the move. As well, today’s US inflation report could affect the direction of USD/CAD in the North American session. In the US, the June inflation report is being eagerly anticipated by the financial markets. Headline inflation is expected to rise to 8.8% YoY, up from 8.6% in May. Core CPI is expected to ease to 5.8%, down from 6.0%. If the numbers are higher than expected, market reaction will be negative and the dollar should get a boost. Conversely, if inflation is lower than expected, it will raise hopes that inflation has peaked, raising risk sentiment and likely pushing the dollar lower. The inflation report could play an important role in Fed decision-making ahead of the July 27th rate meeting. The Fed is widely expected to hike by 75bp at the meeting, but could consider a smaller hike if inflation is weaker than expected, which would make the US dollar less attractive to investors. . USD/CAD Technical USD/CAD has support at 1.2953 and 1.2822 There is resistance at 1.3068 and 1.3199   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar eyes BoC, US inflation - MarketPulseMarketPulse
EUR/USD Pair Has Potential For The Downside Movement Today

FX: EUR/USD (Euro To US Dollar) - Analysis, Signals And COT Report

InstaForex Analysis InstaForex Analysis 15.07.2022 09:32
Relevance up to 05:00 2022-07-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD 5M     The EUR/USD pair made a successful attempt to overcome the level of 1.0000 on Thursday. It spent very little time below this level, since, as we assume, Take Profit orders or pending long positions again worked, so the euro ended the day above the level of 1.0000. However, in principle, everything is going according to the plan that we have already voiced. Namely: the euro will continue to fall. There were no important macroeconomic reports or fundamental events on Thursday. It is hardly possible to consider the report on the number of applications for unemployment benefits as such, the value of which, moreover, almost coincided with the forecast. Nevertheless, as we can see, volatility remains high, and the market does not give up attempts to move further down. Only one thing is bad: the bulls have a strong resistance at the current levels, so the pair starts to ride on the "swing". There were four trading signals on Thursday, and all of them were near the 1.0000 level. However, there was no flat during the day, rather, on the contrary. Recall that there are very few extreme levels at current price values, and the Ichimoku indicator lines are located much higher. The first sell signal was formed when the price settled below 1.0000. Down after its formation, 33 points were passed, so traders hardly received profit on this deal. But there could not be a loss either, since Stop Loss should have been set to breakeven. The next buy signal was formed in a couple of hours, and after its formation, the price managed to go up more than 20 points, so in this case Stop Loss should have been set to break even. All subsequent signals should be ignored, since the first two turned out to be false. COT report:     The latest Commitment of Traders (COT) reports on the euro over the past six months have raised a huge number of questions. The chart above clearly shows that they showed a blatant bullish mood of commercial players, but at the same time, the euro was also falling. At this time, the situation has changed, and NOT in favor of the euro. If earlier the mood was bullish, but the euro was falling, now the mood has become bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions increased by 7,700, and the number of shorts in the non-commercial group increased by 14,000. Accordingly, the net position decreased again, by almost 7,000 contracts. The mood of big players remains bearish and has even increased slightly in recent weeks. From our point of view, this fact very eloquently indicates that at this time even commercial traders do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 17,000. Therefore, we can state that not only the demand for the US dollar remains high, but also the demand for the euro is quite low. This may lead to a new, even greater fall of the euro. In principle, over the past few months or even more, the euro has not been able to show even a tangible correction, not to mention something more. The highest upward movement was about 400 points. We recommend to familiarize yourself with: Overview of the EUR/USD pair. July 15. Europe is preparing for a cold winter. Overview of the GBP/USD pair. July 15. Rishi Sunak is the favorite in the race for the post of British prime minister. Forecast and trading signals for GBP/USD on July 15. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H     The downward trend continues on the hourly timeframe. The pair is still trying to start a tangible upward correction, but so far it has failed. The bears are systematically pushing the euro further down, not paying much attention to the almost complete absence of macroeconomic and fundamental backgrounds. We highlight the following levels for trading on Friday - 1.0000, 1.0072, 1.0340-1.0366, 1.0485, as well as the Senkou Span B (1.0243) and Kijun-sen (1.0068) lines. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. There are no important publications or events scheduled for July 15 in the European Union. Three secondary reports will be released in America today - retail sales, industrial production and consumer sentiment index from the University of Michigan. We believe there will be little or no response to these reports. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Read more: https://www.instaforex.eu/forex_analysis/316232
GBP: Strong June Retail Sales Spark Sterling Rally

Italy Affected By Mario Draghi's Resignation. Forex: What's The Forecast For GBP/USD And EUR/GBP?

ING Economics ING Economics 15.07.2022 10:07
We identify four scenarios for Italian politics as a new government crisis exploded yesterday: the risks for BTPs and the euro are non-negligible. Elsewhere, bank earnings and data will remain in focus in the US today amid mounting global concerns (fuelled by China's grim GDP print). The balance of risks for the dollar remains tilted to the upside Italy's Prime Minister Mario Draghi USD: Balance of risks tilted to upside Global risk sentiment continues to be challenged by adverse developments across the world. The US banking earning season has kicked off on the wrong foot, China reported the weakest growth numbers (0.4% YoY, vs 1.2% expected) in more than two years, new Covid variants are boosting infection and hospitalisation numbers globally, Italy is facing a new political crisis and markets keep flirting with the idea of a 100bp Fed hike in July. With fears of global recession adding pessimism to the overall picture, we struggle to see a material recovery in sentiment for now. European equity futures are showing signs of a rebound this morning, but that seems largely related to hopes that Mario Draghi may stay as Italian Prime Minister. US stocks could continue to feel the strains of multiplying downside risks today. Equity instability may continue to put a limit to any dollar correction for now, and further upside risks to the greenback may come from a further repricing higher in Fed’s rate expectations. Our view is that there isn’t enough reasoning to back a 100bp move in July, but the Fed’s Chris Waller (a known hawk) suggested that this is not off the table, and we cannot exclude that markets may continue to speculate on such prospect. We’ll hear from another big FOMC hawk, James Bullard, today, as well as from the more moderate Raphael Bostic and normally more dovish Mary Daly. A number of US data releases will also be in focus today. The University of Michigan indices – and in particular the inflation gauges – will be closely watched, but Empire Manufacturing for July, retail sales, and industrial production for June can also have some market impact. A stabilisation in the dollar around current levels is possible today, but we continue to highlight: a) limited scope for a correction; b) a balance of risks still tilted to the upside in the near term. Expect more volatility around EUR/USD parity to keep affecting other USD-crosses. EUR: Italian political crisis in focus EUR/USD continued to hover around parity, and to show elevated intra-day volatility. This looks unlikely to change for now unless we see the pair rebound decisively above 1.0150 (safely away from parity) or drop to the 0.9800-0.9900 area. We think the latter scenario is more likely given the still grim macro picture (yesterday’s revised EU Commission estimates were a case in point) and lingering uncertainty around the Russia-EU spat on gas supply. Adding to the eurozone’s recent woes has been a sudden return of Italian political risk. In this article, we discuss four scenarios for the country’s political crisis, along with the expected impact on BTPs and the euro. In two of these scenarios, Mario Draghi leaves the political picture – either by being replaced as Prime Minister or if early elections are announced. For now, the President of the Republic has asked Draghi to work on a new stable majority, and his staying as PM appears to be a slightly more likely scenario despite a quite volatile situation. He faces a new confidence vote on Wednesday. The market implications of Draghi leaving would be non-negligible. Italian sovereign spreads have embedded some sort of “Draghi put”, and are surely at risk – especially in the event of snap elections – of widening significantly and calling for another (far from granted) intervention by the ECB. No ECB protection could see the 10-year BTP-Bund spread widen to above 250bp levels. In FX, EUR/CHF has the strongest correlation with sovereign spreads, and we could see further pressure on the pair. EUR/USD appears primarily driven by other factors (macro picture, Russian gas supply, Fed pricing), but history tells us that political risk can cause a significant build-up in the risk premium on EUR/USD, so that’s a threat not to be ignored. There are no market-moving data releases in the eurozone today. GBP: TV debate for Tory candidates It will be interesting to see the first TV debate between the remaining five candidates in the Tory leadership contest today, mainly to start gauging what positions on policy and Brexit can be associated with each contender. Rishi Sunak has remained the front runner, while the potentially most pro-Brexit of the leading group, Liz Truss, looks set to receive a vote boost from the endorsement of Suella Braverman, who dropped out of the race yesterday. This could put Truss as the second-most voted candidate, ahead of Penny Mordaunt, in the next ballot scheduled for early next week. Away from political developments, the UK data calendar is very quiet and there are no scheduled Bank of England speakers today. Cable looks at risk of moving to 1.1600-1.1700 in the coming days on the back of USD strength, while EUR/GBP may keep hovering in the 0.8400-0.8500 area for longer – unless EUR-specific woes trigger another break lower. AUD: Big divergence between external and internal drivers The Australian dollar is currently looking at a significant divergence between internal and external drivers. The latest jobs numbers data came in very strong, as unemployment dropped to the lowest on record (3.5%) thanks to a sharp increase (88k) in employment, driven mostly by full-time jobs, which generally implies a greater impact on disposable incomes than part-time hirings. The RBA takes the labour market into consideration a lot, and we think the latest numbers might pave the way for even larger than 50bp rate hikes. Surely, the 27 July CPI numbers will be a key input. Despite all this, AUD has remained under pressure this week, and that mostly relates to the currency’s much greater reliance on external factors, which arguably look grimmer by the day. China (Australia’s number one export market) may face new lockdowns, and the latest data showed a larger-than-expected slowdown. That out shadowed the positive news that Beijing may end its ban on Australian coal. At the same time, iron ore prices continued to be under significant pressure, having now dropped below $100 on demand concerns. When adding a still strong USD and unstable risk appetite, we struggle to see an imminent rebound in AUD/USD. We could instead see a further drop to the 0.6600 mark over the coming days. Read this article on THINK TagsSterling Italy Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
JPY: Assessing the FX Intervention Zone and Market Conditions

Volatile Forex Market: How Has EUR/USD Perfomed Recently? What About GBP/USD (FX Cable) And USD/JPY?

Ed Moya Ed Moya 15.07.2022 11:17
Recession jitters boost US dollar Currency markets had a roller-coaster session with European and US investors piling into haven US dollars from the get-go on recession fears. Weak bank earnings were another headwind and at one stage EUR/USD had fallen nearly 100 points to 0.9950. Only soothing comments from two Fed officials placing their markers in team 0.75% allowed some calm to return. The US dollar gave back some of its gains but still finished broadly higher. Asian markets are notable for the complete lack of volatility today, and seem content to ride out the week ahead of US retail sales data this evening. The dollar index finished 0.57% higher at 108.55, where it remains in Asia today. Resistance is at 109.30, the overnight highs, and 110.00. Support is at 107.50 and then the 1.0585 breakout point, followed by 1.0500. ​ The relative strength index indicator (RSI) is overbought, signalling a potential correction lower by the US dollar. EUR/USD collapsed to near 0.9950 overnight, with stop-losses kicking in after a clean break of 1.0000. However, rate hike comments from Fed officials allowed the single currency to claw back most of those losses, finishing 0.37% lower for the session at 1.0020, an impressive result. ​ It has managed to edge higher to 1.0030 in Asia. The oversold RSI and underwhelming post-inflation performance by the US dollar suggests the euro could be tracing out a low for now and a correction back towards 1.0200 is possible. EUR/USD has support at 0.9900/25. It has resistance at 1.1020, the overnight high, and then 1.0200. GBP/USD followed the euro overnight, finishing 0.55% lower at 1.1830, where it remains in Asia. It has support at 1.1760 and resistance is at 1.1965, followed by 1.2060 and 1.2200. USD/JPY continued rallying overnight as US short-dated yields rose, finishing 1.40% higher at 138.95, where it remains in Asia. Having traded as high as 139.30 overnight the yen is the most obvious loser in the forex space of the combination of recession fears and interest rate differentials. USD/JPY’s next resistance is at 140.00, with support at 137.40 and 136.00. A soft US retail sales number could be the catalyst for a long overdue downside correction. Asian currencies retreated overnight, led once again by the Korean won and Thai baht. Ominously, both the Singapore dollar and Philippine peso gave back almost all of their gains from yesterday after their central banks unexpectedly tightened monetary policy. USD/MYR has risen through 4.4500 today, and USD/CNY rose back above 6.7600 as well. It looks like central banks in India and Indonesia are capping gains on USD/INR and USD/IDR for now. The inability of Asian FX to rally on US dollar weakness like the DM-space overnight suggests that more downside lies ahead, especially if strong retail sales in the US tonight put a 1.0% Fed hike back on the agenda. Next week, the onus will be on Bank Indonesia to raise policy rates or 15,000.00 may become its new starting handle. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Risk aversion lifts the US dollar - MarketPulseMarketPulse
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

FX: EUR/USD - Sailing In "Uncharted" Waters. Fed Is Expected To Choose 100bp Variant

InstaForex Analysis InstaForex Analysis 15.07.2022 14:31
Relevance up to 10:00 2022-07-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The euro-dollar pair yesterday updated another price low, reaching 0.9953. In general, new lows in the foreseeable future will be limited to 20 years ago, since in 2002, the EUR/USD pair traded in the range of 0.85–1.05. Therefore, one and a half thousand points down from the parity level, so to speak, were "staked out" in 2002. However, at the moment, these circumstances are symbolic. In practical terms, the more pressing question is: can the EUR/USD bears settle below parity, and if so, how far will they go from the 1.0000 mark? Today, we can say that the sellers are cautiously probing the "uncharted" price territory, not risking staying within the 99th figure. And although each new attempt to go below 1.0000 looks more confident than the previous one, it is still risky to open short positions below the parity level. Figuratively speaking, traders make a circle, "capturing" the area of the 99th figure, and then come back, closing the trading day above the parity zone. We see this circle gradually expanding: at first, sellers reversed a step away from parity, then at 0.9998. Yesterday, the price low was fixed at 0.9953. And yet, it is still premature to announce the development of a downward movement: for this, the bears need at least to gain a foothold below the key support level.     Here it is necessary to highlight an important point: the downward trend for the pair is still in force—the only question is how far sellers can go down from the 1.0000 target. Traders are justifiably afraid of "catching the price bottom," so they act extremely cautiously within the 99th figure. But in general, there are no prerequisites for a large-scale price reversal today and are not expected. The fundamental picture clearly favors the dollar, while the euro is under the yoke of economic and geopolitical problems. Therefore, EUR/USD buyers can now only count on corrective upward waves. It is noteworthy that EUR/USD buyers actually ignored Bloomberg's information published today that the ECB will present an unlimited bond buying tool next week, which will help markets "adjust to sharper and faster interest rate hikes than previously thought." Despite the hawkish nature of this message, the euro remained under pressure. Rumors have been circulating on the market for several weeks that the ECB may raise rates by 50 basis points in July. But, firstly, such assumptions are still the subject of discussion, and secondly, even if the members of the European regulator decide to take this step, they will still be behind—at least with respect to the Fed. The fact is that after the release of data on the growth of the consumer price index in the United States and the producer price index, hawkish expectations regarding the Fed's further actions have significantly increased in the market. Market participants estimate the probability of a 100-point increase following the results of the July meeting at 88%. Such a step would be unprecedented. Therefore, the very fact that this scenario is being discussed in a practical plane allows the dollar to stay afloat and dominate. Moreover, most economists surveyed by Bloomberg still doubt that the European Central Bank will deviate from the previous plan. In their opinion, the deposit rate, which currently stands at -0.5%, will be increased by 25 basis points in July and 50 points in September. After that, according to general forecasts, at each subsequent meeting, until the March meeting in 2023, the ECB will increase the rate in 25-point increments until it reaches 1.25%. All this suggests that the dollar in the foreseeable future will retain its attractiveness in tandem with the euro. Here we do not even consider other fundamental factors that support the US currency against increased anti-risk sentiment. And yet the main question, in my opinion, remains unanswered—to what "depth" are EUR/USD sellers able to descend within the framework of the development of the downward trend? Indeed, it is necessary to be careful when opening short positions on the pair. On the one hand, corrective pullbacks do not allow you to enter sales with an optimal price gap. On the other hand, the bears of the pair feel insecure under the 1.0000 mark. It may be necessary to "follow the beaten path" here. For example, yesterday, traders identified themselves at 0.9953, impulsively declining and bouncing back. Therefore, this target is now the main downward target and the support level, which coincides with the lower line of the Bollinger Bands indicator on the D1 timeframe. Therefore, the following targets can be determined on corrective upward pullbacks: 1.0050, 1.0000, 0.9955. Longs in any case look risky, given the prevailing fundamental background and the widespread dominance of the US currency.   Read more: https://www.instaforex.eu/forex_analysis/316278
TEST

A Look At Forex Pairs: USD/CHF, AUD/USD And US Stocks: US 100 (Nasdaq 100)

Jing Ren Jing Ren 15.07.2022 14:51
USDCHF seeks support The US dollar bounces higher fuelled by expectations of a supersized rate hike after record high inflation. A short-lived pullback has met solid buying interest over 0.9750. A pop back above the recent high at 0.9850 confirms that the bulls are still in control of the direction. A bullish MA cross suggests an acceleration to the upside and could attract more bids in the process. Above 0.9880, the origin of the June liquidation at 0.9950 could be next, which would complete the W-pattern on the daily chart. 0.9790 is the first support. AUDUSD stays in downtrend The Australian dollar found some support after the unemployment rate dropped to 3.5% in June. The RSI’s oversold situation caused a brief rebound but the price action remains under pressure after it failed to hold onto 0.6770. The bearish inertia may continue to attract trend followers and 0.6650 would be the next target after momentum pushed below 0.6710. On the upside, the support-turned-resistance at 0.6810 is the first to clear to ease the pressure and 0.6870 a major hurdle before a recovery could take place. NAS 100 tests key support The Nasdaq 100 consolidates as investors assess second-quarter earnings. The index came to a halt at 12200 and a bearish RSI divergence showed a loss of momentum in that key supply zone. A drop below 11700 could be a confirmation that the bias remains down, putting buyers on the defensive. 11500 is a key level to keep the price action afloat. Its breach may send it to the daily support at 10500, where it could be vulnerable to a new round of sell-off. 11900 is a key hurdle to lift before a rebound could gain a foothold.
The RBA Surprised With A Smaller 25 bp Hike , Sterling (GBP) Rose, The USD Has Weakened

Forex Forecast: (AUD/USD) Australian Dollar To US Dollar - 18/07/22

InstaForex Analysis InstaForex Analysis 18.07.2022 09:46
Relevance up to 04:00 2022-07-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. After the aussie's growth by almost 50 points last Friday, now the price continues to rise in today's Asian session and is approaching the target level of 0.6830 (low of May 12). The Marlin Oscillator on the daily timeframe is approaching the border with the growth territory, overcoming which may develop a correction to the next target level of 0.6951.     The MACD indicator line is approaching this level. If the price reaches the target, then we expect it to turn down, into a new wave of decline. The move towards 0.6951 will be jerky as this was in the 0.6951-0.6830 range of the June 22-July 5 decline.     The price has consolidated above the balance and MACD indicator lines on the four-hour chart, the Marlin Oscillator is growing in the positive area. Consolidating above 0.6830 will start the chase to the 0.6951 target level. Returning to the area below 0.6755 will mean that the price intends to reach 0.6686 and then 0.6640.   Read more: https://www.instaforex.eu/forex_analysis/316360
Thursday's Bank's of England decision may be record-breaking!

FX: British Pound To US Dollar (GBP/USD) Forecast! - 16/07/22

InstaForex Analysis InstaForex Analysis 18.07.2022 09:58
Relevance up to 04:00 2022-07-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The British pound's growth from last Friday amounted to 42 points. This morning, the pound added another 32 points, coming close to the upper border of the descending wedge on the daily scale chart. Consolidating above it will open the way to the 1.2073 target level. The Marlin Oscillator is set strongly up. Its signal line has already gone above the sloping resistance line.     The price's exit from the wedge can transform it into a normal descending channel, the upper hypothetical border of which is indicated on the chart in light green. It will be a complex and ambiguous growth.     The Marlin Oscillator is growing in the positive area on the four-hour chart, there is not much left to the MACD line (1.1925). The exit above the line will give the corrective growth an additional charge of optimism. The target will be resistance at 1.2073.   Read more: https://www.instaforex.eu/forex_analysis/316362
The Euro May Attempt To Resume An Upward Movement

Forecast For Forex Pairs: Euro To US Dollar (1 EUR To USD) - 18/07/22

InstaForex Analysis InstaForex Analysis 18.07.2022 10:26
Relevance up to 04:00 2022-07-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The euro consolidated above the support level of 1.0020 on Friday, and is now heading towards the target level of 1.0170. The signal line of the Marlin Oscillator on the daily chart is approaching the upper limit of its own descending channel. Taking into account the global downward trend, we expect the price to turn into a new wave of decline from the level of 1.0170.     The price is struggling with the resistance of the MACD indicator line on the four-hour chart. Exit above it will finally clear the way for the price to the target resistance at 1.0170. The Marlin Oscillator still has room for growth.     Important economic data will not be released today, but inflation data (CPI) for June will be published in the euro area on Tuesday, the forecast for which is unchanged (8.6% Y/Y) and US construction data - the volume of construction of new houses in June is expected at 1.585 million Y/Y against 1.549 million Y/Y in May. The price could fall.   Read more: https://www.instaforex.eu/forex_analysis/316364
The EUR/USD Pair Maintains The Bullish Sentiment

Forex: US Dollar (USD) Plunged On Friday! How Much Did EUR/USD Gain?

Jeffrey Halley Jeffrey Halley 18.07.2022 10:41
US dollar retreats as Wall Street rises The US dollar fell heavily on Friday, versus the developed market space, as Wall Street’s impressive rally spilt over into a broader sentiment rally in other asset classes. That saw the dollar index make a long-overdue correction lower. The dollar index fell 0.60% to 107.98 on Friday, easing another 0.17% lower to 107.80 in Asia as US dollar weakness continued. Resistance is at 109,30, the overnight highs, and then 110.00. Support is at 107.50 and then the 1.0585 breakout point, followed by 1.0500. ​ The relative strength index indicator (RSI) has moved out of the overbought territory, but the technicals suggest the US dollar correction could continue through the week. EUR/USD rallied by 0.67% to 1.0088 on Friday, rising another 0.17% to 1.0115 in Asia. ​ The technical picture suggests a correction back towards 1.0200 is possible, but only a sustained break above 1.0360 would suggest a longer-term low is in place. EUR/USD has support at 1.0000 and 0.9900/25. The single currency faces serious event risk in the latter half of the week, firstly from the ECB policy decision, and secondly, from Russian natural gas flows which are due to resume after pipeline maintenance. GBP/USD followed the euro overnight, finishing 0.37% higher at 1.1870, rising 0.23% to 1.1895 in Asia. It has support at 1.1800 and 1.1760, with resistance at 1.1965, followed by 1.2060 and 1.2200. A rise above 1.2060 suggests a larger rally to the 1.2400 regions, but it would take a sustained break of 1.2400 to call for a longer-term low by sterling. USD/JPY fell on Friday by 0.38% at 138.50, easing another 0.15% to 138.30 in Asia. Thursday’s high around 139.40 is initial resistance, followed by 140.00. Support is at 137.40 and 136.00. Given the sentiment in the market this week, a fall in US yields this week could finally translate to a meaningful downside correction by USD/JPY, which is a crowded trade. AUD/USD and NZD/USD rallied on Friday as investor sentiment ended the week on a high note. NZD/USD leapt higher on higher-than-expected inflation data today, but those early gains have since been eroded. AUD/USD and NZD/USD are both 0.25% higher at 0.6810 and 0.6175. Both currencies are showing falling wedge formations. A sustained break above 0.6850 or 0.6200 signals more gains ahead this week by the antipodeans. Asian currencies had another noisy session on Friday, but as the dust settled, were mostly unchanged versus the US dollar. The price action merely reversed their intraday losses from earlier in the session. The positive news headlines from China over the weekend on stimulus to support the property sector has allowed Asian currencies to book modest gains in Asia. However, despite a slew of recent policy tightenings in the region, fears of a widening interest rate differential with the US continue to cap gains by Asian currencies. That suggests markets will continue to call Asian central bank’s bluffs, the first being Indonesia on Thursday. Notably, the Philippine peso and Indian rupee continue to remain under pressure, USD/PHP rising 0.15% today to 29.913, with USD/INR rising 0.10% to 79.770. Across the rest of the region USD/Asia has fallen modestly by between 0.10% and 0.20%. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Wall Street rally pushes US dollar lower - MarketPulseMarketPulse
Unlocking the Future: Key UK Wage Data and September BoE Rate Hike Prospects

FX: EUR/USD - Technical Analysis Of Euro To US Dollar - 18/03/22

InstaForex Analysis InstaForex Analysis 18.07.2022 13:21
Relevance up to 09:00 2022-07-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. trend analysis EUR/USD will most likely rise this week, from 1.0078 (closing of the last weekly candle) to 1.0147, which is the 23.6% retracement level (yellow dotted line). Then, the pair will continue moving up to the 38.2% retracement level at 1.0267 (yellow dotted line), before returning to 1.0114, which is the historical support level (blue dotted line)     Fig. 1 (weekly chart) comprehensive analysis: Indicator analysis - uptrend Fibonacci levels - uptrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - uptrend Monthly chart - uptrend All this points to an upward movement in EUR/USD. Conclusion: The pair will have an upward trend, with no first lower shadow on the weekly white candle (Monday - up) and a second upper shadow (Friday - down). During the week, the quote will climb from 1.0078 (closing of the last weekly candle) to the 23.6% retracement level at 1.0147 (yellow dotted line), climb up to the 38.2% retracement level at 1.0267 (yellow dotted line), then return to the historical support level at 1.0114 (dashed blue line). Alternatively, the pair could move from 1.0078 (closing of the last weekly candle) to the 23.6% retracement level at 1.0147 (yellow dotted line), then go down to the lower fractal at 0.9952 (yellow dotted line). From there, the quote will rise to the 14.6% retracement level at 1.0072 (red dotted line) and continue the uptrend.   Read more: https://www.instaforex.eu/forex_analysis/316394
The Collapse Of The Silicon Valley Bank Weakened The Dollar And USD/JPY But Supported EUR/USD, AUD/USD, And GBP/USD

Forex Hot Potato! EUR/USD - Technical Review | Euro To US Dollar

InstaForex Analysis InstaForex Analysis 18.07.2022 22:40
Relevance up to 22:00 2022-07-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   In late September, Re-closure below the price level of 1.1700 has initiated downside-movement towards 1.1500 where some recovery was witnessed. Shortly after, Price levels around 1.1700 managed to hold prices for a short period of time before another price decline took place towards 1.1200. Then the EURUSD has temporarily moved-up within the depicted movement channel until downside breakout occurred recently. Since then, the price zone around 1.1500 has applied significant SELLING pressure when a valid SELL Entry was offered upon the previous ascending movement towards it. Shortly after, the EURUSD looked oversold while approaching the price levels of 1.0800 few weeks ago. That's where the recent upside movement was previously initiated. However, the recent movement towards 1.1200 was considered for another SELL Trade which already reached its targets. Any ascending movement towards 1.0800 should be watched for selling pressure and a possible SELL entry.   Read more: https://www.instaforex.eu/forex_analysis/284954
GBP: Softer Ahead of CPI Risk Event

Forex: Euro To US Dollar - Technical Analysis | 19/07/22 | EUR/USD

InstaForex Analysis InstaForex Analysis 19.07.2022 13:09
Relevance up to 13:00 2022-07-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Overview : All elements being obviously bullish, it would be possible for traders to trade only long positions (at the time of purchase) on the EUR/USD pair as long as the price remains well above the levels of 1.0201, 1.0142 and 1.0070. The Euro has started the week on solid grounds as the US Dollar slipped on perceptions that the Fed rate hike path might have peaked in expectations. The EUR/USD pair has rallied back through parity and crossed above the 50-day simple moving average (SMA) which might suggest a pause in short term bearish momentum. The 100-day SMA remains a long from the price, currently just below a potential resistance zone at 1.0260 - 1.0340. The ascending trend channel remain intact and all SMAs maintain a positive gradient. Resistance levels might be at the weekly close 1.0340 or at last week's high of 1.0449. The buyers' bullish objective is set at the price of 1.0260. A bullish break in this resistance would boost the bullish momentum. The buyers could then target the resistance located at the price of 1.0340. If there is any crossing, the next objective would be the resistance located at 1.0340. However, beware of bullish excesses that could lead to a possible short-term correction; but this possible correction would not be tradeable. Conclusion : Following a significant break above parity last week, the EURUSD pair bulls defended the area well enough to spur a rally into the weekend. Monday saw a continuation of that trend higher, but the rally stalled on the test of 1.0260. The EURUSD pair came under further pressure late in the NY session as headlines pertaining to Apple dented sentiment. Moreover, the RSI is becoming to signal an upward trend, as the trend is still showing strong above the moving average (100) and (50). Thus, the maket is indicating a bullish opportunity above the 1.0260 level so it will be a good sign to buy at 1.0260 with the first target of 1.0340. It will also call for a downtrend in order to continue towards 1.0449. The EURUSD pair will be in focus this week with the major event risk that dominates the near-term calendar. While this week's rate hike may provide a short-term boost for the beaten down Euro, sellers may reengage on any significant as growth concerns hang over the continent. The daily strong support is seen at 1.0142. On the other hand, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the price of 1.0070. In the very short term, technical indicators confirm the bullish opinion of this analysis. It is appropriate to continue watching any excessive bullish movements or scanner detections which might lead to a small bearish correction (1.0070 - 1.0200).   Read more: https://www.instaforex.eu/forex_analysis/285084
EUR/USD Pair Has Potential For The Downside Movement Today

FX Traders May Like This One: EUR/USD (Euro To US Dollar) & British Pound To USD - Trading Plans

InstaForex Analysis InstaForex Analysis 19.07.2022 13:08
Relevance up to 09:00 2022-07-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Details of the economic calendar from July 18 Monday was traditionally accompanied by an empty macroeconomic calendar. Important statistics in Europe, the UK, and the United States were not released. Traders worked based on technical analysis. Analysis of trading charts from July 18 The EUR/USD currency pair strengthened by more than 200 points from the local low of the downward trend. Despite the scale of price changes, the euro is still oversold in the medium term, indicated by a number of historical values in which the quote is currently located. On the trading chart of the daily period, there is an inconspicuous price rebound from the parity level area. The downward interest in the structure of the medium-term trend is still considered the main direction. The GBPUSD currency pair returned to the psychological level of 1.2000 during the corrective movement (1.1950/1.2000/1.2050 ), which led to a reduction in the volume of long positions. As a result, there was a slowdown in the upward cycle in the market, where the 1.2000 level area is considered by traders as resistance.     Economic calendar for July 19 With the opening of the European session, the UK labor market data were published, where unemployment remained at the same level of 3.8%. Forecasts expect growth of 3.9%. Employment in the country increased by 296,000, while claims for unemployment benefits in June decreased by 20,000. Data on the UK is not bad, in fact, it became a catalyst for holding long positions on the pound sterling. Tuesday's main event is the EU inflation data, which may pressure the market, provoking speculators to new actions. The inflation rate is expected to set a new growth record from 8.1% to 8.6%, so there can be no talk of any reduction in inflationary pressure. Time targeting EU inflation - 09:00 UTC Trading plan for EUR/USD on July 19 The volume of long positions decreased locally at the moment of touching the level of 1.0150, as indicated by the price stagnation-pullback. For the subsequent growth in the value of the euro, it is necessary to stay above 1.0200. Otherwise, there may be a gradual recovery of dollar positions with the price returning to the parity level.     Trading plan for GBP/USD on July 19 In this situation, there are two possible scenarios to consider: The first scenario is based on the strategy of price rebound from the area of an important level. In this case, the correction will complete the formation by successively returning the quote to the recent local low. The second scenario considers a prolonged correction if the price holds above 1.2060 in a four-hour period. In this scenario, the pound sterling may strengthen to 1.2150     What is reflected in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.   Read more: https://www.instaforex.eu/forex_analysis/316539
Euro: Although ECB Is Expected To Rise Interest Rate By 25bps, 50bps Move Wouldn't Be That Shocking

Euro: Although ECB Is Expected To Rise Interest Rate By 25bps, 50bps Move Wouldn't Be That Shocking

FXStreet News FXStreet News 20.07.2022 16:47
The ECB has pre-committed to raising rates by 25 bps in its July meeting. A 50 bps rate increase by the ECB would not come as a surprise. The bank’s rate hike guidance and new anti-fragmentation tool are being eyed. Almost a decade ago, Mario Draghi pledged to do ‘whatever it takes’ to save the euro. Ten years later, the situation is no different and the shared currency is in a dire state yet again. Will European Central Bank (ECB) President Christine Lagarde repeat history by responding to a larger rate hike this Thursday? The central bank meets on July 21 to announce the first interest rate hike in eleven years at 1215 GMT. Lagarde’s press conference will follow at 1245 GMT. ECB could opt for a 50 bps rate hike The ECB is on track to raise rates by 25 bps on Thursday, lifting the key deposit rate to -0.25%. A recent story by Reuters suggested that the ECB policymakers are set to discuss a 50 bps rate hike at the meeting. Therefore, a double-dose rate increase to control record-high inflation will not come as a surprise. Money markets are pricing in 40% odds on a half-point rate hike this week while wagering 97 bps of tightening by September after earlier baking in a one-percentage-point increase. I believe that the ECB will deliver a 50 bps lift-off this month, in the wake of rampant inflation, resumption of the Russian gas supply and the fact that the ECB is way behind the curve. It’s also worth noting that front-loading rates now may allow the central bank some room to pause or go slower on rate hikes when a recession hits. The euro area is battling a record-high inflation rate of 8.6% on an annualized basis, reported in June. Lagarde clearly mentioned in the press conference following the June policy meeting that the rate hike path will remain ‘data-dependent’. Meanwhile, the latest European Commission forecasts showed that inflation is seen at 4% in 2023, lower than the current rate but still double than the central bank’s target. Source: FXStreet But Lagarde did walk back on her words and later said there were "clearly conditions in which gradualism would not be appropriate". Despite the well-telegraphed talks of a 25 bps rate hike, the ECB could follow the US Federal Reserve’s (Fed) footsteps in turning against its pre-committed guidance. With inflation control on top of its agenda, the ECB needs to move forward with bigger rate hikes, as it remains the main laggard in the global tightening bandwagon. Even the Swiss National Bank (SNB) surprised markets with a 50 bps rate rise in its last policy meeting. Meanwhile, the Fed is likely to hike rates by 75 bps next week, totaling 250 bps of increases so far. The premise for a quarter-point rate rise could be also ebbing fears over an imminent recession in the bloc, especially after Russia announced on Tuesday that Russia's Nord Stream 1 pipeline will resume gas flows on schedule this week but at reduced levels. The Nord Stream 1 carries more than one-third of Russia's natural gas exports to Europe and it was critical for the pipeline to restart after it went offline for 10 days on July 11 for annual maintenance. However, a big move this week could trigger a renewed explosion in the peripheral bond yields, already when the Italian bond yields are through the roof amid simmering political turmoil in the region. But the risk could be mitigated by the policymakers if they announce a new bond-buying scheme on Thursday. The new transmission protection mechanism will cap member countries' borrowing costs when they are deemed to be out of sync with economic reality. Sources with knowledge of the matter said, “ECB policymakers home in on a deal to make new bond purchases conditional on next generation EU targets and fiscal rules.” "These include the targets set by the Commission for securing money from the European Union Recovery and Resilience Facility as well as the Stability and Growth Pact, when it is reinstated next year after the pandemic break,” the sources added. Trading EURUSD price with the ECB EURUSD price is witnessing a classic short-squeeze in the lead-up to the ECB showdown after the euro succumbed below parity against the US dollar last week. The pair has recovered roughly 300 pips from a two-decade low of 0.9952 but the further upside remains at the mercy of Lagarde & Co. EURUSD could resume its downtrend towards parity on ‘sell the fact’ trading should the central bank deliver the expected 25 bps rate hike. A double-dose lift-off could restore the ECB’s credibility in fighting inflation, offering a temporary boost to the euro. The main currency pair could extend the short-squeeze towards the critical 1.0360-1.0370 supply zone, eyeing 1.0400 the figure. The upside risks to EURUSD price could be limited if Lagarde fails to commit on big moves in the September meeting. Also, the lack of details on the new anti-fragmentation tool could leave EUR bulls in limbo once again.
Fed is expected to hike the rate by 50bp, but weaker greenback and Treasury yields don't play in favour of the bank

US Dollar To Japanese Yen - Forex: USDJPY - Technical Look - 21/07/22

InstaForex Analysis InstaForex Analysis 21.07.2022 15:22
Relevance up to 14:00 2022-07-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Red lines- bearish RSI divergence Green line -support trend line USDJPY is trading around 138.65. Price continues trading inside the upward sloping wedge pattern respecting the upward sloping green trend line. Support is found at 137.85 and as long as price is above this level, we expect price to continue making higher highs and higher lows. USDJPY is close to ending the up trend. So far we got warning signals of a weakening up trend. Once the green support trend line is broken, we will get a reversal signal. Support is key at 137.20-137.85. USDJPY current technical picture justifies a pull back towards 130-127.   Read more: https://www.instaforex.eu/forex_analysis/285471
Top 10 Stocks to Watch: August 2023 - BY: RYAN SULLIVAN

FX: EUR/USD And British Pound To US Dollar - Charts And Trading Plans - 22/07/22

InstaForex Analysis InstaForex Analysis 22.07.2022 12:13
Relevance up to 09:00 2022-07-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Details of the economic calendar from July 21 The ECB raised the interest rate for the first time in 11 years, and immediately by 50 basis points, from zero to 0.5%. According to European Central Bank President Christine Lagarde, the decision of the Board of Governors was based on an updated assessment of inflation risks. The next steps on the interest rate will depend on the statistical data. Key messages: • the refinancing rate was raised to 0.5% • the rate on the deposit and the marginal lending facility was raised to 0.00% and 0.75%, respectively • the ECB introduced a new Transmission Protection Instrument (TPI) to limit fragmentation in the European bond markets • Lagarde: - the operation of the TPI mechanism will not affect the current policy of the ECB - the volume of the TPI program can be quite large - no recession in ECB base case - still a high risk of further growth of inflation; further tightening of monetary policy is appropriate In all this new TPI mechanism, the old QE scheme is visible, thereby confusing the market. Analysis of trading charts from July 21 The EURUSD currency pair showed only local speculative interest during the publication of the results of the ECB meeting and the press conference. The scale of fluctuations was about 100 points. As a result, the current amplitude formed a short-term flat within 1.0150/1.0270. The GBPUSD currency pair, following the euro, repeats all the price fluctuations available on the market. Initially, there were speculations, after which the quote safely returned to the psychological level of 1.2000.     Economic calendar for July 22 The trading week ends with the widespread publication of preliminary data on business activity indices, which will not affect the mood of market participants in any way. For the reason that the same result is expected everywhere—all indices should decrease slightly. And since the picture is the same, there is no reason for fuss. Time targeting EU PMI - 08:00 UTC UK PMI - 08:30 UTC US PMI - 13:45 UTC Trading plan for EUR/USD on July 22 In this situation, the current range grabs all the attention of traders. For this reason, breaking through one or another flat border is considered the most appropriate trading tactic. We concretize the above into trading signals: Buy positions on the currency pair can be considered after holding the price above the value of 1.0280 in a four-hour period. Sell positions can be considered after holding the price below the value of 1.0115 in a four-hour period.     Trading plan for GBP/USD on July 22 As of this writing, the quote is moving in the lower area of the control level 1.1950/1.2000. It is a temporary manifestation of the price, as its return below 1.1950 may increase the volume of short positions toward 1.1900. The resumption of the quote's move within the boundaries of the previously passed flat 1.1950/1.2050 is not excluded if it goes above 1.2000.     What is reflected in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.   Read more: https://www.instaforex.eu/forex_analysis/316913
Steel majors invest in green steel, but change might be driven by contenders

Forex Trading: Euro To US Dollar - Technical Analysis - 25/07/22

InstaForex Analysis InstaForex Analysis 25.07.2022 12:03
Relevance up to 09:00 2022-07-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis EUR/USD will increase this week, from 1.0213 (closing of the last weekly candle) to 1.0213, which is the 38.2% retracement level (yellow dotted line). Then, it will continue moving up to the 50% retracement level at 1.0367 (yellow dotted line), before returning to 1.0278, which is the upper fractal (weekly candle from 07/17/2022).     Fig. 1 (weekly chart) Comprehensive analysis: Indicator analysis - uptrend Fibonacci levels - uptrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - uptrend Monthly chart - uptrend All this points to an upward movement in EUR/USD. Conclusion: The pair will have an upward trend, with no first lower shadow on the weekly white candle (Monday - up) and no second upper shadow (Friday - up). During the week, euro will climb from 1.0213 (closing of the last weekly candle) to the 38.2% retracement level at 1.0213 (yellow dotted line), move to the 50% retracement level at 1.0367 (yellow dotted line), then return to the upper fractal at 1.0278 (weekly candle from 07/17/2022). Alternatively, the pair could decrease from 1.0213 (closing of the last weekly candle) to the 161.8% retracement level at 1.0078 (red dotted line), then bounce up to the 23.6% retracement level at 1.0146 (yellow dotted line).   Read more: https://www.instaforex.eu/forex_analysis/317034
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Technical Analysis - Forex: GBP To USD - 25/07-30/07

InstaForex Analysis InstaForex Analysis 25.07.2022 12:05
Relevance up to 09:00 2022-07-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis GBP/USD will continue rising this week, starting from 1.2003 (the closing of the last weekly candle) to the resistance line at 1.2105 (white thick line). After that it will move to the 23.6% retracement level at 1.2226 (red dotted line), then go to the 38.2% retracement level at 1.2517 (red dotted line). Price is likely to decrease after these movements.     Fig. 1 (weekly chart) Comprehensive analysis: Indicator analysis - uptrend Fibonacci levels - uptrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - uptrend Monthly chart - uptrend All this points to an upward movement in GBP/USD. Conclusion: The pair will have an upward trend, with no first lower shadow on the weekly white candle (Monday - up) and no second upper shadow (Friday - up). During the week, pound will increase from 1.2003 (the closing of the last weekly candle) to the resistance line at 1.2105 (white thick line), move to the 23.6% retracement level at 1.2226 (red dotted line), then go to the 38.2% retracement level at 1.2517 (red dotted line). Price is likely to decrease after these movements. Alternatively, the quote could climb from 1.1863 (closing of the last weekly candle) to the resistance line at 1.2105 (white thick line), then move down to the 161.8% retracement level at 1.1837 (dashed blue line). Upon reaching it, pound will go up to the 14.6% retracement level at 1.2049 (red dotted line).   Read more: https://www.instaforex.eu/forex_analysis/317042
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

Ifo Business Sentiment Decreased! | Technical Look At EUR/USD - 25/07/22

Kenny Fisher Kenny Fisher 25.07.2022 16:29
The euro is in positive territory at the start of the week. In the North American session, EUR/USD is trading at 1.0245, up 0.30%. German business confidence sinks The US dollar lost some of its lustre last week and the euro took advantage. EUR/USD posted its first winning week in a month and pulled some distance away from the parity line. The euro has posted gains today but there was some alarming data out of Germany. Ifo Business Sentiment dropped to 88.6 in June, down sharply from 92.2 in May and shy of the consensus estimate of 90.2. The reading marked the lowest level in more than two years and was accompanied by an unusually grim message from the head of the Ifo Institute. Klaus Wohlrabe said that a recession in Germany was “knocking on the door” due to high energy prices and the possibility of gas shortages faced by Germany. The Nord Stream 1 pipeline opened on Thursday as scheduled after being shut for maintenance but only at about 40% capacity, which was the case before it shut down.  At that level, Germany may need to ration gas in order to reach its target of 90% storage capacity before winter sets in. The EU has suggested that member countries scale back their gas needs by 15% starting August 1st, but already some members are pushing back and demanding exemptions, making it uncertain if this voluntary plan will get off the ground. The EU is clearly worried that Russia will weaponise its energy exports to Europe, which has implemented sanctions against Moscow due to the invasion of Ukraine. With each member state having to worry about its own citizens having sufficient gas in the winter, we could see cracks appear in the EU’s attempt to have a unified stance against Russia. . EUR/USD Technical EUR/USD continues to test support at 1.0191.  The next support level is 1.0105 There is resistance at 1.0304 and 1.0390   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro shrugs as German confidence slips - MarketPulseMarketPulse
Steel majors invest in green steel, but change might be driven by contenders

FX Daily: The dollar’s “pivot” hasn’t arrived yet

ING Economics ING Economics 28.07.2022 10:47
Yesterday's long-squeeze is not a sign of a longer-lasting soft period for the dollar, in our view. Upside risks for the greenback remain material due to an unstable global risk environment and still broadly supportive Fed stance. But from now on, expect higher sensitivity of USD to data, starting with today's GDP figures. German CPI will be in focus, too Source: Shutterstock USD: Soft dollar momentum shouldn't last long Similar to what had happened in the aftermath of six of the previous eight FOMC announcements, a “sell-the-fact” reaction and long-squeeze in the dollar was triggered yesterday. In particular, markets seemed to cling on to the notion that the Fed will slow down tightening from now, which resulted in an equities rally as well as some re-pricing lower in rate expectations for the remainder of the year. The OIS curve currently embeds 100bp of extra tightening at the September, November and December meetings combined. As discussed in our FOMC review, we do expect the Fed to switch to 50bp in September, but vague forward guidance and the migration to a fully data-dependent approach mean that a lot can change from now until the next meeting. We also think that – in a similar fashion to what the ECB did to the euro early this month – the dollar will now become more data-dependent, as markets will be searching for any evidence on the inflation and growth side that could warrant a dovish shift by the Fed. Speaking of recession, while Chair Jerome Powell seemed to retain a rather optimistic approach on the matter, today’s GDP numbers will be a first test of the dollar’s reaction function to incoming data. Consensus is centred around a 0.5% quarter-on-quarter annualised growth rate in 2Q, and our economist’s baseline scenario is a 0.4% reading, even though we highlight some downside risks (even a second consecutive negative quarterly reading) given the swings in inventories and trade figures. Looking at the coming weeks, our view is that the post-FOMC dollar weakness may start to fade quite soon. The road to recovery for global risk assets is still long and quite bumpy, as the magnitude of a global slowdown remains high. Geopolitical risks also remain elevated, making the outlook for commodity prices uncertain. In addition, our suspicion is that markets should retain most dollar longs until the Fed is giving clearer signals that it is pivoting to a less hawkish stance. Our baseline scenario is that the dollar will consolidate around these levels and may re-strengthen from now until the September FOMC meeting. Expect a heightened sensitivity to data to keep volatility high. EUR: German CPI slowing down again? EUR/USD received a bump after the FOMC and is back at the 1.0200 gravity line, but – as discussed above – we don’t expect the dollar’s soft momentum to linger for much longer. This means that downside risks over the coming weeks for EUR/USD remain material, and obviously quite tied to further developments on the Russian gas story. Today, however, the focus will be on data releases both in the US and the eurozone. German CPI figures will be watched very closely ahead of tomorrow’s eurozone-wide figures and could have a quite tangible impact on the euro. Should there be evidence of some further deceleration – albeit likely quite marginal – from the 7.6% July headline reading, the euro could come under some pressure. However, uninspiring GDP figures out of the US might have a similar impact on the dollar and that could keep EUR/USD attached to the 1.0200 mark today. On the ECB side, we’ll hear from Bank of Italy’s Governor Ignazio Visco today. Expect a larger market reaction to any comment about the central bank's Transmission Protection Instrument. The 10Y BTP-Bund spread touched the 240bp mark yesterday - very close to the 242bp June high -  as markets seem to retain some doubts about the scope of TPI intervention under a politically-motivated widening in sovereign spreads. GBP: Still no domestic drivers With the exception of some headlines about campaign pledges by Liz Truss and Rishi Sunak, there simply isn’t much that markets are looking at in terms of domestic drivers for GBP. The data calendar is set to be very quiet into next Thursday’s Bank of England rate announcement, ahead of which markets are pricing in around 45bp of tightening. Expect cable to keep being driven by the dollar and EUR/GBP to be driven by the euro. We think GBP/USD is still at risk of a return to or below 1.2000 in the coming weeks, while EUR/GBP may stay around 0.8400 but is facing downside risks due to uncertainty over Russian gas supply. CEE: Get up and back to work The region survived another day and the FOMC outcome had no significant implications for it either way, in our view. However, the market already took precautionary measures yesterday, sending CEE currencies into the Fed meeting at the weakest levels in two weeks. Nevertheless, the end of the world did not take place and the region is waking up to the fight to regain its previous position. Just as we saw the Polish zloty as the most vulnerable, we believe it can now go for the biggest gains below the 4.75 level. However, tomorrow we will see Polish inflation for July, which may give the National Bank of Poland ammunition for some dovish rhetoric and give the market a reason to erase the last vestiges of its expectations for a more significant rate hike. We see the Hungarian forint back closer to its favoured 400 level, which should give the National Bank of Hungry confidence that it has the situation under control and deliver "only" a 75bp deposit rate hike today, as promised on Tuesday. The koruna will get a dose of relief and a chance to get below 24.60, which has proven to be the level where the Czech National Bank has drawn a line for its FX intervention over the past two days. In addition, the drop in pressure on a weaker koruna also gives comfort to the new board, which we believe is planning rate stability for next week's meeting, the first time since last May. On the other hand, we must not forget that the world is not all about the Fed, and the CEE region remains sensitive to events in Europe, led by the gas story. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Is Still In A High Position On The 1H Chart

EUR/USD - Possible Scenarios For Euro To US Dollar - 05/08/22

InstaForex Analysis InstaForex Analysis 05.08.2022 12:03
Relevance up to 03:00 2022-08-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1). The euro-dollar pair may move upward from the level of 1.0245 (close of yesterday's daily candle) to 1.0281, the 50.0% retracement level (red dotted line). After testing this level, the price may continue to move upward with the target of 1.0351, the historical resistance level (blue dotted line). Upon reaching this level, a downward pullback is possible.     Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today, the price may move upward from the level of 1.0245 (close of yesterday's daily candle) to 1.0281, the 50.0% retracement level (red dotted line). After testing this level, the price may continue to move upward with the target of 1.0351, the historical resistance level (blue dotted line). Upon reaching this level, a downward pullback is possible. Alternative scenario: from the level of 1.0245 (close of yesterday's daily candle), the price may move upward to 1.0281, the 50.0% retracement level (red dotted line). After testing this level, a downward movement is possible with the target of 1.0163, the 38.2% retracement level (blue dotted line). When testing this level, the price may move up.   Read more: https://www.instaforex.eu/forex_analysis/318125
Global Markets Shaken as Yields Soar: Dollar Surges, Stocks Slump, and Gold Holds Ground Amid Debt Concerns and Rate Hike Expectations

Forex Market Means Volatility! British Pound To US Dollar - Possible Scenarios For EUR/USD - 05/08/22

InstaForex Analysis InstaForex Analysis 05.08.2022 12:07
Relevance up to 03:00 2022-08-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1). The pound-dollar pair may move downward from the level of 1.2156 (close of yesterday's daily candle) to the target of 1.2088, the 38.2% retracement level (blue dotted line). After testing this level, the price may move upward with the target of 1.2196, the 76.4% retracement level (red dotted line). Upon reaching this level, continued upward movement is possible.     Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – down; Volumes – down; Candlestick analysis – down; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today, the price may move downward from the level of 1.2156 (close of yesterday's daily candle) to the target of 1.2088, the 38.2% retracement level (blue dotted line). After testing this level, the price may move upward with the target of 1.2196, the 76.4% retracement level (red dotted line). Upon reaching this level, continued upward movement is possible. Alternative scenario: from the level of 1.2156 (close of yesterday's daily candle), the price may move down with the target of 1.2027, the 50% retracement level (blue dotted line), then an upward movement is possible to 1.2196, the 76.4% retracement level (red dotted line). After testing this level, the price may continue to move up.   Read more: https://www.instaforex.eu/forex_analysis/318127
USD Outlook: Fed's Push for Higher Rates and Powell's Speech at Jackson Hole Symposium

Forex Pairs: EUR/USD, AUD/USD, GBP/USD And Asian Currencies Commented By Jeffrey Halley (Oanda)

Jeffrey Halley Jeffrey Halley 05.08.2022 13:44
US dollar has had an uneven sell-off overnight The US dollar fell overnight, led by losses against the euro for unknown reasons, with the Japanese yen also gaining as US yields slid slightly. Sterling and the Australasians hardly moved, while Asian currencies remain stubbornly anchored near to recent lows.   The dollar index fell 0.59% lower at 105.75 overnight, retracing slightly higher by 0.11% to 105.87 in Asia. The dollar index breakout lower at 106.45 has continued to cap rallies this week on a closing basis, suggesting downside risks are still the path of least resistance. Beyond that, 106.75 is the next resistance. Support is at 105.65, and then the more important 1.0500 level. Failure signals a deeper move lower to 1.0350 and, potentially, the 102.50 longer-term breakout.   EUR/USD rallied by 0.76% overnight to 1.0245, easing slightly to 1.0235 in Asian trading. Given stubbornly high European gas prices and the recessionary risks from its Eastern border, the single currencies environment remains challenging, even if 0.9950 is now looking like a medium-term low. EUR/USD had solid resistance nearby at 1.0250 and then 1.0300. A close above 1.0300 this even would signal further gains to 1.0500, however. Meanwhile, EUR/USD has support at 1.0150 and then a series of daily lows between 1.0100 and 1.0125.   GBP/USD traded in a choppy 150+ point Bank of England range overnight but ultimately finished nearly unchanged at 1.2160. In Asia, it has edged lower to 1.2145. When your central bank has forecast a recession and inflation rising to 13.0% but has only hiked rates to 1.75%, it is reasonable to assume they are behind the curve. That stagflationary reality could be limiting sterling’s gains. Support is at 1.2065, the overnight low, with resistance at 1.2215, the overnight high, followed by 1.2300.   Four days in Bali saw me miss the long-awaited capitulation sell-off by USD/JPY as the US/Japan rate differential narrowed. Much will depend on the US Non-Farm Payroll data this evening and the reaction by US bonds. The sell-off this week went further than I expected but held the 100-day moving average (DMA), which today is at 130.70. Resistance is clearly denoted at 134.65 now. Expect plenty of noise in between.   AUD/USD rose 0.25% to 0.6965 overnight, and NZD/USD rose by 0.40% to 0.6295. Both are almost unchanged in Asia as risk sentiment holds up into the Asian session. The technical picture for both remains constructive as both currencies staged upside breakouts higher a fortnight ago. They remain well above their breakout lines at 0.6790 and 0.6145, and a daily close above either 0.7050 or 0.6350 signals the next stage of the recovery rally.   Asian currencies were steady overnight, booking an uneven session of mixed gains against the greenback. In Asia, surging inflation numbers from the Philippines and Thailand have sparked 0.75% rallies by THB and PHP to 35.620 and 55.17 as markets price in faster monetary tightening. That has had a knock-on impact across the Asian FX space, with the Korean won gaining 0.40% to 1297.20. The Indonesian rupiah and Malaysian ringgit remain near recent lows, however, as both central banks remain very reluctant rate hikers. With inflation rising in Asia, lifting rate hike expectations, Asian currencies could finally be starting also to gain some benefits from recent US dollar strength elsewhere. USD/INR has eased to 89.976 today. With the RBI rate decision this afternoon, I expect volatility ahead. Further INR strength from here probably relies on the RBI statement being hawkish; otherwise, I suspect INR weakness will resume. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US dollar retreat continues - MarketPulseMarketPulse
Norway: Norges bank announced lower-than-expected Forex purchases. According to ING authorities may want to support NOK

Exotic Forex Pair: Euro To Norwegian Krone (EUR/NOK) - Technical Analysis - 05/08/22

InstaForex Analysis InstaForex Analysis 05.08.2022 13:50
Relevance up to 11:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/NOK: The chart shows the movement of EUR/NOK (euro to Norwegian krone) in the daily (D1) chart. This pair may be of interest to those who are ready to open orders for a long period in their trading strategy. Unlike classic currency pairs, EUR/NOK has increased volatility and large spread. It is currently forming a new trend, with support at 9.85 and estimated target at 10.53. In the event of a breakdown, quotes will cease to grow. Good luck! Read more: https://www.instaforex.eu/forex_analysis/318176   Read more: https://www.instaforex.eu/forex_analysis/318176
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

Both The USA And Canada Release Labour Market Data | USD/CAD Chart

Kenny Fisher Kenny Fisher 05.08.2022 14:41
US nonfarm payrolls expected to slow to 250K It’s a busy day in both Canada and the US, with both countries releasing July employment reports. It wasn’t so long ago that US nonfarm payrolls was eagerly anticipated and was the most important event of the week. The NFP often had a significant impact on the movement of the US dollar. That has changed in the new economic landscape of red-hot inflation and central banks raising interest rates practically every month. The NFP has been overshadowed as the media breathlessly reports new inflation records and the threat of a recession. Still, the NFP remains an important indicator and a surprise reading can still shake up the markets. The July NFP is expected at 250 thousand, following a surprisingly strong June release of 372 thousand. A weak reading will raise concerns about a recession, which would likely see US yields and the US dollar fall. Conversely, a stronger than expected number would probably boost yields and the US dollar, as a stronger labour market would allow the Fed to remain hawkish regarding rate policy. The markets have priced in an inflation peak and the Fed winding up its rate-tightening cycle, which has sent the US dollar on a hasty retreat. Fed policy makers have been pushing back, sending out the message this week that there are more large hikes on the way as inflation is not yet under control. A strong NFP reading would reinforce the Fed’s message and provide some support for the US dollar. Canada will also publish employment data later today. The economy is expected to have created 20.0 thousand jobs in July, after a decline of 43.2 thousand in May. A stronger-than-expected reading should boost the Canadian dollar, while an underperformance could result in the currency losing ground. As well, Canada releases Ivey PMI. The indicator slumped to 62.2 in June, down from 72.0, and is expected to slow to 60.3. A surprise reading could have an impact on the direction of USD/CAD in the North American session. . USD/CAD Technical USD/CAD is putting pressure on 1.2899. Above, there is resistance at 1.3002 USD/CAD has support at 1.2741 and 1.2686 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/CAD eyes Canada, US job reports - MarketPulseMarketPulse
Chinese Data Shakes Dollar, US Stocks Higher Amid Disinflation Concerns and Bank Earnings Awaited

Forex: How Did US Dollar Reacted To NFP? | GBP/USD Chart

Kenny Fisher Kenny Fisher 05.08.2022 22:11
The British pound is falling sharply in the North American session, after a massively strong US nonfarm payment release. GBP/USD is trading at 1.2040, down 0.98% on the day. US Nonfarm Payrolls smashes higher It wasn’t so long ago that US nonfarm payrolls was one of the most anticipated events on the economic calendar and often had a significant impact on the movement of the US dollar. That has changed in the new economic landscape of red-hot inflation and central banks raising interest rates practically every month. The markets seem more absorbed with new inflation records and the threat of recession, which may make for more catchy headlines than labor market statistics. Today, however, NFP demonstrated its ability to be a market-mover. The July gain of 528 thousand crushed the estimate of 250 thousand and follows the June release of 372 thousand. The US dollar has responded with strong gains against the majors, as a strong labour market will enable the Fed to remain hawkish with its rate moves. BoE delivers with a 50bp hike The BoE was widely expected to raise rates by 50bp, and the central bank did exactly that. The MPC vote was 8-1 in favour, with one member voting for a 25bp hike. This split shows that Governor Bailey appears to have the MPC members in line, which should bolster Governor Bailey’s credibility. With inflation hitting 9.4% in June and no sign of a peak, the BoE has been accused of raising a white flag with regard to inflation. The 50bp increase, the biggest in 30 years, is an important step in fighting inflation, which has hit 9.4% and shows no signs of peaking. Even with this hike, the Bank Rate is at 1.75%, well behind the Federal Reserve, the central banks of Canada and New Zealand and others. The BoE’s rate increase was accompanied by a stark warning of a prolonged recession, and the pound responded with losses. The pound managed to recover these losses but it is clear that the currency isn’t getting any support from the BoE’s rate moves, with such a huge gap between inflation levels and current rates. Investors were also less than impressed as the BoE said that it might ease up on raising rates in the coming months. Governor Bailey has said he would be forceful in combating inflation, but the message that the central bank doesn’t plan to be forceful with its forward guidance is weighing on the pound. . GBP/USD Technical GBP/USD is testing resistance at 1.2128. Next, there is resistance at 1.2295  There is support at 1.2010 and 1.1876 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD slides as Nonfarm Payrolls surges - MarketPulseMarketPulse
Fed's Bowman Highlights Potential for More Rate Hikes; German Industrial Production Dips to 6-Month Low

FX: Forecast For Australian Dollar To US Dollar (AUD To USD) - 08/08/22

InstaForex Analysis InstaForex Analysis 08.08.2022 08:42
Relevance up to 04:00 2022-08-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. On Friday, the Australian dollar managed to overcome the support of the MACD indicator line on a daily scale. Today opened below the MACD line, which opens up the aussie's plan for the main downside scenario - further advance to the target level of 0.6830 (May 12 low).     The signal line of the Marlin Oscillator is a little late with the transition under the zero line, this circumstance may delay the price's downward movement for several hours.     The price has already formed a convergence with the Marlin Oscillator on the H4 chart, which contributes to the delay in the decline. But in general, convergence does not cancel a strong downward price movement. For such a cancellation, the price needs to do a very difficult thing - to settle above the MACD line (0.6980).   Read more: https://www.instaforex.eu/forex_analysis/318254
Sustainability-Linked Products: Navigating Growth and Challenges for the Future

Forex: British Pound - Could GBP/USD Plunge Below 1.2000!?

InstaForex Analysis InstaForex Analysis 08.08.2022 08:57
Relevance up to 04:00 2022-08-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The pound was falling by 151 points on Friday, having touched the support of the MACD trend line (1.2003) with the lower shadow of the daily candle. The price's departure under the trend indicator line will mean a resumption of a decline in the medium term. The first target on this path is the level of 1.1800.     The Marlin Oscillator remains in positive territory for now. Apparently, this circumstance did not allow the price to overcome the support on Friday. Now there is such a situation that the price overcoming the MACD line (1.2003) and the transition of the oscillator to a negative position can coincide in time. Such synchronicity can give a strong momentum to the price in moving down. If the price goes back above 1.2100, then the decline will be delayed for a day or two. Overcoming 1.2230 will open the 1.2435 target.     The price has consolidated under the balance and MACD indicator lines on the four-hour chart, the Marlin Oscillator is developing in negative territory. We are waiting for the price to move down according to the predominant downward scenario.   Read more: https://www.instaforex.eu/forex_analysis/318256
FX Daily: Testing the easing pushback

Fasten Your Seat Belts! It May Be A Turbulent Day For Euro! The US Labour Market Data Shocked, This Week We Meet Inflation Figures! Euro To US Dollar Forecast

InstaForex Analysis InstaForex Analysis 08.08.2022 09:01
Relevance up to 04:00 2022-08-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The euro fell by 60 points on Friday due to good data on employment in the US. The lower shadow of the daily candle touched the target support at 1.0150. In the non-agricultural sector, 528,000 new jobs were created in July. This morning the price approached the support at 1.0150 again and shows the intention to overcome it.     If this plan succeeds, then the price will open the way to the target bearish level of 1.0020. This is our main scenario. The signal line of the Marlin Oscillator is also close to overcoming the zero neutral line and moving into the downward trend zone. The main plan may be disrupted by the price's exit above Friday's high at 1.0252, which will also correspond to overcoming the resistance of the MACD indicator line on a daily scale. In this case, the target would be 1.0360 (15 June low).     On the four-hour chart, the price develops under both indicator lines - balance and MACD. The Marlin Oscillator is in a downward position. We are waiting for the price to leave the area below 1.0150 and settle under the level. If the situation develops according to an alternative scenario, the price moving above the MACD line (1.0220) will not be enough to develop movement to 1.0360, such a transition above the indicator line may turn out to be false. The working signal will be overcoming the MACD line of the daily scale, which is near Friday's high at 1.0252.   Read more: https://www.instaforex.eu/forex_analysis/318258
Fed is expected to hike the rate by 50bp, but weaker greenback and Treasury yields don't play in favour of the bank

This Week Plays A Vital Role For US Dollar (USD)! Breaking: The US Inflation Is Expected To Go Down! Can We Expected Why Is The CPI So Important?

Saxo Bank Saxo Bank 08.08.2022 09:32
  Summary:  The week’s focus will be on the U.S. CPI scheduled to release on Wednesday. The strong employment report in the U.S. last Friday casted doubts about the aggressive pricing of rate cuts next year. All eyes will be on the CPI data to gauge how the tug of war between Fed's inflation fighting and the market's recession fear evolves. In Asia, the focus will be the July aggregate financing and credit data from China.   Can the US CPI release boost the USD? The highly-watched US inflation data is on the radar in the week ahead, and the debate on inflation peaking vs. higher-for-longer will be revived. Meanwhile, the Fed has recently stayed away from providing forward guidance, which has now made all the data points ahead of the September 21 FOMC meeting a lot more important to predict the path of Fed rates from here. Bloomberg consensus expects inflation to slow down from 9.1% YoY in June to 8.8% YoY last month, but it will be more important to think about how fast inflation can decelerate from here, and how low it can go. We also get a preliminary print of the August University of Michigan sentiment this week, which may continue to signal the pain inflicted on the consumer from the escalating price pressures. That will also include a gauge of inflation expectations for one year, as well as the longer term. Fed speakers to continue to push back on market’s easing expectations for next year More Fed speaker will be on the wires this week, starting with Chicago President Charles Evans who discusses the economy and monetary policy. Evans is not a voter this year, but he votes in 2023. He said last week a 50bps rate hike is a reasonable assessment for the September meeting, but 75bps is a possibility too if inflation does not improve. He expects 25bps from there on until Q2 2023 and sees a policy rate between 3.75-4% in 2023, which is in line with Fed’s median view of 3.8% for 2023, but above the 2.9% that the market is currently pricing in. Minneapolis Fed President Neel Kashkari, also not a voting member this year, is also up again this week after his comment last week that it is unlikely that Fed will cut rates next year. Mary Daly, another usually dovish Fed President, also returns this week after pushing back on easing expectations last week. China’s PPI inflation is set to ease while CPI is expected to pick up in July The median forecasts form economists being surveyed by Bloomberg are 4.9% (vs June: 6.1%) for PPI and 2.9% (vs 2.5% for June.  The higher CPI forecast is mainly a result of a surge in pork prices by 35% in July from June.  On the other hand, PPI is expected to continue its recent trend of deceleration due to a low base and fall in material prices.  The convergence of the gap between PPI and CPI is likely to benefit downstream manufacturing industries. Aggregate financing in China is scheduled to release between Aug 9 and 15 As new home sales decelerated during the month, mortgage loan growth was likely to be weak in July.  Bond issuance may come in lower in the July data versus June when local governments rushed to issue infrastructure special bonds.  Local governments were told to use up all their issuance quotas by the end of June.  Part of these weaknesses in the month of July may be offset by a rise in bank lending to support infrastructure construction.  Japan’s eco data will show the impact of the latest virus wave Japan’s July data will begin to show the fresh highs we have seen recently in Covid-19 cases, which are now reaching over a million per week. The Eco Watchers Survey for July will be due today, and likely to show deteriorating current conditions and expectations index. July producer prices are also due in the week, and will show some easing due to the base effects. However, underlying pressures remain amid the higher import costs due to the weaker yen, and consumer prices could continue to be pressured higher as well as firms pass on these rising costs. Key economic releases & central bank meetings this week Monday Aug 8 U.S.: New York Fed survey of consumer expectations Tuesday Aug 9U.S.: Unit Labor costs (Q2) & Nonfarm productivityPhilippines: GDP (Q2)Malaysia: Industrial production (Jun) Wednesday Aug 10U.S.: CPI (Jul)Japan: PPI (Jul)China: CPI (Jul) & PPI (Jul)Germany: CPI (Jul)Italy: CPI (Jul) Thailand: Bank of Thailand policy meeting Thursday Aug 11U.S:. Initial & continuous jobless claimsU.S.: PPI (Jul)Singapore: GDP (Q2, final) Friday Aug 12U.S.: U of Michigan consumer sentiment (Aug) & 5-10yr Inflation expectationFrance: CPI (Jul, final)U.K.: GDP (Q2)U.K.: Industrial production (Jun)Malaysia: GDP (Q2)India: CPI (Jul)India: Industrial production (Jun) Sunday Aug 9-15China: Aggregate financing (Jul) Key company earnings releases this week Monday Aug 8 BioNTech SE (BNTX:xnas), AIG (AIG:xnys), Tyson Foods (TSN:xnys), Suncorp (SUN:xasx), China Unicom (00762:xhkg) Tuesday Aug 9Coinbase (COIN:xnas), Warner (WMG:xnas), REA (REA:xasx), China Tower (00788:xhkg), Flat Glass (06865:xhkg)Wednesday Aug 10Walt Disney (DIS:xnys), Commonwealth Bank of Australia (CBA:xasx), Vestas Wind (VWS:xcse), Techtronic (00669:xhkg), Wharf (00004:xhkg), Lenovo (00992:xhkg) Thursday Aug 11NIO (NIO:xnas), Cardinal Health (CAH:xnys), Capitaland (9CI:xses), Telstra (TLS:xasx), QBE Insurance (QBE:xasx), Siemens (SIE:xetr), Deutsche Telekon (DTE:xetr), Hapag-Lloyd (HLAG:xetr), RWE (RWE:xetr), China Mobile (00941:xhkg), SMIC (00981:xhkg), Li Ning (02331:xhkg)Friday Aug 12   Zijin Mining (02899:xhkg), Galaxy (00027:xhkg), Sands (01928:xhkg) Source: Saxo Spotlight: What’s on investors and traders radars this week? | Saxo Group (home.saxo)
GBPUSD Testing Key Support at 1.2175: Will Oversold Conditions Trigger a Correction?

US Recession Cried Off!? Shocking Forex News! Could (EUR/USD) Euro To US Dollar Hit Levels Above 1.200!?

InstaForex Analysis InstaForex Analysis 08.08.2022 09:41
Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The content of the report of the United States Department of Labor came as a complete surprise, and eventually led to a noticeable strengthening of the dollar. And the fact is that all the main indicators turned out to be much better than forecasts. Thus, the unemployment rate, instead of remaining unchanged, fell from 3.6% to 3.5%. Moreover, 528,000 new jobs were created outside of agriculture. Although, according to forecasts, the creation of 290,000 new jobs was expected. In fact, they were about twice as many. And do not forget that in order to maintain the stability of the labor market, a little more than 200,000 new jobs should be created outside of agriculture. And since they turned out to be more than twice as many, the unemployment rate will continue to decline. Which somewhat contradicts the idea that the US economy is sliding into recession. Number of new non-agricultural jobs (United States):     Today the macroeconomic calendar is absolutely empty, and apparently, the market will consolidate around the values reached on Friday. Despite everything, the EURUSD currency pair is moving within the 1.0150/1.0270 horizontal channel, consistently working out the set boundaries. Last Friday, the quote rebounded from the area of the upper border and rushed to the area of the lower one, where the volume of short positions decreased. A consistent cycle of fluctuations is essential in the market, which makes it possible for traders to work based on the natural basis of the past. The technical instrument RSI H4, following the price rebound from the upper border of the flat, crossed the middle line 50 from top to bottom. This signal only indicates the bounce method, but not the end of the flat. In general terms, the indicator is still centered on the middle line. The moving MA lines on the Alligator H4 have a lot of interlacing, this indicates a variable signal that corresponds to the flat stage.     Expectations and prospects The flat stage is still relevant in the market, which is indicated by the current price rebound from the lower border. In this situation, the subsequent increase in the volume of long positions is expected after the price stays above the value of 1.0200. In this scenario, it is possible to consider movement towards 1.2150/1.2170. The main strategy, as before, is the method of breaking through one of the control levels: 1.0300 - when considering the upward development of the market; 1.0100 - if market participants are oriented towards a hike towards the parity level. It is worth noting that the signal must be confirmed in a four-hour period. Complex indicator analysis has a variable signal in the short-term and intraday periods due to the current flat. At the moment, the indicators point to long positions on the euro, due to the price rebound from the lower border of the outset.   Read more: https://www.instaforex.eu/forex_analysis/318280
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Euro (EUR) Is Expected To Stay Strong, But EUR/USD Reaching Parity Isn't That Impossible! US Dollar Index (USDX) - Surprising Sentiment!

InstaForex Analysis InstaForex Analysis 08.08.2022 10:38
Relevance up to 07:00 2022-08-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results.   The US currency started the week quite cheerfully, trying to maintain the positive momentum received after the release of the Nonfarm Payrolls data. At the same time, the euro cannot boast of similar dynamics, demonstrating pendulum dynamics. The euro is once again teetering on the brink of falling, while trying to settle in the positions it has won. However, these actions are not always successful as the USD continues to dominate the market. At the same time, according to reports on the dollar index (USDX), investors are showing bearish sentiment against the US currency. Over the past two weeks, market participants have reduced their positions on USD growth after a long build-up. A continuation of the current trend can lead to a short-term drawdown of the greenback. Currently, the greenback is trying to gain a foothold in the upward trend, and not without success. Its rise was catalyzed by impressive US employment data. Against this backdrop, markets expect more decisive action from the Federal Reserve in terms of tightening monetary policy. Recall that, according to reports, 528,000 jobs appeared last month in the US economy, and the unemployment rate fell to 3.5%. According to economists, positive data on US employment revived the hopes of traders and investors about a significant increase in the key rate (by 75 bps) at the Fed's September meeting. Note that strong data on employment growth in America came as a surprise to the markets. Most experts expected opposite results, referring to recent studies on the onset of a recession in the US economy and to a slowdown in economic growth in the country. For the time being, however, fortune favors the greenback. After the release of Nonfarm Payrolls, the dollar confidently overtook the euro. The EUR/USD was trading near 1.0186 on Monday morning, August 8, trying to return to last week's highs near 1.0200.     Note that after the release of the US employment report, the EUR/USD pair plunged sharply to the critical 1.0170, but later managed to recover. Against this background, some experts are optimistic about the immediate prospects for the euro. According to preliminary calculations, in the coming months, the euro may be in an upward trend, despite the threat of a recession in the European economy. The reason is the increased risk appetite in global markets. Against this background, experts believe that the fair rate of the EUR/USD pair is close to 1.1400. Analysts' conclusions are based on the difference in rates in the US and Germany. At the same time, experts do not exclude another fall of the euro to parity with the dollar. This week, investors are focusing on US inflation data. The release of the July consumer price index is scheduled (the preliminary forecast provides for an increase of 0.2% in monthly terms) on Wednesday, August 10. The markets will get acquainted with the US producer price index on Thursday, August 11. This indicator is crucial for the further dynamics of the interest rate. Recall that the positive report on employment in the US opened the way for the Fed to aggressively tighten monetary policy. According to experts, having received confirmation of the strengthening of the US economy, investors will return to long positions on the dollar. This will give an additional impetus to the latter and set up traders for an extreme tightening of monetary policy by the Fed.   Read more: https://www.instaforex.eu/forex_analysis/318270
ECB's Dovish Shift: Markets Anticipate Softer Policy Guidance

Turbulent Time For GBP (British Pound)! What's Possibly Ahead Of US Dollar (USD)?

ING Economics ING Economics 08.08.2022 10:19
The dollar starts the new week on the firm side after some impressive US July jobs figures on Friday. US money markets now price around 125bp of further Fed tightening and then a softer Fed profile from next summer onwards - pretty much now in line with our house view. Firm US July CPI data this week can see the dollar continue to trade near its highs Source: Shutterstock USD: Dollar to hold near highs, but interest in carry could emerge An unequivocally strong US July jobs report released on Friday has gone a little way to assuaging recession fears and given credence to last week's pushback from the Fed that it was nowhere near done in terms of tightening. Pricing in the US money markets now sees a further 125bp of Fed hikes this year (we see hikes of 50bp, 50bp, and 25bp in September, November and December). And those money markets price in around 50bp of cuts from summer '23 onwards. Current pricing is consistent with our house view and perhaps could usher in a period of calm for Fed pricing and the dollar. That pricing looks unlikely to be altered much this week with a strong US July CPI, where the core rate should stay near 6% year-on-year and keep the Fed concerned. There should also be focus this week on the Senate's approval of what is now called the Inflation Reduction Act - legislation focused on bringing down prescription drug prices and targeting spending on the climate emergency. At $437bn it is a far cry from the $1-1.5trn initial plans for the Build Back Better legislation and thus seems unlikely to be read as any kind of major fiscal stimulus. It will be interesting to see, however, whether new taxation on stock buybacks next year triggers a rush of stock buybacks this year - potentially supporting US equities (and probably the dollar) into year-end. Expect DXY to hold near its recent highs of 107. But if the dollar is not going anywhere in a hurry, there could be renewed interest in the carry trade. Of the available carry, we think the near 10% levels offered through the 3-month Mexican peso implied yields look attractive. Here Banxico does a good job of keeping USD/MXN stable and is expected to hike rates 75bp to 8.50% this Thursday. Chris Turner We see the dollar holding near its highs after Friday's strong jobs reporthttps://t.co/WwxUhzptEZ — ING Economics (@ING_Economics) August 8, 2022   EUR: Italy's ratings outlook change won't help the euro On Friday evening, the ratings agency Moodys shifted its rating outlook on Italy's sovereign debt from stable to negative. Given that Moodys' Italian rating is just one notch above junk - that has raised some eyebrows and no doubt will call the European Central Bank into further supportive action, be it through the more aggressive re-investment of the Pandemic Emergency Purchase Programme or potentially even using its new support instrument - the Transmission Protection Instrument (TPI). None of this will help the beleaguered euro, where the ECB's trade-weighted measure remains glued to the lows of the year. Indeed, if quiet summer markets prompt renewed interest in the carry trade, the euro will probably be one of the preferred funding currencies.  EUR/USD was understandably hit by Friday's strong US jobs release data and looks like it can stay offered in a 1.0100-1.0300 trading range. Elsewhere, EUR/CHF will be monitoring the performance of Italian bonds today and can probably edge back towards the lower end of a 0.97-0.98 range - a move that will not be unwelcome to the newly hawkish Swiss National Bank. Chris Turner GBP: Week culminates in a 2Q GDP contraction Following last week's pretty bleak Bank of England meeting, the focus this week will be Friday's release of 2Q22 UK GDP data. The market is expecting a 0.2% quarter-on-quarter contraction, we are looking for -0.1% QoQ.  A contraction is widely priced because of the extra bank holiday in June, but weaker activity will highlight the BoE's call of the UK entering a recession in 4Q22 and contracting 2% over the five subsequent quarters. Sterling probably has not sold off more since investors do not quite know what to do with a reserve currency that will be backed by rates at 2.25% if we are correct with our BoE call for the September meeting. Given that the euro should remain soft, we are sticking with our original call from last Thursday that EUR/GBP may struggle to break above the 0.8450 area this week. Chris Turner CEE: Inflation strikes back, again A heavy calendar in the Central and Eastern Europe region is again led by inflation numbers. On Monday, we will see data from the labour market, foreign trade and industrial production in the Czech Republic. The monthly numbers show a slowdown in the economy, but we have also seen some positive surprises that reduce the risk of a technical recession in the second half of the year. Inflation in Hungary will be published on Tuesday. Peter Virovacz expects a further increase from 11.7% to 13.3% year-on-year, slightly above market expectations, also supported by tax changes. In the Czech Republic, inflation will be published on Wednesday. Again, we expect a new record at 18.5% YoY, well above market expectations, mainly due to the announced energy price hikes. On Thursday, we will see inflation in Romania. Valentin Tataru forecasts a drop in YoY terms from 15.1% to 14.6%, which would mark the first decline from the peak. On Friday, the current account in Poland and the Czech Republic will be published, we will see the final estimate of Polish inflation and the Czech National Bank will publish minutes. In the FX market, on the floating side of the CEE region, the Polish zloty and Hungarian forint have strengthened significantly in the past week and, as we mentioned on Wednesday, it is a bit too much for our liking. In both countries, market interest rate expectations have since fallen further, driving rate differentials to their lowest levels since mid-June in Hungary, and April in Poland. Moreover, Friday's US jobs report supported the dollar, which is also not playing into the region's hands. Thus, in our view, the only thing that saved the zloty and forint from losses at the end of last week was the positive market sentiment and risk-on mode. However, we expect both currencies to be weaker this week. We see the forint as more vulnerable, with our target at 399 EUR/HUF and the zloty at 4.75 EUR/PLN for the days ahead. The koruna is still liquidating short positions after Thursday's CNB meeting which made it clear that the end of FX intervention is not on the table. However, we expect the koruna to return to 24.60 EUR/CZK soon. The Romanian leu remained untouched after Friday's central bank meeting and is still enjoying its trip to stronger levels around 4.925 EUR/RON - a move that we think is temporary. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Global Markets Shaken as Yields Soar: Dollar Surges, Stocks Slump, and Gold Holds Ground Amid Debt Concerns and Rate Hike Expectations

NZD/USD: New Zealand Dollar (NZD) Goes In With A Bang!

Kenny Fisher Kenny Fisher 08.08.2022 14:06
The New Zealand dollar has started the week with strong gains. In the European session, NZD/USD is trading at 0.6281, up 0.63% on the day. US Nonfarm payrolls send dollar higher The week ended with a bang as US nonfarm payrolls smashed it out of the ballpark. The July release came in at 528 thousand, well above the estimate of 250 thousand. The immediate effect of the massive NFP release was the US dollar posting broad gains on Friday, as NZD/USD slid almost 1%, but the currency has recovered much of those losses today. The US employment report points to a labour market that remains tight. Unemployment ticked down to 3.5% from 3.6%, and wage growth remained unchanged at 5.2%, ahead of the forecast of 4.9%. For the Fed, the strong gain in wages is well above the Fed’s inflation target of 2% and lends support to another supersize rate 0.75% hike come September. The US labour market remains robust, but the sharp tightening of rates has reduced activity in other parts of the economy, especially manufacturing and goods and service. Still, the US does not appear to be in a recession despite all the noise after two straight negative quarters of GDP. There is no set definition for a recession, but one view is that it is a significant decline in activity across the economy, and that is clearly not the case in the US, with a red-hot labour market. In New Zealand, RBNZ Inflation Expectations ticked lower in Q2, dropping to 3.07%, down from 3.27% in Q1. This is close to the central bank’s upper band of its inflation target of 3%. Inflation, which rose to 7.3% in the second quarter, has yet to peak, but the slight fall in inflation expectations will be welcomed by the RBNZ, as it marks the first drop after eight straight quarters of acceleration. The RBNZ meets next Wednesday and is likely to raise rates by 0.50%. NZD/USD Technical 0.6271 has switched to resistance and is a weak line. Above, there is resistance at 0.6350 There is support at 0.6213 and 0.6134   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZ dollar rebounds on inflation expectations - MarketPulseMarketPulse
ECB's Dovish Shift: Markets Anticipate Softer Policy Guidance

Look At This! FX: British Pound (GBP): Analysis Of GBP/USD - 08/08/22

InstaForex Analysis InstaForex Analysis 08.08.2022 15:07
Relevance up to 13:00 2022-08-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Good afternoon, dear traders! On the 1H chart, the GBP/USD pair declined to the 1.1933 level last Friday. A little later on Friday, the pair was trying to recover to the Fibonacci correction level of 523.6% - 1.2146. On Monday, the price lost steam. It is likely to resume a downward movement. I have determined a new downtrend corridor, which indicates the bearish sentiment. If the pair consolidates above it, it may rise to 1.2315. However, taking into account the economic reports of recent weeks, I believe that the bearish sentiment could persist for a long time. The fact is that traders have already priced in the sixth rate increase by the BoE. The pound sterling has been rapidly growing for several weeks. Many analysts attributed this rally to the upcoming rate hike by 0.50%. Follow us on Feedly However, the Fed also raised the benchmark rate by 0.75% a couple of weeks ago. Next month, it may hike it by 0.75% again for the third time in a row. Recently, some Fed officials have backed an increase in the key rate to 4% or even higher. Notably, at the beginning of the year, policymakers talked about the need to raise the interest rate to 3-3.25%. Thus, there could be more rate hikes in the near future. Inflation remains high despite aggressive tightening. The Fed has to wait until this indicator starts declining. Only after that, traders could expect rate cuts. As for now, the Fed is likely to maintain its hawkish stance. The US dollar has an excellent opportunity to advance versus the euro and the pound sterling. Last Friday, US economic reports turned out to be quite strong, which was bullish for the US dollar. Expectations of more rate hikes may also boost the greenback.     On the 4H chart, the pair performed a rebound from the Fibonacci correction level of 127.2% - 1.2250. It fell to 1.1980. If the price bounced off this level, it may grow to 1.2250. If it tumbles below 1.1980, it will open the way to the next Fibonacci level of 161.8% - 1.1709. There are no divergences in any indicators today. Commitments of Traders (COT):     The mood of the "Non-commercial" category of traders over the past week has become a little more bearish. The number of Long contracts decreased by 5,301 and the number of Short contracts dropped by 2,882. Thus, the general mood of traders remained bearish. The number of Short contracts still exceeds the number of Long ones by several times. Large retail traders continue to sell the pound sterling and their sentiment has not changed lately. The pound sterling has been growing for several weeks. However, COT reports show that it may resume its decline. Besides, an increase in long positions is rather modest to count on an uptrend. Economic calendar for US and UK: On Monday, the economic calendar for the UK and the US do not contain market-driving events. Thus, fundamental factors will not affect market sentiment. Outlook for GBP/USD and trading recommendations: I recommended opening short if the price drops below the upward corridor on the 1H chart with the prospect of a drop to 1.1933. It was also possible to sell the pound sterling after a pullback from the 1.2250 level on the 4H chart. It is better to open long positions if the price consolidates above the upward corridor on the 1H with the target level of 1.2315.   Read more: https://www.instaforex.eu/forex_analysis/318334
B2Core Now Has an Android App

B2Core Now Has an Android App

B2Brokers Group of Companies B2Brokers Group of Companies 09.08.2022 10:30
The B2Core team is excited to introduce the first version of the Android application, which has a bunch of great features. Users can download the app from Google Play. The B2Core app simplifies user account management and tracking by offering features such as creating new accounts, managing wallets, and viewing balances – all in one place. With this launch, B2Broker hopes to provide an easy and convenient way for its clients to stay on top of their finances while on the go. The app also features 2FA and SMS authorization codes for an extra layer of security, ensuring that users' accounts are well-protected. All in all, the new B2Core app is a valuable addition for users who have been waiting for a comprehensive and secure Android solution to manage their finances. Sign-Up/Sign-In App users can create accounts and manage them on mobile devices by using the app's Sign-Up/Sign-In features. Upon registering for the app, you will be able to use all the features of the app. The best thing about this system is that it allows you to keep track of your progress as well as access your data from anywhere at any time. The Wallet One of the best features of the B2Core app is its crypto wallet management. You can easily keep track of your wallets and balances and see the current value of your holdings in each currency. The app allows you to monitor your portfolio performance easily and make payments in digital currencies. Featuring a superior user experience provided by the B2Core development team, this app gives you the convenience of storing, sending, and tracking your assets from wherever you are. 2-Factor Authentication Two-factor authentication is a great way to help keep your account safe from unauthorized access. The app supports 2FA via Google Authentication and SMS authorization code, so even if someone knows your password, they won't be able to log in without access to your phone or another approved device. This extra layer of security can give you peace of mind knowing that your account is well-protected. Conclusion With the launch of the B2Core app on iOS and Android, it is available on both platforms for the very first time. With this release, we are bringing our customers even more convenience for managing their wallets and viewing their balances from anywhere in the world. Also, we have ensured that both versions of the software are synchronized so that you can easily jump back and forth between them. More updates are on the way. For those who haven't tried our app yet, this is a perfect time! So why wait? Download it now!
EM Index Inclusions and Exclusions: India Thrives, Egypt Faces Challenges

AUD/USD - Australian Dollar Did Really Well On Monday! | The US CPI Is Expected To Fall, RBA May Hike Rates By 50bps

Kenny Fisher Kenny Fisher 09.08.2022 13:50
In the European session, the Australian dollar is trading at 0.6991, up 0.10% on the day. This follows massive gains on Monday, when AUD/USD soared 1.04% and briefly pushed above the symbolic 70 level. The US dollar’s recent rally has fizzled, but don’t count Uncle Sam out. US Treasury yields have been dropping, which is indicative of investor demand for safety. There is plenty of uncertainty in the air about the US economy, and heated debates about whether the economy is in a recession or not are not contributing to greater confidence in the economic outlook. Markets eye US inflation report Wednesday’s US inflation report could have a strong impact on the currency markets. Headline CPI is expected to fall to 8.7%, down from 9.1%, while core CPI is forecast to rise to 6.1%, up from 5.9%. If the headline reading is higher than expected, it will boost the case for the Fed to raise rates by 0.75% in September and the dollar should respond with gains. Conversely, a soft reading from the headline or core releases would ease the pressure on the Fed and could send the dollar lower. In Australia, confidence releases were a mix. Westpac Consumer Sentiment for August posted a second straight decline of 3%. Consumer confidence has dropped for nine consecutive months, declining some 22.9% during that time. There was better news from the NAB Business Confidence index for July, which jumped to 7, up from 2 points. Business Conditions climbed to 20, up from 13 prior. The indicator points to broad-based strength in business conditions, despite the global slowdown and weaker domestic activity due to higher rates. As well, purchase and labour costs and retail prices rose, which points to higher inflation and another hike from the RBA in September, likely of 0.50%. AUD/USD Technical There is weak resistance at 0.7016, followed by resistance at 0.7120. 0.6943 has switched to support. Below, there is support at 0.6839 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie rally takes breather - MarketPulseMarketPulse
EUR/USD Faces Pressure Amid PMI Releases: Is More Downside Ahead?

GBP/USD Could Be Turned Upside Down Shortly As The Pair Is Ahead Of UK GDP Release

Kenny Fisher Kenny Fisher 09.08.2022 15:02
The British pound has posted slight gains today. GBP/USD is trading in the European session at 1.2106, up 0.21% on the day. The economic calendar has been light so far this week. On Capitol Hill, the Biden Administration racked up a badly-needed victory ahead of the mid-terms, passing a domestic spending bill which covers climate change, health costs, and corporate taxes. The bill has the interesting name of the Inflation Reduction Act. It would be great if that meant that US inflation, which hit 9.1% in June, must lower itself or else be in breach of the law, but I doubt that US lawmakers have such capabilities. We could see a reduction in inflation as soon as Wednesday, with the release of July’s inflation report. Headline CPI is expected to fall to 8.7%, down from 9.1%, while core CPI is forecast to rise to 6.1%, up from 5.9%. If the headline reading is higher than expected, it will put pressure on the Fed to raise rates by 0.75% in September and the dollar should respond with gains. Conversely, a soft reading from the headline or core releases would ease the pressure on the Fed and could send the dollar lower. BRC sends grim warning despite stronger retail sales In the UK, BRC Retail Sales rebounded with a gain of 1.6% YoY in July, after a 1.3% in June. The BRC noted that despite the positive release, retailers are struggling with falling sales volumes, as inflation has hit 9.1% and is expected to hit double-digits. The BRC added that consumer confidence remains weak and the rise in energy bills in October will worsen the cost of living crisis. The UK releases GDP for Q2 on Friday, and the markets are braced for a downturn. GDP is expected to slow to 2.8% YoY, down from 8.7% in Q1. On a quarterly basis, GDP is projected at -0.2%, following a 0.8% gain in Q1. If GDP is weaker than expected, a fall in the pound is a strong possibility. GBP/USD Technical GBP/USD is testing resistance at 1.2123. Next, there is resistance at 1.2241  There is support at 1.2061 and 1.1951 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound edges higher, markets eye US inflation - MarketPulseMarketPulse
JPY: Assessing the FX Intervention Zone and Market Conditions

Forex: EUR/USD And GBP/USD - What Do We Learn From Technical Analysis?

InstaForex Analysis InstaForex Analysis 09.08.2022 15:21
Relevance up to 10:00 2022-08-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher timeframes The situation has not changed significantly over the past day, so the conclusions and expectations voiced earlier remain relevant today. The center of attraction now is the daily cross (Kijun 1.0200 + Tenkan 1.0204). Bullish targets remain at 1.0259–85 (closing daily cross + weekly short-term trend). The benchmarks, which will allow bears to build new prospects, remain today at 1.0000 – 0.9952 (psychological level + minimum extremum).     H4 – H1 On the lower timeframes, the key levels joined forces at the level of 1.0193 (central pivot point of the day + weekly long-term trend). At the same time, the pair is in the zone of attraction of key levels, which confirms the absence of a clear preponderance of forces between the parties. The reference points for bulls within the day, in the case of an upward trend, are the resistance of the classic pivot points at 1.0225 – 1.0255 – 1.0287. In the case of a decline, then the reference points for bears are 1.0163 – 1.0131 – 1.0101 (support of the classic pivot points). *** GBP/USD     Higher timeframes For the last working day, the pound could not change anything. It remains in the attraction zone of the weekly short-term trend (1.2082). Due to the fact that the situation has not changed, the location of all the main reference points has remained the same. For bears, it is important to overcome the support (1.2026 - 1.2000) and liquidate the daily golden cross (1.1963) in the near future. For bulls, the following reference points are important: 1.2148 (daily short-term trend) - 1.2227 (lower limit of the daily cloud) - 1.2293 (maximum extremum).     H4 – H1 The lower timeframes are currently busy testing the key levels, which are at 1.2087 (central pivot point) and 1.2131 (weekly long-term trend), as well as interacting with the resistance of the H4 cloud (1.2091 - 1.2187). Bullish targets, in the case of continued rise within the day, are 1.2177 - 1.2216 (resistance of the classic pivot points). For bears, the support is at 1.2036 - 1.1997 - 1.1946 (support of the classic pivot points). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/318438
Fed's Bowman Highlights Potential for More Rate Hikes; German Industrial Production Dips to 6-Month Low

FX: What's Possibly Ahead Of USD/JPY And AUDUSD?

InstaForex Analysis InstaForex Analysis 09.08.2022 15:23
Relevance up to 08:00 2022-08-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Positive sentiment ruled over markets on Monday, as a result of which stock indices in Asia and Europe rose. Dynamics in the US, meanwhile, was quite ambiguous. After the release of strong data on US employment and average wages last Friday, markets began to doubt if the Fed will soften its stance on monetary policy. This led to a sharp increase in dollar demand, as well as mixed dynamics in markets, primarily in the US. The better-than-expected figures allow the Fed to continue raising rates without the fear of a weakening labor market. This, of course, is negative for stock markets. Nevertheless, investors are now focused on the upcoming US inflation report tomorrow, which could indicate whether the Fed will raise rates further or not. If the data turns out to be in line with the forecast and shows a corrective decline in annual terms from 9.1% to 8.7%, and a slowdown from 1.3% to 0.2% on a monthly basis, it is likely that the central bank will remain on its previous position, that is, a pause in rate hikes in August then a sharp decline to 0.25% in the next months. This will be taken as good news by markets, possibly leading to a new, but limited rally. If the value of inflation falls even more, expect a more vigorous increase in positive sentiment. But if inflation continues to increase, sell-offs will escalate, while dollar will rise even more. This is because the Fed will most likely continue its aggressive rate hike. In other words, a slowdown in inflationary pressure, or even a slight decrease, will put pressure on dollar and increase risk appetite. Further pressure, meanwhile, will raise dollar and push down stocks and other assets. Forecasts for today:     AUD/USD The pair is trading above the support level of 0.6965. Further selling pressure could lead to a local fall to 0.6870. USD/JPY The pair is below 135.15. But increased buying pressure will push the quote to 136.25. Read more: https://www.instaforex.eu/forex_analysis/318414
Oil Defies Broader Risk-off Sentiment: Commodities Update

Conotoxia | Wow! Warren Buffet's Berkshire Hathaway Profit Went Up By Almost 40%!

Conotoxia Comments Conotoxia Comments 09.08.2022 08:25
Berkshire Hathaway is a holding company that operates as an investment vehicle for well-known investor Warren Buffett. The company has exposure to industries such as freight, insurance, energy, food and more. Berkshire's strategy for years has been to buy attractively valued companies. BH then restructured them, improving efficiency and investing in key areas of the business, resulting in a high potential return on investment. Accordingly, earnings per share (EPS) also seemed to be a big surprise The company's operating profit was $9.3 billion in the second quarter, beating Wall Street analysts' expectations. That's an increase of 39%, taking into account the $6.7 billion profit from a year ago. Accordingly, earnings per share (EPS) also seemed to be a big surprise. It came in at $6,312 (43% year-on-year growth) versus the expected $5,393. This was attributed to the good condition of the insurance and rail transportation businesses in particular. The company continued its slow share buybacks, allocating $1 billion, down sharply from $3.2 billion a year ago. Warren Buffett appears to be cautious about carrying out buybacks. According to Barron's data, the company did not buy back any shares in April and May, when their price was near historic highs. Buybacks resumed in July when the shares tumbled. The company posted a gigantic $43.8 billion loss on investments Despite excellent operating results, the company posted a gigantic $43.8 billion loss on investments. This caused up to 21% declines in the value of shares of Berkshire's three major portfolio companies - Apple, Bank of America and American Express. Warren Buffett asked investors not to focus on quarterly fluctuations. This relates to Warren Buffett's long-term value-type strategy of investing for the long term and not paying much attention to volatility. The main measure is the fundamental value of a company. “The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules,” the board announced in a statement. The conglomerate's Class A shares (main shares issued) fell more than 22% in the second quarter. Berkshire continues to beat the market, losing 2.5% over the year, while the S&P 500 is down 13.5%. All three recommendations gathered by MarketScreener say "buy" or "hold." Their average target price is $525.03k, implying a potential upside of 19.5% from the current price. In addition to the main Class A shares, Class B shares (in the form of CFDs and DMAs) are available on the Conotoxia MT5 platform, whose closing price on Friday did not exceed $300. RafaÅ‚ Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
FxPro | Australian Westpac Consumer Confidence Index Decreased By 3%!

FxPro | Australian Westpac Consumer Confidence Index Decreased By 3%!

Alex Kuptsikevich Alex Kuptsikevich 09.08.2022 15:31
Australia's Westpac Consumer Confidence Index lost 3% in August, developing a nine-month slump that took off 22.9%. The index was near current levels twice in 2020 during the worst periods of lockdowns and uncertainty and even earlier in 2008 during the worst financial crisis. But current levels are well above the recessionary periods of the late 1980s and early 1990s. However, this does not promise a bleak future for the economy as it will shift the government's and RBA's focus from fighting inflation to supporting demand. AUD/USD On forex, the AUDUSD has been languishing around its 50-day moving average for the last two and a half weeks. At the beginning of August, it hit a glass ceiling at 0.7000, separating the crisis from the norm for the Australian economy for years. Forex - Australian Dollar To US Dollar The inability of the bulls to push the pair higher may be seen as a structural weakness of the buyers, passed on the sight of the sharp decline in the prices of metals, an important export commodity. In this case, the AUDUSD may fall without significant headwinds to 0.6700, the low of July. If there is insufficient demand, the road to the abyss opens, and the pair will move into a channel at 0.50–0.60 for the following year.
Bitcoin Stagnates at $30,000 Level, Awaits US Bitcoin ETF Update and Fed Meeting

A Crucial Day For US Dollar (USD)! Today's US Inflation Reading May Shake EUR/USD And The Forex Market In General!

ING Economics ING Economics 10.08.2022 10:34
While the US is sticking to good old inflation spotting, Europe is preparing for the next round of the gas story. EUR/USD will remain under US domination, but the Central and Eastern European region is more likely to dance according to geopolitical squabbles USD: CPI to cement the cycle It has been a trendless week for the dollar so far, with very little follow-through from Friday’s jobs-inspired rally. Today sees the biggest data event risk of the week – and probably of the month. US July CPI is expected to soften a little on a headline basis but nudge up on a core basis to just above 6% year-on-year. Stubbornly high core inflation should support the Federal Reserve’s position that its work is far from done. It should also support pricing in the US money market curve that sees the policy rate taken around 125bp higher in this cycle. Barring a massive upside surprise that can demand an extra 25-50bp or so priced into the back end of the curve (and sending the dollar a leg higher), we expect the inflation data to cement current tightening expectations and keep the dollar bid near the high. Yet it is a long time until the next FOMC meeting on 21 September and barring any shocks, we feel that the dollar holding gains against the low yielders such as the euro and yen should not preclude a little more interest in some emerging high yield currencies. 105.70-107.00 are now the short-term parameters for DXY. Chris Turner EUR: Too many challenges EUR/USD continues to languish near the lows and there does not seem a compelling case to buy it. As we discussed recently, medium valuation considerations do not show it as particularly undervalued. And the larger geopolitical event risks leave Europe more exposed than North America. There is no European data of note today and EUR/USD will therefore be bounced around by the US CPI print. Declining levels of implied volatility suggest investors may be in no mood to chase EUR/USD out of a 1.0100-1.0300 range near term. Chris Turner CEE: The European gas story has reached the next level Yesterday's news about the halt of gas supplies from Russia to Central and Eastern Europe has not caused much damage so far. Of course, further developments, especially the length of the supply stoppage, will be key. Purely in terms of energy dependence, Hungary is the most exposed to problems with supplies from Russia, followed by the Czech Republic. At the same time, the statistics on gas in storage are negative for Hungary. For the time being, both countries report that they have enough gas in reserve to last several weeks and keep the economy running as normal. However, no one will want to test what the reality is. In the FX market, so far, the only visible reaction within CEE has been in the Hungarian forint, which we previously identified as the most vulnerable. Of course, in the coming days, this story will be in focus and drive the direction of FX markets. We see strong potential here to trigger difficult times for the region. Frantisek Taborsky CZK: Tricky inflation print to test CNB pain threshold After Poland and Hungary, July inflation will be published today in the Czech Republic, and we think it will be the trickiest reading so far this year. July will bring a third round of energy price hikes and this time, the month-on-month jump should be a record. However, the problem is the uncertain ratio of fix/float contracts and the approach of the statistical office to such a massive jump in energy suppliers' price lists. Overall, we feel comfortable on the high side of estimates and believe the market may be underestimating these price changes. Thus, we expect inflation to jump from 17.2% to 18.5% today, while the market is expecting 17.9%. The central bank expects 18.8% in its new forecast, but even a higher number cannot be ruled out at this point. For the Czech National Bank, however, we believe the pain threshold is high given that any surprise will come from energy prices, which the new board places on the cost side, thus out of the central bank's reach. From a market perspective, just a few days ago, we would have expected the news to fuel hawkish expectations that the central bank might react anyway. However, yesterday's 20bp jump in the short end of the curve, presumably in preparation for today's inflation, and profit-taking, should limit that market reaction. On the FX front, the market remains safely away from the 24.60-24.70 level after last week's CNB meeting and for now is vainly gathering strength for another stage of attack against the central bank, which has been defending the koruna. Frantisek Taborsky Read this article on THINK TagsFX Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Thursday's Bank's of England decision may be record-breaking!

GBP: Potential 2023 Rate Cut Affects British Pound, But Politics Is The Shaping Factors As Well

InstaForex Analysis InstaForex Analysis 10.08.2022 13:09
Relevance up to 09:00 2022-08-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results.   The British currency remains relatively calm this week, expecting, along with the US, a report on the consumer price index in America. An additional factor of pressure for the pound was the thunderclouds on the political horizon of the UK, due to the election of the prime minister. Markets are focused on the election race in the UK, the favorite of which is Liz Truss, the foreign secretary. She claims the place of Boris Johnson, who was forced by the Conservative Party to resign as prime minister and its leader. The important points of the election program of Truss were the rejection of family benefits and tax cuts for citizens. In addition, the Minister of Foreign Affairs proposed to limit the influence of the Bank of England on the country's economy. Many analysts assess the current political situation in the UK as a crisis, which is exacerbated by economic turmoil. Recall that last week, the BoE raised interest rates by 50%, but this had little effect on inflation in the country. It should be noted that the central bank began the fight against inflation in December 2021 and since then has systematically raised rates at each of the subsequent six meetings. As a result, by the beginning of the summer, inflation in the UK amounted to 9.4%. According to the BoE's forecasts, it will peak in October, soaring to 13.3%. Against this background, by the end of 2022, the UK economy will enter a recession that will last five quarters. However, many experts disagree with this view. Currency strategists at Oxford Economics assess the risks of a recession as small, despite the current instability. According to economists, in 2023 the key rate cut by the BoE is more likely. At the same time, the central bank's actions aimed at reducing rates are slowing down economic activity in the UK. Against this backdrop, the GBP is under tremendous pressure, risking to collapse, currency strategists at Societe Generale believe. At the end of July, the British currency showed growth, waiting for the Federal Reserve to abandon the overly aggressive tightening of the monetary policy. However, this did not happen. On the contrary, the US central bank is quite resolute, and it is supported by the hawkish mood of US officials. Against this background, the pound's recovery was interrupted, releasing the latter into free swimming on the waves of the financial market. The pound has slipped 10% against the dollar since the beginning of this year, placing it in the top three worst currencies among the G-10. The reason is the low pace of rate hikes by the BoE compared to the Fed's anticipatory actions. According to analysts at Societe Generale, in the near future, the pound will fall to its lowest level since the collapse at the beginning of the COVID-19 pandemic. Additional pressure on the pound is created by the BoE's recent announcement about a possible recession and growing expectations of another rise in interest rates in the US (by 75 bps). In such a situation, the pound may sink to 1.2000 and below. If the bearish trend for the pound continues, the GBP/USD pair will fall to 1.1400-1.2000, according to Societe Generale. The pair was close to 1.2100 on Tuesday, August 9 and even peaked at 1.2130, but failed to consolidate on these positions. The GBP/USD pair was trading in the range of 1.2069-1.2070 on Wednesday morning, August 10. At the same time, the greenback showed mixed dynamics, as market participants expect July reports on the US consumer price index.     According to updated forecasts for the British currency, in the short term it will maintain support against the US. However, the high likelihood of interest rate cuts by the BoE in 2023 is putting downward pressure on the pound. At the same time, according to analysts at Oxford Economics, in the near future the central bank will raise interest rates amid galloping inflation, thereby contributing to the pound's growth. However, in the long term, the BoE may revise the current monetary strategy, according to Oxford Economics. UK GDP data for the second quarter of 2022 will be released this Friday, August 12. According to preliminary estimates, this indicator is expected to slow down to 2.8% in annual terms. Against this background, pessimism dominates the markets. In addition, on a quarterly basis, GDP is projected at -0.2%. Earlier, an increase of 0.8% was recorded in the first quarter of 2022. If the current GDP turns out to be weaker than expected, then the pound's decline is inevitable. The pound may be supported by the dollar's retreat across the entire spectrum of the market. In such a situation, the pound is able to stay afloat. According to preliminary forecasts, in the third quarter of 2022, the GBP/USD pair will remain close to 1.2000 and may reach 1.2200, and by the first quarter of 2023 it will rise to 1.2300.   Read more: https://www.instaforex.eu/forex_analysis/318536
Oanda Podcast: US Jobs Report, SVB Financial Fallout And More

US Inflation Data Brings Hope For A Growth, But Recession Fears May Be Back The Next Year

ING Economics ING Economics 11.08.2022 08:57
With today's surprisingly good news on US inflation - read all about it here - we're convinced we're going to see a big growth jump in the States next quarter. But with the Fed determined to raise interest rates still further, our James Knightley in New York says recessionary forces may start swirling again in early 2023   America’s non-recessionary recession US inflation's falling, not least because of lower oil prices, demand is strong as is the labour market. So even though America's in a technical recession, it certainly doesn't feel like it. ING's James Knightley is positive we're going to see a growth rebound later this year. But he says the Fed is still prepared to sacrifice growth to fight rising prices, so real recessionary forces may feel a little stronger in the new year.   Read this article on THINK TagsUS Inflation GDP Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Fed Expectations Amid Mixed Data: Wishful Thinking or Practical Pause?

What Can We Expect From GBP/USD? | The US Inflation Print Surprised, Could Fed Slowdown?

InstaForex Analysis InstaForex Analysis 11.08.2022 09:27
Relevance up to 19:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. According to the most optimistic forecasts, inflation in the United States should have decreased from 9.1% to 8.7%. Whereas the main forecast was based on its stability. But in fact, everything turned out to be completely different, as inflation slowed to 8.5%, which was a complete surprise, which eventually led to a sharp weakening of the dollar. And the reason is incredibly simple - since inflation is slowing down much faster than expected, the Federal Reserve may well reduce the pace of interest rate hikes. The main idea now is that in September the refinancing rate will be increased by only 50 basis points, and not 75 as previously expected. Inflation (United States):     The producer price index will be published today in the United States, which should not only confirm yesterday's inflation data, but also point to its further decline. The index may drop from 11.3% to 10.9%. Given that we are talking about a leading indicator for inflation, this will further convince the market that the US central bank will not raise interest rates so actively. Producer Price Index (United States):     However, everything related to interest rates is nothing but speculation and assumptions. And it is far from a fact that the latest inflation data will seriously affect something. Almost immediately after the publication of inflation data, Neil Kashkari, head of the Federal Reserve Bank of Minneapolis, commented on this issue. And according to him, the slowdown in inflation does not change anything. And as soon as the market comprehends his words, the dollar will begin to strengthen again. The British currency jumped in value by about 180 points against the US dollar in a speculative rally. As a result, the quote returned to the region of the local high of the current corrective move. The technical instrument RSI H1 and H4, due to a speculative jump, turned out to be within the overbought zone, which indicated an overheating of long positions. At this time, the RSI D1 indicator crossed the middle line 50 from the bottom up, which again indicated a signal about a change in trading interests. The MA moving lines on the Alligator H4 indicator have changed direction from the bottom up, which is in line with the recent price momentum. Alligator D1 has intersections between the MA lines, this signal indicates a slowdown in the downtrend. On the trading chart of the daily period, there is a corrective move in the structure of the downward trend. There is no signal of a change in the medium-term trend.     Expectations and prospects The price area 1.2250/1.2300 became resistance on the way of speculators, where there was a reduction in the volume of long positions. Due to the local overbought of the pound sterling in the short term, a rollback occurred on the market. In this situation, the level of 1.2155 can serve as a variable support, where the quote may come during a rollback. The upward scenario will be considered by traders after the regrouping of trading forces, in the form of a rollback. The primary signal to buy the pound may occur if the price returns above 1.2250. Complex indicator analysis in the short-term and intraday periods has a sell signal due to the rollback stage. Indicators in the medium term have a variable signal, due to a slowdown in the downtrend.   Read more: https://www.instaforex.eu/forex_analysis/318647
Elon Musk Sells 8 Millions Tesla Stocks? Here Is Why!

Why Elon Musk Sells His Tesla Shares? Here Is The Answer!

Conotoxia Comments Conotoxia Comments 11.08.2022 11:10
What is happening? The CEO of the world's largest electric car company has sold about $8.4 billion worth of Tesla shares over the past week. According to documents provided to regulators, the series of transactions took place between August 5 and 9, 2022, shortly after the August 4 shareholder meeting in Austin. As recently as April of this year, the Tesla and SpaceX CEO wrote that he "has no plans for another stock sale," after divesting a stake worth $8.5 billion to buy Twitter. This is not the first time Elon Musk has confused his public. The businessman seems to frequently abuse his influence, throwing around bold statements and increasing the expectations of his followers. When asked recently if he had stopped selling Tesla, for the time being, he replied "yes. In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock." However, it's hard not to get the impression that the CEO is simply taking advantage of the recent rebound in the share price. It is possible that his goal is not just to finance the deal, but to try to protect his private fortune. Such a major sale of an important shareholder had a significant impact on both Twitter and Tesla's stock price. Elon Musk failure or a smart plan? Twitter rose at the opening by almost 4%, thanks to the increasing likelihood of the deal being finalized, which may have been due to Musk's recent tweet. Most of the news coming out of the courtroom also reinforces analysts' belief that the Tesla CEO will be forced to buy the company. The platform's stock price has gained more than 35% over the past month, with a price target. Tesla, influenced by the news of the sale of a large stake by the most important person in the company, has lost around 7% over the past four sessions. The company itself gained more than 44% from its July 16 bottom to its August 4 peak at the shareholder meeting. Tesla, like many technology companies, has gained significantly from the recent bear market rally. This growth can also be attributed to Tesla's results, in which it beat expectations for earnings per share (EPS) by more than 26%. However, the macroeconomic analysis is rather pessimistic for the electromobility market in the short and midterm. During recessions, companies are usually unable to achieve high expected growth rates by falling consumer demand. More often than not, revenues fall, profits decline, and as a result, stock prices fall as well.   RafaÅ‚ Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Elon Musk sells nearly 8 million Tesla shares, justifying it by the Twitter lawsuit
Latest Policy Rate Decision Of National Bank of Romania (NBR) Ahead

LEI|Romanian Inflation Hits 15%, But Does It Change A Thing Considering NBR's Rates Decision?

ING Economics ING Economics 11.08.2022 13:24
At 15.0% in July, inflation will hover around current levels until September, before embarking on a downward trend. Today’s numbers are unlikely to change the NBR’s policy path; the hiking pace should decelerate to 50bp and 25bp at the October and November meetings. On the other hand, wage advances remain robust and should support a very soft landing in 2H   We estimated July inflation at 14.6%, the same as the market consensus. On our side, the forecast error came entirely from gas and electricity prices which the Statistical Institute estimated to have increased by 8.2% and 2.8%, respectively, versus our no-change forecast. 15.0% July Inflation   Higher than expected   Somewhat surprisingly - but in line with our estimates - monthly food inflation accelerated in July to 0.9%, from 0.6% in June, with some diverging dynamics taking place in different subgroups. While prices for fresh fruit, oil and most vegetables accelerated more than expected, other items such as milling and bakery products, meat and especially potatoes came below our estimates. Overall, the usual summer disinflation effect on some food prices looks to be less pronounced this year. Inflation (YoY%) and main components (ppt) Source: NIS, ING   Since June, inflation seems to have reached a plateau and we expect numbers very close to current levels until September. Whether the actual peak was in June, at 15.1%, or August, at 15.2%-15.3%, is probably less relevant. What matters more in our view is that the overall inflationary trend seems to have peaked and that we should embark on a gradually descending path from October. Our 13.0% estimate for average 2022 inflation looks on track and we believe that the year-end number could come in lower than the National Bank of Romania's 13.9% estimate.   We don’t think that today’s slightly higher-than-expected inflation will change the NBR’s policy. In presenting the August Inflation Report today, NBR Governor Mugur Isarescu had quite a few dovish remarks, essentially signalling that there is limited room ahead for additional tightening. The dovish stance came despite the inflation forecast being revised higher: from 12.5% to 13.9% for 2022 year-end and from 6.7% to 7.5% for 2023 year-end. However, inflation should continue to descend and is set to reach the NBR’s mid-point of its 1.5%-4.5% target range by June 2024. While we agree that inflation could indeed enter the NBR’s 1.5%-4.5% target range by the end of the two-year forecast horizon, printing as low as 2.3% by mid-2024 seems a bit optimistic. 2024 will be a very important electoral year and the chances for the fiscal stance to turn inflationary even as early as 2023 are not negligible.   The NBR’s inflation forecast looks plausible for the first 12-18 months and slightly optimistic for the 18-24 month timeframe. The key rate will most likely be increased to 6.25% by the end of the year, followed by a long pause (probably throughout 2023). However, market rates could gradually come lower as the NBR might start to tolerate gradually improving liquidity conditions. EUR/RON should remain below 4.95 for the rest of 2022 and we maintain our 5.10 estimate for end-2023. Wage advance remains robust We’ve been arguing quite a few times that despite the inflation spike, wage advances in 2022 would not be that far from beating inflation. In all fairness, this argument came more often when inflation estimates did not exceed 10%, but even as it became clear that inflation would turn higher, we maintained our optimistic outlook on the labour market. Sales and wages Source: NIS, ING   In the first half of the year, net average wages advanced by 11.1% while average inflation for the same period was 11.7%. Basically, average wage growth started to be below inflation only in April this year. The trend, however, is clearly for the advance in real wages to remain in minor negative territory for the rest of the year. Nevertheless, with average 2022 inflation estimated by us at 13.0% and the average wage advance at 12.0%, real wage dynamics are definitely not as bad as one feared at the beginning of the year.   By selected categories, the picture looks somewhat in line with expectations. The seasonal HORECA sector will likely show a less impressive performance once the summer season ends, which leaves the IT and trade sectors clearly outperforming the other sectors. We do notice the relatively small public sector wage advances which should be a sign of much-needed fiscal discipline. However, to put things into perspective, most public sector employees already earn above-average wages. Moreover, with the very important electoral year of 2024 already looming, it is rather unlikely that public wage dynamics will remain in this low single-digit area in 2023 and 2024. January-June wage advance (%) by selected categories Source: NIS, ING Sectorial wage as % of average wage Source: NIS, ING   We’ve already been saying that after a very strong first quarter, the economy seems to have entered a phase of quasi-stagnation. We currently estimate 2Q22 growth at +0.4% versus 1Q22, though we might be a touch on the optimistic side here. Faced with rising living costs, higher interest rates and a gloomy informational environment, consumers are likely to turn more cautious in the second half of 2022 and stay that way throughout the winter. However, today’s wage data confirms that the labour market remains a strong argument for the soft-landing camp against a grimmer outlook. Should inflation confirm the estimated downward profile starting in 4Q22, Romania could get away without a technical recession throughout this soft landing phase. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

Forex: Wow! AUD/USD Skyrocketed By 1.5% Yesterday!

Kenny Fisher Kenny Fisher 11.08.2022 12:45
The Australian dollar has extended its gains today, after rising sharply on Wednesday. In the European session, AUD/USD is trading at 0.7099, up 0.26% on the day. Aussie rockets on US inflation Spectacular. That says it all about the Australian dollar’s surge on Wednesday. AUD/USD jumped 150 points and briefly punched above the 0.7100 level for the first time since June 10th. The catalyst for the Aussie’s good fortune was the US inflation report, as July inflation fell and took the US dollar on a nasty tumble against the majors. The US headline and core inflation releases both came in lower than the forecast.  Core CPI remained steady at 5.9%, lower than the forecast of 6.1%. However, the real news was the headline reading, which dropped to 8.5%, down sharply from 9.1% in June and below the estimate of 8.7%. The markets jumped all over the report, and “inflation peak fever” is spreading, as hopes rise that inflation is finally receding. This sentiment sent the US dollar reeling, on the assumption that the Fed can breathe easier and ease its hiking – perhaps “only” a 0.50% hike after back-to-back increases of 0.75%. Before investors celebrate the demise of inflation, an examination of the facts is in order. The inflation rate of 8.5%, although lower than last month, is still close to a four-decade high. Inflation fell chiefly due to a drop in gas prices, but with the volatility we are seeing in the oil markets, gasoline could quickly change directions. Perhaps most importantly, inflation remains broad based – the core reading, which excludes food and energy costs, remained steady at 5.9%. As the Fed has been warning, the fight against inflation remains far from over, and the rate tightening cycle has by no means run its course. The Reserve Bank of Australia is also in a tough fight against inflation, and is no doubt pleased with today’s MI Inflation Expectations release for July. Inflation Expectations fell to 5.9%, down from 6.3% in June, marking a second straight deceleration. This will likely result in a decline in the forward guidance from the RBA, which would likely weigh on the Australian dollar. The RBA holds its next rate meeting on September 6th. AUD/USD Technical There is weak resistance at 0.7016, followed by resistance at 0.7120 0.6943 has switched to support. Below, there is support at 0.6839 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar rises to 2-month high - MarketPulseMarketPulse
US Dollar (USD) Decreased After Core Inflation Release

US Dollar (USD) Decreased After Core Inflation Release

Jing Ren Jing Ren 11.08.2022 08:25
GBPUSD tests resistance The US dollar tumbled after a slowdown in core inflation in July. A bullish MA cross on the daily chart suggests an improvement in sentiment but the pound needs to consolidate its gains so a rebound could have solid foundations. The pair previously met stiff selling pressure at the daily resistance 1.2300. A bullish breakout would be a decisive moment as it would trigger a runaway rally to May’s high at 1.2660. 1.2130 at the base of the breakout is a key support and the psychological level of 1.2000 a critical floor. AUDUSD breaks higher The Australian dollar surged as the US counterpart’s weakness drove traders into riskier assets. After a brief pullback the pair bounced off the demand zone around 0.6870 right over the bullish MA cross on the daily chart. A break above the daily resistance at 0.7050 indicates the bulls’ willingness in pushing higher. 0.7130 is the next hurdle as the RSI went overbought. Its breach could pave the way for a rally to June’s high at 0.7270. The psychological level of 0.7000 is the first support and 0.6870 critical to keep the recovery intact. USOIL still under pressure WTI crude struggles as US output hits its highest level since April 2020. The price has been falling along the 20-day moving average, putting it at the risk of a bearish reversal. Short-term price action found some relief at 87.50 but the bears could be waiting to sell into strength. 94.00 has turned into a resistance after it failed to stop the bleeding. Selling could be expected from those looking to join the downtrend. 82.00 would be the target in case of a bearish breakout. The bulls need to clear 98.20 before they could attract attention.
The Euro May Gradually Climb To The Target Level

Forex: Euro To US Dollar - Technical Update - 11/08/22

Kim Cramer Larsson Kim Cramer Larsson 11.08.2022 15:51
EURUSD has broken bullish out of its sideways range on back of the CPI numbers released yesterday. EURUSD hasn’t moved far after the breakout however, being rejected at the 0.618 Fibonacci retracement at 1.0360, coinciding with the medium-term falling trend line and 55 SMA. A strong resistance area.RSI is still showing negative sentiment and needs to close above 60 to reverse that. Today EURUSD seems to have another go at the resistance. If EURUSD can push through those resistances, there is room up till around 1.06. Possibly 1.0790. If it fails once again and is pushed back below 1.0280 it could be range bound in past few weeks range for a couple of more weeks. Source: Saxo Group Source: Saxo Group The longer-term picture on EURUSD outlined in previous analysis remains intact. EURUSD trend is down and parity is likely to be tested later in 2022. To reverse that a close above 1.15 is needed.   Source: Saxo Group Source: Technical Update - EURUSD having another go at strong resistance at 1.0360. It might succeed this time | Saxo Group (home.saxo)
The Pound (GBP) Will Probably Continue To Move Sideways

British Pound Was Supported By The US CPI, If GDP Disappoints GBP May Lose

Kenny Fisher Kenny Fisher 11.08.2022 22:15
The British pound is trading quietly today, after posting sharp gains on Wednesday. In the North American session, GBP/USD is trading at 1.2220, up 0.02% on the day. US inflation falls, dollar takes a tumble US inflation surprised on Wednesday, as both the CPI and the core CPI readings were lower than expected. Headline CPI dropped sharply to 8.5%, down from 9.1% in June and below the estimate of 8.7%. Core CPI remained steady at 5.9%, below the forecast of 6.1%. After months of inflation climbing higher, there was palpable relief in the markets as the headline reading finally broke the upward trend. The US dollar was roughed up, dropping sharply against the major currencies. GBP/USD rose an impressive 1.19% yesterday. The Federal Reserve is breathing easier as inflation has finally slowed, and it is more likely now than 24 hours ago that the Fed will ease up on rate hikes and deliver a 0.50% increase in September rather than a 0.75% hike. Nevertheless, it would be premature to declare that the inflation dragon has been slayed and the Fed will soon pivot with regard to rate policy. The inflation rate of 8.5%, although lower than last month, is still close to a four-decade high. Inflation fell chiefly due to a drop in gas prices, but with the volatility we are seeing in the oil markets, gasoline could quickly change directions. Perhaps most importantly, inflation remains broad-based; the core reading, which excludes food and energy costs, remained steady at 5.9%. Fed members left no doubt that despite the positive CPI report, more tightening was on the way. Minneapolis Fed President Kashkari said that the Fed was “far, far away from declaring victory” over inflation, and Chicago Fed President Evans said that inflation remained “unacceptably” high. With the Fed looking to increase the benchmark rate to 4% or higher by the end of 2023, there is plenty of shelf life remaining in the Fed’s rate-tightening cycle. In the UK, the week wraps up with Friday’s GDP report for Q2. The markets are bracing for a soft release – GDP is expected to slow to 2.8% YoY, down from 8.7% in Q1. On a quarterly basis, GDP is projected at -0.2%, following a 0.8% gain in Q1. The pound received a huge lift on Wednesday courtesy of US inflation. If GDP is weaker than expected, the pound will likely lose ground. GBP/USD Technical GBP/USD continues to test resistance at 1.2241. Next, there is resistance at 1.2361  There is support at 1.2123 and 1.2061 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound steady ahead of UK GDP - MarketPulseMarketPulse
China’s Caixin Manufacturing PMI Data Might Support The New Zealand Dollar (NZD)

NZD/USD Chart | New Zealand Dollar Increased By Almost 2% On Wednesday! Poor Manufacturing PMI May Endanger NZD!

Kenny Fisher Kenny Fisher 11.08.2022 22:26
NZD/USD has posted strong gains today. In the North American session, NZD/USD is trading at 0.6452, up 0.75% on the day. It has been a banner for the kiwi, which has jumped by a massive 3.37%. US inflation surprised on Wednesday, as both the CPI and the core CPI readings were lower than expected. Headline CPI dropped sharply to 8.5%, down from 9.1% in June and below the estimate of 8.7%. Core CPI remained steady at 5.9%, below the forecast of 6.1%. The US dollar went into retreat mode, and the New Zealand dollar soared 1.85% on Wednesday. The Federal Reserve is breathing easier as inflation has finally slowed, and it is more likely now than 24 hours ago that the Fed will ease up on rate hikes and deliver a 0.50% increase in September rather than a 0.75% hike. Nevertheless, it would be premature to assume that inflation has been beaten and that the Fed will soon pivot with regard to rate policy. Inflation remains high and the core reading remained steady at 5.9%. Still, the decline in inflation has sent the US dollar on its bottom side. Today’s US Producer Price Index release also showed a slowdown in inflation. PPI for July declined by 0.5%, lower than the +0.2% forecast, the first decline since June 2020. On an annualized basis, PPI slowed to 5.8% in July, down from 6.4% in June. New Zealand releases Manufacturing PMI on Friday. In June, the PMI dropped to 49.7, down from 52.6. It marked the first contraction for the PMI in 10 months, as the 50.0 line separates contraction from expansion. Another decline would point to continuing weakness in the manufacturing sector and could weigh on the high-flying New Zealand dollar. There was good news for the central bank earlier this week, as Inflation Expectations for Q2 dipped to 3.07%, down from 3.27% in Q1. The drop was a minor one but still significant as it marked the first decline in over two years. Actual inflation, which rose to 7.3% in the second quarter, has yet to peak, and the next inflation report is not due until October. The Reserve Bank of New Zealand meets on August 17th, with a 0.50% rate increase the most likely outcome. NZD/USD Technical NZD/USD is testing resistance at 0.6410. Above, there is resistance at 0.6495 There is support at 0.6326 and 0.6227     This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZ dollar rally continues full steam - MarketPulseMarketPulse
Tokyo Raises Concerns Over Yen's Depreciation, Considers Intervention

USA: Fuel Is Cheaper! Forex: Get Ready! US Dollar May Skyrocket Shortly! Could Euro To British Pound (EUR/GBP) Reach 0.85!?

ING Economics ING Economics 12.08.2022 09:41
Softer-than-expected US price data this week has lifted risk assets around the world, especially in the emerging market space. The highlight of today's relatively quiet session will be US August consumer sentiment data, which is expected to pick up after the big drop in gasoline prices. This should be good for US growth and the dollar US gasoline has fallen from $5/gallon to $4 over the last month USD: Rising consumer confidence should be good news all round Softer-than-expected US July price data this week (both CPI and PPI) have been good news for risk assets around the world. Investors have read it as reducing the Fed's urgency to tighten policy. That said, Fed rhetoric has been consistent all week. Namely, the policy rate is heading toward 3.25/3.50% later this year (roughly priced by the markets) and then possibly 4% next year (not priced).   The latest US consumer sentiment readings from the University of Michigan – out today – will feed into this story. James Knightley looks for an upside surprise in consumer sentiment after US gasoline's fall to $4 from $5/gallon over the last month. We also get fresh inflation expectations data. Here the 5-10 year expectations peaked at 3.10% earlier this summer, were 2.9% in July and today are expected to fall to 2.8%.  How will markets read the data? A drop in inflation expectations may suggest the Fed can be more relaxed on inflation. But there are no signs of that coming through in its rhetoric. Instead, the bigger impact may be the bounce in consumer sentiment, reduced fears of a 2023 recession, and the pricing out of some of the 50bp of easing expected in 2H23. This should be a dollar-positive development. As we discussed yesterday, we like the dollar against the low yielders (euro and yen), but feel that declining levels of volatility will see renewed interest in the carry trade. Yesterday, we picked out long MXN/JPY as a pair that could rally in this environment. Mexico's central bank Banxico did hike 75bp yesterday to 8.50% and even though it omitted language talking about 'more forceful' rate hikes in the future, we think Banxico will match the Fed hike-for-hike. 6.80 remains our target for MXN/JPY. Heavily weighted to the low yielders, DXY should be able to edge a little higher today. A break above 105.50 would go a long way to stabilising it after the heavy losses suffered on Wednesday's US CPI release. Chris Turner EUR: Gas developments remain worrying European industry must be watching with growing concern as European natural gas prices continue to edge higher. Higher costs are a given, but winter rationing probably remains the bigger threat. For FX markets, 2022 has been the year of watching terms of trade developments – the price of exports over imports. These have moved very negatively for the eurozone this year and delivered a negative income shock. This week's move in gas prices has sent eurozone terms of trade towards the worst levels of the year and is a clean euro negative. Given that we are slightly bullish on the dollar today, we think that the recent EUR/USD correction has stalled in the 1.0350/0400 resistance area and would favour a move back to 1.0275 today. Elsewhere, some softer-than-expected July Swedish CPI data released today may pour cold water on calls for a massive Riksbank rate hike in September. After a good run in July, we doubt the Swedish krona pushes on too much further against the euro. Chris Turner GBP: 2Q22 UK GDP data not quite as bad as expected UK 2Q22 GDP data came in marginally better than expected, where the extra bank holiday in June did not have quite as large a negative impact as analysts thought. The data can probably keep expectations alive that the Bank of England (BoE) will hike 50bp on 15 September. And ever-rising expectations for how much higher the UK energy price cap will be adjusted (and what it means for the peak of UK inflation) will probably mean the BoE stays hawkish all year. EUR/GBP is slightly stronger than we thought and could edge up to the 0.8485 area. But given the challenges faced on the continent, we would not chase EUR/GBP higher. Chris Turner CEE: Hungary rating review tonight In the Central and Eastern Europe (CEE) region, industrial production in Romania, the final estimate of inflation in Poland, Czech National Bank (CNB) minutes, and current account data across the region will close the busy calendar this week. The final CPI reading in Poland is unlikely to differ markedly from the flash estimate of 15.5% year-on-year. However, given that gas prices at the pump continued to decline in the final week of July, we do not rule out a downward revision to 15.4% YoY. In the long term, we expect the summer months to be marked by relatively stable, albeit very high, inflation. Inflationary pressure is projected to re-emerge with the beginning of the heating season in autumn and at the beginning of 2023 due to the upswing in regulated prices. CNB minutes should reveal the details of the new board's discussion from the last meeting when the central bank left rates unchanged for the first time since May 2021. In addition to the minutes, the full forecast will be released, including alternative scenarios. Hungary's rating review by S&P will also be published later today. We do not expect a change in the rating outlook (BBB, stable), but a downgrade is in play, mainly due to energy dependence and uncertain access to EU money. For today, we do not see many impulses from the regional calendar and the main issue remains the current level of EUR/USD, which is playing positively into the hands of the CEE currencies for now. We see the Polish zloty and Hungarian forint fairly priced, but it is hard to be bullish in this part of the region given the energy risks and the escalating conflict with the European Commission over access to EU money. The koruna shook off another batch of short positions yesterday and we believe EUR/CZK should gradually start to return to higher levels, given that with the region's most dovish central bank on its back, it is hard to find justification for the current EUR/CZK levels. Frantisek Taborsky Read this article on THINK TagsGasoline FX Daily FX Dollar CEE region Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Gold Has A Chance For The Rejection Of The Support

Metals Recovery Process: Gold Survival Series. Copper Age

Saxo Strategy Team Saxo Strategy Team 12.08.2022 10:24
Summary:  US treasury yields at the long end of the curve surged over 15 basis points at one point yesterday in the wake of heavy treasury futures selling and a somewhat soft T-bond auction, which helped to turn sentiment lower in the equity market after the major averages had advanced to new local highs. The jump in US yields checked the US dollar’s descent as traders mull whether a break higher in US treasury yields will offer the currency fresh support after its break lower this week in many USD pairs.   What is our trading focus?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures attempted to run higher above the key 4,200 level but was rejected forcefully, closing a bit lower for the session and just above the 4,200 level. This morning the index futures are again trying to push higher trading around the 4,222 level with yesterday’s high at 4,260 being the natural resistance level in the short-term. Today’s earnings and macro calendar are light except for the Michigan surveys at 1400 GMT on consumer sentiment and expectations for the economy and inflation which could move the market on a surprise print. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hong Kong and mainland Chinese equities treaded water, fluctuating between small gains and losses. Sportswear and EV names gained. Li Ning (02332:xhkg) climbed more than 4% after reporting better than expected 1H results with sales growth of 22% and net profit growth of 12% from last year. The solid sales growth was led by online sales and wholesale business. China’s EV sales volumes grew 124% YoY (wholesale) and 117% YoY (retail) in July, much faster than the growth of the overall passenger vehicle market and had a penetration rate of 26.7%. XPeng (09868:xhkg) led the charge higher, gaining 4.2%, NIO (09866:xhkg) +3.6%, Li Auto (02015:xhkg) +1.7%. Leading semiconductor names, SMIC (00981:xhkg) and Hua Hong (01347:xhkg) reported inline and better-than expected results respectively. In its earnings call, the management of SMIC noted orders from some of its customers could fall meaningfully in near-term due to high inventories and suggested that recovery could come at around end of 2022 or early 2023. Share prices of SMIC declined 1.8%. USD: jump in long treasury yields checks the greenback’s descent After USDJPY traded to new local lows yesterday below 132.00, the pair snapped back well north of 133.00 in the wake of a surge in long US treasury yields (more below) and the USD sell-off was likewise checked elsewhere as risk sentiment also rolled over by late in the US equity trading session. The USD resilience is not yet technically significant and won’t be on a broad basis until/unless USDJPY surges back above perhaps 136.00, the EURUSD surge above 1.0300 is pushed back below 1.0250, and the aggressive AUDUSD move is pummeled back below 0.7000. The get a broader USD resurgence might require higher US yields and a deepening turn to the negative in risk sentiment, until then. Gold (XAUUSD) is heading for a fourth weekly gain ... supported by a weaker dollar after lower-than-expected CPI and PPI data helped reduce expectations for how high the Fed will allow rates to run. However, rising risk appetite as seen through surging stocks and bond yields trading higher on the week, have so far prevented the yellow metal from making a decisive challenge at key resistance above $1800/oz, and the recent decline in ETF holdings and low open interest in COMEX futures points to a market that is looking for a fresh and decisive trigger. Gold needs to hold $1760 in order to avoid a fresh round of long liquidation, while silver is looking for support at $20.23, its 50-day SMA. Copper and industrial metals in general have seen a strong recovery with COPPERSEP22 now eying resistance at $3.7150, its 50-day SMA. Crude oil (CLU2 & LCOV2) traded higher on Thursday ... before some light profit emerged overnight in Asia. Prices have been supported by signs of softer inflation improving the growth outlook, weaker dollar and improving demand, especially in the US where gasoline prices at the pumps have fallen below $4 per gallon for the first time since March. In addition, the International Energy Agency (IEA) lifted its consumption estimate by 380 kb/d, saying soaring gas prices amid strong demand for electricity is driving utilities to switch from expensive gas to fuel based products. Meanwhile, OPEC may struggle to raise output in coming months due to limited spare capacity. WTI futures touched $94/barrel while Brent futures returned to the 100-mark, thereby supporting our view that oil prices have reached a potential through in this correction phase.   US Treasuries (IEF, TLT) see long-end yields surging US yields at the long end of the curve ripped higher with the move aggravated by a somewhat soft 30-year T-bond auction, though the bulk of the move higher in yields unfolded earlier in the day on heavy selling of treasury futures. The 30-year yield rose a chunky 15.5 basis points at one point yesterday and traded to the highest levels in weeks, with the 10-year likewise poking above local highs in the 2.87% yield area. The jump in yields is technically significant if it holds and proceeds to 3.00%, suggesting that the consolidation phase is over. As well, the rise at the long end of the curve has significantly steepened the yield curve from a recent extreme in the 2-10 inversion of –49 basis points to –34 basis points.   What is going on?   US jobless claims rise, University of Michigan ahead US initial jobless claims 262K vs 265K estimate, notably higher than the 248k the prior week and the highest since November 2021. The 4-week moving average of initial jobless claims increased to 252K vs 247.5K last week, but still below 350k levels that can cause an alarm. The modest pickup in claims suggests that turnover at weaker firms is increasing. Key data to watch today is the preliminary University of Michigan survey for August, where expectations are for a modest improvement given lower gasoline prices. The grains sector trades at a five-week high ahead of today’s supply and demand report The Bloomberg Grains Index continues to recover following its 28% June to July correction with gains this past week being led by wheat (WHEATDEC22) and corn (CORNDEC22) in response to a weaker dollar and not least hot and dry weather in the US and another heatwave in Europe raising concerns about yield and production. Hot and dry weather at a critical stage for yield developments ahead of the soon to be harvested crop has given today’s World Agricultural Supply and Demand Estimates report some additional attention with surveys looking for lower yields and with that lower ending stocks. San Francisco Fed President Mary Daly sees 50 basis point hike at September FOMC meeting Daly is not an FOMC voter this year. Unlike her colleague (also a non-voter this year) Neel Kashkari at the Minneapolis Fed, she is satisfied with the median forecast of a 3.4% policy rate by year-end, which would be achieved with a 50 basis point move in September, followed by two 25 basis point hikes in November and December. Kashkari thinks 3.9% is more appropriate for a year-end target policy rate. Daly noted that she is happy to see inflation coming down, but is still open for a larger rate increase in September if necessary. “It really behooves us to stay data dependent and not call it”. The market is currently priced for 60 basis points of hiking at the September 21 FOMC meeting. Illumina shares down 23% on massive earnings miss The DNA-sequencing company slashed its fiscal year outlook last night due to potential penalties in Europe from its acquisition of another company. Its FY EPS forecast is now $2.75-2.90 down from previously $4-4.20.   What are we watching next?   UK Q2 GDP likely to show a contraction ... after April was down 0.2% and May up 0.5%. June GDP is likely to have seen a larger contraction given less working days in the month, as well as constrained household spending as inflation surged to a fresh record high. While there may be a growth recovery in the near-term, the Bank of England clearly outlined a recession scenario from Q4 2022 and that would last for five quarters. Our Macro Strategist Chris Dembik has painted a rather pessimistic picture of the UK economy. Another downside surprise in US inflation US July PPI dipped into negative territory to come in at -0.5% MoM, much cooler than 1% last month or the +0.2% expected. But on a YoY basis, PPI remains up a shocking 9.8%. Core PPI rose 0.4% MoM, which means on a YoY basis core producer prices are up 7.6% (lower than June's +8.2% but still near record highs). Goods PPI fell 1.8%, dominated by a 9.0% drop in energy. Meanwhile, services PPI was up 0.1% in July. Despite the slowdown in both PPI and CPI this week, PPI is still 1.3% points above CPI, suggesting margin pressures and a possible earnings recession. Fed’s Daly said she will be open to a 75bps rate hike at the September meeting. Next signals from the Fed at Jackson Hole conference Aug 25-27 There is a considerable tension between the market’s forecast for the economy and the resulting expected path of Fed policy for the rest of this year and particularly next year, as the market believes that a cooling economy and inflation will allow the Fed to reverse course and cut rates in a “soft landing” environment (the latter presumably because financial conditions have eased aggressively since June, suggesting that markets are not fearing a hard landing/recession). Some Fed members have tried to push back against the market’s expectations for Fed rate cuts next year it was likely never the Fed’s intention to allow financial conditions to ease so swiftly and deeply as they have in recent weeks. The risks, therefore, point to a Fed that may mount a more determined pushback at the Jackson Hole forum, the Fed’s yearly gathering at Jackson Hole, Wyoming that is often used to air longer term policy guidance. Earnings to watch There are no important earnings today except for Flutter Entertainment which has already reported ahead of the trading start in London. Flutter reports first-half revenue of £3.4bn vs est. £3.2bn. Today: Flutter Entertainment Economic calendar highlights for today (times GMT) 0900 – Eurozone Jun. Industrial Production 1400 – US Fed’s Barkin (non-voter) to speak 1400 – US Aug. Preliminary University of Michigan sentiment 1600 – USDA's World Agriculture Supply and Demand report (WASDE) Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – August 12, 2022
Thursday's Bank's of England decision may be record-breaking!

We're Going To Verify Bank's Of England Expectations. What Do We Expect From UK GDP Data?

Jing Ren Jing Ren 12.08.2022 10:05
After their last meeting, the BOE warned that 5 quarters of negative growth were coming. The consensus of expectations shows that there could be starting with data reports from tomorrow. There is an avalanche of data before the market opens, as is customary for the UK, but naturally GDP is likely to be the main focus, particularly given the context. The battle for leadership of the Tory party also continues, with whomever winning the vote in September becoming Prime Minister. The leader in the race so far, Liz Truss, has spoken repeatedly about intervening in the BOE to broaden its mandate. Many question whether this will hurt the bank's credibility. More importantly, a change in the mandate in the middle of an inflationary spiral could make things more difficult. On the other hand, one of the measures that Truss is proposing includes offering a rate outlook forecast, similar to the Fed's dot-plot matrix, which could help reassure markets. It's all about the trends Since many attributes are slowing economic growth, tightening monetary policy to fight inflation, how the BOE could react will also factor into the market's reaction to the data. If GDP is growing, then the BOE has more room to keep hiking. If GDP is starting to contract, then the presumption is that inflation will start to turn around, and the BOE will be less likely to tighten. In this context, the BOE's projection that inflation will peak at 13 sometime later in the year implies that policy will likely remain tight, even if there is a technical move to negative growth. Technical here usually means a couple of decimal points in the red, which, while not good, isn't the same as a full-blown recession such as 2020 or 2008. What to look out for There are three bits of data coming out, with different levels of importance to the market. In general, the "faster" the data, the more the market cares about it. By "faster" that means the most recent, shortest interval. So, in order of importance, we will likely have June, quarterly and annual GDP change figures. June monthly GDP is expected to show -1.3% growth compared to 0.5% prior. Monthly GDP is a lot more volatile thus it's easier to dismiss a large move. But for markets already sensitive to bad news, this could be interpreted as an acceleration to the downside in the near term. The other market moving points Quarterly GDP is likely to get the most attention, as it's expected to show -0.2% growth, compared to +0.8% in the prior quarter. If the forecast is met, that could be the first of negative growth of two needed to technically talk about a recession. But it's such a low margin, that a beat of just two decimals could have an important psychological impact on the markets as well. Annual GDP is projected to show 1.3% growth compared to 3.5% prior. While this on the surface appears to be a strong deceleration, this probably has more to do with comparables. Last year's spring was much better for the economy than the winter, which is why there is a bigger difference between Q1 and Q2. It's not as indicative of the move over the first half of this year, as of what happened last year.
GBP Performance Ahead Of UK GDP Release. US Dollar (USD) Is Supported By Pricing In Future Fed Decisions

GBP Performance Ahead Of UK GDP Release. US Dollar (USD) Is Supported By Pricing In Future Fed Decisions

Jing Ren Jing Ren 12.08.2022 09:41
USDJPY struggles for bids The US dollar consolidates as traders reassess future rate hike moves by the Fed. A bearish RSI divergence and MA cross on the daily chart suggest the start of a correction. A short-lived rebound came to a halt in the supply zone around 135.40 which coincides with the 20-day moving average. A follow-up break below 133.00 indicates that the path of least resistance could be down. 130.50 at the origin of a bullish breakout in June is a critical floor, its breach may extend losses to last May’s lows next to 126.90. EURGBP tests resistance Sterling treads water as the market expects a contraction in the UK’s Q2 GDP. The latest rebound came under pressure near the support-turned-resistance at 0.8470 which sits on the 30-day moving average. A bounce off 0.8410 showed solid interest in keeping the single currency afloat. A close above 0.8470 would send the pair to 0.8520 where a breakout could prompt more sellers to cover their bets, laying the groundwork for a rally to June’ highs next to 0.8580. 0.8410 is the first support in case of hesitation. SPX 500 pulls lower The S&P 500 falls back over concerns that inflation is yet to peak. Divergence between the 20 and 30-day moving averages indicates an acceleration to the upside. The current recovery may have gained traction after a break above June’s peak at 4200. Along with medium-term bears rushing to avoid a squeeze, momentum buying may continue to support the index. May’s high at 4300 would be the next target. An overbought RSI may cause a limited pullback, If this occurs, 4150 is a new support level.
The EUR/USD Pair Showed Local Speculative Interest In Short Positions Yesterday

Forex Market May Surprise Us Today! EUR/GBP May Rally, What GBP/USD Traders Have To Do To Make The Pair Increase?

InstaForex Analysis InstaForex Analysis 12.08.2022 12:17
Relevance up to 09:00 2022-08-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Although the US inflation data has been very encouraging lately, Fed officials said the central bank is unlikely to change its stance on interest rates this year and the next. Minneapolis Fed President Neil Kashkari noted that the benchmark rate could reach 3.9% by the end of this year and rise to 4.4% by the end of 2023.   Chicago Fed President Charles Evans had the same view, mentioning that although inflation eased, it is still unacceptably high. He said they will ensure that inflation returns to 2%. At the moment, inflation has fallen below estimates, prompting investors to lower bets that the Fed will go for another three-quarters of a percentage point rate hike in September. But San Francisco Fed President Mary Daly said in a recent speech that it is too early to declare victory in the central bank's fight against inflation, so it is likely that the Fed will still implement another 75 basis point hike in the next policy meeting.     In another note, the US released the latest data on jobless claims, which showed an increase for the second week in a row. It remained at the highest level since November, indicating continued moderation in the labor market, which is what the Federal Reserve is trying to achieve. Initial jobless claims rose by 14,000 to 262,000, slightly lower than the expected 265,000. The reason why jobless claims is on the rise is the layoffs and suspended hiring in companies, especially in the technology sector. Demand for new workers is also declining as the Federal Reserve raises interest rates. The four-week moving average, smoothing out the fluctuations, rose to 252,000. Another important report was the US producer price data, which unexpectedly fell in July due to lower energy prices. It dipped 0.5% from the previous month, but rose 9.8% from last year. There was also data on producer prices, which rose 0.2% from June and 7.6% from a year earlier. The numbers suggest that inflationary pressures are beginning to ease, which could eventually lead to a slowdown in consumer price growth.     In terms of the forex market, EUR/USD is trading above 1.0300 and has good chances for further growth. Consolidating beyond 1.0320 will give buyers an excellent chance to return to 1.0370, then go to 1.0430 and 1.0500. But if pressure returns around 1.0270, the pair could fall to 1.0230 and 1.0200. In GBP/USD, buyers need to stay above 1.2180 because only that can push the quote to 1.2220, 1.2260 and 1.2345. If pressure return around 1.280, the pair will fall to 1.2130 and 1.2100.   Read more: https://www.instaforex.eu/forex_analysis/318788
Chinese Data Shakes Dollar, US Stocks Higher Amid Disinflation Concerns and Bank Earnings Awaited

Today (USD) US Dollar May Skyrocket And Stock Market May Do The Opposite! | What's Possibly Ahead Of EUR/USD And GBP/USD?

InstaForex Analysis InstaForex Analysis 12.08.2022 12:23
Relevance up to 09:00 2022-08-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. According to the latest data, Dow lost its previous gains, while the S&P 500 and Nasdaq moved into negative territory The rally in equity markets is beginning to slow down amid growing fears that the Fed may still take advantage of the situation and continue raising rates because of high inflation. According to the latest data, Dow lost its previous gains, while the S&P 500 and Nasdaq moved into negative territory. Positive sentiment is also decreasing in Europe and Asia, while dollar and Treasury yields show growth. The recently-released jobless claims data in the US, albeit lower than expected, indicated an increase against the previous value, which probably convinced market players that the Fed will not miss a chance to continue actively raising interest rates. San Francisco Fed President Mary Daly said it is still necessary to raise rates in September, not by 0.25%, but by 0.50% or even 0.75%. This is why market players should closely follow the economic statistics coming in today, as that could signal what can be expected next week. There is a huge chance that dollar will resume growth, while the stock markets will end their rally. Forecasts for today:         EUR/USD The pair is trading above 1.0300. Increased selling pressure will push the quote to 1.0210. GBP/USD Although the pair is trading above 0.7100, an increase in selling pressure will bring the quote to 1.2080.   Read more: https://www.instaforex.eu/forex_analysis/318790
Singapore's non-oil domestic exports shrank 20.6% year-on-year

Singapore Is Still Strong Despite All The Predictions. Inflation Remains High

Saxo Bank Saxo Bank 12.08.2022 12:35
Summary:  While the growth outlook for Singapore is deteriorating on the back of weaker external demand, we believe exposure to the Singapore market remains a key portfolio diversifier given its safe-haven status. Rising interest rates continue to position banking stocks favourably, while the reopening of the regional and global economies brings likely benefits to retail and hospitality REITs as well as other travel related stocks and sectors. There are also some stocks to consider in-line with our preferred global equity themes of commodities and defence. Macro conditions are deteriorating The final print of Singapore’s Q2 GDP was revised lower to 4.4% y/y from an advance estimate of 4.8% earlier, suggesting a q/q contraction of 0.2% as against gains of 0.2% q/q suggested by the advance estimate or the 0.8% q/q growth seen in the first quarter. The Ministry of Trade and Industry (MTI) has also narrowed the forecast for annual 2022 growth to 3-4% from 3-5% earlier amid rising global slowdown risks. Given Singapore is an export-driven economy, it remains prone to the volatile external environment. Meanwhile, China’s Zero-covid strategy has hampered global supply chains as well as export demand from Singapore. These risks keep the threat of a technical recession – which is defined as two or more consecutive quarters of negative GDP growth – alive. The officials have, however, ruled that out for now and suggest a mild positive growth for Q3 and Q4. Is more monetary policy tightening on the cards? Singapore’s inflation remains high, but with core at 4.4%, it is still below the global inflation levels. We can certainly feel the price pressures biting, especially in rents and transportation. That is likely to remain a key concern for the Monetary Authority of Singapore (MAS), while the gloomier growth picture will only add some caution. Headwinds from external demand will be somewhat offset by a service sector growth picking up as the local and regional economies continue to broaden their reopening measures. This is boosting retail sales and tourism-led spending, while the labor market is also still tight. What could possibly be ruled out is an off-cycle move, or possibly a re-centering of the S$NEER policy band, unless core inflation surprises significantly to the upside. Singapore’s monetary policy has entered a restrictive mode with four tightening moves since October 2021, and further steepening of the S$NEER slope cannot be ruled out. What to consider in the markets? Singapore’s safe-haven status makes it an important stabilizer in the portfolios, especially in the choppy global markets. Singapore equities are riding on services demand recovery and sustained export momentum. The banking stocks such as DBS (D05:xses), UOB (U11:xses) and OCBC (O39:xses) remain well positioned to benefit from the rising interest rates, even as the wealth management income takes a haircut due to the weak market sentiment. Meanwhile, REITs offer a good dividend yield, and therefore inflation protection. Travel related stocks and sectors, such as retail REITs, hospitality REITs, Singapore Airlines (C6L:xses) or SATS (S58:xses) could also benefit from a sustained reopening momentum. Out global equity baskets have shown an outperformance from the Commodities and Defence baskets so far this year. Defence stocks could remain in focus with the increasing geopolitical tensions, and that means Singapore Technologies Engineering (S63:xses) may be worth a look. Green transformation also necessitates a look at Sembcorp Industries (U96:xses), while Singtel (Z77:xses) remains in a position to ride through the economic crisis with its rapid 5G adoption. Wilmar (F34:xses), an agribusiness firm with market cap greater than Singapore Airlines, has gained tremendous attention due to the tight edible oil markets since the Ukraine invasion, and its exposure to consumption in some of the largest emerging markets also makes it a key inflation play. Some of the sectors to remain cautious about would be the technology or manufacturing with exposure to China. REITs with exposure to China’s property market also face further threat. Key risk factors to watch While the external demand outlook remains fragile and dampens the growth prospects of Singapore economy and companies, there are also risks from a global tightening wave which could result in capital outflows. Meanwhile, rising geopolitical tensions in the region could also result in cautious investor sentiment. There remains a risk of US-China trade tensions coming back, and that could be a headwind for Singapore. Lastly, a resurgence of Covid remains a key risk to watch in Singapore and Asia, as the response will likely remain stricter than Europe despite a high level of vaccination.   Source: Singapore Market Pulse: Weaker macro conditions, but safe-haven reputation supports
Asia Morning Bites: Inflation Data in Focus, FOMC, ECB, and BoJ Meetings Ahead

Poland: CPI Breaks Record! ING Economics Says The Peak Is Still Ahead!

ING Economics ING Economics 12.08.2022 13:09
July CPI has been revised to 15.6% year-on-year, the highest level so far in 2022. Yet the inflation peak is still ahead of us and we expect it in the autumn as the heating season begins and drives up prices. The Monetary Policy Council (MPC) will be forced to hike rates further We are continuing to see high price growth in restaurants and hotels in Poland New inflation record for 2022 The July inflation estimate has been revised to 15.6% year-on-year, from the 15.5% YoY reported previously. Thus, consumer inflation set a new record this year. Goods prices rose by 16.9% YoY, while services prices increased by 11.7% YoY, up from 16.8% YoY and 11.5% YoY, respectively, a month earlier.   On a monthly basis, prices rose by 0.5%, the slowest rise since February, when indirect tax cuts under the Anti-Inflation Shield, including lower VAT on food, took effect. Fuel prices fell by 2.6% month-on-month in July, while prices of energy carriers increased by 1.6% MoM, mainly driven by a further increase in the price of heating fuels (5.0% MoM). Food price increases were slightly lower (0.5% MoM) than those seen in June. The upward pressure on meat prices has eased somewhat in recent months. There are also seasonal reductions in the prices of fruit and vegetables. On the other hand, sugar prices rose strongly (7% MoM).   On the basis of detailed July CPI data, we estimate that core inflation rose to around 9.2% YoY last month from 9.1% YoY in June. Among the underlying categories, the significant price increase in the 'recreation and culture' category is noteworthy, boosted by increases in package holidays (especially abroad) and increases in radio and TV charges. We are continuing to see high price growth in restaurants and hotels as well. Compared to July 2021, prices in this category were 16.4% higher. CPI inflation and its composition, %YoY, percentage points Source: GUS. Inflation to rise further in the autumn The scale of the price increase in July does not give room for complacency for the MPC. Although the holiday period brings a deceleration in inflation and we may even witness a slight decline in August (thanks to cheaper gasoline), we set another record this year, with prices rising by double-digit levels on an annual basis. Furthermore, we expect that this year's peak in inflation is still ahead of us. Our forecasts indicate that upward pressure on prices will intensify again in the autumn, driven by factors including (1) the end of the summer promotion at the largest fuel distributor, (2) further increases in fuel prices as the heating season begins, and (3) increases in regulated prices, including electricity, heating, water and sewerage charges. Food prices are also likely to rise. High electricity and fuel costs are driving up the cost of storing and transporting goods (logistics), prompting retail chains to raise prices. Moreover, another significant increase in regulated prices is expected in early 2023. More rate hikes ahead Inflation, therefore, is far from being under control and the MPC will be forced to hike interest rates further, albeit on a much smaller scale than we saw in the first half of this year. The National Bank of Poland is unlikely to hike rates to the 8.5% level we expected earlier this year. In the context of still high inflation risks, declarations by some policymakers that the end of the interest rate hiking cycle is near, and that rate cuts may come in 2023, are in our view premature and may result in zloty depreciation.  Read this article on THINK TagsZloty NBP National Bank of Poland CPI Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

Yesterday GBP/USD Went Up Because Of Weaker US Dollar. Today Pound Has Been Hit By GDP

Kenny Fisher Kenny Fisher 12.08.2022 14:02
The British pound is in negative territory today, after a contraction in UK GDP. In the European session, GBP/USD is trading at 1.2126, down 0.61% on the day. British economy declines in Q2 The British pound posted dazzling gains on Wednesday, surging 1.19%. The impressive climb was, however, a case of US dollar weakness, rather than any newfound strength in the pound. Inflation in the US was unexpectedly weaker than forecast, which raised market hopes that the Fed will ease policy. This led to the US dollar being less attractive and the currency took a nasty spill against all the majors. Sterling hasn’t fared as well after the UK posted the second-quarter GDP report. The economy fell in July by -0.1% QoQ, following a 0.8% gain in June (-0.2% exp). On an annualized basis, GDP growth slowed to 2.9%, within expectations but sharply down from 8.7% in Q1. The outlook does not look good as we head towards winter, with UK households about to be hit with sharp increases in energy prices. Consumers are already struggling with a nasty cost of living crisis, and as they tighten the purse strings, the spectre of a recession will become that much more likely. Another key indicator, Manufacturing Production, came in at -1.6% MoM, down from a 1.7% gain in May (-1.8% exp). This was the fourth decline in five months, pointing to a worrying downtrend in manufacturing. The week wraps up with UoM Consumer Sentiment, a key confidence indicator. With the cost of living crisis in the US, it’s no surprise that the index has tumbled – falling from 65.7 in March to just 51.5 in June. This points to weak expansion, just above the neutral 50.0 line. The July forecast calls for a slight improvement to 52.5 points. GBP/USD Technical GBP/USD continues to test resistance at 1.2241. Next, there is resistance at 1.2361  There is support at 1.2123 and 1.2061 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD slips on GDP, US confidence data next - MarketPulseMarketPulse
RBA Pauses Rates as Australian Dollar Slides; ISM Manufacturing PMI in Focus

Dollar (USD) Became Stronger, Not Enough Yet. Fed Better Meet Expectations!

John Hardy John Hardy 12.08.2022 14:23
Summary:  US treasury yields at the long end of the yield curve jumped higher yesterday to multi-week highs, a challenge to widespread complacency across global markets. The USD found a modicum of support on the development, though this was insufficient to reverse the recent weakening trend. It will likely take a more determined rise in US yields and a tightening of financial conditions, possibly on further Fed pushback against market policy expectations, to spark a more significant USD comeback. FX Trading focus: US yields jump, not yet enough to reverse recent USD dip A very interesting shift in the US yield curve yesterday as long yields jumped aggressively higher, with the 30-year yield getting the most focus on a heavy block sale of US “ultra” futures and a softer than expected 30-year T-bond auction from the US treasury. The 30-year benchmark yield jumped as much as 15 basis points from the prior close, with the 10-year move a few basis points smaller. We shouldn’t over-interpret a single day’s action, but it is a technical significant development and if it extends, could be a sign of tightening liquidity as the Fed ups its sales of treasuries and even a sign that market concern is growing that the Fed will fail to get ahead of inflation. As for the market reaction, the USD found some support, but it was modest stuff – somewhat surprisingly in the case of the normally very long-US-yield-sensitive USDJPY. Overnight, a minor shuffle in Japanese PMI Kishida’s cabinet has observers figuring that there is no real determined pushback yet against the Kuroda BoJ’s YCC policy, with focus more on bringing relief to lower income households struggling with price rises for essentials. Indeed, BoJ policy is only likely to come under significant pressure again if global yields pull to new cycle highs and the JPY finds itself under siege again. As for USDJPY, it has likely only peaked if long US yields have also peaked for the cycle. Chart: EURUSD EURUSD caught in limbo here, having pulled up through the resistance in the 1.0275+ area after a long bought of tight range trading, but not yet challenging through the next key layer of resistance into 1.0350+. It wouldn’t take much of a further reversal here to freshen up the bearish interest – perhaps a dip and close below 1.0250 today, together with a bit of follow through higher in US yields and a further correction in risk sentiment. Eventually, we look for the pair to challenge down well through parity if USD yields retest their highs and beyond. Source: Saxo Group Elsewhere – watching sterling here as broader sentiment may be at risk of rolling over and as we wind our way to the conclusion of the battle to replace outgoing Boris Johnson, with Liz Truss all but crowned. Her looser stance on fiscal prudence looks a sterling negative given the risks from UK external deficits. Her instincts seem pro-supply side on taxation, but the populist drag of cost-of-living issues has shown her to be quick to change her stripes – as she has often been, having reversed her position on many issues, including Brexit (was a former remainer). Today’s reminder of the yawning trade deficit (a current run rate of around 10% of GDP) and the energy/power situation together with dire supply side restraints on the UK economy have us looking for sterling weakness – a start would be a dip below 1.2100 in GBPUSD, which would reverse the reaction earlier this week to the US July CPI release. The week ahead features an RBNZ on Wednesday (market nearly fully priced for another two meetings of 50 basis points each). NZDUSD has looked too ambitious off the lows – there is no strong external surplus angle for the kiwi like there is for the Aussie – might be a place to get contrarian to the recent price action if global risk sentiment is set to roll over again finally now that the VIX has pushed all the way to 20 (!).  A Norges Bank meeting on Thursday may see the bank hiking another 50 basis points as it continues to catch up to inflationary outcomes. The US FOMC minutes are up next Wednesday and may be a bit of a fizzle, given that the bulk of the easing financial conditions that the Fed would like to push back against came after the meeting. Table: FX Board of G10 and CNH trend evolution and strength. The US dollar hasn’t gotten much from the latest development in yields – watching the next couple of sessions closely for direction there, while also watching for the risk of more sterling downside, while NZD looks overambitious on the upside. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs. The EURGBP turn higher could follow through here – on the lookout for that development while also watching GBPUSD status in coming sessions and whether the EURUSD move higher also follows through as per comments on the chart above. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1400 – US Fed’s Barkin (non-voter) to speak 1400 – US Aug. Preliminary University of Michigan sentiment Share Source: FX Update: US yield jump brings USD resilience if not a reversal.
The EUR/USD Pair Is Still In A High Position On The 1H Chart

Forex: Technical Look At Euro To US Dollar (EUR/USD) - 12/08/22

InstaForex Analysis InstaForex Analysis 12.08.2022 15:45
Relevance up to 13:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Technical outlook: EURUSD slipped through 1.0290 intraday on Friday after reversing from the 1.0360 highs earlier this week. Looking into the price action in the past two trading sessions, the single currency pair has been consolidating between 1.0280 and 1.0370. If we assume that a triangle is unfolding, the sideways movement will continue for a while before prices breakout towards 1.0450. EURUSD had been in a downtrend since January 2021 after hitting highs at 1.2350. The bears managed to produce a series of lower lows and lower highs and carve a potential bottom at around 0.9952 in July 2022. Since then, a larger-degree counter-trend rally is unfolding with potential targets towards 1.0450 and 1.0800 in the next few trading sessions. On the flip side, if prices continue to slide from current levels breaking consistently below 1.0270, the bears might take control and drag the pair lower towards the 1.0075-1.0100 area. The currency pair is expected to produce a bullish bounce thereafter and resume higher towards 1.0800 and 1.0900 at least. Trading plan: Potential rally towards 1.0800-1.0900 against 0.9952 Good luck!   Read more: https://www.instaforex.eu/forex_analysis/288344
Be Careful! UK GDP Went Down! GBP/USD What Should We Watch Out For?

Be Careful! UK GDP Went Down! GBP/USD What Should We Watch Out For?

Alex Kuptsikevich Alex Kuptsikevich 12.08.2022 09:41
The UK monthly statistics package showed that the economy lost 0.1% in the second quarter (0.2% expected), and the annual growth rate collapsed from 8.7% to 2.9% (2.8% expected). For the month, the decline was 0.6%, half the forecasts. A similar "better than might have been" is evident in the other indicators released today. Industrial production fell 0.9% against an expected 1.3% and left something from the last month's gain. Construction dipped 1.4%, against a forecasted 2.0%. The service sector lost 0.4% of its volume, the first contraction since last March. While this data is better than forecast, it is unlikely to inspire buyers of the pound or investors in the stock market. We see more market sensitivity to price data than the economy. The GBPUSD is now struggling with downtrend resistance in the form of the 50-day moving average, trying to consolidate higher. On Wednesday, it formally succeeded, but the pound failed to develop the offensive, which might be the first worrying signal that the bears retain control of the markets. Whether GBPUSD closes the day above 1.22 or below that mark may determine next week's performance. An ability to stay near or rewrite the local highs would be a bullish signal, sending the sterling further into the 1.25-1.2650 range. A close on a weak note or a move under 1.2140 would indicate that the recent rebound was only a temporary correction as part of a long-term downtrend. And in this case, GBPUSD could head down with an intermediate target below 1.2000 and a potential next target around 1.1800.
What's ahead of Euro against greenback today? Let's look at Stefan Doll's review

Forex: Technical Analysis - Euro To US Dollar (EUR/USD) And GBP/USD (British Pound To US Dollar) - 12/08/22

InstaForex Analysis InstaForex Analysis 12.08.2022 16:13
Relevance up to 14:00 2022-08-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher time frames Yesterday, the pair managed to stay above the weekly short-term trend (1.0285). It is the last trading day of the week, so the focus is on the closing level today. Bullish sentiment is likely to increase if the price closes above the weekly short-term trend (1.0285) today. The nearest bullish target is seen in the 1.0419 – 1.0465 range of the Ichimoku cloud. Support is still standing at the daily golden cross levels (1.0246 – 1.0210 – 1.0160 – 1.0111).     H4 – H1 In lower time frames, the pair is still in the zone of uncertainty and correction. The key target is at the central daily Pivot level of 1.0320. Bearish power is likely to increase after a breakout through the MA and its reversal. Another bullish intraday target is at classic Pivot levels of 1.0364 – 1.0409 – 1.0453, in line with resistance. Additional bearish targets stand at 1.0231 – 1.0186 support (classic Pivot). *** GBP/USD     Higher time frames The pair entered the range of the daily cloud but failed to extend growth yesterday. Since it is the last trading day of the week, the focus is on the closing level today. If the price closes below this week's tested 1.2082 resistance (daily cloud + weekly short-term trend), a pullback will occur and bearish sentiment will grow. Alternatively, in case of a breakout through the daily cloud (1.2270) and consolidation in the bullish zone, bullish sentiment is likely to increase.     H4 – H1 In lower time frames, moving down, the pair tested the weekly long-term trend at 1.2131. Once the pair breaks and consolidates below the level, bearish sentiment is likely to rise. In such a case, support is seen at 1.2082 and 1.2000 in the higher time frames. *** Indicators used in technical analysis: higher time frames – Ichimoku Kinko Hyo (9.26.52); Fibo Kijun H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/318831
Forex: XAU/USD Is Rising For The 3rd Day In A Row!

Gold Trading. Gold Is Spreading It's Wings!?

InstaForex Analysis InstaForex Analysis 11.08.2022 15:20
Relevance up to 12:00 2022-08-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results.The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical analysis: Gold has been trading downside today and I see the breakout of the rising channel, which is sign that sellers are in control. Trading recommendation: Due to the breakout of the rising channel in the background, I see potential for further downside movement. Watch for potential selling opportunities with the downside objectives at the price of $1.783 and $1.770. Stochastic oscillator is showing overbought condition and bear cross, which is sign that sellers are taking control. Key resistance is set at the price of $1.805 Source: Forex Analysis & Reviews: Analysis of Gold for August 11,.2022 - Breakout of the rising channel in the backgorund
The Gold Rally Is Continuing To Stall, This Could Be A Good Year For Crude Oil

WTI Astonishing Streak! Japan Jumps. China, Australia And South Korea Are In Trouble?

Marc Chandler Marc Chandler 12.08.2022 15:15
Overview: The markets are putting the finishing touches on this week’s activity. Japan, returning from yesterday’s holiday bought equities, and its major indices jumped more than 2%. China, South Korea, and Australia struggled. Europe’s Stoxx 600 is firmer for the third consecutive session. It is up about 1.3% this week. US futures are also firmer after reversing earlier gains yesterday to close lower on the day. The US 10-year yield is flat near 2.88%, while European benchmarks are 4-6 bp higher. The greenback is mixed. The dollar-bloc currencies and Norwegian krone are slightly firmer, while the Swedish krona, sterling, and the yen are off around 0.3%-0.6%. Emerging market currencies are also mixed, though the freely accessible currencies are mostly firmer. The JP Morgan Emerging Market Currency Index is up about 1.15% this week, ahead of the Latam session, which if sustained would be the strongest performance in three months. Gold is consolidating at lower levels having been turned back from $1800 in the middle of the week. Near $1787.50, it is up less than 0.7% for the week. September WTI is edging higher for the third consecutive session, which would match the longest streak since January. US natgas surged 8.2% yesterday but has come back offered today. It is off 2.3%. Europe’s natgas benchmark is snapping a three-day advance of nearly 8% and is off 1.8% today. Iron ore rose 2.2% yesterday and it gave most of its back today, sliding almost 1.7%. September copper is unchanged after rallying more than 3.3% over the past two sessions. September wheat has a four-day rally in tow but is softer ahead of the Department of Agriculture report (World Agricultural Supply and Demand Estimates). Asia Pacific   Japan and China will drop some market sensitive high-frequency economic data as trading begins in the new week.  Japan will release its first estimate of Q2 GDP. The median in Bloomberg's survey and the average of a dozen Japanese think tanks (cited by Jiji Press) project around a 2.7% expansion of the world's third-largest economy, after a 0.5% contraction in Q1. Consumption and business investment likely improved. Some of the demand was probably filled through inventories. They added 0.5% to Q1 growth but may have trimmed Q2 growth. Net exports were a drag on Q1 (-04%) and may be flat. The GDP deflator was -0.5% in Q1 and may have deteriorated further in Q2. Some observers see the cabinet reshuffle that was announced this week strengthening the commitment to ease monetary policy. The deflation in the deflator shows what Governor Kuroda's successor next April must address as well. China reports July consumption (retail sales), industrial output, employment (surveyed jobless rate), and investment (fixed assets and property).  The expected takeaway is that the world's second-largest economy is recovering but slowly. Industrial output and retail sales are expected to have edged up. Of note, the year-to-date retail sales compared with a year ago was negative each month in Q2 but is expected to have turned positive in July. The year-over-year pace of industrial production is expected to rise toward 4.5%, which would be the best since January. The housing market, which acted as a critical engine of growth is in reverse. New home prices (newly build commercial residential building prices in 70 cities) have been falling on a year-over-year basis starting last September, and likely continued to do so in July. Property investment (completed investment in real estate) likely fell for the fourth consecutive month. It has slowed every month beginning March 2021. The pace may have accelerated to -5.6% year-over-year after a 5.4% slide in the 12-months through June. The surveyed unemployed rate was at 4.9% last September and October. It rose to 6.1% in April and has slipped back to 5.5% in June. The median forecast in Bloomberg's survey expects it to have remained there in July. Lastly, there are no fixed dates for the lending figures and the announcement of the one-year medium-term lending facility rate. Lending is expected to have slowed sharply from the surge in June, while the MLF rate is expected to be steady at 2.85%. Over the several weeks, foreign investors have bought a record amount of Japanese bonds.  Over the past six weeks, foreigners snapped up JPY6.44 trillion (~$48 bln). It may partly reflect short-covering after the run-in with the Bank of Japan who bought a record amount to defend the yield-curve control cap of 0.25% on the 10-year bond. There is another consideration. For dollar-based investors, hedging the currency risk, which one is paid to do, a return of more than 4% can be secured. At the same time, for yen-based investors, hedging the currency risk is expensive, which encourages the institutional investors to return to the domestic market. Japanese investors have mostly been selling foreign bonds this year. However, the latest Ministry of Finance data shows that they were net buyers for the third consecutive week, matching the longest streak of the year. Still, the size is small. suggesting it may not be a broad or large force yet. Although the US 10-year yield jumped 10 bp yesterday, extending its recovery from Monday's low near 2.75% for a third session, the dollar barely recovered against the yen.  After falling 1.6% on Wednesday, after the softer than expected US CPI, the greenback rose 0.1% yesterday and is edging a little higher today. Partly what has happened is that the exchange rate correlation with the 10-year yield has slackened while the correlation with the two-year has increased. In fact, the correlation of the change in the two-year and the exchange rate is a little over 0.60 and is the highest since March. The dollar appears to be trading comfortably now between two large set of options that expire today. One set is at JPY132 for $860 mln and the other at JPY134 for $1.3 bln. Around $0.7120, the Australian dollar is up about 3% this week and is near two-month highs. It reached almost $0.7140 yesterday. The next technical target is in the $0.7150-$0.7170 area. Support is seen ahead of $0.7050. Next week's data highlight is the employment data (August 18). The greenback traded in a CNY6.7235-CNY6.7600 on Wednesday and remained in that range yesterday and today. For the second consecutive week, the dollar has alternated daily between up and down sessions for a net change of a little more than 0.1%. The PBOC set the dollar's reference rate at CNY6.7413, tight to expectations (Bloomberg's survey) of CNY6.7415. Europe   The UK's economy shrank by 0.6% in June, ensuring a contraction in Q2.  The 0.1% shrinkage was a bit smaller than expected but the weakness was widespread. Consumption fell by 0.2% in the quarter, worse than expected, while government spending collapsed by 2.9% after a 1.3% pullback in Q1. A decline in Covid testing and slower retail sales were notable drags. The one bright spot was business investment was stronger than expected. The June data itself was miserable, though there was an extra holiday (Queen's jubilee). All three sectors, industrial output, services, and construction, all fell in June and the trade balance deteriorated. The market's expectation for next month's BOE meeting was unaffected by the data. The swaps market has about an 85% chance of another 50 bp hike discounted.  Industrial output in the eurozone rose by 0.7%, well above the 0.2% median forecast in Bloomberg's survey and follows a 2.1% increase in May.  The manufacturing PMI warned that an outright contraction is possible. Of the big four members, only Italy disappointed. The median forecast in Bloomberg's survey anticipated a decline in German, France, and Spain. Instead, they reported gains of 0.4%, 1.4%, and 1.1% respectively. Industrial output was expected to have contracted by 0.1% in Italy and instead it reported a 2.1% drop. In aggregate, the strength of capital goods (2.6% month-over-month) and energy (0.6%) more than offset the declines in consumer goods and intermediate goods. The year-over-year rise of 2.4% is the strongest since last September. The disruption caused by Russia's invasion of Ukraine and the uneven Covid outbreaks and responses are as Rumsfeld might have said known unknowns.  But the disruptive force that may not be fully appreciated is about to get worse. The German Federal Waterways and Shipping Administration is warning that water in the Rhine River will fall below a critical threshold this weekend. At an important waypoint, the level may fall to about 13 inches (33 centimeters). Less than around 16 inches (40 centimeters) and barges cannot navigate. An estimated 400k barrels a day of oil products are sent from the Amsterdam-Rotterdam-Antwerp region to Germany and Switzerland. The International Energy Agency warns that the effects could last until late this year, and hits landlocked countries who rely on the Rhine the hardest. Bloomberg reported that Barge rates from Rotterdam to Basel have risen to around 267 euros a ton, a ten-fold increase in a few months. The strong surge in the euro to almost $1.0370 on Wednesday has stalled.  The euro is consolidating inside yesterday's relatively narrow range (~$1.0275-$1.0365). The momentum traders may be frustrated by the lack of follow-through. We suspect a break of $1.0265 would push more to the sidelines. The downtrend line from the February, March, and June highs comes in slightly above $1.0385 today. The broad dollar selloff in response to the July CPI saw sterling reach above $1.2275, shy of the month's high closer to $1.2295. Similar to the euro, sterling stalled. It has slipped through yesterday's low (~$1.2180). A break of the $1.2140 area could see $1.2100. That said, the $1.20 area could be the neckline of a double top and a convincing break would signal the risk of a return to the lows set a month ago near $1.1760. America   Think about the recent big US economic news.  It began last Friday with a strong employment report, more than twice what economists expected (median, Bloomberg survey) and a new cyclical low in unemployment. The job gains were broadly distributed. That was followed by a softer than expected CPI and PPI. Some observers placed emphasis on the slump in productivity and jump in unit labor costs. Those are derived from GDP figures and are not measured separately, though they are important economic concepts. Typically, when GDP is contracting, productivity contracts and by definition, unit labor costs rise. In effect, the market for goods and services adjusts quicker the labor market, and the market for money, even quicker. If the economy expands as the Atlanta Fed GDPNow tracker or the median in Bloomberg's survey project (2.5% and 2.0%, respectively), productivity will improve, and unit labor costs will fall. Barring a precipitous fall today, the S&P 500 and NASDAQ will advance for the fourth consecutive week.  The 10-year yield fell by almost 45 bp on the last three week of July and has recovered around half here in August. That includes five basis points this week despite the softer inflation readings. The two-year note yield fell almost 25 bp in the last two weeks of July and jumped 34 bp last week. It is virtually flat this week around 3.22%. The odds of a 75 bp rate hike at next month's FOMC meeting fell from about 75% to about 47%. The year-end rate expectation fell to 3.52% from 3.56%. Some pundits claim the market is pricing in a March 2023 cut, but the implied yield of the March 2023 Fed funds futures contract is 18 bp above the December 2022 contract. It matches the most since the end of June. Still, while the Federal Reserve is trying to tighten financial conditions the market is pushing back. The Bloomberg Financial Conditions Index is at least tight reading since late April. The Goldman Sachs Financial Condition index is the least tight in nearly two months.  US import and export prices are the stuff that captures the market's imagination.  However, the preliminary University of Michigan's consumer survey, and especially the inflation expectations can move the markets, especially given that Fed Chair Powell cited it as a factor encouraging the 75 bp hike in June. The Bloomberg survey shows the median expectation is for a tick lower in inflation expectations, with the one-year slipping to 5.1% from 5.2%. The 5-10-year expectation is seen easing to 2.8% from 2.9%. If accurate, it would match the lowest since April 2021. The two-year breakeven (difference between the conventional yield and the inflation-protected security) peaked in March near 5% and this week reached 2.70%, its lowest since last October. It is near 2.80% now. Mexico delivered the widely anticipated 75 bp hike yesterday.  The overnight rate target is now 8.50%. The decision was unanimous. It is the 10th consecutive hike and concerns that AMLO's appointments would be doves has proven groundless. The central bank meets again on September 29. Like other central banks, it did not pre-commit to the size of the next move, preserving some tactical flexibility. If the Fed hikes by 75 bp, it will likely match it. Peru's central bank hiked its reference rate by 50 bp, the 10th consecutive hike of that magnitude after starting the cycle last August with a 25 bp move. It is not done. Lima inflation was near 8.75% last month and the reference rate is at 6.50%. The Peruvian sol is up about 1.2% this month, coming into today. It has appreciated by around 3.25% year-to-date, making it the second-best performer in the region after Brazil's 8.1% rise. Argentina hiked its benchmark Leliq rate by 950 bp yesterday to 69.5%. It had delivered an 800 bp hike two weeks again. Argentina's inflation reached 71% last month. The Argentine peso is off nearly 23.5% so far this year, second only to the Turkish lira (~-26%). The US dollar fell slightly below CAD1.2730 yesterday, its lowest level since mid-June. The slippage in the S&P 500 and NASDAQ helped it recover to around CAD1.2775. It has not risen above that today, encouraged perhaps by the firmer US futures. Although the 200-day moving average (~CAD1.2745) is a good mile marker, the next important chart is CAD1.2700-CAD1.2720. A convincing break would target CAD1.2650 initially and then CAD1.2600. While the Canadian dollar has gained almost 1.4% against the US dollar this week (around CAD1.2755), the Mexican peso is up nearly 2.4%. The greenback is pressing against support in the MXN19.90 area. A break targets the late June lows near MXN19.82. The MXN20.00 area provides the nearby cap.       Disclaimer   Source: Heading into the Weekend, Dollar's Downside Momentum Stalls
The US Dollar Weakens as Chinese and Japanese Intervention Threats Rise, While US CPI and UK Jobs Data Await: A Preview

Yen steady as GDP within expectations

Kenny Fisher Kenny Fisher 15.08.2022 17:14
The Japanese yen has started the week quietly. In the European session, USD/JPY is trading at 133.29, down 0.14%. This follows a positive week for the yen, in which USD/JPY declined by 1.15%. Japan’s economy expands by 0.5% Japan’s GDP for the second quarter rose 0.5%. The reading was a notch below the forecast of 0.6%, and the yen showed little interest. Domestic consumption, which makes up some 60% of Japan’s GDP, rose by 1.1%, reflective of pent-up demand after Covid restrictions were lifted in March. As well, exports increased by 0.9%, in Q2, certainly good news as the global economic outlook remains gloomy. On an annualized basis, GDP rose 2.2%, shy of the estimate of 2.6%. Still, the reading indicated that Japan’s economy has returned to its pre-Covid size, although the recovery has lagged behind other major industrial countries. What does the GDP reading mean for the Bank of Japan? In all likelihood, not very much. Inflation has risen slightly above the BoJ’s 2% target, but is low compared to other major economies, which are grappling with red-hot inflation and have embarked on an aggressive rate-tightening cycle. Prices have been rising more quickly than wages, meaning that real wage growth has been on the decline. As well, inflation has largely been driven by high commodity prices, which may not be a long-term trend. Until there are signs that inflationary pressures are broadly based, the BoJ will do little more than tweak its policy. For the BoJ, the primary focus is not inflation, as is the case with the Fed and the BoE, but rather the need to support the economy. This means “business as usual” for the BoJ until it is convinced that inflation is sustainable. . USD/JPY Technical  133.60 is a weak resistance line, followed by 1.3504 There is support at 131.62 and 130.70 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen steady as GDP within expectations - MarketPulseMarketPulse
Asia morning bites - 16.05.2023

In Japan, Gross Domestic Product (GDP) Hit 0.5% QoQ, But It's Expected To Decrease In Q3 Because Of Inflation And Covid

ING Economics ING Economics 16.08.2022 08:29
Japan's real GDP growth accelerated in the second quarter as Covid-19 restrictions eased. As expected, domestic demand, including private consumption and investment, led the recovery Domestic demand is leading Japan's recovery 0.5% Quarter-on-quarter   Lower than expected 2Q GDP rose 0.5% QoQ sa (vs revised 0.0% in 1Q) GDP grew 0.5% QoQ seasonally-adjusted in the second quarter, slightly missing the market consensus of 0.6%, while first quarter GDP was revised up from -0.1% to 0.0%. Private consumption, which accounts for about 60% of Japan's output, increased by 1.1%. Although the pent-up demand seems to have eased as the initial reopening effect fades, private consumption is highly likely to be the growth engine for the rest of the year. Inventory contributed negatively to the second quarter growth but the inventory cycle will likely turn favourable for the current quarter's growth as global supply chain bottlenecks are expected to improve.  Meanwhile, exports increased 0.9% in the second quarter, mainly due to solid demand from the US and EU. However, the contribution of net exports remained flat, as high commodity prices for imports offset most of the positive contribution from exports. Future outlook and the BoJ 2Q GDP was slightly below the market consensus, but 1Q GDP was revised up, thus we keep the annual GDP growth unchanged. However, we expect GDP growth to slow this quarter due to high inflation and the re-emergence of new Covid cases. The Bank of Japan will remain accomodative as downside risks to a recovery increase while there are no clear signs of demand-driven inflation. Read this article on THINK TagsInflation GDP Bank of Japan Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Forex: USD/JPY Is Expected To Reach 145 In The End Of The Year. Why Is That?

USD To JPY: This Forex Forecast May Catch You By Surprise! What Can We Expect Form (US Dollar To Japanese Yen)?

InstaForex Analysis InstaForex Analysis 16.08.2022 08:36
Relevance up to 04:00 2022-08-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Stock market - S&P 500, China A50, Nikkei 225 Stock markets are not yet paying attention to a new wave of fears about the global recession, which was caused by yesterday's data on the Chinese economy. In July, Chinese industrial production reduced the rise from 3.9% y/y to 3.8% y/y, retail sales decreased from 3.1% y/y to 2.7% y/y, the base rate of the NBC was reduced from 3 .70% to 2.75%. Despite the friendly fall in European currencies, the S&P 500 stock index rose by 0.40%, today China A50 adds 0.37% in the Asian session, the Japanese Nikkei 225 adds a symbolic 0.03%.   Possible scenario - USD/JPY As a result, amid the growth of the dollar and stock markets, we are waiting for the USD/JPY pair to move up to the nearest target of 134.26 - to the embedded line of the price channel of the monthly timeframe. Consolidating above the level may extend the growth to the target of 136.02 - to the upper line of the price channel. Federal Reserve We believe that at some point investors will begin to withdraw from risk as the Federal Reserve meeting on September 21 approaches, but for now, time makes it possible to follow these sentiments amid a rising market.   The price is above the MACD indicator line on the 4-hour chart, but Marlin is in negative territory both here and on the daily chart. Therefore, we also have in mind an alternative scenario - consolidating under the MACD line, below the level of 132.67, then leaving the area under the support of 132.18, and further development of the downward movement with the target of 129.40.   Read more: https://www.instaforex.eu/forex_analysis/318971
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

Forex: (GBP) British Pound - What's Possibly Ahead GBP/USD?

InstaForex Analysis InstaForex Analysis 16.08.2022 08:44
Relevance up to 04:00 2022-08-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. As a result of Monday, the British pound fell by 79 points, passing under the indicator balance line, which empirically shifts the players' interest mainly in short positions.     The price is systematically approaching the nearest support at 1.1970 - the MACD line of the daily scale. The Marlin Oscillator has crossed the border with the territory of the downward trend, the downward movement continues. The second target is the level of 1.1800.     The price settled below the balance indicator line on the four-hour chart, Marlin is falling in negative territory. We are waiting for a further slow decline in the pound.   Read more: https://www.instaforex.eu/forex_analysis/318973
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

Plunging Below Parity Isn't That Impossible! FX: EUR/USD (Euro To US Dollar) Possible Variants Of The Price

InstaForex Analysis InstaForex Analysis 16.08.2022 08:53
Relevance up to 04:00 2022-08-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The euro moved down with all determination on Monday, finally accepting a plan for a medium-term decline. The fall was 100 points and at the moment the price is testing the strength of the target support level of 1.0150. The Marlin Oscillator has come close to the border with the downward trend territory on the daily chart.     Simultaneous crossing of support by the price and the zero line by the oscillator can give an additional impetus to the price and the next target at 1.0020 will be reached fairly quickly. The third target is 0.9950. There may also be a second option for the development of a downward movement: the price will work out their support with the oscillator, then they will correct and with fresh forces, on the second attempt, they will overcome them. The correction limit is the MACD line on the daily chart – 1.0218.     The oscillator fell quite deeply on the H4 chart, although it is not yet in the oversold zone. The signal line turns up, relieving tension and accumulating strength for a new downward shot. From such positions, the option of a decline with a preliminary correction looks the most possible.   Read more: https://www.instaforex.eu/forex_analysis/318975
China: PMI positively surprises the market

Hurtful News For Chinese Economy... Is China Able To Get Up? US Use The Situation

Saxo Strategy Team Saxo Strategy Team 16.08.2022 09:40
Summary:  The weaker-than-expected economic data from China caught much of the attention and dragged U.S. bond yields and commodities lower. U.S. equities have been in a 4-week rally. Investors are weighing if the U.S. economy is heading into a soft-landing or a recession and if the Chinese economy can recover in the coming months. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities opened lower on weak economic data prints from China as well as a weaker-than-expected Empire State manufacturing survey but climbed towards midday and finished higher. S&P 500 rose 0.4%. Nine of its 11 sectors gained, with shares of consumer staples and utilities outperforming. Nasdaq 100 rose 0.75%, led by a 3% jump in Tesla (TSLA:xnas).  U.S. treasury yields fell Treasury yields fell across the front end to the belly of the curve after a bunch of weak economic data from China and the Empire State manufacturing survey came in at -31.3, much weaker than 5.0 expected. Two-year yields fell by 7bps to 3.17% and 10-year yields declined 5bps to 2.78%.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland Chinese equities tried to move higher in early trading but soon reversed and turned south, Hang Seng -0.7%, CSI300 -0.1%.   The People’s Bank of China cut its policy on Monday but the unexpected move did not stir up much market excitement. The visit of another delegation of US lawmakers to Taiwan within 12 days of Speaker Pelosi’s visit stirred up concerns about the tension in the Sino-American relationship.   Container liner, Orient Overseas (00316:xhkg) plunged nearly 15%.   Stocks that have a dual listing of ADRs, in general, declined on Monday’s trading in Hong Kong following Friday’s decisions for five central SOEs to apply for delisting from the New York Stock Exchange, PetroChina (00857:xhkg/PTR:xnys) -3.4%, Sinopec (00386:xhkg/SNP:xnys) -2.9%, Alibaba (09988:xhkg/BABA:xnys) -1.2, Baidu (09888:xhkg/BIDU:xnas) -1%, Bilibili (09626:xhkg/BILI:xnas) -1%. SMIC (00981:xhkg) dropped more than 6% on analyst downgrades.  Chinese property names dropped as home prices continued to fall in China.  USD broadly firmer against G10 FX, expect JPY The US dollar started the week on the front foot, amid a weaker risk sentiment following a miss in China’s activity data and the disappointing US manufacturing and housing sentiments. The only outlier was the JPY, with USDJPY sliding to lows of 132.56 at one point before reversing the drop. The 131.50 level remains a key area of support for USDJPY and a bigger move in the US yields remains necessary to pierce through that level. The commodity currencies were the hardest hit, with AUDUSD getting in close sight of 0.7000 ahead of the RBA minutes due this morning. NZDUSD also plunged from 0.6450 to 0.6356. The Chinese yuan weakened and bond yields fell after disappointing economic data and surprising rate cuts USDCNH jumped more than 1% from 6.7380 to as high as 6.8200 on Monday following the weak credit data from last Friday, disappointing industrial production, retail sales, and fixed assets investment data released on Monday morning, and unexpected rate cuts by the People’s Bank of China. The 10-year Chinese government bond yield fell 8bps to 2.67%, the lowest level since April 2020, and about 20bps below the yield of 10-year U.S. treasury notes. Crude oil prices (CLU2 & LCOV2) Crude oil prices had a variety of headwinds to deal with both on the demand and the supply side. While demand concerns were aggravated due to the weak China data, and the drop in US Empire State manufacturing – both signaling a global economic slowdown may be in the cards – supply was also seen as being possibly ramped up. There were signs of a potential breakthrough in talks with Iran as Tehran said it sent a reply to the EU's draft nuclear deal and expects a response within two days. Meanwhile, Aramco is also reportedly ramping up production. WTI futures dropped back below $90 while Brent touched $95/barrel. Metals face the biggest brunt of China data weakness Copper led the metals pack lower after China’s domestic activity weakened in July, which has raised the fears of a global economic slowdown as the zero-Covid policy is maintained. Meanwhile, supply side issues in Europe also cannot be ignored with surging power prices putting economic pressure on smelters, and many of them running at a loss. This could see further cuts to capacity over the coming months. Iron ore futures were also down. What to consider? Weak Empire State manufacturing survey and NAHB Index Although a niche measure, the United States NY Empire State Manufacturing Index, compiled by the New York Federal Reserve, fell to -31.3 from 11.1 in July, its lowest level since May 2020 and its sharpest monthly drop since the early days of the pandemic. New orders and shipments plunged, and unfilled orders also declined, albeit less sharply. Other key areas of concern were the rise in inventories and a decline in average hours worked. This further weighed on the sentiment after weak China data had already cast concerns of a global growth slowdown earlier. Meanwhile, the US NAHB housing market index also saw its eighth consecutive monthly decline as it slid 6 points to 49 in August. July housing starts and building permits are scheduled to be reported later today, and these will likely continue to signal a cooling demand amid the rising mortgage rates as well as overbuilding. European power price soared to record high European power prices continue to surge to fresh record highs amid gas flow vagaries, threatening a deeper plunge into recession. Next-year electricity rates in Germany advanced as much as 3.7% to 477.50 euros ($487) a megawatt-hour on the European Energy Exchange AG. That’s almost six times as much as this time last year, with the price doubling in the past two months alone. UK power prices were also seen touching record highs. European Dutch TTF natural gas futures were up over 6%, suggesting more pain ahead for European utility companies. China’s activity data China’s July industrial production (3.8% YoY vs consensus 4.3% & June 3.9%), retail sales (2.7% YoY vs consensus 4.9% & June 3.1%), and fixed asset investments (5.7% YTD vs consensus 6.2% & June 6.1%) released this more were weak across the board.  Property investment growth dropped to -6.4% YTD or -12.3% YoY in July, well below market expectations of -5.7% YTD.  Surprising rate cuts from the PBOC met with muted market reactions The People’s Bank of China cut its policy 1-year Medium-term Lending Facility Rate by 10bps to 2.75% from 2.85% and the 7-day reverse repo rate by 10bps to 2.0% from 2.1%.  Market reactions to the surprising move were muted as credit demand, as reflected in the aggregate financing and loan growth data was weak in China. BHP ‘s FY22 results better than expected The Australian mining giant reported FY22 results beating analyst estimates with strong EBITDA and EBITDA margin. Coal segment performance was ahead of expectations while results from the copper and iron ore segments were slightly below expectations.  The company announced a larger-than-expected dividend payout and a higher capex plan for 2023. RBA minutes due to be released this morning Earlier in the month, the Reserve Bank of Australia (RBA) raised the cash rate by 50bps to 1.85% and the accompanying Statement on Monetary Policy emphasized an uncertain and data-dependent outlook. The RBA releases its minutes from the July meeting today, and the market focus will be on the range of options discussed for the August hike and any hint of future interest rate path.  US retailer earnings eyed After disappointing results last quarter, focus is on Walmart and Home Depot earnings later today. These will put the focus entirely on the US consumer after the jobs data this month highlighted a still-tight labor market while the inflation picture saw price pressures may have peaked. It would also be interesting to look at the inventory situation at these retailers, and any updated reports on the status of the global supply chains.     For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: APAC Daily Digest: What is happening in markets and what to consider next – August 16, 2022
Saxo Bank Podcast: The Upcoming Bank Of Japan Meeting, A Look At Crude Oil, Copper And More

Japanese Yen (JPY) Rise. Energy Prices Are Finally Falling!?

John Hardy John Hardy 16.08.2022 10:05
Summary:  Weak data out of China overnight, together with a surprise rate cut from the PBOC and collapsing energy prices later on Monday saw the Japanese yen surging higher across the board. Indeed, the two key factors behind its descent to multi-decade lows earlier this year, rising yields and surging energy prices, have eased considerably since mid-June with only modest reaction from the yen thus far. Is that about to change? FX Trading focus: JPY finding sudden support on new disinflation narrative Weaker than expected Chinese data overnight brought a surprise rate cut from the Chinese central bank and seems to have sparked a broadening sell-off in commodities, which was boosted later by a crude oil drop of some five dollars per barrel on the news that Iran will decide by midnight tonight on whether to accept a new draft on the nuclear deal forward by the Euro zone. In response, the Chinese yuan has weakened toward the highs for the cycle in USDCNH, trading 6.78+ as of this writing and  (there was a spike high to 6.381 back in May but the exchange rate has been capped by 6.80 since then), but the Japanese yen is stealing the volatility and strength crown, surging sharply across the board and following up on the move lower inspired by the soft US CPI data point. US long yields easing considerably lower after an odd spike last Thursday are a further wind at the JPY’s back here. In the bigger picture, it has been rather remarkable that the firm retreat in global long-date yields since the mid-June peak and the oil price backing down a full 25% and more from the cycle highs didn’t do more to support the yen from the yield-spread angle (Bank of Japan’s YCC policy less toxic as yields fall) and from the current account angle for Japan. Interestingly, while the JPY has surged and taken USDJPY down several notches, the US dollar is rather firm elsewhere, with the focus more on selling pro-cyclical and commodity currencies on the possible implication that China may be content to export deflation by weakening its currency now that commodity prices have come down rather than on selling the US dollar due to any marking down of Fed expectations. Still, while the USD may remain a safe haven should JPY volatility be set to run amok across markets, the focus is far more on the latter as long as USDJPY is falling Chart: EURJPY As the JPY surges here, EURJPY is falling sharply again, largely tracking the trajectory of longer European sovereign yields, which never really rose much from their recent lows from a couple of weeks back, making it tough to understand the solid rally back above 138.00 of late. After peaking above 1.90% briefly in June, the German 10-year Bund, for example, is trading about 100 basis points lower and is not far from the cycle low daily close at 77 basis points. The EURJPY chart features a rather significant pivot area at 133.50, a prior major high back in late 2021 and the recent low and 200-day moving average back at the beginning of the month. After a brief JPY volatility scare in late July and into early August that faded, are we set for a second and bigger round here that takes USDJPY down through 130.00 and EURJPY likewise? A more significant rally in long US treasuries might be required to bring about a real JPY rampage. Source: Saxo Group The focus on weak Chinese data and key commodity prices like copper suddenly losing altitude after their recent rally has the Aussie shifting to the defensive just after it was showing strength late last week in sympathy with strong risk sentiment and those higher commodity prices. Is the AUDUSD break above 0.7000-25 set for a high octane reversal here? AUDJPY is worth a look as well after it managed to surge all the way back toward the top of the range before. The idea that a weak Chine might export deflation from here might be unsettling for Aussie bulls. The US macro data focus for the week is on today’s NAHB homebuilder’s survey, which plunged to a low since 2015 in June (not including the chaotic early 2020 pandemic breakout months), the July Housing Starts and Building Permits and then the July Retail Sales and FOMC minutes on Wednesday. With a massive relief in gasoline prices from the July spike high, it will be interesting to see whether the August US data picks up again on the services side. The preliminary August University of Michigan sentiment survey release on Friday showed expectations rising sharply by over 7 points from the lowest since-1980 lows of June, while the Present Situation measure dropped a few points back toward the cycle (and record) lows from May. Table: FX Board of G10 and CNH trend evolution and strength. The JPY is the real story today, but as our trending measures employ some averaging/smoothing, the move will need to stick what it has achieved today to show more. Watch out for a big shift in the commodity currencies in coming days as well if today’s move is the start of something. Elsewhere, the JPY comeback is merely taking CHF from strength to strength, although even the might franc has dropped against the JPY today. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs. Big momentum shift afoot today and watching whether this holds and the JPY pairs and pairs like AUDUSD and USDCAD to see if we are witnessing a major momentum shift in themes here. Also note NOK pairs like USDNOK and EURNOK here. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1400 – US Aug. NAHB Housing Market Index 0130 – Australia RBA Meeting Minutes Source: FX Update: JPY jumps on deflating energy prices, fresh retreat in yields.
Crypto Market Buzzes with Potential Launch of US Bitcoin ETFs

Watch Out Forex Traders! EUR/USD May See Parity, US Dollar Stays Strong Amid Energy Market Realities, Canadian Dollar May Be Affected By CPI Release

ING Economics ING Economics 16.08.2022 11:17
The rise in gas prices around the world and how policymakers handle them is very much back in focus as terms of trade indices for the big importers hit new lows. Combining this theme with both the weakness in the Chinese renminbi and what should be a positive set of US events over the next 48 hours favours continued dollar strength Germany continues to suffer both with low water levels on the Rhine and now a gas levy for German consumers USD: All systems are go We see three factors that can keep the dollar strong near term and probably send it a little stronger. The first is the ongoing energy shock primarily being felt through natural gas prices. These prices continue to rise as importers compete for cargoes ahead of the northern hemisphere winter and the very uncertain supply situation. In financial markets, the cost of higher gas prices is born out in terms of trade indices. Energy importers such as Europe and large parts of Asia are seeing their terms of trade indices (export versus import prices) continuing to dive. These effectively represent a large negative income shock. The energy independence of the US leaves the dollar relatively insulated on this score. The second factor is the one we highlighted yesterday – the uncertainty as to whether the People's Bank of China (PBoC) will engineer another mini-devaluation in the renminbi as it searches for growth. The PBoC overnight fixed USD/CNY in line with model-based estimates. This is being read rather equivocally by markets as the PBoC is not actively encouraging speculation of a weaker renminbi, nor delivering a stern warning against yesterday's renminbi sell-off. USD/CNH is now trading through 6.80 and a move through 6.82/84 will certainly raise speculation of something larger afoot akin to the April/May 6% renminbi devaluation. That period saw the DXY dollar index up around 6% too. The final factor is the US economy and the Fed story. Today sees the release of July industrial production and tomorrow the release of retail sales. Our team sees better figures for both – largely helped by lower gasoline prices. The figures should temporarily allay US recession fears and prepare the markets for what could be a hawkish set of FOMC minutes tomorrow night. We agree with Padhraic Garvey's opinion piece that the Fed probably wants tighter financial conditions now – which implicitly include a firmer dollar. In all, we continue to prefer north American currencies, where last week we picked out the Mexican peso for some carry. The Canadian dollar also should remain supported on dips and today sees some July CPI data. This can shed light on whether the Bank of Canada hikes 50bp or 75bp on 7 September (59bp currently priced). Of the three, we would probably prefer slightly overweight US dollar positions since the risk environment could easily deteriorate again. 106.95/107.00 looks like the near-term target for DXY. In addition, please find the August edition of FX talking here and also some thoughts on where ESG issues interact with the FX market.  Chris Turner EUR: Grim As Carsten Brzeski noted yesterday, Germany continues to suffer both with low water levels on the Rhine and now a gas levy for German consumers. The gas levy could keep German inflation higher for longer and cause more headaches for the European Central Bank (ECB). The trade-weighted euro is a whisker away from the lows of the year and a slightly stronger dollar over the next 48 hours could easily see EUR/USD retesting parity. 1.0200 should now prove short-term resistance. In terms of data today, look out for German and eurozone investor expectations for August. These should remain near the lows despite a decent last month for European equities. Chris Turner GBP: You are not alone News that Germany will impose a gas levy – confirming that the government cannot fully shield households from the spike in gas prices – leaves the UK less of an outlier in Europe. This will be one of the factors helping to limit EUR/GBP gains and could actually favour a drift back to the 0.8390/8400 area. Today's July UK employment data is somewhat of a mixed bag for sterling. This showed a slight slowing in hiring but strong average earnings – the latter pointing to hoarding of staff. We think the data supports a 50bp Bank of England hike on 15 September (45bp currently priced). In all, EUR/GBP can soften a little, but a stronger dollar means that Cable can go sub 1.20 again. Chris Turner   CEE: Another painful day under the reign of the US dollar The strong US dollar quickly took back almost all of the CEE region's recent currency gains. However, the invisible hand of the market intervened in a different order than we had anticipated yesterday. While the Polish zloty lost the least and narrowly avoided 4.700 EUR/PLN, the Hungarian forint came under heavy sell-off, hit by the rating outlook downgrade from S&P. And the koruna returned halfway to CNB's intervention levels. In all three cases, we can expect more losses today, in our view. The regional calendar is almost empty and global conditions for CEE currencies have deteriorated again, led by a stronger US dollar. We continue to believe the zloty should head above 4.700 EUR/PLN, while the forint has lost too much in our view. It can be expected to remain out of the market's favour for some time due to the rating decision, but market conditions remain most favourable for the forint. This is the only currency in the region that can rely on a rising interest rate differential. Once the jitters over the rating outlook change subside, the forint could return to 396 EUR/HUF. Frantisek Taborsky Read this article on THINK TagsFX Daily Dollar CEE region Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
China's Deflationary Descent: Implications for Global Markets

Dollar (USD) Comes Back? Latin America's Currencies Perfomance

Marc Chandler Marc Chandler 16.08.2022 10:58
The bullish dollar narrative was fairly straightforward  Yes, the US main challengers, China and Russia, have been hobbled in different ways by self-inflicted injuries. Still, the driver of the dollar was the expected aggressive tightening by the Federal Reserve. The market accepted that after being a bit slower than ideal (though faster and before many other large central banks), the Fed would move forcefully against inflation, even if it diminished the chances of an economic soft-landing.   However, now the market seems to have a different reaction function  The euro was impressively resilient after the job growth of more than twice expectations. However, the softer than expected US CPI sent the dollar broadly lower, inflicting some apparent technical damage to the charts.  We are reluctant to chase the dollar lower and impressed in a week that the US reported a decline in CPI and PPI that the 10-year bond yield closed a few basis points higher and the first back-to-back weekly increase in two months Technically, it seems that the dollar's pullback, nearly a month-old, move is getting maybe getting stretched. We will try to identify levels that could confirm another leg lower and what would suggest the US dollar may snap back.   Dollar Index:   After reaching almost 107.00 after the stronger than expected jobs data, the Dollar Index fell to almost 104.65 in response to the softer than expected CPI. It was the lowest level since the end of June. The MACD is still falling but oversold. The Slow Stochastic looks poised to turn lower from the middle of the range. Nevertheless, we like it higher in the coming days. We target 106.30 and then 107.00. A move above 107.50 could signal a return to the highs near 109.30 from mid-July. That said, a close below 105.00 would boost the risk of another leg lower.  Euro:  The euro rallied strongly after the softer US CPI, but a key trendline drawn off the February, March, and June highs begins the new week near $1.0375 remains unchallenged. Although the momentum indicators allow for additional gains, we look for the euro to push lower in the coming days. Only a move above the trendline would give it new life. We think the greater likelihood is for the single currency to initially ease toward $1.0180-$1.0200. It may take a break of $1.01 to signal a return to the 20-year low set in mid-July near $0.9950. The US two-year premium over Germany narrowed every day last week for a cumulative 11 bp to near 2.66%. Italy's premium over Germany was trimmed by six basis points. It was the third week of convergence, but at 0.75%, it is still nearly twice what it was in June. Japanese Yen:  The greenback was pushed away from JPY135 by the decline in US rates after the CPI figures. It was sold to about JPY131.75, holding above the month's low set on August 2 near JPY130.40. However, US rates closed firmer on the week despite three softer-than-expected price reports (CPI, PPI, and import/export prices). As a result, the greenback looks poised to test the JPY135.00-50 ceiling. A move above JPY136 would target the JPY137.50 area. We have emphasized the strong correlation between changes in the exchange rate and the US 10-year yield. That correlation is off its highs though still above 0.50, while the correlation with the US two-year yield has risen toward 0.65, the highest in five months.  British Pound:   Sterling rose to $1.2275 in the broad US dollar sell-off in the middle of last week. It stalled in front of the high set on August 2, a little shy of $1.23. This sets up a potential double top formation with a neckline at $1.20. A break would re-target the two-year low set in July near $1.1760. The MACD is set to turn down. The Slow Stochastic is going sideways in the middle of the range after pulling back earlier this month. Sentiment seems poor, and in the week ahead, the UK is expected to report some easing in the labor market, accelerating consumer prices, and another decline in retail sales. Canadian Dollar:   The US dollar fell to near a two-month low last week slightly below CAD1.2730, and slipped through the 200-day moving average on an intraday basis for the first time since June 9. The test of the (61.8%) retracement of this year's rally (early April low ~CAD1.2400 and the mid-July high ~CAD1.3225) found near CAD1.2715 was successful. The US dollar recovered ahead of the weekend back to the CAD1.2800 area. Although the momentum indicators give room for further US dollar losses, we suspect a near-term low is in place and look for an upside correction toward CAD1.2850-CAD1.2900. The Canadian dollar remains sensitive to the immediate risk environment reflected in the change in the S&P 500. The correlation over the past 30 sessions is a little better than 0.60. The correlation reached a two-year high in June near 0.80. The exchange rate's correlation (30 sessions) with oil prices (WTI) set this year's high in early August near 0.60. It is now slightly below 0.50.  Australian Dollar:   Although our bias is for the US dollar to correct higher, the Aussie does not line up quite as well. It broke above the high set at the start of the month near $0.7050 and has held above it. However, its surge stalled slightly above $0.7135, and it consolidated in a narrow range around $0.7100 ahead of the weekend. The momentum indicators are constructive. The main hurdle is the 200-day moving average near $0.7150 and the (50%) retracement of this year's decline (~$0.7660 in early April and ~$6680 in mid-July) found near $0.7170. A break of this area could see a return to the June high by $0.7285.   Mexican Peso:   Latin American currencies had a good week, except for the Argentine peso, which fell by more than 1%, for the dubious honor of being the poorest performer in the emerging markets. Led by Chile (+3.9%) and the Colombian peso (3.8%), Latam currencies accounted for half of the top five performers last week. The peso's 2.7% gain was its best in five months, and the dollar was sold a little through MXN19.85, its lowest level since late June when it reached almost MXN19.82.There seems little to prevent a move toward MXN19.50. Any worries that AMLO's appointments to the central bank would block aggressive tightening of monetary policy must have evaporated as Banxico demonstrated a resolve to hike rates and shadow the US.  Chinese Yuan:   The yuan took a step lower from mid-April until mid-May. Since then, it has been trading within the range more or less seen in the second half of May. That dollar range is roughly CNY6.650 to CNY6.77. For the past month, the dollar has traded between CNY6.72 and CNY6.78, fraying the upper end of the broader range after the greenback surged broadly after the US employment data. Policymakers have signaled concern about inflation and its reluctance to ease monetary policy. It would seem the domestic policy efforts might favor a firm yuan.     Disclaimer   Source: Is the Dollar's Month-Long Pullback Over?
Forex Analysis - US Dollar To Japanese Yen (USD/JPY) - 16/08/22

Forex Analysis - US Dollar To Japanese Yen (USD/JPY) - 16/08/22

InstaForex Analysis InstaForex Analysis 16.08.2022 14:01
Relevance up to 13:00 2022-08-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical analysis: USD/JPY has been trading upside this morning and I found the breakout of the mini channel, which is good sign for further upside movement. Trading recommendation: Due to the breakout of the mini bullish flag pattern, I see further rally towards next upside reference points. Watch for potential buying opportunities on the intraday dips with the upside objectives at 135.40 and 137.40. MACD oscillator is showing bullish reading and start of the new up momentum. Key support is set at the price of 132.60 Read more: https://www.instaforex.eu/forex_analysis/288678
Gold Struggles To Capitalize On Its Goodish Rebound

What Is "De-Dollarization"!? Ghana Is About To Start Buying Gold

InstaForex Analysis InstaForex Analysis 16.08.2022 14:08
Relevance up to 12:00 2022-08-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   The African nation announced last week that it would launch a domestic gold buying program in September. The central bank said it would pay for the precious metal at market prices but make payments online. Ghana's Vice President Dr. Mahamudu Bawumia said the new program represents a significant and sustainable addition to Ghana's foreign exchange reserves and will strengthen the country's balance of payments. The new program has been in development for over a year. In a June 2021 presentation, Bank of Ghana Governor Ernest Addison said the plan would allow the country to double its gold reserves over the next five years. The central bank said that, along with building foreign exchange reserves, the program will also support the national gold mining industry. Ghana is the largest gold producer in Africa and the sixth largest in the world. Last year, the country produced over 117 tons of gold. Ghana has become the latest central bank to announce plans to increase its gold reserves. Earlier this year, a World Gold Council survey showed that of 57 central banks, a quarter planned to add more gold to their foreign exchange reserves. Much of the demand comes from central banks in developing countries. Many economists and market analysts view the growing interest of central banks in gold as part of growing de-dollarization trend. Countries are trying to reduce their dependence on the US dollar.   Read more: https://www.instaforex.eu/forex_analysis/319032
Saxo Bank Podcast: Natural Gas On Colder Weather, Wheat And Coffee Under Pressure, JPY Weaker And More

Natgas Fought Back And Now Have A Solid Position! Iron And Copper Are Out Of Fashion!?

Marc Chandler Marc Chandler 16.08.2022 14:19
Overview: After retreating most of last week, the US dollar has extended yesterday’s gains today. The Canadian dollar is the most resilient, while the New Zealand dollar is leading the decline with a nearly 0.75% drop ahead of the central bank decision first thing tomorrow. The RBNZ is expected to deliver its fourth consecutive 50 bp hike. Most emerging market currencies are lower as well, led by central Europe. Equities in Asia Pacific and Europe are mostly higher today. Japan and Hong Kong were exceptions, and China was mixed with small gains in Shanghai and Shenzhen composites, but the CSI 300 slipped. Europe’s Stoxx 600 is stretching its advance for the fifth consecutive session. It is at two-month highs. US futures are softer. The US 10-year yield is slightly firmer near 2.80%, while European benchmark yields are mostly 2-4 bp higher, but Italian bonds are under more pressure and the yield is back above the 3% threshold. Gold is softer after being repulsed from the $1800 area to test $1773-$1775. A break could signal a test on the 20-day moving average near $1761. October WTI tested last week’s lows yesterday near $86 a barrel on the back of the poor Chinese data. It is straddling the 200-day moving average (~$87.95). The market is also watching what seems like the final negotiations with Iran, where a deal could also boost supply. US natgas prices are more than recouping the past two days of losses and looks set to challenge the $9 level. Europe’s benchmark leapt 11.7% yesterday and is up another 0.5% today. Iron ore has yet to a base after falling more than 5.5% in the past two sessions. It fell almost 0.65% today. September copper has fallen by almost 2.5% over the past two sessions and is steady today. Lastly, September wheat is slipping back below $8 a bushel and is trading heavily for the third consecutive session. Asia Pacific Japan's 2.2% annualized growth in Q2 does not stand in the way of a new government support package  Prime Minister Kishida has been reportedly planning new measures and has instructed the cabinet to pull it together by early next month. He wants to cushion the blow of higher energy and food prices. An extension of the subsidy to wholesalers to keep down the gasoline and kerosene prices looks likely. Kishida wants to head off a surge in wheat prices. Without a commitment to maintain current import prices of wheat that is sold to millers, the price could jump 20% in October, according to reports. Separately, and more controversially, Kishida is pushing for the re-opening of nine nuclear plants that have passed their safety protocols, which have been shut since the 2011 Fukushima accident.  The minutes from the Reserve Bank of Australia's meeting earlier this month signaled additional rate hikes will be forthcoming  After three half--point hikes, it says that the pace going forward will be determined by inflation expectations and the evolving economic conditions. The minutes noted that consumer spending is an element of uncertainty given the higher inflation and interest rates. Earlier today, the CBA's household spending report shows a 1.1% jump month-over-month in July and a 0.6% increase in June. The RBA wants to bring the cash target rate to neutral (~2.50%). The target rate is currently at 1.85% and the cash rate futures is pricing in about a 40% chance of a 50 bp hike at the next RBA meeting on September 6. It peaked near 60% last week. On Thursday, Australia reports July employment. Australia grew 88.4k jobs in June, of which almost 53k were full-time positions. The median forecast in Bloomberg's survey envisions a 25k increase of jobs in July.  The offshore yuan slumped 1.15% yesterday  It was the biggest drop since August 2019 and was sparked by the unexpected cut in rates after a series of disappointing economic data. The US dollar reached almost CNH6.82 yesterday, its highest level in three months. It has steadied today but remains firm in the CNH6.7925-CNH6.8190 range. China's 10-year yield is still under pressure. It finished last week quietly near 2.74% and yesterday fell to 2.66% and today 2.63%. It is the lowest since May 2020. As we have noted, the dollar-yen exchange rate seems to be more sensitive to the US 2-year yield (more anchored to Fed policy) than the 10-year yield (more about growth and inflation)  The dollar is trading near four-day highs against the yen as the two-year yield trades firmer near 3.20%. Initial resistance has been encountered in Europe near JPY134.00. Above there, the JPY134.60 may offer the next cap. Support now is seen around JPY133.20-40. The Australian dollar extended yesterday's decline and slipped through the $0.7000-level where A$440 mln in options expire today. It also corresponds with a (50%) retracement of the run-up form the mid-July low (~$0.6680). The next area of support is seen in the $0.6970-80 area. The greenback rose 0.45% against the onshore yuan yesterday after gapping higher. Today it gapped higher again and rose to almost CNY6.7975, its highest level since mid-May. It reached a high then near CNY6.8125. The PBOC set the dollar's reference rate at CNY6.7730, slightly less than the median in Bloomberg's survey (CNY6.7736). The takeaway is the central bank did not seem to protest the weakness of the yuan. Europe The euro has been sold to a new seven-year low against the euro near CHF0.9600 The euro has been sold in eight of the nine weeks since the Swiss National Bank hiked its policy rate by 50 bp on June 16. Half of those weekly decline were 1% or larger. The euro has fallen around 7.4% against the franc since the hike. Swiss domestic sight deposit fell for 10 of 11 weeks through the end of July as the SNB did not appear to be intervening. However, in the last two weeks, as the franc continued to strengthen, the Swiss sight deposits have risen, and recorded their first back-to-back increase in four months. This is consistent with modest intervention. The UK added 160k jobs in Q2, almost half of the jobs gain in the three months through May, illustrating the fading momentum  Still, some 73k were added to the payrolls in July, well above expectations. In the three months through July, job vacancies in the UK fell (~19.8k) for the first time in nearly two years. Average weekly earnings, including bonuses, rose 5.1% in Q2. The median forecast was for a 4.5% increase. Yet, real pay, excluding bonuses and adjusted for inflation slid 3% in the April-June period, the most since at least 2001. The ILO measure of unemployment in Q2 was unchanged at 3.8%. The Bank of England warns it will rise to over 6%. The market still favors a 50 bp hike next month. The swaps market has it at a little better than an 80% probability. The euro is extending its retreat  It peaked last week, near $1.0365 and tested this month's low near $1.0125 in the European morning. The intraday momentum indicators are stretched, and that market does not appear to have the drive to challenge the 1.2 bln euros in options struck at $1.0075 that expire today. With yesterday's loss, the euro met the (50%) retracement objective of the bounce off the mid-July 22-year low (~$0.9950). The next retracement objective (61.8%) is near $1.0110. Nearby resistance may be met near $1.0160-70. Sterling has been sold for the fourth consecutive session. It approached the $1.20-level, which may be the neckline of a double top. If violated it could signal a return to the low seen in mid-July around $1.1760. Sterling is holding in better than the euro now. The cross peaked before the weekend in front of GBP0.8500 and is approaching GBP0.8400 today. A break would look ominous and could spur a return to the GBP0.8340 area. America The Empire State manufacturing survey and the manufacturing PMI line up well  Both bottomed in April 2020 and peaked in July 2021. The outsized decline in the August Empire State survey points to the downside risks of next week's preliminary August manufacturing PMI. Recall that the July manufacturing PMI fell to 52.2, its third consecutive decline and the lowest reading since July 2020. There was little good in the Empire survey. Orders and shipments fell dramatically. Employment was also soft. Prices paid softened to the lowest this year, but prices received edged higher. The US reports housing start and permits and industrial output today The housing market continues to slow from elevated levels. Housing starts are expected to have fallen 2% in July, matching the June decline. It would be the third consecutive decline, and the longest declining streak since 2018. Still, in terms of the absolute level of activity, anything above 1.5 mln units must still be regarded as strong. They stood at almost 1.56 mln in June. Permits fell by 10% in April-May before stabilizing in June. The median forecast in Bloomberg's survey projects a 3.3% decline. Permits were running at 1.685 mln in June. From April 2007 through September 2019, permits held below 1.5 mln. The industrial production report may attract more attention Output fell in June (-0.2%) for the first time this year, and even with it, industrial product has risen on average by 0.4% a month in H1 22, slightly above the pace seen in H1 21. Helped by manufacturing and utility output, industrial production is expected to rise by around 0.3%. In the last cycle, capacity use spent four months (August-November 2018) above 80%. It had not been above 80% since the run-up to the Great Financial Crisis when it spent December 2006 through March 2008 above the threshold and peaked slightly above 81.0%. Last month was likely the fourth month in this cycle above the 80% capacity use rate. Note that the Atlanta Fed's GDPNow tracker will be updated later today. The update from August 10 put Q3 GDP at 2.5%. Housing starts in Canada likely slow last month, which would be the first back-to-back decline this year  The median forecast (Bloomberg's survey) calls for a 3.6% decline after an 8.4% fall in June. Still, the expected pace of 264k is still 10% higher since the end of last year. On Monday, Canada reported that July existing home sales fell by 5.3%, the fifth consecutive decline. They have fallen by more than a third since February. Canada also reports its monthly portfolios. Through May, Canada has experienced C$98.5 bln net portfolio inflows, almost double the pace seen in the first five months last year. However, the most important report today is the July CPI. A 0.1% increase, which is the median forecast in Bloomberg's survey would be the smallest of the year and the year-over-year pace to eased to 7.6% from 8.1%. If so, it is the first decline since June 2021. Similar with what the US reported, the core measures are likely to prove sticky. After the employment data on August 5, the swaps market was still leaning in favor a 75 bp hike at the September 7 meeting (64%). However, since the US CPI report, it has been hovering around a 40% chance. While the US S&P 500 rose reached almost four-month highs yesterday, the Canadian dollar found little consolation  It held in better than the other dollar-bloc currencies and Scandis, but it still suffered its biggest decline in about a month yesterday. The greenback reached almost CAD1.2935 yesterday and is consolidating in a narrow range today above CAD1.2890. The next important chart point is near CAD1.2975-85 and the CAD1.3050. After testing the MXN20.00 level yesterday, the US dollar was sold marginally through last week's low (~MXN19.8150). It is consolidating today and has not been above MXN19.8850. It has come a long way from the month's high set on August 3 near MXN20.8335. The greenback's downside momentum seems to have eased as it stalls in front of MXN19.81 for the third consecutive session.     Disclaimer   Source: Greenback Remains Firm
bybit-news1

How Could Funds Rate React To The Expected (50bps) Fed Decision?

ING Economics ING Economics 16.08.2022 15:36
Since April the Federal Reserve has hiked by 200bp, but over the same period financial conditions have improved, bringing them back to where they were in April. Why? Market rates have fallen and credit spreads have narrowed, especially since June. This must reverse. Else the Fed has no choice but to get tougher. Another reason for the US 10yr to re-test 3% US financial conditions have loosened so much it looks like we're back to square one Long before the Federal Reserve started to hike in March this year, US financial conditions had moved from being ultra-loose around the turn of the year to being reasonably tight just before that first hike. In effect the market was doing the tightening for the Fed ahead of their first hike.   Measured in terms of standards of deviations away from the mean, financial conditions moved from +1 (ultra loose) to -0.5 (reasonably tight). They then tightened more as market rates continued to rise, credit spreads tightened and the dollar strengthened. By end-June, US financial conditions were at -1.5 (very tight). But since then, financial conditions have loosened. They are now at -0.2, which is only moderately tight (after months of official tightening)!   US financial conditions have in fact loosened in an impressive manner since early July, so much so that they're now back to where they were in February (and briefly again in April). But here's the thing. Since April the Fed has delivered 200bp in rate hikes, with the implied purpose of tightening financial conditions. We're not quite back to square one, but this looks quite odd all the same. In a sense, the financial markets have undone the tightening down by the Federal Reserve since they started to get serious with out-sized hikes. Why? Two reasons (graphs below). 1. We’ve been generically risk-on in the past six weeks, with credit spreads well off their highs and still tightening, and 2. Market rates have fallen (from 3.5% in June, the US Treasury yield almost got to 2.5% before backing off). Given that the Fed wants financial conditions tighter (else why hike), this combination can’t continue. The loosening in financial conditions that needs to be reversed Source: Macrobond, ING estimates Expect financial conditions to re-tighten in the weeks and months ahead. After all that's what the Fed wants and needs Between now and the 21st September FOMC meeting, and assuming no material change from the prognosis of easing but sticky underlying inflation, the Fed will be hoping that financial conditions re-tighten. That way they can ratify the tightening with a hike. Else the Fed will be left with the less comfortable position of coaxing tighter financial conditions, whether through the verbal or policy action route. When the Federal Reserve hikes on 21st September (we think by 50bp), it will bring the effect funds rate to a level that is practically flat to where the US 10yr Treasury yield currently trades at today. From there things get interesting. In all probability the Fed needs to do more; we think they get to 3.5% to 3.75% by year end. As we noted in a previous piece (here), the 10yr yield can trade through the fund rate, but will only sail through it when the funds rate has actually peaked. Specifically, the 10yr yield should not trade more than 50bp through the fund rate unless the funds rate has peaked. In fact typically it would tend to be no more than 25bp through pre the peak, and once the funds rate has peaked, then the 10yr can get as far as 150bp through. But the funds rate has not peaked as of yet, so the 25-50bp range through the funds rate is where the extreme should be. That also places upward pressure on market rates. Look for the US 10yr to head back above 3%, even on a slowdown So, if the Fed is heading to 3.5% or higher, that must put upward pressure on the 10yr Treasury yield in the months ahead. We maintain our view that the US 10yr needs to get back to a 3% handle, and in fact it could hit 3.25% given the Fed ambition (our view of their ambition) to get the funds rate north of 3.5%. The risk asset environment will have to re-calibrate too. Implicit in the notion of tighter credit spreads is a discount for a more tame financial environment and a reduction in recession, and by extension, default risk. The thing is if inflation does not fall fast enough the Fed will feel emboldened to continue to hike even as the economy creaks, re-heightening the recession / default risks that lie ahead. And further loosening in fincnaical conditions places even more presssure on the Fed to act as an offset. Better then for financial market to anticipate this, and move in a direction that re-tightens financial conditions. Apart from higher market rates, that also includes widening pressure on credit spreads. The signaling for that can come from a higher interest rates narrative; one that is deemed persistant till the job is one. The idea of a seemingly never ending sequence of hikes from the Fed and a ratcheting higher in market rates can be enough to dampen the enthusiam in risk asset space.   We are attempting to thread a very tight needle here in the sense that we have also called the top for the US Treasury yield at 3.5% (here); the level hit in mid-June. The factors that drove that call remain in play, as the 5yr now has a persistent richness attached to it (classic turning point tendency) and inflation expectations have calmed and remain well down from where they were. So the call remains that 3.5% was the peak. The fall in rates since then made sense. But the threat of the move below 2.5% was too far too fast. And we have since been calling for the 10yr to head back up to a 3% handle (and potentially extend to 3.25%). Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Russia's Weekend Mutiny and Gold's Bounce off Support Raise Concerns; Verbal Intervention in USD/JPY and US Banking Stocks Tumble Ahead of Fed's Stress Test Results

Why Is Dollar (USD) So Important To Follow? S&P 500 Index Stumbling Block?

Saxo Bank Saxo Bank 16.08.2022 13:30
Summary:  Today we look at a confusing market backdrop as the US dollar rose across the board despite weak US data and US treasury yields easing lower again. While measures of risk sentiment and financial conditions look very strong here, we need to remember that the US dollar is a financial condition unto itself and one of the most import exchange rates, the USDCNH rate should be on every trader's radar. As well, the US S&P 500 index is pushing up against a major resistance level. Crude oil, copper, earnings reports ahead and more on today pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast  Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: Podcast: The US dollar is a financial condition, too
Lowest China's Yield Level In 2 Years!? Dollar (USD) Is Disturbing Gold In It's Challenge

Lowest China's Yield Level In 2 Years!? Dollar (USD) Is Disturbing Gold In It's Challenge

Marc Chandler Marc Chandler 16.08.2022 11:44
Overview: Equities were mostly higher in the Asia Pacific region, though Chinese and Hong Kong markets eased, and South Korea and India were closed for national holidays. Despite new Chinese exercises off the coast of Taiwan following another US congressional visit, Taiwan’s Taiex gained almost 0.85%. Europe’s Stoxx 600 is advancing for the fourth consecutive session, while US futures are paring the pre-weekend rally. Following disappointing data and a surprise cut in the one-year medium-term lending facility, China’s 10-year yield fell to 2.66%, its lowest in two years. The US 10-year is soft near 2.83%, while European yields are mostly 2-4 bp lower. Italian bonds are bucking the trend and the 10-year yield is a little higher. The Antipodeans and Norwegian krone are off more than 1%, but all the major currencies are weaker against the greenback, but the Japanese yen, which is practically flat. Most emerging market currencies are lower too. The Hong Kong Dollar, which has been supported by the HKMA, strengthened before the weekend, and is consolidating those gains today. Gold tested the $1800 level again but has been sold in the wake of the stronger dollar and is at a five-day low near $1778. The poor data from China raises questions about demand, and September WTI is off 3.6% after falling 2.4% before the weekend. It is near $88.60, while last week’s five-month lows were set near $87.00. US natgas is almost 2% lower, while Europe’s benchmark is up 2.7% to easily recoup the slippage of the past two sessions. China’s disappointment is weighing on industrial metal prices. Iron ore tumbled 4% and September copper is off nearly 3%. September wheat snapped a four-day advance before the weekend and is off 2.3% today.  Asia Pacific With a set of disappointing of data, China surprised with a 10-bp reduction in the benchmark one-year lending facility rate to 2.75%  It is the first cut since January. It also cut the yield on the seven-day repo rate to 2.0% from 2.1%. The string of poor news began before the weekend with a larger-than-expect in July lending figures. However, those lending figures probably need to be put in the context of the surge seen in June as lenders scramble to meet quota. Today's July data was simply weak. Industrial output and retail sales slowed sequentially year-over-year, whereas economists had projected modest increases. New home prices eased by 0.11%, and residential property sales fell 31.4% year-over-year after 31.8% decline in June. Property investment fell 6.4% year-over-year, year-to-date measures following a 5.4% drop in June. Fix asset investment also slowed. The one exception to the string of disappointment was small slippage in the surveyed unemployment rate to 5.4% from 5.5%. Incongruous, though on the other hand, the jobless rate for 16–24-year-olds rose to a record 19.9%. Japan reported a Q2 GDP that missed estimates, but the revisions lifted Q1 GDP out of contraction  The world's second-largest economy grew by 2.2% at an annualized pace in Q2. While this was a bit disappointing, Q1 was revised from a 0.5% fall in output to a 0.1% expansion. Consumption (1.1%) rebounded (Q1 revised to 0.3% from 0.1%) as did business spending (1.4% vs. -0.3% in Q1, which was originally reported as -0.7%). Net exports were flat after taking 0.5% off Q1 GDP. Inventories, as expected, were unwound. After contributing 0.5% to Q1 GDP, they took 0.4% off Q2 growth. Deflationary forces were ironically still evident. The GDP deflator fell 0.4% year-over-year, almost the same as in Q1 (-0.5%). Separately, Japan reported industrial surged by 9.2% in June, up from the preliminary estimate of 8.9%. It follows a two-month slide (-7.5% in May and -1.5% in April) that seemed to reflect the delayed impact of the lockdowns in China. The US dollar is little changed against the Japanese yen and is trading within the pre-weekend range (~JPY132.90-JPY133.90). It finished last week slightly above JPY133.40 and a higher closer today would be the third gain in a row, the longest advance in over a month. The weakness of Chinese data seemed to take a toll on the Australian dollar, which has been sold to three-day lows in the European morning near $0.7045. It stalled last week near $0.7140 and in front of the 200-day moving average (~$0.7150). A break of $0.7035 could signal a return to $0.7000, and possibly $0.6970. The greenback gapped higher against the Chinese yuan and reached almost CNY6.7690, nearly a two-week high. The pre-weekend high was about CNY6.7465 and today's low is around CNY6.7495. The PBOC set the dollar's reference rate at CNY6.7410, a little above the Bloomberg survey median of CNY6.7399. Note that a new US congressional delegation is visiting Taiwan and China has renewed drills around the island. The Taiwan dollar softened a little and traded at a three-day low. Europe Turkey's sovereign debt rating was cut a notch by Moody's to B3 from B2  That is equivalent to B-, a step below Fitch (B) and two below S&P (B+). Moody's did change its outlook to stable from negative. The rating agency cited the deterioration of the current account, which it now sees around 6% of GDP, three times larger than projected before Russia invaded Ukraine. The Turkish lira is the worst performing currency this year, with a 27.5% decline after last year's 45% depreciation. Turkey's two-year yield fell below 20% today for the first time in nine months, helped ostensibly by Russia's recent cash transfer. The dollar is firm against the lira, bumping against TRY17.97. The water level at an important junction on the Rhine River has fallen below the key 30-centimeter threshold (~12 inches) and could remain low through most of the week, according to reports of the latest German government estimate  Separately, Germany announced that its gas storage facility is 75% full, two weeks ahead of plan. The next target is 85% by October 1 and 95% on November 1. Reports from France show its nuclear reactors were operating at 48% of capacity, down from 50% before the weekend. A couple of reactors were shut down for scheduled maintenance on Saturday.  Ahead of Norway' rate decision on Thursday, the government reported a record trade surplus last month  The NOK229 bln (~$23.8 bln). The volume of natural gas exports surged more than four-times from a year earlier. Mainland exports, led by fish and electricity, rose by more than 20%. The value of Norway's electricity exports increased three-fold from a year ago. With rising price pressures (headline CPI rose to 6.8% in July and the underlying rate stands at 4.5%) and strong demand, the central bank is expected to hike the deposit rate by 50 bp to 1.75%. The euro stalled near $1.0370 last week after the softer than expected US CPI  It was pushed through the lows set that day in the European morning to trade below $1.02 for the first time since last Tuesday. There appears to be little support ahead of $1.0160. However, the retreat has extended the intraday momentum indicators. The $1.0220 area may now offer initial resistance. Sterling peaked last week near $1.2275 and eased for the past two sessions before breaking down to $1.2050 today. The intraday momentum indicators are stretched here too. The $1.2100 area may offer a sufficient cap on a bounce. A break of $1.20 could confirm a double top that would project back to the lows. America The Congressional Budget Office estimates that the Inflation Reduction Act reduces the budget deficit but will have a negligible effect on inflation  Yet, starting with the ISM gauge of prices paid for services, followed by the CPI, PPI, and import/export prices, the last string of data points came in consistently softer than expected. In addition, anecdotal reports suggest the Big Box stores are cutting prices to reduce inventories. Energy is important for the medium-term trajectory of measured inflation, but the core rate will prove sticky unless shelter cost increases begin to slow. While the Democrats scored two legislative victories with the approval of the Chips and Science Act and the Inflation Reduction Act, the impact on the poll ahead of the November midterm election seems minor at best. Even before the search-and-seizure of documents still in former President Trump's residence, PredictIt.Org "wagers" had turned to favor the Democratic Party holding the Senate but losing the House of Representatives. In terms of the Republican nomination for 2024, it has been back-and-forth over the last few months, and recently Florida Governor DeSantis narrowly pulled ahead of Trump. The two new laws may face international pushback aside from the domestic impact  The EU warned last week that the domestic content requirement to earn subsidies for electric vehicles appears to discriminate against European producers. The Inflation Reduction Act offers $7500 for the purchases of electric cars if the battery is built in North America or if the minerals are mined or recycled there. The EU electric vehicle subsidies are available for domestic and foreign producers alike. On the other hand, the Chips and Science Act offers billions of dollars to attract chip production and design to the US. However, it requires that companies drawing the subsidies could help upgrade China's capacity for a decade. Japan and Taiwan will likely go along. It fits into their domestic political agenda. However, South Korea may be a different kettle of fish. Hong Kong and China together accounted for around 60% of South Korea's chip exports last year. Samsung has one overseas memory chip facility. It is in China and produces about 40% of the Galaxy phones' NAND flash output. Pelosi's apparent farewell trip to Asia, including Taiwan, was not well received in South Korea. President Yoon Suk Yeol did not interrupt his staycation in Seoul to meet the US Speaker. Nor was the foreign minister sent. This is not to cast aspersions on South Korea's commitment to regional security, simply that it is not without limits. Today's economic calendar features the August Empire State manufacturing survey  A small decline is expected. The June TIC data is out as the markets close today. Today is also the anniversary of the US ending Bretton Woods by severing the last links between gold and the dollar in 1971. Canada reports manufacturing sales and wholesale trade, but the most market-sensitive data point may be the existing home sales, which are expected to have declined for the fifth consecutive month. Canada reports July CPI tomorrow (Bloomberg survey median forecast sees headline CPI slowing to 7.6% from 8.1% in June).  The Canadian dollar is under pressure  The US dollar has jumped above CAD1.2900 in Europe after finishing last week near CAD1.2780. Last week's high was set near CAD1.2950, where a $655 mln option is set to expire today. A move above CAD1.2920 could target CAD1.2975-CAD1.3000 over the next day or day. A combination of weaker equities, thin markets, and a short-term market leaning the wrong way after the likely drivers today. The greenback posted its lowest close in two months against the Mexican peso before the weekend near MXN19.85. However, it is rebounding today and testing the MXN20.00 area Initial resistance may be encountered around MXN20.05, but we are looking for a move toward MXN20.20 in the coming days. Mexico's economic calendar is light this week, and the highlight is the June retail sales report at the end of the week.    Disclaimer Source: China Disappoints and Surprises with Rate Cut
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

Pound recovers losses after jobs report

Kenny Fisher Kenny Fisher 16.08.2022 22:55
The British pound remains under pressure. In the North American session, GBP/USD is trading at 1.2055, unchanged the day. The pound fell as low as 1.2007 in the Asian session, just above the symbolic 1.20 line. UK wage growth remains high The economic outlook in the UK is grim and today’s employment report didn’t bring any cheer. Unemployment claims continue to fall and the labour market remains strong, but wage growth indicates trouble. Wages dropped to 5.1% in June, down from 6.4% in May. However, real wages (adjusted for inflation) actually fell by 3% in Q2 on an annualized basis, a new record. The cost of living is thus increasing at an even faster rate and is far outpacing wage growth. The headline wage growth reading of 5.1%, which is not adjusted for inflation, may have fallen, but still remains high and will likely force the BoE to continue hiking aggressively. The BoE has forecast that inflation will hit a staggering 13% this year, and the last thing it needs to contend with is a wage-price spiral, which could entrench inflation. The markets won’t have much time to dwell on the employment numbers, with the inflation report being released on Wednesday. Headline CPI is expected to accelerate to 9.8% in July, up from 9.4% in June. If inflation pushes higher than the estimate, it could be a nasty day for the pound. The Federal Reserve continues to send out the message that its rate hikes are far from over as the battle against inflation will continue for some time yet. The markets expect the Fed to raise rates to a peak in a range of 3.50% – 3.75%, well above the current benchmark rate of 2.50%. Despite this hawkish stance, the financial markets don’t seem to be listening. US equity markets have been rising, while the US dollar, which should be benefitting from a hawkish Fed, is struggling. The lower-than-expected July inflation report of 8.5% raised risk sentiment and sent the dollar tumbling. If inflation resumes its upward trend in August, risk appetite could evaporate and the dollar might have the last laugh. . GBP/USD Technical  GBP/USD is testing support at 1.2030. Below, there is support at 1.1925 There is resistance at 1.2153 and 1.2258   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound recovers losses after jobs report - MarketPulseMarketPulse
Technical analysis recommendations on EUR/USD and GBP/USD for August 19, 2022

Aussie stabilizes after slide

Kenny Fisher Kenny Fisher 16.08.2022 22:57
The Australian dollar is steady today, after a massive 1.40% decline on Monday. In the North American session, AUD/USD is trading at 0.7015, down 0.10% on the day. Aussie volatility continues For those looking for volatility, the Australian dollar should fit the bill. AUD/USD jumped 150 points last Wednesday and briefly pushed above the 0.7100 level for the first time since June 10th. The pair reversed sharply on Monday, falling 100 points. With Australia releasing wage growth on Wednesday and employment data on Thursday, we could see further volatility from the Aussie. Wage growth for Q2 YoY is expected to rise to 2.7%, up from 2.4% prior. There were no surprises from the RBA minutes, with the RBA repeating that its stance would be data-dependent and that there was no pre-set path for rate increases. The RBA has delivered three consecutive hikes of 50 basis points, bringing the cash rate to 1.85%. The markets are expecting another 50bp hike at the September meeting and have priced in a rate peak of 3.25% before the end of the year, which could mean rate hikes at the remaining four meetings in 2022. The RBA is in an aggressive mode due to red-hot inflation, which hit 6.1% in Q2, its highest level since 2001. The labour market remains strong, but the cost of living crisis and rising mortgage rates continue to hammer Australian households. Will domestic demand, a key driver of the economy, hold up? The RBA minutes noted that “the behaviour of household spending continued to present a key source of uncertainty for the outlook.” If domestic demand does not weaken, the RBA will be in a position to continue raising rates, and RBA officials will be closely monitoring household spending and confidence indicators. The Federal Reserve continues to send out a hawkish message that the battle against inflation is far from over and the rate hikes will continue. The markets expect the Fed to raise rates to a peak in a range of 3.50% – 3.75%, well above the current benchmark rate of 2.50%. Despite this consistent message from the Feds, the financial markets don’t seem to be listening. The lower-than-expected July inflation report of 8.5% raised risk sentiment and sent the dollar tumbling. If inflation resumes its upward trend in August, risk appetite could evaporate and the US dollar could bounce back. . AUD/USD Technical There is resistance at 0.7053, followed by a monthly resistance line at 0.7122 AUD/USD has support at 0.6968 and 0.6902 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie stabilizes after slide - MarketPulseMarketPulse
Walmart And Home Depot Did Better Than Expected. S&P 500 Reaches The 4,3k Level

Walmart And Home Depot Did Better Than Expected. S&P 500 Reaches The 4,3k Level

Saxo Strategy Team Saxo Strategy Team 17.08.2022 08:35
Summary:  S&P500 index broke above the key 4,300 resistance level while the NASDAQ pushed lower amid mixed economic data and better-than-feared earnings from Walmart and Home Depot. US housing data continues to worsen, but the focus now turns to FOMC minutes due later today, as well as the US retail sales which will be next test of the strength of the US consumer. Asia session may have trouble finding a clear direction, but Australia’s wage price index and RBNZ’s rate hike may help to provide some bounce. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities were mixed. Tech names had an initial pullback, followed by short-coverings that narrowed the loss of the Nasdaq 100 to 0.23% at the close. S&P500 edged up 0.19% to 4,305 on better-than-feared results from retailers, moving towards its 200-day moving average (4,326). Walmart (WMT:xnys) and Home Depot (HD:xnys) reported Q2 results beating analyst estimates. Walmart gained 5% on strong same-store sales growth and a deceleration in inventory growth. Home Depot climbed 4% after reporting better than expected EPS and same-store sales but with an acceleration in inventory buildup. The declines in housing starts and building permits released on Monday and the downbeat comments about the U.S. housing market from the management of Compass (COMP:xnys), an online real estate brokerage, highlighted the challenges faced in the housing sector.  Short-end U.S. treasury yields rose as the long-end little changed The bigger than expected increases in July industrial production (+0.6% MoM), manufacturing production (+0.7% MoM), and business equipment production (+0.6%) triggered some selling in the short-end of U.S. treasury curve, pushing the 2-year yield 8 bps higher to 3.25% as 10-year yield edged up 1bp.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) China internet stocks were sold off on Tuesday afternoon after Reuters ran a story suggesting that Tencent (00700:xhkg) plans to divest its 17% stake (USD24 billion) in Meituan (03690:xhkg).  The shares of Meituan collapsed 9% while Tencent gained 0.9%.  After the close of the Hong Kong market, Chinese media, citing sources “close to the matter” suggested that the divesture story is not true. However, the ADRs of Meituan managed to recover only 1.7% in New York trading. The newswire story also triggered selling on Kuaishou (01024:xhkg), -4.4%, which has Tencent as a major investor. The decline in internet stocks dragged the Hang Seng Index 1% lower. On the other hand, Chinese developers soared on another newswire report that state-owned China Bond Insurance is going to provide guarantees to new onshore debts issued by several “high quality” developers, including Country Garden (02007:xhkg) +9%, Longfor (00960:xhkg) +12%, CIFI (00884:xhkg) +12.9%, and Seazen (01030:xhkg) +7.6%.  Shares of Chinese property management services also surged higher.  GBPUSD bounced off the 1.2000 support, NZD eyeing RBNZ A mixed overnight session for FX as the US yields wobbled. Risk sentiment held up with the mixed US data accompanied by a less bad outcome in the US retailer earnings than what was expected. This made the safe-haven yen a clear underperformer, and USDJPY rose back above 134. But a clear trend in the pair is still missing and a break above 135 is needed to reverse the downtrend. Cable got lower to remain in close sight of the 1.2000 big figure, but rose above 1.2100 subsequently. UK CPI report due today may confirm the need for further BOE action after labor data showed wage pressures. NZDUSD remains near lows of 0.6320 but may see a knee-jerk higher if RBNZ surprises on the hawkish side. Crude oil prices (CLU2 & LCOV2) Crude oil prices remain under pressure due to the prospect of Iran nuclear deal, and printed fresh lows since the Ukraine invasion. Some respite was seen in early Asian session, and WTI futures were last seen at $87/barrel and Brent is below $93. The EU submitted a final proposal to salvage the Iran nuclear deal, and prospects of more energy supply are dampening the price momentum. It has been reported that Iran’s response was constructive, and they are now consulting with the US on a way ahead for the protracted talks. The API reported crude inventories fell by 448,000 barrels last week, while gasoline stockpiles increased by more than 4 million barrels. Government data is due later Wednesday. European Dutch TTF benchmark gas futures (TTFMU2) touched €250/MWh, but has cooled off slightly recently, but still signals the heavy price that Europe is paying for the dependence on Russian gas. Copper holding up well despite China slowdown concerns Despite reports of weaker financing and activity data from China earlier this week, Copper remains well supported and registered only modest declines. BHP’s results provided some offset, as did the supply side issues in Europe. Only a break below the key 350 support will turn the focus lower. Meanwhile, zinc rallied amid concerns of smelter closures in Europe. What to consider? US housing scare broadens, industrial production upbeat Housing starts fell 9.6% in July to 1.446 mn, well beneath the prior 1.599 mn and the expected 1.537 mn. Housing starts are now down for five consecutive months, and suggest a cooling housing market in the wake of higher borrowing costs and higher inflation. Meanwhile, building permits declined 1.3% in July to 1.674 mn from 1.696 mn, but printed above the expected 1.65 mn. There will be potentially more scaling back in construction activity as demand weakens and inventory levels rise. On the other hand, industrial production was better than expected at 0.6% m/m (prev: -0.2%) possibly underpinned by holiday demand but the outlook is still murky amid persistent inflation and supply chain issues. US retailer earnings come in better than feared Walmart (WMT:xnys) and Home Depot (HD:xnys) reported better-than-feared results on Tuesday. Walmart’s Q2 revenues came in at USD152.9 billion (+8.4% YoY, consensus USD150.5bn). Same-store sales increased 8.4% YoY (vs consensus +6.0% YoY).  EPS of USD1.77, down 0.8% from a year ago quarter but better than the consensus estimate of USD1.63. While inventories increased 25.5% in Q2, the rate of increase has moderated from the prior quarter’s +32.0%. The company cited falls in gas prices, market share gain in grocery, and back-to-school shopping key reasons behind the strength in sales.  Home Depot reported Q2 revenues of USD43.9 billion (vs consensus USD43.4bn), +6.5% YoY.  Same-store sales grew 5.8%, beating analyst estimates (+4.9%).  EPS rose 11.5% to $5.05, ahead of analyst estimates (USD4.95). However, inventories grew 38% YoY in Q2, which was an acceleration from the prior quarter. The management cited inflation and pulling forward inventory purchases given supply chain challenges as reasons for the larger inventory build-up. Target (TGT:xnys) is scheduled to report on Wednesday. Eyes on US retail sales US retail sales will be next test of the US consumer after less bad retailer earnings last night. Retail sales should have been more resilient given the lower prices at pump improved the spending power of the average American household, and Amazon Prime Day in the month possibly attracted bargain hunters as well. However, consensus expectations are modest at 0.1% m/m compared to last month’s 1.0%. A cooling labor market in the UK UK labor market showed signs of cooling as job vacancies fell for the first time since August 2020 and real wages dropped at the fastest pace in history. Unemployment rate was steady at 3.8%, and the number of people in employment grew by 160,000 in the April-June period as against 256,000 expected. There was also a sprinkle of good news, with the number of employees on payrolls rising 73,000 in July, almost triple the pace expected. Also, wage growth was strong at 4.7% in the June quarter from 4.4% in the three months to May, which may be key for the BOE amid persistent wage pressures. Australia Q2 Wage Index to determine future RBA rate hike size? The RBA Minutes out on Tuesday showed a central bank that is trying to navigate a “narrow path” for keeping the Australian economy on an “even keel”. The RBA has often singled out wages as an important risk for whether inflation risks becoming more embedded and on that note, today sees the release of the Q2 Wage Index, expected to come in at 2.7% year-on-year after 2.4% in Q1. A softer data point may have the market pulling back expectations for another 50 basis point rate hike at the next RBA meeting after the three consecutive moves of that size. The market is about 50-50 on the size of the RBA hike in September, pricing a 35bps move. RBNZ set to decelerate its guidance after another 50 basis point move today? The Reserve Bank of New Zealand is expected to hike its official cash rate another 50 basis points tonight, taking the policy rate to 3.00%. With business and consumer sentiment surveys in the dumps in New Zealand and oil prices retreating sharply the RBNZ, one of the earliest among developed economies to tighten monetary policy starting late last year, may be set for more cautious forward guidance and a wait and see attitude, although wages did rise in Q2 at their second fastest pace (+2.3% QoQ) in decades. The market is uncertain on the future course of RBNZ policy, pricing 45bps for the October meeting after today’s 50bps hike and another 37bps for the November meeting. FOMC minutes to be parsed for hints on future Fed moves The Federal Reserve had lifted rates by 75bps to bring the Fed Funds rate at the level that they consider is neutral at the July meeting, but stayed away from providing any forward guidance. Meeting minutes will be out today, and member comments will be watched closely for any hints on the expectation for September rate hike or the terminal Fed rate. The hot jobs report and the cooling inflation number has further confused the markets since the Fed meeting, even as Fed speakers continue to push against any expectations of rate cuts at least in ‘early’ 2023. We only have Kansas City Fed President Esther George (voter in 2022) and Minneapolis Fed President Kashkari (non-voter in 2022) speaking this week at separate events on Thursday, so the bigger focus will remain on Jackson Hole next week for any updated Fed views.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 17, 2022
Navigating the European Landscape: Assessing the Significance and Variations of Non-Bank Financial Institutions

Forex: Plunge Of AUD/USD!? Is It Possible? EUR/USD Is Trading Close To 1.00 Level! EUR/GBP - Gas Prices In The Driver's Seat. Pound Battles With Euro!

ING Economics ING Economics 17.08.2022 09:27
FOMC minutes as a communication tool against easing expectations should keep the US dollar supported. German recession is becoming inevitable. Sterling strikes back at the euro, backed by a hawkish Bank of England. And GDP data in Central and Eastern Europe will show how close we are to recession USD: Dollar to stay supported into FOMC minutes The dollar goes into today’s release of the 27 July FOMC minutes about 2% off the highs of the year. This particular meeting had triggered a sell-off in the dollar on the view that the Fed might have already taken the policy rate to some kind of neutral level and that future rate hikes would be undertaken on a meeting-by-meeting basis. The question is whether the Fed wants to use these minutes as a communication tool to push back against the view of a 2023 easing cycle. Post-meeting rhetoric from the Fed suggests that this is more likely to be the case – especially since the Fed funds futures price the policy rate being cut from 3.60% to 3.20% in the second half of next year. A further rejection of this market pricing should help the dollar. And bearish flattening of the US Treasury curve could pressure the commodity currencies. Here, currencies like AUD/USD could come under pressure again – hit by the Fed applying the brakes to growth at the same time as Chinese growth prospects are being revised even lower.  Favour DXY pushing up the 107.00 area. Chris Turner EUR: Consolidating near the lows The European Central Bank's nominal euro trade-weighted index (weighted against 19 major trading partners) is now at the lows of the year. The gas crisis and what it means for eurozone growth prospects this winter is clearly taking a toll on the euro. As Carsten Brzeski wrote yesterday in reaction to a near record low German ZEW sentiment reading, a German recession is almost inevitable in the second half of the year. Perhaps the ECB, rather like the People’s Bank of China earlier this year, will embrace a weaker currency? After a month of consolidation, EUR/USD does not look particularly oversold on technical indicators, and we continue to favour support at 1.0100 giving way to a move to parity.Chris Turner GBP: Sterling enjoys the Bank of England re-pricing This week, sterling has been fighting back against the weaker euro. In addition to euro weakness on the back of higher gas prices, the move in gas has also helped to re-price the Bank of England cycle again. Look at OIS pricing for the BoE policy rate in March 2023, market pricing has shifted from 2.72% in late July to close to 3.40% yesterday. And on top of that, UK inflation quickened to 10.1% year-on-year in July, faster than expected and a new 40-year high. These moves are providing sterling with some insulation and any further extension in the gas price surge could send EUR/GBP all the way back to 0.8350. As an exporter of natural gas, the US does not face these challenges and our bias in GBP/USD remains sub 1.20. Chris Turner CEE: Poland most at risk of recession signals Today's GDP numbers will show the state of the economy in the CEE region in the second quarter, what we can expect from the third quarter and what the chances of a recession are. Two weeks ago, the Czech Republic released GDP data, which positively surprised with 0.2% quarter-on-quarter growth and narrowly avoided a downturn. Today, we will see data in the rest of the region. In Poland, we expect a 1.2% QoQ decline, worse than the market expects. But on a YoY basis, that still gives a solid 6.5%. For Hungary and Romania, we expect 0.4% growth, which is more or less in line with expectations, but in all cases the surveys are quite broad, reflecting the uncertainty associated with 2Q. We believe that Hungary was able to avoid a drop in GDP versus the previous quarter, as industry was able to shake off the supply-side issues by the end of the quarter. In the meantime, retail sales suggest that consumption has embarked on a soft landing, but we are not ready to call a drop yet in the second quarter. In Romania, after a very strong first quarter, the economy seems to have entered a phase of quasi-stagnation. Industrial production has probably contracted in the second quarter, but retail sales remain solid. In the FX space, the Polish zloty has resisted any significant upward movement as part of the sell-off in recent days, which today's data, supporting the National Bank of Poland's dovish narrative, should change. Moreover, the zloty so far has ignored rising gas prices and regional movements in recent days, which we believe makes it vulnerable. On the other hand, the Hungarian forint is already at the end of its sell-off unless we see another jump in gas prices or a strengthening US dollar, which could be the case after the Fed minutes today. On the other hand, the weaker forint has supported market expectations of a more decisive National Bank of Hungary rate hike, which has pushed the interest rate differential higher and should dampen any pressure on the forint to weaken further. The Czech koruna is almost within reach of Czech National Bank intervention levels and the scope for further depreciation is shrinking. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
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Forex: Australian Dollar To US Dollar (AUD/USD) - Forecast - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 10:18
Relevance up to 04:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. After a daily delay of the Australian dollar at 0.7015 today, since the opening of the session, the price resumed its decline, heading towards the nearest target of 0.6950. With the price going below the level, an attack will start to develop at 0.6870 – a low on August 5. The decline in stock indices on Asian markets (China A50 -0.38%, S&P/ASX 200 -0.09%) and lower prices for metals and oil (Brent -0.27%) helps the Australian currency to fall.     The Reserve Bank of New Zealand raised the rate from 2.50% to 3.00%, but this did not help even the New Zealand dollar. The daily Marlin Oscillator is getting closer and closer to the zero line, while maintaining the bears' optimism.     In order to develop the decline, the price still needs to settle below the level of 0.7015 on the four-hour chart. Here we see that Tuesday's consolidation took place under the MACD indicator line and when the Marlin Oscillator was in the negative area. This tells us about the likely imminent resumption of the downward movement of the Australian dollar.   Read more: https://www.instaforex.eu/forex_analysis/319098
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

FX: GBP/USD - British Pound (GBP) To US Dollar (USD) - Forecast - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 10:25
Relevance up to 04:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The pound slowed down corrective growth at the target level of 1.2100. If the price does not settle above it, then we are waiting for a reversal with the development of support for the MACD line of the daily scale in the area of 1.1965. Further, the 1.1800 target may open.     A large layer of inflation indicators for July will be released in the UK today. The core CPI is expected to rise from 5.8% y/y to 5.9% y/y, while the overall CPI could rise from 9.4% y/y to 9.8% y/y. Only a slight weakening is expected in producer prices - their selling prices may show an increase of 16.2% y/y against 16.5% y/y a month earlier. Thus, the option with the pound's growth is possible, we will consider its details on the four-hour chart.     Growth is limited by the MACD indicator line on the H4 chart, approximately at the level of 1.2170. At the current moment, the signal line of the Marlin Oscillator is turning down from the border with the territory of the growing trend. Therefore, consolidating under 1.2100 will resume the price decline in its main direction. First target at 1.1965.   Read more: https://www.instaforex.eu/forex_analysis/319100
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

This Forex Pair May Catch You By Surprise! Euro To US Dollar (EUR/USD) - Foreacast - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 10:34
Relevance up to 04:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The euro spent the entire Tuesday at the support level of 1.0150. There was no qualitative breakthrough under this level (with consolidation), we are waiting for it today or tomorrow. The correction limit is the daily MACD line (1.0206).     The euro spent the entire Tuesday at the support level of 1.0150. There was no qualitative breakthrough under this level (with consolidation), we are waiting for it today or tomorrow. The correction limit is the daily MACD line (1.0206).     The price is slowly developing a correction on the four-hour chart. The option with the price reaching the MACD line of the daily scale (1.0206) while the Marlin Oscillator works out the zero line and the subsequent synchronous downward turn seems to be the main scenario. In any case, after consolidating under 1.0150, we are waiting for further price decline to the level of 1.0020.   Read more: https://www.instaforex.eu/forex_analysis/319102
China’s Caixin Manufacturing PMI Data Might Support The New Zealand Dollar (NZD)

The Reserve Bank Of New Zealand Has The Best Main Interest Rate In 7 Years!!! RBNZ Will Be A Savior From Inflation!?

Conotoxia Comments Conotoxia Comments 17.08.2022 11:45
The Reserve Bank of New Zealand today raised its main interest rate by 0.5 percentage points, to 3 percent, a level last seen seven years ago. It was the fourth 50-basis point hike in the current cycle, which may make the RBNZ one of the stronger monetary tightening central banks to bring down inflation.   Today's hike was in line with market expectations. Some policymakers believe that inflation may soon begin to stabilize or even start to decline through lower fuel prices and transportation prices. However, inflation may not return to the New Zealand central bank's target until mid-2024. Thus, further monetary tightening may be required, with its end expected in the first quarter of 2023 - according to a statement issued to today's decision. As a result, the RBNZ may raise the main interest rate by about 3.75 percentage points throughout the cycle, to 4 percent, from the record low of 0.25 percent that occurred in 2021. Inflation in New Zealand rose to 7.3 percent y/y in the second quarter of 2022, up from 6.9 percent in the previous period. This was the highest figure since the second quarter of 1990.   The NZD/USD exchange rate seemed to react relatively calmly to the above decision, as it was in line with the market consensus. At 07:30 GMT+3 on the Conotoxia MT5 platform, the NZD/USD exchange rate rose by 0.25 percent, to 0.6360. As a result, at this hour, of the major currencies against the US dollar, it is the NZD that seems to have gained the most. Since the beginning of the month, the NZD has gained 1.10 percent to the USD, which may make New Zealand's currency the strongest of the world's major currencies.   Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Bank of New Zealand with another rate hike
FX: Euro To US Dollar (EUR To USD) - Plan And Technical Look - 17/08/22

FX: Euro To US Dollar (EUR To USD) - Plan And Technical Look - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 12:05
Relevance up to 05:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Technical outlook: EURUSD dropped throgh the 1.0125 lows during early New York session on Tuesday, remaining shy by just a few pips from the projected 1.0100-1.0110 range. The single Europen currency raised throgh the 1.0194 highs thereafter and is now seen to be trading close to the 1.0175 mark. Prices are expected to push towards the 1.0200-20 range in the immediate short term. EURUSD is working on a larger degree corrective wave towards the 1.0950 levels, revised from earlier projections, seen on the daily chart now. After having carved a meaningful downswing between the 1.2350 and 0.9952 levels, bulls are now looking poised to push through the Fibonacci 0.382 level towards the 1.0900 levels projected on the above chart. EURUSD has now retraced almost through the Fibonacci 0.618 level of its recent upswing between 0.9952 and 1.0368, which is close to the 1.0100-10 zone. If the above structure holds well, bulls will be determined to come back in control from here and push through at least the 1.0900 level, holding prices above the 0.9952 mark. Trading plan: Potential rally towards 1.0900 against 0.9950 Good luck!   Read more: https://www.instaforex.eu/forex_analysis/288770
The EUR/USD Price May Fall Under 1.0660

EUR/USD | FX: Euro To US Dollar - Technical Outlook And COT Report - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 12:14
EUR/USD 5M     The EUR/USD pair continued to fall quietly until it hit the level of 1.0123 on Tuesday, which was the last local low, the level from which the last round of the upward movement began. Yesterday this level was 1.0120, but by the end of the day we moved it 3 points higher. A rebound from this level provoked the euro's growth by 70 points, and we would like to note right away that such a strong and sharp growth was purely technical. Because no important macroeconomic statistics or "fundamentals" were available yesterday either in the US or in the European Union. Traders again had nothing to react to during the day. And after the completion of the current upward correction, we expect the pair to resume falling with targets near 20-year lows, which were updated a month ago. Correction may take several days. Everything in regards to Tuesday's trading signals was just fine. Or almost perfect. The fact is that the only trading signal was formed near the level of 1.0120, and the price did not reach it by 3 points. This is an acceptable error, but traders had to decide for themselves whether to open a long position at this moment or not. If they did this, they could make a profit of about 40 points. The nearest target line Senkou Span B was located very far away, so the deal had to be closed manually in the late afternoon anyway. COT report:     The Commitment of Traders (COT) reports on the euro over the past six months have raised a huge number of questions. The chart above clearly shows that for most of 2022 they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation has changed, but NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 8,400, and the number of shorts - by 4,100. Accordingly, the net position increased by about 4,000 contracts, which is a negligible change for the euro. The mood of major players remains bearish. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 35,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. The euro has not been able to show even a tangible correction over the past six months or a year, not to mention something more. The highest upward movement was about 400 points. The pair has just managed to correct by 400 points over the past four weeks. Has the plan been completed? We recommend to familiarize yourself with: Overview of the EUR/USD pair. August 17. The first two trading days of the week showed which way traders are looking. Overview of the GBP/USD pair. August 17. The pound is stuck. The first part of the statistics package this week was left without attention. Forecast and trading signals for GBP/USD on August 17. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H     The pair completed the upward trend and now rushed down again on the hourly timeframe. We believe that globally everything is going according to plan, as the euro corrected up by 400 points, so now there are sufficient technical reasons for the resumption of the downward trend. Macroeconomic statistics are now of little importance to traders, and they were not available either on Monday or Tuesday. And those reports that are scheduled for this week are unlikely to lead traders astray. We allocate the following levels for trading on Wednesday - 1.0000, 1.0072, 1.0123, 1.0269, 1.0340-1.0366, 1.0485, as well as Senkou Span B (1.0245) and Kijun-sen lines (1.0245). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect against possible losses if the signal turns out to be false. The European Union will publish the second estimate of GDP for the second quarter, and in the US - a report on retail sales. Both reports are not super important, so we do not expect a strong market reaction to them. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.
The Price Of EUR/USD Pair Will Develop Sideways Movement

Forex: EUR/USD - What To Look Out For? - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 12:40
Relevance up to 08:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Several interesting market entry signals were formed yesterday. Let's take a look at the 5-minute chart and figure out what happened. I paid attention to the 1.0144 level in my morning forecast and advised that you make decisions on entering the market from it. The pair's decline in the area of 1.0144 in the first half of the day after receiving disappointing data on Germany and the eurozone resulted in forming a false breakout and an excellent entry point into long positions. But to my regret, I did not see any active growth from the pair, and after moving up by 20 points, the euro returned to 1.0144. A repeated test of this range took place with a breakdown and a reverse test from the bottom up, which resulted in a sell signal. But even after that, the pair went down only about 15 points, after which the demand for the euro returned as a result of weak data on the US real estate market.     When to go long on EUR/USD: The euro has every chance for a further upward correction, but much will depend on the statistics that we will see in the first half of the day. Reports are expected on the change in the volume of eurozone GDP for the 2nd quarter of this year, and the change in the level of employment in the eurozone. Clearly, the eurozone economy has fared quite well in the first half of this year, as the energy crisis and high inflation have not yet taken a toll. However, trading is conducted on expectations, not on facts, so even if we receive good indicators, it is unlikely that it would help the euro much. If we see negative data worse than economists' forecasts, the pressure on the pair will return. If EUR/USD falls to the nearest support area of 1.0159, where the average moving averages playing on the bulls' side pass, forming a false breakout at this level will provide the first signal to open long positions in hopes of continuing to build an upward trend with the prospect of a return to 1.0193. A breakthrough and test from top to bottom of this range creates another signal for entering long positions with the possibility of moving up to 1.0221, a breakthrough above which will not be as easy as it seems, since it was from this level that large players sold the euro at the beginning of this week. If the EUR/USD declines and there are no bulls at 1.0159, the pressure on the pair will increase again. This will open the way to 1.0127, and further support at 1.0099, where I recommend taking profits. A test of this level will bring EUR/USD back into the descending channel observed since August 11. I advise you to buy EUR/USD immediately on a rebound only from 1.0073, or even lower - in the area of 1.0045, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears' main task is to protect the resistance at 1.0193, formed on the basis of yesterday's results. Weak statistics on the euro area will help to cope with this task, so forming a false breakout there will provide an excellent entry point for selling the euro. An equally important task is to take control of the nearest support at 1.0159, just below which the moving averages go. A breakthrough and consolidation below this range, as well as a reverse test from the bottom up - all this creates another sell signal with the removal of bulls' stops and a larger movement of the pair to the 1.0127 area - this month's low, a retest of which will erase all of the bulls' hopes for building an upward corrections. Consolidating below 1.0127 is a direct road to 1.0099, where I recommend completely leaving short positions. A more distant target will be the area of 1.0073. If EUR/USD moves up during the European session, as well as the absence of bears at 1.0193, it will be possible to observe a further upward correction with building the lower border of a new ascending channel. In this case, I advise you to postpone short positions to a new weekly high of 1.0221. Forming a false breakout at 1.0221 will be a new starting point for entering short positions. You can sell EUR/USD immediately for a rebound in the area of 1.0243, or even higher - from 1.0267, counting on a downward correction of 30-35 points.     COT report: The Commitment of Traders (COT) report for August 9 logged a sharp increase in both short and long positions, but the former turned out to be more, which continues to indicate the gradual end of the bear market and an attempt to find a market bottom after reaching euro parity against the US dollar. Statistics on inflation in the US came out last week, which turned everything upside down. The first slowdown in inflationary pressure in recent times since reaching a peak of 10.0% has brought back demand for risky assets. But, as you can see on the chart, it didn't last long. The risk of deterioration of the situation associated with the recession of the global economy discourages traders and investors from any desire to build up long positions in the euro. There are no important reports this week that can help the euro regain lost ground, so I would recommend betting more on trading on the horizontal channel. Definitely, before the fall of this year, we can hardly expect serious market shocks. The COT report shows that long non-commercial positions rose by 8,396 to 200,088, while short non-commercial positions jumped by 4,121 to 234,624. At the end of the week, the overall non-commercial net position remained negative, but slightly increased from -39,811 to -34,536, which indicates a continuation of the market turning towards euro bulls. The weekly closing price increased and amounted to 1.0233 against 1.0206.     Indicator signals: Moving averages Trading is above the 30 and 50-day moving averages, which indicates the euro's succeeding growth. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of a decline, the lower border of the indicator around 1.0140 will act as support. In case of growth, the upper border of the indicator in the area of 1.0193 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Read more: https://www.instaforex.eu/forex_analysis/319116
Apple May Surprise Investors. Analysts Advise Caution

Apple Supplier In China Closing Its Factories! Big European Aluminium Plant Stops Its Production Due To Unfavorable Conditions

Saxo Strategy Team Saxo Strategy Team 17.08.2022 12:53
  Summary:  The US equity market rally extended modestly yesterday, but turned tail upon the cash S&P 500 Index touching the key 200-day moving average at 4,325. Market today will eye the latest US Retail Sales report from July, which saw peak gasoline prices in the US mid-month, while the FOMC Minutes may prove a bit stale, given they were created before three weeks of the market rallying sharply and financial conditions easing aggressively, likely not the Fed’s intention.   What is our trading focus?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures broke above the 200-day moving average yesterday and then got rejected. Momentum in US equities got a bit more fuel from two good earnings releases from Home Depot and Walmart rising 4% and 5% respectively. S&P 500 futures are pushing higher again this morning and will likely attempt once more to break above the 200-day moving average. Long-term US interest rates are still well-behaved trading around the 2.8% level and the VIX Index has stabilised just below the 20 level. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hang Seng Index rallied 1% today, reversing yesterday’s loss. Meituan (03690:xhkg) bounced nearly 5% after its 9% drop yesterday due to a Reuters story suggesting that Tencent (00700:xhkg) plans to divest its 17% stake (USD24 billion) in Meituan.  Tencent denied such a divesture plan last night.  Power drills and floor care equipment maker and a supplier to Home Depot (HD:xnys), Techtronic Industries (00669:xhkg) jumped more than 7% after better-than-expected results from Home Depot overnight.  On Tuesday, China’s Premier Li Keqiang held a video conference with provincial chiefs from Jiangsu, Zhejiang, Shandong, Henan, and Sichuan to reiterate the central government’s push for full use of policies to stabilize the economy.  CSI300 gained 0.6%. USD pairs, including GBPUSD, which bounced strongly off 1.2000 support  A mixed overnight session for FX as the US yields wobbled. Risk sentiment held up with the mixed US data accompanied by a less bad outcome in the US retailer earnings than expected. This made the safe-haven yen a clear underperformer, and USDJPY rose back above 134. But a clear trend in the pair is still missing and a break above 135 is needed to reverse the downtrend. Cable teased key psychological support at 1.2000 yesterday before rising later in the day above 1.2100 ahead of today’s UK CPI report, which may confirm the need for further BOE action after labor data showed wage pressures. EURUSD bounced from session lows at 1.0123 but has posted a recent bearish reversal that keeps the focus lower, particularly on any breakdown through 1.0100, the multi-week range low. USD traders will focus on today’s US Retail Sales and FOMC minutes. USDCNH – there was a brief spike higher in USDCNH earlier this week as China moved to stimulate with a small 10-basis point rate cut of the key lending rate – no drama yet, but traders should keep an eye on this very important exchange rate for larger volatility and significant break above 6.80, as Chines exchange rate policy shifts can provoke significant moves across markets. Crude oil (CLU2 & LCOV2) touched a fresh six-month low on Tuesday with Brent trading lower, in anticipation of the Iran nuclear deal being revived, before bouncing in response to the API reporting a draw in crude oil and especially gasoline stocks. While a deal with Iran could see it raise production by around one million barrels per day, Goldmans talks about a mutually beneficial stalemate for both sides with Iran wanting to avoid sanctions while the US wants to avoid higher oil prices but also the political backlash from a potential deal. EIA’s weekly crude and fuel stocks report on tap later with the market also focusing on gasoline demand and the levels of exports. Over in Europe meanwhile the Dutch TTF benchmark gas trades near an eye-popping $400 per barrel crude oil equivalent, a level that will continue to attract demand for oil-based products due to switching. Copper (COPPERUSSEP22) continues to trade within its established upward trending range after China’s Premier Li Keqiang asked local officials from six provinces to bolster pro-growth measures after weaker financing and activity data were reported earlier this week. In addition, copper is also enjoying some tailwind from rising zinc and aluminum prices after Europe's largest smelters said it would halt production and after producers in China were told to curb production in order to preserve electricity supply during the current heatwave. HG copper’s trading range has narrowed to between $3.585, the uptrend from the July low and $3.663 the 50-day moving average.   What is going on?   US housing scare broadens, industrial production upbeat US Housing starts fell 9.6% in July to an annualized 1,446k, well beneath the prior 1,599 and the expected 1,537k. Housing starts are now down for five consecutive months, and suggest a cooling housing market in the wake of higher borrowing costs and higher inflation. Meanwhile, building permits declined 1.3% in July to 1,674k from 1,696, but printed above the expected 1,650k. There will be potentially more scaling back in construction activity as demand weakens and inventory levels rise. On the other hand, industrial production was better than expected at 0.6% m/m (prev: -0.2%) in July, possibly underpinned by holiday demand but the outlook is still murky amid persistent inflation and supply chain issues. UK headline inflation hits 10.1% The highest in decades and above the 9.8% expected and for the month-on-month reading of +0.6%, higher than the +0.4% expected. Core inflation hit 6.2% vs. 5.9% expected and 5.8% in Jun. That matched the cycle high from back in April. Retail inflation rose +0.9% MoM and +12.3% YoY vs. +0.6%/+12.0% expected, respectively. The Bank of England has forecast that inflation will peak out this fall at above 13%. Reserve Bank of New Zealand hikes 50 basis points to 3.00%, forecasts 4% policy rate peak The RBNZ both increased and brought forward its peak rate forecast to 4.00%, a move that was actually interpreted rather neutrally – more hawkish for now, but suggesting that the RBNZ would like to pause after achieveing 4.00%. 2-year NZ rates were unchanged later in the session after a brife poke higher. RBNZ Governor warned in a press conference that New Zealand home prices will continue to fall. This is actually a desired outcome after a huge spike in housing speculation and prices due to low rates from the pandemic response and massive pressure from a Labor-led government that had promised lower housing costs were behind the RBNZ’s quick pivot and more aggressive hiking cycle in 2021. Walmart shares rally on improved outlook The largest US retailer surprised on both revenue and earnings in its Q2 report with most of the revenue growth coming from higher prices and not volume. The retailer now sees an EPS decline of 9-11% this fiscal year compared to previously 11-13% suggesting input cost pressures are easing somewhat. Walmart is seeing more middle and high-income customers and the retailer has also cancelled orders for billions of dollars to lower inventory levels suggesting global supply chains are improving. Walmart shares were up 5%. Home Depot still sees robust market The largest US home improvement retailer beat on revenue and earnings yesterday in its Q2 results with Q2 comparative sales up 5.8% vs est. 4.6% highlighting that volumes are falling as revenue growth is below inflation rates. The US housing market figures on housing starts and permits cemented that the US housing market is slowing down due to the recent rally in mortgage rates. Home Depot is taking a conservative approach to guidance, but the market nevertheless pushed shares 4% higher. Apple supplier Foxconn suspends its factory in Chengdu due to a power crunch Foxconn’s Chengdu factory is suspending operations for six days from August 15 to 20 due to a regional power shortage. The suspension is affecting Foxconn’s supply of iPad to Apple. The company says the impact “has been limited at the moment” but it may affect shipments if the power outage persists. The Chengdu government is imposing power curbs on industrial users to ensure electricity supply for the city’s residents. At the same time, Foxconn has started test production of the Apple watch in its factories in Vietnam. With the passage of CHIPS and Science Act earlier this month in the U.S., there have been speculations that Taiwanese and Korean chipmakers and their customers may be accelerating the building up of production capacity away from China. Big European aluminium plant to halt production Norsk Hydro’s aluminium plant in Slovakia is halting primary production by end of September due adverse conditions such as elevated electricity prices. The aluminium company would incur significant financial losses should it continue its operations.   What are we watching next?   Eyes on US retail sales today  US retail sales will be next test of the US consumer after less bad retailer earnings last night. Retail sales should have been more resilient given the lower prices at pump improved the spending power of the average American household, and Amazon Prime Day in the month possibly attracted bargain hunters as well. However, consensus expectations are modest at 0.1% m/m compared to last month’s 1.0%. FOMC minutes to be parsed for hints on future Fed moves The Federal Reserve had lifted rates by 75bps at the late July meeting to bring the Fed Funds rate to a level they have previously considered neutral, but stayed away from providing any forward guidance. The minutes of that July meeting are to be released later today, and member comments will be watched closely for any hints on the expectation for September rate hike or the terminal Fed rate. The hot July US jobs report and the cooling July inflation number, as well as a blistering three week rally in equity markets have further confused the markets since the Fed meeting, even as Fed speakers continue to push against any expectations of rate cuts as soon as ‘early’ 2023. The next chief focus for Fed guidance will remain on the Fed’s Jackson Hole, Wyoming symposium next week. Earnings to watch Today’s European earnings focus is Carlsberg and Coloplast with the former reporting strong first-half organic growth of 20.7% vs est. 15.5% suggesting breweries are seeing healthy volume and price gains. Tencent is the key focus in Asia and especially given the recent developments in China on anti-monopoly laws and its decision to divest its $24bn stake in Meituan. In the US the focus will be on Cisco which saw its growth grinding to a halt in the previous quarter. Wednesday: Tencent, Hong Kong Exchanges & Clearing, Analog Devices, Cisco Systems, Synopsys, Lowe’s, CSL, Target, TJX, Coloplast, Carlsberg, Wolfspeed Thursday: Applied Materials, Estee Lauder, NetEase, Adyen, Nibe Industrier, Geberit Friday: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Economic calendar highlights for today (times GMT) 0900 – Eurozone Q2 GDP Estimate 1230 – US Jul. Retail Sales 1430 – US Weekly Crude Oil and Product Inventories 1800 – US FOMC Minutes 1820 – US Fed’s Bowman (Voter) to speak 2110 – New Zealand RBNZ Governor Orr before parliamentary committee 0130 – Australia Jul. Employment Change (Unemployment Rate)   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Has The Best Main Interest Rate In 7 Years
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

Forex: EUR/USD - Analysis Of Transactions And Trading Tips - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 12:56
Relevance up to 08:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Analysis of transactions in the EUR / USD pair The test of 1.0144 took place at the moment when the MACD went down quite a lot from zero, limiting the downside potential of the pair. Some time later, another test happened, but this time the MACD line was already recovering from the oversold area. This seemed to be a good signal to buy, however, it only led to losses as the euro turned up only in the afternoon. The test of 1.0170, which occurred when the MACD line was far from zero, did not allow further purchases in the market.     EUR/USD was under pressure because of yesterday's report on business sentiment and present situation in Germany. But by afternoon, there was a bullish correction in the pair, thanks to the data on the US real estate market, which lowered demand for dollar. Ahead is the report on Q2 GDP of the Euro area, which, if not revised for the worse, will raise the price of euro. The unemployment report, meanwhile, will be of little interest to the market. No less important data is the report on retail sales in the US as a decrease in it will not only indicate an impending recession, but also harm dollar in the short term. There will also be the minutes of the Fed meeting, which will shed light on how the central bank plans to further raise interest rates. A less aggressive approach will play in the favor of risky assets. The speech of FOMC member Michelle Bowman will not be of great interest. For long positions: Buy euro when the quote reaches 1.0185 (green line on the chart) and take profit at the price of 1.0219. Although there is little chance for a large rally today, good data on the eurozone economy could prompt a rise to new highs. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0152, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0185 and 1.0219. For short positions: Sell euro when the quote reaches 1.0152 (red line on the chart) and take profit at the price of 1.0107. Pressure will return if the upcoming statistics in the Euro area fell short of forecasts. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0185, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0152 and 1.0107.     What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Read more: https://www.instaforex.eu/forex_analysis/319126
Construction Activity in Poland Contracts in May: Focus on Building Decline and Infrastructure Investment

GBP/USD - Selling And Buying - Possible Scenarios - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 13:07
Relevance up to 08:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Analysts of positions and tips for trading GBP The first test of 1.2032 occurred at a time when the MACD had just started to move down from the zero level. It gave a good entry point for short positions. Unfortunately, a sell signal did not last long. After dropping by 15 pips, the pressure on the pound sterling decreased. Closer to the middle of the day, a similar sell signal appeared, which also led to a downward movement of about 15 pips. The pound/dollar pair rose sharply in the afternoon. The test of 1.2090, where I advised selling immediately for a rebound, gave a sell signal. However, the signal did not bring the expected result.     The pound sterling declined slightly in the first half of the day following labor market data. However, the pair avoided a new big sell-off thanks to a sharp increase in average weekly earnings. After the release of the US housing market report, the pound/dollar pair asserted strength, signaling a trend reversal. Today, in the morning, the UK Consumer Price Index and the UK Retail Price Index will be in the spotlight. If these indicators climb higher, which is likely, the pound sterling will face strong bearish pressure. It will limit the upward potential of the pair. In this case, I would advise you to act according to scenario No. 2 for opening short positions. In the afternoon, there will be more crucial economic reports, namely US retail sales data. If the reading drops, it is likely to undermine a rally of the US dollar in the short term. A negative figure will indicate an impending recession. The publication of the FOMC meeting minutes will shed light on the Fed's future plans for monetary policy in the autumn. If there are hints at less aggressive rate hikes, it could fuel demand for risky assets. Fed official Michelle Bowman will deliver a speech today, however, traders are likely to ignore it. Buy signal Scenario No.1: it is recommended to open long positions on the pound sterling today if the price reaches 1.2125 (green line on the chart) with the prospect of a rise to 1.2176 (thicker green line on the chart). At the 1.2176 level, I recommend closing all long positions and opening short ones, keeping in mind a correction of 30-35 pips from the given level. The par may advance significantly only if UK inflation data is positive. Important! Before opening long positions, make sure that the MACD indicator is above the zero level and it has just started to rise from it. Scenario No.2: it is also possible to buy the pound sterling today if the price approaches 1.2096. At this moment, the MACD indicator should be in the oversold area, which will limit the downward potential. It may also trigger an upward reversal of the market. The pair is expected to lift up to the opposite levels of 1.2125 and 1.2176. Sell signal Scenario No.1: it is recommended to open short positions if the pair hits 1.2096 (the red line on the chart). It could lead to a rapid decline in the pair. The bears should focus on the 1.2051 level. At this level, it is better to close all short positions and open long ones, keeping in mind a correction of 20-25 pips from the given level. The pressure on the pound sterling may return if the UK CPI index rises. Important! Before opening short positions, make sure that the MACD indicator is below the zero level and it has just started to decline from it. Scenario No.2: it is also possible to sell the pound sterling today if the price drops to 1.2125. At that moment, the MACD indicator should be in the overbought area, which will limit the upward potential of the pair. It may also trigger a downward reversal. The pair is projected to edge lower to the opposite levels of 1.2096 and 1.2051.     What is on the chart: The thin green line is the entry point where you can buy the trading instrument. The thick green line is the estimated price where you can place a Take profit order or lock in profits manually as the price is unlikely to rise above this level. The thin red line is the entry point where you can sell the trading instrument. The thick red line is the estimated price where you can place a Take profit order or lock in profits manually as the price is unlikely to decline below this level. The MACD indicator. When entering the market, it is important to pay attention to overbought and oversold zones. Important. Novice traders need to make very careful decisions when entering the market. Before the release of important fundamental reports, it is better to stay out of the market. It will help you avoid losses due to sharp price fluctuations. If you decide to trade during the news release, always place Stop loss orders to minimize losses. Without placing Stop loss orders, you can lose the entire deposit very quickly, especially if you do not use money management but trade in large volumes. Remember that for successful trading it is necessary to have a clear trading plan, following the example of the one I presented above. Relying on spontaneous decisions based on the current market situation is a losing strategy of an intraday trader.   Read more: https://www.instaforex.eu/forex_analysis/319128
The USD/CNH Pair Remains On The Bear’s Trend

China Is Planning The Devaluation? If So, CNHUSD May Become A Strong Value

Saxo Bank Saxo Bank 17.08.2022 13:20
Summary:  Today we look at the US equity market rolling over a bit after hitting a key resistance point in the form of the S&P 500's 200-day moving average. We continue to note the resilient US dollar and the risk of USDCNH suddenly commanding the market's attention again if China moves to devalue its currency. We also zero in on weak Antipodean currencies as AUDUSD struggles and NZD can't get a boost from the RBNZ overnight. Crude oil, industrial metals, the latest on the dire power emergency in the EU, danger of meme stocks, earnings ahead and more on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Watching for signs of altitude sickness
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

Forex: British Pound To US Dollar (GBP/USD) - Hot Forecast - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 13:29
Relevance up to 19:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. It was expected that the growth rate of industrial production in the United States will slow down from 4.2% to 4.0%, which should have been the reason for a slight rebound. In principle, everything happened just like that, and the pound strengthened its positions a bit. Only now the data turned out to be slightly worse than forecasts. Previous results were revised down to 4.0%. And the growth rates themselves slowed down to 3.9%. Industrial production (United States):     Today, the pound will continue to grow, already due to data on inflation in the UK, which should accelerate from 9.4% to 9.9%. Such a strong rise in inflation will convince market participants that the Bank of England will not only continue to raise interest rates, but will do so more actively. This alone is enough for the steady growth of the British currency. Inflation (UK):     At the same time, the pound's growth will obviously be of a protracted nature, as it will be supported by data on retail sales in the United States. And their growth rates should slow down from 8.4% to 8.1%. So we are talking about a decrease in consumer activity, which is the main locomotive of the American economy. Retail Sales (United States):     The GBPUSD currency pair rebounded from the psychological level of 1.2000 with surgical precision. As a result, there was an increase in the volume of long positions, which caused the pound to strengthen by about 100 points. The technical instrument RSI H4 crossed the 50 middle line upwards at the time of the rollback, which indicates a slowdown in the downward cycle from the resistance level of 1.2300. Alligator H4 has an intersection between the green and red MA moving lines. In this case, this crossover corresponds to a slowdown in the downward cycle. While Alligator D1 has a lot of crossovers, which indicates a slowdown in the medium-term downward trend.     Expectations and prospects The rollback stage may well slow down the move around 1.2120/1.2150. In this case, there will be a gradual increase in the volume of short positions, returning the quote to the psychological level of 1.2000. The scenario of prolongation of the current rollback will be considered if the price stays above the value of 1.2160 in a four-hour period. Comprehensive indicator analysis in the short-term and intraday periods has a buy signal due to the rollback stage. Indicators in the medium term have a variable signal, due to a slowdown in the downward trend.   Read more: https://www.instaforex.eu/forex_analysis/319112
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

GBP May Skyrocket In Autumn! September's Bank's Of England Decision - ING Economics Forecasts 50bp Rate Hike

ING Economics ING Economics 17.08.2022 14:33
Eyewatering increases in household energy bills between now and next April mean inflation is likely to head above 12% from October. But core inflation might have peaked - or is close to peaking - now that goods price pressures are easing. We expect another 50bp rate hike from the Bank of England in September   UK inflation has gone above 10% for the first time since 1980, and indeed both headline and core CPI measures came in above expectations. A lot of that surprise can be traced back to a huge 2.2% month-on-month increase in food prices (in the case of headline CPI) and a sizable increase in various housing costs (in the case of core). Next month, headline inflation looks set to dip back below 10% on a near-7% fall in average petrol/diesel prices, which came too late to affect the July figures. But as everyone knows, that’s only a temporary reprieve with a 75% increase in the household energy cap on its way in October. While it’s not totally clear yet how the Office for National Statistics will treat the government’s £400 discount for household bills, this increase in electricity/gas costs looks set to take inflation above 12% later this year. UK inflation set to head above 12% Source: Macrobond, ING   Plugging the latest wholesale gas and electricity costs into the regulator’s spreadsheet, we estimate that the average household bill will have risen from roughly £2000 currently, to £3500 in October, before heading to roughly £4500 in January and above £5000 in April next year. That latter figure is £1000 higher than it was when we ran these figures at the end of July and reflects a further abrupt rise in gas prices over recent weeks. Those sequential increases mean that inflation is likely to hover around (or a bit above) 12% from October through to about February. Thereafter the energy impact will gradually dissipate and in fact, by 2024, inflation is likely to be a bit below the Bank of England’s 2% target – assuming that energy prices do indeed begin to gradually edge lower from mid-2023. What matters more for policymakers are signs of persistence in the inflation numbers. And once food and energy costs are stripped out, core inflation looks like it might have peaked – or is close. Goods price pressures look set to ease over coming months now that commodity costs have fallen and the insatiable demand for ‘stuff’ seen through the pandemic has faded, and retailers are reporting they have more inventory. Used car prices, which were one of the most extreme examples of pandemic-related goods inflation, have fallen 7% since January. What matters more for policymakers are signs of persistence in the inflation numbers Instead, it is wage pressures that will heavily influence the Bank of England’s decision-making over coming months. As we discussed yesterday, wages (at least in nominal terms) have decent momentum right now, but there’s a lot of uncertainty over how far labour demand is falling, and how much labour supply is improving. In the near term, skill shortages remain a big issue for companies For now, we expect another 50bp rate hike in September. We wouldn’t rule out another hike in November, though this heavily depends on the fiscal response from the new prime minister in September. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Carbon Footprint of Different Steel Production Technologies

Forex: So Could Japanese Yen (JPY) Finally Start To Grow?

InstaForex Analysis InstaForex Analysis 17.08.2022 14:52
Relevance up to 10:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results.   Since the beginning of the year, the dollar has gained more than 10% against the yen. However, now the alignment of forces is beginning to quietly but surely change in favor of the JPY. How and why can the yen take the lead? The dollar is still on the horse The main growth trigger for the USD/JPY pair this year was the monetary divergence. While the US Federal Reserve is actively fighting inflation by raising interest rates, its Japanese counterpart continues to go the dovish route.The bearish yen peaked in mid-July. Back then, on expectations of a more hawkish Fed policy, USD/JPY jumped to a new 24-year high of 139. Many experts predicted that a further increase in the difference in interest rates between the US and Japan would allow the asset to rise above the level of 140. But this did not happen. On the contrary, since reaching its July low, the Japanese yen has managed to strengthen against the dollar by 3%. It was strongly supported by the latest US inflation report. Recall that in July, inflationary pressure in the US eased significantly. This provoked speculation about a possible slowdown in the rate hike by the Fed. However, most Fed officials are still in favor of continuing the aggressive course. This keeps US Treasury yields high and fuels the dollar. Yesterday, the yield on 10-year US bonds rose to 2.82%, while the greenback index updated a 3-week high, reaching 106.94. The figures rose ahead of today's release of the minutes of the meeting of the Federal Open Market Committee. Investors expect to see hints of a 75 bps rate hike in the FOMC minutes in September. Against this backdrop, the USD/JPY pair showed a spectacular rise on Tuesday, soaring to 134. Compared to the low of 131.73 reached on August 11, the asset rose by 1.7%.     Obvious-incredible: the yen will rise Despite the current weakness of the Japanese currency against the dollar, some analysts believe that the JPY will begin to gradually gain strength in the near future. The fact that the yen now has a good growth potential is evidenced by its impressive dynamics in other currency pairs. Thus, against the euro, the exchange rate of the yen jumped by almost 6% from its June low - a mark of 144. And against the British pound, the yen has grown since the beginning of August by about 4%. "The yen's selling momentum is clearly waning from its peak," said currency strategist Yukio Ishizuki. – Of course, we are not yet seeing a massive move to buying JPY, but we see that it is becoming increasingly difficult for traders to stick to the strategy of short positions in the yen. The latest data from the Commodity Futures Trading Commission showed that leveraged investors cut their net bearish bets on the Japanese currency to the lowest level since March last year. All this indicates that the worst for the yen seems to be over. Just ahead is an ascent in relation to many currencies, including the dollar. Recall that on June 21, the trade-weighted yen index bottomed out. Since then, the JPY has been able to rise against 8 of its peers from the group of 10. "This is a sign that the recovery in the yen may be more than just a reaction to the recent narrowing of the gap between US and Japanese bond yields," writes Bloomberg. According to analysts of the release, the main catalyst for the yen's growth now is the growing fears about the slowdown in global economic growth. The risk of a global recession amid a deep energy crisis in Europe increases the appeal of safe assets, which traditionally include the Japanese currency. Bloomberg analysts believe that the level of bull confidence in the yen could be even more stable if the JPY managed to strengthen more against the Australian dollar. Since June 21, the yen has risen only 1% against the aussie. Meanwhile, a further decline in commodity prices due to fears of a slowdown in the global economy could undermine the position of the Australian currency. In this case, the yen index is likely to begin a convincing increase, as a result of which a bullet will be put in the USD/JPY rally.   Read more: https://www.instaforex.eu/forex_analysis/319152
Sebastian Seliga (InstaForex) Comments On FX (NZD/USD, GBP/USD), Bitcoin And More

Sebastian Seliga (InstaForex) Comments On FX (NZD/USD, GBP/USD), Bitcoin And More

InstaForex Analysis InstaForex Analysis 17.08.2022 15:13
Relevance up to 10:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Let's take a look at the technical picture of NZD/USD, GBP/USD, USDX and Bitcoin. Read more: https://www.instaforex.eu/video_analysis/288849
Saxo Bank Podcast: The Upcoming Bank Of Japan Meeting, A Look At Crude Oil, Copper And More

USD To JPY: This FX Pair Has Been Topping The Headlines For Some Time! US Dollar To Japanese Yen (USD/JPY) - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 15:56
Relevance up to 09:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   USD/JPY: The chart shows the movement of USD/JPY in the four-hour (H4) chart. Comparing the recent movement to that of July 16, July 27 and August 4's, it is clear that the pair is in protracted correction, which will end when the quotes reach the resistance level of Y135.00 per $1. A breakdown of the resistance level will cancel the trend reversal. Good luck! Read more: https://www.instaforex.eu/forex_analysis/319138
The EUR/USD Pair Is Still In A High Position On The 1H Chart

Forex: Euro To US Dollar (EUR/USD) Short And Long Positions - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 16:18
Relevance up to 12:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. In the morning article, I highlighted the level of 1.0159 and recommended making decisions with this level in focus. Now, let's look at the 5-minute chart and try to figure out what actually happened. A sell signal appeared after a decline of the pair to 1.0159 in the first half of the day and an upward test. Unfortunately, this signal brought losses as I did not expect the pair to fall further. Closer to the middle of the day, the bulls pushed the price above 1.0159. Therefore, I had to revise the technical outlook.     What is needed to open long positions on EUR/USD Traders paid zero attention to the Eurozone's GDP data even though the second-quarter GDP reading was slashed. Apparently, nobody expects the economy to accelerate in the third quarter as it is gradually sliding into a recession due to soaring inflation and rate hikes. In the autumn, the situation could worsen significantly when energy prices go up again. Today, traders are anticipating the FOMC meeting minutes for July. They may provide more hints about the Fed's future plans for monetary policy. It may also reveal whether the Fed is going to hike the key rate in the autumn. If the minutes are less hawkish than expected, the euro may assert strength. If the pair drops, only a false breakout of 1.0154 will give a buy with the prospect of a rise to the nearest resistance level of 1.0192. Yesterday, the bulls failed to push the pair above this level. A breakout and a downward test of this level along with a dovish tone of the minutes will force the bears to close their Stop Loss orders. As a result, an additional buy signal may appear with the possibility of an increase to 1.0221. A more distant target will be a new high of 1.0243 where I recommend locking in profits. If EUR/USD slides and buyers show no activity at 1.0154, the pressure on the pair will escalate. Notably, the price has already tried to break through this level today. In this case, the bullish sentiment may lose steam. The best option for opening long positions will be a false breakout of 1.0127. You can buy EUR/USD immediately at a bounce from 1.0099 or a low of 1.0045, keeping in mind an upward intraday correction of 30-35 pips. What is needed to open short positions on EUR/USD Apart from the FOMC meeting minutes, investors are sure to take notice of US retail sales data. If the reading drops in July, it may undermine a rally of the US dollar. It will be rather bullish for the euro. So, it could grow to 1.0192. If big sellers are present in the market, they will easily defend this level. The optimal scenario for opening short positions will be a false breakout of the resistance level of 1.0192. If so, the euro could decline to 1.0154. A decrease below this level and an upward test will provide an additional sell signal. The bulls will have to close their Stop Loss orders, pushing it to 1.0127. After a slide below this level, the likelihood of an uptrend will be low. Therefore, the price could touch 1.0099 and 1.0073 where I recommend closing all short positions. A more distant target will be the 1.0045 level. If EUR/USD rises during the US session and bears show no energy at 1.0192, the bulls are likely to regain ground. Weak retail sales data could also help the euro climb higher. In this case, I would advise you to postpone short positions to 1.0221 but only if a false breakout occurs. You can sell EUR/USD immediately at a bounce from a high of 1.0243 or 1.0267, keeping in mind a downward correction of 30-35 pips.     COT report The COT report (Commitment of Traders) for August 9 logged a sharp increase in both short and long positions. However, the number of short positions turned out to be bigger, which indicated the gradual end of the bear market and an attempt to find the bottom after reaching the parity level. Last week, US fresh macro stats were released, which turned everything upside down. The CPI report showed the first slowdown in inflation after reaching a peak of 10.0%. It fueled demand for risky assets. As seen on the chart, risk aversion soon returned to the market. Traders are unwilling to increase long positions due to the risks of a global recession. No crucial economic reports are expected this week that could facilitate the growth of the euro. Therefore, the euro is likely to stay in the sideways channel. There could hardly be sharp trend reversals before the fall of this year. The COT report revealed that the number of long non-commercial positions rose by 8,396 to 200,088, while the number of short non-commercial positions jumped by 4,121 to 234,624. At the end of the week, the total non-commercial net position, although it remained negative, climbed slightly to -34,536 from -39,811, signaling a shift to the bull market. The weekly closing price climbed to 1.0233 against 1.0206.     Signals of technical indicators Moving averages EUR/USD is trading near 30- and 50-period moving averages, which signals market uncertainty. Remark. The author is analyzing the period and prices of moving averages on the 1-hour chart. So, it differs from the common definition of classic daily moving averages on the daily chart. Bollinger Bands In case of a rise, the upper border of 1.0180 will act as resistance. Definitions of technical indicators Moving average recognizes an ongoing trend through leveling out volatility and market noise. A 50-period moving average is plotted yellow on the chart. Moving average identifies an ongoing trend through leveling out volatility and market noise. A 30-period moving average is displayed as the green line. MACD indicator represents a relationship between two moving averages that is a ratio of Moving Average Convergence/Divergence. The MACD is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12-period EMA. A 9-day EMA of the MACD called the "signal line". Bollinger Bands is a momentum indicator. The upper and lower bands are typically 2 standard deviations +/- from a 20-day simple moving average. Non-commercial traders - speculators such as retail traders, hedge funds and large institutions who use the futures market for speculative purposes and meet certain requirements. Non-commercial long positions represent the total long open position of non-commercial traders. Non-commercial short positions represent the total short open position of non-commercial traders. The overall non-commercial net position balance is the difference between short and long positions of non-commercial traders.   Read more: https://www.instaforex.eu/forex_analysis/319173
Liquidity at Stake: Exploring the Risks and Challenges for Non-Bank Financial Intermediaries

Sterling (GBP) And Dollar (USD) Are At The Top Of The World!!! What To Consider Next?

John Hardy John Hardy 17.08.2022 17:04
Summary:  The stronger US dollar is beginning to dominate across FX, and we haven’t even seen risk sentiment roll over badly yet, although this time it could be the US dollar itself that defines and drives financial conditions across markets. Elsewhere, we have seen an interesting fundamental test of sterling over the last couple of sessions, as sterling has begun rolling over today, even as a ripping increase in rate tightening bets in the wake of another hot CPI print out of the UK this morning. FX Trading focus: USD dominating again, GBP rate spike impact fading fast and indicating danger ahead for sterling. RBNZ hawkishness fails to impress the kiwi. The US dollar rally is broadening and intensifying, and US long yields are threatening back higher, which is finally pushing back against the recent melt-up in financial conditions/risk sentiment. The US July Retail Sales report looks solid, given the +0.7% advance in “ex Autos and Gas” sales after the June spike in average nationwide gasoline price to the unprecedented 5 dollar/gallon level. Yes, July gasoline prices were lower than June’s, but there wasn’t a huge delta on the average price for the month, and the impact of lower gas prices will likely be more in the August full month of vastly lower prices – presumably averaging closer to 4/gallon, together with the psychological relief that the spike seems in the rear view mirror, even if we can’t know whether a fresh spike awaits in the fall, after the draw on strategic reserves is halted. A strong US dollar, higher US yields and a fresh unease in risk sentiment are a potential triple whammy in which the US dollar itself is the lead character, as USDJPY has reversed back above 135.00 even before the US data, suggesting a threat back toward the cycle highs. AUDUSD has entirely reversed its upside sprint above 0.7000, refreshing its bearish trend after a squeeze nearly to the 200-day moving average there. Elsewhere, EURUSD and GBPUSD are a bit stuck in the mud, watching 1.0100 and 1.2000 respectively. The most important additional aggravator of this USD volatility in coming sessions would be a significant break higher in USDCNH if China decides it is tiring again of allowing the CNH to track USD direction at these levels. The pressure has to be building there after the PBOC’s rate cut at the start of the week. The UK July CPI release this morning raised eyebrows with another beat of expectations across the board, the day after strong earnings data. The 10.1% headline figure represents a new cycle and the month-on-month figure failed to moderate much, showing +0.6% vs. +0.4% expected. Core inflation also rose more than expected, posting a gain of 6.2% YoY and thus matching the cycle high from  April. The Retail Price Index rose 12.3% vs. 12.1% expected. The market reaction was easily the most interesting, as we have seek UK yields flying higher but failing to impress sterling much after a bit of a surge yesterday and into this morning. Now, sterling is rolling over despite a 40 basis point advance(!) in the 2-year swap rate from yesterday’ open, much of that unfolding in the wake of the CPI release today. Chart: GBPUSD Not that much drama at the moment in the GBPUSD chart, but that is remarkable in and of itself, as the soaring UK yields of yesterday and particularly today in the wake of a higher than expected CPI release are not doing much to support sterling. When rate moves don’t support a currency, it is starting to behave somewhat like an emerging market currency, a dangerous signal for the sterling, where we watch for a break of 1.2000 to usher in a test of the cycle lows below 1.1800, but possibly even the pandemic panic lows closer to 1.1500. The Bank of England hikes will only a accelerate the erosion of demand and slowdown in the UK economy that will lead to a harsh recession that the Bank of England itself knows is coming, but may have to prove slow to react to due to still elevated inflation levels, in part on a weak currency. Source: Saxo Group The RBNZ hiked fifty basis points as expected overnight and raised forward guidance for the Official Cash Rate path to indicate the expectation that the OCR will peak near 4%, a raising and bringing forward of the expected rate peak for the cycle. In the press conference, RBNZ Governor Orr spelled out the specific guidance that he would like to get the rate to 4% and take a significant pause to see if that is enough. “Our view is that sitting around that 4% official cash rate level buys the monetary policy committee right now significant comfort that we would have done enough to see inflation back to our remit.” NZ short rates were volatile, but hardly changed by the end of the day, meaning that NZD direction defaulted to risk sentiment, with a fresh dip in AUDNZD erased despite a weak AUD, and NZDUSD confirming a bearish reversal. Table: FX Board of G10 and CNH trend evolution and strength. Note the big shift in USD momentum, the most notable on the chart, although the absolute value of the SEK negative shift has been even larger over the last few days as EU woes and the growth outlook weigh even more heavily on SEK, which is often leveraged to the EU outlook, also as EURSEK has now failed to progress lower after a notable break below the 200-day moving average. Note the AUD negative shift as well, with sluggish wage growth data overnight for Q2 offering no helping hand. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs. USDJPY looks to flip back to a positive trend on a higher close today or tomorrow, the recent flip negative in GBPUSD looks confirmed on a hold below 1.2000, and AUDUSD looks a matter of time before flipping negative as well, while USDCAD has beaten it to the punch – although a more forceful upside trend signal there would be a close above 1.3000 again. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1800 – US FOMC Minutes 1820 – US Fed’s Bowman (Voter) to speak 2110 – New Zealand RBNZ Governor Orr before parliamentary committee 0130 – Australia Jul. Employment Change (Unemployment Rate)   Source: FX Update: GBP in danger as rate spike fails to support. USD dominating.
Hold On Tight! Look How Much Has (EUR) Euro Weakened Against USD (US Dollar) Since The Beginning Of 2021!

Hold On Tight! Look How Much Has (EUR) Euro Weakened Against USD (US Dollar) Since The Beginning Of 2021!

ING Economics ING Economics 18.08.2022 10:27
The euro's depreciation has helped to improve the competitiveness of eurozone businesses but in contrast to previous episodes of euro weakness, exports are hardly benefiting. Remarkably, structurally weaker eurozone economies have gained relative competitiveness since the start of the pandemic Does parity bring relief for eurozone exporters? Euro-dollar reached parity for the first time since 2002 - a milestone that is largely symbolic. However, the weakening of the euro, in general, deserves attention. The euro has been falling against the dollar since mid-2021, which seems to be largely related to diverging central bank expectations and a sudden decline in the eurozone's trade balance. The latter is mainly related to the energy crisis, which has turned a solid trade surplus into a large trade deficit. The high energy prices paid in international markets have played an important role in the weakening of the currency. Because the energy element is so important in the slide of the euro, the euro has weakened most significantly against the dollar. Against other important trade partners, the eurozone has seen its currency weaken less. While the euro has lost 16.2% vis-à-vis the US dollar since 1 January 2021, the trade-weighted exchange rate has only depreciated by 6.9%. The euro's slide has resulted in a lot of imported inflation because we pay for global commodities in dollars. At the same time, gains in competitiveness have been modest. This is far from the best of both worlds. The euro weakening is closely linked to higher energy prices Source: Macrobond, ING Research Competitiveness is improving, but businesses aren't noticing it The competitiveness improvement does require a deeper look, though, as relative inflation between trade partners plays a role. Taking this into account, the real effective exchange rate (REER) for a country is considered to be a key indicator measuring competitiveness. This is an exchange rate which is weighted by local cost developments. In this case, we use unit labour costs. As chart 3 shows, the REER for the eurozone has been sliding, which boosts the competitive position of eurozone companies. This means that despite a limited drop in the nominal effective exchange rate, businesses do seem to be profiting from relatively better price competitiveness. So while the main impact of the weakening euro is definitely negative through higher imported inflation, there is at least some improvement in export competitiveness to be seen, which could cushion the recessionary effects in the domestic market. Competitiveness is improving, but businesses aren't noticing it Source: European Commission, Eurostat, ING Research   The problem is that businesses are far from feeling this though. The Economic Sentiment Indicator has a subindex which reveals how businesses perceive their competitiveness to have changed in their home markets and abroad. This indicates that competitiveness has dropped significantly within the EU and outside. While exports have recovered to the pre-pandemic trend in recent quarters, it looks like the weaker euro has not given an extra push. The question is whether this relates to price competitiveness or whether weakening global demand is causing this. Regardless, it does not look like businesses are profiting from the improved REER at this point, highlighting the fact that the eurozone is currently mainly feeling the burden from the weak euro and is reaping little benefit from it. How has relative competitiveness within the eurozone evolved since the pandemic started? Reflecting on the euro crisis, we noticed a severe deterioration in competitiveness among the ‘periphery’ countries ahead of the crisis. The big question was if the weaker economies could make structural adjustments to become more attractive exporters again and with that, run surpluses. Painful wage adjustments were modestly successful in regaining competitiveness at that point. While competitiveness is not the primary economic problem right now, it is interesting to see if any divergence in competitiveness is emerging again. When looking at the developments in the real effective exchange rate based on unit labour costs against other eurozone economies in recent years, we see interesting differences in performance. Germany, the Netherlands and Belgium have seen their competitiveness deteriorate, while Italy, France and Greece have seen strong improvements. Spanish competitiveness has been stable over recent years, while Portugal has experienced a sizable deterioration. The export powerhouses of the past decade have seen their competitive position slip a little compared to other eurozone countries. This is mainly due to stronger wage growth while productivity growth did not improve in tandem. Overall, this development is a small step towards making the monetary union more coherent and reducing the risk of a new euro crisis triggered by differences in competitiveness. Internal eurozone competitiveness gains are made by France and Italy Source: European Commission, ING Research   A shift in relative competitiveness had already started prior to the pandemic. However, some of the large moves at the start of the pandemic were likely related to how furlough schemes are included in the statistics and so are not necessarily an accurate reflection of underlying competitiveness developments. This seems to be the case for the Netherlands and Greece for example, but in the Dutch case, we still notice a break from the pre-pandemic trend as cost competitiveness ended up at a weaker level in the second quarter. Since energy prices have become a dominant factor and labour cost competitiveness is muddied by government support, a look at a different measure of cost competitiveness is useful. Taking the GDP deflator, a broad price index across the economy, we see that a roughly similar picture emerges. Also here, the Netherlands and Germany have seen cost competitiveness deteriorate compared to other eurozone economies, while Italy and France have seen improvements. Compared to a broader basket of trade partners, the weaker euro dominates but still, we see that Germany and the Netherlands have experienced smaller gains compared to France and Italy. Competitiveness gains have been modest and smallest in the north The euro's depreciation has helped to improve the traditional cost competitiveness of eurozone businesses but in contrast to previous episodes of euro weakness, exports are hardly benefiting. As energy prices are probably a much larger cost concern for eurozone businesses, traditional cost competitiveness indicators have to be taken with a pinch of salt. Still, looking at competitiveness shifts within the eurozone, remarkably, structurally weaker eurozone economies have become relatively more competitive since the start of the pandemic, reducing the risk of a new euro crisis being triggered by stark differences in competitiveness. Read this article on THINK TagsGDP Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
US: Drivers Demand Of Oil The Highest This Year! Silver Lost Almost The Half Of Its Recent Gaines

US: Drivers Demand Of Oil The Highest This Year! Silver Lost Almost The Half Of Its Recent Gaines

Saxo Strategy Team Saxo Strategy Team 18.08.2022 10:50
Summary:  US equities traded a bit lower yesterday after the S&P 500 challenged the 200-day moving average from below the prior day for the first time since April in the steep comeback from the June lows. Sentiment was not buoyed by the FOMC minutes of the July meeting suggesting the Fed would like to slow the pace of tightening at some point. Crude oil rose from a six-month low on bullish news from the US and OPEC.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures rolled over yesterday wiping out the gains from the two previous sessions and the index futures are continuing lower this morning trading around the 4,270 level. US retail sales for July were weak and added to worries of the economic slowdown in real terms in the US. The 10-year yield is slowing crawling back towards the 3% level sitting at 2.87% this morning. A move to 3% and potentially beyond would be negative for equities. The next levels to watch on the downside in S&P 500 futures are 4,249 and then 4,200 Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Shares in the Hong Kong and mainland China markets declined. China internet stocks were weak across the board with Tencent (00700:xhkg) +2.7% and Meituan (03690:xhkg) +1%, being the positive outliers. Tencent reported a revenue decline of 3% y/y in Q2, weak, but in line with market expectations. Non-GAAP operating profit was down 14% y/y to RMB 36.7bn, and EPS fell 17% y/y to RMB 2.90 but beating analyst estimates. Revenues from advertising at -18% y/y were better than expected. In the game segment, weaker mobile game revenues were offset by stronger PC game revenues. Beer makers outperformed China Resources Beer (00291:xhkg) +3.8%, Tsingtao Brewery (00168:xhkg) +1.7%. COSCO Shipping Energy Transportation (01138:xhkg) made a new high at the open on strong crude oil tanker freight rates before giving back some gains. USD pairs as the USD rally intensifies The US dollar rally broadened out yesterday, as USDJPY retook the 135.00 area, but needs to follow through above 135.50-136.00 to take the momentum back higher. Elsewhere, AUDUSD has broken down again on the move down through 0.7000 and USDCAD has posted a bullish reversal, needing 1.3000 for more upside confirmation. The GBPUSD pair looks heavy despite a massive reset higher in UK rates in the wake of recent UK inflation data, with a close below 1.2000 indicating a possible run on the sub-1.1800 lows, while EURUSD is rather stuck tactically, as price has remained bottled up above the 1.0100 range low. USDCNH, as discussed below, may be a key pair for whether the USD rally broadens out even more aggressively, and long US treasury yields and risk sentiment are other factors in the mix that could support the greenback, should the 10-year US treasury benchmark move higher toward 3.00% again or sentiment roll over for whatever reason. Certainly, tightening USD liquidity could prove a concern for sentiment as the Fed turns up the pace of quantitative tightening – something it seems behind schedule in doing if we look at the latest weekly Fed balance sheet data.  USDCNH The exchange rate edged higher again to above 6.80 overnight after a brief spike higher earlier this week as China’s PBOC moved to stimulate with a small 10-basis point rate cut of the key lending rate. There is no real drama in the exchange rate yet after the significant rally this spring from below 6.40 to 6.80+, but traders should keep an eye on this very important exchange rate for larger volatility and significant break above 6.83, as China’s exchange rate policy shifts can provoke significant volatility across markets. Crude oil Crude oil (CLU2 & LCOV2) bounced from a six-month low on Wednesday in response to a bullish US inventory report that saw big declines in gasoline and crude oil stocks as demand from US motorist climbed to the highest this year while crude exports reached a record $5 million barrels per day. The prospect for an Iran nuclear deal continues to weigh while OPEC’s new Secretary-General said spare capacity was becoming scarce. US strategic reserves are now at the lowest level since 1985 and the government has by now sold around 90% of what was initially offered in order to bring down prices. While demand concerns remain a key driver for macroeconomic focused funds selling crude oil as a hedge we notice a renewed surge in refinery margins, especially diesel, supported by increased demand from gas-to-fuel switching Gold and silver Gold has so far managed to find support at $1759, the 38.2% retracement of the July to August bounce, after trading weaker in response to a stronger dollar and rising yields. Silver (XAGUSD) meanwhile has almost retraced half of its recent strong gains with focus now on support at $19.50. The latest driver being the FOMC minutes which signaled ongoing interest-rate hikes and eventually at a slower pace than the current. The short-term direction has been driven by speculators reducing bullish bets following a two-week buying spree in the weeks to August 9 which lifted the net by 63k lots, the strongest pace of buying in six months. ETF holdings meanwhile have slumped to a six-month low, an indication investor, for now, trusts the FOMC’s ability to bring down inflation within a relatively short timeframe   What is going on? Financial conditions are tightening, if modestly. Recent days have brough a rise in short US treasury yields, but more importantly it looks as though some of the risk indicators like corporate credit spreads may have bottomed out here after a sharp retreat from early July highs – one Bloomberg high yield credit spreads to US treasuries peaked out above 5.75% and was as low as 4.08% earlier this week before rising to 4.19% yesterday, with high yield bond ETFs like HYG and JNK suffering a sharp mark-down yesterday of over a percent. Factors that could further aggravate financial conditions include a significant CNH weakening, higher US long treasury yields (10-year yield moving back toward 3.00%, for example) or further USD strength. Adyen sees margin squeeze. One of Europe’s largest payment companies reports first-half revenue of €609mn vs est. €615mn despite processed volume came significantly above estimates at €346bn suggesting the payments industry is experiencing pricing pressures. Cisco outlook surprises. The US manufacturer of networking equipment surprised to the upside on both revenue and earnings in its fiscal Q4 (ending 30 July), but more importantly, the company is guiding revenue growth in the current fiscal quarter of 2-4% vs est. -0.2% and revenue growth for the current fiscal year of 4-6% vs est. 3.3%. Cisco said that supply constraints are beginning to ease and that customer cancellations are running below pre-pandemic levels, and that the company’s growth will be a function of availability. Stale FOMC minutes hint at sustained restrictive policy, but caution on pace of tightening. Fed’s meeting minutes from the July meeting were released last night, and officials agreed to move to restrictive policy, with some noting that restrictive rates will have to be maintained for some time to bring inflation back to the 2% target. Still, there was also talk of slowing the pace of rate hikes ‘at some point’, despite pushing back against easing expectations for next year. The minutes were broadly in-line with the market’s thinking, and lacked fresh impetus needed to bring up the pricing of Fed’s rate hikes. Chairman Powell’s speech at the Jackson Hole Symposium next week will be keenly watched for further inputs. US retail sales were a mixed bag. July US retail sales were a little softer at the headline level than the market expected (0% growth versus the +0.1% consensus) but the ex-auto came in stronger at 0.4% (vs. -0.1% expected). June’s growth was revised down to 0.8% from 1%. The mixed data confirmed that the US consumers are feeling the pinch from higher prices, but have remained resilient so far and that could give the Fed more room to continue with its aggressive rate hikes. Lower pump prices and further improvements in supply chain could further lift up retail spending in August. The iron ore miners are resilient despite price pressures Despite China planning more fiscal stimulus to fund infrastructure investment, the iron ore (SCOA, SCOU2) price paired back 8% this week, retreating to its lowest equal level in five weeks at $101.65, a level the iron ore price was last at in December 2021. Since March, the iron ore price has retreated 37%, with the most recent pull back being fueled by concerns China’s Covid cases are surging again with cases at a three-month high, as the outbreak worsens in the tropical Hainan province. Despite iron ore pulling back, shares in iron ore majors like BHP, remain elevated, up off their lows, with BHP’s shares trading 14% up of its July low, and moving further above its 200-day moving average, on hopes of commodity demand picking up. What are we watching next? Norway’s central bank guidance on further tightening. The Norges Bank is expected to hike 50 basis points today to take the policy rate to 1.75% despite an indication from the bank in June that the bank would prefer to shift back to hiking rates by 25 basis points, as a tight labour market and soaring inflation weigh. The path of tightening for the central bank has been an odd one, as it was the first G10 bank to actually hike rates in 2021, but finds itself with a far lower policy rate than the US, for example, which started much later with a faster pace of hikes. But NOK may react more to the direction in risk sentiment rather than guidance from the Norges Bank from here, assuming no major surprises. The EURNOK downtrend has slowed of late – focusing on 10.00 if the price action continues to back up. Japan’s inflation will surge further. Japan’s nationwide CPI for July is due on Friday. July producer prices came in slightly above expectations at 8.6% y/y (vs. estimates of 8.4% y/y) while the m/m figure was as expected at 0.4%. The continued surge reflects that Japanese businesses are grappling with high input price pressures, and these are likely to get passed on to the consumers, suggesting further increases in CPI remain likely. More government relief measures are likely to be announced, while signs of any Bank of Japan pivot away from its low rates and yield-curve-control policy are lacking. Bloomberg consensus estimates are calling for Japan’s CPI to accelerate to 2.6% y/y from 2.4% previously, with the ex-fresh food number seen at 2.4% y/y vs. 2.2% earlier.   Earnings to watch In Europe this morning, the key earnings focus is Adyen which has already reported (see review above) and Estee Lauder which is deliver a significant slowdown in figures and increased margin pressure due to rising input costs. Today’s US earnings to watch are Applied Materials and NetEase, with the former potentially delivering an upside surprise like Cisco yesterday on improved supply chains. NetEase, one of China’s largest gaming companies, is expected to deliver Q2 revenue growth of 12% y/y as growth continues to slow down for companies in China. Today: Applied Materials, Estee Lauder, NetEase, Adyen, Nibe Industrier, Geberit Friday: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Economic calendar highlights for today (times GMT) 0800 – Norway Deposit Rates 0900 – Eurozone Final Jul. CPI 1100 – Turkey Rate Announcement 1230 – US Weekly Initial Jobless Claims 1230 – Canada Jul. Teranet/National Bank Home Price Index 1230 – US Philadelphia Fed Survey 1400 – US Jul. Existing Home Sales 1430 – EIAs Weekly Natural Gas Storage Change 1720 – US Fed’s George (Voter) to speak 1745 – US Fed’s Kashkari (Non-voter) to speak 2301 – UK Aug. GfK Consumer Confidence 2330 – Japan Jul. National CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 18, 2022
Brent Crude – Bounces back after Saudi warning

Euro To US Dollar Is Like A Cup Of Coffee! EUR/USD - Technical Analysis | 18/08/22

InstaForex Analysis InstaForex Analysis 18.08.2022 11:46
Relevance up to 10:00 2022-08-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The EUR/USD pair awaits the Eurozone CPI data that might trigger a bigger move. The bulls are still under the pressure as the recent bounce from the oversold market conditions was very shallow and hit only the level of 1.0203. The nearest technical resistance is located at the level of 1.0256. The last biggest bounce had been capped at the supply zone seen between the levels of 1.0470 - 1.0490, since then all the bounces are shallower and used by market participants to short the EUR. Please notice the weak and negative momentum on the H4 time frame chart supports the short-term bearish outlook for EUR with a potential target seen at the level of 1.0097 and below.     Weekly Pivot Points: WR3 - 1.0308 WR2 - 1.0280 WR1 - 1.0263 Weekly Pivot - 1.0252 WS1 - 1.0234 WS2 - 1.0222 WS3 - 1.0194 Trading Outlook: The monetary parity level as the first target for bears in the long term had been hit and the Euro is still being under the bearish pressure. There is no sign of relief for the EUR as the down trend should continue lower after the 61% Fibonacci retracement still has not been violated. The up trend can be continued towards the next long-term target located at the level of 1.1186 only if the complex corrective structure will terminate soon (above 1.0000) and the level of 1.0726 is clearly violated.   Read more: https://www.instaforex.eu/forex_analysis/289040
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

British Pound (GBP) To US Dollar (USD) - Is FX Cable Dominated By Bears? 1 GBP To USD - Technical Analysis | 18/08/22

InstaForex Analysis InstaForex Analysis 18.08.2022 11:53
Relevance up to 10:00 2022-08-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The GBP/USD pair is still under the bearish pressure and recently fell to two week's low at the level of 1.1994 (at the time of writing the analysis). Any sustained violation of the level of 1.2003 will likely result in another down wave towards the level of 1.1933 and below. The momentum is weak and negative already at the H4 time frame chart, so the bearish dominance is obvious. Please keep an eye on the trend line breakout/bounce (thick orange line on the chart) as the price action around the line will give us more clues regarding the down move strength. The larger time frame trend (daily and weekly) remains down until further notice.     Weekly Pivot Points: WR3 - 1.2206 WR2 - 1.2156 WR1 - 1.2141 Weekly Pivot - 1.2123 WS1 - 1.2099 WS2 - 1.2082 WS3 - 1.2040 Trading Outlook: The Cable is way below 100 and 200 DMA , so the bearish domination is clear and there is no indication of down trend termination or reversal. The bulls are now trying to start the corrective cycle after a big Bullish Engulfing candlestick pattern was made on the weekly time frame chart, however there is no visible progress here yet. The next long term target for bears is seen at the level of 1.1410. Please remember: trend is your friend.   Read more: https://www.instaforex.eu/forex_analysis/289042
The EUR/USD Price May Fall Under 1.0660

Forex: Shocking Moves And Surprising Performance!? EUR/USD - What Can We Expect From Euro To US Dollar (18/08/22)

InstaForex Analysis InstaForex Analysis 18.08.2022 12:18
Relevance up to 08:00 2022-08-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1) On Thursday, from the level of 1.0179 (closing of yesterday's daily candle), EUR/USD will attempt to continue moving down in order to test the support line of 1.0136 (thick blue line). Then, it will go to the 38.2% retracement level at 1.0203 (red dotted line), before going up to the 50.0% retracement level at 1.0282 (red dotted line).     Fig. 1 (daily chart) Comprehensive analysis: Indicator analysis - downtrend Fibonacci levels - downtrend Volumes - downtrend Candlestick analysis - downtrend Trend analysis - downtrend Bollinger bands - downtrend Weekly chart - uptrend Conclusion: EUR/USD will continue moving down from 1.0179 (closing of yesterday's daily candle) in order to test the support line of 1.0136 (thick blue line). Upon reaching it, the quote will bounce to the 38.2% retracement level at 1.0203 (red dotted line), then go up to the 50.0% retracement level at 1.0282 (red dotted line). Alternatively, the pair could fall from 1.0179 (closing of yesterday's daily candle) and test the 61.8% retracement level at 1.0107 dashed blue line. Then, it will climb to the 38.2% retracement level at 1.0203 (red dotted line) and higher price levels.   Read more: https://www.instaforex.eu/forex_analysis/319251
Reserve Bank of New Zealand: Kenny Fisher says he expects a 25bp rate hike on May 24th

Forex: New Zealand Dollar To US Dollar - Technical Analysis - 18/08/22

InstaForex Analysis InstaForex Analysis 18.08.2022 12:42
Relevance up to 08:00 2022-08-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. NZD/USD: The chart shows the movement of NZD/USD in the four-hour (H4) chart. Comparing the recent movement to that of the previous ones, it is clear that there was a correction towards the key support level of 0.6262. The trend will remain bullish and the quote will continue to go towards 0.6435 as long as 0.6245 remains a support level. Its breakdown will change the current trend. Good luck! Read more: https://www.instaforex.eu/forex_analysis/319257
USD (US Dollar) Is King!? DXY (Dollar Index) May Reach July's Levels

USD (US Dollar) Is King!? DXY (Dollar Index) May Reach July's Levels

Alex Kuptsikevich Alex Kuptsikevich 18.08.2022 12:30
The US dollar slowly added for the third trading session, returning to levels of three weeks ago. While the published FOMC meeting minutes did not cause a sharp reaction, the FX dynamics of the past week are more indicative of the end of a corrective pullback. And we would not be surprised if the Dollar's growth will shift to the next gear in the coming days. The market's primary focus has been whether there will be a 75-point rate hike next. These expectations have changed little since the futures market, as has been the case for the last week or so, is laying down a roughly 40% chance of a third consecutive such move. However, the central bank officials are concerned that the inflation threat could quickly return if policy tightening does not suppress expectations. So, the FOMC is in the mood to press the monetary brake pedal more firmly than the market expects. This is now roughly the same signal Powell sent in autumn 2018, resulting in a violent sell-off in the equity market. It seems that markets are setting expectations for a lower final rate hike than the Fed. The FOMC has been using more and more channels lately to explain its view, from comments from committee members and minutes to explanatory articles in the WSJ. It is well visible that the currency market has been taking note of these signals for at least a week now, although investors continued to push stocks up until yesterday. The currency market often goes half a step ahead of stocks, so we see the reversal of the Dollar Index to growth over the last ten days as the end of a corrective decline and the start of a new wave of dollar strength. Apart from the Fed, there are also several fundamental factors on the Dollar's side right now, from slowing retail sales and a collapse in the housing market to strong demand for LNG, which the US exports to Europe. These factors are reducing pressure on the Dollar through the trade balance. At the same time, money markets are paying increasing attention to rising bond yields in the US. While the two-year US bonds most sensitive to Fed policy are trading at with 3.2% yield, compared to similar Chinese bonds at just 2.07% and German as low as 0.75%. This disposition attracts buyers to dollar securities, which further support its exchange rate. The Dollar Index has managed to quickly return above its 50-day moving average, maintaining it as support for over a year. If we are right, the Dollar could soon reach a retest of the July highs, when the DXY was above 109, and the EURUSD was down to 1.0. And with a new retest, we should expect dollar buyers to be able to push it to renew multi-year highs unless the macroeconomic situation changes drastically.
Australian Employment Plunged! USD May Be Facing Huge Fluctuations! Fed Sends Signals Of Less Rapid Monetary Policy Tightening

Australian Employment Plunged! USD May Be Facing Huge Fluctuations! Fed Sends Signals Of Less Rapid Monetary Policy Tightening

Craig Erlam Craig Erlam 18.08.2022 13:57
The European session is off to a mixed start after both the US and Asia posted small losses overnight. The Fed minutes on Wednesday didn’t really offer anything we didn’t already know. Even those that leapt at the opportunity to buy the supposed “dovish pivot” are aware that this isn’t quite the case and the minutes really back that up. Not that they needed to as the Fed commentary that has followed has made that perfectly clear. The central bank did stress the need to slow the pace of rate increases as monetary policy tightened further which most expected would be the case anyway. Of course, that is ultimately dependent on the inflation data allowing for such a move and the July reading was certainly the first step towards that. It also referenced the risk of monetary policy being tightened more than necessary to restore price stability which could be read a couple of different ways. While it doesn’t suggest it will over-tighten intentionally, the Fed is clearly determined to get inflation back to target and ensure the public believes it will. The statement could therefore suggest it will act in a more aggressive manner than markets expect in order to deliver on that. Alternatively, it could indicate that the central bank is aware of the risks and may therefore ease off the break as soon as the opportunity arises in order to avoid tightening too much. ​ It also raises the possibility of a swift u-turn from hiking rates to cutting them as markets have indicated recently and policymakers have pushed back against. Needless to say, there are many more twists and turns to come. A cause for concern or merely a blip? The Australian jobs data looked pretty shocking on the face of it. Not only did employment fall by 40,900 – against an expectation of a 26,500 gain – but the drop in full-time employment was considerably worse at 86,900 which was then partially offset by a rise in part-time workers. All told, it looks pretty grim but as is so often the case, there’s a caveat. This data was not in keeping with the trend that we’ve seen in the labour market data in recent months and there are numerous possible explanations for why the dip has happened. With the labour market still very tight and unemployment at a record low – helped there last month by a drop in participation – this report will probably be viewed as an anomaly albeit one that will draw more attention to the data in the coming months. Ultimately, it’s unlikely to deter the RBA from raising rates at the next meeting, with markets currently favouring a 25 basis point hike. Steady post-Fed minutes Bitcoin is relatively flat on the day after losing more ground on Wednesday. It’s now suffered four consecutive days of losses and has fallen around 7% from its peak at the start of the week. By its standards, that’s not really anything to write home about and the trend of the last couple of months still looks positive. The difficulty is that the rally that brought it back to $25,000 has lost considerable momentum and that could begin to weigh more heavily on the price. A move below $22,500 may suggest the rally has run its course for now. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Steady after Fed Minutes - MarketPulseMarketPulse
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

Don't Give Up Aussie! AUD Lost Over 1% On Tuesday. Australian Dollar Was Affected By Situation In China - COVID And Monetary Policy

Craig Erlam Craig Erlam 18.08.2022 14:18
The Australian dollar edged lower following today’s Australian employment report but has reversed directions. In the European session, AUD/USD is trading at 0.6957, up 0.28%. Australian employment report disappoints Australia released the July employment report, and the numbers were surprisingly soft. The economy lost 40.9 thousand jobs, well below the estimate of 25.0 thousand. This follows a strong gain of 88.4 thousand in May. Making the report sting even more, full-time positions fell by 86.9 thousand. The silver lining was a drop in the unemployment rate to 3.4%, down from 3.5%. However, that was likely due to the participation rate falling to 66.4%, down from 66.8%. The Australian dollar lost ground following the job report release but has reversed directions. The Aussie tumbled 1.23% on Tuesday, as ominous developments in China are weighing on the currency. The latest news was the Chinese central bank lowering its 1-year MLF loans to 2.75%, down from 2.85%. The spike in Covid cases and the worsening property crisis have resulted in a decline in credit growth, and the PBOC has loosened policy in an effort to boost credit demand. The Aussie is sensitive to developments in China, which is Australia’s number one trading partner. The RBA meets next on September 6th and another rate hike is likely, even with the weak job report. The markets have priced in a 25 basis point hike, which would bring the cash rate to 2.10%. The RBA minutes, published on Tuesday, indicated that further rate hikes were coming, but reiterated that the Bank would be guided by economic data and the inflation forecast. . AUD/USD Technical There is resistance at 0.7053, followed by a monthly resistance line at 0.7122 AUD/USD has support at 0.6968 and 0.6902 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie bounces back after soft jobs report - MarketPulseMarketPulse
The NZD/USD Pair Will Have The Potential To Rally Upwards

Forex: New Zealand Dollar Against US Dollar - What To Watch? - 18/08/22

InstaForex Analysis InstaForex Analysis 18.08.2022 15:35
Relevance up to 12:00 2022-08-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. NZD/USD Minor Growth The NZD/USD pair increased in the short term and now has almost reached the downtrend line which represents an upside obstacle. After its strong drop, a minor rebound was natural. It could come back to test and retest the downtrend line before resuming its drop. It was traded at 0.6289 at the time of writing, far above today's low of 0.6248. Technically, today's low represents a downside obstacle. NZD/USD Trading Conclusion Staying below the downtrend line and dropping under the low of 0.6248 may announce more declines. This scenario could bring new selling opportunities.     Read more: https://www.instaforex.eu/forex_analysis/289069
The USD/CHF Pair Is All Set To Revisit The Monthly Low

US Dollar (USD) To Swiss Franc (CHF) - Can We Expect Further Increase? - 18/08/22

InstaForex Analysis InstaForex Analysis 18.08.2022 15:43
Relevance up to 12:00 2022-08-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   USD/CHF Challenges The Former High The USD/CHF pair was traded at 0.9533 at the time of writing and it seems determined to resume its growth as long as it stays above the uptrend line. Failing to reach and retest the uptrend line, which represents a downside obstacle, signaled strong buyers. The 0.9502 level represents a downside obstacle as well. As you can see on the H1 chart, the rate reached the 0.9540 former high which represents an upside obstacle. USD/CHF Trading Conclusion Jumping and stabilizing above 0.9540 may signal further growth ahead and could help buyers catch a larger upwards movement. Only dropping below the uptrend line and under the 0.9502 former low may announce a new downside movement and could invalidate the upside scenario. Read more: https://www.instaforex.eu/forex_analysis/289071
West Texas Intermediate (WTI) Price Analysis: The Oil Price Has Corrected And Dropped

Crude Oil Price Probably Not Reach 100$(USD) Shortly

Swissquote Bank Swissquote Bank 18.08.2022 15:56
The equity rally in the US didn’t pick up momentum after the Federal Reserve (Fed) released its latest meeting minutes, which sounded more hawkish-than-expected, or more hawkish-than-what-was-needed-to-give-another-boost to the US stock markets. The biggest take was that the Fed will continue tightening its policy until it sees that inflation is ‘firmly on path back to 2%’. The S&P500 fell 0.72% as Nasdaq gave back 1.20%, although the jump in the US 2-year yield was relatively soft, and the Fed funds futures scaled back the expectation of a 75 bp hike in the next meeting. Crude price completed an ABCD pattern, and it is more likely than not we see the price rebound to the $100 level in the medium run. In China, Tencent announced its first ever revenue drop as government crackdown continued taking a toll on its sales, and the pound couldn’t gain even after the above 10% inflation data boosted the Bank of England (BoE) hawks and the call fall steeper rate hikes to tame inflation in the UK. Watch the full episode to find out more! 0:00 Intro 0:28 As expected, Fed minutes were more hawkish-than-expected 3:39 Crude oil has more chance to rebound than to fall 6:02 Tencent posts first-ever revenue drop 7:14 Apple extends gains, but technicals warn of correction 8:38 Pound unable to extend gains despite rising Fed hawks’ voices Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #FOMC #minutes #USD #GBP #inflation #Tencent #Alibaba #earnings #crude #oil #natural #gas #coal #futures #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

Forex: GBP/USD (British Pound To US Dollar) - Friday May Be A Turbulent Day For This Pair!

Kenny Fisher Kenny Fisher 18.08.2022 20:24
The British pound continues to lose ground and has fallen below the 1.20 line for the first time since July 26th. GBP/USD is trading at 1.1996 in the North American session, down 0.47%. Pound eyes UK retail sales It has been a busy economic calendar in the UK this week. Retail sales will wrap things up on Friday, with the markets bracing for more bad news from the consumer spending front. Retail Sales fell 5.8% YoY in June, and the forecast for July stands at -3.3%. A continuing decline in consumer spending shouldn’t be a surprise, given the grim economic picture. Headline inflation rose to 10.1% YoY in July, up from 9.4% in June and above the forecast of 9.8%. The BoE has been raising interest rates in an effort to curb inflation, but don’t hold your breath. The central bank has warned that it doesn’t expect inflation to peak before it hits a staggering 13% in October. As well, real wages fell 3% in Q2, making it even harder for workers to keep up with the cost-of-living crisis, and the energy price cap will increase substantially in October. The British consumer is trying to ease the pain by cutting back on spending, but this will hurt the economy and could cause the economy to tip into a recession even faster. The FOMC minutes on Wednesday didn’t contain anything unexpected. The minutes reiterated that monetary tightening would continue until inflation eased significantly. Meeting participants noted that the pace of rate hikes would ease once inflation cooled down. They also said that inflation is not showing signs of peaking. The markets do not appear to have absorbed this hawkish message, with the surprise drop in US inflation resulting in the markets expecting a U-turn in Fed policy. This has led to gains in the equity markets and a downward trend for the US dollar. . GBP/USD Technical  GBP/USD is testing support at 1.2030. Below, there is support at 1.1925 There is resistance at 1.2153 and 1.2258 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. British dips below 1.20, retail sales next - MarketPulseMarketPulse
Norges Bank Takes Bold Steps: Signals Strong Tightening to Strengthen Weaker Krone

Is Cashing Out Worth It? Should You Take Risk Or Not?

Saxo Bank Saxo Bank 19.08.2022 09:51
Summary:  The simplest way to reduce your market risk is by being less invested in the market. Going all out, this means that you sell all your holdings for cash. But there are important nuances that you need to be aware of if you consider 'going cash'. Exposure possibilities When you buy stocks, bonds or any other financial instrument, you have exposed yourself to market risk. You have probably done this with the goal of being rewarded for this exposure in the form of a return. Below you see a visual representation of different types of exposure you can have to the market. If you are fully invested (all your capital is on the table), you have created maximum exposure. High rewards are possible but there is also significant risk. In the middle of the graph you will see a blue mark, where your portfolio only consists of cash. Here you have no market risk but needless to say, you won’t have any chance to make money in the markets either. You can read more about the third position, short, here     Reasons to go cash Over time, markets tend to go up. But there might be times where you feel uncomfortable with how the markets are moving. You might for example feel that the valuations are too high given the economic outlook. This could be a reason to reduce your exposure by selling all or parts of your portfolio. Another reason to go cash is flexibility. Having cash at hand means that you can act on opportunities that arise along the way. Thirdly, a cash position will enable you to absorb rising margin requirements if you invest in more complex products such as options. Lastly, a decent cash position will increase your level of comfort and confidence generally speaking. Put another way: the stronger you believe markets will go up, the more you tend to be invested. Following that line of thinking you should decrease your exposure if your conviction declines.  How to go cash If you are at a point in time where you think going cash will be the right thing for you to do for a while, let’s look at how you actually do it. The easiest answer is that you can close all your positions, i.e., sell all your financial instruments. That is the most radical solution that would leave you with a cash only position. But there are other means to reach that result. One way to remove your market risk could be to use the account value shield protection mechanism. Using this you will close all your positions if the value of your account reaches a certain (lower) level. For instance, if you have a portfolio currently worth EUR 44.307 and you want the trigger to sell everything to be EUR 42.500. This means that if your portfolio falls to EUR 42.500 the system will automatically close out and sell your positions. If you have a lower threshold you want to protect your portfolio from falling, this leaves room for a further rise of the markets, which you wouldn’t get if you sold everything. See it as a kind of stop loss under your whole portfolio. Cut your position in half. This approach leans on the saying: “If you are not sure, halve your positions”. This results in a few things. Firstly, you reduced your exposure to 50%. So, if the markets go down, your loss will also be half. Secondly, if the market goes up, you can still generate a return. Whether you reduce your current positions with 50% or 90% (or 15%), totally depends on your conviction, or worries, about the current market. Apply tight (trailing) stops to your positions. This leaves the upside intact, but it will protect you from a sharp fall in the markets. A stop loss sell order will be triggered if a lower price level is reached. In case of a trailing stop, the stop level will increase if the market goes up. As you can see, there are several ways to reduce your market risk – going all cash isn’t the only opportunity. The method you choose depends entirely on your view of the markets. If you are completely convinced that everything will fall, you might opt to sell everything. But if you are not so sure that we are on the edge of very strong market decline, other approaches might suit you better. Cash in your account One way or the other, the amount of cash has increased on your account. And that leaves the question of what to do with it. Of course, you can just leave it there. Then you will have no market exposure and you can start investing again once you are convinced that 'the only way is up'. But be aware that inflation is eating away the purchasing power of your cash! Another possibility is to invest your cash in a money market fund that gives (some) return on your investment, although these can also face negative returns depending on the financial outlook and the currency it is denoted in. Wrap up Going cash is one of the easiest ways to reduce your market risk. And although that simple, this method of reducing market risk is often overlooked. There are several ways to reduce market risk which don’t necessarily involve going all cash. Still, the most radical solution is to sell everything now. But other options exist depending on your viewpoint of the current market environment. Once you have a (maybe even 100%) cash position, it is clever to weigh the possibilities that exist to put that cash position to work in the lowest risk environment possible via e.g., a money market fund.   Source: Cashing out - the ultimate risk-off move?
Rates Surge: US Service Sector Strengthens Yields

Sterling (GBP) And Euro (EUR) Can Barely Stand On Their Feet. Strong Dollar (USD)

Kim Cramer Larsson Kim Cramer Larsson 19.08.2022 09:12
EURUSD was rejected at key resistance at around 1.0360 and the falling upper trendline and is now close to test key support at around 1.01. If EURUSD closes below the support, parity is likely to be tested shortly after.RSI is still showing negative sentiment after failing to break above 60 threshold supporting the bearish picture. If RSI closes below 40 threshold combined with a EURUSD close below 1.01 down trend is confirmed., At the time of writing Bollinger bands are expanding indicating the initial stage of a (down)trend. IF EURUSD closes outside of the lower Bollinger band it is further a strong indication of a down trend.   Source: Saxo Group GBPUSD has formed a Double Top like pattern on the very short term. If GBPUSD closes below 1.20 it is confirmed and GBPUSD is likely to test July lows at around 1.1760 . If GBPUSD is to move the same distance as the difference between the peak and low of the Double Top formation after breaking 1.20 it could reach 1.1729 illustrated by the two vertical arrows. However, there could be more downside in store for GBPUSD. If it takes out 1.1760 there is not support before around 1.14. See weekly chart Source: Saxo Group     Source: Saxo Group Source: Technical Update - EURUSD and GBPUSD testing key supports. Will they hold or will EURUSD test parity again and GBPUSD drop to 1.14?
The Markets Still Hope That The Fed May Consider Softer Decision

ECB May Have To Struggle A Lot To Boost EUR/USD! Can We Expect A Plunge Of GBP/USD!?

ING Economics ING Economics 19.08.2022 10:03
The economic calendar does not offer much today. EUR/USD is stretching to the lowest levels since mid-July, not far from parity, which will not please the European Central Bank. The sell-off in Central and Eastern Europe continues. We think the Polish zloty is the next victim, which will not be helped by domestic data It seems that the ECB has a problem with the weaker euro – judging by an interview with Isabel Schnabel yesterday USD: Nudging higher The dollar continues to retrace the mid-July to mid-August sell-off. It is hard to pin down the exact reason for dollar strength – after all, US yields have softened a little over recent sessions. However, the move suits our generally positive stance on the dollar at a time when European and Asian growth prospects remain challenged. There is very little on the US data calendar today (the Fed’s Tom Barkin speaks at 1500CET). Barring some very poor pieces of US data (next week’s data calendar looks second-tier) or some surprising recovery stories overseas, we would expect the dollar to consolidate near the recent highs. DXY broke the 107.50 level, however getting to 108.00 should be significantly more difficult. Chris Turner EUR: Focus on the eurozone current account data It does not normally receive a lot of attention and probably will not move markets today, but the release of eurozone current account data for June should be a reminder of the eurozone’s dwindling external surplus. The June monthly data might actually pick up from May’s EUR4.5bn deficit – largely on the back of Germany’s better trade surplus – but the 12-month trend to lower surpluses should be clear. And this is a big reason why the trade-weighted euro has fallen around 4% this year. It also seems that the European Central Bank does have a problem with the weaker euro – judging by Isabel Schnabel’s interview with Reuters yesterday. But to drive EUR/USD higher – the most relevant euro pair in an energy crisis – the ECB is going to have to turn a lot more hawkish. That is a tough job with a recession around the corner.  Expect EUR/USD to stay offered in a 1.0100-1.0200 range on a quiet Friday. Chris Turner GBP: Retail challenges Consumer confidence in the UK has fallen to a record low as concerns about a recession increase and inflation squeezes household finances. At least July retail sales brought a glimmer of hope. But it is still not helping to change the cost-of-living crisis narrative. It looks unlikely to dent expectations that the Bank of England will be hiking 50bp on 15 September. Actually, the market now prices a 56bp hike on that date. It is fair to say sterling remains fragile. However, it looks more vulnerable versus the dollar, where GBP/USD can trade down to the 1.1935/50 area. Chris Turner CEE: Polish data won't improve the zloty's mood The regional calendar today offers only Polish data: industrial production, labour market data and industrial producer prices. After the negative surprise of this week's GDP data, we will see other pieces of the puzzle for July. However, good news is unlikely to come. Industrial production is expected to fall further in month-on-month terms, and we expect wage growth to be lower than market expectations. PPI should be lower than market expectations as well but still above a strong 20% year-on-year in our view. On the FX front, CEE currencies keep tracking EUR/USD and yesterday's move again does not signal good news for the end of the week. Our view hasn't changed much in the last few days. The Polish zloty finally broke above 4.720 EUR/PLN and we think it has room for further losses towards the 4.735-4.740 range if EUR/USD does not erase its losses. Added to this is the further rise in gas prices, which is not helping the Hungarian forint either. However, unlike the Polish zloty, it has more favourable market conditions in our view, including fresh support from rising rates. According to our estimates, the forint should be around EUR/HUF 400. However, negative sentiment is likely to weigh on the forint for at least a few more days. In line with our expectations, the Czech koruna has returned to the Czech National Bank intervention band of 24.60-24.70 EUR/CZK. We see little reason for the koruna to break out of this range in the coming days and we can expect some central bank activity on the market after almost two weeks of silence. Frantisek Taborsky Read this article on THINK TagsZloty Poland zloty FX Daily Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
German Business Confidence Dips, ECB's Lagarde Hosts Central Banking Conference in Portugal, EUR/USD Drifts Higher

Fed's Plan Is To Push For More Rate Hikes To Boost Dollar (USD)!?

Saxo Strategy Team Saxo Strategy Team 19.08.2022 10:37
Summary:  Better than expected economic data continued to support sentiment in US in contrast to Europe, where ECB’s Schnabel's warning on the growth/inflation picture aggravated concerns. Fed speakers meanwhile continued to push for more rate hikes this year, aiding dollar strength despite lack of a clear direction in long end yields. EUR and GBP broke below key support levels, but oil prices climbed higher amid improving demand outlook but sustained supply issues. Focus now on Jackson Hole next week. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  In its second lightest volume session of the year, U.S. equities edged modestly higher, S&P 500 +0.23%, Nasdaq 100 +0.26%. As WTI crude climbed 2.7%, rebounding back above $90, the energy space was a top gainer aside from technology. Exxon Mobil (XOM:xnys) gained 2.4%.  Cisco (CSCO:xnas) surged 5.8% after reporting better-than-expected revenues. Nvidia (NVDA:xnas), +2.4% was another top contributor to the gain of the S&P 500 on Wednesday.  95% of S&P 500 companies have reported Q2 results, with about three-quarters of them managing to beat analyst estimates. On Friday there is a large number of options set to expire.  The U.S. treasury yield curve bull steepened on goldilocks hope The U.S. 2-10-year curve steepened 7bps to -32bps, driven by a 9bp decline in the 2-year yield.  In spite of hawkish Fed official comments and the August Philadelphia Fed Index bouncing back to positive territory, the market took note of the falls in the prices paid diffusion index and the prices received index from the survey and sent the short-end yields lower.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Both Hang Seng Index and CSI300 declined about 0.8%.  Tencent (00700:xhkg) rose 3.1% after reporting results that beat estimates as a result of better cost control and adverting revenues. Other China internet stocks traded lower, Bilibili (09626:xhkg) -4.2%, Baidu (09888:xhkg) -4.5%, Alibaba (09988:xhkg) -2.1%, JD.COM (09618:xhkg) -2.5%. The surge of Covid cases in China to a three-month high and the Hainan outbreak unabated after a 2-week lockdown, pressured consumer stocks.  Great Wall Motor (02333:xhkg) led the charge lower in autos, plunging near 6%.  Other automakers fell 2% to 4%.  Geely (00175:xhkg) fell 3.1% after reporting 1H earnings missing estimates.  A share Chinese liquor names declined, Kweichow Moutai (600519:xssc) -1.2%, Wuliangye Yibin (000858:xsec) -1.6%. Chinese brewers were outliner gainers in the consumer space, China Resources Beer (00291:xhkg) +4.8%, Tsingtao Brewery (00168:xhkg) +1.9%. Chinese property developers traded lower with Country Garden (02007:xhkg) losing the most, -5.2% , after warning that 1H earnings may have been down as much as 70%. The China Banking and Insurance Regulatory Commission (CBIRC) is looking at the quality of real estate loan portfolios at some financial institutions.  EURUSD and GBPUSD break through key support levels Dollar strength prevailed into the end of the week with upbeat US economic data and a continued hawkish Fedspeak which continued to suggest more Fed rate hikes remain in the pipeline compared to what the market is currently pricing in. EUR and GBP were the biggest loser, with both of them breaking below key support levels. EURUSD slid below 1.0100 handle while GBPUSD broke below 1.2000 despite a selling in EGBs and Gilts. USDJPY also broke above 136 in early Asian trading hours despite lack of a clear direction in US 10-year yields and a slide in 2-year yields. AUDUSD testing a break below 0.6900 as NZDUSD drops below 0.6240. Crude oil prices (CLU2 & LCOV2) Oil prices reversed their drop with WTI futures back above $90/barrel and Brent futures above $96. Upbeat US economic data has supported the demand side sentiment in recent days. Moreover, President Xi’s comment that China will continue to open up the domestic economy also aided the demand equation. Supply concerns, meanwhile, were aggravated by geopolitical tension around a potential incident at the Zaporizhzhia nuclear plant in Ukraine. Meanwhile, Shell hinted at reducing the capacity of Rhineland oil refinery due to the lower water level on the Rhine river and said the situation regarding supply is challenging but carefully managed. Gold (XAUUSD) still facing mixed signals The fate of gold has been turned lower again this week with the yellow metal facing decline of 2.5% so far in the week and breaking below the $1759 support, the 38.2% retracement of the July to August bounce. Stronger dollar, along with Fed’s continued hawkish rhetoric, weighed. Silver (XAGUSD) is also below the key support at $19.50, retracing half of its recent gains. The short-term direction has been driven by speculators reducing bullish bets, but with inflation remaining higher-for-longer, the precious metals can continue to see upside in the long run. What to consider? Existing home sales flags another red for the US housing market US existing home sales fell in July for a sixth straight month to 4.81 mn from 5.11 mn, now at the slowest pace since May 2020, and beneath the expected 4.89 mn. Inventory levels again continued to be a big concern, with supply rising to 3.3 months equivalent from 2.9 in June. This continues to suggest that the weakening demand momentum and high inventory levels may weigh on construction activity. US economic data continues to be upbeat The Philly Fed survey outperformed expectations, with the headline index rising to +6.2 (exp. -5.0, prev. -12.3), while prices paid fell to 43.6 (prev. 52.2) and prices received dropped to 23.3 (prev. 30.3). new orders were still negative at -5.1, but considerably better than last month’s -24.8 and employment came in at 24.1 from 19.4 previously. While this may be a good signal, survey data tends to be volatile and a long-term trend is key to make any reasonable conclusions. Jobless claims also slid to 250k still suggesting that the labor market remains tight. Fed speakers push for more rate hikes St. Louis Federal Reserve President James Bullard flagged another 75 basis point rate hike at the September meeting and hinted at 3.75-4% Fed funds rate by the end of the year with more front-loading in 2022. Fed’s George, much like Fed’s Daly, said that last month’s inflation is not a victory and hardly comforting. Bullard and George vote in 2022. Fed’s Kahskari said that he is not sure if the Fed can avoid a recession and that there is more work to be done to bring inflation down, but noted economic fundamentals are strong. Overall, all messages remain old and eyes remain on Fed Chair Powell speaking at the Jackson Hole conference on August 25. Japan’s inflation came in as-expected Japan’s nationwide CPI for July accelerated to 2.6% y/y, as expected, from 2.4% y/y in June. The core measure was up 2.4% y/y from 2.2% previously, staying above the Bank of Japan’s 2% target and coming in at the strongest levels since 2008. Upside pressures remain as Japan continues to face a deeper energy crisis threat into the winter with LNG supplies possibly getting diverted to Europe for better prices. Still, Bank of Japan may continue to hold its dovish yield curve control policy unless wage inflation surprises consistently to the upside. Cisco’s revenues came in flat, beating a previously feared decline Cisco Systems reports July 2022 quarter revenues of USD13.1 billion, down 0.2% YoY but better than the consensus of a 3% decline.  Net income came in at USD3.4 billion, -3.2% YoY but more than 1 percentage point above consensus.  The fall in product order was also smaller than feared.  The company guided the fiscal year 2023 revenue growth of +4% to +6%, ahead of the 3% expected and FY23 EPS of USD3.49 to USD3.56, in line with expectations as gross margin pressures are expected to offset the impact of higher sales.  NetEase’s Q2 results beat NetEase (09999:xhkg/NTES:xnas) reported above-consensus Q2 revenues, +13% YoY, and net profit from continuing operations, +28%.  PC online game revenues were above expectations, driven by Naraka Bladepoint content updates and the launch of Xbox version.  Mobile game segment performance was in line.  Geely Automobile 1H earnings missed estimates on higher costs Chinese automaker Geely reported higher-than-expected revenue growth of 29%YoY in 1H22 but a 35% YoY decline in net profit which was worse than analyst estimates.  The weakness in profit was mainly a result of a 2.6 percentage point compression of gross margin to 14.6% due to higher material costs and production disruption, higher research and development costs, and the initial ramping-up of production of the Zeekr model.  The company maintains its sales volume target of 1.65 million units, an growth of 24% YoY, for the full year of 2022.    For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 19, 2022
Ukraine Saves The Day For The World As The Corridor Shipping Crops Is Opened. Other Countries Harvest Is Quite Low Therefore To Weather Issues

Ukraine Saves The Day For The World As The Corridor Shipping Crops Is Opened. Other Countries Harvest Is Quite Low Therefore To Weather Issues

Saxo Strategy Team Saxo Strategy Team 19.08.2022 11:33
Summary:  Equity markets managed a quiet session yesterday, a day when the focus is elsewhere, especially on the surging US dollar as EURUSD is on its way to threatening parity once again, GBPUSD plunged well below 1.2000 and the Chinese renminbi is perched at its weakest levels against the US dollar for the cycle. Also in play are the range highs in longer US treasury yields, with any significant pull to the upside in yields likely to spell the end to the recent extended bout of market complacency.   What is our trading focus?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures bounced back a bit yesterday potentially impacted by the July US retail sales showing that the consumer is holding up in nominal terms. The key market to watch for equity investors is the US Treasury market as the US 10-year yield seems to be on a trajectory to hit 3%. In this case we would expect a drop in S&P 500 futures to test the 4,200 level and if we get pushed higher in VIX above the 20 level then US equities could accelerate to the downside. Fed’s Bullard comments that he is leaning towards a 75 basis point rate hike at the September meeting should also negatively equities here relative to the expectations. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hang Seng Index edged up by 0.4% and CSI300 was little changed. As WTI Crude bounced back above $90/brl, energy stocks outperformed, rising 2-4%. Technology names in Hong Kong gained with Hang Seng Tech Index (HSTECH.I) up 0.6%. Investors are expecting Chinese banks to cut loan prime rates on Monday, following the central bank’s rate cut earlier this week. The China Banking and Insurance Regulatory Commission (CBIRC) is looking at the quality of real estate loan portfolios and reviewing lending practices at some Chinese banks. The shares of NetEase (09999:xhkg/NTES:xnas) dropped more than 3% despite reporting above-consensus Q2 revenue up 13% y/y, and net profit from continuing operations up 28%.  PC online game revenue was above expectations, driven by Naraka Bladepoint content updates and the launch of Xbox version. Mobile game segment performance was in line. USD pairs as the USD rally intensifies The US dollar rally is finding its legs after follow up action yesterday that took EURUSD below the key range low of 1.0100, setting up a run at the psychologically pivotal parity, while GBPUSD slipped well south of the key 1.2000 and USDJPY ripped up through 135.50 resistance. An accelerator of that move may be applied if US long treasury yields pull come further unmoored from the recent range and pull toward 3.00%+. A complete sweep of USD strength would arrive with a significant USDCNH move as discussed below, and the US dollar “wrecking ball” will likely become a key focus and driver of risk sentiment as it is the premiere measure of global liquidity. The next key event risk for the US dollar arrives with next Friday’s Jackson Hole symposium speech from Fed Chair Powell. USDCNH The exchange rate is trading at the highs of the cycle this morning, and all traders should keep an eye out here for whether China allows a significant move in the exchange rate toward 7.00, and particularly whether CNH weakness more than mirrors USD strength (in other words, if CNH is trading lower versus a basket of currencies), which would point to a more determined devaluation move that could spook risk sentiment globally, something we have seen in the past when China shows signs of shifting its exchange rate regime from passive management versus the USD. Crude oil Crude oil (CLU2 & LCOV2) remains on track for a weekly loss with talks of an Iran nuclear deal and global demand concerns being partly offset by signs of robust demand for fuel products. Not least diesel which is seeing increasing demand from energy consumers switching from punitively expensive gas. Earlier in the week Dutch TTF benchmark gas at one point traded above $400 per barrel crude oil equivalent. So far this month the EU diesel crack spread, the margin refineries achieve when turning crude into diesel, has jumped by more than 40% while stateside, the equivalent spread is up around 25%, both pointing to a crude-supportive strength in demand. US natural gas US natural gas (NGU2) ended a touch lower on Thursday after trading within a 7% range. It almost reached a fresh multi-year high at $9.66/MMBtu after spiking on a lower-than-expected stock build before attention turned to production which is currently up 4.8% y/y and cooler temperatures across the country lowering what until recently had driven very strong demand from utilities. LNG shipments out of Freeport, the stricken export plant may suffer further delays, thereby keeping more gas at home. Stockpiles trail the 5-yr avg. by 13%. US Treasuries (TLT, IEF) The focus on US Treasury yields may be set to intensify if the 10-year treasury benchmark yield, trading near 2.90% this morning, comes unmoored from its recent range and trades toward 3.00%, possibly on the Fed’s increase in the pace of its quantitative tightening and/or on US economic data in the coming week(s). Yesterday’s US jobless claims data was better than expected and the August Philadelphia Fed’s business survey was far more positive than expected, suggesting expansion after the volatile Empire Fed survey a few days earlier posted a negative reading.   What is going on?   Global wheat prices continue to tumble ... with a record Russian crop, continued flows of Ukrainian grain and the stronger dollar pushing down prices. The recently opened corridor from Ukraine has so far this month seen more than 500,000 tons of crops being shipped, and while it's still far below the normal pace it has nevertheless provided some relief at a time where troubled weather has created a mixed picture elsewhere. The Chicago wheat (ZWZ2) futures contract touch a January on Thursday after breaking $7.75/bu support while the Paris Milling (EBMZ2) wheat traded near the lowest since March. Existing home sales flags another red for the US housing market while other US economic data continues to be upbeat US existing home sales fell in July for a sixth straight month to 4.81 mn from 5.11 mn, now at the slowest pace since May 2020, and beneath the expected 4.89 mn. Inventory levels again continued to be a big concern, with supply rising to 3.3 months equivalent from 2.9 in June. This continues to suggest that the weakening demand momentum and high inventory levels may weigh on construction activity. The Philly Fed survey meanwhile outperformed expectations, with the headline index rising to +6.2 (exp. -5.0, prev. -12.3), while prices paid fell to 43.6 (prev. 52.2) and prices received dropped to 23.3 (prev. 30.3). New orders were still negative at -5.1, but considerably better than last month’s -24.8 and employment came in at 24.1 from 19.4 previously Fed speakers push for more rate hikes St. Louis Federal Reserve President James Bullard 2.6% with more front-loading in 2022. Fed’s George, much like Fed’s Daly, said that last month’s inflation is not a victory and hardly comforting. Bullard and George vote in 2022. Fed’s Kashkari said that he is not sure if the Fed can avoid a recession and that there is more work to be done to bring inflation down, but noted economic fundamentals are strong. Overall, all messages remain old and eyes remain on Fed Chair Powell speaking at the Jackson Hole conference on August 26, next Friday.  Japan’s inflation came in as expected Japan’s nationwide CPI for July accelerated to 2.6% y/y, as expected, from 2.4% y/y in June. The core measure was up 2.4% y/y from 2.2% previously, staying above the Bank of Japan’s 2% target and coming in at the strongest levels since 2008. Upside pressures remain as Japan continues to face a deeper energy crisis threat into the winter with LNG supplies possibly getting diverted to Europe for better prices. Still, Bank of Japan may continue to hold its dovish yield curve control policy unless wage inflation surprises consistently to the upside.   What are we watching next?   Strong US dollar to unsettle markets – and Jackson Hole Fed conference next week? The US dollar continues to pull higher here, threatening the cycle highs versus sterling, the euro and on the comeback trail against the Japanese yen as well. The US dollar is a barometer of global liquidity, and a continued rise would eventually snuff out the improvement in financial conditions we have seen since the June lows in equity markets, particularly if longer US treasury yields are also unmoored from their recent range and rise back to 3.00% or higher.  The focus on the strong US dollar will intensify should the USDCNH exchange rate, which has pulled to the highs of the cycle above 6.80, lurch toward 7.00 in coming sessions as it would indicate that China is unwilling to allow its currency to track USD direction. As well, the Fed seems bent on pushing back against market expectations for Fed rate cuts next year and may have to spell this out a bit more forcefully at next week’s Jackson Hole conference starting on Thursday (Fed Chair Powell to speak Friday). Earnings to watch The two earnings releases to watch today are from Xiaomi and Deere. The Chinese consumer is challenged over falling real estate prices and input cost pressures on food and energy, and as a result consumer stocks have been doing bad this year. Xiaomi is one the biggest sellers of smartphones in China and is expected to report a 20% drop in revenue compared to last year. Deere sits in the booming agricultural sector, being one of the biggest manufacturers of farming equipment, and analysts expect a 12% gain in revenue in FY22 Q3 (ending 31 July).   Today: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Economic calendar highlights for today (times GMT) 1230 – Canada Jun. Retail Sales 1300 – US Fed’s Barkin (Non-voter) to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 19, 2022
The Euro To US Dollar Instrument Did Not Change In Value

The Peak Of Inflation May Be Yet To Come? ECB Takes Steps

Conotoxia Comments Conotoxia Comments 19.08.2022 12:38
Inflation in the Eurozone appears to be rising steadily, which may be influenced by the rising cost of electricity and energy carriers. Today's release of producer prices in Germany suggests that the peak of inflation in the Eurozone may be yet to come. Germany is the eurozone's largest economy, so published readings for that economy could heavily influence data for the community as a whole. Energy for businesses rose by 105 percent. Today we learned that in July producer prices (PPI inflation) rose in Germany at the fastest pace on record. PPI inflation on an annualized basis was as high as 37.2 percent. A month earlier, price growth stood at 32.7 percent, while the market consensus was for inflation of 32 percent. Energy prices still seem to remain the main driver of producer costs. The cost of the aforementioned energy for businesses rose 105 percent compared to July 2021. Had it not been for this factor, producer prices could have risen much more slowly, by only 14.6 percent. - according to the published data. Entrepreneurs could translate such a significant increase in costs into their products, which could also raise consumer CPI inflation as a result. Hence, it is not impossible that a possible peak in inflation in the eurozone is yet to come. It could fall in the last quarter of this year, or early next year, assuming that energy prices begin to stabilize or fall. Otherwise, the eurozone economy could plunge into a deep crisis. EUR/USD near parity again The rate of the EUR/USD pair fell today to 1.0084 (yesterday it was around 1.0200) and again approached parity at 1.0000. Concerns about the eurozone economy may be reflected in the exchange rate. However, it seems that the reaction to negative data is becoming less and less, as if the market has to some extent already discounted some of the bad news that may come in the near future. The European Central Bank's forthcoming actions may put the brakes on the euro's sell-off. According to the interest rate market, the ECB may opt for two rate hikes of 50 basis points each this fall. The market assumes that the ECB will raise the main interest rate to 1.5 percent throughout the cycle. Unlike the Fed, which may reduce the pace of hikes at the end of the year, the ECB may only move with a rapid increase in interest rates. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Source: PPI inflation in Germany highest on record. Euro under pressure
Philippines Central Bank's Hawkish Pause: Key Developments and Policy Stance

Forex: Watch Out USD/JPY! Japanese Inflation Has Just Set A New Record!

Kenny Fisher Kenny Fisher 19.08.2022 12:45
The struggling Japanese yen is in negative territory for a fourth straight day. In the European session, USD/JPY is trading at 136.71, up 0.61%. Japanese Core CPI hits 14-year high Japan’s core inflation continued to accelerate, with a gain of 2.4% YoY in July. This matched the forecast and was higher than the 2.2% reading in June. The reading is significant as it is the highest inflation level since 2008 and is the fourth straight month where inflation has exceeded the Bank of Japan’s target of 2%. For years, Japan grappled with deflation, which resulted in fiscal and monetary policy with an accommodative stance. The world has changed dramatically since the Russian invasion of Ukraine, however, which has set off a massive rise in inflation. Japan’s inflation rate is nowhere near those in the US or the UK, but nevertheless, higher inflation has forced the BoJ to explain why it is not tightening policy. Governor Kuroda has repeatedly stated that the BoJ’s number one priority is to stimulate weak growth, and he has vigorously defended a cap on JGB yields. Kuroda has argued that inflation is not being driven by strong domestic demand, but rather by higher import prices due to the surge in wheat and oil prices. Until wage growth strengthens, which would point to broad-based inflation, we can expect “business as usual’ from the BoJ. The price for the BoJ’s ultra-accommodative stance has been the sharp depreciation of the yen, which hit 140 in July, its lowest level since 1998. If inflation’s upward trend continues and CPI hits 3%, the BoJ may have to reconsider whether to make changes to policy. USD/JPY Technical There is resistance at 1.3744 and 139.30 135.46 has switched to support, followed by 1.3350   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen slide continues as inflation rises - MarketPulseMarketPulse
Tokyo Issues Warning as Yen Depreciates, USD/JPY in Positive Territory

Dollar (USD) Rules!!! Natural Gas Prices Collapse

Saxo Bank Saxo Bank 19.08.2022 13:00
Summary:  Today we note the strengthening headwinds against the melt-up in financial conditions as the US dollar continues to rise, having now broken higher against the Euro, sterling and yen, and as a new surge in US 10-year yields threatens. Elsewhere, US Natural Gas prices ease despite a weak storage build yesterday and wheat prices are retreating rapidly. In equities, focus on Applied Materials after their earning report, Canadian Solar and a look ahead at Deere. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: USD and treasury yields pushing back against the melt-up
USD/JPY Eyes Psychological Level of 150.00 Amidst BoJ's Monetary Policy and Fed's Rate Hike Expectations

The Bank Of England (BoE) Chasing The Inflation. Forex: GBPUSD, CNHJPY, EURUSD And Others

John Hardy John Hardy 19.08.2022 13:41
Summary:  The USD is breaking higher still, with important levels falling versus the Euro and yen yesterday. But the pain in sterling is most intense as presaged by the lack of a response to surging UK rates. Can the Bank of England do anything but continue to chase inflation from behind, caught between the Scylla of inflation and the Charybdis of a vicious recession? Also, USDCNH lurks at the top of the range ahead of another PBOC rate announcement on Monday. FX Trading focus: USD wrecking ball swinging again. UK faced with classic ugly choice between taking the pain via inflation or a severe recession The US dollar strength has picked up further after yesterday saw the breakdown in EURUSD below 1.0100 and a shot through 135.50 in USDJPY as longer US yields pushed to local highs. GBPUSD has been a bigger move on sterling weakness as discussed below.  A bit of resilient US data (especially the lower jobless claims than expected and a sharp revision lower of the prior week’s data taking the momentum out of the rising trend) has helped support the USD higher as longer US yields rose a bit further, taking the 10-year US treasury yield benchmark to new local highs, although we really need to see 3.00% achieved there after a few recent teases higher with no follow through higher. Looking forward to next week, the market will have to mull whether it has been too aggressive in pricing the Fed to pivot policy next year on disinflation and an easy-landing for the economy. The steady drumbeat of Fed pushback against the market’s complacency, together with a few of the recent data points (ISM Services, nonfarm payrolls, yesterday’s claims, etc.) has seen some of the conviction easing. But the key test will come next Friday, when Fed Chair Powell is set to speak on the same day we get the July PCE inflation data. Keep USDCNH on the radar through the end of today on the risk of an upside break above the range and Monday as the PBOC is set for a rate announcement (consensus expectations or another 10 bps of easing).   Chart: GBPUSD Lots at stake for sterling as discussed below, as it is a bit scary to see a currency weaken sharply despite a massive ratcheting higher in rate expectations from the central bank. The fall of 1.2000 has set in motion a focus on the 1.1760 cycle low, with an aggravated USD rise here and tightening of global financial conditions possibly quickly bringing the spike low toward 1.1500 from the early 2020 pandemic outbreak panic into focus. It is worth noting that the lowest monthly closing level for GBPUSD since the mid-1980’s is 1.2156. Without something dramatic to push back against USD strength next week from Jackson Hole, it is hard to see how this month may set the new low water mark for monthly closes. Source: Saxo Group GBPUSD slipped below 1.1900 this morning after breaking below the psychologically important 1.2000 level yesterday. As noted in the prior update, it’s remarkable to see the marked weakness in sterling despite the marking taking UK short rates sharply higher – with 2-year UK swaps over 100 basis points higher from the lows early this month. The Bank of England has expressed a determination to get ahead of the inflation spike and the market has priced in a bit more than a 50-basis-points-per-meeting pace for the three remaining BoE meetings of 2022. But is that sufficient given the UK’s structural short-comings and external deficits? Currency weakness risks adding further to spike in inflation this year. The BoE can take a couple of approaches in response: continue with the 50 bps hikes while bemoaning the backdrop and trotting out the expectation that eventually, economic weakness and easing commodity prices will feed through to drop inflation back into the range. Or, the BoE can actually get serious and super-size hikes even beyond the acceleration the market has priced, at the risk of bringing forward and increasing the severity of the coming recession. Until this week, the BoE’s anticipated tightening trajectory had prevented an aggravated weakness in sterling in broader terms, but the currency’s weakness despite a massive mark-up of BoE expectations has ratcheted the pressure on sterling and the BoE’s response to an entirely new level. Turkey shocked with a fresh rate cut yesterday of 100 basis points to take the policy rate to 13.00%. This with year-on-year inflation in Turkey at 79.6% and PPI at 144.6%, and housing measured at 160.6%. The move took USDTRY above 18.00, though it was a modest move relative to the size of the surprise. Turkish central bank chief Kavcioglu said that the bank would also look to “further strengthen macroprudential policy” by addressing the yawning difference between the policy rate and the rate commercial banks are charging for loans (more than double the official policy rate), as the push is to continue a credit-stimulated approach, inflation-be-darned.   Table: FX Board of G10 and CNH trend evolution and strength Note: a new color scheme for the FX Board! Besides changing the green for positive readings to a more pleasant blue, I have altered the settings such that trend readings don’t receive a more intense red or blue coloring until they have reached more significant levels – starting at an absolute value of 4 or higher. So far, most of the drama in sterling is the lack of a response to shifts in the UK yield curve, the broad negative momentum has only shifted a bit here, but watching for the risk of more. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs AUDNZD is crossing back higher, AUDCAD back lower, so NZDCAD….yep. Note the CNHJPY – if CNH is to make more waves, need to see more CNH weakness in an isolated sense, not just v. a strong USD. And speaking of a strong USD, the last holdouts in reversing, USDNOK and USDCHF, are on the cusp of a reversal. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – Canada Jun. Retail Sales 1300 – US Fed’s Barkin (Non-voter) to speak   Source: FX Update: USD surging again, GBP spinning into abyss
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

Forex: GBP/USD - Technical Analysis - British Pound To US Dollar

InstaForex Analysis InstaForex Analysis 19.08.2022 13:44
Relevance up to 12:00 2022-08-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Overview : GBP/USD : The bias remains bearish in the nearest term testing 1.1800 or lower. Immediate support is seen around 1.1800. A clear break below that area could lead price to the neutral zone in the nearest term. Price will test 1.1800, because in general, we remain bearish on August 19h, 2022. The GBP/USD pair continues moving downwards from the level of 1.1921 this morning. Today, the first resistance level is currently seen at 1.1921, the price is moving in a bearish channel now. The market moved from its top at 1.2056 and continued to drop towards the top of 1.2056. Today, on the one-hour chart, the current fall will remain within a framework of correction. If the trend breaks the double bottom level of 1.1850, the pair is likely to move downwards continuing the development of a bearish trend to the level of 1.1800 in order to test the weekly support 1. So, the support stands at the level of 1.1850, while daily resistance is found at 1.1921. Therefore, the market is likely to show signs of a bearish trend around the spot of 1.1921. However, if the pair fails to pass through the level of 1.1921 (first resistance), the market will indicate a bearish opportunity below the strong resistance level of 1.1921 (the level of 1.1921 coincides with tha ratio of 00% Fibonacci retracement, bottom price, last bearish wave). Since there is nothing new in this market, it is not bullish yet. Sell deals are recommended below the level of 1.1921 with the first target at 1.1800 and continue towards 1.1750 so as to test the second support at the same time frame. According to the previous events the price is expected to remain between 1.1921 and 1.1750 levels. Sell-deals are recommended below the price of 1.1921 with the first target seen at 1.1850. The movement is likely to resume to the point 1.1800. The descending movement is likely to begin from the level 1.1850 with 1.1800 and 1.1750 seen as new targets in coing hours. This would suggest a bearish market because the RSI indicator is still in a negative area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.1750 in order to test the second support (1.1750). On the other hand, if the GBP/USD pair fails to break through the weekly pivot point level of 1.2056 today, the market will move upwards continuing the development of the bullish trend to the level 1.2275 (double top) for next month.   Read more: https://www.instaforex.eu/forex_analysis/289242
Latam FX Outlook 2023: Brazil's Local Currency Bonds Can Be Very Attractive

Mexican Gold - Peso Is Climbing High. Russia Is Building Nuclear Plant In Turkey!?

Marc Chandler Marc Chandler 19.08.2022 14:26
Overview:  The dollar is on fire. It is rising against all the major currencies and cutting through key technical levels like a hot knife in butter. The Canadian dollar is the strongest of the majors this week, which often outperforms on the crosses in a strong US dollar environment. It is off 1.5% this week. The New Zealand dollar, where the RBNZ hiked rates this week by 50 bp, is off the most with a 3.5% drop. Emerging market currencies are mostly lower on the day and week as well. The JP Morgan Emerging Market Currency Index is off for the fifth consecutive session, and ahead of the Latam open, it is off 2.1% this week. Asia Pacific equities were mostly lower, and Europe’s is off around 0.4%. It was flat for the week coming into today. US futures are lower, and the S&P and NASDAQ look poised to snap its four-week advance. Gold, which began the week near $1800 is testing support near $1750 now. Next support is seen around $1744.50. October WTI is consolidating in the upper end of yesterday’s range, which briefly poked above $91. Initial support is pegged near $88. US natgas is softer for the third successive session, but near $9.04 is up about 3.2% for the week. Europe’s benchmark is up 1.7% and brings this week’s gain to almost 20%. Demand concerns weigh on iron ore. It was off marginally today, its fifth loss in six sessions. It tumbled 8.8% this week after a 1.15% gain last week. Copper is up fractionally after rising 1.3% yesterday. September wheat is trying to stabilize. It fell more than 4% yesterday, its fifth loss in a row. It is off around 8.5% this week. Asia Pacific Japan's July CPI continued to rise  Th headline now stands at 2.6%, up from 2.4% in June, up from 0.8% at the start of the year and -0.3% a year ago. The core measure that excludes fresh food accelerated from 2.2% to 2.4%. It is the fourth consecutive month above the 2% target. Excluding both fresh food and energy, Japan's inflation is less than half the headline rate at 1.2%. It was at -0.7% at the end of last year and did not turn positive until April. The BOJ's next meeting is September 22, and despite the uptick in inflation, Governor Kuroda is unlikely to be impressed. Without wage growth, he argues, inflation will prove transitory. With global bond yields rising again, the 10-year, the market may be gearing up to re-challenge the BOJ's 0.25% cap. The yield is finishing the week near 0.20%, its highest since late July. Separately, we note that after divesting foreign bonds in recent months, Japanese investors have returned to the buy side. They have bought foreign bonds for the past four weeks, according to Ministry of Finance data. Last week's JPY1.15 trillion purchases (~$8.5 bln) were the most since last September.  China surprised the markets to begin the week with a 10 bp reduction in the benchmark 1-year medium-term lending facility rate  It now stands at 2.75%. It was the first cut since January, which itself was the first reduction since April 2020. Before markets open Monday, China is expected to announce a 10 bp decline in the 1- and 5-year loan prime rates. That would bring them to 3.60% and 4.35%, respectively. These rates are seen closer to market rates, but the large banks that contribute the quotes are state-owned. There is some speculation that a larger cut in the 5-year rate. The one-year rate was cut in January, but the 5-year rate was cut by 15 bp in May. The dollar is rising against the yen for the fourth consecutive session  It has now surpassed the JPY137.00 area that marks the (61.8%) retracement of the decline from the 24-year high set-in mid-July near JPY139.40. There may be some resistance in the JPY137.00-25 area, but a retest on the previous high looks likely in the period ahead. The Australian dollar is off for the fifth consecutive session and this week's loss of 3% offset last week's gain of as similar magnitude and, if sustained, would be the largest weekly decline since September 2020. The Aussie began the week near $0.7125 and recorded a low today slightly below $0.6890. The $0.6855-70 area is seen as the next that may offer technical support. The PBOC set the dollar's reference rate at CNY6.8065 (median in Bloomberg's survey was CNY6.9856). The fix was the lowest for the yuan (strongest for the dollar) since September 2020. Yesterday's high was almost CNY6.7960 and today's low was a little above CNY6.8030. To put the price action in perspective, note that the dollar is approaching the (61.8%) retracement of the yuan's rise from mid-2020 (~CNY7.1780) to this year's low set in March (~CNY6.3065). The retracement is found around CNY6.8250. Europe UK retail sales surprised to the upside but are offering sterling little support  Retail sales including gasoline rose by 0.3% in July. It is the second gain of the year and the most since last October. Excluding auto fuel, retail sales rose by 0.4%, following a 0.2% gain in June. It is the first back-to-back gain since March and April 2021. Sales online surged 4.8% as discounts and promotions drew demand, and internet retailers accounted for 26.3% of all retail sales. Separately, consumer confidence, measured by GfK, slipped lower (-44 from -41), a new record low. Sterling is lower for the third consecutive session and six of the past seven sessions. The swaps market continues to price in a 50 bp rate hike next month and about a 1-in-5 chance of a 75 bp move. Nearly every press report discussing next month's Italian elections cited the fascist roots of the Brothers of Italy, which looks likely to lead the next government  Meloni, who heads up the Brothers of Italy and has outmaneuvered many of her rivals, and may be Italy's next prime minister, plays the roots down. She compares the Brothers of Italy to the Tory Party in the UK, the Likud in Israel, and the Republican Party in the US. The party has evolved, and the center-right alliance she leads no longer wants to leave the EU, it is pro-NATO, and condemns Russia's invasion of Ukraine. The center-right alliance may come close to having a sufficient majority in both chambers to make possible constitutional reform. High on that agenda appears to transform the presidency into a directly elected office. The Italian presidency has limited power under the current configuration, but it has been an important stabilizing factor in crisis. Ironically, the president, picked by parliament, stepped in during the European debt crisis and gave Monti the opportunity to form a technocrat government after Berlusconi was forced to resign in 2011. Fast-forward a decade, a government led by the Conte and the Five Star Movement collapsed and a different Italian president gave Draghi a chance to put together a government. It almost last a year-and-half. Its collapse set the stage for next month's election. The center-left is in disarray and its inability to forge a broad coalition greases the path for Meloni and Co. Italy's 10-year premium over German is at 2.25%, a new high for the month. Last month, it peaked near 2.40%. The two-year premium is wider for the sixth consecutive session. It is near 0.93%, more than twice what it was before the Draghi government collapsed. Some critics argue against the social sciences being science because of the difficulty in conducting experiments  Still an experiment is unfolding front of us. What happens when a central bank completely loses its independence and follows dubious economic logic?  With inflation at more than two decades highs and the currency near record lows, Turkey's central bank surprised everyone by cutting its benchmark rate 100 bp to 13% yesterday. Governor Kavcioglu hinted this was a one-off as it was preempting a possible slowdown in manufacturing. Even though President Erdogan promised in June rates would fall, some observers link the rate cut to the increase in reserves (~$15 bln) recently from Russia, who is building a nuclear plant in Turkey. The decline in oil prices may also help ease pressure on Turkey's inflation and trade deficit. The lira fell to new record-lows against the dollar. The lira is off about 7.5% this quarter and about 26.4% year-to-date. Significant technical damage has been inflicted on the euro and sterling  The euro was sold through the (61.8%) retracement objective of the runup since the mid-July two-decade low near $0.9950. That retracement area (~$1.0110) now offers resistance, and the single currency has not been above $1.01 today. We had suspected the upside correction was over, but the pace of the euro's retreat surprises. There is little from a technical perspective preventing a test on the previous lows. Yesterday, sterling took out the neckline of a potential double top we have been monitoring at $1.20. It is being sold in the European morning and has clipped the $1.1870 area. The low set-in mid-July was near $1.1760, and this is the next obvious target and roughly corresponds to the measuring objective of the double top.  America With no dissents at the Fed to last month's 75 bp hike, one might be forgiven for thinking that there are no more doves  Yet, as we argued even before Minneapolis Fed President Kashkari, once regarded as a leading dove, admitted that his dot in June was the most aggressive at 3.90% for year-end, hawk and dove are more meaningful within a context. Kashkari may be more an activist that either a hawk or dove. Daly, the San Francisco Fed President does not vote this year, suggested that a Fed funds target "a little" over 3% this year would be appropriate. She said she favored a 50 bp or a 75 bp move. The current target range is 2.25%-2.50%. and the median dot in June saw a 3.25%-3.50% year-end target. St. Louis Fed President Bullard says he favors another 75 bp hike next month. No surprise there. George, the Kansas, Fed President, dissented against the 75 bp hike in June seemingly because of the messaging around it, but it's tough to call her vote for a 50 bp hike dovish. She voted for the 75 bp move in July. She recognizes the need for additional hikes, and the issue is about the pace. George did not rule out a 75 bp hike while cautioning that policy operates on a lag. Barkin, the Richmond Fed President, also does not vote this year. He is the only scheduled Fed speaker today.  The odds of a 75 bp in September is virtually unchanged from the end of last week around a 50/50 proposition.  The October Fed funds implies a 2.945% average effective Fed funds rate. The actual effective rate has been rocksteady this month at 2.33%. So, the October contract is pricing in 61 bp, which is the 50 bp (done deal) and 11 of the next 25 bp or 44% chance of a 75 hike instead of a half-point move. Next week's Jackson Hole conference will give Fed officials, and especially Chair Powell an opportunity to push back against the premature easing of financial conditions  The better-than-expected Philadelphia Fed survey helps neutralize the dismal Empire State manufacturing survey. The median from Bloomberg's survey looked for improvement to -5 from -12.3. Instead, it was reported at 6.2. Orders jumped almost 20 points to -5.1 and the improvement in delivery times points to the continued normalization of supply chains. Disappointingly, however, the measure of six-month expectations remained negative for the third consecutive month. Still, the plans for hiring and capex improved and the news on prices were encouraging. Prices paid fell to their lowest since the end of 2020 (energy?) and prices received were the lowest since February 2021. The Fed also asked about the CPI outlook. The median sees it at 6% next year down from 6.5% in May. The projected rate over the next 10-years slipped to 3%. Canada and Mexico report June retail sales today  Lift by rising prices, Canada's retail sales have posted an average monthly gain this year of 1.5%. However, after a dramatic 2.2% increase in May, Canadian retail sales are expected (median in Bloomberg' survey) to rise by a modest 0.4%. Excluding autos, retail sales may have held up better. Economists look for a 0.9% increase after a 1.9% rise in May. Through the first five months of the year, Mexico's retail sales have risen by a little more than 0.5% a month. They have risen by a 5.2% year-over-year. Economists expected retail sales to have slowed to a crawl in June and see the year-over-year pace easing to 5.0%. The greenback rose the CAD1.2935 area that had capped it in the first half of the week. It settled near CAD1.2950 yesterday and is pushing closer to CAD 1.2980 now. Above here, immediate potential extends toward CAD1.3035. The US dollar is gaining for the third consecutive session against the Canadian dollar, the longest advancing streak in a couple of months. Support is seen in the CAD1.2940-50 area. The Mexican peso is on its backfoot, and is falling for the fourth session, which ended a six-day rally. The dollar has met out first target near MXN20.20 and is approaching the 20-day moving average (~MXN20.2375). Above there, the next technical target is MXN20.32. The broader dollar gains suggest it may rise above the 200-day moving average against the Brazilian real (~BRL5.2040) and the (38.2%) of the slide since the late July high (~BRL5.5140) that is found near BRL5.2185.    Disclaimer   Source: The Dollar is on Fire
Thursday's Bank's of England decision may be record-breaking!

GBP/USD. August 19. UK retail sales show gains but market ignores statistics

InstaForex Analysis InstaForex Analysis 19.08.2022 17:49
Relevance up to 13:00 2022-08-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   On the hourly chart, the GBP/USD pair fell to the lower boundary of the descending trending channel and to the level of 1.1933 on Thursday. Today the pair has consolidated below both of those levels and continues to fall towards the correctional level of 685.4% - 1.1684. The downward channel continues to prove traders' bearish sentiment, so there is no reason to buy the British currency now. In addition, there is no reason to pay attention to the information background. That sounds a bit weird because the fundamental background always matters. In particular, it is what is causing traders to get rid of the pound and the euro right now. The reason for this lies in the difference between the Fed and ECB policies with the Bank of England. Among other reasons, there could be a geopolitical crisis in Ukraine, which considerably affects Europe in terms of energy security. These factors push the euro and the pound down. Economic reports do not have an influence on traders' sentiment. This week there was enough information on the UK economy. There were some strong data and some weak reports as well. However, the pound sterling has been falling almost for the seventh day in a row. We can conclude that the reports had almost no effect on the GBP movement. Notably, the euro and the pound are falling almost equally, so it has nothing to do with the UK statistics or the European ones. It definitely was not the US statistics because there were none released this week. Thus, the change in traders' sentiment can be expected in September at the earliest, when the Fed and the BoE will hold new meetings, announce new monetary policy decisions, and when new conclusions can be drawn about the difference between the US and UK monetary policy.     On the 4-hour chart, the pair returned to the level of 1.2008 again and fixed below it. The price continued falling towards the correction level of 161.8% - 1.1709. There are no emerging divergences today, and the trend line makes no impact on the quotes. Nevertheless, the pound failed to fix above 1.2250, and this double rebound can be considered one of the trend line points. The bearish sentiment persists. COT report:     The sentiment of the Non-commercial traders has become much less bearish over the past week. The number of Long-contracts in the hands of speculators increased by 12,914, and the number of Short-contracts decreased by 9,027. Thus, the sentiment of the big players remained bearish, and the number of Short-contracts still exceeds the number of Long-contracts, however, much less than before. Large players continue to sell the pound for the most part but their sentiment is gradually becoming bullish. The pound showed weak growth in recent weeks, and the COT reports confirm that the British pound is more likely to resume its fall, rather than begin a long-term uptrend. Economic calendar for US and UK economies: UK - Retail Sales (06-00 UTC) The UK retail sales report was released on Friday, posting an increase of 0.3% in July. Traders were expecting red figures, and the pound was barely affected by this report at all and continues to fall since this morning. For the rest of the day, traders' sentiment is unlikely to change amid the information background. GBP/USD forecast and recommendations for traders: I recommend selling the pound when it fixes below 1.2208 on the hourly chart with a target of 1.1709. These trades can be held open. It is better to buy the pound when the pair's rate fixes above the descending trading channel on the hourly chart with the target at 1.2146.   Read more: https://www.instaforex.eu/forex_analysis/319421
Technical analysis recommendations on EUR/USD and GBP/USD for August 19, 2022

Technical analysis recommendations on EUR/USD and GBP/USD for August 19, 2022

InstaForex Analysis InstaForex Analysis 19.08.2022 17:51
Relevance up to 12:00 2022-08-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher timeframes After two days of deceleration and uncertainty, bears again showed activity and continued to decline, closing the previous day below the golden cross on the daily chart (1.0111). The current task is to eliminate the daily cross, then the bears' attention will be to overcome the important historical support of 1.0000 and restore the downward trend of most higher timeframes (0.9952 minimum extreme). If bullish sentiment returns to the market, the next important resistances have accumulated now in the area of 1.0188 - 1.0219 (daily cross).     H4 – H1 The main advantage on the lower timeframes now belongs to the bears. However, there has been a slight corrective deceleration in recent hours. The main reference points for the development of an upward correction today are the key levels, located at 1.0120 (central pivot point of the day) and 1.0172 (weekly long-term trend). If the decline continues, classical pivot points (1.0046 – 1.0007 – 0.9933) can provide support. In addition, the target for the breakout of the H4 cloud (1.0055 – 1.0020) also belongs to intraday targets. *** GBP/USD     Higher timeframes Sellers yesterday managed to cope with the supports that held back the development of the movement 1.2000 (psychological level) - 1.2026 (daily medium-term trend) - 1.2046 (weekly short-term trend) and closed the day much lower. The current benchmark in this direction is the minimum extremum (1.1759), its update will allow restoring the downward trend of the higher timeframes.     H4 – H1 On lower timeframes, we observe the development of a downward trend. The first support for classic pivot points (1.1873) is currently being tested. The next supports are at 1.1819 (S2) and 1.1716 (S3). The key levels are now acting as resistance, therefore, in the event of a correction, they will meet bulls at the levels of 1.1976 (the central pivot point) – 1.2052 (weekly long-term trend). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/319405
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

Forex: What's Going To Affect EUR/USD? US Fed Monetary Policy, Energy Realities And Potential Recession In Europe

InstaForex Analysis InstaForex Analysis 21.08.2022 15:26
Relevance up to 13:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Resistance is futile! Amid the energy crisis raging in Europe, EURUSD bulls are forced to flee the battlefield. The main currency pair is steadily moving towards parity, knowing full well that it is unlikely that it will be possible to find the bottom at its level for the second time in 1.5 months. The euro was helped by slowing US inflation, but as soon as investors realized that the Federal Reserve would continue to raise rates, their attention switched to the US and eurozone economies. And the second is still hopelessly losing. The August business data releases should highlight the divergence in GDP growth. Bloomberg expects European purchasing managers' indexes to continue their plunge, while the US services PMI rally will prove that American exceptionalism is not an empty phrase. These statistics and the release of data on the index of personal consumption expenditures, the key indicator of inflation monitored by the Fed, will be the main events of the third week of August in the economic calendar. However, all of them will surely be eclipsed by Fed Chairman Jerome Powell's speech at Jackson Hole. The market behaved like a child in relation to the minutes of the July FOMC meeting: it did not understand anything. The Fed continues to throw all its efforts into the fight against inflation, but fears that it will go too far. It declares the transition to a policy of dependence on data, which was already known after Powell's speech at a press conference. As a result, Powell had a great opportunity to chew everything up and explain, as Janet Yellen did in her time. Basically, there is not much to explain. A slowdown in US inflation reduces the Fed's need for more repression of its own economy and labor market, but there are good reasons for the central bank to keep raising the federal funds rate and keep it high for an extended period. No matter how much consumer price growth slows down, core inflation is unlikely to drop at the speed of a courier train. As, however, and salaries. Dynamics of inflation and labor costs in the United States         It is not certain that the core CPI in the US has reached its peak, and if it does pass, no one can guarantee that the current rate of monetary restriction by the Fed is enough to bring inflation back to the 2% target. Most likely, borrowing costs will have to increase to 4-4.5%, and not to 3.7%, as currently expected by the derivatives market. To celebrate the victory over high prices, a significant slowdown in the economy is required, and it most likely will not happen. So high rates in the United States are serious and for a long time. Together with the energy crisis in Europe and the proximity of the eurozone economy to recession, this does not paint a rosy scenario for EURUSD. Technically, the pair is trying to find a bottom on the weekly chart - to form point 5 of the Wolfe Wave pattern. Most likely, the euro will have to fall to $0.977-0.984, and possibly even to $0.95-0.96, before bouncing back up. Recommendation for EURUSD - sell.   Read more: https://www.instaforex.eu/forex_analysis/319419
Credit squeezing into central banks – what next?

Everyone Is Dissapointed In Euro (EUR). Japanese Officials Have To Face Discontests From Yields Rise

Marc Chandler Marc Chandler 21.08.2022 23:14
For many, this will be the last week of the summer. However, in an unusual twist of the calendar, the US August employment report will be released on September 2, the end of the following week, rather than after the US Labor Day holiday (September 5).   The main economic report of the week ahead will be the preliminary estimate of the August PMI  The policy implications are not as obvious as they may seem. For example, in July, the eurozone composite PMI slipped below the 50 boom/bust level for the first time since February 2021. It was the third consecutive decline. Bloomberg's monthly survey of economists picked up a cut in Q3 GDP forecasts to 0.1% from 0.2% and a contraction of 0.2% in Q4 (previously 0.2% growth). Over the past week, the swaps market has moved from around 80% sure of a 50 bp hike next month to a nearly 20% chance it will lift the deposit rate by 75 bp.  The UK's composite PMI fell in three of the four months through July  However, at 52.1, it remains above the boom/bust level, though it is the weakest since February 2021. The Bank of England's latest forecasts are more pessimistic than the market. It projects the economy will contract by 1.5% next year and another 0.3% in 2024. It has CPI peaking later this year at around 13% before falling to 5.5% in 2023 and 1.5% in 2024. Market expectations have turned more hawkish for the BOE too. A week ago, the swap market was pricing in a nearly 90% chance of another 50 bp hike. After the CPI jump reported in the middle of last week, the market fully priced in the 50 bp move and a nearly 30% chance of a 75 bp hike.   Japanese officials have successfully turned back market pressure that had driven the benchmark three-month implied volatility to 14% in mid-June, more than twice as high as it was at the start of the year  It slipped below 10% in recent days. The BOJ was forced to vigorously defend its 0.25% cap on the 10-year bond. It has spent the better part of the past three weeks below 0.20%. The BOJ has not had to spend a single yen on its defense since the end of June. However, with the jump in global yields (US 10-year yield rose 20 bp last week, the German Bund 33 bp, and the 10-year UK Gilt nearly 40 bp) and the weakness of the yen, the BOJ is likely to be challenged again.   The economy remains challenging  The composite PMI fell to 50.2 in July from 53.2 in June. It is the weakest reading since February. It has averaged 50.4 through July this year. The average for the first seven months last year was 49.0. The government is working on some support measures aimed at extending the efforts to cushion the blow of higher energy and food prices. Japan's Q2 GDP deflator was minus 0.4%, which was half of the median forecast in Bloomberg's survey, but it shows the tough bind of policy. Consider that the July CPI rose to 2.6%, and the core measure, which the BOJ targets, excludes fresh food, rose to 2.4% from 2.2%. The target is 2%, and it was the third month above it. Tokyo will report its August CPI figures at the end of the week.   Australia's flash PMI may be more influential as the futures market is nearly evenly split between a 25 bp hike and a 50 bp move at the September 6 central bank meeting  The minutes from the RBA's meeting earlier this month underscored its data dependency. However, this is about the pace of the move. The target rate is currently at 1.85%, and the futures market is near 3.15% for the end of the year, well beyond the 2.5% that the central bank sees as neutral. The weakness of China's economy may dent the positive terms-of-trade shock. The Melbourne Institute measure of consumer inflation expectations fell in August for the second month but at 5.9%, is still too high.  Through the statistical quirkiness of GDP-math, the US economy contracted in the first two quarters of the year  A larger trade deficit did not help, but the real problem was inventories. In fairness, more of the nominal growth resulted from higher prices than economists expected rather than underlying activity. Still, it does appear that the US economy is expanding this quarter, and the high-frequency data will help investors and economists assess the magnitude. While surveys are helpful, the upcoming real sector data include durable goods orders (and shipments, which feed into GDP models), July personal income and consumption figures, the July goods trade balance, and wholesale and retail inventories.   Consumption still drives more than 2/3 of the economy, and like retail sales, personal consumption expenditures are reported in nominal terms, which means that they are inflated by rising prices  However, the PCE deflator is expected to slow dramatically. After jumping 1% in June, the headline deflator is expected to increase by 0.1%. This will allow the year-over-year rate to slow slightly (~6.5% from 6.8%). The core deflator is forecast (median, Bloomberg's survey) to rise by 0.4%, which given the base effect, could see the smallest of declines in the year-over-year rate that stood at 4.8% in June. Given the Fed's revealed preferences when it cited the CPI rise in the decision in June to hike by 75 bp instead of 50 bp, the CPI has stolen the PCE deflator's thunder, even though the Fed targets the PCE deflator. Real consumption was flat in Q2, and Q3 is likely to have begun on firmer footing.   The softer than expected CPI, PPI, and import/export prices spurred the market into downgrading the chances of a 75 bp hike by the Fed next month  After the stronger than expected jobs growth, the Fed funds futures priced in a little better than a 75% chance of a 75 bp hike. It has been mostly hovering in the 40%-45% range most of last week but finished near 55%. It is becoming a habit for the market to read the Fed dovishly even though it is engaged in a more aggressive course than the markets anticipated. This market bias warns of the risk of a market reversal after Powell speaks on August 26.   At the end of last year, the Fed funds futures anticipated a target rate of about 0.80% at the end of this year. Now it says 3.50%. The pace of quantitative tightening is more than expected and will double starting next month. There is also the tightening provided by the dollar's appreciation. For example, at the end of 2021, the median forecast in Bloomberg's survey saw the euro finishing this year at $1.15. Now the median sees the euro at $1.04 at the end of December. And even this may prove too high.    The FOMC minutes from last month's meeting recognized two risks. The first was that the Fed would tighten too much. Monetary policy impacts with a lag, which also acknowledges that soft-landing is difficult to achieve. The market initially focused on this risk as is its wont. However, the Fed also recognized the risk of inflation becoming entrenched and characterized this risk as "significant." The Jackson Hole confab (August 25-27) will allow the Fed to help steer investors and businesses between Scylla and Charybdis.  Critics jumped all over Fed Chair Powell's claim that the Fed funds target is now in the area the officials regard as neutral. This was not a forecast by the Chair, but merely a description of the long-term target rate understood as neither stimulating nor restricting the economy. In June, all but three Fed officials saw the long-term rate between 2.25% and 2.50%. To put that in perspective, recall that in December 2019, the median view of the long-term target was 2.50%. Eleven of the 18 Fed officials put their "dot" between 2.25% and 2.50%. The FOMC minutes were clear that a restrictive stance is necessary, and the Fed clearly signaled additional rate hikes are required. The discussions at Jackson Hole may clarify what the neutral rate means.  Barring a significant downside surprise, we expect the Fed will deliver its third consecutive 75 bp increase next month. The strength and breadth of the jobs growth while price pressures remain too high and financial conditions have eased encourages the Fed to move as fast as the market allows. However, before it meets, several important high-frequency data points will be revealed, including a few employment measures, the August nonfarm payroll report, and CPI.   The market is also having second thoughts about a rate cut next year  At the end of July, the implied yield of the December 2023 Fed funds futures was 50 bp below the implied yield of the December 2022 contract. It settled last week at near an 8 bp discount. This reflects a growing belief that the Fed will hike rates in Q1 23. The March 2023 contract's implied yield has risen from less than five basis points more than the December 2022 contract to more than  20 bp above it at the end of last week.   Let's turn to the individual currency pairs, put last week's price action into the larger context, and assess the dollar's technical condition  We correctly anticipated the end of the dollar's pullback that began in mid-July, but the power for the bounce surprises. Key technical levels have been surpassed, warning that the greenback will likely retest the July highs.   Dollar Index: DXY surged by more than 2.3% last week, its biggest weekly advance since March 2020. The momentum indicators are constructive and not over-extended. However, it closed well above the upper Bollinger Band (two standard deviations above the 20-day moving average), found near 107.70. Little stands in the way of a test on the mid-July high set around 109.30. Above there, the 110-111.30 area beckons. While the 107.50 area may offer some support now, a stronger floor may be found closer to 107.00.   Euro:  The euro was turned back from the $1.0365-70 area on August 10-11 and put in a low near $1.0030 ahead of the weekend. The five-day moving average slipped below the 20-day moving average for the first time in around 3.5 weeks. The MACD is trending lower, while the Slow Stochastic did not confirm the recent high, leaving a bearish divergence in its wake. The only caution comes from the euro's push through the lower Bollinger Band (~$1.0070). Initially, parity may hold, but the risk is a retest on the mid-July $0.9950 low. A convincing break could target the $0.96-$0.97 area. As the euro has retreated, the US two-year premium over Germany has trended lower. It has fallen more than 30 bp since peaking on August 5. We find that the rate differential often peaks before the dollar.   Japanese Yen: The dollar will begin the new week with a four-day advance against the yen in tow. It has surpassed the (61.8%) retracement objective of the pullback since the mid-July high (~JPY139.40) found near JPY136.00. The momentum indicators are constructive, and the five-day moving average has crossed above the 20-day for the first time since late July. It tested the lower band of the next resistance bans seen in the JPY137.25-50 area at the end of last week. But it appears poised to re-challenge the highs. As volatility increases and yields rise, Japanese officials return to their first line of defense: verbal intervention.  British Pound: Sterling took out the neckline of a possible double top we have been monitoring that came in at $1.20. It projects toward the two-year lows set in mid-July near $1.1760, dipping below $1.18 ahead of the weekend. As one would expect, the momentum indicators are headed lower, and the five-day moving average has fallen below the 20-day moving average for the first time in four weeks. It has closed below its lower Bollinger Band (~$1.1910) in the last two sessions. A convincing break of the $1.1760 low clears the way to the March 2020 low, about 3.5-cents lower. Initial resistance is now seen around $1.1860 and, if paid, could signal scope for another 3/4 to a full-cent squeeze.  Canadian Dollar:  The Canadian dollar was no match for the greenback, which moved above CAD1.30 ahead of the weekend for the first time in a month. The momentum indicators suggest the US dollar has more scope to advance, and the next target is the CAD1.3035 area. Above there, the CAD1.3100-35 band is next. The high since November 2020 was recorded in the middle of July around CAD1.3225. After whipsawing in Q1, the five- and 20-day moving averages have caught the big moves. The shorter average crossed above the longer moving average last week for the first time since July 21. Initial support will likely be encountered near CAD1.2935.   Australian Dollar:  The Aussie was sold every day last week. It is the first time in a year, and its 3.4% drop is the largest since September 2020.   The rally from the mid-July low (~$0.6680) to the recent high (~$0.7135) looks corrective in nature. Before the weekend, it tested the rally's (61.8%) retracement objective. The momentum indicators are falling, and the Slow Stochastic did not confirm this month's high, creating a bearish divergence. A break of the $0.6850-60 area may signal follow-through selling into the $0.6790-$0.6800 band, but a retest on the July low is looking increasingly likely. Initial resistance is now seen near $0.6920.   Mexican Peso:  The peso's four-day slide ended a six-day run. The peso lost about 1.6% last week, slightly better than the 2.25% slide of the JP Morgan Emerging Market Currency Index. This month, the US dollar peaked around MXN20.8335 and proceeded to fall and forged a base near MXN19.81. It has met the (38.2%) retracement objective around MXN20.20 before the weekend. The next (50%) retracement is near MXN20.3230. The 200-day moving average is closer to MXN20.41. The dollar is probing the 20-day moving average seen a little below MXN20.24. The momentum indicators have only just turned up for the greenback. We suspect there may be potential to around MXN20.50 in the coming days.   Chinese Yuan:  The yuan was tagged with more than a 1% loss against the dollar last week, its biggest decline in three months. A combination of poor Chinese data, its small rate cut, and a resurgent US dollar spurred the exchange rate adjustment. At the end of July, China's 10-year yield was about 11 bp on top of the US. However, it switched to a discount after the US jobs data (August 5), and the discount grew every day last week, reaching 35 bp, the most since late June. After gapping higher before the weekend, the greenback reached nearly CNY6.8190, its highest level since September 2020. The next target is around CNY6.85, but given the divergence of policy, a move back toward CNY7.00, last seen in July 2020, maybe a reasonable medium-term target. The PBOC's dollar fix ahead of the weekend showed no protest of the weaker exchange rate.     Disclaimer   Source: Flash PMI, Jackson Hole, and the Price Action
US Dollar Index May Confirm A Potential Bullish Trend Reversal

EUR/USD. Preview of the week. Gas issue, Jackson Hole conference and release of the PCE index

InstaForex Analysis InstaForex Analysis 22.08.2022 07:43
Relevance up to 18:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The penultimate week of August promises to be "hot": an important economic symposium will be held in America, and the PCE index, an inflation indicator that is monitored with particular care by the Federal Reserve, will also be published. PMI and IFO indices will be released in Europe. In addition, traders are still focused on the "gas issue", given that Gazprom plans to shut down the only Nord Stream 1 turbine at the end of August. Such a busy agenda will surely provoke increased volatility in the foreign exchange market, including for the EUR/USD pair.     Let's start with US events. An economic symposium will begin in the small town of Jackson Hole on August 25, which acts as a kind of barometer of the mood of the central banks of the leading countries of the world. The forum is attended by the heads of the central bank (usually at the level of chairmen or their deputies) of the leading countries of the world, finance ministers, leading economists and analysts, heads of the world's largest conglomerates and banking giants. They discuss pressing topics, problems, crystallize certain signals and define roadmaps for further steps. As a rule, representatives of the financial world discuss the most pressing issues that are relevant at the moment. For example, in 2015, the number one topic was the collapse of the Shanghai Stock Exchange, in 2016 they talked about the possible consequences of Brexit, and in 2017, the expansion of bond spreads and further steps by the Fed and the European Central Bank. In 2018, the central topic of the meeting was the trade war between the US and China (or rather, its consequences), in 2019, they again discussed the global trade conflict, as well as the impending Brexit. Naturally, the main topic of 2020-2021 was the coronavirus and its consequences. And it is quite obvious that this week the participants of the meeting will focus on the fight against high inflation, because this problem, one might say, is relevant for everyone. During the three-day symposium, which starts next Thursday, the heads and representatives of many central banks will speak, who can talk about their further actions in the context of monetary policy prospects. In particular, Fed Chairman Jerome Powell is expected to speak on Friday. He can comment on the latest inflationary releases (CPI, Producer Price Index, Import Price Index), which came out in August in the red zone. If, contrary to the first signs of a slowdown in CPI growth, Powell again becomes concerned about the high level of inflation in the United States (and does not announce the "first victories" of the Fed in this direction), the US currency will receive another impetus for its growth throughout the market, including in pair with euro. However, the latest releases of US statistics still retain intrigue regarding the tone of the rhetoric of the head of the Fed. By the way, the main index of personal consumption expenditures (PCE) will be published on Friday. This is the most important inflationary indicator monitored by the Fed members and which can provoke increased volatility among dollar pairs - both in favor of the greenback and against it. According to preliminary forecasts, Friday's report will reflect a slowdown in the index. So, on an annualized basis, the indicator should reach 4.6%. Let me remind you that after a three-month decline, the core price index for personal consumption expenditure in July again "raised its head", being at around 4.8%. If the PCE reverses 180 degrees again, the dollar could come under significant pressure as the CPI and producer price index slow down. The growth or slowdown of this index will play an important role, especially amid Powell's hesitation regarding the further pace of tightening of the Fed's monetary policy.     At the same time, it should be emphasized that regardless of the greenback's health, long positions on the EUR/USD pair will look risky: it is advisable to use the upward surges in the pair as a reason to open short positions. Given the worsening energy crisis, the European currency will continue to be under background pressure. Let me remind you that on Friday, Gazprom announced that the only Nord Stream turbine would be shut down on August 31 for repair work. Against the background of this statement, stock prices for blue fuel in Europe have overcome the mark of $2,700 per thousand cubic meters (for the first time since March of this year). If the upward dynamics continue, the euro will be under additional pressure. By the way, Gazprom itself recently announced that, according to "the most conservative estimates", in winter the cost of blue fuel will exceed $4,000 per 1,000 cubic meters, "if the relevant trends continue." Macroeconomic reports, which will be published next week, may also put pressure on the single currency. For example, the IFO business environment indicator should show negative dynamics, once again updating the annual low. The indicator of economic expectations is likely to show a similar result. The PMI indices, which will be published on Tuesday, will only add to the negative (for the euro) fundamental picture - for example, German indicators should go below the key 50-point mark. Thus, there is no doubt that the upcoming week will be volatile. Considering the current fundamental background, any corrective rollbacks for the EUR/USD pair should be used to open short positions. Last week bears managed to break out of the price range of 1.0130-1.0280, within which they traded for almost four weeks. Most likely, bears will try to build on their success this week. But at the same time, traders are in close proximity to the parity level. This is a strong support level - so far, EUR/USD bears are not able to overcome it (with subsequent consolidation). Therefore, it is safest to enter shorts on the waves of corrective rollbacks. The main downward targets are 1.0050 and 1.0010.   Read more: https://www.instaforex.eu/forex_analysis/319467
The Run Higher In Japanese Yields Is Likely To Create Further Volatility In Global Markets

Forex: USD/JPY (US Dollar To Japanese Yen) - What To Expect?

InstaForex Analysis InstaForex Analysis 22.08.2022 08:05
Relevance up to 04:00 2022-08-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The dollar continues to advance on the Japanese yen for the eighth consecutive session. The quote of the USD/JPY pair is already struggling with the resistance of the MACD indicator line of the daily scale, above it is the target level of 137.80, formed by the embedded line of the price channel of the monthly timeframe.     The signal line of the Marlin Oscillator is slowing down the growth and this suggests an impending correction, since all this growth in the dollar is taking place amid a decline in the stock market. The S&P 500 lost 1.29% on Friday. The price may soon turn into a correction on a new wave of flight from risk.     The Marlin Oscillator has gone sideways on the four-hour chart, the price continues to grow. Long positions in this situation are associated with increased risk. Growth may continue if the price consolidates above the resistance line at 137.80, the target will be 139.02. The depth of a possible correction is not visible at the moment, but it may be the area of 134.35 - the area of the embedded line of the price channel on a daily scale, to which the MACD line on a four-hour scale is approaching.   Read more: https://www.instaforex.eu/forex_analysis/319473
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

FX: EUR/USD - This One May Catch You By Surprise! - 22/08/22

InstaForex Analysis InstaForex Analysis 22.08.2022 08:18
Relevance up to 04:00 2022-08-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. On Friday, the euro did not linger in the consolidation and decided to reach the target level of 1.0020 as soon as possible. This goal was achieved this morning. The probability of correction increases from this level, since it is the Fibonacci reaction level of 161.8% of the movement branch from the historical peak in July 2008 (1.6038) to the October 2008 low (1.2323), which is convenient to consider on a monthly scale.     After consolidating below the level of 1.0020, we expect the price to further decline to the July 14 low at 0.9950 and further decline to the target of 0.9850. The Marlin Oscillator has recently moved into a downward trend zone and is poised for a deep downward move. The formation of price convergence with the oscillator is likely at the level of 0.9850, the euro may turn up in the medium-term movement.     A price convergence with the Marlin Oscillator is forming on the H4 chart. If it is confirmed, then we are waiting for the lateral movement of the euro above 1.0020. Important economic releases will not be published today, so the potential of the euro correction can be realized. Neutral day.   Read more: https://www.instaforex.eu/forex_analysis/319477
Sebastian Seliga Comments On EUR/USD, Dollar Index, XAUUSD And S&P 500 - 29/08/22

Forex: EUR/USD May Be Plunging! US Dollar Is Supported By Soaring Energy Prices And More!

InstaForex Analysis InstaForex Analysis 22.08.2022 09:00
The dollar continues to perform very well. It remains buoyed by a hawkish Fed and also by the travails of major trading partners which are suffering more from high energy prices and weaker export markets. This trend looks set to continue this week which will culminate with a speech on Friday by Fed Chair, Jay Powell on the economic outlook USD: Travails overseas are keeping the dollar bid Catching our eye this European morning is news of Chinese banks cutting their loan prime rates to support the mortgage sector and also some pretty terrible Korean trade data, where the first 20 days of August produced an unprecedented US$10bn deficit. The news serves as a reminder (as did the PBOC policy rate cut this time last week) that the Chinese economy is slowing (USD/CNH now trading above 6.84) and producing very difficult trading conditions for a country such as Korea, trapped between higher imported energy costs on the one hand and slowing export markets on the other. Arguably a country like Germany faces similar challenges, where its economic model of importing cheap energy from Russia and exporting high-value goods around the world (especially to China) is facing challenges like never before. On higher energy prices, we note that natural gas costs continue to surge. And as drought conditions across Europe continue to disrupt coal shipments, similar problems in China's Sichuan province are impacting hydro-energy supplies and increasing demand for alternatives such as natural gas. These challenges to ex-US growth models continue to leave the dollar in the ascendance; we saw DXY surprisingly push above 108 on a quiet Friday. This week's focus should be on some mildly positive US data and culminate in Fed's Powell speech on the US economic outlook on Friday. The Fed is probably quite comfortable with what the market prices for its policy rate this year (around 125bp of hikes to a 3.50-3.75% target range.) What could be vulnerable to re-pricing higher would be the subsequent 40bp of easing priced in for the second half of next year. As we have seen recently, the Fed is quite keen to counter notions of a 2023 pivot. With European and Chinese data remaining soft this week - and no end in sight for the surge in gas prices - expect the dollar to hold its gains. The 109.30 July high in DXY looks like the direction of travel. Elsewhere, a couple of weeks ago we had felt that there was a window for carry trades and had picked out the MXN/JPY cross rate. That has moved up to 6.80. However, rising levels of volatility again (both in EUR/$ and $/JPY) suggests positions in high yield FX may be hard to hold and we would prefer more defensive long dollar positions now. Chris Turner  EUR: Will sub parity levels trigger an ECB response? EUR/USD remains very heavy and could sink below parity at any time. Adding to the sell-off may well be the portfolio adjustments of Asian central banks. Asian FX remains under heavy pressure and will prompt intervention to sell dollars and support local currencies. Asian FX reserve managers will then need to sell EUR/USD to re-balance FX portfolios to benchmark weightings. We also wonder whether we will see a more hawkish ECB this week. The market prices a 54bp rate hike for the September 8th meeting. Could the ECB start to discuss prospects of more aggressive rate increases if it wants to offer EUR/USD some support? Watch out for any speeches from the hawks in northern Europe this week. A retest of July's 0.9950 low looks to be the bias for EUR/USD this week. Customers are also asking us whether now is the time to increase hedge ratios on dollar receivables. As we discuss in our EUR/USD forecast revision piece, we think the euro's fair value has been damaged by the energy shock - meaning that EUR/USD is not especially cheap even at these levels. Chris Turner GBP: Does 1.15 beckon for Cable? The mighty dollar is causing problems for all and Cable could well retest July's 1.1760 low this week. Thereafter it is hard to rule out a move to 1.15 - a level seen in the March 2020 flash crash. We still have a preference that EUR/GBP does not need to rally too hard - given challenges faced in the eurozone - but acknowledge that sterling does look vulnerable. The UK calendar is pretty quiet this week.  Chris Turner   CEE: The main stage of the sell-off is over, but risks remain August is entering its final phase, which means only secondary data in the calendar for the CEE region. Today, we will see retail sales in Poland for July, which should show a further slowdown in YoY terms. On Wednesday, the Czech Republic will release confidence indicators, the first data for August. Consumer confidence is just a hair's breadth away from its all-time lows, and we cannot expect improvement this time either, thanks to the rising cost of living. In Hungary and Poland, labour market data will be published, in both cases confirming the severely tightened conditions. On Thursday, the NBH will again have a chance to intervene against the weakening forint by raising the 1-week deposit rate. For now, we do not expect a rate change this week either, but the level of the forint in the coming days will be crucial. For CEE currencies, EUR/USD attacking parity remains the main theme. Thus, we do not expect a trend reversal this week either. In our view, the Polish zloty remains the most vulnerable currency in the region. After Friday's data, it weakened the most in CEE and we see room for further losses towards 4.770 EUR/PLN. On the other hand, we continue to believe that the Hungarian forint should move to stronger levels around EUR/HUF 403, but negative sentiment is likely to keep the forint at weaker levels for a while longer. The koruna, unsurprisingly, remains stable after returning to CNB intervention levels and we cannot expect much this week. But we are watching the central bank balance sheet data to track FX intervention activity after weeks of silence. The Romanian leu continues to fluctuate around 4.88 EUR/RON and has maintained these levels despite a region-wide sell-off that has not escaped the ROMGB. Even though the CEE region should have seen the main part of the sell-off, EUR/USD near parity and rising gas prices remain the main risks. Of course, pressures from these directions would mean further losses for regional FX, so we remain bearish on CEE currencies this week. Frantisek Taborsky Read this article on THINK
Escalating Russia-Ukraine Tensions Amplify Oil Supply Risks: The Commodities Feed

Striking Performance Of EUR/USD! Let's See Euro To USD - Technical Analysis - 22/08/22

InstaForex Analysis InstaForex Analysis 22.08.2022 11:00
Relevance up to 09:00 2022-08-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The beginning of the trading week does not start good for the Euro bulls. The EUR/USD pair continues to move lower towards the parity level despite the extremely oversold market conditions seen on the H4 time frame chart. The nearest technical resistance is located at the level of 1.0097 and needs to be clearly violated for a solid bounce. Please notice the weak and negative momentum on the H4 time frame chart supports the short-term bearish outlook for EUR with a potential target seen at the level of 0.9955 or even lower. The US Dollar is being bought all across the board.     Weekly Pivot Points: WR3 - 1.0089 WR2 - 1.0057 WR1 - 1.0035 Weekly Pivot - 1.0025 WS1 - 1.0003 WS2 - 0.9992 WS3 - 0.09960 Trading Outlook: The monetary parity level as the first target for bears in the long term had been hit and the Euro is still being under the bearish pressure. There is no sign of relief for the EUR as the down trend should continue. The up trend can be continued towards the next long-term target located at the level of 1.1186 only if the complex corrective structure will terminate soon (above 1.0000) and the level of 1.0726 is clearly violated.   Read more: https://www.instaforex.eu/forex_analysis/289412
Ed Moya (Oanda) Comments On US Data, Crypto And More

Want To Exchange 1 GBP To USD? Check The Exchange Rate First! FX Cable (British Pound To US Dollar) - Technical Analysis - 22/08/22

InstaForex Analysis InstaForex Analysis 22.08.2022 11:03
Relevance up to 10:00 2022-08-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The GBP/USD pair had broken below the trend line support around the level of 1.1916 and made a new local low at the level of 1.1791 as expected. The market conditions on the H4 time frame chart are extremely oversold, so a bounce from the level of 1.1760 is expected. The nearest technical resistance is seen at the level of 1.1890. The larger time frame trend (daily and weekly) remains down until further notice.     Weekly Pivot Points: WR3 - 1.18835 WR2 - 1.18488 WR1 - 1.18267 Weekly Pivot - 1.18141 WS1 - 1.17920 WS2 - 1.17794 WS3 - 1.17447 Trading Outlook: The Cable is way below 100 and 200 DMA , so the bearish domination is clear and there is no indication of down trend termination or reversal. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame chart last week. The next long term target for bears is seen at the level of 1.1410. Please remember: trend is your friend.   Read more: https://www.instaforex.eu/forex_analysis/289414
Dollar (USD) Waits For The Jackson Hole Symposium Results. Nvidia With Good Earnings

Dollar (USD) Waits For The Jackson Hole Symposium Results. Nvidia With Good Earnings

Saxo Strategy Team Saxo Strategy Team 22.08.2022 11:41
Summary:  The dollar story will face a fresh test this week as the central bankers gather for the Jackson Hole symposium from August 25 to 27. We can expect some more push back on the 2023 easing expectations, and this could also mean some upside in US Treasury yields. July PCE due at the end of the week will likely be side-lined by the event, and any gasoline-driven easing should have little relevance. In Europe, the gas situation remains on watch and the July PMIs will likely spell more caution. China’s LPR cuts this morning have signalled a stronger support to the property markets, but the Covid situation and the power curbs continue to cloud the outlook. Earnings pipeline remains robust, key ones being Palo Alto, Nvidia and Intuit, followed by a few discount retailers like Dollar General and Dollar Tree in the U.S., and China Internet companies, JD.COM, and Meituan.   US dollar awaiting its next signals from the Jackson Hole There is a considerable tension between the market’s forecast for the economy and the resulting expected path of Fed policy for the rest of this year and particularly next year, as the market believes that a cooling economy and inflation will allow the Fed to reverse course and cut rates in a “soft landing” environment (the latter presumably because financial conditions have eased aggressively since June, suggesting that markets are not fearing a hard landing/recession). Some Fed members have tried to push back against the market’s expectations for Fed rate cuts next year it was likely never the Fed’s intention to allow financial conditions to ease so swiftly and deeply as they have in recent weeks. The risks, therefore, point to a Fed that may mount a more determined pushback at the Jackson Hole forum, the Fed’s yearly gathering at Jackson Hole, Wyoming that is often used to air longer term policy guidance. This will have further implications for the US dollar, which is threatening the cycle highs versus sterling, the euro and on the comeback trail against the Japanese yen as well. The US dollar is a barometer of global liquidity, and a continued rise would eventually snuff out the improvement in financial conditions we have seen since the June lows in equity markets, particularly if longer US treasury yields are also unmoored from their recent range and rise back to 3.00% or higher. Europe and UK PMIs may spell further caution The Euro-area flash composite PMI and the UK flash PMI for August are both due to be released on Tuesday. Following a slide in ZEW and Sentix indicators for July, the stage is set for a weaker outcome on the PMIs too. July composite PMI for the Euro-area dipped into contractionary territory at 49.9, while the UK measure held up at 52.1. The surge in gas and electricity prices continue to weigh on GDP growth outlook, with recession likely to hit by the end of the year. More price pressures to come to Asia Singapore's inflation likely nudged higher in July, coming in close proximity to 7% levels from 6.7% y/y in June. While both food and fuel costs continue to create upside pressures on inflation, demand-side pressures are also increasing as the region moves away from virus curbs. House rentals are also running high due to high demand and delayed construction limiting supplies. The Monetary Authority of Singapore has tightened monetary policy but more tightening moves can be expected in H2 even as the growth outlook has been downwardly revised. We also get Japan's Tokyo CPI for August, which is likely to suggest further gains above the Bank of Japan's 2% target. Consensus expectations point toward another higher print of 2.7% y/y for the headline measure and 2.5% y/y on the core measure, signalling inflationary pressures will continue to question the Bank of Japan's resolve on the ultra-easy policy stance. Malaysia’s July inflation is also due at the end of the week, and likely to go above the 4%-mark from 3.4% previously. Softer July US PCE print would not derail Fed’s tightening After a softer CPI report in July, focus will turn to the PCE measure – the version of the CPI that is tracked by the Fed to gauge price pressures. Lower gasoline prices mean that PCE prints could also see some relief, although we still upside pressures to inflation given that energy shortages will likely persist and easing financial conditions mean that inflation could return. We would suggest not to read too much into a softer PCE print this week, as the stickier shelter and services prices mean that the 2% inflation target of the Fed remains unachievable into then next year. This suggests that the aggressive tightening by the Fed will likely continue, despite any likely softness in the PCE this week. Housing markets, Covid-19 cases, and power curbs are key things to watch in China this week The data calendar is light in China this week with only July industrial profits data scheduled to release on Saturday.  This morning, China’s National Interbank Fund Center, based on quotes from banks and under the supervision of the PBoC, fixed the 1-year loan prime rate (“LPR”) 5 bps lower at 3.60% and the 5-year loan prime rates (“LPR”) 15 basis points lower at 4.30%.  The larger reduction in the 5-year LPR, which is the benchmark against which mortgage loan rates in China are set, may signal stronger support from the PBoC to the housing market.  Last Friday the Housing Ministry, the Ministry of Finance, and the PBoC, according to Xinhua News, jointly rolled out a program to make special loans through policy banks to support the delivery of presold residential housing projects which are facing difficulties in completion due to lack of funding.  Investors will monitor closely this week to gauge if there is additional information about the size of the program and if the PBoC will print money to fund it.  As daily locally transmitted new cases of Covid-19 in China persistently surged and stayed above 2,000 since August 12, 2022, the market will watch the development closely and how it will affect the economy.   In addition to the pandemic, power shortage in the Sichuan province and some other areas in China due to unusually high temperature (higher power consumption for air-conditioning) and drought (which affects hydropower output), investors are assessing the impact of the government-imposed power rationing for industrial users on production, in particular the auto industry and consumer electronics industry in the affected areas. Key earnings this week On Monday, investors will scrutinize the results from Palo Alto Networks (PANW:xnas) in the U.S. to gauge the latest business development in the security software industry, which has drawn much attention this year as cybersecurity has become a focus. Intuit (INTU:xnas) is scheduled to report on Tuesday and its results may provide information about the small and medium-sized businesses that the company focuses in it business.  After a disappointing preannouncement earlier in the month, the bar for Nvidia (NVDA:xnas)’s earnings release this Wednesday may be low.  In HK/China, the results from the Postal Savings Bank of China may provide the market with some insights into the state of the Chinese banking system, especially situations outside the top-tier cities. JD.COM (09618:xhkg/JD:xnas) on Tuesday and Meituan (03690:xhkg) on Friday will be the focus of investors monitoring the business trend of eCommerce and delivery platforms in China.  Key economic releases & central bank meetings this week Monday, Aug 22 South Korea: Exports (Aug, first 20 days)Hong Kong: CPI (Jul)   Tuesday, Aug 23 United States: S&P Global US Manufacturing PMI (Aug, preliminary)United States: S&P Global US Services PMI (Aug, preliminary)Eurozone: PMI Manufacturing (Aug)Eurozone: Consumer Confidence (Aug)United Kingdom: PMI Manufacturing (Aug), PMI Services (Aug)Japan: PMI Manufacturing (Aug)Singapore: CPI (Jul) Wednesday, Aug 24 United States: Durable Goods Orders (Jul, preliminary)United States: Pending Home Sales (Jul) Thursday, Aug 25 United States: GDP (Q2, second)United States: Initial Jobless Claims (Aug)United States: Kansas City Fed Manufacturing Activity (Aug)United States: Jackson Hole Symposium (Aug 25 to 27)Germany: IFO Survey (Aug)France: Business Confidence (Aug)South Korea: Bank of Korea Policy Meeting Friday, Aug 26 United States: Personal Income, Personal Spending, PCE Deflator & PCE Core Deflator (Jul)United States: U of Michigan Sentiment Survey (Aug, final)United States: Fed Chair Powell’s speech at the Jackson Hole SymposiumFrance: Consumer Confidence (Aug)Eurozone: M3 (Jul)Italy: Consumer Confidence (Aug)Italy: Economic Sentiment (Aug)Tokyo: Tokyo-area CPI (Aug)Singapore: Industrial Production (Jul) Saturday, Aug 27 China: Industrial Profits (Jul) Key earnings releases this week Monday: Postal Savings Bank of China (01658:xhkg), Palo Alto Networks (PANW:xnas) Tuesday: Medtronic (MDT:xnys), Intuit (INTU:xnas), JD.COM (09618:xhkg/JD:xnas), JD Logistics (02615:xhkg), Kingsoft (03888:xhkg), Kuaishou (01024:xhkg) Wednesday: PetroChina (00857:xhkg), Ping An Insurance (02318:xhkg), Nongfu Spring (09633:xhkg), LONGi Green Energy Technology (601012:xssc), Pinduooduo (PDD:xnas), Nvidia (NVDA:xnas), Salesforce (CRM:xnys), JD Health (06618:xhkg) Thursday: AIA (01299:hkgs), Wulinagye Yibin (000858:xsec), China Life Insurance (02628:xhkg), CNOOC (00883:xhkg), Dollar General (DG:xnys), NIO (09866:xhkg/NIO:xnas) Friday: Meituan (03690:xhkg), China Shenhua (01088:xhkg), Sinopec (00386:xhkg)    Source: Saxo Spotlight: What’s on investors and traders radars this week?
Oil Price Surges Above $91 as Double Bottom Support Holds

All Eyes On Fed Chair Powell's Speech. Latest Natural Gas Developments

Saxo Bank Saxo Bank 22.08.2022 12:52
Summary:  The US dollar wrecking ball is in full swing, taking even USDCNH to new highs for the cycle after another rate cut in China overnight. Longer US treasury yields are also pressuring financial conditions and risk sentiment as the 10-year benchmark yield threatens 3.00% again. The chief event risk for the week will be the Jackson Hole, Wyoming speech from Fed Chair Powell. We also discuss the latest natural gas developments in Europe, speculative positioning in the commodities markets, the long term perspective for tangible vs. intangible stock returns over the last couple of decades, upcoming earnings, & more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: USD and US yields brewing up trouble ahead of Jackson Hole
Construction Activity in Poland Contracts in May: Focus on Building Decline and Infrastructure Investment

USD/CAD Shows Promising Performance Of (USD) US Dollar, Which Could Be Additionally Boosted This Week!

Kenny Fisher Kenny Fisher 22.08.2022 13:31
The Canadian dollar is coming off a rough week, as USD/CAD climbed 1.70%. In today’s European session, USD/CAD is trading at the 1.30 line. Canadian retail sales beats estimate Canadian retail sales jumped 1.1% in June, which was much stronger than the 0.3% forecast. Still, this was lower than the May reading of 2.3%. Core retail sales dropped to 0.8%, just shy of the 0.9% estimate and below the May release of 1.9%. Consumers are feeling the pain from high inflation and rising interest rates and are cutting back on spending. The downtrend is expected to continue, with Stats Canada forecasting a -0.2% reading for headline retail sales in July. The Bank of Canada continues to play catch up with inflation and delivered a mega-hike of 100 basis points in July. Inflation slowed to 7.6% in July, down from 8.1% in June. However, the Bank’s preferred inflation indicator for core inflation rose to 5.5% in July, up from 5.3% in June. It’s too early to tell if inflation has peaked, but the steep rate-tightening cycle has slowed growth. The BoC has slashed its growth forecast for 2022 to 3.5%, down from a previous estimate of 4.2%, stating this was due to the impact of high inflation and tighter conditions on consumption and household spending. The BoC meets on September 7th and is expected to raise rates by 50 basis points. Federal Reserve Chair Powell will host a central banking conference in Jackson Hole this week. It will be another opportunity for the Fed to reiterate its message that inflation is far from being beaten and it has no plans to stop raising rates even if growth has slowed. The markets jumped on the drop in inflation in July, and speculation rose that the Fed might U-turn on its aggressive policy. I expect Powell to engage in some “push-back” and try to convince the market that the Fed is committed to taming inflation and will continue to raise rates to achieve this goal. USD/CAD Technical There is resistance at 1.3080 and 1.3167 USD/CAD has support at 1.2921 and 1.2834 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Cdn. dollar down despite solid retail sales - MarketPulseMarketPulse
Forex: EUR/USD And GBP/USD - US Dollar (USD) Shows Its Teeth

Forex: EUR/USD And GBP/USD - US Dollar (USD) Shows Its Teeth

InstaForex Analysis InstaForex Analysis 22.08.2022 13:42
Relevance up to 11:00 2022-08-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The general atmosphere of global uncertainty, as a rule, contributes to the dollar's growth as the most liquid of safe havens. Today, the US currency index rose to 108.40, demonstrating a confident upward trend. Last week, it jumped 2.3%, showing the best performance since April 2020. The dollar's growth is due to the strengthening of hawkish sentiment in the markets after a number of speeches by Federal Reserve members on Friday. Among the most convincing at the moment is the statement of the president of the St. Louis Federal Reserve, James Bullard. He said he was considering supporting a third consecutive 75 basis point rate hike in September, and added that he was not ready to say that the economy had experienced the worst spike in inflation. The head of the Federal Reserve Bank of Richmond, Thomas Barkin, made a similar position, the emphasis was also placed on accelerated rate hikes. Market players are also waiting for Fed Chairman Jerome Powell to make a hawkish statement in the coming days, in line with recent comments by other central bank officials supporting the dollar. This week, the index may rise above 110.00 if the August preliminary PMIs for the major economies show a further slowdown in economic growth or a reduction in activity. In general, the new week is quite rich in macroeconomic events, so the end of the month and the summer period may be quite volatile. The focus of the traders is the Jackson Hole Symposium. This will be the main event of the week.     The euro briefly crossed the key parity level of $1 again, as the recession in Germany becomes more and more obvious. Natural gas prices are approaching 300 euros per megawatt hour after Gazprom announced the closure of the Nord Stream gas pipeline to Germany for three days of maintenance. In addition, the business activity index is expected to show in August that manufacturing activity in Europe's largest economy contracted at the fastest pace since May 2020, and the services sector contracted the most in 18 months. More optimistic traders believe that the report on the European Central Bank monetary policy meeting on Thursday will sound tough, which may save the euro from a more significant collapse. In July, the ECB surprised the markets and raised interest rates by 50 basis points, as inflation in the bloc continues to exceed record levels. However, Commerzbank believes that the ECB's rhetoric, no matter what it is, will not matter now. Actions are important, not conversations. The interest rate policy should show at least some signs of reducing the lag behind the Fed. Only in this case, the euro will feel some support. The EUR/USD pair is expected to be particularly susceptible to a revision of the Fed's baseline expectations, as the ECB has taken the second strongest possible dovish position among G10 central banks after the Bank of Japan.     EUR/USD, as well as GBP/USD, continue to remain under pressure from the pressing dollar. The euro cannot recover after a sharp drop last week and is trading below the 1.0050 mark. The GBP/USD pair continues to remain under pressure near 1.1800. In the short term, EUR/USD and GBP/USD quotes are likely to stabilize around 1.0000 and 1.1800, respectively. Given the dynamics and the situation inside Europe and in the world, the euro risks breaking down the level of 1.0000. Bears will aim for a further decline in the exchange rate to 0.9950. However, for such a scenario, stability below the 1.0105 level is important. If it is broken up, the pair will take a course for recovery. Support is located at 1.0000, 0.9980, 0.9945. Resistance is at 1.0070, 1.0115, 1.0140. The pound now remains without any internal support. It failed to take advantage of better-than-expected UK economic data and a sharp rise in market expectations for Bank of England interest rates last week.Stronger wage growth, the annual consumer price index, which exceeded 10% on Wednesday, and impressive retail sales data all contributed to the increase in rates. The pound's inability to get at least some support from this movement speaks volumes, more precisely about its weakness. The forecast for GBP/USD does not look favorable, the pair may fall in the near future beyond expectations. The quote risks falling to 1.1500.     Until Powell's speech at the symposium, which will take place on Friday, the markets will be in limbo. Uncertainty is on the side of dollar bulls. A number of US economic indicators will help determine market appetite, each of which is important in its own way. These include the second estimate of GDP for the last quarter and the July value of the preferred US inflation indicator from the Fed. The underlying PCE price index will be carefully studied by investors in search of anything confirming the signs of moderate inflationary pressure recently noted in official figures. Due to the fact that financial markets lowered earlier expectations of a Fed interest rate hike in September to 0.50%, the pound/dollar exchange rate will be at risk this week due to everything that pushes market prices back in favor of a greater tightening by 0.75%.   Read more: https://www.instaforex.eu/forex_analysis/319542
Gold Has A Chance For Further Downside Movement - 30.12.2022

Gold Is At Risk Of Being Liquidated!? Ukraine Shipment Accelerates

Ole Hansen Ole Hansen 22.08.2022 13:47
Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to August 16. A week that potentially saw a cycle peak in US stocks and where the dollar and treasury yields both traded calmly before pushing higher. Commodities meanwhile continued their recent recovery with funds being net buyers of most contracts, the major exceptions being gold and crude oil Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to August 16. A week that potentially saw a cycle peak in US stocks with the S&P 500 reversing lower after reaching a four-month high, and where the dollar and treasury yields both traded calm before pushing higher. Commodities meanwhile continued their recent recovery with all sectors, except precious metals and grains recording gains. Commodities Hedge funds were net buyers for a third week with the total net long across the 24 major commodity futures tracked in this update rising by 14% to reach a seven week high at 988k lots. Some 56% below the recent peak reached in late February before Russia’s attack on Ukraine drove an across-the-board volatility spike which forced funds to reduce their exposure. Since then and up until early July, worries about a global economic slowdown, caused by a succession of rapid rate hikes in order to kill inflation, was one of the key reasons for the slump in speculative length.Returning to last week, the 123k lot increase was split equally between new longs being added and short positions being scaled back, and overall the net increase was broad led by natural gas, sugar, cattle and grains with most of the selling being concentrated in crude oil and gold. Energy: Weeks of crude oil selling continued with the combined net long in WTI and Brent falling by 26k lots to 278k lots, the lowest belief in rising prices since April 2020. Back then the market had only just began recovering the Covid related energy shock which briefly sent prices spiraling lower. While funds continued to sell crude oil in anticipation of an economic slowdown the refined product market was sending another signal with refinery margins on the rise again, partly due surging gas prices making refined alternatives, such as diesel, look cheap. As a result, the net long in ICE gas oil was lifted by 24% to 62k lots while RBOB gasoline and to a lesser extent ULSD also saw net buying. The net short in Henry Hub natural gas futures was cut by 55% as the price jumped by 19%. Metals: Renewed weakness across investment metals triggered a mixed response from traders with gold seeing a small reduction in recently established longs while continued short covering reduced bearish bets in silver, platinum and palladium. With gold resuming its down move after failing to find support above $1800, the metal has been left exposed to long liquidation from funds which in the previous two weeks had bought 63.3k lots. Copper’s small 1% gain on the week supported some additional short covering, but overall the net short has stayed relatively stable around 16k lots for the past six weeks. Agriculture: Speculators were net buyers of grains despite continued price weakness following the latest supply and demand report from the US Department of Agriculture on August 12, and after shipments of grains from Ukraine continued to pick up speed. From a near record high above 800k lots on April 19, the net long across six major crop futures went on to slump by 64% before buyers began dipping their toes back in to the market some three weeks ago. Buying was concentrated in bean oil and corn while the wheat sector remained challenged with the net long in Kansas wheat falling to a 2-year low. The four major softs contract saw strong buying led by sugar after funds flipped their position back to a 13.4k lots net long. The cocoa short was reduced by 10% while the coffee long received a 25% boost. Cotton’s 18% surge during the week helped lift the long by 35% to 44.7k lots.     Forex A mixed week in forex left the speculative dollar long close to unchanged against ten IMM futures and the DXY. Selling of euro saw the net short reach a fresh 2-1/2-year high at 42.8k lots or €5.3 billion equivalent while renewed selling of JPY, despite trading higher during the reporting week, made up most of the increase in dollar length. Against these we saw short covering reduce CHF, GBP and MXN short while CAD net long reached a 14-month high.    What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming   Source: COT: Gold and oil left out as funds return to commodities
Japan's Prime Minister Tested Covid Positive. Gazprom Confirmed Gas Shipment Would Be Stopped!

Japan's Prime Minister Tested Covid Positive. Gazprom Confirmed Gas Shipment Would Be Stopped!

Marc Chandler Marc Chandler 22.08.2022 16:28
Overview: The euro traded below parity for the second time this year and sterling extended last week’s 2.5% slide. While the dollar is higher against nearly all the emerging market currencies, it is more mixed against the majors. The European currencies have suffered the most, except the Norwegian krone. The dollar-bloc and yen are also slightly firmer. The week has begun off with a risk-off bias. Nearly all the large Asia Pacific equity markets were sold. Chinese indices were a notable exception following a cut in the loan prime rates. Europe’s Stoxx 600 is off by around 1.20%, the most in a month. US futures are more than 1% lower. The Asia Pacific yield rose partly in catch-up to the pre-weekend advance in US yields, while today, US and European benchmark 10-year yields are slightly lower. The UK Gilt stands out with a small gain. Gold is being sold for the sixth consecutive session and has approached the (61.8%) retracement of the rally from last month’s low (~$1680) that is found near $1730. October WTI is soft below $90, but still inside the previous session’s range. US natgas is up 2.4% to build on the 1.6% gain seen before the weekend. It could set a new closing high for the year. Gazprom’s announcement of another shutdown of its Nord Stream 1 for maintenance sent the European benchmark up over 15% today. It rose almost 20.3% last week. Iron ore rose for the first time in six sessions, while September copper is giving back most of the gains scored over the past two sessions. September wheat rallied almost 3% before the weekend and is off almost 1% now.  Asia Pacific Following the 10 bp reduction in benchmark one-year Medium-Term Lending Facility Rate at the start of last week, most observers expected Chinese banks to follow-up with a cut in the loan prime rates today  They delivered but in a way that was still surprising. The one-year loan prime rate was shaved by five basis points to 3.65%, not even matching the MLF reduction. On the other hand, the five-year loan prime rate was cut 15 bp to 4.30%. This seems to signal the emphasis on the property market, as mortgages are tied to the five-year rate, while short-term corporate loans are linked to the shorter tenor. The five-year rate was last cut in May and also by 15 bp. Still, these are small moves, and given continued pressures on the property sector, further action is likely, even if not immediately. In addition to the challenges from the property market and the ongoing zero-Covid policy, the extreme weather is a new headwind to the economy. The focus is on Sichuan, one of the most populous provinces and a key hub for manufacturing, especially EV batteries and solar panels. It appears that the aluminum smelters (one million tons of capacity) have been completed halted. The drought is exacerbating a local power shortage. Rainfall along the Yangtze River is nearly half of what is normally expected. Hydropower accounts for a little more than 80% of Sichuan power generation and the output has been halved. Officials have extended the power cuts that were to have ended on August 20 to August 25. Factories in Jiangsu and Chongqing are also facing outages. According to reports, Shanghai's Bund District turned off its light along the waterfront. Japan's Prime Minister Kishida tested positive for Covid over the weekend  He will stay in quarantine until the end of the month. In addition to his physical health, Kishida's political health may become an issue. Support for his government has plunged around 16 percentage points from a month ago to slightly more than 35% according to a Mainchi newspaper poll conducted over the weekend. The drag appears not to be coming from the economy but from the LDP's ties with the Unification Church. Meanwhile, Covid cases remain near record-highs in Japan, with almost 24.8k case found in Tokyo alone yesterday. Others are also wrestling with a surge in Covid cases. Hong Kong's infections reached a new five-month high, for example. The dollar reached nearly JPY137.45 in Tokyo before pulling back to JPY136.70 in early European turnover  It is the fifth session of higher highs and lows for the greenback. The upper Bollinger Band (two standard deviations above the 20-day moving average) is near JPY137.55 today. We suspect the dollar can re-challenge the session high in North America today. The Australian dollar is proving resilient today after plunging 3.45% last week. It is inside the pre-weekend range (~$0.6860-$0.6920). Still, we like it lower. Initial support is now seen around $0.6880, and a break could spur another test on the lows. That pre-weekend low coincides with the (61.8%) retracement of the rally from last month's low (~$0.6680) to the high on August 11 (~$0.7135). The Chinese yuan slumped to new lows for the year today. For the second consecutive session, the dollar gapped higher and pushed through CNY6.84. The PBOC set the dollar's reference rate at CNY6.8198. While this was lower than the CNY6.8213, it is not seen as much as a protest as an at attempt to keep the adjustment orderly. Europe Gazprom gave notice at the end of last week that gas shipments through the Nord Stream 1 pipeline would be stopped for three days (August 31-September 2) for maintenance  The European benchmark rose nearly 20.3% last week and 27% this month. It rose 35.2% last month and 65.5% in June. The year-to-date surge has been almost 380%. The energy shock seems sure to drive Europe into a recession. The flash August PMI out tomorrow is expected to see the composite falling further below the 50 boom/bust level. Bundesbank President Nagel, who will be attending the Jackson Hole symposium at the end of this week recognized the risk of recession but still argued for the ECB rate increases to anchor inflation expectations. The record from last month's ECB meeting will be published on Thursday. There are two keys here. First, is the color than can be gleaned from the threshold for using the new Transmission Protection Instrument. Second, the ECB lifted its forward guidance, which we argue is itself a type of forward guidance. Is there any insight into how it is leaning? The swaps market prices in another 50 bp hike, but a slight chance of a 75 bp move. The German 10-year breakeven (difference between the yield of the inflation linked bond and the conventional security) has been rising since last July and approached 2.50% last week  It has peaked in early May near 3% before dropping to almost 2% by the end of June. It is notable that Italy's 10-year breakeven, which has begun rising again since the third week of July, is almost 25 bp less than Germany. Several European countries, including Germany and Italy, have offered subsidies or VAT tax cut on gasoline that have offset some of the inflation pressures. Nagel, like Fed Chair Powell, BOE Governor Bailey, and BOJ Governor Kuroda place much emphasis on lowering wages to bring inflation down. Yet wages are rising less than inflation, and the cost-of-living squeeze is serious. They take for granted that business are simply passing on rising input costs, including labor costs, but if that were true, corporate earnings would not be rising, which they have. Costs are being passed through. Later this week, the UK regulator will announce the new gas cap for three months starting in October  Some reports warn of as much as an 80% increase. It is behind the Bank of England's warning that CPI could hit 13% then. The UK's wholesale benchmark has soared 47.5% this month after an 83.7% surge last month. Gas prices in the UK have nearly tripled this year. The UK's 10-year breakeven rose by 38 bp last week to 4.29%, a new three-month high. Although the UK economy shrank slightly in Q2 (0.1%), the BOE warned earlier this month that a five-quarter recession will likely begin in the fourth quarter. Unlike the eurozone, the UK's composite PMI has held above the 50 boom/bust level. Still, it is expected to have slowed for the fourth month in the past five when the August preliminary figures are presented tomorrow. The euro and sterling extended their pre-weekend declines  The euro slipped below parity to $0.9990. The multiyear low set last month was near $0.9950. The break of parity came in the early European turnover. Only a recovery of the $1.0050-60 area helps stabilizes the tone. Speculators in the futures market extended their next short euro position in the week through August 16 to a new two-year extreme and this was before the euro's breakdown in the second half of last week. The eurozone's preliminary August composite PMI due tomorrow is expected to show the contraction in output deepened while the market is expecting the Fed's Powell to reinforce a hawkish message on US rates. After falling to almost $1.1790 before the weekend, sterling made a marginal new low today, closer to $1.1780. The two-year low set last month was near $1.1760. The $1.1850-60 area offers an initial cap. Strike activity that hobbled the trains and underground spread to the UK's largest container port, Felixstowe, which handles about half of the country's containers. An eight-day strike began yesterday. Industrial activity is poised to spread, and this is prompting Truss and Sunak who are locked in a leadership challenge, to toughen their rhetoric against labor. America This is a busy week for the US  First, there is supply. Today features $96 bln in bills. Tomorrow sees a $60 bln three-week cash management bill and $44 bln 2-year notes. On Wednesday, the government sell another $22 bln of an existing two-year floating rate note, and $45 bln five-year note. Thursdays sale includes four- and eight-week bills and $37 bln seven-year notes. There are no long maturities being sold until mid-September. The economic data highlights include the preliminary PMI, where the estimate for services is forecast (median in Bloomberg's survey) to recover from the drop below the 50 boom/bust level. In the middle of the week, the preliminary estimate of July durable goods is expected. Shipments, which feed into GDP models is expected to rise by 0.3%. The revision of Q2 GDP the following day tends not to be a `big market movers. Friday is the big day. July merchandise trade and personal income and consumption measures are featured. Like we saw with the CPI, the headline PCE deflator is likely to ease while the core measure proves a bit stickier. Shortly after they are released, Powell addresses the Jackson Hole gathering.  Canada has a light economic diary this week, but Mexico's a bit busier  The highlight for Mexico will be the biweekly CPI on Wednesday. Price pressures are likely to have increased and this will encourage views that Banxico will likely hike by another 75 bp when it meets late next month (September 29). The July trade balance is due at the end of the week. It has been deteriorating sharply since February and likely continued.    The US dollar rose more than 1% against the Canadian dollar over the past three sessions. It edged a little higher today but stopped shy of the CAD1.3035 retracement objective. Initial support is seen near CAD1.2975-80. With sharp opening losses expected for US equities, it may discourage buying of the Canadian dollar in the early North American activity. The greenback is rising against the Mexican peso for the fifth consecutive session. However, it has not taken out the pre-weekend high near MXN20.2670. Still, the next important upside technical target is closer to MXN20.3230, which corresponds to the middle of this month's range. Support is now seen near MXN20.12.    Disclaimer   Source: No Relief for the Euro or Sterling
Euro (EUR) And British Pound (GBP) Losing The Race Against U.S. Dollar (USD)! 1 Year Statistics

Euro (EUR) And British Pound (GBP) Losing The Race Against U.S. Dollar (USD)! 1 Year Statistics

Conotoxia Comments Conotoxia Comments 22.08.2022 16:44
The recent behavior of the euro and the British pound and their potential weakness against the rest of the world's major currencies is beginning to bring concerns about a sustained deterioration in the prospects for these currencies. As Bloomberg commentators note, the behavior of the pound and the euro are worrisome. We have recently seen large shifts in the euro and pound's short-term market interest rates against the U.S. dollar, with a simultaneous weakening of the GBP/USD and EUR/USD exchange rates. Last week was the worst week for the pound in nearly two years, and at the same time, the yield on the UK's 2-year bond rose by 50 basis points. Typically, the opposite happens in developed markets. Expectations of a central bank rate hike and thus an increase in short-term market yields generally strengthen the currency. The collapse in the correlation between the exchange rate and interest rates is usually associated with emerging markets, which may have lost the battle for the credibility of keeping inflation within the inflation target. The energy dependence of the UK and Europe as a whole means that their balance sheets could deteriorate in the near future, while energy commodity inflation shows no signs of abating. Rate hikes in such a situation may not stem the tide of depreciation of the aforementioned currencies, Bloomberg reports. Thus, it seems that the winter months for the EUR and GBP may be a kind of test of the credibility of the economies in the eyes of investors. Their abandonment of investments in the EUR and GBP despite rising interest rates could be potentially worrying. Moreover, it could change the entire scene of the foreign exchange market. In the dollar index, the euro has a weighting of more than 57 percent, while the pound has a weighting of more than 11 percent. Together, these two currencies alone have a weighting of almost 70 percent. Since the beginning of the year, the euro against the U.S. dollar has lost almost 12 percent, and the British pound almost 13 percent. In contrast, since August 2021, the euro has lost almost 15 percent to the dollar, and the British pound less than 14 percent. Of the major currencies, only the Japanese yen has fared worse and has weakened by almost 20 percent against the U.S. dollar over the year. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Pound and euro similar to currencies of emerging markets?
Construction Activity in Poland Contracts in May: Focus on Building Decline and Infrastructure Investment

USD May Be Going Up And Down Today! In The US A Packet Of Crucial Data Is Released Today!

ING Economics ING Economics 23.08.2022 09:29
The hangover from this summer’s Goldilocks/soft landing party is a brutal one. Most asset classes are selling off but history suggests that this can only last so long. At some point, bonds regain their status as safe havens – the question is when 'Sell everything' markets are an unstable equilibrium Current markets are characterised by a sell-off in almost every asset class, regardless of its degree of risk. Phases of negative correlation between bond yields and stock prices are relatively rare, and typically characterise regimes where inflation, rather than growth, expectations drive investors’ behaviour. To illustrate this point, the relentless rise in European energy prices, such as natural gas and baseload electricity, as well as last week’s jump in UK inflation, have put price pressure back on the agenda. This in turn is prompting fears of central bank tightening, and so driving both bond yields up, at the safer end of the risk spectrum, and equity prices down, at the riskier end. In regimes where growth is the primary concern, or when inflation concerns ease, bonds regain their safe-haven characteristics, and their yields correlate positively with riskier alternatives. Bonds lose their safe-haven status when inflation fears dominate Source: Refinitiv, ING   All this is an attempt to make sense of the generalised rout in financial markets, but also to identify where it may end. Risk appetite is understandably in short supply as central banks struggle to get on top of inflation, but there is hope. For one thing, the surge in inflation expected over the coming months is mostly a regional development. Short-term EUR and GBP inflation swaps react to ever higher energy prices but their US counterpart has cratered. In periods of high volatility, it is understandable that the jump in European yields should push their US equivalent higher, but this dynamic has its limits. And indeed, we’ve seen a large divergence between EUR and USD bond yields already. European and US inflation swaps are heading in different directions Source: Refinitiv, ING The soft-landing scenario vs the European scenario The current unstable equilibrium can be resolved in one of two ways. In the Goldilocks/soft landing scenario, tame inflation expectations reassure investors that at least the Federal Reserve will baulk at hiking rates too high thus maintaining hopes of a soft landing. This should ultimately draw a line under the bond market route. In the European scenario, lower growth expectations, which could worsen after today’s PMIs, mean risk assets continue to underperform, thus directing safe-haven flows to bonds. This second scenario has an assumption baked into it – that European central banks will refrain from tightening policy in the midst of a severe recession. This is our view but one of the reasons for assets of all risk flavours selling off is the doubt that persists about their willingness to do so. High inflation and slower growth should flatten European curves Source: Refinitiv, ING   A clear objection to this simplistic view of the world is that markets should be able to have more than one concern at once, but we doubt that this is true if one looks at outright yield levels. This point is relevant for the shape of the curve, however. In places where the growth outlook is the most concerning – Europe – and where inflation looks most likely to spin out of control – Europe again – one would expect the curve to flatten. It is most interesting that the US has just seen a similar flattening move in the past few months, meaning the Treasury curve should re-steepen on a relative basis, while its German counterpart converges to it. Today's events and market view Of today’s releases, August European PMIs will likely be the most important in investors’ minds. Most indices are expected to dip below the 50 lines which should cause another flurry of recession warnings, but it is the manufacturing indices in particular that will be most closely watched. Concerns about energy availability, and prices, should rank high among survey respondents’ concerns and could aggravate the energy-led deterioration in risk sentiment. This will be completed in the afternoon by August consumer sentiment, expected to plumb to new lows. Fabio Panetta is the sole ECB speaker listed for today. As a dove, his inflation warnings may not sound as stark as his colleagues but his endorsement of further tightening would also imply that the runway is clear for more hikes. Finland mandated banks for the sale of a new 5Y bond aiming to raise €3bn. We think this should price today. For UK-focused market participants, CBI orders and prices will add to PMIs in giving an idea of the economic direction of travel. In the US, the Richmond Fed index will add a data point to a mixed set of regional surveys. This will be completed by PMIs, as well as new home sales. Read this article on THINK TagsRates Daily Inflation Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Market Risk Sentiment Adjusts as Investors Eye US Inflation Data

US Equities Falling Down, EURUSD Is On The Topic

Saxo Strategy Team Saxo Strategy Team 23.08.2022 11:01
Summary:  US equities continued to push sharply lower yesterday as the strong US dollar is in focus as EURUSD dropped well below parity yesterday. US Treasury yields are playing their part in pressuring sentiment as the US 10-year yield benchmark rose above 3.00%. The next important event risk is this Friday’s Jackson Hole, Wyoming speech from Fed Chair Powell, as the Fed is expected to remind the market that it remains in full inflation-fighting mode, pushing back against the impression that it may be set to cut rates next year.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures extended their losses yesterday as the US 10-year yield moved above the 3% level and the Fed Funds futures curve moved lower across the whole curve (meaning less rate cuts expected next year). Markets are beginning to second-guess their aggressive bets in July on inflation cooling fast enough to warrant rate cuts next year as the galloping energy crisis makes it difficult for inflation to cool. Tangibles-driven themes such as commodities, logistics, energy storage and financials were the relative winners in yesterday’s session. S&P 500 futures are now in the support zone from before the last leg up that started on 10 August; we see the 4,100 level as the next level to watch on the downside and then the 100-day moving average at 4,085. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hang Seng Index and CSI300 were both down about 0.6%. A Bloomberg report yesterday, citing “people familiar with the matter”, suggested the size of the central bank and other authorities’ support lending program to developers could be as large as RMB 200bn. The reaction of the share prices of Chinese Property developers were mixed, Country Garden (02007:hkg) +3.1%, Longfor (00960:xhkg) -1.4%. Postal Savings Bank of China (01658:xhkg) plunged 5.5% after the Chinese bank reported net profit miss with a 10 bps y/y fall in net interest margin to 2.27% in H1. Gross loans grew 13% y/y in H1 but at a more tepid growth of 3% q/q.  Non-performing loans ratio overall was steady at 0.8% but mortgage NPL ratio climbed by 8 bps to 0.52%. US dollar rally following through The US dollar rally continued apace yesterday, as EURUSD traded well below parity and closed at its lowest level in nearly twenty years yesterday. GBPUSD has teased below 1.1760, its lowest level since a one-off pandemic-outbreak spike in early 2020, while other USD pairs are not yet at extremes of the cycle, including AUDUSD, still well above the sub-0.6700 lows of July, and USDJPY, which has not yet challenged the cycle high north of 139.00. There is clearly a reflexive situation at the moment in the US dollar, risk sentiment and US treasury yields. USDCNH Broad USD strength remains behind the weaker CNH in the USDCNH exchange rate as the CNH continues to rise versus, for example, the EUR, while the CNHJPY exchange rate trades near the important 20.00 area. Any more significant move in this critical exchange rate could quickly steal some of the focus away from the US dollar. The contrast between an easing PBOC (moving once again earlier this week) and tightening central banks nearly everywhere else is stark. The next important level for the pair is 7.00, with the range high of the last decade near 7.20. Crude oil prices (CLU2 & LCOV2) Crude oil prices made a sharp U-turn higher on Monday after the Saudi Energy Minister talked about a potential production cut after saying the futures market has become increasingly disconnected from underlying fundamental developments, a view that we share. His comment supported the market on a day where risk appetite generally took a knock from the stronger dollar and falling equity markets. A global shift from gas to oil, from Europe to Asia, has taken a deeper hold amid gas shortage fears accelerating in the wake of another upcoming maintenance of the Nord Stream 1 pipeline and heatwaves in China. Diesel prices trades higher supported by refinery margins, the so-called crack spread hitting seasonal highs around the world. Gold (XAUUSD) and Silver (XAGUSD) Gold broke below the key $1744 support on Monday before finding support at $1729, the 61.8% retracement of the July to August bounce. Dollar strength and a run higher in US yields weighed on the shine of the yellow metal, which has seen downside pressures since last week after touching the critical $1800-level. Hawkish Fed talk this week could further weigh on the short-term prospects for Gold. Silver also dipped below the key 19 handle, erasing most of the gains seen since late July. German year-ahead power prices hit a fresh record high German year-ahead power prices surged to EUR 700/MWh with Dutch TTF gas prices close to EUR 300/MWh. The surge came on the back of another leg higher in natural gas prices which rose over 13% in Europe amid concerns around the next scheduled 3-day maintenance of the Nord Stream 1 pipeline. It appears that demand destruction remains the most obvious but painful cure right now, along with a longer-term focus on ensuring a broad-based supply of energy from coal, gas, nuclear, solar, hydrogen, and more. US Treasuries (TLT, IEF) US treasury yields rose yesterday, with the 10-year benchmark closing above 3.00% for the first time in over a month yesterday. Rising yields are likely an important driver of weaker risk sentiment after the melt-up in the wake of the late July FOMC meeting, but practically, a move toward the cycle highs from June near 3.50% (in the lead-up to the FOMC meeting on June 16) is needed to seize the spotlight. The behavior of the treasury market in the wake of the Jackson Hole conference speech from fed Chair Powell this Friday is an important next step, particularly if Powell provides strong guidance on the pace or importance of the Fed’s balance sheet tightening (QT). What is going on? EURUSD falls below parity, eyes on 0.9500 The latest concerns on the European energy crisis weighed on the Euro which was seen sipping below parity to the US dollar. Higher US yields and gains in the US dollar also underpinned, taking EURUSD to lows in the low 0.9900’s this morning. The European recession is coming hard and fast, and the PMIs today will likely signal increasing pressure on the region. The next step for the US dollar is the Fed Chair Powell speech this Friday as discussed below. Australia and Japan services PMIs plunged into contraction Australia saw its services PMI drop to 49.6 in August in a flash print, from 50.9 in July. Manufacturing PMI, however, held up at 54.5, just weakening slightly from last month’s 55.7. The spate of rate hikes seen from Reserve Bank of Australia is likely taking its toll on demand and manufacturing. Meanwhile, prices remain elevated amid the persistent supply chain issues, and more rate hikes are still on the cards. Japan’s flash manufacturing PMI for August came in lower at 51.0 from 52.1 previously, nut stayed in expansion territory. Services PMI however plunged into the contraction zone below 50, coming in at 49.2 for a flash August print from 50.3 in July. The fresh COVID wave in Japan, although comes without any broad-based new restrictions, is impeding the services demand and will likely weigh on Q3 GDP growth. Palo Alto outlook remains strong The cyber security company reported last night Q4 revenue and EPS above estimates and Q1 outlook is slightly above estimates while the FY outlook is well above consensus estimates. Q4 networks billing growth was 44% vs est. 25% suggesting demand is accelerating and bolstering our view that the cyber security industry is a high growth and counter-cyclical industry in the years to come. Shares were up 9% in extended trading. Zoom shares were down 8% in extended trading The popular video conferencing software that rose to prominence during the pandemic is lowering its FY outlook relative to previous announcements. The slowdown in their business is due to slower enterprise growth which could be a function of Microsoft and other major technology companies that have entered the enterprise business for video conference. What are we watching next? Europe and UK PMIs may spell further caution. The Euro-area flash composite PMI and the UK flash PMI for August are both due to be released on Tuesday. Following a slide in ZEW and Sentix indicators for July, the stage is set for a weaker outcome on the PMIs too. July composite PMI for the Euro-area dipped into contractionary territory at 49.9, while the UK measure held up at 52.1. The surge in gas and electricity prices continue to weigh on GDP growth outlook, with recession likely to hit by the end of the year. USD and US Treasury yields as Jackson Hole Fed conference is the macro event risk of the week Friday The US dollar and yields are setting risk sentiment on edge as EURUSD has plunged well through parity. US Treasury yields have supported the USD rally with the entire curve lifting over the last couple of weeks and longer yields closing at new one-month highs. The Fed has pushed back consistently against the market’s pricing of a Fed turnaround to easing rates next year with partial success, as expectations for rate cuts have shifted farther out the curve and from higher levels. The next focus is this Friday’s Jackson Hole symposium speech from Fed Chair Powell, who is expected to stay on message and maintain credibility on fighting inflation after the two large 75 basis point hikes at the last two meetings. The Fed’s attitude toward quantitative tightening may be a focus in the speech as well, with the pace of QT supposedly set to pick up in coming weeks to $95B/month. So far, the QT has been slow out of the gates, with the balance sheet currently only some $115B smaller than at its mid-April peak. Earnings to watch Today’s earnings focus is on CATL and JD.com, with especially CATL being important as the world’s largest battery manufacturer to the car industry and thus pivotal for the electrification of the transportation sector. CATL is expected to report revenue growth of 126% y/y in Q2 as EV adoption is accelerating, but key risks ahead are rising input costs across lithium and energy. JD.com is expected to report 3% revenue growth in Q2 as growth is grinding to a halt on very weak consumer confidence in China. Today: CATL, Intuit, Medtronic, JD.com Wednesday: LONGi Green Energy, Royal Bank of Canada, PetroChina, Ping An Insurance Group, Nongfu Spring, Mowi, Nvidia, Salesforce, Pinduoduo, Snowflake, Autodesk Thursday: South32, Toronto-Dominion Bank, Fortum, Delivery Hero, AIA Group, China Life Insurance, CNOOC, CRH, Dollar General, Vmware, Marvell Technology, Workday, Dollar Tree, Dell Technologies, NIO Friday: Meituan, China Shenhua Energy, China Petroleum & Chemical Economic calendar highlights for today (times GMT) 0715-0800 – Eurozone Aug. Flash Manufacturing and Services PMI 0830 – UK Aug. Flash Manufacturing and Services PMI 1000 – UK Aug. CBI Trends in Total Orders and Selling Prices 1100 – ECB's Panetta to speak 1345 – US Aug. Flash Manufacturing and Services PMI 1400 – US Aug. Richmond Fed Manufacturing 1400 – Eurozone Aug. Flash Consumer Confidence 1400 – US Jul. New Home Sales 2300 – US Fed’s Kashkari (non-voter) to speak  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 23, 2022
Watch Ou! US Dollar (USD) May Be Starting Its Rocket Engines Soon! Markets Wondering If It's Going To Be 50 or 70bp Rate Hike

Watch Out! US Dollar (USD) May Be Starting Its Rocket Engines Soon! Markets Wondering If It's Going To Be 50 or 70bp Rate Hike

Matthew Ryan Matthew Ryan 23.08.2022 11:21
US bond yields have now retraced the fall that followed the positive inflation report from the week prior. Federal Reserve officials talked up the prospects of another jumbo interest rate hike in September, and markets are now equally split between a 50 basis point and a repeat of the previous meeting 75bp increase. Risk assets gave up some of their recent gains, and understandably the dollar bounced back strongly against every major peer worldwide. In this context, the Chinese yuan held up relatively well in spite of recent weakness in the Chinese economy, rising against every G10 currency, save the US dollar.   This week, the critical PMI advance indicators of business activity will be released in the US, the UK and Eurozone. Current levels mostly hover around the 50 line that separates expansion from contraction, so these numbers take on added importance. At the end of the week, markets await headlines and speeches from the annual meeting of the world’s central bankers in Jacksonhole, Wyoming. In particular, Chair Powell’s speech on Friday is expected to offer some clarity on the speed of coming hikes and, just as important, his expectations on how high rates will have to go before inflation is brought back under control. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 22/08/2022 GBP Bank of England policy makers received an unpleasant jolt last week, in the form of a significant upward surprise in the inflation numbers for July. Both the headline and the core rate soared to fresh record highs, the former now in double digits and expected to peak at 13% in the autumn. Markets rushed to price in more hikes from the Bank of England, but the threat of stagflation meant that sterling failed to benefit and fell against both the dollar and the euro. Figure 2: UK Inflation Rate (2016 – 2022)   Source: Refinitiv Datastream Date: 22/08/2022 The PMIs in the UK have held up better than in the Eurozone, suggesting a more resilient economy than is priced in at current pound levels, but this view will be tested this week when the advance August numbers are released on Tuesday. EUR Last week was a typically sluggish summer one in the Eurozone. With little macroeconomic or policy news, the euro mostly traded down as US rates soared and sentiment towards the Eurozone economy deteriorated on soaring energy prices. While macroeconomic news out of the bloc has held up reasonably well so far under the circumstances, the jump in energy prices continues to worsen the outlook, and has helped drive EUR/USD back through parity levels this morning. As elsewhere, the PMI advance indices on Tuesday will be key. However, given how far behind the curve the ECB is with respect to inflation, we do not think that it can afford to let up on policy normalisation, even if a mild recession materialises. USD Strong second tier data and a determined push back form Fed officials against any notion of a ‘dovish pivot’ drove US rates higher last week, and this in turn boosted the dollar. Last week’s FOMC meeting minutes were actually initially seen as dovish, although investors appeared to have a change of heart as focus shifted to the Fed’s comments on inflation, which indicated members saw no let up in price pressures. This week, the PMIs are released on Tuesday, as elsewhere. However, they typically make less of a splash in the US. Markets will look to the PCE inflation report later in the week to corroborate the good news from the CPI report. Regardless, it is unlikely that the Fed will be deterred from its hiking campaign and the main question for Chair POwell atr Jackson Hole will be whether 50 or 75 bp are coming in September. CHF The Swiss franc has rallied to fresh highs against the euro in the past few trading sessions, with the EUR/CHF pair currently trading below the levels seen following the removal of the trading peg in early-2015. Broad euro weakness has dragged the pair lower so far this morning, although the franc is also benefiting from rising risk aversion, as markets brace for a slowdown in global growth between now and year end. Investors continue to favour the franc over its fellow safe-haven, the Japanese yen, in light of the policy divergence between the SNB and Bank of Japan. Whether this outperformance continues may depend on SNB interventions. The bank actually appears to have been rather active in selling francs in the past few weeks, with total sight deposits, a proxy for interventions, increasing in every week since mid-July. This may be an indication that the EUR/CHF pair may be approaching a near-term low. There will be no major economic data releases out of Switzerland this week, so expect the franc to be driven largely by goings on elsewhere. AUD The Australian dollar was one of the worst performing currencies in the G10 last week, falling by almost 3% against the US dollar. Fears of an economic slowdown and a weaker than expected domestic jobs report hurt the Australian currency. While the unemployment rate fell to a more than 40-year low of 3.4% in July, net employment dropped by 40,900, contrary to what was expected (+25k). This mixed report raises question marks about the magnitude of the next interest rate hike from the Reserve Bank of Australia. Prior to the meeting, markets were pricing in another 50 basis point move in September, although we think that this is now in serious doubt. Markets also appear torn, with swaps indicating a 50/50 chance of such a move. Figure 3: Australia Net Employment Change(2017 – 2022) Source: Refinitiv Datastream Date: 22/08/2022 Advanced PMIs for August will be published tomorrow, and are expected to show an improvement on July’s data. Aside from that, AUD will be driven by market risk sentiment and expectations about rate hikes. CAD The Canadian dollar depreciated against the US dollar last week, although the sell-off was smaller than that of its G10 peers. In line with expectations, Canada’s inflation rate fell to 7.6% in July, after reaching a near four-decade high in June, mainly due to a fall in gasoline prices. However, core inflation surprised on the upside and remains at very high levels, suggesting that price pressures have broadened across more components. We believe that the Bank of Canada will continue its aggressive monetary tightening cycle, with a decent chance of a 75 basis point move at the next meeting in September. Markets are currency pricing in around a 50% chance of another bumper move, having seen very little chance of one this time last week. With no major domestic data to be released this week in Canada, we think that oil prices and market sentiment will be the main drivers of the Canadian dollar this week. CNY Somewhat uncharacteristically, the yuan underperformed most of its Asia counterparts last week, with the currency slumping to a near two-year low on the broadly stronger US dollar. A rather underwhelming set of macroeconomic figures released at the beginning of last week weighed on the yuan. Industrial production, fixed asset investment and retail sales data for July all fell short of expectations, as the prolonged COVID-19 restrictions in the country continue to worsen the growth outlook and sour sentiment towards Chinese assets. The ongoing property crisis in China, and policy easing from the People’s Bank of China, are also far from helping the currency’s cause. The PBoC trimmed its one-year loan prime rate, albeit only by 5 basis points, to 3.65% on Monday, while lowering its five-year lending rate by 15 basis points to 4.3%. As long as Chinese authorities continue to staunchly stick by their zero-covid approach, additional rate cuts and sluggish domestic data appear likely. Both present clear downside risks to the yuan in the coming months.Economic Calendar (22/08/2022 – 26/08/2022) To stay up to date with our publications, please choose one of the below: 📩 Click here to receive the latest market updates👉 Our LinkedIn page for the latest news✍️ Our Blog page for other FX market reports 🔊 Stay up to date with our podcast FXTalk Source: Dollar bounces on higher yield as euro breaks below parity | Ebury UK
The Euro To US Dollar (EUR/USD) Pair Moved Without Panic But Now No One Is Thinking About Buying The Euro

People Are Buying US Dollar So Much That EUR/USD Is Falling Off A Cliff!

InstaForex Analysis InstaForex Analysis 23.08.2022 11:40
Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The EUR/USD pair had broken below the parity level and made a new swing low at the level of 0.9916 (at the time of writing the analysis). The nearest technical resistance is located at the level of 0.9955 and needs to be clearly violated for a solid bounce. Please notice the weak and negative momentum on the H4 time frame chart supports the short-term bearish outlook for EUR with a potential target seen at the level of 0.9900 or even lower. The US Dollar is still being bought all across the board, so the bearish pressure on EUR is still strong.   Weekly Pivot Points: WR3 - 1.0089 WR2 - 1.0057 WR1 - 1.0035 Weekly Pivot - 1.0025 WS1 - 1.0003 WS2 - 0.9992 WS3 - 0.09960 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue lower towards the level or 0.9900 and below. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. Source: Forex Analysis & Reviews: Technical Analysis of EUR/USD for August 23, 2022
Shocking Forex Forecast! Check How EUR/USD, USD/JPY And GBP/USD May Develop In The Neatr Future!

Shocking Forex Forecast! Check How EUR/USD, USD/JPY And GBP/USD May Develop In The Neatr Future!

ING Economics ING Economics 23.08.2022 11:37
The dollar has corrected around 3% from its highs seen last month. This has prompted a few questions about whether the dollar has peaked? Many trading partners would hope that to be the case, but the reality is that the Fed is likely to stay on track with its tightening. We think the dollar is more likely to retest its highs than correct much lower. Driving this view has been consistent rhetoric from the Fed that it will not be blown off target by some softer activity or price data. In fact, it now looks like US activity is accelerating again as lower gasoline prices leave more dollars in the pockets of US consumers. The 2023 US recession narrative looks a tough one to sell near term. And rising energy prices should continue to drive a wedge between the exporters of North America and the importers of Europe, meaning a much greater conviction of a recession in Europe. The ECB’s second 50bp rate hike on 8 September may well conclude its tightening cycle. Rate spreads and the energy income shock make it a very tough environment for the euro. EUR/USD should therefore drift near parity for much of 2H22. Elsewhere in Europe, the Swiss franc continues to be guided higher by the Swiss National Bank. Sterling remains vulnerable on recession fears. Beyond some substantial fiscal stimulus, sterling’s best hope is that the Bank of England delivers on most of the aggressive tightening currently priced into markets. Surging gas prices also spell trouble for the CEE4 currencies. The Polish zloty in particular looks unlikely to hold recent gains. Emerging market currencies have enjoyed a mini-renaissance over the last month. But a difficult external environment makes it hard to sustain those rallies until the dollar turns.     EUR/USD Late cycle economies will keep the dollar bid Current spot: 1.0241 • Defining business cycles has been a hazardous job over recent years, but it looks pretty clear that the US is a late-cycle economy with high inflation and low growth. This stage of the cycle is synonymous with inverted yield curves – which we have today. The dollar typically stays bid in this part of the cycle until convictions grow that the Fed will ease, and US 2-year yields start dropping. That is probably a story for 1Q23 and not today. • We look for another 125bp of Fed hikes this year and just 50bp from the ECB (in Sep.). Risks look skewed to even higher US rates. • With Europe entering recession on the back of a looming energy crisis this winter, EUR/USD can stay near the lows for 2H22. USD/JPY Staying supported Current spot: 133.44 • USD/JPY has found some good support under 132 and should stay reasonably supported for 2H22. Expect surveys of the Japanese buy-side in September to show greater allocations towards unhedged foreign bond purchases. US Treasury yields pay 250bp+ over JGBs and it is too expensive to hedge those US bond investments – now 3% p.a. through the 3m JPY forwards. • The Fed Jackson Hole of Aug 25-27th looks a dollar positive event risk. It is far too early for the Fed to signal the all-clear on inflation. The bigger risk is that 2023 Fed easing is priced out. • Like the euro, the yen is suffering from the negative terms of trade shock. These indices are at the worst levels of the year. GBP/USD Slip-sliding away Current spot: 1.2098 • GBP/USD remains vulnerable on the back of continuing dollar strength and the UK economy trapped by slowing growth and a hawkish Bank of England. The only good news we have seen for sterling recently is that the Bank of Israel plans to double the pound’s weighting in its FX reserve portfolio! • A tricky environment for risk assets in 2H22 – slowing growth, tighter monetary conditions – suggests the growth sensitive pound will struggle. • The only thing helping it should be the BoE remaining hawkish all year – lifting rates 50bp to 2.25% in September – and at least  making sterling an expensive sell. No reprieve for Cable this year. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Long-Term Rates Diverge Amid Policy Divergence and Economic Signals

Forex: GBP/USD Is Below The Support Line. Downtrend

InstaForex Analysis InstaForex Analysis 23.08.2022 12:07
Company does not offer investment advice and the analysis performed does not guarantee results.The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The GBP/USD pair had broken below the trend line support around the level of 1.1916 and made a new swing low at the level of 1.1743 despite the extremely oversold market conditions on the H4 time frame. A bounce should be expected towards the intraday technical resistance seen at 1.1760. The nearest technical resistance is seen at the level of 1.1890. The larger time frame trend (daily and weekly) remains down until further notice. Weekly Pivot Points: WR3 - 1.18835 WR2 - 1.18488 WR1 - 1.18267 Weekly Pivot - 1.18141 WS1 - 1.17920 WS2 - 1.17794 WS3 - 1.17447 Trading Outlook: The Cable is way below 100 and 200 DMA , so the bearish domination is clear and there is no indication of down trend termination or reversal. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame chart last week. The next long term target for bears is seen at the level of 1.1410. Please remember: trend is your friend. Source: Forex Analysis & Reviews: Technical Analysis of GBP/USD for August 23, 2022
Back To The Future: EUR/USD Is Almost On 2002 Level!

Back To The Future: EUR/USD Is Almost On 2002 Level!

Conotoxia Comments Conotoxia Comments 23.08.2022 12:33
Selling pressure on the euro may lead the exchange rate of the main currency pair EUR/USD below the parity level. As a result, in the fourth week of August 2022, we may see levels from the end of 2002. The most significant risk factor for the euro appears to be fear of recession. These may increase with rising electricity and natural gas prices. The consequent deepening of the energy crisis and the dim prospects for its resolution may negatively affect the European currency in the eyes of global investors. The aforementioned natural gas prices seem to be approaching the record level of EUR 300 per megawatt hour. This could be a consequence of Russian energy giant Gazprom's announcement to shut down gas flow through Nord Stream 1 to Germany due to maintenance work at the end of August. Earlier, due to turbine problems, the gas flow was reduced to 20 percent. Electricity prices for next year's contracts are also breaking records. They have risen from €50 to €700 in just a few months. The eurozone's economic woes seem to be confirmed by macroeconomic data. The August Global S&P PMI showed that business activity in the eurozone declined for the second month in a row, albeit less than expected. The S&P Global Eurozone Composite PMI fell to 49.2 in August from 49.9 in July, above market expectations of 49, the preliminary reading showed. The latest data showed a second consecutive decline in business activity across the eurozone after a 16-month period of growth. The overall decline in output was again driven by a contraction in the manufacturing sector, where output fell for the third consecutive month, according to the published data. Germany posted its sharpest drop in output since June 2020, while activity in France fell for the first time in a year and a half. Investors are now awaiting the hawkish tone of Thursday's minutes from the European Central Bank's monetary policy meeting, as inflation in the eurozone still appears to be hitting record highs. Recall that the ECB surprised in July by raising interest rates by 50 basis points. The market can now expect two more increases of 50 basis points each at the September and October meetings. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.     Source: Euro below parity again. Black clouds over the European economy
Mexican Peso - Only One Of Its Kind. Weak Euro And Unstable Aussie

Mexican Peso - Only One Of Its Kind. Weak Euro And Unstable Aussie

Marc Chandler Marc Chandler 23.08.2022 12:55
Overview:  The poor eurozone PMI underscores likely recession and weighs on the single currency, which was sold to a new 20-year low.  Rather than a "Turn Around Tuesday"  a broadly consolidative session is unfolding.  Asian and European equities are weaker, while US futures are positive but little changed.  Benchmark 10-year bond yield are mostly firmer and the premium offered by Europe's periphery is edging higher.  The US 10-year is little changed near 3.02%.  Most non-European major currencies are firmer, with the exception of the Australian dollar.  The euro struggles to sustain even the most modest of upticks.  Emerging market currencies are mostly lower.  The Mexican peso is an notable exception.  It is the strongest in the EM space today, followed by the Indonesian rupiah, where the central bank hiked its key rate by 25 bp.  Gold's early gains are being reversed, but it is within yesterday's range.  October WTI has extended yesterday's recovery, sparked by Saudi Arabia's threat to cut output.  US natgas is higher for the third session and is up nearly 8% in this run.  Europe's natgas benchmark is about 2% lower after yesterday's 12.3% spike. Iron ore is up a second day, while September copper has recouped yesterday's minor (~0.35%) loss. September wheat is advancing for a third session for a cumulative gain of 7%.   Asia Pacific Japan's recovery is faltering, and the government is already cobbling together a supplemental spending bill.  While the preliminary manufacturing PMI show a slowing expansion (51 vs. 52.1), the service PMI in contracting (49.2 vs. 50.3) for the first time since March.  The composite was dragged lower and the 48.9 reading (from 50.2) is consistent with a contraction in output. Australia's preliminary August PMI was similar as Japan's.  Slower manufacturing output (54.5 from 55.7), while the service sector contracted (49.6 from 50.9).  The composite slipped below the 50 boom/bust level to 49.8 from 51.1.  It is the fourth consecutive decline in the composite and the first sub-50 reading since January.  The Reserve Bank of Australia meets on September 6.  The futures market is not convinced that the poor PMI stands in the way of another 50 bp hike. In fact, the cash rate futures show the greatest chance (70%) of a half-point move this month, up from about 62.5% yesterday.   The dollar firmed to a marginal news high for the month against the yen today near JPY137.70.  Yesterday's high was about JPY137.65.  Today's session, so far, has been one of consolidation.  Initial support is seen around JPY137.00.  Only a close below JPY136.70 would challenge the bullish dollar posture.  Yesterday's Australian dollar bounce where it took out the pre-weekend high, ostensibly on the China's rate cuts was a bull trap.  It dropped almost 1% to nearly $0.6860 before finding support. It traded higher, even after the poor PMI and met sellers at $0.6900, who drove it to a marginal new low (~$0.6855) since July 19.  In choppy trading it is firmer in Europe.  A move above $0.6900 would be helpful, but a push above $0.6930 would help lift the technical tone.  Meanwhile,  the yuan's adjustment lower continued and the Chinese currency fell to new two-year lows against the dollar.  The greenback reached CNY6.8660 before pulling back and is hovering around little changed levels around CNY6.8485 near midday in Europe.  The PBOC's dollar fix showed no sign of a protest.  It was set at CNY6.8523, a little above the Bloomberg survey median of CNY6.8511.   Europe The flash EMU PMI was poor.  The manufacturing sector was also unchanged at 49.7 (from 49.8), while the service sector is barely expanding (50.2 vs. 51.2).  The composite showed output falling further (49.2 vs. 49.9).  It is the lowest the composite has been since early last year. All three measures in Germany remained below 50, thought the manufacturing sector, a little less so (49.8 vs 49.3).  While the German composite had fallen below 50 in July (and sank further in August, 47.6 vs. 48.1), the French composite slipped below 50 (49.8) for the first time since February 2021.   The UK flash PMI was softer but the mixed.  The manufacturing PMI sunk to 46.0 from 52.1, well below expectations, and the magnitude of the drop was notable, especially after having fallen for the previous three months.  The services PMI was little changed at 52.5 from 52.6, and above expectations.  The composite eased to 50.9 from 52.1.  It is the lowest reading since early last year.  Here too the market does not seem dissuaded from its rate hike expectations.  The swaps market is fully pricing in a 50 bp hike at the mid-September BOE meeting and about a 1-in-3 chance of a 75 bp move instead.  By that time, a new Tory leader and Prime Minister will likely be providing some additional fiscal support.  The Dutch natural gas European benchmark (one-month forward) has doubled here in Q3 after more than doubling in the first half.  By some estimates, it has reached the equivalent of $500 a barrel for crude oil.  The energy crisis, which is being exacerbated by a severe drought, has eclipsed Covid as the most pressing European challenge.  It is a blow that makes a recession practically unavoidable and contribute to the pressure on the euro, which fell to new 20-year lows.  The one-year forward of German electricity rose by more than a quarter yesterday to a record 710 euros for a megawatt hour before pulling back, which is almost twice as much it was at the end of July.  In France, a similar contract rose 16% to 840 euros, more than 2/3 higher than at the end of last month. French nuclear reactors were operating at 43% of their capacity yesterday, down from 48% before the weekend.  There was an unplanned outage at one plant and another two were halted for scheduled maintenance.   German Chancellor Scholz was in Canada yesterday trying to secure supplies.  His government is still debating about extending the life of three nuclear plants that are scheduled to shutdown at the end of the year.  Economic Minister Habeck noted that the extending the deadline would save, at most, 2% of German gas consumption.  However, he did leave open the possibility that the Isar 2 plant in Bavaria might be extended.   The low water level having limited the energy shipments on the Rhine.  Bavaria produces the most solar power among German states, it has a restrictive wind turbine licensing regime.  Habeck was also critical of Bavaria for neglecting other sources of energy generation and blocked the expansion of power transmission lines to bring wind energy from northern Germany to its industry.  There is fear that the Gazprom's three-day shutdown of the Nord Stream 1 pipelines August 31 is a prelude to and extended stoppage.   After hovering tightly below $0.9950 for most of the Asian session, the poor PMI seemed to drive the euro to the session low near $0.9900 before the single currency recovered back to $0.9950. A 600 mln euro option there expires today.  Thursday and Friday see a combined 3 bln euro in options at $1.0 expire, while on Friday, 2 bln euros of options at $0.9850 roll off.  The bears are in the driver’s seat.  Sterling was sold to a new low as well, dipped briefly through $1.1720.  In the five sessions through today, sterling has fallen nearly 4.25-cents.  It has met the measuring objective of the double top pattern that had unfold in the first half of the month.  The $1.1780-$1.1825 band offers the nearby cap.   America The Fed funds futures market sees the greatest chance of a 75 bp hike next month since the bounce after the surprisingly strong employment report on August 5.  Yesterday's increase was third in a row and the most since that jobs report.  The two-year note yield jumped a little more than 10 bp to 3.34%, the upper end of where it has traded for two months. The only data out yesterday was the Chicago Fed's national activity report, which blew away market expectations by rising to 0.27 instead falling to -.25. However, that report was for July and today's the preliminary August PMI is due.  Moreover, markets typically do not put much emphasis on this report.  Instead, it seems the market is positioning ahead of Powell's Jackson Hole speech.   The US also reports new homes sales.  The July housing starts and existing home sales were weaker than expected and the risk to the Blomberg survey median for a 2.5% fall is on the downside.  That said, it is clear that slower housing market activity is desirable by the Federal Reserve as part of its effort to tighten financial conditions.   The EU seems to think Iran's response to its proposal was "reasonable" seems to add pressure on the US.  However, Saudi Arabia's oil minister made an unexpected move.  Claiming that the lack of liquidity and extreme volatility in the oil market was diverging from "fundamentals" and that OPEC+ may be forced to respond.  In this context, the "response" would be to reduce supply.  Although the oil minister did not link his comments to the possibility of Iranian oil returning to the market, this seemed to be the subtext, and the oil market responded accordingly.  October WTI, which had been off a little more than 4% yesterday recovered nearly fully in late dealings.  From almost $86.25, October WTI settled near $90.35.  It has traded above $92.00 today for the first time since August 12.  The US dollar made a marginal new high for the month against the Canadian dollar earlier today, just shy of CAD1.3065.  However, a consolidative tone has emerged.  Initial support is seen in the CAD1.2990-CAD1.3000 area.  A break below CAD1.2965 would lift the Loonie's tone and would likely coincide with stronger equity market gains.  The S&P 500 and NASDAQ gapped lower yesterday, and the gaps appears on the weekly charts, and leave bearish island tops behind. Those gaps are important from technical perspective and are either breakaway gaps or measuring gaps, and in either case bearish.  That would seem to warn about the downside risks to the Canadian dollar, which is particularly sensitive to the risk environment.  The Mexican peso is faring better.  The US dollar did not take out the pre-weekend high (~MXN20.2670) yesterday and is set to start the North American session at a three-day low.  Around MXN20.04, the US dollar retraces 50% of what it gained since the August 15 low (~MXN19.8125).  The next corrective target is around MXN19.9860.       Disclaimer Source: Surging Energy Prices Pushing Europe Closer to Recession
GBP Inflation Surprise: Pound Faces Downward Pressure as Rate Hike Expectations Shift

Forex: Market Is Dependent On Fed's Shortly Message

John Hardy John Hardy 23.08.2022 13:45
Summary:  EURUSD swooned well through parity yesterday, posting a new low this morning before surprisingly resilient August preliminary PMIs helped to stabilize risk sentiment in Europe this morning. After a powerful strengthening move for the US dollar on a repricing of the US yield curve, we may risk a bit of consolidation and cat-and-mouse until the Friday main event(s) of the US PCE inflation release and Fed Chair Powell speech. FX Trading focus: Treading water until Friday?  Seeing some signs of consolidation in recent trends in places this morning as we see EURSEK rolling over after its steady recent ascent and EURCHF jerking back higher from new cycle lows on a stronger than expected set of preliminary August PMI’s, with Germany’s manufacturing survey at a solid 49.8, a nudge higher from the July level and far better than the 48.0 expected. The Germany Services survey was weaker than expected at 48.2 but is not the focus. For the Eurozone-wide survey, the manufacturing survey was likewise steady at 49.7 vs. 49.8 in July and vs. 49.0 expected. The resilient data didn’t suit the market action as EURUSD had plunged to new lows below parity yesterday and was posting fresh lows this morning just ahead of the releases. Given the scale and speed of the slide from above 1.0300 in EURUSD just over a week ago, it’s tough to argue that the USD will continue to move in a straight move higher as we await Fed Chair Powell’s speech at Jackson Hole. The title of the Jackson Hole conference is Reassessing Constraints on the Economy and Policy, which between the lines suggests the Fed is set to assess the reasons why it was so wrong and why it policy has little ability to affect the (a slightly more cryptic and academic version of the BoE’s recent throwing of the hands in the air at its own irrelevance, in other words). Chart: GBPUSDA rather steep pace of declines for GBPUSD since the pair peaked out above 1.2250 in the wake of the late July FOMC meeting and then on the retest higher after the slightly softer US July CPI release on August 10. Cable managed to test new lows for the cycle this morning below 1.0760 before rebounding slightly and UK rates are off to the races again to new highs for the cycle after a firmer than expected preliminary August Services PMI suggesting moderate expansion. If the US dollar treads water for a couple of sessions ahead of Jackson Hole, there may be some room for the price action to consolidate – certainly a tough area to initiate a USD long position here below 1.1800 in risk/reward terms. Eventually looking for the pair to challenge lower still until either Europe finds some sudden source of relief on its energy emergency or the market begins to price the Fed to ease again (too early for the latter). Source: Saxo Group Elsewhere, the USDCNH rally extended to new highs this morning as the pair trades passively to USD direction. USDJPY has not yest posted new highs for the cycle as the comeback in longer US yields has been a relatively sluggish affair and we are still near 50 basis points below the cycle high in the US 10-year treasury yield benchmark of 3.50%, a challenge of which might be required to set USDJPY on tilt for 140+ and an eventual showdown over the BoJ’s commitment to its yield-curve-control policy – but keeping an eye out nonetheless as the market absorbs whatever message the Fed delivers this week. Table: FX Board of G10 and CNH trend evolution and strength.The USD positive reading intensifying here – mostly at the expense of EUR, GBP and SEK, but keeping an eye on the traditionally risk-correlated FX if sentiment continues to dive. Note the NOK riding above the fray – one of its most remarkable positive divergences from a downbeat set of European complexes and obviously driven by record gas prices. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.EURGBP flipped to positive on Friday, only to turn back lower yesterday on a sharp reversal – status looks confusing there. Elsewhere, watching AUDCAD for downside follow through while also watching whether USDCAD can break notably above the range or if it remains in the ugly choppy, rising channel of the last 12+ months (the closing price yesterday was the second-highest since late 2020). Look at NOKSEK at a reading of +7.1 – strongest trend within G10. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1100 – ECB's Panetta to speak 1345 – US Aug. Flash Manufacturing and Services PMI 1400 – US Aug. Richmond Fed Manufacturing 1400 – Eurozone Aug. Flash Consumer Confidence 1400 – US Jul. New Home Sales 2300 – US Fed’s Kashkari (non-voter) to speak   Source: FX Update: Choppy waters until Jackson Hole on Friday?
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

(EUR) Euro Didn't Changed Its Mind As German PMI Leaves Us With Mixed Feelings

Kenny Fisher Kenny Fisher 23.08.2022 14:19
EUR/USD has stabilized after a rough start to the week. In the European session, EUR/USD is trading at 0.9931, down 0.10% on the day and its lowest level since November 2002. After weeks in retreat, the US dollar has rebounded and is showing broad strength. The euro has taken it on the chin, falling 2.12% last week and down another 1.07% this week. It looks like the euro has more room to fall and we could see EUR/USD gazing up at the parity line for some time to come. German business activity falls German PMIs for August were mixed and the euro shrugged in response. Services PMI fell to 48.2, down from 49.7. This missed the estimate of 49.0. Manufacturing was slightly better, rising from 49.3 to 49.8 and beating the forecast of 48.2. The readings are worrying, as they indicate that both manufacturing and services have been in contraction for two straight months, with readings below the neutral level of 50.0. The economic outlook for the eurozone’s number one economy remains bleak, as high inflation and rising interest rates threaten to tip the economy into recession. Unsurprisingly, confidence levels amongst manufacturers and businesses remain low. Germany’s labour market has been a bright spot in the economy, but there is room for concern here too. Employment in the private sector rose in August, but the pace of job creation fell to its lowest since March 2021. With the economy in a downturn, the downside risk to job creation will likely increase. The markets are anxiously awaiting Fed Chair Powell’s speech at Jackson Hole on Friday, but there are some key US releases that could have an impact on the direction of the US dollar. New Home Sales will be released later today, with a forecast of 575 thousand for July, following 590 thousand in June. Durable goods orders will be published on Wednesday, with the headline reading expected to fall to 0.6% in July, down sharply from 2.0% in June. With the Federal Reserve in data-dependent mode, investors are keeping a close eye on key US events and we could see some movement in the currency markets following these releases. EUR/USD Technical 0.9959 has switched to resistance. Above, there is resistance at 1.0113 There is support at 0.9877 and 0.9723 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro drops to new 20-year low - MarketPulseMarketPulse
EUR/USD Pair Has Potential For The Downside Movement Today

ING Economics Expects ECB Will Hike The Interest Rate By 0.5% In September

ING Economics ING Economics 23.08.2022 15:14
Supply shocks continue to plague the eurozone economy, causing inflation to show few signs of abating in the short run. Current natural gas prices make an inflation peak in double digits realistic, and there’s little the European Central Bank can do about it Food prices across the eurozone continue to be a problem   With the US inflation rate easing substantially in July, there have been optimistic notes about a peak in inflation being reached. Month-on-month, inflation was actually 0%, which has encouraged people to think that the worst may be behind them and that a soft landing is possible. We don’t want to pre-empt our colleague James Knightley’s analysis on whether or not US inflation has peaked, but we are very convinced that eurozone inflation is still far off such a turning point. Differences between US and eurozone inflation are still significant. While the US has seen headline inflation fall, it has continued to increase in the eurozone. Month-on-month, July saw stagnation in inflation in the US, while in the eurozone it was still 0.6%. This is only one difference. In this note, we break down the most recent inflation developments in the eurozone and look ahead at why double-digit inflation is a realistic prospect for the months ahead. Eurozone inflation is just under 9% at the moment Source: Eurostat, ING Research Monthly developments in eurozone inflation are moderate, but remain well above target In times when inflation is extremely volatile, it’s useful to look at the month-on-month developments instead of year-on-year as we usually do. Eurostat does not provide seasonally-adjusted data to allow for monthly comparisons, so we use our own seasonal factors to estimate the most recent developments. Inflation declined month-on-month in June and July, well down from the March peak when the war in Ukraine started. At 0.6% month-on-month, this still amounts to an annualised rate of 7.2% though, clearly an unacceptable level. Monthly core inflation also remains elevated and does not yet show a declining trend. It is currently at 0.3% month-on-month, which is 4.2% annualised. It comes as no surprise that the surge in gas prices has once again dominated the increase in monthly inflation. The surge in market prices has caused consumer gas and electricity prices to surge by 3.9% in July, which was to a large degree offset by a -3.6% drop in fuel prices as lower oil prices have made prices at the pump somewhat more friendly. Food prices continue to be a problem, although inflation for unprocessed food has been abating. Processed food prices still increased by 1.3% in July. Inflation continued to rise due to broad-based monthly contributions in July Source: Eurostat, ING Research calculations   The continuing high monthly core inflation rate was mainly due to goods inflation accelerating to 0.8% on the month. This is in contrast to the US, where goods inflation is abating. So, despite dropping goods consumption, price increases still accelerate. Inflation for clothing and goods for recreation was still moderate, but vehicles, furniture, and household equipment all experienced strong price rises again. Services inflation has been moderating but ticked up a bit in July as prices related to tourism and public transport surged by around 1% on the month. Overall, services inflation has moderated in recent months. At current monthly rates, inflation is set to remain high for a while to come and a peak above 9% is most likely, with a chance of double-digit inflation becoming stronger. Global supply-side inflation pressures are fading, but specific European ones remain critical Relief on the inflation front is partially coming from cooling supply-side pressures. There has been a marked turnaround in a few factors that have driven up prices over the past two years. Supply chain problems have been fading, which is causing prices for transport and inputs to decline again. Think of container prices, which are now almost 50% below their peak from September last year. Survey data suggest that the number of eurozone businesses experiencing problems from a lack of equipment is declining. Critically, there has also been a relief in global agriculture prices, which have dropped to levels seen pre-war. Oil prices have also been sliding, which has had a favourable impact on global fuel prices. Global supply factors are improving the inflation outlook Source: S&P, Federal Reserve Bank of New York, Macrobond, ING Research   Some specific European factors are set to keep supply-side inflation elevated though. The low gas supply and low water levels are keeping pressure on prices higher than elsewhere. Another peak in natural gas prices has been reached, which is currently almost 10 times as high as it was in early 2021. Importantly, it is also twice as high as it was in late June. With concerns about fill levels in the winter and expensive liquefied natural gas (LNG) imports used to fill storage, it is likely that prices will remain elevated throughout the year. Energy prices are also impacted by the troublesome low water levels. This is causing problems in cooling nuclear plants and river transportation of coal supply. Furthermore, the low water levels are hampering manufacturing production in Germany as supplies are harder to transport. So while global factors are bringing relief at this point, specific European supply-side problems related to the drought and energy are set to keep pressure on prices in the months ahead. Let’s also not forget the recent announcement by the German government on a gas levy. This levy will push up retail gas prices much higher as early as October. Another spur in headline inflation is in the making. We cannot exclude that other European governments will follow the German example, which in turn would add to inflationary pressure in the winter. Demand continues to play a backseat role to inflation in the eurozone Supply-side factors remain dominant in eurozone inflation, which continues to make the European Central Bank's role in bringing inflation down limited. The eurozone economy still has an output gap, real wage growth is vastly negative at the moment, and household consumption has far from recovered to pre-pandemic levels. Even though the economy is still in recovery mode according to the latest GDP figures for the second quarter, a recession is looming. Consumers have been spending on services due to a post-lockdown effect, but retail sales have already been trending down since November and consumer confidence is at an all-time low in the eurozone. The squeeze in purchasing power that high inflation is causing is set to have a significant effect on spending in the months to come. Wages are also still disappointing in terms of their recovery. While the first quarter saw a temporary spike in eurozone negotiated wage growth due to one off-payments in Germany, the second quarter will have likely seen a drop again. Wage growth in Italy remains stubbornly low, while other countries are seeing a cautious upward trend towards pre-pandemic levels at the moment. The question is how the large bargaining agreements in the coming months will play out, but most demands have remained modest. For now, there is not much that points to a wage-price spiral. Inflation is set to turn a corner, but expectations are key The eurozone is in for a tough second half of the year. The peak in inflation is hard to determine as energy prices are currently inincredibly unpredictable and still have a dominant effect on headline inflation, and even on core as businesses have to price through higher energy costs to consumers at these prices. A peak above 9% headline year-on-year inflation is logical at this point, but a jump to above 10% is clearly not unimaginable given the high market gas prices. We already hinted at such a peak in our earlier note from March. For the European Central Bank, it is not about current headline inflation but about future inflation and inflation expectations. The bank knows very well that it can do little to actively bring down inflation in the short run and we doubt that, contrary to the Fed, the ECB would be willing to push the eurozone economy into recession. In fact, it doesn’t have to as the eurozone economy is already heading that way. For inflation, this means that companies’ ability to pass through higher costs to consumers will drop quickly; in fact, it has already started to. Inflation expectations have been on the rise, but businesses are becoming less eager to price through Source: ECB, European Commission, ING Research   The ECB currently has two main goals: anchoring inflation expectations and normalising monetary policy. As for inflation expectations, only business inflation expectations have come down somewhat. The US example, however, shows that even more aggressive rate hikes are less powerful in bringing down survey-based inflation expectations than global commodity prices. The latest drop in US inflation expectations seems to be the result of dropping gasoline prices and not so much of the latest Fed rate hikes. This leaves the ECB with at least normalising monetary policy. Consequently, we still expect the ECB to take a less aggressive approach than the Fed and what markets are currently pricing in. We expect the ECB to hike rates by another 50bp at the September meeting and then pause until spring next year. A recession, a winter energy crisis, and an ongoing war simply argue against overly aggressive rate hikes. Read this article on THINK TagsInflation Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Bearish Dominance Appears Again, Bitcoin Must Be Careful! BTC/USD

Bearish Dominance Appears Again, Bitcoin Must Be Careful! BTC/USD

InstaForex Analysis InstaForex Analysis 23.08.2022 16:36
Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Crypto Industry News: Since last Friday, August 19, there has been an increased amount of liquidations which has had a key impact on the cryptocurrency market. Since then, bitcoin (BTC) has depreciated by more than 10%. The market capitalization of all digital assets fell below the $ 1 trillion mark again. At the time of writing this article, the rate of the first cryptocurrency is $ 21,000. This means a slight decrease during the day by almost 1%, although bitcoin is losing 12.24% of its value over the last week. Bitcoin's market cap is currently over $406 billion. However, despite the return of bearish dominance and hence the decline in rates, interest in long BTC positions remains at the highest levels in 12 months. Technical Market Outlook: The BTC/USD pair has been seen testing the lower channel line around the level of $21,000 as the bears are getting ready do break out below the lower channel line soon. The momentum is still weak and negative on the H4 time frame chart, bounces are shallow and the market is clearly controlled by bears that might accelerate the sell-off and test the swing low seen at the level of $17,600 again. The nearest technical resistance is located at the level of $22,410. Weekly Pivot Points: WR3 - $22,059 WR2 - $21,713 WR1 - $21,486 Weekly Pivot - $21,368 WS1 - $21,140 WS2 - $21,022 WS3 - $20,677 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout. Read more: https://www.instaforex.eu/forex_analysis/289563 Read more: https://www.instaforex.eu/forex_analysis/289563 Source: Forex Analysis & Reviews: Technical Analysis of BTC/USD for August 23, 2022 Read more: https://www.instaforex.eu/forex_analysis/289563
Authorities In Australia Have Announced Their Intention To Regulate Cryptocurrencies In 2023

Crypto: Ethereum (ETH) Situation Is Changing Everyday

InstaForex Analysis InstaForex Analysis 23.08.2022 16:50
Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Crypto Industry News: General Bytes is one of the three largest producers of crypto ATM in the world. The company announced on August 19 that their devices had been hacked in a zero-day vulnerability. This term denotes a software security bug that has not been identified by the developers. Hackers used it to modify settings for their own benefit. As a result of Thursday's attack on servers supporting the operation of bitomats, criminals carried out an operation to obtain administrator privileges. Then, they changed the address of the wallet of recipients of transactions, so that device users lost access to the flowing funds while buying or selling them. The manufacturer did not disclose to the public how many devices were affected by the hack and how many funds were stolen. However, the company advised operators to update the software immediately. It was established that the vulnerability has been functioning since Thursday's modification of the CAS software, as a result of which hackers managed to activate its new version with the number 20201208. General Bytes suggests that customers refrain from using their devices until the server is updated. The company hopes to fix the vulnerabilities and restore old settings with some tweaks. Before reactivating its terminals, General Bytes advised customers to review their "cryptocurrency sales settings" again. This is to make sure that hackers have not tweaked their settings so that the funds being sent go directly to their wallets. GB said several security audits have been carried out since the inception of their systems in 2020. However, never once has a similar vulnerability been discovered. Technical Market Outlook: The ETH/USD pair has fell out of the channel and the sell-off accelerates rapidly towards the technical support seen at the level of $1,559. The market conditions on the H4 time frame chart are extremely oversold, however the bearish pressure is still strong and the local bounces are very shallow. The nearest technical resistance is seen at $1,666 and must be clearly violated in order to continue the up move. The key short-term technical support is located at the level of $1,559 and if clearly violated, then the next target for bears is located at $1,358. Weekly Pivot Points: WR3 - $1,703 WR2 - $1,649 WR1 - $1,615 Weekly Pivot - $1,595 WS1 - $1,560 WS2 - $1,540 WS3 - $1,485 Trading Outlook: The down trend on the Ethereum might have been terminated at the level of $880. So far every bounce and attempt to rally is being used to sell Ethereum for a better price by the market participants, so the bearish pressure is still high. The next target for bears is located at the level of $1,358.   Source: Forex Analysis & Reviews: Technical Analysis of ETH/USD for August 23, 2022
ECB Inflation Projections: Euro Gains Support on Higher CPI Forecast

Euro Will Rebuild Itself? Recession In USA Can Help!

InstaForex Analysis InstaForex Analysis 23.08.2022 17:05
Company does not offer investment advice and the analysis performed does not guarantee results. The markets are in suspense in anticipation of the US central bank meeting in Jackson Hole. The main topic of the upcoming event is the further dynamics of the key rate, the rise of which will significantly affect the US economy and the national currency. According to a number of analysts, at the annual conference of heads of central banks and representatives of the financial world, which will be held on August 25-27, the topic of raising interest rates will be key. In terms of importance, it is equal to the issue of combating skyrocketing inflation, which is near a 40-year high. Federal Reserve Chairman Jerome Powell is expected to speak at the Jackson Hole symposium. Its outcome may be a revision of current decisions on the dynamics of the key rate. Most market participants are confident in its rise by 0.75 percentage points, while the rest - by 0.5 percentage points. At the same time, many analysts expect the Fed to continue the current course of monetary policy. Market participants are also confident that the central bank will leave its strategy unchanged until inflation returns to the 2% target. However, according to experts, this is a double-edged sword. Sooner or later, inflation will return to normal, but the core and median indicators will not reach their target either in 2022 or 2023. This process requires much more time, analysts are certain. According to economists, now it is useless to expect a reversal from the Fed. At present, all the efforts of the US and other central banks are aimed at fighting inflation, and this implies following the chosen course of monetary policy. Against this background, the US currency remains stable and tries to grow. These attempts are most often successful, which cannot be said about the European currency. Strengthening the greenback is facilitated by the influx of investor funds into safe assets. At the same time, the euro has reached a low of over 20 years. The reasons are explosive energy prices and difficulties with economic growth in the eurozone. Market participants are preparing for a harsh winter in Europe, which is complicated by problems with the region's energy supply. The euro fell against the greenback at the beginning of this week, again approaching parity. According to experts, the euro is at risk of slipping to the level of 0.9911 - a new 20-year low, if the yield of US government bonds recovers. In a similar situation, the EUR/USD pair will collapse to 0.9750 by the end of September. However, experts and market players hope to improve its dynamics, although these hopes are fading every day. The EUR/USD pair was trading near the low level of 0.9920 on Tuesday morning, August 23, throwing the markets into a gloom. By now, the euro has rushed downward and is within the boundaries of a five-week low. According to experts, the single currency plunged amid fears about a further reduction in gas supplies to Europe and the intensification of the energy crisis. Earlier, at the end of last week, the EUR quickly returned to parity with the USD after discussions by some Fed representatives about a possible rate hike in September (by 0.75%). The single currency briefly got a head start after statements by Isabelle Schnabel, a representative of the ECB's executive board, who allowed another rate hike in September (by 0.50%). Many analysts expect a short-term rise in the euro, which is able to regain lost ground if economic indicators in the US indicate that a recession is approaching. However, such a scenario is unlikely as recent months have seen inflationary pressures ease and economic confidence in the United States rise. According to US employment reports and other important macroeconomic indicators, the US economy is far from recession. At the same time, some FOMC representatives express concerns about economic growth in the country and are skeptical about the slowdown in the rate of monetary policy normalization. This week, the results of PMI in the manufacturing sector and the services sector of the euro area could add pressure on the EUR/USD pair. If these indicators worsen, the euro will again test the lows, experts are certain. An additional factor of pressure on the EUR will be the minutes of the European Central Bank's July meeting, which is expected to be published on Thursday, August 25. The euro's succeeding dynamics will depend on the greenback's reaction to economic data from the US, which will appear before the Fed's speech on Friday, August 26. At the moment, experts admit the strengthening of hawkish sentiments not only among the US, but also among European central banks. Market participants expect the ECB to raise the key rate, although this is now unlikely. In this situation, the dollar, as always, is able to rise at the expense of the euro. The implementation of such a scenario is possible if the Fed raises interest rates in September 2022. Against this background, many experts consider the EUR/USD pair to be a time bomb, which remains "very heavy" and can fall below the parity level at any moment.   Source: Forex Analysis & Reviews: Intrigue for the USD: Will the Fed reconsider is rate decision?  
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

Living In The United Kingdom Is More And More Expensive Every Day

InstaForex Analysis InstaForex Analysis 23.08.2022 17:26
Company does not offer investment advice and the analysis performed does not guarantee results. Selling the pound continues. The GBP/USD pair has again fallen into a perfect storm and is sinking deeper to the bottom. Yesterday it set another and, it seems, not the last anti-record this week. The steep peak of the pound – what is the reason? A series of failures haunts the British currency. The pound did not have time to recover after a loud fall last week, when it lost almost 300 points against USD, as it was covered by a new wave of short positions. On Monday, the pound fell against the dollar to the lowest level since mid-July at 1.1785. And on Tuesday night, the pound reached a new 2.5-year low – the mark of 1.1758. Several factors contributed to the steep peak of the GBP/USD pair, including a large-scale rally of the dollar. However, the strongest pressure on the pound continues to be exerted by the worsening cost-of-living crisis in the UK. Consumer concerns about the further strengthening of inflation increased significantly after the statement of the consulting company Cornwall Insight, made on Monday. Analysts said that as early as this Friday, the British industry regulator Ofgem may announce an increase in energy prices. According to experts, since October, the average annual electricity bills on the peninsula will grow by more than 80% – up to 3,500 pounds ($4,128.6). In the face of this news, talk about a slowdown in economic growth in the UK has resumed again. Also, the degree of anxiety about the impending recession has increased due to another strike. This time, employees of the country's largest container port Felixstowe are demanding higher wages. According to economists, this 8-day strike could lead to trade disruption worth more than $800 million. Meanwhile, this is not the first large-scale protest in the United Kingdom this summer. Earlier, railway workers and bus drivers made demands for higher wages. It's only getting worse According to many analysts, by the end of this year and the beginning of next year, the cost of living crisis in the UK will worsen even more. This will be facilitated by further price increases in the country. Yesterday, the American bank Citi published an updated forecast for inflation in Britain, according to which, at the beginning of 2023, the indicator will exceed the Bank of England's target level by 10 times and reach a 47-year peak of 18%. High inflation will continue to require the BoE to take more decisive action on interest rates. However, the central bank is unlikely to go all-in, like the US Federal Reserve, given its gloomy forecast for economic growth. Recall that in August, the BoE raised the base interest rate by 50 bps, to 1.75%. This was the sixth increase since the end of 2021 and the largest in 27 years. Also at its last meeting, the BoE warned that the UK would enter a protracted recession by the end of this year. Such a scenario is likely to prevent British officials from taking a more hawkish course. Now the markets estimate the probability of a 75 bps rate hike by the BoE in September at only 13%. Most analysts expect that the indicator will be increased by 50 bps. As for the Fed, it is also preparing to raise rates next month. At the same time, it is possible that the United States may increase the indicator by 75 bps for the third time in a row. But even if the Fed slows down its pace of tightening, the difference in interest rates between the UK and the US will still remain quite large, which will contribute to further depreciation of the pound. By the way, this month the GBP/USD pair has already plunged by more than 3%. Now the British currency is one of the worst in the group of ten. What to expect from the pound this week? The S&P Global will publish preliminary data on the UK business activity index on Tuesday. It is expected that the composite indicator will decrease from 52.1 to 51.3, which will indicate a slowdown in the growth of business activity in the private sector. A reading below 50 may remind investors of the risk of the UK economy sliding into recession by the end of the year and put significant pressure on the pound. Also, the pound's short-term prospects are overshadowed by the upcoming Fed symposium in Jackson Hole. Fed Chairman Jerome Powell will deliver a speech on Friday, which is the second day of the meeting. The market expects to hear new comments on further interest rate hikes. Moreover, many traders hope that Powell will remain true to the current monetary rate. Source: Forex Analysis & Reviews: GBP/USD: the patient is more likely dead than alive  
USD/JPY Technical Analysis: Resistance at 147.80, Target Support at 145.90 Amid Uncertainty

EUR/USD Falling Shows Europe's Harmful Dependence On Russia

InstaForex Analysis InstaForex Analysis 23.08.2022 19:03
Relevance up to 14:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. January 2000. For the first time in its history, the euro falls below parity with the US dollar on expectations that the Fed will raise the federal funds rate. Borrowing costs are sure to rise both in the United States and the eurozone, but the hot American economy signals that the Fed will outpace the ECB. As a result, the EURUSD pair moved to a historical low of 0.824 and stayed below parity until the end of 2002. It took the bulls almost two years to win back the losses. How will it be this time? The Fed is already ahead of the European Central Bank. It raised the federal funds rate by 225 bps since the beginning of the monetary tightening cycle, to which Christine Lagarde and her colleagues responded by only 50 bps. Money markets are signaling that US borrowing costs will rise by 75 bps in September, and the euro area – by 50 bps. The speed of the American monetary restriction is still higher, and the European economy is clearly weaker, so the question of updating the historical bottom with the EURUSD pair remains open. Indeed, following the German economy, the French economy also faced a drop in business activity below the critical level of 50. As a result, the European Composite Purchasing Managers' Index hints at a contraction in the currency bloc's GDP in the third quarter. If the ECB continues to raise rates, as it no doubt will, the central bank will only make matters worse by deepening the recession. Dynamics of business activity in Germany and France The fall of the EURUSD below parity reflects not only strong demand for the US dollar but also the result of the EU's harmful dependence on Russia. Europe, sitting on the needle of Russian gas, is not able to get off it at one moment. The reduction of supplies via Nord Stream to 20% of its capacity, followed by the shutdown of the pipeline for maintenance, which can last indefinitely, pushed the prices of blue fuel to record peaks. The result was a combustible mixture of high inflation out of the control of the ECB and increased household spending preventing them from spending on other things. Stagflation, followed by a recession, is perceived extremely negatively by investors and pushes EURUSD to at least 0.95. Of course, not only the energy crisis is to blame for the collapse of the main currency pair, but also the US stock market, which stubbornly demanded that the Fed put on the brakes on monetary restriction, followed by a reduction in the federal funds rate in 2023. Even slowing inflation will not force the Fed to stop tightening monetary policy. The work of the Central Bank is far from over, stock indices finally realized this and began to fall, pulling the euro into the abyss. Technically, on the EURUSD daily chart, the AB=CD pattern was activated with a target at 161.8%, located near the 0.97 mark. We continue to sell the euro, at least until Jackson Hole. There, the hawkish rhetoric of Jerome Powell could lead to profit taking and a pullback. Source: Forex Analysis & Reviews: EU's dependence on Russian gas let EURUSD fall below parity
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

Forex: GBP/USD Has Gone Up After The Release Of US New Home Sales

Kenny Fisher Kenny Fisher 23.08.2022 21:39
The British pound has jumped 0.82% today, as the currency has rebounded somewhat from its worst week of the year. GBP/USD plunged 2.53% last week, as the US dollar has found its mojo after weeks of beating a retreat. GBP/USD has climbed today after US New Home Sales dropped to 511 thousand in July, down from 585 thousand in August and well below expectations. UK manufacturing slides The UK Manufacturing PMI crashed into contraction territory in August. The index fell to 46.0, down from 52.1 in July and shy of the estimate of 51.1. The dismal reading is part of a pan-European downward trend in manufacturing, which has been made worse by the prolonged war in Ukraine. Output has been hampered by higher costs, a drop in demand and supply chain problems. CBI Manufacturing Output fell by 7% in the three months to August, according to the CBI, down from +6% in the three months to July. This was the first decline in output since February 2021. Manufacturers are also affected by rising energy bills and higher interest rates, and the situation is only expected to get worse. The energy cap will rise in October and the BoE will have to continue raising rates in order to defeat inflation. There was better news from Services PMI, which was almost unchanged at 52.5, pointing to weak expansion (52.6 prior). Still, it’s hard to see how the UK can avoid a recession with weak growth and spiralling inflation. Business optimism is dropping, and that will likely lead to a cutback in spending, hiring and investment, which won’t help the economy one bit. There is plenty of anticipation ahead of Jerome Powell’s speech at Jackson Hole on Friday, but investors shouldn’t overlook some key events prior to Powell’s speech. Durable goods orders will be published on Wednesday, with the headline reading expected to slow to 0.6% in July, down sharply from 2.0% in June. Thursday brings US GDP for Q2, which is expected to come in at -0.8% QoQ, after a 0.9% reading in the first quarter. With the Fed stating that US data will be critical in determining its rate policy, the dollar could show some movement after these releases, just as it fell sharply today after the soft New Home Sales reading. GBP/USD Technical  GBP/USD faces resistance at 1.1924 and 1.2005 There is support at 1.1699 and 1.1568 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD jumps on weak US housing data - MarketPulseMarketPulse
Sustainability-Linked Products: Navigating Growth and Challenges for the Future

Forex: British Pound (GBP) To US Dollar (USD) - Technical Analysis - 23/08/22

InstaForex Analysis InstaForex Analysis 23.08.2022 21:43
Relevance up to 20:00 2022-08-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.     Overview : The GBP/USD pair reverses from 1.1879 and drops to multi-day lows near 1.1817 - this price formed a bottom this morning in the hourly chart. Right now, the GBP/USD pair dropped further and bottomed at 1.1716. It then trimmed losses, rising to 1.1879. The move lower took place amid a stronger US dollar across the board. Probably, the main scenario is continued decline towards 1.1817 (sentiment level). The GBP/USD pair broke support at the level of 1.1817 which acts as a resistance now. According to the previous events, the GBP/USD pair is still moving between the levels of 1.1817 and 1.1716. Immediate support is seen around 1.1817. A clear break below that area could lead price to the neutral zone in the nearest term. Price will test 1.1716, because in general, we remain bearish on August 23th, 2022. Therefore, we expect a range of 101 pips in coming hours (before the end of session). The trend is still below the 100 EMA for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. Hence, the price spot of 1.1879 remains a significant resistance zone. Since the trend is below the 38.2% Fibonacci level (1.1879), the market is still in a downtrend. Today, on the one-hour chart, the current drop will remain within a framework of correction. If the pair fails to pass through the level of 1.1879 (major resistance), the market will indicate a bearish opportunity below the strong resistance level of 1.1879. Since there is nothing new in this market, it is not bullish yet. Overall, we still prefer the bearish scenario. Consequently, there is a possibility that the GBP/USD pair will move downside. The structure of a fall does not look corrective. In order to indicate a bearish opportunity below 1.1879, sell below 1.1879 with the first target at 1.1716. Besides, the weekly support 2 is seen at the level of 1.1650. The market will decline further to 1.1600. This would suggest a bearish market because the RSI indicator is still in a negative area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.1600 in order to test the third support (1.1600) in coming days. However, traders should watch for any sign of a bullish rejection that occurs around 1.1979.   Read more: https://www.instaforex.eu/forex_analysis/289685
Global Markets Shaken as Yields Soar: Dollar Surges, Stocks Slump, and Gold Holds Ground Amid Debt Concerns and Rate Hike Expectations

Watch Out Forex! USD (US Dollar) Index May Reach 111! EUR/USD Plunging To 0.98 Is Probable!

ING Economics ING Economics 24.08.2022 08:57
The Jackson Hole Symposium kicks off tomorrow, and while PMIs sent grim signals on the economic outlook, markets are broadly holding on to their hawkish expectations. We think the post-PMI dollar correction may be fully reversed today, but a quiet calendar across major markets suggests a potentially calmer environment DXY can still reach 110.00 by the end of the week if Fed Chair Jerome Powell sticks to his hawkish message on Friday USD: Shrugging off the post-PMI correction Amid an abundance of rather dismal PMIs in major Western economies, the dollar suffered a correction yesterday as activity surveys showed a big slump in the service sector. The market reaction relates to markets pricing in a grimmer economic outlook in Europe than in the US, so that bad data tends to have an asymmetrically larger impact on US-growth-sensitive assets. In FX, the dollar’s overbought condition makes it naturally vulnerable to some position-squaring downside risks. That said, we are not surprised to see the post-PMI FX moves being quite short-lived (the dollar recovered overnight), as the macro picture and solidly hawkish expectations ahead of Jackson Hole should keep the dollar broadly in demand. The quintessential lack of attractive alternatives – especially in Europe – means that DXY can still reach 110.00 by the end of the week if Fed Chair Jerome Powell sounds convincing enough in sticking to his hawkish message on Friday. On the data side today, some focus will be on durable goods orders for July, which should however have limited market implications. There are no scheduled Fed speakers before the Jackson Hole Symposium kicks off tomorrow. Francesco Pesole EUR: Bearish bias persists Despite yesterday’s rebound, EUR/USD remains undervalued by around 5% according to our short-term fair value model. As we’ve highlighted on multiple occasions lately, the risk premium on the pair can linger for several months as it did in 2015 (Greek debt crisis) and 2018 (Italian political turmoil). In other words, while an improvement in the eurozone’s growth sentiment may trigger an asymmetrical upside reaction in EUR/USD, a prolonged short-term undervaluation is surely possible should gas prices remain elevated and the threat of supply shortages material. Indeed, yesterday’s PMIs all but confirmed the market’s concerns about the toxic combination of high energy prices and slowing global demand, and a full inversion of yesterday’s moves may be on the cards today. A drop to 0.9800 in our view is more likely than a sustained recovery above parity in the near term. The eurozone’s calendar is very quiet today and there are no scheduled ECB speakers. We think the ECB should turn more vocal on the weak euro, although the practical implications for the FX market may be quite small for now. Francesco Pesole GBP: Quiet calendar, same downside risks The UK’s August PMIs offered something for both the doves and the hawks at the Bank of England. The slump in the manufacturing sector appears mostly driven by slower demand, and the survey seems to suggest input prices are cooling. On the other hand, hiring demand has remained strong and the difficulty in finding staff remains quite elevated – all of which points to sustained upside wage pressure. The bottom line is that core inflationary pressures may have peaked, but there are indications that service inflation may prove more persistent. There are no events or data releases to highlight in the UK calendar today. We see downside risks for Cable as yesterday’s dollar drop may be unwound further, with 1.16/1.17 remaining the bias for this week. EUR/GBP may bottom out if it reaches 0.8400, as similar economic troubles for the UK and the eurozone argue against sustained deviations from its recent range. Francesco Pesole CEE: End of the sell-off not in sight Today in the CEE region, there are confidence indicators in the Czech Republic and labour market data in Poland and Hungary. Czech consumer confidence has slumped massively in recent months under pressure from rising inflation and fears about the future and was already at near all-time lows in July, and no improvement is expected for August either. On the other hand, labour market data from Poland and Hungary should confirm the tightened conditions. Hungarian wage growth, while slowing from June, remains well above 10%. Unemployment in Poland has fallen further and may see further record lows. For the CEE market, the conditions remain the same: EUR/USD near parity, gas prices slightly below their peak, risk-off sentiment and a sell-off in CEE bonds. The Hungarian forint continues to move higher, following the pattern of gas prices. However, Thursday's National Bank of Hungary meeting is approaching and, as we mentioned yesterday, this may bring further weakness for the forint. However, the Polish zloty could stabilise for the time being. After a few days, we saw the first rise in the interest rate differential which could keep the zloty around 4.770 EUR/PLN. However, the float FX side remains heavily dependent on global events which may trigger another sell-off. The koruna seems to remain under the safe wings of the Czech National Bank. While the central bank's balance sheet data confirms minimal FX intervention activity last week, we can expect the CNB to be more active this week. Frantisek Taborsky Read this article on THINK
Biden Declared Unwavering Support For Ukraine, The Reserve Bank Of New Zealand May Go Back To Raising Rates

Why Is Euro Falling? Heroic Ukrainian War, Strong Dollar And More

InstaForex Analysis InstaForex Analysis 23.08.2022 19:33
Relevance up to 13:00 2022-08-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The euro and the pound reacted with a decline to the news that economic activity continues to weaken worldwide, and Europe was no exception. It has increased fears that rising prices and the war in Ukraine will lead the world into recession. Accordingly, nothing is surprising in that the euro has fallen below parity against the US dollar as the demand for safe-haven assets has increased again. As today's data showed, the volume of production in the eurozone, which includes 19 countries, decreased for the second month. In August, record inflation for energy and food severely undermined demand, pushing more and more sectors down. The problem also lies in the high activity in the service sector, such as tourism, which has almost stopped. Only in the UK did the purchasing managers' index manage to stay above 50 points, which indicates an increase in activity. But this is what concerns the service sector. Manufacturing activity showed an unexpectedly large drop. In Asia, Japan's output also declined due to a surge in COVID-19 cases, further reducing demand, which is already struggling with the weight of rising inflation. Australia's services sector contracted for the first time in seven months, somewhat offsetting tourism growth. All these data paint a bleak picture for the global economy, as most central banks remain focused on curbing inflation by raising borrowing costs. A little later today, several US PMI data will be released, showing improvements in manufacturing and services. But the published figures of the eurozone indicate a contraction of the economy in the third quarter of this year because the decline in production is currently observed in several sectors, from manufacturers of basic materials and cars to companies engaged in tourism and real estate. Even more painful for investors was the news that Germany began to sink, which showed the sharpest decline since June 2020. All the efforts of the authorities to reduce dependence on Russian natural gas against the background of a reduction in supplies after Ukraine start winning the war. In France, things are also no better – activity there has decreased for the first time in a year and a half. Europe's largest economies cannot withstand record inflation and growing uncertainty. The indicator of the French private sector activity in August reached the lowest level since the failures and amounted to 51 points, while production activity decreased to 49 points. New orders declined both in the service sector and manufacturing, while companies quickly lost confidence in their future. In Germany, the index of business activity in the manufacturing sector turned out to be slightly better than economists' forecasts, but this did not help much, as it amounted to 49.8 points – this indicates a decline in the sphere. The index of business activity in the services sector completely collapsed to 48.2 points. The European economy is experiencing a deepening decline in private sector business activity, riddled with further uncertainty. Against this background, the euro continues to fall. Bulls need to correct the situation very quickly and return to 0.9940 since the problems will only increase without this level. Going beyond 0.9940 will give confidence to buyers of risky assets, opening a direct road to 1.0000 and 1.0130. If there is a further decline in the euro, buyers will certainly show something around 0.9860, but this will not help them much since updating the next annual minimum will only strengthen the bear market. Having missed 0.9860, you can say goodbye to hopes for a correction, which will open a direct road to 0.9820. Nothing good happens for the pound. Buyers need to do everything to stay above 1.1730 – the nearest support level. Without doing this, you can say goodbye to the hopes of recovery. Moreover, in this case, we can expect a new major movement of the trading instrument to the levels: 1.1690 and 1.1640. A breakdown of these ranges will open a direct road to 1.1580. It will be possible to talk about stopping the bearish scenario only after the breakdown and consolidation above 1.1780, allowing the bulls to count on a recovery to 1.1820 and 1.1870. Source: Forex Analysis & Reviews: The answer to the question of why the euro is falling so much
Oil Rally Driven by Saudi and Russian Cuts Continues Amid Economic Considerations

"Futures Market Is Disconnected From Underlying Fundamental Developments," Said The Saudi Energy Minister

Saxo Strategy Team Saxo Strategy Team 24.08.2022 09:49
Summary:  US equities continued to push sharply lower yesterday as the strong US dollar is in focus as EURUSD dropped well below parity yesterday. US Treasury yields are playing their part in pressuring sentiment as the US 10-year yield benchmark rose above 3.00%. The next important event risk is this Friday’s Jackson Hole, Wyoming speech from Fed Chair Powell, as the Fed is expected to remind the market that it remains in full inflation-fighting mode, pushing back against the impression that it may be set to cut rates next year.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures extended their losses yesterday as the US 10-year yield moved above the 3% level and the Fed Funds futures curve moved lower across the whole curve (meaning less rate cuts expected next year). Markets are beginning to second-guess their aggressive bets in July on inflation cooling fast enough to warrant rate cuts next year as the galloping energy crisis makes it difficult for inflation to cool. Tangibles-driven themes such as commodities, logistics, energy storage and financials were the relative winners in yesterday’s session. S&P 500 futures are now in the support zone from before the last leg up that started on 10 August; we see the 4,100 level as the next level to watch on the downside and then the 100-day moving average at 4,085. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hang Seng Index and CSI300 were both down about 0.6%. A Bloomberg report yesterday, citing “people familiar with the matter”, suggested the size of the central bank and other authorities’ support lending program to developers could be as large as RMB 200bn. The reaction of the share prices of Chinese Property developers were mixed, Country Garden (02007:hkg) +3.1%, Longfor (00960:xhkg) -1.4%. Postal Savings Bank of China (01658:xhkg) plunged 5.5% after the Chinese bank reported net profit miss with a 10 bps y/y fall in net interest margin to 2.27% in H1. Gross loans grew 13% y/y in H1 but at a more tepid growth of 3% q/q.  Non-performing loans ratio overall was steady at 0.8% but mortgage NPL ratio climbed by 8 bps to 0.52%. US dollar rally following through The US dollar rally continued apace yesterday, as EURUSD traded well below parity and closed at its lowest level in nearly twenty years yesterday. GBPUSD has teased below 1.1760, its lowest level since a one-off pandemic-outbreak spike in early 2020, while other USD pairs are not yet at extremes of the cycle, including AUDUSD, still well above the sub-0.6700 lows of July, and USDJPY, which has not yet challenged the cycle high north of 139.00. There is clearly a reflexive situation at the moment in the US dollar, risk sentiment and US treasury yields. USDCNH Broad USD strength remains behind the weaker CNH in the USDCNH exchange rate as the CNH continues to rise versus, for example, the EUR, while the CNHJPY exchange rate trades near the important 20.00 area. Any more significant move in this critical exchange rate could quickly steal some of the focus away from the US dollar. The contrast between an easing PBOC (moving once again earlier this week) and tightening central banks nearly everywhere else is stark. The next important level for the pair is 7.00, with the range high of the last decade near 7.20. Crude oil prices (CLU2 & LCOV2) Crude oil prices made a sharp U-turn higher on Monday after the Saudi Energy Minister talked about a potential production cut after saying the futures market has become increasingly disconnected from underlying fundamental developments, a view that we share. His comment supported the market on a day where risk appetite generally took a knock from the stronger dollar and falling equity markets. A global shift from gas to oil, from Europe to Asia, has taken a deeper hold amid gas shortage fears accelerating in the wake of another upcoming maintenance of the Nord Stream 1 pipeline and heatwaves in China. Diesel prices trades higher supported by refinery margins, the so-called crack spread hitting seasonal highs around the world. Gold (XAUUSD) and Silver (XAGUSD) Gold broke below the key $1744 support on Monday before finding support at $1729, the 61.8% retracement of the July to August bounce. Dollar strength and a run higher in US yields weighed on the shine of the yellow metal, which has seen downside pressures since last week after touching the critical $1800-level. Hawkish Fed talk this week could further weigh on the short-term prospects for Gold. Silver also dipped below the key 19 handle, erasing most of the gains seen since late July. German year-ahead power prices hit a fresh record high German year-ahead power prices surged to EUR 700/MWh with Dutch TTF gas prices close to EUR 300/MWh. The surge came on the back of another leg higher in natural gas prices which rose over 13% in Europe amid concerns around the next scheduled 3-day maintenance of the Nord Stream 1 pipeline. It appears that demand destruction remains the most obvious but painful cure right now, along with a longer-term focus on ensuring a broad-based supply of energy from coal, gas, nuclear, solar, hydrogen, and more. US Treasuries (TLT, IEF) US treasury yields rose yesterday, with the 10-year benchmark closing above 3.00% for the first time in over a month yesterday. Rising yields are likely an important driver of weaker risk sentiment after the melt-up in the wake of the late July FOMC meeting, but practically, a move toward the cycle highs from June near 3.50% (in the lead-up to the FOMC meeting on June 16) is needed to seize the spotlight. The behavior of the treasury market in the wake of the Jackson Hole conference speech from fed Chair Powell this Friday is an important next step, particularly if Powell provides strong guidance on the pace or importance of the Fed’s balance sheet tightening (QT). What is going on? EURUSD falls below parity, eyes on 0.9500 The latest concerns on the European energy crisis weighed on the Euro which was seen sipping below parity to the US dollar. Higher US yields and gains in the US dollar also underpinned, taking EURUSD to lows in the low 0.9900’s this morning. The European recession is coming hard and fast, and the PMIs today will likely signal increasing pressure on the region. The next step for the US dollar is the Fed Chair Powell speech this Friday as discussed below. Australia and Japan services PMIs plunged into contraction Australia saw its services PMI drop to 49.6 in August in a flash print, from 50.9 in July. Manufacturing PMI, however, held up at 54.5, just weakening slightly from last month’s 55.7. The spate of rate hikes seen from Reserve Bank of Australia is likely taking its toll on demand and manufacturing. Meanwhile, prices remain elevated amid the persistent supply chain issues, and more rate hikes are still on the cards. Japan’s flash manufacturing PMI for August came in lower at 51.0 from 52.1 previously, nut stayed in expansion territory. Services PMI however plunged into the contraction zone below 50, coming in at 49.2 for a flash August print from 50.3 in July. The fresh COVID wave in Japan, although comes without any broad-based new restrictions, is impeding the services demand and will likely weigh on Q3 GDP growth. Palo Alto outlook remains strong The cyber security company reported last night Q4 revenue and EPS above estimates and Q1 outlook is slightly above estimates while the FY outlook is well above consensus estimates. Q4 networks billing growth was 44% vs est. 25% suggesting demand is accelerating and bolstering our view that the cyber security industry is a high growth and counter-cyclical industry in the years to come. Shares were up 9% in extended trading. Zoom shares were down 8% in extended trading The popular video conferencing software that rose to prominence during the pandemic is lowering its FY outlook relative to previous announcements. The slowdown in their business is due to slower enterprise growth which could be a function of Microsoft and other major technology companies that have entered the enterprise business for video conference. What are we watching next? Europe and UK PMIs may spell further caution. The Euro-area flash composite PMI and the UK flash PMI for August are both due to be released on Tuesday. Following a slide in ZEW and Sentix indicators for July, the stage is set for a weaker outcome on the PMIs too. July composite PMI for the Euro-area dipped into contractionary territory at 49.9, while the UK measure held up at 52.1. The surge in gas and electricity prices continue to weigh on GDP growth outlook, with recession likely to hit by the end of the year. USD and US Treasury yields as Jackson Hole Fed conference is the macro event risk of the week Friday The US dollar and yields are setting risk sentiment on edge as EURUSD has plunged well through parity. US Treasury yields have supported the USD rally with the entire curve lifting over the last couple of weeks and longer yields closing at new one-month highs. The Fed has pushed back consistently against the market’s pricing of a Fed turnaround to easing rates next year with partial success, as expectations for rate cuts have shifted farther out the curve and from higher levels. The next focus is this Friday’s Jackson Hole symposium speech from Fed Chair Powell, who is expected to stay on message and maintain credibility on fighting inflation after the two large 75 basis point hikes at the last two meetings. The Fed’s attitude toward quantitative tightening may be a focus in the speech as well, with the pace of QT supposedly set to pick up in coming weeks to $95B/month. So far, the QT has been slow out of the gates, with the balance sheet currently only some $115B smaller than at its mid-April peak. Earnings to watch Today’s earnings focus is on CATL and JD.com, with especially CATL being important as the world’s largest battery manufacturer to the car industry and thus pivotal for the electrification of the transportation sector. CATL is expected to report revenue growth of 126% y/y in Q2 as EV adoption is accelerating, but key risks ahead are rising input costs across lithium and energy. JD.com is expected to report 3% revenue growth in Q2 as growth is grinding to a halt on very weak consumer confidence in China. Today: CATL, Intuit, Medtronic, JD.com Wednesday: LONGi Green Energy, Royal Bank of Canada, PetroChina, Ping An Insurance Group, Nongfu Spring, Mowi, Nvidia, Salesforce, Pinduoduo, Snowflake, Autodesk Thursday: South32, Toronto-Dominion Bank, Fortum, Delivery Hero, AIA Group, China Life Insurance, CNOOC, CRH, Dollar General, Vmware, Marvell Technology, Workday, Dollar Tree, Dell Technologies, NIO Friday: Meituan, China Shenhua Energy, China Petroleum & Chemical Economic calendar highlights for today (times GMT) 0715-0800 – Eurozone Aug. Flash Manufacturing and Services PMI 0830 – UK Aug. Flash Manufacturing and Services PMI 1000 – UK Aug. CBI Trends in Total Orders and Selling Prices 1100 – ECB's Panetta to speak 1345 – US Aug. Flash Manufacturing and Services PMI 1400 – US Aug. Richmond Fed Manufacturing 1400 – Eurozone Aug. Flash Consumer Confidence 1400 – US Jul. New Home Sales 2300 – US Fed’s Kashkari (non-voter) to speak  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 23, 2022
Forex: AUD/USD, NZD/USD And AUD/JPY Reviewed By Jason Sen (DayTradeIdeas) - 24/08/22

Forex: AUD/USD, NZD/USD And AUD/JPY Reviewed By Jason Sen (DayTradeIdeas) - 24/08/22

Jason Sen Jason Sen 24.08.2022 09:07
NZDUSD shorts at resistance at 6300/20 worked perfectly with a high on Thursday & a collapse to my 6160/50 target. AUDJPY edges slowly higher to first resistance at 9500/20. Shorts need stops above 9540. Remember when support is broken it usually acts as resistance & vice-versa. Update daily by 05:00 GMT Today's Analysis. AUD/USD AUDUSD shorts at strong resistance at 6960/70 hit my first target of 6920/10 as we look for 6865/55, perhaps as far as 6800/6780 this week. Further losses are certainly possible to 6730/20 & even the July low at 6690/80. Gains are likely to be limited in the bear trend with strong resistance at 6960/70. Shorts need stops above 6990. A break higher however meets strong resistance at 7030/50. Shorts need stops above 7070. Read next: Tesla (TSLA) 3-for-1 Stock Split Drives Share Price| FXMAG.COM NZD/USD NZDUSD shorts at first resistance at 6215/25 have been held as we reverse from 6244 (lucky!!). Target is 6160/50. On further losses look for 6110/00 before a retest of the July low at 6070/60. First resistance at 6215/25. Shorts need stops above 6250. Strong resistance at 6290/6310. Shorts need stops above 6325. AUD/JPY AUDJPY hit first resistance at 9500/20. Shorts need stops above 9540. A break higher can target 9575, perhaps as far as 9660/80. Shorts at 9500/20 target 9450/40 then 9420/10 for some profit taking.
Short-term analysis - Euro to US dollar by InstaForex - 31/10/22

EUR/USD: PMI Data Made US Dollar (USD) To Decrease, GBP/USD And Nasdaq Shock

Jing Ren Jing Ren 24.08.2022 08:30
EURUSD sees limited bounce The US dollar retreated after PMI data showed a slowdown in business activity. However, the euro’s fall below parity and July’s low indicates that sellers are in control. As last month’s rally turned out to be a dead cat bounce, the path of least resistance would be down. After the RSI sank into oversold territory, 0.9900 from December 2002 saw some bargain hunting. Though the former demand zone around 1.0040 could be a tough level to crack. Renewed selling would send the single currency towards 0.9700. GBPUSD breaks daily support The pound bounces over upbeat services PMI. The pair had previously failed to clear the supply zone (1.2300) on the daily chart. The bears’ latest push below 1.1770 has invalidated the mid-July rebound. This is a confirmation that the downtrend could resume in the weeks to come, and the price action might be heading towards March 2020’s lows around 1.1400. 1.1720 is an intermediate support in case of a brief consolidation. Stiff selling pressure could be expected at the support-turned-resistance at 1.1950. NAS 100 struggles for bids The Nasdaq 100 feels the pressure from signs of a slowing US economy. A break below the psychological tag of 13000 has put the bulls under pressure. 12800 on the 30-day moving average is another test of buyers’ resolve in the short-term. 13080 has become a fresh supply area, and as the RSI recovers into the neutral area, renewed selling interest could cap a potential rebound. The bulls will need to reclaim 13400 before the index could secure a foothold again. Otherwise, it could be vulnerable to another round of sell-off.
Coffee Is In Danger As Its Suppliers Have Troubles With Crops

Coffee Is In Danger As Its Suppliers Have Troubles With Crops

Saxo Bank Saxo Bank 24.08.2022 12:30
Summary:  A zany day for US data as the August flash S&P Global Services PMI suggests a deepening contraction is afoot in the US services sector after an already weak July reading that contrasted with strength in the ISM Services survey for July. What are we supposed to believe. Elsewhere, crude oil has cemented its comeback with an extension higher yesterday and coffee is at risk of a further rise on supply woes. In equities, we look at the latest in the Tesla/Twitter saga, earnings ahead including NVidia after the close today, and an interesting company in the EV batter supply chain in Europe. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Crude oil bounce extends. Zany mismatch in US Services sector surveys
Analysis Of Situation Of The US Dollar To Swiss Franc Pair (USD/CHF)

US Dollar (USD) To Swiss Franc (CHF) May Hit Quite Low Level! Technical Look At USD/CHF

Jing Ren Jing Ren 24.08.2022 08:48
The current USDCHF structure on the 1-hour timeframe shows the final part of a large triple zigzag consisting of cycle sub-waves w-x-y-x-z It is possible that the price reduction in the intervening wave x, which is a double zigzag Ⓦ-Ⓧ-Ⓨ, has recently come to an end. Currently, there is a development of the actionary wave z of the cycle degree. It is likely that the wave z will be a standard 3-wave zigzag Ⓐ-Ⓑ-Ⓒ of the primary degree. It is assumed that in the next coming trading days, market participants could see the development of sub-waves Ⓐ-Ⓑ-Ⓒ, as shown on the chart, near 1.023. At that level, cycle wave z will be at 76.4% of previous actionary wave y. Alternatively, the construction of the bearish intervening wave x has not yet come to an end. This wave can be more complex in its form, that is, it may take the form of a triple zigzag rather than a double zigzag Ⓦ-Ⓧ-Ⓨ-Ⓧ-Ⓩ. Thus, the confirmation of this option could be a reduction in the price and the construction of the final sub-wave Ⓩ. It is possible that the wave Ⓩ will strive for equality with the previous actionary wave Ⓨ, and therefore its end is possible near the level of 0.917. The probability of achieving this coefficient is high.
OPEC+ Are Expected To Keeping Oil Production Unchanged, AUD/USD Trades At Its Highest Levels

Saudi's Are Threatening The World By Reducing Oil Supply!?

Marc Chandler Marc Chandler 24.08.2022 12:57
Overview:  A simply dreadful flash US PMI stopped the dollar's four-day rally in its tracks. It followed news that the eurozone, Japan, and Australia's composite PMIs are below 50 boom/bust level. However, the dollar recovered, even if not fully as the market seemed unconvinced that the data could change Fed Chair Powell's message at Jackson Hole on Friday. A consolidative tone is evident today. Asia Pacific equities were mixed. China and Hong Kong fell more than 1% while South Korea, Australia, and India posted gains. Europe’s Stoxx 600 is off for the fourth consecutive session, the longest spill in a couple of months. US futures are straddling unchanged levels. The US 10-year yield is around 3.04%, little changed, while European benchmark rates are 2-4 bp higher. Japan’s 10-eyar yield edged up near 0.22% is once again drawing close to the cap. Gold is firm near $1750, but unable to build much on yesterday’s nearly $12 rally. October WTI is extending its rally since the Saudi’s threatened to reduce supply and Israel is pushing back against the US-Iran deal. US natgas fell 5% yesterday and is about 1.75% firmer today. The European natgas benchmark has jumped almost 7% today to recoup fully yesterday’s 6.5% pullback, which snapped a four-day rally. Iron ore rose 0.5%. It was the third advancing session, the longest rally this month. September copper is giving back about half of yesterday’s 1.2% gain. September wheat is up 2% to bring the gain to 9% since last Thursday.   Asia Pacific In addition to the usual corporate analysis and credit, ESG ratings and investment orientation have become increasingly important. However, the meaning of ESG and ratings not uniform. Arguably, it is where "organic" was a couple of decades ago, and it is still evolving. Some of dismissive and suggest it is a "woke” fad. Japan's Government Pension Investment Fund (GPIF), the largest pension fund in the world, reports that seven of the eight ESG funds it invests in beat the benchmarks in the fiscal year that ended in March. Over the past five years, it said that all eight funds have outperformed. Since US Pelosi's visit to Taiwan, a few other US elected officials have visited Taiwan. UK officials and Japanese officials have either visited or planned to visit Taipei. China has continued its aerial harassment of the island. and repeatedly crossing the median line in the Taiwan Straits. In a recent report, the Atlantic Council argued that one of the lessons from Ukraine, is that the US "strategic ambiguity" is not an effective deterrence, and that the US should be unequivocal in its support. These developments, alongside reports that US military advisors have been in Taiwan since before the 2020 election and the number of "misstatements" by President Biden that were clear signs of support that were "walked back", all play into the hardliners in Beijing who think the US is trying to change the status quo. Congress is considering a bill that would codify some of it. The US strategic ambiguity is ostensibly not about one-China but on how the US would respond to Beijing's use of military power to unite the country. This was not meant to deter China as the military planners would have to game out the US response no matter its declaratory policy. The chief function is to deter Taiwan from declaring independence unilaterally and dragging the US into a war of its making. However, Taiwan, as it stands now, is not a member of organizations based on state sovereignty, like the UN and IMF. The bill that is likely to get more attention in Q4 proposes to recognize Taiwan as an important non-NATO ally and seek to promote Taiwan's membership in international forums. Both sides are giving the other reason to think that they are trying to change the status quo. The dollar is in a narrow range against the Japanese yen today of around a third of a yen on either side of yesterday's settlement, which was slightly above JPY136.75. US yields are slightly softer, and the dollar is closer to session lows (~JPY136.35) in the European morning. The greenback can spend the North American session on the JPY136-handle. The Australian dollar is also in a narrow range as the market awaits fresh news. It has spent most of the local session and the European morning below yesterday's $0.6930 settlement. Meanwhile, the greenback has edged higher against the Chinese yuan. It made a marginal two-year high almost at CNY6.8680. In the past two week, the yuan has fallen by a little more than 2% against the dollar, which has risen broadly. The setting of the PBOC's reference rate today could be the first sign that officials want the market to go slowly. The dollar fix was at CNY6.8388, a wider than usual gap and below the market (Bloomberg survey) estimate for CNY6.8511. Of note, the US dollar did not make a new high against the offshore yuan today. Yesterday's high of almost CNH6.8850 held. Europe On top of the energy crisis, and extreme weather, an economy seemingly slipping inexorably toward a recession, while inflation is still accelerating, Italy's national election is a month away. The three-party alliance on the right continues to dominate drawing about 47% support. The Brothers of Italy remains the largest, accounting for a little more than half that support. Many observers assume that the success of the right reflects a shift in the Italian politics. However, the simpler explanation is the disarray of the center-left. The Democratic Party draws second highest support, less than half a percentage point (within the margins of error) of the Brothers of Italy. The problem is that the center-left has been unable to form a pact like the right has done. The once populist power, the Five Star Movement, the largest party in the current parliament, appears to have lost its way, a partly the cause and effect of its fragmentation. There are several other small groupings that would be more at home with the center-left but have been able to coalesce into an alliance. Still, it is notable that Brothers of Italy leader Meloni argued for more Europe in her debate with the Democratic Party leader Letta. Letta sounded like the nationalist, advocating a temporary price control for gas. Meloni backed an EU-wide cap, which Draghi supported. As Benjamin Franklin told the thirteen colonies on the east coast of the North American continent they prepared to fight against the greatest empire at the time, "hang together or hang separately."  Italy's 10-year premium over Germany is near 2.35%. It reached a two-year high in mid-June slightly above 2.40%. In late July, it also tested 2.40%. Italy offers around 100 bp more than Germany for two-year borrowing. The peak since the Covid panic in March 2020, was set late last month near 1.30%. The extra that is demanded from Italy is not about inflation. Italy's two-year breakeven (difference between the conventional yield and inflation-protected security) is about 4.40% compared with Germany's two-year breakeven near 7.10%. Italy's 10-year breakeven is slightly below 2.25%. Germany's is near 2.45%. Both report August's EU harmonized CPI next week. In July, Italy's inflation stood at 8.4%, just below Germany's 8.5%. Not only is Italian inflation lower than Germany's and is expected to remain so, but it is also growing faster. On a workday adjusted basis, the Germany economy grow 1.4% year-over-year in Q2. Italy expanded by 4.6%. The UK's online paper, The Independent, reported that UK imports from Russia have plummeted by nearly 97% since the invasion. They totaled GBP33 mln in June, it noted, citing data from the Office of National Statistics. The collapse reflected government sanctions and actions of companies seeking alternatives to Russian goods beyond the official sanctions. Today' s is Ukraine's Independence Day and marks the sixth month since the Russian invasion. Reports suggest the US will announce a new $3 bln arms package for Kyiv. The euro was squeezed to almost $1.0020 yesterday after the disappointing US data, but it was short-lived, and it finished the North Americans session near $0.9970. The single currency is in about a third of a cent range today and has not been able to resurface above $1.0, where there are large options that expire there tomorrow (2 bln euros) and Friday (1 bln euros). An expiry today for 720 mln euros at $0.9950 has likely been neutralized. Sterling traded in a broad range yesterday (~$1.1720-$1.1880) and exceeded both sides of Monday's range. However, the close was neutral, well within Monday's range, which set the tone for today's quiet session. Sterling has been confined to less than half a cent range above $1.1800. It settled near $1.1835 and has spent most of the Asian session and the European morning below it. The next level of support is seen in the $1.1760-80 band. America There can no explaining away the weakest composite US PMI since May 2020 and drop in new home sales five-times more than the median forecast in Bloomberg's survey. Yet did not seem to be bipolar as conventional wisdom has it, swinging between recession and inflation anxiety. The implied yield of the October Fed funds contract rose two basis points to 2.95%, unchanged on the week. Another way to look at it, the odds of a 75 bp hike in September stands at almost 60% compared with 52% at the end of last week and slightly less than 50% the prior week (August 12). Nor did equities recover from Monday's gap lower opening. Indeed, while the S&P 500 and NASDAQ largely traded within Monday's range, the Dow Industrials continued to sell off. It is approaching the (38.2%) retracement of the rally off the mid-July low (~30144) found near 32700. A similar retracement in the S&P 500 is near 4095. The NASDAQ found support near its retracement around 12350. The US reports the preliminary estimate of July durable goods orders. The real sector data has held up better than the survey data. One element of durable goods orders that may not be appreciated by economists yet is what appears to be a surge in US arms sales abroad. There seems to be a synchronized arms build-up and demand for US-made weapons is clear. Separately, today's report will be flattered by the jump in Boeing orders. The company reported 130 orders last month, the most since June 2021 after 50 orders in June. Of those orders 27 came from foreign companies up from 20 in June, and the most since January. On the other hand, its deliveries fell to 26 from 51, the least since February. The focus is on the Fed's Jackson Hole symposium that begins tomorrow. Fed Chair Powell is set to speak Friday (10 am ET). Some observers expect him to play up the element in the minutes that recognized the risk that the central bank would tighten too much. However, in the minutes, it was set up in contrast to the bigger risk that inflation getting embedded into business and household expectations. We recognize the market's penchant for reading/hearing a dovish twist to Powell and the Fed even though they are tightening policy faster than most observers had imagined even a few months ago. The pace of the balance sheet adjustment is also set to double starting next month. Separate from the FOMC minutes, the minutes from the discount rate meeting were reported yesterday, and both the Minneapolis and St. Louis Feds called for 100 bp hike in the discount rate before the July 26-27 FOMC meeting but did not convince their colleagues. Nine favored a 75 bp increase, while the KC Fed called for a 50 bp increase. George, the President of the KC Fed supported a 75 bp increases in the Fed funds target at last month's meeting.   The US dollar posted a big outside down day yesterday against the Canadian dollar, trading on both sides of Monday's range and settling below Monday's low. However, there has been no follow-through today and a consolidative tone is evident. It settled near CAD1.2955 and has spent no time below it so far today. It has been capped around CAD1.2985. With softer equities, we ae inclined to see the greenback push back above CAD1.3000 and see resistance near CAD1.3020-30. The US dollar fell yesterday for the second day against the Mexican peso. Its 0.80% drop was the most in nearly two weeks. Selling today has extended its loss to around MXN19.9365, a four-day low. Mexico reports CPI for the first half of August. It is expected have accelerated, with the year-over-year rate rising to 8.55% form 8.14%. The core rate is seen slightly above 7.8% from 7.75%. The central bank meets late next month and another 75 bp hike seems most likely.      Disclaimer   Source: New Recession Worry Stalls Dollar Express but Doesn't Derail It
Fasten Your Seatbelts! US Dollar (USD) Will Knock Our Socks Off... Unless...

Fasten Your Seatbelts! US Dollar (USD) Will Knock Our Socks Off... Unless...

Alex Kuptsikevich Alex Kuptsikevich 24.08.2022 12:32
As is often the case, markets find themselves at important turning points ahead of significant scheduled events. One of the latter is the Monetary Policy Symposium in Jackson Hole, which starts later this week. This resort's signs could break the Dollar's rise or accelerate it by removing the final obstacle. In FX, the Dollar index made a 20-year high above 109.2 earlier in the week and then we saw some profit-taking activity, which caused the Dollar to slide around 1% against a basket of major peers. How the Dollar will close this week likely determines the dynamics for the next few months. Fed officials have spent the last couple of weeks actively managing expectations, indicating that the central bank has a more hawkish approach to policy, denying the problems in the economy that investors so fear. Traders in the markets are speculating whether this means the risk of a third consecutive rate hike of 75 points in September. In our view, the higher odds are that the Fed is leading exactly to that scenario and Powell's comments will proclaim the ultimate victory of that scenario. The hawks have a strong labour market and the need to anchor inflation expectations on their side. In this scenario, the dollar index is moving towards 120 (+10.5% to the current price), which is at its 2001-2002 highs. It is likely that on the approach to these levels, even the hawkish Fed and Treasury are concerned about a strong dollar. After all, along with lower inflation and faith in the main reserve currency, the world will get "side effects" in the form of extreme financial market volatility and a sharp slowdown of the global economy, which is also not in the interests of the USA. An alternative scenario is that Powell has probably learned his lesson from 2018 and is now paying more attention to signals from the market. Back then, four years ago, he was pushing the idea of further rate hikes, which scared the markets. The S&P500 then fell almost 20% from its peak, touching its 200-week average at one point. Near those levels, Powell got softer, and just over six months later, he cut rates altogether. If Powell and Co. have concluded this story, they will pay more attention to market sentiment. In that case, the markets will hear another batch of vague promises, leaving all doors open for the committee on the next monetary policy steps. Confirmation that the Fed is easing its pressure on the markets will form a double top in the DXY and reverse towards 103.7 - the 2020 peak. However, we cannot rule out that this will be the start of a longer and deeper dollar pullback.
Forex: EUR/USD Drop Will Be Lasting And It Is Just The Beginning

Forex: EUR/USD Drop Will Be Lasting And It Is Just The Beginning

InstaForex Analysis InstaForex Analysis 24.08.2022 13:22
Relevance up to 12:00 2022-08-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical analysis: EUR/USD has been trading downside today and I see the breakout of the hourly bear flag pattern, which is good confirmation for further downside movement. Trading recommendation: Due to the breakout of the bear flag this morning, I see further drop in play. Watch for potential selling opportunities on the intraday rallies with the downside objectives at 0.9890 and 0.9715. Stochastic is showing fresh bear cross and potential for the downside rotation. Key resistance is set at the price of $1.0000   Source: Forex Analysis & Reviews: EUR/USD analysis for August 24 2022 - Breakout of the bear flag pattern  
Analyzing Monday's Trades: EUR/USD on 30M Chart

Forex: USD/JPY Is Preparing For A Jump? Technical Analysis

InstaForex Analysis InstaForex Analysis 24.08.2022 13:40
Relevance up to 11:00 2022-08-25 UTC+2Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. USD/JPY: The chart shows the movement of USD/JPY in the four-hour (H4) chart. After trading around the resistance level of 137.60, USD/JPY quotes declined, indicating that the protracted correction is complete. The next target price level that is under consideration is £ 134.50 (per $1), with a slight upward correction to £ 135.50. Good luck! Source: Forex Analysis & Reviews: Technical analysis of USD/JPY
ECB's Knot: July Rate Hike Necessary, Beyond July Uncertain; Canadian CPI Supports Rates on Hold; Global Crypto Market at $1.2 Trillion; Oil Market Tightens with Russian Shipments Drop and China's Support Measures

Forex: GBP/USD Reached 1.1825, USD/JPY Hit 136.82 Yesterday | Stocks: S&P 500 Decreased By 0.22%

ING Economics ING Economics 24.08.2022 13:52
Asia trading to stay defensive ahead of Powell's speech at Jackson Hole on Friday.   Source: shutterstock Macro outlook Global: US stocks managed not to fall sharply yesterday. But that’s about the best that can be said of them. An initial rally in line with equity futures indications dissipated quite quickly, and it doesn’t feel like we will see any substantial moves higher this side of Powell’s Jackson Hole speech on Friday. On that front, Neel Kashkari yesterday was quoted talking about the need for the Fed to dampen inflation. No hints about a slowdown of rates or 2023 cuts. That could be a clue as to Powell's tone on Friday. The S&P500 declined only 0.22% on the day, the NASDAQ was flat from the previous day. Equity futures are again indicating a modest gain on opening today, but that may be about all we get from stocks for the time being. Bond markets were in the driving seat at the end of last week and the beginning of this week,  but yesterday, they did very little, which probably explains a lot of inaction in other markets. 2Y US Treasury yields fell just 1bp to 3.3%. The yield on 10Y Treasuries added 3.2bp rising to 3.046%. EURUSD managed to claw back some ground in lacklustre markets compared to this time yesterday, though it failed to hold above the parity level. The AUD did manage to push back above 69 cents, but it is looking pressured in early Asian trading today on a day with nothing major on the macro calendar. Cable also pushed higher, recovering to 1.1825 as did the JPY, which is now back down to 136.82. Asian FX was also a bit stronger over the last 24 hours, though there were notable omissions to that list, mainly from North Asia. TWD and KRW remain under pressure, along with the THB to a lesser extent. G-7 Macro: Eurozone Composite PMIs fell broadly as expected in August, with the headline index down to 49.2 from 49.9 in July, indicating economic contraction. Here’s a link to a note from our Eurozone team if you want more detail. And as we mentioned yesterday, July US new home sales fell to 511,000 on an annualized basis, even weaker than had been expected. This is the weakest sales growth in six years and will put further downward pressure on home prices, though probably not yet rents for some more quarters. Pending home sales today will add to the US housing story, together with July durable goods orders.   China: Sichuan's lack of hydroelectricity power has been partly solved by switching to coal-fired power. Though not a perfect solution in terms of Co2 emissions, at least the damage due to the lack of electricity to the economy is minimised. But at the same time, more cities are suffering from a lack of water for drinking and agriculture. The critical part is drinking water, and the government is delivering drinking water to affected locations. The damage so far of loss of agricultural produce in Jiangxi is CNY1.96 bn, which is still small compared to GDP of more than CNY114 tr in 2021. China is going to use cloud seeding to increase rainfall but that needs clouds in the sky to be thicker. As such, we do not expect there will be any immediate solution to this year’s drought. On real estate, more local governments have reduced non-first home mortgage down-payment ratios and mortgage rates. This should release more potential demand for residential properties, but we believe that home buying activity will only pick up when the public sees uncompleted projects finished, which could take more than a quarter. Korea: The business sentiment index showed that the manufacturing outlook for August rebounded to 82 (vs 80 in July), while the non-manufacturing outlook remained unchanged at 81 for the second month.  Although business concerns over future macro conditions have intensified, the recent stabilization of commodity prices appears to have had a positive effect on improving business sentiment among manufacturers. Indonesia: Bank Indonesia (BI) hiked rates unexpectedly yesterday ahead of a planned price increase for subsidized fuel.  We had expected BI to hike after the fuel price increase, but they opted to hike "preemptively" as both headline and core inflation are now expected to exceed the target this year.  BI also announced a new bond purchase scheme where the central bank would actively sell shorter-dated bonds while buying up the long end, resulting in a flatter yield curve.  The Operation Twist-like strategy would be deployed by BI to support IDR (attractive yields on the short end) while containing borrowing costs. What to look out for: Jackson Hole symposium Thailand trade (24 August) US durable goods orders and pending home sales (24 August) South Korea PPI inflation (25 August) Hong Kong trade balance (25 August) Bank of Korea policy (25 August) US initial jobless claims and GDP (25 August) Powell speaks at Jackson Hole symposium (26 August) Japan Tokyo CPI inflation (26 August) US Univ of Michigan sentiment (26 August) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

Thursday's US Data May Let British Pound (GBP) Increase

Kenny Fisher Kenny Fisher 24.08.2022 14:17
The British pound has reversed directions today and is in negative territory. In the European session, GBP/USD is trading at 1.1778, down 0.44%. Weak US New Home Sales sends pound higher Tuesday was an interesting day for the pound. Despite weak manufacturing data out of the UK, GBP/USD gained close to 1% before paring some of these gains. The reason for the pound’s spike came from across the pond, as US New Home Sales for July was much weaker than expected, with a reading of 511 thousand. This was below the estimate of 575 thousand and the June reading of 585 thousand. The pound promptly jumped after this housing release, as soft data raised market hopes that the Federal Reserve would ease up on interest rates due to a cooling economy. We could see the pound react to upcoming key US releases – Durable Goods Orders today and Preliminary GDP on Thursday. If these readings are weaker than expected, I would not be surprised to see the pound gain ground. The UK Manufacturing PMI slid into contraction territory in August. The index fell to 46.0, down from 52.1 in July and below the estimate of 51.1. The dismal reading is part of a pan-European downward trend in manufacturing, which has been made worse by the prolonged war in Ukraine. Output has been hampered by higher costs, a drop in demand and supply chain problems. The week wraps up with Fed Chair Powell addressing the Jackson Hole Symposium. The Fed has been hammering out a hawkish message, saying it plans to continue raising rates, as the titanic battle against inflation is far from over. The markets haven’t listened all that carefully, ever since the drop in US inflation raised speculation that the Fed might make a U-turn and ease up on policy. It will be interesting to see how the markets react to what is expected to be a hawkish message from Powell. GBP/USD Technical  GBP/USD faces resistance at 1.1924 and 1.2005 There is support at 1.1699 and 1.1568 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound under pressure, US Durable Goods looms - MarketPulseMarketPulse
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

FX: Euro (EUR) To US Dollar (USD) - Technical Analysis - 24/08/22

InstaForex Analysis InstaForex Analysis 24.08.2022 14:39
Relevance up to 09:00 2022-08-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The EUR/USD pair had made a new swing low at the level of 0.9901 and then bounced from the extremely oversold market conditions. The nearest technical resistance is located at the level of 1.0000 and needs to be clearly violated for a more solid bounce. Please notice the weak and negative momentum on the H4 time frame chart supports the short-term bearish outlook for EUR with a potential target seen at the level of 0.9900 or even lower. The US Dollar is still being bought all across the board, so the bearish pressure on EUR is still strong.     Weekly Pivot Points: WR3 - 1.0089 WR2 - 1.0057 WR1 - 1.0035 Weekly Pivot - 1.0025 WS1 - 1.0003 WS2 - 0.9992 WS3 - 0.09960 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue lower towards the level or 0.9900 and below. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue.   Read more: https://www.instaforex.eu/forex_analysis/289751
USD/JPY Reaching 130-135? It Seems It Maybe Not Impossible

Forex: British Pound (GBP) To US Dollar (USD) Chart Shows A Downtrend - GBP/USD - Technical Analysis - 24/08/22

InstaForex Analysis InstaForex Analysis 24.08.2022 14:44
Relevance up to 09:00 2022-08-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The GBP/USD pair had broken below the trend line support around the level of 1.1916 and made a new swing low at the level of 1.1716. The nearest technical resistance is seen at the level of 1.1890 and this level is the next target for bulls. Nevertheless, after the 163 pips bounce form the new swing low, the bulls up move was capped at 1.1876 (trend line resistance) and the market reversed down again. The larger time frame trend (daily and weekly) remains down until further notice.     Weekly Pivot Points: WR3 - 1.18835 WR2 - 1.18488 WR1 - 1.18267 Weekly Pivot - 1.18141 WS1 - 1.17920 WS2 - 1.17794 WS3 - 1.17447 Trading Outlook: The Cable is way below 100 and 200 DMA , so the bearish domination is clear and there is no indication of down trend termination or reversal. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame chart last week. The next long term target for bears is seen at the level of 1.1410. Please remember: trend is your friend.   Read more: https://www.instaforex.eu/forex_analysis/289753
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

Forex: GBP/USD Downgoing Trend. Is There A Chance?

InstaForex Analysis InstaForex Analysis 24.08.2022 15:05
Relevance up to 19:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Preliminary data on business activity indices in the UK, in principle, remained unnoticed, although in fact they turned out to be worse than forecasts that were not even comforting. Only the index of business activity in the service sector turned out well, which decreased from 52.6 points to 52.5 points, with a forecast of 51.8 points. The manufacturing index, instead of decreasing from 52.1 points to 51.3 points, literally collapsed to 46.0 points. As a result, the composite index of business activity decreased from 52.1 points to 50.9 points, although it was expected to decline only to 51.3 points. Composite PMI (UK): The market revived only on the release of similar data on the United States, which also turned out to be noticeably worse than forecasts. Only the manufacturing index turned out to be better than them, which fell from 52.2 points to 51.3 points, while it was expected to fall to 51.1 points. But the index of business activity in the service sector fell from 47.3 points to 44.1 points. But they were waiting for its growth to 48.0 points. Because there is nothing surprising in the fact that the composite business activity index, instead of rising from 47.7 points to 49.0 points, fell to 45.0 points. Composite PMI (United States): Such weak data made it possible for the pound to rise above the 1.1800 mark, where it continues to be in. Given that the macroeconomic calendar is almost empty today, most likely the market will stagnate in anticipation of tomorrow, when the conference starts in Jackson Hall. Where Federal Reserve Chairman Jerome Powell will give his speech, from whom they are waiting for signals about the adjustment of the policy of the US central bank. Moreover, in the direction of lowering the growth rates of interest rates. The GBPUSD currency pair, after a short stagnation within the support level of 1.1750, increased the volume of long positions. This resulted in forming a technical pullback in the market by about 120 points. Given the overheating of short positions in the pound for one and a half weeks, the current pullback is the least that could happen on the market. The technical instrument RSI H4 left the oversold zone at the time when the rollback is formed. The signal to buy was the critical oversold level of 17.65. The MA moving lines on the Alligator H4 indicator are still pointing down as the retracement is relatively small compared to the down cycle. Expectations and prospects Despite the scale of the pullback, the pound is still oversold. For this reason, keeping the price above 1.1880 may push bulls to form a full-size correction in the market. Also, in order to prolong the downward trend, the quote needs to stay below the level of 1.1750 in a four-hour period. Comprehensive indicator analysis in the short-term and intraday periods indicates a long position due to a rollback. In the medium term, the indicators are oriented to sell, due to updating the local low of the downward trend. Source: Forex Analysis & Reviews: Hot forecast for GBP/USD on 24/08/2022
China’s Caixin Manufacturing PMI Data Might Support The New Zealand Dollar (NZD)

NZD/USD Could Fluctuate! New Zealand Dollar May Be Supported By Retail Sales!

Kenny Fisher Kenny Fisher 24.08.2022 20:06
The New Zealand dollar continues to show volatility this week. In the North American session, NZD/USD is trading at 0.6182, down 0.48%, erasing all of Tuesday’s gains. New Zealand retail sales expected to rebound Later today, New Zealand releases retail sales for the second quarter. The markets are expecting a strong rebound of 1.7%, after the Q1 reading of -0.5%. The release is expected to reflect pent-up consumer demand after Covid restrictions were lifted in April. A stronger-than-expected release could give the New Zealand dollar a lift. The RBNZ will be carefully monitoring the retail sales release, as a strong reading would indicate that the economy remains strong and can continue to absorb higher interest rates. The RBNZ has been aggressive, raising rates by 50 basis points at four straight meetings. The central bank is expected to add another 50bp hike at the October meeting, which would bring the cash rate to 3.50%. Inflation has hit 7.3%, but the RBNZ is confident that it will peak soon and expects inflation to fall to 3.8% by the end of 2023. The central bank is cautiously positive about the economic outlook, predicting that the economic slowdown will not turn into a full-blown recession. Over in the US, durable goods orders for July were a mix. The headlines reading slipped to 0.0%, down sharply from 2.2% in June and missing the estimate of 0.6%. Core durable goods was unchanged at 0.3%. The weak data did not weigh on the US dollar, unlike the case after a weak US New Home Sales release on Tuesday, which sent the US dollar broadly lower. Investors are now shifting attention to Thursday’s US Preliminary GDP for Q2. In July, the initial GDP estimate came in at -0.9%, settting off a storm of debate as to whether the US economy was in a recession after back-to-back quarters of negative growth. The debate had political overtones as well, with the White House, trying to avoid being tainted with the “R” word, went to great pains to point out that there are other definitions of a recession. The second GDP estimate is likely to come in at -0.8% or -0.9%; any other number would be a surprise and would likely result in some volatility for the US dollar. NZD/USD Technical NZD/USD faces resistance at 0.6227 and 0.6366 There is support at 0.6126 and 0.6075 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZ dollar slides below 62, retail sales next - MarketPulseMarketPulse
Escalating Russia-Ukraine Tensions Amplify Oil Supply Risks: The Commodities Feed

Forex: Dead Cat Bounce On The 4-hour Chart Of EURUSD

InstaForex Analysis InstaForex Analysis 24.08.2022 23:00
Relevance up to 14:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. If even aggressive rate hikes don't help the currency, can something save it? Money markets, looking at skyrocketing inflation in the euro area, expect the ECB to raise the deposit rate by 100 bps by October, which on paper should lend a helping hand to the EURUSD. Alas, theory is one thing, and practice is quite another. The more aggressively the European Central Bank tightens monetary policy, the worse the economy will be. The deeper the recession will be, and it is the divergence in US economic growth and the currency bloc that is pushing the major currency pair downward. Dynamics of the expected ECB rate changes by October According to JP Morgan, a large increase in borrowing costs does not help the currency if it is done in order to anchor inflationary expectations and hurt GDP. Indeed, many European currencies, including the euro and the pound, are not falling because their issuing central banks are extremely slow. On the contrary, their determination could seriously harm the economy. On the other hand, what is left for Christine Lagarde and her colleagues to do? If you do not raise rates, the fall of EURUSD can turn into a real nightmare. Europe, dependent on raw materials, is facing rising prices for it, exacerbated by the depreciation of the regional currency. Under such conditions, inflation is growing like mushrooms after rain, and the passivity of the ECB can only accelerate this process. Dynamics of EURUSD and European inflation The weakness of the euro is due, among other things, to expectations of a slowdown in the monetary restriction of the European Central Bank in 2023. The futures market predicts an increase in the deposit rate to a peak of 2% by September next year. That is, after a stormy start, the Governing Council will press the brakes. But by then, the federal funds rate may exceed 4%. The ECB is in an extremely difficult position. And this leaves its mark on the views of its representatives. If Fabio Panetta calls for caution, as an excessively rapid tightening of monetary policy will harm economic growth, Isabel Schnabel, on the contrary, notes the weakness of the euro as a factor contributing to the acceleration of inflation and suggests acting decisively. The Fed's position looks much simpler. Inflation in the US is slowing, allowing the central bank to slow down but remain determined to keep consumer prices from lingering at elevated levels for long. Fed Chairman Jerome Powell's rhetoric is expected to be hawkish at the Jackson Hole symposium, which is why both US stock indices and EURUSD are falling. Our task is to hold the previously formed shorts on the main currency pair until Powell's speech and then start taking profits on them. T echnically, there was a dead cat bounce on the 4-hour chart of EURUSD, and the rebound from dynamic resistance in the form of a moving average allowed us to build up short positions. At levels 0.984 and 0.972, it makes sense to close some of them. Source: Forex Analysis & Reviews: Euro sees no bottom  
RBA Pauses Rates as Australian Dollar Slides; ISM Manufacturing PMI in Focus

Fears About The Imminent Recession In The US Economy Will Force The Fed To Put On The Brakes

InstaForex Analysis InstaForex Analysis 24.08.2022 23:55
Relevance up to 12:00 2022-08-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. A bad example is contagious. In the first half of August, gold rose following the US stock market, which required the Fed to slow down the pace of tightening monetary policy in response to the slowdown in US inflation. Thus, stock indices put spokes in the wheels of the Fed, weakening financial conditions. This could not continue indefinitely, and the S&P 500 began to plummet, fearing Jerome Powell's hawkish rhetoric at Jackson Hole. Following this, the precious metal closed in the red zone for the first time in the last five weeks. Weekly dynamics of gold What difference does it make to XAUUSD if China increased its gold imports from Switzerland to 80 tonnes in July, which is twice as much as in June and eight times as much as in May, if the fate of the precious metal is in the hands of the Fed? For a long time, it ignored comments from FOMC officials about the continuation of the monetary restriction cycle, including calls from St. Louis Fed President James Bullard to raise the federal funds rate by 75 bps in September, but this could not continue indefinitely. It is unlikely that Powell's speech at Jackson Hole will be radically different from his colleagues. The same as Minneapolis Fed President Neel Kashkari, who, against the backdrop of low unemployment and high inflation, sees only one way for rates—up. Another thing is that the chairman of the Fed is the chairman of the Fed. A figure of a different scale, whose speech is more expensive not to react to. To fight inflation, the Fed needs higher Treasury yields and a strong dollar to slow wage and import price increases, and it will get them. With consumer prices at 8.5% and the federal funds rate at 2.5%, there is little doubt that the cycle of monetary tightening is not over. The Central Bank is far from doing its job. Borrowing costs can rise to 4–4.5%, and this is a completely different story for all financial markets, as well as for the US dollar and gold. Dynamics of gold and US dollar Should we expect a decrease in XAUUSD quotes to 1600 or 1500 against such a background? In my opinion, the last figure is difficult to achieve. Recent business activity statistics show a slowdown in indicators around the world, from Australia to North America. Some countries have seen Purchasing Managers' Indices drop below the critical 50 mark, signaling that a recession is near. Under such conditions, the old scheme may start to work: fears about the imminent recession in the US economy will force the Fed to put on the brakes, which will reduce the yield of Treasury bonds and weaken the US dollar. The question is, when exactly will this happen? Technically, on the daily chart, gold is trying to return to the limits of the fair value range of $1740–1800 per ounce. If it works out, we will sell it on the rebound from resistance at $1775–1780. No—let's increase the short positions formed from $1765 with targets at $1695 and $1665 per ounce.   Source: Forex Analysis & Reviews: Gold flees from the Fed's wrath  
European Construction Markets: A Look at Poland, France, and Turkey's Prospects

The Governor Of The Central Bank Of Finland Thinks CBDC Is The Solution To The Problem

InstaForex Analysis InstaForex Analysis 25.08.2022 00:04
Relevance up to 15:00 2022-08-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. One of the theories that pushes the cryptocurrency market up is a misunderstanding of the economy and monetary policy pursued by central banks worldwide. Conspiracy theories could also be added here, but the governor of the central bank of Finland did not go that far in his interview. In his opinion, the central bank's money in digital form can be trusted unconditionally. "Some joked that the central bank's digital currency (CBDC) is the solution to the problem. Although I may not be an ardent fan of CBDC, I think that detractors unfairly downplay the potential advantages of this tool," said Olli Rehn during a speech at the University of California at Berkeley. Since last year, when the special activity began, central banks worldwide have begun to explore the benefits of CBDC. Some of them, for example, China and Nigeria, have already introduced digital currencies inside their countries. The European Central Bank is still in the middle of an experiment with the digital euro, which is due to end in October 2023. However, the bank's public announcement about the digital euro has been repeatedly criticized for the perceived dangers and risks. During the interview, Rehn also warned against the potential risks of moving to a more digital economy, as evidenced by the growth of cryptocurrency markets over the past five years. According to Rehn, the high volatility of crypto assets will be quite difficult to link with monetary policy and the general movement of prices. "Central banks should prepare for a digital future in which the demand for cash as a medium of exchange may decrease, requiring convertibility into digital money by the central bank. We must remember that our main task is maintaining price and financial stability," Ren said. If we return to the real market and set aside the future, the further direction of bitcoin will depend directly on what the Fed representatives say at the end of this week. Several politicians have already made disappointing statements that they support a further hard course of raising interest rates, which goes against market expectations and affects the demand for risky assets, which includes bitcoin. Bitcoin buyers tried returning to the $21,500 level earlier this week, but it didn't work out well. Most likely, the pressure on the trading instrument will continue to increase as investors abandon risk. The bulls' focus is now on the nearest support of $20,800, a fall to which for the third time could be fatal for the bulls. In the event of a breakthrough in this area, the $19,966 level will play an equally significant role. Its breakdown will send the trading instrument back to the lows of $19,232 and $18,600. It is necessary to consolidate above $21,500 as quickly as possible to restore the demand for bitcoin. It is necessary to break above the resistance of $22,180 and $22,670 to build an upward trend. Fixing this range will give a real prospect of returning to the highs: $23,180 and $23,680. Ether buyers have every chance to miss the nearest support of $1,605, so it is not yet possible to talk about the resumption of a bullish scenario. There will be a change in the market direction only after the return of the $1,670 level, allowing you to get to $1,740 and reach the $1,820 test. The $1,885 area will act as a further target. While maintaining pressure on the trading instrument, buyers will likely show themselves at around $ 1,540. A breakdown at this level will quickly dump the ether at a minimum of $1,490 with the prospect of updating to $1,420. Source: Forex Analysis & Reviews: The Governor of the Central Bank of Finland supports CBDC  
The RBA Surprised With A Smaller 25 bp Hike , Sterling (GBP) Rose, The USD Has Weakened

Australian Dollar (AUD) To US Dollar (USD) - Forecast - 25/08/22

InstaForex Analysis InstaForex Analysis 25.08.2022 08:29
Yesterday, the Australian dollar fell by 20 points, and this morning it has grown by 25 points. There is resistance at 0.6950 just ahead, the Marlin Oscillator is near the zero line.     If there is a simultaneous price transition above 0.6950 and the Marlin Oscillator into the positive area, then the price will receive an impulse to grow to the target level of 0.7015. But if there is a price reversal and the oscillator, then an attack will be made again at 0.6870. The subsequent departure under the support opens the 0.6755 target.     The price resistance of 0.6950 worked out the MACD line on a four-hour scale, the level increased. Accordingly, either a price reversal, completion of the correction, or, after consolidating above the level, it could possibly rise to 0.7015. The Marlin Oscillator is still upside, so the situation is equivalent in both scenarios. Relevance up to 04:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/319839
Short-term analysis - Euro to US dollar by InstaForex - 31/10/22

EUR/USD Can Surprise Us Today! Forex Market Developments May Be Gripping! ECB Minutes Are Released This Afternoon!

ING Economics ING Economics 25.08.2022 09:52
The dollar is slightly softer today as the People's Bank of China (PBoC) seemed to issue a protest against recent renminbi weakness with a stronger fixing. Additional stimulus measures from China are also helping the commodity complex. Yet US yields remain at their highs and dollar dips should be limited before tomorrow's speech from Fed Chair Powell The People's Bank of China seems to have issued a protest against recent renminbi weakness with a stronger fixing USD: Watch out for initial claims and Fed speakers today The dollar is slightly softer today and risk sentiment is marginally better. Activities by Chinese authorities probably account for both of these developments but are not seen as game-changing. On the dollar side, the recent upside breakout in USD/CNY had hit emerging currencies and contributed to recent dollar strength. The fear was that the PBoC was going to allow another 6% fall in the renminbi, similar to April/May this year. However, for the first time in recent weeks, the PBoC has fixed the renminbi stronger than model-based estimates had suggested – fixing USD/CNY at 6.8536 versus 6.8635 from the models. The PBOC typically uses fixings to direct market sentiment and today's message seems to be that the renminbi might have fallen too far, too fast. Additionally, China has announced new fiscal stimulus measures (largely on the infrastructure side) worth around CNY1trn. Yet this is not particularly large and looks unlikely to turn around the sentiment on China which is currently weighed by its zero-Covid policy and unwinding the excesses of the property sector. News from China may be enough to slow dollar strength today but looks unlikely to reverse core trends of higher energy prices weighing on the importers in Europe and Asia, plus the Fed having unfinished business with inflation. On this latter subject, today sees a raft of Fed speakers before tomorrow's main event of the week – Fed Chair Jerome Powell's keynote speech on the economic outlook. What impact could he have on markets? Well, US yields have firmed back up this week and our colleagues in the rates strategy department have made the good point that market-based inflation expectations are rising even as rates are going higher – suggesting the Fed will be in no mood to soften its stance. The hawkish Fed should keep the dollar supported on dips. In addition to Fed speakers today, we should see a modest upward revision to US 2Q GDP data and the weekly initial claims data. Buy-side surveys have suggested that it would take initial jobless claims moving above 300k (now 250k) to spark a Fed pivot. Given heavy long dollar positioning, the FX market does seem very sensitive to any softer than expected US data, hence the need to watch initial claims today. What does this all mean for  DXY? 108.10/15 looks important intra-day support and should determine whether DXY needs a correction back to the 107.00 area. We remain bullish on the dollar on the back of the Fed and the energy story, but heavy positioning is probably the biggest risk to the dollar right now.  Chris Turner EUR: German IFO and ECB minutes in focus EUR/USD is enjoying the slightly softer dollar environment and re-challenging parity. 1.0015/20 looks key intra-day resistance. Above there, the risk is of a short squeeze all the way to 1.0135. Determining whether we get that short squeeze today will be the US data (above), the August German IFO, and the release of the minutes of the July ECB minutes in which it hiked 50bp. Typically the ECB minutes are not a market mover, but today could shed light on whether the central bank wanted to cram in some hikes while it could. The market currently prices 57bp hikes at the 8 September meeting and 125bp by year-end. Notably, yield spreads have been moving in favour of EUR/USD this week (as UK rates have dragged eurozone rates higher more quickly than those of the US). Conditions could be ripe for a short squeeze. But major challenges from the gas crisis and the Fed remaining hawkish suggest EUR/USD rallies may stall in the 1.01/1.02 area this month. Chris Turner GBP: Gas drags Bank of England pricing around Surging gas prices look to be dragging Bank of England (BoE) pricing around, where markets now price 170bp of BoE tightening by year-end. This gas story looks here to stay for the next few months, with one of the fresh risks being whether the US hurricane season disrupts US gas production and LNG exports. With the market long dollars, Cable is at risk of a short squeeze. We see 1.1880 as key intra-day resistance here above which we could be looking at a retest of 1.20. For EUR/GBP we would still favour the 0.8400 area as higher GBP rates force foreign holders of UK Gilts to lower rolling forward hedge ratios.  Chris Turner CEE: All eyes on the forint, again Regional currencies are showing the first signs of relief, but we think it is too early to announce the end of the sell-off. Although the Polish zloty has stabilised after a week of weakness and the forint has shown rapid appreciation, gas prices are testing new highs and Friday's Jackson Hole symposium may once again return support to the US dollar. For the Polish zloty, we see a sideways move at the moment and a wait-and-see approach for further global developments. Today, however, all attention will be back on the forint and the National Bank of Hungary (NBH). The central bank has its weekly meeting scheduled for today, but like last week, we expect the one-week deposit rate to remain unchanged. Yesterday's move has brought some calm to the FX market, plus the NBH is scheduled to hold a regular monetary policy meeting on Tuesday next week. Thus, in our view, the NBH is saving its ammunition for the full meeting and does not want to risk a shot without effect, taking a lesson from the July sell-off. On the other hand, the market may still have some expectations that we think will not be met today, which again might not bring good news for the forint. Elsewhere, we could see some positive headlines regarding the negotiations between the Hungarian government and the European Commission. However, only from the Hungarian side, which leaves us cautious about the further development of this story. So overall, a move back towards 415 EUR/HUF is not out of the question over the coming days and we will see what the NBH reaction will be next week. Still, the forint is the only currency in the region currently supported by a rising interest rate differential and we should see a HUF rally back below EUR/HUF 400 in the case of positive news from the European Commission. However, this is certainly not a matter for the next few days and the forint will still have a tough time. Frantisek Taborsky  Read this article on THINK TagsPeoples Bank of China Jerome Powell FX Daily FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Price May Fall Under 1.0660

Euro (EUR) To (US Dollar) - Technical Analysis - 25/08/22

InstaForex Analysis InstaForex Analysis 25.08.2022 09:56
Euro bounce continues towards the resistanceTechnical Market Outlook: The EUR/USD pair had made a new swing low at the level of 0.9901 and then bounced from the extremely oversold market conditions. The nearest technical resistance located at the level of 1.0000 had been violated and bulls are now targeting the level of 1.0099. Please notice the neutral momentum on the H4 time frame chart might evolve to positive momentum if the bulls break above the short-term trend line resistance soon. The US Dollar is still being bought all across the board, so the bearish pressure on EUR is still strong, however now it is time for a correction.     Weekly Pivot Points: WR3 - 1.0089 WR2 - 1.0057 WR1 - 1.0035 Weekly Pivot - 1.0025 WS1 - 1.0003 WS2 - 0.9992 WS3 - 0.09960 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue lower towards the level or 0.9900 and below. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue.   Relevance up to 08:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/289924
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

Forex: GBP/USD - Is The End Of The Downtrend Near!? - Technical Analysis - 25/08/22

InstaForex Analysis InstaForex Analysis 25.08.2022 09:59
Technical Market Outlook: The GBP/USD pair has been seen testing the trend line resistance around the level of 1.1850. The nearest horizontal technical resistance is seen at the level of 1.1890 and this level is the next target for bulls. Nevertheless, after the 163 pips bounce form the new swing low, the bulls up move was capped at 1.1876 (trend line resistance from yesterday) as the momentum stays neutral. The larger time frame trend (daily and weekly) remains down until further notice.     Weekly Pivot Points: WR3 - 1.18835 WR2 - 1.18488 WR1 - 1.18267 Weekly Pivot - 1.18141 WS1 - 1.17920 WS2 - 1.17794 WS3 - 1.17447 Trading Outlook: The Cable is way below 100 and 200 DMA , so the bearish domination is clear and there is no indication of down trend termination or reversal. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame chart last week. The next long term target for bears is seen at the level of 1.1410. Please remember: trend is your friend.   Relevance up to 08:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/289926
Trend Reversal: West Texas Oil's Recent Minor Pull-Back Likely Ended

The Threat Of Energy Crysis Made Japan Forget About Fukushima! 7 Nuclear Reactors Are Waiting For Restart

Saxo Strategy Team Saxo Strategy Team 25.08.2022 10:11
Summary:  US Treasury yields climbed higher ahead of Jackson Hole, where the bar for hawkishness from Fed Chair Powell has been set high. USD gained modestly but the Japanese yen has been largely stable. Energy crisis threats are getting louder, and a re-embrace of nuclear power by Japan may just be the first step to long-term solutions. Crude oil rally was reignited, and coffee futures also extended gains on supply issues. Nvidia disappointment may bring more tech disappointment, but focus shifts to retailers reporting today. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities closed modestly higher, taking a pause after a 3-day decline, S&P 500 +0.29% to close at 4140, Nasdaq 100 +0.28%. Energy stock led as the WTI crude firmed up by 1.2%, following EIA data showing a fall in crude oil inventory, Apache (APA:xnys) +3.9%, Ceterra Energy (CTRA:xnys) +3.2%. Nordstrom (JWN:xnys) tumbled 20% and Macy (M:xnys) fell 4%, after the retailers lowered their earnings guidance the day before, citing slowdown in spending of shoppers. On the other hand, Peloton Interactive (PTON:xnas) jumped 20% on news that the sporting goods company plans to sell its products on Amazon (AMZN:xnas). Bed Bath & Beyond (BBBY:xnas) snapped a 5-day collapsing streak to bounce 18% on news of closing a new loan deal.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) U.S. yields climbed throughout the session, with initial selling triggered by a massive 22bp jump in the yield of 2-year U.K. Gilts across the pond. Treasury yields continued to edge up after digesting that headline durable goods orders came in flat, below forecasts but looking less weak once stripping out the more volatile transportation and defense orders. The result of the 45-billion 5-year auction was weak. 2-year yields rose 9bps to close at 3.39% and 10-year yields climbed 5bps to 3.10%.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) The news of 19 additional stimulus measures from China’s State Council coming out after the Hong Kong market close fueled buying in Chinese ADRs in the New York session, the NASDAQ Golden Dragon China Index +2.5%.  During the Hong Kong session, however, the equity markets slid, Hang Seng –1.2%, CSI 300 -1.9%. Chinese internet stocks were weak. Kuaishou (01024:xhkg) fell 8.1% in spite of reporting better-than-expected earnings as some traders attributed the fall to overhang of the stake of Tencent in the company. Meituan (03690:xhkg), another company that counts Tencent (00700:xhkg) a major shareholder, fell 2.7%. Chinese auto names dropped, led by XPeng (09868:xhkg) that tumbled 12.2%, followed by over 5% declines in other EV names.  The State Council backed newspaper, Economic Times, ran a piece saying that the special loans to developers initiative much talked about earlier this week was not to fuel speculation in properties but to ensure delivery of stalled presold residential units, Longfor (00960:xhkg) -3%, Country Garden(02007:xhkg) -3.9%.  The Stock Exchange of Hong Kong will be closed this morning due to a typhoon and is scheduled to resume trading in the afternoon.  Higher yields bring modest gains in USD With US 10-year yields going above 3.1%, there was a modest bump higher in US dollar which is now close to its cycle highs, recovering from the post-PMI lows. EURUSD trades close to parity, looking for further direction as Jackson Hole is awaited and the energy crisis related weakness seems to be priced in for now. Higher US yields however didn’t push up USDJPY considerable, but commodity currencies continued to face further pressure. NZDUSD was the weakest on the G10 board, and pressure aggravated this morning with Q2 NZ retail sales disappointing at -2.3% QoQ vs. expectations of 1.7% gains. Crude oil prices (CLU2 & LCOV2) Price action in crude oil intensified with Brent back above $101/barrel in Asian morning and WTI futures trading above $95. US crude oil stockpiles fell, with commercial inventories down 3.3m bbl last week, according to EIA data. This was driven by record exports of crude and refined oil, and comes despite a record 8m bbl SPR release and net imports rising by 0.9m b/d. Both technical and fundamental factors are turning supportive, and a potential short squeeze is brewing. Coffee futures extend gains Coffee, both Arabica and Robusta, rallying strongly for a third day as the supply outlook continues to deteriorate. The June high at $2.42 in Arabica the only level standing in the way for a push towards the Feb 11-year high at $2.605. Robusta stocks in Vietnam are expected to have dropped by 50% at end-September while arabica supplies have been hurt by weather conditions in Brazil, Colombia and Central America. What to consider? A weaker message from Powell could bring a risk rally While most of the Fed members lately have been consistent in their view on inflation and the need for more aggressive rate hikes, the bar for Powell has been set high. Market pricing for September rate hike has shifted towards 75bps with 60% odds, up from about 45% earlier in the week. Moreover, the market now prices in peak Fed funds rate at above 3.75%, which is pretty much in-line with the dot plot. Additionally, only about 37bps of easing is priced in for next year, and given the uncertain economic environment, Powell may chose to stay on the sidelines. Any hints on staying data-dependent or highlighting the risk of an economic slowdown may be viewed as dovish, and result in a risk rally. US durable goods data remains mixed July durable goods orders data disappointed on the headline but core orders came in above expectations, again suggesting resilience in the economy. Headline was unchanged m/m against expectations of 0.6% gain, with June’s print revised higher to 2.2% from 2.0% earlier. Excluding the volatile components such as transportation and defense, durable goods orders were up 0.3% and 1.2% respectively. Japan’s nuclear plans getting a leg up The threat of an energy crisis has prompted Japan to make headway on bring back nuclear power after more than a decade following the Fukushima disaster. Japan plans to restart seven more nuclear reactors from next summer onwards, and PM Kishida said that the government will also explore development and construction of new reactors as the country aims to avoid new strains on power grids that buckled under heavy demand this summer, and to curb the nation’s reliance on energy imports. Japan Tokyo CPI for August to show more price pressures Japan's Tokyo CPI for August is due on Friday morning, and it is likely to suggest further price pressures above the Bank of Japan's 2% target. Consensus expectations point toward another higher print of 2.7% y/y for the headline measure and 2.5% y/y on the core measure, signalling inflationary pressures will continue to question the Bank of Japan's resolve on the ultra-easy policy stance. Nvidia earnings may spell tech caution Nvidia (NVDA:xnas) reported Q2 revenue growing by 3% YoY and EPS $0.51, in line with expectations.  The company provided Q3 revenue guidance to be $5.9 billion, plus or minus 2%, missing the previous estimate of $6.92 billion. The share of the chip maker fell 4.5% in extended hours trading. China’s State Council rolled out 19 new stimulus measures to support the economy The crux of the new stimulus package consists of an incremental RMB300 billion financing from policy banks to provide equity-like capital for infrastructure projects and a new quota utilizing unused quota carried over from previous years to allow local governments to issue RMB500 billion special bonds by the end of October this year.  Emerging countries dominate in terms of nuclear capacity under construction According to the latest data released by the World Nuclear Association, the countries with highest nuclear capacity under construction are: China (23.3K MG), India (6.6K MG), Turkey (4.8K MG) and South Korea (4.2K MG). The United Kingdom is the first developed country in the list with 3.4K MG. France lags with only 1.6K MG, for instance. Nuclear energy is the subject of intense debate in several European countries. In our view, this is certainly one of the best options to support green transition and avoid a surge in the energy bill which will lead to lower purchasing power for longer.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 25, 2022  
EUR/USD Downtrend Continues: Factors Driving the Euro's Decline and Outlook

US President Cancels Up To $20,000 Student Debt (Before The Elections). It Will Cost ~$300 Bilion Over 10 Years!

Saxo Strategy Team Saxo Strategy Team 25.08.2022 10:22
Summary:  A quiet session yesterday for equities, even as US treasury yields jumped higher once again ahead of a highly anticipated speech tomorrow from US Fed Chair Jerome Powell at the Fed’s annual Jackson Hole conference. In Europe, the focus remains on the dire natural gas and power prices as prices seem to ratchet perilously higher every day. That taken into consideration, EURUSD trading near parity doesn’t rate as such a weak performance from the single currency.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Despite a shocking low PMI services figures for August, signs that financial conditions are beginning to tighten again, and surging US 10-year yield closing at 3.1%, S&P 500 futures pushed higher after initially trading to new lows in yesterday’s session. S&P 500 futures are extending their short-term momentum this morning trading around the 4,158 level which is still in the heart of the trading range of 4,100-4,170 which was established earlier this month. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) After having been closed in the morning due to a typhoon, Hong Kong resumed trading in the afternoon and the Hang Seng Index rallied 1.5% on new incremental stimulus measures from the Chinese Government to boost the economy. A-shares fluctuated between gains and losses and edged up as much as 0.2%. Coal miners, oil and gas, and crude tankers stocks gained. China internet stocks rallied, Alibaba (09988:xhkg) +4.3%, JD.COM (09618:xhkg) +5.1%, Baidu (09888:xhkg) +5.4%, Bilibili (09626:xhkg) +4.3%. US dollar edges back lower ahead of Jackson Hole After a feint higher yesterday, the US dollar generally closed lower yesterday across the board despite a solid new surge higher in US treasury yields as traders eye the Jackson Hole conference speech tomorrow from Fed Chair Powell. EURUSD continues to bob back toward the obvious psychological pivot level at parity, teasing that level this morning, while China played its part in helping the USD lower overnight with a surprisingly strong fixing for USDCNY after it hit a two-year high yesterday amidst reports from Reuters (citing unnamed sources) that dealers in China were warned from official sources against aggressively selling the yuan. JPY crosses Global bond yields are pulling back higher, with the Japanese government bond yields from 10 years and shorter on the yield curve frozen in their tracks due to the Bank of Japan’s yield-curve-control (YCC) policy, meaning that further upside in yields may be absorbed by the yen itself. USDJPY trades sideways as the USD is a bit softer, but other JPY crosses have pulled back higher, as AUDJPY threatens the top of the range soon (high in Jul. Near 95.70 vs. 95.05 this morning) and EURJPY bounced strongly after threatening a look at local support yesterday. The reaction in the US treasury market and Friday close after Fed Chair Powell’s speech at Jackson Hole will prove critical for whether a fresh aggravated rise in yields once again challenges the BoJ commitment to its YCC policy. Crude oil prices (CLV2 & LCOV2) Crude oil prices extended their gains following a volatile Wednesday that initially saw prices dip after the EIA reported a smaller than expected drop in US crude stockpiles. However, the report also showed a second week of lower production together with record exports of crude oil and products to energy-starved economies looking for alternative supplies to those from Russia. Diesel exports hit a record with an increased amount of gas-to-fuel switching underpinning demand. Not least from Europe where Dutch TTF gas touched $500 per barrel of crude oil equivalent (€300/MWh), and German power $1,100 per barrel (€646/MWh). In our latest update we highlighted the increased risk of short covering from funds who in anticipation of an economic slowdown had cut their net long exposure in WTI and Brent to a 28-month low. In Brent, the next level of upside interest can be found at $102.50. U.S. corn (CORNDEC22) U.S. corn trades higher for a seventh day, hitting a two-month high, supported by concerns that hot and dry weather in the Midwest during the final crop development period may limit the production outcome. A poor US harvest will likely exacerbate the food inflation that’s already been gripping the world this year with dwindling global grain stockpiles being driven by war, drought and the overall impact of climate change. The US is the biggest producer and exporter of corn which is used in everything from animal feed to biofuels and sweeteners. Above $6.64/bu, the December contract may take aim at $6.88/bu next. US Treasuries (TLT, IEF) US treasury yields rose again yesterday as demand at the 5-year US treasury auction was at the weak end of the range. The 10-year benchmark closed above 3.10% for the first time since late June. A 7-year auction is up today ahead of Fed Chair Powell’s Jackson Hole conference speech tomorrow, the most significant event risk for the treasury market until the next CPI release in September and then the September 21 FOMC meeting. What is going on? Emerging countries dominate in terms of nuclear capacity under construction According to the latest data released by the World Nuclear Association, the countries with highest nuclear capacity under construction are: China (23.3K MG), India (6.6K MG), Turkey (4.8K MG) and South Korea (4.2K MG). The United Kingdom is the first developed country in the list with 3.4K MG. France lags with only 1.6K MG, for instance. Nuclear energy is the subject of intense debate in several European countries. In our view, this is certainly one of the best options to support green transition and avoid a surge in the energy bill which will lead to lower purchasing power for longer. China’s State Council rolled out 19 new supportive measures to boost the economy The crux of the new stimulus package consists of an incremental RMB300 billion financing from policy banks to provide equity-like capital for infrastructure projects and urges issued to local governments to utilize unused quota balances carried over from previous years to issue RMB500 billion special bonds by the end of October this year.  The package includes a plan to facilitate state-owned electricity generating companies to issue RMB200 billion bonds.  Nvidia provides a weak outlook Investors already knew that Q2 would be a weak quarter given the profit warning earlier this month, but underlying demand continues below estimates with Q3 revenue guidance of $5.9bn +/- 2% is well below estimates of $6.9bn, but on a positive note the chipmaker is guiding gross margin of 65% which means that it expects profitability to remain in line with recent history. On the conference call management says that China has been the disappointment in terms of demand. Shares fell 4% in extended trading. US President Biden cancels up to $20,000 student debt ... with $10k in forgiveness for any borrower making less than $125k/year and $20k for holders of Federal Pell grants. The move affects tens of millions of Americans (and possible voters in the mid-term elections) and will cost an estimated $300 billion over 10 years. Salesforce growth is slowing down Q2 operating income was better than expected while revenue of $7.7bn up 22% y/y was in line with estimates. The FY revenue outlook of $30.9-31bn was below estimates of $31.7-31.8bn suggesting IT spending is slowing down amid uncertainty over the economy with July seeing a particular shift in customer attitude. Shares were down 4% in extended trading. Snowflake post strong guidance Q2 revenue was $497mn vs est. $468mn and updated its fiscal year operating margin guidance to 2% from previously 1% suggesting the company is able to maintain high growth while lowering its spending growth. The revenue beat was driven by an inflow of new customers. Shares were up 17% in extended trading. Coffee prices surge on Brazil and Vietnam supply worries Both Arabica (KCZ2) and Robusta (RCX2) coffee futures extended their three-day surge on signs of a deteriorating supply outlook. Stockpiles in Vietnam, the world’s top supplier of the Robusta variety, are expected to halve by the end of September from a year earlier while stocks of the Arabica bean monitored by the ICE exchange has slumped to a 23-year low. Freak weather in South America during the past year has decimated the production outlook for Brazil, Colombia and Central America, while recent dryness has already started to raise concerns about next year’s crop. The June high at $2.42 in Arabica being the only level standing in the way for a push towards the 11-year high at $2.605 reached in February. Natural gas has become the biggest component in the Bloomberg Commodity Index (BCOM) The index tracks the performance of 23 major commodity futures targeting a one-third exposure in energy, metals and agriculture. The target weights are set once a year every January and if prices shift significantly during the year, a reweighting will occur the following January. The 160% year-to-date surge in US natural gas futures has more than doubled its weight to 17% from 8%, and in the process made it the biggest component in the BCOM index, more than double that of WTI and Brent combined. What it means? The index has become more volatile and if maintained throughout the year a major rebalancing (selling of natural gas) will occur this January. What are we watching next? The Kansas City Fed hosts its annual symposium in Jackson Hole This year’s theme is “Reassessing Constraints on the Economy and Policy”. The symposium will last until 27 August. Fed Chair Jerome Powell will speak tomorrow. Given the loosening of financial conditions since the June FOMC meeting, the market has been concerned that Powell will echo the pushback against the notion that the Fed knows that it is set to materially slow its pace of policy tightening after the September 21 FOMC rate decision (majority looking for another 75 basis points). Data dependency will likely be underlined in his speech, but any guidance on the Fed’s approach to QT could also garner considerable attention as longer treasury yields pull back higher toward the cycle highs from June. Japan’s Tokyo CPI for August to show more price pressures Japan's Tokyo CPI for August is due on Friday morning, and it is likely to suggest further price pressures above the Bank of Japan's 2% target. Consensus expectations point toward another higher print of 2.7% y/y for the headline measure and 2.5% y/y on the core measure, signalling inflationary pressures will continue to question the Bank of Japan's resolve on the ultra-easy policy stance. Earnings to watch Today’s earnings focus is Fortum, Delivery Hero, and NIO. Europe’s energy crisis is putting immense pressure on utility companies and consumers. Fortum is not normally a company we find interesting but given the current crisis management’s assessment of the outlook is important to read. Delivery Hero sits inside the consumer economy and especially on the discretionary spending side with delivery of take-away orders; 1H revenue growth is expected at 76% y/y. NIO is in focus following the weaker than expected result from XPeng. Today: South32, Toronto-Dominion Bank, Fortum, Delivery Hero, AIA Group, China Life Insurance, CNOOC, CRH, Dollar General, Vmware, Marvell Technology, Workday, Dollar Tree, Dell Technologies, NIO Friday: Meituan, China Shenhua Energy, China Petroleum & Chemical Economic calendar highlights for today (times GMT) 0800 – Germany Aug. IFO Business Climate Survey 1130 – ECB Meeting Minutes 1230 – US Weekly Initial Jobless Claims 1230 – US Q2 GDP Revision 1430 – EIA Natural Gas Storage Change 1500 – US Aug. Kansas City Fed Manufacturing survey 2200 – New Zealand Aug. ANZ Consumer Confidence 2230 – New Zealand RBNZ Governor Orr to speak 2330 – Japan Aug. Tokyo CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 25, 2022
The EUR/USD Pair Is Still In A High Position On The 1H Chart

Forex: EUR/USD - Commitment Of Traders Shows Number Of Short Positions Increased!

InstaForex Analysis InstaForex Analysis 25.08.2022 10:58
Several interesting market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 0.9941 level in my morning forecast and advised you to make decisions on entering the market from it. A false breakout near 0.9941 made it possible for bulls to respond to what they thought was a downside correction. As a result, a buy signal was formed, but I did not see a major upswing. The most that could be expected was 20 points of profit. The bears achieved a breakdown of 0.9941 in the afternoon, and a reverse test from the bottom up led to a sell signal, which resulted in a fall of 30 points. The euro's sharp rise after the release of US data did not make it possible for us to see new entry points to the market.     When to go long on EUR/USD: Yesterday was similar to the day before, where another portion of weak data on the US led to a sharp decline in the US dollar against the euro. Today should be quite an interesting day, as a variety of eurozone statistics are expected to be released, as well as the start of a two-day symposium at Jackson Hole, which promises a major spike in volatility. The market direction during the European session will be set by data on German GDP, as well as on the index of business expectations, the current situation and the business climate in Germany from the IFO Institute. The decline in indicators will have a negative impact on the euro, which may lead to a fall in the area of the nearest support level of 0.9969. Forming a false breakout there will provide a new signal to open long positions in hopes that EUR/USD would recover further with the prospect of updating resistance at 1.0027. A breakthrough and test of this range from top to bottom will occur only after the release of the minutes of the European Central Bank meeting, in which traders will look for hints of more aggressive actions of the central bank in the future. All this will hit the bears' stop orders, creating another signal to enter long positions with the possibility of updating 1.0068, while the resistance at 1.0097 will be a more distant target, where I recommend taking profits. In case EUR/USD falls and the bulls are not active at 0.9969, the pressure on the pair will increase again. In this case, the best option for opening longs would be a false breakout in the intermediate support area of 0.9942. I advise you to buy EUR/USD immediately on a rebound only from 0.9911, or even lower - around the parity of 0.9861, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears' main task is to protect the very important resistance at 1.0027. Taking into account that after another major upsurge in the face of disappointing US data, there were still those willing to buy the euro, we can expect further upward movement from the pair. Therefore, the optimal scenario for opening short positions would be a false breakout at 1.0027 in the morning, which will lead to the euro sliding down to the 0.9969 area, where the moving averages play on the side of the bulls. A breakdown and consolidation below this range with a reverse test from the bottom up creates another sell signal with the removal of bulls' stop orders and a larger drop in the pair to the 0.9942 area, and there it is within easy reach to 0.9911, where I recommend taking profits. A more distant target will be the area of 0.9861. If EUR/USD jumps during the European session if we receive good statistics from IFO on Germany, as well as the absence of bears at 1.0027, there will be an opportunity to implement an option with further profit taking on short positions before an important meeting in Jackson Hole, which will change the situation in favor of the bulls. In this case, I advise you to postpone short positions until 1.0068, but only if a false breakout is formed there. You can sell EUR/USD immediately on a rebound from the high of 1.0097, or even higher - from 1.0127 counting on a downward correction of 30-35 points.     COT report: The Commitment of Traders (COT) report for August 16 logged a sharp growth in short positions and a decline in long positions, which confirms the euro's current position against the US dollar. The risk of a looming recession in the US is now combined with the risk of more serious problems in the eurozone, which will begin this autumn amid a sharp rise in energy prices and further inflation, which the European Central Bank is fighting at a fairly moderate pace so far. At the end of this month, American politicians will have a meeting at Jackson Hole, where the key word will be Federal Reserve Chairman Jerome Powell. The pair's succeeding direction will depend on this, as a strong dollar harms the American economy and further accelerates inflation, which the central bank is fighting against. The COT report indicated that long non-commercial positions decreased by 862 to 199,226, while short non-commercial positions jumped by 7,386 to 242,010. At the end of the week, the total non-commercial net position remained negative and fell to -42,784 against -34 536, which indicates that the euro could be under pressure again and may also fall further. The weekly closing price decreased and amounted to 1.0191 against 1.0233.     Indicator signals: Moving averages Trading is above the 30 and 50-day moving averages, indicating that the bulls are trying to maintain the correction. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of a decline, the lower border of the indicator around 0.9911 will act as support. In case of growth, the upper border of the indicator in the area of 1.0010 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders. Relevance up to 08:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/319849
Construction Activity in Poland Contracts in May: Focus on Building Decline and Infrastructure Investment

Jackson Hole Meeting Begins! USD/JPY May Be Turning Upside Down Shortly! Japanese Inflation Is Expected To Reach 2.5% In 2022

InstaForex Analysis InstaForex Analysis 25.08.2022 11:02
  So the day has come. Today the Federal Reserve symposium starts in Jackson Hole. The closer the event is, the more cautious the markets are. The USD/JPY pair is falling in the morning, but at the same time retains a huge growth potential. Why is everyone waiting for the dollar rally? On Thursday, the main economic get-together of August begins in the US state of Wyoming - the annual symposium of the Fed. Markets expect that in Jackson Hole, the US central bank will finally reveal its plans for further monetary policy. The culmination of the forum should be Friday's speech by the head of the Federal Reserve. Most analysts believe that Fed Chairman Jerome Powell will confirm the need to continue an aggressive course. This opinion is supported by a lot of hawkish comments from Fed members, which were made ahead of the symposium in Jackson Hole. Officials are still determined to fight high inflation. Of course, there is no denying the fact that recent signs of easing inflationary pressures have caused a sigh of relief from Fed policymakers. However, the path to achieving price stability is far from over, and the central bank is likely to continue to raise interest rates at the same rate. Amid such rhetoric, concerns that the US central bank may be inclined to a slower pace of rate hikes have significantly decreased in recent days. Currently, futures markets estimate the probability of a 75 bps rate hike next month at 60.5%. If tomorrow the Fed chairman gives even the slightest hint that this is real, we will see another enchanting rally of the dollar. However, while uncertainty remains about the Fed's future route, the greenback remains under pressure. This explains its current weakness. The DXY index fell by 0.15% on Thursday morning and retreated from its almost 20-year high of 109.27 to 108.47. And most of all, the "greenback plunged against the Japanese yen. The USD/JPY pair fell by 0.25% to the level of 136.775.     Why does the yen have no chance against the dollar? The Japanese currency benefits from a less sharp increase in Fed rates, since it has already suffered a lot this year from the aggressive course of the US central bank. Recall that the monetary policy of the Bank of Japan remains ultra-soft, despite the global trend of tightening and increasing inflationary pressure in the country. Unlike its colleagues, who are struggling with rising prices by raising interest rates, the BOJ stubbornly keeps the indicator at an ultra-low level. And apparently, the central bank will continue to bend its line. The BOJ's main task is not to suppress inflation, but to restore the economy, which has suffered greatly after the coronavirus pandemic. It is for this reason that the Japanese authorities continue to inject liquidity into the financial system by actively buying government bonds. Despite the measures taken, Japan's economy still cannot fully recover from the recession caused by COVID-19. This was stated today by BOJ board member Toyoaki Nakamura. The official warned that the prospects for the Japanese economy are clouded by another surge in the incidence of coronavirus, continuing supply constraints and a constant rise in commodity prices. He stressed that the BOJ should not abandon large-scale incentives to support the economy and switch to the side of the hawks just because everyone is doing so now. In his opinion, the tightening of monetary policy may become a serious deterrent for business, as a result of which economic growth will again be under threat. Bank Of Japan To Keep Being Dovish? Meanwhile, most analysts believe that the BOJ will stick to its dovish strategy for a long time. A survey conducted by Bloomberg showed that 16 out of 19 experts exclude the possibility of a change in the monetary rate of the BOJ before the expiration of Haruhiko Kuroda's term of office in April 2023. According to experts, the head of the Japanese central bank will stand his ground even if inflation in the country reaches the highest level of 3% in more than 30 years. In order for Kuroda to agree to the normalization of monetary policy, inflation should remain above 3% for at least six months, Bloomberg writes. And this, if you believe the forecasts, will not happen. Japanese Inflation Said To Reach 2.5% In 2022 According to Japanese economists, inflation will reach 2.5% at the end of this year, and by the end of 2022 it may drop to 1%. All this indicates that the BOJ will remain a black sheep among its colleagues. This scenario is extremely unfavorable for the yen. Due to monetary divergence, the Japanese currency has fallen in price against the dollar by almost 15% this year. Therefore, the position of the JPY is unlikely to improve much, even if tomorrow the head of the Fed does not meet the expectations of the markets and signals a slowdown in the pace of tightening. The yen can only benefit from this in the short term. The dollar will still have the main trump cards in its hands – several more stages of raising rates. Long-term review Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/319863
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

Forex Trading: Euro To US Dollar - Longs - When To Buy Euro? Shorts - When To Sell EUR?

InstaForex Analysis InstaForex Analysis 25.08.2022 11:10
Analysis of transactions in the EUR / USD pair Euro tested 0.9926 at the time when the MACD was far from zero, which limited the downside potential of the pair. Sometime later, another test occurred, but this time the quote ended up rising by 13 pips. It then tested 0.9959 in the afternoon, but the MACD line was again far from zero, limiting the upside potential of the pair.     The lack of statistics in the Euro area led to a decline in EUR/USD yesterday morning, but it was offset by weak data on the US economy released in the afternoon. Most likely, another decrease will be seen today after the release of reports on Germany's GDP, business expectations, present situation and business climate. The minutes of the ECB meeting will not affect the market as no one expects serious discrepancies with the statements made by members during the meeting. In the afternoon, another set of important reports will be coming in the US, namely the GDP data and weekly jobless claims. But the start of the Jackson Hole symposium will be much more interesting as the meeting may determine the further direction of the pair. For long positions: Buy euro when the quote reaches 1.0037 (green line on the chart) and take profit at the price of 1.0094. Demand will rise if economic reports from Germany exceed expectations. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9987, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0037 and 1.0094. For short positions: Sell euro when the quote reaches 0.9987 (red line on the chart) and take profit at the price of 0.9916. Pressure will return if US statistics fell short of forecasts. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0037, but the MACD line should be in the overbought area, as only by that will the market reverse to 0.9987 and 0.9916.     What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 08:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/319857
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

British Pound To US Dollar May Catch You By Surprise! FX: GBP/USD - Long - When To Buy British Pound? Shorts - When To Sell GBP?

InstaForex Analysis InstaForex Analysis 25.08.2022 11:12
Analysis of transactions in the GBP / USD pair Pound tested 1.1821 at a time when the MACD was just starting to move above zero, which was a good signal to buy. However, the quote did not increase much, and after rising by just 10 pips, it returned to 1.1821, then completely collapsed to 1.1787. This level was tested, but the MACD line was far from zero, so the downside potential was limited.     The lack of statistics in the UK led to a decline in GBP/USD yesterday morning, but it was offset by weak data on the US economy released in the afternoon. It is likely that the bullish dynamics will remain today because even though there are no important reports scheduled to be released, the pair has recovered from the yearly lows. And even though retail sales data in the UK will not lead to a strong surge in volatility, US reports on GDP and jobless claims will set the direction of the market. But the start of the Jackson Hole symposium will be much more interesting as the meeting will certainly affect sentiment. For long positions: Buy pound when the quote reaches 1.1859 (green line on the chart) and take profit at the price of 1.1911 (thicker green line on the chart). Growth could occur, but only in the morning. Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1824, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1859 and 1.1911. For short positions: Sell pound when the quote reaches 1.1824 (red line on the chart) and take profit at the price of 1.1784. Pressure could return at any moment, especially if the US reports better-than-expected economic data, and if the Fed remains hawkish on their monetary policy. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1859, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1824 and 1.1784.     What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 08:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/319861
The Price Of EUR/USD Pair Will Develop Sideways Movement

Wow! Look At EUR/USD Chart! What Can We Expect From Euro (EUR) To US Dollar (USD) - 25/08/22

InstaForex Analysis InstaForex Analysis 25.08.2022 11:18
Trend analysis (Fig. 1) On Thursday, from the level of 0.9963 (closing of yesterday's daily candle), EUR/USD will attempt to continue moving up in order to test 1.0079, which is the 38.2% retracement level (dotted white line). Upon reaching this level, the pair will go to the 76.4% retracement level at 1.0050 (dashed blue line), then continue rising up.     Fig. 1 (daily chart) Comprehensive analysis: Indicator analysis - uptrend Fibonacci levels - uptrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - uptrend Weekly chart - uptrend Conclusion: EUR/USD will rise from 0.9963 (closing of yesterday's daily candle) and test the 38.2% retracement level at 1.0079 (dotted white line). Then, it will go to the 76.4% retracement level at 1.0050 (dashed blue line), before bouncing further up. Alternatively, the pair could increase from 0.9963 (closing of yesterday's daily candle) to the historical resistance level of 1.0120 (blue dotted line), then fall down to the 76.4% retracement level at 1.0050 (dashed blue line). Quotes may continue to move up from this level.   Relevance up to 08:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/319859
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

Forex: (GBP/USD) British Pound To US Dollar - What Are The Possible Scenarios? - 25/08/22

InstaForex Analysis InstaForex Analysis 25.08.2022 11:23
Trend analysis (Fig. 1) GBP/USD will continue increasing on Thursday, starting from 1.1792 (closing of yesterday's daily candle) to 1.1894, which is the 23.6% retracement level (red dotted line). Quotes may rise to the historical resistance level of 1.1928 (blue dotted line) when testing this level, but then it will bounce down to lower price levels.     Fig. 1 (daily chart) Comprehensive analysis: Indicator analysis -uptrend Fibonacci levels - uptrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - uptrend Weekly chart - uptrend Conclusion: GBP/USD will rise from 1.1792 (closing of yesterday's daily candle) to the 23.6% retracement level at 1.1894 (red dotted line), go to the historical resistance level of 1.1928 (blue dotted line), then return to lower price levels. Alternatively, the pair could move from 1.1792 (closing of yesterday's daily candle) to the 23.6% retracement level at 1.1894 (red dotted line), then fall to the 85.4% retracement level at 1.1837 (dashed blue line). Quotes will resume increasing after these movements.   Relevance up to 09:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/319871
The Markets Still Hope That The Fed May Consider Softer Decision

Forex: Could EUR/USD (Euro To US Dollar) Move Downward!?

InstaForex Analysis InstaForex Analysis 25.08.2022 11:39
Technical analysis: EUR/USD has been trading upside this morning but I see potential for the downside rotation due to lack for the buying power. Trading recommendation: Due to the rejection of the resistance at 1.0016 I see potential for further downside movement. Watch for potential selling opportunities on the rallies with the downside objectives at 0.9950 and 0.9910. Stochastic oscillator is showing fresh bear cross, which his sign that downside rotation is possible. Key resistance is set at the price of 1.0016 Read more: https://www.instaforex.eu/forex_analysis/289964   Relevance up to 10:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/289964
Bitcoin Has Strong Sign That Buyers Are In Control

Nvidia Stocks Dived 4,5 % In The Afterhours Trading! Swissquote

Swissquote Bank Swissquote Bank 25.08.2022 12:13
Nvidia earnings released after the market close were in line with the downside-adjusted market expectations, but the current quarter sales forecast fell $1 billion short of expectations. Nvidia stock dived 4.5% in the afterhours trading, and brought forward the pricing of the ‘end of the chip shortage’. But, it is still too early to call the end of the rare chips, as chips for industrial use, cars and machineries remain difficult to find. Here is, as promised, more on that subject: https://medium.com/swissquote-educati... Elsewhere, stocks were flat yesterday. Even though the US futures are up this morning, the direction remains unclear, and conviction low before the much-expected Jerome Powell speech at the Jackson Hole meeting in the coming hours. The dollar is off the early-week peak, gold and Bitcoin consolidate, while crude oil is preparing to test the 200-DMA to the upside. Hence, energy stocks extend gains along with nat gas and nuclear stocks! Watch the full episode to find out more! 0:00 Intro 0:27 Nvidia’s sales forecast falls $1 billion short of expectations! 1:40 Is the chip shortage over yet? 2:40 Market update 3:56 Crude up, oil, nat gas & nuclear stocks race to the top 6:46 USD softer, EUR firmer before ECB minutes 8:00 Gold & Bitcoin traders await Powell speech for direction Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Nvidia #chip #shortage #Fed #Jerome #Powell #JacksonHole #enegry #crisis #crude #oil #natural #gas #nuclear #stocks #USD #EUR #ECB #minutes #XAU #Gold #Bitcoin #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH   Source: Nvidia upsets, again. But chip shortage is not over yet! | MarketTalk: What’s up today? | Swissquote
UAW Strike Impact and FX Market Implications Amid Ongoing Negotiations

China Counters The Negative Effects Of Covid Zero Policy?

Conotoxia Comments Conotoxia Comments 25.08.2022 12:40
The EUR/USD major currency pair's exchange rate is trying to return above the 1.0000 parity level for the second time in recent times. The first time the rise may have been a consequence of weaker US data, and now the market may have seen improved sentiment following China's actions. As reported by Bloomberg, risk sentiment may have improved in global financial markets after China announced that it will pump another 1 trillion yuan ($146 billion) into the economy to support GDP growth. China can thus counter both the negative effects of its zero COVID policy and counter the global economic slowdown. China, in effect, can save domestic demand. Nevertheless, today and tomorrow it seems that much more important news than that from China may hit the market. Today at 1:30 p.m., the minutes of the last meeting of the European Central Bank will be published, from which investors will be able to try to decipher what course the ECB will take this fall. According to the interest rate market, the central bank's borrowing cost could rise by 1 percentage point by October, which could mean two increases of 50 basis points each. It seems that the ECB's priority may be to fight inflation, even if this would be at the expense of economic growth - something that may be evident in today's minutes. This approach may also be borne out by recent statements by the ECB's Isabel Schnabel, pointing to the high risk of inflation and the lack of a decline since the central bank's last decision. In theory, the bigger and faster interest rate hikes in Europe, the more favorable it could be for the EUR (if there was no energy crisis). On the other hand, tomorrow at 16:00 Jerome Powell will open the symposium in Jackson Hole. The market seems to be discounting a more hawkish stance from the Federal Reserve chairman at this point. The rationale for this is probably the growing realization that central banks are ready to act to bring down core inflation as quickly as possible, even at the expense of macroeconomic weakness. According to the interest rate market, the scales for the next increase in the cost of borrowing may tip toward 75 basis points (60 percent probability for such a move on September 21). All of this could affect the EUR/USD main currency pair both today and tomorrow, and the struggle to break away from parity levels may only be beginning. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: ECB minutes and Jackson Hole key for EUR/USD
German labour market starts the year off strongly

Germany Is Going Down. Will Euro (EUR) Follow It?

Christopher Dembik Christopher Dembik 25.08.2022 13:13
Summary:  In today’s ‘Macro Chartmania’, we give an update on the German economy. Back in 2019, we wrote that the German economy was structurally doomed to decelerate due to China’s slowdown and severe underinvestment in the ICT (Information and Communication Technology) sector. This was before the 2020 pandemic outbreak and the 2022 energy crisis. Now, there is little doubt that Germany will enter into a recession this year. It is facing a perfect storm : high inflation for a prolonged period, failure of the multi-decade model growth based on cheap Russian energy and massive imbalance in R&D investment. This is not to say that Germany will become Europe’s new sick man. The country has everything in hand to overcome these challenges. But, in the short-term, it is without doubt a tough time for Germany and thus for the rest of the eurozone. Click here to download this week's full edition of Macro Chartmania composed of more than 100 charts to track the latest macroeconomic and market developments. All the data are collected from Macrobond and updated each week. The below chart partially explains why the German economy is not out of the woods anytime soon. So far, the country has avoided entering into a technical recession. This is explained by a rebound in external demand reflecting improved export growth to Turkey and a stabilization in export growth to the United Kingdom - two key trade partners. However, a recession is certainly only a matter of time. On Monday, the Bundesbank acknowledged that a recession is likely this year. The weak economic momentum in China is a source of concern. China is Germany’s most important trading partner with an average total trade volume in recent years of around €200bn. The latest data show that Germany export growth to China is close to its lowest level since the pandemic outbreak, at minus 8.3 % year-over-year in July. Based on preliminary trade data, the recent stabilization we can see in the below chart is likely to continue. But China’s weak growth is not Germany’s only problem. Inflation is here to stay. The Bundesbank forecasts it will peak around 10 % in the coming months versus 8.5 % year-over-year in July. This is likely. Contrary to the United States, the peak in eurozone inflation is ahead of us. Even if we pass the peak, inflation will remain elevated for long due to higher energy prices (lower reliance on Russian gas and oil will take years to materialize), weak euro exchange rate (a drop of the EUR/USD cross to 0.96 by year-end is highly possible) and the easing of government measures to cap prices (eurozone inflation is actually now artificially low). On top of that, Germany is also facing a structural challenge due to misallocation of investment. This is nothing new. But this is becoming an accurate problem nowadays as the economy is showing worrying signs of weakness. Looking at the global level, Germany is well-ranked in terms of R&D investment. Here comes the issue. A big chunk of it is attributable to the struggling automotive sector. It represents more than 50 % of total R&D investment over the recent years against only 6 % in the United States, for instance. The automotive sector is now in disarray. Supply chain disruptions, weaker demand and high energy bills are hurting carmakers. In the latest ZEW report for August 2022, the current conditions subindex for the car industry was out at minus 44.1. This is a better reading than a few months ago. It fell at minus 61.7 in April 2022 on the back of the Ukraine war, for instance. This is still close to its lowest annual levels, however. The oversized share of R&D investment coming from the car industry has an immediate negative impact : the ICT sector suffers from chronic underinvestment. This negatively impacts potential growth and leadership in key technological innovation. The pandemic outbreak and the following lockdowns showed that Germany is lagging behind in digitalization notably. Germany’s economy is now at a crossroads. For years, policymakers avoided tackling the issue of overdependence on cheap Russian energy (which was a key factor behind German industry’s high competitiveness) and massive imbalance in R&D investment. Hopefully, the upcoming recession will help to move forward on these two issues. There is no other choice but to find new energy alternatives.  The process has already started. This is also urgent to reduce economic dependence on the car industry and channel R&D investment in other sectors. This has yet to happen. In the meantime, if Germany sinks into a recession, expect the eurozone to follow immediately after.     Source: Chart of the Week : Weak Germany
ARM's US IPO Amidst Challenging Landscape: Will Investors Pay an ARM and a Leg?

A Video! Sebastian Seliga (InstaForex) Comments On EUR/USD, US Dollar Index, S&P 500 And Crude Oil

InstaForex Analysis InstaForex Analysis 25.08.2022 13:15
Let's take a look at the technical picture of EUR/USD, USDX, SP500 and Oil.   Read more: https://www.instaforex.eu/video_analysis/289968 Relevance up to 10:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
Shell's H1 2023 Performance and CEO's Bold Stance on Renewable Energy

Peter Jacimovic Comments On BTC/USD, GBP/USD And More!

InstaForex Analysis InstaForex Analysis 25.08.2022 13:21
Watch for the breakout mode on GBP/USD...   Relevance up to 10:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/video_analysis/289970
Oil Price Surges Above $91 as Double Bottom Support Holds

Is Fed Chair Powell Speech At Jackson Hole Going To Change Something?

Saxo Bank Saxo Bank 25.08.2022 13:20
Summary:  As we wait for the Fed Chair Powell speech at Jackson Hole and whether he can really bring anything new to the table, we look at the latest pressure on the already dire energy situation in Europe, the surprise indication from Japan of a strategic move in favor of nuclear, the latest earnings reports from Nvidia, Salesforce and Snowflake, and earnings reports ahead. In FX, we focus on the possible current account focus and possible repricing of AUDNZD significantly above its range of the last many years. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Going nuclear
The Market Expects Norges Bank To Keep Interest Rates Unchanged

Norwegian Krone (NOK) Is Ahead Of The Planet As Norway Will Earn Even More With Every Longer-term Delivery Contract Renewal

John Hardy John Hardy 25.08.2022 14:06
Summary:  The USD has backed off a bit from cycle highs this week in anticipation of the Fed Chair Powell speech Friday, which may be unlikely to bring much new to the table, now that the market has adjusted to the Fed’s pushback against the market’s interpretation of the July FOMC meeting. Elsewhere, we note the possible relative current account focus across FX as the Australian dollar is strong in the crosses and NOK likewise. FX Trading focus: Jackson Hole to not change the plot? Current account focus. After a feint higher yesterday, the US dollar pushed back lower yesterday and tested to new lows for the week this morning before flashing a bit of resilience. EURUSD parity was criss-crossed a few times this morning after China played its part in helping the USD lower overnight with a surprisingly strong fixing for USDCNY after it hit a two-year high yesterday amidst reports from Reuters (citing unnamed sources) that dealers in China were warned from official sources against aggressively selling the yuan. As I have noted in yesterday’s and today’s Saxo Market Call podcasts, the Jackson Hole speech from Fed Chair Powell is highly anticipated, but may not bring much new to the table, relative to expectations. There is some chance that the Powell speech focuses a bit more energy on quantitative tightening as an important factor from here rather than super-size rate hikes, which would be an interesting test for the bond market and whether longer treasury yields remain in the range established by the 3.50% high for the 10-year benchmark in mid-June, for example. The Fed is far from reaching its $95 billion/month pace of balance sheet tightening and its mortgage portfolio is unchanged over the last few months. But largely, the market may be simply left to its devices and default to look at where the cycle is taking us: toward a looming catastrophe in Europe and the UK this winter and into next year if energy prices stay anywhere within sight of current levels. It’s important to realize that the loony prices for natural gas and power in Europe are based on small transactions for the few that are willing to trade forward contracts at these prices, all while longer term contracts only set higher in ratcheting fashion – some a few months back and others not until the months ahead. Industrial users can’t continue full-scale operations at prices 6-8 times their historic ranges. In the US, a recession looms, but when? And before that recession is properly seeing the light of day, will the Fed have first turned the screws that much tighter on liquidity with far more forceful balance sheet reductions? It’s all important stuff as we have some compelling, unconfirmed setups in place for the USD peaking here (double top in broader USD indices and USDJPY, AUDUSD and USDCAD not needing much more USD weakness to suggest a reversal, etc.) but will need to get to the other side of Jackson Hole and then on to the US August jobs (and earnings!) report next Friday, the August CPI release on the 13th and the September FOMC decision on the 21st for a sense of whether this USD bull has legs. On a completely different note, another focus increasingly in evidence across FX is the one on relative current accounts, as the Aussie, CHF, CAD and NOK have performed well of late, possibly mostly on the current account fortunes more than due to any central bank signaling. EURNOK has seen quite the round trip from 9.60 o 10.50 and back to 9.60. We discuss the AUDNZD outlook below. By this metric, the Swedish krona should be doing better than it has of late, although it has clawed back some of the recent losses from the single currency. Fair or not, the krona has historically been very sensitive to the economic outlook for the Eurozone and risk sentiment generally. One issue certainly of concern for Sweden is its cratering housing market, where prices have fallen around 9% from the cycle peak, with the Riksbank looking for the risk of a 16% decline. This could hobble credit and sentiment. Chart: AUDNZDInteresting to watch AUDNZD here as it edges towards its highest levels in nearly five years and into the top of the range since all the way back in late 2013, when the pair was in a steep and steady descent from its prior range all the way north of 1.3500 (!). There is nothing in the relative yield spread perspective here to suggest the pair should jump into the old range above 1.12-1.13, but developments in relative current accounts over the last year do suggest upside pressure, as Australia’s complete portfolio of commodities has seen the country posting record surpluses this year while New Zealand’s trade deficits languish at new historic lows on the energy price crunch. On the lookout here for whether the pair can plow well back into that higher range if these current account dynamics extend – perhaps to at least 1.1500 but possibly even 1.2000 over the coming year. Source: Saxo Group Table: FX Board of G10 and CNH trend evolution and strength.Note the NOK leading the pack once again as record gas prices weigh in Europe and Norway is set to earn more with every longer-term delivery contract renewal. AUD is an interesting one to watch for broader strength after already significant moves against EUR and GBP, for example. 'Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Watching the challenge of the very long term AUDNZD range here, but also whether an AUDUSD upside reversal is in play (rally and close well north of 0.7000 begins to build the upside focus again). Elsewhere, NOK has been strong enough to challenge the greenback, even. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1130 – ECB Meeting Minutes 1230 – US Weekly Initial Jobless Claims 1230 – US Q2 GDP Revision 1500 – US Aug. Kansas City Fed Manufacturing survey 2200 – New Zealand Aug. ANZ Consumer Confidence 2230 – New Zealand RBNZ Governor Orr to speak 2330 – Japan Aug. Tokyo CPI   Source: FX Update: Jackson Hole may not change the plot.
Volume Of Crude Oil Rose For The Second Session In A Row

The Biggest Two-week Drawdown In A Year As US Oil Inventories Lost 10 mln barrels!

Marc Chandler Marc Chandler 25.08.2022 14:20
Overview: It seems that many market participants had the same thing in mind, cut dollar longs before the Jackson Hole gathering. The Antipodeans lead the majors move, encouraged perhaps by China’s new economic measures, with around a 1% gain. The euro and sterling are up about 0.35% and are the laggards. Emerging market currencies are higher as well, with the notable exception of India and Turkey, which are nursing small losses. Equities are having a good day. All the major bourses, but India, rose in the Asia Pacific area, led by the 3.6% surge in HK. South Korea’s 25 bp hike did not prevent the Kospi from rallying over 1% today. The Stoxx 600 is up by about 0.3%, and US futures are 0.5%-0.6% better. European 10-year benchmark yields are 4-7 bp lower and the periphery is doing better than the core. The 10-year US Treasury yield is off a couple basis points to 3.08%. Gold is rising for the third consecutive session. Near $1765, it has retraced half of its losses since the mid-month high above $1800. October WTI is little changed after rallying 5% in the past two sessions. US oil inventories have fallen by about 10 mln barrels in the past two weeks, the biggest two-week drawdown in a year. The market also appears to be getting more skeptical that Iranian oil is going to come back soon. US natgas is giving back half of yesterday’s 1.5% gain, while Europe’s benchmark is up 8.7% on top of yesterday’s 10.8% increase. It is up by more than a quarter this week. China’s infrastructure plans did nothing for iron ore, which snapped a three-day advance by pulling back 0.5%. On the other hand, September copper has fully recovered yesterday’s 1.4% fall. September wheat is off for the first time in four sessions.  Asia Pacific Japan's government wants to double down on nuclear power. Prime Minister Kishida wants a committee of government ministers and outside advisers to consider calling for building new nuclear plants in its report due later this year. Before the Fukushima nuclear accident in 2011, nuclear power provided almost 30% of Japan's electricity. In 2020, nuclear power accounted for less than 5% of Japan's electricity. Russia's invasion of Ukraine, the volatility of the global energy market, and the need to boost sustainable growth favors nuclear power, according to this line of thinking. Japan's Ministry of Economy, Trade, and Industry is a strong proponent of developing nuclear power. Still, it is not an immediate solution of any problem. New, large-scale plans would take a decade or more to construct. Smaller nuclear plans, using the newest technology might not be operational until early 2040s, according to some estimates. Japan currently has seven nuclear plants operating. The prime minister wants more existing plants to re-open. A poll earlier this year found that for the first time since that 2011 accident a slim majority (53%) in Japan favor re-opening nuclear plants. Responding to a string of data which suggests that the Chinese economy may struggle to grow by even 3% this year, the State Council announced 19 measures yesterday to support the economy. The measures included almost CNY1 trillion (~$146 bln) of new borrowing/spending for state policy banks and local governments for infrastructure projects, and some deferment of payments due to the government. These measures plus the small rate cuts that have been delivered in the past week or so are seen as modest palliatives to what is increasingly a stressed economy. The NASDAQ Golden Dragon China Index of PRC companies that trade in the US jumped 2.5% yesterday, anticipating today's surge in Hong Kong's Hang Seng (~3.6%) and CSI 300 (~0.8%) The Chinese yuan is off about 1.7% so far this month. This is almost as much as it depreciated in the May-July period. While Chinese officials seem to have accepted the decline, they seem to be wary of unintended consequences. The PBOC's dollar fix yesterday and today was weaker than expected and some saw this as a warning shot. Consistent with this was a Reuters report that China's foreign exchange regulator warned several banks against shorting the yuan. There are at least two reasons why Chinese officials want to move gradually. First is that price pressures may be mounting and second is to avoid a vicious cycle of weaker yuan spurring capital outflows, which weakens the yuan. Foreign holdings of Chinese bonds (sovereign and policy bank bonds) appear to have fallen by a little more than 1% last month to CNY3.6 trillion (~$525.5 bln). The dollar is inside yesterday's range against the Japanese yen (~JPY136.15-JPY137.25). It has drifted to the lower end of the range in Europe. Yesterday's range was within Tuesday's range (~JPY135.80-JPY137.70). The greenback appears nesting as the market awaits Fed Chair Powell's comments at Jackson Hole tomorrow. Note that the US two- and 10-year yields are around two-month highs ahead of it. This has helped lift the greenback to around JPY137.70. Follow-through yield gains may be needed for it to re-challenge high set last month near JPY139.40. The Australian dollar is up over 1% to a seven-day high a little below $0.7000, which corresponds roughly to the (50%) retracement objective of the slide since the month's high on August 11 around $0.7135. Like China's rate cut, so too with the new spending announcement, many trade the Aussie as if it were a proxy sometimes for China. The intraday momentum indicators are stretched. Initial support is seen around $0.6960. The PBOC set the dollar's reference rate at CNY6.8536. The market (Bloomberg survey median) expected CNY6.8656. The dollar has largely been confined to yesterday's range. While it eased a little more than 0.10% against the onshore yuan, it slipped more than twice as much against the offshore yuan. Lastly, as expected South Korea's central bank delivered the expected 25 bp hike (lifting the seven-day repo rate to 2.5%). Headline CPI is running north of 6% and additional hikes are likely. The won rose by 0.5%, its second consecutive gain, after falling for the previous six sessions. Europe While Japan is pushing nuclear, Germany is set to boost coal-fired power generation this year. Steag GmbH will add 2.3 gigawatts to its system within three months to replace about a quarter of the natural gas it uses to generate electricity. More broadly, the government is planing to re-open 6.9 gigawatts of coal and 1.9 gigawatts of lignite and push back planned for another 15 years. Uniper SE, is set to re-start an 875-megawatt coal plant in northern Germany next week. Yesterday, the German government announced it will give preference to transport fuels by rail to accelerate the access of power plants. Berlin also announced some conservation measures, including a ban on heating private swimming pools, and some areas in public buildings. The minimum office temperature will be reduced to 66 Fahrenheit (19 Celsius) and banning most outside lighting for monuments and buildings. Economic Minister Habeck says the measures announced will reduce natural gas use by 2% (saving 10.8 bln euros) over the next two years. German economic news was less poor than expected today. The initial estimate of no growth in Q2 was revised to show 0.1% growth. Consumption and government spending were stronger than expected, but capital investment was considerably weaker. The IFO investor survey seemed surprisingly resilient. The current assessment slipped to 88.5 from 88.7 and expectations were practically unchanged too (80.3 vs. 80.4). The overall business climate metric stands at 88.5 (from 88.7). Still to come is the record of last month's ECB meeting and the market will be looking for more color on the new Transmission Protection Instrument. The euro is firm. After holding below parity yesterday, it popped up in Asia to poke slightly above $1.0030. The week's high was set Monday closer to $1.0045. Yesterday's push lower, the new 20-year low set Tuesday near $0.9900 held and sparked what appeared to be a short-covering bounce into the European close. We suspect that some euro bears moved to the sideline ahead of Jackson Hole. There are options for 2.5 bln euros that expire today at $1.00. Some of the buying may be to neutralize the option. Initial support is seen around $0.9980. Sterling is trading firmer, and like the euro, it has held below the week's high (almost $1.1880). It may make another run for it, but the momentum indicators are getting stretched. Yesterday, the Office of National Statistics showed that for the first time, the UK did not import fuel from Russia in June. Prior to Russia's invasion of Ukraine this year, Russia accounted for almost a quarter of UK's refined oil imports, 6% of crude imports, and almost 5% of its gas imports. America Despite the US five-year yield rising to its best level in nearly two months (~3.25%), the concession did little to induce participation in yesterday's $45 bln five-year note auction. It generated a full basis point tail, stopping at 3.23% and a poor bid-cover (2.3), Earlier yesterday, the re-opening of the two-year floating rate note with a $22 bln offering, also saw a weak bid-cover (2.57 vs. 3.13 last and a 3.2 average in the last 10 such auctions. We are tempted to write-off the lackluster participation to the summer and ahead of Chair Powell's speech on Friday. In addition to $110 bln in four-and eight-week bills to be sold today, the US Treasury also will sell $37 bln of seven-year notes. The yield has risen by almost 50 bp over the past month and still the concession may not be sufficient to draw strong demand. The next long maturity is not until September 12-13 and the re-opening of the 10-year note and 30-year bond. The US reports weekly jobs claims today, which appear to have stabilized recently around 250k. Yesterday's benchmark revisions added about 571k private sector jobs to the job growth reported in the year through March. This translates to an average of around 47.5k jobs a month. Also today, Q2 GDP revisions and the 0.9% contraction is expected to be shaved, with knock-on effects on productivity and unit labor costs later. The Kansas Fed's manufacturing survey is on tap too, but it is not a market mover. Lastly, the Atlanta Fed's GDPNow tracker sees Q3 growth at 1.4%, down from 1.6% previously.  Brazil's IPCA CPI measure for the first half of August fell to 9.6% year-over-year from almost 11.4% last month. The market had hoped for a slightly larger decline (Bloomberg median 9.49%). It was the first month-over-month decline since May 2020. It was the third consecutive drop in the year-over-year rate, which peaked at 12.2%. The full month's report is due September 9. It peaked at 12.13% in April and stood at 10.07% last month. The government has pushed through several anti-inflation measures, including caps on utility and fuel taxes and the effect was seen with a nearly 17% drop in gasoline prices and a 5.25% fall in transportation costs. The central bank meets on September 21. It hiked the Selic rate by 50 bp earlier this month to 13.75% and said it would review the need for a "residual adjustment" in September. The central bank may stand pat without declaring an end of the tightening cycle as price pressures remain elevated. In contrast, Mexico mid-August CPI accelerated more than expected with the headline rising to 8.62% from 8.14%. The core rate rose to 7.97% from 7.75%. Banxico hiked rates five times so far this year. The first three moves were half-point increments and the last two were 75 bp steps. It meets a week after the Fed next month. At the bare minimum it can be expected to match the US move but could go 75 bp even if the Fed does not. Today, Mexico is expected to shave its preliminary Q2 GDP rise of 2.0% and minutes from last month's meeting. After consolidating against the Canadian dollar yesterday, the US dollar has been sold today. It slipped marginally through CAD1.29 to meet the (50%) retracement objective of the rally that began off the August 11 low near CAD1.2730. The low was set in the European morning but was not confirmed by the intraday momentum indicators, a warning not to chase the greenback lower, at least immediately. Initial resistance is seen around CAD1.2950. The US dollar is easing against the Mexican peso for the fourth consecutive session, which followed a four-day gain last week. It is finding bids today around MXN1985, and a break could see a test on the MXN19.81-82 area that marked the low in late June and again near the middle of this month. The low for the year was set in late May around MXN19.4140.     Disclaimer   Source: Dollar Longs Pared as Jackson Hole Gathering is set to Start
Hungary: Budget deficit jumps above full-year cash flow target by ca. 10%

Is Hungary In A Recession? Are Hungarian Employers Expected To Fire People!?

ING Economics ING Economics 25.08.2022 15:07
While wage growth remains strong, there are signs that the unemployment rate is rising. This weakening could be because companies are slowly starting to adapt to their ever-increasing costs by downsizing their workforce  Based on our latest outlook, the Hungarian economy is facing a technical recession in the second half of the year Wage growth remains strong The Hungarian Central Statistical Office (HCSO) has released the latest set of labour market data (wages and unemployment rate). While wage growth from June suggests that the labour shortage is motivatingn the wage-related decisions of employers, the July employment data may show the first signs of a turnaround. Starting with wages, gross average wages increased by 15.4% year-on-year in June 2022, causing a minor upside surprise. If we check the development in regular wages (which means getting rid of the impact of one-off payments and bonuses) we can see clearly that underlying wage growth strengthened significantly, with a 16% year-on-year increase. However, despite the strong underlying wage increase, galloping inflation is erasing more and more from the nominal rise. The real wage growth has remained in the positive territory but dropped to only 3.3% year-on-year by June. With the further strong rise in inflation in July and in the coming months, real wage growth could turn into negative territory, dragging on consumption during the second half of 2022. Nominal and real wage growth (% YoY) Source: HCSO, ING   Back to the details. Wage growth in the private sector came in at 14.8% YoY, a full percentage point higher than the average seen in the first five months of this year. Salaries rose by 12.8% in the public sector over a year. Meanwhile, due to educational institutions being reclassified as part of the non-profit sector, wage growth here remained on the extreme side: above 32% over a year. In this regard, the main driver of the acceleration in June was coming from private corporates that are still facing labour shortages and trying to solve this issue with higher wages. Wage dynamics (3-month moving average, % YoY) Source: HCSO, ING Unemployment rate rises for the first time this year But this phenomenon could end soon if July data is anything to go by. Employment data points to a weakening in labour metrics. The number of unemployed people moved up to 173k, corresponding to an unemployment rate of 3.5% in July. This is 0.2ppt higher than in the previous month. Although this isn't a ground-breaking change, as it could be a statistical error, this is the first increase in six months. In addition to the increase in unemployment, the number of participants in the labour market also decreased somewhat. This means that the reduction in the number of employed compared to the previous month was split between going into inactivity (e.g. retirement) and becoming unemployed. Based on one month's data, we can't draw any serious conclusions about major changes in the labour market processes. However, this weakening could be the first sign that companies have slowly started to adapt to their ever-increasing costs. Labour market trends (%) Source: HCSO, ING   After all, if employers expect more difficult times ahead, and that demand for their products and services will fall, more companies will be forced to start an extensive labour market adjustment. To put it more simply, they could try to save on costs by downsizing and thus maintain their profitability despite the expected decrease in revenues. Based on our latest outlook, the Hungarian economy is facing a technical recession in the second half of the year, that is, we expect a decrease in aggregate demand. All of this, in addition to the increased costs companies are facing (energy, transport, raw materials, labour, etc.), means ever higher inflation since companies are primarily now trying to maintain their profitability by passing on costs. However, as real wage growth turns into negative and aggregate demand shrinks, this option will become less functional, so layoffs may begin. Accordingly, towards the end of this year, we expect the unemployment rate to rise, but we don’t see the indicator significantly exceeding 4%. Read this article on THINK TagsWages Unemployment rate Labour market Jobs Hungary Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Forex: Possibility Of Sharp Jump In Many Trading Instruments

ING Economics' Prediction Remain Unchanged - ECB Is Expected To Hike By 50bp

ING Economics ING Economics 25.08.2022 15:28
The minutes of the European Central Bank's July meeting underline its new approach to normalisation: we can do whatever we want, whenever we want ECB President, Christine Lagarde at a news conference after July's meeting   In these fast-moving times, it is always hard to extract any hints for future ECB decisions from a meeting that took place four weeks ago. Still, the just-released minutes of the bank's July meeting reveal some interesting insights. Here are our top picks: The discussion on the Transmission Protection Instrument (TPI) took actually place before the discussion on hiking interest rates. The TPI was agreed upon unanimously. Concerns about the weak euro came on top of the policy-relevant discussion, with “Members widely noted that the depreciation of the euro constituted an important change in the external environment and implied greater inflationary pressures for the euro area...” Recession is still a forbidden word in the ECB’s dictionary as it was only used nine times. However, there were many phrases like downturn or contraction, pointing to the same direction. Wage growth remains key for the ECB to identify second-round effects as “Members agreed that the persistence of inflation depended, to a large extent, on the behaviour of wages. Wage growth, also according to forward-looking indicators, had continued to increase gradually over the last few months but still remained contained overall.” The rate hikes by 50bp were broadly supported, with few ECB members calling for the initially almost pre-committed 25bp. The fact that many ECB officials, including ECB president Christine Lagarde, had publicly consistently repeated the intention to hike by 25bp since the June meeting was explained by “The Governing Council thereby took a larger first step on its policy rate normalisation path than signalled at its previous meeting, applying the stated principles of data-dependence and optionality. This was seen as providing a clear signal of its determination to act and to fulfil its mandate.” All in all, the minutes illustrate how the momentum within the European Central Bank changed between the June and the July meeting and also stress its determination to continue hiking rates as the minutes repeatedly underline that the ECB is on a path of normalisation. What to expect at the ECB's September meeting ECB officials are gradually returning from their holidays and are only gradually starting to become talkative again. Official comments which could hint at the next steps are still scarce. The discussion at the July meeting shows that growth concerns are mounting but that the ECB in our view is still too benign on the risk of an outright recession in the eurozone. Looking ahead, we still think that the ECB is currently pursuing two main goals: anchoring inflation expectations and normalising monetary policy. As for inflation expectations, only business inflation expectations have come down somewhat. The US example, however, shows that even more aggressive rate hikes are less potent in bringing down survey-based inflation expectations than global commodity prices. The latest drop in US inflation expectations seems to be the result of falling gasoline prices and not so much of the latest Fed rate hikes. This could be a hint for the ECB that a series of more aggressive rate hikes might be too much of a good thing. This leaves it with at least normalising monetary policy. And here, we know that any neutral level of a policy rate also depends on the state of the economy. In a robust growth environment, the neutral rate will be higher than in a low growth or even recessionary environment. Consequently, we still expect the ECB to take a less aggressive approach than the Fed and what markets are currently pricing in. We expect the bank to hike rates by another 50bp at the September meeting and then pause until spring next year. A recession, a winter energy crisis, and an ongoing war simply argue against overly aggressive rate hikes. Read this article on THINK TagsMonetary policy Inflation Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
RBA Minutes Reveal Consideration of Rate Hike Amid Economic Uncertainty

Fed: Action Will Have Already Begun At The Beginning Of The Symposium

InstaForex Analysis InstaForex Analysis 25.08.2022 15:32
Relevance up to 10:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Today the dollar began to weaken its position around the entire perimeter of the market. The question arises, what happened: a small respite before the storm, or was Federal Reserve Chairman Jerome Powell's hawkish rhetoric completely invested in the US currency these days as part of the Jackson Hole symposium? If so, then it turns out that the dollar index has exhausted its growth, at least for the current moment. Now traders are hiding and will not make large bets until the event itself.The reaction will already be on the symposium factor itself. Further dynamics of the dollar will depend on Powell's statements. If they remain within expectations, the dollar will remain within the current range. In order for the indicator to touch again or break through the high of the current year above 109.00, new factors or unexpected announcements are needed that will push the rate up. However, there is a risk that the speech will not be considered hawkish enough. With such a development of the scenario, the US currency will lose positions earned in recent sessions. Part of the points scored will go if the head of the Fed expresses concern about the consequences of tightening monetary policy. Traders will carefully study Powell's speech for signs of further rate hikes. The federal funds rate is expected to peak at 3.80% in March 2023, up from 3.62% two weeks ago. Interest rate futures suggest a 60% chance of a 75 basis point Fed rate hike in September. Today, dollar traders will focus on data on the country's GDP, which may well increase pressure on the dollar, as market players' attitude to the expected recession has become aggravated. Most market players are still betting on the strengthening of the US currency against the hawkish message of the Fed. The upward trend should continue until the end of the year. Since the peak of inflation and rate hikes are just around the corner, so is the reversal of the dollar index. The US dollar may peak in the fourth quarter of 2022, after which a period of cyclical weakness against most currencies will begin next year, when the economy enters a recession and the Fed stops the process of raising rates. The euro certainly took advantage of the current pause in the growth of the dollar, but the single currency has nothing to count on. EUR/USD is at risk of further losses in the next few weeks, according to UOB FX strategists. For now, the downward pressure has eased, with the quote expected to trade between 0.9920 and 1.0010. This is what the short term looks like. On the horizon of two to three weeks, UOB sees an opportunity for further weakening. Only a breakthrough of 1.0035 would indicate that the euro's decline that began last week is over. However, one important nuance must be taken into account here. Oversold conditions can result in there being several days of consolidation first. Support levels in the future are at 0.9870 and 0.9830. The German IFO and the ECB minutes are in focus on Thursday. The 1.0015 area is a key intraday resistance. On a break higher, there is a risk of a short squeeze up to 1.0135. Whether it happens will depend on the incoming data. Notably, yield spreads have moved in favor of EUR/USD this week. But whether they will play any role is a big question. Serious gas related problems and the Fed's continued hawkish stance suggest that this month one should not count on the recovery of EUR/USD, whose growth may stall around 1.0100-1.0200. The German business climate index from the IFO Institute fell slightly in August to 88.5 against 88.7 in July and the market forecast of 86.8. The index for assessing the current economic situation dipped to 97.5 compared to the July value of 97.7 and the forecast of 96.0. The IFO expectations index, which reflects the forecasts of companies for the next six months, fell to 80.3 from 80.4, but turned out to be much better than the 78.6 expected by the market. Following the release of IFO's German Business Activity Survey, market players concluded that a recession is still on the agenda. The euro was not inspired by the results, the growth of 0.3% is solely due to the declining dollar. Source: Forex Analysis & Reviews: Euro fights windmills
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

Forex: GBP/USD Showing Impulse Moves While The Downward Cycle

InstaForex Analysis InstaForex Analysis 25.08.2022 15:47
Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The market is clearly frozen in anticipation of tomorrow's speech by Jerome Powell. Most likely, the head of the Federal Reserve will clarify the further pace of interest rate hikes. In terms of statistics, durable goods orders in the US did not make any impression as the volume remained unchanged. But the previous data was revised for the better, from 1.9% to 2.2%. Orders for durable goods (United States): Today's data on jobless claims is also unlikely to affect the market even though the number of initial applications is forecasted to increase by 17,000, which is a lot. This is because the estimate for repeated requests have been revised for the better, that is, a decline by 1,000 instead of a rise by 5,000. Continued claims (United States): Obviously, investors will not take risks, preferring to wait for Powell's speech tomorrow. EUR/USD formed a short-term flat within 0.9900/1.0000. A temporary slowdown can serve as a process of accumulation of trading forces in the upcoming acceleration in the market. GBP/USD rebounded from the support level of 1.1750. This reduced the volume of short positions, which slowed down the downward cycle. Most likely, the pair will continue to concentrate for some time within the base of the trend, then show impulse moves.   Source: Forex Analysis & Reviews: Trading tips for EUR/USD and GBP/USD on August 25
Analysis Of The AUD/JPY Currency Pair Scenarios

Grid Trading: AUD/NZD. Monitoring Price Movements

InstaForex Analysis InstaForex Analysis 25.08.2022 15:58
Relevance up to 11:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   AUD/NZD has been increasing over the past year. It gained around 6,000 pips and approached the classic reversal zones of 2015-2018. It broke the monthly high today, which opens the opportunity for limit orders. So, from the current prices, traders could place sell limits, with an increment of 500 pips. Take profit on a breakout, either at 1 pip above the first order or after a 1,000 pip movement. This strategy is called grid trading, which is usually used on cross rates. It involves holding positions that are significant in time and distance. For this reason, we recommend using swap-free accounts, not increasing the volumes in the grid (0.01 standard lot for every $1,000 of the deposit), and monitoring price movements. Good luck and have a nice day! Source: Forex Analysis & Reviews: Trading tips for AUD/NZD
What's ahead of Euro against greenback today? Let's look at Stefan Doll's review

European Central Bank (ECB) Is Expected To Hike The Interest Rate By 50bp

Craig Erlam Craig Erlam 25.08.2022 16:30
A slightly positive start to trading on Thursday as traders eye ECB minutes early afternoon and the start of the Jackson Hole Symposium. The minutes will likely provide further detail on the reasoning behind a more aggressive start to tightening than the central bank had communicated to the markets and perhaps provide further insight into what we can expect at the upcoming meeting as a result of that move. The issue with its decision was not that it was wrong to hike by so much – I’m sure most would agree that it wasn’t – rather it was just poorly communicated. And if the central bank wants to offer guidance, it needs to be reliable or it will become ineffective. Another 50 basis point hike is now expected in September. Is one trillion yuan enough? China announced a one trillion yuan stimulus plan overnight and investors were not particularly blown away. That may seem odd given the “trillion” number but that’s a reflection of the severity of the headwinds facing the economy at the moment and the consequences of a zero-Covid policy. The stimulus was largely targeted at infrastructure spending but the view seems to be that this will not be as effective as it has been in the past. The property sector is still experiencing distress and confidence has been very shaken. Lockdowns have further undermined confidence and made hitting the 5.5% growth target all but impossible. It’s going to take something much bolder to repair the damage and as it stands, a cautious approach to monetary and fiscal policy is all there is an appetite for. BoK continues tightening and signals more ahead The Bank of Korea continued raising interest rates today, hiking the base rate by 25 basis points to 2.5%, in line with the consensus. It’s unlikely to be the final action this year, with the central bank raising its inflation forecasts for this year and next to 5.2% and 3.7%, respectively, while revising down growth in the same period to 2.6% and 2.1%. Given the desire to avoid inflation becoming entrenched, another 25 basis point hike is expected to follow in October, although much could change in that time. Germany heading for a recession despite narrowly avoiding contraction Germany squeezed out a tiny amount of growth in the second quarter, the final Q2 reading showed today. The economy grew 0.1%, revised up from 0% previously. I’m trying to find a reason to be optimistic on the back of that but in reality, it just means the economy may take a little longer to fall into recession. The German IFO business climate didn’t make for much better reading, falling again to 88.5 – the lowest since mid-2020 – with both current assessment and expectations weak. With the energy crisis unlikely to improve, this likely means another quarter of flat growth at best before the economy falls into recession later this year. ​ Bitcoin missing out Bitcoin appears to be missing out on the risk rebound today, recording no gains so far in the session and instead treading water. There may still be some nerves after last week’s plunge, with $20,000 looking particularly vulnerable once more. A break below could quickly see sentiment turn against crypto after an encouraging recovery since mid-June. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Focus on central banks - MarketPulseMarketPulse
The US Dollar Index Is Producing A Reasonable Bullish Divergence

How Do Most Influential Banks In The World Perform? JPMorgan Chase (JPM), Bank of America (BAC) And Goldman Sachs (GS)

Conotoxia Comments Conotoxia Comments 25.08.2022 16:45
Leading investment and commercial banks are vital to the international financial system. They are responsible for money transfers, investments, currency exchange, hedging corporate exposures, etc. Banks may be exposed to potential risks in an environment of changing interest rates, or it may be a potential opportunity for them to improve their profits. Given the volume of lending activities, commercial banks' performance seems most sensitive to a change in interest rates. Investment banks, meanwhile, through their handling of investment projects and trading activities, have the potential to profit when interest rates change significantly. How did the banks perform? JPMorgan Chase (JPM), Bank of America (BAC) and Goldman Sachs (GS) are among the largest and most influential banks in the world. In the second quarter, they generated revenues of $31.6 bln, $22.8 bln and $11.9 bln, respectively. Out of them, only JPM failed to beat Wall Street analysts' expectations in terms of revenue. JPM and BAC expect some borrowers to default through the difficult economic situation in the US. As a result, the former has set aside reserves of  $428 million to cover non-performing loans. Figures from leading banks seem to indicate that, after a record 2021, the number of mergers and acquisitions (M&A) and IPOs is declining significantly. BAC reported a decline in investment banking deal volumes in Q2 after last year's historic highs of a whopping 47%. However, the impact on books was offset by a 22% growth in net interest income, most likely driven by rapidly rising interest rates.  Moreover, rising interest rates due to the popularity of fixed-rate lending in the US do not seem to translate as strongly as one would expect into corporate profits. Irresponsible credit policies seem to be hitting the sector's performance hard, as can be seen in the share prices of JPM and BAC. They have already fallen 28.4 and 25.3% respectively this year. However, the announcement of the suspension of buybacks is also not a good sign and may indicate that management might consider the current share price too high. Goldman Sachs, which shares have lost 13.5% this year and surprised positively relative to expectations on Wall Street, appears to be a peculiar exception. Historically, GS has been relatively immune to periods of crisis, in which the company has taken advantage of high volatility to boost earnings. Nonetheless, the current situation is probably unsuitable due to its high vulnerability to declining transaction revenues (M&A) and share issues.  In contrast to the mixed and less-than-ideal performance of JPMorgan Chase and Bank of America, Goldman surprised the market with a significant increase in high-margin sales of securities to companies (especially those looking to hedge in a challenging macro environment). Income from these rose by a staggering 55% to $3.61 bln against the $2.89 bln estimated by Wall Street. Income from the sale of shares also rose more than estimated to 2.86 bln against a forecast of $2.67 bln. Finally, JPM, BAC and GS profits were 8.6 bln (-28% year-on-year), 6.25 bln (-32% year-on-year) and $2.79 bln (-48% year-on-year) respectively. This significant decline may shatter the stereotype that a high-interest rate environment can only be beneficial for banks.   Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Banks' earnings summary - do rising interest rates benefit financial institutions?
Gold Has A Chance For The Rejection Of The Support

Precious Metals: Gold In The Clouds. What Will Be Next?

InstaForex Analysis InstaForex Analysis 25.08.2022 17:28
Relevance up to 16:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Gold price did not manage to enter the cloud yesterday but today's candlestick is inside it. It is almost certain that price will close inside the cloud turning trend to neutral according to the Ichimoku cloud indicator. Price is still above the kijun-sen (yellow line indicator) found at $1,743. The tenkan-sen (red line indicator) however is above the current price. We find the tenkan-sen at $1,764. The upper cloud boundary is at $1,780 while the lower cloud boundary is at $1,748. Is Gold preparing for a new upward move? A break above the cloud will increase chances of the bullish scenario. Is this a pause to the downward trend of Gold prices? A break below $1,740 will increase chances of the bearish scenario. The Ichimoku cloud indicator helps us define key support and resistance levels in order to identify the major trend faster.   Source: Forex Analysis & Reviews: Ichimoku cloud indicator analysis on Gold for August 25th, 2022.
Forex: XAU/USD Is Rising For The 3rd Day In A Row!

Forex: XAU/USD Is Rising For The 3rd Day In A Row!

InstaForex Analysis InstaForex Analysis 25.08.2022 18:02
Relevance up to 13:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Amid a weakening dollar and growing risks of a recession in the US and the global economy, gold quotes have again turned to growth. XAU/USD is rising for the 3rd day in a row today and is trading near 1764.00 as of this writing, in close proximity to the strong resistance level at 1766.00 (200 EMA on the 4-hour chart). In case of its breakdown, the important resistance level of 1775.00 (50 EMA on the daily chart) becomes the target, the breakdown of which will increase the probability of further corrective growth towards the key resistance levels of 1800.00, 1819.00 (200 EMA on the daily chart). Their breakdown will confirm the return of XAU/USD to the long-term bull market zone. In an alternative scenario, there will be a rebound from the resistance level of 1766.00, and the XAU/USD pair will resume its decline. The first signal to open short positions will be a breakdown of the important short-term support level of 1757.00 (200 EMA on the 1-hour chart). A breakdown of the key support level of 1690.00 (200 EMA on the weekly chart) will cause XAU/USD to enter the long-term bear market zone. Support levels: 1757.00, 1748.00, 1700.00, 1690.00, 1682.00 Resistance levels: 1766.00, 1775.00, 1800.00, 1819.00, 1832.00, 1875.00 Trading Tips Sell Stop 1755.00. Stop-Loss 1770.00. Take-Profit 1748.00, 1700.00, 1690.00, 1682.00 Buy Stop 1770.00. Stop-Loss 1755.00. Take-Profit 1775.00, 1800.00, 1819.00, 1832.00, 1875.00 Source: Forex Analysis & Reviews: XAU/USD Technical Analysis and Trading Tips for August 25, 2022
The Upside Of The EUR/USD Pair Remains Limited

Forex: How Little We Understand Inflation. EUR/USD Bulls

InstaForex Analysis InstaForex Analysis 25.08.2022 18:13
Relevance up to 14:00 2022-08-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Now we realize how little we understand inflation. This is how Jerome Powell argued in the Portuguese Sintra, admitting the mistake of the end of 2021. Then the Fed insisted that high prices were temporary. The time has come for Jackson Hole, and the American central bank can no longer afford to be wrong. It must throw all its strength into the fight against inflation, which puts the EURUSD bulls in a hopeless position. Markets are growing on expectations, and no one cares about what happened in the past. Yes, the United States faced a technical recession in the first half of the year, but the quotes of the main currency pair are based on expectations of a recession in the eurozone economy. According to UBS, it is already there. The bank forecasts a 0.1% contraction in the currency bloc's GDP in the third and 0.2% in the fourth quarter. It lowered the estimate of gross domestic product growth for 2023 from 1.2% to 0.8%. These projections are based on the assumption that gas prices will continue to rise, but there will be no major shortages. If Germany and other countries move towards rationing, the recession will be much deeper. UBS Eurozone GDP Forecasts The fact that not everything is in order in the leading economy of the eurozone is also evidenced by the drop in business expectations from the German IFO institute from 80.4 in July to 80.3 in August. Moreover, the fact that the indicator turned out to be better than the forecasts of Bloomberg experts, and Germany's GDP in the second quarter grew by 0.1% with the initial reading of zero expansion, inspired the EURUSD bulls to counterattack. Music did not play for them for long, the main currency pair could not gain a foothold above parity. It was hard to imagine a different outcome on the eve of Jackson Hole. Dynamics of the business climate and GDP in Germany There is a lot at stake. If not all. Obviously, Jerome Powell will continue to talk about the need to fight inflation, but will he talk about the possibility of going too far—overdoing it with tightening monetary policy? If yes, investors may take this as a "dovish" surprise, pushing up not only US stock indices but also EURUSD. Is the euro capable of a full-fledged correction? At first glance, no, because the downward trend in the main currency pair is based on such powerful drivers as the discrepancies in the economic growth of the US and the eurozone and in the monetary policy of the Fed and the ECB. However, more than 12% subsidence of the euro against the US dollar since the beginning of the year suggests that many negative factors are already in price. All you need is a signal to take profits on shorts and pull back. Technically, there is a risk of a pin bar forming on the EURUSD daily chart. If this is the case, traders will have an opportunity to enter a short position on a break of its low near the pivot level at 0.995. The further plan assumes building up shorts in case of storming the local minimum at 0.9895. The level of 0.97 acts as a target for the downward movement. Source: Forex Analysis & Reviews: EURUSD: Bulls' attempt to counterattack ahead of Jackson Hole turned into a fiasco
📈 Tech Giants Soar, 💵 Dollar Plummets! Disney-Charter Truce, Wall Street's AI Warning!

Wow! S&P 500 Gained Over 1.40%, Nasdaq Added 1.67%!

ING Economics ING Economics 26.08.2022 08:28
Prelude to Powell uniformly hawkish... Source: shutterstock Macro Outlook Global Markets: US equities seem to be betting on the Fed’s Powell providing a lifeline, which seems like an optimistic point of view.  The S&P500 opened up and had a strong start before fading and then rallying hard into the close to finish up 1.41% on the day. The NASDAQ closed 1.67% higher. Equity futures are hedging this optimism a bit, indicating small declines at the open today. The latest optimism could reflect a slightly lower bond yield environment, but it seems outsized if that is indeed the case. 2Y US Treasury yields backed off only 2.4bp yesterday to take them to 3.366%. There was a bit more action at the back end of the curve, where 10Y UST yields fell 7.8bp, taking them to 3.026%. What caused that? Well, it wasn’t other Fed speakers in the run-up to Powell’s speech at Jackson Hole today. James Bullard, for example, noted that he favoured “front-loading”, and a year-end Fed funds rate of 3.75%-4%. Esther George noted that rates may have to go above 4%, and hadn’t moved into a restrictive range yet. Raphael Bostic said it was too soon to call peak inflation and was keeping an open mind on 50bp to 75bp next month, and Patrick Harker said rates needed to become restrictive (implying that they currently aren’t). So it is a fair bet that the Powell speech will take a similar turn today. If so, the most likely market reaction would be a rise in yields at both the front and back of the yield curve, a sell-off in equities and dollar strength as markets seem to have been positioning themselves for a more supportive set of comments.  In currency space, EURUSD had another go at moving higher, pushing up in the direction of 1.004 before retreating back below parity to finish almost unchanged from this time yesterday at 0.9970.  The AUD has made further gains though, rising to 0.6982 vs the dollar before settling a bit lower at 0.6972. Cable is looking a little stronger today too, and is up to 1.1829 now, while the JPY has pulled back down to below 137 and is now 136.57. The rest of the Asian FX pack also gained, led by the THB (helped by the passing of a budget yesterday) and the KRW (lifted by the BoK’s 25bp rate hike). G-7 Macro: It really all boils down to what Jerome Powell says today, and his speech will eclipse any of the other macro releases in all likelihood. We have already had some Tokyo CPI data this morning for August, and this shows annual inflation for the Japanese capital running at 2.9%, up from 2.5% in July. This suggests a similar  0.4pp increase in national headline inflation, which would take it to 3.0%YoY if so. The rise in the core rate of inflation excluding fresh food and energy was more muted, however, rising only 0.2pp to 1.4%YoY, which should provide the BoJ with the comfort it needs to leave policy settings unchanged. PCE inflation data from the US for July are out today. Look in particular at the core measure which the Fed is thought to be taking a bit more interest in than the headline. The current rate of PCE inflation is 6.8%YoY. It is 4.8% for the core rate. The core rate is expected to fall 0.1pp today. A flat reading would be a disappointment. University of Michigan consumer sentiment and inflation expectations close out the macro calendar for the G-7 today.   What to look out for: Powell's speech at Jackson Hole Japan Tokyo CPI inflation (26 August) Singapore industrial production (26 August)  Thailand trade balance (26 August) Malaysia CPI inflation (26 August) Powell speech at Jackson Hole symposium (26 August) US University of Michigan sentiment and core PCE (26 August) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The US Dollar Index Is Expected A Pullback Rally At Least In The Near Term

Doubts On The Health Of US Consumers After Dollar Tree Comments

Saxo Strategy Team Saxo Strategy Team 26.08.2022 09:47
Summary:  U.S. equities rallied ahead of the Jackson Hole Powell keynote. Comments from discount retailer Dollar Tree about pressures to cut prices and customers shifting to “needs-based consumable products” cast doubts on the health of U.S. consumers. The market chatters and then a WSJ article on a potential deal between the U.S. and China on access to audit working papers and avoiding Chinese ADR delisting sent the share prices of China internet stocks and ADRs soaring. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities rallied for the second day in a row ahead of the much anticipated Powell speech at the Jackson Hole symposium on Friday, S&P 500 +1.4%, Nasdaq 100 +1.8%.  Discount retailers, Dollar General (DG:xnys) and Dollar Tree (DLTR:xnys) reported Q2 results.  Discount General beat the relatively high expectations and finished the session down modestly -0.6%.  Peer Dollar Tree’s results fared weaker with in-line Q2 results but a downward revision of full-year EPS due to its plan to cut prices sent its share price 10.2% lower.   U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) U.S. treasury yield fell 7 to 8 basis points from the belly to the long-end of the curve after a strong 7-year auction. The change in 2-year yields was relatively modest, -2bps. Flows were light ahead of Chair Powell’s keynote speech at the Jackson Hole event on Friday. Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) China internet stocks rallied dramatically in a typhoon-shortened session in Hong Kong on Thursday, JD.COM (09618:xhkg) +11%, Bilibili (09626:xhkg) +10.3%, Baidu (09888:xhkg) +9.2%, Alibaba (09988:xhkg) +8.8%, Meituan (03690:xhkg) +8%, Tencent (00700:xhkg) +4.8%.  Hang Seng Tech Index (HSTECH.I) surged 6%.  Investors found optimism in the 19-point stimulus package as well as chatters among traders about unverified progress on resolving the audit working papers access issue in the heart of the Chinese ADR delisting risk.  During New York hours, the Wall Street Journal ran an article, suggesting that the U.S. and China are nearing a deal to allow American regulators to inspect in Hong Kong the audit working papers of Chinese companies listed in the U.S.  The NASDAQ Golden Dragon China Index soared 6.3%. Compared to their respective Hong Kong closing levels, Alibaba +4.5%, Meituan +4.0%, Tencent +2.1%.  Chinese property names rallied across the board by 2% to 5%.   The performance in A-shares was more measured, CSI 300 fluctuated between gains and losses and finished the session 0.8% higher.   Coal miners, oil and gas, and crude tankers stocks surged in Hong Kong as well as mainland bourses.  Mainland investors did not participate much in the sharp move higher as southbound flows registered a net outflow. AUDUSD on the backfoot in early Asian hours The USD rebound returned in early Asian hours on Friday amid a sustained hawkish tilt inn Fed commentaries ahead of Powell taking the stage at the Jackson Hole summit. AUDUSD saw downside pressures and slid to sub-0.6960 from an overnight high of 0.6991. AUDNZD found support at 1.1200 and may be looking at new highs of the cycle with the current account differentials at play. USDJPY caught a bid early as well, and rose to 136.70 with focus squarely on high Powell’s comments can take the US yields. Crude oil prices (CLU2 & LCOV2) Hawkish Fed comments and further prospects of Iran deal saw crude oil reversing lower in the overnight session. However, modest gains have returned this morning with the supply side remaining a key focus with Brent futures close to $100 and WTI at $93+. Saudi Arabia was joined by Libya and Congo in supporting the view that supply curbs may be needed to stabilise the oil market. Further concerns on Kazakhstan’s supply also emerged amid repair works required on three damage moorings at the port facility. What to consider? Some more hawkish Fed comments before we get to Powell Several Fed speakers were on the wires echoing the same message on inflation and more rate hikes. The markets are still holding their breath for wat Powell has to say later today. James Bullard (2022 voter) reiterated his year-end target of 3.75% to 4% and market expectation is not too far from that now. Esther George (2022 voter) was more open about rates going above 4%, but stayed away from a specific guidance for the September meeting. Patrick Harker (2023 voter) said rates need to be lifted into restrictive territory. Raphael Bostic (2024 voter) told the WSJ it's too soon to call inflation’s peak and that he hasn't decided yet on a 50 or 75bps rate hike next month. Tokyo CPI surprises to the upside Japan’s Tokyo inflation for August has come in close sight of the 3% mark, with headline at 2.9% y/y vs. expectations for 2.6%. The core measure was also above expectations at 2.6% y/y, coming in despite measures to help cool price pressures. Further gains can be expected later in the year as cheaper cell phone fees are reversed, and we also see threats of an energy crisis in Japan as LNG imports get diverted to Europe. This will continue to erode the purchasing power and keep the risk of a BOJ pivot alive. Europe’s energy woes French power prices soared 15% to EUR 900/MWh, more than 10x last year’s price amid expanding nuclear outages. Meanwhile in Germany, power prices for next year soared as much as 23% to an all-time high of EUR 792/MWh. UK and Italy also recorded fresh highs in power prices while Spain's parliament approved a law aimed at cutting energy use. The UK will announce its financial commitment for a new nuclear plant, Sizewell C, next week. The U.S. and China are said to nearing a deal in resolving the Chinese ADR audit papers inspection issue According to a Wall Street Journal article, Chinese securities regulators “are making arrangements for U.S.-listed Chinese companies and their accounting firms to transfer their audit working papers and other data from mainland China to Hong Kong” and “would allow American accounting regulators to travel to Hong Kong to inspect the audit records”. It is important to note that an agreement has yet to be reached and the regulators from both sides remain silent about it so far.  One of the hurdles to the proposed arrangement of transfer of audit working papers from the mainland to Hong Kong can satisfy the U.S. regulators, particularly the U.S. SEC Chair Gensler who has emphasized “full access”.  If this turns out to happen, it will not only benefit the Chinese companies that are listed in the U.S. but also sets the U.S. and China in a more conciliatory mood at least in some financial matters, and shows case the uniqueness of the position of Hong Kong.  German business sentiment is not that bad in August The headline reading is out at 88.5 versus expected 86.8 and prior 88.6. This is only a bit softer than the previous month. The same goes as well for the current conditions (out at 97.5 in August versus prior 97.7) and the expectations (80.3, unchanged compared to July). Overall, business sentiment remains soft. But given the quick economic deterioration, it could have been much worse. We still expect sentiment to further fall in the coming months as the German economy sinks into a recession. The energy crisis is hitting very hard consumers and companies – thus leading to lower demand and corporate investment. Yesterday, Germany’s benchmark year-end power kept rising (+13% in one day) to a new record of EU725/MWH. So far, the German government has spent roughly €60bn to limit the impact of higher energy prices on households and corporations. This represents about 1.7% of GDP according to the calculations of the Belgium-based think tank Bruegel. In percentage of GDP, this is still much less than many other European countries (3.7 % of GDP for Greece, 2.8 % for Italy and 2.3 % for Spain, for instance). In any case, this is unsustainable, of course. Softer July US PCE print would not derail Fed’s tightening After a softer CPI report in July, focus will turn to the PCE measure – the version of the CPI that is tracked by the Fed to gauge price pressures. Lower gasoline prices mean that PCE prints could also see some relief, although we still upside pressures to inflation given that energy shortages will likely persist and easing financial conditions mean that inflation could return. We would suggest not to read too much into a softer PCE print this week, as the stickier shelter and services prices mean that the 2% inflation target of the Fed remains unachievable into then next year. This suggests that the aggressive tightening by the Fed will likely continue, despite any likely softness in the PCE this week. U.S. discount retailers reported mixed Q2 results, highlighting pricing pressures ahead Dollar General (DG:xnys) reported revenue growth of 9% YoY to $9.4 billion, in line with the consensus estimate, and EPS of $2.98, +10.6% YoY, above the consensus estimate of $2.94.  Same-store sales in Q2 grew 4.6% YoY, above the consensus at +3.8%.  In the company’s guidance for 2022, revenue growth was raised to +11% from previously +10.0-10.5% and the same-store-sales growth was raised to +4.0-4.5% from +3.0-3.5%.  Q2 results from another discount retailer, Dollar Tree (DLTR:xnys) were however weaker, with revenue growth of 6.7% YoY to $6.77 billion, slightly below the consensus estimate of $6.79 billion.  EPS came in at $1.60, in line with expectations.  Same-store-sale for the quarter was +4.9%, below the consensus estimate at +5.0%.  The company lowered its 2022 full-year EPS guidance to $7.10-$7.40 and said that 60% of the cut was due to cutting prices.  The management said that they “expect the combination of this pricing investment at Family Dollar and the shoppers’ heightened focus on needs-based consumable products will pressure gross margins in the back half of the year”.  The comments from Dollar Tree casts a shawdow over the health of consumers in the U.S. in general.  Earnings on the tap Meituan (03690:xhkg) is scheduled to report Q2 results on Friday after the market close.  Analysts are upbeat about the food and grocery delivery platform’s potential in being benefited from the recovery of consumer demand amid the reopening and cost control initiatives.  The consensus estimate (as per the Bloomberg survey) for Q2 revenue is to grow 11% YoY to RMB48.59billion and adjusted net loss of RMB2.17 billion.  Coal miner China Shenhua Energy (01088:xhkg) and oil and gas company Sinopec (00386:xhkg) are also scheduled to report on Friday.      For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 26, 2022
German Business Confidence Dips, ECB's Lagarde Hosts Central Banking Conference in Portugal, EUR/USD Drifts Higher

The US Dollar Trades Near Cycle Highs Ahead Of The Speech

Saxo Strategy Team Saxo Strategy Team 26.08.2022 09:55
Summary:  Markets are steady ahead of a widely anticipated speech at the US Federal Reserve’s Jackson Hole, Wyoming conference from Fed Chair Jerome Powell, although he may do little more than remain on message on the Fed’s plans for tightening policy. The US dollar trades near cycle highs ahead of the speech, with US treasury yields having eased back a bit yesterday on a strong 7-year treasury auction. In Europe, power and natural gas prices continue their ascent from already dire levels, thereby supporting demand for fuel-based products.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures bounced back 1.4% to the 4,200 level in what seems to have been a technical move ahead of Jerome Powell’s keynote speech at Jackson Hole which is expected today. For equities the main question is how central banks are seeing structural in the years to come because that will be linked to the terminal rate the Fed sees as neutral for the economy and inflation. The US 10-year yield is trading around the 3.05% level this morning and we expect a quiet session in US equities unless Powell’s speech delivers a hawkish tone which could then erase yesterday’s gains. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) After staging an impressive bounce from the trough of a 2-month losing streak yesterday, Hong Kong equities opened higher before giving back much of its gains to end the morning session 0.7% higher. Yesterday’s 3.6% rally in the Hang Seng Index and 6% surge in Hang Seng TECH Index were fueled by initially chatters among traders about unverified progress on resolving the audit working papers access issue in the heart of the Chinese ADR delisting risk. During New York hours, the Wall Street Journal ran an article, suggesting that the U.S. and China are nearing a deal to allow American regulators to inspect in Hong Kong the audit working papers of Chinese companies listed in the U.S. The news sent Chinese ADRs soaring, the NASDAQ Golden Dragon China Index +6.3%. US dollar steady on the strong side ahead of Jackson Hole Yesterday saw some tactical chopiness in USD pairs, as the greenback sold off to support in places and criss-crossed parity in EURUSD terms before settling back to the strong side ahead of Fed Chair Powell’s speech at the Jackson Hole conference today. Powell is widely expected to stay on message on the Fed’s hopes to get ahead of the curve, but surprises are possible if his language is a bit more pointed than expected or he brings stronger guidance on the importance of QT, etc. Next event risks for the USD in the wake of today’s Powell speech (and July PCE inflation print as noted below) are next Friday’s payrolls/earnings report, the Sep 13 Aug. CPI data release, and then the Sep 21 FOMC decision. AUDNZD The Antipodean currency pair closed yesterday at its highest level since 2017 in a bid to escape the range that has prevailed since then, with a bit more range toward 1.1300 that stretches all the way back to 2013. If the pair can make a notable foray above these levels, it might suggest that traders are viewing the pair from a current account perspective, as Australia has been running record surpluses on its formidable complex of commodity exports, while New ZEaland is running unprecedented deficits on rising costs for energy imports. In the longer term perspective, AUDNZD has traded above 1.3500 as recently as 2011. Crude oil (CLV2 & LCOV2) Crude oil trades steady with Brent trading around $100 per barrel with a tightening supply outlook offsetting the recessionary drums that have been banging ever louder in recent weeks. Focus on today’s Jackson Hole speech from Fed Chair Powell and its potential impact on bond and currency markets, and with that the general level of risk appetite in the market. EU gas and power reached new peaks on Thursday on worries about Russian gas supplies following the upcoming 3-day maintenance supporting demand for crude-based products like diesel and heating oil. The prospect of a revived Iran nuclear deal still receiving some attention although a deal may only have a small immediate impact, small change compared with the soon to expire US SPR release program which saw 8 million barrels pumped into the market last week. In Brent, the next level of upside interest can be found at $102.50. Copper (COPPERUSDEC22) Copper has settled into a $3.55 to $3.73 range after making a steady recovery from the June/July +30% collapse. The primary focus remains on China and the government’s efforts to shore up its troubled property sector and its slowing economy in general. This past week we have seen rate cuts and the announcement of a 1 trillion-yuan economic stimulus program, including a 300-billion-yuan investment in infrastructure projects, which will boost the consumption of industrial metals, including copper. Above the current range copper may target $3.85/lb next but it will likely require a rally above $4/lb before speculators reverse the net short they have held since April. US Treasuries (TLT, IEF) US treasury yields fel back a few basis points, but the 10-year benchmark still trades above 3.00% today ahead of Fed Chair Powell’s speech. (More below – special focus on longer end of the yield curve on any QT guidance in the speech). A strong auction of 7-year treasuries yesterday helped bring support to the market after the weak 5-year auction the prior day. What is going on? ECB meeting minutes suggest another 50-basis points hike The meeting minutes point to another 50-basis point hike at the September 8 ECB meeting, a move that is actually more than fully priced in by the market. At the same time, the ECB minutes noted that it saw “no evidence of significant second round effects” in which wages drive an inflationary spiral. The central bank’s “TPI” or Transmission Protection Instrument meant to prevent peripheral sovereign yield spreads from widening excessively was widely discussed and is clearly a hot potato politically. An FT article noted that hedge funds have built up a nearly EUR 40 billion speculative short in Italian BTPs Additional hawkish Fed comments before we get to Powell Several Fed speakers were on the wires echoing the same message on inflation and more rate hikes. The markets are still holding their breath for what Powell has to say later today. James Bullard (2022 voter) reiterated his year-end target of 3.75% to 4% and market expectation is not too far from that now. Esther George (2022 voter) was more open about rates going above 4% but stayed away from a specific guidance for the September meeting. Patrick Harker (2023 voter) said rates need to be lifted into restrictive territory. Raphael Bostic (2024 voter) told the WSJ it's too soon to call inflation’s peak and that he hasn't decided yet on a 50 or 75bps rate hike next month. German business sentiment is not that bad in August The headline IFO Survey reading was out at 88.5 versus 86.8 expected and 88.6 prior. This is only a bit softer than the previous month. The same goes as well for the current conditions (out at 97.5 in August versus prior 97.7) and expectations (80.3, unchanged compared to July). Overall, business sentiment remains soft. But given the quick economic deterioration, it could have been much worse. We still expect sentiment to further fall in the coming months as the German economy sinks into a recession. The energy crisis is hitting consumers and companies very hard – thus leading to lower demand and corporate investment. Yesterday, Germany’s benchmark year-end power kept rising (+13% in one day) to a new record of EU725/MWH. So far, the German government has spent roughly €60bn to limit the impact of higher energy prices on households and corporations. This represents about 1.7% of GDP according to the calculations of the Belgium-based think tank Bruegel. In percentage of GDP, this is still much less than many other European countries (3.7 % of GDP for Greece, 2.8 % for Italy and 2.3 % for Spain, for instance). In any case, this is unsustainable, of course. The US and China are getting closer to resolve Chinese ADR audit papers inspection issue According to a Wall Street Journal article, Chinese securities regulators “are making arrangements for US-listed Chinese companies and their accounting firms to transfer their audit working papers and other data from mainland China to Hong Kong” and “would allow American accounting regulators to travel to Hong Kong to inspect the audit records”. It is important to note that an agreement has yet to be reached and the regulators on both sides remain silent about it so far. One of the hurdles to the proposed arrangement of transfer of audit working papers from the mainland to Hong Kong will be whether it can satisfy the US regulators, particularly the SEC Chair Gensler who has emphasized “full access”. If this turns out to happen, it will not only benefit the Chinese companies that are listed in the US but also sets the US and China in a more conciliatory mood at least in some financial matters, and shows case the uniqueness of the position of Hong Kong U.S. discount retailers reported mixed Q2 results, highlighting pricing pressures ahead Dollar General (DG:xnys) reported revenue growth of 9% y/y to $9.4bn, in line with the consensus estimate, and EPS of $2.98, +10.6% y/y, above the consensus estimate of $2.94.  Same-store sales in Q2 grew 4.6% y/y, above the consensus at +3.8%. In the company’s guidance for 2022, revenue growth was raised to +11% from previously +10.0-10.5% and the same-store-sales growth was raised to +4.0-4.5% from +3.0-3.5%. Q2 results from another discount retailer, Dollar Tree (DLTR:xnys) were however weaker, with revenue growth of 6.7% y/y to $6.77bn, slightly below the consensus estimate of $6.79bn.  EPS came in at $1.60, in line with expectations. Same-store-sale for the quarter was +4.9%, below the consensus estimate at +5.0%.  The company lowered its 2022 full-year EPS guidance to $7.10-$7.40 and said that 60% of the cut was due to cutting prices. The management said that they “expect the combination of this pricing investment at Family Dollar and the shoppers’ heightened focus on needs-based consumable products will pressure gross margins in the back half of the year”. The comments from Dollar Tree cast a shadow over the health of consumers in the US in general.  Meituan is scheduled to report Meituan (03690:xhkg) is scheduled to report Q2 results on Friday after the market close. Analysts are upbeat about the food and grocery delivery platform’s potential benefitting from the recovery of consumer demand amid the reopening and cost control initiatives.  The consensus estimate (as per the Bloomberg survey) for Q2 revenue is to grow 11% YoY to RMB48.59 billion and an adjusted net loss of RMB2.17 billion What are we watching next? The Kansas City Fed hosts its annual symposium in Jackson Hole This year’s theme is “Reassessing Constraints on the Economy and Policy”. The symposium will last until Saturady. Fed Chair Jerome Powell will speak today. Given the loosening of financial conditions since the June FOMC meeting, the market has been concerned that Powell will echo the pushback against the notion that the Fed knows that it is set to materially slow its pace of policy tightening after the September 21 FOMC rate decision (majority looking for another 75 basis points). Data dependency will likely be underlined in his speech, but any guidance on the Fed’s approach to QT could also garner considerable attention as longer treasury yields pull back higher toward the cycle highs from June. Softer July US PCE print would not derail Fed’s tightening After a softer CPI report in July, focus will turn to the PCE measure – the version of the CPI that is tracked by the Fed to gauge price pressures. Lower gasoline prices mean that PCE prints could also see some relief, although we still upside pressures to inflation given that energy shortages will likely persist and easing financial conditions mean that inflation could return. We would suggest not to read too much into a softer PCE print this week, as the stickier shelter and services prices mean that the 2% inflation target of the Fed remains unachievable into then next year. This suggests that the aggressive tightening by the Fed will likely continue, despite any likely softness in the PCE this week. Earnings to watch Today’s earnings focus is Meituan which is expected to see 11% y/y revenue growth with estimates expecting to see growth accelerating into Q3, so this will be the market’s focus in today’s earnings release. The latest stimulus efforts by the Chinese government and lifting of mobility restrictions could provide tailwind for the consumer into Q3. Today: Meituan, China Shenhua Energy, China Petroleum & Chemical Next week’s earnings releases: Monday: Fortescue Metals, Haier Smart Home, Foshan Haitian Flavouring, Agricultural Bank of China, BYD, Pinduoduo, Trip.com, DiDi Global Tuesday: Woodside Energy, ICBC, China Yangtze Power, Midea Group, Tianqi Lithium, Bank of Montreal, China Construction Bank, Bank of China, Great Wall Motor, COSCO Shipping, Partners Group, Baidu, Crowdstrike, HP Wednesday: MongoDB Thursday: Pernod Ricard, Broadcom, Lululemon Athletica, Hormel Foods Friday: BNP Paribas Economic calendar highlights for today (times GMT) 0800 – Italy Aug. Consumer/Manufacturing Confidence surveys 1230 – US Jul. Personal Income/Spending 1230 – US Jul. PCE Inflation 1400 – US Fed Chair Powell to speak at Jackson Hole, Wyoming 1400 – US Aug. Final University of Michigan Confidence Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 26, 2022
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

Forex: Euro To US Dollar - Technical Analysis - 26/08/22

InstaForex Analysis InstaForex Analysis 26.08.2022 10:22
Technical Market Outlook: The EUR/USD pair had made a new swing low at the level of 1.0034, however the attempt to break through the short-term trend line resistance has failed and the market returned lower towards the technical support seen at 0.9955. The nearest technical resistance located at the level of 1.0000 had been violated and bulls are now targeting the level of 1.0099 or 38% Fibonacci retracement level located at 1.0078. Please notice the neutral momentum on the H4 time frame chart might evolve to positive momentum if the bulls clearly break above the short-term trend line resistance soon. The US Dollar is still being bought all across the board, so the bearish pressure on EUR is still strong, however now it is time for a correction.     Weekly Pivot Points: WR3 - 1.0089 WR2 - 1.0057 WR1 - 1.0035 Weekly Pivot - 1.0025 WS1 - 1.0003 WS2 - 0.9992 WS3 - 0.09960 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue lower towards the level or 0.9900 and below. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue.   Relevance up to 08:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/290111
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

FX: British Pound (GBP) To US Dollar (USD) - Technical Analysis - 26/08/22

InstaForex Analysis InstaForex Analysis 26.08.2022 10:26
Technical Market Outlook: The GBP/USD pair has been seen testing the trend line resistance around the level of 1.1850 and so far no important breakout occurred. The nearest horizontal technical resistance is seen at the level of 1.1890 and this level is the next target for bulls. Nevertheless, after the 163 pips bounce form the new swing low, the bulls up move was capped at 1.1876 as the momentum move down below the level of fifty. The larger time frame trend (daily and weekly) remains down until further notice.     Weekly Pivot Points: WR3 - 1.18835 WR2 - 1.18488 WR1 - 1.18267 Weekly Pivot - 1.18141 WS1 - 1.17920 WS2 - 1.17794 WS3 - 1.17447 Trading Outlook: The Cable is way below 100 and 200 DMA , so the bearish domination is clear and there is no indication of down trend termination or reversal. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame chart last week. The next long term target for bears is seen at the level of 1.1410. Please remember: trend is your friend. Relevance up to 08:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/290113
Sebastian Seliga Comments On EUR/USD, Dollar Index, XAUUSD And S&P 500 - 29/08/22

Forex: GBP/USD. Dollar Will Get Stronger And Stronger

InstaForex Analysis InstaForex Analysis 26.08.2022 10:34
Relevance up to 07:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Yesterday there was one signal formed to enter the market. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1849 level in my morning forecast and advised making decisions from it. An unsuccessful attempt by the bulls to continue the pair's growth in the first half of the day resulted in forming a false breakout in the area of 1.1849 and a signal to sell the pound. And although the pair fell by 25 points, I expected a stronger downward movement. The technical picture changed in the second half of the day, but it was not possible to receive signals to enter the market. When to go long on GBP/USD: Today, there is still no important fundamental statistics for the UK, so traders will wait for Federal Reserve Chairman Jerome Powell's speech and react to his statements - there is no other reason for a surge in volatility. Taking into account that trading is carried out in the area of moving averages, the best scenario would be long positions in the area of the nearest support at 1.1794, which will give a chance for a continuation of the upward correction with a return to 1.1835. A breakthrough and test from top to bottom of this range will testify to the continued growth of GBP/USD and create a buy signal with growth to a more distant level of 1.1872, a breakthrough of which will depend entirely on Powell's statements. The farthest target will be the area of 1.1921, where I recommend taking profits. If the GBP/USD falls and there are no bulls at 1.1794, the pressure on the pair will increase. A breakthrough of this range will allow the bears to break out of the triangle and continue the downward trend. In this case, I advise you to postpone long positions until the next support at 1.1756. You can buy there only on a false breakout. I recommend opening long positions on GBP/USD immediately for a rebound from 1.1718, or even lower - around 1.1684, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Yesterday, the bears tried with all their might to keep the market under their control, and they succeeded. Good statistics for the US provided help. The lack of statistics on the UK today is unlikely to benefit anyone. I do not rule out a sharp movement from the pound up to the area of 1.1835 even before Powell's speech. The best scenario for selling the pound would be forming a false breakout at this level, which would allow us to return to the intermediate support at 1.1794. A breakdown and reverse test of this range will provide an entry point for selling with a fall to 1.1756 and will cross out all the bulls' efforts to build an upward correction of the pair. A more distant target will be the area of 1.1718, where I recommend taking profits. In case GBP/USD grows and there are no bears at 1.1835, the chances of a larger upside correction will seriously increase, and bulls will have an excellent opportunity to return to 1.1872. Only a false breakout there will provide an entry point into short positions based on the pair moving down. If there is no activity there, I advise you to sell GBP/USD immediately for a rebound from 1.1921, counting on the pair's rebound down by 30-35 points within the day. COT report: According to the Commitment of Traders (COT) report from August 16, both short positions and long positions increased, but these changes no longer reflect the real current picture. Serious pressure on the pair, which began in the middle of last week, continues now, and for sure those who want to buy the pound in the current difficult macroeconomic conditions will become less and less. Ahead of us is a meeting of American bankers in Jackson Hole, which may lead to even greater strengthening of the dollar against the pound. This will happen on the condition that Federal Reserve Chairman Jerome Powell announces the preservation of the committee's previous position regarding the active and tough increase in interest rates, counting on the further fight against inflation and bringing it back to normal. The latest COT report indicated that long non-commercial positions rose 1,865 to 44,084, while short non-commercial positions rose 506 to 77,193, further narrowing the negative non-commercial net position to -33,109 versus -34,468. The weekly closing price remained virtually unchanged at 1.2096 versus 1.2078. Indicator signals: Moving averages Trading is carried out in the area of 30 and 50-day moving averages, which indicates the sideways nature of the market before important events. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair goes down, the lower border of the indicator around 1.1794 will act as support. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Source: Forex Analysis & Reviews: GBP/USD: plan for the European session on August 26. COT reports. The pound is preparing to break through the triangle
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

Money Markets Are Expecting The Bank Of England To Rise Rates Next Month

InstaForex Analysis InstaForex Analysis 26.08.2022 10:54
Relevance up to 08:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The Jackson Hole Symposium is in full swing. Today, everyone is waiting for the speech of the head of the Federal Reserve. The further dynamics of dollar currency pairs, including the GBP/USD, depends on Fed Chairman Jerome Powell's comments The dollar is preparing to take off This week's highlight is the Fed Economic Forum at Jackson Hole. It should culminate in Powell's speech today. Markets are hoping that the head of the Fed will shed light on the central bank's future plans for interest rates. Signs of easing inflationary pressures in the US this month have sparked speculation that monetary tightening might slow down. However, a series of hawkish comments by Fed members last week and this week have left markets believing that the Fed will not loosen its grip on rising prices. Inflation in America is still at record highs. The annual rate was 8.5% in August, well above the Fed's target of 2%. Ahead of today's event, Fed fund futures traders estimate a 61% likelihood of a 75 bps rate hike in September. Expectations of a more hawkish tone from Powell provide significant support to the dollar. Over the week, the US currency index rose by 0.38%, and since the beginning of August its growth has amounted to 2.5%. One of the currencies that shows the worst dynamics in relation to the greenback continues to be the British pound. Due to the large difference in interest rates between the Bank of England and the Fed, the pound has fallen against the dollar by about 12% this year and risks falling even lower in the foreseeable future. If Powell signals a third consecutive 75 bps rate hike at Jackson Hole, the GBP/USD pair could head for another steep plunge. Recall that earlier this week, the pound hit its lowest level against the dollar since March 2020. The rate collapsed on the back of a decline in the PMI index for the manufacturing sector in the UK. This morning, the pound is still trading near a 2.5-year low, despite its strong rise the day before. The GBP/USD jumped 0.5% on Thursday to hit 1.1844. According to many analysts, yesterday's growth of the asset is nothing more than just a technical reset. In other words, we saw temporary relief as part of a long-term weakening trend. What will happen to the pound? Most forecasts for the pound are now negative. Experts believe that the GBP/USD pair will almost never react to the comments of the governor of the British central bank, which will be made during the forum. For now, money markets are expecting the BoE to be more likely to raise rates by 50bps next month. At the same time, the scenario, which includes a possible increase by 75 bps, is almost not considered. And yet, let's assume that a hawk suddenly wakes up in BoE Governor Andrew Bailey, especially since there are weighty prerequisites for this. Today, the British energy regulator is due to announce an increase in energy prices. According to forecasts, the cost will increase by 80% in autumn, which will further accelerate the already record high inflation in the country. To reduce inflationary pressure, hypothetically, the BoE could surprise everyone and go for a sharp increase in rates in September. However, we should not forget how this could turn out for the British economy, which is already on the verge of a recession. Growing fears of an economic slowdown are likely to outweigh the BoE's combative resolve on inflation. Therefore, analysts do not expect any miracles on the GBP/USD chart in the near future. The only scenario in which the pound can rise sharply against the dollar is the unexpected change of tone of the head of the Fed. If the Jackson Hole headliner throws a dovish surprise today, the dollar will weaken on all fronts, including against the pound. But do you yourself believe in such an outcome? Source: Forex Analysis & Reviews: GBP/USD: Headliner of the day - Jerome Powell
Oil Range-Bound, Gold Struggles Amid US Interest Rate Concerns

Forex: EUR/USD May Drive Us Crazy Today! Today's Powell's Speech At Jackson Hole Meeting Is Being Awaited As A Top-Class Blockbuster!

ING Economics ING Economics 26.08.2022 11:04
Today's speech by Jerome Powell in Jackson Hole has been regarded as a pivotal event for markets. However, Powell may refrain from deviating too much from market's expectations, and a reiteration of data dependency could put off part of the market reaction until next week's payrolls data. Still, a consolidation of the hawkish pricing can help the dollar Markets will be scanning Powell's speech today from a number of different perspectives   Monday 29 August is a national holiday in the UK, we'll resume publication of the FX Daily on Tuesday 30 August. USD: Powell may not want to shock the markets (in either direction) Fed Chair Jerome Powell will deliver his much-awaited keynote speech at the Jackson Hole Symposium at 1500 GMT today. Yesterday, comments by other Fed officials largely fell on the hawkish side of the spectrum. The arch-hawk James Bullard stressed once again the need for front-loading of rate hikes, suggesting rates should be raised to the 3.75-4.0% mark by the end of this year. The host of the Symposium, Kansas City Fed President Esther George, also said high inflation warrants more hikes, but highlighted the importance of incoming labour data (next week) to determine the size of September’s hike. Markets will be scanning Powell’s speech today from a number of different perspectives: inflation, growth outlook, front-loading, and any hint of easing in 2023. All these factors can play a different role in driving the reaction in the FX market, although we see a quite elevated risk that Powell may end up broadly matching the generally hawkish market expectations and avert any significant market shock. On the inflation side, the speech will take place shortly before the release of PCE inflation numbers for July, which are expected to have eased slightly but remain well above 6%. There’s simply not enough evidence or interest by the Fed to sound any less concerned on the inflation picture at this point, and a firm reiteration that additional forceful tightening to curb price pressures could remain at the core of Powell’s message today. Our suspicion is also that today’s speech will keep the notion of data dependency well intact, and potentially put off a big chunk of what could have been today’s market reaction until next week when US jobs figures are released. Looking at the implications for the dollar, we think that markets may find enough reason to push their peak rate pricing a bit closer to the 4.0% mark today and stir away from pricing back more than the current 1-2 rate cuts in 2023, which should ultimately offer some support to the dollar into next weeks’ payrolls release. We think DXY may touch 110.00 in the coming days, if not today.   Despite not being our baseline case, the downside risks to the dollar are non-negligible today. A more alarming tone on recession and any hints that the Fed will be more considerate when it comes to tightening to avert a major dampening impact on the economy would likely trigger an asymmetric negative reaction on the dollar, considering a rather stretched long positioning and short-term overvaluation, especially against European currencies.  Francesco Pesole EUR: Fair value converging to spot? Today’s price action in EUR/USD should be entirely driven by the dollar reaction to Powell’s speech, unless some further developments on the gas crisis story come to the fore. As we expect a moderately dollar-positive impact from Powell, we think EUR/USD may re-test the 0.9900 support. As discussed in recent research notes, the ongoing short-term undervaluation in EUR/USD is quite significant (around 5%), but a shrinking of the risk premium seems unlikely given the major threats to the eurozone’s economic outlook and may instead be triggered by a re-widening of the Fed-ECB rate expectations differential – i.e. with the fair value converging to spot and not the other way around. The minutes of the ECB’s July meeting released yesterday didn’t bring anything new to the table. Interestingly, concerns about a weak euro have become a very central theme within the Governing Council: expect to hear more on this topic from an intensifying ECB speakers activity next week, even though the ECB’s ability to offer a solid floor to the euro has proven blatantly limited given the persistence of high energy prices. Francesco Pesole GBP: Still driven by external factors The pound will lack any domestic drivers today, and Cable should move mostly in line with the dollar reaction to Jackson Hole. A break below the 1.1730 lows from earlier this week may well be on the cards on the back of USD strengthening, as 1.1500 (the 2020 flash crash bottom) is no longer looking like a remote possibility. It will be interesting to see EUR/GBP reaction to today’s speech by Powell. We could see a small recovery in the pair in a hawkish scenario where risk sentiment is hit, considering GBP is normally more sensitive to global risk moves, but the low appetite for EUR longs should keep a cap on the pair for now.    Francesco Pesole CEE: Zloty testing stronger levels Given the completely empty calendar in the region today, the market will wait for the next move at the global level, i.e. the outcome from Jackson Hole. In the meantime, the CEE floaters decided to test stronger levels for the first time in a while, but in the case of the Hungarian forint it was short-lived and we think that even the Polish zloty does not deserve yesterday's gains at this point. The forint, which has been heavily driven by gas prices, has been pulled back to weaker levels and this is negative news for the zloty as well. However, zloty was supported yesterday by a rise in market expectations for a rate hike and could thus benefit from a rising interest rate differential for the first time in a while. In our view, however, this is not enough and if bets on rate hikes do not increase further, the zloty will revert back to 4.770 EUR/PLN in our view. However, markets are already expecting more than a 50bp rate hike at the September National Bank of Poland meeting at this point, which we already think is a very aggressive expectation given the NBP's dovish rhetoric and worse-than-expected economic data. Therefore, we do not expect the interest rate differential to be supportive of the zloty. Thus, CEE floating currencies remain mainly driven by global influence. Frantisek Taborsky Read this article on THINK TagsJackson Hole FX Daily FX Dollar CEE Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Rates Spark: Riding the hawkish wave while it lasts

Very Easy Financial Conditions For Hawkish Speech

Saxo Bank Saxo Bank 26.08.2022 11:13
Summary:  Today we offer our latest musings on Fed Chair Powell's speech at the Jackson Hole Fed conference today and whether Powell is ready to wax as hawkish as some of his colleagues on the Fed, with the bar somewhat high to impress still very easy financial conditions, perhaps. We also look at the latest on natural gas volatility risk, also due to vastly higher weighting in commodities funds, the contribution and importance of earnings as an inflation drive, FX themes and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Market not fearing Powell's Jackson Hole musings
The Upside Of The EUR/USD Pair Remains Limited

Forex: EUR/USD - Price Can Grow Or Price Go Low!

InstaForex Analysis InstaForex Analysis 26.08.2022 11:33
Relevance up to 08:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1). The euro-dollar pair may move downward from the level of 0.9973 (close of yesterday's daily candle) to the support level of 0.9952 (thick blue line). After testing this level, an upward movement is possible with the target of 1.0011, the 23.6% retracement level (white dotted line). Upon reaching this level, the price may continue to move upward with the target of 1.0079, the 38.2% retracement level (white dotted line). Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today the price may move downward from the level of 0.9973 (close of yesterday's daily candle) to the support level of 0.9952 (thick blue line). After testing this level, an upward movement is possible with the target of 1.0011, the 23.6% retracement level (white dotted line). Upon reaching this level, the price may continue to move upward with the target of 1.0079, the 38.2% retracement level (white dotted line). Alternative scenario: from the level of 0.9973 (close of yesterday's daily candle), the price may move down to the lower fractal 0.9900 (white dotted line). After testing this level, work up with the target of 0.9968, the 14.6% retracement level (white dotted line). When testing this level, work up.   Source: Forex Analysis & Reviews: Indicator analysis: Daily review of EUR/USD on August 26, 2022
Forex: Possibility Of Sharp Jump In Many Trading Instruments

Forex: Possibility Of Sharp Jump In Many Trading Instruments

InstaForex Analysis InstaForex Analysis 26.08.2022 11:45
Relevance up to 08:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Euro and pound remains bearish ahead of Fed Chairman Jerome Powell's speech at the Jackson Hole symposium today. Most likely, investors are waiting for hints as to how and at what pace the US central bank is going to raise interest rates in the September monetary policy meeting. If Powell continues to be hawkish, dollar will strengthen further, while risky assets and the US stock market will fall down. But if he hints at a more restrained policy, risk appetite will surge and there will be a sharp jump in many trading instruments. In addition to Powell, the event will be attended by Fed Vice Chairman Lael Brainard and three other Governors: Lisa Cook, Philip Jefferson and Chris Waller, as well as all 12 regional Fed presidents. Some of them are planning to comment before the Fed chief, which could shed light on his final statement. The conference will also be attended by Bank of Japan Governor Haruhiko Kuroda and Bank of England Governor Andrew Bailey. European Central Bank President Christine Lagarde did not attend the meeting, but ECB executive board member Isabelle Schnabel did. A number of other ECB officials are also present, including the heads of the Bank of France and the Bundesbank, as well as policymakers from Africa, Latin America and elsewhere. In terms of the main points of the agenda, there will be four presentations on Friday and Saturday, and there will be discussions every day with the participation of the policymakers. Speakers will also cover topics such as maximum employment, potential output, fiscal constraints and central bank balance sheets. Talking about the forex market, the risk of a further decline in EUR/USD remains. Buyers need to cling to 1.0000 because without it, the pair will have a difficult time rising. Going beyond 1.0000 will open the path to 1.0030 and 1.0070, as well as to 1.0200. But if sellers were more active, the pair will fall to 0.9950, then to 0.9910, 0.9860 and 0.9820. In GBP/USD, buyers managed to push the quotes up, strengthening the chance of an upward correction. Staying above 1.1800 will open the path to 1.1840, 1.1880 and 1.1930, while falling below 1.1800 will push the quotes to 1.1750, 1.1720 and 1.1680. Source: Forex Analysis & Reviews: Euro and pound remains bearish ahead of Jerome Powell's speech at the Jackson Hole symposium  
The Silver Might Then Extend The Recent Pullback

Forex: Platinum Is Up And Up! Technical Analysis

InstaForex Analysis InstaForex Analysis 26.08.2022 11:54
Relevance up to 09:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The chart shows the movement of platinum in the four-hour (H4) chart. The correction in #PLF was more significant than expected. Quotes are currently at $874.5, and there are two scenarios that could possibly happen in the coming days: First is a price increase to $930. Second is a decline to $815.0 - $810.0 per troy ounce. Good luck! Source: Forex Analysis & Reviews: Technical analysis of Platinum
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

Forex: GBP/USD Up And Down. Finally Something Changes!?

InstaForex Analysis InstaForex Analysis 26.08.2022 12:15
Relevance up to 09:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1). The pound-dollar pair may move downward from the level of 1.1829 (close of yesterday's daily candle) to the target of 1.1759, the support level (thick white line). After testing this level, an upward movement is possible with the target of 1.1842, the 14.6% retracement level (red dotted line). Upon reaching this level, the price may continue to move upward with the target of 1.1893, the 23.6% retracement level (red dotted line). Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – down; Volumes – down; Candlestick analysis – down; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today, the price may move downward from the level of 1.1829 (close of yesterday's daily candle) to the target of 1.1759, the support level (thick white line). After testing this level, an upward movement is possible with the target of 1.1842, the 14.6% retracement level (red dotted line). Upon reaching this level, the price may continue to move upward with the target of 1.1893, the 23.6% retracement level (red dotted line). Alternative scenario: from the level of 1.1829 (close of yesterday's daily candle), the price may move down to the lower fractal 1.1716 (daily candle from 08/23/2022), where an upward move is possible with the target of 1.1842, the 14.6% retracement level (red dotted line). After testing this level, the price may continue to move up.   Source: Forex Analysis & Reviews: Indicator analysis: Daily review of GBP/USD on August 26, 2022
The EUR/USD Price May Fall Under 1.0660

Breaking: ECB Has Another Reason To Be Hawkish! Non-financial Corporate Lending Rose!

ING Economics ING Economics 26.08.2022 12:53
Bank lending to non-financial corporates continued to be surprisingly strong at the start of summer despite higher rates and high economic uncertainty. A hawkish sign for the ECB Rising corporate bank lending in the eurozone is a hawkish sign for the ECB ahead of its September meeting   Credit to the private sector continued to grow strongly in July. This is somewhat surprising given higher interest rates, low confidence and banks indicating tighter credit standards and weaker demand for borrowing. Nevertheless, growth for non-financial corporate bank lending accelerated from 6.8% year-on-year to 7.7% YoY in July. This sounds dramatic but is mainly due to a large base effect. Nevertheless, month-on-month bank lending to non-financial corporates was still 0.9% in July, well above recent trend growth. Household credit growth slowed from 4.6 to 4.5%. The trend in household bank lending growth is slowing at the moment, which hints at a more immediate effect of higher interest rates. Money growth continues to slow rapidly as the ECB has stopped quantitative easing (QE) and increased interest rates. Broad money growth (M3) fell from 5.7 to 5.5% YoY in July. The narrower estimate M1, considered to be a better leading indicator of economic activity, dropped from 7.2% YoY to 6.7% YoY growth. The tightening of the monetary stance is adding to concerns about economic growth, as signs are becoming clearer that the economy could have already started a mild recession at this point. September ECB Meeting For the ECB, continued strong growth in corporate bank lending could be taken as a sign that the neutral rate is still a bit away. Sliding consumer borrowing points in the other direction, but overall this is a hawkish sign ahead of the September meeting. We expect the ECB to move by another 50 basis points now before signs of a recessionary economic environment become more widespread. Read this article on THINK TagsGDP Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
USD/JPY Technical Analysis: Awaiting Breakout from Consolidation Range

Europe's Stoxx 600 First Back-to-back Weekly Loss In Two Months!

Marc Chandler Marc Chandler 26.08.2022 12:58
Overview: Ahead of the much-anticipated speech by Federal Reserve Chair Powell, the Fed funds futures are pricing in about a 70% chance of a 75 bp hike next month.  The US 10-year yield is up nearly five basis points today to 3.07% and the two-year yield is firm at 3.38%.  Asia Pacific equities were mostly higher, with China the main exception among the large markets, after US equities rallied yesterday.  Europe’s Stoxx 600 is off about 0.3% to bring this week’s loss to a little over 1%.  It would be the first back-to-back weekly loss in two months.  US futures seeing yesterday’s gains pared.  Europe’s benchmark 10-year yields are mostly 4-8 bp higher.  The greenback is mixed with the European currencies mostly higher, led by the euro, pushing above parity where options for 1.5 bln euros expire today.  The dollar bloc and yen are nursing losses.  The firmer euro tone appears to be lending support to the central European currencies, while the South African rand and Thai baht are off a little more than 0.5% to pace the declines.  Gold set the high for the week yesterday near $1765 and is struggling to stay above $1750 today. October WTI is up 1% today and 3.4% for the week.  It posted an outside down day yesterday to fell 2.5% but is consolidating quietly today. Europe’s natgas benchmark is off 0.5% to pare this week’s gain to around 25.2% after rallying 20.3% last week.  The US natgas is gaining for a third day, up 2.2%.  It was nearly flat on the week coming into today. Iron ore rose almost 3% to bring this week’s gain to 5.2%, the strongest weekly advance this month.  September copper is up 1.4% after yesterday’s 1.5% advance. December wheat is firm after a four-day rally was snapped yesterday. Poor weather is seen behind the week’s 3% gain.   Asia Pacific Tokyo's August CPI, which does a good job of reflecting national forces, rose more than expected.  The headline rate rose to 2.9% from 2.5%, its highest in 30 years.  The core measure, which excludes fresh food, stands at 2.6%, up from 2.3%.  Several banks are now warning it could surpass 3% in Q4.  A little more than half of Japan's inflation stems from fresh food and energy, with which CPI rose 1.4% from a year ago, up from 1.2%.  The Bank of Japan meets on September 22 and is expected to remain the outlier among the high-income countries and maintain the current policy setting, with the target rate at -0.10%.   There are three developments in China to note.  First, after several initiatives, which individually have been played down by observers as not going far enough, China's high-yield bond market, dominated by the property sector, have shown some new domestic interest.  The back-to-back gains are the first in four months. Second, there appears to be some progress in US-China talks about US regulators access to the accounting records of Chinese companies that list on American exchanges.  These Chinese companies have been instructed to prepare audit working papers to bring to Hong Kong to be reviewed by US officials.  Although mainland equities have languished this week (CSI 300 is off 1%), Hong Kong stocks have rallied.  The Hang Seng gained 2% this week, half of which came earlier today.  The HK China Enterprise Index (mainland companies that trade in HK) rose 3% this week.  Third, dubbed teapot, the independent oil refiners in the Shandong province have cut their run-rates to 61.3% this week, the lowest since May.  This seems to reflect the poor state of the economy, hampered by the extreme weather and shortage of electricity.   The dollar rose 2.65% against the yen last week but has gone nowhere in recent day. It continues to chop in Tuesday's range (~JPY135.80-JPY137.70). The ranges have gotten steadily narrower. Today's range has been roughly JPY136.40 to JPY137.15.  Two images come to mind, a spring coiling (dollar bullish) or a sideways affair.  Momentum indicators are mixed.  The exchange rate still seems sensitive to US interest rate developments.  The Australian dollar reached a six-day high yesterday near $0.6990, and although it closed firmly, there has been no follow-through buying.  It has consolidated down to $0.6950.  A convincing move through $0.6940 may refocus attention on the downside.  The PBOC again set the dollar's reference rate lower than the market (Bloomberg survey) expected at CNY6.8468 vs. CNY6.8542.  The gap was half of yesterday's, which was the most since February 2020.  Nevertheless, the market still extended the greenback's gains.  Around CNY6.8620, the dollar is up about 0.2% today and 0.65% for the week.  If sustained, it will be highest weekly close since August 2020.    Europe The record of last month's ECB meeting, where it delivered its first rate hike with a half-point move did not tell us anything we did not already know.  First, the rise in inflation to near 9% was the catalyst for the rate hike. That there were some who wanted a quarter-point move is not surprising.  The preliminary estimate of this month’s CPI will be released on August 31.  The month-over-month pace is expected to rise by 0.3% after a 0.1% gain in July.  However, the base effect will translate this in a slightly slower year-over-year rate (8.8%). The core rate is expected to be steady at 4.0%, though the risk is on the upside. The market has fully priced in a 50 bp hike at the September 8 meeting, the swaps market is consistent with around a chance of 75 bp move, which seems a bit exaggerated.  While there is some debate in the US whether inflation has peaked, in the eurozone this may be a brief respite.   Like the FOMC minutes, the ECB's record of its meeting should not be understood as an objective report of the meeting, but another channel by which officials communicate to the market.  In its record, the ECB insists that the 50 bp rate hike should be seen accelerating removal of accommodation, what it calls front-loading, rather than raise the terminal rate.  While many press accounts repeated it, the market seems less sanguine.  Consider that on July 1, the swap market had the policy rate at 1.23% in mid-June 2023.  Now it is 1.77%.  ECB officials were cognizant that the economies were slowing, and a recession may be near.  However, in what seems to be an innocuous comment observed that governments may be better positioned to address it.  What is striking is that this goes against ordoliberalism, which Draghi and others said its part of the ECB's DNA.  Ordoliberalism reject Keynesian demand management through fiscal policy.   We had thought there was a quid pro quo at the July ECB meeting, which allowed for the larger rate hike in exchange for the new Transmission Protection Instrument.  However, if this was case, the hawks have the advantage.  There appear to be so many hurdles to its use that, like the Outright Market Transactions (announced with Draghi's "whatever it takes") it may never be used.  The ECB's record indicated that the Governing Council would take into account analysis by the EC, the European Stability Mechanism, the IMF, "and other institutions", alongside the ECB's own analysis, with no ranking provided.  Unlike the OMT, which was to be triggered at a country's request, the TPI is done at the ECB's discretion.   The euro slipped through yesterday's low by a couple hundredths of a cent in Asia but has come back bid in Europe, and pushed above $1.00, where options for 1.5 bln euros expire at the same time today that Fed Chair Powell is scheduled to begin presenting in Jackson Hole.  The single currency has not closed above parity this week and set a new 20-year low on Tuesday slightly ahead of $0.9900.  It seems like the recent price action is more about market positioning than new developments.   Sterling set a range on Tuesday between $1.1720, a new 2-year low, and $1.1880.  It has not traded out of that range in subsequent action.  Near $1.1825, sterling is virtually flat this week against the dollar and about 0.35% first against the euro. Press reports suggest that Truss, who looks set to become the new Prime Minister in a couple of weeks could trigger Article 16 that would allow the suspension of some parts of the Northern Ireland protocol as early as September 15, when the existing arrangements that allowed for easier checks expire.  Between this, Italy's election on September 25, and the ongoing energy and extreme weather challenges cast a pall over the outlook.  America Fed Chair Powell's long-awaited speech at Jackson Hole is a few hours away, and the market is pricing in about a 70% chance that the Fed hikes 75 bp next month.  Of course, there is important data due before the FOMC meeting concludes on September 21 including the jobs report next Friday and CPI on September 13.  Still, it is unlikely that either report changes that overall assessment that the labor market remains strong, even if job growth slows a bit from the unexpectedly sharp 528k jump in July nonfarm payrolls, and that price pressures are far too high, even if the pace eases a little.  Those who insist on reading Powell dovishly seem to be focusing on the line in the recent FOMC minutes, which noted that many members recognized the risk that the Fed could overdo it.  However, what these observers seem to under-appreciate is that the observation was in the context of a general assessment of the risks and the minutes recognized an even greater risk that inflation expectations get embedded.  Indeed, in recent weeks there have been numerous essays claiming that the era of low inflation is over, due to various structural factors, including the re-shoring and pullback from globalization, the integration of large populations in central Europe and Asia, and the costs of sustainable development.   We do not think Powell is as dovish as the many pundits argue, and despite this era for forward guidance, we think it best to focus on what the Fed does rather than what it says in this context.  Among the high-income countries, no central bank has been as aggressive as the Federal Reserve, even if some like the Bank of England began normalizing policy earlier.  In addition, starting in a few days, the pace that the Fed will shrink its balance sheet will double to $95 bln a month. If dovish and hawkish are to signify anything of importance, they cannot be understood in the abstract, but placed in a context.  By the Fed's own history, and in comparison, to other high income central banks, several of whom have higher inflation than the US, it has acted expeditiously this year and knows that it is not done.  Many of those who criticize the Fed for not being even more aggressive are also among those that have the most pessimistic economic outlooks.  It is an easy space to occupy if one is not held accountable. For whom do they speak? Even the hawks at the Bundesbank are not hawkish enough for many of these critics.   Play the player or play the game?  What Powell actually says may not means as much in the short run as to how the market responds.  Consider the FOMC minutes again.  When they were initially reported, the pundits said it was dovish and the December Fed funds futures made new session highs on August 17 and follow-through buying the next day.  We insisted that a dovish reading was a mistake, and although the subsequent economic data have mostly been weaker than expected, the December Fed fund futures have sold off and the implied yield rose to new highs for the month (~3.54%) yesterday. Similarly, since those "dovish minutes" were released, the implied yield of the October Fed funds futures contract (no FOMC meeting in October, so arguably a cleaner read than the September contract) has risen by 5.5 bp, reflecting perceptions of heightened Rather than focusing on Powell's exact words, we suspect it may be more fruitful to focus on the market's penchant for reacting as if the Fed were dovish.   Ahead of Powell, the US reports a bevy of data, which include the advanced estimate of US merchandise July trade figures, and inventory, and personal income and consumption data.  Given the importance attributed to Powell's speech, the data is likely to be more important for economists as they work on their Q3 GDP forecasts than market participants.  The PCE headline deflator, which the Fed official targets are expected to slip toward 6.4% from 6.8%. The core deflator is projected to tick lower to 4.7% from 4.8%.  The CPI, which comes out first, and is based on different methodology, has stolen the deflators thunder and was cited by Powell in explaining the larger-than-signaled hike in June.  Mexico also reports July trade figures today.  Mexico's trade balance is deteriorating sharply.  The Q2 monthly average deficit was $2.69 bln.  In Q2 21, it was in surplus by $927 mln.  This has been blunted a little by surging worker remittances, and the July report is next week.  Worker remittances averaged $5.01 bln in a month in Q2 22 (vs. $4.3 bln in Q2 21). The US dollar set a five-day low yesterday, slightly below CAD1.2900.  It was probing the CAD1.3060 area in the first two sessions this week.  It is near CAD1.2935 in the Europe, and it needs to resurface above CAD1.2960-80 to open the upside again.  If the yen takes is cues from US yields, the Canadian dollar takes its from the general risk appetite reflected in the US S&P 500. Initial support is seen now near CAD1.2920.  The US dollar slipped to seven-day lows against the Mexican peso yesterday (~MXN19.85) and recovered through the North American session to MXN19.98.  It is trading sideways today above MXN19.92.  The intraday momentum readings seem to favor the dollar's upside today provided that the MXN19.90 area holds.      Disclaimer   Source: Jackson Hole and More
Potentially Longer Lasting Inflation In The Europe May Cause British Pound (GBP) And Euro (EUR) Being Beaten By US Dollar (USD)

Potentially Longer Lasting Inflation In The Europe May Cause British Pound (GBP) And Euro (EUR) Being Beaten By US Dollar (USD)

Jing Ren Jing Ren 26.08.2022 09:43
As we all know, both the US and Europe (to include the UK along with the EU) are experiencing high inflation. However, how this impacts employees is very different. Employees constitute the bulk of consumers, and therefore drive the economy. The employment culture between these major economies has important implications of how the economy could react to inflation. That, combined with different monetary policy, could be a driving force of currency fluctuations. Last month, EU CPI rose above the US'. The UK's CPI pushed above the US' the month prior. With the Fed acting more aggressively to combat inflation than European central banks, this gap could widen. That could increase the difference in how labor practice and laws affect the economy and currencies. The main differences Generally, the US has "at will" employment, which is often understood that employees can be fired for any reason. But it also means that employees can be hired for any salary, and salary changes are much more flexible. In Europe, employees typically are hired for fixed contracts, often in the framework of collective negotiation. In the US it's rare to have inflation adjustment included in the contract, whereas in Europe (particularly in the periphery) it is almost standard practice. When the cost of living starts rising at an unprecedented rate, the reaction of the labor market is quite different. In the US, employees are more prone to change jobs, looking for better salaries. This has led the BLS to report the highest "churn" rate on record, with as many as 4.6M people changing jobs in a month. Despite this, however, average wages have been declining when adjusted for inflation. Employees who can change jobs are keeping up with inflation, those who cannot are seeing their income erode. Slow and deliberate vs fast and erratic With employees locked into collective contracts, discontent over lower wages translates instead towards industrial action. In recent months, there has been a spate of warnings or outright strikes. Most recently Lufthansa's pilots were unable to reach an agreement, and might go on strike at any time. SAS had to reschedule over 300K passengers because of strikes. One of the key sticking points of these discussions is the inclusion of automatic cost of living adjustments to wages. One of the phenomena most feared by central bankers is a price-wage spiral. That's when higher prices drive workers to demand higher pay, which increases costs to produce goods, causing higher prices, and workers demanding higher pay. An automatic inflation adjustment in labor contracts makes this price-wage spiral easier to develop, and increases the potential for runaway inflation. What does it mean for the future? The theoretical way to head off a wage-price spiral is to aggressively front load interest rates, to prevent inflation rising. However, European central banks have, relatively speaking, not done that. The Fed has acted a lot more aggressively. On the one hand, because of fixed contracts and collective bargaining, wages were likely to rise slower in Europe. On the other, those rises are likely to come along with strikes and be much broader than in the US, which increases inflationary pressure in the long term. Basically, inflation might be further entrenched in Europe than in the US, implying that in the long run, the dollar could outperform the pound and Euro.
Gold Indicated A Decrease In Prices, Does Gold Should Be Buy Or Sell Today?

Forex: Gold Prices Will Still Rise Before The Speech

InstaForex Analysis InstaForex Analysis 26.08.2022 13:14
Relevance up to 11:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. According to one market strategist, gold prices will still rise even if Federal Reserve Chairman Jerome Powell is hawkish in his highly anticipated speech on Friday at the annual central bank symposium in Jackson Hole. Invesco Chief Global Market Strategist Kristina Hooper said there is no reason why investors should not expect Powell to signal that the central bank will maintain its aggressive monetary stance. However, Hooper reiterated that it was just talk. The hawkish stance in August does not prevent the central bank from changing interest rates at the next meeting on the decision on monetary policy on September 21. There is considerable uncertainty about the next move by the US central bank. Markets assume a 50/50 chance that the Federal Reserve will raise the federal funds rate by either 50 or 75 basis points. According to Hooper, the central bank will raise interest rates by 50 basis points, which will mean a turn in its monetary policy. The CME FedWatch tool showed that year-end interest rate forecasts will range from 3.75% to 4.00%. However, Hooper believes that by the end of the year, interest rates will rise to just 3% or even lower. One of the important long-term problems is the growing public debt and deficit. On Wednesday, President Joe Biden announced a program to write off student loans. The government will forgive up to $10,000 in federal student loans for borrowers with incomes of less than $125,000. At the same time, the government will waive up to $20,000 for Pell Grants recipients. The National Taxpayers Union estimates that the loan write-off program could cost the government more than $329 billion over ten years. With the central bank expected to start a slow reversal in September, analysts say the current price of gold could be an attractive entry point for investors. Even though interest rates will continue to rise, at least for now, investors still have other reasons to hold some precious metals. And while gold price performance has been disappointing for most of the year, investors should ignore short-term price action and focus on long-term potential. The most compelling reason to hold gold is diversification. Source: Forex Analysis & Reviews: What will gold prices be like under hawkish Powell?  
Bullish Dollar Sentiment Prevails Amid CFTC Report and Rate Hike Expectations

Shocking Forecast! Bank Of England (BoE) Is Expected To Hike The Rate By Over 2%!

ING Economics ING Economics 26.08.2022 13:16
UK households may collectively need up to £65bn extra in government support to offset the forthcoming rise in energy bills this winter. That would reduce the risk of a deep recession but would lead to extra Bank of England rate hikes. Markets are right to be thinking about more tightening  even if investor expectations are wildly overestimating its scale Demands for more government help with energy bills are rising UK markets now expect Bank Rate to exceed 4% next year Even by the standards of 2022, it’s been a crazy week in sterling interest rate markets. Swap rates now suggest that the Bank of England will need to hike rates as high as 4.2% (from 1.75% currently). Not only that, it implies the Bank will need to take rates even higher than the US Federal Reserve; it's the first time investors have taken that view since early this year. This trend has undoubtedly been exaggerated by very poor liquidity which means it's hard to gauge exactly how realistic investors think a 4%+ Bank Rate really is. Nevertheless, we think some of this recent reappraisal can be traced back to the eyewatering surge in gas prices and increased focus on how the government may be forced to react. The chain of logic goes something like this: higher energy costs increase the chances of a big support package from the government. And given it will hit households hard right across the income spectrum, blanket support measures (in addition to targeted payments to those on low incomes) may well be required. That, coupled with possible tax cuts depending on which candidate becomes Prime Minister in September, would materially reduce the risk of a deep economic downturn. But the Bank of England would also view it as inflationary, and may well be forced to increase interest rates even further in the autumn. Markets expect the Bank of England to hike beyond 4% next year Source: Refinitiv, ING, Macrobond   We tend to agree with this assessment – even if the scale of the rate hikes required will probably fall well short of what markets expect. We think a 50bp hike in September, coupled with another 25-50bp in November looks more likely at this stage. Let's break it down in more detail: So far, the government has announced £37bn worth of support, through a combination of direct payments to low-income households, coupled with a £400 discount for all households on their energy bills from October. When that support was announced in late May, energy bills were expected to peak at a little under £3000 in the autumn. Using that figure, a quick back-of-the-envelope calculation suggests that households would have paid roughly £65bn in aggregate on their energy bills in the period between October 2022-October 2023. For context that compares to roughly £30bn in the fiscal year 2020-21, which came before energy prices began increasing. In other words, the support measures announced to date looked, at the time anyway, like they would go some way to offsetting the energy bill increases coming down the track. Gas prices have reached dizzying levels Source: Macrobond, ING Consumers may need up to £65bn extra in government support Fast forward a couple of months, and the picture looks much more extreme. The energy regulator Ofgem has announced the average household bill will surpass £3,500 from October, and further sharp rises look inevitable. Indeed, our own estimates based on gas and electricity futures contracts this week point to an average annual household energy bill of around £5,300 across that same 12-month period from October (peaking at roughly £6,500 on an annualised basis in the three-month period between April-June 2023). That takes our aggregate household cost estimate up to around £130bn – a £65bn increase on May's projection - and this estimate is rising on an almost daily basis. Admittedly that figure is a bit of a simplification – it relies on a number of assumptions, not least that those wholesale futures contracts provide an accurate gauge of where prices will land this winter. Many of those contracts are trading fairly illiquid right now. But it gives a sense of what the new Prime Minister will be faced with when they take office in early September. Roughly speaking, the average household would see need almost £2,700 extra, were the government to match the level of support offered in June. One option would be to increase the value of payments being given to those on income support/benefits, and that seems quite likely. But in practice, a much broader response will also be needed. We’ve run a rough calculation in the chart below, and what’s striking is that across large parts of the income distribution, households may have to devote more than 10% of their disposable incomes to energy bills on average (between Oct 2022 and 2023), even accounting for existing support available. Some of these households will be able to tap savings accrued during the pandemic. That 'excess savings' level still stands at roughly 8% of GDP.  But it's hard for the government to target support on this basis, and it may find that the most practical option would be to dramatically increase the £400 energy bill discount being offered to all households. Households in most income deciles will be spending more than 10% of disposable incomes on energy Government support based on estimates produced by the UK Treasury as part of the 26 May Cost of Living package. For simplicity, we've used 2020/21 equivalised disposable income data, which in practice will have increased. Assumes energy prices increase by same percentage for all income deciles. Disposable income = after income tax/national insurance etc (but before accounting for housing and other costs) Source: ING analysis of ONS Living Costs and Food Survey, Effects of Tax and Benefits, Ofgem, UK Treasury Extra government stimulus would likely prompt additional rate hikes Whatever happens, the Bank of England will be looking at all of this through the lens of inflation. Broad-based government support would considerably reduce the chances of a recession - or at least of a deep downturn - especially given it may also be coupled with a cut to national insurance (a form of income tax) if Foreign Secretary Liz Truss becomes Prime Minister in September. The assessment also depends on what support is offered to businesses, something we've not discussed here. But broadly speaking, we agree with markets that the Bank of England would view reduced recession odds as raising medium-term inflation forecasts, and thus would likely feel obliged to hike rates further. To be clear, all of this is guesswork at this stage. Neither candidate, Rishi Sunak nor Liz Truss, have said in detail yet what level of support they’d implement this autumn. It’s not clear whether we'll get an emergency budget before the Bank of England's meeting on 15 September, but assuming we don't, we expect the Bank to opt for another 50bp then. We’ve recently argued that the Bank is reaching the latter stages of its tightening cycle. The BoE’s own August forecasts suggest inflation will be below target in a couple of years' time, regardless of whether it increases interest rates further. Inflationary pressures associated with 'core' goods are easing, given lower commodity costs, higher inventory levels and reduced consumer demand - even if wage growth will keep pressure on services inflation. But the arrival of fresh government support would provide the BoE with further impetus to hike rates aggressively in the near term, and probably into late autumn. We expect the Bank Rate to peak at roughly 2.5-2.75% in November, albeit far less than current market pricing is suggesting. Gilts are skidding off-road The jump in energy futures, as well as the surprise UK inflation report, are still being digested by the gilt market. These have brought about a rise in BoE hike expectations, an aggressive flattening of the gilt curve, and a sharp underperformance of gilts relative to US and European peers. In light of greater hike expectations, curve inversion is no surprise, and indeed the US curve has been there recently too. Worse inflation dynamics, as well as more immediate recession fears, should lead to a further flattening of the gilt curve compared to its US counterpart. With US inflation expectations looking more under control than in Europe, the spread between US and UK rates seems more directional to short-term European energy developments. The spread to EUR rates on the other hand is harder to explain. The UK is by no means the only country contemplating shielding its consumers from higher energy bills. Indeed, the measures floated so far in the UK pale in comparison to some continental alternatives. Similarly, energy inflation is a problem faced by all European countries. In short, the spread that has opened between GBP and EUR short rates has to narrow, and we think it will most likely be with lower GBP rates. The underperformance of 2Y gilts relative to Germany is overdone Source: Refinitiv, ING   The magnitude of these moves raises financial stability questions. We’ll refrain from drawing broader conclusions about the effect on the valuation of other assets beyond bonds but will simply stress that manageable rates volatility tends to be a pre-condition in many investment decisions. Closer to home, the latest moves will dash hopes of a return to more functional gilt markets. Gilt liquidity conditions continue to deteriorate Source: Refinitiv, ING   Bid-ask spreads have been propelled to new wides, and implied volatility continues to climb. These developments cast a long shadow on the Bank of England's plan to sell gilts out of its Asset Purchase Facility portfolio, even in small sizes. We don't argue that the plan should be shelved but a clearer circuit-breaker, which helps avoid adding to market stress, would make sense in our view. One could of course argue that the current episode is a one-off and that the BoE plans the sale of only £10bn per quarter in the first year. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

Forex: USD/JPY Has Risen By Almost 3% In August | US Dollar (USD) To Japanese Yen (JPY)

Kenny Fisher Kenny Fisher 26.08.2022 14:25
The Japanese yen is in negative territory today. USD/JPY is trading at 136.90 in the European session, up 0.34%. It has been a relatively quiet week for the yen, which is trading exactly where it started the week, around the 137 line. The month of August has not been kind to the yen, with USD/JPY soaring 2.75%. The US dollar is again in favor as the markets have tapered down their excitement that the Fed plans a dovish pivot. Does the Fed plan to let up or remain aggressive in its fight against inflation? We will certainly be smarter after Jerome Powell’s speech at Jackson Hole later today. A hawkish message from Powell should boost the US dollar unless investors zero in on any dovish remarks or projections, which could reignite speculation that the Fed will ease up on rate hikes. Tokyo Core CPI rises The Tokyo Core CPI index rose 2.6% in August, above the forecast of 2.5% and higher than the 2.3% gain in July. This marked the highest gain since October 2014. Policy makers in other major economies can only dream about inflation below 3%, but for Japan, rising inflation is a new phenomenon after decades of deflation. Inflation has exceeded the Bank of Japan’s target of 2% for four successive months and inflation is finally on the Bank’s agenda. Still, it is very unlikely that the BoJ will do anything more than tweak monetary policy, as its number one goal is to stimulate Japan’s fragile economy. The rise in inflation and the BoJ’s rigorous control of its yield curve has caused a steep deprecation of the yen, and an exchange rate of 140 may not be far off. There has been speculation in recent months that the Ministry of Finance could intervene to support the yen, but this has not happened until now and there is no indication that the 140 level is a magical ‘line in the sand’ that would trigger intervention.  For now, the main driver of USD/JPY remains the US/Japan rate differential, leaving the yen at the mercy of the movement of US Treasury yields. USD/JPY Technical USD/JPY is testing resistance at 137.03. Above, there is resistance at 137.03 1.3615 and 1.3504 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY hits 137, Powell speech eyed - MarketPulseMarketPulse
Global Markets Shaken as Yields Soar: Dollar Surges, Stocks Slump, and Gold Holds Ground Amid Debt Concerns and Rate Hike Expectations

Markets Are Digesting Hawkish Signal Which Is Able To Boost US Dollar (USD)

Craig Erlam Craig Erlam 26.08.2022 14:39
Oil steadies around $100 Oil prices are a little higher, with Brent hovering around $100 a barrel and WTI above $93. It’s been well supported this week by comments from Saudi Arabia Energy Minister Abdulaziz bin Salman, who claimed there’s a disconnect between market pricing and fundamentals, suggesting OPEC+ could cut output in the future. Suddenly the prospect of a nuclear deal between the US and Iran, or a global growth slowdown, isn’t quite the bearish development for oil that many hoped. Although in reality, the group was never going to sit back and watch the price tumble as the world was flooded with extra oil or demand growth stalled. Gold still holds hope of $1,800 Gold is pulling back again ahead of Jerome Powell’s speech later on. A hawkish message that actually gets through to the markets could be a blow to the yellow metal as it may lift the dollar and US yields which have typically not been positive for it. That said, investors have been far more open to any remotely dovish message so this could be far more impactful and potentially bullish for gold, which will still have an eye on $1,800. A move lower could see support tested around $1,730. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Oil stable at $100, gold eyes Powell speech - MarketPulseMarketPulse
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

EUR/USD Can't Catch Its Breath! The US Labour Market Data And Eurozone Inflation Prints To Be Released Next Week

ING Economics ING Economics 26.08.2022 15:00
US jobs numbers will help determine whether the Fed hikes by 50bp or 75bp in September – for now, we favour the former. Eurozone inflation data will also be closely scrutinised ahead of a fast-approaching ECB meeting In this article US payrolls number to help determine scale of September Fed hike Eurozone data to provide key input into September ECB decision Source: Shutterstock US payrolls number to help determine scale of September Fed hike The August jobs report is the focus of attention this week. Despite the US having been in technical recession through the first half of the year, the economy has created 3.2 million jobs year-to-date with 528k of them coming in July alone. We don’t expect anything like that for August though given vacancies have started to fall off and business surveys have suggested more caution on the economic outlook. Nonetheless, a 250k would still be very respectable and will certainly keep the Fed in hiking mode. With the unemployment rate set to remain at 3.5% and wages continuing to push higher we favour a 50bp hike on 21 September rather than 75bp. However, should the economy add substantially more jobs, say 350k+, and the wage number posts a second consecutive 0.5% month-on-month increase, or higher, then it could swing the argument in favour of 75bp. Other numbers will include the ISM manufacturing report and construction spending, while August auto sales numbers will give us an early indication of consumer spending. Also, watch out for a number of Federal Reserve speakers. Eurozone data to provide key input into September ECB decision It's a big week for eurozone data with the August inflation reading out on Wednesday and unemployment due on Thursday. With the September ECB meeting coming up, the debate between hawks and doves has become more heated again as governing council members are returning from their holidays. These figures will be key inputs for the meeting. While some supply-side factors are currently bringing relief as input costs fade, the gas crisis continues to push prices for consumers up at a fast pace. Expect another increase in the eurozone inflation reading for August. The unemployment rate will give a sense of whether the labour market is responding to the weaker economic circumstances. Key events in developed markets next week Source: Refinitiv, ING TagsUS Jobs report Inflation Eurozone
Turbulent Times for Currencies: USD Dominates, SEK Shines

Forex Pairs With Asian Currencies May Rock! GDP (Gross Domestic Product) Of India, Korean And Indonesian Inflation Are Released Next Week

ING Economics ING Economics 26.08.2022 15:11
Regional PMI reports and India's second-quarter GDP are the highlights for the coming week In this article Regional PMI readings Australia’s building approvals India’s 2Q GDP report Inflation readings from Indonesia and Korea Other key reports out next week: Japan’s labour market data and Korea’s trade figures Source: Shutterstock Regional PMI readings Next week features PMI manufacturing data for the region with China’s report on 31 August to set the tone. We expect the recent drought to have reduced power supply, a key component of PMI. Thus we expect another month of PMI staying under 50. Real estate construction should still be slow and pose a drag on non-manufacturing PMI. The good news is that inbound travel gained some momentum, which should offset the drag by the construction sector. Increased activity due to inbound travel for the services sector should be enough to keep non-manufacturing PMI in expansion and above 50. Meanwhile, in Korea, we expect the July industrial production to improve due to better vehicle manufacturing geared for exports. Gains may be capped however due to some slowdown caused by softer semiconductor demand. Positive developments in industrial production and local business surveys suggest a mild recovery for the manufacturing outlook and PMI is expected to retrace back above the 50 level. Australia’s building approvals Australian building approvals and construction work done could show how the economy is standing up to the Reserve Bank of Australia’s (RBA) recent rate tightening endeavours, ahead of data on home loan advancement. We also get second-quarter private capital expenditure, which will set the scene for the 2Q22 GDP release on 7 September, just after the next RBA rate meeting on 9 September. India’s 2Q GDP report India also releases 2Q22 GDP which should probably show the economy on track to achieve a full-year growth rate of a little above 7%. Deficit figures for July are also due. Data released so far this fiscal year show that India is on track to meet the government’s 6.4% deficit target, though recent commodity price spikes may have taken their toll as the government has absorbed some of the inflation surge to limit pass through to consumers and businesses. Inflation readings from Indonesia and Korea Korea’s headline CPI inflation is expected to moderate in August mostly due to base effects. Gasoline prices continued to decline during the month although fresh food prices surged due to the recent floods. In Indonesia, headline and core inflation are both expected to head north. Expensive food and utilities are both likely to push headline inflation to 5.3% year-on-year while core inflation could jump to 3.2%. The planned increase in subsidised fuel will likely keep prices elevated in the coming months which could prompt Bank Indonesia to follow up with additional rate hikes at the September and October meetings.  Other key reports out next week: Japan’s labour market data and Korea’s trade figures The week also features trade data out from Korea. The August trade deficit should widen as preliminary data reports suggest weak semiconductor exports and low numbers for outbound shipments to China. Meanwhile, Japan releases data on the labour market and the unemployment rate is expected to be unchanged at 2.6%. High-frequency mobility data improved despite the resurgence of Covid-19 cases which should encourage service sector hiring. Lastly, Japan's July industrial production is expected to increase modestly thanks to the improving global supply chain situation for the automotive industry.   Key events in Asia next week Source: Refinitiv, ING TagsEmerging Markets Asia week ahead Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The US Dollar To The Chinese Yuan Is Upside. The Potential Buying Opportunities

Forex: USD/CNY - The Road Is On Further Growth. What's Next?

InstaForex Analysis InstaForex Analysis 26.08.2022 15:43
Relevance up to 14:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical analysis: USD/CNY has been trading upside as I expected. There is the breakout of the symmetrical triangle pattern in the background, which is good sign for further rally. Trading recommendation: Due to the breakout of the symmetrical triangle pattern and strong upside trend, I see further growth. Watch for potential buying opportunities on the intraday dips with the upside objectives at 6.909 and 1.079. MACD oscillator is showing strength and no bigger divergences. Key short-term support is set at the price of 6.835 Source: Forex Analysis & Reviews: USD/CNY analysis for August 26, 2022 - Upside breeakout of the triangle pattern
S&P 500 Shorts Gain Ahead Of jackson Hole Events, USD/JPY - Yen Affected By CPI And EUR/GBP In Eyes Of A Possible 75bp Rate Hike

S&P 500 Shorts Gain Ahead Of jackson Hole Events, USD/JPY - Yen Affected By CPI And EUR/GBP In Eyes Of A Possible 75bp Rate Hike

Jing Ren Jing Ren 26.08.2022 08:22
USDJPY seeks support The Japanese yen finds support as August’s CPI hits an eight-year high. The trajectory remains up from the daily chart’s perspective and the latest pullback could be an opportunity to accumulate. A rally back above 137.40 at the start of the liquidation in late July is an encouraging sign that buyers are still in the game. However, the price action may stay choppy after a bearish RSI divergence and a fall below 136.70 triggered some profit-taking. 135.70 is the closest support and a bounce above 137.50 may send the dollar to 139.40. EURGBP consolidates The pound steadies over a higher chance of a 75bp rate rise by the BOE next month. The pair came under pressure in the supply area around 0.8510 and a follow-up break below 0.8430 put the bulls on the defensive. The euro is hovering above the daily support at 0.8390 which is a key level to keep last week’s rebound intact. 0.8460 is the first hurdle ahead and a close above 0.8510 may trigger an extended rally towards 0.8600. Failing that, the pair could be vulnerable to a sell-off to this month’s low at 0.8340. SPX 500 attempts to bounce The S&P 500 bounces as the shorts take profit ahead of Powell’s speech. The recent sell-off has stopped short at 4110, which is a daily support at the base of a bullish breakout. The level also coincides with the 30-day moving average, making it a congestion area. A bullish RSI divergence attracted bargain hunters with an initial pop above 4160. The bulls will need to lift the support-turned-resistance at 4210 before the recovery could gain momentum. A bearish breakout could trigger a fall to the psychological level of 4000.
Speech At Jackson Hole Triggered Masacric Slide In Equities! US Treasury Yields Reaction

Forex: Gold Price Is Sliding Down. What Will Be Next?

InstaForex Analysis InstaForex Analysis 26.08.2022 15:54
Relevance up to 14:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical analysis: Gold has been trading downside as I expected. There is the breakout of the rising channel in the background and potential for further drop. Trading recommendation: Due to the breakout of the rising channel in the background and the downside trend, I see further drop. Watch for potential selling opportunities on the intraday rallies with the downside objective at the price of $1.730. Stochastic is showing oversold condition but no evidence for the reversal, which is good sign for further downside movement. Key short-term resistance is set at the price of $1.764   Source: Forex Analysis & Reviews: Analysis of Gold for August 26,.2022 - Breakout of the rising channel and strong downside momentum
Forex: Could British Pound To US Dollar (GBP/USD) Price Line Near 1.266

Forex: Could British Pound To US Dollar (GBP/USD) Price Line Near 1.266

Jing Ren Jing Ren 26.08.2022 08:37
The structure of the GBPUSD currency suggests the formation of a global corrective trend – a triple zigzag w-x-y-x-z. On the 1H timeframe, we see the final actionary wave z of the cycle degree. The wave z most likely takes the form of a primary triple zigzag â“Œ-Ⓧ-â“Ž-Ⓧ-Ⓩ. Perhaps, at the beginning of August, the bullish price movement within the primary intervening wave Ⓧ ended, it took the form of an intermediate zigzag (A)-(B)-(C). It is likely that in the near future the bearish trend will continue to develop in the primary wave Ⓩ, which may complete its intermediate triple zigzag pattern (W)-(X)-(Y)-(X)-(Z) near 1.129. At that level, wave Ⓩ will be at the 50% Fibonacci extension of previous actionary wave â“Ž. According to an alternative scenario, the cycle wave z could be fully completed. As in the main version, it has the form of a primary triple zigzag. Thus, to confirm this scenario, bulls should be strong enough to start moving the price within the new trend. Perhaps in the next coming trading weeks, market participants could expect the construction of the first impulse wave, a potential zigzag, of the primary degree. The price may rise to the previous high of 1.266, and then even higher.
US Dollar (USD) Supported By Looming Hiking, Australian Dollar (AUD) Weakens, How Does Brent Crude Oil React To A Possible Cut By OPEC+?

US Dollar (USD) Supported By Looming Hiking, Australian Dollar (AUD) Weakens, How Does Brent Crude Oil React To A Possible Cut By OPEC+?

Jing Ren Jing Ren 26.08.2022 16:15
US Fed may not yield to market pressure EURUSD weakens over bleak outlook The US dollar remains strong over the prospect of sustained rate hikes. The euro’s failure to defend the parity level has revealed a lack of confidence in Europe’s outlook. An overwhelmingly pessimistic mood may continue to depress the single currency, and the latest consolidation could be a mere pause as dollar bulls search for catalysts to push back. On the other side of the pond, hopes that an economic slowdown might alter the Fed's tightening agenda have waned. Futures markets indicate that traders have raised their bets on a 75bp hike in September, which may send the pair to a 20-year low at 0.9700 with 1.0340 as resistance. AUDUSD struggles over Chinese uncertainty The Australian dollar retreats as markets go risk-off. Risk appetite took a backseat following hawkish comments from US Fed officials. Meanwhile, as a proxy to the Chinese economy, the commodity-linked currency is facing extra headwinds. Beijing is seeking to stabilise its ailing property market and its central bank has cut rates to shore up the economy in the wake of disappointing data. Australia’s retail data may stir up volatility in the short-term, but general market sentiment might continue to drive the exchange rate instead of domestic fundamentals. The pair hit resistance at 0.7130 and 0.6850 is a key support. UKOIL recovers over controlled supply Brent crude recoups losses as OPEC+ may cut output to defend prices. As Iran seeks a compromise in its nuclear deal, an agreement seems remote but not unattainable. A return of Iranian oil to the market could undercut major suppliers and Saudi Arabia suggested that OPEC+ would consider cutting production in response. A larger-than-expected drawdown in US inventories offers extra tailwinds to the recovery. As for now, the prospect of tightly-controlled supply may outweigh concerns that an economic slowdown in China could hinder demand. The price has found support at 92.00 and is looking to reclaim 108.00. NAS 100 softens as Fed remains firm The Nasdaq 100 consolidates as the Fed remains hawkish. Weaker economic data are a double-edged sword. Equity markets see them as good news as they could lead the Fed to lift their feet off the pedal. Still, no one wants to see a recession materialise. Markets have become too comfortable with signs of plateauing in price pressures over the past month. The latest FOMC minutes may have wrong-footed investors with hints of a slower pace in rate hikes. Fed officials might want to address that communication hiccups and rein in expectations of a downshift in policy. The index is hovering above 12600 and 14200 is the first hurdle. Key data release (GMT time) Monday, 29 August 01:30 Retail Sales   Wednesday, 31 August 09:00 HICP 12:00 Harmonized Index of Consumer Prices 12:15 ADP Employment Change 12:30 Gross Domestic Product Annualized     Thursday, 1 September 01:30 Trade Balance 06:00 Retail Sales 14:00 ISM Manufacturing PMI Friday, 2 September 07:00 Gross Domestic Product 12:30 Nonfarm Payrolls  
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

Forex: EUR/USD - Waiting For Good News. Maximum Is Reached

InstaForex Analysis InstaForex Analysis 26.08.2022 16:43
Relevance up to 16:00 2022-08-27 UTC+2Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Overview : The US dollar's strong gains against the Euro have continued today ahead of the sturdy news. The common currency reached a high of more than three days earlier this morning. This technical analysis of EUR/USD looks at the one-hour chart. The highest price that EUR/USD reached for that period was 1.0080 (last bullish wave - top). The lowest price that the EUR/USD pair reached during that period was 1.0080 (right now). The bias remains bearish in the nearest term testing 1.0011 or lower. Immediate support is seen around 1.0011. A clear break below that area could lead price to the neutral zone in the nearest term. Price will test 1.0011, because in general, we remain bearish on August 26h, 2022. Yesterday, the market moved from its top at 1.0080 and continued to drop towards the top of 1.0011. Today, on the one-hour chart, the current fall will remain within a framework of correction. However, if the pair fails to pass through the level of 1.0080 (major resistance), the market will indicate a bearish opportunity below the strong resistance level of 1.0080 (the level of 1.0080 coincides with tha ratio of 38.2% Fibonacci retracement). The EUR/USD pair settled below 1.0080 and is testing the support level at 1.0011. RSI and Moving averages continue to give a very strong sell signal with all of the 50 and 100 EMAs successively above slower lines and below the price. The 50 EMA has extended further below the 100 this week. Support from MAs comes initially from the value zone between the 50 and 100 EMAs. Industriously, Euro Is Losing ground against U.S. Dollar around +125 pips. Since there is nothing new in this market, it is not bullish yet. Sell deals are recommended below the level of 1.0080 with the first target at 1.0011 and continue towards 0.9901 so as to test the double bottom. If the trend breaks the double bottom level of 0.9901, the pair is likely to move downwards continuing the development of a bearish trend to the level of 0.9850 in order to test the weekly support 3. According to the previous events the price is expected to remain between 1.0080 and 0.9850 levels. Sell-deals are recommended below the price of 1.0080 with the first target seen at 1.0011. The movement is likely to resume to the point 0.9901. The descending movement is likely to begin from the level 0.9901 with 0.9850 and 0.9800 seen as new targets in coing hours. On the other hand, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1.0135. Source: Forex Analysis & Reviews: Technical analysis of EUR/USD for August 26, 2022
Forex: GBP/USD. The Support Has Been Rejected 3 Times. Uptrend!

Forex: GBP/USD. The Support Has Been Rejected 3 Times. Uptrend!

InstaForex Analysis InstaForex Analysis 26.08.2022 17:20
Relevance up to 16:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Overview: The resistance of GBP/USD pair has broken; it turned to support around the price of 1.1817 last week. Thereby, forming a strong support at 1.1817. The direction of the GBP/USD pair into the close this week is likely to be determined by trader reaction to 1.1817 and 1.1979. The GBP/USD pair climbed above the level of 1.1817 before it started a downside correction. The GBP/USD pair set above strong support at the level of 1.1817, which coincides with the 23.6% Fibonacci retracement level. This support has been rejected for three times confirming uptrend veracity. Hence, major support is seen at the level of 1.1817 because the trend is still showing strength above it. The level of 1.1817 coincides with the golden ratio (23.6% of Fibonacci retracement) which is acting as major support today. Another thought; the Relative Strength Index (RSI) is considered overbought because it is above 70. At the same time, the RSI is still signaling an upward trend, as the trend is still showing strong above the moving average (100), this suggests the pair will probably go up in coming hours. Accordingly, the market will probably show the signs of a bullish trend. This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend Read more: https://www.instaforex.eu/forex_analysis/277667 In other words, buy orders are recommended above 1.1817 level with their first target at the level of 1.1879. From this point, the pair is likely to begin an ascending movement to the point of 1.1929 and further to the level of 1.1979. The price of 1.1979 will act as a strong resistance and the double top has already set at the point of 1.2600. On the other hand, if a break happens at the support of 1.1716, then this scenario may become invalidated. Source: Forex Analysis & Reviews: Technical analysis of GBP/USD for August 26, 2022  
Construction Activity in Poland Contracts in May: Focus on Building Decline and Infrastructure Investment

EUR/USD. Jerome Powell VS PCE index: 1:0 in favor of the dollar

InstaForex Analysis InstaForex Analysis 28.08.2022 21:57
The euro-dollar pair ended the trading week on a minor note, below the parity level. EUR/USD bulls tried to remind themselves, tried to counterattack, but the prevailing fundamental background did not allow them to win back at least part of the lost positions. The only achievement of the bulls of the pair is that they did not allow the bears to enter the area of the 98th figure. The support level of 0.9900, which is currently the key price barrier (replacing the "sacred" level of 1.0000) restrained the onslaught of the bears. And apparently, further events will develop around this target. The EUR/USD pair showed increased volatility at the end of the trading week. The benchmark PCE index was published on Friday, and an hour and a half later, the long-awaited speech by Federal Reserve Chairman Jerome Powell took place in Jackson Hole. These events provoked almost 150-point price fluctuations for the pair.     The inflation report was not in favor of the greenback: all components of the release came out in the red zone, reflecting the slowdown in indicators. Thus, the basic price index of personal consumption expenditures in monthly terms increased by only 0.1% in July, with a forecast of 0.2% growth. On an annualized basis, it rose by 4.6% last month after a June increase to 4.8%. The overall PCE index was also disappointing, taking into account energy and food prices – it grew by 6.3% year-on-year, thereby slowing the growth rate (in June it was marked at 6.8%). Thus, one of the key inflation indicators taken into account by the Fed when forming an interest rate decision turned out to be in the red zone, supplementing reports on CPI growth, producer price index and import price index (which also reflected a slowdown in growth in July). The EUR/USD pair jumped to 1.0089 after the release of the report, thereby updating the weekly high. And, perhaps, bulls would have tried to develop success if Powell had not come to the bears' aid. He dispelled the doubts of dollar bulls by voicing unambiguously hawkish rhetoric. In his speech, the head of the Fed tried to maintain a certain balance in order not to provoke excessive turbulence in the markets. Let's face it: this time it didn't work out. The days of "semitones" are in the past, so Powell had to resort to fairly categorical and unambiguous comments, with a minimum number of "buts" and "if". The main, key and main message voiced by the head of the Fed is that the US central bank will continue to raise interest rates and will keep them at a high level, even if it harms (and it will undoubtedly harm) households and businesses. Powell actually said that Americans will have to put up with the slowdown in economic growth and the weakening of the labor market. "This is a sad price for reducing inflation," Powell stated. In addition, he commented on the July data on the growth of inflation in the United States. As mentioned above, the key indicators showed a slowdown in their growth. But Powell did not attach much importance to this. According to him, although inflation slowed down last month, "it is still very far from the target level."     In other words, Powell has joined the hawkish wing of the Committee, whose representatives support the aggressive pace of monetary policy tightening. In particular, the chairman of the St. Louis Fed, who has the right to vote this year, announced last week that he would support the idea of a 75-point rate hike at the September meeting. The rest of his colleagues who have spoken over the past two weeks have also indicated their hawkish position. However, unlike Bullard, they have not yet decided on a "step". For example, according to Loretta Mester, market expectations regarding the results of the September meeting are between 50 and 75 points – for a final decision, "we need to see more data." Powell voiced a similar position. According to him, the magnitude of the rate increase at the September meeting "will depend on the totality of statistical data and changing forecasts." Thus, Powell supported the dollar following the results of his latest speech. He made it clear that the central bank would not look back at the "side effects" and would increase the interest rate with the knowledge that this could harm households and businesses. After his speech, the scenario of a 75-point rate hike at the September meeting returned to the agenda. According to the CME Group FedWatch Tool, the markets now estimate the probability of this scenario being implemented at 60%. Therefore, it is not at all surprising that US stock indexes fell on Friday, and the dollar again became the favorite of the foreign exchange market. Before the next Fed meeting, the results of which will be announced on September 21, the August Nonfarm, as well as key data on the growth of inflation in the United States for August, will still be published. The dynamics of these indicators will tip the scales towards a 50-point or 75-point scenario. However, the very fact that these two options are among the most likely ones will push the greenback up throughout the market. Given this circumstance, it is advisable to use any more or less large-scale corrective movements in the EUR/USD pair to open short positions. The downward targets are 1.0000 (if the corrective impulse flares up and fades around 1.0050), 0.9950, 0.9910 (the lower line of the Bollinger Bands indicator on the daily chart). Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320085
Agricultural Commodities Markets Are Going To Remain Sensitive To Developments In The Russia-Ukraine War

Droughts In China - Asia Is Forced To Buy Corn From The US. Prices Are Growing

Saxo Strategy Team Saxo Strategy Team 29.08.2022 09:43
Summary:  The 8-minute speech from Powell focused on one message: no pivot to easing in 2023. The hawkish remarks sent U.S. equities sinking the most since June and down more than 3% across major indices. Policymakers in the ECB also sent out hawkish comments and brought a 75 basis point hike to the table at the September ECB meeting. The U.S. and China regulators announced a deal on audit work papers and removed for the time being the risk of compulsory delisting of Chinese companies from U.S. bourses. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities sank last Friday after Powell spent all his Jackson Hole speech on one thing: pushing back on the market’s speculation that the Fed would pivot and start easing next year.  The tech-heavy Nasdaq dropped 4.1%, leading the charge lower, Alphabet (GOOG:xnas) -6.4%, Amazon (AMXN:xnas) -4.8%, Nvidia (NVDA:xnas) -9.2%. Apple (AAPL:xnas) fell 2.8% after the U.S. Department of Justice announced working on a potential antitrust case against the company. S&P 500 had its worst day since June and plunged 3.4%, Dell Technologies (DELL:xnys) -13.5%, HP (HPQ:xnys) -8.9%. The post-Powell speech selloff capped off a two-week losing streak of the markets and turned major indices’ performance in August into the red.  Earlier in the week, the market sentiment was dampened by downbeat comments from the management of retailers on a glut of inventory and plans to cut prices.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) After Fed Chair Powell’s hawkish comments about the need to keep raising rates until inflation is under control regardless of pains incurred to the economy and employment, the U.S. yield curve twisted and flattened, with the 2-year to 5-year yield rising by 3bps to 3.37%, 10-year nearly unchanged at 3.04%, and the 30-year yield falling by 5bps to 3.19%.  The money market continued to unwind the 2023 rate cut bet and the SOFR Dec 22-Dec 23 (SR3Z2 vs SR3Z3) spread narrowed to -24bps.  Weakness on the front ends began even before Powell’s comments as the market took notice of the ECB’s readiness to consider a 75bp rate hike in its meeting in September due to a deterioration in the inflation outlook.    Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hang Seng Index, +1% last Friday and +2% for the week staged an impressive bounce from the trough of a 2-month losing streak on Thursday and continued to charge higher on the back of reports that the U.S. and China regulators were reaching a deal to avoid the delisting of Chinese companies from U.S. bourses due to disagreement on access to audit work papers.  Later on Friday after the Hong Kong market close, the U.S. and China regulators separately announced that an agreement had been signed and released some details.  Chinese ADRs opened higher in the U.S. session but finished the day 0.7% lower as being dragged down by the sharp decline in the U.S. equity market.  CSI 300 was little changed last Friday and was down 1% for the week.  With U.S. index futures continuing to decline this morning in Asia, the markets’ focus today is likely to be shadowed by the development in the U.S. markets rather than much follow-through from the confirmation of the U.S.-China deal on audit working papers.  Dollar’s post-Jackson Hole gains extend into Asia The dollar continued its run higher in the early Asian hours on Monday after a hawkish tone from Fed Chair Powell on Friday resulted in some volatility but eventual dollar bid. AUDUSD was the weakest in the Asian morning, sliding below 0.6900 amid volatile commodity prices. USDJPY broke above 138 to 1-month highs and USDCNH surged to 6.9000+ levels. EURUSD ended last week below parity and slid further lower to 0.9936 this morning with a tough week ahead as Nord Stream 1 maintenance will likely cause a step up in energy supply concerns. With corporate month end on Monday, and a UK holiday, the scope for further dollar gains remains. Crude oil prices (CLU2 & LCOV2) Crude oil prices ended last wee in gains on supply concerns taking centre stage again, primarily with Saudi Arabia flagging the risk that OPEC+ may cut production to stabilise volatile markets. Demand picture stabilized, and higher gas prices increased the gas-to-fuel switching demand. But oil prices eased in the Asian morning session with Brent futures back at $100/barrel and WTI futures below $93. A warmer winter in the early weeks is putting a lid on demand, and hawkish central bank messages have also hinted at slowdown concerns. Meanwhile, OPEC+ member states, including Iraq, Venezuela and Kazakhstan, suggested readiness within the 23-strong oil producing alliance to intervene and restore balance in the oil market. This is building up concerns on a potential OPEC cut at its Sept 5 meeting. Corn futures surging at Asia open US corn futures rose to a fresh 2-month high in early Asian hours, following last week’s gains supported by concerns that hot and dry weather in the Midwest during the final crop development period may limit the production outcome. USDA’s crop progress report found a 2% decline in the share of the crop rated good or excellent, with 55 percent of fields falling in those two categories. The rating was a new five-year low for this time of year and the second lowest rating since the drought year of 2012. This comes on top of slow shipments from Ukraine and drought in China. The world's fourth largest iron ore miner, Fortescue releases 2nd highest profit on record Fortuecue Metals (FMG) posted a 40% drop in full-year profits. Despite posting record shipments to China, the steep declines in iron ore prices saw the company record a A$6.2 billion profit, down from the A$10.35 billion last year. The result still marked Fortescue’s second-highest profit on record, with the company to pay a final dividend of A$1.21 per share, taking the total payout to A$2.07 (which is a 75% payout on NPAT). So what’s next for Fortescue, the world’s 4th largest iron ore miner? Fortescue sees iron ore shipments being 187m-192m tones in the year ahead (that's another record). Fortescue also overhauled its management and wants to accelerate its push into clean energy. Its clean energy business, Fortescue Future Industries aims to produce an initial 15 million tons a year of green hydrogen by 2030, to help sectors including heavy industry and long-distance transport, decarbonize. $600-$700 million will be spent on clean energy in the coming financial year. As we covered last week in our BHP interview, iron ore demand is likely to slow over the coming 30 years (that’s where Fortescue’s income comes from). Meanwhile, the world requires double the amount of green metals. So the question remains; can Fortescue diversify its business in time? Fortescue’s shares are up 21% from their July low, with investors hoping China infrastructure stimulus will support iron ore demand and boost the company’s earnings.   What to consider? Powell’s message at Jackson Hole gets serious While Powell still stayed away from clearly defining a rate path or the expected terminal rates for the Fed, his strong message did suggest that the fight against inflation is far from over. Powell reiterated that the decision on September 21st on whether the Fed will lift rates by 50bps or 75bps will be driven by the “totality” of data since the July meeting. That puts a great deal of emphasis on the US jobs report due on September 2nd, and the US CPI report due September 13th. There was also some emphasis on rates being held at the peak rate for some time, but there isn’t a substantial change to the market’s expectation of the Fed path yet, with cuts still seen for next year by the money markets. Other Fed speakers still see higher terminal rates Inflation remains the overarching theme in all the Fed talk, and no comfort is being taken from the softening in July inflation. Mester (2022 voter) accepted Fed hasn’t reached neutral rates yet, and said that rates need to go above 4% and held there for some time. Bostic (2024 voter) also suggested a higher terminal rate of 3.5-4.75% compared to what was reflected in the June dot plot, and said rates need to be held there for some time and rate cut talks are premature. The deal between U.S. and China on ADRs Market chatters about a deal between the U.S. and China regulators regarding the allowance to the U.S. regulators access to audit work papers of the auditors of Chinese companies listed on U.S. bourses first emerged last Thursday and the deal was announced by the U.S. and China regulators on Friday.  According to the Public Company Accounting Oversight Board (PCAOB), the agreement gives the U.S. regulator, “complete access to the audit work papers, audit personnel, and other information [the PCAOB] need[s] to inspect and investigate any firm ‘the [PCAOB] choose[s], with no loopholes and no exceptions. But the real test will be whether the words agreed to on paper translate into complete access in practice”. On the other hand, in its announcement and Q&As with reporters, China Securities Regulatory Commission emphasized “the principle of reciprocity” and that “the two sides will communicate and coordinate in advance to plan for inspections and investigations”. The materials such as audit work papers that the U.S. regulator need[s] access to will be obtained by and transferred through the Chines side.  The Chinese side will also take part in and assist in the interviews and testimonies of relevant personnel of audit firms requested by the U.S. side.” Meituan delivered solid Q2 results Meituan (03690:xhkg) reported a 16% YoY growth in revenues to RMB 51 billion, above market expectations across segments better performance.  Adjusted net profits turned positive to RMB 2.1 billion versus a loss of CNY 2.2 billion in Q1 and analyst consensus of an over RMB 2 billion loss.  The company’s food delivery business a strong recovery and the management said that the recovery continued into July and August, with order volumes rising in low-teens YoY in July and at about 20% YoY in August month to date. Soft US PCE confirms the CPI message Lower pump prices cooled price pressures in July, and this has been re-confirmed by the PCE print on Friday. Headline came in at 6.3% YoY (vs. 6.8% expected) while core was at 4.6% YoY (vs. 4.7% expected). The market reaction to these softer numbers was however restrained as the hawkish message from Powell at Jackson Hole took the limelight. The magnitude of the September rate hike still remains a coinflip, but the Fed members have refused to take comfort with the softer CPI print and continue to push for an aggressive fight against inflation. ECB speakers remain committed to inflation despite recession risks A host of ECB speakers on the weekend continued to push for aggressive rate hikes to fight inflation. Schnabel, speaking at Jackson Hole, said rates must be raised, even into a recession. Kazaks also emphasised on further front-loading of rate hikes after the 50bps rate hike announced by the central bank in July. In fact, there were hints of a 75bps rate hike. There were also some concerns on a weaker EUR, as that fuels further inflationary pressures and the benefit of cheaper exports is diminished by supply chain disruption. Villeroy said that the neutral rate should be reached before the end of the year while Kazaks said he would get there in the first quarter of next year. Australian retail trade surged to another record; with dining out and a winter clothing sprees fueling the charge  Australian retail sales data showed how resilient the Aussie consumer is, with retail spending rising for the 7th straight month, up 1.3% vs the +0.3% consensus expected. As electricity bills in Australia are at a record high, and likely to rise, people are layering up this Aussie winter, so retail spending surged to another new record high, A$34.7 billion in July. The Australian winter spending spree saw Department Stores sales surge 3.8% and clothing (footwear and personal accessory retailing) rocket up 3.3%. Australians are living through one of their coldest winters in history; as such spending rose the most in the coldest climates; Victoria and the ACT. Yet spending at cafes and restaurants remained strong, surging to yet another brand new record high (A$5 billion in July), up from 1.8% from the prior month. All this, is despite a softening Australian housing market and the quickest succession of rate hikes in history.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 29, 2022
Sterling Underperformance: Anticipation Builds Ahead of BoE Announcement

Life After Fed Chair Powell's Speech: Focus On August Jobs Report, Strong Dollar And More

Saxo Strategy Team Saxo Strategy Team 29.08.2022 10:00
Summary:  After a hawkish message from Fed Chair Powell at Jackson Hole on Friday, and the focus is squarely on the US jobs report this week and August CPI due on September 13 to move the needle on the magnitude of the September rate hike. Still, the deliberation will now move to where the terminal rates are seen and how long they would be held there. We also get a further update on US economic momentum from the ISM indices and consumer confidence on the radar. European energy crisis situation and the ECB rate hike expectations will develop with the Eurozone CPI prints and the progress on Nord Stream maintenance. China’s manufacturing PMI will be key given the recent heatwaves, as will be Australia’s final manufacturing PMI.   From Powell to jobs After a hawkish message by Fed Chair Powell at the Jackson Hole conference on Friday, focus shifts to the August jobs report in the US to steer between a 50 vs. 75 basis points rate hike at the September meeting. Last month’s robust employment gains of 528k outperformed market expectations boosted the dollar, although the gains were reversed a few days later with a soft CPI report. Both of these reports have to send out a consistent message this time to seal the deal on a 75bps rate hike at the September meeting. Consensus expectations are for gains of 300k on nonfarm payrolls for August, with a steady unemployment rate of 3.5% and slight weakness in average earnings to 0.4% MoM from 0.5% earlier. Meeting or slightly exceeding these forecasts would put the ball in the court of the CPI release, but another strong outperformance could bump up the tightening expectations. Still, our sense is that that the deliberation should now move to how long the Fed will stay at the peak rate, as well as Quantitative Tightening which goes into full gear from September. US economic momentum has likely improved with lower gasoline prices Lower prices at the pump has seemingly helped the US economy reverse from the slowdown concerns, with Chairman Powell also getting the confidence to say that the economic momentum is strong. Consumer confidence, due on Tuesday should likely show a pickup with lower gasoline prices. The easing of financial conditions last month, in contrast to the Fed’s goal of tightening, may also have supported consumer sentiment. ISM manufacturing, which is scheduled to be reported on Thursday, may reflect the weakness seen in the S&P survey, but will still be lifted by the backlog in auto vehicle production. Housing sales may continue to moderate, but housing prices continue to rise and no systemic risks are seen. China manufacturing PMIs expected to decelerate in the midst of heatwaves The median forecasts of economists surveyed by Bloomberg expect China’s official NBS manufacturing PMI to edge up to 49.3 in August from 49.0 in July but remains firmly in the contractionary territory and the Caixin manufacturing PMI to slide to 50.1 in August from 50.4 in July, approaching the threshold between expansion and contraction. The heatwaves and drought-induced power curbs caused Sichuan and Chongqing to shut-down manufacturing activities for six days and eight days in August respectively. The province of Sichuan accounts for 4.2% of China’s industrial production and is an important manufacturing hub for semiconductor and solar panel industries. Both Sichuan and the municipality of Chongqing, which accounts for 2.1% of China’s industrial production, are crucial manufacturing centres for industrial components, including auto parts. During the month, a Covid outbreak hit Yiwu, an export-focussed manufacturing hub in Zhejiang, and could have contributed to dragging on the Caixin manufacturing PMI, which has a higher weight for SMEs in the eastern coastal region. The median forecast for the August official NBS non-manufacturing PMI is 52.2, down from last month’s 53.8 but remains in the expansionary territory.  The key Australian economic data to watch, and why key stocks will move in response On the same day China releases manufacturing data, which will be watched closely by commodity investors and Australian investors alike, given key commodities such iron ore, copper, nickel, coal are essential to Chinese manufacturing, investors will then quickly turn their attention to Australia’s August manufacturing indicators. Although Australia is not manufacturing economy, given services contribute 70% to GDP, manufacturing is still closely looked at as many top ASX companies are key producers and manufacturers. This includes energy companies like Woodside, Caltex, Viva Energy, as well as global packaging company, Amcor and global vaccine maker CSL, as well as global mining juggernauts BHP, Rio Tinto and Fortescue. So, when manufacturing data comes out, if its stronger than expected, (above a read of 51), then you might see an increase in buying in some of Australia’s key manufacturers. That being said, it’s really important to note that last month’s gauges pointed to slower growth in factory activity with higher interest rates, higher wages, and a lack of workers slowing activity. So it will be key to see if manufacturing continues to slow. Eurozone inflation and Nord Stream maintenance will be key for the ECB There is no question on the direction in Eurozone inflation, given the extensive reports on gas prices and power costs in the region over the last few days. However, some softening may be warranted after an all-time high of 8.9% was reached on the Eurozone inflation print in July, given the easing in pump prices in August. Still, gas supply concerns continue to remain top-of-mind for Germany with Gazprom announcing another leg of maintenance for the Nord Stream pipeline this week. Food prices are also seeing another pickup, and further gains in the headline print in Q4 cannot be ruled out. Calls for a 75 basis points rate hike by the European Central Bank have already picked up, and these could gain further traction if we see a strong CPI print this week. However, if Nord Stream supply comes back on time after its 3-day scheduled maintenance, and with some potential increases in capacity as has been hinted, that could mean a substantial decline in European gas prices and relief in utility costs in the months to come. India/South Korea GDP will re-affirm Asia’s steady growth India and South Korea GDP report GDP growth in Asia this week, along with inflation figures as well in South Korea. A double-digit GDP growth print is expected for India, with consensus at 15.2% YoY amid a strong recovery in services demand, albeit on a weak base. Commodity price gains are however likely to return and weigh on growth recovery going forward, as will slower global demand. But the RBI remains in a position to push further with its rate hikes to get a grip on inflation. South Korea’s Q2 GDP is however likely to remain steady, and focus will instead be on August inflation as that remains a bigger problem with over 6% prints being seen lately.   Key economic releases & central bank meetings this week Monday 29 August United Kingdom Market Holiday Australia Retail Sales (Jul) Japan Coincident Index Final (Jun), Unemployment rate (Jul)   Tuesday 30 August Thailand Industrial Production (Jul) Germany Import Prices (Jul), Inflation (Aug) Spain Inflation Rate (Aug), Business Confidence (Aug) United Kingdom Mortgage Approvals (Jul) Eurozone Consumer Confidence Final (Aug) US House Price Index (Jun), US Conference Board Consumer Confidence (Aug)   Wednesday 31 August South Korea Industrial Production (Jul) Japan Industrial Production (Jul) China NBS Manufacturing PMI (Aug) France Inflation Rate (Aug) Germany Unemployment Rate (Aug) Hong Kong Retail Sales (Jul) Eurozone Core Inflation Rate (Aug) Italy Inflation Rate (Aug) United States MBA Mortgage Applications (26 Aug), United States ADP Employment Change (Jun) India GDP (Q2) Canada GDP (Q2)   Thursday 1 September S&P Worldwide Manufacturing PMIs South Korea GDP Growth Rate (Q2), Exports (Aug) Japan Capital Spending (Q2) Australia Home Loans (Jul) Indonesia Inflation Rate (Aug) Germany Retail Sales (Jul) United Kingdom Nationwide Housing Prices (Aug) Italy GDP Growth Rate (Q2), Unemployment Rate (Jul) Eurozone Unemployment Rate (Jul) United States Jobless Claims (Aug)   Friday 2 September South Korea Inflation (Aug) Germany Balance of Trade (Jul) United States Non-Farm Payrolls (Aug) Unemployment Rate (Aug), Factory Orders (Jul)   Key earnings releases this week Monday: Haier Smart Home, Foshan Haitian Flavouring, Agricultural Bank of China, BYD, Pinduoduo, Trip.com, DiDi Global, CITIC Securities Tuesday: Woodside Energy, ICBC, China Yangtze Power, Muyuan Foods, SF Holdings, Shaanxi Coal, Midea Group, Tianqi Lithium, Ganfeng Lithium, Bank of Montreal, China Construction Bank, Bank of China, Great Wall Motor, COSCO Shipping, Partners Group, Baidu, Crowdstrike, HP Wednesday: MongoDB, Brown-Forman, Veeva Systems   Thursday: Pernod Ricard, Broadcom, Lululemon Athletica, Hormel Foods Friday: BNP Paribas Fortis   Source: Saxo Spotlight: What’s on investors and traders radars this week?
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

Forex: British Pound (GBP) To US Dollar (USD) - Technical Analysis - 29/08/22

InstaForex Analysis InstaForex Analysis 29.08.2022 10:29
Technical Market Outlook: The GBP/USD pair has broken below the technical support located at 1.1717 (the recent monthly low) and made a new, fresh low at the level of 1.1651. The nearest horizontal technical resistance is seen at the level of 1.1717 and 1.1760 and this level is the next target for bulls in a case of a bounce. The momentum remains weak and negative, however, there is a bullish divergence seen on the H4 time frame chart between the price action (last low) and momentum. The larger time frame trend (daily and weekly) remains down until further notice.     Weekly Pivot Points: WR3 - 1.18043 WR2 - 1.17392 WR1 - 1.17002 Weekly Pivot - 1.16741 WS1 - 1.16351 WS2 - 1.16090 WS3 - 1.15439 Trading Outlook: The Cable is way below 100 and 200 DMA , so the bearish domination is clear and there is no indication of down trend termination or reversal. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame chart last week. The next long term target for bears is seen at the level of 1.1410. Please remember: trend is your friend. Relevance up to 09:00 2022-08-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/290330
Speech At Jackson Hole Triggered Masacric Slide In Equities! US Treasury Yields Reaction

Speech At Jackson Hole Triggered Masacric Slide In Equities! US Treasury Yields Reaction

Saxo Bank Saxo Bank 29.08.2022 10:46
Summary:  Fed Chair Powell's Jackson Hole speech was credited with triggering the ugly slide in equities and broader risk sentiment on Friday, but the modest reaction in US treasury yields suggests that the Fed was only moderately more hawkish than anticipated. Regardless, the market slide has already developed ugly momentum and could test next supports if US data this week continues to support higher yields and a stronger US dollar, an important financial condition in its own right. We also discuss the latest commodity price developments and weak precious metals on the stronger US dollar and remarkably persistent view that hefty disinflation is just around the corner. Today's pod features Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Markets stumble after Powell's Jackson Hole speech
bybit-news1

Jerome Powell (Fed) Introduces Bank's Strategy. Elizabeth Warren Speaks Its Mind

InstaForex Analysis InstaForex Analysis 29.08.2022 11:04
Fed's Jerome Powell's testimony The US Federal Reserve will remain hawkish and focus on inflation, Chairman Powell said on Friday, adding that US economic growth will slow down and unemployment will rise. It comes as no surprise as rate hikes have always triggered a cooling effect on the economy. Still, not all US officials agree with such an approach. In the European Union, they are trying to balance between maintaining economic growth and fighting inflation. In the United States, however, their primary concern is to bring inflation to the 2% target, with little attention paid to economic growth. The Federal Reserve reckons that a decrease in GDP is not a recession because the latter is always followed by a wave of bankruptcies, rising unemployment, contraction in the jobs market, and other sad events. Right now, there is just a fall in GDP, which could be interpreted as a correction after strong growth. Nevertheless, business activity is slowing down as well as industrial production, and things are only getting worse. Elizabeth Warren Senator Elizabeth Warren said on Sunday that she is concerned about the regulator's plans to further tighten monetary policy as recession risks are increasing. In her view, high prices and millions of unemployed are worse than high prices and a strong economy. She believes, the Federal Reserve's actions are likely to lead to high unemployment and negative economic growth rather than to low inflation. "I just want to translate what Jerome Powell just said. What he calls 'some pain' means putting people out of work, shutting down small businesses, because the cost of money goes up, because the interest rates go up," Warren said on Sunday. Elizabeth Warren may be partially right. The Bank of England, for example, has raised the benchmark rate six times in a row but inflation is still on the rise. Of course, the situation in the UK is somewhat different because the country has recently been through Brexit. Governor Andrew Bailey sees the United Kingdom sliding into a recession in the last six months of the year. Meanwhile, US inflation might be declining rather slowly, not in line with the central bank's expectations. Moreover, consumer prices have so far fallen just once. There is no guarantee that the slowdown will continue. It might be a drop of as much as 0.1-0.2% a month, taking the Federal Reserve several years to bring inflation to the 2% target. All this time, the American economy would be under tremendous pressure. The inflation report due on September 14 will clear things out. It will be released a week before the next rate hike and show whether Mr. Powell and the Committee are right in their pledge to forcefully and rapidly act against inflation. Relevance up to 06:00 2022-08-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320117
German Business Confidence Dips, ECB's Lagarde Hosts Central Banking Conference in Portugal, EUR/USD Drifts Higher

Powell Signals Goals Of Fed, Dollar Index Nears 110 Level, Bitcoin And Gold Trade Lower

Swissquote Bank Swissquote Bank 29.08.2022 11:23
Federal Reserve (Fed) Chair Jerome Powell’s speech at the Jackson Hole meeting wreaked havoc across the equity markets on Friday. His message was crystal clear: inflation must come down even if it means pain for households and businesses in the process. Major US indices tumbled, the US yields advanced, and the US dollar gained. What about Bitcoin and Gold? Gold and Bitcoin were sold. In energy, European gas futures continue their spike and crude oil kicked off the week higher. Due this week, the European flash CPI and the US jobs data will be in focus. For the US, another strong jobs data would further back the Fed hawks, whereas in Europe, even a scary inflation figure, and revived ECB hawks, may not suffice to throw the single currency above parity against the US dollar.   Watch the full episode to find out more! 0:00 Intro 0:27 Powell shows no pity, says the Fed will fight inflation despite costs 2:04 US indices tumble 3:10 Another strong jobs read could further revive Fed hawks 6:35 USD rallies, euro retreats 8:20 Energy prices push higher 9:13 XAU and Bitcoin cheaper post-Powell Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Jackson #Hole #Powell #speech #inflation #hawkish #energy #crisis #crude #oil #natural #gas #USD #EUR #XAU #Gold #Bitcoin #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH  
The EUR/USD Pair Is Still In A High Position On The 1H Chart

Forex: EUR/USD (Euro To US Dollar) - Technical Indicators And Possible Scenarios - 29/08/22

InstaForex Analysis InstaForex Analysis 29.08.2022 11:39
Trend analysis (Fig. 1). On Monday, the price may go down from 0.9963 (closing level of the Friday daily candlestick) to the lower fracts of 0.9900 (white dotted line) and test it. The price may then rise, test the 14.6% retracement level of 0.9967 (white dotted line), and continue to increase.     Fig. 1 (daily chart). Complex analysis: - indicator analysis - down; - Fibonacci levels - down; - volumes - down; - candlestick analysis - down; - trend analysis - down; - Bollinger bands - up; - weekly chart down. Conclusion: Today, the price may go down from 0.9963 (closing level of the Friday daily candlestick) to the lower fracts of 0.9900 (white dotted line) and test it. The price may then rise, test the 14.6% retracement level of 0.9967 (white dotted line), and continue to increase. Alternative scenario: the price may go down from 0.9963 (closing level of the Friday daily candlestick), test the lower Bollinger band at 0.9815 (black dotted line), and rise to the lower fractal of 0.9900 (white dotted line). The quote may then extend growth to the 14.6% retracement level of 0.9967 (white dotted line). Relevance up to 08:00 2022-08-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320127
Fed is expected to hike the rate by 50bp, but weaker greenback and Treasury yields don't play in favour of the bank

Fed Is Determined To Fight Inflation! Forecasts For USD/JPY And AUD/USD - 29/08/22

InstaForex Analysis InstaForex Analysis 29.08.2022 11:48
Federal Chairman Jerome Powell, speaking at a symposium in Jackson Hole, did everything to make the market finally realize that the central bank will stop at nothing in its plan to curb inflation in America. In the last article, we suggested that if the head of the Fed did not throw a surprise at the markets, then it would be possible to observe another local rally in the stock and other asset markets with a simultaneous increase in demand for government bonds and a weakening of the US dollar. And that would very likely have been the case if Powell hadn't made a targeted statement pointing out that while controlling inflation through higher interest rates, slower growth and softer labor market conditions would hurt households and businesses , "failure to restore price stability will mean much more pain" in the long run. It seems that weak hopes have finally collapsed, and this largely confirms the recovery in the growth of treasury yields amid falling demand for them. The yield of the 10-year T-Bond benchmark is already confidently staying above the 3% level and, after a slight downward correction, resumed growth. It is likely that a further sell-off in the government debt market will push it up to an immediate high of 3.5%. How will the US dollar behave in the context of continued aggressive rate hikes and growth in Treasury yields? We believe that it will have to further strengthen against major currencies, despite the fact that rates will also rise in other economically developed countries of Europe, Canada, Australia, and so on. Here it will be supported by the growth of Treasury yields and the flight of capital from Europe, as well as from countries with emerging economies, with the exception of Russia and China. In this case, we can expect the growth of the dollar index ICE to the mark first at 110, and then to 111 points. In fact, it will be possible to say that the dollar exchange rate against major currencies will linger for a long time at the level of the beginning of this century. As for the possible dynamics of the markets this week, the release of data on inflation in the eurozone, which is expected to rise again, and, of course, the latest figures on unemployment in America, will play a leading role here. Considering the Fed's general position regarding rates, we believe that if the data on the number of new jobs comes out no worse than expected, the US central bank will once again be confident that it is on the right course, fighting inflation and using the still strong labor market for this, trying to bring down the economy before serious problems arise, like a high temperature with aspirin, by aggressively raising interest rates. It is likely that after local consolidation, the smooth strengthening of the dollar will continue, and the markets will remain between the hammer of Fed rates and the anvil of inflation. Forecast of the day:     AUDUSD pair The pair is trading below 0.6865. Consolidation below this mark may be the basis for the pair's fall to 0.6800. USD/JPY pair The pair is at the level of 138.90. If it does not settle above it, it may correct down to 138.45, and then again rush to 139.40. Relevance up to 09:00 2022-08-31 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320143
Sebastian Seliga Comments On EUR/USD, Dollar Index, XAUUSD And S&P 500 - 29/08/22

Sebastian Seliga Comments On EUR/USD, Dollar Index, XAUUSD And S&P 500 - 29/08/22

InstaForex Analysis InstaForex Analysis 29.08.2022 11:54
Let's take a look at the technical picture of EUR/USD, USDX, GOLD, and SP500. Read next: Cryptocurrency: Bitcoin Price (BTC/USD) - Technical Analysis - 29/08/22| FXMAG.COM Relevance up to 11:00 2022-08-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/video_analysis/290355
Analyst Favorites: Sunrun, Block, and Nvidia Lead the Pack Among Saxo's Top Traded Stocks with 17% Upside Potential

Global Recession Is Coming. Central Banks Want To Rein In Prices

Marc Chandler Marc Chandler 29.08.2022 12:26
The poor preliminary PMI readings, the ongoing European energy crisis, and the recognized commitment of most major central banks to rein in prices through tighter financial conditions are risking a broad recession. These considerations are weighing on sentiment and shaping the investment climate. Most high-frequency data due in the days ahead will not change this, even if they pose some headline risk.   What we have seen among some central bankers applies to market participants too  It is not so much that these central bankers are congenitally doves or hawks, but they are simply activists. Whether conditions warrant tighter or easier monetary policy, the activists lead the charge and are more aggressive than most of their colleagues in both directions. Similarly, some market participants are just extreme in their views. On the one hand, given that market returns are often characterized by fat tails, it makes sense that market views are not normally distributed. Hugging the median (there is rarely truly a consensus, despite the market jargon) draws little attention and is unlikely to promote sales of research products and newsletters.   On the other hand, depending on the corporate culture, there may be little incentive to take the risk of standing out from the crowd  It is as if some take Keynes to heart: "Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally." Sometimes, corporate culture is broad enough to accept either approach, allowing the idiosyncrasies of the economist/analyst wider latitude. However, some are conditioned to fear being wrong that they do not let themselves be right. For them, being part of the crowd is safe. Being part of the consensus nearly always gets less pushback than being an outlier.   II Three high-frequency economic prints next week will likely move the markets whether they meet expectations or not: China's PMI, the eurozone's CPI, and the US employment report  These are the three biggest economies, and each is struggling to put it mildly. The data are unlikely to change this view but could impact the policy outlook. In addition, extreme weather aggravates existing challenges, including the energy crisis, supply chain disruptions, and inflation pressures.   The US, Japan, the eurozone, and Australia's preliminary composite PMIs fell below the 50 boom/bust level  Ironically, the UK's held slightly above, though the Bank of England of a recession that will extend into 2024. Where is China?   Its July composite stood at 52.5. It had been below 50 due to the lockdowns associated with its zero-Covid policy from March through May. It reached a 15-month high in June of 54.1.    In the US, we argued that back-to-back quarterly declines in output were a bit of a statistical quirk stemming from the challenge of managing inventories in the current economic environment and trade, to a lesser extent  While recognizing that a sustained economic contraction was likely, we did not think it actually had begun and expected policymakers to act accordingly.   In China's case, the economic data is consistent with growth  The median forecast in Bloomberg's survey sees the world's second-largest economy expanding by 3.4% quarter-over-quarter after a 2.6% contraction in Q2. However, Chinese officials are acting as if it were in a recession or will be shortly. It unexpectedly shaved its benchmark one-year medium-term lending facility rate and allowed lending prime rates to be cut. The larger (15 bp) cut in the five-year rate clearly reflected the ongoing concerns about the housing market. Beijing is using command functions and coordinating capabilities to push lending from banks to the property sector and new local government borrowing for infrastructure projects. It has accepted a weaker yuan against the US dollar. It fell to a new two-year low last week. The softer the PMI, the more the market will look for further easing, including reducing required reserves.   On August 31, the eurozone publishes its preliminary estimate of the month's CPI  Headline inflation accelerated to 8.9% in July, surpassing the US 8.5% pace. The median forecast in Bloomberg's survey is for the pace to tick up slightly to 9.0%. In addition, the core rate is seen edging up to 4.1% from 4.0%.  Many EMU members are helping struggling households by cutting the VAT on energy or other subsidies, but the price of energy is rising even quicker  While there is some debate over whether US inflation has peaked, there is less debate in Europe. Prices are still rising. Seasonal patterns may be distorted, but July's monthly change has been less than June since 2003. August's monthly CPI has increased more than July's since 2000, with the one exception of 2020 when it matched July's 0.4% decline. This month's inflation is expected to rise by 0.4% after the 0.1% increase in July. The weakness of the euro also risks boosting prices. The single currency is off about 2.5% this month after falling roughly 4.8% in the previous two months.  The European Central Bank meets on September 8  The swaps market is confident that even though the flash PMI warns that output is contracting, the ECB will continue to hike rates. Following the half-point increase in July, the market expects another 50 bp hike next month. More than that, the swaps market has about a 50% chance of a 75 bp move. Press reports confirmed that several ECB officials want to discuss a three-quarter point hike. That said, they do not appear in the majority. Not to get too far ahead of the game, but the market is pricing in around 85 bp of tightening in Q4 (two meetings, October 27 and December 15). The latest Bloomberg survey found a median forecast for the euro to finish the year at $1.02. This seems increasingly optimistic. A one-standard-deviation band around the year-end forward suggests a mathematical range of about $0.9430 to $1.0675. While the median is in the upper third of the range, our subjective idea would put it in the bottom third.  That brings us to the US August employment report on September 3, just before the long holiday weekend (Labor Day, US markets closed)  Recall that nonfarm payrolls rose about twice as much as expected in July, 528k. That the average growth in the first seven months was slightly above 470k. In the Jan-July period last year, the US grew about 555k jobs a month on average. However, that appears to have underestimated US job growth. In the benchmark revisions announced last week. The US added 571k more private sector jobs in the year through March, which translates into around 47.6k more a month.   The median forecast in Bloomberg's survey has crept up in recent days to 300k  The unemployment rate, which slipped to a new low of 3.5%, is expected to remain unchanged, while a 0.4% rise in average hourly earnings could see the year-over-year pace ticked back to 5.3% year-over-year. It was at 5.2% in June and July. By nearly any reckoning, that would still be a solid report and one that will likely encourage the Fed to deliver another 75 bp hike when it meets in late September.    Market sentiment has swung back and forth a bit over the likelihood of a third consecutive 75 bp hike  Despite the poor housing sector data and the dismal PMI, the Fed funds futures market finished last week discounting a little more than a 2/3 chance of a 75 bp instead of 50 bp. Such a move would lift the target to 3.00%-3.25%. The pricing suggests that Fed will likely slow the hikes going forward. The market is pricing in a year-end rate between 3.50% and 3.75%. The market is pricing in a strong probability of a hike in Q1 23 (~80% chance). This was unchanged from before Powell's speech at Jackson Hole. In the middle of last month, the Fed funds futures market had priced in 60 bp of cuts next year. That was the gap between the implied yield of the December 2022 Fed funds futures and the December 2023 contract. It finished last week near seven basis points., about two basis points less than before Powell's speech. III The dollar's two-week rally that began August 10-11 may not be over despite the volatility spurred by position adjusting around Powell's Jackson Hole speech Powell specifically warned that some pain will be associated with efforts to rein in inflation, which the Fed is committed to doing. That seems to suggest some economic weakness will not interfere with its course until inflation convincingly moves back towards its target. Other major central banks, but the Bank of Japan, have implied pretty much the same thing.   Dollar Index:  DXY rallied from a six-week low near 104.65 on August 10 to slightly above 109.25 on August 23. However, it stopped short of the mid-July high of almost 109.30. The sell-off before the weekend took it briefly through 107.60 to set a new low for the week before recovering to almost 108.90. The MACD is rising albeit more gently, but the Slow Stochastic is overextended and suggests that this leg up is getting long in the tooth. Still, the prospect of another healthy job report at the end of next week may deter a significant retreat. The pre-weekend low approached the minimum (38.2%) retracement of the leg up (~107.50).  Euro:  The euro recorded a new 20-year low near $0.9900 on August 23, seeming to complete the leg down that began on August 10 at around $1.0370. However, the Jackson Hole-related position adjustment saw it recover to $1.0090, which marginally surpassed the (38.2%) retracement objective (~$1.0080). The next retracement (50%) and the 20-day moving average are found in the $1.0135-40 area. Yet, the euro continues to struggle and settled nearly cent off its session highs before the weekend. The MACD descent has slowed, and the Slow Stochastic is moving sideways in oversold territory. Selling into upticks continues to be the preferred strategy. A significant low does not appear to be in place. Potential next week to toward $0.9800, maybe.   Japanese Yen:  The greenback reached JPY137.70 on August 23 and settled into a narrow range in dull dealing for the remainder of the week. Although the dollar traded on both sides of Thursday's range ahead of the weekend, it remained mired in the range established on August 23 (~JPY135.80-JPY137.70). The MACD looks constructive, but the Slow Stochastic is poised to turn lower. The US 2- and 10-year yields reached their highest level in two months, which underpins the dollar. Above the JPY137.70 area, the next resistance may be encountered near JPY138.20-40, but there is little standing in the way of another run at the JPY140 area.   British Pound:  Sterling posted a bearish outside down the day before the weekend by trading on both sides of Thursday's range and settling below Thursday's low. The Jackson Hole-related position adjustment stalled at $1.19, shy of the $1.1930 (38.2%) retracement target. It reversed low and fell to $1.1735, just above the two-year low on August 23 (~$1.1720). The MACD is trending lower, but the Slow Stochastic is moving sideways in oversold territory. The 2020 low slightly above $1.14 beckons, and there is little on the charts to prevent it. Sterling cannot sustain upticks even though its discount to the US on two-year yields has fallen from around 135 bp on August 9 to 45 bp in the middle of last week before finishing around 60 bp.   Canadian Dollar:  The US dollar had given back about half of the gains scored since August 11 (~CAD1.2730 to almost CAD1.3065) before Powell spoke at Jackson Hole. That retracement and the 20-day moving average converged around CAD1.2895. The sharp sell-off of US equities ahead of the weekend saw the greenback jump to almost CAD1.3045. The MACD is rising gently, while the Slow Stochastic has begun moving sideways near its highest level in two months near overbought. The poor price action in the S&P 500, with the upside gap on the weekly charts left unfilled before the breakdown to the lowest level since August 2, warns that the US dollar could challenge the CAD1.31 area in the coming days. The nearly two-year high was set on July 14 at around CAD1.3225. That may be the next important chart area.   Australian Dollar:  Like the Canadian dollar, the Australian dollar has recovered half of the losses seen in the latest leg down that began from the August 11 high near $0.7135 and bottomed on August 23 around $0.6855. The Aussie staged a key reversal from that low and closed above the previous day's high. That retracement objective was near $0.7000 and the next (61.8%), and it was briefly surpassed before the weekend and Aussie's reversal back to $0.6900 to take out the previous session's low.   The MACD is not generating a strong signal, while the Slow Stochastic is curling higher after dipping into oversold territory. A return to the $0.6855 area looks likely, and below that could see $0.6800, though a return to the two-year low set in mid-July near $0.6680 cannot be ruled out.   Mexican Peso:  The dollar forged a bottom against the peso in mid-August around MXN19.81-82. That is also roughly where the dollar bottomed in late June. The greenback bounced to MXN20.2665 and retreated last week to around MXN19.85. The momentum indicators are not generating strong signals, but the floor looks strong. In the face of the sharp US equity losses, and the broader risk-off mood, the peso was surprisingly resilient.  It rose by about 0.65% last week. Initial resistance may be near MXN20.06 and then MXN20.11-13. Latam currencies generally outperformed within the emerging market space last week. Four of the top five emerging market currencies were from Latam, led by the Chilean peso's 5.9% rally. The current intervention program runs out on September 30 but could be extended. The intervention to support the Chilean peso after it fell to record lows last month has given the currency a reprieve but could exacerbate the current account deficit, which reached 8.5% of GDP in Q2.   Chinese Yuan: The Chinese yuan slumped to two-year lows last week as policy divergence grew more acute with the latest Chinese rate cuts. More easing of monetary policy is expected, and there is some speculation that another cut in required reserves could materialize in early Q4. China's discount to the US on 10-year bonds rose for the fourth consecutive week, and at 37 bp, was the largest weekly close since June. The PBOC has fixed the dollar weaker than expected over the last few sessions, and the magnitude seems sufficient to suggest a warning from Chinese officials not to get too carried away. That seems similar in spirit to the reports that the State Administration of Foreign Exchange called a few banks last week and warned them about large speculative yuan sales. We suspect the message is that while a weaker yuan is acceptable, the current pace is not. The next objective is around CNY6.90, but the risk of a move to CNY7.0, which did not seem so likely a couple weeks ago, seems more so now.      Disclaimer   Source: The Week Ahead: Dollar Bulls Still in Charge
Nikkei, Taiex And Kospi Are Falling. Situation Of Markets In Asia Pacific

Nikkei, Taiex And Kospi Are Falling. Situation Of Markets In Asia Pacific

Marc Chandler Marc Chandler 29.08.2022 12:37
Overview: The reverberations from last week continue to roil the capital markets today. Equities and bonds have been sold and the greenback bought. Most of the large markets in Asia Pacific fell by more 2%, including Japan’s Nikkei, Taiwan’s Taiex, and South Korea’s Kospi. Ironically, the Shanghai and Shenzhen Composites eked out minor gains, but the CSI 300 still eased. Europe’s Stoxx 600 is off 1% after falling nearly 1.7% before the weekend. US futures warn of another lower opening. Recall that the major indices gapped lower last Monday as well. The US 10-year yield is up 7 bp to 3.11%, probing last week’s highs, while the two-year yield reached new highs near 3.48% before steadying. European benchmark yields are 12-13 bp higher. The dollar is firmer against all the major currencies. Most of the European currencies but the Norwegian krone and British pound are off modestly, while the yen, the Australian dollar and sterling are off more than 0.5%. Emerging market currencies are under pressure, though the Hungarian forint and Czech koruna are steady to firm. Rising rates and a stronger dollar are no match for gold, which has been sold to a new low for the month (~$1720.45). There appears little support in front of $1700. October WTI is firm near $93.75. Talks with Iran will carry over into next month. US natgas slipped fractionally last week and is up nearly 2.5% today to about $9.55 after testing $10 last week. News that Germany is near its 85% tank capacity objective for next month has seen Europe’s benchmark soften a little (off ~1.8%). Iron ore is giving back most of last week’s 4.7% gain. December copper is off 3.4% after posting a minor gain last week (~0.7%). December wheat rallied 4.4% last week and is off almost 1% today.  Asia Pacific As China's Xi awaits the coronation for a third term, the challenges seem to be intensifying. Shijiazhuang, the provincial capital of the Hebei province that borders Beijing is in a partial lockdown for three days, which started yesterday, and includes the suspension of subways and non-essential business operations. It is a city of more than 11 mln people and follows lockdowns in other parts of Hebei last week. Power shortages are leading to rolling blackouts in different regions and compounding the challenge arising from the end of property boom. The economic toll spurred the government into action recently with rate cut and new lending/spending initiatives mostly concentrated on infrastructure. Over the weekend, China reported that industrial profits fell 1.1% in the Jan-July period. They had risen by 0.8% in the first half. The decline in profits dovetails with the deepening of the economic slump seen in a batch of data reported recently. While several central bankers used the Jackson Hole gathering to brandish their anti-inflation credentials, BOJ's Kuroda stuck fast to his commitment to easy monetary policy. He argued that nearly all of Japan's inflation is a function of higher commodity prices. He said that inflation would decelerate next year toward 1.5%. It was 2.6% in July, but 1.2% excluding fresh food and energy. Kuroda's inflation outlook is not much different than the market’s. A recent Bloomberg survey found a median forecast for Japan's 2023 CPI of 1.3% at the headline rate than 1.4% core. July retail sales in Australia surged 1.3%, the most in four months, and four-times more than the median forecast in Bloomberg's survey. It did nothing for the Australian dollar, which extended the pre-weekend sell-off. Still, the resilience of the Australian consumer was impressive despite the cost-of-living squeezes. Gains were recorded in five of the six retail categories., with only demand for household goods softening. The Reserve Bank of Australia meets on August 6 and the swaps market has a little more than a 70% chance of 50 bp hike discounted and about 150 bp priced between now and the end of the year. The jump in US rates helped lift the dollar to JPY139.00 in late Asia turnover. It is the highest since July 15, the day after the 24-year high was set near JPY139.40. Japan's Cabinet Secretary Matsuno noted that the government is closely was closely watching market movements. However, the price action can hardly be surprising given the divergent messages at Jackson Hole. The greenback's momentum stalled a bit. Initial support is seen near JPY138.50. Although there was not take-up at the BOJ's offer to buy bonds today, the 0.25% cap on the 10-year is being approached again. The Australian dollar recorded a bearish outside down session ahead of the weekend by trading on both sides of Thursday's range and settling below Thursday's lows. Follow-through selling today has seen it approach $0.6840, new lows for the month. Importantly from a technical perspective, it appears to have broken the neckline of a possible head and shoulders top that projects through the two-year lows set in mid-July near $0.6680. Nearby resistance is now seen around $0.6870. The dollar gapped sharply higher against the Chinese yuan. It reached a new two-year high of CNY6.9225 and did not trade below CNY6.90 today. The pre-weekend high was about CNY6.8730. Since August 10, the greenback has risen by roughly 2.50%. The CNY7.0 is an important psychological level, but it peaked in September 2019 near CNY7.1850 and revisited it in May 2020 (~CNY7.1780). For the fourth session, the PBOC set the dollar's reference rate weaker than the median in Bloomberg's forecast as it moderates the pace of the dollar's rise. Today's fix was at CNY6.8698 vs. expectations for CNY6.8794. Europe Europe is on the verge of a recession. Indeed, it may have already begun. It is not going to deter the European Central Bank or the Bank of England from continuing to aggressively tightening monetary policy. A few ECB members from creditor countries, like Austria and the Netherlands, want the central bank to consider raising rates by 75 bp at next month's meeting. They do not yet seem to represent a majority, but it is not like the members from the periphery are advocating a quarter point move.  The surge in natural gas and electricity prices promise to drive inflation higher and intensify the squeeze on the cost-of-living. Before the weekend, the UK regulator (Ofgem) confirmed what was suspected. The cap on gas and electricity will be lifted by 80% on October 1. This likely means that UK inflation will rise above the BOE's latest forecast of 13.2%, and the new UK government face strong pressure to help households and businesses. It had previously committed GBP30 bln to households but that was three months ago. To cover the same proportion now of the increase would require another GBP14 bln, according to some estimates. We had thought that increased military spending would replace some of the Covid-related spending, and while that may be true, it now seems that energy subsidies and the like will also generate wider deficits. It may also lead to increased nationalization of the parts of the energy sectors. Sweden holds legislative elections on September 11 and the law-and-order and anti-immigration party that has been shunned by the mainstream parties appears to be surging in the polls. The Swedish Democrats could be the second largest party after the ruling Social Democrats. Three different polls published last week give it 1/5-1/4 of the vote compared with 30% for the government. The Moderates have been pushed into third place with 16-18% support. The center-right bloc of the Moderates, Christian Democrats, and Liberals could ally with the Swedish Democrats. The polls show it is virtually tied with the center-left bloc of Social Democrats, Left, Centre, and Green parities. Separately, Sweden reported the economy expanded by 0.9% in Q2, missing 1.4% expectations, though Q1 was revised from a 0.8% contraction to a 0.2% expansion. Sweden's CPI was at 8.5% in July and the underlying measure, which uses fixed interest rates, and is the target measure was at 8.0%. The policy rate stands at 0.75%, following the 50 bp hike in June. The Riksbank meets on September 20 and the swaps market is pricing in a large hike (~100 bp). The euro retested last week's 20-year low near $0.9900, and when it held a small, short-covering bounce in early European activity lifted it to almost $0.9960. A combination of bearish sentiment and options for nearly 1.6 bln euro at $1.000 may deter a move above parity. The session high is a little shy of $0.9990. For its part, sterling slumped to a new two-year low near $1.1650. It posted a bearish outside down day ahead of the weekend. Sterling has met the double top objective near $1.17, we had monitored that had a $1.20 neckline. The spike low in March 2020 saw it trade to almost $1.1410. Sterling is finding some support in the European morning, and the $1.17 area now should offer resistance. America Fed Chair Powell terse speech at Jackson Hole before the weekend did not appear to change expectations for the trajectory of monetary policy. The implied yield of the March 2023 Fed funds futures contract continued to trade about 20 bp above the December 2022 contract as it had for a couple of weeks. This points to a strong expectation of a rate hike n Q1 23. The implied yield of the December 2023 Fed funds futures was about seven basis points below December 2022 contract. This implies a small chance of a cut late next year. These spreads were virtually unchanged in response to the Fed Chair's speech. Powell did succeed in doing was to drive down the two-year breakeven, which speaks to the much-maligned anti-inflation credibility of the Federal Reserve. The two-year breakeven dropped almost 16 bp before the weekend to 2.74%. Consider that it was near 4.5% as recently as mid-June. This speaks to the increase in the real rates, which in turn punished equities and risk assets more broadly. One common refrain against the Federal Reserve is that is does not have tools to address the supply shocks that have lifted prices. Another tact, illustrated by a paper presented at Jackson Hole, is that fiscal policy is responsible for around half of the recent increase in inflation and that when inflation is of a fiscal nature, monetary alone does is not effective. There are at least two answers to these criticisms. First, it underscores our claim that the extent of fiscal tightening has not been appreciated. The budget deficit is expected to fall to below 4.5% of GDP this year from 10.8% last year. Consider that after the Global Financial Crisis, the US deficit peaked around 10% of GDP (2009) and did not fall below 5% of GDP until 2013. Second, Powell address this in his Jackson Hole Speech in the first lesson of the 1970s inflation. Price stability, regardless of what threatens it, is the Fed's responsibility. He argued that the Fed needs to constrain demand to bring it in line with supply.    What will be a data-packed week, culminating with August nonfarm payrolls, will begin slowly, with only the Dallas Fed manufacturing survey and the sale of $96 bln in 3- and 6-month bills on tap for today. The risk-off mood has sent the greenback through last week's highs (~CAD1.3060-5) against the Canadian dollar. The next chart area is seen around CAD1.3100-35, and the two-year high set in mid-July (~CAD1.3225). The intraday momentum indicators are flagging and warning of the risk of some backing and filling before those highs are attacked. Initial support is seen in the CAD1.3030-50 band. Meanwhile, the greenback appears to have built a base around MXN19.82 and looks poised to challenge recent highs near MXN20.26. It reached MXN20.15 in Asia before pulling back to below MXN20.10. Further easing toward MXN20.05 may provide a lower risk entry.    Disclaimer   Source: Stocks and Bonds Sell Off, while the Dollar Rallies
Alphabet Reports Strong Q2 2023 Results with Growth in Advertising and Cloud Services - 24.07.2023

FX: AUD/USD Post Powell's Rhetoric And Looming Hikes

Kenny Fisher Kenny Fisher 29.08.2022 12:40
The Australian dollar has started the week in negative territory, extending the sharp losses seen on Friday. In the European session, AUD/USD is trading at 0.6849, down 0.63%. US dollar flies after Powell’s rate remarks The US dollar ended the week on a high note, courtesy of Fed Chair’s hawkish speech at the Jackson Hole Symposium on Friday. Powell’s message didn’t veer from what the Fed has been telegraphing the markets for weeks, but this time around investors internalized the message, which sent the equity markets reeling before the weekend. Powell stated that the Fed would continue to use all its tools to fight inflation, acknowledging that high interest rates would remain for some time, and the Fed would be careful not to ease policy prematurely. Significantly, Powell said that the Fed would not change policy based on one or two reports of lower inflation. This statement could well have been a response to the market euphoria about a Fed U-turn in policy after July’s inflation dropped unexpectedly. Powell’s speech was unusually brief, which may have been an attempt to prevent investors from looking for some dovish remarks in the speech and ignoring Powell’s message. The concise speech left no room for ambiguity – the Fed will continue to raise rates until it’s convinced that inflation has peaked and is on the decline. In Australia, retail sales bounced back in July with a strong 1.3% gain, blowing past the estimate of 0.3% and above the 0.2% reading in June. The reading hasn’t helped the Aussie any, as investors continue to digest Powell’s speech at Jackson Hole. The RBA meets next week, and the rebound in retail sales will make it easier for the central bank to remain aggressive and deliver a 50 basis point hike for a fourth straight time. AUD/USD Technical There is resistance at 0.6919, followed by a monthly resistance line at 0.6983 0.6830 is a weak support line. Below, there is support at 0.6766 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie tumbles after hawkish Powell - MarketPulseMarketPulse
At The Close On The New York Stock Exchange Indices Closed Mixed

US Stock Market Strongly Recovers Without Any Predispositions!

InstaForex Analysis InstaForex Analysis 29.08.2022 12:46
Relevance up to 05:00 2022-08-30 UTC+2 Key US stock market indexes, the Dow Jones, the NASDAQ, and the S&P 500, dropped sharply on Friday and closed in negative territory. Over the past month, the US stock market strongly recovered from its decline of the previous several months. This was a rather paradoxical recovery, as there was nothing that could have triggered it. Now, everything falls into place. Friday's only key event on the economic calendar was a speech by Fed chairman Jerome Powell at the meeting in Jackson Hole. The US personal spending and income data, which was slightly below expectations, could not have caused Friday's slump. Powell assured the market that monetary tightening would continue and that a period of high interest rates would be longer than previously expected. He did not give any new information, and it was clear that one single monthly decrease of inflation could not indicate a downtrend. For example, the CPI decreased in May, only to surge in the following months. It remains unclear why investors went long on US stocks. It might have been a capital outflow from the EU to the US - the EU is also expected to enter a recession. However, the recession has already begun in the US - investors might have found the US economy to be more stable amid the difficult geopolitical situation in the EU. In addition, the Federal Reserve is actually taking steps to fight inflation, unlike the ECB. Jerome Powell noted on Friday that the regulator would be closely following macroeconomic data, indicating that the pace of interest rate increase could be slowed down in the near future. However, interest rates would still be hiked from the current level of 2.5%. The Fed funds rate is expected to reach 3.5% at the very least, which would weigh down on US risky assets. The strange upsurge in the US stock market could have possibly been a bull trap, deliberately triggered by major market players to sell their stocks at higher prices. Now, equities and US stock indexes are likely to drop once again and hit new yearly lows. In the meantime, the Fed is likely to increase interest rates at least until the end of 2022. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: Jerome Powell triggers slump in US stock market  
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A Quick Look At Jerome Powell's (Fed) Key Statements At Jackson Hole Meeting

InstaForex Analysis InstaForex Analysis 29.08.2022 12:54
Details of the economic calendar of August 26 Last week ended with a triumphant speech by Federal Reserve Chairman Jerome Powell at the annual economic symposium in Jackson Hole. What was said? Jerome Powell did not say anything new, but only confirmed everything that was said at the July meeting. Main theses: - The central bank will keep the interest rate at high levels, despite a possible recession. - Lowering the inflation rate is good. But not enough to change its monetary policy (MP) now, or give hints about a rate cut in 2023. - History warns against premature easing of policy. - The longer the current period of high inflation continues, the more likely it is that higher inflation expectations will take hold. - We must continue until the job is done. - At the upcoming Fed meeting Fed meeting (21.09.22), the decision will depend on inflation data for August. - Slowing down the pace of rate hikes literally - at some point. Also, Powell did not deny hints that in September there will be a significant increase in interest rates, it all depends on the statistics and the situation. The rhetoric has not changed here. Conclusion Based on the material, it becomes clear that the bearish mood in the US stock market, as well as the bullish mood for the dollar. Analysis of trading charts from August 26 The EURUSD currency pair during Friday's speculations locally jumped above the control mark of 1.0050, but the market participants failed to hold on to the given level. Almost immediately, a reversal occurred, where speculators began to actively increase the volume of dollar positions throughout the Forex market. The GBPUSD currency pair fell by more than 200 points during the inertial downward movement. As a result, the medium-term trend was prolonged, where the quote fell below 1.1650. Such an intense speculative move is caused by the general market mood.     Economic calendar for August 29 Monday is traditionally accompanied by a blank macroeconomic calendar. Important statistics in Europe, the UK and the United States are not expected. It is also worth considering that today is a public holiday in the UK. In this regard, investors and traders will be guided by the information flow of last Friday. Trading plan - EUR/USD August 29 Further weakening of the euro, which will lead to a continuation of the trend, is expected after keeping the price below 0.9900 in a four-hour period. Until then, the risk of a price rebound remains, following the example of August 23 and 24.     Trading plan - GBP/USD August 29 In this situation, there is a characteristic signal that the pound is oversold in short-term time periods. This may lead to a technical rollback towards the previously passed level of 1.1750. At the same time, we cannot rule out a scenario of a further decline in the quote, where technical signals are ignored by speculators. In this case, the inertial course will continue to form in the direction of the local low of 2020.     What is shown on trading charts? The candlestick chart type is white and black graphic rectangles with lines at the top and bottom. With a detailed analysis of each individual candle, you can see its characteristics relative to a particular time period: opening price, closing price, high and lowest price; Horizontal levels are price coordinates, relative to which a stop or a price reversal can occur. In the market, these levels are called support and resistance; Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future; The up/down arrows are landmarks of the possible price direction in the future. Relevance up to 09:00 2022-08-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320153
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

Forex: EUR/USD & GBP/USD - Technical Analysis - 29/08/22

InstaForex Analysis InstaForex Analysis 29.08.2022 13:33
EUR/USD     Higher time frames Last week, the pair hit a new extreme low (0.9952) and closed below the psychological level of 1.0000. If the downtrend goes on, the targets are seen at 0.9000 (psychological level) and 0.8225 (2000 extreme low). In this light, bulls will try to break through 1.0000. Ichimoku Kinko Hyo resistance is currently standing at 1.0052 – 1.0080 – 1.0135 – 1.0190 and 1.0182 (weekly short-term trend).     H4 – H1 The bullish zone is again lost. There is a strong bearish bias as trading is below the key levels of 0.9963 (weekly long-term trend) and 1.0000 (central Pivot level). A change in the balance of power will again shift if the price consolidates above these marks. Resistance is seen at 1.0054 – 1.0143 – 1.0197 (classic Pivot levels). Should bears remain strong, the quote may fall to 0.9911 – 0.9857 – 0.9768 (classic Pivot support). *** GBP/USD     Higher time frames Last week, the pair hit a new extreme low of 1.1759. This level has now turned into resistance and is seen as the nearest bullish target. Today, bears are ready to extend the downtrend, with the target at 1.1411 (2020 low).     H4 – H1 In lower time frames, there is still a strong bearish bias. The quote has tested 1.1678 support. The intraday targets stand at 1.1620 – 1.1509 (classic Pivot levels). The bullish intraday targets are seen at around 1.1789-88 (weekly long-term trend and central Pivot level). *** Indicators used in technical analysis: higher time frames: Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun H1: Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Relevance up to 12:00 2022-08-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320165
Saxo Bank Members Talks About Commodities, Intervention From Japan And More

Commodities Condition After Fed Chair Powell's Speech

Ole Hansen Ole Hansen 29.08.2022 13:39
Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to August 23. A week that saw financial markets trade increasingly nervous with stocks selling off while the dollar and yields rose ahead of Friday’s speech by Federal Reserve Chair Jerome Powell. Developments that triggered fund selling in precious metals while energy and grains was in demand due to a tightening supply outlook Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial.   Link to latest report   This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to August 23. A week that saw financial markets trade increasingly nervous ahead of Friday’s Jackson Hole speech from Federal Reserve Chair Jerome Powell. Stocks sold off while the dollar and bonds yields rose in anticipation of a hawkish message. In the end that was exactly what Powell delivered on Friday when he cautioned about loosening monetary conditions prematurely while flagging the likely need for restrictive monetary policy for longer than the market had priced in to curb high inflation. Commodities The Bloomberg Commodity index rose 1.6% during the reporting week with concerns about the impact on demand from central banks hiking rates to curb economic growth being more than offset by concerns about a tightening supply outlook, especially across energy and key food commodities. Precious metals being the only sector struggling amid the mentioned dollar and yield strength. Overall hedge funds increased their exposure for a fourth consecutive week, this time by 13% to 1.1 million contracts, some 264k above the end of July low point.  Energy: Funds increased bets on rising crude oil prices for the first time in five weeks with the combined long in WTI and Brent being lifted by 22% to 338k lots. This in response to a near +8% rally during the week as the focus returned to a continued tight supply outlook with the gas-to-fuel switching providing an additional layer of support. While the combined gross long was increased by 20k lots, it was a 40k lots capitulation among short sellers that provided the main input to the change.Surging gas prices driving increased demand for diesel helped lift gas oil by 10% and the net long by 24% to 76.5k lots, still only half the 152k lots peak seen from last October. Natural gas traders cut their net short by 66% with the bulk of the change being driven by fresh longs being added. Metals: Precious metals saw renewed selling ahead of Jackson Hole with the stronger dollar and rising yields triggering a fresh round of short selling by funds. The result being a 34% reduction in the gold long to 30k while silver and platinum saw big increases in already established net short positions. Copper found support after China’s government announced fresh initiatives to support an economy struggling with Covid lockdowns and a property sector crisis. The result being a 71% reduction in the net short to -4.8k lots, an 11-week low. Agriculture: The grains sector, led by corn and soybeans, continued to recover from the June to July 25% correction. Buyers bought the sector for a fourth consecutive week with an improved fundamental outlook due to adverse weather in the US and China triggering fresh buying interest. The bulk of the 111k lots increase during this time has been driven by corn with the soybean complex also picking up steam while the two wheat contracts have seen net selling during this time.     Forex The forex market responded to a 1.6% increase in the Dollar index ahead of Jackson Hole by turning broad buyers albeit in small size of dollars against nine IMM currency futures. The two exceptions being GBP and CHF where short covering reduced the net short in both. The euro net short reached 44k lots or €5.5 billion, the highest since March 2020 when the market was in covid panic mode. Overall the gross dollar long reached a three week high at $18 billion, down 24% from last months peak and high for the year at $23.8 billion.   What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming   Source: COT: Crude oil and grains bought despite Jackson Hole jitters
Oil Price Surges Above $91 as Double Bottom Support Holds

What Happened In Jackson Hole Besides The Fed's Powell Speech?

John Hardy John Hardy 29.08.2022 14:14
Summary:  Rates markets suggested that there was little new in the way of guidance from Fed Chair Powell’s speech at Jackson Hole, but the US dollar ripped higher as the backdrop remains the same: this Fed has confirmed that it will continue tightening until something breaks, so what we are seeing is the further progress toward that breaking point. In an interesting twist, a paper delivered on Saturday at Jackson Hole suggests that the Fed may have a hard time executing shrinking its balance sheet as intended. FX Trading focus: Jackson Hole wasn’t just Powell’s speech… If we have a look at the reaction in Fed expectations from Friday’s Fed Chair Powell speech at Jackson Hole, there was no major market takeaway. During the speech, there was a trivial marking down of expectations as Chair Powell emphasized the “totality” of data in setting the appropriate rate at the September meeting. (And 90 minutes before his speech, the July PCE inflation data was out a tad softer than expected, while the final University of Michigan sentiment survey for August saw longer inflation expectations 0.1% lower). But for that September 21 FOMC rate decision, the payrolls and earnings data this Friday and the Sep 13th CPI release will weigh more heavily. Somewhat more importantly, Powell underlined the importance of ensuring that The Fed’s policy remains persistent enough to ensure that the inflationary cycle has abated. One of the key passages worth highlighting is “Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy.” Powell then went on to invoke Paul Volcker and his fight with recurring bouts of high inflation in the 1970’s and early 1980’s. This did see the market adjusting Fed rate expectations higher for mid next year and later, although that was largely reversed by the end of the day Friday on a (suggesting a difficult to manage reflexivity dissonance: more Fed tightening means worse financial conditions, which means the Fed might back off, which is supportive of financial conditions/sentiment? Argh…). One very important factor to note is that Fed rate expectations were marked sharply higher from the outset overnight, perhaps as a paper delivered at Jackson Hole on Saturday that suggests that any Fed attempt to go full force with quantitative tightening will prove difficult (requiring an emphasis on using the Fed funds rate as the primary mechanism for policy adjustments?). A Bloomberg article discusses the paper. If the Fed has to soft-pedal balance sheet management from here, could we suddenly find that peak anticipated Fed tightening (QT and rate hikes taken in aggregate) is already in the rear view mirror? Intriguing proposition, but way too early hours/days to make any determination, as the Fed may try forging ahead on QT, paper or none. Chart: USDJPYWatching USDJPY closely this week to see if US data takes US treasury yields higher still – especially at the longer end of the US yield curve, which could serve to renew the pressure on the Bank of Japan as it insists on maintaining the yield-curve-control policy. Arguably, as long as the longer end of the US yield curve is anchored below the June highs, the pair doesn’t have particularly cause to run higher unless there is a USD liquidity problem not connected to yield volatility. And if we get weak US data this week through Friday’s jobs and earnings report, we might be instead looking at a “double top” scenario. The 139-140.00 zone looks important this week. Source: Saxo Group For Europe, any little helps, and we have natural gas prices backing off sharply today, with Germany ahead of target in rebuilding its storage and the German economy minister called for an overhaul of the EU power market to drop prices (meaning rationing and price fixing?? In the first instance, helps to ease the shock, but not in the longer run if investment in the capacity needed to bring long term real energy prices down is scared away by the risk of public interference.) Elsewhere, besides natural gas prices coming off, we have also seen a few ECB officials talking tough enough to pull ECB yield expectations sharply higher since Friday, with the ECB’s Isabel Schnabel speaking at the Fed’s Jackson Hole conference at the weekend, exhorting her colleagues “to signal their strong determination to bring inflation back to target quickly.” The meeting next Thursday is priced for over 60 basis points, with almost another 100 basis points (!) on top of that priced through the December ECB meeting. ECB Chief Economist Lane, usually one of the more cautious voices on the ECB, will speak this afternoon. Table: FX Board of G10 and CNH trend evolution and strength.USD strongest among G-10 currencies – no surprise there, but really needs to stick this move to remain so across the board (below parity in EURUSD, above 137.50 in USDJPY, above 1.3000 in USDCAD, below perhaps 0.6900 in AUDUSD, etc… Note the big swing higher in EUR momentum, with a few thoughts on individual EUR pairs below. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.EURCAD and EURAUD are two euro crosses that have turned sharply higher as risk sentiment wears harder on the smaller currencies – too early to tell if this is the beginning of something, but the moves come at interesting levels. Note Also EURGBP following through higher Friday and following through today. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1300 – ECB Chief Economist Lane to speak 1430 – US Aug. Dallas Fed Manufacturing survey 1815 – US Fed Vice Chair Brainard to speak 2330 – Japan Jul. Jobless Rate 0130 – Australia Jul. Building Approvals Source: FX Update: Jackson Hole was more than Powell’s speech.
USD/CHF: US Dollar Went Up Thanks To Jerome Powell's Statement About Interest Rates, Which Is Not In Favor Of Gold

USD/CHF: US Dollar Went Up Thanks To Jerome Powell's Statement About Interest Rates, Which Is Not In Favor Of Gold

Jing Ren Jing Ren 29.08.2022 08:27
USDCHF keeps high ground The US dollar rallied after Powell reaffirmed that the Fed would raise rates as high as needed. A rally above the daily resistance at 0.9640 has flushed out short-term sellers. This could be the start of a bullish continuation after the pair went through a deep retracement of its April extension. As sentiment shifts to a more upbeat tone, a close above 0.9740 could attract momentum buyers and carry the greenback to July’s peak at 0.9870. 0.9570 is the closest support and 0.9500 is the bulls’ second line of defence. XAUUSD struggles for support Gold remains overshadowed by the prospect of higher interest rates. The price has been struggling to find buyers after it hit resistance at the psychological level of 1800, which was also a former demand zone on the daily chart. A short-lived bounce to 1765 met stiff selling pressure, suggesting that the bears have doubled down. 1739 is a support-turned-resistance after its breach left bullion vulnerable to a new round of sell-off. 1705 at the base of a breakout in late July would be the next level to see if there is enough long interest left. US 30 breaks lower Equities tumbled after the US Fed shattered hopes that policymakers might dial back the tightening. The Dow Jones 30 lost its momentum after hitting a four-month high at 34300. An initial drop below 33850 led some leveraged positions to close out. Then the selling intensified after the index lost ground at 32800. 31700 could be the next stop. An oversold RSI may cause a temporary bounce and 32900 has become a fresh supply zone where the bears could be expected to fade the next rebound.
The US Dollar To The Chinese Yuan Is Upside. The Potential Buying Opportunities

Forex: USD/CNY. Dynamic Growth And The Following

InstaForex Analysis InstaForex Analysis 29.08.2022 14:37
Relevance up to 13:00 2022-08-30 UTC+2 Technical analysis:   USD/CNY has been trading upside as I expected. The price reached my first upside objective at 6.910 and is heading towards second upside target. Trading recommendation: Due to the strong upside momentum and no sign for the reversal, I see further growth. Watch for potential buying opportunities on the intraday dips with the upside objective at 7.080. MACD oscillator is showing fresh new upside momentum, which is good sign for further growth. Key support is set at the price of 6.830 Source: Forex Analysis & Reviews: USD/CNY analysis for August 29, 2022 - First upside target has been reached, second target in the playt at 73080
Analysis Of The EUR/JPY Pair Movement

Forex: USD/JPY Is Up To 139! What Are The Possibilities?

Kenny Fisher Kenny Fisher 29.08.2022 14:57
The Japanese yen has started the week with sharp losses, with USD/JPY rising as high as 139.00 earlier today. In the European session, USD/JPY is trading at 138.52, up 0.75%. The month of August can’t end soon enough for the yen, as USD/JPY has climbed 4.0%. The yen fell 0.78% on Friday, as Fed Chair Powell delivered a clear, no-nonsense message to the markets from scenic Jackson Hole. Dollar soars after hawkish speech from Powell Powell’s speech essentially reiterated what the Fed has been saying for weeks, but the markets reacted sharply, with equities tumbling and the US dollar recording strong gains. Investors finally acknowledged that the Fed means business and will not U-turn on policy, even if inflation drops in one or two reports. Powell appeared determined to avoid any repeats of the market euphoria after inflation declined unexpectedly in July, which raised speculation that the Fed was set to make a dovish pivot. Powell reiterated that the Fed would continue to use all its tools to fight inflation, acknowledging that high interest rates would remain for some time, and the Fed would be careful not to ease policy prematurely. The highly-anticipated speech was unusually brief, which may have been an attempt to prevent investors from looking for some dovish remarks in the speech and ignoring the gist of the speech. Powell used strong language to get his message across – saying that Fed tightening would cause “some pain” to the economy, and avoiding soothing terminology, such as “soft landing”. The Fed plans to continue to raise rates until it’s convinced that inflation has peaked and is on the decline and judging by the market’s reaction, investors heard Powell’s message loud and clear. US Treasury yields have moved higher, with the 2-year yield rising to 3.445% today, up from 3.032% on Friday, prior to Powell’s speech. This upward movement is weighing on the yen, which is sensitive to the US/Japan rate differential. If the upward trend continues, we could see an assault on the symbolic 140 level. . USD/JPY Technical USD/JPY has broken above resistance at 1.3759 and 1.3822. Above, there is resistance at 1.3891. 1.3701 and 1.3632 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.   Source: Yen slumps as Powell pledges tighter policy
Short-term analysis - Euro to US dollar by InstaForex - 31/10/22

EUR/USD Could Be Shaken This Week! Eurozone Inflation Is About To Be Released

Jing Ren Jing Ren 29.08.2022 15:01
EuroZone CPI and EU Market Turmoil Tomorrow, Germany reports CPI figures for July. That gives us a first look at what to expect from inflation data out of the EuroZone to be released on Wednesday. The consensus is for another increase, which would help firm up the case for another 50bps hike by the BCE at their meeting in two weeks. This is the last major inflation data the central bank will have before they decide on what to do with monetary policy. Last week, the ECB released minutes from their July meeting, showing they intended to keep tightening. That also implies that a "double" rate hike is likely. Unless there is a major shift in the data, that would catch everyone by surprise. The expectation is for inflation to get worse in the shared economy, both in the headline number and core reading. Read more: A Quick Look At Jerome Powell's (Fed) Key Statements At Jackson Hole Meeting| FXMAG.COM Starting with Germany The largest economy in the EuroZone is often seen as a bellwether for the rest of the shared economy. This is particularly relevant around the inflation figure if it is rising, since as a rule, Germany tends to have more fiscal discipline. If German inflation is rising, chances are that inflation in the rest of Europe is rising even faster. If prices were to get under control, most likely that would be seen in Germany first. German CPI change for August is expected to show an annual rate of 7.8%, higher than the 7.5% reported in July. Germany has a more regulated energy sector, and is less likely to see the benefits from lower fuel prices that helped reduce inflation in the US during the same period. At the same time, German regulators also allowed for energy companies to pass on more of the cost to consumers. Where there could be good news is that monthly inflation is expected to slow to 0.4% compared to 0.9% in the prior month. What's driving the market Wednesday could be a pretty lively day for the markets, because we get CPI data and PMI figures through the course of the day. We'll get into more detail on the PMI numbers tomorrow. For now, inflation is likely to have the bigger impact on the EURUSD as it is driving the main divergence between the currencies of the two largest economies. Last month, EU inflation already surpassed inflation in the US. Meanwhile, the interest rate gap between the two economies continues to grow, as the Fed has been more aggressive in taming inflation. That means real yields in the US have been increasing, while real yields in the Euro have been decreasing. The fluctuations in inflation are bigger than the interest rate policy moves, meaning that inflation is driving the yield spread. Which, in turn, drives the relative price dynamics of the EURUSD. As long as real rates are weakening in the Euro, the pair is likely to be under pressure, and find it hard to get back above parity. The data to pay attention to The EuroZone is expected to report a modest increase in CPI change to 9.0% from 8.9% prior. The core rate is expected to rise by a similar measure to 4.1% from 4.0%, double the target rate. To make matters more difficult for the ECB, the monthly inflation rate is expected to accelerate to 0.6% from 0.1% prior. Inflation rising faster on the monthly basis, and the change being seen in the core numbers, implies a more structural problem. The market already expects the ECB to raise rates, so higher inflation likely won't be all that much of a surprise. But if CPI change were below expectations, then it could have some monetary policy implications.
What's ahead of Euro against greenback today? Let's look at Stefan Doll's review

Forex: Could EUR/USD (Euro To US Dollar) Reach 1.020!?

InstaForex Analysis InstaForex Analysis 29.08.2022 15:51
Overview - EUR/USD: The bullish trend is currently very strong on The EUR/USD pair. As long as the price remains above the support levels of 0.9972, you could try to benefit from the growth. The first bullish objective is located at the price of 1.0052. The bullish momentum would be boosted by a break in this resistance (1.0052). The hourly chart is currently still bullish. At the same time, some stabilization tendencies are visible between 0.9972 and 1.0088. Together with the relatively large distance to the fast-rising 100-day moving average (0.9972), there are some arguments for a relief rally in coming months on the table. The EUR/USD pair is at highest against the dollar around the spot of 1 USD since last week. The EUR/USD pair is inside in upward channel. Since three weeks The EUR/USD pair decreased within an up channel, for that The EUR/USD pair its new highest 1.0052. Consequently, the first support is set at the level of 0.9972. Hence, the market is likely to show signs of a bullish trend around the area of 0.9972 - 1 USD. RSI RSI is seeing major support above 65% and a bullish divergence vs price also signals that a reversal is impending. According to the previous events the price is expected to remain between 1 USD and 1.0137 levels. Buyers would then use the next resistance located at 1.0052 as an objective. Crossing it would then enable buyers to target 1.0088 (the double top - last bullish week). Be careful, given the powerful bullish rally underway, excesses could lead to a possible correction in the short term. If this is the case, remember that trading against the trend may be riskier. It would seem more appropriate to wait for a signal indicating reversal of the trend. The EUR/USD pair has plunged up for a fresh two weeks high. Prices pushed above a key retracement from a Fibonacci setup that spans from the lowest price of 1 USD (38.2% of Fibonacci on the hourly chart), for that buyers pulled the bid back-above that level by the end of the week. Last week, the EUR/USD pair traded up and closed the day in the red area near the price of 0.9901. Today it rose a little, rising above 0.9972. If the pair succeeds in passing through the level of 1.0052, the market will indicate the bullish opportunity above the level of 1.0052 in order to reach the second target at 1.0088. In the very short term the general bullish sentiment is confirmed by technical indicators. Therefore, a small upwards rebound in the very short term could occur in case of excessive bearish movements. Trading recommendations : The trend is still bullish as long as the price of 0.9972 is not broken. Thereupon, it would be wise to buy above the price of at 0.9972 with the primary target at 1.0088. Then, the EUR/USD pair will continue towards the second target at 1.0137. We should see the pair climbing towards the next target of 1.0200. The pair will move upwards continuing the development of the bullish trend to the level 1.0200 in coming days. Conclusion : The EUR/USD pair increased within an uptrend channel from the prices of 0.9901 and 1$ since a week. The bulls must break through 1.0137 in order to resume the uptrend. Relevance up to 15:00 2022-08-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/290403
NatWest Group Reports Strong H1 2023 Profits Amid Rising Economic Concerns

How Powell's Speech Affected On Euro (EUR) And Pound Sterling (GBP). Let's See!

InstaForex Analysis InstaForex Analysis 29.08.2022 16:40
Relevance up to 10:00 2022-08-30 UTC+2 Both the euro and the pound sterling dropped after Jerome Powell announced that the Fed would continue raising the key interest rate. What is more, the US regulator is planning to keep interest rates high for some time in order to combat inflation. Jerome Powell is absolutely sure that the Fed will not change its monetary policy in the near future. "Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy," Powell stated. It is obvious that the Fed's key aim is to lower inflation to the targeted level of 2% regardless of the negative influence on consumers and enterprises and a possible recession. The US dollar began actively gaining in value amid the possibility of another significant rate hike in the next month. It is obvious that traders take decisions amid expectations, trying to price in the event before it takes place. "Our decision at the September meeting will depend on the totality of the incoming data and the evolving outlook," Powell pinpointed. Against the backdrop, the yield of two-year Treasury bonds increased to 3.44%. Investors foresaw such announcements and priced in the hike of at least 0.5% at the meeting on September 20-21. The highest possible raise was seen at 0.75%. After the speech, the likelihood of both variants remained the same. In other words, the regulator's zero intention to cut the key interest rate in 2023 considerably supported the greenback.After such confident statements, Jerome Powell will have to prove his intention by another hike of 75 basis points. Otherwise, traders may think that the Fed is gradually switching to a looser policy, which may make it more challenging to return inflation to 2.0%. "Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance," Fed's chair said. "Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses," he added. Notably, according to the Fed's forecasts, the key interest rate will be hiked to 3.4% by the end of the year and to 3.8% by the end of 2023. Jerome Powell also reminded us that in September, the regulator would hardly change its plans. Some other Fed representatives are also backing up the monetary policy tightening. Federal Reserve Bank of Kansas City President Esther George emphasized that the key interest rate could be higher than markets expected. "We have to get interest rates higher to slow down demand and bring inflation back to our target," she said. She neither excludes a jump to 4.0%. From the technical point of view, the euro/dollar has every chance to slump even deeper. Bulls should protect 0.9949. Otherwise, the trading instrument will hardly recover. If the price goes above 0.9949, buyers will become more confident, thus allowing the pair to return to the parity level and then climb to 1.0030. The farthest target is located at 1.0070. If the euro continues falling, buyers are likely to become active near 0.9900. However, if they fail to protect this level, the upward correction will hardly become possible. Since whispers about the continuation of the downtrend may push the price to 0.9860 or even to 0.9820. The pound sterling continues losing value against the US dollar very rapidly. It does not have reasons for an upward correction. Buyers should do their best to consolidate above 1.1630, the nearest support level. Otherwise, we will see a new massive sell-off that will push the price to 1.1570 and 1.1490. A breakout of these levels will allow the pair to slide to 1.1420. A correction will become possible if the price settles above 1.1680 to jump to 1.1730 and 1.1790. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: Fed may raise benchmark rate to 4.0%
Unraveling the Resilience: US Growth, Corporate Debt, and Market Surprises in 2023

Bullish And Bearish Experts Voted. The Result Is Here!

InstaForex Analysis InstaForex Analysis 29.08.2022 16:54
Relevance up to 09:00 2022-08-31 UTC+2 The Fed's monetary policy remains aggressive, putting pressure on gold following the long-anticipated speech by Fed chairman Jerome Powell at the central bank symposium in Jackson Hole, Wyoming. Powell reiterated that interest rates hikes must continue as inflation remains the biggest threat to the economy. However, some analysts believe that falling inflationary pressure could prompt markets to price in less aggressive moves from the Federal Reserve, which would weaken the US dollar and give support to gold. According to the data released by the US Commerce Department on Friday, its core Personal Consumption Expenditures Index (PCE) increased by 4.6% in July, down from June's annual increase of 4.8%. The CME FedWatch Tool is showing that markets are currently split 50/50 on whether the Federal Reserve would increase interest rates by 50 or 75 basis points in September. A weekly survey by Kitco indicates that Wall Street is largely mixed on gold. Out of 16 surveyed experts, 6 (38%) were bullish, 6 were bearish, and 4 (25%) were neutral. Retail investors were more optimistic, with 53% of respondents seeing gold prices rise. 27% expected gold to drop, while 20% were neutral. In total, 561 votes were cast. Although market sentiment doesn't create a clear path for gold, US interest rates remain the most important factor for the precious metal. If inflation continues to decline, the Federal Reserve will begin to slow down the pace of interest rates hikes. Falling gold prices at the end of last week have led to mixed sentiment in the market. Colin Cieszynski, chief market strategist at SIA Wealth Management Inc, said he is bullish on gold next week as Powell's comments didn't add anything new to the current outlook. "He didn't really say much that was new and noteworthy enough to push treasury yields or USD higher in the short term," Cieszynski said. "The US dollar is looking exhausted technically as it is and due for a correction, which could take some of the recent pressure off of gold." Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Source: Forex Analysis & Reviews: Gold faces difficulties after Jerome Powell's remarks in Jackson Hole
Gold Has A Chance For The Rejection Of The Support

Forex: Gold Situation. Bulls Are Making A Comeback!

InstaForex Analysis InstaForex Analysis 29.08.2022 17:22
Relevance up to 16:00 2022-08-30 UTC+2 Gold price ended last week under pressure with price breaking below the Daily Kumo (cloud). This week Gold price started again under heavy pressure making new lower lows around $1,720, but bulls made a come back and are now reclaiming $1,740. Gold bulls are trying to re-enter the Kumo. This would turn Daily trend to neutral from bearish. It is important to see a daily close above $1,740 as this could lead to a bigger bounce towards $1,780. The tenkan-sen (red line indicator) has already crossed below the kijun-sen (yellow line indicator). This is a bearish sign. On the other hand the daily candlestick in Gold suggests that bulls are strong around $1,720 and that long upper tail candlestick is a sign of a bullish reversal. Gold is showing reversal signs the day we reached the 61.8% Fibonacci retracement of the entire rise. All bulls want to see now is for price to start forming higher highs and higher lows. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: Ichimoku cloud indicator analysis on Gold for August 29th, 2022.  
What's Potentially Ahead Of US Dollar Index (DXY)?

What's Potentially Ahead Of US Dollar Index (DXY)?

Jing Ren Jing Ren 29.08.2022 10:21
The 1H timeframe of the DXY index suggests the completion of a global corrective trend, which has taken the form of a triple zigzag consisting of five cycle waves w-x-y-x-z. Thus, the market is currently at the stage of reversal, that is, the formation of the initial part of a new bearish trend may soon begin. It is assumed that the bears are starting to build the first impulse sub-wave of the potential standard zigzag â’¶-â’·-â’¸. The end of the impulse â’¶ is possible just below the minimum of 104.63, which is marked by a minute fourth correction. An approximate scheme of possible future movement is shown on the chart. Alternative scenario... In an alternative scenario, the formation of a cycle triple zigzag is not yet fully completed. Most likely, at the level of 104.69, the bearish cycle wave x was completed, which took the form of a standard zigzag â’¶-â’·-â’¸ of the primary degree. Then the market turned around, and an upward impulse price movement began in the initial part of the wave z. The wave z can take the form of a zigzag â’¶-â’·-â’¸, and now a sub-wave â’¶ is being formed. The entire wave z may complete its pattern near 116.80. At that level, it will be at the 61.8% Fibonacci extension of wave y.
📈 Tech Giants Soar, 💵 Dollar Plummets! Disney-Charter Truce, Wall Street's AI Warning!

What A Surprise! Euro (EUR), As US Dollar (USD) Has Been Supported By Hawkish Rhetoric During Jackson Hole Meeting

Kenny Fisher Kenny Fisher 29.08.2022 21:36
EUR/USD has edged higher today and is trading at the parity line. In the North American sesssion, EUR/USD is trading at 1.0019, up 0.57%. Euro bucks the trend, rises against greenback The US dollar has posted sharp gains against the major currencies, as Fed Chair Powell’s hawkish speech at Jackson Hole left no doubt that the Fed will continue to tighten rates in its titanic battle with surging inflation. The euro, however, bucked the trend and posted strong gains on Friday but ultimately pared these gains, before moving higher once again today. The upward movement has been driven by hawkish comments at Jackson Hole from senior ECB members, including Isabel Schnabel, who is well-known for being a hawk. Shnabel said that the likelihood of high inflation becoming entrenched in expectations was “uncomfortably high” and argued that “central banks need to act forcefully”. Latvian central bank Governor Martins Kazak was even more specific, stating that the ECB should be open to discussing 50 or 75 basis point moves. The ECB has raised rates but only to zero, well below the neutral rate of around 1.5%. This means that ECB policy continues to stimulate the economy, at a time when inflation and inflation expectations continue to move higher. The ECB will be hard-pressed to find the balance of raising rates without tipping the weak eurozone economy into a recession. Overshadowed by Powell’s hawkish speech at Jackson Hole was a host of weak US releases. Personal income and spending data both missed expectations, while the Core PCE Index, the Fed’s preferred inflation gauge, fell to 0.1% in July MoM, down from 0.6% in June and shy of the estimate of 0.3%. The weak numbers mean that the Fed may have to ease back on rate hikes, despite Powell’s hawkish speech, as the data continue to indicate that the economy is slowing in response to the Fed’s tightening. If upcoming releases indicate that the economy is losing steam, the dollar will be under pressure. EUR/USD Technical EUR/USD has support at 0.9985 and 0.9880 There is resistance at 1.0068 and 1.0173 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro rises to parity as ECB hints at 75bp hike - MarketPulseMarketPulse
Reserve Bank of New Zealand: Kenny Fisher says he expects a 25bp rate hike on May 24th

NZD/USD: NZD Plunged! US Dollar Was Simply Boosted By Rocket Propeller!

Kenny Fisher Kenny Fisher 29.08.2022 21:41
NZD/USD has stabilized today after ending the week with sharp losses. In the North American session, NZD/USD is trading at 0.6149, up 0.22% on the day. Earlier in the day, NZD/USD touched a low of 0.6102, its lowest level since July 14th. Powell’s speech hammers the New Zealand dollar The US dollar ended the week with sharp gains against the major currencies, with the exception of the euro. The New Zealand dollar took it on the chin, as NZD/USD fell 1.43% on Friday. The catalyst for the US dollar’s upward swing was a hawkish speech from Fed Chair Powell at the Jackson Hole Symposium. Powell’s message didn’t contain anything we haven’t heard in recent weeks from the Fed, but this time around, investors internalized Powell’s no-nonsense message that the Fed plans to stay aggressive until the fight against inflation is won. Powell stressed that the Fed would be vigilant not to ease policy prematurely, and added that the Fed would not change policy based on one or two reports of lower inflation. This statement could well have been a warning to the markets not to expect a U-turn in policy if inflation drops, as was the case following the July inflation report. Fed's Governor speech Powell’s speech was unusually brief, which may have been an attempt to prevent investors from looking for some dovish remarks in the speech and ignoring Powell’s message. The concise speech left no room for ambiguity – the Fed will continue to raise rates until it’s convinced that inflation has peaked and is on the decline. Powell’s choice of language was telling – he said that the current policy would cause “some pain”, a phrase which the markets undoubtedly did not want to hear. Powell also avoided language that the markets might have construed as being dovish, such as a “soft recovery”. The head of the Reserve Bank of New Zealand, Adrian Orr, was also in attendance at Jackson Hole. Orr noted that the RBNZ’s policy of higher rates had slowed the economy and warned that economic growth could be “anemic”. Orr said at least two more rate hikes were likely, at which stage the RBNZ hoped to determine rate policy based on economic data. NZD/USD Technical 0.6174 is a weak resistance line. 0.6277 is the next line of resistance There is support at 0.6057 and 0.5979 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZ dollar falls to 6-week low - MarketPulseMarketPulse
Forex: Euro On Holidays. Do Not Count Your Chickens Before They Are Hatched!

Forex: Euro On Vacations. Do Not Count Your Chickens Before They Are Hatched!

Kim Cramer Larsson Kim Cramer Larsson 30.08.2022 08:53
US 2-years Treasury yields is testing June peak at 3.45 forming what looks like an Ascending triangle like pattern. If yields close above 3.45 first target is 3.73 but a move to around 3.90-4.00% is likely.If rejected at the 3.45 we could see US 2-year yields test the lower rising trendline.However, RSI is above 60 with no divergence indicating higher levels are the most likely scenario Source: Bloomberg. US 10-years Treasury yields is struggling to break the 3.11 resistance just peaking above to be rejected at the 0.618 retracement at 3.13. Now being rejected twice the past week it is having another go today. If closing above 3.13 there is some resistance at 3.27 but June peak at 3.50 is likely to be tested.However, the US 10-years is moving in what looks like a rising wedge meaning if it is once again rejected and closes below 3%, a correction down to around the 0.618 retracement at 2.76 is likely. However, RSI is above 60 and no divergence indication yields will break higher Source: Saxo Group The US 10-years Treasury future has broken below 0.618 retracement and support at 117 5/32. If it closes below, it has further confirmed the downtrend and is on course to test June lows at around 114 7/32. Some support at around 116   Source: Saxo Group Euro Bunds gapped lower this morning below key support at 149.75 testing 0.618 retracement at 147.94. RSI is below 40 and no divergence indicating lower levels. We could see buyers trying to close the gap but the former support at 149.75 is now a strong resistance.Some support at around 145.16 Source: Saxo Group   Source: Technical Update - US 2 and 10-years Treasury yields testing key resistance levels. Euro Bund future hit by heavy selling  
A Breakthrough! Japanese Yen (JPY) Helped By Data, Australian Dollar (AUD) Went Up Post Retail Sales Print

A Breakthrough! Japanese Yen (JPY) Helped By Data, Australian Dollar (AUD) Went Up Post Retail Sales Print

Jing Ren Jing Ren 30.08.2022 08:27
USDJPY hits major resistance The Japanese yen steadied after July’s unemployment met expectations. A close above 138.80 has put the greenback right under last July’s peak at 139.40, hitting a 24-year high. A bullish breakout would attract more buying interests and resume the uptrend in the medium-term. In the meantime, an overbought RSI may cause a limited pullback as intraday traders take profit in the supply zone. Fresh selling as a last attempt by the short side might drive the pair lower. 136.30 is a key support to keep the momentum going. Read next: Apple Stock Price Plunged On Friday! When Is The iPhone 14 Coming Out? iPhone 14 Is Expected To Be Announced Next Week! | FXMAG.COM AUDUSD sees limited rebound The Australian dollar bounced higher after upbeat retail sales in July. Its previous failed attempt to clear the psychological level of 0.7000 led to a new round of sell-off below 0.6850. This is a sign that the bears may have regained control of the price action. A bearish MA cross on the daily chart may further weigh on sentiment. After the RSI sank into oversold territory, some bargain hunting tried to push back. However, stiff selling pressure could be expected near 0.7000. 0.6800 would be the next stop when volatility returns. Read next: Bitcoin price could slide to $17,500 as regulators consider tightening rules around leverage| FXMAG.COM UK 100 breaks lower Equities remain under pressure as investors brace for more aggressive hikes from central banks. The FTSE 100 lost its momentum as it came closer to the triple top (7650) from the daily chart. An initial fall below 7460 triggered some profit-taking. Then a break below 7400 invalidated the latest rebound and forced buyers to bail out. 7310 is the closest support and the RSI’s oversold condition may cause a limited bounce. The index could be vulnerable to another round of liquidation unless the bulls manage to reclaim 7500.
The Japanese Yen Retreats as USD/JPY Gains Momentum

After The Speech Global Equity Markets Are Not Risking Anymore! Nasdaq 100 Below Its 50-day Average!

Saxo Strategy Team Saxo Strategy Team 30.08.2022 09:06
Summary:  The rise in U.S. treasury yields pressured growth stocks with the Nasdaq 100 falling below its 50-day average, which puts it back in a precarious position. Fed Kashkari said he was glad to see the markets fell after Chair Powell’s Jackson Hole speech to tighten financial conditions. Global equity markets have certainly got the message and are in a risk-off mood. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  US Stocks fell for the second day, but modestly compared to Friday’s sell-off that was triggered by Fed Chair Powell vowing rates will stay higher for longer to cool runaway inflation while suggesting there will be no pivot to cutting rates in 2023, S&P 500 -0.7%, Nasdaq 100 -1%.  Minneapolis Fed president Kashkari said that “he certainly was not exited to see the stock market rallying” after the last FOMC meeting and “people now understand the seriousness of our commitment to getting inflation back down to 2%.” Tech stocks dragged the markets lower, Nvidia -2.8%, Tesla -1.1%.  Twitter (TWTR:xnys) dropped 1.1% after Elon Musk ad subpoenaed a Twitter whistleblower to share information.  Meanwhile, gains in value stocks somewhat held up the market last night, with the oil, gas, and agricultural sectors rising 1-2%. It comes as Oil prices rose 4% on Monday as potential OPEC+ output cuts and conflict in Libya helped to offset a strong U.S. dollar. While the Ag sectors were supported higher after the wheat price jumped 4.9% and corn rose 2.2% (at its highest level in 2 months) after heat damage worsened US crops more than expected. As such it appears markets are back to their risk off modus operandi, selling down growth names (which are based on future earnings which gets diminished amid higher rates), and instead, buying value (commodities), with rising cashflows. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) US treasury yield rose across the curve.  The 2-year yield rose to as high as 3.48% during the day, the highest level since November 2007, before paring the rise to settle 3bps higher at 3.42%.  The 10-year yield rose 7bps to 3.11%,  taking the 2-10 year curve steepened by 3bps to -32bps.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland China equities traded relatively calm in the midst of a large post-Jackson Hole selloff in the U.S., Hang Seng Index -0.7%, CSI 300 -0.4%.  The deal made between the U.S. and China regulators last Friday regarding access to audit work papers did not trigger much new buying in China internet stocks on Monday as it had already been well wired before the official announcement.  Further, there is much remained to be seen if the agreement will be implemented to the satisfaction of both sides as the U.S. and China regulators seem to differ in their interpretation.  Meituan (03690:xhkg) gained 2.6% after reporting solid Q2 results, which Hang Seng Tech Index dropped 1.2%. China’s industrial profits slumped to contracting 14.5% YoY from (v.s. +1.1% in June) and a fall of 11.3% sequentially from June.  The weakness was mainly driven by upstream sectors.  Coal mining stocks initially slumped but rallied later in the days and finished higher in Hong Kong and mainland bourses.   Geely (00175:xhkg) rose 1.7% as the automaker’s Zeekr line of EVs will be the first to use a new battery from CATL that provides over 1,000km range per charge.  SMIC (00981:xhkg), -2.1%, announced spending USD7.5 billion to build a plant in Tianjin to make 12-inch wafers. Chinese banks traded weak as Reuters reported that China’s central bank and bank regulators had been making calls to banks to push them to make more lending to support the real economy than put their funds in financial investments.  USDJPY weakness to bring back pressure on Bank of Japan USDJPY is back to testing its record July highs despite little change in money market pricing of the Fed rate path following Powell’s hawkish speech at Jackson Hole. The peak Fed funds rate is still priced in at 3.8%, while some of the Fed speakers have started to suggest 4%+ levels that may be needed to combat inflation. This brings the September dot plot in focus, but we get the jobs and CPI data before that as well. Any further upward re-pricing of the Fed path, if resulting in gains in US 10-year yields, could very well take USDJPY to new highs with Japanese yields still remaining capped due to the Bank of Japan’s yield curve control policy. If however, US data underwhelms, the room on the downside for USDJPY is tremendous. USDCNH made a new high at 6.9327 Wider interest rate differentials between the U.S. dollar and the renminbi and a weaker economic outlook in China continued to pressure the renminbi weaker. USDCNH surged to as high as 6.9327 on Monday during Asian hours before paring it as the greenback fell against most of the G10 and emerging market currencies in London hours.  In Asia this morning, USDCNH is trading at 6.9066. Crude oil prices (CLU2 & LCOV2) Crude oil prices saw their best day in a month amid threats of a decline in supply from OPEC cuts and production outages in Libya. Brent futures rose above $105/barrel although some softening was seen in the Asian morning, while WTI rose to $97/barrel. This follows news from last week that Kazakhstan’s exports of crude may be impacted for months because of damage to its port facility. Meanwhile, negotiations between Iran and the US over the revival of the 2015 nuclear deal could drag on for weeks, easing fears of an imminent surge in supply. What to consider? The volatility index rises to its highest level in 9 weeks, suggesting more volatility is coming. And the fundamentals back this up with US yields spiking After the Fed’s 8-minute Jackson Hole speech, the volatility index surged to its highest level in 9-weeks, forming an uptrend pattern, suggesting more market volatility is ahead. We believe the market is only just beginning to price in higher for longer interest rates and inflation. The bond market is affirming this with yields spiking again. But what is also alarming, is that the futures market is still pricing in that the Fed will cut rates in 2023. This is despite the Fed suggesting it won’t pivot to cutting rates. The other issue is keeping markets on notice is that; if the Fed makes more hawkish remarks and hikes rates more than expected, then the market will face further volatility, and selling in growth sectors and names that are interest rate sensitive, are likely to come under pressure. Shell CEO cautions against a prolonged European gas crisis Shell CEO Ben van Beurden gave comments from Norway’s ONS conference, suggesting that Europe could face gas shortages for a number of winters. This disproves reports suggesting that Europe has already built reserves for the winter demand, and reaffirms our belief that a move to broad-based energy supply will continue to be top of mind in the long run. In the near term, demand destruction appears to be the only possible solution, and Van Beurden stressed need for efficiency savings as well as rationing. Eurozone inflation and Nord Stream maintenance will be key for the ECB There is no question on the direction in Eurozone inflation, given the extensive reports on gas prices and power costs in the region over the last few days. However, some softening may be warranted after an all-time high of 8.9% was reached on the Eurozone inflation print in July, given the easing in pump prices in August. Still, gas supply concerns continue to remain top-of-mind for Germany with Gazprom announcing another leg of maintenance for the Nord Stream pipeline this week. Food prices are also seeing another pickup, and further gains in the headline print in Q4 cannot be ruled out. Calls for a 75 basis points rate hike by the European Central Bank have already picked up, and these could gain further traction if we see a strong CPI print this week. However, if Nord Stream supply comes back on time after its 3-day scheduled maintenance, and with some potential increases in capacity as has been hinted, that could mean a substantial decline in European gas prices and relief in utility costs in the months to come. ECB Lane tones dials back on jumbo rate hike expectations ECB chief economist Lane was on the wires on Monday, and hinted at a more steady pace of rate hikes in a “step-by-step” manner rather than jumbo rate hikes. This appears to be a pushback against calls for a 75bps rate hike at the September meeting, as he made the case to allow the financial system to absorb the rate changes. Moreover, on inflation, Lane said long-term inflation expectations remain close to the two per cent target, while near-term inflation expectations are quite elevated. BYD reported 1H earnings at the high end of the preannounced range Chinse auto maker BYD (01211) reported 1H revenues growing 66% YoY to RMB 151 billion.  In terms of segments, auto revenues surged 130% YoY while mobile handset revenues contracted 4.8% YoY. Net profits jumped 206% to rMB3.595 billion, at the top end of the preannounced range of CNY2.8-3.6 billion. Volume growth (353K new energy passenger vehicles in 2Q, +265% YoY) beat market expectations despite two rounds of price increases in 2022 and supply chain disruptions.  The company’s EV market share rose to 29% (vs 17% in 2021).  Pinduoduo delivered Q2 results showing stronger than peer sales growth Pinduoduo (PDD:xnas), a leading eCommerce platform with strong penetration into agricultural products and online shoppers from rural areas., reported 1H total revenue growing at 36% YoY, far exceeding the 3% YoY consensus estimate.  The company attributed the revenue growth to a recovery in consumption since mid-May, successful promotion campaigns, and 48-hour daily necessity supply packs for people facing lockdown.  The company’s strong market position in rural areas and agriculture-related products also help it stand out from its rivals.  In Q2, the company achieved a 20 percentage point improvement in margins, reaching 33.5%, but the management cautioned investors that the margin compression was attributed to temporary cost savings early in the quarter and spending had increased since mid-May.  Non-GAAP EPS came in at Rmb7.54, +161% Uranium companies and other nuclear-related companies are back in the spotlight  Elon Musk said countries should not shut down existing nuclear power plants as Europe grapples with an energy crisis “If you have a well-designed nuclear plant, you should not shut it down - especially right now”, said Musk during an energy conference in Norway. That resulted in the Global X Uranium ETF climbing 7.4% on Monday to its highest level since June 8, supported by US uranium stocks rising. Uranium stocks in the Asia-Pacific region to watch include Australia’s Paladin, Deep Yellow and Boss Energy, as well Japan’s Kansai Electric Power and Tokyo Electric Power, as well as Mitsubishi Heavy Industries. In South Korea watch Doosan Enerbility, Kepco. And in Europe, monitor Yellow Cake and Kazatomprom.      For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 30, 2022
JPY: Assessing the FX Intervention Zone and Market Conditions

Forex: EUR/USD - The Next Target Is Fibonacci Retracement

InstaForex Analysis InstaForex Analysis 30.08.2022 09:52
Relevance up to 07:00 2022-08-31 UTC+2 Technical Market Outlook: The EUR/USD pair has broken through the nearest technical resistance located at the level of 0.9955 and is currently consolidating around the parity level. The next target for bulls is the 38% Fibonacci retracement again located at the level of 1.0078. The next target for bears is seen at the level of 0.9901, but it might not be enough and the down wave might be extended lower. The momentum is positive-to-neutral, so the EUR is still under the pressure. The monthly candle looks bearish and there is no indication of the down trend termination or reversal on the higher time frames as well. Weekly Pivot Points: WR3 - 1.00077 WR2 - 0.99699 WR1 - 0.99503 Weekly Pivot - 0.99321 WS1 - 0.99125 WS2 - 0.98943 WS3 - 0.98565 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue lower towards the level or 0.9900 and below. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Source: Forex Analysis & Reviews: Technical Analysis of EUR/USD for August 30, 2022
Liquidity at Stake: Exploring the Risks and Challenges for Non-Bank Financial Intermediaries

Forex: GBP/USD - New, Fresh Low. The Next Target For Bulls

InstaForex Analysis InstaForex Analysis 30.08.2022 10:05
Relevance up to 07:00 2022-08-31 UTC+2 Technical Market Outlook: The GBP/USD pair has made a new, fresh low at the level of 1.1647 and then bounced towards the nearest technical resistance located at 1.1717. The local high was made at the level of 1.1743, but it is not enough to continue the rally. The next horizontal technical resistance is seen at the level of 1.1760 and this level is the next target for bulls in a case of a bounce extension. The momentum remains weak and negative, however, there is a bullish divergence seen on the H4 time frame chart between the price action (last low) and momentum. The larger time frame trend (daily and weekly) remains down until further notice. Weekly Pivot Points: WR3 - 1.18043 WR2 - 1.17392 WR1 - 1.17002 Weekly Pivot - 1.16741 WS1 - 1.16351 WS2 - 1.16090 WS3 - 1.15439 Trading Outlook: The Cable is way below 100 and 200 DMA , so the bearish domination is clear and there is no indication of down trend termination or reversal. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame chart last week. The next long term target for bears is seen at the level of 1.1410. Please remember: trend is your friend. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: Technical Analysis of GBP/USD for August 30, 2022
Natural Gas Prices Extended The Recovery

Natural Gas Prices Still Fell Besides Russia Shuts The Key Nord Stream Pipeline Down. Dependence Coming To An End?

Saxo Strategy Team Saxo Strategy Team 30.08.2022 09:18
Summary:  Markets traded mostly sideways yesterday as the US dollar’s advance was stymied and US yields pushed back slightly lower. China continues to allow its currency to trade toward the lows for the cycle versus the US dollar as the 7.00 area nears in USDCNH. The euro bobbed back up toward parity versus the US dollar yesterday as natural gas prices fell even as Russia shuts the key Nord Stream pipeline down for a purported few days of maintenance.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities stabilised yesterday following that knee-jerk reaction on Friday to the Jackson Hole presentations with S&P 500 futures touching and bouncing off the 50-day moving average closing above the critical 4,000 level. S&P 500 futures are trading around the 4,044 level this morning sandwiched between the 100-day moving average above this level and the 50-day moving average below suggesting a bigger move is shaping up in either direction. The next big shift in sentiment will be when we get the US August CPI print on 13 September as that is the key data point to shape expectations from current levels. Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland China equities pulled back moderately, Hang Seng Index -0.9%. Tech names were weak. Hang Seng Tech Index plunged as much as 3% before bouncing off the lows to finish the morning session down 1.7%.  According to the Ministry of Industry and Information Technology, smartphone sales in China fell 2.9% YoY in the period between Jan and July. Despite reporting solid 1H results, China automaker, BYD (01211:xhg) slid 0.6%. In A-shares, mining stocks, gas, electric equipment, and auto parts underperformed, CSI 300 -0.5%. Pinduoduo (PDD:xnas), a leading Chinese eCommerce platform listed on Nasdaq reported strong 2Q results, showing stronger than peer gross merchandise value growth and better-than-expected margin improvement. US dollar and especially USDCNH The US dollar tried higher, but failed to follow through as risk sentiment stabilized and US Treasury yields eased back lower. The USDCNH rate, however, continues to push toward the high of the cycle, trading near 6.92 this morning. EURUSD trades near parity this morning after natural gas prices fell sharply in Europe yesterday and despite ECB Chief Economist Lane arguing for steady rate increases (pushing back against the pricing of a possible 75 basis point move at next week’s ECB meeting). Incoming data this week will be critical for USD direction. JPY weakness to bring back pressure on Bank of Japan USDJPY is back to testing its record July highs despite little change in money market pricing of the Fed rate path following Powell’s hawkish speech at Jackson Hole. The peak Fed funds rate is still priced in at 3.8%, while some of the Fed speakers have started to suggest 4%+ levels that may be needed to combat inflation. This brings the September dot plot in focus, but we get the jobs and CPI data before that as well. Any further upward re-pricing of the Fed path, if resulting in gains in US 10-year yields, could very well take USDJPY to new highs with Japanese yields still remaining capped due to the Bank of Japan’s yield curve control policy. If, however, US data underwhelms, the room on the downside for USDJPY is tremendous. Crude oil prices (CLU2 & LCOV2) Crude oil prices saw their best day in six weeks amid threats of a decline in supply from OPEC and production outages in Libya. Brent futures rose above $105/barrel although some softening was seen in Asia overnight, while WTI rose to $97/barrel. This follows news from last week that Kazakhstan’s exports of crude may be impacted for months because of damage to its port facility. Meanwhile, negotiations between Iran and the US over the revival of the 2015 nuclear deal could drag on for weeks, easing fears of an imminent surge in supply. Pro Farmer tour see lowest US corn production since 2019 The just completed Pro Farmer tour across the US grain belt helped drive corn futures in Chicago to a two-month high on Monday after the tour saw the US corn crop at 13.76 bn bushels, below USDA forecasts for 14.36 billion bushels. Pro Farmer predicted a soybean crop of 4.54 billion, in line with the USDA’s latest forecast. Wheat, supported by corn’s rally, touched its highest since July 12 despite news that Ukraine agricultural exports could rise to 6.5 million ton in October, double the volume in August.  The soybean vs corn ratio needs to stay low (favouring corn) ahead of the South American planting season in order to persuade farmers there to plant more of the fertilizer intensive crop. US Treasuries (TLT, IEF) US treasury yields eased lower yesterday. An interesting paper presented at the Jackson Hole conference at the weekend suggests that the Fed will have a hard time delivering on quantitative tightening without causing harm to financial market functioning, which could mean less supply of treasuries from the Fed if its shies away from reducing its balance sheet at the previously touted pace of $95 billion/month. Otherwise, incoming US data is the focus through the August CPI release on September 13. What is going on? Shell CEO warns of prolonged European gas crisis Shell CEO Ben van Beurden gave comments from Norway’s ONS conference, suggesting that Europe could face gas shortages for a number of winters. This disproves reports suggesting that Europe has already built reserves for the winter demand and reaffirms our belief that a move to broad-based energy supply will continue to be top of mind in the long run. In the near term, demand destruction appears to be the only possible solution, and Van Beurden stressed the need for efficiency savings as well as rationing. ECB Lane dials back on jumbo rate hike expectations ECB chief economist Lane was on the wires on Monday and hinted at a steady pace of rate hikes in a “step-by-step” manner rather than jumbo rate hikes. This appears to be a pushback against calls for a 75bps rate hike at the September meeting, as he made the case to allow the financial system to absorb the rate changes. Moreover, on inflation, Lane said long-term inflation expectations remain close to the two per cent target, while near-term inflation expectations are quite elevated. BYD reported 1H earnings at the high end of the preannounced range Chinese automaker BYD (01211) reported 1H revenue up 66% y/y to RMB 151bn. In terms of segments, auto revenue surged 130% y/y while mobile handset revenues contracted 4.8% y/y. Net profits jumped 206% to RMB 3.6bn, at the top end of the preannounced range of RMB 2.8-3.6bn. Volume growth (353K new energy passenger vehicles in 2Q, +265% y/y) beating market expectations despite two rounds of price increases in 2022 and supply chain disruptions. The company’s EV market share rose to 29% (vs 17% in 2021). Pinduoduo delivered Q2 results showing stronger than peer sales growth Pinduoduo (PDD:xnas), a leading eCommerce platform with strong penetration into agricultural products and online shoppers from rural areas, reported 1H total revenue up 36% y/y, far exceeding the 3% y/y consensus estimate. The company attributed the revenue growth to a recovery in consumption since mid-May, successful promotion campaigns, and 48-hour daily necessity supply packs for people facing lockdown. The company’s strong market position in rural areas and agriculture-related products also help it stand out from its rivals. In Q2, the company achieved a 20 %-point improvement in margin, reaching 33.5%, but the management cautioned investors that the margin compression was attributed to temporary cost savings early in the quarter and spending had increased since mid-May. Non-GAAP EPS came in at RMB 7.54, +161% y/y. Shares in Uranium companies and other nuclear-related companies are back in the spotlight Japan has signaled its openness to more nuclear power, at the same time, Tesla founder Elon Musk has applauded uranium as an energy alternative, during an energy conference in Norway. Uranium stocks moved higher as a result on Monday in the US, which boosted the Global X Uranium ETF up 7%, to its highest level since June 8. Shares in the Asia-Pacific region followed. Australian stocks saw the most significant moves given the country has the largest uranium reserves globally. Australia’s Paladin rose 11%, Deep Yellow 15% and Boss Energy 10%, while Rio Tinto (which owns a deposit) rose over 1%. Japan’s Mitsubishi Heavy Industries and Tokyo Electric Power gained 3%. Companies to watch in Europe, include Yellow Cake and Kazatomprom. What are we watching next? August U.S. job report is out on Friday There should not be a major surprise. The economist consensus expects a 300,000 payrolls increase in August and a stable unemployment rate at 3.5 % - this is a five-decade low. If this is confirmed, it all points to a healthy labor market (despite the moderate pace of job increases). Today, the U.S. government will also release July data on vacancies and quits. Expect job openings to remain elevated, thus pointing to resilient demand for labor. These figures are unlikely to play a major role at the September FOMC meeting since it is well-known that labor market data are lagged indicators. Inflation remains the main point of concern, as mentioned by Fed Chair Jerome Powell last week at Jackson Hole Symposium. August EZ CPI will be painfully high The consensus expects a new increase of 9 % year-over-year when the data will be released on Wednesday. This should convince European Central Bank (ECB) policy makers to raise borrowing costs by a sizable increase on September 8. At Jackson Hole, ECB’s executive board member Isabel Schnabel indicated the central bank has no other choice but to act with ‘determination’. This is a matter of credibility. According to Bloomberg, traders now price a 50 % chance of a 75-basis points rate hike in September. Earnings to watch Today’s earnings focus is China are lithium miners Tianqi Lithium and Ganfeng Lithium as the growth in electric vehicles sales is putting enourmous pressure on availability of lithium and prices of lithium carbonate. Baidu is another Chinese earnings release to watch today as the company’s footprint in online advertising will give insights into economic activity. Later in the US, earnings to watch are Crowdstrike in the cyber security industry and HP in computing hardware. Today: Woodside Energy, ICBC, China Yangtze Power, Muyuan Foods, SF Holdings, Shaanxi Coal, Midea Group, Tianqi Lithium, Ganfeng Lithium, Bank of Montreal, China Construction Bank, Bank of China, Great Wall Motor, COSCO Shipping, Partners Group, Baidu, Crowdstrike, HP Wednesday: MongoDB, Brown-Forman, Veeva Systems Thursday: Pernod Ricard, Broadcom, Lululemon Athletica, Hormel Foods Friday: BNP Paribas Fortis Economic calendar highlights for today (times GMT) 0700 – Spain Flash Aug. CPI 0830 – UK Jul. Net Consumer Credit 0830 – UK Jul. Mortgage Approvals 0900 – Euro Zone Aug. Confidence Surveys 1115 – ECB's Vasle to speak 1200 – Hungary Rate Decision 1200 – US Fed’s Barkin (Non-voter) to speak 1200 – Germany Aug. Flash CPI 1300 – US Jun. S&P CoreLogic Home Price Index 1400 – US Aug. Consumer Confidence 1400 – US Jul. JOLTS Job Openings 1500 – US Fed’s Williams (voter) to speak 1600 – ECB Speakers Holzmann and others 2030 – API's Weekly Crude and Fuel Stock Report 0130 – China Aug. Manufacturing/Non-manufacturing PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 30, 2022
Analysis Of The EUR/JPY Pair Movement

Forex: USD/JPY Tries To Attract More And More Buyers Before Next Jump!

InstaForex Analysis InstaForex Analysis 30.08.2022 10:53
Relevance up to 08:00 2022-08-31 UTC+2 The USD/JPY was trading at 138.42 at the time of writing. After its amazing rally, the price tries to consolidate and attract more buyers before jumping higher. Technically, the bias remains bullish despite temporary drops and or sideways movements. Fundamentally, the Unemployment Rate came in at 2.6% matching expectations. Later, the US data could be decisive. JOLTS Job Openings indicator is expected at 10.37M while the CB Consumer Confidence could be reported at 97.6 points. USD/JPY Minor Range! As you can see on the H1 chart, the price found resistance at the R2 (138.90) and now it moves sideways. In the short term, it's trapped between the R2 and the R1 (138.20) levels. As long as it stays above the R1, USD/JPY could resume its growth. Technically, the current sideways movement could represent an upside continuation pattern. Better-than-expected US data could push the pair higher. USD/JPY Forecast! A valid breakout above the R2 (138.90) and a new higher high could activate further growth at least until the 139.38 key level. This scenario could bring new long opportunities. Also, false breakdowns below the R1 (138.20) could help the buyers to go long. Still, a broader growth could be confirmed only by a valid breakout above the 139.38 historical level. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: USD/JPY consolidates ahead of breakout
The US Dollar Index Is Expected A Pullback Rally At Least In The Near Term

Markets Finally Catch Their Breath After The Speech As Dollar Stops Growing

Saxo Bank Saxo Bank 30.08.2022 11:31
Summary:  Today we look at the lackluster session yesterday as risk sentiment found relief after the brief wipeout in the wake of the Fed Chair Powell speech on Friday. Helping to ease pressure on sentiment were the USD halting its rise and US yields easing back lower. In commodities, we look at the latest on the natural gas situation in Europe as Russia is set to shut down a key pipeline for purported maintenance. The corn and wheat outlook, pressure on discretionary spending and related stocks due to soaring energy prices, upcoming earnings reports and more also on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: High energy costs will crowd out discretionary spending
Navigating the European Landscape: Assessing the Significance and Variations of Non-Bank Financial Institutions

Hawkish Rhetoric Has Made US Dollar (USD) Go Up, What Can Trigger ECB To Save EUR/USD From Parity

ING Economics ING Economics 30.08.2022 12:18
It seems the Fed is not particularly displeased with the market reaction to Friday's hawkish Jackson Hole speech from Fed Chair, Jay Powell. Here, real US yields have moved higher, equities have fallen and the dollar has strengthened. Weaker consumer sentiment is unlikely to blow the Fed off course. Elsewhere, look out for a policy meeting in Hungary today   Federal Reserve Chair Jerome Powell at this year's Jackson Hole symposium USD: Fed applies the brakes, dollar strengthens We tend to hear it ever more frequently – that a central bank can only control the demand side of an economy and, in an era of dangerously high inflation, its job is to take the steam out of demand. That was a central message in Jay Powell's Jackson Hole speech on Friday (the speech is certainly worth a read). That sentiment has been echoed by newly-minted Fed hawk, Neel Kashkari, who has said that he is 'happy' to see the market reaction since Friday's speech – a market reaction which has included US equity markets falling around 4%. Our point here is that the Fed policy is designed to slow demand and that (orderly) weakness in equity markets and some softer consumer data (confidence and spending) are not enough to blow the Fed off its tightening course. Looking at US money markets the reaction since Friday has been to price the Fed cycle modestly higher, but also to scale back on the amount of easing expected for 2H23. The pricing of that easing still looks vulnerable as we head into the US August jobs report this Friday.  This environment should keep the dollar bid. As we highlighted recently, the Fed seems quite happy with the stronger dollar and once again we are likely to hear the refrain from US officials that 'the dollar is our currency and your problem'. Indeed, the stronger dollar could be one of the reasons why the ECB could turn more hawkish over the coming months as EUR/USD remains offered near parity. Dollar strength on the back of higher US real yields is one side of the coin, the other is the energy crisis and other domestic factors weighing on large parts of Asia and Europe. In the spotlight here is China, where USD/CNY has traded up to 6.92, even as the People's Bank of China (PBoC) has protested with stronger CNY fixings. Perhaps USD/CNH traded volatility (one month now 6%) should be even higher than it is today since recent price action points to the PBoC either losing control of the renminbi market or indeed finally shifting to a more flexible FX regime – both of which should deliver more realised volatility. Heavy positioning is probably the biggest challenge to a further dollar advance. Other than that it is hard to fight against dollar strength. For today, look out for US Conference Board consumer confidence. Lower gasoline prices have consensus expecting a bounce here. But as above, we doubt even a softer number does much damage to the strong dollar story. DXY probably finds demand under 108.50. Chris Turner EUR: Release the hawks EUR/USD has been finding some support near 0.9920 but remains vulnerable. On Friday we saw a Reuters source story suggesting that a 75bp hike could be discussed at next week's ECB rate meeting – yet even that source story seemed to admit that a 75bp hike was unlikely. On that subject, today we hear from a few ECB hawks – most notably from Austrian ECB official, Robert Holzman. He has already aired views on the 75bp hike for next week and should repeat those today. Markets now price a 63bp ECB hike on 8 September – we expect 50bp. And the market also prices 160bp of ECB tightening by year-end, which again looks far too much according to our eurozone macro team. Also, look out this week for natural gas prices. These corrected sharply in Europe yesterday. But whether Russia restarts gas flows via Nordstream 1 after three days of maintenance (starting tomorrow) will be a major driver of gas prices and also of the European currency complex this week. EUR/USD should remain offered in a 0.9900-1.0100 range this week.  Chris Turner GBP: Soft equity environment is not helping Sterling has been a little weaker than we thought, especially against the euro. Sterling typically shows higher correlations to equity markets than the euro (probably given the larger role of financial services in the UK economy). A tough environment for equities is therefore a real headwind to any sterling recovery. 0.8575/85 looks the obvious near-term target for EUR/GBP, while for GBP/USD it remains hard to fight a move to 1.15. Chris Turner CEE: Temporary relief for the region Today, we will see the second release of GDP in the Czech Republic, which should show details of the surprisingly strong growth in the second quarter. Also, there will be a monetary policy decision from the National Bank of Hungary later today. We are expecting 100bp in line with surveys, however this may not be enough for the markets. Polish GDP and inflation data will be released on Wednesday. While the second estimate of GDP should explain the surprisingly negative 2Q result, inflation for August could fall slightly on a year-on-year basis. On Thursday, we will see a pack of PMI releases in the CEE region. Previous months have already shown significant declines and no improvement can be expected this time either. On the other hand, the recent German print sent a positive signal that the decline in sentiment could stop in August. On the FX front, pressure from EUR/USD and gas prices eased yesterday and CEE currencies can take a breath. However, we do not expect a trend reversal this week and remain bearish for the region. We see the Polish zloty as the most vulnerable given the zloty is at its strongest levels in 10 days, the weak economic data and again the dovish tone of the National Bank of Poland. Thus, we see room to move back into the 4.760-4.780 EUR/PLN range. The Hungarian forint should be closer to 409 EUR/HUF, but today's central bank meeting will be the main driver. The Czech koruna escaped the Czech National Bank intervention levels after a few days, however, thanks to recent dovish statements from the central bank, we believe that the increase in market expectations is only temporary, and the koruna will return to 24.650 EUR/CZK. Frantisek Taborsky Read this article on THINK TagsJerome Powell Jackson Hole FX Federal Reserve Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Navigating the New Normal: Central Banks Grapple with Policy Dilemmas

Euro (EUR) May Be Skyrocketing Soon! Jackson Hole Meeting Wasn't Only About Fed's Hawks

ING Economics ING Economics 30.08.2022 12:57
We will remember Jackson Hole not just for Powell's hawkish speech, but also for the ECB gearing up its own hawkishness – 75bp hikes are not just for the Fed. Even if just an attempt to invoke the market's help to do the heavy lifting of tightening financial conditions, near term it means more curve flattening. Accelerating inflation still justifies the means  Hawkish ECB communications shift bear flattens the curve... EUR money markets have clearly set their sights on a 75bp hike at the September meeting after the string of hawkish comments over the weekend. The ESTR OIS (euro short-term rate overnight indexed swap) forward for the September reserve period is now at 65bp, implying a 60% probability for a larger move. It was the European Central Bank’s Robert Holzman, Martins Kazaks and Klaas Knot who all hinted more-or-less explicitly at a 75bp hike being on the table while others have called for more forceful action. France’s François Villeroy appears to suggest more frontloading with a call for showing determination now to avoid “unnecessarily brutal” hikes at a later stage. The significance of that hawkish communications shift was underscored by the ECB’s Isabel Schnabel who warned that greater sacrifices may be needed to bring inflation under control. And indeed the ECB’s current official economic outlook certainly still looks overly optimistic against the backdrop of a deepening energy crunch. This all spells further yield curve flattening as the ECB looks more prepared to hike even into a downturn.    The barrage of hawkish ECB comments means more EUR curve flattening is on the cards Source: Refinitiv, ING ...but may signal more reliance on the market to do the heavy lifting While acknowledging further normalisation is appropriate, the ECB’s chief economist Philip Lane struck a more balanced tone. In light of high uncertainty, he argued for a steady pace of hikes to the terminal rate. Smaller hikes would be less likely to cause adverse side effects and make it easier to correct course. Under the current circumstances, we suspect that 50bp would fit his idea of “steady” and “small”. He also notes that policy works through its influence on the entire yield curve. After the July rate hike, higher market rates have meant that the monetary tightening that has already occurred is far greater than just the first policy rate increase. In particular, he notes that mid and longer-end segments of the yield curve are most important for determining financing conditions in the economy and that these are more sensitive to expectations of the terminal rate than the precise path of policy rates towards it. That insight leads us back to one possible aim of the more hawkish communications twist: let the market do the heavy lifting of tightening financing conditions. As long as inflation risks are skewed to the upside, hawkish talk is likely to persist. And as long as the market plays ball, it may not necessarily translate into an even larger 75bp hike. However, one can also argue that when relying on hawkish talk it is even easier to eventually correct course than it is with a strategy of “smaller hikes". At this point, we still think that the ECB will significantly underdeliver compared to what markets are pricing. The crucial question is just when this notion will dawn on markets. The EUR swap curve prices front-loaded hikes in 2022 Source: Refinitiv, ING ECB quantitative tightening on the back burner? It appears that a discussion on quantitative tightening might not be as imminent, which should also come as a relief for periphery bonds. Accelerated ECB rate hikes and political uncertainty in Italy have already brought the benchmark 10Y spread of Italian bonds over German Bunds back towards 230bp. Bringing quantitative tightening to the table could tip the fragile balance towards more widening, even after the introduction of the Transmission Protection Mechanism. But it is quite notable that amid the latest hawkish push on rates, Italy's spreads have actually managed to eke out a small tightening versus Bunds. The Council's views on quantitative tightening seem not quite as aligned as their view on rates. After being brought up last week by the Bundesbank's Nagel and also by subtle hints in the ECB meeting minutes, the ECB’s Olli Rehn now said it was too early to publicly discuss quantitative tightening. While Kazaks said it could be discussed, he added it was too early to implement. Today's events and market view The reason for the ECB's hawkish turn will become more obvious today. As markets are looking for a further acceleration in inflation, all eyes are on the German and Spanish readings today ahead of tomorrow's eurozone flash CPI release which the consensus sees heading to 9%. The core rate is seen accelerating to 4.1%. Also to watch are the business climate indicators today, economic sentiment and consumer confidence, all of which are expected to come in softer. The 1y1y ESTR forward is back to 2.13%, though that is still short of the peak seen in June when it topped 2.5%. It might still push higher from here, but the long end should increasingly lag. In primary markets, Italy will reopen the 5Y, 8Y and 10Y sectors as well as a floating rate bond for a total of up to €8bn. Read this article on THINK TagsRates Daily Federal Reserve ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

Fed Announced It Will Have No Pity For The Markets!

Swissquote Bank Swissquote Bank 30.08.2022 12:58
The US futures look better after the post-Powell selloff, but the market sentiment will likely remain morose after Powell’s clear declaration that the Federal Reserve (Fed) will have no pity for the markets, and continue tightening its policy until it puts inflation on a sustainable path toward its 2% policy target. At this point, it’s difficult to get a pricing that goes against the Fed. Happily for oil bulls, the Fed drama doesn’t concern the energy stocks, which had a good session yesterday thanks to firmer oil prices. The barrel of US crude advanced past the 200-DMA. The European nat gas futures however slumped 20% yesterday, as Germany said its gas stores are filling up faster than planned. But energy prices remain exorbitantly high, and governments are increasingly frustrated with the skyrocketing energy prices that hammer economies and households, while putting a lot of money in energy companies’ pockets. As a result, the European policymakers are now cooking new measures to stop the excessive rise in energy prices and decouple the price of gas from electricity. Investors will be watching how the energy companies will react to the measures. On the data front, Germany and Spain will release the latest inflation update today. The euro is making a great effort to throw itself above parity against the US dollar, and stronger than expected inflation figures could help boosting the European Central Bank (ECB) hawks, but the topside should remain limited. Special focus on Uber: is the company a good play in the long run, what are the short-term risks? Watch the full episode to find out more!   0:00 Intro 0:27 Equities under pressure 1:37 But energy stocks do well 2:17 European nat gas drops 20% on encouraging German news 2:48 European leaders will step in to bring energy prices lower 5:00 Eurozone inflation data in focus 7:59 Focus: Uber Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Energy #crisis #natural #gas #prices #crude #oil #energy #stocks #Exxon #OccidentalPetroleum #USD #EUR #inflation #ECB #hawks #Uber #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH   Source: Europeans preparing to intervene in energy markets! | MarketTalk: What’s up today? | Swissquote
EUR: German IFO Data and Central Bank Hawkishness Impact Euro/USD Range Trade

The US Dollar (USD) Surrendered Earlier Gains And Remains Lower!

Marc Chandler Marc Chandler 30.08.2022 13:12
Overview: Corrective pressures were evident yesterday and they extended today in Asia and Europe but seem to be running their course now. Market participants should view these developments as countertrend and be wary of waning risk appetites in North America today. Most Asia Pacific equities rallied earlier today, save China and Hong Kong. Europe’s Stoxx 600 has retraced most of yesterday’s losses and US futures are trading higher. Benchmark bond yields are softer with the US 10-year note yield off about 3.5 bp to below 3.07%. European yields are mostly 3-5 bp lower, but UK Gilts are pressured by reports that foreign investors were heavy sellers last month. The US dollar surrendered earlier gains yesterday and is mostly lower today. The Australian dollar is leading the charge, despite a much sharper than expected fall in building approvals. Among emerging market currencies, only the Philippine peso and Taiwanese dollar are failing to push higher. Gold is soft, despite the weaker greenback and lower yields. It is nursing losses for the third session. After a sharp 4.25% gain yesterday, October WTI is pulling back by around 1.75% today toward $95. US natgas is off 2%, while Europe’s benchmark has extended yesterday’s 19.5% drop with a further 6.6% slide today. China’s property sector woes are weighing on the steel sector and iron ore prices have fallen 8% over the past two sessions and is below $100 for the first time this month. December copper is off 1% after falling 2.3% yesterday. December wheat is paring yesterday’s 4.6% gain.  Asia Pacific Japan reported that its unemployment rate was unchanged in July at 2.6%. The job-to-applicant ratio unexpectedly ticked up to 1.29 from 1.27. The upticks in the yen, however, are more related to the pullback in US yields than the developments in the Japanese economy. Tomorrow, Japan reports July industrial output, and after the 9.2% surge in June, related to the lagged response to re-opening in Shanghai likely eased a bit. Retail sales offer the opposite trajectory. They fell a whopping 1.3% in June and likely stabilized in July, allowing for a small gain. In June apparel and general merchandise purchases were particularly weak. Rising interest rates are squeezing Australia's property market more intensely than expected. Building approvals plunged 17.2% in July, six-times more than the median forecast in Bloomberg's survey. The drop was driven by the private sector apartments rather than houses. The number of private sector approvals was the lowest since January 2012. The disappointment did prevent the Australian dollar from recovering today, amid the general pullback in the US dollar, but the odds of a 50 bp hike next week were shaved to around 65% from 70% yesterday. Rains in Sichuan have eased the energy emergency allowing large-scale industry to result production this week. The provincial government downgraded the emergency to level-one from level-two yesterday and several companies (including Toyota, Honda, and Foxconn) indicated a resumption of production. Cooler weather was also helping reduce household demand for electricity. Yet, Sichuan has gone from drought to flood. Reports suggest that nearly 325 mines, including 60 coal mines, with 5000 workers have been asked to take shutdown for precautionary reasons. Meanwhile, the zero-Covid policy has led to lockdowns in parts of Shenzhen. Softer US rates and a downside correction in the US dollar after reaching JPY139 yesterday has seen the greenback ease toward JPY138.15. The JPY137.95 area corresponds to a (38.2%) retracement of the dollar rally since before Powell spoke at Jackson Hole at the end of last week. We suspect the corrective pressure have been exhausted or nearly so and expect North American traders to buy the dollar the on the dip. Yesterday's low was slightly above JPY137.35. The Australian dollar took out a neckline of what may be a potential head and shoulder top yesterday but recovered to close above it (~$0.6850). Follow-through buying today has lifted it to around $0.6955. Here too, we think the short squeeze has nearly run its course in the European morning. The $0.6965-70 area may offer the nearby cap. For the fifth consecutive session, the PBOC set the dollar's reference rate lower than the market (median in Bloomberg's survey) expected, and the gap today (~249 pips) was the most since the Bloomberg survey began four years ago (CNY6.8802 vs. CNY6.9051). The PBOC seemed willing to accept an orderly decline of the yuan, especially given the divergence of monetary policy, but wants to avoid a vicious cycle. This was underscored by its announcement of a consultation period as it considers a news policy to require prior approval for companies wishing to sell long-term debt in offshore markets. At the same time, we read the fixing as a type of affirmation through negation, i.e., the PBOC's action acknowledges the strength of the demand for dollars. The dollar rose to a two-year high yesterday, after rising nearly 2% over the previous two weeks. Today, it slipped less than 0.1%. Europe Attention turns to eurozone's August inflation, ahead of tomorrow's aggregate report. Spain began with a 0.1% month-over-month increase that saw the harmonized year-over-year pace ease for the first time in four months. It slipped to 10.3% from 10.7%. However, the core rate rose to 6.4% from 6.1%. German states have reported, and they all showed of the year-over-year rate, even as the month-over-month change moderated to 0.2%-0.4%. The median forecast in Bloomberg's survey sees a 0.4% increase in the harmonized rate for an 8.8% year-over-year increase (from 8.5% in July). The risk is on the upside. With the surge in energy prices, the Bundesbank chief Nagel warned that Germany inflation could rise to over 10%. The EU is holding an emergency energy ministers meetings on September 9 to consider efforts to coordinate a response. The focus appears capping gas prices and/or decoupling electricity prices from gas prices. EU countries have already "spent" and estimated 280 bln euros on tax cuts or subsidies for energy. Quietly, the German two-year yield has doubled in the past two weeks from 0.53% on August 15 to 1.10% yesterday. The German yield has risen faster than comparable US yield. As a consequence, the US 2-year premium has fallen below 240 bp for the first time since early July. It recorded a three-year peak on August 5 a little more than 277 bp. One of the spurs to the more than 22 bp increase in the German two-yield over the past two sessions has been the push from some of the hawks for a 75 bp move at next week's ECB meeting. While it is noteworthy that it was not done via leaks to the press this time, as sometimes is has appeared in the past, and the market seems to think it is likely. The swaps market shows it be a little more than a 60% chance of materializing, up from about a 20% chance a week ago. Our own subjective assessment is that a steady series of 50 bp hikes is more likely to achieve a consensus than a jump to 75 bp and a return to 50 bp or even 25 bp. Given the fragile economic condition, and with little to gain from a larger move than cannot be achieved through the ECB's forward guidance, a stable, predictable course is likely preferable. That said, the provocative tactics of the hawks seems to be an attempt to deliver a fait accompli to the ECB. If they deliver a 50 bp hike, they will appear as dovish versus expectations and could pressure the euro lower in disappointment. The short-covering bounce in the euro began yesterday when the $0.9900 area held. There are a little more than 3 bln euros in options struck there that roll-off today. The gains maybe spurring demand related to 1.55 bln in options struck at $1.00 that expire tomorrow. The euro is at its best level since Powell spoke. Just prior to the Fed Chair's speech last week, the euro spiked to $1.0090. This area should provide a cap now. Sterling's recovery off yesterday's two-year low (~$1.1650) seems less inspired and has not been able to push above yesterday's high (~$1.1785). And even if it does, the upticks will likely be limited to the $1.18 area, which is the (61.8%) retracement of the decline since the high set before Powell spoke (($1.1900). The intraday momentum indicators are stretched by the gains of a little more than half a cent in the European morning. Separately, the decision by the Hungarian central bank is awaited. It is expected to hike the base rate by 100 bp today after hiking by 300 bp last month. This move will bring the base rate to 11.75%. It was at 2.4% at the end of last year.    America The two-year breakeven has now fallen slightly more than 25 bp over the past three sessions to about 2.70%. Over the three sessions, the nominal two-year yield has risen by a grand total of three basis points to 3.42%. The odds of a 75 bp hike next has edged to about 75% from about 66% before Powell spoke at Jackson Hole and gave no signal besides saying it could be 50 bp or 75 bp move. The difference, the 25 bp is coming in addition to the other anticipated moves. What this means is the market now sees the year-end Fed funds target closer to 3.75% rather than 3.50%. The implied yield of the March 2023 Fed funds futures is pricing in about an 80% chance of a hike in Q1, unchanged for the third consecutive session. The market also continues to price in 7-9 bp of easing by the end of next year as it has for the past five sessions. Ahead of the US jobs data, which are the highlight of the week, with the ADP estimate tomorrow, house prices, the Conference Board's consumer confidence, and the JOLTS report on job openings are featured today. While the Fed's Kashkari's comments about the stock market and the Fed's objective of tightening of financial conditions are really revealing anything new, the undiplomatic expression seemed to set the chins wagging. Equity prices are part of the financial conditions but so are interest rates, ease of credit, and asset prices more generally. House price inflation appears to be slowing and this alongside weaker financial asset prices are part of the process. Canada reports its Q2 current account surplus, which is reflecting the positive terms-of-trade shock. Consider that in 2019, before Covid, Canada recorded a C$47 bln current account deficit. With a Q2 surplus of C$6.8 bln expected, it would mean Canada has recorded a nearly C$11 bln current account surplus in H1 22. Tomorrow, Canada reports Q2 GDP and it is expected to have accelerated to around 4.4% form 3.1% in Q1. Still, even with today's modest gain, the Canadian dollar is off about 2.7% this year against the US dollar. The broader risk environment is a more important driver of the exchange rate. Mexico reports its July unemployment rate. It is expected to have ticked up to 3.53% from 3.35%. The market does not appear sensitive to this time series. Tomorrow, the central bank's inflation report is due, but it’s unlikely to impact expectations for a 75 bp hike late September. The US dollar set a new high for August near CAD1.3075 before pulling back toward CAD1.2990. Follow-through selling today has been limited to the CAD1.2970 area, just above CAD1.2965 retracement objective. The momentum indicators suggest that losses below that will be limited and instead the greenback could recover toward CAD1.3025. The Mexican peso's resilience is evident. It continues to trade well within this month's range. The dollar has built a base around MXN19.81 and has not closed above the 20-day moving average (~MXN20.0735) since August 2. However, further dollar losses today look limited.     Disclaimer   Source: Turn Around Tuesday Began Yesterday, Likely Ends before Wednesday
The USD/JPY Pair Above Maximum. Long Positions Gain Profits

Japanese Yen Is Under Pressure As Japan Releases Retail Sales And Consumer Confidence

Kenny Fisher Kenny Fisher 30.08.2022 13:24
The Japanese yen is in positive territory today after starting the week with sharp losses. USD/JPY is trading at 138.22, down 0.34%. Japan releases a host of events on Wednesday, including retail sales and consumer confidence. Retail sales for July is expected to come in at -0.5% MoM, following a 1.4% decline in June. Consumer confidence remains weak, with a July estimate of 31.0, following the June read of 30.2. The Japanese consumer is in a sour mood and nervous about the economy, so it’s no surprise that she is holding tight to the purse strings as inflation continues to rise. Yen remains under pressure The yen remains under pressure and took it on the chin after Fed Chair Powell’s speech at Jackson Hole on Friday. Powell’s brief speech went straight to the point, pledging to continue raising rates until inflation was brought under control. Powell pointedly said that one or two weak inflation reports would not cause the Fed to U-turn on its tightening, a veiled reference to the market euphoria which followed the July inflation report, which was lower than the June release. With the equity markets taking a tumble after Powell’s speech, it appears that investors have finally gotten the Fed’s hawkish message. Powell’s speech removed any doubts about the Fed’s plans to continue raising rates, but the size of the increases will depend not just on inflation, but also on other economic data. Overshadowed by Jackson Hole, US Personal Income and Spending data was weaker than expected. As well, the Core PCE index, the Fed’s preferred inflation indicator, fell to 6.3%, down from 6.8% and below the forecast of 7.4%. If Friday’s non-farm payrolls report is weaker than expected, it would be a clear indication that the sharp increase in rates is having its desired effect and the economy is slowing. In such a scenario, Fed policy makers may be more inclined to raise rates at the September meeting by only 50 basis points, rather than 75bp. . USD/JPY Technical USD/JPY is testing support at 1.3822. The next support line is at 137.01 1.3891 and 1.4012 are resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.   Source: Yen stabilizes after hitting 139
bybit-news1

US Dollar (USD) Is Teetering On The Verge Of A Reversal Lower...

John Hardy John Hardy 30.08.2022 14:28
Summary:  The US dollar hasn’t been able to sustain a new rally after Fed Chair Powell’s speech on Friday, with further risk of weakness if incoming data doesn’t bring new upside pressure on US yields. A new thaw in risk sentiment has the USD also teetering on the verge of a reversal lower versus the G10 commodity dollars as well, with the technical outlook finely balanced in pairs like AUDUSD and USDCAD. Incoming data could bring a bump ride through the August CPI number on September 13. FX Trading focus: USD bulls on the defensive ahead of key data. EURUSD squeeze risk picks up above 1.0100 EURUSD has squeezed back higher this morning, and looks ready for a poke above 1.0100 if the minor US data points ahead of Friday’s US jobs report (today’s Consumer Confidence survey and JOLTS survey and Thursday’s August ISM Manufacturing survey) don’t offer any drama. But conviction is lacking as long as EURUSD remains within the seeming tractor-beam pull of parity and it is tough to develop conviction until we have had a look at the Friday’s US jobs report (big Average Hourly Earnings surprises may carry more weight than payrolls due to the inflation angle of earnings), the ISM Services survey on Tuesday (completely at odds with the alternative S&P Global non-manufacturing survey in July when the latter showed a slightly contraction while the July ISM Services was still a robust 56+. The flash August S&P Global reading worsened further to 44.0.), and most of all the August CPI release on September 13, given that the Fed has pre-declared that it is willing to tolerate economic weakness if inflation is not yet under control. ECB Chief Economist Lane was out yesterday arguing for a “steady” pace of “smaller” rate hikes rather than large moves – presumably a series of 50 basis point moves – to avoid “adverse effects” and as Lane believes that this would make it easier for ECB to course correct. This seemed to help cut short the EUR rally yesterday, but rate expectations for the ECB meeting next week are still around 50/50 for a 75-basis-point move, somewhat lower than they were at the peak yesterday after the hawkish speech from the ECB’s Schnabel at the Fed’s Jackson Hole conference at the weekend.  The German flash August CPI will be out around pixel time for this article. Chart: EURUSDThe US dollar backing off today and EURUSD pulls back above parity again after bobbing back and forth around that level yesterday and into this morning. The move likely only picks up likely order-driven momentum tactically on a move above 1.0100 and we face a further cavalcade of incoming data tests for the USD through the August US CPI figure as noted above, and for the EUR side of the equation, the test is next Thursday’s ECB meeting as well as whether Russia turns the gas back on next week after the purported maintenance of the Nord Stream 1 pipeline in coming days. A squeeze scenario could see 1.0200, with anything above that beginning to suggest at least an intermediate challenge of the down-trend. Short term long option strangles are one way to trade for zany choppiness in coming sessions (A long strangle approach is an idea for the indecisive trader, or the one that believes that we might see a squeeze on a move above 1.0100 but one that won’t hold – for example long 1.0125 calls and long 0.9975 puts w/ expiry next Wed. or Thursday, or a trader can simply choose one or the other leg if biased.) Source: Saxo Group Elsewhere, the tactical situation could not be more in limbo in pairs like AUDUSD and USDCAD, which teased a break in favour of a stronger US dollar, only to dive back into the range, if with insufficient force to suggest a tradable reversal. The trading conditions might remain treacherous there at least until the other side of the US jobs report. A CAD supportive crude rally, meanwhile, is fading fast today. Table: FX Board of G10 and CNH trend evolution and strength.The US dollar is still top dog, but the Euro momentum has impressed in the wake of ECB guidance in recent days. Leading the race to the bottom is GBP. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.EURCHF is on the verge of flipping to positive for the first time in a very long time (last negative signal an impressive 53 days so far), EURGBP went positive so two sessions ago, and EURJPY did so yesterday. Still some work to get EURUSD there…. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1200 – Hungary Rate Decision 1200 – US Fed’s Barkin (Non-voter) to speak 1200 – Germany Aug. Flash CPI 1300 – US Jun. S&P CoreLogic Home Price Index 1400 – US Aug. Consumer Confidence 1400 – US Jul. JOLTS Job Openings 1500 – US Fed’s Williams (voter) to speak 1600 – ECB Speakers Holzmann and others 0130 – China Aug. Manufacturing/Non-manufacturing PMI   Source: FX Update: USD suddenly on defensive ahead of data.
The USD/CHF Pair Is All Set To Revisit The Monthly Low

Forex: USD/CHF Is Growing For The Third Day In A Row!

Kenny Fisher Kenny Fisher 30.08.2022 16:22
USD/CHF is up for a third straight day. In the European session, the pair is trading at 0.9717, up 0.36%. The US dollar continues to show strength against most of the majors. The Swiss franc has fallen sharply, with USD/CHF climbing 360 points since August 16th. KOF Economic Barometer falls again The KOF Economic Barometer continued its downward trend, declining for a fourth straight month in August. The index dropped to 86.5, down from 90.1 in July and shy of the estimate of 89.0. Much of the August decline was related to consumer consumption, but the manufacturing sector is also showing weakness. Similar to the situation in other major economies, manufacturing activity has been hurt by supply chain disruptions and a lack of employees. Switzerland will release the August inflation report on Thursday. The estimate for August CPI is 0.2% MoM, after a 0.0% reading in July. The Swiss central bank (SNB), which is not shy about intervening in currency markets, will be watching carefully. Higher inflation means the Swissie has less purchasing power, which suits the SNB as it has a paramount interest in the Swiss currency remaining weak so that Swiss exports are competitive. In the US, the markets continue to digest Fed Chair Powell’s hawkish speech on Friday. The “read my lips” speech in which Powell firmly stated that there would be no pivot in policy appeared to have hit its mark, as equity markets took a tumble on Friday and again on Monday, although we are seeing a rebound today. The Federal Reserve holds its next policy meeting on September 21st and we can expect plenty of discussions as to whether the Fed will hike by 50 or 75 basis points. CME’s FedWatch has pegged the likelihood of a 75bp move at 66.5%, with a 33.5% likelihood of a 50bp move. These numbers are sure to change in the coming weeks, as the markets hunt for clues as to the Fed’s plans. . USD/CHF Technical USD/CHF is testing resistance at 0.9720. Next, there is resistance at 0.9760 There is support at 0.9642 and 0.9524 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.   Source: Swiss franc falls to 5-week low
Dollar Could Gain Momentum from Hawkish Fed Stance

The Market Reacts With Declines After Jerome Powell's Speech

InstaForex Analysis InstaForex Analysis 30.08.2022 16:25
Risk appetite fell on Monday so stock indices and US treasure yields dropped sharply. Most likely, market volatility surged because Fed Chairman Jerome Powell was hawkish in terms of the prospects for further rate increases, which, oddly enough, also led not to the growth of dollar, but to its weakening, which is rather unusual. Possibly, the decrease in dollar is simply caused by the closing of long positions as the market is already confident that rates will rise by 0.75% to 3.25% in September. Another factor could be the impending rate hike by other central banks, which may eventually lead to the reversal of market sentiment. Today, trading in the European stock market began mixed. The focus is on Germany's data on consumer inflation, where prevailing positive sentiment is likely to return risk appetite, while at the same time lower dollar demand. In the forex market, activity will increase before the start of the US session because of extremely high volatility. Forecasts for today:       XAU/USD The pair is trading above 1730.00. However, increased selling pressure will bring the quote towards 1713.70. GBP/USD The pair is consolidating above 1.1685. Increased selling pressure will push the quote to 1.1600.   Relevance up to 09:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320278
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

Forex: GBP/USD - UK M4 Money Supply And Mortgage Approvals Came In Better Than Expected!

InstaForex Analysis InstaForex Analysis 30.08.2022 16:48
Relevance up to 15:00 2022-08-31 UTC+2 The GBP/USD pair rebounded but the price action signaled exhausted buyers already. The price increased a little only because the Dollar Index was in a corrective phase in the short term. It was trading at 1.1704 at the time of writing and it seems under strong bearish pressure. Fundamentally, the UK M4 Money Supply and the Mortgage Approvals came in better than expected while the Net Lending to Individuals was reported at 6.5B below 6.6B expected. On the other hand, the US HPI and the S&P/CS Composite-20 HPI came in worse than expected. Later, the US CB Consumer Confidence is expected at 97.6 points while the JOLTS Job Openings could be reported at 10.37M. GBP/USD Flag Formation! Technically, the pair rebounded after its massive drop. The price action developed an up-channel pattern that could announce a downside continuation. Now, it is challenging the uptrend line and it could reach the 1.1685 static support as well. Staying above these downside obstacles may signal new bullish momentum. It remains to see how it will react after the US high-impact data. GBP/USD Forecast! A valid breakdown below the uptrend line and through the 1.1685 may signal a deeper drop. Dropping, closing, and stabilizing below the S1 (1.1670) could bring short opportunities. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Source: Forex Analysis & Reviews: GBP/USD: bearish pattern in play
Technical Analysis Of Natural Gas Price's Movement

Further Decline In Gas Prices May Create The Foundation For EUR/USD Correction

InstaForex Analysis InstaForex Analysis 30.08.2022 17:00
Relevance up to 14:00 2022-08-31 UTC+2 Currently, most investors are confident that the USD index rally will continue, and the trend in US stock indices will remain bearish. They also ignore the increase in the likelihood of a 75 bps increase in the ECB deposit rate in September to over 50%, and the reluctance of the VIX fear index to climb well above 25, signaling no panic in the stock market. Going against the crowd is always dangerous, there is a risk of being burned at the stake, but trends break at the very moment when the majority is sure that they are right. After Jerome Powell's speech at Jackson Hole, the Fed's position became more than transparent. Regardless of the further dynamics of inflation, the Central Bank intends to raise rates, as a pause in this process can turn into sad consequences. Entrenched high prices and a deep recession. The Fed is ready to sacrifice the labor market, so I would venture to assume that the August employment statistics are unlikely to dot the I. Everything will depend on inflation data on September 13. That's when it will become clear whether the rate will increase by 50 or 75 bps at the next FOMC meeting. This circumstance, in my opinion, transfers the initiative from the Fed to the ECB. Indeed, European inflation data is released earlier, and the Governing Council meeting is approaching. They are clearly worried about the fall in EURUSD, which accelerates energy prices, raises inflation expectations and pushes the eurozone into recession. Christine Lagarde and her colleagues must do something. And the best option seems to be a 75 bps increase in the deposit rate on September 8. Dynamics of European inflation expectations It is about such a step that the heads of the central banks of Austria and the Netherlands, Robert Holzmann and Klaas Knot, are talking about. Nevertheless, investors are used to seeing them as the main hawks of the Governing Council, and the statement by ECB chief economist Philip Lane that monetary policy should be tightened gradually to look at the reaction of the economy, brought down the EURUSD bulls' momentum. In fact, it was Lane who put forward the proposal to raise the deposit rate by 50 bps in July, although before that, he also talked a lot about gradualism. In my opinion, a further decline in gas prices against the backdrop of growing occupancy of European storage facilities and an increase in LNG imports from China, coupled with the acceleration of European inflation and the "hawkish" rhetoric of ECB officials, will create the foundation for EURUSD correction. The dollar in the current situation will be able to draw strength only in the fall of the S&P 500. However, the stock index is able to jump up in response to weak employment statistics in the US. Technically, on the 4-hour chart, the consolidation of EURUSD above the pivot point at 0.999 and moving averages indicates the seriousness of the intentions of the bulls. The longs formed on the break of resistance at 0.9985–0.9999 are kept and increased in case of updating the local high at 1.0055 or on a rebound from parity. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: Euro goes against the crowd
The EUR/USD Price May Fall Under 1.0660

EUR/USD (Euro To US Dollar) - Both 50bp And 75bp Variants Are Possible

Kenny Fisher Kenny Fisher 30.08.2022 21:40
EUR/USD has edged higher for a second straight day, but has pared today’s gains. In the North American session, EUR/USD is trading at 1.007, up 0.09%. German inflation rises to 7.9% German CPI is estimated to have climbed to 7.9% YoY in August, up from 7.5% in July and above the forecast of 7.8%. The jump in inflation was driven by the usual suspects, energy and food prices. Energy prices jumped 35.6% and food prices rose 16.6% compared to a year earlier. With the war in Ukraine raging on and Europe facing a possible energy shortage in the winter, it’s hard to envision inflation in the bloc easing anytime soon. The ECB raised interest rates in July but inflation will not be curbed by the current benchmark rate of 0.50%, well below the neutral rate of around 1.5%. The US dollar has showed some strength since Fed Chair Powell’s no-nonsense, hawkish speech at Jackson Hole. Powell’s message to the markets remained consistent with the Fed’s pledge to continue raising rates until inflation is brought down, but this time the markets paid attention, as equity markets fell and the dollar gained ground against the major currencies. The glaring exception was the euro, which has managed to hold its own against the greenback. The euro has received support as expectations rise that the ECB could deliver a supersize 75bp increase at its September meeting. On Friday, ECB officials attending the Jackson Hole Symposium noted that inflation levels remained high and urged the ECB to deliver a September rate hike of 50 or even 75 basis points. Today’s German inflation report will put added pressure on the ECB to consider a 75bp move, as inflation continues to accelerate. On Wednesday, the eurozone releases CPI for August, with an estimate of 9.0% YoY, which would be a notch higher than the 8.9% gain in July. If inflation hits 9.0% or higher, the euro could gain ground as expectations for a 75bp hike will increase. EUR/USD Technical EUR/USD has support at 0.9985 and 0.9880 There is resistance at 1.0068 and 1.0173 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro steady as German inflation accelerates - MarketPulseMarketPulse
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

British Pound (GBP) Is Affected By The Prospect Of British Economy

Kenny Fisher Kenny Fisher 30.08.2022 21:43
Sterling falls to 2.5 year low The British pound is down sharply today as the downward trend continues. In the North American session, GBP/USD is trading at 1.1629, down 0.65%. We haven’t seen the pound at such low levels since March 2020. A gloomy outlook for the UK economy continues to weigh on the pound. The Bank of England has projected that inflation will hit 13%, and some forecasts expect inflation to rise even higher. On Monday, Goldman Sachs said it expected the UK to tip into a recession in the fourth quarter of 2022 and projected that the economy would decline by 0.6% in 2023. The US dollar flexed some muscles on Friday, after a hawkish speech from Fed Chair Powell at the Jackson Hill Symposium. Powell’s brief speech went straight to the point, stating that the Fed would continue raising rates until inflation was brought under control. Powell pointedly said that one or two weak inflation reports would not cause the Fed to pivot on its aggressive policy, a veiled reference to the market euphoria which followed after July’s inflation rate dropped unexpectedly, as speculation rose that the Fed would make a U-turn on policy. Powell’s speech removed any doubts about the Fed’s plans to continue raising rates, but the size of the increases will depend on key economic data, not just inflation. Overshadowed by Jackson Hole, US Personal Income and Spending data was weaker than expected. As well, the Core PCE index, the Fed’s preferred inflation indicator, fell to 6.3%, down from 6.8% and below the forecast of 7.4%. The US economy is showing signs of slowing down, and the markets will be keeping a close eye on Friday’s non-farm payroll report. If NFP is weaker than expected, we could see the likelihood for a 50 basis point increase. Currently, the markets have priced in a 66.5% likelihood of a 75bp hike, versus 33.5% for a 50bp increase, according to CME’s FedWatch. GBP/USD Technical  GBP/USD is testing support at 1.1672. Below, there is support at 1.1604 There is resistance at 1.1786 and 1.1854     This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. British pound can't find its footing - MarketPulseMarketPulse
No To Hunger - Ships From Ukraine Arrived To Africa, Canada's Crops Feel Better

No To Hunger - Ships From Ukraine Arrived To Africa, Canada's Crops Feel Better

Saxo Strategy Team Saxo Strategy Team 31.08.2022 08:52
Summary:  US stocks move below the key 4,000 level for the first time since July, while also moving under the 50-day moving average, signifying the S&P500 could gain momentum to the downside and potentially retreat to the low set in June. Selling pressure in GBP ramps up, crude oil prices tumble from fresh highs, iron ore retreats below the key $100 level and could remain contained for the year ahead, meanwhile, coal prices remain in record territory. The first shipment of wheat out of Ukraine arrives in Africa. In company news, we cover the latest in the EV space, plus what the latest is from Crowdstrike, the cybersecurity giant. Here is what's happening in markets right now, and what to consider next. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) again on the back foot, being pressured lower US equities fell for the third straight day on Tuesday, with the S&P and the Nasdaq both falling 1.1%. Pressure fell upon equities last night for several key reasons; firstly the market had another reality check - rate rises will intensify. New York Fed President John Williams said on Tuesday restrictive policy will be needed to slow demand, and rate hikes have not achieved that yet. Over in Europe a policy makers said the ECB should make a 75 basis-point hike at its September meeting. All in all, this caused short-term rates, the US 2-year Treasury yield, to rise to its highest level in almost 15-years, as traders bet more rate hikes are coming. This pressured commodity prices, which pulled back on fears rate hikes will soften demand. On top of that OPEC+ didn’t discuss production cuts. So Oil fell ~6%. WTI settled around ~$91.64. As such, the Oil and Gas sectors fell 4%, adding the most weight to Tuesday’s drop. Secondly, equities were also pressured on fears that geopolitical tensions could escalate, after Taiwanese soldiers fired shots to ward off civilian drones flying close to islands near China. And Thirdly, equities are also facing end of month rebalancing; where investors typically take profits from top performers and buy laggards to bring their assets allocations into alignment. Noteworthy movers in US equities   Retailers Big Lots (BIG:xnys) and Best Buy (BBY: xnys) surged 11.8% and 1.6% respectively after reporting Q2 earnings that beat market expectations.  Big Lots’ narrower loss was attributed to margin improvements from cost controls. Likewise, Best Buy’s better-than-expected earnings was largely due to cost controls, as sales fell nearly 13% YoY in the quarter. The discount retailers indicated they’re copping the brunt of trade-downs, while they also warned about a pullback in consumer spending.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas)   Treasury yields were little changed on Tuesday, with the 2-year yield rising modestly by 2bps to 3.44% as the market continued to price in a 75bp Fed hike at the September FOMC.  The stronger JOLT job openings data and consumer confidence data, plus Fed officials’ reiteration of determination to bring inflation back under control contributed to the bids to the front end of the curve. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg)   Hong Kong and mainland China equities pulled back moderately, Hang Seng Index -0.37%. Tech names were weak.  Hang Seng Tech Index plunged as much as 3% before bouncing off the low to finish the day only 0.5% lower.  The news of Shenzhen and other cities stepping up pandemic control measures fuelled the risk-off sentiment that has already been hanging over the market.  Share prices of Chinese developers were broadly lower as mortgage repayment boycott cases increased to 103 cities and 347 development projects.  According to the Ministry of Industry and Information Technology, smartphone sales in China fell 2.9% YoY in the period between Jan and July.  Despite reporting solid 1H results, China automaker, BYD (01211:xhg) slid 0.5% following an exchange filing showing that Buffett’s Berkshire Hathaway reduced its stake in the company. Auto retailer, Zhongsheng (00881:xhkg) plunged by 7%.  In A-shares, mining stocks, gas, electric equipment, and auto parts underperformed. In U.S. trading, Hang Seng Index Futures tumbled 2.3% in a confluence of factors including Taiwanese soldiers on front-line islands firing shots at civilian drones believed flying from mainland China, a newswire report saying the U.S. regulator, PCAOB, selected Alibaba (BABA:xnys/09988:xhkg) for audit inspection commencing in September, Berkshire Hathaway reducing holdings in BYD, Covid-related lockdown concerns, and the continuous decline of the U.S. equity markets.  Compared to their closes in Hong Kong, ADRs of BYD fell by 4.2%, and Alibaba by 3.3%. Selling pressure in GBP ramps up Despite a relatively stable USD, pessimism built in sterling after Goldman Sachs hinted that peak inflation in the UK could reach 22% in early 2023 and downgraded its GDP forecast. GBPUSD touched lows of 1.1622 before settling around 1.1660. EURUSD was stable-to-stronger given the stabilising gas situation and the hawkish ECB rhetoric pushing for a jumbo rate hike at the September meeting again. EURGBP pushed higher to 0.8600, its strongest levels since early July.   Crude oil prices (CLU2 & LCOV2)   Crude oil was down over 6% after recording the best day in six weeks on Monday when Brent traded above $105/barrel. The reversal yesterday came on the back of a general improvement in risk appetite as European gas prices plunged. This will likely lower diesel prices, reducing the demand for oil. Fresh lockdown announcements in key Chinese cities also raised demand concerns. Meanwhile the supply situation looked better in the near-term amid reduced Iraq supply disruptions risk and rumours of a potential Iran agreement. Oil inventories also surprised with 593k barrel rise. Reports that OPEC+ not considering a production cut supported price action in the Asian morning hours, and WTI futures reversed to inch back above$92/barrel. Further volatility can be expected in European gas prices today, and that could spill over to crude oil as well, as Nord Stream 1 goes into maintenance.  Gold (XAUUSD)   Gold continues to have trouble finding direction amid a hawkish Fed speak but rising geopolitical tensions. A host of Fed speakers were on the wires yesterday, and all of them focused on inflation, suggesting aggressive action from the Fed will continue. Meanwhile, Taiwanese soldiers fired shots to ward off civilian drones flying close to islands near China, spooking fears that tensions could escalate. Strong US economic data both from consumer confidence and JOLTS jobs opening also bumped up the US 10-year yields, and Gold was seen dipping below the key 1729 support on Tuesday, coming in sights of the one-month lows.  First shipment of wheat out of Ukraine arrives in Africa   The first export of wheat from Ukraine since the invasion of Russia in February has arrived in Djibouti, east Africa. The 23,000-ton shipment is bound for Ethiopia which is struggling with ongoing drought and conflict. A recent agreement between Russia and Ukraine, mediated by the UN and Turkey, has allowed 50 ships to resume shopping grain around the world. Wheat harvest was also seen picking up in Canada as yields improved amid better weather conditions, helping to ease supply worries in the key agricultural crop.  What to consider?  US consumer confidence and JOLTS data came in better-than-expected   US consumer confidence rose to its highest level in three months to come in at 103.2 in August from 95.7 previously. Both the expectation index and present situation index saw improvements, rising to 75.1 (prev. 65.6) and 145.4 (prev.139.7), respectively. This could be partly driven by lower pump prices, but also signals that a healthy job market report may be coming this week. The 1-year ahead inflation expectation fell to 7.0% (prev. 7.4%), which was a seven-month low. Meanwhile, US JOLTS rose to 11.239mln in July, above the expected 10.45mln and previous 10.698mln, hinting that the labor market remains tight.  German CPI’s upside surprise, ECB still leaning towards front-loading   Germany CPI came in higher than expected at 7.9% YoY (vs. 7.5% prev and 7.8% expected) while the MoM print was slightly softer at 0.3% (vs. 0.9% prev and 0.4% expected). Food and energy price gains underpinned, but fuel rebate helped to take some pressure off. Meanwhile, ECB speakers continued to push for more front-loaded rate hikes, in contrast to ECB’s Lane calling yesterday for more step-by-step increases and signaling recession concerns yesterday. ECB’s Knot however clearly said he’s leaning towards a 75bp hike in September but he is open to a discussion, as did Muller. Wunsch also vouched for rates in restrictive territory, and Vasle (non-voter) said the September rate hike should exceed 50bps.  The Chinese Communist Party will hold its national congress on Oct. 16   The politburo meeting held on Tuesday decided to propose to the Central Committee of the 19th National Congress to schedule the next once-every-five-year National Congress of the Chinese Communist Party (the “CCP”) for Oct 16, 2022.  The 2,300-odd delegates attending the National Congress will elect the CCP’s Central Committee which consists of 205 full (voting) members and 170 alternate (non-voting) members. The full members of the Central Committee will elect among themselves the 25 members of the Politburo and the members of the Politburo will then choose among themselves the seven members of the Politburo Standing Committee, who are the highest leaders of the CCP.  The National Congress will review the CCP’s work over the past five years and formulate policy directions and action plans for the next five years.   Taiwan shot at drones flying close to its offshore islands    Taiwan’s authorities said in a statement Taiwanese soldiers fired shots in three incidents on Tuesday to ward off drones flying close to small offshore islands controlled by Taiwan. The statement did not identify where these civilian drones were from but said that the drones flew away in the director of Xiamen, a coastal city of mainland China. Taiwan’s President Tsai Ing-wen previously urged Taiwan’s military force to take “appropriate by necessary” actions to drive away civilian drones having been buzzing Taiwan’s military installations on its front-line islands.   Iron ore falls below the key $100 level   The key steel ingredient fell below $100 for the first time in five weeks, on signs of China’s steel industry worsening. Steel production will fall by more than 8 million tons in the second half, due to plans to restrict output in the key hub of Tangshan. This is according to Minmetals Futures. That cut in production equates to a decline of 10%. China’s steel industry is reeling amid a property crisis, that’s showing no promise of turning around any time soon. Authorities in Tangshan, near Beijing also decided to cut production at a recent meeting, Meanwhile a major steel maker, Angang Steel says it sees tough conditions persisting through the end of the year. This backs up BHP’s comments last week, where BHP’s CFO told Saxo in an one-on-one interview, that iron ore demand will remain limited in the year ahead, not able to outpace supply. This means iron ore pricing will remain capped. Coal prices are back at record highs, amid the energy crisis   With global electricity prices skyrocketing and likely to worsen, and nothing being resolvable, the coal price is being bid again, pushing it once again back to record territory. For consuemrs, unfortunately this means higher power bills, especially in those regions dependent on coal for electricity (India, China, Australia). With the coal futures price, and the spot coal price moving to higher levels, this supports future earnings and cashflows in coal companies. As such, many coal stocks are trading at record highs. Shares in Australia’s largest pure-play coal company Whitehaven Coal (WHC) hit a brand-new record all-time high yesterday, A$8.15, but today is facing selling pressure (profit taking perhaps). Other stocks that make money from Coal include BHP in Australia. In Asia, Bayan Resources, and Yankunang Energy, as well as Shaanxi Coal. Alibaba has been selected for audit inspection by the PCAOB   According to Reuters, Alibaba (BABA:xnys/09988:xhkg) has been selected, together with some others, by the Public Company Accounting Oversight Board (the “PCAOB”) for audit work inspection commencing in September.  Buffett’s Berkshire Hathaway reduces its stake in the Chinese EV maker BYD   Warren Buffett’s Berkshire Hathaway sold around 1.33 million shares of BYD (01211:xhkg) at an average price of HKD277.10, bringing its stake in BYD to 19.92% of the total issued H shares or 7.51% of the total issued share capital on Aug. 24.  Comparing the ending balance after the sale to the ending balance as of June 30 revealed in BYD’s interim results announcement released earlier this week, Berkshire Hathaway had previously undisclosed sale of 4.95 million shares since July.  Assuming the 4.95 million shares were sold at the average closing prices in July and August, Berkshire Hathaway cashed out a total of about HK$1.8 billion from the sale of these 6.28 million shares over the past two months which was similar to the aggregate cost that Berkshire Hathaway had initially paid for the whole amount of 7.73% stake (or 20.49% of H shares) in BYD. Covid cases resurface in 31 provinces in China   China’s southern technology hub, Shenzhen shut down the world’s largest electronics retailing marketplace in response to a surge of Covid cases. The cities of Dalian, Chengdu, Yiwu, and Sanya are also under some sort of restriction. Baidu reported inline Q2 results   Baidu’s (BIDU:xnys/9888:xhkg) revenue fell 5% YoY to RMB 29.65 billion, largely in line with consensus estimates. Its operating margin came in at 22%, contracting 5 percentage points YoY, due to sluggishness in the high-margin ads business and a revenue mix shifting toward lower-margin non-ads business.  Q2 Non-GAAP EPS increased 2% YoY to RMB15.79, well above analysts’ RMB9.82 median forecast.      American companies have a downbeat outlook on doing business in China   The US-China Business Council’s annual member survey showed that a record 21% of the 117 multinational companies headquartered in the US said they were downbeat on their business in China for the next five years, (according to those surveyed). 90% of respondents said their businesses were affected by lost sales and uncertainty over reliable deliveries.   China is set to tighten scrutiny of companies seeking to raise funds through issuing offshore bonds   According to a consultative draft document on the portal of the National Development and Reform Commission, China is planning to require companies that seek to issue bonds offshore to register, report and receive approval from the authorities for debts that have tenors exceeding one year.   China’s official PMIs are scheduled to be released today   The median forecasts of economists surveyed by Bloomberg expect China’s official NBS manufacturing PMI to edge up to 49.2 in August from 49.0 in July, while firmly remaining in contractionary territory. Heatwaves and drought-induced power curbs have caused Sichuan and Chongqing to shut-down manufacturing activities for six days and eight days in August respectively. The stepping up of pandemic controls in some cities could also affect the survey negatively. The median forecast for August official NBS non-manufacturing PMI is 52.2, down from last month’s 53.8 but remains in expansionary territory.   Crowdstrike, the cybersecurity giant reported better than expected results   Crowdstrike shares were higher after hours in the US, following a 0.7% rise in the regular session after reporting second-quarter results that topped analysts expectations, while it raised its forecasts for the year. The cyber security giant reported revenue rose to $535 million, up from the $337.7 million in the year-ago quarter. Annual reoccurring revenue grew 59% to $2.14 billion compared to the same time last year. This is a somewhat of a testament that cyber security is a defensive industry that is able to do well, regardless of economic conditions weakening. For a global look at markets – tune into our Podcast. Source: APAC Daily Digest: What is happening in markets and what to consider next – August 31, 2022
Taiwanese Soldiers Shooting At Civilian Drons And Other Factors Affecting Stock Markets

Taiwanese Soldiers Shooting At Civilian Drons And Other Factors Affecting Stock Markets

Saxo Strategy Team Saxo Strategy Team 31.08.2022 10:06
Summary:  Whiplash in global sentiment as the US equity market ended yesterday on a sour note at new local lows, only to see the mood brighten considerably in Asia, perhaps in part due to a massive plunge in crude oil prices. Sentiment toward the euro has certainly improved this week, as the single currency posted strong gains nearly across the board yesterday on another steep drop in natural gas prices and fresh hawkish rhetoric from an ECB member ahead of next Thursday’s meeting.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures reversed hard yesterday after pushing through above the 100-day moving average closing below the 4,000 level at 3,987. The culprit was more hawkish comments from both the Fed and ECB on top of very strong JOLTS Job Openings supporting the view that the labour market remains tight, likely leading to more wage pressures. Also, the S&P CoreLogic house index for June showed that house prices slowed down significantly on m/m basis highlighting the negative impact from higher mortgage rates. S&P 500 futures are trading back above the 4,000 level this morning with the 50-day moving average sitting around the 4,017 level is a key support level to watch today. Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) In U.S. trading the night before, Hang Seng Index Futures tumbled 2.3% in a confluence of factors including Taiwanese soldiers on front-line islands firing shots at civilian drones believed flying from mainland China, a newswire report saying the U.S. regulator, PCAOB, selected Alibaba (BABA:xnys/09988:xhkg) for audit inspection commencing in September, Berkshire Hathaway reducing holdings in BYD, Covid-related lockdown concerns, and the continuous decline of the U.S. equity markets. Hang Seng Index gapped down by nearly 2% at the Asian market open but managed to crawl back all the loss and turn to a gain of 0.5% at the time of writing. The tech space led the charge higher, Hang Seng Tech Index (HSTECH.I) surged by 2.4%. In A shares, CSI 300 reversed the downtrend in the morning and bounced to 0.8% higher. Surging euro take the single currency higher across the board The EURUSD exchange rate was stable-to-stronger as the EU continues to build natural gas supplies ahead of the winter and as the price for gas dropped sharply yesterday again. More hawkish comments from the ECB, this time from Nagel, who argued for “front-loading” rate hikes, also helped the euro higher. The Euro was higher across the board, with EURCHF surging nearly to 0.9800 and EURUSD staying above parity despite the USD strength elsewhere. The bigger level in the latter is toward the 1.0100 local range high and former range low. Next Thursday’s ECB will be critical for the euro outlook, with the market leaning for a 75 basis point hike. Selling pressure in GBP ramps up Pessimism built in sterling after Goldman Sachs hinted that peak inflation in the UK could reach 22% in early 2023 and downgraded its GDP forecast. GBPUSD touched lows of 1.1622 before settling around 1.1660.  EURGBP pushed higher to 0.8600, its strongest level since early July. Crude oil prices (CLU2 & LCOV2) Crude oil on track for a third monthly drop took a 7.5% tumble on Tuesday after recording the best day in six weeks on Monday. Both highlight a market suffering from low liquidity and lack of direction. Brent has returned to $100 with the slower growth and demand narrative once attracting sellers. In addition, a two-day plunge in EU gas prices also weighing on sentiment while new Covid infections and the worst heatwaves in decades in China added to the negative sentiment. On the supply side the Iraq turmoil is not having any impact on oil supplies while an Iran nuclear deal still lingers. Ahead of today’s EIA weekly stock report, the API last night reported a 600k barrels increase in oil stocks with big draws seen in gasoline and diesel. Further volatility can be expected in European gas prices over the coming days, and that could spill over to crude oil as well. EU Gas traders watch Nord Stream 1 and political initiatives to suppress power prices Dutch TTF benchmark gas which touched €350/MWh on Friday trades €270/MWh on the opening with focus on Gazprom’s announced 3-day closure of the NordStream 1 pipeline for maintenance, and whether it will reopen on September 3 or remain shut as part of Putin’s gas war against Europe. The closure coinciding with maintenance in Norway, including at the giant Troll fields. NordStream 1 currently supplies Europe with 33 mcm/day compared with its capacity of 167 mcm/day. A re-opening on September 3 could send prices tumbling further towards €200/MWh, a level still high enough to curb demand. Gas has also been losing altitude in response to rapidly filling storage sites, although daily flows will be needed throughout the winter, and signs the EU is preparing to intervene to dampen soaring power prices. Gold (XAUUSD) Gold remains troubled by the recent hawkish shift by the US Federal Reserve, but the downside pressure has eased a bit by a weaker dollar and geopolitical tensions. The price nevertheless trades below support-turned-resistance at $1729/oz with $1715/oz support preventing another attempt to challenge key support at $1680/oz. A host of Fed speakers were on the wires yesterday, and all of them focused on inflation, suggesting aggressive action from the Fed will continue. Meanwhile, Taiwanese soldiers fired shots to ward off civilian drones flying close to islands near China, spooking fears that tensions could escalate. What is going on? First shipment of wheat out of Ukraine arrives in Africa The first export of wheat from Ukraine since the invasion of Russia in February has arrived in Djibouti, east Africa. The 23,000-ton shipment is bound for Ethiopia which is struggling with ongoing drought and conflict. A recent agreement between Russia and Ukraine, mediated by the UN and Turkey, has allowed 50 ships to resume shopping grain around the world. Wheat harvest was also seen picking up in Canada as yields improved amid better weather conditions, helping to ease supply worries in the key agricultural crop. US consumer confidence and JOLTS data came in better-than-expected US consumer confidence rose to its highest level in three months to come in at 103.2 in August from 95.7 previously. Both the expectation index and present situation index saw improvements, rising to 75.1 (prev. 65.6) and 145.4 (prev.139.7), respectively. This could be partly driven by lower pump prices, but also signals that a healthy job market report may be coming this week. The 1-year ahead inflation expectation fell to 7.0% (prev. 7.4%), which was a seven-month low. Meanwhile, US JOLTS rose to 11.239mln in July, above the expected 10.45mln and previous 10.698mln, hinting that the labor market remains tight. German CPI’s upside surprise, ECB still leaning towards front-loading Germany CPI came in higher than expected at 7.9% YoY (vs. 7.5% prev and 7.8% expected) while the MoM print was slightly softer at 0.3% (vs. 0.9% prev and 0.4% expected). Food and energy price gains underpinned, but fuel rebate helped to take some pressure off. Meanwhile, ECB speakers continued to push for more front-loaded rate hikes, in contrast to ECB’s Lane calling for more step-by-step increases on Monday and signaling recession concerns yesterday. THe ECB’s Nagel argued for front-loading rate tightening and Knot clearly said he’s leaning towards a 75bp hike in September, but he is open to a discussion, as did Muller. Wunsch also vouched for rates in restrictive territory, and Vasle (non-voter) said the September rate hike should exceed 50bps. Pricing for the ECB meeting next Thursday closed yesterday around +65 basis points. Taiwan shot at drones flying close to its offshore islands Taiwan’s authorities said in a statement Taiwanese soldiers fired shots in three incidents on Tuesday to ward off drones flying close to small offshore islands controlled by Taiwan. The statement did not identify where these civilian drones were from but said that the drones flew away in direction of Xiamen, a coastal city in mainland China. Taiwan’s President Tsai Ing-wen previously urged Taiwan’s military force to take “appropriate by necessary” actions to drive away civilian drones having been buzzing Taiwan’s military installations on its front-line islands. Crowdstrike reports better than expected results Shares were higher in US extended trading, following a 0.7% rise in the regular session after reporting second-quarter results that topped expectations, while it also raised its forecasts for the year. The cyber security giant reported revenue rose to $535mn, up from $337.7mn last year. Annual recurring revenue grew 59% to $2.14bn compared to the same time last year. This is a somewhat of a testament that cyber security is a defensive industry, as it is able to somewhat thrive regardless of economic conditions weakening. Chinese lithium miners are seeing explosive growth Tiangqi and Ganfeng, two of the world’s largest lithium miners, both reported very strong results seeing net income increasing multiples times from last year as lithium carbonate prices have risen 80% this year in China driven by supply shortages of lithium and extremely rapidly growing demand for electric vehicles. What are we watching next? The EU will hold an emerging energy meeting on 9 September This happens while the EU is set to meet its gas storage filling goal (80 %) two months ahead of target. Germany, which is one of the largest European economies most dependent on Russian gas, is also on track to meet its national storage goal before the deadline expires. In recent weeks, the EU has scaled up efforts in order to avoid energy rationing this winter. On this emergency meeting, Spain is expected to propose that the entire EU apply the ‘Iberian exception’ to set electricity prices. In mid-April 2022, the European Commission agreed that Spain and Portugal create a temporary mechanism to decouple the price of gas from that of electricity for a period of 12 months. Concretely, the price of gas was capped to an average of €50 per megawatt-hour. This resulted in electricity bills being halved for about 40 % of Spanish and Portuguese consumers with regulated rates. This could be applied at the EU scale. The Chinese Communist Party national congress commences on Oct. 16 The politburo decided to propose to schedule the next once-every-five-year National Congress of the Chinese Communist Party (the “CCP”) for Oct 16, 2022.  The 2,300-odd delegates attending the National Congress will elect the CCP’s Central Committee which consists of 205 full (voting) members and 170 alternate (non-voting) members. The full members of the Central Committee will elect among themselves the 25 members of the Politburo and the members of the Politburo will then choose among themselves the seven members of the Politburo Standing Committee, who are the highest leaders of the CCP.  The National Congress will review the CCP’s work over the past five years and formulate policy directions and action plans for the next five years.  Today is the first report of US ADP Payrolls Change using new methodology The ADP Research Institute and Stanford Digital Economy Lab have revised the methodology for the ADP’s monthly employment report, arguing that the new report will offer a better view on the labor market, with breakdowns of weekly data for the prior month and more data on changes in pay. Only time will tell whether the market will begin to trust this data more than the official nonfarm payrolls “establishment” survey. Earnings to watch Today’s US earnings focus is MongoDB expected to report 42% y/y revenue growth in FY23 Q2 (ending 31 July) with operating profit getting very close to break-even. The database company has been running positive cash flow from operations over the past two quarters, but investors would like to see operating income (includes share-based compensation) break-even as well. Today: MongoDB, Brown-Forman, Veeva Systems Thursday: Pernod Ricard, Broadcom, Lululemon Athletica, Hormel Foods Friday: BNP Paribas Fortis Economic calendar highlights for today (times GMT) 0755 – Germany Aug. Unemployment Change/Rate 0800 – Poland Flash Aug. CPI 0900 – Eurozone Flash Aug. CPI 1200 – US Fed’s Mester (voter) to speak 1215 – US Aug. ADP Private Payroll change 1230 – Canada Jun. GDP 1345 – US Aug. Chicago PMI 1430 – EIA's Weekly Crude and Fuel Stock Report 2300 – South Korea Q2 GDP 0145 – China Aug. Caixin Manufacturing PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 31, 2022
Summer's End: An Anxious Outlook for the Global Economy

Sentiment On US Equity Market Bounced More Than Expected

Saxo Bank Saxo Bank 31.08.2022 10:54
Summary:  Today we discuss a weak US equity market session yesterday as sentiment bounced more than expected in August, at least according to the Conference Board US Consumer Confidence survey. We also look at a far better expansion in Job openings than expected and an interesting measure of "sticky CPI" that continues to rise in the US. In commodities, we discuss the drop in oil prices, and plans possibly afoot in Europe to cap power prices. The equities focus is on BYD, Chinese lithium names, and MongoDB. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: US sentiment brightens, jobs market still looks strong
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

Forex: GBP/USD - Two Scenarios That May Happen. Check It!

InstaForex Analysis InstaForex Analysis 31.08.2022 11:03
Relevance up to 08:00 UTC+2 Trend analysis (Fig. 1). The pound-dollar pair may move upward from 1.1651 (close of yesterday's daily candle) to 1.1718, the 14.6% retracement level (blue dotted line). When testing this level, continued upward movement is possible to the resistance level 1.1759 (thick white line). Upon reaching this level, the price may rise to 1.1778, the 23.6% retracement level (blue dotted line). Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Weekly chart – up; Bollinger Bands – up. General conclusion: Today the price may move upward from 1.1651 (close of yesterday's daily candle) to 1.1718, the 14.6% retracement level (blue dotted line). When testing this level, continued upward movement is possible to the resistance level 1.1759 (thick white line). Upon reaching this level, the price may rise to 1.1778, the 23.6% retracement level (blue dotted line). Alternative scenario: from the level of 1.1651 (close of yesterday's daily candle), the price may move upward to 1.1718, the 14.6% retracement level (blue dotted line). In the case of testing this level, a downward movement is possible with the target of 1.1620, the lower fractal (blue dotted line).   Source: Forex Analysis & Reviews: Indicator analysis: Daily review of GBP/USD on August 31, 2022
The Markets Still Hope That The Fed May Consider Softer Decision

FX Market - Volatility? Today's ADP Is Like A Teaser Trailer For USD (US Dollar). EUR/USD Could Be Quite Stable Despite EU CPI Release

ING Economics ING Economics 31.08.2022 11:15
EUR/USD started reconnecting with its higher short-term rate differential this week, but more good news on the European gas story will be needed to close the undervaluation gap. In this sense, risks of a supply cutoff are set to rise as Nord Stream is shut for maintenance for three days. On the data side, watch ADP numbers in the US, CPI in EZ, and GDP in Canada Gas prices and European sentiment are about to face a major stress test as the Nord Stream pipeline shuts for three days USD: Eyes on new ADP methodology We have seen some divergence in G10 performance since the start of the week, as markets started to hold a slightly more relaxed view on the European gas supply story and the risk premium on highly affected European currencies – EUR and SEK in particular – partially shrank. However, gas prices and European sentiment are about to face a major stress test as the Nord Stream pipeline gets shut for maintenance today for three days, and there is growing concern that another reduction in supply or a complete cutoff in flows may follow at the end of the week. All this warns against getting too excited about a recovery in European currencies at this stage.    In the US, we’ll get a first snapshot of the jobs market in August with the release of ADP employment figures today. The report had been temporarily discontinued after the May release, and will now resume with an updated methodology and a wider range of data (including additional information on wages). It will be interesting to see whether the alleged higher accuracy of the new APD index will trigger a larger-than-normal market reaction. Surely, the timing couldn’t be more appropriate, as Jackson Hole saw a reiteration of the data-dependency rhetoric and markets are split between a 50bp and 75bp hike in September (67bp currently in the price). On the Fedspeak side, we’ll hear from Loretta Mester and Raphael Bostic today, as well as from the freshly-appointed Dallas Fed President Lorie Logan, who will become a voting member in 2023. We think the dollar direction today may mostly hang on ADP figures, although the underlying narrative should continue to be a moderately bullish one if nothing else because the two major alternative markets to the US one – Europe and China – remain broadly unattractive despite the partial easing in gas prices and a slump in Chinese PMIs proved not as bad as expected this morning. DXY reaching 110.00 in the coming days is still a tangible possibility. Francesco Pesole EUR: Watch for the resilient risk premium Following yesterday’s EUR/USD rebound, the pair closed some of its short-term undervaluation gap to around 3.0% from the 5.5% peak seen early last week, according to our calculations. What appears clear in the current EUR price action is that any reconnection with its more favourable short-term rates still needs to rely on an improvement in the European energy story. In other words, as the Nord Stream pipeline closure raises fresh risks of a complete supply cutoff, that process of realignment of EUR/USD with its 2-year swap rate differential (which is at the highest since March) may well halt, or be easily reverted. In this sense, the main highlight of the day in the eurozone – the aggregate CPI numbers for August – may not provide too much of a shock to EUR/USD. After all, the market’s pricing is quite firmly falling on the hawkish side of the spectrum when it comes to the ECB tightening cycle: 70bp priced in for September, 160bp by year-end. The market consensus is for a marginal acceleration in both headline and core acceleration today after Germany’s slightly above-expectations figures yesterday. Our view for the remainder of the week is that EUR/USD may struggle to break above 1.0100 and faces downside risks (i.e. a return below 1.0000) as the end of the Nord Stream planned closure over the weekend inches closer. Francesco Pesole CAD: Jobs numbers should endorse 75bp hike by BoC Commodity currencies have been hit particularly hard since the start of the week as oil prices remained pressured. In this segment, CAD and NOK weakness looks unlikely to last long in our view, as both currencies still have to fully benefit from the economic benefits of their positive terms of trade shock, which ultimately underpins sustained tightening by their local central banks. Today, Canada sees the release of 2Q GDP numbers, which should be quite encouraging: consensus is for +4.4% annualised quarterly growth. This may convince markets to fully price in a 75bp rate hike by the Bank of Canada next week (69bp currently in the price), a notion that should fuel a CAD recovery and send USD/CAD sustainably below 1.3000 despite some resilience in USD bullish momentum. Francesco Pesole CEE: Another reason for dovish NBP and weaker zloty Yesterday's National Bank of Hungary decision to hike rates by 100bps to 11.75% provided fresh impetus for the forint to move to the strongest levels since mid-August. The main reason for a stronger forint, however, is a set of liquidity measures the central bank wants to use to try to halve the liquidity surplus. The goal is quite ambitious, but this new set of measures shows a strong commitment by the National Bank of Hungary to tackle inflation. Of course, we need to see the details of these measures in order to assess the long-term effect on the forint. In the short term, however, it is clear that the forint will benefit from yesterday's decision in the coming days. On the other hand, market optimism may quickly fade, and the forint will return to weaker values. Overall, the cards are once again in the hands of the NBH. However, we believe that the market's attention will once again return to the topic of EU money and negotiations with the European Commission in the second half of September, which is still the main driver of the forint. Today, market attention will turn to Poland, where GDP and inflation data will be published. The first estimate of 2Q GDP came with a significant negative surprise and today's print should explain the reasons for the weak economy. August inflation is likely to show a slowdown in the annual inflation rate from 15.6% to 15.4%, which may give a false impression that inflation is starting to slow. However, we see this as just a summer pause before further growth. Nevertheless, both of today's numbers make the case for the NBP's dovish rhetoric that is holding back the hiking cycle. But it is negative news for the Polish zloty given still high market expectations. Therefore, we expect the zloty to weaken and return to the range of 4.760-4.780 EUR/PLN. Frantisek Taborsky Read this article on THINK TagsFX Daily FX Dollar Canadian dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

Sterling Pound (GBP) Problems: Weak Macroeconomic Data, Rising Inflation And The Threat Of Recession

InstaForex Analysis InstaForex Analysis 31.08.2022 11:49
Relevance up to 08:00 UTC+2 The British currency's efforts to rise above the current barriers are most often unsuccessful. The pound, having made another attempt to grow, ran into obstacles in the form of weak macroeconomic data, rising inflation and the threat of recession. At the beginning of this week, the British currency collapsed to its lowest level since March 2020. The reason is increased concerns about the UK's economic prospects. Against this background, market participants massively sold the pound. In the future, the pound sank even more, especially against the euro. The catalyst for this decline was the energy crisis that engulfed European countries and became the "fuel" for the expectation of a recession in the UK. According to analysts, the gloomy outlook for the British economy pushed the pound into a downward spiral. Currency strategists at Goldman Sachs responded to this situation by providing another forecast. However, it did not please the markets, as it implied a deterioration in the medium and long-term economic prospects of the country. Recall that this year the pound has fallen by more than 13% against the dollar, and this is not the limit. According to calculations by Goldman Sachs, in the fourth quarter of 2022, the UK will be gripped by a recession. At the same time, analysts lowered the forecast of GDP growth for 2023 to -0.6%. In the current situation, inflation in the UK will grow and exceed 20% at the beginning of next year, experts emphasize. The implementation of such a scenario is possible with a further increase in gas prices in Europe. Goldman Sachs analysts note that core inflation in the UK will peak at 22.4% if the marginal price of gas soars by 80%. This indicator is several times higher than the previous forecast for inflation, which was 14.8%. Commerzbank economists agree with them, who believe that a prolonged increase in prices for blue fuel raises the risk of a recession. Against this background, it will be much larger and longer than previously expected. In such a situation, pressure is mounting on the Bank of England, so the central bank "needs to find a balance between fighting the recession and high inflation rates," Commerzbank emphasizes. Amid galloping inflation, the British currency has a constant tendency to weaken. The tense economic situation is a kind of "black hole" for the pound, which deprives it of the opportunity to fully grow. According to the currency strategists of UOB Group, in the next few weeks the GBP/USD pair may collapse to 1.1630, although it is trying hard to stay afloat. The pound remains under pressure, risking testing the March 2020 low near 1.1410. Currently, this threat has weakened a bit, as the pound has managed to slightly grow. The GBP/USD pair was trading at 1.1681 on the morning of Wednesday, August 31, trying to hold on to the positions won. The pound's efforts were relatively successful: the GBP returned to a downward trend much more often. According to economists, in early autumn, the BoE, following its American and European counterparts, will raise interest rates (by 50 bps, to 2.25%). At the same time, experts do not rule out an additional increase in rates (by 25 bps) at the central bank's next meetings. Against this background, the fragile balance of the pound raises concerns of market participants. A serious pressure on the GBP/USD pair is exerted by a reduction in the prospects for economic growth in the UK. The pound receives relative support when macroeconomic data from the United States deteriorates. However, now the markets are expecting positive statistics on the American economy, so the pound's chances to rise are small. Company does not offer investment advice and the analysis performed does not guarantee results. Source: Forex Analysis & Reviews: GBP/USD: The pound is not a flower, but is reaching for new heights. There is no way to make them grow: it withers halfway
FX: The SNB Is Getting Its Stronger Swiss Franc Via Gains Against The Dollar

Forex: EUR/CHF - Selling Pressure Is Weakening!?

Kim Cramer Larsson Kim Cramer Larsson 31.08.2022 12:04
EURCHF - Source: Saxo Group On the weekly chart EURCHF has formed a Doji Evening bottom and reversal pattern – unless the price collapses before the Friday close resulting in a negative end to the week. The Doji Evening indicates a reversal which could take EURCHF to the resistance at around 0.72. A close above and parity is to be tested with a possible spike up to 10.01. The bottom and reversal scenario is supported by divergence on RSI. Source: Saxo Group On monthly chart EURCHF has found support at the 0.618 Fibo retracement at 0.9657. The Shoulder-Head-Shoulder pattern described in previous analysis will still be intact if we get a bounce to around 1.00-1.01.   Source: Saxo Group   Source: Technical Update - EURCHF bottom and reversal pattern indicates rebound to around parity
Where Are Dollar (USD) And Gold (XAUUSD) At The End Of The Summer

Where Are Dollar (USD) And Gold (XAUUSD) At The End Of The Summer

Conotoxia Comments Conotoxia Comments 31.08.2022 12:27
The end of the month is often a time for summaries. In addition, the end of August is also the end of the vacations - how hot, not only in the weather but also in the economy and financial markets. So let's turn to a brief summary of events and possible prospects for the fall and winter. From the point of view of the financial markets, the main topic seems to be where interest rates in the United States will go in time for the end of the year and where they will be next year. At the moment, the market seems to be pricing the possibility of a rate hike on September 21 by 75 bps at almost 70 percent. Thus, the range for the Fed rate could rise to 3.00-3.25 percent. This, according to investors, may not be the end of the hike cycle. This one may end at 3.75-4.00 percent, a range that could be reached in early 2023. The rise in expectations for rate hikes in the US may have affected the US dollar and gold prices recently. The USD index appears to have completed its third consecutive month of gains in August. Since the beginning of the month alone, the EUR to USD seems to have lost more than 2 percent, and the British pound more than 4 percent, while looking at the change in rates since August 2022, the EUR and GBP could lose around 15 percent, being the weakest currencies among the world's major currencies, except for the Japanese yen, which seems to have recorded a loss of 20 percent in a year. The currencies that could lose the least to the USD on a monthly and yearly basis seem to be AUD and CAD. It looks like the strong dollar and relatively high expectations of interest rate hikes by the Fed may be leaving their mark on the gold market. The price of bullion appears to have fallen for the fifth month in a row. In August alone, gold may have declined by 2.75 percent, while in relation to the summer of last year, the price drop may be more than 4.5 percent. This still seems to be a small slide in relation to silver prices, which may be 23 percent lower on an annual basis. How the USD and the market's pricing in it may behave in the fall remains an open question. On the one hand, the hiking cycle by the Fed may already be fairly well priced by the market. In addition, rate hikes in the Eurozone, the UK or Australia may be more aggressive than in the US, which from an interest rate perspective could support the EUR, GBP and AUD. However, especially for the former two currencies, the other side remains - the energy crisis. In this situation, interest rates alone may not help if gas or electricity has to be rationed. Nevertheless, for the moment, when the market may be discounting the worst-case scenario for Europe, a new catalyst would be needed in the US, to support the USD this fall. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Dollar with the third month of gains. Gold with the fifth month of declines
Further Downside Of The AUD/JPY Cross Pair Is Expected

Japanese Yen (JPY) And Australian Dollar (AUD) Are Still Standing!

Marc Chandler Marc Chandler 31.08.2022 12:41
Overview:  The rise in global interest rates continues. The US 10-year yield is a few basis points to near 3.15% and European benchmarks are mostly 5-6 bp higher. Of note, the sharp sell-off in UK Gilts is being extended. Yesterday’s 10 bp rise has been followed by another 14 bp surge today. Italian bonds are also getting hit. The 10-year yield is up a little more than 10 bp. The US dollar is mostly firmer against the major currencies, though the yen and Australian dollar are little changed. Among the emerging market currencies, a small number of Asian currencies, including the Chinese yuan and South Korean won are firmer, but most are under pressure. Equity markets in the Asia Pacific region were mixed, but the downside bias is evident in Europe, where the Stoxx 600 is lower for the fourth consecutive session and seven of the last nine. It is at new lows since mid-July. US futures are narrowly mixed and have a three-day loss in tow. Gold is also making new lows for the August and traded at $1711 having been above $1800 in the middle of the month. Iraq says its exports will not disrupted by the violent demonstrations helped the October WTI contract reverse lower yesterday (possible key downside reversal) and today it is testing the 200-day moving average near $89. US natgas is steady after falling 3.3% yesterday. Europe’s Dutch benchmark is up nearly 5% to snap a three-day slide of over 20%. Iron ore jumped nearly 3.8% to resurface above $100 and halt the two-day slide of almost 8%. December copper is slipping lower for the fourth session and is trading near four-week lows below $354. December wheat is slipping further after falling 2.7% yesterday.  Asia Pacific China's composite August PMI eased to 51.7 from 52.4. The contraction in the manufacturing sector continued with the PMI below 50 for the second consecutive month (49.4 vs. 49.0). The drought, power outages, Covid disruptions, and the ongoing drag from the end of the property bubble are hobbling the economy. The drop in supplier delivery times (49.5 from 50.1) are illustrative. Output and new orders continued to fall. The non-manufacturing PMI slowed to 52.6 from 53.8. Construction, reflecting, the emphasis of government efforts on manufacturing remained a bright spot at 56.5, albeit down from 59.2 in July. Japan's industrial production and retail sales were better than expected. Industrial production has surged 9.2% in June (month-over-month) in a response to the re-opening of Shanghai from Covid lockdowns and many expected a small pullback in in July. Instead, the preliminary estimate has it growing by another 1% in July. Autos, boilers, and turbines output grew, according to the report. Retail sales rose by 0.8% in July, more than twice the median in Bloomberg survey after the June series was revised to show a 1.3% decline rather than 1.4%. Autos, food, and beverages led the better-than-expected report. Today's data suggests a firm start to Q3. Economists expect the world's third-largest economy to expand by around 2.0% in Q3. The US claims, and echoed by many media outlets, that it is not seeking to change the status quo about Taiwan, but that Beijing is. Beijing claims that it is the US that is the antagonist. Both assessments seem correct. Leave aside Pelosi's visit and the other official visits, often using US military aircraft. Forget about reports of US military advisers in Taiwan for nearly two years. Consider a bill before Congress that proposes to declare Taiwan an important non-NATO ally. Consider Senator Blackburn's suggestion earlier this week that it is "may be" time to revisit the US one-China policy President Biden has intimated as much on several occasions only to have his comments "walked back." Beijing is no innocent bystander. It continues to harass Taiwan and challenge others in the South China Sea, including the Philippines and Japan. Yesterday, Taiwan fired warning shots for the first time at a PRC drone near an offshore island. Beijing struck a secret deal with the Solomon Islands a few months ago and one of the consequences has become clearer in recent days. Last week, a US coast guard ship was denied refueling permission by the Solomon Islands, which has declared a moratorium on all US Navy visits pending an update of its protocol of procedures. The US embassy was closed in the Solomon Islands nearly two decades ago, but plans on re-opening it, according to press reports earlier this year. The yen did not react much to the better-than-expected local data, and the firm US yields kept the US dollar firm. The greenback is little changed, but so far, holding below yesterday's high slightly above JPY139.05. It is also holding above yesterday's low just above JPY138.00, where the five-day moving average is found. The Australian dollar finished North American session on its lows yesterday, near $0.6855. There has been no follow-through selling yet today and the Aussie poked above $0.6900 before finding new offers, which is also where the five-day moving average is found. Position-adjusting around the expiration of options for A$400 mln today at $0.6875 and tomorrow for A$720 mln at $0.6867 may be contributing to the choppy tone. For the sixth consecutive session, the PBOC set the dollar's reference rate below market expectations (Bloomberg survey) as CNY6.8906 vs. CNY6.9083. The dollar gapped higher on Monday against the yuan. It entered the gap today, which extends to last Friday's high around CNY6.8730 and recorded a low near CNY6.8870. Its sideways movement follows a two-and-a-half week gain of about 2.3%. Europe France reported slightly softer inflation but also considerably weak consumer spending. The EU harmonized CPI rose 0.4% in August for a 6.5% year-over-year rise (6.8% in July). France caps on energy prices run until the end of the year, but the government is considering new measures and the EU is considering collective action. Service price inflation was sustained, and food and manufactured goods prices accelerated. Consumer spending fell 0.8% in July compared with a 0.2% decline median projection in Bloomberg's survey. June's 0.2% increase was shaved to 0.1%. The third quarter is off to a weak start. After contracting by 0.2% in in Q1, the French economy expanded by 0.5% in Q2. The 0.3% forecast for Q3 might be a bit optimistic. Italy's harmonized CPI jumped to 9.0% from 8.4%. Many economists had hoped for a dip to 8.2%. The month-over-month gain of 0.8% followed a 1.1% decline in July. Recall that yesterday's German inflation edged up to 8.8% from 8.5% and Spain's eased to 10.3% from 10.7%. The aggregate eurozone inflation figures were worse than expected. The headline rose to 9.1% from 8.9%. However, more troubling was the jump in the core rate to 4.3% from 4.0%. The median forecast in Bloomberg's survey looked for a 4.1% year-over-year core rate. The euro was sold to session lows (~$0.;9975) a few minutes before the report. The swaps market is pricing in a slightly greater chance of a 75 bp hike next week by the ECB, just shy of a 66% chance. It was about 50% at the end of last week. There is a dramatic interest rate adjustment taking place in Europe, which over time, will likely impact the foreign exchange market. Yesterday, we noted that the Germany two-year interest rate more than doubled in the past two weeks (from about 0.50% on August 16 to almost 1.20% on Monday and about 1.18% today). This has overwhelmed the increase in US yields and sliced the US premium to about 230 bp, the lowest since early July. The UK 2-year Gilt is not slouch. It has played a bit of catch-up yesterday and traded above 3% for the first time since 2008. It spent most of July and the first half of August below 2%. At the start of the year, the UK and US two-year yields were near parity. The more aggressive trajectory of Fed policy had given the US a 135 bp premium as recently as mid-August. The premium has collapsed to around 45 bp, the least since mid-March. After holding above $0.9900 on Monday's test, the euro reached $1.0055 yesterday before sold in North America back down to $0.9980. Today's low has been about $0.9975, and the intraday momentum indicators suggest it could stabilize for a little. The nearby cap may be around $1.0020. With the August CPI estimate behind it, the next two key events are this Friday's US jobs report and next week's ECB meeting. Sterling was sold to new two-year lows yesterday near $1.1620 and remains pinned in the trough today. It has recorded lower highs this week, and today, for the first, time has not traded above $1.1700. However, like the euro, the intraday momentum indicators for sterling suggest some consolidation is likely in the North American morning. America Two recent business surveys have caught our attention. First, a survey of CFOs by Deloitte found that 73% regarded persistent inflation as bigger threat than a recession, with the other 27% more concerns about a recession. What is a bit surprising by this is that judging from the recent earnings many businesses have been able to lift prices to more than covering rising costs, including wages. Adjusted pre-tax profits rose 6.1% in Q2 over Q1, which had seen a 2.2% decline quarter-over-quarter. By another metric that measures pre-tax profits as a percentage of gross value added, corporate profit margins rose 15.5% in Q2, the widest in more than 70 years. Separately, and somewhat less surprising, a survey by the US-China Business Council of its 117 members found over half attributed plans to cancel or delay investment plans in China due to its Covid-related restrictions. Most said the negative effects were reversible, but 44% said it would take "years" to restore confidence. ADP launches a new methodology for its estimate of private sector employment today. In its press release, it claims the report will be more robust, using granulated data based on payrolls covering 25 mln US workers. In addition, estimate of the current month's nonfarm private sector employment change, it will also provide weekly data from the previous month by industry and business size. A new pay measure is also being introduced. ADP did not provide an estimate for July, pending this methodological change. The median forecast in Bloomberg's survey of 15 economists is for a 300k increase, though the average is a bit lower at 280k. Yesterday's report on job openings (July JOLTS) was around 850k more than expected and the June series was revised higher. The Fed funds futures are pricing in about a 75% chance that the third 75 bp hike will be delivered next month. It was about a two-thirds chance before Fed Chair Powell spoke at Jackson Hole. The dramatically smaller than expected Canadian Q2 current account surplus reported yesterday (C$2.7 bln rather than the C$6.8 bln expected warns of downside risks with today's Q2 GDP report. The current account surplus in the first quarter was revised sharply as well (C$2.7 bln from C$5.0 bln). Bloomberg' survey of a dozen economist generated a median forecast of 4.4% annualized pace after 3.1% expansion in Q1. The monthly GDP figures are more troubling. The cumulative monthly increases n Q1 were 1.4%. June figures will be reported today. The median forecast calls for a 0.1% increase, which would bring the Q2 cumulative increase to 0.4%. We note that Canada's 10-year breakeven has risen from about 1.93% at the start of last week to 2.20% today. On the other hand, the five-year breakeven has eased about six basis points at the same time and is below 2.10% today. The Bank of Canada meets next week, and although the market flirted with another 100 bp increase, it appears to recognize a 75 bp move is more likely. Separately, a small and minor cabinet reshuffle is expected later today, with no policy implications.   The US dollar is trading at new highs for the month today against the Canadian dollar. Yesterday, it traded above CAD1.31 for only the third time this year but closed slightly below it. It is extending the leg up that began last week near CAD1.29 and has approached CAD1.3115. The spike high recorded in the middle of last month was near CAD1.3225. The intraday momentum indicators are stretched but the key remains the broader risk appetite (S&P 500 proxy). Initial support now may be in CAD1.3060-80 area. The greenback is trading firmly against the Mexican peso and is near a seven-day high above MXN20.22. The high set on August 19 around MXN20.2670 is the key to the immediate outlook. A move above it, could spur a move toward MXN20.35-37. But, if it holds, it may signal a consolidative phase. That said, note that the five-day moving average is poised to cross above the 20-day moving average for the first time since late July.    Disclaimer   Source: EMU August CPI at 9.1%, while the Core Rate Jumps to 4.3%
The Canadian Dollar Gains Momentum as Crude Oil Prices Surge

Forex: Gold Is On Downside Movement. Situation On 31 Of August

InstaForex Analysis InstaForex Analysis 31.08.2022 13:47
Relevance up to 13:00 UTC+2 Technical analysis:   Gold has been trading downside as I expected and the downside objective has been reached at the price of $1.711. I still potential for further downside movement. Trading recommendation: Due to the strong downside momentum and no signs for the reversal, i still see potential for further drop. Watch for potential selling opportunities on the intraday rallies with the downside objective at the price of $1.680. MACD oscillator is showing fresh new downside momentum, which is another sign that sellers are in control. Key resistance is set at the price of $1.726   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Source: Forex Analysis & Reviews: Analysis of Gold for August 31,.2022 - First downside target has been reached
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

INTC Stock Prices Has Lost More Than 20%! Bearish Signal Was Right

InstaForex Analysis InstaForex Analysis 31.08.2022 14:21
Relevance up to 14:00 UTC+2 Red rectangle- major support (broken) Red lines- bearish channel INTC stock price is trading around $32-$33. At the beginning of June we warned traders that the weekly support at $42.50 was breaking down and that would imply more selling to come. That was an important bearish signal as this support level had been respected for more than 4 years. Price has formed a bearish channel where it continues making lower lows and lower highs. The RSI has still not reached oversold levels. Price is approaching the lower channel boundary where it can find support. Price has lost more than 20% since our warning and so far there is no sign of a reversal or bottom. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: INTC stock price has lost more than 20% since our bearish warning.
USD Stable as Oil Prices Rebound Ahead of US CPI Report Release

MA Stock Price Is Compatible To Bearish Scenario

InstaForex Analysis InstaForex Analysis 31.08.2022 14:37
Relevance up to 14:00 UTC+2 Red line- upper triangle boundary Green line- lower triangle boundary In previous posts we warned bulls in MA stock to be careful as a rejection at the resistance around $360 could lead to another pull back towards $300. The descending triangle pattern we have noted since earlier posts, is so far following the bearish scenario. Price tests the upper triangle boundary, gets rejected and turns lower towards the lower triangle boundary. In this case the lower triangle boundary at $300 is getting closer. We continue to expect MA stock price to move towards the green support line around $300. We remain bearish as long as price is below the red trend line resistance. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: MA stock price repeating pattern under play.
Ripple Has The Potential To Appreciate An Upward Rally

Crypto: XRP - We Remain Pessimictic For The Nearest Future

InstaForex Analysis InstaForex Analysis 31.08.2022 15:02
Red line- major resistance trend line Blue lines- trading range XRP has reached the end of August with price still trading inside the sideways trading range its been in since the beginning of June. Price remains below the major resistance trend line and with no sign of trend change. Price continues trading sideways between $0.28-$0.37. We continue to expect a move lower as the weekly RSI has not crossed over to oversold levels yet. A new lower low is expected and we remain bearish as long as price is below the red resistance trend line. Short-term bounce towards $0.52 is possible if price breaks above $0.40. Trends do not usually end with trading ranges and sideways movement. Trends usually end with a capitulation low or high. We have not seen a capitulation low and that is why I remain pessimistic for the near future. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: Weekly XRP analysis for the end of August 2022.
Chile's Peso (CLP) Has Been Helped By The IMF's Support, But It Is To Early To Rest On Laurels

Chile's Peso (CLP) Has Been Helped By The IMF's Support, But It Is To Early To Rest On Laurels

ING Economics ING Economics 31.08.2022 15:02
Chile’s agreement with the IMF for an $18.5bn Flexible Credit Line should offer some much-needed comfort to investors concerned about significant FX intervention and the fall in international reserves this year. A widening current account deficit and domestic political uncertainty present risks despite the nation’s overall strong credit profile The IMF's headquarters in Washington Chile turns to the IMF Chile has reached an agreement with the International Monetary Fund for a two-year Flexible Credit Line (FCL) arrangement, worth $18.5bn. The FCL differs from normal IMF programmes in that once agreed, there are no conditions for use and generally, they are seen as “precautionary” measures. Additionally, they are reserved for countries described by the IMF as having “very strong policy frameworks and track records in economic performance.” Chile, Colombia, Mexico, Peru and Poland have had FCL arrangements since their inception in 2009, while only Colombia has actually drawn on these resources.  The move looks significant for Chile, given the volatility seen in the peso this year and July’s announcement of a $25bn intervention programme by the central bank. International reserves at the central bank have fallen to $44.4bn from a peak of $55bn in October 2021, so the size of the FCL should provide a welcome but necessary extra buffer and offer some comfort to foreign investors who may have been concerned about the scale of FX interventions planned. The central bank only intends to draw on the FCL in an emergency, but if tapped it would augment the nation’s existing FX reserves. Chile has been struggling this year with a widening current account deficit of over 8% of GDP on a rolling annual basis as of the second quarter of this year, driven by weakening terms of trade. Copper prices, a key export, have come off the boil after rallying through to April while surging energy prices have driven imports higher. Against this backdrop, the nation remains one of the stronger hard currency sovereign credits in the EM space, with A1/A/A- ratings, but has performed weaker than its rating peers this year, with dollar bond spreads around 50bp wider on average YTD. Overall this latest agreement with the IMF signals an acceptance that the external backdrop is difficult for Chile, but should be seen as a marginal positive.  Chile's current account deficit at 8% of GDP is severe Source: Macrobond, ING   Peso rallies but remains vulnerable As we noted in the August edition of FX talking, we had felt that Chile committing nearly half of its FX reserves to a peso support programme was a dangerous move. Looking back on this, perhaps local officials at the time of the intervention announcement (late July) had some confidence that IMF support would be forthcoming. The news of IMF support has been welcomed by the peso - but we would be surprised if it drives the currency substantially stronger. As we've noted, Chile's staggering current account deficit of 8% of GDP leaves the peso heavily reliant on foreign capital inflows. Chile's well-respected central bank and 10%+ implied yield through the 3-month non-deliverable forwards are peso supportive. Yet the very strong dollar story (something we expect to continue for most of the second half of the year), and the uncertain environment for industrial metals given the Chinese slowdown, suggest Chile's peso is not out of the woods yet. The most immediate event risk is probably a referendum on Chile's new constitution wich takes place on Sunday.  We continue to favour USD/CLP trading back above 900 for the remainder of the year. Pressure on Chile's peso has depleted FX reserves - prompting IMF support Source: Macrobond, ING Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Analyst Favorites: Sunrun, Block, and Nvidia Lead the Pack Among Saxo's Top Traded Stocks with 17% Upside Potential

European Central Bank - There Is A Need To Strengthen Measures That Curb Inflation

InstaForex Analysis InstaForex Analysis 31.08.2022 15:18
Relevance up to 10:00 UTC+2 The more euro falls, the more often European policymakers say there is a need to strengthen measures that curb inflation. ECB board member Joachim Nagel even stated that the next rate hike should not be delayed for fear of a potential recession. Unsurprisingly, these comments fueled speculation on how much the European Central Bank needs to raise interest rates at its meeting next week to keep the balance between the economy sliding into recession and countering further inflation. With the figure already at a record 8.9%, markets are divided over whether policymakers will raise rates by 50 basis points straight away or resort to changing them by 75 basis points at once. If the ECB increases rates by 75 points, euro will correct upwards, which will allow buyers to keep parity under their control. However, there are policymakers calling for restraint in the tightening of monetary policy. Executive Board member Fabio Panetta recently said the current rate hike will ease inflationary pressures anyway, while Chief Economist Philip Lane pointed out that sustained economic growth is more important than the observed inflationary pressures associated with the energy crisis. Although much of the surge in inflation is due to energy problems, there are fears that it could spread to other areas. Nagel mentioned that he supported last month's decision to raise rates by 50 basis points because a larger move minimizes the risk of future price increases being out of control. In terms of the forex market, there is a risk of further sharp fall in EUR/USD. Buyers need to hold above 1.0000 because moving down will make it hard for the pair to recover. Meanwhile, going beyond 1.0050 will give confidence to buyers in pushing the quote to 1.0090 and 1.0130. If euro falls below 1.0000, the bear market will continue, which would push the quote to 0.9970, 0.9940, 0.9905 and 0.9860. Pound is currently below the 17th figure, which creates certain difficulties for buyers. There is very little chance of a strong upward correction, especially if sellers take control of 1.1650. If buyers fail to stay above this level, there will be another set of sell-offs towards 1.1590. Then, its breakdown will lead to subsequent declines to 1.1530 and 1.1480. Only a rise above 1.1720 will bring the pair to 1.1760 and 1.1840. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: ECB members are calling for tighter monetary policy
Nasdaq Slips as Tech Stocks Falter, US Inflation Data Awaits

S&P 500 And Nasdaq Declined | The US Data Triggered Some Members Of Fed

Swissquote Bank Swissquote Bank 31.08.2022 15:32
All was going well yesterday; equities were in the green, when suddenly the dark clouds gathered and it started raining in the markets. The biggest catalyzer of yesterday’s sentiment reversal was the stronger-than-expected US economic data, which revived the Federal Reserve (Fed) hawks and sent the equity indices lower. The S&P500 and Nasdaq slumped more than 1%. Although the US futures are again in the positive this morning, we saw yesterday that the winds could rapidly change direction, and the volatility is picking up. Due today, investors will be watching the US ADP and the European CPI data. The rising inflation in Europe revives the European Central Bank (ECB) hawks. ECB's Muller said yesterday that the ECB should discuss 75 bp hike at the September policy meeting , as inflation outlook has failed to improve. And Goldman Sachs warned that inflation in Britain could hit 22% next year if the natural gas prices remain high. The ECB and the BoE hawks are not sleeping in their corner, but the hawkish expectations are clouded by a strong US dollar, and growing recession fears. Watch the full episode to find out more! 0:00 Intro 0:27 Good news is bad news for US equities 3:46 ADP in focus 5:38 European inflation pushes higher, but EURUSD bulls remain timid 7:23 Goldman Sachs sees UK inflation hit 22% next year! Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #jobs #ADP #data #USD #EUR #GBP #inflation #energy #crisis #natural #gas #crude #oil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
The Market Expects Norges Bank To Keep Interest Rates Unchanged

Swiss Franc (CHF) And Norwegian Krone (NOK) Weakness

John Hardy John Hardy 31.08.2022 16:54
Summary:  The G3 currencies are chopping around aimlessly versus one another while the bigger story afoot across FX is weakness in the rest of the G10 currencies, particularly in the Swiss franc and Norwegian krone, the currencies that had formerly traded the strongest against the euro as a bit of ECB catchup on tightening guidance and easing energy prices. NOK is particularly weak today, perhaps on fears that the EU is set to cap energy and power prices and may twist Norway’s arm in the process? FX Trading focus: EUR relief and squeeze for now, but remember longer term picture. Is NOK suddenly worried about price caps for its energy exports? Yesterday I highlighted the squeeze risk in EURUSD If the 1.0100 area traded, but the US dollar has remained quite firm, while the real story is in the euro upside squeeze elsewhere, particularly against the Swiss franc as the ECB has gotten religion on the need to bring forward and raise its tightening plans, while the collapse in oil prices and natural gas prices to a lesser degree over the last couple of days has EURNOK shorts running for cover. Yesterday, another flurry of ECB speakers at a conference saw ECB rate expectations pulled back a bit higher as some, including Nagel, argued for a front-loading of rate hikes, which has the market leaning a big harder in favour of a 75-basis point move at next Thursday’s ECB meeting. Still, as the weeks wear on, it is important to realize that Germany being ahead of its schedule on refilling gas storage reserves doesn’t mean the country can meet anything approaching normal gas demand through the winter unless Russia turns up the gas flow rates or the gas can be sourced from elsewhere, as storage is only a fraction of the amount need for winter consumption rates as heating demand jumps. The EU has called an emergency meeting next Friday that will likely result in a cap on electricity and perhaps also natural gas prices for some end users, a  move that will prevent many consumers and especially small businesses from going cold over the winter or going broke or having too much of their budgets swallowed by energy costs. But such a move to cap prices will also have the typical result that demand will remain higher than it would otherwise, and that will have to mean rationing of power/gas, a dicey process to manage. Either way, real GDP will decline if less gas is available, even if Russia does turn back on the gas after turning it off today for a few days of purported maintenance and continues to deliver the trickle of flows that it has been delivering recently. The August US ADP payrolls data release today is the first using a “revamped” methodology that is meant to provide more time and higher frequency data on the labor market, as well as information on pay rises, given the ADP access to salary information. The headline release of +125k was disappointing, but it will take time for the market to trust this data point even if the new methodology eventually proved better for calling the eventual turn in the labor market. Yesterday’s Jul. JOLTS jobs openings survey was nearly a million jobs higher than expected after the prior month was revised solidly higher, suggesting a still very strong demand for labor. The USD picture is still choppy and uncertain, with today’s ADP number chopping long treasury yields back lower after they trade to new local highs. The Friday’s official jobs report will weigh more heavily, with earning surprises potentially the largest factor, while the September 13 CPI data point will weigh heaviest of all ahead of the Sep 21 FOMC meeting. As discussed in this morning’s Saxo Market Call podcast, an Atlanta Fed measure of “sticky inflation” is showing unprecedented relative strength to the BLS’s standard core CPI measure. Chart: EURNOKEURNOK has backed up aggressively higher on the huge haircut to crude oil prices over the last couple of sessions and as the ECB has delivered a far sterner message on its intent to bring forward and steepen rate tightening intentions. As well, if the EU emergency meeting sees the spotlight turned on Norway’s gargantuan profits it is earning on oil and gas profits from the reduction of Russian deliveries, the EURNOK rise could be aggravated well through the pivotal 10.00 area. Source: Saxo Group Table: FX Board of G10 and CNH trend evolution and strength.The US dollar remains strong, with Euro flashing hot in the momentum higher – although questions remain how long this can last. Sterling continues its ugly slide, while CHF has lost moment likely on EURCHF flows, and NOK is losing altitude very quickly as noted above. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.USDCAD and AUDUSD are looking at interesting levels, with the former having now more decisively broken the range, while AUDUSD is teetering. Note the EURCHF and EURNOK readings trying to flip to positive here, together with other EUR pairs. USDNOK has flipped positive in rapid fashion after yesterday’s flip higher. Source: Bloomberg and Saxo Group Source: FX Update: NOK, NOK, who’s there? Energy price caps?
Unraveling the Resilience: US Growth, Corporate Debt, and Market Surprises in 2023

Forex: XAU/USD - Bull And Bear Are Searching For Gold

InstaForex Analysis InstaForex Analysis 31.08.2022 17:51
Relevance up to 15:00 UTC+2 The dollar remains positive, while its DXY index remains near the resistance level of 109.00. Earlier this week, DXY broke last month's high at 109.14 and touched a new local high since October 2002 at 109.44. The tough rhetoric of Federal Reserve Chairman Jerome Powell regarding the prospects for monetary policy of the American central bank gave the dollar a new bullish momentum. During his speech at the Jackson Hole symposium last Friday, he reaffirmed that the Fed's priority goal is to fight high inflation, and "the Fed should continue like this until the job is done." At the same time, "restoring price stability will take some time and will require the decisive use of central bank instruments." In other words, the tight cycle of Fed monetary policy tightening will continue for now, perhaps even at the same pace. Thus, the trend of further strengthening of the dollar remains. Meanwhile, the price of gold continues to decline amid a strengthening dollar. Today, XAU/USD hit a new 6-week low at 1.1710, falling towards key support levels at 1700.00, 1690.00, 1682.00. As you know, gold quotes are extremely sensitive to changes in the monetary policy of the world's leading central banks and, especially, the Fed. However, the other major world central banks (BoE, RBA, RBNZ) are also on the path of tightening their monetary policies, and the ECB will soon join them. Despite the high risks of a recession in the economy, the fight against inflation remains a key issue for them. Gold does not bring investment income but is in active demand during geopolitical and economic uncertainty, and a protective asset in the face of rising inflation. Now is just such a moment. However, it seems that it is losing its role as a protective asset to the dollar, and in the event of a breakdown of the zone of long-term support levels of 1700.00, 1690.00, 1682.00, the long-term bullish trend of gold and the XAU/USD pair may be in jeopardy. It is hard to believe so far, but the fundamental and technical picture is still in favor of just such a scenario. On Friday, the publication of key macroeconomic statistics for the United States is expected. At 12:30 (GMT), data on the US labor market for August will be published. The positive momentum of recovery is expected to continue, which allows Fed officials to continue to fight inflation at an accelerated pace, which is bullish for the dollar and bearish for gold prices. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: XAU/USD: Bullish and bearish factors
The EUR/AUD Pair May Have The Potential To Continue Its Decline

Forex: EUR/USD - The Euro Needs To Be Sold. Market Perceives The Tightening Of The ECB's Monetary Policy As A Direct Path To Recession

InstaForex Analysis InstaForex Analysis 31.08.2022 18:09
Relevance up to 12:00 UTC+2 Markets are often wishful thinking. And the media actively support them in this. Bloomberg's report that the euro could have its own rally amid record high inflation and the hawkish rhetoric of ECB officials was full of pathos but little sense. Without a decrease in gas futures quotes, the "high prices - aggressive increase in deposit rates" scheme does not work. As soon as the cost of blue fuel began to recover after a two-day decline, EURUSD quotes rushed down. Of course, the acceleration of German and European inflation to 8.8% and 9.1%, respectively, which in the first case is the maximum level in 40 years, and in the second—a new record, cannot please the ECB. Especially in the conditions of EURUSD sliding to the 20-year bottom. The Bundesbank says the recession should not stop Christine Lagarde and her colleagues from raising rates, while the futures market is 60% sure that they will rise by 75 bps in September. After such impressive inflation figures, I won't be surprised if it will be +75 bps in October and another +50 bps in December. Monetary restriction is clearly accelerating, and judging by the reaction of the euro to the previous "hawkish" surprises of the Governing Council, we can expect the growth of the euro on the 8th. Or on expectations before that date. Dynamics of European inflation However, as long as gas prices remain at elevated levels, the market perceives the tightening of the ECB's monetary policy as a direct path to recession. So, the euro needs to be sold. This strategy works very well on the news. Expectations of inflation acceleration in Germany and the Eurozone pushed EURUSD up, and then the sale on the facts began. At the same time, the shutdown of the Nord Stream for maintenance contributed to the growth in the cost of blue fuel and thus deprived the regional currency of its main trump card. Russia has suspended gas supplies to Engie SA due to disputes over payments. In France, storage occupancy is now over 90%, and the country is ready to survive this winter and next. Russia claims maintenance on Nord Stream will take about three days, but eurozone money markets only give a 30% chance that the pipeline will be operational by the deadline. Fears about the complete shutdown of the taps create a major obstacle on the way of EURUSD upward. Technically, on the 4-hour chart of the pair, the possibility of a Broadening Wedge reversal pattern is not ruled out. In this case, the return of euro quotes above the fair value of $1 will be the basis for purchases. On the contrary, a fall in EURUSD below 0.9915 will increase the risks of a continuation of the peak towards 0.97. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: Euro sell on the news
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

Necessary Points That Must Happened For S&P 500 Index to Rise

InstaForex Analysis InstaForex Analysis 31.08.2022 15:38
Relevance up to 14:00 UTC+2 Stock futures are trading mixed on Wednesday after a sharp fall yesterday. Investors are worried about the ultra-tight monetary policy of the US Federal Reserve aimed at curbing inflation. The US dollar index and Treasury yields moved higher. The Dow Jones futures gained 0.2%, while the S&P 500 and the NASDAQ futures lost 0.1% and 0.2% respectively. European stock indices also slipped to trade at their lowest level in more than six weeks. This decline was caused by the eurozone inflation report and the downbeat data from France and Germany. Rising inflation in the eurozone is viewed as the number one problem by the European Central Bank. The regulator is very likely to announce further rate hikes next week in order to limit soaring prices. When pursuing tighter monetary policy, the ECB will have to find the balance between fighting inflation and pushing the economy into a recession. The inflation rate in the eurozone has already reached a record level of 9.1% and is seen to accelerate further. Yet, analysts wonder whether the regulator will raise the rate by 50 basis points or straight by 75 basis points. In the commodities market, oil has slightly lost ground and is now set to test monthly lows for the third time. The price of natural gas also went up. Hopes that the US central bank will ease its monetary tightening are gradually fading away, which is a bearish factor for stocks and bonds. Of course, investors consider the incoming data when looking for clues regarding monetary policy. Yet, the jobs report from the US will most likely cause another massive sell-off in the stock market. Meanwhile, Asian stocks are trading in positive territory thanks to tech companies. At the same time, Japan's stock indices have dropped. Shares of Chinese EV maker BYD Co. tumbled the most after Warren Buffett's Berkshire Hathaway Inc. trimmed its stake in the company. As for the S&P 500 technical outlook, buyers may get a small chance for an upward correction. For this, they will have to break above the level of $4,003. If the fundamental data from the US is positive, this level may be the key point to watch. Depending on a successful breakout of this range, the S&P 500 index may continue to rise. Otherwise, it may return to monthly lows and extend its fall. If the downtrend continues, a breakout below $3,968 will push the quote to the next downward target of $3,940. This will open the way towards the area of $3,905 where the downward pressure may slightly ease. An upside movement will be confirmed only when bulls take control over the resistance of $4,003. Then, the level of $4,038 will serve as the next target. Only then will the price move further to $4,064 where large sellers will return to the market. Some of you may want to take profit on long positions. The level of $4,091 will act as a more distant target. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: US premarket trading on August 31, 2022. Stock market enters correction after yesterday's fall  
Fed's Bowman Highlights Potential for More Rate Hikes; German Industrial Production Dips to 6-Month Low

Forex: Hold On Tight Australian Dollar (AUD)! RBA Decision May Make You Jump Soon!

Kenny Fisher Kenny Fisher 31.08.2022 20:40
The Australian dollar has stabilized today after sharp losses on Tuesday. In the European session, AUD/USD is trading at 0.6853, unchanged on the day. Construction Work Done slides Australia’s construction sector continues to post soft numbers this week. Construction Work Done fell 3.8% in Q2 (vs -0.9% in Q1), shy of the market consensus of 0.9%. This key indicator has been struggling, with two declines in the past three quarters. On Tuesday, Building Permits tumbled 17.2% in August (vs -0.6% in July), well off the estimate of -3.1%. The weak data should serve as a reminder the Australian economy is showing signs of slowing down, as the Reserve Bank of Australia’s aggressive tightening cycle is showing results. The RBA meets next on September 6th. In all likelihood, the RBA will deliver a 0.50% increase, as inflation hasn’t shown any signs of peaking. In the second quarter, inflation rose to 6.1%, up from 5.1% in Q1. Policy makers are hoping to avoid a recession and guide the economy to a soft landing, but the central bank, like the Fed, has made clear that its paramount goal is to curb inflation and avoid inflation expectations from becoming anchored. In the aftermath of Fed Chair Powell’s no-nonsense speech at Jackson Hole last week, the markets seem to have heard Powell’s message loud and clear. The markets have priced in a 75 basis point hike at 72.5%, with a 50bp increase at 27.5%, according to CME’s FedWatch. Just yesterday, the odds were 65%-35%, and we can expect further movement in market pricing as investors look for clues as to what the Fed has planned at the September 21st meeting. The Fed has stated that its rate decisions will be data-dependent, which means that Friday’s non-farm employment report could be a market-mover. AUD/USD Technical There is resistance at 0.6919, followed by resistance at 0.6983 0.6830 is providing support, followed by 0.6766 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie shrugs off soft construction data - MarketPulseMarketPulse
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

Europeans' Scare Of Energy Supply | Inflation Of The Eurozone Shocks Again | EUR/USD Chart

Kenny Fisher Kenny Fisher 31.08.2022 20:47
The euro continues to have a calm week. In the North American session, EUR/USD is showing little movement as it trades a whisker above the parity line. Eurozone inflation tops 9% Inflation in the eurozone continues to move higher. In August, CPI rose to 9.1%, up from the July gain of 8.9%, which was a record high. Core inflation climbed to 4.3%, up from 4.0%. With both the headline and core readings exceeding the forecast of 9.0% and 4.1%, respectively, there will be additional pressure on the ECB to tighten policy more at an accelerated pace. The central bank has been slow to shift its accommodative policy, which was in place for years in order to support the eurozone economy. The ECB now finds itself playing catch-up with inflation, and is also far behind in the tightening cycle compared to other major central banks, with a benchmark rate of just 0.50%. Inflationary pressures remain broad-based, which means inflation is well-supported and unlikely to decline anytime soon. The eurozone inflation report comes just a day after Germany, the largest economy in the bloc, reported that August inflation jumped to 7.9%, up from 7.5% in July and nudging above the forecast of 7.8%. The central bank meets next on September 8th, and there is a strong possibility that the ECB could come out with guns blazing and deliver a super-size 75 basis point increase. A potential energy crisis in Europe continues to hover like a dark cloud, and the uncertainty over whether Moscow will weaponise energy exports remains a massive concern. The Nord Stream 1 pipeline has been shuttered for a scheduled three-day maintenance, but there are fears that Russia will find some excuse and not renew gas flows on Saturday. Any disruptions would likely push European gas prices even higher. In the meantime, the waiting game is on, with Western Europe on edge while it anxiously waits for the gas taps to be turned back on. EUR/USD Technical EUR/USD has support at 0.9985 and 0.9880 1.0068 is a weak resistance line, followed by 1.0173 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro inflation rises, but euro yawns - MarketPulseMarketPulse
USD/CHF - US Dollar Is Awaiting Jobs Market Data, While Swiss Inflation May Trigger SNB To Hike The Interest Rate, Boosting Swiss Franc In Consequence

USD/CHF - US Dollar Is Awaiting Jobs Market Data, While Swiss Inflation May Trigger SNB To Hike The Interest Rate, Boosting Swiss Franc In Consequence

Kenny Fisher Kenny Fisher 31.08.2022 22:10
USD/CHF moved higher earlier in the day and briefly pushed above 0.9800 but has pared these gains. The Swiss franc is having trouble finding its footing, as USD/CHF has climbed 350 points in the past two weeks. Switzerland releases inflation and retail sales reports on Thursday. It has been a disappointing week so far. The KOF Economic Barometer declined for a fourth consecutive month in August. The index dropped to 86.5 (vs 90.5 in July), shy of the estimate of 89.0. Much of the August decline was related to weakness in consumer spending and manufacturing. ZEW Economic Expectations remained in deep freeze, with a reading of -56.3 in August (vs -57.2 in July). SNB eyes Swiss inflation Inflation in Switzerland remains much lower than levels in the eurozone or the UK, but the June reading of 3.4% marked its highest level since 1993. Another reading of 3.4% is expected for July. With inflation well above the Swiss National Bank’s target range of 0-2%, the open question is how uncomfortable the SNB is with high inflation. If July inflation is higher than expected, the SNB could respond by tightening policy in order to rein in inflation. In June, the SNB shocked the markets with a 0.75% basis point hike, the first increase in 15 years. Even with the massive hike, the benchmark rate remains in negative territory, at -0.25%. In the US, the ADP employment report showed a sharp decline in August, with a weak reading of 132 thousand (vs 270 thousand in July), well short of the market consensus of 288 thousand. The ADP release is generally not a reliable indicator for the nonfarm employment report, which will be released on Friday. Interestingly, the forecast for the NFP is also a sharp deceleration to 300 thousand, down from 528 thousand. If NFP is weaker than expected, it could raise speculation that the Fed will ease on tightening, which would weigh on the US dollar. Conversely, a strong NFP would allow the Fed to be aggressive, in the knowledge that the labour market is resilient, even if other US data is not as strong. USD/CHF Technical USD/CHF is testing resistance at 0.9720. Next, there is resistance at 0.9760 There is support at 0.9642 and 0.9524 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Swiss pares losses, CPI next - MarketPulseMarketPulse
Turbulent Times for Currencies: USD Dominates, SEK Shines

FX: Australian Dollar (AUD) May Decrease, GPB/USD Seems To Feel Worse | Indices: S&P 500 Plunged, So Did Nasdaq

ING Economics ING Economics 01.09.2022 08:02
USD off to a strong start at the beginning of September Source: shutterstock Macro outlook Global markets: US equities continued their slow bleed on Wednesday, the S&P500 dropping another 0.78% and the NASDAQ going 0.56% lower. This wasn’t exactly a one-way street, with some periods of strength within the session, but the downtrend was never seriously threatened. Equity futures are poised for more weakness today too, which could set the scene for other asset markets today ahead of tomorrow’s payrolls release. 2Y US Treasury yields added another 5.1bp yesterday, which probably didn’t help the tone in equities, and 10Y yields put on another 9bp to reach 3.19%.  News from the Fed: Loretta Mester is reported as saying that she favours rates above 4% next year and no cut in rates in 2023. That probably helped keep Treasury yields rising across the curve. But despite the downbeat market sentiment and rising USD rates EURUSD managed to rise to 1.004, up from 1.001 this time yesterday. In contrast, the AUD is looking troubled again today following its sell-off yesterday and sits at 0.6835, and looks more likely to keep going down than head back up. Cable too looks in bad shape, dropping to 1.1599 and the JPY is hurtling upwards and at 139.29, the question is, do we hit 140 today? Asian FX saw some decent gains from the KRW yesterday, which pulled back to 1338. The INR is also still benefitting from rumours of the inclusion of government securities into global bond indices. Today, the USD looks rampant, however, and it may well be a different story. G-7 Macro: Yesterday’s ADP survey was published with a new methodology to make it more accurate (in line with payrolls) and it delivered a weakish looking 132,000 employment gain. It’s impossible to tell if this will be reflected in tomorrow’s jobs report, but it does seem to suggest that at least a slowdown from 528,000 jobs gain reported in July is on the cards. Manufacturing ISM data is the main release from the G-7 today. A slight decrease from last month’s 52.8 reading is the median expectation. The prices paid index is also expected to come down a bit more from last month’s reading of 60.0. There are also PMI releases in Europe and German retail sales to watch out for. India: Indian 2Q22 GDP wasn’t quite as punchy as had been expected, though the heavily base-affected release is a little tricky to interpret right now. A 13.5% YoY gain was a bit down on the 15.3% increase that had been expected, but probably still leaves India on track to achieve 7% growth this calendar year. Strong investment (+20.1%YoY) and private consumption (25.9%) underpinned the result. Though the boost from the re-opening of the economy will probably fade next quarter, and the economy will face stronger headwinds from falling external demand, higher inflation and rising domestic interest rates.  The fiscal deficit figures for July actually registered a small surplus, which is an improvement on last year’s equivalent fiscal balance and should keep India on track to meeting or even beating its 6.4% (GDP) deficit target. Australia: Private capital expenditure released at 0930 SGT provides the first insight into next week’s 2Q22 GDP figure. The median forecast is for a 1% gain. A further clue comes the day before the release when we get the net trade contribution component. We are tentatively looking for a robust 1% QoQ expansion of activity in 2Q22, which will add to the pressure on the Reserve Bank to keep leaning against inflation. Korea:  The trade deficit widened to a record USD -9.4 billion in August, almost double the USD 4.8 billion deficit recorded in July. Exports grew 6.6% YoY in August (vs a revised 9.2% in July and a market consensus of 5.6%). As early data suggested, semiconductor exports were quite weak with a -7.8% drop while petroleum/chemical and automobiles led the growth. Meanwhile, imports surged 28.2% YoY in August (vs 21.8% in July and market consensus of 23.7%) due to increases in energy, semiconductors, and chemicals. Separately, Korea’s manufacturing PMI fell to 47.6 in August from 49.8 in July. This is its lowest reading since July 2020. The output index fell to only 44.6, staying below 50 for the fourth month in a row. Combining this weak PMI data with the trade deficit data and yesterday’s weaker-than-expected industrial production outcomes, we are revising our growth forecast lower for the second half of the year and now expect a small contraction Indonesia:  August inflation is set for release today.  Both headline and core inflation have been on an uptrend this year with headline inflation now past the central bank’s target.  Headline inflation will likely settle close to 5%YoY while core inflation should exceed 3%.  Accelerating inflation and a planned subsidized fuel hike were enough to prod Bank Indonesia to finally hike rates at their last meeting and we believe that BI is not done for the year.  Faster inflation, especially after the fuel hike should keep BI on a hiking path.  What to look out for: Regional PMI manufacturing and US NFP South Korea GDP and trade (1 September) Regional PMI manufacturing (1 September) China Caixin PMI manufacturing (1 September) Indonesia CPI inflation (1 September) US initial jobless claims and ISM manufacturing (1 September) Fed's Bostic speaks (2 September)  South Korea CPI inflation (2 September) US non-farm payrolls and factory orders (2 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Crucial Upcoming PMI Data and High-Stake Meetings Shape China's Economic Landscape

Forex Wakes You Up! (USD) US Dollar Index Is Not Far From 110.00! EUR/USD Is Expected To Be Hovering Between 0.99-1.01

ING Economics ING Economics 01.09.2022 08:50
It is a familiar narrative, but a firmly hawkish Fed plus major exporting nations seeing their trade surpluses wiped out by higher energy costs continue to drive the dollar higher. And we doubt an extra 25bp of ECB tightening this autumn makes much of a difference to the soft EUR/USD profile. Look out for PMIs and US manufacturing ISM today. Dollar to stay bid Over recent weeks and months, we had felt that sterling could hold its own against the weakened euro – but clearly it has failed to do so USD: Fed curve gets priced higher and flatter It is fair to say the dollar remains very well bid across the board. The much-followed DXY trade-weighted dollar index remains close to its highs of the year above 109, while other trade-weighted measures more weighted towards emerging markets push even higher. Two key factors remain at work here. The first is the Fed. Here pricing in US money markets of the Fed policy curve continues to move higher and flatter. By that we mean the terminal rate pricing has now pushed up to 3.95% for next spring, while the easing for late 2023 is also being priced out too. Notably, December 2023 Fed Funds futures now price Fed rates at 3.60%. Back in late July during the 'Fed pivot' story, these futures had dropped to 2.70%. In short, we have seen quite a re-pricing over the last month – a re-pricing that may not be over yet. Yesterday Fed hawk Esther George spoke of needing to get Fed Funds above 4% and keeping it above there for 2023.  Given the experience over the last month and the very hawkish speech of Fed Chair Jerome Powell last Friday, we doubt that even a modestly softer August jobs report tomorrow will be enough to dent this Fed pricing or the dollar. The second factor is the energy crisis, which wiped out traditional trade surpluses for the big energy importers in Europe and Asia. Overnight Korea announced a $10bn trade deficit for the month of August. In September 2020, Korea was running close to a $10bn monthly trade surplus. The Bank of Korea's 125bp of tightening has provided little support to the Korean won – which has fallen 12% against the dollar this year. Equally, we think 100-125bp of ECB hikes this year will struggle to provide much support to EUR/USD, which has equally fallen 12% this year. For today we will see US ISM manufacturing and the initial jobless claims numbers. We doubt these can put too much of a dent in the dollar's rally ahead of tomorrow's US jobs report. DXY to stay bid above 109.00 and could make a run at 110.00 at any time. Chris Turner EUR: ECB hawks may struggle to generate euro lift-off Above-consensus eurozone CPI for August predictably brought out the ECB hawks yesterday, with Austria's Robert Holzmann again suggesting that a 75bp hike be debated at next week's meeting. Markets now price 69bp of hikes at the September meeting, a total of 130bp by the October meeting, and a total of 167bp by year-end. This has contributed to a 1% rally in the ECB's trade-weighted euro over the last few days. However, the recent narrowing in EUR: USD two-year swap spreads may have run its course, and a reversal – should the ECB not deliver on this new hawkish pricing – could send EUR/USD to fresh lows next week. Data in the region is more detailed on the August PMIs. Overall we see investors in no mood to let go of their precious and high-yielding (2.30% overnight rate) dollars. EUR/USD to stay offered in a 0.9900-1.0100 range. Chris Turner GBP: This is getting serious Over recent weeks and months, we had felt that sterling could hold its own against the weakened euro – but clearly it has failed to do so. The Bank of England's (BoE's) trade-weighted sterling fell more than 3% in August and now sits at a new low for the year. Our premise for sterling staying supported was that foreign owners of Gilts would have to cut FX hedge ratios because of rising sterling hedging costs. That view is, shall we say, challenged by foreign investors dumping Gilts. Foreigners sold £16.5bn of Gilts in July according to BoE data, the largest sale since July 2018. Our debt strategy team note some worrying developments in the Gilt market – where underperformance of Gilts versus GBP swaps suggests some independent concerns mounting over Gilts, be it quantitative tightening plans from the BoE or perhaps even some fears over what Britain's next prime minister plans to do with the nation's balance sheet. Notably, the UK's 5-year sovereign Credit Default Swap is starting to rise too. A fiscal risk premium looks to be going into GBP. Cable retesting the March 2020 flash-crash low of 1.1415 low looks the path of least resistance. And 0.8720 is the bias for EUR/GBP. Chris Turner CEE: Too much, too soon Today we have PMI prints for the CEE region in the calendar. Recent months have shown a significant drop in sentiment, especially in Poland, and we cannot expect a significant reversal of the trend for August either. On the other hand, the recent German release suggests at least a halt to the decline in sentiment in the region. Today, we will also see the detail of GDP in Hungary which surprised positively in 2Q. The National Bank of Hungary (NBH) will decide on the one-week deposit rate, however, we cannot expect anything other than a 100bp hike – similar to when the central bank on Tuesday raised the base rate. Later today, the Czech Republic's state budget result will be released, where pressures to loosen fiscal policy are growing. On the FX side, conditions in the region have improved significantly in recent days. EUR/USD above parity has eased pressure on EM markets, gas prices have dropped, and market expectations of rate hikes have increased a bit in the region for the first time in a while. The result is stronger currencies across the region, however, perhaps this is too much, too soon. Thus, we see the region at the moment as highly vulnerable to incoming negative news, which may be the PMI print today. But overall, nothing has changed in the CEE story in recent days. The tougher part of the year is yet to come in terms of both the gas story and negative economic numbers, and on top of that FX is losing the support of hawkish central banks and rising interest rate differentials. So despite recent gains, we remain bearish on CEE currencies over the coming days. Frantisek Taborsky Read this article on THINK TagsFX Daily FX ECB Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Investors Selling Down Companies That Face Balance Sheet Tightening From Runaway Inflation

Investors Selling Down Companies That Face Balance Sheet Tightening From Runaway Inflation

Saxo Strategy Team Saxo Strategy Team 01.09.2022 08:54
Summary:  The S&P500 fell 4.2% in August, erasing half of July’s rally, with investors selling down companies that face balance sheet tightening from runaway inflation and higher for longer interest rates. Meanwhile, in August, investors bought into sectors contributing to inflation. At Saxo, we think these trends will probably continue. We cover everything you need to know about what is happening in markets today and what to consider next. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities declined for the fourth day in a row, with S&P 500 down 0.78%, the Nasdaq 100 falling 0.57%.The month of August ended with S&P 500 losing 4.24% and Nasdaq 100 down 5.22%.  The markets were in a risk-off mood with the focus being fixed on rising bond yields and the hawkish stance of the central bank in the U.S. and across the pond in Europe, and with an eye on the job report coming out of the U.S. tomorrow.  Chewy (CHWY:xnys) dropped 7.9%, as the pet retailer lowered guidance for 2022 revenues, citing customer pulling back on discretionary items. The consumer trade-down echoed the general trend found in other U.S. retailers.   Bed Bath & Beyond (BBBY:xnas) tumbled 21.3% after announcing a plan to close about 150 stores. Nvidia (NVDA:xnas) plunged 5% in extended hours after the company warned that the new U.S. rules restricting the export of artificial intelligence may substantially affect the company’s sales to China.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas)   Yields took a blip lower initially after the weaker-than-expected ADP Employment report but surged higher to finish the day at the high.  The benchmark 10-year note yield closed at 3.19%.  Cleveland Fed President Mester joined the recent chorus of hawkish fedspeaks vowed to get inflation down “even if the economy were to go into recession” and “it will be necessary” to raise the Fed fund rate to “above 4% by early next year and hold it there”.  The U.S. treasury yield curve bear steepened, with the 2-year yield +5bps as the belly to the long-end yields jumped 8bps to 9bps. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg)   Hang Seng Index gapped down by nearly 2% at the open but managed to crawl back all the losses to finish the day flat.  China consumption stocks led the market higher in anticipation of incremental policy stimuli and recovery of consumer demand during the mid-autumn festival, Xiabuxiabu Catering (00520:xhkg) +9.4%, Haidilao (06862:xhkg) +6.5%, China Tourism Group Duty Free (01880:xhkg) +7.1%, Li Ning (02331:xhkg) +3.9%, Anta Sports (02020:xhkg) +1.5%.  In the auto space, BYD (01211:xhkg) tumbled nearly 8%, following news of Berkshire Hathaway reducing its stake in the company. On the other hand, Nio (09866:xhkg) and XPeng (09868:xhkg) rose more than 2%.  Hang Seng Tech Index (HSTECH.I) gained 1%, with performance divergence among stocks.  Tencent (00700:xhkg) gained 1.1% while Baidu (09888:xhkg) dropped by 3.3% on operating margin contraction. China banking shares traded in Hong Kong were mixed after ICBC (01398:xhkg), China Construction Bank (00939:xhkg), and Bank of China (03988:xhkg) reported growth in revenues and profits but higher non-performing loan ratios. Coal mining and oil stocks fell on the Hong Kong bourse as well as the mainland bourses on weaker energy prices.  CSI 300 bounced from the early sell-off and closed little changed.     Australia's ASX200 (ASX:XASX) closes higher for the 2nd month, but on the first day of September equities unwind the August rally and cut July’s rally  Australia’s market has rallied for two straight months. But the rally is likely to run out of steam iin September, with Aussie equites to face selling pressure. September is historically the worst month for equities, with the ASX200 losing 0.6% each month on average since the index was formed. The reason for this? Companies pay out their yearly dividends in September. Today, many major companies go ex-dividend, transferring the dividend right to shareholders. Companies going ex-dividend include BHP, Whitehaven Coal, AGL and Credit Corp. This month, the ASX faces a host of extra issues. The RBA is tipped to hike interest rates at its September meeting next Tuesday, front loading rate hikes for the next few months. This comes at a time when home prices marked their steepest decline in four decades and building approvals for private homes, fell to their lowest level since 2012. This means banks will face selling pressure. Crude oil prices (CLU2 & LCOV2)   EIA reported a decline in crude oil inventory of 3.3 million and gasoline inventory of 1.1 million with SPR slowing to 3 million barrels, so resulting in an overall draw of 6.4 mb/d, but the reaction in the oil market remained muted. Production was adjusted higher by 0.1 mb/d to 12.1 mb/d. No change in net trade with imports and exports both declining 0.2 mb/d. WTI futures still trading below $90/barrel in Asian morning as focus shifts back to demand concerns, and Brent futures were below $96. USDJPY heading to 140   The late move higher in US 10-year yields has come back to haunt the yen, with Bank of Japan still remaining committed to keeping its 10-year yields capped at 0.25%. USDJPY rose to fresh 24-year highs of 139.44 in early Asian trading hours, and heading straight to 140 unless we see some verbal intervention coming through from the Japanese officials today. Risk abound with US jobs data due on Friday, and dollar momentum remaining strong. EURUSD still above parity with ECB’s rate hike in focus for next week, beyond the vagaries of gas supplies. GBPUSD however made fresh 2022 lows at 1.1586 as economic weakness remains in focus.    What to consider?  Fed’s Mester calls for over 4% Fed funds rate Cleveland Fed President Loretta Mester backed rates to go above 4% early next year and holding it there, while also clearly calling for no rate cuts in 2023. On inflation, Mester noted it is too soon to say inflation has peaked and wage pressures show little sign of abating, while the fight against inflation will be a long one. This message should get stronger if jobs, and more importantly CPI, data continues to be strong. At the same time, we now have Quantitative Tightening going to its full pace and Mester said that balance sheet reduction could take three years or so. New US ADP jobs data disappointed, but wage data remain upbeat While it is hard to trust estimates on the US ADP report given that it is using a new methodology and market impact/trust is only likely to build over time, it was notable that the headline came in at less than the half of the median estimate. Employment change for August was 132k vs expectations of 300k – clearly putting Friday’s NFP release in focus. ADP said that the data suggests a shift toward a more conservative pace of hiring. ADP noted that the median change in annual pay (ADP matched person sample) was +7.6% YoY for Job-Stayers, and +16.1% YoY for Job-Changers, still suggesting a pretty tight labor market.    Eurozone August CPI continues to climb According to the preliminary estimate, it was out at 9.1% year-over-year versus prior 8.9% and expected 9.0%. Core CPI, which is highly watched by the European Central Bank (ECB), is still uncomfortably high at 4.3% year-over-year. This is likely that double-digit inflation in the eurozone will become a reality by year-end. The Bundesbank has already warned that German inflation could peak around 10% year-over-year in the coming months. Expect a lively debate among the ECB Governing Council about the pace of tightening on 8 September. Several governors are leaning towards an aggressive hike (meaning 75 basis points) while a minority of governors and the ECB chief economist Philip Lane would rather prefer a step-by-step increase in order to take into consideration the risk of recession. US stocks wipe out half of the July rally, what is behind this and what’s next? The S&P500 fell 4.2% in August, erasing half of July’s rally, with investors selling down companies that face balance sheet tightening from runaway inflation and higher for longer interest rates. Meanwhile, in August, investors bought into sectors contributing to inflation (The Oil & Gas sector rose 9%, Agricultural 6%, Fertilizers 5%, and Food Retailers 3%). Meanwhile, investors topped up exposure to stocks/sectors that benefit from higher rates, which is why Insurance rose 3%. Inversely, the most selling was in sectors that will likely suffer from slower growth, higher rates, and inflation (Home Furniture fell 14% in August, Semiconductors lost 10%, Office REITs slid 10%). Notably, the S&P500 closed under its 200-day moving average for the 100th day. The last time this occurred was in the GFC. And since then, this is also the only time the S&P500 and Nasdaq have not made a typical V-shape recovery. This is something Saxo’s strategists Peter Garnry and Jessica Amir warned of, and recently highlighted in the Quarterly Outlook. As uncertainty remains, and comments from Fed and ECB speakers are increasingly bearish; we think growth sectors (tech, consumer spending, and REITs) will face further pressure given their futures earnings will dimmish. Inversely we expect commodities to continue to outperform.     China’s official manufacturing PMI edged up but remained in contractionary territory  China’s official NBS manufacturing PMI edged up to 49.4 in August from 49.0 in July, above expectations but remaining in contractionary territory. The improvement was largely driven by the rise of the new orders sub-index to 49.8 in August from 48.5 in July and helped by strong activities in the food and beverage industries ahead of the mid-autumn festival.  Covid-related disruptions and energy rationing were negative factors pressuring manufacturing activities.  Heatwaves and drought-induced power curbs have caused Sichuan and Chongqing to shut-down manufacturing activities for six days and eight days in August respectively. The stepping up of pandemic controls in quite a number of cities affected the survey negatively. The non-manufacturing PMI decelerated to 52.6 in August from 53.8 in July.  Both the services sector and the construction sector weakened.     Caixin China Manufacturing PMI is expected to fall to 50.0 The median forecasts of economists surveyed by Bloomberg expect the Caixin manufacturing PMI to slide to 50.0 in August from 50.4 in July, right at the threshold between expansion and contraction.  The official NBS Manufacturing PMI released yesterday showed that improvements were found in large and medium-sized enterprises but the activities in small businesses decelerated t a 47.6 reading in August from 47.9 in July.  Moreover, during the survey month, a Covid-19 outbreak hit Yiwu, an export-focussed manufacturing hub in Zhejiang, and might drag on the Caixin manufacturing PMI, which has a higher weight for medium and small-sized businesses in the eastern coastal region.   Australian manufacturing data falls, pressured by higher rates, wages, and scarcity of staff  Manufacturing only contributes 30% to GDP, however, two key sets of weaker manufacturing data will be reflected on by professional investors today. Manufacturing data released by AI Group showed activity fell into contractionary territory, following six months of expansion. The drop in Australian PMI to 49.3 in August was triggered by slower growth in factory activity from higher interest rates and wages, and a lack of workers. The other set of manufacturing data released from S&P Global showed manufacturing fell to a reading of 53.8 in August, down from 55.7 in July. Significantly, the reading was revised lower from the flash (preview reading) and was the lowest read in a year. As such, investors may see selling pressures in key manufacturing stocks. ASX manufacturers and producers to watch include; Woodside, Caltex, Woodside, Whitehaven and Viva Energy, in energy, which may also see profit-taking after gaining a post as some of this year’s best ASX performers. Other companies to watch include Amcor, the global packaging giant. CSL, the global vaccine, and blood therapy business. As well as BHP, Rio Tinto, and Fortescue, global mining producers.  US ISM manufacturing data due today Lower prices at the pump has seemingly helped the US economy reverse from the slowdown concerns, with Chairman Powell also getting the confidence to say that the economic momentum is strong. ISM manufacturing, which is scheduled to be reported on Thursday, may reflect the weakness seen in the S&P survey, but will still be lifted by the backlog in auto vehicle production. Consensus estimates expect ISM manufacturing to cool slightly from July’s 52.8 and come in at 51.9 in August, still remaining in expansionary territory. ISM employment will also be key to watch ahead of the NFP data due on Friday.  Singapore’s first digital bank launch Grab and Singtel have entered an alliance to roll out a banking app next week in Singapore called GXS, that will be Singapore's first digital bank. This is mostly targeted to younger users and small businesses, tapping on Grab's food and ride-hailing customers, in order to improve the penetration of financial services in Singapore. A savings account is also in the offering, with no minimum balance requirement, in direct competition to the traditional banks.   For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets, what to consider – September 1, 2022
The USD/JPY Pair Above Maximum. Long Positions Gain Profits

The Price Is Growing. The USD/JPY Pair Follows US Dollar.

InstaForex Analysis InstaForex Analysis 01.09.2022 08:57
The USD/JPY pair once again showed its commitment to following the US dollar more than the stock market. Even the EUR/JPY has moved away from correlations with the stock market, leaving this function to the cross rate with the British pound - GBP/JPY. In today's Asian session, USD/JPY moved above the linear resistance of the embedded price channel line (139.08) and overcame the July 14 peak at 139.39. Now the price has opened a target at 141.00, formed by the upper line of the price channel. The Marlin Oscillator is growing, when the price reaches the target of 141.00, Marlin will begin to experience pressure in the overbought zone. A correction is now possible from this level. The price is growing above the balance and MACD indicator lines on the four-hour chart, the Marlin Oscillator turned up without reaching the border with the bears' territory. We expect continued short-term growth.     Relevance up to 04:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320500
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

What To Expect From Pair EUR / USD? Currently Trying To Push Through The Support Level

InstaForex Analysis InstaForex Analysis 01.09.2022 09:09
In the first half of Wednesday, the euro was growing against the decline of other world currencies for the second consecutive day - the bulls on the euro were still able to work out the growth of the August CPI to 9.1% from the previous value of 8.9% y/y. Data from ADP on employment in the US private sector came out in the evening - 132,000 jobs were created in August against the forecast of 300,000. The US stock index S&P 500 fell by 0.78%, the yield on 5-year government bonds increased from 3.26% to 3.35%, investors continued their weekly withdrawal from risk and the euro lost ground. The pair is currently trying to push through the support level of 1.0020, leaving under which will open the nearest target of 0.9950. Overcoming 0.9950 opens the 0.9850 target. We are also waiting for the signal line of the Marlin Oscillator to go under the turquoise line forming convergence and its decrease to the area of the pink dashed line, from which a stronger correction is likely to form. The price is still above the balance and MACD indicator lines on the four-hour chart, the Marlin Oscillator is still in the positive area, but it has a clear intention to go below the zero line and change direction. The MACD line is approaching the level of 0.9950, thus it will strengthen it, and the price, in case of overcoming this level, will receive a strong impulse to further decline. The critical level of this scenario is 1.0088, the high on August 26th.   Relevance up to 04:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320504
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

GBP/USD Is Under Strong Bearish Pressure. Trading Suggestions: Sharp Break Above The Symmetrical Triangles Pattern

InstaForex Analysis InstaForex Analysis 01.09.2022 09:19
The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Early in the European session, the British Pound (GBP/USD) is trading at around 1.1574. We can see the formation of a symmetrical triangle on the 4-hour chart. If the pound manages to break above this pattern, we could expect a bullish acceleration towards the 21 SMA located at 1.1670. The British pound is under downward pressure due to the gloomy outlook for the British economy. Earlier this month, the Bank of England forecast that the British economy would enter a prolonged recession from the fourth quarter of 2022. This suggests that in the medium term the pound could reach the psychological level of 1.15 and even the low of 2020 at 1.1410. The GBP/USD pair is trading below the 21 SMA located at 1.1670 and below the 200 EMA located at 1.1957. Any technical bounce towards these levels will be seen as an opportunity to sell. On the 4-hour chart, we can see the formation of a downtrend channel since August 8. In case the downside pressure continues, a technical bounce around the bottom of the downtrend channel is expected around 1.1542. Technically, GBP/USD is under strong bearish pressure and is trading around -1/8 of Murray at 1.1598. This Murray level represents a technical reversal zone. In the event that the pound resumes its bullish cycle, we should expect it to trade above 1.1596 (-1/8 Murray), which could set the stage for a recovery in GBP and it could reach the top of the downtrend channel at around 1.1780. On the other hand, if the pound continues its downward acceleration, it is expected to fall towards the area of around 1.1542. There is daily support and it could even reach -2/8 of Murray located at 1.1475. Our trading plan for the next few hours suggests a sharp break above the symmetrical triangles pattern at around 1.1596 to buy with targets at 1.1670 and 1.1780.   Relevance up to 06:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/290925
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

Serious Pressure On The GBP/USD Pair. What Happens When The Pair Goes Down Or Up?

InstaForex Analysis InstaForex Analysis 01.09.2022 09:58
Only one signal to sell the pound was formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1654 level in my morning forecast and advised making decisions on entering the market from it. A breakthrough and reverse test from the bottom up of this range gave a sell signal, which eventually resulted in a move down by more than 50 points. Before the test and false breakout of the level of 1.1654 in the afternoon, I lacked literally one point, so I couldn't get a point from there to open new short positions. When to go long on GBP/USD: Obviously, the pressure on the pound continues to increase, including due to the large spread in the interest rates of central banks. The cost of living crisis, high inflation and the British economy rapidly sliding into recession leave no chance for bulls on the pound. Against this background, it is time to talk about updating the low that was reached for the pair during the beginning of the coronavirus pandemic in 2020 - this is, for a minute, 1.1409. Today we expect the release of the index of business activity in the manufacturing sector in the UK for August this year. It is unlikely that it will be revised for the better, so there is no need to have much hope for the restoration of the pair. In case GBP/USD falls further, forming a false breakout in the area of the nearest support at 1.1540 will lead to the first signal to open long positions in anticipation of a correction to the area of 1.1595. A lot also depends on this level, since its breakthrough can pull stop orders from speculative bears. A test of 1.1595 from top to bottom will testify to a return of demand for the pound and creates a buy signal with growth to a more distant level of 1.1650, where moving averages are passing, playing on the bears' side. The farthest target will be the area of 1.1714, where I recommend taking profits. If the GBP/USD falls further, which is more likely, and there are no bulls at 1.1540, the pressure on the pair will increase. A breakthrough of this range will lead to the renewal of the next annual low. In this case, I advise you to postpone long positions until the next support at 1.1479, but you can act there only on a false breakout. I recommend opening long positions on GBP/USD immediately for a rebound from 1.1409, or even lower - around 1.1360, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Bears continue to push the pound downward. The only problem for them now is the beginning of a new month, which may lead to a small upward correction in the pound, which many have been expecting for a long time. Therefore, selling on the breakdown of annual lows is a rather risky strategy. It is much better to act on the basis of an upward correction and weak fundamental statistics, which is expected today in the UK. In this case, you can put a short stop with a fairly extensive potential for the pound's decline. The optimal scenario for selling GBP/USD would be forming a false breakout at the level of 1.1595, which was formed at the end of yesterday. This will make it possible to achieve a new fall and renewal of annual lows around 1.1540. A breakdown and reverse test of this range will give a new entry point for selling with a fall to 1.1479, and the area of 1.1409 will be a further target, where I recommend taking profits. In case GBP/USD grows and there are no bears at 1.1595, there will be ghostly chances for an upward correction, and bulls will get an excellent opportunity to return to 1.1650, where the moving averages play on the bears' side. Only a false breakout there will provide an entry point into short positions based on the pair moving downward. If there is no activity there, I advise you to sell GBP/USD immediately for a rebound from 1.1714, counting on the pair's rebound down by 30-35 points within the day. COT report: The Commitment of Traders (COT) report for August 23 logged an increase in both short positions and long positions. And although the latter turned out to be a bit more, these changes did not affect the real current picture. Serious pressure on the pair remains, and recent statements by Federal Reserve Chairman Jerome Powell that the committee will continue to aggressively raise interest rates further have only increased pressure on the British pound, which has been experiencing quite a lot of problems lately. Expected high inflation and a looming cost-of-living crisis in the UK does not give traders room to take long positions, as a fairly large range of weak fundamentals is expected ahead, likely to push the pound even further below the levels at which it is currently trading. This week, it is important to pay attention to data on the US labor market, which, among other things, determine the Fed's decision on monetary policy. Continued resilience with low unemployment will lead to higher inflationary pressures going forward, forcing the Fed to further raise interest rates, putting pressure on risky assets, including the British pound. The latest COT report indicated that long non-commercial positions rose 14,699 to 58,783, while short non-commercial positions rose 9,556 to 86,749, leading to a slight rise in the negative non-commercial net position to -27 966 against - 33,109. The weekly closing price fell off from 1.1822 against 1.2096. Indicator signals: Trading is below the 30 and 50-day moving averages, which indicates further decline in the pair. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair goes down, the lower border of the indicator around 1.1570 will act as support. In case of growth, the upper border of the indicator around 1.1650 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.     Relevance up to 08:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320520
The Markets Still Hope That The Fed May Consider Softer Decision

Analysis Of The EUR/USD Pair. The Price Will Drop?

InstaForex Analysis InstaForex Analysis 01.09.2022 10:12
Trend analysis (Fig. 1). The euro-dollar pair may move downward from the level of 1.0052 (close of yesterday's daily candle) to test 1.0013, the 85.4% retracement level (blue dotted line). Upon reaching this level, an upward movement is possible to 1.0079, the 38.2% retracement level (white dotted line). From this level, the price may continue to move up. Fig. 1 (daily chart). Comprehensive analysis: General conclusion: Today, the price may move downward from the level of 1.0052 (close of yesterday's daily candle) to test 1.0013, the 85.4% retracement level (blue dotted line). Upon reaching this level, an upward movement is possible to 1.0079, the 38.2% retracement level (white dotted line). From this level, the price may continue to move up. Alternative scenario: from the level of 1.0052 (close of yesterday's daily candle), the price may move downward to test the support level of 0.9952 (thick blue line). Upon reaching this level, an upward movement is possible to 1.0010, the 23.6% retracement level (white dotted line).     Relevance up to 08:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320514
The Upside Of The EUR/USD Pair Remains Limited

The EUR/USD Pair Is Swinging. Details Of What Happens.

InstaForex Analysis InstaForex Analysis 01.09.2022 10:25
EUR/USD 5M The EUR/USD pair continued to move in a style already familiar over the past two weeks. The price reversed sharply again, and the movement took place inside the 0.9900-1.0072 channel. We have already said that this channel cannot be considered a horizontal channel, although formally it is just that. That movement, which we call flat, is also not really such, but has all the signs of it. Best of all, the current movement fits the description of a "swing", which is actually no better than a flat. The pair failed to settle above the level of 1.0072 for the second time, so now we can count on a certain drop in quotes. From Wednesday's macroeconomic reports, we note inflation in the European Union, which continued to accelerate and now stands at 9.1% y/y. It was after the release of this report that the euro began to appreciate, but we do not believe that these two events are connected. At this time, when it is already known about the possible tightening of the European Central Bank's monetary policy in September, the likelihood of a tougher rate hike does not increase. In regards to Wednesday's trading signals, the situation was slightly better than the day before. Mainly due to the formed area of 1.0001-1.0019. First, a sell signal was formed when the price settled below it, and then a buy signal. The sell signal turned out to be false, but the pair went down 15 points. Therefore, Stop Loss should have been set to breakeven. The long position managed to earn 30 points as the price reached the nearest target level of 1.0072. A rebound from the level of 1.0072 could no longer be worked out, since this signal was formed rather late. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For most of 2022, they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. The number of long positions for the non-commercial group increased by 11,600, and the number of shorts increased by 12,900 during the reporting week. Accordingly, the net position increased by about 1,300 contracts. After several weeks of weak growth, the decline in this indicator resumed, and the mood of major players remains bearish. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 44,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. Over the past six months or a year, the euro has not been able to show even a tangible correction, not to mention something more. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 1. The ECB was late, does not admit its mistakes and continues to do everything "for show". Overview of the GBP/USD pair. September 1. The pound is already falling by inertia and tends to overtake the euro in the fall against the dollar. Forecast and trading signals for GBP/USD on September 1. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair has consolidated above the trend line on the hourly timeframe, but still does not leave the feeling that the downward trend continues. At the moment, the pair is generally trading inside the horizontal channel, and this channel has already expanded to 0.9900-1.0072. If the bulls manage to settle above it, then it will be possible to count on a slight increase in the euro, but given the current "swing", there may be constant rollbacks to the downside. We highlight the following levels for trading on Thursday - 0.9900, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (1.0051) and Kijun-sen (1 ,0001). There is not a single level below the level of 0.9900, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union will publish the unemployment rate and the index of business activity in the manufacturing sector in the second assessment for August. Both reports are insignificant. Meanwhile, we have the ISM index of business activity in the service sector in the United States, and this report may provoke a market reaction. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 02:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320492
Analysis Of The EUR/JPY Pair Movement

An Upward Signal For The USD/JPY Pair And Potential Purchase Opportunities

InstaForex Analysis InstaForex Analysis 01.09.2022 11:06
Technical analysis: USD/JPY has been trading upside this morning, I found the breakout of the ascending triangle in the bakcground, which is good sign for further growth. Trading recommendation: Due to the breakout of the ascending triangle in the background, watch for potential buying opportunities. Upside objective is set at the price of 140.10. Stochastic oscillator is showing oversold condition and the fresh bull cross, which is good sign for further rally. Key support is set at the price of 139.00   Relevance up to 10:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/290987
NatWest Group Reports Strong H1 2023 Profits Amid Rising Economic Concerns

Are You Starting Your Adventure With Forex? This Is What You Should Know About EUR/USD and GBP/USD Today

8 eightcap 8 eightcap 01.09.2022 11:24
Details of the economic calendar for August 31 Eurozone inflation hit a new record high of 9.1% in August. Eurostat reports that the main growth driver is high energy prices. The high level of inflation may again push the European Central Bank to further interest rate hikes. It is worth noting that for the past two days, most speakers from the ECB have been actively advocating the possibility of raising the ECB rate by 0.75% in September. In turn, German Chancellor Olaf Scholz says that citizens will feel a significant increase in electricity prices in September. In simple terms, inflation in the EU will continue to grow. During the American trading session, employment data in the United States was published. According to the ADP report, the number of jobs in the private sector in August increased by 132,000. Forecast expected an increase of 300,000. The divergence of expectations has served as a stimulus for the local sell-off of the US dollar. As a reminder, the ADP report is often viewed by traders as a leading indicator for the US Department of Labor report due on September 2nd. Category "Interesting moments" Bloomberg: Fed Chairman Jerome Powell has buried the concept of a "soft landing" of the US economy. Now the Fed's goal is to bring inflation down by slowing US economic growth below its potential level, which officials estimate at 1.8%. Analysis of trading charts from August 31 The EURUSD currency pair, despite local manifestations of activity caused by speculative interest, is still in close proximity to the parity level (1.0000). Price fluctuation within 150 points lasted for almost two weeks. This movement, in theory, can become a process of accumulation of trading forces. The GBP/USD currency pair gradually weakened, which resulted in a prolongation of the main downward trend. Details: Since August, the pound has lost 700 points (about 5.5%) of value, which is considered a strong price change, allowing short positions to overheat. Since the beginning of the medium-term trend, June 2021, the pound has lost 2,600 points in value (about 18.5%). Economic calendar for September 1 The final data on business activity indices in the manufacturing sector in Europe, the United Kingdom, and the United States are to be published today. If the indicators coincide with the preliminary estimate, the data will be ignored by market participants since they have already been priced in. The EU employment data will also be published, which may rise from 6.6% to 6.7%. This is already a negative factor for the euro if the forecast matches. During the American session, in addition to the manufacturing PMI data, weekly jobless claims in the United States will be published, where figures are assumed to rise. This is a negative factor for the US labor market, which may affect dollar positions. Statistics details: The volume of continuing claims for benefits may increase from 1.415 million to 1.438 million. The volume of initial claims for benefits may increase from 243,000 to 248,000. Time targeting: EU Manufacturing PMI – 08:00 UTC UK Manufacturing PMI – 08:30 UTC EU Unemployment – 09:00 UTC US Jobless Claims – 12:30 UTC US Manufacturing PMI – 14:00 UTC Trading plan for EUR/USD on September 1 A recent attempt to keep the price above 1.0050 proved unsuccessful. As a result, the quote again rolled back to the level of 1.0000. In this situation, do not rush, the tactics of work, as before, will be focused on the main move that will arise after the completion of the stage of accumulation of trading. We concretize the above: The upward scenario for the currency pair is taken into account after the price is held above the value of 1.0050. In order to filter out false touches, the quote needs to stay above the control value in the daily period. The downward scenario is considered in the market in the form of two steps. The local move will be considered by the trailers at the moment the price holds below 0.9970 in a four-hour period. In this case, there is a high probability of movement towards the value of 0.9900. The main move will be relevant after holding the price below 0.9890 in the daily period. This scenario will lead to a prolongation of the trend. Trading plan for GBP/USD on September 1 In this situation, market participants set their sights on the local low of 2020. There are about 150 points left to go, but given the growing oversold level of the pound sterling, a full-length technical correction is possible. The price area 1.1410/1.1525 can serve as a support on the way of sellers. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.     Relevance up to 09:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320541
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

GBP/USD: Sell Or Buy? Trading Suggestion

InstaForex Analysis InstaForex Analysis 01.09.2022 11:32
Analysis of transactions in the GBP / USD pair Pound tested 1.1669 when the MACD line was just starting to move below from zero, which was a good signal to sell. Resultantly, the quote fell by 40 pips, updating the yearly low. As for long positions around 1.1628, they did not bring much result because the pair traded downwards in the afternoon. Also, no other signals appeared for the rest of the day. Pound continues to update yearly lows, so there are not many people who want to buy it. Even weak employment data in the US non-farm sector did not lead to its sharp increase yesterday afternoon. A report on business activity in the UK manufacturing sector is coming today, but it is unlikely to trigger a sharp jerk in pound. The only thing that could stop the bear market temporarily is a strong oversold for all indicators. In the afternoon, the focus will shift to the data on US jobless claims, ISM manufacturing index and speech by FOMC member Raphael Bostic. For long positions: Buy pound when the quote reaches 1.1622 (green line on the chart) and take profit at the price of 1.1683 (thicker green line on the chart). Although there is little chance for a rally today, an upward correction could still happen. Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1572, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1622 and 1.1683. For short positions: Sell pound when the quote reaches 1.1572 (red line on the chart) and take profit at the price of 1.1525. Pressure could return at any moment, especially after weak statistics in the UK. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1622, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1572 and 1.1525. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 09:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320534
The EUR/USD Price May Fall Under 1.0660

Eurozone: What Could Help Wages To Grow? Unemployment Decreased To 6.6%

ING Economics ING Economics 01.09.2022 11:44
The eurozone labour market remains historically tight despite a rapidly slowing economy. While the strong labour market increases the risk of rapid wage growth fueling inflation further, there is no evidence of that so far Eurozone unemployment is at a historically low rate, but a recession could change that   Unemployment fell from 6.7 to 6.6% in July, continuing the steady trend of declining unemployment. The rate is currently well below the natural rate of unemployment, which suggests upward pressure on wages. At the same time though, there is little evidence of this happening so far. Negotiated wage growth – most Europeans see wages adjusted by collective bargaining agreements – grew at an annual rate of 2.1% in 2Q, which is still well below what is to be expected given labour shortages and high inflation. The labour market is at an interesting crossroads at the moment. Employment expectations from businesses are dropping moderately and the economy is moving towards recession at the moment. Given the tight labour markets in most eurozone economies, the expectation is that some degree of labour hoarding will take place to ensure adequate staffing once the economy recovers. Where wages are headed is uncertain in these times. We do expect the tight labour market and high inflation rate to result in further rises in wage growth. A recession will dampen the prospects for increases but is unlikely to nullify them all together. Still, signs of a wage-price spiral remain absent. If a recession indeed materializes, expect an unemployment rate slightly creeping up from current historically low levels. Read this article on THINK TagsGDP Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/AUD Pair May Have The Potential To Continue Its Decline

How The EUR/USD Looks In The Short And In The Long Positions?

InstaForex Analysis InstaForex Analysis 01.09.2022 11:54
Analysis of transactions in the EUR / USD pair Euro tested 0.9998 at the time when the MACD was far below zero, which limited the downside potential of the pair. Sometime later, it tested the level again, but this time the MACD line was above zero, so the upside potential was limited. This happened after the test of 1.0043. Although the sharp rise in the eurozone consumer price index came as no surprise, it hurt euro's upward outlook in the morning. Then, in the afternoon, dollar was affected by weak employment data from ADP, which suggested that the rate hikes implemented by the Fed hurt the labor market. Today, a number of reports are scheduled to be released, namely the volume of retail trade in Germany, index of business activity in the manufacturing sector and change in the unemployment rate of the eurozone. Good figures will allow buyers to try updating the weekly highs. But in the afternoon, the focus will shift to the data on US jobless claims, ISM manufacturing index and speech by FOMC member Raphael Bostic. For long positions: Buy euro when the quote reaches 1.0026 (green line on the chart) and take profit at the price of 1.0081. A rally will occur if statistics in the Euro area exceed expectations. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0005, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0026 and 1.0081. For short positions: Sell euro when the quote reaches 1.0005 (red line on the chart) and take profit at the price of 0.9959. Pressure will return if the Euro area releases weak economic statistics. The failure of buyers to update yesterday's highs will also end the upward correction. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0026, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0005 and 0.9959. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.       Relevance up to 09:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320532
What's ahead of Euro against greenback today? Let's look at Stefan Doll's review

Despite Declining Energy Prices, European Central Bank (ECB) Is Expected To Hike The Rate By 75bp

ING Economics ING Economics 01.09.2022 12:46
Markets now favour a 75bp hike by the European Central Bank in an upcoming meeting, ignoring the drop in energy prices this week. Gilts are suffering from fears of fiscal spending and foreign outflows Bonds have their hawkish blinkers on and miss a drop in energy prices A beat in core eurozone CPI, with our economist flagging worrying signs of second-round effects from energy to goods prices, has tipped the scales in favour of a 75bp ECB hike in September. The market is now pricing 125bp of tightening over the next two meetings. Another flurry of hawkish comments, from the usual suspects Joachim Nagel and Robert Holzmann, helped convince investors that hawks are winning the front-loading hike debate. What’s more surprising is that the further rise in front-end rates and, expectedly, curve flattening, occurs while European-traded energy prices continue their decline this week. September and October are shaping up to be busy months in terms of supply With so much hawkishness priced and some relief in traded energy, it is tempting to call the peak in 10Y Bund yields, but there is another factor at play. September and October are shaping up to be busy months in terms of supply. Even if volumes do not match the previous years, we ascribe lower issuance to more difficult liquidity conditions, we would expect a greater market impact. The first eight months of the year are a case in point, despite lower volumes, supply has put greater pressure on bond yields across the credit spectrum. Bond sales should push bond yields higher in September and October Source: Bond Radar, ING Gilts have no (foreign) friends UK rates continue to rise relative to their European and US peers. As we wrote recently, divergence in energy prices and inflation explains their jump relative to USD yields. As for the faster rise than European peers, one needs to dig deeper into UK-specific problems. In an economy that is generating a greater proportion of its inflation domestically, the coming fiscal support package stands a greater chance of resulting in a more aggressive Bank of England (BoE) tightening cycle. These fears are probably exacerbated by the current leadership vacuum and the uncertainty about the extent of extra spending and tax cuts that will be unveiled. Fears of fiscal profligacy tend to hit gilts harder. Due to a (historically at least) wider current account deficit, UK markets are more sensitive to a worsening of its twin deficits. The recent decline in net overseas buying of gilts, still positive but the lowest on a rolling three-month basis since 2020 when fears of a mini run on the sterling were rife, did not help. We’re still far from the simultaneous sell-off in UK bonds, stocks, and currency that occurred in March 2020 and prompted the BoE to restart quantitative easing, but the parallel sheds an awkward light on its plan to actively sell bonds, on top of ‘passive’ balance sheet reduction. Foreign buying of gilts is at its lowest since 2020 Source: Refinitiv, ING Today's events and market views Most manufacturing PMIs released today will be second readings with the exception of the Dutch, Spanish, and Italian indices. Italian and eurozone unemployment complete the list of European releases. Supply will remain an important driver of short-term price action with Spain (3Y/10Y/30Y and linker), France (9Y/10Y/16Y), and Ireland (10Y/30Y) lined up for today. In the afternoon, US PMI manufacturing is a second reading but its ISM equivalent is a first. In addition to a decline in the headline figure, markets will look closely for a further drop in the prices paid component. Jobless claims and construction spending are the other US releases we look out for. The pre-ECB meeting quiet period starts today so we would be surprised to hear Fabio Centeno make any comment on monetary policy. The Fed’s own quiet period only starts this weekend so Raphael Bostic might try to out-hawk his colleagues. Read this article on THINK TagsRates Daily ECB Bonds Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Russia's Weekend Mutiny and Gold's Bounce off Support Raise Concerns; Verbal Intervention in USD/JPY and US Banking Stocks Tumble Ahead of Fed's Stress Test Results

The FED's Monetary Policy Is Favorable To The USD

InstaForex Analysis InstaForex Analysis 01.09.2022 13:12
The US currency is in tension before the release of the US labor market report, despite the advantage over the European one. At the same time, EUR does not leave attempts to rise and catch up. Currently, the downward trend prevails on the markets, plunging the American and European currencies into pessimism. According to economists at Commerzbank, a long-term strengthening of the US labor market provides significant support to the greenback. Experts put an equal sign between a strong labor market and a growing dollar. According to preliminary estimates, the positive trend in the USD will continue as long as the Federal Reserve adheres to a tight monetary policy. This situation is favorable for the US currency, but undermines the position of the European one. The EUR/USD pair was trading at 1.0012 on the morning of Thursday, September 1, trying to get out of the current range. At the same time, analysts pay attention to the high probability of the pair moving towards parity. The greenback plunged a bit on Wednesday evening, August 31, after the release of macro statistics on the US labor market, but later won back short-term losses. U.S. private-sector jobs increased by 132,000 last month, according to Automatic Data Processing (ADP), an analyst firm. Initial jobless claims in the U.S. surged to 248,000 on Friday, according to preliminary forecasts. Data on unemployment in the country will be released on September 2. Experts expect this indicator to remain at the level of July (3.5%) and to increase the number of jobs in the non-agricultural sector of the country. Many currency strategists rely on strong US employment data and falling unemployment. They consider these indicators the most important for the Fed and its future monetary policy. However, some experts argue that the key indicator for the central bank is the level of salaries. Recall that Fed Chairman Jerome Powell and other members of the FOMC are counting on the "cooling" of the national labor market. Representatives of the Fed are trying to avoid a situation in which wage growth provokes another round of inflation. In such a situation, the increase in the number of vacancies recorded in August is a negative signal for the central bank. Against this background, the European currency seeks to maintain balance and get out of the price hole. However, its efforts are rewarded with rare bursts of recovery, and then a decline. Adding fuel to the fire is uncertainty about the European Central Bank's next steps on the rate. According to Nordea economists, next week the central bank will raise the rate by 75 basis points. The bank believes that even negative forecasts for economic growth in the region will not interfere with this. At present, the inflation rate in the eurozone remains stably high. According to current reports, inflation in EU countries reached an impressive 9.1% in August. Previously, this figure was 8.9%. The current situation undermines the euro's position, which is hardly kept afloat. According to analysts, the weakening of the euro against the dollar is due to the active tightening of monetary policy by the Fed. At the same time, the current parity between currencies may disappear when a compromise is reached in the EU on tightening the monetary policy or when inflation in the United States returns to the target of 2%. However, both situations are unlikely, experts say. According to experts, the 1:1 ratio between the dollar and the euro will remain until the EU countries begin to tighten monetary policy following the example of the United States. However, there are many pitfalls here, as the ECB needs to find a compromise between all the countries of the euro bloc. Many experts believe that by the end of 2022 the balance of power in the EUR/USD pair will change, due to which the topic of parity will be removed. Experts allow changes in the ECB's actions regarding monetary policy. The same is possible with regard to the Fed, which is worried about labor market problems and galloping inflation. According to analysts, the pair will tend to the usual ratio of 1.0500-1.1000. "In the event of a sharp turnaround, the EU economy will receive a solid bonus for the growth of exports and the economy at the expense of the US and China," the experts emphasize. Market participants are concerned about the questions: will the Fed take a decisive approach to monetary policy? Will the ECB follow suit? Many traders and investors are skeptical about the immediate prospects for the dollar and the euro. At the same time, analysts expect a reduction in key rates in the second half of 2023. The implementation of such a scenario will weaken the greenback and limit the potential for its strengthening. In the current situation, some experts believe that the markets are wishful thinking, expecting less rigidity from the Fed in the process of forming monetary policy. In this matter, much depends on the level of unemployment in the country. Excessive strengthening of the labor market in the US is pushing the central bank to tighten monetary policy as soon as possible. Fed officials are stepping up the pace of this tightening, emphasizing that they are ready to temporarily sacrifice the economy for the sake of curbing inflation. However, a few months ago they said they would try to avoid a recession. However, despite the economic upheavals, the US currency remains strong and remains competitive in the global market.       Relevance up to 08:00 2022-09-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320524
Long-Term Rates Diverge Amid Policy Divergence and Economic Signals

Will The US Employment Report Affect The EUR/USD Pair?

InstaForex Analysis InstaForex Analysis 01.09.2022 13:54
false breakdown occurred in EUR/USD yesterday, followed by a sharp increase towards the weekly high. Then, there was a slight rollback, which gave buyers an opportunity to open new positions. Tomorrow's employment report from the US will affect market sentiment. As such, traders must limit short positions in order to avoid falling into the trap of sellers. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Read more: https://www.instaforex.eu/forex_analysis/320551 Read more: https://www.instaforex.eu/forex_analysis/320551 Relevance up to 10:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320551
The USD/JPY Pair Above Maximum. Long Positions Gain Profits

The USD/JPY Pair Above Maximum. Long Positions Gain Profits

InstaForex Analysis InstaForex Analysis 01.09.2022 14:06
  Previous trading plans in USD/JPY pointed to possible increase in prices. Accordingly, the pair updated the monthly high yesterday, climbing above 139.3. Plan: Development: Congratulations to those who followed the strategy! The quote moved by as much as 6,000 pips! Long positions can now be closed to gain profit. The trading idea was based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day!   Relevance up to 09:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320530
Further Downside Of The AUD/JPY Cross Pair Is Expected

Further Decline In Stock Market Indices. Probability To Raise The Discount Rate.

InstaForex Analysis InstaForex Analysis 01.09.2022 14:21
Last month was quite difficult for investors as they expected the Fed to tone down the rate increases, but the members insisted the opposite. It resulted to extremely high volatility, which led to a sharp decline in the stock indices of both Europe and the US. The situation in the forex market, meanwhile, was ambiguous because traders no longer believe that after a pause in raising interest rates in August, the Fed will lift them by 0.25% to 0.50% in September. Even so, the central bank continues to say that it will take advantage of the situation of the labor market and continued business activity in order to decisively suppress inflation. Cleveland Fed President Loretta Mester confirmed this by remarking that rates could hit 4% early next year. Most likely, the central bank will stop only when the economy deteriorates. There is a 73% probability of a 0.75% increase in the discount rate this month, and following Mester's estimate, the Fed will raise rates either by 0.25% or by 50% at the remaining 3 more monetary policy meetings. In terms of public debt, sell-offs will continue in the US, which will support dollar. Stock indices, meanwhile, will decline further, interspersed with local rebounds. Oil quotes, on the other hand, are unlikely to drop noticeably because demand remains quite large for the time being. The decline observed recently was only caused by the growth of dollar and start of recession in Europe, which forces EU countries to save on energy resources. The military conflict in Ukraine is a factor as well. As such, there is a huge chance that dollar will rise after a local rebound. It will continue to dominate markets, putting pressure on commodity assets. The upcoming report on US jobless claims and index of business activity in the manufacturing sector of Germany, the eurozone and the US will affect sentiment. Forecasts for today: AUD/USD The pair corrected to 0.6840. If selling pressure increases, the quote will fall to 0.6700. GBP/USD Although the pair is trading above 1.1570, quotes could decrease if macroeconomic statistics come out weaker than the forecasts.       Relevance up to 08:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320526
A Softer Labour Market In Australia And Its Possible Consequences

War In Ukraine Affected Australia And It's Not Only About Inflation. AUD/USD Has Significantly Decreased Since The Beginning Of The War

Kenny Fisher Kenny Fisher 01.09.2022 14:41
The Australian dollar is showing limited movement today. In the European session, AUD/USD is trading at 0.6835, down 0.10%. Australian Capex falls for a second successive quarter Australian Private Capital Expenditure disappointed in Q2, with a reading of -0.3% (vs -0.3% in Q1), well below the forecast of 1.5%. This follows weak construction data on Tuesday, as Construction Work Done posted a second straight decline, coming in at -3.8% in Q2. These numbers are a further indication that the Australian economy is slowing down, as a weak global economy and higher interest rates have dampened economic activity. The Australian dollar has not reacted to these weak releases, as the currency is much more sensitive to global developments than internal data. The war in Ukraine has raised the price of energy and food imports for Australians and caused high inflation. As well, risk appetite has been dampened, and AUD/USD has tumbled about 650 points since the Russian invasion of Ukraine. Additionally, the Federal Reserve continues to tighten policy, and this has boosted the US dollar over the past few months. With Fed Chair Powell delivering a “read my lips” speech at Jackson Hole, pledging to continue raising rates, there is room for the Australian dollar to continue to lose ground. The RBA meets next on September 6th. In all likelihood, the RBA will deliver a 0.50% increase, as inflation hasn’t shown any signs of peaking. In the second quarter, inflation rose to 6.1%, up from 5.1% in Q1. Policy makers are hoping to avoid a recession and guide the economy to a soft landing, but the central bank, like the Fed, has made clear that its paramount goal is to curb inflation and avoid inflation expectations from becoming anchored. Read next: Italy: This Year's Gross Domestic Product (GDP) Is Expected To Hit Quite Impressive Level!| FXMAG.COM Investors will be keeping a close eye on US nonfarm payrolls on Friday. The markets are expecting a strong gain of 300 thousand for August, after the massive 528 thousand gain in July. A strong NFP will provide support to the Fed’s plans to remain aggressive and should boost the US dollar. Conversely, a weak reading will raise speculation that the Fed will have to ease up and the US dollar could react with losses. AUD/USD Technical There is resistance at 0.6919, followed by resistance at 0.6983 0.6830 is providing support, followed by 0.6766 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie yawns after Capex dips - MarketPulseMarketPulse
The UK Markets Remain Volatile, Possible Contraction Of The Eurozone Economy

FX: GBP/USD May Catch Us By Surprise Soon! Tomorrow's US NFP May Let Boost USD (US Dollar) Or Arouse Concerns Over Fed's Strategy

Kenny Fisher Kenny Fisher 01.09.2022 14:54
The British pound can’t buy a break and has fallen for a fifth straight day. GBP/USD is trading at 1.1586 in Europe, down 0.29%. UK Manufacturing PMI contracts The UK manufacturing sector has been struggling for quite some time and in August, manufacturing production declined. Manufacturing PMI fell to 47.3 in August, down from 52.1 in July. This marked the first contraction (a reading below 50.0) since May 2020, during the first Covid lockdown. The PMI decline reflected a range of problems, including supply chain disruptions, port congestion, and shortages of raw materials and workers. With inflation still on the rise and fears of a recession, the manufacturing sector faces plenty of headwinds and things could get worse before they improve. Market attention now shifts to one of the key events on the economic calendar, Friday’s US nonfarm payrolls. On Wednesday, the ADP Employment report showed a drop to 130 thousand new jobs in August, down from 270 thousand. The reading was well below the estimate of 288 thousand and the lowest level since August 2021. The ADP release is not considered a reliable gauge for nonfarm payrolls, but still garners close attention as it could point to a trend in job growth. Read next: The BTC/USD Pair Looks Like A Double Bottom Price. Iran's Ministry Of Industry, Mines And Trade Has Approved The Use Of Cryptocurrencies For Imports| FXMAG.COM August Nonfarm payrolls are also expected to drop, with a consensus of 300 thousand, following the massive 528 thousand gain in July. A reading of 300 thousand or higher would point to solid job growth and would likely give the US dollar a boost, as it would give the Federal Reserve a green light to continue with its aggressive rate-tightening cycle. Conversely, a weaker-than-expected reading would raise doubts about the Fed’s pledge to stay aggressive, which could lead to a rotation out of US dollars. GBP/USD Technical  GBP/USD is testing support at 1.1672. Below, there is support at 1.1604 There is resistance at 1.1786 and 1.1854 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound extends losses after weak Mfg. PMI - MarketPulseMarketPulse
Further Downside Of The AUD/JPY Cross Pair Is Expected

Australian Currency Is Weakening. What To Expect From The AUD/USD Pair?

InstaForex Analysis InstaForex Analysis 02.09.2022 08:52
  Yesterday morning, the index of business activity in the manufacturing sector of Australia for July showed a decline to 49.3 from 52.5, the US dollar index showed a daily increase of 0.91%, and as a result, the aussie lost 0.89%. The price is approaching the target level of 0.6755 on the daily chart. Breaking the support opens the 0.6685 target. The general trend is down in the medium term, as the price develops below the indicator lines. The Marlin Oscillator is going down in the negative area. The price is also declining below both indicator lines on a four-hour scale. The Marlin Oscillator is developing in its lower half – in the downward trend territory. We are waiting for further weakening of the Australian currency.     Relevance up to 05:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320619
The Collapse Of The Silicon Valley Bank Weakened The Dollar And USD/JPY But Supported EUR/USD, AUD/USD, And GBP/USD

FX: NFP Is Expected To Hit 250K. This Number Can Ensure Us Of 75bp Fed's Move. Keep An Eye On USD/JPY...

ING Economics ING Economics 02.09.2022 09:28
The sell-off in bonds has continued to offer support to the dollar, with DXY touching 110.00 yesterday. Today, we think that a decent US jobs report (we expect 250k) might be enough to cement 75bp September hike expectations and keep the bullish sentiment on the dollar alive. USD/JPY acceleration above 140 may revamp risk of FX interventions Will today's US jobs data be enough to trigger another bullish dollar reaction? USD: Decent payrolls may be enough to keep supporting the dollar The ongoing major bond sell-off continues to have a net-positive effect on the dollar, and DXY briefly traded at 110.00 yesterday after another drop in all G10 currencies against the greenback. All considerations on whether the dollar rally is truly overstretched and bound for correction will likely have to wait for today’s jobs numbers out of the US. This is because the current market pricing for the Fed rate path still leaves some room for hawkish re-pricing. A 75bp rate hike in September is not fully in the price (currently 68bp), and despite the recent flattening in the rate expectations curve, further evidence of tightness in the jobs market can encourage speculation about a 4.0%+ peak rate and/or prompt the residual rate cuts (worth around 35bp) for 2023 to be priced out. The question now is whether jobs data will be enough to trigger another bullish dollar reaction. Our US economist expects a 250k headline read today: a widely expected slowdown from July’s 528k surprise, but with the unemployment rate staying at 3.5%, no slowdown in wage growth and the lack of qualified staff still being the main hindrance to job growth, the overall message for investors may still be broadly encouraging. We suspect that the actual consensus is lower than the 300k indicated by major data providers, as the ADP numbers released earlier this week likely triggered revisions lower in market expectations. Our suspicion here is that the market may not really need a big surprise to fully price in a 75bp hike in September, and a respectable jobs report may be enough to trigger another leg higher in the dollar today. A break above 110.00 in DXY may unlock further upside for the dollar. Francesco Pesole EUR: Ready to re-test 0.9900 The main data release to watch today in the eurozone is PPI figures for July, which should mark a clear acceleration although will likely have limited market implications. EUR/USD has recovered a bit of ground in overnight trading, likely on the back of the news that Russia should resume gas flows through the Nord Stream pipeline at 20% of capacity on Saturday. It is, however, a quite limited positive reaction by the euro, which likely denotes how markets remain very cautious to price out the risks of a complete cutoff in gas supplies in the coming months.   As per the USD section below, we see the potential for another round of dollar appreciation today after the NFP, which may force a re-test of 0.9900 in EUR/USD before markets close for the weekend. Francesco Pesole JPY: Getting too weak for comfort? USD/JPY pushed above 140 yesterday without much fanfare. Shorter-dated implied option volatilities were still around the 12% area (versus 15%+ a few months ago) suggesting investors have downscaled fears over possible Japanese FX intervention to sell USD/JPY. While we all acknowledge that Japanese authorities would be trying to turn back the tide here (USD/JPY is above 140 for good macro reasons) we should not discount intervention completely. The last time USD/JPY was above 140 in the late 1990s, the Japanese were intervening. Any sharp near-term move to the 142/143 would probably spark a much sharper verbal protest from Japanese authorities and put intervention back on the agenda. Chris Turner CEE: US dollar strikes back Friday's calendar in the region is empty and CEE FX should absorb yesterday's drop in EUR/USD. Additionally, today's US payrolls could come into play and potentially trigger this week's gains correction. As we mentioned yesterday, we see the gains of recent days as overdone, leaving the region vulnerable to global news flow. We see the Hungarian forint as the most vulnerable at the moment, benefiting from Tuesday's National Bank of Hungary decision and headlines from the negotiations between the government and the European Commission. However, the gains are mainly driven by positive sentiment and are not underpinned by rising interest rate differentials. At the same time, the forint remains heavily dependent on gas price movements, further complicating the current situation. The same story applies to a lesser extent to the Polish zloty, but it may benefit from Wednesday's market rate hike following surprisingly high inflation. We also see weaker values for the Czech koruna, which is below the Czech National Bank intervention level of 24.60-24.70 EUR/CZK this week. The daily central bank balance sheet data suggests that the CNB basically did not need to intervene the previous week, and the last few days do not suggest central bank activity either. However, if EUR/USD continues to move lower, the CNB can be expected to return to the market. Frantisek Taborsky Read this article on THINK TagsYen Jobs FX Daily FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

How U.S. Unemployment Data Will Affect The Dollar And The GBP/USD Pair?

InstaForex Analysis InstaForex Analysis 02.09.2022 09:39
Yesterday, the British pound closed down 75 points. The lower shadow of the daily candle has broken through the target level of 1.1525. Consolidation below the level will open the next target – 1.1385. The Marlin Oscillator is close to the oversold zone, but still has room for decline. The price is consolidating above the support at 1.1525 on the four-hour chart, the decrease is taking place exactly, under the balance and MACD indicator lines. The Marlin Oscillator is declining in waves in downward trend territory. We are waiting for further development of the downward local trend. The US employment data for August is due out tonight, including nonfarm payrolls and the overall unemployment rate. The forecast for Nonfarm payrolls is 295-300,000, the unemployment rate is expected to remain unchanged at 3.5%. But the business media is raising fears about the data setback, as ADP Private Sector Employment Data came in at just 132,000 on Wednesday, versus an expectation of 300,000. And here we note two things: ADP Non-Farm Employment Change expectations were clearly too high, and , the second point is that ADP changed the data collection and analysis model in August, which led to a "weak" indicator. The most accurate predictive indicator of Nonfarm payrolls is still not ADP Non-Farm, but weekly claims for unemployment benefits - Unemployment Claims. And this indicator shows a decline from month to month; Thus, the sum of the latest applications for four weeks amounted to 987,000, and for the other previous four months in June and August - 1,011,000. At the same time, the employment index in the manufacturing sector (ISM Manufacturing PMI sub-index) showed an increase from 49.9 to 54, 2, and the ISM Manufacturing PMI itself for August remained at the previous 52.8 against expectations of a fall to 52.0. Thus, general market expectations for today's weak employment data in light of the looming global recession are likely to be disappointing. We are waiting for strong non-farms and the strengthening of the US dollar.       Relevance up to 05:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320621
FX Daily: Testing the easing pushback

How The EUR/USD Pair May Look Like Today? Will Go Up?

InstaForex Analysis InstaForex Analysis 02.09.2022 09:46
The almost weekly growth of the euro against other major currencies was not in vain for it - yesterday's fall was 108 points (the market leader), the price attacked the target support of 0.9950, behind which is the target of 0.9850. On the daily chart, the signal line of the Marlin Oscillator has stopped at the line forming the convergence. The synchronous transition of this line by the oscillator and the price breaking through the support of 0.9950 will create another downward momentum for the euro. Probably, the 0.9752 target will be reached. On the H4 chart, the Marlin Oscillator moved into negative territory and managed to gain a foothold in it. The price attempted a short-term consolidation under the MACD indicator line, but the first attempt failed. Now we are waiting for the second such attempt and the advance towards the first target support at 0.9850.     Relevance up to 05:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320623
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

Problems Of The Euro. Will The ECB Rates Rise And How Much?

InstaForex Analysis InstaForex Analysis 02.09.2022 10:01
The dollar starts September with a combative mood, trading near 20-year highs and benefiting from flows to safe havens. Fears for the fate of the global economy and the drumbeat of leading central banks are rattling traders' nerves. The greenback is also popular with investors, as they need to buy USD to maintain their margin positions in the face of declining stock indices. Players' nervousness is compounded by the fact that stocks are entering a historically weak period for the market. Since 1950, the S&P 500 has fallen by an average of 0.5% in September. This year, everything speaks in favor of repeating historical trends. Over the past two months, the volume of a net short position against S&P 500 futures has grown significantly and reached its highest value in two years. The index just ended the month with its fourth consecutive daily decline on Wednesday. Investors are still under the impression after Federal Reserve Chairman Jerome Powell's statement last Friday that the central bank's key rate should be raised to a level that will allow inflation to be controlled, despite the risks of recession. The S&P 500 index since last Thursday, the last day before Powell's speech in Jackson Hole, lost more than 5%. "The market has received a message that the Federal Reserve is going to fight inflation at any cost. We don't think we've seen a bottom this year," strategists at Optimal Capital Advisors said. On Wednesday, the head of the Federal Reserve Bank of Cleveland, Loretta Mester, continued this topic. She said that the US central bank needs to raise the base rate from the current target range of 2.25%-2.5% above 4% by the beginning of next year and leave it at this level for some time to reduce inflation. Against this background, the yield of two-year US Treasury bonds, which changes in accordance with expectations regarding interest rates, reached the highest level since the end of 2007 yesterday, rising above 3.5%. The higher yield of treasuries pushes up the dollar as investors sell debt denominated in other currencies to get a higher premium on US treasuries. "It doesn't look like they can actually offer decent resistance to the dollar, given such a gloomy global outlook," Rabobank strategists said, referring to other major currencies. "If you sell the dollar, what will you buy?" – they said. The greenback has been growing for three consecutive months, while the euro fell by 6.5% over the same period. The greenback's growth against the single currency reflects concerns that a sharp jump in energy prices in the eurozone, caused by the conflict between Russia and Ukraine, will lead to higher inflation and push the European economy into recession. "High inflation and gas supplies are still serious problems in the euro area. We think this will continue to put downward pressure on the single currency," Commonwealth Bank of Australia analysts said. As data released on Wednesday showed, inflation in the eurozone rose to a record high of 9.1% in August. This strengthened the case for further significant rate hikes by the ECB to tame it. "Before the start of the Jackson Hole symposium, the market expected the ECB to raise the rate by 1 bps by the October meeting, and since then these expectations have only increased. However, a rate hike is unlikely to strongly support the euro against the greenback, given that investors are likely to remain focused on the risks of stagflation in the eurozone and given the safe haven function for the dollar," Rabobank analysts said. "We maintain our EUR/USD target at 0.9500 for one month and still expect the widespread strengthening of the US dollar to persist over the next six months or so," they added. Another unexpected rise in inflation increases speculation about a 75 bps ECB rate hike at next week's meeting. However, MUFG Bank economists do not believe that the euro will benefit from this sharp tightening. "Market participants currently estimate a 71 bps rate hike by the ECB policy meeting on September 8, as well as the fact that it will continue to raise rates to 1.50% by the end of the year. Market expectations of a sharper tightening of policy were supported by the hawkish comments of ECB policy makers after Jackson Hole and the recent announcement of another unexpected increase in inflation in the eurozone. However, we are not convinced that a sharp tightening of the ECB's policy will support the steady growth of the euro, as the risks of recession in the eurozone remain elevated," they said. The eurozone, in case of termination of pipeline gas supplies from Russia, may face a recession in the second half of 2022, analysts at Fitch Ratings believe. "The onset of recession in the eurozone is likely in the second half of 2022, and in 2023, Germany and Italy will experience an annual decline in GDP. Economic vulnerability in the event of termination of pipeline gas supplies remains high, despite recent active efforts to diversify import sources, in particular LNG," Fitch said. With the passing of the summer heat, as well as news that European countries are filling their storage facilities at a faster pace than expected, energy prices in the eurozone have decreased from peak values. However, the European economy, and especially Germany, remain vulnerable to the onset of winter if Russia stops supplying gas, given that storage facilities cover only 25-30% of winter consumption. "It is very difficult to predict how the situation with gas will develop in the European Union in winter, since much will depend, among other things, on the weather and the volume of gas coming from alternative sources to Russia," said the deputy head of the Directorate of the European Commission for Energy in the relevant committee of the European Parliament. The European Commission expects gas prices in Europe to remain at an elevated level in the coming winter and fall in 2024-2025. "We expect that prices will remain at an elevated level in the coming winter, they will fall again in 2024-2025. But they are subject to some fluctuations," EC spokesman Tim McPhie said. Gas prices and sentiment in Europe are now undergoing a serious stress test, as the Nord Stream-1 gas pipeline closed on August 31 for maintenance. All this warns against excessive enthusiasm for the recovery of the European currency at this stage, ING strategists note. The EUR/USD pair ended Wednesday's session with an increase of 0.3%, near 1.0057, having reached a weekly high at 1.0080 during yesterday's trading. At the same time, the USD index fell by 0.1% to 108.65 points. The euro was supported by expectations that the ECB will raise the interest rate by 75 basis points next week.Meanwhile, dollar shorts were mainly caused by the rebalancing of portfolios at the end of the month, turning into consolidation. The EUR/USD pair lost its bullish momentum on Thursday and plunged by almost 150 points from Wednesday's closing levels. At the same time, the USD index rose to the highest levels since June 2002, coming close to 110. The Fed's tough stance is still working in favor of the greenback, and the energy crisis in Europe is against the euro, which has not gone away with the correction of gas prices over the past three days. "Even after reaching new records, the dollar has room for further growth, which is facilitated by the prospects of a global recession and, in particular, the energy crisis in Europe," Generali analysts said. Fears related to the global recession were exacerbated by China, which announced that Chengdu, a city with a population of about 21 million people, was put on lockdown due to coronavirus. Reflecting investors' unwillingness to take risks, key Wall Street indexes mostly declined on Thursday. Friday's US employment report for August carries risks for stocks, because if it is strong, it will increase the prospects for further Fed rate hikes. The Fed's determination is beyond doubt, since it once led the movement among major central banks to aggressively tighten monetary policy. As for the ECB, it has yet to prove that it is really ready to act, and not just talk. "The ECB has yet to convince the markets with its comments to prove that it is willing to endure economic pain in order to effectively combat price risks. Only at this point will the euro be able to really benefit from the ECB's monetary policy on a more sustainable basis," noted the strategists of Commerzbank. "In a crisis, the market is likely to sell the euro as an initial reaction due to fears of a recession. The ECB's determination to fight inflation is likely to have a positive impact on the single currency only at a later stage – if at that time the ECB really sticks to its approach. This means that euro bulls will probably have to be patient for some time," they added. "The markets are now putting in quotes an increase in the ECB rate by 167 bps in total by the end of the year. However, the recent narrowing of spreads on two-year swaps between the euro and the dollar may have already ended, and a reversal – if the ECB does not meet the new hawkish expectations embedded in prices – could send EUR/USD to new lows next week," ING analysts said. They predict that the EUR/USD pair will remain under pressure in the range of 0.9900-1.0100.         Relevance up to 22:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320609
Escalating Russia-Ukraine Tensions Amplify Oil Supply Risks: The Commodities Feed

The EUR/USD Pair: The Trend Will Be Bullish Or Bearish?

InstaForex Analysis InstaForex Analysis 02.09.2022 10:11
EUR/USD 5M The EUR/USD pair continued to move in the style already familiar over the past two weeks and the 0.9900-1.0072 channel. Despite the fact that there was a fall of more than 100 points during the day, the pair still remained inside the horizontal channel. Therefore, no new conclusions on the technical picture can be made now. Perhaps the euro will continue to fall (especially if the US statistics are strong), and then the pair will overcome the level of 0.9900. But until this happens, we are stating a fact - a wide flat or "swing" remains. There were only minor reports in the European Union on Thursday. The unemployment rate and the second assessment of the index of business activity in the services sector are not the data that could provoke the euro's collapse. Also not involved in the pair's decline and the ISM business activity index in the US. Thus, the macroeconomic statistics was, in contrast to the previous days of the week, but it had no effect on the course of trading. In regards to Thursday's trading signals, everything was pretty good. First, a buy signal was formed when the price settled above the extreme level of 1.0019. The upward movement did not last long and ended near the Senkou Span B line. The signal cannot be considered false, since the nearest target level was worked out. Managed to earn 7 points. The sell signal also had to be worked out, and it brought good profit to traders, since the pair, after its formation, went down about 110 points, forming another sell signal near the critical line along the way. The pair did not reach the level of 0.9900 by only a dozen points, the deal had to be closed manually in the late afternoon with a profit of at least 90 points. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For most of 2022, they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. The number of long positions for the non-commercial group increased by 11,600, and the number of shorts increased by 12,900 during the reporting week. Accordingly, the net position increased by about 1,300 contracts. After several weeks of weak growth, the decline in this indicator resumed, and the mood of major players remains bearish. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 44,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. Over the past six months or a year, the euro has not been able to show even a tangible correction, not to mention something more. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 2. The euro has nothing to hope for and nowhere to expect help. Overview of the GBP/USD pair. September 2. The pound continues to slide downhill. Forecast and trading signals for GBP/USD on September 2. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair continues to be inside the 0.9900-1.0072 channel on the hourly timeframe. If the bears manage to gain a foothold below it, then it will be possible to count on the resumption of the global downward trend. Otherwise, the "swing" will remain. We highlight the following levels for trading on Friday - 0.9900, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (1.0051) and Kijun-sen (1.0001). There is not a single level below 0.9900, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. There will again not be a single important event in the European Union on September 2, but we have as many as three important reports in the United States. Of course, the NonFarm Payrolls report will be of most interest. We are waiting for the market reaction to it, two other reports (wages and unemployment) are important, but more secondary. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group. Paolo Greco   Relevance up to 02:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320611
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

Interesting The GBP/USD Pair's Movement

InstaForex Analysis InstaForex Analysis 02.09.2022 10:18
GBP/USD 5M The GBP/USD currency pair continued to fall on Thursday, as if there were no other options for movement in principle. However, nothing can be done about this behavior of the market. The descending trend line continues to be relevant, therefore, from a technical point of view, everything is logical: there is a trend, there is a movement corresponding to the trend. The price is already far beyond the latest high at 1.1649, below which is only 1.1411, which is a 37-year low. Therefore, there are very few levels at which one could trade now. The Ichimoku indicator lines are also very far from the price. There were no macroeconomic statistics in the UK not only on Thursday, but throughout the current week. It is hardly worth even paying attention to the index of business activity in the services sector in the second assessment for August. The US ISM Services PMI is more important, but yesterday it stood at 52.8, which is in line with the month of July. As a result, there was no reaction, and the pound has to go down about 100 points in order to update its lows for four decades. In regards to Thursday's trading signals, everything was just utterly impossible - not a single signal was formed. We have already said that there are no levels or lines in the area of the current location of the price, so the signals are simply not due to what to form. Unfortunately, a rather strong movement was missed yesterday. COT report: The latest Commitment of Traders (COT) report on the British pound turned out to be quite interesting. During the week, the non-commercial group opened 14,700 long positions and 9,500 short positions. Thus, the net position of non-commercial traders increased immediately by 5,200. Despite the growth of this indicator for several months now, the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). To be fair, in recent months the net position of the non-commercial group has been constantly growing, but the pound shows only a very weak tendency to rise. And even then, only from time to time. And now its fall has resumed altogether, so the bearish mood of major players may again begin to intensify in the near future. The non-commercial group now has a total of 86,000 short positions and 58,000 long positions open. The difference is no longer as daunting as it was a few months ago, but it's still there. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the "foundation" and geopolitics. If they continue to be as disappointing as they are now, then the pound may still be on the "downward peak" for a long time. We should also remember that the demand for the pound is not the only thing that matters, but also the demand for the dollar, which seems to remain very strong. Therefore, even if the demand for the British currency grows, if the demand for the dollar grows at a higher rate, then the pound will not strengthen. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 2. The euro has nothing to hope for and nowhere to expect help. Overview of the GBP/USD pair. September 2. The pound continues to slide downhill. Forecast and trading signals for EUR/USD on September 2. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair maintains a downward trend on the hourly timeframe thanks to the trend line. The British currency continues to fall and may continue for some time, as the market seems to have forgotten that it can not only press the "sell" button. The market does not need any specific grounds for trading now, and the pound is updating its lows almost every day. We highlight the following important levels for September 2: 1.1411, 1.1649, 1.1874, 1.1974, 1.2007. The Senkou Span B (1.1928) and Kijun-sen (1.1699) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. No interesting events planned in the UK again on Friday. The most important NonFarm Payrolls report will be published in the US, which can provoke a very strong market reaction. Traders will direct their attention on it. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320613
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

Will The EUR/JPY Pair Gain Or Lose Today?

InstaForex Analysis InstaForex Analysis 02.09.2022 10:24
EUR/JPY has gained some ground in the last couple of weeks, but that doesn't change the larger picture, that a corrective decline is unfolding. We have seen wave A/ as a three-wave decline from 144.25 to 133.40. The question now is whether an X-wave is building before a second three-wave decline takes over. If this is the case, then we should see EUR/JPY peak near 142.33 for a new decline towards at least 131.69. The second option is that we see a break above resistance at 142.33 for a full return to test the peak at 144.25 in a flat correction in wave B/, before the final decline in wave C/ takes over for a decline to 132.66 and possibly 131.69. So, no matter which structure wave B/ ends up in, having the end gold will not change and that is more downside is needed to complete wave 2/.     Relevance up to 07:00 2022-09-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291117
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

Will The GBP/JPY Pair Keep The Downward Trend?

InstaForex Analysis InstaForex Analysis 02.09.2022 10:34
  GBP/JPY is locked inside a descending triangle that continues to call for more downside progress towards the 38.2% corrective target at 154.41 and maybe even closer to the 50% corrective target at 150.09, but only time will tell. The descending triangle is coming close to its completion, but we can't exclude a final rally towards 163.25 before it's ready to take on support near 160.00 in full. The pair might break below before the expected decline towards 154.41 and maybe lower.   Relevance up to 07:00 2022-09-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291119
The EUR/AUD Pair May Have The Potential To Continue Its Decline

The EUR Is Downward Trend But What The EUR/USD Pair Looks Like Today ?

InstaForex Analysis InstaForex Analysis 02.09.2022 10:45
Technical Market Outlook: The EUR/USD pair bounce was capped at the 38% Fibonacci retracement level located at the 1.0078 and pushed down by bears. In order to extend the bounce higher, bulls must break through this level and test the 50% Fibonacci retracement located at 1.0133. The momentum is negative again as the market breaks below the parity level again as the main data from the USA are scheduled for release later on in form of the NFP Payrolls for the month of August. The nearest technical support is seen at 0.9955 and 0.9901. Weekly Pivot Points: WR3 - 1.00077 WR2 - 0.99699 WR1 - 0.99503 Weekly Pivot - 0.99321 WS1 - 0.99125 WS2 - 0.98943 WS3 - 0.98565 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue lower towards the level or 0.9900 and below. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue.     Relevance up to 08:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291129
The USD/JPY Price Seems To Be Optimistic

Shocking: USD/JPY Broke 140.00! Nasdaq Decreased, But S&P 500 Gained Yesterday!

ING Economics ING Economics 02.09.2022 10:52
Asian markets in limbo ahead of US jobs report while Asian FX feels the heat from USD strength.  Source: shutterstock Macro outlook Global markets: The slow bleed in US equities continues to show signs of clotting, though there was still a small fall from the NASDAQ yesterday even though the S&P500 managed to eke out a slight (0.3%) gain on the day. Futures markets are not signalling any intent ahead of the September payrolls release later today. Shorter dated US treasuries trod water yesterday. The yield on the 2Y note rose only 0.6bp – essentially flat – though 10Y yields kept pushing higher and added 6.1bp to take them to 3.253%. We still think there is a little more upside to come from these over the coming weeks, but let’s see how payrolls pans out first before we start thinking about direction too seriously. The EUR didn’t manage to buck the rest of the G-10 for long, and it has dropped back below parity against the USD to stand at 0.9948 now. That move has given other G-10 currencies another push lower, with the AUD now at 0.6789 after a weak day yesterday. Cable has dropped through another big figure, and is currently trading at 1.1545, virtually back to Covid-lows. And just as we intimated in yesterday’s note, the JPY did indeed breach 140, and is at 140.07 now. What’s going to stop the USD run? Right now, it’s very hard to come up with a convincing-sounding answer to that. Asian FX had a lousy day yesterday. The KRW was the worst-performing currency, pushing back up through 1350. The THB, PHP and SGD all lost around 0.4-0.5% vs the USD on the day. The latest comments from the Fed’s Bostic, that the Fed still has “work to do” to control inflation, add nothing to the fed/inflation/rates picture. Other regional news that may weigh on markets today includes China’s latest battle to keep Covid under control, involving more lockdowns in Shenzen, Chengdu and Dalian, more US restrictions on technology exports to China, and continued tension across the Straits of Taiwan. G-7 Macro: As mentioned, it is US payrolls Friday today. The median forecast on Bloomberg is for employment growth of just under 300,000 with an unchanged (3.5%) unemployment rate and average hourly earnings growth of 5.3%YoY.  Not much else matters today. Korea: Headline inflation slowed to 5.7% YoY in August (vs 6.3% in July) after six months of accelerating. The figure was also lower than the market consensus of 6.1%. The seasonally adjusted monthly growth rate declined by -0.23% for the first time since October 2020, mainly due to fuel-tax cuts and a drop in gasoline prices. We think inflation has now passed its peak.  But fresh food prices are still expected to rise further in September and manufactured food prices are also scheduled to rise after the Choseok holiday. Also, utility fees - city gas and power – will rise again in October, and some local governments are planning to increase service fees too. Consequently, inflation will likely remain above 5% until the end of the year.  The Bank of Korea (BoK) will take some comfort from today’s data but will continue to stay on a hiking path at least until the end of the year. However, the weaker-than-expected inflation print supports our view that the BoK will end its hiking cycle at 3.0% in November. What to look out for: US non-farm payrolls South Korea CPI inflation (2 September) US non-farm payrolls, durable goods orders and factory orders (2 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

Will The GBP/USD Pair Indicate A Down Trend Or a Reversal Today?

InstaForex Analysis InstaForex Analysis 02.09.2022 10:53
Technical Market Outlook: The GBP/USD pair has made another fresh low at the level of 1.1498 and continues to move away from the trend line resistance. The nearest horizontal technical resistance is seen at the level of 1.1622 and this level is the next target for bulls in a case of a local pull-back. The next target for bears is located at the level of 1.1410 (2020 low). The momentum remains weak and negative on the H4 time frame chart, so the larger time frame trend (daily and weekly) remains down until further notice. Weekly Pivot Points: WR3 - 1.18043 WR2 - 1.17392 WR1 - 1.17002 Weekly Pivot - 1.16741 WS1 - 1.16351 WS2 - 1.16090 WS3 - 1.15439 Trading Outlook: The Cable is way below 100 and 200 DMA , so the bearish domination is clear and there is no indication of down trend termination or reversal. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame chart last week. The next long term target for bears is seen at the level of 1.1410. Please remember: trend is your friend.     Relevance up to 08:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291131
The Upside Of The EUR/USD Pair Remains Limited

Major Players Do Not Want To Let the EUR/USD Pair Go Below Parity

InstaForex Analysis InstaForex Analysis 02.09.2022 11:36
Yesterday, the euro plunged quite significantly, as a result of which several signals were formed to enter the market. Let's take a look at the 5-minute chart and see what happened. A breakthrough and reverse test of 1.0030 from top to bottom led to an excellent entry point for buying the euro in continuation of the bullish scenario, but data on activity in the manufacturing sector of the eurozone countries let us down. As a result, we had to consolidate losses, because after a slight upward jump by 10 points, the pair was under pressure again. It was possible to catch a signal to enter the market in the afternoon after a major sell-off of the euro, which occurred after the release of good statistics on activity in the US manufacturing sector, which, despite the increase in interest rates, continues to show steady growth. A false breakout at 0.9923 gave a buy signal, which could take about 30 points of profit from the market. When to go long on EUR/USD: This morning there is nothing that could lead to a surge in volatility, and most likely the focus will be on the US labor market. The data on the German foreign trade balance and the eurozone producer price index are unlikely to help euro bulls, but in this case it is better that they do not harm them. Of course, the best scenario for buying the euro would be long positions in the new support area of 0.9949, to which the pair may return in case of very disappointing performance in the euro area. Forming a false breakout at the level of 0.9949, which was formed at the end of yesterday, will provide an excellent entry point in anticipation of forming an upward correction with the nearest target of 0.9993, from which one step to the parity controlled by euro bears now. A breakthrough and test to the downside of this range would hit bearish stops and provide an incentive to buy above parity, opening the possibility of a correction to the 1.0034 area, where bears were especially active yesterday. A more distant target will be the resistance at 1.0076, which is the upper boundary of a wider horizontal channel, where I recommend taking profits. If the EUR/USD declines and there are no bulls at 0.9949, then the pair will be under pressure again, as the lower limit of the ascending correctional channel will be broken and the bearish trend will resume. The optimal decision to open long positions in this case would be a false breakout near the low of 0.9905. I advise you to buy EUR/USD immediately on a rebound only from 0.9861, or even lower - around the parity of 0.9831, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears' main task is to protect parity and resistance, which is located a little lower in the 0.9993 area. There are moving averages, while playing on their side. A false breakout at this level after receiving disappointing data on Germany and the eurozone can push the euro down to the 0.9949 area, where, as I said, the lower limit of the upward correctional channel from August 23 passes, which plays a very important role in determining the pair's succeeding direction. Therefore, a breakdown and consolidation below this range with a reverse test from the bottom up creates another sell signal with the removal of bulls' stop orders and a larger drop to the 0.9905 area, where the stop will be temporary. From there, a new annual low of 0.9861 is within easy reach, where I recommend taking profits. A more distant target will be the year's low at 0.9831. If EUR/USD jumps during the European session if we receive strong data, as well as the absence of bears at 0.9993, the situation will not change dramatically, as everyone will be waiting for the release of statistics on the US labor market. It can determine the further short-term direction of the trading instrument. In this case, I advise you to postpone short positions until 1.0034, but only if a false breakout is formed there. You can sell EUR/USD immediately for a rebound from the high of 1.0076, or even higher - from 1.0127, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT) report for August 23 logged a sharp growth in both short and long positions. This indicates a rather high appetite of traders, especially after the update of the euro's parity against the US dollar. Although Federal Reserve Chairman Jerome Powell's speech at Jackson Hole led to a surge in volatility and provided temporary support to the dollar, it is obvious that major players do not want to let the pair go below parity, and each time they become more active on a decline. Powell said that the Fed will continue to fight inflation with all its might and noted the likely continuation of the previous pace of raising interest rates during the September meeting. But the markets were already betting on such changes, and this did not lead to the euro's collapse against the dollar. This week it is necessary to analyze the data on the US labor market, which seriously affects the Fed's plans. A strong labor market will keep inflation high, which will force the central bank to raise interest rates further. The COT report indicated that long non-commercial positions rose by 11,599 to 210,825, while short non-commercial positions jumped by 12,924 to 254,934. At the end of the week, the overall non-commercial net position remained negative and fell to -44,109 against -42,784, which indicates that pressure on the euro remains and further fall of the trading instrument. The weekly closing price decreased and amounted to 0.9978 against 1.0191. Indicator signals: Moving averages Trading is below the 30 and 50-day moving averages, which indicates a possible further fall in the pair. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of a decline, the lower border of the indicator around 0.9915 will act as support. In case of growth, the upper border of the indicator in the area of 1.0005 will act as resistance. Description of indicators: Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 08:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320637
The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

What To Expect From The GBP/USD In Short And Long Positions?

InstaForex Analysis InstaForex Analysis 02.09.2022 11:43
Several market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1595 level in my morning forecast and advised making decisions on entering the market from it. A breakthrough and reverse test from the top down of this range gave a great buy signal, which, unfortunately, did not materialize due to rather weak statistics on activity in the UK manufacturing sector, which continued to decline in August this year. This was enough for the pound to fall to another annual low. In the afternoon, after the breakdown of the next support at 1.1540, a reverse test from the bottom up of this range took place with a sell signal, which resulted in the pound's decline by more than 40 points. When to go long on GBP/USD: Today there is nothing in the UK and it is obvious that the focus will be on data on the US labor market, which, with all the bears' hopes, can push the pound to rise by the end of the week, since whatever indicators come out, they are already taken into account in current quotes. Since the opening of the week, the pound has already lost more than 200 points, and it is unlikely that there will be those who want to continue selling the pair without a more or less upward correction. For this reason, I will bet on forming the lower boundary of the new rising channel around 1.1516 and on protecting this level after the release of US labor market reports. In case GBP/USD falls, forming a false breakout at 1.1516 will lead to the first signal to open long positions in anticipation of a correction to the 1.1562 area, where the moving averages pass, limiting the pair's upward potential. However, trading is now being carried out so close to this indicator, which indicates a clear lack of bearish desire to sell the pound further and an imminent correction. A lot depends on 1.1562, as its breakthrough may pull stop orders from speculative bears. A test of 1.1562 from top to bottom will testify to a return of demand for GBP/USD and creates a buy signal with growth to a more distant level of 1.1604. The farthest target will be the area of 1.1650, where I recommend taking profits. If the GBP/USD falls further and there are no bulls at 1.1516, the pressure on the pair will increase. A breakthrough of this range will lead to the renewal of the next annual low. In this case, I advise you to postpone long positions until the next support at 1.1473, but you can act there only on a false breakout. I recommend opening long positions on GBP/USD immediately for a rebound from 1.1409, or even lower - around 1.1360, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Bears continue to push the pound down, making new daily lows every day, which indicates that they are still in control of the market. The only problem they may have now is the weak statistics on the US labor market, which, despite its strength, may begin to deflate after a series of fairly large interest rate hikes that took place this summer. Therefore, selling on the breakdown of annual lows is a rather risky strategy for today. It is much better to act based on an upward correction. The optimal scenario for selling GBP/USD would be forming a false breakout at the level of 1.1562, which was formed at the end of yesterday. This will make it possible to achieve a new fall and renewal of annual lows around 1.1516. A breakdown and reverse test of this range will give a new entry point for selling with a fall to 1.1473, and a longer target will be the area of 1.1409 – the low of 2020, when the coronavirus pandemic began, where I recommend taking profits. In case GBP/USD grows and there are no bears at 1.1562, there will be ghostly chances for an upward correction, and bulls will have an excellent opportunity to return to 1.1604, where the moving averages play on the bears' side. Only a false breakout there will provide an entry point into short positions based on the pair moving down. If there is no activity there, I advise you to sell GBP/USD immediately for a rebound from 1.1650, counting on the pair's rebound to the downside by 30-35 points within the day. COT report: The Commitment of Traders (COT) report for August 23 logged an increase in both short positions and long positions. And although the latter turned out to be a bit more, these changes did not affect the real current picture. Serious pressure on the pair remains, and recent statements by Federal Reserve Chairman Jerome Powell that the committee will continue to aggressively raise interest rates further have only increased pressure on the British pound, which has been experiencing quite a lot of problems lately. Expected high inflation and a looming cost-of-living crisis in the UK does not give traders room to take long positions, as a fairly large range of weak fundamentals is expected ahead, likely to push the pound even further below the levels at which it is currently trading. This week, it is important to pay attention to data on the US labor market, which, among other things, determine the Fed's decision on monetary policy. Continued resilience with low unemployment will lead to higher inflationary pressures going forward, forcing the Fed to further raise interest rates, putting pressure on risky assets, including the British pound. The latest COT report indicated that long non-commercial positions rose 14,699 to 58,783, while short non-commercial positions rose 9,556 to 86,749, leading to a slight rise in the negative non-commercial net position to -27,966 against - 33,109. The weekly closing price fell off from 1.1822 against 1.2096. Indicator signals: Trading is below the 30 and 50-day moving averages, which indicates the pair's succeeding decline. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair falls, the lower border of the indicator around 1.1516 will act as support. In case of growth, the upper border of the indicator around 1.1562 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.       Relevance up to 08:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320639
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

The Dollar Is At Highs And The Euro Is Retreating

InstaForex Analysis InstaForex Analysis 02.09.2022 11:51
The US currency is closing the week strongly higher, having confirmed its leading position once again. Its European rival is rapidly losing ground. According to analysts, EUR/USD will be retesting the parity level from time to time, which is not good for the euro. The greenback, which has reached its peak in the past 20 years, started its rally late on Thursday, September 1. On the first day of autumn, the US dollar posted the third week of continuous gains. So, on Friday, it recorded the highest value in the past two decades trading against the euro and the yen. The US dollar hit 20-year highs following the release of the manufacturing index in the US. The data showed that the ISM Manufacturing PMI stayed at the same level of 52.8 in August. Some analysts expected a drop to 52 points. Yet, as the data shows, activity in the US manufacturing sector has notably increased. The indicator has been showing strength for a long time already. In this light, the European currency is noticeably retreating against its American counterpart. The euro opened this week below the parity level but managed to win back some losses later on. In the middle of the trading week, EUR/USD recovered to 1.0078 amid lower gas and oil prices and hawkish comments from the ECB. For your reference, the euro first tested the party level in early July and then slumped to the critical level of 0.9903. The situation only worsened as EUR was struggling to leave the parity level and withstand the downward pressure. On Friday morning, September 2, the EUR/USD pair was trading near 0.9970. There is a possibility that the pair may slightly advance to 0.9980. Its breakout will open the way for sellers towards the area of 0.9800–0.9820. Monetary policy tightening of the US Federal Reserve provides significant support to the greenback. The dollar is getting stronger as the Fed's September meeting is approaching. At the same time, the European currency is in a much less favorable position as it is pressured by a protracted energy crisis in Europe. Market participants expect the Fed to maintain its tight monetary policy as this measure is necessary to tackle accelerated inflation. The rate is projected to increase by 75 basis points to 3-3.25%. On Friday, the employment data in the US will be released. Estimates suggest that the unemployment rate in August stayed close to 3.5% recorded in July. The nonfarm payroll employment has increased by 300K. The Federal Reserve will consider this data to evaluate the state of the labor market and make a decision on the key rate. Experts assume that strong macroeconomic data will greenlight the rate hike through 2023. Markets are sure that the Fed will raise the rate for the third time in September by 75 basis points. For a different scenario, the Fed will need to see a deep decline in the labor market. Yet, there are currently no signs that it is cooling down. This summer, the US economy performed relatively well despite the threat of a recession. However, analysts at Danske Bank are skeptical about the current policy of the Fed. They point out that headline inflation in the country has reached its peak while the labor market and inflationary pressure remain strong. This makes it harder for the regulator to avoid recession as this is where the US economy is headed in 2023, Danske Bank concludes.     Relevance up to 08:00 2022-09-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320649
The EUR/USD Pair Showed Local Speculative Interest In Short Positions Yesterday

The EUR/USD Pair Showed Local Speculative Interest In Short Positions Yesterday

InstaForex Analysis InstaForex Analysis 02.09.2022 11:58
Yesterday, the single currency showed a rather impressive decline, falling below parity again. And it started during the European trading session, under the influence of the actual European macroeconomic statistics. In particular, the final data on the index of business activity in the manufacturing sector turned out to be worse than the preliminary estimate, and fell from 49.8 points to 49.6 points. While the preliminary estimate showed a decrease to 49.7 points. In addition, the data on unemployment also turned out to be not the best, although formally, it fell from 6.7% to 6.6%. But in fact, it remained unchanged, as the previous data were revised upwards. Unemployment rate (Europe): But in the United States, the final data on the index of business activity in the manufacturing sector turned out to be better than the preliminary estimate, which showed a decrease from 52.2 points to 51.3 points. In fact, it dropped to 51.5 points. However, the strengthening of the dollar is still somewhat surprising, as the data on applications for unemployment benefits do not inspire optimism. Of course, the number of initial requests decreased by 5,000. But the number of repeated requests increased by 26,000. And this is quite a lot. Number of retries for unemployment benefits (United States): It is possible that the dollar's growth is purely speculative in anticipation of today's release of the report of the United States Department of Labor. And while the unemployment rate is projected to remain unchanged, data on employment change clearly indicate a high potential for its growth. In addition, 310,000 new jobs should be created outside of agriculture, against 528,000 in the previous month. Such a strong decline in the rate of job creation clearly hints that the US labor market is losing momentum, and the situation is starting to worsen, which will be the reason for a sharp weakening of the dollar. Number of new non-agricultural jobs (United States): The EURUSD currency pair showed local speculative interest in short positions yesterday. As a result, the quote fell below the parity level, having almost reached the lower boundary of the sideways range of 0.9900/1.0050. The technical instrument RSI H4 crossed the middle line 50 from top to bottom during the downward momentum. As a result, the indicator settled in the lower area of 30/50, which indicates the downward mood of market participants. It should be noted that the signals from RSI H4 are of a variable nature due to the fact that the quote, as before, is moving within the sideways formation. MA moving lines on Alligator H4 have many intersections, which corresponds to the flat stage. Alligator D1 is directed to the downside, there is no intersection between the MA lines. This signal from the indicator corresponds to the direction of the main trend. In this case, the strengthening of the downward signal will occur at the moment when the MA (D1) lines are kept below the parity level. Expectations and prospects The convergence of the price with the lower limit of the flat 0.9900 led to an increase in the volume of long positions, as a result, a rebound appeared on the market. Despite the variable speculative interest, the quote is still in the sideways on the basis of a downward trend. Thus, the work can be built on the basis of two tactics: Rebound or breakdown relative to one or another control border. Concretize the above The bounce tactic is seen by traders as a temporary strategy. The breakout tactic is considered the main strategy because it can indicate the subsequent price move. Complex indicator analysis in the short-term and intraday periods have a variable signal due to the current flat. At this time, the indicators indicate a long position due to the price rebound from the lower border of the flat. Indicators in the medium term are focused on a downward trend.     Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320635
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

Bank Of Canada Is Expected To Hike By 75bp, What Could Possibly Help Canadian Dollar (CAD). Fed And BoC Have Been Hiking Parallelly For A Quite Long Time

ING Economics ING Economics 02.09.2022 12:28
While there are signs that activity may be slowing and inflation is peaking, there is a long way to go before inflation gets close to target. With excess demand still a clear concern for the Bank of Canada (BoC), we expect a 75bp hike. A hawkish BoC should ultimately help a CAD recovery, but that should take time to materialise The Bank of Canada hiked rates by 100bp in July with more expected by year-end Mixed data, but inflation backdrop suggests more tightening The Bank of Canada surprised markets with a 100bp rate hike at the July policy meeting as it sought to “front load the path to higher interest rates”. It suggested that "interest rates will need to rise further" with the central bank "resolute in its commitment to price stability". Since 13 July, the data has been a little mixed. Second-quarter GDP came in below expectations at 3.3%, but consumer spending rose 6.9% annualised with non-residential investment up 13.9%. It was a 30.5% surge in imports and a 27.6% drop in residential investment that held back growth. The residential story is obviously a worry while the fact employment has fallen for two consecutive quarters is also a slight concern. However, we see the loss of jobs as a temporary blip and the strength in domestic demand still points to an upward trend in employment activity. Moreover, the BoC will be concentrating on the strength in consumer demand and the fact inflation remains way above target at 7.6% with core inflation above 5%. Remember that the BoC suggested the economy is experiencing excess demand and has repeatedly warned that elevated inflation expectations heighten the risk that “inflation becomes entrenched in price and wage-setting. If that occurs, the economic cost of restoring price stability will be higher”. Given this situation, we expect the Bank of Canada to opt for a 75bp interest rate hike next Wednesday. This would leave the policy rate at 3.25%, which is above the “neutral rate”, assumed to be 2-3% by the Bank of Canada. We don’t think it will stop there given a desire to make positive restrictions to ensure inflation gets back to target. We expect a further 75bp of hikes by year-end. The Fed and BoC have historically moved in tandem Source: Refinitiv, ING FX: Good news for CAD, but more time is needed to recover The OIS market shows that a 75bp hike in September by the BoC is fully priced in, which suggests CAD should not directly benefit from the move on the day of the announcement. The market reaction will instead depend on forward-looking language by the BoC. Market pricing currently implies 50bp of extra tightening by year-end, which is below our expectations for 75bp. Furthermore, a Fed-style protest against any rate cut expectations for 2023 cannot be excluded and would have positive implications for CAD. In other words, there is decent potential for a repricing higher in BoC rate expectations. We do see a hawkish 75bp hike supporting CAD on the day of the announcement, but most of the benefits of the BoC tightening for the loonie may take time to emerge, and would likely rely on stabilisation in global risk sentiment and some easing in USD strength. This could start to happen towards the end of the year, and still, high energy prices do suggest that a move to 1.25 in early 2023 is a tangible possibility. Read this article on THINK TagsCanada Bank of Canada Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
How Far Can USDJPY Go?

How Far Can USDJPY Go?

Jing Ren Jing Ren 02.09.2022 12:24
The yen has weakened to the lowest level since 1998, with the USDJPY popping above the 140 handle. Through the week, the pair rose 1,9%. In a period of economic uncertainty, usually traders would expect the yen to get stronger on safe-haven flows. Is the yen no longer a safe haven? There's more to the picture. And that could help us understand if there is a correction coming or the trend will continue. The driving forces In the short term, the dollar has gotten stronger ahead of NFP data. This is because traders are banking on the employment data to be strong, well above the "normal" 200K rate seen before the pandemic. With fast growth in jobs, the Fed would have free reign to keep hiking, pushing yields even higher. So, from that we can see a potential source of a correction in the near term: if NFP figures disappoint. After the blow-out figure from last month, investors might be a little overly optimistic about a beat in jobs creation, which means even if the figures come in as expected, it could disappoint the more speculative traders. The bigger picture The short term dynamics are an example of the effects of the long-term situation. The major deviation between the two premier safe haven currencies is, broadly speaking, a difference in monetary policy. The US is facing high inflation, prompting the Fed to raise rates. Japan has relatively low inflation (even though it has poked above target recently), and rates have remained negative. With the Fed pursuing an aggressive hiking policy, the yield spread has widened, making it attractive for carry trading against the yen. The potential for a reversal is that Japan starts experiencing inflation and forces the BOJ to start easing. The weaker yen translates into higher import prices, which in turn implies inflationary pressures. However, the global slowdown could also be translating into lower retail sales in Japan, which in turn minimizes the inflationary pressure. As a result, the BOJ can remain apart from the other central banks desperately fighting inflation, and instead work on promoting economic growth. It's all about the expectations A lingering question might be: Sure, the Fed is raising rates, but inflation is much higher than interest. Doesn't that mean a real negative rate? Yes, it does. However, the inflation that we're seeing now is in the past. It's comparing prices now to prices a year ago. What matters for investors is how much inflation is expected over the next period. Fed tightening implies that inflation should get under control, meaning that holders of US bonds will get the benefit of higher interest rates and lower inflation. Meaning that forward yield expectations are still positive - or, at least, better than what traders might expect to get from yen bonds. While the BOJ is on an accommodative track, inflation would have to increase substantially before rates rise. Meaning there is more inflationary risk in a Japan that isn't actively fighting inflation, than in a US that is actively trying to get prices down. It isn't that the yen isn't a safe haven, it's that the US has moved more into offering a better rate of return on fixed income.
The EUR/AUD Pair May Have The Potential To Continue Its Decline

How Can Beginner Investors Interpret The EUR/USD Pair Today?

InstaForex Analysis InstaForex Analysis 02.09.2022 12:38
Analysis of transactions in the EUR / USD pair Euro tested 1.0026 at the time when the MACD was just starting to move above zero, which was a good signal to buy. It led to a price increase of around 15 pips, after which pressure returned mainly because of weak statistics on the Euro area. Sometime later, the pair tested 1.0005, but this time the MACD line was far below zero, which should have limited the downward potential. Surprisingly, the quote continued to move down, and long positions from 0.9959 brought losses. Euro fell yesterday because of the disappointing data on the volume of retail trade in Germany and index of business activity in the manufacturing sector of Germany and the whole Euro area. Similar index from the US also led to its decline as the better-than-expected figure strengthened the positions of euro sellers and dollar buyers. This led to the fall of EUR/USD to yearly lows Data on the foreign trade balance of Germany and producer price index of the eurozone are scheduled to be released today, but they are of little interest to the market. That is why the focus will shift in the afternoon, after the release of reports on the unemployment rate, change in the number of people employed in the non-farm sector, change in the average hourly wage and share of the economically active population in the US. All of these are likely to lead to a surge in volatility as their numbers are expected to be much better than the forecasts. This will prompt another decrease in EUR/USD. The opposite scenario will start an upward correction. For long positions: Buy euro when the quote reaches 0.9978 (green line on the chart) and take profit at the price of 1.0119. A rally will occur only if statistics in the US come out lower than the forecasts. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9959, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9978 and 1.0019. For short positions: Sell euro when the quote reaches 0.9959 (red line on the chart) and take profit at the price of 0.9919. Pressure will return if statistics in the US exceed expectations. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 0.9978, but the MACD line should be in the overbought area, as only by that will the market reverse to 0.9959 and 0.9919. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.     Relevance up to 08:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320645
Analysis Of The EUR/JPY Pair Movement

The USD/JPY Pair Upwards And Potential For Continued Growth

InstaForex Analysis InstaForex Analysis 02.09.2022 13:00
Technical analysis: USD/JPY has been trading upside as I expected. The price reached my first upside objective at 140.45 and there is possibility to test second upside objective. Trading recommendation: Due to the strong upside momentum and upside trend, I see potential for further growth. Watch for potential buying opportunities on the intraday dips with the upside objective at the price of 146.00. MACD oscillator is showing strong upside reading with no signs for the reversal. Key support is set at the price of 138.20     Relevance up to 10:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291179
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The United States And The United Kingdom Are In Different Positions

InstaForex Analysis InstaForex Analysis 02.09.2022 13:15
Despite being oversold, GBP broke through 1.1530 on Thursday. The currency is likely to remain bearish although it is now retracing up. Meanwhile, USD could strengthen against the basket of major currencies should the jobs market report for August come in strong. Yesterday, GBP/USD fell below 1.1580, briefly touched 1.1499, rebounded, and consolidated at 1.1530. In the upcoming days, the pound is expected to fall below 1.1500 due to being oversold. Support is seen at 1.1460. The price is unlikely to show strong growth. However, should bulls gain control over the market and hit 1.1605, the pound could stabilize for a while. In the long term, GBP/USD is projected to remain bearish as well. A gloomy forecast has recently come from Capital Economics.In the coming months and next year, the pound is likely to hit its lowest level versus the greenback. Meanwhile, the euro is expected to show a modest fall. If the British economy contracts by 1% and inflation is at a record rate, the Bank of England will hardly provide any support, so the pound will probably extend the downtrend. We see GBP down by 5% by the end of 2022, experts at Capital Economics wrote. The current steep drop in the pound is due to the stronger US dollar. Still, there is also an internal factor, the sterling is weaker against other currencies, including the euro, being under pressure from sales. The United States and the United Kingdom are in completely different positions. The UK has already slipped into a recession, while the US has a chance to avoid it. The recent spike in UK wholesale gas prices indicates that the country is now dealing with a deep and prolonged recession. The greenback is also strong due to decreased risk appetite as investors fear a global economic downturn. It is commonly known that the greenback gains and the pound suffers losses during turmoil. The pound is acting more like a risk asset due to a massive current account deficit in the UK. The Bank of England's stance on interest rates is also weighing on the pound. The regulator can't afford to act even more aggressively. So, the pound is likely to lose even more. The Bank of England is planning a 50 basis-point rate hike, but markets hope for a bigger increase. They anticipate the Bank of England to be more decisive that any other central bank due to record inflation in the country. In order to raise interest rates by 180 basis points by the end of the year, the regulator should make at least one 75 basis-point move. However, there have been no signs of such a likelihood so far. In light of the continuing downtrend, the forex market seems to have long realized that the Bank of England will not live up to these expectations. According to Capital Economics, interest rates will be raised at a slower pace than investors hope. Meanwhile, the ECB's and the Fed's actions will satisfy market expectations. GBP/USD is seen falling to the all-time low of 1.0500 by the middle of 2023. EUR/USD could sink as low as 0.9000 by that time, Capital Economics said. Meanwhile, EUR/GBP could reach 1.1700.   Relevance up to 10:00 2022-09-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320671
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

The Euro Is Under Pressure. Will It Able To Rebounds?

Kenny Fisher Kenny Fisher 02.09.2022 14:02
The euro is in positive territory today after taking a nasty spill on Thursday. In the European session, EUR/USD is trading at 0.9984, up 0.40%. Euro slides as risk appetite slides Thursday was a day to file away and move on for the euro, as EUR/USD tumbled 1.07%. The euro is under pressure from a high-flying US dollar and is having trouble staying above the symbolic parity line. A combination of solid US numbers, weak eurozone data and lower risk sentiment sent the euro sharply lower. German Manufacturing PMI dipped to 49.1, down from 49.3 in July. This marked a second straight contraction, and was the lowest level since May 2020, at the start of the Covid pandemic. It was a similar story for the eurozone Manufacturing PMI, which dropped from 49.8 to 49.6, a 26-month low. The manufacturing sector continues to struggle with supply chain disruptions and a shortage of workers, and high inflation and an uncertain economic outlook are only exacerbating matters. In the US, the ISM Manufacturing PMI held steady at 52.8, showing modest expansion. The labour market remains strong, with initial jobless claims dropping to 232 thousand, down from 237 thousand a week earlier and much better than the consensus of 248 thousand. Adding to the euro’s woes is the uncertainty over European energy supplies from Russia. Russia has shut down Nord Stream 1 pipeline for three days for maintenance, but Germany has charged that the shutdown is politically motivated and that the pipeline is “fully operational”. Nord Stream is supposed to come back online on Saturday. Even if Moscow does restore service, this episode is a reminder of Europe’s energy dependence on an unreliable Russia. Germany has greatly reduced its dependence on Russian gas, from 55% in February to just 26%, but a cutoff from Moscow would result in a shortage this winter. The week wraps up with the August nonfarm payrolls report. The consensus is for a strong gain of 300 thousand, after the unexpected massive gain of 528 thousand in July. The report could well be a market-mover for the US dollar. The markets are finally listening to the Fed’s hawkish message, and a strong reading will raise expectations of a 0.75% hike in September and likely push the dollar higher. Conversely, a weak report would complicate the Fed’s plans and raise the likelihood of a 0.50% hike, which could result in the dollar losing ground after the NFP release. . EUR/USD Technical EUR/USD is testing resistance at 0.9985. Above, there is resistance at 1.0068 There is support at 0.9880 and 0.9797 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Further Downside Of The AUD/JPY Cross Pair Is Expected

Does The Sensitive Australian Dollar Stand A Chance Of Stabilizing?

Kenny Fisher Kenny Fisher 02.09.2022 14:13
After three straight losing sessions, the Australian dollar is in positive territory today. In the European session, AUD/USD is trading at 0.6802, up 0.21%. It has been a rough stretch for the Australian dollar, which fell 2.89% in August. On Thursday, AUD/USD fell as low as 0.6771, its lowest level since July 15th. The Australian dollar is sensitive to risk and the black clouds hovering over Europe have sapped risk appetite and are weighing on the Aussie. Russia shuts Nord Stream 1  The war in Ukraine has raised the price of energy and food imports for Australians and caused high inflation. Headline CPI rose to 6.1% in Q2, the highest level since 1990. The potential energy crisis in Europe has badly strained relations between Western Europe and Russia and dampened risk sentiment. Moscow has shut down the Nord Stream 1 pipeline for three days of maintenance, although Germany has charged that this is a pretense and the pipeline is fully operational. If the gas flow is not renewed on Saturday, we could have a full-blown energy crisis come Monday morning. In addition, The Federal Reserve’s hawkish policy, which finally has been internalized by the markets, has boosted the US dollar, which has made broad gains against the major currencies. The RBA has its hands full with rising inflation and a slowing economy. Policy makers are hoping to avoid a recession and guide the economy to a soft landing, but the central bank, like the Fed, has made clear that its paramount goal is to curb inflation and avoid inflation expectations from becoming anchored. The RBA meets on September 6th and the markets have priced in a 0.50% hike, which would be the third consecutive 0.50% increase. All eyes are on the US nonfarm payrolls report, which could result in volatility in the currency markets in the North American session.  The markets are expecting a strong gain of 300 thousand, and a reading around this level would indicate that the labour market remains strong. This could push the US dollar higher, as the Fed is relying on a robust labour market to continue with sharp rate increases. However, a weak NFP report could weigh on the US dollar, as it would force the Fed to consider easing policy, which could mean a 0.50% hike in September rather than a 0.75% increase. . AUD/USD Technical 0.6830 is a weak resistance line, followed by resistance at 0.6919 There is support at 0.6766 and 0.6677 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

European Central Bank Is About To Decide On Interest Rate

InstaForex Analysis InstaForex Analysis 02.09.2022 16:15
The September European Central Bank meeting will be key for interest rates. A 75bp hike would invert the yield curve. After an initial spike, it would send the 10Y Bund through 1%, and the 10Y swap through 1.5% next year. Bringing forward quantitative tightening would send tremors through peripheral bonds Front-loading hikes would invert the yield curve Let us start by stating the obvious, ECB comments have taken a resolutely hawkish turn. Whether it wants to emulate the Fed’s front-loading of hikes, or is simply piggybacking on its credibility, officials made the market’s base case a 75bp hike at this, or the next, meeting, with a preference for September. If markets are right in thinking that the hawks have won the front-loading argument, then the next logical step will be for the curve to price qin another 75bp hike in October. As the Fed’s experience has shown, it is difficult to hike by 75bp to then revert to smaller increments. The EUR curve will keep flattening, and indeed invert This is a very different course of events than the one predicted by our economics team. The key blind spot in the above reasoning is, of course, the recessionary wave about to crash onto Europe’s shore. In our view, it will be difficult for the ECB to keep hiking rates in the middle of a recession. Even if the word has recently entered central bankers’ vocabulary, we think they are guilty of an excess of growth optimism. In short, “it is one thing to hike into a recession, it is a different thing to hike in the middle of one”. This, however, may not be immediately obvious to market participants. If the ECB persists in its rose-tinted view of the world, and if EU energy policy delays the date when harsh economic reality hits home, then the EUR curve will keep flattening, and indeed invert. Taking the German 2s10s slope as an example, a dip from 40bp currently to -10bp in the first quarter of 2023 is the logical consequence of a hawkish ECB in the face of a worsening economic outlook. Like its US and UK peers, the German curve will soon invert Source: Refinitiv, ING Upside to rates now, but they will crash down in 2023 This sequencing of events, markets pricing more aggressive ECB hikes and only waking up to a dismal economic outlook later in the winter, also means the upside to Bund yields still remains. This is mostly a near-term view, however. We struggle to see Bund yields remaining at current, or indeed higher, levels in the midst of a recession, and as the ECB will eventually fail to deliver on the hikes priced by the curve. We expect 10Y rates to dip below 1% in the first half of 2023 until the economic gloom is dispelled. This should only be a temporary state of play as the curve will re-steepen with the return of positive growth in 2024. Our view is thefefore for a sharp reversal of government bonds’ fortunes early in 2023. The drop could be even more marked for 10Y swap rates, with a temporary dip through 1.5% at some point next year as our base case. ECB hikes will push rates up, but the recession will bring them down Source: Refinitiv, ING The next worry: quantitative tightening If hawks are to be believed, the debate on quantitative tightening (QT) is also due to start this year, although not necessarily in September. The minutes of the July meeting already featured an oblique reference to balance sheet forward guidance. In addition to the ‘mechanical’ reduction the repayment of targeted longer-term refinancing operations (TLTRO) funds will cause, the ECB has committed to keeping the size of its pandemic emergency purchase programme (PEPP) bond portfolio constant until at least the end of 2024. Like its recent rate hike signals, we believe this guidance to be at risk. The ECB should tread carefully if it wants to avoid yet more widening in sovereign spreads What’s more, an earlier reduction in the size of its asset purchase programme (APP) portfolio is possible. With the exact wording being "an extended period of time past the date when it starts raising the key interest rates", the clock is ticking. Even if it only occurs in 2024, balance sheet reduction will be a sea change in ECB policy. The central bank is still growing its peripheral bond pile thanks to its PEPP reinvestment policy, and a majority of economists expect it to activate its Transmission Protection Instrument (TPI) this or next year, which will result in yet more buying. ECB bond flows are going in the opposite direction in German and Italy Source: Refinitiv, ING   As in any jurisdiction, a reduction of its almost €5tr bond portfolio would add to the policy tightening delivered through rate hikes. The problem in the eurozone is that a shrinking bond portfolio would deliver sharply different degrees of tightening from one member state to the next. This is the very reason why the ECB is currently a net buyer of Italian bonds and a net seller of German ones. An overall reduction of its bonds portfolio is possible but likely at differentiated speeds in our view. The ECB should tread carefully if it wants to avoid yet more widening in sovereign spreads. Read this article on THINK TagsInterest Rates ECB meeting Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Kuroda Stayed On The Sidelines And The Yen Responded With Losses

So After NFP Release, USD/JPY Hasn't Been Changed A Lot

Kenny Fisher Kenny Fisher 02.09.2022 22:01
It has been a week to forget for the Japanese yen, as USD/JPY has climbed 2.23% and has pushed across the symbolic 140 line. In the North American session, USD/JPY is trading at 140.57, up 0.26% on the day. US Nonfarm Payrolls within expectations There was plenty of anticipation ahead of today’s nonfarm payrolls, with a consensus of 300 thousand. A wide miss of this mark could have triggered some sharp movement from the US dollar, as the Fed is relying on a strong labour market in order to continue delivering large rate increases. In the end, nonfarm payrolls was pretty much as expected, with a gain of 315 thousand. The dollar’s reaction has been muted, with USD/JPY posting small gains in the North American session. Dollar/yen punches above 140 The US dollar has flexed its muscles this week and has pushed the ailing yen above the 140 line. With the yen at its lowest level since 1998, speculation has risen that Japanese officials might intervene in order to boost the yen. In truth, the same concerns were aired when dollar/yen broke above 125 and then 130. There is no magic about the 140 level, keeping in mind that the last time Japan intervened to boost the yen was in 1998, during a financial crisis in Asia, when USD/JPY hit 146. In the past, Japan’s Ministry of Finance has warned that it is watching the yen’s depreciation with concern, but the lip service has not translated into any action. The Bank of Japan has zealously defended its yield curve control policy (YCC), which has kept a tight lid on the rates of Japanese government bonds, and the widening US/Japan rate differential has led to a sharp depreciation of the yen. Rather than outright currency intervention, the BoJ could shift its YCC in order to prop up the yen. However, the BoJ hasn’t shown any interest in such a move, as its primary focus has been keeping rates ultra-low in order to boost the fragile economy. Bottom line? The yen has more room to fall, and a forceful response from Tokyo doesn’t appear likely anytime soon. . USD/JPY Technical USD/JPY has support at 140.12 and 138.91 The next resistance line is at 141.84, followed by a monthly resistance line at 144.73 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen edges lower as NFP close to forecast - MarketPulseMarketPulse
German Business Confidence Dips, ECB's Lagarde Hosts Central Banking Conference in Portugal, EUR/USD Drifts Higher

The US NFP (Non-Farm Payrolls) - There Are Two Sides Of The Same Coin

Craig Erlam Craig Erlam 02.09.2022 22:06
Investors appear relatively pleased with the jobs report despite some initial choppy trade following the release. Nonfarm payrolls nudges above forecast The headline NFP figure was a little larger than expected at 315,000 which may have created that initial unease as a knockout report could have effectively paved the way for a 75 basis point rate hike this month. But once you dig a little deeper, there are aspects of the report that will please the Fed and support the case for easing off the brake. While we can’t put too much weight on one report, a surprise spike in participation from 62.1% to 62.4% will undoubtedly be welcomed, lifting unemployment to 3.7% from 3.5% along with it. As will hourly earnings rising by 5.2% against expectations of a small increase to 5.3%. All of this will be a relief to policymakers but I’m not sure it will be enough to change their minds at this point. There’s been such an effort to put 75 basis points on the table in recent weeks, to change their mind on the back of this would seriously undermine their guidance in future. If paired with another decent drop in inflation in a couple of weeks, more may be convinced. We’re seeing some relief in equity markets after what has been a pretty dire week until now. US futures have added half a percent since the release while the dollar and US yields are slightly lower, albeit after some very choppy trade initially. Gold is breathing a huge sigh of relief, up around 0.75% on the day, with $1,680 support potentially safe for now. This is a really significant area of support for the yellow metal and while it didn’t get too close on this occasion, a move below could see gold trading at two-year lows which could be a major blow. Bitcoin is another instrument that is displaying some relief having spent the week desperately defending $20,000 support. The report isn’t enough in itself to overly excite traders, not even the crypto crowd I would have thought, but it could reinforce that support which is important. A break of $20,000 could be painful for bitcoin and today’s data may enable it to hold above here for a while longer yet. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. A welcome US jobs report - MarketPulseMarketPulse
Tokyo Raises Concerns Over Yen's Depreciation, Considers Intervention

US Dollar's (USD) And Stock Market's Reaction To The US Labour Market Data | EUR/USD After The Release

Conotoxia Comments Conotoxia Comments 04.09.2022 20:02
After 2:30 pm, the long-awaited US labor market report came out, showing mixed readings. The market in the first moment seems to have reacted to the publication with a weakening of the dollar and a rise in stock index contracts. Non-farm Payrolls hits 315K The U.S. Labor Department reported that non-farm sectors added 315,000 new jobs in August against a market consensus of 300,000 the smallest increase in new jobs in the U.S. economy since April 2021. The data for July, on the other hand, was revised slightly downward from 528,000 to 526,000. Last month's significant job gains were noted in professional and business services (68,000), which includes computer systems design and related services, healthcare (48,000) and retail trade (44,000). Manufacturing added 22,000 jobs, and leisure and hospitality added 31,000. Unemployment rate reaches 3.7% The BLS report shows that the U.S. unemployment rate rose to 3.7% in August 2022, the highest since February. The market consensus was for an unemployment rate of 3.5%. It seems that it was the rise in the unemployment rate to its highest level since March 2022 that the market may have reacted to. Investors in the interest rate market, according to Bloomberg, reduced bets on a quick interest rate hike by the Fed, which could have been reflected in the dollar, gold, stock indexes or cryptocurrencies. The U.S. labor market saw a slowdown in hourly earnings growth, to 0.3% for the month, from 0.5% in July, which may be the right direction for the Fed, but wages could still grow faster than policymakers would like. Wage growth is still a possible inflationary pressure, hence it seems that the next important publication may be the one on the change in price level, and it will be announced on September 13th. EUR/USD Following the release of the US data, the rate of the main EUR/USD pair seems to have risen above parity. Gold, on the other hand, is trying to turn back from under the $1,700 level to $1,705, and bitcoin is oscillating in the $203 region. ETH, on the other hand, is holding in the region of $1,600 before 15:00 GMT+3. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Source: Mixed labor market data. EUR/USD above parity? (conotoxia.com)
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

Decrease In The New York Stock Exchange. Futures On The USD Index

InstaForex Analysis InstaForex Analysis 05.09.2022 08:22
At the close on the New York Stock Exchange, the Dow Jones fell 1.07% to a one-month low, the S&P 500 fell 1.07%, and the NASDAQ Composite fell 1.31%. Chevron Corp was the top performer among the components of the Dow Jones index today, up 2.31 points or 1.49% to close at 157.85. Salesforce.com Inc rose 0.16 points or 0.10% to close at 153.69. Walgreens Boots Alliance Inc rose 0.01 points or 0.03% to close at 35.27. The losers were 3M Company shares, which lost 3.98 points or 3.17% to end the session at 121.65. Honeywell International Inc. shares rose 2.01% or 3.84 points to close at 186.89, while Procter & Gamble Company shed 1.78% or 2.48 points to close at 137.16. Leading gainers among the S&P 500 index components in today's trading were CF Industries Holdings Inc, which rose 4.34% to hit 106.86, Hess Corporation, which gained 3.83% to close at 120.91, and also shares of The Mosaic Company, which rose 3.79% to end the session at 54.84. The biggest losers were DISH Network Corporation, which shed 4.49% to close at 17.01. Shares of Generac Holdings Inc shed 4.13% to end the session at 223.39. Quotes of Zebra Technologies Corporation decreased in price by 3.92% to 297.60. Leading gainers among the components of the NASDAQ Composite in today's trading were Venus Concept Inc, which rose 54.87% to hit 0.54, Sunrise New Energy Co Ltd, which gained 31.46% to close at 2.80. , as well as shares of Advanced Human Imaging Ltd ADR, which rose 29.90% to close the session at 1.26. The drop leaders were PolyPid, which fell 73.47% to close at 1.43. Shares of Shuttle Pharmaceuticals Inc lost 71.56% to end the session at 14.90. Quotes of ShiftPixy Inc decreased in price by 33.92% to 13.60. On the New York Stock Exchange, the number of securities that fell in price (1,797) exceeded the number of those that closed in positive territory (1,297), while quotes of 136 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,338 companies fell in price, 1,371 rose, and 257 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.35% to 25.47. Gold futures for December delivery added 0.70%, or 12.05, to $1.00 a troy ounce. In other commodities, WTI October futures rose 0.59%, or 0.51, to $87.12 a barrel. Brent oil futures for November delivery rose 1.02%, or 0.94, to $93.30 a barrel. Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.17% to 1.00, while USD/JPY fell 0.02% to hit 140.18. Futures on the USD index fell 0.12% to 109.55.       Relevance up to 04:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/291315
The USD/JPY Price Seems To Be Optimistic

USD/JPY: The Pair Still Has The Strength.

InstaForex Analysis InstaForex Analysis 05.09.2022 08:35
  The dollar continues to grow against the Japanese yen, but the reversal signs of the indicators are already stronger. On the daily chart, this is a reversal of the Marlin Oscillator. The price has not yet reached the target level of 141.00 along the line of the price channel of the higher timeframe. The pair still has the strength to work out this level, after which the price may move into a medium-term correction. The target of the correction may be the area of the embedded line of the price channel at 137.90. Consolidating under the MACD line will complicate the type of the expected correction, perhaps it will be a long flat. The price is growing above the balance and MACD indicator lines on the four-hour scale, the Marlin Oscillator is developing sideways. A small upside potential remains, after it dries up, the price is likely to decline. First target at 139.10.     Relevance up to 04:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320750
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

How Will The GBP/USD Pair Start The New Week?

InstaForex Analysis InstaForex Analysis 05.09.2022 08:40
The pound closed below the target level of 1.1525 on Friday, and today it opened with a falling gap. The 1.1385 target is open, and after closing the gap, we expect the price to drop to the specified target. The second market target may be the 1.1305 level, which is slightly below March 2020. Today, the UK business activity index comes out in the final assessment for August - the forecast is at the level of July at 52.5 points. Composite PMI is also expected to remain unchanged at 50.2 points. The data may contribute to the pound's correction. Additional optimism to the market may be given by good data on retail sales in the euro area - the July forecast is 0.4%. The price is falling below the balance and MACD indicator lines on the four-hour chart, consolidating under the target level of 1.1525. The Marlin oscillator has been moving sideways since August 31, this circumstance allows the price to close the gap during the day. Then we wait for further decline from the price.       Relevance up to 04:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320752
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The GBP/USD Pair Is Currently Bouncing Back?

InstaForex Analysis InstaForex Analysis 05.09.2022 08:50
Early in the European session, the British pound is trading at around 1.1474. It is bouncing after the sharp fall to the low of 23 March at 1.1457. According to the 1-hour chart, we can see that the British pound is trading at around (-1/8 Murray) and below 21 SMA (1.1525). In the chart, we can observe a GAP between the closing price on Friday and the opening price of this week. The British pound is expected to cover this GAP in the next few hours. So, GBP/USD could close at around 1.1510. In case the pound consolidates at around the psychological level of 1.1500, it could reach the 21 SMA located at 1.1525 and could even reach the top of the downtrend channel at around 1.1545. GBP/USD is currently bouncing back after reaching the low of 1.1457. It is likely to continue its rise in the next few hours only if it trades above -1/8 Murray. There is an expectation that the pound can cover the gap and reach 1.1676 (200 EMA). The growing likelihood that the Federal Reserve will continue to tighten its monetary policy makes investors consider the US dollar a safe haven. This is a factor that keeps the GBP/USD pair under strong downward pressure. Investors are pricing in a 0.75% interest rate hike at the next monetary policy meeting in September. This decision will be unveiled on September 21. Analysts expect the sterling to recover part of the losses of last week in the week ahead. The market sentiment report is showing that there are 81.95% of traders who are buying the pair. This is a positive sign for the pound as a technical rebound could occur in the next few hours and then the trading instrument will resume its main downtrend. In case the British pound trades above -1/8 Murray (1.1475) and the 21 SMA located at 1.1525, it could be a positive sign for the pound but we should expect a consolidation above 1.1550. On the other hand, if the British pound resumes its bearish cycle, we could expect a technical bounce around 1.1438 and 1.1417 (weekly support). Our trading plan for the next few hours is to wait for a rebound above 1.1475 to buy with targets at 1.1525 and 1.1676.     Relevance up to 05:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291327
Asia morning bites - 16.05.2023

Forex: It's Hard To Believe! Stock Market Status May Affect USD/JPY!

ING Economics ING Economics 05.09.2022 08:53
With USD/JPY now above 140, we have been asked several times whether the yen has lost its safe haven status. We think two factors are important drivers here: the nature of this year's shock which has seen Japan's trade surplus wiped out, and the extreme juxtaposition of Fed and Bank of Japan policy. Don't bet on a USD/JPY turn this year Yen loses its safe haven shine With USD/JPY trading above 140 and financial assets under pressure, one could think that the yen is losing its status as a safe haven currency. The data support that idea. In 2020, when the world was rocked by the pandemic, USD/JPY had a 0.35 positive correlation with the MSCI World equity benchmark. That meant that when equities fell, the JPY typically outperformed against the dollar – i.e. JPY as a perceived safe haven. This year the USD/JPY correlation with equities is now zero – suggesting the JPY has lost some safe haven properties. Why? I’d say it’s down to two main factors – a) the nature of the crisis and b) the juxtaposition of the US and Japanese macro-financial policies.  On the former, the war in Ukraine has seen energy prices surge. Given that Japan imports all its fossil fuel energy, Japan’s terms of trade have collapsed – that is the price Japan receives for its exports versus what it pays for its imports. That is a large negative income shock. That has been most visible in Japan’s trade account. Last summer Japan was earning JPY6trn a year on trade. Over the last 12 months, that trade surplus has swung to a JPY6trn deficit on higher energy bills. A safe haven currency typically needs to be backed by a strong trade surplus – such that there is a natural demand for a currency in a crisis. The JPY has lost that backing from trade. On the US-Japan story, the US Federal Reserve and the Bank of Japan (BoJ) are just about as far apart as you can get.  The hawkish Fed has raised rates aggressively this year and promises to do more. The BoJ is one of the very few dovish central banks in the work (joined recently by the People's Bank of China). It is still engaging in quantitative easing. In practice, this now means that holding a 3m USD deposit pays 3% per annum. Hold a 3m JPY deposit and you will still be charged 0.10% for the pleasure. This 3%+ spread in rates really raises the bar for the JPY to outperform as a safe haven currency. JPY would rally if equities fell hard enough... Two final points – I suspect that if US equities fell hard enough that the Fed tightening cycle was substantially re-priced lower (and we haven’t seen too much of that this year), the JPY would outperform again and USD/JPY would drop. I also suspect USD/JPY is moving into a zone where Japanese policymakers will show more overt concern – they intervened to sell USD/JPY back at these levels in the late 1990s. But equally, we are a long way from a 1980s Plaza-type accord to weaken the dollar in general. That would require the Fed needing to cut rates (highly unlikely this year) or the BoJ to hike rates (again unlikely). So given the way things are going this year, a move to 150 certainly can’t be ruled out.  USD/JPY and BoJ intervention levels. BoJ sold USD/JPY above 140 in the late 90s Source: Japanese Ministry of Finance, ING Read this article on THINK TagsYen Federal Reseve Dollar Bank of Japan Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/AUD Pair May Have The Potential To Continue Its Decline

What Benefits Can The EUR/USD Pair Bring Today?

InstaForex Analysis InstaForex Analysis 05.09.2022 08:45
US labor data came out good on Friday. In the non-agricultural sector, 315,000 new jobs were created against the forecast of 295-300,000, unemployment increased from 3.5% to 3.7%, but due to a solid increase in the share of the economically active population to 62.4% from the previous 62% one. The average hourly wage for the month increased by 0.3%. The market laid down a 43% chance of a 0.50% Federal Reserve rate hike at the September meeting (against 27.0%) a day earlier. The probability of a rate hike by 0.75% was 57.0%. The S&P 500 was down 1.07%, outperforming other markets in risk aversion. The dollar index fell by 0.05%, the euro closed the day with a rise of 10 points, but as a result of a fall from the peak of the day by 80 points. The US market is closed today for a national holiday. On the daily chart, the price broke below the target level of 0.9950 with a gap, the signal line of the Marlin Oscillator under the turquoise line forming the convergence, in order, according to one of our scenarios, to form a convergence a little lower. The price intends to consolidate under the MACD line (0.9933) on the H4 chart. Formally, the 0.9850 target has already been opened. Further decline to the 0.9752 target is possible. The signal line of the oscillator turned down from the zero line. Due to the gap and a holiday in the US today, the efforts of European players can be directed to closing the window and closing the day under the MACD line (0.9933).       Relevance up to 04:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320754
Market Risk Sentiment Adjusts as Investors Eye US Inflation Data

The Risk Is That Decline Will Take Place On Dow Jones Index

InstaForex Analysis InstaForex Analysis 05.09.2022 08:55
Since 1990, the monthly moving averages for 10 and 30 periods have only crossed down two times. The first time was in 2001 and the second time was in 2008, but it's possible that a third cross lower could be seen later this year or early next year. These cross-overs to the downside are usually followed by quite a significant correction lower and that could easily be the case this time too. Taking into consideration, the overextended rally that was created due to the extreme ease of the money flow that followed the outbreak of COVID-19. Therefore, the risk is that another significant corrective decline will take place later this year or early next year.       Relevance up to 06:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291333
The Markets Still Hope That The Fed May Consider Softer Decision

Would Euro Receive A Tank With Rocket Propeller? What Does ING Economics Expect?

ING Economics ING Economics 05.09.2022 09:12
No more gradual and small steps. The only question for next week’s European Central Bank meeting is whether it will be a 50 or 75 basis point hike   The ECB is another example of a central bank which has been completely overwhelmed by inflation dynamics and a paradigm shift of major central bankers. Remember that it is not too long ago that the ECB ruled out the possibility of even a small rate hike in 2022. Then, there was the gradual and measured approach for rate hikes which was replaced by a surprise 50bp rate hike in July. Now we are at the so-called meeting-by-meeting (MBM and not MiB) approach. This is an approach which clearly makes more sense and should have been introduced much earlier as it would have prevented the ECB from making the described communication mistakes. The MBM approach, however, is also an approach which opens the door widely for speculation and volatility as it makes it harder to read the ECB’s reaction function. Paradigm shift and in search of the ECB's reaction function And exactly this reaction function has changed. It follows a paradigm shift of many central banks as recently witnessed at the Jackson Hole symposium. A paradigm shift that is characterised by central banks trying to break inflation, accepting the potential costs of pushing economies further into recession. This is similar to what we had in the early 1980s. Back then, higher inflation was also mainly a supply-side phenomenon but eventually led to price-wage spirals and central banks had to hike policy rates to double-digit levels in order to bring inflation down. With the current paradigm shift, central banks are trying to get ahead of the curve – at least ahead of the curve of the 1970s and 1980s. Whether the paradigm shift of central bankers is the right one or simply too much of a good thing is a different question. What is striking is the fact that central bankers have implicitly moved away from measuring the impact of their policies by medium-term variables and expectations towards measuring it by current and actual inflation outcomes. This could definitely lead to some overshooting of policy rates and post-policy mistakes. With headline inflation at a new record high... many ECB officials have sounded the alarm bells Back to the ECB. With headline inflation at a new record high and continued passing through of high wholesale energy prices to consumers and corporates in the coming months, many ECB officials have sounded the alarm bells. At Jackson Hole, Isabel Schnabel gave a very hawkish speech, calling for aggressive hiking of interest rates in order to prevent inflation expectations from de-anchoring or a price-wage spiral from kicking in. ‘Caution’, Schnabel said, was the wrong medicine to deal with the current supply shocks. Instead, she called for a ‘forceful’ response even at the risk of lower growth and higher unemployment. Other ECB members followed, calling for a 75bp rate hike next week. Some explicitly argued to bring the policy rate above its neutral level. Only ECB chief economist Philip Lane took a slightly different stance, calling for a gradual approach. Intention of aggressive rate hikes – but will it help? We still find it hard to see how aggressive rate hikes can bring headline inflation down in the eurozone. The economy is far from overheating and will almost inevitably fall into a winter recession, even without further rate hikes. In such a situation, gradual normalisation of monetary policy makes sense, trying to break a supply-side inflation with rate hikes, however, indeed resembles this idea of ‘if you only have a hammer, everything has to be treated as if it was a nail’. Admittedly, the situation is difficult for the ECB: demonstrating its determination to bring down inflation would easily be interpreted as panic. To further identify the ECB’s reaction function, we will have a close eye on the newest staff projections, which will also be released next week. Two things will be of importance: how negative or positive will the ECB be on the eurozone’s growth outlook for the winter and what are the inflation projections for 2024. Remember that in June, the ECB still expected GDP growth to come in at 2.1%, which is far away from our own forecast of -0.6%. As regards 2024 inflation, the June projections had annual inflation at 2.1%. The more downward revisions we will get on both projections, the less likely the suggested aggressive rate hikes will be. Hiking into a recession is not the same as hiking throughout a recession In any case, and even if the ECB doves have been very silent in recent weeks, we expect the ECB to ‘only’ hike by 50bp next week. This would be a compromise, keeping the door open for further rate hikes. 75bp look one bridge too far for the doves but cannot entirely be excluded. Further down the road, we can see the ECB hiking another time at the October meeting but have difficulties seeing the ECB continue hiking when the eurozone economy is hit by a winter recession. Hiking into a recession is one thing, hiking throughout a recession is another thing. Read this article on THINK TagsMonetary policy Inflation GDP Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Upside Of The EUR/USD Pair Remains Limited

Will The EUR/USD Pair Be Bearish Or Bearish Today?

InstaForex Analysis InstaForex Analysis 05.09.2022 09:27
EUR/USD 5M The EUR/USD pair showed multidirectional movements last Friday. If in the first half of the day it grew quite confidently, then in the second half it fell quite significantly. Recall that the pair has been inside the 0.9900-1.0072 horizontal channel for more than two weeks, which is clearly seen in the chart below. Therefore, any movement within the channel can be considered logical. At the moment, the quotes have fallen to the level of 0.9900, which is also logical and expected, since this fall was preceded by a rebound from the level of 1.0072. A large number of important macroeconomic statistics were also published on Friday. The main news of the day was the NonFarm Payrolls report in the US. The number of new jobs created amounted to 315,000 in August, which, in our opinion, is a very good figure and higher than experts' forecasts. Thus, the growth of the US currency does not surprise us. The unemployment rate rose to 3.7%, but traders did not react to it in any way, because unemployment is a less significant report than Nonfarm. As a result, the pair will try to overcome the level of 0.9900 and, if it succeeds, the global downward trend will resume. In regards to Friday's trading signals, everything was quite complicated. All signals formed near the 1.0001-1.0019 area. And there were only two of them, and both were extremely inaccurate. However, the price bounced twice from the indicated area, and traders were able to open a short position twice. They could, but they shouldn't have. The first signal was formed just half an hour before the release of the Nonfarm report, so it was too risky to open a deal. The second signal was formed a few hours before the market closed, so it also needed to be filtered out. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For most of 2022, they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group decreased by 8,500, and the number of shorts decreased by 5,000. Accordingly, the net position decreased by about 3,500 contracts. This is not much, but this is again an increase in the bearish mood among the major players. After several weeks of weak growth, the decline in this indicator resumed. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 47,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. The euro has not been able to show even a tangible correction over the past six months or a year, not to mention something more. We recommend to familiarize yourself with: Forecast and trading signals for GBP/USD on September 5. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair continues to be inside the 0.9900-1.0072 horizontal channel on the hourly timeframe. If the bears manage to settle below it (which may happen today), then it will be possible to count on the resumption of the global downward trend. Otherwise, the swing will remain. We highlight the following levels for trading on Monday - 0.9900, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (1.0051) and Kijun-sen (1.0001). There is not a single level below 0.9900, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union will publish the index of business activity in the service sector for August (final value) and retail sales, and there's nothing in America. Not the most important reports, plus traders are now trading quite actively even without them. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 05:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320756
The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

The GBP/USD: Can We Expect A Further Decline In The Pair?

InstaForex Analysis InstaForex Analysis 05.09.2022 09:33
GBP/USD 5M The GBP/USD currency pair continued its downward movement on Friday as a whole. In the first half of the day, as well as for the euro, an upward correction was observed, and in the second, the fall resumed. The euro has been trading sideways for more than two weeks, while the pound has continued to fall almost precipitously all this time. At the moment, only 65 points remain to go to 37-year lows, and the quotes do not stop falling even at night. On Friday, as we have already said, there were grounds for a new growth of the US currency. The statistics from overseas may not be the best, but what's the difference if the pound continues to fall anyway? During the last week there were quite few reports, but traders still continued to sell the pair! And on Friday, it turns out that traders also had clear reasons for selling the pound. Thus, the lows for almost four decades will be updated this week, and it is rather difficult to even imagine how low the pound may eventually fall. In regards to Friday's trading signals, everything was as simple as possible, since there were none. Despite the fact that the movements were quite volatile, the price never approached any level or line, so no signals were formed. We have already said that the pound is now so low that there are simply no levels in this price area, and the Ichimoku indicator lines are located much above the price and simply do not keep up with it down. Therefore, over time, levels will appear, but so far they are not. COT report: The latest Commitment of Traders (COT) report on the British pound, released yesterday, turned out to be as neutral as possible. During the week, the non-commercial group closed 300 long positions and opened 900 short positions. Thus, the net position of non-commercial traders immediately increased by 1,200. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Therefore, the growth of the British pound still cannot count. How can you count on it if the market sells the pound more than it buys? And now its fall has resumed altogether, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 87,000 shorts and 58,000 longs open. The difference is not as terrifying as it was a few months ago, but it is still noticeable. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the "foundation" and geopolitics. If they remain as weak as they are now, then the pound may still be in a "downward peak" for some time. Also remember that it is not only the demand for the pound that matters, but also the demand for the dollar, which seems to remain very strong. Therefore, even if the demand for the British currency grows, if the demand for the dollar grows at a higher rate, then we will not see the strengthening of the pound. We recommend to familiarize yourself with: Forecast and trading signals for EUR/USD on September 5. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair maintains a downward trend on the hourly timeframe thanks to the trend line. The British currency continues to fall and may continue for some time, as the market seems to have forgotten that you can not only press the sell button. The market does not need any specific grounds for trading now, and the pound is updating its local lows almost every day. We highlight the following important levels on September 5: 1.1411, 1.1649, 1.1874, 1.1974, 1.2007. Senkou Span B (1.1698) and Kijun-sen (1.1609) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. The index of business activity in the services sector in the second assessment for August will be released on Monday in the UK - far from the most significant report in the current circumstances, when the pound is falling every day. Meanwhile, there is nothing interesting planned for today in the US. There will be nothing for traders to react during the day. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 05:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320758
NatWest Group Reports Strong H1 2023 Profits Amid Rising Economic Concerns

Signaling Overheated Bear Market And To Sell A Pound.

InstaForex Analysis InstaForex Analysis 05.09.2022 09:40
Today, markets will take notice of the services PMI data in Europe and the UK although the reports are expected to come in line with the forecast. Meanwhile, the US celebrates a public holiday today. The EU will release the data on retail sales. The indicator may slow down the pace of decline this time. This positive factor may act as support for the European currency. Its positive correlation with the pound sterling may strengthen the latter. After a short-term break, the GBP/USD pair resumed its decline. As a result, the price retested the low of the medium-term trend, missing just a few pips to reach the low of 2020. RSI on H4 and D1 is holding in the oversold zone, signaling the overheated bearish market. The moving averages of the Alligator Indicator on H4 and D1 are pointing down according to the main trend. Outlook: Despite an oversold status of the pound, the downward momentum still persists, and traders seem to ignore the overheated bear market. The low of 2020 at the level of 1.1410 still acts as support for sellers. In this situation, two scenarios are possible: In the first case, the price may rebound from the local low of 2020, thus giving rise to long positions. This, in turn, may slow down the decline of the pair but then a bounce may follow. In the second scenario, traders will simply ignore the technical signals of an oversold status of the pound. If so, consolidation below 1.1400 will extend the long-term downtrend. Comprehensive indicator analysis confirms the downward cycle in all the time periods. So, this is a signal to sell the pound. Read more: https://www.instaforex.eu/forex_analysis/320764 Relevance up to 07:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/320764
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

What To Expect From The GBP/USD Pair In Short Positions And Long Positions?

InstaForex Analysis InstaForex Analysis 05.09.2022 09:50
  Several market entry signals were formed last Friday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1562 level in my morning forecast and advised making decisions on entering the market from it. Growth and forming a false breakout at 1.1562 - all this led to a sell signal, which to a large extent was not realized amid the lack of fundamental statistics on the UK. As a result, the movement amounted to about 15 points, after which the demand for the pound returned. A burst of volatility after a rather mixed report on the US labor market led the pound to move down to the 1.1535 area and a false breakout to form at this level. As a result, a buy signal was formed, and the upward movement was about 50 points. When to go long on GBP/USD: Today there are very important reports on activity in the UK services sector, which accounts for a significant part of the economy. A slowdown in this indicator will lead to a further decline in the pound and, most likely, to an update of the 2020 low, to which there is very little left. The deterioration of the economic and political situation in the UK continues to negatively affect the prospects for the pound, the pressure on which is increasing every day. In the event of a decline in GBP/USD after weak data on the PMI in the services sector and the UK composite PMI index, forming a false breakout at 1.1409 - the low of 2020, will lead to the first signal to open long positions in anticipation of a correction in the 1.1476 area. A breakthrough and test from top to bottom of this range may pull stop orders from speculative bears, which creates a buy signal with growth to a further level of 1.1528, where the moving averages play on the bears' side. The farthest target will be the area of 1.1583, where I recommend taking profits. If the GBP/USD falls further and there are no bulls at 1.1409, the pressure on the pair will increase. A breakthrough of this range will lead to the renewal of the next annual low. In this case, I advise you to postpone long positions until the next support at 1.1358, but you can act there only on a false breakout. I recommend opening long positions on GBP/USD immediately for a rebound from 1.1313, or even lower - around 1.1260, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Bears continue to push the pound down, updating daily lows each time, which indicates that they are in control of the market. It is likely that today's statistics for the UK will help them get to the annual lows. Of course, it would not be a good idea to rush to sell on the breakdown of 1.1409. Where better to act, relying on an upward correction. The optimal scenario for opening short positions on GBP/USD would be forming a false breakout at the level of 1.1476, a breakthrough to which may occur in case we receive good results on the PMI index for the UK services sector, which was in a fairly good state back in July. This will make it possible to achieve a new fall and renewal of annual lows around 1.1409. Only a breakthrough and a reverse test of this range will provide a new entry point for selling with a fall to 1.1358, and the area of 1.1313 will be the next target, where I recommend taking profits. In case GBP/USD grows and there are no bears at 1.1476, there will be ghostly chances for an upward correction, and bulls will have an excellent opportunity to return to 1.1528, where the moving averages play on the bears' side. Only a false breakout there will provide an entry point into short positions based on the pair moving down. If there is no activity there, I advise you to sell GBP/USD immediately for a rebound from 1.1583, counting on the pair's rebound down by 30-35 points within the day. COT report: The Commitment of Traders (COT) report for August 23 logged an increase in both short positions and long positions. And although the latter turned out to be a bit more, these changes did not affect the real current picture. Serious pressure on the pair remains, and recent statements by Federal Reserve Chairman Jerome Powell that the committee will continue to aggressively raise interest rates further have only increased pressure on the British pound, which has been experiencing quite a lot of problems lately. Expected high inflation and a looming cost-of-living crisis in the UK does not give traders room to take long positions, as a fairly large range of weak fundamentals is expected ahead, likely to push the pound even further below the levels at which it is currently trading. This week, it is important to pay attention to data on the US labor market, which, among other things, determine the Fed's decision on monetary policy. Continued resilience with low unemployment will lead to higher inflationary pressures going forward, forcing the Fed to further raise interest rates, putting pressure on risky assets, including the British pound. The latest COT report indicated that long non-commercial positions rose 14,699 to 58,783, while short non-commercial positions rose 9,556 to 86,749, leading to a slight rise in the negative non-commercial net position to -27,966 against - 33,109. The weekly closing price fell off from 1.1822 against 1.2096. Indicator signals: Trading is below the 30 and 50-day moving averages, which indicates further decline in the pair. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair falls, the lower border of the indicator around 1.1410 will act as support. In case of growth, the upper border of the indicator around 1.1585 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 08:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320769
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

EUR/USD: The EUR Is Under The Strong Bearish Pressure

InstaForex Analysis InstaForex Analysis 05.09.2022 09:55
Technical Market Outlook: The EUR/USD pair has made a new swing low located at the level of 0.9879 (at the time of writing the analysis) as the down move. The momentum is negative and weak on the H4 time frame chart, so the bears are clearly in control again and they might push the price towards the lower levels. In order to terminate the down trend or at least make a correction, the bulls must break above the technical resistance located at the level of 1.0090 and 1.0122. In the longer term, the key technical resistance level is located at 1.0389. Weekly Pivot Points: WR3 - 0.9992 WR2 - 0.99454 WR1 - 0.99156 Weekly Pivot - 0.98988 WS1 - 0.98690 WS2 - 0.98522 WS3 - 0.98056 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue below the parity level. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the longer term, the key technical resistance level is located at 1.0389.     Relevance up to 08:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/291349
The Pound (GBP) Will Probably Continue To Move Sideways

The GBP/USD: Pair Fresh Low And The Bearish Domination

InstaForex Analysis InstaForex Analysis 05.09.2022 09:59
Technical Market Outlook: The GBP/USD pair has made another fresh low at the level of 1.1442 (at the time of writing this analysis) and continues to approach the 3 years low located at 1.1410. This is the covid low made on March 2020 and 2020 low. The nearest horizontal technical resistance is seen at the level of 1.1622 and this level is the next target for bulls in a case of a local pull-back. The momentum remains weak and negative on the H4 time frame chart, so the larger time frame trend (daily and weekly) remains down until further notice. Please watch closely the market reaction for the level of 1.1410 breakout or bounce. Weekly Pivot Points: WR3 - 1.15513 WR2 - 1.15077 WR1 - 1.14791 Weekly Pivot - 1.14641 WS1 - 1.14355 WS2 - 1.14205 WS3 - 1.13769 Trading Outlook: The bearish domination is clear and there is no indication of down trend termination or reversal on the GBP/USD market. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame, so the downside move accelerated. The next long term target for bears is seen at the level of 1.1410 (2020 low). Please remember: trend is your friend.       Relevance up to 08:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291351
PLN Soars to Record Highs Ahead of NBP Decision

The EUR/USD Pair: The Price May Move Downward Today

InstaForex Analysis InstaForex Analysis 05.09.2022 11:14
Trend analysis (Fig. 1). The euro-dollar pair may move downward from the level of 0.9953 (close of Friday's daily candle) to the target of 0.9900, the lower fractal (white dotted line). After testing this level, an upward movement is possible to test 0.9968, the 14.6% retracement level (white dotted line). From this level, the price may continue to move up. Fig. 1 (daily chart). Comprehensive analysis: General conclusion: Today the price may move downward from the level of 0.9953 (close of Friday's daily candle) to the target of 0.9900, the lower fractal (white dotted line). After testing this level, an upward movement is possible to test 0.9968, the 14.6% retracement level (white dotted line). From this level, the price may continue to move up. Alternative scenario: from the level of 0.9953 (close of Friday's daily candle), the price may move downward to test 0.9803, the 208% Fibonacci retracement level (blue dotted line). After testing this level, an upward movement is possible with the target at 0.9900, the lower fractal (white dotted line).     Relevance up to 08:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320765
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

How The Price Of GBP/USD Pair May Move Today?

InstaForex Analysis InstaForex Analysis 05.09.2022 11:19
Trend analysis (Fig. 1). The pound-dollar pair may move downward from the level of 1.1506 (close of Friday's daily candle) to the target at 1.1442, the support line of the descending channel (thick red line). After testing this level, an upward movement is possible with the target of 1.1565, the 13.6% retracement level (blue dotted line). Upon reaching this level, the price may continue to move up. Fig. 1 (daily chart). Comprehensive analysis: General conclusion: Today the price may move downward from the level of 1.1506 (close of Friday's daily candle) to the target at 1.1442, the support line of the descending channel (thick red line). After testing this level, an upward movement is possible with the target of 1.1565, the 13.6% retracement level (blue dotted line). Upon reaching this level, the price may continue to move up. Alternative scenario: from the level of 1.1506 (close of Friday's daily candle), the price may move downward with the target of 1.1421, the historical support level (blue dotted line). After testing this level, an upward movement is possible with the target of 1.1565, the 14.6% retracement level (blue dotted line).     Relevance up to 08:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320775
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

The EUR/USD: The Best Action Is To Close Short Positions

InstaForex Analysis InstaForex Analysis 05.09.2022 11:45
Previous trading tips in EUR/USD pointed at a possible decrease in prices. This really happened after the release of the US NFP report on Friday. From that time, demand for dollar strengthened, so it was not surprising that EUR/USD hit a new yearly low. The best action right now is to close short positions. Congratulations to those who followed the bearish strategy! The pair moved by more than 1,000 pips. The trading idea was based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks! Read more: https://www.instaforex.eu/forex_analysis/320789   Relevance up to 09:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320789
Prices Of Gold Rose For The Third Straight Session

The XAU/USD Pair: The Yellow Metal Was Tripped Up

InstaForex Analysis InstaForex Analysis 05.09.2022 11:51
In the rivalry between two reliable defensive assets, namely gold and the US currency, the concept of victory remains vague. Sometimes the yellow metal wins, and the dollar sags for a short time, and vice versa. At the same time, gold remains the leader in terms of purchases and often bypasses USD in the list of safe haven assets. According to analysts, in the near future, the yellow metal is waiting for new lows, although in the short term, gold holds a fairly strong position. According to current reports, gold periodically falls into a bearish trend. Over the past three weeks, major market players have been reducing their positions on the growth of the precious metal and allowing a breakdown of the support level near $1,700. At the same time, the cost of gold has significantly decreased for three consecutive sessions.The price of the yellow metal slightly exceeded $1,720 per 1 troy ounce on Monday morning, September 5, maintaining the previous week's trend. The potential appreciation of the precious metal is holding back the rising dollar, and the energy crisis in Europe is supporting demand for this safe haven asset. At the beginning of the new week, the XAU/USD pair was trading in the range of $1721.90-$1722, trying to go beyond it. Currently, major hedge funds have increased their sales of gold (by 5% over the past week) and reduced the volume of its purchases. The strengthening of this trend contributes to the further subsidence of the precious metal, experts warn. Recall that this year, gold has experienced a long decline amid a series of sharp increases in interest rates by the Federal Reserve. This measure strengthened the US currency and US government bond yields, but weakened gold. The yellow metal sank most of all after Fed Chairman Jerome Powell's statements about the continuation of the current cycle of tightening the monetary policy. Markets are currently estimating a 70% chance of a rate hike by the US central bank in September (by 75 bps). Pressure on the cost of the yellow metal is exerted by expectations of further tightening of monetary policy by the leading central banks. According to experts, any signals about a possible increase in the key rate by 75 bps etc. will put pressure on gold. In addition to the US central bank, its European counterpart is also preparing to raise interest rates in September. The key task of central banks remains the fight against skyrocketing inflation, while the threat of a recession has faded into the background. In these circumstances, it is difficult for the Fed to raise interest rates too aggressively, analysts say. At the same time, the strengthening of the US currency puts downward pressure on the price of the yellow metal. Currently, gold lacks confidence to move further as the possibility of a fall in its price (to $1,700 per 1 ounce in the fourth quarter of 2022) increases. However, the forecasts of some analysts are encouraging. Currency strategists at Standard Chartered Bank are confident that the precious metal is unlikely to become much cheaper, since part of the risks of a fall is already included in its value. The specialists expect the downward trend of the precious metal to slow down, which is now under pressure due to fears of an aggressive tightening of the Fed's monetary policy. The yellow metal was tripped up by the growing dollar. Positive data on the US labor market provided additional support to the greenback, whose strengthening position was one of the reasons for the decline in the value of gold. As a result, the price of gold collapsed after the number of vacancies in America exceeded the expected figure. Against this background, many experts have come to the conclusion that in the long run, the dollar will replace the precious metal in the list of traditional defensive assets. At the moment, such a scenario is unlikely, analysts emphasize. Now the yellow metal does not bring a large investment income, but is in active demand in an environment of geopolitical and economic uncertainty. In addition, gold remains a sought-after defensive asset in the face of rapidly rising inflation.       Relevance up to 10:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320809
South Korea Hopes To Achieve Carbon Neutrality By 2050

Korean CPI Inflation Below Expectations. Korean Won: Bank Of Korea May Hike The Rates By 25bp In The Next Month

ING Economics ING Economics 05.09.2022 12:14
Korea's headline inflation appears to have passed its peak but will likely stay above 5% for the rest of the year. The Bank of Korea will take some comfort from these latest inflation figures but will stay on a hiking path through to the year-end 5.7 CPI inflation %YoY Lower than expected Headline inflation eased more than expected but core inflation still rose in August Headline inflation eased to 5.7% YoY in August (vs 6.3% in July), which was lower than the market consensus of 6.1%. But core inflation (excluding food and energy) continued to accelerate to 4.0% in August (vs 3.9% in July), showing that underlying price pressures remained strong. The unadjusted monthly growth rate declined by -0.1%, the first decline since November 2020. Extended fuel-tax cuts and a drop in gasoline prices was the main reason for the decline but fresh food and eating-out services rose firmly.   We think inflation has now passed its peak but it will likely remain above 5% for the rest of the year. Firstly, there is a high possibility that the price of fresh food will rise due to bad weather as SuperTyphoon Hinnamnor is expected to pass through the southern part of the Korean peninsula, a major agricultural area. Secondly, some staple manufactured foods, like instant noodles and bread are scheduled to rise after the Choseok holiday. Thirdly, utility fees such as city gas and electricity will rise again in October. Lastly, some local governments are also planning to increase service fees too.  Headline CPI slowed in August Source: CEIC The Bank of Korea is expected to raise rates 25 bp in October The Bank of Korea (BoK) will continue to stay on a hiking path at least until the end of the year. Governor Rhee has made it clear that the BoK will continue to raise rates as long as inflation stays above 5% and growth conditions do not deteriorate meaningfully. We think these terms will remain in effect until the end of the year. However, as we get closer to the year-end, we will see clearer signs of a slowdown in growth, so the BoK could begin to give more weight to growth considerations in its policy decision. Today's weaker-than-expected inflation print supports our view that the BoK will end its hiking cycle at 3.0% in November.  Read this article on THINK TagsKorea economy CPI inflation Bank of Korea Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Risks in the US Banking System: Potential Impacts and Contagion Concerns

The EUR/USD And The GBP/USD: The Most Important Details For Beginners

InstaForex Analysis InstaForex Analysis 05.09.2022 12:38
Details of the economic calendar for September 2 European Union Producer Price Index came out with a significant margin, rising from 36.0% to 37.9%. This news stimulated the euro to rise against the dollar. The main event of the past week was the United States Department of Labor report, which slightly surprised market participants. The unemployment rate was forecast to remain unchanged at 3.5%. However, unemployment in the US rose to 3.7%, which was a catalyst for a local sell-off of the dollar, yet this is a possible signal for the Fed to take some easing measures. There is one important remark in this reflection, the regulator is ready to turn a blind eye to many things in order to overcome rising inflation. Meanwhile, jobs created outside of agriculture came out in line with the consensus forecast, 315,000. The reaction of the US dollar took place within the framework of speculation. In the beginning there was a sale and then a buy-off. Analysis of trading charts from September 2 The EURUSD currency pair ended last week with an intense downward move. As a result, there was an inertial movement in the market for the US dollar, which returned the quote to the level of 0.9900. The GBPUSD currency pair resumed its decline after a short stop. This step led to a subsequent update of the low of the medium-term trend, where only a few points remained to pass before the bottom of 2020. Economic calendar for September 5 The new trading week starts with a holiday in the United States. The key player of the financial market will return on Tuesday. Trading volumes may decline at first. As for statistical data, the publication of the final indicators on the index of business activity in the services sector in Europe and the UK is expected. If the data coincide with the preliminary assessment of the reaction in the market, it is not worth waiting. At the same time, Eurozone retail sales data is to be published. Its rate of decline may slow down, which is a positive signal for the euro. Time targeting: USA - Labor Day (holiday) EU Services PMI – 08:00 UTC UK Services PMI – 08:30 UTC EU Retail sales volume – 09:00 UTC Trading plan for EUR/USD on September 5 With the opening of the European session, a local level of 0.9900 appeared. The sale of the euro was associated with a sharp jump in gas prices in Europe. At the opening of trading, prices jumped by 30%, to $2,800 per thousand cubic meters. The reason for the increase in the cost of gas lies in the message of Gazprom on Friday evening that the maintenance of the only working turbine of SP-1 revealed "gross violations" and the gas pipeline will not work without their elimination. In order to confirm the signal about the prolongation of the long-term downward trend for the euro, the quote must be kept below the level of 0.9900 steadily in the daily period. In this case, a path will open in the direction of 0.9850–0.9500. Otherwise, the amplitude 0.9900/1.0150 has every chance for further formation. Trading plan for GBP/USD on September 5 Despite the growing oversold level of the pound sterling, the market remains an inertial course, where speculators ignore the overheating of short positions in vain. The low of 2020 (1.1410) may play as support on the sellers' path. In this situation, traders will consider two possible options for price development: The first scenario comes from a rebound from the 2020 local low area. In this case, an increase in the volume of long positions is possible, which at the beginning will slow down the downward cycle, after which a rebound will occur. The second scenario considers the lack of reaction of traders to technical signals about the oversold pound and the support level. In this case, holding the price below 1.1400 in the daily period will lead to a prolongation of the long-term trend. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.       Relevance up to 09:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320791
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

Bears Dominate The Euro To The US Dollar And The British Pound To US Dollar The Market

InstaForex Analysis InstaForex Analysis 05.09.2022 13:19
EUR/USD Higher timeframes Bears dominate the market at the opening of today's trading, updating the low of 0.9901. In the case of consolidation and restoration of the downward trend, the reference points for the decline can be considered the levels of 0.9000 (psychological level) and 0.8225 (minimum extremum of 2000). If the bears cannot hold below 0.9901 and return to the consolidation zone, then after gaining the boundaries of 0.9984 (daily short-term trend) and 1.0000 (psychological level), we can expect that bulls will try to go beyond the existing zone uncertainty and develop a full-fledged corrective movement. The targets of the further rise will be the elimination of the daily death cross (1.0066 - 1.0124 - 1.0181) and gaining support from the weekly short-term trend (1.0124). H4 – H1 Bears also hold the advantage on the lower timeframes as the market is currently operating below key levels. By now, the S2 support (0.9886) has been tested, the reference point is the S3 support (0.9830). Key levels today join forces in the area of 0.9993–77 (central pivot point + weekly long-term trend). Consolidation above will change the current balance of power, returning the advantage to the bulls. Upward targets within the day are now at 1.0012 - 1.0068 - 1.0103. *** GBP/USD Higher timeframes Bears started the new working week with a new low (1.1495) and a decline into the zone of attraction and influence of the historical support at 1.1411. The formed result of interaction with the level of 1.1411 will most likely determine the prospects for further developments in the current situation. H4 – H1 In the lower timeframes, the advantage is on the side of the bears. Two of the three supports of the classic pivot points (1.1471 – 1.1437) have been tested, leaving S3 (1.1378) in reserve for a decline. The nearest reference point for the current upward correction is the central pivot point (1.1530), then the intermediate resistance can be noted at 1.1564 (R1), but the key value belongs to the resistance of the weekly long-term trend (1.1607). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Relevance up to 11:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320814
Euro (EUR) May Be Weaker Because Of Shocking Gas News!

Euro (EUR) May Be Weaker Because Of Shocking Gas News!

ING Economics ING Economics 05.09.2022 12:21
European asset markets start the week under pressure after Russia’s Gazprom said gas supplies via its Nordstream 1 pipeline would be indefinitely suspended. Expect European currencies to continue under-performing, with fiscal support packages unlikely to reverse recent trends USD: The pre-eminent safe haven right now What initially looked like a benign end to the week after some encouraging US jobs data quickly reversed on Friday evening when Russia’s Gazprom announced it would be indefinitely suspending gas flows through its Nordstream 1 pipeline. While European nations have made progress towards their gas storage targets, such a complete, early withdrawal of Nordstream 1 supplies is likely to see European natural gas prices surge today and European equity markets resume under heavy pressure. Over the weekend, authorities in Finland and Sweden announced liquidity guarantee schemes for large utility companies, making reference that they did not want an energy crisis to turn into a financial crisis. We have not yet really seen financial stress indices such as the 3m Euribor-ESTR spread start to widen appreciably. But understandably, international investors are looking to steer clear of European exposure at present. Offering 2.3% overnight deposit rates and backed by near energy independence and a relatively strong US economy, it should not be a surprise to see the dollar remaining bid. As we noted last week, we doubt the Japanese yen offers much of a safe haven at the moment given the nature of the crisis wiping out Japan’s trade surplus.   For the week ahead the US data calendar is light, but we have several Fed speakers including Chair Powell on Thursday. Equally the G10 has several big central bank meetings including the European Central Bank (ECB), Bank of Canada (BoC) and Reserve Bank of Australia (RBA). All should be considering rate hikes at least in the 50bp region, if not 75bp. These size hikes can offer some support to respective currencies – but look unlikely to turn core FX trends around.  DXY is now comfortably through 110 and 111.30 looks to be the next resistance area. Don’t fight the trend here. Chris Turner EUR: Trial by gas The gas news has sent EUR/USD to a new low for the year and it is not obvious where the next support levels exist – perhaps 0.9850 and then not until the 0.9600/9650 area. There is a risk of moving into ‘fast markets’ and understandably EUR/USD implied volatility is turning bid again. Our German macro team feels that the weekend package of support measures to the German economy does not go far enough – worth just 2% of GDP compared to 15% of GDP levels of support seen through the pandemic. Equally, we think a 75bp hike at Thursday’s meeting is a leap too far for the ECB – we look for 50bp. This will not help the euro either. EUR/CHF should turn lower again after its recent spike higher. We expect the Swiss National Bank to be intervening on both sides of EUR/CHF now. But given the SNB’s recent hawkish shift, we do not think it would have a problem with EUR/CHF at 0.95. Chris Turner  GBP: Searching for a floor The broadly stronger dollar has seen GBP/USD losses extend and the 1.1410 March 2020 flash crash low come into view. The highlight of today’s session will be the announcement of a new Conservative Prime Minister – widely expected to be Liz Truss. Most recently she has been discussing the need for an early and aggressive fiscal stimulus package – perhaps worth £100bn. Such a fiscal package could see Bank of England tightening expectations push ahead even further. Normally, loose fiscal and tight monetary policy would be good for a currency. But given the negative growth environment – sterling is a pro-cyclical currency – it is hard to see the pound turn around against the dollar. Equally, it seems the UK bond market is starting to prove uneasy with the fiscal outlook – potentially inserting a sovereign risk premium into sterling, too. Cable should stay offered, while 0.8600-0.8700 could be the new trading range for EUR/GBP.     Chris Turner CEE: Gains at risk A new month will bring a heavy calendar this week. Today, we will see second quarter wages in the Czech Republic, closely watched by the central bank, which expects real wages to fall by 13.1% year-on-year, more than the market. Today we will also see retail sales in Hungary, which should show an acceleration in the year-on-year pace due to a retroactive increase in pensions. On Tuesday, industrial production and foreign trade in the Czech Republic will be released. Leading indicators point to a further decline driven mainly by the automotive sector. On Wednesday, the highlight of the week will be the meeting of the Polish central bank. We expect a 25bp hike to 6.75% but given the upside surprise in August inflation, a 50bp hike may be discussed. Also, on Wednesday we will see Hungarian industrial production and Czech retail sales. On Thursday, August inflation will be released in Hungary. We expect a jump from 13.7% to 16.2% YoY partly due to the changes in the fuel price cap. In the FX market, CEE currencies are maintaining recent gains while global conditions are mixed. EUR/USD around parity is keeping pressure on EM currencies, but gas prices have in turn allowed some temporary relief for the CEE region. However, in our view, this is not sufficient for current levels, especially in light of recent gas news, and domestic conditions are not helping the situation either. CEE economies are showing signs of slowing and the geopolitical story has not changed. Thus, it is hard to look for additional support from central banks and interest rates for FX. In our view, CEE currencies remain very sensitive to global events and may thus lose their recent gains. In our view, the most vulnerable at the moment is the Hungarian forint, which gained 2.6% just over the past week and dominated the EM world and we could see a correction back above 405 EUR/HUF this week. The Polish zloty will be mainly driven by the central bank decision. However, surprisingly high inflation has raised market expectations and it will be hard for the central bank to meet expectations, which may negatively impact the zloty and push the level closer to 4.75 EUR/PLN. The Czech koruna should return to Czech National Bank intervention levels after recent central bankers' statements have once again cooled market expectations and confirmed the dovish stance of the bank's board. Overall, we remain bearish on CEE currencies. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Saxo Bank Podcast: Natural Gas On Colder Weather, Wheat And Coffee Under Pressure, JPY Weaker And More

The Interruption Of Gas Supply Has Sent The Euro Downwards

InstaForex Analysis InstaForex Analysis 05.09.2022 13:29
The energy crisis in the EU continues to deepen amid Russia's full shutdown of the Nord Stream pipeline over the past weekend. The interruption of gas supply has sent the euro downwards once again. Early on Monday, the European currency lost 0.5% against the US dollar and hit a 20-year low at 0.9903. EUR/USD came under pressure following Russia's decision to extend maintenance of the Nord Stream pipeline. Gazprom shut down the pipeline indefinitely, citing an oil leak in one of its turbines. EU officials believe the technical issues are merely a pretext by the Kremlin to shut down gas exports to the European Union According to the West, Moscow is trying to impose an energy blockade on the EU at the beginning of the heating season in a last-ditch attempt to force EU to relax its sanctions against Russia. At the same time, the Kremlin has blamed Western sanctions imposed on Russia for the pipeline's shutdown. Russia is claiming that sanctions prevent Gazprom from keeping the Nord Stream's turbines running. On Saturday, Gazprom tried to alleviate EU concerns by stating that the company would increase natural gas exports to Europe via Ukraine. However, the West has deemed Gazprom's promises to be unreliable. Such an increase would not fully compensate for the shutdown of Nord Stream. Furthermore, this cannot be a permanent solution. Natural gas deliveries via Ukraine could be difficult due to the ongoing conflict between the two countries. This escalation of the gas war between Russia and the EU is forcing EU policymakers to seek solutions for the supply problem. The EU is worried that the shutdown of Nord Stream could send natural gas prices in Europe even higher. On Friday, EU energy ministers are set to present emergency measures to tackle rising energy prices. These measures would likely include natural gas price caps. Furthermore, EU politicians would push for a reduction in gas demand and consumption in the European Union. The ongoing energy crisis will be in the headlines this week, dimming the short-term prospects of the euro. As the gas conflict escalates, risks of an economic slowdown would rise. With the ECB preparing for another interest rate increase, the timing for these risks could not be worse. The ECB's policy meeting is scheduled to take place on Thursday. The EU regulator is now increasingly expected to carry out more aggressive policy measures after inflation in the eurozone reached 9.1%. However, with the EU facing a renewed threat of an energy collapse, recession, and a serious financial crisis, many analysts do not believe that ECB president Christine Lagarde will take a more hawkish step than in July. Earlier, the European Central Bank increased the key rate by 50 basis points to 0.5%. At the same time, the Federal Reserve hiked the rate by 75 basis points to 2.25-2.5%. The gap between EU and US interest rates could likely increase even further in September, as traders expect another 75 bps move by the Fed in September. It would be a third such increase in a row. "Everything is pointing to a lower euro," Carol Kong, senior associate for international economics and currency strategy at Commonwealth Bank of Australia said. "We've heard a great deal of negative news about the European economy, and I think the decline in the euro can continue this week." On the technical side, EUR/USD bears hold dominance in the market. The 7-week support line at 0.9880 is acting as an additional downside filter for the pair. EUR/USD must regain 1.0100 for bullish traders to return to the market.     Relevance up to 10:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320805
The Euro May Attempt To Resume An Upward Movement

The Euro To US Dollar May Potential Trend Reverse Soon?

InstaForex Analysis InstaForex Analysis 05.09.2022 14:23
Technical outlook: EURUSD dropped to fresh swing lows at 0.9877 during the Asian session on Monday, before finding interim support. Bulls now need to clear past the 1.0085-90 initial price resistance to confirm a meaningful bottom is in place. The daily chart is unfolding a Doji candlestick pattern. If successful, it would indicate a potential trend reversal soon. EURUSD has carved a larger-degree downswing between 1.2350 and 0.9877 as discussed in the last several trading sessions. It is just a matter of time when the bulls are back in control to produce a counter-trend rally at least towards 1.0800-1.0900. The trend line and the Fibonacci 0.382 retracement of the above drop are also converging close to 1.0800. Furthermore, it should be noted that despite the new lows being carved at 0.9977, the RSI has already produced again a bullish divergence on four different timeframes (1H, 4H, Daily and Weekly). It is a potential indication of a trend reversal anytime soon and a break above 1.0085 will confirm it. The downside is limited from here. Trading plan: Potential rally towards 1.0800 against 0.9800 Good luck!       Relevance up to 13:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291425
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

Not Surprising That Investors Want To Get Rid Of British Assets

InstaForex Analysis InstaForex Analysis 05.09.2022 12:43
How quickly time passes! It would seem that investors have recently discussed the idea of parity between the euro and the US dollar. In early autumn, a new parity with the US currency is on the agenda. This time we are talking about the pound. The event is of great importance because, unlike EURUSD, the GBPUSD pair has never fallen below 1 in its 200-year history. It was only in 1985 that it was close to it, but the agreement in Plaza Accord reversed the processes taking place at that time on Forex. What will happen this time? Britain is the most telling example of a developed nation whose economy has slipped into stagflation. Consumer price growth is already measured in double digits, and according to the shocking forecasts of Goldman Sachs, it will reach 22% in 2023. In this scenario, the bank expects to see a 3.4% subsidence of the UK's GDP. Andrew Bailey and his colleagues also talk about a long recession for five quarters in a row. How could it be otherwise if the share of household energy expenditures increases from 12% of disposable income in 2021 to 41% in 2023. Against this background, it is not surprising that investors want to get rid of British assets as soon as possible. Bond sales are proceeding at an accelerated pace, and the rise in yields should theoretically become a crucial growth driver for sterling, especially in conditions of increasing expectations for the repo rate, which, according to the futures market, will jump to 3.25%, if not at the end of this year, then at the beginning of next year. Dynamics of GBPUSD and British bond yields Alas, the profitability growing by leaps and bounds does not help the pound. The reason for this is the increase in the double deficit—the current account and the budget, which does not allow the GBPUSD bulls to raise their heads. Indeed, the first indicator rose to a record 8.3% of GDP already in the first quarter against the backdrop of an increase in the cost of imports, primarily due to fuel. But in those days, gas prices were not so high. It's only the beginning. The intention of Liz Truss, the main favorite for the post of British Prime Minister, to reduce taxes is causing fear due to the widening budget deficit. Grandiose plans need to be funded by something. Most likely, London will be forced to issue more bonds, and problems with financial stability add a headache to the GBPUSD bulls. Truss could take a tougher stance on the Northern Ireland Protocol to the Brexit deal than her predecessor, raising the risk of a trade war with the EU. Not surprisingly, Scottish Prime Minister Nicola Sturgeon calls her victory in the struggle for the status of leader of the Conservative Party a disaster for the UK. No matter how the risks of a new referendum on the independence of this country grow. Technically, on the daily chart, GBPUSD quotes approached the previously designated target by 161.8% according to the AB=CD pattern by arm's length. It corresponds to the mark 1.14. As long as the pair is trading below the pivot point 1.158, we continue to adhere to the strategy of selling it on pullbacks.   Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320785
The USD/CNH Pair Remains On The Bear’s Trend

The USD/CNY: The Breakout Of The Symmetrical Triangle And The Buying Opportunities

InstaForex Analysis InstaForex Analysis 05.09.2022 14:39
Technical analysis: USD/CNY has been trading upside today and I saw the breakout of the symmetrical triangle pattern on the 4H time-frame. Trading recommendation: Due to the breakout of the symmetrical triangle in the upside trend, I see further upside continuation towards the next reference point. Watch for the buying opportunities on the intraday dips with the main upside objective at the price of 7.080. MACD oscillator is showing fresh upside money flow and no signs for the reversal, which is good sign for the further rally. Key support is set at the price of 6.885 Read more: https://www.instaforex.eu/forex_analysis/291435   Relevance up to 14:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.  Read more: https://www.instaforex.eu/forex_analysis/291435
Gold price: Oanda's analyst talks technically possible price of $2000 per ounce

Gold With Potential For Further Downside Rotation

InstaForex Analysis InstaForex Analysis 05.09.2022 14:44
Technical analysis: Gold has been trading sideways today at the price of $1.712/ I see potential for further downside rotation. Trading recommendation: Gold is still trading in the bigger downside channel and I see potential for the downside movement. Watch for the selling opportunities with the downside objective at the price of $1.691. Stochatic oscillator is showing fresh downside cross from the overbought zone, which can be good sign for the further downside rotation. Key resistance is set at the price of $1.720   Relevance up to 14:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291439
The Upside Of The EUR/USD Pair Remains Limited

The EUR/USD Currency Pair Today Updated A 20-year Low

InstaForex Analysis InstaForex Analysis 05.09.2022 15:55
At the start of a new trading week, dollar bulls again reminded of themselves: the greenback strengthened its position throughout the market, updating price records. Thus, for the first time in 20 years, the EUR/USD pair fell to the area of the 98th figure, having carried out reconnaissance in force. Having been marked at 0.9879, sellers retreated, but the mood for the pair still remains bearish. Other dollar pairs of the "major group" demonstrate similar dynamics, reflecting the increased demand for the US currency. The US dollar index today reached the 110th mark—again, for the first time in the last 20 years. In other words, the picture emerges in a very unambiguous way: dollar bulls have organized another rally, playing out the events of the past two weeks. Note that the EUR/USD currency pair today updated a 20-year low not only due to the strengthening of the greenback, but also due to the weakening of the euro. Firstly, macroeconomic reports were published in Europe, which for the most part ended up in the "red zone." Secondly, at the start of a new week, gas prices increased again on European stock exchanges after a significant decline on Friday. The combination of these factors put pressure on the euro, which once again reminded of its vulnerability. For example, retail sales in the European region decreased by 0.9% in July (in annual terms). Experts expected a more modest decline (by 0.7%). In the previous month, this indicator also came out in the negative area (-3.2%). Another indicator was also disappointing—the index of investor confidence in the eurozone economy, calculated by Sentix. It collapsed in September to -31 points, although it showed signs of recovery in August. The final estimates of the PMI indices for August were also revised downwards. In particular, the German index of business activity in the services sector dropped to 47.7 points, and the composite PMI index to 46.9 points. Pan-European indices were similarly revised downwards. But, perhaps, the main driver of the weakening of the euro was the aggravated energy crisis in the European region. Recall that at the end of last week, the cost of gas decreased significantly—for the first time in 2 weeks, a thousand cubic meters of blue fuel was estimated at less than two thousand dollars. Reuters on Friday distributed unofficial information (citing its sources) that the pipeline will resume its work until Monday. In addition, gas became cheaper due to the fact that the EU countries filled the storage facilities ahead of schedule by an average of 80% (although such an indicator was planned only by November). However, at the opening of today's trading, the price rose sharply by 35% at once, exceeding the mark of $3,000 (with a subsequent rollback to $ 2,700). This happened against the background of a complete shutdown of gas supplies by Nord Stream-1. It turned out that Gazprom had not resumed the operation of the gas pipeline—it was stopped indefinitely, until the malfunction of the only working engine was eliminated. In addition, Dmitry Peskov, press secretary of the President of Russia, said that anti-Russian sanctions do not allow Gazprom to fully supply fuel to Europe. It is obvious that the worsening energy crisis will drag inflation, which has already reached 9% in the eurozone. The euro was again under strong pressure, allowing the EUR/USD bears to completely control the situation on the pair. The dollar, in turn, is getting more expensive amid increasing hawkish expectations. The contradictory Nonfarm Payrolls report published last Friday did not break the hawkish mood of investors. According to the CME FedWatch Tool, the probability of a third consecutive rate hike by 75 basis points at the next Fed meeting in September is estimated at almost 60%. Before the publication of Nonfarms, the chances were even higher (75%) – but in my opinion, such a downward correction does not matter significantly. Fed Chairman Jerome Powell warned at the end of August that the process of tightening the Fed's monetary policy would affect the dynamics of the US labor market, but this "side effect" would not prevent the regulator from resisting high inflation. In other words, the scenario of a 75-point rate hike at the September meeting is still the basic one, and this fact supports the greenback. Thus, hawkish expectations regarding the further actions of the Fed, as well as general concern about the European gas crisis (here the dollar is in high demand as a defensive asset), allow EUR/USD sellers to significantly strengthen their positions. It is noteworthy that the euro failed to organize a defense, even against the backdrop of hawkish rumors that hover around the ECB. At the end of August, Reuters published an insider that many representatives of the European regulator are ready to support a 75-point rate hike at the September meeting. Later, this information was confirmed by the heads of the Central Bank of the Netherlands, Germany and Estonia. However, this circumstance did not save EUR/USD from falling. All this suggests that bearish sentiments still prevail for the pair. It is advisable to enter sales on corrective upward pullbacks (to the area of 1.0020-1.0050). In this case, the downward targets will be at 1.0000, 0.9950, 0.9900. It is still risky to open short positions at the bottom of the 99th figure: as a result of today's offensive, the bears failed to gain a foothold below the target of 0.9900, which indicates that the main support level is located in this price area.         Relevance up to 13:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320825
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

EUR/USD Has Been Harmed By The Gas News. Eurozone Prints - i.a. Services PMI And Retail Sales Didn't Meet Expectations, NFP Gave Fed The Green Light

Craig Erlam Craig Erlam 05.09.2022 16:16
The euro fell below the 0.9900 line earlier in the European session but has pared its losses. Currently, EUR/USD is trading at 0.9937, down 0.19%. Euro falls on Nord Stream 1 shutdown US  markets are closed for the Labour Day holiday. A US holiday often means a quiet day for the currency markets, but not today. Last week, investors were warily keeping an eye on the latest energy crisis development in Europe. Russian officials shut down the Nord Stream 1 pipeline on Wednesday, citing the need for three days of maintenance. Saturday came and went, and the pipeline remains closed, with Moscow now claiming an oil leak in a turbine. Germany has countered that the pipeline is fully operational, stoking fears that Russia is again weaponising energy exports to Europe. The predictable result has been renewed fears of an energy crisis, which sent the euro to a new 20-year low of 0.9876 earlier today. Germany has greatly reduced its dependence on Russian gas Even if Moscow does restore service, this episode is a reminder of Europe’s energy dependence on an unreliable Russia. Germany has greatly reduced its dependence on Russian gas, from 55% prior to Russia’s invasion of Ukraine to just 26%, but if Russia chooses to play hardball and cut off gas supplies, the result will be a full-blown energy shortage for Europe this winter. There were a host of releases out of Germany and the eurozone today, and the weak data didn’t help the euro at all. Eurozone and German Services PMIs both weakened in August with readings of 49.8 and 47.7, respectively. This points to a contraction in business activity. Eurozone Sentix Investment Confidence remains in deep freeze, and fell to -31.8, down from -25.2 and below the forecast of -27.5. Finally, eurozone retail sales declined -0.9% YoY in July, following a -3.2% reading in June (-0.7% est.)  The soft numbers point to weakness in the German and eurozone economies. The highly-anticipated US nonfarm payrolls on Friday turned out to be a whimper rather than a bang, as the economy produced a solid 315 thousand new jobs, edging above the forecast of 300 thousand. The reading will enable the Fed to continue its aggressive rate-tightening cycle as it relies on a robust US labour market. EUR/USD Technical EUR/USD is testing support at 0.9888. Below, there is support at 0.9816 There is resistance at 0.9984 and 1.0056 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro hits 20-year low on oil shutdown - MarketPulseMarketPulse
Further Downside Of The AUD/JPY Cross Pair Is Expected

The AUD/USD: The Growth Of The Australian Dollar And Possibility To Reverse The Price Of The Pair

InstaForex Analysis InstaForex Analysis 06.09.2022 08:22
The Australian dollar shows growth both yesterday and this morning. Structurally, this growth is corrective, it can end at a strong level of coincidence of the target level of 0.6870 and the MACD line. If the Marlin oscillator has an effective upper limit of the falling wedge, then the price may reverse downward from the current levels today. The price approached the MACD indicator line on the four-hour chart. It can provide a price reversal down in the near future. But the Marlin Oscillator is in the positive area and this is a sign of continued growth towards the target of 0.6870. We are following developments.     Relevance up to 04:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320873
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

How The British Pound To The US Dollar Currency Pair Looks Like?

InstaForex Analysis InstaForex Analysis 06.09.2022 08:31
The British pound opened with a gap of 31 points on the first day of the week, fell a bit more during the day, and then closed the gap before the close of the session. This morning the gains picked up, probably on the news that Liz Truss is becoming British prime minister. She promised to lower taxes during the election campaign. The price approached the 1.1600 resistance on the daily chart. A transition above the level opens the target at 1.1650, and then there may be an increase to 1.1815 or slightly lower, to the MACD line (1.1755). The Marlin Oscillator turned up sharply and this is a harbinger of a correction. The price broke above the MACD line on the four-hour chart, Marlin consolidated in the positive area. There are all prerequisites for continued growth to at least 1.1650. After the completion of the correction, a new medium-term downward movement is likely.     Relevance up to 04:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320875
The Upside Of The EUR/USD Pair Remains Limited

Could The Price Of the EUR/USD Pair Increase Today?

InstaForex Analysis InstaForex Analysis 06.09.2022 08:35
he euro closed Monday with a slight decrease, not having time to close the gap from the market opening. This was prevented by resistance at 0.9950. The line of the Marlin Oscillator, which forms the convergence, also showed noticeable resistance. This morning the resistance level is overcome, the gap is closed, the euro may resume its decline, but the oscillator is still struggling with the linear support hurdle. To develop a downward movement, the price needs to return under the level of 0.9950. Next, we are waiting for the target levels 0.9850 and 0.9752 to be worked out. The price is between the balance and MACD indicator lines on the H4 chart, the Marlin Oscillator is in the negative area. To consolidate the downward momentum after the price goes under 0.9950, it will also need to overcome the MACD line, approximately in the area of 0.9918. It is also possible for the price to move slightly upwards (0.9985) so that the signal line of the Marlin Oscillator reaches the zero line and reverses from it, thus forming a repeated reversal pattern. This main scenario will be broken if the price settles above the resistance level of 1.0020.     Relevance up to 04:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320877
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The EUR/USD Pair Movement On Trade. The Euro Will Continue To Fall.

InstaForex Analysis InstaForex Analysis 06.09.2022 08:39
EUR/USD 5M The EUR/USD pair did not trade in the best way on Monday. It has not been such for a long time that during the day there is a blatant flat with low volatility. Sooner or later it had to happen. There were no important macroeconomic statistics either in the European Union or in the US on Monday. Two reports were published in Europe, but the first is the index of business activity in the service sector in the second assessment for August - that is, a priori, not the most interesting report for traders, and the second - retail sales, the value of which for July almost coincided with the forecast. It was naive to expect a market reaction under such circumstances. It didn't happen. The euro managed to retreat literally 50 points from its 20-year lows, so we believe that the pair's fall will resume again. Moreover, the European Central Bank meeting will take place this week, and the market reaction to its results can be absolutely anything, despite the fact that it is already known that the key rate will be increased by at least 0.5%. But once again: the reaction of the market can be completely unpredictable. Therefore, it is not at all a fact that this week we will see a strong growth of the euro. In regards to Monday's trading signals, everything was also very sad. Only two of them were formed. The first one to sell is definitely false, since the price could not go in the right direction by even 15 points. The second one is a little better, one could earn about 15-20 points for the long position and cover the loss on the first transaction. The result is absolutely normal for Monday. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For most of 2022, they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group decreased by 8,500, and the number of shorts decreased by 5,000. Accordingly, the net position decreased by about 3,500 contracts. This is not much, but this is again an increase in the bearish mood among the major players. After several weeks of weak growth, the decline in this indicator resumed. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 47,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. The euro has not been able to show even a tangible correction over the past six months or a year, not to mention something more. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 6. The ECB meeting is the key event of the week. Overview of the GBP/USD pair. September 6. An almost empty week for the pound. What can stop it from falling against the dollar? Forecast and trading signals for GBP/USD on September 6. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair continues to be inside the 0.9900-1.0072 channel on the hourly timeframe, although it briefly left it during the past day. The lower limit of this channel has been broken, and we have no doubt that the euro will continue to fall. But this week it is quite possible that the "broad flat" will continue. We highlight the following levels for trading on Tuesday - 0.9900, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9996) and Kijun-sen (0 .9978). There is still no level below 0.9900, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthroughs" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. No important events are planned in the European Union on September 6, meanwhile, the indexes of business activity in the services sector ISM and S&P will be published in the US. The first is more important and may follow the second - that is, below the 50.0 level. We are waiting for the market's reaction to this report, especially since it is almost the only one this week. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/320865
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The Pound To The US Sollar Pair Maintains A Downward Trend

InstaForex Analysis InstaForex Analysis 06.09.2022 08:44
GBP/USD 5M The GBP/USD currency pair, simply and calmly, almost with an empty macroeconomic and fundamental background, updated its 2-year lows on Monday. An upward pullback followed in the afternoon, but it does not allow us to assume anything more than a pullback. The price continues to be below the descending trendline, so the downward trend continues. And it can persist for a long time, because the price is far from the trend line. A report on business activity in the service sector was just released in the UK, which did not interest the market at all due to the second assessment of this indicator. Recall that the first estimate is published first, which can impress traders, but the second rarely differs from the first. There was nothing else interesting on Monday, but even in such conditions the pound managed to approach its 37-year lows. We believe that these lows can be updated as early as this week. In regards to Monday's trading signals, everything was prosaic, since not a single one was formed. As we have already said, the pound is now so low that there are simply no levels to trade here. Of course, levels will appear over time, but so far there are none, and the Ichimoku indicator lines are located much higher than the price. In fact, now traders have only the level of 1.1411 at their disposal, to which the price is striving. COT reports: The latest Commitment of Traders (COT) report on the British pound, released yesterday, turned out to be as neutral as possible. During the week, the non-commercial group closed 300 long positions and opened 900 short positions. Thus, the net position of non-commercial traders immediately increased by 1,200. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Therefore, the growth of the British pound still cannot count. How can you count on it if the market sells the pound more than it buys? And now its fall has resumed altogether, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 87,000 shorts and 58,000 longs open. The difference is not as terrifying as it was a few months ago, but it is still noticeable. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the "foundation" and geopolitics. If they remain as weak as they are now, then the pound may still be in a "downward peak" for some time. Also remember that it is not only the demand for the pound that matters, but also the demand for the dollar, which seems to remain very strong. Therefore, even if the demand for the British currency grows, if the demand for the dollar grows at a higher rate, then we will not see the strengthening of the pound. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 6. The ECB meeting is the key event of the week. Overview of the GBP/USD pair. September 6. An almost empty week for the pound. What can stop it from falling against the dollar? Forecast and trading signals for EUR/USD on September 6. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair maintains a downward trend on the hourly timeframe thanks to the trend line. The British currency continues to fall and may continue for some time, as the market seems to have forgotten that you can not only sell, but also buy. But why buy if there is a strong downward trend? The market does not need any specific grounds for trading now, and the pound is updating its local lows almost every day. We highlight the following important levels for September 6: 1.1411, 1.1649, 1.1874. Senkou Span B (1.1698) and Kijun-sen (1.1601) lines can also be sources of signals. Signals can be "rebounds" and "breakthrough" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. On Tuesday, the UK will release the index of business activity in the construction sector in the second assessment for August, which is unlikely to be of interest to market participants. The US today will publish quite an important index of business activity in the services sector ISM. If its actual value differs from the forecast value (55-55.5), then the market reaction may follow. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 02:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320867
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

The Euro To The US Dollar: The Currency Pair Might Have Completed

InstaForex Analysis InstaForex Analysis 06.09.2022 09:01
Technical outlook: EURUSD climbed through the 0.9960-65 range during the late Asian session on Tuesday after finding support at around 0.9875 early this week. The single currency pair is seen to be trading close to 0.9965 at this point in writing and is expected to push through the 1.0085-90 zone in the near term. A Morning Star pattern is likely to unfold on the daily chart. EURUSD has carved a larger-degree downswing between 1.2350 and 0.9875 since January 2021. The currency pair might have completed or is about to complete a larger-degree corrective pattern at around 0.9400. Before that, a corrective rally towards 1.0800-1.0900 could be expected and a break above 1.0365 will confirm the same. Furthermore, since the recent swing low at 0.9875 is accompanied by a strong bullish divergence on the daily RSI, prices are expected to turn higher soon. Immediate price resistance is seen at 1.0085. Once taken out, the bulls would target the 1.0365 mark, which is next in line as seen on the daily chart here. Trading plan: Potential rally towards 1.0365 and 1.0800 against 0.9800     Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291518
Credit squeezing into central banks – what next?

New Swing Low Of The Euro To The Us Dollar, The Momentum Is Negative.

InstaForex Analysis InstaForex Analysis 06.09.2022 09:06
Technical Market Outlook: The EUR/USD pair has made a new swing low located at the level of 0.9879, but bulls are trying to bounce again. The momentum is negative and weak on the H4 time frame chart, so the bears are clearly in control again and they might push the price towards the lower levels. In order to terminate the down trend or at least make a correction, the bulls must break above the technical resistance located at the level of 1.0090 and 1.0122. In the longer term, the key technical resistance level is located at 1.0389. The whipsaw price action below the parity level continues. Weekly Pivot Points: WR3 - 0.9992 WR2 - 0.99454 WR1 - 0.99156 Weekly Pivot - 0.98988 WS1 - 0.98690 WS2 - 0.98522 WS3 - 0.98056 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue below the parity level. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the longer term, the key technical resistance level is located at 1.0389.     Relevance up to 08:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291524
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

GBP/USD: The Next Currency Pair With Fresh Low Today

InstaForex Analysis InstaForex Analysis 06.09.2022 09:13
Technical Market Outlook: The GBP/USD pair has made another fresh low at the level of 1.1442 and continues to approach the 3 years low located at 1.1410 - the covid low made on March 2020. Currently, the bulls had managed to bounce 1.30% towards the nearest horizontal technical resistance seen at the level of 1.1622 and this level is the next target for bulls in a case of a local pull-back. The momentum is neutral on the H4 time frame chart, so the larger time frame trend (daily and weekly) remains down until further notice. Please watch closely the market reaction for the level of 1.1410 breakout or bounce. Weekly Pivot Points: WR3 - 1.15513 WR2 - 1.15077 WR1 - 1.14791 Weekly Pivot - 1.14641 WS1 - 1.14355 WS2 - 1.14205 WS3 - 1.13769 Trading Outlook: The bearish domination is clear and there is no indication of down trend termination or reversal on the GBP/USD market. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame, so the downside move accelerated. The next long term target for bears is seen at the level of 1.1410 (2020 low). Please remember: trend is your friend.   Relevance up to 08:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291526
Poland's Inflation Expected to Reach Single Digits in August, but Disinflation to Slow Down

Reserve Bank Of Australia Hikes Again! Aussie (AUD) Seems To Be Itself

ING Economics ING Economics 06.09.2022 09:27
Australia's Reserve Bank raised its cash rate target a further 50bp to 2.35% at its meeting today. Rates may now increase at a slower pace over the remainder of the year, and AUD may struggle to recover amid external challenges The Reserve Bank of Australia today hiked rates by 50bp 2.35% Cash rate target +50bp As expected A hike today was never in doubt Today's 50bp hike in the cash rate target to 2.35% was comfortably the median expectation of forecasting analysts, though there were still a few who thought the Reserve Bank of Australia (RBA) might deliver a smaller 25bp hike. The logic for the smaller rate hike view stemmed from the language in the previous meeting's statement that there was no predetermined path for rates, though as it turned out, while that is probably true, it was not code to indicate a slowdown in the pace of tightening.  Now what? But now we are at 2.35%, which by some reckoning is close to a "neutral" rate that neither stimulates nor restricts the economy, there is a greater chance that rates may now continue to be raised at a slower pace. The latest statement to accompany today's decision repeats much of the text from the pivotal paragraph from August's meeting on future rate decisions. Namely: "The Board expects to increase interest rates further over the months ahead, but it is not on a pre-set path. The size and timing of future interest rate increases will be guided by the incoming data and the Board's assessment of the outlook for inflation and the labour market." This doesn't give much away and is essentially no change from August.    But one factor that may enable the RBA to tighten at a more moderate pace from now on is the fact that unlike some other central banks, such as the US Federal Reserve, the RBA meets monthly, so 25bp hikes at each of the remaining meetings this year will still take policy rates to the lower end of a restrictive setting by the year-end. And given the lags from policy changes to the real economy and inflation, tightening in 25bp increments from now on may be viewed as prudent and limiting the risks of over-tightening and damaging the economy unnecessarily. Such an approach would give more time for the economy to show signs that it is beginning to respond to the RBA's tightening "medicine", though of course, if the economy and inflation do not respond satisfactorily, there is nothing to stop further 50bp hikes.  AUD remains vulnerable The RBA policy has not been a major driver of AUD moves since the start of the year and today’s quite muted reaction to the 50bp rate hike is another case in point. Incidentally, a switch to 25bp rate increases from now on may force some dovish re-pricing in the RBA rate expectation curve. As external factors – in particular risk sentiment and China’s outlook – remain key for the AUD outlook in the near term, downside risks are still quite elevated. Our forecasts for AUD/USD still embed a small recovery by year-end but are mostly justified by USD seasonal weakness in December and any rally may still struggle to go far beyond the 0.70 mark. Read this article on THINK TagsRBA rate policy RBA rate decision Australian economy Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
PLN Soars to Record Highs Ahead of NBP Decision

The Euro To US Dollar And An Excellent Entry Point For Short Positions

InstaForex Analysis InstaForex Analysis 06.09.2022 09:33
Several interesting market entry signals were formed yesterday. I suggest you take a look at the 5-minute chart and figure out what happened. In my morning forecast, I reversed the growth and a false breakout formed at this level led to an excellent entry point for short positions. However, despite the weak fundamental statistics and the continuation of the bear market, the pair recovered, which resulted in consolidating losses. A breakthrough and reverse test of 0.9909 gave a signal to buy, which led to the pair's growth by more than 40 points. The bears showed themselves around 0.9934 in the afternoon, forming a false breakout there and a sell signal. As a result, the pair fell by 20 points and that was it. COT report: Before talking about the further prospects of the EUR/USD movement, let's look at what happened in the futures market and how the positions of the Commitment of Traders have changed. The Commitment of Traders (COT report) for August 30 logged a decline in both short and long positions. If a week ago there was a surge in activity, now there has been a similar decline. This indicates a decrease in investor appetite for risk after the release of the eurozone inflation data, which once again rose to a high in the last ten years. The problem is exacerbated by the energy crisis, as the flow of gas through the Nord Stream is practically suspended - this is another increase in energy prices in the winter and upward inflation surges, which will force the European Central Bank to further raise interest rates and tighten belts. This week we are also waiting for the central bank's decision on interest rates, which may aggravate the euro's position against the US dollar. Even though the rate hike will be considered by investors as a signal for the growth of profitability, at the same time there will be a slowdown in economic growth, which is more important. So don't expect a serious euro recovery in the medium term. The COT report indicated that long non-commercial positions decreased by 8,567 to 202,258, while short non-commercial positions decreased by 5,000 to 249,934. At the end of the week, the total non-commercial net position remained negative and decreased to the level of -47,676 against -44,109, which indicates continued pressure on the euro and further fall of the trading instrument. The weekly closing price slightly recovered and amounted to 1.0033 against 0.9978. When to go long on EUR/USD: Today we do not have serious statistics in the first half of the day and people could only pay attention to the report on the volume of industrial orders in Germany and the index of business activity in the construction sector from IHS Markit. Both indicators may fall, but I do not expect serious pressure on the euro, as traders even ignored yesterday's weak data on the services sector. It looks like everyone is "charged" for the ECB meeting, which will be held this Thursday, so the demand for the euro in the short term will remain. In case of bad reports and a negative reaction, forming a false breakout in the area of the nearest support at 0.9941 will be a reason to open long positions. In this case, it will be possible to count on building a correction and updating the resistance at 0.9984. A breakthrough and test of this range would make it possible to get out of the bearish pressure, which will hit the stops, creating another signal for entry into long positions with the possibility of a larger move up to 1.0039. The farthest target will be the area of 1.0076, where I recommend taking profits. If the EUR/USD declines and there are no bulls at 0.9941, and moving averages are also passing there, playing on the bulls' side, the pressure on the pair will increase. This will bring up the 0.9910 update. From this level, I recommend buying also only on a false breakout. I advise you to open long positions on EUR/USD immediately for a rebound only from the annual low of 0.9879, or even lower - in the area of 0.9819, counting on an upward correction of 30-35 points within the day. ---- When to go short on EUR/USD: Bears received a significant rebuff yesterday and failed to offer anything even amid negative fundamental statistics. The reason for this may be the ECB's upcoming meeting, at which it is still not clear how much the central bank will raise interest rates: by 0.5% or 0.75%. A good option for selling would be a false breakout in the area of the nearest resistance at 0.9984, growth to which may occur after the release of a number of good fundamental statistics on Germany. All this will lead to the movement of the euro down to the area of 0.9941. A breakdown and consolidation below this range, as well as a reverse test from the bottom up, create another sell signal with the removal of bulls' stop orders and the resumption of the bearish trend with the prospect of updating 0.9910. Consolidating below this area is a direct road to the annual low of 0.9879, where I recommend completely leaving short positions. A more distant target will be the area of 0.9819. If EUR/USD moves higher during the European session, and there are no bears at 0.9984, we can expect a bigger push for the pair, as bulls retain control of the market. Then I advise you to postpone shorts until 1.0029. Forming a false breakout there will be a new starting point for entering short positions. You can sell EUR/USD immediately for a rebound from the high of 1.0076, or even higher - from 1.0127, counting on a downward correction of 30-35 points. Indicator signals: Moving averages Trading is conducted above 30 and 50 moving averages, which indicates a slight advantage of the bulls. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands A breakthrough of the lower border of the indicator in the area of 0.9910 will lead to a fall in the euro. Surpassing the upper limit of the indicator in the area of 0.9970 will lead to the growth of the euro. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.     Relevance up to 08:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320887
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The Pound To The US Dollar: A Chance For Bears To Further Pull Down The Pair

InstaForex Analysis InstaForex Analysis 06.09.2022 09:38
Several market entry signals were formed yesterday, but not all of them were profitable. Let's take a look at the 5-minute chart and figure out what happened. I paid attention to the 1.1476 level in my morning forecast and advised making decisions on entering the market from it. Growth and the forming a false breakout at 1.1476 there - all this led to a sell signal, which was not realized to the proper extent. A few more times the bears tried to keep the pair below this level, but in the end they accepted defeat, which led to the removal of stop orders and consolidating losses. A new signal to buy the pound was formed only in the afternoon, after a reverse test of 1.1487 from top to bottom, which eventually brought about 25 points of profit, which made it possible to cover past losses and earn some money. COT report: Before analyzing the technical picture of the pound, let's look at what happened in the futures market. An increase in short positions was recorded in the Commitment of Traders (COT) report for August 30, while long ones decreased. This once again confirms the fact that the British pound is in a major downward peak. Serious pressure on the pair will continue in the future, as the British economy is getting worse and worse, and GDP is shrinking quite quickly. The choice of a new prime minister of Great Britain will only provide temporary support to the pound, since, in fact, it does not change anything. In turn, the US economy continues to show strength, and recent data on the labor market once again convinced investors that the US central bank, led by Federal Reserve Chairman Jerome Powell, will continue to raise interest rates at an aggressive pace, which will only increase pressure on the British pound, which is experiencing quite a lot of problems lately. Expected high inflation and a looming cost-of-living crisis in the UK does not give traders room to take long positions, as a fairly large range of weak fundamentals is expected ahead, likely to push the pound even further below the levels at which it is currently trading. The latest COT report indicated that long non-commercial positions decreased by 306 to 58,477, while short non-commercial positions rose by 898 to 86,647, which led to a slight increase in the negative value of the non-commercial net position to -29,170 vs. -27,966. The weekly closing price collapsed from 1.1661 against 1.1822. When to go long on GBP/USD: Today we have almost no data on the UK, except for the report on the index of business activity in the construction sector from IHS Markit, which is unlikely to seriously affect the pound's volatility in the short term. Much will depend on the disposition of traders to risky assets after the announcement of the new prime minister of Great Britain, which became Foreign Minister Lisa Truss. In the near future, the reforms proposed by her may determine the further direction of the pair, since nothing good can be expected from the Bank of England. The defeat of Finance Minister Rishi Sunak speaks for itself. In case GBP/USD falls in the first half of the day after the reaction to the negative data on the UK, which is quite likely, the best scenario for buying will be a false breakout in the area of the nearest support at 1.1545, formed on the basis of yesterday. There are also moving averages, playing on the bulls' side. This will lead to a bounce up and a push to the 1.1613 area. We can only talk about the prerequisites for building a new upward correction for the pair after getting above this range. A breakdown of 1.1613, as well as a reverse downward test will open the way to 1.1685. A more distant target will be the area of 1.1754, where I recommend taking profits. If the GBP/USD falls and there are no bulls at 1.1545, the pressure on the pound will increase again, which will force the bulls to leave the market again, as the risk of further development of the bearish trend will become more real. If this happens, I recommend postponing long positions to 1.1494. I advise you to buy there only on a false breakout. You can open long positions on GBP/USD immediately for a rebound from 1.1446, or in the area of the low of 2020 at 1.1402, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Protecting the nearest resistance at 1.1613 is almost the most important task for today. Strong fundamental reports will help. In case the pair rises, forming a false breakout at 1.1613 will return pressure on the pound and form a sell signal in order to develop a further bearish trend and decline to the nearest support at 1.1545. This event will also keep the pair in a short-term horizontal channel with a lower boundary near the annual low, which will limit the pair's upward potential. A breakthrough and reverse test from the bottom up at 1.1545 will provide an entry point for short positions with a fall to a low of 1.1494. A more distant target will be the area of 1.1446, where I recommend taking profits. In case GBP/USD grows and the bears are not active at 1.1613, the situation will completely get out of the bears' control, and bulls will have an excellent chance of returning to 1.1685. Only a false breakout around 1.1685 creates an entry point into short positions, counting on a new downward movement of the pair. If traders are not active there, there may be a surge up to a high of 1.1754. There, I advise you to sell GBP/USD immediately for a rebound, based on a rebound of the pair down by 30-35 points within the day. Indicator signals: Trading is carried out above 30 and 50 moving averages, which leaves a chance for bears to further pull down the pair. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands A breakthrough of the lower border of the indicator in the area of 1.1480 will increase pressure on the pair. If the pair grows, the upper border of the indicator around 1.1610 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 08:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320891
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The Euro To The US Dollar Pair: There Is A Signal To Buy

InstaForex Analysis InstaForex Analysis 06.09.2022 09:44
Although a lot of macroeconomic data were published yesterday, they did not determine the course of trading. The central news of the day was Gazprom's decision to cut off gas supplies to Europe. As follows from the official statement, the cause is a breakdown, while it is not specified how long it will take to fix it. All this threatens Europe with shutdowns of enterprises and massive power outages. So it is not surprising that the single currency immediately collapsed by more than a hundred points. Then the situation on the markets stabilized somewhat, and there was a small rollback, the reason for which was precisely the macroeconomic statistics. Namely, retail sales in Europe, the rate of decline of which slowed down from -3.2% to -0.9%, with a forecast of -1.4%. It is clear that today the gas situation will remain the central theme that determines the course of events. Much will depend both on the statements of officials and the press service of Gazprom. If the company of course will make any statements. In any case, the single currency has no reasons for growth at the moment, and it will certainly not be able to rise above parity. Rather, on the contrary, some statements may contribute to another decline below 0.99, followed by a rebound. Retail sales (Europe): The EURUSD currency pair opened the new trading week with an intensive decline, during which the quote temporarily fell below 0.9900. Speculators failed to stay outside the control value, as a result of which a technical rollback occurred. The RSI H4 and D1 technical instruments are moving almost all the time in the lower area of the 30/50 indicator, which indicates a downward trend among traders in the market. The moving MA lines on Alligator H4 and D1 are directed downwards, which corresponds to the direction of the main trend. It should be noted that in the four-hour period the indicator signal is unstable due to the variable range. Expectations and prospects Despite the speculative activity, the quote is still within the range of 0.9900/1.0050. Thus, traders are guided by the borders of the flat, working according to the method of breakdown or rebound from the given values. Complex indicator analysis in the short-term and intraday periods have a variable signal due to the current flat. At the moment, there is a signal to buy due to a rollback from the lower border of 0.9900. Indicators in the medium term are focused on a downward trend.     Relevance up to 19:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320881
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

Australian Dollar (AUD) And British Pound (GBP) Are Diversified Considering The Vulnerability To Monetary Policies. Energy: Liz Truss' Plan

ING Economics ING Economics 06.09.2022 09:47
Relative equity performance is becoming a bigger driver of FX moves, and the energy crisis in Europe does suggest EUR assets will struggle to regain the market's confidence. Elsewhere, the RBA 50bp hike is no game-changer for AUD, while the pound will keep being driven by new UK prime minister Liz Truss' policy proposals ahead of next week's BoE meeting The pound is being driven by new prime minister Liz Truss' political agenda   We have just published our monthly update of FX views and forecasts: “FX Talking: This is going to hurt” USD: Equity divergence matters US markets re-open after a long weekend today and futures currently point at a slightly positive open in the Dow Jones, despite yesterday’s slump in European equities. Diverging US-European equity performance is becoming a relevant theme for FX as a driver of USD strength: in our EUR/USD short-term fair value model, the relative equity performance factor has seen its beta grow steadily since the start of July. Indeed, the ongoing energy crisis does suggest that it will take time to restore trust in European assets. In the past three months, the Dow and S&P500 are both down -5%, while the DAX has lost 13% and Euro Stoxx 9%. Expect a pick-up in volatility today after yesterday’s rather muted trading. On the data side, markets will focus on the US ISM Service index, which is expected to have dropped after July’s modest rebound. This is probably the most important piece of data before the CPI report on 13 September, and with markets still torn about the possibility of a 75bp Fed hike in two weeks (65bp is priced in), asset classes should prove quite sensitive to the release. There are no scheduled Fed speakers today, but we’ll hear from a plethora of members tomorrow and from Fed Chair Jerome Powell on Thursday. Barring a major dovish repricing in Fed rate expectations, the strong dollar story should remain broadly untouched this week, as the energy supply crisis keeps markets away from most European currencies and may fuel safe-haven flows further. As we’ve highlighted in recent notes, the yen’s role as a safe haven has been eroded by Japan’s worsening trade position, and the USD/JPY rally may have further to go until Japanese authorities intervene. Elsewhere in the APAC region, AUD had a relatively contained reaction to the RBA’s 50bp rate hike. As highlighted in our meeting review, a switch to 25bp rate increases now looks possible given the high frequency of RBA meetings, although that may be read as a dovish signal by markets and force some dovish repricing along the AUD curve. This, however, is far from being the biggest concern for AUD, which is set to remain heavily impacted by a challenging external environment. We don’t expect any AUD/USD recovery to go much further than 0.70 before the end of the year. Francesco Pesole EUR: Shrinking undervaluation Germany’s decision to keep two power plants open over the winter is a clear signal that the country had not managed to secure enough energy reserves before last week’s Nord Stream shutdown. Talks among EU members this week are set to be quite crucial, as a bloc-wide cap on energy prices, a windfall tax on energy companies’ profits, and potential intra-EU emergency gas flows are set to be discussed. The energy crisis is set to keep EUR/USD capped for now, despite the short-term swap rate differential having continued to widen in favour of the euro and is at the highest in six months. In our short-term fair value model, the growing relevance of equity dynamics (which have moved against the euro) in determining EUR/USD swings now mean that the undervaluation has shrunk from the 5.5% peak two weeks ago to around 3.5% now despite the pair having fallen to 20-year lows. The 0.9900 support appears to be a rather fragile one and was briefly broken yesterday, we could see 0.9850 or 0.9800 as the next key levels, although the worsening macro picture in Europe means that a further drop to the 0.9600-0.9650 supports cannot be excluded. Francesco Pesole GBP: Truss announces massive plan to fix energy bills The pound rallied this morning on the back of some reports that the new UK Prime Minister Liz Truss has drafted a £130bn plan to fix energy bills. The news appears to partially ease the market’s concerns (that have weighed on GBP) that Truss’ promised tax cuts would ultimately worsen the inflation picture. The pound is set to face further volatility in the coming days as Truss’ policy plans are outlined in greater detail and the Bank of England meeting (15 September) draws nearer. If tax cuts would likely argue in favour of larger BoE tightening, caps on energy bills might both reduce the risk of recession and trim inflation expectations: it will be interesting to see how the BoE addresses these policies. Yesterday, we heard some hawkish comments by MPC member Caroline Mann, and markets are closing in on pricing a 75bp move next week. However, it looks like Truss’ political agenda is what is driving the pound at the moment, and BoE tightening expectations are playing a secondary role. EUR/GBP is testing the 0.8600 support and may keep retreating on the back of encouraging news on the policy side. Francesco Pesole CEE: FX follows gas prices Today, we will see the traditional data set of industrial production, construction and foreign trade in the Czech Republic. The main topic is of course automotive production, which is holding back the whole sector. Leading indicators suggest that the situation did not improve in July either and we should see a further slowdown. The markets are dealing with the new gas price hike and so far it seems that yesterday's jump has been fully reflected in FX across the region, resulting in the expected weakness. However, risks remain and the gas story will be the main focus today. We still believe that further upward movement in gas prices will mainly hit the Hungarian forint, which has been copying the gas price in recent days with an almost perfect correlation. However, we also believe that the EU money theme should return to the headlines in mid-September, which should unlock the hidden potential of the forint. Although the initial reaction from the European Commission may not be 100% positive, our baseline assumes an agreement is found and the RRF money is released. On the other hand, the situation is escalating in Poland, where the government is likely to raise this issue and the upcoming elections may trigger an open conflict with the EU, which in turn spoils the prospects for the Polish zloty which should stay around 4.75 EUR/PLN in the rest of the year. Frantisek Taborsky Read this article on THINK TagsSterling FX daily Dollar CEE region Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The USD/CNH Pair Remains On The Bear’s Trend

The US Dollar To The Chinese Yuan Is Strong And Trading Is Upside

InstaForex Analysis InstaForex Analysis 06.09.2022 10:25
Technical analysis: USD/CNY has been trading upside as I expected. The momentum is very strong to the upside and I see no sign for the reversal. There is potential for the test of the main objective. Trading recommendation: Due to the strong upside momentum and no signs for the reversal, I see potential higher prices. Watch for the buying opportunities on the intraday dips with the upside objective at the price of 7.080. MACD oscillator is showing fresh upside momentum, which is another sign for the strong bull run. Key short-term support is set at the price of 6.890 Relevance up to 10:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291568                      
Chinese Stocks: Attractive Valuations Amidst Challenges and a Cyclical Recovery - 12.09.2023

(BBY) Bed Bath & Beyond Plunged! Central Bank Of Turkey Shocked Investors, Norges Bank Hiked The Interest Rate!

Swissquote Bank Swissquote Bank 19.08.2022 12:31
The Norwegian central bank raised the interest rates by 50bp yesterday and said that there will be a similar move in September, to tackle the soaring inflation in Norway. The Philippines hiked by 50bp as well, to cool inflation. The Federal Reserve (Fed) minutes released this Wednesday showed that the US will continue raising the rates and tightening the monetary conditions to bring inflation back toward the 2% level in the US. European Central Bank (ECB) The European Central Bank (ECB) board member Isabel Schnabel said that the eurozone inflation outlook has failed to improve since the rate hike in July and that she will favour another large interest rate hike next month, even as recession risks harden. But Turkey cut its rate by 100bp yesterday, although consumer prices rose 80% year-to-date, and near 180% since a year. USDTRY The USDTRY jumped past the 18, although the selloff remained under controlled because of central bank intervention. The US dollar index gained, the euro, sterling and yen weakened. Gold extended losses to $1750 on the back of a stronger US dollar, while crude oil rallied near 4% yesterday on 7-mio decline in US crude inventories last week. US stock indices closed slightly high on better-than-expected retailer earnings, and encouraging economic data, while the Bed Bath and Beyond dived 20% as Ryan Cohen exited his position. Watch the full episode to find out more! 0:00 Intro 0:30 Everyone hikes, Turkey cuts 4:51 US dollar extends gains against major peers 6:09 Bitcoin, Ethereum under pressure 7:01 Gold down, oil up 7:32 US equities consolidate on retailer earnings, data 9:00 Good Bye Bed Bath & Beyond Ipek Ozkardeskaya   Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Turkish #lira #TRY #Japan #inflation #USD #JPY #EUR #GBP #Target #HoneDepot #Lowe #earnings #crude #oil #gold #XAU #BBBY #meme #stocks #Bitcoin #Ethereum #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
ARM's US IPO Amidst Challenging Landscape: Will Investors Pay an ARM and a Leg?

EUR/USD. Results of the week. The gas issue and the greenback's return: parity loomed on the horizon again

InstaForex Analysis InstaForex Analysis 21.08.2022 16:02
Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The US dollar is again in high demand. The greenback regained lost positions against the euro and finally broke out of the price range of 1.0130-1.0280, within which it had been trading for almost four weeks. The parity level is on the horizon again, which serves as the key and strongest support level for the EUR/USD pair.     Let me remind you that the bears tested the strength of the price line of 1.0000 a little more than a month ago, on July 14th. Then the pair updated the 20-year price low, reaching 0.9953. But at the same time, the bears failed to gain a foothold below parity: they did not dare to hold short positions at such bottoms. The initiative was expectedly seized by EUR/USD bulls, having organized a fairly large-scale correction, which, however, ended fairly quickly. Traders did not break through the price ceiling around the 3rd figure. Although there was a corresponding attempt: amid a slowdown in US inflation indicators, bulls reached 1.0370. They stayed in this price area for only two days, after which the pair started to slide down again. It is noteworthy that the downward trend resumed with renewed vigor at a time when the growth of US inflation slowed down for the first time in many months. The latest releases on the growth of the consumer price index in the US, the producer price index and the import price index in the red zone. But traders interpreted the published figures in their own way: according to most experts, inflation in the United States is still too high, allowing the Federal Reserve to tighten monetary policy (albeit not at an aggressive, moderate pace). Moreover, the decline in the CPI in July was mainly due to a slowdown in the growth of energy prices (the cost of which increased by 32% after the highest growth in June, when a 42-year high of 41.6% was recorded). The structure of the report says that last month gasoline rose by 44%, while the increase was at the level of 60% in June (the high since March 1980). Natural gas prices are up 30% after climbing nearly 40% in June, the highest since autumn 2005. All other components of the CPI did not give up their positions in July and continued their upward movement. And although the further pace of the tightening of the Fed's monetary policy will depend on the incoming data, analysts have no doubt that at the September meeting the central bank will raise the rate by at least 50 points. And even this conditional "low" allows the Fed to be ahead of the European Central Bank, whose representatives are still discussing how much to increase rates in September - by 50 or by 25 points. In general, the worsening energy crisis in anticipation of the autumn-winter period serves as a heavy anchor for the pair. Despite the low growth of the European economy in the second quarter (0.7%), many experts are sounding the alarm, looking back at the growing cost of blue fuel. The price of gas in Europe is above the $2,000 mark, and today it has updated another multi-month record, reacting to the news flow from the Russian Federation.     Gazprom announced that the only Nord Stream turbine will be stopped on August 31 for repairs. According to preliminary data, the repair work will last at least three days. This means that for three days gas will not be supplied through this pipeline at all: the supply of blue fuel for this time through the Nord Stream will be completely stopped. Against the backdrop of this statement by Gazprom, stock prices for gas in Europe rose by 4.6% and for the first time since March they have overcome the mark of $2,700 per thousand cubic meters. According to Bloomberg, the cost of gas in the European Union is now about 12 times higher than usual at this time of year. At the same time, household and business spending is skyrocketing amid record price pressures. Bloomberg analysts note that Europe has already lost about half of its zinc and aluminum production due to high energy prices. And with the onset of the autumn-winter period, the situation is expected to worsen - fuel becomes too expensive for industrial use and energy production. That is, factories will close or suspend their activities. By the way, the latest reports of many research institutes (GfK, IFO, ZEW, PMI indices) reflected the growing pessimism of representatives of the European business environment - both about the current situation and about future prospects, especially with regard to the upcoming winter cold. It is obvious that in such conditions it will be difficult (if not impossible) for the ECB to tighten monetary policy at an aggressive pace. The Fed will be one step ahead of the ECB in this regard, and over time this gap will only increase. Therefore, even the first signs of a slowdown in the growth of US inflation did not break the dollar: after a corrective surge, the EUR/USD bears seized the initiative for the pair. At the same time, in my opinion, it is not worth considering the downward price targets located below the parity level now. EUR/USD bulls are not able to reverse the trend, but they are able to organize a corrective counteroffensive, especially around the key support level of 1.0000. Therefore, short positions should be considered only on corrective rollbacks, with targets of 1.0050 and 1.0010.   Read more: https://www.instaforex.eu/forex_analysis/319453
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Massive Collapse In Both Pairs The EUR/USD And The GBP/USD

InstaForex Analysis InstaForex Analysis 06.09.2022 10:04
Although a lot of macroeconomic statistics were released yesterday, markets were unaffected as players focused more on Gazprom's decision to cut off gas supplies to Europe. According to the official statement, there was a breakdown, so there is a need for additional repairs. This threatens Europe with shutdowns of enterprises and massive power outages. Unsurprisingly, the incident caused a massive collapse in both EUR/USD and GBP/USD. The situation only stabilized after the release of retail sales data on Europe, which declined by -0.9%. For future price movements, much will depend both on the statements of officials and the press service of Gazprom. Nevertheless, euro has little chance of increasing, and there is certainly no hopes of rising above parity. On the contrary, some statements may even contribute to another decline below 0.99, followed by a rebound. Retail sales (Europe): EUR/USD failed to break through the lower boundary of the range 0.9900/1.0050. As a result, there was an increase in the volume of long positions, which led to a rebound in prices. It can be assumed that, despite the prevailing downward sentiment among speculators, the market is still developing within the base of the medium-term trend. The best action to this is to work a rebound or breakdown relative to the given boundaries. In case of a breakdown, wait for a strong signal in the daily (D1) timeframe. GBP/USD continued to fall and came close to the 2020 low, where a local reduction in the volume of short positions occurred, which eventually led to a rollback. To prolong the main trend, it is necessary to keep the price below 1.1410 in the four-hour timeframe.     Relevance up to 19:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320883
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

More Information About Liz Truss' Plan May Make Markets Become Calmer

ING Economics ING Economics 06.09.2022 11:00
European curves react to higher energy prices and to news of fiscal support in the same way, by bear-flattening. More yield upside is to be expected when more spending is announced but at least a lot of the bad news is out already for gas supply When fiscal gets involved Even if it doesn’t require further borrowing, rates markets immediately saw the hawkish implications to Germany’s third relief package. In keeping with ever rising European Central Bank (ECB) hike expectations, the prevailing view seems to be that any measure that limits growth downside would also free the central banks’ hand in tightening policy further. There are actually few on the record comments to that effect in the eurozone but, in a period of hyper sensitivity to inflation, we wouldn’t be surprised to see more yield upside as other governments unveil their own support packages. Remember that this cycle's high in 10Y Bund yields is only 20bp away around 1.77%. Details on Truss' fiscal plans could amount to a reduction of uncertainty for markets One potential exception to that rule may be the UK. The run-up to Liz Truss being announced as Prime Minister has been a very difficult period for gilts. We’ve written already of the deadly combination of fiscal spending, monetary tightening, and foreign outflows for sterling bonds. The lack of clarity about the extent, funding, and inflationary impact of fiscal support during the leadership campaign may have exacerbated the sell-off in gilts. Actual details on her fiscal plans are starting to emerge,with Bloomberg reporting a potential cost of £130bn over 18 months to cap energy bills at £2,000 per houshold. In time, this could amount to a reduction of uncertainty for markets, and could be greeted with more stable performance for gilts. 10Y gilts have lagged international peers during the leadership campaign Source: Refinitiv, ING Central banks waiting in the wings Of course, central banks have played a role in the market’s sensitivity to fiscal headlines. The Bank of England (BoE) for instance has explicitly said more fiscal spending may force it into more aggressive tightening… but it could also be responsible for a further reduction in market uncertainty soon. Our, admittedly optimistic, take is that in addition to more details about fiscal measures in the coming days, next week’s BoE meeting should also clarify its reaction. Paradoxically, the more hawkish the BoE, the more likely it is to regain a Fed-like degree of control on its domestic rate market. The more hawkish the BoE, the more likely it is to regain a Fed-like degree of control on its domestic rate market The market reaction to a full cut-off of Nord Stream gas flow from Russian is another place where central banks’ hand can be clearly seen. The ECB for instance has encouraged market participants to think that it will react to realised inflation, most of which is energy-driven, rather than rely on its forecast. Fears of second-round effects also participate in this overreliance on energy price developments in rates markets. Even if we do think this may be an overreaction, this reinforces our view that the EUR swap and German curves will invert this winter. The whole EUR swap curve will soon be inverted, and the German curve is set to follow suit Source: Refinitiv, ING Today's events and market view Germany is scheduled to sell inflation-linked bonds and Austria will carry out auctions in the 3Y and 10Y sectors, but this will be eclipsed by syndicated sales from France (new 20Y) and Italy (new 13Y green bond) ,which we expect the price today. The duration impact should be non-negligible in illiquid markets but we surmise that this has been largely played out in the run-up to the deals. We wouldn’t be surprised to see the curve flatten after pricing. The Italian sale comes in a context of a shrinking greenium across sovereign, sub-sovereign, supranational, and agency bond markets. Data is on the light side in Europe with mostly construction PMIs from Germany and the UK to look out for. US PMI and ISM services should gather more attention. In particular, a decline in the price components would be greeted as further evidence that the Fed is on its way to meeting its inflation target. An improvement in the growth-relevant indicators might overshadow this however, with markets currently minded to take a hawkish implication to most releases and events. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Price May Fall Under 1.0660

A Bullish Outlook For The Dollar Index. The Importance Of The Rate Hike For The Euro

InstaForex Analysis InstaForex Analysis 06.09.2022 11:26
The euro seeks to wrap itself in favor of the gas problems faced by the countries of the eurozone. Most often, the EUR loses, but now there is a small chance for its short-term recovery amid a slowing USD rally. The greenback took a breather on the morning of Tuesday, September 6, to recover from a heady rally. This strategy has led to some decline from all-time highs against the euro, but it is still too early to draw conclusions. The threat of a recession looms over both currencies. Adding fuel to the fire is the high likelihood of a sharp rise in US interest rates. A short-term slowdown in the growth of the USD against key currencies and a slight subsidence against the European one was caused by expectations of statistical data on the index of business activity in the US services sector (ISM). According to preliminary estimates, this figure fell to 55.1% in August from 56.7% in July. Significant support for the US currency is provided by expectations about the rate hike by the Federal Reserve. According to analysts, the central bank is "at a low start" in this matter. At the same time, 62% of specialists include in prices its increase by an additional 0.75 percentage points, up to 3-3.25% per annum. In such a situation, the dynamics of the euro, which has to withstand the gas crisis in the eurozone, is in distress. At the beginning of this week, the euro fell by 0.7% to 0.9880. According to experts, this is the lowest figure in the last 20 years. The current energy crisis has seriously shaken the euro's position. The driver of this fall was the actions of the Russian authorities, who announced a complete suspension of the supply of natural gas through the Nord Stream pipeline. According to analysts, this will increase the economic problems of European businesses and households. Against this background, mass short positions on the European and British currencies were recorded. Experts fear that this trend will strengthen. According to currency strategists at ING Bank, "gas pressures sent the EUR/USD pair to new lows this year." Recall that earlier this week, the pair fell below 0.9900 for the first time since October 2002. According to ING economists, in the near future the EUR/USD pair will continue to fall to a new support level in the range of 0.9600-0.9650. However, this is an extremely low level for a pair, which threatens the existence of the single currency. The EUR/USD pair cruised near 0.9963 on the morning of Tuesday, September 6, winning back previous losses. However, experts warn against euphoria, as the dollar is ready to brace itself and continue its rally, displacing the euro. In such a situation, many analysts see a way out in a further increase in the key rate by the European Central Bank. However, ING economists do not agree with this, who consider it excessive to raise the rate by the central bank by 75 bps at once. According to experts, this will not solve the current problems of the eurozone. ING bank believes that the rate hike by 75 bps at the next meeting, scheduled for Thursday, September 8, is "too big a step for the ECB, which will not help the euro." You should expect it to increase by 50 bps, analysts conclude. Expectations about a sharp rate hike by the ECB (by 75 bps) are fueled by growing inflation in the euro area, the threat of a recession and disappointing macroeconomic data for the region. The icing on the cake was the deepening of the energy crisis in Europe. This undermines the demand for a single currency, experts emphasize. According to current reports, in July, retail sales in the euro area fell by 0.9% in annual terms. At the same time, markets expected a decline of 0.7%. In addition, the Sentix investor confidence index fell to -31.8 points in September from -25.2 points in August. Against this backdrop, Sentix analysts noted a "clear deterioration" in the economic situation in the eurozone, stressing that this is the lowest rate since May 2020. The US currency continues to benefit from the current situation, despite a short-term subsidence. Many experts agree on the long-term upward trend of the dollar, which has been observed since mid-2021. Experts believe that a significant divergence in the monetary strategies of central banks is a significant driver of the growth of the USD against the euro. It is noted that the ECB is still "two steps behind the Fed" in terms of raising rates. The situation was not saved even by its increase by 50 points in July. However, the ECB may revise its strategy and raise the rate at the next meeting by 50-75 bps. Another important factor in the greenback's growth is the stability of the US economy. According to analysts, the US is relatively easy to survive the gas crisis, while selling energy to Europe. In the long term, this state of affairs plays against the ECB and the countries of the European bloc, but it plays into the hands of the Federal Reserve. In such a situation, it is difficult for the ECB not only to raise, but also to keep rates at a high level, unlike the Fed. Under such a scenario, a deep economic downturn in the eurozone is possible, experts warn. The current market environment creates a bullish outlook for the dollar index (USDX). Currently, the bulls on the dollar are in a strong position, pushing the bears. However, the situation may change at any time. In the short and medium term, analysts allow it to rise to an impressive 120 points, that is, an increase of 9%. In a favorable scenario, USDX will head towards the peaks of 2001-2002. However, experts consider this option extreme, although they allow its implementation until the end of 2022.     Relevance up to 08:00 2022-09-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320889
The Gold Rally Is Continuing To Stall, This Could Be A Good Year For Crude Oil

Gold With The Selling Opportunities On The Intraday Rallies

InstaForex Analysis InstaForex Analysis 06.09.2022 11:35
Technical analysis:   Gold has been trading upside in the background but I found strong rejection of the important resistance at the price of 1.725, which is good ign for further downside rotation. Trading recommendation: Due to strong rejection of the key resistance at the price of $1.725, I see potential for the downside movement. Watch for the selling opportunities on the intraday rallies with the downside objectives at the price of $1.709 and $1.690. MACD oscillator is showing bear divergence, which is another sign for the further downside rotation. Key short-term resistance is set at the price of $1.725     Relevance up to 10:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291570
The Bitcoin Fall Will Likely Continue In The Future

What Potential Will Bitcoin Show Today? To Buy Or To Sell?

InstaForex Analysis InstaForex Analysis 06.09.2022 11:41
Technical analysis:   BTC/USD has been trading sideways in the trading range at the price of $20.000 but I see potential for the breakout mode. Trading recommendation: In case of the downside breakout of the support at the price of $19.500, watch for selling opportunities with the downside objective at the price of $18.000 In case of the upside breakout of the resistance at the price of $20.500, watch for buying opportunities with the upside objective at the price of $21.700     Relevance up to 10:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291572
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

The Gas Price Is Recovering And The Euro And British Pound Are Strengthening

InstaForex Analysis InstaForex Analysis 06.09.2022 11:48
Details of the economic calendar for September 5 Data on indices of business activity in the services sector in Europe and the UK were published, which came out worse than expected. Details of statistical indicators: Eurozone services PMI fell from 51.2 to 49.8 points against the expectation of 50.2 points. The composite index fell from 49.9 to 48.2 points. The euro was already heavily oversold at the time of the release of the data, so it was difficult to fall further. UK services PMI fell from 52.6 to 50.9 points, with forecast of a decline to 52.5 points. The composite index fell from 52.1 to 49.6 points. The pound sterling, like the euro, was oversold; there was no reaction to the statistics. Data on retail sales in the euro area were also published: its rate of decline slowed down from -3.2% to -0.9% YoY. Despite the fact that the data came out worse than expected (-0.7%), the euro ignored them. The reason for the lack of response to statistical indicators arose due to the commodity market. Yesterday, with the opening of trading, there was a sharp increase in the cost of gas in Europe, which jumped by 30% to $2,800 per thousand cubic meters. The reason for the increase in the cost of gas lies in the message of Gazprom on Friday evening that the maintenance of the only working turbine of SP-1 revealed "gross violations" and the gas pipeline will not work without their elimination. Speculators worked out this information flow in the form of a sell-off of the euro, where, through a positive correlation, it followed the euro and the pound sterling. As soon as the price of gas began to recover relative to the morning jump, the euro began to strengthen, followed by the pound. Analysis of trading charts from September 5 The EURUSD currency pair opened a new trading week with an intensive decline, during which the quote temporarily fell below 0.9900. The speculators failed to stay outside the control value, which resulted in a technical pullback. The GBPUSD currency pair, through a positive correlation with EURUSD, first rushed down, almost reaching the 2020 low, and then moved into the pullback stage. Economic calendar for September 6 The United States is coming off a three-day holiday today, and service sector PMI data will be released. In the UK, data on the index of business activity in the construction sector will be released, where they predict its decline. Not the best signal for the pound sterling, but it is worth considering that it is already oversold in the market. Time targeting: UK Construction PMI (Aug) – 08:30 UTC US Services PMI (Aug) – 13:45 UTC Trading plan for EUR/USD on September 6 Despite the speculative activity, the quote is still within the range of 0.9900/1.0050. Thus, traders are guided by the borders of the flat, working according to the method of breakdown or rebound from the given values. Trading plan for GBP/USD on September 6 With the pound losing more than 800 pips in value in three weeks, a pullback/correction was brewing in the market due to short overheating. In this situation, holding the price above 1.1620 will lead to the subsequent strengthening of the pound towards 1.1750. As for the prolongation of the downward trend, it is necessary to keep the price below the value of 1.1400 in the daily period. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.     Relevance up to 09:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320915
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

The Euro To The US dollar Pair May Move Upward

InstaForex Analysis InstaForex Analysis 06.09.2022 12:04
Trend analysis (Fig. 1). The euro-dollar pair may move upward from the level of 0.9978 (close of yesterday's daily candle) to 1.0011, the 23.6% retracement level (white dotted line). Upon reaching this level, a continued upward movement is possible with the target of 1.0042, the 21-period EMA (thin black line). When testing this level, the price may move downward to 1.0002, the 13-period EMA (thin yellow line). From this level, the price may move up. Fig. 1 (daily chart). Comprehensive analysis: General conclusion: Today the price may move upward from the level of 0.9978 (close of yesterday's daily candle) to 1.0011, the 23.6% retracement level (white dotted line). Upon reaching this level, a continued upward movement is possible with the target of 1.0042, the 21-period EMA (thin black line). When testing this level, the price may move downward to 1.0002, the 13-period EMA (thin yellow line). From this level, the price may move up. Alternative scenario: from the level of 0.9978 (close of yesterday's daily candle), the price may move upward to 1.0011, the 23.6% retracement level (white dotted line). When testing this level, a downward movement is possible towards the support level 0.9951 (thick blue line). When testing this level, the price may move up.     Relevance up to 10:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320923
The EUR/AUD Pair May Have The Potential To Continue Its Decline

What Transactions In The EUR/USD Pair Look Like Today?

InstaForex Analysis InstaForex Analysis 06.09.2022 12:08
Analysis of transactions in the EUR / USD pair Euro tested 0.9916 at the time when the MACD was far from zero, which limited the upside potential of the pair. Sometime later, it tested the level again, but this time time MACD line was in the overbought area, which was a good signal to sell. Sadly, there was no price decrease and no other signals appeared for the rest of the day. Euro only fell slightly despite the weaker-than-expected report on business activity in the services sector of Germany, Italy and the eurozone. In addition, volatility was limited as it was Labor Day in the US. A number of reports are scheduled to be published today, such as the volume of industrial orders in Germany and the index of business activity in the construction sector. Considering how the market ignored the data on composite PMI yesterday, it is likely that today's indicators, even if they turn out to be worse than expected, will not affect euro. Then, in the afternoon, data on business activity in the services sector and PMI for the US will be released, which will hit the positions of dollar and may lead to a rise in risk appetite, provided that the figures are lower than the forecasts. For this reason, expect growth and upward correction in EUR/USD. For long positions: Buy euro when the quote reaches 0.9987 (green line on the chart) and take profit at the price of 1.0030. A rally will occur only if statistics in the Euro area, especially in the construction sector, exceed expectations. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9949, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9987 and 1.0029. For short positions: Sell euro when the quote reaches 0.9949 (red line on the chart) and take profit at the price of 0.9894. Pressure will return if statistics in the Euro area come out lower than the forecasts, while data in the US exceed expectations. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 0.9987, but the MACD line should be in the overbought area, as only by that will the market reverse to 0.9949 and 0.9894. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 09:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320900
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The GBP/USD Pair: The Price May Move Upward Or Move Downward?

InstaForex Analysis InstaForex Analysis 06.09.2022 12:11
Trend analysis (Fig. 1). The pound-dollar pair may move upward from the level of 1.1513 (close of yesterday's daily candle) to 1.1565, the 14.6% retracement level (blue dotted line). When testing this level, a continued upward movement is possible to 1.1643, the 23.6% retracement level (blue dotted line). From this level, a downward pullback is possible. Fig. 1 (daily chart). Comprehensive analysis: General conclusion: Today the price may move upward from 1.1513 (close of yesterday's daily candle) to 1.1565, the 14.6% retracement level (blue dotted line). When testing this level, a continued upward movement is possible to 1.1643, the 23.6% retracement level (blue dotted line). From this level, a downward pullback is possible. Alternative scenario: from the level of 1.1513 (close of yesterday's daily candle), the price may move upward to 1.1608, the 8-period EMA (thin blue line). When testing this level, a downward movement is possible to 1.1560, the 261.8% Fibonacci retracement level (red dotted line). Upon reaching this level, the price may resume moving upward with the target of 1.1643, the 23.6% retracement level (blue dotted line).       Relevance up to 10:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320929
FX Daily: Testing the easing pushback

Matthew Ryan (Ebury) Comments On Forex Market And British Pound (GBP), Euro (EUR) And More

Matthew Ryan Matthew Ryan 06.09.2022 12:42
The euro seemed to be about to lock in a decent performance last week, buoyed by expectations of a hawkish ECB and a labour market report in the US that signalled to the Fed that pressures there may be easing. However, the announcement by Gazprom that it was cutting off gas supplies to Western Europe indefinitely late-Friday sent the euro, and indeed most currencies, tumbling against the dollar. This news brings the prospect of widespread shortages of energy in Europe closer to reality and has increased market jitters surrounding the possibility of a global recession.   An energy supply shock, while unemployment remains low and inflationary pressures are at record levels, poses an unusually difficult challenge for the ECB at its meeting on Thursday. Traders will be looking at a finally balanced decision between hiking interest rates by 50 or 75 basis points, as the Governing Council tries to make up for lost time. The gas shock last week adds even more uncertainty to the decision. Not much news out of the US in a holiday-shortened week, but the leadership contest to succeed Boris Johnson as UK prime minister may add some volatility to sterling. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 05/09/2022 GBP A raft of second-tier data points last week all came out stronger-than-expected in the UK: retail sales, house prices and mortgage approvals, as well as an upward revision to the manufacturing PMI. None of this was particularly helpful to sterling, which continued to track the euro down against the US dollar, but it does seem to indicate that people calling for an immediate recession have got a bit ahead of themselves.  Focus this week will be on the outcome of the leadership contest in the Conservative party. Should Liz Truss be announced as the winner, then the news may be positive for sterling, at least in the short term, given her focus on additional fiscal spending, more trade protectionism and, therefore, tighter monetary policy. This is a mix that has proven currency-positive, historically speaking, though it’s worth noting that at this point basically no one expects anything other than a Truss victory.  EUR Inflation data out last week confirmed that the ECB faces perhaps the toughest job of any of the world’s major central  banks. Inflation yet again surprised on the upside, in both the headline and core indices, and in both cases printed another all-time record for the Eurozone. The ECB meeting is perhaps the most critical this year. The inflation numbers are awful and the central bank is clearly behind the curve; at the same time, the energy shock that has resulted from Central Europe’s dependence on Russian gas is unlike that seen anywhere else.    Figure 2: Euro Area Inflation Rate (2013 – 2022) Source: Refinitiv Datastream Date: 05/09/2022 We think that the ECB will still hike by 75bps, as the level of rates in the Eurozone lags hopelessly behind its peers and economic reality, and there isn’t much that monetary policy can do to conjure up gas and alleviate shortages.  USD The key US labour report provided welcome relief to the Federal Reserve on Friday. While job creation continues apace, dispelling fears of a recession in the US, the labour force expanded and wages rose less-than-expected. This signals that labour demand remains hot, as confirmed by the JOLTS job openings report earlier in the week, but that it’s resulting more on an increase in the size of the workforce than on a wage spiral.    Figure 2: US Nonfarm Payrolls (2021 – 2022) Source: Refinitiv Datastream Date: 05/09/2022   Rates came down in the US as a response, and the week would have been a difficult one for the US dollar had it not been rescued just before New York closing time on Friday by that Gazprom announcement on the indefinite suspension of gas deliveries. CHF The Swiss franc has been on the back foot throughout most of the past few days. On Wednesday, the EUR/CHF pair returned back above the 0.98 level, although it gave up some of its gains later in the week as Russia’s energy saga entered into another chapter. The Nord Stream 1 gas pipeline is off again, this time indefinitely, leading some investors to seek safety in the safe-havens.  Nonetheless, growing expectations that the ECB will be more aggressive in policy tightening seems to be capping gains for the franc. While the SNB could follow with a similar-size increase of its own later this month, the gap in expectations for policy action in the medium term between the two has widened quite a bit recently, in favour of the euro. Looking ahead the franc is likely to continue to react to shifts in sentiment and monetary policy. This week’s ECB meeting and headlines regarding the energy situation in Europe will likely dominate trading.  AUD The Australian dollar depreciated sharply last week, with the AUD/USD pair trading below the level of 0.68, close to 2020 lows. With no major news last week, the strong US dollar and falling commodity prices weighed on the Australian currency.  This week will be an important week for AUD, with the Reserve Bank of Australia meeting on Tuesday and the second-quarter GDP data to be released the following day. Looking ahead to the bank’s meeting, markets expect the RBA to raise interest rates by 50 basis points. A smaller hike of 25bps is entirely possible, in our view, and could be negative for the Australian dollar, although markets will also be paying close attention to the bank’s comments on upcoming rate hikes. A hawkish tone indicating further rate hikes in the future, and that fighting inflation remains the bank’s priority, would be positive for AUD.  CAD The Canadian dollar depreciated against the US dollar last week, in line with the other major currencies, although it managed to end it as one of the better performers in the G10. Second quarter GDP data did not help CAD, as it showed that the Canadian economy grew at an annualised pace of 3.3%, below the Bank of Canada’s estimates and market expectations. The Bank of Canada is expected to deliver a 75 basis point rate hike at its meeting this Wednesday, a smaller rise than the previous one. While inflation remains high, macroeconomic activity data has started to show some signs of worsening, which is likely to justify the smaller move. Still, we expect the bank’s tone to remain hawkish and concerned about inflation. August employment data will also be released on Friday, which will be important for the Canadian dollar and expectations for future rate hikes. CNY The Chinese yuan fell to the lowest level since August 2020 against the US dollar this morning, with the USD/CNY pair seemingly heading towards the key 7.0 level. Increasing monetary policy divergence with the rest of the world, rather underwhelming domestic economic data and a series of worrying headlines, with the latest ones again focused on Covid, have weighed on the Chinese currency in recent weeks. Recently China imposed a lockdown on the country’s sixth largest city, Chengdu.  The zero-Covid push continues to threaten economic activity. While the PMI data suggests that the services sector sustained a decent expansion in August, both the Caixin and official data showed a contraction in manufacturing activity. There’s a myriad of factors to watch with regard to China in the near term. We’ll be keeping a close eye on the inflation data, with the gap between PPI and CPI price growth expected to have narrowed further in August.    To stay up to date with our publications, please choose one of the below: 📩 Click here to receive the latest market updates👉 Our LinkedIn page for the latest news✍️ Our Blog page for other FX market reports 🔊 Stay up to date with our podcast FXTalk Source: Worsening energy crisis knocks off euro in the last hours of Friday trading | (ebury.com)
The Pound (GBP) Will Probably Continue To Move Sideways

How Transactions In The GBP/USD Pair Look In Short And Long Position Today?

InstaForex Analysis InstaForex Analysis 06.09.2022 13:15
Analysis of transactions in the GBP / USD pair Pound tested 1.1484 when the MACD line was far from zero, which limited the upside potential of the pair. Sometime later, there was a test of the level again, but the MACD line was still at the area it was before so there was no large movement. No other signals appeared for the rest of the day. Pound did not move much yesterday despite the weak reports on the services and composite PMI in the UK. The reason was the manipulation of large players, which happened due to low volatility amid the holiday in the US. Today, a number of reports are scheduled to be published, such as the index of business activity in the UK construction sector. If the figure turn out to be better than expected, a slight increase in GBP/USD will be seen. In the afternoon, data on business activity in the services sector and PMI for the US will be released, which will hit the positions of dollar and may lead to a rise in risk appetite, provided that the numbers are lower than the forecasts. For this reason, expect further growth and upward correction in the pair. For long positions: Buy pound when the quote reaches 1.1597 (green line on the chart) and take profit at the price of 1.1657 (thicker green line on the chart). Growth will occur if activity in the construction sector exceeds expectations. Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1559, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1597 and 1.1657. For short positions: Sell pound when the quote reaches 1.1559 (red line on the chart) and take profit at the price of 1.1515. Pressure will increase if the attempt to consolidate at daily highs fails. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1597, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1559 and 1.1515. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.       Relevance up to 09:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320904
Gold Has A Chance For The Rejection Of The Support

Gold Will Be A False Breakdown Today? Tip For Using Stop Loss

InstaForex Analysis InstaForex Analysis 06.09.2022 13:25
Previous trading tips in gold pointed at a possible decrease in prices. The target of the move is the 2021-2022 low, which is $1675. Most likely, there will be a false breakdown today at the local support-resistance level of $1717. This means that short positions are the best option in the gold market. Set stop loss at $1726 and take profit on the breakdown of $1675. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks!       Relevance up to 09:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320899
US and European Equity Futures Mixed Amid Economic Concerns and Yield Surge

Demand For Platinum In the Automotive Sector Is Above 2018 And 2019 Levels

InstaForex Analysis InstaForex Analysis 06.09.2022 13:27
In the precious metals sector, platinum has struggled to capture the attention of investors. The precious metal managed to hold its critical long-term support at around $800 an ounce. The World Platinum Investment Council drew attention to the growing dichotomy in the market for platinum as a precious metal. According to the WPIC Platinum Quarterly report, the precious metal had a surplus of 349,000 ounces in the second quarter. The report says total surplus may increase to 974,000 ounces for the year, compared to a previous estimate of 627,000 ounces. The council noted that the outflow of funds from exchange-traded funds backed by platinum affected prices. However, despite the growing surplus, the market is still tight. Platinum remains undervalued by investors who only look at supply and demand factors. Investment demand has the most significant impact on demand for platinum, as the market experienced significant outflows in the second quarter. The report also noted that the outflow of ETFs outpaces the drop in supply by 8%. According to the WPIC, 89,000 ounces of platinum leaked from the ETF markets between April and June. The council said that the demand for bullion and coins is mixed, with purchases in North America rising to a new high of 292,000 ounces after quarantine. However, the weak yen in Japan prompted some investors to sell their physical metal. According to analysts, this year, the total demand for bullion and coins will fall by 47,000 ounces, which is 14% less than in 2021. In addition to investment demand, WPIC said that industry demand for platinum remains stable. And in the second quarter, automotive demand for platinum increased 8% to 50,000 ounces. Even with the global recession, demand for platinum in the automotive sector is above 2018 and 2019 levels. Platinum remains an important metal in automotive catalytic converters, which are used to remove harmful emissions from gasoline and diesel engines. Automotive demand makes up a significant portion of the platinum market. WPIC expects total industrial demand to fall 15% to 2.132 million ounces. At the same time, industrial demand continues to outpace global economic growth. Although there will be a significant surplus of platinum this year, demand from China remains a major surprise and a main driver of the market shortfall. WPIC noted that information on platinum imports to China is limited. However, they estimate that China received 1.3 million ounces in the first half of this year. However, this estimate is not included in the official supply and demand forecast. Significant levels of negative demand for ETFs and an outflow of stocks were enough to meet China's demand for imports and keep prices from rising. WPIC was able to test the demand from China: the current surplus will turn into a deficit. While platinum prices have fluctuated for most of 2022, the WPIC said that robust demand is expected to provide some support for the precious metal.     Relevance up to 10:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320919
Ethereum Could Drop Deeper As The Bias Remains Bearish

The Ethereum Crypto Is Currently Testing The Fibonacci

InstaForex Analysis InstaForex Analysis 06.09.2022 13:33
Technical outlook: Ethereum climbed through the $1,675 high during the early trading hours on Tuesday as was projected earlier. The crypto is seen to be trading close to $1,665 at this point in writing and is expected to push through $1,745 and up to $1,800 in the near term. As projected on the 4H chart here, the resistance zone is seen through the $1,800-05 area. Ethereum has already carved a meaningful downswing between $2,031 and $1,423 since August 14. The above drop is being worked upon and might retrace up to the Fibonacci 0.618 levels seen at about the $1,800 mark. Immediate price resistance is seen at $1,722 and a push higher will test $1,750 and above. The bears might be poised to come back in control thereafter. Ethereum is currently working to carve a counter-trend rally since printing lows at $1,423. The crypto is currently testing the Fibonacci 0.382 retracement of the above downswing and might correct lower. ETH is expected to resume towards $1,800 thereafter. Keep a watch at around $1,540 for intraday support. Trading plan: Potential rally through $1,800 against $1,400 Good luck!     Relevance up to 12:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291596
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

Continued Growth In Oil Prices May Put Pressure On The USD/CAD Pair

InstaForex Analysis InstaForex Analysis 06.09.2022 13:37
Market activity was noticeably lower than usual on Monday due to the holiday in the US. Local markets were closed and only electronic trading took place. Today, however, important economic data will be released, which fully reflect the negative situation in Europe. According to the data presented, business activity in the service sector of Germany, the Euro area and the UK showed a decrease, with Germany and the eurozone's level below 50 points. This indicates lack of growth in the sector, which is important for the Western post-industrial economy. Attention was also drawn to the retail sales report in the Euro area, which declined 0.9% y/y and 0.3% m/m in July. The data prior to this was revised upwards to -1.0%. In the wake of all these events, as well as the resumption of growth in oil prices in response to the unexpected decision of OPEC to slightly reduce the volume of production in order to keep prices near $100 per barrel, the European stock market lost all its positiveness and finished trading in different directions. The gloomy outlook for the European economy is back in the spotlight after the release of weak service PMI data. Additional negative was the decision to continue deliveries of natural gas to Europe only after the lifting of sanctions. This means that energy crisis can develop after the collapse of local industry, then proceed into a full-scale crisis with social consequences. In terms of the forex market, nothing significant happened yesterday because of low trading volatility. The ICE dollar index, having tested the 110-point mark, failed to gain a foothold above, and is currently below this level. It is likely that players are anticipating the outcome of the ECB meeting this week, as well as the speeches of Christine Lagarde and Jerome Powell. Today, the RBA raised its key interest rate by 0.50% to 2.35%, but did not cause any special movement in pairs with the Australian currency. Ahead are reports on business activity in the construction sector of Germany and the UK, as well as the index of purchasing managers for the non-manufacturing sector of the US. The dynamics can set the tone for trading not only in the US, but also on other world trading floors. But there is a chance that the current situation is just the calm before the storm, which may arise after the ECB meeting and release of GDP data from a number of economically developed countries. Forecasts for today: EUR/USD The pair is consolidating below 0.9975. A break of this level may lead to further growth towards 1.0050. USD/CAD The pair is trading below 1.3135. Continued growth in oil prices may put pressure on it, which will push the quote to 1.3065.       Relevance up to 09:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320908
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EUR/USD Is Vigilant To The Highly Awaited Jerome Powell's (Fed) Speech. Rise Of Monthly Bond Sales Could Make Stock Market Decrease By Over 20%!

Alexander Boltyan Alexander Boltyan 06.09.2022 14:21
The head of the Federal Reserve (Fed) Jerome Powell is expected to deliver a speech on Friday at Jackson Hole annual symposium. Investors are completely focused on Powell’s testimony mostly ignoring incoming macroeconomic data. However, some economic data was a matter of concern. Shocking PMI Prints PMI indexes in the United States and in some other countries came out shocking as Services PMI in the U.S. dropped in august to 44.1 points, while Production PMI in the United Kingdom fell to 46.0 points. The3se are worst reading since 2020. PMI’s in other countries with a minor exclusion are pointing to a global economic slowdown. Some positive tunes were brought by the Q2 2022 second GDP estimate in the U.S. and Germany. Estimates were upgraded to -0.6% from the previous -0.8% in America and to 0.1% from 0.0% in Germany. This could hardly comfort investors, but together with lower Initial Jobless Claims in the U.S. it leveled up the market before the weekend. Read next: Interest rates hiked. The most important indicators continue their downward trend| FXMAG.COM Stock Market Could Plunge! S&P broad market index lost around 2% this week. Major investment houses are warning its clients that a rise of monthly bond sales by the Fed to $95 billion in September would plunge the stock market by another 25-30%. Technical picture of the S&P 500 index demonstrates a downside patter of the index with primary target at 3900-4000 point. The U.S. stock market benchmark fell below the support at 4220 points close to the gap of the beginning of this week. It is quite possible this gap could be closed after Powell’s testimony. . During two previous week short positions for the 70% of targeted amount for S&P 500 index were opened at the average price at 4285-4290 points. The rest of the targeted volume would be used once new technical signals would emerge. The target area is located at 2100-2300 points that is expected to be reached by the end of 2022. Technical Analysis Suggest Brent Crude Oil Could Even Hit $50-60 Oil market is short of time to active an upside scenario with targets at $135-145 per barrel of Brent crude benchmark. There are no triggers for such a scenario to become real at the moment. Moreover, if Brent prices would close this week below $106 per barrel an aggressive downside formation could pressure prices to $75-85 per barrel, and even to the extreme targets at $50-60 per barrel by the end of November. So, the Powell’s speech at Jackson Hole could be the last chance for bulls to avoid this scenario. What Are Gold's Downisde Targets? Gold prices slightly rebounded from the support at $1700-1730 per troy ounce to $1760. However, it does not change much as the decision to open short positions has to be made in the first half of September either from $1800-1820 per ounce, or after prices drop below the support at $1700-1730. Both scenarios have downside targets at $1350-1450 per ounce.  Powell's Can Make EUR/USD Go Much Below Parity! EURUSD met its primary target at 0.99500-1.00500, and has missed a chance for a rebound. The pair is likely to continue diving deep below after it tested 0.99500 support level several times this week. Next week the euro may fell to 0.98500 is Powell’s speech would be disappointing. GBP/USD - It Seems It's Not The Best Moment To Start GBPUSD continues aggressive downside with the completed primary target at 1.18000-1.19000 with the remaining secondary targets at 1.15000-1.16000 that are becoming more as the Euro goes down. However, there are no good entry points to open any trade positions so far. Read next: ECB Will Continue To Hike Rates To Slow Inflation? | FXMAG.COM
Drastic shift in natural gas outlook

Gas Skyrocketed! BP Stock Price Increased! Liz Truss Has A Lot Of Challenges Ahead

Swissquote Bank Swissquote Bank 06.09.2022 15:34
The European natural gas futures jumped 30% yesterday, the euro fell further against a broadly stronger US dollar, and crude oil climbed above the $90pb mark, as OPEC decided to cut production by 100’000 barrels per day, to the August levels, as they wanted to ‘stabilize’ oil prices after the longest price decline since the beginning of the pandemic. For now, the barrel of US crude couldn’t clear the $90 resistance, as the US-Iran nuclear deal is still a possibility to boost supply, and no one really knows what could happen in the complex politics of the oil market. Also, the recession worries weigh on the demand outlook. The New PM Of United Kingdom - Liz Truss In the UK, Liz Truss won the PM race. Cable first fell to a fresh low, on the back of a broadly stronger US dollar, but the pair rebounded. The Reserve Bank of Australia (RBA) raised its policy rate by 50bp as expected today. China boosted stimulus.  The US is back from Labor Day holiday. US futures are in the positive, but winds could rapidly change direction. Watch the full episode to find out more! 0:00 Intro 0:30 Crude oil gains after OPEC cuts output, but gains remain limited 2:21 France joins Germany and UK in backing windfall taxes on energy companies 3:56 Pound digests Liz Truss victory 6:32 RBA lifts rates by 50bp, as China boosts stimulus 7:31 Is Chinese property crisis a risk for global financial markets? 9:44 What to watch today? Ipek Ozkardeskaya   Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #OPEC #Europe #energy #crisis #crude #oil #USD #EUR #GBP #inflation #UK #PM #election #Liz #Truss #RBA #AUD #rate #hike #China #stimulus #property #crisis #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Jing Ren Comments On USD/CHF, EURGBP And US 30 (Dow Jones)

Jing Ren Comments On USD/CHF, EURGBP And US 30 (Dow Jones)

Jing Ren Jing Ren 06.09.2022 08:07
USDCHF tests resistance The Swiss franc struggles as the Q2 GDP reading disappoints. The greenback has recouped all losses from its July sell-off and is testing the daily resistance at 0.9880. A combination of profit-taking and fresh selling may limit the upward extension. As the RSI returns to the neutrality area, 0.9740 is the first support and 0.9660 the bulls’ second line of defence. A bullish MA cross on the daily chart shows improved sentiment and may attract more buying in case of a pullback. A bullish breakout would lead to the double top at 1.0050. EURGBP grinds key resistance Sterling finds support as Liz Truss is set to be Britain's next prime minister. As the pair came to July’s high at 0.8680, a bearish RSI divergence suggests a deceleration in the rally. Strong pressure has been building up following the indicator’s repeated overbought signals. 0.8570 is a key support to assess the underlying strength. Its breach would trigger a liquidation towards the origin of a previous breakout at 0.8500. However, a bounce could clear this year’s high at 0.8720, paving the way for a potential bullish run. US 30 struggles for support The Dow Jones 30 slips as the Fed’s hike agenda may find comfort in a robust labour market. A quick bounce came to a halt at 32000 which indicates that the pessimistic mood still prevails. A bounce may only sustain itself if the bulls manage to push through the supply zone around 32000. Otherwise, traders may continue to see rebounds as opportunities to sell into strength. 31100 is the immediate support and its breach could send the index to 30550 near July’s lows, at the risk of putting an end to the summer recovery.
Gazprom Threathening To Cut Gas Transits Via Ukraine

Gas Flows Are Stopped, Siemens Doesn't Confirm The Issue Needs It, Europe Is Getting Ready

Mark Goichmann Mark Goichmann 06.09.2022 16:26
This week looks rather paradoxical  for the European gas market as it started with October Dutch TTF Gas futures prices surging to €245.92 per MWh from €214.67 per MWh at Friday’s close. This jump was expected as Russia’s Gazprom warned it would not resume gas deliveries via its Nord Stream 1 pipeline after the completion of three days of on-site technical maintenance on the pipe. The only turbine that was under maintenance from September 1 until September 3 was stopped due to oil leaks and is expected to be returned to German Siemens energy, a maintenance contractor. Dmitry Peskov Accuses Sanctions Of Gas Flows Stoppage On this news gas prices surged with a gap on Monday. Russia’s president spokesman Dmirty Peskov blamed European sanctions that are supported by the United Kingdom and Canada for the lack of Russian gas supplies. And that is where the price paradox comes in as gas prices failed to reach a previous all-time high at €346.52 per MWh that was last seen at the end of August when Gazprom first announced the three-day maintenance works that would be conducted on the only turbine that pumps gas via Nord Stream 1. Siemens Says The Turbine's Issue Is Not Preventing It From Normal Operating Now the European gas market looks very different and, on September 6 Dutch TTF October Futures prices dropped below €217 per MWh, although they slightly recovered during midday on Tuesday. And these paradox price movements could be considered rather expected as Gazprom has lost its status as a reliable gas supplier as it is interrupting its gas flow.. Siemens Energy said that oil leaks do not affect normal pipeline operations and they could be taken care of on-site without much fuss. “Such leaks do not normally affect the operation of a turbine and can be sealed on site," Siemens Energy said in a statement. The company said it is prepared to conduct on-site maintenance once it has been asked to do so.    Read next: Interest rates hiked. The most important indicators continue their downward trend| FXMAG.COM   Europe Is Gearing Up So, it is clear that the Europeans were ready for such a situation to occur. Even a long-term complete shutdown of the Nord Stream 1 pipeline for any “technical” reasons would hardly contribute further to the negative impression that Gazprom has now created for itself as an unreliable supplier. Such a global shift in the attitude towards Gazprom has pushed the EU to push measures into motion which will diminish the dependency the union has on Russian pipeline gas supplies. A New Liquefied natural gas (LNG) terminal is emerging in EU ports as Europe increases LNG imports. Russian LNG supplies are growing too, as they are being resold by China. New interconnection pipelines between EU nations are being set into operation. Nuclear plants and coal power stations are being put back into operation. Steps towards green energy transformation are also accelerating while some austerity energy savings measures in EU nation that suggest a decrease in energy consumption up to 15% are close to be implemented.  Meanwhile, the EU has filled up its gas storages up to 80% of its maximum capacity ahead of schedule. All these measures have capped gas prices and may continue to limit them to €190-240 per MWh this week.   Disclaimer: Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade.
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

Canadian Dollar (CAD): Bank Of Canada Is About To Hike The Interest Rate! What's Expected?

FXStreet News FXStreet News 06.09.2022 15:52
BoC will announce its interest rate decision on Wednesday, September 7. Markets expect BoC to raise its policy rate by 75 bps. CAD needs a hawkish surprise to outperform USD. The Bank of Canada (BoC) is widely expected to hike its policy rate by 75 basis points (bps) to 3.25% from 2.50% following its September policy meeting. In July, the BoC surprised markets with a 100 bps rate hike and acknowledged in its policy statement that it had underestimated inflation since the spring of 2021 mainly because of global factors. Furthermore, the bank noted that its intention to front-load rate increases was due to broadening and persistent inflation. While commenting on the policy outlook in the ensuing press conference, "our aim is to get rates to the top-end or slightly above neutral range quickly,” BoC Governor Tiff Macklem said. According to the BoC’s policy statement, the neutral range is between 2% and 3%. In the meantime, Statistics Canada reported on August 16 that inflation in Canada, as measured by the Consumer Price Index (CPI), declined to 7.6% on a yearly basis in July from 8.1% in June. Hawkish scenario In case the BoC goes against the market expectation again and delivers another 100 bps rate hike, this could trigger a significant reaction and provide a boost to the Canadian dollar. In that scenario, the CAD should easily outperform the euro and the Japanese yen due to the policy divergence between the respective central banks. Against the USD, CAD’s gains could remain limited with investors awaiting the August inflation data from the US before deciding whether to price in a 75 bps Fed rate hike later in the month. It’s worth noting, however, that even if the BoC decides to raise its policy rate by 100 bps, it could refrain from committing to such aggressive rate hikes in the future. Since there will not be a press conference this time around, the language in the policy statement will be scrutinized by investors. Neutral scenario The BoC could opt for a 75 bps hike, as expected, and say in its policy statement that it will adopt a data-dependent approach moving forward while reiterating its commitment to bring inflation back to its 2% target. Such a rate increase would lift the policy rate “slightly above” the upper limit of its neutral range. A neutral tone could make it difficult for the loonie to stay resilient against its American counterpart. Dovish scenario If the bank raises the policy rate by 50 bps, the CAD is likely to face heavy selling pressure. The BoC could acknowledge the slowdown in economic activity alongside softening price pressures and tilt toward a more conservative policy stance. The latest data from Canada revealed that Real Gross Domestic Product (GDP) expanded at an annualized rate of 3.3% in the second quarter. This print followed the 3.1% growth recorded in the first quarter and missed the market expectation of 4.5%. Among the three different scenarios listed above, the dovish is the least likely one. Major central banks remain focused on bringing down inflation at the expense of growth and the BoC is unlikely to react to a single CPI print. Meanwhile, markets are pricing in a terminal rate of nearly 4%. Hence, a 50 bps rate hike would be a very big dovish surprise even if it’s enough to lift the policy rate to the upper limit of the neutral range.
The Commodities Feed: China's 2023 growth target underwhelms markets

Rate Hike Didn't Turn AUD Upside Down. S&P 500 (SPX) Decreased By 0.41%, Nasdaq Lost 0.74%.

ING Economics ING Economics 07.09.2022 08:28
Surging bond yields won't help risk sentiment Source: shutterstock Macro outlook Global: US equities returned from their holiday yesterday, but the mood remained gloomy, with the S&P500 dropping 0.41% and the NASDAQ falling 0.74%. The session wasn’t particularly brutal. Both indices just fell at the open and stayed low. Equity futures remain in the red today, so the slow bleed in equities looks like it will continue today. However, given the sharp pick up in 2Y US Treasury yields (+11.6bp), it is a bit surprising that equities didn’t fall even more. 10Y yields also added 16bp, taking them to 3.349%. There is probably still some more upside here, but after these moves, we may see a bit of consolidation. Bond futures aren’t suggesting much direction currently. The EUR continues to lose ground to the USD, and EURUSD is now 0.9894. The AUD also took no comfort from yesterday’s 50bp rate hike from the Reserve Bank of Australia and has slid to 0.6729. At 1.1508, Cable is also well down and we are probably looking at a 1.14 handle before long. The JPY has also continued its ascent, rising to 143.24. It’s not clear what or how this dollar rampage will be ended. The USD is looking a bit overbought right now, so like bonds, we may see a pause in the carnage before too long. The CNY led the other Asia Pacific currencies in retreat yesterday, moving to 6.9545. G-7 Macro: European labour market and revised 2Q22 GDP figures are on today’s calendar, together with German July industrial production (-0.6%MoM fall expected). These are followed later by the US Trade numbers for July which are expected to show the trade deficit narrowing to USD70.2bn. Markets may withhold some of their firepower for tomorrow's ECB meeting.  Australia: At 0930 SGT, Australia releases its 2Q22 GDP numbers. We are looking for a slightly stronger than consensus 1.0%QoQ figure (consensus is 0.9%QoQ). Yesterday’s net export contribution and last week’s capex figures both indicate some upside to the consensus forecast. The GDP numbers won’t directly affect the RBA’s rate-setting thinking, but they will highlight the scale of the job that needs to be done to get inflation back down to target. China: China will release trade data today. We expect export growth to exceed import growth, leading to a trade balance of nearly USD100bn in August. Our expectation of almost no growth in imports reflects the weakness of the domestic economy, though the big trade balance could help support GDP growth slightly. Taiwan: Taiwan will also release trade data today. We should see a similar picture to that in Mainland China with exports growing faster than imports. The key detail to watch is semiconductor-related exports and imports. This is especially important for imports, which will provide a hint about the growth prospects of semiconductor exports that are so important for Taiwan’s economy. Korea: The current account balance recorded a surplus of USD 1.1bn in July but the goods trade account turned to a deficit of USD -1.2 bn, the first time it has done so since April 2012. This is mostly due to higher energy prices, but also, export growth slowed due to weak IT demand and weak exports to China.  In the financial account, domestic stock equity investments by foreigners declined for the sixth straight month, while bond investment continued its increase from January 2020. Japan: USDJPY slid to 143 for the first time since 1998. Rate differential widening is the main reason for this depreciation. The recent better-than-expected US data probably also pushed the yen weaker. USDJPY may show some correction this morning, but the trend direction is not likely to change any time soon. We expect there will be more verbal intervention but this is unlikely to be effective at this point. Japan’s last intervention to curb depreciation was in 1998 during the Asian financial crisis. Despite the yen’s rapid depreciation, we still don’t believe it will trigger a policy shift by the Bank of Japan. What to look out for: China trade data and ECB meeting Australia GDP (7 September) China trade (7 September) Taiwan trade (7 September) US trade balance (7 September) Japan GDP (8 September) Australia trade balance (8 September) ECB policy meeting (8 September) US initial jobless claims (8 September) Philippines trade (9 September) China CPI inflation (9 September) US wholesale trade (9 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Energy Crisis May Be Too Much For UK Economics, Australian Dollar (AUD) Loses As Risk Is Reduced

Energy Crisis May Be Too Much For UK Economics, Australian Dollar (AUD) Loses As Risk Is Reduced

Jing Ren Jing Ren 07.09.2022 08:27
AUDUSD struggles for bids The Australian dollar takes a hit as risk appetite continues to recede across markets despite the RBA’s 50bp hike. A bearish MA cross on the daily chart shows a deterioration in sentiment. A fall below the demand zone near 0.6800 has left the aussie vulnerable. A lack of buying interest may send the pair to the recent lows around 0.6680, which is a critical floor to keep the price afloat in the medium-term. 0.6830 is a fresh hurdle but rebounds have so far been opportunities to sell at a better price. USOIL tests critical floor WTI crude weakens due to lingering concerns over demand. The recent bounce has failed to clear the daily resistance at 109.00, given back all its gains instead by retesting the base at 91.50. As sentiment remains pessimistic, the path of least resistance might still be down. A bearish breakout would force the bulls to bail out and attract momentum sellers, exacerbating volatility in the process. A drop below the psychological level of 90.00 could extend losses beyond 85.00. A recovery may be brief with 97.20 as the first resistance.   UK 100 in limited recovery The FTSE 100 struggles as the UK's finances might over-stretch with the energy crisis. On the daily chart, the index is going sideways between two boundaries 7000 and 7640. A breakout on either side would dictate the next direction in the weeks to come. In the meantime, range trading could be the name of the game. The short-term recovery is heading up to 7380, but 7480 from a faded bounce could be a tough level to crack. On the downside, 7180 is the immediate support and 7050 a major level to test the bulls’ resolve.
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

The Japanese Currency Is Beginning To Follow The Trends Of European Currencies

InstaForex Analysis InstaForex Analysis 07.09.2022 08:39
  The Japanese yen began to fear the global crisis no less than European currencies. Yesterday, data on household spending for July showed a decrease of 1.4% against the forecast of -0.6%. On an annualized basis, growth decreased from 3.5% y/y to 3.4% y/y. Against the background of the strengthening of the dollar index by 0.39%, the yen weakened by 1.57%. On the upside, the price forcefully broke above the resistance at 141.08, opening a high target at 147.10, close to the price's all-time high in August 1998 (147.71). The Marlin Oscillator is high, but not overbought yet. On a four-hour scale, the price is rising significantly, the Marlin Oscillator is a bit restrained. It has all the conditions and grounds for entering the overbought zone. Nevertheless, a correction, a price respite on the way to the target of 147.10 is very likely, and the reversal area for a correction is not very high from the current price, around the level of 144.25 - between Fibonacci levels 261.8 and 271.0% of the growth branch on 2-8 August.   Relevance up to 04:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320997
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

What To Expect From The British Pound To The US Dollar Today?

InstaForex Analysis InstaForex Analysis 07.09.2022 08:42
Yesterday, the British pound briefly jumped to the target resistance of 1.1600, reversed from it and closed the day at the opening level, under the level of 1.1525. This morning the price is losing about 40 points, ahead of it is the target support at 1.1385. Overcoming it will open the 1.1305 target. The daily Marlin Oscillator is already quite low, but has the possibility of further decline. The probability of correction will significantly increase from the level of 1.1305. The price settled under the balance and MACD indicator lines on the four-hour chart, under the target level of 1.1525, the Marlin Oscillator also settled under the zero line, intending to continue its decline in the downward trend zone. We are waiting for the price at the first target of 1.1385.     Relevance up to 04:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320999
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

The EUR/USD Pair Is In Still Downward Trend? Further Decline In The Euro

InstaForex Analysis InstaForex Analysis 07.09.2022 08:49
As a result of yesterday, the euro fell by 26 points. After slight fluctuations, investors were inclined to think that the growth of the US ISM Services PMI in August from 56.7 to 56.9 against the fall of German manufacturing orders by 1.1% in July is more conducive to strengthening the dollar even amid its slight overheating. The price is approaching the first target level of 0.9850 on the daily chart, after which the 0.9752 target will open. The signal line of the Marlin Oscillator has overcome the support line of early convergence, now it can form when the price reaches the level of 0.9752. But it may not form at all due to the brewing of powerful social discontent in Europe. Since the beginning of September, local rallies have begun to take place in European capitals against the increase in utility tariffs. A 70,000-strong anti-government rally was held in Prague on September 3, less massive in Amsterdam. Alternative for Germany has scheduled the largest rally in Berlin on October 8 with the main demand for the launch of Nord Stream 2. In response, German Defense Minister C. Lambrecht announced the introduction of military patrols from October 1st, probably with the imposition of anti-COVID bans. British Prime Minister Truss yesterday proposed a £130bn freeze on public utilities and £40bn on small businesses. The nearest historical support for the euro in case of a negative development of the situation is at the level of 0.9607 - this is the low of September 2002. The price settled below the MACD indicator line on the four-hour chart, the Marlin Oscillator is developing in the downward trend area. We are waiting for a further decline in the euro.       Relevance up to 04:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321001
Further Downside Of The AUD/JPY Cross Pair Is Expected

What Shows On The Australian Dollar To The US Dollar Pair?

InstaForex Analysis InstaForex Analysis 07.09.2022 08:55
The last time we looked at AUD/USD on April 26, we supposed a corrective decline into the support area between 0.6490 to 0.6786. This area is now being tested and we could see a corrective low anytime now. To confirm that a corrective low is in place, we need to see a break above minor resistance at 0.7137 which would call for a new rally towards the S/H/S bottom neckline at 0.8040. A break above here will activate the bottom formation for a continuation higher to the 1.0255 target.   Relevance up to 06:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291702
The Euro May Attempt To Resume An Upward Movement

The USD Will Continue To Strengthen And The EUR/USD Pair Is Still Decline?

InstaForex Analysis InstaForex Analysis 07.09.2022 09:00
EUR/USD is still pushing lower and is testing levels not seen in the last 20 years. Does that mean the USD will continue to strengthen? We do not think that is the case. We are seeing weakness in the USD in form of a possible ending diagonal. A break above minor resistance at 0.9986 will be the first good indication that EUR/USD has bottomed out and a new impulsive rally is unfolding. A break above solid resistance at 1.0090 will confirm that EUR/USD has bottomed out, calling for a rally towards 1.0790 and ultimately much higher.     Relevance up to 06:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291709
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

The GBP/USD Pair Is Under Strong Downward Pressure And Continues To Decline

InstaForex Analysis InstaForex Analysis 07.09.2022 09:08
Early in the European session, the British pound is trading at around 1.1461. GBP/USD is under strong downward pressure. It is likely that if the pair continues to decline, a technical bounce could occur around the bottom of the downtrend channel at 1.1385. The British pound is trading below the 21 SMA and below -1/8 Murray. As long as it continues to trade within the downtrend channel, GBP/USD is expected to continue its decline and could reach the extremely oversold zone around -2/8 Murray at 1.1230. One factor that keeps the pound weak is that investors are concerned about a possible recession in the UK economy. According to the daily chart, the GBP/USD pair is entering oversold levels. So, a technical bounce is likely in the coming hours if the pound manages to consolidate above -1/8 Murray located at 1.1474. On the other hand, a sharp break of the downtrend channel formed since the beginning of August could offer a sustained recovery for the pound and it could even reach the 0/8 Murray area at 1.1718 and could even reach the 200 EMA located at 1.1862. Conversely, should the pound break the downtrend channel at around 1.1385, it could accelerate its decline below towards the zone of -2/8 Murray at 1.1230. Our trading plan for the next few hours for GBP/USD is to wait for its consolidation at around 1.1384 to buy or wait for it to consolidate above 1.1474 (-1/8 Murray) and above the 21 SMA around 1.1526 to buy. Above these levels, we expect the British pound to reach the levels of 1.1605 and 1.1718.       Relevance up to 06:00 2022-09-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291710
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Let's Have An Eye On Canadian Dollar (CAD) And Polish Zloty (PLN)! It's The Day Of Rate Hiking Across The Globe!

ING Economics ING Economics 07.09.2022 09:09
We expect the Bank of Canada to hike by 75bp and to maintain a hawkish tone for future tightening. In Poland, we see risks of a dovish surprise, as the NBP may only hike by 25bp and sound less hawkish after recent data. Elsewhere, good ISM data has reinforced Fed pricing and the dollar's momentum, while the risk of JPY intervention is rising significantly The Bank of Canada may raise rates by 75bp   We have recently published our monthly update of FX views and forecasts: “FX Talking: This is going to hurt” USD: Eyes on Fed speakers, and on the BoC's rate hike The dollar has remained bid since the start of the week, and was bolstered yesterday by a surprise rise (albeit marginal) in the US ISM service index. Our economist thinks yesterday’s figures endorse our 3%+ 3Q GDP forecast for the US. A solid growth story is indeed a key source of momentum for the dollar rally as markets feel increasingly confident with their pricing for more aggressive Fed tightening. A 75bp hike in September is almost fully priced in now (69bp are embedded into the swap market), but barring any big data disappointment, the room for any dovish re-pricing appears limited at this stage. The sharp underperformance of the Chinese yuan and Japanese yen has continued to fuel dollar strength too. This morning, a miss in Chinese trade data sent USD/CNY to test 9.9800, erasing efforts by the People's Bank of China to support the yuan. It remains to be seen how much Chinese authorities see 7.00 as a pivotal level: it’s possible that policymakers may want to keep USD/CNY below such a level, at least until the party congress is over. Further east, Japanese authorities are again trying verbal intervention as a way of supporting the yen, but markets appear quite happy with testing their tolerance. 145.00 might be the line in the sand: expect any FX intervention around the US or European open when markets are most liquid. Today, the Fed’s Beige Book will be scanned in search of regional economic trends, but the main focus will be on a few Fed speakers. Quite interestingly, we’ll hear from both sides of the spectrum: the quite dovish Lael Brainard and the hawk Loretta Mester. Both are voting members in 2022. Thomas Barkin is also due to speak today, while Chair Jerome Powell will deliver remarks tomorrow. For now, we see little reason to call for any reversion in the strong dollar pattern. The domestic story was fortified by yesterday’s data and there are no major data releases today, so ultimately the Fed pricing should not be too heavily affected even in the event of some dovish Fedspeak. DXY should remain around its highs. Elsewhere in North America, the Bank of Canada will announce monetary policy today. In our meeting preview, we highlight how the recent jitters to Canada’s growth story suggest another 100bp move is unlikely, but a 75bp rate hike (to 3.25%) is our base case considering that the employment picture remains rather strong and the BoC has remained firm in its intent to fight elevated inflation. 75bp appears to be the call from both economic consensus and the market, and we therefore think forward-looking language will drive most of CAD's reaction today. With “data-dependent, meeting-by-meeting” having become the leitmotiv of developed central bank policy communication lately, there’s surely a risk the BoC will refrain from offering any strong hint on future policy, but a reiteration that more substantial tightening is needed could be enough to see markets push their expectations for peak rates from the current 3.8% to 4%+. CAD is currently going through a rough period, and any support from the BoC today may fade rapidly. However, aggressive tightening by the central bank does raise the upside potential for the loonie beyond the short-term, when a stabilisation in sentiment and solid fundamentals may allow it to recover. We target a return to sub-1.25 levels in USD/CAD early next year. Francesco Pesole EUR: A bit of calm before the ECB? As of this morning, markets are pricing in 66bp of tightening by the European Central Bank at tomorrow’s announcement, but - as discussed in our economics team’s preview - our base case remains a 50bp hike. This obviously widens the scope for a further weakening of the euro later this week, but for today, some wait-and-see approach ahead of the big risk event could cap EUR/USD volatility, and the pair may enter tomorrow’s meeting from the 0.9900 level. A thread to keep an eye on this week aside from central bank activity is the ongoing discussion among EU members about solving the energy price problem. This may have particular relevance for the ECB as an EU-wide cap on energy bills would likely put a lid on inflation expectations, as well as offer a lifeline to the battered economic outlook. German Chancellor Olaf Scholz has continued to push for an agreement on price caps and stated yesterday that this could prove to be a relatively quick mechanism to implement. Francesco Pesole GBP: Expect more of the "Truss effect" The change of Prime Minister in the UK is most surely being felt by asset prices. Yesterday, gilts took a big blow, and the pound was the only G10 currency holding on to gains against a rising dollar as Liz Truss took office and reports about draft proposals piled up. So far, what we know is that Truss is planning a £130bn bill to freeze energy bills, to be paired with measures worth £40bn to support businesses. While Truss has also pledged to cut taxes in an effort to support the economy, it’s been reported that the new cost-of-living support packages would likely be funded by a bigger deficit instead of loans/grants to energy companies. All this matters for sterling not only because it has an impact on the growth outlook and Bank of England policy, but because it may have rather wide implications for the UK’s debt position. This is a factor that FX may start to be increasingly sensitive to especially in those instances (like the UK) where there is an increasingly negative current account balance. On the foreign policy side, it’s been reported that Truss is planning to ease the confrontation with the EU over post-Brexit agreements, and refrain from activating Article 16 of the Northern Ireland Protocol which allows the UK to unilaterally suspend parts of the agreement. This is undoubtedly a GBP positive, even though markets had not given a great deal of importance to the previous government’s standoff with the EU on Brexit. Today, expect more GBP volatility as details about Truss's plans continue to emerge. However, the net impact of support measures may not be too straightforward as they may easily get mixed in with the implications for BoE policy. EUR/GBP may edge back above 0.8600 today but seems to lack strong bearish momentum, while cable could re-test 1.1600. Francesco Pesole CEE: NBP slows hiking pace Today in the region we have the second estimate of GDP in Romania, which should show the details of the surprisingly strong economic growth in the second quarter. Also, we will see the release of industrial production in Hungary and Czech National Bank FX intervention data for July. We previously estimated that the CNB spent almost EUR11bn in July, almost half of all costs since mid-May. However, central bank activity since then has been almost zero by our estimates. Later today, we will see the highlight of the week in Central and Eastern Europe, the National Bank of Poland's decision. Our Warsaw team expects a 25bp rate hike to 6.75%, but a 50bp hike may also be on the table. The key though will be governor Adam Glapinski's press conference on Thursday which, given the latest economic data, should be dovish in any case. Markets are shifting rather to the hawkish side after the latest inflation number. So we think the market is expecting a clear response from the NBP to the surprisingly high inflation data and it will be very difficult for the central bank to meet hawkish expectations. Moreover, the NBP has surprised with a smaller step twice out of the last three meetings and in all three cases, it resulted in lower market rates. We think market conditions will lead to the same situation this time again. The Polish zloty is thus vulnerable both from the global environment due to the gas story this week and the domestic environment due to the dovish NBP. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Credit squeezing into central banks – what next?

The Euro In The Last Few Months Clearly Reflect What Is Happening In The Euro/Dollar Pair

InstaForex Analysis InstaForex Analysis 07.09.2022 09:11
EUR/USD 5M The EUR/USD pair fell again on Tuesday. However, this hardly surprises anyone. Despite the fact that in recent weeks the pair has been moving close to a flat or "swing", it still tends to fall and is close to its 20-year lows. And when the pair is trading near multi-year lows, then it cannot help but cling to them at least a bit. So it turns out that there is no pronounced downward trend (in the short term) now, but the pair is still updating its lows. Then the second breakthrough of the level of 0.9900 took place. It was not possible to consolidate below this level for a long time, however, we still have no doubt that the decline will continue. Only the European Central Bank, which will announce the results of its meeting this Thursday, can break this trend. An increase in the rate may for some time increase the demand for the euro. And yesterday, among the important macroeconomic data, we can only take note of the ISM index in the US, which reflected business activity in the service sector. The index rose again, although the similar S&P index continues to fall... There were few trading signals on Tuesday, but traders could earn very well. The first sell signal turned out to be strong - the price bounced off the critical line, after which it went down at least 100 points and overcame the level of 0.9900 along the way. However, after that, it nevertheless returned to the area above this level, and at this moment it was necessary to close short positions. Profits amounted to at least 50 points. The signal to buy should not have been worked out, since it was formed rather late. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For most of 2022, they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group decreased by 8,500, and the number of shorts decreased by 5,000. Accordingly, the net position decreased by about 3,500 contracts. This is not much, but this is again an increase in the bearish mood among the major players. After several weeks of weak growth, the decline in this indicator resumed. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 47,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. The euro has not been able to show even a tangible correction over the past six months or a year, not to mention something more. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 7. Energy crisis in the European Union. Is everything so bad? Overview of the GBP/USD pair. September 7. Liz Truss is the new British prime minister. What does this mean for the pound? Forecast and trading signals for GBP/USD on September 7. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair continues to be inside the 0.9900-1.0072 channel on the hourly timeframe, although it has already broken through its lower border twice. Formally, we have a "swing", but now this swing is already descending. We have no doubt that the euro will continue to fall, because the market does not react even to the very high probability of an ECB rate hike of 0.75% on Thursday. We highlight the following levels for trading on Wednesday - 0.9900, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9996) and Kijun-sen (0 .9973). There is still no level below 0.9900, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union will publish a report on GDP for the third quarter. From our point of view, this is an important report, but its potential value may not differ from the value of the second quarter and from the forecast value. In this case, the market will not react to it. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group   Relevance up to 02:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320989
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

The Growth Of The British Pound Still Can Not Count

InstaForex Analysis InstaForex Analysis 07.09.2022 09:15
GBP/USD 5M The GBP/USD currency pair resumed its downward movement on Tuesday. So far, the matter has not come to a new update of 2-year lows, but the price still remains in close proximity to them and from its 37-year lows. Since corrections must happen from time to time, we believe that this is exactly what has been observed in the last few days. The descending trend line eloquently indicates that the downward trend continues, so we have the right to expect a new fall in the British pound. However, the pound clearly does not need strong fundamental and macroeconomic reasons to continue to depreciate against the US currency. There were no important events on Tuesday, except for the ISM business activity index in the US. This report was published quite late, so the main drop was not related to it. No more interesting events in the UK this week. In regards to trading signals, things were poor, but effective. The price bounced off the critical line twice during the European trading session, forming two sell signals. After the first pair went down a little more than 30 points, after the second - 95. Since the nearest target level from below was located very far, it was not necessary to count on its development. This means that the second deal should have been closed manually in the late afternoon. It was possible to earn at least 60 points on it. The first short position was closed by Stop Loss at breakeven. COT report: The latest Commitment of Traders (COT) report on the British pound, released yesterday, turned out to be as neutral as possible. During the week, the non-commercial group closed 300 long positions and opened 900 short positions. Thus, the net position of non-commercial traders immediately increased by 1,200. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Therefore, the growth of the British pound still cannot count. How can you count on it if the market sells the pound more than it buys? And now its fall has resumed altogether, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 87,000 shorts and 58,000 longs open. The difference is not as terrifying as it was a few months ago, but it is still noticeable. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the "foundation" and geopolitics. If they remain as weak as they are now, then the pound may still be in a "downward peak" for some time. Also remember that it is not only the demand for the pound that matters, but also the demand for the dollar, which seems to remain very strong. Therefore, even if the demand for the British currency grows, if the demand for the dollar grows at a higher rate, then we will not see the strengthening of the pound. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 7. Energy crisis in the European Union. Is everything so bad? Overview of the GBP/USD pair. September 7. Liz Truss is the new British prime minister. What does this mean for the pound? Forecast and trading signals for EUR/USD on September 7. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair maintains a downward trend on the hourly timeframe. The British currency continues to fall in the medium term and so far there is no reason to believe that the pound's decline will end in the near future. If the euro has at least an ECB meeting that can support it this week, then the pound has nothing. We highlight the following important levels on September 7: 1.1411-1.1442, 1.1649, 1.1874. The Senkou Span B (1.1698) and Kijun-sen (1.1546) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. There are no major events scheduled for Wednesday in the UK and the US. Thus, the pair will have nothing to react to during the day, but now it does not need any events to move actively and in a trend. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320991
The Upside Of The EUR/USD Pair Remains Limited

The EUR/USD Currency Pair Is Showing Its Resilience By Not Dropping Significantly

InstaForex Analysis InstaForex Analysis 07.09.2022 09:20
Technical outlook: EURUSD dropped through the 0.9863 lows during the New York session on Tuesday before finding support. The currency pair is showing its resilience by not dropping significantly below the 0.9900 handle. It is seen to be trading close to 0.9895 at this point in writing and is expected to produce a counter-trend rally exceeding the 1.0085 initial resistance in the near term. EURUSD has produced a religious downtrend since January 2021 after printing highs at 1.2350. The bears have managed to remain in control dragging prices below 0.9870. Importantly, each low is quite shallow from the previous one, which is a potential reversal indicator towards 1.0365 sharply. EURUSD has further produced a strong bullish divergence on the daily RSI as prices collapsed to fresh swing lows lately, as highlighted on the daily chart here. This is a potential trend reversal indicator from near levels around 0.9850-60 and towards the 1.0365 and 1.0800 resistances going forward. We are looking higher from here. Trading plan: Potential rally towards 1.0365 and 1.0800 against 0.9800     Relevance up to 07:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291717
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The US Economy Continues To Show Strength, British Pound Will Testing The 2020 Low?

InstaForex Analysis InstaForex Analysis 07.09.2022 09:30
Several market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1613 level in my morning forecast and advised making decisions on entering the market from it. Before forming a false breakout at 1.1613, just a couple of points were missing. I was unable to enter the market for this reason. A similar situation occurred with the level of 1.1545, where I expected the pair to reverse and more active growth. Unfortunately, even before the test of this range, about 3-4 points were not enough, so I did not manage to buy the pound. The pressure on the pair returned in the afternoon after strong ISM reports, which led to a test and a false breakout in the 1.1497 area, where I advised buying the pound. As a result, the upward rebound amounted to more than 50 points. The bears managed to protect the resistance at 1.1549 closer to the middle of the US session, which led to a signal to sell further along the trend. As a result, the pound fell another 30 points. When to go long on GBP/USD: Today is quite an important day for the British pound, as there will be parliamentary hearings on the report of the Bank of England on monetary policy, as well as a speech by Bank of England Governor Andrew Bailey. It is clear that the central bank will have to further increase the pace of interest rate hikes, which will further complicate the situation in an economy that is struggling with an energy crisis, which translates into a crisis in the cost of living for the British. This can only increase the pressure on the pound, leading to new annual lows. In case GBP/USD falls and a negative reaction to Bailey's statements, forming a false breakout at 1.1459 will give the first signal to open long positions in anticipation of a correction to the 1.1509 area. A breakthrough and a downward test of this range may pull stop orders from speculative bears, which forms a buy signal with an increase to a more distant level of 1.1559, just below which the moving averages play on the bears' side. The farthest target will be the area of 1.1607, which we failed to cling to yesterday. I recommend taking profit there. If the GBP/USD falls further and there are no bulls at 1.1453, which is more likely, the pressure on the pair will increase. A breakthrough of this range will lead to the renewal of the next annual low. In this case, I advise you to postpone long positions until the next support at 1.1409 - a low of 2020, but you can act there only on a false breakout. I recommend opening long positions on GBP/USD immediately for a rebound from 1.1358, or even lower - around 1.1313, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Having coped with a rather important task of protecting the 16th figure, bears continued to pull down the pound and achieved a return to annual lows. It is likely that Bailey's speech today will have a bad effect on the pound, as statements about raising interest rates during the economy sliding into recession will clearly discourage traders from buying the pound again. Of course, it is best to act based on an upward correction. The optimal scenario for opening short positions on GBP/USD would be forming a false breakout at the level of 1.1509, a breakthrough to which may occur during Bailey's speech. This will make it possible to achieve a new sell signal and a return to the area of 1.1453. Only a breakthrough and reverse test of this range would provide a new entry point for short positions with a fall towards the 2020 low at 1.1408. A more distant target will be the area of 1.1358, where I recommend taking profits. In case GBP/USD grows and the bears are not active at 1.1509, there will be a chance for an upward correction, and bulls will have the opportunity to return to 1.1559, where the moving averages play on the bears' side. Only a false breakout there will provide an entry point into short positions, counting on a new fall in the pair. If there is no activity there, I advise you to sell GBP/USD immediately for a rebound from 1.1607, counting on the pair's rebound down by 30-35 points within the day. COT report: An increase in short positions was logged in the Commitment of Traders (COT) report for August 30, while long ones decreased. This once again confirms the fact that the British pound is in a major downward peak. Serious pressure on the pair will continue in the future, as the British economy is getting worse and worse, and GDP is shrinking quite quickly. The choice of a new prime minister of Great Britain will only provide temporary support to the pound, since, in fact, it does not change anything. In turn, the US economy continues to show strength, and recent data on the labor market once again convinced investors that the US central bank, led by Federal Reserve Chairman Jerome Powell, will continue to raise interest rates at an aggressive pace, which will only increase pressure on the British pound, which is experiencing quite a lot of problems lately. Expected high inflation and a looming cost-of-living crisis in the UK does not give traders room to take long positions, as a fairly large range of weak fundamentals is expected ahead, likely to push the pound even further below the levels at which it is currently trading. The latest COT report indicated that long non-commercial positions decreased by 306 to 58,477, while short non-commercial positions rose by 898 to 86,647, which led to a slight increase in the negative value of the non-commercial net position to -29,170 vs. -27,966. The weekly closing price collapsed from 1.1661 against 1.1822. Indicator signals: Trading is below the 30 and 50-day moving averages, which indicates further decline in the pair. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair goes down, the lower border of the indicator around 1.1453 will act as support. In case of growth, the upper border of the indicator around 1.1559 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.     Relevance up to 08:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321019
The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

The GBP/USD Market Is Dominated By The Bearish

InstaForex Analysis InstaForex Analysis 07.09.2022 09:35
Technical Market Outlook: The GBP/USD pair had managed to bounce 1.30% towards the nearest horizontal technical resistance seen at the level of 1.1622. However, on the very next day, the bears pushed the market back towards the swing low and all of the recent gains were erased. The momentum is negative again on the H4 time frame chart, so the larger time frame trend (daily and weekly) remains down until further notice. Please watch closely the market reaction for the level of 1.1410 breakout or bounce. Weekly Pivot Points: WR3 - 1.15513 WR2 - 1.15077 WR1 - 1.14791 Weekly Pivot - 1.14641 WS1 - 1.14355 WS2 - 1.14205 WS3 - 1.13769 Trading Outlook: The bearish domination is clear and there is no indication of down trend termination or reversal on the GBP/USD market. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame, so the downside move accelerated. The next long term target for bears is seen at the level of 1.1410 (2020 low). Please remember: trend is your friend. Relevance up to 08:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291731
The Price Of EUR/USD Pair Will Develop Sideways Movement

The Euro To The US Dollar: The Down Trend Will Continue

InstaForex Analysis InstaForex Analysis 07.09.2022 09:39
Technical Market Outlook: The EUR/USD pair has made a new swing low located at the level of 0.9865, but bulls are trying to bounce again as the Pin Bar candlestick was made at the end of the move on the H4 time frame chart. The momentum is negative and weak on the H4 time frame chart, so the bears are clearly in control again and they might push the price towards the lower levels. In order to terminate the down trend or at least make a correction, the bulls must break above the technical resistance located at the level of 1.0090 and 1.0122. In the longer term, the key technical resistance level is located at 1.0389. The whipsaw price action below the parity level continues. Weekly Pivot Points: WR3 - 0.9992 WR2 - 0.99454 WR1 - 0.99156 Weekly Pivot - 0.98988 WS1 - 0.98690 WS2 - 0.98522 WS3 - 0.98056 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue below the parity level. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the longer term, the key technical resistance level is located at 1.0389.       Relevance up to 08:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291729
PLN Soars to Record Highs Ahead of NBP Decision

Does The Euro To The US Dollar Decline Again Today?

InstaForex Analysis InstaForex Analysis 07.09.2022 10:25
Trend analysis (Fig. 1). The euro-dollar pair may move downward from the level of 0.9904 (close of yesterday's daily candle) to the target of 0.9864, the lower fractal (white dotted line). When testing this level, the price may move upward with the target of 0.9937, the 14.6% retracement level (white dotted line). After reaching this level, a continued upward movement is possible with the target of 0.9982, the 23.6% retracement level (white dotted line). Upon reaching this level, the price may move down. Fig. 1 (daily chart). Comprehensive analysis: General conclusion: Today the price may move downward from the level of 0.9904 (close of yesterday's daily candle) to the target of 0.9864, the lower fractal (white dotted line). When testing this level, the price may move upward with the target of 0.9937, the 14.6% retracement level (white dotted line). After reaching this level, a continued upward movement is possible with the target of 0.9982, the 23.6% retracement level (white dotted line). Upon reaching this level, the price may move down. Alternative scenario: from the level of 0.9904 (close of yesterday's daily candle), the price may move downward with the target of 0.9803, the 208.0% Fibonacci retracement level (blue dotted line). After testing this level, an upward movement is possible to test the lower fractal 0.9864 (white dotted line).           Relevance up to 08:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/321011
ByBit talks trading bots. What are they? How can they help?

The Bitcoin With Downside And The Selling Opportunities

InstaForex Analysis InstaForex Analysis 07.09.2022 10:30
Technical analysis: BTC/USD has been trading downside and I found the breakout of the multi day consolidation and first target reached at $19.000. I still see further downside movement. Trading recommendation: Due to the breakout of the multi day consolidation in the background and no big signs for the reversal, I see further downside movement. Watch for the selling opportunities on the rallies with the next downside objectives at the price of $17.700 and $14.000. MACD oscillator is showing fresh downside money flow, which is sign that sellers are in control. Key resistance is set at the price of $20.500     Relevance up to 09:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291754
The Pound (GBP) Will Probably Continue To Move Sideways

The GBP/USD Pair: Next Currency Pair Is Keeping The Downward Trend

InstaForex Analysis InstaForex Analysis 07.09.2022 11:04
Trend analysis (Fig. 1). The pound-dollar pair may move downward from the level of 1.1516 (close of yesterday's daily candle) to the lower fractal 1.1432 (blue dotted line). When testing this level, an upward movement is possible to 1.1566, the 14.6% retracement level (blue dotted line). In the case of testing this level, the price may continue to move upward with the target of 1.1643, the 23.6% retracement level (blue dotted line). Fig. 1 (daily chart). Comprehensive analysis: General conclusion: Today the price may move downward from the level of 1.1516 (close of yesterday's daily candle) to the lower fractal 1.1432 (blue dotted line). When testing this level, an upward movement is possible to 1.1566, the 14.6% retracement level (blue dotted line). In the case of testing this level, the price may continue to move upward with the target of 1.1643, the 23.6% retracement level (blue dotted line). Alternative scenario: from the level of 1.1516 (close of yesterday's daily candle), the price may move downward to 1.1421, the historical support level (blue dotted line). In the case of testing this level, an upward movement is possible with the target of 1.1566, the 14.6% retracement level (blue dotted line).       Relevance up to 08:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321015
The US Dollar To The Chinese Yuan Is Upside. The Potential Buying Opportunities

The US Dollar To The Chinese Yuan Is Upside. The Potential Buying Opportunities

InstaForex Analysis InstaForex Analysis 07.09.2022 11:08
Technical analysis: USD/CNY has been trading upside as I expected and the USD/CNY is heading towards major upside long term objective.I still see potential for further bigger growth. Trading recommendation: Due to the strong upside cycle in the background and no signs for the reversal, I see further growth. Watch for the potential buying opportunities on the intraday dips with the upside objective at the price of 7.080 MACD oscillator is showing fresh upside money flow, which is sign that the buyers are in control. Key support is set at the price of 6.889   Read more: https://www.instaforex.eu/forex_analysis/291757 Relevance up to 10:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291757
Prices Of Gold Rose For The Third Straight Session

What Kind Of Opportunities Gives Gold Today?

InstaForex Analysis InstaForex Analysis 07.09.2022 11:19
Technical analysis: Gold has been trading downside during the Tokyo session and the price has been reached my main downside objective at $1.690. Anyway, Gold reacted strongly from the support and now its on the way for the upside objective. Trading recommendation: Due to the strong rejection of the key support at $1.690, I see further upside movement towards next upside reference point. Watch for the potential buying opportunities on the intraday dips with the upside objectives at $1.709 and $1.717. Stochastic oscillator did show the bull divergence this morning, which is one of the reasons of the early morning rally. Key support is set at the price of $1.690   Relevance up to 10:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291759
Saxo Bank Podcast: The Upcoming Bank Of Japan Meeting, A Look At Crude Oil, Copper And More

The Japanese Yen Brought Closer To Its Worst Annual Performance Ever

InstaForex Analysis InstaForex Analysis 07.09.2022 11:26
The Japanese currency continues to depreciate against the US dollar. The closer the September meeting of the Federal Reserve, the worse the position of the yen becomes. Yesterday JPY set 2 anti-records at once. Historic fall The USD/JPY pair significantly accelerated its rise to the top on Tuesday. The quote soared by 0.6% and exceeded another 24-year high at around 143.28. What's more, yesterday's fall in the yen brought it closer to its worst annual performance ever. Since the beginning of the year, the yen has fallen against the dollar by almost 20%. This is more than in 1979, when the largest annual decline was recorded. Recall that this year the reason for the sharp weakening of the yen was the discrepancy in the monetary policy of Japan and the United States. At present, the Japanese central bank looks marginalized among its peers. While other central banks are raising interest rates to bring raging inflation under control, it has stubbornly kept the rate at extremely low levels. The Bank of Japan's dovish tactics are helping widen the gap between interest rates in Japan and the US, which is taking the most aggressive measures to combat inflation. In order to curb the rise in prices, this year the US central bank has already raised interest rates four times, twice by 75 bps. Now the market is evaluating the likelihood that in September the Fed will go for the third consecutive highest increase in the indicator, at 73%. Traders' confidence in the hawkish determination of US politicians is supported by optimistic US economic data. The index of business activity in the services sector for August was published on Tuesday. Last month, the indicator unexpectedly rose from the previous value of 56.7 to 56.9. This is much better than forecasts, as economists had expected to see the indicator drop to 55.1. Yesterday's statistics once again confirmed that the US economy, despite the rapid increase in rates, is still firmly on its feet. Therefore, at its next meeting, the Fed is likely to brush off the talk of a recession and follow the hawkish route at the same pace. This scenario puts an end to the yen. As the gap between Japanese and US interest rates widens, the JPY will continue to set anti-records. Where is the bottom? This morning the USD/JPY pair is still in a strong upward trend and is showing another achievement. The asset has broken through the level of 144. Analysts explain the current surge in quotes by a sharp increase in the yield of 10-year US Treasury bonds and a dovish statement by the BOJ. At the auctions in Tokyo, the yield of US Treasuries, inspired by positive US economic data, rose to its highest value since mid-June at 3.365%. Meanwhile, the yield on similar Japanese bonds approached 0.245%. This is very close to the upper end of the acceptable BOJ 0.25% trading range. Recall that earlier the Japanese central bank has repeatedly stated that it will not allow yields to rise above this value. Now, when the indicator is about to touch the key ceiling, the BOJ made another statement. On Wednesday, the BOJ announced that it is increasing planned purchases of Japanese government bonds as part of its regular open market operations from 500 billion yen to 550 billion yen. This decision greatly crippled the already weak Japanese currency and overshadowed its future prospects. The continuation of the USD/JPY pair rally is also evidenced by the technical picture. For now, the bulls are ignoring the overbought conditions of the RSI and are on their way to the rising resistance line since the end of April, which is in the 144.60 area. If bears continue to push to the upside of this level, the June and August 1998 peaks will be in focus. We are talking about the marks of 146.80 and 147.70 respectively.     Relevance up to 09:00 2022-09-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/321027
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

The Energy Crisis In Europe Puts Pressure On The Markets

InstaForex Analysis InstaForex Analysis 07.09.2022 11:36
Details of the economic calendar for September 6 The further aggravation of the energy crisis in Europe puts pressure on the markets, which does not allow the euro to move into the stage of a full correction. German Chancellor Olaf Scholz said yesterday that the energy crisis will last for several more years. This statement caused the euro to accelerate its decline. Meanwhile, UK's construction Purchasing Managers' Index (PMI) was published, which rose to 49.2 instead of the expected decrease from 48.9 to 48.0. However, the market ignored the statistics. During the American trading session, the US services Purchasing Managers' Index (PMI) was published, which fell more than expected from 47.3 to 43.7. Again, there was no reaction to the statistical data. Analysis of trading charts from September 6 The EURUSD currency pair is stubbornly trying to prolong the downward trend, as indicated by a number of attempts by traders to stay below the 0.9900 level in the daily period. There is no clear signal of prolongation for the Tuesday period. The GBPUSD currency pair, after a short pullback, again rushed down towards the local low of 2020 (1.1410). This move indicates the continuing downside mood among traders in the market. It is worth noting that the pound sterling has a positive correlation with the euro. Thus, we observe identical cycles in the market. Economic calendar for September 7 Today, the publication of the third estimate of Eurozone GDP is expected, where there will be no reaction in the market if the data coincides with the previous two estimates. If there is a discrepancy in the statistical data, then a speculative activity may appear depending on the indicators. Time targeting: EU GDP – 09:00 UTC Trading plan for EUR/USD on September 7 Market participants still expect the price to hold below 0.9900 in the daily period. This move will indicate the possibility of further weakening of the euro towards 0.9500. It is worth considering that a variable level of 0.9850 stands in the way of the downward cycle. Thus, a confirming signal about the downward move will be received after its breakdown. The upward scenario considers the absence of holding the price beyond the control values. In this case, another rebound is possible, with the price returning above the parity level. Trading plan for GBP/USD on September 7 In order for a signal to prolong the long-term downward trend to appear, the quote needs to be firmly held below 1.1400 in the daily period. In the opposite case, it is impossible to exclude the scenario of a price rebound from the 2020 low area with a subsequent amplitude of 1.1450/1.1600. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.   Relevance up to 10:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321035
The US Dollar Index Is Expected A Pullback Rally At Least In The Near Term

The Macro Factors Have Driven The Dollar To These Levels

ING Economics ING Economics 04.09.2022 10:54
Long positioning is probably the biggest challenge to a further dollar rally from current levels. Yet the juxtaposition of a very hawkish Fed against crumbling growth expectations in Europe and Asia looks set to see the dollar maintaining these lofty levels for the rest of the year In this article Long positions in the dollar are seen as the most crowded trade Macro factors continue to swing in the dollar’s favour Long positions in the dollar are seen as the most crowded trade Surveys this summer have seen fund managers reply ‘long dollars’ when asked what the most crowded trade in global financial markets currently is. Perhaps this should not come as a surprise given the trade-weighted dollar’s near 14% rise this year – with only limited corrections. True measures of dollar positioning remain hard to come by. Traditional gauges, such as net speculative positioning in FX futures markets, do not show extreme readings right now. However, scepticism is growing that this decades-old analytical tool accurately reflects the ever-changing list of participants in the FX market, including the growth of retail. An alternative to positioning data is to gauge sentiment in the FX options market. Here the ‘skew’ towards dollar call options (the right to buy dollars) remains quite stretched. But far from calling a turn in the dollar’s trend, in our opinion, this extreme bullish sentiment is well justified.  The 'risk reversal' or 'skew' for dollar call options remains quite stretched Source: Refintiv, INGDXY Risk Reversal is DXY-weighted of 3m risk reversal for relevant $ FX pairs Macro factors continue to swing in the dollar’s favour The macro factors that have driven the dollar to these levels are well-documented and remain firmly in place. The Fed is happy to remain very hawkish and drive rates deeper into restrictive territory. The Fed understands and indeed intends that US demand should slow to bring inflationary pressures into balance. Inverted yield curves and equity underperformance are typical of this late-cycle economy; it's an environment that typically sees the dollar outperform. These trends look set to dominate for the rest of 2022 and we do not see a dollar turn until the first quarter of next year if that. Equally the challenges posed by the energy crisis have taken their toll on the importers in Europe and Asia. We have documented how this has damaged the euro’s fair value. And the loss of trade surpluses in Europe and Japan now undermines the status of the euro and the yen as safe haven currencies now that the natural demand from their trade accounts has dwindled. Additionally, our team still feels that the ECB tightening cycle, rather than the Fed cycle, is more prone to being repriced lower. We look for the recent narrowing in yield differentials to reverse course. This should see EUR/USD remaining under pressure for most of the year, where the 0.95 level may well be tested. Inverted US yield curve typically occurs late in the economic cycle and is associated with a stronger dollar US 2-10 year yield curve versus DXY (RHS Inverted) Source: Refinitiv, ING  Source: https://think.ing.com/articles/monthly-fx-markets-dollar-rally-still-going/?utm_campaign=September-01_monthly-fx-markets-dollar-rally-still-going&utm_medium=email&utm_source=emailing_article&M_BT=1124162492 Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EUR: Testing 1.0700 Support Ahead of ECB Meeting

The Yen’s Weakness, The Idea Of Limiting Energy Prices

Saxo Bank Saxo Bank 07.09.2022 12:26
Summary:  The JPY slide accelerated yesterday and followed through overnight after US treasury yields rose in the wake of a stronger than expected August US ISM Services survey. Verbal intervention from Japan’s Ministry of Finance hardly registered on the market, which will need to see a steep retreat in yields or a shift in Bank of Japan policy to have any reason to stop pummeling the yen. FX Trading focus: Yen fall picks up pace on strong US ISM Services survey. NOK as Norway PM agrees in principle to price caps on energy. The sell-off was broad and deep yesterday and overnight in the wake of the stronger than expected US ISM Services survey, which saw relatively strong sub-components, including 61.8 on the New Orders and a Price Paid at a still elevated 71.5, with employment edging back into expansion at 50.2. This inspired a new local high in US treasury yields, with the 10-year benchmark surging above 3.3% and closing above all but two days during the brief mid-June spike in yields. The already tumbling yen was pummeled further for more losses across the board, and noise from Japan Ministry of Finance officials failed to make an impression for more than a few minutes. Chief Cabinet Secretary Matsuno said that “The government will continue to watch forex market moves with a high sense of urgency and take necessary responses if this sort of move continues.” And Finance Minister Suzuki chimed in that he is watching the yen’s weakness with “great interest”, according to a Bloomberg article. It will take more than great interest to stem JPY weakness if central banks continue to tighten and yields continue to rise – many billions of intervention would likely only slow the decline and make it more volatile, while the only way to more sustainably reverse the JPY’s slide would be through a shift in BoJ policy or a Fed that is in active easing mode. The latter is certainly not just around the corner. Elsewhere, the US dollar was stronger on the back of the ISM Services survey, briefly taking EURUSD to new cycle lows, but we seem to get a lot of backfilling with every surge higher in the US dollar, a fitful situation and possibly suggesting that its upside path is more difficult at these levels. Certaintly a key test ahead for the EURUSD pair itself tomorrow with the ECB Meeting, for which I have argued that President Lagarde and company need to surprise with a 100 basis point move if they want to make an impression. Likely, some break-through in the energy situation is the key ingredient needed to bring the Euro – and sterling – more relief and would outweigh any ECB moves or just about anything else for European currencies. This morning, Russian leader Putin is playing games ahead of the EU energy summit, saying that it is ready to turn on the gas again through the Nord Stream I pipeline if “they” will deliver turbines for driving gas flows and even said that Nord Stream 2 could be turned on at any time . This contradicts stories from just the day before that Russia is openly admitting to weaponizing gas flows. On the subject of energy price caps, the Norwegian Prime Minister Støre said that Norway is open to the idea of limiting prices, only warning against anything that would restrict output and leaving it to the key state-controlled oil/gas companies like Equinor for agreement on deliveries for short- and long-term contracts. Equinor’s share price is off hard recently and today, but NOK is absorbing this news quite well. NOKSEK should prove volatile among NOK crosses if the eventual outcome improves risk sentiment in Europe via lower gas prices, as SEK tends to trade with high beta to the EU outlook. Chart: NOKSEKNOKSEK sits across a couple of interesting themes for Europe – chiefly energy prices, which are a tremendous boon to Norway’s current account, but less so to NOK, which tends to struggle with weak risk sentiment and poorer liquidity conditions. Offsetting some of the windfall profits in gas has been the decline in oil prices from the June highs. The Swedish krona has traded weaker as Sweden is often viewed as an economy leveraged vis the country’s exports to the EU growth outlook. Any relief on the energy price front into Europe might be felt strongly in this pair, which recently topped out near the 1.1000 area that has generally provided resistance in recent years. An extra risk for NOK could be any deal that sees the country agreeing to deliver significant gas flows at far below the levels that have traded in recent months in the dysfunctional, illiquid EU forwards market as the EU meets in Brussels on Friday to address soaring gas/power prices. So far, the Liz Truss sterling relief rally has been a very brief affair – as with the euro, we’ll likely need to see strong near-term relief on the power/gas prices to improve sentiment toward sterling. EURGBP rebounded strongly into the upper part of the range and remains worth watching for the relative weakness in sterling, especially as the recent highs were not far from the 0.8700 area, the upper edge of the range established beginning in early 2021 when the exchange rate stabilized post-Brexit. China continues to push against CNH weakening, setting the CNY onshore reference rate surprisingly strongly relative to expectations once again overnight. Chinese president Xi Jinping encouraged The Bank of Canada is up later today – expected to hike 75 bps to 3.25%, therefore front-running the Fed slightly with its policy rate. Guidance from the Bank of Canada unlikely to diverge much for what is priced, although it is interesting to see the market marking the October meeting at less than 50 basis points above today’s assumed 75-bp hike – so a downward shift in the guidance will be needed to agree with that. Significant risk sentiment and oil prices moves are likely more important for the loonie than BoC guidance beyond today. Table: FX Board of G10 and CNH trend evolution and strength.JPY downward spiral picks up pace, while the USD remains strongest. Elsewhere, keeping an eye on the commodity currencies after an ugly week for commodities. Table: FX Board Trend Scoreboard for individual pairs.Still watching the AUDNZD trend for signs that the up-trend is set for a full rejection. Probably need a close well south of 1.1100 for that. The JPY crosses are all blazing higher now – USDJPY at a stunning 9.7. Upcoming Economic Calendar Highlights 1230 – US Jul. Trade Balance 1230 – Canada Jul. International Merchandise Trade 1300 – US Fed’s Barkin to speak 1400 – Bank of Canada Rate Decision 1400 – Canada Aug. Ivey PMI 1400 – US Fed’s Mester (Voter) to speak 1640 – US Fed Vice Chair Brainard to speak 1800 – US Fed Beige Book 1800 – US Fed’s Barr (Voter) to speak on Financial System Fairness & Safety 2301 – UK Aug. RICS House Price Balance 0130 – Australia Jul. Trade Balance 0305 – Australia RBA Governor Lowe to speak Source: FX Update: Yen slide extends, ignores official warnings. | Saxo Group (home.saxo)
China's Deflationary Descent: Implications for Global Markets

The EUR/USD Pair Is Trading Like In The Early 2000s. The ECB Meeting May Push The GBP/USD Pair?

InstaForex Analysis InstaForex Analysis 07.09.2022 12:17
Dollar continues to rise, thanks to higher yields of Treasuries ahead of the Fed's monetary policy meeting this September. Clearly, markets are driven by expectations of further rate hikes by world central banks, with the Fed having the full leadership. Most likely, it would implement a 0.75% increase, along with the ECB despite the start of recession in Europe. At the time of writing, EUR/USD is trading near the historical low of the early 2000s. It is logical to buy as soon as the price decreases; however, there are a lot of reasons that are holding back traders from such actions. One example is the situation of the eurozone economy, which is very deplorable amid the conflict in Ukraine. Crisis is already brewing, and there is a chance that full-scale unrest will start soon. But euro could rise a bit if the ECB raises rates by 0.75%. Then, it will move sideways ahead of the Fed meeting, nervously reacting to the decisions of the ECB and incoming economic data, as well as outlook for monetary policy. After the Fed meeting, euro will fall, which strengthens the idea to sell the pair rather than buy. Forecasts for today: EUR/USD The pair is consolidating slightly above 0.9900. There is a possibility of a rebound to 0.9975, but trading will most likely be conducted sideways. GBP/USD The pair is trading above 1.1450. Incoming economic statistics, as well as the ECB meeting, may push it to 1.1590.       Relevance up to 09:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321029
US Dollar Index May Confirm A Potential Bullish Trend Reversal

It Will Not Be Surprised If The US Dollar Strengthen More

InstaForex Analysis InstaForex Analysis 07.09.2022 13:04
Dollar could rise higher if Fed Chairman Jerome Powell insists on following Paul Volcker's steps in fighting inflation. On Tuesday, the Bloomberg Dollar Spot Index already hit a record high, while the Intercontinental Exchange Inc. was about a third below its all-time high in 1985. The Fed's own index was about 11% below its March peak this year. Despite the obvious differences in the macroeconomic environment now and 40 years ago, the diversity of dollar indicators hints that traders are not fully convinced that Powell will be as unwaveringly hawkish as his predecessor. The Bloomberg Index, which is broader than its peers and contains key emerging market currencies, is likely to be below its peak if it was around that time. Of course, Powell still has an opportunity to reaffirm his commitment to fighting inflation as he is yet to announce the Fed's next policy decision and rate outlook later this month. "Powell has taken several steps in the direction of Volcker's famous resolve, more openly acknowledging that economic hardship is likely to be the price to be paid in the near term to get inflation back on target," said Sean Callow, senior FX strategist at Westpac Banking Corp. He added that most central bankers like to be compared to Volcker, and the closer Powell gets to it, the more sustainable the yield appeal of the US dollar will be. "It comes as no surprise that dollar hit a fresh record high on both safe-haven flows from global economic weakness and as a resilient U.S. economy paves the way for the Fed to remain aggressive," said Edward Moya, chief market analyst at Oanda. "King dollar has awoken from a nap and that could spell a lot more pain for the European currencies," he added.       Relevance up to 09:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321033
The Ethereum Has Located Just Above The Key Short-Term Technical Support

The Ethereum Provide Us With An Important Bearish Signal

InstaForex Analysis InstaForex Analysis 07.09.2022 13:23
Blue line- neckline support In a previous analysis we noted the formation of a potential Head and Shoulders pattern in Ethereum. Price made a lower high yesterday and is turning lower towards the important short-term neckline support. Support is found at $1,717-10 area. A break below this level will activate the H&S pattern and provide us with an important bearish signal. Price continues making lower highs which is a sign of weakness. Ethereum remains vulnerable to more downside as long as price is below $1,720. Read more: https://www.instaforex.eu/forex_analysis/291786   Relevance up to 13:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291786
The EUR/USD Price May Fall Under 1.0660

Euro/ US Dollar: Medium- And Short-term Trend Remain Bearish

InstaForex Analysis InstaForex Analysis 07.09.2022 13:34
  Blue line- short-term resistance EURUSD is trading around 0.99. So far price action today has been neutral with low volatility and no clear direction. Medium- and short-term trend remain bearish with no sign of a reversal. Price continues making lower lows and lower highs in the 4 hour chart. Price is below the resistance trend line and as long as this is the case, short-term trend will remain bearish. This resistance is now at 0.9970. A break above this level will give bulls hopes for a bigger bounce. Until then, price remains vulnerable to a move towards 0.9850-0.98. Alexandros Yfantis Relevance up to 13:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291792
Gold Indicated A Decrease In Prices, Does Gold Should Be Buy Or Sell Today?

Gold Indicated A Decrease In Prices, Should Gold Be Buy Or Sell Today?

InstaForex Analysis InstaForex Analysis 07.09.2022 10:21
The trading plan for gold indicated a decrease in prices. This really happened yesterday; however, the quote did not reach the target level of 1675. But if there is a rebound, another set of short positions can be taken in the market. Considering that previous movements form a three-wave (ABC) pattern, where wave A represents the selling pressure on Tuesday, traders can enter the market by selling up to the 50% and 61.8% retracement levels. Place stop loss at 1727, then exit the market on the breakdown of 1687 and 1675. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks!           Relevance up to 08:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Read more: https://www.instaforex.eu/forex_analysis/321023
PLN Soars to Record Highs Ahead of NBP Decision

How The EUR/USD Pair Look In Short- And Long- Positions?

InstaForex Analysis InstaForex Analysis 07.09.2022 14:30
Analysis of transactions in the EUR / USD pair Euro tested 0.9949 at the time when the MACD was far from zero, which limited the downside potential of the pair. Sometime later, it tested the level again, but this time the market signal that was to buy, which only brought losses. No other signals appeared for the rest of the day. EUR/USD fell on Tuesday amid a decline in the volume of industrial orders in Germany and weak business activity in the construction sector. Then, strong data on US PMI increased pressure on the pair, pushing it to new yearly lows. A number of reports are scheduled to be published today, such as the volume of GDP in eurozone and Germany, as well as level of employment in the Euro area. Strong numbers will raise the rate of euro ahead of the ECB meeting on Thursday. US trade surplus is due out in the afternoon, but much more important will be speeches from FOMC members Loretta Mester and Lael Brainard. Their statements are likely to support dollar, which will return the pair into a bear market. For long positions: Buy euro when the quote reaches 0.9926 (green line on the chart) and take profit at the price of 0.9981. A rally will occur if statistics in the Euro area exceed expectations. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9893, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9926 and 0.9981. For short positions: Sell euro when the quote reaches 0.9893 (red line on the chart) and take profit at the price of 0.9835. Pressure will return if statistics in the Euro area come out lower than the forecasts, while data in the US exceed expectations. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 0.9926, but the MACD line should be in the overbought area, as only by that will the market reverse to 0.9893 and 0.9835. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.       Relevance up to 10:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321037
In Times Of Looming Energy Crisis Bank Of England And UK In General Have A Complicated Way Ahead

In Times Of Looming Energy Crisis Bank Of England And UK In General Have A Complicated Way Ahead

Jing Ren Jing Ren 07.09.2022 14:18
In general terms, the economic policy of the UK under the new government is expected to remain very similar. For example, the new Chancellor Kwasi Kwarteng might have had differences in public image with former chancellor Sunak, but in practice, agrees on most major issues. In fact, the argument between them was mostly along the lines of who was most in favor of the policies. That having been said, a change of the occupant of No. 10 is an opportunity to do a bit of a course correction. After all, the prior PM was quite unpopular, and the point of a changing leadership is to find a new direction. So, some changes are to be expected, particularly on the front that could be seen as garnering popular support. But, the question for traders is: How does this affect the markets? The most notable is in respect to dealing with the energy crisis, which took on increasing new dimensions over the summer. That was when Johnson was still in a caretaker role, and therefore wouldn't be announcing any major new policy. Though we should remember that the UK already had an energy emergency a year ago, with petrol stations running out of fuel in some places. While largely fueled by consumer panic, there was an underlying logistics issue. Now, there is a different problem. The new PM is proposing a program to spend as much as £200B in order to keep down energy prices for consumers and businesses. That amounts to a little over 7.4% of the UK's nominal GDP for last year (and could be even higher if the BOE's projections of a recession comes true). With multi-decade high inflation, increased spending (or, at least, the monetary expansion to support it) might have quite a few economists rather worried. In particular, some traders have been speculating that cable could fall down to parity, like the Euro already has. What about the nuts and bolts? Of course there have been other measures announced, such as rescinding the raise in National Insurance. However, since a little over a third of the UK's energy needs come from overseas, that is the issue most likely to impact forex markets. While in general, increasing spending based on debt tends to lead to higher inflation, exactly how the mechanism is implemented could have different kinds of effects. And, so far, the details have not been forthcoming, though more information is expected tomorrow. Getting a handle on the implications So far, the promise has been to cap household energy bills. There are a wide range of mechanisms to achieve that, and they all have different inflation implications. The basic issue is that capping energy prices would allow UK households to have more disposable income, at a time that the BOE is trying to tamp down demand with higher rates. It might mean the BOE takes a stronger position starting at the next meeting to head off inflation. If the price cap mechanism is achieved through some sort of direct subsidy to energy bills, that would imply higher domestic spending by the government. Which would increase inflationary pressure. However, if the price cap was more similar to Spain's, where the government would subsidize input costs for generators, then the inflationary effect might be less. However, if the BOE takes a stronger stance in raising rates, a stronger pound might additionally help offset the cost of energy and lower inflation. Another reason that BOE policy might look more like the US' than Europe's in the near term.
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

USD/CAD Is Surely Awaiting This One! Check Out The Expected Decision Of Bank Of Canada!

Kenny Fisher Kenny Fisher 07.09.2022 15:33
The Canadian dollar has edged higher today. In the European session, USD/CAD is trading at 1.3173, up 0.17%. BoC expected to remain aggressive The Bank of Canada meets later today and policy makers are expected to keep their foot on the pedal and deliver a sizeable hike of 0.75%. This follows the surprise super-size increase of 1.00% in July, which brought the benchmark rate to 2.50%. The BoC considers its neutral rate around 2.50%, which means that rates are headed to restriction territory in a bid to curb red-hot inflation. There was some good news as July CPI dropped to 7.6%, down from 8.1% in June, but this has not changed the BoC’s policy. In July, Governor Macklem responded to the drop in CPI by saying the Bank was committed to acting forcefully against inflation in order to avoid a sharper economic downturn. There had been some expectations that the BoC might implement another 1.00% increase at today’s meeting, but those expectations were dampened by last week’s disappointing GDP release for Q2. The economy grew by 3.3%, well short of the consensus of 4.4%, which means that the likely outcome of today’s meeting is a 0.75% hike. At the July meeting, Macklem said that the BoC was committed to front-loading rate increases now in order to avoid even higher rates down the road. Assuming Macklem’s stance hasn’t changed, this means that the BoC will shift into low gear in October, with a small rate hike of 0.25% or possibly no increase at all. If the next inflation report shows another drop, the BoC will be able to breathe easier and ease up on its rate-tightening cycle. USD/CAD Technical USD/CAD faces resistance at 1.3232, followed by 1.3338 There is support at 1.3102 and 1.2996 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar steady ahead of BoC meeting - MarketPulseMarketPulse
It's Time To Meet iPhone 14! Apple Stock Price May Fluctuate Today!

It's Time To Meet iPhone 14! Apple Stock Price May Fluctuate Today!

Swissquote Bank Swissquote Bank 07.09.2022 15:43
The three major US indices fell on Tuesday, the US yields spiked, and the dollar extended rally, as Americans returned from their Labor Day break. Europe opened in the negative. The rising yields helped the US dollar extend rally, of course. The US dollar index is now above the 110 mark; the USDJPY spiked to 144, the EURUSD slipped below the 0.99 mark, the pound failed to hold the 1.15 support, and gold is now below the $1700 level, again. Bitcoin on the other hand accelerated the selloff, and is now below the $19K mark, as the bears are eyeing the June support of around $17500. The stronger dollar is a growing headache, and we want to believe that the USD rally cannot continue forever, but if history is any guide, the US dollar could strengthen way more than now. If we go back to 80’s, when Volcker was hiking the interest rates at great speed to tame inflation, the US dollar also got very VERY strong. And unfortunately, other central banks’ hawkishness doesn’t tame the dollar appetite. The Bank of Canada (BoC) is expected to hike ‘big’ for the 4th consecutive meeting today, and the European Central Bank (ECB) is expected to raise its rates by 75bp tomorrow. But the euro looks bad, and the Loonie doesn’t look any better. In equities, everyone in Europe talks about the upcoming Porsche IPO, while Apple fans are holding their breath to find out the new iPhone14! Watch the full episode to find out more! 0:00 Intro 0:22 Equities down, US yields & USD up 2:42 How far could the US dollar rally extend? 5:38 BoC, ECB to hike rates 6:28 US crude tests important support 7:05 Porsche will go public soon! 8:25 Apple reveals new iPhone today! Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #rally #BoC #ECB #rate #hike #USD #EUR #GBP #JPY #CAD #Gold #XAU #Bitcoin #energy #crisis #crude #oil #Porsche #IPO #Apple #iphone14 #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH  
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

The Number Of Securities That Rose In Price On New York Market

InstaForex Analysis InstaForex Analysis 08.09.2022 08:22
At the close in the New York Stock Exchange, the Dow Jones rose 1.40%, the S&P 500 index rose 1.83%, the NASDAQ Composite index rose 2.14%. The leading performer among the components of the Dow Jones index today was 3M Company, which gained 3.95 points or 3.39% to close at 120.55. Nike Inc rose 3.33 points or 3.17% to close at 108.48. Home Depot Inc rose 2.74% or 7.93 points to close at 297.47. The biggest losers were Chevron Corp, which shed 2.01 points or 1.28% to end the session at 155.11. Verizon Communications Inc was up 0.02 points (0.05%) to close at 41.08, while Caterpillar Inc was up 0.20 points (0.11%) to close at 180. 86. Leading gainers among the S&P 500 index components in today's trading were SolarEdge Technologies Inc, which rose 11.85% to 311.36, Enphase Energy Inc, which gained 8.02% to close at 316.31, and also shares of DexCom Inc, which rose 7.73% to end the session at 88.37. The biggest losers were APA Corporation, which shed 3.04% to close at 36.67. Shares of Old Dominion Freight Line Inc shed 2.95% to end the session at 263.98. Quotes of Halliburton Company decreased in price by 2.85% to 28.68. Leading gainers among the components of the NASDAQ Composite in today's trading were Imara Inc, which rose 71.79% to hit 2.01, Shuttle Pharmaceuticals Inc, which gained 27.72% to close at 36.40, and shares of Spero Therapeutics Inc, which rose 26.55% to end the session at 1.43. The biggest losers were Cleantech Acquisition Corp, which shed 28.36% to close at 6.77. Shares of Newage Inc lost 25.20% and ended the session at 0.09. First Wave BioPharma Inc (NASDAQ:FWBI) was down 23.22% to 3.24. On the New York Stock Exchange, the number of securities that rose in price (2,400) exceeded the number of those that closed in the red (723), while quotes of 131 shares remained virtually unchanged. On the NASDAQ stock exchange, 2715 companies rose in price, 1027 fell, and 217 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 8.44% to 24.64. Gold futures for December delivery added 0.92%, or 15.70, to $1.00 a troy ounce. In other commodities, WTI October futures fell 5.96%, or 5.18, to $81.70 a barrel. Brent oil futures for November delivery fell 5.70%, or 5.29, to $87.54 a barrel. Meanwhile, on the Forex market, EUR/USD rose 1.08% to hit 1.00, while USD/JPY edged up 0.72% to hit 143.82. Futures on the USD index fell 0.62% to 109.52.   Relevance up to 05:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/291873
Further Downside Of The AUD/JPY Cross Pair Is Expected

AUD/USD Pair: Will New Wave Of Price Decline In The Short Term?

InstaForex Analysis InstaForex Analysis 08.09.2022 08:25
The Australian dollar's growth amounted to 34 points on Wednesday, in today's Asian session, this growth has already been covered by a decline. The price transition above the resistance level of 0.6755 turned out to be false, respectively, the price is moving towards the 0.6685 target. Going under the level will open the 0.6640 target. The Marlin Oscillator has formed a descending wedge, the statistically predominant direction of exit from it is down. The initial conditions for the pound are decreasing. On a four-hour scale, the price is supported by convergence with the Marlin Oscillator. Another price jump up to the MACD line is possible. In this case, the predictive action of the level of 0.6755 will lose its value, it will move to the MACD line - a reversal from it and will mean a new wave of price decline in the short term (several days).       Relevance up to 04:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321106
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

How The British Pound To The US Dollar Pair Look Like Today

InstaForex Analysis InstaForex Analysis 08.09.2022 08:29
With certain conditions, we can assume that the pound tested the target level of 1.1385 yesterday, after which it returned to the resistance of 1.1525. This morning the price is falling again, which, according to the traditional pattern, implies overcoming yesterday's support and further advance towards 1.1305. But the situation on the four-hour scale is not so unambiguous. The price went above the MACD line yesterday supported by double convergence with the Marlin Oscillator. The signal line of the oscillator is already in the positive area. Possible price growth to the target levels of 1.1600 and 1.1650, which will look like a correction from the entire movement since August 10th. In case of growth, the price can even reach the MACD line of the daily scale, to the area of 1.1735.   Relevance up to 04:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321108
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

What Can We Expect From The EUR/USD Pair Today?

InstaForex Analysis InstaForex Analysis 08.09.2022 08:35
Yesterday, the euro cheered up during the US session, although the matter is moving towards the European Central Bank meeting, and it will be held today. Also, the US trade balance in July showed an increase from -80.9 billion dollars to -70.7 billion. The consensus forecast shows an increase in the main rate by 0.50%, that is, up to 1.00%. And in this case, we are waiting for the euro to fall, as in the closest example yesterday, when the Bank of Canada raised the rate by 0.75% (from 2.50% to 3.25%), but the Canadian dollar strengthened by only 32 points, and then on the fall of the dollar index by 0.60%, and it has won back half of this movement this morning. Only with a rate hike of 0.75%, we expect to see some revival of the bulls in the single currency, but it will not be long. The first resistance to the euro is the MACD indicator line at 1.0070. Breaking this line may extend the correction to the target level of 1.0150. The main scenario we assume is going down - the price goes under 0.9950 and further decline to 0.9850 and further to 0.9752. The signal line of the Marlin Oscillator shows the intention to reverse downwards from the zero line for the second time. The price sharply went above the MACD line and the Marlin Oscillator moved into the growth area on the four-hour chart. This is a signal for a possible continuation of the received momentum, but on such a powerful factor as a change in the central bank rate, the movement may turn out to be false. Therefore, we can only wait for all incoming data, not only from the release of the ECB, but also from further comments from its key figures (Lagarde, 15:15 London time).       Relevance up to 04:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321110
The Markets Still Hope That The Fed May Consider Softer Decision

How Geopolitical Situation Impact On The EUR/USD Currency Pair?

InstaForex Analysis InstaForex Analysis 08.09.2022 08:39
On Wednesday, the EUR/USD currency pair continued to trade near its 20-year lows. In essence, it does not even make much sense to celebrate the next update of these very minimums or the absence of it. It is evident to everyone that, given the current conditions, only a miracle can help the European currency. The market does not buy euros even when there seem to be causes and reasons for this. We understand that in the first half of the year, the euro currency fell due to the following: (1) geopolitical conflict in Ukraine; (2) EU sanctions against Russia, which are hitting the EU economy too; (3) the strengthening of the "hawkish" attitude of the Fed; (4) a strong increase in the Fed rate. All these considerations were solid reasons to get rid of the euro and buy the dollar. But in the last few months, the geopolitical struggle in Ukraine has steadily evolved into a passive one. Neither the APU nor the Russian army have a major advantage. Both are pleased with local successes. If this fight continued for ten years, would the euro currency sink all this time? Unlikely The Fed has been raising rates and will continue to raise them. This is evident, but the ECB is finally starting to battle inflation, has started raising the rate, and is also doing it at the fastest possible speed. Therefore, why is the European currency not strengthening today, at least a little? It should be mentioned that technical analysis also has a big influence on the movement of the pair. After all, if traders detect a severe and long-term downturn, why would they buy a pair? Consequently, geopolitics and the foundation may be beginning to stabilize the European currency, but it cannot profit from this. The euro has every opportunity to update its 20-year lows multiple times. As soon as the two primary causes of the euro's depreciation in 2022 began to stabilize, many other reasons emerged that could lead to a further depreciation of the European currency. First, there is an energy shortage. The European Union is more dependent on foreign oil and gas supplies than the United States. They will be significantly less affected by the increase in energy prices. Additionally, they may earn. If the European Union abandons Russian hydrocarbons entirely (or if Moscow bans shipments), Europe will have to purchase oil and gas from somewhere else. Why not in the United States? Considering the issue from this vantage point, the American dollar emerges as the superior option. The dollar is the world's reserve currency, implying that traders choose to purchase dollars rather than the euro, pound, yuan, or lira at times of high risk and uncertainty. In addition, both the yuan and the lira have recently depreciated, reinforcing our thesis on the dollar's cosmopolitan standing and high demand. Third, the European economic downturn will be heavily influenced by the energy issue, which cannot be averted. No one can predict how much gas and oil prices will increase if the European Union can fully compensate for the loss of hydrocarbons from Russia or how much Europe's industrial production will decline. Once more, there is uncertainty. The market anticipates a significant decline, and in the United States, everything appears reasonably obvious. The economy is slowing down due to the Fed's rate hike and QT program. In the near future, the Fed will stop raising interest rates, causing the situation to improve. If in the United States we are discussing a recession that may finish by the end of next year (i.e., the terms are evident), then it is impossible to predict its depth and duration in the European Union. So it turns out that the geopolitical foundation has not changed, but traders can also consider a few additional aspects that have been introduced. And none of these characteristics are favorable to the EU currency. It has already fallen below parity with the dollar and cannot even adjust. Therefore, we believe that the drop will continue for a while, potentially for several months. The euro requires robust support, not a single ECB rate hike in the current environment. As of September 8, the average volatility of the euro/dollar currency pair over the previous five trading days was 108 points, considered "high." Thus, we anticipate the pair to trade between 0.9800 and 1.0016 today. The Heiken Ashi indicator's upward reversal will suggest a new round of upward movement. Nearest support levels: S1 – 0.9888 S2 – 0.9827 S3 – 0.9766 Resistance levels closest: R1 – 0.9949 R2 – 1.0010 R3 – 1.0071 Recommendations for Traders: The EUR/USD pair continues to trade in a flat or "swing" pattern, despite the recent appearance of a bearish tendency. Thus, it is now possible to trade on Heiken Ashi indicator reversals until the price exits the 0.9900-1.0072 range. Formally, she continues to hold this position. Explanations for the figures: Channels of linear regression – aid in determining the present trend. If both are moving in the same direction, the trend is now strong. Moving average line (settings 20.0, smoothed) – determines the current short-term trend and trading direction. Murray levels serve as movement and correction targets. Volatility levels (red lines) represent the expected price channel the pair will trade within over the next trading day, based on the current volatility indicators. The CCI indicator — its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal is imminent. Relevance up to 05:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321112
Prices Of Gold Rose For The Third Straight Session

The Outlook Of Gold Remains Bearish

InstaForex Analysis InstaForex Analysis 08.09.2022 08:45
Early in the European session, gold (XAU/USD) is trading at 1,714.33. Yesterday in the American session, gold managed to consolidate above the 21 SMA located at 1710, giving it a positive outlook for the coming days. Gold is currently trading above the 21 SMA and below the 3/8 Murray. Both levels could be acting as immediate support and resistance. On the 4-hour chart, we can see the formation of a double bottom technical pattern located at 1,688 and another at 1,691. This technical pattern represents the probability that XAU/USD could go ahead with the uptrend and could reach 200 EMA located at 1,744. On September 7, the eagle indicator reached the 5-point level which represents an extremely oversold zone. In the coming days, gold is likely to break sharply the downtrend channel which has been underway since August 8. So, the price could reach the level of 1,750 and even reach 5/8 Murray at 1,781. Market sentiment shows that investors continue to take refuge in the US dollar and this in turn is reflected in the high yields of Treasury bonds. Both assets are negative factors for XAU/USD. In the medium term, the outlook remains bearish for gold. This, in turn, suggests that any recovery attempts could be seen as a selling opportunity. Our trading plan is to buy above the 21 SMA located at 1,710. Additionally, a sharp break above the downtrend channel of around 1,718 will be seen as an opportunity to buy with targets at 1,744(200 EMA) and 1,750.     Relevance up to 06:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291885
Forex: Check The Performance Of EUR/USD, USD/JPY And USD/CAD!

Forex: Check The Performance Of EUR/USD, USD/JPY And USD/CAD!

Jing Ren Jing Ren 08.09.2022 08:42
EURUSD attempts to break out The euro recoups losses as traders expect a 50bp interest rate increase by the ECB. A bearish MA cross on the daily chart following a brief consolidation shows that the mood remains cautious at best. A failure to hold onto 0.9900 was a reminder of a strong bearish bias. However, a break above the first resistance at 0.9980 is an encouraging sign. The single currency will need a solid catalyst to propel it above the supply zone at 1.0090 and to make a recovery sustainable. Otherwise, the fresh support at 0.9870 could be at risk. USDJPY in limited pullback The Japanese yen recoups some losses as the Q2 GDP growth beats expectations. The dollar’s rally gained momentum after it lifted July’s high at 139.40. 145.00 is a hurdle and may see some profit-taking after the RSI soared into overbought territory. Past that, the pair could continue towards its 24-year high at 147.50. As sentiment remains extremely bullish, a pullback would be seen as an opportunity to stake in with 142.70 as the closest support. Further down, the psychological level of 140.00 would be the bulls’ stronghold. USDCAD hits resistance The Canadian dollar found support after the BoC raised interest rates by 75 bps as expected. The pair has been hovering under July’s high at 1.3220. A bullish MA cross on the daily chart and a series of higher lows indicate that the buying pressure has been building up. A breakout would remove the lid and attract momentum buyers. Then 1.3400 near its two-year high would be the next target. The price action is testing 1.3060, a key demand zone from the latest accumulation. Its breach could force the bulls to bail out.
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

What Is Happening In The Euro To The US Dollar Pair

InstaForex Analysis InstaForex Analysis 08.09.2022 08:51
EUR/USD 5M The EUR/USD pair was once again trading near its 20-year lows on Wednesday. It seems that now everything depends on the US, the dollar and American traders, because even the trades for the umpteenth time in the US session are much more active than in the European one. It was in the second half of the day that the euro, unexpectedly for many, turned up and began an impressive growth. It was not triggered by any fundamental or macroeconomic event, because the only important event is the EU GDP report in the third estimate for the second quarter, which was published this morning. Nevertheless, such growth was to be expected, as we talked about in our last articles. The fact is that the euro is already very low and should correct at least a little from time to time. Such corrections are quite difficult to predict, since they are usually not associated with any events. Plus, today the European Central Bank will announce the results of the meeting, among which there will be a 0.5-0.75% rate hike with almost 100% probability, which, you see, is a hawkish decision. Thus, the euro really had reasons to grow yesterday. But everything was very unfortunate in regards to the trading signals due to the flat at the European trading session. For the umpteenth time, we are faced with a situation where, in general, the movement is not bad, but due to the small number of levels or due to strange movements, it is not possible to earn money. Four trading signals were formed near the level of 0.9900, three of which turned out to be false. Traders could work out only the first two and get a small loss on the first trade, since the price there did not move even 15 points in the right direction. Stop Loss was triggered at breakeven on the second long position. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For most of 2022, they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group decreased by 8,500, and the number of shorts decreased by 5,000. Accordingly, the net position decreased by about 3,500 contracts. This is not much, but this is again an increase in the bearish mood among the major players. After several weeks of weak growth, the decline in this indicator resumed. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 47,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. The euro has not been able to show even a tangible correction over the past six months or a year, not to mention something more. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 8. The market is beginning to shift its focus away from geopolitics and fundamentals to other factors. Overview of the GBP/USD pair. September 8. Andrew Bailey pulled down the pound again. Forecast and trading signals for GBP/USD on September 8. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair continues to trade on the hourly timeframe in a mode very similar to the "swing". The price has not dropped much in the last few days, so the lower border of the horizontal channel has simply shifted to the level of 0.9877. And now we have the 0.9877-1.0072 channel. The channel is almost 200 points wide, but the price is stubbornly trading inside it. We highlight the following levels for trading on Thursday - 0.9877, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9996) and Kijun-sen (0 .9947). There is still no level below 0.9877, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The ECB will announce the results of its meeting on September 8, and then for the first time in a long time, ECB President Christine Lagarde will make a speech. Federal Reserve Chairman Jerome Powell is speaking in the US today. Looks like we're in for a very interesting day... Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 06:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321116
With Its New White Label cTrader solution, B2Broker is Ready to Revolutionize The Industry

With Its New White Label cTrader solution, B2Broker is Ready to Revolutionize The Industry

B2Brokers Group of Companies B2Brokers Group of Companies 08.09.2022 08:55
B2Broker, a leading provider of technology solutions and liquidity for the Forex and cryptocurrency industries, has officially launched its new White Label cTrader platform. The new product was created with the goal of providing brokers with access to one of the most popular multi-asset trading platforms on the market today. With this launch, B2Broker continues its commitment to providing innovative solutions that meet the needs of its clients. The cTrader platform is a popular choice among active traders due to its innovative capabilities and complex trading tools. B2Broker's white label allows brokerage companies to provide their traders with a full trading environment on the cTrader platform. This makes it an attractive option for those looking for a comprehensive trading experience. White Label cTrader In today's fast-paced world, it's more important than ever to have reliable and efficient brokerage. B2Broker's White Label cTrader provides just that, allowing you to quickly start your own Forex, cryptocurrency, or multi-asset broker. With a powerful user interface that can be customized to any design style, the White Label cTrader option makes it easy for commercial and institutional enterprises to provide personalized and tailored services to their consumers. As CEO of B2Broker, Arthur Azizov said: “cTrader is a well-known platform with a proven track record of success, and it is used by all the market's top brokers. A quick search on the Appstore for cTrader will reveal all the major companies that use this platform. We believe that in today's ultra competitive markets, every broker must offer a wide variety of trading platforms to its clients. Otherwise, the broker would lose clients who wish to trade on the cTrader platform. In addition to the traditional trading capabilities provided by the MT platform, cTrader will almost certainly attract a new category of traders and investors. When it comes to managing your crypto brokerage, and its algo capabilities, cTrader is one of the top solutions on the market. Since 2021, we have been seeing a growing demand for cTrader among cryptocurrency brokers. Since many cTrader brokers use our liquidity offering, we decided to open a whole new world for brokers that want to grow more sophisticated and cater to traders' needs, rather than requiring them to use a single platform,” The White Label cTrader platform is stable and simple in utilizing. It offers brokerages all the features they need to succeed without the need to purchase a cTrader server license, set up a backup system, establish a worldwide network of access servers, or pay people to design and administer the server structure on a regular basis. Unique Pluses: The White Label Trader is a full infrastructure that also includes a trader's room, payment systems, liquidity solutions, trading platforms, and IB programs. Combining cTrader's sophisticated trading tools with B2Broker's aggregated liquidity pool and ongoing client assistance produces an attractive solution for brokerage firms. You will have access to Tier 1 banks and other key financial institutions' liquidity. This means you may offer your clients narrow spreads with minimal latency and lightning-fast execution. Trading algos in C# using custom indicators and bots. With B2Broker's White Label cTrader, you can now provide your clients with a simple and configurable algorithmic trading solution. To keep things operating smoothly, your company will get all of the appropriate licenses and permissions. Legal requirements are met during installation, allowing you to focus on what matters most: expanding your brokerage. With B2Broker's 24-hour customer service, you'll never be alone while dealing with problems. B2Broker provides trustworthy and quick multilingual services around the clock, so whatever happens, your problem will be handled quickly! You will also have access to a demo environment, third-party integrations, STP, clear pricing, a contemporary UI, and other features. And, with proxy servers strategically positioned all over the world, you can be guaranteed a consistent connection with little lag time. Your brokerage staff will receive a comprehensive overview of the user interfaces and functionality of WL cTrader and cBroker. The training program will include an introduction to the cTrader platform, an explanation of the functions and features available to traders. Final Reflection B2Broker's White Label cTrader is the ideal option for brokers wishing to provide their clients with a world-class trading experience. Your clients may trade successfully and confidently if they have access to all of the features and tools they require. With B2Broker's customer service, which is always online, you can be confident that any issues will be addressed swiftly and effectively. So, if you're seeking a dependable and complete trading solution for your brokerage, B2Broker's White Label cTrader is the way to go!
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

What Kind Of Mood Is The GBP/USD Pair Today?

InstaForex Analysis InstaForex Analysis 08.09.2022 08:58
GBP/USD 5M The GBP/USD currency pair traditionally resumed its downward movement on Wednesday and this time reached the level of 1.1411 and even went below it by a few points. Thus, it can be officially declared that the lows for 37 years have been updated! In principle, we have repeatedly said that this will happen. Now we expect that this level will be overcome, and the pound will set more than one anti-record in 2022. Immediately after the update of the lows, a rather strong upward movement began, which is very difficult to link with macroeconomics or the foundation. If in the case of the euro it can be assumed that the growth is associated with today's European Central Bank meeting and a very likely increase in rates by 0.75%, then in the case of the pound, the growth could only be technical. After all, the pound has also been falling for a very long time and very strongly - corrections should occur from time to time. However, the euro and pound went up almost identically and at the same time, which leads us to assume the technical status of this correction. If so, then both major pairs may resume falling in the coming days. There is absolutely nothing to take note of regarding the previous day's important events. In regards to trading signals, the pound's situation was better than the euro's. In fact, only one signal to buy was formed in the area of 1.1411-1.1442. This area could also be considered as two separate levels, but when a signal was formed inside it, the price immediately turned out to be near another level, so it was better to consider them together. Thus, when the price settled above 1.1442, it was possible to open long positions. Subsequently, the pound rose almost to the critical line, but the deal should have been closed earlier, manually in the late afternoon. Profit amounted to about 50 points. COT report The latest Commitment of Traders (COT) report on the British pound turned out to be as neutral as possible. During the week, the non-commercial group closed 300 long positions and opened 900 short positions. Thus, the net position of non-commercial traders immediately increased by 1,200. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Therefore, the growth of the British pound still cannot count. How can you count on it if the market sells the pound more than it buys? And now its fall has resumed altogether, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 87,000 shorts and 58,000 longs open. The difference is not as terrifying as it was a few months ago, but it is still noticeable. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the "foundation" and geopolitics. If they remain as weak as they are now, then the pound may still be in a "downward peak" for some time. Also remember that it is not only the demand for the pound that matters, but also the demand for the dollar, which seems to remain very strong. Therefore, even if the demand for the British currency grows, if the demand for the dollar grows at a higher rate, then we will not see the strengthening of the pound. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 8. The market is beginning to shift its focus away from geopolitics and fundamentals to other factors. Overview of the GBP/USD pair. September 8. Andrew Bailey pulled down the pound again. Forecast and trading signals for EUR/USD on September 8. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair maintains a downward trend on the hourly timeframe. Despite the rather strong growth from the previous day, the hourly timeframe clearly shows that the price has only moved away from its 37-year lows by 130 points. We highlight the following important levels on September 8: 1.1411-1.1442, 1.1649, 1.1874. Senkou Span B (1.1698) and Kijun-sen (1.1504) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. There are no major events scheduled for Thursday in the UK, and Federal Reserve Chairman Jerome Powell, whom we haven't heard from in a while, will speak in the US. However, the market now clearly does not need important events and reports to trade actively. The downward trend continues, so after the completion of the current correction, the quotes will most likely resume falling without Powell's help. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 06:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321118
The Upside Of The EUR/USD Pair Remains Limited

How The EUR/USD Pair Look From A Technical Point Of View

InstaForex Analysis InstaForex Analysis 08.09.2022 09:09
Technical Market Outlook: The EUR/USD pair had broken above the short-term trend line resistance and is consolidating around the parity level again ahead of the ECB interest rate decision today at 14:15). In order to terminate the down trend or at least make a correction, the bulls must break above the technical resistance located at the level of 1.0090 and 1.0122. In the longer term, the key technical resistance level is located at 1.0389. Nevertheless, in a case of a big surprise from the ECB, like a hike more than 1.25%, the EUR might surge even towards the last swing high located at the level of 1.0370, so please stay focused during the time of the announcement. Weekly Pivot Points: WR3 - 0.9992 WR2 - 0.99454 WR1 - 0.99156 Weekly Pivot - 0.98988 WS1 - 0.98690 WS2 - 0.98522 WS3 - 0.98056 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue below the parity level. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the longer term, the key technical resistance level is located at 1.0389.   Relevance up to 08:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291893
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The Bearish Domination Is Clear In The GBP/USD Market

InstaForex Analysis InstaForex Analysis 08.09.2022 09:12
Technical Market Outlook: The GBP/USD pair has hit the level of 1.1410 which is the 7 years low for this pair and the Bullish Engulfing candlestick pattern was made at the H4 time frame chart. The momentum is negative again on the H4 time frame chart, so the larger time frame trend (daily and weekly) remains down until further notice. Please watch closely the further market reaction for the level of 1.1410, because a shallow 100 pips bounce does not terminate the down trend. The bulls need at least to test the level of 1.1717 in order to make a corrective cycle to the upside more probable. Weekly Pivot Points: WR3 - 1.15513 WR2 - 1.15077 WR1 - 1.14791 Weekly Pivot - 1.14641 WS1 - 1.14355 WS2 - 1.14205 WS3 - 1.13769 Trading Outlook: The bearish domination is clear and there is no indication of down trend termination or reversal on the GBP/USD market. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame, so the downside move accelerated. The next long term target for bears is seen at the level of 1.1410 (2020 low). Please remember: trend is your friend.       Relevance up to 08:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291895
In The Coming Days Will Be The Final Consolidation Of Bitcoin

Hut 8 Increased Its Resources. Bitcoin: The Bearish Pressure Is Still High

InstaForex Analysis InstaForex Analysis 08.09.2022 09:16
Crypto Industry News: Canadian mining company Hut 8 reported that its bitcoin holdings had surpassed the 8,000 mark, amassing its own resources in the wake of the cryptocurrency market crash. Hut 8 published its latest mining report for August 2022. We read in it that the company increased its resources by 375 BTC in a month. In total, the miners' reserve is 8111 BTC. The company said it was mining 12.1 BTC per day for a month. While other mining operators were forced to sell some of their BTC holdings in the midst of the ongoing cryptocurrency market downturn, Hut 8 managed to continue its "longstanding HODL strategy" without getting rid of the bitcoin mined. Hut 8 also announced that it has installed 180 Nvidia GPUs in its main data center in Kelowna, Canada. This center is currently mining Ether. However, after the September update, GPU mining hardware will be used to provide artificial intelligence, "machine learning" or VFX rendering services. Hut 8 also continued to increase its mining capacity with the acquisition of Chinese ASIC MicroBT miners. The company paid $ 58.7 million for 12,000 new MicroBT M30S, M30S + and M30S ++ miners in October 2021. It also received orders for 1,000 machines a month by the end of 2022. Technical Market Outlook: The BTC/USD pair had bounced form a new swing low located at the level of $18,553 and is about to test the consolidation zone lower line seen at $19,521. The market conditions are now neutral as the bounce was made from the extremely oversold conditions. The main trend remains down and the next target for bears is located at $17,600. Weekly Pivot Points: WR3 - $20,411 WR2 - $20,111 WR1 - $19,911 Weekly Pivot - $19,840 WS1 - $19,610 WS2 - $19,509 WS3 - $19,209 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout.     Relevance up to 08:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291897
A Truce Between Cardano And Ethereum| Ethereum Movements

Ethereum Classic (ETC) Saw Its Token Value Increase

InstaForex Analysis InstaForex Analysis 08.09.2022 09:23
Crypto Industry News: Industry experts warn of the potential consequences of the Ethereum merger for other cryptocurrencies that run on Proof of Work (PoW) consensus algorithms. With Ethereum moving to the proof-of-stake Beacon Chain, many miners will have a problem. Those who have secured the Ethereum blockchain will look to continue mining in other PoW chains. Ethereum Classic (ETC) saw its token value increase by more than 10% in early September when blockchain explorer and mining pool operator BTC.com launched the zero-fee ETC pool over a three-month period. Technical Market Outlook: The ETH/USD pair had reversed almost all of the recent losses and is currently back below the last local high seen at the level of $1,685. The nearest technical support is located at the level of $1,513 and $1,475. The momentum is strong and positive again on the H4 time frame chart, so the bulls are ready to break above the local high from $1,685 and test the nest technical resistance located at $1,722. Weekly Pivot Points: WR3 - $1,624 WR2 - $1,598 WR1 - $1,581 Weekly Pivot - $1,572 WS1 - $1,555 WS2 - $1,546 WS3 - $1,520 Trading Outlook: The Ethereum market has been doing the lower highs and lower low since the swing high was made in the middle of the August at the level of $2,029. If the down move will extend, then the next target for bears is located at the level of $1,358. The key technical support for bulls is seen at $1,281.     Relevance up to 08:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291899
PLN Soars to Record Highs Ahead of NBP Decision

The EUR/USD Pair: Decrease In Investor Appetite For Risk

InstaForex Analysis InstaForex Analysis 08.09.2022 09:56
A large number of excellent market entry signals were formed yesterday, which made it possible to make good money. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 0.9915 level in my morning forecast and advised making decisions on entering the market from it. Pretty good German and eurozone data helped bulls bring the pair back to the 0.9915 area in the morning, but a false breakout at this level and the bulls' inability to gain a foothold above this range all led to a sell signal and a large sell-off of the pair with a fall of 35 points. Closer to the second half of the day, the bulls came to the defense of the large support at 0.9880, where a false breakout gave a buy signal, which pushed the pair to rise by more than 40 points up. Another attempt by the bears to protect 0.9915 was successful. Along with a sell signal, the pair went down about 15 points, but then the pressure eased. By the middle of the US session one could observe an attempt by the bears to protect the resistance of 0.9949, but the matter did not come to a major sell-off. When to go long on EUR/USD: Today, the entire focus will be on the European Central Bank meeting and on how aggressively the central bank will continue to raise interest rates. Almost no one doubts that the ECB will raise its key rate by 0.75% today, which will be the sharpest tightening of policy in recent times. This will certainly lead to the strengthening of the euro. But much more important are statements about how fast the central bank plans to tighten policy in the future. If we hear a hawkish tone in the words of ECB President Christine Lagarde, the demand for the euro can only increase. A sharp drop in the pair is not ruled out if the ECB raises rates by only 0.5%, fearing a difficult winter period and the economy sliding into recession. The optimal scenario for buying then would be a false breakout in the new support area of 0.9982, formed as a result of today's Asian session. This will provide an excellent entry point in view of the continuation of the upward correction with the nearest target at 1.0029. As I noted above, only hawkish statements by European politicians, as well as a breakthrough and test from the top to the bottom of this range, will hit the bears' stops, which creates another signal to open long positions with the possibility of a correction to the 1.0076 area. A more distant target will be resistance at 1.0127, where I recommend taking profits. In case EUR/USD falls and bulls are not active at 0.9982, the pair will be under pressure again. The optimal decision to open long positions in this case would be a false breakout near the low of 0.9949, where the moving averages are, playing on the bulls' side. I advise you to buy EUR/USD immediately on a rebound only from 0.9915, or even lower - in the area of 0.9880, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears no longer control the market, especially after yesterday's sharp buying by the big players. The bears' main task is to protect the nearest resistance at 1.0029, as having lost control of the parity, the pressure on the euro may ease. A false breakout at this level after the announcement of the ECB's decision on the interest rate will lead to an excellent signal to sell in order to resume the bear market and lower the euro to the 0.9982 area. A breakdown and consolidation below this range with a reverse test from the bottom up creates another sell signal with the removal of bulls' stop orders and a larger fall of the pair to the 0.9949 area, where the moving averages are passing. I recommend taking profit there. A more distant target will be a low of 0.9915. In case EUR/USD jumps during the European session, as well as the absence of bears at 1.0029, the situation will change dramatically. In this scenario, I recommend postponing short positions to 1.0076, but only if a false breakout is formed there. You can sell EUR/USD immediately for a rebound from the high of 1.0127, or even higher - from 1.0155, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT report) for August 30 logged a decline in both short and long positions. If a week ago there was a surge in activity, now there has been a similar decline. This indicates a decrease in investor appetite for risk after the release of the eurozone inflation data, which once again rose to a high in the last ten years. The problem is exacerbated by the energy crisis, as the flow of gas through the Nord Stream is practically suspended - this is another increase in energy prices in the winter and upward inflation surges, which will force the European Central Bank to further raise interest rates and tighten belts. This week we are also waiting for the central bank's decision on interest rates, which may aggravate the euro's position against the US dollar. Even though the rate hike will be considered by investors as a signal for the growth of profitability, at the same time there will be a slowdown in economic growth, which is more important. So don't expect a serious euro recovery in the medium term. The COT report indicated that long non-commercial positions decreased by 8,567 to 202,258, while short non-commercial positions decreased by 5,000 to 249,934. At the end of the week, the total non-commercial net position remained negative and decreased to the level of -47,676 against -44,109, which indicates continued pressure on the euro and further fall of the trading instrument. The weekly closing price slightly recovered and amounted to 1.0033 against 0.9978. Indicator signals: Moving averages Trading is conducted above the 30 and 50-day moving averages, which indicates an upward correction in the pair. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of a decline, the lower border of the indicator around 0.9915 will act as support. In case of growth, the upper border of the indicator in the area of 1.0055 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.     Relevance up to 08:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321130
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

GBP/USD Pair: What Can Traders Expect In Short And Long Positions?

InstaForex Analysis InstaForex Analysis 08.09.2022 10:01
Several market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1509 level in my morning forecast and advised making decisions on entering the market from it. As a result of the pair's growth at the beginning of the European session, a false breakout was formed at the level of 1.1509, which led to a good signal to sell the pound further along the trend. All this resulted in a decline of more than 100 points. The bulls regained the initiative in the afternoon and managed to climb the resistance at 1.1465. A reverse test of this level from the top down provided an excellent buy signal, which led to another 55-point rally for the pound. Selling at 1.1520 brought only about 20 points of profit. When to go long on GBP/USD: Today there is nothing interesting from fundamental statistics, therefore, for sure, traders will focus their attention on data on the eurozone and will monitor the reaction and attitude of investors towards risky assets after the increase in interest rates by the European Central Bank, which will partially affect the British pound. A strong rise in the euro may lead to a breakthrough of the nearest resistance at 1.1538 in the GBP/USD pair and to the continuation of an upward correction. In case GBP/USD falls in the first half of the day, forming a false breakout in the area of 1.1471, slightly above which the moving averages pass, will provide the first signal to open long positions in order to recover to the Asian high of 1.1538. A breakthrough and a downward test of this range may pull stop orders from speculative bears, which creates a buy signal with growth to a more distant level of 1.1607. The farthest target will be the area of 1.1685, where I recommend taking profits. In case the GBP/USD falls further and there are no bulls at 1.1471, the pair will be under pressure again. In this case, I advise you to postpone long positions until the next support at 1.1406 - this year's low, but you can act there only on a false breakout. I recommend opening long positions on GBP/USD immediately for a rebound from 1.1358, or even lower - around 1.1313, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Yesterday, the bears reached the lows of 2020, from where, quite expectedly, there should have been a rebound to the upside, which I have repeatedly paid attention to in my reviews. Today, much depends on the level of 1.1538. Therefore, I advise you to focus on it in the morning. The optimal scenario for opening short positions on GBP/USD would be forming a false breakout at 1.1538, a breakthrough to which may occur at the beginning of the European session. This will make it possible to achieve a sell signal with the goal of returning to the 1.1471 area - an intermediate support level formed yesterday afternoon. Only a breakthrough and test of this range would provide a new entry point for short positions with a fall to this year's low at 1.1406. A more distant target will be the area of 1.1358, where I recommend taking profits. In case GBP/USD grows and the bears are not active at 1.1538, there will be chances for a continuation of the upward correction, and bulls will have the opportunity to return to the 16th figure. Only a false breakout there will provide an entry point into short positions with the goal of a new decline from the pair. If traders are not active there, I advise you to sell GBP/USD immediately for a rebound from 1.1685, counting on the pair's rebound down by 30-35 points within the day. COT report: An increase in short positions was logged in the Commitment of Traders (COT) report for August 30, while long ones decreased. This once again confirms the fact that the British pound is in a major downward peak. Serious pressure on the pair will continue in the future, as the British economy is getting worse and worse, and GDP is shrinking quite quickly. The choice of a new prime minister of Great Britain will only provide temporary support to the pound, since, in fact, it does not change anything. In turn, the US economy continues to show strength, and recent data on the labor market once again convinced investors that the US central bank, led by Federal Reserve Chairman Jerome Powell, will continue to raise interest rates at an aggressive pace, which will only increase pressure on the British pound, which is experiencing quite a lot of problems lately. Expected high inflation and a looming cost-of-living crisis in the UK does not give traders room to take long positions, as a fairly large range of weak fundamentals is expected ahead, likely to push the pound even further below the levels at which it is currently trading. The latest COT report indicated that long non-commercial positions decreased by 306 to 58,477, while short non-commercial positions rose by 898 to 86,647, which led to a slight increase in the negative value of the non-commercial net position to -29,170 vs. -27,966. The weekly closing price collapsed from 1.1661 against 1.1822. Indicator signals: Trading is conducted in the area of 30 and 50-day moving averages, which indicates market uncertainty with the further direction. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair goes down, the lower border of the indicator around 1.1435 will act as support. In case of growth, the upper border of the indicator around 1.1570 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders. Relevance up to 09:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321134
The Upside Of The EUR/USD Pair Remains Limited

The Euro-Dollar Pair: Today The Price May Move Downward

InstaForex Analysis InstaForex Analysis 08.09.2022 10:07
Trend analysis (Fig. 1). The euro-dollar pair may move downward from the level of 1.0006 (close of yesterday's daily candle) to test 0.9977, the 23.6% retracement level (red dotted line). Upon reaching this level, an upward movement is possible to 1.0056, the 38.2% retracement level (white dotted line). From this level, the price may continue to move up. Fig. 1 (daily chart). Comprehensive analysis: General conclusion: Today, the price may move downward from the level of 1.0006 (close of yesterday's daily candle) to test 0.9977, the 23.6% retracement level (red dotted line). Upon reaching this level, an upward movement is possible to 1.0056, the 38.2% retracement level (white dotted line). From this level, the price may continue to move up. Alternative scenario: from the level of 1.0006 (close of yesterday's daily candle), the price may move downward to test 0.9952, the 38.2% retracement level (red dotted line). Upon reaching this level, an upward movement is possible to 1.0056, the 38.2% retracement level (white dotted line).   Relevance up to 07:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321120
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The GBP/USD Pair Hit The 2020 Low. The Bullish Dynamics Will Extend Today For The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 08.09.2022 10:20
Euro came close to parity, but it had nothing to do with the GDP data of the Euro area for the second quarter, which was better than the previous one. According to reports, the growth rate slowed to only 4.1%, indicating that the region is still away from recession than previously thought. EUR/USD did not increase immediately after the release of the GDP data, but after a couple of hours, when confidence grew that the European Central Bank will raise interest rates by 75 basis points today. Most likely, this bullish dynamics will extend today as ahead is the board meeting of the Federal Open Market Committee, as well as a speech from ECB Chairman Christine Lagarde. If Lagarde hints at a further tightening of monetary policy, euro will continue to grow. If not, everything will return to normal, and euro will fall again below parity. GDP (Europe): All the attempts to keep EUR/USD below 0.9900 failed, so euro slipped back into parity. Most likely, speculation will take place in the market, which is why further growth in the pair is possible. But the overheating of long positions in the short term may ultimately lead to the exit of many players in the market. GBP/USD hit the 2020 low, but market participants failed to make it stay below. This is why the quote rolled back by 130 pips. In this situation, much will depend on speculators as they have a strong positive correlation between trading instruments.       Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321126
PLN: NBP (National Bank Of Poland) Chose 25bp Variant, What Can We Expect From Today’s Press Conference?

PLN: NBP (National Bank Of Poland) Chose 25bp Variant, What Can We Expect From Today’s Press Conference?

ING Economics ING Economics 08.09.2022 10:04
Today's press conference should be dovish, but we don’t expect the governor to definitively end the tightening cycle given the CPI peak ahead (at close to 20% in Feb-22 in our view) and continued upside risk for inflation Poland's central bank The MPC raised interest rates by 25bp (the reference rate to 6.75%), in line with our view and consensus expectations. The switch to smaller 25bp increments in the tightening cycle (the previous hike was 50bp in July), reflects policymakers' growing concern about economic growth prospects. At the same time, however, inflationary pressures persist. In August, inflation rose to the highest level in decades at 16.1% year-on-year. Moreover, the inflation outlook remains highly uncertain, as the economy has yet to fully absorb the new energy shock. This process has already started and is one of the reasons why core inflation resumed its strong sequential rise in August, to around 10% YoY. Companies continue to pass on rising costs to the prices of their goods and services. In our view, the inflation peak is still ahead and we see CPI at about 20% YoY in February 2023. The key changes in the communiqué suggest that the Council is strongly counting on the economic slowdown to reduce inflation. However, we are concerned that the GDP slowdown alone will not materially accomplish this goal. The latest energy shock is so powerful that companies will continue to pass on costs to product prices, even in a weaker economy. We also expect a large fiscal expansion in 2023. European governments want to show that the gas war will not derail their economies. This is a reasonable approach but Poland already has a very expansionary policy mix. So the side effect of these energy programmes could be persistently high inflation, and this risk is quite high in the Polish economy. In this environment, the MPC is likely to avoid explicit declarations about the imminent end of the hike cycle, leaving themselves wiggle room for further monetary tightening. In our view, interest rates could ultimately rise to 7.5% in the current cycle, and there will be no room for monetary easing in 2023, especially if there is further fiscal expansion as households and sensitive industries are protected from the consequences of rising energy prices in the forthcoming election year. Key to shaping market expectations for the monetary policy outlook will be the tone of today's press conference by NBP President Adam Glapinski. We are concerned that the president will again strike a dovish tone, although in light of the uncertainty about the further course of the inflation path, he is unlikely to explicitly declare his readiness to end the cycle of rate hikes. Also, he can again announce that conditions for interest rate cuts may emerge at the end of 2023. The prime minister spoke about the approaching end of interest rate hikes on Tuesday. The main changes in MPC press statement 1. unchanged paragraphs talking about future rates 2. counting on the GDP slowdown to lower CPI 3. no longer listing demand pressures among risks to CPI 4. noting high core inflation 5. noting strong labour market and wages. A dovish statement from President Glapinski today would make the zloty exposed to a falling EUR/USD. Also, the National Bank of Poland's approach compared to the region suggests that the PLN should remain weak. The National Bank of Hungary is raising rates and communicating that it will tighten further. The Czech National Bank has stopped raising rates but is intervening to defend the koruna. The NBP says it will soon end the cycle of increases and may even start to cut rates from next year. But it is not intervening. So it is difficult to be optimistic about the zloty exchange rate. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ECB press conference brings more fog than clarity

The EUR/USD Pair: A Break Below 0.9945 Level Would Be A New Bearish Signal

InstaForex Analysis InstaForex Analysis 08.09.2022 10:46
EURUSD bounced higher yesterday from 0.99 towards 1. In the 4 hour chart price is challenging the Kumo (cloud) resistance. So far price shows rejection signs and vulnerability to the downside. Resistance by the cloud is at 1. In order for bulls to hope for bigger bounce, we should first see a break above the 4 hour cloud resistance. The tenkan-sen (red line indicator) and the kijun-sen (yellow line indicator) provide short-term support at 0.9945. A break below this level would be a new bearish signal and will increase chances of seeing a move below 0.99 towards 0.9850-0.98.     Relevance up to 10:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/291955
The Collapse Of The Silicon Valley Bank Weakened The Dollar And USD/JPY But Supported EUR/USD, AUD/USD, And GBP/USD

Is The Dollar's Streak Coming To End?

InstaForex Analysis InstaForex Analysis 08.09.2022 11:13
Red line- parabolic shape Black lines- Fibonacci retraceents Blue line- bearish RSI divergence The Dollar index is making new higher highs every week. Bulls remain in full control of the trend and technically there is no sign of a reversal. There are signs by the RSI that the bullish momentum is weakening and the candlestick pattern is taking a parabolic shape. Is this the time to be short or open new short positions? We are not clairvoyant. However it is wise for bulls to be cautious. More than a year ago and more specifically in March and April of 2021 when the Dollar index was trading around around the 90 level, we warned bears that the similarities to 2017 and the upward reversal that followed the bottom around 90, were very possible to be repeated to another rally towards at least 103. Now it is time for us to warn Dollar bulls. We do no try to call a top. Bulls should protect their gains and try to form strategies for a coming reversal. Already the weekly candlestick is showing topping signs although it is still too early. In the scenario that the top is already in, a minimum pull back towards 103-102 is expected. Such a pull back should not be ignored. I expect the up trend in the Dollar index to show signs of a reversal over the coming weeks. Technically such a pull back is justified. Parabolic rises tend to have violent corrections. So traders need to be on their toes.   Relevance up to 11:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291961
JPY: Assessing the FX Intervention Zone and Market Conditions

The Euro Can Locally Receive Support In The Market From Buyers, The Pound Is Oversold

InstaForex Analysis InstaForex Analysis 08.09.2022 11:32
Details of the economic calendar for September 7 The European statistical agency Eurostat report on the third final estimate of GDP in the second quarter showed an increase of 4.1% in annual terms and 0.8%. The actual data came out better than the preliminary estimate, but this did not help the euro at the time of publication. Analysis of trading charts from September 7 The EURUSD currency pair tried to overcome the control value of 0.9900 for three days in a row, but the market participants failed to stay below it in the daily period. This resulted in a price rebound, which led to a reverse move towards the parity level. The GBPUSD currency pair did not just update the 2020 low (1.1410), the quote for a while turned out to be at the levels of 1985 . This historical event was instantly won back by speculators in the form of a technical pullback. As a result, the rate of the pound sterling returned above 1.1500. Economic calendar for September 8 The main event of Thursday, and the whole week, will be the meeting of the European Central Bank (ECB). Without any doubt, the market is waiting for the regulator to raise the interest rate from 0.50% to 1.25%. This event has already been taken into account in the market but will still attract the proper attention of speculators, because a change in the rate by 75 basis points at once is a historical event. Thus, the euro can locally receive support in the market from buyers. After that, all attention will be focused on the subsequent press conference, where specifics are expected from the head of the ECB, Christine Lagarde. The ECB's comments will indicate the subsequent price move in the market. Time targeting: Results of the ECB meeting – 12:15 UTC ECB press conference – 12:45 UTC ECB President Christine Lagarde speech – 14:15 UTC Trading plan for EUR/USD on September 8 Despite the possible overheating of long positions, in short-term time periods, speculators can still send the euro up due to the results of the ECB meeting. In this case, local price movement above 1.0050 is not excluded. In the work, it is worth considering that speculative hype is not the basis for a stable price movement. In the event of a minimal change in the mood of speculators, mass fixation of long positions is possible, which will lead to a reverse price move. Trading plan for GBP/USD on September 8 In this situation, there is still a signal that the pound is oversold, which, with rational technical analysis, could lead to the formation of a full-size correction. Everything would be exactly like this if there were no information and news flow, as well as other factors of pressure on the quote. Today there will be a lot of envy from the behavior of speculators in the euro market since, in this case, the European currency will be considered the leading one. Thus, synchronous price fluctuations will occur through a positive correlation between trading instruments. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.   Relevance up to 10:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321156
PLN Soars to Record Highs Ahead of NBP Decision

EUR/USD: What Currency Pair Look Like In Short- And Long Position?

InstaForex Analysis InstaForex Analysis 08.09.2022 11:41
Analysis of transactions in the EUR / USD pair Euro tested 0.9893 at the time when the MACD was far from zero, which limited the downside potential of the pair. Sometime later, it tested the level again, but this time the market signal that was to buy, which led to a price increase of around 60 pips. No other signals appeared for the rest of the day. The Q2 GDP data of the Euro area was revised upwards, which led to a slight increase of EUR/USD on Wednesday morning. Although sellers attempted to push the quote to the yearly lows, no such thing happened. Today, markets are waiting for the decision of the ECB on interest rate, as well as the report on monetary policy and press conference at which Christine Lagarde will announce further plans to raise interest rates. Euro could strengthen and gain a foothold above parity, but only if the policy continues to be aggressive. In the afternoon, the US will release data on jobless claims, followed by a speech from Fed Chairman Jerome Powell. He might hint at further rate hikes, which would put pressure back on euro and prompt a stronger dollar. Data on the volume of consumer lending will not affect the market in any way, especially after such statistics. For long positions: Buy euro when the quote reaches 1.0010 (green line on the chart) and take profit at the price of 1.0085. Growth may occur if the European Central Bank raises rates by 0.75%. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9985, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0010 and 1.0085. For short positions: Sell euro when the quote reaches 0.9985 (red line on the chart) and take profit at the price of 0.9941. Pressure will return if traders are disappointed by the decision of the ECB. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0010, but the MACD line should be in the overbought area, as only by that will the market reverse to 0.9985 and 0.9941. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 09:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321142
Bitcoin Maintains A Steady Bullish Potential

Will Bitcoin's Situation Improve? The First Signal For A Gradual Stabilization

InstaForex Analysis InstaForex Analysis 08.09.2022 12:01
The cryptocurrency market and Bitcoin are entering another phase of a bear market. The capitalization of all digital assets once again dipped below $1 trillion, which indicates a decrease in buying activity and aggravation of short-term negative factors. Despite this, Bitcoin managed to realize a local bullish momentum and gain a foothold above $19.1k. The bullish rebound of the cryptocurrency once again proved the powerful foundation of Bitcoin. The main cryptocurrency fell to the lower limit of the $18.5k support level, but subsequently the buyers did not let the price go lower. As a result, Bitcoin formed a green candle and settled above $19k. In the local perspective, this is a positive moment, which will delay further price reduction. At a distance of 7–10 days, the rebound of the cryptocurrency is not of fundamental importance, as the situation remains bearish. The green candle following the results of September 7, was unable to absorb the volumes of sellers. Technical metrics confirm that the bears have the initiative. The RSI and Stochastic tried to realize a bullish momentum, but in the end, the metrics reversed under the pressure of the sellers. On the daily timeframe, we see how the price of Bitcoin is gradually approaching the assault on the final support segment of $18.5k–$19.1k. BTC/USD quotes have completed the first spike at the $18.5k level. Most likely, over the next few days, we will see a retest of the support area. The next stage of the price fall will provoke a news background that risks confirming the pessimistic expectations of the market. Despite this, many analysts point out that Bitcoin is showing a high level of resilience in the current bear market. This indicates a high level of fundamental interest in Bitcoin, which can soon change the situation for the better. The first signal for a gradual stabilization of the situation was the unexpected conclusions of Arcane Research about the financial stability of public mining companies. Analysts have confirmed that the majority of miners are facing financial difficulties due to the energy crisis as well as the fall in the price of Bitcoin. However, thanks to large stocks of cryptocurrencies and financial reserves, mining companies survived. As of September 8, none of the public miners have filed for bankruptcy. Given this fact, as well as the gradually growing Bitcoin hashrate (+9% in August), Arcane concluded that the worst period for miners is over. In addition to the hashrate, this is evidenced by the positive dynamics of the growth of reserve volumes of mining companies. The improvement in the situation of mining companies was largely due to the constant sale of BTC coins for liquidity. At the moment, this process exerted strong downward pressure on the price of the cryptocurrency. If you look at the situation in the long term, then the sale of miners is a logical and healthy process of transferring coins to long-term investors. This is the process we have been observing for the last three months. During this period, the number of wallets with 0.1–10,000 BTC updated absolute highs, confirming the active period of accumulation, which is typical for Bitcoin corrective cycles. There is also an active decrease in the balances of BTC coins on crypto exchanges. Now we are approaching an ambiguous factor that can have a different effect on the capitalization of Bitcoin. The Fed's hawkish policy raises more and more questions within the US and provokes a recession in the US economy. At the same time, inflation remains high, and the department's goal, according to Powell, remains around 2% per annum. Fed officials have also repeatedly stated that they will maintain the agency's current course until significant results appear. This suggests that the situation will not change dramatically in the coming months. The positive here is the BBG study, according to which the market lays a 70% chance of a 75 basis point rate hike in September. The market has adapted to the shock therapy from the Fed, and therefore we should not expect a significant increase in volatility during this period. Despite the leveling of local problems with the fall of markets, the global situation does not change. The liquidity crisis complicates the situation for the entire industry, and therefore there is no reason to count on the growth of capitalization. Given the rate of inflation decline, as well as the current level of the key rate, the situation will begin to change dramatically in November 2022. The catalyst for the growth of Bitcoin and the cryptocurrency market will be the elections to the US Congress. Most analysts are inclined to believe that the government will inject liquidity into the markets to improve economic health before a major political event. In addition, by November, the rate will remain at a high level for quite a long period of time, which suggests an increase in the rate of decline in inflation. Given these factors, we can assume that the first thaw after the crypto winter will occur in November. However, it is still too early to judge its fundamental impact on the cryptocurrency market due to insufficient statistical data.       Relevance up to 10:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321160
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

How Will The Decisions Of The ECB And The Fed Affect The Main Currency Pairs?

InstaForex Analysis InstaForex Analysis 08.09.2022 12:49
Global equity markets rebounded after dollar and US Treasury yields pared losses on Wednesday. It seems that risk appetite recovered on the eve of the ECB meeting on monetary policy as many expect the central bank to raise the key interest rate by 0.75%. Investors also paid attention to published economic statistics, such as the Q2 GDP of the Euro area, which grew by 0.8% instead of 0.6%. Its previous data was also revised upwards to 0.5%. In annual terms, the indicator added up to 4.1%, but is significantly lower than the previous figure of 5.4%. Other data showed that industrial production in Germany returned to negative in July, as evidenced by industrial output figures. These data, as well as the decision of the ECB to consider emergency measures to curb electricity price surges, pushed the local stock market and euro up. However, dollar's fall was not really caused by them as it is more likely prompted by the warning made by Fed member Lael Brainard about the risk of too-high interest rates. If the Fed withstands pressure and continues to follow the current cycle of raising rates, a new wave of sell-offs will be seen stock markets, while demand for dollar will grow. Talking about the upcoming ECB meeting, it is likely that the central bank will increase rates by 0.75% to curb inflation. This will push EUR/USD up to 1.1000 and support other currencies including the British pound. But if Jerome Powell talks about continued aggressive actions by the Federal Reserve, the US stock market will collapse, while Treasury yields and dollar will grow. This will limit the rally of euro, preventing it to break through 1.1000. Forecasts for today: EUR/USD The pair is consolidating below 1.0010. It could rise to 1.0080 if the ECB raises the rate by 0.75% and makes it clear that they will continue to act aggressively in the future. USD/CAD The pair is consolidating above 1.3100. Continued growth in crude oil prices, as well as a tough policy of the Bank of Canada, may lead to a fall to 1.3015.     Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321136
The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

The Pound Is Under Pressure, The Fed Actions Weaken The GBP/USD Pair?

InstaForex Analysis InstaForex Analysis 08.09.2022 12:59
Analysis of transactions in the GBP / USD pair Pound tested 1.1490 at a time when the MACD line was just starting to move below zero, which was a good signal to sell. That prompted a price decrease of around 60 pips, bringing the quote to 1.1427. Then, buyers became active in the market, so the pair rose by 20 pips. No other signals appeared for the rest of the day. Parliamentary hearings on the Bank of England's monetary policy and speech from Andrew Bailey increased pressure on pound as it became clear to traders that the pace of interest rate increases will not slow down even though the UK economy has been shrinking very much lately. As a result, pound hit new lows, which traders took advantage of to take profits. This led to dollar not growing in the afternoon despite the statements of FOMC members Loretta Mester and Lael Brainard There are no statistics scheduled to be released in the UK today, so markets will focus on the report on US jobless claims. Fed Chairman Jerome Powell will also speak, and it is likely that it will cause a decline in GBP/USD as he may hint at further aggressive actions by the Fed. Data on the volume of consumer lending will not affect the market in any way, especially after such statistics. For long positions: Buy pound when the quote reaches 1.1519 (green line on the chart) and take profit at the price of 1.1574 (thicker green line on the chart). Growth will occur if risk appetite recovers after the meeting of the European Central Bank. Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1494, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1519 and 1.1574. For short positions: Sell pound when the quote reaches 1.1494 (red line on the chart) and take profit at the price of 1.1427. Pressure will return after a slight upward correction and failed attempt to consolidate above 1.1519. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1519, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1494 and 1.1427. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 09:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321144
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The Euro To The US Dollar Is Expected To Print One More High Intraday

InstaForex Analysis InstaForex Analysis 08.09.2022 13:07
Technical outlook: EURUSD rallied through the 1.0016 intraday highs intraday on Thursday before pulling back below the 1.0000 handle briefly. The currency pair might have carved a flat correction and is now pushing higher again towards 1.0075-80 in the near term. It is seen to be trading close to the 1.0015 mark after carving an intraday low at around 0.9975. Looking higher from here. EURUSD might be set up to unfold a larger-degree corrective rally towards the 1.0800-1.0900 area. The currency pair is looking poised to retrace its earlier downswing between 1.2350 and 0.9863 respectively. A minimum push is probable towards 1.0800, which is also the Fibonacci 0.382 retracement of the entire drop. EURUSD is expected to print one more high towards 1.0075 intraday before carving a lower-degree upswing. Prices are expected to retrace thereafter before turning higher towards 1.0400-1.0500 and higher in the coming weeks. The bullish divergence scenario on the daily chart has turned out strong with prices rallying from the 0.9963 lows. Trading plan: Potential rally towards 1.0800-1.0900 against 0.9800 Good luck!   Relevance up to 12:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a tra Read more: https://www.instaforex.eu/forex_analysis/291985
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

The Euro To The US Dollar And Its Further Direction

InstaForex Analysis InstaForex Analysis 08.09.2022 13:51
Technical analysis: EUR/USD has been trading upside this morning and it is aproaching the key resistance leveele at 1.0075. Watch for the reaction of this key pivot resistance to confirm further direction. In case of the rejection of key resistance at 1.0075, watch for the downside rotation towards 0.9975 and 0.9885 In case of the upside breakout of 1.0075, watch for the buying opportunities on the intraday dips with the upside objective at 1.0128     Relevance up to 13:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291991
Gold Stocks Have Performed Very Well Under Pressure

How Trade The Gold Today? The Buying Opportunities Or The Selling Opportunities ?

InstaForex Analysis InstaForex Analysis 08.09.2022 13:55
Technical analysis: Gold has been trading upside this morning and it is approaching the key resistance level at $1.726. Watch for the reaction of this key pivot resistance to confirm further direction. In case of the rejection of key resistance at 1.726, watch for the downside rotation towards $1.690 In case of the upside breakout of 1.726, watch for the buying opportunities on the intraday dips with the upside objective at $1.741 Read more: https://www.instaforex.eu/forex_analysis/291993 Relevance up to 13:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291993
Authorities In Australia Have Announced Their Intention To Regulate Cryptocurrencies In 2023

Ethereum: The Bulls Are Looking Poised To Remain In Control

InstaForex Analysis InstaForex Analysis 08.09.2022 14:22
Technical outlook: Ethereum has rallied through the $1,657 highs after recovering from the $1,489 lows on Wednesday. The price action is in line with our projection as the bulls prepare for another push towards $1,700-10 in the near term (intraday). The bulls are looking poised to remain in control holding prices above the $1,489 interim lows going forward. the price is looking higher towards $1,750 and $1,800. Ethereum has carved a larger-degree downswing between $2,031 and $1,423 as seen on the 4H chart here. Since then, the crypto has been unfolding a corrective rally, which seems to have completed two waves at $1,722 and $1,489. Further, the bulls are now progressing into the final wave towards $1,800, which is also the Fibonacci 0.618 retracement of the earlier drop. Ethereum is currently working on its first lower-degree upswing between $1,489 and $1,657-1,700. Once the price action is over, prices could drop lower in a corrective manner but they still stay above $1,489. The bulls will be poised to be back in control thereafter and push through $1,800 before giving in to the bears. $1,489 should remain intact for the above structure to hold. Trading plan: Potential rally towards $1,800 against $1,489 Good luck!     Relevance up to 14:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291999
Forex: Naturally ECB Decision Is The Key Event Today, How Could 50bp Hike Affect EUR/USD?

Forex: Naturally ECB Decision Is The Key Event Today, How Could 50bp Hike Affect EUR/USD?

ING Economics ING Economics 08.09.2022 10:01
The highlight of today's FX session will be the European Central Bank meeting. We are looking for a sub-consensus 50bp hike which in theory may see EUR/USD edge lower after a modest recovery overnight. We will also hear a speech from Fed Chair Jerome Powell at 1510 CET. As usual, we expect the dollar to remain supported on any intra-day dips Over recent weeks and months, we had felt that sterling could hold its own against the weakened euro – but clearly it has failed to do so   USD: Powell to stay hawkish The dollar has entered another consolidative phase - albeit very close to the highs of the year. Following Fed Chair Powell's hawkish Jackson Hole speech a couple of weeks ago, the pricing of the Fed cycle has remained remarkably steady. The cycle is priced to peak around 3.90% next spring and soften to 3.60% by the end of the year. We suspect that year-end 2023 pricing of a cut still could be priced out as the Fed continues to emphasise that policy needs to be taken into restrictive territory and to be kept there for a while. A fresh dose of Fed hawkishness should come in a speech by Fed's Powell to the Cato institute at 1510 CET today. With the Fed/dollar side of the FX equation pretty steady, there is an increasing focus on how trading partners will react. Overnight, the Reserve Bank of Australia's (RBA) Governor Philip Lowe said that it would probably be shifting to a slower pace of hikes - comments that weighed on the Australian dollar. We comment on today's main event, the ECB meeting, below, but there is also much focus on USD/JPY this week. This has surged over 3% and remains in the vanguard of the strong dollar/energy crisis story. Japanese policymakers have increased their rhetoric in support of the yen - e.g. calling the moves one-sided - but equally, comments from the finance minister that a weak yen has 'its merits and demerits' are not providing a consistent message here. In early European trade, USD/JPY has sold off on news of a meeting between the Bank of Japan, Finance Ministry and Financial Services Agency - potentially to discuss FX intervention. But the base case is probably that we do not see intervention until closer to 150 in USD/JPY. And the FX options market certainly does not see the imminent risk here. Still, USD/JPY implied volatility looks too cheap in our opinion. The ECB meeting will be key for European currencies and the DXY today. We are not looking for a significant reversal anytime soon and think corrections probably hold the 109.00/109.25 area Chris Turner   EUR: ECB to comment more directly on the euro? Please see our full ECB preview here. We have also outlined a scenario analysis in our ECB crib sheet. Our base case is that the ECB only hikes 50bp versus the 75bp consensus and the 67bp priced by money markets. In theory, that should be a euro negative and we have a base case of EUR/USD dropping back to 0.9900. In our experience, EUR/USD has always been a tough call on ECB day and the upside risks to the euro stem from a hawkish message from the ECB. Particular interest might be had in the 2024 CPI forecast which in June was predicted at 2.1%. Upside or downside revisions here could help determine whether the market is correct in pricing a 225bp ECB tightening cycle into 2023. Certainly, our macro team thinks the ECB will not deliver on such a cycle. It will also be interesting to see how President Christine Lagarde (press conference 1430 CET) handles any questions on the weak euro - where EUR/USD sub parity is contributing to the energy shock. Her hands will be tied as to what she can say - the G7/G20 agrees on market-determined exchange rates - but any comments along the lines of the ECB is 'watching FX closely' could trigger a brief counter-trend rally in EUR/USD. That said, EUR/USD is trading down here for solid macro reasons and we doubt any intra-day rallies last. We would assume that 1.0100 proves the extent of any EUR/USD short squeeze and would favour a move back to 0.9900. Chris Turner     GBP: How fiscal package is funded will drive sterling The highlight of today's sterling session will be the announcement of the new UK government's energy package and in particular how it is funded. The announcement comes around lunchtime. The greater amount of public funding, the greater the Gilt supply and the greater the pressure on sovereign risk and the pound. Our team discusses the challenges faced by this topic here. After a brief rally earlier this week, the pound is looking soft again. Our base case would assume that GBP/USD struggles to break 1.16 and EUR/GBP tests the June high at 0.8720. Basically, new PM Liz Truss is undertaking a highwire act and it will be a real challenge to refloat the UK economy without concerns growing about how the UK funds it. Chris Turner    CEE: Divergence emerges between floating FX in region In line with surveys, the National Bank of Poland hiked the key rate by 25bp to 6.75%. The MPC statement saw only cosmetic changes. The council hopes the slowing economy will translate into slower inflation and the forward guidance for rates remained unchanged. Today, we will see Governor Adam Glapinski's press conference which should show the full picture and hint at what else we can expect this year. With markets expecting a bit more from the central bank after surprisingly high inflation, rates are lower across the curve, which has led to the interest rate differential falling to its lowest level since March of this year. The Polish zloty strengthened slightly, likely supported by the fall in gas prices. The drop in rates over the past two days may be enough to cover the governor's dovish press conference, but we hardly see the outcome supporting the zloty today. Thus, as we mentioned yesterday, we see room for an upward move into the 4.74-4.76 EUR/PLN band. Meanwhile, in Hungary, the forint has reached its strongest levels since mid-August after rates jumped by 15-30bp across the curve, though on zero liquidity. So while the forint has followed the rate move, we see no reason for levels below 400 EUR/HUF for now. However, August inflation could come into play today. Peter Virovacz, our economist in Budapest, expects a jump from 13.7% to 16.2% year-on-year, above market expectations. Part of the jump is due to changes in the fuel price caps. Thus, a surprise in inflation could support rate hikes and support current forint levels. However, to keep levels below 400 in the long term, we would like to see some tangible progress in EU talks, which could come in the coming weeks.  Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Price May Fall Under 1.0660

European Central Bank (ECB) Hiked The Interest Rate. The Question Is What's Next...

ING Economics ING Economics 08.09.2022 15:23
The European Central Bank has decided on the largest rate hike since the start of the monetary union and has given the impression that it is fully determined to do more   The ECB did it. In a historic move and the single largest rate hike since the start of the monetary union, the ECB just announced it will hike all three policy interest rates by 75bp. At the same time, the ECB decided to suspend the two-tier system by setting the multiplier to zero. With today’s decision, it is clear that the ECB has given up on inflation targeting and forecasting and has joined the group of central banks focusing on bringing down actual inflation. It’s not so much a new strategy based on conviction but rather a strategy based on missing alternatives. We still can’t see how monetary policy can bring down inflation that is mainly driven by (external) supply-side factors. Even the impact of policy rate hikes on inflation expectations is anything but certain. At the same time, the size of today’s rate hike will not determine whether or not the eurozone economy slides into recession and will also not make the recession more or less severe. Any recession in the eurozone in the winter will be driven by energy prices and not by interest rates. Today’s decision shows that the doves and hawks are on the same page. We will have to wait for ECB President Christine Lagarde’s comments at the press conference but at face value, today’s decision shows that the ECB is willing to hike interest rates towards the upper rather than lower end of the range of neutral interest rates. In our view, this range for the refi rate is between 1% and 2%. It indeed looks as if the doves have left the ECB nest. While Christine Lagarde had not made any public remarks on monetary policy since the end of the summer, ECB Chief Economist Philip Lane went on record calling for a more gradual and measured approach to normalising rates. Today’s decision shows that Lane’s influence in ECB decisions has been significantly diminished. For us, today’s decision also means that we will have to strongly adjust our ECB call. Dovishness is no more, even if the ECB is still far more optimistic about growth (+0.9%) in 2023 than we are (-0.6%). The question remains whether the ECB would really be willing to continue hiking as aggressively as they are suggesting if the recession becomes reality. Hiking into a recession is one thing, hiking throughout a recession another. Let's stay tuned to see whether the ECB press conference, starting at 2.45pm CET will bring any additional insights. Read this article on THINK TagsMonetary policy Inflation Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Research Firm Is Carrying Out A Sum-Of-The-Parts Valuation For Essential Utilities' Water And Gas Businesses

You May Not Know That Sweden Is Also Affected By Energy Concerns

ING Economics ING Economics 08.09.2022 15:44
Despite a hawkish Riksbank, SEK may struggle to recover before next year. Europe’s energy crisis is impacting Sweden both directly and indirectly, while global risk sentiment remains unstable. Riksbank’s FX reserve build-up may also get in the way of a near-term recovery. This week’s general election shouldn't have much impact on the currency Source: Shutterstock Sweden isn't immune from Europe's energy crisis Sweden is far from immune from Europe’s energy crisis and rising recession risk. That’s perhaps a little surprising, given Sweden uses little-to-no gas in its power system and uses relatively little for domestic heating either. Instead, the country relies predominantly on hydro (in the north of the country) and nuclear power (in the south). And in the case of the former, reservoir levels are fuller than usual for this time of year, despite drought conditions in much of Europe. That typically bodes well for keeping power prices in check. But the reality is the energy system isn’t balanced. Hydro-rich Luleå in the north, one of Sweden’s four electricity bidding zones, has typically paid less than 30 EUR/MWh for power in recent months. However, in the much more populous south, which saw nuclear power plant closures last year, prices have topped 300 EUR/MWh in recent days. The reality is that the electricity grid in southern regions is often reliant on imported power, which in some cases comes from gas-powered generation. It’s these areas that account for the vast majority of Sweden’s power usage, and these prices have often proven closely comparable to Germany and other European countries. Sweden's electricity prices vary dramatically across the country Source: Macrobond, ING   The bottom line is that Sweden is just as exposed as many of its neighbours to energy price spikes this winter. And that means that, like the eurozone, Sweden is likely heading for a recession – even if it's a mild one. Consumer confidence has hit all-time lows, and real consumer spending has begun to inch lower. A contraction in house prices is also underway, where the sharp rise in mortgage rates is affecting the 40-50% of customers on a floating rate. Riksbank should remain hawkish For the time being, this isn’t getting in the way of aggressive Riksbank tightening. The jobs market is exceptionally tight right now, and that’s very important ahead of multi-year wage negotiations due to conclude in coming months. Almost 90% of Swedish employees are covered by collective bargaining, and inflation expectations among both employer/employee organisations have spiked. An agreement that locks in faster wage rises over the next three years, compared to the last set of negotiations that took place in the midst of the pandemic, is likely and is at the heart of the Riksbank’s argument for hiking rates. We expect a 75bp rate hike at the September meeting, which partly reflects a need to front-load hikes, but is also because the Riksbank has fewer scheduled meetings than many of its counterparts. It has to make each meeting count. SEK recovery delayed as European growth worries mount Despite the central bank’s hawkish pivot this year, the krona has been the worst performing G10 currency (-15% vs USD) after the Japanese yen since the start of the year. The reasons are well known: the Ukraine conflict, the equity sell-off, and an ever-worsening outlook for Europe on the back of high energy prices and inflation. We had held a relatively sanguine approach on pro-cyclical currencies like SEK for most of the year, assuming a rather optimistic base-line scenario for the global economy and risk sentiment. Recent developments have convinced us that what appeared to be short-term woes before the summer are now more serious and long-lasting concerns, especially when it comes to Europe’s recession risks. The implications for SEK are big. With our economics team now expecting a eurozone recession around the turn of the year and flagging a very elevated risk of the gas supply crisis extending into the next year, SEK’s role as a proxy trade for European sentiment as a whole is set to limit its ability to stage a major recovery.   In our view, this story will prevent EUR/USD from climbing back to 1.05 before early next year, and given SEK’s high sensitivity to Europe’s growth outlook, we forecast EUR/SEK at 10.60 in 4Q22. In the coming weeks, the balance of risks remains tilted to the upside, and a further deterioration in risk sentiment could prompt a re-test of July’s recent high (10.78) and potentially March’s highs (10.86). In 2023, some improvement in the eurozone’s story and the end of global tightening cycles should help pro-cyclical currencies, including SEK, to re-appreciate. A calmer market environment may also revamp the search for carry and allow SEK to benefit from its relatively more attractive rate profile compared to EUR. As shown in the chart below, the 2-year EUR-SEK swap rate differential (which mirrors the ECB-Riksbank policy divergence) is the widest in favour of SEK in nearly a decade. We expect a gradual return to 10.00 over the course of 2023, although geopolitical and energy-related developments do pose non-negligible risks to this profile. Policy divergence points at weaker EUR/SEK Source: Refinitiv, ING Riksbank adding pressure on SEK with reserve build-up While the likes of the ECB and Bank of England are vocally protesting against their weak domestic currencies, the Riksbank’s acceleration in FX reserves build-up since February (from SEK 5.5bn to SEK 11.6bn per month) may well have exacerbated SEK weakness. Even more crucially, it does send a counterintuitive signal to markets as a weak currency neutralises the anti-inflationary effects of monetary tightening. However, Riksbank’s Deputy Governor Martin Floden recently ruled out any tweak to FX purchases as – he said - reserve management is independent from monetary policy.  Assessing the effective impact of the Riksbank’s FX purchases on SEK is quite hard, especially in a period of elevated FX volatility. Since the end of 1Q22, the Riksbank’s foreign currency reserves have risen by SEK 88bn, and if the reserve composition has remained the same as of April 2022 (chart below), and we exclude valuation effects, the Riksbank would have sold around SEK 55bn versus USD and SEK 18bn versus EUR in five months. We think the ongoing FX build-up could help keep a cap on SEK in the near term, but we doubt that would be able to counter any strong macro-driven recovery in 2023. Riksbank has accelerated FX reserves accumulation Source: Riksbank, ING Election unlikely to have material impact on currency Sweden goes to the polls on Sunday, and it’s looking highly uncertain. The incumbent Social Democrats are polling at roughly the same level as in 2018 at roughly 30%. But broken down by the two potential broad coalitions or groupings, it’s virtually neck-and-neck. Having said that, the impact on the broader financial market is less clear. Economic issues haven’t dominated the campaign, and perhaps surprisingly it’s crime and the country’s migration policy, that has instead been the central focus. And while the election has the potential to deliver a more right-leaning government, Sweden is among the most favourable towards the EU among member states, according to Pew Research. A tight election race Source: Various polls, ING Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EUR/USD Pair Has Potential For The Downside Movement Today

It Is Said ECB, Like Fed And Bank Of England Put Battle With Inflation Before Escape From Recession

ING Economics ING Economics 08.09.2022 16:26
EUR/USD has stabilized today, after sliding 1.0% on Wednesday. In the European session, EUR/USD is trading at 1.0009, up 0.09%. All eyes on ECB What can we expect from the ECB at today’s meeting? A large rate increase is a given. The markets have priced in a supersize 0.75% hike, although the ECB could opt for a less dramatic rise. Earlier this week, eurozone government yields fell sharply today on reports that the ECB was considering a 0.60% move. The ECB has raised rates by 0.75% only once in its history, but the current economic landscape is such that there are strong arguments in support of such a massive move. Inflation in the eurozone remains red hot, with an August estimate of 9.1%. ECB members such as Isabel Schnabel have urged the central bank to come down hard on inflation, which is yet to show any signs of a peak. With the euro stumbling at 20-year lows, a 0.75% hike would likely give the currency a badly-needed boost. The main drawback of a 0.75% move is the weak state of the eurozone economy, which has been made worse by the Ukraine war. Russian cutoffs of natural gas to Europe have become a frequent occurrence, as Moscow as proven to be an unreliable energy supplier. Germany, so often the locomotive which has pulled the eurozone back on track, is also grappling with weak growth. Eurozone and German PMIs are pointing to contraction or stagnation in manufacturing and business activity. With a recession a very real possibility, a 0.75% would raise the likelihood of a recession. The Federal Reserve and Bank of England have made clear that taming inflation is more important than avoiding a recession, and the thinking of ECB policy makers is likely the same. If the ECB does deliver a 0.75% hike, we could see the euro respond with gains. EUR/USD Technical EUR/USD is testing resistance at 0.9984. The next resistance line is 1.0056 There is support at 0.9888 and 0.9816 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Will ECB deliver 75 basis point hike? - MarketPulseMarketPulse
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

Japanese Yen (JPY) Could Go Even Lower As The Monetary Policies Of Fed And Bank Of Japan Are Totally Dissimilar

Kenny Fisher Kenny Fisher 08.09.2022 16:29
The Japanese yen remains under pressure. In the North American session, USD/JPY is trading at 143.96, up 0.14%. The yen came within a whisker of the 145 line on Wednesday, touching 144.99. Japan sounds alarm as yen slips The yen continues its nasty slide. USD/JPY has jumped about 8% since August 1st, and continues to record new 24-year highs. It’s not just that the yen is trading close to 145, but the speed at which the Japanese currency is depreciating. USD/JPY broke above the 140 line on September 1st and the dollar onslaught has continued without letup. The yen’s most recent fall has, predictably, resulted in Japanese officials sounding the alarm. Masato Kanda, Japan’s top currency official, said today that the government and the BoJ were “extremely worried” about the recent yen moves, and are watching the currency markets with a strong sense of urgency. Kanda added that “the government is ready to take action in the currency market”, but his remarks have done nothing to stop the yen’s downswing. Investors have heard this rhetoric time and time again, without any action from Tokyo. The last time Japan intervened in the currency markets to prop up the yen was in 2011, and the BoJ is committed to an ultra-loose policy to support growth, and Governor Kuroda has ruled out tightening policy until inflation remains sustainably above 2%, along with higher wage growth. Inflation is running close to 3%, but this is mainly due to higher import costs, which the BoJ considers a temporary cause of rising inflation. With the government unlikely to intervene and the BoJ suppressing any rate increases, the yen is at the mercy of the US/Japan rate differential, which has been moving higher. With the Fed expected to remain aggressive, the yen is likely to continue heading lower. USD/JPY Technical There is support at 142.75 and 141.48 USD/JPY is testing resistance at 143.81. Above, there is resistance at 144.70, which was tested on Wednesday This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

The USD/JPY Pair Stopped Rising, The Trend Will Be Reversed?

InstaForex Analysis InstaForex Analysis 09.09.2022 08:07
The USD/JPY pair stopped rising at the intermediate resistance on the way to the target of 147.10. The resistance area is set by the range of Fibonacci levels of 261.8 and 271.0% (shown on H4). The weakening of the yen was stopped by verbal interventions by Finance Minister Shunichi Suzuki and increased purchases of government bonds by the Bank of Japan. The Marlin Oscillator on the daily chart is reversing from the overbought zone, which in turn confirms the price reversal. We are waiting for the pair at the nearest support of 141.13. Going under it will open the second target at 139.13. We do not expect a price increase to 147.10. The price has consolidated below the Fibonacci level of 261.8% on the H4 chart, the Marlin Oscillator is about to go into the zone of negative values, after which it will increase pressure on the price. The support of the Fibonacci level of 238.2% is important, slightly below which (142.55) is the MACD line. Overcoming the MACD line will intensify the fall in prices.     Relevance up to 04:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321226
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The British Pound Started With Growth, How Will The GPD/USD Pair Look Like Today?

InstaForex Analysis InstaForex Analysis 09.09.2022 08:28
Yesterday, the pound closed down 30 points on the back of a weakening euro and the death of Queen Elizabeth II. But the central banks reacted extremely quickly and bought the market against the news. The volume of trading in the pound was the largest since July 14. Today, the pound started with growth, the price went above the resistance of 1.1525, on which it has been holding for the fourth day with strong fluctuations in both directions. The Marlin oscillator is growing on the daily scale, the price may reach the target level of 1.1600. But there is also a significant level slightly above it - 1.1650. This creates a danger that the price will quietly reach this level, and then consolidate above it and try to break through to 1.1815. But for now, we do not expect the pound to rise above 1.1600. Data on construction, trade balance and industrial production in the UK will be released on Monday, the forecasts for them are negative. The signal line of the Marlin Oscillator broke out of the triangle to the upside on the four-hour chart. The oscillator can now penetrate into the overbought zone, and this time the price will reach the nearest target level of 1.1600.   Relevance up to 04:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321228
The Upside Of The EUR/USD Pair Remains Limited

The EUR/USD Pair: Yesterday's Trading Volumes Were High And Today The Euro Began With Growth

InstaForex Analysis InstaForex Analysis 09.09.2022 08:34
At yesterday's meeting, the European Central Bank raised the rate by 0.75% - as expected by the optimistic part of economists. The moderate part assumed an increase of 0.50%. ECB President Christine Lagarde's subsequent speech made it clear that further growth would slow down. The next increase will be 0.50% followed by 0.25% until the target level of 2.00% is reached. Such a plan clearly shows that the ECB's policy will be softer than the Federal Reserve, which is more than obvious in the current political and economic realities. We will not be surprised that a further European crisis will force the ECB to carry out the next increase only for the form - by 0.25%. Note that Lagarde did not commit to raise the rate at the next meeting by 0.50%. The euro closed the day down 20 points. Today the euro began with growth. The price returned above the target level of 1.0020 and entered the struggle with the MACD line (1.0065). Consolidating above the level will allow the price to continue rising to the target level of 1.0150. The Marlin Oscillator has already moved into the growth zone and supports the price's bold intention. If the level of 1.0150 is overcome, then the euro will fall into a strong speculative game up to 1.0360, after which a strong collapse below 0.9850 may follow. Yesterday's trading volumes were the highest since August 2nd. On the four-hour chart, the price is in an upward trend for all indicators. We do not rule out that the market is now being bought out on the occasion of the death of the English Queen Elizabeth II in order to avoid a fall in values, but the markets seem to have calmed down and they can be released into further free development, that is, downward.     Relevance up to 04:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321230
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

What To Expect From Trading The EUR/USD Pair?

InstaForex Analysis InstaForex Analysis 09.09.2022 08:46
EUR/USD 5M     The EUR/USD pair continued to trade inside the 0.9877-1.0072 horizontal channel and not far from its 20-year lows. The flat or "swing" has been going on for several weeks now and is right around the 20 year lows. That is why we believe that the downward trend is not over and will resume. Yesterday, the key event of the day was the European Central Bank meeting. It became known that experts' forecasts coincided with reality, and the central bank raised the key rate by 0.75%. Moreover, ECB President Christine Lagarde said that the rate will continue to rise, and admitted that the rate of its growth may even increase. Thus, the ECB is heading for the fastest rate hike in the hope of catching up with the Federal Reserve. We would say that this is very good news for the euro. Lagarde made it clear that high inflation is not part of the ECB's plans, so monetary policy will be tightened until the end of 2022. However, as we can see, the euro fell immediately after these statements, and after a few hours it was already rising. We believe that in the current circumstances, we need to wait for the price to leave the horizontal channel, since without this trend we will not wait. In regards to trading signals, the situation was far from being great. Movements during the day were ragged, which is not surprising, given the fundamental background. The first signal was formed at the beginning of the European session after consolidating below the Senkou Span B. It turned out to be false, and the price could not go down even 15 points. The next signal was formed exactly at the time when the results of the ECB meeting were summed up. The price once again consolidated below the Senkou Span B and fell to the critical line. We believe that this signal could be worked out and it brought profit. This was followed by three buy signals at once - rebounds from the critical line - and each time the price went up at least 15 points. Therefore, Stop Loss should have been placed at breakeven for all transactions. COT report:     The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For most of 2022, they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group decreased by 8,500, and the number of shorts decreased by 5,000. Accordingly, the net position decreased by about 3,500 contracts. This is not much, but this is again an increase in the bearish mood among the major players. After several weeks of weak growth, the decline in this indicator resumed. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 47,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. The euro has not been able to show even a tangible correction over the past six months or a year, not to mention something more. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 9. The ECB raised the rate by 0.75%, the euro continues to remain in a coma. Overview of the GBP/USD pair. September 9. The British pound is floating around 37-year lows. Forecast and trading signals for GBP/USD on September 9. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H     The pair continues to trade on the hourly timeframe in a mode very similar to the "swing". The price continues to be inside the 0.9877-1.0072 horizontal channel, so it is not very convenient to trade now. It is best to wait for the trend to resume. We highlight the following levels for trading on Friday - 0.9877, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9996) and Kijun-sen (0 .9947). There is still no level below 0.9877, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. No important events planned in the European Union and the United States for today, but the market may continue to work out the results of the ECB meeting. Therefore, you can prepare for an active Friday. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 02:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321218
The EUR/USD Pair Maintains The Bullish Sentiment

Forex: EUR - Today's EU Energy Ministers Meeting Is Crucial For Euro

ING Economics ING Economics 09.09.2022 08:54
The ECB tried to come up with a bold move, while in the US the market is bracing for a 75bp Fed hike. The main focus today will be the EU energy ministers' meeting to discuss an EU-wide solution to gas price capping. This could be a key message not only for the gas market price but also for the euro and CEE region EU energy ministers meet today to discuss an EU-wide solution to gas price capping USD: Markets cementing 75bp hike view Any market reaction to Fed Chair Jerome Powell’s comments yesterday got caught in the mix with ECB headlines, but – as noted by James Knightley here – there was nothing suggesting a shift from the current hawkish stance. Markets are cementing their view that the Fed will hike by 75bp (71bp is already priced in), also thanks to a larger-than-expected decline in weekly jobless claims yesterday. This should continue to offer a supportive undercurrent to the dollar, and DXY should remain around recent highs.  Today, the focus will be on some more Fed speakers: Charles Evans (generally a dovish voice), Christopher Waller (a hawk) and Esther George. After yesterday’s comments by Powell, we doubt we’ll see much market impact from today’s speakers. The US data calendar is rather light. Elsewhere in North America, Canada’s jobs figures for August will be released today, and the key question is whether we’ll see a positive headline read after two months of employment losses. Some robust numbers may help CAD marginally by pushing markets to price in 75bp worth of tightening by year-end, which is currently our call. However, external factors continue to be in the driving seat for the loonie, and a sustained decline below 1.3000 in USD/CAD may be a bit premature given risk sentiment instability. Francesco Pesole EUR: Hawkish ECB provides little support EUR/USD price action after a hawkish ECB session yesterday proved very underwhelming. Short-dated yields moved in the euro’s favour, but to no avail for the currency. In addition, when asked about the weak euro, President Christine Lagarde had little to say beyond the ECB being attentive. As we have been discussing recently, it seems growth differentials and the international investment environment are dominating the FX environment right now – neither of which are supporting the euro. For today there will be much focus on the meeting of EU energy ministers. On the agenda to be discussed are price caps for Russian oil and gas, a levy on electricity suppliers, mandatory scaling back of electricity consumption, and liquidity support for utility companies. This meeting may prove bearish for the euro for a number of reasons. For example, reaching an agreement on gas price caps, gas sharing and electricity levies look to be difficult and may be delayed. Mandatory electricity reduction could spark what the Belgium PM calls de-industrialisation and social unrest. There is also the risk that if Russian oil and gas caps are approved, Russia could immediately suspend the remaining oil and gas shipments coming into the EU. With the Fed remaining hawkish, expect EUR/USD to stay offered in a broad 0.9900-1.0100 range. Chris Turner GBP: Sterling remains fragile The UK Gilt market found little to sink its teeth into yesterday regarding the energy support package. Details were scarce in terms of the size of the package – probably around £150bn – and how it is to be funded. At least some of that funding looks set to go through the Gilt market – meaning that the 10-year Gilt-Bund spread can widen out to the 200bp area. That’s a sterling negative. Cable risks sinking back to the 1.1410 low. Given the challenges in continental Europe, EUR/GBP may trade close, but not break resistance at 0.8720. Chris Turner CEE: Negative drivers recede into the background Friday's calendar for the region is completely empty, but the market will still absorb the echoes of the ECB and National Bank of Poland (NBP) and the surprisingly low inflation in Hungary. In addition, today's EU energy ministers' meeting could bring new news about gas prices. A dovish NBP Governor's press conference and the Hungarian inflation number knocked rates lower again while EUR/USD is lower. So, all in all, everything points to weaker FX in the region, while the result is the strongest levels since mid-August. Our belief is that this is due to another drop in gas prices, which has become the main driver of the region these days. Purely based on this relationship, we could see further appreciation, especially for the Polish zloty towards 4.680 and the Czech koruna towards 24.450 per euro. In addition, today's EU meeting could bring a further drop in gas prices and additional support for the CEE. However, nothing changes the previous arguments for weaker FX and the narrow influence of gas prices should not last forever. Thus, in the short term, the region may benefit from this relationship, but in the long term, we believe it should trade higher. Frantisek Taborsky Read this article on THINK TagsSterling FX Daily Energy market Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

The British Pound To The US Dollar Keep Bearish Mood?

InstaForex Analysis InstaForex Analysis 09.09.2022 08:51
GBP/USD 5M     The GBP/USD currency pair traditionally tried to resume the downward movement on Thursday, but this time it was not possible to update the 37-year lows. The volatility was quite high during the day - about 100 points - and the movements often replaced each other. Moreover, if the euro really had reason to change direction often (the European Central Bank meeting, Lagarde's speech), then the pound did not. However, it almost completely copied the euro's movements, as is often the case in recent months. It is worth noting that not only the ECB meeting took place yesterday, but also Federal Reserve Chairman Jerome Powell's speech in New York. Despite the fact that Powell did not report anything new to the markets, he nevertheless once again confirmed the immutability of the central bank's plans regarding monetary policy and the fight against inflation. Thus, the hawkish mood has been preserved, therefore, the US currency may continue to rise in price. It is firmly below the descending trend line, therefore, from a technical perspective, the downward trend continues. But there was a problem with trading signals. The critical Kijun-sen line was a kind of pivot for the pair's movements today, so the price worked it out seven or eight times during the day. Each time, accordingly, a signal was formed. However, let us recall that when all signals are formed near the same line or level, this is a sign of a flat. Not surprisingly, most of these signals were found to be false. Moreover, the only level that the price could really reach is the level of 1.1442. From above, the nearest level was very far away. The first sell signal was closed at a loss, and the second made it possible to win back this loss, but the deal had to be closed manually. As a result, the day ended in zero profit. COT report:     The latest Commitment of Traders (COT) report on the British pound turned out to be as neutral as possible. During the week, the non-commercial group closed 300 long positions and opened 900 short positions. Thus, the net position of non-commercial traders immediately increased by 1,200. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Therefore, the growth of the British pound still cannot count. How can you count on it if the market sells the pound more than it buys? And now its fall has resumed altogether, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 87,000 shorts and 58,000 longs open. The difference is not as terrifying as it was a few months ago, but it is still noticeable. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the "foundation" and geopolitics. If they remain as weak as they are now, then the pound may still be in a "downward peak" for some time. Also remember that it is not only the demand for the pound that matters, but also the demand for the dollar, which seems to remain very strong. Therefore, even if the demand for the British currency grows, if the demand for the dollar grows at a higher rate, then we will not see the strengthening of the pound. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 9. The ECB raised the rate by 0.75%, the euro continues to remain in a coma. Overview of the GBP/USD pair. September 9. The British pound is floating around 37-year lows. Forecast and trading signals for EUR/USD on September 9. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H     The pound/dollar pair maintains a downward trend on the hourly timeframe. Despite quite a growth yesterday and the day before that, it is clearly seen on the hourly timeframe that the price has only slightly moved away from its 37-year lows. Thus, the technical picture has not changed at all. We highlight the following important levels for September 9: 1.1411-1.1442, 1.1649, 1.1874. Senkou Span B (1.1669) and Kijun-sen (1.1504) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. There are no major events or reports planned in either the UK or the US on Friday. However, the pair may continue to trade volatilely because it doesn't need fundamentals or macroeconomics in recent weeks or even months to show strong moves. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321220
The Price Of EUR/USD Pair Will Develop Sideways Movement

The Euro To The US Dollar: The Down Trend Will Continue - 09.09.2022

InstaForex Analysis InstaForex Analysis 09.09.2022 09:24
Technical Market Outlook: The European Central Bank raised its key interest rates by an unprecedented 75 basis points on Thursday and promised further hikes, prioritising the fight against inflation even as the bloc is likely heading towards a winter recession and gas rationing. In the result, the EUR/USD pair had broken above the short-term trend line resistance and is rallying higher towards the technical resistance located at 1.0090 after the ECB interest rate hike to 1.25%. In order to terminate the down trend or at least make a correction, the bulls must break above the technical resistance located at the level of 1.0090 and 1.0122. In the longer term, the key technical resistance level is located at 1.0389.     Weekly Pivot Points: WR3 - 0.9992 WR2 - 0.99454 WR1 - 0.99156 Weekly Pivot - 0.98988 WS1 - 0.98690 WS2 - 0.98522 WS3 - 0.98056 Trading Outlook: There is no sign of relief for the EUR as the down trend should continue below the parity level. The EUR is under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the longer term, the key technical resistance level is located at 1.0389.     Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292114
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

No Indication Of Downtrend Termination Or Reversal On The GBP/USD Market

InstaForex Analysis InstaForex Analysis 09.09.2022 09:29
Technical Market Outlook: The GBP/USD pair has been seen continuing the bounce from the level of 1.1410 (7 years low) as the momentum is strong and positive on the H4 time frame chart. The US Dollar is in the pull-back mode, which helps the bulls to continue the up move. The nearest technical resistance is seen at the level of 1.1598 - 1.1622 and the nearest technical support is located at 1.1538. Nevertheless, the larger time frame trend (daily and weekly) remains down until further notice.     Weekly Pivot Points: WR3 - 1.15513 WR2 - 1.15077 WR1 - 1.14791 Weekly Pivot - 1.14641 WS1 - 1.14355 WS2 - 1.14205 WS3 - 1.13769 Trading Outlook: The bearish domination is clear and there is no indication of down trend termination or reversal on the GBP/USD market. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame, so the downside move accelerated. The next long term target for bears is seen at the level of 1.1410 (2020 low). Please remember: trend is your friend.   Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292116
The Number Of Dead Coins In 2022 Is Significantly Lower Than In 2021

Swiss SEBA Bank Announced The Introduction Of The ETH

InstaForex Analysis InstaForex Analysis 09.09.2022 09:39
Crypto Industry News: Swiss SEBA Bank announced the introduction of the ETH staking service for institutional clients. This will happen exactly when Ethereum's transition to the Proof-of-Stake consensus model is achieved. The bank today published a press release in which it informs that this move is a response to institutional demand. They show interest in such services as cryptocurrency staking and DeFi. The bank's platform to manage staking options will give its users the ability to use a variety of protocols, including Ethereum, Polkadot and Tezos. In the future, the Swiss company intends to launch similar services for additional protocols. Commenting on the growing demand from their customers for this type of service and the upcoming the Merge, director of technology and customer solutions at SEBA Bank, Mathias Schutz said: "The Merge Ethereum is an anticipated and significant milestone for the world's second largest cryptocurrency, providing users with improvements in the areas of security, scalability and sustainability. Launching our Ethereum staking services will enable institutional investors to play a key role in securing the future of the network through a trusted, trusted, secure network. a safe and fully regulated counterparty ". SEBA Bank is a cryptocurrency financial institution that is fully regulated by government institutions. It offers a wide range of solutions, including trade and credit services. By directing its activities towards Ethereum, the bank counts on acquiring new institutional clients who want to help secure the network. Technical Market Outlook: The ETH/USD pair has been seen trading at the level of $1,720, which is abive the 100 DMA already. The next target for bulls is seen at the level of $1.722 (technical resistance), $1,785 and $1,819. The nearest technical support is located at the level of $1,513 and $1,654. The momentum is strong and positive again on the H4 time frame chart, so the short-term outlook for ETH remains bullish. Weekly Pivot Points: WR3 - $1,624 WR2 - $1,598 WR1 - $1,581 Weekly Pivot - $1,572 WS1 - $1,555 WS2 - $1,546 WS3 - $1,520 Trading Outlook: The Ethereum market has been doing the lower highs and lower low since the swing high was made in the middle of the August at the level of $2,029. If the down move will extend, then the next target for bears is located at the level of $1,358. The key technical support for bulls is seen at $1,281.9 Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade     Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292120
Scottie Pippen (Basketball Player) Received A Personalized NFT

Bitcoin Is Losing Market Share To Competing Altcoins

InstaForex Analysis InstaForex Analysis 09.09.2022 09:46
Crypto Industry News: The cryptocurrency industry has lost a trillion dollars in recent months as Bitcoin plunged below $ 20,000. Famous investor Peter Schiff says the fierce competition from altcoins is taking its toll. Less than a month ago, the price of Bitcoin soared above the $ 23,000 mark. The sharp decline in the cryptocurrency in the remainder of August until this week saw a correction of about 20% of its total market capitalization. Schiff Gold Fund CEO and Austrian economist Peter Schiff says Bitcoin is losing market share to competing altcoins: "BTC dominance has dropped to 38.1%, its lowest level since June 2018. Competing against nearly 21,000 other intrinsically worthless digital tokens, NFT and cryptocurrency-related stocks is taking its toll. Even though Bitcoin is unique, its alternatives are not." Several crypto Twitter commentators were quick to disagree with Peter Schiff's claims. Even his son Spencer has questioned his father's claim that all competition in the crypto markets is flooding with Bitcoin. It is true that many new cryptocurrencies do not have a known supply limit of 21 million coins on the Satoshi Blockchain. However, Bitcoin does not necessarily compete with its peers in the cryptocurrency sector. The fast-growing market offers a wide variety of virtual financial services. Moreover, as Peter Schiff himself pointed out, not all Bitcoin "peers" offer users a currency based in part on the economy of digital scarcity. So they don't really compete for the same users. Technical Market Outlook: The BTC/USD pair had bounced form a new swing low located at the level of $18,553 and is trading back above the $20k level. The last local high was made at $20,822 (at the time of writing the analysis) and the next target for bulls is seen at $21,368 (100 DMA). The market conditions are now neutral as the bounce was made from the extremely oversold conditions. The main trend remains down and the next target for bears is located at $17,600. Weekly Pivot Points: WR3 - $20,411 WR2 - $20,111 WR1 - $19,911 Weekly Pivot - $19,840 WS1 - $19,610 WS2 - $19,509 WS3 - $19,209 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout.     Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292122
Construction Activity in Poland Contracts in May: Focus on Building Decline and Infrastructure Investment

USD (US Dollar): According To ING Economics It Seems To Be No Signs Of Fed Changing Its Approach

ING Economics ING Economics 09.09.2022 10:01
There is nothing in Fed Chair Jerome Powell's comments to suggest an imminent moderation in the pace of rate hikes. The need to 'act now' to get a grip on inflation in an environment where the economy is experiencing decent growth, strong job creation, and a likely rise in core inflation next week points to a third 75bp hike on 21 September Jerome Powell's comments clearly support a third consecutive 75bp interest rate hike Another 75bp in an environment of strong growth and rising core price pressures Federal Reserve Chair Jerome Powell’s comments to the Cato institute’s conference today on monetary policy are clearly supportive of a third consecutive 75bp interest rate hike on 21 September. There is no hint that he supports moderation, arguing that “we need to act now, forthrightly, strongly as we have been doing and we have to keep at it until the job is done”. There is also the usual mention of inflation expectations and the need to anchor them in order to ensure inflation doesn’t become ingrained. The latest data certainly backs the case for 75bp with business surveys looking robust, the labour market continuing to create jobs in significant numbers, and next week’s inflation numbers set to show core CPI accelerating to 6.1% from 5.9%. Moreover, the third quarter is shaping up to be quite a strong one, fully reversing the declines seen in GDP in the first half of the year. Inventories and net trade are swinging back and set to make decent positive contributions to headline growth. Meanwhile, consumer spending is being boosted by the lift in spending power from lower gasoline prices. High-frequency data over the Labor Day holiday show restaurant dining at record levels, while air passenger travel over the past weekend exceeded that of 2019 for the first time, so 3% growth looks to be on the cards. High-frequency data point to strong 3Q consumer spending Source: Macrobond, ING   Nonetheless, the deteriorating global outlook and weakening domestic housing market combined with the cumulative impact of policy tightening and the strong dollar means we think the Fed will moderate its hiking to 50bp in November and 25bp in December. Weaker wage pressure and more limited month-on-month increases in CPI thanks to lower import and other input costs would certainly help this argument. Rate cut chances remain high for 2023 Chair Powell has also reiterated the view that the market shouldn’t get too excited about pricing rate cuts next year, saying “history cautions strongly against prematurely loosening policy”. However, as the chart below shows, over the past 50 years, there is typically only a six-month gap between the last rate hike in a cycle and the first rate cut – not exactly a long gap. It seems to us to be more of an effort to nudge the longer end of the Treasury yield curve higher to ensure financial conditions remain tight. Fed funds rate: timeframe between last rate hike and first rate cut Source: Macrobond, ING   With recessionary forces intensifying, we expect inflation to fall relatively swiftly next year thanks to lower gasoline prices feeding through more broadly, weaker wage pressures and declining input costs combined with falling house prices depressing the rental components of CPI. We are currently pencilling in a rate cut in June with further easing through the second half of 2023. Read this article on THINK TagsUS Interest rates Federal Reserve Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Inflation Outlook: Energy Prices Drive Hospitality, Food Inflation Eases

The Rally In Markets That Started Yesterday Is Likely To Continue Today

InstaForex Analysis InstaForex Analysis 09.09.2022 09:57
Markets closed higher on Thursday, thanks to the outcome of the ECB meeting and speeches of Christine Lagarde and Jerome Powell. Optimism clearly spilled over, so stocks and commodities rose up, while dollar fell down. But at first glance, markets semed to have acted illogically as euro and European stock indices declined. That was after the ECB raised the key interest rate by 0.75% to 1.25% and Lagarde said that the central bank gives priority to rate increases to fight inflation. Fortunately, sometime later, markets began to grow, with stocks rising over the closure of short positions. Regarding how far euro can rise against dollar, much will depend on the plans of the Fed over interest rates. If Powell informs of a slowdown in inflation after the monetary policy in September and hints that the central bank will weaken the pace of rate hikes, dollar will continue to decline, which will lead to the further increase of EUR/USD. This will also cause growth in stock indices, first in the US, then on other global trading floors. So far, the Fed is still firm in its hawkish position, but the rally in markets that started yesterday is likely to continue today. Forecasts for today: GBP/USD The pair is trading below 1.1600. Overcoming this mark on the wave of a continued market rally will push the quote to 1.1720. XAU/USD Spot gold is trading below the strong resistance level of 1722.00. A break of this level amid positive dynamics on markets, accompanied by the weakening of dollar, will lead to a price increase to 1733.00.   Relevance up to 07:00 2022-09-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321238
The EUR/USD Price May Fall Under 1.0660

Euro: We Can Expect More Hikes From ECB (European Central Bank) This Year

ING Economics ING Economics 09.09.2022 10:06
The ECB President, Christine Lagarde has confirmed the Bank's hawkish stance and has prepared markets for more hikes to come. We still think the European Central Bank is too optimistic about growth but have changed our call; we now expect it to hike rates by another 75bp before the end of the year ECB President, Christine Lagarde, at Thursday's news conference ECB Is Determined The ECB news conference just confirmed the message that was already clear from the policy decisions: the European Central Bank is fully determined to hike interest rates aggressively. Earlier, it announced a 75 basis point rate rise, the largest hike since the start of monetary union. It's given up on inflation targeting and its main aim now seems to be restoring its inflation-fighting credibility. It is still hard to see how the ECB can bring down inflation that is mainly driven by supply side factors, other than 'hoping' for a recession that suppresses demand. During the press conference, President Christine Lagarde said the ECB still intends to hike interest rates several times in the coming months but didn’t say where it sees the level of the neutral interest rate. We still think the ECB is too optimistic about the economic outlook We still think it's being too optimistic about the economic outlook. The ECB’s baseline scenario is +0.9% GDP growth in 2023 which is much more optimistic than our own forecast. Only in its downside risk scenario do we see GDP growth coming in at -0.9% but this scenario assumes a full end to Russia's rationing of oil and gas in the eurozone. Interestingly, in its baseline scenario, the ECB expects inflation to still come down to 2.3% in 2024 and actually to reach 2.2% from the second quarter of 2024. Admittedly, there is currently very little belief among ECB members in the reliability of these long-term projections. However, the very hawkish tone today doesn’t really match these inflation projections. Taking today’s decision and Lagarde’s comments at the news conference at face value, we have to change our ECB call. For the time being, there are no more doves. The Bank is clearly determined to bring interest rates to their neutral level, and this level is clearly at the upper end of the common range of between 1% and 2%. If it were up to the hawks, they would probably like to hike by another 100bp before next spring. However, we think that at some point in the coming months, the ECB will have to acknowledge that its growth expectations are too positive. In our view, the ECB will only be able to hike rates by a total of 75bp by the end of the year. This could be another 75bp at the October meeting or 50bp in October and a last-minute 25bp hike at the December meeting. For now, the doves have clearly left the ECB nest. However, we don’t think that they have left that nest for good and they will be back, somewhat earlier than the migrating birds which return to Europe after the winter. Read this article on THINK TagsMonetary policy Inflation Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Price Of The Euro To The US Dollar May Move Upward Today

InstaForex Analysis InstaForex Analysis 09.09.2022 10:09
Trend analysis (Fig. 1). The euro-dollar pair may move upward from the level of 0.9998 (close of yesterday's daily candle) to 1.0056, the 38.2% retracement level (white dotted line). Upon reaching this level, an upward movement is possible with the target of 1.0079, the 50.0% retracement level (white dotted line). When testing this level, the price may move down. Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today the price may move upward from the level of 0.9998 (close of yesterday's daily candle) to 1.0056, the 38.2% retracement level (white dotted line). Upon reaching this level, an upward movement is possible with the target of 1.0079, the 50.0% retracement level (white dotted line). When testing this level, the price may move down. Alternative scenario: from the level of 0.9998 (close of yesterday's daily candle), the price may move upward to 1.0056, the 38.2% retracement level (white dotted line). Upon reaching this level, a downward pullback is possible to test 1.0032, the 23.6% retracement level (red dotted line). After testing this level, the price may resume moving upward with the target of 1.0079, the 50.0% retracement level (white dotted line).   Relevance up to 08:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321244
What Should We Expect From The Bitcoin Formation In The Near Future?

Bitcoin: Good Sign For Further Rally And Potential Buying Opportunities

InstaForex Analysis InstaForex Analysis 09.09.2022 10:19
Technical analysis: BTC/USD has been trading upside in the background and there is the breakout of the supply trendline, which is good sign for further rally. Trading recommendation: Due to the breakout of the supply trend-line and strong upside momentum, I see further rally. Watch for the potential buying opportunities on the intraday dips with the upside objective at the price of $21.940. MACD oscillator is showing the fresh upside momentum and the reading is positive after long time, which is good sign for further rally. Key support is set at the price of $19.000       Relevance up to 10:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292144
Gold Stocks Have Performed Very Well Under Pressure

Gold: Breakout Of The Supply Trend-line And Strong Upside Momentum

InstaForex Analysis InstaForex Analysis 09.09.2022 10:25
Technical analysis: Gold has been trading upside in the background and there is the breakout of the supply trendline at $1.726, which is good sign for further rally. Trading recommendation: Due to the breakout of the supply trend-line and strong upside momentum, I see further rally. Watch for the potential buying opportunities on the intraday dips with the upside objectives at the price of $1.743 and $1.758. Stochastic oscillator is showing the fresh bull cross, which is good sign for the further rally. Key support is set at the price of $1.704 Read more: https://www.instaforex.eu/forex_analysis/292146     Relevance up to 10:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292146
The Euro May Gradually Climb To The Target Level

The Euro To The US Dollar Pair And Good Sign For Further Rally

InstaForex Analysis InstaForex Analysis 09.09.2022 10:31
Technical analysis: EUR/USD has been trading upside in the background and there is the breakout of the supply trendline at 1.0083., which is good sign for further rally. Trading recommendation: Due to the breakout of the supply trend-line and strong upside momentum, I see further rally. Watch for the potential buying opportunities on the intraday dips with the upside objective at the price of 1.0300. Stochastic oscillator is showing bull divergence and upside momentum, which is good sign for further rally. Key support is set at the price of 0.9875     Relevance up to 10:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292148
The US PCE Data Is Expected To Confirm Another Modest Slowdown

Podcast: The Week Ahead In Earnings And Macro And More On Today's

Saxo Bank Saxo Bank 09.09.2022 10:37
Summary:  Today we look at a sharp sell-off in the US dollar inspired in the wake of the ECB meeting yesterday and especially after Bank of Japan Governor Kuroda comments on JPY volatility overnight. The USD decline has helped to boost sentiment further as the US S&P 500 retakes 4,000, but equity traders should keep a wary eye on treasury yields, which bounced back sharply yesterday on a strong US jobless claims number and the latest firm rhetoric from Chair Powell. The week ahead in earnings and macro and more on today's pod, which features Peter Garnry on equities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.     Source:Podcast: USD stumble adds to sentiment boost | Saxo Group (home.saxo)
PLN Soars to Record Highs Ahead of NBP Decision

How Short- And Long Position Look Like For The Euro To The US Dollar

InstaForex Analysis InstaForex Analysis 09.09.2022 11:16
Analysis of transactions in the EUR / USD pair Euro tested 0.9985 at the time when the MACD was far from zero, which limited the downside potential of the pair. Sometime later, it tested the level again, but this time the market signal that was to buy, which led to a price increase of around 40 pips. In the afternoon, another buy signal was formed at 0.9941, and this also resulted to a rise of more than 40 pips. The ECB's decision to raise rates by 0.75% led to a slight decrease in euro because markets already expected that outcome. But after Christine Lagarde said another increase is possible in October, demand rose, which led to the rise of EUR/USD. US data on jobless claims and speech of Fed Chairman Jerome Powell were ignored by markets. A number of reports are scheduled to be released today, including the change in the volume of industrial production in France. There will also be another speech from ECB President Christine Lagarde, which may add optimism in markets. The EU economic summit and Eurogroup meeting may also have a positive impact on euro, especially if decisions are made to support the population and pay off their energy debts. In the afternoon, there are no important statistics in the US, except for changes in the volume of stocks in wholesale warehouses. There will be presentations from FOMC members Charles Evans, Christopher Waller and Esther George, but all of them are likely to talk about further increases in interest rates. For long positions: Buy euro when the quote reaches 1.0078 (green line on the chart) and take profit at the price of 1.0135. Growth may continue today as the ECB raised interest rates by 0.75%. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0042, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0078 and 1.0135. For short positions: Sell euro when the quote reaches 1.0042 (red line on the chart) and take profit at the price of 0.9998. Pressure will return if the Fed remains hawkish on its monetary policy. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0078, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0042 and 0.9998. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.       Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321254
Authorities In Australia Have Announced Their Intention To Regulate Cryptocurrencies In 2023

Ethereum Confidently Maintained Its Bullish Positions

InstaForex Analysis InstaForex Analysis 09.09.2022 11:29
While Bitcoin fell below $19k and was on the verge of falling to the local bottom, Ethereum confidently maintained its bullish positions. After a local recovery impulse of the first cryptocurrency, the main altcoin resumed its upward movement. The asset has reached the upper boundary of the resistance zone and, as of this writing, is trying to gain a foothold above the $1,700 level. In general, the altcoin successfully implements the bullish market momentum ahead of the Merge update. However, should we expect a full-fledged upward movement of the cryptocurrency shortly before the merger? From the fundamental point of view, the answer to this question seems not so obvious. Two days ago, the Bellatrix update took place on the Ethereum network, which became the final chord of preparing the altcoin for the transition to PoS. The upgrade was successful, but investors had some doubts. They were dictated by a significant increase in the number of missed blocks in the ETH network after the Bellatrix update. The indicator increased by 1,700%, and the number of blocks that did not pass the check on the first attempt reached 9%, against the norm of 0.5%. The Ethereum developers said that the problem was related to nodes that did not install new software. It is reported that about 25% of the nodes are using the old collateral, but even a small percentage caused failures in the ETH network. Questions about the decentralization of Ethereum are also gaining momentum, because more than 50% of all ETH nodes are made up of the United States and Germany. Amazon is the end user of more than 50% of Ethereum nodes, and the Geth open source project remains the main enabler for most of the nodes. However, judging by the growing volumes of trading and the increase in addresses, the market is not very worried about the possibility of transactional censorship. The situation with the update of Ethereum remains stable and interest in the main altcoin is growing. Given the fundamental interest of investors in Ethereum, a similar situation should be observed in technical metrics. On the daily chart, Ethereum remains bullish. The price managed to hold the key support level at $1,400. Thanks to this, the "cup and handle" pattern remains relevant and, consequently, the bullish potential of the price movement to $2,700-$2,800. Technical indicators also confirm the bullish market sentiment. The Relative Strength Index crossed the 50 level and continues to move up, which indicates growing buying volumes. The stochastic oscillator is also successfully implementing bullish impulses and is approaching the overbought zone. Given the proximity and fundamental nature of the Merge update, the metric will remain close to this zone until the merge is completed. An important and positive signal for the ether was the fall in the level of Bitcoin dominance to 36%. Subsequently, the metric recovered to 39%. However, this is direct evidence that Ethereum is temporarily at a higher investment preference than Bitcoin. In other words, the main flows of investments, including institutional ones, are directed to the main altcoin. This thesis is also confirmed by colleagues from Chainalysis, who are sure that ETH has taken on the burden of temporary leadership. Experts report that due to the improvement in the technical characteristics of ETH, including staking, altcoin will become even more popular among large players. This thesis is confirmed by the on-chain metric showing the number of addresses with 1000+ ETH. A significant increase in the number of addresses with this amount of ether coins indicates a high level of confidence in the upcoming update. However, it may also indicate investors' plans to take advantage of the staking feature after the merger. For ETH, this is doubly positive news, as profitable staking will allow the asset to avoid a sharp and massive sell-off. However, we should expect a slight drop in the price of Ether after the update due to market conditions. Ethereum on-chain metrics also show positive dynamics. Trading volumes have taken a sharp upward direction, but still do not reach the levels of mid-July, when the altcoin was at its peak of growth. The number of unique addresses in the cryptocurrency network remains high, but practically unchanged. The indicators of the main on-chain metrics indicate the initial stage of the emergence of an upward trend. It is likely that the numbers will continue to rise ahead of the merger and will peak on September 15–16. It is then that we should expect a peak in the growth of ETH/USD quotes. Given the fundamental reasons for growth and investors' faith in a successful upgrade, there is no doubt about the local bullish trend of ether. On the eve of the merger, the asset will consolidate and gradually approach $1,800–$2,000. Given the successful movement in this area a few weeks ago, one can be sure of ETH/USD consolidation above $2,000. The main targets of Ethereum within the bullish movement due to the Merge update are the $2,000-$2,100 and $2,400-$2,500 areas. Most likely, the price is able to go higher and stab higher levels, but the main potential ends in the $2,400-$2,500 area. Ethereum update will have a positive effect on the cryptocurrency and DeFi/NFT market, but given the macroeconomic background, fundamental shifts should not be expected.       Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321260
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Will Currency Pairs (EUR/USD And GBP/USD) Continue Yesterday's Trends?

InstaForex Analysis InstaForex Analysis 09.09.2022 12:06
Details of the economic calendar for September 8 The European Central Bank (ECB) raised all three key interest rates by 75 basis points. The base interest rate on loans was raised to 1.25%, the rate on deposits to 0.75%, and the rate on margin loans to 1.5%. The main points of the ECB press release: - Over the next few meetings, the regulator is considering further rate hikes to protect against rising inflation. - The ECB will regularly review the course of its monetary policy in the course of incoming statistics. - Future ECB rate decisions will be data driven and follow the approach taken at each meeting. - ECB members have revised their inflation forecasts, which are expected to average 8.1% in 2022, 5.5% in 2023 and 2.3% in 2024. - The ECB expects GDP in the EU to grow by 3.1% in 2022, 0.9% in 2023 and 1.9% in 2024. Conclusion from the meeting: The regulator's decision to raise rates by 75 basis points was anticipated by the market. This event was already on everyone's lips. For this reason, there was no reaction, despite the historical scale of the hanging. The main theses of Christine Lagarde's press conference: - The regulator will continue to raise interest rates at upcoming meetings. - The energy crisis is intensifying the economic slowdown. - The weakness of global economic growth will slow down economic growth in the EU. - A weak euro is bad; it leads to an increase in inflation. - The decisions on the rate at the current meeting were made unanimously. - The subsequent rate increase will not necessarily be by 75 basis points. - The ECB is not at a neutral rate. - In order to reach a neutral level on the rate, additional increases will be required. - The unfavorable scenario considers a recession in 2023. - Now is not the time to stop reinvestment in the Asset Purchase Program (APP). - Rates are far from being necessary to reduce inflation, and even more rate hikes will be required than at the remaining two meetings this year. - To curb the growth of inflation, it is necessary to raise rates at more than two meetings, but less than five meetings Conclusion from the press conference: Christine Lagarde has repeatedly spoken out in favor of further tightening of monetary policy. There is no clear understanding of the neutral rate yet, but the intention to raise it at the remaining meetings this year and next year is clear. Lagarde also noted that the regulator does not like the weak euro table. Analysis of trading charts from September 8 The EURUSD currency pair spent the past day in speculation, where at first there was a downward trend, and then all the drawdowns in the euro were bought off. As a result, the day was closed at the parity level, from which all speculation began. The cause and effect of speculation is described above—this is an information and news flow. The GBPUSD currency pair, despite the speculative activity, repeats the price fluctuations of its counterpart in the EURUSD market. This is due to the positive correlation between trading instruments, where at this time, the euro is considered the leading currency. Economic calendar for September 9 Today the macroeconomic calendar is empty, important statistics for Europe, Great Britain and the United States are not expected. Investors and traders are likely to continue to focus on the information flow of such hot topics as the energy crisis in the EU, the ECB/Fed, inflation. Trading plan for EUR/USD on September 9 There was a rush on the market for long positions on the euro at the opening of Asian trading session. This led to an upward jump in the price, based on which the quote rose above the value of 1.0050. Stable price retention above the reference value (1.0050) in the daily period may indicate the formation of a full-size correction relative to the downward trend. Otherwise, it is impossible to exclude the scenario of a reverse move to the boundaries of the previous amplitude of 0.9900/1.0050. Trading plan for GBP/USD on September 9 In this situation, the price rebound from the local low of 2020 led to the strengthening of the British currency by about 180 points. To move into the stage of a full correction, the quote needs to stay above the value of 1.1620 for at least a four-hour period. Otherwise, the current ascending cycle may slow down, followed by a return to the support. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.     Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321266
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The Euro To The US Dollar Pair: The Bullish Mood Arose

InstaForex Analysis InstaForex Analysis 09.09.2022 12:54
Previous trading plan for EUR/USD indicated a price increase after an ECB rate hike and speech of Christine Lagarde. The target was the level of 1.00900. Plan: The bullish mood arose during the Asian session, and extended up to the European session. That time, the pair managed to break the level of 1.00900. Development: Congratulations to those who followed the strategy! The pair moved by as much as 1,300 pips. To those who are yet to close positions, you may do so at current prices. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks     Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321264
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

When Show Opportunities To Buy Or To Sell The GBP/USD Pair?

InstaForex Analysis InstaForex Analysis 09.09.2022 12:59
Analysis of transactions in the GBP / USD pair Pound tested 1.1494 at a time when the MACD line was just starting to move below zero, which was a good signal to sell. That prompted a price decrease of around 15 pips, after which pressure eased and brought the pair to 1.1519. But the MACD line was already far from zero, so the upside potential was limited. Traders relied on news from the eurozone when entering the market yesterday. However, it was only today that pound managed to get out of the sideways channel. A survey regarding the expected inflation in the UK will be coming today, but it is unlikely to affect the direction of GBP/USD. As such, the pair will maintain an upward corrective potential that may lead to a breakdown of 1.1612. In the afternoon, there are no important statistics in the US, except for changes in the volume of stocks in wholesale warehouses. There will be presentations from FOMC members Charles Evans, Christopher Waller and Esther George, but all of them are likely to talk about further increases in interest rates. For long positions: Buy pound when the quote reaches 1.1612 (green line on the chart) and take profit at the price of 1.1661 (thicker green line on the chart). Growth may continue today, during the Asian session. Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1576, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1612 and 1.1661. For short positions: Sell pound when the quote reaches 1.1576 (red line on the chart) and take profit at the price of 1.1517. Pressure will return after a failed attempt to update the weekly high. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1612, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1576 and 1.1517. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.     Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321256
The EUR/USD Price May Fall Under 1.0660

The ECB Forecasts Indicate Faster Price Growth

InstaForex Analysis InstaForex Analysis 09.09.2022 13:32
ECB officials are poised to introduce another rate hike in October if the inflation outlook calls for an additional significant step. This second 75 bp increase would be in line with the Fed's recent aggression, underscoring a tougher approach taken by the ECB recently as inflation in the region hits record after record. A reduction in the nearly €5 trillion ($5 trillion) worth of bonds purchased by the ECB during recent crises may also be discussed at an informal meeting on October. But noticeably, Philip Lane, who in his last speech called for a "steady pace" of rate hikes, has been more hawkish during his speech to the Board of Governors this week. The ECB also promised several future moves after Thursday's rate announcement. Christine Lagarde said it may be more than two, but less than five. Surprisingly, euro still slipped because Fed Chairman Jerome Powell also said that the US central bank will not back down in its efforts to curb inflation. But at the end of the day, EUR/USD closed with a bullish pin bar having been traded higher during the Asian and European sessions. Investors have raised the stakes on further ECB tightening. They bet on another 75 basis point hike reaching 40% in October, which is a drastic change after the central bank was accused of being too slow to respond to inflation. Further decisions will be made according to fears of recession, especially since new ECB forecasts point to faster price growth along with slower economic growth. The growth forecast for next year has been cut to just 0.9%.     Relevance up to 10:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321274
Trading Signals For The New Zealand Dollar To Swiss Franc Pair (NZD/CHF)

The NZD/CHF Pair An Opportunity For A Potential Correction

InstaForex Analysis InstaForex Analysis 09.09.2022 13:47
NZD/CHF has been decreasing since last year. It lost as much as 6,000 pips and has broken through the June low as of today. This scenario points at a potential correction in the pair. So, starting from the current prices, traders should place buy limit orders, with an increment of 500 pips. Take profit on a breakdown, either at 1 pip above the first order or after a 1,000 pip movement. This strategy is called grid trading, which is usually used on cross rates. It involves holding positions that are significant in time and distance. For this reason, we recommend using swap-free accounts, not increasing the volumes in the grid (0.01 standard lot for every $1,000 of the deposit), and monitoring price movements. Good luck and have a nice day! Don't forget to control the risks! Relevance up to 11:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321280
Analysis Of The EUR/JPY Pair Movement

Geopolitical Events And Macro Data Strongly Affect Currency Pairs

Saxo Bank Saxo Bank 09.09.2022 13:58
Summary:  A sharp US dollar sell-off has developed, one that materialized suddenly overnight and was extended by comments from Bank of Japan Governor Kuroda that inspired a steep plunge in USDJPY after its recent aggravated extension higher. The ECB meeting yesterday brought more hawkish than expected guidance, theoretically helping the EURUSD back-up well above parity, though the timing of the bulk of the rally in Asian hours offers cause for head-scratching. FX Trading focus: What is the quality of this USD sell-off…and JPY rally? The USD move overnight looked suspicious as it came just after midnight GMT – perhaps led by a run on stop orders above yesterday’s post-ECB meeting high around 1.0030? Hmm – the move was broad-based, so not entirely convinced. China set its yuan reference rate sharply higher than expected about an hour later, and then the BoJ Kuroda comments discussed below came on board. The move in EURUSD happening in Asian hours rather in the context of the ECB meeting having already sharply boosted EU yields earlier in the day yesterday has me scratching my head and wondering at the quality of this USD move lower – and wanting to reserve judgment on what is going on here at least until the end of today’s/this week’s action and possibly until we see how the market treats the EU’s power price cap plan after the summit on the matter in Brussels today and then next Tuesday’s US August CPI release. It is no major surprise that some stern words from Bank of Japan Governor Kuroda were able to inspire a sharp consolidation lower in USDJPY after its wild extension higher recently that seemed a bit excessive relative to the support from coincident fundamental indicators like global long sovereign yields/spreads. After meeting Prime Minister Kishida overnight, Kuroda said that “sudden moves in foreign exchange rates increase uncertainty for firms and are undesirable.” And “ a two to three yen move against the dollar in a single day is very sudden.” A couple of figures on a comment are easy, more would require a more notable retreat in global yields and commodity prices and perhaps real intervention. By the way, an FT article with the provocative title “Can Japan feed itself” makes clear that food prices have been capped by the Japanese supermarket industry for some time now at the retail level and are set for a significant reset on October 1. This will mean a leap in the official CPI numbers from the month of October. At the same time, PM Kishida is readying a new raft of packages aimed at supporting lower income households cost-of-living challenges. There is a chicken and egg problem here with price controls and preventing cost-of-living increases on the one hand and the Bank of Japan theoretically waiting for the Godot of wages beginning to rise to signal that inflation is becoming more embedded. With cost-of-living support, the wage earner is less likely to demand a raise…. Something is going to have to give, but it’s hard to believe that a stern few phrases from Kuroda will do the trick, although this could be the beginning of a far more choppy JPY trajectory from here, as from these levels or lower in the JPY, the Ministry of Finance may be willing to throw billions of intervention into the mix in an attempt to halt further JPY declines. Chart: USDJPYBoJ comments overnight have triggered a significant slide in USDJPY, if one not yet as large as the two-day rallythat sent the pair soaring all the way to the cusp of 145.00 two days ago. A retreat and close anywhere close to 140.00 today would create an interesting shooting star formation for the weekly candlestick, although really the pair needs to wipe out a great proportion of the move from the pivot low in early August at 130.40 to suggest a more profound reversal is afoot here. Meanwhile, a close today in the 142-143 range suggests that little harm has been done, even tactically, to the USDJPY up-trend. The ECB meeting brought far firmer guidance from the central bank than expected, as German 2-year yields traded some 30 basis points higher today relative to the close the day before the meeting – to a new cycle high north of 1.40% before that move faded sharply today back toward 1.30%. The 75-basis point hike was the largest in the ECB’s history and is expected to be repeated at the late October meeting after the guidance that another move of that size can’t be ruled out in yesterday’s presser. But Europe needs sustained relief on the energy/power price front for a more sustainable rally. Curiously, the market waking up to EURUSD trading well north of parity this morning had nothing to do timing-wise with the ECB as it unfolded overnight. Yesterday, the market seemed unsure with what to do with the euro in the immediate aftermath of the decision and guidance. For EURUSD, a close above 1.0100, which was teased today, is needed to set the focus toward the next area into 1.0350, while a close back below parity today would suggest that the overnight pump was merely linked to poor liquidity, order flow and the Bank of Japan verbal intervention mentioned above. An election is set this weekend for Sweden, with the currency market not particularly holding its breath in anticipation. EURSEK has corrected sharply lower in fitting with the strong risk sentiment of the moment, but has a lot of work to do to set the focus back lower, at least a move below 10.50. As I am writing this, the Bank of England has announced that it is moving back its next meeting from next week to the following week, likely due to Queen Elizabeth’s death and the mourning period, but this will give the Bank the luxury of having a look at the FOMC meeting the day before and whether it needs to stiffen its message or even hike more than it anticipated if sterling is struggling to new lows going into the meeting. Table: FX Board of G10 and CNH trend evolution and strength.The USD momentum has shifted sharply lower over the last couple of days, but reserving judgment at least until the daily/weekly close today. Elsewhere, look at CHF continuing to power on despite the ECB hawkish guidance yesterday. Table: FX Board Trend Scoreboard for individual pairs.It’s looking like cross-over day again for EURCHF after the ECB failed to sustain the recent rally despite the mark-up of EU yields. USDCHF has also rolled over and is threatening a turn lower, although looking at the chart, there is a lot of choppy range to work with yet. Upcoming Economic Calendar Highlights 1230 – Canada Aug. Net Change in Employment / Unemployment Rate 1600 – US Fed’s Waller (Voter) to speak 1600 – US Fed’s George (Voter) to speak   Source: https://www.home.saxo/content/articles/forex/fx-update-usd-weakens-broadly-but-are-the-drivers-sustainable-09092022
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD Pair: Prices Will Pull Back Lower?

InstaForex Analysis InstaForex Analysis 09.09.2022 14:07
Technical outlook: EURUSD pushed further towards the 1.0110-20 area during the European session on Friday. The bulls have taken out initial resistance at around 1.0080 with relative ease and might take a break now. The single currency pair is seen to be trading at around 1.0060 and it is expected to drop towards 0.9930 before resuming higher again. EURUSD might have produced the initial lower-degree upswing of the counter-trend rally, which was expected after printing the 0.9863 low. The entire drop between 1.2350 and 0.9863 is expected to be retraced at least towards the 1.0800-1.0900 area before turning lower again. Also, note that the Fibonacci 0.382 retracement of the entire drop is also seen passing through 1.0800 as seen on the daily chart. EURUSD bulls have managed to carve a lower-degree upswing between 0.9863 and 1.0113. Prices are now expected to pull back lower towards the 0.9930-50 zone before finding support again. We can expect the rally to resume higher thereafter and push the price higher towards 1.0450 and 1.0800. First, the price will turn lower, then it will be bullish again from here. Trading plan: Potential rally towards 1.0800 against 0.9800 Good luck!     Relevance up to 13:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292182
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The British Pound Strengthened Against The Dollar

InstaForex Analysis InstaForex Analysis 09.09.2022 14:44
While the UK is in national mourning over the death of Queen Elizabeth II, and market participants are assessing the statements of the new British Prime Minister Liz Truss regarding the future plans of the British government, the pound strengthened against the dollar while remaining vulnerable in the main cross pairs. Today, the GBP/USD pair rose to an intra-week high of 1.1647, mainly taking advantage of the weakening dollar. It, in turn, is declining against the background of growing demand for shares and other high-yield assets of the stock market. Investors were also generally positive about the ECB's decision yesterday to raise interest rates by 0.75% rather than 0.50%, as previously thought. In addition, the latest forecasts of economists regarding the rate of GDP growth in the Eurozone suggest that next year the European economy may avoid recession. "Economic growth rates are declining, but the ECB is not predicting a recession yet," economists say. The ECB's accompanying statement spoke of the readiness of its leaders to take further steps to tighten monetary policy. "Curbing the dynamic in inflation is ECB's only concern," said ECB Governing Council member Klaas Knot. One way or another, investors decided to fix part of long dollar positions at the end of the week, which also led to a decrease in its quotes. Now market participants will wait for the Fed meeting on September 20–21. US Federal Reserve Chairman Jerome Powell confirmed the readiness of the central bank to continue the policy of high interest rates until the situation with inflation completely stabilizes. The Fed's interest rate is assumed to rise again by 0.75%, which is a bullish factor for the dollar. In this regard, today market participants will pay attention to the speeches of the Fed representatives Charles Evans, Christopher Waller and Esther George, scheduled for the first half of today's US trading session. And yet, despite the correction, the dollar retains the potential for further growth. Last Wednesday, its DXY index hit a 20-year high at 110.78. A breakdown of this local resistance level will signal the resumption of the upward dynamics of DXY, and the level of 111.00 will be the nearest target. As for the pound, important macro statistics on it will be released early next week, and on Thursday (at 11:00 GMT), the Bank of England will announce its decision regarding monetary policy. Most likely, the interest rate will be raised again. As of this writing, the GBP/USD pair is trading near 1.1618, retreating from today's high of 1.1647. A breakdown of the support level at 1.1578 may be a signal to resume short positions.   Relevance up to 12:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/321286
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The GBP/USD Pair Is Trading Above The Support Level

InstaForex Analysis InstaForex Analysis 09.09.2022 14:49
The GBP/USD pair rose to an intra-week high of 1.1647, mainly taking advantage of the weakening dollar. As of this writing, the GBP/USD pair is trading near 1.1618, retreating from today's high of 1.1647. Taking into account the general downward trend of the pair, the breakdown of the important short-term support level 1.1578 (200 EMA on the 1-hour chart) may become a signal for the resumption of short positions. Thus, the current growth of GBP/USD may become a new opportunity for building up short positions. At the same time, GBP/USD is trading above the support level of 1.1578. In the alternative scenario, the probability of growth to the resistance levels of 1.1820 (200 EMA on the 4-hour chart), 1.1910 (50 EMA on the daily chart) cannot be dismissed. If dollar buyers fail to quickly take control of the situation and overcome the dollar weakening impulse that is dangerous for them, then a breakdown of the local resistance level of 1.1650 may provoke further growth of the GBP/USD, as we noted above, towards resistance levels of 1.1820, 1.1910. But for now, short positions remain preferable. Below the key resistance levels 1.2390 (144 EMA on the daily chart), 1.2570 (200 EMA on the daily chart), GBP/USD remains in the long-term bearish market zone. Support levels: 1.1600, 1.1578, 1.1500, 1.1410 Resistance levels: 1.1650, 1.1700, 1.1760, 1.1820, 1.1910, 1.2000, 1.2270, 1.2390, 1.2570 Trading Tips Sell Stop 1.1560. Stop-Loss 1.1660. Take-Profit 1.1500, 1.1410 Buy Stop 1.1660. Stop-Loss 1.1560. Take-Profit 1.1700, 1.1760, 1.1820, 1.1910, 1.2000, 1.2270, 1.2390, 1.2570   Relevance up to 12:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321293
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

USD/CAD Has Posted Steady Gains In The Asian And European Sessions

Kenny Fisher Kenny Fisher 09.09.2022 15:42
The Canadian dollar usually is calm prior to the North American session, but USD/CAD has posted steady gains in the Asian and European sessions. USD/CAD is trading at 1.2993, down 0.73% on the day. Canada’s job market expected to rebound Canada releases the August employment report later today, with a market consensus of 15.0 thousand. The economy has shed jobs over the past two months, as the labour market appears to be losing momentum. This could affect future rate policy, as a weaker labour market may force the BoC to ease up on rate hikes earlier than it would like. The BoC delivered a 0.75% hike this week, following the super-size 1.00% increase in July. This brings the benchmark rate to 3.25%, the highest rate among the major central banks. Governor Macklem has said that the BoC is committed to front-loading rate increases now in order to avoid even higher rates down the road, which means that the Bank can relax in October, with a 0.25% hike or possibly no move at all. Inflation in July surprised by dropping to 7.6%, down from 8.1% in June. It’s too early to determine if inflation has peaked based on one release, but another decline would signal that tighter policy is bringing down inflation, which would allow the Bank to ease up on rate hikes. The BoC considers its neutral rate around 2.50%, and with the benchmark rate currently at 3.25%, the Bank’s policy is currently restrictive. This should dampen growth as well as inflation. Canada’s economy grew by 3.3% in Q2, below the estimate of 4.4%, but still a positive signal that the BoC could succeed in its delicate task of guiding the slowing economy to a soft landing. . USD/CAD Technical There is resistance at 1.3102 and 1.3232 USD/CAD is testing support at 1.2996, followed by support at 1.2866 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The UK New Government Could Raise Inflation Expectations And Lead To A “Sterling Crisis”

Kenny Fisher Kenny Fisher 09.09.2022 15:47
GBP/USD has recorded sharp gains today. In the European session, GBP/USD is trading at 1.1608, up 0.92% on the day. Still, the pound remains vulnerable – on Wednesday, it fell to 1.1407, its lowest level since 1985. Looking ahead to next week, there is a data dump on Monday, with GDP and Manufacturing Production the key events. It’s a very light calendar today, with no UK data and only one minor US event. Even so, the British pound has jumped on the bandwagon as the US dollar is broadly lower. The US dollar has taken a break after some impressive gains, as the pound has fallen some 500 points in just three weeks. With the US economy in good shape while the UK struggles, GBP/USD could resume its downtrend shortly. In the UK, PMIs have been pointing to weak conditions across the economy. The August manufacturing and construction PMIs pointed to contraction, with readings below the neutral 50.0 line. The Services PMI managed to remain in expansion territory, but just barely, at 50.9. Inflation remains red hot, hitting 10.1% in July, which has caused a severe cost-of-living crisis. Incoming Prime Minister Truss has pledged to cap energy bills, at a cost of some 132 billion pounds, which will provide households with some badly-needed relief. Truss inherits a struggling economy and her initial policy moves will be closely watched. Deutsche Bank has warned that an “unfunded and untargeted fiscal expansion” by the new government could raise inflation expectations and lead to a “sterling crisis”. What’s next for the Federal Reserve? The next meeting is on September 21st, with the Fed looking to raise rates by either 50 or 75 basis points. Next week’s inflation report could be a major factor in the Fed’s decision. Fed Chair Powell and other members have stated that curbing inflation is “priority number one”, and if inflation falls, it will raise speculation that the Fed plans to ease up, which would weigh on the US dollar. In July, inflation unexpectedly fell, and market exuberance about a change in Fed policy sent the US dollar sharply lower, despite the Fed saying its stance had not changed. . GBP/USD Technical 1.1589 has switched to support. Below, there is support at 1.1417 There is resistance at 1.1682 and 1.1839 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

GBP: Bank's Of England Plans Underwhelms Traders. UK Has To Face Energy Crisis And More

Jing Ren Jing Ren 09.09.2022 15:12
Maximum effort Global super-sized hikes give dollar breathing room GBPUSD hits 30-month low as recession looms The pound suffers from a symptom of high inflation and high interest rates. Expectations of steep rate hikes by the BoE fails to impress traders who tend to shy away from risk assets. Britain is facing strong headwinds in the shape of recession, soaring government spending and an energy crisis. The market fears that a 50bp increase would dampen consumer and business confidence and put growth at risk, a hefty cost for taming inflation. Meanwhile, the US dollar is backed by a sound economy and its safe-haven appeal, meaning that cable could stay subdued. 1.1420 is a critical support from March 2020 and 1.2100 the first resistance. EURUSD steadies on hawkish ECB The euro reclaimed parity following hawkish comments from the ECB. The central bank lifted rates by a record 75 basis points. Speculations run that another super-sized 75bp could be on the table next month. Now that the Europeans are on the same page as their US counterpart, a halt to the widening rate gap could prevent further bleeding in the exchange rate. However, the downside risk remains as the bloc is heading into a tough winter with soaring energy bills and debt burdens. A correction in the greenback may struggle to trigger a sustained recovery. 1.0320 is the first resistance and 0.9800 a close support. USOIL falters over weak demand WTI falls as traders fear that a recession is right around the corner. Lacklustre August trade numbers from China suggest more headwinds for the global economy. Exports lost steam due to softening demand from the US and EU while local lockdowns and weak consumer sentiment weigh on imports. Slower growth in China, the second largest oil consumer, may keep the market on its toes. In the meantime, major central banks’ relentless push for tighter financial conditions to fight inflation could be the straw that broke the camel’s back, making recession a reality. The price could be capped at 97.00 and heading towards 75.00. NAS 100 slips over tighter monetary policy The Nasdaq 100 stalls as the prospect of a prolonged downturn weighs on risk assets. The Fed is expected to raise rates by another 75 basis points at its September meeting. With growing signs of an economic slowdown in Europe and China, investors are wondering whether central banks might push too hard and send the world’s economy overboard. The combination of a global downturn and a hawkish Fed may keep restraining anyone’s enthusiasm in growth-sensitive stocks. The downside risk would be a complete reversal of July’s rally below the critical floor at 11400, thus confirming a bearish market. 13160 a fresh resistance. Key data release (GMT time) Tuesday, 13 September 06:00 ILO Unemployment Rate Harmonized Index of Consumer Prices 12:30 Consumer Price Index Wednesday, 14 September 06:00 Consumer Price Index 22:45 Gross Domestic Product Thursday, 15 September 01:30 Unemployment Rate 11:00 BoE Interest Rate Decision 12:30 Retail Sales Friday, 16 September 14:00 Michigan Consumer Sentiment Index
Further Downside Of The AUD/JPY Cross Pair Is Expected

The Slowdown In The Chinese Economy And The RBA's Fight Against Inflation

Kenny Fisher Kenny Fisher 09.09.2022 15:56
The Australian dollar has posted sharp gains today. In the European session, AUD/USD is trading at 0.6837, up 1.27%. China inflation falls unexpectedly China’s economy has been stalling, as global demand has weakened and China rigorously enforces a zero-Covid policy. The slowdown in the Chinese economy has hurt global growth, but the silver lining is that August inflation also dropped, which has taken the edge off global inflation. China is a key driver of external inflation pressures, and the decline will be welcome news in the major economies, where inflation remains enemy number one and has led to a sharp tightening in policy. China released the August inflation earlier today. On an annualized basis, August CPI was up 2.5%, lower than the 2.7% gain in July and below the consensus of 2.8%. The Producer Price Index for August slowed to 2.3%, down from 4.2% and below the estimate of 3.1%. The drop in CPI in the world’s number two economy has raised risk sentiment and sent risk-related currencies like the Aussie sharply higher today. The RBA raised rates by 0.50% earlier this week, bringing the cash rate to 2.35%. RBA Governor Lowe said on Thursday that the RBA would need to raise interest rates at least twice more to contain the “scourge” of inflation. Lowe reiterated that the pace and extent of future rate hikes would be data-dependent, especially inflation and wage growth. After four straight hikes of 0.50%, the RBA may decide to ease up in October with a small hike of 0.25%. Next week’s employment report will be an important factor in the RBA’s rate decision. . AUD/USD Technical AUD/USD is testing support at 0.6737. Below, there is support at 0.6661 There is resistance at 0.6737 and 0.6846 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

Euro (EUR): Reasons Why ECB Hiked The Interest Rate By 75bp. Lagarde Spills The Tea On The Future

Kenny Fisher Kenny Fisher 09.09.2022 16:51
EUR/USD hasn’t posted a winning week since August, but a spectacular rise today should put that trend to rest. In the European session, the euro is trading at 1.0102, up an impressive 1.03%. ECB delivers There were plenty of expectations ahead of Thursday’s ECB meeting, as the markets waited to see if the ECB would raise rates by 0.75% or play it safe with a smaller hike. Earlier in the week, eurozone yields and the euro dropped on reports that the ECB was looking at a 0.60% increase. In the end, the ECB came out with all guns firing, raising rates by 0.75% for only the second time in its history. The main driver behind the dramatic move is spiralling inflation, which hit 9.1% in August. The ECB is lagging behind other central banks, with the benchmark rate currently at 1.25%. This will not tame inflation, and at the meeting, the ECB revised upwards its inflation forecast for 2023, from 3.5% to 5.5%. At the same time, the ECB is sending a powerful message that it is serious about curbing inflation by tightening, even at the risk of a recession. Investors have reacted positively to the move, sending the euro sharply higher. What’s next for the ECB? Christine Lagarde was unambiguous when said that she is planning more rate hikes “because inflation remains far too high and is likely to stay above our target for an extended period”. Lagarde went further, saying there could be up to four more hikes in the current rate-tightening cycle. The markets have priced in 0.50% increases for the October and December meetings. Lagarde & Co. have clearly shown that they are willing to pay the price for higher rates, which is weaker growth that could result in a recession. The weak economic climate in Germany and the eurozone has been exacerbated by a potential energy crisis, with Russian President Putin declaring yesterday that he might cut off energy exports to Western Europe. Putin may or may not be bluffing, as the eurozone scrambles to find alternatives to Russian oil and gas before winter. EUR/USD Technical There is resistance at 1.0056 and 1.0152 0.9984 has switched to support, followed by 0.9888 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Asia morning bites - 16.05.2023

If The Currency "Power Ranking" Was Turned Upside Down, The (JPY) Yen Would Be Leading The Pack

Conotoxia Comments Conotoxia Comments 09.09.2022 17:52
The Japanese currency against the US dollar is the weakest of the main world currencies in 2022, having lost more than 20% in the last 12 months. As a result of such a strong drop, the USD/JPY pair's quotations have reached their highest level since 1998. This year, the yen intervention took place, which the market may again fear. The severity of the yen's drop may have been due to divergence in the Bank of Japan's monetary policy toward the world's other main central banks. The Fed raises interest rates, the ECB does, and the Bank of England or the Bank of Australia also raise interest rates. Meanwhile, the Bank of Japan continues to loosen monetary policy and keep market interest rates close to zero, also applying yield curve control. Nevertheless, the recent slump in the Japanese currency may have started to cause concern among Japanese policymakers and decision-makers. Source: Conotoxia MT5, USD/JPY, MN Japanese authorities are concerned about JPY weakness Japan's Vice Minister of Finance for International Affairs Masato Kanda said on Thursday that the government is "extremely concerned" about the yen after it weakened to levels seen 24 years ago. Kanda pointed out the recent "speculative, one-sided sharp movements of the yen", reasoning that the currency's decline cannot be explained simply by looking at the fundamentals and describing it as "excessive volatility". He assured that the government was coordinating actions with other countries, including the United States, adding that the government was ready to act on the currency market and was not ruling out any course of action, as reported by BBN/DJ. In addition, there has already been a meeting between Bank of Japan Governor Haruhiko Kuroda and Prime Minister Fumio Kishida, which may also have raised concerns among foreign investors. Technical situation - USD/JPY From a charting point of view, the USD/JPY pair's price has reached a potential resistance defined by the line drawn after the previous peaks in recent days. This line and the line drawn after the lows could form a possible expanding wedge formation. In the shorter term, this potential support could be located at the trendline and at the equilibrium of corrective movements, which at the moment falls in the vicinity of 141.10 JPY. Source: Conotoxia MT5, USD/JPY, D1 What is being said about the yen? In a statement to Bloomberg, the head of the currency strategy at Nomura Securities Co. in Tokyo said that there had been a three-way discussion between the BOJ, the Ministry of Finance and the Financial Services Agency and that this has a significant psychological impact on the market participants. Yujiro Goto also added that it also has something to do with the fact that if there was any plan to intervene, the government would coordinate with the BOJ. Goto pointed out that the risk of intervention and a change in BOJ policy or guidance this month has increased compared to a few weeks ago. In the summary of the Nomura Securities Co. representative statement, it was noted that some orders that accompanied bets on the USD/JPY above 145 could also be triggered.   Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Source: Fears of intervention targeting the Japanese yen (conotoxia.com)
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

European Stock Indices End Up Week With Increases

InstaForex Analysis InstaForex Analysis 10.09.2022 12:18
On Friday, key European stock indices rose dramatically. The positive previous closing of trading on the US stock market became the major catalyst for growth in European stocks. At the same time, strong performance of Asian stocks also had a beneficial effect. Moreover, stock market participants continue to discuss the outcome of the European Central Bank's September meeting on monetary policy.   By the time of writing, the STOXX Europe 600 index of Europe's leading companies increased by 1.41% to 419.92 points. Meanwhile, the shares of German energy company Uniper SE (+10.5%) were top gainers among STOXX Europe 600 components. Meanwhile, the French CAC 40 gained 0.69%, the German DAX added 0.89%, and the British FTSE 100 rose by 0.98%. The day before, Buckingham Palace announced the death of British Queen Elizabeth II. Despite this news, the London Stock Exchange operated as normal today. Top gainers and losers The shares of British fire protection company London Security PLC fell by 4.8%. In the first half of fiscal 2022, the company cut pretax profits due to the permanent rise in costs amid inflationary pressures. The stocks of UK retailer ASOS PLC rose by 1.6%. The company predicted revenue and profit in the current fiscal year at the level of market expectations. At the same time, ASOS PLC's sales in August were weaker than analysts expected. Market sentiment European investors on Friday focused on the results of the European Central Bank's September meeting. On Thursday, the regulator increased the benchmark lending rate to 1.25% per annum, the deposit rate to 0.75% and the rate on margin loans to 1.5%. At the same time the discount rate was raised by 0.75 percentage points for the first time in history. In addition, representatives of the Central Bank noted that the regulator intends to continue raising the rate at the upcoming meetings. Thus, the chairman of the European Bank Christine Lagarde said that further pace of interest rate increases will depend on statistical data. During the September meeting, the ECB also raised the forecast of consumer prices in 2022 to 8.1%, in 2023 to 5.5% and in 2024 to 2.3%. At the June meeting of the regulator's representatives, the preliminary figures were 6.8%, 3.5% and 2.1%, respectively. According to the new forecast of the European Central Bank, gross domestic product growth in the eurozone this year will be 3.1% against the previously predicted 2.8%. At the same time, GDP forecasts for next year were worsened to 0.9% from 2.1%, and for 2024 to 1.9% from 2.3%. Meanwhile, an important downward factor for the stock market in Europe is still the global energy crisis with its consequences for the economy of the region. Since the beginning of this week, gas prices have been under pressure due to disruptions in supply chains from Russia to Europe. The end of August saw the world gas prices soar above USD 3,500 per 1,000 cu.m., setting new historical records. The reason for such a dramatic price jump was Gazprom's announcement that Nord Stream, one of the main gas pipelines to Europe, would shut down for three days to perform maintenance. However, Nord Stream did not come out of the scheduled maintenance. Meanwhile, Russia canceled the deadline for resuming gas supply through the pipeline. Gazprom attributed this state of affairs to malfunctions on the Trent 60 gas compressor unit due to an oil leak. The Nord Stream pipeline has been operating at less than 20 percent of its capacity of late, and the recent suspension has raised fears about Europe's energy supply in the run-up to winter. Experts believe that permanently rising energy prices will further increase inflation in the eurozone, which is already rapidly approaching double digits. On Friday morning it was reported that industrial production in France fell in July for the first time since April. This means that the country's leading companies have cut production amid falling demand and high price pressures. Thus, the decrease in July was 1.6% in monthly terms against an increase of 1.2% in June. At that, analysts forecasted the reduction of industrial production only by 0.5%. Previous trading results Last Thursday, European stock market indicators closed in the green zone. Stock market participants were anxiously awaiting the publication of the results of the September European Central Bank meeting on monetary policy. The positive closing of the Wednesday trading on the US stock market proved to be an additional catalyst for the European indices growth yesterday. As a result, the composite indicator of Europe's leading companies STOXX Europe 600 rose 0.5% to 414.09 points. Meanwhile, France's CAC 40 gained 0.33%, Germany's DAX declined a symbolic 0.09% and Britain's FTSE 100 gained 0.33%. Genus Plc, a British animal genetic breeding company, soared more than 13 percent on revenue growth in its fiscal year. French IT company Atos SE is down nearly 15%. The market capitalization of Darktrace, a British cybersecurity systems developer, plummeted 31%. On Thursday, the company reported a return to pre-tax profits for the current fiscal year and nearly doubled its revenue. At the same time, Darktrace management also confirmed the end of talks with U.S. investment firm Thoma Bravo about the possible sale of Darktrace. The share price of Melrose Industries PLC, a British supplier of jet engines and auto parts, fell 2.3%. The day before, the engineering company reported an increase in pre-tax losses in the last fiscal half-year to 358 million pounds from 275 million pounds, noted a year earlier. In addition, earlier the international business newspaper Financial Times reported that Melrose Industries PLC plans to spin off its GKN car division into a new company registered in Britain. The value of securities of the British chain of restaurants and pubs Restaurant Group PLC increased by 2.1%. In January-June, Restaurant Group tangibly reduced its pretax loss due to strong revenue growth. UK food processor and retailer Associated British Foods PLC is down 7.6%. The retailer projected a 40% increase in sales for the fiscal year ending Sept. 17. At the same time, the company warned of a possible decline in adjusted profits next fiscal year amid rising energy prices and a stronger US dollar. The market capitalization of Finnish paper product manufacturer Stora Enso went up 2.8% on news about its purchase of Dutch carton manufacturer De Jong Packaging Group. The deal is valued at 1.02 billion euros. The share price of French retailer Carrefour rose by 2%. The stock price of French financial conglomerate Societe Generale rose by 2.6%. Quotes of the Dutch manufacturer of medical equipment Koninklijke Philips NV declined by 0.2%. Earlier, the French media reported that the Paris prosecutor's office launched an investigation into the recall of respiratory devices by the Dutch company. An important upward factor for the European stock indexes on Thursday was the strong positive dynamics of Wall Street the day before. The Dow Jones Industrial Average closed Wednesday's trading session with a 1.4% increase, breaking a seven-day sequence of permanent declines.     Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/321326
The Analysis Of Off-Chain Metrics Allows Cryptocurrency Supporters To Count On A Reversal

The BTC/USD Pair Is Strongly Bullish, New Opportunities

InstaForex Analysis InstaForex Analysis 10.09.2022 12:25
The price of Bitcoin rallied and now is trading at 21,256. It has increased by 15.47% from Wednesday's low of 18,540 to 21,408 today's high. Technically, the price action signaled that the downside movement ended and that the buyers could take the lead. In the last 24 hours, BTC/USD is up by 10.74% and by 5.46% in the last 7 days. The rebound helped the altcoins to rebound and recover as well. BTC/USD Sell-Off Ended! As you can see on the H4 chart, the BTC/USD found support at 18,595 and now it has developed a strong rally. After escaping from the down-channel, the cryptocurrency was somehow expected to turn to the upside. Now, it has ignored the 20,575 and 20,700 resistance levels signaling potential further growth. BTC/USD Outlook! BTC/USD is strongly bullish and it could extend its growth without a temporary retreat. Breaking and closing above the 20,700 key level was seen as a bullish signal. The next major upside target is represented by the 22,400 level. Coming back to test and retest 20,700 could bring new long opportunities. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade       Relevance up to 19:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292228
Summary Of The Week On Financial Markets

Summary Of The Week On Financial Markets

Ed Moya Ed Moya 11.09.2022 09:18
This week suddenly ends on a positive note as the S&P 500 broad market index, which started to climb on Wednesday, has lead the major stock market indicator to 4032 points, the highest since August 30. This is very strange considering all the negative news that could have affected the stock market this week. The European Central Bank (ECB) raised all interest rates by 75 basis points. This is the second time in the history of the single currency that such a move has been performed. The Federal Reserve’s (Fed) Chairman Jerome Powell confirmed the central bank will continue to do everything needed to bring inflation down to the 2.0% target. This kind of rhetoric is also being echoes by ECB President Christine Lagarde who has assured markets that the Bank is likely to take further bold steps to raise interest rates over the coming months. The message from these two bank leaders may enforce stocks to continue to move down.  However, investors found a reason to pull on the breaks and stop markets from another sell-off. Chicago Fed Bank President Charles Evans supported investors by saying that the next inflation report next week may point to how much the Fed could raise its interest rates this month. "If I saw inflation maybe cooling a little bit that's not going to change the fact that I still think we are going to need to top out at something like 3.5% to 4%, it's just that maybe we don't have to do it that soon," Evans said. Some investors were flooded with euphoria after crude prices fell by 16% over the last two month. It is clear that inflation may slow down significantly in August and perhaps prompt a less-than-expected Fed interest rate move.  It sounds more like wishful thinking as inflation is considerably above the existing level of interest rates for the Fed to pull the breaks on, even if prices slowed down in August. However, many investors are seen to support the idea and hope for stocks to recover. Even though some investors are holding onto hope, we should not exclude the possibility that a downside path of stock indexes could be a bit bumpy. The technical picture for the S&P 500 index is still negative as it is moving within an aggressive downside formation after it failed to climb above 4020 points on Thursday. This has now become a strong resistance level that may send the index back to the downside targets at 3850-3950 points. More negative drivers may send the index further down to the extreme secondary targets at 3600-3700 points, and even further down to heartbreaking 3000-3100 points.  In recent weeks, short positions at 70% of the targeted volume were opened at the average price of 4285-4290 points. The rest of the 30% could be opened once strong reliable downside signals emerge. The final downside target in the long-term is located at 2100-2300 points that could be reached by the end of 2022. The oil market made a huge step to the downside towards $75-85 per barrel of the Brent crude benchmark. Crude prices dipped down amid new anti-covid measures in China, unwinding global recession fears and a sharp rise of oil inventories in the United States. Brent prices slipped down to $87-88 per barrel, the lowest since January 2022, and are likely to continue down to the extreme targets at $50-65 per barrel that could be hit by November. In the short-term crude prices are less predictable making any entry points unreliable at the moment.  Gold prices are on a downside slide and they may last until the end of October. The primary scenario suggests prices may reach $1350-1450 per ounce by November. So, it would be reasonable to open short or small-short positions considering the current price movement at $1730 per ounce. The Euro was cheered on by the ECB’s decision to sharpen its interest rates hike, changing its formation to the aggressive upside with a primary target at 1.02500-1.03500. A reasonable correction to 1.00500-1.00800 is needed to open long positions. Once this correction is made the EURUSD could be interesting for long trades. GBPUSD also changed its formation to the aggressive upside with a target at 1.18000-1.18500. The pair needs to step back to 1.15300-1.15800 to be interesting to open long positions.
Further Downside Of The AUD/JPY Cross Pair Is Expected

The Australian Dollar Showed A Strong Rise On Friday, What Move It Will Make Today?

InstaForex Analysis InstaForex Analysis 12.09.2022 08:03
The Australian dollar showed a strong rise of 94 points on Friday. The stop occurred at the target level of 0.6870. The Marlin Oscillator faces double resistance: in front of the upper border of the descending channel (the signal line exited the wedge anyway), and in front of the border with the growth territory - the zero line. Overall the 0.6870 level looks very strong, supported by the oscillator, so a reversal from 0.6870 with the first downside target at 0.6755 is the main scenario. The price is developing above both indicator lines on a four-hour scale, the Marlin Oscillator has turned down and is trying to quickly approach the border with the downtrend territory. We follow the development of events; the movement in any direction should still be confirmed.           Relevance up to 04:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321366
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

How The British Pound To The US Dollar Started A New Week?

InstaForex Analysis InstaForex Analysis 12.09.2022 08:08
The pound gained 86 points on Friday. The upper shadow tested the level of 1.1648, the low of August 29th. Consolidation above the resistance will open the target range of 1.1755-1.1815, formed by the daily MACD indicator line and the target level of 1.1815. The downward movement will recover after the price settles under the support level of 1.1525 – the nearest target is 1.1385. The Marlin Oscillator is growing in the negative zone, so the current growth is considered in terms of a correction. Marlin can reach the zero line simultaneously with the price reaching the 1.1755-1.1815 range, where, if the pound does not turn around earlier, there is a high degree of probability that it will turn into a medium-term decline. The price is gathering strength under the resistance of 1.1648 on the four-hour chart, the Marlin Oscillator is preparing to continue the growth. If it does rise, then we are waiting for its continuation to the specified target range of 1.1755-1.1815. The decline is associated with additional difficulty in the form of the MACD line under the support of 1.1525 in the area of 1.1482, therefore, overcoming the price of only the support of 1.1525 may not be enough for full confidence in the development of the medium-term weakening of the British pound.         Relevance up to 04:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321368
The Upside Of The EUR/USD Pair Remains Limited

The EUR/USD Pair: The Price Is Still In A Growing

InstaForex Analysis InstaForex Analysis 12.09.2022 08:12
The euro ended Friday up by 48 points, closing above the target level of 1.0032. The upper shadow broke above the MACD indicator line. Today it opened exactly on the MACD line and growth was shown in the first hours of the trading session. Also, the Marlin Oscillator went into the positive area. At first glance, the price seems to be aiming for and even above the 1.0150 target level, which will create a deep correction from the decline since June (above 1.0360), but this plan has a serious obstacle in the desire of large players to avoid risk, which is primarily manifested in the stock market. We are waiting for its decline from day to day. We have already said that Friday's growth was associated with the buyout by large players in order to avoid a strong decline on the occasion of the European Central Bank rate hike and the death of Elizabeth II. Reinsurance turned out to be excessive, which affected today's opening with a gap. In the current situation, we do not expect the euro to rise above the resistance of 1.0150. A decline below 1.0020 will open the first bearish target at 0.9950. If the price settles above 1.0150, then an alternative plan will open with a large degree of uncertainty and a target of 1.0360. The price is still in a growing position on the H4 chart. The 1.0150 target is relevant, but we are following the growth with increased caution. The gap can close today, maybe in a day, maybe in a month...   Relevance up to 04:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321370
The EUR/USD Price May Fall Under 1.0660

How Can The Euro-US Dollar Pair Trade Today?

InstaForex Analysis InstaForex Analysis 12.09.2022 08:15
EUR/USD 5M The EUR/USD pair was trading rather calmly on Friday. Weekly highs have been updated, but the euro remains quite low, near its 20-year lows. Thus, it is still very early to talk about the end of the downward trend. By and large, the pair continues to ride the "swing". It went above the level of 1.0072 for a short time, which, we recall, is considered the upper boundary of the horizontal channel, but by the end of the day it returned to the area below it. Therefore, for the time being, we see no compelling technical reasons to expect further growth. But there are certain fundamental reasons. Last week, the European Central Bank raised the rate by another 0.75%, so the fundamental component is starting to improve for the euro. Indeed, this moment may not help, as the Bank of England raised rates six times, and the pound hit its 37-year lows in response. There were no important statistics or events either in the European Union or in the US on Friday, so traders had nothing to react to during the day. As for trading signals, there were only three of them during the day. First, the pair settled below the level of 1.0072, but this signal turned out to be false and one could receive a loss on it. The next signal was formed on a consolidation above 1.0072, but it should not have been worked out, since the candle on which the signal was formed was very strong and the price almost immediately approached the target level of 1.0124. The third sell signal was not strong, but it made it possible for us to make some money and cover the morning loss. The short position had to be closed manually in the late afternoon. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 3,000, while the number of shorts decreased by 8,300. Accordingly, the net position grew by about 12,000 contracts. This is not very much, but it is still a weakening of the bearish mood among the major players. However, this fact is not of particular importance, since the mood still remains bearish, and the euro remains "at the bottom". At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 36,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new depreciation of this currency. Over the past six months or a year, the euro has not been able to show even a tangible correction. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 12. European inflation and the speeches of the ECB representatives. Overview of the GBP/USD pair. September 12. Inflation in the UK, inflation in the US... it's going to be an interesting week! Forecast and trading signals for GBP/USD on September 12. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair continues to trade on the hourly timeframe in a mode very similar to the swing. The price tried to leave the horizontal channel, but at the moment it cannot be said that it succeeded. Thus, in the new week, we may well see a new round of downward movement with a target of 0.9877. We highlight the following levels for trading on Monday - 0.9877, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9985) and Kijun-sen (0 .9988). There is still no level below 0.9877, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. Among the important events on September 12, we can single out only the speeches of ECB members Schnabel and de Guindos. Perhaps they will provide important information to the market regarding rates and monetary policy. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321358
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The Pound/Dollar Pair Maintains A Downward Trend On The Hourly Timeframe

InstaForex Analysis InstaForex Analysis 12.09.2022 08:20
GBP/USD 5M The GBP/USD currency pair continued its corrective growth on Friday and managed to complete the downward trend line. Thus, a rebound from this line provoked a new round of decline, but so far the price remains in the immediate vicinity, so the upward movement may still continue with subsequent overcoming. If this happens, then the trend will temporarily change to an upward trend and the pound will have another opportunity to continue moving up. On Friday, there were no important macroeconomic statistics or fundamentals in either the US or the UK. All of Britain mourned the untimely death of Queen Elizabeth II. Important statistics will be published in this country only next week. Therefore, the pound uses this time to at least slightly move away from its 37-year lows. It turns out so far badly, but too little time has passed. In regards to Friday's trading signals, everything was both bad and excellent at the same time. Only one signal was formed, but it turned out to be very strong and profitable. The price rebounded from the level of 1.1649 with a minimal error and after that it fell by 83 points at the moment. Of course, it was not possible to close the deal at the highest profit - it also failed to reach the critical line. Therefore, it was necessary to close the short position manually in the late afternoon. Profit amounted to at least 50 points. COT report: The latest Commitment of Traders (COT) report on the British pound released yesterday, was very eloquent. During the week, the non-commercial group closed 5,700 long positions and opened 15,500 short positions. Thus, the net position of non-commercial traders immediately fell by 21,100, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains pronounced bearish, which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new fall, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its fall has resumed altogether, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 103,000 shorts and 52,000 longs open. The difference is twofold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the foundation and geopolitics. If they remain the same as they are now, then the pound may still be in a "downward peak" for some time. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 12. European inflation and the speeches of the ECB representatives. Overview of the GBP/USD pair. September 12. Inflation in the UK, inflation in the US... it's going to be an interesting week! Forecast and trading signals for EUR/USD on September 12. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair maintains a downward trend on the hourly timeframe. Despite quite a rise yesterday and the day before yesterday, it is clearly seen on the hourly timeframe that the price has slightly moved away from its 37-year lows and continues to be below the trend line. Thus, the technical picture has not changed yet. We highlight the following important levels on September 12: 1.1411-1.1442, 1.1649, 1.1874. Senkou Span B (1.1669) and Kijun-sen (1.1524) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. The UK will publish relatively important reports on GDP and industrial production on Monday. The second report is unlikely to cause a strong market reaction, but the first could theoretically do so. The problem is that this is a monthly GDP report, not a quarterly one. It is of much less interest to traders. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/321360
The Euro May Gradually Climb To The Target Level

Technical Outlook Of The Euro To The US Dollar Pair

InstaForex Analysis InstaForex Analysis 12.09.2022 08:23
Technical outlook: EURUSD pushed through the 1.0113 high last week, taking out initial resistance at 1.0085-90 with ease. The currency pair should correct lower this week towards the 0.9940-50 area before proceeding higher again. It is seen to be trading close to 1.0085 at this point in writing and is expected to drag lower soon. EURUSD is unfolding a larger-degree downswing since January 2021 after hitting resistance at 1.2350. The bears have carved a huge bearish boundary between 1.2350 and 0.9863 as seen on the daily chart. A pullback rally towards 1.0800-1.0900 remains a high probability before prices turn lower towards the 0.9400-0.9500 zone. EURUSD has carved a lower-degree upswing between 0.9863 and 1.0113 last week. The bears will remain inclined to correct lower towards 0.9940-50 over the next few days before giving in to the bulls. We can expect another push towards 1.0400-1.0500 thereafter with potential towards 1.0800-1.0900, which is the Fibonacci 0.382 retracement of the entire drop. Trading plan: Potential rally towards 1.0800-1.0900 against 0.9860 Good luck!     Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292284
The Euro May Gradually Climb To The Target Level

Can The ECB's Decision On Interest Rates Aggravate The Euro's Position Against The US Dollar?

InstaForex Analysis InstaForex Analysis 12.09.2022 09:31
Several market entry signals were formed last Friday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.0094 level in my morning forecast and advised making decisions on entering the market from it. The euro continued its gains during the European session after the European Central Bank's decision a day earlier to raise interest rates while maintaining further hawkish attitude towards monetary policy. The downward breakthrough and reverse test of 1.0094 provided an excellent entry point for long positions, but after a 15-point surge, buying activity dropped sharply. A return below this level and a reverse downward test led to a sell signal, which resulted in the pair falling by more than 50 points. When to go long on EUR/USD: The demand for the euro returned in today's Asian session, which allows us to count on the renewal of last week and this month's high above 1.0102. Given that there are no important fundamental statistics, most likely the bulls will cope with this task. The only thing I would pay attention to is the speeches of the ECB representatives. Considering the position even dovish politicians are now taking, their statements are unlikely to seriously harm the prospects for a recovery in the euro. In case the euro falls, the best scenario for buying will be a false breakout in the new support area of 1.0070, formed on the basis of last Friday. This will provide an excellent entry point, counting on the continuation of the upward correction with the nearest target at 1.0102. Statements by ECB representatives may also help the euro if it continues to aggressively raise interest rates. A breakthrough and downward test of 1.0102 will hit the bears' stop orders, which will create another signal to open long positions with the possibility of a correction to the 1.0138 area. A more distant target will be resistance at 1.0185, where I recommend taking profits. If the EUR/USD declines and there are no bulls at 1.0070, the pair will be under pressure again, but there is no need to panic. The optimal solution for opening long positions in this case would be a false breakout near the low of 1.0039, where the moving averages are, playing on the bulls' side. I advise you to buy EUR/USD immediately on a rebound only from the parity of 1.0001, or even lower - in the area of 0.9982, countin on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears fought back last Friday, but this was only a pretext for building up long positions in today's Asian session. The bears' main task for today is be to protect the nearest resistance at 1.0102, just above which a divergence may form on the MACD indicator, which, together with a false breakout, will lead to an excellent entry point for short positions with the goal of moving the euro down to 1.0070. A breakdown and consolidation below this range with a reverse test from the bottom up creates another sell signal already with the removal of bulls' stop orders and a larger drop in the pair to the 1.0039 area, where the moving averages are passing. I recommend taking profit there. A more distant target will be at least 1.0001, where in my opinion larger players should enter the market. In case EUR/USD jumps during the European session, as well as the absence of bears at 1.0102, the upward correction will only intensify. In this scenario, I recommend postponing short positions to 1.0138, but only if a false breakout is formed there. You can sell EUR/USD immediately for a rebound from the high of 1.0185, or even higher - from 1.0221, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT report) for August 30 logged a decline in both short and long positions. If a week ago there was a surge in activity, now there has been a similar decline. This indicates a decrease in investor appetite for risk after the release of the eurozone inflation data, which once again rose to a high in the last ten years. The problem is exacerbated by the energy crisis, as the flow of gas through the Nord Stream is practically suspended - this is another increase in energy prices in the winter and upward inflation surges, which will force the European Central Bank to further raise interest rates and tighten belts. This week we are also waiting for the central bank's decision on interest rates, which may aggravate the euro's position against the US dollar. Even though the rate hike will be considered by investors as a signal for the growth of profitability, at the same time there will be a slowdown in economic growth, which is more important. So don't expect a serious euro recovery in the medium term. The COT report indicated that long non-commercial positions decreased by 8,567 to 202,258, while short non-commercial positions decreased by 5,000 to 249,934. At the end of the week, the total non-commercial net position remained negative and decreased to the level of -47,676 against -44,109, which indicates continued pressure on the euro and further fall of the trading instrument. The weekly closing price slightly recovered and amounted to 1.0033 against 0.9978. Indicator signals: Moving averages Trading is conducted above the 30 and 50-day moving averages, which indicates an upward correction in the pair. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of a decline, the lower border of the indicator around 1.0025 will act as support. In case of growth, the upper border of the indicator in the area of 1.0102 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.       Relevance up to 08:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321386
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

The Down Trend Of The Euro To The US Dollar Pair Will Continue

InstaForex Analysis InstaForex Analysis 12.09.2022 09:36
Technical Market Outlook: The EUR/USD pair has been seen testing the key short-term supply zone located between the levels of 1.0090 - 1.0122. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the longer term down trend is reversed. The intraday technical support is seen at 1.0033 and 1.0000. The strong and positive momentum on the H4 time frame chart supports the short-term bullish outlook for EUR. Please watch the USDX as the correlation between this two is directly opposite. Weekly Pivot Points: WR3 - 1.01483 WR2 - 1.01150 WR1 - 1.01017 Weekly Pivot - 1.00817 WS1 - 1.00684 WS2 - 1.00484 WS3 - 1.00151 Trading Outlook: Despte the recent relief rally towards the short-term support one, the EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated.     Relevance up to 09:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292302
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The GBP/USD Pair: The Bulls Has Failed To Continue The Corrective Cycle

InstaForex Analysis InstaForex Analysis 12.09.2022 09:40
Technical Market Outlook: The GBP/USD pair has been seen continuing the bounce from the level of 1.1410 (7 years low) as the momentum is strong and positive on the H4 time frame chart. The US Dollar is in the pull-back mode, which helps the bulls to continue the up move. The local supply zone located between the levels of 1.1598 - 1.1622 had been broken, so the next target for bulls is seen at the level of 1.1717 and 1.1760. Those levels are just under the trend line resistance as well, so needs to be broken, because the larger time frame trend (daily and weekly) remains down until further notice. The levels of 1.1598 and 1.1622 will now act as the intraday technical support. Weekly Pivot Points: WR3 - 1.16716 WR2 - 1.16430 WR1 - 1.16286 Weekly Pivot - 1.16144 WS1 - 1.16000 WS2 - 1.15858 WS3 - 1.15572 Trading Outlook: The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame. The bears tested the level of 1.1410 (2020 swing low) and now the market is in the pull back mode. In order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th).     Relevance up to 09:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292306
In The Coming Days Will Be The Final Consolidation Of Bitcoin

The Growing Blockchain Community In Switzerland And The Middle East

InstaForex Analysis InstaForex Analysis 12.09.2022 09:44
Crypto Industry News: The Crypto Valley Association, based in Switzerland's Zug, the self-proclaimed "cryptocurrency valley", will lead the partnership with its Dubai counterpart. The aim of the venture is to connect the growing blockchain community in Switzerland and the Middle East. Both associations were founded by Ralf Glabischnig, who played an important role in establishing Zug as the center of blockchain and cryptocurrency organizations. The new partnership between associations based in Switzerland and the United Arab Emirates aims to establish contacts and exchange information between companies in both countries. Crypto Oasis co-founder Faisal Zaidi will lead the CVA-led initiative in Dubai, which already has 1,100 organizations based in the United Arab Emirates. All actors are involved in its growing ecosystem. Zaidi highlighted Dubai's efforts to adopt and promote Zug's blockchain-based companies, products and services: "This alliance will connect the scattered world of blockchain, linking Switzerland, which is a leader in disruptive technologies, with the Middle East, which is set to become the new cryptocurrency and blockchain hub." The CVA has already carried out a similar initiative in July. A branch in Latin America was then established to take advantage of the burgeoning crypto sector in South America. As announced, the CVA has sent out an invitation from Dubai International Financial Center to visit Zug. This is to identify blockchain organizations that have the potential to migrate to the United Arab Emirates to strengthen their growing ecosystem. Technical Market Outlook: The BTC/USD pair had bounced form a new swing low located at the level of $18,553 and is testing the lower channel line. The last local high was made at $22,342, so the next target for bulls is seen at $22,410. Nevertheless, on the H4 time frame chart the Pin Bar candlestick pattern was made at the top of the move, so the bears are more active around the lower channel line. The market conditions are extremely overbought on the H4 time frame chart so a pull back towards the technical support located at $20,580 is welcome. The main trend remains down and the next target for bears is located at $17,600. Weekly Pivot Points: WR3 - $23,418 WR2 - $22,624 WR1 - $22,146 Weekly Pivot - $21,821 WS1 - $21,352 WS2 - $21,035 WS3 - $20,241 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade         Relevance up to 09:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292307
Now you can view Bitcoin and Ethereum (ETH) prices on Twitter

Ethereum Is Struggling With Its Impending Merger, The ETH/USD Pair Has Been Seen Trading Above The 100% Fibonacci Projection

InstaForex Analysis InstaForex Analysis 12.09.2022 09:48
Crypto Industry News: Ethereum is struggling with its impending merger. This time the problem is with miners. Among them is a group that believes that switching to Proof-of-Stake may prove to be a threat to them. Chandler Guo, who spearheads efforts to maintain the current Proof-of-Work mechanism, believes that after the transformation, miners will be "broke" because the "multi-billion dollar" industry will disappear overnight. Despite this, the Ethereum Foundation remains optimistic about the upcoming changes. According to her, such a move will reduce blockchain energy consumption by 99.95%. This would be a step that could make this technology more environmentally conscious for companies. But Guo said the miners, who are "the community's largest stakeholder," are being pushed out of the business. He further stated that he knows that critics like him outnumbered major crypto companies including OpenSea, Tether, and Circle that back The Merge. Justin Sun, founder of the Tron ecosystem, also believes that Ethereum should remain in the PoW model. In a media podcast, he stated that the ETH was heading into uncharted territory. It could therefore turn out to be a catastrophic event given what happened to the "foundation of the crypto industry." However, Sun believes the transition to merge will work fine: "We can be 99% sure it will be a good start". Technical Market Outlook: The ETH/USD pair has been seen trading at the level of $1,785, which is above the 100% Fibonacci projection located at $1,753. The rally had ended with a Pin Bar candlestick pattern on the H4 time frame chart, so a pull-back towards the technical support seen at the level of $1,722 was done. The momentum is coming off the extremely overbought conditions, but is still strong and positive, so the outlook remains bullish for ETH on the short-term time frames. The next target for bulls is located at the level of $1,819 and $1,825. Weekly Pivot Points: WR3 - $1,875 WR2 - $1,807 WR1 - $1,765 Weekly Pivot - $1,738 WS1 - $1,697 WS2 - $1,670 WS3 - $1,601 Trading Outlook: The Ethereum market has been seen making lower highs and lower low since the swing high was made in the middle of the August at the level of $2,029. If the down move will extend, then the next target for bears is located at the level of $1,358. The key technical support for bulls is seen at $1,281.9 Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade       Relevance up to 09:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292309
Analysis Of The EUR/JPY Pair Movement

The USD/JPY Pair: Indicators Show An Upward Movement

InstaForex Analysis InstaForex Analysis 12.09.2022 09:53
USD/JPY:   The chart shows the movement of USD/JPY in the hourly (H1) chart. Indicators show an upward movement towards £144.10 per $1. This support level may become decisive for the development of the pair. In case of its testing and breakdown, quotes will rush towards £145.00. Otherwise, the daily trend will reverse towards £143.00 for $1. Good luck!         Relevance up to 08:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321380
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

The EUR/USD Pair: Today The Price May Move Upward

InstaForex Analysis InstaForex Analysis 12.09.2022 09:59
Trend analysis (Fig. 1). The euro-dollar pair may move upward from 1.0042 (close of Friday's daily candle) to the target of 1.0116, the 50% retracement level (white dotted line). After testing this level, a downward pullback is possible to test 1.0054, the 23.6% retracement level (red dotted line). Upon reaching this level, the price may move upward with the target of 1.0175, the 61.8% retracement level (white dotted line). Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – down; Volumes – down; Candlestick analysis – down; Trend analysis – down; Bollinger bands – down; Weekly chart – down. General conclusion: Today the price may move upward from the level of 1.0042 (close of Friday's daily candle) to the target of 1.0116, the 50% retracement level (white dotted line). After testing this level, a downward pullback is possible to test 1.0054, the 23.6% retracement level (red dotted line). Upon reaching this level, the price may move upward with the target of 1.0175, the 61.8% retracement level (white dotted line). Alternative scenario: from the level of 1.0042 (close of Friday's daily candle), the price may move downward to test 1.0017, the 38.2% retracement level (red dotted line). After testing this level, an upward movement is possible with the target of 1.0116, the 50.0% retracement level (red dotted line).     Relevance up to 08:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321384
The Commodities Feed: China's 2023 growth target underwhelms markets

Power Producers Need To Buy Carbon Permits, In China Loans To Households Remained Sluggish

Saxo Bank Saxo Bank 12.09.2022 10:01
Summary:  Ukrainian success in taking back significant territory from Russia over the weekend has driven a cautious further recovery in the euro and sterling at the open of trade this week. Elsewhere, yields have jumped higher, helping drive new yen weakness and taming risk sentiment as the US 10-year treasury benchmark trades near the cycle highs since June. Focus this week is on tomorrow's US August CPI release, the most important data point ahead of next week’s FOMC meeting.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities Friday on a strong note up 1.5% and S&P 500 futures have extended their gains overnight touching the 4,100 level because before receding to around the 4,085 level in early European trading hours. The US 10-year yield continues to move higher trading at 3.34% and if it sets a new high for the recent cycle it will probably cause headwinds for US equities so watch the US bond market. Next big macro event is tomorrow’s US August CPI report which is expected to print –0.1% m/m suggesting inflation is beginning to cool. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong, Shanghai, and Shenzhen are closed today for the mid-autumn festival holiday. Last Friday, Hang Seng Index soared 2.7%, snapping a six-day losing streak following China’s August inflation data surprising to the downside and raising hope for more monetary easing to come from the Chinese policymakers. Chinese property names rallied on market chatters about unconfirmed stimulus measures from policymakers to boost the ailing property sector. Ahead of the mid-autumn festival, catering stocks gained. CSI 300 climbed 1.4%, led by property, dental services, infrastructure, and digital currency.  Northbound inflows into A-shares reached USD2.1billion equivalent last Friday, the largest inflow in a single day since the beginning of the year. Ukrainian success on the battlefield drives EUR and GBP strength The surprise offensive and the re-capture of a key transport hub in the northeastern sector of the front after recent focus on operations in the south caught the market by surprise and has seen the euro and sterling rebounding versus the US dollar in early trading this week, with EURUSD trading to new local highs well clear of 1.0100 briefly overnight before edging back lower. Likewise, GBPUSD pulled north of 1.1650 before treading water back toward 1.1600. It will take some time and further developments to assess whether Ukraine can capitalize on its gains and this in turn triggers a new stance from Russia on its energy policy. JPY crosses back higher as yields rise The USDJPY correction on Friday inspired by somewhat stern language from Bank of Japan Governor Kuroda has mostly faded, as USDJPY bobs back above 143.00 overnight on US treasury yields challenging cycle highs. EURJPY pulled back close to the cycle high well above 144.00 overnight on hopes that the war in Ukraine is turning in the Ukrainians favour. New highs in USDJPY may bring more two-way volatility again if Japanese officialdom backs up its concern on the situation with market intervention (buying JPY). Crude oil (CLV2 & LCOX2) Crude oil starts the week in defensive mode with the focus staying with demand concerns amid continued lockdowns in China hurting demand from the world's top importer and a rapid succession of interest rates from major central banks negatively impacting the global economic outlook. Into the mix a US-backed plan to cap prices on Russian oil sales from December 5, a stranded Iran nuclear deal, strong demand for fuel products such as diesel at the expense of punitively high gas prices and a softer dollar. In addition, the collapse of Russian defenses in Ukraine and the response from Moscow will be watched closely. Monthly oil market reports from OPEC tomorrow and IEA on Wednesday should provide some further guidance on the supply/demand outlook. Brent’s current range: $92.75 and $87.25 US Treasuries (TLT, IEF) The 10-year US Treasury benchmark edged higher toward the local range high north of 3.3% overnight, with only the June peak at 3.50% remaining as the focus to the upside (this was the highest yield for the cycle since early 2011 and the run higher in yields in June coincided with the major low of the equity bear market this year. Tomorrow’s US August CPI number is the next key test for sentiment and yield direction, while the US Treasury will also auction both 3-year and 10-year treasury notes today and will auction 30-year t-bonds tomorrow. What is going on? France’s manufacturing production contracted in July According to the latest estimate released by the French Institute of National Statistics (INSEE), the manufacturing production decreased by a stunning 1.6 % month-over-month in July. It remains in expansion on a yearly basis (+0.2 %). Without much surprise, the drop is mostly explained by higher prices, especially higher energy prices. The INSEE does not forecast a recession in France this year. Nonetheless, growth is likely to decelerate very sharply in the coming quarters. The institute forecasts that growth will be around 0.2 % in Q3 and will be stagnant in Q4 2022. India’s rice export ban risk aggravating global food crisis After a ban on wheat exports earlier this year, India has now announced restrictions on rice exports, aggravating concerns of a global food crisis. Bloomberg reported India imposed a 20% duty on white and brown rice exports and banned shipments of broke rice. The new curbs apply to about 60% of India's rice exports and go into effect Friday. India’s rice output has been depressed due to the severe heatwaves, but also possibly to cap domestic price pressures. If these measures are duplicated by other key rice exporting countries like Thailand and Vietnam, there could potentially be a severe grain shortage globally, especially weighing on poor rice importing nations. We continue to see a threat of climate change to global agricultural output, which along with a prolonged energy crisis, suggested price pressure will stay in the medium-to-long term despite some cooling off from the recent highs. European carbon price drops as EU considers sale of permits from reserves The December ECX emissions contract (EMISSIONSDEC22) has fallen by around one-third since hitting a record high last month above €99 per tons. Given the current energy crisis, EU energy ministers are moving towards a deal to sell surplus permits from its Market Stability Reserve (MSR) in order to support a reduction in the cost of producing power and heating within the region. Power producers need to buy carbon permits to offset the polluting impact of using coal and gas over renewables. Occidental Petroleum shares rise on Berkshire accumulation In a filing on Friday, Berkshire Hathaway announced that it has lifted its stake to 26.8% in Occidental Petroleum. The move comes after the investment firm got regulatory approval for increasing the stake to over 50%. Berkshire’s move in Occidental Petroleum shares is seen as a move of confidence in the oil and gas industry as a much-needed industry for bridging the gap during the green transformation. Semiconductors are in focus as the US is expected to announce more curbs on exports The US Commerce Department is expected to publish new regulations curbing exports of semiconductors to China with companies such as KLA, Lam Research, and Applied Materials likely being impacted by the upcoming regulation. The move by the US further confirms the deglobalisation under the rule of self-reliance applied by increasingly more countries. China’s medium to long-term corporate loans picked up in growth  Over the past months, Chinese policymakers instructed policy banks and gave window guidance to commercial banks to extend credits to support infrastructure construction and key industries of the economy. Some results showed up in the August loan data which recorded a growth of 16% m/m annualized in the outstanding medium to long-term loans to the corporate sector. The amount of new medium to long-term loans to corporate was RMB 735bn in August versus RMB 346bn in July and RMB 522bn in August 2021. Loans to households remained sluggish. PBoC issues a list of 19 systemically important banks The People’s Bank of China and the China Banking and Insurance Regulatory Commission issued a list of 19 systematically important banks.  These 19 banks will face between 0.25% and 1% higher minimum capital requirements and additional leverage requirements. They are also asked to prepare contingency plans for major risk events. These 19 banks are Industrial and Commercial Bank of China, Bank of China, China Construction Bank, Agricultural Bank of China, China Minsheng Bank, China Everbright Bank, Ping An Bank, Hua Xia Bank, Ningbo Bank, China Guangfa Bank, Jiangsu Bank, Bank of Shanghai, Bank of Beijing; China CITIC Bank, China Postal Savings Bank, Shanghai Pudong Development Bank, Bank of Communications, China Merchants Bank, and Industrial Bank. The CPC is set to amend the party constitution at its upcoming national congress The Political Bureau of CPC Central Committee said in a readout last Friday that the Communist Party of China (CPC) is set to “work out an amendment to the Party Constitution that facilitates the innovative development of Party theories and practices and meets the need of advancing the great new project of Party building in the new era” at the CCP’s national congress to convene starting on October 16.  It further elaborates that “the latest adaption of Marxism to China's context and new circumstances will be fully epitomized and so will the new ideas, new thinking and new strategies of governance developed by the CPC Central Committee since the Party's 19th National Congress in 2017. What are we watching next? The Bank of England (BoE) will need to go big on 22 September The meeting initially scheduled for this week is postponed following the Queen Elizabeth II. Last week, both the Bank of Canada and the European Central Bank hiked their benchmark interest rate by 75 basis points. All eyes are turning to the BoE now. Pressure is mounting for the BoE to go big this week – meaning a 75-basis points hike. In August, the central bank hiked rates by 50 basis points to 1.75 %. Despite prime minister Liz Truss’s new anti-inflation plan (which will likely lower the peak in inflation), we think the BoE will need to show its commitment to fight inflation. The Bank forecasts that UK CPI will increase to 13.3 % year-over-year in Q4 2022. But the peak in inflation is only expected in 2023. This means that the cost of living will continue increasing in the short term, anyhow. Fed speakers stay hawkish before the blackout period begins and ahead of US CPI release tomorrow Fed rate hike expectations have picked up strongly since Jackson Hole, and we have heard an extremely unanimous voice from the Fed speakers since then. Some of them have clearly made the case for a 75bps rate hike in September, with Bullard on Friday even saying that Tuesday’s CPI report is unlikely to alter the incoming 75bps rate hike in September. Governor Waller leaned hawkish as well, but did not specify the size for September’s decision, but a “significant” hike still points to that. Esther George stayed away from guiding for individual meetings but made the case for sustained rate hikes. Ethereum merge The second-largest cryptocurrency, Ethereum, is scheduled to undergo a major upgrade this week (estimated on Thursday) which, if successful, will fundamentally change the way the cryptocurrency is working. It will go from the computationally intensive proof-of-work consensus to the more energy-friendly proof-of-stake, as well as introducing a mechanism to limit the inflation in Ethereum. The crypto community is looking very much forward to this upgrade, although some are concerned about the security in the new framework. Earnings to watch Today’s key earnings release is Oracle which a better-than-expected earnings result on 13 June surprising the market on EPS by 12% as the legacy database and software maker is gaining momentum in its cloud offering. Analysts expect FY23 Q3 (ending 31 August) revenue growth to accelerate to 18% y/y, which includes its recent acquisition of Cerner in the health care sector, which is impressive for the previously low growth company despite some of the growth being driven by acquisitions. If the outlook remains strong a longer-term repricing of the company’s valuation could be in the making. Today: Oracle Tuesday: DiDi Global Wednesday: Inditex Thursday: Polestar Automotive, Adobe Economic calendar highlights for today (times GMT) 0730 – ECB's Guindos to speak 0800 – Switzerland Weekly SNB Sight Deposits 1200 – ECB’s Schnabel to speak 1530 – US 3-year Treasury auction 1700 – US 10-year Treasury auction 2100 – New Zealand Aug. REINZ House Sales 0030 – Australia Sep. Westpac Consumer Confidence 0130 – Australia Aug. NAB Business Conditions/Confidence Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean engraver Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-12-2022-12092022
The US PCE Data Is Expected To Confirm Another Modest Slowdown

The US Economic Data Has Been Holding Up Strongly, Risk Of Stagflation In Europe And UK

Saxo Bank Saxo Bank 12.09.2022 10:10
Summary:  While the USD momentum has ruptured in the last few days due to increasing hawkishness of the European Central Bank and a strong verbal intervention by the Japanese authorities, there is potentially more room for the US dollar to run higher as Fed’s hawkishness can still outpace other global central banks. We need risks on Europe and China become more manageable, or a stronger opposition from non-US officials, or the Fed’s acceptable of a higher inflation target to really call it a top in the US dollar. It is no surprise that the US dollar hit a fresh record high on the back of aggressive tightening by the Fed as well as safe-haven flows from global economic deceleration concerns. The greenback reached post-Plaza highs, with the DXY index rising above 110, the highest levels since June 2002. However, the tide turned at the end of last week, possibly as other major global central banks upped the ante on rate hikes as well. The European Central Bank (ECB) raised rates by 75bps despite clear risks of a recession, and there was also chatter that the ECB could consider quantitative tightening by year-end. Meanwhile, Japanese authorities grew concerned about the weakness in the yen, and gave out stronger verbal guidance in yen’s defence. On the geopolitics as well, there were reports that Ukraine surprisingly recaptured a key northeastern city from Russia and is also making advances in the south, so there are talks that this could be a turning point in the war. That potentially reduced safe-haven flows to the dollar, and boosted the EUR and GBP. This week, however, brings the focus back on the US and the Fed. Tuesday’s US CPI data is the last data point of note before the Fed meets next week. A 75bps rate hike is baked in for the decision due on September 22. A positive surprise on US CPI may mean further upward repricing of Fed’s expectations with the terminal rate pushing above the 4% mark next year and easing expectations being pushed out further to late next year or 2024. That will support further gains in the dollar, with US yields running higher. But a strong USD is not always favourable. Corporate earnings take a direct hit from the rising dollar, given that most US companies generate a substantial part of their earnings outside the US. While most companies apply some FX hedging strategies, historically large upward swings in the USD have led to negative earnings revisions with a 9-12 months lag. The US also has a broader strategic objective to expand its manufacturing sector, and a strong US dollar could bite into the competitiveness of the sector. But for now, we do not see enough reasons for the dollar rally to cease or turn. The macro environment where the Fed acknowledges and is ready to take action further to slow US demand and bring inflationary pressures into balance suggests further gains for the dollar remain in store, atleast into the end of 2022 or into early 2023. A few things need to change before we can call it a top in US dollar: Fed has to slow down the pace of rate hikes, with possible recession on the cards or a capitulation in equities. The US economic data has been holding up strongly and there is no sign yet of a capitulation in equities even as the sentiment turned overly bearish last week. On a relative basis, there is still more reasons to believe that the tightening cycles for ECB and BOE may be repriced lower, while the Fed will need some more upward repricing. Risk of stagflation in Europe and UK needs to ease. The EU emergency summit did not see consensus build on securing energy supplies and a tough winter is still ahead. There has been some respite on the military front, but that can remain volatile and likely to result in further pressure from Russia on European gas supplies. Meanwhile, China needs to part with its zero covid policies, which is unlikely to happen before next year at least. In addition to the covid policies, China’s property sector overhang and resultant confidence deficit suggests more CNY pressures in the pipeline that defers to a further bullish USD trend. The People’s Bank of China seems to be happy with a controlled CNY depreciation. Other non-US officials need to start getting concerned about the weakness in their currencies. The biggest loser on the G10 board this year has been the Japanese yen. Japanese authorities have shown some concern about the weakness in the yen, but we only saw a mild recovery in the Japanese yen. The yield differentials between US and Japan will continue to underpin further gains in USDJPY. Even if the Japanese authorities were to directly intervene, it will only increase the volatility. The only catalysts for the yen to reverse its losses is lower US yields or Bank of Japan tweaking its yield curve control policy. A change in Fed’s inflation target to 2-3% in the medium-term. That could make the USD turn stick better without the need for quantitative easing. How to get exposure to the US dollar? To get exposure to the US dollar, one can consider the following instruments: Directly getting exposure to the Dollar Index through futures (DXU2) or CFDs (USDINDEXSEP22) Through ETFs such as WisdomTree Bloomberg U.S. Dollar Bullish Fund (USDU:arcx) or Invesco DB USD Index Bullish Fund (UUP:arcx) or BetaShares US Dollar (USD:xasx)     Source:https://www.home.saxo/content/articles/forex/us-dollar-is-it-time-to-call-a-top-12092022
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The GBP/USDr Pair Can Move Towards A Higher Level

InstaForex Analysis InstaForex Analysis 12.09.2022 10:16
Trend analysis (Fig. 1). The pound-dollar pair may move upward from the level of 1.1585 (close of Friday's daily candle) to the target of 1.1588, the 23.6% retracement level (yellow dotted line). After testing this level, continued upward movement is possible with the target of 1.1743, the 38.2% retracement level (blue dotted line). Upon reaching this level, the price may move up. Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Bollinger bands – down; Weekly chart – up. General conclusion: Today the price may move upward from the level of 1.1585 (close of Friday's daily candle) to the target of 1.1588, the 23.6% retracement level (yellow dotted line). After testing this level, continued upward movement is possible with the target of 1.1743, the 38.2% retracement level (blue dotted line). Upon reaching this level, the price may move up. Alternative scenario: from the level of 1.1585 (close of Friday's daily candle), the price may move upward with the target of 1.1643, the 21-period EMA (thin black line). After testing this level, continued upward move is possible with the target of 1.1743, the 38.2% retracement level (blue dotted line).       Relevance up to 08:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321388
Belarusian opposition leader proposed a collaboration to Ukraine

The Military Activities In Ukraine Are Also Supporting The Markets

Saxo Bank Saxo Bank 12.09.2022 10:23
Summary:  Amid depressed sentiment, with Fed officials reiterating their consistent hawkishness, US equities managed to close higher on the week for the first time in four weeks. It comes as technical trading, short-covering is at play. Meanwhile, fuel shortages see more investment moguls buy in, with Occidental Petroleum shares rising after hours. The volatility index, as measured by the VIX index dropped to its lowest level in 10 days (to 22.8), supporting risk-on sentiment, while Bitcoin moved up 10% to $21,704, after breaking above the $20,000 psychological level. However markets are ready to pivot, with a full calendar of data on tap that with provide clues on the Fed's tightening path. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rally amid another bear market bounce US equities rallied for the third day closing off Friday at the highest level since August 26, while also ending higher over the five days, for the first time in four weeks. S&P 500 gained 1.5% on Friday, 3.7% on the week, Nasdaq 100 2.2% Friday, 4.1% on the week. We think a technical quant rally is at play and short-covering, which is why there is a risk-on mode, in the midst of depressed sentiment, with Fed officials reiterating their consistent hawkish chorus. The last three trading days have also seen dealers report larger buying from long-funds and hedge funds buying into information technology, banks, pharmaceutical, and consumer discretionary (in particular luxury brands), while there has also been unusually large volume in option activity. The volatility index, as measured by the VIX index dropped to its lowest level in 10 days (to 22.8) while Bitcoin moved above the $20k psychological level, after moving up 10% to $21,704. Companies big moves in the US   The Grocer Kroger (KR:xnys) soared 7.4% after the company updated its full-year EPS guidance to USD4.05 from the previous forecast of USD3.95, citing strong demand for fresh food and a shift to private-label products. RH (RD:xnys) gained 4.5% despite the upscale home retailer lowering its sales and operating income guidance due to weaker demand and delayed store openings. While the CEO of RH said the US it would not lower prices to boost salesas it fears discounting will erode its luxury brand, this is despite saying the US is already in a recession. Shopify (SHOP:xnys) jumped 8.9% following the company appointing a Morgan Stanley investment banker to take up the role of CFO. Fuel shortages see more investment moguls buy in. Occidental Petroleum shares, one of the hottest shares to watch After hours one of the biggest movers in the US was Occidental (OXY.xnys) after Warren Buffett increased his stake in the company, pushing up Occidental shares 1.6% to ~$66.68 (after hours). On Friday night, data filings showed Berkshire Hathaway increased its stake to 26.8%, up from the 20% holding the fund held previously (according to Bloomberg data). It comes as Buffett won regulatory approval to buy up to 50% of the stock, after he has been growing his stake in the company over the last three years. So will Buffett take over the oil and gas giant? A Wall Street Journal article quashed such theories, but one thing is certain, Buffett is bullish on energy amid the energy crisis. So why is Occidental attractive to some? Its price to earnings (PE) ratio is 6.2 times, meaning its relatively cheap, and is expected to report another record profit in 2023 (according to Bloomberg data). Plus, its gas production is forecast to rise in the coming years, as the US bolsters LNG exports to Europe who is weaning itself off Russian fuel. Currently Occidental only makes 50% of its revenue from gas. Also note, Occidental is the best performer in S&P500 this year, up 126%, and you’d think if Buffett increases his stake from ~27% up to 50%, this would excite shareholders. US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) With another round of fed talks, this time from Fed Governor Waller, St. Louis Fed President Bullard, and Kansas Fed President George reiterating the Fed’s intention to go for another significant rate hike, i.e. 75 basis points on Sept 21, and auctions of USD42 billion 6-month T-bills, USD41 billion 3-year T-notes, and USD32 billion 10-year (fronted loaded) scheduled for Monday, and USD18 billion 30-year T-bonds on Tuesday, the 2-year yield rose 5bps to 3.51%.  The treasury yield curve flattened as the 10-year yield remained unchanged last Friday.  Tuesday’s August CPI will be the last key economic data release before the Sept FOMC meeting.  While traders are eagerly awaiting the CPI report to get some hints about the Fed’s path of rate hikes, Bullard said on Friday that a “good CPI report shouldn’t affect September Fed call”. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index soared 2.7% last Friday, snapping a six-day losing streak, following China’s August inflation data surprised on the downside and raised hope for more monetary easing to come from the Chinese policymakers. Mega-cap internet stocks strongly, Meituan (03690:xhkg) +4.9%, Netease (09999:xhkg) +4.8%, Baidu (09888:xhkg)+3.9%, Alibaba (09988:xhkg) +3.0%, Tencent (00700:xhkg) +1.7%.  One notable underperformance in the internet space was Bilibli (09626:xhkg/BILI:xnas) which plunged 16.3% after reporting a larger than expected loss in 2Q2022 on the deterioration of gross and operating margins.  Chinese property names rallied, Country Garden (02007:xhkg) +16.8%, Longfor (00960:xhkg) +7.4% on market chatters about unconfirmed stimulus measures from policymakers to boost the ailing property sector. CSI 300 climbed 1.4%, led by property, dental services, infrastructure, and digital currency. Ahead of the mid-autumn festival, catering stocks gained, Jiumaojiu (09922:xhkg) +8.9%, Haidilao (06862:xhkg) +2.8%. Lepu Biopharma (02157:xhkg) jumped 284%. After the market closed, the Center for Drug Evaluation posted on their website that a targeted antibody-drug conjugate co-developed by Lepu Biopharma and Keymed Biosciences has obtained breakthrough therapy designation status from the Chinese drug regulator.  Northbound inflows into A shares reached USD2.1billion equivalent last Friday, the largest inflow in a single day since the beginning of the year.  Hong Kong, Shanghai, and Shenzhen are closed today for the mid-autumn festival holiday. EURUSD boosted by Ukraine progress The US dollar ended the week on a backfoot after printing fresh YTD highs earlier in the week. EURUSD took a look above 1.01 once again early on Monday, amid optimism after military progress was made by Ukraine and talks of ECB considering quantitative tightening by year-end (see below). Gains were however reversed later. USDJPY optimism was also braked with the verbal intervention from the authorities getting louder late last week. Crude oil prices (CLU2 & LCOV2) Oil prices are lower to start the week with sentiment somewhat supported by Ukraine recapturing some of the key cities from Russia, and making military progress. Still, concerns on Russia’s war tactics getting bigger will continue to underpin caution, and Biden administration is now mulling whether to stop releasing oil from the US Strategic Reserves. WTI in Asian trading hours is 0.5% lower at $86.34/barrel.     What to consider? Fed speakers stay hawkish before the blackout period begins Fed rate hike expectations have picked up strongly since Jackson Hole, and we have heard an extremely unanimous voice from the Fed speakers since then. Some of them have clearly made the case for a 75bps rate hike in September, with Bullard on Friday even saying that Tuesday’s CPI report is unlikely to alter the incoming 75bps rate hike in September. Governor Waller leaned hawkish as well, but did not specify the size for September’s decision, but a “significant” hike still points to that. Esther George stayed away from guiding for individual meetings, but made the case for sustained rate hikes. EU minsters split on Russian price cap At the EU energy summit that kicked off on Friday, several key issues pertaining to energy supplies and liquidity were discussed, but decisions have been postponed as proposals are only likely to be delivered in the next few weeks. Consensus could not emerge on whether and how to impose a price cap on Russian natural gas, and members differed on whether a price cap should apply only to Russia or to other producers too. Tensions also bristled over proposed mandatory cuts in power demand and German calls for a mechanism to share any excess supply. India’s rice export ban to aid the galloping global food crisis After a wheat ban earlier this year, India has now announced restrictions on rice exports, aggravating concerns of a global food crisis. Bloomberg reported India imposed a 20% duty on white and brown rice exports and banned shipments of broke rice -- parboiled and basmati rice were excluded from the export duty and/or trade restrictions. The new curbs apply to about 60% of India's rice exports and go into effect Friday. India’s rice output has been depressed due to the severe heatwaves, but also possibly to cap domestic price pressures. If these measures are duplicated by other key rice exporting countries like Thailand and Vietnam, there could potentially be a severe grain shortage globally, especially weighing on poor rice importing nations. We continue to see a threat of climate change to global agricultural output, which along with a prolonged energy crisis, suggested price pressure will stay in the medium-to-long term despite some cooling off from the recent highs. Record volumes of Australian wheat go to China Despite trade disputes over other agricultural commodities, data shows China is importing a record amount of Australian wheat, as farmers gear up for a third consecutive bumper grain harvest. Industry sources estimate China will import about 6.3 million tonnes of Australian wheat for the year to September 30, making China by far Australia’s biggest customer. Indonesia is in second place with 3.7 million tonnes. The trade with China is up 186% from 2.2 million tonnes last year. Australian Federal government forecaster, ABARES expects farmers across Australia will have harvested 32.2 million tonnes of wheat, just shy of last year's record, 12.3 million tonnes of barley and a near-record 6.6 million tonnes of canola. Australian Agricultural stocks to watch include Graincorp (GNC), Elders (ELD), which are trading flat this year. China’s medium to long-term corporate loans picked up in growth while mortgages remained sluggish Over the past months, Chinese policymakers instructed policy banks and gave window guidance to commercial banks to extend credits to support infrastructure construction and key industries of the economy.  Some results showed up in the August loan data which recorded a growth of 16% MoM annualized in the outstanding medium to long-term loans to corporate. The amount of new medium to long-term loans to corporate was RMB735 billion in August versus RMB346 billion in July and RMG522 billion in August 2021.  Loans to households however remained sluggish. New medium to long-term loans to households (which were primarily mortgage loans) were RMB 266 billion in August, still much lower than the RMB426 billion level in August 2021.  The outstanding medium to long-term loans to households grew 5.3% MoM annualized in August. Outstanding aggregate financing grew 10.5% YoY in August, slightly below the 10.7% YoY in July. M2 grew 12.2% in August, edging up from July’s 12.0% YoY.  China’s PPI and CPI surprised on the downside China’s PPI slowed to 2.3% YoY (Bloomberg consensus: 3.2% ) in August from 4.2% in July.  The deceleration was largely attributable to the base effect and a decline in energy and material prices. CPI unexpected fell to 2.5% YoY in August from 2.7% in July while economists surveyed by Bloomberg had expected a rise to 2.8%.  Rises in both food prices (down to 6.1% YoY in August from 6.3% YoY in July) and the prices of non-items decelerated (down to 1.7% YoY in August from 1.9% YoY in July).  Excluding food and energy, consumer prices were unchanged at 0.8% YoY and Services inflation was also unchanged at 0.7% YoY in August. China’s central bank and banking regulator issued a list of 19 systemically important banks The People’s Bank of China and the China Banking and Insurance Regulatory Commission issued a list of 19 systematically important banks.  These 19 banks will face between 0.25% and 1% higher minimum capital requirements and additional leverage requirements.  They are also asked to prepare contingency plans for major risk events.  These 19 banks are Industrial and Commercial Bank of China, Bank of China, China Construction Bank, Agricultural Bank of China, China Minsheng Bank, China Everbright Bank, Ping An Bank, Hua Xia Bank, Ningbo Bank, China Guangfa Bank, Jiangsu Bank, Bank of Shanghai, Bank of Beijing; China CITIC Bank, China Postal Savings Bank, Shanghai Pudong Development Bank, Bank of Communications, China Merchants Bank, and Industrial Bank. The Communist Party of China (CPC) is set to amend the party constitution at its upcoming national congress The Political Bureau of CPC Central Committee said in a readout last Friday that the Communist Party of China (CPC) is set to “work out an amendment to the Party Constitution that facilitates the innovative development of Party theories and practices and meets the need of advancing the great new project of Party building in the new era” at the CCP’s national congress to convene starting on October 16.  It further elaborates that “the latest adaption of Marxism to China's context and new circumstances will be fully epitomized and so will the new ideas, new thinking and new strategies of governance developed by the CPC Central Committee since the Party's 19th National Congress in 2017. The amended Party Constitution will also clarify the new requirements for upholding and strengthening Party's leadership and advancing the Party's full and rigorous self-governance under new circumstances, so as to better navigate the great social revolution with vigorous self-reform”. ECB set to announce Quantitative Tightening by year-end After the European Central Bank’s 75bps rate hike this month, chatter on quantitative tightening to begin by year-end has gathered pace. Wall Street Journal reported that the ECB members agreed to  start discussions on quantitative tightening in early-October at a non-decision meeting in Cyprus on October 5, and will also likely be debated at subsequent meetings. Decision is expected to be made before year's end and will most likely see the beginning of balance sheet run-off in the first quarter of 2023. Whether the move will tighten financial conditions a lot will depend on details, especially pace of reduction in the €5 trillion balance sheet. Interestingly, ECB President Lagarde said last week that now is not the time for such measures to be implemented   For a look ahead at markets – tune into our Saxo Spotlight.For a global look at markets – tune into our Podcast.           Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-12-sept-2022-12092022
ByBit talks trading bots. What are they? How can they help?

Bitcoin Has Been Trading The Bottom Line, Will Be Further Rally?

InstaForex Analysis InstaForex Analysis 12.09.2022 10:35
Technical analysis: BTC has been trading upside as I expected and the price reached first objective at the level $22.000 but I see potential for further rally towards next main target. Trading recommendation: Due to the strong upside momentum and no bigger signs for the reversal, watch for buying opportunities on the intraday dips with the upside objective at $25.000. MACD oscillator is showing fresh upside momentum, which is sign that buyers are in control. Key short term support is set at the price of $21.150 Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade           Relevance up to 10:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292352
Prices Of Gold Rose For The Third Straight Session

How Can Be The Gold Further Direction, It Could Be Upward Movement?

InstaForex Analysis InstaForex Analysis 12.09.2022 10:52
Technical analysis:   Gold has been trading sideways in the last few days at the price of $1.724.Watch for potential breakout or rejection of the key resistance at $1.728 to confirm further direction. Trading recommendation: Watch for the price action around the key pivot at $1.728 to confirm further direction. Potential breakout of the key resistance at $1.728 can confirm upside movement towards $1.745 Potential rejection of the key pivot at $1.728 can confirm downside rotation towards $1.712.     Relevance up to 10:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292356
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

Expectations Of Fed Actions And Their Impact On The Currency Market

InstaForex Analysis InstaForex Analysis 12.09.2022 10:59
World markets closed higher last week, indicating that sellers are inactive ahead of incoming US news and Fed meeting next week. The main reason was the ECB meeting, at which the key interest rate was raised by 0.75% to 1.25%. Another factor could be the statements of both Christine Lagarde and Jerome Powell, which once again hinted that central banks would act aggressively when raising rates. However, some believe that the Fed will not be able to withstand pressure, so they will take a pause in rate increases. They said the central bank will act only when consumer inflation in the US slows down. Forecasts already say CPI is likely to decline from 8.5% to 8.1% y/y, then from 0% to -0.1% m/m. If the data comes out lower than expected, the Fed will raise rates by only 0.25% in October. In this case, a slowdown in the sale of government bonds and a continuation of the weakening of dollar can be expected. Also, the rally in stocks that began last week may continue, which will spur the growth of risky assets, including euro. Forecasts for today: EUR/USD The pair is trading below 1.0110. Overcoming this mark may push the quote towards 1.0200. USD/JPY The pair is rising, thanks to positive market sentiment. This may lead to a further increasefrom 143.65 to 145.00.   Relevance up to 08:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321372
The USD/JPY Price Seems To Be Optimistic

The USD/JPY Pair Is Still Upward But It Can Be Potential Pullback

InstaForex Analysis InstaForex Analysis 12.09.2022 11:05
Technical analysis: USD/JPY has been trading upside this morning and I see potential for the continuation of the strong upside trend in the background. Trading recommendation: Due to the strong upside cycle in the background and potential pullback play, I see further upside continuation. Watch for the buying opportunities on the intraday dips with the upside objective at the price of 145 and 146.50. Key support is set at the price of 141.50     Relevance up to 10:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292360
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

What Can Expect From The Major Currency Pairs, Will Be Bullish Or Bearish Trend? (EUR/USD & GBP/USD)

InstaForex Analysis InstaForex Analysis 12.09.2022 11:11
EUR/USD Higher timeframes The opening of the week took place with some upward gap. Bulls are not in a hurry to complete the corrective rise. Instead, there is hope for its development, as well as a change in daily preferences. To implement these tasks, bulls need to overcome the resistance of the weekly short-term trend (1.0116) and eliminate the daily death cross (1.0116 - 1.0176 - final levels). For bears, the 1.0000–0.9989 zone (psychological level + daily short-term trend) remains as support, while the minimum extremum (0.9864) and the downward trend recovery are still the targets. H4 – H1 As of writing, the main advantage on the lower timeframes is on the bulls' side. The reference points for the upward movement within the day today can be noted at 1.0128 (H4 target) and 1.0168 - 1.0224 (classic pivot points). The key levels of the lower timeframes are now supports, guarding bulls at 1.0050 (central pivot point of the day) and 0.9976 (weekly long-term trend). Consolidation below will change the current balance of power. *** GBP/USD Higher timeframes At the opening of the trading week, an ascending gap of several points is noticeable, as well as the desire of bulls to develop the current corrective movement, formed earlier after testing support at 1.1411 (minimum extremum of 2020). The bulls have already updated last week's high, we can note the resistance levels of the daily cross 1.1737 - 1.1840 - 1.1943 among the reference points, and the weekly short-term trend (1.1848) serves as support in this area. H4 – H1 Bulls currently have the advantage on the lower timeframes. They are now testing the strength of the upper boundary of the H4 cloud (1.1672). Upon breakdown, an upward target will be formed. In addition, the reference points for the rise within the day are now the resistance of the classic pivot points (1.1728 - 1.1810). The key levels form support and are currently located at 1.1575 (central pivot point) and 1.1537 (weekly long-term trend). A breakdown of 1.1575–37 and a reliable consolidation below will change the current balance of power, while the situation would be better to re-evaluate. *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)         Relevance up to 09:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321400
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

EUR/USD - Euro May Get Stronger Thanks To The ECB And Ukraine's Activity. Will The US Inflation Reading Boost The US Dollar (USD)?

Conotoxia Comments Conotoxia Comments 12.09.2022 11:17
The euro this morning is the strongest of the world's major currencies, gaining nearly 0.5 percent against the USD. The main currency pair's exchange rate is still above parity and has reached its highest level in three weeks. EUR/USD with a chance for a bigger rebound? The struggle with the parity level of 1.0000 on the EUR/USD pair has been going on for quite some time. The rate seems to oscillate around this level, finding itself once above and once below this "psychological" barrier. Nevertheless, there may now be chances that the euro may be preparing for a bigger rebound. On the one hand, this may be supported by expectations of monetary tightening in the Eurozone, and on the other by the Ukrainian military offensive and its effective retaliation.  As the British Defense Ministry reported on Monday, Moscow is believed to have ordered the withdrawal of its military forces from the Kharkiv region, leading Ukraine to regain control of some territories. Near the city of Kherson, the latest intelligence briefing noted that Russia is having difficulty bringing reserves to the front line across the Dnieper River using improvised bridges, while Ukraine continues to shell the area with long-range artillery. Due to recent developments, confidence in the Russian military command will continue to decline, the British report concluded, BBN/ND mentioned. Source: Conotoxia MT5, EUR/USD H1 The gap between the USD and Euro advantage seems narrowing From the point of view of the interest rate market, the difference in the expected interest rate of the US dollar and the euro in the future also seems to be narrowing - as FRA contract quotes may indicate.  In addition, the gap between the 2-year USD and EUR interest rates has narrowed to levels last seen in early March, when the EUR/USD rose toward 1.10, Bloomberg commentators note. So it seems that this may be changing the outlook in the forex market from a one-sided view that everything may depend only on Fed action to a more balanced view in which the ECB may play a more prominent role. Perhaps the impact of this has not yet been fully priced in, and could result in EUR/USD possibly having a chance to make up some of its losses after Russia's invasion of Ukraine. EUR/USD has finished forming an accumulation? From the point of view of the chart, we can go back to the events of late August. At that time, the EUR/USD fell to the area of 0.9900 and consolidated in the region of 1.0000 - 0.9900 for many days. This could have led to the emergence of a potential accumulation in a relatively small range of fluctuations. Instead, it could culminate in a move toward 0.9850, where the euro fell to its lowest level in 20 years, which happened in early September. Then there could have been a so-called spring and a test of supply. The ensuing upward wave, in turn, is a possible "show of strength."  At stake now could be a sustained hold above 1,0000 and the overcoming of the downward trend line, the beginning of which was already set six months ago, in March. Source: Conotoxia MT5, EUR/USD D1 What else is the EUR/USD likely to react to this week? In addition to events from the war front and statements from central bankers, US inflation data may also be important. According to market consensus, inflation may fall to 8.1 percent in August from 8.5 percent in July and 9.1 in June. On the one hand, a deeper drop in inflation could be more positive for risky assets, while an above-consensus reading could continue to support the dollar, and the current weakness could be considered a correction.   Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service)   Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. Source: Euro gains strength with Ukrainian military offensive? (conotoxia.com)
Russia's Weekend Mutiny Raises Concerns About Putin's Power Grip; Market Highlights: Gold Support, FX Intervention, and Fed's Stress Test Results

The US Dollar Keeps Growing And Is It Thanks To Fed's Policy?

InstaForex Analysis InstaForex Analysis 12.09.2022 11:17
Former US Treasury Secretary Lawrence Summers said dollar has more room to grow given a number of fundamentals behind it. He expressed skepticism over the effectiveness of any intervention to turn the tide for yen. In a statement, Summers stressed that the US has a huge advantage in not being dependent on "outrageously expensive foreign energy." He noted that Washington has taken a stronger macroeconomic response to the pandemic, and that the Federal Reserve is now tightening monetary policy faster than its counterparts. So far, the Bloomberg Dollar Spot Index is up about 11% year-to-date, hitting a record high this week. Dollar reached its highest level against euro since 2002 on Tuesday - 0.9864, while it reached the highest level since 1998 against yen on Wednesday - 144.99. Yen has depreciated faster than euro, causing a more-than-19% fall against dollar this year. This prompted increased warnings from Japanese officials, with Bank of Japan Governor Haruhiko Kuroda meeting with Prime Minister Fumio Kishida to discuss latest concerns on Friday. Japanese officials are not ruling out options as market participants discuss the chances of intervention to buy yen and sell dollars. Japan hasn't done this since 1998, when it teamed up with the US - while Summers was deputy treasury secretary - to help stem the yen's fall. For its part, the US Treasury Department insisted on its unwillingness to support any potential intervention in the forex market to stop the depreciation of yen. Summers stressed that the more fundamental issue for yen is the interest rate adjustments in Japan, both short-term and long-term. The Bank of Japan maintained a negative short-term interest rate, as well as a 0.25% yield cap on 10-year bonds.  Go to dashboard       Relevance up to 14:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321348
ECB press conference brings more fog than clarity

Market View On The EBC Decision And The Euro Situation(9.09)

ING Economics ING Economics 11.09.2022 09:43
The ECB has chosen a path of agressively frontloading its policy tightening, which sets EUR curves up for further flattening and eventually inversion should the economic outlook not keep up with the ECB's relative optimism. For now, broader upward pressure on rates should persist,  with larger hikes from the BoE and Fed to follow soon.  In this article ECB: 75bp and more to come EUR curves set up for inversion Temporary relief for the collateral scarcity issue Large rate hikes also coming from the BoE and Fed Friday’s events and market view Source: Shutterstock ECB: 75bp and more to come The hawks won the front-loading argument and the ECB’s council unanimously decided to raise all key rates by 75bp. More hikes are likely as inflation risks are seen as still skewed to the upside. The ECB's own inflation forecasts have increased, warranting a more aggressive approach. The growth forecasts, while lowered, do not project a recession next year and thus provide the leeway for more forceful action. Quantitative tightening will reportedly also be part of the discussion at the next non-policy setting meeting The broad support for the ECB’s hawkish turn was later confirmed by press reports that even the Council’s doves are not opposed to repeating yesterday’s action in October. Chief Economist Lane’s presentation to the council reportedly struck a decidedly more hawkish tone than his latest public speech, which was then widely viewed as an attempt to counterbalance the prior hawkish barrage. What is more, quantitative tightening will reportedly also be part of the discussion at the next non-policy setting meeting in early October. That cuts into one of the rare dovish undertones of yesterday’s meeting –  that reinvestment guidance was left unchanged and quantitative tightening hadn’t been discussed yet. Lagarde had said rates were the preferred instrument. 2Y German yields should soon catch up to 10Y, inverting the curve as a result Source: Refinitiv, ING EUR curves set up for inversion Against that hawkish backdrop, President Lagarde specifying that the stated expectation to “raise rates over the next several meetings” will mean hikes at the next two, three or four meetings, looked like an attempt to prevent market hike expectations from running all too wild. Markets now see a 50% probability of another 75bp in October. The pace is then expected to slow, but by the end of Q1 the ECB is seen increasing the deposit facility rate to at least 2.25% before pausing – timing thus in line with Lagarde’s specification. Near term do not exclude further upside to rates led by front-end speculation Reflecting this ramp-up in hike expectations the broader EUR curve has bear-flattened in reaction to the meeting. Near term we would not exclude further upside to rates, led by front end speculation. For the long end that still means we do not dismiss the possibility of the 10Y Bund yield touching the 2% handle. We remain wary of the ECB’s still rose-tinted outlook for the European economy. While our economists are now seeing the ECB to hike by another 75bp in total this year, they still see energy crisis pushing the eurozone into a recession eventually. That means the ECB may not deliver quite as much as is currently priced. After all, the ECB is employing a meeting-by-meeting strategy, its outlook to hike for the next several meetings is based on current information – and that is subject to change. We think the ECB’s aggressive front loading sets the stage for EUR curves to eventually invert. The squeeze on short-dated German paper is finally easing Source: Refinitiv, ING Temporary relief for the collateral scarcity issue We have highlighted the potential for government cash management to aggravate the current collateral scarcity issue given a 0% remuneration cap for government deposits held at the central bank. The ECB has acknowledged the issue and its potential to impede the transmission of its policy changes into the market. The 0% cap is replaced by a cap at the deposit rate or €STR, whichever is lower. It was this decision that elicited the largest market reaction, including a tightening asset swap spreads. The change is only valid until the end of April next year The caveat is that this change is for now only valid until the end of April next year. Until then government debt agencies have time to think of alternatives for their roughly €500bn in central bank deposits. While fears of an immediate crunch on the back of a hike and sudden shift in these deposits is alleviated, the scarcity issue is not going away. We will be watching for hints of how debt agencies will adjust, which might already become evident  when bill issuance calendars are updated for the upcoming quarter. Running large cash buffers will have to be weighed against the costs starting to bite next year. Large rate hikes also coming from the BoE and Fed The upward pressure on rates from monetary policy remains broad-based. Markets are bracing for the Bank of England to potentially follow the lead of the Fed and now the ECB in deploying 75bp hikes. While our economist is still inclined to see the BoE hiking by only 50bp, the new government’s extra support measures are proving to be a double-edged sword for the Bank which is trying to tame inflation. Over in the US the Fed’s Powell latest comments are seen as supportive for another 75bp hike on 21 September. The need to act now on inflation outweighs any doubts about the economic outlook. To the contrary, robust data of late also provide the Fed with the room for aggressive action, Next week’s CPI data should seal the deal for a 75bp hike. While headline inflation rate is seen falling to 8.1%, the core is actually expected to accelerate again.     Friday’s events and market view For now the upside to rates propagating out the curves from aggressive policy tightening intentions remains in place. Not only does the ECB's stance leave room for markets to price in more, but markets are also bracing for large hikes from the BoE and Fed over the coming weeks. But beware, that is only a near term view.   The main focus of Friday will be on central bank speakers with final comments before the Fed's quiet period kicks in coming from the Fed's Evans, Waller and George. European market may see their share of the usual post ECB meeting commentary and reports, though also Lagarde herself is scheduled to speak.   TagsRates Daily   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EUR: Testing 1.0700 Support Ahead of ECB Meeting

Pressure On The Philippine Peso To Weaken In The Coming Months

ING Economics ING Economics 11.09.2022 10:01
Exports unexpectedly contract as mainstay electronics shipments slide Source: Shutterstock $5.9bn July trade deficit New all-time low  As expected Trade deficit hits new low Philippine July trade data show the trade deficit widening further to $5.9bn, hitting a new record low. Imports sustained the recent trend of double-digit gains (21.5%YoY) while exports unexpectedly fell by 4.2%.  Electronic exports, which account for the bulk of total outbound shipments, fell for a second straight month to post a contraction of 7.9%.  Softer demand for electronics will likely persist, which does not bode well for the Philippine export sector.  Imports posted another month of strong gains but the increase can be tied to pricey energy and food imports. Fuel imports jumped 86.5% due to higher prices while cereal imports rose 64.7% due to domestic supply shortages.  The extremely wide trade deficit suggests that the current account will also stay in the red, which should add to pressure on the PHP to weaken in the coming months. Trade deficit hits a record low as exports unexpectedly contract   Source: Philippine Statistics Authority Weak currency magnifies headwinds The PHP has been on a downtrend in recent months and is currently the worst performing currency among ASEAN peers.  A weaker currency tends to magnify headwinds faced by the Philippines as it fans imported inflation, reflecting the Philippines’ reliance on imported food and energy items.  Supply chain shocks, resurgent demand and a weaker currency have all contributed to inflation charging past target (currently at 6.3%YoY), hampering the economic recovery.  Bangko Sentral ng Pilipinas (BSP) Governor Medalla recently expressed his concern about the impact of a weaker currency on the inflation path.  Given expectations that the current account deficit will persist, we now expect BSP to front-load tightening, with a 50bp rate hike at the meeting on 22 September.       TagsPHP Philippines trade deficit Central Bank of the Philippines   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD And The GBP/USD Pairs Will Keep Upward Trend Today?

InstaForex Analysis InstaForex Analysis 12.09.2022 12:00
Details of the economic calendar for September 9 The week ended with an empty macroeconomic calendar. Important statistics in Europe, the United Kingdom, and the United States were not published. Despite the absence of statistical data on Friday, the market continued to show speculative activity. Probably, traders were playing back the decision of the ECB to tighten its own policy. Analysis of trading charts from September 9 The EUR/USD currency pair strengthened its position during the past week. As a result, the quote went above the two-week range of 0.9900/1.0050. The cause and effect of the upward cycle lies in the results of the ECB meeting, released last Thursday. The GBP/USD currency pair gained about 230 points (about 2%) in less than a week. The level of the local low of 2020 (1.1410) serves as a support in the corrective movement. Economic calendar for September 12 At the opening of the European session, data on UK industrial production was published, which slowed down from 2.4% to 1.1%. This is a negative factor for the country's economy, but based on the trading schedule and the market's reaction to statistical indicators, the pound sterling ignores them. Important statistics in Europe and the United States are not expected today. However, it is worth paying attention to the sppeches of the representatives of the ECB. Earlier, interesting statements were already received from representatives of the ECB, which indicate that the regulator should act tougher. Joachim Nagel (ECB): - Inflation in Europe could rise above 10% by December. - The ECB needs to act more aggressively if necessary. - A recession is possible in Europe. Klaas Knot (ECB): - The regulator needs to be more decisive if the situation requires it. - Some economists have already started talking about a 0.75% rate hike in October. Yannis Stournaras (ECB): The ECB has not yet raised the rate to a neutral level. We need to raise it to this level faster. The neutral rate level can be within 1.5%–2%. Trading plan for EUR/USD on September 12 Since the opening of the new trading week, an upward gap of about 60 points has appeared. This price gap brought the quote back to the highs of last week. With the opening of the European session, the upward cycle accelerated, which led to a move above the 1.0150 level. In this situation, a price impulse of more than 100 points in a short period of time can lead to overheating of long positions in short time periods. This may lead to a technical pullback. At the same time, stable price retention above the 1.0150 mark allows for the subsequent formation of a correction for dollar positions. Trading plan for GBP/USD on September 12 There is also an upward gap in the pound, which returned the quote to the high of last week. Subsequently, there was a prolongation of the correction course, where the cycles are similar to the movement of the EURUSD pair. Stable price retention above 1.1650 will eventually lead to an increase in the value of the pound to at least 1.1750. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.           Relevance up to 10:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321417
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

What Can Bring A Busy Economic Calendar For The British Pound?

InstaForex Analysis InstaForex Analysis 12.09.2022 12:32
He who laughs last, laughs best. The EU managed to prepare by reducing the share of Russian gas imports from 40% before the armed conflict in Ukraine to 9%. The storage facilities are more than 80% full, which makes it possible to survive the cold winter, and Brussels' plans to limit prices make gas futures quotes fall. This was a real breath of fresh air for European currencies. And the pound is no exception. For a long time, the sterling was in disgrace due to the energy crisis, the third prime minister in the last three years and double-digit inflation. In such a situation, investors treated the pound like flies to burnt toast. In fact, the British currency can be a jam for them. Instead of starting her job as head of government with a tax cut announced during the campaign, Liz Truss has prioritized curbing inflation and promised £150bn of fiscal stimulus to households to escape energy poverty, which is a game-changer. The government estimates that the aid package will cut the CPI by five percentage points. Research by Capital Economics shows that consumer prices will peak not in January, as previously expected, but in November. This peak will not be at 14.5% but at 11.5%, which is lower than the Bank of England's forecast of 13%. BoE Actual and Projected UK Inflation Trends However, any fiscal stimulus boosts GDP growth and drives up prices, so the £150bn package from Liz Truss is seen as pro-inflation. Yes, its impact will be manifested later, but the Bank of England must act now to prevent the growth of inflation expectations and fixing the CPI at an elevated level for a long time. As a result, Nomura expects the repo rate to soar to 3.75% in the coming months, NatWest Markets raised its forecast from 2.5% to 3.5%, and JP Morgan sees the 75 bps increase in borrowing costs in September is real. In fact, due to political uncertainty, Andrew Bailey and his colleagues have found themselves in an even worse position than they were. They need to assess the impact of fiscal stimulus from the new government, and the death of the UK's Queen came in handy. BoE announced the postponement of its meeting from September 15 to September 22, that is, it bought time. This week, the pound expects a busy economic calendar, including statistics on foreign trade, GDP, inflation, labor market and retail sales. However, the dynamics of GBPUSD will largely depend on gas prices in Europe and on the reaction of US stock indices to the release of data on the US CPI. Technically, on the GBPUSD daily chart, after the pair reached the previously designated target by 161.8% according to the AB=CD pattern, a natural rebound followed. Rebound from resistances at 1.175–1.177 and 1.182–1.184 should be used for selling.     Relevance up to 09:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321406
Gold Stocks Have Performed Very Well Under Pressure

The Gold Prices Are Still Trading Unchanged

8 eightcap 8 eightcap 12.09.2022 12:55
Gold managed to hold critical support above $1,700 despite the US dollar's update of its 20-year high, which means sentiment has improved. Although gold may rise this week, analysts warn that investors should not expect a significant breakout as the Federal Reserve continues to aggressively raise interest rates. There is currently an 88% chance that the US central bank will raise the federal funds rate by another 75 basis points on September 21st. Bannockburn Global Forex managing director Mark Chandler said he sees any rally in gold as a short-term correction of the current downward trend. Last week, 16 market professionals took part in a Wall Street survey. Nine analysts, or 56%, said they are optimistic about gold this week. Two analysts, or 13%, said they were bearish. Five analysts, or 31%, said they were neutral about the precious metal. In the retail sector, 495 respondents took part in online surveys. A total of 255 voters, or 52%, called for gold to rise. Another 153, or 31%, predicted a fall in gold. While the remaining 87 voters, or 18%, were in favor of a side market. Optimism among Main Street investors has improved sharply after bearish sentiment hit a multi-year low last week. The resumption of near-term confidence is due to the fact that gold prices are still trading relatively unchanged, breaking a three-week losing streak. Chris Vecchio, senior market analyst at DailyFX.com, said that despite challenging conditions for gold, market bulls can be confident that the precious metal has managed to create solid support around $1,700. Many analysts say they are bullish on gold as the US dollar appears to be unable to sustain gains above its recent 20-year high. Equiti Capital market strategist David Madden said that while gold appears to be stuck in a neutral position above $1,700 an ounce, it has shown some resilience, which could help draw some attention.     Relevance up to 10:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321410
Bitcoin Is Showing The Potential For The Further Downside Rotation

Will Bitcoin Overcome The Problems And Will Be Strong Again?

InstaForex Analysis InstaForex Analysis 12.09.2022 13:07
Contrary to forecasts and fears, Bitcoin managed to keep the $18.5k–$19k key zone intact. Due to this, the price of the cryptocurrency reversed and recovered above $22k over the weekend. Impulsive and powerful upward movement became possible due to a number of fundamental factors, as well as the categorical skepticism of market participants. As a result, Bitcoin reached the level of $22k and continues to consolidate to resume the upward movement. However, the influence of certain factors can significantly affect the prospects of the main cryptocurrency in the short term. At this stage, there are two fundamental problems for Bitcoin to resume its upward movement. One of them is the Ethereum update, which risks drastically changing the balance of power in the cryptocurrency market. Chainalysis analysts stated that, most likely, The merge update will give Ethereum an advantage over BTC and make it even more attractive to institutional investors. In addition to the upcoming interest in Ethereum, there has already been an increase in investment infusions into the altcoin. Indirectly, this is evidenced by the decrease in the level of Bitcoin dominance to the level of 39%. After an upward spurt over the weekend, the indicator reached the level of 41%, however, the second fundamental problem of BTC will not allow to build on this success. The key deterrent to the potential growth of Bitcoin is the macroeconomic situation and the policies of the Central Banks. Last week, the ECB raised its key rate by 75 basis points, with an increase forecast of 0.5%. This decision indicates the absence of significant changes in the monetary policy of the Central Bank. A similar situation is observed in the US, where markets estimate a 70% chance of raising the key rate by 75 basis points. This week, the inflation report for August will also be released, which is able to give a positive impetus to the crypto market. An easing of monetary policy is also likely closer to November, when the elections to the US Congress begin. This gives hope for the recovery movement of Bitcoin within wide ranges. However, there are alarming factors that indicate the likelihood of a protracted inflationary crisis. Goldman Sachs experts are confident that in 2023 the inflation rate in the United States will reach 22%. And there is no doubt that this will cause a corresponding reaction from the Fed and the maintenance of a tight monetary policy. Under such conditions, it is not necessary to hope for a serious rally in the price of Bitcoin. In the more foreseeable future, in addition to fundamental factors, serious pressure from miners remains. Miners have sold over 4,600 BTC over the past few days, according to CryptoQuant data. Mining companies will remain an important factor that puts pressure on the price both when it grows (to take profits) and when the price falls to lows. Despite the fundamental difficulties, Bitcoin has a good chance of realizing some bullish runs. The main reason for optimism was the formation of the largest green candle since May 30th. The formation of such a pattern indicates the gradual activation of buyers and the growth of bullish sentiment. Given the presence of a news and buying corridor for growth, Bitcoin may try to reach a local high at $25k. The successful consolidation of the cryptocurrency above $22k can become a springboard for further upward movement, in case of a positive response from US investors. As of writing, we see signs of the upside potential of Bitcoin drying up on the daily chart. The size of green candles gradually began to decrease, and the appearance of wicks indicates the activation of sellers. The price faced serious resistance near the $22.1k level. Technical indicators confirm the presence of a serious seller holding the $22.1k resistance zone. The RSI index continues to move upward, but the characteristic breakdown on the chart indicates the presence of serious bearish volumes. Stochastic has entered the oversold zone and is moving sideways. The probability of a reversal through the formation of a bearish crossover increases significantly. At the same time, MACD resumed its upward movement and is approaching the zero mark and the green zone. This may indicate the formation of a fundamental upward movement of the cryptocurrency. We see a similar movement on the chart of the S&P 500 stock index. The correlation of Bitcoin with the stock market remains, which adds fuel to the asset for growth. It is important to note that nothing has changed fundamentally. Bitcoin and the fund are rising while the US dollar index corrects. The break in the inverse correlation between BTC and DXY will be the main signal for a change in the fundamental situation. Given the temporary correction of the dollar index, we can count on the continuation of the upward movement of BTC/USD with a potential of up to $25k. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade     Relevance up to 10:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321413
The Commodity Sector Has Dropped Significantly

The Commodity Sector Has Dropped Significantly

Saxo Bank Saxo Bank 12.09.2022 13:14
Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to Tuesday, September 6. A week that saw a sharp deterioration in risk appetite with global stock markets responding negatively to concerns about global growth and sharply higher bond yields as central banks signalled willingness to hike rates agressively. The commodity sector dropped by more than 4% in response to these developments, resulting in a broad reduction in hedge funds positions, most notably in crude oil, natural gas, gold and soybeans Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to Tuesday, September 6. A week that saw a sharp deterioration in risk appetite with global stock markets responding negatively to concerns about global growth, not least in China where lockdowns spread again. In addition, the prospect of sharply higher rates by central banks to combat runaway inflation saw US bond yields spike while the Bloomberg Dollar Index hit a fresh record high.  Commodities The commodity sector dropped by more than 4% in response to the deteriorating growth outlook with the stronger dollar adding an additional layer of uncertainty. All sectors suffered losses led by energy and industrial metals and speculators reacted accordingly by cutting bullish bets across 19 out of the 24 major commodity futures markets tracked in this report. The 138k lots reduction was the result of 74k lots of longs being sold and 64k lots of fresh short positions being added. A development that supported the bounce that followed last Tuesday’s reporting deadline when the dollar reversed lower, thereby supporting a general recovery in risk appetite.   Energy:  Funds sold a combined 38k contracts of crude oil and fuel products in a week where China and global demand worries, as well as the stronger dollar helped trigger steep losses across the five crude oil and fuel product futures tracked in this update. In addition, the overall market participation continued to decline with the total open interest falling to 4.8 million contracts, the lowest level of open interest since November 2014.Crude oil drifted lower during the reporting week to last Tuesday and with key support not being challenged until the following day, the main change was a 17.5k lots reduction in the Brent gross longs while the WTI held steady with both and long and short positions seeing small increases. The natural gas net short more than doubled to 49k lots after the notoriously volatile contract slump around 10% below $8 per MMBtu just two weeks after hitting $10 per MMBtu for the first time in 14 years. Metals: The metal sector, led by gold, saw broad selling in response to multiple headwinds, the most important being the stronger dollar, rising treasury yields and China growth worries. The latter hitting copper and with that also silver, the result being additional short selling lifting the silver net short to a 40-month high at 24.6k lots. The overall net reduction of 30k lots was driven by a 4k lots reduction in longs and fresh short selling of 26k lots, a development which just like energy raised the risk of a short-covering rebound should the technical and/or fundamental outlook become more supportive. This is what happened after Thursday’s ECB meeting and verbal intervention by Bank of Japan officials helped weaken the dollar.   Agriculture Funds turned net sellers of the grain and soybean sector for the first time in six weeks. The relatively small 15k lots reduction was driven by reductions across the three soybean contracts. Buying of corn meanwhile extended to a sixth week while speculators maintained an overall short position in CBOT and Kansas wheat futures. In softs, some of the recent strong buying was reversed led by sugar and cocoa.   Forex Speculators responded to continued dollar strength in the week to September 6 by increasing bullish bets via the Dollar index and against nine IMM futures. The 10% jump in the combined dollar long to $20.2 billion, a five-week high, was primarily driven by heavy selling of GBP and JPY. The Sterling net jumped 63% to 50.4k lots ($3.6 bn) while the 3% depreciation of the JPY drove a 52% increase in the net short to 58.2k lots ($5.1 bn). It was however interesting to note that renewed EURUSD selling below parity helped attract the first major round of short covering in four weeks. Fading momentum and negative divergence between the falling price and rising RSI pointed to selling fatigue and traders growing wary ahead of Thursday ECB rate decision.  What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming       Source: https://www.home.saxo/content/articles/commodities/cot-commodity-short-sellers-left-exposed-as-dollar-drops-12092022
Industrial Metals Outlook: Assessing the Impact of China's Stimulus Measures

Podcast: The Situation In Ukraine Helps The European Market, The Yen's Situation

Saxo Bank Saxo Bank 12.09.2022 11:24
Summary:  Today we discuss market risk sentiment brightening in Europe in the wake of Ukrainian momentum on the battlefield since late last week, with EURUSD breaking well above important local resistance. The JPY is nearly as weak as the US dollar as yields have poked higher again. We also discuss developments in crude oil, wheat and rice after an Indian export ban, stocks to watch this week, including Oracle on the earnings report today and key semiconductor stocks as the US is likely to widen its curb on exports to China. Today's pod features Peter Garnry on equities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.     Source:https://www.home.saxo/content/articles/podcast/podcast-sep-12-2022-12092022
The UK Markets Remain Volatile, Possible Contraction Of The Eurozone Economy

It Seems That British Pound (GBP) Trades Higher, But Not On Account Of Its Strength. Has The US Inflation Eventually Peaked?

Kenny Fisher Kenny Fisher 12.09.2022 13:39
GBP/USD has started the trading week with sharp gains.  In the European session, GBP/USD is trading at 1.1678, up 0.80% on the day. Pound soars despite weak UK data It’s a busy economic calendar this week in the UK.  The markets were treated to a data dump today, highlighted by GDP and Manufacturing Production. In July, GDP grew by a modest 0.2% MoM, shy of the estimate of 0.5%, but an improvement from the -0.6% reading in June. Manufacturing Production in July dipped to 1.1% YoY, down from 1.3% in June and missing the estimate of 1.7%. Despite the lukewarm data, the pound has soared, which is clearly a case of US dollar weakness rather than UK strength. The dollar is lower today against the majors, with the exception of the Japanese yen. We could see more volatility from GBP/USD on Tuesday, with the UK releasing employment data and the US publishing the August inflation report. The UK labour market remains robust, one of the few bright lights in a grim economic landscape. Unemployment rolls are expected to continue to drop, and wage growth, which has been moving higher (although much slower than inflation) is forecast to rise to 5.1% in July (3Mo/Yr), up from 4.7% in June. All eyes will be on Tuesday’s US inflation report for August, with the markets expecting CPI to fall to 8.1%, down from 8.5%. This would mark a second straight decline, and would raise speculation that inflation has at last peaked. Following the unexpected drop in July’s inflation release, market exuberance that the Fed would make a U-turn on its aggressive tightening sent the equity markets up and the US dollar sharply. The Fed has stuck to its policy, and the markets appear to have a healthier respect for the Fed’s commitment to remain aggressive, with the market pricing in a 75 basis point hike at the meeting on September 21st. Tuesday’s inflation report will be doubly important, as it marks the final economic release before the September meeting. GBP/USD Technical GBP/USD is testing resistance at 1.1689, followed by resistance at 1.1790 There is support and 1.1548 and 1.1447 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. British pound rallies as USD retreats - MarketPulseMarketPulse
Navigating the Inverted Yield Curve: Implications for Currencies and Central Banks User

The US Dollar Started This Week Just Like The End Of The Previous- To Sell

InstaForex Analysis InstaForex Analysis 12.09.2022 15:01
Blue line- bearish RSI divergence Black lines- Fibonacci retracements The Dollar index has started the week under selling pressures, exactly as it ended last week.Price is turning lower below last week's lows. As we mentioned several times before, a pull back is justified as the RSI has warned traders that the upward momentum is weakening. The RSI has provided bearish divergence signals warning of a coming pull back. Price is vulnerable to a move at least towards 105.80 from 108.16 it currently is. A pull back towards that level is justified and is our minimum target. It is too early to call a top or a major top. The chances, that the rise from 89.18 is over, have increased and bulls should be very cautious.         Relevance up to 14:00 2022-09-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292394
The Outlook Of Gold By FXSTreet’s Dhwani Mehta

The Gold Price Has The Potential To Go Even Higher

InstaForex Analysis InstaForex Analysis 12.09.2022 15:06
Red line -channel resistance Blue line- horizontal resistance Gold price is challenging the short-term resistance of $1,725 and is very close to turning short-term trend to bullish. Price is above the horizontal resistance and has potential to move even higher towards $1,750 area where we find the upper channel boundary resistance. Gold price has started making higher highs and higher lows after the double bottom around $1,690. Price has made three attempts to break above $1,725. On the fourth attempt we seem to be successful as prices today are above the horizontal resistance. If bulls manage to hold price above $1,710, then we should not be surprised if Gold reaches at least $1,750-60. Concluding, key support at $1,710. Bulls need to defend this level in order to continue higher.   Relevance up to 15:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292396
PLN Soars to Record Highs Ahead of NBP Decision

Will The EUR/USD Pair Break Above The Resistance Level?

InstaForex Analysis InstaForex Analysis 12.09.2022 15:11
Red lines- bearish channel Black lines- Fibonacci retracements EURUSD has started the week exactly how it ended the previous one. Dollar weakness across the board and EURUSD making short-term higher highs and higher lows. Price has so far retraced the 61.8% of the decline from 1.0368. This Fibonacci retracement level is key resistance. Short-term trend might be changing to bullish, however price remains inside the medium-term bearish channel. Next resistance is at 1.0260. Breaking above this level will increase chances EURUSD moves higher towards 1.04.       Relevance up to 15:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292398
Bitcoin Has A Sign Of The Sideways Regime

Can Bitcoin Make Another A Slightly Higher Highs?

InstaForex Analysis InstaForex Analysis 12.09.2022 15:15
Black lines- FIbonacci retracement Bitcoin continues its upward bounce that started last week at $18,550. Bitcoin has so far retraced more than 50% of the decline from $25,200. The important Fibonacci resistance level is at the 61.8% retracement at $22,680. Bulls need to recapture this level in order to hope for a bigger reversal higher. Bitcoin is approaching the key Fibonacci resistance. The RSI has reached overbought levels and justifies a pause in this upward movement. Most probable scenario is for Bitcoin to pause the rise here or make a slightly higher highs, and then turn downwards to retest recent lows. We continue to believe that this is only a counter trend bounce. Read more: https://www.instaforex.eu/forex_analysis/292400   Relevance up to 15:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292400
The EUR/USD Pair Is Showing A Potential For Bearish Drop

JPY (Japanese Yen) Is Going Down Lacking Actual Support From Governors. Bitcoin Price Leave Investors With Mixed Feelings

Craig Erlam Craig Erlam 12.09.2022 15:19
European stocks are off to a positive start on Monday, following a relatively muted day in Asia amid bank holiday closures in China, Hong Kong and South Korea. UK growth continues to struggle The UK economy grew slightly less than expected in July, with growth supported by consumer-facing services on the back of the Women’s EUROs and the Commonwealth Games. With the additional bank holiday this month, the economy could be facing a small technical recession, albeit one that won’t be nearly as bad as was expected prior to the cap on energy bills. There’s a lot more data to come this week which should show consumer spending slipping as inflation remains above 10% and the labour market still strong. Yen slips once more The Japanese yen is slipping again at the start of the week despite continuous warnings from officials about the movements in the currency. While they continue to stress the urgency with which they view the unjustified moves, they’ve so far shown themselves to be all talk and no action so the warnings are increasingly falling on deaf ears. US inflation data eyed on Tuesday There’ll be a heavy focus on the US this week as traders await CPI data on Tuesday. The release comes following another flurry of hawkish Fed speak. It seems policymakers were keen to reinforce their hawkish position ahead of the blackout period – which we’re now in – potentially with an eye on that data point. They’ll have no opportunity to react to the release ahead of the meeting and there was perhaps a feeling that a softer reading could see market expectations slip which they clearly want to avoid. It will be interesting to see how traders now respond as we’ve seen how keen they are to hop aboard the “dovish pivot” train before. Bitcoin enjoying a strong rebound The recovery in bitcoin since the end of last week has been very strong, with the rally topping 4% again today. Whether it’s the expectation of a dovish shift, a weaker dollar or just an improvement in broader risk appetite, something is giving cryptos a big boost and that’s helped bitcoin hit its highest level since it went into freefall on 19 August. Things may be looking up in the short term, although once more, that may well depend on the inflation data. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Risk rebound continues - MarketPulseMarketPulse
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

Euro's Performance Is Impressive, Look At The EUR/USD Chart! We Will Soon Find Out How Is The US Economy Doing

Kenny Fisher Kenny Fisher 12.09.2022 15:35
The euro is red hot, having gained close to 2% in just two days. EUR/USD is trading at 1.0144, up 0.97% on the day. ECB gives euro boost The ECB showed last week that its hawkishness was not limited to words, as the central bank delivered a massive 0.75% rate hike, for only the second time in its history. The markets are paying attention, and the move has triggered an impressive rally by the euro. The ECB sent a powerful message that it is committed to curbing inflation by raising rates, even at the risk of a recession. President Christine Lagarde said at the meeting that she expected three or four more hikes, and the markets have priced in 0.50% increases at the October and December meetings. The economic outlook in the eurozone remains grim, with PMIs pointing to weakness in manufacturing and business activity. Russia has shut down the Nord Stream 1 pipeline which supplies gas to Germany, raising fears that the eurozone countries could face an energy shortage this winter. It should not come as a surprise that confidence levels are weak. The ZEW Economic Sentiment index remains mired in a deep freeze, and slowed to -60.0 in July, down from -55.5 in September. Read next: It's Going To Be An Interesting Week For UK! ECB Members Is Set To Speak| FXMAG.COM US inflation Has US inflation peaked? We’ll get a look at US CPI for August, with the markets expecting inflation to fall to 8.1%, down from 8.5% in July. Following the unexpected drop in July’s inflation release, market exuberance that the Fed would make a U-turn on its aggressive tightening sent the equity markets up and the US dollar sharply. The Fed has remained consistent with its stance and the markets appear to have internalized that the tightening cycle has some more room to run. The markets have priced in a 75 basis point hike at the meeting on September 21st. Tuesday’s inflation report will be doubly important, as it marks the final economic release before tomorrow’s meeting. If inflation hits 8.1% or higher, it would likely cement a 75bp move by the Federal Reserve. EUR/USD Technical EUR/USD has support at 1.0107 and 1.0008 There is resistance at 1.0152 and 1.0257 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro climbs to 3-week high - MarketPulseMarketPulse
Poland's Inflation Expected to Reach Single Digits in August, but Disinflation to Slow Down

Forex: Australian Dollar (AUD) Benefited From Chinese Data, But The US Inflation And Australian Indicators Print Are Still Ahead Of Aussie

Kenny Fisher Kenny Fisher 12.09.2022 21:26
The US dollar has continued its retreat against most of the major currencies today. The Australian dollar has jumped on the bandwagon, climbing about 2% in just two days. AUD/USD is trading at 0.6882 in the North American session, up 0.59% on the day. Australian Dollar (AUD) Driven By Chinese News The Australian dollar skyrocketed on Friday after China’s inflation report indicated that CPI dropped in August to 2.5%, down from 2.7% and lower than expected. The decline in inflation in the world’s number two economy will lower global inflation, and this raised risk sentiment on Friday. The Australian dollar, which is very sensitive to developments in China, climbed 1.36%. The Australian currency’s dependence on China is a double-edged sword, as lower growth in China will weigh on the Australian economy and the Australian dollar. In the meantime, AUD/USD has jumped on the bandwagon and hit a 2-week high. Read next: Fed May Hike The Rate By 75bp, Oracle (ORCL) And Adobe (ADBE) To Release Their Earnings Shortly| FXMAG.COM We’ll get a look at Australian and business and consumer confidence indicators on Tuesday. NAB Business Confidence is expected to tick lower to 6, down from 7 prior. However, Business Conditions are forecast to improve to 27, up from 20 prior. The Westpac Consumer Sentiment index has posted nine straight declines, pointing to prolonged consumer pessimism about economic conditions. US inflation next The US releases a critical inflation report on Tuesday. August inflation is the last major release prior to the Fed meeting on September 21st and headline CPI is expected to drop for a second straight month, from 8.5% to 8.1%. Another drop in inflation will likely result in some headlines that inflation has peaked. Still, the Fed is committed to remaining aggressive and the markets have priced in a 75 basis point hike at around 90%. Lower gasoline prices may push headline CPI lower, but core CPI is expected to rise to 6.1%, up from 5.9%. AUD/USD Technical AUD/USD is testing support at 0.6737. Below, there is support at 0.6661 There is resistance at 0.6737 and 0.6846   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie rally continues, business confidence next - MarketPulseMarketPulse
Analysis Of The EUR/JPY Pair Movement

The Price of USD/JPY Pair Is Gearing Up To Overcome Resistance Level

InstaForex Analysis InstaForex Analysis 13.09.2022 08:07
By now, the second day of the yen's consolidation in the closing area on September 9th is expiring. The price is probably preparing to overcome the resistance at 144.25 in order to reach the high target at 147.05. During this consolidation, the Marlin Oscillator left the overbought zone and may continue to grow. To deepen the correction, the price needs to overcome the support at 141.10 - then the 139.20 target will be available. But even in this case, the decline will be considered as corrective. Overcoming 139.20, and with it the MACD line, will send the price into a medium-term downward movement. On a four-hour scale, the price is consolidating under the MACD line, at the Fibonacci level of 238.2%. If the price rises above this line (142.97), the price will once again attack the target level of 144.25, located between the reaction levels of 261.8-271.0%.   Relevance up to 04:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321485
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

What Level Can The British Pound To The US Dollar Pair Reach Today?

InstaForex Analysis InstaForex Analysis 13.09.2022 08:14
Yesterday, the pound rose by 93 points, the resistance level of 1.1648 was overcome. Now the price can work out the resistance of the MACD indicator line (1.1755). At the same moment, the signal line of the Marlin Oscillator may turn down after touching the border with the growth area. In this case, we expect a decrease below 1.1525. This is the main scenario. Price exit above resistance 1.1815 opens the 1.2005 target. There is a mini-consolidation of the price after breaking above the level of 1.1648 on the four-hour chart. Probably, this is preparation for working out 1.1755. In any case, whether this residual growth takes place or not, after consolidating under 1.1648, the target 1.1525 will open. The MACD line is approaching this level.         Relevance up to 04:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321487
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

The EUR/USD Price Is Currently Below The Breakout Level, Does It Mean A New Wave Of Decline?

InstaForex Analysis InstaForex Analysis 13.09.2022 08:17
The euro showed a strong growth on Monday - a rise in the moment by 154 points, closing the day by 80 points. The target level of 1.0150 was pierced, the closing of the day occurred under the level where the price is now. The signal line of the Marlin Oscillator is starting to turn down, perhaps this is the beginning of the price reversal into a new wave of medium-term decline, because the opening gap of the week is still not closed (the nearest target is 1.0020). Consolidating above 1.0150 will formally open the target of 1.0360, but this range is very tight, it was formed in the period from July 19 to August 17, so a downward reversal can happen without reaching the target of 1.0360. The price settled below 1.0150 on the four-hour chart, yesterday's exit above this level in this situation can be interpreted as false, until it settles above the level. The Marlin Oscillator is declining. According to the main scenario, we are waiting for the closing of yesterday's gap, the development of support at 1.0020. Consolidating below the level will open the target at 0.9950 (14 July low). Relevance up to 04:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321489
The Upside Of The EUR/USD Pair Remains Limited

Is Situation Of The Euro To The US Sollar favorable?

InstaForex Analysis InstaForex Analysis 13.09.2022 08:28
EUR/USD 5M The EUR/USD pair continued its upward movement for most of the day. Why did it start doing this the night before? At the beginning of the day, the euro already rose by 60 points in just five minutes. Therefore, in the morning it was clear that traders had tuned in for new long positions over the weekend. However, after testing the extreme level of 1.0195, a downward correction began, during which more than half of the success was lost. It should also be noted that Luis de Guindos and Isabelle Schnabel (members of the ECB Monetary Committee) did not report anything extra important on Monday. And there were simply no other important events during the day. Thus, the volatility equal to 150 points was shown almost out of the blue, which few people expected. However, this movement allowed the upward trend to be maintained. The price is now above the lines of the Ichimoku indicator, which allows it to continue rising for some time. Recall that this week there will be several important reports that can change the mood of the market dramatically. The euro is not yet strong enough to talk about a new long-term upward trend. There was a complete order with yesterday's trading signals. The very first buy signal allowed traders to earn at least 100 points, since the level of 1.0195 was worked out perfectly. Two sell signals were formed near the same level, which also had to be worked out. If the first one was closed by Stop Loss at breakeven, then the second one made it possible for us to earn another 50 points. A short position should have been closed when the price settled above the level of 1.0124 again. The same buy signal could also be worked out, but it did not bring any profit or loss. As a result, the total profit was 150 points. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 3,000, while the number of shorts decreased by 8,300. Accordingly, the net position grew by about 12,000 contracts. This is not very much, but it is still a weakening of the bearish mood among the major players. However, this fact is not of particular importance, since the mood still remains bearish, and the euro remains "at the bottom". At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 36,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new depreciation of this currency. Over the past six months or a year, the euro has not been able to show even a tangible correction. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 13. The euro is at a crossroads. Much will depend on inflation reports. Overview of the GBP/USD pair. September 13. Liz Truss is the best candidate available, but may prove to be a weak prime minister. Forecast and trading signals for GBP/USD on September 13. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair showed at least some kind of upward trend on the hourly timeframe, but it is ready to form. It seems to us that the growth was due to the results of last week's European Central Bank meeting, because there were no other reasons to buy the euro. We highlight the following levels for trading on Tuesday - 0.9877, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9977) and Kijun-sen (1 .0032). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The key and in fact the only event of the day on September 13 will be the US inflation report for August. It is on the basis of this report that the Federal Reserve can make a decision on monetary policy next week, so it is very important. And the reaction to it may be appropriate. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 02:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321477
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The GBP/USD Pair Continues Its Move From Monday

InstaForex Analysis InstaForex Analysis 13.09.2022 08:37
GBP/USD 5M The GBP/USD currency pair also continued its upward movement on Monday, and even managed without a correction in the afternoon. The European Central Bank meeting had nothing to do with the British pound, so we consider the reasons for the pound's growth to be purely technical. The descending trend line has been broken, so we now have an upward trend at our disposal, and the price has broken the important Senkou Span B, which allows the pound to continue moving upward. It is difficult to say how long this movement will last, as it may be another round of technical correction within the global downward trend. So the pound can still fall. There were important statistics for the British currency on Monday. At least reports on GDP and industrial production were published. Their values were such that it was impossible to consider the reports as optimistic. Therefore, the growth of the British currency is definitely not related to these statistics, which further convinces us that the reasons are technical. In regards to trading signals, the situation was worse. The first trading signal to buy was formed in the middle of the upward movement, and the level of 1.1649 and the Senkou Span B line should be considered as a solid area of resistance. Therefore, the first long position could be opened only after the Senkou Span B was overcome. After that, the pair bounced twice more from above this line, each time forming a buy signal. Consequently, traders could open three long positions, but the first two were closed by Stop Loss at breakeven (20 points each time the price went up). Only the third deal allowed traders to earn a couple of dozen points. COT report: The latest Commitment of Traders (COT) report on the British pound released yesterday, was very eloquent. During the week, the non-commercial group closed 5,700 long positions and opened 15,500 short positions. Thus, the net position of non-commercial traders immediately fell by 21,100, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains pronounced bearish, which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new fall, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its fall has resumed altogether, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 103,000 shorts and 52,000 longs open. The difference is twofold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the foundation and geopolitics. If they remain the same as they are now, then the pound may still be in a "downward peak" for some time. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 13. The euro is at a crossroads. Much will depend on inflation reports. Overview of the GBP/USD pair. September 13. Liz Truss is the best candidate available, but may prove to be a weak prime minister. Forecast and trading signals for EUR/USD on September 13. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair has completed the downward trend on the hourly timeframe and is ready to hit the growth for a while. Traders were not interested in the latest British reports and most likely they will also not be interested on Tuesday. The reasons for the growth of the euro and the pound may be purely technical. We highlight the following important levels on September 13: 1.1411-1.1442, 1.1649, 1.1874. The Senkou Span B (1.1669) and Kijun-sen (1.1559) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. Relatively important data on unemployment, wages and jobless claims will be published in the UK on Tuesday, but the market reaction may be the same as yesterday. That is, none. However, today there will be a report on US inflation and a speech by Bank of England Chairman Andrew Bailey, which will undoubtedly interest traders much more than morning reports. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.         Relevance up to 02:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321479
Gold Stocks Have Performed Very Well Under Pressure

How A Precious Yellowish Metal Can Move Today?

InstaForex Analysis InstaForex Analysis 13.09.2022 08:41
  Gold has done much to prove a corrective low is in place. We need a break above minor resistance at 1,746 to confirm gold has bottomed and a new impulsive rally is ready to unfold. The first target would be seen near 1,809, while the long-term target is seen at 2,400 and ideally closer to 2,700. However, for now, gold needs to prove itself and break above minor resistance at 1,746 as the first indication that a bottom is in place and a new impulsive rally is building.   Relevance up to 07:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292474
The Euro May Gradually Climb To The Target Level

Further Downward Trend In The EUR/USD Pair Is Expected

InstaForex Analysis InstaForex Analysis 13.09.2022 08:50
Technical Market Outlook: The EUR/USD pair has broken above the key short-term supply zone located between the levels of 1.0090 - 1.0122 and made a new local high at the level of 1.0198. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the longer term down trend is reversed. The intraday technical support is seen at 1.0122 and 1.0090. The strong and positive momentum on the H4 time frame chart supports the short-term bullish outlook for EUR. Please watch the USDX as the correlation between this two is directly opposite. Weekly Pivot Points: WR3 - 1.01483 WR2 - 1.01150 WR1 - 1.01017 Weekly Pivot - 1.00817 WS1 - 1.00684 WS2 - 1.00484 WS3 - 1.00151 Trading Outlook: Despte the recent relief rally towards the short-term support one, the EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated.   Relevance up to 08:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292486
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The Momentum Of The GBP/USD Pairis Strong And Positive

InstaForex Analysis InstaForex Analysis 13.09.2022 08:54
Technical Market Outlook: The GBP/USD pair has been seen continuing the bounce from the level of 1.1410 (7 years low) as the momentum is strong and positive on the H4 time frame chart. The recent local high was made at the level of 1.1723 (at the time of writing the article), so now the local zone located between the levels of 1.1598 - 1.1622 will act as the intraday technical support. The next target for bulls is seen at the level of 1.1717 and 1.1760. Those levels are just under the trend line resistance as well, so needs to be broken, because the larger time frame trend (daily and weekly) remains down until further notice. The levels of 1.1598 and 1.1622 will now act as the intraday technical support. Weekly Pivot Points: WR3 - 1.16716 WR2 - 1.16430 WR1 - 1.16286 Weekly Pivot - 1.16144 WS1 - 1.16000 WS2 - 1.15858 WS3 - 1.15572 Trading Outlook: The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame. The bears tested the level of 1.1410 (2020 swing low) and now the market is in the pull back mode. In order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th).   Relevance up to 08:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292490
In The Coming Days Will Be The Final Consolidation Of Bitcoin

NFT With Queen Elizabeth II Profile And Bitcoin Still In A Downtrend

InstaForex Analysis InstaForex Analysis 13.09.2022 08:57
Crypto Industry News: After the death of Queen Elizabeth II, not only did a lot of news appear in virtually all media. It took several dozen minutes to create the first memecoins and NFTs, which tried to earn on the event that attracted the attention of the world. Shortly after the official announcement of the queen's death, many new NFTs on a similar topic appeared on the OpenSea platform, and new cryptocurrencies hit the exchanges. Regarding the NFT, there are a lot of "stamps" featuring the queen's profile, photos and pixel art - also those with "laser" red eyes. In turn, decentralized exchanges flooded with memecoins with names such as Queen Elizabeth Inu, Save the Queen, QueenDoge, London Bridge is Down, or simply RIP Queen Elizabeth. For some, this type of activity will be distasteful, while for others it is a great way to earn money. Technical Market Outlook: The BTC/USD pair has been seen consolidating around the level of $22,400, close to the lower channel line. The last local high was made at $22,474, so the next target for bulls is seen at $23,513. The bulls are back inside the channel despite the extremely overbought market conditions on the H4 time frame chart. A pull back towards the technical support located at $20,580 is welcome and might occure ant time now. The main trend remains down and the next target for bears is located at $17,600. Weekly Pivot Points: WR3 - $23,418 WR2 - $22,624 WR1 - $22,146 Weekly Pivot - $21,821 WS1 - $21,352 WS2 - $21,035 WS3 - $20,241 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 08:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292496
Now you can view Bitcoin and Ethereum (ETH) prices on Twitter

Ethereum Is Down, The CBDC Infrastructure In Norway Is Based On Ethereum Technology

InstaForex Analysis InstaForex Analysis 13.09.2022 09:02
Crypto Industry News: Norway's Central Bank has reached a milestone in its digital currency effort by releasing open source code for the Central Bank's Digital Currency Sandbox (CBDC). The sandbox available on GitHub is designed to offer an interface for interacting with the test network, enabling functions such as knocking out, burning and transferring ERC-20 tokens, according to the official partner of Norges Bank at CBDC, Nahma. Nahmii emphasized that the current version of the code does not support the main Ethereum MetaMask wallet and is only available privately to users with appropriate credentials. In addition to implementing appropriate smart contracts and access controls, Norges Bank's sandbox includes custom frontend and network monitoring tools such as BlockScout and Grafana. Nahmii noticed that the interface also shows a filterable summary of transactions on the web. Norges Bank announced on Twitter that the prototype CBDC infrastructure in Norway is based on Ethereum technology. The central bank referred to Ethereum in a blog post on CBDC back in May. Norges Bank said the Ethereum cryptocurrency system is expected to provide a "core infrastructure" for issuing, distributing and destroying central bank digital money, also known as DSPs. Technical Market Outlook: The ETH/USD pair has been seen pulling back from the 100% Fibonacci projection located at $1,753. The rally had ended with a Pin Bar candlestick pattern on the H4 time frame chart, so a pull-back towards the technical support seen at the level of $1,685 was done. The momentum is coming off the extremely overbought conditions to the level of fifty, so the outlook remains bullish for ETH on the short-term time frames. The next target for bulls is located at the level of $1,819 and $1,825. Weekly Pivot Points: WR3 - $1,875 WR2 - $1,807 WR1 - $1,765 Weekly Pivot - $1,738 WS1 - $1,697 WS2 - $1,670 WS3 - $1,601 Trading Outlook: The Ethereum market has been seen making lower highs and lower low since the swing high was made in the middle of the August at the level of $2,029. If the down move will extend, then the next target for bears is located at the level of $1,358. The key technical support for bulls is seen at $1,281.9 Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade       Relevance up to 08:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292498
Reduction In Demand For Power In UK, Bank of Japan Plans To Maintain Current Policy

Reduction In Demand For Power In UK, Bank of Japan Plans To Maintain Current Policy

Saxo Bank Saxo Bank 13.09.2022 09:26
Summary:  Equity sentiment remained upbeat and the US dollar weakened further despite a surge higher in US Treasury yields. Globally sustained inflation pressures, such as those in Japan’s producer prices and New Zealand’s food prices, continues to raise concerns. US inflation print for August takes all the attention today with impact likely to reverberate through markets but unlikely to change the Fed’s upcoming rate hike at the September meeting. Precious metals tested key resistance levels and crude oil prices made a recovery as well. The lack of consensus on EU energy proposals may spark some concerns. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) extend their bear market bounce U.S. equities extended the bear market bounce for the fourth day amid a relatively uneventful and light volume day. The S&P 500 rose 1.1%, Nasdaq 100 up 1.2%. It comes despite bond yields rising, with the 30-year yield hitting a new high of 3.53%. Meanwhile the volatility index, the VIX rose for the first time in four days to 23.9, suggesting uncertainty could be brewing. Noteworthy moves in US stocks   Apple (AAPL:xnas) contributed to the days move, accounting for more than 60 points of the 151 points in Nasdaq 100, after the stock surged 3.9% on strong pre-order data of the new iPhone 14. A larger number of call options were traded on Apple shares on Monday. Twitter (TWTR:xnys) lost 1.7% after it sent a letter to Elon Musk and said the company intends to enforce Musk’s agreement to buy the company. Oracle (ORCL:xnys) reported sales growth of 18% to $11.4 billion, with higher contributions from cloud computing and the newly acquired Cerner, a health records provider. Adjusted EPS came in at $1.03, below the analyst consensus of $1.06 as per the Bloomberg survey. Oracle shares gained 1.3% in after-hours trading. Gilead Sciences (GILD:xnas) surged 4.2% following the settlement of an HIV drug intellectual property dispute. Bristol-Myers Squibb (BMY:xnys) gained 3.2% as regulators approved the company’s psoriasis drug.  US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) The treasury yield curve bear steepened on Monday, with the 30-year yield finishing the day at 3.51%, a new high just a little above the previous high print in June. The long-end, yields of the 10-years through 30-years jumped 5 to 6 bps after the poor 3-year notes and 10-year notes auctions, in particular the latter. The 10-year auction stopped at a yield of 3.33%, which was 2.7 bps higher than the notes were trading at 1:00 pm New York time when the results were announced. The 10-year notes weakened to finish the day at 3.36%. In addition to the USD41 billion 3-year and USD32 billion 10-year auctions, eight corporate new issues with a total size of about USD12 billion came to the market yesterday. The decline in the inflation expectations print in the New York Fed’s survey of consumer expectations did not move the treasury markets which had the day’s focus on supply. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong and China markets were closed on Monday for a public holiday.  Overnight in U.S. trading, the Nasdaq Golden Dragon China Index bounced by 2.8%.  Chinese EV maker, NIO (NIO:xnys) soared 13.7% following Deutsche Bank and BoA Merrill Lynch analysts reiterating “buy” rating as well as reiterating and raising price targets respectively.  EURUSD recovery extended, but risks ahead EURUSD tested highs of 1.02 on Monday amid some optimism on Ukraine’s military advances and Bundesbank President Joachim Nagel signaling support for further interest-rate hikes in Europe. Gains however cooled later with ECB's Scicluna suggesting the central bank will continue with rate hikes but they are unlikely to be as large as the 75bps hike seen last week. Meanwhile, EUR/GBP printed a fresh YTD high of 0.8722 before unwinding the gains later. Pressure could build on EUR as the EU energy proposals will likely face some opposition, and US CPI data today will also be on watch. Russia may also increase the energy pressure on Europe if Ukraine’s advances stick. Crude oil prices (CLU2 & LCOV2) Crude oil prices saw some recovery on Monday amid a softer USD as well as weaker US inflation expectations from the NY Fed offset some of the weaker dollar concerns. Iran nuclear deal also seems to be making little progress, delaying any possible relief on the supply side. WTI futures rose to $88/barrel while the Brent futures were up at $94/barrel. US CPI data due later today is key to further gauge the path of Fed’s rate hikes from here, and the EU energy proposals will also be a key catalyst. Gold (XAUUSD) and Silver (XAGUSD) Gold rose on Monday as the dollar extended its retreat from a record high ahead of US inflation data due later today, which could potentially slow down the pace of Fed’s rate hikes if the headline print is softer than expected. Gold tested $1734, the 21-day SMA and 38.2% retracement of the August slump, but was rejected and back below $1730 in early Asian trading. Silver also rallied sharply to touch the $20-mark supported by a weaker dollar, higher gold prices and signs of tightness supporting the copper market. Last Tuesday speculators held the largest short position in three years and the continued rally is now forcing broad short covering.   What to consider? US CPI print will point to higher and stickier price pressures With the labor market remaining strong in the U.S. over the last few months, the focus has remained on the inflation data to predict the path of the Fed’s rate hikes. Clearly, all of the Fed’s members have had a unified hawkish stance since the Jackson Hole conference, and many have clearly hinted at a 75bps rate hike for September. Tuesday’s US CPI report is the one to watch, as it can move the market pricing of the Fed’s rate path and is the last key data point scheduled to release ahead of the September 21 Fed meeting. After some softening in July, it can be expected that the headline print may ease further in August as well given the decline in gasoline prices. Still, the inflation print is likely to stay elevated due to the stickier shelter and services costs, as well as still-high energy and food prices. Consensus estimates point to a mild decline of 0.1% MoM while the core remains strong at 0.3% MoM. EU proposes mandatory cuts to power use and profit levies It is expected that the EU draft energy plan will include mandatory power demand cut, an “exception and temporary” levy on oil, gas, coal and refining companies, as well as revenue caps for non-gas fuelled power generators. There is likely to be opposition from some of the member states, as the plan is detailed out tomorrow. Here is another sign inflation is not peaking; New Zealand food inflation hits a 13-year high New Zealand food prices rose 8.3% over the year to August 2022, which is the biggest annual increase since July 2009, according to data from Statistics New Zealand. The surge was mainly driven by a 8.7% increase in grocery food prices compared to a year ago, after fruit and vegetable prices rose 15%. Prices for staples like, eggs, yogurt, and cheddar cheese saw the largest moves in grocery prices. Companies to look at that sell food and dairy products to supermarkets include Costa Group (CGC), as well as A2 Milk (A2M) and Bega Cheese (BGA) and Synlait Milk (SM1). The New Zealand dollar rose to a two-week high against the USD, on expectation the Reserve Bank of New Zealand (RBNZ) will need to keep hiking rates. Japan producer prices remain above expectations Japan’s August PPI was up 9.0% y/y (vs. 8.9% y/y expected) while last month’s was also revised higher to 9.0% y/y from 8.6% y/y previously. The m/m print was slightly softer at 0.2% vs. 0.4% expected, but continued to show rising cost pressures amid the surge in commodity prices and a weaker yen. This suggests more CPI pain is in the pipeline, and the resolve of Bank of Japan to maintain accommodative policy will continue to be tested. New York Fed 1-year consumer inflation expectations at 10-month lows The latest NY Fed consumer inflation expectation gauges declined sharply, suggesting easing price pressures. Expectations for US inflation three-years ahead fell to two-year lows to come in at 2.8% in August, while the one-year ahead gauge was at 5.7%, a 10-month low. Meanwhile, inflation expectations on a five-year horizon fell to 2% from 2.3% previously, suggesting that inflation expectations remain anchored. Gloomy economic outlook for the United Kingdom According to the Office of National Statistics, UK GDP grew only 0.2% month-over-month in July. This is less than expected (0.4 % month-over-month). The weakness is mostly centered on the industry and the construction sector. This is worrying. There is no big bank holiday effect. However, there is anecdotal evidence of a reduction in demand for power because of cost, but it was also a hot month. In addition, the UK July industrial production fell 0.3% month-over-month versus expected +0.3%. Expect negative print in the eurozone for the same period too. California’s electricity infrastructure is under severe tension According to data released over the weekend by California Independent System Operator, demand on California’s power grid hit an all-time high on 6 September above 50,000 MW. The last two times it was close to this threshold was in 2007 and in 2017. The situation is getting worse and worse. Oracle reported sales in line with expectations but missed EPS estimates Oracle (ORCL:xnys) reported sales growth of 18% to $11.4 billion, in line with expectations. The sales growth was largely attributable to contributions from cloud computing and the newly acquired Cerner, a health records provider. Adjusted income came in at USD1.68 billion, a 33% drop from last year quarter and missing analyst estimates.  Adjusted EPS was $1.03, below the analyst consensus of $1.06 as per the Bloomberg survey. The earnings miss was partly due to FX losses which were results of a stronger dollar. Banking job cuts? Goldman Sachs is getting ready for jobs cuts. Who’s next? Goldman to report a 40% drop in earnings, which will foreshadow job cuts. However, there could be a lot of stake; in July Goldman said it planned to slow hiring and reinstate performance reviews. There is a huge question looming about how banks will get work with global deal volumes having dropped by about $1 trillion from a year ago. Investment banks are reliant on equity capital markets and IPOs and our sense is that more job cuts could be coming with inflation set to continue to rise, and push up the yield curve, and official interest rates into next year. For investors the takeaway here is that while markets remain uncertainty and rates are rising, investment banks will likely continue to face pressure. Banking ETFs, such as Vanguard Financials ETF (VFH) and Financial Select Sector SPDR ETF (XLF) are both down about 13% from their October 2021 peaks. Although they are both rallying amid the bear market bounce lately, we think the sector is likely to pair back again once stronger US data comes out and Fed suggests more rate hikes are coming.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-13-sept-2022-13092022
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

Do The Bears Still Have A Chance Of Lowering The GBP/USD Pair?

InstaForex Analysis InstaForex Analysis 13.09.2022 09:45
Several market entry signals were formed yesterday, but not all of them were profitable. Let's take a look at the 5-minute chart and see what happened. In my morning forecast and advised making decisions on entering the market from it. As a result of the breakthrough at 1.1642, which, to my regret, was left without a reverse downward test, the pound continued to rise and reached the next resistance at 1.1690. Forming a false breakout there resulted in an excellent short entry point, which brought about 25 points of profit on the first move. No matter how the bulls tried to get above this range in the afternoon, nothing worked. Several similar false breakouts at 1.1690 made it possible to get good entry points for selling, but it never came to a particularly large sell-off, everything was limited to movements of 20-25 points. COT report: Before analyzing the technical picture of the pound, let's look at what happened in the futures market. An increase in short positions and a decrease in long ones were recorded in the Commitment of Traders (COT) report for September 6. This once again confirms the fact that the British pound is in a major downward peak, from which it is not as easy to get out as it might seem. Last week, Bank of England Governor Andrew Bailey made a speech, who did his best to inspire confidence that the central bank will continue to follow the path of defeating inflation and continue to aggressively raise interest rates. This suggests that at its next meeting the committee will probably raise rates by 0.75% at once, following the example of other central banks. However, the UK economy is getting worse and worse, and GDP is shrinking quite quickly, as evidenced by recent reports, which does not give confidence to investors. With high inflation and a looming cost-of-living crisis in the UK, it will be quite difficult for bulls to get room to take long positions as nothing good is in store for the stats ahead. The latest COT report indicated that long non-commercial positions decreased by 5,746 to 52,731, while short non-commercial positions rose by 15,516 to 103,163, which led to an increase in the negative value of the non-commercial net position to -50,423 versus -29 170. The weekly closing price collapsed from 1.1526 against 1.1661. When to go long on GBP/USD: Quite important statistics for the UK will be released today, but like all the others released last week, it can be completely ignored even if the numbers are weak. I advise you to pay attention to reports on the UK unemployment rate, changes in the level of average earnings, as well as changes in the number of applications for unemployment benefits. Of these three measures, earnings will be important, as households continue to lose money when adjusted for inflation and clearly disagree with government policies. Fortunately, there is hope that the new prime minister will put things in order. In case GBP/USD falls in the first half of the day after the reaction to the negative data on the UK, which is quite likely, the best scenario for buying will be a false breakout in the area of the nearest support of 1.1666, formed at the end of yesterday and where the moving averages are, playing on the bulls' side. This will lead to a rebound upwards and a breakthrough to the area of 1.1706, above which it was not possible to break through yesterday. We can only talk about building a further upward correction for the pair after getting above this range. A breakdown of 1.1706, as well as a reverse downward test will open the way to 1.1757. A more distant target will be the area of 1.1793, where I recommend taking profits. If the GBP/USD falls and there are no bulls at 1.1666, and everything goes towards this, the pressure on the pound will increase again. This will force the bulls to leave the market again, as the risk of a return to the bearish trend will become more real. If this happens, I recommend postponing long positions to 1.1631. I advise you to buy there only on a false breakout. You can open long positions on GBP/USD immediately on a rebound from 1.1588, or in the low area of 1.1551, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Protecting the nearest resistance at 1.1706 before the release of statistics on inflation in the US is almost the most important task for today. Whether the weak fundamental reports on the UK will help in this or not is a big question. In case the pair rises, forming a false breakout at 1.1706 will return pressure on the pound and create a sell signal in order to develop a bearish trend and decline to the nearest support at 1.1666, which will not pose as a big threat to bulls. A breakthrough and reverse test from below 1.1666 will provide an entry point for selling with a fall to 1.1631, but a much more interesting target will be the area of 1.1588, where I recommend taking profits. An update in this area can seriously harm the bulls' future plans to build an upward trend. But such a movement will occur only with the next inflationary surge in the United States. In case GBP/USD grows and the bears are not active at 1.1706, then the bulls will be in control of the situation, who will have an excellent chance of returning to 1.1757. Only a false breakout around 1.1757 creates an entry point into short positions, counting on a new downward movement of the pair. If there is no activity there, there may be a surge up to the high of 1.1793. There, I advise you to sell GBP/USD immediately for a rebound, based on a rebound of the pair down by 30-35 points within the day. Indicator signals: Trading is carried out above 30 and 50 moving averages, which leaves a chance for bears to further pull down the pair. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands A breakthrough of the lower border of the indicator in the area of 1.1666 will increase pressure on the pair. Surpassing the upper border of the indicator in the area of 1.1706 will lead to a new wave of growth of the pound. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 08:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321503
USD/JPY - Why Did Japanese Yen Gain? Euro (EUR) And US30 Go Up

USD/JPY - Why Did Japanese Yen Gain? Euro (EUR) And US30 Go Up

Jing Ren Jing Ren 13.09.2022 08:22
USDJPY consolidates gains The Japanese yen bounced after the government hinted at intervention to support its currency. The dollar gained momentum after it cleared the previous top at 139.30. However, it soon came under pressure at the psychological level of 145.00 and may take a breather. After the RSI soared into overbought territory, a drop below 143.00 led to a round of profit-taking with 141.50 as an intermediate support. Further down, 139.10 is a major level from a bullish breakout and sits on the 20-day moving average, making it an area of interest. EURGBP attempts to break out The euro strengthens as the ECB would reportedly accelerate its rate hikes to bring down inflation. The pair is at a crossroads under June’s high at 0.8720. A combination of profit-taking and fresh selling could weigh on the price action after a fall below 0.8660. The area between 0.8620 and 0.8570 next to the 20-day moving average is a major level to test the bulls’ resolve. A series of higher lows indicates a build-up in buying pressure and a breakout could let off steam and trigger a full-fledged rally towards 0.8900. US 30 grinds towards key resistance The Dow Jones 30 rallies ahead of a new set of US inflation data. The current recovery has gained traction once above 32000, sending the index towards the key supply zone around 33300 at the origin of a sharp sell-off back in late August. Strong selling pressure could be expected from trend followers as the market mood remains fragile. The RSI’s repeated overbought condition may limit the upside range in the resistance area. 32150 is the closest support and a bullish breakout would lift offers to the previous peak at 34300.
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

What Kind Of Opportunities Can Traders Get From The USD/JPY Pair?

InstaForex Analysis InstaForex Analysis 13.09.2022 09:51
Technical analysis: USD/JPY has been trading sideways today at the price of 142.40 but I see potential for further upside continuatin of the trend. Trading recommendation: USD/JPY Is still in the strong upside cycle and it is true momentum leader. I still see potential for bigger upside continuation towards upper references. Watch for the buying opportunities on the intraday dips with the upside objectives at 145.00 and 147.00. Stochatic oscillator is showing fresh upside cross from the oversold zone, which can be good sign for the further upside continuation. Key support is set at the price of 141.50     Relevance up to 09:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292508
The White Metal (Silver) Is Manifesting A Lackluster Performance

The Silver Is Higher, Will The Silver Break Above Resistance Level?

InstaForex Analysis InstaForex Analysis 13.09.2022 08:45
Silver accelerated higher from the 17.56 corrective low. All we need is a break above minor resistance at 20.87 to confirm that silver finally has seen its corrective low and a new impulsive rally is building towards the strong resistance near 30.00. Ultimately, we expect this resistance to be broken too for a continuation higher towards the all-time high at 50.00.   Relevance up to 07:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292476
The Outlook Of Gold By FXSTreet’s Dhwani Mehta

The Gold Is Downward Trend, Showing Bearish Pressure

InstaForex Analysis InstaForex Analysis 13.09.2022 09:59
Technical analysis: Gold has been trading sideways today at the price of $1.722 but I see potential for further downside movement due to the rising wedge pattern. Trading recommendation: Due to the rising wedge pattern in creation and the short-term downside trend, I see potential for the downside movement. Watch for the selling opportunities in case of the downside breakout of the rising wedge pattern. Stochatic oscillator is showing fresh bear cross, which can be good sign for the further downside movement. Key resistance is set at the price of $1.733   Relevance up to 09:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292510
Bitcoin Has Strong Sign That Buyers Are In Control

Bitcoin Is Slowing Down Movement To Upward

InstaForex Analysis InstaForex Analysis 13.09.2022 10:04
Technical analysis: BTC has been trading sideways today at the price of $22.400 but I see potential for further downside movement due to the channeling mode and slowdown in tempo. Trading recommendation: Due to the slowdown in the upside movement and chnaneling mode, I see potential for further downside movement. Watch for the selling opportunities in case of the downside breakout of the channel. Stochatic oscillator is showing fresh bear cross and bear divergence, which can be good sign for the further downside movement. Key resistance is set at the price of $22.600   Relevance up to 09:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292514
BSP Maintains Rates Amid Moderate Inflation; Eyes Further Tightening if Needed

Forex: The Headline-Topping US Dollar's (USD) Downtrend May Be Tricky!

ING Economics ING Economics 13.09.2022 10:09
The dollar correction may extend a little further today as slowing US CPI could help risk sentiment further. However, Fed rate expectations should not be affected, and optimism about the Ukraine conflict and lower gas prices may be misplaced or too premature, so the dollar may stabilise or recover later in the week USD: Another leg lower with US CPI slowing? An extension of supported risk assets kept the dollar under pressure at the start of this week. In particular, European sentiment appears to be rebounding quite sharply, largely on the back of falling gas prices and some market optimism around developments in the Russia-Ukraine conflict. All this has likely prompted some position-squaring effect on the overbought dollar which has widened the scope of the dollar drop. The question is whether this correction is sustainable and the dollar did indeed peak last week. In our view, the narratives behind the recent FX moves are not solid enough for the strong bearish call on the dollar just yet. First, because the drop in gas prices may actually be related to mandated lower usage levels, which would actually be rather bad news for the eurozone’s economy given the centrality of the manufacturing sector. Second, the market’s optimism around a ceasefire based on Ukraine’s recent counteroffensive may be premature. Third, the dollar can still count on a strong domestic story, both on the growth side and on the monetary policy side, as markets have now cemented their expectations for a 75bp Fed hike in September and a 4.00% Fed Funds rate in early 2023. Today’s US CPI figures for August are, however, a risk event for the dollar. The consensus is centred around a deceleration in headline inflation from 8.5% to 8.1%, largely due to lower gasoline prices. Core inflation may instead accelerate above the 6.0% mark from 5.9% in July. All in all, and given the recent hawkish messages by Fed Chair Jerome Powell, it appears unlikely that – barring significantly below-consensus reads – expectations around Fed tightening will be heavily affected by today’s CPI report. That said, there is surely a possibility that a risk-on environment may be bolstered further by evidence of US inflation having peaked, and another leg lower in the dollar may be triggered by another good session for global equities. As discussed above, it is too early in our view to see a more structural dollar downtrend, and we see a higher probability of stabilisation or small recovery in the greenback in the second half of the week. Francesco Pesole EUR: Equity differential on the driver's seat Last week, we highlighted the growing relevance of relative equity performance (as a gauge of diverging growth paths) in driving EUR/USD short-term fair value. Indeed, the market’s growing optimism on Europe is fuelling a rebound in European equities, and the euro’s parallel recovery is keeping that FX-stocks correlation very well alive. We mentioned above how markets may have turned optimistic too early on the gas and Ukraine themes, but the euro may also have been helped by some hawkish comments from ECB officials. It’s important to note that monetary policy is not playing a primary role in driving short-term EUR/USD moves, and that parallel hawkish repricing in Fed expectations means that the EUR-USD 2-year swap spread is close to its post-ECB meeting level. The current swap rate differential does surely point at a stronger EUR/USD, but in order for the pair to reconnect with that differential under current market conditions, we’ll likely need a period of stabilisation in European sentiment, something we are seeing now but may prove hardly sustainable in the coming weeks. Today, some focus will be on the ZEW survey out of Germany, while there are no scheduled ECB speakers. Another potential good day for risk assets if US CPI moves lower may keep EUR/USD bid for now: a break above 1.0200 is possible at this stage, but a return to the 1.0000 level parity remains our base-case scenario into year-end for EUR/USD. Elsewhere in Europe, Sweden’s general election results haven’t been called yet, and an official final count may only be announced tomorrow. However, it looks like a right-wing/far-right coalition is on track to secure a majority by a razor-thin margin. SEK is the best-performing currency since Friday, but that is in line with its high beta to European risk sentiment rather than a reaction to election results. Francesco Pesole GBP: Jobs market remains tight Jobs data released this morning were largely in line with consensus expectations and confirmed the UK jobs market has remained quite tight. Most crucially for the Bank of England, evidence that wage growth has continued to accelerate may suggest more aggressive tightening. GBP is trading slightly higher after this morning’s release but should have a larger reaction after tomorrow’s CPI data. Today, Cable should still be moved by external drivers and may remain supported, while EUR/GBP may stay in the upper half of the 0.86-0.87 range. Francesco Pesole CEE: FX switched the pipe from rates to gas Current account data for Poland, the Czech Republic and Romania will be published today. We do not expect any changes in the current trend of negative balances across the region. But we don't think it will do anything to the stronger FX in CEE, which is already fully disconnected from the markets and follows only gas prices. Yesterday's rates sell-off sent interest rate differentials to new lows, in Poland since March this year, in the Czech Republic since December last year and in Hungary since mid-August. However, the market seems unconcerned by this move, and further declines in gas prices indicate further gains for CEE FX. We currently see the biggest gap in this relationship for the Czech koruna, which could continue its yesterday rally below 24.50 EUR/CZK and the Polish zloty closer to EUR/PLN 4.680. On the other hand, we see the Hungarian Forint fairly priced at the moment and awaiting news from the negotiations with the European Commission. Frantisek Taborsky Read this article on THINK TagsFX Daily FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Can Prices Of The EUR/USD And The GBP/USD Pairs Stay Steady?

InstaForex Analysis InstaForex Analysis 13.09.2022 10:10
The only thing investors are worried about right now is the extent of the European Central Bank and Federal Reserve's rate hikes. That was the reason for the noticeable growth of the euro, which, due to its scale, pulled up other currencies as well—firstly, the pound. The reason for this was the words of ECB Vice President Luis de Guindos, who almost directly stated that the refinancing rate will be raised again by 75 basis points at the next board meeting. The reason for such aggressive actions of the European Central Bank is the growing inflation. Most likely, the dollar will continue to lose its positions today. The reason for this will be inflation. According to forecasts, US inflation should slow down from 8.5% to 8.1%. That is, inflation is slowing down for the second month in a row, which gives the Fed a reason to reduce the rate of interest rate growth. So there may be a situation where interest rates are rising quite strongly in Europe but much slower in the United States, if the American regulator does not stop this process at all. Just a few months ago, the situation was diametrically opposite, and it was the Fed that was actively raising the rate, and the ECB was only considering the possibility of tightening monetary policy. And this led to a serious rise in the dollar. Now it is quite possible to talk about a U-turn. Inflation (United States): The EURUSD currency pair locally jumped to 1.0200 during an intense upward movement. This move resulted in overheating of long positions in the short term, resulting in a technical pullback in the market. A stable holding of the price above 1.0150 allows the subsequent growth of the euro with a breakout of 1.0200. The GBPUSD currency pair has a similar dynamics, where the quote has firmly fixed above the level of 1.1650. With the upward mood on the market, a subsequent increase in the value of the pound sterling in the direction of 1.1800 is not excluded, where stagnation/pullback is already possible.   Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321509
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

The EUR/USD Pair: Trend Analysis And Review Of Investment Scenarios

InstaForex Analysis InstaForex Analysis 13.09.2022 10:20
Trend analysis (Fig. 1). The euro-dollar pair may move upward from the level of 1.0121 (close of yesterday's daily candle) to 1.0175, the 61.8% retracement level (white dotted line). Upon reaching this level, continued upward movement is possible with the target of 1.0197, the upper fractal (daily candle from 09/12/2022). When testing this level, the price may move downward to 1.0160, the 76.4% retracement level (blue dotted line). From this level, the price may move up. Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today the price may move upward from the level of 1.0121 (close of yesterday's daily candle) to 1.0175, the 61.8% retracement level (white dotted line). Upon reaching this level, continued upward movement is possible with the target of 1.0197, the upper fractal (daily candle from 09/12/2022). When testing this level, the price may move downward to 1.0160, the 76.4% retracement level (blue dotted line). From this level, the price may move up. Alternative scenario: from the level of 1.0121 (close of yesterday's daily candle), the price may move upward to the resistance level of 1.0146 (thick red line). When testing this level, a downward movement is possible to 1.0096, the 100.0% retracement level (blue dotted line). When testing this level, the price may move up.     Relevance up to 08:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321507
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

Could Today's The UK Reports Return The Demand For The Pound?

InstaForex Analysis InstaForex Analysis 13.09.2022 10:24
Analysis of transactions in the GBP / USD pair Pound tested 1.1685 at a time when the MACD line was far from zero, which limited the upside potential of the pair. Sometime later, it tested the level again, but this time the MACD line was moving down, which was a good signal to sell. This resulted to a price decrease, albeit by just 15-20 pips. Important reports on the UK labor amrket will be released today, which may lead to a surge in volatility. For example, better-than-expected unemployment rate and average earnings will return demand for pound, which will lead to a new upward spurt and new highs. If the reports are disappointing, sellers may seize the moment and return to the market before the publication of important US data. That being said, CPI in the US will come out in the afternoon, which, if shows a slowdown and a decrease, will return risk appetite and lead to another rise of GBP/USD to monthly highs. For long positions: Buy pound when the quote reaches 1.1728 (green line on the chart) and take profit at the price of 1.1796 (thicker green line on the chart). Growth will occur if statistics in the UK exceed expectations. Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1682, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1728 and 1.1796. For short positions: Sell pound when the quote reaches 1.1682 (red line on the chart) and take profit at the price of 1.1603. Pressure will return if US inflation surges again. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1728, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1682 and 1.1603. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.       Relevance up to 08:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321515
Inflation Outlook: Energy Prices Drive Hospitality, Food Inflation Eases

The GBP/USD Pair: Expected Next Upward Movement Of The Price

InstaForex Analysis InstaForex Analysis 13.09.2022 10:36
Trend analysis (Fig. 1). The pound-dollar pair may move upward from the level of 1.1678 (close of yesterday's daily candle) to 1.1743, the 38.2% retracement level (blue dotted line). When testing this level, continued upward movement is possible to 1.1848, the 50.0% retracement level (blue dotted line). From this level, the price may move down. Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Bollinger bands – down; Weekly chart – up. General conclusion: Today the price may move upward from 1.1678 (close of yesterday's daily candle) to 1.1743, the 38.2% retracement level (blue dotted line). When testing this level, continued upward movement is possible to 1.1848, the 50.0% retracement level (blue dotted line). From this level, the price may move down. Alternative scenario: from the level of 1.1678 (close of yesterday's daily candle), the price may move upward to 1.1743, the 38.2% retracement level (blue dotted line). When testing this level, a downward movement is possible to the historical support level of 1.1643 (blue dotted line). Upon reaching this level, the price may resume upward work to 1.1848, the 50.0% retracement level (blue dotted line).     Relevance up to 09:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321523
Forex: What to expect from British pound against US dollar - January 17th

UK Job Market Means More To Bank Of England (BoE) Than You May Think

ING Economics ING Economics 13.09.2022 11:24
The number of workers classified as long-term sick has jumped dramatically in the past couple of months, and that's one reason why firms are still struggling to source the staff they need. While worker demand has cooled, Bank of England hawks will be worried that these shortages will continue to push up wage growth   At a headline level, the latest UK jobs numbers don’t look too bad. Unemployment fell by two-tenths of a per cent to 3.6%, the lowest level since 1974. But this is driven not by an increase in the number of people in employment, but primarily by another dramatic rise in those classified as inactive – that is neither in work nor actively seeking it. Alarmingly, the number of people classifying as not working due to long-term sickness is up by almost 400,000 since late 2019, and almost 150,000 in the last two months' worth of data alone. It’s hard to escape the conclusion that this is linked to the pressures in the NHS (National Health Service). The Bank of England will view all of this through the lens of the worker shortages that have plagued the jobs market for the past year or so. While some causes of that shortage appear to be abating – e.g. inward migration of non-EU workers has increased noticeably this year – other factors are, if anything, getting worse. A look at the survey evidence suggests firms are finding it no easier to find staff than they were a few months ago either. Both the BoE’s Agent’s survey and the ONS’ bi-weekly business survey have shown no improvement in the number of firms saying they are struggling to source workers. UK jobs market dashboard Worker shortages is taken from a question in the ONS bi-weekly business survey Source: Macrobond, ONS, ING   At the same time, demand for employees does appear to be cooling, though not necessarily very quickly. The level of job vacancies has fallen from its high, but the number of redundancies is low and stable (even if the level increased slightly in this latest data). The question now is whether the pressure from energy prices will force companies to revisit these plans and make more material changes to their workforce. We would expect a more visible impact on the jobs market over the next few months, but the government’s newly-announced pledge to cap corporate energy bills as well as households’ should help avoid a sharp rise in unemployment this winter. Persistent worker supply constraints coupled with so far only modest signs of reduced hiring demand will provide further ammunition for Bank of England hawks to push ahead with further tightening. We expect a 50 basis-point rate hike next week, and another in November. While markets may be overestimating how far the Bank will take interest rates over the coming months, we think the BoE is less likely to be cutting rates early into 2023 than some other global central banks. Read this article on THINK TagsUK jobs Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The USD/JPY Price Seems To Be Optimistic

The Downward Trend Of The Yen Will Continue

InstaForex Analysis InstaForex Analysis 13.09.2022 12:16
The Japanese yen has been trying to strengthen against the greenback for the second day in a row, but the latter is holding firm. Whose one will take in the end? According to experts, the JPY will win the current battle, but the USD will win the war. Yen getting ready for a jump Yesterday, the US dollar continued its corrective pullback from the 20-year high reached last week. This served as a strong headwind for the USD/JPY pair. At the beginning of Monday, the asset showed a steady growth, but could not stay above the level of 143 and ended the day lower. Pressure on the greenback came from expectations of the release of statistics on inflation in the US last month. The report will be published today. Economists predict another weakening of inflationary pressure in annual terms. According to them, the consumer price index will drop to 8.1% in August, after falling to 8.5% in July. Traders fear that a sustained weakening of inflation will change the Federal Reserve's rhetoric on interest rates. Recall that the US central bank is preparing to announce a rate hike at its September meeting, which will be held on September 20-21. Markets are currently evaluating an 85% likelihood of a 75 bps increase. However, a strong fall in inflation could significantly dampen hawkish expectations. Against this background, the dollar is in danger of plunging, especially when paired with the yen. Now the USD/JPY bears are just waiting for the moment when there is even the slightest hint of a slowdown in the growth of the gap in US and Japanese interest rates. Nevertheless, analysts warn that the rise in the yen will be short-lived. After the release of statistics on inflation in the US, the yen can only get a short-term growth momentum. In the future, the JPY will continue to fall against the US dollar. And there are two good reasons for this. Reason #1: One-sided intervention will not work After the yen plunged sharply against the dollar last week and nearly touched a critical 145, the Japanese government sharply tightened its intervention warning. Several high-ranking officials immediately stated emphatically that the action plan to support the yen is already on the table. Market confidence that the Japanese authorities may soon move from words to deeds, has grown after Friday's meeting between Bank of Japan Governor Haruhiko Kuroda and Prime Minister Fumio Kishida. Both expressed great concern about the rapid fall of the national currency. Officials' comments helped the yen to stabilize slightly, but it is still well above the levels at which Japan has previously interfered in the market. Analysts believe that now the red line for the Japanese authorities is the level of 145. As soon as the yen tests this mark, the intervention will not be long in coming. Some experts have no doubt that Japan will take this step, since the country now has much larger foreign exchange reserves than in 1998, when it last intervened to support its currency. At the end of August, Japan's foreign exchange reserves amounted to $1.17 trillion. In the spring of 1998, Japanese authorities spent about $21 billion propping up the yen on their own, equivalent to about 10% of the country's foreign exchange reserves at the time. However, there is also an opposite opinion. Thus, Bloomberg analysts believe that the Japanese government will not risk launching a unilateral intervention, given its previous bad experience. In 1998, only US support was able to turn the tide of the currency attack on the yen. Moreover, the actual participation of America was not even required. The Japanese currency began to rise on the news that the then US Treasury Secretary Robert Rubin was going to meet with Japanese Treasury Secretary Kiichi Miyazawa. As for today, America's help looks unlikely. Last week, the US Treasury confirmed its unwillingness to support any potential intervention in the foreign exchange markets. This position is not favorable for the yen. Reason #2: The Bank of Japan will continue to be dovish It is possible to argue about whether or not the Japanese government will decide on foreign exchange intervention for a long time. The only thing that most experts now agree on is its ineffectiveness at this stage, when the divergence in the monetary policy of the Fed and the BOJ continues to grow. According to the chief economist at S&P Global Market Intelligence Harumi Taguchi, the key reason for the yen's weakness is the continued increase in rates in America, while the BOJ keeps the indicator at an extremely low level. "If the position of the Japanese central bank on interest rates does not change, I see absolutely no point in intervention, even if it is supported by the United States," the analyst said. Of course, Kuroda cannot but be concerned about the yen's current position. Recently, he often talks about the need to take measures to support the currency, but every time he makes an amendment: the central bank does not intend to change its dovish guidelines. The market is also well aware that the BOJ now has no reason to cancel monetary stimulus and raise interest rates. The country's economy has not yet recovered from the COVID-19 pandemic, and inflation is not as high and sustainable as in other countries. That is why many experts are inclined to believe that at its next meeting, which will be held on the same dates as the Fed meeting, the Bank of Japan will once again confirm its commitment to ultra-soft monetary policy. Based on this, we can safely say that the downward trend in the yen will continue.   Relevance up to 10:00 2022-09-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/321548
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

The EUR/USD Pair Has A Chances For A Further Recovery

InstaForex Analysis InstaForex Analysis 13.09.2022 12:23
Euro is likely to rise as risk appetite will surge if inflationary pressure in the US eases. The lower figure will also affect the Federal Reserve, weakening its grip on rate increases. Recently, US Treasury Secretary Janet Yellen expressed optimism for a slowdown in inflation, but warned that uncertainty remains. The core CPI for August is expected to show growth, while the overall index is likely to slow to 8.1%. Inflation has been a major concern for the Biden administration as high gas and food prices earlier in the year have seriously undermined the president's popularity and the Democrats' prospects for maintaining control of Congress. Also, in response to high price increases, the Federal Reserve has been raising interest rates rapidly. They hope that such a move will curb further price hike as quickly as possible, so there were several increases of 75 basis points at once at the past meetings, and the same is expected in September. But even if inflation slows in August, the Fed is unlikely to step back from its mandate as the central bank intends to do whatever it takes to bring inflation under control. Talking about EUR/USD, there are chances for a further recovery, but only in the event that inflation eases in the US. If the opposite happens, euro will decline, and buyers will have to cling to 1.0100 in order to bring back the possibility of a rally. The nearest target will be resistance level of 1.0150, the breakdown of which will open a direct path to 1.0190 and 1.0240. The farthest target will be the level of 1.0270. In case of a further decrease and breakdown of 1.0100, sellers will become more active in the market, which could push the quote to 1.0030 and 1.0000 In terms of GBP/USD, a lot depends on the 17th figure as its breakdown creates a pretty good chance for a larger upward correction. That will open a direct route to the highs at 1.1750 and 1.1790. The farthest target will be 1.1840. But if pressure on the pair returns, buyers will have to do everything to stay above 1.1660, otherwise, there will be another major sell-off towards the level of 1.16130. Its breakdown will open a direct path to 1.1580 and 1.1550.   Relevance up to 08:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321521
It's not clear we find out the results of mid-term elections immediately. Binance to buy FTX

Japanese PPI Stays The Same. Decline Of The US CPI Let US Stocks And EUR/USD (Euro To US Dollar) Gain

ING Economics ING Economics 13.09.2022 12:46
Asian currencies likely to extend gains against the USD as risk sentiment remains solid ahead of the US inflation report  Source: shutterstock Macro outlook Global Markets: US equities made further gains yesterday ahead of the US CPI release later today, which is expected to show a decline in headline inflation thanks to lower crude oil, and hence retail gasoline prices. The risk-on sentiment has also hurt the USD, with EURUSD pushing back above 1.01 to 1.0126, and other G-10 currencies all following suit. In Asia, currencies yesterday made modest gains on the whole against the USD, but have lagged the G-10 moves. So with equity futures suggesting no turn in sentiment just yet, Asian FX will likely continue to strengthen today ahead of the US session. USDCNY is now down to 6.9265, taking the USDCNY 7.0 target off the agenda for the time being. US Treasury yields were slightly higher yesterday, especially at the back end, where a lackluster USD32bn 10Y auction saw yields on 10Y bonds rising almost 5bp to 3.358%. G-7 Macro: It’s all about the US August CPI result tonight. And though the headline inflation rate will most likely decline from July’s 8.5%YoY rate, thanks to lower gasoline prices, the core rate is expected to rise 0.3%MoM, and take core inflation up to 6.1% from 5.9%. Markets are likely to balance any headline falls against core rises, so its too early to be celebrating the end of inflation, as some market participants seem already to be doing. UK labour market data and Germany’s ZEW business confidence survey are also on the calendar. India: August inflation came in just above the consensus expectation at 7.0% (consensus 6.9%, ING f 7.0%), mainly due to somewhat stronger food price inflation. In any event, with inflation still well above the RBI’s target range (2-6%), more rate increases are still likely over the coming 2 meetings before the year end. The repo rate is currently 5.4%. We see rates ending the year at 5.9%.   China: With the yuan under recent weakening pressure, we don’t anticipate the PBoC making any further amendments to its 1Y medium term lending facility (1Y MLF) rate today, which will remain at 2.75%. Japan: Pipeline prices appear to have stabilized in August. Producer price inflation remained unchanged at 9.0% YoY in August (vs 9.4% in June) and import price growth slowed to 21.7%YoY (vs 26.1% in July). Despite the recent weakness in the JPY, the drop in global oil prices has led to price stabilization. But next week’s August CPI report is expected to show inflation still accelerating to nearly 3.0%. Despite the recent depreciation of the JPY and looming 3% inflation, we still expect no policy change from the BoJ at its September meeting. What to look out for: US inflation and China activity data Japan PPI (13 September) Australia consumer confidence (13 September) US CPI inflation (13 September) Japan industrial production and core machine orders (14 September) Hong Kong PPI and industrial production (14 September) US PPI inflation (14 September) Japan trade balance (15 September) Australia labour market data (15 September) US initial jobless claims and retail sales (15 September) South Korea unemployment (16 September) Singapore NODX (16 September) China industrial production, retail sales and fixed asset (16 September) US University of Michigan expectations (16 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

The GBP/USD Pair Is Following The Euro, The Pound Has Received Support In The Market

InstaForex Analysis InstaForex Analysis 13.09.2022 12:49
Details of the economic calendar for September 12 UK industrial production data showed a slowdown in growth from 2.4% to 1.1%. This is a negative factor for the country's economy, but based on the behavior of the price, the pound ignored the statistical indicators. Speculators focused on the speeches of the representatives of the European Central Bank. Their comments confirmed the "hawkish" forecast regarding further rate hikes. Experts are sure that the ECB intends to raise rates by 75 basis points in October. Based on expectations, the market experienced a sharp rise in the value of the euro. The main theses of the speeches of the ECB representatives: Joachim Nagel, ECB: - The rate increase during the September meeting brought us one step closer to the neutral level—it is necessary to raise rates further; - Inflation is very high—it can reach 10% YoY; - It is possible that the inflation rate will peak in December and will gradually decrease in 2023; - Inflation could reach 6.0% YoY next year. Frank Elderson, ECB: - All members of the ECB intend to return inflation to 2.0% YoY—this is a priority; - The ECB will continue to raise interest rates; - A period of recession is possible but may not be long; - Stable prices are an important medium- and long-term growth factor for good prospects for the EU. Luis de Guindos, ECB: - The 75 basis point rate hike in September was made to reduce inflation expectations; - The ECB should help the EU cope with the energy shock; - Higher interest rates could slow down economic growth; - The regulator must direct all its tools to restore price stability; - No idea where the ECB rate ceiling will be. Analysis of trading charts from September 12 The EUR/USD currency pair strengthened in value by about 300 points from the lows of the downward trend. This movement is classified as corrective, during which the quote locally rose to the area of 1.0200. The GBPUSD currency pair rushed up after the euro. As a result, the corrective move from the local low of 2020 was prolonged, where the British currency strengthened by about 300 points in less than a week. Economic calendar for September 13 At the opening of the European session, data on the UK labor market was published, which came out much better than forecasts. The unemployment rate fell from 3.8% to 3.6%, while forecast assumed the previous level to remain. The negative factor in the report is the increase in the number of claims for unemployment benefits by 6,300, while their reduction is forecast by 13,200. At the same time, employment in the country grew less than the forecast, by only 40,000. Despite the negative factors, the decrease in the unemployment rate in the country covers everything. As a result, the pound sterling received support in the market from buyers. The main event of the day and the whole week is the data on inflation in the United States. Based on the indicators, investors and traders will be guided by the Fed's possible steps during the next meeting. In simple words, a gradual decline in inflation may push the regulator to slow down the rate of increase in the refinancing rate, and this, in turn, will lead to a noticeable weakening of dollar positions. Based on forecasts, inflation in the US may slow down from 8.5% to 8.1%. Time targeting: US Inflation – 12:30 UTC Trading plan for EUR/USD on September 13 In this situation, stable price retention above the level of 1.0150 will eventually lead to a breakdown of the value of 1.0200. This step allows for the subsequent formation of a corrective move that does not violate the integrity of the downward trend. Trading plan for GBP/USD on September 13 In this situation, the upward cycle is still relevant in the market. Therefore, the prolongation of the current corrective move is not excluded, where at first, the price will hold above the level of 1.1750 and then move towards 1.1800–1.1850. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.       Relevance up to 10:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321539
Swiss Pension Fund Publica Will Increase Its Share Of Gold To 1%

The Gold Will See A Trend Change (4H Chart)

InstaForex Analysis InstaForex Analysis 13.09.2022 12:57
Gold: The chart shows the movement of gold in the 4-hour (H4) chart. Pay attention to the vertical dotted line, along which there are 4 points (marked with pink arrows) formed from the intersection of slanted lines. This linearization is a rare phenomenon, and it is quite difficult to find an exact interpretation for it. Even so, there is a term for it - parade of nodes - as it is sometimes found on financial instruments. According to past observations, this situation ends up with a trend reversal. So, having tested the support level of $1687, gold will see a trend change, moving towards $1894. Good luck!     Relevance up to 10:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321546
Gold Stocks Have Performed Very Well Under Pressure

The Gold: What To Do After The Release Of The US Inflation Report?

InstaForex Analysis InstaForex Analysis 13.09.2022 13:08
Previous trading tips in gold pointed to a price decrease towards $1675 and below. It was based on the continuation of the downward trend, as well as on the levels left unbroken by buyers at different times. Currently, there are two such levels. The first is the monthly high at $1687, while the second is the yearly high at $1675. Today's data from the US will be decisive for the market. The official report on inflation will certainly affect the plans of the Fed on interest rates. Indicators show that there is likely a sell-off during the US trading session. There are two possible scenarios: 1. Traders will take short positions, with stop loss at $1734. Then, they will exit the market when the quote reaches $1675. 2. After the release of the US inflation report, traders will sell gold until the price reaches $1675. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks!   Relevance up to 10:00 2022-09-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321550
Bitcoin Extends Rally, Microsoft & Tesla Will Report Earnings This Week

Bitcoin Will Continue Its Upward Movement But Growth May Slow Down

InstaForex Analysis InstaForex Analysis 13.09.2022 13:15
Bitcoin continues its upward movement and confidently consolidates above the $22k level. The cryptocurrency is slowly moving towards the next resistance area, which runs at $22.5k–$23.1k. At the same time, the ultimate target of the bullish movement can be called another retest of the upper boundary of the $18k–$25 wide range. Bitcoin technical indicators show local weakness caused by the $22.6k resistance zone piercing, which triggered an increase in sellers' volumes. As a result, the RSI reached 60 and turned sideways. The stochastic oscillator has been in the overbought zone for the second day. The metric formed a bearish crossover and began to decline. These technical metrics indicate a local decrease in buying activity. At the same time, the MACD remains bullish and maintains an upward movement towards the zero mark and the green zone. This is an important bullish signal indicating the presence of a medium-term upward movement. Given this, the local weakness of BTC can be interpreted as a healing correction. Most likely, with the opening of the American markets, the price will resume growth. Alternative scenario for the development of events Another scenario of the development of events, which is tied to fundamental factors, is also quite probable. Today, September 13, the statistics of the consumer price index for August will be published. In July, the figure fell to 8.5%, but the CPI forecast for August is 8.1%. On the one hand, I want to be sure that the publication of financial statements will not affect the price of BTC in any way, given that the market is preparing to raise the key rate by 75 basis points. The "smart money" of the crypto market is already ready for a further fall in inflation, and the expected outcome of the event is embedded in the price of Bitcoin. This means that the reaction of the market to the continued pace of falling inflation will be insignificant. Despite this, we can expect a local pullback of the price to the range of $20.5k–$21.1k. This may be due to the fixation of short-term positions by investors who bet on a further fall in inflation. The ultimate target of the current upward movement of Bitcoin can be considered the $24k–$25k range. Subsequently, the price will again begin to decline due to the pressure of miners and macro trends. It is likely that this will be the last drop in the formation of the "triple bottom" pattern, which will subsequently lead to a significant upward movement of BTC/USD to the $27k–$28k area. Will Bitcoin continue to be bullish? As of September 13, the further upward movement of Bitcoin is not in doubt for the following factors: correction of the DXY index, which has an inverse correlation with Bitcoin; the upward movement of the S&P 500, which has a direct correlation with Bitcoin; adaptation of the market to the publication of CPI reports and low volatility in the market. Given these factors, Bitcoin will continue its upward movement towards the upper $24k–$25k swing area within the current wide range of $17.7k–$25k. The pace of growth may slow down in the next few days due to the activation of bears near the $22.6k level, as well as a potential pullback on news of rising inflation. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade Relevance up to 10:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321541
EU Gloomy Picture Pointing To A Gradual Approach To Recession

Energy Crisis Cause Recession In The European Union And Great Britain

InstaForex Analysis InstaForex Analysis 13.09.2022 13:21
Goldman Sachs say a difficult macroeconomic environment in Europe may continue to put pressure on assets, even despite a positive risk/reward ratio, financial support and measures to reduce energy demand. They remarked that they remain wary due to the energy crisis, monetary tightening and the political backdrop around Italy's elections, and only signs of an "imminent market downturn" could change their view. "Our economists expect the energy crisis to push both Europe and the UK into recession, albeit relatively mild, and forecast an acceleration in policy tightening by both the ECB and the Bank of England," Goldman Sachs strategists wrote. The technical picture also points to at least another wave of decline in European indices, which should lead to an update of the yearly lows. European equities have lagged the S&P 500 this year in dollar terms as euro weakened more than 10%. Meanwhile, the region's credit markets continue to be much more stressed than stocks. On the bright side, Europe's 12-month earnings projections are yet to see any major downsides. Although the region's income-based estimates have fallen this year, they still remain above levels reached during the 2008 financial crisis. Relevance up to 11:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321558
Navigating the European Landscape: Assessing the Significance and Variations of Non-Bank Financial Institutions

The GBP/USD And The EUR/USD Pairs Are Bullish

InstaForex Analysis InstaForex Analysis 13.09.2022 13:28
EUR/USD Higher timeframes Bulls, yesterday, tested the reference points indicated earlier at the boundaries of 1.0116 - 1.0176 (final levels of the daily cross + weekly short-term trend). The liquidation of the daily Ichimoku death cross (1.0176) and the entry into the daily cloud (1.0203) will allow us to build further plans and consider new upward prospects. The levels passed the day before now form a support area, which today can be defined within 1.0057 - 1.0031 - 1.0000. H4 – H1 The bulls keep the main advantage in the lower timeframes. Their next intraday upside targets are now at 1.0194 – 1.0266 – 1.0334 (classic pivot points resistance). Despite the overall advantage, the pair is currently in the correction zone, relying on the support of the target broken yesterday on the breakdown of the H4 cloud (1.0128) and the central pivot point (1.0126). The key support is the weekly long-term trend (1.0019), which is responsible for the current balance of power. Its breakdown and reversal will support a change in priority in the movement. *** GBP/USD Higher timeframes The development of an upward correction continues. The pair approached the first resistance of a fairly wide zone, which is currently located at the boundaries of 1.1737 (daily Fibo Kijun) - 1.1840–48 (daily medium-term trend + weekly short-term trend) - 1.1943 (the final level of the Ichimoku cross in D1). The passage of this zone will significantly change the current balance of power and open up new targets for bulls. Immediate support now is the previous daily short-term trend (1.1568). H4 – H1 The advantage at the moment is on the side of the bulls. In the lower timeframes, they continue the development of the upward movement and test the first resistance of the classic pivot points (1.1729). Their further targets within the day are 1.1778 (R2) – 1.1847 (R3). Key levels today act as supports and are located at 1.1660 (central pivot point) and 1.1570 (weekly long-term trend). The breakdown of key levels can lead to a change in the current balance of power. *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend) Relevance up to 11:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321562
The Ethereum Has Located Just Above The Key Short-Term Technical Support

What Could Ethereum Be, Bullish Or Bearish?

InstaForex Analysis InstaForex Analysis 13.09.2022 13:50
Technical outlook: Ethereum pushed through the $1,790 highs over the weekend, rallying over 350 points from its recent swing low at around $1,423. The crypto might have completed a corrective rally and hit resistance just below $1,800. Also, note that the Fibonacci 0.618 retracement of the bearish drop is seen around $1,805, hence the token will face strong resistance if prices manage to reach there. Ethereum had earlier dropped from the $2,031 highs through the $1,423 lows, carving a meaningful downswing as seen on the 4H chart here. A pullback rally was expected thereafter, which could potentially reach up to $1,750 and the $1,800-10 area before prices turned lower again. The bulls have managed to produce a corrective wave and push prices up to about $1,800. The Ethereum bears might be keen to come back in control from here or after hitting $1,800-10 in the near term. Also, note that prices have tested the Elliott Channel resistance line from just below $1,800 and turned lower. The crypto is trading close to the resistance zone. A drag lower from here remains a high probability. Trading plan: Potential drop from the $1,750-1,800 zone against $2,050 Good luck! Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade Relevance up to 13:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292573
The Euro To US Dollar (EUR/USD) Pair Moved Without Panic But Now No One Is Thinking About Buying The Euro

If The US Dollar Is Under Pressure Then EUR/USD Will Continue To Grow

InstaForex Analysis InstaForex Analysis 13.09.2022 13:59
EUR/USD continues to fall despite the current correction of almost 300 points. If the dollar is under pressure today after the release of inflation data in the US, then EUR/USD will receive a new impetus for further growth. As of this writing, the price is trying to overcome the strong resistance level of 1.0150 (50 EMA on the daily chart). In case of successful development of a positive scenario for EUR/USD, the breakdown of yesterday's local high of 1.0198 will become a confirming signal for building up long positions with targets near the upper border of the downward channel on the weekly chart and the level of 1.0355. In the main scenario, we expect the decline to resume. The breakdown of the crucial short-term support level 1.0087 (200 EMA on the 4-hour chart) will be a signal for the resumption of short positions, and the level of 0.9900 will be the first target of a decrease (in the range of 1–3 weeks). Below the key resistance levels 1.0660 (200 EMA on the daily chart), 1.0750 (50 EMA on the weekly chart), EUR/USD is in the zone of a long-term bearish market. Support levels: 1.0150, 1.0087, 1.0030, 1.0000, 0.9900, 0.9865, 0.9800 Resistance levels: 1.0198, 1.0220, 1.0300, 1.0355 , 1.0500, 1.0660, 1.0750 Trading Tips Sell Stop 1.0110. Stop-Loss 1.0210. Take-Profit 1.0087, 1.0030, 1.0000, 0.9900, 0.9865, 0.9800, 0.9700 Buy Stop 1.0210. Stop-Loss 1.0110. Take-Profit 1.0300, 1.0355, 1.0500, 1.0660, 1.0750   Relevance up to 12:00 2022-09-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321566
The US PCE Data Is Expected To Confirm Another Modest Slowdown

Market Eyes On US CPI Results, Increased Risk Sentiment

Saxo Bank Saxo Bank 13.09.2022 13:35
Summary:  An important US CPI release up later today, which could extend the USD weakening move in the short term if we see a soft print, with JPY crosses likely the most sensitive to any jolt the data delivers to US treasury yields. Elsewhere, it is all about market sentiment, which has rushed higher on hopes that Ukrainian battlefield momentum will continue and change the game for the European energy outlook. FX Trading focus: US CPI release and USD picture. AUDNZD in the spotlight. Over the last few days, the US dollar has largely weakened as a function of brightening risk sentiment and hopes that the energy situation might eventually improve for Europe if Ukrainian battlefield successes compound further and prove a gamechanger for the medium term energy outlook for Europe. It’s impossible to predict developments there, but to get a more determined extension higher, we’ll need a steady stream of improvements and something that can bring the prospect of actual deliveries of Russian natural gas through the pipelines. I’m not sure I understand the path in that direction in the near term. That brings us to today’s August US CPI release, which is expected to show headline inflation at -0.1% month-on-month and +8.1% year-on-year, with the more important core “ex Food and Energy” CPI reading expected at +0.3% MoM and +6.1% YoY (vs. +5.9% in July and a cycle peak of ). The core print, especially the month-on-month reading, is far more important than the headline data. Look for a significant reaction on a downside miss even of 0.1%, but the market may get very upset if we get a +0.4% or higher reading. It’s hard to know how the market is positioned for this data point, given that Fed expectations are pinned near the highs of the cycle, while the USD has backed off very sharply and risk sentiment has enjoyed a strong surge. The latter suggests that the surprise side is a hot core inflation reading. Chart: GBPUSDSterling is trading a bit firmer as the currency is the most sensitive to prospects for an improved natural gas delivery outlook, with the markets hopes up on that front due to developments in Ukraine. The UK August payrolls data this morning was stronger than expected and the unemployment dropped to a nearly 50-year low of 3.6% versus expectations for 3.8% expected. And yet, August Jobless Claims posted their first positive reading since early 2021 and are trending very sharply higher. The Bank of England is rapidly seeing expectations repriced for a 75 basis point hike at next Thursday’s meeting, but it’s not fully there yet. Ahead of today’s US CPI release, GBPUSD is trading up close to the first important resistance, the major pivot low in July near 1.1760. The next few sessions should be pivotal for the pair. AUDNZD update as the pair pushes on resistance again. The drumbeat of economic data out of Australia is not particularly encouraging, and the last Australian trade balance saw the surplus shrinking sharply after a string of record levels in recent months. That surplus relative to the new very large external deficits that New Zealand has been running due to its reliance on energy imports is one of the key factors favouring a significant break higher in AUDNZD into a new range above the 1.1250 that has held since 2017 (and on a weekly close basis since 2015, with the highest weekly close since 2013 only slightly above 1.1300). Watching that pair for a change of mentality, as fair price in the very long term perspective looks more like 1.2000+. The Norwegian Regions Survey for August showed the first negative print (-0.16 vs. +0.80 in July) for the expected growth for the next six months since 2009, a fairly remarkable development suggesting that the oil and gas boom has not sufficiently offset concerns for real growth in the country. NOK trades a bit weaker this morning versus the euro and SEK, with NOKSEK only having a bit more than a figure to worth with before suggesting a reversal lower (1.0500 area versus current 1.0620 as of this writing). Table: FX Board of G10 and CNH trend evolution and strength.The USD is leaning lower – does the CPI deliver the coup de grace today? Elsewhere, the weak JPY will be very sensitive to the US treasury market reaction on the back of the CPI, as its weakness is reflection of US treasury yields pinned near the highs for the cycle. Table: FX Board Trend Scoreboard for individual pairs.USDCAD is trying to turn negative – let’s have a look at the US CPI release today and the close on the day before drawing conclusions. EURUSD flipped positive yesterday and needs to remain above 1.0100 after the US data today to keep the focus higher, perhaps to 1.0350 next. Upcoming Economic Calendar Highlights 1000 – US Aug. NFIB Small Business Optimism 1230 – US Aug. CPI 1700 – US 30-year T-bond Auction Source: https://www.home.saxo/content/articles/forex/fx-update-usd-eyes-cpi-europe-eyes-energy-prices-13092022    
5% for the US 10-Year Treasury Yield: A Realistic Scenario

Eyes On US Inflation Data And Gold & Silver Benefit From Softer USD

Swissquote Bank Swissquote Bank 13.09.2022 14:16
Global indices made a solid start to the week. The EuroStoxx 600 closed yesterday 1.76% higher on news that the Ukrainians are doing well pushing back the Russians in territories they launched a counteroffensive attack. The S&P500 and Nasdaq advanced more than 1%, despite chatter of rail strike in the US. Hope of softer US inflation is what keeps the bulls running. US inflation data US inflation data is due today, and the CPI is seen easing toward 8.1% in August versus 8.5% printed a month earlier, and 9.1% peak printed the month before. A second month of soft inflation read has the power to soften the Fed hawks and increase the bets of softer rate hikes beyond September, whereas a figure above expectations, or worse, a figure above last month’s read could snap the latest rally and send the stocks tumbling. We are tilted toward a softer read than not. Hope of a soft inflation data is also what’s pulling the US dollar lower across the board. The dollar index tipped a toe below the 108 mark yesterday, while the EURUSD made an attempt above its 50-DMA, as news that Ukrainian troops are being successful in their counteroffensive attack, and chatter that voices are rising in Russia against the regime’s strategy in Ukraine, brought forward the possibility of Russia being defeated in Ukraine. Cable flirts with the 1.17 level, the dollar-swissy retreated to 0.95 and the USDCAD slipped below 1.30. The American crude, gold and silver are better The American crude rallied more than 2% yesterday on improved market sentiment, and flirted with the $90 offers, without however being able to clear them. Gold and silver are also better bid into the inflation data, thanks to a broadly softer US dollar. Watch the full episode to find out more! 0:00 Intro 0:25 Equities extend gains 0:58 … despite discouraging news for US retailers 2:25 US inflation is all that matters 6:20 USD soft pre-CPI, EUR gains on Ukraine news 7:15 Pound firmer but… 8:40 Crude oil flirts with $90 9:00 Gold & Silver benefit from softer USD Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #inflation #EUR #CAD #CHF #GBP #Gold #XAU #Silver #XAG #crude #oil #EuroStoxx #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH        
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

Australian Dollar (AUD) Could Be More Likely To Be Supported By RBA If The Employment Report Go Robust

Kenny Fisher Kenny Fisher 13.09.2022 15:55
The Australian dollar continues to rally and has climbed above the 0.69 level for the first time in September. AUD/USD has gained 150 points since Thursday, as the US dollar continues to lose ground. Australia released key confidence indicators earlier today, and the decent numbers gave the Aussie a slight push higher. NAB Business Confidence climbed to 10 in August, marking a 4-month high. This was up from 7 and above the forecast of 6 points. NAB Business Conditions remained steady at 20, shy of the estimate of 27 points. Westpac Consumer Sentiment for September bounced back with a strong 3.0% gain, crushing the forecast of -0.3% and recovering from the -3.0% read in August. The rebound is somewhat surprising, as it was the first gain since November 2021 and the RBA just raised interest rates. The survey noted that consumer confidence still remains low, at 84.4. Perhaps the drop in gasoline prices gave a jolt to consumer optimism. Next up is the Australian employment report on Thursday. The market consensus stands at 35.0 thousand for August, which would be a huge rebound after the -40.9 thousand reading in July. A strong release will make it easier for the RBA to remain aggressive as it continues to battle inflation. US inflation next It could be a busy day for the markets, with the US releasing August inflation later today. Headline CPI is expected to drop for a second straight month, from 8.5% to 8.1%, driven by lower gas prices. Core CPI, however, is expected to rise to 6.1%, up from 5.9%. If headline CPI does fall, it would mark a second straight decline, and likely lead to some headlines proclaiming that inflation has peaked. However, Fed Chair Powell has said loud and clear that the Fed will pursue its aggressive stance, even if one or two inflation reports show declines. The markets were exuberant after the unexpected drop in July inflation, sending the US dollar sharply lower. Since then, investors appear to have internalized that the Fed is not about the reverse policy, and I don’t expect a repeat performance from the US dollar, even if inflation is lower than expected. AUD/USD Technical AUD/USD has support at 0.6807 and 0.6737 There is weak resistance at 0.6915, followed by resistance at 0.6985 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar extends gains on solid data - MarketPulseMarketPulse
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

BoE Is More Likely To Hit 75bp Rate Hike As A Result Of UK Jobs Market Data

Kenny Fisher Kenny Fisher 13.09.2022 16:08
GBP/USD is in positive territory today. In the European session, the pound is trading at 1.1731, up 0.42%. GBP/USD continues to take advantage of US dollar weakness and has gained 240 points since Thursday. Inflation has hit a staggering 10.1% and the Bank of England is projecting that inflation may not peak until 13%, with some analysts predicting an even higher peak. The manufacturing, services and construction sectors are either in contraction or stagnation and Brits now have to contend with a new prime minister and a new monarch after the death of Queen Elizabeth. The UK has phased out energy imports from the UK, but the weak EU economy is taking a toll on the UK, as the two are close trading partners. The UK labour market remains robust, one of the few bright lights in a grim economic landscape. Unemployment has fallen to 3.5%, a 50-year low, but wage growth in the three months to July rose 5.5% YoY, up from 5.2%. Employment rose by 40 thousand, down from 160 thousand prior and well below the forecast of 128 thousand. For the Bank of England, the job numbers actually increase the odds of a supersize 75 basis point hike next week, as wage growth continues to rise and the labour market continues to tighten. The BoE, which has failed to show until now that it can curb spiralling inflation, may regain some credibility with a 75bp move. US CPI expected to fall All eyes are on the US inflation report, which will be released later today. The markets could be treated to mixed results – headline inflation is expected to drop to 8.1% (8.5% prior), while core CPI is forecast to rise to 6.1% (5.9% prior). With the Fed intent on remaining aggressive in order to tame inflation, the markets have priced in a 75bp increase at the September 21st meeting. The inflation release should be treated as a market-mover for the US dollar and has additional importance as it is the final key release before the Fed meeting. GBP/USD Technical GBP/USD faces resistance at 1.1790. Above, there is resistance at 1.1931 There is support at 1.1689 and 1.1548 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Euro To US Dollar (EUR/USD) Pair Moved Without Panic But Now No One Is Thinking About Buying The Euro

How The Euro To US Dollar Pair Started The Day

InstaForex Analysis InstaForex Analysis 14.09.2022 08:02
The EUR/USD currency pair resumed its growth quite calmly on Tuesday. We have already said in previous articles that it is too early to make an unambiguous conclusion about the completion of the formation of a long-term downward trend. This trend has been forming for too long to break in one week. Recall that we have a certain "bifurcation point" - 1,0369. This level is the last local maximum. If it is updated, the chances of forming a new upward trend will increase dramatically. If not, then the entire current segment of the growth of the euro currency will be recognized as another "weak" correction, as we recall that during the entire downward trend, the pair showed corrections of a maximum of 400 points. And Tuesday eloquently showed us that the level of 1.0369 is unattainable for the pair, and it's too early to put an end to the dollar. The market only had enough understanding that inflation in the US in August fell slightly less than predicted to collapse the pair by almost 200 points. What else is there to talk about? The morning growth of the euro currency can also not be called logical from a macroeconomic point of view. In the morning, an inflation report for August was published in Germany, which showed a new acceleration to 7.9%, fully corresponding to experts' forecasts. On the one hand, such a report could cause a new strengthening of the euro currency since any increase in inflation is at least a little. Still, it increases the likelihood of further tightening the ECB's monetary policy. And Germany is the "locomotive" of the European economy. The indicators of this country cannot be ignored. On the other hand, inflation in Germany is just one of the lowest among the countries in the European Union. The acceleration of the consumer price index in the Bundestag is not something critical. European inflation is higher. Therefore, the growth of the euro currency does not quite correlate with this report. The head of the Bundesbank urges the ECB to continue raising the rate. But the head of the Central Bank of Germany, Joachim Nagel, said this week that the European Central Bank needs to continue tightening monetary policy. However, Nagel remarked: "if the inflation picture continues to remain as it is now or worse." From our point of view, the inflation picture will remain the same as it is now or worse. Most likely, this is also understood in the European Union. Thus, several leading central banks in the EU are already calling for a continued increase in the rate. Nagel also drew attention to the fact that, with the current rate of price growth in December, inflation may exceed 10%. Joachim noted that he expects a slowdown in price growth in 2023, but inflation will remain at a high level – above 6%. He also notes that confidence in the European currency has fallen greatly in recent months and needs to be restored. This can be done again by raising the key rate. As for the recession, Nagel did not comment on this topic in any way, although the ECB can hardly ignore it as easily as the head of the Bundesbank. Suppose everything is fine with Germany's economy, and the country's central bank is ready to raise rates. In that case, the European Union is full of weaker economies, for which an increase in rates may mean a recession and a serious collapse of the economy. And then the European Commission will have to again throw "lifebuoys" to such countries from the European budget, which will be replenished at the expense of Germany and other "pillars" of the European economy. However, in general, we agree with Nagel and believe that if the ECB has raised the rate by 1.25% twice, it will continue to do so in the future while maintaining the current pace. In principle, Christine Lagarde almost openly stated this last week after the meeting. It intends to raise the rate at all subsequent meetings in 2022 to catch up with the Fed. For the euro currency, such news is like manna from heaven. We have been saying that the divergence between the ECB and Fed rates is pushing the euro down for a long time. Now this divergence can be leveled, which means that the euro currency can get a couple of trumps on its hands. The average volatility of the euro/dollar currency pair over the last five trading days as of September 14 is 137 points and is characterized as "high." Thus, we expect the pair to move today between 0.9881 and 1.0155. A reversal of the Heiken Ashi indicator back to the top will signal a possible resumption of the upward movement. Nearest support levels: S1 – 1.0010 S2 – 0.9949 S3 – 0.9888 Nearest resistance levels: R1 – 1.0071 R2 – 1.0132 R3 – 1.0193 Trading Recommendations: The EUR/USD pair may have started a new uptrend, but it may have already ended it. Now we should consider sell orders if the price is fixed below the moving average line with targets of 0.9949 and 0.9888. Buy orders should be opened if the pair bounces off the moving average, with targets of 1.0132 and 1.0155. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. Moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 02:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321616
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The Pound And The Euro Are Traded Very Similarly, Will The GBP/USD Pair Continue To Rise?

InstaForex Analysis InstaForex Analysis 14.09.2022 08:10
The GBP/USD currency pair also continued a fairly confident upward movement during Tuesday. Before the publication of the US inflation report. Unfortunately, as in the case of the euro currency, this growth can be recognized as a banal correction as part of a long-term downward trend since yesterday, the pair collapsed by 200 points. Nevertheless, the downward trend must end sooner or later, and each subsequent upward pullback gives additional chances for completion. It should be noted that the euro and the pound are trading almost identically again, which, from our point of view, somewhat facilitates the forecasting process. Although the September meeting of the ECB has already taken place, and the meeting of the Bank of England has been postponed for a week, both European currencies are moving almost the same. The current moment may be a "turning point" for a long fall in the euro and the pound. The euro currency updated its 20-year lows during this movement, and the pound – 37-year lows. However, we also believe that the market should not stop there, and yesterday's inflation report helped it greatly. Now the pound and the euro currency can resume the global trend and update their multi-year lows several more times. It turns out that one report destroyed all the hopes of the bulls, all the hopes of the euro and the pound, which had just begun to find their fundamental trump cards in the confrontation with the US currency. Also, note that the pound sterling is now falling faster than the European currency. The market did not want to buy the pound in the last few days, but the euro pulled up the British currency. It is strange since it should have been the other way around. After all, the Bank of England has already raised the rate six times in a row. At the last meeting, it raised it by 0.5%, and, most likely, it will also raise it by 0.5% next week. But the ECB has only raised its rate twice. Therefore, the pound should grow stronger and fall less. It would help if you kept in mind the moment that the downward trend may end in the near future, which means you can also count on the long-term growth of the pound. But do not forget that the "bearish" mood could not disappear in a couple of days, and yesterday only confirmed this assumption. The pair is already below the moving average, so it can continue to fall. Commerzbank believes that the pound may resume falling. Meanwhile, many experts continue to voice their skeptical points of view regarding the pound. According to Commerzbank experts, postponing the BA meeting for a week is a positive moment for the regulator, as it will have more time to "digest" the inflation report for August and "make sure that it is not doing enough to slow it down." In the UK, inflation is now the highest among those countries we regularly survey. If inflation in the Kingdom is higher, the regulator should raise the rate more strongly and faster. However, we see that, in comparison with the Fed, the Bank of England is slow. It is this moment that can upset market participants and lead to a new fall in the pound. Commerzbank also notes that the latest GDP report turned out to be weak, but it does not give grounds for the Bank of England not to continue raising the rate. But the unemployment report, which showed its decline to 3.6%, on the contrary, should allow the regulator to tighten monetary policy more confidently or even strengthen its monetary pressure. The bank also admits that the rate may rise immediately by 0.75% in September, although official forecasts indicate an increase of only 0.5%. If the Bank of England surprises and increases the rate more than the market expects, the pound may get a new boost to the growth it needs. The market may believe that the British regulator is doing everything to return inflation to the target level. The average volatility of the GBP/USD pair over the last five trading days is 147 points. For the pound/dollar pair, this value is "high." On Wednesday, September 14, thus, we expect movement inside the channel, limited by the levels of 1.1389 and 1.1683. A reversal of the Heiken Ashi indicator upwards will signal a possible resumption of the upward movement. Nearest support levels: S1 – 1.1536 S2 – 1.1475 S3 – 1.1414 Nearest resistance levels: R1 – 1.1597 R2 – 1.1658 R3 – 1.1719 Trading Recommendations: The GBP/USD pair has overcome the moving average on the 4-hour timeframe and may begin a new round of downward movement. Therefore, at the moment, sell orders with targets of 1.1475 and 1.1389 should be considered if the price manages to stay below the moving average line. Buy orders should be opened when fixed above the moving average with targets of 1.1683 and 1.1719. Explanations of the illustrations: Linear regression channels – help determine the current trend. If both are directed in the same direction, then the trend is strong. Moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 02:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321618
Further Downside Of The AUD/JPY Cross Pair Is Expected

From The Outside, The Australian Currency Still Has No Support

InstaForex Analysis InstaForex Analysis 14.09.2022 08:18
The Australian dollar's fall from yesterday amounted to 2.27% (157 points). This happened amid a powerful flight from risk - the US stock index Nasdaq lost 5.16%. This morning, data came out on the deterioration of New Zealand's balance of payments for the 2nd quarter (-27.82 billion dollars y/y against -23.27 billion y/y in the previous period). On the other hand, a slight increase in inflation indices in the UK is expected today, and in the euro area, a drop in July industrial production by 1.0%. From the outside, the Australian currency still has no support. The price went under the target level of 0.6755 on the daily chart, ahead of it is the target level of 0.6685, and below it is 0.6640. The signal line of the Marlin Oscillator has unfolded from the upper boundary of the falling channel, ahead of it there is enough distance to the lower boundary of the channel for the price to fall by another one and a half figures. The price settled under the target level of 0.6755 on the four-hour chart. The decline occurs under both indicator lines. We are waiting for the development of a downward movement towards the designated goals. Relevance up to 04:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321620
The Pound (GBP) Will Probably Continue To Move Sideways

Expectations For Today's The Pound To US Dollar Rate

InstaForex Analysis InstaForex Analysis 14.09.2022 08:21
The British pound turned down sharply on Tuesday, and did not reach the resistance of the MACD line on a daily scale. The price went under the target level of 1.1525, before it opened support at 1.1385. Going under the level will open the 1.1305 target. The Marlin Oscillator on the daily chart is falling in the negative area - in the downward trend zone. The latest data showed a decline in UK unemployment from 3.8% to 3.6%, but jobless claims rose by 6,300, which did not improve the economic picture after falling industrial production and GDP on Monday. The price settled under the target level of 1.1525 and under the MACD indicator line on the H4 chart. The Marlin Oscillator is going down, we are waiting for the price near the nearest target at 1.1385.     Relevance up to 04:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321622
The Euro May Gradually Climb To The Target Level

The Situation On The Stock Market And The EUR/USD Exchange Rate

InstaForex Analysis InstaForex Analysis 14.09.2022 08:29
So, the fall of the stock market, which we talked about in the review on the 12th, was not long in coming. Yesterday, the US stock index S&P 500 collapsed by 4.32%, and the Nasdaq lost even more - 5.16%. The yield on US bonds went up, on 5-year securities it increased from 3.45% to 3.58%. The dollar index jumped 1.47%, the euro lost 1.54% (153 points). The price went under the MACD indicator line on the daily scale, this morning it almost touched the target level of 0.9950. The Marlin Oscillator has returned to the negative area, ready to move down along with the price. We are waiting for the price to go under the support of 0.9950, then move to 0.9850 and to 0.9752. The price managed to consolidate below the MACD indicator line on the four-hour chart, the Marlin Oscillator went into the negative area with force, and there is still a lot of room for it to fall ahead.   Relevance up to 04:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321624
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

Stock Market: Who Ended The Day With A Profit And Who With A Loss

InstaForex Analysis InstaForex Analysis 14.09.2022 08:36
  At the close on the New York Stock Exchange, the Dow Jones fell 3.94% to a one-month low, the S&P 500 fell 4.32%, and the NASDAQ Composite fell 5.16%. Chevron Corp was the top gainer among the components of the Dow Jones index today, losing 3.09 points or 1.90% to close at 159.41. Quotes of The Travelers Companies Inc fell by 3.11 points (1.88%) to end trading at 162.22. Walmart Inc lost 2.85 points or 2.06% to close at 135.22. The losers were Boeing Co shares, which lost 11.41 points or 7.19% to end the session at 147.31. Intel Corporation was up 2.27 points (7.19%) to close at 29.29, while Home Depot Inc was down 19.61 points (6.59%) to close at 277. 93. Leading gainers among the S&P 500 index components in today's trading were Corteva Inc, which rose 0.87% to hit 62.65, Twitter Inc, which gained 0.70% to close at 41.70, and shares CF Industries Holdings Inc, which rose 0.67% to end the session at 100.15. The biggest losers were Eastman Chemical Company, which shed 11.34% to close at 84.11. Shares of NVIDIA Corporation lost 9.47% and ended the session at 131.31. Quotes of Meta Platforms Inc decreased in price by 9.37% to 153.13. Leading gainers among the components of the NASDAQ Composite in today's trading were Akero Therapeutics Inc, which rose 136.76% to hit 29.05, Aditx Therapeutics Inc, which gained 113.75% to close at 0.37, and also shares of Comera Life Sciences Holdings Inc, which rose 100.00% to end the session at 3.86. The biggest losers were Cardiff Oncology Inc, which shed 41.12% to close at 1.89. Shares of Rent the Runway Inc shed 38.74% to end the session at 3.02. Quotes of InMed Pharmaceuticals Inc decreased in price by 35.73% to 12.07. On the New York Stock Exchange, the number of securities that fell in price (2827) exceeded the number of those that closed in positive territory (354), while quotes of 82 shares remained virtually unchanged. On the NASDAQ stock exchange, 3,015 stocks fell, 811 rose, and 188 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 14.24% to 27.27, hitting a new monthly high. Gold futures for December delivery lost 1.64%, or 28.50, to hit $1.00 a troy ounce. In other commodities, WTI October futures fell 0.26%, or 0.23, to $87.55 a barrel. Brent oil futures for November delivery fell 0.67%, or 0.63, to $93.37 a barrel. Meanwhile, on the Forex market, EUR/USD fell 1.44% to hit 1.00, while USD/JPY edged up 1.23% to hit 144.59. Futures on the USD index rose 1.37% to 109.58. Relevance up to 05:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/292655
PLN Soars to Record Highs Ahead of NBP Decision

How The Demand For The US Dollar And For The Euro Affects The Pair

InstaForex Analysis InstaForex Analysis 14.09.2022 08:41
EUR/USD 5M The EUR/USD pair showed extreme movements on Tuesday. The whole day can be safely divided into "before" and "after" the release of the US inflation report. The US currency rose by 180 points after this report was released, although in the first half of the day it was trading with an increase. What was so special about this report that we saw a reaction comparable to the reaction to the Federal Reserve meeting? Really nothing special. The consumer price index amounted to 8.3% in August, which is 0.2% lower than the previous month and 0.2% more than the forecast. Thus, it is absolutely impossible to call an adequate reaction of the market to this event. We would not be surprised if the pair went up or down 100 points, after all, the report is important, but more than 180 is too much. Moreover, the report showed nothing shocking. Inflation continued to decline, but not at the rate expected by the market. Since the pace slowed down, the market probably decided that now the Fed's rate hike of 0.75% is guaranteed and rushed to buy the dollar. The explanation can only be this. In regards to Tuesday's trading signals, everything was complicated. The first buy signal was excellent in terms of accuracy and after it the pair went up about 50 points. In any case, the long position should have been closed manually in profit, since it clearly should not have been left open before the release of an important report. Traders either did not have time to work out all subsequent signals, or there was no point in trying to work them out. A collapse of 180 points happened literally in half an hour and, of course, it was not worth trying to enter the market in the middle of such a "storm". COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 3,000, while the number of shorts decreased by 8,300. Accordingly, the net position grew by about 12,000 contracts. This is not very much, but it is still a weakening of the bearish mood among the major players. However, this fact is not of particular importance, since the mood still remains bearish, and the euro remains "at the bottom". At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 36,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new depreciation of this currency. Over the past six months or a year, the euro has not been able to show even a tangible correction. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 14. Joachim Nagel provokes the strengthening of the European currency. Overview of the GBP/USD pair. September 14. Market skepticism towards the pound has not gone away, but now is a good time for a global trend reversal. Forecast and trading signals for GBP/USD on September 14. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H On the hourly timeframe, the pair showed on Monday how fragile any rise in the euro can be. In fact, a single report led to a huge drop that broke the emerging upward trend. So far, the pair remains above the important Senkou Span B line, but it may well overcome it tomorrow. In this case, the global downward trend will resume. We highlight the following levels for trading on Wednesday - 0.9877, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9977) and Kijun-sen (1 .0035). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The only report of the day will be industrial production in the European Union. This is not the most significant report, and the Europeans can work out the US inflation report this morning, as they might not have had time to do it yesterday. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.         Relevance up to 02:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321612
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The GBP/USD Pair: The British Pound Still Can Not Expect Strong Growth

InstaForex Analysis InstaForex Analysis 14.09.2022 08:48
GBP/USD 5M The GBP/USD currency pair fell sharply by more than 200 points on Tuesday. In principle, everything that we said in the article on the euro/dollar is also true for the British currency. The only difference is that several macroeconomic reports were published in the UK yesterday morning, which could have provoked a slight increase in the pound. However, at the same time, without any statistics, the euro was also growing. Unemployment in the UK, unexpectedly for many, fell to 3.6%, while wages rose by 5.5%. This, of course, is less than the current inflation, but such growth is better than none. Thus, the pound really had every reason to rise yesterday morning. And then it had grounds for a fall, since the seemingly average inflation report in the US disappointed traders so much that they simply rushed to buy the US dollar. Inflation fell less than the market expected, so traders rightly decided that now the Federal Reserve will definitely raise the key rate next week by 0.75%. The question only raises the strength of the market's reaction to US inflation, everything else is quite logical. But there was a problem with trading signals on Tuesday. Not a single signal was formed during the European trading session, and all signals from the US session should have been ignored, since they were formed either during the release of the inflation report, or a little later, when it was still not clear what to expect from the pair, and the price has already passed 200 points down. Thus, trades should not have been opened yesterday. COT report The latest Commitment of Traders (COT) report on the British pound released yesterday, was very eloquent. During the week, the non-commercial group closed 5,700 long positions and opened 15,500 short positions. Thus, the net position of non-commercial traders immediately fell by 21,100, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains pronounced bearish, which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new fall, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its fall has resumed altogether, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 103,000 shorts and 52,000 longs open. The difference is twofold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the foundation and geopolitics. If they remain the same as they are now, then the pound may still be in a "downward peak" for some time. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 14. Joachim Nagel provokes the strengthening of the European currency. Overview of the GBP/USD pair. September 14. Market skepticism towards the pound has not gone away, but now is a good time for a global trend reversal. Forecast and trading signals for EUR/USD on September 14. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair has now completed an upward trend on the hourly timeframe. At least the price has already consolidated below all Ichimoku indicator lines, and all because of one US inflation report. The pair may now resume its long-term downward trend and renew 37-year lows several more times. We highlight the following important levels on September 14: 1.1411-1.1442, 1.1649, 1.1874. The Senkou Span B (1.1653) and Kijun-sen (1.1569) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. The UK will publish an important inflation report on Wednesday, which may also provoke a strong market reaction. Apart from this report, there are no other important events planned for today. But the market can still work out yesterday's US inflation report at the European trading session. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group. Relevance up to 02:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321614
Yen (JPY) Takes A Stab At Resilience, The Grains Sector Has Survived Well

Yen (JPY) Takes A Stab At Resilience, The Grains Sector Has Survived Well

Saxo Bank Saxo Bank 14.09.2022 08:55
Summary:  Equity markets were slammed for their worst losses in more than two years yesterday on a shocking August US CPI print, which showed core inflation rising at twice the anticipated pace for the month. This was a rude shock after a recent strong rally in equities, and US treasury yields jumped, and the US dollar soared as the market rushed to price in the risk that the Fed might hike 100 basis points next week.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities erased most of the gains since 6 September as the market’s positioning ahead of the US August CPI report was completely wrong. Not only did the headline inflation figures not fall m/m, but the core figure is up 0.6% m/m and has been fluctuating around 0.5% m/m for a year suggesting that inflation is getting entrenched at a level suggesting 5-6% annualised inflation in the US. The Fed Funds futures curve immediately shifted downwards lifting peak Fed funds rate at close to 4.5% from around 4% the day before the inflation report. S&P 500 futures tumbled 5.4% from its intraday peak and Nasdaq 100 futures plunged 6.7% from its intraday high. The 3,900 and 12,000 levels are the key levels to watch on the downside in S&P 500 futures and Nasdaq 100 futures respectively. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Shares traded in Hong Kong, Shanghai, and Shenzhen declined on the back of the worst day in more than two years last night in US equities, with Hang Seng Index at -2.6% and CSI 300 -1.2%. Among the top losers, Techtronic Industries (00669:xhkg) plunged 10.6%, Hua Hong Semiconductor (01347:xhkg), Bilibili (09626:xhkg) and Baidu (09888:xhkg) dropped more than 5%, JD.COM (09618:xhkg) and Alibaba (09988:xhkg) slid about 4%. Tencent (000700:xhkg), -1.4%, had an educational game being approved under a company controlled by Tencent’s executives including co-founder Pony Ma. This is the first time Tencent got a game approval this year though being an educational game, it will unlikely be a significant money-making title. CNOOC (00883:xhkg) and COSCO Shipping Energy outperformed, rising 2%-3%. A typhoon is approaching Shanghai and Ningbo causing major container ports in Shanghai and Ningbo to suspend operations. USD rips back higher – suddenly threatening cycle top after CPI data After the shocking August CPI number from the US yesterday, the US dollar soared higher, taking EURUSD all the way back below parity after nearly trading 1.0200 earlier this week. Elsewhere, the USD was universally higher, with a pair like AUDUSD slamming all the way to the low 0.6700's and therefore not far from the cycle low, while NZDUSD actually posted a cycle low, and GBPUSD trading south of 1.1500 after trading north of 1.1700. Moves by the Bank of Japan and verbal intervention from the Japanese Ministry of Finance helped temper the USD move this morning (more below). Now the focus shifts to next week's FOMC meeting, where the market is now pricing the rising risk that the FOMC could hike 100 basis points. JPY takes a stab at resilience on the anticipation of intervention The Bank of Japan carried out a “rate check” in the FX market, which is widely seen as a precursor for actual market intervention. This tamed the USDJPY move higher from sub-142.00 levels to nearly 145, as the gains were pared back to 144.00, with the JPY also firmer broadly. Finance Minister Suzuki said nothing could be ruled out in response to the weakening JPY and that if the current trend persisted, stepping into markets is an option. But as past experience has shown, intervention often only creates temporary volatility if the underlying issue is not addressed - in this case, the Bank of Japan's insistence on maintaining very low rates and controlling yields out to 10 years. If yields continue to rise globally, Japanese officialdom will have an enormous and likely unwinnable fight on its hands if the Bank of Japan fails to change its policy. Gold (XAUUSD), Silver (XAGUSD) and copper (COPPERUSDEC22) ... all tumbled following the stronger than expected US CPI print, thereby reversing some of the recent weak dollar-led gains. Prior to the release copper had been on a tear reaching $3.7/lb as the LME market continued to signal the tightest market conditions since November on increased demand from China. Gold trades near $1700 and close to the current floor around $1680 after the CPI print strengthened the view the FOMC will have to remain hawkish and continue to aggressively hike rates. However, the risk to economic growth while inflation remains stubbornly high may bring back worries about stagflation, a development that may lend support to investment metals. Continued focus on the dollar and the markets pricing of future inflation expectations. Crude oil (CLV2 & LCOX2) Crude oil traded higher on Tuesday before the hotter-than-expected US CPI print helped send most commodity prices, including oil, lower on fears aggressive rate hikes could curb demand. Earlier the market traded up after OPEC maintained their 2023 outlook for a 2.7 million barrel per day increase in global demand. The EIA delivered the same message last week and the IEA is likely to do the same today when their monthly oil market report is released. Developments that highlight the current discrepancy between the (lower) price action and what these major forecasters are seeing. A recovery later in the day was supported by the Biden admin saying it will consider starting refilling strategic reserves when WTI falls below $80. Ahead of today’s EIA stock report, the API reported a 6m bbl crude stock build, a 3.2m bbl drop in gasoline and 1.8m bbl build in distillates. US Treasuries (TLT, IEF) Treasury yields jumped yesterday on the shocking August US CPI data, with the yield curve flattening aggressively as the hot data point saw the market rushing to price in the risk of more aggressive moves to counter inflation at coming meetings. The 10-year yield was taken back toward the cycle top from mid-June at 3.50%. A further rise above this yield level will continue to drive the risk of weaker sentiment and USD strength. What is going on? US August CPI shocks with high core inflation reading The headline US CPI data came in slightly above expectations, with a year-on-year reading of 8.3% vs. 8.1% expected and a month-on-month reading of +0.1% vs. -0.1% expected, a real surprise given sharp drops of late in gasoline prices. But the real shock was the core Ex Food and Energy inflation reading of +0.6% month-on-month, twice what was expected. This triggered an enormous slide in risk sentiment as the market rushed to price the risk that the FOMC might hike as much as 100 basis points next week. As of this morning, about 85 basis points is priced for the meeting. The grains sector maintained a bid on Tuesday ... while most other commodities took a tumble after the US CPI print once again raised concerns about aggressive growth and demand killing rate hikes. With demand being relatively constant the grains sector held up well as the sector continued to focus on supply risks and dwindling inventories. The US Department of Agriculture this week slashed its estimates for soybean supplies from the US, the second-largest producer after Brazil where a lingering “triple-dip” La Nina repeat could bring dry conditions in the coming months. In addition, wheat exports have been cut because of the war in Ukraine, and there’s uncertainty over Ukraine’s grain export corridor after criticism from Putin. Inditex 1H revenue beats estimate The Spanish fashion retailer delivered first-half revenue of €14.9bn vs est. €14.6bn on top of delivering EBITDA margin of 27.1% vs est. 26.8%. Inditex reiterates guidance of online sales exceeding 30% of revenue by 2024. New lockdowns in China Two cities around Beijing announced lockdowns due to Covid risks. Shijiazhuang (over 2.3 million inhabitants) asked all residents of Yuhua district to work from home for a period of three days (expected to end on Friday morning). Sanhe (around 440,000 inhabitants) implemented a full lockdown of its entire population at least until Saturday morning. This underscores the supply chain risks during the winter period in the event China experiences a bigger Covid outbreak. UK August CPI comes in slightly above expectations at core UK inflation came in at 9.9% on the headline versus a slightly higher print expected, but the core inflation level rose to a new cycle high of 6.3%, just above the 6.2% expected. Price pressures are likely to remain elevated this month as well, despite some softening in fuel prices, as food and services costs continue to rise. Further gains in inflation can be expected in October, but the capping of household energy bills may help to soothe inflationary pressures thereafter. Cheniere was the one shining light on Wall Street overnight Cheniere, the US’ biggest LNG exporter, saw its shares rise 3.1% yesterday while markets saw a sea of red when US inflation data came out higher than expected. The highlights the fact that energy companies can and have been able to outperform the market. The largest US exporter of liquefied natural gas boosted its full-year 2022 profit forecast beyond analysts’ expectations as shipments are already set to depart their dock sooner than anticipated. What are we watching next? Shanghai Cooperation Organization meeting on 15-16 September This the first time since 2019 that Asian leaders are meeting in person in a bigger strategic forum. Xi Jinping and Vladimir Putin are officially joining the summit and India’s Modi is expected to join as well. Given the recent military success in Ukraine, the pressures are mounting on Russia and Putin Ethereum merger will draw attention The Ethereum blockchain’s much-anticipated software upgrade, the so-called Merge, is expected to take place tomorrow morning, according to its core developers. The new system, known as "proof-of-stake", will slash the Ethereum blockchain's energy consumption by 99.9%, developers say. Most blockchains, including Bitcoin's, devour large amounts of energy, sparking criticism from some investors and environmentalists. The merge could make Ethereum more favourable to pension funds and other institutional investors that are under the scanner for environmental concerns, but there is also come skepticism on how scalable Ethereum could become and if it becomes more susceptible to attacks by hackers. France is expected to enter a recession next year Barclays is the first major international bank to forecast a recession in France next year (2023 GDP growth at minus 0.7 %). This is highly likely, in our view. But it is certainly too early to assess the depth of the recession at this stage. It will depend on the evolution of the energy crisis and the risk of energy rationing. Forecasting is always a complicated task. This is even more complicated now due to the elevated level of uncertainty regarding the short-term economic path. Expect other European countries to enter a recession next year (the United Kingdom, Germany, Hungary etc.). Earnings to watch Inditex has already reported before the European equity market opens (read earnings review above), so the next earnings release in focus is Adobe tomorrow. Analysts expect revenue growth of 12.6% y/y with operating margin jumping back again following cost reduction exercises. The key risks for Adobe are the strong USD, falling technology spending, and lower advertising growth lowering demand for content creation. Today: Inditex Thursday: Polestar Automotive, Adobe Economic calendar highlights for today (times GMT) 0800 – IEA's monthly Oil Market Report 0900 - Eurozone Jul. Industrial Production 1230 - US Aug. PPI 1230 - Canada Jul. Manufacturing Sales 1430 - US DoE Weekly Crude Oil and Product Inventories 1430 - ECB's Villeroy to speak 2245 - New Zealand Q2 GDP 2350 - Japan Aug. Trade Balance 0120 - China Rate Announcement 0130 - Australia Aug. Employment Data  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher     Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-14-2022-14092022
The Euro May Attempt To Resume An Upward Movement

Despite The Bearish Pressure On The Euro, The EUR/USD Pair Rose

InstaForex Analysis InstaForex Analysis 14.09.2022 09:53
Technical Market Outlook: The EUR/USD pair has hit the 61% Fibonacci retracement level seen at 1.0178, made a marginal high and reversed sharply after a worse than expected US inflation data were published. The intraday technical support is seen at 1.0000 and 0.9934 and this is where the market trades currently. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the longer term down trend is reversed. The weak and negative momentum on the H4 time frame chart supports the short-term bearish outlook for EUR. Please watch the USDX as the correlation between this two is directly opposite. Weekly Pivot Points: WR3 - 1.01483 WR2 - 1.01150 WR1 - 1.01017 Weekly Pivot - 1.00817 WS1 - 1.00684 WS2 - 1.00484 WS3 - 1.00151 Trading Outlook: Despite the recent relief rally towards the short-term support one, the EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292679
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

GBP/USD Pair: What Level Do The Bulls Have To Break To End The Downtrend

InstaForex Analysis InstaForex Analysis 14.09.2022 09:56
Technical Market Outlook: The GBP/USD pair has made a local high at the level of 1.1737, just 20 pips above the key short-term technical resistance level and then the bounce was capped. The market reversed dynamically and the local zone located between the levels of 1.1598 - 1.1622 had been easily violated. The next target for bears is located at the level of 1.1410 again, which is the 7 years low for the GBP. Please keep an eye on the support level, because any violation of this level will have a very drastic consequences, like an accelerated sell-off towards the next technical support. Weekly Pivot Points: WR3 - 1.16716 WR2 - 1.16430 WR1 - 1.16286 Weekly Pivot - 1.16144 WS1 - 1.16000 WS2 - 1.15858 WS3 - 1.15572 Trading Outlook: The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame. The bears tested the level of 1.1410 (2020 swing low) and now the market is in the pull back mode. In order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th).   Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292681
Now you can view Bitcoin and Ethereum (ETH) prices on Twitter

PoS Security Will Continue To Increase, The Ethereum In Downward Trend

InstaForex Analysis InstaForex Analysis 14.09.2022 10:10
Crypto Industry News: In an online interview, a security expert requesting anonymity explained that, unlike Proof-of-Work (PoW) based systems, systems based on Proof-of-Stake (PoS) inform the node validators in advance which blocks they will check, thus enabling them to plan attacks. The cybersecurity expert quoted by the portal is a blockchain developer working on a second layer PoS blockchain. The researcher explained that an exploit could theoretically be more easily exploited in the post-merge chain on the Ethereum network (any unethical or illegal attack that exploits vulnerabilities in an application, network or hardware. Typically an attack is carried out using software or code trying to take control of the system or steal data stored in the network): "If you control two consecutive blocks, you can run an exploit on block N and end it on block N + 1. (...). From an economic security point of view [this vulnerability] makes these attacks relatively easier to carry out." - he said. The expert said that while miners could also check two more blocks on PoW networks, it comes down to "pure luck" and does not give them time to plan an attack. However, he reassured ETH investors by saying: "PoS [still] has sufficient practical security [and] it doesn't really matter that in theory it is not as secure as PoW. It's still a very secure system," he added. In addition, "PoS security will [continue] to increase", as Ethereum developers are working on solutions that will mitigate the above-mentioned threat. The Merge on the Ethereum network is set to take place on September 15 at 2:30 UTC time (according to Blocknative's Ethereum Merge Countdown). The switch to PoS is expected to make the Ethereum network much less energy-intensive. Technical Market Outlook: The ETH/USD pair had reversed from the level of $1,785 aggressively and drop towards the level of $1,552. In this situation, the levels of $1,689 and $1,722 will now act as the technical resistance for bulls. The next target for bears is seen at the level of $1,513 and $1,473. Please notice, the momentum is very weak and negative and the market conditions are now extremely oversold, so an intraday bounce is expected. Weekly Pivot Points: WR3 - $1,875 WR2 - $1,807 WR1 - $1,765 Weekly Pivot - $1,738 WS1 - $1,697 WS2 - $1,670 WS3 - $1,601 Trading Outlook: The Ethereum market has been seen making lower highs and lower low since the swing high was made in the middle of the August at the level of $2,029. If the down move will extend, then the next target for bears is located at the level of $1,358. The key technical support for bulls is seen at $1,281.9 Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292687
The US PCE Data Is Expected To Confirm Another Modest Slowdown

US Inflation Report Disappointed, Eyes On US Producer Price Index

Swissquote Bank Swissquote Bank 14.09.2022 10:18
Ouch! The US inflation data disappointed yesterday, and dashed hopes of seeing a dovish pivot regarding the Federal Reserve (Fed) policy in the foreseeable future. Stock market drops The US 2-year yield spiked more than 5% to 3.80%, the US dollar index jumped 1.50%, and equities slumped. The S&P500 futures fell free as soon as we saw the inflation print come in, and the index closed the session 4.30% lower, having slipped below the 4000 mark. Gold tipped a toe below the $1700 level posterior to the US inflation data and is trying to find ground around this level this morning. Two major catalyzers of the two bullish price actions since summer, recession chatter and softening inflation, have now both fallen. The strong inflation data, which boosted the Fed hawks, also weighed on the global growth prospects sending the barrel of American crude down to $81 first. But oil managed to recover losses on news that the US would refill the Strategic Oil Reserves at prices below $80 per barrel. Expectations for producer price index Later today, the US will reveal the latest producer price index. The PPI is expected to have eased from 9.8% to 8.8% in August. A sufficiently soft figure could spray some water on fire, but will hardly reverse the bad mood. The dollar will likely remain strong, equities, gold and cryptocurrencies will likely remain under pressure until investors find another glimpse of hope, somewhere in the dark. Watch the full episode to find out more! 0:00 Intro0:23 US inflation disappointed3:16 US yields, dollar rallied, equities slumped5:15 Bitcoin, Ethereum under pressure before Merge upgrade6:01 Oil recovered on US will to refill Strategic Reserves6:43 Why both hawkish & dovish Fed expectations are bad for gold?7:30 UK inflation surprised to the downside8:04 EURUSD down, despite good news from Ukraine8:30 Watch US PPI today! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #UK #inflation #USD #EUR #GBP #Gold #XAU #crude #oil #Bitcoin #Ethereum #Merge #update #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Bitcoin Maintains A Steady Bullish Potential

Canada And The Protests, Cryptocurrencies Do Not Protect From Inflation

InstaForex Analysis InstaForex Analysis 14.09.2022 10:04
Crypto Industry News: In a Twitter post, Canadian Prime Minister Justin Trudeau made critical comments about the pro-crypto-platform for newly elected opposition leader Pierre Pollievere, writing: "We will also pay attention to questionable, reckless economic ideas. Telling people that they can get around inflation by investing in cryptocurrencies is not responsible leadership," he writes. In a separate televised speech, Trudeau reiterated these remarks, adding that "responsible leaders" should not encourage individuals to "invest their life savings in volatile cryptocurrencies." On September 10, Calgary-born politician Pierre Pollievere won 68.15% of the vote in the election for the next leader of the Conservative Party of Canada, the official opposition to the current Liberal Party of Justin Trudeau. Pollievere is a cryptocurrency advocate committed to transforming Canada into the "Blockchain Capital of the World", citing the positive outlook for job creation in the Web 3.0 sector and lower cost of accessing financial products as reasons to support this intention. In previous interviews, Pollievere argued that the government was "ruining the Canadian dollar" and that Canadians should consider other forms of money, such as crypto. Earlier this year, Canada declared a state of emergency after a convoy of truck drivers, dubbed the "Freedom Convoy," blocked downtown in the nation's capital, Ottawa. The group has advocated ending all coronavirus-related blocking measures and ending vaccine mandates. In response, the Trudeau government invoked the Crisis Act authorizing banks to freeze funds related to protesters' activities. Then an Ontario judge ordered the freezing of millions of Bitcoin donations to the group's wallet address. The RCMP, the Canadian federal police, also demanded that cryptocurrency exchanges freeze the wallets owned by protesters. In July 2022, inflation in Canada was 7.6%, the highest level in 40 years. Meanwhile, cryptocurrencies have not held up as a 'hedge against inflation' this year, and the overall market capitalization of digital assets has dropped more than 60% since January. Technical Market Outlook: The BTC/USD pair had made the local high at the level of $22,474 and then the market was smashed down after the inflation readings from the US beat the expectations. The Bearish Engulfing candlestick pattern was made at the H4 time frame chart and the bears broken below the $20k for a while. Currently, the market is consolidating around the level of $20,300, but the negative momentum supports the short-term bearish outlook towards the level of $18,640 again. Weekly Pivot Points: WR3 - $23,418 WR2 - $22,624 WR1 - $22,146 Weekly Pivot - $21,821 WS1 - $21,352 WS2 - $21,035 WS3 - $20,241 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292683
In The Coming Days Will Be The Final Consolidation Of Bitcoin

Analytical Look At Bitcoin, A Cryptocurrency With Bearish Potential

InstaForex Analysis InstaForex Analysis 14.09.2022 09:48
Technical analysis: BTC has been trading downside as I expected. The price reached first objective at the price of $21.235 but I see potential for further downside movement towards next reference points. Trading recommendation: BTC is trading flat this morning but I found potential bear flag pattern, which can be very good sign for further downside movement. Watch for the selling opportunities with the downside objectives at the price of $19.590 and $18.500. Stochatic oscillator is showing fresh downside cross from the overbought zone, which can be good sign for the further downside continuation. Key resistance is set at the price of $22.600 Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292677
Bitcoin Is Showing The Potential For The Further Downside Rotation

Predictions Of Bitcoin's Decline Become True

InstaForex Analysis InstaForex Analysis 14.09.2022 09:35
Yesterday, we suggested that bitcoin was about to fall. It turned out to be true, and the digital asset went down already in the middle of the day. Of course, a $2,200 plunge is not significant for the flagship cryptocurrency. The coin is still moving in a sideways channel between $18,500 and $24,350. Therefore, it is too early to say that the trend has resumed. Moreover, jitters were felt across markets yesterday, and they posted significant losses. Nevertheless, bitcoin is still moving below the descending trendline towards the lower limit of the sideways channel. Thus, we may assume that the price will test this mark, rebound four times, and break through it. If our assumptions are accurate, the downtrend will resume, and bitcoin will nosedive to $12,426. Yesterday, all eyes were on the US inflation report, which is now as important as the Federal Reserve's meeting. This is because all the regulator's further decisions on interest rates will be based on inflation results. The figures that came yesterday can be called neither disturbing nor shocking. If inflation accelerated, that would be shocking, whereas if it plunged by over 1%, this would cause turbulence in the market. However, annual inflation actually decreased by 0.2% in August, beating market expectations of a 0.2% rise. That is, nothing extraordinary happened. Still, demand for the dollar mounted yesterday, while risk appetite declined. It is clear why markets rushed to buy out the greenback: the pace of a slowdown in inflation decreased. Therefore, the hawkish Federal Reserve is likely to raise interest rates by 75 basis points at a meeting next week. It is commonly known that bitcoin, the stock market, and risk assets are usually bearish when the US central bank makes hawkish decisions on interest rates. In other words, markets started to price in the future rate decision yesterday. In this light, BTC could extend its fall, and a lot will now depend on the barriers of $18,500 and $17582. In the 24-hour time frame, the quote failed to break through $24,350 and $18,500 (Fibonacci retracement of 127.2%). Generally speaking, bitcoin is likely to trade in the sideways channel, and it remains to be seen for how long. Therefore, it would be wiser to wait for the price to leave the channel and then trade BTC. Should a breakout through $18,500 occur, the quote will head towards $12,426. Signals indicating a rebound from the trendline or upper/lower limit of the channel can be used as well. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade     Relevance up to 06:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321626
Check EUR To USD Chart! US Dollar Increased Amid The US Inflation Data

Check EUR To USD Chart! US Dollar Increased Amid The US Inflation Data

Jing Ren Jing Ren 14.09.2022 08:22
EURUSD seeks support The US dollar surged after consumer prices rose faster than expected last month. The euro’s rally came to a halt in the supply zone around 1.0190, then a fall below 1.0090 forced leveraged short-term long positions to close out. After the RSI sank into oversold territory, some traders could be tempted to buy the dip between 0.9950 and the parity level. 0.9870 is a critical floor and its breach would invalidate the current rebound and send the single currency below 0.9800. On the upside, 1.0090 has turned into a resistance. XAUUSD tests key support Gold tumbled after hotter US inflation propelled the greenback across the board. The precious metal has been grinding its way up after it stabilised next to the major support 1690. Though it gave up its latest gains and came to a rest on the psychological tag of 1700. The price action is now at a crossroads. A lack of follow-up bids could shift the direction to the sell side. A drop below 1690 might seal its fate and cause an extended sell-off. 1713 is the first hurdle and the bulls need to clear 1730 before they can regain control. UK 100 hits major resistance Global equities tumbled after being wrongfooted by inflation data. The FTSE 100 had recouped most of the losses from the mid-August liquidation but turned south near the previous peak at 7570. Strong selling below 7370 forced more buyers to bail out. 7270 at the origin of a bullish breakout is a key level to see whether there is strong enough interest in keeping the rebound intact. Or 7180 could be the last level to keep the index afloat. 7380 is the first resistance as an oversold RSI may cause a limited bounce.
The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

The Pound Is Weak And The GBP/USD Pair Has Reacted To The US Inflation Report

InstaForex Analysis InstaForex Analysis 14.09.2022 10:42
Only a few market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1706 level in my morning forecast and advised making decisions on entering the market from it. A breakthrough of 1.1706 and the reverse test from the top down created several good long entry points as the bull market continued to develop. In total, the pound managed to demonstrate growth by only 30 points, after which the pair collapsed due to rising inflation in the United States. I did not wait for the normal entry points in the afternoon. When to go long on GBP/USD: Obviously, the pound continues to experience weakness even despite the stable situation in the labor market, which only accelerates inflationary pressures. Yesterday's US inflation report led to the pound's collapse, which I warned about in my forecast. The apparent rise in the US consumer price index will force the Federal Reserve to continue to act aggressively by raising interest rates - September's increase of 0.75% at once is already a done deal. It is very important how the committee will show itself further and what plans will be outlined for the pace of raising interest rates in the US until the end of the year. An equally important inflation report in the UK is expected today, which could put even more pressure on the pound, as its growth will force the Bank of England to raise interest rates, pushing the economy even further into recession. For this reason, I advise bulls to focus on the immediate resistance at 1.1509, formed on yesterday's basis. I do not count on this level much, but in case GBP/USD falls in the morning, forming a false breakout at 1.1509 will provide a signal to buy the pound against the bearish market with the goal of recovering to 1.1561. A breakthrough and test from top to bottom of this range may pull stop orders of speculative bears, which creates a new buy signal with growth to a more distant level of 1.1604, where moving averages play on the bears' side. The farthest target will be the area of 1.1660, where I recommend taking profits. In case the GBP/USD falls and there are no bulls at 1.1509, the pressure on the pair will return, which will open up the prospect of updating the September low. In this case, I advise you to postpone long positions until the next support at 1.1463. I recommend opening longs on GBP/USD immediately for a rebound from 1.1406, or even lower - around 1.1358, counting on correcting 30-35 points within the day. When to go short on GBP/USD: The bears have regained control of the market and now it is very important to cling to the nearest support at 1.1509, and also not to release the pair above 1.1561. The optimal scenario for opening short positions on GBP/USD would be forming a false breakout in the area of 1.1561, growth to which may occur after the release of a number of fundamental statistics on the UK. Only this will lead to a sell signal with the goal of returning to the area of 1.1509 - an intermediate support level formed yesterday. In order to keep the initiative, the bears need a breakdown and a reverse test of this range, which will provide a new entry point for shorts with a fall to the level of 1.1463. The farthest target will be the area of 1.1406, where I recommend taking profits. In case GBP/USD grows and the bears are not active at 1.1561, the growth of the pound may intensify, which creates a chance for an upward correction. Only a false breakout near the next resistance at 1.1604 will provide an entry point to shorts with the goal of a slight downward movement of the pair. If there is no activity there, I advise you to sell GBP/USD immediately for a rebound from 1.1660, counting on the pair's rebound down by 30-35 points within the day. COT report: An increase in short positions and a decrease in long ones were recorded in the Commitment of Traders (COT) report for September 6. This once again confirms the fact that the British pound is in a major downward peak, from which it is not as easy to get out as it might seem. Last week, Bank of England Governor Andrew Bailey made a speech, who did his best to inspire confidence that the central bank will continue to follow the path of defeating inflation and continue to aggressively raise interest rates. This suggests that at its next meeting the committee will probably raise rates by 0.75% at once, following the example of other central banks. However, the UK economy is getting worse and worse, and GDP is shrinking quite quickly, as evidenced by recent reports, which does not give confidence to investors. With high inflation and a looming cost-of-living crisis in the UK, it will be quite difficult for bulls to get room to take long positions as nothing good is in store for the stats ahead. The latest COT report indicated that long non-commercial positions decreased by 5,746 to 52,731, while short non-commercial positions rose by 15,516 to 103,163, which led to an increase in the negative value of the non-commercial net position to -50,423 versus -29 170. The weekly closing price collapsed from 1.1526 against 1.1661. Indicator signals: Trading is below the 30 and 50-day moving averages, indicating a resumption of the bear market. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair falls, the lower border of the indicator around 1.1410 will act as support. In case of growth, the upper border of the indicator around 1.1604 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders. Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321634
Gold Has A Chance For The Rejection Of The Support

The Gold With Further Strong Downside Momentum

InstaForex Analysis InstaForex Analysis 14.09.2022 11:03
Technical analysis: Gold has been trading downside as I expected. The price reached first objective at the price of $1.712 but I see potential for further downside movement towards next reference points. Trading recommendation: Gold is trading flat this morning but I found potential bear flag pattern, which can be very good sign for further downside movement. Watch for the selling opportunities with the downside objectives at the price of $1.690 and $1.680 MACD oscillator is showing downside reading, which is good sign that downside momentum is strong. Key resistance is set at the price of $1.730 Read more: https://www.instaforex.eu/forex_analysis/292691   Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292691
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

The US Dollar To Yen (USD/JPY) With Potential For The Upside During The Day

InstaForex Analysis InstaForex Analysis 14.09.2022 11:11
Technical analysis: USD/JPY has been trading uspide as I expected. The price reached first objective at the price of 144.95 but I see potential for further upside movement towards next reference points. Trading recommendation: USD/JPY is trading downside this morning but I see potential for the upside continuation later during the day. Watch for the buying opportunities on the dips with the upside objective at the price of 146.90. MACD oscillator is showing upside reading, which is good sign that upside momentum is strong. Key support is set at the price of 141.55   Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292697
Chinese Stocks: Attractive Valuations Amidst Challenges and a Cyclical Recovery - 12.09.2023

Wow! S&P 500 (SPX) And Nasdaq Plunged Yesterday! Euro, Australian Dollar And Japanese Yen Hit Quite Low Levels

ING Economics ING Economics 14.09.2022 11:08
Asian markets to face a sharp drop after the inflation-driven rout in the US overnight  Source: shutterstock Macro outlook Global markets: US CPI data caught markets completely off guard, though in all fairness, there had been a lot of complacency about a figure that was only going to fall because of the volatility in energy markets. What made that US inflation print a much uglier one than forecast, was a much bigger than expected 0.6%MoM increase in the core CPI index, which took core inflation to 6.3%YoY. Core inflation was expected to rise, but not that much. And that upside surprise from core prices totally absorbed any downshift from lower crude oil prices, which resulted in the headline CPI index actually rising slightly on the month, resulting in only a very small decline in headline inflation to 8.3% from 8.5%YoY. See here for our US economist’s views on the figures. The S&P500 gapped lower and ended down 4.32% on the day. The NASDAQ fared even worse, dropping 5.16%. Equity futures suggest that the rout stops here. I’m not sure I would put a big bet on that outcome. Yields on 2Y US Treasuries rose 18.5bp to 3.756%, while those on the 10Y rose a more modest 5bp to 3.4% but are now closing in on the June highs. Here is a piece by our head of rates strategy on whether the 10Y yield could hit 4%. The EUR didn’t hold above parity for very long and is back down to 0.9972. The AUD, which had been nibbling at 0.69 is now back to 0.6733, and the GBP is also down back below 1.15, while the JPY will give the BoJ renewed headaches as it rises above 144.60.  All of this adjustment is yet to come for most of the Asia pack, and sharp falls are to be expected once markets begin trading. G-7 Macro: We have already outlined above the main macro driver – namely higher than expected US core and headline inflation numbers. Today’s US PPI inflation data won’t do much to affect the market’s reaction to those figures. UK CPI inflation data for August is also expected to remain above 10% today, which will encourage the Bank of England to keep hiking. India: Trade data for August could show a slight narrowing in the trade balance which clocked up a $29bn deficit in July. Lower crude oil prices, which account for much of the deficit, and a slightly weaker domestic demand outlook should bring imports down. That said, with the external environment looking increasingly challenged, we don’t expect much help to come from the export side. What to look out for: China activity data Japan industrial production and core machine orders (14 September) Hong Kong PPI and industrial production (14 September) US PPI inflation (14 September) Japan trade balance (15 September) Australia labour market data (15 September) US initial jobless claims and retail sales (15 September) South Korea unemployment (16 September) Singapore NODX (16 September) China industrial production, retail sales and fixed asset (16 September) US University of Michigan expectations (16 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

How The EUR/USD Market Will React To Today's Economic Events

InstaForex Analysis InstaForex Analysis 14.09.2022 11:17
Analysis of transactions in the EUR / USD pair Euro tested 1.0160 at the time when the MACD was far from zero, which limited the upside potential of the pair. Sometime later, it tested 1.0125, but this time the MACD line was just starting to move below zero, which was a good signal to sell. This resulted to a price decrease of more than 130 pips. CPI and business sentiment in Germany came out almost the same as the forecasts, so it did not particularly disappointed traders. Then, in the afternoon, CPI in the US was released, which rose 8.3% y/y, maintaining price pressure at highs over the past 40 years. Such data is likely to force the Fed to continue aggressively raising rates, which will strengthen dollar. Today, a report on the volume of industrial production in the eurozone will come out, but it will be of little interest to the market. Attention will be paid to the speeches of ECB representatives instead, as their comments, although unlikely to return bullish sentiment, could at least limit temporarily the further fall of euro. In the afternoon, the US will release data on producer prices, which will likely turn out to be worse than expected. This will lead to a new wave of decline in EUR/USD. For long positions: Buy euro when the quote reaches 1.0003 (green line on the chart) and take profit at the price of 1.0040. Although there is little chance for growth today, traders can still open long positions when the MACD line is above zero or is starting to rise from it. Euro can also be bought at 0.9974, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0003 and 1.0040. For short positions: Sell euro when the quote reaches 0.9974 (red line on the chart) and take profit at the price of 0.9904. Pressure will intensify if statistics from the US are disappointing. Also, take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can be sold at 1.0003, but the MACD line should be in the overbought area as only by that will the market reverse to 0.9974 and 0.9904. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.     Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321640
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

GBP/USD Pair: The Pressure On The Pound To US Dollar Pair Returns And Falls Again

InstaForex Analysis InstaForex Analysis 14.09.2022 11:25
Analysis of transactions in the GBP / USD pair Pound tested 1.1728 at a time when the MACD line was far from zero, which limited the upside potential of the pair. Sometime later, it tested 1.1682, but this time the MACD line was just starting to move below zero, which was a good signal to sell. This resulted to a price decrease of more than more than 160 pips. GBP/USD rose on Tuesday morning, thanks to the strong report on the UK labor market. However, the situation reversed in the afternoon, immediately after the release of latest US statistics. Data on the UK consumer price index will be released today, and this could seriously affect the direction of pound in the market. Most likely, a further rise in inflation will result in further pressure in GBP/USD, which will lead to a new fall and return to monthly lows. The report on the UK house price index will be of little interest. In the afternoon, the US will release data on producer prices, which will likely be worse than expected. This will result in a new wave of decline in the pair. For long positions: Buy pound when the quote reaches 1.1533 (green line on the chart) and take profit at the price of 1.1582 (thicker green line on the chart). However, there is little chance for growth today, even in the event of a decrease in inflation in the UK. Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1488, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1533 and 1.1582. For short positions: Sell pound when the quote reaches 1.1488 (red line on the chart) and take profit at the price of 1.1411. Pressure is likely to continue after the inflation reports in the UK and the US. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1533, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1488 and 1.1411. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321642
EUR/USD Pair Has Potential For The Downside Movement Today

The Euro To The US Dollar Pair Waiting For Upward Movement

InstaForex Analysis InstaForex Analysis 14.09.2022 11:32
Trend analysis (Fig. 1). The euro-dollar pair may move upward from the level of 0.9966 (close of yesterday's daily candle) to the target of 1.0056, the 38.8% retracement level (white dotted line). When testing this level, a downward price movement is possible with the target of 1.0030, the 50.0% retracement level (red dotted line). After reaching this level, the price may move up with the target of 1.0116, the 50.0% retracement level (white dotted line). Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – down; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today the price may move upward from the level of 0.9966 (close of yesterday's daily candle) to the target of 1.0056, the 38.8% retracement level (white dotted line). When testing this level, a downward price movement is possible with the target of 1.0030, the 50.0% retracement level (red dotted line). After reaching this level, the price may move up with the target of 1.0116, the 50.0% retracement level (white dotted line). Alternative scenario: from the level of 0.9966 (close of yesterday's daily candle), the price may move downward with the target of 0.9942, the 76.4% retracement level (red dotted line). After testing this level, an upward movement is possible to test 1.0056, the 38.2% retracement level (white dotted line).     Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321628
The Pound (GBP) Will Probably Continue To Move Sideways

GBP/USD Pair: Further Upward Movement Is Possible While Testing The Level

InstaForex Analysis InstaForex Analysis 14.09.2022 11:39
Trend analysis (Fig. 1). The pound-dollar pair may move upward from the level of 1.1489 (close of yesterday's daily candle) to 1.1614, the 23.6% retracement level (blue dotted line). When testing this level, continued upward movement is possible to 1.1743, the 38.2% retracement level (blue dotted line). In the case of testing this level, the price may move downwards with the target of 1.1687, the 14.6% retracement level (yellow dotted line). Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Weekly chart – up; Bollinger bands – down. General conclusion: Today the price may move upward from the level of 1.1489 (close of yesterday's daily candle) to 1.1614, the 23.6% retracement level (blue dotted line). When testing this level, continued upward movement is possible to 1.1743, the 38.2% retracement level (blue dotted line). In the case of testing this level, the price may move downwards with the target of 1.1687, the 14.6% retracement level (yellow dotted line). Alternative scenario: from the level of 1.1489 (close of yesterday's daily candle), the price may move upward to 1.1534, the 14.6% retracement level (blue dotted line). In the case of testing this level, a downward movement is possible with the target of 1.1404, the lower fractal (yellow dotted line). When testing this level, the price may move up. Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321636
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Will The Bears Regain Their Dominance In The EUR/USD And The GBP/USD?

InstaForex Analysis InstaForex Analysis 14.09.2022 11:44
EUR/USD Higher timeframes Testing of the weekly trend line and the reinforced resistance zone turned into a rebound formation yesterday. Bears regained their positions, recovering most of the current corrective rise. If the mood persists and the bearish sentiment continues to strengthen, then the bears, updating the minimum extremum (0.9864), will try to restore the downward trend. The attraction is currently exerted by the area of the psychological level of 1.0000. The most important resistance is still the zone 1.0116 – 1.0176 – 1.0203 (daily cross + lower border of the daily cloud + weekly short-term trend + trend line). H4 – H1 Bulls lost their advantage yesterday as the opponent managed to organize a decline below the key levels of the lower timeframes. Key levels are holding the line today, consolidating around 1.0040 (central pivot point + weekly long-term trend). Reference points for further decline within the day are now at 0.9894 – 0.9819 – 0.9673 (classic pivot points). *** GBP/USD Higher timeframes Bears dominated the market yesterday. They realized a rebound upon meeting the daily resistance (1.1737). After that, the main task for the bears is to break through the historical support (1.1411) and restore the downward trend. Next, the focus will be on lowering and testing the psychological barrier of 1.0000. If there is a slowdown now, the daily short-term trend (1.1570) may become the center of attraction and consolidation. H4 – H1 As a result of the pair's return to the key levels, the advantage of the lower timeframes again shifted to the side of the bears. Today, the key levels are resistances and are located at the turn of 1.1573 (central pivot point + weekly long-term trend). The reference points for continuing the decline within the day are the support of the classic pivot points at 1.1405 – 1.1322 – 1.1156. *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)       Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321644
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

As A Result Of The Fight Against Inflation, The Appetite For Risk Has Decreased

InstaForex Analysis InstaForex Analysis 14.09.2022 11:59
Euro and pound collapsed as inflationary pressure in the US jumped again. Risk appetite noticeably fell because the Federal Reserve is likely to continue its aggressive increase of interest rates in order to curb inflation. This may occur as early as next week, during the September meeting of the central bank. In fact, in the most recent speech of Fed Chairman Jerome Powell, another 75 basis point rate hike is said to be possible, following the increases in June and July. He said the decision will depend on the data collected. Chicago Fed chief Charles Evans, who in the past has been dovish, also noted that a soft landing could be achieved for the economy without triggering a recession. He reasoned that unemployment is now 3.7%, so the central bank will be able to meet the targets and keep it at about 4.5% by the time the fight against high inflation is finished. He added that the danger of excessive tightening of policy will increase only when rates reach 3.5%. Of course, rising inflation is not only a concern for the Federal Reserve, but also for the Biden administration as his Democratic Party moves closer to the midterm congressional elections. High gas and food prices earlier in the year have seriously undermined the president's popularity and the Democrats' prospects for maintaining control of Congress. Talking about the forex market, a collapse was seen in EUR/USD, which forces buyers to cling to 1.0010. Only its breakdown will lead to a rise towards 1.0040 and 1.0090, or to 1.0120. In case of a further decline, sellers will become more active in the market, which will result in a price decrease towards 0.9880 and 0.9810. In terms of GBP/USD, quotes fell below the 15th figure, indicating the sellers'persistence to return to the September lows. Only the return to 1.1560 will prompt a rebound towards 1.1610 and 1.1660, or possibly 1.1720. If pressure continues, the pair will drop below 1.1460 and head towards 1.1405.     Relevance up to 09:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321656
Gold Is Showing A Good Sign For Further Drop

The Gold (XAU/USD) Has The Wrost Conditions, The Bulls Can Show Weakness

InstaForex Analysis InstaForex Analysis 14.09.2022 12:17
The "believe it or not" game ended badly for most financial assets, which turned a blind eye to the "hawkish" rhetoric of Fed officials. Yes, most of them did not indicate how much the Central Bank is going to raise the federal funds rate in September, by 50 or 75 bps, but the words that the work has not been done yet deserve attention. Stock markets and gold did not believe the Fed and paid the price. Only the Treasury market turned out to be right—the Fed does not throw words into the wind. The slowdown in consumer prices from 8.5% to 8.3% in August was more modest than the 8% predicted by Bloomberg experts. Core inflation, on the other hand, accelerated faster than their estimates, which was the main driver of the worst peak in XAUSD since mid-August. Then, too, the inflation data knocked out the bulls. History doesn't repeat itself, it rhymes. The slowdown in inflation expectations from the New York Federal Reserve for the coming year from 6.2% to 5.7%, for three years from 3.2% to 2.8% and for five years from 2.3% to 2%, coupled with an increase in nominal rates on US Treasury bonds, lead to an increase in real yields to the maximum levels from 2018. Dynamics of real yields of US bonds If four years ago, after several increases in the federal funds rate, the Fed found financial conditions too tight and marked a dovish turn, now it will not do this. "Don't let inflation fool you," FOMC member Christopher Waller said ahead of the CPI data release. In order to reset the rate of monetary restriction, several reports are required to convince the underlying indicator to confidently head towards the 2% target. The August statistics show the opposite. High inflation is taking hold in the US economy, requiring new firepower from the Fed. CME derivatives give a 35% chance of a 100 bps increase in the federal funds rate in September, finally discarding the idea of 50+ bps. The market believes borrowing costs will rise to 4.3% in early 2023. The 4.5% level, which previously seemed unrealistic, is now widely discussed among investors. Previous FOMC forecasts included 3.8% at the end of 2022, but it is likely to rise in September, which will be good news for the US dollar and bad news for gold. The Fed's aggressive monetary tightening, leapfrogging nominal and real Treasury yields, and the USD index near 20-year highs are the worst environment imaginable for XAUUSD. The inability of the precious metal to cling to $1,700 an ounce will be evidence of the weakness of the bulls and will open the way for it in the direction of $1,600. Technically, on the daily chart, quotes for the third time in a row over the past couple of weeks have approached the lower limit of the fair value range of $1,692–1,754 per ounce. A break of support at $1,692 will increase the risks of implementing the target by 161.8% according to the AB=CD pattern and will become the basis for building up previously formed shorts.   Relevance up to 09:00 2022-09-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321660
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

USD/CAD: Crude Oil Supports Canadian Dollar, USD Is Ahead Of Even 100bp Rate Hike

TeleTrade Comments TeleTrade Comments 14.09.2022 12:21
USD/CAD retreats from one-week high amid weaker USD, downside seems cushioned USD/CAD surrenders modest intraday gains to the 1.3200 neighbourhood, or a one-week high. A positive risk tone weighs on the safe-haven greenback and exerts some downward pressure. Aggressive Fed rate hike bets and recession fears warrant caution for aggressive bearish traders. The USD/CAD pair struggles to capitalize on its intraday positive move to a one-week high set earlier this Wednesday and retreats to the 1.3160-1.3165 area during the first half of the European session. The pullback is sponsored by a modest US dollar weakness, though the fundamental backdrop supports prospects for the emergence of some dip-buying. Crude Oil Price And CAD A recovery in the global risk sentiment - as depicted by a generally positive tone around the equity markets - seems to weigh on the safe-haven greenback. Apart from this, an intraday bounce in crude oil prices underpins the commodity-linked loonie and exerts some downward pressure on the USD/CAD pair. That said, growing acceptance that the Fed will stick to its aggressive policy tightening path to tame inflation should continue to act as a tailwind for the buck. Investors started pricing in the possibility of a full 1% rate hike at the next FOMC policy meeting on September 20-21 following the release of stronger US consumer inflation data on Tuesday. This is reinforced by a fresh leg up in the US Treasury bond yields. In fact, the yield on rate-sensitive two-year US government bonds climbs to an almost 15-year high and the benchmark 10-year US Treasury note holds steady just below the YTD peak touched in June. Global Recession The prospects for faster rate hikes by the US central bank, along with economic headwinds stemming from fresh COVID-19 curbs in China, have raised concerns about a global recession. Concerns that a deeper economic downturn will dent fuel demand should keep a lid on oil prices, which, in turn, should weigh on the Canadian dollar and offer support to the USD/CAD pair. Hence, it will be prudent to wait for strong follow-through buying before confirming that the previous day's solid recovery of over 200 pips from the vicinity of mid-1.2900s has run out of steam. Market participants now look forward to the US Producer Price Index (PPI), which, along with the US bond yields and the broader risk sentiment, will influence the USD. Apart from this, traders will also take cues from oil price dynamics to grab short-term opportunities around the USD/CAD pair. Nevertheless, the bias still seems tilted firmly in favour of bullish traders and any intraday downfall is more likely to remain limited. Bulls, however, might wait for sustained strength beyond the 1.3200 mark before positioning for further gains. Technical levels to watch
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

The Currency Market Is Getting Ready For A Recovery

InstaForex Analysis InstaForex Analysis 14.09.2022 12:24
Markets collapsed on Tuesday after the release of consumer inflation data in the US. The report has indicated that inflation increased by 0.1% m/m and 8.3% y/y in August, instead of a decline that economists have been expecting. Of course, traders reacted negatively to the news, primarily because it is likely that the Fed will continue raising rates aggressively in order to curb high inflation. But if the figure declines, albeit gradually, the Fed may consider not a 0.75% rate hike, but a 0.50%. That would return risk appetite and lead to a decrease in both Treasury yields and dollar. So, positive market sentiment will return, perhaps starting today as an upward movement is seen in European and US stock indices. A rebound is also brewing in the forex market, prompted by the slight weakening of dollar. That being said, attention should be paid to the data on manufacturing inflation in the US as a slowdown will increase positive market sentiment. Forecasts for today: AUD/USD The pair is trading below 0.6725. If negative trends continue in the markets, the quote will continue to decline towards 0.6685. EUR/USD The pair is consolidating above 0.9965. Further buying pressure will push it to 1.0100. Relevance up to 08:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321648
Inflation Rising Again In The Eurozone, Positive GDP In The Great Britain

The ECB's Comment On Interest Rates Revived The EUR/USD Pair

TeleTrade Comments TeleTrade Comments 14.09.2022 12:43
ECB's Herodotou: No forgone conclusion on final level of interest rate   The European Central Bank's (ECB) latest decision to hike the key rates does not mean there has been a forgone conclusion on the final level of interest rate, ECB policymaker Constantinos Herodotou said on Wednesday, as reported by Reuters. Market reaction EUR/USD preserves its recovery momentum following these comments. As of writing, the pair was trading at 1.0015, where it was up 0.5% on a daily basis. Meanwhile, the Euro Stoxx 600 Index is down 0.4% on the day, pointing to a cautious market mood.
The USD/JPY Price Seems To Be Optimistic

The USD/JPY Pair Retreated From The High, Awaiting For PPI Report

TeleTrade Comments TeleTrade Comments 14.09.2022 12:52
USD/JPY flirts with daily low, around 143.00 mark amid chances of BoJ intervention   USD/JPY meets with a fresh supply and retreats sharply from the 145.00 neighbourhood. Jawboning by Japanese authorities points to an imminent intervention and boosts the JPY. The emergence of some selling around the USD also contributes to the intraday downfall. The USD/JPY pair faces rejection near the 145.00 psychological mark and retreats from the vicinity of a 24-year high retested earlier this Wednesday. The downward trajectory extends through the first half of the European session, though the pair manages to rebound a few pips from the daily low and is currently placed just above the 143.00 mark. A combination of factors fails to assist the USD/JPY pair to capitalize on the previous day's post-US CPI strong rally of over 300 pips. The Japanese yen strengthens across the board amid jawboning by Japanese officials and chances that the Bank of Japan (BoJ) may step in to arrest a freefall in the domestic currency. This, along with the emergence of some US dollar selling, exerts downward pressure on the major. That said, a recovery in the global risk sentiment - as depicted by a generally positive tone around the equity markets - could cap gains for the safe-haven JPY. Apart from this, a big divergence in the monetary policy stance adopted by the Japanese central bank and the Federal Reserve supports prospects for the emergence of some dip-buying around the USD/JPY pair. The BoJ remains committed to continuing with its monetary easing. In contrast, the US central bank is expected to keep raising interest rates at a faster pace to tame inflation. The bets were reaffirmed by the stronger US CPI report on Tuesday. The markets quickly started pricing in the possibility of a full 1% rate hike at the next FOMC meeting on September 20-21. This is evident from a fresh leg up in the US Treasury bond yields, which favours the USD bulls and should lend support to the USD/JPY pair. Nevertheless, the fundamental backdrop remains tilted firmly in favour of bullish traders. Hence, any subsequent decline could still be seen as a buying opportunity and remain limited. Market participants now look forward to the US Producer Price Index (PPI), due for release later during the early North American session. Apart from this, the US bond yields and the broader risk sentiment should provide some impetus to the USD/JPY pair.
The Outlook Of Gold By FXSTreet’s Dhwani Mehta

There Is An Opportunity To Sell Gold After Its Prices Dropped

InstaForex Analysis InstaForex Analysis 14.09.2022 13:00
Gold prices fell after the latest inflation report in the US indicated another increase in the figure. To those who did not have time to sell the metal, there is still a chance to do so as prices are likely to decline further. The previous movements have formed a three-wave pattern (ABC), where wave A represents the selling pressure yesterday. Traders may take this as basis when entering the market, selling up to the 61.8% and 50% retracement levels. Stop loss could be set at 17300, then exit the market on the breakdown of 1688 and 1675. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 10:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321672
FXStreet’s Dhwani Mehta Opinion About Gold Movements

The Gold Market Is Volatile, There Are Two Possible Developments

InstaForex Analysis InstaForex Analysis 14.09.2022 13:08
Gold: The chart shows the movement of gold in the 30-minute chart. The previous analysis suggested further price growth in the medium term. However, the market is clearly volatile, as indicated by the nodes in the area of $1700.00 - $1704.00. Considering that the key support level is the sloping line (blue) at $1694.00, there are two possible developments in gold. First is a rise towards the resistance level of $1713.00 after the test of $1700. In case of a breakdown, quotes will head towards $1728.00. The second is the breakdown of the key support level of $1694.00. Good luck!   Relevance up to 10:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321674
Analysis Of The AUD/JPY Currency Pair Scenarios

Report Results And Their Impact On The Market And Decisions Of The Fed And Bank Of Japan

Saxo Bank Saxo Bank 14.09.2022 13:28
Summary:  The core US August inflation data shocked the market as prices reportedly rose at twice the expected rate in August at the core. This triggered a massive spike back higher in the US dollar, with the market caught on the wrong foot and suddenly forced to entertain the risk of a 100 basis point rate hike from the Fed at next week’s FOMC meeting. Overnight, the Bank of Japan and Japanese Ministry of Finance upped the ante on intervention risks, tempering the rise in USDJPY. FX Trading focus: Core CPI shocker from the US resets the USD. Beware the BoJ. The headline US CPI data came in slightly above expectations, with a year-on-year reading of 8.3% vs. 8.1% expected and a month-on-month reading of +0.1% vs. -0.1% expected, the latter a solid surprise given sharp drops of late in gasoline prices. But the real shock was the core Ex Food and Energy inflation reading of +0.6% month-on-month, twice what was expected. This triggered an enormous slide in risk sentiment as the market rushed to price the risk that the FOMC might hike as much as 100 basis points next week. As of this morning, nearly 85 basis points of tightening are priced in the market for next meeting. The Fed doesn’t like to surprise the market, so if that builds a bit higher rather than receding back closer to 75 basis points on its own accord by early next week, the Fed will need to send out the WSJ’s Timiraos to pen an article guiding for 75 basis points if it wants to avoid shocking the market. There are a number of good reasons that the market was looking for a softer print yesterday, and this one data point is not enough to suggest that inflation will continue at the run-rate suggested by the August CPI data point, but as is readily evident, it had changed the odds on the size of next week’s hike, the guidance in the wake of that hike in terms of the monetary policy statement and the Fed’s own macro-economic projections. To get follow-on USD strength here, the next data points of note are tomorrow’s US August Retail Sales and weekly US initial jobless claims. I lean for the risk of a stronger than expected Retail Sales data point due to the psychological boost of gasoline prices having dropped so precipitously from their June highs and as millions of US consumers saw their student debt loads drastically reduced by the Inflation Reduction Act that was passed mid-month. As for the weekly claims, these seem to be in a new declining trend after rising into the early summer period from record lows (adjusted for population) earlier in the year. The Bank of Japan and Japanese Ministry of Finance, as I discuss below, may make life difficult for FX traders. Chart: AUDUSDInteresting to note that the USD reaction was most violent against some of the traditional risk-correlated currencies like AUD and NZD, with AUDUSD suddenly poking down close to cycle lows this morning, or at least below the lowest daily close of the cycle at one point this morning. To get new lows, we’d likely need to see the weak risk sentiment persisting her and a test of the June market lows, together perhaps with the Fed delivering a 100 basis point hike next week and US 10-year yields moving above the 3.50% cycle high from June (this morning trading at3.43%.) The recent price action cemented the 0.6900+ area pivot high as the key tactical resistance of note. Australia reports employment data tonight. The Bank of Japan carried out a “rate check” in the FX market, which is widely seen as a precursor for actual market intervention. This tamed the USDJPY move higher from sub-142.00 levels to nearly 145, as the gains were pared back below even 143.00 this morning, with the JPY also firmer broadly. Finance Minister Suzuki said nothing could be ruled out in response to the weakening JPY and that if the current trend persisted, stepping into markets is an option. But as past experience has shown, intervention often only creates temporary volatility if the underlying issue is not addressed - in this case, the Bank of Japan's insistence on maintaining very low rates and capping yields out to 10 years. If yields continue to rise globally, Japanese officialdom will have an enormous and likely unwinnable fight on its hands if the Bank of Japan fails to change its policy. In the meantime, history shows that determined intervention can make for very choppy markets, even for other USD pairs as USDJPY volatility spikes back and forth. Table: FX Board of G10 and CNH trend evolution and strength.The USD has leaped back higher – watching for the degree to which the price holds and follows through if the 100 basis point FOMC move scenario next week solidifies amidst a supporting cast of data. Note the marked NOK weakening, a theme discussed yesterday. And note the CHF Strength – an interesting test for the EURCHF pair next week over the SNB meeting, given EU plans to cap energy prices as the pair trades near multi-year lows. Will there be a bit more caution from the SNB than before? Table: FX Board Trend Scoreboard for individual pairs.We noted many pivotal USD pairs yesterday: well the USD provided a pivot and then some yesterday – now about seeing whether the action remains choppy a la USDJPY or reasonably smooth new USD trend can develop. Note USDNOK trading up against a big resistance line, NZDUSD toying with 0.6000 this morning and AUDUSD not far from the cycle lows, while USDCAD has poked near the cycle top. Also, very interesting signs of possible exhaustion of weak GBP sentiment as the currency is rolling higher against a growing cast of the smaller G10 currencies (GBPNOK, GBPNZD, GBPAUD on the cusp, etc.) Upcoming Economic Calendar Highlights 1230 - US Aug. PPI  1230 - Canada Jul. Manufacturing Sales 1430 - ECB's Villeroy to speak 2245 - New Zealand Q2 GDP 2350 - Japan Aug. Trade Balance 0120 - China Rate Announcement 0130 - Australia Aug. Employment Data Source: https://www.home.saxo/content/articles/forex/fx-update-us-august-cpi-triggers-a-landslide-beware-the-boj-14092022  
The USD/JPY Price Seems To Be Optimistic

US Dollar To Yen (USD/JPY): The Continuation Of The Decline

TeleTrade Comments TeleTrade Comments 14.09.2022 14:16
EUR/JPY Price Analysis: Further downside not ruled out   EUR/JPY adds to Tuesday’s pullback below the 143.00 yardstick. The 138.80 region should offer decent support near term. EUR/JPY extends the corrective downside for the second session in a row and breaches the 143.00 mark on Wednesday. The ongoing knee-jerk is not surprising considering the bearish divergence in the daily RSI. That said, the continuation of the decline could extend to the 138.80 zone, where the 55- and 100-day SMAs coincide. In the meantime, while above the 200-day SMA at 135.08, the prospects for the pair should remain constructive. EUR/JPY daily chart
The Silver Might Then Extend The Recent Pullback

The White Metal (Silver) Began To Move Towards The Bull

TeleTrade Comments TeleTrade Comments 14.09.2022 14:20
Silver regains positive traction on Wednesday and recovers a part of the overnight decline. The emergence of dip-buying favours bullish traders and supports prospects for further gains. A convincing break through a multi-month descending trend-line will reaffirm the positive bias. Silver attracts some buying near the $19.25 region, or the 50-day SMA support on Wednesday and reverses a part of the overnight retracement slide from a nearly four-week high. The white metal maintains its bid tone through the first half of the European session and is currently placed just above the mid-$19.00s. From a technical perspective, the recent recovery from the $17.55 area, or over a two-year low, stalled on Tuesday near a descending trend-line resistance. The said barrier, currently pegged near the $20.00 psychological mark, extends from May monthly swing high and should act as a pivotal point. A convincing breakthrough will be seen as a fresh trigger for bulls and set the stage for additional gains. Given that technical indicators on the daily chart have just started moving in the bullish territory, the XAG/USD might then climb to test the 100-day SMA, near the $20.45 region. Some follow-through buying should allow spot prices to aim back to reclaiming the $21.00 round-figure mark. The momentum could get further get extended towards the next relevant hurdle, around the $21.50 area. On the flip side, the 19.25 region (50 DMA) seems to have emerged as an immediate strong support. This is closely followed by the $19.00 mark, which if broken might trigger some technical selling around the XAG/USD. The subsequent downfall, however, could still be seen as a buying opportunity and remain limited near the $18.45-$18.40 support zone, which should act as a strong base for the metal. Silver daily chart
Oanda Podcast: US Jobs Report, SVB Financial Fallout And More

US Dollar Index's Bullish View Remains Unchanged

TeleTrade Comments TeleTrade Comments 14.09.2022 14:25
DXY trims part of Tuesday’s intense advance above 110.00. Further bouts of strength could see the dollar retest yearly highs. DXY gives away some gains following the post-CPI sharp upside to the 110.00 region on Wednesday. Despite the ongoing knee-jerk in the dollar, its short-term bullish view remains unchanged while above the 7-month support line around 106.30. If sellers push harder, then a potential visit to the weekly low at 107.58 (August 26) could start emerging on the horizon just ahead of the interim 55-day SMA at 107.43. In the longer run, DXY is expected to maintain its constructive stance while above the 200-day SMA at 101.53. DXY daily chart  
PLN Soars to Record Highs Ahead of NBP Decision

EUR/USD Pair: The Pair’s Bearish View Is Expected

TeleTrade Comments TeleTrade Comments 14.09.2022 14:32
EUR/USD reclaims part of the ground lost on Tuesday’s sell-off. Further rebound should target the multi-month line near 1.180. EUR/USD regains some poise and manages to trim part of the weekly pullback following Tuesday’s slump in the wake of the release of US inflation figures. If the recovery picks up extra pace, then the interim hurdle comes at the 55-day SMA at 1.0125 prior to the key 7-month resistance line, today near 1.0180. A move beyond the latter is needed to mitigate the downside pressure and allow at the same time a visit to the interim 100-day SMA at 1.0325 prior to the more relevant August high at 1.0368 (August 10). In the longer run, the pair’s bearish view is expected to prevail as long as it trades below the 200-day SMA at 1.0741. EUR/USD daily chart  
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

"Rate hike has been well transmitted to money market rates."

TeleTrade Comments TeleTrade Comments 14.09.2022 14:37
European Central Bank (ECB) Chief Economist Philip Lane said on Wednesday that the current transition will require the ECB to continue to raise interest rates over the next several meetings, as reported by Reuters. Additional takeaways "Encouraging market intermediation of government deposits remains desirable in the long term." "Most measures of longer-term inflation expectations currently stand at around 2%." "If energy costs were to decline or demand were to weaken over the medium term, it would lower pressures on prices." "Rate hike has been well transmitted to money market rates." "Eurozone inflation drivers are of a different nature compared to demand-driven overheating dynamics." "The appropriate monetary policy for the euro area should continue to take into account that the energy shock remains a dominant driving force." "Inflation dynamics associated with the energy shock component, to which the euro area is particularly exposed, are of a different nature compared to demand-driven overheating dynamics." Market reaction EUR/USD is struggling to preserve its recovery momentum after this report and was last seen gaining 0.25% on the day at 0.9995.
bybit-news1

Forex: Could GBP/USD Fall Below 1.05? US Dollar (USD) May Gain 5%

Alex Kuptsikevich Alex Kuptsikevich 14.09.2022 13:07
Yesterday we wondered whether the dollar retreat was a correction or a reversal. But the reaction of the financial markets to the US inflation report has put everything in its place by confirming that we are still in a bull market for the dollar. Very often, though not always, this means a bear market for equities. The Dollar Index's corrective pullback from the extremes over the past week allowed players to accumulate liquidity for a new strike, which did not take long to come. Dollar bulls took advantage of a rather average occasion - a slowdown in inflation to 8.3% instead of the expected 8.1% - to cause the DXY to strengthen by almost two per cent – the strongest one-day move since March 2020. Similarly, the stock market crash recalled the worst moments for the market at the start of the pandemic. That said, the inflation surprise (difference between fact and expectation) was not the most significant during this time. The money markets have shifted markedly in their expectations for next week's rate hike, laying down a 100% chance of a 75-point increase and a 34% chance of a 100-point rise at once. The previous day, we talked about less than 90% for 75 points and 0% for 100 points. However, an even bigger shock to expectations in July did not cause commensurate market turbulence. EURUSD reversed below this line with a decisive move In our view, yesterday's move was purely technical. The dollar bulls proved that they hold control of the market, protecting the DXY from any severe test of the 50-day moving average. This was most telling in the EURUSD, which reversed below this line with a decisive move. Usually, such strong moves at key levels will break the resistance of the second side for a long time. In other words, we could now see more of a dollar march in the coming days and weeks with the potential for a renewal of the DXY global highs. A further rise in the dollar could deprive the EURUSD of support near parity, sending it in search of a bottom lower in the area of 0.95-0.96. We have seen quite a few reversals and accelerations in this area throughout the synthetic euro's existence. GBP/USD Reaching 1985 Lows? The GBPUSD would then risk a renewal of the lows from 1985, going down to 1.1000. For now, we consider a move below that year's low (below 1.05) in an unlikely extreme scenario. For the USDJPY, the road to 150 seems to be opening up. However, we are cautiously looking at the potential for further gains. There are now reports that the Bank of Japan is preparing for currency interventions. Generally speaking, the currency market values the dollar extremely highly, which could trigger a weakly controlled domino effect in the markets, which is hardly in the interest of the financial and monetary watchdogs. Simply put, the dollar could easily add around 5% to current levels in the coming days and weeks. Still, one has to watch the rhetoric of the G7 authorities at the abovementioned levels very closely.
Poland's Inflation Expected to Reach Single Digits in August, but Disinflation to Slow Down

Australian Dollar (AUD): How Is Australian Jobs Market Linked With Reserve Bank Of Australia

Jing Ren Jing Ren 14.09.2022 14:48
Jobs figures are back in focus in Australia following some interesting comments from RBA Governor Lowe a few days back. Of course the RBA doesn't care about the employment situation directly. But the theory is that jobs support consumer demand, which in turn supports prices. With the employment situation expected to turn around, particularly going into Australia's spring season, does that mean it's time to start considering a change in RBA policy? The Governor insists that it's not, and that policy will be consistent. The issue is that market expectations seem to not align with the RBA's outlook, pricing in more hikes into next year. In his latest speech, Lowe appeared to be trying to temper expectations. One key point is insisting that Australia did not need to follow the Fed's rate higher, citing the employment situation. What is the employment situation? Australia has relatively low unemployment, which has contributed to upward pressure in wages. However, wages have not kept pace with rising inflation, which means the RBA doesn't have to worry about a wage-price spiral. With housing prices starting to fall, but exports remaining strong, there is a case that the reserve bank might not feel as much urgency to control the market. Healthy appetite for raw materials from China has continued to support the dollar, which in turn puts downward pressure on prices. Given the amount of imports from Australia, this might have a bigger impact on reducing inflation than direct monetary policy. Recently there has been a little weakness in employment, but that was seen as a result of lower participation. Increasing labor force participation would be seen as helping the RBA's objective to bring prices down, as it would help increase production and solve some of the supply side issues. For that reason, the RBA might be wary about going above the neutral rate. Lowe did not give a specific range, just simply said that current policy was "nearer". What to look out for Australia August unemployment rate is expected to stay steady at 3.4%, despite the participation rate expected to tick up a couple of decimals to 66.6% from 66.4% prior. Australian firms have been complaining for months that they have been having trouble enticing workers back. The employment change is projected to turn around, and show 35K jobs created compared to -49.9K in July. These figures are seasonally adjusted to account for Australia coming out of the middle of winter. Chief sector that had been impacted over the last few months was construction as home sales and prices started to fall. Potential market reaction The issue now is whether the RBA will hike another 50bps or just do 25bps at their next meeting at the start of October. So far, there is much consensus, but the market still seems to be betting on a more hawkish option. Better jobs numbers would actually give the RBA more room to maneuver, and could be interpreted by the market as meaning a harsher hike is more likely. On the other hand, if the labor market were to not show the expected rebound, it could shake some of the confidence that policy will be as tight as expected, and weaken the Aussie.
The Recent Rally Of Bitcoin Had Been Capped, The Digital Yuan (eCNY) Has Received Upgrades

Litecoin Remained Stable And Bitcoin Continues Downward Trend

InstaForex Analysis InstaForex Analysis 14.09.2022 13:16
Contrary to many expectations, Bitcoin successfully spent the second part of last week. The asset managed to defend the $18.5k–$19k level and resume its upward movement. The formation of the largest green candle in the last three months gave hope for a strong bullish momentum. Along with Bitcoin, stock indices grew, including the S&P 500 and NASDAQ. The US dollar index corrected after reaching another high, which gave high-risk assets time to rise. Analysts at State Street report that institutional investors remain confident in the prospects and value of cryptocurrencies. Their main focus is on Ethereum before the merger, which is why Bitcoin falls out of the investment agenda. According to Santiment, the local undervaluation of BTC provoked a strong rebound to the $22k level. The publication of CPI and the reaction of the crypto market Most factors indicated a high probability of BTC reaching a local high at $25k. The publication of the dynamics of the consumer price index put a bold dot on market expectations. The indicator decreased from 8.5% to 8.3%, with a forecast of a fall to 8.1%. The rate of decline in the inflation rate was below forecasts. The cryptocurrency market and Bitcoin reacted sharply negatively. As of September 14, of the top 30 cryptocurrencies, only Litecoin managed to maintain stability. The capitalization of the industry fell by 6.6% to $900 billion, and Bitcoin lost 9% in a few hours. As of 08:00 UTC, BTC/USD has consolidated near the $20.2k support level. Stock indices also fell, with the S&P 500 down 4.3% overnight, the biggest drop since June 2020. BTC/USD Technical analysis In technical terms, the cryptocurrency has reached a local support zone in the $19.8k–$20.2k area. Following the results of the past 24 hours, Bitcoin has formed a bearish engulfing pattern, which indicates a continuation of the downward trend. Selling volumes continue to grow, but technical metrics signal a local reversal. The RSI and Stochastics bounced off the 35–45 area and are starting to move flat, which indicates consolidation. Bullish scenario Bitcoin needs to hold above the $20k level in order to maintain the opportunity to resume the upward movement. If the round mark is maintained, the price of BTC will rush to the $20.4k–$20.9k resistance area. Successful passage of this segment and consolidation above $21k opens up prospects for movement to $22k before the cryptocurrency. Bitcoin will most likely be in the consolidation stage in the coming days after the negative news. Bearish scenario The shock state of the market will be replaced by awareness of the difficulties of fighting inflation. Most likely, this will lead to a decrease in investment activity in the cryptocurrency market and a reorientation of investors to USD products. In the shorter term, this will be reflected in the price movement towards the key support area of $19.5k–$19.9k. Given the effect of the ETH update, it can be assumed that this zone will be the final one before the reversal. But in case of aggravation of the bearish movement by additional negative factors, the price will meet support at the final level of $18.5k–$19k. Results Summing up the results of the CPI publication, we can say that the situation with liquidity and tightening of monetary policy will not change in the coming months. Powell stated that the Fed's actions would depend on the fact, which turned out to be undervalued alarming. Inflation is falling, but very slowly, and therefore an increase in the key rate by 75 basis points in September is a settled issue. In the coming weeks, the market will prepare for a rate hike, as well as adapt its investment strategy to the deterioration of the financial environment. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade Relevance up to 10:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321668
A Softer Labour Market In Australia And Its Possible Consequences

Australian Dollar (AUD) Plunged Yesterday, Reserve Bank Of Australia Stays Vigilant To This Week's Data

Kenny Fisher Kenny Fisher 14.09.2022 15:56
The Australian dollar is licking its wounds today, after a brutal collapse on Tuesday. AUD/USD is trading at 0.6739 in the European session, up 0.12%. US inflation sends USD soaring On Tuesday, I noted that the Australian dollar had edged higher, thanks to decent consumer and business confidence data. That changed in a hurry after the US inflation report, and by the end of the day, AUD/USD had plunged an astounding 2.29%. The Aussie wasn’t alone, as the US dollar posted sharp gains against all the major currencies. In the US, investors were dismayed with the August inflation report, even though headline inflation fell to 8.3%, down from 8.5%, thanks to lower gasoline prices. The reading was well above the consensus of 8.0%, and core CPI rose to 6.3%, up from 5.9% and above the forecast of 6.1%. The markets reacted sharply to the news, as equity markets slumped and the US dollar was off to the races. The market response was a polar opposite to the July inflation report, when market euphoria sent the stock markets flying and the US dollar tumbling. Read next: Markets Look Like Battlefields After The US Inflation Print. S&P 500, Dow Jones And Nasdaq All Plunged. Forex: Will BoJ Intervene?| FXMAG.COM The latest inflation numbers have removed any expectations of a modest 50bp increase at the Fed’s meeting next week and have raised the possibility of a massive 100bp hike. The markets have priced in a 75bp increase at 60% and a 100bp rise at 40%, compared to 80% for 75bp and 20% for 100bp after the inflation report was released. I expect these odds to continue to fluctuate as we get closer to the September 21st meeting. Larry Summers, a former Treasury Secretary, said on Tuesday that the inflation report indicated that the US has a “serious inflation problem” and a 100bp move would “reinforce credibility”. Australian Jobs Market Data To Be Released This Week Market attention will shift to the Australian employment report on Thursday. The market consensus stands at 35.0 thousand for August, which would be a huge rebound after the -40.9 thousand reading in July. A strong release will make it easier for the RBA to remain aggressive as it continues to battle inflation. The RBA will be keeping a close eye on Consumer Inflation Expectations, which will also be released on Thursday. The index is expected to rise to 6.7% in August, up from 5.9% in July. AUD/USD Technical AUD/USD is testing resistance at 0.6737. Above, there is resistance at 0.6807 There is support at 0.6629 and 0.6559 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie stabilizes after freefall - MarketPulseMarketPulse
It Is Predicted That The Interest Rate In New Zealand Could Reach 4.50% In 2023

NZD/USD Decreased On Tuesday, But Expected GDP Print May Make Investors Glad

Kenny Fisher Kenny Fisher 14.09.2022 16:14
NZD/USD remains under pressure and is trading below the symbolic 0.60 level. Earlier today, the pair fell to 0.5976, its lowest level since May 2020. New Zealand dollar slides after US inflation data It was Black Tuesday for the New Zealand dollar, as NZD/USD declined by 2.24%. The US dollar recorded strong gains across the board, with the risk-sensitive Australian and New Zealand dollars taking a beating. The catalyst for the US dollar’s sharp upswing was the August inflation report. Although headline inflation fell for a second straight month, investors were far from impressed, sending the equity markets tumbling and the US dollar sharply higher. Headline inflation dropped from 8.5% to 8.3%, but missed the consensus of 8.1%. Core CPI rose to 6.3%, up from 5.9% and above the forecast of 6.1%. The markets had priced in a 75bp increase in September followed by 50bp in November and 25bp in December. However, with inflation higher than expected, the Fed may not be in a position to scale back and market pricing for the September meeting is fluctuating – currently, there is a 64% chance of a 75bp move and a 34% likelihood of a 100bp increase. Larry Summers, a former Treasury Secretary, said on Tuesday that the inflation report indicated that the US has a “serious inflation problem” and a 100bp move would “reinforce credibility”. Read next: Markets Look Like Battlefields After The US Inflation Print. S&P 500, Dow Jones And Nasdaq All Plunged. Forex: Will BoJ Intervene?| FXMAG.COM New Zealand will release GDP for the second quarter on Thursday. The economy is expected to rebound with a strong 1.0% gain, after a decline of 0.3% in Q1. The economy is performing well, with a strong rebound after the Covid pandemic. The country’s credit rating was reaffirmed by S&P today at AA+, an important thumbs up for the New Zealand economy. NZD/USD Technical 0.6017 is a weak resistance line, followed by 0.6085 There is support at 0.5929 and 0.5861 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZ dollar falls to 26-month low - MarketPulseMarketPulse
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

British Pound (GBP): Let's See What Is The Expected Variant?

Kenny Fisher Kenny Fisher 14.09.2022 20:54
It has been a busy week for the British pound. GBP/USD has climbed 0.66% today and is trading at 1.1566. This follows the pound’s huge decline on Tuesday, as the US dollar pummelled the major currencies after a weaker-than-expected inflation report shocked the financial markets. The US dollar, which has looked mediocre recently, received a welcome shot in the arm after the July inflation report. The dollar steamrolled most of the major after the inflation data, and GBP/USD declined by 1.62%. Investors were not pleased with the report, as equity markets slumped and the US dollar rose sharply. Headline inflation dropped from 8.5% to 8.3%, but missed the consensus of 8.1%. Core CPI rose to 6.3%, up from 5.9% and above the forecast of 6.1%. The markets had priced in a 75bp increase in September followed by 50bp in November and 25bp in December. However, with inflation higher than expected, the Fed may need to remain more aggressive than expected. Market pricing for the September meeting is fluctuating – currently, there is a 68% chance of a 75bp move and a 32% likelihood of a massive 100bp increase. Just a few days ago, a “modest” 50bp hike was a strong possibility, but it is apparently off the table after the inflation report. UK inflation dips below 10% UK inflation eased slightly in August to 9.9%, down from the 40-year high of 10.1% in July and a notch lower than the 10.0% estimate. The drop in headline reading was due to a decline in fuel prices. Core inflation rose to 6.3%, up from 6.2% prior. Inflation remains very high and the markets are expecting the BoE to come out swinging with a 75bp increase at the September 22nd meeting, just a day after the Federal Reserve meets. The BoE has projected that inflation will not peak before hitting 13%, which means that the new Truss government has its work cut out as it grapples with the severe cost of living crisis in the UK. GBP/USD Technical GBP/USD is testing resistance at 1.1548. Above, there is resistance at 1.1689 There is support at 1.1417 and 1.1306 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Sterling climbs as UK inflation eases - MarketPulseMarketPulse
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

High Correlation Between The Pound And The Euro, Traders Expect The GBP/USD Pair To Fall Or Rise

InstaForex Analysis InstaForex Analysis 15.09.2022 08:17
The GBP/USD currency pair lost more than 200 points on Tuesday, and on Wednesday, it managed to adjust only slightly. As in the case of the euro currency, the probability of further decline/growth of the pair is now 50-50. Both pairs show a high correlation with each other, so there is no doubt that if the euro falls, the pound will also fall. The pound sterling is now just about a hundred points away from its 37-year lows. The growth that we have seen recently could be the beginning of a new upward trend, but it does not seem to be it. Currently, the pair is below the moving average, and the market does not know what to do with the euro, pound, and dollar now. On the one hand, it is dangerous to continue selling at 37-year lows. On the other hand, all attention has shifted again to the Fed and the fact that the regulator may continue aggressively raising the key rate. And this fact, we recall, is one of the key factors in the fall of the British currency over the past 6–8 months. The market was not interested in raising the Bank of England's rate but in raising the Fed rate. The divergence between them remains, but it is not as strong as in the case of the ECB. Nevertheless, the pound has been showing an equally strong decline in recent months, which is why we believe that the markets rely on the Fed's monetary policy for 60% of their decision-making. As in the case of the euro currency, we recommend that you carefully monitor the technical picture now since a flat, a "swing," a new attempt at growth, and a new strong fall are now possible. Thus, it would help if you were extremely careful when opening positions. British inflation has slowed for the first time in a year and a half. So, the British consumer price index fell by 9.9% in August. The decrease was 0.2% compared to the previous month. Thus, it may be a simple accident. Recall that inflation in the UK began to rise in March 2021. That is, it has been growing for a year and a half. During this time, it grew from 0.4% y/y to 10.1% y/y. The tendency to grow, as they say, on the face. No one denies that sooner or later, a slowdown in price growth will begin in the UK, but 0.2% is too little to exclude the random factor. The Bank of England's rate has risen to 1.75%, and the British regulator is raising it more slowly than the Fed. Therefore, based on this factor, more probability is given to the new dollar growth. But at the same time, if earlier the difference between the rates was visible per kilometer, there are still certain movements to bring the rates closer. Unfortunately, the US inflation report means that the US rate will rise by another 0.75% next week. And maybe by a whole 1.00%! The Bank of England will not be able to provide the same monetary tightening. Therefore, if we start only from the factors of monetary policy, then we would say that the euro and the pound have excellent chances to continue their decline. Moreover, as we have all seen, the slowdown in inflation in Britain did not provoke a serious market reaction. And it did not provoke it because the market understands that the slowdown should have the essence of a trend and not a one-time character. Moreover, since inflation has started to slow down, the Bank of England may raise the rate next week by only 0.5%, which is a significant tightening. There is no hope for 0.75% or more. Consequently, the BA and Fed rate gap will increase again. Consequently, the US dollar may move into growth again. And the pound sterling can drag the euro currency down since these pairs like to trade identically. A quick return to the area above the moving average can bring the bulls back to the market and assure them that the bears are not as strong as they seem. But when a pair falls by 200 points in one report, it says a lot. And, first of all, about the power of bears. The average volatility of the GBP/USD pair over the last five trading days is 146 points. This value is "high" for the pound/dollar pair. On Thursday, September 15, thus, we expect movement inside the channel, limited by the levels of 1.1416 and 1.1709. The reversal of the Heiken Ashi indicator downwards signals the resumption of the downward movement. Nearest support levels: S1 – 1.1536 S2 – 1.1475 S3 – 1.1414 Nearest resistance levels: R1 – 1.1597 R2 – 1.1658 R3 – 1.1719 Trading Recommendations: The GBP/USD pair has overcome the moving average on the 4-hour timeframe and may begin a new round of downward movement. Therefore, at the moment, sell orders with targets of 1.1475 and 1.1414 should be considered if the Heiken Ashi indicator turns down. Buy orders should be opened when fixed above the moving average with targets of 1.1658 and 1.1709. Explanations of the illustrations: Linear regression channels – help determine the current trend. If both are directed in the same direction, then the trend is strong. Moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which to trade now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 02:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321746
FX Daily: Testing the easing pushback

The Probability Of A Decline In The EUR/USD Pair Is Growing

InstaForex Analysis InstaForex Analysis 15.09.2022 08:25
The EUR/USD currency pair collapsed by almost 200 points on Tuesday and remained below the moving average line on Wednesday. Thus, a rather promising technical picture, which suggests further growth of the European currency, is still considered irrelevant. But we once again saw the inability of the euro to adjust by more than 400 points. What's next? Currently, the euro currency is located below the moving average, which means that the probability of a new pair falling is increasing with the update of 20-year lows, to which no more than 100 points remain to be passed. However, we would like to draw the traders' attention to the fact that the market was trading on momentum on Tuesday. A one-way movement of almost 200 points due to one report, the value of which was not shocking or discouraging, can hardly be considered an adequate reaction. Thus, we believe that the euro currency may well switch to a new "swing" mode in the near future. The fact that the Fed will continue to raise the key rate is no secret to anyone. Even if inflation had fallen more than the August report showed, it would not have changed anything in the state of things. Thus, there may be no further strengthening of the US currency since the divergence between the ECB and Fed rates promises to level off soon. There is a situation where the probability of further decline/growth of the euro is 50-50. The euro currency has been falling for too long and is clearly oversold now. The ECB is ready to aggressively raise the rate, which also works in the hands of the euro currency. But at the same time, the global downtrend persists, and both linear regression channels are still directed downward. Therefore, in the coming days and weeks, you need to be prepared for any development of events and pay increased attention to technical analysis. Inflation is the most difficult indicator to predict. Even before yesterday's publication of American inflation, we said it was not worth opening champagne ahead of time about its slowdown. Recall that in May, the consumer price index was already slowing down by a couple of tenths of a point, after which it resumed acceleration. About the same thing we are seeing now. After inflation slowed significantly in July, the slowdown was only 0.2% in August. At this rate, this indicator will return to its target of 2% in several years. Consequently, the Fed has no other option but to raise the key rate. And the faster they do it, the faster inflation will return to the target value. Inflation is such an indicator that it is influenced by monetary policy. A huge number of factors should be taken into account when forecasting. That is why we have always said that in the case of inflation, it is not the value of a single report that is important but the trend. If the indicator has been moving in one direction for several months, you can output the average value by which it changes in one month. So far, we have a decrease of 0.6% and a decrease of 0.2%, with a general increase in the key rate to 2.5%. For one month, the consumer price index slowed down by 0.4%. But who said that this was only the merit of the Fed? Maybe other factors played a role? We want to say that a further rapid fall in inflation, even with further tightening of the Fed's monetary policy, is far from obvious. Many experts say that the problem of high inflation has been a problem for many years. Inflation has been rising for more than a year after the Fed poured huge amounts of money into the economy out of nowhere during the two years of the pandemic. The QT program is already working, thanks to which about $95 billion is withdrawn from the economy every month. But "to break is not to build." If inflation rises to its maximum value for about a year, it will take two years to return to its original position. And this is provided that there are no new economic shocks and "waves" of the pandemic, along with "lockdowns." The average volatility of the euro/dollar currency pair over the last five trading days as of September 15 is 132 points and is characterized as "high." Thus, we expect the pair to move today between 0.9857 and 1.0121. A reversal of the Heiken Ashi indicator back to the top will signal a possible resumption of the upward movement. Nearest support levels: S1 – 0.9949 S2 – 0.9888 S3 – 0.9827 Nearest resistance levels: R1 – 1.0010 R2 – 1.0071 R3 – 1.0132 Trading Recommendations: The EUR/USD pair is trying to resume the global downward trend. Sell orders should now be considered if the price remains below the moving average line with targets of 0.9888 and 0.9857. Buy orders should be opened if the pair is fixed above the moving average, with targets of 1.0132 and 1.0193. Explanations of the illustrations: Linear regression channels – help determine the current trend. If both are directed in the same direction, then the trend is strong now. Moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which to trade now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 02:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321744
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

The Market Has No Signs Of An Increase In The USD/JPY Pair

InstaForex Analysis InstaForex Analysis 15.09.2022 08:34
The USD/JPY pair is consolidating in a wide range below the price channel resistance line, below 145.00. If the price still has enough strength to overcome the price channel line of the higher (monthly) timeframe, then the pair will become enthusiastic for growth, and here the 147.05 target is the next embedded line of the global price channel. But the market has no prerequisites for such enthusiasm. The price has already formed a weak divergence with the Marlin Oscillator, and if this is not a trend reversal, then it is a prerequisite for a deeper correction. Its first target at 141.14 is the underlying line of the price channel. Breaking the support opens the second target at 139.20, near which is the MACD indicator line. The price settled below the MACD line on the four-hour scale, the Marlin Oscillator is in the negative area, the scenario for the currency pair's decline has an advantage. First target at 141.14.       Relevance up to 04:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321748
The Pound (GBP) Will Probably Continue To Move Sideways

The Price Of The GBP/USD Pair May Return To Downward Trend

InstaForex Analysis InstaForex Analysis 15.09.2022 08:40
Yesterday, the pound gained 48 points. The price is winding up with a wavy line to the level of 1.1525, which started in the final days of August. Consolidation below the level opens the nearest target at 1.1385, then 1.1305. Most likely, the strong movement on the 13th was the start of a new phase of the medium-term decline. The pair's vigorous growth from yesterday was associated with the release of inflation data, which showed a slight weakening. In particular, the overall August CPI fell from 10.1% y/y to 9.9% y/y, which significantly softened the gloomy expectations of a "hard landing" of the British economy. Today, the main news will be the release of US data on retail sales for August. Growth by 0.2% is expected against 0.0% in July. It is likely that good data will strengthen the dollar throughout the market. The price lingers above the MACD indicator line on the four-hour chart. However, the situation is more downward, as the price has not gone above the balance line, which indicates the development of yesterday's growth as a correction, and the Marlin Oscillator is kept in the downward trend zone. The final confirmation of the price's return to the downward medium-term channel will be its departure under yesterday's low (1.1480). Relevance up to 04:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321750
The Euro May Gradually Climb To The Target Level

The EUR/USD Pair Has Good Sings To Futher Decilne Of Price

InstaForex Analysis InstaForex Analysis 15.09.2022 08:43
As the market cooled down after an exciting Tuesday, the euro spent Wednesday in consolidation between the target levels of 1.0032 and 0.9950. The price did not even try to fight the resistance, which was also strengthened by the MACD indicator line of the daily scale. The signal line of the Marlin Oscillator turned down without an attempt to work out the border with the growth territory. This is a good sign of a further decline, which will be confirmed after the price breaks below the 0.9950 support. The nearest target is 0.9850, followed by 0.9752. The price consolidated under the MACD indicator line and balance lines (red) on the four-hour chart. Marlin shows intention to continue the decline after yesterday's own consolidation. The situation is completely downward. Relevance up to 04:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321752
At The Close On The New York Stock Exchange Indices Closed Mixed

On The New York Stock Exchange, The Securities Rose Yesterday

InstaForex Analysis InstaForex Analysis 15.09.2022 08:46
At the close in the New York Stock Exchange, the Dow Jones rose 0.10%, the S&P 500 rose 0.34%, and the NASDAQ Composite rose 0.74%. Chevron Corp was the top gainer among the components of the Dow Jones index today, up 3.86 points or 2.42% to close at 163.27. Quotes Johnson & Johnson rose by 3.33 points (2.06%), ending trading at 164.66. Merck & Company Inc rose 1.36 points or 1.59% to close at 86.95. The losers were shares of Honeywell International Inc, which lost 5.01 points or 2.71% to end the session at 179.97. 3M Company was up 2.44% or 2.94 points to close at 117.53, while Dow Inc was down 1.67% or 0.80 points to close at 47.07. . Leading gainers among the S&P 500 components in today's trading were Coterra Energy Inc, which rose 7.22% to hit 32.23, APA Corporation, which gained 6.72% to close at 41.74, and shares of Moderna Inc, which rose 6.17% to end the session at 139.40. The biggest losers were Nucor Corp, which shed 11.31% to close at 120.71. Shares of Centene Corp lost 6.79% to end the session at 83.92. Quotes of DISH Network Corporation decreased in price by 6.27% to 17.18. Leading gainers among the components of the NASDAQ Composite in today's trading were Avenue Therapeutics Inc, which rose 53.87% to hit 0.36, Aileron Therapeutics Inc, which gained 38.49% to close at 0.27, and also shares of Dawson Geophysical Company, which rose 41.44% to close the session at 1.57. The biggest losers were Neurobo Pharmaceuticals Inc, which shed 43.61% to close at 16.86. Shares of Vintage Wine Estates Inc shed 40.33% to end the session at 3.30. Quotes of Aditx Therapeutics Inc decreased in price by 38.22% to 11.43. On the New York Stock Exchange, the number of securities that rose in price (1,578) exceeded the number of those that closed in the red (1,506), while quotes of 124 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,956 stocks fell, 1,770 rose, and 254 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 4.07% to 26.16. Gold futures for December delivery lost 0.63%, or 10.90, to hit $1.00 a troy ounce. In other commodities, WTI October futures rose 1.68%, or 1.47, to $88.78 a barrel. Brent oil futures for November delivery rose 1.23%, or 1.15, to $94.32 a barrel. Meanwhile, in the forex market, the EUR/USD pair was unchanged 0.08% to 1.00, while USD/JPY fell 0.97% to hit 143.15. Futures on the USD index fell 0.15% to 109.36.   Relevance up to 05:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/292844
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The GBP/USD Pair Could Be Considered An Opportunity To Sell

InstaForex Analysis InstaForex Analysis 15.09.2022 08:52
Early in the European session, the British pound is trading at around 1.1533, below the 21 SMA located at 1.1597 and supported by 2/8 Murray located at 1.1474. Investors believe that the Bank of England will raise its official interest rate by 0.75% on September 22 in light of yesterday's inflation data. An increase in the interest rate expected by analysts could offer a rebound in the British pound and it could reach the area of 200 EMA located at 1.1790. It could even reach 5/8 Murray at 1.1840. On the 4-hour chart, we can see that the British pound is trading within an uptrend channel which has been in progress since September 6th. Yesterday in the American session, we could see that the pound reached the bottom of the uptrend channel and the top of the bearish channel formed on August 15. The GBP/USD price is trading above the 2/8 Murray support which could offer a buying opportunity. In case it consolidates above 1.1474, it will be viewed as a buying opportunity. If the pound rebounds around 1.1500 in the next few hours, it is a good sign to buy with targets at 1.1597 (21 SMA). Additionally, if the pound manages to return above 3/8 Murray, it will be a positive sign. The trading instrument is likely to resume the bullish cycle and could reach 4/8 Murray at 1.1718 and could even reach the 200 EMA located at 1.1775. On the contrary, if in the next hours the pound closes and consolidates below 2/8 Murray around 1.1474, it is expected to fall towards the critical support of 1/8 Murray located at 1.1352. The outlook for the pound remains negative as investors expect the Fed to raise its interest rate next week. As a result, the pound is expected to continue trading in a range zone between 1.1455 - 1.1606 in the coming days. The eagle indicator reached extremely overbought levels on September 12. After this signal, we saw a sharp drop in the GBP/USD pair and it fell to cover the gap at 1.1580. The slight recovery of the GBP/USD pair could be considered an opportunity to sell only if it consolidates below 1.16 (21 SMA). Our trading plan for the next few hours is to buy the British pound above the psychological level of 1.1500 with targets at 1.1597 and 1.1718.   Relevance up to 06:00 2022-09-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292846
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

Low Demand For The Euro, The Price Of The EUR/USD Pair May Be Under Bearish Pressure Again

InstaForex Analysis InstaForex Analysis 15.09.2022 08:58
EUR/USD 5M The EUR/USD pair showed absolutely no interest in a strong move on Wednesday. After the pair had fallen by almost 200 points a day earlier, an absolutely sluggish movement began, within which the euro barely managed to correct to the extreme level of 1.0019. The pair could not settle above this level, just like below the Senkou Span B line. Therefore, the word "flat" is best suited to describe the environment. If you look at the calendar of macroeconomic events, this behavior of the market does not raise questions, since only one report was published during the entire day - industrial production in the European Union for July. Industrial production fell much more than expected, but the market did not consider it necessary to continue selling the euro. There was essentially no reaction. Thus, over the past day the technical picture has not changed at all. The bears need to overcome the Senkou Span B line so that the pair can continue to fall to its 20-year lows. In regards to Wednesday's trading signals, the picture was quite interesting due to the unforeseen flat. The first sell signal turned out to be false, as the price overcame the Senkou Span B line, but failed to continue moving in the right direction. Therefore, the transaction closed at a loss. But the next signal allowed traders to earn, as the price reached the nearest target - the level of 1.0019. A rebound followed from it, which should have been worked out, and the price returned to the Senkou Span B line, from which a rebound followed. The last buy signal should not have been worked out, since it was formed quite late, but it could also bring a small profit. Thus, one trade is unprofitable, two are profitable. Not bad for a flat. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 3,000, while the number of shorts decreased by 8,300. Accordingly, the net position grew by about 12,000 contracts. This is not very much, but it is still a weakening of the bearish mood among the major players. However, this fact is not of particular importance, since the mood still remains bearish, and the euro remains "at the bottom". At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 36,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new depreciation of this currency. Over the past six months or a year, the euro has not been able to show even a tangible correction. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 15. The strengthening of the ECB's monetary mood no longer worries anyone. The Fed is once again occupying the minds of traders. Overview of the GBP/USD pair. September 15. British inflation brought an unexpected, but expected, "surprise". Forecast and trading signals for GBP/USD on September 15. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H Bullish prospects are hanging by a thread on the hourly timeframe. The price failed to overcome the important Senkou Span B line, so theoretically, the upward movement may still resume. However, consolidating below this line will open the way to the level of 0.9877. We still believe that the probability of euro growth is increasing, but remains too low, and the pair may hit 20-year lows a couple more times this year. We highlight the following levels for trading on Thursday - 0.9877, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9971) and Kijun-sen (1 .0065). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. Industrial production, retail sales and jobless claims will be published in America. These are far from the most important indicators, and we do not expect a strong market reaction to them. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 02:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321740
The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

The GBP/USD Pair Follows The Trend Of The EUR/USD Pair, Could This Change?

InstaForex Analysis InstaForex Analysis 15.09.2022 09:06
GBP/USD 5M The GBP/USD currency pair traded as sluggishly as the EUR/USD pair on Wednesday. However, it should be noted that, unlike the euro, the pound had reason to show interesting movements. The UK inflation report for August was published in the morning, which, from our point of view, was much more unexpected than the US inflation report a day earlier. The British consumer price index fell from 10.1% to 9.9%, when everyone expected it to rise to the level of 10.6%. Everyone remembers that the Bank of England sets the maximum inflation rate for the next year and a half at 13-15%. Thus, an unexpected decline, of course, can be a banal accident, but the market practically did not react to this positive moment. Unless, of course, we do not consider the pound's decline by 25 points as a "reaction". This was followed by an upward reversal of the pair and for the rest of the day there was already an upward movement. By the end of the day, the pair was near the Ichimoku Kijun-sen and Senkou Span B indicator lines. Now the British currency's succeeding attempts will depend on whether it overcomes these lines or not. A rebound from any of them will provoke a new fall in the pound/dollar pair, which will now be more logical. In regards to trading signals, things were as simple as possible - there were none. The pair did not even approach any level or line. The quotes rose to the critical line only in the evening, but never worked it out. Therefore, trade deals should not have been opened on Wednesday. COT report: The latest Commitment of Traders (COT) report on the British pound, was very eloquent. During the week, the non-commercial group closed 5,700 long positions and opened 15,500 short positions. Thus, the net position of non-commercial traders immediately fell by 21,100, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains pronounced bearish, which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new fall, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its fall has resumed altogether, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 103,000 shorts and 52,000 longs open. The difference is twofold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the foundation and geopolitics. If they remain the same as they are now, then the pound may still be in a "downward peak" for some time. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 15. The strengthening of the ECB's monetary mood no longer worries anyone. The Fed is once again occupying the minds of traders. Overview of the GBP/USD pair. September 15. British inflation brought an unexpected, but expected, "surprise". Forecast and trading signals for EUR/USD on September 15. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair has now completed an upward trend on the hourly timeframe. At least the price has already consolidated below all Ichimoku indicator lines, and all because of one US inflation report. The pair may now resume its long-term downward trend and renew 37-year lows several more times. The main thing for the bears now is to stay below the Senkou Span B line. In this case, the road to the downside will be open. We identify the following important levels on September 15: 1.1411-1.1442, 1.1649, 1.1760, 1.1874. The Senkou Span B (1.1581) and Kijun-sen (1.1599) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. There will finally be a slight lull in the UK on Thursday. Meanwhile, there are three minor reports in America, the reaction to each of which can be 20-30 points, hardly more. Thus, today the pound/dollar pair can continue to trade quite calmly. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321742
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

The Apple Is Heading In A Downward Direction

InstaForex Analysis InstaForex Analysis 15.09.2022 09:11
We have been following Apple for quite a while now. Apple has followed Livermore's Accumulation Cylinder to the letter and we have just completed point 12. We should now see a decline toward point 13, which likely equals a decline toward the 38.2% corrective target near 113. Looking at Livermore's chart, we can see that a much larger corrective decline should be expected, but let's take the supposed decline in baby steps and our next downside target is seen near 113. Resistance is seen at 164.25 which is expected to cap the upside for the predicted decline towards 113.00. Relevance up to 07:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292858
The Metaverse Will Offer Everyone Endless Possibilities

The Meta Platforms: The Underlying Impulsive Decline Will Remain Intact

InstaForex Analysis InstaForex Analysis 15.09.2022 09:22
We have been looking for a bottom near 157.66. However, it's clear that Meta Platforms continue to push lower toward the next support seen at 142.26. We are still looking for a low in the near term for a recovery towards 244.18 and maybe even closer to resistance near 275. However, as long as resistance at 171.39 is able to cap the upside, the underlying impulsive decline will stay intact and try to push Meta Platforms lower towards 142.26. A break above minor resistance at 171.39 will confirm that wave [A] has been completed and wave [B] is in motion.     Relevance up to 07:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292860
Bank of England Faces Rate Decision: Uncertainty Surrounds Magnitude of Hike

Hold On Tight Forex! US Dollar (USD) May Be Fluctuating Today As Industrial Production, Retails Sales And Other Prints Are Released Today!

ING Economics ING Economics 15.09.2022 09:26
A fresh serving of US data should keep the market's expectations hawkish. The move in the interest rate differential plays in the dollar's favour and reduces the room for a recovery in the euro. The market is pricing in a near 75bp hike for next week's BoE meeting. And today we should hear more from Hungary about the negotiations with the European Commission USD: Plenty of data releases to watch today Most dollar crosses have stabilised after the large post-CPI moves on Tuesday. In the meantime, markets have progressed in pricing in more Fed tightening, and Fed funds futures are currently embedding a 3.4% peak rate in March 2023, which is likely offering a good floor to the dollar. Since the Fed has remained quite hawkish in recent commentaries and may not have any interest in pushing back excessively hawkish pricing at its September meeting (it has instead pushed back against rate cut expectations recently), it may mostly be up to the data to force any dovish re-pricing at this stage. There are quite a number of data releases to keep an eye on today: retail sales, industrial production, Empire Manufacturing, and the Philadelphia Fed Business Outlook. Jobless claims may also gather more attention than usual after a surprisingly big drop last week fuelled the hawkish narrative of a still very tight labour market in the US. We see a good chance that today’s data will not trigger any material re-pricing lower in Fed rate expectations, and the hawkish inertia into next week’s meeting means that the dollar can stay supported. Francesco Pesole EUR: Estimating impact of energy caps The EUR-USD 2-year swap rate differential has re-widened in favour of the dollar – now at -175/180bp versus 155bp last week – and while we have highlighted on multiple occasions how the rate differential is indeed playing a secondary role in EUR/USD dynamics lately, this has reduced the room for a euro recovery further down the road. There are no market-moving data releases to highlight in the eurozone today, but some focus will be on two ECB speakers: Luis De Guindos and Mario Centeno, normally some moderately dovish voices in the governing council. At this stage, it will be interesting to see how the ECB will factor in the freshly announced measures by the European Commission to cap energy prices. Like in other countries, there is still some uncertainty on whether the government’s efforts to freeze hikes in energy bills would have a predominantly dovish impact on central banks (as inflation would be lower) or a hawkish impact as the economic impact would be smaller and that allows more tightening. While markets wait for more clarity on this, the dollar’s resilience may keep EUR/USD at or below 1.0000 in the coming days. Francesco Pesole GBP: A break in data releases today In a very busy week for the UK economic calendar, we don’t get any major releases today. Yesterday, the inflation report showed some marginal slowdown in prices, but as noted by our UK economist here, we expect a peak at around 11% for headline inflation. However, this may not matter all that much for the Bank of England, which is looking at the latest labour and wage growth dynamics to gauge how entrenched inflationary pressures have become. Markets are currently pricing in 67bp of tightening at next week's BoE meeting, and we see a good probability of markets fully pricing in a 75bp hike in the coming days. That could offer a bit of help to sterling into the BoE announcement, but EUR/GBP looks unlikely to make any big moves outside its recent range for now. Francesco Pesole CEE: Negative noise around forint The final Polish inflation figures for August, which surprised to the upside in the flash estimate two weeks ago, will be published today. Also, as is the case every Thursday, the National Bank of Hungary sets the deposit rate. Although yesterday's drop in the forint attracted a lot of attention, today's meeting should be a non-event. Nevertheless, Hungary will remain in the spotlight within the Central and Eastern Europe region. After yesterday's negative headlines from the European Union, we should hear more from the Hungarian side today and more on Sunday or next week. As we mentioned on Monday, the negative noise around the forint was to be expected and after yesterday it is clear that the European Commission is playing hardball with the Hungarian government. However, part of yesterday's 1.5% fall in the forint can be attributed to higher gas prices, which saw their first increase in a week. For the days ahead, we expect that things will not get easier for the forint, but we believe that there will be a deal in some form, although it may include a conditional or partial release of EU money. Elsewhere in the CEE region, we have seen a reversal in rates to the upside after a long period of decline, compensating for higher gas prices and resulting in stable FX. From this perspective, we thus see current levels as fair, waiting for new market impulses. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
PLN Soars to Record Highs Ahead of NBP Decision

The EUR/USD Pair: The Longer Term Down Trend Is Still Here

InstaForex Analysis InstaForex Analysis 15.09.2022 09:33
Technical Market Outlook: The EUR/USD pair has been seen trading around the intraday technical support located at 0.9957, so the market stays below the parity.The level of 1.0000 will now act as a resistance for bulls, because the weak and negative momentum on the H4 time frame chart supports the short-term bearish outlook for EUR. The next technical support is seen at 0.9934 and 0.9901. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the longer term down trend is reversed. Please watch the USDX as the correlation between this two is directly opposite. Weekly Pivot Points: WR3 - 1.01483 WR2 - 1.01150 WR1 - 1.01017 Weekly Pivot - 1.00817 WS1 - 1.00684 WS2 - 1.00484 WS3 - 1.00151 Trading Outlook: Despite the recent relief rally towards the short-term support one, the EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated.     Relevance up to 08:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292864
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The Market Of The Pound To US Dollar Pair Is In The Pull Back Mode

InstaForex Analysis InstaForex Analysis 15.09.2022 09:41
Technical Market Outlook: The GBP/USD pair had reversed dynamically from the level of 1.1739 and the local demand zone located between the levels of 1.1598 - 1.1622 had been easily violated. For now the volatility is subdued, because the market participants await the Bank of England interest rate decision scheduled for release at 3:00 PM today. The next target for bears is located at the level of 1.1410 again, which is the 7 years low for the GBP. Please keep an eye on the support level, because any violation of this level will have a very drastic consequences, like an accelerated sell-off towards the next technical support. Weekly Pivot Points: WR3 - 1.16716 WR2 - 1.16430 WR1 - 1.16286 Weekly Pivot - 1.16144 WS1 - 1.16000 WS2 - 1.15858 WS3 - 1.15572 Trading Outlook: The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame. The bears tested the level of 1.1410 (2020 swing low) and now the market is in the pull back mode. In order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th).   Relevance up to 08:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292866
Bitcoin Has Fallen Past The $22k Level Which Is A Bearish Signal

An Arrest Warrant For Kwon, Bitcoin Is Still In Downward Trend

InstaForex Analysis InstaForex Analysis 15.09.2022 09:46
Crypto Industry News: While the LUNC community is excited about the potential return to the scene of the Terra Luna Classic (LUNC) token, Terraform Labs founder Do Kwon is now facing an arrest warrant from South Korean authorities. A Seoul court issued an arrest warrant for Kwon and five others who are currently detained in Singapore. According to the prosecution in South Korea, the founder of Terra faces allegations of violating domestic capital markets law In May, what the Terra community originally suspected was supposed to be a FUD attack turned out to be one of the most devastating market crashes in cryptocurrency history, losing millions of assets from TerraUSD (UST) investors - now renamed TerraUSD Classic (USTC) - and Terra (LUNA) ), which was also renamed Luna Classic (LUNC). Stablecoin UST began to move away from the set US dollar, dropping to a record low of $ 0.006 in June. Outside of UST and LUNA, assets that once peaked at $ 119.18 in April plummeted to an all-time low of $ 0.0000009, pinning potential suicide hotlines to the project's Reddit community. On August 17, Kwon hired lawyers from a South Korean-based law firm just days after he said authorities had yet to contact him. Founder Terra also broke his silence on August 16 in an attempt to clear his name of various allegations. However, despite Kwon's efforts, community members continued to criticize CEO Terra, comparing his situation to the creator of Tornado Cash, who was arrested for writing a privacy code. Technical Market Outlook: The BTC/USD pair has been seen slowly moving lower as the recent low was made at the level of $19,623. The Pin Bar candlestick pattern was made at the H4 time frame chart at the lows, so the market is consolidating around the level of $20,120. The levels of $20,472 and $20,580 will now act as the technical resistance for bulls. The weak and negative momentum supports the short-term bearish outlook towards the level of $18,640 again. Weekly Pivot Points: WR3 - $23,418 WR2 - $22,624 WR1 - $22,146 Weekly Pivot - $21,821 WS1 - $21,352 WS2 - $21,035 WS3 - $20,241 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 08:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292868
Now you can view Bitcoin and Ethereum (ETH) prices on Twitter

The ETH/USD Pair Tried To Rebound After The Decline And Wallet Selector In Opera Crypto

InstaForex Analysis InstaForex Analysis 15.09.2022 09:54
Crypto Industry News: The Opera Crypto browser, a special version of the popular Opera, has added support for crypto wallets such as MetaMask. All thanks to the Wallet Selector function. The Norwegian software company behind Opera intends to increase the usability of the Opera Crypto version for the Web3 application. Exchanges: Gate.io In January this year. The beta version of Opera Crypto appeared, and the company explained that it wanted to meet the growing interest of users who expect browsers to support the web3. Before Wallet Selector was introduced, the browser only supported the wallet built directly into the application. Now that is changing and it will be possible to pin third-party digital wallets with the latest feature. Wallet Selector in Opera Crypto will allow you to install extensions to your preferred crypto wallets - primarily to the most popular MetaMask, which is necessary if you use, for example, decentralized exchanges. The latest feature only extends the capabilities of the Opera Crypto browser. Currently, its users can count on e.g. Crypto Corner, a news hub with news from the world of cryptocurrencies, support for numerous dApp applications (decentralized) and convenient switching between wallets. The company emphasizes that Opera Crypto allows you to log into the dApp application without installing any extensions, and its own Opera Wallet wallet supports ETH, ERC-20 and ERC-721 tokens, as well as other blockchains. Technical Market Outlook: The ETH/USD pair has been seen trying to bounce after the drop to the level of $1,552. The market is still trading inside the ascending channel, so in this situation, the levels of $1,649, $1,689 and $1,722 will now act as the technical resistance for bulls. The next target for bears is seen at the level of $1,513 and $1,473. Please notice, the momentum is very weak and negative and the market conditions are now extremely oversold, so an intraday bounce is expected. Weekly Pivot Points: WR3 - $1,875 WR2 - $1,807 WR1 - $1,765 Weekly Pivot - $1,738 WS1 - $1,697 WS2 - $1,670 WS3 - $1,601 Trading Outlook: The Ethereum market has been seen making lower highs and lower low since the swing high was made in the middle of the August at the level of $2,029. If the down move will extend, then the next target for bears is located at the level of $1,358. The key technical support for bulls is seen at $1,281.9 Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade Relevance up to 08:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292870
Gold's Hedge Appeal Shines Amid Economic Uncertainty and Fed's Soft-Landing Challenge

Yen's (JPY) Lack Of Conviction For Strength, Meeting Of President Xi And President Putin, Australia’s Employment Data

Saxo Bank Saxo Bank 15.09.2022 10:00
Summary:  Some respite in US equities last night, amid bottom hunting and a cooler US PPI report. UK CPI also eased from record highs, but there is nothing that could change the downtrend that remains in place globally. The USD remained steady despite threats of direct intervention by the Bank of Japan and downplaying of the 7-handle by Chinese authorities. Oil prices jumped on hopes of easing restrictions in parts of China. Focus today on Australia’s jobs report which could guide the path of rate hikes from here, but also key to watch will be the Xi-Putin meeting and how the geopolitical situation develops. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) clawed back from an intraday sell off on Wednesday US equity markets rebounded in late trade on Wednesday after an intraday sell off. The S&P 500 ended up 0.3%, Nasdaq 100 up 0.8%. Hedge funds did some buying in the technology space, but it wasn’t enough the significantly move the needle. The most gains were seen in the Oil and Gas sector with Energy stocks rising the most after the crude oil price rebounded 2%. The Consumer discretionary followed higher. The bearish tone remains in equities with the market toying with the idea that the Fed will raise rates by 100bps (1%). In fact there is a 25% chance the Fed will raise rates by 1% at their meeting next week. Regardless of how high they hike, 0.75% or 1%, the technical picture looks bearish as well. The S&P 500 may head back to test support at around 3,738 and June lows at 3,636. Noteworthy US market moves Moderna (MRNA:xnas) gained 6.2% after the company said it is open to selling Covid vaccines to China. Starbucks (SBUX:xnas) rose 5.5% after the company raised its sales and profit outlook, expecting 7%-9% p.a. comparable sales growth and 15-20% earnings growth over the next three years. Twilio (TWLO:xnys) jumped 10% after announcing a plan to cut 11% of its workforce. Shares of railroad operators dropped on probable labor strike, Union Pacific (UNP:xnys) -3.7%, CSX (CSX:xnas) -1%. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) The flattening went on for a second day in a row as traders took to their hearts that the Fed would be hawkish for the rest of the year and the odds for cracking the economy down the road increased. While 2-year to 10-year yields climbed 2 to 4 basis points, the yield of the 30-year long bond continued to slide and finished the session 6bps lower at 3.45%.  Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Shares traded in Hong Kong, Shanghai, and Shenzhen declined on the back of the U.S. stocks’ worst day in more than two years, Hang Seng Index -2.5%, CSI 300 -1.1%. Industrials, semiconductors, and healthcare were among the top losers, Techtronic Industries (00669:xhkg) -10.0%, Hua Hong Semiconductor (01347:xhkg) -5.7%, Wuxi Biologics (02269:xhkg) -4.9%, BeiGene (06160:xhkg) -4.5%. Tech hardware stocks declined following a 31.2% YoY falls in China’s smartphone shipments in July, Sunny Optical (02382:xhkg) -4.2%, Xiaomi (01810:xhkg) -3.3%. China internet stocks traded weak, Hang Seng Tech Index (HSTECH.I) -2.8%, Bilibili (09626:xhkg) -5.2%, Baidu (09888:xhkg) -5.7%, JD.COM (09618:xhkg) -4.2%, Alibaba (09988:xhkg) -4.1%. Fosun (00656:xhkg) tumbled 6.9% on unconfirmed reports claiming that a couple of Chinese regulators had told investors to review their equity and credit exposures to Fosun.  Bank of Japan’s rate-checking: a precursor to direct intervention or just more of verbal intervention? Even as the USD stayed firm overnight, USDJPY retreated from near-145 levels to 143 amid fears of potential FX intervention by Japanese authorities. On Wednesday, the BOJ conducted a so-called rate check in the market, asking for an indicative price at which it could buy yen, a move widely seen as a precursor to intervention. Both the finance minister and the nation’s top currency official also warned that all options were on the table. Japan last intervened to buy the yen in 1998.The 145-level is becoming the tolerance limit for Japanese authorities, but real intervention lack so far and only volatility goes up as threats ramp up. Yen lacks conviction for strength due to fundamental weakness stemming from yield differential with the US. Crude oil (CLU2 & LCOV2) Crude oil prices gained momentum overnight and remained steady in early Asian hours amid reports of the White House looking at refilling its strategic reserves at around $80/barrel. EIA’s weekly inventory report was mixed, with a large build in crude oil and a fall in gasoline. WTI futures rose above $88/barrel while Brent was above $94. Demand side factors also saw a modest improvement with Chinese city of Chengdu looking at easing restrictions from today. However, a looming rail strike in the US is likely to cause some disruption in the commodity markets.   What to consider? US core PPI hotter-than-expected US August PPI relieved some of the pressures seen from the CPI report a day earlier with the headline still in negative territory at -0.1% m/m (exp. -0.1%; prev. -0.4%) and slightly softer on a y/y basis at 8.7% (exp. +8.8%; prev. +9.8%). Core measure however beat expectations at 0.4% m/m (exp. +0.3%; prev. +0.3%) and 7.3% y/y (exp. +7.1%; prev. +7.7%). Lower energy prices helped to cool the headline print, and this may mean somewhat softer CPI prints in the coming months, but still inflation remains uncomfortably higher than the Fed’s 2% target. UK CPI cools but no relief for BOE UK inflation eased slightly to come in at 9.9% y/y (prev. 10.1%, exp. 10.0%) and 0.5% m/m (prev. 0.6%, exp. 0.6%), but it isn’t enough to call for a peak in inflation yet. Prime Minister Liz Truss announced plans to freeze an increase in energy bills due to hit in October, a move economists say will reduce the severity of a further spike in prices this winter. Even with those measures, inflation will remain above the BOE’s 2% goal well into next year. President Xi and President Putin are expected to meet in person for first time since February On the sidelines of the Shanghai Cooperation Organization summit held in Uzbekistan today and tomorrow, President Xi and President Putin are expected to meet up for the first time after Russia’s invasion of Ukraine. Analysts are expecting the two leaders to discuss the sale of Russian oil and natural gas to China and the use of the rubble and the renminbi to settle bilateral trade, in addition to their positions regarding the respective core interest of each side, i.e. Ukraine and Taiwan.  Newswires suggest that the US is considering sanctions on China A Reuters story citing an anonymous source suggests that the U.S. is considering options for a sanctions package against China as part of its attempts to deter China from taking military actions against Taiwan. The story further says that the European Union is under pressure to follow suit.  China’s state-owned media downplayed the importance of the 7-handle in the Yuan State-owned China Securities Journal downplayed the importance of whether the renminbi breaks 7 the figure or not and says that there is no basis for the renminbi to depreciate in the long run. Australia’s jobs data out today will be watched closely by the RBA, when determining how much to rise rates by in October Today’s employment data is expected to show Australia’s unemployment rate remained at 50-year lows, at 3.4% in August. The RBA will also be watching to see how much employment changed in August. In July employment fell from its record high, with 41,000 jobs lost. As for today’s figures to watch; Bloomberg’s survey of economists expect 35,000 jobs to have been added last month. If more jobs are added than expected, you may see a selloff in growth sectors, such as technology, consumer discretionary and property as the RBA will have more room to hike rates. Inversely, employment falls and or unemployment rises, the RBA will have less room to hike and as such you may see an equity rally. Currently RBA interest rate futures expect rates to rise by 0.25% next month. For those watching currency markets, keep in mind the AUDUSD is being pressured to 2-year lows. However if data is stronger than expected, you may see a short lived-knee jerk rally the AUDUSD.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-15-sept-2022-15092022
The USD/CNH Pair Remains On The Bear’s Trend

US Dollar Traded Sideways In A Relatively Quiet Manner

TeleTrade Comments TeleTrade Comments 15.09.2022 10:07
USD/CNH needs to clear the 7.0000 hurdle to allow for a more convincing gains, comment FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang. Key Quotes 24-hour view: “We indicated yesterday that USD ‘is likely to advance further even though it is left to be seen if it can break the major resistance at 7.0000’. Our expectations for further advance did not materialize as USD traded sideways in a relatively quiet manner between 6.9619 and 6.9850 before closing largely unchanged at 6.9750 (-0.09%). The movement appears to be part of a consolidation and further sideway trading would not be surprising. Expected range for today, 6.9620/6.9880.” Next 1-3 weeks: “Yesterday (14 Sep, spot at 6.9820), we indicated that while upward momentum is building again, USD has to close above 7.0000 before a sustained advance is likely. We added, ‘support is at 6.9550 but only a breach of 6.9400 would indicate that USD is not ready to move above 7.0000’. There is no change in our view for now.”  
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

Monetary Policy Of The Bank Of Japan Affects To The Position Of The Yen (USD/JPY)

TeleTrade Comments TeleTrade Comments 15.09.2022 10:40
The discrepancy between monetary policy against the Bank of Japan and the rest of the G10 central banks is taking its toll on the yen. Thus, the JPY will remain weak until the BoJ shifts gears, economists at Nordea report. Loose monetary policy is the problem for JPY “FX intervention will not be looked upon as welcomed by the remaining G7 countries if Japan unilaterally decides to intervene, and we believe that the bar for actual intervention is quite high and that the JPY would need to come above 148 against the USD before a real intervention is in the cards.” “What will stop the yen-weakening is a shift in monetary policy from the Bank of Japan. Such a shift could easily come when the current BoJ Governor Kuroda retires in April 2023. We thus expect the JPY, which is the worst G10 performer against the USD this year, to recover most of its losses next year.”
Further Downside Of The AUD/JPY Cross Pair Is Expected

The Australian Dollar The US Dollar Pair Is Close To The July Low

TeleTrade Comments TeleTrade Comments 15.09.2022 10:49
AUD/USD is in the vicinity of the trough formed in July at 0.6680 which is also the lower band of a descending channel. A break below the latter would clear the way towards 0.6620, then  0.6540/0.6465, economists at Société Générale report. Break above 0.69 needed to see a rebound “The pair has recently failed to reclaim 50-DMA near 0.6900; this hurdle must be crossed for an extended bounce.”  “In case it fails to defend 0.6680, ongoing downtrend could extend towards next projections at 0.6620 and 0.6540/0.6465.”
Analysis Of Situation Of The US Dollar To Swiss Franc Pair (USD/CHF)

The US Dollar To The Swiss Franc (USD/CHF) Pair Is Going Towards The Bulls

TeleTrade Comments TeleTrade Comments 15.09.2022 10:53
USD/CHF climbs to a multi-day high and draws support from a combination of factors. A positive risk tone undermines the safe-haven CHF and acts as a tailwind for the pair. Bets for aggressive Fed rate hikes revive the USD demand and contribute to the uptick. The USD/CHF pair regains some positive traction on Thursday and touches a four-day high, though the uptick stalls just ahead of mid-0.9600s. Nevertheless, the pair manages to stick to modest intraday gains through the early European session and is currently placed around the 0.9625 area. Signs of stability in the equity markets undermine the safe-haven Swiss franc and act as a tailwind for the USD/CHF pair. The US dollar, on the other hand, attracts fresh buying amid firming expectations for a more aggressive policy tightening by the Fed. This was seen as another factor lending some support to spot prices. Tuesday's stronger US CPI report fueled speculations that the Fed will hike interest rates at a faster pace to tame inflation. In fact, the implied odds for a full 1% lift-off at the September FOMC meeting currently stand at 30%. This remains supportive of elevated US Treasury bond yields and continues to benefit the USD. That said, the lack of any follow-through buying warrants caution before positioning for an extension of the stronger US consumer inflation-inspired recovery from a nearly one-month low. Nevertheless, the fundamental backdrop suggests that the path of least resistance is to the upside and seems tilted in favour of bullish traders. Market participants now look forward to the US economic docket, featuring Retail Sales figures, Weekly Initial Jobless Claims, Regional Manufacturing Indices, and Industrial Production data. This, along with the US bond yields, will influence the USD. Apart from this, the broader risk sentiment should provide some impetus to the USD/CHF pair.
Analysis Of The EUR/JPY Pair Movement

Intervention Of Bank Of Japan Will Not Stop The USD/JPY Pair Upmove

TeleTrade Comments TeleTrade Comments 15.09.2022 11:00
The yen has plunged 25% since March against the US dollar. Therefore, talks of Bank of Japan (BoJ) intervention have increased. Nonetheless, economists at Société Générale believe that currency intervention will not deter the USD/JPY pair upmove. Two conditions necessary for a sustainable reversal in the JPY “We see two conditions necessary for a sustainable reversal in the JPY: 1/ the BoJ abandons curve control (10y JGB cap 0.25%); 2/ a recession unfolds in the US and causes Treasury yields to crumble.” “Unilateral intervention could keep USD/JPY from scaling new highs but won’t be enough to reverse the downtrend.”
Navigating the Inverted Yield Curve: Implications for Currencies and Central Banks User

Will The US Dollar Continue To Be Strong And To Keep Growing Or Maybe Situation Will Be Reversed

InstaForex Analysis InstaForex Analysis 15.09.2022 11:04
The US currency was swirled by a whirlwind of continuous movement, not giving it a break for almost a minute. The dollar has to be constantly in good shape to act ahead of the euro and other currencies. Against this background, experts fear the depletion of "dollar forces" and the subsidence of the USD in the long term. According to market players and analysts, the rally that led the greenback to the peak of the price since 1985 will continue. However, this causes great inconvenience to other currencies, up to their collapse. As a result, the means of payment of other countries are plunging against the USD or require a rapid increase in rates in order not to be at the bottom. The dollar's strong growth against a basket of currencies (by 15% in 2022) dealt a crushing blow to financial markets. The main victims were the euro and the yen, which collapsed to lows over the past 20 years. The pound had the hardest time, which fell to its lowest in 40 years. The catalyst for the widespread collapse of the market was the "hot" data on inflation in the United States. According to a report published on Wednesday, September 14, US inflation increased markedly in August, and decreased less year-on-year than the market expected. In the last month of summer, the consumer price index (CPI) increased by 0.1%. At the same time, experts expected the indicator to fall by 0.1% amid a steady decline in gasoline prices. However, this factor did not work due to a sharp increase in consumer spending in the United States. According to current data, the basic consumer price index in the country increased by 0.6%, which is twice as much as expected. At the same time, the annual core inflation rate soared from July's 5.9% to 6.3%. According to analysts, this is the highest value recorded after a 40-year high reached in March. In the current situation, gasoline prices in the United States fell by 10.6% on a monthly basis, but were partially neutralized by rising prices for LNG and electricity. However, in the future, the effect of cheaper energy came to naught due to the rapid growth of housing and medical care prices (they increased by 0.7% and 0.8%, respectively). Against this background, analysts' forecasts for a further rise in the interest rate by the Federal Reserve by 1 percentage point (pp) have intensified. Many experts began to lay such an increase at the Fed's next meeting, which is scheduled for September 20-21. Some of them expect an increase in a smaller volume (only by 0.75 percentage points). According to analysts, the current situation provides significant support to the dollar and at the same time is a challenge to global central banks. Many world central banks were faced with a choice: to observe the weakening of national currencies or slow down this process by selling USD and raising their rates. The current macro data from the United States turned out to be negative for the markets, experts summarize. At the same time, the Fed management recognizes that inflationary pressure in the country remains high and hinders economic growth. However, the central bank turned out to be a hostage to the situation, since in order for inflation to return to the 2% target, it is necessary to continue raising rates, and this should be done in an accelerated mode. Against this background, the US currency has steadily risen in price against the European one. The EUR/USD pair was trading at 0.9965 on Thursday morning, September 15. Since August inflation in the United States turned out to be higher than forecasts, market participants expect the Fed to raise the rate further (by 75 bps) at the upcoming meeting. Many experts are sure that now there are almost no factors that can prevent the dollar's growth. According to Rabobank's currency strategists, while US rates are rising, the greenback will strengthen. Analysts believe that this strengthening will continue until the end of 2022 and the beginning of 2023. The "tailwind" for the USD is the reliability and relative stability of the American economy. However, the prolonged strengthening of the greenback creates problems for US trading partners, as the growth in the value of imports denominated in dollars increases. This hinders the curbing of rampant inflation in a number of countries, experts emphasize. Asian countries, especially commodity importers, suffer the most in this situation. Against this background, the Japanese yen turned out to be the biggest outsider, which rapidly and sharply plunged. According to experts, the dollar rally will end sooner or later, but the timing of its completion is difficult to predict. According to economists, in the long term, a rate hike in the United States, which should slow down the economy, will play against the greenback. However, the Fed will have to take measures to slow down the national economy in order to reduce the current level of inflation. The result is a vicious circle, from which it is difficult for the dollar to get out. Currently, many market players are betting on USD growth, but analysts urge caution in this matter. In the short term, such tactics provide significant support to the greenback. At the moment, the market is in the process of reassessing expectations about the future course of the Fed's monetary strategy, especially regarding rates. Current economic reports from the United States increase the likelihood of a third consecutive Fed rate hike by 75 bps at the next meeting scheduled for September 20-21. Against this background, the markets allow an increase in the key rate by 100 bps at once, experts summarize.   Relevance up to 08:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/321776
EUR/USD Pair Has Potential For The Downside Movement Today

Will The EUR/USD Pair Keep Positive Sings And Will The Demand For The Euro Return?

InstaForex Analysis InstaForex Analysis 15.09.2022 11:12
Yesterday was one of those days where all the signals worked out in a good positive direction, and there were a lot of them. Let's take a look at the 5-minute chart and figure out what happened. I paid attention to the 0.9973 level and the 1.0014 level in my morning forecast and advised making decisions on entering the market. The bulls protecting support at 0.9973 resulted in an excellent signal to buy the euro in the morning, which resulted in an increase of more than 40 points to the 1.0014 area. I expected bears to be active. A false breakout at this level led to a short signal, which resulted in the pair falling back to 0.9973 after the US inflation data, allowing another 40 points of profit to be taken. A false breakout at 0.9973 in the afternoon, by analogy with the morning entry point, also gave a signal to buy, after which the euro moved up by 30 points. When to go long on EUR/USD: Producer prices in the US coincided with economists' forecasts, which allowed the market to remain balanced. However, trading below parity still indicates the bears' advantage, so the pressure on the pair can return at any moment - especially if the statistics for the euro area disappoint again, and as we know, there is nothing much to rejoice there. Expected data on the consumer price index in Italy and the balance of foreign trade in the eurozone. The speech by European Central Bank Vice-President Luis de Guindos will deal with the future of the euro area's monetary policy, which is clearly defined due to high inflation in the region. This may provide some support for the euro, similar to yesterday. In case the pair is under pressure again, it is best not to rush. The optimal buying scenario would be a false breakout near the new support at 0.9957, as the bulls failed to beat the parity yesterday. This will provide an entry point for an upward correction with immediate recovery target towards 0.9996. As I noted above, the statements of the ECB representatives can help the euro if it continues to aggressively raise interest rates. A breakthrough and a downward test of 0.9996 will hit the bears' stop orders, which creates another signal to open long positions with the possibility of a surge up to the 1.0038 area, just below which there are moving averages playing on the bears' side. A more distant target will be resistance at 1.0079, where I recommend taking profits. If the EUR/USD falls and there are no bulls at 0.9957, the pressure on the pair will increase. The optimal decision to open long positions in such conditions would be a false breakout near the low of 0.9922. I advise you to buy EUR/USD immediately on a rebound only from 0.9880, or even lower - in the area of 0.9849, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears managed to give an excellent rebuff to the bulls yesterday and retained control over the market. As long as the trade is below parity, the euro has every chance of a new wave of decline. The bears' main task for today is to protect the nearest resistance in the parity area of 0.9996, the test of which may occur in case of good statistics on the euro area. I expect large players to appear in the market from 0.9996. Together with a false breakout at this level, short positions will be opened in order to further move the euro down to 0.9957. A breakdown and consolidation below this range with a reverse test from the bottom up creates another sell signal with the removal of bulls' stop orders and a larger fall of the pair to the 0.9922 area. I recommend taking profit there. A more distant target will be a low of 0.9880, but this is in case the bulls lose all interest in the euro after good statistics on retail sales in the US in the afternoon. In case EUR/USD jumps during the European session, and the bears are not active at 0.9996, an upward correction will lead to the next resistance at 1.0038, just below which there are moving averages playing on the bears' side. In this scenario, I recommend opening short positions from 1.0041 only if a false breakout is formed. You can sell EUR/USD immediately for a rebound from the high of 1.0079, or even higher - from 1.0118, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT report) on September 6 logged a decline in short positions and a sharp increase in long positions. Considering that all this was ahead of the European Central Bank meeting, at which the central bank raised interest rates by 0.75% at once, such changes are not surprising. With an ever smaller gap in interest rates between the Federal Reserve and the ECB, the demand for the euro will gradually return, but you need to understand how difficult the European economy is now and how difficult it will be for this winter period - especially with such high energy prices due to the deficit. In the US, the Fed also plans to raise interest rates by 0.75% as early as next week, but quite a lot will depend on what inflation data comes out. If the growth rate of consumer prices remains at a high level, the central bank will not hesitate for a long time. The COT report indicated that long non-commercial positions rose by 3,019 to 205,277, while short non-commercial positions decreased by 8,308 to 241,626. As of the end of the week, the overall non-commercial net position remained negative, but rose slightly to - 36,349 against -487,676, which indicates the first prerequisites for building an upward correction for the pair and finding the bottom. The weekly closing price decreased and amounted to 0.9917 against 1.0033. Indicator signals: Moving averages Trading is below the 30 and 50-day moving averages, indicating a return to the bears' market. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of a decline, the lower border of the indicator around 0.9957 will act as support. In case of growth, the upper border of the indicator in the area of 1.0005 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 08:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321770
The USD/JPY Price Seems To Be Optimistic

Look At Economic Situation Around The US Dollar-Yen Pair

InstaForex Analysis InstaForex Analysis 15.09.2022 11:20
After yesterday's pullback, the USD/JPY pair almost froze in flat, waiting for the next triggers. Today's macro data from the US should be the decisive factors that will set the route for the asset. In the middle of the week, the dollar-yen pair could not stay near the level of 145, where it ended up on Tuesday thanks to unexpected statistics on US inflation. Recall that in August, the consumer price index in the United States fell to 8.3% from the previous value of 8.5%, but exceeded market expectations. Economists had forecast annual inflation at 8.1%. The fact that inflationary pressures eased less than expected further strengthened traders' confidence in the Federal Reserve's determination regarding interest rates. Now the markets estimate a 63% probability of a September increase in the indicator by 75 bps. Expectations of a maximum rate hike – by 100 bps - also increased significantly. These hawkish scenarios gave a strong boost to the dollar, which has already risen by more than 20% against the yen since the beginning of the year due to discrepancies in the monetary policy of the Fed and the Bank of Japan. The USD/JPY pair again came close to the key mark of 145 on Tuesday, which, apparently, is a red line for the Japanese government. In order to prevent the yen from collapsing below this level, the Japanese authorities again intensified verbal intervention on Wednesday. However, verbal warnings no longer scare the market as much as they used to. Yesterday, the yen was able to recover only due to the fact that Japanese officials finally stirred. The exchange rate check initiated by the BOJ was the first harbinger of a possible actual intervention. Against this background, the dollar retreated, but, it seems, not for long. This morning, the greenback is trying to grow within a narrow price range. In Asian trading, a small support for the USD/JPY pair was provided by the comment of the representative of the ruling Liberal Democratic Party of Japan, Satsuki Katayama. The official said that the Japanese government will not be able to contain the further depreciation of the yen on its own, since the country does not have effective means to combat the rapid depreciation of the exchange rate. Also a positive factor for the asset was the report published on Thursday by the Ministry of Finance of Japan. According to the data, in August the country faced the largest trade deficit in the entire history of observations. Last month, the indicator increased from 1.43 trillion yen to 2.82 trillion yen. The gap turned out to be much larger than economists had predicted (2.4 trillion yen). The record growth of the trade deficit is caused by a sharp jump in imports of goods and services. In August, due to high energy prices and the fall of the yen, the indicator rose to 49.9% against the previous value of 47.2%. The trade deficit has been observed in Japan for 13 months. This is the longest period in the last seven years. The negative trade balance undermines the recovery of the country's economy. This is another argument in favor of the fact that the BOJ will not decide to change its monetary policy in the near future. Most analysts believe that the monetary divergence between Japan and the United States will continue to grow, as a result of which the pressure on the yen will remain. Experts expect increased volatility of the USD/JPY pair ahead of the meetings of the Fed and the BOJ, which will be held next week. As for the current dynamics of the asset, today the dollar can again demonstrate growth against the yen, if, of course, it receives support from macroeconomic statistics. A large portion of data is coming out on Thursday, but traders will be focused on retail sales for August. Economists predict that retail sales increased by 0.2% last month, after the indicator remained unchanged in July. The technical picture also shows the growth of the USD/JPY pair. Bulls are now getting hopeful for a firmer RSI and bullish MACD signals.   Relevance up to 08:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/321784
Long-Term Rates Diverge Amid Policy Divergence and Economic Signals

The GBP/USD Pair: Will The Pair Move As Indicated By The Forecasts?

InstaForex Analysis InstaForex Analysis 15.09.2022 11:30
Several good market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1509 level and the 1.1561 level in my morning forecast and advised making decisions on entering the market. As a result of a breakthrough of 1.1509 and a reverse downward test, a good signal was formed in continuation of the bear market, but alas, the pair did not fall further. The latest data on UK inflation pushed the pound to rise closer to the middle of the day, after which the bears defended 1.1561, which formed a sell signal. As a result, the downward movement was about 30 points. The bears also defended the new resistance at 1.1567 several times in the afternoon, which provided excellent market entry points. When to go long on GBP/USD: Slower inflation in the UK made it possible for the British pound to slightly correct yesterday, but the fact that it is at a double-digit level will not allow us to expect that the Bank of England will abandon its overly aggressive monetary policy in the near future, which in the current environment creates quite serious problems for the economy and puts pressure on the pound. For this reason, I advise you not to rush into long positions. Taking into account that there are no fundamental statistics on the UK today, the most convenient scenario for opening longs will be a false breakout in the area of the nearest support at 1.1495, formed on the basis of yesterday. In this case, the goal to recovery will be 1.1543, where the moving averages are, playing on the bears' side. A breakthrough and test of this range could pull speculators' stops in its wake, creating a new buy signal on the rise to the more distant 1.1585 level, allowing the bulls to stop the bear market and move trading into a horizontal channel. The farthest target will be the area of 1.1631, where I recommend taking profits. In case the GBP/USD falls and there are no bulls at 1.1495, the pair will be under pressure again, which will open up the prospect of updating the September low. In this case, I advise you to postpone longs until the next support at 1.1452. I recommend opening longs on GBP/USD immediately for a rebound from 1.1406, or even lower - around 1.1358, counting on correcting 30-35 points within the day. When to go short on GBP/USD: The bears have regained control of the market and now it is very important to cling to the nearest support at 1.1495. But you also need to think about how not to release the pair above 1.1543, where the moving averages are located - if you miss this level, you can quickly lose the initiative. The optimal scenario for opening short positions on GBP/USD would be forming a false breakout in the area of 1.1543, the growth to which may occur in the first half of the day, by analogy with yesterday. This will lead to a sell signal with the goal of returning to the 1.1495 area. In order to seriously declare themselves and build a new bear market, bears need a breakdown and test of 1.1495, which will provide a good entry point for shorts with a fall to the level of 1.1452. The farthest target will be the area of 1.1406, where I recommend taking profits. In case GBP/USD grows and the bears are not active at 1.1543, the pound could sharply rise, which creates a chance for an upward correction. Only a false breakout near the next resistance at 1.1585 will provide an entry point to short positions, hoping that the pair moves downward. If traders are not active there, I advise you to sell GBP/USD immediately for a rebound from 1.1631, counting on the pair's rebound down by 30-35 points within the day. COT report: An increase in short positions and a decrease in long ones were recorded in the Commitment of Traders (COT) report for September 6. This once again confirms the fact that the British pound is in a major downward peak, from which it is not as easy to get out as it might seem. Last week, Bank of England Governor Andrew Bailey made a speech, who did his best to inspire confidence that the central bank will continue to follow the path of defeating inflation and continue to aggressively raise interest rates. This suggests that at its next meeting the committee will probably raise rates by 0.75% at once, following the example of other central banks. However, the UK economy is getting worse and worse, and GDP is shrinking quite quickly, as evidenced by recent reports, which does not give confidence to investors. With high inflation and a looming cost-of-living crisis in the UK, it will be quite difficult for bulls to get room to take long positions as nothing good is in store for the stats ahead. The latest COT report indicated that long non-commercial positions decreased by 5,746 to 52,731, while short non-commercial positions rose by 15,516 to 103,163, which led to an increase in the negative value of the non-commercial net position to -50,423 versus -29,170. The weekly closing price collapsed from 1.1526 against 1.1661. Indicator signals: Trading is below the 30 and 50-day moving averages, indicating a resumption of the bear market. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair falls, the lower border of the indicator around 1.1510 will act as support. In case of growth, the upper border of the indicator around 1.1570 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 08:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321772
Gold Has A Chance For The Rejection Of The Support

The Gold: The Strong Downside Momentum And Sellers Are In Control

InstaForex Analysis InstaForex Analysis 15.09.2022 11:40
Technical analysis: Gold has been trading downside as I expected. I found that downside momentum is still strong and there is potential for bigger drop. Trading recommendation: Due to the strong downside momentum and potential test of major support cluster at $1.680, I see further downside movement. Watch for the selling opportunities with the downside objective at the price of $1.575. Stochastic oscillator is showing fresh downside cross, which is good sign that sellers are in control. Key resistance is set at the price of $1.729     Relevance up to 09:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292908
The Run Higher In Japanese Yields Is Likely To Create Further Volatility In Global Markets

USD/JPY Is Trading Near 145.00. S&P 500 And Nadaq Increased Slightly Yesterday

ING Economics ING Economics 15.09.2022 11:44
Markets show cautious recovery after US CPI-induced rout - eye's on the BoJ as its verbal intervention looks increasingly desperate  Source: shutterstock Macro outlook Global Markets: The steer from yesterday’s equity futures proved an accurate one, and US equities made small gains yesterday. The S&P500 rose 0.34%, and the NASDAQ rose 0.74%. A further modest recovery is indicated today. Short-dated US Treasury yields continue to rise though, with the yield on the 2Y Treasury rising 3.2bp to 3.788%. 10Y yields were broadly unchanged at 3.40%. EURUSD hasn’t moved much since yesterday and is at 0.9983 currently. The AUD has traded in a very similar pattern, and remains at 0.6757. GBP has shown a bit more life and has recovered to 1.1546, while the JPY has managed to make some decent gains to 142.83, after the BoJ “rate check” yesterday (see more below), though few expect this JPY strength to continue unless there is some real change in the underlying policy stance. The BoJ is running out of “verbal” tools to check the yen’s slide without such changes. The rest of the Asia pack yesterday was broadly weaker, but much less so than a pure catch-up with the G-10 currencies would have suggested. Better fundamentals (lower inflation for one) and some background intervention are helping smooth the volatility in Asian currency markets for now. The KRW was the day’s worst performer, as is often the case in a weak market. USDKRW is now 1391. G-7 Macro: Yesterday’s US PPI figures showed some moderation in both core and headline PPI inflation, though the core numbers did not fall as much as had been forecast. The UK also saw inflation dip below 10%, but core inflation continued to rise, so this is probably going to be a short-lived dip. Eurozone trade data could be another excuse for EUR weakness. The trade deficit is forecast to widen further to EUR32bn (July figures). The US publishes August industrial production this evening. It is expected to make no progress following last month’s 0.6%MoM increase.  Australia: August labour market data are out later this morning (0930 SGT). The forecast employment change (+35,000) looks a bit low to us given the widespread labour shortages reported. This is an important report for the RBA, which has indicated that it may be prepared to slow the pace of its rate hikes if data permits. Participation rates and the unemployment rate complete the overall picture for employment today. China: While the PBoC seems to be trying to slow the pace of CNY decline, we don’t believe there is much likelihood that they will consider any further cuts to the 1Y Medium Term Lending Facility (1Y MLF) today. The current rate is 2.75%, down from 2.85% when it was lowered last month. Japan: The Bank of Japan’s “rate check” appears to have been effective in protecting a ceiling of USDJPY145. This should stabilize the currency, at least temporarily . The market is now slowly digesting the Fed’s next giant step at its September meeting. The rate-checking and intensified verbal intervention by the authorities will likely have a greater impact on market expectations about the possibility of intervention. But we still think that the probability of actual intervention is low because unless the BoJ's monetary policy changes, it is doubtful that intervention will work. We think the market will try to breach the ceiling of 145 again as yield differentials will likely widen further with more aggressive Fed hikes (the market is pricing in a terminal Fed funds rate of 4.25%).  South Korea: The Bank of Korea expressed a hawkish stance on future policy direction In the minutes of the August MPC meeting, saying that it would like to continue its hiking cycle until early next year. There was a minority opinion that the pace of rate hikes should be adjusted as downside risks to growth emerged. However, considering the general hawkish stance of the MPC, including Governor Rhee, it seems likely that  the BoK will continue hiking until the early next year. In addition, Ms. Seo Young-Kyung, a hawkish member, said at an event that “a more active policy response is needed to respond to the inflationary pressure caused by the weak KRW.” We believe that the BoK continues to communicate to the market its intention to raise interest rates further by next year. However, as we expect growth to slow sharply by the end of the year, it is questionable whether the BoK will be able to maintain this stance in the face of a sharp slowdown in growth. Indonesia: August trade data is set for release today.  Both exports and imports are expected to post double digit gains with the overall balance likely in surplus.  Exports have benefited from elevated commodity prices while imports are likely to grow by more than 30%YoY as the pace of economic growth picks up.  The IDR has remained relatively more resilient this year as its favorable trade balance keeps the current account in surplus.  A relatively stable IDR and lower inflation than most of its peers has limited the pressure on the central bank to hike rate aggressively so far in 2022.  Bank Indonesia will likely sustain its measured pace of rate hikes but they could accelerate tightening should the IDR come under more intense depreciation pressure.  What to look out for: China activity data Japan trade balance (15 September) Indonesia trade balance (15 September) Australia labour market data (15 September) US initial jobless claims and retail sales (15 September) South Korea unemployment (16 September) Singapore NODX (16 September) China industrial production, retail sales and fixed asset (16 September) US University of Michigan expectations (16 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Escalating Russia-Ukraine Tensions Amplify Oil Supply Risks: The Commodities Feed

The Euro To The US Dollar Pair: Traders Expect A Downward Movement

InstaForex Analysis InstaForex Analysis 15.09.2022 11:45
Trend analysis (Fig. 1). The euro-dollar pair may move downward from the level of 0.9979 (close of yesterday's daily candle) to test 0.9942, the 76.4% retracement level (red dotted line). Upon reaching this level, an upward movement is possible to 1.0060, the 38.2% retracement level (white dotted line). From this level, the price may continue to move up. Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Bollinger bands – down; Weekly chart – up. General conclusion: Today, the price may move downward from the level of 0.9979 (close of yesterday's daily candle) to test 0.9942, the 76.4% retracement level (red dotted line). Upon reaching this level, an upward movement is possible to 1.0060, the 38.2% retracement level (white dotted line). From this level, the price may continue to move up. Alternative scenario: from the level of 0.9979 (close of yesterday's daily candle), the price may move downward to test 0.9912, the 85.4% retracement level (red dotted line). Upon reaching this level, an upward movement is possible to 0.9982, the 23.6% retracement level (white dotted line). From this level, the price may continue to move up.     Relevance up to 08:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321780
In The Coming Days Will Be The Final Consolidation Of Bitcoin

Bitcoin Is Keeping A Downward Trend, The Selling Opportunities

InstaForex Analysis InstaForex Analysis 15.09.2022 11:50
Technical analysis: BTC has been trading sideways in last few days at the price of $20.180. I see potential for the further drop. Trading recommendation: Due to the strong downside momentum in the background and triangle pattern in creation, I see potential for further drop. Watch for the selling opportunities in case of the downside breakout of triangle. Downside objectives are set at the price of $19.515 and $18.480. MACD oscillator is showing downside reading, which is good sign that sellers are in control. Key resistance is set at the price of $20.455 Relevance up to 09:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Read more: https://www.instaforex.eu/forex_analysis/292912
The Pound (GBP) Will Probably Continue To Move Sideways

The Pound To The US Dollar Pair May Move Downward Today

InstaForex Analysis InstaForex Analysis 15.09.2022 11:55
Trend analysis (Fig. 1). The pound-dollar pair may move downward from the level of 1.1535 (close of yesterday's daily candle) to the target at 1.1482, the 76.4% retracement level (yellow dotted line). When testing this level, an upward movement is possible with the target of 1.1613, the 23.6% retracement level (blue dotted line). Upon reaching this level, the price may continue to move up. Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – down; Volumes – up; Candlestick analysis – down; Trend analysis – up; Bollinger bands – down; Weekly chart – up. General conclusion: Today, the price may move downward from the level of 1.1535 (close of yesterday's daily candle) to the target at 1.1482, the 76.4% retracement level (yellow dotted line). When testing this level, an upward movement is possible with the target of 1.1613, the 23.6% retracement level (blue dotted line). Upon reaching this level, the price may continue to move up. Alternative scenario: from the level of 1.1535 (close of yesterday's daily candle), the price may move downward with the target of 1.1453, the 85.4% retracement level (yellow dotted line). When testing this level, an upward movement is possible.   Relevance up to 08:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321788
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

The USD/CAD Pair Has A Potential For The Upside Continuation

InstaForex Analysis InstaForex Analysis 15.09.2022 12:06
Technical analysis: USD/CAD has been trading sideways at the price of 1.3160 but I see potential for the upside continuation. Trading recommendation: Due to the symmetrical triangle pattern in creation and strong growth in the background, I see potential for the upside continuation. Watch for the buying opportunities on the intraday dips with the upside objective at the price of 1.3300. MACD oscillator is showing upside reading, which is good sign that buyers are in control. Support is set at the price of 1.3138     Relevance up to 09:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292916
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

Australian Dollar (AUD): What Does The Employment Data Mean To Reserve Bank Of Australia?

ING Economics ING Economics 15.09.2022 12:12
A 33,500 increase in employment was very close to the consensus expectation (+35,000), though the slight uptick in the unemployment rate may encourage the Reserve Bank of Australia (RBA) to slow to a 25bp hike at its next meeting 33,500 Employment gain From previous month As expected Not much to take away from this report With the headline employment number more or less in line with the consensus forecast, made up from a solid 58,800 increase in full time jobs, offsetting a 25,200 decline in part-time jobs, this report doesn't really signify anything for forthcoming RBA policy decisions. However, with the RBA suggesting that it is looking for excuses to slow the pace of tightening from here on, there is equally nothing here to stop them from doing that at their October meeting if nothing else comes along to upset that view.  Australian unemployment rate Turning point? Source: CEIC Unemployment rate ticks up One factor that helps the 25bp rather than 50bp view is that the unemployment rate ticked a bit higher in August, rising from 3.4% to 3.5%. The numbers of unemployed rose by 14,100 which mostly reflects an increase in those entering the labour force looking for work (possibly because it is harder to make ends meet with inflation running above 6%). So this doesn't really signify a genuine softening of the labour market. But it maybe signifies that this is coming closer.  Market reaction to the data was fairly muted, except for a temporary AUD sell-off as the figures were initially incorrectly reported as showing no employment change.  Read this article on THINK TagsReserve Bank of Australia Australian Unemployment Australian labor report Australian employment Australia Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Bitcoin Fall Will Likely Continue In The Future

The Main Topic Of The Cryptocurrencies Market: Bitcoin vs Ether And The Problem With The Ethereum Merge

InstaForex Analysis InstaForex Analysis 15.09.2022 12:13
ccording to market expectations, the transition of Ethereum from Proof-of-work to Proof-of-stake should take place today. Some say that this may lead to the fact that the second cryptocurrency will begin to take market share from BTC. Famous Bitcoin supporters have criticized the update and urge those who prefer the main cryptocurrency to prepare for war. Michael Saylor Criticizes "Misinformation" About BTC Energy Uses MicroStrategy Executive Chairman Michael Saylor argues that bitcoin mining can become a clean, profitable, and modern industry that generates hard currency for remote places in the developing world. Ahead of Ethereum's transition to proof-of-stake, Saylor spoke out against what he calls "misinformation and propaganda" about the environmental impact surrounding proof-of-work (PoW) BTC mining. On September 14, he shared a lengthy post on his Twitter account detailing his seven "high-level thoughts" on BTC mining and its impact on the environment. One of his key arguments was against PoW BTC mining being energy efficient. Instead, Saylor claims it is "the cleanest industrial use of electricity and is improving its energy efficiency at the fastest rate in any major industry." He backed up his argument with numbers taken from the Global Bitcoin Data Mining Review for the second quarter. The one was published in July by the Bitcoin Mining Council, a group of 45 companies that claim to represent 50.5% of the global network. Saylor emphasized: "Our metrics show ~59.5% of energy for bitcoin mining comes from sustainable sources and energy efficiency improved 46% YoY." An attempt to distract the authorities from the "inconvenient truth" Saylor's argument comes from the fact that the BTC mining industry has come under a lot of pressure due to its perceived environmental impact. This has even led some US states to take steps to ban cryptocurrency mining. Saylor claims that the continuous improvement of the network and the "relentless improvement in the semiconductors" make mining much more energy efficient than big tech companies like Google, Netflix or Facebook. "Approximately $4-5 billion in electricity is used to power & secure a network that is worth $420 billion as of today," Saylor said. "This makes Bitcoin far less energy intensive than Google, Netflix, or Facebook, and 1-2 orders of magnitude less energy intensive than traditional 20th century industries like airlines, logistics, retail, hospitality, and agriculture." Saylor also stated that 99.92% of the world's carbon emissions come from industrial uses of energy other than bitcoin mining. Looking at the numbers, Saylor doesn't think environmentalists' arguments condemning PoW mining are fair. Rather, in his opinion, this is an attempt to "focus negative attention on Proof-of-Work mining" and distract authorities from the "inconvenient truth that Proof-of-Stake crypto assets are generally unregistered securities trading on unregulated exchanges." Saylor concludes by saying that all the negativity about PoW mining is detracting from the potential benefits for the world. "Bitcoin mining can bring a clean, profitable and modern industry that generates hard currency to remote locations in the developing world, connected only via satellite link." Jack Dorsey Questions Ethereum Merge Twitter co-founder Jack Dorsey also chose his side in the Bitcoin vs. Ethereum debate. Dorsey, a well-known supporter of the main cryptocurrency, questions the Ethereum merge. On Twitter, he posted a popular post by another popular Bitcoin maximalist, Scott Sullivan. In the very first line, Sullivan calls Ethereum a shitcoin and asks Bitcoin supporters to prepare for war. Sullivan believes that after the Ethereum merger, a narrative war will begin between Bitcoin and Ethereum. Sullivan believes that bitcoiners should be prepared to fight back in the event of such a war. While Sullivan's post is now a month old, Dorsey's timing is definitely surprising. What is the problem with the Ethereum merge? The Ethereum merge will change the Ethereum consensus mechanism from Proof-of-work to Proof-of-stake. Proof-of-Work, which is the consensus mechanism used by the top cryptocurrency, is considered to be extremely energy intensive. A recent White House report went so far as to consider a total ban on BTC mining. The Proof-of-stake model reduces PoW power consumption by 99%. However, Dorsey and Sullivan have serious questions about this model. Sullivan believes that PoS is based on the principle of disincentives. PoS cuts staked funds from validators in case of dishonest behavior. He also has claims that PoS is a permissionless system without rules that relies on subjective truth. He also believes that in PoS, money is power and the threat of centralization is a real problem. Sullivan and Dorsey point to OFAC's censorship of Tornado Cash as one such example. On the other hand, they believe that a PoW system is the answer that solves PoS problems. Dorsey is at odds with several influential figures because he believes Proof-of-work is the only correct system. Right now, Bitcoin dominance is at its lowest level in a very long time. Ethereum supporters believe that the second cryptocurrency has the potential to bypass Bitcoin after the merge. Dorsey's comments indicate that there is likely to be a major redistribution of power between the two largest cryptocurrencies. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 08:00 2022-09-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321778
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The GBP/USD Pair: It Is Worth Waiting To Make A Decision

TeleTrade Comments TeleTrade Comments 15.09.2022 12:35
GBP/USD comes under renewed selling pressure on Thursday, though lacks follow-through. Aggressive Fed rate hike bets revive the USD demand and exert some downward pressure. A positive risk tone caps the safe-haven buck and helps limit the downside for the major. The GBP/USD pair struggles to capitalize on the previous day's modest uptick and meets with a fresh supply on Thursday. Spot prices remain on the defensive through the first half of the European session, though manage to hold above the 1.1500 psychological mark. The US dollar catches fresh bids amid expectations for a more aggressive policy tightening by the Fed and turns out to be a key factor exerting some downward pressure on the GBP/USD pair. The stronger US consumer inflation data released on Tuesday all but confirmed that the Fed will hike interest rates at a faster pace. In fact, the implied odds for a full 1% lift-off at the September FOMC meeting currently stand at 30%. Furthermore, the markets have been pricing in the possibility of another supersized Fed rate hike move in November. This remains supportive of elevated US Treasury bond yields and continues to underpin the greenback. That said, a generally positive risk tone is capping gains for the safe-haven buck. Apart from this, prospects for a 75 bps rate hike by the Bank of England on September 22 offer support to the GBP/USD pair. This makes it prudent to wait for strong follow-through selling before positioning for an extension of the post-US CPI sharp retracement slide from a two-week high. In the absence of any relevant economic data from the UK, traders look forward to the US macro releases for some impetus later during the early North American session. Thursday's US economic docket features the release of monthly Retail Sales figures, Weekly Initial Jobless Claims, Regional Manufacturing Indices, and Industrial Production data. This, along with the US bond yields and the broader risk sentiment, will influence the USD and produce short-term trading opportunities around the GBP/USD pair.
UK Budget: Short-term positives to be met with medium-term caution

The Bank of England (BOE) And Public Inflation Expectations

TeleTrade Comments TeleTrade Comments 15.09.2022 12:41
The quarterly survey conducted by the Bank of England (BOE) showed that the public's expectations in Britain for inflation over the coming surged. Key takeaways   UK public inflation expectations for the coming year 4.9%. UK public inflation expectations for 12 months after that are 3.2%. UK public inflation expectations for 5 years' time are 3.1%. Net public confidence in BOE-7% vs -3% in May. UK public's year-ahead inflation expectations highest since the survey began in 1999.   Market reaction The pound fails to pay any heed to the BOE survey, with GBP/USD keeping its range around 1.1525, down 0.07% on the day.
British Pound (GBP) Supported By CPI, What's One Of The Possible Scenarios For GBP/USD?

British Pound (GBP) Supported By CPI, What's One Of The Possible Scenarios For GBP/USD?

Jing Ren Jing Ren 15.09.2022 08:16
GBPUSD finds support The pound bounces back as Britain’s core CPI stayed stubbornly high in August. The sharp decline came to a halt at the base of a previous bullish breakout at 1.1480. The RSI’s oversold condition attracted some bargain hunters in the demand zone. The support-turned-resistance at 1.1620 is the next hurdle where trapped buyers would be looking to exit. However, its breach would send Sterling back to 1.1730 on the 20-day moving average, suggesting that the bulls may not yet have had their last word. NZDUSD breaks key support The New Zealand dollar recovers over upbeat Q2 GDP. The pair came under pressure near a former support (0.6160) over the 20-day moving average. The long bearish candle is a sign of capitulation as the short-term mood tanks. A break below the psychological support of 0.6000 has invalidated the recent rebound and indicated that the path of least resistance is down. May 2020’s lows around 0.5920 could be the next target. An oversold RSI may cause a bounce to 0.6050 where trend followers could sell into strength. USOIL hits resistance WTI crude rallied after a slower increase in US inventories. From the daily chart’s perspective, sentiment remains downbeat after the price broke below the key support at 86.00. The bears may see bounces as opportunities to sell at a better price. The current recovery has met stiff selling pressure at 90.00 which coincides with the 30-day moving average. However, if the buy side manages to push past this supply zone, 94.00 could be next. 84.20 is the closest support and its breach could resume the downtrend below 81.30.
ECB press conference brings more fog than clarity

Reduction Of Public Debt And The Fight Against Inflation As The Priorities Of The ECB

TeleTrade Comments TeleTrade Comments 15.09.2022 12:45
European Central Bank (ECB) Governing Council member Gabriel Makhlouf said on Thursday that “raising interest rates is absolutely necessary.” “Reducing public debt 'should remain a key priority', Makhlouf added. He warned that “persistent inflation is damaging to economic stability.” Market reaction EUR/USD was last seen trading at 0.9986, 0.11% higher on the day.
Saxo Bank Podcast: The Upcoming Bank Of Japan Meeting, A Look At Crude Oil, Copper And More

Will The Bank Of Japan Take More Precise Measures To Fight Inflation And The Weakening Yen?

TeleTrade Comments TeleTrade Comments 15.09.2022 12:58
Japan’s ruling Liberal Democratic Party's (LDP) policy chief Koichi Hagiuda called for an additional stimulus package worth over JPY 30 trillion ($208.97 billion) to tackle the inflation and weak yen problem, Sankei newspaper reported. Key quotes "The supplementary budget of last year exceeded 30 trillion yen in size." "Considering the price rises, global economic slowdown and weak yen and so on since then, more fine-tuned measures than last year are necessary." Market reaction USD/JPY is falling back towards 143.00 on these headlines, trading at 143.29, still up 0.12% on the day. The pair hit a session high of 143.80 earlier this morning. USD/JPY pares intraday gains, retreats below mid-143.00s ahead of US macro data  
Binance Academy summarise year 2022 featuring The Merge, FTX and more

US Inflation Report And Its Impact On The Cryptocurrency Market

InstaForex Analysis InstaForex Analysis 15.09.2022 13:03
While the whole world is discussing the Ethereum Merge update, it is important to finally deal with the consequences of slowing down the rate of decline in the inflation rate. CPI reporting had a negative impact on the crypto market and caused a reduction in total capitalization to the level of $998 billion. However, this is only an impulsive reaction of investors to bad news. The consequences of this process in the medium term may be more disastrous. Inflation, the position of the Fed and the crypto market In the summer, Fed Chairman Jerome Powell said that the agency was changing its strategy for raising the key rate. The regulator abandoned the predictive indicator planning model and decided to focus on actual data. The Fed also said that it plans to end the current year with a neutral rate. Powell's statements removed the element of surprise, made Fed policy more transparent and gave investors hope. Markets took the theses of the head of the Fed as a transitional moment to the gradual easing of monetary policy. The peak of such sentiments occurred at the beginning of August, when the inflation rate fell above expectations. A glimmer of hope amid the endless fog of the liquidity crisis provoked other positive rumors. One of the initiators of the positive statements was Arthur Hayes, who believes that as we approach the November Senate elections, the markets will pump up the money supply. The slowdown in the rate of decline in the inflation rate put a bold dot on the likelihood of a change or easing of the Fed's current policy. After the publication of the CPI for August, an increase in the key rate by 75 basis points in September is a settled issue. In addition, the current order of movement of the price of Bitcoin and other financial instruments remains. New Rules for Bitcoin Price Movement Insufficient rates of inflation reduction are forcing the Fed to maintain the current level of influence on world markets. The withdrawal of liquidity and the increase in the key rate to strengthen the USD will continue. Considering this index, DXY remains the main financial instrument for the coming months. Bitcoin continues to maintain a close correlation with stock indices. Considering the macroeconomic situation, high-risk assets remain a single category of low-value investments at this stage. It follows that with active trading of BTC/USD, other cryptocurrencies and stock indices, the rule of mandatory DXY analysis remains. With a high degree of probability, when the US dollar index rises, Bitcoin and other cryptocurrencies go down or move flat. The publication of CPI reports caused opposite reactions from BTC and DXY. The inverse correlation of the two assets is obvious and should be a key element of active BTC/USD trading. BTC/USD Technical analysis Bitcoin managed to hold on to the $20.1k–$20.2k support area. The cryptocurrency successfully defended the $19.1k line following the results of yesterday's trading day, and moved to the stage of consolidation. In the coming days, we should expect a stabilization movement in the BTC/USD price without significant impulse movements. Technical metrics confirm this scenario. On the daily chart, the RSI index and the stochastic oscillator made a sharp reversal to the side. The MACD indicator has also completed an upward spurt and started moving in a flat direction. The publication of the CPI had a significant negative impact in both the short and medium term. Given the successful upgrade of Ethereum, we can soon expect a decrease in investment activity and a drop in the level of Bitcoin dominance. The main focus of the market will be on the altcoin, which may cause BTC to be undervalued. Demand and scarcity After a short consolidation, Bitcoin may resume its upward movement due to its growing scarcity in the market. Long-term investors continue to actively buy up BTC coins, reducing their volumes in the public domain. In addition, Bitcoin mining difficulty peaked at 32.045 trillion hashes. This means that mining a BTC block has never been so difficult. Accordingly, in the coming weeks, we can expect a local upward movement of Bitcoin to the $24k–$25k area due to its underestimation and growing scarcity. Medium-term prospects for Bitcoin Despite the rising inflation, the situation will begin to improve closer to winter. Most likely, the reason for this will be a significant reduction in liquidity and the aggravation of recession in the US economy. The combination of these factors will force the Fed to resume filling the markets with money, which will positively affect Bitcoin. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 10:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321796
China's Deflationary Descent: Implications for Global Markets

Positive Moods On European Markets, The USD/JPY Pair And Gold Are In Downtrend

InstaForex Analysis InstaForex Analysis 15.09.2022 14:06
Strong data from the US pushed markets up ahead of next week's meeting of the Federal Reserve. Reportedly, consumer inflation rose in August, while manufacturing inflation fell by 0.1% m/m and 8.7% y/y. The positive reaction of investors obviously indicated the growing hopes of a slowdown in inflationary pressures, which led to the rise of US stocks and slight correction of Treasury yields and dollar. Now, a lot depends on the Fed's decision on raising rates, more precisely on the level at which it will increase. The central bank will base its decisions on the level of inflation. So far, stocks are trading in both directions, with Asian ones having multidirectional dynamics before the start of the European trading session. Meanwhile, local investors won back yesterday's losses in European and US stocks. Dollar is also moving in different directions after Treasury yields rose by 0.46% to 3.428%. While it is not necessary to say that trading in Europe will definitely start in a positive way, a rebound may be seen in markets if positive sentiment continues. This may happen if data on retail sales and jobless claims in the US do not turn out to be disappointing. Forecasts for today: USD/JPY The pair is trading below 0.6725. If negative trends continue, the quote may continue to decline towards 0.6685. XAU/USD Spot gold fell below 1692.50 due to the uncertainty over the results of next week's Fed meeting. Quotes may continue to drop to 1680.50.       Relevance up to 06:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321760
Ethereum (ETH/USD) Is More Likely To See A Pull Back

Ethereum Might Turn Bullish From The Current Price

InstaForex Analysis InstaForex Analysis 15.09.2022 14:16
Technical outlook: Ethereum rose through the $1,654 intraday high on Thursday before pulling back sharply through $1,580. The crypto is again gaining ground. It is seen to be trading close to $1,595 at this point in writing. A push above $1,654 will open the door for a further advance as the bulls target the $1,800-10 zone in the next few trading sessions. Ethereum has already carved a meaningful larger-degree downswing between $2,031 and $1,423 as seen on the 4H chart. Furthermore, the counter-trend rally remained just shy of the Fibonacci 0.618 retracement seen around the $1,800-10 zone. The possibility remains for yet another attempt to test the $1,800 handle and also up to $1,900 before giving in to the bears. Ethereum might turn bullish from the current price action until $1,423 and $1,480 interim supports are in place. Prices have retraced from $1,790 through $1,560 in a corrective way and have found support around the Fibonacci 0.618 retracement of the previous rally between $1,480 and $1,790. A push above $1,675 will potentially confirm a test of the $1,800 handle. Trading plan: A potential rally back towards $1,800-10 against $1,423 Good luck!   Relevance up to 13:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292959
The US PCE Data Is Expected To Confirm Another Modest Slowdown

The US Yields And The US Dollar Likely Can Move In The Same Direction

Saxo Bank Saxo Bank 15.09.2022 14:26
Summary:  The US dollar remains firm after the shocking CPI data from Tuesday and with US Retail Sales for August today the latest data point ahead of the FOMC meeting next Wednesday, where a sizable minority are looking for 100 basis points from the Fed, while US long yields have run out of range to the upside. The Chinese yuan is trading weakly after China passed on easing rates any further overnight and despite the country moving to ease rules on property investment, with USDCNH hitting 7.00 today. FX Trading focus: USDCNH breaks above 7.00. USD eyes retail sales, new peak in long yields. The reaction in US yields and the US dollar after the far stronger than expected US August core CPI data from Tuesday is holding up well, with US yields all along the curve perched at or near the highs for the cycle and the 10-year US Treasury benchmark yield running out of range into the key high from June at 3.50%. The US Retail Sales report for August out shortly after this article is published is likely to drive the next step for US yields and the US dollar, which will likely move in the same direction. Somewhere out over the horizon, however, I wonder how the US dollar trades in the event a recession is afoot and investors are still marking down equities, not on a the challenge to multiples from higher yields, but on a profits recession. The past “norm” is for equities to only bottom out during the phase in which the Fed is rapidly easing to get ahead of a cratering economy. For now, the bout of risk off has seen NZD and NOK as the interesting pair of weakest currencies, with AUD and CAD not far behind and sterling struggling a bit more today, even as the market edges up the pricing of the Bank of England next week closer to 75 basis points (still only slightly more than 50/50 odds according to futures prices). Sterling almost can’t hope to perform well if risk sentiment But perhaps most importantly, the USD sell-off picked up its pace a bit today on USDCNH breaking above 7.00 for the first time since the summer of 2020 and despite constant PBOC pushbacks via setting the daily fixing stronger for the last three weeks and more on a daily basis. Overnight, China kept its rate unchanged as well, though there were a couple of bright spots in thew news from China overnight, as local authorities have listened to Xi Jinping’s calls for easing up on property investment with a raft of measures. As well, the Chengdu Covid lockdowns are easing. Still, any significant extension above 7.00 in USDCNH will have markets on edge, particularly if the 7.187 all time highs come into view. The USD strength and yield remaining pinned higher have emboldened prevented a further slide in USDJPY after USDJPY traded south of 143.00 overnight. We all know that the BoJ/MoF will more than likely step in if USDJPY trades north of 145.00 again, but note the more profound correction in crosses like AUDJPY, possibly a better place to speculate for a JPY resurgence if risk sentiment remains downbeat. That pair has rejected the recent extension above 97.00, though it probably needs to cut down through 95.00 together with tamer long global yields to suggest something bigger is afoot. Chart: AUDUSDThe Aussie caught a broad, if brief, bid overnight on a strong August jobs report, but wilted again in today’s trade as risk sentiment deflated once again and as the move lower in the CNH versus the US dollar picked up a bit of extra steam and crossed the psychologically important 7.00 level. Watching the lows for the cycle here below 0.6700 for a possible extension to at least 0.6500 on a break lower and a retest of the cycle lows from June. Table: FX Board of G10 and CNH trend evolution and strength.Interesting to note the CHF topping the leaderboard as EURCHF tries at the cycle lows today and Europe can’t get on the same page on its attempts to cap energy prices (drives risk of higher CPI outcomes and more CHF strength to offset). Elsewhere, the NZD is the weakest of the lot, while Japanese officialdom has impressed with its latest verbal intervention, as can be seen in the tremendous momentum shift over the last week in the broader JPY picture. Table: FX Board Trend Scoreboard for individual pairs.AUDNZD remains in a positive trend, but it’s at a multi-year range top as we watch whether a proper trend develops. Elsewhere, NZDUSD is grinding down into the psychologically challenging sub-0.6000 levels, while USDCAD is banging on the cycle resistance at 1.3200 and USDNOK is poking at local highs and only a bit more than a percent from its highest close since the pandemic panic of early 2020 around 10.25. Wondering if today will prove a pivot day for EURGBP that confirmed the up-trend. Upcoming Economic Calendar Highlights 1230 – US Weekly Initial Jobless Claims 1230 – US Sep. Empire Manufacturing 1230 – US Aug. Retail Sales Source: https://www.home.saxo/content/articles/forex/fx-update-usdcnh-breaks-above-700-usd-eyes-retail-sales-15092022
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

How Reform Of The Electricity Market Can Support The Euro Exchange Rate?

TeleTrade Comments TeleTrade Comments 15.09.2022 14:51
EUR/USD continues to trade below parity on Thursday. Economists at OCBC Bank highlight the key technical levels to watch. Price cap for gas imports and windfall levy to support the EUR “Mild bullish momentum on daily chart shows tentative signs of fading but RSI was flat. Consolidative trades likely.” “Support at 0.9960, 0.9910 levels. Resistance at 1.0060.” “In European Commission President Ursula’s state of the union speech, she said that the EU will launch a ‘deep and comprehensive’ reform of the electricity market. A swift move to firm up on the proposals on price cap for gas imports and windfall levy could help to ease price pressures and provide further support for EUR.” 
Kuroda Stayed On The Sidelines And The Yen Responded With Losses

Forex: Japanese Yen (JPY) - How Could BoJ's Intervention Look Like?

Jing Ren Jing Ren 15.09.2022 14:27
The yen has been, of course, on a wild ride lately. But there were some surprise moves yesterday which need some explaining, since they could shed some light on whether or not the USDJPY has hit a ceiling. There are some important implications for the future of the yen, and something traders need to be very careful about (hint: make sure stops are in place). The lead-up The yen has been weakening generally because the BOJ isn't raising rates while other central banks are. The BOJ isn't likely to raise rates in the foreseeable future, which makes the currency ripe for carry trading. On Tuesday, the USDJPY spiked higher after US CPI figures came out, because of speculation of an even stronger move by the Fed at the upcoming meeting. After the data, through the rest of the session, the pair drifted higher until it hit the 144.90 level, and then pulled back. That's when currency watchers noted that the BOJ had conducted a "rate check", and further announced a "doorstop" statement later in the day. The pair then pulled back rather dramatically, dropping over 180 pips in the course of a few hours. What is a "rate check"? The important thing isn't the check itself, but that it's something the BOJ does before it intervenes in the currency. Basically, the BOJ calls around to different banks asking what the exchange rate is. Presumably this is in preparation to take action, or to warn Japanese banks that action is likely. Read next: Australian Dollar (AUD): Reserve Bank Of Australia May Choose Less Aggresive Varaint As Unemployment Increased A Bit| FXMAG.COM That's why there was a reaction, but not a major move in the currency just yet. That it happened just as the pair was about to hit the 145.00 somewhat implies that's the level Japanese authorities will hold the line. That doesn't mean the market won't go above it marginally, or for brief periods. In fact, it would be expected that the market would "test" Japanese authorities to see if they actually will go through with intervention. What does intervention mean? It's been a couple of decades since the last time the currency pair moved up to similar levels, prompting a response from authorities. In that case, the pair got up to 147.00 and there was joint action from the US and Japan. The BOJ does conduct the operation, but it's at the direction of the Ministry of Finance, who "pay" for the move. Basically, the BOJ will buy yen on the market in a very large volume, enough to push the exchange rate down by several thousand pips all at once. The move is not pre-announced, and can happen more than once. The idea is precisely to keep the market from trying to push the pair up by "burning" out many of the long positions, and threatening to repeat at any moment. Read next: GDP Growth In New Zealand. Australia Unemployment Rate And Waiting For Initial Jobless Claims Report| FXMAG.COM That's why if you are trading with yen pairs over the next several weeks, as the USDJPY remains close to the 145.00, it's a very good idea to make sure your stops are in place and your portfolio is ready for a sudden, large move in the currency. But, remember, if the market behaves as the BOJ and MOF expect, then it's also quite possible that no intervention happens.
A Softer Labour Market In Australia And Its Possible Consequences

Australian Jobs Market Data, AUD/USD And Incoming Reserve Bank's Of Australia (RBA) Decision

Kenny Fisher Kenny Fisher 15.09.2022 16:35
The Australian dollar is showing little movement today after the solid Australian employment report. Australian employment rebounds The Australian labour market remains resilient, as indicated by a solid August employment report. The increase in employment of 33.5 thousand was very close to the consensus of 35 thousand, with the gain of 58.8 thousand full-time jobs especially impressive. The release was within expectations and the Australian dollar’s response has been muted. The unemployment rate ticked higher to 3.5%, up from 3.4%. The employment data likely will not change things for the RBA, which meets on October 6th. The RBA has delivered 50bp rate hikes four straight times, but may be looking to ease its tightening and guide the economy to a soft landing. If the RBA needs an excuse to hike by 25bp, it could hang its hat on the slight rise in the unemployment rate. Australia’s Inflation Expectations slowed to 5.4% in August, marking a third consecutive decline. This is a dose of good news for the RBA, which wants to ensure that inflation expectations do not become unanchored in an environment of red-hot inflation. Read next: Crude Oil Price Has To Struggle Through A Way Full Of Obstacles| FXMAG.COM In the US, the August inflation report resulted in plenty of volatility, as stock markets fell sharply before recovering. The US dollar rose sharply after inflation came in at 8.3%, higher than the forecast of 8.1%. The markets have been forced to recalibrate after assuming that inflation had peaked and the Fed would make a U-turn on policy. The Fed has been consistent in its hawkish message, and it seems that the markets are finally listening. The FOMC is expected to raise rates by 75bp, with market pricing showing plenty of fluctuation. Currently, there is a 74% likelihood of a 75bp increase, with a 26% of a massive 100pt hike. Gone is the anticipation of a “modest” 50bp rise, as the Fed is expected to continue to stay aggressive until inflation shows unmistakable signs that it has peaked and is moving lower. The Fed is saying that inflation will be brought down to the 2% target in 2023, but it looks like the road to low inflation will have bumps along the way, as the battle with inflation has been difficult and that is likely to continue to be the case. AUD/USD Technical AUD/USD has weak support at 0.6737, followed by support at 0.6629 There is resistance at 0.6807 and 0.6915   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar yawns after jobs report - MarketPulseMarketPulse
Reserve Bank of New Zealand: Kenny Fisher says he expects a 25bp rate hike on May 24th

NZD: Let's Check Out New Zealand's GDP | What Can We Expect From RBNZ?

Kenny Fisher Kenny Fisher 15.09.2022 22:39
New Zealand GDP surprises on the upside New Zealand posted a stronger-than-expected GDP report for Q2. The economy climbed 1.7%, reversing the 0.2% decline in the first quarter. The upswing in growth was driven by the government’s easing of Covid restrictions. The GDP gain removed any fears of a technical recession, which is defined as two consecutive quarters of negative growth. The New Zealand dollar is almost unchanged on the day, trading at the 0.6000 line. Now that New Zealand’s economy is flexing its muscles, what does that mean for the Reserve Bank of New Zealand? The central bank was almost spot on with its GDP forecast at the August meeting, predicting a gain of 1.8%. At the meeting, the Bank projected that the cash rate would peak at 4.1% in mid-2023. Today’s GDP report is not expected to change that stance, with the Bank likely to raise rates by 50bp in the October and November meetings, which would bring the cash rate to an even 4.0%. The Reserve Bank has its hands full with hot inflation, but is relief on the way? The Bank’s steep rate-tightening cycle is expected to slow inflation, which is running at 7.3%. In August, the Bank projected that inflation would fall to 6.4%. Higher interest rates will, sooner or later, bring down inflation, but of course, that is not the whole story. As borrowing and mortgage rates rise, domestic demand will fall, and this trend cannot be halted at the switch of a button. In other words, the effects of a tighter policy will be felt long after the Reserve Bank ends its rate hikes – perhaps the central bank’s biggest challenge is to guide the economy to a soft landing as it grapples with high inflation. . NZD/USD Technical NZD/USD is testing resistance at 0.6017. Next, there is resistance at 0.6085 There is support at 0.5929 and 0.5861 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD steady after solid GDP - MarketPulseMarketPulse
The UK Markets Remain Volatile, Possible Contraction Of The Eurozone Economy

United Kingdom - What Is The Estimated UK Retail Sales Print?

Kenny Fisher Kenny Fisher 15.09.2022 22:48
The British pound is in negative territory today and has fallen below the 1.15 line. In the North American session, GBP/USD is trading at 1.1497, down 0.38%. US retail sales, jobless claims beat forecast US retail sales rose 0.3% MoM in August, rebounding from -0.4% in July. Excluding gasoline, retail sales were up 0.8%, as consumers responded to lower gas prices by increasing spending on other items. The data indicates that consumer spending is holding up, despite an inflation rate of 8.3%. There was more positive news as US initial job claims fell for a fifth consecutive week, falling to 213 thousand. This follows the previous release of 218 thousand and beat the consensus of 226 thousand. These releases are especially significant, as the Federal Reserve relies on a strong labour market and solid consumer spending in order to remain aggressive with its hawkish policy as its grapples with high inflation. The Fed is expected increase rates by 75 basis points next week, with an outside chance of a massive 100bp hike. Inflation has proved to be more resilient than expected, and with the Fed continuing its steep rate-hike cycle, we may see more demand destruction which raises the likelihood of a recession. The UK wraps up a busy week with retail sales on Friday. Consumers have been hammered by the cost-of-living crisis and predictably are cutting back on spending, which will only exacerbate the grim economic landscape. Retail sales fell by 3.0% YoY in July, and the markets are bracing for an even worse month of August, with an estimate of -3.4%. A release of -3.0% or worse could extend the British pound’s losses. GBP/USD Technical GBP/USD is testing resistance at 1.1548. Next, there is resistance at 1.1689 There is support at 1.1417 and 1.1306 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD dips on strong US data, UK GDP next - MarketPulseMarketPulse
Further Downside Of The AUD/JPY Cross Pair Is Expected

Will The Downward Scenario Of The AUD/USD Pair Be Confirmed?

InstaForex Analysis InstaForex Analysis 16.09.2022 08:02
The aussie resolutely headed towards the 0.6686 target support (March 2020 high) on Thursday, this level was reached this morning. The Marlin Oscillator is decreasing in its own descending channel on a daily scale, we are waiting for the signal line to work out its lower border. At a low, this can happen when the price reaches the next support at 0.6640 (if the price develops a sideways movement), the target level of 0.6565 looks like the best option. The price turned down on the H4 chart yesterday after touching the MACD indicator line. This is a fairly common sign of the upcoming medium-term movement. The Marlin Oscillator, after a narrow consolidation, is ready to develop a new branch of decline. The downward scenario will be confirmed if the price breaks the level of 0.6686.   Relevance up to 04:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321861
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

The Pound To The US Dollar Pair Is In Downward Trend Again

InstaForex Analysis InstaForex Analysis 16.09.2022 08:08
The British pound fell 71 points yesterday. It has a target level of 1.1385 just ahead. Then it may continue to fall to the level of 1.1305. The downward trend continues, the Marlin Oscillator is in the area of negative values. The UK retail sales data for August will be released today. A contraction of 0.5% (-4.2% y/y) is expected, while the core index may shrink by -0.7% (-3.4% y/y). We are waiting for additional pressure on the pound and from this statistical side. The price has consolidated below the MACD line on the four-hour chart, the Marlin Oscillator is falling in the negative area, there is still a lot of room ahead of it to the oversold zone. We are waiting for the pound at the first target level of 1.1385. Relevance up to 04:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321863
EUR/USD Pair Has Potential For The Downside Movement Today

The Rise Of The Euro Against The Decline Of Other World Currencies Should Stop

InstaForex Analysis InstaForex Analysis 16.09.2022 08:12
The euro managed to grow by 0.14% yesterday while the dollar index rose by 0.07%. The price is approaching the target resistance at 1.0032, reinforced by the MACD indicator line on a daily scale. The Marlin Oscillator has penetrated into the positive area and now the price will try to overcome this resistance. Success will allow the euro to rise to 1.0150. But in fact, the price is still in the consolidation area (0.9950-1.0032), the general trend is downward, there is a volume exit from risk in adjacent markets - the S&P 500 lost 1.13% yesterday, and this morning the Japanese Nikkei 225 is down by 1.21%, yields on US government bonds are growing for the fifth consecutive day. Today's European CPI data for August is expected to remain unchanged - core CPI 4.3% y/y, headline CPI 9.1% y/y. In the US, the consumer expectations index from the University of Michigan for September is forecast to rise from 58.0 to 59.7. The euro's growth against the decline of other world currencies should stop and we are waiting for the quote at the target level of 0.9850. The price is consolidating under the MACD indicator line on the four-hour chart, although visually this consolidation looks like growth, because the MACD line itself is growing. Consolidation data are mainly signs of a further decline in the instrument in question. The final confirmation of the main downward scenario will be when the price overcomes the support level of 0.9950.     Relevance up to 04:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321865
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

Falls On The New York Stock Exchange, Who Lost The Most?

InstaForex Analysis InstaForex Analysis 16.09.2022 08:17
At the close of the New York Stock Exchange, the Dow Jones fell 0.56% to a one-month low, the S&P 500 fell 1.13% and the NASDAQ Composite fell 1.43%. UnitedHealth Group Incorporated was the top performer in the Dow Jones Index today, up 13.14 points or 2.58% to close at 522.91. JPMorgan Chase & Co rose 1.75 points or 1.51% to close at 117.87. Goldman Sachs Group Inc rose 4.36 points or 1.33% to close at 331.62. The losers were Salesforce Inc, which shed 5.50 points or 3.43% to end the session at 154.78. Microsoft Corporation was up 2.71% or 6.84 points to close at 245.38, while Visa Inc Class A was down 2.03% or 4.04 points to close at 195. .37. Leading gainers among the S&P 500 index components in today's trading were Humana Inc, which rose 8.37% to 497.24, Wynn Resorts Limited, which gained 7.48% to close at 65.23, and shares of Paramount Global Class B, which rose 5.16% to close the session at 23.05. The losers were Adobe Systems Incorporated, which shed 16.79% to close at 309.13. Shares of Albemarle Corp shed 6.49% to end the session at 286.75. West Pharmaceutical Services Inc lost 5.91% to 273.63. Leading gainers among the components of the NASDAQ Composite in today's trading were Heartbeam Inc, which rose 85.60% to hit 2.32, Neurobo Pharmaceuticals Inc, which gained 47.21% to close at 24.82, and shares of Nabriva Therapeutics AG, which rose 40.65% to end the session at 0.27. The drop leaders were Shuttle Pharmaceuticals Inc, which shed 55.65% to close at 16.63. Shares of Eloxx Pharmaceuticals Inc lost 40.97% to end the session at 0.22. Quotes Color Star Technology Co Ltd fell in price by 39.54% to 0.07. On the New York Stock Exchange, the number of securities that fell in price (2188) exceeded the number of those that closed in positive territory (909), and quotes of 125 shares remained virtually unchanged. On the NASDAQ stock exchange, 1991 stocks fell, 1759 rose, and 265 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.42% to 26.27. Gold futures for December delivery lost 2.08%, or 35.55, to hit $1.00 a troy ounce. In other commodities, WTI October futures fell 3.84%, or 3.40, to $85.08 a barrel. Brent oil futures for November delivery fell 3.56%, or 3.35, to $90.75 a barrel. Meanwhile, in the Forex market, the EUR/USD pair was unchanged 0.20% to 1.00, while USD/JPY was up 0.23% to hit 143.48. Futures on the USD index rose by 0.06% to 109.44.     Relevance up to 05:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/293021
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

Will The Euro To The US Dollar Pair Break The 1.0000 Level Today?

InstaForex Analysis InstaForex Analysis 16.09.2022 08:23
Technical outlook: EURUSD is still trading subdued below the 1.0000 handle for the last two trading sessions. The probability remains for the rally to continue towards 1.0400 and 1.0730 as projected on the daily chart. Only a drag below 0.9860 will confirm that bears are back in control and that prices are heading lower from here towards 0.9400-0.9500. EURUSD has already carved a larger-degree downswing between 1.2350 and 0.9860 since January 2021. The above drop is being retraced since the 0.9860 lows and the pair is expected to reach at least 1.0800 going forward. Also, note that 1.0800 is the Fibonacci 0.382 retracement of the above drop, hence strong resistance should be seen there. EURUSD has further carved a lower-degree upswing between 0.9860 and 1.0198 over the past few trading sessions. The same has been retraced just below the Fibonacci 0.618 mark (1.0000). A high probability remains for the trend to resume higher from here and push through 1.0800 in the next couple of weeks. Trading plan: Potential rally through 1.0800 against 0.9800 Good luck!   Relevance up to 06:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293031
Gold Has A Chance For The Rejection Of The Support

Gold Has Achieved A New Deep Decline, Futher Decrease Is Expected

InstaForex Analysis InstaForex Analysis 16.09.2022 08:27
Gold has made a new low in the five-wave decline from 2,070 and is now in close proximity to the 38.2% target of wave 1 through wave 3 added to the high of wave 4 at 1,659. This could be enough to complete the five-wave decline and set the stage for a new impulsive rally in wave 5. To confirm that a bottom has been seen we need a break above the resistance at 1,735. However, a strong break below support at 1,659 could extend wave 5 lower to 1,613 and even closer to the 61.8% target at 1,567. Such a deep decline in wave 5 is not our preferred count, but at this point, we need to let all possibilities be open.   Relevance up to 07:00 2022-09-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293033
Silver Bulls Now Awaiting A Move Beyond The $24.50-$24.55 Area

Silver Is About To Make A New Low For The Decline

InstaForex Analysis InstaForex Analysis 16.09.2022 08:33
Silver is about to make a new low for the decline from 30.00. However, with gold making new lows, we need to be prepared for the possibility of this being the case for silver too. Our preferred count remains that a long-term bottom was found at 17.56 and a new impulsive rally is in its infancy for a new rally towards 30.00 and ultimately towards the all-time high at 50.00 too. That said, the break lower in gold could lead and take silver lower too. Besides, a break below minor support at 17.85 will be the first good indication that silver will break lower towards the next strong support seen near 16.00.     Relevance up to 07:00 2022-09-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293039
The Euro May Gradually Climb To The Target Level

Despite The Rebound, The Euro Remains Under Bearish Pressure

InstaForex Analysis InstaForex Analysis 16.09.2022 08:38
Technical Market Outlook: The EUR/USD pair has been seen trading inside a narrow range located between the levels of 1.0019 - 0.9959 on the H4 time frame chart. The level of 1.0019 will now act as a resistance for bulls, because the weak and negative momentum on the H4 time frame chart supports the short-term bearish outlook for EUR. The next technical support is seen at 0.9934 and 0.9901. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the longer term down trend is reversed. Please watch the USDX as the correlation between this two is directly opposite. Weekly Pivot Points: WR3 - 1.01483 WR2 - 1.01150 WR1 - 1.01017 Weekly Pivot - 1.00817 WS1 - 1.00684 WS2 - 1.00484 WS3 - 1.00151 Trading Outlook: Despite the recent relief rally towards the short-term support one, the EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Relevance up to 07:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293047
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The Downward Trend Of The GBP/USD Pair Is Not Strong

InstaForex Analysis InstaForex Analysis 16.09.2022 08:42
Technical Market Outlook: The GBP/USD pair has been seen continuing the down move, albeit the volatility and dynamic of this down move is not that strong. The next target for bears is located at the level of 1.1410 again, which is the 7 years low for the GBP. The intraday technical resistance is located at the levels of 1.1480 and 1.1527. Please keep an eye on the long-term technical support level, because any violation of this level will have a very drastic consequences, like an accelerated sell-off towards the next technical support, which is more then 300 pips away. Weekly Pivot Points: WR3 - 1.16716 WR2 - 1.16430 WR1 - 1.16286 Weekly Pivot - 1.16144 WS1 - 1.16000 WS2 - 1.15858 WS3 - 1.15572 Trading Outlook: The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame. The bears tested the level of 1.1410 (2020 swing low) and now the market is in the pull back mode. In order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th).   Relevance up to 08:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293049
In The Coming Days Will Be The Final Consolidation Of Bitcoin

China Treats Litecoin As An Asset And Bitcoin Is Still Banned. BTC/USD Is In Down Trend

InstaForex Analysis InstaForex Analysis 16.09.2022 08:47
Crypto Industry News: Beijing's First People's Court has ruled that interested investors can trade cryptocurrencies. However, they should only be treated as virtual assets and not act as currency. The ruling was made in a case regarding a crypto loan in litecoins (LTC) with a promise of repayment of interest in digital currencies. The specificity of the case indicates that in 2015 Zhai Wenjie loaned 50,000 litecoins to his friend Ding Hao. Zhai Wenjie stated that Ding Hao had promised to pay 1,000 litecoins as interest per month, which was denied by the defendant. The court recognized the existing Chinese ban on cryptocurrency trading and its chairman noted that Litecoin cannot be treated as a currency. This is because digital assets are not issued by a monetary authority and are characterized by a lack of support from the legal and financial framework. "According to the existing regulations and administrative arrangements, our country denies the monetary attributes of the virtual currency and prohibits its circulation as a means of payment. However, the cryptocurrency itself is property protected by law, "the court ruled. Interestingly, Bitcoin is still banned in China. A Chinese court decided to take a separate approach to Litecoin, citing the lack of legislation regarding its perception as an illegal resource. Therefore, the judge ruled in favor of the victim and ordered the accused to return litecoins to him. The ruling in the case reflects a recent decision by a Chaoyang-based court that banned payment of wages in Tether (USDT) precisely because of the prohibition of digital asset trading. It's worth noting that different Chinese county courts have issued different rulings regarding the trading and handling of cryptocurrencies. For example, in May this year, the Shanghai People's High Court ruled that Bitcoin has "some economic value" and is protected by the country's laws. Interestingly, despite existing bans, new data shows that more and more Chinese citizens continue to trade in various assets. The country currently ranks tenth in the world for cryptocurrency adoption. Technical Market Outlook: The BTC/USD pair keeps making the lower lows and lower highs on the H4 time frame chart. The recent low was made at the level of $19,510, but no sell-off was triggered yet. The Pin Bar candlestick pattern was made at the H4 time frame chart at the lows, so the market is consolidating around the level of $20,120. The levels of $20,472 and $20,580 will now act as the technical resistance for bulls. The weak and negative momentum supports the short-term bearish outlook towards the level of $18,640 again. Weekly Pivot Points: WR3 - $23,418 WR2 - $22,624 WR1 - $22,146 Weekly Pivot - $21,821 WS1 - $21,352 WS2 - $21,035 WS3 - $20,241 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 08:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293051
The Interest Rate Cut Will Not Affect The Ruble (RUB)

The Interest Rate Cut Will Not Affect The Ruble (RUB)

TeleTrade Comments TeleTrade Comments 16.09.2022 08:53
At its monthly meeting today, Russia’s central bank (CBR) is set to cut rates again. In the opinion of economists at Commerzbank, the rate cut is unlikely to weigh on the rouble. CBR to continue taking interest rates down “CBR will likely lower its benchmark rate by 50 bps to reflect slowing inflation and the (relatively) strong rouble exchange rate.” “A rate cut is unlikely to have any adverse implication for the isolated rouble exchange rate. Why then not a larger cut? CBR has issued a rather hawkish assessment of the inflation outlook recently, which makes this prospect slim.”
The EUR/USD Pair Is Showing A Potential For Bearish Drop

Let's Check Out Comments On Forex - Euro, British Pound, US Dollar (USD) And More

ING Economics ING Economics 16.09.2022 09:03
Markets have continued to push their Fed peak rate expectations further, and now see 4.50% in March 2023. A more inverted yield curve has triggered a textbook reaction: fears of slower demand have hit oil and commodity currencies and offered a floor to the dollar possibly into Wednesday's FOMC. Today, the focus will be on Uni Michigan surveys and Lagarde Today we'll hear from ECB President Christine Lagarde, who is speaking at a student event in Paris   Monday 19 September will be a national holiday in the UK, the next FX Daily will be published on Tuesday 20 September.  USD: Hawkish re-pricing continues Despite some mixed data out of the US yesterday, markets have continued to push their hawkish bets on the Fed tightening further, and with 75bp fully priced in for next week’s meeting, March 2023 Fed Funds futures now trade at around 4.50%. This marks a 50bp+ increase in peak rate expectations since the start of September, which has translated into a 40bp rise in two-year Treasury yields. Ultimately, we’re observing a textbook FX reaction to the US yield curve inversion: a supported dollar, and heavily impacted pro-cyclical/commodity currencies; dollar-bloc currencies are down 1.6-2.1% in the week, and only NOK has performed worse (-2.5%) versus the USD. Slumping oil prices (third consecutive weekly drop) are all part of the equation and are mirroring how markets are factoring in a more aggressive tightening by central banks materially hitting global demand. In such an environment, risk sentiment is struggling to recover and this is just another factor delaying any correction in the dollar. Today, University of Michigan sentiment and inflation surveys will be watched (especially the latter), but we may need to see some significantly below-consensus reads to dent the ultra-resilient hawkish Fed expectations at this stage. We see the dollar staying on solid ground into Wednesday’s FOMC announcement. Francesco Pesole EUR: How will Lagarde address the energy bill caps? Today’s final CPI numbers for August in the eurozone are expected to confirm the preliminary 9.1% print, and there are no other data releases to watch meaning all attention will remain on: a) developments in the Russia-Ukraine conflict; b) gas prices and EU measures to cap energy bills; c) ECB speakers. About this last point, we’ll hear from ECB President Christine Lagarde, who will speak with Governing Council member Francois Villeroy at a student event in Paris this morning. So far, post-meeting comments by ECB officials have stayed on the hawkish side of the spectrum and we see no reason for Lagarde to derail from this narrative today. What we’ll be watching closely is how the recent measures by EU members to cap energy bills will be embedded into the ECB’s policy assessment, and this is a factor that may cause a further divergence between the doves and hawks within the Governing Council. We’ll also hear from Olli Rehn this morning. Either way, the euro has displayed a reduced sensitivity to ECB communication recently and the unstable risk environment mixed with a strong dollar may keep EUR/USD upside capped for now despite the recent decline in gas prices. The 1.0000 level could remain an anchor over the coming days. Francesco Pesole GBP: A last (grim) piece of data before the BoE This morning’s retail sales in the UK continued to show a deteriorating consumption picture in the UK, which emerged more from the continuation of a steady downtrend from last summer rather than the single grim data point in a rather volatile series. This has been the last important piece of data before the Bank of England meeting on Thursday and has hit the pound this morning. Despite the seemingly unstoppable re-pricing higher in Fed rate expectations, the BoE’s pricing has stalled, now around 65bp for the September meeting. We currently see a relatively high chance of a 75bp move next week, which could lend sterling some help, despite a general environment that remains rather unwelcoming for pro-cyclical currencies, and domestic growth fears that is likely set to keep a lid on a large GBP recovery. This morning’s EUR/GBP jump may struggle to extend beyond the 0.8750 mark. Francesco Pesole CEE: Polish core inflation hitting new record Today's calendar features core inflation in Poland and PPI in the Czech Republic. Our Warsaw team expects core CPI to jump from 9.3% to 10.0% YoY, the highest level since 2000, which could make for some headlines. In the Czech Republic, confirmation of the slowing trend of year-on-year numbers is expected, and moreover, it will be the last number before the September Czech National Bank meeting. However, we believe that even an upward surprise would not change the expected stability of rates. On the market side, the number one theme remains Hungary and the forint, which lost another 0.7% yesterday and nearly 3.0% for the week, reaching its weakest levels since late August. Of course, the main reason is the issue of EU money and negotiations with the European Commission. Moreover, yesterday we couldn't even blame gas prices, which fell again. As we mentioned earlier, we expect the forint to still have a tough time. The next deadline is on Sunday and in the second half of next week when we should hear more from the European Commission. Elsewhere in the CEE region, the Polish zloty and the Czech koruna remain strictly driven by the price of gas, which helps them overcome the negative impact of the EUR/USD below parity and the unfavourable development of the interest differential in both markets. On the other hand, their development makes it more unpredictable, and we must continue to closely monitor the next steps of the European Union in the gas story. Frantisek Taborsky Read this article on THINK TagsLagarde FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Steady BoE Rate Expectations Amid Empty Event Calendar in the UK

China Is Ready To Work With Russia, Ethereum Merge Successfully Completed

Saxo Bank Saxo Bank 16.09.2022 09:58
Summary:  U.S. equity markets declined again on the economic good news which added to investors’ worries about more and for longer rate hikes from the Fed. The Chinese Yuan weakened and broke the 7-handle. China's August activity data is scheduled to release today. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) face further pressure as US eco news brightens        US equities closed lower on Thursday with the S&P500 losing 1.1% taking its weekly loss to almost 4%, while the Nasdaq fell 1.4%, losing 4.6% across the week, with both major indices eroding last week’s gain. Investors are growing cautious, as new economic data gives the Fed room to raise rates, and keep them higher for longer to control inflation. Retail sales unexpectedly rose in August, showing consumer spending is far from collapsing and jobless claims fell for the fifth straight week, suggesting employers worker demand remains healthy despite an uncertain outlook. For the market to turn around, it will need to see earnings multiples expand, as that supports share price growth. And we need to see earnings per share move up from a decline, to growth. But if the Fed keeps hiking rates, and the energy crisis continues, this scenario means tech stock earnings multiples are likely to see earnings per share (EPS) growth pressure. On the flip side, EPS in energy continues to gain momentum. Big movers in US shares Adobe shares fell 17%, weighing on the Nasdaq and S&P 500 after the software giant announced $20 billion deal to buy design start up Figma. The weakness flowed through to other tech stocks, with Apple shedding 1.9% and Salesforce sliding 3.4%. Meanwhile oil stocks also copped selling after the WTI oil price fell below $86 after the US announced it would restock oil reserves but without a trigger price. Bank stocks were a bright spot, with Goldman Sachs and JPMorgan rising more than 1% apiece. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) The U.S. short-end yields continued to charge higher, 2-year yields up 7bps to finish the session at 3.86%, flattening the 2-10 year curve to -42bps, as the 10-year yields up 5bps to 3.44%.  The 30-year yields, however remained well anchored at 3.47%, up only 1bp and not far from the pre-CPI release levels. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index edged up by 0.4%, helped by the rise in Chinese developers, while the CSI 300 dropped by 0.9%.  Securities Times reported that more than 120 cities have relaxed providence fund policies to boost the local property markets and other media reported that a large number of cities had loosened home purchase restrictions.  Country Garden (02007:xhkg) surged by 8.7% followed by Guangzhou R&F (02777:xhkg) up 8.6%, CIFI (00884:xhkg) up 7%, China Resources Land (01109:xhkg) up 4.9%, and China Overseas Land & Investment (00688:xhkg) up 4%. Catering names gained on news that Chengdu was relaxing its lockdown, Xiabuxiabu (00520:xhkg) up 5.5%.  Li Auto (02015:xhkg) fell 2.3% as the President of the company reduced his shareholding. EV names overall were also pressured by the news that China’s ambassador to the U.S. warned against the potential risks of the US trying to cut China off the EV supply chains.  Solar names were down following reports about the European Union was going to ban manufactured goods with forced labour in them and raised concerns about much of China’s solar products originated from Xinjiang. Australia’s ASX200 The ASX200 is on tracking lower this week, after losing 0.7% Monday to Thursday with the technical indicators suggesting the market is likely to head lower from here and it could retest the lows set in June. However, it’s not all doom and gloom. We saw commodity stocks march up this week, with coal companies Coronado Global rising 13%, New Hope up 5%. It’s also worth noting these are some of this year’s best performing stocks on the ASX, with Coronado up 82%, New Hope up 182%, while the coal giant Whitehaven is up 266% YTD, supported by the coal price hitting new highs this week, as well as the coal futures price. Meanwhile, with crop prices likely to go higher amid La Nina, Agri business Elders rose 4%. Elsewhere, technical buying picked up in oil and gas companies including Woodside, supporting its shares rise ~4%, with Beach Energy following. USDCNH breaks above 7 handle USDCNH broke 7.00 and the markets is expecting little reactions from the PBOC given the latest state-owned media’s effort to downplay the importance of the 7-handle. Crude oil (CLU2 & LCOV2) Crude oil prices slumped overnight as demand concerns came back into the focus. The International Energy Agency said that China faces its biggest annual drop in demand in more than three decades as COVID-19 lockdowns weigh on growth. Oil demand could fall by 420kb/d, or 2.7% this year. This led to the IEA trimming its estimate of global demand. It now sees consumption rising by only 2mb/d. Further, supply situation also seemed to fluctuate with the US Department of Energy walking back on its SPR refill stance by saying that it didn’t include a strike price (that was said to be around $80/barrel) and it isn’t likely to occur until after fiscal 2023. WTI futures fell below $85/barrel while Brent futures touched lows of $90/barrel. Oil technical levels to watch For traders and investors, for WTI to reverse its downtrend, it needs to close above resistance at $97.66, which is what our technical analyst pointed out here. So the next level for you to watch, is if it breaks above $90.40, it would signal an uptrend, for this to occur, the market will need good news, perhaps even bright news from China, the biggest oil consumer. Regardless, right now, oil is in a bear trend and if it closes below $81.20 the bear run-lower could be extend to $78.48-$74.27. Gold (XAUUSD) The yellow metal saw a drop to $1,660/oz down more than 2% to over 2-year lows, amid expectations of more aggressive rate hikes by the Fed as strong US economic data underpinned. Markets are now pricing in a more than 75bps rate hike by the Fed at the September meeting, and a terminal rate of ~4.5%. What to consider? Mixed US data, but further upward pricing of the Fed rate path US retail sales saw the headline rising 0.3% m/m in August (exp -0.1%, prev -0.4%) but the core retail sales print was weaker than expected at -0.3% m/m (exp 0%, prev 0.0%). The slower retail spending does reflect the current slowdown in goods spending despite services remining strong and supporting the overall consumer strength in the US. Meanwhile, initial jobless claims were lower than expected at 213K (exp 226K, prev 218K). That is the lowest since early June and the 5th consecutive decline (the high reached 262K), suggesting that labor markets still remain tight. Regional Fed indices offset each other The regional Fed indices on manufacturing gave contrasting signals with the Philly Fed index falling -9.9 vs +2.8, but the Empire improving markedly to -1.5 vs -13.0 estimate. For both indices, the prices paid components did fall and has moved markedly lower over the last few months, but still remains with a positive number (i.e., more businesses reporting higher prices vs lower prices). For the Philly Fed, the price paid came in at 29.8 v 43.6. For the Empire, the prices paid came in at 39.6 vs 55.5. Australia’s latest economic news shows employment growth is slowing with the jobless rate rising for the first time in 10 months; giving the RBA less room to hike rates Australia’s unemployment rate unexpectedly rose in August, rising from 3.4% to 3.5% with less jobs being added to economy than expected (33,500 instead of the 35,000). Given employment has fallen from its 50-year peak, and job growth is slowing, the RBA effectively has a solid barrier in its way preventing it from rapidly rising rates over the coming months, with room of a 0.5% hike being taken off the table. For equity investors, this supports risk-appetite slightly increasing in the banking sector, given employment nears its peak and credit might not be squeezed as hard as feared, thus property price growth also might not continue to fall as rapidly as forecast. For currency traders, the AUDUSD sharply fell from its intraday high (0.6769) and now faces pressure back to two-year lows, where support is at 0.61358, implying it may fall 10%. Further to that, the currency pair faces downside simply as the market is pricing in 0.25% RBA hike next month, versus the more aggressive US Fed Reserve’s hike potentially being 100bps (or 1%) next week. Slower export growth, power shortage, and pandemic controls would probably have taken their toll on China’s August activity data China’s activity data for August, scheduled to release today, would probably be at risk of missing the median forecasts in the Bloomberg survey, which has industrial production at 3.8% YoY in August (vs 3.8% YoY in July), retail sales at 3.2% YoY in August (vs 2.7% YoY in July), and fixed asset investment year-to-date 5.5% YoY (vs 5.7% YoY). The heatwave-induced power shortage caused disruption to industrial production in Sichuan. The heatwave might have also caused delays in infrastructure construction which was largely outdoor and offset some of the positive impacts of accelerated credit extension. The pandemic control measures affected the manufacturing and export hub of the city of Yiwu in Zhejiang province in August. The much weaker expected export growth data for August released last week and the continuously weak data in the property market also pointed to potentially downside surprises to these forecasts.  While a favourable base effect and stronger auto sales in August could have boosted retail sales, tightened pandemic control measures might have damped catering and other services and dragged down retail sales growth.  Russian President Putin said he appreciated China’s “balanced position” on Ukraine President Xi and President Putin met on the sidelines of the Shanghai Cooperation Organization summit held in Uzbekistan.  The Russian president said he values China’s “balanced position” on Ukraine and he backs the latter’s “One China” principle and opposes “provocations” by the U.S. on the issue of Taiwan.  On the other hand, the readout released by China only did not touch on Ukraine.  As in the readout, Xi told Putin that “China is ready to work with Russia in extending strong support to each other on issues concerning their respective core interests”. China’s State Council reiterated support for the economy and opening up trade and investment In a meeting chaired by Premier Li Keqiang, China’s State Council rolled out an additional RMB200 billion relending quota to support key industries in the real economy and pledged to support international trade and open up to foreign investment. Ethereum Merge – a new chapter in crypto Yesterday, the second-largest cryptocurrency Ethereum successfully underwent its merge from proof-of-work to proof-of-stake. From consuming around 0.2% of the world’s electricity, Ethereum now consumes a fraction of that. Our Crypto analyst calls it a new chapter not only for Ethereum but crypto in general. Read more here.    For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-16-sept-2022-16092022
The Forex Market Is Under Strong Pressure From Geopolitical Events And Statistics

The Largest Acquisition In The Adobe’s History, EDF’s Failure, The Drewry Index Is Down

Saxo Bank Saxo Bank 16.09.2022 10:11
Summary:  The US equity market dropped to new local lows and below key support in late trading after Fedex reported a massive miss on profits and dropped its year-ahead-forecast, citing a marked deterioration in activity over the last quarter. Elsewhere, the US dollar rose, USDCNH traded well above 7.00 and US yields remained pinned near the cycle highs after a strong weekly jobless claims report but tepid August Retail Sales data.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities tried to tread water during the cash session yesterday but spilled lower and below the key local support (3,900 area in S&P 500 and 12,000 area in the Nasdaq 100) in late trading after Fedex reported a huge profit miss and dropped its forward revenue forecast (more below). The break below support sets the market on tilt on the quarterly “witching” day for index futures and options today. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index fell 1% in early trading on a weakening Chinese Yuan, USDCNH surging to as high as 7.0350, but pared some losses to be down around half a per cent after the stronger than expected prints of China’s August industrial production, retail sales and fixed asset investment. CSI 300 slid throughout the session and was off 1.6% as of writing.  While other activities improved in August, the decline in the fixed asset investment in the housing sector accelerated in August and reflected a still weak property sector. USD rises to new highs against several currencies The risk off tone yesterday helped support the US dollar despite US yields trading largely sideways and a mixed bag of US economic data. The US dollar rose almost across the board, with the important exception of USDJPY, as the market is wary of the risk of official intervention. GBPUSD is back poking toward the cycle lows, while USDCAD has cleared the big 1.3200 resistance area, USDNOK rose to new local highs and NZDUSD traded to new lows since early 2020 below 0.6000. Any further deterioration in risk sentiment will likely continue to drive USD strength, with US yields also an important coincident indicator. Gold (XAUUSD) Gold slumped below support-turned-resistance at $1680 on Thursday as the market was overwhelmed by momentum and technical-driven selling related to the prospect of a 1% rate hike next week and the terminal rate, expected next March, being lifted to around 4.5%. At a near 2-½-year low, the metal has struggled to find a defense against the FOMC hawkish tone which has driven the dollar and Treasury yields sharply higher. Gold and other investment metals may struggle while the focus remains on FOMC hiking rates and not the increasingly inevitable economic fallout (see FedEx and freight rate comments below) from these actions. A weekly close below $1680 could see the market target the 50% retracement of the 2018 to 2020 rally next at $1618. Crude oil (CLV2 & LCOX2) Crude oil prices slumped again on Thursday with demand concerns once again being the focus as the market prepares for another growth dampening rate hike from the US FOMC next week and demand in China continues to linger after the IEA said the world's largest importer of oil was heading for its biggest annual drop in demand in more than three decades. The US Department of Energy meanwhile walked back on its SPR refill stance by saying that it didn’t include a strike price (that was said to be around $80/barrel) and it isn’t likely to occur until after fiscal 2023. WTI futures trades around $85/barrel with Brent holding above $90/barrel, both well above last week's lows. Ethereum The groundbreaking and long expected upgrade to the second-largest cryptocurrency, Ethereum, was rolled out successfully yesterday morning. Despite this, Ethereum has dropped more than 7 % over the past 24 hours in what seems to be a "sell-the-news" event, as the hype around the upgrade has faded. US Treasuries (TLT, IEF) US yield trade near the cycle highs at the long end of the yield curve, as we await a test of the key cycle top at 3.50%. The short end of the yield curve continues to drift higher, with the 2-10 yield curve inversion below –40 basis points and nearing the cycle low from August which saw the lowest daily close at –49 basis points. Key What is going on? Fedex falls over 15% after hours on big profit miss, withdrawing of 2023 forecasts The company CEO said that “global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the US.” The company expects that business will worsen further in the current quarter. EPS for the quarter were in at $3.44 vs. $5.10 expected despite revenue only narrowly missing expectations. Global container freight rates seeing an accelerated slump The Drewry composite container freight benchmark rate which tracks the cost of shipping containers on the busiest routes, especially from Asia to Europe and the USA slumped 8% this week to $4.9k pr 40ft box. The index is now down more than 50% from the record seen this time last year but remains around 3.5X above the pre-pandemic average. Weakness was seen on all the major China to US and EU routes. Maersk (MAERSKb:xcse), one of the world’s largest container shipping companies has seen its share price slump 38% from a March peak to a 15-month low, another sign that global trade is weakening fast following the pandemic-led boom. Adobe (ADBE:xnas) drops 17% on Figma acquisition announcement The company offered $20 billion for privately held Figma, a company offering tools for collaborating on software development. This was a half-cash, half-stock deal and was the largest acquisition in the company’s history and was some 50 times Figma’s annual revenue (and over 12 months of trailing Adobe revenue). After hours, Adobe reported earnings, with top-line growth of 12.7%, but earnings dropped –2.7%. The Figma deal looks a bit desperate and suggests that Adobe has a hard time seeing organic growth from its core business. Mixed US data, but further upward pricing of the Fed rate path US retail sales saw the headline rising 0.3% m/m in August (exp -0.1%, prev -0.4%) but the core retail sales print was weaker than expected at -0.3% m/m (exp 0%, prev 0.0%). The slower retail spending does reflect the current slowdown in goods spending despite services remining strong and supporting the overall consumer strength in the US. Meanwhile, initial jobless claims were lower than expected at 213K (exp 226K, prev 218K). That is the lowest since early June and the 5th consecutive decline (the high reached 262K), suggesting that labor markets remain tight. Xi and Putin meet in Uzbekistan China’s leader Xi Jinping and Russia’s leader Vladimir Putin met yesterday for the first time since a powwow at the Beijing Olympics in which the two leaders declared that the friendship between the two countries was “without limits”. But apparently, the situation in Ukraine is testing those limits as Putin was forced to acknowledge China’s “questions and concerns” on its invasion of Ukraine. Xi did call Putin an “old friend”, however, and said the “China is willing to work with Russia, display the responsibilities of the major powers, and play a leading role to inject stability and positive energy to a world in chaos”. Still, the general impression was one of China keeping Russia at arm’s length and unlikely to extend support for Russia’s war effort. China’s August activity data improved better-than-expected China’s activity data for August came in at stronger than expected growth rates.  Industrial production grew 4.2% Y/Y in August beating the consensus estimate of 3.8% Y/Y and improving from last month’s 3.8% Y/Y.  Higher output in automobile and power generation offset the impact from slower activities in other industries such as pharmaceuticals and computers.  Retail sales grew 5.4% Y/Y in August, well exceeding the 3.3% Y/Y median forecast from the Bloomberg survey and the 2.7% YoY in July. A favourable base effect and stronger auto sales during the month boosted retail sales and more than offset the drag from tightened pandemic control measures and a slow housing market.  Fixed asset investment grew 6.4% Y/Y in August, notably accelerating from the 3.6% Y/Y in July, led by 14.8% Y/Y growth in infrastructure and 10.7% Y/Y growth in manufacturing investments while investment in properties slowed further to a decline of -13.9% Y/Y in August from July’s -12.1%.  What are we watching next? The French historical energy provider EDF is in a difficult financial situation Last Spring, the company refused to give earnings guidance for the year. Yesterday, it announced that the impact of the shutdown of all of its nuclear reactors (due to structural corrosion issues) will likely lower its 2022 EBITDA by €29bn. In the early 2000s, EDF was one of the largest and most promising companies in the CAC 40 index. Now, it is about to be nationalized. EDF’s failure is mostly explained by poor management and the French state’s pressures over the recent years to channel investments in the green transition (mostly intermittent energy) instead of focusing on nuclear energy. This is a matter of months before the nationalisation is effective. The French state is currently EDF’s main shareholder, owing 83.33 % of the shares. The stock is up 24 % YTD at the Paris Stock Exchange due to the prospect of nationalisation. USDCNH to get increasing attention? The USDCNH rate has risen well above 7.00 now, picking up a bit of pace to the upside again this week on an extension of USD strength. The exchange rate bears watching, as past episodes of CNH volatility, especially including the 2015 shift in China’s exchange rate regime, can aggravate global market volatility and uncertainty. The key level to the upside is the 7.20 level that was nearly touched on two occasions, first in late 2019 and then again in May of 2020. Economic calendar highlights for today (times GMT) 0830 – ECB President Lagarde and ECB’s Villeroy to speak 0900 – Eurozone Final Aug. CPI 1200 – Poland Aug. Core CPI 1215 – Canada Aug. Housing Starts 1400 – US Sep. Preliminary University of Michigan Sentiment Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-16-2022-16092022
Chinese Economy Data And USDCNY (US Dollar To Chinese Yuan)

Chinese Economy Data And USDCNY (US Dollar To Chinese Yuan)

ING Economics ING Economics 16.09.2022 10:31
The main stand-out was retail sales but remains at risk from future lockdowns Consumer demand in China should return as Covid rules are relaxed More of the same on housing The slew of data for August released by China got off to a bad start with a 0.29% MoM decline in new home prices. This marks the 12th consecutive month-on-month decline in Chinese home prices and takes house price inflation down to -2.1%YoY. As a major pool of Chinese household wealth, this won't help encourage spending. Residential property sales were not much better either, though at -30.3%YoY, they were at least marginally less bad than the July numbers (-31.4%YTD YoY). It will take some time for the pool of unfinished property construction projects to be completed with local government support for developers, and in turn, for Chinese households to consider investing in property in scale again. Consequently, these numbers are likely to remain a blot on the economic landscape for quite a while.  70-City home prices Source: CEIC Some better signs elsewhere There were some more encouraging signs elsewhere, suggesting that the lockdowns in August as Covid cases spiked above 700 mid-month did not have such a big impact on activity, maybe helped through shorter, more focused restrictions. The key stand out was retail sales, which rose 5.4%YoY, up from 2.7% in July, beating the 3.3% consensus expectation. The growth in retail sales was most evident in the restaurant/catering section, an area normally hit hard by lockdowns. There was some reasonable growth in consumer goods too. And though high petroleum prices probably helped lift the spending total, automobile sales were also strongly up, helping to offset weakness in housing-related areas like furnishings, household electronics and construction materials. A slight fall in the surveyed unemployment rate from 5.4% to 5.3%, may also have helped the retail sales figures to firm up.  China's Covid numbers continue to bubble along with about 160 daily cases reported on average currently. And though the current trend is downwards, the risk of a renewed upsurge is never very far away. For now, though, this is a more encouraging sign.  Mainland China Covid Cases Source: CEIC Other activity data little changed Other activity series showed some marginal improvements. Industrial production grew by 4.2%YoY in August. That's an improvement from 3.8% in July, but still weak by China's normal standards. There was some improvement in manufacturing output, though it looks as if utilities (electricity etc) may have played a role, which looks hard to reconcile with the power shortages reported at times in August due to the heatwave. The auto sector, reflecting the retail numbers, also experienced stronger growth in August.  Fixed asset investment delivered 5.8% growth, fractionally up from 5.7% in July. Infrastructure spending on transport and the environment stand out as some of the stronger-looking numbers in the breakdown by industry, with auto-manufacturing also growing faster and adding to the message that cars are in the driving seat of a lot of today's better data.  Today's data were not enough to save the CNY from trading above USDCNY7.0, the first time it has done so since July 2020. We look for USDCNY to reach 7.05 by the end of this month.  China activity series Source: CEIC Read this article on THINK TagsCNY China's weak economy China retail sales China activity data China Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
According To Dmitry Medvedev, Cryptocurrencies Will Gain In Importance

The Ethereum Market Remains Under Strong Bearish Pressure

InstaForex Analysis InstaForex Analysis 16.09.2022 10:31
Crypto Industry News: Megadeth, pioneers of thrash metal, continue their adventure with Web3. They prepared "Rattleheads", a collection of digital art whose main theme is the group's mascot, Vic Rattlehead. Megadeth and NFT Produced by Five To One Collective in collaboration with Upper Echelon Studios, the collection is inspired by the band's long-time fan club, Cyber Army, and the mascot, Vicio Rattlehead, a ghoulish character that features on most of the band's album covers. The project is to be expanded with additional tools that will be revealed in the near future. Megadeth leader Dave Mustaine emphasized in his statement that his group has always been a pioneer - and not just in terms of art: "Our first album set the standard for thrash metal. We were the first band to have a website. The Cyber Army Club was founded in 1994. Our 2016 album" Dystopia "featured VR descriptions. And now, as technology advances. Web3 and its ability to connect us directly with our fans - this moment is perfect for Megadeth. It is the ultimate bond with our community (...) "- he wrote. It is worth recalling that the band's first approach to the NFT market took place in 2021. Then the NFT project "Vic Rattlehead: Genesis" appeared on the market, containing the band's logo and its iconic mascot rotating in opposite directions for six seconds. Technical Market Outlook: The ETH/USD pair is trading out of the channel and the bearish pressure is still high. The market is slowly approaching the last mont's low seen at the level of $1,423. The levels of $1,513, $1,649, $1,689 and $1,722 will now act as the technical resistance for bulls. The next target for bears is seen at the level of $1,424 and below. Despite the extremely oversold market conditions on the H4 time frame chart, the momentum remains weak and negative, which might indicate the ETH is still in the short-term down trend. Weekly Pivot Points: WR3 - $1,875 WR2 - $1,807 WR1 - $1,765 Weekly Pivot - $1,738 WS1 - $1,697 WS2 - $1,670 WS3 - $1,601 Trading Outlook: The Ethereum market has been seen making lower highs and lower low since the swing high was made in the middle of the August at the level of $2,029. If the down move will extend, then the next target for bears is located at the level of $1,358. The key technical support for bulls is seen at $1,281.9 Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 08:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293053
The EUR/USD Pair Is Still In A High Position On The 1H Chart

Increase in Fuel Prices And In Consumer Prices Have Negatively Affected The Euro, The US Dollar Is Rising

InstaForex Analysis InstaForex Analysis 16.09.2022 10:37
By the end of the week, the confrontation between the US and European currencies manifested itself most clearly. There is no obvious confrontation in the EUR/USD pair, but the dollar's efforts to consolidate within the existing borders are present. At the same time, the euro, overcoming the attraction of the downward trend, seeks to expand its zone of influence. On Friday, September 16, the greenback slightly "descended from heaven" and moved away from multi-year highs after a steady growth at the beginning of the week. At the same time, market participants expect the Federal Reserve to further raise interest rates to curb inflation. The current situation contributed to an increase in the yield of US Treasury bonds and raised the demand for USD. The catalyst for the growth of bond yields was strong macroeconomic reports from the United States, in particular positive retail sales data. The August consumer price index in America caused a shock in the markets, demonstrating an unexpected recovery in retail sales (by 0.3%). At the same time, the US Department of Labor reports that the number of initial applications for unemployment benefits decreased by 5,000, to 213,000. According to analysts, this indicates the strengthening of the American economy, which is able to withstand an increase in interest rates and derive tangible benefits from it. Against this background, investors have revised their expectations regarding the size of the rate hike. After a sharp increase in the US consumer price index, investors expect the Fed to raise the key rate by an additional 25 bps. The implementation of such a scenario will open up new opportunities for the greenback, giving it another impetus for growth. However, the strengthening of the European Central Bank's hawkish position will be an obstacle to the further rise of the USD. At the moment, the ECB is determined to raise rates and tighten the monetary policy in the region. In the current situation, it is becoming more difficult for the dollar to maintain the positions it has won, although the euro is still weak. However, the single currency seeks to expand the existing borders, trying to push the American rival. The EUR/USD pair was trading near 0.9983 on the morning of Friday, September 16, trying to go above parity. The euro was tripped up by the energy crisis in Europe and a powerful increase in fuel prices. The negative macro statistics in the euro bloc countries added fuel to the fire. In mid-summer, industrial production in the region fell by 2.3%, being twice as bad as forecasts. The growth of consumer prices has had an extremely negative impact on the euro's dynamics. Against this background, the dollar is steadily gaining momentum. In the near future, experts expect a new round of USD growth. An additional bonus for the greenback will be another increase in the Fed rate. Next week, the so-called "parade of central banks" is expected, many of which will hold their meetings on the key rate. At the moment, futures on Fed funds show a 25% probability of a rate hike by 100 bps. At the same time, the dollar will continue to strengthen in the near future. The Fed meeting scheduled for next week will be the biggest event for financial markets. However, important events will also take place at the regional level, namely central bank meetings in England, Japan, Sweden and Switzerland. Market participants expect them to raise the key rate. The implementation of such a scenario will strengthen the greenback's position and give it a head start over other currencies. According to analysts, there is little that can stop the strong USD, which has risen by 15% against a basket of major currencies. The current situation is favorable for dollar bulls, whose actions have pulled down the euro and the yen to the lows of the last 20 years, and the pound to the lowest level in 40 years. According to Commonwealth Bank of Australia currency strategists, the dollar will remain strong as long as the prospects for the global economy are weak enough.   Relevance up to 08:00 2022-09-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/321883
Asia morning bites - 16.05.2023

USD/JPY May Be Going Up And Down Shortly! Fed And BoJ Meeting Take Place Next Week! It May Be Not That Easy For BoJ To Intervene

Kenny Fisher Kenny Fisher 16.09.2022 10:44
After some mid-week volatility, USD/JPY has settled down. In the European session, the yen is trading quietly at 143.59. Markets eye BoJ meeting For anyone following the Japanese yen, next week promises to be interesting, at the very least. The Federal Reserve will hold its policy meeting on September 21st, with the Bank of Japan officials meeting the next day. The Japanese yen continues to lose ground against the dollar, and fell to 144.99 earlier this month, a new 24-year low. Japanese officials have responded with well-worn rhetoric about how Tokyo is concerned about the yen’s depreciation and warning that all options are on the table. We’ve heard this all before, but is this time different? Is Japan seriously contemplating a currency intervention to prop up the ailing yen? There has been some speculation that 145 could be a line in the sand for the MOF, but in fairness, there was similar talk when yen hit 130 and then 135, and the MOF and BoJ stayed on the sidelines. Read next: The Ethereum Market Remains Under Strong Bearish Pressure| FXMAG.COM The likelihood is that Tokyo will avoid such a dramatic move, which last occurred in 2011. The Ministry of Finance (MOF) and the Bank of Japan are not happy with the rapid descent of the yen, but an intervention would require the consent of the G-20, which is unlikely to give its consent. The BoJ made waves this week after a report that it had conducted a rate check, which was viewed as a possible prelude to an intervention. Finance Minister Suzuki has been coy about what moves he might make, and refused to comment on whether the BoJ had made a rate check. The BoJ has rigidly maintained its ultra-loose monetary policy in order to stimulate Japan’s fragile economy. As part of this policy, the BoJ has kept a firm hand on its yield curve control, and the price for this stance has been a freefall in the yen, which is done an astounding 30% against the dollar this year. With the Fed looking to hike next week by 75 basis point, and an outside chance of a massive full-point increase, the yen’s downtrend is likely to continue, barring a spectacular response from Japanese officials. USD/JPY Technical 1.4363 is the next line of resistance, followed by 144.81 USD/JPY has support at 142.56, followed by 141.88 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen - calm before the storm? - MarketPulseMarketPulse
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

EUR/USD Pair: Will The Bulls Or The Bears Dominate In Today's Session

InstaForex Analysis InstaForex Analysis 16.09.2022 10:51
Several excellent market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 0.9957 level and the 0.9996 level in my morning forecast and advised making decisions on entering the market. Bulls protecting support at 0.9957 resulted in an excellent signal to buy the euro in the first half of the day, which resulted in an increase of more than 40 points to the 0.9996 area. I expected the bears to be active there. A false breakout at this level resulted in a signal to open short positions, and at the moment the pair collapsed by 25 points at once. After a surge in volatility in the afternoon, which occurred as a result of mixed fundamental statistics for the US, trading was mainly carried out around the level of 0.9996 and it was not possible to get clear signals to enter the market. When to go long on EUR/USD: Monthly growth in retail sales in the US and a rather large annual decline did not allow the US dollar to seize the initiative. As a result, the pair continued to trade in the narrow horizontal channel it has been in since Wednesday. This morning we have data on the consumer price index in Italy and the consumer price index in the euro area. The latter will be quite important. If inflation in the eurozone continues to grow in August, and according to economists' forecasts, the index should remain unchanged and amount to 9.1%, then the demand for the euro may return at the moment, as this will force the European Central Bank to continue a rather serious fight against inflation through higher interest rates. On the other hand, an increase in borrowing costs has never led the economy to develop, so it is safe to expect it to continue to slide into recession - this hurts the euro in the long run. In case the pair is under pressure again, it is best not to rush into long positions. The optimal scenario would be a false breakout near the new support at 0.9984, which is the middle of the horizontal channel. This will provide an entry point for a larger up correction with an immediate recovery target towards 1.0015. As I noted above, strong eurozone statistics could help the euro, so a breakthrough and test from 1.0015 would hit bearish stops, which would create another signal to open long positions with the possibility of a push up to the 1.0050 area. A more distant target will be resistance at 1.0084, where I recommend taking profits. If the EUR/USD declines and there are no bulls at 0.9984, the pressure on the pair will increase. The optimal decision to open long positions in such conditions would be a false breakout near the low of 0.9957. I advise you to buy EUR/USD immediately on a rebound only from 0.9922, or even lower - in the area of 0.9880, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears continue to control the upper limit of the horizontal channel, which coincides with the parity of the euro against the dollar, thereby controlling the entire market. The longer the pair is below 1.0000, the more likely it is that the euro would fall further along with the renewal of annual lows. And so the bears' main task is to protect the resistance of 1.0015, the test of which may occur in case we receive good statistics on the euro area. I expect big players to appear from 1.0015, so along with a false breakout, you can open short positions in order to further move the euro down to 0.9984. A breakdown and consolidation below this range with a reverse test from the bottom up creates another sell signal with the removal of bulls' stop orders and a larger fall of the pair to the lower border of the horizontal channel at 0.9957. I recommend taking profit there. A more distant target will be a low of 0.9922. If EUR/USD jumps during the European session, as well as the absence of bears at 1.0015, the demand for the euro will increase, and an upward correction will lead to the next resistance at 1.0050. In this scenario, I recommend opening short positions from 1.0050 only if a false breakout is formed. You can sell EUR/USD immediately on a rebound from the high of 1.0084, or even higher - from 1.0118, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT report) on September 6 logged a decline in short positions and a sharp increase in long positions. Considering that all this was ahead of the European Central Bank meeting, at which the central bank raised interest rates by 0.75% at once, such changes are not surprising. With an ever smaller gap in interest rates between the Federal Reserve and the ECB, the demand for the euro will gradually return, but you need to understand how difficult the European economy is now and how difficult it will be for this winter period - especially with such high energy prices due to the deficit. In the US, the Fed also plans to raise interest rates by 0.75% as early as next week, but quite a lot will depend on what inflation data comes out. If the growth rate of consumer prices remains at a high level, the central bank will not hesitate for a long time. The COT report indicated that long non-commercial positions rose by 3,019 to 205,277, while short non-commercial positions decreased by 8,308 to 241,626. As of the end of the week, the overall non-commercial net position remained negative, but rose slightly to -36,349 against -487,676, which indicates the first prerequisites for building an upward correction for the pair and finding the bottom. The weekly closing price decreased and amounted to 0.9917 against 1.0033. Indicator signals: Moving averages Trading is conducted in the area of 30 and 50-day moving averages, which indicates some market uncertainty. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of a decline, the lower border of the indicator around 0.9984 will act as support. In case of growth, the upper border of the indicator in the area of 1.0015 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 06:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321867
Asia: Chinese Retail Sales Rose | Does Weaker CNH (Reminbi) Support Chinese Economy?

Asia: Chinese Retail Sales Rose | Does Weaker CNH (Reminbi) Support Chinese Economy?

Alex Kuptsikevich Alex Kuptsikevich 16.09.2022 10:15
China's data package released this morning exceeded expectations in countering the worsening market sentiment. Official data showed a 5.4% y/y rise in retail sales in August compared to the expected 3.8%. The retail sector has benefitted from pent-up demand after a sluggish 2.7% MoM. Industrial production added 4.2% YoY against expectations of 3.8%. These improvements are mainly attributable to the easing of coronavirus restrictions but may also be a reaction to the stimulus package implemented last month. A look at USD/CNH The recent economic acceleration may also be linked to the weaker renminbi, which has lost 4.7% against the dollar in less than a month. The USDCNH gained 11.5% from March local lows. In contrast to Europe, where a weak Euro is becoming a brake on the economy, the weaker renminbi may be warmly greeted by the authorities. China's consumer and producer prices growth is close to 2.5% y/y, compared with 9% CPI growth in the Eurozone and 8.3% in the USA. The weaker yuan supports Chinese exports' competitiveness and slightly boosts domestic consumption but has not yet provoked excessive pressure on prices. Yesterday the Chinese offshore yuan crossed the 7.0 per dollar line and is trading at 7.03 today. A significant psychological level in the past forced the authorities to step in to defend their currency in 2016 and 2018. In 2019 and 2020, the turning points have been higher, close to 7.15. It is well worth being prepared that we will not see any meaningful action or serious verbal interventions by the Chinese or US authorities up to these levels.
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The Pound To The US Dollar Pair: Britain's Economy Is Not Going To Help The Bulls

InstaForex Analysis InstaForex Analysis 16.09.2022 11:08
Several good market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1495 level in my morning forecast and advised making decisions on entering the market from it. The bears did not delay the attack and actively flunked the pound to the nearest support area of 1.1495, where I advised you to open long positions. A false breakout at 1.1495 only resulted in a 25-point bounce for the pound. In the afternoon, after reviewing the technical picture, the bulls continued to defend 1.1482, but the more often this level was tested, the less the pair bounced up - each time the movement was no more than 25 points. By the end of the trading session, 1.1482 was broken. When to go long on GBP/USD: Data on the growth of retail sales in the US added pressure on the British pound, which is clearly aiming for a return to the September lows and their renewal. Today there is only a report on the change in the volume of retail trade excluding fuel costs in the UK for August this year, which clearly does not bring anything good, as economists fear a sharp decline in sales - this, theoretically, will harm the pound and indicate the deplorable state of the British an economy already suffering from a household cost of living crisis. The most convenient scenario for opening long positions in the current difficult conditions will be a false breakout in the area of the nearest support at 1.1441, formed at the end of the last week. In order to recover in this case, the goal will be the resistance of 1.1476, slightly above which the moving averages go, playing on the bears' side. Only a breakthrough and test to the downside of this range could pull speculators' stops in its wake, creating a new buy signal on the rise to the more distant 1.1513 level, allowing the bulls to stop the bear market and move trading into a horizontal channel. The farthest target will be the area of 1.1547, where I recommend taking profits. In case GBP/USD falls and the bulls are not active at 1.1441, the pair will be under pressure again, which will open up the prospect of updating the September low. In this case, I advise you to postpone long positions until the next support at 1.1406. I recommend opening long positions on GBP/USD immediately for a rebound from 1.1358, or even lower - around 1.1313, counting on correcting 30-35 points within the day. When to go short on GBP/USD: The bears are slowly but surely pushing the pound to the September lows, taking advantage of good US statistics. Obviously, to keep the market under their control, they need to protect the nearest resistance at 1.1476, which will lead to an excellent signal to open new short positions - especially after UK retail sales data turn out to be worse than economists' forecasts. In this case, the immediate target will be the area of 1.1441, which will most likely be of an intermediate nature, although the bulls will try to show themselves there as much as possible so as not to leave everything at the last level of 1.1406. A breakthrough and reverse test of 1.1441 would provide a good sell entry point with a fall towards 1.1406. The farthest target will be a new yearly low of 1.1358. In case GBP/USD grows and the bears are not active at 1.1476, a correction may lead to the area of 1.1513. Only a false breakout at this level will provide an entry point to short positions as we count on a slight downward movement from the pair. If traders are not active there, I advise you to sell GBP/USD immediately for a rebound from 1.1547, counting on the pair's rebound down by 30-35 points within the day. COT report: An increase in short positions and a decrease in long ones were recorded in the Commitment of Traders (COT) report for September 6. This once again confirms the fact that the British pound is in a major downward peak, from which it is not as easy to get out as it might seem. Last week, Bank of England Governor Andrew Bailey made a speech, who did his best to inspire confidence that the central bank will continue to follow the path of defeating inflation and continue to aggressively raise interest rates. This suggests that at its next meeting the committee will probably raise rates by 0.75% at once, following the example of other central banks. However, the UK economy is getting worse and worse, and GDP is shrinking quite quickly, as evidenced by recent reports, which does not give confidence to investors. With high inflation and a looming cost-of-living crisis in the UK, it will be quite difficult for bulls to get room to take long positions as nothing good is in store for the stats ahead. The latest COT report indicated that long non-commercial positions decreased by 5,746 to 52,731, while short non-commercial positions rose by 15,516 to 103,163, which led to an increase in the negative value of the non-commercial net position to -50,423 versus -29,170. The weekly closing price collapsed from 1.1526 against 1.1661. Indicator signals: Trading is below the 30 and 50-day moving averages, indicating a continuation of the bear market. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair falls, the lower border of the indicator around 1.1441 will act as support. In case of growth, the upper border of the indicator around 1.1513 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 06:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321871
Bitcoin Has Fallen Past The $22k Level Which Is A Bearish Signal

Bitcoin: The Strong Downside Pressure Will Continue

InstaForex Analysis InstaForex Analysis 16.09.2022 11:10
Technical analysis: BTC has been trading sideways at the price of $19.755 but I see symmetrical triangle pattern in creation, which is sign for potential downside continuation. Trading recommendation: Due to the strong downside pressure in the background and symmetrical triangle pattern in creation, I see potential for further downside movement. Watch for the selling opportunities in case of the breakout of the triangle pattern. Downside objectives are set at the price of $19.475 and $18.500. Stochastic oscillator is showing fresh downside cross from the overbought zone, which can be good sign for the further downside continuation. Key resistance is set at the price of $20.400 Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 09:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293074
Gold's Hedge Appeal Shines Amid Economic Uncertainty and Fed's Soft-Landing Challenge

China's Economy Remains Full Of Potential

TeleTrade Comments TeleTrade Comments 16.09.2022 11:19
China's President Xi Jinping delivered a speech at Shanghai Cooperation Organisation (SCO) summit in Uzbekistan on Friday. Key quotes   Will prevent foreign forces from instigating 'colour revolution'. Welcome all countries to sign up to china's global security initiative. China will train 2,000 law enforcement personnel over the next five years for sco member countries. Will step up cooperation on Belt and Road initiative. Will provide 1.5 bln yuan worth of humanitarian aid to developing countries. Urges countries to stop zero sum game and bloc politics. China's economy remains resilient, full of potential.   Related reads PBOC: Will aim to stabilize employment, prices AUD/USD breaks below 0.6700, hits the lowest level since June 2020 amid stronger USD
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

The USD/CAD Pair With Potential For Further Upside Movement

InstaForex Analysis InstaForex Analysis 16.09.2022 11:29
Technical analysis: USD/CAD has been trading upside as I expected and the price has reached the first upside objective at the price of 1.3280. Anyway, I see potential for further upside movement due to the strong upside momentum. Trading recommendation: Due to the strong upside pressure in the background and breakout of the key multi-year resistance at the price of 1.3220, I see potential for further big growth. Watch for the potential buying opportunities on the intraday dips with the upside objective at the price of 1.3400 MACD oscillator is showing fresh upside momentum, which is strong sign that buyers are in control. Key support is set at the price of 1.3140   Relevance up to 10:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293083
ECB press conference brings more fog than clarity

Will The EU Engage With the Middle East To Manage The Energy Crises?

TeleTrade Comments TeleTrade Comments 16.09.2022 11:33
Charles Michel, the President of the European Council said on Friday that the bloc must reduce energy consumption and increase supply. Additional quotes   The EU needs to engage with Algeria, Qatar, UAE and Saudi Arabia to manage the current crises. For most of these four countries its possible to increase supply, we need to determine conditions. Good proposals on energy prices are on the table in the EU, but more will be needed. We discussed with Qatar rerouting gas meant for Asia.   Related reads EUR/USD: Sellers to retain control if 0.9950 fails ECB’s Rehn: There is a case for frontloading the tightening cycle
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

It's Going To Be A Thrilling Week For Euro, Dollar And British Pound (GBP)! Bank Of England And Fed Decide On Interest Rates!

ING Economics ING Economics 16.09.2022 11:54
The prospect of lower near-term inflation takes some of the pressure off the Bank of England to move even more aggressively on Thursday. We expect a second consecutive 50 basis point rate hike, although it's a close call between that and a 75bp move Our Bank of England call We narrowly favour a 50bp hike on Thursday, taking the Bank Rate to 2.25%, although 75bp is clearly on the table and we would expect at least a couple of policymakers to vote for it. It's even possible we get a rare three-way vote – the first since 2008 – if dovish committee member Silvana Tenreyro votes for a 25bp hike as she did in August. If our call is correct, then we expect another 50bp move in November and at least another 25bp in December. That would take Bank Rate to the 3% area. It's a tough meeting to call... Next week’s Bank of England meeting is crucial. It will tell us not only how worried policymakers are about the slide in sterling and other UK markets, but also how the government’s decision to cap household/business energy prices will translate into monetary policy. It has also, undeniably, become a close meeting to call. Hawks at the Bank of England will undoubtedly be concerned about the independent sterling weakness we've seen recently (down 4% in trade-weighted terms), even if in practice it’s unlikely to make a huge difference to the big-picture inflation outlook. Both the Fed and ECB will have also done (at least) 75bp hikes by Thursday, and markets are increasingly concluding the BoE will do the same. But we’d caution against assuming UK policymakers will ramp up the pace of rate hikes simply because that’s what everyone else is doing – or indeed because that’s what markets are pricing. As recently as June, the BoE hiked by ‘only’ 25bp, despite the Fed having done 75bp the night before, and defying market expectations for more. Indeed, there are good reasons to think the Bank will ‘stick to its guns’ and simply repeat the 50bp hike it executed in August. Government energy price guarantee means inflation unlikely to go much higher Source: Macrobond, ING forecasts   One immediate consequence of the government’s decision to cap household electricity/gas bills this winter is that headline inflation should be dramatically lower. We now expect CPI to peak at 11% in October, only slightly above where it is now, compared to 16% in January had the government not intervened. It also means headline inflation should be back around the BoE’s 2% target at the end of next year, crazy as that sounds. All of that should help keep consumer inflation expectations in check, and in fact, we’ve already seen a noticeable pullback in long-term price expectations according to the latest BoE survey. Admittedly there appears to be a wide range of views at the BoE about how much all of this actually matters. But we know from recent comments, notably from hawk Catherine Mann, that some policymakers have had a keen eye on consumer expectations over recent months. By the BoE's own measure, consumer inflation expectations have dipped Source: Macrobond   The flip side, of course, is that extra government support potentially means higher medium-term inflation, even if headline rates are lower in the very near term. We think this is ultimately what most committee members will be more interested in. The hit to GDP this winter is likely to be more moderate than the 2% cumulative decline the BoE forecast in August, while the sharp rise in unemployment it projected is less likely to materialise too. With worker shortages proving to be a long-running issue in the jobs market, the risk is that higher wage growth could become a persistent feature that requires more central bank tightening. That doesn't necessarily have to manifest itself as a radically higher policy rate, and we still believe investors are overestimating the tightening to come. The swaps market is pricing a terminal rate in the region of 4.5% next year. Hiking by 75bp risks adding even more fuel to the fire, something we suspect the committee will be wary of doing, even if there are advantages in front-loading hikes. But even if the Bank doesn’t hike as far as markets expect, we do think the arrival of government stimulus means the BoE won’t be racing towards rate cuts next year, unlike some of its developed market counterparts. Gilts, looking for some clarity Gilts are looking for a much-needed reduction in uncertainty next week. Clearly, a 50bp hike would be a dovish surprise and help reverse some of the front-end’s weakness but even in the case of a 75bp move, the BoE clarifying its reaction function with regards to the energy package would be helpful. Fiscal and monetary policy competing with each other is an unnerving thought for bondholders. The Treasury’s fiscal event next week should also help answer any lingering questions about the size and financing of the energy support measures. Gilts should widen to 200bp against Bund on a generous fiscal package Source: Refinitiv, ING   Even if the gilt ‘fear factor’ eases next week, it doesn’t answer the key question: who will buy all these gilts? A deficit-financed energy package will add to supply and to the BoE reducing the size of its portfolio. Private investors will have to make up the shortfall. This is not impossible but they will likely be some reluctance initially given the amount of new debt released into the market. The BoE’s plan to start outright sales of gilts, albeit in small amounts initially, is an additional source of concern. On Thursday, the Bank is expected to vote in favour of starting this process, despite concerns about stress in the UK bond market. Divergence in the size and financing of energy packages in the UK and the eurozone means the spread between 10Y gilts and bund should widen to 200bp. Read this article on THINK TagsUK fiscal policy Inflation Central banks Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Forex: What to expect from British pound against US dollar - January 17th

UK Sales: British Pound (GBP) Most Probably Doesn't Like August Prints

Alex Kuptsikevich Alex Kuptsikevich 16.09.2022 12:30
A package of retail sales statistics in Britain appears to have removed the last layer of support for the Pound, sending it into a dive. GBPUSD earlier today renewed its lows since 1985, dropping to 1.1350. Sales Drop Fresh data showed a 1.6% m/m and 5.4% y/y drop in sales, which was noticeably weaker than the expected 0.5% m/m and 4.2% y/y decline. This upsetting surprise has added to the pressure on Pound, which has been losing 0.9% against the dollar and yen and 0.6% against the euro after the report. Where Can GBP/USD Go? There has been an almost non-stop, albeit very measured, sell-off in the Pound since August 11, with a brief pause for a shake-out of the dollar bulls' positions. In turn, this momentum looks to be part of a downward wave since March. In that case, the GBPUSD can fall to 1.06, where the 161.8% Fibonacci mark passes from the February peaks to the July lows. It is also worth noting that this technical target is very close to the historical lows of the GBPUSD at 1.0520, which only adds to its attractiveness for the rest of the year. Bank Of England Due to inflation being off the charts by historical standards, the Bank of England has much more motive to make currency or verbal interventions to buy the collapse of the Pound. This is especially true given the recent one-way movement in the British currency. As such, traders and investors should be prepared for a rate hike of more than 50 points next week, as previously done and expected. A tightening of monetary authority rhetoric is also likely.
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

Less Volatility In The Forex Market, The Huge Problems In The Global Economy

InstaForex Analysis InstaForex Analysis 16.09.2022 12:34
Consumer inflation in the US seems to have completely deprived the market of hopes that the Fed, after an aggressive rate hike next week, will continue to raise them less vigorously. This is because the weaker-than-expected decline in inflation on a yearly basis and its rise on a monthly basis have brought to life a new wave of forecasts. FedEx CEO Raj Subramaniam also said that the drop in traffic volumes around the world is a clear indication of the huge problems in the global economy. This led to a decline in the US stock market yesterday. Tesla CEO Elon Musk said the same thing, remarking that an aggressive increase in interest rates would cause irreparable damage to the US economy. But the US Central Bank is too determined to reduce inflation, believing that this is an important task and as long as the state of the economy allows tough measures to be implemented, they must be applied. Next week's meeting will show whether the Fed will give up or not. So far, the forex market, in contrast to the stock market, demonstrates noticeably less volatility. Traders are obviously waiting for the outcome of the Fed meeting, so there will be no noticeable changes until it ends. In this regard, the price movement of EUR/USD will stall for a while. But the Fed's continued tight stance on monetary policy will be a major downside, and even the expected increase in the ECB interest rate will not help euro. Most likely, it will drop to a local low of 0.8225 or under. Much will depend on the economic situation in Europe and the United States. If the Fed starts to soften its stance, the pair may hit 1.0200 or higher. Forecasts for today: USDCAD The pair is trading above 1.3250. Further buying pressure will raise the quote to 1.3370. GBP/USD The pair is trading at a local low of 1.1400. A decline below 1.1410 could serve as an impetus for its further fall towards 1.1310.   Relevance up to 08:00 2022-09-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321889
The Silver Might Then Extend The Recent Pullback

Silver Is Under Selling Pressure, A breakout Through A Trend-line Is Needed

InstaForex Analysis InstaForex Analysis 16.09.2022 12:40
Silver drifts lower for the second straight day and drops to a fresh weekly low. Break below 50 DMA and the $19.00 mark supports prospects for further losses. A breakout through a descending trend-line is needed to negate the negative bias. Silver remains under some selling pressure for the second straight day on Friday and drops to a fresh weekly low during the first half of the European session. The white metal is currently trading just below the $19.00 mark, down over 1% for the day. Looking at the broader picture, the recent recovery from over a two-year low, the $17.55 area faltered near a descending trend-line resistance earlier this week. A subsequent slide below the 50-day SMA and the $19.00 round figure suggests that the corrective bounce might have already run out of steam. Moreover, technical indicators on the daily chart, so far, have been struggling to gain any meaningful traction and are placed in negative territory. This further adds credence to the near-term bearish outlook and supports prospects for some meaningful near-term depreciating move for the XAG/USD. From current levels, the $18.45-$18.40 region could act as strong immediate support. A convincing break below will make the XAG/USD vulnerable to accelerating the fall towards the $18.00 mark. Bears might eventually aim to challenge the YTD low, around the $17.55 area touched earlier this month. On the flip side, momentum back above the $19.00 mark now seems to confront resistance near the $19.25 region (50 DMA). Sustained strength beyond might trigger a short-covering rally and has the potential to lift the XAG/USD towards the next relevant hurdle, around the $19.65-$19.75 supply zone. The latter now coincides with a descending trend-line barrier extending from May monthly swing high. This is closely followed by the $20.00 psychological mark, which if cleared decisively will be seen as a fresh trigger for bullish traders and pave the way for some meaningful appreciating move.  Silver daily chart
Swiss Pension Fund Publica Will Increase Its Share Of Gold To 1%

US Manufacturing Sector Overview, The Gold Price Notes A Sharp Decline

InstaForex Analysis InstaForex Analysis 16.09.2022 12:50
Yesterday, reports from the New York Federal Reserve and the Philadelphia Federal Reserve showed a mixed picture of the US manufacturing sector, with the gold market reacting with a sharp drop below the price seen in March 2021. On Thursday, two regional central banks released a review of the manufacturing sector. The New York Federal Reserve said the Empire State Manufacturing General Conditions of Business Index rose to -1.5 in September, up sharply from a fall to -31.3 in August. The data beat expectations as economists had expected the index to show a contraction of -12.7. Meanwhile, the Philadelphia Fed said the manufacturing business index fell to -9.9 in September, down from 6.2 in August. The data fell short of expectations as the consensus forecast was for a fall to around 2.8. While manufacturing activity in the New York region remains under contraction pressure, it has improved significantly since August, which saw the largest drop in survey history since the pandemic. Meanwhile, Philadelphia's manufacturing sector has been relatively volatile over the past few months. Activity recovered in August after falling to a two-year low in July. However, the August momentum was short-lived, and everything returned to July levels. Looking at the components of the Empire State survey, the New Orders index rose to 3.7 from -29.6 in August. The shipments index rose to 19.6 from -24.1. The report also notes a significant improvement in the labor market, with the employment index rising to 9.7. In terms of gold prices, the report notes a sharp decline in inflationary pressures, with the Price Paid index falling to 39.6 from 55.5 in August. Meanwhile, a survey by the Federal Reserve Bank of Philadelphia paints a slightly different picture, emphasizing that "this is the third negative index reading in the past four months." Looking at some components of the report, the new orders index fell to -17.6 from -5.1 in August. The shipments index fell to 8.8 from the previous reading of 24.8. The labor market also lost momentum: the index of the number of people employed fell to 12 compared to the August value of 24.1. As with Empire State, the Philadelphia Federal Reserve Bank survey showed a significant decline in inflation. The Price Paid index fell to 29.8 from a previous reading of 43.6.   Relevance up to 09:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321903
NatWest Group Reports Strong H1 2023 Profits Amid Rising Economic Concerns

Will Banks Come To Recue Of The Pound To The US Dollar Pair?

InstaForex Analysis InstaForex Analysis 16.09.2022 14:12
GBPUSD is taking lows at dropping below 1.14 and is now trading in territory not seen since 1985! Back then GBPUSD was spiking down to around 1.05 before Central banks joined together to lift it.Will they come to rescue this time around?If GBPUSD closes the week below 1.14 and RSI closes the week below its rising trendline there could be more downside in store for GBPUSD.The latest correction here in Q3 has reached 1.764 projection and could short term extend to 2.00 projection i.e., 200% of the correction peak and trough, at 1.1226.However, looking at the entire 2020-2022 up-and down move 1.382 Fibonacci projection of that is 1.0323.To reverse this very bearish picture GBPUSD needs to close above 1.2295. EURGBP has broken above key resistance at 0.8720. Weekly RSI is above 60 i.e., in positive sentiment indicating higher levels.If this current upward move is top be just a long as the uptrend from Q1 till Q2 EURGBP should reach 0.8858 which is around the 0.618 Fibo retracement of the Q3 2020 through Q1 2022 downturn.However, the current bullish move is likely to be longer than first move to test 0.8720 resistance taking EURGBP to the 0.764 retracement and the 1.382 extension around 0.9050. But a spike up to the 1.618 extension at 0.92 is not out of the question.To reverse this bullish picture EURGBP needs to drop below 0.8395. Source: https://www.home.saxo/content/articles/forex/ta-gbpusd-eurgbp-16092022
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

Mixed Macroeconomic Data And Behavior Of Currency Pairs

Saxo Bank Saxo Bank 16.09.2022 14:18
Summary:  The US dollar continues to drive higher together with the pricing for the Fed’s terminal policy rate reaching new highs near 4.50%. The JPY managed to hold the line and then some against a surging greenback as the market seems unwilling to challenge the Bank of Japan for now despite the higher US yields. Elsewhere, the descent in sterling is verging on scary, with GBPUSD staking out new record lows since 1985 below 1.1400 as EURGBP broke the range highs. FX Trading focus: Sterling descent getting scary after weak UK Retail Sales. USDJPY stays tame even with stronger USD and higher US treasury yields. The USD arched to new highs this morning versus a majority of G10 currencies, with USDJPY the notable pair not participating in the move as the market seems unwilling to challenge the Bank of Japan for now. One of the proximate triggers for a shift lower in risk sentiment late yesterday was the weak result and guidance from FedEx after US trading hours. As well, US short treasury yields continue to rise and provide plenty of pressure on markets. As for USDJPY, arguably longer yields are a more important coincident indicator, and US long yields have not yet broken to new cycle highs (3.50% for the US 10-year Treasury benchmark) although they are pushing hard on that level. The short end of the US yield curve, continues to rise apace even as the predictions for next week’s meeting pulled back slightly, meaning that the “terminal rate” for the cycle is getting priced higher – and has nearly hit 4.50%, more than a hundred basis points above where it was in early August. Data from the US yesterday was mixed. The headline US August Retail Sales report was slightly stronger than expected at +0.3% MoM vs. -0.1% expected, but July was revised down to -0.4% from 0.0%. The core Retail Sales data was slightly weaker than expected at +0.3% ex Autos and Gas, likewise with a negative revision (down to +0.3% for July after +0.7% was reported). Important to note that the US reports Retail Sales in nominal dollar changes, so this report suggests stagnating volumes. The latest weekly jobless claims data point yesterday was the lowest since late May, extending the recent falling trend. The UK August Retail Sales data this morning, on the other hand, was distinctly weak and set off an extension lower in sterling, as EURGBP broke above 0.8722 for the first time since early 2021 UK reports Retail Sales in volumes, not in nominal prices, and the month-on-month data developments were extremely weak, pointing to a steep real growth slowdown. Sales including petrol fell -1.6% MoM in August and -1.5% ex petrol. The August Ex Petrol volumes dip takes the data below the 2019 level in August, the first time that has happened in this calendar year. Waiting for the close of trade today for next steps as we have quarterly “witching” of massive derivatives exposures in the US today and with it, possibly erratic trading. Very interesting to see the combination of USDJPY unwillingness to move today together with USDCNH on the rise (so CNHJPY dropping), while EURUSD is also a bit stuck and backing up after trying lower in the European morning today. Some USD exhaustion creeping in at least within the G3? And if risk sentiment continues to deteriorate, will it remain always a function of the rising Fed expectations, or can it jump horses to concerns for the economic cycle? In other words, the eventual chief question may be: what happens to the USD if bond and stocks diverge in direction? Chart: GBPUSDGBPUSD declines took on extra energy this morning in the wake of the weak August UK Retail Sales data that showed a sharp contraction in volumes in August, a sign of real GDP contraction. This took EURGBP to new highs since early 2021 (pointing that out as an indication of isolate GBPS weakness), while GBPUSD drove down to record lows since the mid-1980’s. Not sure what can bring relief for sterling here save for a halt to the relentless rise in US yields and/or thawing risk sentiment after the steep plunge this week. As for next level, only round, psychological ones seem relevant as the 1985 lows near 1.0500 are impossible to compare in real effective terms after 37 years. Bulls will have to hope that sentiment shifts here and for a quick rejection of the new lows to confirm a divergent momentum scenario (stochastic indicator turning back higher after new price lows posted with indicator not at new lows). EURCHF hit new cycle lows yesterday below 0.9550, but these were rapidly rejected. Without any catalyst I could identify, this looks like possible intervention – perhaps as energy prices have calmed, meaning that the SNB wants to lean a bit the other way now? Very curious to hear the SNB next Thursday. Table: FX Board of G10 and CNH trend evolution and strength.The stronger euro beginning to stick out, as does the JPY resilience, as the smaller currencies and sterling have traded weakest. Gold hit the skids on breaking below the big range level around 1,680. CNH is on the weak side, which is interesting, given the strong US dollar, but let’s watch 7.20 in USDCNH to see if there is any real fireworks potential. Table: FX Board Trend Scoreboard for individual pairs.JPY has strengthened enough to have a go at flipping stronger versus NOP and NZD today. More interested in whether the CNHJPY rate flips negative next week. Upcoming Economic Calendar Highlights 1200 – Poland Aug. Core CPI 1215 – Canada Aug. Housing Starts 1400 – US Sep. Preliminary University of Michigan Sentiment Source: https://www.home.saxo/content/articles/forex/fx-update-sterling-descent-takes-gbpusd-to-historic-low-16092022
The Pound (GBP) Will Probably Continue To Move Sideways

The GBP/JPY Pair Is In Downward Trend, The Bank Of Japan Lags Behind Other Major Central Banks

TeleTrade Comments TeleTrade Comments 16.09.2022 14:33
GBP/JPY remains under heavy selling pressure for the fourth successive day on Friday. The dismal UK Retail Sales fuel recession fears and weigh heavily on the British pound. The risk-off Impulse benefits the safe-haven JPY and also contributes to the selling bias. The GBP/JPY cross extends this week's sharp downfall from levels just above mid-167.00s, or the highest since June 22 and continues losing ground for the third straight day on Friday. The downward trajectory drags spot prices to a nearly two-week low during the first half of the European session, though bulls show some resilience below the 163.00 mark. The British pound's relative underframe comes amid the worsening outlook for the UK economy, further fueled by Friday's disappointing macro data. The UK Office for National Statistics reported that monthly Retail Sales recorded the biggest fall since December 2021 and fell much more than expected in August. This, in turn, adds to fears about an imminent recession, which weighs heavily on sterling and exerts downward pressure on the GBP/JPY cross. Apart from this, the risk-off impulse drives some haven flows towards the Japanese yen and aggravates the bearish pressure surrounding the cross. The rapidly rising interest rates, along with headwinds stemming from fresh COVID-19 curbs in China and the protracted Russia-Ukraine war, have been fueling concerns about a deeper global economic downturn. This tempers investors' appetite for riskier assets, which is evident from a fresh leg down in the equity markets. The ongoing downfall, meanwhile, seems rather unaffected by a big divergence in the monetary policy stance adopted by the Bank of Japan and other major central banks. In fact, the BoJ lags behind other major central banks in the process of policy normalisation and remains committed to continuing with its monetary easing. This has been a key factor behind the recent slump in the JPY witnessed since the early part of this year, though fails to lend support to the GBP/JPY cross. It will now be interesting to see if bearish traders can maintain their dominant position as the focus now shifts to next week's key central bank event risks. Both the BoJ and the Bank of England are scheduled to announce their respective policy decision on Thursday. The outcome will play a key role in influencing the GBP/JPY cross and help determine the next leg of a directional move.
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

The EUR/JPY Pair: There Is A Possibility Of A Further Decline

TeleTrade Comments TeleTrade Comments 16.09.2022 14:37
EUR/JPY fades Thursday’s uptick and keeps the familiar range. The cross seems to have moved into a consolidative phase near term. EUR/JPY trades within the familiar range and leaves behind Thursday’s uptick to the 143.70 region. The cross keeps the erratic performance so far this week and extends the corrective downside considering the bearish divergence in the daily RSI seen in past sessions. That said, while further decline should not be ruled out, the cross could likely attempt some consolidation ahead of the probable continuation of the uptrend. In the meantime, while above the 200-day SMA at 135.23, the prospects for the pair should remain constructive. EUR/JPY daily chart
Gold Stocks Have Performed Very Well Under Pressure

Suggestions On How To Trade The Gold To Gain Profit

InstaForex Analysis InstaForex Analysis 16.09.2022 14:43
Previous trading tips for gold pointed at a decrease in prices, from 1757 to 1675. This happened yesterday after the target level of 1675 was broken and quotes moved by as much as 8,000 pips. Plan: Development: Congratulations to those who followed the strategy! As mentioned earlier, gold moved by as much as 8,000 pips. Investors may close positions now to gain profit. The "Price Action" and "Stop Hunting" methods were used as basis of the trading plan. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 10:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321909
BSP Maintains Rates Amid Moderate Inflation; Eyes Further Tightening if Needed

US Dollar, British Pound (GBP), SEK (Swedish Krona) And Other Currencies May Be Fluctuating Next Week As Central Bank Decides On Rates!

ING Economics ING Economics 16.09.2022 15:02
Next week is packed with central bank meetings. The Fed is likely to match the European Central Bank in hiking rates by 75bp, while the Bank of England and Norges Bank are expected to make 50bp moves In this article US: 75bp is our favoured call, however there's a chance for the Fed to go even further UK: Bank of England to stick to 50bp rate hike despite Fed and ECB doing more Sweden: Riksbank to match ECB’s 75bp hike – and there’s a risk of more Norway: Norges Bank to repeat August’s 50bp rate hike Switzerland: SNB will follow the lead of other central banks and hike rates by 75bp Eurozone: PMIs expected to remain below 50 Source: Shutterstock      US: 75bp is our favoured call, however there's a chance for the Fed to go even further All eyes will be on the Federal Reserve meeting next Wednesday. The market was favouring a 75bp hike ahead of the August CPI report, but the much higher-than-expected inflation print has seen the market price in a 20% chance that the Fed will go over and above that by opting for 100bp. A 75bp hike is still our favoured call, but we acknowledge the risk that with inflation proving to be stickier than we had suspected, the subsequent meetings in November and December could see more aggressive action from the Fed than we are currently pencilling in. While the geopolitical backdrop, the China slowdown story, the potential for energy rationing in Europe, the strong dollar and fragile-looking domestic equity and housing markets argue for a more moderate path of tightening in the coming months, if inflation momentum doesn’t slow the bank will hike by a further 75bp in November and possibly 50bp in December. The message from the Fed next week is likely to emphasise data dependency, but its updated economic forecasts are likely to show the end-2022 Fed funds rate at 4.125% rather than 3.4% (July forecast) and we suspect it will be kept at that for 2023, before dropping back to a long-term average rate of 2.5%. UK: Bank of England to stick to 50bp rate hike despite Fed and ECB doing more We narrowly favour a 50bp hike on Thursday, taking the Bank Rate to 2.25%, although 75bp is clearly on the table and we would expect at least a couple of policymakers to vote for it. The announcement of an energy price cap from the government will drastically lower near-term CPI, reducing concerns about consumer inflation expectations becoming de-anchored and reducing the urgency to act even more aggressively. However, the hawks will be worried about the recent independent sterling weakness, and will also argue that the government’s support package could increase medium-term inflation given it reduces the risk of recession. That means it’s a close meeting to call, but if we’re right and the committee does move more cautiously than the Fed and ECB next week, then we expect another 50bp move in November and at least another 25bp in December. That would take Bank Rate to the 3% area. Read our full Bank of England Preview here. Sweden: Riksbank to match ECB’s 75bp hike – and there’s a risk of more With only two meetings left this year, and facing higher-than-expected inflation and a tight jobs market, we expect the Riksbank to hike rates by at least 75bp on Tuesday. We expect a repeat move in November. Norway: Norges Bank to repeat August’s 50bp rate hike Norway’s central bank stepped up the pace of rate hikes in August, and core inflation has continued to push higher than Norges Bank’s most recent forecasts in June. The message from the August meeting was that the central bank is keen to continue front-loading tightening, and we expect another 50bp hike next week. That would take the deposit rate to 2.25%, and we’d expect another 50bp move in November. Switzerland: SNB will follow the lead of other central banks and hike rates by 75bp The Swiss National Bank (SNB) meets next week and is ready to raise its key interest rate for a second time, after the 50bp increase in June. Inflation in Switzerland stood at 3.5% in August, still above the SNB's target of 0-2%, although well below the inflation rate in neighbouring countries. The fact that the Swiss franc is relatively strong against the euro is no longer a problem for the SNB, as it reduces imported inflation. The SNB focuses much more on the real exchange rate, which takes into account the inflation differential and has remained very stable in recent months. With no fears of too much appreciation and with inflation above target, there is little reason for the SNB not to follow the lead of other central banks, especially as it only meets once every quarter, so the next meeting will be in December, while the ECB and the Fed will meet in between. We expect a 75bp rate hike next week. Eurozone: PMIs expected to remain below 50 In the eurozone, we get the first look at economic activity in September with PMIs due on Friday. After two months below 50, we expect another one to follow as manufacturing production cuts due to high energy prices and the end of the tourist season are set to impact business activity. Consumer confidence will also be released next week, where we expect confidence to remain near historical lows for the moment as the cost-of-living crisis continues. Key events in developed markets next week Source: Refinitiv, ING TagsRiksbank Norges Bank Federal Reseve Central banks Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

Forex: British Pound (GBP) Against US Dollar (USD) Charts Shows A Steady Decline

Kenny Fisher Kenny Fisher 16.09.2022 15:11
The British pound continues to lose ground after a brutal retail sales report. The pound dropped as low as 1.1350 earlier today, its lowest level since March 2020. GBP/USD is trading at 1.1373 in the European session, down 0.73%. UK retail sales decline The week wrapped up on a sour note in the UK, as retail sales for August were sharply lower. The headline reading declined by 5.4% YoY, lower than the July release of -3.2% and missing the forecast of -4.2%. It was a similar story with core retail sales, which declined by 5.0%, below the July reading of -3.1% and shy of the estimate of -3.4%. On a monthly basis, retail sales slid by 1.6%, missing the consensus of -0.7% and marking the sharpest decline in eight months. The markets were braced for a weak retail sales report and the only surprise was how sharply consumer spending is falling. The cost-of-living crisis has hammered UK consumers who are in a sour mood and are cutting on disposable spending. Wage growth has not kept up with hot inflation and a YouGov survey found that consumer confidence fell into negative territory in August for the first time since the Covid lockdown in mid-2020. The weak data is another sign that the UK economy is tipping into a recession. The Bank of England meets on September 22nd, a day after the Fed, and is expected to hike rates by 0.75%. The current rate of 1.75% is well below the Fed and other major banks, as the BoE has been slow to tighten, despite spiralling inflation. Governor Bailey has been criticized for throwing in the towel and not doing enough to combat inflation. The BoE is playing catch-up with inflation and could raise rates up to 4.5% next year if inflation does not ease significantly. GBP/USD Technical GBP/USD is testing resistance at 1.1548. Next, there is resistance at 1.1689 There is support at 1.1417 and 1.1306 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound slides after soft retail sales - MarketPulseMarketPulse
Sustainability-Linked Products: Navigating Growth and Challenges for the Future

British Pound (GBP) Has Decreased By 15 Percent So Far!

Conotoxia Comments Conotoxia Comments 16.09.2022 15:19
The UK economy, including the British pound's quotations, has had a very turbulent year. The authority of the British currency may have first been undermined by the exit from the European Union, and then the British economy suffered a blow from a pandemic. The British Isles' severe energy crisis and high inflation may be adding to this. Read next: China Positive Reports,Drop In Retail Sales, Waiting For European CPI| FXMAG.COM Since the beginning of this year, the British pound has lost more than 15 percent of its value against the U.S. dollar. This makes the GBP the second weakest of the world's major currencies, just after the Japanese yen, losing more than 19 percent. In addition, if someone was taking the 2014’s peak as a reference point, the GBP's loss against the USD could reach more than 30 percent. As a result, the market has reached levels last seen in 1985. Source: Conotoxia MT5, GBP/USD, MN The British pound after a rough ride Observed in the chart above, the two significant lows in the region of $1.1400 were first the impact of brexit on GBP quotes, and the second was the impact of the pandemic. Currently, this level seems to be tested for the third time. Today, further disappointing data from the British economy may have contributed to the pound's weakness.  The volume of UK retail sales in August fell 1.6 percent from the previous month, the Office for National Statistics reported on Friday. The regression was larger than analysts had expected. Sales fell on a monthly basis for the first time since July 2021.  Non-food store sales slid 1.9 percent month-on-month, auto fuel sales fell 1.7 percent and grocery store sales were 0.8 percent lower, according to the data, which is summarized by BBN's website. As a result of weakening consumer demand and thus possibly the overall British economy, investors seem abandoning the GBP, which this morning is at its weakest since the 1980s against the USD. Rate hikes are not helping the GBP Expectations of interest rate hikes in the UK at this point also do not seem to be helping the pound. Some analysts note that even the GBP is moving like an emerging market currency. These could be characterized by the fact that the higher the investment risk, the lower the exchange rate, despite interest rate hikes. While interest rates in the UK may be higher than in the US over time, investors seem to be turning away from the pound anyway. It seems that under these circumstances, the British currency might have a hard time regaining investor confidence.   Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. Read article on Conotoxia.com
The NZD/USD Pair Will Have The Potential To Rally Upwards

New Zealand Dollar (NZD) Hasn't Been Supported By New Zealand Economic Data

Kenny Fisher Kenny Fisher 16.09.2022 16:16
The New Zealand dollar remains under pressure, as NZD/USD is having a dreadful week, down 2.47%. In the North American session, NZD/USD is trading at 0.5950, down 0.27%. NZ Manufacturing PMI surprises to the upside It has been a solid week for New Zealand data, but that hasn’t helped the New Zealand dollar, which has fallen to its lowest level since May 2020. Earlier today, New Zealand’s manufacturing PMI for August improved to 54.9, up from 53.5 in July and above the consensus of 52.5. This marked the highest level since July 2021 and manufacturing has now expanded for a fifth month running, with readings above the neutral 50.0 level. This is in contrast to global manufacturing, which has been struggling and slowed to 50.3 in August, down from 51.1 in July. Read next: British Pound (GBP) Has Decreased By 15 Percent So Far!| FXMAG.COM Earlier in the week, New Zealand posted a stronger-than-expected GDP report for Q2. The economy climbed 1.7%, reversing the 0.2% decline in the first quarter. The upswing in growth was driven by the government’s easing of Covid restrictions. The gain in GDP removed any fear of a technical recession, which is defined as two consecutive quarters of negative growth. Now that New Zealand’s economy is flexing its muscles, what does that mean for the Reserve Bank of New Zealand? The central bank was almost spot on with its GDP forecast at the August meeting, predicting a gain of 1.8%. At the meeting, the Bank projected that the cash rate would peak at 4.1% in mid-2023. The GDP release is not expected to change that stance, with the Bank likely to raise rates by 50bp in the October and November meetings, which would bring the cash rate to an even 4.0%. Global Recession? With central banks raising interest rates in order to combat inflation, the World Bank has warned that the global economy may tip into a recession. The World Bank report noted that the three largest economies, the US, China and the eurozone were all slowing sharply, and even a “moderate hit to the global economy” could result in a global recession. NZD/USD Technical NZD/USD is testing resistance at 0.6017. Next, there is resistance at 0.6085 There is support at 0.5929 and 0.5861 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. New Zealand dollar extends losses - MarketPulseMarketPulse
Chinese Stocks: Attractive Valuations Amidst Challenges and a Cyclical Recovery - 12.09.2023

Fed Decides On Interest Rate, So Does BoE - The Coming Week Is Simply Action-Packed

Craig Erlam Craig Erlam 16.09.2022 23:35
US Many on Wall Street are watching the Fed’s rate hiking cycle and are getting nervous they will tip the economy into a recession.  With scorching inflation, the FOMC may consider a full-point rate hike but will likely settle on delivering its third consecutive 75 basis-point increase. At Wednesday’s policy meeting, Fed Chair Jerome Powell will likely acknowledge downside risks to growth are here and unrelenting inflation is forcing them to maintain an aggressive pace of tightening.  Inflation risks are still tilted to the upside and will likely keep the Fed from providing any hints that a “Fed put” is coming. EU  The ECB appears to be one of the few major central banks not holding a monetary policy meeting next week but that won’t keep them out of the headlines. Policymakers are scheduled to make regular appearances including Philip Lane on Saturday which may present some weekend risk. On Friday, the flash PMIs could give an idea of how the economy is coping and whether it is heading for a recession in the fourth quarter, as some fear. UK Monday is a bank holiday in the UK as the country pays its respects to Queen Elizabeth II on the day of her funeral. After being pushed back a week due to the 10-day period of national mourning, the BoE will meet on Thursday and it has a big decision to make. Inflation is running extremely hot – although it did drop back below 10% last month – and while it has likely not yet peaked, the high should be much lower now that the new government has announced a cap on energy bills.  That may come as a relief to many but it could mean higher core inflation and interest rates further down the road. How the BoE responds to all of this without the aid of new economic projections is what will interest investors. The week draws to a close with PMIs on Friday. Russia Markets continue to monitor the situation in Ukraine amid a strong counteroffensive that saw Russia concede a lot of ground while raising the prospect of defeat and waning support for Vladimir Putin. The only economic release next week is PPI inflation on Wednesday.  South Africa The SARB is expected to hike rates by another 75 basis points to 6.25% on Thursday as inflation continues to rise. The CPI is currently well above the 3-6% target range at 7.8% and the central bank will get an update on this the day before their decision, which could play a role in just how aggressive they’ll be this month.  Turkey One central bank that almost certainly won’t be raising interest rates next week is the CBRT. Last month, it unexpectedly cut rates by another 100 basis points to 13% despite inflation running at almost 80%. That has risen further since but the central bank will not be deterred. No change is expected from the CBRT next week but clearly, another rate cut should not be ruled out. Switzerland Inflation continues to run hot which makes a large rate hike on Thursday from the SNB highly likely. Markets are pricing in at least 75 basis points, maybe even 100, taking the policy rate out of negative territory for the first time since early 2015. The central bank loves to spring a surprise though, the biggest recently perhaps being that it’s waited until a scheduled meeting to act. We’ll see how bold it’s prepared to be on Thursday.  China China is expected to keep rates unchanged at 3.65%, as the 1-year LPR (Loan Prime Rate) was just recently adjusted down from 3.7%. If the Chinese central bank unexpectedly adjusts rates to a lower level again, it may be detrimental to the yuan. The PBOC’s fixings are must-watch events now that the yuan has weakened beyond the key 7 against the dollar.   India Traders will pay close attention to the second quarter current account data.  Expectations are for the current account deficit to widen from $13.4 billion to $30.36 billion.  India has been weakening as trade balances balloon and foreign investment takes a big hit.   Australia & New Zealand Traders are awaiting the release of the minutes of the RBA meeting next Tuesday and upcoming speeches by RBA’s Kearns and Bullock. The RBA seems poised to move forward with smaller rate hike moves, but traders will look to see if the latest round of RBA speak confirms the downward shift discussed by central bank chief Lowe.  It will be a busy week in New Zealand as a steady flow of economic data is accompanied by a couple of RBNZ speeches by Governor Orr and Deputy Governor Hawkesby.  The big economic releases of the week are Wednesday’s credit card spending data and Thursday’s trade data.     Japan The FX world is closely watching everything out of Japan. Traders are waiting to see if policymakers will intervene to provide some relief for the Japanese yen. What could complicate their decision is that Japan has a holiday on Monday.   The divergence between the Fed’s tightening cycle and the Bank of Japan’s steady approach continues to support the dollar against the yen. The BOJ is widely expected to keep rates on hold even as core inflation extends above the BOJ’s 2% target.    Singapore The focus for Singapore will be the August inflation report that should show pricing pressures remain intense.  The year-over-year reading is expected to rise from 7.0% to 7.2%.  Economic Calendar Saturday, Sept. 17 Economic Data/Events Thousands pay their respects to Queen Elizabeth II at Westminster  European Central Bank chief economist Lane speaks at the Dublin Economics Workshop in Wexford, Ireland Monday, Sept. 19 Economic Data/Events World leaders attend Queen Elizabeth II’s funeral in Westminster Abbey in London UK Bank Holiday Japan Bank Holiday New Zealand performance services index RBA’s head of domestic markets Kearns delivers the keynote address at the Australian Financial Review Property Summit in Sydney ECB’s de Guindos speaks at the annual Consejos Consultivos meeting   Tuesday, Sept. 20 Economic Data/Events US housing Starts Canada CPI China loan prime rates Japan CPI Mexico international reserves Spain trade Sweden rate decision: Expected to raise rates by 75bp to 1.500% UK Parliament in session Annual UN General Assembly in New York Dockworkers at the UK’s Port of Liverpool are expected to begin a two-week strike Norges deputy central bank Governor Borsum speaks German Economy Minister Habeck speaks at the congress of municipal energy suppliers RBA releases minutes from its September policy meeting. BOC Deputy Governor Beaudry delivers a lecture on “pandemic macroeconomics” at the University of Waterloo in Ontario Wednesday, Sept. 21 Economic Data/Events FOMC Policy Decision: Fed expected to raise rates by 75bps US existing home sales Argentina unemployment, trade Australia leading index New Zealand credit-card spending South Africa CPI Big-bank CEOs testify before the US House Financial Services Committee at a hearing titled, “Holding Megabanks Accountable.” RBA Deputy Governor Michele Bullock speaks at a Bloomberg event in Sydney ECB’s de Guindos to speak at Insurance Summit 2022 organized by Altamar CAM in Cologne, Germany EIA crude oil inventory report Thursday, Sept. 22 Economic Data/Events US Conference Board leading index, initial jobless claims China Swift global payments Eurozone consumer confidence BOJ rate decision: No changes expected with rates and 10-year yield target Japan department store sales New Zealand trade, consumer confidence Norway rate decision: Expected to raise rates by 50bps to 2.25% South Africa rate decision: Expected to raise rates by 75bps to 6.25% Switzerland rate decision: Expected to raise rates by 75bps to 0.50% Taiwan jobless rate, rate decision, money supply Thailand trade Turkey rate decision: Expected to cut rates by 100bps to 12.00% UK BOE rate decision: Markets remain split between expectations for a half-point or a three-quarter-point hike. US Treasury Secretary Janet Yellen addresses the Atlantic Festival in Washington. The UN Security Council holds a meeting on Ukraine   BOE’s Tenreyro speaks at a seminar at the San Francisco Fed on “climate-change pledges, actions and outcomes.” Friday, Sept. 23 Economic Data/Events US Flash PMIs Australia prelim PMI Canada retail sales European Flash PMIs: Eurozone, Germany, France, and the UK Singapore CPI Spain GDP Taiwan industrial production Thailand foreign reserves, forward contracts Norway Central Bank Governor Wolden speaks Sovereign Rating Updates Germany (S&P) Hungary (Moody’s) Sweden (Moody’s) European Union (DBRS) Finland (DBRS) This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Week Ahead - Aggressive tightening - MarketPulseMarketPulse
ECB press conference brings more fog than clarity

The Situation On The European Markets Is Getting Worse

InstaForex Analysis InstaForex Analysis 17.09.2022 08:25
On Friday, key European stock indices declined dramatically. Market participants analyzed the alarming data about the record acceleration of inflation in the EU countries. The negative dynamics on the US exchanges became an additional downward factor for the European stock market. At the time of writing, the STOXX Europe 600 index of Europe's leading companies fell by 1.2% to 409.8 points. Meanwhile, the French CAC 40 sank by 1.47%, the German DAX decreased by 1.71%, and the British FTSE 100 lost 0.06%. Top gainers and losers The shares of carmaker Volkswagen AG dropped by 2%, the stocks of Mercedes-Benz Group AG fell by 2.2% and BMW AG lost 1.4%. The market capitalization of European logistics companies Deutsche Post AG and Royal Mail Plc crashed by 7.3% and 10.3% respectively. The main reason the decline in quotes fell was that the US rival of these companies, FedEx, published weak preliminary data reports. Shares of German energy company Uniper SE dropped by 13% due to the news that its management continues to discuss with the German government a possibility of increasing the state's stake in the company to the major share, which potentially opens the way to its full nationalization in the future. Market sentiment Friday morning saw fresh statistics on consumer prices in the euro region. Thus, the annual inflation rate in the European Union rose to 9.1% in August from July's 8.9%, thereby breaking a historical record. Meanwhile, auto sales in the eurozone rose 4.4% year-over-year in August. The figure broke a 13-month losing streak. According to the European Automobile Manufacturers Association (ACEA), last month the number of registered cars in the countries of the European Union amounted to 650,305 thousand against 622,821 thousand in August 2021. According to the report of the National Statistics Office of Great Britain (ONS), last month retail sales in the country declined by 1.6% for the month and 5.4% for the year, which was the maximum drop for the whole year. At the same time the market had forecast a decline of only 0.5% for the month and 4.2% for the year. The weak UK data was further evidence that the local economy is sliding into recession, as the cost of living crisis is permanently reducing the spending of local households. The Bank of England will hold its next meeting at the end of next week. Analysts believe the British Central Bank will increase the interest rate by 75 basis points. Next Thursday, the regulator will have to adjust its next steps in monetary policy, taking into account the measures of the new government of Liz Truss on limiting energy prices. Recall that during the August meeting, representatives of the Bank of England predicted that inflation in the country will peak at 13.3% by the end of 2022, after which the UK will plunge into recession and will not emerge from it until early 2024. Earlier, British financial conglomerate Barclays predicted a recession in Europe in the first half of 2023. In addition, analysts at the bank suggested that the economy of the Euro-region will decrease by more than 1% during the calendar year. On Friday the participants of the European stock market returned to the discussion of the prospects of monetary policy tightening by the leading central banks of the world. On Thursday, representatives of the World Bank said that recession risks in 2023 are increasing against the background of a simultaneous rise in central bank rates and the energy crisis in Europe. Earlier, the International Monetary Fund said a slowdown in the global economy was imminent. At the same time, Indermit Gill, chief economist at the World Bank, stressed that he was concerned about global stagflation (a period of low growth and high inflation). Recall that last Thursday at its September meeting the European Central Bank raised the prime rate on loans to 1.25% per annum, the rate on deposits - to 0.75% and the rate on margin loans - to 1.5%. At the same time the rate of discount rate increase immediately by 0.75 percentage points for the first time in history. In addition, members of the Central Bank noted that the regulator intends to continue raising the rate in the upcoming meetings. Thus, the ECB chairman Christine Lagarde said that the further pace of interest rate increases will depend on the incoming statistical data. An important downward factor for key indicators of European stock exchanges on Friday was also the weak results of the last trading session on the US stock market. Thus, the Dow Jones Industrial Average index declined 0.56% on Thursday, falling to a one-month low. Meanwhile, the S&P 500 shed 1.13% and the NASDAQ Composite dropped 1.43%. Previous trading results On Thursday, European stock market indicators closed in the red zone, ending in a minus for the third consecutive session. Market participants were walking away from risky assets amid concerns about the prospects of the US Federal Reserve's monetary policy tightening amid slowing economic growth. As a result, the composite indicator of Europe's leading companies STOXX Europe 600 fell by 0.65% to 414.78 points. In this case, the maximum decline among the components of STOXX Europe 600 showed securities of the Swiss online pharmacy Zur Rose Group AG (-10%) and the German supplier of warehouse equipment Kion Group (-6.7%). Meanwhile, the French CAC 40 decreased by 1.04%, the German DAX lost 0.55% and only the British FTSE 100 grew by 0.07%. The value of securities of Finnish telecommunication equipment manufacturer Nokia dropped 1.2% and that of Ericsson, a Swedish telecommunication equipment manufacturer, dropped 2.9%. The day before, analysts at Swiss financial conglomerate Credit Suisse upgraded recommendations for Nokia shares to "above market" from "neutral" and lowered them for Ericsson to "below market" from "above market. Quotes of the British-Dutch oil and gas company Shell fell by 1.1%. Earlier, the media reported that the chief executive officer of the oil giant - Ben van Beurden - will leave his post at the end of 2022. At the same time, from January 1, 2023, the company will be headed by Wael Savan, who currently serves as director of complex gas development. The market capitalization of the French energy company Electricite de France SA decreased by 0.6%. On the eve of the company's management announced that against the backdrop of reduced electricity generation at nuclear power plants, its profits for 2022 will be significantly lower than previously expected. The value of Hungarian airline Wizz Air stock dropped by 5.6% on news about the purchase of 75 A321neo planes from the Dutch Airbus. At the same time Airbus share price fell by 0.6%. Fashion retailer H&M's stock price dropped 0.5%. Earlier the company reported lower-than-forecasted quarterly sales. Market capitalization of Swiss pharmaceutical company Novartis declined by 0.4%. The day before representatives of the pharmaceutical giant said that the company became the subject of an investigation by the Swiss Antitrust Commission on the use of patents. The British online retailer THG Holdings PLC plummeted 18.4% The day before the company said that its sales this year would be below forecasts amid falling consumer appetite. The key reason for the spectacular fall of the French index the day before was the weak statistical data on consumer prices in France. Thus, in August the annual inflation rate in the country declined only to 5.9% from July's 6.1%. At the same time, the market forecasted a more significant slowdown in consumer price growth. Meanwhile, in the past month, consumer confidence in the UK went into negative territory for the first time since the coronavirus pandemic in mid-2020. On Thursday, European exchanges continued to discuss data on annual inflation in the United States, which fell only to 8.3% in August from July's 8.5%. Analysts anticipated earlier that the annual consumer price index in the country would fall to 8.1% by the end of the last month. The final data caused noticeable pessimism in world markets, because the level of inflation in August will be carefully evaluated by the Federal Reserve System at the September meeting next week. Analysts are confident that the regulator will not give up another rate hike of 75 basis points amid a slight decline in the consumer price index. Thus, last week the head of the US Federal Reserve Jerome Powell said the central bank was ready to "act decisively" to fight the record level of consumer prices in the country. As of today, about 90% of the market believes that the US Federal Reserve will raise its benchmark interest rate by 75 basis points. At the same time, the likelihood that the rate will only be raised by 50 basis points next week has all but disappeared.   Relevance up to 19:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/321958
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

Is The US Dollar To The Japanese Yen Pair Ready To Resume Growth?

InstaForex Analysis InstaForex Analysis 19.09.2022 08:02
USD/JPY has been increasing for the past two trading sessions. At the time of writing, it is at the closing price of Wednesday last week, heading away from the target support level, which is 141.16. Meanwhile, the nested price channel line at 145.10 is becoming more important. Overcoming the resistance level will open the way towards the target level of 147.10. After all, the MACD line is directed towards the support level of 141.16, pushing the pair up. The Marlin oscillator has also left the overbought zone, indicating that it is ready to resume growth. In fact, in the four-hour (H4) chart, the pair is consolidating under the MACD line and is trying to get above the balance line. This will prompt a shift in interest, mainly in buying dollar instead of yen. The exit of the pair above the MACD line and above 143.76 will indicate the start of the move towards 145.10. And considering that the Marlin oscillator has been consolidating since September 14, there is a huge chance that the pair will hit 147.10.   Relevance up to 04:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321974
At The Close On The New York Stock Exchange Indices Closed Mixed

Fall Of Indices At The Close Of The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 19.09.2022 08:07
At the close on the New York Stock Exchange, the Dow Jones fell 0.45% to hit a monthly low, the S&P 500 index fell 0.72%, and the NASDAQ Composite index fell 0.90%. The leading performer among the components of the Dow Jones index today was Home Depot Inc, which gained 4.43 points (1.63%) to close at 275.97. Amgen Inc rose 3.48 points or 1.53% to close at 231.14. Johnson & Johnson rose 2.52 points or 1.53% to close at 167.60. The losers were Boeing Co shares, which fell 5.49 points or 3.67% to end the session at 144.29. Chevron Corp was up 2.60% or 4.17 points to close at 156.45, while Walt Disney Company was down 2.28% or 2.52 points to close at 108. 25. Leading gainers among the S&P 500 index components in today's trading were Iron Mountain Incorporated, which rose 3.35% to hit 55.29, Newmont Goldcorp Corp, which gained 3.09% to close at 43.71, and also Dollar Tree Inc, which rose 2.89% to end the session at 141.92. The biggest losers were FedEx Corporation, which shed 21.40% to close at 161.02. Shares of WestRock Co lost 11.48% to end the session at 34.15. Quotes of International Paper fell in price by 11.21% to 35.23. Leading gainers among the components of the NASDAQ Composite in today's trading were Panbela Therapeutics Inc, which rose 53.06% to hit 0.58, Applied Opt, which gained 50.40% to close at 3.76, and shares of Axcella Health Inc, which rose 29.57% to end the session at 2.41. The biggest losers were Aditx Therapeutics Inc, which shed 58.52% to close at 4.31. Shares of Esports Entertainment Group Inc lost 46.15% and ended the session at 0.18. Shuttle Pharmaceuticals Inc lost 45.94% to 8.99. On the New York Stock Exchange, the number of securities that fell in price (2294) exceeded the number of those that closed in positive territory (816), and quotes of 121 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,586 stocks fell, 1,158 rose, and 233 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.11% to 26.30. Gold Futures for December delivery added 0.38%, or 6.35, to hit $1.00 a troy ounce. In other commodities, WTI October futures rose 0.29%, or 0.25, to $85.35 a barrel. Brent oil futures for November delivery rose 0.81%, or 0.74, to $91.58 a barrel. Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.10% to 1.00, while USD/JPY fell 0.40% to hit 142.95. Futures on the USD index fell 0.02% to 109.43.   Relevance up to 05:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/293169
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

GBP/USD Pair: There Is Opportunity That The Last Scenario Will Be Repeated

InstaForex Analysis InstaForex Analysis 19.09.2022 08:14
GBP/USD hit the the target level of 1.1385 on Friday. Today is a holiday in the UK, so there is little chance that a similar scenario will be repeated. But if it happens, the pair will reach the target level of 1.1305. So far, the quote is nearing the area of the Marlin oscillator, which may result in a rise to 1.1648 or a long correction. If a convergence does not happen, the pair will go under 1.1305 and head towards 1.1250, then climb to 1.083. In the four-hour (H4) chart, the pair is under the balance and MACD lines, which suggests that a correction to 1.1525 is still possible. And if the quote stays above the MACD line, the pair will grow further to 1.1648. But for now, the nearest target is a consolidation under 1.1385.     Relevance up to 04:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321976
The Euro May Attempt To Resume An Upward Movement

How The Euro To The US Dollar Pair Starts The New Week?

InstaForex Analysis InstaForex Analysis 19.09.2022 08:19
EUR/USD hit two target levels last Friday. The first is 0.9950, while the second is 1.0032. The latter has once again become a resistance level because of the MACD line. Meanwhile, the Marlin oscillator is slightly above zero, but this does not prevent the pair from turning due to the strong resistance level. The oscillator's reversal and the price movement are synchronous. The first target is still the recent support level of 0.9950, while the next target is 0.9850. An alternative scenario is a consolidation above 1.0032 and subsequent growth to 1.0150. In the H4 chart, the pair is trying to fight the resistance level of 1.0032, which was reinforced by the MACD line. The Marlin oscillator is in negative territory, showing the intention to turn down. As such, it is likely that the price will decrease to the first target level of 0.9950.   Relevance up to 04:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321978
"From the technical point of view, ETH/USD retested the major broken downtrend line and now it has turned to the upside"

Over The Weekend The Ethereum Price Has Clearly Broken And Back Tested

InstaForex Analysis InstaForex Analysis 19.09.2022 08:25
Blue line- neckline support In previous posts we warned traders that Ethereum was most probably forming a head and shoulders bearish pattern and a break below $1,500-$1,450 would accelerate selling and provide a new bearish signal. Over the weekend price has clearly broken, back tested and got rejected at the blue neckline. This was once support and is now key resistance. Price is now under pressure and we are looking for a move lower towards $1,000. The head and shoulders pattern target is at $850. However our first target and next important support is at $1,200-$1,180. Short-term trend remains bearish. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 08:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293191
Gold's Hedge Appeal Shines Amid Economic Uncertainty and Fed's Soft-Landing Challenge

Chengdu Returns To Normal Life, The Entry Of Genting Group Into The Competition

Saxo Bank Saxo Bank 19.09.2022 08:30
Summary:  Sentiment in U.S. equities has been dampened by rising expectations of larger rate hikes for the rest of the year and profit warnings and depressed remarks from the management of heavy-weight companies about their business outlook and the economy. All eyes are on the FOMC meeting this Wednesday. China’s August industrial production, retail sales, and infrastructure construction surprised on the upside but housing market activities and home prices remained sluggish. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) are looking bearish again US equities closed off the week with the biggest loss since January after heavy-weight companies were hit by a series of company earnings and guidance woes, with their pain being compounded by rising bond yields. S&P 500 was down 0.7% on Friday and down 4.8% for the week and Nasdaq 100 dropped 0.6% on Friday and 5.8% for the week, wiping out the prior week’s gains. The Nasdaq 100 is now down 29% from its November 2021 peak and the technical indicators on the monthly chart tend to suggest further downside ahead. Big US stock movers   Last week there were a number of industrial titans, first Dow Chemical (DOW:xnys), Eastman Chemical (EMN:xnys), Huntsman (HUN:xnys), Nucor (NUE:xnys), and capped with FedEx (FDX:xnys) warning about grim demand outlook.  FedEx only missed EPS for the August quarter massively but also cut its Nov quarter EPS guidance and completely withdrew the FY2023 guidance, citing significantly worsened macroeconomic trends both internationally and in the US. FedEX tumbled 21.4% on Friday. Amazon (AMZ:xnas) declined 2.2%, following FedEx’ warning. General Electric (GE:xnys) warned the supply chain pressure is having a negative impact on profits.  Uber (UBER:xnys) dropped 3.7% after the ride-hailing services provider following a major data breach in its computer network caused by a hacker.  Amazon (AMZ:xnas) declined 2.2%, being dragged down by the woes in FedEx.  Adobe (ADBE:xnas) slid another 3.1% on Friday and a massive 19.4% in two days since the software maker announced a USD20 billion offer to acquire Figma, collaborated product design platform at 100x of the latter’s recurring revenue. For more discussion on FedEx and Adobe, please refer to Peter Garny’s note here.  Last Friday, over USD3 trillion notional of options expired on Friday and S&P3900 puts traded about 95,000 contracts.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) Trading in treasuries on Friday was mixed, with yields of -2-year and 10-year notes unchanged at 3.86% and 3.45% respectively as 5-year yields came off 3bps to 3.63%, and 30-year bonds underperformed for the first time during the week, seeing yield rising 4bps to 3.51%. Treasuries pared their early losses (higher yields) after the 5-10 year inflation expectations in the University of Michigan consumer sentiment survey fell to 2.8%, the lowest since July 2021.  The underperformance in the 30-year bonds was attributable to supply, including a USD12 billion 20-year treasury bond auction on Tuesday and expected corporate issuance of about USD20 billion this week.  The latest data shows that the holding of Japan, the largest foreign holder of U.S. treasury securities, fell USD2 billion to USD1.23 trillion and China, the second largest holder, saw its holdings increase by USD2.2 billion to USD970 billion in July.     Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Shares traded in Shanghai and Shenzhen plunged, with CSI 300 down 2.4%.  The General Office of the State Council issued guidelines to encourage securities firms, funds, and financial guarantee companies to lower fees.  Shares of brokerage firms fell across the board in mainland bourses by nearly 5%.  East Money (300059:xsec) tumbled 10.8%. Chinese brokerage companies listed in Hong Kong also plunged, with GF Securities (01776:xhkg) down by 8.6%, CITIC Securities (06030:xhkg) down by 5.0%, Huatai Securities (06886:xhkg) down by 4.8%.  Chinese property stocks fell in both the mainland bourses and Hong Kong bourse, following the report that new home prices 2nd to 4th tier cities fell sharply again in August despite the recent relaxation of home purchases in a large number of cities.  The weakness of the property sector in the fixed asset investment data in August and the news that the city of Suzhou resumed home purchase restrictions on non-residents in four districts added to the woes in the developer space.  Country Garden (02007:xhkg) tumbled 7.6%.  The EV space declined, falling from 1% to 4.5% following the Ministry of Industry and Information Technology’s Vice Ministry said that there are “blind investments” and overlapping projects in EV in some provinces and municipalities.  In the China internet space, Kuaishou (01024:xhkg) led the charge lower, down more than 7%, as Alibaba (09988:xhkg), Tencent (00700:xhkg), Meituan (03690:xhkg), and Bilibili (09626:xhkg) down from 1.5% to 4.4%.  Australia’s ASX200 has wiped out July’s rally. Focus will be on RBA minutes released Tuesday The ASX200 shed 2.3% last week, erasing July’s gain but faring better than US equities. The market woes have not only come after Australian 10-year bond yield rose to fresh highs, up 0.2% last week, while hovering in 8-year high neighbourhood. But secondly, market sentiment has also been capped as the Fed is set to aggressively hike rates, which pressures Australia’s tech stocks, with many Aussie tech companies making the majority of their revenue from the US. And thirdly, metal commodities have come under pressure again of late, as China’s demand continues to wane. In fact, fresh Chinese export data shows their rare earths and aluminium exports surged yoy. Meanwhile total China’s imports of steel plunged 16% yoy, corn fell 44% and wheat dropped 25% yoy. The trifecta of issues is seeing the ASX200’s technical indicators on the day, week and month charts flag further downside is ahead. Australian dollar on notice with the Fed to hike this week The AUDUSD is under pressure after hitting a new low last week, 0.6727 US cents, which is about a two year bottom. Despite already losing 7% this year, the commodity currency, the AUDUSD is on notice again this week with the Fed expected to hike by 75bps (0.75%) at its Wednesday meet, which will take the Fed funds rate to 3-3.25%. There is also a slim chance (25% chance) of a full percentage hike of 100bps (1%) after the hotter-than-expected August inflation. Either way, the fundamentals support the US dollar gaining momentum against the Aussie, especially as the RBA is limited in its hiking power and likely to only hike by 0.25% next month. Also consider a jump in the US 10-year yield will likely further bolster the USD. A slightly softer USD heading into the FOMC week The USD is slightly softer going into the FOMC week amid some profit-taking, but it still remains the haven of choice with massive amounts of policy tightening packed into the week. AUDUSD pared some of the recent losses amid China reopening optimism and RBA’s Kearns saying that Aussie home buyers could benefit from higher rates. USDCAD rose to near 2-year highs on Friday at 1.3308, partly oil induced, but also due to increasingly sour sentiment and perceptions that BoC-Fed policy will likely diverge in wake of the latest disappointing Canadian employment data vs still-tight US labor markets. USDJPY will be a key focus with both FOMC and BOJ meetings scheduled in the week, and possibility of another round of strong verbal intervention from the authorities is seen. EURUSD is back above parity, as ECB members stay hawkish, but risks remain titled to the downside in the near term. Crude oil (CLU2 & LCOV2) With massive central bank action scheduled in the week, it can be safely assumed that demand concerns will likely remain center-stage. A spate of rate hikes is aggravating concerns of an economic slowdown, but easing of restrictions in China’s Chengdu today will ease some of the concerns. Dalian will also exit restrictions today. Nevertheless, more supply disruptions remain a risk. Germany seized the local unit of Russian oil major Rosneft PJSC, including three refineries. One of those is now preparing for short-term restrictions in crude supplied via the Druzhba pipeline. WTI futures were seen higher above $85/barrel in early Asian hours, while Brent futures were close to $92. Gold (XAUUSD) Gold saw some recovery after touching support of $1660/oz on Friday as interest rate hike bets picked up following the hotter-than-expected August CPI in the US last week. Further resilience in economic data out of the US has further kept interest rates expectations on an upswing, while rising geopolitical and economic risks are doing little to entice haven buying as the US dollar still remains the prime safe-haven choice. Gold was back close to $1680 this morning in Asia. The risk of the FOMC sending the US economy into a recession before getting inflation under control is rising and, once that occurs, the dollar is likely to turn sharply lower, thereby supporting fresh demand for investment metals. What to consider? University of Michigan survey remains optimisticThe preliminary September University of Michigan sentiment survey saw the headline rise to 59.5 from 58.5, just short of the expected 60, but nonetheless marking a fourth consecutive rise. Notably, the rise in forward expectations was starker than in current conditions, with the former also coming in above consensus expectations. Also, key were the inflation expectations, which echoed what was seen in the Fed surveys last week. The 1yr slowed to 4.6% from 4.8% and the 5yr expectations slowed to 2.8% from 2.9%.   China’s August activity data improved better-than-expected China’s activity data for August came in at stronger than expected growth rates.  Industrial production grew 4.2% Y/Y in August beating the consensus estimate of 3.8% Y/Y and improving from last month’s 3.8% Y/Y.  Higher output in automobile and power generation offset the impact from slower activities in other industries such as pharmaceuticals and computers.  Retail sales grew 5.4% Y/Y in August, well exceeding the 3.3% Y/Y median forecast from the Bloomberg survey and the 2.7% YoY in July. A favourable base effect and stronger auto sales during the month boosted retail sales and more than offset the drag from tightened pandemic control measures and a slow housing market.  Fixed asset investment grew 6.4% Y/Y in August, notably accelerating from the 3.6% Y/Y in July, led by 14.8% Y/Y growth in infrastructure and 10.7% Y/Y growth in manufacturing investments while investment in properties slowed further to a decline of -13.9% Y/Y in August from July’s -12.1%.  China’s property prices in lower-tier cities continued to decline in August According to data released by the National Bureau, the weighted average of new home prices in the top 70 cities in China fell 1.1% Y/Y (vs -0.6% Y/Y in July), driven largely by declines in property prices in lower-tier cities.  The easing of home purchase restrictions by local governments has so not been able to stop the decline in property prices in lower-tier cities.  Sequentially, new home prices in Tier-2, Tier-3, and Tier-4 cities dropped by about 5% M/M annualized while new home prices in Tier-1 cities rose by 1.6% M/M annualized.  An unexpected seventh bidder for Macao gambling licenses created uncertainties about incumbent operators In a tender for the six 10-year casino operating licenses, the six incumbent casino operators faced an unexpected rival from the Malaysian Genting Group which submitted a bid into the tender.  As the maximum number of licenses remains at six, the entry of Genting Group into the competition may mean one of the incumbent license holders might be ousted. Chengdu exits lockdown Chengdu, the largest city in Western China ends its nearly 3-week-long lockdown today and allows its 21 million population to leave their home and resume most aspects of normal life.  Residents are required to do PCR tests at least once a week.  Hong Kong considers ending hotel quarantine for inbound travelers The Hong Kong Government is reviewing and considering plans to end the hotel quarantine requirements for inbound travelers.  Currently, travelers to Hong Kong are required to be quarantined in a hotel for 3 nights and followed by four-day medical monitoring at home and then another 3 days of self-monitoring without mobility restriction.  The news may lift the share price of travel-related stocks, such as Cathay Pacific (00293:xhkg).   For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-19-sept-2022-19092022
Forex: USD/JPY Is Expected To Reach 145 In The End Of The Year. Why Is That?

Forex: Two Possible Scenarios For US Dollar To Japanese Yen (USD/JPY)

Jing Ren Jing Ren 19.09.2022 08:49
The structure of the USDJPY currency shows the formation of a global impulse trend, which consists of cycle waves On the current chart, we see how the price rises in a cycle wave V. Wave V, apparently, takes the form of a 5-wave impulse ①-②-③-④-⑤ of the primary degree. In the specified pulse, the first four parts look completed. Currently, we assume the construction of the primary fifth wave, which takes the form of an intermediate impulse. The price in the final primary wave ⑤ may rise to 148.09. At that price level, wave V will be at 200% of previous cycle impulse III. An alternative scenario shows that the entire cycle wave V has already completely ended in the form of a primary impulse. Thus, in the next coming trading weeks, we can expect a fall in the exchange rate and the formation of a new bearish trend. In the short term we may see the formation of bearish impulse, which will consist of primary sub-waves ① -② -③ -④ -⑤, as shown on the chart, where the first two small sub-waves ① - ② have already been built. The upcoming decline may reach the area of 130.43, that is, the previous minimum of fluctuations, and then even lower.
It's not clear we find out the results of mid-term elections immediately. Binance to buy FTX

US Dollar To Crush Other Currencies This Week? Even A 125bp Rate Hike? Let's Check Four Possible Scenarios For Fed's Decision!

ING Economics ING Economics 19.09.2022 09:48
We expect a third consecutive 75bp hike. High inflation means 100bp is a risk, but inflation expectations and corporate price plans look less threatening and the growth outlook is more uncertain so we don’t see it. Still, a more hawkish message surrounding sticky inflation will see the Fed dots closer reflect the market pricing of a 4.25-4.5% terminal rate Fed Chair, Jerome Powell 75bp remains the call The market was favouring a 75bp hike ahead of the August CPI report, but the higher-than-expected inflation numbers, that saw the core rate accelerate to 6.3% from 5.9%, have led the market to price a 20% chance that the Fed go over and above that and opt for a 100bp move. 75bp is still our favoured call and the overwhelming majority of economists appear to think the same. Inflation does indeed appear to be stickier than we'd first thought and it remains broad-based. That said, there isn’t a great deal the Fed can do about current inflation so its response will depend on where it sees inflation heading. The jobs market remains strong, and near-term activity data has been holding up, but there are encouraging signs on both market and household inflation expectations, and also corporate price plans which suggest inflation may not be as embedded as some in the market fear. Consumer inflation expectations heading lower Source: Macrobond, ING Corporate pricing power shows signs of weakening Indeed, the National Federation of Independent Businesses reports that the proportion of companies looking to raise prices over the next three months has fallen from 51% in May to 32% in August. This is a sizeable turn which, given the strong relationship over the past 40+ years, offers a signal that inflation rates could soon start to slow. After all, in the current environment, there has been a strong argument that consumers flush with stimulus cash have been able to tolerate higher prices. Also, households have been expecting more price rises to come which had effectively given many companies some 'cover' to raise them still further.  But the lagged effects of rate rises, weak equity market performance and concerns over the state of the housing market suggest that consumer spending is plateauing; retail sales, for example, are down 0.7% since March in volume terms. A more competitive environment means less corporate pricing power and fewer inflation pressures. NFIB points to weakening corporate pricing power Source: Macrobond, ING Fed forecasts set to change Nonetheless, we acknowledge that higher near-term inflation prints are not welcome and hurt the Fed’s credibility. The subsequent meetings in November and December could therefore see more aggressive action from the Fed than we are currently pencilling in. We could see more aggressive Fed action Our current 50bp call for November looks on very shaky ground with 75bp probably more likely right now,  while the 25bp we have been forecasting for December could easily become 50bp. As such, depending on what the Fed says, we will be looking to formally change our house view from a 3.75-4% terminal rate in December 2022 to a 4.25-4.5% call. Key to this will be the Fed’s forecasts. Below is a table of what they forecast in June versus what we think they will say on Wednesday. Expectations for the Federal Reserve forecasts Source: Federal Reserve, ING Four alternative scenarios In the graphic below, you can see how we've been exploring different scenarios and their potential impact on the FX and Treasury markets. The forecast levels for EUR/USD and 10Y yields are based on the assumption that both trade at current levels on the morning of the Federal Reserve meeting. The market is currently assuming a 75bp hike as the bare minimum and it would probably be seen as the Fed taking a level-headed, data-dependent approach. A more cautious growth assessment could see yields move a touch lower following their recent sharp increase.  Anything less than 75bp would be perceived very dovishly. A 50bp move would be the catalyst for an initial downward move in the 10Y yield of perhaps 10bp and the dollar weakening with some further follow-through over subsequent days since it would be interpreted as an earlier end to tightening with a lower terminal rate.  On the hawkish side, a 100bp hike would signal a clear intent from the Fed, and in some quarters could be interpreted as a sign of panic. The knee-jerk reaction would be a stronger dollar and a 10bp+ move in Treasury yields with the market pricing a higher terminal rate, especially if inflation forecasts are revised up for 2023 and 2024. A 125bp hike would not just be a signal of panic, it could be an outright risk to market stability with risk assets crumbling. On the one hand, it could prompt a safe haven bid for bonds in subsequent days, but the initial reaction is likely to be a big gap higher in 10Y yields of the order of 25bp. Scenario analysis: The Federal Reserve's alternatives Source: ING 2023 still the year of rate cuts Looking further ahead, we are not in the camp expecting ongoing rate hikes in 2023. The geopolitical backdrop, the China slowdown story, the potential for energy rationing in Europe, the strong dollar and fragile-looking domestic equity and housing markets point to rising recession risks. A more aggressive Federal Reserve rate hike profile and tighter monetary conditions will only intensify the threat. We already expect inflation to fall sharply We already expect inflation to fall sharply on a weaker housing market translating into lower home rental components in CPI. Falling second-hand car prices will also contribute while less aggressive corporate pricing plans amid weaker demand in a recessionary environment will also drive inflation lower. We also should remember that the average period of time between the last rate hike in a cycle and the first Federal Reserve rate cut has averaged just six months over the past fifty years. Given the risks to growth and the potential for lower inflation, we are still forecasting rate cuts throughout the second half of 2023.    If the funds rate breaks above 4%, the 10yr yield gets pulled higher too For market rates, their prognosis is tied up with the terminal Fed Funds rate (i.e. where the Funds rate peaks). When it does peak, the likes of the 10yr Treasury yield will feel unshackled and can go ahead and discount future cuts, with yields capable of trading well through the Funds rate. But we are not at that point just yet; we’re still in the Fed Funds up-move phase. For as long as that’s the case, long tenor market rates will tend to be pulled higher. Should the Fed hike by 75bp in September and by another 75bp in November, that would pitch the Funds rate ceiling at 4%. Against that backdrop, and given the likelihood that the rate pushes above 4%, the 10yr Treasury yield is likely to target the 3.75% area (versus 3.45% currently). One clear consequence is a likely further yield curve inversion Once clear consequence in a likely further inversion of the yield curve. The Federal Reserve will not want to see this become too pronounced, as it would open a gap between the longer-term implied subsequent rate cut discount versus the nearer-term objective to get the Funds rate up. Balance sheet roll-off, which is now running at USD 95bn per month, will slowly address this issue, as the bid for longer tenor bonds is no longer being supported by Fed buying. This also helps to tighten conditions. The Fed has not had a whole lot to say about this in recent months, preferring to let the process play out quietly in the background. But in any case, it is pushing in the same direction as rate hikes and should help to coax longer tenor rates higher. FX Markets: Hawkish Fed takes us a step closer to Plaza 2.0 The dollar goes into the September FOMC meeting on the highs for the year. The story is quite a simple one. Aggressive Fed tightening and US yield curve inversion have taken their toll on the currencies of the more open economies outside of the US – especially those on the wrong side of the energy war. On a year-to-date basis, this leaves the dollar stronger by as little as 5% against the Canadian dollar and as much as 20% against the Japanese yen. The dollar's going to stay at these strong levels Driving the most recent leg higher in the dollar has been the August US CPI data, which has inverted the curve still further and prompted money markets to price Fed Funds close to 4.50% next spring. Could the market shift to pricing a 5% Fed Funds rate? That cannot be ruled out over the coming months were the market to second-guess the meaning of ‘restrictive’ policy and US price data were to continue to deliver some nasty surprises. As such we see the dollar staying at these strong if not stronger levels for the rest of the year. The dollar hitting its highest levels since 1985 has also raised some questions as to whether global policymakers are close to discussing a Plaza 2.0 agreement – or a revised version of the 1985 G5 agreement for an orderly dollar reversal lower. We feel it is far too soon for such an agreement in that for it to be successful the Fed would need to be ready to cut rates – consistent with any coordinated FX intervention to sell dollars probably against euros and yen. Equally the Bank of Japan would need to be ready to hike rates, just as they were in 1985. Neither of these is a given. That said we do have a G20 meeting of Central Bank governors and Finance Ministers coming up on October 12th in Washington. Were dollar strength to be causing collective anguish, a G20 Communique could express some concern with disorderly moves – and provide some more credibility to Japanese threats to intervene to sell USD/JPY. In reality those, FX moves have not been disorderly and we very much doubt US authorities are yet prepared to sanction a weaker dollar – not until the inflation battle is won. Read this article on THINK TagsUSD US Powell Interest rates Federal Reserve Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Gold Has A Chance For The Rejection Of The Support

Gold And Sellers Are Still In Control, Further Downside Movement

InstaForex Analysis InstaForex Analysis 19.09.2022 09:49
Technical analysis: XAU/USD has been trading upside in the background but there is the rejection of the key resistance level at $1.680, which is sign that sellers are still in control. Trading recommendation: Due to the strong downside trend in the background and breakout of the key support at $1.680, I see further drop towards $1.570. Watch for the potential selling opportunities on the intraday rallies with the downside objective at $1.571. Stochastic oscillator is showing fresh downside cross,which is good sign for further downside movement. Key resistance is set at the price of $1.680 Relevance up to 08:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293197
The Analysis Of Off-Chain Metrics Allows Cryptocurrency Supporters To Count On A Reversal

Due To The Strong Downside Trend Bitcoin Has A Potential For The Bigger Drop

InstaForex Analysis InstaForex Analysis 19.09.2022 10:02
Technical analysis: BTC/USD has been trading downside as I expected. The price tested our first downside objective at the price of $18.550. I see potential for further drop. Trading recommendation: Due to the strong downside trend in the background and breakout of the support at $18.500, I see potential for the bigger drop. Watch for the potential selling opportunities on the intraday rallies with the downside objective at $17.700. MACD oscillator is showing fresh downside momentum,which is good sign for further downside movement. Key resistance is set at the price of $20.200 Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 08:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293199
ECB's Knot: July Rate Hike Necessary, Beyond July Uncertain; Canadian CPI Supports Rates on Hold; Global Crypto Market at $1.2 Trillion; Oil Market Tightens with Russian Shipments Drop and China's Support Measures

The USD/JPY Pair Has Potential Breakout To The Upside And Further Bullish Mood

InstaForex Analysis InstaForex Analysis 19.09.2022 10:12
Technical analysis:     USD/JPY has been trading sideways in last few days and there is the symmetrical triangle pattern in creation. Watch for potential breakout to the upside. Trading recommendation: Due to the upside cycle on the USD/JPY and potential for the breakout of the triangle watch for the upside breakout to confirm further bull continuation. Watch for the potential buying opportunities in case of the upside breakout. Stochastic oscillator is showing fresh bull cross, which is good sign for further bull move. Key support is set at the price of 142.50   Relevance up to 08:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293201
Forex: What to expect from British pound against US dollar - January 17th

Let's Look At Euro To British Pound, AUD/JPY And GER 40

Jing Ren Jing Ren 19.09.2022 08:22
EURGBP breaks key resistance The pound tumbles as the UK’s August retail data disappoint. The buying pressure has been building up under June’s peak at 0.8720. The breakout prompted the last sellers to cover. As the euro’s rally gains momentum, this could open the door for a sustained climb towards 0.8900, which is a supply area from January 2021’s sell-off. 0.8800 is the intermediate resistance ahead. The RSI’s overbought situation could temporarily trim the buying and 0.8700 would be the first support in case the euro takes a breather. Read next: How High Will The Bank Of England Raise Rates?| FXMAG.COM AUDJPY seeks support The Australian dollar softens as investors shun risk assets. The pair is looking to hold onto its recent gains after rallying above June’s high at 96.60. However, short-term price action may struggle as there is no sign of committed buying yet. A break below 96.70 has forced leveraged buyers to bail out. The daily support and psychological level of 95.00 is a major area to gauge buying interest. A bounce will need to lift 96.40 before it could take hold. Failing that, a bearish breakout would deepen the correction below 94.00. GER 40 tests critical floor The Dax 40 slips as high interest rates prompt investors to take refuge in cash. After hitting the supply zone around 13500, the index has given up all gains from this month’s rally. This is a strong indication of the prevailing bearish bias. 12610 is the next support and its breach would bring the index back to the critical level of 12420. Then a bearish breakout may cause the remaining bulls to abandon the ship, resuming the downtrend towards 11900 in the medium-term. 12900 is a fresh resistance in case of a bounce.
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

How Can Plan For The EUR/USD Pair Look Like For Today?

InstaForex Analysis InstaForex Analysis 19.09.2022 10:17
Previous trading tips for EUR/USD indicated a possible increase in prices after a false breakdown in the lower limit of the range 0.99500-1.00236. Plan: That happened on Friday, during the US trading session. Quotes rose sharply in price and broke through the limit of the range. Congratulations to everyone who followed the strategy! Euro moved by 800 pips. The trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 08:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321992
Fed Expectations Amid Mixed Data: Wishful Thinking or Practical Pause?

Podcast: The Weak Equity Market, Focus On Copper, The Euro Situation

Saxo Bank Saxo Bank 19.09.2022 11:09
Summary:  Today we look at the weak equity market as traders nervously await a raft of central bank meetings this week as most are set to tighten rates further. In FX, we note the interesting reduction in euro shorts in the US currency futures positioning as the euro remains resilient, with most of the USD long position there expressed in GBPUSD and USDJPY. In commodities, we focus on longer term support for copper, while the equities focus this week is on names like Sea Limited, US homebuilders with the backdrop of US housing data, and Amazon. Today's pod features Peter Garnry on equities, Ole Hansen on Commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/podcast/podcast-sep-19-2022-19092022
FX Daily: Testing the easing pushback

The Euro To The US Dollar Pair Will Have A Bullish Trend

InstaForex Analysis InstaForex Analysis 19.09.2022 11:13
Trend analysis EUR/USD quotes will decrease this week, starting from 1.0014 (closing of the last weekly candle) to 0.9864, which is the lower fractal (yellow dotted line). Then, it will move to the 14.6% retracement level at 0.9987 (yellow dotted line) and to the 23.6% retracement level at 1.0080 (yellow dotted line). Fig. 1 (weekly chart) Comprehensive analysis: Indicator analysis - uptrend Fibonacci levels - uptrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - downtrend Monthly chart - uptrend All this points to an upward movement in EUR/USD. Conclusion: The pair will have a bullish trend, with a first lower shadow on the weekly white candle (Monday - down) and no second upper shadow (Friday - up). So during the week, euro will fall from 1.0014 (closing of the last weekly candle) to the lower fractal at 0.9864 (yellow dotted line), then go to the 14.6% retracement level at 0.9987 (yellow dotted line) and 23.6% retracement level at 1.0080 (yellow dotted line). Alternatively, quotes could drop from 1.0014 (closing of the last weekly candle) to the support line of the downward channel at 0.9804 (thick white line), then go to the 14.6% retracement level at 0.9987 (yellow dotted line). The upward movement may continue from this level.   Relevance up to 08:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321996
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

Canadian Dollar (CAD): Bank Of Canada Decides On Interest Rate Soon And It's Not That Obvious What They're Going To Do

Jing Ren Jing Ren 19.09.2022 11:16
The BOC has taken an even more aggressive rate hike route than the Fed, giving the CAD the fastest rising rate of the majors. This didn't stop the meteoric rise in inflation that most developed countries have been seeing this year, although not as dramatic as in the US. Given the economic interconnectivity with the US, it's not surprising that CPI trends have been similar in both countries. Read next: How High Will The Bank Of England Raise Rates?| FXMAG.COM However, unlike in the US, Canada has been seeing not only a flattening but actual downturn in core CPI, the measure followed by central banks. This opens the question whether the BOC's increased frontloading of the interest rate means they can slow the pace of hikes before other central banks. Particularly as more economists worry that there is a recession on the horizon, if it's not already here. If core rates continue to fall, there would be further arguments for the BOC to not "lead" the Fed higher. The BOC meets again in late October. What to look out for Canada's inflation rate is expected to fall for the second consecutive month to 7.3% from 7.6% prior. This is expected to be supported by a -0.1% monthly rate, compared to 0.1% in July. The figures mirror the results seen in the US, but at a lower level. The drop in global crude prices has contributed to a reduction in energy costs in Canada as well. But what the BOC focuses on is the core rate, which trims off the effects of energy and food prices. And there the situation is a little more complicated, since annual core CPI is expected to rise to 6.2% from 6.1% prior. This is based on an expected acceleration in the monthly measure to 0.6% from 0.5% in July. Putting the pieces together Just like with the US' data from last week, even if the headline inflation rate goes down, the market is likely to react to the core rate. However, the differences that could impact the market here are really small. If the core rate is in line with expectations, it's just a decimal away from the prior. And a variation of a couple of decimal points from expectations is quite common. If the rate were to be at 6.1% or above, it would likely lead to speculation that the BOC will keep its aggressive stance. Because it suggests that a downward trend in the core inflation rate has not been established yet. This idea could get an extra boost later this week if the Fed raises rates by 100bps, which could lead to speculation that the BOC might raise rates by a full percentage point again. What if expectations aren't met? On the other hand, a miss of expectations by just two decimals (or more) would signal that the downward trajectory in inflation is intact. That could return the discussion to how much the BOC will moderate its tightening at the next meeting. And, again, this could be further supported if the Fed hikes by just 75bps on Wednesday. Read next: This Will Be The Highest Rate Level In Five Years| FXMAG.COM As for the Canadian dollar, weakness has been attributed to the expectation that the BOC will "pivot" first. But if headline inflation is coming down, while core inflation signals the BOC will remain aggressive, the upward trend of the USDCAD could get interrupted. Of course, the situation could be reversed if inflation signals the BOC could take a breather in the steep rate climbing.
Sustainability-Linked Products: Navigating Growth and Challenges for the Future

The Situation In The Great Britain Looks Worse Than Ever (GBP/USD)

InstaForex Analysis InstaForex Analysis 19.09.2022 11:39
The markets are scared of stagflation, but if it's anywhere, it's Britain. It is the combination of high prices and extremely slow and, most likely, negative GDP growth that can explain the collapse of the GBPUSD to the 37-year bottom area. And you don't need to blame all the bumps on a strong US dollar. In mid-September, the pound collapsed not only against it, but also against the euro after the release of statistics on retail sales. In August, the indicator sank 1.6% MoM, and on an annualized basis, it was stuck in the red zone for five months in a row. Barring the early days of the COVID-19 pandemic, there hasn't been such a bad streak for retail in over 10 years. MUFG called the report terrible, predicting a further fall in the sterling, and Capital Economics believes that the data indicate that the UK economy is already in recession. Dynamics of retail sales in Britain An attempt to revive it with a £150 billion support package for households affected by the energy crisis and the tax cut of about 1% of GDP announced during the election race by Liz Truss's team is a double-edged sword. Conservative intervention in the gas market could slow down inflation in the short term but accelerate it in the medium term. Indeed, the growth rate of consumer prices in Britain decreased from 10.1% to 9.9% in August, but inflation expectations on the 12-month horizon, on the contrary, rose from 4.6% to a record 4.9%. Fiscal incentives complicate the work of the Bank of England, which, it seems, is simply obliged to act aggressively but is afraid to go too far, fearing the negative impact of an excessively fast monetary restriction on the economy. The derivatives market is fully confident in the increase in the repo rate by 50 bps at the MPC meeting on September 22 and gives a 65% chance of a 75 bps increase in borrowing costs. In the meantime, the dissatisfaction of the electorate with the BoE's monetary policy has reached its climax. Dynamics of public satisfaction with the work of the Bank of England I would not be surprised if, under such conditions, the intervention of the Liz Truss government in the work of Andrew Bailey and his colleagues does not cause public criticism. Thus, the situation in the UK looks worse than ever, but any coin always has two sides. The collapse of the GBPUSD would not have been possible without the strong US dollar. The futures market predicts that in 2023 the federal funds rate will reach 4.5%, and about 70% of Financial Times experts believe that the 4–5% range will become its ceiling. 20% of economists believe that it is even higher. The Fed's monetary tightening potential has not been disclosed, and it appears to be greater than that of the BoE. The American economy looks better than the British one. Where can GBPUSD not fall? Technically, on the daily chart of the analyzed pair, falling quotes below the pivot point 1.138 will increase the risks of the downward trend continuation in the direction of 1.12 and 1.115. While GBPUSD is trading below 1.15, the recommendation is to sell.   Relevance up to 09:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322009
Gold Has A Chance For Further Downside Movement - 30.12.2022

The Sale Of Gold From Last Week Is A Continuation Of The Trend

InstaForex Analysis InstaForex Analysis 19.09.2022 11:45
There is a lot of doom and gloom in the gold market as prices ended the previous week at their lowest level since April 2020. For many analysts, a break below $1,675 would spell the end of gold's three-year upward trend. Along with the fall in gold prices, Wall Street analysts and retail investors turned bearish, highlighting the downside risks in the near term. Last week's gold sell-off is a continuation of a trend that began in early March as markets react to the Federal Reserve's aggressive monetary policy moves to curb inflation, which remains stubbornly high. Markets are almost ready for a 75 basis point rate hike; however, surprisingly resilient inflation in August, with the US CPI rising to 8.3% from an expected 8.1% gain, has left markets priced in at a slim chance of a full 1% move. Rising hawkish expectations supported the US dollar near its 20-year high and lifted 10-year bond yields to 3.5%, the highest level since April 2011. Under these conditions, many analysts say that gold prices have suffered a lot of technical damage and it will be difficult for the precious metal to find any bullish momentum anytime soon. Last week, a total of 22 market specialists took part in a Wall Street survey. Fourteen analysts, or 63%, said they are bearish this week. At the same time, four analysts, or 18%, were optimistic or neutral. In the retail sector, 1,045 respondents took part in online surveys. A total of 395 voters, or 38%, called for gold to rise. Another 489, or 47%, predicted a fall in gold. The remaining 161 participants, or 15%, voted for a sideways trend. Bannockburn Global Forex Managing Director Mark Chandler said his next gold price target is between $1,615 and $1,650 and does not rule out a fall to $1,500 by next year. It is unlikely that the Fed will raise interest rates by 1% this week, the markets still expect further aggressive actions before the end of this year. Chandler noted that markets now see the final federal funds rate at 4.50%.     Relevance up to 09:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322017
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

What The Trading Plan Looks Like For The Major Currency Pairs (EUR/USD And GBP/USD)

InstaForex Analysis InstaForex Analysis 19.09.2022 11:51
Details of the economic calendar for September 16 Retail sales fell 1.6% on a monthly basis in August, according to the UK Office for National Statistics (ONS). This is the most significant decline since December 2021. On an annualized basis, sales fell 5.4% after falling 3.2% in July. The decline in retail sales is a negative factor, which is another sign that the economy is slipping into recession. The pound sterling was actively losing value during the publication of statistical data. In Europe, data on inflation accelerated from 8.9% to 9.1%. The final data coincided with the preliminary estimate. Rising inflation indicates that the ECB will once again raise the refinancing rate by 75 basis points. The expectation of further growth of the rate has a positive effect on the euro during the publication of inflation data. Analysis of trading charts from September 16 The EURUSD currency pair, despite the local manifestation of activity, is still moving within the sideways range of 0.9950/1.0030. This price movement indicates the process of accumulation of trading forces, which will most likely lead to a surge in activity during the completion of the side formation. The GBPUSD currency pair ended last week with an update of the local lows of the downward trend. As a result, the quote was at the levels of 1985, where overheating of short positions on the pound led to a technical pullback of about 90 points. Economic calendar for September 19 The new trading week starts with a blank macroeconomic calendar. Important statistics in Europe and the United States are not expected. While trading is closed in the UK due to the funeral of Queen Elizabeth II. Investors and traders will be guided by the information flow, identifying possible speeches / statements / comments regarding interest rates, inflation, and everything related to monetary policy. Trading plan for EUR/USD on September 19 In this situation, work within the established range is possible, but the outgoing impulse method is considered the most optimal strategy in terms of income and risk. We concretize the above: The downward movement will be relevant after holding the price below 0.9950 in a four-hour period. This move could result in a new downward trend low. An upward movement in the currency pair is taken into account in case of a stable holding of the price above the value of 1.0030 in a four-hour period. Trading plan for GBP/USD on September 19 Despite the current pullback, the market still has a technical signal about the oversold pound sterling. For this reason, the price movement above the value of 1.1450 will lead to the subsequent recovery of the British currency. At the same time, the update of the local low of the downward trend has led to the emergence of an inertial move on the market, where the speculative mood may well ignore all the emerging signals from technical analysis. In this case, keeping the price below the value of 1.1350 may lead to a subsequent increase in the volume of short positions in the pound sterling. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future. Relevance up to 10:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322028
NatWest Group Reports Strong H1 2023 Profits Amid Rising Economic Concerns

Will The Bears Continue To Put Pressure On The EUR/USD And The GBP/USD Pairs?

InstaForex Analysis InstaForex Analysis 19.09.2022 12:49
EUR/USD Higher timeframes Despite a fairly effective rebound upon meeting the resistance levels 1.0016-76, last week closed with a candle of uncertainty. The pair remains tied to the psychological level of 1.0000, while thinking about the future prospects. For the bulls in the current situation, the next important task is to break through the daily Ichimoku cross (1.0037 – 1.0066 – 1.0114 ) and gaining support from the weekly short-term trend (1.0116). For bears, the recovery of the downward trend (0.9864) is still of primary importance. H4 – H1 On the lower timeframes, consolidation and uncertainty have led the pair in the zone of attraction and influence of key levels—0.9999 (central pivot point of the day) - 1.0027 (weekly long-term trend). Breakdown and consolidation above can contribute to the activity of the bulls. The reference points for further upward move within the day are 1.0053 – 1.0091 – 1.0145 (resistance of classical pivot points). Meanwhile, the reference points for the decline are the classic pivot points (0.9961 – 0.9907 – 0.9869), the target for the breakdown of the H4 cloud (0.9897 – 0.9864) and the minimum extremum of the downward trend of higher timeframes (0.9864). *** GBP/USD Higher timeframes Last week failed to realize a close below the significant historical milestone of this area—1.1411 (minimum extremum of 2020). Therefore, for the appearance of new prospects for bearish players, first of all, it is important to overcome the met support. The immediate resistance of the higher timeframes is now the daily short-term trend of 1.1543. H4 – H1 The main advantage on the lower timeframes currently belongs to the bears. Among the reference points for continued decline today is the target for the breakdown of the H4 Ichimoku cloud (1.1342) and the support of the classic pivot points (1.1351 – 1.1286 – 1.1222). If the current correction develops, the key levels for bulls will be 1.1415 (central pivot point) and 1.1531 (weekly long-term trend). Consolidation above and reversal of the moving average will change the current balance of power. *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)     Relevance up to 10:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322030
The Carbon Footprint of Different Steel Production Technologies

The USD/JPY Pair: The Breakdown Will Lead To A Rise

InstaForex Analysis InstaForex Analysis 19.09.2022 12:52
USD/JPY: The chart shows the movement of USD/JPY in the 30-minute (M30) chart. The pair is currently trading at the resistance level of £ 143.50. Its breakdown will pave the way for further growth towards £144.00 per $1. Meanwhile, the breakdown of £144.00 will lead to a rise to £145.00. In case of a rebound, the pair will head towards £143.00. Good luck!     Relevance up to 12:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322046
US and European Equity Futures Mixed Amid Economic Concerns and Yield Surge

The European Commission Proposal On Emergency Power Supply

TeleTrade Comments TeleTrade Comments 19.09.2022 13:07
The European Commission proposed on Monday emergency power to avoid a supply crisis. Reuters reports after obtaining the European Union (EU) draft rules. Key highlights “Under draft rules, the EU is to ask companies to accept priority rated orders for critical products.” “Under EU draft rules EU countries may ask companies to expand or repurpose production lines.” “EU countries may have to build up stockpiles under EU draft rules.” Related reads EUR/USD looks offered, extends the downside below parity Bulgaria says Gazprom is ready to discuss gas supply proposals
The Silver Might Then Extend The Recent Pullback

The Silver Has Been Struggling To Make It Through A Descending Trend-Line Resistance

TeleTrade Comments TeleTrade Comments 19.09.2022 13:13
Repeated failures near a descending trend-line warrant some caution for bulls. Strength beyond the $20.00 mark is needed to support prospects for further gains. Silver struggles to capitalize on Friday's goodish rebound from a one-week low and meets with a fresh supply on the first day of a new week. The white metal maintains its offered tone through the first half of the European session and is currently placed near the daily low, around the $19.30 region. From a technical perspective, the XAG/USD, so far, has been struggling to make it through a descending trend-line resistance extending from the May swing high. Repeated failures near the said barrier suggest that the recent recovery from over a two-year low, the $17.55 area might have already run out of steam. That said, technical indicators on the daily chart are holding with a mild positive bias and support prospects for the emergence of some dip-buying at lower levels. Hence, it will be prudent to wait for some follow-through selling below the $19.00 mark before positioning for any further depreciating move. The next relevant support is pegged near Friday's swing low, around the $18.80-$18.75 region, which if broken decisively will shift the near-term bias back in favour of bearish traders. The XAG/USD might then accelerate the fall to the $18.45-$18.40 intermediate support en route to the $18.00 round-figure mark. On the flip side, the aforementioned descending trend-line, currently around the $19.85 region, might continue to act as an immediate strong barrier. This is closely followed by the $20.00 psychological mark. A sustained strength beyond the latter is needed to confirm a near-term bullish breakout and additional gains. The subsequent move up has the potential to lift the XAG/USD to the 100-day SMA, near the $20.30 area. The momentum could further get extended towards the $20.50 region, above which spot prices could aim to reclaim the $21.00 round-figure mark before eventually climbing further towards the $21.50 area. Silver daily chart
Euro to US dollar - Ichimoku cloud analysis - 21/11/22

Digital Euro As A Facilitation Of Personal Payments In The European Union

InstaForex Analysis InstaForex Analysis 19.09.2022 13:33
The European Central Bank (ECB) has announced it has selected five new partners to help develop a digital euro prototype, with tech giant Amazon shortlisted. There were 54 candidates in total who were eager to help the ECB in its efforts, and the bank settled on Amazon, the European Payments Initiative (EPI), the Spanish multinational CaixaBank, the French payments platform Worldline and the Italian payments-focused bank Nexi. The ECB settled on these options because they best suited the specific opportunities needed to be used. Each of the selected companies will be responsible for different roles in prototyping. Amazon was tasked with developing e-commerce payments as part of the project. CaixaBank will be responsible for developing peer-to-peer online payments for the mobile app, while Worldline will be responsible for the offline version. EPI will manage payments at the point of sale from the payer, while Nexi will process them for the recipient. It is planned that new prototyping will begin in September and be completed by the end of December. The move comes amid a two-year ECB investigation into whether it should issue a digital euro as an alternative to central bank-issued cash. The current phase of research and prototype evaluation is expected to be completed by March 2023. The main purpose of creating a digital euro is to facilitate personal payments in the European Union. A formal decision on whether the ECB will issue it should be made in September 2023. More than 100 jurisdictions are actively exploring the launch of a central bank digital currency, with countries like China leading the way, while the US has yet to decide if a digital dollar is in the country's interests. However, this is likely to change as Friday's release to regulate cryptocurrencies in the US by the White House contained a section that specifically outlined the goals for the US CBDC system, which reflect the federal government's priorities.     Relevance up to 10:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322021
Sustainability-Linked Products: Navigating Growth and Challenges for the Future

On Friday British Pound (GBP) Reached 1985's Level

Kenny Fisher Kenny Fisher 19.09.2022 13:59
The British pound has started the week in negative territory after posting a losing week. GBP/USD is trading at 1.1374, down 0.31% on the day. The pound closed below the 1.14 level on Friday, which hasn’t occurred since 1985. UK at standstill for Queen Elizabeth’s funeral Today is a bank holiday in the UK, as the country is at a standstill for the funeral of Queen Elizabeth II. There are no economic releases out of the UK and just one minor event in the US, but the pound has extended its losses and is still trying to find its footing. The pound has been pummelled by weak UK data and a strong US dollar which has been boosted by an aggressive Federal Reserve. The pound has fallen more than 15% against the dollar and with the UK possibly already in recession, the pound’s downswing could well continue. The cost-of-living crisis has hammered UK consumers who are in a sour mood and are cutting on disposable spending. Retail sales in August plunged by 5.4% YoY, following a July reading of -3.1%. A YouGov survey found that consumer confidence fell into negative territory in August for the first time since the Covid lockdown in mid-2020. Read next: How High Will The Bank Of England Raise Rates?| FXMAG.COM The Bank of England meets on Thursday after the meeting was delayed by a week to the 10-period of national mourning. This could make for a most interesting week, with the Fed meeting one day earlier. Both central banks are expected to raise rates by 0.75%, and any surprises would likely trigger a strong reaction in the markets. The BoE has been widely criticized for failing to get a handle on inflation, which is running at a 9.9% click. Inflation is yet to peak, and if the BoE hikes by 0.75%, it will not only help slow inflation, but will restore credibility in the BoE, which is critical in the fight against inflation. GBP/USD Technical GBP/USD faces resistance at 1.1504 and 1.1656 There is support at 1.1384 and 1.1269 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP dips, UK says goodbye to Queen Elizabeth - MarketPulseMarketPulse
The South America Are Looking For Alternatives To The US Currency

Because Of Interest Rate Decisions, This Week Major Forex Pairs As EUR/USD, US Dollar To Japanese Yen And GBP To USD May Be Rocking!

Conotoxia Comments Conotoxia Comments 19.09.2022 14:05
This could be a very exciting week in the financial markets, as investors will first await and then react to the central banks' interest rate decisions. The US Federal Reserve's decision may come to the forefront. On Monday morning, the U.S. dollar appears to be continuing last week's strengthening, perhaps due to investors' bias toward safer assets and because of a likely hawkish 75 basis point rate hike by the Federal Reserve. The Fed will usher in a series of central bank decisions in the coming days, according to scheduled publications on the macroeconomic calendar. Dollar back on upward wave The U.S. Dollar Index rose 0.23 percent today to 109.92 points as of 07:52 GMT+3 on the Conotoxia MT5 platform, after gaining 0.8 percent at the close of last week. The EUR/USD pair's exchange rate fell 0.26 percent as of the time described, and was again below parity ($0.9984). The dollar may gain in anticipation of a US interest rate hike as early as this Wednesday, September 21, where the FOMC macroeconomic projections will also be released. Here, the market may set its sights on presenting a target range in the current cycle above 4 percent (the end of the cycle was previously estimated to be below 4 percent). Source: Conotoxia MT5, USDIndex, D1 Bank of England and Bank of Japan - what is the situation on GBP and JPY? In addition to the U.S. Federal Reserve's decision, we will also learn about the decision of the Bank of England and the Bank of Japan. On Thursday, interest rates in the UK may rise by 0.5 percentage points, to 2.25%, this is the market consensus. The GBP/USD pair, after Friday's decline, is below $1.14 this morning at 08:02 GMT+3. Thus, the pound's exchange rate against the US dollar is the lowest since the 1980s. Source: Conotoxia MT5, GBP/USD, D1 Meanwhile, the Bank of Japan, although inflation remains above the 2% level, it seems  unlikely to decide to tighten monetary policy. As a result, the country may still remain in opposition to other developed economies, where an interest rate hike cycle is underway. This could continue to put pressure on the Japanese yen, which in turn could put pressure on Japanese politicians and policymakers, who may continue to debate possible market intervention. However, it is implied that only a change in the BoJ's approach could affect the yen more. When is the Fed's decision on rates? In summary, the Fed's decision will take place at 20:00 GMT+3 on September 21 (Wednesday), the Bank of Japan's on Thursday night, September 22 (the exact time is not scheduled), and the Bank of England's at 13:00 on the same day. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
Saxo Bank Podcast: Natural Gas On Colder Weather, Wheat And Coffee Under Pressure, JPY Weaker And More

The Net Short In Natural Gas Rose 22%, The Commodity Sector In General Traded Higher

Saxo Bank Saxo Bank 19.09.2022 13:24
Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to Tuesday, September 13. A week that ended with the US CPI surprise which helped trigger renewed stock market weakness and bond yield strength while the commodity sector in general traded higher led by industrial linked metals and the grains sector. Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to Tuesday, September 13. A week that ended with the US CPI surprise which helped trigger renewed stock market weakness and bond yield strength. The dollar traded softer led by gains in the euro and Swiss Franc while the commodity sector generally traded higher led by the industrial metal and grain sectors. Commodities The Bloomberg Commodity index traded up 2.2% during the reporting week to last Tuesday, September 13 with gains seen across all sectors with the exception of softs. The metal sector was particularly strong, especially those with an industrial link such as silver, platinum and copper. The energy sector was mixed while a US government report supported strong gains across the grains sector led by soybeans.  Responding to these predominantly positive price performances, speculators increased bullish bets in 15 out of the 24 major commodity futures tracked in this by 70k lots to a 1.08 million. The bulk of the change being driven by short covering (49k lots) as opposed to fresh longs (21k lots), reflecting a market that remains concerned about the global economic outlook and its impact on demand for key commodities. Energy Crude oil’s current rangebound behavior was reflected in the limited changes seen in the overall net long. A week of small gains helped lift the net long in WTI and Brent crude by 13.4k lots to 341.5k lots and within the narrow 328k to 345k range seen during the past four weeks. The three fuel product contracts saw light net selling while the net short in natural gas rose 22% to 60k lots. Metals The sector saw an unusual strong amount of switching from gold to metals with an industrial link. The gold position flipped back to a net short of 11.3k lots, just a few hundred lots above a 40-month low, with additional selling likely to have been triggered by the technical break below $1680 that followed a couple of days later. The near 9% rally in silver from a two-year low helped trigger a 70% reduction in the net short to 17.1k while the platinum net short was cut in half to 9.3k lots while speculators turned the least negative on copper in three months after cutting their short by 61% to 4.4k lots.      Agriculture: The latest supply and demand (WASDE) update on September 12 together with concerns about the Ukraine grain deal helped support another week of buying across the grains sector with the combine long rising 10% to 492k lots. Especially the steep drop in soybeans ending stocks forecast by the US Department of Agriculture helped drive strong gains and net buying across the three soy contracts of beans, oil and meal. Corn was bought for a seventh week while wheat traders, despite a 5.3% rally maintained a net short in CBOT following a small reduction in the net short of less than 5%.  Softs were mixed with the sugar long getting a 75% boost to 30.5k while the cocoa net short jumped to a 2 ½-year high at 36.4k lots, this despite having trading sideways for the past three months, most of the time between $2300 and $2400 per tons. Global growth concerns helped trigger a second week of long liquidation in both coffee and cotton.  Forex Speculators increased bullish dollar bets for a fourth week with the aggressive adding of fresh shorts in the yen (-22.5k) and sterling (-17.7k) being partly offset by significant and continued short-covering in the euro (+24.5k). Overall the dollar long against nine IMM currency futures and the Dollar index reached a six-week high at $21.3 billion.  During the last two reporting weeks which included the euro’s unsuccessful attempt to break lower through €0.99, the net short has seen a 75% reduction to a near three-month low at 11.8k on a combination of fresh longs and short positions being reduced.  A widening gap between FOMC and Bank of Japan policies helped weaken the Japanese yen by 1%, the result being a 39% increase in the net yen short to 80.7k lots, a 14-week high.  What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming Source: https://www.home.saxo/content/articles/commodities/cot-speculators-rotate-from-gold-to-industrial-metals-19092022
Bitcoin Has Fallen Past The $22k Level Which Is A Bearish Signal

The Cryptocurrency Mining Project Using Solar Energy, Bitcoin Is In The Down Trend

InstaForex Analysis InstaForex Analysis 19.09.2022 14:21
Crypto Industry News: Whyalla's "steel city" in South Australia has become home to a new cryptocurrency mining facility that will run on electricity generated from solar energy. The 5 megawatt facility operated by Lumos Digital Mining will mine Bitcoin, which is often blamed for its energy-intensive nature. Australian national radio ABC notes in the report that as the world tries to cut energy consumption, mining the largest cryptocurrency uses more energy than medium-sized countries like Argentina. Local authorities see the cryptocurrency mining project using solar energy as evidence that generating Bitcoin can be more environmentally friendly. Commenting on the project, Nick Champion, South Australia's Minister of State for Trade and Investments, explained: "This is important for decarbonising the Blockchain, which is a very energy intensive industry. I think this is the start of a new economy in Whyalla," he said. A government official also hopes that in the future, other data centers will mine cryptocurrencies using renewable energy. Technical Market Outlook: The recent low at the BTC/USD was made at the level of $18,239 as the market extends the sell-off. The levels of $18,665 and $18,940 will now act as the technical resistance for bulls. The weak and negative momentum supports the short-term bearish outlook towards the level of $17,600 again, however the market conditions remains extremely oversold, so the pull-back and resistance test is welcome. Weekly Pivot Points: WR3 - $21,295 WR2 - $20,039 WR1 - $19,341 Weekly Pivot - $18,764 WS1 - $18,064 WS2 - $17,526 WS3 - $16,271 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade     Relevance up to 13:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293277
German Export Weakness In The Fourth Quarter Suggests That Recession Fears Are Real

It Is Expected That The German Economy To Get Smaller Significantly

TeleTrade Comments TeleTrade Comments 19.09.2022 13:21
The Bundesbank said on Monday that it expects the German economy to shrink markedly in the autumn and winter months amid reduced or rationed energy consumption, as reported by Reuters. German central bank further noted that that the economy would still likely contract even if outright rationing was avoided.  Market reaction Markets remain risk-averse during the European trading hours on Monday with Germany's DAX 30 losing nearly 1% on the day. Meanwhile, EUR/USD was trading at 0.9980 at the time of writing, down 0.4% on a daily basis.
Kuroda Stayed On The Sidelines And The Yen Responded With Losses

Japanese Yen (JPY): Although Bank Of Japan Holds A Meeting, Inflation Rate Of 2.6% May Keep BoJ Away From Tightening

Kenny Fisher Kenny Fisher 19.09.2022 16:17
The Japanese yen is trading lower today. In the North American session, USD/JPY is trading at 143.52, up 0.44%. Japan’s Core CPI, a key inflation indicator, is expected to rise to 2.7% in August, up from 2.4% in July. Fed, BoJ to meet later this week Central banks will be in the spotlight this week, with the Federal Reserve meeting on Wednesday and the Bank of Japan on Thursday. The yen hasn’t posted a winning week since early August and fell to 144.99 earlier this month, its lowest level since 1998. The sharp depreciation of the yen promises to be high on the agenda at BoJ’s meeting. The yen has borne the brunt of the BoJ’s ultra-accommodative policy, which has kept a tight lid on Japanese government yields while US Treasuries are heading higher, thanks to the Fed’s continued tightening. This has left the yen at the mercy of the US/Japan rate differential, which continues to widen. The BoJ could provide relief to the yen by tightening policy, but Governor Kuroda has repeated that he will not tighten unless there is a clear indication that inflation is broad-based and sustained. With inflation at just 2.6%, the BoJ is in no hurry to tighten, unlike other major central banks, where soaring inflation is the number one priority. Read next: Because Of Interest Rate Decisions, This Week Major Forex Pairs As EUR/USD, US Dollar To Japanese Yen And GBP To USD May Be Rocking!| FXMAG.COM The BoJ and Japan’s Ministry of Finance have engaged in verbal rhetoric as the yen continues to slide, but without any action to back up their warnings, speculators continue to drive down the yen. After reports last week that the BoJ had conducted a rate check, speculation rose that Tokyo was considering a currency intervention, but such a drastic move still appears unlikely. The BoJ may use stronger language about its concern about the yen’s slide at this week’s meeting, but short of the Bank signalling a change in policy or hinting at intervention, the yen is unlikely to get any relief from the BoJ. USD/JPY Technical 1.4363 is the next line of resistance, followed by 144.81 USD/JPY has support at 142.56, followed by 141.88 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY pushes above 143, Core CPI next - MarketPulseMarketPulse
Credit Suisse case: Western Assets expects Swiss authorities to act if sentiment doesn't improve

Hold On Tight Swiss Franc (CHF) - Swiss National Bank Decides On Interest Rate This Week!

Kenny Fisher Kenny Fisher 19.09.2022 23:22
The Swiss franc has started the week in negative territory. In the North American session, USD/CHF is trading at 0.9674, up o.31%. Swiss National Bank to continue tightening The Times They Are a Changin. This is nowhere more apparent than in Switzerland, where the SNB is poised to end the negative rate era on Thursday. The safety of the Swiss franc has allowed the SNB to offer negative rates to investors, who were only too happy to park their funds during times of uncertainty, of which they have been plenty. While the Swissie’s value as a reliable safe haven asset hasn’t changed, what has changed is a world of low inflation, particularly after the Russian invasion of Ukraine. Switzerland’s inflation is running at an annual clip of 3.5%, for which many central bankers would give their right arm. Still, inflation is on the rise and has become enough of an issue for the SNB that in June, it raised rates by 0.50%, bringing the benchmark rate to -0.25%. At the time, inflation was at 3.4%, its highest level since 1993. The rate hike hasn’t lowered inflation, which rose to 3.5% in August. The SNB is expected to strike again, with the markets having fully priced in a 75bp increase at the Thursday meeting, with a possibility of a massive full-point hike. Barring a huge surprise, this marks the end of the negative rate era, and I would expect the Swissie to gain ground if the SNB raises rates by 0.75% or 1.00%. The Federal Reserve meets a day earlier, on September 21st, and is also expected to deliver a 0.75% rate increase, with an outside chance of a 1.00% hike. The US economy has been performing fairly well, allowing the Federal Reserve to continue tightening policy as it grapples with high inflation. USD/CHF Technical USD/CHF is testing resistance at 0.9720. Next, there is resistance at 0.9760 There is support at 0.9642 and 0.9524 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. SNB expected to deliver 0.75% hike - MarketPulseMarketPulse
Alphabet Reports Strong Q2 2023 Results with Growth in Advertising and Cloud Services - 24.07.2023

Australian Dollar (AUD) - Helpful Facts While Considering Possible Moves Of RBA

Kenny Fisher Kenny Fisher 19.09.2022 23:30
The Australian dollar has started the week with considerable losses. In the North American session, AUD/USD is trading at 0.6694, down 0.40%. Will minutes shed light on RBA’s plans? It’s a light calendar this week for Australian releases. One of the highlights is the Reserve Bank of Australia’s minutes of the September meeting, which will be released on Tuesday. At the meeting, the RBA hiked rates by 0.50% for a fourth straight time, bringing the cash rate to 2.35%. RBA Governor Lowe has made it quite clear that additional rate hikes are coming, and last week he told a parliamentary committee that the 2.35% rate “is still too low”. At the same time, Lowe has signalled that he plans to slow the pace of tightening.  Lowe could decide to lower rates to 0.25% as soon as the October 6th meeting, but that is by no means certain, given that inflation rose to 6.1% in the second quarter, up from 5.1% in Q1. Inflation is the RBA’s number one priority, and Lowe may not want to ease up on rates until there are clear signs that inflation has peaked. The RBA is also concerned about inflation expectations, and there was good news last week as inflation expectations slowed to 5.4% in August, which was a third successive decline. This week sees several major banks holding rate meetings, highlighted by the Federal Reserve meeting on September 21st. The Fed has relied on a strong labour market to continue tightening at a steep pace as it grapples with high inflation. In August, inflation dipped for a second straight month, but the 8.3% reading was higher than the consensus. Inflation is proving to be more persistent than expected, which means that the Fed will have to remain more hawkish than the markets had anticipated. This sentiment has sent the US dollar higher. The markets have priced in a 0.75% hike at the upcoming meeting, with an outside chance of a massive 1.00% increase. With the Fed remaining in hawkish mode, the short-term outlook for the US dollar appears bright. AUD/USD Technical AUD/USD has support at 0.6623 and 0.6523 There is resistance at 0.6769 and 0.6869 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar falls, RBA minutes loom - MarketPulseMarketPulse
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

The Market Generally Expects the AUD/USD Pair To Rise

InstaForex Analysis InstaForex Analysis 20.09.2022 08:01
Yesterday the Australian dollar worked out the support of 0.6686 with the lower shadow of the daily candle, but the general market's stability in the process of waiting for the Federal Reserve's decision on monetary policy on Wednesday kept the price in the accumulation range of 1.6686-0.6755. At the moment, the price is decreasing, as the market generally expects an increase in the rate by 0.75%. After the support at 0.6686 is overcome, the 0.6640 target will open, the 0.6565 target level is even lower. The Marlin Oscillator is going down in its own descending channel. On the H4 chart, the price reflects down from the MACD line for the second time. This time the reversal is supported by the reversal of the Marlin Oscillator from the zero line. The downward movement is gaining momentum. Relevance up to 04:00 2022-09-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322090
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

How Can The Pound To The US Dollar Pair Look Like Today?

InstaForex Analysis InstaForex Analysis 20.09.2022 08:11
As on Friday, the British pound pierced the support at 1.1385 with its lower shadow, but closed the day with a white candle. Conceptually, this can be explained by market consolidation ahead of tomorrow's extended Federal Reserve meeting on monetary policy. The market is waiting for a rate hike of 0.75%, after which the pound may fall to the target support of 1.1305, and then to 1.1250. Price convergence with the Marlin Oscillator is starting to form on the daily chart. And this situation has three options for development: continuation of corrective growth with a subsequent reversal into a medium-term decline, the formation of convergence at a lower level, since the current convergence has a steep rise, a decisive breakdown of convergence with a strong price decline. We are setting ourselves up for the development of one of the two bearish scenarios and are waiting for the Fed's decision on monetary policy. The price is below the indicator lines on a four-hour scale, the Marlin Oscillator is in the negative area. The price has a small space to wander to the MACD line or even above it, to the resistance level of 1.1525, but today there are no important economic indicators, so we expect strong movements tomorrow. Of course, the price does not have to fill this free space as a false move, the price can immediately fall when the Fed announces its vision of monetary policy.   Relevance up to 04:00 2022-09-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322092
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Situation Is Conducive To The Further Growth Of The Euro

InstaForex Analysis InstaForex Analysis 20.09.2022 08:20
The euro rose slightly on Monday, supporting the strong resistance of the target level of 1.0032 and the MACD indicator line coinciding with it. This morning the resistance was pierced, but it is unlikely that speculators will decide to develop the movement before tomorrow's Federal Reserve meeting. But the Fed meeting should be "soft" so that the counter-dollar market shifts to growth, and we do not expect a soft meeting, since the rate will be raised by 0.75%, according to the FOMC members themselves, and the committee's forecasts on inflation and future rates in light of the current situation is unlikely to be weak. We are waiting for the price to reverse from the achieved resistance to the nearest support at 0.9950. Next, we are waiting for the price to decline to the support of 0.9850. The Marlin Oscillator has penetrated into the growth zone, but this movement seems to be false so far. The price is trying to consolidate above 1.0032 on the four-hour chart, the Marlin Oscillator is in the positive area. Formally, the technical situation favors the euro's further growth, but before the Fed meeting, we will refrain from both buying and premature selling.   Relevance up to 04:00 2022-09-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322094
EUR/USD Pair Has Potential For The Downside Movement Today

Can The Euro To The US Dollar (EUR/USD) Pair Continue Trading Unchanged?

InstaForex Analysis InstaForex Analysis 20.09.2022 08:24
EUR/USD 5M The EUR/USD pair continued to trade in a flat on Monday, which began last week. At this time, the pair is located between the levels of 0.9945 and 1.0019, but if desired, the horizontal channel can be expanded to the boundaries of 0.9877 and 1.0072. The essence of this does not change, we have a flat and everything that follows from it. There was not a single significant report or fundamental event in the European Union and the United States on Monday. Therefore, the flat is even logical to some extent. However, let us recall that the pair has been in one or another horizontal channel for more than a month, each of which is located near the pair's 20-year lows. Therefore, it seems that the market is just waiting for the right moment to resume the downward movement, because this does not look like the end of the trend. In flat conditions, it is best to trade on a rebound from any of the boundaries of any channel or not trade at all, waiting for the resumption of the trend movement. There were no trading signals on Monday. The pair approached the extreme level of 1.0019 only by the end of the day, but this signal, whatever it was, was formed very late, so it was not worth working out. According to our recommendations, no deals should have been opened on Monday. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not give any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 20. No news, markets are waiting for the Fed meeting. Overview of the GBP/USD pair. September 20. The British pound is unwilling to react to a future rate hike by the Bank of England. Forecast and trading signals for GBP/USD on September 20. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The outlook for the bears remains very good on the hourly timeframe, despite the flat. They manage to stay near 20-year lows for a long time, not allowing the pair to even correct. The fact that the European Central Bank raised the key rate for the second time, as we see, did not have any positive effect on the euro. Thus, we are waiting for the resumption of falling quotes. And at the same time the results of the Federal Reserve meeting. We highlight the following levels for trading on Tuesday - 0.9877, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (1.0031) and Kijun-sen lines(1.0065). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. There will be no interesting events in America, and the speech of ECB President Christine Lagarde will take place in the European Union. It can be quite interesting, but it's what Lagarde has to say that matters, not the actual speech itself. Therefore, the market's reaction will depend on whether Lagarde will report anything important. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-09-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322082
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

Will The GBP/USD Currency Pair Improve Its Moves Today?

InstaForex Analysis InstaForex Analysis 20.09.2022 08:28
GBP/USD 5M The GBP/USD currency pair did not move as well on Monday as it did on previous days and for once did not renew its 37-year lows. Remember, we said that these lows will be updated more than once? At the moment, the "bottom" is the level of 1.1354, but the pair cannot move at least 300-400 points even from it. Two meetings of central banks will take place this week, which, of course, will leave a mark on the charts of currency pairs in which there is a pound and a dollar. However, will this help the British pound or is it in for a new collapse? There were no macroeconomic statistics or "foundations" either in America or Great Britain on Monday. However, even in this scenario, the bears almost managed to overcome the level of 1.1354. The pound's positions remain very weak, one can hope for the Bank of England and a rate hike, but... In regards to Monday's trading signals, it was rather scarce. The first sell signal was formed at night, when the price overcame the level of 1.1411. At the opening of the European trading session, the pair moved away from the point where the signal was formed by only a few points, so a position could be opened. As of Monday, there was no level below the level of 1.1411, so the position should have been closed manually right away. Or near the previous day's low. It was quite possible to earn about 30 points on it. The next signal was formed on a new bounce from the 1.1411 level, but this signal was rather late and should have been ignored. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group closed 11,600 long positions and opened 6,000 shorts. Thus, the net position of non-commercial traders decreased by another 17,600, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new fall, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its decline has completely resumed and multi-year lows are updated almost every day, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 109,000 shorts and 41,000 longs open. The difference is again almost threefold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, one should not forget about the high demand for the US dollar, which also plays a role in the fall of the pound/dollar pair. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 20. No news, markets are waiting for the Fed meeting. Overview of the GBP/USD pair. September 20. The British pound is unwilling to react to a future rate hike by the Bank of England. Forecast and trading signals for EUR/USD on September 20. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H On the hourly timeframe, the pound/dollar pair was in a downward movement all last week, and now it maintains this trend. A new local low at 1.1354, and the price is very close to it, so now there is no question of even a correction. Of course, this week the situation may be greatly aggravated or turned upside down, but it will not be possible to judge this until Friday. We highlight the following important levels on September 20: 1.1354, 1.1442, 1.1649, 1.1760, 1.1874. The Senkou Span B (1.1569) and Kijun-sen (1.1543) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. There will be no interesting events in either the UK or the US on Tuesday. However, we remind you that this week there will be meetings of the Bank of England and the Federal Reserve, so volatility is unlikely to be low these days. Monday was rather weak, but already Tuesday could be much more volatile. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-09-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322084
The Upside Of The EUR/USD Pair Remains Limited

The Euro To The US Dollar Pair Has Potential For Growth

InstaForex Analysis InstaForex Analysis 20.09.2022 08:34
Technical outlook: EURUSD rose through 1.0050 intraday on Tuesday before pulling back. The single currency pair is seen to be trading close to the 1.0020 mark at this point in writing and is projected to resume higher towards 1.0450 and the 1.0750-1.0800 area in the near term. A drop below the 0.9950 potential support will drag prices lower to test 0.9860. EURUSD is carving lower-degree waves within a narrow range between 0.9950 and 1.0040-50 for a few trading sessions. A fundamental catalyst will be released tomorrow before prices break out toward the direction of trade. A consistent push above the 1.0050-60 mark will accelerate a climb towards 1.0750 to complete the counter-trend rally. EURUSD might have already carved a lower-degree upswing between 0.9860 and 1.0198 as discussed earlier. Furthermore, the above move has been retraced close to the 0.9940-50 area which is the Fibonacci 0.786 level. A high probability remains for a bullish reversal towards 1.0750 at least, until prices stay above the 0.9860 interim support. Trading plan: Potential rally towards 1.0750 against 0.9800 Good luck!     Relevance up to 07:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293355
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

In The Short Term, The EUR/JPY Pair Need A Break Below The Minor Support

InstaForex Analysis InstaForex Analysis 20.09.2022 08:40
We continue to look for wave C/ lower towards 131.69 to complete the correction that began in early June. In the short term, we need a break below the minor support at 142.27 to confirm the next push lower towards the support at 138.21 on the way towards our long-term corrective target seen at 131.69. Only an unexpected break above resistance at 145.43 could extend wave B/ higher towards 148.34, but it will not alter our view that this only is a corrective rally in wave B/.   Relevance up to 07:00 2022-09-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293357
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

The Pound To The Japanese Yen (GBP/JPY) Pair Is In Upward Trend

InstaForex Analysis InstaForex Analysis 20.09.2022 08:46
We continue to look for wave C lower towards 154.41 and possibly even closer to the 50% corrective target seen at 150.09 before the ongoing correction from late April finally comes to an end for the next impulsive rally towards 175.27. Short-term only a break above resistance at 167.94 will indicate that the correction was completed early and the expected rally to 175.27 already is in progress Relevance up to 07:00 2022-09-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293359
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

The Bloomberg Grains Index Continues Its Steady Growth, The Lithium Price Hits Record

Saxo Bank Saxo Bank 20.09.2022 09:01
Summary:  Equity markets consolidated some of the recent losses yesterday as traders mull a cavalcade of central bank meetings this week, topped by the FOMC meeting tomorrow. The market has been burned in its attempts at pricing “peak Fed” in recent months and now Fed rate expectations are running steadily higher into tomorrow’s meeting. Can the Fed deliver on the hawkish side of a market that has finally begun to respect what this Fed is all about?   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Yesterday US equities touched new lows intraday for the cycle lower that started on 17 August, but despite weak sentiment and downward momentum the market turned around rallying into gains. S&P 500 futures rallied 1.9% from its lows to the close and the positive momentum is continuing this morning with the index futures trading around the 3,929 level. The US 10-year yield is still sitting just below 3.5% and any meaningful push above the 3.5% level will likely renew the headwinds for equities. The rally in US equities was driven by no news so the setup feels almost like the rally ahead of the Jackson Hole event and the recent US CPI report. The market wants good news and a positive surprise, but the question is whether the FOMC will deliver that tomorrow. We doubt it believing the Fed will rather fail being too hawkish than being too dovish. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong equities rallied, with Hang Seng Index rising 1.3% and Hang Seng Tech Index (HSTECH.I) climbing 2.3%. Alibaba (09988:xhkg), Meituan (03690:xhkg), JD.COM (09618:xhkg), and Netease (09999:xhkg) surged 3% to 4%. EV stocks rebounded, with XPeng (09868:xhkg) soaring nearly 9%, NIO (09866:xhkg), and Li Auto (02015:xhkg) rising nearly 6%. Macao casino stocks were among the outperformers, rising from 3% to 6% across the board. CSI300 Index was little changed, with solar power, energy storage, and auto outperforming. Major Chinese banks fixed their 1-year and 5-year Loan Prime Rates unchanged this morning. USD traders mull FOMC meeting this Wednesday The US dollar slightly on its backfoot yesterday and overnight as EURUSD criss-crosses parity and USDJPY is locked in a tight range ahead of tomorrow’s FOMC meeting. The degree to which the Fed is able to surprise the market on the hawkish side and trigger another rise in US treasury yields (possibly it as important to see longer US yields rising, not just an adjustment at the front-end of the US yield curve to absorb,  for example, a higher than expected Fed “dot plot” forecast for next year) will determine whether the US dollar is set for another significant surge to cycle highs in the wake of the meeting. AUDNZD breaks higher through major level Despite a nominally dovish set of RBA minutes overnight, AUDNZD leaped to a new six-year high overnight, clearing the 1.1300 level. The diverging current account developments in recent quarters are likely a key driver as Australia features a formidable commodity portfolio and has become a current account surplus nation at a time when New Zealand’s reliance on energy imports has taken a toll on its trade balance, which has gone into a steep deficit. The next focus is perhaps 1.1430, the high from 2015 and highest since AUDNZD traded in a range north of 1.2500 for much of the 2008-2012 time frame. Gold (XAUUSD) Gold putting in a higher low compared with Friday was the takeaway from Monday’s price action. The yellow metal has settled into a 20-dollar range near a two-year low ahead of Wednesday’s FOMC meeting and while the risk of a 1% hike cannot be ruled out, the market seems the be settling for another 75 bp hike, a development that may ease some of the recent selling pressure which has seen speculators flip their positions back to a net short, a relatively rare occurrence. Today’s price action is likely to be just noise ahead of Wednesday with algo-driven strategies likely to be in the driving seat, given the dollar and yield movements the overall say on the direction. Below $1854, last week's low in gold, the market may target the 50% retracement of the 2018 to 2020 rally at $1618. Crude oil (CLV2 & LCOX2) The best that can be said about Monday’s price action in energy is that traders don’t currently know which leg to stand on, a situation made worse by thin liquidity. With another interest rate hike looming and with global growth slowing there are good reasons to call for lower prices. Lower prices were also sought in response to news China may grant export permissions for excess fuel supplies, and the US announcing it will offer an additional 10 million barrels from its strategic reserves. Against these a softer dollar and recovering equity markets and continued worries about Russian supply once the EU embargo begins in early December helped sent Brent and WTI back in black following a near seven-dollar round trip. More of the same can be expected until a clearer picture emerges. US Treasuries (TLT, IEF) US treasury yields continue to trade near the peak of the cycle as the market wonders whether the 10-year can explore new territory for the cycle above 3.50% the cycle high from back in June, as well as whether any adjustment higher in Fed rate hike expectations will be entirely felt at the front end of the yield curve, as the inversion has fallen close to the cycle extreme near –0.50% for the 2-10 yield spread as the 2-year rate pushed close to 4.00%. What is going on? The euro area looks set to enter a recession According to Bloomberg, economists see an 80 % chance of a recession in the euro area in the next twelve months. This now looks inevitable. Last week, Barclays downgraded its 2023 growth forecast for France to minus 0.7 %. The Bank of France also published its three main scenarios for the French economy for next year. A recession is one of them (expected drop in GDP of minus 0.5 %). This is not its baseline, though. The length and amplitude of the recession in the eurozone will highly depend on the evolution of the energy crisis and on the risk of energy rationing. This is a bit too early to know exactly how much GDP will drop next year. Economists also expect that the European Central Bank (ECB) will continue to tighten monetary conditions (financial conditions are still loose in the euro area based on the latest credit growth data). More than half consider a second 75 basis-point rate hike is likely in October. This is only the beginning. It is likely the ECB will continue until early next year (when the recession might be officially announced). Covid vaccine related stocks tumble on Biden declaring pandemic over Shares in Moderna and BioNTech fell 7% and 9% respectively as the Biden administration declared the pandemic for over. The designation follows other countries and will lower the alertness among health care regulators and likely lower the demand for Covid vaccines as only the very high-risk people in the population will get a vaccine and booster shoots. This is worse than expected news for Covid vaccine manufacturers such as Moderna and BioNTech that are now forced to expand their product portfolio to offset this weakness. US NAHB declines for ninth month in a row NAHB Housing Market Index reported its ninth consecutive decline to 46.0, beneath the prior 49.0 and expected 47.0. Save for two panicky months during the early 2020 pandemic break-out, this is the lowest levels cine 2014, but for perspective, the indicator was sub-20 for most of 2008 through 2011. The weaker-than-expected data highlighted the pessimism hitting the US housing market due to the rising mortgage rates, and housing starts may be set to cool further in the coming months. Japan CPI hits a 31-year high Japan’s August CPI touched the dreaded 3% YoY mark from 2.6% previously, coming in at the strongest levels in over three decades and significantly above the Bank of Japan’s 2% target level. The core measure, which excludes fresh food and energy, also come in higher-than-expected at 1.6% YoY. With wage growth remaining restrained, this may mean nothing for Bank of Japan, which remains committed to maintaining its yield curve control policy. However, the markets may start to test the BoJ’s resolve once again, especially with US 10-year yields also touching 3.5% overnight while JGB yields remain capped by BoJ YCC policy at 0.25%. Grains trade mixed but remains in an uptrend The Bloomberg Grains Index continues its steady ascent after hitting a low point two months ago with global weather concerns, dwindling stockpiles and uncertainty about the Ukraine grain deal being the focus. Chicago wheat nevertheless fell on Monday on an expected increase in Russia’s crop that will compete with US exports already challenged by a strong dollar. Soybeans was supported by Chinese export demand while corn traded sideways but finding support at its 21-day moving average. Lithium prices and stocks back at records Lithium equities are back in focus as the lithium price hits a fresh record after tripling in the past year fuelled by electric vehicle demand. Recently the IEA forecast lithium demand to accelerate more than 40 times over the next two decades. The lithium carbonate price has also had an extraordinary run, up 1,000% from its covid low as supply remains a concern. Shares in Albemarle Corp (ALB:xnys), the world’s biggest lithium company and its neighbour Livent (LTHM:xnys), as well as SQM (SQM:xnys), the world’s second biggest lithium producer are on watch with their shares trading near their peaks. US President Biden wows support for Taiwan When being asked in a CBS 60 Minutes interview whether the U.S. would send forces to defend Taiwan in case of military actions from mainland China, President Biden replied: “Yes, if in fact, there was an unprecedented attack.” In answering a follow-up question about if the U.S, unlike in Ukraine, would send forces men and women to defend Taiwan, Biden said: “Yes”. China’s Emerging Industries PMI slightly improved Emerging Industries PMI (EPMI) in China climbed slightly to 48.8 in September from 48.5 in August. The modest improvement was below market expectations and the 48.8 print was the lowest September figure (EMPI is not seasonally adjusted) since 2014 when the survey first started, suggesting weak growth momentum. What are we watching next? Sweden’s Riksbank set for largest hike in decades today The market is divided on whether the Riksbank hikes 75 basis points or a full 100 basis points, either of which would be the largest hike in nearly 30 years. One factor possibly tilting the odds in favour of a larger move is the exchange rate, as EURSEK trades near the range high of 10.90 since 2020, and USDSEK is less than three percent from its all-time high, which was just above 11.00 back in 2001. SEK is traditionally very sensitive to risk sentiment, so a larger hike may only impress beyond a knee-jerk reaction if broader sentiment and the outlook for Europe improves. FOMC meeting tomorrow Many headlines discuss whether the Fed is set to hike 75 or 100 basis points tomorrow. The Fed generally doesn’t like to surprise markets too much, so arguably it is safe in “only” hiking another 75 basis points as the 100-basis point odds are priced rather low. The more likely hawkish surprise scenario is one in which the Fed sets the “dot plot” of Fed policy forecasts for 2023 higher than the market currently expects – possibly as high as 5.00% for the median expectation. Another item to watch is the Fed’s forecast of PCE inflation for 2023 and 2024, together with where it places the first forecasts for inflation in its first set of forecasts for 2025. Earnings calendar this week This week our earnings focus is on Lennar on Wednesday as US homebuilders are facing multiple headwinds from still elevated materials prices and rapidly rising interest rates impacting forward demand. Later during this week, we will watch Carnival earnings as forward outlook on cruise demand is a good indicator of the impact on consumption from tighter financial conditions. Today: Haleon Wednesday: Lennar, Trip.com, General Mills Thursday: Costco Wholesale, Accenture, FactSet Research Systems, Darden Restaurants Friday: Carnival Economic calendar highlights for today (times GMT) 0730 – Sweden Riksbank Interest Rate Announcement 0800 – ECB's Muller to speak 1230 – Canada Aug. Teranet/National Bank Home Price Index 1230 – US Aug. Housing Starts & Building Permits 1230 – Canada Aug. CPI 1700 – ECB President Lagarde to speak 2030 – API's Weekly Crude and Fuel Stock Report Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-20-2022-20092022
The release of Chinese GDP, Bank of Canada interest rate decision and more - InstaForex talks the following week (part I)

Increasing Tensions Between The US And China over Taiwan

TeleTrade Comments TeleTrade Comments 20.09.2022 09:09
China's Foreign Minister Wang Yi urges to deal with the Taiwan issue properly, Reuters reported on Tuesday. Last week, Wang said that Japan must not 'obscure' its stance on the Taiwan issue. The tension between US and China over Taiwan escalated this week after American President Joe Biden that the “US military would defend Taiwan in the event of an invasion by China.” Market reaction The aussie remains undermined by the renewed US dollar buying and looming US-China woes. The spot is currently trading at 0.6719, down 0.10% on the day.
According To Dmitry Medvedev, Cryptocurrencies Will Gain In Importance

Ethereum Is In Upward Trend And Is Still In Bullish Mood

InstaForex Analysis InstaForex Analysis 20.09.2022 09:38
Technical outlook: Ethereum climbed through $1,392 during the New York session on Monday before pulling back. The crypto is seen to be trading close to $1,365 at this point in writing and is projected to target up to the $1,800 initial resistance in the near term. Ideally, prices should stay above the $1,279 interim lows to keep the near-term bullish structure intact. Ethereum has bounced off the Fibonacci 0.618 retracement of the larger-degree upswing/rally between $800 and $2,031 as seen on the 4H chart here. Furthermore, it is also the past resistance-turned-support zone around the $1,270-80 mark that has provided the bounce. The bulls seem to be under control for now and are targeting at least $1,800 to go past initial resistance. Ethereum's drop between $2,031 and $1,279 has been in three waves and hence corrective. A continued rally from here towards the $1,790-1,800 levels will confirm that the bulls are poised to push above $2,031 before giving in to the bears again. Only a sustained break below $1,250 will delay matters and might bring back the bears to the market. Trading plan: Potential rally towards $1,800 against $1,279 Good luck! Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 07:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293361
Gold Has A Chance For The Rejection Of The Support

Gold Has The Potential For Further Downside Movement

InstaForex Analysis InstaForex Analysis 20.09.2022 10:00
Technical analysis: Gold has been trading sideways at the price of $1.673 in the mini channel (potential bear flag pattern), which is sign that we might see further downside continuation. Trading recommendation: Due to the channeling mode in the downside trend, I see potetnial for the further downside movement. Watch for the potential selling opportunities in the case of the breakout of the mini channel. Downside objectives are set at the price of $1.654 and $1.576 Stochastic oscillator is showing fresh downside cross from the overbought zone, which is good sign for further downside continuation. Key resistance is set at the price of $1.680-$1.690 Relevance up to 08:00 2022-09-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293381
Saxo Bank Podcast: Riksbank's Expected 75 Basis Point Hike Today

Forex: Swedish Krona (SEK) - Riksbank May Hike The Rate Even By 100bp! What Can We Expect From GBP/USD And EUR/GBP?

ING Economics ING Economics 20.09.2022 10:46
The Swedish Riksbank today kicks off a busy week of central bank policy meetings, which should see chunky 75bp hikes in many countries. Central bankers pressing more firmly on the monetary brakes will only invert yield curves further, provide greater headwinds to risk assets and keep the dollar bid near the highs USD: Busy week for central bankers should keep the dollar bid It is a really busy week for central bankers, with policy meetings occurring in the US, UK, Japan, Switzerland, Sweden, Norway, Brazil, the Philippines, Taiwan and Indonesia to name but a few. Rate hikes are expected in all but Brazil (rates are already at 13.75%) and Japan. As usual, most attention will be given to Wednesday evening's FOMC announcement. There are many moving parts to this meeting, including the size of the hike, the Fed statement, new forecasts, and the press conference. Please see our detailed FOMC preview here. There seems no reason for the Fed to soften the hawkishness shown at the recent Jackson Hole symposium and a 75bp 'hawkish hike' should keep the dollar near its highs of the year. We also again take note of the extreme (near 50bp) inversion in the US 2-10 Treasury curve. With short-end yields expected to stay supported near 4%, the risks are that US 10-year Treasury yields push on to 3.75%. Typically that would be expected to drag USD/JPY back to the 145 area, where Japanese authorities have their finger on the FX intervention trigger. The prospect of Japanese intervention should keep USD/JPY implied volatility supported in spite of its recent dip. One final point here. Tighter monetary policy around the world will increase the headwinds for risk assets - after all, central bankers are deliberately trying to slow aggregate demand. This should again play into the hands of the anti-cyclical dollar and one which now pays over 3% p.a. on a one-month deposit. Expect a quiet, pre-FOMC session today, where softer housing starts or building permits August data look unlikely to impact market pricing of the Fed tightening cycle - currently pencilling in a peak near 4.50% next spring. DXY should stay bid in a 109.50/110.00 range. Chris Turner EUR: Will the eurozone current account fall back into deficit again? EUR/USD continues to consolidate near parity, while the European Central Bank's trade-weighted euro index is about 1.8% off the lows seen in late August. A lot of the move in the trade-weighted euro will be a function of weaker sterling. But at the very least, the ECB will be pleased that its hawkish overture has put a brake on euro losses. For today's session, the only eurozone data of note will be the July current account data. The balance may well dip back into a monthly deficit on the weak German data and will prove a reminder that the energy crisis has wiped out the eurozone's traditionally large current account surplus.  In Europe, this week will all be about rate meetings outside of the eurozone. Today's session should see Sweden's Riksbank hike rates at least 75bp, if not 100bp. There may also be some focus on what the Riksbank plans to do with its much-criticised FX reserve accumulation plan, which currently sees the Riksbank buying around SEK12bn of FX each month. We think it unlikely, but any surprise slowing in the FX-buying amounts could see EUR/SEK dip a little. Otherwise, a difficult external environment can continue to see EUR/SEK trading near 10.80/85. Chris Turner GBP: A big week for UK's monetary and fiscal mix UK institutions today reopen for business after respecting a period of mourning for the late Queen Elizabeth. It is going to be a busy week for both monetary and fiscal policy. On the former, we look for another 50bp hike from the Bank of England on Thursday. And Friday should see a mini-budget from the new UK chancellor, Kwasi Kwarteng. He has already positioned himself as going for growth and the mini-budget should provide details on the £100bn+ energy support package plus another £30bn+ of tax cuts.  Normally loose fiscal and tight monetary policy would be good for the pound. However, it seems that foreign investors are concerned as to how government support will be financed - with the fear that this will largely come through an additional supply of UK Gilts. Unnerving was also the removal by Chancellor Kwarteng of permanent Treasury Secretary Tom Scholar, which raised doubts about policy orthodoxy. A difficult external environment and concerns as to how a government spending spree will be financed leave sterling vulnerable. Cable can easily sink back to 1.1350 and should remain offered this month, while the former resistance level of 0.8720 should now prove support to EUR/GBP as it edges up to 0.8800. Chris Turner CEE: EC decides on Hungary rule of law probe Another busy week in Central and Eastern Europe lies ahead of us, full of Polish numbers. Today, we will see industrial production, PPI and the labour market data for August. Our Warsaw team expects a slight acceleration of industrial production in the year-on-year number in line with expectations amid the less negative impact of the number of working days. The labour market data should show faster employment growth but a slowdown in wage growth, which was boosted in July by a one-off offset from higher inflation in some sectors. Polish retail data will be released tomorrow and Hungarian and Polish unemployment numbers on Thursday and Friday. The number one topic will continue to be the negotiations between the Hungarian government and the European Commission. On Sunday, the EU proposed suspending EUR7.5bn from its budget earmarked for Hungary over accusations of corruption and fraud. For this week, several speeches from Hungarian officials are on the calendar and a key decision from the European Commission should come on Thursday. Of course, we cannot expect the end of the story, but rather a move to the next stage. In the Czech Republic, the blackout period ahead of the September Czech National Bank meeting will start on Thursday and we could hear from MPC members before then, but indications so far suggest that nothing has changed on the dovish approach and rates can be expected to remain unchanged. In the FX market, the situation has not changed much over the past week. The main driver remains gas prices and in the case of the forint, the EU story adds to this and will set the direction, especially this week. However, the fall in gas prices over the last three days should provide favourable conditions for the CEE region. And if the trend in gas prices continues, we could see new gains for the Polish zloty below 4.70 EUR/PLN and Czech koruna below 24.50 EUR/CZK this week. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
In China coronavirus cases exceeded this Spring's levels what could lead to declines of local stocks on Tuesday. In the USA US100 and S&P 500 gained ca. 0.5%.

Ray Dalio's Perspective On The Economic Situation And The Fed's Future Actions

InstaForex Analysis InstaForex Analysis 20.09.2022 11:53
Billionaire Ray Dalio, founder of Bridgewater Associates, says that as the Federal Reserve continues to aggressively tighten monetary policy, interest rates will need to rise to at least 4.5%, which will send stocks down 20%. To arrive at a 4.5% interest rate result, Dalio considered inflation and real yields. "The process starts with inflation. Then it goes to interest rates, then to other markets, and then to the economy," he explained. His view of the US markets and economy is rather bleak. He says that, right now, markets are discounting inflation over the next ten years at 2.6%. He estimates that in the long run it will be between 4.5% and 5%, except for force majeure, such as the escalation of economic wars in Europe and Asia, or more droughts and floods, Dalio said, describing his estimates of inflation. Given this and real yields, Dalio sees rates between 4.5% and 6%. "The higher end of this range would be intolerably bad for debtors, markets, and the economy, I'm guesstimating that the Fed will be easier than that," he said. The Fed funds rate is currently in the 2.25%–2.5% range. And this week, the markets are already pricing in a third consecutive 75 basis point rise, which will occur on Wednesday. Dalio forecasts that the Fed will reach 4.5%, which will have serious consequences for the stock market and the economy. Adding that an increase in interest rates would have two types of negative effects on asset prices: 1) the present value discount rate and 2) lower asset returns due to a weaker economy. When people lose money, they become cautious, and lenders are also more cautious in lending to them, so they spend less. A significant economic downturn is expected to be needed, but this will take some time because wealth levels are relatively high right now, so it can be used to support spending until the funds are used up.   Relevance up to 09:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322132
A Bright Spot Amidst Economic Challenges

The Situation Of Stock Exchange Are Related To The Cycle Of Rate Hikes

InstaForex Analysis InstaForex Analysis 20.09.2022 11:59
Market volatility remains high ahead of tomorrow's Fed meeting, which may result in another aggressive increase in interest rates. Interestingly, earlier opinions are different from the current ones as many expected a 0.75% rate hike following the July meeting. Now, there is a chance of an even greater increase, by 1.00%, which made investors realize that the central bank will not go along with the market, but will implement anti-inflation measures as long as the state of the economy allows it. However, a continued sharp increase in rates will quickly put pressure on price growth, which, according to the Fed, should reset the economy after its noticeable, but at the same time rapid slowdown. Nevertheless, investors believe that after another strong rise in rates, Fed Chairman Jerome Powell will make it clear whether or not the cycle of rate hikes is ending. If he says that it will begin to ease, stocks will rally, while dollar will weaken. If he says that it will continue, the fall of stock indices will resume, and dollar will again be in demand. In terms of the forex market, activity will remain low for now, and currency pairs where dollar is present will move sideways. Forecasts for today: XAU/USD Gold is consolidating below 1672.25. If the scenario described above happens, the price may rise to 1691.50. WTI Oil is trading below 86.15. The weakening of dollar could lead to a price increase to 90.00.   Relevance up to 07:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322100
The Commodities Feed: China's 2023 growth target underwhelms markets

Will Bank Of Japan Remain Committed To Its Easy Policy?

Saxo Bank Saxo Bank 20.09.2022 12:11
Summary:  More trouble may be brewing for the Japanese yen if the Fed stays hawkish this week. But a Bank of Japan pivot is still unlikely as wage inflation remains muted. The only other way for the Japanese authorities to defend the yen would be a direct intervention. However, a coordinated intervention remains unlikely and a unilateral intervention rarely has a long-lasting impact. We discuss how one could ride this in the direction of possible intervention, or on the reverse. While the key focus is on the FOMC meeting this week, let’s not forget that we also have other global central banks racing to tighten policy to get the inflation runaway train under control. Still, the Bank of Japan continues to buck the global trend, remaining committed to its yield curve control policy and keeping the 10-year yields capped at 0.25%. This has meant a widening divergence to US yields, where the 10-year has reached 11-year highs at 3.50%. This has weighed on the Japanese yen, which is now close to its 24-year lows. A hawkish FOMC this week could further push up US yields, and in turn cause more pain for the yen. The weakness in the yen is starting to hurt consumer and businesses, even as inflation in Japan remains very low compared to elsewhere. Japan’s August CPI touched the 3% mark, much higher than the BOJ’s 2% target. However, the Bank of Japan remains committed to achieving wage inflation, and is unlikely to remove accommodation just yet. The most hawkish signal we could get from the BOJ this week could be removing the dovish guidance. One of the key statements from their last meeting that we will be watching is: “[The Bank] will not hesitate to take additional easing measures if necessary; it also expects short- and long-term policy interest rates to remain at their present or lower levels.” But if we assume that the BOJ will not be ready to make any changes to their monetary policy stance or communication, there is further room for weakness in the yen. This is still possible, especially with the Fed nearing “peak hawkishness” and markets pricing in terminal rate close to 4.5%. Once the US yields peak and the US dollar tops out, pressure on the yen will ease. A sustained reversal in the Japanese yen will have to wait for a significant deterioration in the US economy, if Bank of Japan remains committed to its easy policy. But that’s unlikely to happen just yet, suggesting some more room for a weaker yen. And that will increase the possibility of intervention by the Japanese authorities. With verbal intervention to defend the yen having minimal impact, the BOJ reportedly conducted a foreign exchange check last week. This move usually involves the central bank “inquiring about trends in the foreign exchange market” and is usually seen as a precursor for a formal intervention. While direct intervention is becoming more likely, it is unlikely to be effective if done unilaterally. Direct interventions are only effective if they are done as a coordinated effort with other countries. At this juncture, when all global central banks are fighting to bring inflation under control and protect their currencies from the wrath of the US dollar, it is unlikely they would agree to an intervention to support the yen, which would in turn weaken their own currencies. That brings us two options to ride a unilateral intervention, if one was to happen: Ride the direction of the intervention, which would mean taking a position expecting the yen to strengthen. (See charts 1 and 2 below)   Ride the reversal of the intervention, which would mean entering a position just after the intervention announcement (See chart 3 below). Usually, a large chunk of the move will happen in the first 30-60 minutes of the announcement, but the previous rounds of intervention from Japanese authorities were repeated in Tokyo, London and New York hours. If you expect the move to be somewhat reversed in the days/weeks that follow, you could position for yen weakness at that point. In any case, it is worth highlighting that volatility is high and will likely pick up further if intervention happens. It might be a good idea to use stops on your positions, although liquidity conditions in fast markets do bring the risk of discontinuous pricing and slippage relative to stop levels. Source: https://www.home.saxo/content/articles/forex/bank-of-japan-the-yen-and-the-increasing-possibility-of-an-intervention-20092022
NZD/USD: Reserve Bank Of New Zealand Is Expected To Hike The Rate By 50bp

Reserve Bank's Of Australia Meeting Minutes Didn't Surprise Markets. RBA May Be Thinking Of The October Hike, Could Australian Dollar (AUD) Be Fluctuating Shortly?

Kenny Fisher Kenny Fisher 20.09.2022 12:18
The Australian dollar is in negative territory today. AUD/USD is trading at 0.6706, down 0.30% on the day. RBA says rates to increase The RBA minutes of the September 6th meeting didn’t shed any new light on the central bank’s rate policy, and the Australian dollar’s response has been muted. The minutes reiterated the message that the markets have already heard from Governor Lowe – additional rate hikes are coming, but the size of the hikes will depend on inflation and growth. The minutes noted that rates are approaching “normal settings”. At the meeting, members argued over whether to raise rates by 25bp or 50bp – in the end, the Bank went for the latter option, bringing the cash rate to 2.35%. With no inflation or employment data prior to the October meeting, the RBA may still be up in the air with regard to the size of the rate hike right up to decision time. This will make for an interesting meeting which could trigger volatility from the Australian dollar. There are arguments to be made on both sides. Inflation rose to 6.1% in the second quarter, and as the RBA’s number one priority, Lowe may want to keep the pedal on the floor until there are clear signs that inflation is moving lower. On the other hand, inflation expectations have slowed over three straight months, a possible indication that inflation may have peaked or will do so shortly. Lowe would very much like to guide the economy to a soft landing, which would be facilitated by a modest 0.25% hike. The Federal Reserve meets on Wednesday, with the markets expecting a 0.75% hike. There is about a 20% chance of a massive full-point hike. The markets will be listening carefully to the Fed’s guidance – if it is hawkish, the US dollar should respond with broad gains. AUD/USD Technical AUD/USD has support at 0.6623 and 0.6523 There is resistance at 0.6769 and 0.6869 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. AUD/USD dips after RBA minutes - MarketPulseMarketPulse
Shell's H1 2023 Performance and CEO's Bold Stance on Renewable Energy

Is the USD/CAD Pair Moving Towards The Top Boundary ?

TeleTrade Comments TeleTrade Comments 20.09.2022 13:35
Canada CPI Overview Statistics Canada will release the latest consumer inflation figures for August later during the early North American session on Wednesday, at 12:30 GMT. The headline CPI is expected to decline by 0.1% MoM as compared to a modest 0.1% rise reported in July. Furthermore, the yearly rate is anticipated to decelerate from 7.6% to 7.3% in August. More importantly, the Bank of Canada's Core CPI, which excludes volatile food and energy prices, is estimated to rise by 0.3% MoM in August and come in at 6% on a yearly basis, down from 6.1% in July. Analysts at RBC Economics offer a brief preview of the report and explain: “We look for a dip from 7.6% in July to 7.2% in August – down from a recent peak of 8.1% in June. But beneath the weakening headline number, some prices are still powering up. Food price growth likely accelerated again. And we look for the rate excluding food and energy products to hold steady at 5.5%. Alongside this, the Bank of Canada’s preferred core inflation measures also likely remained elevated. We continue to believe the headline inflation rate has hit its peak as lower commodity prices and easing global supply chain pressures lower growth in goods prices. But we don’t expect ‘core’ measures to peak until later this year when higher interest rates start to cut deeply into consumer demand.” How Could it Affect USD/CAD? The Bank of Canada (BoC)focuses more on the core rate. If the reading comes in line with expectations or slightly above, it will fuel speculations the BoC will keep its aggressive stance. This might be enough to provide a modest lift to the Canadian dollar, though subdued action around crude oil prices could cap any meaningful upside. Conversely, a softer print should allow the USD/CAD pair to build on its intraday positive move amid resurgent US dollar demand. Nevertheless, the fundamental backdrop suggests that the path of least resistance for the USD/CAD pair is to the upside. Hence, a subsequent strength back towards testing the highest level since November 2020, around the 1.3345 region touched on Monday, remains a distinct possibility. The momentum could further get extended towards the top boundary of a multi-month-old ascending channel, currently placed just ahead of the 1.3400 round-figure mark. On the flip side, the 1.3220-1.3210 region, coinciding with the overnight swing low, might continue to protect any meaningful pullback ahead of the 1.3200 mark. Any subsequent decline might still be seen as a buying opportunity and find decent support near the 1.3120-1.3115 region. This is closely followed by the 1.3100 mark, below which the USD/CAD pair could accelerate the fall towards the next relevant support near the 1.3055 horizontal zone. Key Notes   •   Canadian CPI Preview: Forecasts from five major banks, core inflation to stay high   •   USD/CAD Forecast: Bullish potential intact, Canadian CPI eyed ahead of FOMC meeting   •   USD/CAD: Levels below 1.30 might remain out of reach for now – Commerzbank About Canadian CPI The Consumer Price Index (CPI) released by Statistics Canada is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of CAD is dragged down by inflation. The Bank of Canada aims at an inflation range (1%-3%). Generally speaking, a high reading is seen as anticipatory of a rate hike and is positive (or bullish) for the CAD.
Germany's Economic Challenges: The 'Sick Man of Europe' Debate and Urgent Reform Needs

The Forex Market Awaits Tomorrow's Fed Rate Hike Decisions

Saxo Bank Saxo Bank 20.09.2022 13:55
Summary:  These are remarkable times as the Riksbank manages to surprise the market with a full 100 basis point rate hike and yet EURSEK trades unchanged within half an hour of the decision. This is likely on faltering risk sentiment this morning in Europe as the market mulls the risk that the Powell Fed has come to realize that actions speak far louder than guidance, as we mark up the odds for a 100 basis point hike at tomorrow’s FOMC meeting. FX Trading focus: Fed’s obsession with not surprising may be a thing of past: look for 100 basis points after Riksbank went 100 bps this morning. The Swedish Riksbank surprised today with a 100 basis point hike to take the rate to 1.75%, a move only a minority were looking for. This, in addition to guidance that the Riksbank would look to continue hiking rates, took Swedish yields higher, but didn’t do much for the currency. The reaction there, in fact, was remarkable as EURSEK fell well over a percent on the decision only to trade above the level prevailing immediately before the announcement within five minutes and then rising to new cycle highs since March a bit over half an hour after the decision. As I wrote in this morning’s Quick Take, I suspect SEK weakness (EURSEK top of range, USDSEK near all-time highs of 11.04 from 2001) might have tipped the scales, though the krona was not mentioned explicitly in the Riksbank’s statement today. That takes us to the FOMC meeting tomorrow. I have suggested in recent comments that it is less material whether the Fed moves 75 or 100 basis points at tomorrow’s meeting, provided that the Fed maintains sufficiently strong guidance on the terminal rate by the end of this year and an even higher rate forecast for 2023, but my thinking has evolved this morning and I am already leaning far more in favour of the Fed delivering 100 basis points. One aspect that in the past might have held back the Fed from hiking more than the market has priced (80-85 bps priced in this morning, depending on the measure of expectations) was the seeming Fed obsession with having the rate decision fully priced before the fact as was so patently obvious ahead of the June 16 FOMC meeting, which saw the leak of a WSJ article by noted Fed whisperer Nick Timiraos suggesting a 75 basis point move when the market was priced for only a 50-bp move. Given the stark Jackson Hole speech from Fed Chair Powell and the strong CPI data and other resilient US data, I wonder if this Fed is happy to change behaviour and let a proper surprise rip the market with a 100-bp move tomorrow together with a strong lifting of guidance and a 2024 PCE core forecast lift from its 2.3% level. Even better would be a 112.5 move that does away with the silly quarter-point upper-lower bound of the Fed policy rate and sets the rate to 3.50%.  Already, given that the market’s thinking is shifting in the direction of a 100-bp move tomorrow, the Fed almost has to do so or it will be delivering a dovish surprise with anything less. Fed actions will speak louder than guidance. Chart: USDJPYGet ready for chaos in USDJPY as US 10-year yields are already rising to new cycle highs ahead of the FOMC meeting and the Bank of Japan meeting only hours later in Asia’s Thursday session. The Bank of Japan and Ministry of Finance achieved a modicum of respect with their latest verbal intervention, as fresh highs in long US treasury yields haven’t seen USDJPY challenge the 145.00 level yet, but if the Bank of Japan fails to shift after a more hawkish Fed (our bias), then watch out for significant volatility risk to the upside, followed by a likely intervention fight to follow, as discussed in my colleague Charu’s latest excellent piece.   RBA minutes overnight were nothing to write home about for Australian rates, but AUDNZD jumped higher through the key 1.1250 area resistance, a possibly seismic move we have been out the lookout for since the pair approached that level a few weeks ago. We have argued that a significant resetting higher of the currency pair is possible – possibly toward 1.2000 and higher – given the diverging trajectories of the two countries’ current accounts. Table: FX Board of G10 and CNH trend evolution and strength.The kiwi is getting squashed and the RBNZ may have to change its mind about where the policy cycle may have to go at some level of NZD weakness. Elsewhere, watching the G3 over the FOMC to see if a hawkish surprise can continue to drive USD strength there as well as versus the weaker currencies. If we are set to test new equity bear market lows, SEK may be set for extended weakness and USDSEK may be set for a go at its all time high above 11.00 as EURSEK is also threatening higher. Table: FX Board Trend Scoreboard for individual pairs.AUDNZD has torn above resistance – big development there, even if nominally, there are some shreds of resistance up to 1.1430 before the big space opens up on the chart. Elsewhere, EURSEK trades top of range despite and USDSEK is 2% from all time level of 2001 ahead of FOMC meeting tomorrow. Interesting that USDJPY remains range-locked despite US 10-year yield at new highs this morning – helmets on there as noted above. Upcoming Economic Calendar Highlights 1230 – Canada Aug. Teranet/National Bank Home Price Index 1230 – US Aug. Housing Starts & Building Permits 1230 – Canada Aug. CPI  1700 – ECB President Lagarde to speak Source: https://www.home.saxo/content/articles/forex/fx-update-riksbank-raises-risk-of-100-bp-hike-from-fomc-20092022
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

The USD/CAD Pair Has The Strong Upward Momentum And Possibility For Further Growth

InstaForex Analysis InstaForex Analysis 20.09.2022 14:10
Canada's second-quarter GDP grew by +3.3% year-on-year, data released earlier this month by Statistics Canada showed. This indicator followed the growth of 3.1% in the first quarter but also fell short of the market's growth expectations of 4.5%. On a quarterly basis, real GDP grew by 0.8%. "Growth in the 2nd quarter was contained by a decline in investment in housing construction and household spending on durable goods, as well as growth in imports, which exceeded exports. Final domestic demand rose by 0.7% after a 0.9% increase in the first quarter," Statistics Canada said. At the same time, business activity in the manufacturing sector of Canada declined in August, and the S&P Global PMI fell to 48.7 from 52.5 in July. The reading was well below market expectations of 53.6 and fell below 50, which separates growth from slowdown in business activity. At the same time, "output and new orders fell at a faster pace, and employment fell for the first time since the start of the pandemic in two years," S&P Global Market Intelligence noted. Nevertheless, at a meeting on September 7, the Bank of Canada decided to tighten financial conditions for the country's business by raising the interest rate once again and immediately by 0.75%. In an accompanying statement, the BOC said that rates would need to be raised further given the outlook for inflation. "The data point to a further increase in price pressures, especially in services. Short-term inflation expectations remain high and the Bank of Canada remains strongly committed to price stability and will take the necessary steps to reach its 2% inflation target." Data released two days later showed that the Canadian unemployment rate rose to 5.4% in August from 4.9% in July, which was worse than market expectations of 5%. The net change in employment was -39.7k versus the market's expectation of +15k. Full-time employment decreased by 77.2k and part-time employment increased by 37.5k over the same period. Thus, the BOC found itself in a difficult situation. On the one hand, it needs to control the level of inflation, which continues to rise. On the other hand, it also needs to take into account the deteriorating macroeconomic data coming from Canada. The next meeting of the regulator is on October 26. Assessing the reaction of the Canadian dollar to the results of the September meeting of the BOC (it first strengthened and then continued to sharply weaken against the US dollar), it would probably be logical to assume further growth in the USD/CAD pair, also taking into account the fall in oil prices, stock indices and expectations of the development of a super tight monetary policy cycle of the Fed. Today, the Fed meeting begins, which will end on Wednesday with the publication of the decision on the interest rate. Another increase of 0.75% is widely expected. However, a significant number of economists and market participants are betting on a more decisive tightening of the Fed's monetary policy (an increase in the interest rate by 1.0% at once) and on harsh comments from the Fed's leaders regarding the further prospects for the central bank's policy. As for today's news concerning the dynamics of the CAD and the USD/CAD pair, it is worth paying attention to the publication at (12:30 GMT) of consumer price indices in Canada. They are a key indicator of inflation, and consumer prices account for the majority of overall inflation. Estimating the level of inflation is important for the management of the central bank in determining the parameters of the current monetary policy. If the expected data turns out to be weaker than the previous values, as expected, this will negatively affect the CAD and positively affect the USD/CAD pair. As of writing, it is trading near 1.3285, in a sustained bull market. On the daily chart of the pair, there is a recently formed range between the local high at 1.3343 and the low at 1.3227. Given the strong upward momentum, it is logical to assume further growth, and a breakdown of the local resistance level 1.3343 will be a confirming signal for our assumption.   Relevance up to 11:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322148
Are There More Rate Hikes On Swedish Krona's (SEK) Way?

Hold On Tight Swedish Krona (SEK)! Let's Check Out Swedish Riksbank Decision On Rates!

ING Economics ING Economics 20.09.2022 14:20
Sweden’s central bank hiked the repo rate by 100bp to 1.75% today and signalled more tightening is on the way. The krona’s reaction was negative though, as monetary policy keeps proving a secondary FX driver and the Riksbank’s reserve build-up remains under scrutiny amid a generalised bad environment for high-beta European currencies 100bp hike and an updated rate profile Sweden’s Riksbank has hiked rates by 100bp taking the repo rate to 1.75% – the biggest hike ever since the initial introduction of inflation targets. The decision to hike by 1% was unanimous, prompted by the highest level of CPIF inflation since 1991 and the negative implication it could have on the upcoming wage negotiation which will lock in pay growth for the next three years. Looking at officials’ new interest rate projections, they are signalling a further 25bp hike at the November meeting and that rates will be around 2.50% in mid-2023. It looks like, as of now, with uncertainties regarding inflation remaining high throughout the winter, the bank accepts the housing market slowdown in the medium-short term, prioritising bringing down long-term inflation risk instead.   Source: Riksbank, ING Our forecasts for Riksbank and the krona We think the Riksbank may deliver more front-loading (so a 50bp hike) in November compared to what is embedded in the rate path projections (25bp). Indeed, Governor Stefan Ingves stressed that policy decisions will be taken on a meeting-by-meeting basis, hence reducing the relevance of rate projections. It’s clear that further rate decisions will heavily rely on the energy story and the European economic outlook. As discussed in our most recent SEK update, a more hawkish Riksbank would hardly translate into a stronger krona in the near term, both because the relation between short-term rates and FX has waned across G10, and because the energy crisis in Europe should keep high-beta European currencies like SEK vulnerable. Today’s reaction in EUR/SEK was a case in point: an initial drop after the larger-than-expected hike was quickly followed by strong buying and the pair jumping above pre-meeting levels. Another factor that has likely contributed to the bad SEK reaction was the reiteration by Ingves that the Riksbank will continue to build FX reserves (i.e. selling SEK mostly against USD and EUR) at the same pace. This has been seen by markets as a bearish factor for SEK lately, and we cannot exclude that the larger hike was meant to partly offset this factor.   We continue to see upside risks to EUR/SEK in the near term, especially if the 10.86 March high is broken – basically leaving the 2020 (11.00+) market crash highs as the next key resistances for the pair. We remain cautiously optimistic about a SEK recovery in early 2023, along with other pro-cyclical currencies, and see room for a return below 10.50 in EUR/SEK. The timing and the likeliness of this SEK recovery are however highly uncertain and largely depend on the energy crisis and general risk sentiment. Read this article on THINK TagsSEK Riksbank Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Euro May Gradually Climb To The Target Level

The EUR/USD Pair: In The Longer Run, The Pair’s Bearish View Is Expected

TeleTrade Comments TeleTrade Comments 20.09.2022 14:20
EUR/USD comes under pressure and challenges parity. Immediately to the downside comes the weekly low at 0.9944. EUR/USD triggers a corrective downside soon after hitting multi-session highs around 1.0050 on Tuesday. The pair seems to have embarked on a consolidative range ahead of the key FOMC event on Wednesday. Immediately to the upside comes the interim 55-day SMA at 1.0097 ahead of the key 7-month resistance line, today near 1.0150. A move beyond the latter is needed to mitigate the downside pressure and allow spot to confront the September high at 1.0197 (September 12) ahead of potential extra gains. In the longer run, the pair’s bearish view is expected to prevail as long as it trades below the 200-day SMA at 1.0716. EUR/USD daily chart  
US Dollar (USD) May Be Skyrocketing! Fed Decides On Interest Rate Shortly. Why 75bp Variant Is More Likely Than The 100bp Hike?

US Dollar (USD) May Be Skyrocketing! Fed Decides On Interest Rate Shortly. Why 75bp Variant Is More Likely Than The 100bp Hike?

Jing Ren Jing Ren 20.09.2022 13:41
Expectations for what the Fed will do at its next meeting have been on a bit of a rollercoaster. This has created some fluctuations in the dollar, as well as the stock market. But now that Fed officials are sitting down for the two-day policy rate decision, it seems like economists are finally coming to some kind of agreement on what to expect tomorrow. Four fifths of surveyed economists expect a 75bps hike, with the remainder still holding on for 100bps. That's a consolidation of agreement compared to just a week ago, when over a quarter of analysts were predicting a full percentage point hike. Part of that is due to actually digesting the CPI figures that came out last week. Why not 100bps? Last week's inflation figures were a bucket of cold water on the markets, as headline inflation was above expectations and core inflation continued to rise. Both pushed in the direction of the Fed keeping its aggressive hiking stance. But, the thing is, the Fed hasn't met since July, so expectations for what the Fed will do this time have to take into consideration the last two inflation reports. And July CPI figures were substantially better than the August ones. Taking into consideration all the data that has been released since the last FOMC meeting, there is still a bias towards aggressive hiking, but not so much as the last data indicates. Getting expectations in order In fact, one of the reasons that there was such a strong reaction to the CPI data was that it came as a surprise. July data was implying a possibility for the Fed to start moderating the pace of hikes. Prior to the release, the consensus was for 75bps, and dissenters were arguing for 50bps. The latest guidance from the Fed is that rates will be determined on a meeting-by-meeting basis based on the data. Which means now the focus is on whether the Fed will start giving hints for longer-term policy outlook. If the Fed does a "triple" rate hike, the third in a row, the very next question traders will be asking is, what's next? Tracing lines into the future Several Fed officials have said that interest rates are getting near "neutral", which is the point at which the Fed presumably will start moderating its aggressive hiking. It's estimated that it is around 3.5%. Another 75bps would not only push the rate above where it was in 2018, but up to 3.25%. If the Fed were to continue hiking for the rest of the year (there are two meetings left), then it might be in 25bps increments so as not to substantially go above the "neutral" rate. Therefore, there will be a lot of focus on the dot-plot matrix, which is the summary of where FOMC officials expect rates to be in the future. Up until now, rates were expected to remain high for at least the first quarter of next year. A change in those expectations could determine where the market goes after the FOMC meeting.
Saxo Bank Podcast: Riksbank's Expected 75 Basis Point Hike Today

Forex: Euro To Swedish Krona (EUR/SEK) - What's Possible?

TeleTrade Comments TeleTrade Comments 20.09.2022 15:38
EUR/SEK to revisit recent high of 10.90 – SocGen EUR/SEK could revisit the recent high of 10.90 after Sweden’s Riksbank went big and raised the policy rate by 100 bps to 1.75%, economists at Société Générale report. Read next: The Global Household Wealth Report, A Hacking Attack And More| FXMAG.COM Policy rate path significantly increased “Riksbank raises policy rate by larger than forecast 100 bps to 1.75%, signals further tightening in next six months. Rate forecast raised to 0.7% this year, 2.5% in 2023 and 2.5% in 2024.” “The pair is expected to revisit recent high of 10.90. Overcoming this can extend the move towards 11.05, the 76.4% retracement from 2020 and projections of 11.26.” “Recent pivot low of 10.60/10.56 is near-term support.”
TRY: Central Bank set to deliver significant rate hike today

Oh My! USD/TRY (US Dollar To Turkish Lira) Reached 18.30

TeleTrade Comments TeleTrade Comments 20.09.2022 15:40
USD/TRY to extend its race higher on a break above the 18.30 zone – SocGen The Turkish lira has slipped to a YTD low of 18.30 against the US dollar. Further losses are not ruled out from here, economists at Société Générale report. Read next: The Global Household Wealth Report, A Hacking Attack And More| FXMAG.COM 17.95/17.75 to cushion downside “USD/TRY has formed a series of highs peaks and troughs and is now challenging the high formed in 2021 near 18.36. Overcoming this could result in next leg of uptrend towards projections of 18.75 and 19.30/19.70.” “Short-term support is located at the 50-DMA near 17.95/17.75. This is expected to cushion downside in case a brief pullback materializes.”
The South America Are Looking For Alternatives To The US Currency

Are Levels Over 111 Reachable For US Dollar Index (DXY)?

TeleTrade Comments TeleTrade Comments 20.09.2022 15:42
US Dollar Index to extend upward momentum on a break above 111 – SocGen The US Dollar Index (DXY) moves sideways slightly above 109.50. Economists at Société Générale expect the index to enjoy further gains on a break past 111. Read next: The Global Household Wealth Report, A Hacking Attack And More| FXMAG.COM Short-term downtrend likely on a dip under 107.60 “If the index establishes itself above the high formed earlier this month at 111 – which is also a graphical level, the up move is expected to extend further towards next projections at 112.60/113.00.”  “It is worth noting that the daily MACD has started posting negative divergence. Although this is not a reversal signal, it does point towards receding upward momentum.” “Defending the 50-DMA at 107.60 would be essential for persistence in uptrend. Should a break materialize, a short-term downtrend is likely.”
Are There More Rate Hikes On Swedish Krona's (SEK) Way?

Are There More Rate Hikes On Swedish Krona's (SEK) Way?

TeleTrade Comments TeleTrade Comments 20.09.2022 15:44
EUR/SEK climbs to 6-month highs around 10.8500 The Swedish krona depreciates to multi-month lows vs. euro. The Riksbank unexpectedly hiked rates by 100 bps on Tuesday. The next up barrier comes at the 2022 highs around 10.90. The Swedish currency loses further ground vs. the euro and lifts EUR/SEK to new 6-month tops around 10.8500 following the interest rate decision by the Riksbank. Read next: The Global Household Wealth Report, A Hacking Attack And More| FXMAG.COM EUR/SEK stronger on Riksbank dovish hike EUR/SEK edges higher despite the unexpected full-point interest rate hike by the Riksbank at its meeting earlier on Tuesday. Indeed, the Scandinavian central bank increased the policy rate to 1.75% (from 0.75%) on the back of rising risks of inflation getting entrenched. In order to bring inflation back to the bank’s target, the Riksbank left the door open to extra rate hikes in the upcoming meetings. The central bank now sees the policy rate at 2.5% in a year’s time - just a tad higher from the 2.0% announced at the June’s meeting - although with inflation running at 3-decade highs market participants believe rates could most likely be around 3.5% at the end of 2023. The Riksbank revised its inflation and growth forecasts and now expected the CPIF at 7.8% this year and 5.1% in 2023, while the economy is expected to expand 2.7% in 2022 and contract 0.7% next year.
Poland's Inflation Expected to Reach Single Digits in August, but Disinflation to Slow Down

AUD/USD: Is There Any Sign Of RBA Lifting The Pedall Off The Metal?

TeleTrade Comments TeleTrade Comments 20.09.2022 16:09
AUD/USD remains depressed near 0.6700 mark amid stronger USD, seems vulnerable A combination of factors prompts fresh selling around AUD/USD on Tuesday. Aggressive Fed rate hike bets, elevated US bond yields revive the USD demand. Recession fears also underpin the buck and weigh on the risk-sensitive aussie. The AUD/USD pair attracts fresh selling in the vicinity of mid-0.6700s, or a three-day high touched earlier this Tuesday and continues losing ground through the early North American session. The pair is currently placed near the lower end of its daily trading range, around the 0.6700 mark, and remains well within the striking distance of its lowest level since June 2020. The Australian dollar started weakening following the release of the Reserve Bank of Australia's (RBA) September meeting minutes. The central bank reiterated that policy was not on a pre-set path and noted that interest rates are getting closer to normal levels. The RBA further added that it sees the case for slowing the pace of rate hikes. This, along with resurgent US dollar demand, is exerting downward pressure on the AUD/USD pair. Expectations that the Federal Reserve will stick to its aggressive rate-hiking cycle to curb stubbornly high inflation assist the greenback to rebound swiftly from a one-week low. The US central bank is expected to deliver at least a 75 bps rate hike at the end of a two-day monetary policy meeting on Wednesday. This, in turn, remains supportive of elevated US Treasury bond yields and continues to act as a tailwind for the greenback. Apart from this, a softer risk tone - amid growing recession fears - provides an additional lift to the safe-haven buck and contributes to driving flows away from the risk-sensitive aussie. The USD sticks to its intraday gains and moves little following the release of the mixed US housing market data. Nevertheless, the fundamental backdrop suggests that the path of least resistance for the AUD/USD pair is to the downside. Bearish traders, however, might prefer to wait for some follow-through selling below the 0.6670 region before positioning for any further depreciating move. Investors might also refrain from placing aggressive bets and prefer to move to the sidelines ahead of the key central bank event risk - the highly-anticipated FOMC decision on Wednesday. Technical levels to watch
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Is It A Plot Twist? Look At The Canadian CPI Print

TeleTrade Comments TeleTrade Comments 20.09.2022 16:15
Canada: Annual CPI declines to 7% in August vs. 7.3% expected Inflation in Canada declined at a stronger pace than expected in August. USD/CAD trades in positive territory above 1.3300 after the data. Read next: The Global Household Wealth Report, A Hacking Attack And More| FXMAG.COM Inflation in Canada, as measured by the Consumer Price Index (CPI), fell to 7% in August from 7.6% in July, the data published by Statistics Canada showed on Tuesday. This reading came in lower than the market expectation of 7.3%. The Bank of Canada's (BOC) Core CPI, which excludes volatile food and energy prices, declined to 5.8% on a yearly basis from 6.1% in July, compared to analysts' estimate of 6%. Market reaction With the initial reaction, USD/CAD rose sharply and was last seen gaining 0.55% on a daily basis at 1.3320.
The USD/JPY Currency Pair Is Awaiting The Fedu's Decision, Will The US Dollar Rise Against The Yen

The USD/JPY Currency Pair Is Awaiting The Fedu's Decision, Will The US Dollar Rise Against The Yen

InstaForex Analysis InstaForex Analysis 21.09.2022 08:23
On Tuesday, the USD/JPY pair added 54 points amid an overall strengthening of the dollar by 0.53%. The US stock market lost more than 1% of capitalization yesterday (S&P 500 -1.13%, Russell 2000 -1.36%), but investors are still guided by the situation with the dollar. We believe that after the hype subsides after the Federal Reserve's rate hike, the yen may strengthen under the pressure of stock indices. While we are waiting for the price to rise to the nearest target of 145.10 - to the embedded line of the global price channel, if it is overcome, the growth will continue to the next line at 147.10. A price divergence with the Marlin Oscillator is possible in the area of the second target. This will be a sign of a trend reversal. The price is consolidating under the MACD line (143.83) on the four-hour chart. Consolidating above it, as an initial success, will push the price to storm 145.10. The Marlin Oscillator is moving sideways in the positive area. We are waiting for the Fed's decision and the dollar's growth against the yen. Relevance up to 04:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322222
Is The Price Of The EUR/USD Pair Ready For A Fed Meeting

Is The Price Of The EUR/USD Pair Ready For A Fed Meeting

InstaForex Analysis InstaForex Analysis 21.09.2022 08:35
The euro continues to consolidate in anticipation of today's Federal Reserve meeting, but this time with one peculiarity - yesterday's closing occurred at the lower boundary of the 0.9950-1.0020 range, and not at the upper, as in previous days. As we expected, the resistance of the upper border got the most pressure yesterday. The signal line of the Marlin Oscillator returned to negative territory, now the market is ready for the Fed to raise the rate. Movement targets: 0.9850, 0.9752. On the four-hour chart, just like on the daily chart, the price turned down from the point where the target level coincides with the MACD line. The balance indicator line was also there at that moment. The Marlin Oscillator, as on the higher scale, returned to the downward trend zone. When the price overcomes the lower border of consolidation at 0.9950, the nearest target at 0.9850 opens. Relevance up to 04:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322226
The Outlook For The Bears Remains Very Good On The EUR/USD Pair

The Outlook For The Bears Remains Very Good On The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 21.09.2022 10:18
EUR/USD 5M The EUR/USD pair continued to trade in a flat on Tuesday, which began last week. At this time, the pair remains between the levels of 0.9945 and 1.0072, but if desired, the horizontal channel can be extended to the boundaries of 0.9877 and 1.0072. There is a minimal upward trend, but it certainly cannot be called a "trend". Thus, there is nothing left but to wait for the results of the Federal Reserve meeting, which, by and large, are already known to traders. It's no secret that with a probability of 80% the rate will rise today by 0.75%. The remaining 20% is given to the option with an increase of 1.00%. One way or another, we believe that such a decision should provoke a new growth of the dollar. However, there will also be a speech by Federal Reserve Chairman Jerome Powell, and the reaction of the market is absolutely impossible to predict. Therefore, we advise you to prepare for any movement and for the "swing". As before, the market's reaction to this event may persist for a day, so even this morning it will not be possible to say for sure that the market has fully worked out the FOMC meeting. In regards to trading signals, everything was quite simple, which is good news. The price bounced twice from the 1.0019-1.0031 area, so traders had to open one short position (signals duplicated each other). Subsequently, the price went down about 55 points (so the signal cannot be considered false), but failed to work out the nearest target at 0.9945. Therefore, the position had to be closed manually. One could manage to earn about 30-35 points. COT report The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not give any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 21. Is the Fed stalling on slowing inflation? Overview of the GBP/USD pair. September 21. The British pound is correcting and does not pay attention to the hawkish mood of the Bank of England. Forecast and trading signals for GBP/USD on September 21. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The outlook for the bears remains very good on the hourly timeframe, despite the flat. They manage to stay near 20-year lows for a long time, not allowing the pair to even correct. Therefore, we expect the continuation of the downward movement. Either today or later. But we certainly do not believe that the global downward trend is over. We highlight the following levels for trading on Wednesday - 0.9877, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (1.0031) and Kijun-sen lines (1.0003). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. There will not be a single interesting event in the European Union, and in the United States, as already mentioned, the results of the Fed meeting will be announced late in the evening, economic forecasts will be published and Powell will hold a press conference. Naturally, these events can have a very strong impact on the movement of the euro/dollar pair. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group. Relevance up to 02:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322214
The Pound/Dollar Pair Only Spent A Couple Of Days In A Formal Flat

The Pound/Dollar Pair Only Spent A Couple Of Days In A Formal Flat

InstaForex Analysis InstaForex Analysis 21.09.2022 10:21
GBP/USD 5M The GBP/USD currency pair was in an open flat for most of the day on Tuesday and only by the end of the day did it decide to resume the downward movement. So it is right at its 37-year lows again for now. In principle, we have repeatedly said that the pair's decline can continue quite freely, and the global downward trend does not look complete. Therefore, the current, new fall of the pound does not surprise us at all. It is surprising that the market does not even want to wait for two meetings of central banks. We once again remind you that the market's reaction to both meetings can be absolutely any, even illogical, even contrary to common sense. Therefore, one should not think that the pound will fall one hundred percent today, when the Federal Reserve raises its rate, and tomorrow, when the Bank of England raises its own, but still remains in the role of catching up. There is no trend line or channel right now, but they are not really needed. In regards to trading signals for the pound, things were a little more complicated. The first thing to note is the critical line's decline to the level of 1.1469 yesterday. Therefore, the levels 1.1469 and 1.1442 should be considered as an area. It was from this area that the price bounced twice, forming two sell signals. Therefore, two short positions should have been opened. The first one was closed by Stop Loss at breakeven, as the price went down only 20 points. The second - at least 45 points in profit, since after the formation of the corresponding signal, the pound was only falling. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group closed 11,600 long positions and opened 6,000 shorts. Thus, the net position of non-commercial traders decreased by another 17,600, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new fall, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its decline has completely resumed and multi-year lows are updated almost every day, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 109,000 shorts and 41,000 longs open. The difference is again almost threefold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, one should not forget about the high demand for the US dollar, which also plays a role in the fall of the pound/dollar pair. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 21. Is the Fed stalling on slowing inflation? Overview of the GBP/USD pair. September 21. The British pound is correcting and does not pay attention to the hawkish mood of the Bank of England. Forecast and trading signals for EUR/USD on September 21. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair only spent a couple of days in a formal flat on the hourly timeframe. Now it can resume the fall, without even waiting for the meetings of the BoE and the Fed. Overcoming the level of 1.1354 will open the way further down for the pair, but there are no targets there anymore, since the pair has not been so low for 37 years. However, we believe that the pound will continue to fall in the medium term. We highlight the following important levels on September 21: 1.1354, 1.1442, 1.1649, 1.1760, 1.1874. Senkou Span B (1.1569) and Kijun-sen (1.1469) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. There are no major events or reports scheduled for Wednesday in the UK, and neither in the US during the day. The results of the Fed meeting will be announced only in the evening, but by that time traders will already have to close all transactions and leave the market. We do not recommend trading on strong events and at night. Nevertheless, if at the time of summing up any position is still open, then you can set Stop Loss to breakeven and leave it open. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group. Relevance up to 02:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322216
Russian Referendum In The Occupied Territory Of Ukraine And More

Russian Referendum In The Occupied Territory Of Ukraine And More

Saxo Bank Saxo Bank 21.09.2022 10:28
Summary:  Nasdaq 100 and S&P 500 on tenterhooks after bond yields hit record highs, the US dollar index hits a record with markets bracing for the Fed’s jumbo hike. Shocking German PPI and Riksbank’s 100bps rate hike sets the stage for the FOMC to deliver a hawkish surprise. Ford becomes the second major company to downgrade their outlook, seeing its shares slide 12%, and sending another warning signal on the upcoming earnings season. Hang Seng rallies on the prospect of ending hotel quarantine. Russia-Ukraine tensions on a boil, sending wheat futures up 7%. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) on tenterhooks after bond yields hit record highs The US benchmark indices came under further pressure overnight (with the S&P500 down 1.1%, the Nasdaq 100 losing 0.9%) with investors selling equities and bonds and buying the US dollar, with markets on tenterhooks for the Fed’s jumbo rate hike on Wednesday. Added pressure came when the US 2-year bond yield hit 4% and the 10-year US bond yield hit 3.6%. Those are treasury yields’ highest levels since 2011, and they are better yields than the S&P500’s 1.7%. Meanwhile the US dollar index hit a record high as investors took shelter in the currency. Investors and traders are bracing for the Fed to boost rates to levels not seen since before the 2008 financial crisis. But is there more downside? The risk is that the Fed paves out a hawkish dot plot, or raises rates more than the 75 bps expected. That scenario will pressure equities. However, if the Fed believes inflation is rolling over, and signals this is peak hawkishness, then equities may see a knee jerk reaction and whipsaw higher. The technical indicators on the day and week chart for the S&P500 and Nasdaq imply further pressure are ahead. Big U.S. stock movers All 11 sectors in the S&P 500 fell on Tuesday, with Real Estate, Materials, and Consumer Discretionary falling the most, and Information Technology, Consumer Staples, and Energy relatively outperformed. Ford (F:xnys) tumbled 12.3% after the automaker said that inflation is making supplier costs USD 1 billion higher than expected in the current quarter. Gap (GPS:xnys) lost 3.2% on reports that the apparel retailer is cutting 500 corporate jobs in response to growing costs and weaker sales. Casino stocks gained as investors found optimism from relaxed Covid test requirements for passengers boarding a flight in Macao and the prospect of loosening hotel quarantine restriction in adjacent Hong Kong, through which many travelers arrive in Macao. Wynn Resorts (VYNN:xnas) gained 2.9% and Las Vegas Sands (LVS:xnys) climbed 1.2%. Apple’s (AAPL:xnas) shares rose 1.6% on Tuesday with estimates now suggesting the company’s most expensive iPhone, the iPhone 14 Pro model accounts for 60-65% of total iPhone 14 shipments, which is up from the previous estimated range of 55-60%. This means Apple could have a positive outlook when they release their next quarterly earnings in late October. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) were sold off again with 10-year yields reaching 3.6% intraday The sell-off in bonds continued on Tuesday.  The 5-year and 10-year segments of the treasury curve were hit most, with 10-year yields reaching a new intra-session high at 3.60% before paring and settling at 3.56%, up by 7bps from Monday.  The woes in the treasury markets stared across the pond in Europe following the larger-than-expected 100bp hike by the Riksbank in Sweden and the jaw-dropping 45.8% Y/Y increase in German PPI. A solid 20-year treasury bond auction, which stopped through 1.3bps and had a low award to primary dealers (8.1%), helped treasuries stage a short-lived rally and saw yields off their session highs before being sold (yields higher) again as a block sale of 7,200 contracts in the 5-year at 108-221/4 hit the tape.  The 2-year segment relatively outperformed, rising only 3bps in yield to finish the day at 3.97%, a touch below 4%. Hong Kong’s Hang Seng (HSIU2) rallied on the prospect of ending hotel quarantine   Hong Kong equities rallied on Tuesday, with Hang Seng Index rising 1.2% and Hang Seng Tech Index (HSTECH.I) climbing 2.0%. China’s Hong Kong and Macao Affairs Office of the State Council said the Chinese Government supports Hong Kong’s efforts to have “close, extensive contact” with the rest of the world. It was interpreted as a nod to Hong Kong’s plan to scrap the hotel quarantine requirement. Cathay Pacific Airways (00293) rose 2.2%. Stocks in the retail space gained, with jewellers surging from 2% to 7%. Macao casino stocks rose from 3% to 15% across the board, following the enclave extending the validity of PCR tests from 48 hours to 7 days for any person boarding a flight in Macao. Mainland state-owned media continued to publish articles with a positive tone to boost investor confidence. The latest was Securities Daily’s op-ed claiming that investors should have confidence in China’s long-term growth as the Government has launched quite a number of stimulus measures. CCTV says President Xi is committed to ensuring the stability of industrial and supply chains.  The China internet pace gained and Alibaba (09988:xhkg), Baidu (09888:xhkg), Meituan (03690:xhkg), JD.COM (09618:xhkg), and Netease (09999:xhkg) surged 2% to 4%.  EV stocks rebounded, with XPeng (09868:xhkg) soaring nearly 9%, NIO (09866:xhkg), and Li Auto (02015:xhkg) rising around 5%.  CSI300 Index was little changed, with solar power, energy storage, and auto outperforming.  Australia’s ASX200 to unwind yesterday’s rally. But watch for green and gold shoots in agricultural stocks The futures imply the ASX200 could unwind yesterday’s rally and rally 1.1% following US equites. However bright sparks might be seen in the soft commodity space with Wheat prices jumping 7.6% overnight as undersupply fears grip the market. It could be worth watching GrainCorp (GNC) and Elders (ELD).   Australian dollar against the NZ Dollar scales to 7-year highs The Aussie dollar against the kiwi dollar, the AUDNZD leaped to new highs, clearing the 1.1344 level. What supports this currency pair moving is the large divergence between Australia’s exports rising (Australia’s trade surplus rising), versus New Zealand’s imports increasing due to higher costs of energy products (and its trade deficit rising). If this continues, this supports AUDNZD. Want to know more? Australia’s trade account surplus trades near a record high, as Australia is exporting a record amount of coal and LNG. Inversely, the New Zealand economy is trading at a deficit for the second month in a row, as its heavily reliant on energy imports, which have increased significantly in price. What to watch if you are trading this pair? On Thursday September 22, NZ releases its Balance of Trade data. If there is another large deficit, we could see the AUDNZD leap up again. The next focus is perhaps 1.1516, the high of 2015. USDJPY range-bound despite the surge in US yields USDJPY saw some gains on Tuesday but the cap at 144 still prevailed despite the US 10-year yields making a fresh high. The verbal intervention from the Japanese authorities in the last few weeks, and the rate-check from last week, has helped to calm yen traders. However, if the FOMC delivers a hawkish surprise this week and Bank of Japan maintains its dovish policy, further pressure on the yen cannot be ignored. That may prompt another round of intervention from the Japanese authorities, spooking 2-way volatility, but still throwing up some potential trading opportunities as discussed here. Crude oil (CLU2 & LCOV2) suffers on the back of a stronger USD Crude oil prices were lower on Tuesday following the Riksbank’s hawkish surprise and a run higher in US Treasury yields as well as the US dollar. The fresh release announcement from the US strategic reserves scheduled through November also added to the downside. API inventories also saw crude stocks rising for the third straight week, and there were inventory builds across the board. WTI futures dipped below $84/barrel while Brent futures dipped below $91. This comes despite rising war tensions in Ukraine (see below) as the focus has shifted to the massive monetary policy tightening being delivered this week. What to consider? Riksbank goes for a 100bps rate hike, setting the stage for FOMC The Swedish Riksbank surprised yesterday with a 100-basis point hike to take the rate to 1.75%, a move only a minority were looking for. This, in addition to guidance that the Riksbank would look to continue hiking rates, took Swedish yields higher, but didn’t do much for the currency. The decision to hike by 1% was unanimous, prompted by the highest level of CPIF inflation since 1991 and the negative implication it could have on the upcoming wage negotiation which will lock in pay growth for the next three years. However, with global tightening wave turning more hawkish that expectations after ECB’s 75bps rate hike and Riksbank’s 100bps, the stage is being set for the FOMC to deliver above expectations as well. Shocking August German PPI According to the German statistics office Destatis, the PPI rose by 7.9% month-on-month in August. This is much higher than the consensus (2.4%). This shows that forecasting in the current macroeconomic environment is more challenging than ever. On a year-over-year basis, the increase is at 45.8%. This is an historical record. The continued jump is explained by higher energy prices (+139% year-over-year). But not only. Actually, inflation is broad-based. Prices for intermediate goods, for capital goods and for non-durable consumer goods are much higher too. This will probably get worse in the short-term. In the eurozone, it is unlikely the peak in inflation has been reached (contrary to the situation in the United States). Russia-Ukraine tensions heat up Russia is trying to stage a referendum on annexing the regions of Ukraine its forces still control. There were heightened geopolitical tensions regarding Russia and Ukraine where the separatists are to hold a referendum in Donetsk, Luhansk, Kherson and Zaporozhye on September 23rd-27th, although Ukraine and its allies have denounced the referendums as illegal and few countries are likely to recognize the results. An update from Putin on the matter is being awaited, where there have been some suggestions that he is considering introducing martial law and full mobilisation of the Russian army - the speech has now reportedly been delayed until 06:00BST/01:00EDT Wednesday. The move threatens to escalate the conflict even further, potentially giving Putin the formal legal basis to use nuclear weapons to defend what Moscow would consider Russian territory. China’s Emerging Industries PMI slightly improved Emerging Industries PMI (EPMI) in China climbed slightly to 48.8 in September from 48.5 in August.  The modest improvement was below market expectations and the 48.8 print was the lowest September figure (EMPI is not seasonally adjusted) since 2014 when the survey first started, suggesting weak growth momentum.  Reserve Bank of Australia minutes hint at more, but slower, rate hikes RBA minutes from the September 6 meeting suggested that there is more room for interest rates to go up, but there is no pre-set path given the uncertainties surrounding the growth/inflation outlook. After a 50bps rate hike announced at the September meeting, and with global tightening race picking up to make a 75bps as the new 25bps, expectations for further RBA rate hikes of that magnitude could have potentially gained traction. However, the RBA has said that it will consider either 25bps or 50bps for the upcoming meetings. While another 50bps can still be expected in October, given that inflation reached 6.1% (vs. target of -3%), the pace of tightening is set to slow from there. Chinese banks kept Loan Prime Rates unchanged China’s leading banks fixed the 1-year and 5-year loan prime rates unchanged at 3.65% and 4.30% respectively, as expected.  Ford, the second major company to downgrade their outlook Investors have been hit with the second major company downgrade in two weeks, with Ford (F) joining FedEx (FDX) in guiding of a challenging economic environment ahead. As mentioned yesterday, Ford warned inflation will cost its business $1 billion in the quarter, sending Ford shares down 12%, which is the stocks biggest loss in over 10 years. The automakers expect EBIT to range between $1.4b -$1.7 billion when it reports results next month. Lennar’s results may provide some insights into the U.S. housing market With 30-year fixed rate mortgage interest rates jumping above 6% for the first time in 14 years, since Sept 2008 and home affordability has fallen to historically low levels, investors are concerned about the state of the U.S. housing markets.  Results from a leading home builder Lennar (LEN:xnys) this Wednesday after market close will give a good opportunity for investors to gauge the latest market conditions in the U.S. housing market. Analysts, as per the survey by Bloomberg, are estimating revenue growth of 30% Y/Y and 8.3% Y/Y EPS growth in the quarter ending Aug 31, 2022.  Investors, however, will focus on the management’s comments and forward guidance.    Check out here for our views on the FOMC meeting and the Bank of Japan this week. For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-sept-21-2022-21092022
Another Factor Putting Downward Pressure On The USD/JPY Pair

Another Factor Putting Downward Pressure On The USD/JPY Pair

TeleTrade Comments TeleTrade Comments 21.09.2022 11:00
USD/JPY struggles to capitalize on its modest intraday uptick on Wednesday to a one-week high. The anti-risk flow benefits the JPY and caps the upside amid a modest fall in the US bond yields. Strong follow-through USD buying offers some support ahead of the key FOMC policy decision. The USD/JPY pair struggles to find acceptance above the 144.00 mark and retreats from a one-week high touched this Wednesday. The pair slides back below mid-143.00s during the early European session and is pressured by reviving demand for the safe-haven Japanese yen, though lacks follow-through selling. The market sentiment remains fragile amid concerns that rapidly rising interest rates will lead to a deeper global economic downturn. Apart from this, headwinds stemming from China's zero-covid policy and the protracted Russia-Ukraine war have been fueling recession fears. This, in turn, tempers investors' appetite for riskier assets and is driving haven flows towards the JPY. The anti-risk flow is reinforced by a modest pullback in the US Treasury bond yields, which is seen as another factor exerting some downward pressure on the USD/JPY pair. That said, a strong pickup in the US dollar demand, bolstered by hawkish Fed expectations, should continue to lend support to spot prices and help limit deeper losses ahead of the key central bank event risks. The Federal Reserve is scheduled to announce its decision at the end of a two-day policy meeting on Wednesday and is widely expected to deliver another supersized 75 bps rate increase. The markets also seem convinced that the US central bank will stick to its aggressive rate=hiking cycle to tame inflation, which should act as a tailwind for the US bond yields and the greenback. Hence, the focus will remain glued to the updated economic projections, the so-called dot plot and Fed Chair Jerome Powell's comments at the post-meeting press conference. Investors will look for fresh clues about the future rate hike path. This, in turn, will play a key role in influencing the USD price dynamics and help determine the near-term trajectory for the USD/JPY pair. This will be followed by the Bank of Japan meeting on Thursday. The Japanese central bank remains committed to maintaining ultra-low interest rates and dovish policy guidance. This marks a big divergence from a more hawkish stance adopted by other major central banks, which supports prospects for an extension of the USD/JPY pair's recent strong appreciating move.
The European Economy May Stagnate, Inflation Will Remain High

The European Economy May Stagnate, Inflation Will Remain High

TeleTrade Comments TeleTrade Comments 21.09.2022 11:10
European Central Bank (ECB) Vice President Luis de Guindos said on Wednesday, “inflation remains very very high.” Key quotes Recent data point to substantial slowdown. Risks to inflation are on the upside. Banks stand out in terms of resilience in financial sector. Determined to bring inflation back to target. The economy is likely to stagnate around year-end. Hikes to continue and data will determine the size. The value of neutral rate is unclear. Market reaction EUR/USD was last seen trading at 0.9901, down 0.63% on the day.
Today’s Federal Reserve (Fed) Decision, And The Market After Riksbank Shocked

Today’s Federal Reserve (Fed) Decision, And The Market After Riksbank Shocked

Swissquote Bank Swissquote Bank 21.09.2022 11:08
Risk appetite is poor into today’s Federal Reserve (Fed) decision, and after Riksbank shocked the market with a 100bp hike yesterday. The announcement couldn’t get the SEK appreciate against the US dollar; it rather got many investors more uncomfortable, and worried that the Fed would do the same today: deliver a 100bp hike. But it may not. The expectation for the decision Activity on Fed funds futures still assesses less than 20% probability for a 100bp hike from the Fed today. So, the expectation is that the Fed will deliver a 75bp hike today. We could see a relief rally in equity and bond markets, if, of course, the dot plot doesn’t show projections going above market expectations. One good news in all this is that inflation in Canada eased more than expected last month, both the headline and the core inflation softened. But the data obviously revived the BoC doves and sent the Loonie lower against a broadly stronger US dollar. The USDCAD spiked to 1.3375 as a result. And cheaper oil didn’t help. The market is under pressure Crude oil fell below $85 per barrel, as the US announced it would sell 10 million barrels more from the Strategic Reserves for delivery in November to help keeping a negative pressure on oil prices. The EURUSD consolidates below parity, as Cable slipped below 1.14 mark. Bitcoin is testing the $19K support this morning and gold remains under a decent selling pressure due to strong dollar and rising US yields. Watch the full episode to find out more! 0:00 Intro 0:27 Riksbank raised by 100bp 1:16 Could the Fed do the same? 3:12 Market update 4:15 Betting against treasuries is fructuous, but risky 6:28 Oil down as US announced more strategic reserve sale 7:25 EUR, GBP, Gold and Bitcoin under pressure into Fed decision Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
What Is The Situation Of The Euro To Us Dollar (EUR/USD) Pair Today

What Is The Situation Of The Euro To Us Dollar (EUR/USD) Pair Today

InstaForex Analysis InstaForex Analysis 21.09.2022 11:21
Technical Market Outlook: After making the local high at the level of 1.0050, EUR/USD reversed lower, broke the intraday technical support at 0.9950 and is heading lower. The market participants await the FED interest rate decision and press conference scheduled at 8:00 PM tonight. The nearest technical support is seen at 0.9934 and 0.9901. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the longer term down trend is reversed. Please watch the USDX as the correlation between this two is directly opposite. Weekly Pivot Points: WR3 - 1.01231 WR2 - 1.00595 WR1 - 1.00262 Weekly Pivot - 0.99959 WS1 - 0.99626 WS2 - 0.99323 WS3 - 0.98687 Trading Outlook: Despite the recent relief rally towards the short-term support, the EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Relevance up to 08:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293561
The Pound To US Dollar: The Bearish Pressure Is Still Strong

The Pound To US Dollar: The Bearish Pressure Is Still Strong

InstaForex Analysis InstaForex Analysis 21.09.2022 11:44
Technical Market Outlook: The GBP/USD pair has been testing the last week's low located at the level of 1.1349 for quite some time now, so the volatility has decreased. Despite the recent bounce, the bears are still in charge of this market and the next target for bears is located at the level of 1.1351 again. The intraday technical resistance is located at the levels of 1.1452 and 1.1410. Please keep an eye on the long-term technical support level, because any violation of this level will have a very serious consequences, like an accelerated sell-off towards the next technical support, which is more then 300 pips away. Weekly Pivot Points: WR3 - 1.15678 WR2 - 1.14810 WR1 - 1.14335 Weekly Pivot - 1.13942 WS1 - 1.13467 WS2 - 1.13074 WS3 - 1.12206 Trading Outlook: The bears tested the level of 1.1410 (2020 swing low) not so long ago and now the market is in the pull back mode.The bearish pressure is still strong and the technical support might be violated. On the other hand, in order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th). Relevance up to 08:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293563
Bitcoin: The Bearish Pressure Is Still High, Giants Enter The Cryptocurrency Market

Bitcoin: The Bearish Pressure Is Still High, Giants Enter The Cryptocurrency Market

InstaForex Analysis InstaForex Analysis 21.09.2022 11:45
Crypto Industry News: The second largest stock exchange in the world focuses on development in the digital asset sector. All this in the hope of taking advantage of the growing interest in space on the institutional market. According to a Bloomberg report, Nasdaq Digital Assets will initially only launch custody services for Bitcoin and Ethereum. Gemini Ira Auerbach will lead the new arm of the company, and the department is expected to grow to 40 people by the end of 2022. Nasdaq has already applied to offer digital asset storage services with the New York Department of Financial Services. The document is currently pending approval. If NYDFS approves the application, Nasdaq will become a serious rival to companies like Coinbase and Anchorage Digital. It will also face competition from BNY Mellon and State Street. These two giants of the traditional financial world have also decided to enter the world of cryptocurrencies. The cryptocurrency industry had a difficult year 2021 - Bitcoin, Ethereum and most other major assets fell by more than 70% from last year's highs. Wall Street, however, is increasingly interested in the market, citing the growing demand from institutional clients for Bitcoin and other cryptocurrencies. Blackrock, the world's largest asset management company, teamed up with Coinbase and launched a Bitcoin Spot trust fund last month to help its wealthy clients gain access to cryptocurrencies. Technical Market Outlook: The BTC/USD pair had bounced from the recent low made at the level of $18,239, however the bounce was very shallow and the market keeps trading around the level of $19,000. The levels of $18,640 and $18,563 will now act as the technical support and the nearest technical resistance is seen at the level of $19,347 and $19,679. The weak and negative momentum on the H4 time frame chart still supports the short-term bearish outlook towards the level of $17,600 again. Weekly Pivot Points: WR3 - $21,295 WR2 - $20,039 WR1 - $19,341 Weekly Pivot - $18,764 WS1 - $18,064 WS2 - $17,526 WS3 - $16,271 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade Relevance up to 08:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293565
The Fall Of The British Currency (GBP) May Intensify

The Fall Of The British Currency (GBP) May Intensify

InstaForex Analysis InstaForex Analysis 21.09.2022 11:58
The pound fell by 51 points yesterday. The price has overcome the support level of 1.1385. Today, the Federal Reserve raises rates by 0.75%, so the British currency's decline may intensify. The nearest target levels are: 1.1305, 1.1170. A correction is likely from the level of 1.1170, as the next target is very low - 1.0830. Today we will receive data on public sector borrowing (budget deficit) and industrial orders in the UK. Borrowing in August is expected to rise from 4.18 billion pounds, the index of industrial orders from the CBI for September is forecast to fall even more: -11 against -7 in August. The price has already settled below the level of 1.1385 on a four-hour scale. The Marlin Oscillator is in no hurry to turn around, but it is still in the negative area, the general trend is down. We are waiting for the Fed meeting and further price movement downward. Relevance up to 04:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322224
There Are No Statistics That Could Help The Pound

There Are No Statistics That Could Help The Pound

InstaForex Analysis InstaForex Analysis 21.09.2022 12:07
Quite a lot of market entry signals were formed yesterday, but not all of them brought the expected profit. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1441 level in my morning forecast and advised you to make decisions on entering the market from it. A false breakout in the area of 1.1441 led to what seemed to me an excellent signal to sell the pound, but it never came to a major downward movement. After a short period of time, the bulls broke above 1.1441 and tested this level from the top down, which led to the closure of short positions with a small loss, and to long positions on the pound. The upward movement amounted to about 15 points, and failing to break through the weekly high, bulls retreated. The bulls tried to protect 1.1411 in the afternoon and even drew a false breakout there. However, the upward movement amounted to about 13 points, after which there was a return and a breakthrough of 1.1411 with a reverse test from the bottom up - this forced us to exit longs and continue to sell the pound along the trend. The downward movement was about 50 points. When to go long on GBP/USD: Today we do not have any statistics that would help the pound to protect the annual lows. We expect data on the net volume of borrowings of the public sector in the UK and the balance of industrial orders according to the Confederation of British Industry. Most likely, the focus will shift to the US central bank's decision and to the statements made by Fed Chairman Jerome Powell. His hawkish accent will lead to another big sell-off in the British pound, which will open the door to fresh new yearly lows. In fairness, it should be said that the pressure on the pound can be limited, since tomorrow the Bank of England will follow a similar path and also raise rates by 0.75%. But even here it is difficult to say how good it is for the British pound, as the country's economy is actively heading into recession, and tightening policy will worsen the situation. The most convenient scenario for opening longs in the current difficult conditions will be a false breakout near the lower border of the horizontal channel at 1.1355, formed on the basis of last Friday. The goal of recovery in this case will be the resistance of 1.1405, where the moving averages are, playing on the bears' side. Only a breakthrough and test of this range can pull speculators' stop orders, which forms a new buy signal with a rise to a more distant level of 1.1451, allowing the bulls to keep trading in the horizontal channel. However, I don't really count on such a scenario, since the Fed's succeeding policy will obviously be quite aggressive. The farthest target will be the area of 1.1495, where I recommend taking profits. If the GBP/USD falls and there are no bulls at 1.1355, and most likely it will be so, the pressure on the pair will return, which will open up the prospect of updating the September low. In this case, I advise you to postpone longs until the next support at 1.1313. I recommend opening longs on GBP/USD immediately for a rebound from 1.1264, or even lower - around 1.1205, counting on correcting 30-35 points within the day. When to go short on GBP/USD: The bears have already returned the pound to September lows and are preparing for its breakdown, taking advantage of the expectations of another aggressive interest rate hike by the US Federal Reserve. Obviously, in order to keep the market under their control, the bears need to protect the nearest resistance at 1.1405, which will lead to an excellent signal to open new shorts. In this case, the immediate target will be the area of 1.1355, near which, at the time of writing, the main trade is being conducted. I expect that this level will be of an intermediate nature, since the fourth test will take place. A breakthrough and reverse test of 1.1355 would provide a good entry point for shorts with a fall towards 1.1313. The farthest target will be a new yearly low of 1.1264. In case GBP/USD grows and the bears are not active at 1.1405, the correction of the pound may lead to the area of 1.1451. Only a false breakout at this level will provide an entry point to shorts, counting on a slight movement of the pair to the downside. If traders are not active there, I advise you to sell GBP/USD immediately for a rebound from 1.1495, counting on the pair's rebound down by 30-35 points within the day. COT report: An increase in short positions and a decrease in long ones were recorded in the Commitment of Traders (COT) report for September 13. This once again confirms the fact that the British pound is in a major downward peak, from which it is not as easy to get out as it might seem. This week, in addition to the Federal Reserve meeting, there will also be a meeting of the Bank of England committee, at which a decision will be made to raise interest rates, which will negatively affect the economy, which is gradually sliding into recession, as evidenced by the latest macroeconomic statistics. A recent speech by BoE Governor Andrew Bailey confirms the committee's aggressive intentions. On the one hand, an increase in interest rates should support the pound, but on the other hand, in the face of a sharp slowdown in economic growth and a crisis in living standards in the UK, such measures force them to get rid of the British pound, relying on the US dollar as a safe-haven asset. High U.S. rates are also attracting investors, increasing demand for the U.S. dollar. The latest COT report indicated that long non-commercial positions decreased by 11,602 to 41,129, while short non-commercial positions rose by 6,052 to 109,215, which led to an increase in the negative value of the non-commercial net position to the level of - 68,086 versus -50,423. The weekly closing price collapsed from 1.1504 against 1.1526. Indicator signals: Trading is below the 30 and 50-day moving averages, indicating a continuation of the bear market. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair falls, the lower border of the indicator around 1.1355 will act as support. In case of growth, the upper border of the indicator around 1.1415 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders. Relevance up to 08:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322236
Further Development Of Ethereum, The Momentum Of Ethereum Remains Weak And Negative

Further Development Of Ethereum, The Momentum Of Ethereum Remains Weak And Negative

InstaForex Analysis InstaForex Analysis 21.09.2022 11:55
Crypto Industry News: Ethereum co-founder Vitalik Buterin shared his vision of Layer 3 protocols. While Layer 2 protocols focus on "scalability", the next protocols would serve different purposes. Further changes to Ethereum While Ethereum-based Layer 2 solutions focus on scaling networks, Buterin believes their Layer 3 counterparts will serve a completely different purpose - providing "tailored functionality". He shared his thoughts in a post from September 17th, outlining three "visions" of what Layer 3 solutions will be used for in the future. Ethereum co-founder said that the third layer in a blockchain only made sense if it provided a different functionality than layer two. "The 3-tier scaling architecture, which is to lay down the same scaling scheme on top of each other, usually doesn't work well," he said. Except that "a three-tier architecture in which the second and third layers have different goals, can work" he added. One use case for Layer 3 would be what Buterin describes as "customized functionality" by referring to privacy-driven applications. Another use case would be "customized scaling" for specialized applications that do not wish to use an Ethereum Virtual Machine (EVM) to perform computation. Buterin also added that layer 3 can be used for scaling with the Validiums tool. This can be beneficial for enterprise blockchain applications by using a "centralized server that runs validation checks and regularly shortcuts the chain." However, Buterin also noted that since interchain transactions can be performed easily and cheaply between two tiers 2, building tier 3 does not necessarily improve network performance. Technical Market Outlook: The ETH/USD pair had broken below the last month's low seen at the level of $1,423 and made a new weekly low at the level of $1,281 before a shallow bounce occurred. The levels of $1,358, $1,407 and $1,424 will now act as the technical resistance for bulls as the market is trying to extend the bounce from the extremely oversold conditions on the H4 time frame chart. The next target for bears is seen at the level of $1,281, $1,267, $1,255 and below. Despite the extremely oversold market conditions on the H4 time frame chart, the momentum remains weak and negative, which might indicate the ETH is still in the short-term down trend. Weekly Pivot Points: WR3 - $1,460 WR2 - $1,386 WR1 - $1,346 Weekly Pivot - $1,312 WS1 - $1,272 WS2 - $1,238 WS3 - $1,164 Trading Outlook: The Ethereum market has been seen making lower highs and lower low since the swing high was made in the middle of the August at the level of $2,029. The key technical support for bulls is seen at $1,281.9. If the down move will extend, then the next target for bears is located at the level of $1,000. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade Relevance up to 08:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293567
The EUR/USD Pair Is Showing Fresh Downside Momentum

The EUR/USD Pair Is Showing Fresh Downside Momentum

InstaForex Analysis InstaForex Analysis 21.09.2022 12:13
Technical analysis: EUR/USD has been trading downside this morning and I found the breakout of the multi day channel, which is good sign for further downside movement. Trading recommendation: Due to the breakout of the channel in the background and strong downside trend this year, I see potential for further drop Watch for the potential selling opportunities on the rallies with the downside objectives at the price of 0.9800 and 0.9655 MACD oscillator is showing fresh downside momentum, which is good sign for further downside movement. Key resistance is set at the price of 1.0050 Relevance up to 09:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293579
Will Silver Confirm Further Downside Movement

Will Silver Confirm Further Downside Movement

InstaForex Analysis InstaForex Analysis 21.09.2022 12:19
Technical analysis: Silver has been trading sideways at the price of $19.38 but I see potential for the downside movement in case of the downside breakout. Trading recommendation: Watch for potential downside breakout of the support at 19.20 to confirm further downside movement. Downside objectives are set at the price of $18.77 and $18.55 Key resistance is set at the price of $19.64 Relevance up to 09:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293585
Pressure On The Euro Is Rising And The Dollar Is More Attractive

Pressure On The Euro Is Rising And The Dollar Is More Attractive

InstaForex Analysis InstaForex Analysis 21.09.2022 12:24
The US currency is still holding steady, gaining momentum before the Federal Reserve meeting, which cannot be said about the European one. The latter tries to gain a foothold in the positions won, but these efforts often do not meet expectations. Constantly rising inflation and unstable geopolitical background keep market participants and world central banks in suspense. Recently, many of them expected the Fed to raise interest rates by 50-75 bps at the next meeting. However, now the situation has worsened, so traders and investors expect the rate to rise by 75 bps and higher, that is, by 100 bps. Market participants expect that the Fed will announce its final decision on the rate on Wednesday, September 21. According to preliminary estimates, it is expected to increase by 75 bps, up to 3-3.25% per annum. At the same time, the central bank will present macroeconomic forecasts, followed by a press conference by Fed Chairman Jerome Powell. Against this background, the markets are in suspense about the Fed's future strategy. According to analysts, the central bank will continue to raise interest rates until it gets inflation under control. At the moment, futures show the probability of a rate hike above 4% by the end of 2022, which implies a further increase at two meetings of the Federal Open Market Committee (FOMC), which are scheduled for early November and mid-December. Against this background, the pressure on the euro is increasing and the dollar's appeal as a protective asset is growing. On the morning of Wednesday, September 21, the greenback remained near a two-decade high against most currencies, primarily the euro. At the same time, the EUR/USD pair was trading at 0.9952, almost without going beyond the current range. According to analysts, the Fed's interest rate decision will set the tone in the financial markets for the coming months. At the moment, the topic of quantitative tightening remains in the focus of the markets' attention. Central banks are withdrawing liquidity from the financial system and reinvesting less and less of the income received from the repayment of state bonds. It should be noted that the Fed, whose balance sheet reaches $9 trillion, has reduced the volume of reinvestments by $47.5 billion per month, starting in June 2022. According to preliminary calculations, by the end of September, this figure will increase to $95 billion. Market participants expect the European Central Bank to take similar actions, that is, to reduce its balance sheet, which is 8 trillion euros. However, in this matter, the ECB also falls behind the American one. According to ECB President Christine Lagarde, at the moment the introduction of quantitative tightening is impractical. However, despite such statements, the central bank is expected to consider this issue at the next meeting, which is scheduled for October. Against this background, the euro has lost part of its gains. Unlike the greenback, it is difficult for the single currency to gain a foothold in the current positions. As a result, the euro is constantly slipping into a downward spiral. The situation was not changed even by decisive measures on the part of the ECB, which sharply raised rates (by 50 bps and 75 bps) at the last two meetings. Thanks to these steps, high inflation does not put too much pressure on the euro, analysts believe. However, the US central bank began to raise interest rates earlier than the European one, having gained a head start in this matter. Currently, the Fed is raising interest rates more aggressively than other central banks. As a result, a sharp increase in Fed rates contributed to a significant strengthening of the greenback, which continues to grow. At the same time, the rise in the price of USD exacerbates inflation in other countries, since the lion's share of international settlements is made in the US currency. In the event of a fall in other currencies against the greenback, imports in most countries sink, as goods denominated in dollars become more expensive. The noticeable strengthening of the US currency worsens the prospects for the global economy, experts emphasize. First of all, developing countries suffer from this, whose economic growth opportunities are severely limited. In addition, the strong USD and the global economic downturn have a negative impact on the income of American companies abroad. The further expansion of the global crisis is pushing the authorities of a number of countries to introduce measures to curb the dominance of the USD, experts summarize. Relevance up to 08:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/322242
The Euro Has A Limited Downward Potential

The Euro Has A Limited Downward Potential

InstaForex Analysis InstaForex Analysis 21.09.2022 12:31
H4 chart of EUR/USD The euro sank ahead of the FOMC meeting. Still, I think the currency is heading in the wrong direction. The thing is that the euro has limited downside potential. Moreover, it is already hovering at extreme lows. Any dovish hints from the US Federal Reserve at the meeting today could trigger a surge in the euro. Long positions could be considered at 0.9970 after a breakout through yesterday's high. Relevance up to 09:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322256
Gold Is No Longer A Tool Against Inflation

Gold Is No Longer A Tool Against Inflation

InstaForex Analysis InstaForex Analysis 21.09.2022 12:37
Gold has always been regarded as a tool against inflation. However, its continuous fall since the beginning of the year amid high consumer prices suggested the opposite. Quotes are clearly sensitive to the dynamics of real US Treasury yields, as well as to the fact that rates on 10-year inflation-protected debt have risen above 1%. Additional evidence of the bearish trend is the movement of gold futures, which, although separated from physical gold, is responsive to the dynamics of the global economy and monetary policy. Strong demand in China, accompanied by a 12-week ETF outflow, also contributed to the decline of ETFs to their lowest levels since January. Capital flows to gold ETFs The most serious headwind for gold is the increase of dollar recently. Since the metal is denominated in US currency (XAU/USD), the rally is negative for its rate. Dollar has been rising because of the Treasury yields, which reached their best dynamics lately. This signals a likely increase in federal funds rate, and this is not a favorable environment for the metal. But considering that investors are already expecting a 75 basis point rate hike this September, there is a chance that the volume of short positions will be little, which will result in a rebound in gold. After all, there are two inside bars in the daily chart, which allows pending orders to buy at $1680 and sell near $1659. The second option is preferable as the target price level is still $1,600. Another target is the 161.8% retracement level. Relevance up to 08:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322230
How Will The Divergence Of Interest Rates In The US And Japan Affect The USD/JPY Pair

How Will The Divergence Of Interest Rates In The US And Japan Affect The USD/JPY Pair

InstaForex Analysis InstaForex Analysis 21.09.2022 13:04
Tonight, the Federal Reserve will announce another increase in interest rates, and a few hours later, the Bank of Japan will make a statement. In anticipation of the climax, the USD/JPY pair shows volatility. What helps the dollar? The US central bank began a 2-day meeting on monetary policy on Tuesday. The long-awaited verdict on interest rates will be announced this evening. Most analysts predict that the central bank will raise the indicator by 75 bps again. There is also an opinion that the Fed may further strengthen its anti-inflationary campaign, since previous measures were ineffective. Recall that the latest data on inflation in the United States greatly disappointed the market. The August report published last week showed an insignificant slowdown in consumer price growth. Last month, inflation in America was 8.3% year-on-year, which is still significantly higher than the Fed's target of 2%. Given the disappointing statistics, some market participants began to incline to the fact that at the September meeting, the US central bank will begin to act more aggressively and raise rates by 100 bps. Increasing speculation on this topic dispersed ahead of the yield of 10-year US bonds. Yesterday, the indicator jumped to an 11-year high of 3.59%. The surge in profitability provoked a sharp positive dynamics of the dollar. The DXY index tested a 2-week peak at 110.27 on Tuesday. According to tradition, the greenback made the steepest ascent against the Japanese currency. On the first day of the Fed meeting, the USD/JPY asset was again above the 144 mark. The dollar also held steady at this level at the beginning of Asian trading on Wednesday. Additional support for the greenback was provided by expectations of a dovish speech by Bank of Japan Governor Haruhiko Kuroda. The BOJ's monetary policy report will be released tomorrow morning. Most experts predict that the Japanese central bank will maintain its ultra-soft monetary rate. In this case, the divergence in US and Japanese interest rates will increase even more, which will contribute to the further rally of the USD/JPY pair. What supports the yen? However, not all experts share optimism about the dollar-yen asset. There is an opinion that in the short term, the quote may face serious obstacles that will limit its growth. This is exactly what happened today towards the end of the Asian session. The USD/JPY pair turned sharply to decline and plunged below the 144 mark. Several factors put pressure on the dollar. One of them is another wave of speculation about a possible currency intervention. On Tuesday evening, the former head of the currency department of the Japanese Ministry of Finance Tatsuo Yamasaki said that the Japanese authorities will not wait for the green light from the United States and will resort to unilateral intervention when they see fit. "The exchange rate check initiated by the Bank of Japan last week means that the government is now ready to take action at any time. I do not see any serious obstacles to intervention, especially since Japan previously conducted almost all of its interventions unilaterally," he stressed. According to Yamasaki's forecast, Japanese politicians will press the button if another strong speculative movement of the yen occurs over the next few days. In addition to the growing risk of intervention, the pressure on the USD/JPY pair is now exerted by an unexpected increase in expectations regarding a possible change in the rhetoric of the BOJ. Of course, given Kuroda's previous dovish statements, no one expects him to suddenly change his shoes and move to the hawk camp. But we cannot rule out another option: the BOJ may well take a neutral position. The probability of such a scenario has increased dramatically in the light of the latest inflation data. According to the report of the Japan Statistics Bureau, the national consumer price index was 3% in August, which is higher than the forecast and the July value of 2.6%. In addition, the core inflation indicator, which excludes food and oil prices, also increased in August. It rose to 1.6% against 1.2% recorded a month earlier. As we can see, inflationary pressure in the country is growing, and it is increasingly difficult for the BOJ to ignore this problem and postpone its solution. Therefore, there is hope that this month the BOJ will still consider the option of switching to a neutral monetary policy. In this case, the yen may receive short-term support, and the USD/JPY pair will have another rollercoaster ride. Relevance up to 10:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/322268
The Situation In Ukraine And The Fed's Decision Strongly Affect The Currency Pairs

The Situation In Ukraine And The Fed's Decision Strongly Affect The Currency Pairs

InstaForex Analysis InstaForex Analysis 21.09.2022 13:14
Tension in markets has increased markedly. Investors are already aware that interest rates will rise by 0.75% to 3.25%, so they are trying to determine the overall impact to the US economy and global financial markets. Most likely, the effect will be negative as rates above 3% are definitely restrictive, affecting the income of businesses, industrial activity and employment. Rising interest rates will hit companies that have high debts first, which will lead to a slowdown in production and beginning of layoffs. In this situation, the stock market may sink deeper, and many companies and businesses will go bankrupt. Treasury yields will also increase, which will lead to a rise in the cost of servicing the public debt by the US government. In the event of geopolitical tensions, no rate hikes, even by the ECB, will ease pressure in the market. This is because dollar is a safe haven asset and a better option in the face of military conflict in the Euro area. Another supporting factor for dollar is the decreasing demand for stocks, which was also brought upon by the increase in rates and the desire of the Fed to actively raise them further. The situation will only change if, at the press conference, Fed Chairman Jerome Powell announces that further plans on interest rates will depend on the incoming inflation data. Stocks and other commodities, such as gold, will rally at that time, while dollar will fall. This is because a decrease in inflation will prompt the Fed to ease the pace of rate increases, and then stop it altogether. Forecasts for today: USD/CAD The pair is trading above 1.3370. If the conflict in Ukraine intensifies, demand for dollar will surge, which will lead to a growth towards 1.3500. AUD/USD The pair fell below 0.6675 because of the escalation of crisis around Ukraine. If the Fed raises rates by 0.75%, the quote will dip further to 0.6585. Relevance up to 09:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322248
How The Major Currency Pairs (EUR/USD AND GBP/USD) Look Like Today?

How The Major Currency Pairs (EUR/USD AND GBP/USD) Look Like Today?

InstaForex Analysis InstaForex Analysis 21.09.2022 13:55
EUR/USD Higher timeframes The situation is in favor of sellers as the pair continues to decline. The bearish sentiment will strengthen further if the psychological level of 1.0000 is broken and the quote heads under 0.9864. H4 - H1 The pair tested the support of S2 (0.9896) and moved towards the first target for the breakdown of the Ichimoku cloud in H4 (0.9897). It will continue to decline if the quote falls below 0.9864 and under 0.9837, which is the final support of the classic Pivot levels. The key levels today are resistances at the 0.9991 line (weekly long-term trend + central Pivot level of the day). *** GBP/USD Higher timeframes The pair closed below 1.1411 (2020 lows) yesterday. Most likely, the decline will continue, which will make the psychological support area of 1.0000 as a new benchmark. H4 - H1 Bearish players, having completed the next upward correction, are trying to go beyond the target level for the breakdown of the H4 cloud (1.1342). Key levels for a further decline are the support of the classic Pivot levels (1.1294 - 1.1231), while resistances are 1.1398 (central Pivot level) and 1.1440 (weekly long-term trend). The breakdown and consolidation above these levels are capable of changing the current trend. *** The following are used in the analysis above: Higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend) Relevance up to 11:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322280
AUD/USD – Federal Reserve Is Expected To Hike The Rate By 75bp Today, RBA Decides In October

AUD/USD – Federal Reserve Is Expected To Hike The Rate By 75bp Today, RBA Decides In October

Kenny Fisher Kenny Fisher 21.09.2022 14:08
The Australian dollar has edged lower today. Earlier, AUD/USD dropped to 0.6654, its lowest level since May 2020. Risk sentiment has soured after Russia announced that it is moving quickly to annex territories that it has captured in Ukraine. European leaders quickly denounced the move as a “sham”. An annexation would seriously escalate the conflict in Ukraine, as Russia could argue that any fighting in the annexed territory was an attack on sovereign Russian land. President Putin also ordered the mobilization of 300,000 reservists, an indication of how badly the campaign is going for Moscow. Fed poised to deliver 75bp increase All eyes are on the Federal Reserve which wraps up its policy meeting later today. The Fed is expected to hike by 0.75%, which would bring the benchmark rate to 3.25%. This move would be significant as rates would move above the neutral rate level of 2.5%, into restrictive territory. There is an outside chance that the Fed will raise rates by a full point, which would unnerve the markets and likely send the US dollar sharply higher. Aside from the rate hike, investors will be keenly monitoring the Fed’s latest quarterly forecasts for the economy. This will include projections for unemployment and interest rate levels. The Fed is expected to remain hawkish and argue that the price of higher unemployment and a further rise in rates is the painful but necessary price to rein in inflation. RBA says rates to increase The RBA minutes of the September meeting didn’t contain any surprises. The minutes reiterated the message that further rate hikes are coming, but the size of the hikes will be data-dependent. At the meeting, members argued over whether to raise rates by 25bp or 50bp – in the end, the Bank went for the latter option, bringing the cash rate to 2.35%. With no inflation or employment data prior to the October meeting, RBA members may again be split over how much to tighten. This should make for an interesting meeting that could trigger volatility from the Australian dollar. AUD/USD Technical AUD/USD has support at 0.6623 and 0.6523 There is resistance at 0.6769 and 0.6869   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar extends losses - MarketPulseMarketPulse
The Bank Of Japan Should Do The Opposite Of What Western Banks Are Doing

The Bank Of Japan Should Do The Opposite Of What Western Banks Are Doing

InstaForex Analysis InstaForex Analysis 21.09.2022 14:18
Today, the US Federal Reserve will finally announce its decision on interest rates and present new economic projections as well as the dot plot. On Wednesday morning, the futures market saw an 82% probability of a 75 basis point rate increase and an 18% chance of a hike by 100 basis points at once, which is in line with the earlier forecasts. Meanwhile, the greenback is edging higher but its upside potential is limited. During the day, demand for risk assets could increase as the Kremlin is preparing to hold a referendum in four partially occupied regions of Ukraine on joining Russia. This could trigger geopolitical jitters and change the course of the military confrontation. USD/CAD Inflation in Canada slowed to 7% in August from 7.6% in the previous month, beating economists' forecasts. Core inflation came at 5.8% versus 6.1% a month earlier. In this light, expectations of the hawkish Bank of Canada could ease, causing a drop in the loonie. The Canadian regulator will hold the board meeting in a week. Now there is a high probability of a more than 50 basis point rate rise. Otherwise, the Bank of Canada could choose to pause with tightening as the CPI, excluding food and energy prices, grew by 2.6% on a seasonally adjusted and yearly basis, the lowest rise since February 2021. In other words, with a slowdown in the inflation rate, the Bank of Canada could take some time – at least 5 weeks until the next meeting – to see how things unfold. The net long position on CAD dropped by 481 million in a week. CAD positioning is still bullish although bearish sentiment is increasing. Meanwhile, the fair value is rising. Last week, the target stood at the swing high of 1.3222, The quote broke through the barrier and approached the technical resistance level of 1.3335. The impulse is still strong and is unlikely to end any time soon. The new target is seen in the 1.3640/60 resistance zone. The price could approach the range already by the end of the week. USD/JPY In Japan, inflation hit 3% year-over-year in August, coming above market expectations. Still, Japan is not one of those countries that are now dealing with soaring inflation. Although the price of goods in the country accelerated by 5.7% year-over-year, the price of services saw an uptick of just 0.2% (49.54% of the whole index). This is due to a sluggish rise in wages and long-term prospects of decreasing internal demand amid the depopulation and aging of Japanese society. The Bank of Japan simply cannot set the same inflation target as in the West, given its significant structural differences. In other words, while other central banks, including the Federal Reserve and the ECB, are doing everything to tame inflation, the Bank of Japan should do the opposite. Therefore, the Japanese regulator will hardly change its stance on monetary policy. The Bank of Japan has recently checked to see how the yen is doing. It called dealers at commercial banks to find out about the current state of the foreign exchange market. The bank does this, expecting intervention from the government (the Minister of Finance), which is legally responsible for the country's exchange rate policy. Exchange rate checking serves a dual purpose. Firstly, it lets the market know that the government is ready to intervene. Secondly, it signals that the authorities are concerned about the speed of market change. Oftentimes, after such checks, the government intervenes to stabilize the yen, especially since the yield on 10-year bonds has been holding 1 point above the target (0.251%) for several days. In other words, intervention is the only thing that can be done. This is also a signal of an imminent inflow of liquidity. So, the yen is likely to deepen its weakening. The net short position on JPY is still increasing, with a weekly gain of 1.883 billion. The currency is likely to stay bearish, with the fair value above the long-term MA. In this light, short-term consolidation slightly below 145 is coming to an end and could be followed by a breakout above the mark. The psychologically important level stands at the next target of 147.71. Still, it could hardly be reached. The Federal Reserve's monetary stance is likely to be exactly the opposite of the Bank of Japan's in the long run. So, the yen will remain in a bear trend unless, of course, sudden geopolitical events change the balance of risk. Relevance up to 08:00 2022-09-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322234
Gold: Bulls Continue To Defend The Horizontal Support Level

Gold: Bulls Continue To Defend The Horizontal Support Level

InstaForex Analysis InstaForex Analysis 21.09.2022 14:28
Blue rectangle- support Black lines- Fibonacci retracements Gold price is trading around $1,673. Price tested once again the horizontal support around $1,655-60 and is now bouncing off of it. Bulls continue to defend the horizontal support level. This price action confirms the importance of the $1,655-60 support area. If broken we should expect Gold to plummet towards $1,600 and lower. Resistance is found around the recent highs at $1,779. The 38% Fibonacci retracement level at $1,684 is a possible target but if Dollar weakens and we should expect price to reach even the 61.8% Fibonacci level around $1,700. Relevance up to 13:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293646
The US Dollar Price Will Still Be Inside The Bullish Channel

The US Dollar Price Will Still Be Inside The Bullish Channel

InstaForex Analysis InstaForex Analysis 21.09.2022 14:36
Red lines- bullish channel Blue line- bearish RSI divergence The Dollar index ahead of the FOMC meeting later today, is making new 2022 highs. The RSI continues to provide bearish divergence warning signals. This implies that the up trend is weakening. It is not a reversal signal. It is a warning. That is why traders need to be very cautious. Technically trend remains bullish as price remains inside the upward sloping channel. However it is justified to see a bigger than usual pull back at least towards 106. Will the trigger be today's FOMC? Traders need to remain patient. Even a pull back towards 106 will not cancel the bullish medium-term trend we are in. Price will still be inside the bullish channel. Read more: https://www.instaforex.eu/forex_analysis/293648 Relevance up to 13:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293648
US Dollar (USD) And Fed Decision: ING Economics Team Thinks 75bp Rate Hike Is Enough

US Dollar (USD) And Fed Decision: ING Economics Team Thinks 75bp Rate Hike Is Enough

ING Economics ING Economics 21.09.2022 10:58
So here we are. Another FOMC meeting, and another 75bp hike. But there is a rump going for 100bp, so 75bp could be positive for risk assets (albeit briefly). The dot plot will be watched, as the terminal rate is key for where market yields peak. A 75bp hike takes the effective funds rate up to 3.08%, but leaves the Fed with more to do as the 2yr heads for 4%. Expect a 75bp hike, although there is a rump positioned for 100bp Ahead of the Federal Open Market Committe (FOMC) meeting there has been some market flows positioning for a 100bp hike, but the dominant discount as we head into the meeting is for 75bp to be delivered. A 100bp hike would be an over-reaction, in our view, while 75bp would be enough to solidify a market discount that is already projecting a terminal funds rate north of 4.25%. Chair Powell's Humphrey-Hawkins testimony followed by a re-acceleration in core CPI inflation has been enough to push the market discount up by some 100bp in the space of a month. At this juncture the Fed does not need to do much more than deliver the 75bp hike, and maintain a hawkish bias. The Fed does not need to do much more than deliver the 75bp hike The dot plot will be important, but not critical, as the dots do move over time. We think the median dot will print above 4% for 2022 (to be read as end year), and the Fed may well choose to keep it above 4% for 2023. The Fed's dot plot does print a longer-run rate at 2.5%, which is deemed to be their neutral rate, and is broadly where the funds rate is now. So the 75bp hike, when delivered, moves the policy rate into a tightening stance for the first time in this cycle. The calls for 100bp area partly premised on the notion of pitching the funds rate 1% tight versus neutral in one go. But 75bp also tightens policy reasonably aggressively, and avoids unnecessary market consternation with respect to future intentions. The Fed's message is finally delivering tighter financing conditions Source: Refinitiv, ING The terminal funds rate remains key for the bond market Beyond this meeting, where the funds rate peaks is critical for pitching bond yields. Once the funds rate is hiked, the new reference for market rates is north of 3% (with the effective fund rate set to settle at 3.08%). A similar hike in November would then have the ceiling at 4%, an area that the 2yr Treasury yield is currently targetting. History shows that the 2yr will anticipate moves in the funds rate well in advance, but as we get towards the end of the rate hiking cycle, reaction from the 2yr yield becomes smaller. Based off the price action of the past few weeks we are not quite there yet. But if the funds rate peaks at 4.25% to 4.5%, we'd be surprised if the 2yr yield were to get much above 4.25%. Further out the curve the 10yr yield has more capacity to trade through the funds rate sooner than the 2yr. This is typical as the curve has moved into a state of inversion. In that sense longer tenor rates are being pulled higher by higher short tenor rates at this stage of the cycle. This is the opposite to what happened before rate hikes were discounted, as the curve steepened from the long end. Now the long end is waiting for the funds rate to come up and hit it. From there, likely around the 2 November meeting, the 10yr can trade flat to the funds rate (at around 3.75%, or slightly higher), and that would anticipate a peak in the fund rate at around 4.25% (actually 4.33%). Right now the Fed does not want any focus on a rate hike discount Once the peak in the fund rate is in with a reasonable degree of certainty, the 10yr can free itself from the shackles of terminal rate uncertainty, and can begin to trade well through the funds rate (anticipating cuts). Right now the Fed does not want any focus on a rate hike discount, but in fairness the market will tend not to aggressively discount a top until it actually sees it. This is where the value of a hawkish tone comes to the fore, as it helps to sustain that link with upward pressure on market rates generally. That said, with the 10/30yr spread now on the verge of inversion, expect any future peaking and fall in market rates to come earliest from the 30yr. The Treasury 10s30s slope is on the verge of inversion Source: Refinitiv, ING Today's events and market view Italy will exchange short-end bonds for issues in the 10Y and 15Y sectors worth up to €2bn. Germany will auction €4bn 10Y bonds. Austria mandated a new 4Y bond yesterday, which should be today's business. Luis de Guindos is the only European Central Bank official on the schedule. Both UK CBI prices and orders are expected to decline in September.. The FOMC meeting this evening looms large in an otherwise quiet session. The tone of the conference and quarterly economic and rates projections will be closely watched to shape future hike expectations. The thought leadership taken by the Fed, and the continued dollar rally, mean read-across to other rates markets is even greater than usual. Ahead of the FOMC, US releases to watch will comprise mortgage applications and existing home sales. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EUR/CHF To Go Down? Swiss National Bank Decides On Interest Rate On Thursday!

EUR/CHF To Go Down? Swiss National Bank Decides On Interest Rate On Thursday!

ING Economics ING Economics 21.09.2022 15:23
The Swiss National Bank holds its quarterly monetary policy meeting on Thursday and is expected to hike its policy rate by around 75bp to 0.50%. The SNB has also been using FX policy to fight inflation. We think the SNB will continue to guide EUR/CHF lower at a rate of around 5-7% a year, in order to keep its real exchange rate stable A stable real exchange rate requires a lower EUR/CHF Since June, the SNB has been very clear: after years of fighting deflation, inflation is currently considered too high and the SNB wants to react by raising its interest rate. Inflation reached 3.5% in August, well below the inflation rate of neighbouring countries but above the SNB's target of between 0% and 2%. Since the SNB is no longer fighting an overvalued exchange rate, but rather believes that a strong Swiss franc is favourable, it can now raise interest rates quickly, without necessarily following the ECB's moves. This is why it moved ahead of the ECB by raising rates by 50 basis points in June. There is little doubt that the SNB will raise rates by at least 75 basis points at Thursday's meeting. A 100 basis point hike like the Riksbank did is not out of the question, especially since the SNB only meets once every quarter, unlike other central banks. However, with inflation "only" at 3.5% in Switzerland and the strength of the Swiss franc allowing imported inflation to fall, 100 points might be a bit too much of a move, so a 75 basis point hike remains more likely. Turning to FX matters, EUR/CHF has come steadily lower since June. Driving this trend have been some key statements from the SNB that (i) it wants to keep the real exchange rate stable and (ii) it will intervene on both sides of the FX market. In practice, we think that means the SNB wants to manage EUR/CHF lower. At the heart of the story is a more hawkish SNB and its view that as a small, open economy a weaker real exchange rate is inappropriate right now in that it would be providing additional stimulus at a time when CPI is overshooting its close to, but not over 2% target. What does a stable real exchange rate mean in practice? In the case of Switzerland, where inflation amongst its trading partners is running nearly 5% higher than in Switzerland, it means that a nominal 5% appreciation of the trade-weighted exchange rate is required to keep the real exchange rate stable. Rather conveniently, as we show in our chart below, the recent bout of Swiss franc strength leaves the trade-weighted Swiss franc around 5% stronger on a year-on-year basis. Not being a member of the G20 grouping allows Switzerland a little more latitude with its FX practices. And the above analysis suggests the SNB may be running a managed float here. With huge FX reserves of close to CHF900bn, the SNB remains a major force to be reckoned with and has the firepower to back up this managed float. Hence the remarks from the SNB in June that it planned to intervene on both sides of the market. Like the Czech National Bank (CNB), the SNB has previously experimented with FX floors, but the managed float underway today is more akin to activity undertaken by the Monetary Authority of Singapore (MAS) which more formally uses a managed float in its monetary toolkit. CHF: Real exchange rate stable YoY, nominal exchange rate +5% YoY Source: SNB, ING forecasts What does this mean for EUR/CHF? Away from the arcane concept of a real or nominal trade-weighted Swiss franc, what does this all mean to the more familiar EUR/CHF? First, it is important that the two biggest weights in the trade-weighted Swiss franc are: (i) the euro at 51% and (ii) the dollar at 23%. If the SNB wants a stronger trade-weighted Swiss franc then clearly EUR/CHF and USD/CHF are going to have to play their parts. Secondly, we have said that the SNB wants to keep the real CHF stable. In the chart above, we present our inflation forecasts, which show the inflation differential staying at around 5% into 2Q23 and only dropping back to zero by end 23. The argument then is that the SNB continues to manage the Swiss trade-weighted index firmer at this 5% year-on-year rate into next Spring before slowing the pace of appreciation. Thirdly, there are many moving parts in the trade-weighted exchange rate, but crucially our stronger dollar view means that USD/CHF may not come lower as the SNB wishes. This places a greater burden on the adjustment in EUR/CHF. Assuming USD/CHF stays flat, EUR/CHF would need to fall at around a 7% per annum rate to get the trade-weighted CHF stronger by 5%. Bringing it all together – and assuming that the SNB has the wherewithal to control EUR/CHF – we can argue that to achieve its objective of keep the real exchange rate stable according to our inflation forecasts, the SNB could be managing EUR/CHF on something like the following path… 4Q22 0.93, 1Q23 0.92, 2Q23 0.91 and flat-lining near 0.90 in 2H23. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
USD/JPY: Bank Of Japan Meets Holds A Meeting On Thursday, But A Change In Monetary Policy Is Not Expected

USD/JPY: Bank Of Japan Meets Holds A Meeting On Thursday, But A Change In Monetary Policy Is Not Expected

ING Economics ING Economics 21.09.2022 15:23
USD/JPY continues to show limited movement this week. In the North American session, USD/JPY is trading at 144.10, up 0.27%. BoJ unlikely to change policy The Japanese yen has depreciated by over 20% this year, and the yen’s slide will be high on the agenda at the Bank of Japan’s meeting on Thursday. We could see some strong rhetoric expressing deep concern about the yen, but the central bank has stayed on the sidelines during the yen’s long slide and I don’t expect that to change. The BoJ is committed to its ultra-accommodative policy, in order to boost Japan’s weak economy. Inflation has been rising, but Governor Kuroda has said he won’t tighten policy until it’s clear that inflation is sustainable, which would mean solid wage growth. There have been some rumblings about currency intervention by Tokyo, and the yen received a short boost in the arm earlier in September, after a report that the BoJ had conducted a rate check, which could have been a prelude to intervention. Japan hasn’t taken such a drastic move since 2011 and would require the consent of the G-20 to do so. As part of its loose policy, the BOJ has been very firm with its yield curve control, and the yen has borne the brunt of this policy, as the US/Japan rate differential continues to widen. With the Federal Reserve poised to raise rates by 75 or even 100 basis points later today, the outlook for the yen appears grim. The markets are anxiously awaiting the Fed’s rate announcement, as well as the Fed’s quarterly economic forecast. This will include projections for unemployment, inflation and interest rate levels. If Fed Chair Powell’s message is ‘higher for longer’ with regard to rate levels, investors could respond by sending the US dollar higher. USD/JPY Technical There is resistance at 144.71 and 146.49 USD/JPY has support at 143.19, followed by 141.88 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen steady ahead of Fed, BoJ - MarketPulseMarketPulse
Forex: How Could BoJ's Moves Affect USD/JPY (US Dollar To Japanese Yen)?

Forex: How Could BoJ's Moves Affect USD/JPY (US Dollar To Japanese Yen)?

FXStreet News FXStreet News 21.09.2022 16:13
With the rate differential widening, there is little room for USD/JPY slides. The Bank of Japan is widely anticipated to maintain its monetary policy unchanged. USD/JPY is in a consolidative phase near a two-decade high of 144.98. Following the US Federal Reserve’s policy announcement, it will be the turn of the Bank of Japan to decide on its monetary policy. Against the tide, the BOJ is widely anticipated to maintain the status quo, leaving rates at record lows of -0.1% and the yield curve control policy on hold. The latter means the central bank will continue unlimited bond purchases to keep the yield on the 10-year government bond around 0%. Finally, the central bank is expected to confirm the end of its special coronavirus financing program in September, as previously announced. The Japanese central bank´s strategy to maintain inflation at 2% stopped working five months ago. According to official figures, the annual inflation rate rose by 3% in August from 2.6% in the previous month. The Consumer Price Index rose for twelve consecutive months, and while it remains far below that of its major counterparts, the global pressure points to a further upside. As Japan is a net energy importer, the Russian conflict is also causing an increased trade deficit in the country. As a result of this situation, the Japanese yen plunged to a two-decade low against its American rival. However, there are null chances the BOJ will suddenly change course and decide on quantitative tightening. Formal intervention in the making? There is, however, one caveat. Bank of Japan Governor Haruhiko Kuroda has reportedly conducted a foreign exchange check, which somehow opens the door for formal intervention. The central bank meeting could be the perfect time to announce a measure in that direction The imbalance with all other central banks is likely to keep USD/JPY on its way up, although an unexpected tightening could result in the pair plummeting hundreds of pips. Nevertheless, and as long as the rate differential keeps widening, the pair will likely continue to reach record highs. USD/JPY possible reactions The USD/JPY pair has been consolidating gains after reaching 144.98 on September 7, without technical signs of long-term bullish exhaustion. Should policymakers hint at some form of tightening, there’s still little room for the JPY to add. Market players would need action to react to the event rather than promises. The base of the latest range is the 141.50 price zone, a potential bearish target should Japanese policymakers drop the yield curve control or unexpectedly hike rates. A break below the level could trigger large stops and result in USD/JPY nearing the 140.00 figure. Formal intervention could also take its toll on USD/JPY, although the potential slump will depend on the measures announced. The impact of the latter could be short-lived. On the other hand, an on-hold decision could take the pair beyond the aforementioned two-decade high.
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US Dollar: Fed Is Like A Super Fast Ferrari - You're Not Sure, Where Is The Limit!

ING Economics ING Economics 21.09.2022 23:10
The Federal Reserve met expectations and hiked rates 75bp. With inflation proving to be far stickier than imagined, the Fed repeated that activity needs to slow much more with the door left wide open for a fourth consecutive 75bp hike in November. With recession looking virtually impossible to avoid, we see a strong chance of policy reversal later in 2023 Source: Shutterstock A very hawkish 75bp The Federal Reserve has hiked the Fed funds target range to 75bp in what was a unanimous decision and upped its forecasts for rate hikes aggressively. Year-end 2022 Fed funds is now expected at 4.4%, above the 4.2% rate implied by futures contracts ahead of this update, signalling the strong likelihood of another 75bp in November with a further 50bp or possibly even a fifth consecutive 75bp on the cards at the December Federal Open Market Committee (FOMC) meeting. It is important to note that there is a strong clustering within the dot-plots, showing all FOMC members are on board with this more hawkish narrative. More tightening is signalled for 2023 with the year-end rate at 4.6%, before it moves lower to 3.9% for 2024, 2.9% in 2025 with the longer run prediction remaining at 2.5%. To underscore the Fed's willingness to sacrifice growth to get inflation lower it has cut 4Q 2022 year-on-year GDP growth to 0.2% from 1.7% with 2023 cut to 1.2% from 1.7%. Core PCE is also revised up 0.2 percentage points to 5.4% for 2022 and 2023 is now 3.1% vs 2.7%. The Fed is effectively acknowledging that a recession is coming, but inflation will not fall quickly and there will be a lot of pain. Note the unemployment rate for next year is expected to reach 4.4% versus the current 3.7% and stay there through 2024 with only a very minor drop in 2025. The accompanying statement barely has any changes in it versus the one published in July – just a minor tweak regarding near-term “modest growth”. Federal Reserve forecasts September versus previous June predictions Source: Federal Reserve, ING Another 75bp in November with 50bp minimum in December Inflation has been stickier than the Federal Reserve expected and certainly more broad-based. To get it down the economy needs to run below potential, bringing demand into better balance with supply capacity. The only way the Fed can do that is to hike rates and keep policy restrictive until that is achieved. Given the Fed’s aggressive stance and the likelihood that inflation moves little over the next month while job creation remains firm, we expect the Fed to hike 75bp for a fourth consecutive time at the November 2nd FOMC meeting. Come the December FOMC meeting we are more hopeful that we will see clearer signs of moderating price pressure on the lead indicators, but we are also fearing weaker activity data that may be enough to convince the Fed to move more cautiously. 50bp is our call, which would leave the target range at 4.25-4.5%, but we certainly can't dismiss the possibility of a fifth 75bp hike. We still favour rate cuts as a theme for 2023 The Fed clearly disagrees, with the dot plot chart implying at least 11 FOMC members project higher rates in 2023, but we think December will mark the peak. On the inflation front there are encouraging signs on both market and household inflation expectations, and also corporate price plans which suggest inflation may not be as embedded as some in the market fear. Long-term price expectations have returned to what we might term “normal”, suggesting fears of a 1970s wage-price spiral are misplaced and there is confidence the Fed will indeed get inflation down. Meanwhile, the National Federation of Independent Businesses reported that the proportion of companies looking to raise prices over the next three months fell from 51% in May to 32% in August. This is a sizeable turn which, given the strong relationship with CPI over the past 40+ years, offers a signal that inflation rates could soon start to slow. As for the activity side, the geopolitical backdrop, the China slowdown story, the potential for energy rationing in Europe, the strong dollar, and fragile-looking domestic equity and housing markets point to clear recession risks. A more aggressive Federal Reserve rate hike profile and tighter monetary conditions will only intensify the threat. Remember too that shelter is the largest component of CPI and tends to lag behind swings in house prices by around 12-16 months. A housing downturn could have a dramatic impact on inflation in the second half of next year. Despite the hawkishness of the Fed today, the market is tentatively pricing in nearly 50bp of rate cuts in 2023. We think the Fed could swing aggressively to policy easing in 2H 2023. The average period of time between the last rate hike in a cycle and the first Federal Reserve rate cut has averaged just six months over the past 50 years. Given the risks to growth and the potential for lower inflation, we are forecasting rate cuts throughout the second half of 2023 with our best guess for where the Fed funds rate ends the year being 3-3.25% – more than 100bp below where the Fed is indicating. Market rates under pressure higher, chasing a higher terminal rate The big impact move was in the 2yr, which shot up to 4.1% post the hike, a full 10bp move. The elevated median dots for 2022 and 2023 were the dominant driver here, and especially the 2023 median dot which is now closer to 5% than to 4%. There is also a messaging there for the market that the Fed intends to maintain a tightening trajectory beyond the end of 2022 and into 2023, as least as telegraphed from the dots themselves. The 10yr yield now needs to consider a path towards 4% The 10yr yield now needs to consider a path towards 4% in the coming couple of months. History shows that the 10yr rarely trades more than 50bp through the funds rate before the Fed has peaked. And note that 50bp through is the exception. A more normal discount would be to see the 10yr 25bp through the funds rate ahead of a confirmed peak from the Fed. Real rates have come under rising pressure as inflation expectations managed to ease lower post the hike. This is good from the Fed's perspective. Higher real rates are required in order to tighten financial conditions, while an easing in inflation expectations tells us that the market ultimately expects the Fed to see inflation fall. The thing is, the case for big falls in inflation has yet to be proven. The dot profile points to rising official rates in 2023, and muddies the waters for the prognosis of falling market rates into the turn of the year. But if we are right and the Fed does in fact peak by year-end, then that fall in market rates anticipated through December/January is very much back on. FX Markets: Bracing for the descent The FOMC’s projections are very telling for global FX markets in that while the Fed has cut growth and raised unemployment forecasts the Fed wants to convey the message that inflation will still be higher than previous forecasts and that the policy rate could be as high as 4.60% by the end of 2023. Understandably this undermines Fed ‘pivot’ ideas still further and sees the FX market biased towards slow-down and recession. This playbook really favours the dollar over pro-cyclical currencies. Investors will therefore be in no hurry to quit the most liquid FX reserve currency – and one that pays 3.3% on one-month deposits – at a time of escalating war in Ukraine. In addition, comparisons to the early 1980s Paul Volcker period remain, when the Fed needed to take the US economy into recession to get inflation under control. The dollar soared during this period.  Further strength in the dollar will see trading partners respond as much as they can. The ECB is ‘attentive’ to EUR/USD weakness but is never going to be able to match the 4%+ Fed policy rates coming our way. Unlike the US economy, the eurozone went into this crisis with a negative output gap. EUR/USD has today traded to a new low for the year. After some profit-taking on EUR/USD short positions and given events in Ukraine, it is hard to rule out a further grind towards 0.95 over coming months. More pressing is USD/JPY which is again closing in on 145. Japanese authorities remain close to pulling the trigger on FX intervention. And we have a BoJ meeting early tomorrow. No change is expected from the dovish BoJ – but a tweak to the BoJ’s 10-year JGB target (0-0.25%) and intervention would certainly catch the market unawares. We think USD/JPY traded volatility is too cheap. Elsewhere, we think the Swiss franc can out-perform in Europe. And further inversion of the US yield curve can continue to weigh on commodity currencies and EM in particular over the coming months. Unsupportive for EMFX is the continued decline in the Chinese renminbi. On a trade-weighted basis this has fallen 3% since the summer and with USD/CNH now well through 7.00, the 2019/2020 highs of 7.20 come firmly into view. One final remark, tighter liquidity worldwide means higher FX volatility. So, forget FX carry trade strategies this autumn. Read this article on THINK TagsUSD US Recession Interest rates Federal Reserve Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
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Forex: Euro To USD (EUR/USD) - Technical Analysis - 21/09/22

InstaForex Analysis InstaForex Analysis 21.09.2022 23:55
  Overview : The US dollar's strong gains against the Euro have continued today ahead of the sturdy news. The common currency reached a high of more than three days earlier this morning. This technical analysis of EUR/USD looks at the one-hour chart. The highest price that EUR/USD reached for that period was 0.9961 (last bullish wave - top). The lowest price that the EUR/USD pair reached during that period was 0.9845 (right now). The bias remains bearish in the nearest term testing 0.9800 or lower. Immediate support is seen around 0.9800. A clear break below that area could lead price to the neutral zone in the nearest term. Price will test 0.9750, because in general, we remain bearish on Sept. 21st, 2022. Yesterday, the market moved from its top at 0.9961 and continued to drop towards the top of 0.9814. Today, on the one-hour chart, the current fall will remain within a framework of correction. However, if the pair fails to pass through the level of 0.9961 (major resistance), the market will indicate a bearish opportunity below the strong resistance level of 0.9961 (the level of 0.9961 coincides with tha ratio of 38.2% Fibonacci retracement). The EUR/USD pair settled below 0.9961 and is testing the support level at 0.9800. RSI and Moving averages continue to give a very strong sell signal with all of the 50 and 100 EMAs successively above slower lines and below the price. The 50 EMA has extended further below the 100 this week. Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength below the moving average (100) and (50). An alternative scenario is a final consolidation below MA 100 H1, followed by growth arund the area of 0.9905. The one-hour chart favors a downward extension, as the pair broke below its 50 and 100 EMAs, both gaining downward traction. Support from MAs comes initially from the value zone between the 50 and 100 EMAs. Industriously, Euro Is Losing ground against U.S. Dollar around +175 pips. Since there is nothing new in this market, it is not bullish yet. Sell deals are recommended below the level of 0.9961 with the first target at 0.9814 so as to test the double bottom. If the trend breaks the double bottom level of 0.9814, the pair is likely to move downwards continuing the development of a bearish trend to the level of 0.9750 in order to test the weekly support 2. According to the previous events the price is expected to remain between 0.9905 and 0.9750 levels. Sell-deals are recommended below the price of 0.9905 with the first target seen at 0.9814. The movement is likely to resume to the point 0.9750. The descending movement is likely to begin from the level 0.9750 with 0.9725 and 0.9700 seen as new targets in coing hours. On the other hand, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1 USD. Relevance up to 22:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293692
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GBP/USD (British Pound To US Dollar) - Technical Analysis - 21/09/22

InstaForex Analysis InstaForex Analysis 21.09.2022 23:57
  Overview : The GBP/USD pair dropped from the level of 1.1427 to the bottom around 1.1236. But the pair has rebounded from the bottom of 1.1236 to close at 1.1264. Today, the first support level is seen at 1.1236, and the price is moving in a bearish channel now. Furthermore, the price has been set below the strong resistance at the level of 1.1427, which coincides with the 38.2% Fibonacci retracement level. This resistance has been rejected several times confirming the downtrend. Additionally, the RSI starts signaling a downward trend. As a result, if the GBP/USD pair is able to break out the first support at 1.1236, the market will decline further to 1.1200 in order to test the weekly support 2. The pair will probably go down because the downtrend is still strong. Consequently, the market is likely to show signs of a bearish trend. The strong resistance is seen at the level of 1.1861 because it represents the weekly resistance 1. Equally important, the RSI and the moving average (100) are still calling for a downtrend. Therefore, the market indicates a bearish opportunity at the level of 1.1236 in the H1 chart. So, it will be good to sell below the level of 1.1236 with the first target at 1.1200 and further to 1.1150. This would suggest a bearish market because the RSI indicator is still in a negative area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 0.9953 in order to test the second support (0.9900). The US Dollar and the Euro are two of the most prominent and well-known currencies in the world. The Euro versus US Dollar (EUR/USD) currency pair has the largest global trading volume, meaning it is the world's most-traded currency pair. Whether you find the instrument easy or difficult to trade on, it's not a pair that many traders neglect, due to its daily volatility and price movement. At the same time, the breakup of 1.1427 will allow the pair to go further up to the levels of 1.1486 in order to retest the weekly resistance 2. Always remember that the market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Forecast (GBP/USD) : The volatility is very high for that the GBP/USD is still moving between 1.1354 and 1.1150 in coming hours. Consequently, the market is likely to show signs of a bearish trend again. Hence, it will be good to sell below the level of 1.1300 with the first target at 1.1200 and further to 1.1150 in order to test the daily support 2. However, if the GBP/USD is able to break out the daily support at 1.1427, the market will rise further to 1.1486 to approach support 2 next week. Conclusion : Downtrend scenario : On the downside, the 1.1427 level represents resistance. The next major resistance is located near the 1.1427, which the price may drift below towards the 1.1427 resistance region. The breakdown of 1.1236 will allow the pair to go further down to the prices of 1.1200 and 1.1150.   Relevance up to 23:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293694
Further Downside Of The AUD/JPY Cross Pair Is Expected

The Price Of The Australian Dollar To US Dollar Pair Is Falling In The Negative Area

InstaForex Analysis InstaForex Analysis 22.09.2022 08:00
The Australian dollar now and in the coming days will be in the weakest position against European currencies, as amid a general strengthening of the US dollar, commodity and stock markets are declining. Oil in the last two days has fallen in price by 2.35%, copper has lost 2.04% over the same time, the S&P 500 stock index -2.82%. The price is approaching the target level of 0.6565 on the daily chart, its breakthrough will open the way to the underlying level of 0.6515. The Marlin Oscillator of the daily scale is going down, it has an oversold zone ahead of it. A slight price correction from the nearest level of 0.6565 is possible, or a larger one from the level of 0.6515. The price is in a completely downward position on the H4 chart - the price is falling below both indicator lines, the Marlin Oscillator is falling in the negative area. Relevance up to 05:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322351
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

Could There Be A Corrective Increase In The British Pound After The BoE Meeting?

InstaForex Analysis InstaForex Analysis 22.09.2022 08:06
As a result of yesterday, when the Russian President announced the mobilization of 300,000 military from the reserve (the number may be reduced depending on the situation in Ukraine) and the Federal Reserve raised the rate by 0.75%, the British pound lost 109 points. The Bank of England will hold a meeting today, and the rate can also be raised by 0.75%. The change in the rate is significant, and it can stop, or even turn the pound rate into a correction. From a purely technical point of view, we expect the support price to work out at 1.1170, then convergence with the Marlin Oscillator and recovery to 1.1385 is likely. Consolidating below 1.1170 is undesirable for the pound, as it will lose market support and will fall until investors get tired of selling (the target at 1.0830 is a technically powerful support for higher timeframes). The price is completely in a downward position on the four-hour chart, but here, too, the price is converging with the Marlin Oscillator. We are waiting for the BoE meeting and look forward to corrective growth of the British pound.   Relevance up to 05:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322353
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The EUR/USD Pair: The Price Continues To Decline

InstaForex Analysis InstaForex Analysis 22.09.2022 08:12
After the euro's decline by 134 points yesterday, the price continues to decline under the target level of 0.9850 in today's Asian session. The inertial decline may continue to the level of 0.9752, from which we expect a reversal into a correction. Correction from 0.9752 on the technical side may be due to the emerging extended convergence with the Marlin Oscillator. It also appears on the weekly chart. If the price still manages to consolidate under 0.9752, then the euro is waiting for the underlying levels of 0.9692 and 0.9625. In the long term, we look at the euro's fall to the levels of the winter 2002 area, to the 0.8600 area, which would correspond to a Fibonacci reaction level of 200.0% on the monthly scale chart. The price has consolidated below 0.9850 on the 4-hour chart, Marlin is in the negative area, but is already making the first attempts to slow down this decline. We are waiting for the price at the target level of 0.9752.   Relevance up to 05:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322355
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

The EUR/JPY Pair Confirm Renewed Downside Pressure

InstaForex Analysis InstaForex Analysis 22.09.2022 08:18
EUR/JPY has broken below minor support at 142.30 to confirm renewed downside pressure towards the 131.69 target. In the short term, we could see EUR/JPY retest and even slightly break back above the former support at 142.30 but it should be a short-lived break as the pressure is to the downside for a continuation lower in wave C/ of 2/ towards 131.69 to complete the correction in wave 2/ and set the stage for a new impulsive rally. Remember that's only when the ongoing correction is complete near 131.69.   Relevance up to 06:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293736
GBP: Strong June Retail Sales Spark Sterling Rally

How The Pound To Japanese Yen (GBP/JPY) Pair Look Like Today?

InstaForex Analysis InstaForex Analysis 22.09.2022 08:22
GBP/JPY continues to move lower towards support near 160.00. A break below here will add downward pressure for a move closer to the 38.2% corrective target at 154.41. It's possible that the ongoing correction will be able to move closer to the 50% corrective target at 150.09 before the correction is finally complete. However, as always we need to take the final move lower in baby steps as we could see the final low near 154.41 and see the next impulsive rally start from there. Relevance up to 06:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293738
The EUR/USD Price May Fall Under 1.0660

The EUR/USD Pair Outlook For The Bears Remains Very Good

InstaForex Analysis InstaForex Analysis 22.09.2022 08:26
EUR/USD 5M The EUR/USD pair sharply resumed its downward movement on Wednesday and dropped to the lower border of the 0.9877-1.0072 horizontal channel. This border was even overcome, that is, the pair again updated its 20-year lows. Moreover, all this happened even before the announcement of the results of the Federal Reserve meeting, which we deliberately do not consider now, since the market needs to be given time to fully work them out. Moreover, in any case, traders had to leave the market before the announcement of the results, since we do not recommend trading in the evening and at night. During the day, there were no important events either in the US or in the European Union, so we can't immediately explain the euro's new fall at first glance. However, at a second glance, everything is clear. In the morning, Russia announced a partial mobilization to participate in the military conflict in Ukraine. In the evening, rallies against mobilization were held throughout Russia, but it is clear to everyone that the geopolitical situation in Ukraine may worsen in the near future. And if geopolitics worsens again, then the euro and the pound again fall into the risk zone, since the dollar is in high demand in such situations. It should be noted right away that the Kijun-sen line fell to the level of 0.9967 during the past day, and it was from this level that the price rebounded during the European trading session. Therefore, the first sell signal was formed at the very beginning of the downward movement. Subsequently, the price overcame the level of 0.9945, and it was also possible to open short positions on this signal. As a result, by the middle of the US session, the quotes dropped to the level of 0.9877, where it was necessary to close positions in profit of about 65 points. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not give any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 22. Lagarde speech: "water" on "water". Overview of the GBP/USD pair. September 22. New geopolitical tensions in Ukraine, partial mobilization in Russia. Forecast and trading signals for GBP/USD on September 22. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The outlook for the bears remains very good on the hourly timeframe. Summing up the results of the Fed meeting and analyzing the final reaction of the market should be done only in the late afternoon, so we do not consider the movements that happened last night. However, in any case, the global downtrend persists, so the euro may update its 20-year lows more than once this year. We highlight the following levels for trading on Thursday - 0.9877, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (1.0031) and Kijun-sen lines (0.9958). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. Not a single important event is planned in the European Union and the Untied States on September 22. But even if they were, the market would hardly pay attention to them, since, most likely, it will be busy working out the results of the Fed meeting. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     search   g_translate     Relevance up to 02:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322343
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

The GBP/USD Currency Pair Resumed Its Downward Movement

InstaForex Analysis InstaForex Analysis 22.09.2022 08:32
GBP/USD 5M The GBP/USD currency pair also resumed its downward movement on Wednesday and confidently broke through its 37-year lows, updating them. As in the case of the euro, the news about the mobilization in Russia turned out to be decisive, which automatically means a future new round of escalation of the conflict in Ukraine. Naturally, the risky currencies, which include the euro and the pound, immediately fell, without even waiting for the results of the Federal Reserve meeting. Now the pound may fall due to geopolitics, as well as due to the two meetings of the central banks and the decisions that will be made at them. If a few weeks ago we were already ready for the downward trend to end, now we would say that the pound can fall as low as you like. We are not considering the results of the Fed meeting now, as it is necessary that the market fully work them out and take them into account. As we have already said, it is not the results themselves that are important for traders, but how the market reacts to them, how it interprets them. There were only two trading signals on Wednesday. First, the pair overcame the level of 1.1354, and then rebounded from it from below. At that time there was not a single target below the level of 1.1354, so in any case, short positions should be expected to be closed manually. The first position could be closed by Stop Loss at breakeven, the second – at a profit of about 30 points. The result is not bad, since the price was in an open flat during most of the European and US trading sessions. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group closed 11,600 long positions and opened 6,000 shorts. Thus, the net position of non-commercial traders decreased by another 17,600, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new fall, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its decline has completely resumed and multi-year lows are updated almost every day, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 109,000 shorts and 41,000 longs open. The difference is again almost threefold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, one should not forget about the high demand for the US dollar, which also plays a role in the fall of the pound/dollar pair. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 22. Lagarde speech: "water" on "water". Overview of the GBP/USD pair. September 22. New geopolitical tensions in Ukraine, partial mobilization in Russia. Forecast and trading signals for EUR/USD on September 22. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair only spent a couple of days in a formal flat on the hourly timeframe. Now it can resume the fall, because geopolitics has deteriorated significantly in its prospects. Although lately the pound clearly did not need a reason to continue falling. The fundamental background these days will be extremely strong and important, so the pair can thoroughly "fly" from side to side. We highlight the following important levels on September 22: 1.1354, 1.1442, 1.1649, 1.1760, 1.1874. Senkou Span B (1.1543) and Kijun-sen (1.1410) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. The results of the Bank of England meeting will be summed up in the UK on Thursday, which is important in itself. However, in addition to the market reaction to this event, traders can continue to work out the results of the Fed meeting, which ended last night. That is, two major events can intersect in the market reaction to them. And we can get ultra-volatile trades during the day. Thus, being cautious when opening any trading positions today is first and foremost. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322345
The Euro May Attempt To Resume An Upward Movement

Technical Outlook Of The EUR/USD Pair After The Fed Meeting

InstaForex Analysis InstaForex Analysis 22.09.2022 08:36
Technical outlook: EURUSD dropped through the 0.9806 lows early hours of trade on Thursday. The recent sell-off can be accredited to the overall euro's weakness amidst the Fed interest rate hike by 0.75 bps on Wednesday.Technically, a long-awaited pullback rally should materialize any moment, pushing the process through 1.0800 at least. EURUSD has registered just a shallow low at 0.9806 delaying a pullback rally towards the Fibonacci 0.382 retracement of the entire drop between 1.2350 and 0.9800. It is still seen passing close to 1.00750 and 1.0800 as seen on the daily chart presented here. Immediate resistance is now seen at around 1.0200 and a push higher is required to confirm that the bottom is in place. We do not intend to speculate on whether a low is in place at 0.9806 but would certainly wish to bring to notice a strong bullish divergence on the daily RSI. With each swing low from 0.9950, the RSI has been printing higher lows as marked on the chart. A high probability remains for a bottom formation soon as the bulls prepare to be back in control. Trading idea: Get ready for a bullish reversal soon. Good luck!     Relevance up to 07:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293744
Nubank Announced The Introduction Of Nucoin's Own Cryptocurrency

Ethereum Charts Are Still Indicating A Long-awaited Bullish Reversal

InstaForex Analysis InstaForex Analysis 22.09.2022 08:40
Technical outlook: Ethereum dropped through $1,220 during the New York session on Wednesday. Most risky assets were under pressure after the Fed raised an interest rate by 75 bps to tame inflation. Fundamentals might affect a short-term price action but technically, charts are still indicating a long-awaited bullish reversal to resume from here. Ethereum has completed three waves between $2,031 and $1,220 as seen on the 4H chart here. The above drop seems corrective and is bouncing off the Fibonacci 0.618 retracement of the early rally between $800 and $2,031 as seen on the 4H chart here. If the above structure holds well, the bulls will be back in control soon. Also, note that the RSI has produced a bullish divergence as prices dropped to a fresh swing low at $1,220. A combination of a bullish divergence, the past resistance-turned-support zone and the Fibonacci 0.618 bounce offers a highly probable set-up. A push above $1,412 will confirm a meaningful low in place and the bulls are back in control. Trading idea: Potential rally through $1,800 against $900 Good luck! Relevance up to 07:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293756
EU Gloomy Picture Pointing To A Gradual Approach To Recession

How Much Have European Governments Invested In Supporting Businesses And Consumers, The Demand For Copper And More

Saxo Bank Saxo Bank 22.09.2022 08:47
Summary:  The Fed’s 75bps rate hike came with a strong message emerging from the Dot Plot that rate hikes will continue despite risks of slower economic growth and higher unemployment rate. Clear focus remains on tightening the financial conditions, which was reflected in equities and other risk assets. Russia’s partial mobilization has raised geopolitical concerns as well, adding a risk-off bid to the US dollar. EURUSD appears to be heading for 0.98 even as pressure on the Japanese yen remains capped due to lower long-end US yields. Hard to expect Bank of Japan pivot today, but FX comments could be the highlight before focus turns to another jumbo hike from the Bank of England later. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) are looking bearish again The Fed managed to deliver a hawkish surprise without going for a 100bps rate hike, as the message was clear – rate hikes will continue even if economic pain worsens. While the initial reaction from equities was a negative one, some ground was regained with Powell’s presser, once again, lacking further hawkish surprises. However, Powell said in his concluding Q&A response that rates will likely get to levels seen in the Dot Plot, reigniting their signaling power after initially warnings against taking the Dot Plot as Fed’s plan. Whether that was the catalyst or not is hard to tell, but stocks went on to sustain new lows into the close. What’s for sure is the Dot Plot still gives a clearer message on the Fed’s path than Powell. S&P500 fell below 3800 to close down 1.7% while NASDAQ 100 was down 1.8%. General Mills (GIS:xnys) reported better-than-expected earnings and raised its outlook, which helped it to defy the broader market decline, while also lifting other food stocks such as B&G Foods (BGS:xnys) and Kellogg (K:xnys), and supporting the overall consumer staples sector. Another chemical manufacturer joined the chorus of negative pre-announcements. Chemours (CC:xnys) revised down its 2022 EBITDA by 7% from its previous guidance, citing weaker demand from Europe and Asia. Lennar (LEN:xnys), up by 0.9%, reported adj. EPS of USD5.18, beating consensus estimate of USD4.87, primarily due to a lower tax rate and an improvement on margins. Unit orders, however, fell 12% Y/Y, missing expectations of modest growth, signing moderating housing demand, especially in Texas and the West. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) After the Fed delivering a 75bps hike as expected but signaling a hawkish higher terminal rate of 4.6% in 2023 as well as projecting lower real GDP growth rates (0.2% in 2022, 1.2% in 2023, 1.7% in 2024) and higher unemployment rates (4.4% in 2023, 4.4% in 2024, 4.3% in 2025) than the long-run equilibrium levels (1.8% real GDP growth, 4% unemployment rate) anticipated by the Fed, the treasuries yield curve went further inverted, with 2-10 year spread closing at -54bps. Traders sold the 2-year notes, bring yields up by 7bps to 4.05% in response to clear “no pivot” message from the Fed. On the other hand, long-end yields declined on the Fed’s acceptance of slower growth and higher unemployment for longer as a price to put inflation under control. The 10-year yields fell 3bps to 3.53% and 30-year yields plunged 7bps to 3.50%. The U.S. yield curve’s trend to go deeper into inversion continues. The 3-month bills versus 10-year notes yield spread may go negative (inverted) as the 3-month rates keep rising on Fed tightening and the 10-year yield being anchored by improved inflation expectations. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Stocks in Hong Kong, Shanghai, and Shenzhen bourses continued to decline, with Hang Seng Index and CSI300 Index falling 1.8% and 0.7% respectively, and both making new lows.  Hang Seng Tech Index (HSTECH.I) lost 3%, dragged down by China Internet, tech hardware, and EV names.  Sunny Optical (02382:xhkg) tumbled 10.5% as analysts had concerns over a saturated smartphone market and increased competition in smartphone cameras.  Alibaba (09988:xhkg) and Tencent (00700:xhkg) declined 3.7% and 2.5% respectively.  While real estate stocks gained on the mainland bourses after some Chinese cities relaxed second-property buying restrictions, shares of Chinese developers traded in Hong Kong fell, with CIFI 00884:xhkg) tumbling 11.3%, Country Garden (02007:xhkg) sliding 4%.  The solar power space plunged from 5% to 8%.  Following the news of a partial mobilization in Russia to bolster armed forces, higher crude oil prices boosted the shares prices of energy companies, CNOOC (00883:xhkg) up by 2.2%, PetroChina (00857:xhkg) up by 1.2%.  %.  A tanker shipping company, COSCO Shipping Energy Transportation (01138:xhkg) soared more than 8%.  Bloomberg reported that Chinese refiners are applying for quotas from the Chinese government to export as much as 16.5 million tons of fuel oil, such as gasoline and diesel. A dry bulk shipping company, Pacific Basin (02343:xhkg) surged 7.9% after the Baltic Dry Index jumped over 11%.  The tanker shipping space and natural gas space gained and outperformed in A shares.  Asian markets to face risk-off after a hawkish Fed message Australia holds a National Day of Mourning to honour the Queen. Trading of ASX instruments will not occur as the ASX is closed. Trading resumes Friday September 23. Japan’s Nikkei 225 opened down 1.4%, eying the Bank of Japan meeting later today. Taiwan, Indonesia and the Philippines are also likely to raise rates today. AUDNZD and the NZ trade balance AUDNZD remained supported above 1.1320 and upside tests were seen with the relative current account balances in play. NZ reported August trade data this morning and imports accelerated while exports have declined. The deficit in NZ Trade Balance data has widened further to -$12.28B vs. the prior release of -$11.97B on an annual basis. Also, the monthly deficit has widened to -$2,447M against the former figure of -$1,406M. This is a contrast to Australia which is reporting fresh highs in trade balance due to its bulk of commodity exports. The next focus for AUDNZD is perhaps 1.1516, the high of 2015. EURUSD heading for 0.98 EURUSD broke lower to fresh 20-year lows of 0.9814 amid Putin’s partial mobilization and the strength of the dollar from the hawkish Fed signals. While the ECB stays hawkish as well, the relative hawkishness still tilts in favour of the Fed due to the harsh winter coming up especially for Europe as Russia has cut gas supplies. Stronger case of a recession also continues to bode for more downside in EURUSD in the near-term. Crude oil (CLU2 & LCOV2) Crude oil prices bumped up higher on Wednesday after Putin’s speech but gains faded later in the day amid a hawkish Fed boosting the US dollar and strengthening the case for a deeper economic slowdown. The EIA data saw a 1.1mn barrel build in crude stocks, similar to the private data, although given the 6.9mn barrel SPR release, that was a net 5.8mn draw. WTI futures slid below $83/barrel although some recovery was seen in early Asian hours, and Brent futures attempted to head back over the $90/barrel mark.   What to consider? Powell beats the hawkish drum louder The Federal Reserve delivered its third consecutive 75bps rate hike and showed no sign of easing its push into restrictive territory as it battles to cool inflation. This comes despite Fed’s latest projections showing slower growth and a rise in unemployment next year. The FOMC raised the benchmark rate to 3-3.25% and projected the terminal rate at 4.6% in 2023, suggesting Fed will remain committed to bring inflation down even if that means significant economic pain. Fed members estimate the economy will grow 0.2% in 2022, down sharply from a prior forecast of 1.7%. Growth forecasts were also revised lower for 2023 and 2024 to 1.2% and 1.7% from 1.7% and 1.9%, respectively. The central bank now sees the unemployment rate at 3.8% at year-end, up slightly from a prior forecast of 3.7%. But labor supply and demand may likely be restored in subsequent years, with unemployment expected to reach 4.4% in 2023 and remain unchanged the following year, according to the Fed's projections. That is above the prior June forecast of 3.9% and 4.1% unemployment in 2023 and 2024, respectively. Russia’s partial mobilization spurs risk off Russian President Putin, in his televised speech to the nation Wednesday morning, announced partial mobilization, calling up 300k reserves, whilst threatening the west with “All means of destruction, including nuclear ones”. Referendums in Donetsk, Luhansk, Kherson and Zaporozhye (15% of Ukraine territory) are scheduled September 23-27, and any fighting in these regions will eb considered as attacks on “Russian territory” and thus pave the way for a potential military escalation, justifying the use of mass destruction weapons. Looking out for some FX comments at the Bank of Japan meeting While it is still hard to expect a pivot from the Bank of Japan this week, given that Governor Kuroda remains focused on achieving wage inflation, the meeting will still likely have key market implications. There will likely be increased voicing of concerns by the authorities on yen weakness, and there is also some chatter around the Bank of Japan bolstering its lending programs to support the private sector as high inflation curbs spending. Also watch for intervention risks as highlighted here. Bank of England may tilt to hawkish despite recession concerns The BoE meets on Thursday after last week’s meeting was delayed by a week for Queen Elizabeth II’s funeral. Policymakers are expected to hike rates by another 50bps, which would bring the Bank Rate to 2.25%, although a 75bps hike is still on the table. Beyond September, analysts forecast a 50bps increase in November and 25bps in December, taking the Bank Rate to 3%, where it is expected to stay until October 2023. Also worth highlighting is the “fiscal event” delivered by new Chancellor of the Exchequer Kwasi Kwarteng on Friday. This will be his first statement on how he plans to deliver new Prime Minister Liz Truss' pledge to make the U.K. a low tax economy, which risks stoking inflation in the medium-term. However, short-term plans on energy support package suggests lower inflation to end this year, but that wouldn’t be enough for the BoE to go easy on its inflation fight. Rio Tinto joins BHP in saying Copper’s near-term outlook is challenged Rio Tinto’s CEO has joined a suite of companies, including BHP, saying copper’s short-term outlook faces pressure. From supply-chain issues to 30-year high inflation and restricted demand from China, the metal is seeing less demand, and supply is outpacing supply. However, that is not expected to be the case over the longer term. Goldman Sachs predicts copper demand will be greater than supply by 2025, and will push prices to twice their current levels. Copper is used in everything from buildings to automobiles, to wiring in homes and mobile phones. Chinese media called for Loan Prime Rate Cuts Although the Loan Prime Rates (“LPR”) were fixed at the same level earlier this week, leading Chinese financial newspapers, including the China Securities Journal and Shanghai Securities Journal are calling for LPR cuts in the coming months to boost the economy.  Temporary measures to shield European consumers from high energy prices are becoming permanent According to the calculations of the Brussels-based think tank Bruegel, European governments have allocated about €500bn to protect consumers since September 2021 (see the report). The exact figure is higher because Bruegel has not yet counted the most recent packages from the United Kingdom, Germany and Denmark. We would not be surprised if the total amount will reach at some point next year €1tr. But there is more. European governments have also allocated more to support utilities facing risk of liquidity crisis (several instruments are used including loans, bailouts and fully fledged nationalisation). This represents a total amount of €450bn (this is actually above half of the NexGenerationEU funding which was agreed after the Covid crisis). Dreadful growth forecasts for the eurozone We all know forecasting is a tricky task, even more so in the current macroeconomic environment (the impact of the energy crisis is tough to assess). Yesterday, Deutsche Bank revised downward its 2023 growth forecast for the eurozone, from minus 0.3 % to minus 2.2 %. This is a massive drop in GDP if it happens. It would actually be the third lowest euro area GDP growth since WW2 (behind 2009 and 2020, of course). This shows how expectations are low for the eurozone next year.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-sept-22-2022-22092022
A Bright Spot Amidst Economic Challenges

Forecasts Expect Another Decline In Growth In The Eurozone, A Yen's Volatility And More

Saxo Bank Saxo Bank 22.09.2022 08:56
Summary:  The FOMC meeting triggered a fresh downdraft in market sentiment late yesterday, as they made it explicitly clear in its economic and policy forecasts, that it will continue to hike the policy rate even if the economy begins slowing and labor market conditions materially worsen. The US dollar spiked higher in response across the board, although new highs in USDJPY were tamed by fresh intervention threats from officials in Japan overnight. The US 2-year yield rose above the 4-handle for the first time since 2007.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities were not double thinking the signal from the Fed as Powell said the current level was at the absolute lower level of what is seen as necessary to get inflation under control. The US 2-year yield is trading 4.12% this morning adding renewed pressure on S&P 500 futures trading around the 3,788 level after touching the big 3,800 level in yesterday’s session. A soft landing scenario is increasingly getting difficult in the Fed’s assessment of the economy and the dot-plot also showed that the Fed’s intention of tightening further in 2023 despite the economy cooling. The next big level to watch on the downside in S&P 500 futures is the 3,740 level. USD flies higher after hawkish FOMC meeting As noted below in the comments on the FOMC wrap, the Fed’s hawkish surprise took the US dollar sharply higher across the board, with even EURUSD touching new lows for the cycle towards 0.9800 and USDJPY trying above the former cycle high near 145.00, though some push-back from Japanese officials overnight tamed that move partially. Still, if the move is linked directly to the latest rise in US yields, it may be difficult for short yields to continue rising at anything resembling the pace they have achieved over the last few weeks, with the 2-year rising from below 3% to above 4% since early August. Stronger US data from here suggests a more resilient US economy than expected (potentially lifting the entire US yield curve, importantly at the long end as well as the short end) is one way that the USD bull can continue rampaging. EURUSD heading for 0.98 EURUSD broke lower to fresh 20-year lows of 0.9809 amid Putin’s partial mobilization and the strength of the dollar from the hawkish Fed signals. While the ECB stays hawkish as well, the relative hawkishness still tilts in favor of the Fed due to the harsh winter coming up especially for Europe as Russia has cut gas supplies. The stronger case of a recession also continues to bode for more downside in EURUSD in the near-term. Japan's intervention warnings continue, without much effect on the yen As the Bank of Japan held its policy rates unchanged at ultra-low levels today in-line with expectations, there was a spike in yen volatility with a new 24-year low printed at 145.405 but that was soon reversed and USDJPY corrected back sharply lower to 143.55. The pair has since traded back higher towards 145 again, despite some stark FX warnings including top currency official Masato Kanda saying that the government could conduct stealth FX intervention and will remain on standby. To be fair, pressure on the yen should ease with long-end US yields reacting to recession concerns arising out of the more aggressive near-term rate hike plans of the Fed as was firmly communicated by the latest FOMC dot plot. Governor Kuroda will be on the wires at 3:30pm local time, and more yen volatility can be expected. Gold (XAUUSD) focus alternates between Powell and Putin Gold trades softer following another hawkish FOMC rate hike that helped send the dollar sharply higher. By continuing to raise interest rates while also raising expectations for lower growth and rising unemployment the FOMC is signaling a recession is a price worth paying for getting inflation under control. Putin’s increasingly desperate measures and threats regarding his war in Ukraine helped support gold and shield it from losses as the dollar and yields rose. Geopolitical support aside, the yellow metal may struggle as long yields continue to rise and the market continues to price inflation sub 3% in a year from now. Resistance was confirmed above $1680 while below $1654, last week's low, the market may target the 50% retracement of the 2018 to 2020 rally at $1618. Crude oil (CLX2 & LCOX2) Crude oil prices received a boost on Wednesday after Putin’s speech, but gains faded later in the day amid a hawkish Fed boosting the US dollar and strengthening the case for a deeper economic slowdown, not only in the US but around the world. EIA’s weekly stock report had a softening impact with crude and fuel stocks all rising while the four-week averaged demand for gasoline slumped to the lowest level since 1997 on a seasonal basis, and a measure of diesel demand fell to its lowest since 2009. Geopolitical worries and the EU embargo on Russian imports remain the main source of support for a market that is increasingly worried about an economic slowdown and with that lower demand for crude oil. US Treasuries (IEF, TLT) The more hawkish than expected Fed (more below) inverted the US yield curve further, as the 2-10 inversion fell well below -50 basis points and therefore to its most inverted level since the early 1980’s as the market figures that the Fed’s continue pace of rate tightening will eventually lead to a recession. While the 3.50% yield level was broken ahead of the FOMC meeting, all of the action was at the short-end of the curve yesterday as the Fed made clear it will hike even if economic conditions and the economy deteriorate. So, the surprise at the longer end of the yield curve would be a resilient economy. Either way, longer treasuries will trade nervously around inflation- and growth-related data releases from here. What is going on? Fed surprises hawkish as 2-year yield leaps over 4% The Fed managed to surprise on the hawkish side of expectation at yesterday’s FOMC meeting with the message embedded in the combination of the new set of staff economic projections and policy forecasts for this year and next. The surprise was less about the modestly higher median projections for the Fed policy rate by the end of this year and the end of next year relative to market expectations, and more that the Fed made those forecasts despite a significant lowering of the GDP forecast for this year and next and a sharp rise in the unemployment rate forecast. In other words, the clear message that the Fed is willing to continue hiking even if the economy deteriorates to get ahead of inflation made an impression, taking market expectations for Fed policy some 20 basis points higher by mid next year and spiking the US dollar higher and US yields to new cycle highs – mostly at the front end of the curve. Russia’s partial mobilization spurs risk off Russian President Putin, in his televised speech to the nation Wednesday morning, announced partial mobilization, calling up 300k reserves, whilst threatening the west with “All means of destruction, including nuclear ones”. Referendums in Donetsk, Luhansk, Kherson and Zaporozhye (15% of Ukraine territory) are scheduled September 23-27, and any fighting in these regions will be considered as attacks on “Russian territory” and thus pave the way for a potential military escalation, justifying the use of mass destruction weapons. US earnings recap General Mills rose 5% yesterday on better-than-expected earnings in its fiscal year Q1 on top of raising its outlook on organic revenue growth to 6-7% from 4-5% reflecting higher prices. The US homebuilder Lennar was down 2% on Q3 revenue and earnings in line with estimates and Q4 estimates on deliveries in line with analysts' expectations. But purchase contracts were down 12% from a year ago missing estimates highlighting the pressure from higher interest rates. Temporary measures to shield EU consumers from high energy prices are becoming permanent According to the calculations of the Brussels-based think tank Bruegel, European governments have allocated about €500bn to protect consumers since September 2021 (see the report). The exact figure is higher because Bruegel has not yet counted the most recent packages from the United Kingdom, Germany and Denmark. We would not be surprised if the total amount will reach at some point next year €1tr. But there is more. European governments have also allocated more to support utilities facing risk of liquidity crisis (several instruments are used including loans, bailouts and fully fledged nationalisation). This represents a total amount of €450bn (this is actually above half of the NexGenerationEU funding which was agreed after the Covid crisis). Dreadful growth forecasts for the eurozone We all know forecasting is a tricky task, even more so in the current macroeconomic environment (the impact of the energy crisis is tough to assess). Yesterday, Deutsche Bank revised downward its 2023 growth forecast for the eurozone, from minus 0.3 % to minus 2.2 %. This is a massive drop in GDP if it happens. It would be the third lowest euro area GDP growth since WW2 (behind 2009 and 2020, of course). This shows how low expectations are for the eurozone next year. Bank of England may tilt to hawkish despite recession concerns The BoE meets on Thursday after last week’s meeting was delayed by a week for Queen Elizabeth II’s funeral. Policymakers are expected to hike rates by another 50bps, which would bring the Bank Rate to 2.25%, although a 75bps hike is still on the table. Beyond September, analysts forecast a 50bps increase in November and 25bps in December, taking the Bank Rate to 3%, where it is expected to stay until October 2023. Also worth highlighting is the “fiscal event” delivered by new Chancellor of the Exchequer Kwasi Kwarteng on Friday. This will be his first statement on how he plans to deliver new Prime Minister Liz Truss' pledge to make the UK a low tax economy, which risks stoking inflation in the medium-term. However, short-term plans on energy support package suggest lower inflation to end this year, but that would not be enough for the BoE to go easy on its inflation fight. What are we watching next? Earnings calendar this week Today’s earnings focus is Costco and Darden Restaurants as both companies are exposed to the US consumer. Analysts expect Costco to show 15% y/y revenue growth as the US retailer gains market share on a strong competitive position amid the ongoing cost-of-living crisis. Darden Restaurants is expected to post a growth slowdown as the pent-up demand driven quarters following the reopening after the pandemic are over. Revenue growth is expected to slow to 7% y/y in FY23 Q1 (ending 31 August). Today: Costco Wholesale, Accenture, FactSet Research Systems, Darden Restaurants Friday: Carnival Economic calendar highlights for today (times GMT) 0730 – Switzerland SNB Meeting 0800 – Norges Bank Deposit Rate 1100 – Turkey Rate Decision 1100 – Bank of England meeting 1430 – EIA's Weekly Natural Gas Storage Change South Africa Rate Decision Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-22-2022-22092022
PLN Soars to Record Highs Ahead of NBP Decision

Bears Control The EUR/USD Market After Yesterday's Meeting

InstaForex Analysis InstaForex Analysis 22.09.2022 09:05
Several fairly good market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the levels 0.9947 and 0.9902 in my morning forecast and advised making decisions on entering the market. A breakthrough and reverse test from below 0.9947 resulted in an excellent sell signal for the euro, which resulted in a drop of more than 40 points to the 0.9902 area. Euro bulls began to act more aggressively in that area, and speculative bears rushed to take profits ahead of an important Federal Reserve meeting, which led to a false breakout and a signal to buy the euro with a bounce up more than 30 points. Everyone was waiting for the Fed's meeting in the afternoon, at which there was a sharp fall in the euro at first, which led to a false breakout in the 0.9819 area and a buy signal. As a result, the upward movement amounted to about 70 points. The bears quickly became active during Powell's speech, and protecting the 0.9907 resistance provided a great sell signal, resulting in a 50 point decline. When to go long on EUR/USD: Fed Chairman Jerome Powell vowed yesterday that he would crush inflation by any means necessary after the Open Market Committee raised interest rates by another 75 basis points for the third consecutive time and signaled an even more aggressive policy than investors had expected. All this led to a surge in volatility and ultimately put serious pressure on the euro, which collapsed to another annual low in the 0.9813 area. Protecting this range will be the top priority for now, but it will be quite difficult to do this, as it is unlikely that the data on the eurozone consumer confidence indicator and the economic bulletin from the European Central Bank will be able to oppose the current policy of the Fed. Forming a false breakout at 0.9813 will provide an entry point to the market with the goal of an upward correction to the area of 0.9861 – the level formed on the basis of yesterday. It is possible that hawkish statements from ECB Executive Board member Isabelle Schnabel may help the euro in the morning, but only a breakthrough and test from top to bottom of 0.9861 will hit the bears' stops, which will create another signal to open long positions with the possibility of a dash up into the 0.9907 area, where the moving averages are, playing on the bears' side. A more distant target will be resistance at 0.9952, where I recommend taking profits. In case EUR/USD falls further, which is more likely, and the bulls are not active at 0.9813, the pressure on the pair will increase, which will lead to a continuation of the bearish trend. The optimal decision to open long positions in such conditions would be a false breakout near the low of 0.9770. I advise you to buy EUR/USD immediately on a rebound only from 0.9723, or even lower - in the area of 0.9684, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears are in control of the market after yesterday's meeting and will continue to pull down the euro, as there are no real reasons to buy risky assets yet. The risk of a further energy crisis in Europe and an increase in interest rates by the EXB - all this will continue to negatively affect the economy, pushing the euro to the downside. The best option for selling in the current conditions would be the pair's growth in the first half of the day and forming a false breakout in the area of 0.9861, which will lead the euro to re-update the annual low of 0.9813. A breakdown and consolidation below this range with a reverse test from the bottom up creates another sell signal with the removal of bulls' stop orders and a larger fall of the pair to the 0.9770 area. A more distant target will be the area of 0.9723, where I recommend taking profits. If EUR/USD jumps during the European session, as well as the absence of bears at 0.9861, the demand for the euro will return, but nothing terrible will happen to the bears. An upward correction will lead to the next resistance at 0.9907. In this scenario, I recommend opening short positions only if a false breakout is formed. You can sell EUR/USD immediately on a rebound from a high like 0.9952, or even higher - from 0.9996, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT report) for September 13 logged a decline in short positions and a slight increase in long positions. This suggests that the European Central Bank meeting and a sharp increase in interest rates immediately by 0.75% influenced traders who preferred to take profits at current levels even despite the approaching Federal Reserve meeting. This week, the Open Market Committee is likely to raise rates by at least 0.75%, but there are rumors in the market that some politicians are in favor of raising the rate by 100 basis points, or 1.0%. This will lead to increased bearish momentum and the euro's new collapse against the US dollar. Considering the US inflation data for August of this year, the development of such a scenario cannot be ruled out. However, it should be understood that the European Central Bank is also no longer "sitting on the sidelines" and is starting to catch up with the Federal Reserve, reducing the gap between returns. This plays on the side of long-term bulls of the euro, who are counting on a recovery in demand for risky assets. The COT report indicated that long non-commercial positions rose by 2,501 to 207,778, while short non-commercial positions decreased by 22,011 to 219,615. At the end of the week, the overall non-commercial net position remained negative, but rose slightly to -11,832 from -36,349, which indicates the continuation of the alignment of the upward correction for the pair and groping the bottom. The weekly closing price increased and amounted to 0.9980 against 0.9917. Indicator signals: Moving averages Trading is below the 30 and 50-day moving averages, indicating an attempt by the bears to regain control of the market. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of growth, the upper border of the indicator in the area of 0.9950 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders. Relevance up to 06:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322359
Analysis Of The EUR/JPY Pair Movement

The US Dollar To Japanene Yen Pair Has Potential For Further Big Growth

InstaForex Analysis InstaForex Analysis 22.09.2022 10:09
Technical analysis: USD/JPY has been trading upside as I expected and the price has reached the first upside objective at the price of 145. Anyway, I see potential for further upside movement due to the strong upside momentum. Trading recommendation: Due to the strong upside pressure in the background and breakout of the multi day triangle pattern I see potential for further big growth. Watch for the potential buying opportunities on the intraday dips with the upside objectives at the price of 146.50 and 147.50. MACD oscillator is showing fresh upside momentum, which is strong sign that buyers are in control. Key support is set at the price of 143.50   Relevance up to 09:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293784
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The Price Of The Euro To US Dollar Pair May Move Downward

InstaForex Analysis InstaForex Analysis 22.09.2022 10:14
Trend analysis (Fig. 1). The euro-dollar pair may move downward from the level of 0.9836 (close of yesterday's daily candle) to test 0.9802, the 208% Fibonacci retracement level (blue dotted line). Upon reaching this level, an upward movement is possible to 0.9869, the 14.6% retracement level (white dotted line). From this level, the price may continue to move up. Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – down; Volumes – down; Candlestick analysis – down; Trend analysis – down; Bollinger bands – down; Weekly chart – down. General conclusion: Today, the price may move downward from the level of 0.9836 (close of yesterday's daily candle) to test 0.9802, the 208% Fibonacci retracement level (blue dotted line). Upon reaching this level, an upward movement is possible to 0.9869, the 14.6% retracement level (white dotted line). From this level, the price may continue to move up. Alternative scenario: from the level of 0.9836 (close of yesterday's daily candle), the price may move downward to test the historical support level of 0.9709 (blue dotted line). Upon reaching this level, an upward movement is possible to the lower fractal 0.9813 (white dotted line). From this level, the price may continue to move up.   Relevance up to 08:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322371
The White Metal (Silver) Is Manifesting A Lackluster Performance

Silver Has Been Trading Upside But Has Also Potential For The Drop

InstaForex Analysis InstaForex Analysis 22.09.2022 10:18
Technical analysis: Silver has been trading upside in the background after the yesterday's FOMC but I found big fake breakout to the upside and potential for the downside movement. Trading recommendation: Due to the fake breakout of the bigger triangle in the background, I see potential for the further drop. Watch for the potential selling opportunities on the upside extremes and intraday rallies. Downside objectives are set at the price of 18.78 and 18.55. MACD oscillator is showing neutral condition, which is sign prior to the bigger breakout. Key resistance is set at the price of $20.00 Relevance up to 09:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293786
Sustainability-Linked Products: Navigating Growth and Challenges for the Future

Will The GBP/USD Pair Move According To The Scenario?

InstaForex Analysis InstaForex Analysis 22.09.2022 10:24
Trend analysis (Fig. 1). The pound-dollar pair may move downward from the level of 1.1266 (close of yesterday's daily candle) to the target of 1.1102, the lower border of the Bollinger band indicator channel (black dotted line). When testing this level, an upward movement is possible with the target of 1.1235, the lower fractal (blue dotted line). Upon reaching this level, the price may move up. Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – down; Volumes – down; Candlestick analysis – down; Trend analysis – down; Bollinger bands – down; Weekly chart – down. General conclusion: Today, the price may move downward from the level of 1.1266 (close of yesterday's daily candle) to the target of 1.1102, the lower border of the Bollinger band indicator channel (black dotted line). When testing this level, an upward movement is possible with the target of 1.1235, the lower fractal (blue dotted line). Upon reaching this level, the price may move up. Alternative scenario: from the level of 1.1266 (close of yesterday's daily candle), the price may move downward with the target of 1.1197, the 161.8% Fibonacci retracement level (yellow dotted line). When testing this level, an upward movement is possible.     Relevance up to 09:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322381
Bitcoin Has Fallen Past The $22k Level Which Is A Bearish Signal

Bitcoin Continues Its Downward Trend And Has Potential For A Further Decline

InstaForex Analysis InstaForex Analysis 22.09.2022 10:37
Technical analysis: BTC/USD has been trading downside as I expected. The price has reached first downside objectives at the level of $18.400. Anyway, there is still chance for further downside movement. Trading recommendation: Due to the strong downside trend in the background, I see potential for further drop towards major support at $17.700. Watch for the potential selling opportunities on the upside extremes and intraday rallies. Downside objectives are set at the price of $17.700 and $14.000 MACD oscillator is showing downside reading, which is sign that sellers are in control. Key resistance is set at the price of $19.550 Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade       Relevance up to 10:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293792
TRY: Central Bank set to deliver significant rate hike today

Will Turkey's Monetary Policy Be Able To Affect Its Currency (TRL)?

TeleTrade Comments TeleTrade Comments 22.09.2022 10:44
Turkish central bank’s rate decision is unlikely to have an impact on the lira, in the opinion of economists at Commerzbank. TRY is set to suffer another round of selling pressure. High inflation rates and the dollar are the driving forces in USD/TRY “The lira’s cautious reaction to the August decision illustrated that the market has given up hoping for monetary policy to support the currency. That means today’s decision is unlikely to have much of an effect on the TRY exchange rates either.” “High inflation rates and the dollar are the driving forces in USD/TRY. Due to the continued high levels of foreign debt, we still do not consider simply accepting TRY depreciation to constitute a sustainable strategy. As a result, the next TRY crisis is only a matter of time in our view.”
The South America Are Looking For Alternatives To The US Currency

Forex Market: Fed Floors It! EUR/USD Reaching Ca. 0.92 And USD/JPY Ca. 155? It's Not Impossible!

ING Economics ING Economics 22.09.2022 10:51
After the hawkish 75bp hike from the Fed, today sees close to 10 central bank policy meetings around the world. As the dollar breaks new ground to the upside, most central banks will respond with large hikes. Recession fears are building and with the Fed set to hike a further 100-125bp this year, this all points to an even stronger dollar USD: Now or never In spite of a market positioned for a hawkish outcome, the dollar still managed to rally 0.5-1.0% after last night's FOMC decision and a very hawkish set of Fed projections - both for inflation and the monetary policy response. James Knightley discusses these in detail here. Dollar bears tried to jump on remarks by Fed Chair Powell that it would take a 'meeting-by-meeting' approach to its policy decisions but he was reasonably explicit later that the Fed was split between tightening by 100 and 125bp in the remaining two meetings of the year. In response, the market pushed the terminal rate expectations some 15bp higher - now seen at 4.65% in May. A Fed pushing ahead with tightening while acknowledging recessionary risks has all the hallmarks (albeit smaller) of the early 1980s in the US when Paul Volcker was at the helm of the Fed. That period saw massive yield curve inversion as Volcker sent the economy into recession, and the dollar soared. If there were to be a mini-repeat of that environment, one would think the next 6-12 months would be it. And with the DXY now moving forward with some momentum, long-term charts do not point to much resistance before 120 - some 7%+ higher than current levels. That would equate to EUR/USD and USD/JPY trading near 0.92 and 155, respectively. Food for thought. Standing in the way of a move much higher in USD/JPY are Japanese government officials. They are openly discussing FX intervention now but have confirmed they have not intervened yet and could conduct stealth intervention. Given that the BoJ kept all its monetary policy levers on hold overnight (it is still pursuing Quantitative Easing!), we suspect Tokyo will struggle to get the FX intervention sign-off from Washington. This leaves Japan in the position of playing its weak intervention hand as noisily as possible. The market does not seem to be buying into this, where one month 25 delta USD/JPY Risk Reversals are suggesting the market is becoming less, not more concerned about intervention. In short, there seems no strong reason to think that 145 will prove a top for USD/JPY. For today, a myriad of rate meetings around the world will remain the focus. Expect the dollar to remain bid on dips as confidence grows that deposit rates for the world's most liquid currency will push above 4% over the coming months.    DXY is flying. Expect corrections to prove shallow. Chris Turner EUR: In the dollar's shadow EUR/USD continues to grind to new lows of the year. As we have been discussing recently, yield differentials have not been playing a big role in EUR/USD pricing. It is more about the overall environment. Here, the Fed is leading the world's major central banks into more hawkish policy settings and making recessions more likely. As a relatively open economy with a large manufacturing base - and a war on its doorstep - the eurozone faces some major challenges this winter. In addition, the eurozone ran close to a EUR20bn current account deficit in July - a huge swing from traditional surpluses. We suspect EUR/USD continues to grind lower to the 0.9650 area over coming weeks. Of the many central banks meeting today, the Swiss National Bank could be especially interesting. We are looking for a 75bp hike with a risk of 100bp. We think the SNB is managing EUR/CHF lower and if there is any spike in EUR/CHF back to 0.9550 today, we expect it to be sold into. Chris Turner   GBP: BoE to hike 50bp, sterling at risk The Bank of England is widely expected to hike 50bp today. The hawkish BoE has provided little support to sterling this summer. Instead, fiscal concern is growing in the UK and tomorrow's 'fiscal event' could prove the trigger for another round of Gilt and sterling selling. GBP/USD to continue grinding towards 1.10. And a difficult equity environment could see EUR/GBP edging back to the 0.88 area.  Chris Turner NOK: Norges Bank hike unlikely to turn the NOK around In Norway, Norges Bank is widely expected to deliver another 50bp rate hike today, after signalling in August that more tightening in September would likely be required. With core inflation having continued to press higher, we expect NB to signal more tightening ahead, and we currently forecast another 50bp rate hike in November. This may not have many implications for the krone’s short-term outlook, as external drivers (risk sentiment and commodity prices above all) should remain dominant. EUR/NOK has rallied since the start of September as NOK’s low liquidity left it highly exposed to risk sentiment swings, oil prices eased and Norges Bank announced a larger than expected daily sale of domestic currency for this month (NOK 3.5bn vs 1.5bn in August). We continue to see scope for a recovery in NOK around the turn of the year, but near-term downside risks remain significant, and a return to sub-10.00 EUR/NOK levels may not materialise for several more weeks.  Chris Turner Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Serious liquidity crisis? According to Franklin Templeton, a massive, but unlikely deposit flight from Credit Suisse would have to happen

Swiss National Bank's (SNB) Decision To Stabilize The Economic Situation And The Franc

TeleTrade Comments TeleTrade Comments 22.09.2022 10:57
Following the Swiss National Bank's (SNB) decision to hike its policy rate by 75 bps on Thursday, Chairman Thomas Jordan noted that “negative rates will remain an important instrument, to be used if needed.” Additional takeaways Overall negative interest rate policy has proven its worth. Franc's recent appreciation has helped to dampen inflation. Without policy rate increase, forecast inflation would be significantly higher. Further increases in policy rate cannot be ruled out. SNB ready to intervene to prevent excessive weakening or strengthening of franc. Swiss inflation likely to remain elevated for some time. There are growing signs Swiss inflation is spreading to goods and services not affected by Ukraine war.   Market reaction USD/CHF has paused its upsurge, consolidating at around 0.9772, as investors digest comments from the SNB Chief. The pair is gaining 1.16% on the day.
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

The Unchanging Situation Of Bitcoin And Yesterday's The Fed Decision

InstaForex Analysis InstaForex Analysis 22.09.2022 11:17
In the last few days before the Fed meeting, Bitcoin lost about 7% of its capitalization. Cryptocurrency quotes reached the dangerous level of $19k, but the bears did not have enough strength to break through it. The outcome of the Fed meeting helped the sellers increase pressure and bring the price of BTC to $18.8k. Results of the Fed meeting Fed members voted unequivocally to raise the key rate by 75 basis points. As of September 22, the key rate is at the level of 3.25%. At the same time, the Fed is actively withdrawing liquidity from the markets, but it is not possible to curb inflation. And here it is worth paying tribute to BBG analysts, who stated that the market lays a high probability of a rate at the level of 4.5% by the end of 2022. Fed Chairman Jerome Powell confirmed these intentions. The agency plans to bring the figure to 4.5% by the end of 2022. This means that the Fed has underestimated the scale of inflation and maintains an aggressive monetary policy. That is why a statement was made about the need to maintain the current policy in 2023. According to the results of the meeting, key rate easing is not planned until the end of 2023. Long term forecasts Considering that the bullish movement of Bitcoin is completely dependent on the policy of the Fed and the movement of the DXY index, this is extremely negative news for the cryptocurrency market. The Fed has signed up for the ineffectiveness of its fight against inflation, and you can forget about the promises to start easing monetary policy in the second half of 2022. Fed Watch believes futures markets have an 89% chance of raising the key rate by 75 bps in November. Given the Fed's theses, this should be the last increase in 2022 in increments of 0.75%. The situation remains negative, and the liquidity crisis will continue to worsen over time. Given this, with a high degree of probability, a significant increase in BTC/USD in 2022 should not be expected. Correlation of Bitcoin and stock indices Analyzing the movement of the price of Bitcoin and actively trading this instrument, it is necessary to pay attention to stock indices. The preservation of the current state of the market, at least until the end of 2022, indicates the continued correlation of cryptocurrency with stock indices. The S&P 500 formed a large bearish candle at the end of yesterday's trading day and started trading inside the support zone. Considering that the price of Bitcoin remained practically unchanged at the end of the trading day, we should expect a similar movement of the cryptocurrency after the opening of the American markets. Bitcoin: Technical analysis As of writing, Bitcoin has broken through the $19k support zone and is trading near $18.8k. It is noteworthy that the price drop was provoked by the bulls' attempt to reach the $20k level. However, the lack of sufficient volumes provoked a price reversal and a breakdown of the $19k support zone. On the daily chart, technical metrics point to buying activity in the $18.8k–$19.1k area. The RSI index and the stochastic oscillator resumed their upward movement in parallel, however, on the chart, we still do not see the bullish momentum working off. Given the fundamental background, there is a high probability that we will not see it. Despite the fierce resistance of the bulls, sellers manage to push the price lower and lower. Gradually, the range of price movement decreases towards the local bottom, which hints at its imminent retest. Over the past week, the price of Bitcoin has tested the final support level of $18.1k twice. The bulls repelled the attack on $18.1k, but there is every reason to believe that after the Fed meeting, the boundary will be broken, and the price will update the market bottom. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade Relevance up to 10:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322399
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The GBP/USD Pair Found Support And The EUR/USD Pair Is Slowly Recovering

InstaForex Analysis InstaForex Analysis 22.09.2022 11:33
Once again, the Federal Reserve raised interest rates by 0.75% and announced a similar one for the next meeting. Markets were a bit disappointed with this as they were counting on the easing of rate hikes amid a slowdown or deceleration of inflation. Aside from the rate increase, forecasts for median interest rates, personal consumption spending, GDP and unemployment were also released. A larger rise in rates is hinted, while consumption and GDP estimates have been lowered. The unemployment rate, on the other hand, has been lifted. Interestingly, with such forecasts, the Fed believes that the economy will be able to avoid falling into recession as GDP is likely to stay in positive territory. They said it will hit 0.0% to 0.2% at the end of this year. This tough stance resulted with sell-offs in stock markets, growth in treasury yields and strengthening of dollar. Most probably, this dynamics will continue and may even intensify even if the central banks of Switzerland and the UK also raise rates by 0.75%. Forecasts for today: GBP/USD The pair found support at 1.1220 and may correct upwards to 1.1300 amid the decision of the Bank of England to raise the discount rate by 0.75%. But then it will turn down and rush to 1.1115. EUR/USD The pair is weakly recovering on the wave of partial profit-taking after its fall the day before. It could rise to 0.9880, then resume falling towards 0.9780.   Relevance up to 07:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322367
Financial World in a Turbulent Dance: Lego, Gold, and Market Mysteries

Podcast: Comments On The Fed And Bank Of Japan Decisions, Putin's Actions And Its Impact On Commodities

Saxo Bank Saxo Bank 22.09.2022 11:49
Summary:  The FOMC delivered a hawkish message to the market sending equities and bonds lower. Russia also announced a partial mobilization of its reservists increasing the stake in its war in Ukraine impacting commodities. We go through the details of yesterday's FOMC decision and details, and what knock-on effects they have caused throughout the various markets. We also discuss BOJ's decision to stay firm on its rate policy putting more pressure on JPY. Today's pod features Peter Garnry on equities and Ole Hansen on commodities. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Share   Source: https://www.home.saxo/content/articles/podcast/podcast-sep-22-2022-22092022
The Run Higher In Japanese Yields Is Likely To Create Further Volatility In Global Markets

Can USD/JPY Near 150.00? Bank Of Japan Didn't Surprise Markets, But BoJ Members Comments Are Quite Interesting

ING Economics ING Economics 22.09.2022 11:55
The Bank of Japan, as expected, left monetary policy unchanged, which prompted USD/JPY to pass the145 handle vs the USD. Top FX official, Mr. Kanda, reiterated his warnings about FX interventions when needed, while Governor Kuroda did not significantly change his rhetoric on the currency.  -0.1% BoJ's policy rate   As expected The BoJ's decision to stay pat was unanimous and forward guidance is flagging the downside risk The Bank of Japan has made it clear that it will stick with its ultra low monetary policy until inflation stays at around 2% in a more sustained fashion. In addition, the BoJ decided to phase out its pandemic relief loan programme which were suppsed to terminate in September. Instead, part of the programme will extend until March next year. Taken together with today's results, the forward gudiance indicates downside risks for the economy and policy normalization is still far away. There are four policy meetings left until Governor Kuroda retires next April, and there is little possibility of policy change at these four meetings. Also, it is still too early to tell but it appears that it will take some time for the BoJ to make any policy changes even after Governor Kuroda steps down. Government efforts to curb inflation continue mainly through fiscal support, not through FX intervention With the weaker yen pushing import goods prices higher, the government is expected to mitigate negative shocks from the price increase through fiscal support. The industry ministry announced that the gasoline subsidy for oil distributors is set to rise to 36.7 yen (about USD0.25) per litre for the seven days from Thursday (vs 35.6 yen a week earlier). The temporary subsidy programme was introduced in January and has been extended several times since then. We expect the subsidy programmes for oil and food, and some cash transfer programmes targetting low-income households, to continue.   Shortly after the BoJ's rate decision meeting Japan's top fx official, Mr. Kanda, said that the government could conduct stealth interveion in the fx market when needed. The government has not stepped into the fx market yet. We think that FX market intervention is possible, but that this only aims to smoothe out volatile currency movement, not to change the course of currency depreciation. Market intervention is not an effective way to stablize prices or bring the JPY down below 145. With Governor Kuroda's comments that BoJ future guidance won't need to change for the long-term, this will likely put more pressure on the currency.  USD/JPY: Collision course for 150? In response to unchanged BoJ policy and increasing doubts about the political feasibility of FX intervention, USD/JPY has traded close to 146. As above, Japanese authorities will struggle to reverse a powerful dollar bull trend with intervention. We also assume that the bar is exceptionally high for the Japanese to receive approval for FX intervention from the US Treasury. Washington will argue that if Japan wants a stronger yen it should hike rates. This suggests that USD/JPY can continue to push towards 150 (our rates team sees US 10 year Treasury yields biased to 3.75%, if not 4.00%) and Japanese authorities increasingly hitting the wires with intervention threats. The next big event risk now may be the 12 October meeting of central bank governors and finance ministers in Washington. The Japanese will have to convince US authorities that the strong dollar is a problem, such that G20 FX language is altered. That is a tough task, with the Fed still seemingly welcoming dollar strength.      Read this article on THINK TagsBank of Japan Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Bitcoin Has Strong Sign That Buyers Are In Control

Bitcoin's Downtrend With No Signs Of Possible Ending Or Reversal

InstaForex Analysis InstaForex Analysis 22.09.2022 11:55
Crypto Industry News: Unsurprisingly, the Fed raised rates by 0.75% again, reassuring those who feared a 1% rate hike, but not preventing a bearish reaction to risk assets, including cryptocurrencies. The largest digital asset in the market by capitalization indeed fell to its lowest level in more than three months after the Fed decision, reaching a low of around $ 18,200. Let us remember that the Fed's rate hike was accompanied by hawkish details, especially with regard to the FOMC members' rate forecasts outlined in the dot plot. The forecasts suggest that the Fed will raise rates by another 1.25% by the end of the year. Considering that 2 more meetings will be held by the end of 2022, rate hikes by 0.75% and then 0.50% are the most likely scenario. In addition, Jerome Powell maintained a largely hawkish tone in his press conference, leaving no doubt that the Fed will continue to fight inflation until it is brought under control. Technical Market Outlook: The BTC/USD pair has made a new marginal swing low at the level of $18,142 after the FED decided to deliver the interest rate hike to the level of 3.25%. Currently the market is trying to bounce from the extremely oversold market conditions on the H4 time frame chart, so the nearest technical resistance is seen at the level of $19,347 and $19,679. The weak and negative momentum on the H4 time frame chart still supports the short-term bearish outlook towards the level of $17,600 again, but any breakout above the descending trend line will be considered bullish. Weekly Pivot Points: WR3 - $21,295 WR2 - $20,039 WR1 - $19,341 Weekly Pivot - $18,764 WS1 - $18,064 WS2 - $17,526 WS3 - $16,271 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade     Relevance up to 11:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293816
Asia morning bites - 16.05.2023

Forex: What Is Actually Driving US Dollar To Japanese Yen (USD/JPY)?

ING Economics ING Economics 22.09.2022 12:01
It has been a wild ride for the Japanese yen today. USD/JPY initially jumped over 1% earlier today but has reversed directions. In the European session, USD/JPY is trading at 142.27, down 1.24%. BoJ stays pat, MoF issues warning With the Japanese yen continuing to fall, there have been rumblings that the Japanese government could respond with a currency intervention. The yen even posted gains earlier this month, after a report that the Bank of Japan had conducted a rate check, which could have been a prelude to intervention. The markets have heard plenty of verbal rhetoric from Japanese officials expressing deep concern about the yen, but no action followed. With USD/JPY rising just short of the 145 line this month, there was speculation that “this time would be different” and the BoJ would not sit idly by at today’s policy meeting. In the end, however, the BoJ stayed on the sidelines and maintained its policy settings. The BoJ affirmed its ultra-accommodative policy and said it would increase stimulus if needed. Predictably, the yen took a tumble, falling as low as 145.90. Today’s drama was far from over, however. After the decision, the country’s top currency diplomat and Vice-Minister of Finance, Masota Kanda issued a warning that the government was ready to take action at any time to prop up the yen and could conduct “stealth intervention”. The markets are taking Kanda’s threat and USD/JPY has moved sharply lower. The tug-of-war between the Ministry of Finance and the Bank of Japan is likely to continue, which should translate into plenty of movement from the yen. Read next: Can USD/JPY Near 150.00? Bank Of Japan Didn't Surprise Markets, But BoJ Members Comments Are Quite Interesting| FXMAG.COM In the US, the Federal Reserve raised rates by 0.75%, as expected. This brings the benchmark rate to 3.25%, which is considered restrictive territory. The Fed’s economic projections were more hawkish than expected, with unemployment projected to hit 4.4% in 2023 and the Federal funds rate to rise to 4.6% in this cycle. The Fed has signalled that inflation remains priority number one, even at the price of a recession. USD/JPY Technical USD/JPY tested resistance at 144.71 but then retreated. Above, there is resistance at 146.49 USD/JPY is testing support 143.19. The next support line 141.88 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen goes on roller-coaster after BoJ meet - MarketPulseMarketPulse
"From the technical point of view, ETH/USD retested the major broken downtrend line and now it has turned to the upside"

Ethereum Is Still In The Short-term Down Trend, The Draft Law About Stablecoins

InstaForex Analysis InstaForex Analysis 22.09.2022 12:01
Crypto Industry News: A bill on algorithmic stablecoins has appeared in the US House of Representatives. If it is passed, it could in practice lead to a ban on this type of cryptocurrency. The law criminalizes the creation or issuance of new "endogenously secured stablecoins". So, in practice, it is about creating algorithmic stablecoins. However, officials want to give their creators a chance. If the new law comes into force, they will have two years to change the security models of their coins. The definition in the draft law states that these are stablecoins, the price of which depends on the value of another digital asset, which is backed by the same creator, and which were created to maintain the price of that stablecoin. It is not known how officials will approach, for example, synthetix USD (SUSD). The project is now protected by a native asset of the same protocol. Other unclear stablecoins include BitUSD, which is backed by bitshares (BTS). In terms of competences, the bill authorizes the US Treasury Department to carry out analyzes on stablecoins. This one would cooperate with the Federal Reserve, the Securities and Exchange Commission, the Federal Deposit Insurance Corporation and the Office of the Currency Controller. It turns out that the future of the algorithmic stablecoin market may be decided by a vote that is to take place next week. According to the media, the draft act was developed by Democrat Congresswoman Maxine Waters and her Republican colleague Patrick McHenry. Technical Market Outlook: The ETH/USD pair has extended the post-Merge sell-off below the key technical support located at $1,281 as the new swing low was made at $1,219. The levels of $1,358, $1,407 and $1,424 will now act as the technical resistance for bulls as the market is trying to extend the bounce from the extremely oversold conditions on the H4 time frame chart. Moreover, the bullish divergence between the price and momentum indicator is seen on the H4 time frame chart, so the bounce might be triggered any time soon. Nevertheless, the next target for bears is seen at the level of $1,100, $1,000 and $990. Despite the extremely oversold market conditions on the H4 time frame chart, the momentum remains weak and negative, which might indicate the ETH is still in the short-term down trend. Weekly Pivot Points: WR3 - $1,460 WR2 - $1,386 WR1 - $1,346 Weekly Pivot - $1,312 WS1 - $1,272 WS2 - $1,238 WS3 - $1,164 Trading Outlook: The Ethereum market has been seen making lower highs and lower low since the swing high was made in the middle of the August at the level of $2,029. The key technical support for bulls is seen at $1,281.9. If the down move will extend, then the next target for bears is located at the level of $1,000. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade     Relevance up to 11:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293818
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

Trading Suggestions For The US Dollar To Japanese Yen Pair (USD/JPY)

InstaForex Analysis InstaForex Analysis 22.09.2022 12:13
Previous trading tips in USD/JPY pointed to a possible increase in prices. That is exactly what happened today, after the press conference of the Bank of Japan. The pair broke through the level of 145 with great volatility, giving long positions quite good profit. Plan: Development: Congratulations to those who followed the strategy! The pair moved by as much as 2,000 pips. Traders should now close long positions to get good profit. The trading idea was based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 09:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322394
Analysis Of Situation Of The US Dollar To Swiss Franc Pair (USD/CHF)

How The USD/CHF Pair Move After The Fed And SNB Decision

InstaForex Analysis InstaForex Analysis 22.09.2022 12:31
The USD/CHF pair rallied right after the SNB Policy Rate publication. In the short term, the currency pair continued to move sideways after the FOMC, even though the FED increased the Federal Funds Rate from 2.50% to 3.25%. Now, the USD/CHF pair exploded after the Swiss National Bank increased the SNB Policy Rate from -0.25% to 0.50% as expected. Later, the BOE could bring more volatility into the markets. The Official Bank Rate is expected to be increased from 1.75% to 2.25%. Furthermore, the US Unemployment Claims are expected at 220K last week, while the Current Account and CB Leading Index could come in better compared to the previous reporting period. USD/CHF Bullish Momentum! From the technical point of view, USD/CHF registered a false breakdown with great separation below 0.9627, signaling strong upside pressure. As you can see on the H1 chart, the price registered an aggressive breakout above 0.9695 static resistance. It has found resistance above the weekly R2 (0.9780) which represented an upside obstacle. Now, it has slipped below this key level and under the warning line (wl1) of the ascending pitchfork. These are seen as resistance levels. USD/CHF Outlook! Coming back and stabilizing above the warning line (wl1) and above the R2 (0.9780) could signal an upside continuation. Personally, I want to see a strong consolidation above the R2 before going long. A new higher high could bring long opportunities.         Relevance up to 11:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293824
Market Trends and Currency Positioning: USD Net Short Position, Euro and Pound Analysis - 22.08.2023

The Japanese Yen Has The Worst Performer Among The G-10 Currencies

InstaForex Analysis InstaForex Analysis 22.09.2022 12:41
Japan intervened in the forex market for the first time since 1998 as the yen's losses intensified amid a divergence in the country's monetary policy with the United States. Yen hit 142.48 per dollar after falling above 145 per dollar because the Bank of Japan maintained ultra-low interest rates following the Federal Reserve's decision the day before to raise its key rate by 75 basis points. Japanese authorities have stepped up verbal warnings in recent weeks, stressing that the government is ready to take action at any time and may carry out covert intervention. This is very surprising as the country has long been criticized for tolerating or even encouraging a weak currency on behalf of its exporters. The last time Japan strengthened yen through direct intervention was during the Asian financial crisis in 1998, when the exchange rate hit 146 and threatened the fragile economy. It has also previously intervened around 130 to weaken the currency in 2011. This year, yen has fallen about 20% against dollar, making it the worst performer among the G-10 currencies. But Japanese businesses and households are becoming increasingly vocal about the negative impact of the weaker yen as commodity and energy costs rise. Further declines will most likely put pressure on the consensus between a central bank determined to spur inflation and a government desperate to avoid a cost-of-living crisis. Relevance up to 11:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322405
Central Bank Policies: Hawkish Fed vs. Dovish Others"

The Fed Will Do Whatever It Takes To Regain Control Of Inflation

InstaForex Analysis InstaForex Analysis 22.09.2022 12:49
Fed officials have given the clearest signal that they are willing to tolerate a recession in order to regain control of inflation. It seems that they are finally taking active steps to catch up after being criticized for being too late in realizing the magnitude of the inflation problem in the US. On Wednesday, the central bank raised interest rates by 75 basis points and announced a potential 1.25% increase before the end of the year. This is more hawkish than economists expected. Growth forecasts were also cut, while unemployment forecasts were lifted. Fed Chairman Jerome Powell repeatedly spoke of the painful slowdown needed to contain price pressures at their highest levels since the 1980s. Gold reacted brightly to this news. Powell told reporters that soft landings are likely to decrease to the point where policies need to be tighter or more restrictive for a longer period. This assessment contrasts sharply with six months ago, when Fed officials first started raising rates from near zero and pointed to the strength of the economy as a positive. Now, officials are implicitly acknowledging through their pessimistic unemployment forecasts that demand will need to be cut at all levels of the economy as inflation has proven resilient and widespread. The median forecast among the 19 Fed officials is that unemployment will hit 4.4% next year and remain at that level through 2024. But this new level may still be too low as interest rates are likely to hit 4.4% this year and 4.6% in 2023, before falling to 3.9% in 2024.   Relevance up to 11:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322407
EUR/USD Pair Has Potential For The Downside Movement Today

The EUR/USD and The GBP/USD Markets Were Bearish Yesterday, Will It Be The Same Today?

InstaForex Analysis InstaForex Analysis 22.09.2022 13:30
EUR/USD Higher timeframes Bears were able to exit the 1.0000 area of attraction yesterday, update the low at 0.9864, and hold on to a close below this level. The continuation of the downward trend returns relevance to the following downward targets – 0.9000 (psychological level) and 0.8225 (minimum extremum of 2000). The nearest resistance is now the zone of 1.0000 – 1.0089, left behind yesterday and strengthened by many levels of the higher timeframes (psychological level + daily cross + weekly short-term trend). H4 – H1 The main advantage in the lower timeframes now belongs to the bears. However, at the moment, we are witnessing an attempt to implement a corrective rise. The pair retests the broken target at H4 (0.9864–97) and interacts with the central pivot point of the day (0.9875). The next most crucial resistance will be the weekly long-term trend (0.9966). This level is responsible for the current balance of power of the lower timeframes. The resistance of the classic pivot points R2 (1.0038) and R3 (1.0100) serve as further upward targets in the current situation. If the corrective recovery is completed, the bearish sentiment will return with targets at 0.9774 – 0.9712 – 0.9611 (classic pivot points). *** GBP/USD Higher timeframes The initiative yesterday belonged to the bears, who continued the development of the downward trend movement. The breakdown of the historical low 1.1411 (2020) at higher timeframes will allow us to consider the psychological level of 1.0000 as the next target for the decline. If the bears fail to confirm the breakdown on the weekly and monthly timeframes, then attention will be directed to the return to the passed minimum extremum 1.1411 and the subsequent development of a corrective rise. H4 – H1 As of writing, a corrective rise develops in the lower timeframes. Overcoming the key resistance at 1.1389 (weekly long-term trend) and a reversal of the moving average will change the current balance of power in favor of strengthening bullish sentiment. The resistance of the classic pivot points R2 (1.1443) and R3 (1.1503) can become additional targets within the day. If bears return to the market, the relevance will return to the support of classic pivot points (1.1207 – 1.1147 – 1.1059 ). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1- Pivot Points (classic) + Moving Average 120 (weekly long-term trend)     Relevance up to 11:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322411
Gold Stocks Have Performed Very Well Under Pressure

The Geopolitical Conflict In Ukraine Briefly Pushed The Gold Price

InstaForex Analysis InstaForex Analysis 22.09.2022 13:37
Gold is going to win favor with investors as a safe haven asset after Russia's President Putin delivered a televised address to order a partial mobilization of reservists to bolster forces in Ukraine. The Russian leader warned the West he was prepared to use all available means to protect the Russian territory and respond to all threats to its territorial integrity. Putin's remarks were viewed as an escalatory address and another "nuclear blackmail". The deeply unpopular Kremlin's move enabled the US dollar to conquer a new 10-year peak. The US dollar index skyrocketed above 111 points shortly after the announcement. Nevertheless, gold managed to show resilience despite a new spike in the US dollar. Some analysts speculate that gold might have surged as high as $1,700 per troy ounce following the Fed's policy decision depending on the Fed's hawkish magnitude. In practice, the gold rally didn't happen. Head of Commodity Strategy at Saxo Bank Ole Hansen said that the recent price moves prove gold stayed afloat because of high demand for safe-haven assets, even though gold prices dropped to the lowest levels in two years, testing critical long-term support. By and large, gold has outpaced other assets amid global risk aversion that has been setting the tone for the overall market sentiment. Remarkably, gold has not collapsed to historic lows despite the stunning rally of the US dollar and massive sell-offs of stocks and government bonds. The geopolitical conflict in Ukraine briefly pushed the gold price to $2,000 per ounce. Nevertheless, later on, the geopolitical threat disappeared from investors' scope of interest. Indeed, investors have shifted focus toward inflation dynamics and rate hikes by major central banks. Hedge funds have been keeping short positions on gold for five weeks in a row. Ole Hansen admitted that gold has been bruised by ongoing headwinds on the back of the cycle of rate hikes. He also added that besides the demand for safety, investors view gold as a shield against errors in monetary policies. Influential central banks have not been able to contain inflationary pressure worldwide so far.   Relevance up to 09:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322385
Sustainability-Linked Products: Navigating Growth and Challenges for the Future

The Bank of England Is Widely Expected To Take Decisive Action

InstaForex Analysis InstaForex Analysis 22.09.2022 13:42
By the end of this week, the pound sterling drifted lower. It lost its early gains in anticipation of the Bank of England meeting. However, it may resume steady growth following the BoE's key rate decision. Today, the pound sterling reached a new 37-year low against the greenback amid geopolitical tensions that fueled demand for safe-haven assets, especially the US dollar. The GBP/USD pair has fallen to its lowest level since 1985, touching a critically low level of 1.1235. On Thursday morning, the GBP/USD pair was trading at 1.1226. Shortly after, it was fluctuating in the range of 1.1300 -1.1400. Analysts at Scotiabank believe that the GBP/USD pair could extend more losses in the medium term. Now, the pound sterling is weakening due to risk aversion. Traders are flocking back to safe-haven assets, especially the US dollar. Besides, the greenback is rising across the board. The pound sterling will eventually recover yet its growth will be unsteady. Investors are now anticipating the upcoming meeting of the BoE, scheduled for September 22. According to Reuters, a chance of a 75 basis point rate hike totals 75%. Analysts reckon that this is the most appropriate size of the rate hike. The Bank of England is widely expected to take decisive action against inflation. Some analysts assume that the regulator may raise the interest rate by another 125 basis points at the next two meetings before the end of 2022. Currently, it stocks to a dovish stance. The watchdog is reframing from switching to aggressive tightening. For this reason, some economists criticize the regulator for a slower response to inflation and monetary policy adjustments. According to FX strategists at Barclays Bank, it is pushing the pound sterling down. To facilitate its growth, the central bank should raise the benchmark rate more aggressively. This move may help revive demand for the British currency. If the BoE hikes the cash rate by 100 basis points instead of an expected 75 basis point increase, the pound sterling will rise sharply, analysts at Barclays stated. Market participants are also concerned about the possibility of a recession following the release of the UK's fresh macro stats. Retail sales contracted by 1.6% in August compared to a 0.4% increase in July. On an annual basis, this indicator sank by 5.4%, logging the worst performance since 2008. At the same time, in August, the budget deficit stood at £11.8 billion ($ 13.38 billion) amid the rising cost of servicing government debt. According to the Office for National Statistical (ONS), since April 2022, British public borrowing has amounted to £58.2 billion, a decrease of £21.4 billion compared to 2021. Earlier, the BoE repeatedly warned about the high risks of a recession in the fourth quarter of 2022. According to experts, it may begin to subside no earlier than 2024. At the same time, some analysts revised upward their outlooks for inflation in the UK amid the adoption of the Energy Price Guarantee. In August, the Bank of England predicted that inflation would peak at more than 13% in October. Yet, the reading, on the contrary, declined. Therefore, analysts recommend holding short positions on the GBP/USD pair with the target level of 1.1250.   Relevance up to 09:00 2022-09-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/322377
NOK (Norwegian Krone): Norges Bank Hiked The Interest Rate!

NOK (Norwegian Krone): Norges Bank Hiked The Interest Rate!

ING Economics ING Economics 22.09.2022 13:52
Norway’s central bank raises rates by 50bp and signals another hike will likely be delivered in November. Somewhat surprisingly, the statement hints at a slower pace of tightening from now on, but we still don't rule out another 50bp hike in November. Like in Sweden, attempts to lift NOK via higher rates should keep failing in the near term Another 50bp hike, but hints of a slower pace of tightening Norges Bank delivered another much-anticipated 50bp rate hike today, bringing the policy rate to 2.25%. The move was fully in line with the Bank’s determination to fight elevated inflation, as firmly reiterated by Governor Ida Wolden Bache in her post-meeting statement. The Bank also released its updated economic and policy rate projections. While the inflation forecast was revised higher, the rate path was nearly unchanged from the June 2022 projections, with a peak expected at 3% in 2023 and remaining around that level into 2024. Perhaps surprisingly, the Bank explicitly mentioned that “monetary policy is starting to have a tightening effect on the Norwegian economy”, which “may suggest a more gradual approach to policy rate setting ahead”. This appears in contrast with other developed central banks which are refraining from diverging from their hawkish rhetoric with the aim of keeping inflation expectations in check. There are two more Norges Bank meetings in 2022, on 3 November and 15 December. Today’s statement suggests that to get to the 3.0% projected terminal rate (so 75bp from the current level) with more gradual tightening, we could see 25bp hikes in November, December, and at the first meeting of 2023. Rate projections unchanged since June Source: Norges Bank, ING We don't rule out a 50bp move in November We had previously forecasted another 50bp hike in November, although the change in tone by Norges Bank does suggest a 25bp move is likely the baseline scenario for the Bank. Still, we would not rule out a half-point move just yet, mainly because for one thing, the statement still points to some flexibility in the rate setting moving forward. Also, inflation may surprise to the upside, and Norges Bank may attempt to lift the krone by surprising markets on the hawkish side. NOK: Monetary policy impact very limited In her statement today, Governor Bache said: “a higher policy rate may also contribute to strengthening the krone exchange rate, which may curb imported goods inflation further out”. In practice, however, the correlation between short-term rate differentials (which absorb monetary policy expectations) and the krone's performance has faded in recent months as it has in many other developed currencies. The example of the neighbouring Riksbank in Sweden is emblematic; earlier this week, a massive 100bp rate hike only seemed to offer an opportunity for SEK bears to sell the currency at more attractive levels, and SEK plunged in the hours after the announcement. The reason the correlation has faded is down to the numerous global and European macro factors along with geopolitical concerns and their impact on global risk sentiment as FX drivers. We think the unstable risk environment should continue to prevent a relinking of high-beta currencies with their rate differentials in the coming weeks.   We still see room for a recovery in NOK in the medium term, potentially starting later this year, and any risk stabilisation should allow the krone to benefit from the attractive commodity picture and high interest rates. We currently forecast a move to 9.80 in EUR/NOK in the first quarter of next year. However, downside risks in the near term remain elevated for NOK, especially considering its relatively low liquidity character which leaves it more exposed to swings in risk sentiment. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Saxo Bank Podcast: The Upcoming Bank Of Japan Meeting, A Look At Crude Oil, Copper And More

US Dollar To Japanese Yen (USD/JPY): Bank Of Japan Did IT!

ING Economics ING Economics 22.09.2022 13:59
Japanese authorities have today intervened to sell USD/JPY for the first time since 1998. With the Fed turning ever more hawkish and the BoJ still printing money, it looks like the Japanese government wanted to stop a quick run to 150. Japanese authorities could well be doing battle with the FX market for the next 6-9 months as the dollar stays strong Japan's Ministry of Finance The warnings were there Over recent weeks the warnings from Tokyo had been building. Descriptions of one-sided moves and moves out of line with fundamentals morphed into more explicit threats to intervene. Today those threats materialised in intervention, with the Bank of Japan selling USD/JPY to the market from around the 145.70 level. The Ministry of Finance's website suggests it now reports intervention on a bi-monthly basis. The next release of data is on 30 September. Comparisons with markets 20-plus years ago come with the appropriate health warning. For what it’s worth, when Japanese authorities started intervening to sell USD/JPY in December 1997, they made a splash by buying around JPY1trn over a consecutive three-day period – i.e. they sold close to US$8bn. Objectives and outlook Presumably, Tokyo wanted to break the cycle of an ever-higher USD/JPY, even though Japan’s policy of effectively draining liquidity with JPY buying operations is at odds with the BoJ’s ongoing JPY-liquidity add through its various quantitative easing programmes. Japanese officials will be well aware of this contradiction and probably hope to slow or stabilise USD/JPY – rather than actively seek a reversal of the very powerful dollar bull trend. We are also a little surprised that Tokyo went with the intervention. Either authorities had Washington’s blessing or they wanted to flex their domestic policy muscles against the overriding G20 mandate of flexible exchange rates. The issue now will be whether G20 central bankers and finance ministers agree that FX markets have become disorderly when they issue their next Communique on 12 October. Clearly, investors are going to think twice about paying for USD/JPY over 145 now. And one can argue that we will now enter a volatile 140-145 trading range. But expect investors to be happy to buy dollars on dips near 140/141 knowing that Tokyo will find it impossible to turn this strong dollar tide – a tide that should keep the dollar supported through the remainder of this year.      BoJ sells USD/JPY for the first time since the late 90s Source: Japanese MoF, ING Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Analysis Of The Ripple (XRP) Price Movement

The Ripple Rose, Will The XRP Price Trade Up?

InstaForex Analysis InstaForex Analysis 22.09.2022 13:52
The price of Ripple was trading in the green at 0.4265 at the time of writing and it seems determined to approach and reach new highs. Technically, the price action signaled exhausted sellers and a potential upside movement. XRP/USD increased by 27.58% from Monday's low of 0.3398 to 0.4335 yesterday's low. Ripple is up by 5.30% in the last 24 hours and by 26.09% in the last 7 days. Still, a larger growth needs strong confirmation. XRP/USD Downside Is Over! As you can see on the H4 chart, the price came back above the ascending pitchfork's median line (ML) and above the 0.4098 static resistance signaling strong upside pressure. Personally, I've drawn the ascending pitchfork hoping that I'll catch a long opportunity. The price retested the lower median line (LML) validating the pitchfork. Stabilizing above these broken levels mays signal further growth. XRP/USD Forecast! Coming back to test and retest 0.4098 and the median line (ML), registering false breakdowns could announce a fresh bullish momentum from above these broken resistance levels. This scenario could bring long opportunities. Also, a bullish closure above the R2 (0.4350) could activate further growth towards the upper median line (UML).     Relevance up to 13:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293842
Litecoin Finally Saw A Deeper Corrective Decline

Litecoin Is In A Bearish Mood, Further Drops Are Possible

InstaForex Analysis InstaForex Analysis 22.09.2022 14:14
LTC/USD changed little in the short term. The bias remains bearish, so we cannot exclude more declines despite temporary rebounds. The altcoin could come back to test and retest the near-term resistance levels before going down. Technically, BTC/USD maintains a bearish bias, a deeper drop could force the altcoins to slip lower as well. In the last 24 hours, LTC/USD is up by 0.89% but in the last 7 days, it's down by 11.59%. LTC/USD Retests The Sellers! Technically, after dropping below the uptrend line, it has signaled a downside movement. Still, 52.30 represented a static downside obstacle. Now, it has dropped below this level but the rate tried to rebound. The descending pitchfork's median line (ml) represents a dynamic resistance. As long as it stays under this line, the bias remains bearish. LTC/USD Forecast! Staying below the median line (ml) and making a new lower low, a bearish closure below 50.01 activates more declines. This is seen as a short opportunity as well. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 13:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293848
FX: The SNB Is Getting Its Stronger Swiss Franc Via Gains Against The Dollar

Swiss National Bank Decided On Interest Rate. Let's Check EUR/CHF Reaction To The Hike And Comments

ING Economics ING Economics 22.09.2022 14:39
The Swiss National Bank raised interest rates by 75 basis points to 0.5% as planned, bringing the rate into positive territory for the first time since 2015. A reverse tiering system and a reduction in liquidity were also announced. EUR/CHF suffered a short squeeze on the news, but should come lower again 75bp increase As expected, the SNB has just announced an increase of 75bp in its key interest rate, bringing it to 0.5%. The rate in Switzerland is therefore back in positive territory for the first time since January 2015 and is no longer the lowest in the world. It is the end of an era. This rate hike is intended to combat inflation in Switzerland, which reached 3.5% in August, and is therefore higher than the SNB's objective of having inflation between 0 and 2%. Thanks to a more favourable energy mix, a lower share of energy in consumption, and the strength of the Swiss franc, which limits imported inflation, inflation in Switzerland is nevertheless still much lower than in neighbouring countries. The SNB believes that the risk of second-round effects is significant. The SNB now expects inflation to reach 3.0% in 2022, 2.4% in 2023 and 1.7% in 2024. Against this background, it says it "does not rule out further rate hikes in the coming months". Reverse tiering and liquidity reductions Interestingly, the SNB also took two other important decisions. First, it will introduce a two-tier system for the remuneration of sight deposits held by banks and other financial market participants. From now on, they will be remunerated at the SNB's key interest rate (0.5%) up to a threshold, and the part above this threshold will be remunerated at a rate of 0%. The threshold is currently set at 28 times the reserve requirement. It is therefore a reverse tiering system. The aim of this system is, according to the SNB, to encourage money market operations, even in a situation of excess liquidity. At first sight, this may seem surprising, as it could push money market rates to remain below the SNB rate. However, this system goes hand in hand with the desire to reduce liquidity in the market, which in practice should severely limit the proportion of holdings bearing 0% interest. To reduce liquidity, the SNB will conduct open market operations (repo and T-bills). According to the SNB, the aim of this is to ensure that money rates reach the SNB's key interest rate as quickly as possible. Further rate hikes to come in December Given the inflation forecasts, there is little doubt that the SNB will continue to raise rates in the future. Unlike other central banks, the SNB only meets quarterly, so the next meeting will be in December. By then, the European Central Bank and the Federal Reserve will probably have raised rates by another 75 basis points in October and November and will raise rates again in December. The SNB could follow suit, probably raising its rate by 75bp in December as well. This is likely to be the last rate hike and we do not expect anything more in 2023. Indeed, the deteriorating economic outlook and the expected decline in inflation in 2023 should be enough to leave the SNB comfortable with a rate of 1.25% for the year as a whole. EUR/CHF: Short squeeze should not last EUR/CHF rallied around 1.5% following the 75bp hike and comments from SNB Chairman Thomas Jordan that it would intervene against excessive moves. The squeeze probably owed to some positioning for a 100bp rate hike today, following the Swedish Riksbank's 100bp hike earlier in the week. Like the Riksbank, the SNB now only has one further rate meeting this year. However, we do not think this EUR/CHF rally will last. We think the SNB is happy to guide EUR/CHF lower as a means to keep its real exchange rate stable - given trading partner inflation is some 5% higher than in Switzerland. At the start of the year, few would have believed the SNB would be comfortable with EUR/CHF at today's level of 0.95/0.96. Equally, we think the case is growing for EUR/CHF to be trading 0.93 by the end of the year and conceivably 0.90 by next summer. Developments to the East only add to the case to hold the Swiss franc now.  Read this article on THINK TagsSwitzerland Swiss National Bank SNB CHF Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Turkish Central Bank Cut Its Policy Rate by150bp | Credit Suisse Outflows Benefit UBS

Turkish Lira (TRY): Central Bank Of Turkey (CBT) Has Done It Again

ING Economics ING Economics 22.09.2022 14:52
Citing evidence pointing to momentum loss in economic activity, the CBT cut the policy rate by 100bp İn September. Signs of a slowdown in activity, stability in FX reserves recently, and outperformance of the currency in comparison to peers are likely factors behind the CBT cut this month. The Turkish Central Bank in Ankara   In its September rate setting meeting, the CBT once again cut the policy rate by 100bp, to 12%. Most central banks around the world are moving in the opposite direction. Despite some calls for further easing the prevailing view in the market, including ours, was that the CBT would remain mute this month. The reasoning behind the extension of rate cut cycle is unchanged. The CBT cited the need for supportive financial conditions so as to preserve growth momentum in industrial production and the positive trend in employment. This, according to the bank, is particularly important given recent signs of momentum loss in economic activity. It was also influenced by decreasing foreign demand in an environment of higher uncertainties surrounding the global growth outlook as well as escalating geopolitical risks. In the rate-setting statement, the CBT has maintained (i) its signal of further macroprudential policy moves, with the objective of supporting the effectiveness of the monetary transmission mechanism, if needed, and (ii) its focus on the spread between policy rate and loan interest rates. The CBT guidance indicates potential additional measures to maintain selective credit growth policies, keep lending rates in check, support FX reserve growth, increase demand for TRY assets, and divert FX demand in the period ahead. Following the recent regulatory changes to increase security maintenance requirements for banks, the average commercial TRY loan rate stands below 21.5%, down by close to 600bp since mid-August. The average deposit rate is around 19.0% (for up to 3-month maturities), recording a slight decline in the same period. As a result, the spread between commercial loans and deposits has narrowed by about 350bp, reaching 5.0-5.5pp. Like the August statement, the latest note does not rule out further reduction in the policy rate as the bank reiterated that "the updated level of policy rate is adequate under the current outlook". Additional rate cuts, in our view, would be dependent on developments in the period ahead. A worsening global backdrop weighing on exports and higher FX volatility, coupled with ongoing momentum loss in credit growth, is expected to weigh on private consumption and investment. We have already seen a notable slowdown in July IP and have seen a weakening PMI index and deterioration in other sentiment indicators in recent months. Against this backdrop, the CBT would be able to come up with additional moves to ease financial conditions.   Further signs of a slowdown in economic activity as well as recent stability in FX reserves along with outperformance of the currency vs peers are factors behind the CBT cut this month. However, ongoing widening pressures on the current account and subdued capital flows imply the possibility of further drawdowns in reserves. Today’s move will do little to address Turkey’s inflationary challenges. The current policy setting does not prioritise disinflation and inflation will likely remain elevated in the near term. Read this article on THINK TagsTurkey Reserves Policy Rate Inflation Central Bank Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
UK GDP Already Falling And Continuing To Do So For This Calendar Year, Copper Is Still Within A Tightening Range

Is BoE Able To Conduct A FX Intervention? Bank Of England Hiked The Rate By 50bp, What Can We Expect From GBP/USD And EUR/GBP?

ING Economics ING Economics 22.09.2022 14:59
The Bank of England has stuck to its guns and hiked rates by a further 50bp, less than markets had been pricing and defying some expectations that UK policymakers might be forced into a larger move given what other central banks have done recently. Gilts and sterling are failing to find support and remain vulnerable before Friday's 'fiscal event' Bank of England Governor, Andrew Bailey A divided central bank What stands out most from this decision is that the Bank of England's Monetary Policy Committee is becoming more divided. It’s no surprise that three hawks voted to hike rates by 75bp, not least given some have been vocal about the implications of sterling's weakness this year. But for the first time since the great financial crisis, we have a three-way split. One dove, Swati Dhingra, voted to hike by ‘only’ 25bp, signalling she’s worried about the demand outlook. For investors, this increasing divide should be seen as a sign that market expectations are unlikely to be met. Swap markets are now pricing a peak for the Bank Rate close to 5% next year. This increasing divide is a sign that market expectations are unlikely to be met Admittedly the statement makes it clear that extra government spending, and we'll get more details on that tomorrow, will lead to higher medium-term inflation, given that it should dramatically lower the risk of a deep recession. But the accompanying meeting minutes also explicitly highlight that the government’s energy price guarantee - which caps prices for households and businesses this winter - reduces the risk of inflation expectations becoming de-anchored. Headline inflation will be around 5pp lower by January compared to a scenario without the price cap.  A 75bp move later this year can’t be ruled out, and it’s clear the bank is delaying some judgement on the government’s fiscal plans until it has had a chance to update its forecasts ahead of the November meeting. But Thursday’s decision makes us more comfortable with our existing call that the BoE will simply hike by 50bp again in November, and by at least 25bp if not 50bp again in December. That would take Bank Rate a little above 3%. Undeterred, Sonia swaps are now pricing a terminal rate near 5% Source: Refinitiv, ING Gilts: no relief from the 50bp hike A smaller than expected 50bp hike (markets were pricing 70bp ahead of the meeting) failed to provide any relief to gilts. The swap curve continues to price a terminal rate near 5% and the curve’s knee-jerk reaction was to invert further. The tone of the statement is expectedly hawkish in highlighting strong inflation dynamics and in noting that the energy price guarantee would add to inflationary pressure in the medium term. That three MPC members voted for a 75bp hike is leading markets to expect larger rises than the 50bp delivered today in the future, seeing as this has become the standard increment at both the Fed and the ECB. It should also come as no surprise that the BoE is pressing ahead with its active quantitative tightening (QT) plans, through bonds maturing and through active sales to start next month, by £80bn in the first year. We understand the Bank's willingness to show that its balance sheet reduction plan won’t be scuppered by market volatility but we continue to argue that current gilt market conditions warrant greater attention. The BoE and the Treasury are  competing for private investor demand  Attention now turns to tomorrow’s ‘fiscal event’. Market expectations are for the majority of new energy-related spending to be financed via gilt issuance. Given that future wholesale gas prices are unknown, this amounts to an open-ended liability for the Treasury. The BoE didn’t step off the brink today on QT and will add to the number of gilts private investors have to buy. The BoE and the Treasury competing for this private investor demand is the key reason why gilt yields have risen faster than their peers. We continue to expect 10Y gilts to trade 200bp above Bund yields. This could put gilt yields at 4% in the near future. Fiscal support and QT mean private investors will have to absorb a record amount of gilts Source: Refinitiv, ING BoE can only stand and stare at the weaker pound With the market split on whether the BoE would tighten 50 or 75bp , the smaller 50bp adjustment has seen sterling sell-off by roughly 0.5%. Reading through the statement and the minutes it is quite remarkable how little the pound featured. Businesses are concerned that the weak pound is adding to their input costs. But the Bank had very little to say on sterling beyond that it had fallen 4.5% since its August meeting.  The lack of comment probably reflects the realpolitik of linking sterling weakness to growing fiscal concerns in the UK. It is quite remarkable how little sterling featured Ssterling will go into tomorrow’s ‘fiscal event’ on a fragile footing. The 4% sterling sell-off since August did go hand-in-hand with the sell-off in gilts. Concerns over unfunded government giveaways and debt sustainability challenges could well see the pound continue to underperform this year. A stronger dollar also favours GBP/USD to 1.10, while even EUR/GBP can press 0.88. And don’t expect UK authorities to emulate their Japanese counterparts by trying to support the pound with FX intervention. The UK doesn’t have sufficient FX reserves for that.     Read this article on THINK
Things May Soon Get Better In The Chinese Markets

USD/JPY rebounds following a massive over 500 pips intraday slump, back around mid-141.00s

FXStreet News FXStreet News 22.09.2022 15:38
USD/JPY retreats sharply from a fresh 24-year peak after Japan intervenes in the FX market. The intraday USD corrective pullback from a two-decade high contributes to the steep decline. Rising US bond yields, the Fed-BoJ policy divergence limits any further losses, at least for now. The USD/JPY pair witnessed a dramatic intraday turnaround on Thursday and plunges over 550 pips from the vicinity of the 146.00 mark, or a fresh 24-year high touched this Thursday. The pair maintains its heavily offered tone through the early European session and hits a nearly three-week low in the last hour, though rebounds thereafter. Japanese authorities intervened in the forex market for the first time since 1998 to stem the rapid decline in the domestic currency and trigger a massive sell-off around the USD/JPY pair. The strong intraday rally in the Japanese yen gives the US dollar bulls to take some profits off the table, especially after the recent strong run-up to a two-decade high. This was seen as another factor that aggravated the bearish pressure surrounding the major. That said, a recovery in the risk sentiment, as depicted by a generally positive tone around the equity markets, should keep a lid on any further gains for the safe-haven JPY. Apart from this, a fresh leg up in the US Treasury bond yields, bolstered by a more hawkish stance adopted by the Federal Reserve, supports prospects for the emergence of some USD dip-buying. This, in turn, assists the USD/JPY pair to rebound over 100 pips from the daily low. It is worth recalling that the Fed raised interest rates by another 75 bps on Wednesday and signalled more large rate increases at its upcoming policy meetings. In contrast, the BoJ left its policy settings unchanged and reiterated that it will continue powerful monetary easing. This marks a big divergence in the Fed-BoJ policy outlooks, which has been a key factor behind the yen's slump of over 25% against its American counterpart since the beginning of 2022.
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

What To Expeced Form The US Dollar To Japanese Yen Pair?

InstaForex Analysis InstaForex Analysis 23.09.2022 08:00
Yesterday, the yen was traded in the range of 550 points, significantly puncturing both resistance and support levels. The volume of daytime trading was a record for the year and it seems that all the nervous growth of the last two weeks has ended. The Marlin Oscillator approached the border with the territory of the declining trend, ready to attack it synchronously with the price that is assigned to the support of 141.25. Overcoming the support opens the next one with a target of 139.30. On a four-hour scale, the price is firmly retained under the balance indicator line (red), and the Marlin Oscillator is also declining in the negative area. We are waiting for the price to overcome the nearest support of 141.25 and its further decline to the target level of 139.30.   Relevance up to 04:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322465
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

Has The Pound To US Dollar Pair Chance Of Growth?

InstaForex Analysis InstaForex Analysis 23.09.2022 08:06
According to the Bank of England's meeting yesterday, which raised the rate by 0.50%, the pound held a wide-range trade, closing the day down 8 points. Since the upper shadow is longer than the lower shadow, we can assume that the bulls managed to drown out the bears' pressure since September 13th. The price is also converging with the Marlin Oscillator on the daily chart. The target level of 1.1170 was not reached, so we expect the expected correction to be short-term, maybe even up to 1.1385. Overcoming the level will create prerequisites for a more significant growth to 1.1525. The price convergence with the oscillator has already formed on the four-hour chart. The MACD line is approaching the level of 1.1385. Here, bulls, who have already got a taste, are likely to struggle with the bears' resistance.   Relevance up to 04:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322467
FX Daily: Testing the easing pushback

A Slight Increase In The Euro To US Dollar Price Is Visible

InstaForex Analysis InstaForex Analysis 23.09.2022 08:10
Yesterday, the euro closed the day at the opening level. The closure occurred under the resistance of 0.9850 and formally this means consolidating under the level. But since there is practically no body of the candle, the consolidation itself is formless, weak. At the same time, convergence is also formed with the Marlin Oscillator. A slight increase in the price is visible this morning, with the intention to go above 0.9850. Consolidating above the level opens the way to 0.9950. It is possible to continue growth to the 1.0032 level. All this growth will occur in the general direction of the downward trend. Upon completion of the correction, a new wave of medium-term decline will begin to develop. In this case, the key level of 0.9752 that we noted will be overcome with more energy, the price will try to settle at 0.9692 and go below (0.9625). The strong growth of the Marlin Oscillator indicates the beginning of the correction on the four-hour chart. Consolidating above 0.9850, and with it the transition of Marlin to a positive area will create a technical basis for further growth to the target level of 0.9950. A little below the 1.0032 level is the MACD line. If the price rises, this line will turn up, press against the linear level, strengthen it and create tension by the end of the correction. It will also turn out that in the area of 1.0032, the MACD lines of both scales will coincide, which will also strengthen the resistance. A puncture of this level is possible to 1.0051, to the high of September 20, but this puncture will already be false. This is the main scenario. An alternative scenario allows the price to rise to the upper area of a prolonged and broad consolidation of August-September at 1.0150.   Relevance up to 04:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322469
At The Close On The New York Stock Exchange Indices Closed Mixed

Falls At The Close Of The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 23.09.2022 08:16
At the close of the New York Stock Exchange, the Dow Jones fell 0.35% to a 3-month low, the S&P 500 fell 0.84%, and the NASDAQ Composite fell 1.37%. Merck & Company Inc was the top performer among the components of the Dow Jones in today's trading, up 2.98 points or 3.53% to close at 87.51. Quotes Johnson & Johnson rose by 2.90 points (1.78%), ending trading at 166.18. Salesforce Inc rose 2.52 points or 1.71% to close at 150.15. Shares of American Express Company were the leaders of the fall, the price of which fell by 5.68 points (3.82%), ending the session at 143.03. Boeing Co was up 3.20% or 4.58 points to close at 138.71, while Goldman Sachs Group Inc was down 2.43% or 7.79 points to close at 312. .92. Among the S&P 500 index components gainers today were Eli Lilly and Company, which rose 4.85% to 310.87, Merck & Company Inc, which gained 3.53% to close at 87.51. , as well as shares of Bristol-Myers Squibb Company, which rose 2.63% to end the session at 71.29. The biggest losers were Caesars Entertainment Corporation, which shed 9.44% to close at 37.62. Shares of Ball Corporation lost 8.66% to end the session at 49.23. FactSet Research Systems Inc dropped 8.29% to 394.75. Leading gainers among the components of the NASDAQ Composite in today's trading were Spero Therapeutics Inc, which rose 167.74% to hit 2.20, Avenue Therapeutics Inc, which gained 105.90% to close at 0.44, and also shares of Panbela Therapeutics Inc, which rose 46.39% to end the session at 0.35. Top Ships Inc. was the biggest loser, shedding 44.06% to close at 0.12. Shares of Ecmoho Ltd lost 42.72% and ended the session at 0.10. Quotes of Pintec Technology Holdings Ltd decreased in price by 28.80% to 0.42. On the New York Stock Exchange, the number of securities that fell in price (2596) exceeded the number of those that closed in positive territory (546), while quotes of 120 shares remained virtually unchanged. On the NASDAQ stock exchange, 3,011 stocks fell, 765 rose, and 257 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.29% to 27.35. Gold futures for December delivery added 0.24%, or 4.00, to $1.00 a troy ounce. In other commodities, WTI crude for November delivery rose 0.54%, or 0.45, to $83.39 a barrel. Brent oil futures for November delivery rose 0.50%, or 0.45, to $90.28 a barrel. Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.04% to 0.98, while USD/JPY fell 1.14% to hit 142.40. Futures on the USD index rose by 0.65% to 111.07.   Relevance up to 05:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/293918
The Upside Of The EUR/USD Pair Remains Limited

The Euro Keeps Falling And The Bearish Outlook Remains Very Good

InstaForex Analysis InstaForex Analysis 23.09.2022 08:22
EUR/USD 5M The EUR/USD pair first plunged to the new 20-year low at 0.9813, therefore it adjusted slightly, and then returned to the level of 0.9813 for a reason or no reason at all. This time the pair did not overcome the level, but it should be understood that over the past day and a half, the euro has already fallen significantly. So we would say that everything is going according to plan. Recall that we have repeatedly stated that the current downward trend does not look complete, and the foundation and geopolitics do not provide a reason to expect the euro's growth. Moreover, there are no technical signals for growth. And the US central bank meeting, its results and Federal Reserve Chairman Jerome Powell's speech... the market for once worked them out absolutely logically. Monetary policy in the US will continue to tighten, so the dollar's growth is quite logical. Thursday's trading signals were not all right, but you should remember that the pair has not been at the current price values for more than 20 years, so there are simply practically no levels to trade. All the signals of the past day were formed around the level of 0.9877, which itself was recently formed. The first buy signal turned out to be false, but it could be ignored, since at the time of its formation, the price had already gone up 90 points. The next three sell signals could be worked out, but only with one short position, since the price went down more than 15 points only in the third case so that traders could set a Stop Loss to breakeven. However, it was not necessary, and the position should have bee COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not give any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 23. The euro is plunging again, but not hopelessly. The Fed raised the rate by 0.75% and promised to raise it by another 1.25%. Overview of the GBP/USD pair. September 23. Even the Bank of England's rate hike did not help the British pound. Forecast and trading signals for GBP/USD on September 23. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The bears' prospects remain very good on the hourly timeframe. Now it is already possible to sum up the results of the Fed meeting, and we see that the euro responded with a new fall, and the dollar – with growth. This trend, from our point of view, will continue in the future. Now the euro is (again) under pressure from geopolitics. We allocate the following levels for trading on Friday – 0.9813, 0.9877, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as the Senkou Span B (1.0031) and Kijun-sen (0.9930) lines. The lines of the Ichimoku indicator can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "bounces" and "breakthrough" levels - extremes and lines. Do not forget about placing a Stop Loss order at breakeven if the price went in the right direction of 15 points. This will protect you against possible losses if the signal turns out to be false. Business activity indices in the service and manufacturing sectors will be published in the European Union and the United States on September 23. These data will clearly be in the shadow of the Fed meeting, but still a small reaction of the pair may follow them. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322457
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

What Trend Is Forecast For The Pound To US Dollar (GBP/USD) Pair

InstaForex Analysis InstaForex Analysis 23.09.2022 08:29
GBP/USD 5M The GBP/USD currency pair managed to update its 37-year lows, adjust and resume the downward trend on Thursday. Now the current low is 1.1212 and hardly anyone could have expected the pound to fall so low. However, this is still far from the limit, as the current fundamental and geopolitical backgrounds allow the British currency to continue to depreciate against the dollar. Do recall that the Federal Reserve raised the rate by 0.75% for the third consecutive time and, in fact, promised to raise it by 0.75% for the fourth time. The Bank of England raised the rate by 0.5%, which also corresponded to forecasts, but once again it did not help the pound in any way. Firstly, the divergence between the rates continues to increase. Secondly, the market continues to ignore all the tightening of the monetary policy of the Bank of England. Thirdly, geopolitics puts pressure on all risky currencies, including the pound. Thus, his new fall is absolutely natural. As for trading signals, there were three of them yesterday. All three are bounces from the 1.1344-1.1354 area. All three are for short positions. At first glance, it may seem that everything is fine, but these signals should still be clearly beaten in order to make money on them. After the first two signals, the pair went down 30 and 40 points. Thirty points is too little for the signal to be considered correct, and during the second signal the BoE summed up the results of its meeting. Therefore, the second signal should definitely have been ignored, and the first one should have been recognized as false (the transaction on it closed at breakeven or at minimum profit, since the position should have been closed manually at least half an hour before the BoE meeting). The third sell signal, thus, could be worked out, and it brought traders a profit of at least 60 points. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group closed 11,600 long positions and opened 6,000 shorts. Thus, the net position of non-commercial traders decreased by another 17,600, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new fall, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its decline has completely resumed and multi-year lows are updated almost every day, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 109,000 shorts and 41,000 longs open. The difference is again almost threefold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, one should not forget about the high demand for the US dollar, which also plays a role in the fall of the pound/dollar pair. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 23. The euro is plunging again, but not hopelessly. The Fed raised the rate by 0.75% and promised to raise it by another 1.25%. Overview of the GBP/USD pair. September 23. Even the Bank of England's rate hike did not help the British pound. Forecast and trading signals for EUR/USD on September 23. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair resumed its downward trend on the hourly timeframe, which should not surprise anyone, since two meetings of central banks took place this week. At this time, the pair is located below the lines of the Ichimoku indicator, so there is not a single signal to buy. We highlight the following important levels on September 23: 1.1212, 1.1354, 1.1442, 1.1649, 1.1760, 1.1874. The Senkou Span B (1.1543) and Kijun-sen (1.1334) lines can also be signal sources. Signals can be "bounces" and "breakthroughs" of these levels and lines. It is recommended to set the Stop Loss level to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator can move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels on the chart that can be used to take profits on positions. Business activity indices in the service and manufacturing sectors will be published in the UK and the US. However, we do not believe that the market will pay any attention to them after such two important events. Nevertheless, if the actual value of a particular report is very different from the forecast, a reaction may follow. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322459
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

What Traders Can Expect From The S&P 500 Index?

InstaForex Analysis InstaForex Analysis 23.09.2022 08:34
The ongoing correction has only just started making us feel uneasy and we should expect a move into the fear-zone or even extreme fear-zone before this correction is over. Taking into consideration how much the central banks and governments injected extreme liquidity into the market during the Covid-19 pandemic, we should expect an equally huge amount that needs to be removed from the financial system to bring it back into balance. So, we should be looking for a spike into the fear or even extreme fear zone before jumping on the train again for the next big upswing. Relevance up to 07:00 2022-09-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293924
RBA Governor Announces Major Changes at RBA Board as US Inflation Expected to Decline

Meta Platforms Remains Under Pressure, What Will Be The Next Move?

InstaForex Analysis InstaForex Analysis 23.09.2022 08:47
Meta Platforms remains under pressure, but is testing strong support in the 137 - 142 area and we can count a five-wave decline from the 384 peak. Finally, we see a clear divergence from the price in the RSI all points to a corrective bottom soon for a rally towards resistance at 235 and maybe even closer to the 50% corrective target at 263 before the next push lower. Short-term, we need a break above minor resistance at 150 to confirm that wave [A] has completed and wave [B] is in motion towards at least 235 and maybe 263 before down again in wave [C], but for now, we should stay focused on a possible bottom-building process for a corrective rally to take over.   Relevance up to 07:00 2022-09-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293926
Worrisome Growth Signals in Eurozone PMI: Recession Risks Loom Amid Persistent Inflation Pressures

Inflation Expectations In Malaysia And Singapore, Costco Shares Fell And More

Saxo Bank Saxo Bank 23.09.2022 08:53
Summary:  Massive tightening was delivered globally after the Fed’s 75bps rate hike, which saw Bank of England, SNB, Norges Bank, and several emerging market central banks joining the race. Bond yields rose to fresh multiyear highs, with 10yr hitting 3.70% and 2yr well above 4%. The strength in the US labor market continues to hint at more room for tightening, and equities slumped. Japan’s intervention to defend the yen put some brakes on the dollar rally, but it would likely be ‘temporary’ at best, and focus shifts to US/UK and Eurozone PMIs today. What is happening in markets?   The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) pressured by bond yields rising. S&P500 experiencing a rare technical breach With a parade of central banks joining the Fed in boosting rates to curb inflation, the US 10-year yield rose to 3.7% (its highest since 2011), while the two-year yield rose for the 11th day (which its longest rally in over three decades). This upward pressure in safe-haven yields is luring investors away from investing in companies exposed to inflation and facing earnings slowdowns. The Nasdaq Composite fell 1.4%, on Thursday, shedding 3% over the week, while the S&P500 lost 0.8% on Thursday, falling 3% Monday-Thursday. Of note, the S&P500 is experiencing a rare technical breach, as it trades under its 200-day moving average for over 100 sessions. The last time this occurred in the last 30 years; was in the tech bubble when the index fell 50% before hitting its trough, and before that, the Global Financial Crisis, when the index fell 40% before hitting its trough. The technical indicators show the index is poised for more downside with the June bottom likely to be retested in the coming weeks, then the next level of support is perhaps about the psychological level 3,500, which is 9.1% lower below current levels. Get to know the best performer in the US stock market this week, with the most momentum, General Mills The US’s biggest wheat producer General Mills (GIS) has outperformed the S&P500 this week and risen 7.4% and claimed the best performing post this week. It’s vital to reflect on why this is the case. We’ve been speaking about the Wheat (WHEATDEC22) price of late, being supported higher due to deteriorating global wheat supply, and now with Russia mobilizing fleet against Ukraine, the wheat price move supported higher again, on concerns Ukraine’s export terminal will be shut once more. Wheat is also in a technical uptrend, so we think stocks General Mills could be a stock to watch ahead, as its earnings are likely to swell. In the S&P500 this week, following General Mills (GIS) higher is; Kellogg and Campbell Soup, as the second and third best performers in the S&P500. Costco (COST) was down over 2% post-market on Thursday despite reporting better-than-expected earnings results.  Australia’s ASX200 (ASXSP200.1) to react to the Fed after being closed yesterday for a public holiday On Friday morning the futures are surprisingly calm, with the ASX200 suggested to only open 0.3% lower. So far this week, the ASX200 has once again outperformed global equities and only lost 0.5%, which is a stark contrast to the S&P500’s drop of 3%.  All eyes will be in cybersecurity stocks with Optus investigating a cyber-attack which may have led to authorized access of customer information. In terms of economic news to watch, S&P Global releases September PMI results. As for stocks to watching Fonterra might see increased bids after its APAC chief executive said she sees strong sales ahead for dairy protein. Rio Tinto will also be on watch after it signed a pact to promote low-carbon solutions for the steel value chain. Rio’s focus areas include low-carbon technology, blast furnace and basic oxygen furnace optimization and carbon capture utilization. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong’s Hang Seng index was at 11-year lows yesterday amid the massive global tightening as well as rising geopolitical tensions. HSI later recovered some of the losses to end the day down 1.6%. Hong Kong's de-facto central bank mirrored the tightening and raised its base lending rate by 75 basis points to 3.5% with immediate effect. Hong Kong’s banks have waited through five rounds of rate hikes this year before moving. More pain is in store for Hong Kong’s borrowers, as the HKMA has been conducting its monetary policy in lockstep with the Fed since 1983 to maintain the local currency’s peg to the US dollar. EV shares tumbled with Xpeng down 11.6% and Nio falling 7.5%. Property sector continued to show weakness, with NWD down 3.4%. Meanwhile, CSI300 ended the day down 0.9% EURCHF ignored the intervention warnings EURCHF surged to 0.9700+ levels from 0.9465 after the SNB’s 75bps rate hike remained short of market’s expectation of a 100bps move. USDCHF also moved higher to touch 0.9850 from sub-0.9650 levels, but that was helped by a weaker US dollar following Japan’s intervention to defend the yen. With higher inflation forecasts, one can argue that there will be more room for the SNB to raise rates, and the CHF’s haven status could also come to its rescue as the case for economic slowdown gets stronger with the massive global tightening being delivered. Crude oil (CLU2 & LCOV2) focus back on supply issues Crude oil edged higher as OPEC warned of additional cuts to output. Nigeria’s oil minister, Timipre Sylva, said that OPEC would consider additional cuts if crude prices fall because current levels are affecting the budget of some member states. This helped the crude oil market to shrug off the massive tightening being delivered. A softer USD in the aftermath of Japan’s intervention also created room for the oil prices to focus on the demand-supply fundamentals. WTI futures rose to highs of $86/barrel before some easing, while Brent touched $92+.   What to consider? SNB delivers a 75bps rate hike The 75bps rate hike by the Swiss National Bank lifted the policy rate out of NIRP to 0.50% but disappointed the markets which had started to look for a 100bps rate hike. Guidance that further rate hikes cannot be ruled out was also accompanied by repeating guidance that they are willing to intervene in FX markets as necessary with Chairman Jordan subsequently stressing they are ready to step in to prevent excessive weakening or strengthening of the Franc. Bank of England goes for a dovish 50bps as recession concerns imminent While the consensus was looking for a 50bps rate hike from the Bank of England, market had started to price in a case for 75bps rate hike as well and so the decision to hike rates by 50bps was a slight disappointment. More so, the decision was not unanimous with three members supporting a 75bps move and one calling for a smaller 25bps move. However, the BoE confirmed that they are going to reduce their holdings of government bonds by GBP 80bln over the next 12 months, although the schedule remains open to amendments. Additionally, the BoE retained its guidance that they will continue to “respond forcefully” as necessary to inflation and while the peak forecast was reduced vs August’s update, it remains elevated and well above target. Finally, the Bank has downgraded its view on the UK economy in the near-term, Q3 2022 is now expected to see GDP declining by 0.1% (vs August projection of +0.4%), for a second quarter of contraction; a forecast which, if confirmed by the ONS release, implies the economy is already in a technical recession. US jobless claims suggests a resilient labor market Initial jobless claims marginally rose to 213k from the revised lower 208k but it was beneath the expected 218k. Meanwhile, continued claims fell to 1.379mln (prev. 1.401mln), also lower than the consensus 1.4mln, and dipped beneath 1.4mln for the first time since mid-July. While the strength in the labor market still remains intact given the large number of open positions in the American job market, some moderation can be expected in the coming months with the rapid pace of tightening and still-strained supply chains affecting output. However, as the Fed noted yesterday, the pace of rate hikes is set to continue despite some economic/labor market pain. Japan’s intervention temporarily strengthens the yen Japan’s first market intervention in over two decades came right after a hawkish FOMC and a steady policy decision by the Bank of Japan, with the widening yield differential between the US and Japan continuing to weigh on the Japanese yen. The intervention announcement came as USDJPY surged above 145 – the level that has been the line in the sand for last several weeks – and pair dropped to 140.36 over the next few hours. But as with most unilateral interventions, the effect was short-lived and USDJPY returned to 142+ levels subsequently, just as we had expected here. More steps remain likely, and the US Treasury said it understood Tokyo's move, but stopped short of endorsing it. Eurozone PMIs on the card to gauge how hawkish ECB can get Eurozone PMIs are likely to dip further into contractionary territory as energy price hikes weigh on spending and business plans. Manufacturing PMIs are likely to ease to 48.8 in September from 49.6 previously, and services are expected to fall to 49.1 from 49.8, according to Bloomberg consensus estimates. A weaker-than-expected number could temper the hawkish ECB bets for the October meeting. Singapore and Malaysia inflation to see further upside pressures Singapore’s headline inflation likely jumped further above the 7% mark in August from a reading of 7% YoY in July, underpinned by higher food and energy prices globally, higher rents due to under-supply, and demand side pressures from regional reopening and a pickup in tourism. Malaysia’s continued ban on chicken exports is also adding to the food inflation, and further tightening from the Monetary Authority of Singapore at the October meeting remains likely. Meanwhile, Malaysia’s inflation also likely rose further in August from 4.4% YoY in July due to higher commodity prices and weaker ringgit, as well as the strength in consumer demand. Bank Negara Malaysia’s next meeting is only scheduled in November, before which we will have another CPI print out. However, it can be assumed that monetary tightening will likely continue. Costco outperforms. Is this a sign of what to expect for fourth quarter earnings season? Costco reported fourth quarter earnings results that beat average analysts forecast, with total revenue hitting $72.09 billion, vs the $70.3 billion expected. It comes as fourth quarter membership fees rose 7.5% year on year, to $1.33 billion and accounted for 2% of the retailer's revenue. Although the company typically raises membership fees every five to six years (with its last fee increase in June 2017), Costco held off on rising fees “at this time”. Costco flagged that it sees some beginnings in the inflation situation improving, while it also expects to sell an overstock of holiday goods this season, which was left over from last year. Costco shares fell 2% post market after their results, implying its shares will sour when the market opens.    For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-sept-23-2022-23092022
Middle Distillate Inventories Are Tight Around The Globe

The Global Container Shipping Is Weakening, The Bank of England Decisions And More

Saxo Bank Saxo Bank 23.09.2022 09:02
Summary:  Markets continue to absorb the impact of the FOMC meeting and other central banks continuing to tighten yesterday, with the chief concern for risk sentiment actually the leap in long US treasury yields yesterday, which more directly affect asset valuation models. The US 10-year yield benchmark jumped nearly 20 basis points yesterday to above 3.70% and thus to a new 11-year high. Elsewhere, the latest consumer confidence survey in Europe showed record low sentiment ahead of flash September Manufacturing and Services PMI’s out this morning from France, Germany and the Eurozone.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Further weakness in US equities with the S&P 500 futures posting a new lower close for the cycle and continuing down this morning trading around the 3,770 level. The next big level to watch on the downside is 3,740 in S&P 500 futures which was the big support level multiple times back in July. US equities are naturally being dragged lower from the US bond yields pushing higher with the US 10-year yield rallying to 3.71% the highest since early 2010. In addition, the US leading indicators for August were weakening further with the y/y index pushing into the most negative level since the Great Financial Crisis excluding the dip during the pandemic suggesting the US economy could slip into a recession within the next 6-9 months. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong’s Hang Seng index was at 11-year lows yesterday amid the massive global tightening as well as rising geopolitical tensions. HSI later recovered some of the losses to end the day down 1.6%. Hong Kong's de facto central bank mirrored the tightening and raised its base lending rate by 75 basis points to 3.5% with immediate effect. Hong Kong’s banks have waited through five rounds of rate hikes this year before moving. More pain is in store for Hong Kong’s borrowers, as the HKMA has been conducting its monetary policy in lockstep with the Fed since 1983 to maintain the local currency’s peg to the US dollar. EV shares tumbled with XPeng down 11.6% and Nio falling 7.5%. The property sector continued to show weakness, with NWD down 3.4%. Meanwhile, CSI300 ended the day down 0.9%. USDJPY volatile on BoJ intervention Japan’s first market intervention to support the yen in over two decades came right after a hawkish FOMC and a steady policy decision by the Bank of Japan, with the widening yield differential between the US and Japan continuing to weigh on the Japanese yen. The intervention announcement came as USDJPY surged above 145 – the level that has been the line in the sand for last several weeks – and pair dropped to 140.36 over the next few hours. But as with most unilateral interventions, the effect was short-lived and USDJPY returned to 142+ levels subsequently, just as we had expected here. More steps remain likely, and the US Treasury said it understood Tokyo's move, but stopped short of endorsing it. EURCHF ignored the intervention warnings EURCHF surged to 0.9700+ levels from 0.9465 after the SNB’s 75bps rate hike remained short of market’s expectation of a 100bps move. USDCHF also moved higher to touch 0.9850 from sub-0.9650 levels, but that was helped by a weaker US dollar following Japan’s intervention to defend the yen. With higher inflation forecasts, one can argue that there will be more room for the SNB to raise rates, and the CHF’s haven status could also come to its rescue as the case for economic slowdown gets stronger with the massive global tightening being delivered. Gold (XAUUSD) holding up despite the dollar and yield strength Gold has held up well despite multiple rate hikes and the dollar reaching multi-year highs against several major currencies.  By continuing to raise interest rates while also raising expectations for lower growth and rising unemployment the FOMC is signaling a recession is a price worth paying for getting inflation under control. Putin’s increasingly desperate measures and threats regarding his war in Ukraine has helped support gold and shield it from losses but geopolitical support aside, the yellow metal may struggle as long yields continue to rise and the market continues to price inflation sub 3% in a year from now. Resistance has moved to $1690 while below $1654, last week's low, the market may target the 50% retracement of the 2018 to 2020 rally at $1618. Crude oil (CLX2 & LCOX2) Crude oil remains stuck near the lower end of its recent tight range with the Powell versus Putin battle (demand versus supply) not having a clear winner so far. Brent and WTI are nevertheless both heading for a small fourth weekly loss as the global economic outlook grows darker following a week where central banks around the world, led by the US Fed continued to apply the brakes through rate hikes in order to curb runaway inflation. A difficult and potentially volatile quarter awaits with multiple and contradictory uncertainties having their say in the direction. WTI support at $82 and $87.50 in Brent. Wheat futures jump driven by Ukraine and weather concerns Chicago and Paris wheat futures, two of the best performing commodities markets this week, trade at a two-month high supported by risks of a deepening conflict in Ukraine putting the UN supported grain export corridor at risk, and dry weather in crop areas of Argentina and the U.S. Plains. This despite a forecast from the International Grains Council pointing to an increased 2022/23 global wheat production. Paris Milling wheat (EBMZ2) reached €350 per ton on Thursday with support now the previous triple top at €340 per ton. In Chicago the December wheat contract (ZWZ2) reached a $9.22 per bushel high but for a second day in a row failed to close above the 200-day moving average at $9.16 per bushel. US treasuries (TLT, IEF) A key day for longer US treasuries yesterday, with the US 10-year treasury benchmark closing nearly 20 basis points higher yesterday to a prominent new cycle high above 3.70%. Perhaps the most interesting development was that the move sharply steepened the US yield curve, with the 2-10 slope rising to -41 bps from below -50 bps the day before. Are markets concerned the Fed cycle will extend for longer, that more treasury supply will be coming from the Fed’s QT picking up pace or from the Bank of Japan selling treasuries to fund intervention, that the US growth outlook is actually more positive than previously thought or all of the above? Whatever the cause, US long treasury yields are likely to prove a key driver across markets as long as they continue to rise to new cycle highs. What is going on? US jobless claims suggest a resilient labor market Initial jobless claims marginally rose to 213k from the revised lower 208k but it was beneath the expected 218k. Meanwhile, continued claims fell to 1.379mn (prev. 1.401mn), also lower than the consensus 1.4mln, and dipped beneath 1.4mln for the first time since mid-July. While the strength in the labor market remains intact given the large number of open positions in the American job market, some moderation can be expected in the coming months with the rapid pace of tightening and still-strained supply chains affecting output. However, as the Fed noted yesterday, the pace of rate hikes is set to continue despite some economic and labor market pain. SNB delivers a 75bps rate hike The 75 bps rate hike by the Swiss National Bank lifted the policy rate out of NIRP to 0.50% but disappointed the markets which had started to look for a 100bps rate hike. Guidance that additional rate hikes cannot be ruled out was also accompanied by repeating guidance that they are willing to intervene in FX markets as necessary with Chairman Jordan subsequently stressing, they are ready to step in to prevent excessive weakening or strengthening of the Franc. Bank of England goes for a dovish 50bps as recession concerns imminent While the consensus was looking for a 50bps rate hike from the Bank of England, market had started to price in a case for 75bps rate hike as well and so the decision to hike rates by 50bps was a slight disappointment. More so, the decision was not unanimous with three members supporting a 75bps move and one calling for a smaller 25bps move. However, the BoE confirmed that they are going to reduce their holdings of government bonds by GBP 80bln over the next 12 months, although the schedule remains open to amendments. Additionally, the BoE retained its guidance that they will continue to “respond forcefully” as necessary to inflation and while the peak forecast was reduced vs August’s update, it remains elevated and well above target. Finally, the Bank has downgraded its view on the UK economy in the near-term, Q3 2022 is now expected to see GDP declining by 0.1% (vs August projection of +0.4%), for a second quarter of contraction; a forecast which, if confirmed by the ONS release, implies the economy is already in a technical recession. Global container shipping rates are in free fall The collapse in global container shipping rates is gathering pace with the Drewry Composite down 10% on the week to $4,472 per 40 feet box, and lowest since Dec 2020. Down 57% from the Sept 21 peak but still three times higher than the pre-pandemic average, suggesting further downside as the global economy continues to lose steam. All the major China to US and EU routes have slumped. Costco earnings are strong Costco reported fourth quarter earnings results that beat average analysts' forecast, with total revenue hitting $72bn vs est. $70.3bn. It comes as fourth quarter membership fees rose 7.5% y/y to $1.33bn and accounted for 2% of the retailer's revenue. Although the company typically raises membership fees every five to six years (with its last fee increase in June 2017), Costco held off on rising fees “at this time”. Costco flagged that it sees some beginnings in the inflation situation improving, while it also expects to sell an overstock of holiday goods this season, which was left over from last year. The retailer said that the biggest cost pressures were now in labour expenses. General Mills, the best performer in the S&P500 this week The US biggest wheat producer General Mills has outperformed the S&P500 this week and risen 7.4% due to a much better than expected earnings release and strong wheat prices recently related to Russia’s escalation in its war in Ukraine. AUDNZD hit a new high after NZ trade balance disappointed again AUDNZD rallied to fresh 9-year high at 1.1371 with the next potential target in focus being the 2015 high at 1.1430. The uptrend continued after NZ reported its trade balance worsened in August trade data after NZ’s imports accelerated while exports have declined. The deficit in NZ Trade Balance widened further to -$12.28B vs. the prior release of -$11.97B on an annual basis. This is a stark contrast to Australia, which is reporting record surpluses in its trade balance, due to exporting record amounts of coal. What are we watching next? Eurozone PMIs on the card to gauge how hawkish ECB can get Eurozone PMIs are likely to dip further into contractionary territory as energy price hikes weigh on spending and business plans. Manufacturing PMIs are likely to ease to 48.8 in September from 49.6 previously, and services are expected to fall to 49.1 from 49.8, according to Bloomberg consensus estimates. A weaker-than-expected number could temper the hawkish ECB bets for the October meeting. Chicago Fed National Activity Index and US financial conditions With US leading indicators y/y dipping into the most negative territory since the Great Financial Crisis excluding the dip during the pandemic, the Chicago Fed National Activity Index and US financial conditions updates for August and latest week respectively are important to watch for equity sentiment. Earnings calendar this week Today’s earnings focus is Carnival reporting FY22 Q3 results (ending 31 August) with revenue expected to rise 800% y/y to $4.9bn as the cruise line industry is coming back from years of subdued demand due to the pandemic. Today: Carnival Economic calendar highlights for today (times GMT) 0715-0800 France, Germany, Eurozone Flash September Manufacturing and Services PMI 0830 - UK Sep. Flash Manufacturing and Services PMI 1230 - Canada Jul. Retail Sales 1345 – US Manufacturing and Services PMI 1800 - US Fed Chair Powell to speak at event Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-23-2022-23092022
PLN Soars to Record Highs Ahead of NBP Decision

What Options Should Traders Consider When It Comes To The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 23.09.2022 09:17
Analysis of transactions in the EUR / USD pair Euro was unable to cling around 0.9900 so it quickly returned to yearly lows. The reason was the US jobless claims report yesterday, which reminded traders of why they bet on dollar in the current environment. For this, too high inflation is to blame as it forces the Federal Reserve to act more aggressively. A number of reports are due out today, such as the index of business activity in the manufacturing sector, the service sector and composite index of Eurozone countries. All of them do not carry anything good, so it is likely that a new wave of sell-offs will be seen in euro, which will push it beyond yearly lows. Similar data from the US will be released in the afternoon, but there the indices may surprise traders. This could lead to another rise in dollar, especially if Fed Chairman Jerome Powell talks about further rate hikes in his speech. For long positions: Buy euro when the quote reaches 0.9845 (green line on the chart) and take profit at the price of 0.9897. However, growth is unlikely especially if the Euro area reports weak economic statistics. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9816, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9845 and 0.9897. For short positions: Sell euro when the quote reaches 0.9816 (red line on the chart) and take profit at the price of 0.9771. Pressure will return amid a bad data in the US and continued hawkish policy by the Fed. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can be sold at 0.9845, but the MACD line should be in the overbought area as only by that will the market reverse to 0.9816 and 0.9771. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 08:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322487
The EUR/USD Price May Fall Under 1.0660

The Pressure On The Euro Clearly Persisted After The Recent Events

InstaForex Analysis InstaForex Analysis 23.09.2022 09:26
Several cool market entry signals were formed yesterday, which made it possible to make good money. Let's look at a 5-minute chart and figure out what happened. I paid attention to the levels 0.9813 and 0.9861 in my morning forecast and advised making decisions on entering the market there. The bears attempt to continue the euro's decline in the morning had failed. The test and forming a false breakout in the area of 0.9813 led to a signal for long positions on the euro, which resulted in growth by more than 40 points in the 0.9861 area. A breakthrough and reverse test of this range from top to bottom resulted in creating another signal for entering long positions, which allowed us to pick up about 20 more points. The euro was under pressure in the afternoon after we received good statistics on the US labor market, and a breakthrough and a reverse test from the bottom up of 0.9847 gave a sell signal. As a result, the pair collapsed into the 0.9813 area. As in the morning, the bulls were more active there, which led to a false breakout, a buy signal and growth back to 0.9847. When to go long on EUR/USD: The pressure on the euro has clearly persisted after recent statements by Federal Reserve Chairman Jerome Powell, who promised that he would crush inflation by any means after the Open Market Committee raised interest rates by another 75 basis points. Yesterday's labor market data only reinforced the descriptions that the Fed will continue to act quite aggressively. As for statistics, today there are quite a large number of economic indicators on activity in the eurozone, which is expected to fuel the decline, which is a consequence of the European Central Bank's policy, following on the heels of the US central bank. If the data on the index of business activity in the manufacturing sector of the eurozone, the index of business activity in the services sector and the composite index of business activity disappoint, do not be surprised if the euro goes to update annual lows. In such conditions, it is not necessary to count on the level of 0.9813. This area has already been tested twice and only another false breakout in the area of 0.9813 creates a new buy signal. The target of the upward correction in this case will be the level of 0.9853, formed by yesterday's results. Only a breakthrough and a top-down test of this range, together with strong statistics on the eurozone, will hit the bears' stop orders, creating another signal to open long positions with the possibility of a dash up to the 0.9898 area. A more distant target will be the resistance of 0.9952, where I recommend taking profits. In case EUR/USD falls further, which is more likely, and the bulls are not active at 0.9813, the pressure on the pair will increase, which will lead to the continuation of the bearish trend. The optimal solution for opening long positions in such conditions would be a false breakout near the 0.9770 low. I advise buying EUR/USD immediately for a rebound only from 0.9723, or even lower – around 0.9684, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: Bears control the market after yesterday's major sell-off from the 0.9900 level. Given that there are no special reasons to buy risky assets yet, I expect a further decline in the pair. The most optimal option for short positions in the current conditions will be after the pair grows in the first half of the day to the area of 0.9853 and a false breakout forming there. This will lead the euro to a repeated update of the annual low of 0.9813, the breakdown and consolidation below which, with a reverse test from the bottom up, will create another sell signal with the removal of bulls' stop orders and a larger fall of the pair to the area of 0.9770. A more distant target will be the 0.9723 area, where I recommend taking profits. In case EUR/USD jumps during the European session, as well as the absence of the bears at 0.9853, and there are moving averages playing on the bears' side, demand for the euro will return by analogy with yesterday, which will move the pair to the horizontal channel. However, nothing terrible will happen for them. An upward correction will lead to the next resistance of 0.9898. In this scenario, I recommend opening short positions only if a false breakout is formed. You can sell EUR/USD immediately on a rebound from the high of 0.9952, or even higher – from 0.9996, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT report) for September 13 logged a decline in short positions and a slight increase in long positions. This suggests that the European Central Bank meeting and a sharp increase in interest rates immediately by 0.75% influenced traders who preferred to take profits at current levels even despite the approaching Federal Reserve meeting. This week, the Open Market Committee is likely to raise rates by at least 0.75%, but there are rumors in the market that some politicians are in favor of raising the rate by 100 basis points, or 1.0%. This will lead to increased bearish momentum and the euro's new collapse against the US dollar. Considering the US inflation data for August of this year, the development of such a scenario cannot be ruled out. However, it should be understood that the European Central Bank is also no longer "sitting on the sidelines" and is starting to catch up with the Federal Reserve, reducing the gap between returns. This plays on the side of long-term bulls of the euro, who are counting on a recovery in demand for risky assets. The COT report indicated that long non-commercial positions rose by 2,501 to 207,778, while short non-commercial positions decreased by 22,011 to 219,615. At the end of the week, the overall non-commercial net position remained negative, but rose slightly to -11,832 from -36,349, which indicates the continuation of the alignment of the upward correction for the pair and groping the bottom. The weekly closing price increased and amounted to 0.9980 against 0.9917. Indicator signals: Moving averages Trading is below the 30 and 50-day moving averages, indicating an attempt by the bears to regain control of the market. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of growth, the upper border of the indicator in the area of 0.9875 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 08:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322477
The Upside Of The EUR/USD Pair Remains Limited

The Correlation Between The EUR/USD and USDX Markets Is Directly Opposite

InstaForex Analysis InstaForex Analysis 23.09.2022 09:35
Technical Market Outlook: The EUR/USD pair made another lower low as the sell-off continues. At the time of writing the article the local low was made at the level of 0.9771, but the target for bears is seen at 127% Fibonacci extension located at 0.9744. No nearest technical support in view, however, the resistance is seen at 0.9901 and 0.9867. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the longer term down trend is reversed. Please watch the USDX as the correlation between this two markets (EUR/USD and USDX) is directly opposite. Weekly Pivot Points: WR3 - 1.01231 WR2 - 1.00595 WR1 - 1.00262 Weekly Pivot - 0.99959 WS1 - 0.99626 WS2 - 0.99323 WS3 - 0.98687 Trading Outlook: Despite the recent relief rally towards the short-term support, the EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Please notice, there is plenty of room for the EUR to go down.     Relevance up to 09:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293952
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The Pound To US Dollar Market Is In The Pull Back Mode

InstaForex Analysis InstaForex Analysis 23.09.2022 09:37
Technical Market Outlook: The GBP/USD pair has made a new swing low at the level of 1.1187 as the down trend continues below the multi-year technical resistance located at 1.1410. The market participants await the UK PMI data scheduled for release today at 9:30 AM. The intraday technical resistance is located at the levels of 1.1351 and 1.1264. Please keep an eye on the market behavior during the news release as the volatility might be extremely high. Weekly Pivot Points: WR3 - 1.15678 WR2 - 1.14810 WR1 - 1.14335 Weekly Pivot - 1.13942 WS1 - 1.13467 WS2 - 1.13074 WS3 - 1.12206 Trading Outlook: The bears tested the level of 1.1410 (2020 swing low) not so long ago and now the market is in the pull back mode.The bearish pressure is still strong and the technical support might be violated. On the other hand, in order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th). Relevance up to 09:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Read more: https://www.instaforex.eu/forex_analysis/293954
Bitcoin Maintains A Steady Bullish Potential

The Bank of Russia And An Agreement Enabling Cross-border Settlements In Cryptocurrencies, Bitcoin Continues Its Downward Trend

InstaForex Analysis InstaForex Analysis 23.09.2022 09:43
Crypto Industry News: The Russian Federation deputy finance minister Alexei Moiseev said that the draft law that has been prepared contains provisions on "how to obtain cryptocurrency, what can be done with it" and how to use it in cross-border settlements. We also learned that the Bank of Russia and the Ministry of Finance of the country have reached an agreement enabling cross-border settlements in cryptocurrencies. According to Thursday's report by the Russian agency "Kommersant", Russia's deputy finance minister Moiseev said that his ministry had agreed with the central bank regulations that would allow citizens to send cross-border payments using cryptocurrencies. The proposed policy change is said to allow Russian citizens to access digital wallets. "[The Act] generally describes how to acquire cryptocurrency, what can be done with it and how it can (...) be used in cross-border settlements"-Moiseyev said. Russian news agencies also report that the central bank has long discussed the issue of cross-border payments with government officials. The Bank of Russia has reportedly opposed the legal operation of cryptocurrency exchanges and the acceptance of such assets as legal tender. Technical Market Outlook: The BTC/USD pair had bounced from the extremely oversold market conditions on the H4 time frame chart. The nearest technical resistance is seen at the level of $19,347 and $19,679 and only a sustained breakout above this levels would change the outlook to more bullish. The weak and negative momentum on the H4 time frame chart still supports the short-term bearish outlook towards the level of $17,600 again, but any breakout above the local trend line might be considered bullish. Weekly Pivot Points: WR3 - $21,295 WR2 - $20,039 WR1 - $19,341 Weekly Pivot - $18,764 WS1 - $18,064 WS2 - $17,526 WS3 - $16,271 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 09:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293958
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

What Does The Movement Of Platinum (PLF) Look Like?

InstaForex Analysis InstaForex Analysis 23.09.2022 09:59
Platinum (#PLF): The chart shows the movement of platinum in the hourly (H1) chart. The support level of $897.0 is important for the trend to continue. In the event of a breakdown, a new target will be opened, that is, the level of $874.0 (as shown on the chart). However, this will happen only when the resistance level of $889.2 is broken. In case of a rebound from the resistance level, quotes may rise to $906.0. Good luck!   Relevance up to 09:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322503
Metals Update: Gold Demand Declines Marginally, Copper and Aluminium Positions Adjusted

Can Today's Statistics Help The Pound To US Dollar (GBP/USD) pair?

InstaForex Analysis InstaForex Analysis 23.09.2022 10:09
Analysis of transactions in the GBP / USD pair There is little chance that pound will update its yearly low today because of the upcoming statistics for the UK. Yesterday's decision of the Bank of England also had a negative impact on the quotes since interest rates were raised by 0.75% and the central bank said that it will continue to act more aggressively in order to completely defeat inflation. A number of reports are due out today, such as the index of business activity in the manufacturing sector, the service sector and composite index of the UK. The index for the services sector may show growth, but the rest will remain below 50 points, which will provoke a new wave of sell-offs in pound. Similar data from the US will also be released in the afternoon, and these indices may surprise traders. That is likely to lead to another rise in dollar, especially if Fed Chairman Jerome Powell talks about further rate hikes and fight against inflation. For long positions: Buy pound when the quote reaches 1.1252 (green line on the chart) and take profit at the price of 1.1289 (thicker green line on the chart). Growth is unlikely, but everything can change if traders fail to break through the yearly lows. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Pound can also be bought at 1.1227, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1252 and 1.1289. For short positions: Sell pound when the quote reaches 1.1227 (red line on the chart) and take profit at the price of 1.1188. Pressure will return if the UK reports weak economic statistics. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1252, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1227 and 1.1188. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 08:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322489
The White Metal (Silver) Is Manifesting A Lackluster Performance

Silver Has The Possibility Of Greater Decline And Lower Prices

InstaForex Analysis InstaForex Analysis 23.09.2022 10:29
Technical analysis: Silver has been trading downside this as I expected. There is the potential for the bigger breakdown and lower prices. Trading recommendation: Due to the fake breakout of the triangle in the background and strong reversal, I see potential for further drop. Watch for the potential selling opportunities on the intraday rallies with the downside objectives at the price of $18.78 and $18.53. Stochastic oscillator is fresh bear cross, which is another sign for the downside movement. Key resistance is set at the price of $20  
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Forex: Finally, Bank Of Japan (BoJ) Intervened! Euro: Could Today's Speeches Support Euro?

ING Economics ING Economics 23.09.2022 09:25
After a tumultuous week in FX where even the US Treasury understood Japan’s need for FX intervention on the back of ‘heightened volatility’, markets may be more calm today. The Central and Eastern Europe region is still looking for solid ground after the news from Russia and Hungary remains the number one topic USD: Calm down Yesterday’s FX intervention from the Bank of Japan (BoJ) has slowed the dollar bull trend little. The amount of dollars sold will not be revealed until 30 September, but it should be in the billions. While the US Treasury said the US did not jointly intervene with the BoJ, the fact that it said it ‘understood’ why the intervention took place could raise expectations that G20 finance officials tweak the laissez-faire FX language in their communique when they meet on 12 October. We doubt this intervention puts a top in the dollar, but investors will think twice about paying for USD/JPY over 145 now that the BoJ has started its intervention campaign. The US data calendar is light today and FX markets may choose to consolidate in narrow ranges after a volatile week. DXY to consolidate well within a 110.50-111.50 range. Chris Turner    EUR: PMIs to keep euro capped EUR/USD has remained on the back foot in line with the global risk sentiment and the market’s concerns about the latest developments in the Russia-Ukraine conflict. Today’s highlight in the eurozone will be the release of September PMIs, and investors are expecting a further drop in economic contraction territory. That should keep European sentiment weak, especially after yesterday’s consumer confidence hit a record low, and may prevent any relief rally in the EUR for the time being. The 0.9800 level is looking increasingly fragile. On the European Central Bank side, two hawks are set to speak: Bundesbank President Joachim Nagel and Latvia’s Martins Kazaks. Chances of hawkish comments lifting the euro at this stage are rather slim though. Elsewhere in Europe, markets are digesting two central bank decisions: in Switzerland (a 75bp hike) and in Norway (a 50bp hike). The former triggered a squeeze in EUR/CHF positions which led to a post-meeting rally, possibly due to some investors having expected a Riksbank-style 100bp move. However, we do not expect the EUR/CHF rally to last, since – as discussed in this article – we think the Swiss National Bank will guide the nominal EUR/CHF exchange rate lower to keep the real rate stable. The Norges Bank 50bp hike was largely expected and was followed by a very muted NOK reaction. As highlighted in our meeting review – we noticed a dovish tilt in yesterday’s policy message, as the Bank signalled how a slower pace of tightening may be warranted now that the Norwegian economy is showing signs of a slowdown. However, we would be careful before ruling out another 50bp hike in November just yet. All this is still set to be quite a secondary theme for NOK, which remains driven by external factors and faces lingering downside risks due to its very high beta to global risk dynamics. Francesco Pesole GBP: Fiscal event planning Sterling net-net was a little lower after yesterday’s divided Bank of England hike. Today sees the big reveal of Chancellor Kwasi Kwarteng's ‘fiscal event’. As noted recently, typically looser fiscal and tighter monetary policy is a positive mix for a currency – if it can be confidently funded. Here is the rub – investors have doubts about the UK’s ability to fund this package, hence the Gilt underperformance. With the BoE committed to reducing its Gilt portfolio, the prospect of indigestion in the Gilt market is a real one and one which should keep sterling vulnerable. We favour GBP/USD pressing 1.10 over the next month and EUR/GBP pressing 0.88. Chris Turner CEE: Expected rating outlook downgrade is another blow to the forint Hungary will again top today's calendar in the region. Apart from the labour market data, we will also hear Finance Minister Mihaly Varga's speech and later today Moody's will publish a rating review. Given the still uncertain developments in the discussions between the European Commission and the Hungarian government, we expect a downgrade in the outlook to negative, just as S&P did in August. The FX market in the region is looking for solid ground after the news from Russia, which for now may be provided by the stability of the gas price, and which remains the main driver. On the other hand, interest rate differentials across the region are reaching new lows after another sell-off in developed markets and the US dollar is also not improving the outlook for CEE FX. In a nutshell, the picture is mixed and it is hard to find a way out. In our view at the moment, the Polish zloty has the best chance of erasing this week's losses thanks to its long-term squeezed positioning, and could return below 4.740 EUR/PLN for now. The forint could also see some gains today, but a deterioration in the rating outlook will bring the EU money theme and the negative market sentiment of the previous days back into play in our view. The Czech koruna should continue to maintain the intervention band 24.60-70 EUR/CZK and we do not expect it to break out of these levels at least until the Czech National Bank meeting next week. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Gold Is Showing A Good Sign For Further Drop

Rising Economic Risks Are Helping Gold Find A Solid Low

InstaForex Analysis InstaForex Analysis 23.09.2022 11:38
The gold market is showing relative strength against the US dollar, which continues to trade near its highest level since 2002 In her latest research note, Nicky Shiels, head of metals strategy at MKS PAMP, said rising economic risks are helping gold find a solid low around $1,650, even as the Federal Reserve maintains its aggressive monetary stance by lowering growth forecast. On Wednesday, after raising interest rates by another 75 basis points, US central bank economic forecasts showed that the federal funds rate will peak in 2023 at around 4.6%. But despite the rise in interest rates, the Fed lowered its growth forecast for the US economy, suggesting its growth by 0.2% this year. And, compared with the June forecasts by 1.2%. During the press conference, Fed Chairman Jerome Powell warned consumers that as the central bank focuses on lowering inflation, economic trouble is not far off. Shiels noted that after Powell's press release, gold reached new weekly lows and then highs in just 45 minutes. According to her, this is "something that hasn't happened on FOMC day in a while." Moreover, Shiels added that bearish speculative positioning can now also work in gold's favor as there has been continuous strong selling throughout most of the summer. Gold has been so beaten up that it is becoming immune to excessive interest rate hikes by the Fed. Since gold prices are showing a strong rebound from two-year lows, the precious metal has enough momentum to rise by $50 in the near future. But for the full realization of the growth of gold prices, significant fundamental changes are needed.       Relevance up to 08:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322475
The US Has Again Benefited From Military Conflicts In Other Parts Of The World, The Capital From Europe And Other Regions Goes To The US

The Fed Can Tolerate Recessions, While Other Economies Need To Do Much More To Deal With Inflation

InstaForex Analysis InstaForex Analysis 23.09.2022 11:43
Measures taken by the US Federal Reserve to curb inflation in the country could lead to a recession in the global economy. To combat inflation, the Fed slowly exited the blocks, underestimating the rise in prices, considering this a temporary factor. And now, it will have to do much more to achieve the same effect, which means that advanced and emerging economies also have to do much more to cope with inflation. Emerging markets from Ghana to Kenya bear the brunt of Federal Reserve Chairman Jerome Powell's push to raise borrowing costs, causing global currencies to weaken and debt service costs to rise. The Fed's signal on Wednesday that it could tolerate a recession as a necessary trade-off to regain control of inflation means that the global economy could plunge into a deep recession. The biggest loss is the loss of trust. Whatever they do, they must restore trust. The only currency of central banks is trust. Rising US interest rates are effectively blocking frontier markets from capital markets, urging investors to consider fundamental factors rather than "hype."   Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322479
FX: Historic Bank's Of Japan Forex Intervention Supported USD/JPY Downward Move!

FX: Historic Bank's Of Japan Forex Intervention Supported USD/JPY Downward Move!

Jing Ren Jing Ren 23.09.2022 08:22
In this article: USD/JPY USD/CHF GBP/USD USDJPY pulls back for support The Japanese yen skyrocketed following the first Japanese currency intervention in 24 years. The pair swiftly reversed its course after flirting with the psychological level of 145.00. A break below 143.50 triggered a liquidation of leveraged positions. 140.50 along the 30-day moving average is a key level to probe buyers’ interest. A bounce would signal that the greenback is merely taking a breather and the uptrend remains intact in the medium-term. A rally back above 145.00 may carry the price to August 1998’ high at 147.50. Read next: Cryptocurrency: Bitcoin Up, Ethereum Price Found Support, Ripple Price (XRP) Jumped! | FXMAG.COM USDCHF tests key resistance The Swiss franc fell after the SNB's hike came short of the 100bp previously priced in. A clean cut above the support-turned-resistance at 0.9690 is a sign of strong interest. The double top at 0.9870 is a major hurdle after the pair went into a four-month long consolidation. Its breach would help the dollar reclaim parity and open the door to the previous ceiling at 1.0050, a step closer to a bullish continuation. In the meantime, the RSI’s overbought condition might cause a limited retracement and 0.9740 would be the first support. GBPUSD takes a breather The pound slipped as the BoE raised its interest rate by a moderate 0.5%. The bearish inertia has taken a front seat after Sterling slipped through March 2020’s lows (1.1420). The RSI’s repeated oversold situations have led to a brief pullback. The former demand zone around 1.1460 has become a supply zone where the bears could be expected to get in at a better price. Sentiment may only turn around if the bulls manage to push past 1.1700, which means that the path of least resistance seems to be towards 1.1100 for now.
Bank of England survey highlights easing price pressures

Yesterday's Decision Of The Bank Of England Did Not Help The Pound Rise

InstaForex Analysis InstaForex Analysis 23.09.2022 11:48
The British pound has already fallen below the 12th figure and is clearly not ready to stop there, as hard times are ahead with the continuation of the cost of living crisis in the UK, high inflation in the region of 10.0%, energy disruptions, and the economy sliding into recession - from which it will be quite difficult for the new prime minister to get out without another billion aid packages that are very expensive – given the current level of interest rates. Speaking of rates, yesterday the Bank of England voted to raise the base rate to 2.25% from 1.75%, as the central bank is striving with all the "fibers of its soul" to overcome high inflation exceeding five times the target. Yes, inflation in the UK fell slightly in August, but remained at 9.9% year-on-year, which is much higher than the BoE's 2% target. Energy and food prices have risen the most, but even core inflation, excluding these components, is still 6.3% year-on-year. By the way, this is the seventh consecutive time when the central bank raises rates, raising them to the level last seen in 2008. The press release explaining its decision points to the volatility of wholesale gas prices and the government's decision to impose restrictions on the payment of electricity bills, which, according to the central bank, will limit the further growth of the consumer price index. Nevertheless, the report says that since August there have been new signs of continued strengthening of domestic inflation, forcing the BoE to act ahead of the curve. "The labor market is limited, and internal costs and price pressures remain elevated. Although the electricity bill subsidy reduces inflation in the short term, it also means that household spending is likely to remain weaker than predicted in the August report," the report notes. BoE rate hike Five members of its Monetary Policy Committee voted for a 0.5 percentage point rate hike, and three voted for a 0.75 percentage point increase. One member voted for a 0.25 percentage point increase. Such a decision by the BoE could contribute to the pound's growth, but not in the current conditions, when the economy is leaping towards recession, the energy crisis is gaining momentum, and the new British Prime Minister Liz Truss is preparing another program of economic support. The Business Association of the British Chamber of Commerce, together with the BoE, expect that the UK will enter a recession before the end of the year. In addition to surges in energy prices, the country continues to face supply disruptions due to Covid-19 and Brexit, which reduces consumer sentiment and negatively affects retail sales. But the UK is not alone in raising interest rates. Most recently, the European Central Bank raised rates by 75 basis points, the Swiss central bank also raised rates by 75 basis points, as did the US Federal Reserve. GBP/USD As I noted above, the pound also collapsed to the 12th figure and the pressure on the pair is only maintained. Only after returning to 1.1270 will it be possible to expect bulls to become more active at the end of this week. This will create quite good chances for a larger upward correction, which will open a direct road to the area of highs: 1.1320 and 1.1360. The farthest target in the current bullish movement will be the 1.1400 area. If the pressure on the pair persists, bulls will have to try very hard to stay above 1.1215. Without doing this, you can see another major sale by 1.1160 and 1.1110. EUR/USD As for the technical picture of EURUSD, so far the bulls are resisting with all their might and do not want to surrender the market, but apparently this is inevitable. At the beginning of the European session, the euro has already returned to an annual low and clearly nothing good is expected in the near future. The bulls' task is to protect the support of 0.9810, but it is difficult to say how to do this amid weak statistics. A breakthrough of 0.9810 will push the euro lower at 0.9770, and a breakdown of this low will open up a real prospect for an exit at 0.9720 and 0.9660. It is quite difficult to talk about the prospects for the growth of risky assets in the current conditions. To begin with, the bulls need to return to 0.9860, which will allow them to reach 0.9900. It will be possible to talk about a return to parity only after a breakthrough of 0.9952 and 0.9996.       Relevance up to 09:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322501
The Forex Market Is Under Strong Pressure From Geopolitical Events And Statistics

The Forex Market Is Under Strong Pressure From Geopolitical Events And Statistics

InstaForex Analysis InstaForex Analysis 23.09.2022 12:47
Details of the economic calendar for September 22 The Bank of England, as expected, raised the rate by 50 basis points to 2.25%. At the same time, the regulator lowered its inflation forecast. According to their expectations, it may reach 11%, and inflation will peak in October. The market reaction was zero, because the rate increase by 50 bps has already been taken into account in the quotes. The pound sterling began to weaken. During the American trading session, weekly data on jobless claims in the United States were published, which recorded a decrease in their total volume. This is positive news for the US labor market. Statistics details: The volume of continuing claims for benefits fell from 1.401 million to 1.379 million. The volume of initial claims for benefits rose from 208,000 to 213,000. What is pushing the market? The first is the results of the September Fed meeting, where the regulator clearly indicated that the main goal is to curb inflation, and it is ready to further tighten monetary policy. The second factor is the Russia-Ukraine situation, where, at the moment, there is a large flow of information that puts speculators into action. Analysis of trading charts from September 22 The EURUSD currency pair, in the stage of a pullback from the low of the downward trend, locally returned to the previously passed level of 0.9900, where the price rebounded with a reverse move. The GBPUSD currency pair, after a short pullback, which was caused by a strong overheating of short positions, again moved to the decline. This movement indicates the prevailing downward sentiment among market participants who are in a stage of inertia. Economic calendar for September 23 Today, a preliminary estimate on business activity indices in Europe, the United Kingdom and the United States is expected to be published. Indices, except for the USA, are expected to decrease. Thus, the dollar may well receive support in the market. Time targeting: EU business activity indices – 08:00 UTC UK business activity indices – 08:30 UTC US business activity indices – 13:45 UTC Trading plan for EUR/USD on September 23 With the opening of European platforms, a new round of depreciation of the euro emerged, which led to the price holding below 0.9800. As a result, the speculative-inertial move continues to form, which allows the rate to decline to the subsequent control value of 0.9650, where the lower border of the flat 0.9650/1.0000 passed earlier in history. It should be noted that the market is already experiencing overheating of euro short positions, which allows for a new technical pullback. Trading plan for GBP/USD on September 23 The pound sterling, following the euro, continued to decline, which resulted to the breakdown of the level of 1.1200. A stable hold of the price below this level allows the subsequent weakening of the British currency towards the psychological mark of 1.1000. Also, do not forget about the overheating of short positions and possible technical pullbacks. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.     Relevance up to 10:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322511
Saxo Bank Podcast: US Equities Continue To Trade Up, Natural Gas In Europe, Bank of Japan Meeting Ahead And More

Podcast: The European Gas Market, Comments On Events At Central Banks

Saxo Bank Saxo Bank 23.09.2022 12:58
Summary:  Equities are sliding further yesterday and today as the market is rattled by sizeable upwards moves in the long end of the US yield curve with the US 10-year pushing beyond 3.7%. We also go through the series of central bank events yesterday from various rate decisions and most importantly the historic JPY intervention by the Bank of Japan. In addition we take a look at commodities and in particularly the European gas market which is set for its fourth straight weekly loss. Today's pod features Peter Garnry on equities, Ole Hansen on commodities, and John Hardy on FX and hosting. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-sep-23-2022-23092022
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

The Australian Dollar To US Dollar Pair: The Forecast For Next Year Is Positive

TeleTrade Comments TeleTrade Comments 23.09.2022 13:17
Economists at Westpac have lowered their forecast for the AUD/USD by year’s end from 0.69 to 0.65. However, they expect the pair to recover in the second half of the next year. End-2023 forecast also lowered to 0.72 from 0.75 “We have significantly lowered our 2022 end year ‘target’ for the AUD/USD to 0.65. That means that over the remainder of 2022 there will be periods when the aussie will trade below the 0.65 level given the high volatility in currency markets to date.” “We still expect the AUD to lift against the USD in 2023, with most of the recovery occurring in the second half of 2023 but have lowered our forecast for end-2023 for AUD/USD from 0.75 to 0.72.”
Analysis Of Situation Of The US Dollar To Swiss Franc Pair (USD/CHF)

The Reaction Of The Swiss Franc (CHF) To The Swiss National Bank (SNB) Decisions

TeleTrade Comments TeleTrade Comments 23.09.2022 13:22
The Swiss National Bank (SNB) hiked its policy rate by 75 bps, bringing the policy rate to positive territory. It would seem that this was still not enough for the market as the franc weakened. However, economists at Commerzbank expect CHF to remain bid. Goodbye negative rates “The SNB has upped the pace on its monetary policy tightening and hiked its key rate by 75 bps to 0.5% – and thus waved goodbye to almost 8 years of negative interest rates.” “The Swiss franc eased following the decision. Clearly, there had been a number of market participants who had expected a more significant rate step. The fact that the statement and comments by SNB governor Thomas Jordan were not particularly hawkish probably did not help either.” “The disappointment on the market might put further depreciation pressure on the franc, but the SNB once again confirmed yesterday that it would consider selling foreign currency reserves if the franc were to depreciate. A weak franc would increase the pressure on (imported) prices. The market is therefore likely to be cautious in this respect.” “The environment is likely to remain difficult for EUR. I, therefore, think that external factors such as the war in Ukraine, a looming energy crisis and economic concerns will quickly gain the upper hand again, with the franc principally remaining in demand.”
German labour market starts the year off strongly

The Weakening German Economy With No Positive Forecasts

TeleTrade Comments TeleTrade Comments 23.09.2022 13:34
German Manufacturing PMI arrives at 48.3 in September vs. 48.3 expected. Services PMI in Germany contracts further to 45.4 in September vs. 47.2 expected. EUR/USD accelerates declines towards 0.9750 on mixed German PMIs. The German manufacturing and services sectors’ contraction deepened in September as increasing energy costs weighed, the preliminary manufacturing activity report from S&P Global/BME research showed this Friday. The Manufacturing PMI in Eurozone’s economic powerhouse came in 48.3 at this month vs. 48.3 expected and 49.1 prior. The index tumbled to 27-month lows. Meanwhile, Services PMI dropped from 47.7 booked previously to 45.4 in September as against the 47.2 estimated. The PMI hit the lowest level in 28 months. The S&P Global/BME Preliminary Germany Composite Output Index arrived at 45.9 in September vs. 46.0 expected and August’s 46.9. The gauge also reached 28-month troughs. Key comments from Phil Smith, Economics Associate Director at S&P Global “The German economy looks set to contract in the third quarter, and with PMI showing the downturn gathering in September and the survey’s forward-looking indicators also deteriorating, the prospects for the fourth quarter are not looking good either.” “The deepening decline in business activity in September was led by the service sector, which has seen demand weaken rapidly as customers pull back on spending due to tightening budgets and heightened uncertainty about the outlook.” FX implications EUR/USD is accelerating the downside following the break of the 0.9800 level mixed German data. The spot was last seen trading at 0.9770, still down 0.60% on the day. 
The South America Are Looking For Alternatives To The US Currency

Fed, Bank Of England, And Historic FX Intervention - A Lot Of Things To Discuss In The Latest Market Insights Podcast By Oanda!

Craig Erlam Craig Erlam 23.09.2022 13:39
OANDA Senior Market Analyst Craig Erlam reviews the latest market news with Jonny Hart. They discuss the major central bank rate decisions including the Fed, BoE and CBRT and the first FX intervention by Japan in 24 years. Subscribe on Android This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Market Insights Podcast (Episode 377) - MarketPulseMarketPulse   Read next: Cryptocurrency: Bitcoin Up, Ethereum Price Found Support, Ripple Price (XRP) Jumped! | FXMAG.COM
Could The Price Of Lithium Affect Tesla's Performance, Whitehaven Shares Are Up

Could The Price Of Lithium Affect Tesla's Performance, Whitehaven Shares Are Up

Saxo Bank Saxo Bank 23.09.2022 13:43
Summary:  US earnings season is about to get underway, and Australia’s financial year reporting just wrapped up, so let's cover five hot stocks to watch. General Mills is the best performing US stock this week in the S&P500 after the Wheat price gained 24% in the month. Pilbara Minerals, is one of this week's best performers in the ASX after selling its lithium for a record price this week to China. Whitehaven Coal is another to watch, as it's benefiting from surging coal demand and prices, with its shares trading at brand new record highs in anticipation of another record profit. Lastly, we cover why Tesla and Apple are two of the most traded stocks at Saxo in September. General Mills  General Mills is the biggest wheat exporter in the US Its shares have been outperforming the market and are of the best performers in the US this year, up 22% Its shares are picking up momentum as the Wheat (WHEATDEC22) price has gained 24% in a month So what’s moving Wheat higher into a technical uptrend? South America wheat supply has been impacted by frost and rain, US supply is expected to fall due to dry conditions and drought in the US Heavy rains are headed for Australia for the third year in a row amid La Nina And lastly – with Russia mobilizing troops against Ukraine, this adds to supply concerns for Wheat, on concerns Ukraine’s export terminal could be shut once more. So General Mills is a stock to watch, as the wheat price rises, it boost its cashflow and share price growth.  Pilbara Minerals   Pilbara Minerals is Australia biggest exporter of lithium Its shares have gained almost 50% this year as the lithium price tripled in the last year, fueled by electric vehicle demand Pilbara Minerals auctioned off its lithium spodumene concentrate (or partly processed lithium) for a record price of AUD$7,708 with the shipment to go to China So who is buying Pilbara’s lithium? Two of Pilbara’s most known customers include China’s Genfeng and the car maker Great Wall. So what’s next? Well if the lithium price continues to rally amid the lack of supply and rising demand, Pilbara’s shares could stay elevated supported by expectations that higher cashflow and earnings growth are ahead. The International Energy Agency (IEA) forecast lithium demand to grow more than 40 times over the next two decades Pilbara operates on a Price to Earnings (PE) ratio of 25 times forward earnings estimates, which is comparatively cheaper than its peers. So Pilbara could be a stock to watch. Whitehaven Coal Whitehaven is Australia's biggest exporter of coal and the best performing stock in the global share market this year, among large companies Its shares are up 250% Last financial year Whitehaven's earnings rose 1,500% boosted by the coal price soaring to new record highs So what's next? The coal price is surging amid a lack of coal supply and rising demand  Demand for coal has been increasing as the world searches for cheap access to emergency energy Regions like India are experiencing a heat waves, while Australia has been hit by its coldest winter on record. The coal futures price, which is an indication of the future price of coal, is also continuing to move further higher into new record highs, simply telling us, that the spot coal price is likely to move higher yet again, as the world is facing a lack of energy reserves, and forward demand is also increasing. Peak coal demand season is December and January, so we expect the coal price to move higher as demand increases from coals biggest consumers (India and China) amid their winter.    Tesla   Tesla is one of most traded stocks at Saxo globally this month Across the world, Tesla electric vehicles are one of the most bought electric vehicles Its shares have had a bumpy ride this year, as the company’s been plagued by higher raw materials and commodity costs Although Tesla shares rallied up 50% from than their May low, there are now concerns some of those gains could fade, as the lithium price is back at record highs However on the positive side for Tesla;  Tesla is increasing some of its costs, such as increasing the price of supercharger station use in Europe And Tesla is controlling other costs where possible, by looking to make in-house battery cells As for new revenue streams; the Cybertruck’s production is set for mid-2023 Across Europe, Tesla is aiming to increase sales. For instance in Germany it wants to double sales growth, compared to last year, after opening new stores And in the US, across the entire electric vehicle market, all EV sales are expected to rise after the United States introduces new climate law and tax credits. Bloomberg estimates total EV industry sales will make up 52% of total car sales by 2030. That’s a huge jump compared to the 5% last year. And Tesla will be capturing some of this growth Tesla trades at a Price to Earnings (PE) ratio of 109 times forward earnings estimates, which make it looks expensive compared to Ford’s PE of 7 times. Given commodity prices are likely to continue to rise, and Bloomberg estimates suggest Tesla’s margins could be flat this year, before picking up in 2023, you might expect Tesla's shares be pressured before potentially rebounding later next year.   Apple   Apple is the one of the most traded stocks at Saxo globally this month Its shares have also had a bumpy ride, but its innovation should support the company’s shares growing in value over the long term Interestedly, Apple’s iPhone sales generate half of the group’s total revenue, and last quarter, total revenue stood at about $41 billion Apple's launch of its new iPhone, including its most expensive model yet, the iPhone 14 Pro model should also help next quarterly earnings. Why? Well iPhone 14 shipments are said to account 60-65% of orders, which is up from the previously estimated range of 55-60%. This means Apple could have a positive outlook when they release their next quarterly earnings in late October. Apples new watch and air pods should also bolster Apples outlook And going forward, Apple's customer retention is set to expand as it moves to a new subscription model. Apple estimates 98% of its customers want to upgrade their phone each year. So that’s a reason to perhaps consider Apple for the long term To find out more about the these companies or other opportunities, head to Saxo's Platform.   Source: https://www.home.saxo/content/articles/equities/looking-for-stocks-to-buy--here-are-five-to-watch-23092022
The Collapse Of The Silicon Valley Bank Weakened The Dollar And USD/JPY But Supported EUR/USD, AUD/USD, And GBP/USD

It's Incredible How Much Has Japanese Yen (JPY) Decreased In 2022! USD/JPY Lost 2.5% After The BoJ FX Intervention!

Kenny Fisher Kenny Fisher 23.09.2022 13:52
It was certainly a day to remember for the Japanese yen on Thursday. USD/JPY traded in a stunning 550-point range, as the yen fell sharply before reversing directions and closing the day up over 1 per cent. Things have calmed down today, as USD/JPY is trading quietly at 142.37. Japan’s currency intervention sends yen flying The yen has been on a dreadful slide, losing about 20% of its value against the US dollar this year. The markets had grown accustomed to verbal rhetoric from the Bank of Japan and the Ministry of Finance (MoF), which expressed their concerns about the yen’s depreciation and warned that all options were on the table, with no action to back up the comments. On Thursday, the yen breached the psychological level of 145, and this proved to be a line in the sand for Japanese officials. The day started with a rather muted BoJ meeting, with policymakers maintaining its ultra-loose policy and declaring that the Bank would increase stimulus if needed. This pushed the yen to a low of 145.90, which triggered a stunning response from the MoF, as it intervened to prop up the yen for the first time since 1998. The yen soared as much as 2.5% after the intervention, but the big question is whether such unilateral action will last, or will it only delay the yen’s downward trend. US Treasury yields are rising fast, and unless the BoJ tweaks policy, the US/Japan rate differential will continue to widen, which will send the battered yen even lower. Read next: Cryptocurrency: Bitcoin Up, Ethereum Price Found Support, Ripple Price (XRP) Jumped! | FXMAG.COM Another factor weighing on the yen is the contradictory policy between the BoJ and MoF, which was apparent yesterday and caused the yen’s wild ride. The MoF has intervened to prop up the yen, while at the same time the BoJ is keeping JGB rates at low levels, and Governor Kuroda has said more than once that a weak yen is not necessarily a bad thing. These conflicting signals invite speculation and yesterday’s currency intervention, although a bold move, may do little more than slow down the yen’s descent. USD/JPY Technical USD/JPY tested resistance at 144.71 but then retreated. Above, there is resistance at 146.49 USD/JPY is testing support 143.19. The next support line 141.88   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen settles down after wild ride - MarketPulseMarketPulse
The Grains Sector Saw Continued Demand| Acceleration In The Sale Of Gold

Fed Monetary Policy Will Drive Investment In Dividend Stocks

Saxo Bank Saxo Bank 23.09.2022 13:48
Summary:  The FOMC will push interest rates much higher from here to rein in inflation and with that lowering equity valuations. This means that higher P/E ratios, also called growth stocks, will suffer relative more compared to lower P/E companies and especially those with high dividend yields and that have proven their robustness over the past 10 years. Dividend stocks are in high demand and have been outperforming the global equity market by 14% since November and will likely continue to do well over the coming six months. The monetary pivot in November 2021 kickstarted dividend investing Since November last year when the Fed pivoted on its temporary inflation thesis and indicated that it would significantly tighten financial conditions to rein in inflation, dividends aristocrats* (see definition below) have outperformed the global equity market by 14.2% and are only down 10.7% this year compared to 21.2% for the MSCI World. The question is whether the relative outperformance can continue for dividend stocks. The FOMC’s decision on Wednesday to hike the US policy rate by another 75 basis points and sending a hawkish signal through its dot-plot and economic forecasts (read our in-depth take on the FOMC decision in our Thursday Quick Take note) will add more tailwind for dividend stocks. The reason for that is that higher interest rates will reduce equity valuations through a higher discount rate on future cash flows. Lower equity valuations will, all things being equal, have a larger impact on higher P/E ratio companies than those with low P/E ratios, because high P/E companies have a larger part of their value coming from cash flows expected far into the future. As our table below shows, the dividend aristocrats generally have lower valuation multiples and thus have less interest rate sensitivity. In addition, higher interest rates coupled with potential recession and uncertainty lift the value of companies with higher more predictable income stream in the short-term. It is worth noting that over the past five years, global dividend stocks have delivered a significantly worse return for shareholders than the global equity market. There are many ways to define good dividend paying companies and in this equity note we have focused on the SPDR S&P 500 Global Dividend Aristocrats UCITS ETF, but there is also the iShares MSCI World Quality Dividend ESG UCITS ETF which focuses on companies with high dividend yield and quality characteristics (strong return on capital and strong balance sheets). Below we have listed the 10 largest holdings in each ETF. SPDR S&P 500 Global Dividend Aristocrats UCITS ETF – 10 largest holdings H&R Block LTC Properties South Jersey Industries Unum Universal Pinnacle West Capital Northwest Bancshares IBM OGE Energy Spire MSCI World Quality Dividend ESG UCITS ETF – 10 largest holdings Microsoft Apple Roche Cisco AbbVie Merck Texas Instruments Unilever Qualcomm Novartis The chart below shows the 5-year weekly prices on the SPDR S&P Global Dividend Aristocrats UCITS ETF * S&P Global defines dividend aristocrats as the highest dividend yielding companies within the S&P Global Broad Market Index (BMI) that have followed a policy of increasing or stable dividends for at least 10 consecutive years. Source: https://www.home.saxo/content/articles/equities/hawkish-fomc-means-more-tailwind-for-dividend-stocks-23092022
For What It Is Worthy To Pay Attention Next Week 23.01-29.01

Further Volatility Expansion On Market Is Expected

Saxo Bank Saxo Bank 23.09.2022 14:09
Summary:  The US dollar is following up on its initial strengthening move in reaction to the FOMC meeting on Wednesday after a more than a bit of chaotic intervention noise from Bank of Japan intervention yesterday. The important coincident indicator is the fresh surge in US longer treasury yields to new cycle highs. The correlation of moves across markets as risk sentiment deteriorates on this latest wave of higher USD and higher yields could see further volatility expansion. FX Trading focus: USD pulls higher still. Market ready to challenge the BoJ again soon? The USD has pulled higher still this morning, setting new cycle lows for EURUSD, GBPUSD and in other USD pairs, though with the notable absence of the USDJPY on the list as the market respects the risk of Bank of Japan intervention, at least at the margin. Still, the directional sympathy in USDJPY to the USD direction elsewhere has been in evidence since the pair bottomed below 142.00 overnight, trading above 143.00 as of this writing. More importantly, the massive surge in US long treasury yields to new cycle- and 11-year highs are piling on the pressure for the Bank of Japan to change its policy. US treasuries are the dominant driver across markets. Chart: USDJPYThe USDJPY situation played out largely as one might have anticipated after the FOMC took US yields higher and the Bank of Japan continued to take a stand on its currency policy and then made good on its intervention threats shortly after USDJPY breached 145.00 to the upside, taking the pair all the way back below 141.00 at one point before the price action stabilized. Now, the upside pressure has ratcheted significantly higher for the pair as the key coincident indicator for USDJPY historically, a longer-dated US treasury yield like the 10-year benchmark, surged yesterday by nearly 20 basis points. Without the BoJ’s presence and threats, we would likely be well on our way to 150.00. How long can the market stand to sit back before challenging the BoJ once again? It doesn’t seem a war the latter can win as long as Kuroda and company insist on staying pat with the current policy of freezing yields out to 10 years as US treasury yields march ever higher… Plenty of danger for market participants wanting to make that challenge, however, as the BoJ/MoF have shown tremendous determination in the past, at least when intervening against JPY strength as in 2003. Interesting reactions to two of the other central bank meeting yesterday, as the Bank of England merely hiked 50 basis points as the majority expected, but after a lean had developed in favour of a larger move, given the Riksbank and Fed hikes of larger magnitude this week. Ahead of the decision, the GBPUSD price action got caught up in the Bank of Japan intervention, but sterling trades relatively calmly despite the BoE’s decision if we have a look at EURGBP, as the BoE’s guidance for beyond this meeting was sufficiently hawkish to shift short UK yields sharply higher, likely in part on the plans to forge ahead with QT with plans to sell GBP 80 billion of holdings even as it surmised that the UK economy may already be in recession. GBPUSD reached remarkable new lows below 1.1200 this morning, while EURGBP is still sticky in the range. The flash Sep. UK Services PMI edged into contraction at 49.2 after 50.9 in August. A bit more drama yesterday around the SNB decision, where many were rushing to price in an exceptionally large hike, given the quarterly meeting schedule of the SNB. Alas, the SNB only hiked 75 basis points and made cryptic comments about intervening in either direction, shocking the CHF lower after EURCHF had traded to new lows as it gave the impression of a bit of pushback against the SNB using the currency as forcefully as a part of its inflation-fighting  arsenal. USDCHF positively soared. Could the SNB have some concerns about competitiveness of Swiss exporters? Regardless, the choppy EURCHF chart suggests that downside progress, if it continues, won’t be easy any more. The Norges Bank meeting yesterday was a spectacle, as the bank hiked the 50 basis points expected, but forecast that further rate tightening may soon end. Certainly out of touch with other CB signaling, and just look at NOK drop against the US dollar, hitting 10.50 today after trading sub-9.00 as recently as May! Looking ahead, we don’t have an awful lot on the US data calendar next week until the Friday August PCE inflation data, but we do have 2-yr, 5-yr and 7-yr treasury auctions set for Tue-Thu. As long as US treasury yields at 10-years continue posting new highs, that market will remain a key driver of sentiment, though it often (as in 1987 crash) in an extreme market volatility event suddenly changes character and attracts buying as a relative liquidity safe haven. Be careful out there. Table: FX Board of G10 and CNH trend evolution and strength.The former euro strength has decelerated, the CHF strength has decelerated even more post-SNB and the NZD and Scandies are the real weaklings of the lot. Gold playing the resilience card with all of this risk-off – stay tuned there. Table: FX Board Trend Scoreboard for individual pairs.The JPY crosses showing signs of trying to trend negative, but impossible to trust given the intervention backdrop and sovereign yields providing offsetting pressure. While the broader CNH strength picture remains a non-event, note USDCNH trading with a percent of the massive 2019-2020 top near 7.20 today and USDCNH trend reading at 10! USDCHF flipping up to a positive trend post-SNB was also an interesting one – can the pair threaten parity again? Upcoming Economic Calendar Highlights 1230 - Canada Jul. Retail Sales 1345 – US Flash Sep. S&P Global Manufacturing and Services PMI 1800 - US Fed Chair Powell to speak at event   Source: https://www.home.saxo/content/articles/forex/fx-update-spiking-long-us-treasury-yields-driving-riskoff-and-usd-meltup-23092022
Forex: USD/JPY Is Expected To Reach 145 In The End Of The Year. Why Is That?

The Intervention Series Will Not Be Able To Change The Downward Trend Of The Japanese Currency

InstaForex Analysis InstaForex Analysis 23.09.2022 14:11
Yesterday was supposed to be black Thursday for the yen, but everything turned out differently. The currency intervention carried out by Japan broke off the Napoleonic plans of USD/JPY. But for how long? Chronicle of the rise of USD/JPY The dollar-yen pair was finally able to break through the key 145 mark on Thursday morning, which it has already unsuccessfully stormed twice this month. The springboard for the asset was the divergence in the monetary policy of the Federal Reserve and the Bank of Japan. This week, the gap in US and Japanese interest rates has widened again. Recall that on Wednesday evening, the US central bank raised the indicator by 75 bps and hinted at more significant steps in the future. A few hours later, the Japanese central bank made a statement. As expected by the market, it announced the continuation of an ultra-soft policy and keeping rates at an extremely low level. The scenario assuming further growth of monetary divergence acted as a powerful impulse for the USD/JPY pair. In just a couple of hours, the dollar soared against the yen by more than 0.5%. The last jump of the greenback led the USD/JPY asset to another record. Since January, the greenback has strengthened against its Japanese counterpart by 25%. There has not been such an annual growth in the entire history of observations. However, the Japanese government did not put up with this and pulled the trigger. The currency intervention changed the whole picture overnight. Dramatic U-turn Japan's intervention cannot be called a "black swan". Many analysts prepared traders for this ahead of time and even named a specific moment when an intervention might occur. The 145 level really turned out to be the red line. As predicted, Japanese politicians did not allow the yen to fall below this mark. Japan's first market intervention since 1998, aimed at raising the rate of the JPY, stopped the rapid decline of the currency. Immediately after the intervention, the dollar-yen pair plummeted by more than 500 points, or 2.6%. Yesterday's low was the 140.35 mark. This morning, the Japanese yen is trading around 142 and is on track for its first weekly gain in more than a month. However, many analysts believe that it will not be easy for the Japanese currency to gain a foothold at current levels now, when the negative fundamental background prevails. To keep the JPY rate below 145, the Japanese government will most likely have to conduct more than one intervention. The risk that the authorities may intervene again is quite high. As the second largest foreign exchange reserve in the world, the BOJ has sufficient reserves to continue supporting the yen. At the end of August, Japan's reserves exceeded $1.17 trillion, while the average daily trading volume of the national currency in Tokyo was about $479 billion. According to economists, this reserve is large enough for the BOJ to strengthen the yen until the end of the Fed's policy tightening cycle, which should come by mid-2023. Put aside the panic Of course, the significant foreign exchange reserve that Japan can use to support the yen scares traders who are playing bullish in the USD/JPY pair. However, most analysts believe that there is no reason to panic. Even a series of interventions will not be able to change the downward trend in the Japanese currency. For the steady growth of the JPY, first of all, positive fundamental factors are needed, and there are none. The main obstacle on the yen's way up is the growing divergence in the monetary policy of the BOJ and the US central bank. The Japanese currency will remain under strong pressure until the BOJ retreats from its dovish position or the Fed begins to wind down the tightening of the monetary policy. The growing monetary divergence will eventually outweigh any intervention, Rabobank analysts are certain. Despite the risk of further interventions, they maintain their medium-term forecast for the USD/JPY pair at the level of 147. And many colleagues agree with them. According to analysts, purchases of the yen by the BOJ will be perceived by the dollar-yen asset as mosquito bites: it will be a bit of a shame, but it will pass quite quickly.   Relevance up to 10:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/322513
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

The EUR/USD Pair Resumed Its Drop And Could Drop Deeper

InstaForex Analysis InstaForex Analysis 23.09.2022 14:17
EUR/USD Massive Drop! The EUR/USD pair resumed its drop after failing to jump above the 0.9881 - 0.9904 area. I've told you in my previous analysis that the currency pair could extend its downside movement as long as it stays under this area (former low) which represents an upside obstacle. Furthermore, the 0.9814 low was seen as a downside obstacle. You knew that dropping below this level activates more declines. Now, it stands right above the down channel's downside line which represents a downside obstacle. EUR/USD Trading Conclusion! Breaking below 0.9814 was seen as a selling opportunity. Now, the price could try to rebound from above the channel's downside line. After its massive drop, a minor growth could be natural. Temporary growth could bring new selling opportunities. EUR/USD could drop deeper as long as it stays under the 0.9814 former low. Dropping and stabilizing below the downside line may activate a further drop toward the 0.9700 psychological level.   Relevance up to 14:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294015
Ripple Has The Potential To Appreciate An Upward Rally

Does Ripple (XRP/USD) Move As Expected This Time?

InstaForex Analysis InstaForex Analysis 23.09.2022 14:23
Ripple extended its growth as expected in the short term. You knew from my previous analysis that XRP/USD signaled strong buyers and an upside continuation. Now, it is traded at 0.4868, far below 0.5582 today's high. The altcoin increased by 64.30% from Monday's low of 0.3398 to 0.5582 daily high. XRP/USD retreated which was natural after its amazing rally. It could test and retest the near-term support levels before jumping higher. XRP/USD Temporary Retreat? You knew from my previous analysis that XRP/USD could resume its upwards movement after coming back above 0.4098 and above the median line (ML). I've told you that a new higher high, a bullish closure above the R2 (0.4350) could activate more gains. Now, it has found resistance at the first warning line (WL1) of the ascending pitchfork. It has registered only a false breakout with great separation before crashing. XRP/USD Forecast! The sell-off could be only a temporary one. The upper median line (UML), R3 (0.4730), and 0.4639 represent downside obstacles. Testing and retesting these levels, registering only false breakdowns could signal new bullish momentum. This scenario could bring new long opportunities.   Relevance up to 14:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294017  
British Pound (GBP) Touched The Below-1.05 Levels!

Bank Of Japan Intervened, Bank Of Turkey Cut The Rate Despite Striking Inflation. In the UK, British Pound (GBP) Is Quite Close To The All-Time Low

Craig Erlam Craig Erlam 23.09.2022 14:49
A negative end to the week in Asia, and Europe has quickly followed as the prospect of much more tightening and a recession weighs on sentiment. The last 48 hours have seen central banks around the world aggressively tightening as they continue their fight against high inflation. There are a couple of exceptions including the BoJ which instead facilitated the first FX intervention since 1998. Its policies have triggered mass selling of the yen this year due to the widening rate differential with others around the world. And then there’s obviously Turkey which has decided to embark on a ridiculous monetary policy experiment at the worst possible time. The CBRT cut rates by 1% despite inflation running above 80% and watched as the lira hit a record low against the dollar. And we thought things were bad here in the UK. Read next: It's Incredible How Much Has Japanese Yen (JPY) Decreased In 2022! USD/JPY Lost 2.5% After The BoJ FX Intervention!| FXMAG.COM How big a gamble will Chancellor Kwarteng take? On that note, the new Chancellor Kwasi Kwarteng will deliver a mini-budget today in a bid to stave off a prolonged period of stagflation and rescue the government’s re-election hopes a couple of years down the line. While caps on energy bills will be welcomed, a lot of the rhetoric of recent days makes me nervous. At a time of eye-watering inflation, terms like “not everything will be popular” and “disproportionately favour the wealthy” are quite concerning. Especially when former Bank of England policymakers are seemingly lining up to lambast the rumoured announcements and in the case of Danny Blanchflower tweet “Short the pound”. It doesn’t fill me with hope. Gfk also reported this morning that consumer confidence hit a record low at -49 in September while the pound fell to its lowest level since 1985 and isn’t too far from its all-time low. The good news just keeps coming. Which brings us nicely to the PMIs which brought even more good news. The manufacturing PMI for August did actually improve and beat expectations. Unfortunately, it remained in contraction territory and only represents a small part of the economy. The much more important services sector survey contracted faster than expected, falling from 50.9 to 49.2, meaning the composite PMI slipped to 48.4 from 49.6. Pessimism spreading throughout the eurozone The flash PMIs from the euro area this morning won’t improve the mood, with the surveys across the board either falling into or deeper into, contraction territory. The one exception is the French services PMI which surprisingly improved to 53. Considering what lies ahead for the bloc, I don’t expect we’ll see that continue much longer and I’m more inclined to view it as an anomaly than something that could shield the economy over the next six months. Bitcoin showing encouraging resilience? Bitcoin continues to display strong resilience in the face of a broader risk-averse mood in financial markets. Given it is the ultimate risk asset, this is quite surprising and perhaps even encouraging. Especially if a view forms that markets have priced in peak tightening which tempts investors back into riskier assets. The key technical levels haven’t changed though, with bitcoin seeing plenty of support around $18,000-18,500 and the big test not far below around $17,500 – the low from earlier in the summer. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Piling on the misery - MarketPulseMarketPulse
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

GBP/USD Has Decreased By Almost 20% So Far. British Pound (GBP) And FTSE 100 Down

Alex Kuptsikevich Alex Kuptsikevich 23.09.2022 15:37
The sell-off in the British markets intensified on Friday. Traders seem to have held back from action until last in the run-up to the Bank of England rate decisions and the interim budget announcement. Both of these events failed to impress the markets. Read next: Cryptocurrency: Bitcoin Up, Ethereum Price Found Support, Ripple Price (XRP) Jumped! | FXMAG.COM It's not a good day for British Pound And FTSE 100 The Bank of England raised the rate by 50 points accumulating behind the Fed, while the new economic plan failed to alleviate fears over the threat of recession. GBPUSD has been losing around 2% since the start of the day on Friday, recording a low at 1.1020. Usually, the weakness in the GBP supports the British market, but today we see buyers capitulating with a loss of over 2.5% in the FTSE100. The index fell below 7000 for the first time in three months. In dollars, British assets were down 4.5% on Friday alone. UK Economic Data The economic indicators published today are adding to the sell-off in the markets. For example, the GfK consumer confidence indicator fell from -41 to -49, breaking a historical record since 1974. The CBI retail activity indicator fell from 37 in August to -20 in September against expectations of 9. Preliminary PMI estimates also gave no reason to buy assets, noting a further fading of economic activity faster than expected. The Composite PMI fell from 49.6 to 48.4 against the expected 49.0 after the Services index collapsed from 50.9 to 49.2. GBP/USD Throughout The Year GBPUSD has lost 19% since the beginning of the year, which, combined with 10% inflation, should make the government and Bank of England more nervous. We should not be surprised if UK officials step up their efforts to maintain the pound, which could dramatically increase currency market volatility.
USD/JPY Reaching 130-135? It Seems It Maybe Not Impossible

USD/JPY Reaching 130-135? It Seems It Maybe Not Impossible

Conotoxia Comments Conotoxia Comments 23.09.2022 15:54
The Japanese government has decided to intervene with currency intervention in the Japanese yen market after the USD/JPY exchange rate approached the 146.00 level following an earlier Fed decision. The Japanese currency had been losing steadily since the beginning of the year with the divergence in the actions of the US and Japanese central banks. Bank's Of Japan Intervention The Japanese government and the Bank of Japan (BoJ) intervened on Thursday in the foreign exchange market for the first time since 1998, when the U.S. dollar reached a 24-year peak against the yen. Japanese Deputy Finance Minister for International Affairs Masato Kanda confirmed that the government responded by selling dollars against yen. Kanda added that "markets are making very volatile moves" and that Japan "cannot tolerate excessive volatility and disorderly currency movements." Earlier in the day, the BoJ decided to leave its interest rate unchanged and continue its loose monetary policy, BBN reported. Source: Conotoxia MT5, USD/JPY, H1 How lasting could the effects of intervention on the JPY be? For the time being, investors may be wondering how lasting the effects of Japan's, for the time being, one-time intervention in the currency market may be. The drop from around JPY 146.00 to JPY 140.50 may undoubtedly be impressive, but will it be able to halt USD appreciation, which may be driven by growing expectations of rate hikes in the US? Read next: Jim Cramer Comments On Inflation, IMF (International Monetary Funds) Talks Stablecoins | FXMAG.COM According to analysts quoted by Bloomberg, the Japanese yen could rebound to 130-135 per dollar if the authorities push ahead with more interventions in the foreign exchange market. The scale of intervention was still small relative to total foreign exchange reserves, so there is still some ammunition to defend the currency." - Saktiandi Supaat, regional head of foreign exchange market research, told Bloomberg TV. He notes that USD/JPY could head toward JPY130 or JPY135 if authorities push harder for further intervention. However, the baseline scenario assumes support for the dollar through the end of the year and perhaps into the first quarter of 2023. The dollar could weaken in the event of any signs of a Fed slowdown or positive developments around Russia/Ukraine, which could lead to a reduction in risk-off sentiment, the Bloomberg interview added. USD/JPY technical situation From the point of view of the USD/JPY exchange rate chart, we can see that the quotes are still inside a potential expanding wedge formation. In addition, the potential resistance level and the contractual limit for currency interventions at JPY 145.00 may also have been defended. The short-term line drawn after the lows was also broken. As a result, the rate could start consolidating in the range of JPY 145.00 to 141.50. Further potential support could fall in the area of previous peaks at JPY 139.00, and then at the lower boundary in the wedge. Source: Conotoxia MT5, USD/JPY, D1 Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
US Dollar (USD) Touched The 20-year High Level! What Makes EUR Less "Attractive"?

US Dollar (USD) Touched The 20-year High Level! What Makes EUR Less "Attractive"?

Jing Ren Jing Ren 23.09.2022 15:14
USDJPY consolidates post-BoJ intervention The Japanese yen clawed back some losses after the BoJ intervened in the FX market for the first time since 1998. The central bank has loaded up on its currency in an attempt to ease the imported inflation pressure. However, this symbolic move may only offer the battered yen relief and is unlikely to reverse the current trend. Policymakers have stuck to the loose policy to support the fragile recovery, in a contrarian move to the global race to tighten financial conditions. Diverging yields between Japan and the US may still favour the latter’s currency. August 1998’s high at 147.50 is the next hurdle and 139.00 the closest support. EURUSD slips as Fed stays hawkish The US dollar soared to a two-decade high after the Fed raised interest rates by another 75 basis points. Officials have signalled more similar hikes by the end of the year. An update on US rates projection shows a 4.4% by year's end, a full percentage point higher than last June’s forecast. In Europe, the economic slowdown, energy strains and an escalation in Ukraine could keep traders away from the single currency. This divergence mirrors the fate of other riskier currencies. In a world full of uncertainties, high yield and safety raise the dollar’s relative appeal. The pair is sliding towards 0.9600 after being capped at 1.0040. UKOIL softens as global growth at risk Brent crude struggles over geopolitical tensions and demand uncertainty. Russia announced a mobilisation of more troops in an escalating move in the Ukraine conflict. Additional sanctions could be expected from the west along with Russia’s retaliation in energy deliveries. Meanwhile, Washington signalled little progress in reviving the 2015 Iran nuclear deal. The stalemate could keep the tight market in check. However, the global race to stifle inflation makes growth a collateral damage. Lower demand and subdued risk appetite may continue to fuel the correction. The price is hovering above 84.00 and 105.00 is an important cap. NAS 100 struggles as rates see no ceiling yet The Nasdaq 100 slips further as the Fed reaffirms its restrictive roadmap. As the economy became second to monetary policy, investors fear that the window for a ‘soft landing’ might be closing. The question would shift from whether the recession is around the corner to how long it would last. The central bank reiterated that growth and jobs would be impacted. A solid labour market may act as a cushion, allowing policymakers to push the tightening agenda aggressively. Growth stock investors will need to remain patient as rate cuts are not expected until 2024. The index is hovering above 11100 with 12000 as the first resistance. Key data release (GMT time) Tuesday, 27 September 12:30 Durable Goods Orders 23:50 BoJ Monetary Policy Meeting Minutes   Wednesday, 28 September 01:30 Retail Sales     Thursday, 29 September 12:00 Harmonized Index of Consumer Prices 12:30 Gross Domestic Product Annualized   Friday, 30 September 06:00 Gross Domestic Product Retail Sales 09:00 HICP
John Hardy to FXMAG: The UK economy faces significant head-winds from supply side limitations

United Kingdom: GBP/USD Trades Really, Really Low, Taking Us Back To 1985, What About Recession?

Kenny Fisher Kenny Fisher 23.09.2022 16:20
GBP/USD is down sharply today and has fallen below the 1.11 level for the first time since 1985. In the European session, GBP/USD is trading at 1.1125, down 1.16%. The British pound can’t seem to find any love. GBP/USD is looking dreadful, down 2.1% this week and 3.8% in September. The currency hasn’t sunk to such levels since 1985 and the strong US dollar could extend the pound’s current downtrend. The markets are focused on today’s mini-budget and UK releases. In the mini-budget, Chancellor Kwasi Kwarteng announced tax cuts and more spending. With no funding for the tax cuts and increased borrowing, gilt yields have jumped, but that has failed to boost the pound. UK posts soft consumer confidence, PMIs UK releases reiterated that the economy is in trouble, for anyone who needed reminding. GfK Consumer Confidence, which has been in a deep freeze, fell to -49, down from -44 and missing the forecast of -42 points. Manufacturing PMI rose to 48.5, up from 47.3 and above the estimate of 47.5, but remained in contraction territory for a second straight month. Services PMI slowed to 49.2, down from 50.9 and shy of the estimate of 50.0. With both manufacturing and services in decline, the outlook for the UK economy remains grim. Read next: Jim Cramer Comments On Inflation, IMF (International Monetary Funds) Talks Stablecoins | FXMAG.COM The Bank of England raised rates by 0.50% on Thursday. The pound did post some gains but couldn’t hold on and closed the day almost unchanged. The move brings the cash rate to 2.25%, its highest since 2008. Still, it’s fair to say that the 0.50% underwhelmed the markets, as there were some expectations for a more forceful hike of 0.75%. The BoE has been playing catch-up with inflation, which is running at 9.9% clip. The new Truss government has taken dramatic action to cap energy bills, which should help to curb soaring inflation. With the economy posting two consecutive quarters of negative growth and inflation still not under control, a recession appears unavoidable, which will likely add to the British pound’s misery. GBP/USD Technical GBP/USD is testing support at 1.1117. Below, there is support at 1.1038 There is resistance at 1.1269 and 1.1342 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD can't find its footing - MarketPulseMarketPulse
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Risk Aversion Grows As Ukraine War Scares Again | USD/CAD - Let's See How Much Has The Pair Gained This Week

Kenny Fisher Kenny Fisher 23.09.2022 16:31
The Canadian dollar is in negative territory for a fourth straight day. In the European session, USD/CAD is trading at 1.3522, up 0.24% on the day. The US dollar continues to shine, particularly against risk-sensitive currencies such as the Canadian dollar. USD/CAD has jumped 1.9% this week and the Canadian dollar has fallen to lows last seen in July 2020. Risk sentiment has eroded due to the escalation in the Ukraine war. The regions occupied by Russia are holding a referendum to join Russia, and no one has any doubt about the results. Russian President Putin has hinted that he could resort to nuclear weapons to defend “Russian territory” and he has also ordered a partial mobilization, as Ukraine presses on with an impressive counter-offensive. The energy crisis in Europe continues to brew – the Nordstream 1 pipeline has been out of service for several weeks, and Western European countries could face energy shortages, with winter only a few months away. Markets brace for soft retail sales Canada releases the July retail sales report later today. The markets are braced for a sharp downturn in consumer spending. The headline reading is expected at -2.0%, following a gain of 1.1% in June. Core retail sales is expected to fall by 1.8%, after a 0.8% gain in June. A sharp downturn could sour investors on Canada’s economic outlook and extend the Canadian dollar’s losses. Canada’s headline and core inflation indicators fell in August and were lower than expected. It’s still early to declare that inflation has peaked, but the BoC can declare a job well done if inflation is indeed falling. The BoC has been aggressive, delivering a 75bp increase earlier this month and bringing the benchmark to 3.25%. The markets have priced in a 50bp at the October meeting, followed by a modest 25bp hike in December. That would lift rates to an even 4.00%, which would be the highest since 2008, during the GFC. USD/CAD Technical USD is testing resistance at 1.3529. The next resistance line is 1.3615 There is support at 1.3414 and 1.3274 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. CAD extends losses, retail sales next - MarketPulseMarketPulse
Metals Update: Gold Demand Declines Marginally, Copper and Aluminium Positions Adjusted

Will The Bank Of England Be Able To Maintain Financial Stability?

ING Economics ING Economics 24.09.2022 08:40
Price action in UK gilts is going from bad to worse. A daunting list of challenges has arisen for sterling-denominated bond investors, and the Treasury’s mini-budget has done little to shore up confidence. Widening rate differentials are no consolation for the pound, with FX remaining the main vehicle to price UK country risk In this article 2022 mini-budget: blank cheques (Monetary) context matters Financial stability in question GBP: The glass is half empty 2022 mini-budget: blank cheques It was largely expected that the bill for the government’s energy price guarantee would run in the 12-digits (over £100bn) over its life and that most of this would be financed with extra issuance from the Debt Management Office (DMO). And yet, the mini-budget unveiled by the new chancellor added fuel to the fire already burning on the gilt market. The updated DMO remit for FY2022-23 includes an extra £72bn of borrowing, £10bn in T-bills and the balance in gilts. In our view, this is well within expectations but the current environment isn’t favourable to gilt sales. Investors are worried the Treasury has effectively committed to open-ended borrowing Alongside the confirmation of additional borrowing this year, the raft of tax cuts unveiled today clearly implies that it will not be contained to just this fiscal year. The cost of the newly-announced measures is reported to be £160bn over five years but, with the cost of the energy price guarantee highly dependent on wholesale energy prices, investors are worried the Treasury has effectively committed to open-ended borrowing. Markets are expecting a forceful BoE response to the new announced fiscal package Source: Refinitiv, ING (Monetary) context matters Of course, the additional borrowing comes at an inopportune time for gilts. Bond holders are already rattled by inflation and by the prospect of more Bank of England (BoE) hikes. Even if the central bank hiked only 50bp yesterday, compared to market pricing of 75bp, markets are betting that the pace of hikes will have to accelerate. The recent jump in yields implies that Bank Rate will peak next year well above 5%. That in itself is not a great backdrop for bonds but what has rattled investors is the prospect of the BoE hiking more in response to generous fiscal policy. Markets are jumping to the conclusion that the BoE will have to respond in kind with even higher rates Effectively, the BoE has reserved judgement on the inflationary implications of the energy price guarantee until its November monetary policy report but noted that the net effect will likely be to boost inflation over the medium term. Given the extra tax cuts announced, markets are jumping to the conclusion that the BoE will have to respond in kind with even higher rates. The prospect of the BoE and the Treasury competing with each other is a particularly unnerving one for bond investors. The already impaired gilt market is no longer able to accommodate more supply and quantitative tightening Source: Refinitiv, ING Financial stability in question To us, the magnitude of the jump in gilt yields has more to do with a market that has become dysfunctional. If a sell-off in gilts is rational in response to more fiscal spending, tax cuts, and higher inflation, the magnitude of the move should give policymakers pause for thought. This is particularly true of the BoE which is about to ramp up its quantitative tightening (QT) programme with outright gilt sales at £10bn per quarter. We have written at length before that trading conditions in the gilt market call for the BoE to tread very cautiously when it comes to adding to the selling pressure already evident in gilt markets. A number of indicators, from implied volatility to widening bid-offer spreads, suggest that liquidity is drying up and market functioning is impaired. A signal from the BoE that it is willing to suspend gilt sales would go a long way to restoring market confidence, especially if it wants to maximise its chances of fighting inflation with conventional tools like interest rate hikes. The QT battle, in short, is not one worth fighting for the BoE. The spread between UK gilt and German bund yields widest in over two decades Source: Refinitiv, ING   Barring a change of direction on QT, we expect 10Y gilt yields to cross 4% and for the spread to German bunds to widen 200bp. The fact that the DMO’s additional borrowing is skewed to the front end of the curve, the sector most affected by expected BoE hikes, has added to the curve flattening dynamics. GBP: The glass is half empty Sterling has had another wild ride on today’s fiscal event – initially rallying on the biggest tax cut since the 1980s, but subsequently falling hard as the UK gilt market reacted to the prospect of a heavy new supply slate. Sterling has been trading off fiscal concerns since early August. Expect this to remain the dominant theme as international investors again consider the right price, both in terms of sterling and gilt yields, to fund the UK’s widening budget deficit. FX is probably the easiest vehicle to trade UK country risk We have to remember that FX is probably the easiest vehicle to trade UK country risk – given that there is not much liquidity in sovereign credit default swaps for the UK. On this subject, investors will take great interest in what the rating agencies have to say about UK fiscal plans. The UK's long-term sovereign outlook is currently stable at all three of the rating agencies, S&P (AA), Fitch (AA-) and Moody’s (Aa3). The risk of a possible shift to a negative outlook will come when the ratings are reviewed on 21 October (S&P and Moody’s) and 9 December (Fitch).   Notably as well has been sterling’s disregard for interest rate differentials, where the very aggressive re-pricing of the BoE tightening cycle has provided no support to the pound. This leaves the BoE in a quandary but presumably would have to be even more hawkish if the weaker exchange rate were to damage the UK inflation profile still further. Unless something can be done to address these fiscal concerns, or the economy shows some surprisingly strong growth data, it looks like investors will continue to shun sterling. For reference, the FX options now prices the chances of GBP/USD hitting 1.00 by year-end at 17%. That is up from 6% in late June. Given our bias for the dollar rally going into over-drive as well, we think the market may be underpricing the chances of parity.   TagsGBP Fiscal Policy Bank Of England   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Overall Picture Is Positive For The Czech National Bank

What Decisions Can Be Made After The New Czech National Bank (CNB) Board?

ING Economics ING Economics 24.09.2022 08:30
As in August, we expect the CNB to leave rates unchanged at the September meeting. Although the economic data has surprised on the upside, inflation has been below the central bank's forecast for the past two months. This provides an ample buffer for the central bank and we believe this rate hiking cycle is over In this article No change in views, no change in rates Okay, we're done here but what's next? What to expect in rates and FX markets No change in views, no change in rates Next Thursday (29 September), the second monetary policy meeting will be held under the leadership of the new CNB board. Nothing has changed in our forecast since the last meeting and we expect rates to remain unchanged this time again. This is indicated by both the statements of the board members and the latest inflation numbers, which were well below the CNB forecast in July and August, and the same result can be expected from the September number (our preliminary forecast is 17.6% year-on-year). On the other hand, the GDP and wage numbers were higher than the CNB's forecast, but we still believe that lower-than-expected inflation provides an ample buffer for the current board. Thus, we do not see a significant risk of a change in the current CNB view for the coming months either. 7.00% CNB's key policy rate We expect no change next week   Although we do not expect another significant rise in inflation and the base effect should cover the potential increase in energy prices, a jump above 20% year-on-year still cannot be ruled out. However, in such a scenario, the reason would likely be the jump in energy prices, which the board would choose to ignore. Moreover, the CNB is also safe on the FX side at the moment. The depreciation pressure on the koruna has eased and the last significant central bank market activity was seen after the August meeting, according to our estimates. Thus, we do not expect anything to change in the board's current approach to FX intervention. Okay, we're done here but what's next? Given that we believe this rate hiking cycle ended in June, the question is what happens next, i.e. when should we expect the first rate cut and what is the new 'normal' level of rates? We expect this topic to come increasingly to the fore. We believe that just as the CNB was the first in the region to hike rates, it may be the first to cut rates. We believe this will be a theme for the first half of next year despite inflation still being around 10% year-on-year by then. The last three meetings of the year, however, could give us more clarity on the conditions in which the Board will be willing to cut rates and what level it sees as the new 'normal'.  What to expect in rates and FX markets Markets have recently given up any bets on an additional CNB rate hike and at this point do not expect any change in the six-month horizon. The first rate cut is currently priced in for the second quarter of next year, close to our forecast. At the two-year horizon, the market expects CNB rates to still be above 4%, which we see as fair pricing at this point. Therefore, we consider the short end of the interest rate swap (IRS) curve done for now. On the other hand, the long end of the curve is trading well below its peak from June and below regional peers. At the same time, the entire region is getting significant support from rising core rates, which we believe will drive the long end of the curve higher. Hence, we have moved from the curve trades and now like the outright payers at the long end of the curve, which also offer a more favourable carryroll. Czech government bonds (CZGBs) have cheapened a lot in recent weeks, and we are seeing buyers coming back. However, we believe that the strong supply will persist in October and furthermore, as with the IRS curve, CZGBs should follow the sell-off in developed markets. On the other hand, asset swaps are already indicating very wide levels. Therefore, we believe CZGBs yields are near local highs. In the FX space, the koruna has returned to the CNB's intervention band of 24.60-70 EUR/CZK after the recent news from Russia, but so far there are no signs of much pressure for further depreciation or problems for the CNB's intervention regime. The falling interest rate differential does not indicate that the koruna will return to stronger levels. On the other hand, the relationship with the gas price remains strong, which may benefit the koruna if the geopolitical situation calms down. Thus, at the moment we see current levels as the peak, which may offer high carry for the koruna and a fixed base for cross-trades against the forint or zloty, which have more potential for losses. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Bitcoin Maintains A Steady Bullish Potential

No One Is Surprised That Bitcoin Is Lower, Wall Street Will Substantially Cut Its S&P 500 Targets

Ed Moya Ed Moya 24.09.2022 13:54
Unsettling market volatility is going to be here for a while as Wall Street broadly downgrades their end of year S&P 500 targets. The bond market is telling us they firmly believe Fed Chair Powell has rolled up his sleeves and is ready for this fight with inflation to get ugly. It appears that a hard landing is becoming more likely and that is driving this current round of risk aversion. Every time we get a better-than-expected economic reading, traders are anticipating that will allow the Fed to be even more aggressive with tightening of policy.  Today’s US flash PMIs showed business activity improved and while input-cost inflation cooled.  The rest of the world is seeing strong contraction readings and that will keep the stock market selling pressure widespread.  With one week left in the quarter, Goldman Sachs had to admit they were wrong with their optimistic stock market outlook and sliced their end of year S&P 500 target from 4,300 points to 3,600, which would be below the June low. A lot of traders expected hints of a Fed pivot at Jackson Hole or at the September FOMC policy, but that never happened. A hard landing is becoming the base case scenario for many and that means more economic pain along with a much weaker stock market is coming. How far we go below the summer lows is anyone’s guess.  Over the next couple of weeks, long-term investors may hesitate buying into weakness because it doesn’t seem like any economic data release or Fed speak will convince markets that a downshift from this aggressive tightening campaign will be happening anytime soon.  Downside targets for the S&P 500 include the 3,470 level, which might look attractive for some long-term investors.  FX The British pound collapsed after Chancellor of the Exchequer Kwarteng’s fiscal statement.  Financial markets abandoned bets on the British pound and UK bonds as foreign investors doubt the government will be able to fund this new round of debt.  The British pound is sharply lower on the markets rejection of this fiscal handout that includes both the biggest tax cut in half a century and investment incentives. Oil Oil tanks as global growth concerns hit panic mode given a chorus of central bank commitments to fight inflation.  It seems central banks are poised to remain aggressive with rate hikes and that will weaken both economic activity and the short-term crude demand outlook. The dollar rally is about to enter another level that could keep the pressure on commodities, especially oil prices.  Rig counts continue their steady rise, climbing by 3 and bringing the total to 602. The steady climb in rigs however has not led to any significant increases with US production.  Once WTI crude broke below the $80 level, technical selling was persistent. Despite all the bearishness that is hitting oil prices, economic activity isn’t falling off a cliff. Next week, energy traders will pay close attention to a tropical depression that could become a hurricane that is headed towards Florida.  If the selling remains strong at the start of next week, major support now resides at the $74 level.  Gold Gold continues to get picked on as global bond yields at the short-end of the curve skyrocket.  Everything is going wrong for gold; Strong dollar, weakening jewelry demand as China’s outlook continues to deteriorate, central banks are not focusing on buying bullion, and the bond market remains its worst enemy. If gold’s selling pressure remains, prices could tumble towards the psychological $1600 level. Crypto It is an ugly day on Wall Street and no one is surprised Bitcoin is lower.  Risky assets are getting hit hard as a wrath of global central bank tightening is leading many to think hard economic times are upon us.  Despite today’s crypto weakness, Bitcoin selling has not made a clear attempt at the summer lows. Bitcoin is only $1000 away from June low, so traders will pay close to attention to what happens over the weekend.  Weekend volatility could be interesting here and if a breach of the summer low occurs, don’t be surprised if that does not last until Asia opens on Sunday night. On a day when stocks are down over 2%, you would expect Bitcoin to be down double or triple that and not just around 3% weaker, which could mean many long-term holders remain unfazed.  This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Bio Twitter Latest Posts  
Sustainability-Linked Products: Navigating Growth and Challenges for the Future

Investors' Concerns About The Coming Recession In The UK, Will GBP/USD Pair Reach Its Lowest Level In History?

InstaForex Analysis InstaForex Analysis 26.09.2022 08:05
How low can the exchange rate fall? Will the Bank of England take measures to support the pound? At the end of last week, bearish positions on the British pound sharply intensified. Traders seem to have tried to resist such a powerful downward movement until the last moment, but it did not work out. Events are developing in such a way that the pound in the future can not only update distant historical lows, but also risks setting a new anti-record. The BoE's decision on the rate and the announcement of the interim budget, to put it mildly, did not impress the markets. The central bank raised the rate by only 50 bps, accumulating a backlog from the Federal Reserve. The new economic plan failed to allay investors' concerns about the approaching recession in the country. The collapsed economic indicators were also another reason for short positions. The GfK consumer confidence indicator plunged to -49 from -41, updating the historical record. The last time such figures could be seen was in 1974. The CBI retail activity indicator fell to -20 in September from 37 in August. Preliminary PMI estimates could not act as a kind of reassurance for the market. The composite index fell to 48.4 from 49.6 due to the deterioration in the service sector, where the corresponding indicator fell to 49.2 from 50.9. At first, the GBP/USD pair fell to the area of 1.1020, which is the low since 1985. Then shorts intensified and the quote easily broke down the 1.0900 mark. Since the beginning of the year, GBP/USD has lost approximately 20%. Given inflation of 10%, nervousness should be not only among market players, but primarily among the government and the BoE. If officials do step up their efforts to maintain the pound, volatility in the foreign exchange market risks being prohibitive or getting out of control. What's Wrong with Government Measures? The pound was mostly brought down by new government measures. The authorities have announced significant tax cuts since 1972 in an attempt to push the country's economic growth to 2.5%. At least some, but actions and in theory, and even according to the government's plan, it was supposed to support the mood. However, investors have their own vision of the situation and they did not believe that the British authorities, led by Liz Truss, would be able to finance these measures without hindrance. Radical changes to the tax code imply a reduction in the basic income tax rate from 20p to 19p from April 2023. The highest income tax rate has been reduced from 45p to 40p, while the increase in national insurance contributions this year will be canceled in November. In addition, the planned increase in corporate tax has been postponed indefinitely. At the same time, Brits buying housing for the first time will be able to see a noticeable weakening of the state fee. The cost of all the announced tax cuts, according to the authorities, is 45 billion pounds. At the same time, the government's decision to limit electricity bills will cost much more, approximately 130 billion pounds. In general, this means that the British government will need to borrow more, increasing the supply of gold on the market. What will Happen to the Pound? The panic selling of the pound made many think about the future prospects of the British currency. What is it: a temporary turbidity and an excessively strong and completely unreasonable reaction of worried investors, or is the pound really on the path of a great crisis? Will there be parity with the dollar for the first time in history? Indeed, the pound is now under the strongest pressure, including due to the incessant advance of the dollar. The fall of the pound coincides with the time when there was a significant sell-off on world markets. Even in normal times, this creates obstacles for the national currency of Britain. Parity with the dollar is considered by analysts as an extreme measure, which is still far from reality. At the same time, new record lows are quite possible. It is unlikely that government measures will lead to a collapse of the pound or create problems when selling gold coins. "Given that the economy is flirting with recession, tax cuts supporting demand are not necessarily a bad idea. But this tax cut should be permanent, not temporary," Oxford Economics believes. The pound is expected to continue to decline to about 1.0500 against the dollar in the short term. Meanwhile, the BoE will have no choice but to raise the size of the rate hike. At the November meeting, the central bank should increase the rate by 75 bps. Thus, the markets will raise the forecast for the maximum bank rate from 3% to 4%.   Relevance up to 23:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/322592
Inflation In Japan Continues To Show An Uptrend, The USD/JPY Pair Is Going Down

The USD/JPY Pair Has No Support For The Development Of The Downward Movement

InstaForex Analysis InstaForex Analysis 26.09.2022 08:06
In the face of Friday's growth of the dollar index by 1.56%, the USD/JPY pair added 0.68% (100 points). We do not think that the Bank of Japan will stop protecting the 145 level after the first intervention on the 22nd, so we expect a slowdown in the fall of European currencies and a reversal in the USD/JPY pair to the nearest support at 141.25, determined by the embedded price channel line of the higher timeframe. The MACD indicator line approaches this line, strengthening it. The Marlin Oscillator on the daily chart is declining in its own narrow channel. The price lacks its support for the development of a downward movement. Such support will appear when the signal line of the oscillator goes into the negative area. The price went above the MACD line on the four-hour chart, above the balance line, and the Marlin Oscillator moved into the area of positive values. Formally, this is a continuation of short-term growth. Let's see how short-term this growth will be. After consolidating under the MACD line (143.55), we are waiting for a new wave of decline in the currency pair. Aim for 141.25.   Relevance up to 04:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322594
John Hardy to FXMAG: The UK economy faces significant head-winds from supply side limitations

The Market Awaits Another Downward Move Of The GBP/USD Pair

InstaForex Analysis InstaForex Analysis 26.09.2022 08:10
The British pound fell by an incredible 417 points (-3.65%) on Friday, reaching strong support from the 1.0830 price level and price channel line of the monthly timeframe. This morning, during the first four hours of the trading session, the price fell by another 490 points in the moment, winning back half of the fall in the next half hour. Now the price is between the target levels of 1.0310 and 1.0535. The Marlin Oscillator is in the oversold zone, the ultra-high volatility of the pound indicates its potential correction in the near future. The optimal strategy in this situation would be to wait for the correction to be completed and then open new short positions. The nearest target at 1.0310, formed by the embedded line of the price channel, remains unworked out. Leaving the area under it opens the 1.0140 target. On a four-hour scale, the Marlin Oscillator is already headed for a correction - the price is consolidating under the level of 1.0535. We are waiting for the correction to be completed, the market to be calm, and the price to move down further.   Relevance up to 04:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322596
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

The Rate Of Decline Of The EUR/USD Pair Is Slowing Down

InstaForex Analysis InstaForex Analysis 26.09.2022 08:14
The euro fell by 147 points on Friday. The price has overcome the important target level of 0.9752, having worked out the nearest target below it (0.9692). The 0.9752 target was set by the embedded line of the global hyperchannel of the monthly timeframe, the channel started on the July 2008 high. Now the price is heading towards the medium-term target along the embedded line of this channel to the area of 0.8960. We are waiting for the price here within a month. The price has set targets on the daily chart: 0.9625, 0.9520. The Marlin Oscillator is going down, the distance to the oversold zone is still significant. The rate of decline of the oscillator is slowing down on the four-hour chart. Probably, from the nearest support (0.9625) there will be a correction (back to 0.9692), then the decline will continue with renewed vigor.       Relevance up to 04:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322598
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The EUR/GBP Pair Has Broken Above The Neckline Resistance

InstaForex Analysis InstaForex Analysis 26.09.2022 08:19
It has been a while since we last looked at EUR/GBP. Since July, EUR/GBP has broken clearly above the neckline resistance of the S/H/S bottom and is now testing resistance at 0.9270 which we expect will be broken too for a continuation towards our long-term target at 1.0592. In the short term, we could see a temporary consolidation either just below or just above resistance at 0.9270 before the next rally higher to 1.0592. Relevance up to 06:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294116
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How The Pound To Japanese Yen (GBP/JPY) Pair Looks Like?

InstaForex Analysis InstaForex Analysis 26.09.2022 08:24
GBP/JPY declined much quicker to the 50% corrective target at 150.09 than we expected. That will likely mean that GBP/JPY after some consolidation towards 154.41 will take a new dive through support at 150.09 towards the 61.8% corrective target seen at 145.76 before a corrective low is in place. Short-term we see minor resistance at 152.387 and then at 154.41.   Relevance up to 06:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294118
The EUR/USD Pair Is Still In A High Position On The 1H Chart

No One Is Even Thinking About Buying The Euro, The Bearish Mood Is Present

InstaForex Analysis InstaForex Analysis 26.09.2022 08:28
EUR/USD 5M Business activity indices were published in the European Union and the United States on Friday... We tried to make the beginning of this article as absurd as possible, since now hardly anyone is interested in business activity indices. The euro lost about 150 points on Friday and on Monday night within one hour it fell by another 130 points. This is all you need to know now about what is happening in the foreign exchange market and the state of its participants. This is no longer a reaction to the "foundation" or any macroeconomic events. It's just shock and panic. The euro has already almost reached the level of 0.9500, although a few months ago this level looked fantastic. We have repeatedly said that the collapse of European currencies may well continue, given the current geopolitical and fundamental background. Basically, this is exactly what we are seeing now. Yes, a rollback to the top followed at night, but what does it decide? The market is clearly not just running in a panic from risks... In regards to Friday's trading signals, everything was very, very good, since none were formed. We say this because the market is in a state of shock right now, and trading in such circumstances is not the best thing to do from our perspective. Yes, a clear trend movement was observed all day long, on which one could make very good money, but why open positions if there is not a single level at the current price values? If you are trading our Linear Regression Channels system on the 4-hour time frame, then everything is fine, as there is a Heiken Ashi indicator that shows entries for new falls in the pair. It is very difficult to trade on hourly and lower timeframes due to the lack of reference points and signals. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial traders, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not provide any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Forecast and trading signals for GBP/USD on September 26. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The prospects for bears remain just fine on the hourly timeframe, given that now no one is even thinking about buying the euro. To say now that the euro's new collapse was provoked by last week's Federal Reserve meeting is like blaming a train derailment due to rain. From our point of view, the market is in a panic, and it is hardly possible to say how long it will persist and how it will end. We highlight the following levels for trading on Monday - 0.9813, 0.9877, 0.9945, 1.0019, as well as Senkou Span B (1.0031) and Kijun-sen (0.9804). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. European Central Bank President Christine Lagarde will speak in the European Union on September 26, which is unlikely to affect anything. You should trade on a 4-hour or daily TF, who considers it necessary to do this in a panic on the foreign exchange market. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 05:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322600
Gold Has A Chance For The Rejection Of The Support

The Price Of Gold Could Come Back Down After False Breakouts

InstaForex Analysis InstaForex Analysis 26.09.2022 08:32
The price of gold dropped as much as 1,626 in the early morning when it found demand. Now, it is located at about 1,639 at the time of writing. After its massive drop, a rebound was natural. Fundamentally, XAU/USD extended its sell-off as the DXY rallied after better-than-expected US data was reported on Friday. The Flash Services PMI was reported at 49.2 points versus the 45.5 expected, while Fash Manufacturing PMI came in at 51.8 points compared to the 51.0 points estimated. XAU/USD Retests 1,641 Resistance! XAU/USD accelerated its sell-off after dropping again below1,641. You knew from my previous analysis that a new lower low after retesting 1,654 - 1,659 activates more declines. It was almost to reach the weekly S1 (1,626) which was seen as a downside obstacle. Now, it has registered a strong rebound signaling exhausted sellers. In the short term, the rate could test and retest the near-term resistance levels before dropping deeper. XAU/USD Outlook! Testing and retesting 1,641, registering only false breakouts may signal a new sell-off. The price could come back down to 1,626 today's low. A larger rebound could be activated by a valid breakout above 1,641 and if jumps and closes above 1,646 today's high.   Relevance up to 06:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294120
UK Budget: Short-term positives to be met with medium-term caution

The GBP/USD Currency Pair Has Fallen And Continues In A Downward Trend

InstaForex Analysis InstaForex Analysis 26.09.2022 08:36
GBP/USD 5M The GBP/USD currency pair fell by 800 points on Friday and Monday night and is already approaching price parity. In principle, we do not know what else can be said about this. Panic and chaos reign in the market. Everything that can only fall falls. Except, of course, the US dollar, which is still used by everyone as the most stable and safe defensive asset. Frankly, given what is happening now in the world and the complete uncertainty about when and how everything will end, we are no longer sure that the US dollar is really the currency that is absolutely not threatened by anything. However, most market participants believe that it is better to buy the dollar, and are happy to do so. I don't even feel like talking about business activity indices in the UK and the US, which came out on Friday, because they are definitely not the cause of the collapse that happened. We believe that such events occur due to geopolitical aggravation, and even the currency market itself shows us how serious things can be. I do not want to start talking about various platitudes about the Third World War, but the fact that the situation can worsen significantly before it finally improves is almost 100%. Naturally, not a single trading signal was formed on Friday, because the pound had already gone well below its 37 year lows. We can't even tell if the pound has ever been that low in principle? While this article was being written, the pound resumed its decline and fell by 100 points. The price simply flies from side to side, covering fantastic distances in short periods of time. Therefore, if you trade the pair now, then do so on higher timeframes using the Heiken Ashi indicator. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group closed 11,600 long positions and opened 6,000 short positions. Thus, the net position of non-commercial traders decreased by another 17,600, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new decline, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its decline has completely resumed and multi-year lows are updated almost every day, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 109,000 shorts and 41,000 longs open. The difference is again almost threefold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, one should not forget about the high demand for the US dollar, which also plays a role in the fall of the pound/dollar pair. We recommend to familiarize yourself with: Forecast and trading signals for EUR/USD on September 26. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair continues its downward trend on the hourly timeframe, which can already be called a collapse. How else to call a movement of 800 points in less than a day and a half? In the coming days, the pair can fly from side to side for mind-boggling distances, and the fundamentals and macroeconomics are unlikely to have any significance for the market. We highlight the following important levels on September 26: 1.1212, 1.1354, 1.1442, although the closest level is about 800 points away from the current price value. Senkou Span B (1.1543) and Kijun-sen (1.0909) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. There will be several speeches by representatives of the Bank of England and the Federal Reserve in the UK and the US on Monday, which is very interesting in the current circumstances, but these events are unlikely to provoke a market reaction. Even if provoked, it is unlikely that anyone will notice it. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 05:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322602
GBP: Softer Ahead of CPI Risk Event

Technical Information On The Euro To US Dollar Currency Pair

InstaForex Analysis InstaForex Analysis 26.09.2022 08:40
Technical outlook: EURUSD dropped through fresh swing lows at 0.9552 in the early trading hours on Monday. Prices were quick to bounce back quickly to the 0.9650-60 area thereafter as the daily chart looks to be carving a Doji or Pinbar candlestick pattern. The single currency pair is seen to be trading close to 0.9630 at this point in writing as the bulls prepare to be back in control. EURUSD might have hit a major Fibonacci support level at 0.9652 during the Asian session. As projected on the chart here, it seems a potential target hit of a larger-degree downswing. Follow-through is required now to confirm a bullish reversal ahead. Immediate price resistance is now seen at about 1.0200 as seen here and a break there is needed to confirm that the bulls are back in control. EURUSD needs to stay above 0.9552 to relieve short-term selling pressure. The preferable strategy now is to stay aside for a while and wait for price confirmation of a potential bottom in place before committing on the long side again. A strong support zone is seen towards the 0.9500-50 area and the bulls are likely to come back in control soon. Trading plan: Preparing for a potential bottom and reversal from the 0.9500-0.9550 zone. Good luck!     Relevance up to 07:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294124
Analysis Of USD/CHF Pair: The Swiss Currency Pair Rebounds

Can We Expect A Return After The USD/CHF Pair Increases?

InstaForex Analysis InstaForex Analysis 26.09.2022 08:44
The USD/CHF pair rallied in the short term and now it stands at 0.9848 right below the 0.9850 key resistance. After its strong growth, we cannot exclude a temporary retreat. The rate could come back down to test and retest the near-term support levels before jumping toward new highs. Technically, the bias is bullish as the Dollar Index is strongly bullish. The USD/CHF pair jumped higher after the US Flash Services PMI and Flash Manufacturing PMI reported better than expected data on Friday. Today, ECB President Lagarde Speaks, and the FOMC Member Collins and FOMC Member Mester's remarks could move the USD. USD/CHF Breakout Attempt! The USD/CHF pair edged higher after retesting the ascending pitchfork's warning line (wl1) and the 0.9755 former low (static support). Now, it has reached the 0.9850 former high which represents a static resistance. In the short term, it could come back to test and retest the former highs trying to accumulate more bullish energy. Only false breakouts through the 0.9850 could signal an extended sideways movement. USD/CHF Outlook! A valid breakout through 0.9850, jumping and closing above this level may activate further growth at least towards the 0.9886 historical level. This scenario brings potential long opportunities. A larger upwards movement could be activated by a valid breakout above 0.9886.   Relevance up to 07:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294126
Ethereum Market Is Showing Bullish Signals

Ethereum (ETH) Has A Chance For Potential Growth

InstaForex Analysis InstaForex Analysis 26.09.2022 08:48
Technical outlook: Ethereum dropped through the $1,270 lows over the weekend before finding support again. The crypto might have bounced from the Fibonacci 0.618 retracement of its recent upswing between $1,220 and $1,328 respectively. The crypto is seen to be trading close to $1,295 at this point in writing and is expected to push higher towards $1,800 at least. Ethereum earlier found support around $1,220 which is the Fibonacci 0.618 retracement of the entire rally between $800 and $2,031. Furthermore, $1,220 is also the past resistance-turned-support zone as projected on the chart here. Also, note that an Engulfing Bullish candlestick was produced on the daily chart last week. All the above facts are hinting at a potential rally against $1,200. Initial resistance is seen through the $1,790-1,800 area and the bulls might be targeting the same levels. Only a break below $1,220 will be considered to be bearish as prices might drop towards $1,000 which is initial support as seen on the chart here. Trading plan: Potential rally towards $1,790-1,800 against $1,000 Good luck! Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294128
For What It Is Worthy To Pay Attention Next Week 23.01-29.01

Markets Affected By The Announcement Of Tax Cuts In The UK, The Intervention Of The Japanese Authorities

Saxo Bank Saxo Bank 26.09.2022 09:07
Summary:  The global macro environment took another beating late last week with disappointing Eurozone PMIs and a UK mini-budget causing a havoc in markets as it fueled further debt and inflation concerns. Dollar dominance continued with sterling pressured despite higher UK yields, and risk off tone is likely to continue as Russia-Ukraine tensions in focus. The yen’s intervention risks also on watch as Japan returns from holiday today. Oil prices slid to multi-month lows amid a stronger dollar and demand concerns, with supply factors turning supportive for now, weighing on energy stocks. What is happening in markets?   The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) continue to tumble on rising interest rates  The selloff last Friday continued its long stretch of turbulence, which first kicked off following Powell’s hawkish Jackson Hole speech on August 26, then was exacerbated by a much-stronger-than expected CPI on September 13. And the selloff has most recently been bolstered by the hawkish rate and economic projections released after the FOMC meeting last Wednesday. Adding to the woes, earnings warnings from heavy-weight industrial and transportation companies have warned of weaker demand and an opaque outlook. The S&P 500 lost 12% and Nasdaq 100 dropped 13.9% over the period. Of note, last Friday, financial conditions tightened further, with US 2-year yields soaring to 4.2%, the highest since 2007, while the dollar soared to a new high and dragged down stocks, with both the S&P 500 and Nasdaq ending Friday down 1.7% lower.   Big US stock movers: oil and gas stocks plunge as oil falls to an eight-month low  All 11 sectors in the S&P500 closed lower on Friday, with Energy falling the most, 6.8%, after WTI crude declined by about 5% to an eight-month low after the US dollar hit its highest level in two decades on fears rising interest rates will tip major economies into a recession. APA Corp (APA:xnas) and Marathon Oil (MRO:xnys) fell about 11%. FedEx (FDX:xnys) fell 3.4% with its US$2.7 billion cost-saving by cutting flights, deferring projects, and closing offices facing skepticism. Ford (F:xnys) fell 3.6%, following a WSJ report that Ford delayed vehicle deliveries due to supply chain issues in getting Ford logo badges to put on its vehicles. On the upside, Generac Holdings (GRNC:xyns), Domino’s Pizza (DPZ:xyns) shares rose the most in the S&P 500 on Friday, gaining 3.2% and 3.1% respectively, perhaps with traders closing shorts as their stocks are continuing to hit new lows on a yearly basis.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rattled by soaring U.K. bond yields  In London trading hours before New York came in, U.S. treasuries were rattled by the jaw-dropping, emerging market style meltdown in U.K. Gilts, as 5-year UK Gilts soared 50bps and 10-year Gilts jumped 33bps in yields in an hour, following the announcement of a massive loosening of fiscal policy of nearly 2% of GDP by the new U.K. government. Investors are worried as when the U.K. acted similarly last time in 1972, inflation soared and the U.K. had to go to the IMF for a loan in 1976. When New York came in, bids emerged for U.S. treasuries, in particular, for the long end of the curve. 10-year and 30-year yields fell 3bps to 3.68% and 3.61% respectively while 2-year yields finished the session 8bps higher at 4.20%, the highest level since 2007.    Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) glided lower  Hang Seng Index continued its losing streak and tumbled 1.2% to its lowest level last seen in 2011.  Materials, healthcare, China Internet, EV, shipping, and consumer stocks led the market lower.  In the materials sector, Ganfeng Lithium (01772:xhkg) plunged 5%, followed by MMG (01208:xhkg) down 3.6%, and China Shenhua (01088:xhkg)  off 3.4%.  Despite the weakness in international crude oil prices, PetroChina (00857:xhkg) and Sinopec (00386:xhkg) managed to bounce by around 1.5%. Alibaba (09988:xhkg), Tencent (00700), and Meituan (03690:xhkg) declined by nearly 3%. Hong Kong’s end of hotel quarantine requirement lifted the share price Cathay Pacific (00293:hk) by 1% while Chinese airlines declined moderately.  Hong Kong luxury retailers gained, with Oriental Watch (00398:xhkg), Luk Fook and Chow Sang Sang rising from 0.5% to 2.2%. Banks in Hong Kong gained in anticipation of improvement in net interest margins following the lenders increased their prime rates, BOC Hong Kong (02388:xhkg) rising 3.8%, Hang Seng Bank (00011:xhkg) up by 2.5%. In mainland A shares, CSI300 swung between modest gains and losses and finished the day down by 0.3% and declining to within 3% from its April low. In terms of sectors, electronics, semiconductors, autos, coal, and solar power were among the worst laggards, while banks and appliances outperformed. Australia’s ASX200 (ASXSP200.1) to be pressured by oil prices pulling back  This week Australia’s share market will likely take its lead from commodity prices pulling back, with oil stocks like Woodside (WDS:xasx), Santos (STO:xasx) and Worley (WOR:xasx) to take a hair cut. Inversely, the coal price has continued to move higher, along with coal futures, so there is likely to be further upsdise in coal stocks including; New Hope, Whitehaven (WHC:xasx) and Coronado (CRN:Xasx) Washington Soul Patts (SOL:xasx). Dollar dominance continues, sterling battered The dollar rallied broadly, hitting a new all-time high against a currency basket and pushing the euro to a 20-year low while the pound plunged to a fresh 37-year low below 1.10 after the new UK government unveiled a massive fiscal stimulus plan to boost economic growth, which is sure to send inflation soaring even higher and force the BOE to do even more QT. Safe-haven demand also boosted the greenback amid risks from the escalation of Russia tensions and more signs of a slowing Chinese economy, which raised concerns about the outlook for global economic growth.  Crude oil (CLU2 & LCOV2) inches below key supports Crude oil prices fell sharply last week with the focus fixed on demand concerns while supply issues turned supportive. The continued surge higher in dollar and yields, aided by not just the FOMC but also the UK fiscal expansion measures into the end of the week, drove a slump in risk appetite. Brent crude fell to a nine-month low of $86.15/bbl, and this may warrant an OPEC action to support prices. Russia also warned it will not supply commodities to nations that join any agreement to cap prices for its crude. WTI crude traded below $80/bbl in early Asian trading hours as the new week kicked off.   What to consider? US PMIs come in better than expectations US flash PMIs for September surpassed expectations across the board, as manufacturing rose to 51.8 (prev. 51.5, exp. 51.1) and services, despite remaining in contractionary territory, printed 49.2 (prev. 43.7, exp. 45.0). Composite lifted to 49.3 from 44.6. At the same time, the inflation components of the PMIs continue to show some relief, with the report showing that supplier shortages eased and both cost and selling prices for both goods and services were at fresh lows, while still-high compared to the usual levels.  Eurozone PMIs disappoint, but ECB speakers (including Lagarde) will be in focus this week Both manufacturing and services PMIs for the Eurozone came in weaker-than-expected in a flash reading for September, with rising energy costs and decline in purchasing power weighing on manufacturing activity as well as the services sector. The headline reading fell to 48.2 in September from 48.9 in August. New orders disappointed, and the outlook was bleak as well. Manufacturing continues to be hit harder by elevated commodity prices. The reading slipped to 48.5 from 49.6. The services figure came in a bit higher at 48.9, but still fell from 49.8 in the previous reporting period. While supply bottlenecks eased, surging energy prices suggest these could reverse again. UK’s historic tax cuts raise the case for a BOE’s emergency rate hike New UK Chancellor Kwasi Kwarteng announced a mini-budget on Friday, which included wide-ranging tax cuts of the order of GBP 45bn, adding to an estimated cost of GBP 60bn for the energy plan. Instead of stabilizing markets, the announcement sparked mayhem as it promised even more inflation at a time when the UK is set to slide into a crippling stagflationary recession as prices soar. Bank of England last week stuck with a 50bps rate hike as recession is likely on the cards. Bonds were sold off and the sterling dipped to 37-year lows, suggesting UK’s inflation-fighting credibility at stake and demands risk premia.  Investors pile into insurance against further market sells offs. Over the last four weeks money managers have spent US$34 billion purchasing put options, which provides protection against a further fall in stock markets (according to the Financial Times). According to the article, ‘Investors pile into insurance against further market sell-offs', $9.6 billion was spent in the last weeks alone on options protecting against downside risks.  Will Japanese authorities intervene further to defend the yen? The Japanese authorities intervened in the currency markets for the first time in two decades last Thursday. USDJPY’s move above 145 following a hawkish FOMC and a still-accommodative Bank of Japan prompted the intervention, and dragged the pair to sub-141 levels before some of the move was retraced. However, Japan was closed on Friday for a holiday, and returns to trading today. Moreover, Governor Kuroda will make a speech and talk to reporters today. We believe the yen could weaken further given the pressure from yield differentials between the US, which continues to rise to fresh highs, vs. the yields in Japan which continue to remain capped. Meanwhile, the intervention last week has been possibly unilateral, suggesting it may not be long-lasting. This continues to raise the possibility of further intervention from the Japanese authorities, especially if USDJPY rises back above 145. Russia referendums results may create market volatility The four Moscow-held regions of Ukraine – Donetsk, Luhansk, Kherson and Zaporizhzhia – began voting on Friday on whether to become part of Russia, and results may be expected this week. The referendums are reminiscent of one in 2014 that saw Ukraine’s Crimea annexed by Russia. The four regions’ integration into Russia – which for most observers is already a foregone conclusion – would represent a major new escalation of the conflict. The threat of nuclear weapons will also keep risk off on the table, with Putin threatening to use “all means” to protect the annexed Russian territory. Hong Kong ended hotel quarantine for arrivals Effective from today, Hong Kong ended its requirements for people arriving Hong Kong to be under hotel quarantine.  Under the new arrangement, people arrive to Hong Kong from overseas and Taiwan are still required to undergo three days of medical surveillance at home or hotels.  They can go out, including taking public transportation and going to work but are still denied access to some public venues such as restaurants during the medical surveillance as well as required to take RAT daily for seven days plus three PCR tests on day 2, 4 and 6 each.  For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast .     Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-sept-26-2022-26092022
The RBA Surprised With A Smaller 25 bp Hike , Sterling (GBP) Rose, The USD Has Weakened

Australia’s Economy Has Remained Resilient, Nike Stocks May Drop

Saxo Bank Saxo Bank 26.09.2022 09:13
Summary:  The week starts with the Japanese cash market returning from a long weekend after the Ministry of Finance’s (MOF) intervention last Thursday to stop the Yen to weaken in response to the hawkish stance of the Fed and the Bank of Japan maintaining an ultra-loose monetary policy. Any follow-up actions from the MOF, if the high of the USDJPY is tested again, will be the focus of the market. Investors will listen carefully to speeches from Fed and ECB officials this week for hints on the magnitude of the next rate hikes. On the data front, the highlights of the week will be the U.S. PCE, Eurozone CPI, and China’s PMIs.   Will Japanese authorities intervene further to defend the yen? The Japanese authorities intervened in the currency markets for the first time in two decades last Thursday. USDJPY’s move above 145 following a hawkish FOMC and a still-accommodative Bank of Japan prompted the intervention, and dragged the pair to sub-141 levels before some of the move was retraced. However, Japan was closed on Friday for a holiday, and returns to trading today. Moreover, Governor Kuroda will make a speech and talk to reporters today. We believe the yen could weaken further given the pressure from yield differentials between the US, which continues to rise to fresh highs, vs. the yields in Japan which continue to remain capped. Meanwhile, the intervention last week has been possibly unilateral, suggesting it may not be long-lasting. This continues to raise the possibility of further intervention from the Japanese authorities, especially if USDJPY rises back above 145.  China PMIs China’s September official NBS Manufacturing PMI and Non-manufacturing PMI as well as the Caixin China Manufacturing PMI are scheduled to release on Friday. The median forecast of, economists surveyed by Bloomberg for the NBS Manufacturing PMI is 49.6 for September, a modest improvement from August’s 49.4 but remains in contraction territory.  Economists cite the lockdown of Chengdu and restrictive measures in some other cities during most part of the month and the weak EPMI released earlier as reasons for expecting the NBS Manufacturing PMI to stay below 50.  The Caixin Manufacturing PMI, which has a larger weight in coastal cities in the eastern region, is expected to slow slightly to 49.4 in September from 49.5 in August, reflecting weaker export-related manufacturing activities and container throughput.  The consensus estimate for the NBS Non-manufacturing PMI is 52.3, remaining in expansionary territory, supported by infrastructure construction but slowing slightly in September from August’s 52.6 due to weakness in the housing sector.  On the other hand, steel production and demand data in September suggest the PMIs may potentially surprise the upside. Russia referendums results may create market volatility The four Moscow-held regions of Ukraine – Donetsk, Luhansk, Kherson and Zaporizhzhia – began voting on Friday on whether to become part of Russia, and results may be expected this week. The referendums are reminiscent of one in 2014 that saw Ukraine’s Crimea annexed by Russia. The four regions’ integration into Russia – which for most observers is already a foregone conclusion – would represent a major new escalation of the conflict. The threat of nuclear weapons will also keep risk off on the table, with Putin threatening to use “all means” to protect the annexed Russian territory.  Eurozone CPI to get closer to 10%, Lagarde speak on watch ECB President Christine Lagarde speaks on Monday and Wednesday, before we get the Eurozone inflation data on Thursday and Friday. The regional CPI is likely to rise further in September from 9.1% YoY in August amid higher energy prices especially as German price-cut measures come to an end. Higher food prices as well as a jump in services inflation will also likely underpin, as does the further weakness in EUR. The ECB itself raised its inflation projections at the recent policy meeting, with its 2022 estimate upped to 8.1% (prev. 6.8%), 2023 raised to 5.5% (prev. 3.5%), and 2024 lifted to 2.3% (prev. 2.1%). There is chatter that the ECB could discuss a 75bps rate rise at the October 27 meeting if the inflation outlook warrants. Fed speakers and US PCE data on watch There’s a rich calendar of Fed speakers to give insights into how to interpret the latest Fed decision. Regional Fed presidents Loretta Mester, Charles Evans and Raphael Bostic will discuss the economic outlook at separate events, while Fed Vice Chair Lael Brainard will offer opening remarks at a New York Fed conference. It appears that the Fed rhetoric will continue to back the fight against inflation, as tightening of financial conditions remains the key focus. The Fed’s preferred inflation measures, the PCE is due at the end of this week, and it will likely echo the same message as given by the last strong CPI number which has made the Fed even more hawkish in the last few weeks since the Jackson Hole. Headline numbers may be lower due to the decline in gasoline prices, but the price pressure on services side will likely broaden further. Last week, the Fed also raised its forecasts for inflation, with the central bank now seeing core PCE at 4.5% by the end of this year (it previously projected 4.3%), moderating to 3.1% next year and at 2.1% at the end of its forecast horizon in 2025, but thinks that headline PCE prices will be at its 2% target by then. The third estimate of Q2 GDP will also be released in the US, likely confirming that the US economy remains in a technical recession.  Can Nike weather the inflation storm? The highlight in this week’s earnings calendar is Nike reporting FY23 Q1 (ending Aug 31) on Thursday.  In our colleague Peter Garnry’s note “Can Nike weather the inflation storm?”, he suggests that the biggest potential risk Nike’s results, is missing the anticipated bounce in the EBITDA margin to 15.8%. “Given the ongoing demand destruction among consumers and the strong USD it is likely that revenue could disappoint again and that margins cannot bounce back”, Peter remarks. If Nike misses expectations or guides for a bearish outlook the stock will likely fall. The technical indicators for Nike are quite bearish with the monthly chart showing further downside is likely ahead, with next level of support around perhaps $87.03.  Australia’s economic pulse is expected to weaken; with credit and retail numbers expected to fall Australia’s economy has remained resilient despite the global growth slowdown, and this has been reflected in its stock market outperforming global markets this year. However this week, Australia’s economic pulse checks are likely to weaken with retail sales and private sector credit (borrowing) both expected to fall, with the data on watch on Wednesday and Thursday respectively. If data is weaker than expected, consumer spending equities and banking stocks  will likely face pressure. Meanwhile, in currencies, The AUDUSD will be a currency pair to watch, which could face further downside over the longer term. Inversely, speaking of currencies, the AUDGBP is a pair to watch with Australia’s surplus at records, vs UK deficit likely to widen.  Key economic releases & central bank meetings this week Monday, Sep 26 US: Chicago Fed National Activity Index (Aug)US: Dallas Fed Manufacturing Activity (Sep)US: 2-year note auction (USD43 billion)Japan: PMI Manufacturing (Sep)Singapore: Industrial Production (Aug)UK: Rightmove House Prices (Sep)Germany: IFO Survey (Sep)   Tuesday, Sep 27 US: Durable Goods Orders (Aug)US: New Home Sales (Aug)US: Conference Board Consumer Confidence (Sep)US: 5-year Note Auction (USD44 billion)China: Industrial Profits (Aug)Eurozone: ECB M3 Annual Growth Rate (Aug)   Wednesday, Sep 28 US: MBA Mortgage Applications (weekly)US: Advance Goods Trade Balance (Aug)US: Wholesale Inventories (Aug)US: Pending Home Sales (Aug)US: 2-year FRN Auction (USD22 billion)US: 7-year Note AuctionJapan: BoJ Monetary Policy Meeting Minutes (July 20-21)France: Consumer Confidence (Sep)Italy: Consumer Confidence (Sep)Italy: Manufacturing Sentiment (Sep)Italy: Economic Sentiment (Sep)   Thursday, Sep 29 US: Jobless claims (weekly)US: GDP (Q2, 3rd)HK: Trade data (Aug)UK: Mortgage Data (Aug)Eurozone: Economic, Industrial & Services Confidence (Sep)Germany: HICP (Sep, flash)Spain: HICP (Sep, flash) Friday, Sep 30  US: Personal Income & Spending (Aug) US: PCE & Core PCE (Aug)US: Chicago PMI (Sep)US: U of Michigan Consumer Sentiment (Sep, final)US: U of Michigan 5-10-year Inflation Expectations (Sep, final)Japan: Unemployment Rate (Aug)Japan: Industrial Production (Aug)Japan: Retail Sales (Aug)Japan: Housing Starts (Aug)Japan: Consumer Confidence Index (Sep)China: NBS Manufacturing & Non-manufacturing PMIs (Sep)China: Caixin China Manufacturing PMI (Sep)HK: Retail Sales (Aug)India: RBI Policy Meeting (Sep)UK: GDP (Q2, 2nd)France: HICP (Sep, flash)Germany: Unemployment (Sep)Eurozone: HICP (Sep, flash)  Key earnings releases this week Tuesday: Ferguson(FERG:xnys) Wednesday: Paychex(PAYX:xnas), Tapes(CTAS:xnas) Thursday: Polestar Automotive(PSNY:xnas), H&M(HMb:xome), Nike(NKE:xnys), Micron Technology(MU:xnas), CarMax(KMX:xnys) Friday: Carnival(CCL:xnys), Nitori(9843:xtks)   Source: https://www.home.saxo/content/articles/macro/saxo-spotlight-whats-on-investors-and-traders-radars-this-week-26092022
Asia Market: Optimistic Headlines From Regional Leaders China And Japan

South Korea And Decision To Use The Country’s Foreign Exchange Equalization Fund

Saxo Bank Saxo Bank 26.09.2022 09:18
Summary:  The bullwhip crunch in global manufacturing is hurting all the world’s largest exporters. In our view, the most vulnerable countries are South Korea, Germany and the United States. But there is more: the situation could further deteriorates if the current overvalued dollar environment causes a global currency crisis. Last week’s Bank of Japan and Japan Ministry of Finance intervention in the FX market is perhaps only the beginning of more interventionism to come. Click to download this week's full edition of MacroChartmania composed of more than 100 charts to track the latest macroeconomic and market developments. All the data are collected from Macrobond and updated each week. South Korea’s exports fell 8.7 % in the first twenty days of September from the same period a year earlier. This matters because South Korea is considered as a bellwether for global trade and growth by economists. The drop is partially explained by holiday effects (the Chuseok holidays from 9 to 12 September) and by slowing growth in main trading partners. Exports to Japan over the same period decreased by 8.2 % and exports to China dropped by a stunning 14 %. This is an indicator of how strong the current slowdown of the Chinese economy is – see the below chart. Exports to Vietnam are falling by 12.9 %. The South-East Asian country is a major trade partner for South Korea. Over the years, many South Korean high-tech companies have sent components to be assembled there (Samsung, for instance). This has accelerated in recent years on the back of the US-China trade war. A bullwhip crunch in global manufacturing The counter-performance of South Korea trade is just one of many bad trade indicators that have been released in the recent weeks. For example : container spot rates are set for a hard landing. The bellwether Shanghai Containerized Freight Index is down 58 % since January and spot rates have fallen by around 10 % for the fourth week running. This is the most watched rate indicator on sea freight from China. This is not only caused by the effect of China’s zero covid policy on trade. This reflects first and foremost a slowdown in global demand. The Drewry World Container Index draws a similar picture. This is a composite sea freight rate on eight major routes to/from the United States, Europe and Asia. It has been going down for the 30th week in a row. It is now standing 57 % lower than the same period last year. Global recession or no recession, it seems obvious that the bullwhip crunch in global manufacturing is going to hurt all the world’s biggest exporters, in the same way they enjoyed a massive boom in 2020-21. During the Covid period, consumers have reacted by stocking up on essential goods, thus leading to shortages. Supply chains have had to ramp up production to cope with the unprecedented increase in demand. Now, demand is decreasing due to higher cost of living and fears of recession. The world’s largest exporters are in a tough position. In our view, the most vulnerable countries are South Korea, Germany (where the manufacturing sector is hit by a massive 139 % year-over-year increase in the energy bill) and the United States too. The beginning of a global currency crisis ? The risk of a global currency crisis is another headache for exporters. A weak currency is usually beneficial for exports. But a too weak currency often increases the cost of intermediary goods and energy for countries which are dependent on it from external supply. Last week, Japan intervened in the forex market to stem the depreciation of the Japanese yen with the blessing of the U.S. Treasury. However, this is unlikely to succeed unless there is a coordinated intervention by the United States, Europe, Japan and the United Kingdom, as we saw in the September 1985 Plaza Accord. Other countries are favoring less costly options – forex interventions are depleting foreign reserves and are rarely successful in the long run. For instance, they are providing FX hedging protection to most-exposed companies. This is the pace chosen by South Korea. On 23 September, the government decided to use the country’s foreign exchange equalization fund to meet shipbuilding companies’ forex hedging demands for their overseas orders. As currency volatility is increasing in an overvalued dollar environment, expect more and more countries and central banks to try to rein in the depreciation of their local currency. But we doubt this will be enough to revive global manufacturing.   Source: https://www.home.saxo/content/articles/macro/chart-of-the-week--s-korea-trade-data-are-on-a-free-fall-26092022
Oanda Podcast: US Jobs Report, SVB Financial Fallout And More

The United States And Investments In New Sources Of Energy, Demand For The iPhone 14 Is Low

Saxo Bank Saxo Bank 26.09.2022 09:25
Summary:  Market sentiment continues to deteriorate as markets test the lows of this bear market on the surging US dollar and US treasury yields, although the latter came down sharply from the highs Friday as the equity market sell-off accelerated. The strong US dollar posted new highs for the cycle against many DM currencies, while sterling is in crisis mode, plunging to an all-time low at one point overnight below 1.0500 to the US dollar.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Last week was hectic with many central bank decisions, BoJ currency intervention and Russian military mobilisation. This morning US equities are not in a better mood with S&P 500 futures down 0.7% trading around the 3,680 level as the US 10-year yield continues to move trading at 3.76%. The VIX Index has also pushed to almost 30 and the VIX forward curve slipped into inversion on Friday signaling a potential panic selloff is in the making. We expect pressures to continue in equities, but with sentiment already historically low, there could be a short-term rebound if S&P 500 futures can hold the line around the June lows at around the 3,640 level. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index fluctuated between modest gains and losses and was 0.4% lower as of writing. HSBC (00005:xhkg) and Standard Charted (02888:xhkg) tumbled around 8% as the Pound Sterling was in turmoil. The market however was supported by rallies in China internet stocks, the China catering space, EV names, and Macao casino stocks. In mainland bourses, tourism, catering, semiconductors, solar power and EV rebounded, CSI300 up by 0.3%. Strong USD, weak GBP The US dollar strength has continued to start this week, as the greenback posted new cycle highs versus most other G10 currencies, with the notable exception of USDJPY, which did trade back higher above 144.00, but continues to respect the threat of official intervention from Japan after last week’s episode. Most intense focus at the moment is on the collapsing pound sterling, which crashed to an all-time low below 1.0500 overnight, down more than 5% in a couple of trading sessions. More on whether sterling’s slide will lead to an emergency move from the Bank of England below. The EURUSD traded to new cycle lows below 0.9600 overnight. There are no real chart points for that exchange rate until the all-time low of 0.8230 from the year 2000. Gold (XAUUSD) under pressure A hawkish Fed and the continued rise in real rates and not least the surging US dollar has seen gold fall towards the lowest since April 2020. Last week’s 1.9% drop, however, was relatively muted given the +3% rally in the dollar index and a 24 basis points jump in the US ten-year nominal and real yield, but as long the dollar continues its relentless rise and until the market reaches peak hawkishness and yields start to top out, gold will struggle to act as a defense against stagflation. Ahead of last week's slump money managers had increased short bets on gold to become the most bearish in more than four years. Having dropped below $1654 on Friday, the market may now target the 50% retracement of the 2018 to 2020 rally at $1618. Focus being the dollar, US inflation data and Russia geopolitical developments. Crude oil (CLX2 & LCOX2) The unrelenting pressure on commodities, including crude oil, continues following Friday’s gloomy session which saw accelerated dollar strength and growth pessimism cause a ripple through markets. The result being a near 5% drop in crude on Friday and weakness remained the theme overnight in Asia as the dollar ripped higher against most major currencies, not least a collapsing sterling. WTI trades below $80 per barrel while a return to the mid-80's in Brent may soon see OPEC+ action to support prices. With Russia repeating its warning of not supplying commodities to nations that join any agreement to cap prices for its crude, and with the market increasingly having priced in a recession, the energy sector could be the first to find support once the dollar stabilises. US treasuries (TLT, IEF) US treasury yields pulled sharply higher on Friday, but treasuries finally found support later in the session before melting lower again to start the week in Asia – taking the 10-year treasury yield back toward the cycle high near 3.80%. The next focus higher for the US 10-year benchmark is 4.00% after the cycle high 3.50% level fell last week. This was the highest yield posted all the way back in the 2009-10 period. What is going on? Right bloc wins Italian election, with Brothers of Italy’s Giorgia Meloni set to be next PM of Italy The bloc will have at least 114 Senate seats, ten more than the level required for a majority.  The three right-leaning parties Brothers of Italy, League and Forza Italia won about 43% of the popular vote, with 25% going to Brothers of Italy. The new government will have to scramble to put together a new budget for approval by the Italian parliament and the EU. Populist pressures could see the new government calling for large deficit spending that former PM Draghi refused to consider. Meloni has promised to roll back some of the reform measures introduced by Draghi, a move that could risk the EU withholding some portion of the EUR 200 billion of extraordinary EU pandemic budget funds targeted for Italy. US PMIs come in better than expected US flash PMIs for September surpassed expectations across the board, as manufacturing rose to 51.8 (prev. 51.5, exp. 51.1) and services, despite remaining in contractionary territory, printed 49.2 (prev. 43.7, exp. 45.0). The Composite lifted to 49.3 from 44.6. At the same time, the inflation components of the PMIs continue to show some relief, with the report showing that supplier shortages eased and both cost and selling prices for both goods and services were at fresh lows, while still high compared to the usual levels.  Eurozone PMIs disappoint, but ECB speakers (including Lagarde) will be in focus this week Both manufacturing and services PMIs for the Eurozone came in weaker-than-expected in a flash reading for September, with rising energy costs and decline in purchasing power weighing on manufacturing activity as well as the services sector. The headline reading fell to 48.2 in September from 48.9 in August. New orders disappointed, and the outlook was bleak as well. Manufacturing continues to be hit harder by elevated commodity prices. The reading slipped to 48.5 from 49.6. The services figure came in a bit higher at 48.9, but still fell from 49.8 in the previous reporting period. While supply bottlenecks eased, surging energy prices suggest these could reverse again. Apple iPhone 14 initial sales below previous introductions According to initial surveys demand for the iPhone 14 is running below previous model instructions suggesting consumers are holding back due to lower disposable income. The lower initial sales figures are in contrast to the pre-orders of the iPhone 14, but these pre-orders do not come with an obligation to buy. It is also worth noting that Apple has begun assembling some of its iPhone 14 in India.  The United States is boosting investments in new sources of energy Over the weekend, the U.S. government has announced it will provide up to $50 million as a reward to private nuclear fusion firms. They will need to provide pre-conceptual nuclear fusion reactor designs within 18 months of receiving their award. Fusion is considered by experts as a clean energy source with less radioactive waste than existing nuclear power plants. If they succeed, this could help accelerate the transition towards a more sustainable and greener economy. At the same time, the United States is the developed country with the most conventional nuclear capacity under construction, according to the latest data of the World nuclear association. While many European countries are debating whether nuclear energy is safe or not, the reality is that it is one of the safer sources of energy. Radioactivity resulting from uranium use diminishes quickly with time. About 40 years after it is done making power, the radioactivity of the fuel bundle falls by over 99 %. Most of the industrial waste we manage never gets less toxic over time…not even in a million years. Investors pile into insurance against further market sell offs During the last four weeks money managers have spent US$34 billion purchasing put options, which provides protection against a further fall in stock markets (according to the Financial Times). US$9.6 billion was spent in the last weeks alone on options protecting against downside risks, according to the Financial Times article ‘Investors pile into insurance against further market sell-offs'. What are we watching next? Sterling crisis after UK’s historic tax cuts may bring emergency rate hike New UK Chancellor Kwasi Kwarteng announced a mini budget on Friday, which included wide-ranging tax cuts approximately GBP 45 billion, adding to an estimated cost of GBP 60bn for the energy plan. Instead of stabilizing markets, the announcement sparked mayhem as it promised even more inflation at a time when the UK is set to slide into a crippling stagflationary recession as prices soar. The Bank of England last week stuck with a 50bps rate hike as recession is likely on the cards. Bonds were sold off and the sterling dipped to 37-year lows, suggesting UK’s inflation-fighting credibility at stake and demands risk premia, in other words, the Bank of England may be forced to announce an emergency rate hike to stabilize the currency. Will Japanese authorities intervene further to defend the yen? The Japanese authorities intervened in the currency markets for the first time in two decades last Thursday. USDJPY’s move above 145 following a hawkish FOMC and a still-accommodative Bank of Japan prompted the intervention, and dragged the pair to sub-141 levels before some of the move was retraced. However, Japan was closed on Friday for a holiday, and returns to trading today. Bank of Japan Governor Kuroda has been out speaking this morning, with no new signals on offer. The yen could weaken further given the pressure from yield differentials between the US, which continues to rise to fresh highs, vs. the yields in Japan which continue to remain capped. Meanwhile, the intervention last week has been possibly unilateral, suggesting it may not be long-lasting. This continues to raise the possibility of further intervention from the Japanese authorities, especially if USDJPY rises back above 145. Earnings calendar this week The Q3 earnings season kicks off in three weeks but there are still earnings releases being released not following the traditional calendar. The action this week will be on Thursday with earnings from H&M, Nike, and Micron Technology, with earnings from Micron being the most interesting to watch as we already know H&M and Nike are seeing weak demand. Micron has exposure to the consumer electronics industry and manufactures memory chips in Asia which means that the company sits in at the intersection of many interesting trends. Tuesday: Ferguson Wednesday: Paychex, Cintas Thursday: Polestar Automotive, H&M, Nike, Micron Technology, CarMax Friday: Carnival (postponed from last week), Nitori Economic calendar highlights for today (times GMT) 0800 – Germany Sep. IFO Survey 0800 – Switzerland SNB Weekly Sight Deposits 1230 – US Chicago Fed National Activity Index 1300 – ECB President Lagarde to speak 1400 – US Fed’s Collins (Voter this year) to speak 1430 – ECB’s Centeno to speak 1600 – US Fed’s Bostic (non-Voter) to speak 1600 – UK Bank of England’s Tenreyro to speak 1835 – New Zealand RBNZ Governor Orr to speak 2000 – US Fed’s Mester (Voter) to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-26-2022-26092022
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

Forex: Can British Pound To US Dollar (GBP/USD) Reach 1.00?

ING Economics ING Economics 26.09.2022 09:43
The pound has continued its disorderly fall today. Since a U-turn on freshly-announced fiscal measures seems unlikely just yet, many are calling for more significant tightening by the Bank of England. However, an  FX-related hike may prove unsuccessful. Cable may soon hit parity. Elsewhere, Italy's right-wing coalition electoral win may not mean much for EUR USD: Bolstered by Europe's troubles Another week of large dollar gains forces us to re-address the question of whether the greenback is close to its peak. The answer can be found in the key drivers of the dollar's strength. The first is Fed tightening expectations, which do not look likely to be scaled down in the very near term, especially after Chair Jerome Powell recently reiterated his commitment to bringing down inflation in spite of the potential economic damage. We have been highlighting how monetary policy is having a less and less pronounced direct impact on currency movements: this is quite evident when looking at most European developed currencies/central banks. However, the broader effect of Fed tightening expectations on global risk sentiment means that continued hawkish rhetoric may do little to ease the instability in risk assets, and this should ultimately continue to fuel demand for the dollar as a safe-haven currency. The energy crisis and a faster deterioration in the economic outlook outside of the US have also been crucial drivers of dollar strength. Here, the latest developments in the Russia-Ukraine conflict are likely preventing markets from turning more optimistic for now, and activity surveys have continued to point at a grim outlook for the eurozone. In China, sentiment on the yuan has remained bearish, and the People's Bank of China took further steps today to try to support the yuan by imposing a risk-reserve requirement of 20% on FX forward sales. Most importantly, the turmoil in the UK markets on the back of fiscal concerns – which is triggering an EM-like sell-off in the pound (more in the GBP section below) – is further boosting a rush for dollars, and having a spillover effect on other pro-cyclical currencies. Even if the other drivers of dollar bullishness start to lose some power (not very likely, anyway, as discussed above), expect the dollar to stay very well supported until we see some stabilisation in the gilts market and the pound. On the data side, there aren’t too many market-moving data releases to highlight in the US this week. Some interest will be in today’s activity indices from the Chicago and Dallas Fed, on Conference Board consumer confidence tomorrow as well some housing data spread over the week. Fed Chair Powell will speak tomorrow at a conference on digital currencies, while we’ll hear from FOMC members Raphael Bostic, Lorie Logan and Loretta Mester today. DXY should retain a bullish bias for now, and may reach 115.00 even today if the GBP slump accelerates. Let’s see whether, after the US seemed to overlook the Bank of Japan’s FX intervention campaign last week, some speculation about a coordinated depreciation of the dollar (similar to the 1985 Plaza Accord) starts to emerge, although we suspect this is unlikely to be seriously considered as long as US inflation is running this hot.  Francesco Pesole EUR: No obvious implications from Italy's election results Italy’s election results overnight were in line with expectations: the right-wing coalition led by Giorgia Meloni has secured a solid majority in both the Senate and the House. While the euro is trading weaker this morning, it’s hard to tell how much of the move is a mere spillover from the pound’s selloff and how much is related to the election results. A similar warning should be made for BTP swings this morning considering Friday’s big drop. The process to form a government will take a few weeks, and markets will closely focus on the choice of key ministers (especially the Finance and Foreign Affairs ministers) as an early test of Meloni’s pledges to respect EU fiscal rules and Italy’s stance on international politics. At an early stage, we could definitely see the government attempting not to upset markets and broadly follow the reform path set out by previous PM Mario Draghi. Questions about relationships with the EU may start to emerge at some point and could favour a widening of the BTP-Bund spread, although downside risks for the eurozone’s peripheral bonds primarily stem from quantitative tightening discussions at the European Central Bank and spillover from the gilts market, at the moment. In FX, we simply think the euro is facing bigger challenges given the energy crisis and geopolitical uncertainty: we may need to see an escalation in EU-Italy confrontation before a political risk premium is embedded into the euro. Today, we’ll hear from a plethora of ECB speakers. President Christine Lagarde will testify before EU lawmakers, but we’ll also hear from Joachim Nagel, Luis de Guindos, Fabio Panetta, Pablo De Cos and Mario Centeno. Any hawkish further tilt still looks unlikely to offer any sustainable support to the euro. On the data side, the highlight of the week in the eurozone is the CPI report on Friday, which is expected to have accelerated to 9.7%. This is partly due to the end of a cheap transport ticket programme in Germany, but the focus will be on how much other categories have risen. Today, the Ifo survey may continue to point to a generally unsupportive economic outlook for the eurozone, one that however appears largely priced in. All in all, EUR/USD appears to be mostly a dollar (and, partly, a sterling) story. As highlighted in the section above, we think the dollar will stay strong in the near term and this should keep any recovery in EUR/USD quite short-lived. Risks of a break below 0.9500 this week are quite material. Francesco Pesole GBP: Falling disorderly Another 4% sell-off in GBP/USD today and one-week implied volatility up 28% now means this sterling sell-off is officially disorderly. The trouble for sterling now is trying to identify what policy shifts are viable to support the pound – indeed should UK authorities decide that the pound needs supporting. A U-turn on fiscal policy looks highly unlikely just a few days after the new UK government unveiled its set of tax cuts and policy liberalisation. As the guardians of price stability, a few are saying that the Bank of England (BoE) should jump in with a large inter-meeting right hike. We think that the BoE is too psychologically scarred from the events of 1992 to try defensive FX-related rate hikes – e.g. what happens if the BoE hikes 300-500bp and GBP/USD ends up trading lower? Given that fiscal concerns have been the core factor undermining the pound, an announcement that the BoE will suspend planned gilt sales in October may be welcomed by the gilt (and then FX) market.  Alternatively, there is FX intervention, but the UK has only around $80bn in net FX reserves – barely enough to cover two months’ worth of imports. A recourse to larger Dollar Fed swap lines looks unlikely (that line is already unlimited and is designed to address dollar funding challenges not Balance of Payments crises). Other than that, UK authorities may have to let sterling find ‘the right level’. Equally, we think sterling would have to fall a lot further before more credible talk emerged of the UK seeking the first supranational support since 1976. Needless to say, until a policy response is seen, cable will be biased to 1.00 and EUR/GBP to restest the overnight Asian high near 0.9300. Chris Turner CEE: CNB passes hawkish leadership to NBH This week we have two central bank meetings on the calendar: the most dovish Czech National Bank and the most hawkish Hungarian National Bank within the CEE region. On Tuesday we start with the NBH, where we expect a 75bp hike in the base rate to 12.50%, although a 100bp move, as in August, is also on the table, which is the market consensus at the moment. We have seen signs of attempts to steer the hiking cycle towards the end in recent statements from central bankers but still, the NBH remains the most open central bank to rate hikes in the region. On Thursday, on the other hand, we will see confirmation of the end of the hiking cycle from the CNB, which was the first central bank in the region to leave rates unchanged back in August. In our view, the current situation of lower-than-expected inflation and a stable koruna make the board's decision-making easier, and we cannot expect too many surprises this week. Then on Friday, we end the week in Poland with the release of September inflation. Our Warsaw team expects a rise from 16.1% to 16.6% year-on-year, a new record high. However late last week we heard several statements from the NBP including the most hawkish members that the hiking cycle is coming to an end, adding risk to our 25bp hike call for the October meeting. On the FX front, the CEE market is still recovering from last week and is balancing between a falling interest rate differential, a strong dollar and on the other hand a stable gas price, indicating stronger FX. Based on current market expectations, it should not be a problem for the NBH to maintain hawkish expectations and Tuesday's meeting could add support. On the other hand, Fitch published a report on Friday indicating a negative rating outlook if Hungary does not find an agreement with the EC and Moody’s did not publish a planned rating review, probably due to the current uncertainty related to the negotiations. Thus, we can expect another volatile week around 405 EUR/HUF level. The Czech koruna is trading in the CNB's intervention band of 24.60-70 EUR/CZK, however, there is no indication of significant central bank activity in the market so far. Thursday's meeting may thus be a reminder that the CNB is still present in the market and is not going to change anything, which may lead some to close short positions. The Polish zloty saw the biggest recovery after the headlines from Russia last week and we believe that the squeezed positioning gives it solid ground within the region. Plus it could be supported by inflation growth late in the week, to settle below 4.740 EUR/PLN for now. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The Bears Are In Full Control Of The Pound To US Dollar (GBP/USD) Market

InstaForex Analysis InstaForex Analysis 26.09.2022 09:44
Several market entry signals were formed on Friday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1168 level in my morning forecast and advised making decisions on entering the market from it. A breakthrough of 1.1215 and a fall to the 1.1168 area was not long in coming, as the pressure on risky assets increased to a maximum. A false breakout at 1.1168 resulted in a buy signal against the trend and a slight 40 point correction. The bears defended the resistance at 1.1139 in the afternoon, but they failed to get a convenient entry point for selling from there. A false breakout at 1.1025, after another collapse of the pound, gave several good buy signals, which again led to a correction by 50 points. And only after the bears brought the pair back to 1.1079, giving another good reason to sell, the pound fell by more than 200 points. When to go long on GBP/USD: The pair lost another 500 points in today's Asian session and all the reason for the statements made by the British Chancellor of the Exchequer that he plans to cut taxes and provide support to the population of the country. All this is just in time when the Bank of England is trying to fight the 10% inflation rate, which will turn into 13% in the near future. Obviously, such a divergence of rates does not support the British pound, but makes it weaker. Given that there is no reason to buy, I advise you to act very carefully and best of all on a decline. Only a false breakout in the area of 1.0501 will provide a buy signal in order to recover to the resistance of 1.0569. A breakthrough and a downward test of this range may pull speculators' stop-orders behind it, which creates a new buy signal with growth to a more distant level of 1.0633. The farthest target will be the area of 1.0699, where I recommend taking profits. Considering that only the speech of the Bank of England ILC member Silvana Tenreyro is scheduled for today, it is unlikely that anything will help the pound to recover like this. If the GBP/USD falls and there are no bulls at 1.0501, and most likely it will be so, the pair will be under pressure again, which will open up the prospect of updating the low of 1.0429. I recommend opening long positions on GBP/USD immediately for a rebound from 1.0360, or even lower - around 1.0310, counting on correcting 30-35 points within the day. When to go short on GBP/USD: The bears are in full control of the market and the new task is to settle below the level of 1.0500. Of course, the best sell scenario would be a false breakout from 1.0569. This level acts as a kind of upper limit of the short-term horizontal channel, in which the pound has stabilized after the largest Asian sell-off since its similar collapse, when it became known about the coronavirus pandemic in the world. If the pair is under pressure again, the bears' nearest target will be the area of 1.0501. A reverse test from the bottom to the top of this range will provide a good entry point for short positions with goal of a new major sell-off in the 1.0429 area. The farthest target will be a new annual low of 1.360, where I recommend taking profits. In case GBP/USD grows and the bears are not active at 1.0569, the correction of the pound may lead to the area of 1.0633. Only a false breakout at this level will provide an entry point into short positions, counting on the pair's further downward movement. If traders are not active there, I advise you to sell GBP/USD immediately for a rebound from 1.0699, counting on the pair's rebound down by 30-35 points within the day. COT report: An increase in short positions and a decrease in long ones were recorded in the Commitment of Traders (COT) report for September 13. This once again confirms the fact that the British pound is in a major downward peak, from which it is not as easy to get out as it might seem. This week, in addition to the Federal Reserve meeting, there will also be a meeting of the Bank of England committee, at which a decision will be made to raise interest rates, which will negatively affect the economy, which is gradually sliding into recession, as evidenced by the latest macroeconomic statistics. A recent speech by BoE Governor Andrew Bailey confirms the committee's aggressive intentions. On the one hand, an increase in interest rates should support the pound, but on the other hand, in the face of a sharp slowdown in economic growth and a crisis in living standards in the UK, such measures force them to get rid of the British pound, relying on the US dollar as a safe-haven asset. High U.S. rates are also attracting investors, increasing demand for the U.S. dollar. The latest COT report indicated that long non-commercial positions decreased by 11,602 to 41,129, while short non-commercial positions rose by 6,052 to 109,215, which led to an increase in the negative value of the non-commercial net position to the level of - 68,086 versus -50,423. The weekly closing price collapsed from 1.1504 against 1.1526. Indicator signals: Trading is below the 30 and 50-day moving averages, indicating a continuation of the bear market. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of growth, the average border of the indicator around 1.0803 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.       Relevance up to 08:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322612
In The Coming Days Will Be The Final Consolidation Of Bitcoin

The Downward Trend Remains Strong In The Bitcoin Market

InstaForex Analysis InstaForex Analysis 26.09.2022 09:49
Technical analysis: BTC/USD has been trading downside as I expected and the price and the price is heading towards downside objectives from last week. I still see potential for the further drop. Trading recommendation: Due to the strong downside pressure in the background and breakout of the triangle pattern, I see potential for further drop.. Watch for the potential selling opportunities on the intraday rallies with the downside objectives at the price of $18.000 and $17.700. MACD oscillator is showing downside reading, which is good sign for further downside movement. Key resistance is set at the p[rice of $19.800 Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 09:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294146
The Silver Might Then Extend The Recent Pullback

Silver Market: Further Downside Movement Is Expected

InstaForex Analysis InstaForex Analysis 26.09.2022 09:54
Technical analysis: Silver has been trading downside as I expected and the price has reached two downside objectives at $18.80 and $18.50. Anyway, I still see potential for further drop towards the third target. Trading recommendation: Due to the strong downside pressure in the background and breakout of the trend line, I see potential for further drop. Watch for the potential selling opportunities on the intraday rallies with the next downside objective at the price of $18.00. MACD oscillator is showing downside reading, which is good sign for further downside movement. Short-term resistance is set at the price of $19.75   Relevance up to 09:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294152
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

The US Dollar To Canadian Dollar (USD/CAD) Pair: The price Is On Strong Bull Run

InstaForex Analysis InstaForex Analysis 26.09.2022 09:59
Technical analysis: USD/CAD has been trading upside as I expected and the price is on strong bull run. I still see potential for further rally after the pullback. Trading recommendation: Due to the strong upside condition on USD/CAD, I see potential for further growth towards the next key pivot level. Watch for the potential buying opportunities on the intraday dips with the upside objective at the price of 1.3700. MACD oscillator is showing upside reading with no signs for the reversal. Support level is set at the price of 1.3550   Relevance up to 09:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294163
German labour market starts the year off strongly

German Ifo Index Went Down. What Problems German Economy Face With?

ING Economics ING Economics 26.09.2022 11:18
The German economy currently only knows one direction: south. The Ifo index is the latest sentiment indicator suggesting that the economy is sliding into a winter recession German Ifo Index - September Germany’s most prominent leading indicator just sent more recession signals. In September, the Ifo index dropped to 84.3, from 88.5 in August. This is the fourth consecutive drop. Both the current assessment component and expectations dropped significantly. Expectations are now at their lowest level since the financial crisis. The main reason for a further weakening in economic sentiment is clear: high inflation and its implications on corporate costs and consumer demand. Recession remains inevitable As in the rest of Europe, with the end of the summer, recessionary forces have come to the fore. While the services industry benefitted from a post-lockdown boost, industry saw some relief in global supply chains and backlogs being reduced. In recent months, however, order books have started to shrink, and high energy and commodity prices are weighing on demand and putting pressure on profit margins. Companies can no longer pass through higher costs to consumers as easily as in the first months of the year. Looking ahead, the German economy continues to approach a perfect storm. The war in Ukraine has probably marked the end of Germany’s very successful economic business model: importing cheap (Russian) energy and input goods, while exporting high-quality products to the world, benefitting from globalisation. The country is now in the middle of a complete overhaul, accelerating the green transition, restructuring supply chains, and preparing for a less globalised world. And these things come on top of well-known long-standing issues, such as a lack of digitalisation, tired infrastructure, and an ageing society, to mention a few. In the coming weeks and months, these longer-term changes will be overshadowed by shorter-term problems: high inflation, surging energy prices, ongoing supply chain frictions and weakening global demand. A recession is inevitable. However, contrary to previous recessions like the financial crisis or the pandemic, the German economy doesn’t look as if it is dropping like a stone but rather sliding into a long winter recession. Read this article on THINK TagsIfo index Germany Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/AUD Pair May Have The Potential To Continue Its Decline

There Are Many Indications That The Euro-US Dollar Pair Is Moving Downwards

InstaForex Analysis InstaForex Analysis 26.09.2022 11:24
Trend analysis (Fig. 1). The euro-dollar pair may move downward from the level of 0.9688 (close of Friday's daily candle) to the target of 0.9503, the 208% Fibonacci retracement level (red dotted line). From this level, an upward movement is possible with the target of 0.9646, the 14.6% retracement level (white dotted line). After testing this level, the price may continue to move up to test 0.97401, the 23.6% retracement level (white dotted line). Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – down; Volumes – down; Candlestick analysis – up; Trend analysis – down; Bollinger bands – down; Weekly chart – down. General conclusion: Today the price may move downward from the level of 0.9688 (close of Friday's daily candle) to the target of 0.9503, the 208% Fibonacci retracement level (red dotted line). From this level, an upward movement is possible with the target of 0.9646, the 14.6% retracement level (white dotted line). After testing this level, the price may continue to move up to test 0.97401, the 23.6% retracement level (white dotted line). Alternative scenario: from the level of 0.9688 (close of Friday's daily candle), the price may move downward with the target of 0.9609, the lower limit of the Bollinger band indicator (black dotted line). After testing this level, the price may roll back up.   Relevance up to 08:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322604
British Pound (GBP) Amid Fiscal Stimulus. Which Way Did USDCAD Go After Retail Data?

British Pound (GBP) Amid Fiscal Stimulus. Which Way Did USDCAD Go After Retail Data?

Jing Ren Jing Ren 26.09.2022 08:13
In this article: USDCAD EURGBP GER 40 USDCAD breaks major resistance The Canadian dollar slipped after July’s retail data fell short of expectations. The current rally continues to accelerate after the US dollar rose to a fresh two-year high above 1.3420. A lack of selling pressure enables the bulls to push towards July 2020’s high at 1.3640. Though short-term price action could use a little breathing room after the RSI ventured into overbought territory multiple times. 1.3390 would be the first support in case of pullback, and strong interest could be expected from bullish trend followers. EURGBP breaks higher The pound tumbles as Britain’s new fiscal stimulus raises doubts about its debt burden. A previous break above June’s high at 0.8720 had flushed out the remaining selling interest. Following a brief consolidation, the euro’s surge above 0.8780 triggered a runaway rally to a two-year high at 0.9290. The RSI’s extreme overbought condition may cause profit-taking with 0.8930 near the base of the momentum and the 20-hour moving average as a fresh support. Further extension may carry the pair to March 2020’s high at 0.9500. GER 40 falls through critical floor The Dax 40 plunged over wide-spread unease about the direction of inflation and rate hikes. A fall below the double bottom at 12420 invalidated the bounce over the past few months and signalled a return to the bear market. Strong momentum is a sign of liquidation as the last bulls rush to the exit. As the RSI sank into the oversold area, the psychological level of 12000 may see some buying. However, bounces may be capped below 12500 where the bears could double down and push towards October 2020’s low around 11400. Read next: Leaders Must Take Action To Protect The Environment. The Statement By E. Muska Will Cause Confusion| FXMAG.COM
The Upside Of The EUR/USD Pair Remains Limited

The Euro To US Dollar (EUR/USD) Pair: The Strong And Dynamic Sell-off Continues

InstaForex Analysis InstaForex Analysis 26.09.2022 11:29
Technical Market Outlook: The EUR/USD pair made another swing low as the strong and dynamic sell-off continues. The last swing low was made at the level of 0.9556, so the market is trading far away from the parity level. No nearest technical support in view as the market hits the multi-year lows, however, the resistance is seen at 0.9811. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the down trend reversal is confirmed. Please watch the USDX as the correlation between this two markets (EUR/USD and USDX) is directly opposite. Weekly Pivot Points: WR3 - 0.99372 WR2 - 0.97857 WR1 - 0.97189 Weekly Pivot - 0.96342 WS1 - 0.95674 WS2 - 0.94827 WS3 - 0.93312 Trading Outlook: The EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue far below the parity level, towards the new multi-year lows. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Please notice, there is plenty of down room for the EUR to go as the bears keep making a new, multi-year lows.     Relevance up to 09:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294173
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

Very Dramatic Moves In Forex Markets With The Euro (EUR) And The Pound (GBP)

Swissquote Bank Swissquote Bank 26.09.2022 11:13
The FX markets kick off the week on an extremely chaotic note. Both the pound and the euro are being severely punished for the political decisions that are taken in the UK and in Italy respectively. Elections in Italy As expected, the far-right candidate Giorgia Meloni won a clear majority in Italy at yesterday’s election, with Brothers of Italy gaining more than 25% of the votes. And Meloni’s right-wing alliance with Salvini’s League and Berlusconi’s Forza Italia got around 43% of the votes: the terrible consequence of the pandemic, the war and the energy crisis. Situation the major currency  The EURUSD has been shattered this morning. The pair dived to 0.9550. But it’s almost worst across the Channel, if that’s any consolation. Investors really hated the ‘mini budget’ announced in UK last Friday. Investors were expecting to hear about a huge spending package from Liz Truss government, but the package has been even HUGER than the market expectations. UK’s 10-year yield jumped more than 20% since last week, the FTSE dived near 2% and Cable tanked below 1.0350 in Asia this morning. Elsewhere, the US dollar index took a lift, and the dollar index is just crossing above the 114 mark at the time of talking. Stock market Outlook Gold dived to $1626 on the back of soaring US dollar. US crude oil plunged below $80 per barrel. The S&P500 fell to the lowest levels since this summer, whereas the Dow Jones fell below the summer dip. Happily, the European equities are better bid this morning, but investors remain tense and worried. Watch the full episode to find out more! 0:00 Intro 0:24 Italy turns right, euro gets smashed 4:15 UK assets treated like EM after the ‘MINI’ budget 7:45 USD rallies, XAU, oil under pressure 8:49 US stocks dive to, or below summer lows on Fed fear Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Italy #election #Meloni #UK #mini #budget #EUR #GBP #selloff #USD #rally #crude #oil #XAU #BP #APA #XOM #recession #energy #crisis #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

The Down Trend Is Strong In Charge Of Cable Market (GBP/USD)

InstaForex Analysis InstaForex Analysis 26.09.2022 11:39
Technical Market Outlook: The GBP/USD pair had collapsed over 1000 pips over the weekend and a new swing low was made at the level of 1.0352, which is the lowest level since 1985. The market conditions are extremely oversold on the H4,Daily, Weekly and Monthly time frames, so there is a chance for a pull-back soon. Nevertheless, before the pull-back is made, the next target for bears is located at the parity level of 1.0000, so please keep an eye on this level. Local pull-back might test the technical resistance located at the level of 1.0890, but this resistance looks very weak. The next technical resistance is located at 1.1210 and 1.1410 and only a sustained breakout above this level would change the outlook to bullish. Weekly Pivot Points: WR3 - 1.16907 WR2 - 1.11401 WR1 - 1.08850 Weekly Pivot - 1.05895 WS1 - 1.03344 WS2 - 1.00389 WS3 - 0.94883 Trading Outlook: The bears are still in charge of Cable market and the next target for them is the parity level. The level of 1.0351 has not been seen since 1985, so the down trend is strong, however, the market is extremely oversold on longer time frames already. On the other hand, in order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th).   Relevance up to 09:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294175
Steady BoE Rate Expectations Amid Empty Event Calendar in the UK

Podcast: Very Weak Global Sentiment And View Of Gold, Shares And Crude Oil

Saxo Bank Saxo Bank 26.09.2022 11:52
Summary:  Today we look at very weak global sentiment as the US dollar and US treasury yields continue to soar, taking US equities to the key cycle lows as we wonder what shape the capitulation will take - a quick test and reverse or a more profound move driven by poor liquidity? Elsewhere, we note sterling's historic drop and suggest that it is time for the Bank of England to step in with an emergency rate hike - or else. Crude oil, gold, stocks to watch today (including Apple with some concern around iPhone 14 orders) and more are on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean engraver If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-sep-26-2022-26092022
Bitcoin Has Strong Sign That Buyers Are In Control

New Light On The History Of Cryptocurrency, Bitcoin's Downward Trend Without The Possibility Of Indicating The End

InstaForex Analysis InstaForex Analysis 26.09.2022 11:59
Crypto Industry News: Bitcoin.org, the Internet domain associated with Bitcoin, was created on August 18, 2008 as part of the AnonymousSpeech service, which allows users to purchase domain names anonymously. The AnonymousSpeech domain purchase history shows that the day before, on August 17, 2008, someone purchased a Netcoin.org domain. Was it Nakamoto who at the last minute changed the name of his project to Bitcoin? After careful analysis, Or Weinberger confirmed that no content was associated with the Netcoin.org domain. This domain "was later bought back by another person." The decision to stay with Bitcoin may have been critical to BTC's success as many members of the cryptocurrency community now emphasize their aversion to the Netcoin name. This discovery sheds new light on the history of cryptocurrency. If it were true that Bitcoin was originally supposed to be called Netcoin, why did many of the self-proclaimed Nakamoto's never mention it? Isn't this potential evidence that Satoshi Nakamoto's real identity remains unknown? The Netcoin.org domain was later removed and re-registered with the Web.com subsidiary in 2010. Technical Market Outlook: The BTC/USD pair has been seen continuing to trade inside the narrow zone located between the levels of $18,640 - $19,361 for all the weekend long. The nearest technical resistance is seen at the level of $19,347 and $19,679 and only a sustained breakout above this levels would change the outlook to more bullish. The weak and negative momentum on the H4 time frame chart still supports the short-term bearish outlook towards the level of $17,600 again, but any breakout above the local trend line might be considered bullish. Weekly Pivot Points: WR3 - $19,226 WR2 - $18,987 WR1 - $18,829 Weekly Pivot - $18,742 WS1 - $18,587 WS2 - $18,500 WS3 - $18,259 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 09:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/294177
Now you can view Bitcoin and Ethereum (ETH) prices on Twitter

Ethereum Co-Founder Buterin Has Urged Zcash To Switch To PoS

InstaForex Analysis InstaForex Analysis 26.09.2022 12:05
Crypto Industry News: Ethereum co-founder Vitalik Buterin believes other blockchain such as Dogecoin and Zcash should follow the same strategy once the Ethereum fusion has ended. When asked during Messari Mainnet 2022 if all networks should go proof-of-stake (PoS), Buterin said yes. Zooko Wilcox-O'Hearn, founder of Zcash, was also present at the conference. Vitalik said: "I predict that as the proof of stake evolves, its credibility will grow over time." This is not the first time Buterin has urged Zcash to switch to PoS. He suggested the same idea in 2018. Ethereum switched to PoS on September 15, following The Merge update. Buterin said the event went smoothly, even though each test network connection encountered "some form of staircase." Buterin identified scalability as the most important challenge for the next 18 months, adding that the ecosystem must "deliver" this. The merger made it possible to drastically minimize the impact of blockchain on the environment. Dogecoin overtook Bitcoin as the second largest proof-of-work (PoW) cryptocurrency. Technical Market Outlook: The levels of $1,358, $1,407 and $1,424 will now act as the technical resistance for Ethereum bulls as the market is trying to extend the bounce from the extremely oversold conditions on the H4 time frame chart. So far the bulls were able to stay inside the narrow zone located between the levels of $1,281 - $1,358 as the market had been trading inside the zone all the weekend long. Nevertheless, the next target for bears is seen at the level of $1,100, $1,000 and $990. The momentum is neutral-to-negative on the H4 time frame chart, which might indicate the ETH is still in the short-term down trend. Weekly Pivot Points: WR3 - $1,352 WR2 - $1,322 WR1 - $1,302 Weekly Pivot - $1,291 WS1 - $1,271 WS2 - $1,260 WS3 - $1,230 Trading Outlook: The Ethereum market has been seen making lower highs and lower low since the swing high was made in the middle of the August at the level of $2,029. The key technical support for bulls is seen at $1,281 as a part of the demand zone located between the levels of $1,252 - $1,295. If the down move will be extended, then the next target for bears is located at the level of $1,000. Earn on cryptocurrency rate changes with InstaForex Download MetaTrader 4 and open your first trade   Relevance up to 09:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294179
ECB's Knot: July Rate Hike Necessary, Beyond July Uncertain; Canadian CPI Supports Rates on Hold; Global Crypto Market at $1.2 Trillion; Oil Market Tightens with Russian Shipments Drop and China's Support Measures

The Actions Of The Fed And The Bank Of Japan Are Drowning The Japanese Currency (JPY)

InstaForex Analysis InstaForex Analysis 26.09.2022 12:22
The dollar burst on horseback in the new working week, and the USD/JPY pair regained strength. The asset jumped by more than 0.3% at the beginning of Monday and broke through the resistance at 144. The dollar broke loose Recall that last week the dollar-yen pair tickled the nerves of traders more than once, getting into a zone of increased turbulence. First, on the increased monetary divergence between the US and Japan, the asset managed to reach a new 24-year high at 145. And then, as a result of the currency intervention carried out by Japan in support of its national currency, the quote sharply collapsed from this peak by more than 500 points. The intervention of the Japanese authorities helped JPY to complete the last seven days in a slight positive. This was the first weekly growth of the yen in a month. However, as analysts predicted, the effect of unilateral intervention was short-lived. The USD/JPY pair started the new working week with a steady growth. During the Asian session, the Japanese currency fell again against its US counterpart below the 144 mark. The pressure on the JPY was exerted by a large-scale rally of the dollar. On Monday morning, the greenback reached another high against the euro and the pound. Thus, the euro fell against the dollar by 0.4%, to $0.9654, as the Democrats lost to the far-right party in the parliamentary elections in Italy. Such an outcome opens the way to the political restructuring of the EU. Meanwhile, the British pound fell in price against the dollar by 2.8%, to a record low of $1.0555. Fears of an even greater increase in inflation if the government implements a plan to reduce taxes contributed to the pound's fall. At the time of release, the dollar strengthened on almost all fronts, as a result of which the DXY index soared by more than 0.5%, to a new 20-year peak at 114.58. Why is the demand for USD growing? The strong jump in the US currency was caused by an increase in anti-risk sentiment and an increase in the yield of 10-year US Treasury bonds. World stock markets are falling now for two main reasons. The first is another escalation of the conflict between Russia and the West. This time, relations have worsened amid referendums held by the Kremlin in the Luhansk and Donetsk People's Republics, as well as in the Kherson and Zaporozhye regions of Ukraine. Moscow has promised to take these regions under full protection if they become part of Russia. Western politicians regarded this as a direct threat of the use of nuclear weapons. Also, the growth of fears about the global recession contributes to a decrease in risk appetite. The wave of rate hikes observed last week significantly worsened forecasts for global economic growth. As major central banks continue to raise rates, their economies are noticeably weaker. The only exception is the US. Despite the fact that the Fed is at the forefront of tightening monetary policy, the American economy is still firmly on its feet. This is evidenced by the latest US macro data published on Friday. A report from S&P Global showed that in September, the index of business activity in the manufacturing sector of America rose from 51.5 to 51.8, while its counterpart in the service sector recovered from 44.6 to 49.3. Positive statistics helped to strengthen expectations of a more aggressive Fed policy, especially since at the end of the week, officials of the US central bank intensified their hawkish rhetoric. On Friday, Fed Chairman Jerome Powell said that the central bank is determined to continue actively fighting inflation. The comments of Fed Vice Chairman Lael Brainard and Atlanta Fed President Rafael Bostic were in the same spirit. Hawkish speeches by politicians helped to disperse the yield of 10-year US Treasury bonds to 3.74%, which inspired the dollar to a new record. You can't envy the yen The aggressive position of the US central bank in relation to interest rates is what is now drowning the Japanese currency. Despite the recently thrown lifeline in the form of intervention, the yen is increasingly sinking to the bottom and risks approaching the red line again – the 145 mark. An additional ballast that does not allow the JPY to go up is the news about the next dovish actions of the Bank of Japan. On Monday morning, it became known that the BOJ again decided to increase the volume of bond purchases, as the benchmark yield of 10-year Japanese bonds jumped to the upper limit of the acceptable trading range of the central bank. Also, strong pressure on the JPY was exerted by the statement of the former chief currency diplomat of Japan, Naoyuki Shinohara. In an interview with Reuters, the official said that the government is unlikely to go for another large-scale intervention, so as not to draw fire from other G7 participants. – The most that the authorities can do now is to try to smooth out the volatility in the foreign exchange market with small purchases of the yen, but this will clearly not be enough to reverse the downward trend, – he stressed. Nevertheless, traders playing bullish for the USD/JPY pair should be on their guard. Some analysts do not rule out that the Japanese authorities may again intervene, which will cause a short-term rebound of the quote. This is evidenced by today's comments by Japanese Finance Minister Shunichi Suzuki. On Monday morning, the politician issued another warning: "We are deeply concerned about the recent rapid decline of the yen, partly caused by speculative trading, and our position of readiness to respond to such steps as necessary has not changed," he said. The increased risk of intervention may become a minor obstacle for bulls on the dollar-yen pair in the short term. However, most analysts believe that this week the asset will still move mainly in the upward direction. In the coming days, the dollar may receive several more powerful impulses for growth, as a number of speeches by Fed representatives are expected throughout the week. According to experts, American politicians will continue to bend the hawkish line, which will further add fuel to the fire of monetary divergence between the United States and Japan. This will favor the dollar's growth, as a result of which the USD/JPY pair can demonstrate another record.   Relevance up to 09:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/322630
USD Stable as Oil Prices Rebound Ahead of US CPI Report Release

The GBP/USD And The EUR/USD Currency Pairs Are On The Bearish Side

InstaForex Analysis InstaForex Analysis 26.09.2022 12:30
EUR/USD Higher timeframes Last week, the pair left the correction zone and resumed its decline. The benchmarks for a downward trend on higher timeframes can now be 0.9000 (psychological level) and 0.8225 (2000 low). In the event of another slowdown or corrective rise, resistance in the higher timeframes may be provided by the levels of the daily cross, which in the current situation went down to the lines of 0.9800 - 0.9876, as well as the strengthened area of 0.9961 - 1.0000 (weekly short-term trend + psychological level). H4 – H1 By now, bears have tested the second support of the classic pivot points (0.9552). The next reference point for the intraday decline is the third support of the classic pivot points (0.9437). Now the main advantage belongs to the bears. However, in the last few hours on the lower timeframes, the pair is in the zone of a corrective rise. The most significant reference points for the development of an upward correction today are the resistance of key levels—0.9736 (central pivot point) and 0.9877 (weekly long-term trend). The intermediate resistance in this range can be noted at 0.9805 (R1). When testing the indicated levels, an upward correction of the daily timeframe (0.9800 - 0.9876) will also be executed. Therefore, a breakdown of resistance and consolidation above can change the current balance of power not only in the lower timeframes. The overall situation, in this case, would be better assessed once again. *** GBP/USD Higher timeframes The downward trend has been restored and is developing. The next nearest target is the psychological support level of 1.0000. The levels passed earlier today rushed behind the price chart and formed the boundaries of resistance. So, the nearest resistance levels are now the levels of the daily Ichimoku cross (1.0172 - 1.1178), above there is a zone that combines several levels at once, 1.1324 - 1.1429 (weekly levels + broken level of the 2020 low). H4 – H1 The main advantage is on the side of the bears. However, before reaching the final support of the classic pivot points at 1.0262, the decline stopped. The pair is currently in the correction zone on the lower timeframes, which tends to develop. The most important benchmarks of the upward correction today can be noted at 1.0984 (central pivot point) and 1.1232 (weekly long-term trend). The intermediate resistance is at 1.1130 (R1 is the resistance of the classic Pivot levels). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Relevance up to 09:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322636
Declines At The Close Of The New York Stock Exchange, The Drop Leaders Were Nike Inc Shares

Retail Investors Posted The Biggest Losses On European Stock Market

InstaForex Analysis InstaForex Analysis 26.09.2022 12:46
European stock indices hit new yearly lows and the main index of the UK broke through its summer low amid a sell-off triggered by rising recession risks. The Stoxx50 index lost 0.6% in early European trade. Miners and retail investors posted the biggest losses, while tech stocks scored gains. The Stoxx50 index broke through its yearly low. The FTSE 100 index updated its summer low. Today, it bounced slightly off the psychological level of 7,000: Italy's FTSE MIB dropped by 0.1%, following Giorgia Meloni's win of a clear majority in Sunday's Italian election. The European benchmark index plummeted by 21% from its January high amid a collapse in the market triggered by rising recession risks, the energy crisis, and the hawkish stance of the large central banks. Investors are closely monitoring the inflation situation. The European Central Bank is forecast to raise the interest rate by 75 basis points at the next meeting. "In terms of our central bank expectations at this juncture, risks of them over-tightening have significantly increased and that leading to a recession has increased too," Wei Li, global chief investment strategist at BlackRock Inc. said. Relevance up to 10:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322646
Prices Of Gold Rose For The Third Straight Session

The Gold Market Offers Traders Two Options

InstaForex Analysis InstaForex Analysis 26.09.2022 12:52
Two events happened after a rather long sell-off in gold. First is the start of purchases, which may lead to a strong correction in prices. And since previous movements form a three-wave pattern (ABC), where wave A represents bullish pressure, traders can enter the market by buying up to the 50% retracement level, with stop loss at 1631. Exit the market on the breakdown of 1657 and 1688. The second event is the sell stop orders left by market makers, which can be used as basis when entering the market using "Stop Hunting" strategy. In this case, the potential price movement is more than 4,000 pips. The trading ideas are based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 10:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322652
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

The Federal Reserve (Fed) Is Facing The Consequences Of The Rising Inflation

InstaForex Analysis InstaForex Analysis 26.09.2022 14:13
The Federal Reserve is facing one of its most difficult times, which began with the enforced worldwide lockdown that brought the global economy to a standstill. This led to excessive government stimulus. The result: rising inflation and a critical blunder by the Federal Reserve that led the economy into a potential intractable crisis. This was the single but critical fallacy of the Fed that made it impossible for the US economy not to enter a deep recession with high and persistent inflation that would hurt the economy for years to come. The Fed did nothing The Federal Reserve System has for many years maintained the view that inflation is transitory. On the assumption that rising inflation was a temporary scenario that would naturally work out over time, the Fed did nothing. By not raising interest rates a few years ago when inflation began to rise, they sealed the fate of creating the economic scenario that was currently in place. This inaction put the Fed in a position where it was too late to act. Because the Federal Reserve did not respond in a timely manner, it lost the ability to effectively stem the rise in inflation. There has never been a case in history when the Federal Reserve effectively reduced inflation without raising interest rates. Forced lockdowns and the 2020 recession resulted in an average inflationary pressure of 1.2%. In 2021, inflation was 1.4% in January, and was already 2.6% in March. If the Federal Reserve were to step in and start raising rates rather than keeping inflation going, it could have dramatic consequences. Instead, the Federal Reserve did nothing. If they had acted at this point and started slowly raising interest rates that were artificially set low between 0 and a%, they would have made a huge impact by simply bringing interest rates up to 2%. The Fed will need to raise rates In April 2021, inflation was 4.2%, and the Federal Reserve continued to do nothing and artificially lower interest rates. By May 2021, inflation rose to 5%, and to 5.4% in June, and the Fed still did nothing. In fact, inflation rose to 6.2% in October, 6.8% in November and 7% in December, while the Federal Reserve still did nothing and kept interest rates artificially low. By the time the Federal Reserve initiated its first interest rate hike in March 2022, inflation was already at 8%. For now, the Fed will need to raise rates to at least 8% to have any sustained impact on lowering inflation. It is clear that the signs of rising inflation that took place in 2021 showed a clear and systemic increase by the first quarter, when the Fed should have acted, but did not. It was its basic misconception that inflation was transient that led to the inactivity of the Federal Reserve before it was too late. The consequences of the inaction Now the Federal Reserve is trying to reduce inflation by raising interest rates that cannot be sustained for a long time. With the national debt well above 120% of GDP, if interest rates were raised from 3% to 8% today, it would add $1.5 trillion a year to service the national debt. Clearly, the Federal Reserve has backed itself into a corner, and because of a critical mistake that forced them to do nothing when they could have had a strong and immediate impact on inflation, instead they sat on the sidelines and watched interest rates spiral out of control. In the coming years, the consequences of the inaction of the Federal Reserve System will certainly take place in the form of a deep and prolonged recession and high inflation, which at best will remain at a level of just above 4%.   Relevance up to 11:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322656
Bank of England survey highlights easing price pressures

The Collapse Of The Pound (GBP) And Lack Of Market Confidence In The New UK Government

InstaForex Analysis InstaForex Analysis 26.09.2022 14:20
Pound has already lost nearly 400 pips on Friday, then this morning sank further by 5%. The reason was the new Chancellor of the Exchequer Kwasi Kwarteng's vow to continue cutting taxes, which raised fears of another sharp increase in inflation and public debt. The decline was the biggest intraday drop since March 2020, when investors panicked over the emerging Covid-19 pandemic. A number of economists have urged the Bank of England to take actions, but this will only exacerbate the fears in global financial markets and put the administration of Liz Truss at risk as the UK continues to grapple with the cost-of-living crisis. Nevertheless, the collapse of the pound indicates that markets do not trust the new UK government, especially since the national currency is rapidly moving towards parity and there is a huge chance that the situation will only worsen further. Kwarteng laid out the UK's most drastic tax relief package since 1972 yesterday, cutting fees on both workers' and companies' wages in an effort to boost the long-term potential of the economy. He also lowered stamp duty on property purchases, lifted a cap on bank bonuses and reaffirmed support for households and businesses on rising electricity bills over the next six months. Although pound bounced up earlier, traders are set to further decline as the options market is currently showing a 60% chance of it weakening to parity against dollar this year. A massive sell-off is sure to force the Bank of England to act more aggressively, and if the situation continues to go downhill, there will be an extraordinary increase in interest rates between meetings. Pound has so far collapsed to an unprecedented level - 1.0360, which creates quite a few problems. A correction will occur only when buyers become more active this week. It will surely open a direct path to the highs of 1.0700, 1.0760 and even 1.0805. But if pressure continues, GBP/USD will fall to 1.0500 and 1.0430. In terms of EUR/USD, a lot depends on 0.9605 because a drop below it will push quotes lower to 0.9560, 0.9510 and 0.9455. Price will increase only when buyers manage to bring the pair to 0.9710, then push it to 0.9770, 0.9810 and 0.9860.   Relevance up to 09:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322632
The Grains Sector Saw Continued Demand| Acceleration In The Sale Of Gold

The Grains Sector Saw Continued Demand| Acceleration In The Sale Of Gold

Saxo Bank Saxo Bank 26.09.2022 14:41
Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to Tuesday, September 20, a week leading up to the FOMC meeting, Bank of Japan intervention, a Sterling crisis and the dollar surging to levels not seen in decades. Ahead of these events speculators chose to cut their dollar long by one-third, increasing their gold short to a four year high while adding exposure in grains and crude oil Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to Tuesday, September 20. A week that saw financial market adjust positions ahead of the FOMC meeting on September 21. In anticipation of another 75 basis point rate hike, the market sold stocks, bonds and commodities while the dollar was bought. As it turned out, the FOMC was the starting shot to a very volatile end of week that saw heightened recession worries, Bank of Japan intervention to support the yen for the first time in 24 years, and an unfolding crisis in the UK sending the Sterling towards an all-time low.   Commodities The Bloomberg Commodity Index dropped 2.3% during the week to last Tuesday with losses seen across most sectors, the exception being grains and livestock. Selling was particularly felt across the energy sector and in precious metals. Money managers responded to these heightened growth and strong dollar concerns by cutting length in energy and softs while adding to already short positions in precious metals. The only sector continuing to see demand were grains where the speculators have now been net buyers in all but one of the last eight reporting weeks. Energy Money managers raised their combined crude oil net long to a seven-week high despite the recessionary clouds growing ever darker and the dollar continued to strengthen. During the reporting week when oil dropped around 3% the total net long in WTI and Brent was raised by 13.5k contracts to 355k lots. The ICE gas long meanwhile slumped by 30% to a 22-month low while in New York the ULSD (diesel) length was cut by 17% to 15.7k contracts. Despite falling by around 7% only small changes were seen in natural gas. Metals Gold selling accelerated last week with the net short jumping by 225% to 33k contracts to near a four-year low. This the culmination of six consecutive weeks of selling driven by a stronger dollar and rising Treasury yields as well a firm belief the FOMC will successfully manage to bring inflation under control next year. Silver saw no major net change with reductions in both long and short positions offsetting each other. The copper net short was unchanged at 4k contacts, the weakest belief in lower prices since June while platinum’s 3.5% rally supported an 82% reduction in the net short to just 2k contracts, again weakest short bet since June. Agriculture The grains sector saw continued demand with speculators having been net buyers in all but one of the past eight weeks. The increase last week was led by a 16% increase in the soymeal long to 102k contracts, a seasonal high while corn buying extended to an eight week. The wheat market which found support from renewed threats to the Ukraine grain corridor saw net buying of both Chicago and Kansas wheat. Overall however the net exposure remains close to zero with a 16k contracts CBT net short partly offsetting a 19k contracts long in KCB wheat. Renewed selling of sugar cut the net long by 72% to 8.6k contracts, the cocoa net short extended to a fresh 3-1/2 year high while long liquidation continued in both coffee and cotton.   Forex Ahead of the post-FOMC dollar surge to a fresh multi-year high against several major currencies, and the first intervention from the Bank of Japan to support the yen in 24 years, speculators had reduced bullish dollar bets by 35% to $13.9 billion, a six month low. The bulk of the change was driven by the biggest amount of short covering in the euro since March 2020, a change that flipped the position back to a long of 33k lots or €4.2 billion equivalent, up from a €6 billion short three weeks ago.The net short in sterling was reduced by 13k lots to 55k lots just days before tumbling to a 37-year low following the announcement of a historic debt financed tax cuts. The yen meanwhile saw no major changes ahead of Thursday’s USDJPY surge and subsequent    What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming   Source: https://www.home.saxo/content/articles/commodities/cot-specs-sold-dollar-and-gold-ahead-of-fomc-26092022
British Pound (GBP) Touched The Below-1.05 Levels!

British Pound (GBP) Touched The Below-1.05 Levels!

Conotoxia Comments Conotoxia Comments 26.09.2022 15:10
Probably the events of Friday 23.09.2022 and Monday 26.09 will go down in history. History that is unfortunately not glorious for the UK and the British pound Tonight, the British currency against the U.S. dollar (GBP/USD) was the cheapest on record, falling below the 1.0500 level. Read next: The Statement By Elon Musk About Starlink May Cause Confusion | Leaders Must Take Action To Protect The Environment | FXMAG.COM The consequence of UK tax changes against the British pound Proposals for tax changes in the UK, which are expected to introduce the most significant fiscal stimulus package since 1972, emerged on Friday. As Bloomberg reported, sterling fell as much as 4.7 percent tonight and hit a record low against the dollar, after Kwasi Kwarteng signaled that more tax cuts are coming. Britain's Chancellor of the Exchequer told the BBC on Sunday: "There are more tax cuts on the horizon. I want to see over the next year that people keep more of their income because I believe it is the British people who will drive this economy." Source: Conotoxia MT5, GBPUSD, MN Is this why the pound is losing on tax cuts? First, the UK economy has been hit by high inflation, which the Bank of England believes could remain above 10% for several more months. Second, the Bank of England is planning or already planned to sell bonds on the market to draw down money, thus further tightening monetary policy, in order to fight inflation. Third, cutting taxes reduces revenue to the budget, which could usually be replenished by selling bonds to investors. Fourth, less taxes could mean more money in the pockets of Britons in an era of rampant inflation. In summary, the current measures could lead to a huge supply of debt (the higher the supply, the usually lower the price, the higher the interest rate on bonds), higher costs of servicing it and a harder fight against inflation. This, in turn, could force the Bank of England to make further increases, and these could push the economy into recession. All of this could reflect a loss of foreign investor confidence in the UK government, with politicians working against the Bank of England. As of today, the market is pricing in the possibility of a 150bp interest rate hike in two months, while in a year the main interest rate could rise as high as 6 percent. Now not just to fight inflation, but to encourage investors. With such action, it is not difficult for the situation to get out of hand and lead to a kind of spiral that is difficult to stop. Nevertheless, the political actions of the British authorities may lead to such a spiral at this point. According to the market, the chances of GBP parity against the USD later this year are growing. Did you know that CFDs allow you to trade on both falling and rising prices? Derivatives allow you to open buy and sell positions, and thus invest with both rising and falling quotes. At Conotoxia, you can choose from CFDs on more than 100 currency pairs.For example, if you Want to find a CFD on GBP/USD, you just need to follow 4 simple steps: To access Trading Universe - a state-of-the-art center for financial, information, investment and social products and services through a single Smart account, register here. Click "Platforms" in the "Invest&Forex" section. Choose one of the accounts: demo or live On the MT5 or cTrader platform, search for the CFD currency pair you are looking for and drag it to the chart window. Use the one-click trading option or open a new order with the right mouse button. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. Read article on Conotoxia
The South America Are Looking For Alternatives To The US Currency

Could US Dollar Index (DXY) Decrease Below 107.40?

InstaForex Analysis InstaForex Analysis 26.09.2022 15:23
  US Dollar Index Chart - Where Is The Support? The US dollar index rose to fresh highs at about 114.35 during the early trading hours on Monday before finding resistance and reversing sharply lower. The index is seen to be trading close to 113.00 at this point in writing. It is expected to continue drifting lower towards 110.17 going forward. The bulls might have carved a potential top around 114.36 as the bears are getting ready to break below 112.85 now. Read next: The Statement By Elon Musk About Starlink May Cause Confusion | Leaders Must Take Action To Protect The Environment | FXMAG.COM The 1-hour chart presented here is indicating initial support at 110.17, followed by 109.00 and 107.40 levels. Potential resistance stays at 114.35 respectively. A break below 110.17 will confirm with respect to the price action that a top is in place and the bears are back in control. It is not shown here but a Doji/Pinbar candlestick pattern is being carved on the daily chart. DXY - What Can We Expect From The USD Index In The Near Future? The US dollar index might be setting up for a larger-degree corrective drop towards 107.40 and further in the coming weeks. We need to see a bearish candle formation on the daily chart to confirm the same. While it is early to confirm a bearish resumption, a high probability remains for a meaningful top to be in place at 114.35 so that the bears are back in control soon. Trading idea: Preparing for a potential drop against 114.35 soon. Good luck! Relevance up to 15:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294251
Bank of England Faces Rate Decision: Uncertainty Surrounds Magnitude of Hike

Under What Circumstances Could US Dollar (USD) Decrease?

InstaForex Analysis InstaForex Analysis 26.09.2022 16:03
The dollar is so scary that its opponents don't even think about how to stop it. They just ran from the battlefield. The yen was not helped by the first currency interventions since 1998, the pound by fiscal incentives from the new British government, and the euro by the confident victory of the alliance led by Georgia Meloni in the snap elections in Italy. According to RAI forecasts, she won 43% of the popular vote, which implies 114 Senate seats. The majority required 104. A strong Cabinet of Ministers is good news for EURUSD, as political risks are reduced. However, this does not save the main currency pair. Neither the expectations of the acceleration of European inflation from 9.1% to 9.6% in September nor the "hawkish" rhetoric of the members of the Governing Council helped the euro. According to the head of the Bank of Lithuania, Gediminas Simkus, the minimum size of the deposit rate increase in October is 50 bps. His colleague from Latvia, Martins Kazaks, is ready to vote for +75 bps. The rally in gas futures and the cancellation of measures to mitigate the impact of high prices in Germany can push the eurozone CPI to a new record peak.     The dynamics of European inflation However, no matter how much good news there is for the euro, it cannot resist the US dollar. For the USD index to begin to decline, two conditions are required: an improvement in global risk appetite; and, secondly, the global economy being ahead of the American economy in terms of growth rates. Neither one nor the other is currently unrealistic. The Fed is the pack's leader, and all the other central banks are moving after it. And judging by the massive tightening of monetary policy, they took to heart Jerome Powell's statement about his willingness to sacrifice the economy to defeat inflation. Thus, the United States exports to the rest of the world at high prices and as a cure for them in the form of aggressive monetary restrictions. And this does nothing good for competitors. Their economies are slowing down, and stock indexes worldwide are falling, and so is global risk appetite. As a result, the demand for the US dollar as a safe-haven asset is growing.     The divergence in US economic growth with the rest of the world is also expanding because the United States is a net energy exporter, they sell LNG, and the energy crisis has affected them to a lesser extent than the eurozone, Britain, and Japan. The state of the current accounts of these countries is rapidly deteriorating, which has led the euro to a 20–year bottom against the dollar, the yen to a 24–year low, and the pound to a record low. It is unlikely that the situation will change in the near future. Especially considering the onset of cold weather in the Old World ahead of time. They will push gas prices up and the EURUSD – down, in the direction of 0.9. Technically, the formation of Wolf Waves has been completed on the monthly EURUSD chart. A necessary condition for a reversal of the downtrend requires the pair to return above the lower limit of the fair value of 1.018-1.14, which so far looks unlikely. We continue to sell euros with targets of 0.945-0.95 and 0.915.   Relevance up to 14:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322686
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

Wow! US Dollar (USD) Is Close To Break Records, GBP/USD May Change If Bank Of England Or Fed Surprise

InstaForex Analysis InstaForex Analysis 26.09.2022 16:18
More recently, market participants discussed the probability and timing of achieving euro parity with the dollar, and the same conversations are already underway around the pound. It is rapidly weakening, including mainly paired with the dollar. After a strong fall last Friday, the pound also fell sharply during the Asian trading session today, and the GBP/USD pair fell to 1.0353, a new local and record low for more than 37 years. As British Chancellor of the Exchequer Kwasi Kwarteng said last Friday, "We (the government) need a new approach for a new era, focused on growth. Our goal in the medium term is to achieve a trend growth rate of 2.5%." To this end, among other measures to stabilize the economic situation, taxes and duties will be significantly reduced, and one of the sources of budget replenishment in the UK government was the reduction in unemployment benefits (note that this measure in itself is a factor reducing inflation). Also, on Friday, disappointing UK macro data were released. Private sector business activity continued to decline, with the preliminary composite PMI slipping to 48.4 in September from 49.6 in August, below the expected 49.0. In addition, a recent survey by the Confederation of British Industry showed that retail sales fell to -20 in September from +37 in August, another negative factor for the pound.     Meanwhile, the strengthening of the dollar continues to gain momentum. Its DXY index broke another "round" resistance level of 114.00 on Monday, reaching a new local high since April 2002 at around 114.41. The dollar's upside momentum continues, pushing the DXY to new highs on its way to over 20-year highs near 120.00, 121.00. No important publications (macro statistics) are planned today. But, perhaps, it is worth paying attention to the speeches of the representatives of the Fed (at 14:00 GMT) and the Bank of England (at 16:00 GMT). If they make unexpected announcements, then the volatility in the GBP/USD pair will increase again.     The GBP/USD pair is attempting a correction after the strongest drop (by 900 points) during today's Asian session and Friday's trade. As of writing, it is trading near the 1.0700 mark. Strong bearish momentum continues to weigh on the pair. So far, it makes no sense to talk about its purchases, at least not before a confident breakdown into the zone above the resistance level of 1.1248. Relevance up to 12:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322674
John Hardy to FXMAG: The UK economy faces significant head-winds from supply side limitations

Could British Pound (GBP) Be Supported With Forex Intervention?

Alex Kuptsikevich Alex Kuptsikevich 26.09.2022 16:20
Last week, we said that there has not yet been a final capitulation in many markets. However, we have seen such a capitulation in the pound, which is often followed by global market reversals. We could see both the interest of long-term investors and the activation of speculators with the bet that such volatility will encourage politicians to take action. GBPUSD was down to 1.0330 at the start of trading on Monday, although it started Friday’s trading near 1.1250, losing more than 8%. Investors were disappointed by both the Bank of England’s measured pace of rate hikes and the government’s budget initiatives announced on Friday. As GBPUSD had already been rewriting lows since 1985, the week before, the markets quickly approached the point of a massive and poorly controlled liquidation of positions on the pound, and the reduced liquidity in trading in Asia further amplified this. As high market volatility could further damage the economy, such currency fluctuations generate enough attention for politicians to awaken to their actions. Debt markets are now pricing in an unscheduled rate hike by the Bank of England, although the previous one was as recently as Thursday. Locally, the pound has a supporting hand from market pricing that BoE will raise Bank Rate 6% in this cycle. This is higher than in the US, and these hopes seem to fuel local buying by long-term investors. It will take broad and proactive steps by politicians, both the Bank of England and the government, to convince markets of a trend reversal. These steps are vital, not just desirable: a weaker pound is no longer working to improve export competitiveness but is making imports more expensive and undermining financial stability. In 1985, the so-called Plaza Accord – an agreement on coordinated currency interventions by the world’s major central banks to weaken the dollar – stopped excessive dollar strengthening. For now, however, it is in the interest of the US to continue to allow the dollar to rise, to knock down the country’s inflation and commodities prices. Therefore, in our view, at this stage, we should expect the use of market-to-market currency interventions. Britain could follow Japan’s example by supporting the pound with direct purchases.
Forex: What to expect from British pound against US dollar - January 17th

Oh My! It's Definitely A Lot To Watch When It Comes To British Pound (GBP)

Craig Erlam Craig Erlam 26.09.2022 23:12
Concerns building Economic fears are sweeping through the markets once again this morning, with the UK taking a particular drubbing as the pound hit a record low against the dollar. Friday’s mini-budget has gone down like a lead balloon, much like the pound again this morning, and serious questions are already being asked about the economic competency of the new government. So much so that markets are factoring in a strong chance of a substantial emergency rate hike from the BoE in order to shore up the currency and confidence in the markets, perhaps even today. Desperate times call for desperate measures but when the wound is so self-inflicted and terms such as “behaving like an emerging market currency” are being thrown around, I’m not sure we should be hoping the central bank will fix everything. A policy u-turn could be more effective in stabilising the currency, even reversing a large portion of the losses, but the political damage is done and I’m not convinced the government will do it, regardless. The backlash may be far more fierce than they were expecting but I think they may choose to stand by their gamble. Italy outperforms after far-right election victory The one stock index in the green in Europe today is the FTSE MIB. This comes after the far right secured a majority victory in the election on Sunday which could deliver some political stability in a country that so often lacks it. Time will tell whether the parties can actually deliver on the economy in a way that many before them have failed to do but we’re certainly seeing some short-term relief in the markets. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Sterling hits record low - MarketPulseMarketPulse
Shell's H1 2023 Performance and CEO's Bold Stance on Renewable Energy

The Australian Dollar To US Dollar (AUD/USD)Pair: The Price Is In A Neutral And The Market Is Ready To Cool Down

InstaForex Analysis InstaForex Analysis 27.09.2022 08:00
Yesterday, the aussie fell by 73 points. With the lower shadow, the price almost touched the embedded line of the descending price channel, a corrective rebound took place from it. The signal line of the Marlin Oscillator has worked out the lower limit of its own channel and also turned into a correction. The resistance is the target level of 0.6515. Correction, upon the reversal of the oscillator, can be stretched over time, for several days. Upon completion of the local growth, we expect a continuation of the decline to the lower levels of the price channel: 0.6400, 0.6350. The Marlin Oscillator went either into a reversal or into a consolidation on the four-hour chart. The price is also in a neutral state between the levels of 0.6439 and 0.6515. It's time for the market to cool down after the hyped events yesterday and Friday.     Relevance up to 04:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322724
The EUR/USD Price May Fall Under 1.0660

Will The Price Of The Euro-Dollar Pair (EUR/USD) Complete The Correction?

InstaForex Analysis InstaForex Analysis 27.09.2022 08:05
The euro fell by 80 points on Monday. The lower shadow of the daily candle slightly fell short of the target level of 0.9520. We are waiting for a second attack on this support, but first the price must complete the correction - it hesitated at the level of 0.9625. There are two possible correction options: working off 0.9695 and then moving to 0.9520, overcoming the level, and resuming the decline from the current levels, that is, from 0.9625. The signal line of the Marlin Oscillator is turning up, which means that the price is delayed at this level (0.9625) in time (if there is no continuation of growth). The H4 chart shows that the resistance level of 0.9695 was worked out yesterday, this circumstance increases the likelihood of a decline from the current levels, but if there is a length of correction in time, the formation of consolidation, then the price may have an opportunity to re-work out the upper resistance. The Marlin Oscillator is rising and is also helping the price.   Relevance up to 04:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322728
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

The Pound To US Dollar (GBP/USD) Pair: Waiting For A New Wave Of Decline

InstaForex Analysis InstaForex Analysis 27.09.2022 08:02
Yesterday, the pound fell on Friday's example, but this time, after a decline of 487 points, there was a strong rebound of 570 points. The day was still closed with a black candle. The lower shadow still did not reach the target level of 1.0310. Now there is a consolidation under the level of 1.0830. Upon completion of the consolidation, we are waiting for a new wave of decline to 1.0310. Intermediate level of 1.0535. On the four-hour chart, the price reverses before the resistance level of 1.0830, and the Marlin Oscillator also reverses. If the price does not change its mind and decreases from the current levels (without re-working out 1.0830), then we are waiting for it at the first target of 1.0535.       Relevance up to 04:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322726
US Nonfarm Payrolls Disappoint: Impact on Dollar and EUR/USD Analysis

Many Of Big Losers On The Close Of The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 27.09.2022 08:10
At the close in the New York Stock Exchange, the Dow Jones fell 1.11% to hit a 52-week low, the S&P 500 fell 1.03%, and the NASDAQ Composite fell 0.60%. Walmart Inc was the top gainer among the components of the Dow Jones index today, up 1.25 points (0.96%) to close at 131.31. Apple Inc rose 0.34 points (0.23%) to close at 150.77. Procter & Gamble Company rose 0.13 points or 0.10% to close at 135.71. The biggest losers were The Travelers Companies Inc, which shed 4.88 points or 3.14% to end the session at 150.60. Boeing Co was up 2.99% or 3.92 points to close at 127.34, while Chevron Corp was down 2.63% or 3.81 points to close at 140.96. . Leading gainers among the components of the S&P 500 in today's trading were Wynn Resorts Limited, which rose 11.99% to 66.80, Las Vegas Sands Corp, which gained 11.81% to close at 39.66. as well as Costco Wholesale Corp, which rose 2.98% to end the session at 480.30. The losers were DISH Network Corporation, which shed 6.12% to close at 14.27. Shares of The AES Corporation shed 5.48% to end the session at 22.96. Quotes of Halliburton Company decreased in price by 5.17% to 23.31. Leading gainers among the components of the NASDAQ Composite in today's trading were LAVA Therapeutics NV, which rose 97.50% to 4.74, DIRTT Environmental Solutions Ltd, which gained 42.87% to close at 0.45. as well as shares of Panbela Therapeutics Inc, which rose 25.96% to close the session at 0.34. The biggest losers were Powerbridge Technologies Co Ltd, which shed 68.57% to close at 0.50. Shares of Scienjoy Holding Corp lost 43.77% to end the session at 1.67. Quotes of Snow Lake Resources Ltd fell in price by 40.88% to 1.88. On the New York Stock Exchange, the number of securities that fell in price (2652) exceeded the number of those that closed in positive territory (536), while quotes of 132 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,592 stocks fell, 1,248 rose, and 275 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 7.82% to 32.26, hitting a new 3-month high. Gold futures for December delivery lost 1.56%, or 25.90, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 2.82%, or 2.22, to $76.52 a barrel. Futures for Brent crude for December delivery fell 2.81%, or 2.39, to $82.64 a barrel. Meanwhile, in the Forex market, EUR/USD fell 0.84% to hit 0.96, while USD/JPY edged up 0.94% to hit 144.66. Futures on the USD index rose by 0.98% to 114.07.   Relevance up to 05:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/294320
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

Perspective Of The Euro To US Dollar (EUR/USD) Currency Pair

InstaForex Analysis InstaForex Analysis 27.09.2022 08:17
EUR/USD 5M The euro/dollar immediately fell by 150 points on Monday. This was followed by recovery, corrections, which, however, were purely corrective in nature, that is, the current downward trend is not broken. The most important fact is this: despite the strongest fall in the euro in recent weeks, there is still no feeling that the downward trend is over, or even close to being over. The price even bounced up by one and a half hundred points on Monday, but then it resumed its downward movement anyway. Moreover, on Monday, except for the speech of European Central Bank President Christine Lagarde, there was absolutely nothing to highlight. In our fundamental articles, we have already analyzed why the elections in Italy are not related to the euro's collapse. Yes, and Lagarde herself spoke much later than the euro's overnight collapse and the subsequent rapid recovery. Thus, we believe that the market is simply fleeing in a panic from risky assets, and not from all of them, since bitcoin practically does not move. Not a single trading signal was formed on Monday, because the pair has not been at current price levels for more than 20 years. One new level has appeared - 0.9553 - and today signals can be formed around it, but we urge you to be careful with opening any positions, as the market is now clearly in a state of panic. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial traders, but at the same time, the euro fell steadily. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not provide any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 27. The euro continues to fall by inertia. The results of the elections in Italy have nothing to do with it. Overview of the GBP/USD pair. September 27. The pound finally has a real chance of completing a long downtrend. Forecast and trading signals for GBP/USD on September 27. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The bears' prospects remain just fine on the hourly timeframe, given that now no one is even thinking about buying the euro. To say that a new collapse of the euro was provoked by some one specific event simply does not make sense. From our point of view, the market is in a panic, and it is hardly possible to say how long it will persist and how it will end. We highlight the following levels for trading on Tuesday - 0.9553, 0.9813, 0.9877, 0.9945, 1.0019, as well as Senkou Span B (1.0002) and Kijun-sen (0.9786). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. Another speech by Lagarde will take place in the European Union on September 27, which is unlikely to affect anything, and a report on orders for durable goods will be published in the US, which is also unlikely to affect anything. The market may remain in a state of shock for several more days. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322716
Metals Update: Gold Demand Declines Marginally, Copper and Aluminium Positions Adjusted

The Pound To US Dollar (GBP/USD) Pair Continues Its Downward Trend

InstaForex Analysis InstaForex Analysis 27.09.2022 08:46
GBP/USD 5M The GBP/USD currency pair showed a volatility of almost 600 points on Monday. During the day, the pair managed to cover such a distance both up and down. Thus, there was no talk of any adequate movement on Monday. In our fundamental articles, we tried to figure out what exactly provoked such a strong movement, and came to the conclusion that the panic in the market, which was caused by a combination of factors, played the greatest role. Thus, a similar market sentiment may remain this week. The price continues to settle below the trend line, which now lies at a fairly long distance from it. Therefore, in the near future we should hardly expect a consolidation above it. Otherwise, we will not understand that the downward trend is over (according to the current trading system). Individual macroeconomic and fundamental events may not matter to traders this week. Despite the fact that the volatility went off scale, and there were no levels at the current price levels, one trading signal was still formed. At the beginning of the US session, the price rebounded from the critical line, which was a sell signal. Traders could open short positions. Since there was not a single level or line below, the position had to be closed manually in the late afternoon. Profit on it amounted to about 185 points. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group closed 11,600 long positions and opened 6,000 short positions. Thus, the net position of non-commercial traders decreased by another 17,600, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new decline, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its decline has completely resumed and multi-year lows are updated almost every day, so the bearish mood of major players can only intensify in the near future. The non-commercial group now has a total of 109,000 shorts and 41,000 longs open. The difference is again almost threefold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, one should not forget about the high demand for the US dollar, which also plays a role in the fall of the pound/dollar pair. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 27. The euro continues to fall by inertia. The results of the elections in Italy have nothing to do with it. Overview of the GBP/USD pair. September 27. The pound finally has a real chance of completing a long downtrend. Forecast and trading signals for EUR/USD on September 27. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair continues its downward trend on the hourly timeframe, which is already in fact a collapse. What else do we call an 800-point move in two days? In the coming days, the pair can fly from side to side for mind-boggling distances, and the fundamentals and macroeconomics are unlikely to have any significance for the market. We highlight the following important levels on September 27: 1.0357, 1.0930, 1.1212, 1.1354, 1.1442. Senkou Span B (1.1475) and Kijun-sen (1.0909) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. No major events scheduled in the UK on Tuesday, and we will only receive an ordinary report on orders for durable goods in America. It is unlikely that with the volatility of 600 points a day earlier, this report will have at least some impact on the pair's movement. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322718
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

In The Long Term The S&P 500 Will Have The Option To Buy

InstaForex Analysis InstaForex Analysis 27.09.2022 08:50
A strong decline in the S&P 500 and a strong spike in the VIX index will provide a very good buying opportunity for the long term. Relevance up to 07:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294330
PLN Soars to Record Highs Ahead of NBP Decision

The EUR/USD Pair: A High Probability Remains For A Bullish Reversal

InstaForex Analysis InstaForex Analysis 27.09.2022 08:55
Technical outlook: EURUSD dropped below the 0.9600 handle during the New York session on Monday before finding support around 0.9580. The single currency pair has bounced back and is seen to be trading close to 0.9640 at this time of writing. We cannot rule out the possibility of yet another low below 0.9552 but the probability remains for the bulls to take control soon. EURUSD seems to have carved a meaningful low at 0.9552 on Monday and a break above 1.0200 in the near term will confirm it. Please note that 1.0200 is initial resistance and that the bulls are eyeing that mark in the next few trading sessions. The much-awaited counter-trend rally is expected to gather pace thereafter and push the price through 1.0600 in the next several weeks. A major Fibonacci extension has been hit around 0.9698 as projected on the daily chart here. A high probability remains for a bullish reversal from current levels. The bottom line remains for the bulls to hold prices above 0.9552 interim support/low to keep the near-term structure valid. We should watch for a potential Engulfing Bullish reversal pattern on the daily chart for further confirmation. Trading plan: Preparing for a bullish reversal against 0.9500 Good luck!   Relevance up to 07:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294332
Ethereum Prices Should Hold Above Interim Support To Keep The Bullish Structure Intact

Ethereum Prices Should Hold Above Interim Support To Keep The Bullish Structure Intact

InstaForex Analysis InstaForex Analysis 27.09.2022 09:02
Technical outlook: Ethereum climbed through $1,380-90 during the Asian session on Tuesday after reversing from $1,280-85 over the weekend. The crypto is seen to be trading close to $1,385 at this point in writing and is heading towards $1,450 and $1,550-70 in the near term. Ideally, prices should hold above the $1,270-80 interim support to keep the bullish structure intact. Ethereum had earlier dropped from the $2,031 highs through $1,220, carving a meaningful downswing. Please note that the drop was in three waves and hence corrective in nature. Furthermore, prices found support through the past resistance-turned-support zone and the Fibonacci 0.618 retracement of the entire rally between $800 and $2,031. A high probability remains for a push above $2,031 in the next several weeks. Initial resistance is seen through $1,790-1800 and a break higher will confirm a further upside. A minor rally is expected to reach up to the $1,550-80 zone, which is the Fibonacci 0.618 retracement of the recent downswing between $1,790 and $1,220. Trading plan: Potential rally through $1,790-1,800 against $900 Good luck!   Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294334
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

The Bears Are Still In Charge Of Cable Market (The Pound To US Dollar)

InstaForex Analysis InstaForex Analysis 27.09.2022 09:10
Technical Market Outlook: The GBP/USD pair had collapsed towards the new swing low at the level of 1.0352, which is the lowest level since 1985. The market conditions are extremely oversold on the H4,Daily, Weekly and Monthly time frames, so the bulls are trying to extend the bounce to over 500 pips. Local pull-back had tested the technical resistance located at the level of 1.0890, but this resistance looks very weak, so the Bearish Engulfing candlestick pattern was made at the level of 1.0929. The next technical resistance is located at 1.1210 and 1.1410 and only a sustained breakout above this level would change the outlook to bullish. On the other hand, the next target for bears is located at the parity level of 1.0000, so please keep an eye on this level. Weekly Pivot Points: WR3 - 1.16907 WR2 - 1.11401 WR1 - 1.08850 Weekly Pivot - 1.05895 WS1 - 1.03344 WS2 - 1.00389 WS3 - 0.94883 Trading Outlook: The bears are still in charge of Cable market and the next target for them is the parity level. The level of 1.0351 has not been seen since 1985, so the down trend is strong, however, the market is extremely oversold on longer time frames already. On the other hand, in order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th).   Relevance up to 08:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294350
Changing correlation of Bitcoin and US stocks. Brazil: Lower house of Congress approved crypto regulation bill

An Arrest Warrant For The CEO Of Terraform Labs| Bitcoin Keeps Its Trend

InstaForex Analysis InstaForex Analysis 27.09.2022 09:13
Crypto Industry News: Despite the fact that the founder of Terraform Labs claims that he is open to cooperation with legal authorities, the South Korean authorities found him elusive, and as a result, in cooperation with Interpol, countries cooperating with the institution were called to detain him. As a result of Singapore authorities' inability to capture Do Kwon, where he is officially arriving, Interpol issued a red note signaling that the charges against him were serious enough to deserve international standing. The red note does not in itself constitute an arrest warrant, as it is a request to the countries cooperating with Interpol to track down and temporarily detain a given person on behalf of the country where the refugee is being sought. Currently, the red note does not appear on the official Interpol website yet. However, according to Bloomberg, authorities in Seoul have confirmed that such a request has been made in the case of Do Kwon. South Korean authorities issued an arrest warrant for the CEO of Terraform Labs two weeks ago, citing violations of local capital laws. At the time, Kwon was believed to be at his home in Singapore. Later, this information was denied by law enforcement, which determined on September 17 that he was not there. Technical Market Outlook: The BTC/USD pair had broken out from the narrow zone located between the levels of $18,640 - $19,361 and made a local high at the level of $20,333 (at the time of writing the article). The nearest technical resistance is seen at the level of $20,473 and $20,580 and only a sustained breakout above this levels would change the outlook to more bullish. The market conditions on the H4 time frame are now extremely overbought, so please keep an eye on the supply zone located at $20,473 and $20,580 for abnormal bearish activity. The nearest technical support is seen at $19,815. Weekly Pivot Points: WR3 - $19,226 WR2 - $18,987 WR1 - $18,829 Weekly Pivot - $18,742 WS1 - $18,587 WS2 - $18,500 WS3 - $18,259 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout.
Ethereum Could Drop Deeper As The Bias Remains Bearish

The Emergence Of Virtual Australian Currency|Situation On The Ethereum Market

InstaForex Analysis InstaForex Analysis 27.09.2022 09:19
Crypto Industry News: The Reserve Bank of Australia started cooperation with the Digital Finance Cooperative Research Center and presented the technical details of the CBDC to be launched on the market. We learned that the work on the pilot version of the digital currency of the country's central bank will be completed by mid-2023. According to a recent announcement, the RBA released a white paper titled "Australian CBDC Pilot for Digital Finance Innovation" which investigates use cases of an upcoming financial product. To create CBDC, the institution teamed up with the Digital Finance Cooperative Research Center (DFCRC). All this within the framework of a research project that investigated all the technological, legal and regulatory aspects of CBDC. In addition, the RBA enabled financial industry participants to express their views on the interaction of the digital currency with the national monetary network. Ordinary non-institutional test participants could also evaluate the product and test its application. The entire research process is expected to end in early 2023, and the results are expected to be announced by the middle of next year. Recall that in September 2021, the Reserve Bank joined forces with the central banks of Malaysia, Singapore and South Africa to test cross-border transactions using CBDC. The Innovation Center of the Bank for International Settlements also participated in the project, supervising the activities of the above-mentioned financial institutions. Assistant Governor of the Central Bank of Malaysia - Fraziali Ismail - argued that the joint multi-CBDC program "has the potential to leapfrog past payment arrangements and serve as the basis for a more efficient international clearing platform." Technical Market Outlook: The Ethereum bulls are trying to extend the bounce from the extremely oversold conditions on the H4 time frame chart. So far the bulls were able to break out from the narrow zone located between the levels of $1,281 - $1,358 and made a local high at the level of $1,393. The momentum is strong and positive on the H4 time frame chart, so the bounce might extend towards the key short-term technical resistance located at $1,407. Nevertheless, the next target for bears is seen at the level of $1,100, $1,000 and $990. Weekly Pivot Points: WR3 - $1,352 WR2 - $1,322 WR1 - $1,302 Weekly Pivot - $1,291 WS1 - $1,271 WS2 - $1,260 WS3 - $1,230 Trading Outlook: The Ethereum market has been seen making lower highs and lower low since the swing high was made in the middle of the August at the level of $2,029. The key technical support for bulls is seen at $1,281 as a part of the demand zone located between the levels of $1,252 - $1,295. If the down move will be extended, then the next target for bears is located at the level of $1,000.   Relevance up to 08:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294354
Tesla’s Shares Are The Most Expensive|Apple Started Production In India

Tesla’s Shares Are The Most Expensive|Apple Started Production In India

Saxo Bank Saxo Bank 27.09.2022 09:27
Summary:  Bond yields surged and the US dollar picked up strength once more, pressuring US equities for the fifth day. The S&P 500 finished Monday at its lowest closing level in 2022. Investors continued to dump the U.K. Gilts and the Pound Sterling. Australia’s ASX200 could be boosted by M&A and earnings, but pressure remains. China’s central bank raised its risk reserve requirement on banks’ forward FX sales. Australia’s Federal government considers new coal mines, we cover what you need to know. For the latest in markets, with trading and investing ideas, read today's market insights. What is happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) trade at their lowest levels in 2022 The sell-off in equities continued as bond yields continued to surge, and the US dollar picked up strength, which pressed the S&P500 lower for the 5th straight day, seeing the index for the biggest 500 stocks fall 1%, while the Nasdaq 100 gave up 0.5%. The S&P500 not only took out June’s low but closed at its lowest level in 2022. VIX jumped to 32.3. And we think the market is now trading at a level that could perhaps see a very short-term relief technical rally, with the market in oversold territory and the S&P500 trading 9% under its 50-day moving average. Although we could see quant traders likely to swoop and trigger a rally, we emphasize that headwinds still remain in place; as bond yields and the USD are still charging, financial conditions and valuation remain pressured by the Fed’s pledge to tighten liquidity, and we are still likely to see more earnings downgrade. So the overarching pressure on equities remains, which is why we think a potential rally will likely be very short-lived. Australia’s ASX200 (ASXSP200.1) rallies, boosted by M&A and earnings, but pressure remains After falling 1.6% on Monday to 6,469, the Australian share market opened 0.4% higher on Tuesday boosted by earnings results and M&A talk. A company to watch might be Santos, after selling down its PNG LNG in a $1.1 billion deal. Another company to watch is Synlait Milk as it tripled its financial 2022 net profit after tax to NZ$38.5 million, after sales rose 21% to $NZ1.66 billion. Over 2021/2022 the average milk price was NZ$9.30 per kilo of milk solid, and it forecasts for that to rise to an average of NZ$9.50 in 2022/2023. The milk company gave few clues about profits ahead with no financial guidance, but it expects a similar level of profitability in financial 2023 as in financial 2021. Selling in U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) continued as yields surged to new highs Continuous melt-down in U.K. government bonds (10-year Gilt yields jumped 42bps to 4.24%) across the pond and a poor 2-year U.S. treasury note auction pushed treasury yields to a new high, with the 10-year note yielding soaring 24bps to finish the day at 3.92%, putting the psychologically important 4% handle within reach.  The 2-year yield rose 14bps to 4.34%.  The 10-year real rate, represented by the 10-year Treasury Inflation-Protected Securities (TIPS) jumped to as high as 1.62% before settling at 1.59%, a new high since 2010. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) ended lower but casino stocks were a bright spot Hang Seng Index fluctuated between modest gains and losses and finished the session 0.4% lower. HSBC (00005:xhkg) and Standard Charted (02888:xhkg) tumbled more than 7% as the Pound Sterling was in turmoil. The market however was supported by rallies in China internet stocks, with Meituan (03690:xhkg) up by 4.5%, and Tencent (00700:xhkg) rising nearing 3%.  Macao said that it will resume receiving tour groups from mainland China in November. The news boosted Macao casino stocks, Sands China (01928:xhkg) soared 15.7%, followed by SJM (00880:xhkg) and Wynn Macau (01128:xhkg) each rising more than 11%.  XPeng (09868:xhkg) jumped 8.7% after the EV maker’s founder bought USD30 million worth of shares in the company.  Ahead of the National Day golden week holiday, China catering stocks surged, led by Xiabuxiabu’s 14.4% surge and followed by Haidilao (06862:xhkg) and Jiumaojiu (09922:xhkg) rising more than 6%. Following the plunge in gold prices, share prices of gold mining companies dropped sharply, led by Zijin Mining (02899:xhkg) falling nearly 9%, Zhaojin Mining declining more than 5%.  In mainland bourses, tourism, catering, semiconductors, solar power, and EV stocks rebounded. CSI300 Index fell 0.5%. GBPUSD reversed Monday’s flash crash, but risks seen ahead Sterling reversed from the flash crash seen in the Asian session on Monday, and thin liquidity conditions may be a reason for the sharp drop. The new all-time lows were set at 1.0350 but GBPUSD recovered later to trade closer to 1.0800-levels even as BOE’s lack of action (read below) continued to weigh on sterling. BOE’s Chief Economist Pill is scheduled to make a statement on Tuesday, and lack of real action may mean further downside in sterling. EURGBP below 0.90 may mean room for further spikes as the UK inflation picture deteriorates significantly. JGB futures test the Bank of Japan’s patience again The 10-year Japanese government bond futures tested the Bank of Japan’s yield cap of 0.25% this morning as global bonds continued to be sold off following the hawkish Fed last week doubled up by the UK fiscal plan. Japan’s 2-year yield also rose above 1% for the first time since 2015, but these are outside the scope of BOJ’s yield curve control policy. This suggests the central bank may need to increase the pace of its bond buying for longer maturities, as it did in June. USDJPY is also back in close sight of 145, the level above which we saw the direct intervention by the Japanese authorities last week. Still, the scope for intervention may be lower this time as the yen has strengthened against most other currencies other than the USD. EURJPY is still below 140 from 143+ levels at the time of intervention, while GBPJPY is down from 164 to ~154. Crude oil (CLU2 & LCOV2) at year-lows Crude oil prices stabilized in the Asian morning after dipping to the lowest levels since January as tighter global monetary policy continues to underpin recession concerns. Meanwhile the rally in the US dollar continues to stretch further, as we had expected, weighing on the overall commodities sector. WTI futures drifted closer to $77/barrel while Brent futures stayed below $85. Hawkish Fed remarks overnight continue to underpin more USD gains, but the question now is at what levels OPEC will step in to pare supplies and stem the rout. What to consider? Bank of England’s lack of action As a fallout from UK’s fiscal plan, the sterling slid to record lows of 1.0350 on Monday and this prompted calls for an immediate action from the Bank of England to stem the slide in the currency or stabilize inflation expectations. However, all that the BOE did was to try to calm the market nerves with some words rather than action, and delayed any hopes of a rate hike to the next meeting scheduled on November 3. The risk of rate hikes being ineffective to restore sterling credibility may be seen, but BOE’s currency reserves are also rather limited and can only cover about two months of imports. This suggests sterling can remain prone to more wild swings. Fed speakers maintain a hawkish rhetoric Cleveland Fed President Mester was on the wires in the late US hours, reaffirming that further rate hikes will be needed and will need a restrictive stance for some time, while she added it can be better to act more aggressively in an uncertain environment and that pre-emptive action can prevent the worst-case outcome. Collins also spoke about getting inflation under control even if that mean deteriorating labour markets, while Logan (2023 voter) also stressed on the 2% inflation goal. Fed’s 2023 rate cuts bets are easing since the hawkish FOMC last week, More Fed speakers are lined up for Tuesday, including Powell, Bullard, Evans and Kashkari. However, focus may be more on what BOE’s Chief Economist Pill has to say. German Ifo survey slips to new lows Germany’s Ifo business-climate index fell to 84.3 points in September from a revised figure of 88.6 points in August, data from the Ifo Institute showed Monday. This is its lowest value since May 2020 and below expectations of 87.1. The Ifo president said that the German economy is slipping into a recession, as business confidence worsened considerably due to the escalating energy crisis. No Russian oil price cap for the moment The EU countries announced they will delay the introduction of an oil price cap on Russian imports. At least two countries, Cyprus and Hungary (the Hungarian government is one of the most vocal European governments criticizing the sanctions against Russia) have expressed opposition to the oil cap proposal. Expect intense negotiations ahead in order to reach a compromise. For this matter, the EU requires unanimity among member countries. Each country has an effective veto. Australia’s Federal government considers new coal mines; pressuring coal equites The Australian Federal government is considering 29 applications for new expanded coal mines. Coal is already a AUD$63 billion export industry for the nation down under and supported its trade surplus growing to a record. The extra capacity will be able to produce 250 million tones a year. If some or all mines are approved, it will likely cause selling in coal equities in the short term. However, given most of Australia’s coal is exported to India, and green resources will not be able to power Australia’s grid until 2024 (off peak for retail Australians only), the coal price remains supported over the longer term. A climate advocacy group said the extra coal capacity will add to half of the world’s emissions. The government is reviewing applications with BHP, and Glencore on the list.  Australia’s economic data this week, is unlikely to stop the AUD from sliding, but the AUDGBP is the pair to watch Australia’s economy has remained resilient despite the global growth slowdown; however the Aussie currency has continued to lose out, and be pressured by the resilient dollar strength, with the USD index moving to 20-year highs and rising 5% since the Fed’s hawkish Jackson Hole speech on August 26. Also keep in mind, Australian economic data; Australian retail sales out tomorrow (Wednesday 28 September) and private sector credit (borrowing) out Thursday 29 September, are both expected to fall. Although the AUDUSD faces further pressure over the medium term, the AUDGBP is perhaps a pair to watch, after hitting six-year highs on the back of the UK’s tax cuts announced. What also supports this pair rising is Australia’s surplus continuing to trade at record highs, vs UK’s deficit likely to widen. Given that’s likely for now, the AUDGBP is a worthy pair to watch that could extend its uptrend. China’s central bank imposed a 20% risk reserve requirement on banks’ forward FX sales The PBOC imposed a 20% risk reserve requirement on commercial banks’ foreign exchange forward sales to their clients. The move requires banks to set aside a 20% reserve of any forward sale of foreign currencies to their clients, including importers who seek to hedge their FX exposure. As banks will pass along the now higher funding costs of these FX forward transactions to their clients, it is estimated that it will be about 600 to 700 pips more expensive for banks’ clients to hedge their FX exposures for 12 months.  The PBOC did use the same tool before in 2015 and 2018 and triggered some selling in USDCNY but did not reverse the depreciating trend then.  PBOC’s move on Monday failed to halt the weakening in the onshore and offshore Yuan in the midst of a super-charged strong dollar against major currencies, with USDCNH rising by 0.4% to 7.17. Tesla’s share price performance rivals Apple’s So far this year, out of the five biggest US firms by market value, Tesla has become the new megacap unlikely rival to Apple. Tesla shares are outperforming Microsoft, Alphabet, and Amazon so far this year, and coming close to Apple’s performance. However, Tesla’s shares are by far the most expensive. For more on what to expect from Tesla ahead, it’s worth reading or watching our update, available here. Apple begins production in India Apple has begun assembling some of its iPhone 14 in India. This may be the start of a manufacturing boom in India, as China transitions to a consumption economy and US-China tensions continue to play out. Meanwhile, India’s push on electronics manufacturing could mean more foreign investments to come, as India seeks to solidify its position in global supply chains in addition to being a large consumption-driven economy. Our India equity theme basket is worth considering as India remains one of the big winners of deglobalization and slowing Chinese economy. Separately, also consider Apple is one of the most traded stocks at Saxo globally this month. We wrote recently on why to expect Apple to perhaps pave out a bullish sales outlook, for more read here.     For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-trading-and-investing-ideas-to-consider-27-sept-27092022
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

Statement Of Boston Fed Chief|No Move From The Bank Of England (BoE)

Saxo Bank Saxo Bank 27.09.2022 09:37
Summary:  Market sentiment was weak again yesterday, but the price action in the US market managed to avoid a break of key support despite a fresh surge higher in US treasury yields, taking them to new cycle highs. Sentiment has improved slightly overnight as the further USD spike late yesterday eased off the accelerator. The chaotic moves in sterling likewise calmed, despite lack of clarity from the Bank of England on the degree to which an emergency move to shore up the currency is necessary.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities were under a lot of pressure yesterday as the US 10-year bonds saw big moves pushing the 10-year yield closer towards 4% in moves that smelled of thin liquidity and heightened nervousness. S&P 500 futures did the worst close in terms of level for this drawdown cycle but did not go below the intraday lows hit during the June selloff. This morning the mood among investors is stabilising and S&P 500 futures are rebounding 1.1% trading around the 3,710 level. If the USD Index and US yields come down today we could see the VIX forward curve flip back into contango and help push equity futures higher planting the seeds for a short-term rally. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index fell another 1% to its lowest level since 2011, led by the charge lower of the tech sector. Hang Seng Tech Index (HSTECH.I) dropped 1.7% and leading China Internet names fell over 2%. HSBC (00005:xhkg) failed to rally despite the Pound Sterling having stabilized. Ahead of quarter-end and the National Day golden week holiday, the PBoC for two consecutive days in a row this week via open market operations. The year-on-year decline in China’s industrial profits slowed in August. CSI 300 gained 0.5%, led by wind power, solar power, semiconductor, and infrastructure stocks. Sterling (GBPUSD, EURGBP) reversed Monday’s flash crash, but risks seen ahead Sterling reversed from the flash crash seen in the Asian session on Monday, and thin liquidity conditions may have been a reason for the sharp drop. The new all-time low was set at 1.0350 but GBPUSD recovered later to trade closer to 1.0800-levels even as BOE’s lack of action (read below) continued to weigh on sterling. BOE’s Chief Economist Pill is scheduled to make a statement on Tuesday, and lack of real action may mean further downside in sterling. EURGBP traded between 0.8900 and 0.9000 after the wild spike to 0.9200+ on Monday, with the highest weekly close during the 2016-2020 “Brexit limbo” years just above 0.9300. Some USD pairs seeing wild moves on further spike in US yields The US dollar strength spiked higher yesterday, with the extension higher particularly aggressive against some of the G10 weaklings of late like NZD and NOK (USDNOK only has one weekly close above the current level near 10.75 in its history, posted during the pandemic outbreak in early 2020). The move was supported by a further rise in long US treasury yields yesterday, as the 10-year benchmark rose sharply again. Today’s September US Consumer Confidence reading and 5-year treasury auction (more below under US Treasuries) are in focus for next steps for the USD and US yields. Gold (XAUUSD) Gold dropped further on Monday as the relentless dollar and US yields surge left it with nowhere to go but down. It has since bounced back a bit after almost reaching $1618, the 50% retracement of the 2018 to 2020 rally. The short-term direction will be dictated by the dollar and the duration of the current bond market rout which has seen an almost one percent jump in US ten-year real yields this month. With the recent decline in breakeven yields, as investors buy into the Fed’s ability to bring down inflation, real yields have risen strongly thereby challenging gold and other investment metals. Crude oil (CLX2 & LCOX2) Crude oil traded higher in Asia following another day of selling led by a continued rally in the dollar and US Treasury yields driving concerns about tighter monetary policy leading to weaker demand for crude oil and fuel products. Brent and WTI both reached their lowest levels since January after several Federal Reserve policy makers signaled that further rate rises were in store to tame inflation regardless of the economic impact of such actions. The question now is at what levels OPEC+ will step in to pare supplies and stem what increasingly has become a rout, not only in crude oil but across markets. Also focus on hurricane Ian which is gaining power as it nears Cuba on a path toward the eastern part of the Gulf and Florida, leading to a surge in demand for diesel. While it is expected to miss most of the energy infrastructure in the Gulf of Mexico some offshort production has been shut down with employees being evacuated. US treasuries (TLT, IEF) US treasury yields rose sharply once again yesterday, particularly at the longer end of the curve, where the US 10-year treasury yield came within eight basis points of the 4% handle. For perspective, that benchmark has not closed above 4% on a weekly close since 2008. A 2-year US Treasury auction saw surprisingly tepid demand, given the very high yield on offer well north of 4%. Today sees the auction of 5-year treasuries and tomorrow a 7-year auction. What is going on? Bank of England’s lack of action Sterling slid to record lows of 1.0350 on Monday on the fallout from the announcement of new tax cuts late last week, prompting calls for an immediate action from the Bank of England to stem the slide in the currency or stabilize inflation expectations. However, the BOE response was rather lacking, only bringing a few words rather than action, and bringing doubt on whether the BoE would hike rates between now and the next regularly scheduled meeting on November 3. The risk of rate hikes being ineffective to restore sterling credibility may be seen, but BOE’s currency reserves are also rather limited and can only cover about two months of imports. This suggests sterling can remain prone to more wild swings.  The BOE’s Chief Economist Huw Pill will speak today.  Fed speakers maintain hawkish rhetoric Cleveland Fed President Mester (voter this year) was on the wires in the late US hours, reaffirming that further rate hikes will be needed and as the Fed is set to maintain a restrictive stance for some time, while she added it can be better to act more aggressively in an uncertain environment and that pre-emptive action can prevent the worst-case outcome. Boston Fed chief and FOMC voter Collins also spoke about getting inflation under control even if that means deteriorating labour markets, while Logan (2023 voter) also stressed the 2% inflation goal. Fed’s 2023 rate cuts bets are easing since the hawkish FOMC last week, More Fed speakers are lined up for Tuesday, including Powell, Bullard, Evans and Kashkari. German Ifo survey slips to new lows Germany’s Ifo business-climate index fell to 84.3 points in September from a revised figure of 88.6 points in August, data from the Ifo Institute showed Monday. This is its lowest value since May 2020 and below expectations of 87.1. The Ifo president said that the German economy is slipping into a recession, as business confidence worsened due to the escalating energy crisis.  China’s industrial profits declined 9.5% Y/Y in August but slower sequentially In the first eight months of 2022, China’s industrial profits contracted 2.1% y/y. For the month of August, industrial profits declined 9.5% y/y, a slower contraction that July’s -14.5% y/y. The National Bureau Statistics noted that the slower pace of contraction was helped by stronger auto, electrical equipment, electricity generation, and consumer product industries. No Russian oil price cap for the moment Yesterday, the EU countries announced they will delay the introduction of an oil price cap on Russian imports. At least two countries, Cyprus and Hungary (the Hungarian government is one of the most vocal European governments criticizing the sanctions against Russia) have expressed opposition to the oil cap proposal. Expect intense negotiations ahead to reach a compromise. For this matter, the EU requires unanimity among member countries. Each country has an effective veto. What are we watching next? Traders are expecting further tightening from central banks The money markets expect that the European Central Bank (ECB) will go for another 75 basis point interest rate hike in October. Given the plunge of the sterling pound, traders expect that the Bank of England (BoE) could go in with a 100 basis points emergency rate hike before the scheduled November meeting. Hopefully, this will work. If it fails, the Bank would be in a complicated situation and the sterling pound would certainly further weaken. This is one of at least four options the Bank must use to stop the currency slide. The three others are: 1) say and do nothing until the calm comes back in the forex market; 2) say something but do nothing (with might not be the best option so far); and 3) do something small (50 basis point interest hike for instance) but the market might then test the Bank. There is no easy answer, as you can see. Apple begins production in India Apple has begun assembling some of its iPhone 14 in India. This may be the start of a manufacturing boom in India, as China transitions to a consumption economy and US-China tensions continue to play out. Meanwhile, India’s push on electronics manufacturing could mean more foreign investments to come, as India seeks to solidify its position in global supply chains in addition to being a large consumption-driven economy. Our India equity theme basket is worth considering as India remains one of the big winners of deglobalization and slowing Chinese economy. US September Consumer Confidence up later today Confidence according to this survey rebounded in August to 103.20 versus the local low of 95.30 in July, likely as the labor market remains strong and gasoline prices had fallen sharply from the record levels back in June. Today’s number is expected at 104.5, but it is worth noting that while the overall survey has remained well within the range since 2015, the ratio of the very high Present Situation versus very low Expectations was the widest (-81.4) recorded in July since a brief episode in early 2001. Earnings calendar this week The action this week will be on Thursday with earnings from H&M, Nike, and Micron Technology, with earnings from Micron being the most interesting to watch as we already know H&M and Nike are seeing weak demand. Micron has exposure to the consumer electronics industry and manufactures memory chips in Asia which means that the company sits in at the intersection of many interesting trends. Today: Ferguson Wednesday: Paychex, Cintas Thursday: Polestar Automotive, H&M, Nike, Micron Technology, CarMax Friday: Carnival (postponed from last week), Nitori Economic calendar highlights for today (times GMT) 0730 – US Fed’s Evans (voter in 2023) to speak on CNBC 1000 – Sweden Riksbank's Ingves to speak 1015 – US Fed’s Evans to speak 1100 – UK Bank of England Chief Economist Pill to speak 1100 – ECB's Villeroy to speak 1130 – Fed Chair Powell to speak on digital currencies 1230 – US Aug. Preliminary Durable Goods Orders 1300 – US Jul. S&P CoreLogic Home Prices 1315 – ECB's Guindos to speak 1355 – US Fed’s Bullard (voter 2022) to speak 1400 – US Sep. Consumer Confidence 1400 – US Aug. New Home Sales 1700 – US 5-year Treasury Auction 1700 – US Fed’s Kashkari (voter 2023) to speak 2030 – API's Weekly Crude and Fuel Stock Report 2350 – Japan Bank of Japan meeting minutes 0130 – Australia Aug. Retail Sales   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-27-2022-27092022
EM Index Inclusions and Exclusions: India Thrives, Egypt Faces Challenges

Chaos And Rising Volatility Are Present In Market Mood

Swissquote Bank Swissquote Bank 27.09.2022 09:52
We had a bearish start to the week on Monday and the price action across several asset classes remains volatile and chaotic - and that’s especially true for the FX markets shaken by the freefall in sterling. FX Market The US dollar remains king, on the back of a heavy sterling meltdown due to irresponsible UK government / lazy Bank of England (BoE), and euro selloff on the back of Italy turning right / cautious European Central Bank. The USDJPY spiked at yesterday’s dollar rally, as if the Bank of Japan (BoJ) never intervened last week. The BoJ head says that he supports intervention in the yen. In vain. Stock Martet  Equities selloff, as investors expect a deeper downside move due to pressured earnings. Tech stocks remain on the chopping block. To reverse sentiment, Amazon throws the second Prime Day sale this year, and Apple hurries out of China. While outlook for equities remains bearish, the rising yields make sovereign markets increasingly appetizing, and an eventual inflows in global sovereign markets could be the first sign of healing from the actual financial crisis. Watch the full episode to find out more! 0:00 Intro 0:27 Bailey is clearly not a good 'adult' in the room… 4:26 Where is the money, and where could it go next? 5:53 Stock mood update 8:20 FX talk Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #GBP #EUR #selloff #UK #mini #budget #USD #rally #Apple #Amazon #Google #Netflix #UK #gilt #sovereign #bonds #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Saxo Bank Podcast: Natural Gas On Colder Weather, Wheat And Coffee Under Pressure, JPY Weaker And More

The Continuation Of The Bullish Move In Prices Of Natural Gas

TeleTrade Comments TeleTrade Comments 27.09.2022 10:00
CME Group’s flash data for natural gas futures markets noted open interest increased for the second session in a row on Monday, this time by around 1.3K contracts. Volume, instead, shrank for the second consecutive session, now by around 132.7K contracts, the largest single-day drop since August 12. Natural Gas now looks supported around $6.50 Monday’s drop and rebound from the $6.50 region was on the back of rising open interest, which reinforces the continuation of the bullish move in prices of natural gas in the very near term. In the meantime, decent contention seems to have now emerged around $6.50.
Rates Spark: Riding the hawkish wave while it lasts

The Fed’s Determination Is The Most Important Factor Supporting The Dollar (USD)

TeleTrade Comments TeleTrade Comments 27.09.2022 10:11
The US dollar continues to move higher. Economists at Commerzbank believe that a strong greenback is fundamentally justified. Strong, stronger, too strong? “The outlook for the US dollar remains positive. Yes, the significant rate hikes are beginning to have an effect, as today’s housing market data in particular is likely to underline. But order intake and consumer confidence are also likely to illustrate that the real economic environment remains relatively robust.” “Further rate hikes will be required to get a grip on inflation. The Fed’s determination is the most important factor supporting the dollar.” “It cannot be overlooked that the dollar is trading at record levels on a trade-weighted basis. However, current exchange rate levels are fundamentally justified.”
The Turkish Central Bank Cut Its Policy Rate by150bp | Credit Suisse Outflows Benefit UBS

The US Dollar To Turkish Lira (USD/TRY) Pair Can Continue To Remain Firmer

TeleTrade Comments TeleTrade Comments 27.09.2022 10:15
USD/TRY remains on the front foot at all-time high during three-day uptrend. CBRT documents hints at further rate cuts, DXY retreats from 20-year high. Fed’s Powell, US data can entertain intraday traders, bulls are likely to keep reins. USD/TRY shrugs off the US dollar pullback to stay on the front foot and refresh the all-time high near 18.48 heading into Tuesday’s European session. In doing so, the Turkish lira (TRY) seems to cheer hints of more rate cuts from the Central Bank of the Republic of Türkiye (CBRT). Reuters quotes an official document from the CBRT, published Monday, to mention that Turkey's central bank lowered its reference interest rate by nearly 140 basis points to 13.96% for October in a move aimed at further cutting rates on corporate loans. The news also mentioned, “Last month, the central bank unveiled new required bond holdings for lenders meant to address the widening gap between the bank's policy rate and lending rates.” Ankara is already going through a lot these days due to the CBRT’s resistance to rate hikes and nearly 80% inflation, not to forget broad geopolitical tension. That said, the latest moves from the central banks add weakness to the TRY. On the other hand, the US Dollar Index (DXY) retreats from the 20-year high, down 0.45% intraday near 113.60 by the press time, as softer yields join downbeat US data and inflation expectations. US Treasury yields retreat from the multi-year high while the S&P 500 Futures also print mild gains by the press time. That said, US 10-year Treasury yields rose to the highest levels in 12 years while the 2-year bond coupons refreshed the 15-year top as traders rushed to the risk safety. Further, Chicago Fed National Activity Index weakened to 0.0 in August versus 0.09 market expectations and an upwardly revised prior reading of 0.29. Elsewhere, the US inflation expectations as per the 10-year and 5-year breakeven inflation rates per the St. Louis Federal Reserve (FRED) data, signaled that the gauges refreshed the multi-day low on Monday. While noting the details, the longer-term inflation expectations dropped to the lowest level since July 13, 2022, whereas the 5-year benchmark slumped to the lowest levels since June 2021 with the latest figures being 2.32% and 2.33% respectively. Given the fundamental weakness in Turkey, vis-à-vis the US, the USD/TRY pair can continue to remain firmer. However, US CB Consumer Confidence for September and Durable Goods Orders for August will join today’s speech from Fed Chair Jerome Powell to direct short-term moves. Technical analysis A two-month-old ascending resistance line challenges USD/TRY bulls around 18.50 amid the overbought RSI conditions. The anticipated pullback moves, however, remain elusive unless breaking an upward sloping trend line support near 18.28.
Silver Bulls Now Awaiting A Move Beyond The $24.50-$24.55 Area

Silver Has Potential For Further The Strong Downside Momentum

InstaForex Analysis InstaForex Analysis 27.09.2022 10:27
Technical analysis: Silver has been trading upside during the Asia session and the price tested the level of $18.75. Anyway, I see potential for the downside movement due to strong downside cycle. Trading recommendation: Due to the strong downside momentum in the background, I see potential for further downside movement. Watch for the potential selling opportunities in case of the breakout of the mini upside channel. Downside objective is set at the price of $18.00. Oscillator is showing overbought condition and fresh bear cross, which is good sign for further downside movement. Resistance is set at the price of $19.00   Relevance up to 09:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294376
Bank of England survey highlights easing price pressures

The Trend Of The Pound (GBP) And The Actions Of The Bank Of England (BoE) Have A Strong Correlation

InstaForex Analysis InstaForex Analysis 27.09.2022 10:42
Pound tumbled to a record low on Monday due to concerns over the stability of the UK's financial position. It followed a strong decline last Friday, which occurred because of the widespread demand for the dollar in the context of the global crisis and geopolitical tensions, as well as the new UK Treasury Chief Kwasi Kwarteng's announcement that the government will implement the biggest tax cut in 50 years while increasing government borrowing and spending despite high inflation. The measures have raised expectations that the Bank of England may go for an emergency increase in the discount rate to strengthen market confidence and the national currency. In addition to the problems mentioned above, the UK is facing weak economic statistics. Business activity in the manufacturing sector reportedly fell below 50 points, which is bad for the economy. If the situation does not change, the pound will fall to parity with the dollar. Perhaps, there may be a local rebound in GBP/USD, but the main trend will be downward until the Bank of England decides on a sharp increase in rates. Forecasts for today: USD/CAD The pair is trading below the support level of 1.3675. A decrease in negative sentiment, local rebound in stock indices and strong rise in oil prices may prompt a further fall to 1.3575. USD/JPY The pair faced resistance at 144.80. But if market sentiment improves, it will bounce back to 143.15.   Relevance up to 08:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322744
Bitcoin Began To Move Up Today, Does That Signifies A Shift In Trend?

Bitcoin Began To Move Up Today, Does That Signifies A Shift In Trend?

InstaForex Analysis InstaForex Analysis 27.09.2022 10:52
Technical analysis: BTC has been trading upside today and I found breakout of the multi day range, which is good sign for further rally. I see potential fo the further rally. Trading recommendation: Due to the breakout of the multi day balance in the background, I see potential for further upside continuation. Watch for the potential buying opportunities on the dips with the upside objectives at the price of $21.200 and $22.565. MACD is showing positive reading, which is good sign that demand is in control.... Key support s set at the price of $18.550 Relevance up to 10:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294384
Eurozone's Improving Inflation Outlook: Is the ECB Falling Behind?

Podcast: Overview Of Yesterday's Market Events And Look At Signals From The US Consumer Confidence

Saxo Bank Saxo Bank 27.09.2022 10:58
Summary:  Today we look at the equity market's precise test of the cycle lows yesterday and brightening sentiment overnight, despite the fresh surge in US treasury yields and the US dollar yesterday. An increasingly inverted VIX forward curve suggests that the market low may be close in time, if possibly not in price. We also look at signals from the US Consumer Confidence as the September reading is due today, break down broader commodity performance since commodities peaked, update the crude oil outlook after the recent price plunge, highlight upcoming event risks on the economic calendar and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-sep-27-2022-27092022
UK Monetary Policy Outlook: A September Hike Likely, but November Uncertain

Intervention In The Yen (JPY) Still Remains A Far Cry| The Pound (GBP) Is The Weakest Against The Dollar (USD)

InstaForex Analysis InstaForex Analysis 27.09.2022 11:04
Summary:  Havoc has spread to the markets, not just with the Fed staying the hawkish course, but with the collapse in confidence in the UK economy after a fiscal policy and lack of monetary policy response adding into the mix with a massive bond selloff. Meanwhile, the surge in the US dollar continued taking its toll on several currencies, and the effect of Japan’s intervention from last week has also faded. Earnings pressure may be the next shoe to drop, and recession concerns also still need to be priced in more broadly. Fed’s high-for-longer message is now being taken seriously The September FOMC meeting was not precisely a pivot point for the Fed, but more so for the markets which finally understood the Fed’s message on inflation. The dot plot, particularly, conveyed two key messages as listed below. Even though the accuracy of the dot plot remains in doubt, given a very weak correlation with what actually transpired previously, it is a great signalling tool to understand the intentions of the FOMC members. Terminal rate is seen at ~4.6%, which was above what Fed funds futures were pricing in before the meeting. Even slower growth and higher unemployment levels, as conveyed by the Fed’s projections, would not deter the central bank from hiking rates There was some pushback on premature easing, with the dot plot showing a 4.5-5.0% rate even at the end of December 2023. Alongside that commitment to tighten, the Fed is now at the full pace of its quantitative tightening program, which is sucking liquidity out of financial markets at a rapid pace. The aim is to shrink the Fed’s balance sheet by $95bn a month — double the August pace. While quantitative tightening strongly influences liquidity conditions and asset markets, it is less useful in directly impacting inflation. While systemic risks from QT may remain contained, it ramps up the rise in Treasury yields as the Fed’s balance sheet shrinks and the amount of Treasuries in private hands increases. Trussonomics pushing UK to an emerging market status Sterling has fallen close to 10% on a trade-weighted basis in a little under two months, and has surpassed the Japanese yen to be the weakest against the US dollar year-to-date. An immediate response from the Bank of England may have saved some face, but remember that last week’s BOE decision was a pretty split vote as well with two members voting for 75bps rate hike and one calling for a smaller 25bps rate hike as well. So, it remains hard to expect a prudent policy response from the BOE, and a parity for GBPUSD in that case may not prove to be the floor. UK’s net forex reserves of $100bn are also enough to only cover two months of imports, or roughly equal to 3% of GDP as compared to Japan’s 20% and Switzerland’s 115%. But it’s not just about the sterling crisis in the UK, but more generally a crisis of confidence. Not to forget, inflation forecasts for end of the year are already at 10%+ levels and the market is now pricing in over 200bps of rate hikes by the end of the year, with two meetings left. The central bank will need to deliver this massive tightening simply to keep the sterling where it currently is and that won’t reverse the impact of the government’s decisions on UK markets. The scale and speed of the hikes could also do significant damage to the economy. The iShares MSCI United Kingdom ETF (EWU:arcx) traded lower by another 1.8% on Monday and is now down 7.3% over the last one week. Bank of Japan’s patience will keep getting tested We wrote earlier about what will need to change to call it a top in the US dollar, and nothing seems to be in order yet except some of the non-US officials starting to get concerned about currency weakness. Still, the intervention from Bank of Japan didn’t have long lasting effects on USDJPY, even as it helped to strengthen the yen against some of the other currencies such as the EUR, GBP or AUD. It may have also helped to stop some speculative shorts. But a coordinated intervention in the yen still remains a far cry, with the weakness in the Japanese yen being BoJ's own-doing due to the yield curve control policy. Japanese government bonds will likely continue to test the patience of Bank of Japan with its yield curve control policy. Downside for Japanese government bonds (JGB1c1) will potentially spike exponentially if the BOJ pivots at some point. Earnings pressure may be next While the Q2 earnings season proved to be more resilient than expectations, intensifying inflation concerns have turned corporates more cautious on the outlook and less optimistic for the near-term earnings performances. We have seen some downward revision of EPS estimates for the third quarter in July and August, and we still cannot rule out further grim outlook and margin pressures. Estimates for S&P 500 earnings in 2022 stood at $226.15 per share as of August 31, according to FactSet. This is down 1.5% from the $229.60 per share estimate as of June 30. For 2023, analysts now expect EPS of $243.68, down 2.8% from the June estimate of $250.61. So far, companies dealt with rising inflation by passing on increased costs to consumers, given the pandemic-era fiscal support measures underpinned strength in the consumer side. These increased pass-through was also visible in higher CPI prints. But with the economic outlook getting duller by the day, there is bound to be some pushback from the consumers and that will likely show up in the earnings report card. From a sectoral perspective, tech stocks will likely be battered as tight corporate budgets weigh and the US 10-year yields are in close sights of 4%. Semiconductors, a barometer of global economic health, could also face further pressure. Meanwhile, the oil and gas sector was the saviour of the Q2 earnings season, but would also likely see some pressure in Q3, unless the outlook starts to look slightly more upbeat with improving capex plans. Dollar pivot is the next key catalyst to watch The majority of the market downfall we have seen so far has come from a rapid shift in cost of capital and correcting peak valuation. The next leg, as discussed above could be the earnings recession. Still, economic recession risks remain and history suggests that the market lows do not come until after the recession begins (see chart below). Still, with the US 10-year yields approaching 4% - which maybe a likely ceiling – the focus turns to a reversal in the US dollar as the next pivot, not the Fed. Testing those key levels could mean a short-term bounce in equities which may be favourable for building new short positions as the trend still remains down. Alternatively, for investors, it would rather be optimal to look for signs of selling exhaustion to accumulate long positions, such as VIX above 40. Historically, a decline in stocks of the order of 20% makes it buying stocks after they have been down 20% from record highs has been a good risk/reward proposition for longer-term investors.     Source: https://www.home.saxo/content/articles/macro/macro-insights-approaching-a-breaking-point-but-not-without-more-pain-first-27092022
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

The USD/CAD Pair Has A Potential For The Upside Movement Continuation

InstaForex Analysis InstaForex Analysis 27.09.2022 10:32
Technical analysis: USD/CAD has been trading downside during the Asia session and the price tested the level of 1.3637. Anyway, I see potential for the upside continuation of the bigger upside trend. Trading recommendation: Due to the strong upside movement.in the background, I see upside continuation. Watch for the potential buying opportunities on the dips wit hteh upside objective at the price of 1.3790. Oscillator is showing bullish divergence and fresh bull cross, which is good sign for further upside movement. Key support is set at the price of 1.3635   Relevance up to 10:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294380
Forex: Jason Sen Comments On EUR/USD And GBP/USD

Forex: Jason Sen Comments On EUR/USD And GBP/USD

Jason Sen Jason Sen 27.09.2022 10:32
EURUSD we wrote: collapsed after the sell signal initially targeting 9810/9790 & 9720/00. Holding below here targets 9620/00. Target hit but we continued lower to 9565. GBPUSD crashed another 500 pips as soon as the market opened on Sunday to hit a new all time low at 1.0382. Today's Analysis. EURUSD first resistance at 9700/20. Shorts need stops above 9740. A break higher can target 9800/20. The only support is at 9580/60. Longs are so risky in the bear trend with momentum building to the downside. A break below 9540 signals further losses to 9490/80 & 9430/20. GBPUSD crashed to 1.03.84 then shot higher to first resistance at 1.0940/60 with a high for the day only 10 pips below. The resistance is lower today at 1.0900/20 today. Shorts need stops above 1.0940. A break higher can target 1.1100/20. Holding first resistance at 1.0900/20 targets 1.0740/20 perhaps as far as 1.0650/30. Obviously the only support we now have is at yesterday's all time low at 1.0400/1.0385. daytradeideas.co.uk
Forex: USD/JPY Is Expected To Reach 145 In The End Of The Year. Why Is That?

Trading In The US Dollar To Japanene Yen (USD/JPY) In The Short-Term Is Very Risky

InstaForex Analysis InstaForex Analysis 27.09.2022 12:42
USD/JPY: The chart shows the movement of #USD/JPY in the hourly (H1) chart. Comparing the recent price movement to that of September 20 and 22's, it can be seen clearly that the key support level is £144.09, while the dynamic resistance levels are the two sloping lines converging on September 29's high, that is, £144.92. Based on this, it is likely that a breakdown of the support level of £144.09 will lead to a drop towards £141.60, while a test and breakdown of £144.92 will result in a rise to £145.81. Either way, trading in the short-term is very risky, so be careful when entering and exiting the market. Good luck!   Relevance up to 10:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322770
GBP/USD Analysis: GBP Maintains Growth Momentum, Market Awaits US Inflation Report

The Entire Cryptocurrency Market Are At Risk Of Going On A Local Bull Run

InstaForex Analysis InstaForex Analysis 27.09.2022 12:52
The Merge did not have a significant impact on Ethereum quotes, as a full-fledged transition to PoS is just beginning. A significant part of the DeFi sector is in transition and the main altcoin is waiting for several updates before the migration is fully completed. The maximum value from switching Ethereum to PoS will become clear during the next bullish rally. Until then, the altcoin continues to fluctuate in the $1,200–$1,800 range. Over the past 24 hours, the cryptocurrency managed to slightly improve the situation and rise in price by 7%. Ethereum Gives Bullish Signals As of writing, Ether is trading at $1,380 and continues to be bullish. ETH ended the last trading day with a bullish momentum and a small green candle. Most of the buying volumes in the Ethereum network were already formed on September 27. The cryptocurrency has come close to the $1,400 level, which is a key resistance zone. The asset has every chance to gain a foothold above this level at the end of the current trading day. However, it will be possible to talk about a local price reversal only if it successfully consolidates above $1,450. ETH/USD Technical analysis On the daily chart, ETH/USD is showing serious bullish signals. The RSI index has acquired an upward direction, indicating the formation of buying volumes. The MACD indicator is one step away from forming a bullish crossover and resuming upward movement. A strong bullish signal is shown by the stochastic oscillator. The metric has been unable to overcome the oversold zone since September 14 but has subsequently realized a bullish momentum. The indicator has reached the level of 26 and keeps its upward direction. From a technical point of view, the cryptocurrency is approaching the birth of a local upward trend. If it successfully consolidates above $1,450 at the end of the current trading day, the asset has every chance to develop success in the direction of $1,600–$1,800. Reasons for the likely upward trend The main reason for the likely upward trend of the cryptocurrency may be the correction of the US dollar index. The indicator reached a peak value of 114.5 for more than 20 years, after which it began to correct. Given that the DXY technical metrics are in a state of excessive overbought, a deeper correction should be expected. There is also a gradual increase in trading activity. The number of unique addresses and transaction volumes are growing, which may indicate preparations for a local bullish movement. However, it is most likely that a clear jump in indicators will occur if the price successfully consolidates above $1,450. The positive news was the publication of Stanford researchers with the concept of new standards for Ethereum tokens. The study involves the creation of standards for conducting reversible transactions. Management will be carried out by a decentralized system using a voting system. Conclusions Ethereum, Bitcoin and the entire cryptocurrency market are at risk of going on a local bull run due to the DXY correction. The gradual influx of funds into crypto funds hints at an improvement in the investment situation in the market. However, to confirm bullish intentions, Ethereum needs to gain a foothold above $1,450 at the end of the current trading day.   Relevance up to 09:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322758
Is British Pound (GBP) Benefitting From Rumours About The Bank's Of England Action?

Is British Pound (GBP) Benefitting From Rumours About The Bank's Of England Action?

Jing Ren Jing Ren 27.09.2022 08:41
In this article: British Pound To US Dollar - Bank Of England Is Rumoured To Hike The Rate New Zealand Dollar To US Dollar US 30 - Is Dow Jones "Scared" Of Fed GBPUSD finds limited relief The pound recoups losses over speculations of an emergency rate hike by the BoE. After breaking below March 2020’s lows near 1.1500 Sterling sank to an all-time low at 1.0350. An extremely oversold RSI on the daily chart prompted intraday traders to take some chips off the table. However, strong selling pressure could be expected from trend followers as the pound probes resistance overhead. 1.1050 would be the first hurdle and 1.1350 over the 20-hour moving average a major level that may keep the bounce in check. Read next: British Pound (GBP) May Be Helped With Forex Intervention, But It May Take A While. Bank Of Japan Supported Yen This Way, Swiss National Bank May Do The Same | FXMAG.COM NZDUSD remains under pressure The New Zealand dollar softens as markets remain gripped by growth fears. The fall accelerated following the kiwi’s failure to bounce at May 2020’s low (0.5930). The bearish inertia and pessimism may continue to drive the price south. The RSI’s oversold condition could trigger sporadic bounces. 0.5740 is a resistance where the bears could be eager to sell into strength. A struggle to break higher would show a lack of sustained buying interest and the pair may drift towards 0.5600 and then March 2020’s lows around 0.5500. US 30 breaks critical floor The Dow Jones 30 slips over concerns of a Fed tightening overdose. A break below June’s low at 29800 may have sealed the fate of the index by putting it on a bearish track. The breakout also confirms the bearish MA cross on the daily chart, indicating an acceleration to the downside. 28500 could be the next target. A brief bounce may draw more selling interests as the downtrend resumes its course, while trapped bulls may seek to bail out in the supply zone near the psychological level of 30000, exacerbating volatility in the process.
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

The Euro To US Dollar Pair Is Trading At Its Lowest Levels In 20 Years

InstaForex Analysis InstaForex Analysis 27.09.2022 12:54
On Monday, EUR/USD dropped to the retracement level of 423.6% located at 0.9585 on the H1 chart and then rebounded from it twice. So, the pair reversed in favor of the European currency and started to rise slowly towards 0.9782. Yesterday, the information background was mixed. On the one hand, there is news about parliamentary elections in Italy and the new UK Prime Minister. Some Conservative MPs are preparing to send letters of no confidence in Liz Truss. Yet, I doubt that such news could have hit the pound or the euro so hard. The speech by Christine Lagarde was far more important. She assured markets that the ECB would continue to raise the rate in order to slow demand even despite a decline in business activity and a high threat of a recession. This is a positive factor for the European currency as the EU regulator will pursue monetary tightening and may soon catch up with the US Fed. However, there was no significant rise, and the euro/dollar pair is trading at its lowest levels in 20 years. Therefore, bears are still in control of the market despite any news background. The recent COT report showed a rapid surge in buy contracts although this fact didn't support the euro in any way. This indicates that the overall market sentiment remains bearish and is not changing. Consolidation below the retracement level of 423.6% may push the price lower to 0.9000. The existing downward channel also confirms the bearish sentiment. This week, Christine Lagarde will give another speech as well as some FOMC members. Their rhetoric is unlikely to change, so traders won't have to choose a new strategy and adjust it to new approaches of the ECB or the Fed. On the 4-hour chart, the pair dropped to the retracement level of 161.8% located at 0.9581. A rebound from this level will activate the upside momentum of the euro and may send the price towards the upper line of the downward channel. Yet, I doubt that this upward movement will be strong as traders are convinced to sell the euro. A strong hold below 0.9581 will make a further decline more likely. Commitments of Traders (COT) report: Last week, traders closed 1,214 long contracts and 46,500 short contracts. This indicates that large market players became less bearish on the pair. The overall amount of opened long contracts stands at 206,000 while the amount of short contracts is 173,000. So, the market sentiment has become more bullish recently. Yet, the euro has failed to develop a sustainable uptrend. In recent weeks, there were some chances for the euro to recover. However, traders are hesitant to buy it and prefer the US dollar instead. The European currency has failed to show a proper advance over the past months. Therefore, I would advise you to focus on the main descending channels on the H1 and H4 charts. The pair may start to rise only when the price closes above these channels. Economic calendar for US and EU: EU - ECB President Lagarde speaks (11-30 UTC). US - Core Durable Goods Orders (12-30 UTC). On September 27, both economic calendars for the EU and US have one important event each. Today's speech by Christine Lagarde will most likely be similar to what she said yesterday. The impact of the information background on the market may be weak on Tuesday. EUR/USD forecast and trading tips: I would recommend selling the pair after its rebound from the level of 1.0173 (1.0196) on H4 with the targets found at 0.9900, 0.9782, and 0.9581. All these targets have already been tested. New short positions can be opened when the price closes below 0.9585. It is better to buy the pair when the quotes settle firmly above the level of 1.0173 on H4 with the target at 1.0638.   Relevance up to 10:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322766
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Look At The Euro-US Dollar (EUR/USD) And The Pound-US Dollar (GBP/USD) Pairs

InstaForex Analysis InstaForex Analysis 27.09.2022 13:00
The macroeconomic calendar was empty; no important statistics were published. Investors and speculators worked out the information flow of the past week. The UK Treasury yesterday commented on everything that is happening in the country's economy, the main theses: - The medium-term financial plan will be presented on November 23. - The budget plan will set out additional details, including ensuring that the share of UK debt to GDP falls in the medium term. At the same time, the Bank of England made its comments: - We closely monitor the market for significant revaluation of financial assets; - We will not hesitate to raise the interest rate to bring inflation back to the target level of 2.0%. According to media reports, traders are waiting for an unscheduled rate hike by the Bank of England amid the collapse of the national currency. Perhaps this was the reason for such a significant pullback. There is no confirmation of rumors regarding an unscheduled rate hike. If the regulator does not take any drastic action, the pound will continue to decline. Analysis of trading charts from September 26 The EUR/USD currency pair opened a new trading week with an update of the low of the downward trend. As a result, the quote reached the levels of June 2002, at 0.9553, relative to which the stage of technical pullback occurred. The GBP/USD currency pair has set several records at once. The absolute low was updated, the quote overcame the level of 1985, eventually reaching the value of 1.0345. The scale of the pound's collapse from last Friday to the beginning of Monday's trading amounted to almost 1,000 points, while the pullback caused by the fatal overheating of short positions on the pound was about 550 points. Economic calendar for September 27 Today, data on orders for durable goods in the United States will be published, which may decrease by 0.9%. This is a fairly strong reduction, which foreshadows a noticeable decline in consumer activity, which is the locomotive of the American economy. As a result, these negative data, if confirmed, can put pressure on dollar positions. Also, U.S. Federal Reserve Chairman Jerome Powell and ECB President Christine Lagarde are scheduled to give a speech. It is worth listening to what they will say, although everything has already been said before. Time targeting: Fed Chairman Jerome Powell Speech – 11:30 UTC ECB President Christine Lagarde Speech – 11:30 UTC U.S. Durable Goods Orders (August) – 12:30 UTC Trading plan for EUR/USD on September 27 At the moment, there is a characteristic stagnation, where the pullback stage has slowed down its formation despite the continuing technical signal about the oversold euro. In order for the pullback to be prolonged and become the starting point for a full-size correction, the quote first needs to stay above the value of 0.9700 for at least a four-hour period. At the same time, the downward scenario will become relevant again as soon as the current low is updated. Trading plan for GBP/USD on September 27 In this situation, there is still a speculative rush on the market, which allows new price jumps. In order to prolong the current pullback, the quote needs to stay above the high of the previous day at 1.0928. At the same time, the scenario of further decline will be considered by traders if the price holds below 1.0630. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.   Relevance up to 10:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/322762
Oil Is An Indicator Of The Health Of The Global Economy

Oil Is An Indicator Of The Health Of The Global Economy

InstaForex Analysis InstaForex Analysis 27.09.2022 13:09
Oil is an indicator of the health of the global economy. And if it is shaken, prices will surely fall. In this regard, the peak of Brent to the area of 9-month lows should not surprise anyone. Aggressive monetary restriction is massive, which increases the risks of a global recession. In such conditions, the demand for black gold is declining, which pushes futures quotes down. In 2022, for every central bank that cuts rates, there are 25 that raise them. +75 bps became the new norm instead of the traditional +25 bps. Regulators around the world have adopted the Fed's mantra of sacrificing their own economy to break the back of inflation. As a result, borrowing costs are mushrooming, consumer demand and GDP are slowing, and a global recession is getting closer every day. The World Bank has lowered its forecast for global economic growth from 4.5% to 3% in 2022 and from 3.2% to 2.2% in 2023. It believes that if gas prices in Europe jump by another 50%, the eurozone will face a prolonged recession next year, and its GDP will shrink by 1.3%. The specter of a looming recession is not the only driver behind Brent and WTI. An aggressive hike in the federal funds rate and a collapse in US stocks pushed the trade-weighted dollar to an all-time high. Since oil is quoted in US currency, the increase in the USD index is a bearish driver for the main grades of black gold. Dynamics of oil and US dollar The picture really looks extremely pessimistic for the Brent bulls, but they are trying to find a reason to rejoice in the sea of negativity. The market is talking about the entry into force of the embargo on Russian oil from December, the fact that OPEC's silence about the collapse in oil prices is reminiscent of the calm before the storm, and the recovery of Chinese demand. Alas, for each trump card of buyers, sellers have their own arguments. According to information from Indian oil companies, discounts on Urals oil from Russia have significantly decreased from $36 per barrel at the beginning of the armed conflict in Ukraine to "teenage" $12–14. This suggests that Moscow has managed to find new buyers, and problems with global supply will in fact turn out to be less than originally thought. According to Trafigura, the world's largest oil trader, despite the short-term weakness, the medium- and long-term prospects for black gold can become "bullish" at any moment. China's victory over COVID-19 is fraught with a surge in demand, and the lack of investment in production suggests that this demand will be difficult to meet. Technically, on the weekly chart of Brent, there are Splash and Reversal patterns with acceleration and Gartley. The breakthrough of the trend line of the Introductory stage by quotes is a wake-up call for the bulls. At the same time, when the levels of $81.5 and $74.0 per barrel are reached, the risks of a reversal will increase. In my opinion, oil should be bought on the rebound from these levels or on the breakout of the resistance at $87.6.   Relevance up to 11:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322776
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

This Morning The Pount To US Dollar (GBP/USD) Pair Recovered

InstaForex Analysis InstaForex Analysis 27.09.2022 13:21
The main event in the foreign exchange market on Monday was another steep peak of the sterling. The pound's approach to parity has caused a wave of speculation about an unscheduled rate hike by the Bank of England. Yesterday, the British currency continued its loud fall, which began last week. Paired with the dollar, sterling fell by 1.6% and tested a record low of 1.0327. Thus, since last Thursday, the pound has fallen by 5% against its American counterpart, and since the beginning of the year, the GBP/USD pair has already fallen by 21%. The reason for the current weakening of sterling is Britain's economic gambit to reduce taxes, initiated by the country's new prime Minister Liz Truss. Recall that on Friday, British Finance Minister Kwasi Kwarteng unveiled a mini-budget aimed at stimulating the economy by cutting taxes by 45 billion pounds. The financial plan had the effect of an exploding bomb. Markets are concerned that the largest tax cut program since 1972 will further spur inflation in the country. That is why the British currency did not receive any benefit from the next rate hike that occurred last week. Like most major central banks, the BoE continues to actively fight high price growth by raising interest rates. At its September meeting, the central bank increased the indicator by 50 bps, to the highest level since 2008 at 2.25%. But now that inflation expectations have jumped again, this increase is clearly not enough to curb record price growth. On the wave of pessimism, the pound set a new anti-record on Monday. However, active speculation about an unscheduled rate hike by the BoE brought it back to life a bit. This morning, the GBP/USD pair recovered to 1.0770, which was facilitated by BoE Governor Andrew Bailey's comment from the day before. Last night, the official said that the central bank is closely monitoring what is happening in the financial markets. If necessary, the MPC can change interest rates without hesitation. – As much as it is necessary for a steady return of inflation to the target of 2% in the medium term, – he stressed. In addition, the pound received support amid an incredible surge in the yield of 2-year and 5-year British government bonds. The indicator increased by 100 bps for two trading days. This suggests that in the light of recent events, the market has revised its forecasts for the future monetary policy of the BoE. There was an opinion that the British central bank could urgently raise rates without waiting for its next meeting, which is scheduled for November 3. – The Bank of England will have no choice but to raise interest rates if Truss and Kwarteng do not retreat, – said economist Mohamed El-Erian. – Moreover, it will be necessary to increase the indicator by a full percentage point in order to try to stabilize the situation. Today's speech by Huw Pill, Chief Economist of the BoE can shed light on the future plans of British politicians. If his comment turns out to be more hawkish, it will help the GBP/USD pair to move further away from the parity line. Otherwise, the asset may tickle the nerves of pound bulls again. – Without timely political action this week, sterling risks quickly falling below parity, – analyst Lee Hardman predicts. Also, do not forget that the GBP/USD pair is under strong pressure from any news indicating the Federal Reserve's determination regarding interest rates. One of the powerful triggers is expected just today. Fed Chairman Jerome Powell will deliver a speech on Tuesday. If he again hints at a more aggressive policy of the US central bank, this will give the dollar a new growth impulse, which means that the pound will have to retreat. But be that as it may, most analysts are inclined to believe that the British currency will remain in the zone of increased volatility this week. Now we can expect strong jumps both in one direction and in the other.   Relevance up to 09:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/322746
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

Sell-off In Oil Prices Added To The Pressure On Canadian Dollar (CAD)

Saxo Bank Saxo Bank 27.09.2022 13:25
Summary:  The Bank of England’s response to the downdraft in sterling since late last week was rather lacking, as the bank merely indicated it will address the situation at the next regularly scheduled meeting. They may not have that luxury unless this brightening of global risk sentiment that has materialized overnight has legs. Elsewhere, traders continue to steer clear of challenging Japan’s Ministry of Finance on intervention despite a fresh surge in US treasury yields yesterday. FX Trading focus: Bank of England response to sterling crisis rather muted, but a broad sentiment shift might keep them off the hook near term. The Bank of England’s response yesterday to the enormous downdraft in sterling was not as dramatic as those looking for a kneejerk hike this week might have expected. The Bank issued a short statement, which merely indicated that it is aware of what the government is doing and will take that and sterling’s moves into consideration at the next regularly scheduled meeting on November 3. Perhaps the phrase that it “will not hesitate to change interest rates by as much as needed to return inflation to the 2% target” that saved sterling from a further pounding just yet. There are two ways to look at this: the BoE doesn’t want to be seen as panicking and jerked around by market developments. On the other hand, it would have been more hawkish to avoid mention of the next regularly scheduled meeting to suggest that we might infer a rate hike is possible at any time if the sterling volatility worsens again. In support of sterling, the overall rate expectation for the November 3 meeting remains pinned just below 150 basis points this morning, a very large rate hike indeed when your policy rate is 2.25%. We may not have seen the cycle low in sterling, but in the nearest term, a rally in risk sentiment can keep sterling in consolidation mode tactically after the trauma of the last couple of sessions. Chart: USDCADRemarkable to see USDCAD extending the rally yesterday at an even more rapid pace than the one established over the last couple of weeks, the kind of price action one often associates with at least a temporary climax in the trend. A fresh sell-off in oil prices added to the pressure on CAD and NOK as well. But that trend has extended so far and so quickly that the USDCAD pair can easily retrace to 1.3500 without meaningfully softening the up-surge, and today’s price action suggesting we may avoid a correction even to that level. Since the early 2000’s, USDCAD has only traded above yesterday’s 1.3800+ highs on two occasions – for a couple of months when oil collapsed during the pandemic outbreak in the spring of 2020 and during a short episode during the USD peak of late 2015/early 2016. The coming recession may prove more vicious in Canada relative to the US, given very elevated private debt levels in Canada, much of it associated with housing. Mortgage financing is generally 25 year mortgages that roll every 5 years. That 5-year mortgage rate has risen to levels similar to the US 30-year rate around/above 6%. In the US, the vast majority of mortgages are 30-year fixed, meaning no real impact for most homeowners who are staying put with existing mortgages, but a far faster and greater impact on Canadian mortgage holders who must roll to the new and suddenly vastly higher rates. As discussed in this morning’s Saxo Market Call podcast, it will be very interesting to watch the evolution in the US Consumer Confidence survey of the spread between the Present Situation and Expectations components, which reached their lowest levels since 2001 in July. The latest September survey is up today. Typically this spread bottoms out and is rising quickly as the US economy is tilting into recession. As this survey is historically closely correlated with the labor market, any rise in the spread would likely be preceded by a couple of months of clearly rising jobless claims. On that front, we hit record lows in claims (adj. for population) back in March, followed by a significant surge into July. Since then, the lower claims suggest a still-strong labor market, but another turn and rise above a 250k weekly run puts us on a countdown toward a recession and peak Fed tightening expectations. We are likely at an inflection point in Q4 as the real wear on the economy from policy tightening is picking up pace, given the 9-12 month lag of policy, which may be more compressed this time given the vicious pace of the tightening once it got underway. It’s remarkable to recall that the Fed only achieved lift-off from effective zero in March, with treasury yields beginning to surge, however, already in late 2021 and accelerating higher in January. Table: FX Board of G10 and CNH trend evolution and strength.Nothing much new here, but the readings are extreme in USD strength and GBP weakness, while development around the edges are interesting, including whether the broad JPY bounceback can hold and the degree of relative weakness in CNH as the key 7.20 level approaches in USDCNH and the jockeying amongst the G-10 smalls. Table: FX Board Trend Scoreboard for individual pairs.NOKSEK is pressing on a major level at 1.0500 as cratering oil prices and crazy messaging from the Norges Bank have NOK under pressure – crazy volatility in today’s session, by the way. Elsewhere, note the pump and reversal in AUDNZD – was that at least a temporary top for now there? Upcoming Economic Calendar Highlights 1100 – UK Bank of England Chief Economist Pill to speak 1100 – ECB's Villeroy to speak 1130 – Fed Chair Powell to speak on digital currencies 1230 – US Aug. Preliminary Durable Goods Orders  1300 – US Jul. S&P CoreLogic Home Prices 1355 – US Fed’s Bullard (voter 2022) to speak 1400 – US Sep. Consumer Confidence 1400 – US Aug. New Home Sales 1700 – US 5-year Treasury Auction 1700 – US Fed’s Kashkari (voter 2023) to speak 2350 – Japan Bank of Japan meeting minutes 0130 – Australia Aug. Retail Sales    Source: https://www.home.saxo/content/articles/forex/fx-update-boe-response-rather-muted-but-big-hikes-still-baked-in-27092022
The Collapse Of The Silicon Valley Bank Weakened The Dollar And USD/JPY But Supported EUR/USD, AUD/USD, And GBP/USD

Will The Dollar's (USD) Situation Change And Start Falling?

InstaForex Analysis InstaForex Analysis 27.09.2022 13:34
Technical outlook: The US dollar index rallied through 114.10 during the New York session on Monday before finding resistance again. The index slippped lower and is seen to be trading close to the 113.40 mark at this point in writing. Prices oscillated within the range of 113.00-114.00 in the last 24 hours, thus raising probabilities for a drop towards 110.00. The hourly chart presented here also projects a potential drag towards the 110.00-20 mark, the initial support level. Immediate resistance or a top is seen at 114.35 and prices should stay lower to keep the bearish structure intact. A break below 112.90 from here will accelerate a further decline towards 111.90 in the near term. Going further, a real drop below the 110.17 initial support will confirm that bears are back in control and a deeper correction could be on its way. Only a consistent break above the 114.35 mark from here will bring back bulls into control and nullify the bearish scenario. Watching for prices to break below 112.90 for acceleration lower towards 110.20. Trading plan: Preparing for a potential drop towards 110.20 against 114.50 Good luck!     Relevance up to 12:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294414
The Recent Rally Of Bitcoin Had Been Capped, The Digital Yuan (eCNY) Has Received Upgrades

A Technical Look At The Bitcoin Situation, Bitcoin Jumped Sharply

InstaForex Analysis InstaForex Analysis 27.09.2022 13:42
Technical outlook: Bitcoin jumped sharply towards the $20,200-300 area intraday on Tuesday, after testing the $18,700 lows over the weekend. The crypto has appreciated by around 8% in the last two trading sessions in line with our forecast. It is seen to be trading close to $20,225 at this point in writing and has got room left towards $21,000 at least in the near term. Bitcoin is facing immediate price resistance at around $22,800 and a break higher will open the door to re-test $25,000 and target up to $29,500 in the next several trading sessions. Also, turn attention to the immediate resistance trend line connecting $25,000 and $22,800 highs on the chart. A push through will further confirm that the bulls are back in control. Bitcoin will be facing some resistance at around $20,900 in the near term, which is the Fibonacci 0.618 retracement of recent drop between $20,800 and $18,200. A break through $20,900 will be another confirmation that the bulls are poised to push through near-term resistance and target towards the $29,500 mark. Trading idea: Potential rally towards $29,000 against $18,000 Good luck!   Relevance up to 13:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294417
Gold Stocks Have Performed Very Well Under Pressure

Price Of Gold Is Now Bouncing Higher But Trend Remains Controlled By Bears

InstaForex Analysis InstaForex Analysis 27.09.2022 14:48
Red lines- bearish channel As expected by our previous analysis, Gold price revisited the $1,626 level and made a new lower low at $1,620 which was our initial target level. Price is now bouncing higher towards $1,640. Gold price remains inside the short-term channel but there are increased chances of a bounce towards $1,660-70. The RSI did not make new lows as price did providing a bullish divergence. This is not a sign of reversal, but a sign that tells us that there are increased chances of a move higher towards the upper channel boundary. Trend remains controlled by bears. Relevance up to 14:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294436
Bitcoin's Volatility Continues: Failed Breakout and Accumulation Signal Positive Outlook

Bitcoin Is Still Under Bearish Pressure And The Growth Was Nothing Important

InstaForex Analysis InstaForex Analysis 27.09.2022 14:53
Red lines- bearish channel Bitcoin has broken above it's short-term resistance of $19,500 and is trading again above the $20,000 price level. This short-term push higher by its own is nothing important. Looking at the weekly chart price remains inside the weekly downward sloping channel and below its upper boundary. In order for Bitcoin bulls to have hopes for a bigger move higher towards $30,000, we need to see price break above the resistance of $22,800 and start making higher highs and higher lows. The $22,800-$23,500 zone is important resistance that bulls need to break in order to change short-term trend. Until then price will remain vulnerable to more downside.   Relevance up to 14:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294440
Escalating Russia-Ukraine Tensions Amplify Oil Supply Risks: The Commodities Feed

The EUR/USD Pair Has No Sign Of A Major Low Or Major Reversal

InstaForex Analysis InstaForex Analysis 27.09.2022 15:03
Red lines- medium-term bearish channel Blue lines- short-term bearish channel EURUSD is trading around 0.9640 after making a low around 0.9554. Medium-term trend and short-term trend remains bearish. Price is inside both the medium-term and the short-term bearish channels. Price is bouncing off the lower channel boundaries and there is potential for a move towards 0.9775. With the RSI turning higher from oversold levels, there are increased chances that the next couple of sessions we see a bounce higher towards the channel boundary. A break above 0.9775-0.98 could imply that a bigger bounce towards 1.02 is possible. We continue to consider each bounce as a selling opportunity. Trend remains controlled by bears. There is no sign of a major low or major reversal.     Relevance up to 14:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294434
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The EUR/USD Pair: There Is Nothing New In This Market, It Is Not Bullish Yet

InstaForex Analysis InstaForex Analysis 28.09.2022 08:00
Overview : Pivot : 0.9740. The US dollar's strong gains against the Euro have continued today ahead of the sturdy news. The common currency reached a high of more than three days earlier this morning. This technical analysis of EUR/USD looks at the one-hour chart. The highest price that EUR/USD reached for that period was 0.9961 (last bullish wave - top). The lowest price that the EUR/USD pair reached during that period was 0.9845 (right now). The bias remains bearish in the nearest term testing 0.9800 or lower. Immediate support is seen around 0.9800. A clear break below that area could lead price to the neutral zone in the nearest term. Price will test 0.9750, because in general, we remain bearish on Sept. 21st, 2022. Yesterday, the market moved from its top at 0.9961 and continued to drop towards the top of 0.9814. Today, on the one-hour chart, the current fall will remain within a framework of correction. However, if the pair fails to pass through the level of 0.9961 (major resistance), the market will indicate a bearish opportunity below the strong resistance level of 0.9961 (the level of 0.9961 coincides with tha ratio of 38.2% Fibonacci retracement). The EUR/USD pair settled below 0.9961 and is testing the support level at 0.9800. RSI and Moving averages continue to give a very strong sell signal with all of the 50 and 100 EMAs successively above slower lines and below the price. The 50 EMA has extended further below the 100 this week. Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength below the moving average (100) and (50). An alternative scenario is a final consolidation below MA 100 H1, followed by growth arund the area of 0.9905. The one-hour chart favors a downward extension, as the pair broke below its 50 and 100 EMAs, both gaining downward traction. Support from MAs comes initially from the value zone between the 50 and 100 EMAs. Industriously, Euro Is Losing ground against U.S. Dollar around +185 pips. Since there is nothing new in this market, it is not bullish yet. Sell deals are recommended below the level of 0.9961 with the first target at 0.9814 so as to test the double bottom. If the trend breaks the double bottom level of 0.9814, the pair is likely to move downwards continuing the development of a bearish trend to the level of 0.9750 in order to test the weekly support 2. According to the previous events the price is expected to remain between 0.9905 and 0.9750 levels. Sell-deals are recommended below the price of 0.9905 with the first target seen at 0.9814. The movement is likely to resume to the point 0.9750. The descending movement is likely to begin from the level 0.9750 with 0.9725 and 0.9700 seen as new targets in coing hours. On the other hand, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1 USD.   Relevance up to 01:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294502
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

The Price Of The Pound To US Dollar Pair (GBP/USD) Is In A Bearish Channel Now

InstaForex Analysis InstaForex Analysis 28.09.2022 08:04
Overview : The British pound has weakened against the US dollar since the beginning of this week. That's the British pound (GBP) has fallen over 2.5% against the US dollar (USD) since the start of the week, which is significant, especially since these are the two major currencies of the world. The drop has also concentrated in this week. The GBP/USD pair continues to move downwards from the level of 1.1589. Yesterday, the pair dropped from the level of 1.1589 (this level of 1.1589 coincides with the ratio of 61.8%) to the bottom around 1.1349. The GBP/USD pair is part of a very strong bearish trend. Traders may consider trading only short positions (for sale) as long as the price remains well below 1.1497. The next support located at 1.1349 is the next bearish objective to target. A bearish break of this support would revive the bearish momentum. The bearish movement could then continue towards the next support located at 1.1349. Below this support, sellers could then target 1.1349. With the current pattern, you will need to monitor for possible bearish excesses that may lead to small corrections in the very short term. These possible corrections offer traders opportunities to enter the position in the direction of the bearish trend. Trying to profit from the purchase of these possible corrections may seem risky. Today, the first resistance level is seen at 1.1497 followed by 1.1543, while daily support 1 is found at 1.1349. Also, the level of 1.1497 represents a weekly pivot point for that it is acting as major resistance/support this week. Support becomes a resistance at the level of 1.1497. The GBP/USD pair fell with UK inflation elevated and still rising, the cost of living crisis taking hold, growth slowing and ongoing Brexit woes, the outlook for the pound is deteriorating. Meanwhile, the USD is supported by safe-haven flows and hawkish Federal Reserve (Fed) bets. Amid the previous events, the pair is still in a downtrend, because the GBP/USD pair is trading in a bearish trend from the new resistance line of 1.1380 towards the first support level at 1.1349 in order to test it. If the pair succeeds to pass through the level of 1.1349, the market will indicate a bearish opportunity below the level of 1.1349. The trend is still bearish as long as the price of 1.1497 is not broken. On the day, this instrument gained +0.94% with the lowest point at 1.1349 and the highest point at 1.1400. The deviation from the price is +0.95% for the low point and -0.05% for the high point. Thereupon, it would be wise to sell below the price of at 1.1497 with the primary target at 1.1349. Then, the GBP/USD pair will continue towards the second target at 1.1300. The market is indicating a bearish opportunity below the above-mentioned support levels, for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. However, the price spot of 1.1497 remains a significant resistance zone. Thus, the trend will probably be rebounded again from the second support as long as the level of 1.1497 is not breached. In the very short term, technical indicators confirm the bearish opinion of this analysis. It is appropriate to continue watching any excessive bearish movements or scanner detections which might lead to a small bullish correction. Forecast : Today, resistance is seen at the levels of 1.1497 and 1.1300. So, we expect the price to set below the strong resistance at the levels of 1.1497 and 1.1400; because the price is in a bearish channel now. The RSI starts signaling a downward trend. Consequently, the market is likely to show signs of a bearish trend. Thus, it will be good to sell below the level of 1.1497 or 1.1400 with the first target at 1.1349 and further to 1.1300 in order to test the daily support. If the GBP/USD pair is able to break out the daily support at 1.1300, the market will decline further to 1.1250 to approach support 3 in coming hours or days. On the other hand, the price spot of 1.1497 remains a significant resistance zone. Therefore, the trend is still bearish as long as the level of 1.1497 is not breached.   Relevance up to 01:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294504
The Run Higher In Japanese Yields Is Likely To Create Further Volatility In Global Markets

The Intervention Of The Bank Of Japan May Orove Futile (USD/JPY)

InstaForex Analysis InstaForex Analysis 28.09.2022 08:09
The yen's situation is unfolding in such a way that the Bank of Japan's intervention on September 22 to protect the level of 145.00 may turn out to be in vain. The price has already approached the resistance of 145.05, consolidating above which opens the 147.30 target – an embedded line of the global price channel. The Marlin Oscillator is still kept in the positive area. Obviously, the BOJ is not able to withstand the global strengthening of the dollar, although the yen has been staying at current levels for three weeks now. So, if there is no repeated intervention of the central bank close in volume to the last action (which is more likely), the pair will grow to 147.30. Support in the current situation is the embedded line of the price channel and the MACD indicator line approaching near the 141.28 mark. On the four-hour chart, the price is consolidating under the linear resistance of 145.05. Consolidation above the level will be the first sign of the price's determination to go to 147.30. The Marlin Oscillator is stable in the positive area, it managed to consolidate, probably for a breakthrough upwards.   Relevance up to 04:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322844
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

The Cable Makret (GBP/USD) And Its Possible Situation For Today

InstaForex Analysis InstaForex Analysis 28.09.2022 08:13
The British pound showed moderate growth on Tuesday. The upper shadow of the daily candle tested the strong level of 1.0830, after which the price moved down. On Wednesday morning, the price covered the white candle of the previous day. The price is now faced with a second task - to work out the level of 1.0310. On this path, the price has an intermediate target - 1.0535, there may be a slight delay here. The Marlin Oscillator has slightly discharged, although it still remains in the oversold zone. As a result, we expect a medium (1.0535) or strong correction (not higher than 1.0830) from the support at 1.0310. On the H4 chart, the price is gathering strength before an attack at 1.0535. Consolidation below the level opens the way to 1.0310. The Marlin Oscillator is turning down in front of the zero line.   Relevance up to 05:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322846
The Euro May Attempt To Resume An Upward Movement

The Euro To US Dollar Pari (EUR/USD) Is Ready To Continue Its Decline

InstaForex Analysis InstaForex Analysis 28.09.2022 08:22
The euro's consolidation at 0.9625 proved to be short-lived. Yesterday it closed under this level, which showed the price consolidating below it and revealed the euro's plan - to attack 0.9520 and try to reclaim 0.9404. The Marlin Oscillator has slightly corrected up and sideways, it is ready to continue its decline. On the four-hour chart, the price also looks fixed below the level of 0.9625, the Marlin Oscillator has discharged from the oversold zone, now it is ready to resume the local downward trend.     Relevance up to 05:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322848
PLN Soars to Record Highs Ahead of NBP Decision

The EUR/USD Pair: The Potential Downside Should Be Very Limited

InstaForex Analysis InstaForex Analysis 28.09.2022 08:31
EUR/USD tested the upper part of our target zone between 0.9507 - 0.9547. As long as resistance at 0.9709 is able to cap the upside, we could see EUR/USD trying to push lower towards the lower part of our target zone. However, the potential downside should be very limited from here. A break above resistance at 0.9709 will be a strong indication that wave II or B has completed and wave III or C will be unfolding for an ultimate break above the top of a wave I or A at 160.08.     Relevance up to 06:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294514
Metals Update: Gold Demand Declines Marginally, Copper and Aluminium Positions Adjusted

Will The GBP/USD Pair Continue Downward Pressure?

InstaForex Analysis InstaForex Analysis 28.09.2022 08:35
GBP/JPY rallied to our expected target at 154.41 and then to a peak of 157.20. This is more than enough to fulfill the corrective target and see the final wave lower towards the 61.8% corrective target at 145.76 to complete the corrective decline from 168.43. Once this correction is complete we should see another impulsive rally above the peak at 168.43 for a run towards 180.50. In the short term, a break below 153.45 confirms renewed downside pressure towards the expected corrective target at 145.76.     Relevance up to 06:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294516
Precious metals: ING forecasts gold price to finish end the year at $1,855

Gold Made A Brief Recovery But It Failed And Changed Course

InstaForex Analysis InstaForex Analysis 28.09.2022 08:39
Since the beginning of August, gold (XAU/USD) has been trading inside a downtrend channel. It is likely to find support around 0/8 Murray (1,625). Gold reached the low of April 05, 2020, at 1,621.01. It is currently trading near these levels and is showing levels of consolidation. Some members of the FED are supporting further increases in interest rates, even at the risk of slowing economic growth. On Friday, the president of the Federal Reserve Bank of Philadelphia said that he believed that the US central bank could reduce inflation without causing a deep recession and high unemployment. Yesterday, in the American session, gold made a brief recovery and reached 1,642.33. As it failed to consolidate gains, it changed course and now is facing a decision to break the critical support of 1,625. In the event of a drop below 1,624, it will head towards the next level of 1,610 and could even drop towards the psychological level of 1,600. Conversely, a sharp break above the 21 SMA could accelerate the upside momentum and the price could reach the top of the downtrend channel around 1,656-1,662. According to the 4-hour chart, the outlook remains negative for gold. In case of extending the bounce, the resistances could be located at 1,641, followed by 1,656. A drop below 1,625 in the short term would expose the area of recent lows and the next support at 1,600. Our trading plan for the next few hours is to buy XAU/USD only if it trades above 0/8 Murray (1,625) or if there is a technical bounce off the bottom of the downtrend channel around 1,600. With targets at 1,625,1,645 and 1,656.   Relevance up to 06:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294520
The EUR/AUD Pair May Have The Potential To Continue Its Decline

The Euro-Dollar Pair (EUR/USD) Pair Maintains A Downward Trend

InstaForex Analysis InstaForex Analysis 28.09.2022 08:46
The EUR/USD currency pair traded more calmly on Tuesday than on Monday. Volatility has fallen, so we can talk about the passage of the state of shock that was present on the market on Monday. In principle, the technical picture for the euro currency has not changed at all and has not changed for a very long time. On the 4-hour TF, the pair still shows some meager corrections from time to time, but if we switch to the 24-hour TF, we see a non-stop downward movement. It is very difficult to predict how long this movement will continue since it will largely depend on the geopolitical conflict in Ukraine, development, and various related factors. So far, the market, we can say, is still in a state of panic after Vladimir Putin announced the mobilization in Russia. A huge number of experts of various stripes immediately began to predict what all this would be. Not even for the Russian economy or the development of the conflict in Ukraine itself. What will this mean for the global economy? First, many have started talking about nuclear war again. It is not surprising since world leaders have begun to pamper us directly with regular statements that they are ready to press the "red button" if necessary. How should the markets feel if everything can end at any moment? Second, mobilization means that in the near future, there will be no peace talks, no freezing of the conflict, nor its transition into a sluggish confrontation, which the markets would certainly like. Third, the issue of referendums and the speech of the President of the Russian Federation on September 30, at which, most likely, the phrase about the annexation of all occupied territories to Russia will be heard. Kyiv and the West have already stated that Moscow can annex whatever it deems necessary. Still, from the point of view of international law, these lands remain Ukrainian, which means that the Armed Forces of Ukraine have every right to go on the offensive. At the same time, Moscow says that any attack on Russian lands gives grounds to use nuclear weapons to protect them. Thus, already in October, the geopolitical situation may seriously escalate. Of course, all this news is shocking for risky currencies, and we believe that the euro and the pound can safely continue their decline. Christine Lagarde's speech is nothing new. On Monday and Tuesday, two consecutive performances by Christine Lagarde took place at once. We have already said earlier that it simply does not make sense to expect any new statements from the head of the ECB now. At the September meeting, Lagarde made it clear that the regulator would continue to raise the rate at a high rate until the end of the year. It is from this phrase that we should start. This week, she said that the rate would rise in any case, even despite the decline in economic and business activity. Of course, such measures will be taken to suppress high inflation as quickly as possible. Nothing new. Lagarde also noted that the support for European households and businesses may have been too voluminous (probably referring to the QE program during the pandemic), so the return of inflation to 2% may take longer than expected. Thus, we can be sure that the rate will continue to rise, which would undoubtedly support the European currency if we did not clearly understand what is happening worldwide and in the markets. The ECB rate will remain below the Fed rate for a long time. This is the first factor in the further fall of the euro against the dollar. The geopolitical conflict, new sanctions against the Russian Federation, which work both ways, high oil and gas prices, and potential refusals of the European Union to purchase oil and gas in Russia will continue to put pressure on the euro, not on the dollar. The states are far away, at least self-sufficient in energy, and the European conflict does not threaten them in any way. Of course, in the event of a nuclear war, everyone will get it, but in this case, we will no longer sit and analyze the foreign exchange market. And while we are still doing this, we would say that the probability of the pair continuing to fall is very high. The average volatility of the euro/dollar currency pair over the last five trading days as of September 28 is 138 points and is characterized as "high." Thus, on Wednesday, we expect the pair to move between 0.9488 and 0.9764 levels. The upward reversal of the Heiken Ashi indicator signals a round of upward correction. Nearest support levels: S1 – 0.9521 Nearest resistance levels: R1 – 0.9644 R2 – 0.9766 R3 – 0.9888 Trading Recommendations: The EUR/USD pair maintains a downward trend. Thus, it would be best if you stayed in short positions with targets of 0.9521 and 0.9488 until the Heiken Ashi indicator turns up. Purchases will become relevant no earlier than fixing the price above the moving average with a target of 0.9888. Explanations of the illustrations: Linear regression channels help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) determines the short-term trend and the direction to trade now. Murray levels are target levels for movements and corrections. Based on current volatility indicators, volatility levels (red lines) are the likely price channel in which the pair will spend the next day. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 02:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322840
UK GDP Already Falling And Continuing To Do So For This Calendar Year, Copper Is Still Within A Tightening Range

A Vote Of No Confidence In The New UK Prime Minister And The Pound's (GBP) Situation

InstaForex Analysis InstaForex Analysis 28.09.2022 08:50
The GBP/USD currency pair also traded more calmly on Tuesday than on Monday. Some recovery has begun, but it is still very difficult to call this upward movement even a "correction." Rather, it is not even a rollback but a rebound. The market faced a serious level of support several hundred points from the price parity, so stop orders and take profit worked, which led to a sharp departure of quotes. Recall that the collapse occurred after the new Finance Minister, Kwasi Kwarteng, presented a plan for economic recovery in Parliament, which implied a reduction in several tax rates and the abolition of some tax increases. After that, the yield of UK Treasury bonds shot up, which means a drop in demand for this type of security. And along with this, massive sales of the pound followed, which were observed before the statements of Kwarteng. Thus, the pound fell before the presentation of the recovery plan, the Bank of England meeting, and the Fed meeting. What has changed, other than that the fall has just accelerated? Accordingly, we can conclude that there are plenty of reasons for the market to get rid of the pound as soon as possible, not just one or two. After all, do not forget about geopolitics, which puts pressure on risky currencies. Do not forget about the British recession, which can last two years, if not more. Do not forget about Brexit, which continues to harm the GDP. It is even difficult for us now to guess where the pound may fall. On the one hand, a strong rebound of quotations from the level of 1.0358, now the new absolute minimum of the pair, may mean a transition to forming a new upward trend. But it will take a week or two to determine whether this is true. After all, given the geopolitical or fundamental background, the market may decide to resume sales! A couple of weeks ago, we jokingly said that the pound would also go below parity at this rate. As you can see, now it's not a joke. The pound has set a record. Meanwhile, Britain continues to show that it cannot live without scandals and controversial political decisions and cannot help but create problems for itself. Liz Truss took office as Prime Minister on September 6. On September 27, it became known that some conservatives had begun sending letters to a special committee that could begin the procedure for issuing a vote of no confidence. That is, 21 days after the Conservatives chose Liz Truss as their leader, they have already begun voting to remove her from office. This is a political pun. Naturally, it all started with that notorious recovery plan, which implies tax cuts. It is reported that some parliamentarians seriously believe this plan could destroy the British economy, which is already on the verge of recession. Although it is not clear to us personally, what exactly is the problem with Liz Truss, who, even at the first stages of voting, clearly spoke about her desire to lower taxes? And for the UK, such a measure is by no means an apocalypse, and taxes have been reduced before, in difficult times for the country and its citizens. However, there is a feeling that the tax cuts affect the interests of those conservatives who did not want to see Truss at the helm of the country but voted for Rishi Sunak, who was just against lowering tax rates. There is no unity within the Conservative Party now, not to mention the entire British government. If this is true, opponents will not succeed since the number of conservatives who voted for her is greater than those who voted for Sunak. And if it comes out, Liz Truss will set a record for short-term tenure as prime minister. This event is remarkable, and we will have something to watch for in the near future while the pound sterling is going to the bottom. The average volatility of the GBP/USD pair over the last five trading days is 299 points. For the pound/dollar pair, this value is "very high." On Wednesday, September 28, thus, we expect movement inside the channel, limited by the levels of 1.0477 and 1.1077. The reversal of the Heiken Ashi indicator downwards signals the resumption of the downward movement. Nearest support levels: S1 – 1.0498 S2 – 1.0254 S3 – 1.0010 Nearest resistance levels: R1 – 1.0742 R2 – 1.0986 R3 – 1.1230 Trading Recommendations: The GBP/USD pair is still being adjusted in the 4-hour timeframe. Therefore, at the moment, new sell orders with targets of 1.0498 and 1.0477 should be considered if the Heiken Ashi indicator turns down. Buy orders should be opened when fixed above the moving average with targets of 1.1230 and 1.1475. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction to trade now. Murray levels are target levels for movements and corrections. Based on current volatility indicators, volatility levels (red lines) are the likely price channel in which the pair will spend the next day. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 02:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322842
The G20 And IMF Are Already Preparing Their Crypto Regulation

Michael Saylor Statements That Cryptocurrency Is Better Than Physical Property

InstaForex Analysis InstaForex Analysis 28.09.2022 08:59
On the 4-hour TF, it is even better to see that recently, bitcoin has been moving exclusively sideways, with minimal volatility and exactly along the $18,500 level. Another rebound from this level provoked an upward pullback, but we believe this is an oversold before a new test of the $ 18,500 level, which will be successful this time. Recall that there is also a descending channel on the 4-hour TF, from which the price has not yet tried to exit. Consequently, we have a downward trend in both senior TF. A rebound from the channel's upper border can provoke a new round of downward movement. In the last article, we discussed that "whales" are in no hurry to make new bitcoin purchases, and "hamsters" are waiting for a new trend to join. However, at least one unshakable "whale" is always on the market. We are talking about the Microstrategy company, which, it seems, will soon start selling off its assets and parts of the business to invest in bitcoin. This company may become commensurate with Apple or Tesla, thanks to its investments in cryptocurrency. However, so far, it only makes many people laugh. If we take the average price of bitcoin purchases, MicroStrategy investments are now unprofitable. Whether there will be a new "bullish" trend is still "written with a pitchfork on the water." The world is now in such a state that it is pointless to think of anything for the week ahead. However, Michael Saylor, who is no longer CEO, announced the purchase of another 300 bitcoin coins for $ 6 million. As you can see, this action was not so large that other market participants joined the purchases. The company already has 130,000 bitcoin coins worth $ 4 billion, and I would like to ask why they still need the main software development activity. If bitcoin grows to $ 100,000 per coin, it will bring the company at least $ 16 billion in profit. Also, Michael Saylor continues to make rather strange statements that cryptocurrency is better than physical property. Many of those coins being purchased now will be owned by their children and grandchildren. However, most investors buy bitcoin to extract the fastest possible profit. In any case, even if Bitcoin goes into growth again, technical buy signals are needed. There are none now. In the 4-hour timeframe, the "bitcoin" quotes completed an upward correction. We believe the decline will continue in the medium term, but we must wait for the price to consolidate below the $17,582-$18,500 area. If this happens, the first target for the fall will be the level of $ 12,426. The rebound from the level of $18,500 (or $17,582) can be used for small purchases, but be careful – we still have a strong downward trend.   Relevance up to 16:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322820
The Euro To US Dollar (EUR/USD) Pair Moved Without Panic But Now No One Is Thinking About Buying The Euro

The Euro To US Dollar (EUR/USD) Pair Moved Without Panic But Now No One Is Thinking About Buying The Euro

InstaForex Analysis InstaForex Analysis 28.09.2022 09:06
EUR/USD 5M The euro/dollar pair moved without panic on Tuesday. Volatility was already "medium" in strength, and there were no strong jerks and sharp reversals. We can see that the market is slowly moving away from the news of last week, but we would not advise you to relax. Now the situation in the world is such that you absolutely do not know and do not understand where the next "smart" news will come from, after which a new "storm" will begin. If we return from geopolitics to economics, the first two days of the week were remembered only by the speeches of European Central Bank President Christine Lagarde, who, in short, assured the markets of her readiness to continue raising the key rate in order to effectively and quickly fight high inflation. This could be great news for the euro if the market didn't care about macroeconomics right now. The minds of traders and investors are busy with geopolitics, the development of the conflict between Ukraine and Russia and a possible nuclear war. In this state, they can continue to sell all risky assets and currencies, to which the euro belongs. In regards to Tuesday's trading signals, the situation was as simple as possible, since not a single one was formed. It is even difficult to say whether this is good or bad, since the movements are now clearly uneasy and unstable. During the day, the pair did not approach either the critical line or the extreme level of 0.9553. There are very few levels in the current price area. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial traders, but at the same time, the euro fell steadily. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not provide any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 28. The euro still does not understand how to start growing. Geopolitics may still put pressure on the pair for a long time. Overview of the GBP/USD pair. September 28. Theresa May is out, Boris Johnson is out, now Liz Truss is out? How much longer will the political turmoil in Britain continue? Forecast and trading signals for GBP/USD on September 28. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The bears' prospects remain just fine on the hourly timeframe, given that now no one is even thinking about buying the euro. Therefore, with or without new data, with or without news, with or without reports, the euro may continue to fall. There may be some easing of tension after September 30, but there could also be a reverse effect. We highlight the following levels for trading on Wednesday - 0.9553, 0.9813, 0.9877, 0.9945, 1.0019, as well as Senkou Span B (1.0002) and Kijun-sen (0.9747). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. Lagarde will deliver another speech in the European Union, which is unlikely to affect anything, and there will be nothing interesting at all in America. However, the market is now waiting for news of a completely different kind, not economic. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322836
Inflation Outlook: Energy Prices Drive Hospitality, Food Inflation Eases

The GBP/USD Pair Was Trading Calmly But The Volatility Still Remained Very High

InstaForex Analysis InstaForex Analysis 28.09.2022 09:12
GBP/USD 5M The GBP/USD currency pair was trading more calmly on Tuesday, but the volatility still remained very high, almost 200 points. Late in the evening, a new powerful fall began, which may well turn out to be a new round of the collapse of the British currency. No important statistics published in the UK on Monday or Tuesday, and there were no important events or news. Thus, we believe that the market continues to be in a panic state due to recent geopolitical events. We said that the euro may well continue its decline in the near future. And if the euro can, then the pound even more so... Therefore, a lot depends on what news of a geopolitical nature will come from Russia, Ukraine, NATO countries and the European Union. Unfortunately, the forecasts are not optimistic yet. Everything is going to the fact that the geopolitical conflict will continue to grow. Not a single trading signal was formed on Tuesday. The price was only getting close to the critical line, but could not work it out. It's a pity, because a strong sell signal could be formed. However, the nature of the movements now is such that it may be better not to really enter the market for a while. Or trade on a higher TF, which we also analyze every day. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group closed 11,600 long positions and opened 6,000 short positions. Thus, the net position of non-commercial traders decreased by another 17,600, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new decline, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its decline has completely resumed and multi-year lows are updated almost every day, so the bearish mood of major players can only intensify in the near future. The non-commercial group now has a total of 109,000 shorts and 41,000 longs open. The difference is again almost threefold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, one should not forget about the high demand for the US dollar, which also plays a role in the fall of the pound/dollar pair. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 28. The euro still does not understand how to start growing. Geopolitics may still put pressure on the pair for a long time. Overview of the GBP/USD pair. September 28. Theresa May is out, Boris Johnson is out, now Liz Truss is out? How much longer will the political turmoil in Britain continue? Forecast and trading signals for EUR/USD on September 28. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H. The pound/dollar pair continues its downward trend on the hourly timeframe, which is already in fact a collapse. For some time the market was in a state of pause, but now it is already clear that the fall can resume with renewed vigor. We do not believe that the reasons for this fall lie in Great Britain or on the sidelines of the Federal Reserve. We believe that geopolitics is pushing the pound down and may continue to do so for a very long time. Any trend ends sooner or later, but it is very difficult to say when this one will end. We highlight the following important levels: 1.0357, 1.0930, 1.1212, 1.1354, 1.1442. Senkou Span B (1.1475) and Kijun-sen (1.0858) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. No major events scheduled for Wednesday in the UK and the US. However, the pair does not need new economic data now to keep moving ultra-volatile. We believe that high volatility may persist today, as well as in the next few days. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322838
The French Housing Market Is More Resilient | The Chance Of Republicans Winning The Senate Is Up

Optimistic Forecasts Of The French Government|Three Officials Suggested That The US May Avoid A Recession

Saxo Bank Saxo Bank 28.09.2022 09:24
Summary:  Market sentiment tipped sharply lower late yesterday after an earlier rally attempt in the US session on the news of sabotage of the Nord Stream pipelines in the Baltic sea. Elsewhere, the US 10-year treasury benchmark rose again and is pushing on the major 4.00% level, taking the USD higher and pressuring global liquidity. Adding further to weak sentiment overnight, the Chinese yuan slipped sharply lower as USDCNH broke above its longer term range highs of 7.20 established back in 2019 and 2020.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities jumped higher out of the gates in early trading yesterday, but the action faded all day and the market closed back near the key cycle support, with the S&P 500 index even posting a minor new bear market low intraday below the prior 3637 mark on the cash index, as the news of the Nord Stream pipeline sabotage (see below) weighed, and US yields and the US dollar continued their ascent. Pivotal levels here for equities as we await further developments and consider end-of-quarter flows into Friday. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Stocks traded in the Hong Kong bourse notably underperformed those in Shanghai and Shenzhen. Shares of public utilities fell from 3% to 5%.  U.K. headquartered HSBC (00005:xhkg) and Standard Chartered (02888:xhkg) continued their slide, falling 3% to 4% for the day and 9% to 11% since last Friday’s post-mini-budget turmoil in the Pound Sterling and U.K. Gilts.  Both Hong Kong and China developers plunged across the board,  mostly by 1% to 5%, with CIFI (00884:xhkg) falling over 27% and being the largest casualty in the property space.  CIFI, the 13th largest property developer in mainland China was said to have missed a payment on a project-related debt.  CSI300 fell 1%, dragged by ferrous metal, electric equipment and defence industries while banks, textiles, food and beverage stocks outperformed. Strong USD continues to rage. We have witnessed an historic move in the USD this month, with month-end and quarter-end drawing into view on Friday. Besides the massive, more than 8% meltdown in GBPUSD this month (trading sub-1.0700 this morning), a pair like AUDUSD has lost over 6.5% as of this morning’s exchange rate. The question soon has to be: when does this strong USD finally “break something” and bring an official response, whether coordinated or unilaterally from the Fed or the US Treasury? So far, there seems no sense of emergency, judging from comments yesterday by US National Economic Council director Brian Deese, who pushed back against the idea that the a Plaza Accord-like deal is under consideration. USDCNH reaches all-time highs, intensifying strong USD story. The strong US dollar finally took USDCNH above the 7.20 area that defined major tops on two prior occasions in 2019 and 2020. The exchange rate traded as high as 7.239 overnight, the highest in the history of the offshore CNH currency. USDCNY has not traded this high since early 2008. The move comes ahead of a major holiday next week in China, with markets closed for the entire week, which will leave markets in limbo next week as USDCNY won’t trade. Gold (XAUUSD) remain under pressure from the stronger US dollar and rising US treasury yields, perhaps showing resilience at the margin given that the precious metal failed to post new lows for the cycle yesterday or today even as the USD surges to new highs elsewhere. The next focus is perhaps the round 1,600 level if the selling continues. Crude oil (CLU2 & LCOV2) recovers, European natural gas surges. Crude oil shifted focus back on supply worries with curbs in the U.S. Gulf of Mexico ahead of Hurricane Ian and with reports that Russia is pushing for the OPEC+ alliance to cut production. The group of oil producing nations is due to meet early next month to discuss its production plans. They already announced a cut to output for October by 100kb/d and have warned of further reductions amid falling prices. There has been reports that Russia is pushing for a cut to output of at least 1mb/d. Meanwhile, a pause in USD rally also helped to put a floor to the declines in commodity prices. WTI futures rose but still remained below $80/barrel while Brent futures were above $86. US treasuries (TLT, IEF) US treasury yields rose once again after a brief and relatively sharp stumble yesterday, taking the 10-year yield to the symbolic 4.00% yield. It is worth noting that large round numbers on the yield often provide sticking points – for example, the 3.50% defined the top in June. Is this an important cycle top in yields or can they continue to power higher. The 4.00% level was also the stop for much of late 2008 and 2009. Yesterday saw a weak 5-year treasury auction despite the high yields. What is going on? Nord Stream pipelines severed, presumably an act of sabotage. Enormous upwellings of gas in the Baltic along the Nord Stream 1 and Nord Stream 2 pipelines in the Baltic Sea and detection of seismic activity that resembled explosions rather than earthquakes suggest that the pipelines were sabotaged to prevent the delivery of gas to Germany from Russia. The Nord Stream 2 pipeline was never operational, and the Nord Stream 1 deliveries had recently ceased. EU commissioner joined others in pointing the finger at Russia for the action, promising “the strongest possible response” if it is confirmed that Russia is behind the action. The development saw European natural gas jumping more than 22%, with Gazprom also issuing sanction warnings for Ukraine’s Naftogaz, which would prevent it from being able to pay transit fees, and therefore put at risk whatever little gas is still flowing to Europe via Ukraine. Fed officials continue with a united hawkish voice. While inflation and higher-for-longer interest rates remain a key theme in all Fed commentary these days, there is also another common theme emerging. All three officials on the wires yesterday – Kashkari, Bullard and Evans – suggested that the US may avoid a recession. Kashkari (2023 voter), in an interview with WSJ, said he’s unsure if the policy is tight enough suggesting more rate hikes will be needed to bring down inflation. Bullard (2022 voter) said the US has a serious inflation problem and the credibility of the inflation targeting regime is at risk. Evans (non-voter) is optimistic the terminal rate the Fed has set out (4.6% median in Dot Plot) will be restrictive enough. France releases ‘rosy’ economic forecasts for 2023. Yesterday, the French government published its economic forecast for 2022-23 as part of the parliamentary debate on the 2023 debate. The forecasts are overly optimistic. The Ministry of Finance expects that household investment (which mainly consists of the purchase and renovation of dwellings) will increase by 0.6 point over 2022-23 despite a jump of 250 basis points in the 10-year government bond yield and falling (or at best stagnant) purchasing power. We are a bit skeptical. We think that a sharp decrease in real estate prices is one of the less mentioned risks in France for 2023. This will be something to monitor very closely. It could seriously deepen the expected recession. USDJPY testing 145, but yen crosses lower. Bank of Japan released the meeting minutes from the July meeting, understandably stale, but continuing to signal that easing intentions remain prevalent. Despite a further run higher in US Treasury yields with the 10-year touching the 4% mark, USDJPY has still remained capped below 145. More importantly, the yen is stronger against the EUR, GBP and AUD since the intervention on 22 September, and the contrast with the struggling CNH is particularly notable. The World Bank downgraded its growth forecasts for China while upgrading the growth of Vietnam. The World Bank published its latest economic forecasts on Tuesday, cutting the 2022 growth rate of China to 2.8% from its previous forecast of 5%, and the 2023 growth rate to 4.5% from 4.8%.  On the other hand, the supra-national bank raised Vietnam’s growth rate in 2022 to 7.2% from the 5.3% forecast released in April. It also raised the 2022 growth forecasts for the Philippines to 6.5% from 5.7% and Malaysia to 6.4% from 5.5%. Excluding China, the East Asia, Pacific region is forecasted to grow 5.3% in 2022 and 6.0% in 2023, which will be, for the first time over the past three decades, higher than the growth rates in China. BHP takes advantage of sterling slump and redeems notes more than half a century early. Despite the iron ore (SCOA) price falling 1.4%, to its equal lowest level this year (US$95.90), BHP shares in Australia rallied to a three-day high after the mining giant paid off debts earlier than expected. BHP took advantage of the slump in the sterling against the USD, and used its record profits to redeem pound-denominated notes (due in 2077). This resulted in BHP effectively paying down $643 million of notes early. Last month BHP reported net debt of just $333 million. BHP also announced mining expansion plans. From exploring options to mine copper at Cerro Colorado beyond 2023, with Chilean regulation easing, to also seeing huge commodity upside in Peru, and spending $12m on exploration there over 10 months. Meanwhile, BHP also affirmed it’s working toward bringing forward production for its new potash (fertilizer) business to 2026. BOE Chief Economist Pill also pushed back on inter-meeting rate hike. Huw Pill said the UK’s government’s fiscal announcement and the market reaction that followed it requires a significant monetary policy response, but the best time to assess and react to their impact is at the institution’s next meeting in November. He acknowledged the challenge to the bank’s inflation goal arising from the loose fiscal policy, while also saying that the bank’s program of government bond sales should go ahead as planned next week if the market repricing stays orderly, as has been the case in recent days. However, it is worth noting that BOE’s November 3 meeting is still before the medium-term fiscal strategy is announced, and if that contains significant spending cuts, the budget may prove contractionary, especially given the rise in yields. US consumer confidence beats expectations. Lower petrol prices and a tight labor market possibly aided a rebound in sentiment, but high inflation and interest rates will continue to constrain consumer spending in the fourth quarter. Meanwhile, 1yr consumer inflation expectations declined to 6.8% (prev. 7.0%), but still remaining significantly higher than the Fed’s 2% goal. In other data, US durable goods order fell 0.2% in August, still coming in better than expected while new home sales rose to the strongest pace of sales since March to 685k in August, above the expected 500K and prior 532k (revised up from 511k). What are we watching next? End of quarter rebalancing? We have seen aggressive moves across markets this quarter, to say the least, which brings the question of whether significant rebalancing flows are set for the quarter end this Friday. The relative bond performance has been perhaps worse than that for equities, while in FX the focus may be on possible rebalancing after a tremendous USD upsurge in Q3. Earnings calendar this week The chief action this week is up tomorrow as H&M, Nike, and Micron Technology deliver earnings reports, with the earnings from Micron the most interesting to watch as we already know H&M and Nike are seeing weak demand. Micron has exposure to the consumer electronics industry and manufactures memory chips in Asia which means that the company sits in at the intersection of many interesting trends. Today: Paychex, Cintas Thursday: Polestar Automotive, H&M, Nike, Micron Technology, CarMax Friday: Carnival (postponed from last week), Nitori Economic calendar highlights for today (times GMT) 0715 – ECB President Lagarde to speak 0815 – UK BoE Deputy Governor Cunliffe to speak 0830 – ECB’s Holzmann to speak 1230 – US Aug. Pending Home Sales 1230 – US Aug. Advance Goods Trade Balance 1235 – US Fed’s Bostic (non-Voter) to speak 1400 – US Aug. Pending Home Sales 1410 – US Fed’s Bullard (voter 2022) to speak 1415 – US Fed Chair Powell to speak (opening remarks at conference) 1430 – US DoE Weekly Crude Oil and Product Inventories 1500 – US Fed’s Bowman (voter) to speak 1700 – US 7-year Treasury Auction 0000 – New Zealand Sep. ANZ Business Confidence survey   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-28-2022-28092022
Canada: A 25bp rate hike is highly expected. BoC terminal rate is expected to hit 4.5%

The USD/CAD Has The Strong Upside Pressure And Potential For Further Rally

InstaForex Analysis InstaForex Analysis 28.09.2022 09:33
Technical analysis: USD/CAD has been trading upside as I expected and the price has reached the first upside objective at the price of 1.3780. Anyway, I see potential for further upside movement due to the strong upside momentum. Trading recommendation: Due to the strong upside pressure in the background and rejection of the rising trend-line, I see potential for further rally. Watch for the potential buying opportunities on the intraday dips with the upside objective at the price of 1.3850 and 1.3900. MACD oscillator is showing fresh upside momentum, which is strong sign that buyers are in control. Key support is set at the price of 1.3625   Relevance up to 08:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294538
The Silver Might Then Extend The Recent Pullback

Silver Market: The Downward Trend Continues And Has The Option Of A Further Drop

InstaForex Analysis InstaForex Analysis 28.09.2022 09:50
Technical analysis: Silver has been trading downside as I expected and the price almost reached my my downside objective at $17.96. Anyway, I still see potential for further drop due to strong downside momentum Trading recommendation: Due to the strong downside pressure in the background and rejection of the supply trend-line, I see potential for further downside movement. Watch for the potential selling opportunities on the intraday rallies with the downside objectives at the price of $17.96 and $17.54 MACD oscillator is showing fresh downside momentum, which is strong sign that sellers are in control. Resistance is set at the price of $18.67   Relevance up to 08:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294548
In The Coming Days Will Be The Final Consolidation Of Bitcoin

Bitcoin Is Still Under Strong Pressure From The Downward Trend

InstaForex Analysis InstaForex Analysis 28.09.2022 09:56
Technical analysis: BTC has been trading downside in the background and I found breakout of the rising channel, which is good sign that sellers took control over buyers. Trading recommendation: Due to the strong downside pressure in the background and the breakout of the rising trend-line, I see potential for further drop. Watch for the potential selling opportunities on the intraday rallies with the downside objectives at the price of $18.200 and $17.770. MACD oscillator is showing fresh downside momentum, which is strong sign that sellers are in control. Resistance is set at the price of $20.300   Relevance up to 08:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294550
Assessing China's Economic Challenges: A Closer Look Beyond the Japanification Hypothesis"

On the New York Stock Exchange, The Number Of Securities That Fell In Price Was Bigger Than This Positive One

InstaForex Analysis InstaForex Analysis 28.09.2022 08:25
At the close of the New York Stock Exchange, the Dow Jones fell 0.43% to hit a 52-week low, the S&P 500 index fell 0.21%, and the NASDAQ Composite index rose 0.25%. The leading performer among the Dow Jones index components today was Salesforce Inc, which gained 2.57 points or 1.76% to close at 148.89. Quotes Dow Inc rose by 0.40 points (0.92%), ending trading at 43.79. Home Depot Inc rose 0.79% or 2.11 points to close at 268.69. The losers were shares of McDonald's Corporation, which lost 7.06 points or 2.90% to end the session at 236.70. Procter & Gamble Company was up 2.75% or 3.73 points to close at 131.98 while Coca-Cola Co was down 2.57% or 1.49 points to close at mark 56.38. Leading gainers among the S&P 500 index components in today's trading were CF Industries Holdings Inc, which rose 6.10% to hit 95.87, Mosaic Company, which gained 4.15% to close at 48.44, and also shares of Royal Caribbean Cruises Ltd, which rose 3.88% to end the session at 45.75. The biggest losers were Digital Realty Trust Inc, which shed 3.98% to close at 97.73. Shares of Organon & Co shed 3.54% to end the session at 24.26. Quotes of Global Payments Inc decreased in price by 3.39% to 108.02. Leading gainers among the components of the NASDAQ Composite in today's trading were Avenue Therapeutics Inc, which rose 106.25% to hit 7.26, Scienjoy Holding Corp, which gained 47.90% to close at 2.47, and also shares of X4 Pharmaceuticals Inc, which rose 40.18% to close the session at 1.25. The drop leaders were NLS Pharmaceutics AG, which shed 25.07% to close at 0.72. Shares of Midatech Pharma PLC ADR lost 20.77% and ended the session at 2.06. Quotes of Fednat Holding Co decreased in price by 18.22% to 0.18. On the New York Stock Exchange, the number of securities that fell in price (1634) exceeded the number of those that closed in positive territory (1527), while quotes of 136 shares remained virtually unchanged. On the NASDAQ stock exchange, 2048 companies rose in price, 1751 fell, and 295 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 1.05% to 32.60, hitting a new 3-month high. Gold Futures for December delivery added 0.18%, or 2.95, to $1.00 a troy ounce. In other commodities, WTI crude for November delivery rose 2.29%, or 1.76, to $78.47 a barrel. Futures for Brent crude for December delivery rose 2.35%, or 1.95, to $84.81 a barrel. Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.14% to 0.96, while USD/JPY rose 0.06% to hit 144.84. Futures on the USD index rose by 0.09% to 114.12.   Relevance up to 06:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/294518
More And More Universities Are Including Metavers In Their Education Program

More And More Universities Are Including Metaverse In Their Education Program

InstaForex Analysis InstaForex Analysis 28.09.2022 09:37
Crypto Industry News: There is a growing number of universities and educational institutions that include metaverse in their educational programs. Now the University of Nanjing, located in East China, has joined this group. Nanjing University of Information Technology and Technology changes the name of one of its main faculties, the Faculty of Information Engineering, to the "Faculty of Metaverse Engineering". This is to integrate more metaverse courses. According to the sources, this may be the first section of an educational institution in China to contain the word "metaverse". Mr. Zhigeng, dean of this transformed faculty, said the move will contribute to the university's integration with virtual reality enterprises. Its aim is to better identify the needs of current and future metavers users and train more talents in this regard. Zhigeng also announced that students will be better qualified to work in three different areas, including smart healthcare, smart education and digital tourism. To develop the university in these segments, the faculty will establish three different working groups: the Metaverse Research Institute, the Smart Meteorological Research Institute, and the Smart Medical Research Institute. Technical Market Outlook: The BTC/USD pair breakout had been capped after hitting the supply zone located between the levels of $20,221 - $20,580 Only a sustained breakout above this levels would change the outlook to more bullish, however after the Bearish Engulfing candlestick pattern was made at the level of $20,374, the odds for a breakout higher are very low. The market conditions on the H4 time frame are neutral-to-negative and the momentum might be going lower. The nearest technical support is seen at $18,640 and $18,563. The swing low is seen at the level of $18,150. Weekly Pivot Points: WR3 - $19,226 WR2 - $18,987 WR1 - $18,829 Weekly Pivot - $18,742 WS1 - $18,587 WS2 - $18,500 WS3 - $18,259 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout.   Relevance up to 08:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294544
Nubank Announced The Introduction Of Nucoin's Own Cryptocurrency

The Mood And Future Of The Ethereum Market| Statements By Ethereum Miners

InstaForex Analysis InstaForex Analysis 28.09.2022 09:43
Crypto Industry News: We are almost two weeks after the historic moment of the Merge, i.e. the transition of the Ethereum network to the Proof-of-Stake model. Due to the abandonment of ether extraction with the existing PoW model and the failure to take off the ETHPoW blockchain resulting from the fork, many former ETH miners complain that they have no idea what to do next. Following the merger, many ETH mining professionals began discussing their future on Twitter. Internet services have contacted several former Ethereum miners to find out what their plans are. The information obtained shows that the mood in this community is currently gloomy, as for many miners nothing is clear about the next steps. Former miner Christian Ander told the service: "Honestly, I don't know which way to go yet. Selling GPU power to other compute-intensive services isn't as profitable as mining ETH. I'm researching myself, and my colleagues are looking for new options for themselves." The former miner recalls that "GPU owners are researching and selling their devices' computing power to another cryptocurrency project, and when energy prices are very high, they shut down and sell excess power to the grid." Ander admitted that he is not mining any cryptocurrencies at the moment and is only observing the market. Another former Ethereum miner, Kevin Aguirre, said he sold his equipment to a person who is now using it to mine other coins. However, it states: "I have a little bit of regret about how the adventure with my mining machine ended, but it finally supported me and my family during the pandemic." At a time when Ethereum used the Proof-of-Work algorithm, GPUs were quite popular. After the Merge almost two weeks ago, GPU manufacturers began to record heavy losses. Technical Market Outlook: The ETH/USD pair had reversed all the recent gains made after the bounce to the level of $1,399 and is currently trading around the demand zone seen between the levels of $1,288 - $1,257. After the aggressive and dynamic reversal, the next target for bears is seen at the level of $1,100, $1,000 and $990, which means the low from 22th September located at $1,220 should be broken as the down trend will continue. Weekly Pivot Points: WR3 - $1,352 WR2 - $1,322 WR1 - $1,302 Weekly Pivot - $1,291 WS1 - $1,271 WS2 - $1,260 WS3 - $1,230 Trading Outlook: The Ethereum market has been seen making lower highs and lower low since the swing high was made in the middle of the August at the level of $2,029. The key technical support for bulls is seen at $1,281 as a part of the demand zone located between the levels of $1,252 - $1,295. If the down move will be extended, then the next target for bears is located at the level of $1,000.   Relevance up to 08:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294546
The South America Are Looking For Alternatives To The US Currency

Forex: US Dollar (USD) May Have Quite Road To 120.00. GBP/USD - Does Market Consider A Huge Rate Hike In November?

ING Economics ING Economics 28.09.2022 10:43
The dollar continues to power ahead. Over the last 24 hours, the focus has switched from the pound to the Chinese renminbi. Here, there are signs that authorities are acquiescing to a weaker currency. With no sign that the Fed is going to ease its hawkishness nor the US Administration showing any concern with the strong dollar, current trends should extend USD: All systems are go Whether it be US data surprising on the upside, the US Administration showing no concern at all with the strong dollar, or new chapters in the energy war in Europe, it looks like all systems are go for the dollar rally. Trying to pick a dollar top in the current climate is an exercise in futility. The dollar is clearly in the midst of a very powerful rally and one akin to the macro settings in the early 1980s when US authorities were also trying to tame inflation.  What has caught our eye overnight is USD/CNH trading to a new all-time high above 7.20. The renminbi was seen as one of the more controlled currencies in the global economy, but after tweaks to FX required reserve ratios and stronger renminbi fixings failed to slow the move, it seems the Chinese authorities are as close to letting the renminbi float as they have been. The final roll of the dice might be to re-introduce the counter-cyclical factor in their daily fixings (allowing even stronger renminbi fixings) - but given that strong fixings have not worked so far, why bother? The renminbi move could add another round of weakness to closely correlated emerging market and commodity currencies. We are thinking here of the big beasts in the EM space such as the South African rand and Brazilian real - and of course local Asian currencies, where the Singaporean dollar formally tracks the renminbi via its basket. And the pressure will continue to build on some of the more managed EM currencies such as the Egyptian pound and Nigerian naira, where implied yields through the 3m non-deliverable forwards are trading over 50% and 25%, respectively. As far as Washington is concerned the strong dollar is someone else's problem - an advisor to President Biden said overnight that we were not headed towards another Plaza accord - the 1985 agreement to reverse dollar strength. This all leaves the dollar in the ascendancy. DXY is close to 115 and in reality, there is not much resistance until 120. Favour shallow consolidations and further gains in this powerful stage of the rally. We doubt second-tier US data today, nor Fed speakers do much damage to the dollar. Chris Turner  EUR: Deep-sea subterfuge It is hard to know what to make of the presumed sabotage attack on Russian gas pipelines in the sea off Denmark. As Warren Patterson outlines in his Commodities Feed, those pipelines were not carrying any gas to Europe. Instead, the attack presents a pure geopolitical event - with investors awaiting how both the West and particularly the Russians respond. The strong dollar environment and the deteriorating geopolitical situation in Europe have sent EUR/USD close to 0.9500. Traditional drivers of the EUR/USD such as two-year swap differentials and terms of trade are having no say in EUR/USD pricing right now. However, EUR/USD, at 0.9500, would be near the lower of a bearish channel that has contained this year's orderly descent in the dollar - so perhaps some consolidation may be due above 0.9500. But one-week EUR/USD implied volatility is still changing hands at the highs of the year 15% - warning of fast markets if 0.9500 breaks. Chris Turner GBP: No emergency BoE rate hike after all Comments yesterday from Bank of England (BoE) Chief Economist Huw Pill were consistent with Monday's statement that the BoE would respond to the mayhem in UK asset markets at their regular monetary policy meeting on 3 November. This will have further disappointed the community looking for emergency rate hikes - we were not part of that community. Instead, the market seems to be settling on a view of a 'significant' BoE rate hike in the order of 150bp on 3 November. We doubt BoE speakers today (Jon Cunliffe and Swati Dhingra) will have too much more to add. That leaves GBP/USD at the mercy of the strong dollar and a bias back towards 1.05 this week. Events on the continent may keep EUR/GBP constrained to an 0.8900-0.9000 range. Chris Turner CEE: Gas prices strike again Yesterday's news about the sabotage of the Nord Stream pipelines and headlines that Gazprom sees the risk of sanctions on gas supplies via Ukraine have put gas prices back in the FX game. This triggered the first visible rise in gas prices in a week and tested the muted relationship with CEE FX. Unsurprisingly, this led to FX weakness across the region and this theme can be expected to drive the market for the rest of the week. The main news for us though is that the last pillar of strong FX in the region is gone for now and higher gas prices are adding to the side of falling interest rate differentials and a strong dollar. This is a net negative for CEE and we will see more weakness in the days ahead. Meanwhile, in Hungary, the central bank surprisingly ended the hiking cycle with a higher-than-expected 125bp rate hike to 13.0% and plans to do the rest of the monetary tightening through liquidity measures. Earlier, the NBH introduced new measures to withdraw excess liquidity from the market in the form of higher reserve requirements for banks or the issuance of discount bills. The question is how successful the NBH will be with the new approach. However, the EU money issue remains on the table, and in conjunction with the gas story, we can expect further volatile weeks for the forint around the 405 EUR/HUF level depending on incoming news. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

Podcast: US Dollar (USD) Keeps Rising | A Look At The 10-year US Treasury

Saxo Bank Saxo Bank 28.09.2022 11:39
Summary:  Today, a look at the US 10-year Treasury benchmark reaching the 4.0% milestone for the first time for this cycle after a remarkable surge in yields in recent weeks. It's worth considering the 1987 experience of bond markets flip-flopping in their correlation with equities and whether we could be set for a similar flip-flop if risk sentiment worsens further. Also, note that many speculative corners of the market were bid yesterday even as the action soured late and worsened still overnight as the US dollar continued surging - especially against the Chinese yuan overnight. Much more on today's pod, which is a solo flight with John J. Hardy hosting. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-sep-28-2022-28092022
Market Sentiment and Fed Policy Uncertainty: Impact on August Performance

The Prospects Of Foreign Currencies Against The US Dollar (USD)

InstaForex Analysis InstaForex Analysis 28.09.2022 12:19
Hello, dear colleagues. The main event in September was an increase in the federal funds rate by 0.75%. Commenting on this decision, adopted unanimously, Federal Reserve Chairman Jerome Powell said that the US central bank is ready to continue raising rates until inflation starts to decline and the Committee receives data on the sustainability of the decline in inflation expectations. A few days later it became clear that the decision taken by the Open Market Committee could lead to serious, if not catastrophic, consequences for the entire global financial system and its most important element — the FOREX market. Before discussing the prospects of foreign currencies against the US dollar, let's discuss why a rate hike leads to a rise in the dollar and a decrease in the rates of its competitors? The answer to this question lies in one of the fundamental laws of the foreign exchange market — the Interest Rate Parity Theorem. The essence of the theorem is that assets with the same credit risk will be more attractive in the currency of the state where the rate is higher. In this case, investors will sell the currency with lower rates and buy the currency with higher rates in order to receive a large premium for their investment. Figure 1: The US dollar exchange rate against a basket of foreign currencies The increase in the dollar rate primarily hit currencies with low rates, including, first of all, the euro, the yen and the British pound, and this is the flip side of the US dollar. Moreover, if the yen and the pound have limited influence, then the euro is the second most important reserve currency in the world. The economic problems associated with rising energy prices have further aggravated the situation in the eurozone economy, and the slowness of the European Central Bank has led to the fact that the difference in interest rates has become large enough for a massive outflow of capital from Europe. This has become especially relevant for energy-dependent industries, such as metallurgical companies and aluminum production. At the same time, the situation in the British pound and the Japanese yen is no better than that of the euro, and even worse in some ways. The British pound updated the historical low on September 26. The yen updated the 30-year low a little earlier. There is another circumstance that puts pressure on exchange rates, this is the decline of the US stock market, which adds an additional growth driver to the dollar. Thus, the dollar is at the peak of its power in relation to the currencies of the bloc. The Chinese yuan is also under pressure, although much less than the nearest US satellites. This week, the yuan has updated the low and is now trading at 7.14 yuan per dollar, but the level of 8 yuan per dollar, the low from 2006, is still far away. The depreciation of the yuan is rather a forced measure in response to the decline in the currency of the main competitor in the Asia-Pacific region — the Japanese yen. Further narration requires answering the question of how high the US dollar can grow, and whether it is worth selling it against other currencies now. First of all, it should be noted that the dollar's growth is not over yet, although it has achieved its initial goals. At the same time, it should be remembered that the movement never develops in a straight line, and the dollar has now turned out to be sufficiently overbought to make a correction to its rising trend from a technical point of view, which will give us the opportunity to consider buying it, if, of course, there is a desire and, most importantly, a signal from the trading system. However, in the context of what is happening, a very significant reservation should be made. Even if we assume that the US dollar has reached its high, it will take at least three months to reverse it. Now the ECB and the Bank of England have rushed after the Fed, trying to somehow stop the inflationary spiral. However, it is not so easy to do this, given the pace set by the US Fed, and it takes time. The chronology of events can be presented as follows. The Fed will raise the rate at least once more at its next meeting, which will be held on November 1 and 2, by 0.75% points. Before this event, the ECB will also raise the rate by 0.75% at the end of October, thereby keeping the difference in rates between the euro and the dollar at the current value. Of course, the ECB may surprise and raise the rate by 1% at once, but then we will know about it in advance from the comments of officials, but now such an increase looks unlikely. Based on the logic of this assumption, it is safe to say that at least until the end of October 2022, the euro's exchange rate will not change its direction and may continue to decline. Fig.2: Technical picture of the euro/US dollar exchange rate The technical picture of the EURUSD exchange rate assumes a similar dynamics and now completely coincides with the fundamental calculations (Fig.2). The euro is in a downward trend. At the same time, the exchange rate reached the first target, located at 0.96, which was determined by the width of the previous range of 0.99-1.02, 300 points. It is logical to assume that after achieving the first goal, the course will grow a bit, or, in other words, go into correction. The main postulate of technical analysis is the rule: the movement will continue until we get the opposite. This means that we need to assume that the exchange rate of the euro will decline until the condition of a trend change is met. For the current situation, the condition for a trend change is an increase above the 1.02 level, before that, any increase in the EURUSD rate should be considered as a correction to the current downward trend. Fig.3: Technical picture of the USDJPY course In my subjective opinion, the situation in the Japanese yen is even sadder than with the euro. The Bank of Japan remains the only key central bank that has abandoned the policy of raising rates. This has a rather serious impact on the yen exchange rate, which leads to the fact that the BOJ, under pressure from allies dissatisfied with the devaluation, is even forced to intervene. However, this does not help much and may lead to the fact that the Japanese currency will test the level of 150 and even 155 yen per US dollar (Fig.3). Therefore, if any feeling that you take for intuition suggests that you sell the USDJPY pair here and now, then throw this thought out of your head. It will not lead to anything good. It will be possible to do this no earlier than the pair drops below the 140 level, and even then with great caution and a minimum lot size. With the British pound, everything is somewhat more complicated. The fact is that the BoE began to raise the rate earlier than the ECB began to do it, besides, the maintenance of the national currency rate is written in its charter. Previously, if necessary, the central bank did not disdain to resort to interventions, including not only verbal ones. Therefore, I wouldn't guess the depths at the level of parity of the pound and the dollar, although such a decline looks quite likely. Summing up, it should be noted that the US dollar continues to remain in an upward trend, supported by high interest rates and a decline in stock indices. The S&P 500 index updated the local low on Tuesday, September 27. The previous level was at 3631. If the month, quarter and fiscal year are closed below the 3600 mark, the fate of the US market in the 4th quarter will be very sad. With a high degree of probability, of course. Be careful, cautious and most importantly — follow the rules of money management!   Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322832
Saxo Bank Podcast: The Upcoming Bank Of Japan Meeting, A Look At Crude Oil, Copper And More

The Japanese (JPY) Currency Shows Strong Resistance Against The Dollar (USD)

InstaForex Analysis InstaForex Analysis 28.09.2022 12:24
The dollar is again rushing like a tank in almost all directions. The yen is still on the defensive, but, apparently, the forces are already running out. Most analysts predict victory in this fight for the greenback. USD is tearing up and rushing The greenback showed impressive growth at the start of Wednesday. It jumped 0.5% at the beginning of the Asian session and reached a new 20-year high at 114.70. The key driver for the dollar was a sharp surge in the yield of 10-year US government bonds. Today, the indicator has exceeded 4% for the first time in 12 years. Hawkish comments from Federal Reserve officials contributed to the rapid rise in yields. Yesterday, three American politicians spoke out in favor of a more aggressive rate hike. Moreover, one of them, the president of the Federal Reserve Bank of Chicago, Charles Evans, announced the need to raise interest rates to the range of 4.50-4.75% in order to return inflation to the 2% target. Recall that now the interest rate in the United States is at the level of 3.0-3.25%, and the growth of consumer prices on an annualized basis is 9.1%. Of course, the fact that the Fed has to further strengthen its anti-inflation campaign cannot but please dollar bulls. Today they have become more active on almost all fronts. The greenback showed parabolic growth paired with the New Zealand dollar (+1%), the British pound (+0.9%), the Australian dollar (+0.8%) and the euro (+0.4%). The only hard nut for the greenback was the Japanese yen. The JPY, which has fallen against the USD more than other currencies this year, is holding surprisingly steady on Wednesday morning. At the time of release, the dollar-yen pair was trading at 144.70, which is 0.05% lower than the closing price of the previous day. The fragility of the yen The Japanese currency shows strong resistance against the dollar. However, there are no significant fundamental reasons that would contribute to the yen's growth. Most analysts associate the current strength of the JPY with the immunity received from the Japanese government. Recall that last week, for the first time since 1998, Japan intervened in support of its national currency. The politicians were forced to take such a step by a new sharp collapse of the JPY exchange rate. The yen was sent into free fall by Bank of Japan Governor Haruhiko Kuroda, who announced the continuation of an ultra-soft policy, despite the next rate hike in America. On the dovish decision of the BOJ, the USD/JPY pair broke through the psychologically important level of 145, which turned out to be a red line for the Japanese authorities. According to analysts, Japan will continue to zealously defend this peak and, if it is taken, will again intervene in the market. The risk of intervention is the only saving straw that yen bulls are clinging to now, while there are many more negative factors contributing to the further decline of the JPY. The main pressure on the Japanese currency continues to be exerted by the increasing divergence in the monetary policy of the Fed and the BOJ. Currently, the difference in US and Japanese interest rates is 4%, and everything points to its further growth. Fed officials are actively lobbying for a more aggressive policy, while the BOJ shows no signs of capitulation. The minutes of the BOJ's July meeting were published this morning. According to it, the board members still do not see the need to fight inflation by raising rates, despite the global tightening trend. Many experts believe that the downward trend in the yen will continue until Kuroda retreats from his outsider stance. The technical picture for the USD/JPY pair The 3-week-old descending resistance line around 145.00 is the nearest key obstacle that keeps the USD/JPY pair on its way to a new 24-year high. Bulls for the USD/JPY pair led the price to the level of 145 during the Asian session, but the chances of closing the dollar above this mark are still small. If bulls fail to break above the 145 mark in the short term, there may be a significant risk of a strong downward correction in the coming sessions.   Relevance up to 10:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/322898
Gold Is Showing A Good Sign For Further Drop

The Situation Around The World Force Investors To Keep Precious Metals In Portfolios

InstaForex Analysis InstaForex Analysis 28.09.2022 12:29
Everything is relative in this world. Although gold has lost about 11% of its value in 2022, it is better than stocks or bonds. What, no matter how the precious metal, is a means of protecting wealth and insurance against inflation? Even despite the extremely unfavorable background, XAUUSD retreats reluctantly. The bulls are fighting for every dollar, and as the global recession approaches, the chances of saving gold increase everyday. Since the start of the Fed's monetary policy tightening cycle, long-term inflation expectations have been securely anchored at around 2.5%, which is what the Central Bank required. At the same time, aggressive rate hikes around the world turned into a meteoric rally in bond yields. The cost of storing precious metals in ETFs is growing, and it does not generate interest income. Should we be surprised at the outflow of gold from specialized exchange-traded funds? The 10-year US Treasury yield, for the first time since 2010, exceeded the 4% mark. With inflation expectations at anchor, real debt rates are climbing ever higher. In such conditions, gold usually falls like a stone, but now it is resisting. Even against the backdrop of the rapid strengthening of the US dollar, the US dollar receives preferences both as a safe-haven asset and as a currency whose Central Bank is conducting aggressive monetary restrictions. The precious metal should be seriously affected in such conditions, but it clings to any straw. Dynamics of gold and US dollar But the Fed is not going to stop! St. Louis Fed President James Bullard says the federal funds rate should reach 4.5% as soon as possible as confidence in the Fed is under threat. Indeed, there is an opinion that gold will start to rise after the Central Bank realizes that it cannot control inflation. Minneapolis Fed President Neel Kashkari will not repeat the same old mistakes. Kashkari said the Fed decided in the 1970s that it had done its job, looking at slowing inflation and the economy, and was punished for it. His colleague, Chicago Fed President Charles Evans, says rates will hit a ceiling by spring, after which the central bank will be able to sit on the sidelines. Looking at rising bond yields, a stronger US dollar, and hawkish rhetoric from FOMC members, hedge funds are never tired of getting rid of gold. "Bearish" sentiment in the market reached a 4-year high. As of September 20, speculators reduced the size of net longs to the lowest level since November 2018. In my opinion, the reluctance of XAUUSD to fall as fast as the US securities market requires, indicates that the risks of recession and the escalation of the conflict in Ukraine force investors to keep precious metals in portfolios. Technically, on the daily chart of gold, quotes approached the previously indicated target at $1,600 per ounce at arm's length. I believe that the potential of the downward movement is not revealed, and the expected stop will be at the level of $1,590 or $1,575. The recommendation is to keep shorts.   Relevance up to 09:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322882
ECB press conference brings more fog than clarity

Can We Expect Better Movements In The European Currency (EUR)?

InstaForex Analysis InstaForex Analysis 28.09.2022 12:54
The EUR/USD pair resumed the falling process on Tuesday, returned to the corrective level of 423.6% (0.9585), and today – it consolidated under the level of 0.9585, simultaneously updating its low for 20 years. Thus, after literally a one-day rest, bear traders went to business again and continued to get rid of the euro. In the first two days of the week, I would single out only two speeches by ECB President Christine Lagarde from the important events. You can say as much as you like that the ECB was late at the beginning of the fight against high inflation, but still, it has raised its interest rate twice and promised that there would be several more increases in 2022. From my point of view, this is "hawkish" rhetoric that could support the European currency. But how can you expect something positive from the euro currency if there are no bulls on the market and bears continue to sell daily? Thus, Lagarde's words that the ECB will continue to raise rates, continue to adhere to the course of price stability, and influence high demand did not affect traders. And this means that the European currency will most likely continue to do so, which updates its lows in a day. It can also be assumed that the comments of the FOMC representatives force traders to continue selling euros. In particular, James Bullard said yesterday that the rate should be raised to at least 4.5%. However, when the dollar has been growing without stopping for months, it is unlikely to receive specific information support every day. Bullard's speech may or may not have had a favorable effect on the dollar. There is no difference since the US currency continues to grow anyway. But the news about possible sabotage on the Nord Stream pipeline could cause new sales of the euro currency, as it puts the heating season in the European Union under even greater threat. It is unclear who is behind this sabotage and whether it was a sabotage, but now gas supplies to Europe have been stopped through this pipeline. On the 4-hour chart, the pair dropped to the corrective level of 161.8% (0.9581). Rebounding from this level will favor the EU currency and some growth in the direction of the upper line of the downward trend corridor. However, how strong will this growth be if the information background tells traders to do only one thing – sell euros? Fixing the pair's exchange rate below the level of 0.9581 will increase the chances of continuing the euro fall even more. Commitments of Traders (COT) Report: Last reporting week, speculators closed 1,214 long contracts and 46,500 short contracts. This means that the "bearish" mood of the major players has weakened and ceased to be so. The total number of long contracts concentrated in the hands of speculators now stands at 206 thousand, and short contracts – 173 thousand. So now the mood of the major players is bullish, but do you see the euro showing growth? In the last few weeks, the chances of the euro currency's growth have been gradually growing, but traders are more actively buying the dollar, not the euro. The euro currency has not been able to show strong growth in the last few months. Therefore, I would now bet on important descending corridors on the hourly and 4-hour charts. I recommend expecting the growth of the European currency after closing the quotes above them. News calendar for the USA and the European Union: EU - ECB President Lagarde will deliver a speech (07:15 UTC). US - speech by the head of the Fed, Mr. Powell (14:15 UTC). On September 28, the calendars of economic events of the European Union and the United States contain one interesting entry each. A new performance by Christine Lagarde and a new performance by Jerome Powell. The influence of the information background on the mood of traders today may be average in strength. EUR/USD forecast and recommendations to traders: I recommended selling the pair when rebounding from the level of 1.0173(1.0196) on a 4-hour chart with targets of 0.9900, 0.9782, and 0.9581. All these goals have already been worked out. New sales – at closing under 0.9585. I recommend buying the euro currency when fixing quotes above the level of 1.0173 on a 4-hour chart with a target of 1.0638.   Relevance up to 11:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322910
NatWest Group Reports Strong H1 2023 Profits Amid Rising Economic Concerns

The Tightening Of Monetary Policy Will Continue For Some Time

InstaForex Analysis InstaForex Analysis 28.09.2022 13:01
Details of the economic calendar for September 27 Orders for durable goods in the United States decreased by 0.2% during the period of August. This is not the best indicator, but they expected a reduction of 0.9%. The divergence of expectations served as a stimulus for the growth of dollar positions. At the same time, data on new home sales in the US were also published, which recorded a strong growth of 28.8% in August. In addition to macroeconomic statistics, there were quite a lot of comments from the Fed, where everyone unanimously talks about the risks associated with inflation. Chicago Fed President Charles Evans: - The average forecast for the interest rate at the end of the year is between 4.25%–4.5% and 4.6% by the end of next year. - For us, task number 1 is to bring inflation under control. - The tightening of monetary policy will continue for some time. - 4.5% unemployment in the United States is still a good level. - At some point in time there will be a need to reduce the rate of interest rate increases. But now it needs to be further improved. - This year, our forecasts for an objective increase in interest rates by another 100–125 basis points. - We see long-term inflation expectations at acceptable levels. - I expect that the level of inflation will noticeably decrease within two years. - I expect a slight increase in GDP this year. Former New York Fed President William Dudley: - The Fed has made it clear that it intends to fight inflation. - During the September meeting, the regulator clearly indicated that they are ready to raise the interest rate in order to return inflation to an acceptable level. - Based on the forecasts of the Fed, GDP growth is expected in the coming years. - It looks like there is no clear consensus among the Fed representatives on how long they will continue to fight inflation. St. Louis Fed President James Bullard: - We have serious problems with inflation in the country. - The credibility of the inflation targeting regime is under threat. - The labor market is very strong, which gives us the opportunity to fully focus on inflation. - We must correctly and timely respond to inflation. - At subsequent meetings, we certainly must continue to raise the interest rate. - The possible maximum interest rate is about 4.5%. - We'll probably have to stick with the high stakes for a while. Minneapolis Fed President Neel Kashkari: - We believe that the markets understand what the Fed is doing. - Representatives of the Fed are united and committed to reducing inflation. - We are moving at a fast pace, it is dangerous. - The Fed is working to bring inflation back to 2%. We need to keep raising interest rates. - We need to further tighten monetary policy to see evidence that we are succeeding in reducing inflation, and move on to slow down. - I'm not sure that the current monetary policy is tight enough. Philadelphia Fed President Patrick Harker: - We are working to achieve an acceptable level of inflation in the country. - The housing market is a key segment in the growth of inflation - Inflation in the country is very high in many categories San Francisco Fed President Mary Daly: - Our goal is to return inflation to the level of 2.0%. - The level of inflation is very high, we must properly assess the current situation. Conclusion based on the comments of the Fed representatives Based on the above material, a clear "hawkish" approach is visible. The regulator intends to fight high inflation by all possible means, which they point out in their statements. For this reason, we see a further decline in the US stock market, as well as an increase in the value of the dollar against other currencies. Analysis of trading charts from September 27 The EUR/USD currency pair resumed its decline after a short pullback. As a result, the local low of the downward cycle at 0.9553 was updated, which indicates the prolongation of the main trend. The GBP/USD currency pair ignores the fact that it is treading water at historical lows. In fact, the technical signal of oversold is covered by a high rush for short positions on the part of speculators. Economic calendar for September 28 Today the macroeconomic calendar is empty, all hope is for the information flow, where speeches by the Fed and ECB representatives are expected again. Trading plan for EUR/USD on September 28 Stable price retention below 0.9550 will lead to a subsequent decline. In this case, the technical signal about overheating of short positions can be ignored by market participants. A possible prospect of a move is a decline towards the lows of 2001 and 2000. An alternative scenario of market development is considered by traders in the form of another price rebound from the 0.9550 value area, as it happened at the beginning of the trading week. Trading plan for GBP/USD on September 28 In this situation, keeping the price below the 1.0600/1.0630 area in a four-hour period may well lead to a subsequent decline towards the recent local low. It is worth noting that with such overheating of short positions, spontaneous consolidations may occur, which, in turn, will lead to a technical pullback. Until the quote is stable below the control area, the risk of the subsequent formation of the amplitude of 1.0630/1.0930 remains. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.   Relevance up to 10:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322890
Behind Closed Doors: The Multibillion-Dollar Deals Shaping Global Markets

High Prices Continue To Put Pressure On National Economies

InstaForex Analysis InstaForex Analysis 28.09.2022 13:06
Markets tried to recover from the recent sharp sell-offs, but failed. And after a highly volatile trading session, European and US stock indices ended with mixed dynamics. The main reason is the confidence of investors that not only the Fed, but also a number of other world central banks will aggressively raise interest rates, trying to tame galloping inflation. In fact, Bank of England Member Huw Pill and Fed members Neel Kashkari and James Bullard spoke about the need to fight high inflation by any means because high prices continue to put pressure on national economies. This indicates that the two central banks are not putting their utmost priority on economic growth, but on curbing inflation. That is why it will not be surprising if interest rates continue to increase in the foreseeable future, which will cause further sell-offs in stock markets and rise in dollar. The upcoming inflation data in the Euro area will also stir up the markets again, especially if there is a slight slowdown in growth or an increase. It will lead to a new wave of sales in euro in the forex market. Forecasts for today: AUD/USD The pair is currently trading at 0.6375. A consolidation below may lead to a further decline to 0.6245. XAU/USD Gold is testing the level of 1621.00. A drop below it could cause a price drop to 1600.00.   Relevance up to 09:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322868
Declines At The Close Of The New York Stock Exchange, The Drop Leaders Were Nike Inc Shares

The DAX Prices Met Market Expectations And Fell

InstaForex Analysis InstaForex Analysis 28.09.2022 13:13
Forecasts in DAX pointed to a price decrease amid the closure of all branches of the Nord Stream pipeline due to a possible sabotage. This really happened during the US session, when the index hit a new yearly low. plan: development: Congratulations to those who followed the strategy! The index moved by more than 2,000 pips. Investors may now close positions for profit. The trading idea was based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.     Relevance up to 10:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Read more: https://www.instaforex.eu/forex_analysis/322896
Key US Economic Reports Awaited: Impact on Euro and Pound Forecast

Sentiment Has Been Driven Lower By An Aggravation In Geopolitical Backdrop

Saxo Bank Saxo Bank 28.09.2022 13:25
ummary:  A strengthening US dollar and higher US yields continue to drive much of the action across markets, but a riveting side story is the USDJPY exchange rate more or less holding the line, while the Chinese yuan has crumbled before the big USD and has traded well below the range lows since 2019 and at the lowest since 2008. But roiling markets around European lunchtime is a Bank of England move to launch emergency QE in order to counter dysfunctional moves in the UK gilt markets. Weren’t they meant to be selling gilts, not buying them? FX Trading focus: BoE Emergency QE! CNH In focus as USDCNH crosses above 7.20. Breaking: BoE moves with emergency QE to avoid systemic meltdown. Just before I was about to send the report below out, the Bank of England announced that it would purchase long date UK gilts to stabilize the market in a “temporary operation”. It was stunning to see sterling rally on this, even if a brief kneejerk! This is an admission that the currency will have to take the impact if yields rising elsewhere, since UK yields can’t rise as rapidly as they have recently without triggering a systemic-type event that requires BoE easing. Still, riveting to watch the action from here – the move forced UK yields sharply lower, with the 10-year UK Gilt yield moving 40+ bps lower quickly in response, but US yields were also some 10 bps lower. Given my comments on the Fed “breaking things” below – the UK financial markets just got broken, who is next, when is it the US’/Fed’s turn, and will signs that risk sentiment is celebrate this BoE move as the canary in the tightening coal mine pan out, or is it a red herring for now? Stay tuned. Back to the original program: The market is spooked by the ongoing rush higher in US treasury yields, with the 10-year treasury benchmark reaching the symbolic and real support level of 4%, which held the line for an extended period. Whether the juggernaut of treasury selling can stop so quickly simply because this level has been reached is an open question, but round levels have often proved major sticking points in the past. Already at these levels and after the tremendous acceleration in yields higher, the treasury market is strongly at risk of “breaking something” with the USD the accompanying wrecking ball here. More thoughts on that below. But sentiment has also been driven lower by an aggravation in an already fraught geopolitical backdrop after the Nord Stream 1 and 2 pipelines were severed by coordinated explosions yesterday. The medium to longer term outlook for energy inputs into especially Germany’s industry  was always hazy beyond the heroic efforts to ensure gas supplies through this coming winter, but this development throws up a dark cloud over the longer term outlook as well, since even regime change in Russia and a shift in attitudes on both sides would still require extensive repairs of the infrastructure to get the gas flowing again. A bit surprised that the euro has held out as well as it has in the face of this latest news. Chart: CNHJPYThe US dollar rally finally took USDCNH above the 7.20 area that defined major tops on two prior occasions in 2019 and 2020 and set a new high water mark for USCNH in the history of the offshore CNH currency above 7.26 at one point this morning. The official USDCNY exchange rate has not traded this high since early 2008. The move comes ahead of a major holiday next week in China, with markets closed for the entire week, which will leave markets in limbo next week as USDCNY won’t trade.With USDJPY holding the line despite the US dollar strength, it is riveting to watch the CNHJPY yield for whether we are finally set to see a major mean reversion in this most important of Asian currency pairs. Note the trendline and the 200-day moving average that will come into view quickly if the sell-off extends. USD climax – now or soon? The USD move this month has been epochal – as of this morning up over 5% in Dollar Index terms, up over 6% versus the Aussie, up over 8% versus sterling, and up a staggering 10% versus NOK. We are probably just about there for the extent of this USD move in time terms and in momentum terms, even if the amplitude of the spike could worsen further before the move finds resistance – the Fed is on the verge of breaking the treasury and currency markets, and the economy will follow with a lag. For now, it will be interesting to see, as month-end and quarter-end approach, whether portfolio rebalancing can put some support under the treasury market and or a ceiling on the US dollar, or if even a tactical consolidation in the two markets will require a change of direction from the Fed. At some point if the twin USD/US treasury wrecking balls continue to swing, the Fed will have no choice but to intervene with balance sheet re-expansion or a yield cap policy – but will this require an all-out equity/risk asset market rout first? Table: FX Board of G10 and CNH trend evolution and strength.The USD trend strength reaching staggering levels near 10 – are we near the end of this trend for a spell? Most likely, in time terms, but trends like this can end in impossible climaxes. Note elsewhere the JPY strength sticking for now. Table: FX Board Trend Scoreboard for individual pairs.NOKSEK broke down through 1.0500,  a key technical development, but look at USDNOK at an absurd reading of 10.1 (And USDCAD at 11.1 and USDCNH at 13.1!). Upcoming Economic Calendar Highlights 1230 – US Aug. Advance Goods Trade Balance 1235 – US Fed’s Bostic (non-Voter) to speak 1400 – US Aug. Pending Home Sales 1410 – US Fed’s Bullard (voter 2022) to speak 1415 – US Fed Chair Powell to speak (opening remarks at conference) 1500 – US Fed’s Bowman (voter) to speak 1700 – US 7-year Treasury Auction  0000 – New Zealand Sep. ANZ Business Confidence survey Share   Source: https://www.home.saxo/content/articles/forex/fx-update-new-cnh-weakness-boe-launches-emergency-qe-28092022
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

What Could Bank Of England Buying Gilts Mean For British Pound (GBP)? What Can We Expect From GBP/USD?

ING Economics ING Economics 28.09.2022 13:51
In a dramatic policy U-turn, the Bank of England is resuming gilt purchases. This provides a potential exit door to the nascent UK financial crisis, though this may require the Bank to go even further. Nevertheless, an inter-meeting rate hike remains unlikely despite ongoing concerns about sterling weakness The Bank of England Much needed relief for the gilt market Better late than never. The Bank of England (BoE) has acknowledged the distressed trading conditions in the gilt market and announced it will carry out gilt purchases over the next two weeks, starting today. If this sounds like a U-turn, that's because it is. As we have repeated ad nauseum in recent weeks, the BoE’s quantitative tightening (QT – reducing the size of its bond portfolio and so requiring private investors to stump up even more cash to buy gilts) is adding to the stress in sterling markets. The BoE’s announcement is only a temporary delay of QT, however, and gilt sales are planned to start on 31 October. The BoE has acknowledged the distressed trading conditions in the gilt market In our view, this is unlikely. There is clearly a financial stability aspect to the BoE’s decision, but also a funding one. The BoE likely won’t say it explicitly but the mini-budget has added £62bn of gilt issuance this fiscal year, and the BoE increasing its stock of gilts goes a long way towards easing the gilt markets’ funding angst. Once QT restarts, these fears will resurface. It would arguably be much better if the BoE committed to purchasing bonds for a longer period than the two weeks announced, and to suspend QT for even longer. Distressed gilt trading conditions pushed the BoE into action Source: Refinitiv, ING Too timid action but this is a start Of course, a lot of questions remain unanswered. First, will markets see this as a contradiction to the BoE’s inflation-fighting objective? We don’t think so (see next section). If anything, by preventing a market meltdown, the purchases allow the BoE to keep increasing interest rates without adding fuel to the fire. The second worry is fiscal dominance, where monetary policy is effectively dictated by the Treasury. This is clearly a worry and the Treasury issued a statement saying that it remains committed to the BoE’s independence. This second point is only a concern in case of effective debt monetisation, from which today’s actions are a far cry. We think purchases should and will last longer than the initial two weeks So what’s next for gilt markets? They anxiously await more detail on the size of the BoE’s intervention. We think purchases should and will last longer than the initial two weeks. This would restore market confidence, and provide cover for investors to return to the market, sowing the seeds for the end of this crisis. Nevertheless, a lot still hinges on the Treasury and investors will be looking for a credible plan to get debt under control. Today's decision from the BoE only buys time. Gilt yields are still well above 4%, more purchases might be needed Source: Refinitiv, ING Inter-meeting rate hikes still unlikely Markets are now pricing a terminal rate above 6% next year, and while we can debate whether this is a reliable gauge of expectations with this level of market stress, it’s no doubt true that investors are positioning for a sizable reaction. That leaves the Bank facing an unpalatable decision. If it meets expectations for big rate hikes, it risks prompting serious damage to the housing market. If nothing else, a sharp rise in mortgage rates will prompt homeowners to cut spending elsewhere, increasing the risk of a wider economic downturn this winter. Similar pressure could emerge in the corporate borrowing space too. If the Bank doesn’t meet expectations, it risks further pressure on the pound, adding to the risk that core inflation stays above the target in the medium-term. The Bank is already worried, given the government’s fiscal plans and the tightness in the jobs market. It’s an unenviable position, but the second option seems more palatable. Not least because hiking aggressively to protect the pound has no guarantee of success. The fact that the Bank hiked by ‘only’ 50 basis points last week gives us a clue that policymakers are more inclined to think this way too. Nevertheless, the existing pressure on sterling means the Bank has little choice now but to hike more aggressively in November – a 75bp or perhaps even 100bp move seems likely. But we still feel the kinds of rate hikes being priced into financial markets over the coming months look overdone. We still suspect the bar to an inter-meeting hike is also set fairly high, and that also seemed to be the message from both official Bank of England statements and chief economist Huw Pill’s comments yesterday. Sonia swaps still imply a sizeable amount of hikes by the BoE Source: Refinitiv, ING GBP: Mixed news for the pound BoE gilt intervention is being seen as mixed news for sterling. The positive is that the BoE has taken action to address financial stability concerns at the long end of the gilt market. Given that the sell-off in gilts since early August had been a big factor driving sterling weakness, today’s intervention will be welcomed by some. Die-hard sterling bears will remain so, citing ‘fiscal dominance’ in that the BoE has suspended its planned QT, and by buying gilts the BoE effectively provides room for the government to continue with its aggressive fiscal programme. That is why we have seen HM Treasury make every effort to reassure BoE independence. Overall, we would favour a little more sterling stability on today’s bond market intervention. But market conditions remain febrile (one week traded volatility still at 23%). Both the strong dollar and doubts about UK debt sustainability will mean that GBP/USD will struggle to hold rallies to the 1.08/1.09 area. Read this article on THINK TagsInterest Rates Foreign exchange Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
"From the technical point of view, ETH/USD retested the major broken downtrend line and now it has turned to the upside"

Ethereum Is Seen To Be Working On Its Recent Bearish

InstaForex Analysis InstaForex Analysis 28.09.2022 14:09
Technical outlook: Ethereum dropped close to $1,250 intraday on Wednesday before finding some support. The crypto bounced through the $1,305-10 zone thereafter and is seen to be easing off a bit towards $1,290 at this point in writing.The bulls might be inclined to push through the $1,540-50 levels at least before giving in to the bears again. Also, note that the backside of the support trend line would offer resistance at around $1,550. Ethereum earlier dropped through $1,220 after reversing from $2,031 seen on the 4H chart here. The possibility still remains for a strong rally to carry prices above the $2,031 resistance in the next several trading sessions. The bulls need to break above the $1,800 initial resistance to confirm a further upside thereafter. Ethereum is seen to be working on its recent bearish swing between $1,800 and $1,220. The potential resistance zone is seen towards $1,550 which is the Fibonacci 0.618 retracement of the above drop (not shown here). Only a break above $1,670-1700 will confirm that the bulls are back in control. Trading idea: Potential rally through $1,550 at least against $1,000 Good luck!   Relevance up to 13:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294640
Bitcoin Is Showing The Potential For The Further Downside Rotation

Bitcoin Remains Vulnerable To More Downside

InstaForex Analysis InstaForex Analysis 28.09.2022 14:14
Blue line -resistance Blue rectangle- support (broken) Red lines- Fibonacci retracements Bitcoin is back again below $20,000. Price bounced higher above short-term resistance the previous days but got rejected at the 50% Fibonacci retracement of the latest decline. Price has now broken again below the horizontal support of $19,500. As long as Bitcoin remains below the blue downward sloping trend line, it will remain vulnerable to more downside. The rejection at the 50% retracement and the sharp decline below the horizontal support, is a sign of weakness. Medium-term trend remains bearish. Bulls need to push above recent high but most importantly above the blue trend line resistance. Until then we remain bearish.   Relevance up to 13:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294642
Analysis Of The Ripple (XRP) Price Movement

Price Of Ripple (XRP/USD) Is Again Under Pressure

InstaForex Analysis InstaForex Analysis 28.09.2022 14:20
Red lines- Fibonacci retracements Green line -resistance trend line Blue lines- trading range XRPUSD is trading around $0.42. Price managed to push as high as $0.5563 but bulls can not defend and stay above the downward sloping resistance trend line. Pushing below the resistance trend line after a break out is bearish. It is a sign of weakness. Price is again under pressure. Bulls need to defend recent lows at $0.3975 where we find the upper boundary of the trading range it was in. Bulls need to form a higher low and then attempt an attack against the recent highs of $0.5563. The rejection at the 38% Fibonacci retracement is something normal. This pull back could prove to be an important buying opportunity if bulls manage to built a higher low.   Relevance up to 13:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294644
Gold Has A Chance For Further Downside Movement - 30.12.2022

Price Of Gold Is Right On Top Of The Lower Boundary

InstaForex Analysis InstaForex Analysis 28.09.2022 14:22
Red lines- bearish channel Green lines- bullish RSI divergence Gold made a new lower low earlier today at $1,614. Price is right on top of the lower boundary of the short-term bearish channel. The RSI has provided another bullish divergence. Key short-term resistance is found at $1,643 and a break above it will provide a bullish signal. A bounce towards the upper channel boundary is justified. If bulls recapture $1,643-45, then we should expect a move higher towards $1,660-70. Opening long positions at current levels can provide the best possible return, but it is very risky because trend remains bearish. Sellers prefer to wait for a bounce towards $1,660-70 to sell again.   Relevance up to 14:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294648
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

Forex: Oh My... Euro (EUR) To US Dollar (EUR/USD) Has Decreased By Almost 5% This Month So Far...

Kenny Fisher Kenny Fisher 28.09.2022 15:02
The euro is in negative territory today, after posting six straight days of losses. EUR/USD is trading at 0.9553 in Europe, down 0.41%. Referendums, Nord Stream explosions weigh on euro September can’t end fast enough for the euro, which has declined a massive 4.8% against the dollar. Earlier today, EUR/USD fell to 0.9536, its lowest level since June 2002. With the war in Ukraine escalating and Nord Stream reporting that its pipeline was deliberately damaged, it’s hard to be optimistic about the euro’s outlook. The sham referendums in Russian-occupied Ukraine have ended and predictably, the vote to join Russia was close to 100%. Moscow is expected to declare on Friday that the territories are being annexed to the Russian Federation, sparking fears that Russia could resort to nuclear weapons to defend what it claims is Russian territory. There was a further escalation in the Ukraine war last week, as explosions at the Nord Stream 1 and 2 pipelines are suspected to have been sabotaged. Nord Stream 2 has been shelved and Nord Stream 1 has been shut down for weeks, and any faint hopes that Russia might renew gas exports through Nord Stream have been dashed. European natural gas prices have jumped in response to the news. The US dollar continues to rally, and 10-year Treasury yields pushed above 4.00% earlier today, for the first time since 2008. The markets are showing a healthy respect for Fed hawkishness, even after inflation weakened in the past two inflation reports. There is some optimism that the current rate-tightening cycle is reaching its end, with Fed member Evans stating that it will be appropriate to slow the pace of tightening at some point. For now, the US dollar has momentum, driven by an aggressive Fed and weak risk appetite. Euro To USD Technical EUR/USD is testing support at 0.9554. Next, there is support at 0.9419 There is resistance at 0.9640 and 0.9711 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. EUR/USD falls to new 20-year low - MarketPulseMarketPulse
Reducing Animal Meat Production As Part Of Climate Policy

MCD Stock Price (McDonald's) Has Been Extremely Bearish But There Are Increased Chances That The Upward Move

InstaForex Analysis InstaForex Analysis 28.09.2022 14:30
Black line- support trend line Red line- 200 Exponential MA Blue line- 50 Exponential MA Green line - 13 Exponential MA Recent price action in MCD has been extremely bearish. There are increased chances that the upward move from 2020 lows is complete and we should at least see a corrective pull back. Price has broken below the key upward sloping resistance trend line after being tested twice. The importance of the trend line was confirmed by previous price action. Price not only has broken below the trend line support, in the Daily chart we also see price below all three MA indicators. Apart from the 200 DMA, the other DMA are negatively sloped and the 13 DMA has crossed below the 5DMA. The Daily RSI has just reached oversold conditions. Current chart, points to more downside implying that MCD should head towards $200 or lower.   Relevance up to 14:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294652
The EUR/USD Pair Is Showing A Potential For Bearish Drop

Forex: Euro To US Dollar - What Can We Expect? On Wednesday EUR/USD Touched 0.9535!

FXStreet News FXStreet News 28.09.2022 15:33
EUR/USD Current Price: 0.9578 Russia has menaced once again to cut gas supply to the EU, fueling natural gas prices. US Treasury yields maintain the upward pressure and trade near multi-year highs. EUR/USD is technically bearish, although extreme oversold conditions start to weigh. The EUR/USD pair reached a fresh multi-year low of 0.9535 on Wednesday, holding nearby as US traders reach their desks. The greenback strengthened during the Asian session after White House economic adviser Brian Deese said that USD vigor reflects the relative strength of the US economy, dismissing the possibility of an adjust to the currency value. Treasury Secretary Janet Yellen suggested that there was little cause for concern with current moves in financial markets. Meanwhile, the poor performance of European equities provided additional support to the safe-haven currency. In addition, concerns related to energy prices in the Union, as natural gas prices soared following a new Russian menace to halt supply, undermined the market sentiment. Major indexes, however, trimmed part of their early losses, putting a temporal cap on the dollar’s demand. Government bond yields keep marching north. In the US, the 10-year Treasury note yielded as much as 4.019% ahead of the opening, while the yield on the 2-year note peaked at 4.316%. Read more: Tim Moe (Goldman Sachs) Comments On USD And Turbulent Times For Markets In General, Ole Hansen (Saxo)Talks Nord Stream | FXMAG.COM On the data front, Germany published the Gfk Consumer Confidence Survey, which plunged in October to -42.5 from -36.8 in the previous month. As for the US, the country has just published the August Goods Trade Balance, which posted a deficit of $87.3 billion, better than anticipated. On the other hand, Wholesale Inventories rose 1.3% in the month. Later in the American session, the country will release August Pending Home Sales, while US Federal Reserve chief Jerome Powell is due to deliver opening remarks in a pre-recorded video at the Community Banking Research Conference. EUR/USD short-term technical outlook The EUR/USD pair trades in the red for the seventh consecutive day, and technical readings show extreme oversold conditions but little hints of a potential bounce. In the daily chart, technical indicators barely decelerated their declines within extreme readings, as the pair continues to develop far below strongly bearish moving averages. In the near term, and according to the 4-hour chart, the risk skews to the downside. The current candle has a long upward wick which indicates sellers are still willing to add on spikes. The Momentum indicator retreats from its midline, and the RSI consolidates around 31, also reflecting bears’ dominance. Finally, the 20 SMA extended its slide below the longer ones and now provides dynamic resistance at around 0.9630. Support levels: 0.9505 0.9470 0.9420 Resistance levels: 0.9590 0.9630 0.9685
The RBA Surprised With A Smaller 25 bp Hike , Sterling (GBP) Rose, The USD Has Weakened

AUD/USD: Because Of Australian Retail Sales, Reserve Bank Of Australia (RBA) May Not Slowdown The Tightening

Kenny Fisher Kenny Fisher 28.09.2022 16:42
The Australian dollar can’t find its footing and continues to lose ground against the surging US dollar. AUD/USD was down considerably earlier today but has pared most of these losses. In the North American session, AUD/USD is trading at 0.6425, down 0.14%. Australia retail sales higher than expected Australia’s retail sales for August rose 0.6% MoM, above the consensus of 0.4%. This was slower than the super-strong gain of 1.3% in July, but household spending appears to be holding well, despite the Reserve Bank’s rate-tightening cycle and high inflation. The RBA hiked rates by 0.50% earlier this month, bringing the cash rate to 2.35%. The RBA isn’t done with the current tightening cycle, but some Bank officials had signalled that the pace of tightening would slow after a series of large 0.50% rate increases. The strong retail sales release puts such a scenario in doubt since it’s unlikely that inflation has peaked if retail sales remain strong. The central bank has designated inflation as public enemy number one and needs the economy to slow in order to curb inflation, even if that means the price is a recession. The RBA meets on October 4th and may have to deliver another 0.50% and hold off from easing on rates until the data shows that the economy is slowing. Fed officials have signalled that the current cycle may soon come to a close, but the markets don’t expect any easing until there are clear signs that inflation has peaked. Although CPI dropped in August, inflation was higher than expected, which poured cold water on any hopes of the Fed easing up on policy. The war in Ukraine has seen some worrying developments, which is weighing on risk sentiment. The Nord Stream pipeline system, although inactive, was hit by explosions that appear to have been deliberate. This follows the sham referendums in Russian-occupied Ukraine, which Moscow expected to formally annex the territories on Friday. This double-whammy of a hawkish Federal Reserve and a loss of risk appetite due to the escalation of the war in Ukraine has pushed the Aussie to its lowest levels since April 2020. AUD/USD Technical AUD/USD has support at 0.6623 and 0.6523 There is resistance at 0.6769 and 0.6869 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar extends losses - MarketPulseMarketPulse
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

Will The Pressure On The Price Of The AUD/USD Pair Remain?

InstaForex Analysis InstaForex Analysis 29.09.2022 08:00
The price correction from the embedded line of the price channel (0.6364) turned out to be very strong yesterday (170 points) due to the increased volatility of the entire currency market. The 0.6515 target was worked out. The price is decreasing in today's Asian session. With the Marlin oscillator turning down, we can expect the price to return to the target supports at 0.6439, 0.6400 and update the low at the target level of 0.6350, which will become a retest of the price channel line. On a four-hour scale, the price is trying to consolidate below the level of 0.6515 (consolidation will occur with the closing of the candle), the Marlin Oscillator is approaching the zero line. Leaving the area below it can increase pressure on the price. We follow the price behavior on the supports 0.6439 and 0.6400.   Relevance up to 04:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322978
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

This Morning The Cable Market (GBP/USD) Returns To Its Previous State

InstaForex Analysis InstaForex Analysis 29.09.2022 08:02
Yesterday's trading range for the pound was 380 points. The lower shadow worked out the support at 1.0535, the upper part of the candle, on the occasion of such a high volatility, went above the strong resistance at 1.0830. But this morning the market returns to its previous state - below this level and towards 1.0535. The rate of decline may now slow down, but its targets remain: 1.0535, 1.0310. On the four-hour chart, the price returns below the level of 1.0830. Consolidation below it will strengthen the attraction of the target level of 1.0535. By this time, the Marlin Oscillator should move into negative territory to help the price in this difficult matter.   Relevance up to 04:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322980
The Markets Still Hope That The Fed May Consider Softer Decision

Technical Analysis Of The Movements Of The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 29.09.2022 08:19
Yesterday there was a sharp and strong correction in the yields of US government bonds. Yields on 5-year bonds fell from 4.19% to 3.97%, returning to levels of the 23rd. Following the yields, the stock market also corrected – the S&P 500 grew by 1.97%. Oil and gold rose. The euro added 143 points. The price reached the target level of 0.9752, reversed from it and is now breaking through the support at 0.9695. We believe that the correction has ended due to the large price growth and strong resistance. The signal line of the Marlin Oscillator turned down. We are waiting for the price to overcome the supports 0.9625, 0.9520 and reach the level 0.9404. We expect a longer correction from this level. It is close to the February 2000 low (0.9399), which, taking into account the error in the 22-year history, can be taken as coinciding levels. On the four-hour chart, the price is trying to consolidate below the level of 0.9695. The Marlin Oscillator is trying to move back into negative territory. We also note that yesterday's growth occurred under the balance indicator line (red), which indicates a purely corrective nature of this movement.     Relevance up to 04:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322982
UK Budget: Short-term positives to be met with medium-term caution

The GBP/USD Could Resume The Bullish Bias And Could Reach The Top

InstaForex Analysis InstaForex Analysis 29.09.2022 08:29
Early in the European session, the British Pound (GBP/USD) is trading at around 1.0795. A reversal is going on after the price reached the high of 1.0914 in the American section. On the 4-hour chart, we can see the break of the pennant pattern that was formed after the drop on September 26. The US dollar fell very sharply in the American session yesterday from all-time highs of 114.71 and dropped to a low of 112.50. This technical correction encourages the recovery of the GBP/USD pair. For the outlook to remain positive, the pound must consolidate above 1.0740. If a technical bounce around 6/8 Murray (1.0742) occurs in the next few hours, GBP/USD could resume the bullish bias and could reach the top of the downtrend channel around 1.1025. The rally seen yesterday from the low of 1.0538 to the high of 1.0914 could be a sign that the bearish trend has ended and the pound could start recovery in a few days. Our trading plan for the next few hours is to wait for a technical bounce around the 21 SMA located at 1.0742. This area has become a strong support for the British pound which could suggest a buying opportunity, with targets at 1.0930 and at the psychological level of 1.1000. The price could even reach the resistance of 1.1050 (top of the bearish channel). On the contrary, in case the British pound makes a close below 1.0740 on the daily chart, it could mean the resumption of the bearish movement and GBP/USD could reach the level of 1.0538 printed yesterday in the European session and could fall to the low of the month at 1.0324.     Relevance up to 06:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294731
Escalating Russia-Ukraine Tensions Amplify Oil Supply Risks: The Commodities Feed

Will The European Currency (The Euro) Fall Indefinitely?

InstaForex Analysis InstaForex Analysis 29.09.2022 08:32
The EUR/USD currency pair continued its decline for most of Wednesday. In principle, almost every day, the article can be started with the same words because if a couple of weeks ago we often drew traders' attention to the almost daily fall of the euro, now this currency is updating its 20-year lows every day. Thus, if someone thought that the meetings of central banks were left behind and it was possible to breathe more freely for a while, he was mistaken. Recall that most factors that brought the euro currency so low continue to be relevant. And some are also increasing their pressure on risky assets. The market very cheerfully ignores the news and data that could provide hypothetical support for the euro currency. That is, we get a situation where there are plenty of reasons for the fall of the euro currency, and those factors that could provide support do not affect the mood of traders. Almost a stalemate. From the technical side, everything is also clear. We see strong downtrends on almost all timeframes. If some correction or rollback occurs from time to time on the smallest TF, then on the older TF, it is already as rare as the New Year. And what do we get in the end? The European currency is practically worthless and falling non-stop. We have already said that if we try to take a sober look at the economic situation in the EU and the US, the picture turns out to be not so unambiguous in favor of the dollar. The recession has already begun in the US, and the Fed will not end its aggressive monetary approach. In the European Union, recent quarters have been positive, although GDP growth has been small. However, it was, so all the talk about the "energy recession," about the freezing of Europe this winter, the shutdown of many enterprises, and the popular revolt due to high prices for electricity and heat are just reflections, reasoning out loud. All this may be avoided. But again, the market does not even consider the hypothetical possibility that everything in Europe may not be so bad (we are not talking about some backward African country). Christine Lagarde's speeches – the "hawkish" attitude persists. The betting situation is also ambiguous. A few months ago, when the Fed was actively raising its rate and the ECB was impressively preparing for the first increase in 11 years, it was possible to understand why the euro currency was falling. But now, the ECB has already raised the rate twice and will actively and aggressively raise it at all the next meetings this year. That is, the gap between the rates, at least, has stopped growing. But the euro is still falling, and the dollar is still rising. European inflation is not higher than American inflation, but the euro is still falling, and the dollar is growing. What if, as a result, the Fed rate rises to 4.5% and the ECB rate rises to 4.25%, the European currency will fall indefinitely? From our point of view, the main problem with the European currency is geopolitics. And not only the European currency. We are ready to repeat this daily because all other factors no longer look as significant as geopolitics. Maybe someone does not believe in a global war, but this option is allowed by the markets, investors, and traders. If geopolitical tensions increase, then market participants try to transfer their capital to the most stable and secure currency (or asset). That is why we see the endless growth of the dollar because now there is more talk about nuclear war (or a war between Russia and NATO) than any other news. What kind of mood should traders be in with such a background? Moreover, the dollar is not just the world's reserve currency. The States (the issuer of the dollar) are located very far from the conflict. Everyone remembers that during the Second World War, the US economy practically did not suffer, so it had the opportunity to actively support its allies by providing them with weapons and equipment. The same thing can happen now. The European Union is too close to the war zone and may even accidentally become involved in the conflict (history has also seen such examples). In any case, it is in Europe that the military conflict is now. Therefore, Europe is suffering first of all. The average volatility of the euro/dollar currency pair over the last five trading days as of September 29 is 128 points and is characterized as "high." Thus, on Thursday, we expect the pair to move between 0.9525 and 0.9776 levels. The reversal of the Heiken Ashi indicator downwards signals the resumption of the downward movement. Nearest support levels: S1 – 0.9644 S2 – 0.9521 Nearest resistance levels: R1 – 0.9766 R2 – 0.9888 R3 – 1.0010 Trading Recommendations: The EUR/USD pair maintains a downward trend. Thus, new short positions should now be considered with a target of 0.9521 if the Heiken Ashi indicator is reversed. Purchases will become relevant no earlier than fixing the price above the moving average with a target of 0.9888. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. Moving average line (settings 20.0, smoothed) identifies the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Based on current volatility indicators, volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator—its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 02:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322974
Gold price: Oanda's analyst talks technically possible price of $2000 per ounce

Gold: The Main Trend Is Still Townward But The Bullish Bias Could Resume Again

InstaForex Analysis InstaForex Analysis 29.09.2022 08:46
Early in the American session, gold is trading at around 1,643.74. A strong technical bounce is seen after the price reached the bottom of the downtrend channel around 1,614.71. Gold is located above 0/8 Murray and above the 21 SMA located at 1,626. This gives gold a positive outlook and it is likely that in the next few hours it will continue to rise and may reach the 200 EMA located at 1,656. It could even reach the top of the downtrend channel around 1,660. US Treasury bond yields fell sharply as the US dollar technically corrected away from recent highs, and this helped gold rally from support at 1,614. The main trend is still downward according to the daily, 1-hour, and 4-hour charts. A sharp break of the downtrend channel could accelerate the bullish move and the price could hit the resistance of 2/8 Murray at 1,687. On the other hand, in case there is a pullback to the top of the downtrend channel around 1,656-1,660, it could be an opportunity to sell and gold could fall back towards the support of 1,625. The fact that gold is now above the 21 SMA means that there could be a technical bounce around this area. From this level, the bullish bias could resume again. Finally, if gold loses the support located at 1,626 (21 SMA), it could come under bearish pressure again which could push the price to the bottom of the downtrend channel at 1,610. Gold could even fall to the psychological level of 1,600.   Relevance up to 06:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294739
JPY: Assessing the FX Intervention Zone and Market Conditions

There Are Not Any Grounds For The Euro's (EUR) Growth

InstaForex Analysis InstaForex Analysis 29.09.2022 08:49
EUR/USD 5M. The euro/dollar again showed very high volatility on Wednesday. The second test of the 0.9553 level took place, which is currently a 20-year low, but was a failure. After that, a fairly strong growth of the euro began, which theoretically could become the beginning of a new trend. If you remember, we said that a new trend should start abruptly and strongly, not imposingly. However, at the moment the price is still below both lines of the Ichimoku indicator, so the downward trend still remains. What caused the euro's growth. From our point of view, such a statement of the question is absolutely incorrect. After the euro has lost over 2500 points, a 100-150 points upward move could be a simple pullback. The pair cannot fall forever, there must be at least some pullbacks, and we don't even remember the corrections anymore. Possibly, this pullback was provoked by Federal Reserve Chairman Jerome Powell's speech, although we do not believe that he has changed the vector of his rhetoric dramatically. In any case, a rebound from the critical line will provoke a new round of decline. In regards to yesterday's trading signals, the situation was difficult. Traders tried to break through the level of 0.9553 throughout the European trading session, but failed to do so. Because of this, a fairly large number of signals were formed, most of which turned out to be false. What matters here is how traders interpreted these signals. They could be "seen" as buy signals or sell signals interspersed with buy signals. Long positions could eventually bring a good profit. In the second option, it was necessary to work out the first two signals, and they turned out to be false. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial traders, but at the same time, the euro fell steadily. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not provide any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 29. The euro is falling down ahead of September 30 and amid the general geopolitical background. Overview of the GBP/USD pair. September 29. Theater of the absurd with Nord Stream. Forecast and trading signals for GBP/USD on September 29. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The bears' prospects remain just fine on the hourly timeframe, given that the pair continues to remain below the key Ichimoku lines. Yesterday's rise should not be misleading. Now, if Senkou Span B and Kijun-sen are overcome, then it will be possible to speak of an upward trend, at least a small one. But so far it hasn't. We highlight the following levels for trading on Thursday - 0.9553, 0.9813, 0.9877, 0.9945, 1.0019, as well as the Senkou Span B (0.9804) and Kijun-sen (0.9714) lines. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. Several speeches by representatives of central banks will take place in the European Union and the United States, and only secondary macroeconomic statistics are scheduled for today. In any case, the euro continues to be traded in a very volatile manner, so traders clearly do not need help now. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322970
Prices Of Gold Rose For The Third Straight Session

Gold's Breakout May Announce An Upside Continuation

InstaForex Analysis InstaForex Analysis 29.09.2022 08:55
The price of Gold retreated after reaching 1,662 yesterday. After its strong rally, a temporary drop is natural. The yellow metal could test and retest the near-term downside obstacles before trying to resume its leg higher. Fundamentally, the Canadian GDP stands as a high-impact event today. The economic indicator is expected to report a 0.1% drop versus the 0.1% growth in the previous reporting period. In addition, the US Final GDP could register a 0.6% drop, while Unemployment Claims could come in at 215K in the last week. The fundamentals could move the markets later, so you should be careful. XAU/USD Natural Retreat! From the technical point of view, XAU/USD rallied after escaping from the minor down channel. Now, it has jumped above the major down channel's resistance. Validating its breakout may announce an upside continuation. The 1,654 - 1,659 area represented a resistance zone, so a minor retreat is natural. An upside continuation could be invalidated only if the rate fails to stay above the downtrend line and above 1,654. Gold Forecast! Staying above the broken downtrend line and making a new higher high, breaking above 1,662 validates an upside continuation and brings long opportunities.   Relevance up to 06:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294741
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

The Price Of USD/CAD Maintains A Bullish Bias Despite A Temporary Correction

InstaForex Analysis InstaForex Analysis 29.09.2022 09:04
The USD/CAD pair plunged yesterday as the Dollar Index crashed after registering a strong leg higher. The price maintains a bullish bias despite a temporary correction. It could come back to test and retest the near-term obstacles trying to attract more buyers and accumulate more bullish energy. The pair was trading at 1.3656 at the writing above 1.3602 yesterday's low. Fundamentally, the pair crashed also after the US Pending Home Sales and the Prelim Wholesale Inventories came in worse than expected yesterday. Today, the Canadian GDP is expected to report a 0.1% drop, while the US Final GDP could register a 0.6% drop. The economic data could be decisive in the short term. The US Unemployment Claims indicator is expected to jump from 213K to 215K in the last week. USD/CAD Up-Channel! USD/CAD failed to stabilize below the broken uptrend line and under the median line (ml) signaling exhausted sellers. Poor Canadian data and better-than-expected US figures could increase the rate. The 1.3639 and 1.3602 levels represent downside obstacles. The false breakout through the channel's upside line technically announced a sell-off. USD/CAD Forecast! A new lower low, dropping and closing below 1.3602 activates more declines and brings short opportunities. On the other hand, by staying above the uptrend line and beyond 1.3639, the USD/CD pair may develop a new bullish momentum towards the R1 (1.3720) and up to the upper median line (uml).   Relevance up to 07:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294745
The EUR/AUD Pair May Have The Potential To Continue Its Decline

Will A New Impulsive Rise Of The EUR/USD Pair Develop?

InstaForex Analysis InstaForex Analysis 29.09.2022 09:08
In yesterday's post, we said that a break above minor resistance at 0.9709 would be the first indication that the corrective decline from 1.6038 had been completed. We have now seen that break above. If the break was as significant as we expected, then a new impulsive rally would develop and it should ultimately break above the peak of wave I or A at 1.6038. This is a very long-term picture and of course, this will not be in a straight line. So we will have to break it up in baby steps. The first small part was the break above 0.9709 and if this count is valid, the low at 0.9535 will not be broken at any time. The next minor step is a break above resistance at 0.9907 and more importantly a break above resistance at 1.0051 that really will be a sound foundation under our long-term count.   Relevance up to 07:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294747
The EUR/USD Pair Is Showing A Potential For Bearish Drop

The Euro-Dollar Market: In The Current Situation It Is Hardly Possible To Say That The Situation Has Stabilized

InstaForex Analysis InstaForex Analysis 29.09.2022 09:33
Several market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 0.9556 level in my morning forecast and advised making decisions on entering the market there. The German data was ignored and the bulls' return above 0.9556 at the beginning of the European session occurred without a normal reverse test, after which the level was smeared. The bears tried to protect 0.9586 in the afternoon and even formed a sell signal, but it never came to a major downward move. Only a false breakout in the area of 0.9699, to which the euro rose amid weak statistics on the US, made it possible to get an entry point for short positions. But even there the downward correction did not exceed 15 points. When to go long on EUR/USD: Another series of speeches and interviews by representatives of the European Central Bank is expected today. Little depends on their statements, since the central bank's strategy is clear and understandable to everyone, especially after ECB President Christine Lagarde yesterday once again confirmed her hawkish attitude towards future policy. ECB Executive Board Member Fabio Panetta and ECB Vice President Luis de Guindos are speaking today. Much more interesting will be the data on the indicator of consumer confidence in the euro area, which is likely to decline over the reporting period, which will put even more pressure on the euro. The increase in the consumer price index in Germany in September this year, on the contrary, may trigger the euro's growth, as this will mean a direct increase in interest rates in the future. In case the pair goes down, only a false breakout in the area of 0.9646 creates a new buy signal. There are also moving averages, playing on the bulls' side. The target of the upward correction in this case will be the level of 0.9695, which was formed following the results of today's Asian session. A breakthrough and test from top to bottom of this range, along with strong statistics from Germany, could hit the stops of speculative bears, forming an additional signal to open long positions with the possibility of a surge up to this week's high at 0.9745. A more distant target will be resistance at 0.9807, where I recommend taking profits. In case EUR/USD falls, which is more likely, and the bulls are not active at 0.9646, the pressure on the pair will increase, which will lead to the continuation of the bearish trend. Strong US statistics will help push the euro to new yearly lows. In this case, the best decision to open long positions would be a false breakout around 0.9596. I advise you to buy EUR/USD immediately on a rebound only from 0.9540, or even lower - in the region of 0.9490, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears missed the market, but in the current situation it is hardly possible to say that the situation has stabilized. Demand for risky assets in the face of growing geopolitical tensions will continue to be limited, and the prospects for the European economy will certainly not add confidence to investors in the next six months of the year. The bears' initial task is to protect the intermediate resistance at 0.9695. Forming a false breakout at this level will provide an excellent entry point for short positions, and weak data from Germany will allow for a sharper movement of the pair down to the 0.9646 area. A breakdown and consolidation below with a reverse test from the bottom up of this range creates another sell signal with the removal of bulls' stop orders and a larger fall to the 0.9596 area. A more distant target will be the area of 0.9540, where I recommend taking profits. If EUR/USD jumps during the European session, and there are no bears at 0.9695, the demand for the euro will return, which will lead to a more powerful upward correction. In this case, I advise you not to rush into short positions. The growth of EUR/USD will give a chance to test the resistance of 0.9745. In this scenario, I recommend opening shorts only if a false breakout is formed. You can sell EUR/USD immediately for a rebound from the high of 0.9807, or even higher - from 0.9853, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT report) for September 20 logged a decline in both short and long positions. These data already take into account the September meeting of the European Central Bank and a sharp increase in interest rates immediately by 0.75%, which affected the alignment of positions. However, it must be understood that these data do not take into account the Federal Reserve's recent meeting, which made a similar decision, which kept the gap between central banks' interest rates, increasing pressure on the euro. And in general: everything that is happening now with the eurozone economy is clearly reflected in the euro's rate, which has already fallen to the level of 0.95 and is not going to recover yet. The deterioration of the geopolitical situation in the world, which to a greater extent concerns the eurozone, will greatly slow down the European economy in the autumn-winter period and will surely lead it to recession in the spring of next year. It is not yet possible to talk about medium-term growth prospects for the euro. Even if bad fundamental data comes out in the US, and they will, it will not help the euro especially, as investors will still give preference to safe-haven assets and the US dollar. The COT report indicates that long non-commercial positions decreased by 1,214 to the level of 206,564, while short non-commercial positions fell immediately by 46,500 to the level of 173,115. At the end of the week, the total non-commercial net position became positive and increased from -11,832 to 33,449. This indicates that investors are taking advantage of the moment and continue to buy cheap euros below parity, as well as accumulate long positions, counting on the end of the crisis and the pair's recovery in the long term. The weekly closing price increased and amounted to 1.0035 against 0.9980. Indicator signals: Moving averages Trading is conducted above the 30 and 50-day moving averages, which leaves bulls a chance for a correction. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of growth, the upper border of the indicator in the area of 0.9790 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 08:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322992
USD Stable as Oil Prices Rebound Ahead of US CPI Report Release

The Euro Is Still Under The Strong Bearish Pressure

InstaForex Analysis InstaForex Analysis 29.09.2022 09:38
Technical Market Outlook: The EUR/USD pair has made another lower low at the level of 0.9539, but the bulls bounced strongly about 2.25% towards the level of 0.9750. No nearest technical support in view as the market hits the multi-year lows, however, the resistance is seen at 0.9811. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the down trend reversal is confirmed. Please watch the USDX as the correlation between this two markets (EUR/USD and USDX) is directly opposite. The short-term outlook for the EUR remains bearish. Weekly Pivot Points: WR3 - 0.99372 WR2 - 0.97857 WR1 - 0.97189 Weekly Pivot - 0.96342 WS1 - 0.95674 WS2 - 0.94827 WS3 - 0.93312 Trading Outlook: The EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue far below the parity level, towards the new multi-year lows. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Please notice, there is plenty of down room for the EUR to go as the bears keep making a new, multi-year lows.     Relevance up to 08:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294763
Metals Update: Gold Demand Declines Marginally, Copper and Aluminium Positions Adjusted

The GBP/USD Market And The Next Target For Them Is The Parity Level

InstaForex Analysis InstaForex Analysis 29.09.2022 09:41
Technical Market Outlook: The GBP/USD pair has bounced 5.66% from the lowest level since 1985 located at 1.0352, however the bears had capped the bounce at the level of 1.0929 (first bounce) and 1.0914 (second bounce). The next technical resistance is located at 1.1210 and 1.1410 and only a sustained breakout above this level would change the outlook to bullish. On the other hand, the next target for bears is located at the parity level of 1.0000, so please keep an eye on this level. The intraday technical support is seen at the level of 1.0632 and 1.0538. Weekly Pivot Points: WR3 - 1.16907 WR2 - 1.11401 WR1 - 1.08850 Weekly Pivot - 1.05895 WS1 - 1.03344 WS2 - 1.00389 WS3 - 0.94883 Trading Outlook: The bears are still in charge of Cable market and the next target for them is the parity level. The level of 1.0351 has not been seen since 1985, so the down trend is strong, however, the market is extremely oversold on longer time frames already. On the other hand, in order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th).   Relevance up to 08:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294765
Cryptocurrency: The end of crypto exchange Voyager journey?

The Red Note And Frozen Bitcoins| The BTC/USD Pair Has Bounced again

InstaForex Analysis InstaForex Analysis 29.09.2022 09:45
Crypto Industry News: According to recent reports, South Korean authorities have ordered the OKX and KuCoin cryptocurrency exchanges to freeze funds associated with Terra's founder, Do Kwon. In total, the platforms froze over 5,000 BTC, which is around $ 60 million at the current market price of bitcoin. South Korean authorities have launched an investigation against the founder of Terry (LUNA) and the company behind the cryptocurrency, Terraform Labs, the website said. The country's services concluded that Do Kwon allegedly violated domestic securities laws and issued an arrest warrant for him. The International Criminal Police Organization (Interpol) joined the efforts of the South Korean authorities and issued the so-called The Red Note, Kwon's actual arrest warrant. Interestingly, however, the most interested himself denies that he is hiding at all. "I am writing the code in my living room (...). As I said, I do not try to hide, I go for walks and shopping malls, there is no way that any [members of] CT have run into me in the last few weeks" - he wrote on Twitter. Now law enforcement has begun seizing Kwon's financial resources. According to media reports, founder Terry started transferring funds related to the Luna Foundation Guard (LFG) from the wallet to the exchanges. LFG is an entity created by Terraform Labs to protect the course of the fallen algorithmic stablecoin, TerraUSD (UST). These funds were allegedly community controlled, with no control from Kwon or other company employees. However, a journalistic report suggests the funds were transferred from the wallet to the stock exchanges between September 15 and 18. Around 3,300 BTC went to KuCoin and around 1,950 to OKX. The funds in bitcoin were sent in a few transactions. Technical Market Outlook: The BTC/USD pair has bounced again from the narrow zone lows around the level of $18,640 towards the middle of the zone. Only a sustained breakout above the levels of $20,221 - $20,580 would change the outlook to more bullish, however after the Bearish Engulfing candlestick pattern was made at the level of $20,374, the odds for a breakout higher are very low. The market conditions on the H4 time frame are positive, but the momentum is not strong at all. The nearest technical support is seen at $19,096 and $19,256. The swing low is seen at the level of $18,150. Weekly Pivot Points: WR3 - $19,226 WR2 - $18,987 WR1 - $18,829 Weekly Pivot - $18,742 WS1 - $18,587 WS2 - $18,500 WS3 - $18,259 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout.   Relevance up to 09:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294767
A Truce Between Cardano And Ethereum| Ethereum Movements

A Truce Between Cardano And Ethereum| Ethereum Movements

InstaForex Analysis InstaForex Analysis 29.09.2022 09:50
Crypto Industry News: The Cardano network has always been a competition to the Ethereum blockchain. Of course, this has translated into competition between communities centered around the two chains. This time, however, Cardano founder Charles Hoskinson surprised everyone. He proposes a truce. In a Twitter thread, Charles Hoskinson shared his thoughts on Ethereum and its community. Let us recall that he cooperated with Ethereum (although only for six months and almost ten years ago). Perhaps because of his personal animosities, Hoskinson is sometimes critical of Ethereum. Then he founded Cardano. Today, he seems to be pained by the fact that the Ethereum community continues to ignore the advances Cardano has made over the years. "I've pointed out repeatedly that the top engineers of Ethereum have completely ignored Ouroboros in the last five years," Hoskinson wrote in a tweet. He further argued that this only harms the entire cryptocurrency and blockchain community. He urged users to refrain from falling into this trend, writing that "this means many users are now being forced to make design decisions that are detrimental to them, rather than helping them." "I think that's human nature. But at least we can make a choice not to give in to [the harmful trend]," he added. He further stated that "We don't need to hate anyone or develop bizarre, conspiratorial thinking to achieve our goals. In fact, Cardano does not need cryptocurrency to be successful. " The conciliatory attitude of Cardano's creator comes at an interesting moment when his network went through Vasil's hard fork. However, the project was criticized for a 3-month delay in implementing this change. At the same time, the Merge passed the Ethereum chain, but Vitalik Buterin's team waited for almost 2 years. Technical Market Outlook: The ETH/USD pair had bounced from the demand zone seen between the levels of $1,288 - $1,257, but the bounce was capped at the nearest technical resistance located at $1,358. After the aggressive and dynamic reversal around the level of $1,400, the next target for bears is seen at the level of $1,100, $1,000 and $990, which means the low from 22th September located at $1,220 should be broken as the down trend will continue. The intraday technical support is seen at the level of $1,281, $1,267 and $1,255. Weekly Pivot Points: WR3 - $1,352 WR2 - $1,322 WR1 - $1,302 Weekly Pivot - $1,291 WS1 - $1,271 WS2 - $1,260 WS3 - $1,230 Trading Outlook: The Ethereum market has been seen making lower highs and lower low since the swing high was made in the middle of the August at the level of $2,029. The key technical support for bulls is seen at $1,281 as a part of the demand zone located between the levels of $1,252 - $1,295. If the down move will be extended, then the next target for bears is located at the level of $1,000.   Relevance up to 09:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294769
Tuesday's EUR/USD Analysis: Chaotic Movements on 30M Chart

BHP Shares Rose, Parks In Florida Close Due To Hurricane Ian

Saxo Bank Saxo Bank 29.09.2022 10:02
Summary:  Global markets rallied after the Bank of England decided to stage a ‘temporary’ market intervention, sending bond yields and the USD lower. This seems to have tentatively calmed markets, while end of month and quarter rebalancing could lead to significant flows with notable bond moves and USD strength in this quarter. Oil and gold spiked, and APAC equities futures are returning to green. News of Apple’s production cuts is casting further pessimism on the upcoming earnings season. What is happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rallied after BOE soothed nerves The Nasdaq Composite rallied 2.1%, and the S&P500 gained 1.97%, snapping its six-day rout. Treasuries jumped after the BOE gave some respite and that pushed down 10-year yields 21bps to 3.73% after briefly breaching 4.00%. The dollar also weakened across the board supporting gains. Nasdaq was bolstered by gains from Amazon with its shares gaining 3.2% after it pushed further into wellness, security and the auto industry. On the flip side, Apple’s shares sank about 1.3% on news it is not increasing iPhone production, which casts doubt over the outlook for consumer spending. The U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) plunged on BOE bond buying Once again, the action started from across the pond when the Bank of England surprised the market by announcing a “temporary” plan to purchase long-dated UK Gilts starting immediately yesterday through Oct 14.  The announcement pushed 10-year UK Gilt yields 50bps lower to 4.01% and 30-year UK Gilt yields 106bps lower to 3.93% from the prior day’s 4.99%.  U.S. bond traders took note of the fact that the rout in the U.K. bond market and the Pound Sterling caused the Bank of England to blink and reverse course to roll out a QE-like yield curve control policy and sent in bids to U.S. treasuries.  5-year to 10-year U.S. treasury yields plunged most, down about 20bps from the day before, to 3.97% and 3.75% respectively.  2-year yields fell 14bps to 4.14%.  Market implied terminal Fed Fund rate fell to 4.54% from 4.62 a day before. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) On Wednesday, stocks traded in the Hong Kong bourse notably underperformed those in Shanghai and Shenzhen. Hang Seng Index dropped 3.4% and Hang Seng TECH Index plunged 3.8%.  Risk-off sentiment hung over the market as the Renminbi weakened below 7.20 versus the dollar and Apple’s decision to withdraw its plans to increase the production of new iPhones added to the worries of a slowing global economy.  Apple suppliers, Sunny Optical (02382:xhkg) and AAC Technologies (02018:xhkg) dropped 2.8% and 1.5% respectively.  China Internet names fell across the board, with JD.COM and Bilibili (09629:xhkg) leading the charge lower each plunging 5.6%.  Alibaba (09988:xhkg) lost over 4%.  U.K. headquartered HSBC (00005:xhkg) and Standard Chartered (02888:xhkg) continued their slide, each falling nearly 6% for the day and 11% to 12% since last Friday’s post-mini-budget turmoil in the Pound Sterling and U.K. Gilts.  Both Hong Kong and China developers plunged across the board, mostly by 2% to 6%, with CIFI (00884:xhkg) falling over 32% and being the largest casualty in the property space.  CIFI, the 13th largest property developer in mainland China was reported to have missed a payment on a project-related debt.  Another leading Chinese developer, Country Garden (02007:xhkg) plunged by nearly 13%, being the worst performer in the Hang Seng Index.  Automakers were among the laggards.  Great Wall Motor (02333:xhkg) and XPeng (09868:xhkg) tumbled more than 9%, NIO (09866:xhkg) and Li Auto (02015:xhhg) lost over 7%,  CSI300 fell by 1.6%, with materials, industrial, and information technology dragging down the index most.  Non-ferrous metal, electric equipment, auto, and defense stocks were among the biggest losers.  Banks were outperformers in the A-share market with small gains.  Australia’s ASX200 (ASXSP200.1) futures suggest the market will rally 1.5%; monthly CPI and borrowing/credit data ahead. Given the rally on Wall Street, gains in tech are expected, along with a oil and gold stocks. Meanwhile, the iron ore (SCOA) jumped 1.3% to US$96, which should support iron ore companies higher. Today, on economic news watch; will be Private Sector credit (lending) growth, which will give a gauge into if borrowing has continued to slow amid runaway inflation. Bloomberg’s survey suggest credit growth year on year will slow from 9.1% growth to 9.0% growth. So it’s worth watching the big lenders in Australia, CBA, ANZ, WBC, MQG as well as the smaller banks, SUN and BOQ which are seeing the most lending growth.  Secondly, also on the economic news watch, the ABS will publish its first ever monthly CPI reading, with the data out at 11.30am Sydney time. However keep in mind, only about two-thirds of the items in the CPI data basket will have up-to-date prices each month, including food, clothing, rent, petrol, and holiday travel. Sterling resumed its decline in Asia It was a surprise to see a big move higher in GBPUSD on the BOE intervention yesterday, when the BOE action remains temporary and one that will weigh on sterling, much the same way as we have seen the Japanese yen suffer this year due to the yield cap. GBPUSD however reversed the gains to 1.0838 to drop to lows of 1.0540 but the subsequent weakness in the USD took the pair back to 1.0900 in US session. The downside however returned in early Asian trading hours as pair dropped close to 1.0800. EURGBP dropped back from 0.9066 to 0.8950 but a slight upside returned in Asia. Crude oil (CLU2 & LCOV2) rebounds on worsening geopolitics and drop in US inventories Crude oil prices rallied as supply conditions worsened, as suggested by the first drop in US crude inventories in a month. EIA data showed stockpiles fell 215kbbl last week, while West Coast gasoline stockpiles fell to their lowest level in 10 years. Disruption to supplies due to Hurricane Ian are also causing some concerns, with US president Joe Biden warning oil companies not to hike prices for the second time this week. Furthermore, geopolitical situation has turned more fragile once again with the European Union announcing a new round of sanctions against Russia including a ban on European companies from shipping Russian oil to third countries above an internationally set price cap. Brent futures rose close to $90/barrel while WTI futures got in close sights of $82/barrel.   What to consider? Bank of England’s market intervention to avoid systemic risks The Bank of England on Wednesday announced that it would purchase long date UK gilts to stabilize the market in a “temporary operation”. The move forced UK yields sharply lower, with the 10-year UK Gilt yield moving close to 50bps lower, but US yields were also some 30bps lower. While this may be touted as a yield curve control of some sort, BOE has made it clear that it is a time limited event until October 14 with the intention of restoring orderly market conditions. Pressure is building on Chancellor Kwasi Kwarteng, who faces calls to reverse planned tax cuts. Fed speakers maintain optimism on US economy and markets Fed’s Bostic suggested year-end rates of 4.25-4.50% while the market pricing is still at 4.2% suggesting more room for upward pricing. Although not a voter this or next year, he said that his baseline is a 75bps increase at November meeting and 50bps in December. Meanwhile, he continued to be optimistic on the US economic momentum, as well as ruled out any contagion risks from systemic global events (possibly referring to the UK crisis). Meanwhile, Bostic noted no evidence of dysfunction in the Treasury market at this point. Another Fed speaker, Charles Evans, vouched for a further move into restrictive territory, suggesting a terminal rate of 4.5-4.75% by March as suggested by the Fed’s September dot plot. Apple backs off iPhone production boost; casting doubt over the outlook for consumer spending Apple has reportedly backed off plans to increase production of new its iPhones this year, with demand failing to materialize. That means 6 million extra handsets won’t be produced in the second half of the year. Although it’s not confirmed, Apple is said to instead be focusing on its original production target for its summer period, and produce 90 million handsets. Apple shares fell 1.3% on Thursday, and key chipmakers including Taiwan Semiconductor fell 2.2% and Apple’s biggest iPhone assembler, Hon Hai Precision Industry lost 2.9% amid the electronics supplier selloff, on fears demand will slow. According to our colleague Peter Garnry’s analysis, Apple FY22 Q4 (ending 30 September) earnings estimates are down 20% from the peak in March and that is before adjustments from Apple’s own warning. Apple EPS is expected at $1.26 up 1.4% y/y, but factoring in Apple’s warning it could be a decline of 5-10%. Revenue is expected at $88.5bn up 6.1% y/y compared to 1.9% y/y revenue growth in the previous quarter. It is quite likely that revenue could slip into negative growth for the quarter.Walt Disney and Universal are closing their theme parks due to Hurricane Ian Hurricane Ian strengthened to a Category 4 hurricane and hit the west coast of Florida. Walt Disney (DIS:xnys) closed its Orlando theme parks for at least two days and Comcast’s (CMCSA:xnas) Universal Orlando Resort and SeaWorld Entertainment closed their Florida theme parks.  U.S. Q3 earnings are set to miss significantly to the downside As per Peter Garnry, Saxo’s Head of Equity Strategy, analysts may be way off in their estimates for the S&P 500 for Q3.  It is highly probable that there will be significant misses to the downside followed by gloomy comments from company management about the outlook on margins.   China warned banks about one-way bets on the weakening of the renminbi As the onshore and offshore renminbi weakened below 7.20 versus the dollar, the China Foreign Exchange Market Self-Regulatory Body, attended by PBoC Vice Governor Liu Guoquiang, told banks in a meeting to “safeguard the stability of the market and prevent volatile movements in the exchange rate”, in particular not to make one-way bets on the weakening of the renminbi. BHP update: The giant takes advantage of sterling slump, redeems notes more than half a century early, announces exploration expansion BHP shares rallied to a three-day high yesterday and are likely to see some extra bids after the iron ore price rose. BHP shares lifted after the mining giant paid off debts earlier than expected. The world’s biggest commodity company took advantage of the slump in the sterling against the USD, and used its record profits to redeem pound-denominated notes (due in 2077). This resulted in BHP effectively paying down $643 million of notes early. Last month BHP reported net debt of just $333 million. So will this mean BHP has little to no debt when they report? BHP also announced mining expansion plans; from exploring the idea of mining copper at Cerro Colorado beyond 2023, with Chilean regulation easing, to also spending $12m on exploration in Peru over 10 months (as it sees huge commodity there). BHP also affirmed it’s working toward bringing forward production of its new potash (fertilizer) business to 2026. Australian retail trade hit another record high, ahead of next week’s 6th RBA rate hike. What’s next? Australia retail spending hit another record in August, and rose more than consensus expected, showing Aussie consumers aren’t perturbed by the five RBA rate hikes. Aussie retail sales rose 0.6% in August, up 19.2% year-on-year. The most sales growth came from department store sales, up 2.8% in August to a brand-new record. Household goods sales rose 2.6%, perhaps boosted by winter shopping given the most overall retail growth came from the coldest regions of Australia. The retail record figures give the RBA more room to hike rates with a 0.5% hike likely on the cards at the RBA’s meeting on Tuesday (October 4). In our view, we think retailers or consumer discretionary companies; for instance Harvey Norman (HVN), Bunnings and Kmart owner Wesfarmers (WES) or JB Hi Fi (JBH) are doing it tough here, hurt by higher costs (inflation and wages), while they’re also buffering for higher rates to come. This is why those sectors will likely face downside pressure to come. Inversely, we still remain of the view that commodities offer the most cashflow growth, and likely upside in share price growth, particularly in energy. For more see our Australia resources theme, or our global Commodity basket for inspiration. Currency pairs to watch for month-end and quarter-end  With month-end and quarter-end approaching, our head of FX Strategy outlines the currencies to watch. And whether this seasonal time could put some support under the treasury market and or a ceiling on the US dollar, or if even a tactical consolidation in the two markets will require a change of direction from the Fed. John Hardy also details the US dollar rally finally taking the USDCNH above the 7.20 area (which defined a major top on two occasions in 2019 and 2020) and set a new high-water mark for USDCNH in the history of the offshore CNH currency, getting as high as 7.26 at one point. John covers what to watch next. Read on here for more FX pair updates, see how trends are emerging, and what to watch next.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-29-sept-29092022
A Bright Spot Amidst Economic Challenges

The Move Of The Bank Of England Forced British Yields To Plummet

Saxo Bank Saxo Bank 29.09.2022 10:04
Summary:  Equity markets rallied yesterday after the Bank of England announced an emergency QE action to calm a dysfunctional long maturity gilt market, a move that smashed UK gilt yields lower and took major global sovereign yields lower as well. The market’s inference is perhaps that central bank tightening in general has been taken too far and the Bank of England is perhaps the canary in the coal mine. The US dollar also traded weaker yesterday before rebounding slightly overnight.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities rose sharply after posting new intraday lows for the cycle as the Bank of England QE announcement pushed US treasury yields sharply lower, offering the hope of a pivot in the brutal cycle of rising yields. The rally encourages the technical idea that we have created a double bottom as long as these new marginal cycle lows continue to support the price action. The next area of resistance is around 12,000 in the Nasdaq 100 index. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Following the rally in global equity markets overnight, Hong Kong and mainland China stocks gained, with Hang Seng Index up by 1% and CSI300 0.3% higher. HSBC (00005:xhkg) rose 2.8% on the temporary calm of the U.K. bond market and currency.  China internet stocks and the new energy space were among the top gainers. China property developers failed to participate in the rally, with leading names falling from 1.5% to 9%. In the mainland bourses, medical equipment, healthcare, precious metal, coal mining and chemical stocks outperformed while property developers, shipping, tourism, lodging declined.   Strong USD fades as bond yields punched lower The sharp reversal in bond yields yesterday after yields had ground higher in a seemingly inexorable and increasingly rapid pace over the last few weeks saw the USD trading sharply lower, suggesting that the USD and yields will continue to trade in tightly correlated fashion and as important indicators for global risk sentiment. So far, the move has only reversed a portion of the greenback’s recent gains. A more notable reversal would require, for example EURUSD trading back above 0.9900, GBPUSD back above what looks an impossible 1.1250 or higher, and AUDUSD above 0.6700. Huge sterling focus after BoE move The initial reaction to the BoE emergency QE move (more below) was to sell sterling, as all other things equal, an easing move for a central bank in an otherwise tightening world is a negative for the currency. But perhaps as the market saw the move as the start of a possible trend that might spread elsewhere, sterling actually rose sharply later in the session on the improvement in global sentiment after the BoE’s move helped not only UK yields to sharply reverse, but other yields to do likewise, if less so. GBPUSD rose back to above 1.0900 late yesterday after trading 1.0540 earlier in the session. The gains were reversed in early European trading to below 1.0800 as of this writing. Sterling will remain extremely volatile, with EURGBP worth tracking around the pivotal 0.9000 area. Gold (XAUUSD) Gold rebounded reflexively as the pressure from rising yields and a rising US dollar suddenly faded yesterday. After trading near 1,615 yesterday, the price action ripped all the way back to 1,660+, short of the critical resistance zone into 1,680-1,700 that is the departure point for this latest bear market move. It is clear that global bond yields and the USD will continue to lead the way as coincident indicators. Crude oil (CLU2 & LCOV2) prices rallied as supply conditions worsened... ... as suggested by the first drop in US crude inventories in a month. EIA data showed stockpiles fell 215k bbl last week, while West Coast gasoline stockpiles fell to their lowest level in 10 years. Disruption to supplies due to Hurricane Ian are also causing some concerns, with US president Joe Biden warning oil companies not to hike prices for the second time this week. Furthermore, the geopolitical situation has turned more fragile once again with the European Union announcing a new round of sanctions against Russia including a ban on European companies from shipping Russian oil to third countries above an internationally set price cap. Brent futures rose close to $90/barrel while WTI futures got in close sights of $82/barrel. US treasuries (TLT, IEF) US treasury yields fell sharply in sympathy with UK gilt yields on the surprise announcement of an emergency QE programme from the Bank of England that erased most of the enormous spike in yields there that had developed since the UK government announced its new tax cut package late last week. The price action for the 10-year US treasury benchmark settled near 3.75% after trading slightly above the 4.00% mark yesterday. The Bank of England move brings hope that other central banks may ease off the tightening accelerator. The next important yield level to the downside is the cycle top of 3.50% from June. A 7-year treasury auction yesterday What is going on? Bank of England announces emergency QE to counter systemic risks The Bank of England on Wednesday announced that it would purchase long-dated UK gilts to stabilize the market in a “temporary operation”. The move forced UK yields sharply lower, reversing most of the recent spike that had developed after UK Chancellor Kwasi Kwarteng announced tax cuts late last week. The 30-year UK Gilt yield fell over 100 basis points after the announcement to below 4.0%, although it was trading 3.50% a week ago. While this may be touted as yield curve control of some sort, the BoE claimed that it is a time limited event until October 14 with the intention of restoring orderly market conditions. Pressure is building on the Truss government to reverse the planned tax cuts and shore up fiscal credibility. Apple cancels additional iPhone 14 production capacity Apple announced that it would not move forward with plans for additional iPhone production as the demand for the new phone was not living up to expectations. The increase would have been on the order of 6 million iPhones in the second half of this year, suggesting that the running demand for iPhones in the period is on the order of 90 million, about the same as last year. Demand for higher end new iPhone 14 has been stronger than for the entry-level models. Apple fell 1.3% yesterday after trading as much as 4.5% lower intraday. Key chipmakers were also impacted, including Taiwan Semiconductor, which fell 2.2% and Apple’s biggest iPhone assembler, Hon Hai Precision Industry, lost 2.9% amid the electronics supplier selloff, on fears demand will slow. Fed speakers maintain optimism on US economy and markets Fed’s Bostic suggested year-end rates of 4.25-4.50% while the market pricing is still at 4.2% suggesting more room for upward pricing. Although not a voter this or next year, he said that his baseline is a 75bps increase at November meeting and 50bps in December. Meanwhile, he remained optimistic on US economic momentum and ruled out any contagion risks from systemic global events (possibly referring to the UK crisis). Meanwhile, Bostic noted no evidence of dysfunction in the Treasury market at this point. Another Fed speaker, Charles Evans, vouched for a further move into restrictive territory, saying that the FOMC’s current target range is “not nearly restrictive enough”. Australian inflation rose 7% in the year to July, based on new monthly CPI At this rate it doesn’t appear CPI will peak at just shy of the 8% the RBA forecasts, given price pressures have resumed this month from the largest inflation contributors. Based on the ABS’s new monthly CPI print, some of the largest price jumps year-on-year to July were in fuel (+29.2%) and fruit & vegetables (+14.5%). The concern is that, with La Nina set to hit Australia and population growth continuing, food and housing (rent) prices will continue to rise apace. In September alone, contributors to food prices have risen markedly, as the global supply outlook has weakened amid poor crop conditions. This could tilt the RBA back toward a more hawkish stance. China warned banks about one-way bets on the weakening of the renminbi Yesterday as the onshore and offshore renminbi weakened below 7.20 versus the dollar, the China Foreign Exchange Market Self-Regulatory Body, attended by PBoC Vice Governor Liu Guoquiang, told banks in a meeting to “safeguard the stability of the market and prevent volatile movements in the exchange rate”, in particular not to make one-way bets on the weakening of the renminbi. What are we watching next? End of quarter rebalancing? We have seen aggressive moves across markets this quarter, to say the least, which brings the question of whether significant rebalancing flows are set for the quarter end this Friday. The relative bond performance has been perhaps worse than that for equities, while in FX the focus may be on possible rebalancing after a tremendous USD upsurge in Q3. Porsche shares to debut today (P911:xetr) Volkswagen set the listing price for Porsche’s shares at €82.50, which would value the company at €75 billion. The shares will begin trading today for the company and this will be the largest IPO in over a decade. Earnings calendar this week The chief action this week is up with today’s earnings reports from H&M (this morning before market open at 0700 GMT), Nike (after US market close today at 2100 GMT), and Micron Technology (after market at 2030 GMT). The earnings from Micron the most interesting to watch as we already know H&M and Nike are seeing weak demand. Micron has exposure to the consumer electronics industry and manufactures memory chips in Asia which means that the company sits in at the intersection of many interesting trends. Today: Polestar Automotive, H&M, Nike, Micron Technology, CarMax Friday: Carnival (postponed from last week), Nitori Economic calendar highlights for today (times GMT) 0700 – Spain Flash Sep. CPI 0745 – ECB's Centeno to speak 0800-0815 – Multiple ECB speakers 0900 – Eurozone Sep. Confidence surveys 1130 – UK Bank of England Deputy Governor Ramsden to speak 1230 – Czechia Central Bank Rate Announcement 1230 – Canada Jul. GDP 1230 – US Weekly Initial Jobless Claims 1330 – US Fed’s Bullard (voter 2022) to speak 1430 – US Weekly Natural Gas storage change 0130 – China Sep. Manufacturing and Non-manufacturing PMI 0145 – China Sep. Caixin Manufacturing PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:   Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-29-2022-29092022
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

Today The Market Is Expecting A Further Increase In The GBP/USD Pair

InstaForex Analysis InstaForex Analysis 29.09.2022 10:26
Analysis of transactions in the GBP / USD pair The price test of 1.0653 occurred at the moment when the MACD line was just starting to move below zero, which was a good signal to sell. This led to a decrease of over 90 pips and a test of 1.0567. Then, buying after a rebound from that level gave at least 40 pips of profit. There are no statistics on the UK today, so count on a further growth in GBP/USD. Yesterday's intervention of the Bank of England in the bond market definitely helped pound recover a bit, but the situation is still shaky, in which another massive sell-off may occur once the positive effect dries up. The upcoming US data on jobless claims and GDP may also raise dollar demand if the figures exceed expectations. For long positions: Buy pound when the quote reaches 1.0818 (green line on the chart) and take profit at the price of 1.0907 (thicker green line on the chart). Although growth is unlikely, a correction may occur if the Bank of England continues to interfere in the markets. In that case, traders could buy as long as the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.0764, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0818 and 1.0907. For short positions: Sell pound when the quote reaches 1.0764 (red line on the chart) and take profit at the price of 1.0697. Pressure could return at any moment, but take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.0818, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0764 and 1.0697. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 09:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322998
Why India Leads the Way in Economic Growth Amid Global Slowdown

Bank Of England Intervention Boosts Risk Appetite And The Possible End Of The iPhone Era

Swissquote Bank Swissquote Bank 29.09.2022 10:39
The Bank of England (BoE) jumped in the UK’s shattered sovereign market to buy long-term UK bonds yesterday, because apparently, they have been warned that collateral calls on Wednesday afternoon could force investors to further dump their UK sovereign holdings. And the UK could no longer afford another heavy selloff wave on its sovereigns. Will the enthusiasm last?  The British 10-year yield fell 10% yesterday, and the pound jumped past the 1.08 mark against the US dollar and consolidated below 0.90 against the euro. The FTSE recovered early losses and closed the session 0.30% higher, gold recovered to $1662 an ounce, American crude rallied past the $80 per barrel, also boosted by the Hurricane Ian’s negative impact on supply. Around 11% of the Gulf of Mexico production was halted due to the storm.The S&P500 gained almost 2% yesterday to above 3700 level, while Nasdaq jumped more than 2%. Will the enthusiasm last? Not so sure. Yesterday’s price action was a sugar rush, triggered by the BoE intervention. Enthusiasm will likely fall as the level of blood sugar falls across the financial markets. Amazon is on the rise Amazon jumped 3% as investors liked the new devices at Wednesday’s annual device event, and Apple slipped on announcement that it will, finally, not produce more iPhones compared to last years.In Europe, all eyes are on Porsche that starts flying with its own wings today! Watch the full episode to find out more! 0:00 Intro 0:27 BoE finally jumps in 3:24 BoE intervention boosts risk appetite, but for how long? 5:30 Amazon convinces, Apple disappoints 8:54 Porsche is now up for grab! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #BoE #intervention #UK #gilt #GBP #Hurricane #Ian #crude #oil #energy #crisis #XAU #FTSE #sovereign #bonds #rally #Apple #Amazon #Porsche #IPO #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Events On The Pound (GPB) Market Continues To Affect Other Currencies, Such As Euro (EUR)

InstaForex Analysis InstaForex Analysis 29.09.2022 10:55
UK Prime Minister Liz Truss and Finance Minister Kwasi Kwarteng's plan to support the economy met with an unexpected rebuff not only from British banks, but also from the Bank of England itself. The International Monetary Fund (IMF) also expressed concern that its implementation could trigger the onset of a global financial crisis, similar to what happened in 2008. In the end, even the House of Commons, where the majority of seats belong to the conservative party headed by Liz Truss, subjected this plan to the most severe criticism and demanded its total revision. All of these convinced investors that it will not be implemented in the version it is now, which somewhat calmed the markets and became a reason for a local rebound. But if the Cabinet of Ministers insists on going with the plan, the situation will quickly develop into another political crisis, which will have a negative impact on pound. If the plan is revised, then a correction may continue. The scale of what is happening with pound is so huge that it continues to affect other currencies, such as euro. EUR/USD hit a new local low, but sellers failed to hold on to this new value, prompting a rebound of about 200 pips. Nevertheless, the trend remains bearish, moreso since short positions surged after the recent price movement. Volatility was high in GBP/USD. It first fell below 1.0600, then returned to weekly highs. Even so, market mood is bearish, and there is a huge chance that it will remain trading within 1.0600/1.0900.   Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322988  
ECB's Knot: July Rate Hike Necessary, Beyond July Uncertain; Canadian CPI Supports Rates on Hold; Global Crypto Market at $1.2 Trillion; Oil Market Tightens with Russian Shipments Drop and China's Support Measures

As A Result Of The Bank Of Japan Intervention, The USD/JPY Pair Went Into A Steep Peak

InstaForex Analysis InstaForex Analysis 29.09.2022 11:03
The USD/JPY pair continues to tread in the 144-145 range, in which it has been stuck since the beginning of the week. Consolidation is pretty boring for both bulls and bears, but there is no trigger on the horizon yet. This year, the Japanese currency has fallen in price relative to its American counterpart by more than 20%. The reason for the weakening of the yen was the strong monetary divergence between the US and Japan. Last week, the dollar-yen pair set another high-profile record. After the Federal Reserve raised rates again, and the Bank of Japan left the indicator unchanged, the quote jumped to a new 24-year high at 145.90. The sharp fall of the yen forced the Japanese government to intervene in support of its national currency for the first time since 1998. As a result of the intervention, the USD/JPY pair went into a steep peak. However, the asset did not stay as a loser for long. It only took a couple of days for it to get back on track leading to the main goal for today – level 145. Since the beginning of this week, the dollar-yen pair has already come close to the cherished mark several times, but each time it rolled back. According to analysts, the main deterrent for dollar bulls at the moment is the risk of repeated currency intervention. Given the huge number of warnings from the Japanese authorities, traders still prefer not to get into trouble. However, the situation may change dramatically if a particularly powerful trump card in favor of the dollar appears on the market. You may ask: isn't it here now? Indeed, the dollar received strong support from the Fed last week. The US central bank not only raised rates, but also made it clear that it intends to tighten its monetary policy in the future. This week, American politicians have further intensified hawkish rhetoric, which contributed to the explosive growth of the dollar. The greenback has reached a new 20-year high, showing impressive dynamics in almost all directions, but not paired with the yen. The psychologically important 145 barrier still remains impregnable for the USD/JPY asset. This suggests that the market has already taken into account the further growth of discrepancies in the monetary policy of the Fed and the BOJ. Now traders need specifics: how big the gap in US and Japanese interest rates can become. If in the near future American officials again talk about raising the indicator by 100 bps, perhaps this will be the very impetus for the dollar, which will move it from the dead point. – Of course, the Japanese Ministry of Finance is aware of the current vulnerability of the yen. Probably, the authorities will continue to intimidate traders with interventions to deter speculators, Rabobank analysts warn. – Nevertheless, we are still guided in our 3-month forecast for the USD/JPY pair to the level of 147. As for the short-term dynamics of the asset, do not expect miracles in the coming days. Most experts believe that the dollar-yen pair will remain in the zone of broad consolidation. The technical picture for the USD/JPY 200-day exponential moving average at 141.20 scales higher. This indicates that the long-term trend is still stable. At the same time, the relative strength index (RSI) fluctuates in the range of 40.00-60.00, which indicates that the movement continues within the current range. For a decisive bearish reversal, the asset needs to fall below the previous week's low at around 140.35. Dollar bulls may push the pair higher after overcoming the previous week's high at 145.90. This may lead the quote to the August 1998 high at 147.67. And its breakthrough will send the dollar even further upward – to psychological resistance in the area of 150.00. Relevance up to 09:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/323012
Canada's Inflation Expected to Ease in May, Impacting BoC's Rate Decision

Oh My! Forex Market Rocks! Could Anything Change The EUR/USD Trend? | Let's Check Comments On Euro, British Pound And USD!

ING Economics ING Economics 29.09.2022 11:31
Events in the UK yesterday marked the first time this stagflationary macro environment risked evolving into a financial crisis. Fortunately, the Bank of England intervened aggressively in the Gilt market and market conditions have temporarily stabilised. However, there will be no room for complacency this autumn as volatility returns to 2020 highs USD: Trying to avoid a crisis Traded levels of volatility continue to rise in FX and debt markets. Remember these represent expected levels of volatility and are really being driven by the big swings we are seeing in spot FX and bond yields. Interestingly, equity volatility is a lot more subdued with perhaps equity investors already defensively positioned for late-cycle equity losses.   So far, this stagflationary environment and the aggressive response from central bankers - especially the Federal Reserve - have seen financial assets adjust as one would expect at this stage in the economic cycle. Up until recently, conditions in FX and debt markets had been reasonably orderly and there was no hint of financial stress in the system. Sadly the same could not be said of frontier markets, where the likes of Sri Lanka defaulted earlier this year.   Yesterday, however, saw the Bank of England's Financial Policy Committee take the decision to break the 'doom loop' at the long end of the UK Gilt market as margin calls on pension funds and the need to raise cash risked a downward spiral for long-dated Gilts. In effect, this is the first big intervention from a G10 central bank in this cycle to avert a financial crisis. It may not be the last. It serves as a reminder to policymakers around the world that any perceptions by the market of a policy misstep will be heavily punished. And with the Fed to keep hiking into a slowdown - probably taking rates to the 4.25/4.50% area into 1Q23 - these conditions may well be with us for the next six to nine months. What does this all mean for FX? The dollar will continue to be favoured - especially if it is soon to be paying 4% on deposits. And tighter liquidity conditions as central banks battle inflation around the world mean still higher levels of FX volatility. This will discourage a return to carry trade strategies meaning that high-yielding FX and commodity currencies will not be given the benefit of the doubt. We, therefore, continue to favour defensive strategies in FX - which means backing the dollar and looking for the Swiss franc to outperform in Europe as the Swiss National Bank (SNB) guides it higher.   Out of interest as well, the US trade balance has narrowed back to levels last seen in October 2021 - meaning that the dollar's Achilles Heel - the trade deficit - does not look as vulnerable as it could. Expect there to remain strong demand for the dollar on dips - e.g in the 112.50/113.00 area for DXY. Chris Turner EUR: Gearing up for new highs in inflation Beyond geopolitics, the short term focus in the eurozone is on inflation - where the September readings (Germany today, eurozone tomorrow) should mark new highs. The European Central Bank (ECB) is talking tough and will probably deliver on the 75bp of hikes expected for the 27 October meeting. We doubt this provides much support for the euro, however. 0.9500 has proved a good support area for EUR/USD after all and the BoE action did provide a brief reprieve to non-dollar currencies across the board. But we see nothing yet to reverse this powerful underlying downtrend in EUR/USD and expect any rallies above 0.97 to prove brief. Chris Turner GBP: Cable gets a reprieve Aggressive BoE intervention in the UK Gilt market was firmly in the realms of financial stability and we would overlook the hyperbole of 'fiscal dominance' or 'monetary financing here. This was a necessary, temporary intervention to ensure the orderly function of the UK Gilt market - which our debt strategists describe as the 'bedrock' of the UK banking industry. Yet there is only so much the BoE can do to support cable, since we think FX intervention and emergency rate hikes are not on the table. And we see no change in the strong dollar story over the next six to nine months. Instead, expect cable volatility to stay high (one week realised volatility is a staggering 34%) and be beholden to any fiscal updates. As we have been saying recently, trying to hold sterling together until the 3 November BoE rate meeting or 23 November fiscal update will be a tough challenge for policymakers. As we said in our reaction piece yesterday, we doubt cable holds gains to 1.08/1.09 and the bias has got to be for a 1.0350/1.0500 retest. Chris Turner CEE: CNB confirms end of hiking cycle At today's Czech National Bank (CNB) meeting, we expect rates to be unchanged in line with surveys and market expectations. The main news in our view will be the confirmation of an end to the hiking cycle. We cannot expect a new central bank forecast today, but as always, we will see the governor's press conference. We expect the topic of FX intervention and the long-term level of interest rates, or the timing of the first rate cut, to be addressed. However, the CNB will mainly want to present unchanged rates as stability in uncertain times. From an FX perspective, it is evident from last week's data that the CNB has returned to the market for the first time since the August meeting, but intervention volumes have so far been minimal. We believe that part of the market is betting on an end to CNB intervention or a change in the central bank's approach again. However, we do not expect any change and so we can see them closing short CZK positions after the meeting, resulting in a stronger koruna. In the rest of CEE, Tuesday's jump in the gas price translated to FX yesterday, as we expected, with the Polish zloty generating a loss of 0.4% and the Hungarian forint 1.5%. In Hungary, the move was supported by a further drop in market rates as a result of Tuesday's National Bank of Hungary decision. Unless we see a further rise in gas prices, we believe the forint has already taken its losses and should stabilise around EUR/HUF 412. The Polish zloty, on the other hand, still has room to move closer to 4.82 EUR/PLN. Moreover, in our view, the market is still too hawkish on Polish rates. However, Friday's inflation release from Poland will be crucial in this sense. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
It's Here! Announcing the Release of B2Core iOS v1.14.0

It's Here! Announcing the Release of B2Core iOS v1.14.0

B2Brokers Group of Companies B2Brokers Group of Companies 29.09.2022 11:39
Our B2Core iOS app has been updated with many new features that will improve the user experience and make it more enjoyable. Here are some of the new features: Instant authentication with Face ID Limits on deposited funds and KYC verification level An updated 'What's New' screen Pop-ups verifications Additionally, we have enhanced the Trading Platform cards and redesigned the Verification screen. Face ID for Instant Sign-in Face ID works so well because it makes it easy to keep up with today's fast-paced world. You can instantly sign back into an app with Face ID authorization if you have previously logged in. Additionally, Face ID is highly secure and uses the most advanced authentication method available. No more typing in passwords or remembering usernames — you'll always be ready to go. Funding Limits According to Verification Levels Once you log into your account, you will now be able to see your KYC verification status and transaction limits. The Verification screen in the Settings menu, as well as the Pop-up verification window, will display this information. Based on the level of KYC verification you have, there are daily limits on how much money you can deposit, withdraw, or transfer. In order to increase your daily and monthly withdrawal limits, you may submit additional identification documents. Update Notification Screen The 'What's New' screen in the app is a great way to keep up-to-date with the latest releases and updates. It displays the complete release notes for each update, detailing all of the new features included. If a new version of the app is available in the AppStore, the Dashboard will display an update notification screen. Users can then download the current version of the app by clicking the update button on the 'What's New' screen. Stay up-to-date on our latest releases with this handy feature! Verification Pop-up Modal Screens We place safety and security at the top of our priority list. Thus, to protect our users, we've added a Verification pop-up modal. When the KYC verification level is not sufficient, a window will appear that will inform the user that there is a restriction on their access to certain operations. The window will explain the limitations of the current verification level and ask for documentation to be provided. As an example, if a user tries to deposit with the "Deposit" option, but they are unable to do so because they have a certain level of verification, then they will be notified of this fact, shown the limitations of their current verification level, and offered a button to upgrade their verification level. Improved UI We are pleased to introduce significant improvements to our application design, beginning with the Trading Platforms cards. Leverage, Free Funds, Free Margin, and Order Type are now displayed on the Trading Platforms cards. A new button on the Transfer card enables users to deposit funds to the trading platforms. Having easier access to funding will enhance users' trading efficiency. The new Verification screen makes it easy to keep track of the verification process and ensure that all required documents are submitted. The improved design and functionality of the new screen will make it simpler and more efficient for users to verify their account information. Verification status and available levels are now more readily visible. This new Verification screen will make getting verified and keeping track of progress for users much easier. Conclusion Our current version marks the beginning of a new application design. We intend to make the interface more efficient to satisfy the user's trading objectives, so we'll be making a significant number of UI changes in the next version. Streamlining processes and switching between tasks will be much easier with the new design. Continually striving to provide the best user experience is our goal, and we hope that our users will enjoy the latest enhancements. Our company is excited about these changes, and we are confident that they will allow us to serve our loyal customers better. You can try the latest app right now by downloading it! Let us know if you have any questions or concerns. Stay tuned for more!
China's Deflationary Descent: Implications for Global Markets

A Strong Bearish Signal For The Equity Markets And A Significant Support Factor For Dollar (USD)

InstaForex Analysis InstaForex Analysis 29.09.2022 12:03
Stock markets in Europe and North America bounced back on Wednesday, thanks to growing demand for US Treasuries, which put pressure on their yields and dollar. There were no special reasons for growth, but the closing of short positions after a multi-day sell-off helped the markets recover the previous losses. However, the hawkish rhetoric of the Fed pointed to a continued increase in interest rates in the foreseeable future, so stock futures started to decline again today. Minutes ahead of the European trading session, the yield on 10-year bonds grew by 3.15% to 3.824%, while futures fell from 0.36% to 0.70%. This is a strong bearish signal for the equity markets and a significant support factor for dollar. Due out today is Germany's data on consumer inflation and revised US GDP figures for the second quarter. Forecasts say the former will rise to 1.3% m/m and 9.4% y/y, which will prompt the ECB to raise rates again by 0.75%. But this is unlikely to stimulate a strong growth in euro as the currency is affected by the current economic situation in the Eurozone. The latter, meanwhile, is expected to show a slight decrease to -0.6%, but a much larger fall will put pressure on market sentiment, which will increase the sale of stocks and purchases of dollar. Forecasts for today: USD/CAD The pair is currently testing the level of 1.3715. If it rises above it, further growth to 1.3835 is possible, especially amid a decline in crude oil prices and general negative dynamics in the markets. USD/JPY The pair is currently testing the resistance level of 145.00. If it rises above it, further growth to 146.00 is possible, especially amid a general negative dynamics in the markets and resumption of growth in the yield of US Treasuries.   Relevance up to 09:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323002
Reserve Bank of New Zealand: Kenny Fisher says he expects a 25bp rate hike on May 24th

The New Zealand Dollar To US Dollar (NZD/USD) Pair: The Two-Year Downward Trend Can Be Reversed

InstaForex Analysis InstaForex Analysis 29.09.2022 12:12
NZD/USD: The chart shows the movement of #NZD/USD in the daily (D1) chart. According to technical analysis, there is a key support level, at which the two-year downward trend can be reversed. The pair has been moving towards this direction for some time, particularly in the range of 0.5435. Breaking through it will certainly jump-start the formation of a new medium-term trend, but that is unlikely to happen at least until November 4. Also, its development will depend on the resistance levels 0.5680 and 0.5960. But if the quote goes lower than 0.5435, the trend will remain bearish and there will be no strong upward movement. Good luck!   Relevance up to 11:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323020
German Business Confidence Dips, ECB's Lagarde Hosts Central Banking Conference in Portugal, EUR/USD Drifts Higher

In The Morning US Dollar (USD) Was Up, British Pound And Euro Down | US Stocks: S&P 500 Gained Almost 2% Yesterday, Dow Jones Added 1.88%, Nasdaq Increased By 2%

Conotoxia Comments Conotoxia Comments 29.09.2022 12:40
The British pound is slipping nearly 1 percent against the US dollar this morning and is back below the 1.08 level. The dollar, in turn, seems to be strengthening against all major G-10 currencies. The euro is weaker by about 0.7 percent and is quoted at $0.9658 as of 07:54 GMT+3. Read next: Tim Moe (Goldman Sachs) Comments On USD And Turbulent Times For Markets In General, Ole Hansen (Saxo)Talks Nord Stream | FXMAG.COM S&P futures are unchanged, with the Nasdaq slipping 0.2 percent, while Asian stocks are rebounding from two-year lows after Wednesday's rally on Wall Street. The Hang Seng rose 1.2 percent and the Shanghai Composite rose 0.3 percent, Bloomberg reported. During Wednesday's U.S. session, the Dow Jones rallied 1.88 percent, the S&P 500 went up 1.97 percent and the Nasdaq Composite rose 2.05 percent. These moves came after the Bank of England announced it would buy bonds to stabilize financial markets, causing global bond yields to fall, which in turn could support a broad rally in risky assets. Today, however, investors will have to reassess the actions of the British. Bank of England from QT to QE Political tensions are mounting in the UK, with the aim of rolling back the announced tax changes. These have yet to take effect, and in fact have led to a collapse in the British financial market, especially the bond market. The British, with their decisions, came close to causing the collapse of their pension funds through a sharp drop in bond prices. Only the intervention of the Bank of England stabilized the situation. The Bank of England announced Wednesday that it had bought £1.03 billion worth of UK government bonds. The bank received bids to buy gilts worth a total of £2.59 billion. The BoE specified that it would buy "gilts with a residual maturity of more than 20 years in the secondary market. The bond-buying program, funded by the central bank's reserves, will last until October 14, BBN reported. In addition, the UK government has received a clear warning from the IMF and rating agencies that it is not welcome to loosen fiscal policy, and temporarily monetary policy as well, at a time when the global battle against inflation is underway. The political and financial drama in the UK seems therefore ongoing, and its next chapters are yet to be written. Source: Conotoxia MT5, GBPUSD, H1 Dollar stronger again The US currency may be helped by further statements from representatives of the US Federal Reserve. They may be making it clear that no Fed pivot is in question at the moment. Federal Reserve Bank of Chicago President Charles Evans said on Wednesday that the interest rate should reach its peak in March 2023. Saying that the Fed should have started raising rates earlier is "fair," he also noted at an event organized by the London School of Economics. The central bank could have chosen to start earlier by raising interest rates in small steps over a long period of time, or it could have chosen to do what it ultimately did, which was to introduce higher rates more quickly as soon as inflation surged, he explained. The Fed's analysis at the time indicated that the outcome of the two policies would not have been "significantly different," Evans added. Source: Conotoxia MT5, USDIndex, H4 Did you know that CFDs allow you to trade on both falling and rising prices? Derivatives allow you to open buy and sell positions, and thus invest with both rising and falling quotes. At Conotoxia, you can choose from CFDs on more than 100 currency pairs.For example, if you Want to find a CFD on GBP/USD, you just need to follow 4 simple steps: To access Trading Universe - a state-of-the-art center for financial, information, investment and social products and services through a single Smart account, register here. Click "Platforms" in the "Invest&Forex" section. Choose one of the accounts: demo or live On the MT5 or cTrader platform, search for the CFD currency pair you are looking for and drag it to the chart window. Use the one-click trading option or open a new order with the right mouse button. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

The UK Prime Minister Truss Is Under Heavy Pressure, The Pound (GBP) Is Down Sharply Today

Kenny Fisher Kenny Fisher 29.09.2022 14:04
The roller-coaster continues for the British pound, which is down sharply today. In the European session, GBP/USD is trading at 1.0774, down 1.05%. It has been a remarkable week for the British pound, which has exhibited sharp volatility since Friday, when Chancellor Kwarteng unveiled his mini-budget. The package included unfunded tax cuts, despite weak a weak economy and inflation hovering at 9.9%. The financial package was criticised at home as well as abroad; the International Monetary Fund and US Commerce Secretary Gina Raimondo also panned the plan. Former US Treasury Secretary Lawrence Summers had perhaps the most unkind cut of all, saying that the UK had the worst economic policy of any major country. The British pound fell 3.6% on Friday and kept falling on Monday, hitting a record low of 1.0359. Bond prices tumbled and the turmoil became so acute that the Bank of England intervened on Wednesday in order to avoid a possible crash in the bond market. The BoE said that the crisis threatened financial stability and purchased just over one billion pounds in securities and will continue purchasing securities every day until October 14th. The bailout could hit over 60 billion pounds. The BoE’s announcement sent bond prices higher and stabilized the bond market. The pound shot up 1.45% on Wednesday, but has reversed directions and is down sharply today. Prime Minister Truss is under heavy pressure to shelve the financial plan which has caused chaos in the markets, but for now, the government is standing firm and says it won’t back down. Truss and Kwarteng will have to face the music at the Conservative Party’s annual conference next week, and it’s likely we haven’t heard the last word on the mini-budget which has triggered a major financial crisis. . GBP/USD Technical GBP/USD is testing support at 1.0782. Next, there is support at 1.0644 There is resistance at 1.1052 and 1.1184 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

Volatility Is In The Currency Markets This Week|USD/CAD Pair Has Jumped

Kenny Fisher Kenny Fisher 29.09.2022 14:06
The Canadian dollar continues to show sharp volatility this week. USD/CAD has jumped 0.65% today and is trading at 1.3693. We are seeing significant volatility in the currency markets this week, with weaker risk appetite propelling the US dollar higher. The Canadian dollar been hit by the double whammy of an aggressive Federal Reserve and an escalation in the war in Ukraine which has dampened risk appetite. It has been a miserable September for the Canadian dollar, as USD/CAD has climbed 4.5%. There are additional headwinds for the Canadian dollar. The Bank of Canada has led the way with a fast pace of tightening, raising its benchmark rate to 3.25%. The Federal Reserve has caught up with last week’s 0.75% hike, and the markets are pricing in a higher terminal rate for the US than for Canada (4.60% vs. 4.10%). This means that the Canadian dollar will not benefit from a higher interest rate differential, and Canadian bond yields have fallen below US Treasuries. As well, Canada is a major oil exporter and the drop in the price of oil is weighing on the Canadian dollar. We are already seeing a sharp drop in long positions in the Canadian dollar, and that trend could continue. Markets brace for decline in GDP Canada releases the July GDP report later today. The economy is showing little movement and gained a negligible 0.1% in June. The consensus for July is a decline of 0.1%. A sharper drop than expected could sour investors on the Canadian economy and extend the Canadian dollar’s losses. . USD/CAD Technical USD is testing resistance at 1.3725. The next resistance line is 1.3862 There is support at 1.3477 and 1.3340 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Forex: What to expect from British pound against US dollar - January 17th

Tips For Traders On Short And Long Positions Of The GBP/USD Pair

InstaForex Analysis InstaForex Analysis 29.09.2022 14:22
In my morning forecast, I paid attention to the level of 1.0818 and recommended making decisions on entering the market. Let's look at the 5-minute chart and figure out what happened. After a slight Asian correction, buyers of the pound returned to the market, counting on more global support from the Bank of England. The breakthrough and the reverse test of 1.0818 led to a good buy signal, which increased by more than 80 points. Then a resistance test of 1.0899 took place, from which it was possible to get a good sell signal. At the time of writing, the pound has already gone down more than 50 points. To open long positions on GBP/USD, you need: The pound buyers are counting on a dash up - they need to do something with the resistance of 1.0876, which they hit in the first half of the day. Let's see how the market reacts to the data on the number of initial applications for unemployment benefits in the United States and the change in GDP for the second quarter of this year. The fundamental background is not serious, so the bulls may be able to pull themselves together and break through to the weekly maximum. Statements by FOMC representatives James Bullard, Loretta Mester, and Mary Daly may slightly cool their ardor in the afternoon. In the case of a decline in GBP/USD, the optimal scenario for buying will be the formation of a false breakdown in the 1.0800 area, where the moving averages are playing on the buyers' side. This will give an excellent entry point to return to 1.0876. Only after getting above this range will it be possible to talk about building a further upward correction for the pair to move to 1.0958, where it will become more difficult for buyers to control the market. A more distant target will be the 1.1018 area, leading to a fairly large market capitulation of sellers. I recommend fixing profits there. In the event of a fall in GBP/USD against the background of hawkish statements by representatives of the Federal Reserve System and the absence of buyers at 1.0800, the pressure on the pound will return. If this happens, I recommend postponing long positions to 1.0738 and 1.0676. I advise you to buy there only on a false breakdown. You can open long positions on GBP/USD immediately on a rebound from 1.0617 or in the minimum of 1.0545 to correct 30-35 points within a day. To open short positions on GBP/USD, you need: Protecting the nearest resistance at 1.0876 remains an important task for the second half of the day. Yes, the bears showed themselves for the first time, and while trading will be conducted below this range, we may reach the support of 1.0800 – we need a good fundamental reason or another news about problems in the UK markets. In case of a re-growth of the pair, only the formation of a false breakdown at 1.0876 will confirm the presence of buyers in the market and return pressure on the pound, which forms a sell signal based on the development of a bearish trend and a decline to the nearest support of 1.0800. A breakthrough and a reverse test from the bottom up of this range, which was formed at the end of the first half of the day, will give an entry point for sale with a fall to a minimum of 1.0738, but a much more interesting target will be the 1.0676 area, where I recommend fixing profits. With the option of GBP/USD growth and the absence of bears at 1.0876, the situation will return to the control of buyers, albeit only for a while, which will lead to an update of the next weekly maximum in the area of 1.0958. Only a false breakout at this level forms an entry point into short positions in the expectation of a downward correction. If there is no activity, there may be a jump up to the maximum of 1.1018. I advise you to sell GBP/USD immediately for a rebound, counting on the pair's rebound down by 30-35 points within a day. The COT report (Commitment of Traders) for September 20 recorded an increase in long positions and a reduction in short ones. However, this report does not consider what is currently happening in the market, so you do not need to pay much attention to it. The changes that have taken place in just a few days in the UK are now dictating the pair's direction. Last week, the Bank of England raised interest rates by only 0.5%. And they already regret it since, after that, the Ministry of Finance announced that they were ready to provide unprecedented assistance to households to cope with high energy prices. They also announced a large tax cut to support and stimulate the economy. However, they forgot to mention that this will further accelerate inflation, which the Bank of England is not very good at coping with. This provoked a pound sell-off by almost 1,000 points in two days. Investors took advantage of this moment and the well-depreciated pound and bought it off, but it is difficult to say that the market eventually found the bottom. There are a lot of statistics out of the US this week, which could put pressure on the GBP/USD pair. The latest COT report indicates that long non-commercial positions increased by 160 to 41,289. In contrast, short non-commercial positions decreased by 13,083 to the level of 96,132, which led to a slight reduction in the negative value of the non-commercial net position to the level of -54,843 versus – 68,086. The weekly closing price collapsed from 1.1392 to 1.1504. Signals of indicators: Moving Averages Trading is conducted above the 30 and 50-day moving averages, indicating the bulls' attempt to build a correction. Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1. Bollinger Bands In case of growth, the upper limit of the indicator around 1.0900 will act as resistance. Description of indicators Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow. Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green. MACD indicator (Moving Average Convergence / Divergence - moving average convergence/divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-profit speculative traders, such as individual traders, hedge funds, and large institutions use the futures market for speculative purposes and to meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between the short and long positions of non-commercial traders.   Relevance up to 13:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323036
The EUR/USD Price May Fall Under 1.0660

Forex: Euro To Us Dollar Is A Really Attractive Asset These Days. What Can We Expect From EUR/USD?

InstaForex Analysis InstaForex Analysis 29.09.2022 15:57
The EUR/USD pair retreated a little today after reaching 0.9750. After its strong growth, a temporary retreat was natural. Now, the rate seems strongly bullish again as the Dollar Index ended its rebound. DXY's deeper drop should push EUR/USD towards new highs in the short term. As you already know from my analyses, the fundamentals could be decisive today. The US Final GDP may report a 0.6% drop while Unemployment Claims could come in at 215K in the last week above 213K in the previous reporting period. Furthermore, the Canadian GDP is seen as a high-impact event and it could have an impact on the USD as well. Read next: Tim Moe (Goldman Sachs) Comments On USD And Turbulent Times For Markets In General, Ole Hansen (Saxo)Talks Nord Stream | FXMAG.COM EUR/USD Retested The Buyers!     EUR/USD came back to retest the 0.9670 former high which stands as support. Its failure to stabilize under this level signaled strong upside pressure. Now, it is challenging the lower median line (lml). The next strong upside obstacle is represented by the 0.9750 former high. Technically, failing to take out the confluence area from around 0.9550 followed by the aggressive breakout through the downtrend line signaled a new swing higher in the short term. EUR/USD Forecast! Jumping and closing above 0.9750 could activate further growth and brings new long signals. If this scenario takes shape, the rate could move towards the median line (ml) again. Relevance up to 13:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294849
It's not clear we find out the results of mid-term elections immediately. Binance to buy FTX

Known Indices - S&P 500, Nasdaq And Dow Jones Fluctuated On Thursday's Morning. What Can We Expect From SPX?

InstaForex Analysis InstaForex Analysis 29.09.2022 16:08
US stock index futures decreased early on Thursday as the Bank of England's intervention was overshadowed by concerns over inflation and the global economy. S&P 500 futures fell by more than 1%, while NASDAQ futures lost 0.8%. Dow Jones futures lost about 0.5% early on Thursday. European stocks also fell, while Chinese stocks on US exchanges declined after the Hang Seng Tech index hit its all-time low.   US Treasury bonds went down as investors' expectations of aggressive Fed interest rate hikes pushed the yield up once again. Bond yields in the UK continued to rise, despite the Bank of England's intervention in the currency market. Earlier, UK prime minister Liz Truss defended her tax cut plans, triggering a panic in the market. This could lead to another major GBP sell-off, making long positions extremely risky. The yield of European bonds after the release of the latest German inflation data. Investors also paid close attention to the latest remarks by ECB policymakers. Read next: Tim Moe (Goldman Sachs) Comments On USD And Turbulent Times For Markets In General, Ole Hansen (Saxo)Talks Nord Stream | FXMAG.COM The European Commission announced its eighth sanction package against Russia, which will include a price cap on Russian oil. The new sanctions are imposed in response to Russia's continuing conflict against Ukraine. Tomorrow, Russia plans to annex territories under its control such as Donetsk and Luhansk, which will jeopardize the situation in the market even further and send risky assets downwards. In the meantime, Fed policymakers are likely to argue for the Federal Reserve's hawkish stance today. Statements of officials from several central banks are expected.   S&P 500 On the technical side, the S&P 500 has come under slight pressure once again after yesterday's upward movement. However, bulls have regained control of $3,677 and are now set to push the index towards $3,706, which would make an upward correction possible. The index must break above $3,706 to test $3,735. The S&P 500 failed to break above this level yesterday. A breakout above this range would extend the index's upward momentum towards the resistance at $3,773, as well as $3,801 further ahead. If the S&P 500 moves down and breaks through $3,677 and $3,643, it will drop towards $3,608, opening the way towards testing the support at $3,579. Below this area lies the low at $3,544, where the pressure on the index could ease slightly. Relevance up to 13:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323040
Kuroda Stayed On The Sidelines And The Yen Responded With Losses

The Current Consolidation Of The USD/JPY Pair Means That There Is A Sign Of Another Strong Move?

InstaForex Analysis InstaForex Analysis 30.09.2022 08:01
The Japanese yen from across the ocean, and with the support of the Bank of Japan, is watching the ups and downs of Europe and stands still for the fourth day. But standing still on the technical side of things means consolidation, and consolidation is a sign of a subsequent strong movement. We are waiting for such a movement to the target level of 147.30, determined by the line of the price channel of the higher timeframe. The signal to start will be the price exit above the nearest resistance of 145.05. On the four-hour chart, the price is moving sideways between the MACD indicator line (blue moving line) and the linear resistance at 145.05. The Marlin Oscillator is consolidating at the zero line, but still in the positive area. With the price overcoming the level of 145.05, growth to the target of 147.30 will begin, this plan will break the price consolidating under the MACD line, below the level of 143.85. Relevance up to 04:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323078
The Cable Market (GBP/USD) Is Likely To Show Signs Of A Bullish Trend

The Growth Of The Pound To US Dollar (GBP/USD) Slowed Down

InstaForex Analysis InstaForex Analysis 30.09.2022 08:01
The British pound continues to be in a fever on the news of the start of a softening operation by the Bank of England, which decided to buy long-term government bonds worth just over 1 billion pounds on its balance sheet. The amount of short-term QE is not large, rather, it is the market's psychological reaction to the signal from the central bank that the rate hike may slow down, as inflation issues are already receding into the background. Data on British GDP for the 2nd quarter will be released today. A decline of 0.1% is expected, or contraction of growth from 8.7% y/y to 2.9% y/y. The volume of mortgage lending in September is expected to decrease from 5.05 billion pounds to 4.90 billion, the volume of consumer lending may decrease from 1.42 billion to 1.40 billion. In the US, there will be data on income and expenses of individuals. The forecast for income in August is 0.3%, expenses are expected to grow by 0.2%. We believe that the market should have already calmed down from the BoE's "hints", as the debt market has already done, where yields on 10-year government bonds are now held at the level of September 26 (4.23%), and again turn to the overall economic picture Europe and England. Yesterday the pound rose by more than 220 points, and this morning the price reached the target level of 1.1170. The daily Marlin Oscillator slowed down in growth. It may very well be that from the level reached, the price will start to turn back to 1.0830. To reach 1.1305, it is necessary to get the price to settle above 1.1170, since the volatility is still decreasing. But in this case, it will happen next week. The limit of corrective growth seems to be the resistance of the MACD line (1.1460). On a four-hour scale, the price consolidated above both indicator lines, but growth slowed down at the target level of 1.1170. The Marlin Oscillator is turning down. A sign of the completion of the correction and a reversal of the trend will be the departure of the price under the MACD indicator line. The first target is 1.0830.   Relevance up to 04:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323080
PLN Soars to Record Highs Ahead of NBP Decision

The Euro-Dollar Pair (EUR/USD): Market Is Waiting For The Price To Drop

InstaForex Analysis InstaForex Analysis 30.09.2022 08:06
Unfortunately, high-range fluctuations in currencies did not stop. Yesterday, the euro traded in a range of 180 points (the pound in a range of 350 points), closing the day with an increase of 81 points. This morning it reached the 0.9850 target. The technical situation has become even more complicated. Now the price may continue rising to a stronger level at 0.9950, strengthened by the MACD indicator line, or reverse from the current levels to the nearest support of 0.9752 and further to 0.9695. The Marlin Oscillator of the daily scale does not provide any hints on this account, it can turn around now, without reaching the zero line, it can turn around directly from it, which will mean the price will work out the resistance at 0.9950. The four-hour chart does not clarify the situation. Formally, the trend is upward, as the price has settled above the balance and MACD indicator lines, but Marlin is turning down, the price exit above the indicator lines may turn out to be false. Consolidating under 0.9752 will most likely mean the end of the correction. Next, we are waiting for the price to drop to the levels: 0.9695, 0.9625, 0.9520.   Relevance up to 04:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323082
Behind Closed Doors: The Multibillion-Dollar Deals Shaping Global Markets

CarMax Inc And SolarEdge Technologies Inc Are The Biggest Losers At The Close In The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 30.09.2022 08:09
At the close in the New York Stock Exchange, the Dow Jones fell 1.54%, the S&P 500 fell 2.11% and the NASDAQ Composite fell 2.84%. The leading gainers among the components of the Dow Jones index today were The Travelers Companies Inc, which gained 1.76 points (1.15%) to close at 154.68. Visa Inc Class A rose 0.88 points or 0.49% to close at 180.06. Merck & Company Inc shed 0.14 points or 0.16% to close at 86.64. The losers were Boeing Co shares, which lost 8.11 points or 6.08% to end the session at 125.33. Walgreens Boots Alliance Inc was up 4.97% or 1.65 points to close at 31.55 while Apple Inc was down 4.91% or 7.36 points to end at 142. .48. Among the S&P 500 index components gainers in today's trading were Everest Re Group Ltd, which rose 3.07% to 267.41, STERIS plc, which gained 2.76% to close at 167.29, and also shares of W. R. Berkley Corp, which rose 2.73% to end the session at 65.18. The biggest losers were CarMax Inc, which shed 24.60% to close at 65.16. Shares of SolarEdge Technologies Inc lost 8.27% to end the session at 235.56. Quotes of Royal Caribbean Cruises Ltd decreased in price by 7.91% to 43.64. Leading gainers among the components of the NASDAQ Composite in today's trading were Senti Biosciences Inc, which rose 50.71% to hit 2.11, Avalon Globocare Corp, which gained 25.85% to close at 0.70, and also shares of TuanChe ADR, which rose 25.31% to close the session at 3.07. The biggest losers were Atlis Motor Vehicles Inc, which shed 54.82% to close at 33.95. Shares of Lion Group Holding Ltd lost 49.25% and ended the session at 1.01. Quotes of Twin Vee Powercats Co decreased in price by 29.01% to 2.52. On the New York Stock Exchange, the number of securities that fell in price (2631) exceeded the number of those that closed in positive territory (530), while quotes of 112 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,842 stocks fell, 956 rose, and 224 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 5.50% to 31.84. Gold futures for December delivery lost 0.07%, or 1.20, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 0.55%, or 0.45, to $81.70 a barrel. Futures for Brent crude for December delivery fell 0.55%, or 0.48, to $87.57 a barrel. Meanwhile, in the Forex market, EUR/USD rose 0.70% to hit 0.98, while USD/JPY edged up 0.21% to hit 144.46. Futures on the USD index fell 0.36% to 112.11.  Go to dashboard   Relevance up to 05:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/294915
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

The Recovery Of The GBP/USD Pair May Be Temporary, The Trend Remains Bearish

InstaForex Analysis InstaForex Analysis 30.09.2022 08:15
The British pound is trading around 1.1144. We can see three consecutive days of recovery and now it is facing the zone of 7/8 Murray (1.1230) which represents a likely technical reversal. A pullback towards the 1.1310 area (200 EMA) or towards the 1.1230 level (7/8) could be considered as a signal to resume selling. According to the daily chart, we can see that the British pound has three days of strong recovery and could now face overbought levels. This recovery could be momentary, as the main trend is still bearish and its rise higher will be seen by the bears as a good opportunity to sell. The intervention of the Bank of England caused strong volatility in the GBP/USD pair, which led to a recovery of almost 900 points. The BoE announced that it will make temporary purchases of UK bonds. This intervention will only relieve downward pressure momentarily, as the Fed is determined to raise its interest rate in the coming months. Therefore, we can sell the pound below the area of 7/8 Murray or the 200 EMA with targets at 6/8 around 1.0742. Additionally, the psychological level of 1.10 will be the key level for the British pound. We expect the British pound to trade around this area in the coming days and it could be seen as a pivot point in the event of a bullish or bearish move. Relevance up to 06:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294921
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

British Pound (GBP): Rate Hiking And Continuation Of Bonds Buying? What Could Be The Next Moves Of Bank Of England?

Alex Kuptsikevich Alex Kuptsikevich 29.09.2022 17:10
While some berated the UK government for collapsing the Pound on the government's plans to cut taxes, others were buying the British currency. The Pound's movement on Friday and Monday looks like a classic capitulation, often a precursor of a reversal. GBPUSD is adding for the third day, reaching 1.0960 - levels above Friday's close and over 6% above the historical low set on Monday. Despite an extensive sell-off in the UK debt markets, the Pound has been adding. This is reminiscent of the case of the negative oil price in April 2020, after which there was no more bad news to push the price down further. In less than a week, the Bank of England has made a complete U-turn from plans to sell assets off the balance sheet to an intention to buy them. In theory, this news should have put pressure on the Pound as it increases its market supply. In practice, stabilising the far end of the yield curve appeared to have created at least one sector in the UK market where investors could park their assets. The US and IMF have openly criticised the UK government for plans to cut taxes and cover the short-term budget deficit through new borrowing. Interestingly, the passage of Trump's tax reforms has been characterised, among other things, by the start of the dollar's rise, which has added around 30% in less than five years. It is also interesting to watch the dynamics of the Pound against the euro. Since 2016, EURGBP has been trading in a range of 0.83-0.93. The 18-month move from the upper to the lower bound through February marked a threefold faster climb. However, this touching of the upper boundary has now been followed by another (and even faster) pullback downwards. Bank of England policy has become quite unorthodox, actively pushing up interest rates at the short end of the curve and down at the far end. The return to balance sheet asset purchases by the Bank of England is hardly justifiable as a capitulation, and we may see this dual policy intensify further. It is realistic that in the coming months, the Bank of England will be more active in raising the bank rate and short-term bond yields but will continue or even intensify its buying of 20–30-year securities on the balance sheet. Such a policy would increase the attractiveness of the Pound on money markets by making it more "competitive" against the dollar while keeping long-term credit available. At the same time, tax cuts could support interest in investing in the UK.
FX Daily: Testing the easing pushback

The Euro To US Dollar (EUR/USD) Trend Has Finally Begun To Change

InstaForex Analysis InstaForex Analysis 30.09.2022 08:19
EUR/USD 5M The euro/dollar was again trading very volatile and growing for no apparent reason on Thursday. From our point of view, this is a very positive moment for the euro, as this currency showed a convincing growth for the first time in a long time, which can now turn into a new upward trend. Better yet, traders were buying euros at a time when there were no fundamental or macroeconomic reasons to do so. And even more so geopolitical. This may indicate that the bears have had enough of selling and are now leaving the market. The rollback from the achieved 20-year lows is quite fast, sharp and strong, which also speaks in favor of the beginning of a new trend. In addition, the price managed to consolidate above the important lines of the Ichimoku indicator. Thus, now we could say that for some time the euro has gone into growth. Of course, the situation on the markets is now so unstable that the fall can resume at any moment, especially if new disappointing geopolitical news arrives. Nevertheless, if the growth continues today, this will be a strong step forward for the euro. In regards to Thursday's trading, everything was in order. The movement was again almost one-way and strong. Two buy signals were formed when breaking and rebounding from the critical line. The first one was closed by Stop Loss, as the pair managed to go up only 40 points. The second brought a profit of at least 70 points, and the position had to be closed manually in the late afternoon, on the way to the Senkou Span B line. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For half of 2022, they showed a blatant bullish mood of commercial traders, but at the same time, the euro fell steadily. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 2,500, while the number of shorts decreased by 22,000. Accordingly, the net position grew by about 24,500 contracts. This is quite a lot and we can talk about a significant weakening of the bearish mood. However, so far this fact does not provide any dividends to the euro, which still remains "at the bottom". The only thing is that in recent weeks it has done without another collapse, unlike the pound. At this time, commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 12,000. This difference is no longer too large, so one could expect the start of a new upward trend, but what if the demand for the US dollar remains so high that even the growth in demand for the euro does not save the situation for the euro/dollar currency pair? We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 30. We understand the reasons why the euro can resume its fall.Overview of the GBP/USD pair. September 30. The British pound, as usual, has a lot of problems.Forecast and trading signals for GBP/USD on September 30. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The trend has finally begun to change to an upward one on the hourly timeframe. Despite the fact that almost all types of backgrounds remain a failure for the euro, as well as the economic prospects of the European Union, the market still cannot sell the euro forever. Perhaps now we are entering a 2-3 month period of growth. The main thing is that the pair manages to stay above the Senkou Span B. We allocate the following levels for trading on Friday - 0.9553, 0.9813, 0.9877, 0.9945, 1.0019, as well as the Senkou Span B (0.9804) and Kijun-sen (0.9689). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union will publish a report on inflation for September, which, according to experts, will grow to 9.7%. It is strange, but in the current circumstances, this report may support the euro, as it will further increase the likelihood of new European Central Bank rate hikes, and the market is now favorable to long positions on the euro. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 06:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323084
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

The GBP/USD Currency Pair Traded Almost Identical To The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 30.09.2022 08:23
GBP/USD 5M The GBP/USD currency pair traded almost identical to the EUR/USD pair again on Thursday. Thus, the British currency has been growing for a whole week. With what exactly is growing, and not pretending to grow. From the lows of the current week (and at the same time the absolute lows), the pound has already managed to rise in price by 800 points. We spoke about such a movement in the context of the question of the beginning of a new upward trend. Now we can only hope that in the near future the market will not face a new portion of disappointing statistics or news. There was practically no important data yesterday. It is unlikely that a strong move up, which lasts four full days, can be linked to the US GDP report in the second quarter in the third assessment. GDP fell by 0.6%, but traders already knew that this would be the case. The American economy has been in recession for two quarters, but the dollar has already won back all conceivable and unimaginable factors of its own growth. Now the dollar's growth can only happen in case we receive new shocking news of a geopolitical nature. There were no problems with yesterday's trading signals. The first two signals in the form of rebounds from the Kijun-sen line were false. In both cases, the price went down by about 20 points, so Stop Loss should have been placed at breakeven on both short positions. At the same time, some of them might not work. In any case, the third buy signal should have been worked out. Perhaps it was risky, but the risk was worth it, given that for the first time in a long time, the pound began to rise. The pair then broke through the 1.0930 level and the Senkou Span B, moving up about 230 points in total through Thursday evening. This is the level of profit that traders could get by working out this signal. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group closed 11,600 long positions and opened 6,000 short positions. Thus, the net position of non-commercial traders decreased by another 17,600, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new decline, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its decline has completely resumed and multi-year lows are updated almost every day, so the bearish mood of major players can only intensify in the near future. The non-commercial group now has a total of 109,000 shorts and 41,000 longs open. The difference is again almost threefold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, one should not forget about the high demand for the US dollar, which also plays a role in the fall of the pound/dollar pair. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 30. We understand the reasons why the euro can resume its fall. Overview of the GBP/USD pair. September 30. The British pound, as usual, has a lot of problems. Forecast and trading signals for EUR/USD on September 30. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair, as we see it now, has broken the downward trend on the hourly timeframe, as all key levels and lines have been overcome. We can only hope that now the pound will consolidate above the Senkou Span B line at least for a week. In this case, we can expect the formation of a new upward trend. Reasons for it are no longer required, since the pound is heavily oversold. For September 30, we highlight the following important levels: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442. Senkou Span B (1.0972) and Kijun-sen (1.0778) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. The UK will publish a report on GDP for the second quarter, but given how briskly the pound is currently trading, we believe that this report will not affect the pair's movement in any way. In the US, we only have secondary reports, such as personal income and expenses of the American population and the consumer confidence index from the University of Michigan. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 06:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323086
The EUR/USD Pair Maintains The Bullish Sentiment

Will The Euro-Dollar (EUR/USD) Pair Start To Move Upwards?

InstaForex Analysis InstaForex Analysis 30.09.2022 08:27
We have seen the expected rally from the 0.9731 low. Now, the pair need to stay above support at 0.9635 and break above minor resistance at 0.9851 to add confidence to our bullish count. A failure to break above minor resistance at 0.9851 will make the rally from 0.9731 looks corrective. It could force a retest and likely even a slight break below this level for a test of the lower part of our target zone at 0.9707. A clear break above minor resistance at 0.9851 will on the other hand strengthen our bullish case calling for a continuation towards 1.0051 and more importantly a test of resistance at 1.0198 on the way higher.   Relevance up to 06:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294929
The USD/JPY Price Seems To Be Optimistic

The GBP/JPY Pair: There Is A Chances Of Continuing The Uptrend

InstaForex Analysis InstaForex Analysis 30.09.2022 08:32
We did expect a corrective rally of the 155.34 low. As the spike down to 155.34 was strong, the corrective rally was also buoyant. (A strong action will cause an equally strong reaction). However, we still regard the rally from 155.34 as corrective and expect a retest of the 155.34 low. There could be a decline to the 61.8% corrective target at 145.76 before this correction finally comes to an end and a new impulsive rally towards 180.00 can begin. All requirements for the corrective decline from 168.43 now have been fulfilled and the odds for the underlying bullish trend to be continued towards 180.00 has risen substantially. Relevance up to 07:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294931
Saxo Bank Podcast: The Risk Of An Escalation In The US-China Confrontation, The Risk Of An Escalation In The US-China Confrontation And More

Market Focus Will Likely Be On Putin’s Warnings To The West, Nike (NKE) Reported Slightly Better Revenues And More

Saxo Bank Saxo Bank 30.09.2022 08:37
Summary:  Fresh lows return in US equities with more hawkish Fed comments and fear of earnings downgrades picking up as the Q3 earnings season draws closer. Cable extended its rally despite UK PM’s commitment to fiscal plan and weakening BOE hike expectations, while the EUR gained strength on the back of hot German CPI and uptick in ECB rate hike expectations. Talks of OPEC+ production cuts are gaining momentum, and focus today will be on China PMIs. Also watch for Eurozone CPI, US PCE data as well as Putin’s speech in the day ahead. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) fall to 22-month lows US stocks sank to their lowest levels since November 2020 after another round of Fed speakers continued with hawkish remarks, while oil maintained gains on expectations of OPEC+ cuts. Nasdaq 100 was down almost 4% at one point, but trimmed the losses before closing 2.9% lower, while the broader S&P500 met a similar fate nearing 3,600 before ending 2.1% down. All 11 sectors of the S&P 500 dropped, with Utilities falling the most and followed by Consumer Discretionary. Retail favorites Tesla (TSLA) and Apple  (AAPL)  led the declines falling 6.8% and 4.9% while chip makers followed with AMD (AMD) down 6.2% with PC demand falling away. On the upside, oil stocks like Devon Energy (DVN), and Diamondback Energy (FANG) and Occidental (OXY) moved higher. Separately the European Commission announced an eight package of sanctions that would include a price cap on Russia’s oil exports. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) climbed again After plunging sharply the day before on the Bank of England move, yields of U.S. treasury securities rose, with the 10-year note yields rising 6bps to 3.79% on Thursday.  Yields initially crept higher on bounces of U.K. Gilt yields and higher German regional CPI data, but paring their rise in the afternoon.  Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland equity markets opened higher on Thursday and pared the gain through the day and settled moderately lower, with the Hang Seng Index down by 0.5%, and CSI300 little changed. The news of the imposition of a 3-day mandatory PCR test in the financial district, Lujiazui in Shanghai due to one new Covid-19 case triggered some fears among investors. In spite of PBoC’s supportive statement coming out from its quarterly monetary meeting saying that the central bank will expand its special lending program to ensure the delivery of delayed housing projects, Chinese developers declined, with Country Garden (02007:xhkg) plunging 11.6%, Longfor (00960:xhkg) down by 7.5%, and CIFI (00884:xhkg) tumbling 16.3%.  Chinese EV maker, Zhejian Leapmotor (09863:xhkg), tumbled 33.5% in its first day of trading after an IPO priced at the bottom of a guided range.  XPeng (09868:xhkg) dropped 5.3%.  Trading in the China Internet space was mixed with Alibaba outperforming (+2.9%). Australia’s ASX200 (ASXSP200.1) likely to follow Wall Street lower: futures suggest a 0.3% fall today, aluminum stocks to be bright spark As above, on the ASX today, it’s worth keeping an eye on aluminum related stocks on the ASX including Rio Tinto (RIO) and Alumina (AWC). Meanwhile, diversified miners including the major retail favorites, like BHP (BHP) are worth watching after the Iron Ore (SCOA) price remains supported with China ramping up housing support. This morning the iron ore price (SCOA, SCOV2) pushed up ~1.1% to US$96.50. In NY BHP closed 0.6% higher, implying the ASX primary listing of BHP will likely move up, especially after the aluminum and iron ore prices rose. Cable stays bid and Euro follows The US 10-year yields as well as the dollar could not catch a strong bid on Thursday, which helped other G10 currencies gain some ground. Sterling was the strongest on the G10 board, with GBPUSD now testing 1.12 in early Asian hours. BOE’s emergency bond-buying measures however hints at a push lower in gilt yields, and GBP will likely come back under pressure if the surge in global yield resumes. This will need a focus shift back on Fed tightening as we think there is still some room for upward repricing of terminal rate Fed expectations and higher-for-longer rates. Meanwhile, expectations for an ultra-aggressive BOE hike in November cooled slightly. EURUSD also surged above 0.98 with ECB rate hike expectations for October meeting picking up after the hot German inflation, and with the ECB downplaying the chance of an emergency move to prop up Italian bonds. EURGBP was however lower from 0.8950 to 0.88. Aluminum and aluminum stocks on watch It’s worth watching aluminium related shares across the Asian-Pacific region today after the record jump in Aluminum price on the LME after Bloomberg reported plans to discuss a potential ban on new Russian metal supplies. The metal jumped 8.5% (its biggest intraday jump in record) before paring back. Crude oil (CLU2 & LCOV2) prices maintain gains Crude oil prices maintained the momentum with OPEC+ production cuts becoming a key factor going into the next week’s meeting. OPEC+ commenced discussions around an output cut with one saying it a cut is “likely”, according to Reuters sources. This comes after previous reports that Russia will likely propose OPEC+ reduces output by around 1mln BPD. Demand conditions are likely to weaken as global tightening race heats up, and this has prompted expectations for a supply cut as well. Brent futures touched $90/barrel mark but reversed slightly later, while WTI futures rose to $83/barrel before some decline later in the session.   What to consider? German inflation sparks EZ inflation fears German inflation touched double digits, as it came above consensus at 10.9% YoY for September from 8.8% YoY previously. Germany is also preparing to borrow an additional €200 billion to finance a plan to limit the impact of soaring energy costs, which could keep consumption high even as shortages loom. Up today will be the September eurozone inflation print. Expect a new record which will increase the pressure on the European Central Bank to hike interest rates by at least 75 basis points in October. The economist consensus expects that the headline harmonized index of consumer prices (HICP) will reach 9.7% YoY against 9.1% in August. The core rate is expected to climb to 5.6% YoY against 5.5% previously. The spread between the headline and the core inflation figures is mostly explained by a decrease in oil and natural gas prices in recent months. However, this is clear that inflation is becoming broad-based, including in the services sector. This means that inflation is here to stay for long. The HICP is likely to continue increasing in the coming months. A peak in inflation in the eurozone is possible in the first quarter of 2023, in our view. This is much later than in the United States. Fed speakers push for more hikes Loretta Mester remains more hawkish than the Fed’s median dot plot, and said that rate are not in restrictive territory yet and more rate hikes will be needed. No signs of concern on economy or dollar strength were noted, while inflation remained the key point of concern for her. James Bullard also made some key comments on ‘bad idea to mess’ with the inflation target while the labor market conditions remain tight and recession is only a risk. Mary Daly was more cautious, saying officials should work to avoid "inducing a deep recession." However, she still raised the bar on expectations on the Fed funds rate saying that she is comfortable with median Fed rate path projection of 4%-4.5% by year end, 4.5%-5% in 2023 (pointing to upside risks as the dot plot suggested 4.6%, or 4.5-4.75% if we talk in ranges). US initial claims come in strong again Initial claims came in lower than expected at 193k with last week’s also revised lower to 209k from 213k. Continued claims cooled to 1.347mln from 1.376mln despite the expected rise to 1.388mln. The data shows how tight the labour market is in the US and Fed's Bullard labelled today's claims metric as "super low". Meanwhile, the third estimate of Q2 GDP was confirmed to decline 0.6%, notably with consumer spending revised higher to 2% from 1.5% previously. Australian inflation rose 7% in the year to July, based on new monthly CPI At this rate it doesn’t appear CPI will peak at just shy of the 8% the RBA forecasts, given price pressures have resumed this month from the largest inflation contributors. Based on the ABS’s new monthly CPI print, some of the largest price jumps year-on-year to July were in fuel (+29.2%) and fruit & vegetables (+14.5%). The concern is that, with La Nina set to hit Australia and population growth continuing, food and housing (rent) prices will continue to rise apace. In September alone, contributors to food prices have risen markedly, as the global supply outlook has weakened amid poor crop conditions. This could tilt the RBA back toward a more hawkish stance. Australian rents to drive higher, adding to inflation woes Australia’s population growth resumed after borders reopened and business employment remains strong for the time being, at 50-year highs. New office and residential supply is expected be subdued in 2023 as interest rates rise; which supports the notion of falling vacancy rates. According to Colliers and the ABS, Sydney CBD rents rose 3.6% to $5.22 per square foot in the June quarter, driven by competition for top-quality office space. China’s manufacturing PMIs are expected to stay in the contractionary territory China’s September official NBS Manufacturing PMI and Non-manufacturing PMI as well as the Caixin China Manufacturing PMI are scheduled to release today. The median forecast of, economists surveyed by Bloomberg for the NBS Manufacturing PMI is 49.7 for September, a modest improvement from August’s 49.4 but remains in contraction territory.  Economists cite the lockdown of Chengdu and restrictive measures in some other cities during most part of the month and the weak EPMI released earlier as reasons for expecting the NBS Manufacturing PMI to stay below 50.  The Caixin Manufacturing PMI, which has a larger weight in coastal cities in the eastern region, is expected to remain at 49.5 as export-related manufacturing activities and container throughput were weak.  The consensus estimate for the NBS Non-manufacturing PMI is 52.4, staying in the expansionary territory, supported by infrastructure construction but slowing slightly in September from August’s 52.6 due to weakness in the housing sector.  On the other hand, steel production and demand data in September suggest the PMIs may potentially surprise the upside. Buying activity up in food and Agricultural instruments, stocks and ETFs Food prices are supported higher as the global crop outlook dampens for 4 reasons; concern lingers over Ukraine’s exports being cut off, South America has been hit by rains and frosts, the US has been plagued by drought and dry conditions and as Hurricane Ian made landfall in the, US conditions are likely to go from bad to worse. And lastly - La Nina is expected to hit Australia for the third year in a row. So we are seeing clients buy into Wheat and Corn. Both prices are up 20% off their lows. Secondly, buying has been picking up in agricultural stocks like General Mills (GIS) and GrainCorp (GNC). And lastly, clients are biting into agricultural ETFs like Invesco DB Agriculture Fund (DBA) and iShares MSCI Agricultural Producers ETF (VEGI). Fed preferred inflation measure, US PCE, on the radar today The Fed’s preferred inflation measure, the PCE is due today, and it will likely echo the same message as given by the last strong CPI number which has made the Fed even more hawkish in the last few weeks since the Jackson Hole. Headline numbers may be lower due to the decline in gasoline prices, but the price pressure on services side will likely broaden further. Last week, the Fed also raised its forecasts for inflation, with the central bank now seeing core PCE at 4.5% by the end of this year (it previously projected 4.3%), moderating to 3.1% next year and at 2.1% at the end of its forecast horizon in 2025, but thinks that headline PCE prices will be at its 2% target by then. Putin's speech due today after Russia annexed parts of Ukraine Vladimir Putin will address legislators after Russia signs treaties today to absorb four occupied regions, with Ukrainian forces threatening to encircle a pocket of the Donbas region. There is also growing resistance to Putin’s decision to call up 300,000 reservists. Market focus will likely be on Putin’s warnings to the West about any potential threats of using nuclear weapons, which may mean risk aversion getting another leg up. Nike sank on concerns about inventory build-up and margins Nike (NKE) reported slightly better than expected revenues and inline earnings but below expectation gross margins and a 65% surge in inventories for the North American market.  In the earnings call, the company’s CFO pledged to take “decisive action to clear excess inventory” and such efforts will have “a transitory impact on gross margins this fiscal year”.  Investors took note of the implication on demand and profitability and sold stock to more than 9% lower in the extended hour trading. Apple fell on analyst downgrade After being sold on the company’s announcement to back off plans to increase iPhone production this year on the day before, Apple’s shares fell another 4.9% yesterday after an analyst downgrade from a U.S. investment bank.  In this Market Daily Insights piece yesterday, we mentioned the warnings from Peter Garnry, Saxo’s Head of Equity Strategy, about the likelihood that Apple’s revenue could slip into negative growth for the current quarter ending Sep 30 and you can find more details of his analysis from here. In his note, Peter also warns that analysts may be way off in their estimates for the S&P 500 for Q3 and it is highly probable that there will be significant misses to the downside followed by gloomy comments from company management about the outlook on margins.     For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-30-sept-30092022
The EUR/USD Price May Fall Under 1.0660

The Euro (EUR) Is Still Under The Strong Bearish Pressure

InstaForex Analysis InstaForex Analysis 30.09.2022 08:44
Technical Market Outlook: The EUR/USD pair had bounced from the swing low seen at the level of 0.9539 and is approaching the key short-term technical resistance located at the level of 0.9867. The nearest technical support is seen at 0.9812 and 0.9749. In the longer term, the key technical resistance level is located at 1.0389 (swing high from August 11th), so the bulls still have a long road to take before the down trend reversal is confirmed. Please watch the USDX as the correlation between this two markets (EUR/USD and USDX) is directly opposite. The short-term outlook for the EUR remains bearish until the swing high seen at 1.0389 is clearly broken. Weekly Pivot Points: WR3 - 0.99372 WR2 - 0.97857 WR1 - 0.97189 Weekly Pivot - 0.96342 WS1 - 0.95674 WS2 - 0.94827 WS3 - 0.93312 Trading Outlook: The EUR is still under the strong bearish pressure and as long as the USD is kept being bought all across the board, the down trend will continue far below the parity level, towards the new multi-year lows. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Please notice, there is plenty of down room for the EUR to go as the bears keep making a new, multi-year lows.     Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294951
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

Forecasts For The Cable Market (GBP/USD) Remain Unchanged

InstaForex Analysis InstaForex Analysis 30.09.2022 08:47
Technical Market Outlook: The GBP/USD pair has bounced 8.36% from the lowest level since 1985 located at 1.0352 and is approaching the technical resistance located at 1.1210. The next technical resistance is located at 1.1410 and only a sustained breakout above this level would change the outlook to bullish. On the other hand, the next target for bears is located at the parity level of 1.0000, so please keep an eye on this level. The intraday technical support is seen at the level of 1.0929. The momentum remains strong and positive, so the short-term outlook is bullish. Weekly Pivot Points: WR3 - 1.16907 WR2 - 1.11401 WR1 - 1.08850 Weekly Pivot - 1.05895 WS1 - 1.03344 WS2 - 1.00389 WS3 - 0.94883 Trading Outlook: The bears are still in charge of Cable market and the next target for them is the parity level. The level of 1.0351 has not been seen since 1985, so the down trend is strong, however, the market is extremely oversold on longer time frames already. On the other hand, in order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th). Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294955
In The Coming Days Will Be The Final Consolidation Of Bitcoin

The Fed Is Considering A Virtual Dollar (CBDC) And The Downward Trend Remains In The Bitcoin

InstaForex Analysis InstaForex Analysis 30.09.2022 08:49
Crypto Industry News: Federal Reserve Chairman Jerome Powell presented the latest information on the central bank's work on the digital dollar during a panel discussion on digital finance hosted by the Banque of France: "US cash is not going away. We still use it quite a bit, "he said. Powell explained that the Federal Reserve is looking very closely at the "potential costs and benefits" of issuing central bank digital currency (CBDC) in the US. "We are watching it very carefully. We assess both political and technological issues, and we do it very broadly," he explained. The Fed chairman added that he planned to cooperate with Congress, but also with the executive branch, which would bring expert knowledge on many issues. "Ultimately, we will need approval from both the executive and Congress to introduce the digital currency of the central bank. [...] We see this as a process that will last at least several years, in which we will do the work and build public confidence in our analysis and final conclusion. "- added. Technical Market Outlook: The BTC/USD pair has been seen consolidating again inside a narrow consolidation zone. Only a sustained breakout above the levels of $20,221 - $20,580 would change the outlook to more bullish, however after the Bearish Engulfing candlestick pattern was made at the level of $20,374, the odds for a breakout higher are very low. The market conditions on the H4 time frame are positive, but the momentum is not strong at all. The nearest technical support is seen at $19,096 and $19,256. The swing low is seen at the level of $18,150. Weekly Pivot Points: WR3 - $19,226 WR2 - $18,987 WR1 - $18,829 Weekly Pivot - $18,742 WS1 - $18,587 WS2 - $18,500 WS3 - $18,259 Trading Outlook: The down trend on the H4, Daily and Weekly time frames continues without any indication of a possible trend termination or reversal. So far every bounce and attempt to rally is being used to sell Bitcoin for a better price by the market participants, so the bearish pressure is still high. The key long term technical support at the psychological level of $20,000 had been violated, the new swing low was made at $17,600 and if this level is violated, then the next long-term target for bulls is seen at $13,712. On the other hand, the gamechanging level for bulls is located at $25,367 and it must be clearly violated for a valid breakout.   Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294957
Energy and Metals Decline, Wheat Rallies Amid Disappointing Chinese Growth

The Euro Will Strengthen, But Questions Remain About What To Do Next

InstaForex Analysis InstaForex Analysis 30.09.2022 09:00
The euro has strengthened its position against the dollar and continues to grow amid repeated statements by European politicians this week that the European Central Bank should raise interest rates by another 75 basis points at the next meeting, which is scheduled for October this year. Data on inflation in the eurozone will be released today, which will surely confirm the correct attitude of European politicians to the current situation, it was just necessary to act a little earlier – the Federal Reserve went too far, which led to such a gap in interest rates and a strong weakening of the euro against the US dollar. In his recent speech, member of the Board of Governors Martins Kazaks stated: "In the current situation, we can still do much more. The next step still needs to be quite large, because we are far from the rates corresponding to 2% inflation. I would support a 75 basis point increase — let's take a bigger step and raise rates." European Central Bank and rate The Latvian official said that this does not mean that 75 basis points are now the "golden mean", and that, probably, as soon as rates will be more in line with the inflation target, future steps need to be done more carefully. His calls for decisive action are supported by other officials from the Baltic region. European Central Bank President Christine Lagarde and other officials from the board of governors told us about something similar this week. The surge in prices caused by Russia's military special operation in Ukraine and the resulting energy crisis prompted ECB officials to start raising rates for the first time in more than a decade — this month rates were raised immediately by a historic three-quarters of a point. Now they are weighing how to proceed, as the price increase is accompanied by ever-increasing forecasts of a recession. Lagarde told European Union lawmakers this week that officials will start considering cutting trillions of euros worth of bonds it accumulated during recent crises only after rates reach that point. Traders estimate the probability of another 75 basis point move next month at 40%. An increase in this amount will double the deposit rate to 1.5% — the highest level since 2009. The opinion of a Latvian politician As for Kazaks' speech, in his opinion, the cost of borrowing will reach a "neutral" level, which does not stimulate or limit the economy by the end of the year. "Of course, we should discuss all the tools so that when it is necessary to make a tough decision, we are ready," Kazaks said. "The ECB should delay its balance sheet reduction program, or quantitative tightening, until next year." According to the Latvian politician, this will prevent the European crisis from flowing into recession. Given that the main source of inflation is the crisis in the energy market, which is of a geopolitical and structural nature, an extremely rapid tightening of monetary policy will simply push the economy into recession. The Technical Outlook  As for the technical picture of EURUSD, the bulls have regained their advantage and the market under their control, which they lost at the beginning of the week, and are now aiming to break through the nearest resistance of 0.9840. It is necessary to do this if they expect the upward correction to continue at the end of this month. A breakdown of 0.9840 will take the trading instrument even higher to the area of 0.9890 and 0.9950. But despite the good upward prospects, protecting the nearest support of 0.9780 is still an important task for the bulls. Its breakthrough will push the euro to a low of 0.9730, but there will be nothing critical in this situation either, since there is the lower boundary of the new ascending channel. Only after missing 0.9730 will it be possible to start getting nervous, as the pair will easily fall into the area of 0.9680 and 0.9640. The Pound (GBP) The pound continues to win back positions one by one thanks to the support of the Bank of England. Now bulls are focused on the 1.1200 resistance, the breakthrough of which will open up prospects for further recovery in the area of 1.1260 and 1.1320. It will be possible to talk about the return of pressure on the trading instrument only after the bears take control of 1.1070, but this will not cause serious damage to the bull market observed since the middle of the week. Only a breakthrough of 1.1070 will push GBPUSD back to 1.1010 and 1.0950.   Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323100
The Reserve Bank Of New Zeeland Is Likely To Deliver 50bps Rate Hike

The New Zealand Dollar (NZD) Is At The Mercy Of Global Forces

TeleTrade Comments TeleTrade Comments 30.09.2022 09:35
NZD/USD is a tad higher. Economists at ANZ Bank expect the pair to remain at the mercy of external forces until the Reserve Bank of New Zealand (RBNZ) meeting next week. Nothing local is really driving the kiwi at the moment “Nothing local is really driving the kiwi at the moment, and instead it’s drifting like a cork in the tide. That’s unlikely to change today either, but next week’s RBNZ MPR may provide a degree of support, especially if the RBNZ remain hawkish, which is appropriate given the inflation backdrop. But until then, the NZD is at the mercy of global forces.” “The pull-back in the USD DXY looks a bit odd against geopolitical developments in Ukraine, given the strength of US jobless claims (pointing to bumper payrolls next week), hawkish Fedspeak, and the very real cracks in the UK that can’t be papered over.” “Support 0.4895/0.5470/0.5565 Resistance 0.6160/0.6400.”
Gold Struggles To Capitalize On Its Goodish Rebound

Gold Struggles To Capitalize On Its Goodish Rebound

TeleTrade Comments TeleTrade Comments 30.09.2022 09:38
Gold struggles to capitalize on its goodish rebound from more than a two-year low touched earlier this week. XAU/USD needs to make it through $1,674-75 hurdle to confirm a bottom, FXStreet’s Haresh Menghani reports. Any meaningful pullback might continue to find decent support around $1,645-$1,643 “Gold might accelerate the momentum towards the $1,674-$1,675 supply zone. The latter also marks a confluence hurdle, comprising the 50% Fibo. level and the 100-period SMA on the 4-hour chart. Sustained strength beyond could trigger a short-covering move and allow bulls to aim back to reclaim the $1,700 round-figure mark.” “Any meaningful pullback might continue to find decent support near the overnight swing low, around the $1,645-$1,643 region, which coincides with the 23.6% Fibo. level. The next relevant support is pegged near the $1,620-$1,615 region, or the YTD low. Some follow-through selling will be seen as a fresh trigger for bearish traders and drag gold towards the $1,600-$1,590 area.”
Philippines Central Bank's Hawkish Pause: Key Developments and Policy Stance

A Peak In Inflation In The Eurozone Is Possible| H&M’s Challenging Position And Micron's Shocking Forecast

Saxo Bank Saxo Bank 30.09.2022 09:44
Summary:  After celebrating the injection of liquidity from the Bank of England on Wednesday, global markets swooned again yesterday, taking the major US indices. Elsewhere, sterling has recovered most of the lost ground since the announcement of last week’s tax cuts on the stabilization of the gilt market, with other major sovereign yields also easing lower. The drop in yields and a consolidation in the US dollar have supported gold, which is poking higher toward important resistance.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities traded lower yesterday after hawkish remarks from Mester and Bullard that policy rates will stay higher for longer than what the market is expecting (pricing in). In addition, the market is increasingly at edge with the expectation that Russia will annex four regions of Ukrainian territory because the fear is that it could escalate the war to new levels. Nasdaq 100 futures are most sensitive to the hawkish Fed messages and tumbling growth outlook, so watch this index going into the weekend. Nasdaq 100 futures are trading around the 11,265 level this morning and 11,000 is naturally the big next level on the downside in case selling resumes into the weekend. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland China markets were treading water ahead of the week-long National Day golden week holiday. Chinese developers rallied to recoup some of the recent losses following PBoC’s supportive statement coming out of its quarterly monetary meeting saying that the central bank will expand its special lending program to ensure the delivery of delayed housing projects. Country Garden (02007:xhkg) rebounded 10% after plunging 11% yesterday. Chinese EV maker, Zhejian Leapmotor (09863:xhkg), tumbled another 11% after having tumbled 33.5% yesterday on its first day of trading. Other Chinese EV names traded in the Hong Kong bourses plunged from 2% to 9%. Strong USD fades as bond yields punched lower The weak US dollar suggests that the market was more focused on rising US treasury yields during the recent upswing than the accompanying risk sentiment deterioration: yesterday, the USD weakened sharply as yields were flat to lower while risk sentiment was in the dumps. Hard to tell if some end-of-month/quarter rebalancing through today might be in play as well. A proper reversal of the recent USD bull move would require far more weakness, for example: EURUSD back above the 0.9900-0.9950 area and AUDUSD above perhaps 0.6700 (more on GBPUSD below). Next week features a full line-up of key US macro data and should bring a test of the USD’s status. Was that the climax for sterling bear market? Too early to draw conclusions here, as sterling has not yet recovered sufficient ground in the most important EURGBP and GBPUSD pairs to suggest that we have seen a climax reversal, although overnight, GBPUSD did reverse the entire plunge sparked by the announcement of the special budget last Friday by Chancellor Kwarteng, which started around 1.1200. Arguably, a close above 1.1200-1.1250 suggests a chance over reversal, though really 1.1500 was a more significant starting point for the recent slide. For EURGBP, the key support/pivot zone is 0.8750-0.8700. While there was nothing specifically supportive about the Bank of England’s emergency QE, if the logic is that the BoE saved the system from a financial crisis and that the exercise demonstrated that quantitative tightening will prove impossible elsewhere eventually (and therefore the BoE is only the first of many), sterling’s situation looks less bad if other central banks eventually follow suit. Gold (XAUUSD) Gold continues to rebound from key support at $1615 with the focus now being the critical resistance zone into 1,680-1,700 that is the departure point for this latest bear market move. While global bond yields and the USD will continue to lead the way as coincident indicators, the market has held up relatively well with geopolitical concerns (Putin’s N threat) and investors increasingly worried the FOMC with its hawkish actions may break the currency and bond market. Some signs of that were seen this week with some extreme moves in local bond and currency markets. Speculators hold a rare net short in COMEX gold futures and any further strength will trigger short covering, while total holdings in ETFs backed by bullion have declined to a 30-month low. Crude oil (CLX2 & LCOX2) Crude oil is heading for its first albeit small weekly gain in five and the first quarterly drop since 2020. The market remains troubled by forces pulling prices in opposite direction, and while the strong dollar, surging yields, and continued lockdowns in China have raised demand worries, the risk to supply continues to be a supporting theme. That focus returned on Thursday when OPEC+ said a production cut would be discussed at next week's meeting with Russia proposing a 1 mln barrels per day cut, a reduction towards which they are unlikely to contribute much as they are already producing below their quota. In addition, the combination of Russian sanctions and embargo and the US pausing its sales from strategic reserves will continue to dampen the downside risks. US treasuries (TLT, IEF) US treasury yields remained calm yesterday as we can infer that the recent wild ride in UK gilts had triggered contagion into US treasury yields, likely aggravating the recent rise toward 4.00% for the 10-year treasury benchmark before the BoE’s emergency efforts took major sovereign yields back lower. US macro data next week, including the ISM surveys and the September jobs report next Friday, will be key for the direction in US yields, with the major 3.50% level, the June high, the key downside pivot point. What is going on? Apple shares (AAPL:xnas) crater after the company announced it will skip production increase and on analyst downgrade Apple shares ended the day nearly 5% lower, helping to drag the broader market lower as it is world’s largest company by market capitalization. A Bank of America analyst cut the rating on the company to “neutral” from “buy”. Apple’s demand is hurt by the cost-of-living crisis and the earnings outlook last night from the chip manufacturer Micron Technology is indicating that demand is coming down fast. Fed speakers push for more hikes Cleveland Fed president Loretta Mester (voter this year) remains more hawkish than the Fed’s median dot plot and said that rates are not in restrictive territory yet and more rate hikes will be needed. No signs of concern on economy or dollar strength were noted, while inflation remained the key point of concern for her. St. Louis Fed president James Bullard, likewise a voter this year, said it was a ‘bad idea to mess’ with the inflation target while labor market conditions remain tight and recession is only a risk. San Francisco Fed president Mary Daly (voter in 2024) was more cautious, saying officials should work to avoid "inducing a deep recession." However, she still raised the bar on expectations on the Fed funds rate saying that she is comfortable with median Fed rate path projection of 4%-4.5% by year end, 4.5%-5% in 2023 (pointing to upside risks as the dot plot suggested 4.6%, or 4.5-4.75% if we talk in ranges). Eurozone inflation is set to hit a new record in September The September eurozone inflation will be released today. Expect a new record which will increase the pressure on the European Central Bank to hike interest rates by at least 75 basis points in October. The economist consensus expects that the headline harmonized index of consumer prices (HICP) will reach 9.7 % year-over-year against 9.1 % in August. The core rate is expected to climb to 5.6 % year-over-year against 5.5 % previously. The spread between the headline and the core inflation figures is mostly explained by a decrease in oil and natural gas prices in recent months. However, this is clear that inflation is becoming broad-based, including in the services sector. This means that inflation is here to stay for long. The HICP is likely to continue increasing in the coming months. A peak in inflation in the eurozone is possible in the first quarter of 2023, in our view. This is much later than in the United States.  Earnings recap (H&M, Nike, and Micron) H&M delivered a big miss yesterday on operating profit as input costs surprised to the upside. H&M is starting charging for online returns to save costs and the demand in China is still weak due to H&M’s challenging position in the country. Nike surprised positively on revenue but missed on earnings against estimates as margin compression has begun, and the company’s inventory is building up fast creating a potential headache going forward as consumer demand is expected to decline in the coming quarters. Micron delivered a shocking outlook for the current quarter with revenue expected at €4-4.5bn vs est. €6bn. CEE currencies under strain, likely on geopolitical unease CEE currencies are under significant pressure since the news of the pipeline explosions this week – this was likely triggered by the sabotage of the Nord Stream pipelines to Germany, which could be a prelude to the cutting off of other pipelines from Russia. EURHUF has pulled above 420 for the first time ever, EURPLN yesterday spiked to the highest level since the timeframe just after the breakout of war in Ukraine.  Hungary continues to not support new sanction efforts against Russian energy imports. In Prague, protests have broken out against the country’s energy policy, while EURCZK remains sedated by heavy Czech central bank intervention. US initial claims come in strong again Initial claims came in lower than expected at 193k with last week’s also revised lower to 209k from 213k. Continued claims cooled to 1.347mln from 1.376mln despite the expected rise to 1.388mln. The data shows how tight the labour market is in the US and Fed's Bullard labelled today's claims metric as "super low". Meanwhile, the third estimate of Q2 GDP was confirmed to decline 0.6%, notably with consumer spending revised higher to 2% from 1.5% previously. Aluminium prices bolt higher; fuelling a rally in major mining companies Aluminum prices on the London Metal Exchange briefly jumped by a record 8.5% on Thursday before retracing lower. The sudden burst which to a minor extent was replicated in zinc and nickel was driven by a Bloomberg report saying that the LME as an option is looking into whether and under what circumstances they might place a ban on Russian metal being cleared via the exchange. Any such move by the LME to block Russian supplies could have significant ramifications for the global metal markets given their importance as a supplier of the mentioned metals, which to a smaller extend also includes copper. What are we watching next? Change of course from UK government after recent events? UK Prime Minister Liz Truss and Chancellor Kwarteng will meet with the Office of Budget Responsibility today for emergency talks before they receive the first draft of fiscal forecasts from the OBR next week. The recent crisis in the UK gilt market and downward spiral in sterling could elicit a response and possible backtracking on some portion of the recent policy announcement, although Truss said as recently as yesterday that she will stay the course. The most recent YouGov political poll release yesterday shows the Conservatives trailing Labour by a whopping 33 points, the largest gap since the 1990’s. Election in Brazil at the weekendBrazilian voters go to the polls on Sunday, with left-leaning former president Lula leading strongly in the polls over the incumbent right-populist Bolsonaro, but with many fearing the risk of disorder and violence as Bolsonaro has already made claims of election fraud and has hinted at not wanting to leave office. A run-off election between the two candidates will be held on October 30 if neither gets more than half the popular vote this weekend. The Brazilian real is at the weak end of the recent range versus the US dollar. Fed preferred inflation measure, US PCE, on the radar today The data point is for August and comes nearly three weeks after the BLS CPI data for the month. It will likely echo the same message as given by the last strong CPI number which has made the Fed even more hawkish in the last few weeks since the Jackson Hole. Headline numbers may be lower due to the decline in gasoline prices, but the price pressure on services side will likely broaden further. At last week’s FOMC meeting, the Fed also raised its forecasts for inflation, with the central bank now seeing core PCE at 4.5% by the end of this year (it previously projected 4.3%), moderating to 3.1% next year and at 2.1% at the end of its forecast horizon in 2025, but thinks that headline PCE prices will be at its 2% target by then. Earnings calendar this week Today’s earnings release to watch is from Carnival which is expected to deliver strong results but there are significant downside risks to the outlook from fuel costs, staffing costs and the cost-of-living crisis hurting disposable income. Today: Carnival (postponed from last week), Nitori Economic calendar highlights for today (times GMT) 0755 – Germany Sep. Unemployment Change/Rate 0800 – Poland Sep. Flash CPI 0800 – Norway Daily FX Purchases 0830 – UK Aug. Mortgage Approvals 0900 – Eurozone Sep. Flash CPI 1230 – US Aug. PCE Deflator/Core Deflator 1300 – US Fed Vice Chair Brainard to speak at Fed conference on Financial Stability. 1345 – US Sep. Chicago PMI 1400 – US Final University of Michigan Sentiment Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-30-2022-30092022
Bank of England survey highlights easing price pressures

The UK Assets Will Be Pressured| Japan And Its A Huge Foreign Debt

Saxo Bank Saxo Bank 30.09.2022 09:54
Summary:  While the Bank of England’s emergency bond-buying has propped up the sterling recently, there are hardly any reasons to turn positive on UK assets in general unless the government changes course on its fiscal policy roadmap. In fact, Japanese authorities remain better placed to defend their currency than the UK, given their better reserves position. While UK’s pain is self-inflicted, the overarching theme of tighter global liquidity conditions continues to pose threats of wider market disruptions. The Fed’s aggressive monetary policy tightening and the unrelenting surge in the US dollar this year is now tightening global financial conditions, with effects reverberating through global financial markets. Still, the degree to which this can be blamed for what is happening in the UK remains under the scanner. Despite the Fed tightening remaining an overarching theme, UK’s pain is largely self-inflicted. While bond buying by the Bank of England (BOE) is somewhat on the lines of what the Bank of Japan (BOJ) has been, the motives are completely different and the impact is likely to vary as well from here. The motives BoJ’s wider bond-buying operations are a reflection of its desire to stoke inflation. Japan’s headline inflation has averaged under 1% in the last two decades with the core print being in negative territory. The latest print for August was 3%, above the BOJ’s 2% goal, but wage pressures still remain subdued. UK’s inflation, on the contrary, is running at nearly three times that, and the BOE’s plan to begin purchasing long-dated gilts was a forced emergency measure to support pension funds that may be on the verge of a default due to the jump in gilt yields stemming from fiscal concerns after the announcement of the new government’s mini-budget. The vulnerabilities Japan’s fiscal and current account are also not in great shape, and it has a huge foreign debt. But it has huge FX reserves of the order of over $1.2 trillion as of end-August. This equates to 20% of GDP and over 18 months of import cover. Of this, about $136bn is deposits with foreign central banks that can be used immediately to intervene. So, while the Japanese yen remains vulnerable due to its twin deficits and high debt levels, the huge FX war chest still gives Japanese authorities some ammunition to intervene against excessive pace of yen decline. Meanwhile, UK’s problem is not just in its high inflation but also its twin deficits and weak FX reserves position. Foreign currency debt levels in the UK are more contained, however, and that may be one of the reasons why FX reserves are low. As we noted in a previous piece, UK’s net forex reserves of $100bn are also enough to only cover two months of imports, or roughly equal to 3% of GDP as compared to Japan’s 20% and Switzerland’s 115%. This gives the UK policymakers less room to prop up the sterling. Threats to Sterling and UK assets Sterling has undoubtedly regained some strength since the massive selloff on the fiscal plan announcement. It has been ‘temporarily’ supported by the BOE’s bond purchase program, which has led to the global reprieve in yields. Also, the month-end/quarter-end rebalancing has possibly helped cap dollar gains after massive USD strength seen in the quarter. To be clear, BOE didn’t ‘pivot’, rather it acted as the lender of last resort for the domestic pension funds, and there is hardly anything to be bullish about, or turn positive on UK assets. The UK assets will likely continue to be pressured until the UK government remains in denial. Even an emergency rate hike, at this point, seems unlikely to be able to support the sterling or gilts, as it would signify panic and a divergence in fiscal and monetary policies, further weighing on general confidence in the economy and its policies. Meanwhile, markets are currently pricing in a close to 150bps rate hike from the BOE at the November 3 meeting. That’s massive, and will mean significant pain to the UK economy. Threat of global contagion The UK is becoming a major credit risk not only for GBP assets but also for the rest of the world, primarily the eurozone as my colleague Chris Dembik noted in his piece. We see some kind of contagion effect in the eurozone credit market. There’s also risk of more markets succumbing to evaporating liquidity, and it is inevitable to ponder over who could be next? The Chinese currency has also weakened dramatically lately, but the PBoC has numerous tools available and credit impulse in China is also turning positive. South Korea has already intervened to prop up its currency, and more economies are likely to follow that path if things continue like this. The G20 meetings on November 15-16 will be particularly important to watch not just for geopolitical updates, but also for possible collective concerns on the impact of global tightening and the strong dollar. Atleast until then, if not longer, there is not enough reason for the US Treasury to intervene to buoy the battered pound or yen or another faltering currency. Most US officials, including Treasury secretary Yellen, expressed no urgency to act. Wider market disruptions and increasing risks to global financial stability, beyond the financial turmoil emanating from Britain and Japan, therefore remain likely.   Source: https://www.home.saxo/content/articles/macro/macro-insights-bank-of-england-bank-of-japan-and-the-risks-of-wider-market-disruptions-30092022
Rates Spark: Riding the hawkish wave while it lasts

Economists Are Concerned About The Future Fed Decision

InstaForex Analysis InstaForex Analysis 30.09.2022 10:09
Fast and furious tightening by the Federal Reserve risks plunging the economy into recession, and economists fear the central bank is making another mistake after a recent slow response to runaway inflation. A string of massive interest rate hikes of 75 basis points, with at least one more expected in November, according to experts, means that officials are not going to wait for the effect of their actions before acting again. The risk of an aggressive policy without analysis of the actions of Fed officials could drive the economy into a much deeper recession than expected. Given the lag of some inflation data, this is already a concern for many politicians. Let me remind you that Fed officials started raising rates from almost zero only in March, after the price pressure had already reached a significant level. After their delay, they are now ramping up the burden on the economy at a record pace to catch up, with the price of a mistake being the future economic pain caused by inflation-suppressing actions. The Fed has already raised rates by 3 percentage points this year, with the bulk of the increase coming in the summer, and has vowed to keep raising rates until it sees clear signs of lower inflation. According to the latest reports, inflation in the US resumed its growth in August, which forced the Fed to return to discussions on the topic of maintaining a further aggressive policy. The Fed's current actions have already pushed up the cost of borrowing on everything from home loans to cars, but the full impact of these moves on the economy will only be known in the next few months, given the time it takes for current changes to take hold across all areas. Experts say that without creating the respite that many traders and investors hoped for in the early fall of this year, politicians risk causing a larger slowdown in the economy than necessary, as well as potentially damaging the labor market more than anticipated. At their meeting later this month, Fed officials said they would raise rates by another 1.25 percentage points this year, which could mean another 75 basis point hike in November and a half-percentage increase in December. According to the Fed's median forecast, next year rates will rise by another quarter of a point. All this supports the dollar and puts pressure on risky assets, especially in the face of a deteriorating geopolitical situation. As for the technical picture of EURUSD, the bulls have regained their advantage and the market under their control, which they lost at the beginning of the week, and now they are aiming to break through the nearest resistance at 0.9840. This is necessary if they expect a continuation of the upward correction at the end of this month. The breakdown of 0.9840 will take the trading instrument even higher to the area of 0.9890 and 0.9950. But despite the good upward prospects, the bulls' main task is to protect the immediate support of 0.9780. Its breakthrough will push the euro to a low of 0.9730, but in this situation there will be nothing critical, since the lower border of the new rising channel passes there. You can start to get nervous only if you miss 0.9730, as the pair will easily fall to the area of 0.9680 and 0.9640. The pound continues to win back positions one by one thanks to the support of the Bank of England. Now the bulls are focused on the resistance at 1.1200, the breakthrough of which will open the prospects for further recovery in the area of 1.1260 and 1.1320. It will be possible to talk about the return of pressure on the trading instrument only after the bears take control of 1.1070, but this will not cause serious damage to the bull market observed since the middle of the week. Only a breakthrough of 1.1070 will push the GBPUSD back to 1.1010 and 1.0950.   Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323102
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

The Euro (EUR) And The British Pound (GBP) Continue To Strengthen Their Positions Against The US Dollar (USD)

InstaForex Analysis InstaForex Analysis 30.09.2022 10:47
And while the euro is gaining ground against the US dollar, and the British pound is making its way to another weekly highs amid increased optimism, supported by the actions of the Bank of England, the president of the Federal Reserve Bank of Atlanta, Rafael Bostic, said he supports raising rates by another 1.25 percentage points by the end of this year to counter inflation, which turned out to be worse, than he expected. "The lack of progress so far makes me think much more that we should take a moderately restrictive position," he told reporters during a conference call. "For me, acceptable rates are in the range from 4.25% to 4.5%. I prefer that we get to this level by the end of the year." Such aggressive statements by representatives of the Fed are not news this week. Fed officials raised interest rates by 75 basis points at the September 21 meeting, bringing the federal funds rate target from 3% to 3.25%. Immediately after that, policymakers continued to prepare the markets for further changes in the cost of borrowing, and median forecasts already show that Fed officials are laying on a rate of 4.5% by the end of this year. "Inflation is still high and too high and not moving fast enough back towards our 2% target," Bostic said, adding that he expected to see an improvement in supply chain imbalances in early summer that would help ease price pressures. "The forecasts did not come true, and the situation on the energy market has not changed, which forced me to adjust my political thinking," he said. The head of the Federal Reserve Bank of Atlanta still hopes that the US economy will be able to avoid a recession or a much higher unemployment rate. According to his forecasts, unemployment will rise to about 4.1% from 3.7% — a small increase that will continue to keep the labor market at a fairly strong level. "I still don't think the recession is a settled issue. Yes, we may have some weakening in the economy, but I don't think that at this stage it will lead us to a historical crisis." Despite such hawkish statements by other American politicians, the euro and the British pound continue to strengthen their positions against the US dollar, taking advantage of sufficient optimism after the recent intervention of the BoE in the situation on the currency and bond market. As for the technical picture of EURUSD, the bulls have regained their advantage and the market under their control, which they lost at the beginning of the week, and are now aiming to break through the nearest resistance of 0.9840. It is necessary to do this if they expect the upward correction to continue at the end of this month. A breakdown of 0.9840 will take the trading instrument even higher to the area of 0.9890 and 0.9950. But despite the good upward prospects, protecting the nearest support of 0.9780 is still an important task for the bulls. Its breakthrough will push the euro to a low of 0.9730, but there will be nothing critical in this situation either, since there is the lower boundary of the new ascending channel. Only after missing 0.9730 will it be possible to start getting nervous, as the pair will easily fall into the area of 0.9680 and 0.9640. The pound continues to win back positions one by one thanks to the BoE's support. Now bulls are focused on the 1.1200 resistance, the breakthrough of which will open up prospects for further recovery in the area of 1.1260 and 1.1320. It will be possible to talk about the return of pressure on the trading instrument only after the bears take control of 1.1070, but this will not cause serious damage to the bull market observed since the middle of the week. Only a breakthrough of 1.1070 will push GBPUSD back to 1.1010 and 1.0950.       Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323104
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The Growth Of EUR/USD And GBP/USD Pairs Will Be Limited As The Economic Situation In Both Europe And The UK Are Not Good

InstaForex Analysis InstaForex Analysis 30.09.2022 11:26
The rebound in financial markets was short-lived due to unstable support from statistics. Also, market sentiment noticeably worsened as the UK bond market collapsed amid the government's plan to launch a new program to stimulate the economy. This caused pound to fall to 1985 lows, while bond yields jumped to 2008 levels as fears of a more vigorous rate hike increased. Now, with the potential rate hike, GBP/USD rose above 1.1000 and traded at 1.1140. EUR/USD also increased as rising inflation in Germany point to more aggressive climb of ECB rates. Reportedly, the consumer price index in the country rose to 10% y/y and 1.9% m/m. The expected rate hike may intensify if consumer inflation in the whole Euro area rises to 9.7%. But growth will be limited as the economic situation in both Europe and the UK are not good. Although the energy crisis, decline in production and incomes of citizens could develop a decrease in inflation, these regions are poorly attractive for investment. As such, demand for dollar will continue, while risk appetite will go down, which is negative for euro and pound. Forecasts for today: GBP/USD Although demand rose because of potential rate hikes by the Bank of England, growth will be limited, especially if the pair does not rise above 1.1180. And if it falls below 1.1070, the price will collapse to 1.0915. EUR/USD Demand surged because of the potential rate hike by the ECB. If inflation in the Euro area turns out to be higher than expected, the pair will hit 0.9875, then fall to 0.9700.   Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323108
Further Downside Of The AUD/JPY Cross Pair Is Expected

Trend Of The Australian Dollar To US Dollar (AUD/USD) Pair Is Still The Downside

InstaForex Analysis InstaForex Analysis 30.09.2022 12:39
Weekly Review & Forecast: The general trend of the AUD/USD pair is still stronger to the downside. Investors will not care about the arrival of technical indicators towards oversold levels as far as interacting with the factors of the gains of the AUD dollar and the continued faltering of the USD. The closest bearish targets are currently 0.6441 and then the parity price for the currency pair. New targets 0.6404, 0.6350 and 0.6300 (historical target). AUD/USD pair is expected to trade around the spot of 0.6441 and 0.6460 by started of this week, according to trading economics global macro models and our expectations. Looking forward, we estimate it to trade at 0.6441 in or Sept. 2022. The pair dropped from the level of 0.6514 (this level of 0.6514 coincides with the ratio of 23.6%) to the bottom around 0.6441. Today, the first resistance level is seen at 0.6514 followed by Yesterday (the weekly pivot point), while daily support 1 is found at 0.6404. Also, the level of 0.6514 represents a weekly pivot point for that it is acting as major resistance/support this week. Some follow-through selling would make the AUD/USD pair vulnerable to challenging the valence mark in the near term. From a technical perspective, the overnight swing low, around the 0.6441 area, now seems to act as a support point, below which spot prices could extend the fall towards the 0.6404 mark. The AUD/USD pair continues to move downwards from the level of 0.6350. For these reasons we would be very difficult to see further significant decline for the euro before tomorrow, with signs of stabilization and correction to be the most possible scenario. A choppy morning saw the AUD/USD pair fall to an early morning low of 0.6441 before rising to a high of 0.6514 (pivot point). An extended rally could test resistance at 0.6441 and the second major resistance level (R2) at 0.6559. The third major resistance level (R3) sits at 0.6596. The direction of the AUD/USD pair may reflect the strength of either the EU or AUD economy. Moreover, the EUR to AUD dollar rate may reflect the overall global market sentiment. We had already shared in our previous topic that the psychological price sets at the level of 0.6514. The AUD/USD weekly forecast is mildly tilted towards the downside as the pair failed to sustain above the 0.6514 area after several attempts. The AUD/USD pair weekly forecast is mildly tilted towards the downside as the pair failed to sustain above the 0.6514 area after several attempts. If the price were to depress the resistance 0.6514 in the short term, this would be a sign of possible consolidation in the short term, but against the trend trading would then perhaps be riskier. Moreover, the moving average (100) starts signaling a downward trend; therefore, the market is indicating a bearish opportunity below 0.6514. So, it will be good to sell at 0.6514 with the first target of 0.6404. It will also call for a downtrend in order to continue towards 0.6350. The strong weekly support is seen at 0.6350. Sellers would then use the next support located at 0.6325 as an objective. Crossing it would then enable sellers to target 0.6300.     Relevance up to 11:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295004
Belarusian opposition leader proposed a collaboration to Ukraine

Podcast: The Influence Of Geopolitical Tensions On The Currencies Of Central And Eastern Europe, The Bad Apple Situation

Saxo Bank Saxo Bank 30.09.2022 12:44
Summary:  Today we look at the market stumbling once again just a day after recovering on the stabilization of global bond markets, in part on rising geopolitical unease linked to Russia, most easily spotted in CEE currencies. Sentiment also dipped on the world's largest company, Apple, seeing its shares trashed in yesterday's session on concerns for the company's growth. A startling outlook from Micron and other weak earnings results also weighed. Elsewhere, we note the interesting weakness in the US dollar as global yields were a pocket of relative calm as risk sentiment deteriorated, a shift from recent behavior. Crude oil, natural gas, metals, thoughts on whether the USD is turning here and more also on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-sep-30-2022-30092022
The Data May Keep The British Pound (GBP) From Rising

Forex: EUR/USD May Go Below 0.95 In 2022, British Pound To US Dollar (GBP/USD) May Be Trading Near 1.07 Today

ING Economics ING Economics 30.09.2022 13:05
As cross-market volatility pushes up to new highs for the year, credit spreads widen and the market reflects on a near-miss with a financial crisis in the UK pension fund industry, it is probably time to take even more defensive positions in FX. These will involve owning the Japanese yen on the crosses. Look out for inflation data and Putin's address at 14CET USD: Quarter-end flows and position adjustments FX volatility remains at its highs for the year and could extend even higher. We see two clear drivers here. The first is the continued tightening of monetary policy by central bankers around the world in an effort to prevent the current high levels of inflation from becoming pervasive in their economies. Leading the charge in this regard is the Federal Reserve. Today sees the August release of one of the Fed's preferred measures of inflation - core PCE. This is expected to rise 0.5% month-on-month and take the year-on-year rate up to 4.7% from 4.6%. Remember that according to the Fed's quarterly economic projections, the central bank expects this inflation measure to drop to 4.5% by the end of this year. Even that drop to 4.5% will require Fed Funds being taken into the 4.25-4.50% range, according to the Fed. Therefore any upside surprises in this data suggest the Fed may have to hike even harder. Hiking into slowing growth really focuses attention on real interest rates. For reference, the Fed's measure of 10-year real interest rates has risen from near zero in early August to around 1.55% today - driving the dollar higher and weighing on financial assets. While the macro risks remain skewed for a stronger dollar, over the short term the dollar does look to be getting caught up with quarter-end re-balancing flows and the de-leveraging of tightly held positions - including long dollars. Our fear is that some disorderly moves in equity markets could prompt a little more of this position adjustment - even though the macro-driven dollar bull trend remains firmly in place. This brings us to our second point. President Putin holds an address at 14CET today to likely announce the annexation of four regions of Ukraine. This will also be an opportunity for comment on what seems like sabotage of the two Nordstream gas pipelines earlier this week. This speech poses a geopolitical event risk to financial markets at a time when volatility is rising back to March 2020 levels and some parts of the financial system - e.g. the UK pension fund industry - are starting to creak. This would suggest even more defensive positions should be taken in FX. Normally this would mean owning even more dollars. Our slight concern is that any disorderly FX de-leveraging in thinning markets could see investors temporarily reduce existing positions - including long dollars. Given the growing threat to equity markets - and based on this year's correlation in the FX markets - we think it is worth looking to position for a lower CAD/JPY. Strategies targeting 100 (-5/6% from current spot levels) during the month of October could be a good hedge for deteriorating conditions. DXY has corrected more deeply than we thought. Look out for quarter-end flows around the 17CET WMR fix today. Any further losses should be corrective (outside risk to 110?) and we would still favour 120 later in the year as the Fed tightens conditions still further. Chris Turner  EUR: Double digit inflation The major macro focus in the eurozone today will be the release of the flash CPI for September. After yesterday's upside surprise in German CPI (10% YoY), the risks look skewed to the upside for the consensus expectation of 9.7% for the eurozone number. Such a figure should bring the European Central Bank out in force and cement expectations for a 75bp hike on 27 October. As mentioned previously, short-term interest rate differentials have had little bearing on EUR/USD pricing recently. And the bounce in EUR/USD over the last 24/48 hours may well be a function of the recovery in sterling (more on that below).  0.9850/0.9870 may prove intra-day resistance for EUR/USD - but high volatility and tighter liquidity mean that we're in a noisier period for FX. Ultimately, however, we think the pressure remains for EUR/USD to break below 0.95 later in the year. Chris Turner Elsewhere, Norges Bank (NB) will announce October’s daily FX purchases on behalf of the government at 10CET today. Last month, NB surprised by announcing more than twice the expected amount of daily NOK sales (NOK 3.5bn vs 1.5bn), which prompted a negative reaction in the krone. Today, it seems unlikely that the Bank will announce another sharp acceleration in daily NOK sales, but we may see a modest increase to NOK 4.0bn, and that may be enough to trigger a decisive break above 10.50 in EUR/NOK today.  Francesco Pesole GBP: 400 pip ranges now the norm for cable One week realised GBP/USD volatility is now 34%. That translates into a 418 USD pip daily range for cable! The late week recovery in cable must owe something to the Bank of England's aggressive intervention in the UK Gilt market on Wednesday. But also there is huge focus on the political side and whether Downing Street manages to rejig the fiscal numbers to assuage the recent panic in the bond market. On that subject, sterling seemed to rally yesterday on speculation that the government could cut its capital spending plans by £20bn or so - though that would hit investment and productivity. And today the focus is on the PM and Chancellor meeting the Office for Budget Responsibility (OBR) to discuss spending plans. Recall it seems that the OBR had been shut out of last week's 'fiscal event' - prompting concerns that the new government did not want independent scrutiny of its new plans. While the involvement of the OBR will be welcomed by the markets, the government still has to find a way to balance the books and avoid a very negative assessment from the rating agencies - two of which provide UK sovereign rating outlooks on 21 October. A Conservative party conference this weekend suggests it is far too early for a U-turn on fiscal policy and, combined with a very difficult external environment, sterling should stay vulnerable. 4 big figure ranges could easily put cable back at 1.07/.08 later today! Chris Turner CEE: CNB determined to intervene further The CNB left rates unchanged yesterday, as expected while confirming that FX intervention will continue. The hiking cycle is over in our view, but wage growth and labour union wage demands seem to worry central bankers. Therefore, we need to continue to monitor incoming data, but we do not expect additional rate hikes in the baseline scenario. The situation was more interesting on the FX side. The governor sent a clear signal that intervention will continue, and the central bank does not feel constrained by the costs or time horizon to date. This, given the market's positioning, which was betting on an end to intervention, led to massive position closures and a jump in the koruna as we discussed yesterday, repeating the same scenario as in August. Given the global developments, we believe that the koruna will return to weaker levels near the CNB's intervention levels of 24.60-70 EUR/CZK soon and the market will test the central bank's patience again. However, we believe the CNB has enough ammunition to fight it for now. Elsewhere in the region, the situation remains very volatile despite gas prices falling after a recent surge. Markets seem to be more focused on the outlook than on gas prices themselves and are more concerned about a supply stoppage via Ukraine, EU sanctions against Russia and a further escalation of the geopolitical situation. In our view, the market is becoming oversensitive to these issues and CEE FX has not even been helped by a stronger euro against the US dollar. We would expect a correction of the losses of the last few days, given that the Hungarian forint and Polish zloty have broken out of levels consistent with traditional drivers, but at this point, we may remain in sell-off mode for a few more days. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

The Data Will Affect The USD And Provide A Fresh Impetus To The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 30.09.2022 13:04
USD/CAD gains traction for the second straight day, though lacks follow-through. Subdued crude oil prices undermine the loonie and act as a tailwind for the pair. Retreating US bond yields, a positive risk tone weighs on the USD and caps gains. The USD/CAD pair attracts some dip-buying in the vicinity of the mid-1.3600s and sticks to modest intraday gains through the first half of the European session. The pair maintains its bid tone for the second successive day and is currently trading just above the 1.3700 mark, well within this week's broader trading band. A combination of factors drags the US dollar to a one-week low, which, in turn, acts as a headwind for the USD/CAD pair. The spill-over effect of the UK central bank's move to calm the markets drags the benchmark 10-year US Treasury note away from a 12-year high touched on Wednesday. Apart from this, a goodish recovery in the global risk sentiment further weighs on the safe-haven greenback. That said, subdued price action around crude oil prices undermines the commodity-linked loonie and continues to lend some support to the USD/CAD pair, at least for the time being. Worries that a deeper global economic downturn will dent fuel demand offset global supply concerns and fail to assist the black liquid to capitalize on this week's goodish recovery from the lowest level since January 2022. Furthermore, firming expectations for a more aggressive policy tightening by the Fed should limit the fall in the US bond yields and favours the USD bulls. Investors seem convinced that the US central bank will hike interest rates at a faster pace to curb inflation. Hence, the focus remains on the release of the US Personal Consumption Expenditures. (PCE) - the Fed's preferred inflation gauge. Friday's US economic docket also features the release of the Chicago PMI and the revised Michigan Consumer Sentiment Index. The data, along with the US bond yields and the broader risk sentiment, will influence the USD and provide a fresh impetus to the USD/CAD pair. Traders will further take cues from oil price dynamics to grab short-term opportunities on the last day of the week
The Overall Picture Is Positive For The Czech National Bank

CZK (Czech Koruna): This Decision Of Czech National Bank May Be Found As Surprising For Some!

ING Economics ING Economics 30.09.2022 14:44
The central bank confirmed its August decision not to raise rates further but kept the door open if wage growth crosses the pain threshold. We consider the hiking cycle to be over. The CNB is the first in the Central and Eastern European region to stop raising rates, with monetary policy now conducted through FX intervention The Czech National Bank in Prague End of hiking cycle confirmed The CNB left interest rates unchanged at 7.00% today in line with expectations. Five members voted for this decision, while two members voted for a 75bp rate hike (100bp in August). At the press conference, the governor highlighted inflationary pressures from foreign and domestic economies, a strong labour market and resilient industrial production. On the other hand, he also mentioned the negative impact of foreign trade on GDP and negative leading indicators indicating a slowdown in foreign demand. 7.00% CNB's key policy rate No change As expected   The bank board assessed the risks as high but balanced on both sides. The CNB sees faster wage growth, expansionary fiscal policy, higher producer prices abroad and unanchoring inflation expectations as upside risks. On the other hand, the central bank sees as anti-inflationary the rising likelihood of a recession abroad, a stronger-than-expected decline in domestic demand and investment, the introduction of an energy price cap, and a faster-than-expected decline in core inflation. While the list of risks was 3:2 in favour of pro-inflationary risks in August, this time the score is 4:4. In addition, the board sees uncertainties such as the war in Ukraine, energy availability and future monetary policy developments abroad. Rates will remain high for longer As a result, the August rate stability was confirmed with the door open to react if necessary. According to the governor, the main trigger for an additional rate hike would be stronger wage growth stemming from wage negotiations and fiscal policy. However, a specific pain threshold level has not been set and the governor said each board member sees it differently. Compared to the August meeting, we see this as more likely and will need to monitor the incoming numbers closely. However, our baseline scenario of the end of the hiking cycle remains unchanged. Third quarter wage growth will not be released until early December when we should already see inflation slowing, or at least see a clear peak, and the central bank will not react in our view. In the long run, the governor said rates should remain high for longer, but we did not get more details and this topic was not discussed today. FX intervention continues without blinking an eye On the FX front, the governor made it quite clear that FX intervention will continue, and declined to comment on any details during the press conference. Thus, our forecast remains unchanged and we expect the CNB to continue with the current regime. Bank liquidity statistics show, according to our calculations, that the central bank returned to the market last week for the first time since the August meeting, spending around EUR0.5bn. This week it was probably several times more, but we will have to wait until the end of next week for the numbers. For now, we see enough buffer to continue the FX intervention. Long-term market implied CNB rate Source: Refinitiv, ING estimate What to expect in rates and FX markets The IRS curve moved 0-17bp higher today, resulting in a massive bear steepening. However, the larger half of the move is on account of global developments and rising core rates. We also found the FRA curve slightly higher after the press conference given the CNB's indication that rates will stay high for longer. Like the CNB forecast, our strategy remains unchanged: a steeper curve led by the long end higher. The market sees the CNB rate at around 4% in the long run, which we believe still has the potential to go up, supported by rising core rates. On the bond side, CZGBs yields continue to rise under the pressure of high supply and global events. In asset spread terms, CZGBs at the long end of the curve have reached their widest levels since last March. However, we believe the sell-off is not over and still see a bit of room to move higher. CZGB supply remains strong in October and global conditions are also not helping to stop the pressure. However, we believe we are close to the peak. The CNB confirmed very clearly that it intends to continue FX intervention, which led to a massive closing of short CZK positions. Shortly after the end of the press conference, the koruna reached its strongest levels since mid-September, repeating the same scenario as in August. Given the global developments, we believe that the koruna will return to weaker levels near the CNB's intervention levels of 24.60-70 soon and the market will test the central bank's patience again. However, we believe the CNB has enough ammunition to fight it for now. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Asia morning bites - 16.05.2023

USD/JPY: What Makes Japanese Yen's (JPY) Fate So Miserable?

Kenny Fisher Kenny Fisher 30.09.2022 15:58
The yen has been drifting for most of the week and the trend is continuing today. USD/JPY is almost unchanged at 144.32. Japanese data surprises on the upside Japan has released strong industrial production and retail sales data, a further indication that the Japanese economy is improving. Industrial production rose for a third straight month in August, climbing 2.7% MoM. This was up from 0.8% in July and crushing the consensus of 0.2%. Retail sales for August jumped 4.1% YoY, above the consensus of 2.8% and higher than the 2.4% gain in July. Retail sales have posted 10 gains in the past 11 months, indicative of solid consumer spending, despite Japan’s weak economy and households grappling with relatively high inflation. Read next: Differences In Wealth Per Adult, Disney Park Re-Opened And Retirement Theme| FXMAG.COM It was a wild week for most of the majors, but the Japanese yen has settled down after USD/JPY pushed close to the 145 line on Monday. Japan’s stunning currency intervention has kept the yen below the 145 line, but it’s difficult to imagine that unilateral action will succeed in stemming the yen’s prolonged descent, for two reasons. First, the Federal Reserve is likely to deliver large rate increases in October and November. With the Bank of Japan showing no indication that it will ease up on yield curve control, the US/Japan rate differential will widen and send the yen lower. Second, the yen is caught in a tug-of-war between the MoF, which wants to see a stronger yen, and the BoJ, which is focused on maintaining an ultra-accommodative policy, which has kept JGB yields at low levels and weighed on the yen. If the yen does fall below 145, things will get very interesting, as the ball will be squarely in the court of the MoF, which will have to decide whether to balk or step in with another intervention. USD/JPY Technical There is resistance at 144.81 and 146.06 USD/JPY has support at 143.21 and 141.88 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen shrugs after solid data - MarketPulseMarketPulse
The EUR/AUD Pair May Have The Potential To Continue Its Decline

EUR/USD: What Stands Behind THAT HIGH Eurozone Inflation?

Kenny Fisher Kenny Fisher 30.09.2022 16:24
The euro is showing limited movement today, after a two-day rally. In the European session, EUR/USD is trading at 0.9759, down 0.55%. It has been a week of swings for the euro, which has traded in a 300-point range. The euro has been under strong pressure, and is down 2.5% in September, as the euro continues to drop further away from the psychologically-important parity line. Eurozone inflation hits 10% The number 10 is not at all pretty when referring to inflation, but that is today’s story, as eurozone CPI jumped to 10.0% in August, up from 9.1% in July and above the consensus of 9.7%. This is the highest rate ever recorded since the euro was introduced back in 1999. Inflation is well supported, as all broad categories reflected price increases, and core inflation rose to 4.8%, up from 4.3% and higher than the 4.7% estimate. Germany, the powerhouse of the bloc, saw inflation accelerate even higher, to 10.9%. The chief driver of soaring inflation is energy prices, which have skyrocketed as Russia has sharply reduced energy exports to Europe. The latest ominous development was a series of explosions at the Nord Stream pipelines this week. Although the pipeline system had already been shut down, the explosions, which were likely sabotage, have sent natural gas prices even higher. Read next: Differences In Wealth Per Adult, Disney Park Re-Opened And Retirement Theme| FXMAG.COM The ECB showed up very late to the rate-tightening dance, and the current benchmark rate of 1.25% lags behind other central banks and will not have much impact on soaring inflation. The central bank appears to have little choice other than to deliver a second-straight rate increase of 0.75% at the October meeting. With eurozone inflation hitting double digits and showing no sign of peaking, it is no surprise that confidence levels are sinking among consumers and businesses. The European Commission economic sentiment index slipped to 93.7 in September, down from 97.3 in August. German GfK Consumer Confidence fell to -42.5 in September, down from -36.8 in August, and lower than the consensus of -39.0 points. The economic picture in the eurozone is bleak, and the ailing euro will be hard-pressed to make any headway against the surging US dollar. EUR/USD Technical EUR/USD is testing support at 0.9554. Next, there is support at 0.9419 There is resistance at 0.9640 and 0.9711 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. EUR/USD falls as inflation jumps - MarketPulseMarketPulse
The Data May Keep The British Pound (GBP) From Rising

Craig Erlam (Oanda) Comments On British Pound (GBP), Eurozone Inflation And More

Craig Erlam Craig Erlam 30.09.2022 17:07
Stock markets are bouncing back on Friday, although I don’t think anyone is getting excited by the moves which pale in comparison to the losses that preceded them. This looks like nothing more than a dead cat bounce after a steep decline over the last couple of weeks as investors have been forced to once again accept that interest rates are going to rise further and faster than hoped. Double-digit eurozone inflation Inflation in the eurozone hit 10% in September ahead of schedule, with markets expecting a jump to 9.7% from 9.1% in August. In normal circumstances that may have triggered a reaction but these are anything but normal. Markets are still pricing in a more than 70% chance of a 75 basis point rate hike from the ECB next month with an outside chance of 1%. The euro is slightly lower following the release which also showed core inflation rising a little higher than expected to 4.8%. Sterling recovers as the UK is revised out of a potential recession We’re seeing the third day of gains for the pound which has now recovered the bulk of the losses sustained after the “mini-budget” a week ago. This is not a sign of investors coming around the new Chancellor’s unfunded tax-cutting, but rather a reflection of the work done since to calm the market reaction. That includes the emergency intervention from the BoE, talk of measures to balance the cost of the tax cuts, reported discussions with the OBR and rumoured unrest within the Tory party. We’ll have to see what that amounts to and sterling could certainly react negatively again to inaction or the wrong action. GDP data this morning brought some good news, although as far as positive updates go, this is surely towards the more insignificant end. The UK is not in recession after the second quarter GDP was revised up from -0.1% to +0.2%. While all positive revisions are welcome, the technical recession wasn’t really significant in the first place. The important thing was that the UK is struggling to grow and facing a probable deeper recession down the road and today’s revision doesn’t change that. ​ Disappointing Chinese surveys China’s PMIs highlighted the widening gulf between the performance of state-owned firms versus their private competition. It goes without saying that being backed by the state in uncertain times like this carries certain advantages and that has been evident for some time. Private firms have been more sensitive to Covid restrictions and have therefore been heavily hampered this year. Still, even with those state-backed benefits, the headline PMI was far from encouraging rising to 50.1 and barely in growth territory. With the non-manufacturing PMI also slipping from 52.6 to 50.6, it’s clear that the economy still faces enormous headwinds and the global economy stalling around it will only add to them. BoJ ramps up bond purchases amid higher yields The Bank of Japan ramped up bond purchases overnight as it continues to defend its yield curve control thresholds in volatile market conditions. Rising global yields have forced the central bank to repeatedly purchase JGBs in order to maintain its target. There has been a growing expectation that the BoJ could tweak its 0% target or widen the band it allows fluctuations between in order to ease the pressure on the currency but that’s not been forthcoming, with the MoF instead intervening in the markets for the first time since 1998. The intervention doom loop continues. RBI rate hike and credit line The Reserve Bank of India hiked the repo rate by 50bps to 5.9% on Friday, in what will likely be one of its final tightening measures in the fight against inflation. The decision was widely expected and followed shortly after by guidance to state-run refiners to reduce dollar buying in spot markets through the use of a $9 billion credit line. The strength of the dollar is posing a risk to countries around the world, as we’ve seen very clearly in recent weeks as mentioned above, and measures like this will seek to alleviate those pressures. Much more will be needed to make any significant difference though. A period of stability is what bitcoin needs It’s been a very choppy week in bitcoin which has failed to make a sustainable run in either direction despite attempts at both. Perhaps we are seeing a floor forming a little shy of the early summer lows around $17,500, although that will very much depend on risk appetite not plummeting once more which it very much has the potential to do. I keep using the word resilience when discussing bitcoin and that has very much remained the case. It did also struggle to build on the rally earlier this week, even hold it into the end of the day, so perhaps a period of stability is what it needs. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. A busy end to the week - MarketPulseMarketPulse
Further Downside Of The AUD/JPY Cross Pair Is Expected

Should Market Wait For The Australian Dollar To US Dollar (AUD/USD) Price To Return To A New Downward Move?

InstaForex Analysis InstaForex Analysis 03.10.2022 08:01
The Australian dollar closed the day down 95 points on Friday, having worked out one of the embedded lines of the falling price channel (daily) with a lower shadow. This morning the price is trying to get above the resistance of 0.6439. In the event of consolidating above the level, the price may continue to grow towards the target resistance of 0.6515. The Marlin Oscillator is already turning into a correction. The price's return to the area under the Friday low, or rather, under the line of the price channel of 0.6385, opens the target along the underlying parallel line in the area of the price level of 0.6330. On a four-hour scale, the price is attacking the resistance level of 0.6439 and at the same time the Marlin Oscillator is trying to move into the zone of positive values. If such a synchronous qualitative transition takes place, then the aussie will continue its short-term growth, but it may not reach the 0.6515 target, since the MACD line is already passing under this level, and over time it will be lower and lower, creating its own resistance. We are waiting for the correction to end and the price to return to a new downward wave.   Relevance up to 04:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323206
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

GBP/USD Pair: A Reversal Signal Will Be The Price Consolidating

InstaForex Analysis InstaForex Analysis 03.10.2022 08:06
The pound closed up 49 points on Friday. Taking into account the general weakening of other world currencies (euro -12 points, aussie -95 points, loonie -146 points), this growth looks strong. On the technical side, the growth kept the resistance level of 1.1170. The daily Marlin Oscillator is growing - the price is still able to grow to 1.1305 or to 1.1455 - to the MACD indicator line, which is still less likely, since the Marlin Oscillator is approaching the zero line and may turn down from it. On the four-hour chart, the price has consolidated above the MACD indicator line, the Marlin Oscillator is consolidating in the area of a growing trend. Bulls are clearly not going to give up positions. A reversal signal will be the price consolidating under the MACD line, below 1.0990.   Relevance up to 04:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323208
The Markets Still Hope That The Fed May Consider Softer Decision

Will Today's The Manufacturing PMI Data Affect The Euro (EUR)?

InstaForex Analysis InstaForex Analysis 03.10.2022 08:10
Last Friday, the euro traded within the range of target levels 0.9752-0.9850, closing the day down 12 points. The daily Marlin Oscillator turned sideways – to the neutral state, even though it is in the negative territory. A debt crisis is brewing in Europe, which began with a rise in yields on British medium-term government bonds, in particular, on 3-year securities over the last ten days of September, it jumped from 3.05% to 4.74%. For German 3-year bonds, during this time, the yield increased from 1.54% to 1.80%. Given the European Central Bank's intention to raise rates sharply at the October meeting, anxiety will only intensify. But maybe not today or tomorrow. The eurozone is expected to have a neutral PMI in the manufacturing sector for September - that is, it will remain at its previous value of 48.5 points, while the US ISM Manufacturing PMI is forecast to weaken from 52.8 to 52.2. As a result, we expect some more delay for the euro in the range of 0.9695-0.9850. Perhaps, having the price settle under 0.9695, that is, under the close on September 23, when the euro collapsed by 150 points, the trend will strengthen in a new downward momentum. On the H4 chart, the price settled above the balance and MACD indicator lines, which also indicates the possibility of the price staying in the side short-term trend. The Marlin Oscillator has turned down, but not enough yet, given the overall technical picture, for the effectiveness of such a signal. The probability of continuation of the correction to the level of 0.9950, which has already reached and significantly strengthened the MACD line of the daily scale, is 35%. We will allocate 50% for sideways movement and 15% for downward reversal.   Relevance up to 04:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323210
FX Daily: Testing the easing pushback

The Euro-US Dollar (EUR/USD) Pair: Sales Will Become Relevant Again

InstaForex Analysis InstaForex Analysis 03.10.2022 08:15
The EUR/USD currency pair was trading upwards on Friday, as it had been for the previous two days. It can be seen that traders made a pretty good leap up, but are they ready to continue buying the euro currency, or was it only a partial fixation of short positions by bears? So far, the euro has managed to rise in price by "as much as" 300 points, which is very little to talk about the beginning of a new upward trend. So formally, the trend changed to an upward one. Still, we recall that before the beginning of the last round of the upward movement, the euro currency fell significantly, so now we can talk about another round of technical correction. If this is the case, the fall of the euro currency may well resume since the fundamental global background has not changed for the euro and the dollar, and the geopolitical one has worsened, which is primarily dangerous for the euro currency. The pair had previously been fixed from time to time above the moving average, but this did not even lead to significant corrections. We still believe that it will be possible to count on the serious growth of the euro currency no earlier than the end of 2022, when the Fed, in theory, should announce a slowdown in the increase in the key rate or a refusal to increase it further. In this case, there will be fundamental reasons to expect a rise in the euro. But at the same time, we do not know and cannot know what will happen to geopolitics by that time. We have already mentioned that three of the four strands of the Nord Stream pipeline were blown up last week. It is still unclear who is behind this terrorist attack. One thing is clear – the European Union will suffer from it. Gas supplies from Russia have been stopped and are unlikely to be resumed in the near future. Recall that the main plan of Brussels was to fill gas storage facilities as much as possible before gas supplies from the Russian Federation stopped to spend the current winter without problems and then solve the problem with gas over the next year. However, either the Kremlin has escalated the "gas conflict," or Washington has thus decided to accelerate the increase in LNG supplies from the United States to the EU. Still, the fact remains that the Nord Stream is not functioning, and if it is not repaired in the near future, it will never function. The European economy will start to stall without Russian gas. There will be practically no macroeconomic statistics in the EU next week. Of the relatively important events, we can single out only the indices of business activity in the service and manufacturing sectors, another speech by Christine Lagarde, and a report on retail sales. The market is now primarily interested not in macroeconomics but in geopolitics. Therefore, it will play an important role in the prospects of the euro/dollar pair. From our point of view, the situation may deteriorate dramatically in October. First, Moscow and Kyiv have taken the path of escalation of the military conflict. The Kremlin said that any strike on the territory recognized by it would be regarded as an encroachment on the integrity and security of the Russian Federation, so a tactical nuclear strike could follow in response. Kyiv immediately responded with an application to join NATO, and NATO itself announced the principle of an open door. The AFU took the strategically important city of Liman the next day, so, as we see, the Ukrainian side continues to go on a counter-offensive. Consequently, the deterioration of the geopolitical situation is a very likely development of events, given the mobilization of several hundred thousand Russians. And this means that there will be new missile strikes, bloody battles, new Western sanctions, and so on. In addition, the European Union energy crisis may become a catastrophe when gas supplies from the Russian Federation can only be carried out by sea and through Ukraine. It is unclear how long the pipeline, which passes through Ukrainian territories, will live now, given the terrorist attacks in the North Sea. But one way or another, the EU may be left without gas this winter, which will affect its industrial production, GDP, and the satisfaction of European citizens. Based on all of the above factors, we believe that the euro currency may resume depreciation against the US currency. The average volatility of the euro/dollar currency pair over the last five trading days as of October 3 is 160 points and is characterized as "very high." Thus, on Monday, we expect the pair to move between 0.9644 and 0.9964 levels. A reversal of the Heiken Ashi indicator upwards will signal a new round of upward movement. Nearest support levels: S1 – 0.9766 S2 – 0.9644 S3 – 0.9521 Nearest resistance levels: R1 – 0.9888 R2 – 1.0010 R3 – 1.0132 Trading Recommendations: The EUR/USD pair has consolidated above the moving average line and may continue to move up. Thus, now we should consider new long positions with targets of 0.9888 and 0.9964 if we see a price rebound from the moving average and a reversal of the Heiken Ashi indicator upwards. Sales will become relevant again no earlier than fixing the price below the moving average with a target of 0.9644. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) identifies the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Based on current volatility indicators, volatility levels (red lines) are the likely price channel in which the pair will spend the next day. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 02:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323202
Declines At The Close Of The New York Stock Exchange, The Drop Leaders Were Nike Inc Shares

Declines At The Close Of The New York Stock Exchange, The Drop Leaders Were Nike Inc Shares

InstaForex Analysis InstaForex Analysis 03.10.2022 08:21
At the close of the New York Stock Exchange, the Dow Jones fell 1.71% to hit a 52-week low, the S&P 500 fell 1.51% and the NASDAQ Composite fell 1.51%. Shares of UnitedHealth Group Incorporated were among the leaders of gains among the components of the Dow Jones index today, which lost 3.79 points (0.74%) to close at 505.04. Walgreens Boots Alliance Inc fell 0.15 points or 0.48% to close at 31.40. Dow Inc shed 0.23 points or 0.52% to close at 43.93. The drop leaders were Nike Inc shares, which lost 12.21 points or 12.81% to end the session at 83.12. Boeing Co was up 3.39% or 4.25 points to close at 121.08, while Walt Disney Company was down 3.20% or 3.12 points to close at 94. 33. Leading gainers among the S&P 500 index components in today's trading were Charles River Laboratories, which rose 3.57% to hit 196.80, Weyerhaeuser Company, which gained 2.92% to close at 28.56, and shares of Twitter Inc, which rose 2.74% to end the session at 43.91. The losers were shares of Carnival Corporation, which fell 23.31% to close at 7.03. Shares of Norwegian Cruise Line Holdings Ltd lost 18.11% to end the session at 11.35. Quotes of Royal Caribbean Cruises Ltd decreased in price by 13.14% to 37.91. Leading gainers among the components of the NASDAQ Composite in today's trading were FingerMotion Inc, which rose 82.16% to hit 3.37, SAITECH Global Corp, which gained 43.36% to close at 3.24, and shares of Avenue Therapeutics Inc, which rose 39.03% to end the session at 10.08. The biggest losers were Atlis Motor Vehicles Inc, which shed 39.91% to close at 20.40. Shares of Aterian Inc lost 37.06% and ended the session at 1.24. Quotes of Edesa Biotech Inc decreased in price by 34.66% to 0.92. On the New York Stock Exchange, the number of securities that fell in price (1,758) exceeded the number of those that closed in positive territory (1,354), while quotations of 117 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,139 companies fell in price, 1,583 rose, and 228 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.69% to 31.62. Gold futures for December delivery added 0.11%, or 1.80, to $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 1.87%, or 1.52, to $79.71 a barrel. Futures for Brent crude for December delivery fell 2.13%, or 1.86, to $85.32 a barrel. Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.08% to 0.98, while USD/JPY advanced 0.23% to hit 144.77. Futures on the USD index fell 0.09% to 112.10. Relevance up to 05:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/295131
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The EUR/USD Pair: All Types Of Backgrounds Remain A Failure For The Euro (EUR)

InstaForex Analysis InstaForex Analysis 03.10.2022 08:27
EUR/USD 5M The EUR/USD pair tried to overcome the Senkou Span B line on Friday, but it failed to do so on the first attempt. Now the euro, which has been growing for only a few days so far, faces an important dilemma: either overcome the Senkou Span B line and count on some additional growth, or resume the fall. The European Union published a rather important September inflation report on Friday. Traders obviously did not expect to see the consumer price index rise immediately by 10%, but for some reason they rushed to sell the euro, and not buy it after the release of the data. From our point of view, each subsequent increase in inflation raises the likelihood of further European Central Bank rate hikes. Therefore, it would be logical to assume that the euro should show growth, not fall. But the market judged in its own way, the euro fell by 100 points, and during the rest of the day it almost completely won back these losses. The euro's prospects remain rather vague due to the fundamental and geopolitical background, but growth can also continue for some time on bare "technique". In regards to Friday's trading signals, the situation was not the best. There was no pronounced flat that day, but all signals formed in the area of 0.9804-0.9813. The first buy signal was false, as the price was able to go up only 15 points. The position was closed by Stop Loss at breakeven. Then an ultra-inaccurate buy signal was formed, after which the price went up 23 points. The position again closed at breakeven. The next two sell signals should have been ignored, but even if traders tried to work them out, they still would not receive profits, since the price never reached the target level. COT report: The Commitment of Traders (COT) reports on the euro in 2022 can be entered in the textbook. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. Then they showed a bearish mood for several months, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have said, because the demand for the US dollar remains high. Therefore, even if the demand for the euro is growing, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group increased by 2,000, while the number of shorts decreased by 1,800. Accordingly, the net position grew by about 200 contracts. This is very small and this fact does not matter much, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of long positions is higher than the number of shorts for non-commercial traders by 34,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 3. Geopolitics can bring down the euro with renewed vigor. Overview of the GBP/USD pair. October 3. The clouds are gathering over Liz Truss. Will she follow in the footsteps of Boris Johnson or become the new "Margaret Thatcher"? Forecast and trading signals for GBP/USD on October 3. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The trend began to change to an upward one on the hourly timeframe. Despite the fact that almost all types of backgrounds remain a failure for the euro, as well as the economic prospects of the European Union, the market still cannot sell the euro forever. Perhaps now we are entering a 2-3 month period of growth. The main thing is that the pair manages to settle above the Senkou Span B line. Without this, it will be difficult to count on growth. We highlight the following levels for trading on Monday - 0.9553, 0.9813, 0.9877, 0.9945, 1.0019, as well as the Senkou Span B (0.9804) and Kijun-sen (0.9695) lines. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union and the United States will publish indexes of business activity in the manufacturing sector. The US ISM index is more significant, we expect some market reaction to it, but everything will depend on the deviation of the actual value from the forecast. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323198
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

Will The Outlook For The Pound-Dollar (GBP/USD) Currency Pair Be Positive

InstaForex Analysis InstaForex Analysis 03.10.2022 08:32
GBP/USD 5M The GBP/USD currency pair continued to remain above the Senkou Span B line on Friday, which is very good for its prospects. It did not surpass the 1.1212 level, but not all levels are overcome the first time, so there is nothing wrong with that. The pound may continue rising this week, as it has overcome the descending trend line and the Ichimoku indicator line. Last Friday, the UK released a report on GDP for the second quarter, which caused a very restrained market reaction. It completely ignored US secondary statistics. The pound continues to trade in a very volatile manner, and the main factors that influence it are geopolitics and the "foundation". More precisely, it would be better to say that now they have weakened their influence on the pound, as they imply a further fall in the British currency. However, this is where the danger lies for traders. Now they may decide that the global downward trend is over, and now they can buy the pound "with all the money." However, on the 24-hour timeframe it is perfectly clear that the pound has not really overcome any important resistance yet, therefore, the fall may resume. Only one trading signal was formed on Friday - the price rebounded from the extreme level of 1.1212, after which it went down at a high of about 167 points. Unfortunately, it failed to reach the nearest target level of 1.0969, but the position could still be closed in profit, manually in the late afternoon. Then the profit on it would be about 60 points, which is also not bad. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group opened 18,500 long positions and 10,100 short positions. Thus, the net position of non-commercial traders increased by another 8,400, which is quite a lot for the pound. We could assume that the actions of the big players and the movement of the pound have finally begun to coincide, only the report is released with a three-day delay and simply does not include the last three days of trading, when the pound showed growth. The net position indicator has been actively falling again in recent weeks, and the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Now it has begun a new growth, so the British pound can formally count on growth. But, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 106,000 shorts and 59,000 longs open. The difference, as we can see, is still large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 3. Geopolitics can bring down the euro with renewed vigor. Overview of the GBP/USD pair. October 3. The clouds are gathering over Liz Truss. Will she follow in the footsteps of Boris Johnson or become the new "Margaret Thatcher"? Forecast and trading signals for EUR/USD on October 3. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair, as we see it now, has broken the downward trend on the hourly timeframe, as all key levels and lines have been overcome. But this is in the short term, since similar levels and lines on the higher time frames have not been overcome. Obviously, sooner or later the price will be able to surpass them, why not now? However, we still fear for the further prospects of the pound, so we call for caution when opening any positions. At least, do not forget about Stop Loss. We highlight the following important levels for October 3: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442. Senkou Span B (1.0969) and Kijun-sen (1.0884) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. Only manufacturing PMIs for September will be published in the UK and the US on Monday. The US index is more important, and the market may react to it. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323200
Biden Declared Unwavering Support For Ukraine, The Reserve Bank Of New Zealand May Go Back To Raising Rates

Ukraine's Successes Have Infuriated Putin Allies| Intel Acquired Mobileye And More

Saxo Bank Saxo Bank 03.10.2022 08:42
Summary:  The S&P500 broke below 3600 into the close on Friday as US 10-year yields surged above 3.8%. Risk off seen from multiple forces heading into the new month/quarter as corporate earnings misses continue to raise the threat of an ugly earnings season ahead. Meanwhile, the war could take a turn for the worse if Russia decides to escalates after losing a key city to Ukraine again over the weekend. China heads into the Golden Week holiday and OPEC+ meeting in focus this week with expectations of over 1mn b/d output cut on the table. UK crisis will also take more attention this week along with key US ISM manufacturing data due today and the payrolls data at the end of the week. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) had three down quarters in a row U.S. equities continued to sell off on Friday. S&P500 dropped 1.5% for the day and ended the month more than 9% lower. Nasdaq 100 declined 1.7% on Friday, falling nearly 11% in September. 10 of the 11 sectors in the S&P 500 declined, with Utilities, Information Technology, and Consumer Discretionary leading the charge lower. Real Estate was the only sector that gained on Friday.  Big U.S. stock movers   Being another latest signal of weakening U.S. consumer demand, Carnival (CCL:xnys) tumbled more than 23% after the cruise operator reported occupancy for the quarter ending Aug 31 below market expectations. Nike (NKE:xnys) plunged 12.8% on rising inventories and margin misses. For a detailed discussion on last week’s earnings warning signs from Nike, Micron, and H&M’s margin misses, please refer to Peter Garnry’s analysis here. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) climbed again U.S. treasury yields fell initially during London hours on Friday in tandem with the intraday swings in the U.K. Gilts and then pared the decline in yields in New York hours following the slightly stronger than expected PCE data and Fed Vice-Chair Brainard’s reiteration that the Fed will avoid pulling back from rate hikes prematurely. Yields decisively soared higher in the last hour of trading with 2-year yields rising 9bps to 4.28% and 10-year yields climbing 4bps to 3.83%. September was Hang Seng Index’s (HSIU2) worst month in 11 years Hong Kong and mainland China markets were treading water ahead of the week-long National Day golden week holiday in the mainland, with Hang Seng Index up by 0.3% and CSI 300 Index sliding 0.6%. Despite the lackluster trading last Friday, September was the worst month for the Hang Seng Index, which had fallen 13.7%, over the past 11 years. Chinese developers rallied to recoup some of the recent losses following incremental supporting measures from regulators.  CIFI (00884:xhkg), Country Garden (02007:xhkg), and Guangzhou R&F rebounded 11%, 9%, and 8% respectively. Chinese EV maker, Zhejian Leapmotor (09863:xhkg), tumbled another 22% last Friday after having collapsed 33.5% the day before on its first day of trading.  Other Chinese EV names traded in the Hong Kong bourses plunged from 4% to 7% even after more subsidies and support were announced by the Ministry of Commerce and the Shanghai Municipal Government. Chinese restaurant operator Jiumaojiu (09922:xhkg) plunged by 20.4% following its announcement to pay RMB1 billion for a 26% equity stake in the Guangzhou IFC Mall project which will give the company 30,000 sqm for self-use as headquarter and R&D centre.  GBP ends a volatile week strongest against the USD Sterling ended the week strongest in the G10 pack against the USD despite a flash crash last week and risks of a pension fund crisis in the UK on top of the current energy crisis and the runaway inflation issues at hand. Rising Russia tensions mean that the energy situation could get a leg up this week, but focus for the sterling will remain on any possible rollback of the loose fiscal policy. The political pressure is certainly mounting after the latest YouGov poll showed Labour with a 33-point lead in the polls, the widest margin since the 1990’s. GBPUSD is testing a break above 1.1235, but that for now seems to be underpinned by a softer USD and lower US yields, and it remains to be seen if that story will continue this week as we get past the rebalancing flows. Crude oil (CLX2 & LCOX2) prices waiting for a large OPEC+ production cut Crude oil ended last week mixed but mostly lower on Friday after some gains initially on expectations of an OPEC+ production cut coming this week. It is being reported that OPEC+ is mulling a possible reduction of 0.5-1mn barrels/day, after the September output rose 210k barrels/day from August. Some delegates said over the weekend that output cut could exceed 1 million barrels/day, and this has helped crude oil see a 3% jump at the Asia open. Given that the meeting is in-person for the first time since March 2020 also raises expectations of a large cut. WTI futures were seen above $82/barrel while Brent futures rose towards $88. Still, demand worries especially with China’s lockdowns and rapid global tightening pace will continue to put downside pressure on oil prices. Wheat futures (ZWZ2) higher on supply concerns On Friday, the USDA published its Quarterly Stocks and wheat production reports. Corn stocks were lower and soybeans higher than expected. December wheat (ZWZ2) jumped 2.8% with stocks in line but production in all categories falling short of expectations. Meanwhile, geopolitical concerns are on the rise with Russia threatening use of low-yield nuclear weapons as its military advantage starts to diminish. This has again raised concerns over the fate of the Black Sea export corridor and the supply situation in agri commodities may continue to be challenged. What to consider? Hot US PCE paves the way for another CPI surprise this month US PCE data came in stronger-than-expected, with the headline up 6.2% YoY from 6.3% YoY prior and 6.0% YoY expected. The core measure was at 4.9% YoY, coming in both higher than last month’s 4.6% YoY and the expected 4.7% YoY. This will likely push up the pricing of another 75bps rate hike from the Fed at the November meeting, as the CPI report out this month is generally likely to follow the same trend of remining close to its highs. Meanwhile, the final estimate of University of Michigan survey was revised lower to 58.6 from preliminary print of 59.5 due to the slide in expectations to 58 from 59.9, even as the current conditions fared better at 59.7 from 58.9 previously. The inflation metrics also diverged with 1yr consumer inflation expectations edging higher to 4.7% (prev. 4.6%), although the longer term 5yr slightly fell to 2.7% (prev. 2.8%). Stronger Q3 Atlanta Fed GDP and more calls for restrictive Fed policy The economic momentum in the US is still strong, as hinted by the big upward revision in Atlanta Fed’s Q3 GDP estimate to 2.4% from 0.3% earlier with higher contribution expected from private domestic investment and net exports. The advance Q3 GDP report is due on October 27, so that will likely give more ammunition to the Fed to raise rates aggressively at the November meeting. Meanwhile, more Fed speakers were on the wires on Friday continuing to push for interest rates to move towards or above the median of the dot plot. Fed Vice-Chair Brainard noted policy will need to be restrictive for some time, while Mary Daly (2024 voter) was more specific to say that she  expects to hold rates steady for at least all of 2023 after rate hikes. Barkin (2024 voter) echoed the Saxo view that Fed has decided that they’d rather be wrong by tightening too much rather than tightening too little. He said it would be a good news story if the Fed did a bit too much and inflation came down. Eurozone inflation remains painfully high The September eurozone consumer price index (CPI) reached double-digits at 10% year-over-year versus prior 9.1% and expected 9.7%. The core CPI (excluding volatile components) is up to 4.8% year-over-year versus expected 4.7% too. What is clearly worrying is there is an acceleration in price pressures beyond energy and food prices. This is a signal that inflation is now broad-based. In France, the EU-harmonized CPI was out at 6.2% year-over-year in September. This is much lower than what the consensus expected (6.7%). It stood at 6.8% in July and 6.6% in August. On the downside, the producer price index (PPI) for August reached a new high at 29.5% year-over-year against expected 27.6%. This matters. The PPI usually represents the pipeline in inflation which will be passed on to consumers, at least partially. This means that the peak in inflation is likely ahead of us in France and in all the other eurozone countries. Expect to reach it in the first quarter of next year, at best.  China’s PMIs were mixed in September China’s September official NBS Manufacturing PMI came in at 50.1, stronger than expectations (consensus 49.7, Aug 49.4), and returned to the expansionary territory.  The strength was found in the output sub-index which rebounded to 51.5 in September from 49.8 in August, which was largely due to the receding heatwave and pent-up demand.  The other major sub-indices in manufacturing remained below 50.  Exports were weak as the new export orders sub-index fell to 47 in September from 48.1 in August.  The Caixin Manufacturing PMI, which has a larger weight in coastal cities in the eastern region, fell to 48.1 (consensus 49.5, Aug 49.5), echoing the weakness in the exports element in the official PMI.  The NBS Non-manufacturing PMI came in at 50.6, below expectations (consensus 52.4, Aug 52.6).  Among non-manufacturing activities, the construction sub-index rose to 60.2 from 56.5, supported by infrastructure construction, while the service sub-index fell into the contractionary territory, coming in at 48.9, down from August’s 51.9. Retail, air travel, lodging, catering, and other services requiring close contact contracted in the midst of Covid restrictions. Ukraine’s recapture of key city raises the nuclear threat Ukrainian troops recaptured the city of Lyman over the weekend in occupied eastern Ukraine, less than a day after Russia announced the annexation of the area and vowed to defend it with all military means. Ukraine's successes have infuriated Putin allies such as Ramzan Kadyrov, the leader of Russia's southern Chechnya region who called on Putin to retaliate by escalating even further against Ukraine, including declaring martial law in the border regions and using low-yield nuclear weapons. China relaxes mortgage rates’ lower bound for first-time homebuyers and provides tax rebates to homebuyers plus telling banks to lend to the property sector The People’s Bank of China (PBoC) and the China Banking and Insurance Regulatory Commission (CBIRC) announced last Friday to lower or even remove the lower bounds imposed on first-time homebuyers in cities that experienced three consecutive months (from June to August 2022) declines in new home prices both sequentially and year-on-year.  The currently lower bound is the 5-year Loan Prime Rate minus 20bps.  The new policy will benefit first-time homebuyers in lower-tier cities while tier-1 cities do not meet the above price decline criterion. Among the top-70 cities, eight Tier-2 cities and 15 Tier-3 cities are eligible. The PBoC and the CBIRC also reportedly told the largest banks in the country to extend at least RMB600 billion in net new financing to the housing sector for the rest of the year. In addition, the State Administration of Taxation announced that from Oct 1, 2022, to Dec 31, 2023, homebuyers will be rebated the tax they paid for the sale of their previous home if the sale was within one year from the purchase of the new home.  Tesla reveals a prototype of its humanoid robot On last Friday’s AI Day, Tesla (TSLA:xnas) showcased a prototype of the EV maker’s first humanoid robot, dubbed Optimus, and reveals the latest updates to the company’s assistant deriving system. Tesla’s humanoid robots are still a long way from commercialization and it plans to deploy them first at Tesla factories.  Intel goes ahead to list its self-driving-car unit Intel’s self-driving-car unit, Mobileye said on Friday that the company filed with the Securities and Exchange Commission for IPO.  Mobileye did not provide information about the expected size and price range for its IPO. Intel acquired Mobileye, an Israeli company that develops driver-assistance systems for USD15.3 billion in 2017. Mobileye said it had agreements in hand to supply 266 million vehicles with the company’s driver-assistance systems by 2030.  US ISM manufacturing on watch today Due later today, ISM manufacturing is unlikely to dent the optimism around the US economy that has been building up further with positive economic indicators released over the last few weeks. While the Bloomberg consensus estimates show some signs of a slowdown to 52.1 in September from 52.8 in August – that should likely be underpinned by improving supply chains, while new orders should remain upbeat. On Tuesday, Japan’s Tokyo CPI will see impact of reopening Japan’s inflationary pressures are likely to continue to reign amid higher global prices of food, electricity as well as a weak yen propping up import prices. Bloomberg consensus estimates point to a slightly softer headline print of 2.7% YoY from 2.9% YoY previously, but the core is pinned higher at 2.8% YoY from 2.6% YoY previously. Further, the reopening of the economic from the pandemic curbs likely means demand side pressures are also broadening, and services inflation will potentially pick up as well.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-3-oct-2022-03102022
BSP Maintains Rates Amid Moderate Inflation; Eyes Further Tightening if Needed

US Dollar: Federal Reserve May Hike The Rate By 75bp In November

ING Economics ING Economics 03.10.2022 08:58
We've written a lot about the downturn in the housing market posing major risks for US economic activity, but the August personal income and spending report suggests the weakness is already broadening. With inflation pressures remaining intense we see the Fed hiking another 75bp in November, implying more economic pain to come Inflation ticks higher than expected In terms of today's US data flow, the Federal Reserve's favoured measure of inflation has come in higher than expected, which will keep the hawkish comments coming from Fed officials and reinforce expectations of a fourth consecutive 75bp interest rate hike on November 2nd. The August core personal consumer expenditure deflator rose 0.6%MoM/4.9%YoY (from an upwardly revised 4.7% year-on-year in July), above the consensus expectation of 0.5%/4.7%. This is a broader measure of inflation than the core CPI measure and we suspect it will stay close to these sorts of levels for another month or two. However, with inflation expectations numbers looking much softer and corporate pricing plans also heading lower (based on National Federation of Independent Business data in the chart below), we remain hopeful that a weakening growth environment will have the positive effect of taking some heat out of price inflation from early 2023. NFIB price plans & core PCE deflator YoY% Source: Macrobond, ING While consumer spending looks much weaker In addition to the inflation number, the monthly personal income and spending report is important for modelling US GDP growth forecasts. Consumer spending makes up around 70% of all economic activity in the US (versus, say 55-60% in most European economies). The monthly profile for US consumer spending is weaker than hoped in today's report with downward revisions to July real consumer spending (to -0.1% month-on-month from the initially reported +0.2% growth rate) while August spending came in at +0.1% MoM versus expectations of +0.2%. This is a surprise given high frequency people movement/restaurant diner/air passenger numbers and is not a great story for 3Q GDP at all. In fact it is so weak it could mean some analysts predicting a possible third consecutive negative GDP print. We think we will avoid it given a strong contribution from trade, business capex and inventory building, but with residential investment set to be a big drag and consumer spending seemingly flagging it isn't looking to be as strong as we would have liked. As such we are left with a  broader sense of a slowing growth trajectory, but with lingering inflation, which only implies more rate hikes and more economic pain to come. Read this article on THINK TagsUS Recession Inflation Consumer spending Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Saxo Bank Podcast: The Upcoming Bank Of Japan Meeting, A Look At Crude Oil, Copper And More

The USD/JPY Pair Has Potential For Further Bigger Rally Towards Upside References

InstaForex Analysis InstaForex Analysis 03.10.2022 08:57
Technical analysis: USD/JPY has been trading upside in the background and I found the brekaout of the tight balance triangle, which is good sign that market is ready for another upside swing. Trading recommendation: Due to the strong upside condition and the breakout of the contraction to the upside, I see potential for further bigger rally towards upside references. Watch for the potential buying opportunities on the intraday dips with the upside objectives at the price of 145.90, 147 and 147.50. MACD oscillator is showing fresh upside flow, which is good sign for further upside movement. Key support is set at the price of 144.20 Relevance up to 08:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295145
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

The AUD/USD Pair: Despite The Renewed Upside, Bulls Have Pulled Back Slightly

TeleTrade Comments TeleTrade Comments 03.10.2022 09:10
AUD/USD firms up at the start of the week, with all eyes on Tuesday’s RBA. US dollar is finding fresh demand as Asia’s factory activity weakens. Further upside appears capped in the aussie amid risk-aversion. AUD/USD is paring back gains towards 0.6400, having met fresh supply on a rejection near the 0.6450 psychological level. Bears are fighting back control, as the US dollar recovery is ganing traction amid strengthening risk-off flows in the late Asian session. The aussie is adding 0.50% on the day, at the time of writing, underpinned by a short-covering rally. Investors resort to repositioning ahead of Tuesday’s RBA policy decision. The Australian central bank is widely expected to hike rates by 50 bps but a dovih surprise of 25 bps cannot be ruled out, as recession fears mount. Despite the renewed upside, bulls have pulled back slightly over the last hours, as Asia’s factory activity weakens due to global slowdown and surging cost pressures, leaving investors on the edge. Further, falling commodities prices also add to the weight on the resource-linked aussie. Markets also remain cautious amid aggressive Fed tightening bets and ahead of the US payrolls data due for release this Friday.
John Hardy to FXMAG: The UK economy faces significant head-winds from supply side limitations

UK Finance Minister: "We Have Decided Not To Proceed With Scrapping The 45p Tax Rate"

TeleTrade Comments TeleTrade Comments 03.10.2022 09:52
UK Finance Minister Kwasi Kwarteng confirmed earlier reports, noting that his government will not go ahead with a plan to scrap a 45% rate of income tax. Additional quotes   Our growth plan is a strong package. The 45p rate was drowning out a strong package of intervention. Along with PM, I decided best course was not to proceed with abolishing 45p rate. Asked if he has considered resigning, he said, not at all. We are focussed on getting away from a high tax route. It has become clear the abolition of the 45p rate is a distraction from our mission to tackle the challenges facing the country. We get it, we listened. This will allow us to focus on delivering the major parts of our growth package. It was an ambitious plan. We have made lots of tough decisions. Our medium term plan is going to come out towards the end of November. I am very pleased we have decided not to proceed with scrapping the 45p tax rate. I take responsibility for it.   Market reaction GBP/USD has given away a part of the latest gains on Kwarteng’s confirmation, currently trading at 1.1200, still up 0.35% on the day.
Challenges in the Philippines: Rising Rice and Energy Costs Threaten Inflation Stability

Credit Suisse Economists' Forecasts For The USD/CNH Currency Pair

TeleTrade Comments TeleTrade Comments 03.10.2022 09:59
In China, the deteriorating outlook for exports adds to the outstanding woes of poor local demand. Economists at Credit Suisse expect USD/CNH to hit the 7.35 mark. CFETS Index should weaken more as exports decline “We think exports and the CFETS Index will weaken due to low US/Europe demand. As such, we re-entered long USD/CNH with a target of 7.35, and forecast a wider trading range of 7.00-7.45 for Q4.” “For the 20th Communist Party Congress, we expect the new cabinet to continue avoiding ‘floodstyle’ stimulus. Similarly, lifting covid restrictions will only be done gradually, in 2023 at the earliest.” “We expect President Xi’s policies of covid restrictions and ‘housing is for living, not for speculating’ to continue. That means consumption and investment activity will likely remain weak in Q4.”
Why India Leads the Way in Economic Growth Amid Global Slowdown

The GBP/USD Pair Gained Bullish Pace, September PMI Indices And Continued Volatility In The Markets

TeleTrade Comments TeleTrade Comments 03.10.2022 10:10
Here is what you need to know on Monday, October 3: Markets stayed relatively quiet during the Asian trading hours on Monday but volatility picked up in the early European morning. Political developments in the UK are watched closely by market participants ahead of S&P Global's final September PMIs for Germany, the euro area, the UK and Canada. The US economic docket will feature the ISM September Manufacturing PMI later in the day. Several FOMC policymakers, including Kansas City Fed President Esther George and New York Fed President John Williams, will also be delivering speeches in the second half of the day. After having registered modest gains on Friday, the US Dollar Index turned south and broke below 112.00. US Stock index futures are trading mixed in the European session and the benchmark 10-year US Treasury bond yield loses over 1% below 3.8%.  During the Asian trading hours, the data from Japan showed that the Tankan Large Manufacturing Index declined to 8 in Q3, missing the market expectation of 11. On a positive note, the Non-Manufacturing Index edged higher to 14 in the same period from 13. Meanwhile, Japanese Finance Minister Shunichi Suzuki reiterated that they continue to watch FX moves with a strong sense of urgency. USD/JPY showed no reaction to Suzuki's comments or the data releases and it was last seen moving sideways slightly below 115.00. GBP/USD gathered bullish momentum and jumped to its highest level in over a week near 1.1300. Reports suggesting that the UK government is expected to roll back the proposed scrapping of the higher rate of income tax helped the British pound gather strength. British Finance Minister Kwasi Kwarteng confirmed these reports by announcing that the government will not go ahead with a plan to scrap a 45% rate of income tax. Following the initial bullish reaction, the pair returned to the 1.1200 area, where it was up around 0.3% on the day. EUR/USD is having a difficult time making a decisive move in either direction and trading in a narrow range near 0.9800.  Gold snapped a two-week losing streak on Friday and edged higher toward $1,670 early Monday. Although XAU/USD returned to the $1,660 area in the European morning, it managed to hold its ground amid retreating US Treasury bond yields.  Bitcoin closed in negative territory on Saturday and Sunday but found support near $19,000. Ethereum fell nearly 4% over the weekend and dropped below $1,300 before staging a rebound early Monday. ETH/USD was last seen rising 1% on the day at $1,290.
Market Sentiment and Fed Policy Uncertainty: Impact on August Performance

The Third Quarter Ends With Losses, U.S. Dollar (USD) Strength Is Worrying

Swissquote Bank Swissquote Bank 03.10.2022 10:21
We spent the weekend talking about whether Credit Suisse will finally go bust or not. The share price is down below 4 francs a share, and the credit default swaps are going through the roof. The 5-year CDS for Credit Suisse spiked to 250 from around 60 at the start of the year. It means that the market is aggressively pricing a default for one of the biggest Swiss banks. Is it possible? Yes, it is possible, but it is highly unlikely. A negative note Zooming out, the third quarter ends with losses, even though we thought that the summer rally could’ve given something. But no. The S&P500 finished the 3rd quarter having slipped to the lowest levels this year. The same is true for Nasdaq and the Dow Jones. $24 trillion have been wiped out of the stocks so far this year. And the last quarter begins with aggressive rate hike expectations from the Federal Reserve (Fed), but also from the European Central Bank (ECB) and the Bank of England (BoE) to fight inflation and the dollar strength.Nike has been the latest company warning investors of falling profits due to mountains of stockpiles that they inherited from the pandemic times – and which brought the company to make nice price discounts -, and the strong dollar. Waiting for tesla reactions This week, we will watch how Tesla will react to the latest delivery report, the OPEC decision and the US jobs figures… and hope that this week’s jobs data doesn’t reveal strong job additions, and solid salary growth in the US. Watch the full episode to find out more! 0:00 Intro 0:21 What will happen to Credit Suisse? 3:14 Q3 ends on a negative note… 5:36 USD strength to become a major headache for next earnings season 6:51 What to watch this week? Tesla deliveries, OPEC decision & US jobs 7:50 Econ101 minute: Why the Fed must destroy jobs to fight inflation?   Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #CreditSuisse #Q4 #Nike #earnings #strongUSD #USD #EUR #GBP #Tesla #OPEC #US #jobs #Fed #BoE #ECB #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
The US Has Again Benefited From Military Conflicts In Other Parts Of The World, The Capital From Europe And Other Regions Goes To The US

The US Has Again Benefited From Military Conflicts In Other Parts Of The World, The Capital From Europe And Other Regions Goes To The US

InstaForex Analysis InstaForex Analysis 03.10.2022 10:48
The end of September was a complete disaster for the global markets. Traders hoped that the US Federal Reserve would at least ease the pace of rate hikes. But this never happened. On the contrary, the Fed officials and its chairman reiterated that they see a further rate increase as their priority aimed at slowing down galloping inflation. All hopes were destroyed last month, resulting in the biggest decline in the stock market and the surge in demand for safe-haven assets. Over the past decades, the US dollar has been traditionally viewed as a reliable store of value in times of economic turmoil. The already serious economic crisis is aggravated by high geopolitical tensions which is the main reason why the capital from Europe and other regions goes to the US. Notably, the US has again benefited from military conflicts in other parts of the world just as it happened 80 years ago. The Fed's recent forecast for GDP, inflation, and unemployment as well as its plan to hike rates that were announced at its latest September meeting signaled that the regulator braces for more headwinds next year. This means that the stock market will largely depend on high rates while the US dollar will continue to strengthen despite the process of monetary tightening launched by other global central banks. So, what to expect in the market today and in the week ahead? Most likely, stock markets will still be focused on rate hikes and geopolitical tensions between Russia and the Western coalition led by the US. The broad-based S&P 500 index is expected to decline to the level of 3,000.00 after passing the interim support of 3,300.00. The European and Russian stock markets are likely to follow a similar trajectory. On Forex, we may observe a short-term consolidation phase ahead of the RBA and RBNZ monetary policy meetings this week as well as an important jobs report in the US. Any negative news, especially from the US, will boost the demand for the US dollar. So, after a quick fall, USD may recover again, being a preferred safe-haven asset in these uncertain times. As for today, the weak data on Manufacturing PPI in the US may serve as a signal to buy the US dollar after its short decline in the Asian and European sessions. Daily forecast: GBP/USD The pair is going through a consolidation phase under 1.1225 ahead of the Manufacturing PPI data release in the UK and US. The downbeat data in both countries may stop the pair from a breakout. Instead, it may reverse and move down to 1.0915. USD/JPY The pair is testing the level of 145.00. Consolidation above this range will open the way towards the upper target of 145.90, the recent high formed on September 22.   Relevance up to 09:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323222
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The Euro (EUR) Is In A Stable Channel And The Pound (GBP) Has Little Chance Of Falling

InstaForex Analysis InstaForex Analysis 03.10.2022 11:02
December futures for both Brent and WTI continue to trade below $90 per barrel. Several factors are to blame, and all of them are related to the current global economic slowdown. In addition, world central banks are competing to see who can raise rates faster, while demand is declining very rapidly. The record growth in US oil inventories also prevents any possible price increase. To address this, OPEC members are having a meeting on October 5. They will likely discuss the issue of cutting production by 1 million barrels per day, which, if approved, will make everyone realize that a recession may come much earlier than expected. In terms of dollar, the current environment will provoke high volatility, which will maintain the stability of the currency. Any decline will be a correction rather than a development of a new trend. EUR/USD Inflation in the Euro area has reached a record high. A number of countries said theirs exceeded 20%, while Germany reported that theirs has come close to 11%. Considering that measures to support the economy are being completed, and the energy crisis is gaining momentum, there is every reason to believe that the current level will be updated several times during the winter months. In terms of positioning, net long positions of euro slightly corrected, which is surprising given the high inflation, gas crisis and geopolitical tensions on the region. Even so, demand remains strong, and it is likely that the recent decline below parity is just short-term. This means that a correction is not long in coming, and bullish momentum may develop amid any positive news from Europe. The settlement price is above the long-term average. Euro is in a stable channel and there is no reason to expect a reversal. But if a correction develops, then 0.9863 will be the nearest target, and rising above it will open the way towards the border of the channel at 0.9960/80. There is little chance of hitting the low, but growth will also be limited. GBP/USD UK markets were highly volatile last week due to the government's plan to cut taxes in order to offset households' electricity bills. Pound hit a new record low, while bond yields soared. The Bank of England was also forced to intervene in the stock market to avert a liquidity crunch among local pension funds. There is growing pressure on the government to adjust its fiscal plans, but so far there is no sign of a change in policy. On the bright side, latest economic data looks very decent as the final estimate of GDP for the 2nd quarter was raised to 4.4% y / y. The housing price index slowed down from 10% to 9.5% y / y, while the number of applications for mortgages significantly exceeded the forecast. Consumer lending does not decrease. In terms of positioning, net short positions in pound slightly decreased, and it seems that sell-offs in the currency are about to stop. The settlement price is well above the long-term average, which indicates that last week's fall is not supported by the changes in the futures market. There is a high chance of a reversal. Most likely, pound will trade around 1.0345 for some time, then go for a rebound. The nearest targets are the 23.6% retracement level at 1.1264 and the upper limit of the channel at 1.1670/1720. There is little chance of a decline below 1.0345, but if it happens, buying pressure will surge, which will continue the correction.   Relevance up to 09:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323220
UK Inflation Expected to Slow Sharply in July: Market Analysis and Insights - August 16, 2023

Podcast: A Look At New Sources Of Concern, Financial Conditions Continue To Deteriorate Badly

Saxo Bank Saxo Bank 03.10.2022 11:27
Summary:  Today we discuss the market sliding to new lows on Friday after a firm US PCE inflation indicator and despite the stabilization of global sovereign bond markets in the wake of the panicky situation in the UK gilt market last week that triggered an easing move from the Bank of England. We look at new sources of concern as financial conditions by some continue to deteriorate badly. A look at the USD, crude oil, natural gas and wheat, Tesla, Biogen's new Alzheimer drug candidate and more in today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean engraver If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-oct-3-2022-03102022
Monitoring Hungary: Glimmering light at the end of the tunnel

The Euro To Hungarian Forint (EUR/HUF) Will Be Exposed To An Increase

TeleTrade Comments TeleTrade Comments 03.10.2022 11:40
Forint’s carry appeal has become hard to ignore. Analysts at Credit Suisse now target 395 in EUR/HUF over the medium-term. EUR/HUF still exposed to the upside in the short-term “We turned medium-term bullish on the forint in the middle of September on the back of sizeable carry and cheap valuations by historical REER standards. We also see scope for Hungary to unlock the EU funds from the 2021-2027 budget (which are currently frozen) later in Q4.”   “We set an end-quarter target of 395 for EUR/HUF. But in the short-run, the risk that Hungary will see a cut to its EU funds allocation as well as a possible escalation in the Russia/Ukraine conflict, will keep implied volatility abnormally high and EUR/HUF exposed to the upside.”
UK Budget: Short-term positives to be met with medium-term caution

The Bank Of England's (BoE) Intention To Spend £65bn To Stabilize Financial Markets

InstaForex Analysis InstaForex Analysis 03.10.2022 12:19
Markets need to be prepared. Otherwise, hysteria will happen to them. The Fed knows this very well, which, looking at the "taper tantrum" of 2013, began to gradually introduced investors the QE curtailment in 2021. But governments communicate with the markets less often. Unless they have to. UK Prime Minister Liz Truss, amid a sharp decline in the ratings of her Conservative Party, was forced to admit a mistake. More attention should have been paid to preparing investors for tax cuts. However, the help of the Bank of England smoothed out this oversight: the GBPUSD pair, after sinking to a new anti-record, completely regained the lost ground. The worst month for sterling since 2008 and the best week since 2020. It is rare to find such a breathtaking roller coaster in Forex. The presentation of the fiscal stimulus package to the general public turned into a large-scale sale of British bonds and the fall of the GBPUSD to a new historical bottom. Only the suspension of the quantitative tightening (QT) program and the resuscitation of quantitative easing (QE) allowed the bulls to recover. The reaction of the debt market to the actions of the government and the Central Bank With the BoE's intention to spend £65bn to stabilize financial markets, many thought the worst was over. The panic is over. But what will happen after October 14, when the program ends? The Bank of England will return to QT again and continue the cycle of raising the repo rate. Its policy will be contrary to the actions of the government. In addition, the reputation of the regulator was dealt a blow. Rumors began to circulate in Forex that Andrew Bailey and his colleagues are on the sidelines of the Cabinet of Ministers and are ready to finance the embarrassed government of Liz Truss by printing money. Indeed, due to the fiscal stimulus package and the associated S&P downgrade of the UK's credit rating outlook to "negative" and panic in the financial markets, the gap in the popularity of Labor and the Conservatives has widened to 33 points. Elections will be held in 2024. Contradictions in monetary and fiscal policy and shaken confidence in the Bank of England and the Cabinet of Ministers are far from the only problems of the pound. Britain remains the only G7 economy still smaller than it was before the pandemic. Due to the energy crisis, the country is on the verge of recession. Dynamics of the G7 economies Thus, the markets managed to calm down. And this is good news for sterling. But is it enough to continue the GBPUSD rally? Personally, I doubt it. The pound has many unresolved issues, including the echoes of Brexit. It is unlikely that this currency is capable of a long rally. On the contrary, the US dollar continues to be in high demand as a safe-haven asset, and the Fed is able to bring the federal funds rate up to 5%. Technically, there is a consolidation in the 1.105–1.1265 range on the 4-hour GBPUSD chart. An unsuccessful test of its upper border with a subsequent return to 1.115 is a reason for selling within the false breakout pattern.   Relevance up to 09:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323226
RBA Interest Rate Decision: Another 50bps?

RBA Interest Rate Decision: Another 50bps?

Jing Ren Jing Ren 03.10.2022 13:25
Normally, higher rates would be seen as good for the banking sector. So there is understandably some concern about the financial markets since Australian banking shares are down considerably despite a broad consensus that the RBA will raise rates tomorrow (or late tonight, depending where you are on the globe). There is a global issue, and it might give the RBA a little pause. Rumors circulated on Sunday that a "major bank" was "on the brink" of collapse. This sent global banking shares down. It was also reported that the BOE was looking at Credit Suisse, given the shake up in global markets. The sudden moves in the pound and yen have made things particularly difficult for banks. What it means for the RBA The one thing that could significantly disrupt central banks' plans with regards to monetary policy is the risk of failure of a major bank. That would be equivalent to a "Lehman Brothers" event, but on a global scale. Even if it isn't a bank in the country, the loss of confidence in the financial industry could shake policy, and force central banks to inject liquidity. However, it's just rumors at this point. Putting that aside, the RBA is broadly expected to raise rates by 50bps, and continue tightening. There is a discrepancy with the projections, though. 97% of Australian economists forecast 50bps, but only 75% of international economists do. What it means for the markets In the scheme of practical effects, the solid consensus implies that the rate hike is fully priced in. What level of uncertainty there is around the outlook. A recent survey by Bloomberg showed that a majority of international economists believe this is the last "outsized" hike by the RBA, and that only 25bps will be forthcoming at the next meeting. Australian economists aren't so sure, with more betting on stronger action by the Reserve Bank. They point to inflation still rising and data remaining strong (if the housing situation isn't considered). Another point brought up is that the RBA could go for a one-and-a-half hike, since it is at an "unusual" rate that isn't a multiple of 0.25. Thus, there is a growing call for a "consensus" hike of 40bps at the next meeting, splitting the difference between 25 and 50. It's not all up to them As for the currency, the major obstacle is that the Fed keeps raising rates faster than any of the other majors. Even the most hawkish scenario for the RBA leaves the interest rate gap widening. And with inflation still rising in Australia, while US inflation (at least on the headline) is receding, then the real spread is getting even wider. A post rate rally in the case that Lowe gives clear indications that more than 25bps is likely at the next meeting, might sputter out quite quickly. If the RBA fails to be as hawkish as the Australian economists expect, then the currency could slide even further.
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

How The EUR/USD And GBP/USD Currency Pairs Look Like Today

InstaForex Analysis InstaForex Analysis 03.10.2022 13:19
Details of the economic calendar for September 30 The final data on UK GDP for the second quarter brought a pleasant surprise. GDP for the second quarter grew by 0.2% compared to the previous forecast of -0.1%, and in annual terms increased to +4.4% against the previous estimate of 2.9%. Surprisingly, Britain is not in a technical recession based on GDP data. The publication of data on Eurozone inflation was considered the main event, which reached a double-digit record. Eurozone consumer prices rose by 10% in September, a new all-time high, according to the European Union Statistical Office. The reason for such unprecedented performance lies in the sharp rise in energy prices. As inflation rises, the ECB will continue to tighten monetary policy, which will lead to a sustained rise in interest rates. Analysis of trading charts from September 30 The EURUSD currency pair, during the corrective movement, reached the resistance level of 0.9850, relative to which there was a reduction in the volume of long positions on the euro. As a result, there was a price rebound in the market. The GBPUSD currency pair ended last week in the stage of lateral amplitude, while the price range was quite wide, about 200 points. Economic calendar for October 3 Today, data on the business activity index in the manufacturing sector in Europe and the UK have already been published, where the indicators came out worse than the preliminary estimate. Details: Eurozone manufacturing PMI fell from 49.6 to 48.4 in September. UK's manufacturing PMI in September rose from 47.3 to 48.4 against the forecast of 48.5. There was practically no reaction due to the fact that the market played out the information noise. During the American trading session, the United States manufacturing PMI is also expected for publication, which may rise from 51.5 to 51.8. As for the information flow, the Fed will hold a closed meeting. Expect news from the media regarding what the board of governors discussed. Time targeting: US Manufacturing PMI (Sept.) – 13:45 UTC Trading plan for EUR/USD on October 3 To prolong the current correction on the market, the quote must be kept above the resistance level for at least a four-hour period. In this case, buyers of the euro will have high chances to return the quote to the parity area. An alternative scenario considers the completion of a corrective move, where holding the price below 0.9750 in a four-hour period could lead to a phased decline. Trading plan for GBP/USD on October 3 Since the opening of the new trading week, the sideways formation has been broken in an upward trajectory. The movement was accompanied by high speculative interest, during which there was inertia on a scale of more than 180 points. The reason for such a heavy movement was the rumor that the UK plans to cancel the plan to reduce the tax rate from 45% to 40%. Subsequently, this rumor was officially confirmed by the British government. UK Finance Minister Kwasi Kwarteng confirmed the change on Twitter. "We get it, and we have listened," he wrote. Returning to the technical analysis, a stable holding of the price above the high of the last week at 1.1233 may well lead to the subsequent strengthening of the pound towards the price range of 1.1410/1.1525. Otherwise, the quote will continue to move within the previously passed amplitude of 1.1050/1.1200. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.       Relevance up to 10:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323236
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Forex: Canadian Dollar (CAD) And Norwegian Krone (NOK) May Go Up Thanks To OPEC+ Cutting Supply

ING Economics ING Economics 03.10.2022 13:33
The pound has reversed back to pre 'fiscal event' levels on news of a policy U-turn. A holiday in China this week might introduce slightly calmer conditions to FX markets, but prospects of another solid US jobs report on Friday should keep the dollar bid on dips USD: FX intervention can only slow, not reverse trends We are focusing on four points this morning. 1) The potential for OPEC+ supply cuts. 2) FX intervention from Japan and possibly China too. 3) The close first round elections result in Brazil and 4) the prospects for Friday's US jobs report. Media reports suggest OPEC+ (meeting Wednesday) will push for a 1mn barrel per day cut in production. Oil experts will have to tell us why the Saudis will want this, but suffice to say it seems President Biden's visit to the region this summer has failed to deliver the desired supply increases. Indeed, it is a strange period when OPEC+ may be looking at a large supply cut while the US is still selling strategic petroleum reserves. The prospects of an OPEC+ supply cut may offer some brief support to the beleaguered Canadian dollar and Norwegian krone, but given a challenging risk environment, we doubt these high beta currencies can hold any near terms gains. Friday saw Japan announce that the central bank had bought close to US$20bn of yen in its intervention late last month. Remember this was the first yen buying since 1998. This will be the start of a campaign from Japanese authorities who can only hope to slow, not reverse the USD/JPY uptrend. Indeed, USD/JPY traded up above 145 again overnight and we should probably expect more intervention around these levels shortly. On the subject of intervention, China may well have intervened above 7.20 in USD/CNY last week. Unlike the Japanese, Chinese authorities do not report FX intervention activity. It is a holiday this week in China, so the 7.20 level may not be challenged again until next week. Sunday's Presidential vote in Brazil saw a much closer vote than expected. A run-off will be held between Lula and Bolsonaro on 30 October. Some are saying that Brazilian assets should rally on the news that Bolsonaro has a better chance of retaining power than initially thought. However, the much closer vote than expected leaves open the prospect of a disputed election outcome. As we have seen in the UK recently, the external environment is very unforgiving at the moment. And with reports of $70bn of portfolio flows having left emerging markets this year, another month of campaigning and the prospects of a close vote could see USD/BRL make a run at 5.60. Finally, the highlight of this week's US data calendar will be Friday's release of the September jobs report. Our team looks for a solid 200k increase in jobs and the unemployment rate staying low at 3.7% - both pointing to another 75bp hike from the Federal Reserve on 2 November.  DXY has corrected around 2.5% from its highs seen last week. We are in the camp favouring stronger levels later this year and feel that this correction under 122 will be short-lived. Chris Turner EUR: PMIs in focus Today will see the final September PMIs for the eurozone, with the manufacturing component expected to remain near 48.5, in contraction territory. News that OPEC+ wants to increase oil prices will not be welcomed across the region. Equally weekend reports suggest that what little remains of Russian gas exports to Europe may dwindle as well - e.g. Italy. As in the UK, the focus in the eurozone is also shifting to the size of fiscal support packages and whether local bond markets can easily digest them. EUR/USD is holding its gains from last week after the Bank of England stepped in to stabilise the Gilt market. One could argue that intervention (both FX from Asian authorities and in the bond market from UK authorities) is delivering this pause in the dollar's bull trend. But the macro factors which are driving it remain firmly in place and 0.9850/9870 could prove the limit to the current EUR/USD bounce. Favour a retest of 0.95 in October. Chris Turner GBP: Policy U-turn As we go to publication, GBP/USD is just enjoying another leg higher on reports that the Liz Truss government will formally reverse its planned abolishment of the 45% income tax bracket. Our UK team feels this move is rather symbolic, being less about the amount of money it will save (low billions) and more about the poor signal it had delivered of ideological (unfunded) tax cuts. The move looks driven by a backlash from her own party and perhaps the threat of a sovereign rating downgrade, where the S&P rating agency on Friday shifted the UK outlook to negative from stable in an unscheduled move. We will not be churlish here and say this will not affect the pound. Yet cable has today returned to levels seen just before Chancellor Kwasi Kwarteng delivered the infamous 'fiscal event' and it would now be hard to argue that cable should be trading much higher than that. But this does alleviate the risk of cable trading to parity in that it shows Downing Street will show greater respect to financial markets when considering policy options. Maybe we see a new cable trading range of something like 1.1000-1.1350. EUR/GBP may find support under 0.8700 now. Chris Turner CEE: Second-round of central bank decisions We start this week with PMIs across the region. In Poland and the Czech Republic, we expect further declines to new record lows since Covid levels. In Hungary, on the other hand, we expect a slight improvement. The Polish and Romanian central banks will meet on Wednesday, following the National Bank of Hungary and Czech National Bank last week. In Poland, we expect a 25bp rate hike to 7.0%, the same pace as in September, in line with surveys. However, inflation released on Friday surprised significantly to the upside and investors moved to the hawkish side of the market. In Romania, we expect a 50bp rate hike to 6.0%, in line with surveys. The central bank already slowed the pace of rate hikes in August, and we expect the same this week. Industrial production and retail sales data for August in the Czech Republic and Hungary will be released on Thursday and Friday. With the exception of Hungarian retail sales, we expect an improvement in year-on-year figures. However, the higher number of working days than last year is playing into the hands of both countries this time. On the FX side, this week we will continue to follow the gas story and the geopolitical situation. However, at the end of last week we saw gas prices fall again, EUR/USD higher and interest rate differentials rise across the region under pressure from weaker FX. Altogether, we think this week should lead to a calming of the situation and erase some of last week's losses. We see the Hungarian forint as the most undervalued at the moment. This week, the NBH will launch the previously introduced measures to withdraw excess liquidity from the market, which we believe will bring calm and the forint should return to 410 EUR/HUF. The Polish zloty from earlier in the week should benefit from the recent increase in rate differentials after Friday's CPI and return closer to 4.80 EUR/PLN. However, Wednesday's National Bank of Poland meeting should bring disappointment to the markets and leave the zloty in the current range. We expect the Czech koruna to return to the 24.60-70 EUR/CZK intervention band after the closing of short positions connected to the CNB meeting last week. In the second half of this week, we should see in the data how much the central bank spent last week when the koruna came under pressure for the first time since the August CNB meeting, which should tell us more about the sustainability of the current FX regime. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

The Continuation Of The Rebound Of USD/JPY Remains On The Right Track

TeleTrade Comments TeleTrade Comments 03.10.2022 13:37
EUR/JPY adds to the recent rebound and surpasses 142.00. Further upside could see the 144.00 region revisited. EUR/JPY maintains the bullish bias and reclaims the area beyond the 142.00 barrier at the beginning of the week. The continuation of the rebound from last week’s lows remains well in place for the time being. That said, the cross could therefore extend the bullish attempt to the weekly top at 144.04 (September 20), which is deemed as the last defense for a move to the 2022 peak at 145.63 (September 12). In the meantime, while above the key 200-day SMA at 135.90, the constructive outlook for the cross should remain unchanged. EUR/JPY daily chart  
Analysis Of Situation Of The US Dollar To Swiss Franc Pair (USD/CHF)

The US Dollar To Swiss Franc (USD/CHF) Pair Seems Ready For Further Growth

TeleTrade Comments TeleTrade Comments 03.10.2022 13:42
USD/CHF turns positive for the second straight day and draws support from a combination of factors. Aggressive Fed rate hike bets continue to underpin the USD and remain supportive of the move up. A positive risk tone dents demand for the safe-haven CHF and provide an additional lift to the major. The USD/CHF pair attracts fresh buying near the 0.9830 region on Monday and turns positive for the second successive day. The intraday move up picks up the pace and lifts spot prices back above the 0.9900 mark, or a three-day high during the first half of the European session. Following an early dip, the US dollar catches fresh bids on the first day of a new week and allows the USD/CHF pair to capitalize on Friday's strong rally of nearly 150 pips from the 0.9730 area. Apart from this, a modest recovery in the global risk sentiment - as depicted by a positive tone around the US equity futures - undermines the safe-haven Swiss franc and provides an additional lift to the major. The USD uptick, meanwhile, seems unaffected by a softer tone surrounding the US Treasury bond yields and continues to take cues from expectations that the Fed will stick to its aggressive rate hiking cycle. In fact, the markets have been pricing in another supersized 75 bps Fed rate increase in November. This, in turn, should act as a tailwind for the US bond yields and favours the USD bulls. Market participants now look forward to the US economic docket, featuring the ISM Manufacturing PMI for a fresh impetus later during the early North American session. The focus, however, will be on Friday's release of the US monthly jobs report, popularly known as NFP. Nevertheless, the USD/CHF pair seems poised to climb further towards the 0.9945-0.9950 supply zone, or a multi-month high set in September.
Indonesia: Inflation moderates further in March

Asia: Indonesian Inflation Hit 6%, One Of The Drivers Was The Increased Price Of Fuel

ING Economics ING Economics 03.10.2022 13:44
Headline inflation rises as Pertalite price increase kicks in Inflation in Indonesia has remained subdued 6.0% CPI year-on-year growth   As expected September inflation at 6% after fuel price hike Price pressures continue to build in Indonesia. September CPI inflation rose 6% year-on-year and 1.2% month-on-month after the government increased the price of subsidised fuel. As a result of the price increase for Pertalite, transport costs increased 8.9% for the month. Meanwhile, food inflation also accelerated to 7.9% while only clothing and financial services saw slower inflation from the previous month.    Core inflation settles at 3.2% The surprise today was the core inflation reading which increased to 3.2% YoY from 3.0%. The market consensus had core inflation rising to 3.5% as economic activity continued to improve.  Despite the downside surprise, we believe core inflation should continue to accelerate for the rest of the year as second-round effects from the recent fuel price hike begin to manifest. Furthermore, improved economic growth prospects suggest demand-side pressures are likely to build, putting pressure on core inflation to rise further. Headline inflation now at multi-year high Source: Badan Pusat Statistik and Bank Indonesia BI still likely to retain hawkish tone Bank Indonesia (BI) announced two successive surprises in the last three months; the first of which was an unexpected rate hike at the August meeting followed by a hefty 50bp rate increase when the market had priced in a more modest one.  With inflation now hitting multi-year highs, we expect BI to retain its hawkish tone with a rate hike at the October meeting still a possibility. The core inflation number however could mean that BI would be under less pressure to deliver another punchy (50bp) rate increase with the size of the hike likely dependent on the rupiah's performance for the month.      Core inflation expected to rise further as second-round effects manifest Source: Badan Pusat Statistik Read this article on THINK TagsIndonesian CPI IDR Bank Indonesia Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Asia morning bites - 16.05.2023

USD/JPY: Would Japanese MoF Conduct A Forex Intervention Again?

Kenny Fisher Kenny Fisher 03.10.2022 13:55
USD/JPY has edged higher at the start of the week, trading at 145.10 in the European session. Tokyo Core CPI next Japan’s Tankan indices for Q3 were mixed and the yen had a muted response. Manufacturing dropped to 8, down from 11 in Q1 and missing the consensus of 11 points. Services ticked higher to 14, up from 13 and just above the forecast of 13 points. Later in the day, Japan releases a key inflation gauge, Tokyo Core CPI. The index is expected to rise to 2.8% in August, up from 2.4% in July.   Inflation in Japan has risen to 3%, much lower than other major economies but a huge change after years of deflation. The Bank of Japan has been keeping an eye on inflation, but Governor Kuroda has said he will not change the Bank’s ultra-loose policy until wages rise and it’s clear that inflation is not transient. Sound familiar? Fed Chair Powell and ECB President Lagarde dismissed high inflation as transient but were forced to tighten policy as inflation never let up. The BoJ has been very firm with its yield curve control, keeping JGB yields at low levels. With US Treasury yields moving higher, the US/Japan rate differential has widened, and the yen has fallen sharply. The Ministry of Finance (MOF) stepped in with an intervention in September, after the yen hit 145.90. The dramatic move sent the yen higher, but only for a few days. USD/JPY has been trading close to the 145 line and has pushed just above it today. With the US dollar continuing to rally, it seems likely that the yen will continue to lose ground. It will be interesting to see if the Ministry of Finance intervenes again to prop up the yen. If it does, we can expect some volatility from the Japanese yen. USD/JPY Technical There is resistance at 144.81 and 146.06 USD/JPY has support at 143.21 and 141.88 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen tiptoes at 145 line - MarketPulseMarketPulse
Poland's Inflation Expected to Reach Single Digits in August, but Disinflation to Slow Down

The Rate Hike May Not Become A Growth Driver For The Australian Dollar (AUD), Given The Growing Recession Risks

InstaForex Analysis InstaForex Analysis 03.10.2022 14:14
The dollar is falling again at the beginning of the week after a strong fall last Wednesday, when the dollar index (DXY) lost more than 1%, and further decline on Thursday. Today, at the time of this writing, DXY futures are trading near 111.93, 280 pips below a new local 20-year high reached last week. It seems that buyers of the dollar have not yet decided on active actions. Perhaps this is in anticipation of the Institute for Supply Management (ISM) report on business activity and employment in the manufacturing sector of the US economy. The PMI index for September is predicted at 52.3, slightly lower than the previous value of 52.8. A result above 50 is seen as positive and strengthens the USD. However, the expected relative decline is likely to alarm investors. The indicator has been gradually falling since May of this year (previous values of the indicator: 52.8, 53.0, 56.1, 55.4, 57.1, 58.6, 57.6). It is possible that its decline may be more than expected, and this, one way or another, indicates a slowdown in the growth rate of activity in this most important sector of the American economy, which cannot be ignored by the central bank's leadership when conducting a cycle of tightening monetary policy. Although, as has been repeatedly stated by various representatives of the Fed leadership, a recession is most likely unavoidable. However, the Federal Reserve still intends to tighten monetary policy further, actively raising the interest rate in order to curb high inflation, which is not declining in any way. A number of speeches from the Federal Reserve representatives are scheduled for today (at 13:05, 18:15, 19:10, 22:45 GMT). Their speeches are assumed to focus on the need for further interest rate hikes, and this will most likely not have a strong impact on markets that are already ready for this. But if they talk about the possibility of a pause or a slowdown in this cycle, the decline in the dollar, observed last week, may continue this week, especially on weak macro data from the US. The focus of market participants will be on the publication of key data from the US labor market on Friday—the US Department of Labor will present its monthly report for September. Positive indicators are expected, while unemployment remains at minimal levels. Market participants who follow the dynamics of commodity currencies and, in particular, the Australian dollar will be waiting for the publication tomorrow (at 03:30 GMT) of Reserve Bank of Australia's decision on the interest rate, which is predicted to be raised again by 0.50% to 2.85%. Actually, this is a bullish factor for the national currency. AUD may also receive support amid a decrease in supply on the natural gas market due to the undermining of the Nord Stream gas pipelines. Australia is known to be a major supplier of raw materials, including coal and liquefied natural gas. However, the market's reaction to tomorrow's interest rate hike may not be very positive, and the rate hike may not become a growth driver for the AUD, given the growing recession risks for the Australian economy. The RBA, like other major world central banks, is in the same difficult situation—high and rising inflation, on the one hand, and a slowdown in the economy, on the other. In other words: "rates cannot be raised or lowered." At the same time, the US dollar continues to receive support as a safe-haven asset, especially given the high geopolitical risks in Europe and the world. As of writing, the AUD/USD pair is trading near the 0.6450 mark, resting on the resistance level of 0.6455. In case of its breakdown, further corrective growth is not ruled out. In general, the downward dynamics of AUD/USD remains, making short positions preferable.       Relevance up to 11:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323242
Forex: USD/JPY Is Expected To Reach 145 In The End Of The Year. Why Is That?

Forex: USD/JPY Is Expected To Reach 145 In The End Of The Year. Why Is That?

Conotoxia Comments Conotoxia Comments 03.10.2022 15:45
In September, the Japanese government and the Japanese central bank intervened in the forex market with the aim of strengthening the yen. Earlier, the USD/JPY exchange rate had rallied close to the JPY 146 per USD level, reaching its highest level since 1998, which worried the Japanese authorities. This morning, the USD/JPY exchange rate approached the levels again, before the intervention. Government intervention to strengthen the Japanese currency Tonight, Japanese Finance Minister Shunichi Suzuki told reporters in Tokyo that the government remains ready to take the necessary responses to excessive currency movements. He added that he would continue to keep a close eye on forex movements, as stability is important and sudden unilateral movements are not desirable. The difference in interest rates between the U.S. and Japan is not the only factor affecting forex movements, there are various factors behind rate changes, Suzuzki added in quotes published by Bloomberg news agency. Last month's intervention had some impact on speculators, the Japanese finance minister pointed out. Japan spent $19.7 billion on the September currency intervention, Bloomberg reported. Source: Conotoxia MT5, USDJPY, H4 Japan's fight over the yen exchange rate and bond yields A cycle of interest rate hikes is underway in developed economies around the world, but not in Japan. The Japanese want to keep interest rates close to zero at all costs, and still want to control their bond yield curve. Investors, on the other hand, probably want to necessarily get rid of as many Japanese bonds as possible, as long as their prices are jacked up by the central bank. As a result, Japanese government bonds rose today after the central bank increased its planned fourth-quarter debt buying. The Bank of Japan announced Friday it would increase its purchases of bonds with maturities above five years in the fourth quarter 2022, Bloomberg reported. USD/JPY technical analysis Source: Conotoxia MT5, USDJPY, D1   In light of possible currency interventions, i.e. factors typically outside the market, the importance of technical analysis may be less. Nevertheless, looking at the USD/JPY chart, we can see a significant expanding wedge formation, where the market seemed to turn around in the area of its upper limit, as well as a rising wedge formation. In addition, the RSI relative strength indicator has retreated from overbought levels, but may be close to drawing a potential divergence. Short-term support may also come from the 20-session average, above which the market was in an earlier trend. Can changes be expected from the Bank of Japan's action? Many people wonder why the Bank of Japan  is not going to  change its monetary policy, as other central banks around the world have changed it, but  would try to buy time with currency interventions. However, there is no clear answer to this question, for believing the BOJ's announcements, this  seems l not changing  soon. According to National Australia Bank analysts, the December forecast for USD/JPY was raised to JPY145 from JPY133. "We are forced to abandon our earlier view that we will see changes in the way the BOJ's interest rate and yield curve control (YCC) policies work this year," - NAB analysts quoted by Bloomberg wrote. BOJ Governor Kuroda has made it clear that the policy stance of unchanged or lower interest rates will be maintained, probably for another two to three years. Did you know that CFDs allow you to trade on both falling and rising prices? Derivatives allow you to open buy and sell positions and thus trade on rising as well as falling quotes. At Conotoxia, you can choose from CFDs on more than 100 currency pairs. For example, if you want to find a CFD on the USD/JPY, you only need to follow 4 simple steps: To access Trading Universe - a state-of-the-art hub of financial, information, investment and social products and services with a single Smart Account, register here. Click "Platforms" in the "Invest&Forex" section. Choose one of the accounts: demo or live On the MT5 or cTrader platform, search for the CFD currency pair you are looking for and drag it into the chart window. Use one-click trading or open a new order with the right mouse button.   Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. Read more on Conotoxia.com
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

AUD/USD: Australian Dollar (AUD) May Be Considered As Not That "Attractive" In Times Of Aggresive Fed And The War

Kenny Fisher Kenny Fisher 03.10.2022 16:21
AUD/USD has started the trading week with strong gains. The Aussie is trading at 0.6447, up 0.67%. Is the nasty slide over? The Australian dollar is coming off a third straight losing week. September was a disaster, as AUD/USD plummeted 6.4%. The escalation in the war in Ukraine, which has sapped risk sentiment, and the aggressive Federal Reserve have dampened market appetite for the risk-related Australian dollar. RBA likely to hike by 50bp The RBA meets on Tuesday, and Bank members are widely expected to deliver a fifth consecutive hike of 50 basis points, which would take the benchmark rate to 2.85%. After that, the RBA may lower gears to 25bp moves. Governor Lowe has signaled that he would like to shift to 25bp hikes at some point, which would help guide the economy to a soft landing and avoid choking off economic growth. However, there is no indication that inflation has peaked, and soaring inflation was the primary reason for the RBA’s sharp rate-hike cycle. The next inflation report will be released in late October, with the RBA November meeting just one week later. It’s a safe bet that the size of the rate hike in November will depend to a large extent on that inflation report. Read next: British Pound (GBP): Would The UK Tax Cut Prospect Be Abandoned? | Crude Oil Up| FXMAG.COM In the US, the Fed may make a U-turn in policy before the end of the year, depending on the strength of the economy. The data can be conflicting, which was the case on Friday. The Fed’s preferred inflation indicator, the Core PCE Index, rose 4.9% in August, up from 4.7% in July and above the consensus of 4.7%. At the same time, the University of Michigan sentiment index showed that inflation expectations for 5-10 years ticked lower to 2.8%, down from 2.7%. In the meantime, the Fed’s hawkish stance has fuelled the US dollar’s upswing. AUD/USD Technical AUD/USD has support at 0.6450 and 0.6363 There is resistance at 0.6598 and 0.6685 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. AUD/USD rebounds ahead of RBA - MarketPulseMarketPulse
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

British Pound (GBP): Would The UK Tax Cut Prospect Be Abandoned? | Crude Oil Up

Walid Koudmani Walid Koudmani 03.10.2022 16:03
In this article: British Pound and the UK Crude Oil Sterling rebounds after change in government tax plans GBP is one of top performing G10 currencies after the BBC reported that the Truss government may drop the idea of tax cut for high earners as a result of party insider backlash. Tory MPs rebelled against UK Prime Minister Truss, threatening they wouldn't vote on a planned cut to 45% tax rate until sources of financing are presented in the next budget (November 23, 2022). However, the report from the BBC hints that the whole idea of a tax cut for high earners may be dropped. The u turn had been inevitable given the market reaction but there's every likelihood this will buy the UK government time politically but not necessarily from investors. The 45p tax cut has taken around £2billion off extra borrowing. That's it. The UK government is facing extra borrowing of closer to £150bn and at higher interest rates than in the past decade. GBPUSD pair is trading at a 2-week high and above levels from the 'mini-budget' announcement that triggered a slump in GBP and UK bonds. Until investors get clarity in the scale of borrowing needed and costs, which means a detailed OBR forecast, the pound Sterling volatility will likely continue.  Oil starts the week higher as traders await OPEC production cut Oil started the week positively by posting noticeable gains today with both Brent and WTI trading around 4% higher after several weeks of uncertainty and volatility. The upward move was probably triggered by media reports suggesting that OPEC+ may decide to implement a significant output cut during the meeting this week (October 5, 2022). Many in the media believe the cut would involve a 1 million barrel reduction in daily production with some even suggesting that a 1.5 million barrel cut may be on the table. OIL.WTI broke through a downward trendline and climbed back above the $81.00-81.60 resistance area despite being in a downward trend for over a month. After a successful retest of the zone, a strong upward impulse was launched this morning with the price reaching $83 per barrel for the first time in more than a week. While the situation remains volatile, traders will be anxiously awaiting this week's OPEC+ decision as a surprise in the decision could cause a significant move on the oil market while if the group decides to act in line with expectations we could be seeing a continuation of the recovery.
At The Close On The New York Stock Exchange Indices Closed Mixed

Oh Wow! S&P 500 Went Up By 2.59%, Nasdaq Increased By 2.27%

ING Economics ING Economics 04.10.2022 07:21
Asian markets should see a stronger day on Tuesday after US and European markets rally Source: shutterstock Macro outlook Global markets: Once again, the UK seems to be driving financial markets – this time in a positive way as the Truss government abandoned its top rate tax cut pledge under pressure from, well, about everyone. US stocks started the quarter with a decent rally. That amounted to 2.59% for the S&P500 and 2.27% for the NASDAQ. Stocks were up across Europe and equity futures are looking pretty positive today, which should also be better news for Asian FX. EURUSD made further gains, rising to 0.9835, while Cable climbed back above 1.13 and the AUD has rallied back above 65 cents ahead of today’s predicted 50bp of Reserve Bank of Australia (RBA) tightening (1130 SGT/HKT). This sentiment improvement has also helped the JPY, which has pulled back once more from the 145 level. Yesterday saw a slight reversal of Friday’s gains in some Asian currencies, with the THB, INR, PHP and IDR losing ground. They will most likely make at least some of that back today. There were very large falls in bond yields across the developed markets yesterday including UK Gilts, where the yield on 2Y notes fell 23.1bp and fell 13.8bp for 10Y bonds. There were some even bigger falls for European bond yields, Italy in particular, which saw the 10Y yield drop by 27.2bp. US treasuries weren’t absent from this move. 2Y US Treasury yields fell 16.5bp while 10Y yields dropped 19bp to leave them at 3.639%.   G-7 Macro: A softer than expected September Manufacturing ISM index was yesterday’s main macro snippet, though the prices paid index continued to ease slightly lower, and the employment index dropped below 50, as did new orders – finally some more concrete sign -  other than the housing market -  that the US slowdown is taking hold? There isn’t much to get excited about on today’s G-7 Calendar. Australia: Despite the RBA trying to manoeuvre itself towards being able to deliver smaller rate hikes, this meeting is widely anticipated to deliver a further 50bp of tightening, taking the cash rate target to 2.85%. This follows stronger than expected labour market and retail sales data, neither of which suggested any slowdown in the economy. We are also looking for a 50bp hike today but would anticipate the RBA being able to downshift to 25bp moves over the rest of the year. What to look out for: RBA decision Japan Tokyo CPI inflation (4 October) Australia RBA meeting (4 October) US factory orders and durable goods orders (4 October) Fed officials Williams, Logan Mester and Daly speaking events (4 October) South Korea CPI inflation (5 October) Japan Jibun PMI services (5 October) Singapore PMI manufacturing (5 October) New Zealand RBNZ meeting (5 October) Philippines CPI inflation (5 October) Thailand CPI inflation (5 October) Singapore retail sales (5 October) US ADP employment, trade balance and ISM services (5 October) Fed’s Bostic speaking event (5 October) Australia trade balance (6 October) Philippines unemployment rate (6 October) Taiwan CPI inflation (6 October) US initial jobless claims (6 October) Fed’s Evans, Cook, Mester speaking events (6 October) South Korea BoP current account (7 October) Regional GIR data (7 October) US non-farm payrolls (7 October) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Latest Policy Rate Decision Of National Bank of Romania (NBR) Ahead

Forex - EUR/RON: Romanian National Bank (NBR) Is Expected To Hike The Rate By 50bp

ING Economics ING Economics 04.10.2022 07:54
The Romanian National Bank (NBR) will announce its latest policy rate decision on 5 October. We expect a reduction of the tightening pace to 50 basis points, taking the key rate to 6.00%. One last 25bp hike in November should terminate the hiking cycle. As usual lately, there are upside risks The Romanian National Bank will announce its latest policy rate decision this week Focus points Inflation: While the latest inflation developments have been rather on the upside of our central scenario, we maintain the view that we witnessed the peak headline in August at 15.3%. That said, chances for the September print to come slightly higher are not ignorable, with our current 15.2% estimate being heavily exposed to the usual forecast errors we’ve been seeing for a while now. Starting October however, stronger base effects will kick-in and the headline inflation should come lower by at least 1pp. All considered, our year-end forecast of 13.6% in 2022 is looking marginally optimistic given the persistently high energy prices, though we are not changing it at the moment. For end-2023 we maintain our 7.0% forecast, but the perspective of inflation hitting the NBR’s target band (1.5-3.5%) by the end of the two-year forecast horizon looks more distant now. Growth: On the macro front, as the eurozone economy is slowing down rapidly (probably already experiencing a recession) and most forecasts for 2023 already point to various degrees of GDP contraction (-0.8% ING’s house view) we believe that Romania’s capacity to fend-off the contractionary impact of these external developments is limited. The available high frequency data is so far limited to early 3Q22 and points to a contraction in industrial production and construction, while retail sales maintained a positive momentum. All considered, our already below-market GDP estimate for 2023 of 3.0% started to look overly optimistic and we are revising it to 1.8%. At the same time, we marginally revise the 2022 GDP growth estimate from 7.0% to 6.6% as a mild contraction in the third and/or fourth quarter cannot be excluded anymore. This assumes that no significant statistical data revisions will occur which, given the abnormally high growth from the first half of 2022, is not such a light assumption to make. Overall, growth concerns – and by extension the rapidly closing output gap – will likely resurface in the NBR’s policymakers discussions and it should point towards the dovish side of the NBR’s approach. What to expect in rates and FX markets On the bond market, during September, the Romania government bond (ROMGBs) curve moved up about 70bp, resulting in a bear-steepening. The global sell-off has led the curve to its steepest shape since the second half of August, supported by issuance particularly at the belly and long end of the curve. The 10y yield has reached the 8.50% mark for the first time since July. However, we believe the global sell-off is still not over and the yield still has room to move closer to the 9.00% level. This view is also supported by CEE peers’ comparisons, which make ROMGBs look expensive at the moment. During September, the premium over Polish government bonds has fallen 60bp from local highs. On the other hand, we believe Romania is well positioned in relative terms within CEE for the coming winter and the slowdown in the global economy. Moreover, against its direct competitor Hungary, Romania has the advantage of the absence of EU money issues and benefit from stable FX. In the event of an end to the global sell-off and favourable European economic numbers, we believe ROMGBs are well positioned against peers. On the FX side, the Romanian leu has moved back to 4.95 EUR/RON after a brief excursion to stronger levels and the NBR seems to have the situation fully under control, for now. We do not expect any changes in the short term, however, the global selling pressure on the CEE region is also affecting the RON market. Looking at the Hungarian forint and Polish zloty, we can assume that the NBR's FX defence costs have increased significantly over the last two weeks, indicating that stability cannot last forever. For now, we expect a shift higher in our forecast for the intervention level early next year. However, the winter months could bring increased pressure on FX and push the NBR to ease the plunger a little earlier. Liquidity position and the 3-month rate Source: NBR, ING calculations What we make of it? With the above in mind, we re-affirm our expectations for a sequential approach by the NBR. This implies that the pace of policy tightening will slow down from 75bp in August to 50bp in October and 25bp in November, taking the key rate to 6.25%. As usual for local rates, the level of the policy rate itself is not always the most relevant, as it corroborates with the strained liquidity conditions in the money market – which will likely be maintained. As mentioned before, we believe that the policy rates vs. market rates imbalance could persist, and it is not imperative for the key rate to catch up with money market rates. In the bigger scheme of things, while it might send a cautious dovish signal, we believe that the NBR will not pre-commit to any policy course and that it will leave all policy options on the table. Under current circumstances, this will most likely mean that more aggressive tightening (going into 2023 as well) cannot be excluded. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Run Higher In Japanese Yields Is Likely To Create Further Volatility In Global Markets

Reverse The U.S. Dollar To Japanese Yen (USD/JPY) Pair In A Downward Direction

InstaForex Analysis InstaForex Analysis 04.10.2022 08:02
The USD/JPY pair stayed under the resistance of the nearest price channel line (145.15) for another day. Investors are afraid to buy the dollar, remembering the central bank's intervention on September 22. But short-term growth is still possible, the 147.35 target can be reached, as a result of which a divergence will form with the Marlin Oscillator, and the currency pair will turn into a medium-term decline. The price is moving sideways on the H4 chart, being between the MACD line and the linear resistance of one of the price channel lines (145.15). The Marlin Oscillator in the neutral position is moving along the zero line. Getting the price to settle above 145.15 will give it the first push towards 147.35, consolidating below the MACD line (144.08) will look like an attempt to reverse the pair in a downward direction from the current levels.   Relevance up to 04:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323298
Long-Term Rates Diverge Amid Policy Divergence and Economic Signals

Yesterday The British Pound (GBP) Showed Strong Growth, Can We Expect That Also Today?

InstaForex Analysis InstaForex Analysis 04.10.2022 08:19
The British pound showed a strong growth yesterday, winning back a new local wave of risk appetite, following the growth of stock indices, raw materials, and a halt in the growth of yields on British government bonds. The price went above the target level of 1.1305, the Marlin Oscillator moved into the area of positive values - into the area of the growing trend. The way to the next target - 1.1480 - to the MACD indicator line on a daily scale has opened. A reversal may occur after the price returns to the level of 1.1170. On a four-hour timescale, the signal line of the Marlin Oscillator is consolidating above the zero line, creating tension for a breakout of the oscillator to the upside. The price settled above the level of 1.1305. After reaching the 1.1480 target, the price is likely to turn either into a new correction or into a new wave of medium-term decline.   Relevance up to 04:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323300
FX Daily: Testing the easing pushback

The Euro-Dollar (EUR/USD) Has Pair A Potential For Further Growth?

InstaForex Analysis InstaForex Analysis 04.10.2022 08:32
The euro spent the entirety of Monday, like Friday, between the target levels of 0.9752-0.9850. So far, our forecast about the short-term development of sideways movement is justified, but if this sideways movement drags on, then most likely the growth will continue and the level of 0.9950 will be overcome. In the current situation, we are waiting for the price to fall below 0.9752 and the price to return to the downward trend. The daily Marlin Oscillator is turning down, pushing the price towards this scenario. On the four-hour chart, the price also found support on the MACD indicator line yesterday, at the point of its intersection with the target level, the quote rebounded upwards. This is a signal for further growth. This signal will be confirmed by consolidating above 0.9850. The 0.9950 target will become available, although it may not be reached (the resistance of the MACD line of the daily scale will interfere).   Relevance up to 04:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323302
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

Will The Scenario Of The EUR/USD Pair For A New Impulsive Growth Prove True?

InstaForex Analysis InstaForex Analysis 04.10.2022 08:34
EUR/USD still needs to break clearly above minor resistance at 0.9851 to add confidence in our preferred scenario that a long-term corrective bottom is in place at 0.9536. A break above minor resistance at 0,9851 and more importantly a break above resistance at 1.0051 will confirm the low being in place and that a new impulsive rally in wave 3 or C is unfolding. Ultimately, this impulsive rally will break above the peak of wave 1 or A at 1.6038. However, for now, let's take the rally from 0.9536 in baby steps and look for a break above minor resistance at 0.9851 as the first good indication that the corrective decline from 1.6038 has been completed.   Relevance up to 06:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295288
The EUR/USD Pair Maintains The Bullish Sentiment

The Trend Of EUR/USD Pair Began To Change To An Upward One

InstaForex Analysis InstaForex Analysis 04.10.2022 08:46
EUR/USD 5M The EUR/USD pair again tried to continue moving up on Monday, although it also managed to show a round of downward movement. Nevertheless, if we consider the last three trading days, it turns out that the pair fell into a horizontal channel. At least, it failed to overcome the level of 0.9844 from several attempts, and there are not so many of these attempts so far to talk about overcoming this level in any case sooner or later. It should be noted that despite the flat, the pair traded surprisingly logically, as a weak EU manufacturing business activity index came out in the morning, and a weak US manufacturing business activity index came out in the afternoon. Accordingly, first the euro fell, then the dollar. Of course, we did not expect that far from the most significant reports would be worked out, but the market was blatantly surprised on Monday. It should also be noted that the price did not clearly settle above the Senkou Span B line. There was no consolidation above the critical line on the 24-hour timeframe. Therefore, unlike the pound, we believe that the euro may resume its decline. In regards to Monday's trading signals, the situation was sad. There were already signs of a flat at the European trading session, and the price formed four signals near the area of 0.9804-0.9813. Naturally, most of these signals turned out to be false. Therefore, traders could try to work out the first two signals, but most likely received a loss on both transactions. It's okay, bad days are also an integral part of the trading process. All subsequent signals in the same area should not have been worked out. COT report: The Commitment of Traders (COT) reports on the euro in 2022 can be entered in the textbook. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then they showed a bearish mood for several months, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have said, because the demand for the US dollar remains high. Therefore, even if the demand for the euro is growing, the high demand for the dollar does not allow the euro itself to rise. During the reporting week, the number of long positions for the non-commercial group increased by 2,000, while the number of shorts decreased by 1,800. Accordingly, the net position grew by about 200 contracts. This is very small and this fact does not matter much, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 34,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 4. It is still very difficult to wait for a strong growth from the euro. Overview of the GBP/USD pair. October 4. The political absurdity in the UK persists. Forecast and trading signals for GBP/USD on October 4. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H On the hourly timeframe, the trend began to change to an upward one, but the most important and significant levels and lines have not yet been overcome. We believe that until the Senkou Span B line is confidently overcome on the current TF and the Kijun-sen line on the 24-hour TF, it is not necessary to talk about a more powerful growth of the euro currency. The euro, of course, has taken a significant step towards the end of the downtrend, but we recall that so far the upward movement is only a little more than 300 points. On Tuesday, we highlight the following levels for trading - 0.9553, 0.9844, 0.9945, 1.0019, as well as the Senkou Span B (0.9804) and Kijun-sen (0.9695) lines. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also auxiliary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "overcoming" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect against possible losses if the signal turns out to be false. On October 4, ECB President Christine Lagarde will speak in the European Union, whose rhetoric is unlikely to change from three speeches last week. Therefore, we do not expect a strong market reaction. There are no major events or publications scheduled in the US today. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323290
The Data May Keep The British Pound (GBP) From Rising

The Pound To US Dollar (GBP/USD) Pair Continued Its Upward Movement

InstaForex Analysis InstaForex Analysis 04.10.2022 08:51
GBP/USD 5M The GBP/USD currency pair continued its upward movement on Monday, although there were no objective reasons for this. During the past day, only two relatively important reports were published. Manufacturing PMI in the US and similar in the UK. The British index rose unexpectedly, but remained below the 50.0 level, so we are surprised that traders positively reacted to this report. The US ISM business activity index turned out to be weaker than forecasts, but remained above 50.0, so we are also surprised by such a strong fall in the dollar in the afternoon. As a result, we come to the conclusion that at this time the market is set to buy the British currency, which, coupled with the strong growth last week, still indicates a very high probability of the end of the downward trend. Moreover, on the 24-hour timeframe the Kijun-sen line has been overcome and now the pair can move with the target of the Senkou Span B line, which lies at the level of 1.1836. Also, the pound has overcome all the lines of the Ichimoku indicator and the downward trend line on the hourly timeframe. Such a movement is what we talked about when we spoke of the signs of the beginning of a new trend. Unfortunately, yesterday there was also a problem with trading signals for the pound. Most of the daytime, the pair was in an open flat, so the signals were mostly false. Traders also failed to work out the morning spurt upwards, as few people expected an increase of 185 points amid one business activity index, which also turned out to be below the level of 50.0. However, the pound volatility remains very high, and one can expect both high losses and high profits on transactions. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group opened 18,500 long positions and 10,100 short positions. Thus, the net position of non-commercial traders increased by another 8,400, which is quite a lot for the pound. We could assume that the actions of the big players and the pound's movement have finally begun to coincide, only the report is released with a three-day delay and simply does not include the last three days of trading, when the pound showed growth. The net position indicator has been actively falling again in recent weeks, and the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Now it has begun a new growth, so the British pound can formally count on growth. But, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 106,000 shorts and 59,000 longs open. The difference, as we can see, is still large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 4. It is still very difficult to wait for a strong growth from the euro. Overview of the GBP/USD pair. October 4. The political absurdity in the UK persists. Forecast and trading signals for EUR/USD on October 4. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair, as we see it now, has broken the downward trend on the hourly timeframe, as all key levels and lines have been overcome. Important lines and levels are also slowly being overcome on the higher TFs, so the pound is getting closer and closer every day to completing a disastrous period for itself. So far, the fundamental and geopolitical backgrounds do not imply a new fall for the pound. We highlight the following important levels for October 4: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442. Senkou Span B (1.0905) and Kijun-sen (1.0932) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. There are no important events planned for Tuesday in the UK and the US, so traders will have nothing to react to during the day. However, the pair moves 200-300 points every day, so it clearly doesn't need the help of news and reports to move very volatilely. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323292
The South America Are Looking For Alternatives To The US Currency

Forex: Friday's NFP Release May Support US Dollar (USD). EUR/USD May Reach 0.95

ING Economics ING Economics 04.10.2022 09:07
DXY has dropped nearly 3.0% since last week's highs, as global risk sentiment recovered and ISM manufacturing numbers disappointed. Still, the medium-term story remains USD-positive in our view, also due to the grim outlook for Europe. The fiscal U-turn in the UK may not offer sustained support to the pound, while the RBA may keep hiking by 25bp from now on USD: Correction not very sustainable The dollar has remained in correction mode at the start of this week, with DXY now trading nearly 3.0% off its 28 September peak. In our view, this has not been accompanied by a radical change in the medium-term narrative that has backed the dollar rally so far: despite somewhat weaker-than-expected ISM manufacturing figures yesterday, the US domestic story remains rather solid, leaving the Fed tightening prospects alive even if markets have recently revised the expected terminal rate to sub 4.50% levels. We see Friday’s payrolls report as a potential trigger for a fresh hawkish re-pricing, and a positive event for the dollar. Indeed, the fiscal developments in the UK (more in the GBP section below) appear to be having a rather widespread impact on global risk sentiment and have likely favoured a rebound in risk assets and bonds. There is still, however, a long way to go for European assets to regain the market’s favour given the energy crisis and concerning geopolitical developments, so we continue to see any dollar contraction driven by a recovery in European sentiment as likely short-lived. It is likely that after the ISM manufacturing miss, markets will increase scrutiny on incoming US data to gauge any downward trend in the economic outlook. Today’s data is quite outdated (factory orders and JOLTS job openings for August), which could favour a slightly calmer market environment, but a lot of focus will be on tomorrow’s ISM services index and ADP employment figures. We also have a rather long list of Fed speakers today. We think the DXY downtrend will soon run out of steam, and some stronger support may already emerge at the 111.00 level. We struggle to see the macroeconomic justification for an extension of the drop below 110.00 at the moment.     Francesco Pesole EUR: No idiosyncratic support EUR/USD has largely benefitted from the improvement in global risk sentiment, the dollar correction and some positive spillovers from the fiscal U-turn in the UK, but the euro has still failed to show any substantial idiosyncratic bullish push. This is hardly surprising given the still very challenging outlook for the eurozone and elevated uncertainty about the energy crisis heading into the cold months. Today’s data calendar is quite light in the eurozone, with only the acceleration in August PPI inflation to keep an eye on. More focus should instead be on European Central Bank speakers as President Christine Lagarde will deliver some remarks this afternoon, following speeches by both Pablo de Cos and Mario Centeno. In our view, the EUR/USD recovery is looking quite fragile, which means that any slight dollar recovery could trigger a wider correction in the pair. We still see a high risk of a return to 0.9500 over the coming weeks. Francesco Pesole GBP: Downside risks remain elevated Cable has climbed back to the levels it was trading at before the mini-Budget announcement, but we struggle to see the current rally as sustainable. Firstly, our economics team does not see the fiscal U-turn as a game changer in terms of the country’s finances, and the damage done by delivering ideological – and hardly justifiable economically – tax cuts in the first place is hard to repair. Secondly, there is still an elevated risk that the UK will face a rating downgrade. There is undoubtedly an ongoing effort by the government to calm markets, and it’s been reported this morning that Chancellor Kwasi Kwarteng is expected to bring forward his medium-term fiscal plan announcement, which was initially due on 23 November. However, the exact date hasn’t been revealed just yet. We think, however, the pound continues to face very significant downside risks as the large twin deficit, low market confidence in the new government and a grim outlook for Europe heading into winter all point to the unsustainability of 1.10+ levels in GBP/USD. Francesco Pesole AUD: RBA turns more cautious The Reserve Bank of Australia hiked by 25bp this morning, surprising markets on the dovish side (expectations were for a half-point move). We don’t see this as particularly surprising, as the RBA meets more than other developed central banks (once a month), which allows greater flexibility based on incoming data and global economic/financial conditions. Indeed, the Bank highlighted how uncertainty over the economic outlook has increased and appeared somewhat concerned (not alarmed) about how Australian households will respond to tighter financial conditions, although the assessment of the domestic outlook has remained rather upbeat. Fears of a sharp housing market downturn are certainly on the rise. We get two key data releases before the next RBA meeting on 1 November: employment figures for September and even more importantly the 3Q inflation report. Large surprises on the upside on both releases may open the way for a 50bp hike in November, but 25bp increases seem more likely from now on. The AUD/USD negative reaction after the RBA announcement was quite short-lived, in line with the recent detachment of monetary policy and FX dynamics. The pair remains quite vulnerable at current levels given the risks of a USD restrengthening and challenging global risk outlook.   Francesco Pesole Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

The Weakening Of Confidence In The British Government| Oil Prices Extended Gains And More

Saxo Bank Saxo Bank 04.10.2022 09:09
Summary:  After a series of positive surprises on US economic data last week, the disappointment from the ISM manufacturing was a big deal for the markets. US Treasury yields slumped, with rising expectations of an earlier Fed pivot which we think may be premature. But that helped equity markets close higher, more a signal of positioning rather than expectations. UK’s tax cut U-turn instilled a fresh bid in sterling, but further impeded confidence in the government. Oil prices extended gains and Gold also reclaimed the $1700-mark. On watch today will be how the Reserve Bank of Australia transitions to a slower rate hike pace. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rally over 2% US stocks rallied for the first day of the quarter with the Nasdaq100 up almost 2.4%, and the S&P500 up about 2.6%, which is the best gain since July 27. It comes as the 10-year US Treasury yield rolled over to trade at around 3.65% (after topping 4% at one-point last week). The risk-on mood was fueled by several things; firstly, the UK government did a U-turn and will reverse plans to scrap the top rate of income tax. Secondly, the United Nations called on the Fed and other central banks to halt interest rates hikes. And thirdly, what also boosted sentiment was that two Fed speakers at the weekend, Brainard and Daly were reportedly discussing the downside of hiking too fast. And fourthly, weaker than expected US economic news came out with; US manufacturing falling for the third time in four months. As for the S&P500, the technical indicators; the MACD and the RSI also remain in oversold territory, which supports the notion that some investors believe a short-term rebound may be seen perhaps amid the risk-on mood. However, caution still remains in the air ahead of further Fed's hikes. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) The US Treasury yields retreated on Monday as a subdued ISM manufacturing print led to calls of slower Fed tightening and an earlier Fed pivot, which had already been building last week as well due to the risk of wider market disruptions as things have started to break. The reversal of the UK tax cut also supported Gilts, and some pass-through was seen to the US Treasuries. 2-year yields declined over 16bps to 4.11%, while the 10-year was down 19bps to 3.63%. Australia’s ASX200 (ASXSP200.1) poised to raise 1.5% with a focus on oil stocks Commodities will be focus on the ASX today with Oil and LNG stocks like Woodside (WDS), Santos (STO) set to see some action after the oil and gas prices jumped 5%. Other stocks to watch include Worley (WOR) who services the energy sector. Iron ore companies will be watched as well, supported higher by the iron ore price jumping 1.8% to US$94.50. So it’s worth watching if BHP, RIO and CIA can extend their short-term uptrend. AUDUSD rallies back to 0.6516 ahead of RBA’s expected 0.5% hike Australia’s RBA is likely to make another jumbo rate hike and take rates up by 50 bps (0.5%) to 2.85% on Tuesday (which is what consensus thinking is). And then after that, the RBA is likely to move in smaller increments, according to interest rate futures and what RBA Governor Phillip Lowe signaled he wants. With the majority of Australian mortgages at floating-rates, and wage growth being stronger, the RBA’s thinking is that most Aussies will be able to sustain the higher rates as a lot of Australian made extra mortgage repayments amid the lockdowns, as pulled back on discretionary spending. However there are about 2.5 million Aussies who have no buffer. And 9.8 million Aussies have mortgages. So we still think a property pull back might be on the cards. It’s the magnitude of the pull back that is being questioned. The technical indicator, the MACD suggests the AUDUSD could rally if the RBA proceeds with a likely 0.5% hike. However over the long term, our house view remains bearish on the AUDUSD until Fed hikes cool, and commodity demand picks up from China. GBPUSD made a strong recovery, will it last? Cable was seen advancing above the 1.13 handle in early Asian hours on Tuesday as it extended Monday’s gains following announcement of plans to scarp the tax cut by the UK government. A softer dollar also supported pound’s gains, amid a slide in US Treasury yields. However, more Fed tightening is still in the cards and the lack of trust in the new UK government cannot be ignored even if the tax policy has been reversed for now. Focus on the BOE meeting on November 3 where 115bps rate hike is priced in, lower than last week’s pricing of 150bps. However, a full-budget statement will be released before that and further austerity measures, if included, can bring fresh downside for the sterling. EURGBP slid below 0.8700. Crude oil (CLX2 & LCOX2) extends gains on OPEC+ chatter Crude oil trades higher ahead of Wednesday’s OPEC+ meeting in Vienna as the alliance is considering a production cut of more than 1 million barrels/day to support prices following a 25% slump during Q3 2022. That would be the biggest cut since the pandemic with OPEC+ slashed production by 10 million barrels/day as demand collapsed. WTI futures rose above $83/barrel while Brent was close to $90. With several OPEC+ producers, including Russia, producing below target, and only Saudi Arabia may be able to limit production without a loss in additional market share. Meanwhile, expectations of an earlier Fed pivot also stabilized demand weakness expectations. Gold (XAUUSD) reclaims 1700 on lower US yields Gold extended recent gains as yields on Treasuries continued to decline. After the 10-year yields were seen topping the 4% level at one point last week, they are now off about 40bps to end at 3.63% yesterday. Meanwhile, a softer dollar and rising geopolitical tensions have also brought back investor demand for the yellow metal. A weaker ISM manufacturing print yesterday (read below) has also increased calls for an earlier Fed pivot, which we think may be premature. But the increasing calls for a recession have meant gains for Gold which was last seen back at $1,700/oz.   What to consider? US ISM manufacturing disappoints The headline for September’s US ISM manufacturing came in weaker than expectations at 50.9 from the prior month’s 52.8 and expected 52.2. Both employment and new orders both dropped into contractionary territory printing 48.7 (exp. 53.0, prev. 54.2) and 47.1 (prev. 41.3), respectively. The report showed that higher interest rates are starting to weigh on business investment sentiment, at least in the interest rate sensitive sectors. Still, the inflationary gauge of prices paid declined to 51.7 (exp. 51.9, prev. 52.5) falling for the sixth straight month. Supplier delivery times suggested some easing on the supply chains, but overall the report indicated the case of a slowdown in the US economy as rapid Fed tightening continues. UK scraps plans to cut taxes The UK government confirmed reports it will not go ahead with the abolition of the 45p rate of income tax but they are committed to borrowing extra over the winter to help with the ongoing energy crisis. The Chancellor told BBC the proposal was "drowning out a strong package", which includes support for energy bills, cuts to the basic rate of income tax, and the scrapped increase in corporation tax. However, he saw the abolition of 45p tax rate as a distraction from the overriding mission, and thus decided to remove it. This puts water on the Bank of England’s bond-buying, and exposes further the cracks in UK policymaking, thus suggesting that the UK assets are not out of the woods. A full-budget, which has now been brought forward to before the next BOE meeting on November 3, could include more tax cuts. Fed pushes back on an earlier pivot Fed’s NY President John Williams repeated inflation is too high and the Fed's job is not done, also saying that the monetary policy is still not in restrictive zone, pushing back on some calls for an earlier Fed pivot. He acknowledged signs of a slowdown in the housing sector or the consumer and business investment spending, but nothing that could deter the Fed from fighting inflation. On forecasts, he sees inflation likely down to 3% by next year (median view for Core PCE 3.1%), and the US is likely to see unemployment rise to 4.5% by end of 2023 (median view 4.4%). Thomas Barkin (2024 voter) made the case for more inflation in the post-pandemic world, noting that the Fed must consider global developments, but the focus is on the US. Japan’s Tokyo inflation accelerates further Japan’s September Tokyo CPI came in at 2.8% YoY, a notch softer than last month’s 2.9% YoY and in-line with expectations, but the core-core (ex-fresh food and energy) print accelerated to 1.7% YoY from 1.4% YoY, also coming in ahead of expectations at 1.4% YoY. Higher global food and energy prices along with a record weak yen has brought import price pressures on Japan’s economy, and this print hints at further gains in CPI on the horizon. While the pressure on the Bank of Japan to hike rates may have eased for now as US yields are easing, but there is still more Fed tightening in the pipeline and fresh pressures cannot be ignored. Reserve Bank of Australia may step away from moving to a slower rate hike pace The Reserve Bank of Australia is scheduled to announce its next rate decision on Tuesday, October 4. Governor Lowe had previously signalled that the pace of rate hikes is likely to slow from here after four consecutive rate hikes of the magnitude of 50bps. However, money markets and Bloomberg consensus forecast is still calling for another 50bps rate hike at the October meeting suggesting that RBA may delay taking the foot off the pedal just yet. The recent slide in the Australian dollar and worries over a turmoil in global financial markets may prompt the policymakers to front-load more of the rate hikes while the economy is still holding up. Retail sales data last week was upbeat while the first monthly inflation data reading at 6.8% is only slightly off the 7% levels seen in the preceding month. So, even as a monthly meeting can ensure a steady pace of rate hikes even with a smaller 25bps rate move, policymakers would possibly prefer to make a larger move this week to provide some support to the AUD. Likewise, the Reserve Bank of New Zealand is also expected to hike rates by another 50bps at their October 6 meeting.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-4-oct-04102022
For What It Is Worthy To Pay Attention Next Week 23.01-29.01

Forecasts For Q4: The Power And Gas Crisis Will Reach Its Peak

Saxo Bank Saxo Bank 04.10.2022 09:16
Summary:  The macropolitical and economic landscape has sent freezing weather in over the financial markets. How will you navigate the cold winter? An Executive Summary  Our outlook for Q4 2022 simply recognises the reality that winter is coming, in both the literal and figurative senses. First is the literal sense as Europe and the UK in particular brace for the impact of a winter season that will likely bring with it an economic winter. The power and gas crisis will reach peak impact due to the increased demand during winter heating season, even if prices have fallen considerably. Our macro strategist Christopher Dembik focuses on how Europe can absorb the tremendous headwinds of the energy crisis without turning the lights out entirely, with observers excessively pessimistic on the European outlook. This will include reducing demand through more efficiency, longer-term investments in nuclear, and better buildout of the necessary infrastructure for the green transformation.  In China, our market strategist Redmond Wong notes that the focus on renewables is far less intense. China has moved to secure coal supplies amidst the spike in oil and especially LNG prices in recent quarters, preferring to focus on more efficient use of its coal-fired baseload capacity and the most aggressive buildout of nuclear power of any major economy. For the rest of developed and emerging Asia, market strategist Charu Chanana notes that the soaring prices for LNG have altered the energy security for the region, to the detriment of weaker economies. The response will come in a variety of forms, from Japan’s renewed interest in nuclear despite the 2011 Fukushima disaster, to the intriguing prospect of energy increasingly trading in non-US dollar currencies, as already seen in India’s purchase of Russian crude with roubles. Our Australian market strategist Jessica Amir zeroes in on the factors driving a renaissance of interest in nuclear energy and looks at where to find the companies and ETFs in a rather difficult-to-navigate nuclear investment space.  Now on to the chief driver of asset valuations since the Fed’s dramatic pivot in November of last year: the trajectory of monetary policy. The coming quarter and first part of winter are likely to bring what Saxo CIO Steen Jakobsen dubs “peak tightness”. The market will finally manage to catch up to where the peak Fed rate is likely to rise by early next year, after getting it so wrong in hoping for a policy pivot toward decelerating tightening pressure in Q3. In turn, that policy tightness will lead to a recession, already on the way in Europe but spreading elsewhere next year, eventually even to the US, where the economy has proven far more resilient than the market expected.   In equities, the emphasis from the head of equity and quant strategy Peter Garnry is on how the coming winter will inevitably drive recession risks, as already seen with the pressure on consumer and discretionary stocks. He also explores how the extraordinary pressure on Europe can drive necessary innovation that should allow the continent to come out the other side with a far more competitive economy. Still, an overriding risk for growth and equity valuations is the cost of de-globalisation, which will reverse many of the trends in equities and the supply chains that companies have hyper-tuned over the last 12 years.  Head of commodity strategy Ole Hansen sees less drama for commodities relative to the intense volatility in the months since Russia invaded Ukraine, as ongoing supply concerns vie with shrinking demand concerns for supremacy. One interesting twist in Q4 will be how the crude oil market absorbs a halt of the Biden administration’s release of US strategic reserves if this proceeds according to plan in October.   In the FX outlook, John Hardy, the head of FX strategy, asks whether peak tightness in the anticipated trajectory of the Fed rate hike cycle will likely also bring peak US dollar, which has provided its own wintry pressure on global liquidity and asset prices for the last eleven months.  Elsewhere in FX, will the market force the Bank of Japan to capitulate on its yield-curve-control policy, possibly setting up the yen for spectacular volatility this coming quarter? It’s also worth noting that this is the third quarter running in the massive divergence of the JPY weakness relative to Chinese yuan (CNH and CNY) strength, the latter still in relative terms despite the yuan being allowed to slip considerably lower versus the strong USD in Q3; it’s an important and tense situation that remains unresolved.  In crypto, the market failed to revive in the quarter even with a much-anticipated Ethereum platform shift to proof-of-stake from proof-of-work. As our crypto strategists Mads Eberhardt and quant strategist Anders Nysteen suggest, the risk of a “crypto-winter” continues as global liquidity dries up on the headwind of policy tightening, not to mention the fear of stricter regulation of the space. Still, there are plenty of bright spots, with burgeoning innovation in the industry finding new applications for crypto-related blockchain technology.  Finally, this outlook also features the usual rundown of the longer-term technical outlook for critical assets, as we revisit the critical US 10-year treasury yield chart, the US S&P 500 index and where the ultimate depths of this bear market may lie, and the EURUSD exchange rate after the symbolic parity level was reached—and then some—on the downside in Q3.   We wish you a safe and prosperous Q4. Given the stark challenges that lie ahead for asset markets in a world beset with grinding supply side challenges, and as policymakers clamp down to fight inflation, it’s a difficult time. At the same time, it’s worth keeping in mind that opportunity and longer-term market returns rise as a function of deteriorating current asset prices.      Source: https://www.home.saxo/content/articles/quarterly-outlook/q4-2022-outlook-winter-is-coming-04102022
Investors Are Worried That Elon Musk Is Losing His Focus | The Eurozone Recession Can Dampen Investors’ Hopes

Tesla Investors Begin To Doubt Growth In 2023|The RBA Hiked Rates And More

Saxo Bank Saxo Bank 04.10.2022 09:33
Summary:  Risk sentiment got a strong boost yesterday from falling treasury yields, with Fed rate hike bets for early next year at their lowest in two years after a rising swell of questions from influential sources on whether the Fed is taking its tightening regime too quickly and a soft September US ISM Manufacturing data point. Overnight, Australia’s central bank, the RBA, surprised many with a hike of only 25 basis points.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities bounced back yesterday as the US 10-year yield fell to 3.64% with S&P 500 futures rallying 2.5% and extending another 1% this morning in trading around the 3,726 level; this is just a few points below the obvious short-term resistance level and a break above this level could push S&P 500 futures higher. The moves across markets likely reflect short covering and that the market was getting too stretched in the short-term and the bond market for now wants to sit idle and wait for more data on US inflation. USD and US yields/risk sentiment The US dollar weakened on the usual combination of falling treasury yields after soft US data yesterday and as the market took treasury yields, particularly at the long end of the curve, sharply lower yesterday. The move is still within the range in many key USD pairs, with 0.9900+ at minimum needed for a bear-market-neutralizing reversal in EURUSD. And AUDUSD dropped overnight on the Australia’s reserve bank only hiking 25 basis points (more below) Elsewhere, the strength in GBPUSD is far more sterling related (see more below on Chancellor Kwarteng’s reversal of the most controversial of his tax cuts) and USDJPY is curiously bid near the top of the range after Japan’s September core, ex Food and Energy Tokyo CPI came in at the highest level in years. The status of the US dollar this week will likely be clear only after the release of the September jobs report on Friday. Gold (XAUUSD) and especially silver (XAGUSD) jumped on Monday … with support coming from multiple sources. A softer dollar and US ten-year bond yields slumping to 3.6% after hitting 4% last week leading to some speculation that we may in fact have hit peak hawkishness, meaning the FOMC faced with recession worries and calls for action to curb the dollar may start easing the tone going forward. Whether or not will be data dependent, but in the short term, these developments and worries about what Putin may do next has been enough to trigger short covering across the investment metal sector, not least in gold where the net short held by money managers reached a near four-year high last Tuesday. Silver is looking at resistance at $20.88, the August high and trendline support in XAUXAG around 81.20 Crude oil (CLX2 & LCOX2) extends gains on OPEC+ chatter, weaker USD Crude oil trades higher ahead of Wednesday’s OPEC+ meeting in Vienna as the alliance is considering a production cut of more than 1 million barrels/day to support prices following a 25% slump during Q3 2022. That would be the biggest cut since the pandemic with OPEC+ slashed production by 10 million barrels/day as demand collapsed. WTI futures rose above $83/barrel while Brent was close to $90. With several OPEC+ producers, including Russia, producing below target, only Saudi Arabia may be able to limit production without a loss in additional market share. Meanwhile, expectations of an earlier Fed pivot also stabilized demand weakness expectations. US treasuries (TLT, IEF) US treasury yields fell all along the curve yesterday, as the market pushed Fed hike expectations for early next year toward the lowest in two weeks and yields at the longer end of the curve fell sharply on the release of a weak September US ISM Manufacturing data point. The fall in yields already has the important 3.50% yield level for the 10-year treasury benchmark coming into view after 3.56% traded yesterday. The next important data points include tomorrow’s September ISM Services survey and particularly the September jobs report on Friday. What is going on? Fed pushes back on an earlier pivot Fed’s NY President John Williams repeated inflation is too high, and the Fed's job is not done, also saying that the monetary policy is still not in restrictive zone, pushing back on some calls for an earlier Fed pivot. He acknowledged signs of a slowdown in the housing sector or the consumer and business investment spending, but nothing that could deter the Fed from fighting inflation. On forecasts, he sees inflation likely down to 3% by next year (median view for Core PCE 3.1%), and the US is likely to see unemployment rise to 4.5% by end of 2023 (median view 4.4%). Thomas Barkin (2024 voter) made the case for more inflation in the post-pandemic world, noting that the Fed must consider global developments, but the focus is on the US. RBA hiked less than expected, signaling peak hawkishness could be behind it The RBA hiked rates by just 25 basis points (0.25%) rather than the 50 bps (0.5%) many expected, which takes the cash rate to 2.6%. The RBA’s hiking power has been diminished as household spending is dropping, along with forward looking projections. We know it typically takes around nine months for central bank policy tightening to felt in the economy, and the RBA said that higher inflation and interest rates are putting pressure on households, with the full effects yet to be felt. The RBA said that although consumer confidence and house prices have fallen, the central bank is still focused on slowing inflation which it sees increasing ‘over the coming months ahead’. In addition, the RBA expects unemployment will continue to fall over the months ahead, before rising. This means, the RBA could slow the pace of hikes after December onwards. Tesla shares plunged in a strong US session With US equities rallying 2.5% yesterday high beta and growth stocks were expected to lead the gains, but our bubble stocks basket was up only 1.5% and Tesla shares fell 8.6%. The EV-maker reported Q3 deliveries of 343,830 vs estimates of 357,938 which Tesla said was due to logistical issues in its supply chain. However, the move yesterday in Tesla indicates that investors are beginning to doubt the growth in 2023 that is priced into the price as the lithium continues to be prohibitively expensive and the cost-of-living crisis is lowering demand. Sterling made a strong recovery, but can it last? Cable was seen advancing above the 1.13 handle in Asian hours on Tuesday as it extended Monday’s gains following announcement by Chancellor Kwarteng of the intent to scrap the most controversial – and least impactful on the budget – recently announced tax cut for the highest income earners. A softer dollar also supported sterling’s gains amid a slide in US Treasury yields. Elsewhere, EURGBP also dropped into the old range below 0.8700. Still, the political situation in the UK remains volatile, the bulk of the fiscally aggressive tax adjustments and energy cap proposals remain in place, so the lack of trust in the new UK government cannot be ignored. Focus now on the BOE meeting on November 3 where 115bps rate hike is priced in, lower than last week’s pricing of 150bps. However, a full-budget statement will be released before then and will offer a further sentiment test for sterling. The Eurozone and the UK PMIs confirm the risk of a recession The manufacturing PMI indexes for September are out. There is no good news. In the eurozone, the final estimate was revised down to 48.4 from 48.5 and 49.6 in August. This is the biggest monthly contraction since June 2020 (when the eurozone was getting out from the Spring lockdown). There is no surprise regarding the main reasons behind the drop. This is related to soaring energy bills which limited production across all eurozone member countries and higher cost of living pushing demand lower. Firms are getting prepared for a tough winter and are starting to discuss the opportunity of lower job hiring (very soon the talk will be about cutting jobs). In the United Kingdom, the manufacturing PMI index is also in contraction territory, at 48.4. It was 47.3 in August. This was a 27-month low. However, it is unlikely to get back into expansion anytime soon, in our view. These indicators tend to confirm there is a material risk of a recession both in the eurozone and in the United Kingdom this year. US ISM manufacturing disappoints The headline for September’s US ISM manufacturing came in weaker than expectations at 50.9 from the prior month’s 52.8 and expected 52.2. Both employment and new orders both dropped into contractionary territory printing 48.7 (exp. 53.0, prev. 54.2) and 47.1 (prev. 41.3), respectively. The report showed that higher interest rates are starting to weigh on business investment sentiment, at least in the interest rate sensitive sectors. Still, the inflationary gauge of prices paid declined to 51.7 (exp. 51.9, prev. 52.5) falling for the sixth straight month. Supplier delivery times suggested some easing on the supply chains, but overall the report indicated the case of a slowdown in the US economy as rapid Fed tightening continues. What are we watching next? Risk sentiment brightens – how far can it extend? A hole in the clouds yesterday as US yields dropped on the weak ISM Manufacturing survey and as a rising tide of observers are concerned that the Fed is tightening policy too rapidly, including one heavily covered tweet from the influential WSJ “Fed whisperer” Nick Timiraos noting that Greg Mankiw, the influential former Chairman of the Council of Economic Advisers under George W Bush had expressed approval of economist Paul Krugman’s view that the Fed is tightening too quickly. Hard to see this as more than a tactical turning point for markets, perhaps on overextended short positioning. The Fed’s tune has not changed, and the strongest pushback of developments over the last couple of sessions would be strong US data, including the September ISM Services tomorrow and the September jobs report on Friday. Earnings to watch The earnings season officially starts next week with the first group of US financials reporting but in the meantime a few earnings are worth watching this week. Biogen reports Q3 earnings (ending 30 September) today with analysts expecting revenue growth of -11% y/y and EBITDA at $847mn down from $959mn a year ago. While the current financial performance of Biogen is volatile and weak, the latest news about its breakthrough in Alzheimer’s with a drug that can slow down the disease is what analysts will focus on in terms of gauging the outlook. On Wednesday, Tesco is in focus as the UK largest grocery retailer is at the center of the current food inflation and insights from Tesco will be valuable from a macro point of view. Today: Biogen Wednesday: Keurig Dr Pepper, Aeon, Lamb Weston, Tesco, RPM International Thursday: Seven & I, Conagra Brands, Constellation Brands, McCormick & Co Economic calendar highlights for today (times GMT) 0900 – Eurozone Aug. PPI 1230 – ECB's Centeno to speak 1300 – US Fed’s Williams (voter) to speak 1315 – US Fed’s Mester (voter) to speak 1400 – US Aug. Factory Orders 1400 – US Aug. JOLTS Job Openings Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-4-2022-04102022
Poland's Inflation Expected to Reach Single Digits in August, but Disinflation to Slow Down

The Australian Dollar (AUD) Reacts Negatively To The RBA's Decision

TeleTrade Comments TeleTrade Comments 04.10.2022 10:05
AUD/USD meets with some supply after RBA hikes interest rates by 25 bps on Tuesday. A modest USD uptick further exerts some pressure, though the downside seems limited. Retreating US bond yields, the risk-on impulse seems to cap the buck and offers support. The AUD/USD pair comes under fresh selling pressure on Tuesday and erodes a part of the previous day's strong gains. The pair maintains its offered tone through the early European session and is currently placed near the lower end of its daily trading range, just above mid-0.6400s. The Australian dollar reacts negatively to the Reserve Bank of Australia's (RBA) decision to slow the pace of policy tightening and raise interest rates by 25 bps against expectations for a 50 bps hike. This, along with a modest US dollar uptick, exerts downward pressure on the AUD/USD pair. The downside, however, seems limited, at least for the time being, warranting some caution for bearish traders. In the accompanying monetary policy statement, the Australian central bank said that it expects to keep raising interest rates this year as inflation is trending well above the target range. Furthermore, RBA Governor Philip Lowe noted that inflation is likely to rise in the coming months and end the year at about 7.75%. This, along with a tight labour market, gives the RBA more space to tighten further. The USD, on the other hand, has been struggling to gain any meaningful traction amid the ongoing fall in the US Treasury bond yields. Apart from this, the risk-on impulse - as depicted by a strong follow-through rally in the US equity futures - acts as a headwind for the safe-haven greenback. This, in turn, offers some support to the risk-sensitive aussie and helps limit losses for the AUD/USD pair. Market participants now look forward to the US economic docket - featuring JOLTS Job Openings and Factory Orders data. This, along with speeches by FOMC members and the US bond yields, will influence the USD and provide some impetus to the AUD/USD pair. Traders will further take cues from the broader market risk sentiment to grab short-term opportunities around the major.
Reserve Bank of New Zealand: Kenny Fisher says he expects a 25bp rate hike on May 24th

Soaring Hawkish RBNZ Bets Are Strengthening The Kiwi (NZD) Bulls

TeleTrade Comments TeleTrade Comments 04.10.2022 10:10
NZD/USD is eyeing to test the weekly highs at 0.5750 as the RBNZ is expected to sound hawkish. A fifth consecutive 50 bps rate hike is expected by the RBNZ to continue the fight against inflation. The DXY is declining towards 111.00 amid lower projections for the US NFP data. The NZD/USD pair has bounced back sharply after dropping to near 0.5682 in the Tokyo session. The asset is broadly oscillating in a 0.5680-0.5726 range and is expected to deliver an upside break of the same. A north-side explosion will drive the asset towards weekly highs at around 0.5750. Weaker performance from the US dollar index (DXY) and soaring hawkish Reserve Bank of New Zealand (RBNZ) bets are strengthening the kiwi bulls. Wednesday’s monetary policy decision by the RBNZ is going to provide a decisive move to the antipodean. RBNZ Governor Adrian Orr is expected to announce a 50 bps rate hike consecutively for the fifth time. The inflationary pressures in the kiwi region have not cooled down yet, therefore, scaling down the ‘hawkish’ tone won’t be a fruitful option.  An announcement of the fifth 50 bps rate hike will push the Official Cash Rate (OCR) to 3.5%. Meanwhile, the DXY has printed a fresh weekly low at 111.44 in the early European session. The DXY is eyeing more weakness towards 111.00. Investors are dumping the DXY ahead of the US Nonfarm Payrolls (NFP) data. As expected, the US economy created 250k jobs in September, lower than the August reading of 315k. The US economy has been maintaining full employment levels, therefore, space for generating more employment is extremely less. Adding to that, the escalating Federal Reserve (Fed)’s interest rates are also restricting the corporate to continue their hiring programs with sheer pace.
China: PMI positively surprises the market

Expectations For The US Dollar To Chinese Yuan (USD/CNH) Pair

TeleTrade Comments TeleTrade Comments 04.10.2022 10:25
Further side-lined trading is predicted in USD/CNH, likely within the 7.0500-7.2200 range in the next few weeks, comment FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang. Key Quotes 24-hour view: “We expected USD to ‘consolidate and trade within a range of 7.1050/7.1700’ yesterday. Our view was incorrect as USD dropped sharply to 7.0901 in NY trade before rebounding. Despite the rebound, the underlying tone appears to be soft. That said, any further weakness in USD is likely limited to a test of 7.0800. Resistance is at 7.1270, followed by 7.1500.” Next 1-3 weeks: “There is no change in our view from last Friday (30 Sep, spot at 7.1000). As highlighted, the recent USD rally has topped out for now. The current movement is likely the early stages of a consolidation phase. In view of the recent high volatility, USD could trade within a broad range of 7.0500/7.2200 for a period of time.”
UK Labor Market Shows Signs of Loosening as Unemployment Rises: ONS Report

The New Quarter (Q4) Kicked Off On A Volatile In Positive Way

Swissquote Bank Swissquote Bank 04.10.2022 10:35
The new week, the new month and the new quarter kicked off on a volatile, but a positive note. Credit Suisse closed a very ugly session with 0.90% loss only. Stocks  European indices gained, while the US indices rallied as softer-than-expected US ISM manufacturing index gave a positive spin to the market. The Dow Jones jumped the most on Monday, as oil stocks literally roared on the back of firmer oil prices. Oil bulls are betting that OPEC will announce an output cut of around a million barrels per day to ‘stabilize’ oil prices. FX Update In the FX, the US dollar retreat almost 3% since its September peak. The dollar lost more than 4.50% against the Brazilian real, as Cable rallied past the 1.13 level, after Liz Truss government took a ‘mini’ step back from their terribly unpopular fiscal spending plan, and said that they will not reduce taxes on big salaries. Elsewhere, the Reserve Bank of Australia lifted its interest rates by 25bp only, versus 50bp expected by analysts. Today's report Today, we will be watching the job openings data in the US, and hope to see a smaller number, as the Fed sees the job openings as a factor that could ease the pressure in the US jobs market. Then, will follow the ADP report on Wednesday, and the NFP, unemployment rate and the wages growth on Friday. Investors are praying for softish numbers this week to continue the rally. Watch the full episode to find out more! 0:00 Intro 0:22 Stocks rebound 1:23 Oil stocks rally on firmer oil 4:44 …but Tesla slumps 5:55 FX update: USD down, BRL & GBP up 6:33 … but Brits want to see Liz spend less 8:16 RBA cuts less & investors need soft US data to cheer up Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #CreditSuisse #Tesla #Brazil #election #Bolsonaro #Lula #BRL #USD #GBP #OPEC #output #cut #crude #oil #US #jobs #Fed #BoE #Liz #Truss #mini #budget #SMI #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
The USD/JPY Price Seems To Be Optimistic

Bulls Again Pushed The US Dollar To Japanese Yen (USD/JPY) Pair

InstaForex Analysis InstaForex Analysis 04.10.2022 10:38
Yesterday, bulls again pushed the USD/JPY pair above the key 145 mark, but failed to gain a foothold there. The yen turned out to be a tough nut to crack, which is still too tough for the dollar bulls. For a penny of ammunition, for a ruble of ambition Trampling the USD/JPY pair, which lasted all last week, unexpectedly gave way to a decisive upward movement on Monday morning. Lacking a new fundamental catalyst, the dollar miraculously managed to hit the 145 peak it tested in September again. Recall that the last time this barrier was captured turned out to be a disaster for the greenback. In response to the strong fall of the yen, the Japanese authorities carried out the first intervention in 24 years to support their national currency. Having touched a potentially dangerous line, this time the greenback was more cautious and without intervening in the market, it bounced back as if scalded. This served as yet another confirmation that USD/JPY bulls are still wary of intervention and do not want to draw fire on themselves. Of course, the dollar still has a strong amulet in its pocket that will almost save it from a steep plunge. We are talking about the growing monetary divergence between the US and Japan. But the market is well aware that this is no longer enough for the USD to rise. With the Japanese government continuing to threaten to intervene again, the dollar needs a big boost in the form of strong economic data. A strong US economy will definitely allow the Federal Reserve to satisfy all its hawkish ambitions, and weak macroeconomic statistics, on the contrary, will prevent this. Recall that at the September meeting, the US central bank raised interest rates by 75 bps and reaffirmed its willingness to raise the rate more aggressively if inflation continues to be high. Nevertheless, many analysts believe that the 75 bps step is the ceiling for the Fed. The US central bank is unlikely to decide on anything more, given the uneven economic data. This opinion was supported by the latest index of business activity in the US manufacturing sector. The ISM reported a reading of 50.9 in September, lower than its forecast of 52.2. After the release of pessimistic statistics, the yield on 10-year US bonds fell by 14 basis points to 3.66%, and the dollar significantly fell. Flat may drag on Today's portion of US economic data is also unlikely to please the USD/JPY bulls. Tuesday's key report will be the release of the index of business activity in the services sector from ISM. Economists forecast a decline in September to 56 compared to the previous value of 56.9. The data on the index of new orders for the last month may also turn out to be weak. The indicator is expected to fall to 58.9 against 61.8 recorded in August. Preliminary estimates are putting significant pressure on the dollar-yen this morning as it struggles to break out of the consolidation phase to try again to break through the defenses at the psychologically important 145 mark. At the time of release, the quote jumped almost 0.2% and traded around 144.80. The trigger for the asset was a dovish statement by Japanese Prime Minister Fumio Kishida. The day before, the official said that the government will continue to stimulate the economy, while trying to make the most of the weak yen. The geopolitical factor also provided significant support to the dollar - the escalation of tension between Japan and North Korea. At the beginning of the day, it was reported that Pyongyang, which had already tested an unprecedented number of missiles this year, had fired another short-range ballistic projectile. This time, the target of the North Korean military appeared to be the Hokkaido area, which is considered the second largest Japanese island. In response to the missile launch over Japan, the Hokkaido authorities issued an air raid alert and urged the people of the region to take shelter. Meanwhile, Japanese Defense Minister Yasukazu Hamada has signaled that Tokyo is considering all options for strengthening its defenses, including a counterattack. If the conflict between the countries continues to escalate, the Japanese yen may weaken even more. In this case, bulls on the USD/JPY pair will finally have a real chance to settle above the 145 level. However, we recommend that traders do not force things yet and be patient, especially since most forecasts for the USD/JPY pair point to further movement in the flat. Most likely, in the coming days, the dollar and the yen will continue to pull the price rope in the 144-145 range. Technical picture for the USD/JPY pair The short-term trend is neutral, but has a tendency to the downside. As the quote fell below the 20-, 50- and 100-EMAs yesterday, this could spell further losses. If the bears manage to take the asset below 144, this will open a fast route to 143.90.   Relevance up to 09:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/323332
The RBA Surprised With A Smaller 25 bp Hike , Sterling (GBP) Rose, The USD Has Weakened

The RBA Surprised With A Smaller 25 bp Hike , Sterling (GBP) Rose, The USD Has Weakened

Saxo Bank Saxo Bank 04.10.2022 13:13
Summary:  Markets yesterday show how quickly this hot-tempered market can try to sniff out a Fed that will eventually pivot to a less hawkish stance as a weak US September ISM Manufacturing survey data point engineered a huge decline in US yields and significant USD weakness. More important US data is to come this week through Friday’s jobs report. Elsewhere, the surprisingly dovish RBA battled with supportive developments in commodities to sway the Aussie overnight. FX Trading focus: Desperation for the Fed pivot. Sterling: can it really be that easy? Dovish RBA. Yesterday saw US 10-year treasury yields almost 25 basis points lower from intraday highs, with much of the treasury buying/yield drop coming in the wake of a weaker than expected September US ISM Manufacturing survey, out at 50.9, below the 52.0 expected and 52.8 in August. The New Orders were far worse than expected at 47.1 vs. 50.5 expected and 51.3 in August. Alas, we have to remember that the Manufacturing sector is small in the US and about half of the dips to near or below 50 have not indicated imminent recession in the US. The ISM Services survey – up tomorrow - would be a different matter if it were to show marked deterioration. Elsewhere, a tweet from the WSJ’s Nick Timiraos noting that influential economist Greg Mankiw agreed with economist/pundit Paul Krugman’s assessment that the Fed is tightening too quickly may have helped to drive the sentiment shift at the margin as well. Pushing back against that was Fed Vice Chair Williams out expressing the belief that the Fed must remain on message: “Tighter monetary policy has begun to cool demand and reduce inflationary pressures, but our job is not yet done.” Williams speech does suggest that the Fed thinks that it is succeeding, so the strongest risk to markets here would be stronger US data suggesting a still strong pace of activity in services and a still very tight labor market with accelerating wage pressures. The Fed forecast assume a fairly soft landing of weak growth and 4.4% unemployment. Self-feeding cycles in a downturn and the Fed’s focus on lagging indicators like employment are likely to eventually lead to far worse outcomes. The USD has weakened at the outset of the week here – but note EURUSD holding the line so far just ahead of the key 0.9900 level. AUDUSD has far more wood to chop for a reversal, as discussed below. The most remarkably priced pair at the moment, however, may be USDJPY, which remains pinned near 145.00 despite the significant drop in long US treasury yields. Still uneasy about the risk of a blowout market-BoJ/MoF showdown – that’s a very weak performance from the yen today. Chart: AUDUSDThe AUDUSD chart has been an interesting one to watch since yesterday and overnight. Strong risk sentiment and lower US treasury yields weighed on the US dollar and helped boost commodity prices, both strongly Aussie supportive. But then the huge mark-down in Australian yields on a quite dovish RBA (more below) challenged the Aussie overnight. Looks like a battle-zone tactically around the local 0.6530 resistance, which was briefly taken out this morning on the further USD weakness before reversing back into the zone later in trading today. The down-trend is so well established that it would take a surge to at least above 0.6700 to begin challenging the down-trend here. The RBA surprised the majority of observers with a smaller 25 basis point hike to take the policy rate to 2.60%. It’s a reminder of the vast shift relative to the old regime, in which one might have expected an RBA rate at least 100-200 bps higher than the Fed’s. The last time the Fed was hiking to north of 3.00% was in mid-2005, when the RBA cash target had already reached above 5%. The RBA chose to emphasize caution in its latest statement, citing the anticipation that unemployment will eventually rise beyond the near term strength in the labor market as the economy eventually weakens. Governor Lowe and company are clearly uneasy and uncertain on the effects of the sharp tightening in the bag on mortgage rates and future spending, and the statement continues to cite lower wage growth than elsewhere. In addition to AUDUSD note above, also interesting to watch the relative strength in AUDNZD over tonight’s RBNZ, as the sharply lower Australian yields (the year-forward RBA rate has been marked a remarkable 50 basis points lower by the market after this meeting). A surrender below the 1.1250-1.1300 zone would suggest a risk that the attempt to reprice the pair higher on the shift in relative current account dynamics I have cited before has failed for now. Sterling rose further after Chancellor Kwarteng yesterday reversed his decision on the tax cut for the highest incomes in the UK. Interesting that this is was particularly item, while politically unpopular, was one of the least consequential in terms of the fiscal impact. For now, given the soaring risk sentiment backdrop, sterling short covering continues, but surely it’s not this easy? Technically, watching the major resistance zone at 1.1500 zone in GBPUSD and whether the bearish reversal back into the old range below 0.8700 in EURGBP sticks. This is still a government that is very much on the rocks. The latest controversy PM Truss is courting is claiming that she has yet to decide whether UK welfare distributions, outside of pensioners, should be raised with inflation, which has some Tory MP’s up in arms. Chancellor Kwarteng, feeling the rising pressure, will bring forward his fiscal statement to later this month from late November, around the time the Office of Budget Responsibility publishes its forecasts. Table: FX Board of G10 and CNH trend evolution and strength.The USD rose so far in its up-trend before the recent setback, that there is some residual medium term up-trend strength left, though momentum has shifted markedly against the greenback. The opposite is the case for sterling, which has achieved a positive trend reading versus the G10 broadly due to weak G10 smalls of late (note GBPNZD, for example, at a high since late February. Elsewhere, strong risk sentiment, together with concerns of a struggling Swiss bank have brought CHF south in a hurry over the last week. Table: FX Board Trend Scoreboard for individual pairs.CHF on its back foot and our longest surviving trend, the GBPCHF downtrend, is now dead. Sterling upside breaks are spreading, in fact. Also note the shift in US yields taking XAGUSD onto a sudden moonshot, while XAUUSD is eyeing an up-trend as well. Upcoming Economic Calendar Highlights 1230 – ECB's Centeno to speak 1300 – US Fed’s Williams (voter) to speak 1315 – US Fed’s Mester (voter) to speak 1400 – US Aug. Factory Orders 1400 – US Aug. JOLTS Job Openings 1500 – ECB President Lagarde to speak 0100 – New Zealand RBNZ Official Cash Target Announcement Source: https://www.home.saxo/content/articles/forex/fx-update-the-desperation-for-the-fed-pivot-04102022
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

EUR/JPY Pair: The Continuation Of The Rebound From Last Week’s Lows Remains Well

TeleTrade Comments TeleTrade Comments 04.10.2022 13:36
EUR/JPY extends the sharp bounce beyond the 143.00 mark. The breakout of 144.04 should open the door to the YTD high. EUR/JPY remains well bid and trades in multi-session peaks above the 143.00 yardstick on Tuesday. The continuation of the rebound from last week’s lows remains well in place for the time being. That said, if the cross breaks above the weekly top at 144.04 (September 20), it could then challenge the 2022 peak at 145.63 (September 12). In the meantime, while above the key 200-day SMA at 135.97, the constructive outlook for the cross should remain unchanged. EUR/JPY daily chart  
TRY: Central Bank set to deliver significant rate hike today

Turkey's Weak Economic Situation And Weak Currency (TRY)

TeleTrade Comments TeleTrade Comments 04.10.2022 13:40
The Turkish lira has remained relatively more stable against the US dollar for most of September. Despite recent stability, the trend remains in favour of a faster sell-off resuming, in the opinion of economists at MUFG Bank. Lira’s recent resilience unlikely to last “We do not expect the lira’s recent resilience to last. Turkey’s weak economic fundamentals still favour further lira weakness.” “The widening current account deficit, elevated inflation, and negative real policy rate remain a recipe for further lira weakness.”  See: USD/TRY will continue to rise gradually for now, breaking above 19 – Credit Suisse
PLN Soars to Record Highs Ahead of NBP Decision

The Bullish Trend Is Currently Very Strong For The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 04.10.2022 14:21
Overview : The bullish trend is currently very strong for the EUR/USD pair. As long as the price remains above the support levels of 0.9764 and 0.9823, you could try to take advantage of the bullish rally. Over the past week, the price of the EUR/USD pair has been plummeting with strong bullish momentum, resulting in a break above the 50-day and 100-day moving averages lines on the daily timeframe, indicating that the bulls are presently in control of the market. The euro's strong gains against the US dollar have continued this week ahead of the NFP. The common currency reached a high of more than two years earlier this morning GMT at 0.9900. Signs of progress toward new fiscal stimulus in the USA and the dollar's general weakness have been key factors despite weak economic data affecting both currencies. This technical analysis of the EUR/USD pair looks at the one-hour chart. The resistance of the EUR/USD pair has broken; it turned to support around the price of 0.9823 last week. Thereby, forming a strong support at 0.9764. The direction of the EUR/USD pair into the close this week is likely to be determined by trader reaction to 0.9823 and 0.9950. The EUR/USD pair climbed above the level of 0.9823 before it started a downside correction. The EUR/USD pair set above strong support at the level of 0.9764, which coincides with the 61.8% Fibonacci retracement level. This support has been rejected for three times confirming uptrend veracity. Hence, major support is seen at the level of 0.9764 because the trend is still showing strength above it. The level of 0.9764 coincides with the golden ratio (61.8% of Fibonacci retracement) which is acting as major support today. Another thought; the Relative Strength Index (RSI) is considered overbought because it is above 60. At the same time, the RSI is still signaling an upward trend, as the trend is still showing strong above the moving average (100), this suggests the pair will probably go up in coming hours. The first bullish objective is located at 0.9904. The bullish momentum would be revived by a break in this resistance (0.9904). Buyers would then use the next resistance located at 0.9950 as an objective. Crossing it would then enable buyers to target 0.9950. Be careful, given the powerful bullish rally underway, excesses could lead to a short-term rebound. If this is the case, remember that trading against the trend may be riskier. It would seem more appropriate to wait for a signal indicating reversal of the trend. Accordingly, the market will probably show the signs of a bullish trend. This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend In other words, rebuy orders are recommended above 0.9950 level with their third target at the level of 1 USD. From this point, the pair is likely to begin an ascending movement to the point of 0.9904 and further to the level of 0.9950. The price of 1 USD will act as a strong resistance and retest the psychological price again. On the other hand, if a break happens at the support of 0.9764, then this scenario may become invalidated. This content is for information purposes only and in no way constitutes investment advice or any incentive whatsoever to buy or sell financial instruments. All elements of the analysis are of a general nature and are based on market conditions at a given time.     Relevance up to 13:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295395
The Cable Market (GBP/USD) Is Likely To Show Signs Of A Bullish Trend

The Cable Market (GBP/USD) Is Likely To Show Signs Of A Bullish Trend

InstaForex Analysis InstaForex Analysis 04.10.2022 14:26
Overview : The GBP/USD pair is trading sharply higher against the U.S. Dollar at the mid-session on the heels of the last month jobs report that missed expectations. The single currency soared, and the greenback weakened after the U.S. Labor Department said non-farm payrolls rose by 1.1337 last month, well short of the 1.1033 estimate. Moving averages continue to give a very strong buy signal with all of the 50 and 100 EMAs successively above slower lines and below the price. The 50 SMA has extended further above the 100 this week. Support from MAs comes initially from the value area between the 50 and 100 EMAs. The GBP/USD pair rose to 1.1033 at the start of Sept. 2022 before taking another leg higher to 1.1337. The pair briefly breached parity on 04 October, as markets reacted to US inflation figures. That was followed by an immediate rebound that sent the GBP/USD pair back above the 1.1214 level. An alternative scenario is fixing above MA 100 H1 (1.1214), followed by growth to 1.1300 (high of the American session). The GBP/USD pair broke resistance which turned to strong support at the level of 1.1033 yesterday. The level of 1.1033 coincides with a golden ratio (61.8% of Fibonacci), which is expected to act as major support today. The Relative Strength Index (RSI) is considered overbought because it is above 50. The RSI is still signaling that the trend is upward as it is still strong above the moving average (100). Additionally, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). For now, outlook will stay bullish as long as 1.13033 resistance turned support holds, even in case of another drop. This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend. This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend. Buy orders are recommended above the golden ratio 1.1033 with the first target at the level of 1.1459. Furthermore, if the trend is able to breakout through the first resistance level of 1.1459. We should see the pair climbing towards the double top (1.1459) to test it. The pair will move upwards continuing the development of the bullish trend to the level 1.1500. It might be noted that the level of 1.1500 is a good place to take profit because it will form a new double top in coming hours.   Relevance up to 14:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295407
Alphabet Reports Strong Q2 2023 Results with Growth in Advertising and Cloud Services - 24.07.2023

Australian Dollar To US Dollar - The RBA Decision Was Different Than Expected

Kenny Fisher Kenny Fisher 04.10.2022 16:17
AUD/USD started the day with losses, but has since recovered. The Aussie is trading at 0.6540, up 0.37%. RBA surprises with 0.25% hike The Reserve Bank of Australia was widely expected to deliver a fifth consecutive hike of 50 basis points at today’s meeting, but the Bank surprised the markets with a small increase of 0.25%, which raises the cash rate to 2.35%. Governor Lowe had signalled that he was planning to ease up on the 0.50% increases, but with inflation running at 6.1% and not giving any indications of peaking, expectations were for the Bank to deliver at least one more 0.50% hike. Interestingly, the RBA statement acknowledged that inflation has not yet peaked and is expected to rise to 7.75% in 2002 before dropping to 4.0% in 2023. If soaring inflation has not yet been beaten back, why did the RBA ease up? The answer is likely related to the continuing global economic uncertainty – China’s economy has been slowing and the war in Ukraine is escalating, with Europe facing an energy crisis this winter. The RBA statement included the usual mention that inflation and the labour market will be important factors in future rate policy, but Lowe & Co. will also be closely eyeing global developments. As well, the RBA is anxious to prevent a recession due to the sharp tightening in recent months, and a 0.25% hike will be easier for the economy to absorb than a 0.50% increase. Read next: RBA Missed Market Expectations With Their Interest Rate Decision| FXMAG.COM Over in the US, the Fed hasn’t signalled it will change its aggressive tightening stance just yet. Still, there are signs that the economy is slowing down. On Monday, the ISM Manufacturing PMI dropped to 50.9 from 52.9, barely in expansion territory and its lowest level since May 2020. Until inflation is unmistakably moving lower, the Fed is likely to continue delivering outsized rate hikes. AUD/USD Technical AUD/USD is putting pressure on support at 0.6433. The next support line is 0.6329 There is resistance at 0.6503 and 0.6607 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. RBA underwhelms with modest rate hike - MarketPulseMarketPulse
NZD/USD: Reserve Bank Of New Zealand Is Expected To Hike The Rate By 50bp

NZD/USD: Reserve Bank Of New Zealand Is Expected To Hike The Rate By 50bp

Kenny Fisher Kenny Fisher 04.10.2022 16:24
The New Zealand dollar continues to rally. In the European session, NZD/USD is trading at 0.5746, up 0.43%. RBNZ likely to deliver 0.50% hike The Reserve Bank of New Zealand holds a meeting on Wednesday. The RBNZ has been aggressive with its rate tightening and is expected to raise rates by 0.50%, which would bring the cash rate to 3.50%, the highest since 2015. Governor Orr has hinted that the rate cycle could be coming to a close soon, but that is still more work to do to tame inflation. In Q2, CPI rose to 7.3%, up from 6.9% in Q1. The economy has performed well, with GDP rising 1.7% in Q2, along with a strong labour market and solid wage growth. This means that Orr can continue to raise rates above 4.0% in the knowledge that the economy is strong enough to handle additional rate hikes. September was a disaster for the New Zealand dollar, which plunged 6.5% and fell to its lowest level since March 2020. With the US dollar taking a breather, NZD/USD has rebounded this week, with gains of 2.70%. The volatility could well continue, and the New Zealand dollar is likely to face more headwinds in the short term. First, the risk-related currency has been hit hard as risk apprehension has soared. The war in Ukraine has escalated and the energy crisis facing Western Europe could tip many countries into recession this winter. China’s economy has been slowing down, which means less demand for New Zealand exports. Second, the Federal Reserve remains in aggressive mode and is committed to curbing inflation, even if that results in a recession. US Treasury yields have been on an upswing, propelling the US dollar higher against most of the major currencies. NZD/USD Technical NZD/USD is testing support at 0.5712. Below, there is support at 0.5639 There is resistance at 0.5829 and 0.5902 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD/USD - All eyes on RBNZ - MarketPulseMarketPulse
BSP Maintains Rates Amid Moderate Inflation; Eyes Further Tightening if Needed

Crude Oil And USD: Most Probably Many Will Keep An Eye On This Week's OPEC+ Meeting And The US Jobs Data

Kenny Fisher Kenny Fisher 04.10.2022 16:39
All eyes on OPEC+ Oil prices are continuing to creep higher ahead of the OPEC+ meeting on Wednesday. Markets are now expecting a large output cut in excess of one million barrels per day, for which there is seemingly plenty of support. But with the economic outlook becoming gloomier by the day, will the alliance go far enough to achieve the $90-100 oil they so clearly desire? I suspect any cut will be accompanied by strong language over the prospect of further action which may make up for any shortfall, should they take a more conservative approach. A hot jobs report may spoil the party All this talk of peak rates has excited the gold bulls, with the yellow metal leaping above $1,700 and gaining momentum. The sustainability of any rebound will ultimately depend on how long traders can convince themselves peak rates are priced in. Looking back at past periods of optimism, we may be on borrowed time. Of course, rates can only go so far and the RBA has already taken the decision to take its foot off the brake. But I’m not convinced the Fed is there yet and a hot jobs report may spoil the party once more. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. OPEC+ meeting looms, gold has momentum - MarketPulseMarketPulse
Further Downside Of The AUD/JPY Cross Pair Is Expected

How Will The Move Of Aussie (AUD) Look Like Today?

InstaForex Analysis InstaForex Analysis 05.10.2022 08:01
The Bank of Australia raised its base rate yesterday by a modest 0.25% against a general expectation of 0.50%. As a result, the aussie lost 13 points during the day. Today, the Reserve Bank of New Zealand raised the rate by the expected 0.50%, but this does not help the kiwi grow. The daily timescale chart shows that yesterday's candle opened and closed below the level of 0.6515, respectively, the exit of the upper shadow above the level, almost to the target of 0.6565, can be taken as a false movement. Now we are waiting for the development, strengthening of the declining sentiment. The first target is 0.6439. Overcoming the first target opens the second one - 0.6385 - the nearest line of the green price channel. The price settled above both indicator lines on the H4 chart. This circumstance makes it difficult for the bears to act, although the Marlin Oscillator is trying - it is falling to the zero line and is clearly set to overcome it. Full consolidation of the downward trend, however, will occur after the price goes under 0.6439.   Relevance up to 04:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323435
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

The Cable Market (GBP/USD): There Are Chances For The Price To Reverse From The Current Levels

InstaForex Analysis InstaForex Analysis 05.10.2022 08:08
The pound has almost reached the MACD indicator line on the daily timescale. The Marlin Oscillator is starting to turn down. This is probably still the limit of the pound's correctional growth, and now it needs to think about how to settle under the nearest level of 1.1305. After that, the task of developing a medium-term decline will be greatly facilitated. An exit above 1.1500 with a consolidation above the MACD indicator line of the daily timeframe can once again push the price up to the level of 1.1760. On the four-hour chart, despite the strong three-day growth, the Marlin Oscillator refuses to grow, it continues to move sideways just above the zero line. This circumstance increases the chances of a price reversal from current levels. The start of the medium-term decline can push the price to consolidate at 1.1305.   Relevance up to 04:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323437
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

The EUR/USD Pair: The Bulls Have Difficulty In The Monthly Price Consolidation

InstaForex Analysis InstaForex Analysis 05.10.2022 08:13
The euro rose 160 points yesterday on the back of continued risk appetite in the stock markets. The US S&P 500 added 3.06%. Yields on government bonds also fell - on 5-year bonds from 4.06% to 3.88%. The level of accumulation of stop losses in the area of 1.9870 was overcome and the euro was able to overcome the technical resistance - the level of 0.9950 we defined and the MACD line of the daily scale. The price stuck in the range of monthly consolidation on August 22-September 20 at 0.9950-1.0050. Yesterday's surge in the stock markets is unlikely to repeat today, and on Friday there will be data on labor in the US for September. The forecast for new jobs in the non-farm sector is 250,000, which is very good and could add to the worries about the rate. At the upper border of the specified range (1.0050), the price will most likely reverse downwards, with the price returning below 0.9855. The price may not reach 1.0050. The main sign of a reversal will be consolidation under 0.9950. Divergence is already visible on the four-hour timescale. It can be smoothed out in the next 24 hours, but this is a visual indication of further difficulties for the bulls in the monthly price consolidation zone. Albeit with difficulty, but the price can still consolidate under the level of 0.9950. We are waiting for the development of events. Relevance up to 04:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323439
The Euro May Attempt To Resume An Upward Movement

The Euro To US Dollar (EUR/USD) Pair Continued Its Upward Movement

InstaForex Analysis InstaForex Analysis 05.10.2022 08:48
EUR/USD 5M The EUR/USD pair continued its upward movement on Tuesday and managed to add about 150 points. It is hardly worth saying that this is high volatility and strong growth for the euro. There were no grounds for such growth, since there were no important macroeconomic reports for either the US or the European Union. European Central Bank President Christine Lagarde only spoke in the evening, but for obvious reasons it could not affect the pair's movement during the day. Thus, the euro continues to use the chance given to it and rises as long as possible. Despite the current already quite strong growth, we still believe that this may just be a strong correction. Also, not so strong, if you look at the 24-hour timeframe. However, it is undeniable that both the euro and the pound are now rising, and these could be new upward trends. European currencies will not fall forever. However, as we have already said, the fundamental and geopolitical backgrounds can bring bears back to the market. In regards to Tuesday's trading signals, the picture was rather complicated. The first buy signal was formed during the night when it rebounded from the Senkou Span B line and the level of 0.9813. At the opening of the European trading session, the price went close to the signal formation level, so long positions could be opened. Unfortunately, a false sell signal was formed during the European trading session (when the price consolidated below 0.9877), which ruined everything. I had to close a long position with a profit of about 20 points and open a short position, which brought a loss of 28 points. However, a new buy signal near 0.9877 was strong, and the position should have been closed manually in the late afternoon with a profit of at least 80-90 points. COT report: The Commitment of Traders (COT) reports on the euro in 2022 can be entered in the textbook. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then they showed a bearish mood for several months, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have said, because the demand for the US dollar remains high. Therefore, even if the demand for the euro is growing, the high demand for the dollar does not allow the euro itself to rise. During the reporting week, the number of long positions for the non-commercial group increased by 2,000, while the number of shorts decreased by 1,800. Accordingly, the net position grew by about 200 contracts. This is very small and this fact does not matter much, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 34,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 5. The world is on the brink of a nuclear catastrophe. The stakes are going up. Overview of the GBP/USD pair. October 5. There are opportunities to restore the work of Nord Stream. Forecast and trading signals for GBP/USD on October 5. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The trend on the hourly timeframe began to change to an upward one and an ascending channel was formed, which visualizes well what is happening on the market. The euro may continue to rise, although there is no good reason for this. However, a technical correction is also the foundation. We highlight the following levels for trading on Wednesday - 0.9553, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, as well as Senkou Span B (0.9796) and Kijun-sen lines (0.9758). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union and the United States will release indexes of business activity in the services sector. They may be followed by a market reaction (remember Monday and business activity indices in manufacturing). A rather minor ADP report will also be released, which is considered the second most important report on the labor market. Friday - NonFarm Payrolls. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 02:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323427
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

The Pound To US Dollar (GBP/USD) Pair Has Broken The Downward Trend

InstaForex Analysis InstaForex Analysis 05.10.2022 08:51
GBP/USD 5M Yesterday, the GBP/USD currency pair continued its upward movement at about the same pace as it had recently fallen. That's how quickly everything changes in the foreign exchange market. Just a week ago, the pound was near the 1.0400 level, which is its all-time low, and now it is already 1100 points higher. We said that the downward trend should end quickly and sharply, it seems that this happened a week ago. Now it is very important for the pound that geopolitics and the "foundation" do not return the bears to the market. If from the foundation it is approximately clear what to expect in the coming months, then with geopolitics it is a big question. We assume that the military conflict in Ukraine may escalate more than once and definitely will not end in the coming months. Therefore, on each subsequent escalation, the dollar can rise again, because this is a normal defensive reaction of the market. Thus, the pound is still taking advantage of the fact that bears have taken profits on their transactions, but its long-term growth prospects still remain vague. There were several trading signals on Tuesday, and the volatility was again high. The first three signals formed near the level of 1.1354. The first buy signal cannot be considered false, as the price went up 55 points and just barely reached the target level. The next sell signal turned out to be false, as the price went in the right direction by only 35 points. Therefore, most likely, traders did not receive any profit on the first two transactions. But the third buy signal made it possible to earn. The price reached the level of 1.1442 this time and overcame it. Therefore, the position had to be closed manually above this level, and the profit was at least 80-90 points. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group opened 18,500 long positions and 10,100 short positions. Thus, the net position of non-commercial traders increased by another 8,400, which is quite a lot for the pound. We could assume that the actions of the big players and the pound's movement have finally begun to coincide, only the report is released with a three-day delay and simply does not include the last three days of trading, when the pound showed growth. The net position indicator has been actively falling again in recent weeks, and the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Now it has begun a new growth, so the British pound can formally count on growth. But, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 106,000 shorts and 59,000 longs open. The difference, as we can see, is still large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 5. The world is on the brink of a nuclear catastrophe. The stakes are going up. Overview of the GBP/USD pair. October 5. There are opportunities to restore the work of Nord Stream. Forecast and trading signals for EUR/USD on October 5. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair has broken the downward trend on the hourly timeframe, as all key levels and lines have been overcome. Important lines and levels are also slowly overcome on the higher timeframes, so the pound is getting closer and closer every day to completing a long-term downward trend. So far, the fundamental and geopolitical backgrounds do not prevent the pound from growing, but in the future the situation may change more than once in favor of the dollar. We highlight the following important levels on October 5: 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.0905) and Kijun-sen (1.0993) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. The UK and the US will publish indexes of business activity in the services sectors, and we have another ADP report in the US. This data may affect the pair's movement, but the market is now buying the pound and just fine for no reason. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group. Relevance up to 02:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323429
RBA Governor Announces Major Changes at RBA Board as US Inflation Expected to Decline

Musk Revived His Bid For Twitter| OPEC Have Started Talking About Cuts With Russia

Saxo Bank Saxo Bank 05.10.2022 09:11
Summary:  Oil rallies for the second day with OPEC+ considering an output cut as much as 2 million barrels a day, which is more than anticipated. US stocks rallied for the second day, moving off their lows on softer than expected labor market data that supported the notion of central bank peak hawkishness. The Reserve Bank of Australia hikes less than expected, and the Reserve Bank of New Zealand meeting ahead today. Also watch for the US ISM services print later, pivotal for Fed pivot expectations that are gaining momentum prematurely. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rally for the second day, moving off lows US stocks rallied for the second day, rebounding from their deeply oversold levels with the S&P500 seeing its best two-day surge since April 2020. The S&P500 ended up almost 3.1% higher on Wednesday, the Nasdaq 100 up 3.1%. Retail favorite, Tesla (TSLA) shares revved up 2.9% after Cathie Wood scooped up 132,000 more shares in the electric vehicle giant. Tesla was among the biggest contributors to the S&P500’s gains, along with Amazon and Microsoft. For a detailed discussion of Tesla’s challenges ahead, please refer to Peter Garnry’s excellent article here. The Energy sector was the best performer in the S&P 500, gaining 4.3%, followed by Financials which were up 3.8%. Only seven stocks in the S&P500 closed in the red. However, the news of the day was that Twitter’s takeover by Musk is back on. On top of that, softer US economic data out also boosted sentiment, with the market thinking the Fed might not be as fierce with rate hikes later this month. US job openings sank to a 14-month low, following the day prior weaker than expected manufacturing data. So, perhaps a short-squeeze is fueling the rally here. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) declined modestly on the front end Treasury yields fell first on a dovish hike (25bps vs the 50bps expected) from the Reserve Bank of Australia during Asian hours and then on the biggest decline of the JOLTS job opening (10,053K vs prior 11,239K).  10-year yields made an intraday low at 3.56% before paring it and settled little changed at 3.63%.  The curve bull steepened with the front-end 2 to 5-year fell 2-3bps in yield and the 30-year yield edging up 1bp.  Australia’s ASX200 (ASXSP200.1) rallied above 6,700, snapping its downtrend The ASX200 charged 3.75% yesterday (including the 1.2% rise after the RBA’s pivoted to going softer on rate hikes) which took the market to its highest level since September 23 (just shy of 6,700, closing at 6,699). Today the market opened 0.8% up in the first 10 minutes of trading, with the futures implying the market could rise 1.6% on Thursday to 6,803. If the market can hold above 6,700 it means the market will effectively have broken its downtrend and is staging a comeback. This notion was supported by our technical analyst. For more read on here. EURUSD touches parity again Lower US yields and a softer US dollar is turning things around in the FX space, although pricing out the Fed rate hikes from 2023 appears to be premature. Some of this could also be the positioning ahead of key US NFP data due this week. EUR made a strong recovery on the back of a weaker dollar, as it rose from lows of 0.9800 to touch parity. Commentary from the ECB’s Villeroy also helped, as he said that interest rates will be raised as much as necessary to lower core inflation and called for rates to go to neutral by year-end without hesitation. Meanwhile, President Lagarde reiterated her view that inflation was undesirably high, and it is difficult to say whether or not it had peaked. Crude oil (CLX2 & LCOX2) higher on OPEC cut expectations Crude oil prices rose further amid speculation that OPEC is considering an even larger cut to production than first thought. The group is said to be considering a cut of up to 2mb/d, according to media reports. It is also being reported that the cuts will be made from current production levels and not the quotas as most members are already producing below their quota. That, if true, will likely tighten the market especially as European sanctions will kick in from December and US is also pausing the release from its strategic reserves. This tightness could be exacerbated by a rebound in Chinese demand if it can contain outbreaks of COVID-19. WTI futures rose above $86/barrel while brent crossed the key $90-mark. A significant draw was also reported in API inventories, with crude stocks down 1.77mn. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong is set to have some catch-up to do with the 5.7% gain in the S&P 500 and 6.1% rise in the NASDAQ Golden Dragon China Index when it returns from a public holiday today.  The stock markets in Shanghai and Shenzhen remain closed for the rest of the week for public holidays.     What to consider?   US JOLTs signalling the tightness in the labor market may be moderating US JOLTs data was out with a weaker than expected number. The number of job openings in the U.S. declined to 10.1 million in August, the lowest since June 2021, and below expectations of 10.8 million. The job openings rate was down to 6.2% from 6.9% in July, and puts the focus on the ADP data due today in the run upto the NFP data on Friday. OPEC+ meeting to bring production cuts There have been some reports that OPEC members have started talking about cuts with Russia proposing a 1 mln barrels per day cut, a reduction towards which they are unlikely to contribute much as they are already producing below their quota. At its last meeting on September 5, the group agreed a token reduction of 100,000 barrels a day for October, despite calls from consuming nations to help tame rampant inflation by keeping the taps open. With gasoline prices retreating in the US, some of that external pressure may now be easing, and that further raises the prospects of some price-supportive action. FT also reported the production cuts will be from current production levels, not from the quota's which many producers do not meet - emphasising the impact of the production cut. The credit market showed signs of calming down Over the past two days, the sharp rise in investment credit spreads has tentatively reserved, showing some sign of relief in the investment grade credit market.  The Markit CDX North America Investment Grade Index (CDX IG39), which represents an equal-weighted average of credit default swap spreads of 125 North American investment grade corporate, fell more than 6bps on Tuesday to 98bps, a decline of nearly 16bps from its intraday high of 114 last week. The Reserve Bank of New Zealand meeting ahead The RBNZ will announce its latest monetary policy decision today. NZ house prices have seen one of their biggest quarterly drops on record in the three months to September. It’s worth watching the NZD against the AUD (NZDAUD) given their current account trajectories. RBA hiked less than expected, signaling peak hawkishness could be behind it. What does it mean to traders and investors? Yesterday the RBA rose rates by just 25bps (0.25%) instead of the 50bps (0.5%) expected, which took the cash rate to 2.6%. The RBA’s hiking power has been diminished as household spending is dropping, along with forward looking projections. We know it typically takes 3-months for an interest rate hike to be felt by the consumer, and the RBA alluded to this, in saying higher inflation and interest rates are putting pressure on households, with the full effects yet to be felt. The RBA referenced although consumer confidence and house prices had fallen, the central bank is still focused on slowing inflation which it sees increasing ‘over the coming months ahead’. Plus the RBA expects unemployment will continue to fall over the months ahead, before rising. This means, the RBA could slow the pace of hikes after December onwards. This implies peak hawkishness is behind us. AUDUSD fell 1% after the meeting however it since reversed those losses and trades 0.6% higher from the meeting. It’s been supported as the USD continued to roll over on expectations the Fed might not be as aggressive with rate hikes later this month. However if the Fed perhaps hikes by 0.75% the AUDUSD might revert back to a bearish stance. For investors, the RBA pivot supports a risk-on tone in equities which is why all 11 sectors rose yesterday, with tech and mining up the most. Energy markets saw the most gains as they have the most momentum amid the energy crisis. Lithium and agricultural stocks dominated the top 10 risers; with lithium stocks Sayona Mining (SYA), Lake Resources (LKE), Core Lithium (CXO), Pilbara Minerals (PLS) and Allkem (AKE), gaining 10%+ each. Musk revived his $44 billion Twitter bid send Twitter shares up 22% Billionaire Elon Musk revived his bid for the social media giant, at the original offer of $54.20 a share after spending months trying to back out of it. Shares of Twitter (TWTR) jumped almost 22% to $52.00 on the news. US ISM services will be key to watch today With chatter on Fed pivot gaining momentum out of a miss in one ISM manufacturing print, possibly also underpinned by the turmoil in the financial system, it will become more key to watch the services sector data out today. Consensus expects the number to be 56, down from 56.9, as higher interest rates and high inflation begins to eat into services spending after a solid post-pandemic rebound.     For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-5-oct-05102022
Bitcoin Stagnates at $30,000 Level, Awaits US Bitcoin ETF Update and Fed Meeting

Tesco Has Decided To Lock Everyday Items |The US Dollar (USD) Continued To Weaken

Saxo Bank Saxo Bank 05.10.2022 09:32
Summary:  Another banner day for equity markets, which surged further on hopes that central banks will be increasingly easing off the gas pedal in coming weeks and months on signs that the impact of their tightening is wearing on economic growth. It’s counterintuitive and remains to be seen how equity markets will eventually greet recessionary outcomes for earnings and revenue in the quarters ahead. For now, the focus is tactical, particularly on whether the remaining US data this week through Friday’s jobs report will confirm this most recent narrative.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities continued their rebound yesterday with S&P 500 futures hitting the big 3,800 level, but the index futures are coming down a bit this morning trading around the 3,785 level. The significant declines in US bond yields and chatter about a Fed pivot, this still has a low probability at this point, have been the catalyst behind the rebound and the fact that markets were very stretched added to size of the rebound as short covering have been taking place. In today’s session the ADP employment change and ISM Services Index are the key macro events that could add some fresh energy to the downside. Yesterday’s biggest negative change on record in the JOLTS Report suggests that the labour market is beginning to cool down. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) The Hong Seng Index soared over 5% to catch up with the S&P 500 Index’s 5.7% rally over the past two days after Hong Kong returned from a public holiday. Weaker U.S. economic data recently have helped fuel the notion of peak tightening from the Fed and contributed to the turnaround in global stocks this week. Index heavy-weights jumped, HSBC (00005:xhkg) up 6.3%, AIA (01299:xhkg) up 6.7%, Tencent (000700:xhkg) up 5.8%, Meituan (03690:xhkg) up 7.6%, and Alibaba (09988:xhkg) up 8.2%. BYD (01211:xhkg) soared nearly 10% after the Chinese automaker reported record sales of over 200,000 electric and hybrid vehicles in September, a growth of 183% from last year, and the seventh consecutive month of sales growth. The mainland exchanges remain closed for the rest of the week for the National Day golden week holiday. USD and US yields/risk sentiment The US dollar continued to weaken yesterday, particularly against European currencies as EURUSD touched parity briefly and as GBPUSD rose close to 1.1500 on a further change of tune from UK Chancellor Kwarteng, who is making noises about plans to bring forward debt-cutting measures in the new budget he will present later this month. An important test for the greenback lies ahead through the end of this week on macro data and its impact on US treasury yields, as noted below, as well as on risk sentiment. Gold (XAUUSD) and silver (XAGUSD) rise further Hopes that central banks will begin to ease away from the tightening of the last many months after a deceleration from the ECB and at least one weak US data point this week, saw yields a bit lower and precious metals surging, with Gold rushing higher yesterday after the break above the key 1,680-1,700 from Monday was solidified with a move above 1,725 at one point yesterday. Silver’s enormous jump on Monday was only followed up with a much smaller move yesterday. Next area of focus in gold will be the 1,734 area and then the major 1,800 zone. The strength in US macro data and direction of US yields key through Friday’s US jobs report (weak data and lower yields most gold supportive.) Crude oil (CLX2 & LCOX2) higher on larger OPEC cut expectations Crude oil prices rose further amid speculation that OPEC is considering an even larger cut to production than first thought. The group is said to be considering a cut of up to 2mb/d, according to media reports. It is also being reported that the cuts will be made from current production levels and not the quotas as most members are already producing below their quota. That, if true, will likely tighten the market especially as European sanctions will kick in from December and US is also pausing the release from its strategic reserves. This tightness could be exacerbated by a rebound in Chinese demand if it can contain outbreaks of COVID-19. WTI futures rose above $86/barrel while Brent crossed the key $90-mark. A significant draw was also reported in API inventories, with crude stocks down 1.77mn. US treasuries (TLT, IEF) US treasury yields recovered slightly after a further drop yesterday that took the 10-year benchmark to 3.56% at the lows, just ahead of the key 3.50% area former cycle high from June. Key data this week, including the ISM Services (far more important for the current status of the US economy than the ISM Manufacturing that garnered such a strong reaction on Monday) and the US September jobs report are likely to set the tone. What is going on? Twitter (TWTR:xnas) shares rose more than 20% as Elon Musk agrees to original takeover terms The shares of Tesla (TSLA:xnas) were down sharply on one point on the news before these in turn recovered to positive territory in a torrid rally for US equities yesterday. With Twitter’s closing price yesterday being close to the takeover price at $54.20 the downside risk remains now for Tesla shares in the event that Elon Musk is forced to sell more Tesla shares to finance the deal. US JOLTS job openings surveys signals that the tightness in the labor market may be moderating US JOLTs data was out with a weaker than expected number, declining to 10.1 million in August, the lowest since June 2021, and below expectations of 11.1 million and after 11.2 million in July. The job openings rate was down to 6.2% from 6.9% in July, and puts the focus on the ADP data due today in the run up to the nonfarm payrolls change data on Friday. New Zealand’s RBNZ hikes 50 basis points as expected This was the fifth consecutive meeting to bring a half-point hike and took the official cash rate to 3.5%. The bank signaled more tightening to come in its statement, as it noted that “core consumer price inflation is too high and labor resources are scarce. Still, short NZ rates continue to trade lower, if not falling as rapidly as for Australia after the RBA surprised with only a 25 basis point hike yesterday. The AUDNZD rate dropped below 1.1250 at one point overnight from the 1.1350 range before the announcement. Tesco 1H revenue beats estimate The largest Uk grocery retailer reports like-for-like UK revenue of +0.7% vs est. -0.1% but the company says that cost inflation is still significant. Tesco has also decided to lock over 1,000 everyday items at low prices until 2023 which could be negative for operating margin in the short-term. What are we watching next? Risk sentiment brightens – how far can it extend? Quite a short squeeze on bearish risk sentiment as global equities have backed up sharply, in many cases after touching new bear market lows – is this a bullish reversal with legs or will it fade quickly? Two prior bear market rallies in March and especially June-August impressed. For now, the tactical focus higher in the US equity market would be on the 3,800-3,900 zone, the next hurdle for establishing whether this squeeze will develop into something more, with the most immediate sentiment test likely the ISM Services survey today (more below) in the US and especially the jobs (and earnings) data on Friday, as it appears this rally was kicked off by a soft September ISM Manufacturing survey on Monday. UK Prime Minister Truss to deliver address at Tory conference today This is an important speech after the recent volatility in UK gilt markets, mostly attributable to policymaking from the Truss government, including generous caps on energy prices and tax cuts, that suggest little interest in maintaining long term credibility in government debt. US ISM services will be key to watch today With chatter on a Fed pivot gaining momentum out of a miss in one ISM manufacturing print, possibly also underpinned by the turmoil in the financial system on contagion from the wipeout and recovery in UK gilt markets over the last ten days, it will become more key to watch the services sector data out today. Consensus expects the number to be 56, down from 56.9, as higher interest rates and high inflation begin to eat into services spending after a solid post-pandemic rebound. Earnings to watch We had highlighted that Biogen would report earnings yesterday, but our earnings date data was incorrect, and the date is now set for the 18 October. Tesco has already reported earnings (see review above), so today’s remaining earnings focus is Lamb Weston which is a large US food company with analyst expecting FY23 Q1 (ending 31 August) revenue growth of 16% y/y and stable operating margin. Today: Lamb Weston, Tesco, RPM International Thursday: Seven & I, Conagra Brands, Constellation Brands, McCormick & Co Economic calendar highlights for today (times GMT) 0715-0800 – Eurozone final Sep. Services PMI 0830 – UK final Sep. Services PMI Poland Central Bank Rate Announcement 1215 – US Sep. ADP Employment Change 1230 – US Aug. Trade Balance 1230 – Canada Aug. Building Permits 1230 – Canada Aug. International Merchandise Trade 1400 – US Sep. ISM Services 1430 – US Weekly DoE Crude Oil and Product Inventories 2000 – US Fed’s Bostic (non-voter) to speak 0030 – Australia Aug. Trade Balance Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-5-2022-05102022
The Commodities Feed: China's 2023 growth target underwhelms markets

RBA Hike Sent A Wave Of Optimism But The Downside Risks Persist

Swissquote Bank Swissquote Bank 05.10.2022 10:17
Global equities, bonds, commodities and currencies rallied, as the US dollar eased further yesterday. Soft US JOLTS data, and softer-than-expected Reserve Bank of Australia (RBA) hike sent a wave of optimism across the global markets. But the downside risks persist with further US jobs data due today, and OPEC – which may announce a big cut in oil production. The US dollar index slid to 110 mark, the EURUSD advanced to parity, and Cable advanced to 1.1490. The USDCAD fell to the 1.35 on the back of softer US dollar and firmer oil. Commodities Market In commodities, gold tested the 50-DMA to the upside ($1730 per ounce,) while Bitcoin consolidated above the $20K mark. Today, the ADP report is expected to print 200’000 new private job additions in the US. A soft figure is what every investor is secretly praying for. In oil, according to the latest reports, OPEC could announce cutting oil output by 2 million barrels today. But, a big decline in OPEC supplies may not necessarily trigger a further price rally, as higher the energy prices, the sharper the central banks must kill demand to pull the prices lower. Watch the full episode to find out more! 0:00 Intro 0:35 Equities rebound 1:23 Elon will buy Twitter! 2:03 FX update: dollar down, majors, gold & Bitcoin up 2:38 What triggered the latest rally? 6:29 How could it last? 7:20 A big cut from OPEC could, also, backfire! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #OPEC #Russia #output #cut #energy #crisis #crude #oil #Apple #Tesla #market #rally #shortsqueeze #RBA #RBNZ #rate #hike #US #jobs #ADP #JOLT #data #USD #EUR #GBP #CAD #XAU #Bitcoin #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Kuroda Stayed On The Sidelines And The Yen Responded With Losses

The US Dollar To Japanese Yen (USD/JPY) Pair Has Potential For Further Rally

InstaForex Analysis InstaForex Analysis 05.10.2022 10:23
Technical analysis: USD/JPY has been trading upside this morning after the strong rejection of the support at 143.50. I see potential for the upside continuation of the bigger upside trend. Trading recommendation: Due to the strong rejection of the support at 143.50 and breakout of the multi-hour range, I see potential for further rally. Watch for the potential buying opportunities on the intraday dips with the upside objectives at the price of 144.90 and 145.25 Stochastic oscillator is showing fresh bull cross, which is good sign for further upside movement. Key support is set at the price of 143.50-144     Relevance up to 09:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295521
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

Due To High Inflation In The Eurozone There Is No Chance Of A Increase In The Euro (EUR)

InstaForex Analysis InstaForex Analysis 05.10.2022 10:28
Several market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 0.9903 level in my morning forecast and advised making decisions on entering the market there. A breakthrough of 0.9850 passed without a reverse test from top to bottom, so I failed to get an entry point into long positions there. As a result of the pair's growth in the first half of the day, the level of 0.9903 was updated, where a false breakout gave a sell signal. The downward movement amounted to about 25 points, after which the demand for the euro returned. In the afternoon, a break of 0.9903 also occurred without a reverse test, so it did not work out to buy EUR/USD here either. All I could see was a false breakout and a small selloff from 0.9952 with an 18 pip move down. When to go long on EUR/USD: Risk appetite has risen significantly as traders began to bet on the completion of a series of interest rate hikes by the Federal Reserve before the end of this year. Given the attractive levels for buying the euro, the bulls quickly returned the pair back to parity, for which the main struggle will unfold. Today, a large set of statistics on activity in the eurozone countries is expected, which may cool the ardor of bulls, which will lead to a slight correction in the market - especially in conditions when the contraction in the services sector and in the composite PMI index for the eurozone for September of this year is forecast. If the pair goes down, I advise you to act from the level of 0.9952. Forming a false breakout there will be the starting point for building up long positions with the prospect of recovery back to the weekly high of 0.9996. A breakthrough and test from top to bottom of this range, together with strong statistics on the eurozone, on the contrary, will hit the stop orders of speculative bears, forming an additional signal to open long positions with the possibility of a surge up to the 1.0040 area. Consolidating above this level will be a serious victory for the bulls, as the bear market will gradually slow down in the medium term. A more distant target will be resistance at 1.0084, where I recommend taking profits. If the EUR/USD declines and there are no bulls at 0.9952, there is no need to panic. Although the pressure on the pair will increase, it will only lead to a fall to the 0.9909 area, where the moving averages are passing, playing on the bulls' side. In this case, the best solution to open long positions there would be a false breakout. I advise you to buy EUR/USD immediately on a rebound only from 0.9856, or even lower - in the region of 0.9807, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears have once again missed the market, and the observed upward correction has already turned into a good short-term bull market. The bears' initial task for today is to protect the new high of 0.9996, since releasing the pair above this level can further lose the initiative, which will jeopardize the existence of the trend. Forming a false breakout at this level, together with a weak eurozone services PMI for August, will provide an excellent entry point for short positions, allowing for a sharper movement of the pair down to the 0.9952 area. Surely a breakdown and consolidation below this level with a reverse test from the bottom up forms an additional sell signal already with the demolition of bulls' stop orders and a larger fall to the 0.9909 area, where the moving averages are passing, which are clearly capable of limiting the pair's downward potential. A more distant target will be the area of 0.9856, where I recommend taking profits. In case EUR/USD jumps during the European session, as well as the absence of bears at 0.9996, the demand for the euro will only increase, which will lead to a more powerful upward correction. In this case, I advise you not to rush into short positions. I recommend opening short positions only if a false breakout is formed at 1.0040. You can sell EUR/USD immediately on a rebound from the high of 1.0084, or even higher - from 1.0118, counting on a downward correction of 30-35 points. COT report: The Commitment of Traders (COT) report for September 27 logged an increase in both short and long positions. The meetings of the central banks have passed, and given that the euro withstood the pressure formed last week by the statements of European and American politicians, one can count on a gradual recovery of the pair in the short term. However, you shouldn't get too carried away. As is already known, inflation in the EU countries has already exceeded 10.0% and in the autumn-winter period the situation with this indicator will only worsen. For this reason, I would not bet on a strong euro growth. The deterioration of the geopolitical situation in the world, which to a greater extent concerns the eurozone, will greatly slow down the European economy in the near future and will surely lead it to recession in the spring of next year. In the near future, a number of important data on activity in the euro area is expected, the decline of which may significantly limit the further upward potential of the pair. The COT report indicated that long non-commercial positions rose by 2,172 to 208,736, while short non-commercial positions jumped by 1,824 to 174,939. At the end of the week, the total non-commercial net position remained positive and amounted to 33,797 against 33,449 This indicates that investors are taking advantage of the moment and continue to buy cheap euros below parity, as well as accumulate long positions, counting on the end of the crisis and the recovery of the pair in the long term. The weekly closing price collapsed and amounted to 0.9657 against 1.0035. Indicator signals: Moving averages Trading is above the 30 and 50-day moving averages, which indicates the euro's succeeding growth. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of growth, the upper border of the indicator in the area of 1.0015 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.       Relevance up to 08:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323449
Weekly Commitment of Traders update - Buying of crude oil moderated, ICE gas oil net long reduced to a 30-month low

Podcast: Resistance In US Markets, The Crude Oil Reversal On The Threats And OPEC Meeting

Saxo Bank Saxo Bank 05.10.2022 11:11
Summary:  Today we look at the short squeeze in equity markets finding surprising further strength yesterday and note that key resistance in US markets has already come into view as the "central bank pivot" narrative may struggle to find further sustenance when most of what we have seen may have just been a temporary improvement after a scary episode driven by UK gilt market contagion that eased. We also look at the status of FX markets, the crude oil reversal on the threats of an actual large production cut from OPEC+ today, Tesla and Twitter after Musk u-turned on his intent to challenge the deal, Tesco and semiconductor stocks and much more. Today's pod features Peter Garnry on equities, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-oct-5-2022-05102022
Gold Market Sentiment and Analyst Forecasts: Bond Yields and China's Impact

Forex: The UK PM Speaks Today! | British Pound To US Dollar (GBP/USD) May Near 1.12!

ING Economics ING Economics 05.10.2022 11:09
FX markets were caught up in a broad risk rally on Tuesday. To what degree that owed to expectations of a slowdown in monetary policy tightening or just position adjustment remains unclear. However, we remain firmly on the side of the dollar, given that the Fed is unlikely to pivot early. Look out for rate meetings in Poland and Romania today  USD: Position adjustment dominates Tuesday saw a tremendous rally in risk assets, where European equities led the pack by gaining over 4%, high yield credit spreads narrowed 30bp+ and emerging markets bounced back – Romania’s 2051 USD-denominated bond rallied over 10%! In FX, European currencies fought back after recent losses. Looking back on this period one could probably blame a variety of events such as i) central bank intervention to stabilise markets (Bank of Japan and People's Bank of China in FX, Bank of England in Gilts) ii) some slightly softer US data and iii) the Reserve Bank of Australia’s smaller-than-expected hike, for contributing to the reversal of the unchecked stagflation trade. Position adjustment and new money being put to work in thin markets at the start of a new quarter may have also played a role. On the subject of central bank intervention, investors may wait with interest to hear from the G20 on 12 October. We doubt G20 financial authorities will have too much to say about FX markets – but the communique is an event risk. However, we remain sceptical that the Fed is about to pivot on the back of slightly softer US data this week. Focusing on the tight labour supply challenge, the Fed told us in September that unemployment needs to rise from its current 3.7% to 4.4% next year to prevent the Fed funds from going any higher than 4.50-4.75%. Instead, it looks like yesterday’s outsized reaction was a function of market positioning. We are still multi-month if not multi-quarter dollar bulls and would see this dollar DXY correction running out of steam in the 108.50/110.00 area. Chris Turner EUR: Return to above-parity levels looks unsustainable EUR/USD followed the stellar rally in risk assets yesterday, and is now pressing the 1.000 resistance. We struggle to see much more behind the pair’s rally other than a position-squaring event and a broad dollar correction. Despite European assets rebounding quite sharply, it’s hard to point to any material change in the eurozone’s outlook that would warrant a significant return of market appetite for the euro just yet. In our view, there is not enough bullish push to keep EUR/USD above parity on a sustainable basis, and we still forecast a drop to the low 0.90 area into year-end. Today, the eurozone calendar is quite light, with only final PMI figures and France’s industrial production to be highlighted, and there are no scheduled European Central Bank speakers. Francesco Pesole GBP: Fiscal event FX losses have been unwound GBP/USD is now back to levels before the UK government’s fiscal event on 23 September. What are not back to pre-fiscal event levels are the UK’s sovereign credit default swaps (now 45bp vs 32bp) and the 10-year Gilt-Bund spread (200bp vs 155bp). The government’s fiscal reputation has been tarnished and news that the chancellor may not after all bring forward his medium-term fiscal statement leaves sterling vulnerable. Look out for comments from PM Liz Truss at the Conservative Party conference today. We suspect that the sterling rebound and the dollar correction may have come far enough and could easily see cable reversing to the 1.1200 area. Chris Turner CEE: Central banks try to end hiking story Today we have two meetings of central banks in the Central and Eastern European region. We will hear from the National Bank of Poland on its reaction to the latest upside surprise in inflation. Our team in Warsaw expects a 25bp rate hike to 7.0%, in line with surveys. The latest statements from central bankers indicated that the hiking cycle is over and we cannot expect more. However, inflation has yet to peak and it will be difficult for the NBP to navigate the slowing economy. From a market perspective, the situation is very volatile. After the inflation release last week, the market moved to the hawkish side but has returned closer to our expectations over the last few days. However, the record WIBOR levels indicate that the market is still tilted to the hawkish side. We see the NBP trying to end the hiking cycle, although we still expect further rate hikes. Overall, today's meeting will thus be negative news for the Polish zloty. Our view is also supported by the stronger levels achieved in the last two days due to the increase in the rate differential. In Romania, the situation is a bit clearer. The National Bank of Romania already slowed the pace of interest rate hikes at the previous meeting and we expect this trend to continue. We expect a 50bp hike today to 6.00%. While the latest inflation developments have been rather on the upside of our central scenario, we maintain the view that we witnessed the peak headline in August at 15.3% year-on-year. Together with a slowing economy, this leads us to one more rate hike later in November, by 25bp to a terminal rate of 6.25%. On the FX side, the Romanian leu has moved back to 4.95 EUR/RON after a brief excursion to stronger levels and the NBR seems to have the situation fully under control, for now. We do not expect any changes in the short term, however, the global selling pressure on the CEE region is also affecting the RON market. Looking at the Hungarian forint and Polish zloty, we can assume that the NBR's FX defence costs have increased significantly over the last two weeks, indicating that stability cannot last forever. For now, we expect a shift higher in our forecast for the intervention level early next year. However, the winter months could bring increased pressure on FX and push the NBR to ease the pressure a little earlier. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Asia Market: Optimistic Headlines From Regional Leaders China And Japan

Expectations For The Level Of The US Dollar to Indonesian rupiah (USD/IDR) Pair In The Q4

TeleTrade Comments TeleTrade Comments 05.10.2022 11:50
In September, the Indonesian rupiah weakened against the US dollar rates from 14,840 to 15,224. Economists at MUFG Bank expect the USD/IDR pair to reach 15,500 before easing back lower next year. IDR may see some support from a hawkish BI and current account trends “We now expect BI to hike by another 75 bps in Q4-2022 and another 75 bps in 2023.” “IDR may be supported by resilient current account dynamics. We forecast a current account surplus of 0.4% of GDP in 2022 and 0.5% deficit in 2023.” “We forecast USD/IDR at 15,500 in Q4 and before stabilising in 2023.” “We forecast USD/IDR at 15,300 in Q1-2023, 15,100 in Q2-2023 and 14,900 in Q3-2023.”
Central Banks' Rates Outlook: Fed Treads Cautiously, ECB Prepares for Hike

The Gas To Italy Will Flow Again, Gazprom Has Decided To Resume Deliveries

TeleTrade Comments TeleTrade Comments 05.10.2022 11:42
Russian state-owned energy giant, Gazprom, said in a statement on Wednesday, “we have resumed gas supplies to Italy via Austria.” “We have found a solution to resume gas supplies to Italy,” Gazprom said. Meanwhile, Russian media outlets report that President Vladimir Putin has formally signed the law annexing four Ukrainian regions. Market reaction The euro caught a fresh bid wave on gas supplies optimism, driving EUR/USD back towards parity. The spot is currently trading at 0.9985, modestly flat on the day.
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

There Were No Significant Changes In The Euro (EUR) Market Yesterday And The Risk Appetite Improved

InstaForex Analysis InstaForex Analysis 05.10.2022 12:34
Analysis of transactions in the EUR / USD pair The price test of 0.9846 happened when the MACD line was just starting to move above zero, which was a good signal to buy. This led to an increase of over 50 pips, and the continuation of the bull market. Some time later, short positions at 0.9895 were also a success as the pair fell by more than 30 pips. No other signals appeared for the rest of the day. Data on the Eurozone's producer prices coincided with forecasts, so there was not much change in the market yesterday. However, risk appetite did improve a little, so euro saw a new wave of growth in prices. Talking about rate hikes, many expect the Fed to raise rates by 125 basis points in March next year, up from the 165 points expected after a third three-quarter point hike last month. That is why the speeches of the Fed representatives were ignored. A lot of reports are scheduled to be released today, such as business activity indices in the services sector in Germany and the eurozone, as well as composite PMI indices. Weak data could hurt bullish sentiment, which will lead to a fall in euro in the morning. By afternoon, similar reports from the US will be published, followed by employment data from the ADP, report on foreign trade balance and a speech from FOMC member Raphael Bostic. If all these are better than expected, demand for the dollar will climb further, which will offset the recent losses against the euro. For long positions: Buy euro when the quote reaches 0.9984 (green line on the chart) and take profit at the price of 1.0034. Growth will occur if economic reports in the Euro area exceed expectations. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9930, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9984 and 1.0034. For short positions: Sell euro when the quote reaches 0.9930 (red line on the chart) and take profit at the price of 0.9860. Pressure may return if statistics from the Euro area are weaker than expected. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 0.9984, but the MACD line should be in the overbought area as only by that will the market reverse to 0.9930 and 0.9860. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 09:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323465
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

Doubts About The British Pound's (GBP) Outlook Remain

InstaForex Analysis InstaForex Analysis 05.10.2022 12:40
Analysis of transactions in the GBP / USD pair The price test of 1.1343 occurred at the moment when the MACD line was far from zero, so the upside potential was limited. Sales, meanwhile, brought more than 50 points of profit. No other signals appeared for the rest of the day. The UK's abandonment of the tax cut plan calmed investors' nerves over the government's financial health, but doubts about the pound's outlook remained. And although the active intervention of the Bank of England continues to support the currency, demand may decrease at any moment, so be careful when buying at current levels. A lot of reports are scheduled to be released today, such as business activity index in the services sector and composite PMI in the UK. Weak data could hurt bullish sentiment, which will lead to a fall in the pound in the morning. By afternoon, similar reports from the US will be published, followed by employment data from the ADP, report on foreign trade balance and a speech from FOMC member Raphael Bostic. If all these are better than expected, demand for the dollar will climb further, which will offset the recent losses against the pound. For long positions: Buy pound when the quote reaches 1.1473 (green line on the chart) and take profit at the price of 1.1546 (thicker green line on the chart). Growth will occur, but it will stop as soon as negative data appears. Nevertheless, traders could buy as long as the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.1420, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1473 and 1.1546. For short positions: Sell pound when the quote reaches 1.1420 (red line on the chart) and take profit at the price of 1.1335. Pressure will return in case of weak statistics and a decrease in risk appetite. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1473, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1420 and 1.1335. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 09:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323469
The AUD/USD Pair’s Downside Remains Off The Table

The Australian Dollar To US Dollar (AUD/USD) Pair Declined

InstaForex Analysis InstaForex Analysis 05.10.2022 12:48
News about the change in the interest rate by the Bank of Australia disappointed traders, that is why AUD/USD declined and updated the yearly lows. From a technical point of view, the pair traded within a range over the past two trading weeks, the upper limit of which is 0.65300. This level was falsely broken yesterday during the European session. Considering this, as well as the three-wave pattern (ABC), where wave A represents bearish pressure, traders can enter the market by selling from current prices up to the 50% retracement level. Set stop loss at 0.65400, then exit the market on the breakdown of 0.64500 and 0.63600. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 10:00 2022-10-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323479
GBP: Strong June Retail Sales Spark Sterling Rally

Positive News For Ukraine And Softer Natural Gas Prices And Their Impact For Market

Saxo Bank Saxo Bank 05.10.2022 12:56
Summary:  With perfect hindsight, much of the recent aggravation of the USD spike was down to a troubled sterling as UK gilts markets were roiled by pension fund hedging after signals from the Truss government that fiscal prudence is a forgotten priority. With bond markets becalmed and sterling having come full circle from its level before the volatility event, we have now developed an additional narrative of a possible general central bank pivot to less tightening, driven by a couple of soft US data points and a dovish RBA. But can we get much more out of the pivot narrative here? FX Trading focus: We have neutralized the GBP wipeout and a central bank pivot narrative has partially broken out. Now what? Not much to add in today’s observations as yesterday saw an aggressive extension of trades aligning along the risk sentiment axis, particularly the US dollar lower, if mostly only against the European currencies. The lack of more pronounced breadth in the weakening greenback may be down to long US yields stabilizing ahead of the key 3.50% area in 10-year US treasury yield, but also down to the fact that the UK was at the center of the recent aggravated ramp up in the USD as treasury yields spiked. As well, positive news for Ukraine and softer natural gas prices in Europe are likely additional drivers for improved European FX sentiment. With GBPUSD trading back almost as high as 1.1500 this morning, the approximate kick-off area from where the UK gilt market melted down and took sterling with it starting after the September 22 Bank of England meeting, we now have to ask ourselves if there is more sustenance for a continuation of the move. Barring actual signals of a pivot from the Fed and/or energy and power prices in Europe dropping significantly further due to an actual visibility emerging on the longer term shape of Russian supplies, the answer is most likely “no”. Of course, a big miss in the September US ISM Services survey today (expected at 56.0 vs. 56.9 in August) and/or a bad miss on payrolls and earnings in the Friday US September jobs report could drive an extension of the “central bank pivot” narrative in the near term, with the US dollar on its back foot. But weaker global growth is no boon to risk sentiment at some point beyond the immediate relief from a cessation in the seemingly inexorable rise in yields. Chart: EURUSDParity in EURUSD an obvious psychological resistance line and was also the big, sticky round level that the exchange rate hugged for several weeks before the excursion to below 0.9600 that was mostly about the contagion (into a strong USD) from the sterling meltdown that was a traumatic liquidity event in the wake of the Bank of England meeting and the subsequent, deficits-be-damned moves by UK Chancellor Kwarteng. We are more or less back to square one, with the added narrative twist of a central bank pivot as noted above. Uniformly weak US data through Friday could drive an extension higher, but even a move to 1.0200+ may simply represent a larger scale consolidation within the massive downtrend, even if the downward channel denoted on the chart would be disrupted. A strong batch of US data and significant pull back higher in US yields would likely cap the action for now, although it will take some considerable work to get the downtrend back on track after this sharp back-up. The RBNZ hiked rates overnight by 50 basis points, as expected, and it was the fifth consecutive hike of that size from the Bank. Given the less dovish guidance from the RBNZ in its statement relative to the RBA’s more modest hike and guidance, the AUDNZD dropped quickly to sub-1.1250 levels overnight before rebounding considerably – an underwhelming performance. That 1.1250 area, with a bit of slippage, is arguably the bull-bear line for that pair, with commodity prices, particularly energy, a possible determinant of whether the pair reprices back higher toward 1.2000 as I have argued might be possible due to the relative change in fortunes for the two countries’ current accounts over the last couple of years. A more significant assessment of policy awaits at the final RBNZ meeting of the year on November 23 (expectations still solid for a 50 bps move then). EURCHF reached important resistance around 0.9800 after the thaw in risk sentiment and rumors of a troubled major Swiss bank helped Swiss government bond yields to drop far further than EU counterparts. Swiss yields have rebounded a bit this morning – hard to believe in a major reversal here unless we see a major further improvement in the European economic outlook. Table: FX Board of G10 and CNH trend evolution and strength. The USD uptrend is limping, if not yet reversed meaningfully in a broad sense. Note the weak commodity dollars -interesting to see if OPEC+ can pull off the threatened production cuts after its meeting today. Sterling has seen a mind-bending reversal over the last many days – maybe peak amplitude on that account for a while? Table: FX Board Trend Scoreboard for individual pairs.AUDNZD up-trend status in play here after the RBNZ reaction in favour of the kiwi has not stuck well. Note EURUSD trying to turn to a positive trend reading today – the ISM Services and ADP payrolls data the likely deciders there. Upcoming Economic Calendar Highlights Poland Central Bank Rate Announcement 1215 – US Sep. ADP Employment Change 1230 – US Aug. Trade Balance 1230 – Canada Aug. Building Permits 1230 – Canada Aug. International Merchandise Trade 1400 – US Sep. ISM Services 2000 – US Fed’s Bostic (non-voter) to speak 0030 – Australia Aug. Trade Balance Source: https://www.home.saxo/content/articles/forex/fx-update-we-have-neutralized-the-gbp-wipeout-now-what-05102022
Oil Could Be Ready To Pop, The Bank Of England Market Pricing Is More Mixed

The Barrel Of West Texas Intermediate (WTI) Gained More Than 3%

TeleTrade Comments TeleTrade Comments 05.10.2022 13:01
USD/CAD gathered bullish momentum early Wednesday following two-day slide. WTI trades in negative territory as markets wait for OPEC+ to unveil output strategy. The dollar benefits from safe-haven flows amid escalating geopolitical tensions. After having lost nearly 300 pips in a two-day slide, USD/CAD reversed its direction and climbed toward 1.3600 on Wednesday. As of writing, the pair was trading at 1.3570, where it was up 0.45% on a daily basis. WTI turns south ahead of OPEC+ decision The sharp upsurge witnessed in crude oil prices helped the commodity-sensitive loonie outperform its rivals earlier in the week. On reports claiming that OPEC+ could reduce crude oil production by as much as 2 million barrels per day, the barrel of West Texas Intermediate (WTI) gained more than 3% and climbed to its highest level since mid-September at $87 on Tuesday.  The negative shift witnessed in the risk mood, however, seems to be causing oil prices to edge lower mid-week and doesn't allow the CAD to preserve its strength. OPEC+ is set to unveil its output strategy later in the day and the European Union is expected to introduce a new sanctions package against Russia that will most likely include a cap on oil prices. Meanwhile, US stock index futures are down sharply as geopolitical tensions continue to escalate. Russian President Vladimir Putin is reportedly planning to address the nation and announce a change in the status of the "special operation." Russia's ambassador warned earlier in the day that the US' decision to send more military aid to Ukraine would raise the danger of a direct clash between Russia and the west. In the second half of the day, the US economic docket will feature the ADP's private sector employment data and the ISM's Services PMI survey. 
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The Downward Trend Of The NZD/USD Pair Is Set To Remain

TeleTrade Comments TeleTrade Comments 05.10.2022 13:38
NZD/USD has failed to sustain the upside above 0.5800. While below 0.6010/0.6060, the downtrend is set to persist, economists at Société Générale report. 50-day moving average near 0.6010/0.6060 to be an important hurdle near-term “NZD/USD recently formed an interim low near the lower limit of a multi-month down sloping channel at 0.5565 which is also a trend line drawn since 2009.”  “An initial bounce is taking shape; the 50 DMA near 0.6010/0.6060 which is also the low of July is expected to be an important hurdle near-term. Failure to overcome this resistance can lead to continuation in downtrend towards last month trough of 0.5565 and 2020 levels of 0.5495/0.5470.”
RBA Pauses Rates as Australian Dollar Slides; ISM Manufacturing PMI in Focus

Most Fed Members Support A Hawkish Scenario

InstaForex Analysis InstaForex Analysis 05.10.2022 13:52
Euro continues to rise even though Fed officials said they are not going to change their stance on interest rates. Clearly, the bar for a less aggressive policy remains high in spite of the central bank already getting the signals it has long been counting on from the economy. On the other hand, the Reserve Bank of Australia surprised investors yesterday when it raised rates by less than half of what was forecasted. This fueled a rally in equity markets, as well as in risky assets such as euro and pound. Although senior Fed officials warned that the fight against inflation will take longer than originally planned and did not give any hint that a similar RBA-like adjustment could happen at the next meeting on November, market participants continue to bet on a less aggressive policy next year. They said the decisions will be influenced by two key indicators: the US Nonfarm Payrolls Report and the Consumer Prices Report due October 13th. These data can change the mood of market participants, which improve every day. Even so, most Fed members support a hawkish scenario, saying that the restoration of price stability could take some time and likely entail a period of below-trend gains. High inflation could also fuel household inflationary expectations. To continue the growth of EUR/USD, it is necessary to break through 1.0000, as only by that will the quotes climb to 1.0040 and 1.0085. Meanwhile, a drop below 0.9900 will push the pair to 0.9850, then to 0.9800 and 0.9760. In GBP/USD, a lot depends on 1.1500 because its breakdown will lead to a rise to 1.1540 and 1.1590. On the other hand, a fall below 1.1420 will push the pair to 1.1360, then to 1.1300 and 1.1230.   Relevance up to 10:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323477
Euro to US dollar - Ichimoku cloud analysis - 21/11/22

Euro Outlook: Why Price Caps Don't Matter

Jing Ren Jing Ren 05.10.2022 15:08
In the last couple of days, the Euro has been drifting higher, back towards parity. It comes at a somewhat curious juncture, considering the context in the UK. Though, it should be pointed out that yesterday markets jumped higher on expectations that the Fed would pivot sooner than previously expected. This isn't an unusual phenomenon for the markets, to get a dose of optimism after trending downward for over a month. US stocks hit a new low for the year, and bounced back. The dollar weakness would naturally help the Euro. But there's more going on here. Not all spending is the same Last week, the pound took a dive after the Chancellor announced plans for a fuel price cap that could cost up to £200B, and tax incentives that would potentially reduce the UK's tax revenue by £45B. This sent shockwaves through the market, affecting even the rate decision by the RBA, citing turmoil in the UK as one of the reasons for its surprise move to raise rates lower than anticipated. Yet at the end of the week, Germany announced an energy price cap in the order of €200B, while the EU struggles to deal with surging prices. Yet there was no proportional reaction in the markets. Germany reaffirmed its commitment to the debt brake, suggesting possible austerity measures next year. In fact, the Euro got stronger, and there was no hint that the ECB would have to step in. Germany can spend more The debt-to-GDP ratio is an important aspect in how inflationary government spending is likely to be. Germany has a ratio just below the Maastricht guidelines of 59.8% (that's before the pandemic). The UK was much higher at 85.4%. This puts a limit on how high the central bank can raise rates without the cost to service the government's debt significantly impacting the budget. Thus, traders aren't as worried about German government spending. The issue for the Euro, however, is the latest round of negotiations about expanding the capacity of other countries to maintain debt. Most EU countries are not only far from complying with Maastricht rules, but some are also over twice the allowed debt-to-GDP rate, such as Italy. When taken together, the Eurozone’s debt-to-GDP is higher than the UK's. The future trends While the ECB maintains a lower interest rate than the BOE, the debt issue isn't as noticeable. However, there are several indicators that rates will continue to rise, potentially more than in the UK. Inflation is still on the rise, the ECB is worried about "de-anchoring" expectations, and the Euro Zone's GDP grew by a healthy 4.1% last quarter, giving the central bank more headroom. In other words, depending on how the economy evolves, the Euro is not immune from a market reaction similar to what happened to the cable. Probably not in the near term. But, if through the winter the economic situation worsens, governments could seek to increase spending to support consumers and businesses. The EU likely won't have the same chaotic announcement with lack of details that drove a sudden drop in confidence, such as what happened in the UK. In other words, the move might not be as sudden, but it could be as large, and require intervention from the ECB.
On the New York Stock Exchange A Lot Of Shares Fell, The Biggest Losers Were Bit Brother Ltd And Avenue Therapeutics Inc

On the New York Stock Exchange A Lot Of Shares Fell, The Biggest Losers Were Bit Brother Ltd And Avenue Therapeutics Inc

InstaForex Analysis InstaForex Analysis 06.10.2022 08:07
At the close of the New York Stock Exchange, the Dow Jones fell 0.14%, the S&P 500 fell 0.20%, and the NASDAQ Composite fell 0.25%. The leading performer among the components of the Dow Jones index today was Nike Inc, which gained 2.46 points or 2.78% to close at 91.10. Visa Inc Class A rose 2.02 points or 1.09% to close at 187.67. UnitedHealth Group Incorporated rose 3.90 points or 0.75% to close at 527.07. The biggest losers were Goldman Sachs Group Inc, which shed 5.87 points or 1.86% to end the session at 309.00. Shares of JPMorgan Chase & Co rose 1.38 points (1.23%) to close at 110.39, while Dow Inc shed 0.56 points (1.20%) to close at 46 .06. Leading gainers among the S&P 500 components in today's trading were Illumina Inc, which rose 6.56% to hit 218.52, Schlumberger NV, which gained 6.26% to close at 41.57, and Gap Inc, which rose 5.19% to end the session at 9.72. The biggest losers were Lumen Technologies Inc, which shed 9.45% to close at 7.28. Shares of Enphase Energy Inc shed 9.25% to end the session at 261.60. Quotes Vornado Realty Trust fell in price by 6.38% to 22.47. The leading gainers among the components of the NASDAQ Composite in today's trading were Chardan Nextech Acquisition 2 Corp, which rose 102.63% to hit 21.54, Nauticus Robotics Inc, which gained 96.27% to close at 6.32. , as well as shares of Pineapple Holdings Inc, which rose 93.01% to end the session at 2.76. The biggest losers were Bit Brother Ltd, which shed 42.97% to close at 0.18. Shares of Avenue Therapeutics Inc shed 41.59% to end the session at 8.47. Quotes Scienjoy Holding Corp fell in price by 36.99% to 1.38. On the New York Stock Exchange, the number of securities that fell in price (2102) exceeded the number of those that closed in positive territory (991), while quotes of 107 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,313 companies fell in price, 1,443 rose, and 198 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.79% to 28.55. Gold futures for December delivery shed 0.28%, or 4.90, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery rose 1.76%, or 1.52, to $88.04 a barrel. Futures for Brent crude for December delivery rose 2.07%, or 1.90, to $93.70 a barrel. Meanwhile, in the Forex market, EUR/USD fell 0.96% to hit 0.99, while USD/JPY edged up 0.35% to hit 144.60. Futures on the USD index rose 1.00% to 111.08.   Relevance up to 04:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/295644
The USD/JPY Price Reversed From The Lower Limit

The USD/JPY Pair Price's Intention Is To Continue Growing Further

InstaForex Analysis InstaForex Analysis 06.10.2022 08:12
The USD/JPY pair continues to consolidate under the sloping ascending line of the monthly price channel. Investors are probably waiting for tomorrow's data on US employment in order to confidently resume long positions on the dollar together with the rest of the market. The growth prospect still does not seem very long, our main scenario involves working out the nearest resistance along the price channel line in the area of 147.35, where the price can form a divergence and a subsequent reversal with the Marlin Oscillator. The Marlin Oscillator is moving along the zero line on the four-hour chart. The price is between the MACD line and the resistance level of 145.20. Consolidating above it (and in case of strong news, simply overcoming the level) opens the target at 147.35. Yesterday there was a false consolidation of the price below the MACD line, which is also a sign of the price's intention to continue growing further. Relevance up to 04:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323549
The GBP/USD Pair Started A New Round Of Downward Correction

The Cable Market (GBP/USD) Price Will Continue To Decline

InstaForex Analysis InstaForex Analysis 06.10.2022 08:18
Yesterday, the British pound indicated its goal, which it has been striving so hard for the last 7 days - the MACD indicator line of a daily scale. This meeting took place at the level of 1.1500, after which the price turned down. Support at 1.1305 did not allow the price to continue to decline at the first attempt, at the moment the price is consolidating at this level. Moving below it opens up the 1.1170 target, then, when the Marlin Oscillator of the daily scale goes into the negative area, the price will continue to move to the 1.0830 target. On the four-hour chart, the consolidation of the Marlin Oscillator ended with the exit of the signal line downwards. The price is correcting from the first movement from 1.1500. Consolidating under the support opens the 1.1170 target. Further, after overcoming the support of the MACD line (1.1060), the price will continue to decline to the target level of 1.0830. Relevance up to 04:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323551
Breaking Business News: Aaron Rodgers' Shocking Exit, Google's Defense, and Central Banks' Inflation Battle

There Will Be A New Force For The Euro (EUR) To Go Down

InstaForex Analysis InstaForex Analysis 06.10.2022 08:27
The euro fell by 100 points yesterday, returning below the target level of 0.9950 and under the MACD indicator line of the daily scale. The lower shadow of the daily candle worked out the support of 0.9855. We also note that the price reversal occurred from the balance indicator line (moving red), which separates the interests of strategic bulls and bears. From the standpoint of this indicator, it can be seen that the entire growth of 4.5 figures of the last week had a corrective nature of the medium and long-term trends. Now, after the price goes under the nearest support of 0.9855, the next target level at 0.9724 will become available. The Marlin Oscillator is still in the positive area, the market is gathering strength to overcome the support of 0.9855. On the H4 chart, the price divergence with the Marlin Oscillator turned out to be effective. The signal line of the oscillator touched the zero line and lingered for some time in front of it. Leaving the price under 0.9855 will give new strength to the euro to move down.   Relevance up to 04:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323553
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The Pound To US Dollar (GBP/USD) Pair Has Rolled Back Down

InstaForex Analysis InstaForex Analysis 06.10.2022 08:32
GBP/USD 5M The GBP/USD currency pair again traded almost identically to the EUR/USD pair on Wednesday, which further assures us that the reasons for the fall were technical and again covered in the US or specifically related to the dollar. Formally, traders also had reasons to sell the pound on Wednesday, because in the morning a weak index of business activity in the service sector came out in the UK. However, the time of release of this report and the start of the pair's fall do not coincide, and the report itself was not so important and resonant as to provoke such a strong downward movement (250 points). The pound continues to be traded in a very volatile way, which many could already get used to. The pound as a whole rose by more than 1100 points, so a downward rollback is logical. The pair also remains above the key lines of the Ichimoku indicator, so the upward trend continues. We believe that little depends on the macroeconomic background now, global fundamental events and geopolitics are of greater importance. In regards to Wednesday's trading signals, everything was very good. The first buy signal near the 1.1442 level turned out to be false, but the price went in the right direction after its formation of 20 points, so traders had to set Stop Loss to breakeven. The next sell signal near the same level was already correct. After its formation, the pair went down about 200 points and just fell short of reaching the target level of 1.1212. Thus, this position should have been closed manually in the late afternoon. Profit on it amounted to at least 140 points, with which we congratulate everyone. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group opened 18,500 long positions and 10,100 short positions. Thus, the net position of non-commercial traders increased by another 8,400, which is quite a lot for the pound. We could assume that the actions of the big players and the pound's movement have finally begun to coincide, only the report is released with a three-day delay and simply does not include the last three days of trading, when the pound showed growth. The net position indicator has been actively falling again in recent weeks, and the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Now it has begun a new growth, so the British pound can formally count on growth. But, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 106,000 shorts and 59,000 longs open. The difference, as we can see, is still large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 6. Washington may be behind the Nord Stream bombing. Overview of the GBP/USD pair. October 6. The Bank of England is finally confused: to stimulate or tighten? Forecast and trading signals for EUR/USD on October 6. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H On the hourly timeframe, the pound/dollar pair has rolled back down by 250 points, but maintains a new upward trend. Unfortunately, in the long term, the downward trend may well resume, as the Ichimoku indicator line on the 24-hour time frame is above the price and can provide strong resistance to it. However, the chances that the downtrend is still completed are very high. If geopolitics does not spoil everything, the pound may show growth for many months. For October 6, we highlight the following important levels: 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.0905) and Kijun-sen (1.1138) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. Only minor data will be published in the UK and the US on Thursday. UK Construction PMI and US Unemployment Claims. The situation may be similar to yesterday: there will be formal grounds for a certain behavior of the market, but it is far from certain that they will cause a new strong movement. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group. Relevance up to 02:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323543
The EUR/USD Pair Chance For The Further Downside Movement

The EUR/USD Pair: Has The Euro (EUR) A Chance To Rise?

InstaForex Analysis InstaForex Analysis 06.10.2022 08:43
EUR/USD 5M The EUR/USD pair began to correct sharply on Wednesday. It had formal grounds for this, as a weak report on business activity in the service sector of the European Union was released in the morning, and in the afternoon we received pretty good data on the US labor market and good indexes of business activity in the service sector. Thus, all the reports of the past day were in favor of the dollar. However, we do not believe that only these reports have provoked a strong fall in the pair. First, the fall began an hour before the release of the first report. Secondly, all the reports of the day, except perhaps the ISM index, were not so strong and important as to provoke a fall of 150 points. We believe that after several days of strong growth, it is time to correct slightly, so the reasons are mostly technical. Despite the fact that the pair has consolidated below the rising channel, it remains above the lines of the Ichimoku indicator, so the upward trend continues. The channel has a very large angle of inclination and can change to a quieter angle. So far, we expect a new growth of the euro if the price manages to stay above the Kijun-sen and Senkou Span B. Two trading signals were formed on Wednesday, but both are quite strong. The first sell signal was not formed at the very beginning of the downward movement, however, it should have been worked out, because it was unambiguous. After opening short positions, the price managed to consolidate below the level of 0.9877, after which it returned to it. Somewhere in this area, it was possible to close the position manually, since there was no signal to buy. Profit amounted to at least 70 points. COT report: The Commitment of Traders (COT) reports on the euro in 2022 can be entered in the textbook. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then they showed a bearish mood for several months, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have said, because the demand for the US dollar remains high. Therefore, even if the demand for the euro is growing, the high demand for the dollar does not allow the euro itself to rise. During the reporting week, the number of long positions for the non-commercial group increased by 2,000, while the number of shorts decreased by 1,800. Accordingly, the net position grew by about 200 contracts. This is very small and this fact does not matter much, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 34,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 6. Washington may be behind the Nord Stream bombing. Overview of the GBP/USD pair. October 6. The Bank of England is finally confused: to stimulate or tighten? Forecast and trading signals for GBP/USD on October 6. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The upward trend is still preserved on the hourly timeframe due to the Ichimoku indicator lines, which are still below the price. This week there will be at least one more important report - NonFarm Payrolls on Friday - so the euro has a chance to fall below these lines. At the same time, weak US statistics on Friday may push the pair up, which is in line with the current trend. We highlight the following levels for trading on Thursday - 0.9553, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, as well as Senkou Span B (0.9796) and Kijun-sen lines (0.9828). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union will release a report on retail sales for August, and in the US we only have a report on applications for unemployment benefits. Neither the first nor the second are important, so reaction to them may be extremely weak or absent altogether. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323541
Hong Kong’s Hang Seng Had Its Best Month | EU Inflation Slowed

Beijing Marathon Came Back, The New Zealand Dollar (NZD) Rose Sharply

Saxo Bank Saxo Bank 06.10.2022 09:04
Summary:  Markets gyrated rather wildly yesterday as a strong September ISM Services saw US treasury yields jumping back higher and challenging the narrative that has developed this week of “central bank pivot.” Alas, equities and sentiment were able to overcome the surge in yields and the US dollar interestingly followed the direction of sentiment rather than yields. The next test for sentiment, the US dollar and global yields will be tomorrow’s US September jobs report ahead of earnings season, which will kick off next week.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities were selling off yesterday with S&P 500 futures declining as much as 1.8% before erasing most of the losses which was a strong given the US 10-year yield rallied higher to 3.75%. The ISM Services Index was incredibly strong yesterday suggesting the US services sector remaining robust despite tighter financial conditions which maybe reduces the risk of negative earnings surprises during the Q3 earnings season. This morning S&P 500 futures are trading above the 3,800 level again with the 3,820 level being the natural resistance level on the upside to watch. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index took a pause after yesterday’s 5.9% rally. I traded lower in the morning but pared losses after returning from the mid-day break to little change from the previous close. Wharf Real Estate (01997:xhkg) and Cathay Pacific (0293:xhhg) were among the best performers, up by 4.8% and 3.5% respectively. Automakers were laggards, with leading names falling from 2.5% to 7%. The stock markets in Shanghai and Shenzhen remain closed for a national holiday. USD and US yields/risk sentiment The US dollar very correlated with the direction in risk sentiment yesterday, and less so with the direction in treasury yields, which rose quite sharply yesterday, at first helping to support the greenback as sentiment was spooked by the comeback in yields as strong data challenges the “central bank pivot” narrative afoot this week. But the big USD weakened later in the session as US equities closed near the highs and followed through weaker still overnight on a further brightening of sentiment. EURUSD is a microcosm of the general USD direction and will be a bellwether pair to watch after parity was nearly touched over the last couple of sessions before the action swooned to below 0.9850 briefly yesterday and a subsequent rally retraced about half of the sell-off into this morning. Gold (XAUUSD) Gold trades higher after briefly dipping to and finding support at $1700 during Wednesday’s round of fresh dollar strength. Supported by hopes that central banks will begin to ease away from the tightening of the last many months after at least one weak US data point this week, saw yields a bit lower and precious metals surging. The move through the key 1,680-1,700 area on Monday will be further solidified on a break above 1,725, the 50-day moving average, and not least the recent high at 1735. OPEC’s decision to cut production thereby forcing prices of energy higher will only add to concerns about central banks' ability to get inflation under control before an economic slowdown forces a rethink on rates, a development that may end up adding additional support to gold and silver. Crude oil (CLX2 & LCOX2) Crude oil rallied after OPEC+ producers as speculated, decided to cut their baseline production by 2 million barrels per day. A decision that given the undercompliance from several major producers, including Russia, Nigeria and Angola would likely translate into a somewhat lower impact of around 1 million barrels per day. Cutting production at this time is somewhat controversial given the fact the price has not fallen much below the 90-100 Brent range that seems to be acceptable to most producers. What makes this cut even more difficult to understand from a supply and demand perspective is the comment from Novak that Russian production may fall further over the coming months. This decision risks agitating the US while potentially leading the FOMC to keep tightening for longer as inflation will become stickier. The result being a global economic slowdown that may end up taking longer to reverse. HG Copper (HGZ2) Copper as well as zinc trade higher after the London Metal Exchange said it would restrict deliveries from Ural Mining & Metallurgical. The industry has been grappling with the question of how to handle supplies from Russia - a major producer of aluminum, nickel and copper - since the invasion of Ukraine in February, and the debate has intensified over the past month.  Copper traded in New York trades near a one-month high at $3.57 with the news offsetting continued worries about demand amid a global economic slowdown, not least in China and Europe. Next level of interest being the September high at $3.69. US treasuries (TLT, IEF) US treasury yields jumped above 3.75% at one point yesterday, up 20 bps from the recent lows, in the wake of a stronger than expected Sep. US ISM Services survey and as the private ADP payrolls came in solidly in line with expectations, with upward revisions. The cycle high of 4.00% that was posted during the wipeout in the UK gilt market is the next focus if the bond market remains weak. What is going on? NZD jumps overnight after mixed reaction to latest RBNZ rate hike The NZD rose sharply against the US dollar, challenging the 0.5800 area this morning after a pump-and-dump reaction to the RBNZ’s latest 50 basis point rate hike. Likewise, AUDNZD traded heavily and back toward the pivotal 1.1250 area that was a major resistance point on the way up. Improved global sentiment may be a driver here, as was a rather rosy speech on the prospects for New Zealand avoiding a recession from NZ Deputy Prime Minister Robertson overnight. Better than expected US September ADP payrolls change…but this does not matter much In September, U.S. businesses added 208k jobs according to the ADP report. This is more than the consensus of +200k and higher than in August (revised up from +132k to +185k). The biggest gain was in trade, transportation and utilities (147k) ahead of professional and business services and education. On the downside, annual pay growth for job changers went through its biggest deceleration in the three-year history of the data (from 16.2 % to 15.7 %). Should we be worried about this data? Not much. The ADP report hasn’t been the best gauge of the U.S. labor market (even with the recent change in the methodology). Strong September US ISM Services survey challenges “pivot” narrative US ISM services softened slightly to 56.7 in September from 56.9 previously, but was far better than expectations of 56.0. New orders slowed to 60.6 from 61.8, but that is a very strong reading. Two of the more positive points in the survey were: the ISM Services employment jumped in September, from 50.20 in August to 53 points. The second one: the services Prices Paid has fallen six months in a row, to the lowest level since January 2021. This means inflation is likely to move lower. This is a rather positive report after a number of negative statistics earlier this week (sharp drop in ISM Manufacturing employment, much lower job openings and bad construction spending).  Hawkish Fed refrain remains the same The Fed's Daly (voter in 2024) noted that the Fed is resolute at increasing rates into restrictive territory before holding rates there for a while, pushing back on talk of a Fed pivot. She added that she doesn’t see a rate cut happening next year “at all”. Raphael Bostic (2024 voter) sounded similar notes, saying he favors lifting the benchmark to between 4% and 4.5% by the end of this year, and hold it there. The November 6 Beijing Marathon marks the return of large public events The 2022 Beijing Marathon is scheduled for November 6 and registration has started. The event will allow 30,000 runners to compete in Beijing after being canceled in 2020 and 2021. It will be the largest public event being held in the Chinese capital city since the Winter Olympics. Residents from other mainland Chinese cities other than Beijing however are not allowed to attend. Residents of Taiwan, Hong Kong, and Macao, and foreigners plus invited “elite” athletes are allowed to participate. The US plans to further restrict China’s access to its semiconductor technology It is reported that the US Commerce Department will launch additional regulations this week to further restrict the exports of semiconductor technologies to China. What are we watching next? Risk sentiment recovers despite new surge in yields on strong US data – next test for treasuries/USD/risk sentiment is on September jobs report tomorrow Equity markets launched an impressive recovery yesterday despite the fresh surge in US treasury yields after the release of the strong ISM Services survey. It's hard to believe the comeback can extend aggressively if strong jobs data tomorrow leads to a further surge in yields. The Sep. Nonfarm payrolls change is expected at +260k after +315k in August and the Average Hourly Earnings are seen rising +0.3% MoM and +5.0% YoY – the latter would be the slowest pace of wage growth since December. Fed speakers up this evening Fed members have been rather consistent with a drumbeat of calls for staying on course with further rate tightening. In light of the recent batch of mixed data that has helped push US 2-year treasury yields some 20 basis points lower from their nearly 4.25% peak, it will be interesting to watch the next few Fed speakers of note, which today includes two FOMC voters who are speaking more generally on the economic outlook, including Cleveland Fed President Mester and the Board of Governors’ Waller – see calendar below. Earnings to watch Today’s earnings focus is Conagra Brands which is US processed foods company. Analysts expect revenue growth of 7% y/y in FY23 Q1 (31 August) and stable operating margin of 17.6%. The company has seen its growth rate slowly increase over the previous quarters and with the ongoing cost-of-living crisis there might be an upside surprise in today’s earnings result. Today: Seven & I, Conagra Brands, Constellation Brands, McCormick & Co Economic calendar highlights for today (times GMT) 0830 – UK Sep. Construction PMI 1130 – US Sep. Challenger Job Cuts 1130 – ECB Meeting Minutes 1230 – US Weekly Initial Jobless Claims 1250 – US Fed’s Mester (Voter) to speak 1300 – Poland Central Bank governor Glapinski press conference 1315 – US Fed’s Kashkari (voter in 2023) to speak 1400 – Canada Sep. Ivey PMI 1430 – US Weekly Natural Gas Storage Change 1535 – Canada Bank of Canada Governor Macklem to speak 1700 – US Fed  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-6-2022-06102022
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

NZD/USD Pair: The Rebound Has Gained And The Bias For Today Is On The Upside

TeleTrade Comments TeleTrade Comments 06.10.2022 09:40
Further consolidation within the 0.5610-0.5810 range looks likely in NZD/USD in the short term, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group’s Global Economics & Markets Research. Key Quotes 24-hour view: “Yesterday, we held the view that NZD ‘is likely to advance further but the chance of a break of the major resistance at 0.5810 is not high’. While NZD rose to a high 0.5805, it plummeted to 0.5664 in NY trade before rebounding quickly to end the day at 0.5746 (+0.24%). The rebound has gained some momentum and the bias for today is on the upside. However, a break of the major resistance at 0.5810 is unlikely. Support is at 0.5720, followed by 0.5680.” Next 1-3 weeks: “Our update from Tuesday (04 Oct, spot at 0.5720) still stands. As highlighted, the recent weakness in NZD has stabilized. We view the current price movements as the early stages of a consolidation phase and we expect NZD to trade between 0.5610 and 0.5810 for now.”
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The AUD/USD Pair Is Clearly Growing And Has A Chance To Continue The Trend

TeleTrade Comments TeleTrade Comments 06.10.2022 09:46
A seven-day long consolidation in a 0.6390-0.6547 range is likely to explode sooner. The RSI (14) has shifted its range to the bullish territory of 60.00-80.00. The AUD/USD pair is advancing firmly right from the initial tick amid an improvement in the risk appetite of the market participants. The asset has reached near Tuesday’s high at around 0.6547 and is expected to overstep the same with sheer confidence as commodity-linked currencies have hogged the limelight. A seven-day long consolidation on an hourly scale after reporting a fresh two-year low at 0.6363 is indicating a bullish reversal ahead. The asset is displaying the balanced auction profile in a 0.6390-0.6547 range. The chartered region will be marked as the most auctioned region forward. The aussie bulls have driven the asset above the 50-and 200-period Exponential Moving Averages (EMAs) at 0.6492 and 0.6508, which adds to the upside filters. A formation of a golden cross, which is represented by the bullish cross of 50-and 200-EMAs, will strengthen the aussie bulls further. Meanwhile, the Relative Strength Index (RSI) (14) has shifted its oscillation range from 40.00-60.00 to 60.00-80.00, which indicates that upside momentum has been triggered. Going forward, a break above Tuesday’s high at 0.6547 will drive the asset towards and September 22 high at 0.6670 and September 18 high at 0.6734. Alternatively, a drop below the two-year low at 0.6363 will drag the asset towards the 16 April 2020 low at 0.6264, followed by the round-level support at 0.6100. AUD/USD hourly chart
Oanda's Kenny Fisher talks US dollar against Canadian dollar

Be Careful With Bearish Bets Around The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 06.10.2022 10:01
USD/CAD meets with a fresh supply on Thursday amid the emergence of some USD selling. The overnight rally in oil prices underpins the loonie and further contributes to the downtick. Hawkish Fed expectations could act as a tailwind for the buck and lend support to the pair. The USD/CAD pair extends the overnight pullback from the vicinity of the 1.3700 mark and edges lower through the first half of trading on Thursday. The pair is currently placed near the lower end of its daily trading range, around the 1.3570-1.3575 region, down nearly 0.30% for the day. The US dollar struggles to capitalize on the previous day's solid bounce from a two-week low and meets with a fresh supply, which, in turn, exerts pressure on the USD/CAD pair. A modest downtick in the US Treasury bond yields, along with a recovery in the risk sentiment, further drives flows away from the safe-haven greenback. Apart from this, the recent bullish run in crude oil prices underpins the commodity-linked loonie and contributes to the offered tone surrounding the USD/CAD pair. The black liquid shot to a three-week high after OPEC+ agreed to tighten the global supply and slash production by about 2 million bpd - the largest reduction since 2020. That said, concerns that a deeper global economic downturn will dent fuel demand keep a lid on any further gains for the black liquid. Furthermore, expectations for a more aggressive policy tightening by the Fed should act as a tailwind for the US bond yields and the buck, which, in turn, should offer support to the USD/CAD pair. Fed officials reiterated the US central bank's commitment to getting inflation under control and reaffirmed bets for another supersized 75 bps rate hike at the November FOMC meeting. This warrants caution before placing bearish bets around the USD/CAD pair ahead of the monthly employment details from the US and Canada on Friday. In the meantime, traders on Thursday will take cues from the release of the US Weekly Initial Jobless Claims data and Canadian Ivey PMI. Apart from this, speeches by FOMC members and the Bank of Canada Governor Tiff Macklem should provide some meaningful impetus to the USD/CAD pair later during the early North American session.
AUD Surges on Strong Employment Gains, RBA's Hawkish Outlook

The German Factory Orders Fell Short Of Expectations

TeleTrade Comments TeleTrade Comments 06.10.2022 10:14
German Factory Orders dropped 2.4% MoM in August vs. -0.7% expected. German Factory output fell 4.1% YoY in August vs. -11.4% expected. EUR/USD keeps its range near-daily highs of 0.9926 on the German data. The German Factory Orders fell short of expectations once again in August, suggesting that the manufacturing sector activity is losing additional momentum. Contracts for goods ‘Made in Germany’ fell by 2.4% on the month vs. -0.7% expected and -1.1% last, the latest data published by the Federal Statistics Office showed on Thursday. On an annualized basis, Germany’s Industrial Orders arrived at -4.1% in the reported month vs. -11.4% expected and -13.6% previous. FX implications The shared currency remains unfazed by the disappointing German factory data.  At the time of writing, EUR/USD is adding 0.33% on the day, trading at 0.9915.
US Inflation Rises but Core Inflation Falls to Two-Year Low, All Eyes on ECB Rate Decision on Thursday

Podcast: Review The Market And Consider Whether Bonds Offer Solid Value

Saxo Bank Saxo Bank 06.10.2022 10:43
Summary:  Today we note that the action in yesterday's session seemed to largely shred the central bank pivot narrative, not only because of a robust US ISM Services survey for September, but also as the reaction function across markets, with still resilient equities as yields rose sharply again didn't fit the narrative. We also look at whether bonds are offering solid value here, particularly at the shorter end of the yield curve, discuss Shell's profit warnings yesterday as an interesting harbinger and look at important variables to watch if the Fed is ever to begin pivoting (plot spoiler: not soon). Today's pod features Peter Garnry on equities, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Share Source: https://www.home.saxo/content/articles/podcast/podcast-oct-6-2022-06102022
EUR: Stagflation Returns Amid Weaker Growth and Sticky Inflation

Scary Forecast For The Global Trade And OPEC Cut Production

Swissquote Bank Swissquote Bank 06.10.2022 10:52
It has been another volatile and undecided trading session yesterday. OPEC did cut its oil production target by 2 million barrels per day. It was the biggest cut since 2020, it was expected, it saw a morose reaction by Joe Biden - who said it was ‘shortsighted’, but a well better enthusiasm than what I expected by the oil bulls. Forecast for the global trade and US crude The barrel of US crude ended the session 1.90% higher, yet, the 50-DMA offers haven’t been cleared just yet. The World Trade Organization gave a scary forecast for the global trade next year. The WTO raised its trade growth estimate from 3 to 3.5% for this year, but they slashed their expectation for next year to 1%, from around 3-4%. Yesterday's market sentiment Yesterday, the investor sentiment was rather bearish. The major indices were under a decent selling pressure, following a strong two-day rally. The data from the US was not very Fed-friendly, but it was ok. The ISM services index showed a faster than expected expansion in the US services sector, and the ADP report printed a slightly higher number than the expectations. Now all eyes are on Friday’s NFP number, and wages growth data. In the FX, the dollar index rebounded, the EURUSD and Cable eased. Watch the full episode to find out more! 0:00 Intro 0:26 OPEC cuts, oil rallies… 2:46 …but WTO spoils rally 3:55 US deficit falls on higher exports despite strong oil 5:15 Market update: waiting for the next critical data 8:07 Morgan Stanley maintains overweight for Rivian Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #OPEC #Russia #output #cut #energy #crisis #crude #oil #natgas #stocks #XOM #Cheniere #Chesapeake #US #jobs #ADP #NFP #USD #EUR #GBP #Rivian #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Poland's Retail Trade Improves as Goods Inflation Eases: Outlook for 2023

The Pound To US Dollar (GBP/USD) Currency Pair Is Following The Euro (EUR)

InstaForex Analysis InstaForex Analysis 06.10.2022 11:20
The euro and the pound were declining throughout yesterday's trading day. At first, this was a banal rebound after the previous rapid growth. But then this trend was reinforced and strengthened by unexpectedly good employment data in the United States. Firstly, the previous data was revised upwards from 132,000 to 185,000. Secondly, employment increased by 208,000 against the forecast of 135,000. It seems that the American labor market does not intend to lose momentum and continues to grow. Which, of course, is an extremely positive factor contributing to the further strengthening of the dollar. Employment change (United States): Today, the dollar can continue to strengthen its positions—this time at the expense of European statistics. The rate of decline in retail sales in the euro area should accelerate from -0.9% to -2.2%. And this is a drop in consumer activity, which is the locomotive of the economy. Consequently, the European economy is steadily slipping into a recession, which may well turn out to be quite deep, and most importantly, prolonged. Naturally, against this background, the dollar looks much more attractive than the euro. Well, the pound will simply follow the euro. Retail sales (Europe): The EUR/USD currency pair was actively losing its positions during the past day. As a result, the price rebounded from the parity level, where the quote had recently approached. The pullback lasted until the previously passed level 0.9850, where a stop occurred. For the subsequent decline, the quote needs to stay below 0.9850 for at least a four-hour period. Otherwise, we will continue to move at the peak of the current corrective move. The GBPUSD currency pair, following the euro, entered the pullback stage, returning the quote below the level of 1.1410. At the moment, the pullback has slowed down the formation, but in order for sellers to get further incentive to decline, it is enough to stay below 1.1200. Until then, fluctuation along the level of 1.1410 is possible.   Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323573
Assessing 'Significant Upside Risks to Inflation': Insights from FOMC Minutes

Will There Be A Signal That The Fed May Reduce The Pace Of Rate Growth

InstaForex Analysis InstaForex Analysis 06.10.2022 11:28
Although the employment report from ADP showed that the number of new jobs in the US is increasing, indicating the strength of the economy, stock markets declined as this could mean that the Fed may not ease the pace of interest rate hikes in the coming months. Earlier, many have considered the idea that the state of the labor market could change the stance of the central bank regarding monetary policy. They believe that if the number of new jobs fall steadily, the Fed will see that the economy has slowed down enough for them to start turning down the pace of interest rate increases. But yesterday's data showed non-farm payrolls climbing to 208,000 in September, up from an estimate of 200,000 and August figure of 185,000. Of course, the values from ADP are not official and the market will really act after the release of data from the US Department of Labor tomorrow. But the growth in the number of new jobs will be perceived by the market as a signal that the Fed may reduce the pace of rate growth. In terms of today's market dynamics, there may be a consolidation until the employment data tomorrow show whether the US labor market is still strong or has already begun to experience problems amid high interest rates . Forecasts for today: EUR/USD The pair has not yet overcome the 1.0000 mark. It is likely that before the release of employment data in the US, there will be a consolidation around 0.9830-1.0000. AUD/USD The pair is trading above 0.6520. It may rise to 0.6580 if positive sentiment prevails on markets today.   Relevance up to 08:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323555
CNY Can Appreciate Mildly Through This Year According To Economists At Commerzbank

A Further Weakening Of The US Dollar To Chinese Yuan (USD/CNH) Pair Is Visible

TeleTrade Comments TeleTrade Comments 06.10.2022 11:39
Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group’s Global Economics & Markets Research noted further weakness in USD/CNH should face solid contention around 7.0000. Key Quotes 24-hour view: “Yesterday, we highlighted yesterday that the ‘oversold decline in USD could extend but the major support at 7.0000 is unlikely to come into view’. Our view was not wrong as USD dropped to 7.0128. That said, we did not expect the strong rebound from the low (high has been 7.0929). Downward pressure has eased and USD is likely to trade between 7.0100 and 7.0850 for today.” Next 1-3 weeks: “We continue to hold the same view as yesterday (05 Oct, spot at 7.0400). As highlighted, the risk for USD is on the downside but it remains to be seen if it can break the significant support at 7.0000. Overall, only a breach of 7.1170 (no change in ‘strong resistance’ level from yesterday) would indicate the downside risk in USD has subsided.”
The Downside Of The US Dollar Index Remains Limited

Lots Of Economic Data Would Support The US Dollar (USD)

TeleTrade Comments TeleTrade Comments 06.10.2022 11:34
The US Dollar Index (DXY) hit a 20-year high recently. In the view of economists at HSBC, the USD is likely to continue to be resilient. Fed to continue hiking “Many central banks have delivered rate hikes to fight inflation. In particular, the Federal Reserve delivered its third straight 75 bps hike in September and signalled further sizeable hikes are likely to follow.”  “We believe high US yields, weak global growth, and a fragile risk appetite are likely to remain supportive for the USD.”
Bank Of England Will Probably Be Unable To Avoid A Significant Easing Of Policy

BoE Survey And Expectations Of British Companies For Inflation

TeleTrade Comments TeleTrade Comments 06.10.2022 11:59
The Bank of England’s (BOE) Decision Maker Panel survey of chief financial officers showed on Thursday, British businesses' expectations for consumer price inflation continued its rise in September. Key takeaways “British businesses' expectations for consumer price inflation in one year's time rose to 9.5% last month, up from 8.4% in August.” “Businesses expected output prices to rise by 6.6% in the year ahead, up from expectations of 6.5% in August.” Market reaction GBP/USD remains vulnerable near 1.1300 amid risk-aversion, US dollar rebound and UK financial woes. The spot is down 0.19% on the day.
FX Daily: Asymmetrical upside risks for the dollar today

Forex: US Dollar May Go Up, EUR/USD Expected To Stay Below 1.00

ING Economics ING Economics 06.10.2022 11:59
The dollar downtrend appears to be running out of steam. In our view, a further USD recovery is likely from current levels as markets show reluctance to fully jump in on bets of a Fed pivot. We expect EUR/USD to remain below parity. Elsewhere, central banks in central and eastern Europe have continued to deliver hawkish and dovish surprises Source: Shutterstock USD: Room for further recovery As we had expected, the dollar downtrend has started to prove unsustainable, and we saw a counter-correction in DXY to the 111/112 area yesterday before a stabilisation at 111.00 during a good Asian session for risk. It’s hard to see a clear trigger for the reversal in risk sentiment yesterday, and it probably boiled down to markets not being ready to bet heavily on the Fed pivot story. Markets are also keeping an eye on some “test cases” in the central bank sphere. While the Reserve Bank of Australia slowed the pace of hiking on Tuesday, the Reserve Bank of New Zealand stuck to 50bp increases yesterday, signalling that a 75bp move was considered and that more hikes are on the way. In our view, the latter – hawkish – narrative should prevail for the Fed, ultimately capping the recovery in risk assets and offering widespread support to the dollar. The data calendar in the US is quite light today after yesterday’s ISM Services beat expectations (and partly offset the Manufacturing miss) and ADP labour numbers for September came in at 208k (exp. 200k). While that marks an acceleration from the revised 185k reading for August, it looks like the updated methodology still hasn’t closed the gap with the official payrolls figures, hence limiting the ADP’s predictability power. We have quite a long list of Fed speakers to keep an eye on today: Charles Evans, Lisa Cook, Christopher Waller and Loretta Mester are all set to touch upon the economic and monetary policy outlook in scheduled remarks. We don’t see why the Fed would want to endorse any of the recent dovish re-pricing in tightening expectations – if anything, we could see some comments aimed at pushing back against any pivot speculation. We expect a further dollar recovery into the weekend, with upside risks particularly concentrated around tomorrow’s payrolls release, when DXY may extend gains into the 112-113 area.  Francesco Pesole EUR: Parity is an increasingly relevant level EUR/USD showed some resistance at the 1.0000 level yesterday before falling back down on the dollar’s recovery. Despite the pair having crossed the parity line multiple times recently, that may have increasingly been interpreted as a benchmark level for the broader dollar trend. Considering the reluctance to turn more bullish on the euro into what should be a challenging winter for the eurozone, a sustained recovery to levels above parity in EUR/USD might now only be driven by markets buying more aggressively into the Fed pivot story and/or other drivers offering sustained support to risk assets. For now, we feel comfortable in reiterating our call for EUR/USD to stay pressured into the 0.90-0.95 in the last months of the year. The new pack of sanctions by the EU likely suggest a prolonged stand-off with Russia, while markets await more details on the proposed oil price cap. Today’s European Central Bank minutes will be quite interesting for European rates as they might shed some light on the quantitative tightening discussion and the size of the next rate hike. Still, the meeting-by-meeting approach may reduce the informative power of the minutes today. Francesco Pesole GBP: Tentative signs of normality It looks like the pound has continued to realign with the moves in other European and high-beta currencies, although still displaying residual signs of above-average volatility. If sterling absorbed a large share of the negative news during the post-tax event UK market turmoil, it now appears to be trading a bit too much on the strong side, especially considering that gilt yields and GB credit default swaps remain well above mid-September levels. Today, markets will keep an eye on the Bank of England Decision Maker Panel survey, which collects inflation expectations from company executives, and on a speech by MPC member Jonathan Haskel. We mostly see downside risks for cable from current levels, and expect a drop below 1.10 in the near term. In EUR/GBP, 0.8700 may emerge as an increasingly solid floor over the coming weeks. Francesco Pesole CEE: A region that never ceases to surprise The Polish central bank yesterday decided to leave rates unchanged at 6.75% despite market expectations of a 25bp rate hike. Given the hawkish expectations we discussed yesterday, the Polish zloty has come under pressure and we expect more to come today. The interest rate differential fell by 20bp during yesterday's session alone and we expect today's press conference by governor Adam Glapinski to confirm the dovish tone and increase pressure on FX. We expect the zloty to move higher into the 4.85-4.90 EUR/PLN range. Moreover, the global environment is also negative for the CEE. After a longer period of time, we saw gas prices rising again yesterday, which is not helping the whole region and EUR/USD moved lower again after briefly touching parity. The Romanian central bank, on the other hand, surprised on the hawkish side by delivering a 75bp hike to 6.25% instead of the expected 50bp. The published statement suggests that the central bank is concerned about higher inflation despite a slowing economy, the risks of which have moved up from the August meeting. On the FX side, the Romanian leu saw a slight strengthening in response to the decision, but we do not expect this to make a difference and expect a return to the standard level of just below 4.95 EUR/RON. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Romanian retail sales confirm economic slowdown

Romanian Leu: What A Move By National Bank Of Romania!

ING Economics ING Economics 06.10.2022 12:04
The National Bank of Romania delivered a mild hawkish surprise today, hiking by 75bp to 6.25%, against ING and market expectations of a 50bp hike. We had estimated that the hiking cycle would stop in November at 6.25%, but today’s decision opens the door for the hikes to continue into 2023 with the 7.00% handle now in sight The National Bank of Romania 6.25% Romania's key rate +75bp Higher than expected   In our view, the key to today’s relatively hawkish decision lies in the following statement issued alongside the decision: "According to current assessments, the annual inflation rate will probably stick to an upward path towards year-end, under the impact of supply-side shocks, yet at a visibly slower pace." This means that the National Bank of Romania (NBR) now sees inflation inching higher rather than tanking some 1pp starting in October on base effects. This is indeed a surprise and if that's the case it fully explains today's decision. It also warrants another rate hike in November, for which we currently do not completely overrule our initial 25bp forecast, which would terminate the hiking cycle at 6.50%. Supporting this approach is the regional central bank's behaviour, with Poland, Czech Republic and Hungary all signalling that they are strongly reluctant to initiate more hikes. However, a 50bp hike in November makes more sense given that the NBR sees inflation still on the rise into this year-end. Terminal rate in the 6.5-7.0% range While we still think that there is a high probability (say 30%) of only a 25bp hike in November, it looks more likely for the NBR’s usual sequential approach to prevail and take the key rate to 6.75% in November 2022 and 7.00% in January 2023.  What to expect in rates and FX markets In the bond market, during September, the Romania government bond (ROMGBs) curve moved up about 70bp, resulting in a bear-steepening. The global sell-off has led the curve to its steepest shape since the second half of August, supported by issuance particularly at the belly and long end of the curve. The 10yr yield has reached the 8.50% mark for the first time since July. However, we believe the global sell-off is still not over and the yield still has room to move closer to the 9.00% level. This view is also supported by CEE peers’ comparisons, which make ROMGBs look expensive at the moment. During September, the premium over Polish government bonds has fallen 60bp from local highs. On the other hand, we believe Romania is well positioned in relative terms within CEE for the coming winter and the slowdown in the global economy. Moreover, against its direct competitor Hungary, Romania has the advantage of the absence of EU money issues and benefits from stable FX. In the event of an end to the global sell-off and favourable European economic numbers, we believe ROMGBs are well positioned against peers. On the FX side, the Romanian leu has moved back to 4.95 EUR/RON after a brief excursion to stronger levels and the NBR seems to have the situation fully under control, for now. We do not expect any changes in the short term, however, the global selling pressure on the CEE region is also affecting the RON market. Looking at the Hungarian forint and Polish zloty, we can assume that the NBR's FX defence costs have increased significantly over the last two weeks, indicating that stability cannot last forever. For now, we expect a shift higher in our forecast for the intervention level early next year. Today's hawkish decision eases the NBR's situation in the short term, however, the winter months could bring increased pressure on FX and push the NBR to ease the plunger a little earlier. Read this article on THINK TagsRomanian bonds National Bank of Romania Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Mexico’s Central Bank Surprised Markets With A 50bps Rate Hike Once Again

There Is A High Probability That The Peso (MXN) Will Come Under Pressure

TeleTrade Comments TeleTrade Comments 06.10.2022 13:48
In Mexico, the focus is on inflation data due out tomorrow. A better-than-expected report could put downside pressure on the peso, economists at Commerzbank report. Everything centres on inflation “We expect that for the time being, Banxico will continue its tightening course in line with the Fed. The market clearly agrees, and a glance at the TIIE rates suggests that a lot has already been priced in.” “If tomorrow’s inflation data were to be much more favourable than expected the market might lower its expectations, which would put pressure on the peso.”
GBP/USD Chart: Neutral Momentum and Symmetrical Triangle Pattern Point to Consolidation and Potential Breakout

US Dollar To South Korean Won (USD/KRW) Pair Could Suffer Further Losses

TeleTrade Comments TeleTrade Comments 06.10.2022 13:54
USD/KRW faced stiff resistance near 1444 earlier this week resulting in a sharp decline. The pair could suffer further losses in case support at 1393/84 fails, economists at Société Générale report.  Defending 1393/84 can result in a bounce towards 1426 “USD/KRW is in vicinity to potential support at 1393/1384 representing the daily Kijun line. Defending this zone can result in a bounce towards 1426, the 61.8% retracement of the pullback and 1444. It would be interesting to see if the pair can re-establish beyond this hurdle.”  “In case the support at 1393/1384 gets violated, a retest of 50-DMA near 1360 is likely.”
Technical Outlook Of The EUR/JPY Pair Movement In Short Term

The EUR/JPY Pair: Maintain The Rebound From Last Week's Lows

TeleTrade Comments TeleTrade Comments 06.10.2022 13:59
EUR/JPY regains some buying interest after Wednesday’s retracement. Further upside is expected to retarget the 144.00 mark in the near term. EUR/JPY partially reverses the recent pullback and looks slightly bid above the 143.00 mark on Thursday. The continuation of the rebound from last week’s lows remains well in place despite Wednesday’s knee-jerk. Against that, if the cross extends the breakout of the weekly top at 144.04 (September 20), it could then dispute the 2022 high at 145.63 (September 12). In the meantime, while above the key 200-day SMA at 136.10, the constructive outlook for the cross should remain unchanged. EUR/JPY daily chart  
EUR/USD Trading Outlook: Staying Range-Bound Amidst Market Reluctance and Limited Dollar Recovery Prospects

The Australian Dollar To New Zealand Dollar (AUD/NZD) Pair Is Trading With A Downtrend

TeleTrade Comments TeleTrade Comments 06.10.2022 14:14
AUD/NZD continued to trade with a heavy downside bias amid growing policy divergence between the Reserve Bank of Australia and the Reserve Bank of New Zealand. Economists at OCBC Bank maintain a short bias targeting 1.12. Risks remained skewed to the downside “RBNZ’s accompanying MPS was slightly more hawkish than expected as it noted that the MPC considered 50, 75 bps at this meeting; core CPI is ‘too high’ and lower NZD if sustained poses further upside risk to CPI.” “We maintain our tactical short play on AUD/NZD, targeting 1.12, 1.1050 objectives.” “Daily momentum is bearish while RSI fell. Risks remained skewed to the downside.” “Support at 1.1240, 1.1210 levels.” “Resistance at 1.1305 (21 DMA), 1.1380 levels.”
Mexican Rate Spread: Tight vs. Central Bank's Rate Spread and Implications for Dis-inversion

The Euro To British Pound (EUR/GBP) Pair Weakness Is Slowing

TeleTrade Comments TeleTrade Comments 06.10.2022 14:02
EUR/GBP weakness is slowing. Analysts at Credit Suisse look for a floor above support at 0.8585/57, with a break above 0.8832/52 needed to suggest the sell-off is over. Close below 0.8657 would suggest a more concrete decline is underway “The decline is showing signs of slowing ahead of what we see as more important support at the rising 55-day average, September low and uptrend from August at 0.8585/57. Resistance is seen at 0.8778 initially, with a break above 0.8832/52 still needed to suggest the worst of the sell-off may have been seen for strength back to 0.8973/81 initially.” “A close below 0.8657 though would suggest a more concrete decline is underway, opening the door to a test of the key rising long-term 200-day average, now at 0.8473.”
Warsaw Stock Exchange SA Approves Dividend Payout: Neutral Impact Expected

The US Dollar's (USD) Upward Momentum Continues

InstaForex Analysis InstaForex Analysis 06.10.2022 14:27
American macro statistics published on Wednesday turned out to be positive and managed to support the dollar. It rose on Wednesday, and its DXY index added 0.85% on the trading day. As of this writing, DXY futures are trading near 111.10, up 114 points from Tuesday's low this week. According to Automatic Data Processing (ADP), U.S. private sector employment rose by 208,000 in September against market expectations of +200,000 growth and the previous value for August of +185,000, revised from +132,000. The ADP commented on the data, stating that "those who stayed at work saw a rise in wages, while those who changed jobs saw a decrease in annual wage growth in September compared to August." Although the ADP report does not have a direct correlation with Non-Farm Payrolls, it still has a fairly strong influence on the dollar dynamics, and the growth of its indicators has a positive effect on the quotes of the American currency. Other reports (from S&P Global and ISM) were also positive for the dollar. According to the data presented, business activity in the US services sector continued to grow in September, although slightly slower than in August. The Services PMI (from ISM), although it fell to 56.7 from 56.9, was better than market expectations at 56. The Employment Index (by ISM) improved to 53 from 50.2. According to the ISM Services Business Survey Committee, "the services sector saw a slight slowdown in September due to slower business activity and new orders," but "improvements are being seen in terms of supply chain efficiency, operating capacity and availability of materials "—indicators remain "less than ideal". In turn, S&P Global said that "in September, there were encouraging signals that business conditions may begin to improve." Now, market participants will wait for the publication on Friday (at the beginning of the American trading session) of the report of the Department of Labor with data on the US labor market for September. Previous report values (average hourly wages / new jobs created outside the agricultural sector / unemployment rate): +0.3% in August, +0.5% in July, +0.3% in June, May and April , +0.4% in March, 0% in February, +0.7% in January 2022 / 0.315 million in August, +0.528 million in July, +0.372 million in June, +0.390 million in May, +0.428 million in April, +0.431 million, +0.678 million in February, +0.467 million in January 2022 / 3.7% in August, 3.5% in July, 3.6% in June, May, April and March, 3, 8% in February, 4.0% in January 2022. Forecast for September: +0.3% / +0.250 million / 3.7%, respectively. The indicators can be called, if not strong, then very positive. At the same time, unemployment remains at minimal levels. It should be noted that market participants are waiting for further decisive steps from the Fed towards tightening monetary policy. Recent hawkish comments from Fed officials have revived expectations for another big rate hike in November. The US dollar index (DXY) remains bullish, and market participants, according to CME Group, estimate the likelihood of a 75 basis point Fed hike in November at almost 70%. Today's economic calendar will include new speeches by FOMC officials and a report from the Department of Labor with data on the dynamics of the number of applications for unemployment benefits. Therefore, the volatility in dollar quotes will increase again at 12:30, 12:50, 17:00, 21:00, 22:30. As we noted in our recent review, "the range of DXY fluctuation over the past partial 2 weeks was 4.34%. This is a fairly strong downward correction of the dollar." Now the dollar index (reflected as CFD #USDX in the MT4 trading terminal) is trying to resume its upward momentum, pushing off a 2-week low below 110.00. Despite a rather strong correction, the dollar's upward momentum continues, pushing the DXY towards more than 20-year highs near 120.00, 121.00. The breakdown of short-term resistance levels 111.07, 111.75 will be the first signal that the dollar and the DXY index will return to growth. Support levels: 111.00, 111.07, 110.26, 109.40, 105.55, 103.80 Resistance levels: 111.75, 112.50, 114.00, 114.74, 115.00   Relevance up to 12:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323603
New Zealand Dollar Lost 8.5% In September And Current Circumstances May Not Play In Favor Of NZD

Ukrainian War And Aggresive Federal Reserve Don't Play In Favor Of New Zealand Dollar

Kenny Fisher Kenny Fisher 06.10.2022 14:44
NZD/USD started the day with gains but has reversed directions. The New Zealand dollar is trading at 0.5707, down 0.52%. RBNZ raises rates by 0.50% As expected, the Reserve Bank of New Zealand delivered a 0.50% hike, bringing the benchmark to 3.50%, its highest level since 2015. The RBNZ has now hiked rates at eight consecutive meetings and even discussed a super-size 0.75% increase at today’s meeting. The RBNZ has been aggressive with its rate-tightening cycle, and there’s likely more to come. The rate statement noted that “core consumer inflation is too high” and the labour market remains tight, a signal that the central bank will continue to tighten until inflation has peaked. This means that the November meeting will likely bring a rate hike of 0.50% or 0.25%, depending on economic data and the inflation picture. Inflation hit 7.3% in Q2, up from 6.9 in Q1. One of the dangers of a steep rate-tightening cycle is choking off economic growth and Moody’s rating agency said after today’s rate hike that a soft land was “increasingly unlikely”. The RBNZ might disagree, pointing to a 1.7% gain in GDP in Q2 and a robust labour market. The economy has proven strong enough to bear sharp rate hikes and Governor Orr is looking for a peak in inflation before easing up on rates. September was a disaster for the New Zealand dollar, which plunged a staggering 8.5% and fell to its lowest level since March 2020. NZD/USD has rebounded 2.0% in October, but the currency faces significant headwinds. The escalating conflict in Ukraine, which has seen President Putin annex 15% of Ukrainian territory, and a hawkish Federal Reserve are likely to continue weighing on the New Zealand dollar in the short term. NZD/USD Technical NZD/USD is testing support at 0.5712. Below, there is support at 0.5639 There is resistance at 0.5829 and 0.5902 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Analysis Of The AUD/USD Commodity Currency Pair's Price

Will The AUD/USD Currency Pair Remain In The Downtrend Zone

InstaForex Analysis InstaForex Analysis 07.10.2022 08:00
Yesterday, the Australian dollar showed a strong fall from the target level of 0.6515 to the target level of 0.6385. The lower shadow did not reach the descending line of the price channel by several points, but taking into account fluctuations, errors in the chart, we can accept the target as worked out, since after it the price rebounded upwards. Also, the signal line of the Marlin Oscillator reacted to the price surge with a slight upward reversal. Data on employment in the US will be released today. The forecast for new jobs in the non-agricultural sector is 250,000, which is a very good indicator with an unemployment rate of 3.7%. As a result, we are waiting for the price to overcome the support of 0.6385, then the consistent development of the supports of the price channel 0.6360 and 0.6310. On a four-hour timescale, the price consolidated under both indicator lines, under the target level of 0.6439. The Marlin Oscillator is already firmly established in the downtrend area.       Relevance up to 04:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323666
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Cable Makret (GBP/USD) And Forecasts Of Consulting Companies

InstaForex Analysis InstaForex Analysis 07.10.2022 08:09
The pound fell 167 points yesterday. The 1.1170 target level was worked out, and the pound started today below it, the price is set to continue the decline to the deep target of 1.0828 – to the green price channel line. The signal line of the Marlin Oscillator returned to the territory of the downward trend. Ratings agency Fitch downgraded the UK's AA rating outlook from stable to negative. Consulting companies have already begun to more closely predict the value of the pound at parity with the dollar, which is being spread by the media. The price is consolidating under the level of 1.1170 on the four-hour chart. An intermediate target on the way to 1.0828 is created by the MACD line (1.1058). Consolidating below it will raise the price's determination to reach 1.0828. The Marlin Oscillator looks stable in the negative area.   Relevance up to 04:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323668
The EUR/USD Pair Has A Potential For Drop

The EUR/USD Pair: The Euro (EUR) Is Falling Even Faster

InstaForex Analysis InstaForex Analysis 07.10.2022 08:19
Yesterday the euro successfully overcame the support of 0.9855 and rushed towards the support of 0.9724. The euro is declining even faster than its growth in recent days. Consolidation under 0.9724 opens the 0.9520 target. Marlin Oscillator fixed in negative territory. The US employment data for September will be released today. The forecast for new jobs in the non-agricultural sector is 250,000, which is a very good indicator with an unemployment rate of 3.7%. The markets are seriously tuned in to such data, as yesterday all dollar assets fell in price, including commodities and stocks. The price is preparing to attack the support of the MACD line on the four-hour chart. The MACD line itself is approaching the target level of 0.9724, so the price level is of key importance. The Marlin Oscillator is developing in the downward trend area.   Relevance up to 04:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323670
Asia Morning Bites: Focus on Regional PMI Figures, China's Caixin Manufacturing Report, and Upcoming FOMC Minutes and US Non-Farm Payrolls"

Chevron Corp Was The Top Gainer Among The Components Of The Dow Jones Index

InstaForex Analysis InstaForex Analysis 07.10.2022 08:31
At the close on the New York Stock Exchange, the Dow Jones fell 1.15%, the S&P 500 fell 1.02%, and the NASDAQ Composite fell 0.68%. Chevron Corp was the top gainer among the components of the Dow Jones index today, up 2.89 points or 1.82% to close at 161.42. Quotes of Caterpillar Inc rose by 0.43 points (0.24%), closing the session at 178.81. Home Depot Inc rose 0.54 points or 0.19% to close at 290.39. The losers were 3M Company shares, which lost 4.05 points or 3.52% to end the session at 111.12. International Business Machines was up 2.79% or 3.51 points to close at 122.23 while Walgreens Boots Alliance Inc was down 2.74% or 0.91 points to close at 32.25. Among the S&P 500 index components gainers today were DexCom Inc, which rose 4.53% to hit 95.21, APA Corporation, which gained 4.15% to close at 42.20, and Occidental Petroleum Corporation, which rose 4.07% to end the session at 70.50. The biggest losers were shares of Carnival Corporation, which shed 6.19% to close at 6.97. Shares of SolarEdge Technologies Inc lost 5.96% to end the session at 220.27. Shares of Generac Holdings Inc fell 5.59% to 168.69. Leading gainers among the components of the NASDAQ Composite in today's trading were Green Giant Inc, which rose 168.57% to 1.88, Atlis Motor Vehicles Inc, which gained 95.45% to close at 24.49. as well as shares of InVivo Therapeutics Holdings Corp, which rose 83.03% to close the session at 7.98. The biggest losers were Jowell Global Ltd., which shed 45.36% to close at 1.53. Shares of Cyclerion Therapeutics Inc lost 37.57% to end the session at 0.59. Quotes of Top Ships Inc decreased in price by 35.22% to 6.40. On the New York Stock Exchange, the number of securities that fell in price (2114) exceeded the number of those that closed in positive territory (997), while quotes of 125 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,093 stocks fell, 1,655 rose, and 252 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 6.90% to 30.52. Gold futures for December delivery added 0.07%, or 1.20, to $1.00 a troy ounce. In other commodities, WTI crude for November delivery rose 1.30%, or 1.14, to $88.90 a barrel. Futures for Brent crude for December delivery rose 1.57%, or 1.47, to $94.84 a barrel. Meanwhile, on the Forex market, EUR/USD fell 0.87% to 0.98, while USD/JPY edged up 0.35% to hit 145.13. Futures on the USD index rose 1.03% to 112.15.   Relevance up to 05:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/295838
The EUR/USD Price Failed To Exhibit A Strong Trending Movement

How Today's Reports May Affect The Euro-Dollar (EUR/USD) Pair

InstaForex Analysis InstaForex Analysis 07.10.2022 08:33
EUR/USD 5M The euro/dollar pair resumed its downward movement on Thursday and by the end of the day was near the Senkou Span B line. Thus, it is now separated from the resumption of the downward trend by one line, and on the 24-hour TF the euro did not overcome the critical line. More precisely, consolidation above Kijun-sen occurred, but the next day the pair returned to the area below this line. Therefore, as of the moment, the probability of the resumption of the downward trend is very high. No important statistics published in the US or the European Union on Thursday. And yet, the pair fell 140 points from the high of the day. Thus, traders successfully sold the euro even without any reason. And this is already a very bad sign for the euro. Recall that the fundamental and geopolitical backgrounds remain very bad for all risky assets and currencies, so we will not be at all surprised if the euro hits its 20-year lows a few more times this year. It again corrected to a value close to 400 points. Three trading signals were formed yesterday. First, the pair bounced twice from the level of 0.9877, and then overcame it and the critical line. Therefore, traders could open one long position, which closed at a loss of about 35 points, and one short position, which could be closed at a profit of about 50 points, as the price surpassed the level of 0.9813 and spent the rest of the day below it without forming buy signals. The Senkou Span B line kept it from falling further. COT report: The Commitment of Traders (COT) reports on the euro in 2022 can be entered in the textbook. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then they showed a bearish mood for several months, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have said, because the demand for the US dollar remains high. Therefore, even if the demand for the euro is growing, the high demand for the dollar does not allow the euro itself to rise. During the reporting week, the number of long positions for the non-commercial group increased by 2,000, while the number of shorts decreased by 1,800. Accordingly, the net position grew by about 200 contracts. This is very small and this fact does not matter much, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 34,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 7. The European Union has introduced the eighth package of sanctions against the Russian Federation. We are waiting for a new fall of the euro? Overview of the GBP/USD pair. October 7. Moscow is ready to resume gas supplies via the surviving Nord Stream line, Germany is against it. Forecast and trading signals for GBP/USD on October 7. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The upward trend is still preserved on the hourly timeframe due to the lines of the Ichimoku indicator. If the pair consolidates below the Senkou Span B, it is almost guaranteed to drop back to 0.9553 and renew its 20-year low. Of course, today the US statistics, in particular the NonFarm Payrolls report, can ruin everything, but it is not guaranteed to be bad! It can support the US currency or be neutral in value. We highlight the following levels for trading on Friday - 0.9553, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, as well as Senkou Span B (0.9796) and Kijun-sen lines (0.9867). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. There will be no important events in the European Union. But reports on unemployment (which may continue to grow) and Nonfarm (which may continue to decline) will be released in America. If the report values turn out to be worse than the forecasts, it will be possible to wait for the pair to roll back upwards. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323658
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

The British Pound (GBP) Was Again Very Eloquent

InstaForex Analysis InstaForex Analysis 07.10.2022 08:41
GBP/USD 5M The GBP/USD currency pair also continued its downward movement on Thursday and consolidated below the critical line. Thus, the euro and the pound again traded almost identically, which no longer surprises anyone. The only difference is that the pound managed to rise by 1100 points in recent weeks, but before that it had fallen by the same amount. So the status quo has been restored. Only the index of business activity in the UK construction sector can be distinguished among the macroeconomic statistics on Thursday, but it is unlikely that it was the reason for the pound's fall by 250 points from the high of the day. The pair remains above the important Senkou Span B line on the hourly timeframe, and above the critical Kijun-sen line on the 24-hour timeframe. Therefore, at the moment, it retains good chances for the resumption of the upward movement, followed by the formation of a global upward trend. However, strong Nonfarms on Friday and the general negative geopolitical background may return the bears to the market, and the pair to its absolute lows. From a technical point of view, the probability of the end of the global downward trend is high, but geopolitics can ruin everything. In regards to Thursday's trading signals, everything was fine. Two good sell signals were formed at the beginning of the European trading session, which should be worked out. In the future, the Kijun-sen line could spoil everything, but the fall still continued and ended much below the level of 1.1212. Therefore, traders could get at least 145 points of profit on the second short position. The first one closed at breakeven by Stop Loss. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group opened 18,500 long positions and 10,100 short positions. Thus, the net position of non-commercial traders increased by another 8,400, which is quite a lot for the pound. We could assume that the actions of the big players and the pound's movement have finally begun to coincide, only the report is released with a three-day delay and simply does not include the last three days of trading, when the pound showed growth. The net position indicator has been actively falling again in recent weeks, and the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Now it has begun a new growth, so the British pound can formally count on growth. But, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 106,000 shorts and 59,000 longs open. The difference, as we can see, is still large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 7. The European Union has introduced the eighth package of sanctions against the Russian Federation. We are waiting for a new fall of the euro? Overview of the GBP/USD pair. October 7. Moscow is ready to resume gas supplies via the surviving Nord Stream line, Germany is against it. Forecast and trading signals for EUR/USD on October 7. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair rolled back down by 350 points on the hourly timeframe, but at the same time maintains an upward trend. Unfortunately, in the long term, the downward trend may well resume, as the Senkou Span B line of the Ichimoku indicator on the 24-hour timeframe is above the price and can provide strong resistance to it. Nevertheless, the chances that the downward trend is still completed are very high, but now it is vital for the pound to stay above the critical line on the 24-hour timeframe. If geopolitics does not spoil everything, the pound may show growth for a long period of time. We highlight the following important levels on October 7: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.0905) and Kijun-sen (1.1258) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. No important events are scheduled for Friday in the UK, while the most important reports on unemployment and Nonfarm will be released in the US. A reaction to them must follow and could turn out to be very strong. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323660
The USD/CHF Pair Returned To Its Previous Three-Day Recovery

The USD/CHF Pair Has Slipped Below The Critical Support

TeleTrade Comments TeleTrade Comments 07.10.2022 09:08
USD/CHF has dropped below 0.9900 amid subdued performance by the DXY. The risk-off tone has charged back as odds for Fed’s 75 bps rate hike have soared. The mega event of the US NFP will provide further direction to the FX domain. The USD/CHF pair has slipped below the critical support of 0.9900 after sensing a loss in upside momentum. On a broader note, the asset is oscillating in a range of 0.9887-0.9913 and is expected to deliver an explosion of the same. The asset has turned sideways, following the footprints of the US dollar index (DXY), as investors are awaiting the release of the US Nonfarm Payrolls (NFP) for making an informed auction. Meanwhile, the market sentiment has turned negative sharply as S&P500 has surrendered its entire pullback. Meanwhile, bets for a fourth consecutive 75 basis points (bps) rate hike by the Federal Reserve (Fed) have soared dramatically. As per the CME Fedwatch tool, the odds advocating a 75 bps rate hike are 75.9%, higher than Thursday’s figure of 66%. However, the US dollar index (DXY) has failed to capitalize on the catalyst and has continued its lackluster performance.   On the economic data front, the US NFP is expected to land at 250k, lower than the prior release of 315k. A continuation of monetary policy tightening by the Fed is resulting in a downbeat consensus. Due to higher interest rates, firms have postponed their capacity expansion plans. Also, weaker demand by households has forced producers to avoid full-capacity utilization. The whole structure is responsible for a decline in employment generation numbers. On the Swiss franc front, investors are awaiting the release of the Swiss Unemployment Rate. The Swiss jobless rate is expected to remain steady at 2.1%.
The USD/CAD Pair: US Dollar (USD) Bulls Will Put Assets To A New Two-Year High

The USD/CAD Pair: US Dollar (USD) Bulls Will Put Assets To A New Two-Year High

TeleTrade Comments TeleTrade Comments 07.10.2022 09:32
A formation of a bullish flag is setting a base for recording fresh two-year highs around 1.4000. Market sentiment has turned negative which supports the greenback’s appeal. The RSI (14) is aiming to enter into the bullish range of 60.00-80.00. The USD/CAD pair has rebounded firmly after hitting an intraday low of 1.3726 in the Tokyo session. The asset is oscillating around 1.3750, at the press time, and is expected to overstep the same confidently as the market sentiment has turned extremely sour amid soaring hawkish Federal Reserve (Fed) bets. Also, the S&P500 has eased off its entire gains recorded in the Tokyo session. On a four-hour scale, the asset is forming a Bullish Flag pattern that signals an impulsive bullish wave after the breakout of the consolidation. Usually, the consolidation phase indicates a most auctioned region where those investors place bets who prefers to enter an auction after the establishment of an upside bias. Also, investors add more longs as they see a continuation of the uptrend after a time-corrective pause. It is worth noting that the 20-and 50-period Exponential Moving Averages (EMAs) have defended their bearish crossover at around 1.3600, which indicates that the upside is intact. Meanwhile, the Relative Strength Index (RSI) (14) is attempting to cross the 60.00 figure for a sheer bullish momentum. Should the asset break above the previous week’s high at 1.3833, the greenback bulls will expose the asset to hit a fresh two-year high at 1.4000. A breach of the latter will drive the major towards May 2020 high at 1.4173. On the contrary, a decisive break below the round-level support placed at 1.3600 will drag the asset towards the psychological support at 1.3500, followed by September 19 high at 1.3344. USD/CAD four-hour chart  
There Is Expectations That New Zealand Dollar (NZD) To Underperform Australian Dollar (AUD)

There Is Expectations That New Zealand Dollar (NZD) To Underperform Australian Dollar (AUD)

TeleTrade Comments TeleTrade Comments 07.10.2022 09:56
NZD/USD is lower, sinking back to the mid-0.56s. Economists at Bank of America target the pair at 0.56 by year-end. NZD to underperform AUD “We revise down our end-2022 forecast for NZD/USD to 0.56 (previously 0.65) with recent developments making a return to the 0.60s unlikely in 2022. Poor global economic and financial conditions suggest a move below our year-end forecast is likely in the near term.” “We continue to expect NZD to underperform AUD, the latter better poised to benefit from China’s easing in commodity-intensive sectors.”  
The Japan Central Bank’s Decision Sent The Yen (JPY) Sliding

Japan's Finance Minister Said That The Government Stands Ready To Intervene In Markets

TeleTrade Comments TeleTrade Comments 07.10.2022 10:02
USD/JPY struggles to gain any meaningful traction and oscillates in a range on Friday. Speculations that Japanese authorities might intervene in the markets cap the upside. The underlying USD bullish sentiment acts as a tailwind ahead of the US NFP report. The USD/JPY pair fails to capitalize on its gains recorded over the past two trading sessions and oscillates in a narrow range through the early European session on Friday. The pair is currently placed around the 145.00 psychological mark and remains at the mercy of the US dollar price dynamics. Growing acceptance that the Fed will stick to a more aggressive rate hiking cycle to tame inflation continues to act as a tailwind for the greenback and the USD/JPY pair. In fact, the markets have been pricing in another supersized 75 bps Fed rate hike move in November. The bets were reaffirmed by the recent hawkish comments by several Fed officials, reiterating that the US central bank remains committed to bringing inflation under control. Furthermore, the widening of the US-Japan rate differential is seen weighing on the Japanese yen and offering support to the USD/JPY pair. The prospects for a faster policy tightening by the Fed remain supportive of elevated US Treasury bond yields. In contrast, the Bank of Japan remains committed to keeping JGB yields at low levels. That said, intervention fears hold back bulls from placing fresh bets and capping gains for the major. Japanese Prime Minister Kishida talked about the weakness in the domestic currency and said that the recent sharp, one-sided yen moves are undesirable. Kishida added that the intervention last month reflected the view that we cannot turn a blind eye to speculative FX moves. This comes after Japan's finance minister Shunichi Suzuki said on Monday that the government stands ready to intervene in markets to prevent deeper losses in JPY. Market participants also seem reluctant and prefer to move to the sidelines ahead of the crucial US monthly employment details, due for release later during the early North American session. The popularly known NFP report will influence Fed rate hike expectations. This, in turn, will play a key role in determining the near-term trajectory for the buck and provide a fresh directional impetus to the USD/JPY pair.
Hungary's Budget Deficit Grows, Raising Concerns Over Fiscal Targets

Samsung And Its Decline In Operating Income| Credit Suisse Is Trying To Buy Back Credit

Saxo Bank Saxo Bank 07.10.2022 11:08
Summary:  Risk sentiment was wobbly yesterday, as yields continued to rise, with late Fed speakers in the US yesterday continuing to deliver a hawkish message. The US dollar has come roaring back, especially against the smaller currencies, ahead of today’s September US jobs report. Given Fed forecasts that it will continue to tighten even if unemployment were to begin rising, we may be some months from a pivot in the Fed’s message.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities retreated yesterday with S&P 500 futures declining 1% yesterday as US bond yields are coming back higher towards the 4% as the US economy is still looking robust despite tighter financial conditions. S&P 500 futures are continuing lower this morning trading around the 3,740 level with the 3,700 level being the next natural gravitational point for the market on the downside. US Nonfarm Payrolls for September is of course today’s main event but it will probably not move much unless we see a big surprise to average hourly earnings figure m/m. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index sank for the second day in a row after the sharp rally on Wednesday. Chinese EV stocks tanked, with Li Auto (02015:xhkg) tumbling 16.1%, and Nio (09866:xhkg) and XPeng (09868:xhkg) down from 7% to nearly 9%. Investors were concerned about the severe competition in the EV industry with new entrants to the market and rising battery costs. China developer names plunged from 2% to 11% across the board as sentiment was clouded by CIFI’s (00884:xhkg) discussion with banks about posting an interest payment and a 2-notch downgrade to Caa1 by Moody’s for the developer’s senior unsecured debts. Hang Seng Index lost more than 1% by mid-day. Shanghai and Shenzhen exchanges are closed for a national holiday and will return on Monday. USD and US yields/risk sentiment The US dollar bounced back strongly yesterday on the supportive combination of weak risk sentiment and higher US treasury yields, with EURUSD all the way back to 0.9800 this morning after flirting with parity just a couple of sessions ago. The USD strength was most pronounced against the smaller currencies with a pair like AUDUSD trading near the cycle low below 0.6400 ahead of the US jobs data. That combination of higher US yields and weak risk sentiment provides the strongest support for the greenback, with a strong US jobs report the most likely spark for a further rise. Very interesting ahead of the weekend that USDJPY remains pinned near the critical 145.00 level ahead of the US jobs data – will we see a volatility event and official intervention if strong US jobs data sends the pair over the edge? Gold (XAUUSD) Gold eased back lower on the fresh rise in US treasury yields and a stronger US dollar, but the retracement of the recent massive rally off the cycle low of 1,1615 has been fairly shallow, with the first support zone of note into 1,680-1,700 area. The most significant challenge to gold would be a strong US jobs report and further USD strength, but a full reversal of the latest rally wave would require a significant plunge. To the upside, the next resistance of note is the 1,1734 level (61.8% retracement of the big sell-off wave into the lows) and then the huge 1,800 area and pivot high of 1,808 in August. Crude oil (CLX2 & LCOX2) The energy market tightness concerns continued to underpin further gains in the oil market, with WTI futures now rising towards $89/barrel and Brent above $94 following a 2 million barrels/day cut announced by OPEC+. Other supply issues are also at play with European sanctions on Russian oil coming into effect this quarter, but the US may opt to release more from its strategic reserves to offset some of this decline in supply. US treasuries (TLT, IEF) US treasury yields rose all along the curve ahead of today’s important September US jobs report and the market’s attempts to express hope over the last week that the Fed is set to deliver a pivot to less hawkish guidance. The US 10-year benchmark traded this morning aove 3.80%, less than 20 basis points from the significant 4.00% level that was briefly touched during the UK gilt market wipeout that saw some contagion even into US treasuries. What is going on? AMD blasted on ugly outlook and Samsung shows 11% in operating income Advanced Micro Devices revealed preliminary Q3 sales yesterday ahead of its earnings report in coming weeks. These were at $5.6 billion versus company and analyst estimates of $6.7 billion, an enormous miss.  Weaker demand in the PC market was cited, with writedowns in inventories also playing a role. Shares traded more than 3% lower after hours late yesterday after having lost some 60% from late 2021 highs. Samsung is also part of the semiconductor industry has announced its preliminary Q3 results this morning showing operating income declined 11% as demand for consumer electronics is coming down hard. Fed officials reiterated hawkish comments With the markets anticipating a Fed pivot sooner rather than later, Fed members continue to send stronger hawkish signals with the clear message being higher for longer interest rates. Minneapolis President Kashkari (2023 voter) said the Fed is “quite a ways away from a pause in rate hikes” and “not seeing evidence that underlying inflation peaked”. Fed Governor Cook said “restoring price stability likely will require ongoing rate hikes and then keeping policy restrictive for some time”. Fed Governor Waller joined the chorus saying that the Fed needs to continue to raise rates into early 2023. The Chicago Fed’s Charles Evans (Voter 2023) also reiterated that the Fed is heading to 4.5-4.75% by spring, and another 125bps of rate hikes is seen over the next two meetings. Credit Suisse is trying to bolster sentiment by buying back credit The Swiss-based bank is offering this morning to buy back its own debt up to CHF 3bn. ECB minutes suggest inflation concerns The ECB minutes from the September 7-8 meeting were released yesterday and suggested that another big rate hike after the last month’s 75bps move is in the cards. There was broad consensus that the key policy rates are still below neutral. While the assessment of economic performance sounded bleak, taming inflation remained the overarching objective and therefore further tightening is still expected. Markets currently price heavy odds that the ECB will deliver a 75 bp hike. Hong Kong’s PMI fell to the contractionary territory in September The S&P Global Hong Kong PMI fell to 48.0 in September from 51.2 in August, returning to the contractionary territory for the first time since March this year when Hong Kong was hit hard by an outbreak of COVID-19. The S&P Global Hong Kong PMI surveys activities in manufacturing, wholesale, retail and services, and construction. Among the sub-indices, the new order sub-index fell the most to 46.1 in September from 51.3 in August. The new export orders sub-index deteriorated further to 45.9 from 47.4 in the prior month. The output sub-index fell to 47.3 from 52.2 and the employment sub-index declined to 48.3 from 48.6. What are we watching next? Today's US September jobs report and the fate of the “pivot” narrative Fed speakers of late, including those late yesterday, continue to deliver a consistent message of continuing the current tightening regime, and given the Fed’s forecast that it will continue to tighten even as unemployment begins to rise (September forecasted a rise to a 4.4% unemployment rate next year vs. 3.7% currently), we are likely at least many months from the Fed blinking due to a softening labor market. The Sep. Nonfarm payrolls change is expected near +260k after +315k in August and the Average Hourly Earnings are seen rising +0.3% MoM and +5.0% YoY – the latter would be the slowest pace of wage growth since December. Earnings to watch The Q3 earnings season kicks off next week with the most important day being Friday with seven large US financial institutions reporting. The key focus points will be to what extent US banks are able to increase their net interest margin and the levels of credit provisions. Wednesday: PepsiCo Thursday: Progressive, Fast Retailing, Tryg, Walgreen Boots Alliance, Fastanal, BlackRock, Delta Air Lines, Domino’s Pizza Friday: Shanghai Putailai New Energy, YTO Express Group, PNC Financial Services, JPMorgan Chase, Morgan Stanley, Citigroup, UnitedHealth Group, Wells Fargo, US Bancorp, First Republic Bank Economic calendar highlights for today (times GMT) 1100 – Mexico Sep. CPI 1230 – US Sep. Nonfarm Payrolls Change 1230 – US Sep. Unemployment Rate 1230 – US Sep. Average Hourly Earnings 1230 – Canada Sep. Employment Change/Unemployment Rate 1400 – US Fed’s Williams (Voter) to speak 1500 – US Fed’s Kashkari (Voter 2023) to speak 1600 – US Fed’s Bostic (Voter 2024) to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-7-2022-07102022
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

Today's US Employment Data May Influence The Fed's Actions

InstaForex Analysis InstaForex Analysis 07.10.2022 11:57
Investors coming up with a reason to buy risky assets do not stop. Earlier, before the Fed meeting in September, many actively discussed whether the Fed would ease the pace of rate hikes under market pressure. But what happened was the opposite as after the meeting, the central bank raised rates to the previously announced 0.75%. This caused the collapse of the US stock market and with it the European and other markets. And now, after the RBA did not raise the rate by the promised percentage, investors became excited again, deciding that it was the situation on the US labor market that could be the reason why the Fed will shift its stance on interest rates. But the employment report from ADP was not as expected since the number of jobs was above the forecast of 200,000, reaching 208,000. This caused the end of the two-day rally, and led to new declines in stock indices. For today, the upcoming employment data in the US will be important. Forecasts say there should be 250,000 new jobs in September against 315,000 in August. If the data turns out to be lower than expected, hopes that the Fed will reduce the growth of rates will surge, which may cause a local increase in stocks and a decline in dollar. Forecasts for today: EUR/USD The pair is trading below 0.9810. It may rise to 0.9920 if positive sentiment prevails today after a weak US employment data. USD/CAD The pair is trading above 1.3720. If the data on the number of new jobs in the US is below expectations, it may fall to around 1.3600.   Relevance up to 09:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323698
The Commodities Feed: Middle Distillates Firm Up as Crude Prices Respond to US Economic Data

Ireland's Coveney: The New UK Government Up For Serious Discussion

TeleTrade Comments TeleTrade Comments 07.10.2022 11:59
Irish Foreign Minister Simon Coveney said on Friday, “I had a very good meeting with the UK foreign secretary cleverly on (Northern Ireland) protocol.” Additional quotes “A new air of positivity has created a flicker of optimism.” “We do not think we should get carried away with warm language, but the new UK government up for serious discussion.” Earlier this week, Coveney said: "It remains to be seen whether this new look British government is willing to make compromises to get a deal done but certainly the mood music has changed quite fundamentally, we welcome that and we will work on not only relationships to rebuild trust but also work on solutions in a practical way." Market reaction GBP/USD is catching a fresh bid on the renewed Brexit optimism, with the pair closing in on the 1.1200 barrier. The spot is up 0.24% on the day.  
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Japan’s Top Currency Diplomat Kanda's Statement About FX Intervention

TeleTrade Comments TeleTrade Comments 07.10.2022 12:28
Japan’s top currency diplomat Masato Kanda said on Friday that he “has never felt a limit to ammunition for currency intervention.” Kanda added, “making various steps so as not to face a limit to ammunition when it comes to FX intervention.” Market reaction USD/JPY is extending its retreat from above 145.00 on Japanese verbal intervention. The pair is trading -0.21% on the day at 144.81, as of writing.
The USD/CHF Pair Can Overcome The Immediate Obstacle Of A Trend Line

The Actions Of The Swiss National Bank (SNB) May Support The Strong Franc (CHF)

TeleTrade Comments TeleTrade Comments 07.10.2022 12:39
Against the backdrop of elevated price pressures, economists at CIBC Capital Markets expect the Swiss National Bank (SNB) to be increasingly prepared to tolerate a stronger franc. Additional policy tightening “In the context of elevated CPI, we can expect the SNB to remain wary of elevated price pressures feeding through into wage demands; this comes as the unemployment rate is at a 20-year low of 2.1%.” “A central bank keen to bear down on wage growth and an overheated real estate market could prove to be more activist than the ECB, supporting a stronger CHF into 2023.” “EUR/CHF: Q4 2022: 0.94 | Q1 2023: 0.97”
In Crypto, You Could Prove You Own A Private Key Without Revealing It

Cryptocurrency Trading Volumes Will Remain Near The Lows

InstaForex Analysis InstaForex Analysis 07.10.2022 13:09
The market capitalization of the cryptocurrency is actually stuck near the level of $955 billion. Even despite the increase in bullish signals, there are no significant changes in the price movement of the entire market. Why is the crypto market worth it? The main reason for the lack of significant price movement is the DXY index. The indicator peaked at 114, after which it began to decline. However, the corrective movement has not yet passed into the phase of a full-fledged downward trend. And this stops the growth of capitalization of high-risk assets. In 2022, most central banks launched an aggressive monetary policy aimed at fighting inflation by reducing the availability of money. Due to the decrease in financial opportunities, the level of interest in risky assets also falls. The main indicator of interest in high-risk assets is the DXY index. The indicator is gradually starting to decline, while the SPX has shown growth for three days in a row. In the short term, this may mean the emergence of a local bullish trend for major cryptocurrencies. ETH/USD Analysis The main altcoin continues to move within the framework of consolidation in the range of $1,200–$1,400. The cryptocurrency cannot go beyond the zone due to the downward trend line. As of October 7, ETH trading volumes are not enough for a full breakout. Technical metrics continue to point to the continuation of the flat price movement. RSI and stochastic are moving in the bullish zone but without hints of bullish signals. However, given the low trading volumes, if the price breaks out of the range, then this will be an impulsive movement. At the same time, Santiment analysts point to the active growth of new ETH wallets. Glassnode also noted that the number of ETH addresses with a balance of 1 Ether reached an absolute maximum of 1,580,000. This is a positive signal indicating a growing interest in the altcoin, and as a result, an increase in trading volumes. For the past two weeks, ETH has stood still without significant attempts to break out of the range. Given the approaching DXY correction, as well as the growing interest in Ethereum, we should expect the emergence of a local bullish trend. However, it is unlikely that the trading volumes needed to move up will appear over the weekend. BTC/USD Analysis The main news regarding BTC was the increasingly obvious uncorrelation with the S&P 500 stock index. Formally, assets retain the similarity of the dynamics of price movement. However, Bitcoin does not come close to implementing the upward jerks that SPX makes. This may indicate a worrying trend that the upcoming DXY correction will be a bullish leg for the stock market. Throughout the week, the US markets have been talking about the high potential of the S&P 500, NASDAQ, and Jones. As a result, BTC formally follows SPX, but most of the investment is concentrated in the stock market. If this fact is confirmed, then the potential for the likely upward movement of Bitcoin will be much less. Despite the disturbing news about the "relationship" between cryptocurrencies and stock indices, there are also positive signals. Glassnode analysts noted that more than 45% of all BTC have not moved for two years. This is an important signal indicating a high level of long-term investors, who are the main fuel for the fundamental value of the asset. In addition, CryptoQuant shed another ray of light on Bitcoin's commitment to the $20k level. Experts believe that the price of the cryptocurrency is at the level of the aggregate breakeven of institutional investors. This could be another reason for the strong support zone near $20k. Miners continue to be the main suppliers of BTC to crypto exchanges. One of the major American miners, Core Scientific, produced 1,213 in September, which is not 9% less than in August. At the same time, the company had to sell 1,576 BTC, which negatively affected the price of Bitcoin. Conclusions One by one, Fed officials have announced low chances for monetary easing in 2023. Powell has adjusted his inflation forecast for 2023, and now the acceptable figure is at the level of 3%. It's an admission that part of inflation is out of control. With this in mind, cryptocurrency trading volumes will remain near the lows. Therefore, the main stages of price growth will be the correction of the US dollar index. In the medium term, the forecast remains valid—cryptocurrencies will start to grow, and the first visible signals for this may appear next week.   Relevance up to 10:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323708
Navigating Interconnectedness: Analyzing Banks' Exposures and Funding from Non-Bank Financial Institutions

Economists Expect The National Bank of Hungary To Narrow The EUR/HUF Rate

TeleTrade Comments TeleTrade Comments 07.10.2022 13:34
EUR/HUF has pushed above 420. Therefore, economists at TD Securities expect the Hungarian National Bank to tighten and drive the pair to 412 by the end of the fourth quarter. NBH to continue running an FX-driven monetary policy “We expect the NBH to continue running an FX-driven monetary policy, rather than an inflation-driven one. In essence, hike rates in response to forint weakness rather than upside inflation risks.” “We think that EUR/HUF will trade in the 400-430 range in Q4 2022, but fall back below 420 and settle at 412 by the end of the quarter.”
Czech Republic: Tax Revenues Should Be Higher Than MinFin Expects

Czech Koruna (CZK): Wow! Check Out How Much Has Czech National Bank Has Spent On Forex Interventions!

ING Economics ING Economics 07.10.2022 12:55
According to our calculations, the Czech National Bank spent around EUR8bn in September, which is the second most expensive month since the start of FX intervention. In total, the CNB spent around EUR30bn, equivalent to 19% of total reserves. The pressure on the koruna will continue in the winter months and the CNB may rethink its current approach The Czech National Bank in Prague CNB spent about EUR8.0bn in the last two weeks Last week's CNB meeting brought the topic of FX intervention and the sustainability of costs back into play. With the first data from last week already in hand, it is time to look again at the big picture and possible implications for the months ahead. Based on the bank liquidity data, we can see that the CNB had not been active in the market since the August meeting until mid-September, as confirmed by board member Jan Frait. Read next: Terra's Worker Arrested! White House Comment On The OPEC Decision And Success of Deutsche Bank | FXMAG.COM The week before the September meeting, the koruna came under pressure and the CNB returned to the market with minimal activity of EUR0.5bn based on our estimates. However, we saw a heavy load of EUR7.6bn on Wednesday and Thursday last week. Overall, we see that CNB spent roughly EUR8bn in September. While in previous months our estimates differed only marginally from the central bank's official numbers released later, September's estimate is more complicated. The CNB meeting took place at the end of the month and quarter, which is linked to the seasonal pattern of movements within the banking sector and deposit rebalancing. Therefore, this time our estimate is associated with a greater degree of uncertainty. Weekly cost of FX intervention (EURbn) Source: Macrobond, ING calculation The market will continue to test the CNB's resolve Based on our estimate, we see that September (EUR8bn) was the second most expensive month for the central bank since the start of FX intervention in mid-May, after July's EUR10bn. Overall, we see that the CNB has spent around EUR30bn since then, equivalent to just under 19% of total FX reserves before the intervention began. Last week thus brought back into play the question of when the CNB will hit the bank board pain threshold and how long the central bank will be present in the market. Central bank activity in the market has been seen around the board meetings and during the sell-off in emerging markets in early July. Although we do not expect the CNB to announce a decision at the board meeting to stop intervention, market attention is visibly concentrated in that direction. There are two meetings left before the end of the year, in November and December. If the September pattern repeats, 30% of FX reserves would be spent by year-end, the pain threshold we mentioned earlier, leading the CNB to rethink its approach. Moreover, with winter approaching, we can expect the pressure on CEE currencies to continue, plus the Czech Republic faces a sensitive rating review by S&P next week and Fitch the week after. So we can expect that the pressure on the koruna will not ease and the market will test the CNB. If this scenario comes to pass, we do not expect the CNB to announce a complete exit from the market, but rather quietly move its levels above the current 24.60-70 EUR/CZK and play a cat-and-mouse game with the market. Size of CNB FX reserves in April and costs of intervention since mid-May (EURbn) Source: Macrobond, ING estimate Read this article on THINK
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

Fed Vice Chair Brainard Said Tighter Policy Will Not Stop

InstaForex Analysis InstaForex Analysis 07.10.2022 13:27
US Treasury Secretary Janet Yellen called on key central banks to continue the fight against inflation, pointing out the problems that await the global economy in the future. Fed members statement Yellen previously headed the Federal Reserve and was forced to change the course of policy in response to global changes in the world economy. Her comments now coincide with the proposed reforms by the World Bank and regional development banks, as well as with the views of several Fed representatives. Fed Vice Chair Lael Brainard also said recently that they won't shy away from tighter policy, but warned that there is a need to look at the spillovers that could have a negative impact on the financial system as interest rates rise. These words were perceived by investors as a signal for a softer policy next year, which provoked the weakening of dollar and a rally in the stock markets. In the futures market, expectations were revised even though most politicians tried to convince market participants that no one is going to loosen their grip and only the most effective fight against inflation is ahead. EUR/USD Talking about EUR/USD, a lot depends on 0.9810 because a break above it will lead to a rise to 0.9840 and 0.9880. Meanwhile, a fall below 0.9760 will ramp up pressure, which will result in a further decline to 0.9725, 0.9680 and 0.9640. GBP/USD In GBP/USD, a lot depends on 1.1190 because its breakdown will lead to a rise to 1.1250 and 1.1310. A fall below 1.1115, meanwhile, will result in a drop to 1.1030 and 1.0950.   Relevance up to 09:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323700
Collapse of Black Sea Grain Initiative Rattles Market: Impact on Ukrainian Grain Exports

The US Dollar To South African Rand (USD/ZAR) Pair Can Hit 18.00 In Q1 2023

TeleTrade Comments TeleTrade Comments 07.10.2022 13:52
The South African rand's resilience is likely to be tested in the coming months. Economists at TD Securities expect the USD/ZAR pair to hit 18.00 before easing back lower to 15.90 by the end of the next year. SARB’s tightening to support the rand “We think that USD/ZAR will trade as high as 18.00 in Q1 2023, but ultimately the SARB's tightening and steep SAGB curve are supporting factors that will help stem rand weakness.” “We expect USD/ZAR to end 2023 at 15.90.”
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

Another Busy Week: Fed Speeches And Inflation Data Ahead

Craig Erlam Craig Erlam 08.10.2022 08:34
US It is now all about inflation data.  The focus was temporarily on the labour market but everyone knows that the Fed is primarily concerned with what is happening with inflation.  Wall Street will first get a look at producer prices on Wednesday and then CPI the next day. August data showed high inflation remains well-entrenched as shelter and food prices surged, while gas prices softened. Expectations for the September inflation report are for inflation pressures to remain hot.  The consumer price index is expected to increase by 0.2% for the month and 8.1% over the past year.    Traders will also pay close attention to the FOMC minutes that should show a consistent hawkish stance to fight persistently high inflation. It will also be another busy week of Fed speak as seven FOMC members will be making appearances.  Evans and Brainard speak on Monday. On Tuesday, Mester speaks to the Economics Club of NY.  Wednesday sees Kashkari and Barr speak before the minutes are released. Cook makes the last Fed appearance on Friday.  Earnings season also begins with the big banks.  This earnings season will likely be filled with hiring freezes/layoff announcements, cost-cutting saving measures, and mostly downbeat outlooks.  The health of the consumer is weakening, and Wall Street will want to see how bad banks assess the health of the consumer.   EU  Three weeks to go until the next ECB meeting and it’s still not clear whether the central bank will opt for 75 basis points or 100. The decision to super-charge the tightening cycle is not an easy one as policymakers are desperately concerned about the economic ramifications and the risk of going too far too quickly. Final inflation readings combined with various ECB appearances – including President Christine Lagarde – could shed further light on which way the central bank is currently leaning. UK  Where do we begin? The key event next week may well be the expiry of the BoE’s gilt-buying intervention on 14 October which some fear could spark another exodus from UK government bonds as the backstop is removed. Those fears may be overblown but investors may only be able to relax again once successfully removed. We’ll hear from a variety of BoE policymakers next week, all of whom will likely face a barrage of questions related to its bond-buying, the government and its mini-budget and of course the economy. On top of that, there’s a selection of economic data including the jobs report on Tuesday, and GDP and industrial production on Wednesday.  Another week of question dodging and scripted “answers” is on the cards for the government as it desperately scrambles to clear up the mess it so rapidly created.  Russia The focus remains on Ukraine as Russia continues to lose ground in territories it previously captured. Meanwhile, the West is working towards fresh sanctions and potential caps on Russian energy prices in response to the illegal annexation of four regions it currently partially controls in Ukraine.  South Africa Another quiet week with only tier three data scheduled for release. Turkey It’s that time of the week when I rant about Turkey’s ridiculous monetary policy experiment and its damaging consequences at a time of global tightening. Inflation rose above 83% in September, a victory for President Erdogan no doubt as forecasts put it closer to 85%. Next week we’ll get labour market figures on Monday and current account on Tuesday (spoiler, it hasn’t been fixed by soaring inflation and the weakest ever exchange rate). Switzerland Further rate hikes are coming, the question is when and how much. Markets are pricing in a coin flip between 50 and 75 basis points but will the SNB wait until 15 December to pull the trigger? Inflation eased to 3.3% in September, a level Chairman Thomas Jordan suggested the central bank won’t tolerate (anything above target, in fact). We’ll hear from him again on Tuesday.  China Next Friday, China’s CPI data will be released and is expected to be around 2.5%, comfortably within target. Against the backdrop of a sharp correction from a recent peak in the US dollar, USD/CNH fell by 3.44%, easing pressure on the currency. The 20th National Congress of China will be held next Sunday, 16 October. The market generally expects that adjusting the pandemic prevention and control policy may be one of the important themes of this meeting. India WPI inflation data for September is expected to show price pressures easing next week, which could enable the RBI to consider slowing its tightening cycle.  Australia A quiet week following the RBA decision to slow the pace of tightening last week with a 25 basis point hike. This was below market expectations of 50bps and made the RBA the first major central bank to ease off the brake. Consumer inflation expectations on Thursday may be of some interest. New Zealand In New Zealand the central bank did not ease off the brake, opting instead to maintain its pace with another 50bps hike, taking the cash rate to 3.5%. The market expects the central bank’s final interest rate target for this round to be around 4.5% according to the Refinitiv rate probability tracker. A tight labour market and lower immigration are creating more sustained domestic inflation pressures and the RBNZ believes there’s still more work to do. On the data front, the BusinessNZ manufacturing index will be released on Thursday. Japan Japanese FX intervention is a hot topic once more as it trades around 145 to the dollar. This is just shy of where the Ministry of Finance intervened a couple of weeks ago and around the level the BoJ conducted a rate check the week prior. Another hot US jobs report on Friday may have made intervention more likely. The BoJ is unlikely to tweak its yield curve control policy any time soon. Governor Haruhiko Kuroda said it would continue to adhere to the easing policy and keep the yield curve ceiling at 0.25% and the benchmark interest rate at -0.1 %. No changes are expected until after Kuroda’s term ends in March 2023. Still, PPI data on Thursday may be of interest.  Singapore GDP data on Friday is the only notable economic release. Growth is seen slowing to 3.4% in Q3. Economic Calendar Sunday, Oct. 9 Economic Data/Events China aggregate financing, money supply, new yuan loans expected this week Austria holds its presidential election Monday, Oct. 10 Economic Data/Events US bond market is closed in observance of Columbus Day/Indigenous People’s Day. The stock market will be open. Norway CPI Greece CPI Australia foreign reserves Singapore MAS monetary policy statement, GDP Canadian financial markets are closed in observance of Thanksgiving China’s financial markets open after Golden Week Holiday The 2022 annual meetings of the International Monetary Fund and World Bank kick off in Washington. Through Oct. 16 Fed’s Brainard and Evans speak at the NABE annual meeting in Chicago ECB chief economist Lane gives opening remarks at the online ECB Conference on Monetary Policy ECB’s Centeno speaks at a meeting in Lisbon of central banks from Portuguese-speaking countries Scotland’s First Minister Sturgeon delivers the keynote speech to Scottish National Party’s National Conference in Aberdeen Tuesday, Oct. 11 Economic Data/Events Australia consumer confidence, business conditions, household spending China FDI Italy industrial production Japan BoP current account Mexico international reserves New Zealand truckometer heavy traffic index, card spending South Africa manufacturing production Turkey current account UK jobless claims, unemployment IMF publishes its World Economic Outlook and Global Financial Stability Report Fed’s Mester speaks at a webinar hosted by the Economic Club of New York BOE Governor Bailey speaks at the Institute of International Finance annual meeting in Washington. Deputy Governor Jon Cunliffe speaks on a panel on global payments at the IIF meeting ECB chief economist Lane delivers the keynote speech at the 7th SUERF, CGEG, EIB and Societe Generale conference on “EU and US Perspectives: New Directions for Economic Policy” in New York SNB President Jordan delivers the annual O. John Olcay Lecture at the Peterson Institute in Washington The Bretton Woods Committee International Council meeting begins. Through Oct. 14 BOJ announces the outright purchase amount of government securities Wednesday, Oct. 12 Economic Data/Events US PPI, FOMC minutes, mortgage applications Eurozone industrial production India CPI, industrial production Japan machinery orders Mexico industrial production New Zealand home sales, net migration Thailand foreign reserves, forward contracts Turkey industrial production UK industrial production, trade, monthly GDP IMF publishes its Fiscal Monitor report The OPEC Monthly Oil Market Report is published EU energy ministers meet in Prague Fed’s Bowman speaks at a Money Marketeers event in New York Fed’s Kashkari participates in a town hall discussion at an economic development summit in Rhinelander, Wisconsin ECB’s Christine Lagarde, de Cos and Knot speak at the IIF annual meeting in Washington. Knot also speaks at the IMF meeting in Washington BOE’s Haskel delivers the keynote speech at the 7th World KLEMS conference in investment and productivity at the University of Manchester BOE’s Mann speaks at a webinar hosted by the Canadian Association for Business Economics titled “Global Macro Conjuncture and Challenges Facing Small Open Economies.” BOE chief economist Pill speaks at an event hosted by the Scottish Council for Development and Industry in Glasgow RBA’s Ellis speaks at Citi Australia & New Zealand Investment Conference in Sydney Hong Kong Chief Executive John Lee delivers the opening keynote speech at the two-day BritCham Hong Kong Summit Bloomberg Invest New York two-day conference begins Thursday, Oct. 13 Economic Data/Events US CPI, initial jobless claims Germany CPI Sweden CPI Australia inflation expectations  China medium-term lending Japan PPI New Zealand food prices Mexico central bank releases minutes from its Sept. 29 meeting ECB’s de Guindos speaks at the “Mercado de Fusiones y Adquisiciones en España y Europa” conference organized by PwC and Expansión Riksbank’s Breman speaks in a roundtable on the economic outlook for Sweden at the Citi Macro Forum in Washington G-20 finance ministers and central bankers meet in Washington Italy’s newly elected parliament convenes for the first time IEA publishes its oil market report EIA oil inventory report Friday, Oct. 14 Economic Data/Events US retail sales, business inventories, University of Michigan consumer sentiment US banks kick off earnings season: JPMorgan, Wells Fargo, and Morgan Stanley report China CPI, PPI, trade France CPI Poland CPI  Canada existing home sales, manufacturing sales India wholesale prices, trade Japan money stock New Zealand PMI Philippines overseas remittances UK RICS home prices BOE emergency bond buying is set to end BOE publishes its quarterly bulletin ECB’S Holzmann speaks at a conference hosted by the OECD and Austrian National Bank in Vienna Australia ends mandatory Covid-19 isolation requirements Sovereign Rating Updates Czech Republic (S&P) This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Bitcoin price may be stealing the show soon. We could say that this week Bank of Japan decision draws more attention than usually

USD/JPY Pair: Waiting For The Development Of An Upward Trend

InstaForex Analysis InstaForex Analysis 10.10.2022 08:00
On Friday, the USD/JPY pair reached the resistance of the embedded price channel line (145.29), and this morning it went above it. Now the price has opened the 147.30 target, determined by the upper embedded line of the price channel. Currently, the line of the Marlin Oscillator is moving sideways in the positive area, just above the zero line. When the price reaches the level of 147.30 with the oscillator, a divergence may form, which will become a signal and a condition for the trend to reverse into a deep correction (or a reversal of the medium-term trend). The price has already consolidated above the 145.29 level on the 4-hour chart, which is also the October 3rd high. Marlin is in the positive area. We are waiting for the development of an upward trend.   Relevance up to 04:00 2022-10-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323786
The Pound Is Now Openly Enjoying A Favorable Moment

GBP/USD Pair: The Lateral Price Movement Is Unlikely To Be Long

InstaForex Analysis InstaForex Analysis 10.10.2022 08:07
On Friday, the British pound opened and closed below the technical level of 1.1170. Now the 1.0828 target is available. The signal line of the Marlin Oscillator also looks fixed below the zero line, in the downward trend zone. Consolidation under 1.0828 will open the second target at 1.0535. A factor that could postpone the pound's decline is tomorrow's employment data in the UK, which, with the expected maintenance of the unemployment rate at 3.6%, may show an improvement in the employment structure, including wage growth. The price reached the MACD line and stayed there on the four-hour timescale. The technical price level (1.1170) is pressing on the price from above, so the lateral price movement is unlikely to be long. With the departure of the quote under Friday's low at 1.1055, the movement to 1.0828 will begin.   Relevance up to 05:00 2022-10-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323788
The EUR/USD Pair: There Are Still No Sell Signals

At The Moment The Trend Of The Euro To US Dollar Pair (EUR/USD) Is Down

InstaForex Analysis InstaForex Analysis 10.10.2022 08:13
Last Friday, the euro fell by 52 points, and this morning the price reached support for the most important line of the global price channel of the higher timeframe at around 0.9724. After the price settles below this line on a weekly scale, further downward movement of the price to the target level of 0.9338 is likely. The situation is similar on the daily chart - after consolidating under 0.9724, the price will go to the nearest support at 0.9520, that is, the price will try to renew the September 28 low. Here there is a risk of forming convergence with the Marlin Oscillator. Perhaps, before moving to 0.9338, the price will lie in a side trend for 1-2 weeks. At the moment the trend is down. On the four-hour chart, the price lingered on the technical price support lines and the MACD indicator line. Accordingly, consolidating below the level and on this time frame creates a downward momentum. Marlin is developing in its lower half - in the territory of a downward trend.   Relevance up to 05:00 2022-10-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323790
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

The Pound To US Dollar (GBP/USD) Pair Could Resume The Main Bearish Movement

InstaForex Analysis InstaForex Analysis 10.10.2022 08:35
  Early in the European session, the British pound (GBP/USD) is trading at around 1.1068, bouncing above strong support at 1.1060. The pair is expected to recover in the next few hours and it may reach the top of the downtrend channel formed on September 30. In case the British pound fails to break out of the downtrend channel, it is likely to resume its bearish cycle. GBP/USD could fall towards the critical support at 1.1060 and could beat and fall towards the bottom of the downtrend channel around 1.0850. On the other hand, a sharp break of the secondary downtrend channel could continue to rise and the instrument could reach the 21 SMA and 7/8 Murray zone located around 1.1230 - 1.1265. The uptrend channel formed on September 23 crosses around 1.1270. A pullback to this area and could be a good sign to sell GBP. The currency pair could fall in the next few days towards 6/8 Murray located at 1.0742. In the medium term, as long as GBP/USD consolidates below the psychological level of 1.15 and below the 200 EMA located at 1.1380, the British pound will remain under bearish pressure. Any attempts to break the area of 1.14 and a failure to consolidate above it will be seen as a selling opportunity. It is likely that in the medium term the British pound could fall towards 5/8 Murray at 1.0253. Short-term technical indicators support a bearish continuation. On October 5, the eagle indicator reached the extremely overbought zone. For now, we can see a bullish signal but it could again show overbought signs and GBP/USD could resume the main bearish movement. Relevance up to 06:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/296027
The Outlook Of EUR/USD Pair Is Downward In The Near Term

The High Demand For The US Dollar (USD) Does Not Allow The Euro (EUR) Itself To Grow

InstaForex Analysis InstaForex Analysis 10.10.2022 08:53
EUR/USD 5M Last Friday, the euro/dollar pair continued its downward movement and by the end of the day was below the Senkou Span B line. We said earlier that the Senkou Span B line is almost the last hope for the euro to protect itself from a new collapse, and now it turns out that it has been overcome, just like the Kijun-sen line on the 24-hour timeframe. Thus, right now one simple conclusion suggests itself: the euro will continue to form a long-term downward trend. There were reasons for the euro's fall on Friday. Reports from NonFarm Payrolls and unemployment in the US turned out to be quite strong, so the US currency continued to rise. It is strange that it rose by only 50 points, although in previous days, when there were no macroeconomic reasons for falling, it showed a firmer strengthening. But we have what we have. There will not be many important events in the new week, therefore, most likely, traders will turn their attention to geopolitics, which tend to only get worse over time. In regards to Friday's trading signals, the situation was unambiguous, but not easy. The first signal to sell - consolidating below Senkou Span B - turned out to be false, but the price passed in the right direction for more than 15 points, so Stop Loss at breakeven should have been set. According to it, the deal was closed . The second sell signal was formed for several hours, but finally formed when US statistics were being released. Since the statistics turned out to be strong, traders had reason to open short positions. But even in the case of opening, it was not possible to earn a lot, since an upward rollback began almost immediately. COT report: The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 9,300, and the number of shorts by 19,200. Accordingly, the net position grew by about 9,900 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 45,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 10. The key report for the coming week is US inflation. Overview of the GBP/USD pair. October 10. Liz Truss's ratings are falling, not having time to grow. Forecast and trading signals for GBP/USD on October 10. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The upward trend has finally been canceled on the hourly timeframe. This, of course, does not mean that now the euro will fall without a chance, but the technique is now signaling a resumption of the downward trend. Moreover, on all timeframes. It is quite possible that this week we will see the euro around the level of 0.9553. We highlight the following levels for trading on Monday - 0.9553, 0.9844, 0.9945, 1.0019, 1.0072, as well as the Senkou Span B (0.9767) and Kijun-sen (0.9864) lines. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. For today, there are no important events and reports planned in the EU and the US, so the day can be relatively calm. However, the euro may continue to fall. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-10-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323778
The Cabel Market (GBP/USD Pair) May Trade Relatively Flat This Week

The Actions Of Major Players And The Movement Of The Pound (GBP) Have Finally Begun To Coincide

InstaForex Analysis InstaForex Analysis 10.10.2022 09:02
GBP/USD 5M The GBP/USD currency pair also continued its downward movement on Friday, although it was weaker than in the previous two days. Nevertheless, the fall continues, but the pound is still above the critical line, therefore, formally, it still retains chances for the resumption of the upward movement. The price is also above the important Kijun-sen line on the 24-hour TF. Thus, either in the coming days, the pound will resume growth, or it will suffer the fate of the euro. On Friday, the reasons for the fall of the pair were the same as those of the euro/dollar pair. Unfortunately, geopolitics remains so complicated that it is very difficult to expect risky currencies to rise against the dollar. Next week, everyone will be waiting for Moscow's reaction to the Nord Stream and Crimean Bridge bombings. As usual, there are a huge number of versions of who is behind these attacks, and each of the parties to the conflict sees what happened from its own angle. One way or another, it is hardly worth expecting that these events will remain without consequences. Thus, we can only expect a worsening of the geopolitical tension in the world, which is very bad for the pound and the euro. Only one trading signal was formed on Friday. The price traded along the 1.1212 level for several hours and eventually bounced off it. True, the rebound occurred exactly at the time when important statistics were published in America, but it unequivocally supported the growth of the dollar, so a short position could be opened. We also managed to earn on this position, as there was no upward correction. It had to be closed manually in the late afternoon, and the profit on it was at least 60 points. COT report: The latest Commitment of Traders (COT) report on the British pound showed minimal changes. During the week, the non-commercial group closed 17,700 long positions and 14,600 short positions. Thus, the net position of non-commercial traders decreased by 3,100, which is not very much for the pound. We could assume that the actions of major players and the movement of the pound have finally begun to coincide, but the pound has already begun a new round of decline, which risks transforming into a continuation of the global downward trend. The net position indicator has been growing slightly over the past weeks, but the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = "bearish" mood). And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 42,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 10. The key report for the coming week is US inflation. Overview of the GBP/USD pair. October 10. Liz Truss's ratings are falling, not having time to grow. Forecast and trading signals for EUR/USD on October 10. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair has already rolled back down by 420 points on the hourly timeframe, but at the same time it still maintains an upward trend. Unfortunately, in the long term, the downward trend may well resume as geopolitics remain very complex. And the foundation - at least such that does not allow counting on the support of the British currency. Now all the attention is on geopolitics and Senkou Span B on the 4-hour timeframe and Kijun-sen on the 24-hour timeframe. Overcoming them will increase the probability of a new fall of the pound to its absolute lows around the level of 1.3057. We highlight the following important levels on Monday: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.0923) and Kijun-sen (1.1292) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. There are no exciting events planned for Monday in either the UK or the US. Therefore, we can even observe a flat, but it is unlikely that it will last for a long time or even take place. The market is not set for sluggish trades. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 02:00 2022-10-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323780
China’s Foreign Minister Qin Gang Downplayed Russia’s Invasion Into Ukraine

Putin's Reaction To The Outbreak | 36.4% Less Passenger Travel In China

Saxo Bank Saxo Bank 10.10.2022 09:22
Summary:  S&P 500 plunged 2.8% following a decline of U.S. unemployment to 3.5% in September, signing a tight labor market and providing cover for the Fed to front-load larger rate hikes. U.S. treasury yields and the dollar continued to charge higher. The AUD dollar fell to a 2.5-year low. WTI crude jumped 5.4% as the OPEC+ production quota cut continued to linger. The U.S. tightened its restrictions on the export of semiconductor technology to China. Putin called an emergency meeting with his Security Council. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) retreated on a hot labour market After a stronger-than-expected payroll report and a decline in the unemployment rate to 3.5%, U.S. stocks slid throughout the session and managed only to bounce slightly from the lows toward the market close.  S&P 500 plunged 2.8%, with all 11 sectors of the benchmark declining.  The information technology and consumer discretionary sectors fell the most, down 4.1% and 3.5% respectively. On the back of a 5.4% jump in crude oil prices during the day, the energy sector was the best performer, losing only 0.7%. Nasdaq 100 tumbled 3.9%.  Advanced Micro Devices (AMD:xnas) fell the most among the NDX constituents, down 13.9%, following slashing over USD1 billion from its revenue guidance for Q3. Close behind was another semiconductor name, Marvel Technology, falling 11.7%. Intel (INTC:xnas) and NVIDIA (NVDA:xnas) plunged 5.4% and 8% respectively.  The Biden administration issued new rules to restrict American companies from exporting advanced chip equipment to China.  CVS Health (CVS:xnys) plunged 10.5% after being downgraded to a worse-than-average quality rating from Medicare Advantage’s Star Ratings and on its plan to acquire Cano Health (CANO:xnys).  Trading desk talks suggested large short-selling initiated in financials while short-covering was prevailing in the energy space. This week could be another pivotal moment for markets with the U.S. earnings season kicking off, the September FOMC minutes, and the US CPI. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) climbed from 5bps to 7bps across the curve on the fall in the unemployment rate to 3.5% U.S. treasuries sold off on the larger-than-expected +263K print of the non-farm payrolls and the 3.5% unemployment rate (vs 3.7% expected), with the belly of the curve being hit most.  5-year yields jumped 7bps to 4.14%, while 2-year yields climbed 5bps to 4.31% and 10-year yields moved up 6pbs to 3.88%.  The money market curve now prices in a 75bp hike almost a done deal for the November FOMC. The cash treasury bond market is closed on Monday for Columbus Day (but U.S. stock exchanges are open).  Hong Kong’s Hang Seng (HSIU2) fell in light volume with China property and EV stocks underperforming Hang Seng Index sank for the second day in a row after the sharp rally on Wednesday, falling 1.5%. Chinese EV stocks tanked, with Li Auto (02015:xhkg) tumbling 14.8%, Nio (09866:xhkg) plunging 10.5%, and XPeng (09868:xhkg) moving down 6%. The collapse of EV stock prices contributed significantly to the 3.3% decline of the Hang Sent Tech Index (HSTECH.I).  Investors were concerned about the severe competition in the EV industry with new entrants to the market and rising battery costs.  China developer names plunged from 2% to 9% across the board as sentiment was clouded by CIFI’s (00884:xhkg) discussion with banks about posting an interest payment and a 2-notch downgrade to B3 (long-term rating) and Caa1 (senior unsecured debts) by Moody’s. CIFI and Longfor (00960:xhkg), each tumbled over 8%.  Turnover in the Stock Exchange of Hong Kong hit a new 2022 low at HKD57 billion. Shanghai and Shenzhen exchanges were closed for the National Day holiday the whole last week and are returning today.   Australia’s ASX200 (ASXSP200.1) tipped to open the week lower, while focus remains on commodities The ASX200 charged 4.5% last week outperforming global markets, with the rally being supported by commodity prices moving higher, including iron ore. On Monday the Futures indicate the market could fall 0.9% following Wall Street. Trading screens will likely be in the green (black) in the commodity sector, after the oil price rallied 4.7% to $92.62. A focus will also be on iron ore companies as after China’s markets reopen after a weeklong holiday, and China is the largest buyer of iron ore. It’s also worth noting the US listed BHP closed just 0.8% lower on Friday, outperforming US equites. Other stocks to watch might include; Karoon Energy (KAR), after Brazil agreed to lower the royalty rate on the company’s Bauna project. Core Lithium (CXO) and NRW Holdings (NWH) will also be in focus after NRW’s Primero won a contract for Core Lithium’s plant. And Tabcorp (TAH) will also be in view for traders, after investing $33 million for a 20% equity stake in Dabble Sports.  The U.S. dollar climbed modestly on higher bond yields Higher bond yields lifted the dollar, seeing DXY 0.4% higher to 112.795.  USDJPY hovered above 145 but is yet to make a decisive upward move again to test the resolve of Japan’s Ministry of Finance.  EURUSD weakened -.5% to 0.9744 and GBPUSD declined 0.7% to 1.1089. The Australian dollar (AUDUSD) fell to a 2.5-year low, as the Fed gained more ammunition to hike   The AUD/USD fell 0.7% to 0.6361, which is its lowest level since April 2020. This follows the US jobs report coming out on Friday, which gives the Fed more ammunition to rise rates. Keep in mind, a currency generally appreciates when its central bank rises rates. This is in deeded one of the key reasons why the USD is marching up. And when you compare the Fed’s hawkishness to the RBA’s fresh dovish tone, it makes this currency pair an interesting one to watch, particularly with this week’s US economic data and Fed speeches on tap. On the weekly chart it could worth watching the support level at perhaps 0.61670.   Crude oil (CLX2 & LCOX2) surged more than 5% The front-month contract of WTI crude gained 5.4% to USD92.64 despite a modestly higher U.S. dollar. The production quota cut last Wednesday continued to provide support to crude prices.  Since OPEC+ announced the production quota cut, WTI crude oil prices have risen 7.7%.  While many news headlines say it is a production cut of 2 million barrels, we want to clarify here that the 2 million barrels number is referring to the quota, not production.  However, 15 out of the 23 oil-producing countries involved produced below their current levels of allocated quotas in September 2022. 13 of these oil-producing countries produced less oil in the last month than the reduced quotas to be implemented in November.  In other words, the reduced quotas will cut oil production in 10 countries if they adhere to cap the quota.  Having said that, the cut will still be about 1.3 million barrels a day effectively and it is still substantial, from Saudi Arabia (552,000 barrels), UAE (171,000 barrels), Iran (150,000 barrels), Kuwait (144,000 barrels), Libya (100,000 barrels), Iraq (69,000 barrels), Algeria (43,000 barrels), Gabon (28,000 barrels), South Sudan (21,000 barrels, and Oman (21,000 barrels).   What to consider?   US Unemployment Rate fell 0.2 percentage points to 3.5% Nonfarm payroll growth lowered to +263K in September, down from August’s +315K but slightly above the median forecast of +255K of Bloomberg’s survey.  Major areas of strength in the establishment report (i.e. payrolls) were healthcare, leisure, and hospitality while trade and transportation employment was weak. The market moving part in the cluster of data was the 0.2pp decline in the unemployment rate to 3.5% in September from 3.7% in August which the market had expected unchanged at 3.7%.  Part of the fall in the unemployment rate was attributed to a 0.1pp decline in the labor force participation rate to 62.3% from 62.4%. Investors and trades are concerned about the inability of the participation rate to sustain its rally toward 63 or higher so as to dampen upward pressure on wages. Average hourly earnings came in as expected at +0.3% M/M and +5% Y/Y.  FedEx’s ground delivery unit expects a slower volume ahead FedEx Ground, the ground delivery unit of FedEx (FDX:xnys) said in a statement that they are expecting “weakening macroeconomic conditions are causing volume softness. The unit is working with its customers on the latter’s projected shipping needs and making adjustments.  The U.S. tightened restrictions on exporting semiconductor equipment, components, and high-end chips to China The U.S. Department of Commerce rolled out new regulations last Friday to prohibit American companies from exporting to Chinese companies advanced semiconductor equipment and components that can be used to make equipment without first applying for a license from the Department of Commerce effective immediately. The Department of Commerce’s new rules bans U.S. persons from providing support to the development or production of semiconductors at Chinese semiconductor facilities without a license from the Department of Commerce.  The Department of Commerce also tightened the Foreign Direct Product Rule to restrict China from obtaining advanced microchips that can be used in supercomputers and artificial intelligence applications from American companies as well as foreign companies that rely on American technologies. Tourism data was weak for the National Day Golden Week holiday in China According to data from the Ministry of Culture and Tourism, domestic trips and revenues for the period from Oct 1 to 7 were 18.2% and 26.2% lower than those in the same period last year respectively.  According to estimates from the Ministry of Transport, the aggregate number of passenger trips via roads, railways, waterways and aviation from Oct 1 to 7 was 255.5 million trips or 36.5 million trips per day on average, which was 36.4% lower than that in 2021. Putin is chairing a meeting with his Security Council on Monday Russian President Putin is going to chair a meeting with the permanent members of the Russian Security Council today. It was apparently in response to the explosion two days ago that seriously damaged the Kerch bridge which links Crimea with Russia.   For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-10-oct-10102022
Navigating Financial Markets: Insights on Central Bank Decisions and Currency Quotes

USD/TRY Pair: The Bulls Are Likely To Keep The Reins As The CBRT Diverges From The Fed

TeleTrade Comments TeleTrade Comments 10.10.2022 09:51
USD/TRY grinds near the all-time high during a sluggish start to the key week. Turkish President Erdogan pledged to keep cutting rates as long as he is in power. Hawkish Fed bets, firmer US data also favor the pair buyers. Off in the US, light calendar elsewhere probe buyers. USD/TRY seesaws around 18.60 during early Monday morning in Europe as the fears of more rate cuts from Turkey contrasts with the hawkish Fed bets. That said, holidays in the US, Canada and Japan restricts the Turkish lira (TRY) pair’s immediate upside moves. Turkish President Tayyip Erdogan vowed on Saturday that the central bank would continue to cut its policy interest rates every month for as long as he stayed in power, after it surprised markets by cutting rates twice in the last two months, per Reuters. It’s worth noting that the record high inflation in Turkiye pushes the Central Bank of the Republic of Türkiye (CBRT) towards rate hikes but the policymakers’ resistance for the same weighs on the TRY prices of late. On the contrary, the US Dollar Index (DXY) struggles around a one-week high after rising for the last three consecutive days. In doing so, the greenback gauge pauses the previous week’s reversal of the 20-year high, marked late in September. Unlike the Turkish policymakers, the Fed members keep favoring the rate hikes even at the cost of a short-term economic slowdown. Also fueling the hawkish Fed bets is the latest US jobs report for September. On Friday, the headline Nonfarm Payrolls (NFP) rose to 265K versus the 250K expected. Also portraying the strength of the US employment conditions, as well as weighing on the market’s mood, was an unexpected fall in the Unemployment Rate to 3.5% compared to forecasts suggesting no change in the 3.7% prior. Following that, the CME’s FedWatch tool signals the 78% chance for the US central bank’s 75 bps rate hike in November. In addition to the Fed-inspired bids, the DXY also cheers the risk-off mood amid pessimism surrounding the economic slowdown due to the Russia-Ukraine and the Sino-American tussles. Against this backdrop, the Wall Street benchmarks closed in the red while the S&P 500 Futures dropped for the fourth consecutive day while poking the monthly low near 3,630, down 0.40% intraday at the latest. That said, the US 10- Treasury yields rose for eight consecutive weeks in the last before pausing around 3.90%. Looking forward, Turkey has second-tier economics like Industrial Production and Unemployment Rate up for publishing but Wednesday’s Federal Open Market Committee (FOMC) Minutes and Thursday’s US Consumer Price Index (CPI) will be crucial for short-term directions. That said, the bulls are likely to keep the reins as the CBRT diverges from the Fed when it comes the monetary policy actions. Technical analysis Unless breaking the 10-DMA level surrounding 18.55, not even the short-term USD/TRY sellers might risk taking entries.
Softer New Jobs Reading Would Likely Weigh On The Canadian Dollar

By Being The Leading Oil Exporter To The USA, Canada Can Strengthen Its Fiscal Balance

TeleTrade Comments TeleTrade Comments 10.10.2022 10:17
USD/CAD is preparing for a break above 1.3750 as DXY has refreshed its day’s high at 112.94. The tight US labor market has filled the Fed with confidence for announcing a bigger rate hike in November. The loonie bulls have failed to capitalize on better-than-projected Canada employment data. The USD/CAD pair is aiming to demolish the back-and-forth moves structure that remained in a narrow range of 1.3720-1.3740 in the early European session. The asset is preparing for an impulsive rally following the footprints of the US dollar index (DXY). The DXY has refreshed its day’s high at 112.94On a broader note, the asset is oscillating around the weekly hurdle of 1.3750 and may remain in the bullish arena amid negative market sentiment. The release of the upbeat US Nonfarm Payrolls (NFP) data on Friday has pumped the odds of a 75 basis point (bps) rate hike by the Federal Reserve (Fed). The upbeat economic catalyst has terrified investors, which has resulted in a bearish performance by S&P500. Also, the 10-year US Treasury yields have reached near 3.90%. A tight labor market has provided confidence to the Fed to announce a bigger rate hike unhesitatingly. A fourth consecutive 75 bps rate hike announcement by the Fed will push the interest rates to 3.75-4%, close to the targeted rate of 4.4%, as discussed in September’s dot plot. Going forward, the US Consumer Price Index (CPI) data will remain in limelight. Previously, the headline CPI dropped to 8.3%, however, the core CPI was escalated. It is expected that weaker gasoline prices will keep the headline CPI in check, therefore, the spotlight will remain on the core CPI. As per the consensus, the economic data is expected to improve to 6.5% from the prior release of 6.3%. Meanwhile, loonie bulls have failed to capitalize on better-than-projected employment data. The Net Change in Employment landed at 21.1k, higher than the projections of 20k. Also, the Unemployment Rate declined to 5.2% from the expectations and the prior release of 5.4%. On the oil front, the announcement of the production cuts by OPEC+ has titled the short-term trend towards the north. Apart from that, the reopening of China after a golden week holiday is promising that the demand for oil will pick up as Chinese manufacturing activities were shut down during the holiday period.  It is worth noting that Canada is a leading oil exporter to the US and higher fund inflows will strengthen its fiscal balance sheet.
GBP: Monitoring Data Outliers Amid Hawkish BoE Expectations

New Zealand Dollar (NZD) Needs Positive Attention And That Seems To Be Lacking At Present

TeleTrade Comments TeleTrade Comments 10.10.2022 10:24
The NZD/USD pair has slipped below the 0.56 mark. Economists at ANZ Bank note that the kiwi lacks positive attention at present. Local factors are simply not featuring “Local factors are simply not featuring, and anecdotally, NZ’s current account deficit is attracting more unwanted attention.” “In a world where US interest rates are leading the way higher, the NZD needs positive rather than negative attention, and that seems to be lacking at present.” “Support 0.5470/0.5565 Resistance 0.5820/0.6000/0.6160.” See – NZD/USD: Unlikely to return to 0.60 in 2022, seen at 0.56 by year-end – BofA
Hungary's Central Bank to Maintain Base Rate at 13%, Eyes on Effective Rate Amid Forint's Performance

The EUR/GBP Cross-Currency Pair Justifies The Escalating Fears Of The Eurozone’s Recession

TeleTrade Comments TeleTrade Comments 10.10.2022 10:34
EUR/GBP prints the first daily negative in five, grinds lower of late. Escalating fears of Eurozone recession, mixed political headlines from BOE keep sellers hopeful. BOE’s Bailey will face a tough task during his trip to Washington. Russia responds to Crimean bridge explosion by blowing Ukrainian President’s office. EUR/GBP fails to extend the four-day uptrend as it stays depressed near 0.8785 heading into Monday’s European session. In doing so, the cross-currency pair justifies the escalating fears of the Eurozone’s recession while trying to take positives from the mixed headlines from Britain. As per the latest update, the Bank of England (BOE) launches multiple intermediate measures to unleash liquidity into the UK market. Among the key measures discussed, the alterations in the repo facility will be important and can help the “Old Lady”, as the BOE is often called. Elsewhere, the fears of EU recession amplified after Russia’s reaction to the Crimean bridge explosion. Recently, the BBC came out with the news suggesting multiple large explosions hit Kyiv, marking it the first tragic event in months. It’s worth noting that the missiles also destroyed Ukrainian President Volodymyr Zelensky's office. While the UK is likely benefiting from the bloc’s fears of a pause in the European Central Bank’s (ECB) hawkish move, doubts over the BOE’s ability to tame the financial crisis triggered by chancellor Kwasi Kwarteng’s September 23 fiscal announcements can keep the EUR/GBP buyers hopeful. Furthermore, political pessimism in Britain also propels the cross-currency pair. Moving on, the aforementioned risk catalysts and the UK’s employment data can entertain the EUR/GBP traders ahead of Friday’s speech of BOE Governor Andrew Bailey. If Bailey fails to defend his latest surprises, the EUR/GBP may have further upside to track. Technical analysis EUR/GBP retreats from the one-month-old support-turned-resistance line, around 0.8815 by the press time, as it directs bears towards June’s peak surrounding 0.8720.
lower Corporate Supply Expected in H2 2023, Forecasting €85-100bn Total Supply

Domestic Factors Will Not Have A Significant Impact On The Malaysian Ringgit (MYR)

TeleTrade Comments TeleTrade Comments 10.10.2022 10:39
The Malaysian ringgit is nearing its closing low against the US dollar of 4.7125, reached in January 1998. Economists at ANZ Bank expect the MYR to remain under pressure into next year.  Ringgit a hostage to rampant dollar “There are some supportive factors for the MYR. Elevated oil prices are helping Malaysia maintain strong trade surpluses. We see oil prices pushing back toward $100/bbl in the near-term, which is positive for MYR. In addition, Malaysia has managed to attract portfolio inflows this year, which bucked the regional trend of large outflows.” “Given our view that the fed funds rate will reach a peak of 5.00% by Q2 2023, while the BNM will tighten more slowly to a terminal rate of 3.50% in the OPR, we expect the MYR to be under pressure into next year.” “Domestic factors, such as the budget, Malaysia’s growth resilience and the prospect of an early election, are unlikely to have a material bearing on the MYR. In the current environment, it is all about the USD.”
Czech National Bank Prepares for Possible Rate Cut in November

After Robust US Jobs Data Focus Shifts To US Inflation Data

Swissquote Bank Swissquote Bank 10.10.2022 11:06
Friday’s US jobs data wasn’t exactly what investors had wished for. The US unemployment rate printed last Friday was the lowest number since 1969 and came as another proof that whatever the Fed does, the US jobs data remains robust. As a result, the Fed hawks came back in force following the US jobs data on Friday. The US yields and the US dollar rose, equities and gold fell. Investors are focused on US inflation data this week. Elsewhere, crude oil continues rising whereas Joe Biden tries everything to reverse the rally, and the US earnings season kicks off with US big bank earnings. TSM will also reveal its Q3 results, but expectations are soft after Samsung announced 32% drop in its operating income and AMD warned they will miss estimates. Watch the full episode to find out more! 0:00 Intro 0:33 US jobs data was too robust… 2:41 Focus shifts to US inflation data 4:48 Swiss franc, gold down 5:40 Crude oil up 7:32 US earnings season kicks off with big bank, TSM earnings Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #jobs #data #NFP #unemployment #wages #Fed #USD #EUR #GBP #Gold #XAU #crude #oil #XOM #Tilray #pot #stocks #Biden #US #bank #earnings #season #AMD #TSM #Nvidia #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
The Euro To Swedish Krona (EUR/SEK) Pair Is In A Bullish Mood And Has A Chance To Move Up In The Near Future

The Euro To Swedish Krona (EUR/SEK) Pair Is In A Bullish Mood And Has A Chance To Move Up In The Near Future

TeleTrade Comments TeleTrade Comments 10.10.2022 11:52
EUR/SEK has formed a large bullish triangle. With this bullish pattern in place, analysts at Credit Suisse expect the pair to move higher toward 11.3650.  Move above 10.9799 to expose 11.0436 “EUR/SEK has recently confirmed a large bullish triangle continuation pattern, which we think likely sets the market up for a significant move higher over the next few months.” “We look for an eventual move above 10.9799 to expose the 78.6% retracement of the 2020/21 decline at 11.0436. Thereafter, should we see a convincing break here as well, we would see no reason not to look for a further ascent to the 2020 high at 11.3650.”
Continued Disinflation Trend in Hungary: July Inflation Figures and Prospects

View Of The US Dollar To South Korean Won (USD/KRW) Pair Remains Bullish

TeleTrade Comments TeleTrade Comments 10.10.2022 11:54
USD/KRW has breached its long-term channel. This move raises thoughts of a potential move to 1,597/1,600, in the opinion of analysts at Credit Suisse. Current correction seen as a temporary pause “USD/KRW has seen a major breakout above its long-term channel in August, which sets the market on course for an accelerated move higher. Whilst the current correction is seen as a temporary pause after RSI has reached oversold levels across all time frames, our core USD/KRW view remains bullish.” “We think further ascent to the 78.6% retracement of the 2009/2014 uptrend at 1,471 is likely to follow. Should we also see a direct break higher here, this would raise a serious prospect of eventually reaching 1,597/1,600 – the 2009 high.”
Commodities Feed: Chinese Data Weighs on Market, Black Sea Grain Deal Ends

The US Dollar To South African Rand (USD/ZAR) Pair Has Potential To Reach The All-Time High At 19.3446

TeleTrade Comments TeleTrade Comments 10.10.2022 12:07
USD/ZAR has maintained its uptrend throughout the third quarter of 2022. Analysts at Credit Suisse see potential to reach the all-time high at 19.3446. Uptrend from April at 16.8571 to curb any correction lower “We expect a solid break above 18.0709 to eventually take place, though we think there is certainly room for further ascent to follow towards the all-time high at 19.3446.” “We look for the uptrend from April at 16.8571 to curb any deeper correction lower to keep the upside pressure in place.”
FX Talking: The Dollar's Break Point Signals Lower US Inflation and Favorable Environment for Pro-Cyclical Currencies

The USD/CNY Pair Has Reversed Back Lower And Could Extend Its Decline

TeleTrade Comments TeleTrade Comments 10.10.2022 12:24
USD/CNY briefly challenged the peak of 2019 at 7.19. Since then, the pair has reversed back lower and could extend its decline on a dip under 7.02, economists at Société Générale report. Initial resistance aligns at 7.17/19 “USD/CNY has faced stiff resistance near the upper limit of a multiyear channel near 7.26 forming a weekly shooting star. This is not a reversal pattern but denotes temporary exhaustion.”  “An initial pullback is taking shape; 7.02, the 23.6% retracement from 23.6% is first support. In case this breaks, there would be a risk of a deeper down move.” “7.17/7.19 is immediate resistance zone.”
EUR/USD Rangebound Ahead of Data Releases and Rate Expectations

The Media Report Is Likely To Be Hungarian Forint (HUF) Supportive News

TeleTrade Comments TeleTrade Comments 10.10.2022 12:30
Local media in Hungary have reported that the Europen Council may be considering extending the deadline for a decision on freezing funds for Hungary by two more months. Thus, the forint should strengthen, economists at Commerzbank report. EC may extend deadline by two months “The usual decision timeframe was one month, but the EC could extend this by a maximum of further two months in exceptional circumstances – it appears that this extension is now being granted.” “The media report is likely to be HUF-supportive news: 1) it raises the probability that some compromise may be worked out in time for the funds to be released; and 2) crucially, that recent legislative changes announced by the Hungarian government (in an attempt to address corruption in the use of EU funds) is perhaps being viewed favourably by the EC.”
British Prime Minister Rishi Sunak Sees No Chance Of Reducing Inflation, Despite Promises To Halve It

BoE Dave Ramsden Says The Government's Mini-Budget Has A Huge Impact On The Economy

InstaForex Analysis InstaForex Analysis 10.10.2022 14:10
The Bank of England said it managed to avert a financial crisis with £65bn of temporary QE. Based on its calculations, pension funds would need to sell bonds worth £50 billion to obtain the liquidity necessary to maintain positions, which would look very problematic at the current trading volumes of £12 billion per day. Investors and the pound have calmed down for a while, but who knows if GBPUSD is waiting for new shocks? The main problem of Britain is the colossal negative balance of the current account. Because of the energy crisis, it has become even more inflated. It is necessary to patch up the holes by attracting capital from foreign investors, reducing domestic savings, or a fall in the sterling exchange rate. The fiscal stimulus package from Liz Truss suggests that in 2023–2024 Britain will have to sell bonds worth £226 billion on a net basis. If we add to this figure the scale of the BoE's QT, we get £390 billion, which is three times more than the previous record of £130 billion in 2010–2011. The question is, who will take all this? How to attract foreign investors? High yield? To do this, the Bank of England should significantly accelerate the process of tightening monetary policy. The futures market expects it to raise the repo rate by as much as 100 bps from 2.25% to 3.25% in November. And this is not the biggest figure. Amid the financial markets' shock, after the announcement of the terms of the tax cut program, there were significantly more. Dynamics of expected changes in the REPO rate One of the MPC's top hawks, BoE deputy governor Dave Ramsden, who voted in a previous meeting for a bigger rate hike than actually happened, argues that the government's mini-budget has a huge impact on the economy. But the Bank of England must stay on course to fight inflation. At the next meeting, a lot will depend on how strong the "hawks" turn out to be. In my opinion, if in late September and early October BoE became the one who extinguished the panic in the country's financial markets, then in November it may become its initiator. Borrowing costs should not rise too high, but they should not be too low, so as not to excite investors. Despite the stabilization of the pound, you need to understand how strong its opponent is in the face of the US dollar. Positive statistics on employment outside the agricultural sector and the fall in unemployment to 3.5% hint that the work of the Fed is far from done. The federal funds rate is likely to rise to 4.5–4.75% in 2023. In addition, aggressive monetary restrictions, a slowdown in the economy and the worst forecast for corporate profits for the quarter since 2020 contribute to lower stock indices and increase demand for safe-haven assets. Technically, on the GBPUSD daily chart, the fall of the pair below the moving averages increases the risks of a downward trend recovery. As long as the pound is trading below the 1.1085 pivot point, the recommendation is to sell.
Ralph Shedler's Technical Analysis Of The USD/JPY Pair

The Euro To Japanese Pair (EUR/JPY) Accelerates Its Losses

TeleTrade Comments TeleTrade Comments 10.10.2022 15:00
EUR/JPY extends the bearish move to the sub-141.00 region. Further downside could revisit the 139.80/50 band in the near term. EUR/JPY accelerates its losses and breaks below the 141.00 region to print new 2-week lows on Monday. The continuation of the decline would likely leave the recent peaks in the 144.00 neighbourhood as short-term tops. In case the downside accelerates, there is an interim support at the 139.80/50 band, where the 100- and 55-day SMAs converge. In the meantime, while above the key 200-day SMA at 136.20, the constructive outlook for the cross should remain unchanged. EUR/JPY daily chart  
The Hungarian Central Bank Confirmed Its Commitment To Keeping Conditions Tight For A Longer Period

Europe: The Latest Hungarian Budget Data Is Quite Surprising

ING Economics ING Economics 10.10.2022 15:33
The recent budgetary performance has been volatile from month to month. This time, we saw a positive surprise. We see further improvement in the short run but growing challenges in the long run Source: Shutterstock Budget deficit improves in September The Hungarian budget posted a HUF 181bn surplus in the month of September, after posting a deficit in August and a surplus in July. This is quite a surprise, especially considering the historic budgetary performances in September. After the good result last month, the cash flow-based year-to-date budget balance shows a HUF 2,691.7bn deficit, which amounts to 85.4% of the full-year target. The main reason for the improvement is the revenue side of the budget. The press release from the Ministry of Finance highlighted that tax- and excise duty-related income increased by almost 16% compared to a year ago. This outcome hardly comes as a surprise with the still positive real GDP growth and surging inflation, which boosts revenues. Cash flow-based year-to-date central budget balance Source: Ministry of Finance, ING   When it comes to the expenditure side, the press release did not reveal any new information about the budgetary developments. The latest information related to spending is that the government mandated a general “expenditure freeze” in late September. This takes us back to summer when the government ordered budgetary institutions to cut expenditures. It looks as though some of these institutions failed to meet their targets, and the government has now reacted. In practice, this “expenditure freeze” means that the finance minister will oversee all the invoices on spending. In our view, this decision is more of a political and management issue than a financing matter. 2022 deficit target increase is formally announced The Finance Ministry also announced – formally for the first time – that it increased the accrual-based (Maastricht) deficit-to-GDP target. The 1.2ppt increase to 6.1% is due to the accelerated accumulation of natural gas reserves by the Hungarian Hydrocarbon Stockpiling Association (HUSA), which covers roughly HUF 740bn worth of gas purchases. As Eurostat has counted HUSA as part of the public sector since 2019, its gas purchases increase the Maastricht deficit, while the debt taken by the association increases the public debt. However, since the extra purchases were sourced from a syndicated loan with a state guarantee, this did not generate a debt financing requirement. To put it more simply, the deficit from a cash-flow perspective was not affected by this, so the higher deficit target is purely a technical change. Steps might be needed to meet the 2023 deficit target Looking forward, we expect a significant improvement in the budgetary figures as the latest tax measures (e.g. windfall tax-related payments) will start to boost revenues alongside rising inflation. On the other hand, due to higher inflation, the government needed to adjust the pension expenditure to preserve its purchasing power at a real value, fulfilling a legal requirement. This, with an extra one-off pension bonus (due to the expected +3.5% real GDP growth in 2022), will create an extra budgetary burden of roughly HUF 200bn in November. But even with that, we expect the government to be in line with this year’s cash flow and accrual-based deficit targets. Next year, however, could be trickier as the 2023 budget included a 3.5% deficit target. The severely dampened economic outlook compared to the summer outlook might provide some extra hurdles. The government will reveal the amended budget in late December when we still see the government keeping the original 3.5% deficit target, but probably deciding on some measures on both the revenue and the expenditure sides. Read this article on THINK TagsHungary Fiscal policy Deficit Debt Budget Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Is Showing A Potential For Bearish Drop

This Week USD May Be Fluctuating! Euro To US Dollar - Technical Analysis And More - 10/10/22

InstaForex Analysis InstaForex Analysis 10.10.2022 22:02
In the intermediate-term, the pair is just above the newly visited price levels around 0.9600 that haven't been visited since 2002. That's why, some bullish recovery was recently demonstrated especially around such an important psychological support. The nearest supply level was located around 1.0200 where bearish rejection and a short-term SELL Entry were anticipated. Hence, another bearish pullback to test the price levels of 0.9500 was recently executed. Intensive bullish price action was demonstrated around these price levels (the lower limit of the current movement channel). Initial bullish target around 1.0100 is about to be achieved. On the other hand, any quick bearish pullback towards the price levels of 0.9520 should be considered as a valid BUY opportunity. Relevance up to 18:00 2022-10-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/296189
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

The Current Scenario In The US Dollar To Japanese Yen Pair (USD/JPY)

InstaForex Analysis InstaForex Analysis 11.10.2022 08:10
USD/JPY: The chart shows the movement of USD/JPY in the 30-minute (M30) chart. The current scenario in which the inclined solid line is approaching the resistance level of £145.81 and could possible intersect with it forms a divergence area where three movements could develop. First is a rise towards £145.81, then a reversal to £144.92. Second is moving to the support level of £145.81, a breakdown, then a rush towards £147.30. Lastly is a rebound towards £144.92 without reaching £145.81. Good luck!   Relevance up to 16:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323887
Asia Morning Bites: Focus on Regional PMI Figures, China's Caixin Manufacturing Report, and Upcoming FOMC Minutes and US Non-Farm Payrolls"

Walgreens Boots Alliance Inc Was The Leading Gainer In The Dow Jones Index

InstaForex Analysis InstaForex Analysis 11.10.2022 08:15
At the close of the New York Stock Exchange, the Dow Jones was down 0.32%, the S&P 500 was down 0.75% and the NASDAQ Composite was down 1.04%. Walgreens Boots Alliance Inc was the leading gainer in the Dow Jones Index today, up 1.32 points or 4.33% to close at 31.84. Merck & Company Inc rose 2.88 points or 3.29% to close at 90.48. Boeing Co rose 2.11 points or 1.63% to close at 131.90. The losers were Salesforce Inc, which shed 4.65 points or 3.09% to end the session at 145.64. Microsoft Corporation was up 2.13% or 4.99 points to close at 229.25, while Walt Disney Company was down 2.06% or 2.00 points to close at 95. 16. Leading gainers among the S&P 500 index components in today's trading were Walgreens Boots Alliance Inc, which rose 4.33% to 31.84, Moderna Inc, which gained 3.44% to close at 123.42, and also shares of McCormick & Company Incorporated, which rose 3.30% to end the session at 75.86. The biggest losers were Wynn Resorts Limited, which shed 12.25% to close at 64.14. Shares of Bio-Rad Laboratories Inc shed 8.33% to end the session at 393.19. Quotes Norwegian Cruise Line Holdings Ltd fell in price by 7.91% to 11.88. Leading gainers among the components of the NASDAQ Composite in today's trading were Applied DNA Sciences Inc, which rose 70.97% to 2.12, Immunic Inc, which gained 56.57% to close at 6.20, and also shares of Green Giant Inc (NASDAQ:GGE), which rose 39.26% to end the session at 2.27. Shares of Siyata Mobile Inc were the biggest losers, losing 59.33% to close at 0.12. Shares of Minim Inc lost 29.38% and ended the session at 0.23. Quotes of Acm Research Inc decreased in price by 26.50% to 9.04. On the New York Stock Exchange, the number of securities that fell in price (2031) exceeded the number of those that closed in positive territory (1053), while quotes of 120 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,297 companies fell in price, 1,471 rose, and 191 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 3.48% to 32.45. Gold futures for December delivery lost 2.01%, or 34.40, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 1.89%, or 1.75, to $90.89 a barrel. Futures for Brent crude for December delivery fell 2.08%, or 2.04, to $95.88 a barrel. Meanwhile, in the Forex market, the EUR/USD pair was unchanged 0.40% to 0.97, while USD/JPY was up 0.27% to hit 145.73. Futures on the USD index rose 0.36% to 113.09.   Relevance up to 05:00 2022-10-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/296222
The Downside For The AUD/USD Pair Is Likely To Remain Cushioned

The Australian Dollar To US Dollar (AUD/USD) Pair Is On The Way To The Oversold Zone

InstaForex Analysis InstaForex Analysis 11.10.2022 08:23
On Monday, the Australian dollar decisively overcame the supports of the embedded price channel lines of the weekly timeframe (green lines). Now the price is heading to the next target - to the underlying line of the price channel around the level of 0.6205. The Marlin Oscillator is starting to hint at convergence with the price, but so far this is just an indication to enter short positions with reduced volumes. Weak data on Australia came out today. The Westpac consumer sentiment index for October fell by 0.9%, the NAB business confidence index for September fell from 10 to 5 points. On the four-hour chart, the price settled below the level of 0.6310, the Marlin Oscillator is not turning up yet, it only consolidated on the way to the oversold zone, which indicates its intention to go deeper into this area.   Relevance up to 04:00 2022-10-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323917
The Market May Continue To Buy The Pound (GBP) This Week

The Potential Of The GBP/USD Pair Is More Downward Than Upward

InstaForex Analysis InstaForex Analysis 11.10.2022 08:33
The pound settled below the level of 1.1170, but is trying to return to it with the support of the Marlin Oscillator, which turned into negative territory and is approaching the border with the growth territory. It is possible for the price and the oscillator to work out their resistances simultaneously and turn down. The first target at 1.0820 is the green line of the monthly price channel. On the H4 chart, the price moves sideways directly along the MACD indicator line. Marlin also moves in a horizontal direction. The potential is more downward than upward. In any case, either with the development of 1.1170 or without it, we are waiting for the price at the target level of 1.0820.   Relevance up to 04:00 2022-10-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323919
The EUR/USD Pair Has Opportunities For Bullish Movement

The Overall Situation Of The Euro To US Dollar (EUR/USD) Pair Is Down

InstaForex Analysis InstaForex Analysis 11.10.2022 08:39
Yesterday, the euro overcame the support of 0.9724, but has not yet consolidated below the level. To settle below this area, you need to close today's candle below this level. Of course, there is such a possibility, but the signal line of the Marlin Oscillator is turning up, which already calls into question the further vigorous price decline. In case of reverse consolidation above the level of 0.9724, a corrective growth from the previous 4-day decline to the level of 0.9855 is possible. The condition for the continuation of the decline is to overcome yesterday's low of 0.9682. The price consolidated under the MACD line and under the price level of 0.9724 on the four-hour chart. The Marlin Oscillator is in negative territory. The overall situation is down, and unless there is some very positive news for the eurozone, the decline may continue. Aim for 0.9520.   Relevance up to 04:00 2022-10-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323921
The Cable Market (GBP/USD) Is Defending The Psychological Level Of 1.10

The Cable Market (GBP/USD) Is Defending The Psychological Level Of 1.10

InstaForex Analysis InstaForex Analysis 11.10.2022 08:47
Early in the European session, the British pound (GBP/USD) is trading at around 1.1061 above the 21 SMA. On the 1-hour chart, we can see the sharp break of the symmetrical triangle. Only if GBP/USD settles above the psychological level of 1.10, a recovery could occur. According to the 1-hour chart, we can see that since October 4, the British pound has been trading within a downtrend channel. A sharp break of this channel could mean recovery for the pair and it could reach the 200 EMA located at 1.1150 and could even reach the resistance zone of 7/8 Murray at 1.1230. GBP/USD is defending the psychological level of 1.10. Yesterday in the American session, it reached a low of 1.1018. In the coming hours, the British pound is expected to trade above this level and could reach the resistance zone of 1.1348. On the 4-hour chart, there is the 200 EMA and it will be an immediate target. The non-farm payrolls report was better than expected, which supports the Fed's plan for further tightening. In addition, the unemployment rate fell from an estimated 3.7% to 3.5%. This information creates pressure on GBP/USD. In case of a drop below 1.10, the pair could fall towards the support of 1.0742 (0/8 Murray). The area of 1.1000 - 1.1020 has become a strong support for the British pound. In case of a technical bounce around this level in the next few hours, it will be seen as a buying opportunity with targets at 1.1150 (200 EMA) and 1.1362. The eagle indicator is giving a positive signal. It is likely that if the British pound recovers above 1.1020, the outlook will be positive. If GBP/USD consolidates above 1.1150, the signal will clearly suggest buying with targets at 1.1230 (7/8 Murray) and 1.1362.   Relevance up to 07:00 2022-10-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/296240
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The Demand For The Euro (EUR) Is Rising But The US Dollar (USD) Situation Does Not Allow The Euro To Grow

InstaForex Analysis InstaForex Analysis 11.10.2022 08:52
EUR/USD 5M The EUR/USD pair continued its downward movement on Monday. Since both lines of the Ichimoku indicator have been overcome, we have formed a new downward channel, which emphasizes the current trend. The euro continues to steadily fall to its 20-year lows, to which only 150 points remain to go. Now we have no doubt that a new update of these lows is just around the corner. Of course, there will be several events this week that could change the mood of the market. For example, a report on US inflation, which will largely determine how much the Federal Reserve will raise the rate at the next meeting. Several important geopolitical events may also happen. However, if you look only at the technique, then the euro's fall does not raise doubts and questions. The pair's volatility decreased on Monday, which is not surprising, since there were no important events either in the US or in the European Union on that day. In regards to trading signals, the situation was as simple as possible, since not a single one was formed yesterday. We believe that this is not bad, since in conditions when the movement is not the strongest and volatility is not high, several false signals could have been formed. Therefore, it is better to be without profit than at a loss. COT report: The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 9,300, and the number of shorts by 19,200. Accordingly, the net position grew by about 9,900 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 45,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 11. This has never happened - and here you are, again! Overview of the GBP/USD pair. October 11. "Anti-British" sentiment continues to grow in Scotland. Forecast and trading signals for GBP/USD on October 11. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The upward trend has finally been canceled on the hourly timeframe. This week, we can observe a systematic decline in the pair's quotes, and even with the presence of important events and reports, we do not believe that the market mood will change dramatically. It is now clear that the last round of the upward movement was another correction within the global downward trend, which means that the pair has now resumed its march to the downside. On Tuesday, we highlight the following levels for trading - 0.9553, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9767) and Kijun-sen (0 .9840). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. There are no important events and reports planned in the EU and the US on Tuesday, so the day can be relatively calm. However, the euro may continue to fall. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group. Relevance up to 02:00 2022-10-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323909
The GBP/USD Pair May Trade Horizontally Today

The Cable Market (GBP/USD) Pair Has Already Rolled Back Down

InstaForex Analysis InstaForex Analysis 11.10.2022 08:57
GBP/USD 5M The GBP/USD currency pair continued to trade lower on Monday, but at the same time, volatility fell sharply compared to previous days, and the downward movement slowed down. Thus, while the pound still retains chances for the resumption of upward movement, as it continues to be located above the Senkou Span B line on the hourly timeframe. It also remains above the Kijun-sen line on the 24-hour timeframe. It is these two lines that still allow us to count on the resumption of the pound's growth. Unfortunately, these lines are opposed by the geopolitical and fundamental factors that have been pushing the pound down for a long time, so it is not clear why they would suddenly cease to exert their destructive influence on it. We believe that while the pound may continue to fall, and if such lines are overcome, then the fall will continue with 1.0357 as the target. Although the pound managed to grow significantly recently, traders are selling it again, which means that the global downward trend may continue this time. The situation with trading signals for the pound is the same as for the euro. There was no signal on Monday. Thus, it was not necessary to open trading positions yesterday. In fairness, it should be noted that the downward movement, although it took place, was very weak and looked more like a flat. Therefore, in any case, trading on Monday would be extremely inconvenient and you could get more losses than profits. COT report: The latest Commitment of Traders (COT) report on the British pound showed minimal changes. During the week, the non-commercial group closed 17,700 long positions and 14,600 short positions. Thus, the net position of non-commercial traders decreased by 3,100, which is not a lot for the pound. We could assume that the actions of major players and the movement of the pound have finally begun to coincide, but the pound has already begun a new round of decline, which risks transforming into a continuation of the global downward trend. The net position indicator has been growing slightly over the past weeks, but the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 42,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 11. This has never happened - and here you are, again! Overview of the GBP/USD pair. October 11. "Anti-British" sentiment continues to grow in Scotland. Forecast and trading signals for EUR/USD on October 11. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair has already rolled back down by 470 points on the hourly timeframe, but at the same time it still retains theoretical chances for a resumption of the upward trend. Unfortunately, in the long term, the downward trend may well resume as geopolitics remain very complex. And the foundation - at least such that does not allow counting on the support of the British currency. Traders should now focus on geopolitics and Senkou Span B on the 4-hour timeframe and Kijun-sen on the 24-hour time frame. Overcoming them will increase the probability of a new fall of the pound to its absolute lows around the level of 1.3057. On October 11, we highlight the following important levels: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.0923) and Kijun-sen (1.1258) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. Data on wages, unemployment will be published in the UK, and in the evening there will be a speech by Bank of England Governor Andrew Bailey. We believe that Bailey's speech will be the most important event of the day, as the BoE may raise rates by more than 0.5% next month (according to rumors). Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-10-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323911
Craig Erlam and Jonny Hart talk UK Autumn Statement and more

The Price Pressures Are At Elevated Levels In The UK Economy

TeleTrade Comments TeleTrade Comments 11.10.2022 09:34
GBP/JPY is hovering around 160.80 as investors await UK employment data. Escalating Russia-Ukraine tensions have intensified the risk-off impulse. A dismal UK earnings data could dampen the sentiment of UK households. The GBP/JPY pair has turned sideways around 160.80 as investors are awaiting the release of the UK employment data. In the early Tokyo session, the cross declined firmly while attempting to sustain above the critical hurdle of 161.50. The dismal market mood kept the cross on the tenterhooks and investors picked the pullback opportunity to create fresh shorts. Risk-perceived currencies are witnessing an intense sell-off as geopolitical tensions between Russia and Ukraine have fired up again after Ukrainian military troops damaged the Crimea bridge that serves as a supply line for military troops in southern Ukraine. In response to that, Russia intensified missile attacks at Kyiv. Reports from Reuters cited that Russia has launched its most widespread air strikes since the start of the Ukraine war, raining cruise missiles on busy cities during rush hour and knocking out power and heat. In today’s session, investors’ focus will be on the UK employment data. The Claimant Count Change is expected to decline by 11.4k vs. an increment of 6.3k. While the ILO Unemployment Rate is seen steady at 3.6%. As price pressures are at elevated levels in the UK economy, therefore, the Average Earnings data will also remain in focus. The economic data excluding bonuses is seen higher by 10 basis points (bps) to 5.3%. The dismal improvement in the earnings data would be unable to offset the impact of higher payouts by the households. This could dent the sentiment of households further. Apart from that investors are awaiting the speech from Bank of England (BOE) Governor Andrew Bailey, which is due on Tuesday. BOE policymaker is expected to provide cues for the likely monetary policy action ahead.
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The New Zealand To US Dollar (NZD/USD) Pair Bears Hold Onto The Control

TeleTrade Comments TeleTrade Comments 11.10.2022 09:45
NZD/USD prints four-day downtrend to refresh 2.5-year low. RBNZ’s Orr, mixed Fedspeak failed to trigger corrective bounce as yields renew multi-year high. US inflation, Fed Minutes will be crucial for the week but bears are likely to keep the reins. NZD/USD bears hold onto the control as the quote renews a 31-month low around 0.5535, close to 0.5545 heading into Tuesday’s European session. The kiwi pair’s latest fall takes clues from the broad US dollar strength as traders rush towards the risk safety amid the first day of full markets. In doing so, the quote ignores the early Asian session comments from the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr. That said, RBNZ’s Orr reiterated that there is more work to do to reduce inflation. Also could have challenged, but ignored, were the mixed comments from the Fed policymakers. Chicago Fed President Charles Evans said on Monday that the US can lower inflation relatively quickly without recession or a large increase in unemployment. The policymaker also added that the Fed needs to "carefully and judiciously" navigate to a "reasonably restrictive" policy rate. It should be noted that Federal Reserve Vice Chair Lael Brainard made the case for cautious rate hikes for the future, per the Wall Street Journal (WSJ). It’s worth noting that the US Dollar Index (DXY) prints 0.21% intraday gains as it prints a five-day uptrend near 113.40. In doing so, the greenback’s gauge versus the six major currencies traces the US Treasury yields as the US 30-year Treasury yields rise to a fresh high since January 2014 whereas the 10-year counterpart pokes the 4.0% threshold. Also favoring the DXY is the CME’s FedWatch Tool which signals a 78.4% chance of the Fed’s 75 bps rate hike in November. Furthermore, the recently fierce Russia-Ukraine tussles and the Sino-American tensions add strength to the risk-aversion wave that drowns the NZD/USD prices. While portraying the mood, the S&P 500 Futures that drop 0.50% as bears lean towards the monthly low. Moving on, multiple Fed policymakers are up for speeches during the day and can entertain NZD/USD traders, mostly the sellers. However, major attention will be given to the Federal Open Market Committee (FOMC) Meeting Minutes and the US Consumer Price Index (CPI) data for September, up for publishing on Wednesday and Thursday respectively. Technical analysis A clear downside beak of the previous monthly low directs NZD/USD towards the year 2020’s bottom surrounding 0.5470.
Stocks Rebound Amid Rising Volatility: Analysis and Outlook

Expectations Regarding The Bank Of Korea (BoK) Decision

TeleTrade Comments TeleTrade Comments 11.10.2022 09:58
The Bank of Korea (BoK) will hold its Monetary Policy Committee (MPC) meeting on Wednesday, October 12 at 01:00 GMT and as we get closer to the release time, here are the expectations as forecast by the economists and researchers of six major banks.  At the last meeting on August 25, the bank hiked rates by 25 basis points (bps) to 2.50%. Now, the BoK could increase rates by 50 bps to 3% though some banks call for another 25 bps hike. ANZ “We expect the BoK to hike its policy rate by 50 bps against a backdrop of persistent price pressures and rising concerns about stability. The BoK has made it clear that inflation will remain its top priority if it stays between 5-6%. The latest September datashowed the headline print at 5.6% YoY, which is likely to pick up in October amid hikes to electricity and city gas prices, before moderating gradually thereafter. A 50 bps rate hike by the BoK would help contain the negative policy rate differential with the US and complement recently announced market stabilisation measures.” SocGen “We expect a unanimous decision to hike rates by 25 bps from 2.50% to 2.75%. Persistent inflation concerns and the short-term ‘forward guidance’ until the end of this year support continued rate hike action in October. We maintain our base-case scenario for a terminal BoK policy rate at 3.0% after two 25 bps hikes in October and November, which is in line with the BoK’s implicit, near-term forward guidance that was hinted at quite a few times by Governor Rhee. Of course, we will closely monitor Governor Rhee’s press conference for any long-term forward guidance on monetary policy.”  UOB “While we see a 25 bps hike in the 7-day repo rate to 2.75% as the base case, the prospect of a more aggressive 50 bps hike to 3.00% has increased. Thus, the odds are certainly tilted towards a higher terminal interest rate than our current forecast of 3.00% as BoK is likely to hike further in Nov (last meeting of 2022) and even into 1Q23 if inflation does not cool as fast as it hoped. We will get a better sense of that from BoK’s post-decision press conference.” Standard Chartered “We expect the BoK to hike the policy rate by 50 bps to align with the Fed and contain inflation. If the BoK hikes by only 25 bps in October and the Fed by 75 bps in November, the rate differential would go beyond 1%. BoK’s governor signalled that the central bank will aim to maintain a rate differential of less than 1%; we therefore expect a 50 bps rather than a 25 bps hike. We also do not see BoK hiking aggressively by 75 bps, given already high household debt and declining housing prices. Also, moderating CPI should ease pressure on the BoK for more hawkish hikes. We expect the BoK to hike by 25 bps each in November 2022, January 2023 and February 2023 to control inflation (which remains above 5%).” ING “We expect the BoK to raise interest rates by 50 bps, given the faster-than-expected rate hike by the Fed coupled with persistently high domestic inflation.” TDS “Recent hawkish BoK comments, elevated and sticky inflation, and weaker KRW, all point to another 50 bps move at this meeting. While BoK is unlikely to follow the Fed toe to toe, further hikes are likely.” See: USD/KRW set to advance nicely towards 1,597/1,600 – Credit Suisse
Despite The Improvement In The Outlook Due To Falling Energy Prices, The Economic Environment In Britain Remains Difficult

The Bank Of England's Decision To Temporarily Suspend The Sale Of Corporate Bonds

TeleTrade Comments TeleTrade Comments 11.10.2022 10:03
The Bank of England (BOE) announced in a statement on Tuesday, it will temporarily pause corporate bond sale operations this week. Additional takeaways   Intends to purchase index-linked gilts Purchase of linkers will take effect from Oct 11 to Oct 14 Linker purchases will act as backstop to restore orderly market conditions Linker purchases are time-limited, indemnified by treasury Has consulted with debt management office Repeats that it stands ready to purchase up to 10 bln stg of gilts each day Purchase of long-dated conventional gilts unaffected by latest announcement on linkers Size of each linker purchase operation will be up to GBP5 bln. Will set minimum yield that will be applied to temporary purchases of linkers. Will not allocate offers for linkers at real yields below levels observed at close on Monday. Would be likely to accept most offers above market mid-yields at close of linker purchase operation. Purchase of linkers to take place at 1315-1345 GMT, conventional long-dated 1415 GMT to 1445 GMT. Intends to purchase linkers with residual maturity of three years and above.   Market reaction GBP/USD is fading its bounce, battling 1.1000 on the BOE headlines. The cable jumped to near 1.1040 after the mixed UK jobs report. The spot is down 0.43% on the day.
Forex: Most NOK Gains May Be Channelled Against The Dollar

The Euro To Norwegian Krone (EUR/NOK) Pair Keeps Staying Above The 10 level

TeleTrade Comments TeleTrade Comments 11.10.2022 10:13
Inflation in Norway surprised to the upside in September. The krone benefited from the data but the EUR/NOK is set to stay above the 10 level for now, economists at Commerzbank report. Inflation points towards Norges Bank tightening course “The overall rate rose by 6.9% YoY, the core rate by 5.3%. Both rates are already above Norges Bank’s expectations according to its monetary policy report of September. First of all, that illustrates that Norges Bank will stick to its signalled rate hike cycle.”  “The September data also increased the likelihood that Norges Bank will tighten its rate path again and might adjust the peak of its key rate.” “The NOK was able to benefit from the publication of the data yesterday, but negative market sentiment is preventing more substantial gains – regardless of the higher oil price. For that reason, it might still take a while before EUR/NOK eases below 10 again.”
UK Inflation Data Boosts Chances of August Rate Hike

The USD/CHF Traders Will Pay Attention To The speech From SNB’s Jordan

TeleTrade Comments TeleTrade Comments 11.10.2022 10:16
USD/CHF bulls take a breather after refreshing multi-day top. Firmer yields and risk-aversion joins hawkish Fed bets to propel DXY. SNB Chairman Jordan’s failure to convince markets of further rate hikes can propel the quote beyond 1.0050-65 key hurdle. USD/CHF bulls flirt with the parity during the five-day uptrend early Tuesday in Europe, after rising to the highest levels since June. The Swiss currency (CHF) pair’s latest gains could be linked to the market’s rush towards the risk safety, as well as anxiety ahead of today’s speech from Swiss National Bank (SNB) Chairman Thomas Jordan. The market’s sour sentiment take clues from the intensifying Russia-Ukraine tussles as Moscow shells Kyiv after witnessing an explosion at the Crimean bridge. On the same line are the fears surrounding China’s take on Taiwan and the US's friendship with the Asian nation. While portraying the mood, the S&P 500 Futures that drop 0.50% as bears lean towards the monthly low. Additionally, hawkish Fedbets and firmer Treasury bond yields also portray the market’s risk-off mood and underpin the US Dollar’s strength. That said, the US Dollar Index (DXY) rises 0.18% intraday gains as it prints a five-day uptrend near 113.40. In doing so, the greenback’s gauge versus the six major currencies traces the US Treasury yields as the US 30-year Treasury yields rise to a fresh high since January 2014 whereas the 10-year counterpart pokes the 4.0% threshold. Also favoring the DXY is the CME’s FedWatch Tool which signals a 78% chance of the Fed’s 75 bps rate hike in November. The mixed Fedspeak and the US holiday on Monday couldn’t disappoint the DXY bulls. Chicago Fed President Charles Evans said on Monday that the US can lower inflation relatively quickly without recession or a large increase in unemployment. The policymaker also added that the Fed needs to "carefully and judiciously" navigate to a "reasonably restrictive" policy rate. It should be noted that Federal Reserve Vice Chair Lael Brainard made the case for cautious rate hikes for the future, per the Wall Street Journal (WSJ). Looking forward, USD/CHF traders will pay attention to the speech from SNB’s Jordan to confirm further rate hikes from the Swiss central bank. Should Jordan manage to convince hawks, the quote may witness a pullback. However, major attention will be given to Wednesday’s Federal Open Market Committee (FOMC) Meeting Minutes and Thursday’s US Consumer Price Index (CPI) data for September. Technical analysis Although the USD/CHF buyers cheer the pair’s sustained trading above the monthly support line, around 0.9875 by the press time, a five-month-long horizontal resistance area near 1.0050-65 appears a tough nut to crack for the bulls amid the nearly overbought RSI.
Analysis Of Tesla: A Temporary Corrective Rally Should Not Come As A Surprise

Tesla's China Sales Hit Record And Selloff In Treasuries Continue

Swissquote Bank Swissquote Bank 11.10.2022 11:42
Risk sentiment is morose this week with the escalating tensions in Ukraine, rising Covid cases in China, mounting tensions between US and China, the selloff in US and other treasuries, the relentless appreciation in the US dollar and the drop in safe haven currencies. Situation on forex market The Swiss franc lost ground against the greenback and the USDCHF rose above parity. The Japanese yen continued its historic fall as well, the dollar yen advanced to 145.80. Gold fell for the fifth day to $1660 per ounce, and is set to dive deeper toward the $1600 level on the back of a relentless rise in the US yields and the dollar. And the US yields press higher on the back of hawkish Federal Reserve (Fed) pricing, despite a couple of less hawkish comments from some Fed members at the start of the week. Marcoeconomy events The US 2-year yield advanced to 4.35%, and activity on Fed funds futures price 77.5% chance for a 75bp hike at next FOMC meeting. Even the UK yields shot higher despite the Bank of England’s (BoE) announcement of more measures to calm down the Truss-hit gilt market. At least, the avalanche of bad global news has been successful in pulling oil prices lower yesterday. The barrel of American crude eased to $90 this morning, after having flirted with $94 a barrel on Monday. US earnings season kicks off in a dark and depressed environment. According to data from FactSet, the EPS growth of the S&P500 companies should fall by 2.6% to below 10% in the Q3. Watch the full episode to find out more! 0:00 Intro 0:34 Ukraine war, rising Chinese Covid cases & US-China tensions 1:48 Chip stocks do poorly 2:33 Even safe havens are not safe 4:22 And selloff in Treasuries continue at full speed 5:50 Oil bounced lower 6:51 Earnings probably grew slower in Q3 7:32 BoE tries hard, but Truss govt is just… a disaster 9:10 Tesla's China sales hit record! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Ukraine #Russia #war #China #Covid #chip #stocks #Nvidia #AMD #Tesla #earnings #season #Fed #BoE #USD #GBP #gilt #intervention #Gold #XAU #CHF #JPY #crude #oil #Bitcoin #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Bank Of France (BoF) Expects Lower GBP For Q3 And The Situation On Phosphate Fertilizer Mining Industry

Bank Of France (BoF) Expects Lower GBP For Q3 And The Situation On Phosphate Fertilizer Mining Industry

Saxo Bank Saxo Bank 11.10.2022 13:05
Summary:  Sentiment remains wobbly as US equity markets edged toward the cycle lows yesterday, with the interest rate sensitive Nasdaq 100 index even posting a new bear market low as US yields lifted higher once again. Fed Vice Chair Brainard voiced the first cautious comments we have seen in a while on the effects of the Fed’s policy tightening even as she argued that tightening will continue. Ahead of the largest US banks kicking off earnings season on Friday, JP Morgan CEO Jamie Dimon says he expects a US recession in six to nine months.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities continued lower yesterday with S&P 500 futures touching the 3,600 level again before bouncing back a bit into the close. This morning the index futures are trading around the 3,608 level with the 3,593 level being the key level on the downside to watch. With the US 10-year yield back at the 4% level this morning we expect the pressure to continue in US equities and our thesis is also that the upcoming Q3 earnings season starting this week will lead to earnings downgrades and disappointments in the outlook. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Stocks traded in Shanghai and Shenzhen bourses stabilized and traded little changed from yesterday’s closes, with power generation and lithium producers gaining. Guangzhou Tinci Materials (002709:xsec) was 10% limit up and CATL (300750:xsec) rose 5%. CATL preannounced Q3 net income surging 169-200% Y/Y to RMB8.8-9.8 billion. China National Nuclear Power (601985:xssc) surged 7.2% after the company reported a 7.2% Y/Y electricity output growth in the first 9 months of the year. Hong Kong’s Hang Seng Index continued to slide, falling around 2% with China Internet names leading the charge lower. Alibiba(09988:xhkg), Tencent (00700:xhkg), JD.COM (09618:xhkg), Meituan (03690:xhkg), Bilibili (09626:xhkg) declined from 3% to nearly 9%. USD and US yields/risk sentiment USD strength continues as risk sentiment remains wobbly and the entire US treasury yield curve lifted once again, taking the 10-year treasury yield back to the key 4.00% cycle high area. USDJPY continued its tentative move above 145.00, closing in on 146.00 with no official response yet, while AUDUSD posted impressive new lows near 0.6250 overnight and USDCNH is pushing on the 7.20 level once again – the former range top from 2019 and 2020. EURUSD and especially GBPUSD have some more range to work with before posting cycle lows. The next test for the US dollar will be tomorrow’s FOMC minutes, but the event risk of the week will be Thursday’s September US CPI data point and whether traders feel a single month’s data can meaningfully shift the Fed’s stance, given evidence of a still very tight labor market. Gold (XAUUSD) Gold’s short-covering driven rally from last week continues to fade as the dollar regains strength and the US bond yields return to their recent peaks as the prospect for further and aggressive monetary-policy tightening weighs on the market. The latest COT report covering the week to October 4 showed funds changing their net position from the biggest short in almost four years to a small net long. With renewed dollar strength in focus the risk of fresh albeit more muted short selling exists with gold’s renewed upside push unlikely until the market feels convinced that the Fed has reached peak hawkishness. Support at $1658 with a break below signaling the risk of an even deeper retreat. Focus this week on US PPI and CPI prints. Crude oil (CLX2 & LCOZ2) trades lower on renewed demand concerns Last week’s OPEC driven price jump faded further overnight with the risk sentiment once again souring across markets on worries the global economy, including the US, will face a very challenging 2023. In addition, the authorities in China have signaled there will be no letup in their steadfast belief in the nation’s Covid zero policy, thereby potentially prolonging a slump in demand from the world’s biggest importer. For now, the time spreads in Brent continue to signal tightness with the December contract trading 9% above the June 2023 contract. Monthly oil market reports from the EIA and OPEC on Wednesday and the IEA on Thursday will be watched closely for any changes in the supply and demand outlook. Wheat futures (ZWZ2 & WHEATDEC22) jump to a three-month high The December benchmark wheat contract in Chicago surged to near the daily limit on Monday amid worsening Russia/Ukraine tensions and a worsening US crop outlook. Any slowdown in shipments of high protein wheat from the Black Sea may boost prices further and before the latest escalation shipments from Ukraine are already being delayed as the backlog of outbound vessels awaiting inspection in Istanbul has increased. The Ukraine grain export agreement comes up for renewal next month and with Russia losing the war the risk of further desperate measures may put the deal at risk. The rally in December wheat ran out of steam above $9.45 and may now pause ahead of a key crop report from the US Department of Agriculture on Wednesday. US treasuries (TLT, IEF) US treasury yields continued lifting late yesterday and overnight after a the bank holiday in the US yesterday. This has taken the 10-year treasury benchmark yield back close to the round 4.00% level that is a significant psychological milestone and near the 14-year high for the benchmark. Yields rose even as Fed Vice Chair Brainard voiced the first cautious notes we have heard in a while from an important Fed figure (see more below). The next key test for yields as we believe we are nearing “peak hawkishness” from the Fed soon, is more Thursday’s US CPI data point than tomorrow’s FOMC minutes, which may contain few surprises, given nearly all Fed members are on the same page in supporting the current tightening regime. What is going on? The UK government brings forward its budget plans to 31 October The UK government will announce its fiscal plan at the end of this month, more than three weeks earlier than initially scheduled. The plan is built on the ‘mini-budget’ of 45 billion pounds presented in September. It triggered a rout in financial markets which forced the Bank of England to step in the market. The advance release is aimed to appease markets and to provide insights on how the government will pay for tax cuts and what their long-term impact would be. On 31 October, the Office for Budget Responsibility will also publish its latest forecasts, including an impartial assessment of the macroeconomic consequences of the ‘mini-budget’. Fed Vice Chair Brainard signals peak hawkishness approaching, but still higher for longer rates Lael Brainard sounded a small note of caution on Fed’s tightening, saying that it will take time for rate hikes to bring inflation down while also highlighting slowing growth, cooling labor market and financial vulnerabilities. Still, she reaffirmed that monetary policy will be restrictive for some time. Charles Evans remained in favor of front loading, saying that the Fed should quickly reach levels where policymakers feel comfortable pausing to reduce the risk of overshooting. BoE on course to end buyback operations but announced fresh liquidity measures The Bank of England announced it remains on course to end its temporary buy-back auctions at the end of the week and is switching to liquidity support via expanded collateral repos, also for a limited period to help banks with customers that are not entirely hedged against LDI exposure. Gilts plunged as investors remained worried, with 30-year yields rising above 4.7% and 20-year touching a high of 4.9%. Meanwhile, the medium-term fiscal plan is to be published on October 31, just before the next MPC rate meeting, which at the least means a more informed decision may be possible. The Bank of France lowers its Q3 GDP forecast Yesterday, the Bank of France lowered its Q3 GDP forecast to 0.25 % versus prior 0.3% mostly due to poor industrial activity. Without much surprise, industrial companies are in a tough spot because of the energy crisis, supply chain disruptions, and a tight labour market. So far, the recession is not the central bank’s baseline. However, most economists expect France will not avoid a recession next year (with a drop of GDP between -0.2 % and -0.7 % in 2023 depending on the forecasting institutes). Chicago wheat futures jumped nearly 3% in early trading ... underpinned by concerns over the Russia-Ukraine war slowing grain shipments from the Black Sea region. This after Putin accused Ukraine of orchestrating the explosion on the bridge over the Kerch Strait, a key prestige project for the Russian President. The developments cast even more uncertainty over shipments to the world market through Ukraine’s export corridor in the Black Sea, which comes up for renewal next month. Dozens of grain-hauling vessels are already backing up while awaiting inspection at Istanbul under the terms of the deal. TSMC shares down 8% on more US restrictions on semiconductors The US has added new restrictions on exports of semiconductors used in AI and supercomputing, in addition to new restrictions on equipment used in semiconductor manufacturing to any Chinese companies. It is estimated that that the new restrictions will cost the company 5-8% of its revenue. Paul Tudor Jones is getting ready for a recession The famous macro trader said in an interview yesterday that his trading firm is getting ready to deploy its recession playbook. The key dynamics according to Tudor Jones are recessions last 300 days, equities fall 10% on average, short-term bond yields will start to go down before bottom in equities, term premium will increase both in equities and bonds, earnings multiples will compress, and the Fed will either halt or slow rate hikings. JPMorgan Chase CEO Jamie Dimon joins recession crowd In a speech yesterday Jamie Dimon added a negative jolt to the market saying that a global recession was likely in the next 6-9 months due to the rising interest rates and the war in Ukraine. What are we watching next? Fertilizer supply at risk amid fresh Russian tensions and Hurricane Ian aftermath Amid fresh tension from Russian upon Ukraine, fertilizer producers have once again been put in the spotlight on supply concerns. Equities in APAC involved in phosphate/fertilizers rose today as a result; so, it’s worth watching stocks in the sector across Europe and the US. The phosphate fertilizer mining industry’s supply has already been put at risk after Hurricane Ian hit Florida, impacting more than 1 billion ‘stacks’ of supply. Russia is the world’s largest supplier of nitrogen-based fertilizers; however, its supply was slimmed from embargoes after launching attacks against Ukraine. The economic calendar for the week picks up on Wednesday ... with the latest set of FOMC minutes, but the highlight of the week will be Thursday’s US September CPI report, after the August data surprised with significantly higher than expected inflation. Friday we get a look at US September retail sales after core spending has been on a declining trend, measured month-on-month, since early this year. Earnings to watch The Q3 earnings season kicks off this week, with the most important day being Friday, as seven large US financial institutions reporting. The key focus points will be to what extent US banks are able to increase their net interest margin, which they did in Q2, and the levels of credit provisions in Q3. Wednesday: PepsiCo Thursday: Progressive, Fast Retailing, Tryg, Walgreen Boots Alliance, Fastenal, BlackRock, Delta Air Lines, Domino’s Pizza Friday: Shanghai Putailai New Energy, YTO Express Group, PNC Financial Services, JPMorgan Chase, Morgan Stanley, Citigroup, UnitedHealth Group, Wells Fargo, US Bancorp, First Republic Bank Economic calendar highlights for today (times GMT) 0700 – Czechia Sep. CPI 1000 – US Sep. NFIB Small Business Optimism 1245 – ECB Chief Economist Lane to speak 1600 – US Fed’s Mester (Voter 2022) to speak 1645 – Switzerland SNB Chair Jordan to speak 1700 – US 3-year Treasury Auction 1800 – UK Bank of England’s Cunliffe to speak 1835 – UK Bank of England Governor Bailey to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-11-2022-11102022
Positive Start Expected as Nvidia's Strong Performance Boosts Market Confidence

The Large Banks' Massive Unrealized Losses On Bond And Stock Market Situation

Saxo Bank Saxo Bank 11.10.2022 13:13
Summary:  Today we look at equity markets back at the cycle lows just ahead of earnings season as treasury yields and a strong US dollar continue to pressure. We also discuss unrealistic earnings expectations for the coming batch of earnings reports, the large banks' massive unrealized losses on bond portfolios that will hamper buyback programs and dividend generosity, the ongoing dicey situation for UK gilts and sterling as sentiment and policymaker credibility continue to struggle, crude oil & gas, FX focus, TSMC's ugly day and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-oct-11-2022-11102022
Inflation Reports In Australia And New Zealand Were Higher Than Expected

Australia’s Fundamentals Look Stronger Than New Zealand’s

TeleTrade Comments TeleTrade Comments 11.10.2022 13:19
On 4 October, the Reserve Bank of Australia (RBA) surprised the market with a smaller-than-expected rate hike of 25 bps. A day later, the Reserve Bank of New Zealand (RBNZ) delivered its fifth consecutive 50 bps hike. In the view of economists at HSBC, the recent dip in AUD/NZD is unlikely to be sustainable. Australia’s fundamentals look relatively stronger than New Zealand’s “With the dovish surprise from the RBA and the hawkish surprise from the RBNZ, the AUD weakened against the NZD, with AUD/NZD declining. However, we think AUD/NZD is likely to move higher, as Australia’s fundamentals look stronger than New Zealand’s on a relative basis, with fewer hard-landing risks and a stronger current account position.” “When compared to the ‘safe haven’ USD, both commodity currencies are likely to face further downside risk, amid vulnerable risk sentiment, higher US yields, and slowing global growth.”
Bank Of England Will Probably Be Unable To Avoid A Significant Easing Of Policy

The Bank Of England Was Forced To Intervene On An Emergency Basis

Kenny Fisher Kenny Fisher 11.10.2022 14:13
GBP/USD is trading quietly for a second straight day. In the North European session, GBP/USD is trading at 1.1035, down 0.18%. The pound has not posted a winning day since October 12th and has lost 400 points during that time. GBP/USD dropped below the symbolic 1.10 line earlier today, and a break below 1.10 will likely increase talk of the pound following the euro and dropping to parity with the dollar. UK labour market remains robust The UK labour market is one of the few bright spots in the economy, and today’s employment report reaffirmed that the job market remains tight. Unemployment in the three months to August dipped to 3.5%, down from 3.6%, while average earnings jumped to 6.0%, up from 5.5% and ahead of the consensus of 5.9%. These rosy numbers are dampened by an inflation rate of 9.9%, which has badly hurt real UK incomes. The strong job market bolsters the likelihood of the Bank of England will deliver some tough medicine at its November meeting, perhaps a super-size rate hike of 1.0%. The BoE was forced to intervene on an emergency basis after the mini-budget almost caused a bond market crash, and investors have circled October 14th, which is the expiry date of the BoE’s gilt-buying intervention. There are concerns that if the BoE does not renew its bond-buying, the result could be another exodus from UK government bonds. On Wednesday, the UK releases GDP for August, which is expected at 0% MoM, down from 0.2% in July. In the US, inflation will be in focus this week, with PPI data on Wednesday and CPI a day later. Headline inflation is expected to fall to 8.1% in September, down from 8.3% in August, but core CPI is expected to rise to 6.5%, up from 6.3%. Unless inflation surprises sharply to the downside, the release will not cause the Fed to rethink its hawkish policy. . GBP/USD Technical GBP/USD faces resistance at 1.1085 and 1.1214 There is resistance at 1.0935 and 1.0776 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The AUD/USD Pair’s Downside Remains Off The Table

Weak Reports Added Pressure To The Australian Dollar (AUD)

Kenny Fisher Kenny Fisher 11.10.2022 14:16
AUD/USD continues to lose ground and can’t find its footing. The Aussie started the week on the wrong foot, with a decline of 1.0% on Monday. In today’s European session, AUD/USD is trading at 0.6266 down 0.52%. Earlier the day, the Australian dollar fell to 0.6247, its lowest level since April 2020. Weak PMI, confidence data weighs on Aussie Australia has posted weak numbers this week, adding to the downward pressure on the ailing Australian dollar. The Services PMI fell into contraction territory with a reading of 48.0 in September, down from 53.3 in August, as the uncertain economic outlook is weighing on business activity. Business confidence levels are down, with NAB business confidence slowing to 5 in September, down from 10 in August. Westpac Consumer Sentiment indicated that consumers are also in a sour mood, with a reading of -0.9% in September after a gain of 3.9% in August, which was the sole gain over the past 11 months. Risk appetite has been dampened by the escalating crisis in the Ukraine war, with Russia annexing parts of occupied Ukraine and firing missiles at civilian targets. As well, the energy crisis is looming over Western Europe, just weeks ahead of winter. This is weighing on the risk-sensitive Australian dollar. In the US, inflation releases have taken on added significance, as the Federal Reserve has designated soaring inflation as public enemy number one. The US releases PPI data on Wednesday and CPI a day later. Headline inflation has dropped over the past two months, but remains at 8.3%. Unless headline and core inflation both surprise with much lower readings than expected, I don’t anticipate any change in course from the Fed. If inflation underperforms, the US dollar could lose ground. Conversely, a higher-than-expected inflation report would be bullish for the US dollar. . AUD/USD Technical AUD/USD has resistance at 0.6299 and 0.6424 There is support at 0.6203 and 0.6106 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds
The USD/JPY Price Reversed From The Lower Limit

The USD/JPY Pair Is Approaching The Target Of 147.30

InstaForex Analysis InstaForex Analysis 12.10.2022 08:02
The USD/JPY currency pair, after consolidating above the nearest embedded price channel line on the daily chart, accelerated its growth towards the next target line in the area of 147.30. Here, according to the main scenario, we expect a divergence to form with the Marlin Oscillator and a reversal into a deep correction, presumably to the MACD line (143.00). If the price settles above 147.30, the dollar's growth may become extreme - up to the next line of the price channel in the area of 150.00. On the 4-hour chart, the price is accelerating growth supported by a strongly rising Marlin Oscillator. The price, at first and second glance, is not holding back from moving towards the target of 147.30.   Relevance up to 04:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324033
The GBP/USD Pair Started A New Round Of Downward Correction

Overall Situation On The Cable Market (GBP/USD) Is Downward

InstaForex Analysis InstaForex Analysis 12.10.2022 08:06
Yesterday, the pound marked the upper shadow of the daily candle at the resistance level of 1.1170, after which it sharply went down. The price is already approaching the target level of 1.0820. Consolidation below the level opens the second target at 1.0535. The Marlin Oscillator is developing in negative territory. A block of important economic indicators will be released in the UK today, the forecasts for them are negative. GDP for August is expected to remain unchanged, the annual indicator may show a decline in growth from 4.4% to 2.4% y/y, industrial production for the same period is expected to decline by 0.2% (0.6% y/y vs. 1.1% y/y in July). The trade balance is projected to deteriorate from -19.36 billion pounds to -20.40 billion pounds. The price settled under the MACD indicator line on the H4 chart. The Marlin Oscillator is moving sideways in the downward trend area. The overall situation is declining.   Relevance up to 04:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324035
The Euro May Attempt To Resume An Upward Movement

The Current Level Of The EUR/USD Pair Is Strong And There Is No Chance To Change It

InstaForex Analysis InstaForex Analysis 12.10.2022 08:08
Yesterday, the euro traded in a solid range of 103 points, but the closing of the day was almost at the opening level and in fact the price settled on the daily chart, under the key level of 0.9724. As a result, now we are waiting for a more confident price decline to the level of 0.9520. Eurozone industrial production data for August will be released today. An increase of 0.6% and an improvement in the annual rate from -2.4% to 1.2% y/y are expected. Market participants will be drawn to today's release of the FOMC minutes from the last meeting - investors need to find out if their federal funds rates are justified in the 78% probability of a 0.75% rate hike at the Federal Reserve meeting on November 2. On the four-hour chart, the price consolidated under the MACD line and under the level of 0.9724 now after a false exit above these lines. We look forward to continuing the chosen course. Not far from the target level of 0.9520 is an intermediate target of 0.9554 – the low of September 26th. The level is strong, so the target of the movement can be defined as a range of 0.9520/54.   Relevance up to 04:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324037
The EUR/USD Pair Has A Potential For Drop

The Euro To US Dollar (EUR/USD) Pair And Expected Future Moves

InstaForex Analysis InstaForex Analysis 12.10.2022 08:14
We do believe, that we can see a final decline closer to 0.9507 as long as minor resistance at 0.9734 is able to cap the upside However, from 0.9507 or upon a break above 0.9734, we will be looking for a new impulsive rally in EUR/USD towards 1.3565 and ultimately above the peak of wave 1 or A at 1.6038.   Relevance up to 06:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/296417
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

The Euro/US Dollar (EUR/USD) Pair: There May Be An Upward Correction In The Hourly Timeframe

InstaForex Analysis InstaForex Analysis 12.10.2022 08:30
EUR/USD 5M The EUR/USD pair continued to trade rather indistinctly for most of Tuesday. A good growth only followed during the US session, which, however, quickly ended at the nearest line of the Ichimoku Senkou Span B indicator. Thus, the price continues to remain below the Ichimoku lines, and therefore the downward trend persists, despite the pair's exit from the downward channel. This channel was quite narrow, and its angle of inclination was too strong. Therefore, most likely, it will be rebuilt when a new price peak is formed. No important statistics were published either in the US or in the European Union on Tuesday, so traders had nothing to react to during the day. We still believe that the probability of the pair continuing to fall is much higher than the probability of growth. Nevertheless, overcoming the lines of the Ichimoku indicator may provoke a new round of growth by 200-300 points. No trading signals were formed on Tuesday. The pair only worked out the Senkou Span B line and rebounded from it by the end of the trading day, which could be interpreted as a sell signal, but in any case it formed too late to work it out. Formally, the downward movement can now continue both at night and in the morning, but we still do not recommend leaving positions open overnight when trading within the day. COT report: The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 9,300, and the number of shorts by 19,200. Accordingly, the net position grew by about 9,900 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 45,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 12. Sweden refuses to provide Russia with the results of the investigation into the Nord Stream explosions. Overview of the GBP/USD pair. October 12. The Liz Truss government is teetering on the brink. Forecast and trading signals for GBP/USD on October 12. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The downward trend is formally canceled on the hourly timeframe, but in practice, one or two upward corrections are likely to follow, after which the downward movement will resume, and the downward channel will take on a wider form. So far, we do not see any reason to expect a strong growth from the euro. We highlight the following levels for trading on Wednesday - 0.9553, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9767) and Kijun-sen (0 .9810). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union will publish a far from the most important report on industrial production, which is unlikely to cause a strong market reaction. European Central bank President Christine Lagarde's speech will be much more interesting. Recall that the ECB plans to raise rates by at least 0.75% again next month. The euro really needs hawkish rhetoric to show at least some growth. There will be nothing interesting in America today. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 06:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324039
The Pound Is Now Openly Enjoying A Favorable Moment

The GBP/USD Pair: The Reports On GDP And Industrial Production Could Not Trigger A Strong Market Reaction

InstaForex Analysis InstaForex Analysis 12.10.2022 08:34
GBP/USD 5M The GBP/USD currency pair also slightly corrected upwards on Tuesday, but, unlike the euro, it continues to be above the Senkou Span B line on the hourly TF and above the Kijun-sen line on the 24-hour timeframe. Therefore, certain chances for the resumption of the upward movement remain. There were no special reasons for the pound to grow. The euro and the pound rose in sync, so, as usual, the matter concerned only the US dollar, which continues to rule the ball in the foreign exchange market. Most likely, the bears once again took part of the profit on short positions, which is why an upward rollback followed. Morning statistics in the UK was quite good for the British pound, and it provoked some growth. However, it is too early to talk about the resumption of the upward trend. To do this, you need to at least wait for the price to settle above the critical line. Trading signals were boring on Tuesday, since none were formed during the day. The pair did not even approach important levels and lines, so there was not even a hypothetical moment of formation. Thus, traders on our system were not supposed to open positions on Tuesday. COT report: The latest Commitment of Traders (COT) report on the British pound showed minimal changes. During the week, the non-commercial group closed 17,700 long positions and 14,600 short positions. Thus, the net position of non-commercial traders decreased by 3,100, which is not a lot for the pound. We could assume that the actions of major players and the movement of the pound have finally begun to coincide, but the pound has already begun a new round of decline, which risks transforming into a continuation of the global downward trend. The net position indicator has been growing slightly over the past weeks, but the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 42,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 12. Sweden refuses to provide Russia with the results of the investigation into the Nord Stream explosions. Overview of the GBP/USD pair. October 12. The Liz Truss government is teetering on the brink. Forecast and trading signals for EUR/USD on October 12. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair tried to roll back up on the hourly timeframe, but so far this rollback is just a pullback, and not a resumption of the upward trend. It is still very difficult for the pound to count on growth, although it has a little more chances than the euro due to technique. If you look at the "foundation" and geopolitics, then both European currencies may be in a downward direction for several more months. We highlight the following important levels for today: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.0923) and Kijun-sen (1.1218) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. The UK will publish reports on GDP and industrial production. We do not believe that such data can provoke a strong reaction from the market, but a day earlier, it still followed the less important statistics, so it could be the same case today. Nothing interesting planned in America. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 06:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324041
Analysis And Trips For Trading The GBP/USD Pair In Short And Long Positions

There Are Hardly Any Positives In The British Assets Market

Saxo Bank Saxo Bank 12.10.2022 08:41
Summary:  Bank of England’s warning to end intervention sent an offered tone to bonds and equities towards the overnight session close, and added to the tightening risks that are being seen globally. Fed’s Mester reiterated hawkish comments as well, sending yields and dollar higher at the Asia open. USDJPY blew past 146, raising intervention threat again although yen crosses remain lower. Crude oil prices also plunged amid dollar strength and China lockdown concerns. Sterling and other UK assets look poised for a tough day ahead, and FOMC minutes are also due, which might mean ripples across global markets. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) indices declined for the 5th day US stocks erased earlier gains as bond yield rose and incoming Q3 earnings and the CPI on Thursday added to the risk-off sentiment. The S&P500 skidded for the 5th day on further tech selling, ending 0.65% down, while the Nasdaq 100 index fell 1.2%. As for the biggest laggards in the S&P 500 sectors, for the second day in row, both the Casino and Gaming and Semiconductor sectors were among the biggest losers down ~4.7% and ~4.3% respectively, gaining downside momentum. Meanwhile, investors continued to top up defensive sectors, buying into the Food Retail and Drugs sectors for the second day in a typical risk-off fashion. Noteworthy US company news and moves General Motors (GM) plans to compete with Tesla’s (TSLA) solar Powerwall business by offering its own sun-generated storage system starting late next year. Tesla shares fell 2.9%, while GM closed almost unchanged. Also making headlines, Uber (UBER) and Lyft (LYFT) plunged 10% and 12% respectively after the US Department of Labor proposed to tweak the way it determines if workers are classified as employees or contractors. Amgen (AMGN:xnas) rose 5.7% after an analyst upgrade citing the potential of its experimental weight-loss drug. Chip maker, KLA (KLAC: xnas) plunged 6.2% after saying the company will stop sales to China-based customers form Wednesday, including South Korea’s SK Hynix’s operations in China. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) finished a choppy session with long-end yields higher After reaching 4% during Asian hours, the 10-year yields retraced to as low as 3.87% at around mid-day New York before bouncing back to finish the day 7bps higher at 3.95%.  The move higher in yields in the afternoon was first triggered by the Bank of England Governor Baily pushing back on calls to extend the emergency bond-buying programme and repeated the BoE’s prior day announcement to stick to the Oct 14 end day of the programme.  He told the audience at the Institute of International Finance annual meeting in Washington that he had warned U.K. pension funds that only three were left to wind up positions. In addition, poor 3-year U.S. treasury note auction results in the afternoon caused some traders to adjust their positions ahead of the 10-year and 30-year auctions on Wednesday and Thursday. 2-year yields finished the day unchanged at 4.31% and the 2-10 year curve bear steepened to -36. Hong Kong’s Hang Seng (HSIU2) retreated as China’s CSI300 (03188:xhkg) stabilized Stocks traded in Shanghai and Shenzhen bourses stabilized and traded little changed from yesterday’s closes, with power generation and lithium producers gaining. CATL rose 6% and led the share prices of the lithium space higher after the company preannounced Q3 net income surging 169-200% Y/Y to RMB8.8-9.8 billion. Eve Energy (300014:xsec) gained 6.2% and Guangzhou Tinci Materials (002709:xsec) soared 10% limit up. China National Nuclear Power (601985:xssc) surged 7.3% after the company reported a 7.2% Y/Y electricity output growth in the first 9 months of the year. On the other hand, Hong Kong’s Hang Seng Index continued to slide, falling 2.2% with financials, China Internet names, EV makers, and China property developers dragging down the benchmark.  The tightening of pandemic control in large cities including Shanghai and the editorials on the mouthpiece People’s Daily reiterating the country’s adherence to the Dynamic-Covid-Zero policy two days in a row dashed the notion of reopening held by some analysts and investors. Airline stocks dropped from 1.4% to 9.1%. Macao casino stocks plunged from 3% to over 5%. Reportedly short selling increased in China Internet names, with Alibaba (09988:xhkg), Tencent (00700:xhkg), JD.COM (09618:xhkg), Meituan (03690:xhkg), Bilibili (09626:xhkg) declining from 3% to more than 9%. Chinese developers, Country Garden (02007:xhkg ) and Longfor (00960:xhkg) were the two largest losers in the Hang Seng Index. Australia’s ASX200 (ASXSP200.1) is tipped to fall 0.3% (futures). Focus on Bank of Queensland results, fertilizer companies and oil So far this week, the ASX200 has fallen 1.7% outperforming global markets, with the most selling in the Tech Sector, while the most gains have been in Consumer Staples, Materials and Industrials, with fertilizer and agricultural stocks rising the most on supply concerns. The Bank of Queensland (BOQ) reported a 5% drop its cash profit for the full year, while the closely watched metric of banking profits, its net interest margin reduced to 1.74% with the bank blaming increased competition on its margin falling. Loan growth in housing rose 7%. The group also declared an impairment of $13 million. That being said, the BOQ and other regional banks are seeing more loan growth when compared to the big four banks year on year. Elsewhere, it’s worth watching oil stocks today after the oil price fell back to $88 after the USD roared up again. Also keep an eye on gold stocks that are likely to come under further selling. While iron ore companies could be worth a look after a strike in Africa hit the countries top iron ore port. Yen past the previous intervention level, GBPUSD dropped below 1.10 USDJPY was seen rising above 146 in early Asian trading hours after the US yields surged higher overnight after BOE’s Governor Bailey warned on end to intervention (read below). The gilt market was closed by the time his comments came, but the US treasuries reacted to it and so the response from the yen could be expected. The Japanese yen has been trapped below this intervention threat level for weeks, but the pressure to the upside will continue to soar amid fresh surge in dollar and yields as dollar’s safe haven bid continues to play. Other yen crosses, however, remain below at sub-142 levels vs. 144 at the time of September intervention and AUDJPY below 92 vs. 97-levels previously. Response on Bailey’s comments was also seen in the sterling which dropped below 1.10 for the first time in October. Crude oil (CLX2 & LCOZ2) down about 3% Oil prices slumped on Tuesday amid further gains in the US dollar towards the NY session close and reports on China’s fresh lockdowns ahead of its key Communist Party meeting that begins later this week. WTI futures slid below $90/barrel, while Brent was below $94 after touching $98+ levels on Monday. Geopolitical tensions however appear to be escalating, with Putin warning further missile attacks on Ukraine. Meanwhile, US-Saudi tensions also remain key to monitor after the OPEC+ production cut announced last week.   What to consider? Bank of England’s Bailey warns intervention to end on Friday Bank of England Governor Bailey gave a “three day” deadline to investors to wind up their positions that they can’t maintain because the central bank will halt its intervention at the end of this week as planned. There had been some expectations that the BoE might extend the purchases to quell financial instability in the UK, but Bailey did not give way on those. This also comes as a hint that QT may begin later this month as planned. There is hardly any silver lining visible for UK assets at this point. Fed’s Mester stays hawkish, FOMC minutes ahead Cleveland President Loretta Mester (2022 voter) reiterated the hawkish rhetoric saying that the Fed has yet to make any progress on lowering inflation and policy needs to be moved to restrictive levels and the biggest policy risk is that the Fed does not hike enough. She does not expect Fed rate cuts in 2023. As we have been saying, she also remarked that “at this point the larger risks come from tightening too little.” FOMC meeting minutes from the September 21 meeting will be released today and will likely continue to send out hawkish signals. China’s outstanding RMB loans grew at 11.2% Y/Y in September, above expectations China released its September credit data last evening. New aggregate financing in September came in at RMB3,530 billion, much stronger than the RMB2,750 billion expected (Bloomberg Survey) and RMB2,430 billion in August as well as the RMB2,903 billion in September 2021. It brought the growth rate of the aggregate financing to 10.6% Y/Y, higher than the 10.5% in August.  New RMB loans rose to RMB2,470 billion, above RMB1,800 billion expected and RMB1,250 billion in August.  An acceleration in loans to the corporate sector, which rose to RMB1,910 billion in September from RMB875 billion, drove the overall loan growth.  Outstanding RMB loans in September grew 11.2% from a year ago. The instructions as well as window guidance from the regulators to urge banks to lend to infrastructure projects, manufacturing industries, and the property sector contributed to the better-than-expected growth in corporate loans. IMF’s warning on global growth After recession threats from Jamie Dimon and Paul Tudor Jones, now the IMF has said there is a growing risk that the global economy will slide into recession next year as households and businesses in most countries face “stormy waters” and the “worst is yet to come”. The institute has said that global growth will slow from 6.0% in 2021 to 2.7% in 2023, being the weakest growth since 2001. The IMF also warned of an increased risk of rapid, disorderly repricing in financial markets, which is exacerbated by existing vulnerabilities and a lack of liquidity. China signaling it will stick with the Dynamic Covid Zero policy after the CCP’s national congress People’s Daily published for the third day in a row this week to reiterate the Chinese authorities’ determination to adhere to the “Dynamic Covid Zero” policy and pledge not to “lie down” passively. It warns that any relaxation of pandemic control would result in a large number of inflection and death and a collapse in the healthcare system so the insistence on Dynamic Covid Zero is the best way to protect people’s lives and health which are of utmost importance. The series of articles is apparently to dash the speculation of relaxation of pandemic control after the Chinese Communist Party’s national congress next week. In the meantime, as Covid cases bounced above 2,000 after the National Day golden week holiday during which many people travelled around the country. Large cities, including Shanghai and Shenzhen tightened pandemic control measures somewhat. Fertilizer supply at risk amid fresh Russian tensions and Hurricane Ian aftermath Amid fresh tension from Russian upon Ukraine, fertilizer producers have once again been put in the spotlight on supply concerns. Equities in APAC involved in phosphate/fertilizers rallied yesterday as a result. So perhaps it’s worth watching stocks in the sector again today, such as Nufarm (NUF), and Orica (ORI) which are this weeks best performers on the ASX. The phosphate fertilizer mining industry’s supply has already been put at risk after Hurricane Ian hit Florida, impacting more than 1 billion ‘stacks’ of supply. And recall that Russia is the world’s largest supplier of nitrogen-based fertilizers, but its supply has slimmed from embargoes after launching attacks against Ukraine. Perhaps the market is thinking more development are to come, so it's worth watching to see how this space develops.    For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/market-insights-today-12-oct-12102022
Asia Market: Exports In Indonesia Are Likely To Continue To Grow, Chinese Interest Rate Decision Ahead

Asia Stock Market: MSCI’s Index Of Asia-Pacific Shares Outside Japan Down And Japan’s Nikkei 225 Remains Mostly Steady

TeleTrade Comments TeleTrade Comments 12.10.2022 09:28
Looming intervention from Japan, economic fears cited by BOE’s Bailey, IMF keep bears hopeful. Yields grind higher as London/Tokyo struggle to defend respective currencies. Chinese shares lead bears, KOSPI fails to justify BOK’s rate hike. Asian stocks hold lower grounds, led by China, as economic slowdown fears join pre-Fed Minutes anxiety during early Wednesday. Even so, sluggish yields and an absence of major data/events restrict immediate moves. That said, MSCI’s index of Asia-Pacific shares outside Japan renews the 30-month low, down 0.75% intraday by the press time, whereas Japan’s Nikkei 225 remains mostly steady around a one-week low. Earlier in the day, USDJPY crossed the 145.90 level and pushed the Japanese policymakers to defend the domestic currency. Following the same, Japan’s Chief Cabinet Secretary Hirokazu and Finance Minister Shunichi Suzuki crossed wires while showing readiness to tame the price move, if needed. Elsewhere, China’s firmer determination to defend the zero-covid policy joins the recently gradual fall in the domestic currency to renew fears of the People’s Bank of China (PBOC), which in turn led the markets in Beijing towards witnessing more than 1.0% daily loss. While following the same, New Zealand’s NZX 50 drops 1.0% but Australia’s ASX 200 prints mild gains as Reserve Bank of Australia (RBA) Assistant Governor Luci Ellis mentioned, that the central bank’s policy is no longer in an expansionary place. However, comments like, “The neutral rate was a moving target and hard to determine at any stage in time,” seemed to have weighed on the Aussie stocks. South Korea’s KOSPI prints 0.25% intraday gains even after the Bank of Korea announced a rate hike while Indonesia’s IDX Composite traces Chinese equities to drop 0.65% at the latest. On a broader front, S&P 500 Futures remain sidelined around monthly low but the Treasury bond yields are mostly firmer, despite the latest inaction, which in turn portrays the market’s rush towards risk safety. Moving on, Federal Open Market Committee (FOMC) Meeting Minutes will be eyed for clear directions amid hawkish Fed bets. Also important will be the moves by the British and the Japanese policymakers to defend the GBP and the JPY respectively.
Underestimated Risks: Market Underestimating Further RBA Tightening

The US Dollar To Indian Rupee (USD/INR) Pair Rose And Inflation In India Showed That Price Pressures Will Accelerate

TeleTrade Comments TeleTrade Comments 12.10.2022 09:20
USD/INR has sensed fresh demand at around 82.00 amid soaring bets for a 75 bps rate hike by the Fed. The Indian retail inflation could accelerate to a five-month of 7.30%. The US economy could face a recession situation in the coming six to nine months. The USD/INR pair has advanced to near 82.30 after picking bids from around 82.00. The asset has firmed up as chances for a 75 basis point (bps) rate hike by the Federal Reserve (Fed) have advanced dramatically. As per CME FedWatch tool, the chances of a fourth consecutive 75 bps rate hike announcement stand at 82.8%. Soaring bets for the continuation of the current pace of policy tightening by the Fed have fired the US dollar index (DXY). The DXY has refreshed its two-week high at 113.60. Also, the market mood is getting more depressed on declining global growth projections. Going forward, India’s retail inflation data will remain in focus. Reuters poll on India’s inflation cited that the price pressures will accelerate to a five-month high of 7.30%. It seems that the projections are well above the tolerance of the Reserve Bank of India (RBI). The Indian inflation data will be followed by US Consumer Price Index (CPI), which is due on Thursday. As per the estimates, the headline US inflation will decline to 8.1% from the prior release of 8.3%. While the core CPI that excludes oil and food prices in scrutiny is expected to improve to 6.5% vs. the former figure of 6.3%. The deviation in the inflation duo holds weak gasoline prices responsible. On Tuesday, Chairman and CEO of JPMorgan Chase, Jamie Dimon, warned that the US economy could slip into recession in the coming six to nine months. He further added that the Eurozone is already in recession and it may put the mighty US into recession too. He has cited soaring inflation and interest rates, and the war situation are responsible for the recession situation ahead, as reported by NewsBytes. Meanwhile, the International Monetary Fund (IMF) on Tuesday cut India’s economic growth forecast to 6.8% in 2022. The impact of the recession in Europe and break growth in the US economy will display its multiplier effects.
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The EUR/GBP Pair: A Slump Towards The Monthly Low Can’t Be Ruled Out

TeleTrade Comments TeleTrade Comments 12.10.2022 09:37
EUR/GBP consolidates biggest daily gains in two weeks inside bullish chart formation. Reports that BOE could extend bond-buying triggered GBP’s immediate strength. 200-SMA adds strength to 0.8735 support confluence, oscillators also favor buyers. EUR/GBP portrays the British Pound’s (GBP) immediate run-up on the Financial Times (FT) report that the Bank of England (BOE) is likely to extend the bond-buying program. In doing so, the cross-currency pair reverses from the upper line of a weekly bullish channel while flashing 0.8796 as the daily low, around 0.8825 by the press time of early Wednesday morning in Europe. “The Bank of England has signaled privately to bankers that it could extend its emergency bond-buying program past this Friday’s deadline, according to people briefed on the discussions, even as Governor Andrew Bailey warned pension funds that they “have three days left” before the support ends,” mentioned FT. Although the recent news suggests further downside of the EUR/GBP pair, a convergence of the 200-SMA and the stated bullish channel’s bottom, around 0.8735, appears a tough nut to crack for the bears. Following that, a slump towards refreshing the monthly low, currently around 0.8650, can’t be ruled out. It should be noted that the MACD and the RSI (14) are both in favor of the quote’s further upside. That said, the aforementioned channel’s top, close to 0.8870, guards the EUR/GBP pair’s immediate rebound. Also acting as an upside filter is the 50% Fibonacci retracement level of September month upside, near 0.8910, a break of which will direct the EUR/GBP bears towards the 0.9000 psychological magnet. EUR/GBP: Four-hour chart Trend: Limited downside expected
Easing In Chinese Covid Measures | Crypto Distress Continues | Markets Trade Joyfully

Large Cities In China Tightened Pandemic Control Measures Somewhat | Intel Is Forced To Reduce The Number Of Employees

Saxo Bank Saxo Bank 12.10.2022 09:02
Summary:  A rocky ride for markets yesterday, which were trying to post a rally until a steep sell-off developed late in the session as Bank of England Governor Andrew Bailey warned that UK pensions must get their house in order by Friday, sticking with the end date of the Bank of England’s emergency intervention. Then this morning, the FT reports that the Bank of England may be willing to extend those measures, helping to stabilize sentiment.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities slid again yesterday with S&P 500 futures closing below the 3,600 level for the first time since November 2020, but the index futures are bouncing back a bit this morning trading around the 3,623 level. The fragile situation in the UK Gilt market is a fresh source of negativity with BoE Governor Bailey’s comments yesterday adding to nervousness (see more detailed summary below). Later today the market will get US September PPI figures which are expected to remain at 0.3% m/m excluding energy and food. PepsiCo is the first big US company to report full Q3 earnings with the results expected before the market opens. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) The tightening of pandemic control in large cities including Shanghai and Shenzhen plus and the mouthpiece People’s Daily reiterating the country’s adherence to the Dynamic-Covid-Zero policy for the third day in a row this week to the notion of reopening held by some analysts and investors continued to linger over stocks in the Hong Kong and mainland bourses. The IMF cut China’s growth forecasts to 3.2% in 2022 and 4.4% in 2023.  Hang Seng Index dropped 2% to the level last seen in October 2011. The China Internet, China consumption, China developers, and Macao casino names were among the worst performers. CSI300 fell 1.4% to make a new 2.5-year low. While SMIC (00981:xhkg) fell nearly 4%, other semiconductor stocks managed to bounce off their low, with Hua Hong Semiconductors (01347:xhkg) up 2.7%, SG Micro (300661:xsec) up 3%. China’s September credit data came in better than expected with acceleration in loans to corporate. GBP and USD focus after chaotic Surely Andrew Bailey’s days as Bank of England governor are numbered if BoE does indeed end up extending the QE programme (as the FT reports this morning) that Bailey was out warning yesterday would end on schedule this Friday? GBPUSD has traded all over the map and has correlated with general risk sentiment on the issue, pumping to nearly 1.1200 yesterday before dumping to the low 1.0900’s late yesterday and back to 1.1000 this morning. Any announcement of Bailey’s departure might see short-term upside for sterling. Eventually, the US dollar should steal back the limelight as we get a look at tonight’s FOMC minutes and tomorrow’s US September CPI data: even if the data point is somewhat weaker than expected, will the markets be willing to celebrate a single data point when the US labor market remains so tight and perhaps a large driver of inflation risks at this point in the cycle? Note the upside pressure in USDJPY, which traded to new 24-year highs above 146.00 as traders feel emboldened on the absence of official intervention. Gold (XAUUSD) Gold has settled into a tight but nervous trading range around $1670 and following last week's aggressive short squeeze, potential short sellers have turning more cautious at this stage where the market has been left pondering how close we are to seeing peak hawkishness, a development that may signal a low in gold. The first potential sign came on Monday when Federal Reserve Vice Chair Lael Brainard laid out the case for exercising caution, noting that the previous increases are still working through the economy at a time of high global and financial uncertainty. Key support at $1658, the 61.8% retracement of the recent correction, with the market focusing on Thursday’s US CPI print for direction. Crude oil (CLX2 & LCOZ2) trades lower for a third day as recession concerns once again offsets last week's OPEC production cut, and after China continues to reiterate its firm belief in the nation’s Covid zero policy, thereby potentially prolonging a slump in demand from the world’s biggest importer. Prices have also responded to a growing chorus of analysts predicting a hard landing in the US while the IMF has downgraded global growth for next year saying that policies to tame high inflation may add risks to the global economy. Monthly oil market reports from the EIA and OPEC today and the IEA on Thursday will be watched closely for any changes in the supply and demand outlook. US treasuries (TLT, IEF) US treasury yields trading fairly steadily just below the key cycle high of 4.00% for the 10-year treasury benchmark and ahead of the macro event risk of the week, tomorrow’s US September CPI data. A three-year treasury auction yesterday was seen as somewhat weak on tepid foreign demand. A 10-year treasury auction is up later today and a 30-year T-bond auction tomorrow. What is going on? China signaled it sticks with the Dynamic Covid Zero policy  For a third day this week, the People's Daily published an article reiterating the Chinese authorities’ determination to adhere to the “Dynamic Covid Zero” policy and pledge not to “lie down” passively.  It warns that any relaxation of pandemic control would result in many infections and death and a collapse in the healthcare system so the insistence on Dynamic Covid Zero is the best way to protect people’s lives and health which are of utmost importance. The series of articles is apparently to dash the speculation of relaxation of pandemic control after the Chinese Communist Party’s national congress next week.  In the meantime, Covid cases bounced above 2,000 after the National Day golden week holiday during which many people traveled around the country.  Large cities, including Shanghai and Shenzhen, tightened pandemic control measures somewhat.  Biden warns of ‘consequences’ for Saudi Arabia after OPEC+ cut The US is not pleased with Saudi Arabia’s decision to allow OPEC+ to cut oil production by 2mn barrels per day amid the ongoing energy crisis. Biden said in an interview Tuesday night that there will be consequences and the speculation is that there could be restrictions on defence contracts.  LVMH organic growth in Q3 beats estimates While consumption patterns are weakening in key consumer categories such as consumer electronics and clothing, the high-end luxury market is in decent shape. LVMH reports organic revenue growth of 19% y/y in Q3 vs estimates of 14.4% y/y driven by strong performance in its Fashion & Leather division.  Intel is planning large job cuts The PC market is facing severe headwinds post the pandemic demand boom and the ongoing cost-of-living crisis in the world. This is forcing Intel to significantly cut the number of employees with sales and marketing potentially seeing a 20% cut. What are we watching next?  US grain futures fall ahead of key report Chicago wheat futures dropped on Tuesday after Russia having produced a bumper crop, may abolish its quotas on grain exports. This a day after prices jumped to a three-month high on worries about the viability of the Ukraine grain corridor following Russia’s latest attacks on Ukraine cities. Corn meanwhile trades near a four-month high ahead of today’s important WASDE report from the US Department of Agriculture, which will offer traders insights about the current outlook on world supply and demand for key crops. The report is likely to show lower US corn and wheat stocks while the drop in global stockpiles is expected to be smaller due to a pickup in production elsewhere.  Volatility risks in the FX market through the end of the week As noted above, the Bank of England messaging on its emergency QE programme and the fate of UK pension funds is a proper mess that the already very shaky Truss government can ill afford and could mean changes to the BoE’s leadership (or “should” mean?). Elsewhere, note that USDJPY has slipped to new 24-year highs, with the question of intervention hanging over the market as the price action works higher. The economic calendar for the week picks up today The economic calendar will increase momentum with the latest set of FOMC minutes, but the highlight of the week will be tomorrow's US September CPI report, after the August data surprised with significantly higher than expected inflation. Friday we get a look at US September retail sales after core spending has been on a declining trend, measured month-on-month, since early this year. Earnings to watch Today’s earnings focus is PepsiCo which is scheduled to report Q3 earnings figures before the market opens with analysts expecting 3.1% y/y revenue growth and slightly lower EBITDA margin q/q providing the first signs of whether a margin compression theme is building. PepsiCo has a broad product portfolio, and we expect it to have delivered robust results from the company. Wednesday: PepsiCo Thursday: Progressive, Fast Retailing, Tryg, Walgreen Boots Alliance, Fastenal, BlackRock, Delta Air Lines, Domino’s Pizza Friday: Shanghai Putailai New Energy, YTO Express Group, PNC Financial Services, JPMorgan Chase, Morgan Stanley, Citigroup, UnitedHealth Group, Wells Fargo, US Bancorp, First Republic Bank Economic calendar highlights for today (times GMT) 1135 – UK Bank of England’s Pill to speak 1230 – US Sep. PPI 1330 – ECB President Lagarde to speak 1400 – US Fed’s Kashkari (voter 2023) to speak 1600 – EIA's Short-Term Energy Outlook 1600 -  USDA’s Monthly World Agriculture Supply & Demand Estimates 1700 – UK Bank of England’s Catherine Mann to speak 1700 – US 10-year Treasury Auction 1800 – US Fed’s FOMC Minutes 2030 – API's Weekly US Oil inventory report 2230 – US Fed’s Bowman (voter) to speak on forward guidance as policy tool 2301 – UK Sep. RICS House Price Balance During the day: OPEC’s Monthly Oil Market Report   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-12-2022-12102022
The Japan Central Bank’s Decision Sent The Yen (JPY) Sliding

The British Pound To Japanese Yen Pair (GBP/JPY) Is Expected To Advance Further

TeleTrade Comments TeleTrade Comments 12.10.2022 09:55
GBP/JPY has recorded an intraday high of around 161.50 after BOE considered a prolonged bond-buying program. Japanese officials could make a surprise intervention in the currency markets. In today’s session, the release of the UK heavy economic activities data will remain in focus. The GBP/JPY pair displayed a perpendicular move to near 161.50 after reports came that the Bank of England (BOE) is considering a prolonged bond-buying program to fight against sheer volatility in the market. The vertical upside move has corrected to near 160.70, however, the upside seems favored. As reported by Financial Times, the BOE has signaled privately to bankers that it may extend bond buying to stabilize the financial system. Earlier, BOE Governor Andrew Bailey announced that the central bank will terminate its support to the market. And, institutions and pension funds have three days left to purchase index-linked gilts up to GBP5 bln. Following the positive cues from the cable, the GBP/JPY is expected to advance further. In the European session, the UK data on Industrial and Manufacturing production will be of utmost importance. The economic catalysts are expected to display a vulnerable performance amid bleak economic fundamentals and poor demand due to soaring inflation and interest rates. On the Tokyo front, Japanese Chief Cabinet Secretary Hirokazu Matsuno denied on commenting over day to day movement in the FX domain but cited that “We are closely watching to FX moves with a high sense of emergency and will take appropriate steps on excess FX moves. The commentary came after the USD/JPY pair refreshed its multi-year high at around 146.40.
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The New Zealand Dollar To US Dollar (NZD/USD) Pair Remains Bearish

TeleTrade Comments TeleTrade Comments 12.10.2022 10:01
NZD/USD fades bounces off 31-month low, retreats from intraday high of late. Support-turned-resistance limits immediate upside ahead of 100-HMA, weekly falling trend line. Bears should wait for a clear break of 0.5560 for conviction. NZD/USD struggles to defend the previous day’s corrective bounce from the 2.5-year low, easing to 0.5580 ahead of Wednesday’s European session. In doing so, the Kiwi pair takes a U-turn from the two-week-old previous support line, near 0.5595 at the latest. The pullback moves also gain support from the quote’s failure to cross the 100-HMA on Tuesday, despite refreshing the weekly top. However, an upward-sloping trend line connecting the recent lows, around 0.5560, limits the quote’s immediate declines ahead of directing them to the recent trough surrounding 0.5535. In a case where the NZD/USD pair remains bearish past 0.5535, which is more likely considering the absence of the oversold RSI, the south-run could aim for the 0.5500 threshold and the year 2020 low near 0.5470. Meanwhile, an upside break of the immediate support-turned-resistance line, at 0.5595 now, needs validation from the 0.5600 to convince intraday buyers of the NZD/USD. Even so, the 100-HMA and the weekly resistance line, respectively around 0.5625 and 0.5655, could challenge the bulls before giving them control. NZD/USD: Hourly chart Trend: Further downside expected
The Canadian Dollar Is Likely To Remain On Tenterhooks

The Overall Risk Profile Of The USD/CAD Pair Is Extremely Negative

TeleTrade Comments TeleTrade Comments 12.10.2022 10:06
USD/CAD has reclaimed the immediate hurdle of 1.3800 after a knee-jerk reaction. Market mood is getting mixed which advocates volatility ahead. Oil prices drop after the IMF cuts 2023 GDP projections. The USD/CAD pair has recovered sharply after a knee-jerk reaction to near 1.3783 in the early European session. The asset is aiming to knock the day’s high at around 1.3830 as the overall risk profile is extremely negative ahead of the US inflation data. The 10-year US Treasury yields have recovered some of their losses after dropping to near 3.9%. The mighty US dollar index (DXY) has also picked bids after dropping to near 113.00, however, confidence in the rebound move is absent. It would be worth watching whether the asset will recapture its fresh weekly highs at 113.60. This week, the mega event will be the US Consumer Price Index (CPI) data, which will release on Thursday. As per the preliminary estimates, headline inflation will drop to 8.1% due to weak gasoline prices. While, the core CPI that doesn’t inculcate oil and food prices for calculation will release at 6.5%, higher than the prior print of 6.3%. But before that, the release of the Federal Reserve (Fed) minutes will be keenly watched. The minutes will also provide viewpoints of all Fed policymakers toward interest rate targets for bringing price stability. On the oil front, oil prices have dropped sharply to near $87.00 after the International Monetary Fund (IMF) cuts global growth projections. The institution has trimmed its 2023 global Gross Domestic Product (GDP) forecast to 2.7%, 20 basis points (bps) lower than expectations made in July, keeping the 2022 projections unchanged at 3.2%. It is worth noting that Canada is the largest exporter of oil to the US and weak oil prices will weaken Canada’s fiscal balance sheet.
Traders assume interest rates in Japan and Switzerland could steadily go up next year

The Swiss Currency (CHF) Pair Stays Inside Bearish Chart Pattern

TeleTrade Comments TeleTrade Comments 12.10.2022 10:14
Downbeat oscillators add strength to the bearish bias but 0.9850 appears the key support. Buyers need validation from 1.0030 to retake control. USD/CHF remains pressured after the intraday low, extending the previous day’s pullback from a four-month high to 0.9950 heading into Wednesday’s European session. In doing so, the Swiss currency (CHF) pair stays inside a five-week-old rising wedge bearish chart pattern. In addition to the quote’s latest weakness and the bearish formation around the multi-day top, the bearish MACD signals and the downbeat RSI (14), not oversold, also favor USD/CHF bears of late. That said, one-week-old horizontal support near 0.9915 lures the intraday sellers ahead of highlighting the stated wedge’s support line, close to 0.9850 by the press time. Should the quote remains bearish past 0.9850, a slump to the monthly low of around 0.9780 appears imminent during the theoretical south-run targeting the 0.9310 level. On the flip side, the upper line of the stated wedge, around 1.0030, restricts short-term USD/CHF upside before directing buyers towards the tops marked in June and May, near 1.0050 and 1.0065 in that order. If USD/CHF bulls keep the reins past 1.0065, the odds favoring a gradual run-up towards the year 2019 peak surrounding 1.0240 can’t be ruled out. USD/CHF: Four-hour chart Trend: Limited downside expected
Oil Prices Rise as OPEC Cuts Output and API Reports Significant Inventory Drawdown

Bank Of England (BoE) Interventions Ineffective | The USD/JPY Pair Spiked Above The 146 Level For The First Time In 24 Years

Swissquote Bank Swissquote Bank 12.10.2022 10:37
We are only Wednesday, and the Bank of England (BoE) already intervened twice this week, to cool down the unbearable negative pressure on the British sovereign bonds. But the BoE Governor Bailey’s lack of tact sent all efforts up in smoke. The UK sovereign and sterling remain under a decent selling pressure. All eyes are on FOMC minutes and the US inflation data Beyond Britain, all eyes are on FOMC minutes and the US inflation data. Today, the minutes from the FOMC’s latest meeting will reveal if some Federal Reserve (Fed) members are concerned about going ‘too fast’ in terms of rate hikes. US will also reveal the latest producer price index for the month of September. The US factory-gate prices are expected to have slowed from 8.7% to around 8.4%. Then tomorrow, we will have a better insight about the situation in consumer prices. The headline CPI is expected to have slowed from 8.3% to 8.1%, but core inflation may have spiked higher, which is bad news for those praying for the Fed to slow down the pace of its rate tightening. Elsewhere, the IMF cut its global growth forecast for next year to 2.7%, from 2.9% in July, and from 3.8% in January, and said that there’s 25% probability that growth will slow to less than 2%. In the euro area, the GDP could rise just 0.5% next year. Forex Market The EURUSD remains under a decent pressure of the strong dollar, and only a soft inflation data from the US could help the euro bears take a pause. In Japan, things are not necessarily better. The USDJPY spiked above the 146 level for the first time in 24 years, and investors couldn’t trade the 10-year JGBs for three days, because the BoJ broke the system by buying just too much of the 10-year bonds to conduct a yield curve control strategy. Swap traders are now betting that the BoJ can’t carry on with abnormally low interest rates for so long, and will be forced to hike its rates at some point. Watch the full episode to find out more! 0:00 Intro 0:37 It’s not time for a gaffe, Mr. Bailey! 3:31 Jamie Dimon sees another 20% drop in S&P500 4:23 But it all depends on US inflation and the Fed policy! 6:27 Intel crops jobs 7:32 IMF cuts global growth forecast 8:04 EURUSD under pressure 8:38 US crude slips below $90pb 8:47 BoJ will soon be forced to act on rates to stop yen depreciation Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #UK #GBP #gilt #Bailey #Liz #Truss #sovereign #crisis #FOMC #minutes #USD #inflation #PPI #CPI #crude #oil #Intel #IMF #growth #forecast #JPY #BoJ #FTSE #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
The Bank Of England Has Warned That Negative Growth Will Extend All The Way

The Market Doubts That The Bank Of England (BoE) Will Deliver On Its Promises To Extend Its Temporary Bond Purchases

InstaForex Analysis InstaForex Analysis 12.10.2022 10:53
The UK has recently stepped up efforts to prevent financial market chaos from spreading beyond the $1 trillion part of the pension industry after the government of Prime Minister Liz Truss alarmed investors with its proposals. In his speech, Finance Minister Kwasi Kwarteng said he would present his fiscal strategy, along with economic forecasts approved by the budget oversight body, on October 31, almost a month earlier than planned. This led to a surge in volatility in the markets, especially after the Bank of England seemed to be going to extend emergency measures to support the bond market until early next month. These moves were expected to be part of the government's efforts to restore investor confidence. Last month, the finance minister sparked a collapse in pound by announcing a £45 billion unfunded stimulus package that undermined the Bank of England's inflation-fighting program. Kwarteng obviously acted under increasing pressure from politicians and the government, as everyone expected more effective action to stabilize public finances. The proposals, including economic forecasts, were also supposed to be released on November 23, but the finance ministry said on Twitter earlier this week that they would come out sooner, which led to another spike in market volatility. Against this news, 30-year yields rose 17 basis points to 4.56%, especially since the market doubts that the BoE will deliver on its promises to extend its temporary bond purchases during an aggressive rate hike. pension funds exposed to liability-based investment risks can clear their positions after the UK government triggered a market crash by announcing the allocation of £45 billion ($50 billion), which they wanted to receive due to tax cuts. After yesterday's statements, pound continued to lose positions one by one, so now buyers are focused on defending the support level of 1.0930 and resistance level of 1.1050. Only the breakdown of the latter will open the path to 1.1120, 1.1180 and 1.1215. Meanwhile, a return of pressure and decline below 1.0930 will push GBP/USD down to 1.0870 and 1.0800.   Relevance up to 08:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324069
Japan: 4Q22 GDP rebounded, but less than expected

It Is Expected, That The Japanese Government Intervenes In The Market At The End Of This Week

InstaForex Analysis InstaForex Analysis 12.10.2022 10:59
On Wednesday morning, the Japanese currency was covered by a strong tsunami caused by the USD. Paired with the dollar, the yen crossed the red line at 145.90 and collapsed to a new 24-year low. The dollar has dispersed Today's culminating event in the foreign exchange market should be the release of the minutes of the September FOMC meeting. Recall that last month, as part of the current tightening cycle, the US central bank raised the interest rate by 75 bps for the third consecutive time and signaled the continuation of an aggressive course in order to curb inflation faster. Now traders hope that the Federal Reserve's minutes will shed light on the central bank's future plans regarding rates. If the report turns out to be more hawkish, it will strengthen expectations for another increase in the indicator by 75 bps. This development is an excellent driver for the yield of 10-year US government bonds. Ahead of the release of the FOMC minutes, the indicator soared to a 14-year high at 4.006%. The jump in yields contributed to the dollar's growth in all directions. At the start of Wednesday, the DXY index rose by 0.16% and tested a 2-week high at 113.54. At the same time, the greenback showed the best dynamics against the yen, which is absolutely logical. Among all the currencies of the Group of 10, the JPY is particularly sensitive to the growth of long-term US bond yields, since the same Japanese indicator is still near zero. The growing monetary divergence of Japan and the United States has led to the fact that this year the yen has sunk against the dollar by more than 20%. And this morning, the yen set another anti-record. The USD/JPY pair jumped by more than 0.3% and touched the level of 146.35. The last time the quote was traded at this level was in August 1998. Is the intervention close? Of course, the fact that dollar bulls crossed the red line again further increased the risk of repeated currency intervention by the Japanese authorities. Recall that the Japanese government intervened in the market for the first time in 24 years three weeks ago, when the USD/JPY pair reached the level of 145.90. Now, when the quote turned out to be much higher than this level, many traders are afraid of a repeat of the September scenario in the near future. However, this time Japanese politicians will most likely not focus on any particular red line. At this stage, the more important indicator will be the rate of change in the exchange rate. This was announced this morning by Japanese Finance Minister Shunichi Suzuki. "If the yen falls rapidly, it will force the Japanese government to push the red button again," Commonwealth Bank of Australia strategist Joseph Capurso shared his opinion. Meanwhile, many analysts warn that in the short term, the dollar's growth may accelerate significantly on all fronts, including against the yen. Today's FOMC minutes is far from the only obvious driver for the dollar. The real rocket fuel for the USD may be tomorrow's release of statistics on inflation in the United States for September. If the market sees that consumer price growth is still steady, it is likely to reignite a wave of speculation about an even sharper rate hike in America. In this case, the dollar may demonstrate another parabolic growth. Then Japan will simply have no other choice but to re-intervene. The yen is doomed anyway According to Kapurso, the Japanese government will intervene in the market by the end of this week. However, as in September, the effect of the intervention will be short-lived. Any fluctuations caused by the intervention of the USD/JPY pair will stop within a few weeks, the analyst is certain. The quote will be able to recover fairly quickly, since the dollar now has very strong support: the Fed's November meeting is ahead, which means the next round of rate hikes. The asset has excellent growth potential in the longer term. Even if in the future the Fed starts to slow down the pace of tightening its monetary rate a bit, the Bank of Japan policy will still remain ultra-soft. This should support the US currency. We expect that the dollar will remain strong at least until next spring, and we maintain our 3-month forecast for the USD/JPY pair at 147.00, Rabobank analysts said.   Relevance up to 09:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324071
FX Markets React to Rising US Rates: Implications and Outlook

The Fed Is Ready To Sacrifice Whatever It Takes To Contain Inflation

InstaForex Analysis InstaForex Analysis 12.10.2022 11:07
Risk appetite continues to fall as expectations for softer policy are decreasing more and more. Cleveland Fed President Loretta Mester has recently said that the bank has a lot of work to do to curb inflation, so it currently sees no reason to slow the pace of interest rate hikes. Fight fed with inflation Fed officials are now raising interest rates at the fastest pace seen in decades. In this way, they are trying to suppress stubbornly high inflation, which continues to grow and is in the region of a forty-year high. And since the Fed raised rates by 75 basis points last month to a target range of 3.25%, most likely, it will hit 4.4% by the end of this year, which means that there will be 1.25% increase at the November and December meetings. Mester reiterated that the US central bank will have to raise rates slightly higher than expected as high inflation continues despite efforts. It is difficult to doubt this, especially after the recent report on the state of the labor market, where the unemployment rate has fallen to almost historical lows, and new jobs have been created and continue to be created. Nevertheless, lowering inflation is the top priority as many are now suffering from having to spend more money on necessities like gasoline and food. The Fed also stressed that they will do everything possible to curb inflation even if their efforts hurt the economy. So far, this is not so noticeable yet as retail sales remain at a fairly high level. Fed officials predict that the unemployment rate could rise to 4.4% from the current level of 3.5%. In addition to raising rates, the Fed is also getting rid of its bloated balance sheet. Mester thinks the process is going smoothly. EUR/USD Talking about EUR/USD, quotes have reached the support level of 0.9680, but now there is a slight correction ahead of an important inflation report in the US. To resume growth, it is necessary to break above 0.9730, as only that will push the quotes to 0.9775 and 0.9810. Meanwhile, a break of 0.9680 will restore pressure on the pair and push it to 0.9640, 0.9590 and 0.9540. GBP/USD As for GBP/USD, it continues to decline, so buyers are focused on defending the support level of 1.0930 and resistance level of 1.1050. Only the breakdown of the latter will open the path to 1.1120, 1.1180 and 1.1215. Meanwhile, a return of pressure and move under 1.0930 will push GBP/USD down to 1.0870 and 1.0800.   Relevance up to 09:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324075
European Markets Await Central Bank Meetings After Strong Dow Performance

Most Likely, Unemployment Will Surge Amid Tight Monetary Policy

InstaForex Analysis InstaForex Analysis 12.10.2022 11:36
Chicago Fed President Charles Evans has recently said that the central bank is sticking to its mandate to bring inflation down even if it means people will lose their jobs. This means that interest rates will remain at the highest possible level for a long time regardless of the economy slipping into recession, or the labor market deterioration. According to the data presented by the US Department of Labor, the number of non-farm payrolls increased by 263,000 in September, while the unemployment rate fell to 3.5%. This is quite good data, but Fed officials, including Chairman Jerome Powell, warned that the end result of the central bank's efforts to curb inflation could lead to the deterioration of the labor market. Most likely, unemployment will surge amid tight monetary policy. EUR/USD Talking about EUR/USD, quotes have reached the support level of 0.9680, but now there is a slight correction ahead of an important inflation report in the US. To resume growth, it is necessary to break above 0.9730, as only that will push the quotes to 0.9775 and 0.9810. Meanwhile, a break of 0.9680 will restore pressure on the pair and push it to 0.9640, 0.9590 and 0.9540. GBP/USD As for GBP/USD, it continues to decline, so buyers are focused on defending the support level of 1.0930 and resistance level of 1.1050. Only the breakdown of the latter will open the path to 1.1120, 1.1180 and 1.1215. Meanwhile, a return of pressure and move under 1.0930 will push GBP/USD down to 1.0870 and 1.0800.
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Possible Scenarios Of The US Dollar To Japanese Yen (USD/JPY) Pair

Saxo Bank Saxo Bank 12.10.2022 11:38
USDJPY in steepest trend in 30+ years is facing strong resistance at 147.65, peak from 1998. Trend is stretched and USDJPY is forming a rising wedge top and reversal pattern  USDJPY Earlier this week buyers manage to break and close above the resistance at 145.145 was the 1.618 projection of the July correction.At the time of writing USDJPY is breaking above the peak of the very volatile trading day 22nd September. The energy from that day suggests USDJPY could move to the Fibonacci projection 1.382 at 148 but 1.618 projection at around 149.34 is not unlikely. If that scenario unfolds USDJPY will be testing the upper trendline in what looks like a rising wedge pattern (two black rising lines). Short-term uptrend is a bit stretched indicated by divergence on RSI but the uptrend is intact.   However, as can be seen from the monthly chart there is strong resistance at 147.65. 147.65 is the peak in 1998 and within few cents also the length of the 3rd vawe from 2012 to 2015. The uptrend since 2021 is the steepest and fastest the past 30+ years and it is quite stretched. There is still no divergence on RSI however, but since October is still not over the jury is still out. A possible scenario could be for USJPY to spike above the 147.65 to 148-149 and then exhaust. If USDJPY closes below the lower trendline of the rising wedge on the daily chart it is a strong indication of trend reversal. Break out for wedges usually occurs 2/3 of the way to the apex (where the two lines meet) and we are approximately 60% of the way.If USDJPY closes above the upper trendline this Wedge reversal scenario has been demolished.        Source: https://www.home.saxo/content/articles/forex/ta-usdjpy-12102022
From UFOs to Financial Fires: A Week of Bizarre Events Shakes the World

Mester's (Fed) Statements Are Generally Riddled With Pessimism

InstaForex Analysis InstaForex Analysis 12.10.2022 11:58
Fed officials expressed disappointment that the energetic increase in interest rates has not yet brought the desired effect. Cleveland Fed President Loretta Mester said the central bank should continue raising rates since the necessary progress in reducing inflation has not yet been made. Mester's statements are generally riddled with pessimism, including a potential recession, weak economic growth and strong increase in unemployment. But the US government seems to be avoiding admitting that a downturn or recession is already taking place, even though the latest GDP data makes this clearer with its negative readings. But even if the upcoming inflation data improves a bit in annual terms (from 8.3% to 8.1%), it is unlikely for the Fed to change its hawkish position. Thus, the current scenario in the forex market will continue, while a local rebound may occur in European and US stock indices. Commodity assets will halt ahead of news from the US. Strong movements will begin shortly before the release of inflationary indicators. Forecasts for today: EUR/USD The pair is consolidating in the range of 0.9670-0.9800 in anticipation of the release of inflation data in the US. If the figure turns out to be in line with forecasts or higher, the pair will resume falling to 0.9550 after it overcomes 0.9670. XAU/USD Spot gold is also consolidating in the range of 1660.25-1678.00. If tomorrow's inflation data from the US is in line with forecasts or higher, expect a breakdown of the support level and a drop in price to around 1643.40.   Relevance up to 08:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324059
India: Another solid year ahead for the economy

Indian Rupee: Reserve Bank Of India May Hike The Rate By 25bp According To ING Economics

ING Economics ING Economics 12.10.2022 15:25
Coming in just above the consensus estimate of 7.36%, India's inflation data for September provides the Reserve Bank (RBI) with some room to scale back on its recent tightening, and we maintain our forecast for only a 25bp rate hike in December Source: Shutterstock 7.41 September CPI YoY% As expected It's always food Saying that food prices were the main driver for the increase in the September inflation rate is true, but it is also not very interesting given the fact that food accounts for around 45% of the Indian CPI basket by weight. In any given month, food will almost certainly be either the main reason Indian inflation rose or the reason that it fell.  But within the food category, there were solid month-on-month gains in the biggest sub-group, cereals (2.0%, the second monthly increase of 2% or more), and the third biggest sub-group, vegetables also posted solid price increases (2.62%, also for the second consecutive month). And helping push the contribution of food to the total, some declines in food prices in August (meat and fish, and eggs) swung back to positive price changes in September, which is if anything, more supportive for inflation acceleration as solid sequential monthly price gains.   There were modest contributions to the overall total from all the other sub-components of the main index, with the exception of personal care and effects, and the contribution to the overall total from housing more than halved from the previous month, though didn't make much of an impression on the CPI total.        Contributions to MoM% inflation growth Source: CEIC, ING Nothing too alarming here What this inflation release did not do, was suggest that Indian inflation is running out of control. The last four months of inflation increase on a sequential monthly basis, have been fairly steady at around 0.5-0.6%. Even if the price level continued to rise at this pace, year-on-year inflation would slowly drift down to around 6%, and there are good reasons to believe it will slow more than that. In fact, as soon as next month, inflation should fall back into the mid-range of 6%, and besides a brief uptick over the December-January period –  entirely due to base effects, we see inflation easing back to around 5.5% by March next year.    Rates, and inflation forecasts Source: CEIC, ING RBI isn't done yet, but nearly What this probably means for monetary policy is this:  Policy rates have probably not peaked yet, but they can be raised at a slower pace, and we look for only a 25bp hike at the next policy-setting meeting in December. That will take the repo rate to 6.15%, and we think that at that point, the RBI may be done.  It also means that there is the possibility of some reduction in rates as soon as the second quarter of 2023, as headline inflation drops below the nominal policy rate and returns rates back to "real" positive values. There is certainly scope for the RBI to trim some of this year's tightening in 2023 and begin to re-focus on growth.  That combination of a return to positive real policy rates and a more supportive setting for growth is a better environment for the INR. And although the near-term outlook for the currency remains difficult, with the Fed still hiking aggressively, before the year-end, that backdrop might be looking a lot more benign.  Read this article on THINK TagsReserve Bank of India INR Indian inflation Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EUR/USD Trading Analysis and Tips: Navigating Signals and Volatility

On The New York Stock Exchange, 1818 Of Securities Fell In Price

InstaForex Analysis InstaForex Analysis 13.10.2022 08:00
At the close of the New York Stock Exchange, the Dow Jones was down 0.10%, the S&P 500 was down 0.33% and the NASDAQ Composite was down 0.09%. The leading performer among the components of the Dow Jones index today was JPMorgan Chase & Co, which gained 1.65 points (1.62%) to close at 103.61. Quotes of Coca-Cola Co rose by 0.66 points (1.21%), closing trading at 55.14. Intel Corporation rose 0.29 points or 1.16% to close at 25.33. The biggest losers were Walgreens Boots Alliance Inc, which shed 0.67 points or 2.05% to end the session at 31.94. Walmart Inc was up 1.13% or 1.50 points to close at 131.17, while Boeing Co was down 0.87% or 1.15 points to close at 130.42. . Leading gainers among the S&P 500 index components in today's trading were Royal Caribbean Cruises Ltd, which rose 11.48% to 45.36, Norwegian Cruise Line Holdings Ltd, which gained 11.61% to close at 12. 98, as well as shares of Carnival Corporation, which rose 9.79% to close the session at 7.29. The biggest losers were Albemarle Corp, which shed 7.89% to close at 251.45. Shares of T. Rowe Price Group Inc lost 5.14% to end the session at 98.07. Quotes of Entergy Corporation decreased in price by 4.52% to 96.58. Leading gainers among the components of the NASDAQ Composite in today's trading were Pintec Technology Holdings Ltd, which rose 191.16% to hit 0.91, Agrify Corp, which gained 88.02% to close at 0.95, and also shares of 9F Inc, which rose 83.42% to close the session at 0.35. The biggest losers were Fednat Holding Co, which shed 33.87% to close at 0.22. Shares of T2 Biosystms Inc lost 30.00% and ended the session at 0.06. Kinnate Biopharma Inc lost 26.65% to 8.12. On the New York Stock Exchange, the number of securities that fell in price (1818) exceeded the number of those that closed in positive territory (1274), while quotes of 132 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,902 stocks fell, 1,820 rose, and 278 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.18% to 33.57. Gold futures for December delivery shed 0.33%, or 5.50, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 2.70%, or 2.41, to $86.94 a barrel. Futures for Brent crude for December delivery fell 2.13%, or 2.01, to $92.28 a barrel. Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.03% to 0.97, while USD/JPY edged up 0.70% to hit 146.88. Futures on the USD index rose 0.06% to 113.19.   Relevance up to 05:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/296618
Inflation slowdown may let Reserve Bank of Australia go for 50bp or inaction

The AUD/USD Pair: Bears On The Aussie (AUD) Are Also Helped By Raw Materials

InstaForex Analysis InstaForex Analysis 13.10.2022 08:06
The Australian dollar got into a double situation. On the one hand, the price is trying to break above the resistance of 0.6300 and the descending price channel line (green), which may lead to a subsequent increase to 0.6360, and pushes the price to such a scenario of convergence with the Marlin Oscillator, on the other hand, the price is held in a downward direction as a price channel, and the oscillator channel. The bears have a stronger vector. The 0.6197 target is the nearest price channel line. Bears on the aussie are also helped by raw materials, which have been falling in price for the main groups for three days. The price is staying below the 0.6300 level on the four-hour chart. The Marlin Oscillator is not trying to move into the positive area. Above the level of 0.6300, the price is waiting for the resistance of the MACD line, so without good reason the price is unlikely to attack this level.   Relevance up to 04:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324161
Unraveling UK Inflation: The Bank of England's Next Move

Another Consolidation Of The GBP/USD Pair May Be More Effective Than Yesterday And The Day Before Yesterday

InstaForex Analysis InstaForex Analysis 13.10.2022 08:13
Yesterday, the pound gained 130 points, returning to Monday's range. The price did not reach resistance at 1.1170, which was prevented by the Marlin Oscillator, which turned down from the zero line (daily). Following the price of the oscillator indicates the price's weakness. As a result, the price may quickly decline to the nearest support (1.0820) and even try to gain a foothold under it. On a four-hour scale, the price is winding up on the MACD line, which in general looks like a consolidation under the resistance of 1.1170. The signal line of the Marlin Oscillator is turning down from the zero line. The subsequent consolidation under the MACD line, with the support of Marlin, may turn out to be more effective than it was yesterday and the day before yesterday.   Relevance up to 04:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324163
The Euro Will Probably Continue Its Upward Movement In The Near Future

The Price Of EUR/USD Pair Is Still Consolidating Below The 0.9724 Level

InstaForex Analysis InstaForex Analysis 13.10.2022 08:19
Yesterday's publication of the minutes from the last Federal Reserve meeting showed a rather hawkish mood of the members of the monetary policy committee, but the markets practically did not react to it, if we do not take into account a brief revival at the time of the immediate release. Today the focus will be on US inflation data for September. Core CPI is projected to rise from 6.3% y/y to 6.5% y/y, headline CPI is expected to decline to 8.1% y/y from 8.3% y/y in August. If we add to these mixed forecasts the expected increase in initial jobless claims, which is expected to increase from 219,000 to 225,000, that is, with a jump above the one and a half month data, then preferences for long positions on the dollar will prevail. The price is still consolidating below the 0.9724 level on the daily chart. The Marlin Oscillator is growing, so it is undesirable for the bears to delay pushing through the euro, as the bulls can become more active and consolidate above the specified key level. And the 0.9855 target opens above it. The main scenario assumes a decline to support 0.9520. On the four-hour chart, the price is generally consolidating under the MACD indicator line. The Marlin Oscillator shows the intention to reverse down from the zero line. We are waiting for the price in the target range of 0.9520/54.   Relevance up to 04:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324165
Foreign exchange - Euro against US dollar - preview

The EUR/USD Pair Continues To Be Very Close To 20-Year Lows

InstaForex Analysis InstaForex Analysis 13.10.2022 08:23
EUR/USD 5M Yesterday, the euro/dollar pair corrected to the Senkou Span B line, after which it resumed its downward movement. The descending channel has been reshaped and now has a wider view and a smaller angle of inclination. The price continues to be below both lines of the Ichimoku indicator, so everything now speaks in favor of a further fall in quotes. We would like to note the following: this week there is an extremely small amount of macroeconomic statistics and important fundamental events. But even in this state of affairs, the euro can't do anything against the dollar. It would seem to be a great opportunity to at least adjust, but no! The pair slowly and inexorably continues to slide down. There were even grounds for a small increase in the euro. The EU industrial production report turned out to be better than expected, but even this did not make traders buy rather than sell. Everything remains as it was! There was complete boredom with trading signals for three consecutive days. Not a single signal was formed on Wednesday, and the price did not even approach any important level or line during the day. Therefore, traders did not have to be active yesterday. COT report: The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 9,300, and the number of shorts by 19,200. Accordingly, the net position grew by about 9,900 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 45,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 13. Emergency G-7 meeting and sixth Ramstein meeting. Overview of the GBP/USD pair. October 13. Bank of England: QT program postponed, asset purchases will continue at a double rate. Forecast and trading signals for GBP/USD on October 13. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The downward trend has resumed on the hourly timeframe as the downward channel has taken on a new look. The pair renewed its local low yesterday and continues to be very close to 20-year lows. Since we still do not observe any serious news in support of the euro, most likely, the fall in quotes will continue. We highlight the following levels for trading on Thursday - 0.9553, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9767) and Kijun-sen (0 .9788). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. There will be no important events and reports in the European Union. But the most important report of this week will be published in the US - inflation for September. As we said in our fundamental articles, we do not believe that inflation will somehow affect the outcome of the next Federal Reserve meeting, increasing or decreasing the likelihood of a 0.75% rate hike. However, today the market reaction to this report may follow. And the stronger the actual value will not correspond to the forecast, the stronger the reaction can be. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324153
Declining Industrial Activity and PPI in Poland Signal Potential Policy Easing

The Cabel Market (GBP/USD): Is Just A Pullback And Not A Resumption Of The Upward Trend

InstaForex Analysis InstaForex Analysis 13.10.2022 08:34
GBP/USD 5M The GBP/USD currency pair started a new round of correction on Wednesday, but again failed to gain a foothold above both lines of the Ichimoku indicator. Therefore, the downward trend continues, and we have formed a downward channel to visualize what is happening. Now both major pairs are inside the descending channels and keep high chances for further decline. Of course, the channels do not mean that now the euro and the pound will fall 100% for two or three days. An important inflation report will be published in the United States, which can significantly affect the movement. The pair may also consolidate above the critical line. But we still state that the vast majority of indicators are now pointing down, while the foundation and geopolitics continue to be very difficult for risky currencies and assets. Reports on GDP and industrial production will be released in the UK. Both turned out to be weaker than forecasts, so it would be logical to see the pound's fall yesterday. Instead, we saw tangible growth. Notable - not because the movement itself was strong, but because the volatility of the pound/dollar pair remains very high and any movement is tangible. Despite a pretty good movement during the day, the only trading signal was formed at night. The price bounced off the Senkou Span B line and the 1.0930 level, but at the time of the opening of the European trading session it had moved far enough away from the point of formation, so it was not necessary to open a position "to catch up". During the day there was not a single approach of the price to an important level or line. COT report: The latest Commitment of Traders (COT) report on the British pound showed minimal changes. During the week, the non-commercial group closed 17,700 long positions and 14,600 short positions. Thus, the net position of non-commercial traders decreased by 3,100, which is not a lot for the pound. We could assume that the actions of major players and the movement of the pound have finally begun to coincide, but the pound has already begun a new round of decline, which risks transforming into a continuation of the global downward trend. The net position indicator has been growing slightly over the past weeks, but the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 42,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 13. Emergency G-7 meeting and sixth Ramstein meeting. Overview of the GBP/USD pair. October 13. Bank of England: QT program postponed, asset purchases will continue at a double rate. Forecast and trading signals for EUR/USD on October 13. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair rolled back up again on the hourly timeframe, but so far this rollback is just a pullback, and not a resumption of the upward trend. If the pound manages to settle above the descending channel and the critical line, then the trend may change to a short-term upward one. But for now, everything says more about the fact that the fall will continue. In any case, there are no buy signals yet. We highlight the following important levels on October 13: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.1016) and Kijun-sen (1.1119) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. There will be no interesting events in the UK on Thursday, meanwhile, the US will release its inflation report. In fact, this report is the only event of the day, so all movements will pass through the prism of it. The reaction can be strong if the actual value is very different from the forecast. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324155
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

The AUD/NZD Pair: We Will Be Looking For A Temporary Corrective Decline

InstaForex Analysis InstaForex Analysis 13.10.2022 08:43
First, let's take a look at the larger picture. The Aussie dollar has been under pressure from the Kiwi dollar since its long-term peak reached in November 1984 at 1.7637. It found a long-term low in April 2015 at 1.0050. All in all, it has been a 30-year decline. The rally out of the 2015 low hasn't been that impressive, but we think that more upside should be expected in the longer term and a move towards at least 1.2500 should be expected. Zooming in a bit, we can see that AUD/NZD has just hit strong resistance at 1.1439 where it has been rejected before and will likely need to gather some energy to be able to break clearly through this resistance. Therefore, we will be looking for a temporary corrective decline towards 1.0880 before the next run higher to try to break above resistance at 1.1439 for the expected rally towards 1.2500.   Relevance up to 07:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/296634
Caixin Services PMI Data Has Helped The Chinese Yuan (CNH)

The USD/JPY Risk Profile Has Faded Away In The Face Of The Lack Of Volatility In The Market

TeleTrade Comments TeleTrade Comments 13.10.2022 08:53
USD/JPY oscillates near the 147.00 shore as the risk-off impulse is extremely quiet. Fed minutes and the money market have given a green signal for a third consecutive 75 bps rate hike. Apart from the US CPI, investors await fresh impetus on BOJ’s intervention plans. The USD/JPY pair is displaying a lackluster performance in the Asian session as investors are awaiting the release of the US Consumer Price Index (CPI) data. The asset is oscillating in a narrow range of 146.67-146.90 and is expected to continue the rangebound performance. The risk profile is turning quiet amid the absence of volatility in the market. The US dollar index (DXY) has recovered its morning losses and is attempting to extend its recovery above the day’s high at 113.35. The mighty DXY is expected to remain in the grip of bulls as odds for a fourth consecutive 75 basis points (bps) by the Federal Reserve (Fed) are escalating with sheer momentum. Money market bets indicate that the probability of a 75 bps rate hike announcement is 84%. Wednesday’s keen-jerk reactions by the DXY were comfortably absorbed by the market participants after the release of the Fed policy minutes. Fed policymakers found favoring the continuation of the current pace of hiking interest rates to achieve the agenda of price stability. Also, reaching the targeted terminal rate and sticking to it for an uncertain period is critical to contain the mounting price pressures. On the Tokyo front, odds for intervention in the currency market by the Bank of Japan (BOJ) are skyrocketing. The verdict has strengthened as Japanese Finance Minister Shunichi Suzuki said on Thursday that the government will take decisive action in the FX market if speculative moves are observed in the yen. He further added that volatility is in the consideration of Japanese officials rather than a specific dollar/yen level. Well, volatility in the asset cannot be ruled out as escalating anxiety ahead of the US inflation data will explode and wild moves will be witnessed by the market participants.  
Economic Calendar Details and Trading Analysis - August 7 & 8

The USD/INR Pair May Portray A Sideways To Positive Move Ahead Of The US CPI

TeleTrade Comments TeleTrade Comments 13.10.2022 08:58
USD/INR snaps three-day downtrend amid firmer yields, US dollar. Five-month high India inflation fails to push RBI hawks. US Dollar’s safe-haven demand, upbeat US fundamentals versus India favor pair buyers. Any disappointment from US CPI will have limited repercussions on DXY’s broad fundamental strength. USD/INR picks up bids to 82.32 while paring the first weekly loss in four ahead of Thursday’s European session. In doing so, the Indian rupee (INR) pair traces firmer US Treasury yields ahead of the US inflation numbers for September. Other than the pre-data anxiety, hawkish Fed bets and the recent Federal Open Market Committee (FOMC) Meeting Minutes, as well as the US data, could also be linked to the USD/INR pair’s run-up. The latest Fed Minutes mentioned that the policymakers are concerned about inflation and fear doing too little. With this, the CME’s FedWatch Tool prints a nearly 85% chance of the Fed’s 75 bps rate hike in November. On the other hand, the US action to increase hardships for Chinese chipmakers also propels the pair prices. On the contrary, Chinese media chatters suggesting the government’s plan to buy houses as a part of the stimulus seemed to have put an immediate floor under the riskier assets, which in turn negatively affect the US dollar. Additionally, the softer US inflation expectations, as per the 10-year and 5-year breakeven inflation rates per the St. Louis Federal Reserve (FRED) data, also probe the greenback buyers. At home, India's retail inflation accelerated in September to a five-month high of 7.41% year-on-year as food prices surged, raising fears of further interest-rate hikes when the central bank meets for its next policy review in December, reported Reuters on Wednesday. With this, the odds of the Reserve Bank of India's (RBI) 35 bps rate hike in December appear more lucrative. However, the volume of rate increase and the time distance portray a more hawkish scenario for the Fed than the RBI, which in turn favors the USD/INR bulls. Moving on, USD/INR may portray a sideways to positive move ahead of the US CPI, expected to ease to 8.1% YoY versus 8.3% prior. However, the more important CPI ex Food & Energy is likely to increase to 6.5% YoY from 6.3% prior and can favor more upside considering the recession woes. Technical analysis One-month-old support line, around 82.15 by the press time, restricts short-term USD/INR downside amid bullish MACD signals.
Analysis Of The USD/CHF Pair Movements

The USD/CHF Pair: There May Be A Challenge For The Bulls

TeleTrade Comments TeleTrade Comments 13.10.2022 09:08
USD/CHF remains mildly offered inside immediate symmetrical triangle. Bearish divergence on RSI teases sellers but clear break of triangle appears necessary. Tops marked in June, May add to the upside filters. USD/CHF prints mild losses around 0.9975-80 as bears flex muscles inside a three-day-old triangle formation ahead of Thursday’s European session. That said, the lower high of prices join the lower tops on RSI (14) to portray the hidden bearish divergence, which in turn lures sellers. However, a clear downside break of the stated triangle’s support line, near 0.9970 by the press time, appears necessary for the USD/CHF bears to retake control. Following that, 200-HMA and an upward-sloping support line from September 30, respectively near 0.9910 and 0.9880, will gain the trader’s attention. It’s worth noting that the USD/CHF pair’s weakness past 0.9880 won’t hesitate to challenge the monthly low surrounding 0.9785. Meanwhile, the pair’s successful trading beyond the 1.0000 parity level, also comprising the stated triangle’s resistance line, could propel the quote toward the monthly high near 1.0020. Even so, tops marked in June and May, around 1.0050 and 1.0065 could challenge the USD/CHF bulls before directing them to the April 2019 peak of around 1.0240. USD/CHF: Hourly chart Trend: Further downside expected
CEE: CNB Strives to Counter Dovish Market Expectations

The Volatility In The New Zealand To US Dollar (NZD/USD) Pair Market Declined Sharply

TeleTrade Comments TeleTrade Comments 13.10.2022 09:39
NZD/USD is juggling above 0.5600 as the focus has shifted to the US inflation data. Investors are going light towards the US inflation event. Business NZ PMI is seen lower due to the extremely tight RBNZ policy. The NZD/USD pair is displaying topsy-turvy moves in the early European session as investors have shifted sideways ahead of the US inflation. Considering the worth of September’s inflation report, investors are going light and will prefer to make an informed decision post-release. The risk profile has been muted as volatility has contracted dramatically. Meanwhile, the 10-year US Treasury yields have blocked around 3.92% and the US dollar index (DXY) is barricaded into the chartered territory. The mighty DXY is hovering around the immediate hurdle of 113.30. Wednesday’s hawkish Federal Reserve (Fed) minutes and mixed Producer Price Index (PPI) data failed to fetch a power-pack action in the DXY. The Fed minutes dictated that Fed policymakers are in favor of keeping the policy extremely tight as the achievement of price stability is the foremost priority. Also, the sustainability of the tight policy for a period is highly crucial until the price pressures decline for several months. The consideration of US inflation projections indicates that the headline Consumer Price Index (CPI) will decline to 8.1% while the core CPI will land higher at 6.5%. Uncertainty over the US CPI data has reached the rooftop as it will provide lucidity over the likely monetary policy action by the Fed, scheduled for the first week of November. On the kiwi front, investors are focusing on the Business NZ PMI data, which is due on Friday. The economic data is seen lower at 52.5 vs. the prior release of 54.9. It seems that the consequences of restrictive policy by the Reserve Bank of New Zealand (RBA) are playing out now as firms have postponed their expansion plans due to higher interest obligations. Apart from that, China’s CPI data will be keenly watched. As per the consensus, the annual CPI data will accelerate to 2.8%.
Weak July Performance: Polish Retail Sales Disappoint Amid Economic Challenges

The Crude Palm Oil Outlook Is Slightly Bearish For The Malaysian Ringgit (MYR)

TeleTrade Comments TeleTrade Comments 13.10.2022 09:49
Crude palm oil prices have swiftly retreated in recent months, due to oversupply and demand concerns. In Malaysia, this is likely to be offset by an import growth slowdown and tourism recovery. The crude palm oil outlook is hence slightly bearish for the ringgit, economists at MUFG Bank report. Crude palm oil outlook very slightly MYR-negative “The crude palm oil outlook is slightly bearish for the MYR. This is because of the fact that crude palm oil exports are likely to be a secondary driver to Malaysia’s current account dynamics. Tourism is expected to more than offset a slight reduction in the contribution to the current account balance.”  “We forecast some improvements in the MYR in 2023. After an expected 4.75 for USD/MYR at the end of 2022, we forecast it to head lower to 4.65 in Q2-2023 and 4.60 in Q3-2023.”
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The Japanese Central Bank Has Shown No Inclination To Hike Interest Rates And Is Continuing With Its Monetary Easing

TeleTrade Comments TeleTrade Comments 13.10.2022 10:24
A combination of factors offers support to the safe-haven JPY and exerts some pressure. Confusion over the BoE’s emergency bond-buying program weighs on the British pound. The BoJ-BoE policy divergence warrants caution before placing aggressive bearish bets. The GBP/JPY cross attracts fresh selling near the 100-day SMA barrier on Thursday and reverses a part of the previous day's strong move up to the weekly high. The cross maintains its offered tone through the early European session and is currently hovering near the daily low, just above the mid-162.00s. Speculations for more currency market intervention by Japanese authorities, along with the prevalent cautious market mood, help ease the recent bearish pressure surrounding the Japanese yen. This, in turn, is seen as a key factor exerting some downward pressure on the GBP/JPY cross. Japan's Finance Minister Shunichi Suzuki reiterated earlier this week that the government stands ready to intervene and respond appropriately to excess FX moves. Moreover, Bank of Japan BoJ Governor Haruhiko Kuroda said on Wednesday that the government intervention last month to stop one-sided depreciating moves in JPY was quite appropriate. Meanwhile, the market sentiment remains fragile amid concerns about economic headwinds stemming from rapidly rising borrowing costs and geopolitical risks. Apart from this, a resurgence of COVID-19 cases in China fuels recession fears and tempers investors’ appetite for riskier assets. The British pound, on the other hand, is pressured by the fact that the Bank of England could end its program of temporary gilt purchases on October 14 and concerns about the UK government's fiscal plans. The new UK government said that it would not reverse its vast tax cuts or reduce public spending. That said, speculations for a full 100 bps rate hike by the UK central bank offer some support to sterling and could limit losses for the GBP/JPY cross. Adding to this, a big divergence in the policy stance adopted by BoJ (dovish) and other major central banks (hawkish) could lend support to the GBP/JPY cross. In fact, the Japanese central bank has shown no inclination to hike interest rates and remains committed to continuing with its monetary easing. Furthermore, Japan's Prime Minister Fumio Kishida said that the BoJ needs to stick to its ultra-lose policy until wages rise, warranting caution for bearish traders.
Analysis Of Movement Of The Canadian Dollar To Swiss Franc Pair (CAD/CHF)

With The SNB Broadly Following The ECB, We See Relative Rates As An Inferior Driver For The EUR/CHF

TeleTrade Comments TeleTrade Comments 13.10.2022 10:35
EUR/CHF has traded fairly volatile, most recently moving back up to 0.97. Nonetheless, economists at Danske Bank expect the pair to edge lower toward 0.93 over the coming months. Swiss National Bank to hike by 75 basis points in December “We expect the SNB to hike by 75 bps in December to curtail underlying inflation pressures bringing the policy rate to 1.25%. With the SNB broadly following the ECB, we see relative rates as an inferior driver for the cross.” “We continue to forecast the cross to move lower on the back of fundamentals and a tighter global investment environment.” “We continue to forecast EUR/CHF at 0.93 in 12M.”
India’s Investing In Program For The Green Hydrogen Industry | Covid Situation In China Is Getting Serious

Due To Covid Situation, Half Of Shanghai Districts Will Be Closed

TeleTrade Comments TeleTrade Comments 13.10.2022 10:44
The Financial Times (FT) is reporting on Thursday, half of Shanghai districts will be under lockdown this weekend to test millions of residents after signs emerged of renewed community transmission of coronavirus. This comes after China’s financial hub reported 11 new infections on Thursday. The strict measures will affect eight of Shanghai’s 16 districts, including Pudong, one of the worst-hit areas at the start of the lockdown, the FT said. Meanwhile, Beijing is also on high alert after a cluster of cases was detected in Chaoyang on Thursday. Market reaction The discouraging news from China seems to have little to no impact on risk sentiment so far, as the S&P 500 futures see a 0.20% gain while the AUD/USD pair is re-approaching 0.6300, at the time of writing.
Saxo Bank Podcast: A Massive Collapse In Yields, Fed's Tightening Cycle And More

The US Inflation Data Will Influence Fed Decisions

InstaForex Analysis InstaForex Analysis 13.10.2022 11:09
The Federal Reserve is faithful to aggressive monetary tightening despite cooling down in the labor market and a slowdown in the US economic growth. The Fed's minutes of the September policy meeting released on Wednesday confirms the case that the Federal Reserve would continue its aggressive monetary policy on track in the long term until inflation declines to the annual target rate of around 2%. In this context, the US inflation data which is due today will determine the next Fed's policy move in terms of the rate hike's degree. According to the consensus, the annual CPI is expected to edge down in September to 8.1% following an 8.3% increase in August. On the contrary, the CPI could have climbed 0.2% on month following a 0.1% uptick in August. The actual CPI readings will be on tap tonight. The factory inflation data released on Wednesday was dismal. Instead of the expected decline to 8.4% on year from 8.7% in the previous month, the actual PPI slipped to 8.5% in September. Besides, the PPI grew to 0.4% on month against the expected 0.2% rise. How are financial markets and the currency market in particular likely to respond to the data on consumer inflation? I assume that if the actual score reveals a similar dynamic as the factory inflation, namely a notably increase in September and the annual print higher than expected, the stock market will respond with a new wave of sell-offs. The commodity market will also be hit by selling. In contrast, the US dollar will again receive support as a safe haven asset. In turn, stock indices will creep down because stocks will come under pressure from rising borrowing costs. Commodities can be also weighed down by the fact that the global economy is on the verge of a recession. Yields of the benchmark 10-year Treasuries could surpass the landmark level of 4% and grow higher which is another serious factor to reinforce the greenback's strength. Intraday outlook EUR/USD The currency pair is consolidating slightly above 0.9670. The news of inflation acceleration in the US could boost demand for the US dollar. As a result, EUR/USD could break this level and fall to 0.9550. USD/CAD The currency pair is trading with minor fluctuations and might extend its growth to 1.3950 after the level of 1.3850 is broken after the release of the US inflation data.   Relevance up to 08:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/324181
Growth Of The USD/JPY Pair Is Hampered By Resistance

An Ultra-Soft Monetary Policy Of The Bank Of Japan And Its Consequences

InstaForex Analysis InstaForex Analysis 13.10.2022 11:14
The Japanese currency in a perfect storm    The yen continues to experience the most dramatic fall since 1998. On Thursday night, JPY collapsed against the dollar to almost 147. It was pushed to a new low by a dovish speech by the head of the Bank of Japan. The Japanese currency is once again caught in a perfect storm. On the one hand, the yen is now under strong pressure from expectations of more hawkish actions from the Federal Reserve, and on the other hand, the usual dovish mantras of the BOJ. Yesterday, the JPY fell against the greenback to a new 24-year low at 146.80. The release of the US producer price index for September weighed on the dollar-yen pair. The statistics The statistics did not justify the forecasts of economists, who expected an increase of 0.2%. In reality, the PPI rose more - by 0.4%, which increased traders' fears about a more sustainable growth in consumer prices. US inflation data for last month will be released today. The consumer price index for September is expected to show a slight slowdown (to 8.1% year on year). However, let's not forget about the unexpected turn of events last month, when the statistics for August turned out to be worse than expected. This significantly strengthened the hawkish determination of the Fed and caused a jump in the USD/JPY pair. "If the US CPI rises above economists' estimate again, selling of the yen could pick up, making intervention more likely," said Yoshifumi Takechi, an analyst. Recall that in September the Japanese government intervened in the market for the first time since 1998, when the JPY fell against the dollar to 145.90. Yesterday, the yen fell well below this red line and set a new anti-record, but there was no intervention. Now the Japanese authorities have chosen a different tactic, focusing not on a certain price threshold, but on the speed of the JPY fall. US dollar growth is a global problem This was announced on Wednesday morning by Japanese Finance Minister Shunichi Suzuki, and a little later his words were confirmed by BOJ Governor Haruhiko Kuroda. In addition, Kuroda stressed yesterday that the widespread growth of the dollar is a global problem that needs to be addressed together. According to Kuroda, many economies have already come to an understanding of this and are ready to discuss this issue at the meetings of the G20 and the International Monetary Fund, which are taking place these days in Washington. In fact, Kuroda hinted at the possibility of a coordinated intervention against the dollar, but the market ignored his threat. After Kuroda's speech, the US currency, on the contrary, received an even more powerful impetus. By trying to support the yen, the official only made things worse as he couldn't help but make dovish comments. The discrepancies in the monetary policy The head of the BOJ once again confirmed his commitment to an ultra-soft monetary policy and keeping interest rates at an ultra-low level. The main arguments in favor of a dovish strategy are still the same: the Japanese economy has not yet recovered to its pre-pandemic levels, and inflation in the country is still relatively modest compared to the stalemate in the West. Kuroda's comment once again convinced traders that the discrepancies in the monetary policy of the Fed and the BOJ will grow, especially since now the markets expect an increase in rates in America by at least 150 bps by the first quarter of 2023. The Fed will continue its aggressive fight against inflation, and this will help further strengthen the already strong dollar this year. USD/JPY now On Thursday night, the yen hit a low of 146.98 against the dollar, but USD/JPY sank slightly in the morning. At the time of writing, the asset fluctuated within a narrow range of 146.67-146.90. Amid the expectation of a key inflation report in the US, the USD/JPY pair remains upward, but fears of a potential intervention by the BOJ are forcing traders to be cautious. In any case, analysts predict increased volatility of the asset in today's trading. The main target for the bulls will be the level of 147, while the bears need to fall below 146.66 to seize the initiative.   Relevance up to 08:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324191
The Commodities Feed: China's GDP Disappoints, Adding Pressure to the Complex

Wave Of Demand Coming For Nuclear Power | Expensive American Wheat

Saxo Bank Saxo Bank 13.10.2022 11:35
Summary:  Markets traded sideways yesterday as we await today’s US September CPI data. The FOMC minutes out last night generally failed to move the needle as Fed members generally indicated they feared doing too little to get ahead of inflation more than doing too much. USDJPY traded to new 24-year highs, so far failing to elicit a response or intervention from the Bank of Japan, which intervened previously against JPY weakness at a lower USDJPY level some three weeks ago.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The decline in US equities continued yesterday with S&P 500 futures closing at a new low for this drawdown cycle and this morning the index futures are trading around the 3,590 level. Today’s US September CPI figures are the key event today with a negative surprise (worse than expected inflation) adding to worsening sentiment in US equities as the market in that case would price a higher policy rate. The Q3 earnings season is also ongoing with PepsiCo reporting yesterday (see summary below) and earnings today from Walgreens Boots Alliance and Delta Air Lines. The levels in S&P 500 futures are still standing at the edge of the cliff and under the right circumstances US equities could slide lower in a fast clip. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland China equities retreated, Hang Sent Index down 1% but mid-day and CSI300 lower by 0.3%. HSBC (00005:xhkg) outperformed and gained 0.7%. Worst performers in Hong Kong included China developers, Chinese banks, sportswear, electronic hardware, and China Internet names. In A shares, technology and healthcare stocks outperformed. The Chinese Communist Party (CCP) concluded yesterday a 4-day session in preparation for its 20th national congress, in a communique, the CCP said it had established comrade Xi’s core position on the party and hailed the party’s pandemic control strategy a success. In its first National Security Strategy white paper, the US Biden Administration named China as the only competitor with both the intent and the power to reshape the international order. USD remains near highs as USDJPY punches higher still Traders abandoned their reluctance to take USDJPY higher and risk a fresh blast of intervention from the Bank of Japan/Ministry of Finance yesterday, taking the pair to new 24-year highs just shy of 147.00. The 147.66 level from 1998 is the highest level for the pair since the early 1990’s. The USD action was generally muted elsewhere as EURUSD is finding the 0.9700 area sticky and GBPUSD bobs around near 1.1100, with the market mulling what will happen after the Bank of England halts its emergency QE measures, supposedly on Friday. (more below). The next event risk is the September US CPI release later today and whether it moves the sentiment needle and more importantly, US treasuries, where yields have consolidated below the cycle highs of two weeks ago and near 4.00%. Gold (XAUUSD) Gold remains rangebound around $1670 ahead of today’s important US CPI print, and following last week's aggressive short squeeze, potential sellers have turning more cautious at this stage where the market has been left pondering how close we are to seeing peak hawkishness, a development that may signal a low in gold. In our latest gold update we highlight the reasons behind our medium-term bullish outlook but also why the ducks are not yet lined up properly for the recovery to begin. Support at $1658, the 61.8% retracement of the recent correction, with resistance at $1687 and $1695. Crude oil (CLX2 & LCOZ2) Crude oil traded steady overnight after falling for a third day on Wednesday in response to a report showing a large crude build last week and OPEC and EIA both slashing their demand outlook for 2023. In addition, a hawkish set of minutes from the Federal Reserve also weighed ahead of today’s US CPI print for September. The API reported a 7 million barrel build in crude oil inventories with official data from the EIA following later today. The US led plan to cap prices on Russian oil sales remain a focus with detailed talks about to begin, but the risk it could lead to higher, not lower global prices may still prevent it from being introduced. Following two downbeat oil market updates from OPEC and the EIA, both lowering 2023 demand by around 0.4m b/d, the IEA will publish its report during the European morning. Mixed US crop report with focus on wheat and soybeans Wheat prices in Chicago dropped by 2% on Wednesday after the US Department of Agriculture cut its demand forecast, primarily due to a downgrade in exports to the lowest since 1971. A revision that still left ending stocks at their lowest since 2007 but higher than analyst forecasts. American wheat is too expensive – due to the strong dollar - and sales have been slow, the USDA wrote in its monthly WASDE report. Corn futures (ZCZ2) meanwhile dropped after the report signaled bigger inventories before settling unchanged. Soybeans (ZSX2) jumped sharply before ending up 1.3% with a lowering of US production leading to much lower-than-expected US ending stockpiles. A development being partly offset by increases in Brazil’s soy harvest and export outlook. US treasuries (TLT, IEF) US treasury yields continue to trade not far below the cycle highs near 4.00% in the 10-year treasury benchmark. An auction of 10-year T-notes yesterday saw tepid demand and lower interest from foreign bidders. A 30-year auction is later today, but the important catalyst of the day is the US September CPI release and whether even a soft print can make much of an impression on the bond market, given that the Fed has indicated it will continue to hike even as economic growth weakens, inflation falls and unemployment begins to rise. What is going on? FOMC minutes show Fed more afraid of doing “too little” to stem inflation risks Not a huge surprise to markets to receive this message late yesterday, as Fed rhetoric has consistently pointed in that direction and the market expectations for Fed policy finally now reflect the Fed’s own “dot plot” forecasts of rates continuing to rise a bit more beyond the end of this year. This came after many months of the market expecting that Fed rates would end next year below their level at the end of this year, likely figuring that the economy would weaken significantly from the policy tightening. “Many participants emphasized that the cost of taking too little action to bring down inflation likely outweighed the cost of taking too much action.” Late yesterday, MIchelle Bowman of the Fed’s Board of Governors argued for continued large rate increases and the early November FOMC meeting is nearly fully priced to deliver a 75 basis point hike, with December’s meeting priced at 50-50 odds of 50 vs. 75 basis points. Sweden’s CPI hits new cycle highs in September … showing how the energy crisis in Europe and the weak krona continue to drive higher inflation. The headline CPI released this morning hit 10.8%, above the 10.5% expected and up from 9.8% in August, while the core inflation level rose to 7.4%,  slightly below the 7.5% expected and up from 6.8% in August. PepsiCo surprises on growth and margin If investors were looking for a negative surprise and evidence of margin compression PepsiCo was not the answer. The beverage and snacks business delivered better than expected revenue and earnings in Q3 and lifted fiscal year organic revenue growth to 12% from previously 10%. PepsiCo experienced a bit of margin compression during the quarter but enough to offset the higher revenue growth. It looks like PepsiCo is a very robust business during inflation. Cameco and Brookfield Renewable to buy Westinghouse The uranium miner Cameco and the renewable energy business Brookfield Renewable Partners are teaming up to buy the nuclear services business Westinghouse as the outlook for nuclear power is improving. Cameco’s CEO said yesterday that he sees a ‘wave’ of demand coming for nuclear power and that Russia’s invasion in Ukraine is a game changer for the industry. What are we watching next? The September US CPI data point and Friday’s Retail Sales data are the next two data points of interest for US yields, the US dollar and likely risk sentiment in general ... although earning season is likely to begin generating more headlines and sentiment shifts in coming days. As noted above, it is questionable how much information value the market can extract from any downside surprise in the CPI print today, given Fed forecasts that it will continue its tightening regime even as the inflation and the economy (presumably) decelerate. Therefore, upside surprises may generate more significant market volatility. Elsewhere, core Retail Sales growth has been anaemic in recent months, but the ISM Services has remained strong, suggesting a still strong services sector. Bank of America’s CEO Brian Moynihan was out yesterday claiming that the US consumer is “in good shape” and spending more than a year ago despite the ominous backdrop. “The consumers basically have more money in their accounts by multiples than they did pre-pandemic.” UK Chancellor Kwarteng to skirt blame for any gilt market volatility if BoE winds down emergency QE on Friday as it has claimed it will on Friday Kwarteng commented that any turmoil “is a matter for the governor”. Could Bailey be made a scapegoat and fired over the recent debacle in the gilt market, which was also in part due to the launch of the government’s “mini-budget”, in which abandoning planned tax rises and introducing new cuts suggested the government was set abandoning any sense of caution on the longer term trajectory of fiscal imbalances. The FT cites “people briefed on the discussion” that the BoE may be forced to continue to support the market after tomorrow. The 30-year gilt yield returned above the 5.00% level it touched before the BoE intervened yesterday before dropping toward 4.8% by the close. The BoE is priced to hike more than 100 basis points at its November 3 meeting and another 100 basis points in December. Xi Jinping speech at party congress on Sunday The speech will be closely watched for the Chinese leader’s response to the current global backdrop, including the recent moves by the US to limit Chinese access to semiconductors, as well as for hints on the domestic agenda, especially the future of the Zero Covid policy. Earnings to watch Today’s earnings focus is Walgreens Boots Alliance due to its large footprint with the US consumer selling everything from pharmacy prescription drugs to shampoo and other hygiene products. Given PepsiCo’s stronger than expected result yesterday Walgreens may also surprise in its Q3 results. Delta Air Lines is another important earnings release to watch as travel and leisure are consumer discretionary activities that could see weakness given the cost-of-living crisis. Today: Progressive, Fast Retailing, Tryg, Walgreens Boots Alliance, Fastenal, BlackRock, Delta Air Lines, Domino’s Pizza Friday: Shanghai Putailai New Energy, YTO Express Group, PNC Financial Services, JPMorgan Chase, Morgan Stanley, Citigroup, UnitedHealth Group, Wells Fargo, US Bancorp, First Republic Bank Economic calendar highlights for today (times GMT) 0800 – IEA Monthly Oil Market Report 1230 – US September CPI 1230 – US Weekly Initial Jobless Claims 1430 – EIA's Natural Gas Storage Change 1500 – EIA's Weekly Crude and Fuel Stock Report 0130 – China Sep. PPI/CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-13-2022-13102022
The Bank Of Canada (BoC) Is Likely To Respond With Additional Oversize Hikes

The Recovery In Oil Prices Is Having A Negative Impact On The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 13.10.2022 11:57
USD/CAD trims a part of its modest intraday gains, though the downside remains cushioned. A goodish bounce in crude oil prices underpins the loonie and acts as a headwind for the pair. Aggressive Fed rate hike bets continue to lend support as traders await the key US CPI report. The USD/CAD pair struggles to capitalize on its modest intraday uptick and retreats a few pips from the daily high touched during the early European session. Spot prices, however, manage to hold above the 1.3800 round-figure mark as investors prefer to stay on the sidelines and brace for the crucial US consumer inflation figures. In the meantime, a goodish recovery in crude oil prices seems to underpin the commodity-linked loonie and acts as a tailwind for the USD/CAD pair. The fundamental backdrop, however, still seems tilted in favour of bullish traders and supports prospects for an extension of the recent rally from the 1.3500 psychological mark. Hence, any meaningful pullback might still be seen as a buying opportunity and is more likely to remain limited. Investors remain worried that a deeper global economic downturn and a resurgence in COVID-19 cases in China will hurt fuel demand. In fact, OPEC on Wednesday lowered its global oil demand growth estimates for both 2022 and 2023. This, to a larger extent, overshadows the initial enthusiasm over the OPEC+ decision last week to slash production by the most since the 2020 COVID pandemic and should cap any meaningful recovery for the black liquid. The US dollar, on the other hand, is seen consolidating its recent gains recorded over the past week or so, though remains well supported by more hawkish cues from the Federal Reserve. In fact, the minutes from the last FOMC meeting on September 20-21 released on Wednesday showed that officials remain committed to raising interest rates to curb inflation. Hence, the focus remains glued to the crucial US CPI report, due later during the early North American session. Given that US Producer Price Index climbed more than expected in September, investors anticipate consumer inflation to remain stubbornly high and reinforce the Fed's hawkish rhetoric. This, in turn, favours the USD bulls and adds credence to the near-term positive outlook for the USD/CAD pair. That said, repeated failures to make it through the 1.3840-1.3850 supply zone warrant some caution before positioning for any further appreciating move.
Tight Monetary Policy Is Already Weighing On The Swedish Housing Market

The Current Situation Have Not A Positive Effect On The Swedish Krona (SEK)

TeleTrade Comments TeleTrade Comments 13.10.2022 12:07
Weaker growth prospects have sent the Swedish krona to its weakest level since March 2020. Economists at Danske Bank expect EUR/SEK to move higher over the coming months to 11.20. Krona hit by triple whammy  “We stick to our long-held, non-consensus, negative view on the SEK, which is underpinned by the gloomy global growth outlook, associated negative outlook for global and Swedish equities alike and relative monetary policy – a triple whammy if you like.” “The Riksbank’s 100 bps rate hike had no lasting positive impact on the krona. The rate path underwhelmed expectations. In addition, more frontloading will exacerbate the downturn in the Swedish housing market, a headwind for the krona.” “Forecast: 10.80 (1M), 11.00 (3M), 11.20 (6M), 11.20 (12M).”
The South America Are Looking For Alternatives To The US Currency

Could Inflation Make Bitcoin Touch Levels Close To $18K?

Ed Moya Ed Moya 13.10.2022 11:48
US stocks got a little boost after the FOMC minutes provided a sprinkle of dovish hints. The word of the week is ‘calibrate’. Officials are already talking about a calibration to the pace of tightening which means we are getting closer to that Fed pivot. Earlier, Pepsico quarterly results provided some optimism that this earnings season wasn’t going to be all doom and gloom.  Pepsi delivered a strong earnings beat and raised their guidance.  Minutes The Fed Minutes showed tightening will continue even as the labor market slows.  The key takeaway from the minutes was that several participants noted that it would be important to calibrate the pace of further policy tightening with the aim of mitigating the risk of significant adverse effects on the economic outlook. We’ve heard from Fed’s Daly and Brainard and they have voiced support for remaining data-dependent when it comes to future hikes and right now it looks the data is about to get ugly.  It will be hard for the Fed to remain aggressive with tightening as the economic deteriorates quickly. The Fed is giving us subtle dovish hints here and that is good news for risky assets.  Officials saw slowing the pace of hiking at some point and that could easily happen after the November FOMC meeting.  Investors should continue to expect a 75bp rate hike at the November 2nd FOMC decision, but a downshift in December would be likely if the global growth outlook continues to deteriorate and if the US economy softens.   Oil Crude prices tumbled after reports that Russia was willing to sell oil at a discount.  Russian seaborne oil deliveries are about to have a price cap put in place and it looks like Russia is getting desperate for revenues.  Last month, Russia was threatening they would stop selling oil to countries that would agree to use a price cap, but now it seems like that was just a bluff.  Oil was heavy all day as today’s news cycle was rather bleak for the crude demand outlook. A hot US PPI report suggests inflation is proving to be sticky and will keep the risk elevated that the Fed will send the economy into a recession.  The German government anticipates a recession is coming next year as inflation runs wild alongside the global energy crisis.  China is also having trouble with COVID again as Shanghai and Shenzhen see infections rise after the holiday.  Selling pressure on WTI crude has been strong all week and prices could continue to slide towards the $85 region.  The oil market is still tight despite significant downgrades to the outlook by OPEC has put a tentative end to calls that oil was easily heading towards the $100 level.  Post Fed-minutes all risky assets, including oil pared losses after several policy makers signaled they are getting ready to calibrate their pace of tightening. Gold Gold remains in choppy waters ahead of a pivotal inflation report that could raise the risk of even more Fed tightening.  The latest producer prices report showed inflation is not easing at all and that has some traders expecting more pain to hit the bond market, which will drive the dollar to new heights.  Gold won’t do much of anything until the inflation report and that means prices should bounce between the $1670 and $1690 levels. Gold prices popped after the FOMC minutes signaled some policymakers are getting ready to calibrate their tightening path.  Crypto Bitcoin continues to hover around the $19,000 level as traders await tomorrow’s inflation report that could make or break risk appetite. Crypto news today focused on a Congressional probe on miners and the strain they are putting on the state’s power grid. Bitcoin could breakout after the inflation report as Wall Street will have a better idea if the Fed needs to maintain an aggressive tightening stance beyond the November FOMC meeting. If inflation stays hot, Bitcoin could be vulnerable to test last month’s lows just ahead of the $18,000 level. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. FOMC Minutes React: Calibration means Pivot can’t be too far, Pepsico impresses, Oil tumbles, Gold pares losses, Crypto hovers around $19k - MarketPulseMarketPulse
The US Dollar (USD) And The US Dollar To Chinese Yuan (USD/CNH) Pair Show An Upward Move

The US Dollar (USD) And The US Dollar To Chinese Yuan (USD/CNH) Pair Show An Upward Move

TeleTrade Comments TeleTrade Comments 13.10.2022 12:22
USD/CNH is seen picking up further upside traction once 7.2200 is cleared, according to UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia. Key Quotes 24-hour view: “Yesterday, USD traded within a range of 7.1549/7.1916 before closing largely unchanged at 7.1782 (+0.04%). The price actions appear to be consolidative in nature and we expect USD to trade between 7.1450 and 7.2000 for today.” Next 1-3 weeks: “Despite the relatively rapid rise from last week’s low of 7.0128, upward momentum is not strong. That said, the risk is still on the upside but USD has to break clearly above 7.2200 before further advance is likely. Overall, only a breach of the ‘strong support’ at 7.1250 would indicate that the upside risk has subsided.”
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

How Would Bank Of Japan Determine What Is The Best Time To Intervene And Protect Japanese Yen?

Conotoxia Comments Conotoxia Comments 13.10.2022 12:38
Today's release of US inflation data for September may be the one the markets have been waiting for, since the beginning of the week. In light of these expectations, the situation on the Japanese yen, which has weakened once again to levels not seen in 24 years, seems to be shaping up interestingly, with only a trace left on the USD/JPY chart after the Bank of Japan's latest intervention. Yen exchange rate The Japanese yen has weakened towards JPY147 per USD, being close to the levels of August 1998. The recent weakness of the Japanese currency may be due to the statements of the Bank of Japan Governor, who confirmed the maintenance of loose monetary policy in Japan to support the economic recovery. Haruhiko Kuroda added that Japan's economy is still recovering from the pandemic, and that the Bank of Japan's goal is to keep inflation stable in the region of 2 percent. This approach may mean that Japan and the United States may present two very different approaches to monetary policy. In the U.S., interest rates may continue to be raised, while in Japan they may remain unchanged, close to zero. Source: Conotoxia MT5, USDJPY, MN Another Bank of Japan intervention after inflation data release? Japanese Finance Minister Shunichi Suzuki reiterated today that the government is ready to take "decisive" action to counteract the yen's steep decline, but added that the issue is the dynamics of exchange rate movements, not a specific level. As a result, it is the volatility on the USD/JPY pair that may determine interventions, not where the exchange rate of the pair might be . Nevertheless, with today's release of inflation data from the US, volatility could be elevated. This, in turn, could favor the Japanese authorities' decision to intervene. The Japanese intervened in the currency market last month for the first time since 1998, when the yen weakened to levels not seen in 24 years. The intervention, from which there is no trace now, was expected to cost nearly $20 billion, according to Bloomberg data. US inflation data in focus According to market consensus, US inflation in September on a m/m basis was expected to rise by 0.2 percent, while core inflation was expected to rise by 0.5 percent. Meanwhile, on an annual basis, price growth was expected to be 8.1 percent for CPI inflation and 6.5 percent for core inflation. It is the latter reading that may be particularly important. While CPI inflation may have peaked at 9.1 percent in June, the peak for core inflation at 6.5 percent may be surpassed today. Publication today at 14:30 GMT+2. Daniel Kostecki, director of the Polish branch of Conotoxia Ltd. (Cinkciarz.pl investment service)The above commercial publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of April 16, 2014. It has been prepared for information purposes and should not constitute the basis for making investment decisions. Neither the author of the study nor Conotoxia Ltd. are responsible for investment decisions made on the basis of the information contained in this publication. Copying or reproducing this work without the written consent of Conotoxia Ltd. is prohibited. Read article on Conotoxia
Stocks Rebound Amid Rising Volatility: Analysis and Outlook

The USD/KRW Pair Driven By External Factors, Will Increase By The End Of The Year

TeleTrade Comments TeleTrade Comments 13.10.2022 14:21
Korean won snapped an eight-week losing streak, rising 1.3% against the US dollar in the first week of October. Nevertheless, economists at MUFG Bank expect a weaker KRW by the end of Q4 this year. KRW to be affected by sentiment in near-term “The KRW likely remains largely driven by external drivers near term. Given a persisting US dollar strength and global growth concern, particularly recessions in UK, Europe and US, we see the pro-cyclical KRW to remain under-perform relative to EM Asian currencies.” “Also, with a possible worsening of current account balance caused by deteriorating exports amid a softening semiconductor industry and weakening global demand, we see USD/KRW to move up to 1,470 by the end of Q4 this year.”
The Price Of USD/JPY Pair Has To Fight With The Resistance Level

The US Dollar To Japanese Yen (USD/JPY) Pair Is Moving Towards The 150.00 Level

InstaForex Analysis InstaForex Analysis 14.10.2022 08:00
The quote of the USD/JPY pair reached the target level of 147.35 (the price peaked at 147.67), but a distinct divergence with the Marlin Oscillator on the daily chart did not have time to form. This suggests that the price may continue to rise, and the next target at 150.00 is the next price channel line of the monthly timeframe. On the four-hour chart, the price showed the greatest volatility directly at the level of 147.35. Marlin is declining, but in the form of a corrective structure from growth since October 5th. There is a potential for price growth and indicators. We are waiting for further advancement of the USD/JPY pair towards the target of 150.00.   Relevance up to 04:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324284
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

The New Target Level For The Cable Market (GBP/USD) Is 1.1500

InstaForex Analysis InstaForex Analysis 14.10.2022 08:04
The British pound is running away with increased energy from critical supports, the transition to which from the technical side prescribes it to fall into the abyss (under parity with the dollar). Expectations of a rate hike by the Bank of England at a meeting on November 3 served as an incentive for the pound. Yesterday the price overcame two levels of resistance and is now approaching the daily MACD line and the target level of 1.1500. Consolidation above it opens the target at 1.1760 (July low). The Marlin Oscillator is growing in the positive area. The price settled above the level of 1.1305 on a four-hour scale. The price is above both indicator lines, the Marlin Oscillator is growing in the upward trend area. We are waiting for the price at the nearest target level of 1.1500.   Relevance up to 04:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324286
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

After Yesterday's Reversal, What Is The Scenario For The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 14.10.2022 08:10
Yesterday was another day of high volatility. The euro traded in the range of 176 points, closing the day with an increase of 74 points. The price has moved above the resistance level of 0.9724, now the 0.9855 target is just ahead. The daily-scale MACD indicator line is approaching the level. According to the first version of the correction, the growth may end in this area. According to the second option, the growth may continue to the level of 0.9955 - to the low of July 14, which will create a false exit of the price above the MACD line. If later the price returns and settles under the MACD line, then the subsequent decline may be below 0.9520. The media cite arguments for the euro's growth: the market has fully priced in the Federal Reserve's November rate hike of 0.75% and even the "ceiling" of the rate of 4.85% in March next year. We allow such an interpretation and quote the euro at current levels at a rate of 4.85%, but then political factors should be removed from the components, including the latest event - sabotage at the Druzhba oil pipeline in Poland. Oil rose by 2.44% yesterday, the stock index S&P 500 by 2.60%. That is, there is a short-term return of market players to risk. At the same time, yields on US government bonds are not declining. So far, we are seeing a "shake-up" of the market on US inflation data. Yesterday, the core CPI for September showed an increase from 6.3% y/y to 6.6% y/y, while the overall CPI fell from 8.3% y/y to 8.2% y/y. On the four-hour chart, the price settled above the level of 0.9724 and MACD line. Growth stopped at the balance line, which shows the consolidation of the "bulls" for a short-term turning point in their favor. Marlin Oscillator is in the growth zone. We are waiting for the end of the correction either at the nearest level of 0.9855 or at 0.9950, which is more likely due to the nature of yesterday's reversal.   Relevance up to 04:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324288
The EUR/USD Pair Has A Potential For Drop

The Price Of The Euro To US Dollar Pair (EUR/USD) Has Managed To Gain A Foothold

InstaForex Analysis InstaForex Analysis 14.10.2022 08:16
EUR/USD 5M Yesterday, the euro/dollar pair tried to set a volatility record. It passed almost 170 points from the low to the high of the day and all 170 points after the US inflation report was published. The most interesting thing is that the report itself fully corresponded to the forecast value - 8.1-8.2%. However, for the market, the news that inflation in the United States has practically stopped slowing down (the decrease was only 0.1%) had the effect of a nuclear bomb. At first, the dollar grew (which is quite logical), because the dollar fell (which is completely illogical). Thus, we saw multidirectional movements that can only be tied to the inflation report. Another interesting fact is that virtually any September inflation reading would have had no effect on the Federal Reserve's monetary policy plans. There was virtually no chance for inflation to rise. Falling hard - there were chances, but the overall fall would still not be so strong that the Fed abandoned plans to raise the rate by 0.75% again. Thus, we would not be surprised if the market reaction to this report was weak. But it turned out differently. There were several trading signals on Thursday, but each of them was associated with high risks. The first and most adequate sell signal was formed half an hour before the release of the report, when the price rebounded from the level of 0.9747. This signal could be worked out by placing Stop Loss above 0.9747. Subsequently, the pair went down more than 100 points, but the nearest target level was very far away, so traders could close the position with excellent profit just 5 minutes after the report. The buy signal near the level of 0.9747 should not have been worked out, since it was formed late in time. COT report: The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 9,300, and the number of shorts by 19,200. Accordingly, the net position grew by about 9,900 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 45,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 14. "That's all folks". US inflation fell to 8.2%. Overview of the GBP/USD pair. October 14. The Bank of England is preparing for a new powerful rate hike. The pound rushed right off the bat without waiting for US inflation data. Forecast and trading signals for GBP/USD on October 14. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The downward trend still cannot be considered reversed on the hourly timeframe, despite a solid growth yesterday. The price has not really managed to gain a foothold above the Senkou Span B line yet, and the final fall of the dollar after the inflation report cannot be called logical, so the pair may fall back to its original positions today. On Friday, we highlight the following levels for trading - 0.9553, 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9767) and Kijun-sen lines (0.9722). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "overcoming" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. There will be no important events and reports in the European Union. We only have secondary statistics in America. The market, rather, will continue to work out the US inflation report. Strong movement can persist at night. The Europeans did not have the opportunity to work out this report, so a good movement can also be observed in the morning. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324272
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

The Price Of GBP/USD Pair Still Managed To Stay Above The Critical Line

InstaForex Analysis InstaForex Analysis 14.10.2022 08:20
GBP/USD 5M The GBP/USD currency pair showed a powerful upward movement on Thursday, which was absolutely illogical in terms of the fundamental and macroeconomic background. However, this may be the main point - traders are finally ready to buy the pound, despite the disappointing "foundation" and geopolitics. If so, then the growth can continue at least another 400-500 points up. As for the illogicality of the movement, in the morning there was not a single important event or report in either the UK or the US. That is, the pound immediately began to grow, it is not clear why. Further, the US inflation report was published during the US trading session, which was supposed to provoke, rather, the fall of the pair and the growth of the dollar, and not vice versa. Therefore, it is difficult for us to even say how the market interpreted US inflation, what conclusions it made. The pound, thus, once again showed a fairly strong will to win and came one step closer to completing the global downward trend. But at the same time, we are not sure that the fall will end there, after all, there are many factors that can pull the pound back down. Quite a lot of trading signals were generated yesterday, but some of them were blatantly false or it was impossible to work them out. The first buy signal near the Kijun-sen line could be worked out. The price went up about 130 points, and it had to be closed manually before the release of the inflation report. The next signal is a consolidation below 1.1212 – we would be wary of working it out, as a "gap" has formed on the chart. The last buy signal in the form of overcoming 1.1212 could theoretically be worked out, however, it was still formed quite late in time. A strong upward movement made it possible to reach the level of 1.1354 and pass another 130 points in just an hour. COT report: The latest Commitment of Traders (COT) report on the British pound showed minimal changes. During the week, the non-commercial group closed 17,700 long positions and 14,600 short positions. Thus, the net position of non-commercial traders decreased by 3,100, which is not a lot for the pound. We could assume that the actions of major players and the movement of the pound have finally begun to coincide, but the pound has already begun a new round of decline, which risks transforming into a continuation of the global downward trend. The net position indicator has been growing slightly over the past weeks, but the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 42,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 14. "That's all folks". US inflation fell to 8.2%. Overview of the GBP/USD pair. October 14. The Bank of England is preparing for a new powerful rate hike. The pound rushed right off the bat without waiting for US inflation data. Forecast and trading signals for EUR/USD on October 14. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair once again left the downward channel on the hourly timeframe, and at the same time overcame the lines of the Ichimoku indicator. On the 24-hour TF, the price still managed to stay above the critical line, so the pair can now go up another 400-600 points. However, we remind you that the foundation and geopolitics remain complex, which means that long positions should be treated carefully. On October 14, we highlight the following important levels: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.1016) and Kijun-sen (1.1141) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. There will be no interesting events in the UK on Friday, and only a report on retail sales and consumer sentiment index from the University of Michigan in America. The reaction to these reports is unlikely to be strong, but strong movements may persist at night and in the morning, as the Europeans can also work out the US inflation report. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324274
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

The Japanese Currency (JPY) Is Under Pressure, How The EUR/JPY Pair May Develop

InstaForex Analysis InstaForex Analysis 14.10.2022 08:28
The yen remains under pressure and the correction that began back in early June at 144.88 came to an end after testing137.37 in a running expanded flat correction. The next strong rally higher is now ready to develop. We will be looking for a clear break above 144.88 and 145.64 soon for a rally towards 149.79 as the next upside target. In the long term, even more upside towards 164.50 should be expected. In the short term, only a break below support at 140.90 will revive the corrective consolidation from 144.88 and add renewed downside pressure to 133.44.   Relevance up to 06:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/296797
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The Pound To Japanese Yen (GBP/JPY) Pair Can Reach The Level Of 180.68

InstaForex Analysis InstaForex Analysis 14.10.2022 08:35
The rally above resistance at 165.72 indicates that the correction that began after the test of 168.43 in late April was completed with the test of the 50% corrective target. A new rally towards 180.68 should be expected. In the short term, we will be looking for a clear break above resistance at 168.43 to confirm that the correction has been completed and the next impulsive rally is developing. It will take an unexpected break back below support at 159.73 to revive the correction from 168.43 and a revisit to support in the 148.63 - 150.09 area   Relevance up to 06:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/296803
Saxo Bank Podcast: The Bank Of Japan Meeting And More

Japanese Chief Cabinet's Declaration Of Purpose On The Denuclearization Of North Korea

TeleTrade Comments TeleTrade Comments 14.10.2022 08:39
Japanese Chief Cabinet Secretary Hirokazu Matsuno said that “North Korea launched one ballistic missile early Friday.” Additional comments “I believe North Korea would engage in further provocative behavior, possibly a nuclear test.” “Japan will continue to work closely with the US and South Korea to accomplish North Korea's total denuclearization.” Market reaction USD/JPY is trading better bid around 147.25 so far, shrugging off the geopolitical risks surrounding North Korea
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The US Dollar To Canadian Dollar (USD/CAD) Pair Will Continue To Decline

TeleTrade Comments TeleTrade Comments 14.10.2022 08:52
USD/CAD extends the previous day’s pullback from 29-month high, pokes 50-SMA of late. Bearish MACD signals, sustained break of an ascending trend line from September 13 keeps sellers hopeful. Buyers need to provide a daily close beyond 1.3865 to retake control. USD/CAD takes offers to refresh intraday low around 1.3710 during early Friday morning in Europe. In doing so, the Loonie pair stretches Thursday’s losses while poking the 50-SMA support. It’s worth noting, however, that the bearish MACD signals and the pair’s sustained downside break of the one-month-old ascending trend line favor sellers of late. With this, the USD/CAD bears are on the way to an upward-sloping support line from September 14, near 0.9670, a break of which will make the quote vulnerable to refresh the monthly low, currently around 1.3500. Alternatively, recovery moves need to cross the previous support line from mid-September, close to 1.3745 at the latest. Even so, a 12-day-old ascending resistance line of around 1.3865 could challenge the USD/CAD buyers. Following that, a run-up towards the latest swing high near 1.3980 and then to the 1.4000 psychological magnet can’t be ruled out. Overall, USD/CAD is likely to witness further downside but the bullish trend is far from reversing. USD/CAD: Four-hour chart Trend: Further weakness expected
Driving Growth: The Resilience of Green Bonds and Shifting Trends in Sustainable Finance

Will The Bulls Hold The Reins Of The US Dollar To Indian Rupee (USD/INR) Pair

TeleTrade Comments TeleTrade Comments 14.10.2022 08:56
USD/INR is looking to extend the previous rebound amid hawkish Fed bets. Investors await India’s inflation after hotter CPI data from the US. The pair eyes daily close to confirming a rising wedge breakdown. USD/INR is looking to build on Thursday’s late-rebound on the final trading day of the week, as the US dollar attempts a tepid bounce despite weaker Treasury yields and an extended risk-on rally in the Asian stocks. Meanwhile, rising oil prices combined with hotter US inflation-led expectations of Fed rate hikes could limit the further upside in the spot. Attention now turns towards the Indian Whole Sale Price Index (WPI) release ahead of the US Retail Sales and UoM Consumer Sentiment data for fresh trading impetus on the spot. USD/INR: Technical outlook At the time of writing, USD/INR is posting minor gains near 82.30, having breached the rising trendline support at 82.32. Bears, however, need a daily closing below the latter to confirm a rising wedge breakdown on daily sticks. Although the 14-day Relative Strength Index (RSI) is inching towards the overbought zone above the midline, contracting the looming rising wedge formation. If bulls manage to recapture and sustain above the aforesaid critical support-turned-resistance at 82.32, the next upside target is seen at the 82.50 psychological level. In case of a downside break, Thursday’s low at 82.02 will offer immediate support. A breach of the last will kick off a fresh downswing towards the bullish 21-Daily Moving Average (DMA) at 81.45. USD/INR: Daily chart  
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The Aussie Pair (AUD/USD) Is In A Bearish Mood

TeleTrade Comments TeleTrade Comments 14.10.2022 09:11
AUD/USD extends bounce off 2.5-year low, grinds higher around daily top of late. Rebound from the key support joins price-positive oscillators to keep buyers hopeful. Sellers remain hopes unless the quote stays inside five-week-old bearish channel. AUD/USD dribbles around the intraday high of 0.6343 while extending the previous day’s rebound from a 30-month low. In doing so, the Aussie pair remains firmer for the second consecutive day while staying inside a bearish chart pattern, namely the descending trend channel established from September 07. The quote’s rebound from 0.6170 appears a corrective bounce from the aforementioned channel’s support, suggesting further recovery. Also favoring the pair’s upside momentum is the RSI’s gradual uplift from the nearly oversold region and the impending bull cross on the MACD. With this, the Aussie pair is all-set to challenge the 10-DMA hurdle, around 0.6375. However, the bearish channel’s upper line, close to 0.6410 at the latest, could challenge the AUD/USD buyers afterward. In a case where the prices successfully cross the 0.6410 hurdle, the odds of witnessing a run-up toward the monthly high of 0.6547 can’t be ruled out. Alternatively, pullback moves could aim for the 0.6300 threshold before highlighting the March 2020 high near 0.6215. Following that, the lower line of the channel, around 0.6150 by the press time, will be crucial for the AUD/USD bears to watch. AUD/USD: Daily chart Trend: Limited upside expected
EUR/USD Maintains Bullish Advantage: Upward Trend Emerging with Key Support Levels Holding Firm

Could The Downward Trend Of The US Dollar To Singapore Dollar Pair (USD/SGD) change?

TeleTrade Comments TeleTrade Comments 14.10.2022 09:20
The Monetary Authority of Singapore (MAS) tightened policy for the fifth time since October 2021. USD/SGD fell sharply by nearly 100 pips to the low 1.42 level after the MAS announcement. However, economists at Commerzbank believe that such a move is not sustainable. Another shift higher in the mid-point “MAS tightened policy once again by re-centering the SGD NEER (nominal effective exchange rate) mid-point to the prevailing level. We estimate this is akin to a one-off appreciation of +1.5%. The slope of the SGD NEER or pace of appreciation was left unchanged, which we estimate to be around +2% p.a. along with the bandwidth. This was the fifth policy tightening since October 2021 due to the persistent inflation threat.” “We are skeptical whether the move lower in USD/SGD can persist. This is because it is likely to be dominated by the USD leg given the persistent hot US inflation reports which reinforced expectations for further Fed tightening.” “What could change the USD/SGD picture is if we start to see reasons for the Fed to change course. It could eventually come in H2 2023 where we could see a peak in USD/SGD. This is also barring a deep global recession or shock where the USD could yet benefit on safe-haven flows.” “For the SGD NEER, we estimate it is holding around 1% above the new mid-point for USD/SGD at 1.4210, USD/MYR at 4.70, and USD/CNY at 6.1740. The +/-2% range for the SGD NEER corresponds to USD/SGD between 1.4100-1.4670, and the mid-point at 1.4600, ceteris paribus.”
China Yuan (CNH) Prints The First Daily Loss

Authorities Would Like The USD/CNY Pair Return To The 7 Level

TeleTrade Comments TeleTrade Comments 14.10.2022 09:43
The People’s Bank of China (PBoC) will continue to effectively manage market expectations of the CNY exchange rates. In the view of economists at Commerzbank, authorities would like a USD/CNY return to the 7 level. PBoC will allow the CNY to depreciate against the USD in a controllable manner  “We expect the PBoC will continue to use the daily fixing as the main tool to manage the CNY. It could supplement this with other instruments to manage foreign currency liquidity in China.” “We suspect the PBoC will allow the CNY to depreciate against the USD in a controllable manner, provided currencies of China’s major trading partners are also depreciating against the USD. This will keep the CNY relatively stable on a trade-weighted basis.”  “From a medium-term perspective, it’s likely that the PBoC would prefer USD/CNY to return to the 7 mark.”
Analysis Of USD/CHF Pair: The Swiss Currency Pair Rebounds

The Trade-Weighted The Swiss Franc (CHF) Is Even Softer

TeleTrade Comments TeleTrade Comments 14.10.2022 09:52
Yesterday was the third time this year that the USD/CHF reversed sharply from levels just above 1.00. The Swiss National Bank (SNB) could be behind the move as it wants to avoid a soft franc, economists at ING report. What to make of USD/CHF at parity? “Could the Swiss National Bank (SNB) be at work here? Recall that the dollar is the second-largest weight in the Swiss franc trade-weighted basket and a higher USD/CHF will naturally weaken the nominal trade-weighted Swiss franc – something the SNB wants to avoid as it battles inflation. In fact, SNB president Thomas Jordan is turning into one of the most ardent hawks in the central bank community.” “We have quite a forthright view on EUR/CHF at the moment that the SNB wants to guide it lower by 5% plus per year. The higher USD/CHF is making the trade-weighted Swiss franc even softer and if we are right, the SNB should be even more inclined to drive EUR/CHF down to 0.95 and away from the near 0.98 levels at which spot EUR/CHF trades today.”
ECB press conference brings more fog than clarity

The European Central Bank's (ECB) Decisions Will Depend On The Coming Data

TeleTrade Comments TeleTrade Comments 14.10.2022 09:47
European Central Bank (ECB) Vice President Luis de Guindos said on Friday, “our response will depend on how the data evolves in the coming months.” Key quotes “We are dependent on the data we receive.” “There is a very high level of uncertainty.” “Monetary policy has to adjust to these new structural features that may push inflation upwards.” “As a general recommendation, fiscal policy has to be compatible with the process of monetary policy normalization.” “We will do whatever is necessary to bring inflation back to our 2% target over the medium term.” “It is very difficult to determine the level of the terminal rate.” Market reaction The shared currency is unfazed by the above comment, with EUR/USD trading 0.14% higher on the day at 0.9787.
US Nonfarm Payrolls Disappoint: Impact on Dollar and EUR/USD Analysis

Podcast: Moods In The Stock Markets- The Support Levels Of The Nasdaq 100 And S&P 500 And More

Saxo Bank Saxo Bank 14.10.2022 11:26
Summary:  Today we discuss the remarkable turnaround in equities yesterday after a hotter than expected core US CPI print for September pumped Fed rate expectations higher and triggered a sharp new slide in the market. The rally came after both the Nasdaq 100 and S&P 500 tested important support levels. As the headline suggests, we're far from sure that the market comeback offers much information value despite its impressive scale. Elsewhere, we look at the mixed status of USD pairs after yesterday's action, look at natural gas and copper, preview the day and week ahead on the earnings calendar and upcoming macro data points and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast- slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-oct-14-2022-14102022
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

The Monetary Divergence Of America And Japan Will Continue To Put Pressure On The Japanese Yen (JPY)

InstaForex Analysis InstaForex Analysis 14.10.2022 11:48
Yesterday, the foreign exchange market experienced a strong storm. At first, the dollar took off like a rocket in all directions, and then it also sharply sprung back. But it still looks good against the yen. The bouncing dollar On Wednesday, the US currency showed another parabolic growth against all its major competitors. The springboard for the greenback was the shocking data on inflation in the United States. Statistics for September showed that consumer prices in America rose more than expected. On a monthly basis, the indicator rose by 0.4% against the forecast of 0.2%. As for the annual dynamics, inflation also exceeded the preliminary estimate of economists and amounted to 8.2%. This is only 0.1% lower than the value recorded in August. The market saw that the growth of consumer prices in the United States is still stable, despite the aggressive anti-inflationary campaign launched by the Federal Reserve this year. This significantly increased traders' expectations about the continuation of the hawkish course in America and the next increase in the interest rate by 75 bps. Moreover, the hot inflation data again provoked a wave of speculation about a possible rise in the indicator in November by a full percentage point. The probability of such a scenario has increased to 13.4%. Optimism about a more aggressive tightening served as an excellent springboard for the dollar. Literally overnight, the DXY index jumped by more than 0.5%. One of the most productive majors was the USD/JPY pair. The quote soared by 0.7% and set another record at 147.665. The last time the dollar traded against the yen at this level was in 1990. However, the USD/JPY pair did not stay at the 32-year high for long. Shortly after the release of the consumer price index, the large-scale triumph of the greenback was replaced by an epic failure of the same power. Analysts explain this by the fact that the market has already fully embedded in the value of the dollar expectations about sustained inflation and its impact on the future course of the Fed. Now a new trigger is needed for the USD to grow steadily, and we will get it soon. Now everyone's focus is switching to the Fed's monetary policy meeting next month. As we approach the moment X, the dollar will grow on strong US economic data. The yen is an obvious loser Despite its recent rebound, the USD/JPY pair still maintains a strong upward mood. This morning, the asset is staying near the 32-year peak reached a day earlier. Even the growing risk of currency intervention cannot weaken the grip of dollar bulls. At the start of Friday, the Japanese government again threatened to intervene in the market if there is a rapid fall in the yen. Recall that last month, for the first time since 1998, Japan intervened in support of its national currency, when it fell against the dollar below the level of 145.90. Given the recent statements of Japanese officials regarding the intervention, it can be assumed that now they will not protect any specific levels. The other day, the Japanese Finance Minister and the head of the Bank of Japan stressed that at this stage the focus is shifted to the rate of change in the exchange rate. According to analysts, this approach can keep dollar bulls only from sudden movements, but in general USD/JPY will remain in a bullish trend. In the future, the asset will move to new price highs quietly for several weeks. Perhaps at some point it will get bogged down in consolidation again, but the upcoming rate hike in the US will not allow it to go into suspended animation for a long time. The monetary divergence of America and Japan, which has already collapsed the yen against the dollar by almost 28% since the beginning of the year, will continue to intensify and put pressure on the JPY. This week, BOJ Governor Haruhiko Kuroda once again reaffirmed his commitment to a dovish monetary exchange rate. He again stressed that he does not consider the current inflation a reason to raise rates, especially since the Japanese economy has not yet recovered from the COVID-19 pandemic and still needs incentives. Kuroda's comment further aggravated the divergence in the policy of the BOJ and the Fed, especially amid the fact that the market is now expecting further tightening in America. This suggests that the yen's downward trend against the dollar will not change in the near future, even if the threat of further interventions will contribute to slowing the growth of the USD/JPY pair.   Relevance up to 09:00 2022-10-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324310
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

The US Inflation Has Once Again "Upturned The Markets" | US Dollar (USD) Will Continue To Strengthen

InstaForex Analysis InstaForex Analysis 14.10.2022 11:58
Euro and US Dollar The US currency showed a powerful breakthrough after the release of impressive data on inflation in the US. Later, however, the greenback "slowed down" a bit, evaluating the results. This took advantage of the euro, which grew slightly. However, in the future, the chances of the EUR faded away, as the USD rallied again. A new round of upward  A new round of the greenback's upward spiral was recorded after the release of strong US inflation reports. On Thursday, October 13, the US Department of Labor released data on the Consumer Price Index (CPI) for September. Note that this indicator increased by 0.4% m/m, although it was expected to increase by only 0.2% m/m. At the same time, consumer prices in America soared by 8.2% in September, exceeding the forecast by 8.1%. The increase in consumer prices reflects the rising cost of housing, food and medical care, experts emphasize. At the same time, the increase in this indicator is partially offset by the fall in gasoline prices. US inflation data According to the report, the core consumer price index (Core CPI) in the US, excluding the cost of food and energy, rose by 0.6% in September. At the same time, analysts expected it to increase by 0.5% m/m. Note that the annual growth rate of Core CPI rose to 6.6%. An increase in the base CPI demonstrates an increase in the cost of housing, cars and medical care, as well as an increase in education fees. The US Department of Labor report focuses on the spread of high inflation in all areas of the national economy. In this situation, the standard of living of Americans plunged sharply. Against this background, citizens have to use their savings and credit cards to make ends meet. At the same time, experts expect a slowdown in consumer prices in the US. However, the current situation is unlikely to affect the Federal Reserve's plans for a further increase in the key rate. Following strong US inflation data, USD and Treasury yields surged, while US stock futures plummeted. Against this backdrop, expectations of another increase in the Fed's interest rate intensified. At the moment, the central bank is pursuing a hawkish strategy aimed at combating galloping inflation. At the same time, despite the slowdown in the US labor market, the department intends to continue to raise interest rates. At this rate, according to Commerzbank analysts, in the first quarter of 2023, the Fed rate will peak at 5%. EUR/USD Against this background, the dollar is confidently leading, habitually pushing the euro away from key positions. According to DBS Bank economists, the greenback will continue its upward trend until the end of 2022, and by 2023 it will reach the level of consolidation. The dollar is supported by a long-term increase in Fed rates, the bank emphasizes. As a result, on Friday, October 14, the EUR/USD pair was trading near 0.9784. Against this background, the greenback remained calm, and the euro tried to gain a foothold in the conquered positions. At the same time, the pair remained within the current range. Earlier, Credit Suisse economists believed that after strong US inflation data, the EUR/USD pair would test the 0.9500 mark, but this did not happen. Fed's reaction to inflation According to analysts' estimates, the current inflation in the US has once again "upturned the markets", threatening a new wave of tightening of the Fed's rhetoric. In the current situation, traders and investors expect the next rate hikes, as high inflationary inflation rates do not give a respite to the Fed. As a result, the central bank is forced to be "in an aggressive tightening mode," experts emphasize. According to analysts at Oxford Economics, by the end of 2022, the Fed will raise rates "by at least 125 bps". Most analysts (98%) are convinced that the central bank will raise the rate by 75 bps in November, up to 3.75-4% per annum. Recall that such an increase in rates could be the sixth in a row. Earlier, after three meetings of the Fed, it was raised by an additional 75 bps. At the same time, many investors are confident that core inflation will soon fall, and the Fed will soften its rhetoric a bit. However, this is unlikely, experts say. Against this background, the US currency is stabilizing, reacting to a short-term surge in risk sentiment, recorded at the end of the week. At the same time, large hedge funds still bet on the further growth of the USD. Geopolitical turmoil and fears of an economic downturn have further strengthened the greenback, prompting investors to abandon European assets. Many of them still consider the dollar the safest asset to protect their savings. According to analysts at Citigroup Global Markets Inc, the US currency will continue to strengthen until the global economic slowdown stops. If its growth accelerates, the dollar will give up its positions, experts are certain. However, now this is far away, and the benefits of owning USD outweigh the current risks, Citigroup notes.   Relevance up to 09:00 2022-10-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324316
German labour market starts the year off strongly

The German Economy Expects A Recession That Will Start This Quarter (Q4)

TeleTrade Comments TeleTrade Comments 14.10.2022 12:00
Germany’s Economy Ministry said in a statement on Friday that the “government expects recession spanning three quarters in a row, starting in Q3 2022.” “Economic indicators suggest the German economy is facing a difficult winter,” the Ministry added. Market reaction EUR/USD is extending losses below 0.9750, in the face of the renewed US dollar strengh and jittery market environment. The spot is down 0.23% on the day. The US Retail Sales and Consumer Sentiment data are awaited for fresh trading opportunities in the main currency pair.
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

The Australian Dollar To US Dollar (AUD/USD) Pair Remains On Track To Register Losses

InstaForex Analysis InstaForex Analysis 14.10.2022 12:24
AUD/USD struggles to preserve its modest intraday gains amid a pickup in the USD demand. A turnaround in the risk sentiment, aggressive Fed rate hike bets boost the safe-haven buck. Traders now look forward to US macroeconomic releases for some meaningful opportunities. The AUD/USD pair attracts fresh sellers in the vicinity of mid-0.6300s on Friday and surrenders its modest intraday gains to a four-day high. The pair slips below the 0.6300 mark during the first half of the European session and is now flirting with the daily low amid the emergence of some US dollar dip-buying. The latest optimistic move in the equity markets witnessed since the US session on Thursday fizzles out rather quickly amid worries about a deeper global economic downturn. The anti-risk flow helps revive demand for the safe-haven greenback and exerts some downward pressure on the AUD/USD pair. Apart from this, the prospects for a more aggressive policy tightening by the Fed favour the USD bulls. The US Bureau of Labor Statistics reported that the core inflation (excluding food and energy prices) registered the biggest gain since August 1982. The hotter CPI report reinforces bets for the fourth consecutive 75bps Fed rate hike in November. This, along with the potential economic fallout from fresh COVID-related lockdowns in China, validates the near-term negative outlook for the AUD/USD pair. That said, technical indicators on short-term charts are hovering around the oversold territory and warrant some caution for bearish traders. Nevertheless, the AUD/USD pair remains on track to register losses for the fifth successive week. Market participants now look forward to the release of the US monthly Retail Sales figures, due later during the early North American session, for a fresh impetus. Friday's US economic docket also highlights the Prelim Michigan Consumer Sentiment and Inflation Expectations Index. This, along with the US bond yields and speeches by influential FOMC members, will drive the USD demand and provide a fresh impetus to the AUD/USD pair. Traders will further take cues from the broader market risk sentiment to grab short-term opportunities on the last day of the week.
Caixin Services PMI Data Has Helped The Chinese Yuan (CNH)

Is Another Intervention Of The Japanese Ministry Of Finance Coming?

Kenny Fisher Kenny Fisher 14.10.2022 12:42
USD/JPY continues to move edge higher and is up 1.6% this week. In the European session, USD/JPY is trading at 147.67, up 0.25%. The Japanese yen is once again on a downswing, after hugging the key 145 line. The dramatic intervention by Japan’s Ministry of Finance (MoF) in September stemmed the yen’s bleeding, but this move by Tokyo appears to have had a very short shelf-life, as the yen fall to new 24-year lows. Intervention anyone? The burning question is with the yen currently lower than when the MOF stepped in, will it again intervene to prop up the Japanese currency? The first intervention clearly didn’t achieve its desired effect of stabilizing the yen below 145 and Japan’s foreign reserves fell by a record amount in September, around 2.8 trillion yen. The game of cat-and-mouse between the MOF and speculators betting against the yen continues, and another currency intervention could be in the works, but it would likely have to be much larger than the first intervention. The MOF could try to send a stronger warning to the markets, but it’s questionable whether unilateral action by Japan will be enough to change the yen’s downtrend. The Bank of Japan has no intention of capping JGB yields and with the Fed likely to deliver another oversize rate hike in November, the US/Japan rate differential will continue to widen and likely weigh on the Japanese yen. The US posted another hot inflation report for September. Headline inflation ticked lower to 8.2%, down from 8.3% but above the consensus of 8.1%. Core inflation rose to 6.6%, up from 6.3% and higher than the forecast of 6.5%. Inflation clearly is yet to peak despite monetary policy becoming restrictive, and the inflation data cements expectations for a 75 basis point hike at the November meeting. . USD/JPY Technical USD/JPY is testing resistance at 147.50. Above, there is resistance at 148.32 There is support at 147.50 and 146.04 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

The US Inflation Data Suggest Another Rate Hike | The Euro (EUR) And The British Pound (GBP) Have Regained Their Positions

InstaForex Analysis InstaForex Analysis 14.10.2022 13:38
Although the Federal Reserve is sure to extend its aggressive interest rate hike even longer than expected, the European currency and the British pound have regained their positions against the US dollar after yesterday's inflation report in the US. It overshadowed hopes for a rate cut by the end of next year. Initially, investors reacted to higher-than-expected consumer price levels by buying the US dollar. It emphasized that the Fed would raise rates by 75 basis points at its meeting next month, but then the pressure on risky assets decreased sharply. Nevertheless, futures prices show that the markets expect interest rates to be around 5% next year, which increases the pressure on the Fed even more. Despite the risk of a recession and a sharp spike in unemployment, the Federal Reserve System will continue to act aggressively. The measures it has taken since the spring of this year have not yet brought the desired result – the maximum that has been achieved is a slowdown in inflation growth around a 40-year high. According to a report by the Ministry of Labor published on Thursday, base prices, excluding food and electricity, rose in September by 6.6% compared to last year, which is the highest level since 1982. This continues to cause concern among politicians, as the index also accelerated in August. Yesterday's report also means that the regulator will raise rates by three-quarters of a percentage point at the last two meetings of this year. Several Fed officials have recently pointed to the August spike in core inflation as a sign of alarming rigidity, even among less volatile price categories. Nevertheless, even the most hawkish officials opposed the idea of raising rates by a whole percentage point or more at one meeting. It would be more difficult for the Fed to track the effects of its policy tightening on the economy, increasing the risk of triggering a more serious recession. "Observing how the economy reacts allows us to measure the dosage of future policy changes somewhat while simultaneously continuing to move aggressively," said Neel Kashkari, president of the Federal Reserve of Minneapolis. "If we just raised rates by 2%, 3%, or 4% at a time, it may well be that it would be too much, which would eventually lead to a financial crisis." As noted above, the Fed has been raising rates from zero since March of this year, and now the federal funds rate is at 3.25% – the highest level since 2008. As a result of the slowdown in inflation, albeit not as strong as economists predicted, demand for risky assets has returned, which leaves the same euro buyers to return to parity. EUR/USD As for the technical picture of EURUSD, the bears retreated a little, and the bulls reached the resistance of 0.9800. Before the important data on retail sales in the US, the upward correction of the pair may continue. To continue the growth, it is necessary to break above 0.9800, which will take the trading instrument to the areas of 0.9840 and 0.9880. However, the upward prospects will depend entirely on the US data. A break of 0.9755 will put pressure on the trading instrument and push the euro to a minimum of 0.9713, which will only worsen the situation of buyers of risky assets in the market. Having missed 0.9713, it will be possible to wait for the update of the lows in the area of 0.9680 and 0.9640. GBP/USD The pound continues to recover, but its further direction has not yet been determined. Buyers will focus on protecting the support of 1.1260 and the resistance of 1.1350, limiting the upward potential of the pair. Only a breakthrough of 1.1350 will open prospects for recovery to the area of 1.1420, after which it will be possible to talk about a sharper jerk of the pound up to the area of 1.1480 – the maximum of this month. It is possible to talk about the return of pressure on the trading instrument after the bears take control of 1.1260, which can happen quite quickly in the case of strong US statistics. This will blow the bulls' positions and completely negate the prospects of the bull market observed since September 28. A breakout of 1.1260 will push GBPUSD back to 1.1180 and 1.1100.   Relevance up to 09:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324322
Bank of England survey highlights easing price pressures

The Bank Of England (BoE) Will End The Emergency Credit Line

InstaForex Analysis InstaForex Analysis 14.10.2022 13:55
All the attention today is on the British pound, which could repeat the path of the end of September this year, when daily drops were 400-500 points. Yes, such a gloomy scenario is no longer worth counting on, but the chances of another collapse of the national currency of Great Britain are great again. No comment Yesterday, Andrew Bailey arrived at a meeting in Washington after the British government was refused a further extension of the emergency bond purchase program conducted by the Bank of England to save the financial market. When asked by reporters whether the government's rejection of plans for a large-scale tax cut package would end the turmoil in the UK financial markets, the governor of the Bank of England declined to comment but smiled broadly. However, the fact that the Chancellor of the Exchequer, Kwasi Kwarteng, has returned to London indicates that the Bank of England no longer intends to make concessions to the Ministry of Finance. Many experts said they did not remember the last time the British Chancellor left an early meeting of the International Monetary Fund. This again confirms the complexity of the situation in which Kvarteng is currently drawing up the annual budget. Complete an emergency credit The 63-year-old governor of the Bank of England, Andrew Bailey, said that the regulator would complete an emergency credit line for 65 billion pounds as predicted this Friday. Traders expected its extension and expect it to continue since there is no serious closure of short positions in the British pound yet. The British Finance Minister warned that if Bailey does not help the government, it will be on his conscience since the financial markets will be paralyzed again next week. Many analysts also predicted that Bailey would be forced to change course, which, as a result, would deal a serious blow to his credibility. Criticism of the Kvarteng plan Despite Kwarteng's bravado, officials formed a protective barrier around Bailey at the IMF meeting, squarely placing the blame for the market turmoil on the Chancellor and British Prime Minister Liz Truss. IMF Managing Director Kristalina Georgieva praised the Bank of England's support for bond purchases, saying that the actions were appropriate and timely, eliminating the risk to financial stability. She also stressed the need for coherence in the new policy, veiling criticism of the Kvarteng plan for tax cuts of 45 billion pounds, which was announced three weeks ago and the government abandoned. GBP/USD Against this background, the pound continues to recover, but its further direction has not yet been determined. Buyers will focus on protecting the 1.1260 support and the 1.1350 resistance, which limits the upward potential of the pair. Only a breakthrough of 1.1350 will open prospects for recovery to the area of 1.1420, after which it will be possible to talk about a sharper jerk of the pound up to the area of 1.1480 – the maximum of this month. It is possible to talk about the return of pressure on the trading instrument after the bears take control of 1.1260, which can happen quite quickly in the case of strong statistics in the United States. This will blow the bulls' positions and completely negate the prospects of the bull market observed since September 28. A breakout of 1.1260 will push GBPUSD back to 1.1180 and 1.1100. EUR/USD As for the technical picture of EURUSD, the bears retreated a little, and the bulls reached the resistance of 0.9800. Before the important data on retail sales in the US, the upward correction of the pair may continue. To continue the growth, it is necessary to break above 0.9800, which will take the trading instrument to 0.9840 and 0.9880. However, the upward prospects will depend entirely on the US data. A break of 0.9755 will put pressure on the trading instrument and push the euro to a minimum of 0.9713, which will only worsen the situation of buyers of risky assets in the market. Having missed 0.9713, it will be possible to wait for the update of the lows in the area of 0.9680 and 0.9640.     Relevance up to 09:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324312
Mexico’s Central Bank Surprised Markets With A 50bps Rate Hike Once Again

Mexico Is A Big Beast In EM Indices | Chile’s Currency (CLP) Remains In The Thick Of Financial Market Pressure

ING Economics ING Economics 15.10.2022 08:07
USD/BRL Current spot: 5.1999 • Brazilian assets enjoyed strong gains on the first round election results. Incumbent Bolsonaro did better than expected at 43%, while challenger Lula received 48% support. The run-off is held on 30 October. The better than expected showing of the right in the elections – and particularly the strong showing of the right in Congress – means that either Lula will be dragged to the centre or Bolsonaro can continue his free-market policies. • There is still the risk, however, of a narrow Lula win on 30 October and contested election results – a big BRL negative. • A tough external environment, both from higher US rates and lower China/US growths keeps us bearish on the real. USD/MXN Current spot: 19.98 • Though it is not official policy, Banxico is doing an exceptionally good job of keeping USD/MXN stable near 20.00. It does this by matching the Fed hike-for-hike. The policy rate is now 9.25% in Mexico and is expected to be hiked another 125bp over the next six months – matching Fed expectations. • Arguably the peso should perform better than many in EM given its exposure to the strong US economy and relatively low debt to GDP ratio (near 50%) as AMLO espoused new debt during 20/21. • However, Mexico is a big beast in EM indices. A tough time for EM as the Fed raises rates into a recession could easily see MXN come under pressure over the next three to six months. USD/CLP Current spot: 938.33 • Chile’s currency remains in the thick of financial market pressure as ill-winds blow from the international environment. Chile’s large current account deficit leaves the peso vulnerable and investors can see that central bank FX reserves have dropped 25% from late last year as it tries to support the peso. Tapping the IMF’s $18bn Flexible Credit Line (FCL) to support the CLP would be a new low point – FCL’s are precautionary and never meant to be used. • In response, the central bank is hiking aggressively, with the policy rate now 10.75%. It may have to hike more. • Weak China and US growth over the next six months and our call for ongoing dollar strength, suggests USD/CLP retests 1000. This article is a part of a report by ING Economics available here. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Navigating Financial Markets: Insights on Central Bank Decisions and Currency Quotes

The Kazakhstan Tenge Traded Slightly Stronger | Lira (TRY) Is Under Pressure

ING Economics ING Economics 15.10.2022 08:03
USD/RUB Current spot: 62.17 • USD/RUB ended September precisely at our 60.0 target after a volatile month: mobilisation-driven demand for FX mid-month was followed by a corporate FX sell-off on high tax payments and fears of new sanctions against the financial system, including the National Clearing Center. That scenario has not materialised yet. • October may also prove volatile, as higher oil prices post the OPEC+ meeting, Gazprom’s extra tax and dividends should create a push for a stronger rouble, while geopolitical escalation may steer it in the other direction. • Our longer-term view on RUB depreciation remains unchanged due to the EU oil embargo, recovery in imports and likely resumption of foreign asset accumulation by Russia, including MinFin. USD/UAH Current spot: 36.93 • Russian mobilisation suggests no end to the war anytime soon, despite Ukrainian military successes. As such, the National Bank of Ukraine will remain forced to defend the hryvnia, largely relying on international aid to shore up its FX reserves (as the trade balance remains in deep deficit). If the war escalates, the risk of renewed UAH depreciation remains high. • Uncertainty over the long-term prospects of the hryvnia remains very high. The Russian aggression will most likely continue in 2023, as freshly mobilised troops arrive in bulk. Moreover, the NBU may be more prone to directly supporting the government, after the Governor Kyrylo Shevchenko resigned. USD/KZT Current spot: 474.56 • The Kazakhstan tenge traded slightly stronger than our USD/KZT 480 target despite lower oil prices, suggesting a recovery in physical exports in September. FX spot trading volume was thin, with exporters’ FX repatriation and sovereign fund’s FX sales for state spending jointly accounting for 32% of it vs. 20% in August. • The recent OPEC+ deal appears supportive for oil prices without any negative effect on Kazakhstan’s exports. Private capital flows should remain KZT-neutral to positive as long as President Tokaev’s re-election on 20 November is perceived as likely. • The tenge’s longer-term bias remains bearish till 1-2Q23 amid global USD strength. Also, recent comments from the sovereign wealth fund suggest that FX sales from the fund may be reversed until year-end and may shift to FX asset accumulation next year. USD/TRY Current spot: 18.58 • The policy mix has tilted to a more supportive stance lately given i) another Credit Guarantee Fund package (reportedly at least TRY50bn) which could reverse the recent loss in momentum in lending, though the timing is not specified yet ii) signs of a more expansionary stance on the fiscal side in the medium term plan compared to the previous one iii) 200bp of rate cuts by the Central Bank of Turkey with an emphasis on the importance of keeping financial conditions supportive. • However, given tighter regulations on the asset side that selectively limit loan growth, cuts are not easing the financial conditions as fast currently. • TRY is likely remain under pressure in the near term due to elevated inflation and pressure on the external balance amid the unsupportive global backdrop etc. A recovery in FX reserves will be more challenging in this environment. USD/ZAR Current spot: 18.14 • USD/ZAR recently rose above 18.00 as US yields and the dollar punched to the highs of the year. We are not looking for a top in the dollar until 1Q/2Q next year, meaning that USD/ZAR still risks pushing up to 18.50 and possibly 19.00. The rand is a high beta on Chinese growth and EM prospects in general – neither of which look compelling this year. • South Africa’s current account has moved a little deeper into deficit, earlier than expected (1.3% of GDP in 2Q) and the central bank will likely have to keep hiking (now 6.25%) to stabilise the rand. • Political event risk exists at the December ANC conference. President Ramaphosa is under pressure, but alternatives are few. USD/ILS Current spot: 3.5626 • The move of USD/ILS to 3.60 has surprised us – but should be quickly reversed. Israel stills enjoys a sizable current account surplus in excess of $4bn per quarter and has a central bank hiking in 75bp increments in the face of full employment and GDP growth expected at 6% this year and 3% next year. The market expects the Bank of Israel to continue hiking to the 3.75% area – another 100bp. • The main risk to the shekel is the investment environment, where high US rates are damaging the tech sector and FDI into Israel. These conditions may persist into early 2023. • We are big fans of the shekel and see it capped in the 3.50/3.60 area – and the BoI may struggle to keep it over 3.00 next year. This article is a part of a report by ING Economics available here. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Asia Morning Bites: Inflation Data in Focus, FOMC, ECB, and BoJ Meetings Ahead

The National Bank Of Poland Stuck To Its Promise Of A Pause In Rate Hikes | The Czech National Bank Left Rates Unchanged

ING Economics ING Economics 15.10.2022 08:02
EUR/PLN Current spot: 4.8688 • Poland’s zloty remains at risk of further depreciation. Global sentiment is negative for the CEE region and the National Bank of Poland stuck to its promise of a pause in rate hikes this month. Still, positioning against PLN is already significant (shown by the high costs of FX swaps) and should offer some scope for recovery when external factors improve. However, EUR/PLN is likely to stay above 4.80 in 4Q22 regardless. • Prospects for 2023 may be largely dependent on Poland retaining access to the larger pool of EU funds. Some warn of new EU tensions ahead of general elections in 2023. The Ministry of Finance’s strategy of converting EU funds via the market should provide PLN support (less so than Czech National Bank FX intervention) even as the current account remains in deficit. EUR/HUF Current spot: 426.59 • A new round of energy woes and related fears of external financing issues have arisen. These concerns have met with fiscal uncertainty and the sudden end of the rate hike cycle, providing reasons for investors to ignite a sell-off in the forint. • Hungary’s deferral of payments to Gazprom can ease pressure on the current account and break the link between energy spikes and HUF weakness. The central bank’s effort to dry up forint liquidity will bear fruit. We see EUR/HUF back to sub-410 levels. • We maintain our optimism relating to an EU deal being sealed before year-end, giving the forint a boost to 400 vs the euro. Looking into 2023, we expect HUF appreciation on reduced country-specific risks, fading inflation and recurring growth. EUR/CZK Current spot: 24.52 • As expected, the Czech National Bank left rates unchanged at the September meeting and confirmed the end of its hiking cycle. We think the chances of another rate hike are slightly higher than in August given the central bank's focus on rising wages. However, this is far from our baseline scenario of stable rates. • Of more interest is the recent increase in FX intervention costs. If the pace of intervention and market pressure persist during the November and December meetings, we can expect the CNB to be pushed to rethink its approach at the end of the year. • For now, however, our baseline remains unchanged, implying a stable koruna near 24.60 EUR/CZK until 1Q23. EUR/RON Current spot: 4.9400 • After seasonal inflows (largely bond-related) ended in early September, the EUR/RON returned to its previous 4.95 level with virtually no intermediary resistance levels. • There has been a hawkish twist from the National Bank of Romania which recently increased the key rate by 75bp while other CEE3 central banks have stopped hiking. This will likely support the currency even better in the short term. • We believe that the global selling pressure on the CEE region is steadily making it more and more expensive for the NBR to keep the currency stable. While we do not see any short-term threat to EUR/RON, it is understandable that stability cannot last forever. EUR/RSD Current spot: 117.34 • In line with our view, the National Bank of Serbia continued to hike in October as the key rate reached 4.00%. We maintain our terminal key rate estimate at 4.50% • In an opinion piece published on the NBS website, Governor Jorgovana Tabakovic did not shy away from expressing strong views about FX, e.g., “…for as long as I am Governor – the relative stability of the exchange rate will have no alternative” or (our preferred one) “In an environment where we cannot forecast the weather with certainty by looking at weather radars, stability of the FX market is still certain!”. • We maintain our year-end EUR/RSD forecast at 117.30 for both 2022 and 2023. This article is a part of a report by ING Economics available here. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Technical Outlook Of The EUR/JPY Pair Movement In Short Term

The Situation Of The EUR/JPY Pair Is Quite Good | The Danmarks Nationalbank (DN) Will Follow The European Central Bank (ECB)

ING Economics ING Economics 15.10.2022 08:01
EUR/JPY Current spot: 141.16 • EUR/JPY has been holding up quite well despite the global bear market in risk assets. Our bias would be that EUR/JPY struggles to sustain a break above 145 in an environment where central banks are actively looking to slow aggregate demand. • For the European Central Bank, we are looking for a 75bp hike in October, perhaps 50bp in December and another 25bp in 1Q23. The ECB will also have to think about quantitative tightening in its Asset Purchase Programme portfolio, which may create problems for the eurozone’s peripheral bond markets. • Typically, the Japanese have been more interventionist than the eurozone and on that basis – and given the forthcoming eurozone recession - EUR/JPY risks look skewed lower the next six months. EUR/GBP Current spot: 0.8763 • Sterling has been driven by the fiscal credibility story. And it is interesting to note that the 10-year Gilt-Bund spread is struggling to narrow inside 200bp again – suggesting credibility is hard won and easily lost. • The Chancellor’s U-turn on the upper income tax bracket does little to assuage fiscal concerns. It only saves around £2bn compared to what could be £200bn of Gilt supply in FY23/24. Instead, the Chancellor will somehow need to find spending cuts or more likely tax increases – U-turn on energy windfall tax? • Clearly this is a challenging picture and combined with a difficult global environment, sterling risks remain skewed lower. EUR/NOK Current spot: 10.35 • Norway’s krone has dropped by more than 6% this past month, with its low-liquidity character leaving it highly exposed to the rocky risk environment. • A decisive turn in the krone will need to wait for a recovery in risk assets, which may only occur in the new year. The OPEC+ output cuts may suggest a slightly better outlook for oil currencies (in the crosses) into year-end, but not enough to trigger a NOK recovery at this stage. • Norges Bank should stick to the rate hikes it signalled at its latest meeting: 50bp in November, 25bp in December. There is some room for a hawkish surprise, but FX implications are small. EUR/SEK Current spot: 10.95 • Riksbank Governor Stefan Ingves recently said the Bank must keep a comfortable distance to the ECB with rate hikes, not least because the Bank is explicitly seeking a stronger krona. • In practice, rate hikes may still prove largely ineffective to strengthen the krona given the challenging risk environment. Slowing the pace of FX reserve-related SEK selling could actually do more to help SEK, but the central bank has signalled reluctance here. • There is an elevated risk that EUR/SEK breaks above 11.00 before the end of the year as the energy crisis deepens and risk assets remain pressured. We look for a gradual 2023 recovery in SEK, but the timing remains highly uncertain. EUR/DKK Current spot: 7.4383 • For the first time in 2022, Danmarks Nationalbank jumped back into the currency market, selling DKK 23bn to weaken Denmark’s krone in September. This is half the size of the last FX intervention (47bn in December 2021). • For now, it looks like DN will stick to replicating the size of ECB rate increases and intervening to support EUR/DKK. However, we expect more EUR weakness into the winter and this may start to cast doubt over the sustainability of FX intervention. • We still see a non-negligible risk that DN hikes rates by less than the ECB (10bp would be a start) in one of the coming meetings. This risk is likely higher if the ECB sticks to large hikes. This article is a part of a report by ING Economics available here. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ECB press conference brings more fog than clarity

The Eurozone Is Expected To Record Negative Growth | The Hawkish Fed Will Increase Pressure In The System

ING Economics ING Economics 15.10.2022 08:00
Strong dollar pressure tests the system One of the most important market developments over the last month has been the Bank of England intervening in the UK Gilt market on grounds of financial stability. That Gilts and sterling had to fall so far on UK fiscal concerns owed in part to the restrictive Federal Reserve conditions and the strong dollar. The hawkish Fed will increase pressure in the system still further into year-end – a move that will undoubtedly punish any poor policy choices. The Fed’s relentless and most aggressive tightening cycle since the early 1980s is starting to create a few casualties. Though the wounds in UK asset markets were selfinflicted, the occasion did show that the tighter liquidity conditions being created by the Fed are leaving no margin for error. There are still few signs of any ‘pivot’ in Fed policy coming through this year and we do not see that until 1Q23 at the earliest. As the Fed tightens into a recession and yield curves invert further, expect the dollar to stay bid. We could easily see further gains of 5-7% across the board. With the eurozone likely entering three quarters of negative growth, dollar strength can probably see EUR/USD building a new 0.90-0.95 trading range. Again, we would say the euro is not especially undervalued – having been damaged by the negative terms of trade adjustment. In Europe, heightened scrutiny on policy choices can see GBP/USD nearing parity later this year. The high beta Scandinavian currencies also look vulnerable as do some of those in Central and Eastern Europe (including the Polish zloty) where hiking cycles have been curtailed. In Asia, we think USD/CNY can rally further to 7.40, taking most of the region with it. And the commodity-centric Latam currencies also remain vulnerable as investors shun Emerging Market asset markets. EUR/USD Current spot: 0.9705 • EUR/USD realised volatility is now back to levels last seen in the early days of the pandemic. Tighter liquidity conditions as central banks raise rates and sell bonds typically do see volatility levels increase. This should be the story for this autumn. • Is the dollar about to top? From a risk management perspective, we would say ‘no’. The Fed looks set to push ahead with tightening into a recession (rates peaking 4.25-4.50% early next year), which should keep the dollar broadly bid. • The eurozone is just entering three consecutive quarters of negative growth. As a pro-cyclical currency, this is not the time for the euro to shine. We see a 0.90-0.95 trading range developing. USD/JPY Current spot: 145.44 • In late September, Tokyo confirmed that it had intervened to sell USD/JPY (seemingly from the 145.70 area). The amounts were a large $20bn and show that Tokyo means business. Importantly, the US Treasury said it ‘understood’ the need for intervention. Does the G20 FX Communique get altered on 12 October? • We doubt the Bank of Japan’s FX intervention will define the exact top for USD/JPY. The macro factors driving the rally – hawkish Fed/energy crisis are still with us. And we see intervention as more of a campaign that might slow a move towards 150. • Talk of a Plaza accord to reverse the dollar look premature, too. The BoJ will need to hike to support this – unlikely before 2Q23. This article is a part of a report by ING Economics available here. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

Price Of The Euro To US Dollar Pair (EUR/USD) Is Near Its 20-Year Low

InstaForex Analysis InstaForex Analysis 16.10.2022 09:33
Long-term perspective. The EUR/USD currency pair has lost about 30 points during the current week. Thus, after an unsuccessful attempt to overcome the critical line, the price remains lower and near its 20-year low. We have already said that strong trends usually end with a sharp departure in the opposite direction. What do we see in the euro currency now? It continues to trade in the same area as it has been doing lately. Thus, from a technical point of view, there is no reason to expect the end of the long-term global trend yet. There were practically no really important fundamental events this week. The only things we can note are several speeches by representatives of the ECB and the Fed, who assured the markets that they would continue to aggressively raise key rates. However, the European currency has not been helped by the ECB's two past rate hikes, so all subsequent ones may also not provide any support. The Fed's monetary policy is still a priority for traders, and at least 2-3 more rate hikes are expected in the US. And taking into account the latest inflation report, which showed only a minimal slowdown in September, we believe that the issue with the fourth consecutive increase of 0.75% has been resolved. This is again very good news for the dollar. Paired with geopolitics, which continues to escalate, the dollar still enjoys much more confidence than the euro or the pound. The same applies to the American economy and American treasuries. Who will buy European bonds when the entire bloc is a couple of hundred kilometers from the war zone? Who will buy European bonds if Europe is on the verge of an energy crisis? Of course, no one in the European Union will freeze this winter, but it will be necessary to save gas and energy very much, which can negatively affect industrial production, for example. COT analysis. COT reports on the euro currency in 2022 can be entered in the textbook as an example. For half of the year, they showed a frank "bullish" mood of professional players, but at the same time, the European currency was steadily falling. Then, for several months, they showed a "bearish" mood, and the euro currency also steadily fell. Now the net position of non-profit traders is bullish again, and the euro continues to fall. This is happening, as we have already said, because the demand for the US dollar remains very high against the backdrop of a difficult geopolitical situation in the world. Therefore, even if the demand for the euro currency is growing, the high demand for the dollar does not allow the euro currency itself to grow. During the reporting week, the number of buy-contracts from the non-commercial group decreased by 3.2 thousand, and the number of shorts increased by 2.9 thousand. Accordingly, the net position decreased by about 6.1 thousand contracts. This fact does not matter much since the euro remains "at the bottom" anyway. Professional traders still prefer the euro to the dollar at this time. The number of buy contracts is 38 thousand higher than the number of sell contracts for non-commercial traders, but the European currency cannot extract any dividends from this. Thus, the net position of the "non-commercial" group can continue to grow further, but it does not change anything. Even if you pay attention to the total number of buy and sell positions, their values are approximately the same, but the euro still falls. Thus, we need to wait for changes in the geopolitical and/or fundamental background for something to change in the foreign exchange market. Analysis of fundamental events. Nothing was interesting in the European Union this week except a report on industrial production and several speeches by Christine Lagarde. Lagarde said that the rate will continue to rise, as inflation remains at a high value and there is no other way. At the expense of the energy crisis, the panic subsides a little, since the European Union has managed to fill its storage by 90% or more. However, many experts say that maximum occupancy does not mean that there will be enough gas for the whole winter. Therefore, EU politicians are currently engaged in negotiations with other countries of the world on gas supplies. We will find out what comes out of this in the near future. In addition, we note that the official version of who is behind the explosions on the Nord Stream has not been presented. All parties to the conflict continue to blame each other for what happened. Moscow is ready to send gas to Europe via the surviving branch of the Nord Stream-2, but this pipeline is not certified, and Germany said that it would never be launched. Trading plan for the week of October 17 – 21: 1) During the 24-hour timeframe, the pair resumed their movement to the south. Almost all factors still speak in favor of the long-term growth of the US dollar. The price is located below the Ichimoku cloud and the critical line, so purchases are not relevant at this time. To do this, you need to wait at least for consolidation above the Senkou Span B line and only then consider long positions. 2) As for the sales of the euro/dollar pair, they are still more relevant now. The price is again below the critical line, so we expect a resumption of the fall with a target below the level of 0.9582 (161.8% Fibonacci). In the future, if the fundamental background for the euro currency does not improve, and geopolitics continues to deteriorate, the euro currency may fall even lower. Explanations of the illustrations: Price levels of support and resistance (resistance/support), Fibonacci levels – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators(standard settings), Bollinger Bands(standard settings), MACD(5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "Non-commercial" group.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324397
Analysis And Trips For Trading The GBP/USD Pair In Short And Long Positions

The Cable Market (GBP/USD) Is Already Located Above The Critical Line

InstaForex Analysis InstaForex Analysis 16.10.2022 09:39
Long-term perspective. The GBP/USD currency pair showed an increase of 100 points during the current week, but it still ended two days out of five in a serious minus. A few weeks ago, the price was fixed above the critical line, and this week – first lower, and then higher again. As a result, it continues to be located just above Kijun-sen, which preserves certain chances for a new upward trend. However, at the same time, after the turn of the upward movement by 1100 points, which happened immediately after the next drop of 1000 points, the pound did not show anything special. Recall that the last "flights" of the pound were associated with the tax initiatives of Liz Truss and Kwasi Kwarteng, the latter of whom has already been dismissed. Clouds are also "gathering" over Liz Truss herself. She is accused of a large-scale depreciation of the British currency as well as a sharp drop in demand for Treasury bonds. Some of the tax initiatives have already been removed from the current "plan", but the market is still in a state of shock. The Bank of England has tried to stabilize the debt market, but we cannot say that it has succeeded well. Thus, the fundamental background for the British pound is now expressed not only by the process of tightening the Fed's monetary policy (traders still pay much less attention to the Bank of England) but also by problems with the financial market in the UK and another political crisis, which may end with a vote of no confidence. Therefore, the pound might be happy to grow, but most factors, including geopolitics, remain on the side of the US dollar. On Thursday, the US inflation report also had a bombshell effect on the market. The US dollar first rose sharply, then fell heavily, and on Friday it rose again. Traders have been working out a slowdown in inflation by 0.1% in annual terms for more than a day. And the 0.1% decline itself means that the Fed is simply obliged to raise the rate very aggressively because inflation has already shown that it will not slow down without support in the form of tightening monetary policy. COT analysis. The latest COT report on the British pound showed a new weakening of the "bearish" mood. During the week, the non-commercial group opened 6,900 buy contracts and closed 3,400 sell contracts. Thus, the net position of non-commercial traders increased by 10.3 thousand, which is quite a lot for the pound. It could be assumed that the actions of major players and the movement of the pound have finally begun to coincide since the pound has grown over the last period of net position growth. However, we are worried that this may once again be a "false alarm." The net position indicator has been growing slightly in recent weeks, but this is not the first time it has been growing, the mood of major players remains "pronounced bearish," and the pound sterling continues to fall in the medium term. And, if we recall the situation with the euro, there are serious doubts that, based on COT reports, we can expect the pair to grow significantly. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 88 thousand sales contracts and 49 thousand purchase contracts. The difference, as we can see, is still very big. The euro cannot show growth in the "bullish" mood of major players, and the pound will suddenly be able to grow in a "bearish" mood. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of fundamental events. During the current week, quite a lot of different statistical information has been published in the UK, but at the same time, we cannot conclude that it somehow helped the pound. The unemployment rate dropped to 3.5%, which is good, but at the same time, GDP fell by 0.3% in August, and industrial production lost 1.8%. Well, at the end of the week it became known about the dismissal of British Finance Minister Kwasi Kwarteng, who had spent a little more than a month in his position. Thus, Britain continues to be in a fever, and we believe that the overall fundamental background remains negative for the pound. The American statistics were not much better this week. Retail sales showed zero growth in September, and the consumer sentiment index from the University of Michigan rose slightly. Inflation has decreased by only 0.1%, but this factor just works in favor of the US currency. Trading plan for the week of October 17–21: 1) The pound/dollar pair as a whole maintains a long-term downward trend but is already located above the critical line. Therefore, small purchases can now be considered as long as the pair is located above the Kijun-sen. The target is the Senkou Span B line, which runs at 1.1843. There are some reasons for the pair's growth, but there are still a lot of reasons for a new fall. Be careful with your purchases. 2) The pound sterling has made a significant step forward but remains in a position where it is quite difficult to wait for strong growth. If the price fixes back below the Kijun-sen line, then the pair's fall can quickly and cheerfully resume with targets in the area of 1.0632–1.0357. Explanations of the illustrations: Price levels of support and resistance (resistance/support), Fibonacci levels – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators(standard settings), Bollinger Bands(standard settings), MACD(5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "Non-commercial" group.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324399
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The Eurozone Economy Looks Worse Than The American One

InstaForex Analysis InstaForex Analysis 16.10.2022 09:43
Trading in the financial markets in the second half of the year is pure pleasure. The stock indices of the US and EURUSD step on the same rake with enviable frequency, counting on a dovish reversal where it does not even exist. Even the acceleration of US core inflation to 6.6% in September, the highest mark in 40 years, was seen as a command to euro fans. Where, where are you heading, fools? When the probability of a 75 bps hike in the federal funds rate in December jumps from 35% to 65%, and its ceiling rises from 4.5% to 5%, selling the US dollar is absolutely the wrong strategy. The US currency is enjoying well-deserved popularity in 2022 due to the aggressive tightening of the Federal Reserve's monetary policy and high demand for safe-haven assets due to recurrent stresses. Why get rid of it if the rate of monetary restriction is increasing, and there is no end in sight to the problems? The same crisis in the British debt market that has swept through global bonds in waves is far from over. Bond yield dynamics The government of British Prime Minister Liz Truss decided to turn it into a farce. They say that it is not the mini-budget that is to blame for the shocks, but the Bank of England, which raised rates more slowly than the Fed. In fact, as European Central Bank President Christine Lagarde says, during a period of monetary policy normalization, care must be taken to shift the focus of fiscal policy towards measures that keep debt sustainable. And what about Germany, which has announced a €200 billion stimulus package to support households hit by the energy crisis? A new fire could break out in the eurozone debt markets. So it turns out that problems arise in the eurozone, and investors flee from them to America. This leads to the strengthening of the US dollar no less than the monetary policy of the Fed. Which, by the way, does not think to slow down. What did the financial markets come up with amid the acceleration of US inflation, but their next campaign against the Fed will most likely end in another fiasco. Of course, EURUSD's paradoxical rise in response to strong core inflation figures can be blamed on the "buy the dollar on the rumor, sell on the facts" principle, but smart people don't do that. They prefer to wait until the bears throw away the ballast, unsure of the continuation of the downward trend of traders, and then move down again. In the end, nothing has changed. The eurozone economy looks worse than the American one, the Fed is already wrapping up the balance sheet, while the ECB is going to start doing this only in 2023, the armed conflict in Ukraine is not over, and there is no end in sight to the energy crisis. Technically, on the EURUSD daily chart, the bulls are trying to start a correction. Their failure to do so will result in the pair closing below the moving average near 0.978. If this happens, the euro will need to be sold on a break of the fair value of 0.97.   Relevance up to 15:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324375
The GBP/USD Pair May Trade Horizontally Today

The Cable Market (GBP/USD): There Is A Probability Of The End Of A Long–Term Downward Trend

InstaForex Analysis InstaForex Analysis 17.10.2022 08:00
The GBP/USD currency pair was trading down again on Friday, ending the week near the moving average. Now it seems that the entire movement of the pair after its growth by 1100 points is just a calming of the market because we see how each subsequent turn of the movement is smaller than the previous one. Most likely, the price will "settle down" around 1.1100, after which the market will need new grounds for certain movements. Recall that, from a technical point of view, there is a probability of the end of a long–term downward trend since there was a sharp drop in quotes to absolute lows and then a sharp increase. Such "injections" often end strong trends. However, nothing has changed from a geopolitical point of view. From a fundamental point of view, the British pound has become more problematic. Last week, it became known about the resignation of Kwasi Kwarteng, the British Finance minister, who had been in his position for a little more than a month. Such high-profile layoffs against the background of a new tax reduction plan do not add calmness to buyers of the British pound. The government of Liz Truss is under the strongest pressure. If her geopolitical worldviews in the UK do not bother anyone, then her ability to stabilize the economy and the financial sector raises concerns. Recall that her main opponent in the fight for the prime minister's chair was Rishi Sunak, the former head of the Treasury. He is a talented economist and probably would have handled the economy much better than Truss. But the problem was that Sunak was not experienced in international politics and did not enjoy strong support among the British themselves. It does not matter what Sunak would do as the head of state. A vote of no confidence in Liz Truss may be "launched" but is unlikely to be announced. Most likely, in this way, parliamentarians make it clear to Truss that her plans to reduce taxes, which will inevitably lead to a huge budget deficit and have already led to the collapse of the pound and the debt market, are unacceptable. Apart from the inflation report, Britain will have no interesting events. There will be frankly few macroeconomic statistics this week. The week's most important report is British inflation, which fell from 10.1% to 9.9% last month. This is not surprising since the Bank of England has already raised the rate seven times in a row. At the same time, we draw attention to the fact that the BA rate remains below the Fed rate. And in America, inflation slowed down by less than 1% of the maximum value, which is considered its mission accomplished. Therefore, most likely, inflation in the UK will not show a serious slowdown in the near future, which means that the regulator will continue to tighten monetary policy. At the same time, we are already talking about aggressive tightening and not a formal increase in the rate by 0.25-0.5%. However, this is still a very weak consolation for the British pound, which is unlikely to lead to its strong strengthening. Traders are much more attentive to the actions of the Fed than the BA or the ECB. Therefore, by and large, the inflation report will not change anything for the pound. We may see a strong market reaction to this report, but at the same time, it will not affect the balance of power dramatically. Also, on Friday, a report on retail sales will be published in Britain. Reports on industrial production, the real estate market, and applications for unemployment benefits will be published in the States this week, and several speeches by members of the Fed monetary committee will also take place. All three reports cannot be considered important; their market reaction will likely be weak. As for the speeches of Bowman, Bullard, Jefferson, and others, their rhetoric is now unambiguous – an aggressive rate hike until inflation begins to slow down significantly. Therefore, the pound remains in a twofold situation when technology allows its medium-term growth, but the foundation and macroeconomics continue to support the dollar. The average volatility of the GBP/USD pair over the last five trading days is 206 points. For the pound/dollar pair, this value is "very high." On Monday, October 17, thus, we expect movement inside the channel, limited by the levels of 1.0975 and 1.1381. A reversal of the Heiken Ashi indicator upwards will signal a new round of upward movement. Nearest support levels: S1 – 1.1169 S2 – 1.1108 S3 – 1.1047 Nearest resistance levels: R1 – 1.1230 R2 – 1.1292 R3 – 1.1353 Trading Recommendations: The GBP/USD pair has started a new round of correction in the 4-hour timeframe. Therefore, at the moment, new buy orders with targets of 1.1292 and 1.1353 should be considered in the event of a price rebound from the moving average line. Open sell orders should be fixed below the moving average with targets of 1.1047 and 1.0986. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 02:00 2022-10-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324419
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Trend Of The Euro To US Dollar Pair (EUR/USD) Is Again Downward

InstaForex Analysis InstaForex Analysis 17.10.2022 08:02
On Friday, the EUR/USD currency pair began a new round of downward movement, during which it again consolidated below the moving average line. Thus, the price did not spend even one day above the moving average, and the trend is again downward. Both linear regression channels are still directed downwards, so almost all indicators now support a new fall in the European currency. Also, recall that on the 24-hour TF, the price continues to be below the critical line. Therefore, according to all indicators, the European currency should continue to slide down. Of course, sooner or later, the downward trend will be completed. Still, we are asking one very simple question for the umpteenth time: what has changed over the last week (month/day) in the fundamental/geopolitical background so that now we can count not on an ordinary pullback up by 200-400 points, but a new upward trend? Answer: nothing. Consequently, the European currency is still at risk. Moreover, after several statements by Fed representatives last week, they assured us that the increase in the Fed's key rate would continue for some time, and then a high rate would remain for quite a long time. Recall that, at the beginning of this year, statements were repeatedly made that the rate would rise as much as possible to start slowing inflation (at that time, it was a 3.5% rate). And then (next year), a rate cut would begin so the economy could avoid a shock and recession. As you can see, there is no question of any rate reduction in 2023. Inflation is declining so slowly at a 3% rate that it is completely unclear at what level it will have to be raised. Is it worth saying again that any Fed rate hike is just fine for the dollar? The market could already consider future rate increases (planned at the beginning of the year), but did it consider the rate increase to 4.5%? Moreover, the European currency remains 200 points from its 20-year low. If the pound has made at least one serious upward leap, then the euro has not. Inflation in the European Union will be at least 10% in September. By and large, there will be only one more or less significant publication in the new week in the European Union—this is the inflation report for September. However, this report cannot be called "important" upon closer examination. First of all, what does European inflation change now? The ECB, just like the Fed, has set a course for an aggressive rate hike, so until inflation shows a serious slowdown, the regulator will not go off this course. Second, the reaction to European inflation has always been weaker than American inflation. A vivid example of this was last week when both major pairs "flew" in different directions after the publication of the CPI in the USA. Third, this is only the second final inflation value for September; the market is already aware that the indicator has risen to 10%. What else will be interesting in the European Union? Speeches by Luis de Guindos, Isabel Schnabel, and Christine Lagarde. Moreover, the speech of the head of the ECB is scheduled for Saturday, so it will not be able to have any impact on the euro currency during the week. Well, de Guindos and Schnabel are likely to remain true to their previous rhetoric, which implies a further tightening of monetary policy. Thus, nothing will be interesting regarding macroeconomics or foundations in the EU this week. But, unfortunately for the euro currency, there is also geopolitics. As several experts have warned, October will be very "hot." In November, the G-20 summit is due to take place, in which both Vladimir Putin and Vladimir Zelensky can participate. So far, no one understands how this can restore peace in Europe since Moscow and Kyiv have officially stated that they will not negotiate with each other. However, in any case, this event is a landmark, and maybe something will be decided on it. The average volatility of the euro/dollar currency pair over the last five trading days as of October 17 is 103 points and is characterized as "high." Thus, on Monday, we expect the pair to move between 0.9618 and 0.9825. A reversal of the Heiken Ashi indicator upwards will signal a new round of upward correction. Nearest support levels: S1 – 0.9644 S2 – 0.9521 Nearest resistance levels: R1 – 0.9766 R2 – 0.9888 R3 – 1.0010 Trading Recommendations: The EUR/USD pair made an upward leap, which ended very quickly. Thus, now it is necessary to stay in short positions with targets of 0.9644 and 0.9618 until the Heiken Ashi indicator turns up. Purchases will become relevant again no earlier than fixing the price above the moving average with goals of 0.9825 and 0.9888. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 02:00 2022-10-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324417
The Downside For The AUD/USD Pair Is Likely To Remain Cushioned

The AUD/USD Pair Has Returned To The Negative Area And The Price Is Going Down

InstaForex Analysis InstaForex Analysis 17.10.2022 08:06
The Australian dollar confuses market participants as soon as it can. On Friday, the movement range of the aussie amounted to more than 150 points, having reached three lines of the price channel drawn on the daily chart at once. The Marlin Oscillator no longer has freedom of movement - it will either break above the upper boundary of its own channel under the influence of convergence with the price (pink line), or turn down from the upper boundary of the channel, breaking the convergence. In this case, the target of the downward movement will be the underlying line of the price channel around the level of 0.6130. The bulls' victory may be marked by reaching the target level of 0.6360, which they failed to do on Friday. The price corrects slightly from the 0.6195 support on the 4-hour chart. What this means is not entirely clear, but the Marlin Oscillator has returned to the negative area and is pulling the price down. Overcoming the price of support 0.6195 will open the 0.6130 target. Based on the combination of technical factors, the probability of a descending option is slightly higher than that of an ascending one: 55 versus 45.   Relevance up to 04:00 2022-10-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324421
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

The British Currency (GBP) Can Go Down And The GBP/USD Pair's Price Can Be In Level Of 1.1170-1.1305

InstaForex Analysis InstaForex Analysis 17.10.2022 08:09
The pound returned to the support of 1.1170 on Friday after British Prime Minister Liz Truss sacked Treasury Secretary Kwasi Kwarteng, who had been in office for just 38 days. And since the sell-off of the pound was emotional (-148 points), today's opening was with a rising gap. The gap tells us that the market will try to close it, which will mean that the price will go under the support level of 1.1170, and then it may continue to decline to the support of 1.0815 - to the green price channel line. On the four-hour chart, the price is thinking in the range of levels 1.1170 and 1.1305 on how to close the window - either from current levels, or with a preliminary test of resistance at 1.1305. Today there are no important data for the UK and the US, and tomorrow for the US there will be data on industrial production for September, which is forecast at 0.1% after a 0.2% decline in August. Until this moment, the price can feel quite freely in the range of 1.1170-1.1305. Next, we are waiting for the decline of the British currency.     Relevance up to 04:00 2022-10-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324423
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Euro (EUR) Situation Is Under Pressure From Geopolitical And Macroeconomic Circumstances

InstaForex Analysis InstaForex Analysis 17.10.2022 08:15
The yield on 5-year US government bonds on Friday set another record of the last 15 years. This morning it is consolidating at these values (4.24%), showing the intention to continue growth. European debt securities are also growing in yields, but German debt is noticeably slower (2.10%), while Greek and Italian bonds are alarmingly fast: 4.21% and 3.82%, respectively, which is explained in the media as investor anxiety about the impending debt crisis in the southern countries of the eurozone. And if the euro quote goes under the support level of 0.9724, then the euro will again try to reach the bearish target of 0.9520. The daily Marlin Oscillator is in negative territory and inclines the euro to such a development of events. The limit of corrective growth is the target level of 0.9855, to which the MACD line is approaching and strengthening it. On the H4 chart, the price is kept from falling by the MACD indicator line. The Marlin Oscillator in the positive area. But since the recent exit above this line on the 13th was not developed, the probability of the price moving back under it increases, as well as the Marlin Oscillator. The Eurozone ZEW Economic Sentiment Index for October will be published on Tuesday - forecast -61.2 against -60.7 in September, while US industrial production for September will be released, the forecast for which is 0.1%. The euro's decline due to the totality of circumstances is considered as the main scenario.   Relevance up to 04:00 2022-10-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324425
Asia Morning Bites: Focus on Regional PMI Figures, China's Caixin Manufacturing Report, and Upcoming FOMC Minutes and US Non-Farm Payrolls"

The New York Stock Exchange: JPMorgan Chase & Co Was A Leader Among The Dow Jones Index Components

InstaForex Analysis InstaForex Analysis 17.10.2022 08:19
At the close on the New York Stock Exchange, the Dow Jones fell 1.34%, the S&P 500 index fell 2.37%, and the NASDAQ Composite index fell 3.08%. The leading performer among the Dow Jones index components today was JPMorgan Chase & Co, which gained 1.82 points or 1.66% to close at 111.19. UnitedHealth Group Incorporated rose 3.22 points or 0.63% to close at 513.13. Boeing Co rose 0.75 points or 0.57% to close at 133.15. The losers were shares of American Express Company, which lost 4.74 points or 3.35% to end the session at 136.81. Apple Inc was up 3.21% or 4.59 points to close at 138.40, while Chevron Corp was down 3.11% or 5.14 points to close at 160.14. . The leaders of growth among the components of the S&P 500 index following the results of today's trading were shares of U.S. Bancorp, which rose 3.36% to 42.76, Delta Air Lines Inc, which gained 2.30% to close at 31.08, and Wells Fargo & Company, which rose 1.86%, ending the session at 43.17. The losers were First Republic Bank, which shed 16.45% to close at 112.57. Shares of The Mosaic Company shed 9.88% to end the session at 46.86. Quotes of CF Industries Holdings Inc decreased in price by 8.40% to 98.04. Leading gainers among the components of the NASDAQ Composite in today's trading were Agrify Corp, which rose 53.75% to hit 1.45, Fednat Holding Co, which gained 48.02% to close at 0.52, and shares of Imara Inc, which rose 46.90% to end the session at 3.79. The drop leaders were shares of TOP Financial Group Ltd, which fell in price by 73.47%, closing at 5.49. Shares of Alfi Inc lost 69.90% and ended the session at 0.25. Quotes of Novo Integrated Sciences Inc decreased in price by 61.94% to 0.29. On the New York Stock Exchange, the number of depreciated securities (2506) exceeded the number of closed in positive territory (579), and quotes of 85 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,720 stocks fell, 1,005 rose, and 229 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.25% to 32.02. Gold futures for December delivery shed 1.67%, or 28.05, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 3.75%, or 3.34, to $85.77 a barrel. Futures for Brent crude for December delivery fell 2.93%, or 2.77, to $91.80 a barrel. Meanwhile, in the Forex market, EUR/USD was down 0.51% to hit 0.97, while USD/JPY was up 1.00% to hit 148.68. Futures on the USD index rose 0.82% to 113.18.     Relevance up to 05:00 2022-10-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results.   Read more: https://www.instaforex.eu/forex_analysis/296988
GBP: Softer Ahead of CPI Risk Event

A Technical Look At The Movement Of The Euro To US Dollar (EUR/USD) Pair

InstaForex Analysis InstaForex Analysis 17.10.2022 08:25
  Relevance up to 06:00 2022-10-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/296990
The Data May Keep The British Pound (GBP) From Rising

There Is Aggression On The Pound (GBP) From The Side Of The Great Britain Politics

InstaForex Analysis InstaForex Analysis 17.10.2022 08:32
The political crisis in the UK is gaining momentum, which cannot but put pressure on the British pound. After the instrument has moved away from its low by more than 1000 basis points, the British pound is in danger again. But this time, political problems have also been added to the economic problems. On Friday, it became known that British Finance Minister Kwasi Kwarteng was dismissed. He spent only 38 days in his position. The reason for the resignation was the shock in the UK's financial markets caused by tax amendments to the legislation. These amendments have not even been adopted yet, and it is unknown whether they will be adopted. They concerned several tax rates, which, according to the British government, should be lowered to reduce the pressure from rising energy prices on households and businesses. However, the tax reduction plan was criticized by economists, and it immediately became known that its implementation would lead to a huge budget deficit. Even the conservatives themselves spoke out against this plan, so the Liz Truss government had to urgently make a statement that the plan was still "raw" and needed improvements. It has already become known that the maximum tax rate of 45% will not be canceled, and the proposed changes may also be canceled for other taxes. Since someone had to "take over" responsibility for the shock in the financial and currency markets, most likely, this role was performed by Kwasi Kwarteng, who personally developed this plan. The media noted the importance of this event because Kwarteng was not just the Minister of Finance but also a close friend and colleague of Truss. Former Foreign Minister Jeremy Hunt may become the new finance minister. However, this is not all the upheaval in Parliament. Yesterday, it became known that Defense Secretary Ben Wallace may resign if Liz Truss reneges on her promise to increase defense spending. Earlier, during the election campaign, Truss promised to increase defense spending to 2.5% of GDP by 2026 and 3% of GDP by 2030. It is reported that this promise prompted Wallace to support the candidacy of Truss and not Rishi Sunak, who refrained from such statements. Jeremy Hunt, who may now take up his new position, has already stated that spending on many items will have to be cut amid the developing recession and the energy crisis in Europe. At this time, there was talk about the possible departure of Wallace, who believed that the defense budget needed to be increased. It is also reported that NATO recommended that all member countries of the union increase their defense budgets to 2.5% of GDP, and the UK was supposed to be one of the first to do so. The Bank of England somehow restored stability in the financial markets through an emergency program of buying bonds for 65 billion pounds. Still, political problems remain very serious, and the recession and the energy crisis may continue to pressure the pound and the UK economy. The wave pattern of the pound/dollar instrument implies the construction of a new upward trend segment. Thus, now I advise buying a tool for MACD reversals "up" with targets located above the peak of wave 1. Buy and sell should be careful since it is unclear which wave markings (euro or pound) will require adjustments, and the news background may negatively affect both the euro and the pound. Corrective wave 2 may already be completed.   Relevance up to 06:00 2022-10-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324427
The Bank Of Canada Focuses Only On Ensuring Price Stability

The Bank Of Canada Focuses Only On Ensuring Price Stability

TeleTrade Comments TeleTrade Comments 17.10.2022 08:41
USD/CAD has resumed the downside journey after the termination of the short-lived pullback. The emergence of the risk-on impulse has weakened the safe haven’s appeal. A bleak economic outlook is weighing pressure on oil prices. The USD/CAD pair has displayed a less-confident pullback after printing an intraday low of 1.3812 in the Asian session. The asset is expected to resume its downside momentum after the termination of the pullback as the risk impulse rebounded after turmoil on Friday. S&P500 is withholding its gains recorded on early Monday despite rising bets for a hawkish Federal Reserve (Fed). The US dollar index (DXY) is displaying a subdued performance as the appeal for safe-haven has been trimmed. Due to a light US economic calendar, the focus will remain on commentaries from Fed policymakers and geopolitical tensions. The 10-year US Treasury yields are also oscillating below the critical hurdle of 4%. This week, Canada’s inflation data will be of utmost importance. The headline Canada Consumer Price Index (CPI) figure is expected to decline to 6.8% from the prior release of 7.0%. Also, the core CPI data may trim by 20 basis points (bps) to 5.6%. The Bank of Canada (BOC) is accelerating its interest rates vigorously and has reached 3.25% as price pressures are deteriorating the economic fundamentals for the longer term. The central bank is entirely focusing on bringing price stability and ignoring current economic prospects. On the oil front, oil prices have rebounded after printing a fresh two-week low at $84.72. Investors are discounting the bleak growth outlook amid escalating policy tightening measures by the central banks. Apart from that, the continuation of the no-tolerance approach towards Covid-19 by China has kept a lid on the oil demand. It is worth noting that Canada is a leading exporter of oil to the US and weak oil prices are weakening the Canadian dollar.
CNY Can Appreciate Mildly Through This Year According To Economists At Commerzbank

The Chinese Economy Is Facing Serious Problems And The USD/CNH Pair Is Oscillating In A Tight Range

TeleTrade Comments TeleTrade Comments 17.10.2022 08:55
USD/CNH is facing barricades around 7.22 as the DXY has weakened amid the risk-on profile. Considering the zero Covid-19 policy and underperformance of real estate, the PBOC could sound dovish. China’s major state-owned banks have been spotted selling US dollars in the spot market. The USD/CNH pair is hassling in overstepping the critical hurdle of 7.2200 in the early European session. The asset is oscillating in a tight range despite the risk-on impulse in the market. The US dollar index (DXY) is oscillating near the round-level cushion of 113.00 and is expected to surrender the same amid a decline in safe-haven's appeal. The DXY is performing vulnerable despite the soaring odds of a bigger rate hike by the Federal Reserve (Fed). Mounting price pressures in the US economy are impacting the US economy and have left no other option for the Fed than to tighten policy measures further. Investors have shifted their focus toward the major event of an interest rate decision by the People’s Bank of China (PBOC). The monetary policy is due on Thursday and a dovish stance is expected. The Chinese economy is facing major headwinds of zero Covid-19 policy to contain the epidemic and vulnerable real-estate sector due to bleak demand.   Meanwhile, statements from six banking sources claim that China's major state-owned banks were spotted swapping yuan for U.S. dollars in the forwards market and selling those dollars in the spot market on Monday morning. Apart from that, the economy will also release the Gross Domestic Product (GDP) data on Tuesday. As per the preliminary estimates, the annual GDP data will improve significantly to 3.4% vs. the prior release of 0.4%. On a quarterly basis, the economy will report an expansion in growth rate by 3.5% vs. a contraction of 2.6% reported earlier. The crucial economic events will keep the asset on the tenterhooks.
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

The USD/JPY Pair Situation Seems Unstoppable, The Japanese Government Intends To Take Action

TeleTrade Comments TeleTrade Comments 17.10.2022 09:01
Japanese Prime Minister Fumio Kishida had to make an appearance on Monday, as the USD/JPY rally appears unstoppable. He said that they “will take steps against speculative FX moves as needed.” “Rapid forex moves undesirable,” he added.
Caixin Services PMI Data Has Helped The Chinese Yuan (CNH)

The US Dollar To Japanese Yen (USD/JPY) Pair Located At Its Highest Levels Since 1990

TeleTrade Comments TeleTrade Comments 17.10.2022 09:11
USD/JPY retreats from intraday high, prints the first daily loss in nine around 32-year high. Japan PM Kishida assures taking steps to limit speculative FX moves, begin search for replacing BOJ Governor Kuroda. Pullback in yields, light calendar tease sellers around multi-year high. USD/JPY bulls take a breather at the highest levels since 1990, printing mild losses near 148.50 during the early hours of Monday’s European session. In doing so, the yen pair prints the first daily loss in nine amid fears of Japan government’s intervention, as well as amid the Treasury bond yields’ retreat. Recently, Japanese Prime Minister Fumio Kishida mentioned that they “will take steps against speculative FX moves as needed.” Japan PM Kishida also added that rapid forex moves are undesirable. Earlier in the day, the Japanese leader mentioned “Will consider a successor to BOJ Governor Kuroda, taking into account monetary policy foreseeability, coordination with the government.” With this, Japan’s Kishida indirectly strikes the Bank of Japan’s (BOJ) easy money policies and suggests a dislike for the USD/JPY run-up. Also exerting downside pressure on the USD/JPY prices could be the sluggish US Treasury bond yields and the broad US dollar pullback amid a sluggish start to the week. Elsewhere, cautious optimism about the UK’s economy, due to the latest shuffle in the PM’s team, as well as the absence of the market’s wagers on the Fed’s 1.0% rate hike also keep the USD/JPY sellers hopeful at the multi-year high. It should be noted that the Japanese intervention appears imminent and can trigger the much-needed pullback from the highest levels since 1990. However, the pace of the fall depends upon the size and timing of meddling. Even so, the divergence between the monetary policies of the Fed and BOJ can keep the USD/JPY bulls hopeful. Technical analysis A clear pullback from the three-month-old ascending resistance line, at 149.10 by the press time directs USD/JPY sellers towards a three-week-old ascending support line, at 146.30 as we write.
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

The Kiwi (New Zealand Dollar) Will Remain On A More Neutral Perspective

TeleTrade Comments TeleTrade Comments 17.10.2022 09:15
NZD/USD ended last week lower. The focus now shifts to NZ Consumer Price Index (CPI) data due out at 21:45 GMT, economists at ANZ Bank report. NZD has a few legs of support “The NZD has a few legs of support – RBNZ leadership, high-interest rates, and a surprisingly resilient economy. The only trouble is, the USD has most of that too. That leaves us much more neutral on the Kiwi outlook in a broad sense. But NZ CPI data tomorrow could shift the dial, especially if it heralds a change in monetary policy expectations.” “Support 0.5470/0.5510 Resistance 0.5820/0.6000/0.6160”
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The GBP/JPY Pair Is Approaching A High Level Of 168.0

TeleTrade Comments TeleTrade Comments 17.10.2022 09:20
GBP/JPY has refreshed its four-month high at around 168.00 amid BOJ’s dovish guidance. Monday’s depreciation in yen has accelerated the odds of BOJ’s intervention in currency market. Fears of Liz Truss’s topple have turned the pound bulls highly volatile. The GBP/JPY pair has refreshed its four-month high near 168.00 as the risk-off impulse has surrendered globally. The cross has built its intraday gains on the base of dovish guidance by the Bank of Japan (BOJ). The ongoing upside momentum is expected to continue and the pair will re-test a six-year high at 168.53. On Friday, BOJ’s Governor Haruhiko Kuroda that “It is appropriate to continue monetary easing,” reported Reuters. The central bank sees inflationary pressures declining to 2%, therefore, a continuation of dovish monetary policy is highly required. Meanwhile, the overall weakening of the Japanese yen has triggered the odds of BOJ’s intervention in the currency markets. Last week, Japanese Chief Cabinet Secretary Hirokazu Matsuno cited that “We are closely watching FX moves with a high sense of emergency and will take appropriate steps on excess FX moves. On the UK front, fears of UK novel Prime Minister Liz Truss’s topple have turned the pound bulls extremely volatile. The Old Lady has failed to gain the confidence of international investors amid the absence of confidence in her drafted policies. Back-and-forth rollbacks of monetary easing have trimmed her credibility. Apart from that, mounting price pressures in the UK economy are a major concern for the Bank of England (BOE) policymakers. In response to taming inflationary pressures, BOE Governor Andrew Bailey stated that “We will not hesitate to raise interest rates to meet the inflation target," The central bank believes that price pressures demand stronger policy tightening measures than announced in August.  
Analysis Of USD/CHF Pair: The Swiss Currency Pair Rebounds

There Is Pressure That Weakens The US Dollar To Swiss Franc (USD/CHF) Pair

TeleTrade Comments TeleTrade Comments 17.10.2022 09:24
USD/CHF edges lower on Monday and is pressured by a modest USD weakness. Retreating US bond yields turns out to be a key factor weighing on the greenback. Aggressive Fed rate hike bets should help limit losses for the buck and lend support. The USD/CHF pair kicks off the new week on a softer note and reverses a major part of Friday's positive move back closer to its highest level since May 2019. The pair remains on the defensive through the early European session and is currently trading around the 1.0020-1.0025 region. A modest pullback in the US Treasury bond yields prompts some selling around the US dollar on Monday, which, in turn, is seen exerting downward pressure on the USD/CHF pair. That said, expectations for a more aggressive policy tightening by the Fed should act as a tailwind for the US bond yields and the greenback. Investors seem convinced that the US central bank will continue to hike interest rates at a faster pace to curb inflation and anticipate another supersized 75 bps increase in November. Apart from this, a positive risk tone undermines the safe-haven Swiss franc and should help limit the downside for the USD/CHF pair. The global risk sentiment got a boost amid reports that the UK government is preparing for a major U-turn on planned tax cuts. That said, concerns about the potential economic fallout from China's zero-COVID policy, along with geopolitical risks, have been fueling recession fears and capping any optimism in the markets. The mixed fundamental backdrop warrants caution before positioning for a firm intraday direction. Traders now look forward to the US economic docket, featuring the release of the Empire State Manufacturing Index. This, along with the US bond yields, might influence the USD and provide some impetus to the USD/CHF pair.
Collapse of Black Sea Grain Initiative Rattles Market: Impact on Ukrainian Grain Exports

Action By The South African Central Bank (SARB) May Slow Down Rand's (ZAR) Move

TeleTrade Comments TeleTrade Comments 17.10.2022 09:28
USD/ZAR is aiming for the 19 mark which was last breached in 2020 when the pandemic started. Economists at Commerzbank expect the pair to extend its rally towards 20. Grey times for the rand?  “In the current market environment with USD strength there is a risk of further losses in particular as there are risk factors on the domestic front too.” “Economic data provide little support for the rand. Following better-than-expected August data on production in the manufacturing sector, there was rather disappointing data from the mining sector. Due to the threat of a global recession the growth outlook remains weak.” “The hawkish South African central bank (SARB) only seems to be able to slow the rand’s nose-dive. Central bank governor Lesetja Kganyago's efforts to convince potential ZAR investors of the attractiveness of South Africa as an investment location are threatened to be counteracted by the government’s lack of reform progress in important areas.” “We expect USD/ZAR to continue trending towards 20 for now.”
Despite The Improvement In The Outlook Due To Falling Energy Prices, The Economic Environment In Britain Remains Difficult

The Actions Of England's New Finance Minister John Hunt May Not Have Long-Term Effects

InstaForex Analysis InstaForex Analysis 17.10.2022 11:43
GBP/USD jumped on Monday amid news from the UK that the economic course presented by Prime Minister Liz Truss would be stopped. This was after Finance Minister Kwasi Kwarteng announced his resignation last Friday, as well as on the inability of Truss to convince markets that the decision to significantly ease fiscal policy will have a beneficial effect on the local economy. Pound got off to a solid start after it was revealed that the new finance minister, John Hunt, will present excerpts from his medium-term budget plan this afternoon. It seems that the market is hoping for some kind of compromise between the need to save the economy with regular infusions of unsecured money, and the need to take a tough course of savings. What is currently observed in the market can be explained by the closing of a large number of short positions in pound. And with the uncertainty factor looming ahead, as well as the significant deterioration in the economic situation in the UK, it is highly likely that prices will continue to collapse, especially if new measures from the new finance minister are unlikely to provide significant and long-term support for the local currency. Dollar also has a huge advantage being a strong safe-haven currency. Summing up, it is likely that the growth of pound will be limited. Forecasts for today: GBPUSD The pair is highly likely to be volatile today and would trade in the range of 1.1060-1.1370. AUD/USD The pair is also consolidating in the range of 0.6200-0.6350. But in the future, it will exit this range and go down to the level of 0.6150.   Relevance up to 08:00 2022-10-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324437
Oil Prices Rise as OPEC Cuts Output and API Reports Significant Inventory Drawdown

Dynamics Of Indicators Should Increase The Aggression Of The Bank Of England

InstaForex Analysis InstaForex Analysis 17.10.2022 11:56
As British government officials lined up on the road of shame, the pound managed to bounce back after the weekend sell-off by October 14th. They were caused by the termination of the Bank of England's £65bn quantitative easing program. Markets are so accustomed to something temporary from the central bank becoming semi-permanent that they were sorely disappointed that this time everything went wrong. As the BoE tries to replace QE with a bond buying and selling repo program, knowing full well that it is impossible to tighten and loosen monetary policy at the same time for a long time, members of the cabinet ministers stubbornly repeat the same mantra. Taxes will not fall as quickly as many would like, and there is no fiscal stimulus without more borrowing and debt. Tax cuts should be done in such a way that people see that the government can afford it. The last drops in the sea of financial market turmoil were the change of the Chancellor of the Exchequer and Liz Truss' announcement that corporate tax in 2023 will increase from 19% to 25%. Investors realized that the new government, after an erroneous mini-budget, decided to synchronize monetary and fiscal policy. This had a positive effect on the debt market and GBPUSD. However, the stabilization of the pair is likely to be a temporary phenomenon. Goldman Sachs notes that as soon as the dust settles, that is to say, the markets will calm down, there will be talk that the repo rate will not rise as fast as it is currently expected, which will drop the sterling to $1.05. Moreover, Goldman Sachs, citing an increase in corporate tax, cut its UK GDP growth forecast for 2023 from -0.4% to -1%. Core inflation at the end of next year is expected at 3.1%, not 3.3%. UK GDP dynamics According to 47% of the 452 investors participating in the MLIV Pulse survey, it is the UK that has the greatest chance of facing a recession. The probability that the eurozone will be the first to fall into recession is 45%, and the US is 7%. In terms of inflation, the release of consumer price data will be the highlight of the UK economic calendar in the week leading up to October 21st. Bloomberg experts expect CPI to accelerate from 9.9% to 10% in September. Core inflation will rise from 6.3% to 6.4%, the highest since 1992. Such dynamics of indicators on paper should increase the aggression of the Bank of England, and with it, the chances of a 100 bps increase in the REPO rate in November, which could theoretically support the GBPUSD. However, given the confusion on the financial markets and rumors about the resignation of Liz Truss, the strengthening of the sterling on macro statistics looks unlikely. Technically, there is an inverted 1-2-3 pattern on the GBPUSD daily chart. A break of the diagonal resistance near 1.136 could be a buying opportunity. Until this happens, we keep the focus on sales. Including in case of a successful assault on support at 1.116.   Relevance up to 09:00 2022-10-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324467
Hungary's Budget Deficit Grows, Raising Concerns Over Fiscal Targets

Apple Has Completed Deliveries From A Chinese Company YMTC | Flood In Australia And Its Consequences

Saxo Bank Saxo Bank 17.10.2022 12:09
Summary:  Equity markets fell sharply on Friday, erasing the steep rally of the prior session, as US treasury yields rose and the US dollar closed the week on a strong note. After a retreat on Friday, the pound sterling is attempting a comeback on hopes that the new Chancellor will reverse more of the struggling new government’s original tax cut plans. The focus for the week ahead will likely be on corporate earnings, with Tesla, the world’s most heavily traded stock, set to report Wednesday.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) A steep drop in equities Friday erased the odd-ball rally of the prior session as the US equity market heads into Q3 earnings season on its back foot, trading heavily near the cycle lows. The next focus lower could be on the major high posted pre-pandemic in the S&P 500 near 3,400. For the Nasdaq 100, the equivalent level would be near 9,750, some 1,000 points lower from the current level. The earnings season kicks into gear this week with especially Wednesday being important for sentiment in equities as Tesla and ASML reports earnings. Hong Kong’s Hang Seng (HSIV2) and China’s CSI300 (03188:xhkg) Stocks in Hong Kong and mainland China retreated after the selloff in the US markets last Friday.  In addition, General Secretary Xi’s speech yesterday hailed China’s “Dynamic Zero-Covid” strategy and gave no hint of shifting policy priorities toward economic growth as some investors had hoped for. Hang Seng Index lost 1.1% and CSI300 slid 0.4%. China Internet stocks traded in Hong Kong declined from 2% to 8%. CNOOC (00883:xhkg) climbed 0.7% after preannouncing strong net income, benefiting from higher energy prices. USD comes storming back, sterling tries to stabilize... The US dollar quickly recovered lost ground on Friday after the big correction Thursday, in correlation with the return of weak risk sentiment and a fresh rise in US treasury yields back toward the cycle highs. After Chinese leader Xi Jinping's speech at the party congress this weekend, the USDCNH exchange rate remains pinned near the 7.20 area that was the previous high from 2019 and 2020, USDJPY continues to run higher amidst broad JPY weakness (EURJPY is nearing a multi-year high above 145.00). Elsewhere, EURUSD seems reluctant to make a statement with 0.9800 and 0.9536 the two levels of note there, and GBPUSD has pushed higher on hopes that the recent volatility in UK gilts and sterling will see the government retract its budget-busting policy moves, with likely further political turmoil ahead as Prime Minister Truss fights to stay in office. Crude oil (CLX2 & LCOZ2) Crude oil dropped sharply on Friday after a strong comeback for the US dollar and with little to help sentiment as the week gets under way after Chinese leader Xi doubled down once again on his commitment to Zero Covid policy. The bigger focus in energy markets is on the weak supply situation in diesel amidst concerns of shortages in both Europe and the US. In Europe, strikes at French refineries are aggravating the supply situation, while US storage levels are at their lowest for this time of year ever. US treasuries (TLT, IEF) US treasury yields pulled back higher on Friday to close the week near the highs for the cycle, with the 10-year Treasury yield benchmark near 4.00% once again and a very light US data calendar for the week ahead, although important housing data like the October NAHB Survey is up tomorrow and September Housing Starts/Building Permits data follows on Wednesday. The most interesting auctions this week are a 20-year US Treasury auction on Wednesday and a 5 year TIPS auction on Thursday. What is going on? Xi’s speech at the Chinese Communist Party’s 20th National Congress adhered to current policy priorities General Secretary Xi Jinping made a speech to present the Work Report of the 19th Central Committee to the 20th National Congress.  In the speech, he reiterated the current policies of the new development paradigm, common prosperity, dual circulation, and dynamic zero-Covid, as well as strong language on Taiwan. As we remarked in a recent note, General Secretary Xi is set to continue the key policy priorities that he launched over the past 10 years into the five years ahead. Investors hoping for major shifts in economic policies in China or the Chinese authorities ditching the dynamic Covid-zero strategy after the 20th National Congress will most likely be disappointed. Apple to stop using Chinese memory chips Due to US export restrictions Apple has decided to halt the usage of memory chips from the Chinese company YMTC. The chips are cheaper than other manufacturers of memory chips but were only supposed to have been used for the Chinese market, so the immediate impact on iPhone pricing is low. However, it underscores the long-term risks to inflation from the ongoing reshoring of the global supply chain. Mixed US economic data on Friday On a positive note, the US preliminary October University of Michigan sentiment indicator rose slightly, with the headline at 59.8, up from 58.6 in September. This is the highest print since April 2022. This is partially explained by an easing of supply constraints. But concerns over inflation and the ongoing economic slowdown remain. On a negative note, U.S consumer spending was flat last month. Retail and food services sales were little changed after an increase of 0.4 % in August. This is actually much worse than it looks like. Retail sales numbers are not adjusted for inflation which means that real spending actually retreated for the month. However, it is unlikely to prevent the U.S. Federal Reserve from raising the Fed funds rate by at least 75 basis points at the November FOMC meeting (current market pricing is +78 basis points). La Nina is underway in Australia; floods decimate some wheat crops In the Australian state of Victoria at the weekend floods decimated some wheat crops, which has resulted in the price of Wheat futures contracts for March and May 2023 lifting in anticipation that supply issues will worsen. The Australian Federal Emergency Management Minister said parts of Australia face ‘some serious flooding’ with more rain forecast later this week, with 34,000 homes in Victoria potentially expected to be inundated or isolated. The Bureau of Meteorology forecasts the La Lina event to peak in spring that’s underway in the Southern Hemisphere, before turning to neural conditions early next year. What are we watching next? UK Prime Minister Truss in fight for political life this week … as rumors swirl of a rebellion in the Tory ranks. New Chancellor Jeremy Hunt is scheduled to speak today and may announce further reversals of the budget-busting adjustments to tax policy that got the fledgling government into trouble so quickly and helped trigger the recent turmoil in sterling and the UK gilt market. Sterling has started the week on a hopeful note as we also wait and see how well the gilt market functions after the Bank of England wound down its emergency QE programme last week. The UK CPI data on Wednesday is the data highlight of the week for the UK, with headline CPI expected at 10.0% YoY and core at +6.4%. Earnings to watch This is the first full week for the quarterly earnings cycle, with intense focus on Tesla’s earnings report up on Wednesday as the stock closed a new low for the year on Friday as concerns rise of cracks in the company’s growth story. Given the pressure on the semiconductor industry from US export restrictions earnings from ASML and Lam Research are also our focus on Wednesday. Today: Bank of America, Sandvik Tuesday: Charles Schwab, Johnson & Johnson, Goldman Sachs, Intuitive Surgical, Lockheed Martin, Truist Financial Wednesday: ASML, Elevance Health, Tesla, IBM, Lam Research, P&G, Abbott Laboratories, Atlas Copco Thursday: China Mobile, China Telecom, ABB, Danaher, Investor, Philip Morris, Union Pacific, CSX, AT&T, Blackstone, Marsh & McLennan, Yara International, Nordea, Volvo, Ericsson, Freeport-McMoRan, Dow Friday: CATL, American Express, Schlumberger, Verizon Communications, HCA Healthcare, Sika Economic calendar highlights for today (times GMT) 1200 – Poland Sep. Core CPI 1230 – US Oct. Empire Manufacturing 1430 – UK Chancellor Hunt to speak 1500 – ECB’s Lane to speak 2145 – New Zealand Q3 CPI 0030 – Australia RBA Minutes 0200 – China Sep. Industrial Production 0200 – China Sep. Retail Sales 0200 – China Q3 GDP Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-17-2022-17102022
The Australian Market Has Seen Growth | Mercedes-Benz Launches New EV

Podcast: Decline In Tesla And China is Europe's rival?

Saxo Bank Saxo Bank 17.10.2022 14:17
Summary:  Today we look at Friday's whipsaw turnaround in equities after the bizarre Thursday rally, as the heart of earnings season lies dead ahead and the world's most traded stock, Tesla, has dumped to a new low for the year just ahead of its Wednesday earnings call. We also discuss Chinese leader Xi's speech over the weekend and whether Europe is set to declare China an economic rival, as well as watching for the ongoing fallout for semiconductor companies after the Biden administration moved to limit semiconductor tech transfer to China. The latest in FX, individual stocks to watch and more also on today's pod, which features Peter Garnry on equities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-oct-17-2022-17102022
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

FX: Could USD/JPY Reach 141? US Dollar To Japanese Yen - Technical Look - 17/10/22

InstaForex Analysis InstaForex Analysis 17.10.2022 15:33
Red lines- bullish channel Black lines- bearish RSI divergence USDJPY is trading around 148.87 making new weekly and 2022 highs. Trend remains technically bullish as price continues making higher highs and higher lows. The RSI is providing us with a very important warning. The up trend is weakening according to the RSI. A pull back at least towards the lower channel boundary is justified. A pull back towards 141 is very possible. Bulls need to be very cautious. Traders need to have patience. The RSI bearish divergence is only a warning and not a reversal signal. Relevance up to 13:00 2022-10-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/297101
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

Forex Market: Euro To US Dollar - Technical Analysis | What Can We Expect From EUR/USD?

InstaForex Analysis InstaForex Analysis 17.10.2022 16:00
Red lines- bearish channel Blue lines- Fibonacci retracements EURUSD is trading just above 0.97. Short-term trend is mixed as price has stopped the decline from the parity level and at the same time there are some potential reversal signs. Price is trading around the 61.8% Fibonacci retracement of the entire rise and at this level we could see a bigger reversal to the upside. EURUSD remains inside the medium-term bearish channel but is also showing reversal signs. If bulls manage to start a new sequence of higher highs and higher lows, then we could see EURUSD reach the upper channel boundary close to 1.0150. Failure to hold above the recent low at the 78.6% retracement, will be a new bearish signal. Relevance up to 14:00 2022-10-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/297104
Bank of Japan to welcome Kazuo Ueda as its new governor

Forex: Japanese Yen (JPY) Gathers Interest Again

Craig Erlam Craig Erlam 17.10.2022 22:33
A humiliating blow Another turbulent start to the week, albeit a positive one broadly speaking with equity markets around 1% higher in Europe after a decent start to the week in Asia. Since Liz Truss became UK Prime Minister, uneventful days have eluded us and this week has also got off to another hectic start. While the Prime Minister had every intention of making waves in her first weeks in charge, she clearly didn’t anticipate the storm that was brewing and I’m sure she more than anyone at this point would do just about anything for a more peaceful few weeks. Read next: Netflix Stock Price May Tumble Tomorrow! What Can We Expect From NFLX Earnings? | FXMAG.COM Assuming she lasts that long, of course. The u-turn this morning was even more historic than the initial mini-budget. A humiliating moment after a chaotic period for Truss in which confidence in her in the markets, the public and her own party, it seems, has been decimated. That said, we are seeing some improvement from a market perspective. It just took reversing almost all of the unfunded tax cuts to achieve it. Who’d have thought? The job isn’t done yet though, the new Chancellor has done what was necessary now but the harder decisions arguably come later this month in the budget. How low can it go? The yen is continuing to slide against the US dollar, hitting 148.89 this morning and trading beyond the level the country intervened at in 1998 and, of course, last month. We’ve had the usual plethora of commentary from various officials overnight; “high sense of urgency”, “ready to act” etc. It does seem only a matter of time until we get another powerful intervention in the FX markets, it’s just a question of what they’ll do differently this time as doing the same again every few weeks simply isn’t sustainable. The question is whether the yen will surpass 150 against the dollar first. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. The mother of all U-turns - MarketPulseMarketPulse
The Price Of USD/JPY Pair Has To Fight With The Resistance Level

The USD/JPY Pair Has Potential For Next Upward Movement

InstaForex Analysis InstaForex Analysis 18.10.2022 08:02
The yen continues its movement to the target level of 150.00, formed by the price channel line of the higher (monthly) timeframe. A divergence is almost formed with the Marlin Oscillator. Even if the divergence intensifies a bit, the price still has the opportunity to reach the intended target. In general, the current technical picture tells us about the depletion of the USD/JPY pair's potential for growth. The Marlin Oscillator could no longer withstand the growth on the four-hour chart and rolled back down. This creates a basis for the formation of a divergence, for which the price should grow a bit more. So, the 150.00 growth target remains, the target levels of 147.38 and 145.30 are waiting.   Relevance up to 02:00 2022-10-19 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324556
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Pound (GBP) Rose Due To A Psychological Factor, There Was No Source In The Economy

InstaForex Analysis InstaForex Analysis 18.10.2022 08:12
The pound rose by 184 points on Monday, but a significant part of this growth fell on the gap (67 points) and after the unsuccessful attack on the strong resistance of the two indicator lines of the daily scale, the price risks returning to 1.1170 and even going under support in the process of closing the week formed at the opening gap. The rise in the pound was based on the psychological factor of Jeremy Hunt's cancellation of Kwasi Kwarteng's "mini-budget". In fact, nothing happened in the UK economy. Even the question of Liz Truss's resignation is coming to naught. A decline below 1.1305 will signal that the price will still head towards 1.1170. Reaching the target level of 1.1500 will further accelerate the reversal momentum. The price has already managed to form a weak divergence with Marlin on the H4 chart. In this situation, it is not indicative, but is also consistent with the option of closing the gap soon. Moreover, the MACD line is already waiting for the price at the target level of 1.1170.   Relevance up to 02:00 2022-10-19 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324558
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

The Euro To US Dollar Pair (EUR/USD) Is In An Upward Mood

InstaForex Analysis InstaForex Analysis 18.10.2022 08:17
The main drivers of yesterday's growth in almost all market assets were the British pound and the US stock market. The new Minister of Finance, Jeremy Hunt, canceled the so-called "mini-budget" of his predecessor Kwarteng, on which the currency and debt markets of Great Britain went up. The pound rose by 1.05%, S&P 500 by 2.65%, also growing under the impression of good corporate reports, and the euro by 1.08% (117 points). In its growth, the price almost reached the magnetic point of intersection of two lines - the target level of 0.9855 and the MACD line of the daily scale. Now the price has two actions to choose from: consolidate above this level and continue to rise to 0.9950, and turn down to the starting point of yesterday - to the level of 0.9724. The Marlin Oscillator is in the positive area, it tends to continue growing. The difficulty in choosing a direction is also that there are now two opposing investment ideas on the market: to continue buying risk on a positive background of corporate reports and to be careful in this, slowly getting rid of the euro, as amid continuing negative statistics on the euro area, the European Central Bank may raise the rate not by 0.75% but by 0.50% at a meeting on October 27, which, of course, will send the euro unambiguously down. US industrial production data for September is released today. Forecast 0.1% vs. -0.2% in August. And if the data helps the euro to overcome the current resistance of 0.9855, then this will become an indicator of the mood of investors in the coming days (growth in risk appetite). The situation is generally on the rise on a four-hour timescale. But in order to stay in the growing trend, the price must consolidate above the resistance. Otherwise, a quick return to 0.9724 may follow. This can happen in the event of sharply negative news.     Relevance up to 02:00 2022-10-19 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324560
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The Upward Movement Of The EUR/USD Pair Is Not Strong Enough

InstaForex Analysis InstaForex Analysis 18.10.2022 08:21
EUR/USD 5M The euro/dollar pair rose significantly on Monday, as for the scale of the hourly timeframe. On higher time frames, the upward movement does not look overly strong, but on the hourly it is impressive. However, by the end of the day, the pair was only near the Senkou Span B line, and at the same time near the level of 0.9844. Thus, there was no clear breakthrough of these levels, which means that we can deal with another correction, after which the downward movement will resume. However, it should be noted that the euro had no special grounds for growth on Monday. Thus, "growth out of the blue" can be considered a positive moment for the euro. But we still believe that this is not the beginning of a new long-term upward trend. Unfortunately, the fundamental and geopolitical backgrounds still look very difficult for risky currencies, which means that the dollar can go on the offensive at any moment. Everything was complicated in regards to Monday's trading signals. The pair traded exclusively sideways during the European trading session, in the area of the Kijun-sen line and the level of 0.9747. There was exactly one pin above this area, which turned out to be false. At the same time, there should not have been a loss on the long position, since there was no sell signal, which means that it should not have been closed. The price nevertheless started an upward movement on the second attempt and subsequently went up by at least 100 points. The long position had to be closed manually at a profit of about 75 points. COT report: The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 3,200, while the number of shorts increased by 2,900. Accordingly, the net position decreased by about 6,100 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 38,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 18. The ECB will not be able to fight inflation effectively. Overview of the GBP/USD pair. October 18. The political pun in the UK persists. Forecast and trading signals for GBP/USD on October 18. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The downward trend still cannot be considered reversed on the hourly timeframe, despite a solid rise over the past few days. However, the euro is close to trying to start forming a new upward trend. If it manages to confidently overcome the Senkou Span B line, it will be possible to count on additional growth of the pair. On Tuesday, we highlight the following levels for trading - 0.9553, 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9834) and Kijun-sen lines (0.9740). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. No important events or reports are scheduled in the European Union on October 18, and a report on industrial production will be released in the US, which is interesting only from the point of view of statistics. However, the pair showed a very high volatility out of the blue on Monday, so there is reason to expect its active movements on Tuesday as well. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 00:00 2022-10-19 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324548
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The Cable Market (GBP/USD) Can Continue Its Upward Movement

InstaForex Analysis InstaForex Analysis 18.10.2022 08:31
GBP/USD 5M The GBP/USD currency pair again showed high volatility on Monday and, just like the EUR/USD pair, grew out of the blue by the end of the day. So, now the British pound is very close to its last local high, and at the same time above the Senkou Span B and Kijun-sen lines, which opens up very good prospects for further growth. We have said before that the pound is more likely to show growth than the euro, thanks to the "technique". As long as the price is above the lines of the Ichimoku indicator, there are high chances for the continuation of the upward movement. But you should be careful! Since the fundamental and geopolitical backgrounds remain very unfavorable for the pound, we may witness a new powerful fall. These movements can look like a wide flat on a 4-hour or 24-hour timeframe. Since it is very difficult to say on the basis of what the pound has grown in recent days, there are two options: either the market still refused further short positions, or we will see a flat on the higher timeframes. Yesterday's trading signals on the 5-minute timeframe were not ideal, but still they were and they should have been worked out. The first signal was formed literally 15 minutes before the opening of the European session. At this time, the price did not have time to move far from the entry point, so a long position could be opened. Subsequently, the price went to the level of 1.1354, and then to the level of 1.1442, where a sell signal was formed with a small error. Consequently, it was there that longs should have been closed in profit of at least 180 points. The sell signal could also be worked out, it was also profitable, but still it formed quite late, so it could also be ignored. COT report: The latest Commitment of Traders (COT) report on the British pound showed a new weakening of the bearish mood. During the week, the non-commercial group opened 6,900 long positions and closed 3,400 short positions. Thus, the net position of non-commercial traders increased by 10,300, which is quite a lot for the pound. One might assume that the actions of the big players and the movement of the pound are finally starting to coincide, as the pound has generally gained over the last period of net growth, but we are worried that this may be another "false alarm". The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound continues to fall in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 88,000 shorts and 49,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 18. The ECB will not be able to fight inflation effectively. Overview of the GBP/USD pair. October 18. The political pun in the UK persists. Forecast and trading signals for EUR/USD on October 18. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair once again left the downward channel on the hourly timeframe, and at the same time overcame the lines of the Ichimoku indicator. The price still managed to stay above the critical line on the 24-hour TF, so the pair can continue its upward movement, as we said earlier. However, we remind you that the foundation and geopolitics remain complex, which means that long-term purchases should be treated carefully. On October 18, we highlight the following important levels: 1.1212, 1.1354, 1.1486, 1.1649. Senkou Span B (1.1207) and Kijun-sen (1.1179) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. There are no major events planned for Tuesday in the UK, but the pound continues to trade in a very volatile manner, so it simply does not need a strong background now. A single report on industrial production in the US is unlikely to "make the weather" on the market. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 00:00 2022-10-19 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324550
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The Euro To British Pound (EUR/GBP) Cross Gets Support From Another Factor

TeleTrade Comments TeleTrade Comments 18.10.2022 08:34
EUR/GBP seesaws between tepid gains/minor losses through the Asian session on Tuesday. The UK political uncertainty undermines the British pound and offers support to the cross. A weaker USD benefits the shared currency and also contributes to limiting the downside. The EUR/GBP cross struggles to capitalize on the overnight bounce from its lowest level since early September and oscillates in a narrow trading band on Tuesday. The cross is currently placed in neutral territory, around mid-0.8600s, as traders await a fresh catalyst before positioning for the next leg of a directional move. The downside, however, remains cushioned, at least for now, amid the UK political uncertainty, which continues to act as a headwind for the British pound. In fact, rebels within the ruling Tory Party are coming together to replace the newly-elected UK Prime Minister Liz Truss in the wake of the recent tax cut fiasco. It is worth recalling that the new UK Finance Minister Jeremy Hunt reversed almost all tax measures set out in the mini-budget led to chaos in the financial markets. The shared currency, on the other hand, draws some support from the prevalent selling bias around the US dollar. This is seen as another factor offering some support to the EUR/GBP cross. That said, soaring bets for a bigger 100 bps rate hike by the Bank of England (BoE) in November offer some support to sterling and keep a lid on any meaningful upside for the cross. This, in turn, warrants some caution for aggressive traders and positioning for a firm intraday direction. The market focus now shifts to the latest UK consumer inflation figures, due for release on Wednesday. The data will influence BoE rate hike expectations and drive the British pound. Traders will further take cues from the final Eurozone CPI prints, which might further contribute to providing some meaningful impetus to the EUR/GBP cross.
Navigating Financial Markets: Insights on Central Bank Decisions and Currency Quotes

The Risk Mood In The Market Seemed To Weigh On The USD/TRY Prices

TeleTrade Comments TeleTrade Comments 18.10.2022 08:38
USD/TRY snaps three-day uptrend bit prints sluggish moves. CBRT revises securities maintenance ratio to 5% versus 3.0% prior. Sluggish markets, Fears of CBRT rate cut and risk-on mood restrict immediate downside. Buyers need to witness US dollar’s additional strength, backed by yields to retake control. USD/TRY prints the first intraday loss in four on the Central Bank of the Republic of Türkiye’s (CBRT) policy moves during early Tuesday morning in Europe. That said, the Turkish lira (TRY) pair drops to 18.57 by the press time. The CBRT said on Tuesday, per Reuters, that it revised the securities maintenance ratio to 5% from 3% and that further steps as part of its "liraization strategy" will be taken in the rest of the year and 2023. “It said in the statement that by the beginning of 2023 securities will be maintained based on the targets of the Turkish lira deposits share, instead of the conversion rate,” adds the news. It should be noted, however, that hopes of the CBRT’s rate cut during Thursday, to 11% from 12%, challenge the USD/TRY bears. The reason could be linked to the record inflation in Turkiye. On the other hand, US Dollar Index (DXY) renews a one-week low near 111.85. In doing so, the greenback’s gauge versus the six major currencies ignores the market’s Fed wagers as the CME’s FedWatch Tool prints a nearly 95% chance of a 75 bps Fed rate hike in November. On the same line are the upbeat comments from US Treasury Secretary Janet Yellen, suggesting a strong US jobs market, as well as upbeat US inflation expectations as per the 10-year and 5-year breakeven inflation rates per the St. Louis Federal Reserve (FRED) data. The market’s risk-on mood seemed to weigh on the USD/TRY prices amid receding fears of the UK’s market collapse. Looking forward, USD/TRY traders may witness further downside but the buyers remain hopeful ahead of the CBRT Interest Rate decision. Technical analysis A fortnight-old ascending trend line restricts the short-term downside of the USD/TRY pair around 18.50. That said, 18.80 and 19.00 could restrict short-term moves of the pair before directing the buyers towards the 20.00 psychological magnet.
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

Data From America Will Provide A Boost To The NZD/USD Pair

TeleTrade Comments TeleTrade Comments 18.10.2022 08:49
A combination of supporting factors pushes NZD/USD higher for the second straight day. Hotter-than-expected domestic consumer inflation figures boost the New Zealand dollar. A softer US bond yields, the risk-on impulse weighs on the USD and remains supportive. The NZD/USD pair hits a one-and-half-week high during the first half of trading on Tuesday, with bulls now awaiting sustained strength beyond the 0.5700 round-figure mark. A combination of factors allows the NZD/USD pair to gain strong follow-through traction for the second successive day and recover further from its lowest level since March 2020 touched last week. The New Zealand dollar gets a strong boost from hotter domestic consumer inflation figures, which smashed estimates and lifted bets for a more aggressive rate hike by the RBNZ. Apart from this, the prevalent US dollar selling bias further contributes to the ongoing positive move. In fact, the USD Index, which measures the greenback's performance against a basket of currencies, drops to over a one-week low amid a softer tone surrounding the US Treasury bond yields. Apart from this, the risk-on impulse exerts additional downward pressure on the safe-haven buck and benefits the risk-sensitive kiwi. With the latest leg up, the NZD/USD pair seems to have confirmed a bullish breakout through the 0.5650 supply zone and seems poised to appreciate further. That said, a combination of factors might hold back bulls from placing aggressive bets and keep a lid on any meaningful upside. Concerns about the economic headwinds stemming from rapidly rising borrowing costs, geopolitical risks and China's zero-COVID policy could cap the optimistic move in the markets. Furthermore, growing acceptance that the Fed will continue to hike interest rates at a faster pace should act as a tailwind for the USD. This, in turn, warrants caution for bullish traders. Market participants now look forward to the US economic docket, featuring the release of Industrial Production data and Capacity Utilization Rate later during the early North American session. This, along with the US bond yields and the broader market risk sentiment, will influence the USD price dynamics and provide some impetus to the NZD/USD pair. The focus will then turn to important macro data from China, due for release during the Asian session on Wednesday.
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

Across The Forex Board, The New Zealand Dollar (NZD) Emerges As The Strongest

TeleTrade Comments TeleTrade Comments 18.10.2022 09:20
Here is what you need to know on Tuesday, October 18: The US dollar resumes its bearish momentum on Tuesday, having lost the recovery momentum in the Asian session, as risk flows extend into the second straight day following the UK's dramatic U-turn over the tax-slashing mini-budget. The US S&P 500 futures, the risk barometer, is gaining roughly 1.70% so far while the Asian indices rally 1.20% to 1.80%, led by the rebound in the Chinese stocks. In early dealing, China’s stocks turned south after the country’s junk dollar bonds dropped to a record low, as a property market crisis sparked by a crackdown on excessive borrowing. Meanwhile, Chinese traders digested comments from US Secretary of State Antony Blinken. The US official said on Monday, China has made a decision to seize Taiwan on a “much faster timeline” than previously thought. Across the fx board, the Kiwi dollar emerges as the strongest heading into the European open, followed by its Antipodean partner, the aussie. Meanwhile, the yen pulled away from 32-year highs above 149.05 against the US dollar, dragged lower by weaker Treasury yields and Japanese verbal intervention. Top Japanese officials continued their jawboning, reiterating that they are ready to take necessary steps to avoid undesirable, as they watch the FX price action with a sense of urgency. USD/JPY was last seen trading around 148.85, consolidating the upside before the next push higher. NZD/USD surges over 1% to challenge 0.5700, as hotter New Zealand’s Q3 Consumer Price Index (CPI) ramped up bigger RBNZ rate hike expectations. NZ inflation rose by 2.2% QoQ in the third quarter, beating expectations of a 1.6% increase. Meanwhile, the annualized inflation eased from a 32-year high of 7.3% to 7.2%, although outpaced expectations of +6.6%. Hawkish comments from RBA Assistant Governor Michele Bullock and RBA minutes underpin the sentiment around the AUD/USD pair, as they suggest the need for more rate increases in the coming months. EUR/USD also capitalized on retreating Treasury yields and a renewed broad-based US dollar selling, having recaptured the 0.9850 barrier. Although bulls remain cautious ahead of the German and Eurozone ZEW sentiment surveys. Germany’s Economy Minister Robert Habeck said on Monday that “with fiscal policy in place, they can avoid deep recession in Europe without fuelling inflation.” GBP/USD is fading an uptick above 1.1400, as investors assess the Financial Times (FT) report that stated the Bank of England (BOE) is set to delay quantitative tightening (QT) worth £838bn until bond markets calm. The report comes after the new UK Chancellor Jeremy Hunt ditched almost all of the mini-budget announced by PM Liz Truss on September 23. The gains in cable appear short-lived, as PM Truss braces for political challenges, with Tory backbenchers preparing to oust her. Gold is holding its recovery momentum above the $1,650 barrier but is likely to remain in a defined range until buyers reclaim the critical $1,670 hurdle. The softer dollar keeps lending support to the metal. Bitcoin price is gradually pushing higher while above $19,500 but bulls stay cautious amid a wall fall of healthy resistance levels on a daily timeframe.
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

The USD/JPY Pair: The 150.00 Test Still Remains On The Horizon

TeleTrade Comments TeleTrade Comments 18.10.2022 09:23
Despite the current overbought conditions in USD/JPY, a test of the 150.00 still remains on the cards, note UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia. Key Quotes 24-hour view: “Yesterday, we held the view that ‘overbought advance in USD could extend above 149.00 but major resistance at 150.00 is unlikely to come into view’. USD subsequently rose to a high of 149.08. While upward momentum has improved, the advance in USD has moved deeper into overbought territory. However, as long at 147.75 is not breached (minor support is at 148.30), USD could continue to rise. That said, the major resistance at 150.00 is still unlikely to come into view (minor resistance is at 149.50).” Next 1-3 weeks: “There is not much to add to our update from yesterday (17 Oct, spot at 148.50). As highlighted, conditions are deeply overbought but further USD strength to 150.00 is not ruled out. Overall, only a breach of 147.20 (‘strong support’ level was at 146.60 yesterday) would indicate that USD is unlikely to strengthen further.”
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Fed's Hawkish Policy May Help Contain Deeper Losses On The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 18.10.2022 09:27
USD/CAD drifts lower for the second straight day and is pressured by a combination of factors. An uptick in oil prices underpins the loonie and exerts pressure amid a modest USD weakness. Aggressive Fed rate hike bets, recession fears should limit the USD downside and cap the major. The USD/CAD pair adds to the previous day's heavy losses and remains under some selling pressure for the second successive day on Tuesday. The intraday downfall drags spot prices closer to mid-1.3600s, or a one-and-half-week and is sponsored by a combination of factors. The prevalent risk-on environment - as depicted by a strong follow-through rally in the equity markets - continues to weigh on the safe-haven US dollar. Apart from this, a modest recovery in crude oil prices, bolstered by a softer buck, underpins the commodity-linked loonie and contributes to the offered tone surrounding the USD/CAD pair. That said, the prospects for a more aggressive policy tightening by the Fed should act as a tailwind for the greenback and help limit deeper losses for the USD/CAD pair, at least for the time being. In fact, the markets seem convinced that the Fed will continue to hike interest rates at a faster pace to combat stubbornly high inflation. The fed funds futures indicate a nearly 100% chance of another supersized 75 bps rate increase at the next FOMC policy meeting in November. This remains supportive of elevated US Treasury bond yields and favours the USD bulls. Apart from this, growing recession fears should cap the latest optimism in the markets and benefit the safe-haven buck. Investors remain concerned about economic headwinds stemming from rising borrowing costs, China's zero-COVID policy and geopolitical risks. Furthermore, expectations that a deeper global economic downturn will dent fuel demand should cap the black liquid. This, in turn, supports prospects for the emergence of some dip-buying around the USD/CAD pair. Market participants now look to the US economic docket, featuring the release of Industrial Production data and Capacity Utilization Rate for some impetus later during the early North American session. Traders will further take cues from oil price dynamics for short-term opportunities, though the focus will remain on the Canadian CPI report on Wednesday.
Analysis Of The USD/CNH Pair By Economist Lee Sue Ann And Markets Strategist Quek Ser Leang At UOB Group

The US Dollar To Chinese Yuan (USD/CNH) Pair Is Likely To Grow Steadily

TeleTrade Comments TeleTrade Comments 18.10.2022 09:32
UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia suggest USD/CNH needs to clear 7.2380 to allow for a sustained upside in the near term. Key Quotes 24-hour view: “Our view for USD to ‘trade with an upside bias’ did not materialize as it traded sideways within a range of 7.1903/7.2220 before closing largely unchanged at 7.2073 (-0.07%). Momentum indicators are mostly neutral and further sideway-trading would not be surprising. Today’s expected range is 7.1850/7.2200.” Next 1-3 weeks: “There is not much to add to our update from last Friday (14 Oct, spot at 7.1880). As highlighted, further USD strength is not ruled out but 7.2380 is acting as a solid resistance now and USD has to break this level before a sustained rise is likely. Overall, only a breach of 7.1500 (no change in ‘strong support’ level) would indicate that the upside risk has subsided.”
Mexico’s Central Bank Surprised Markets With A 50bps Rate Hike Once Again

Mexican Peso (MXN) Positions May Fall Further | The GBP/USD Pair Is Struggling To Gain Confidence In The Market

ING Economics ING Economics 18.10.2022 11:11
A reversal in UK fiscal policies, some stability in equity markets, and a dip in European energy prices point to a further corrective period in FX markets. The dollar could weaken a little further, but the core bull trend should remain intact In this article USD: Corrective forces may dominate short term EUR: Terms of trade go into reverse GBP: Don’t chase sterling higher MXN: Interesting carry USD: Corrective forces may dominate short term Measures of the trade-weighted dollar index are around 2.5% off their highs of the year. The correction has nothing to do with any softening of Federal Reserve tightening expectations. Here the market firmly expects the Fed to hike 75bp on 2 November and prices a terminal rate as high as 4.90% next spring. Instead, we would say three factors are behind this current dollar correction. The first is the reversal in UK fiscal policy. The much-maligned policy that garnered criticism at the IMF meetings has been largely reversed. This has brought some calm to global bond markets (Gilt instability had been dragging US Treasuries lower). Our rates strategy team does not see UK 10-year Gilt yields racing a lot further under 4.00%, though reports of the Bank of England delaying the start of its quantitative tightening Gilt sales programme should be helpful. Equally, it may be too early to expect US 10-year Treasury yields to drop back to the 3.75% or 3.50% area if the market is still searching for the top in Fed funds near 5%. The second factor is global equity markets. It is very early days, but the MSCI world equity index is now 5% above last week's lows, with the S&P 500 rallying another 2.6% yesterday. Global asset managers, positioned very underweight equities and overweight cash, could be putting money to work and are wary of the seasonal factors, where the S&P 500 index has rallied in nine of the last ten Novembers. How far the equity rally continues remains to be seen - but so far 3Q US earnings have been encouraging (only 29% of those reporting so far have missed on expected sales numbers, with only 24% missing on earnings). And the third factor is energy. European gas prices continue to sink on warmer weather and European gas storage facilities being largely full. Lower gas prices are allowing a drop in electricity prices, where German one-month forward power prices are just 50% above early June levels, compared to being three times higher in late August. The drop in energy prices is reversing the negative income shock that hit energy importers over the summer and reduces the dollar's advantage. A quiet week for US data could see the dollar correction extend a little. High beta currencies which trade on higher implied volatilities, eg AUD, NZD, NOK, SEK and possibly GBP may outperform during this period. And the case could be made for DXY heading back to 110 (another 2% drop). But a core view of not just the Fed, but other central banks hiking into a looming recession should mean that the core dollar bull trend remains intact. Chris Turner  EUR: Terms of trade go into reverse EUR/USD went under parity in late August largely driven by the negative terms of trade shock of higher energy prices. That energy shock is temporarily going into reverse as European gas prices drop sharply on the warmer weather and European governments having largely achieved their gas storage targets. It would thus be churlish of us to suggest that EUR/USD does not need to rally. A quiet week for US data (just soft US housing) and the conditions we outlined above, therefore, create a corrective window for EUR/USD, where an obvious target is the top of this year's bear channel at around the 0.9980/1.0000 area. We would assume that this continues to hold the correction.  Elsewhere today we have the German ZEW investor survey, which should continue to decline.  And we also have some ECB speakers in Gabriel Makhlouf (1540CET) and Isabel Schnabel (1900CET). The core ECB message at the moment seems to be the need to get the policy rate (deposit rate now 0.75%) as quickly as possible to 2% and then take stock from there. Chris Turner GBP: Don’t chase sterling higher As new UK Chancellor Jeremy Hunt carefully claws back all the fiscal giveaways offered in late September, the question is how far should sterling now rally? Taking the UK sovereign credit default swap as a benchmark for levels of UK fiscal anxiety, one could mark out dates around mid-September (GBP/USD at 1.15) and the third week in August (1.18) as possible targets – representing brief periods of stability before Trussonomics hits home. While there may be some more fiscal positives to come were the Conservatives to look at a windfall tax on the energy companies, we suspect cable will struggle to sustain gains over 1.15 this month. News that the UK government is shortening the period of the Energy Price Guarantee to six months from two years may not be greeted well by the consumer and also raises the prospect of UK inflation staying higher for longer. Equally, the Fed terminal rate has been priced close to 100bp higher over the last month. We think higher US real rates have contributed to the size of the sell-off in UK asset markets. There are no signs that the Fed wants to reverse this rise in real interest rates anytime soon. And one month GBP/USD implied volatility (now at 16% versus a peak near 22% in late September) may struggle to return to pre-crisis levels of 12% - confirming that trust is hard won and easily lost. Chris Turner MXN: Interesting carry Given the prospects of a brief corrective period in the dollar, interest may return to the carry trade. The highest available carry in the FX space can be found in Eastern Europe (Hungarian forint one month implied yields pay a staggering 16.5% per annum) and also the Latam currencies. However, we think Central and Eastern European FX still carries a lot of risks currently. The Mexican peso also has an attractive carry, with one-month implied yields are 10.2%. Banxico continues to move in lock-step with the Fed. Whilst investors could miss out on some larger nominal appreciation elsewhere, Mexican peso positions may have lower draw-downs if things went wrong. Spot USD/MXN could even make a run to 19.80 as well. Chris Turner Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Mexican Rate Spread: Tight vs. Central Bank's Rate Spread and Implications for Dis-inversion

The EUR/GBP Pair Has A Chance To Break Above The Steep Downward Trend Line

Saxo Bank Saxo Bank 18.10.2022 11:28
GBPUSD is once again testing long term pivot around 1.14. Seems like it has trouble breaking above.EURGBP is set to rebound from supports and has 0.90 in sight  GBPUSD is touching the Pivot at around 1.14 as mentioned in earlier analysis: https://www.home.saxo/content/articles/forex/ta-gbpusd-multi-decade-cycles-30092022  If GBPUSD breaks above 1.15 there is room up to around 1.1738. However, 55 SMA is coming down indicating underlying sentiment is declining and RSI is still below 60 threshold and must close above to reverse that. . GBPUSD slides back and RSI drops back below 40 last week’s lows at around 1.0922 is likely to be tested but lower levels are quite likely to be seen . EURGBP is bouncing off 100 SMA around 0.8571 support, now back above 55 SMA. RSI has bounced off its 40 Threshold and sentiment is still positive indicating EURGBP could rebound further from here. If EURGBP breaks above the steep falling trendline minor resistance at 0.8867 is likely to be tested.First sign of this scenario to play out is likely to be RSI breaking above its falling trendline. Keep an eye on that to occur.If EURGBP on the other hand, breaks below 0.8570 and RSI closes below 40 it is likely to reverse the scenario and EURGBP to drop further to 0.8450-0.8350. Source: https://www.home.saxo/content/articles/forex/ta-gbpusd-eurgbp-18102022
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

Stock Markets In Europe And The US Showed Marked Gains And Investors Have More Time To Recover

InstaForex Analysis InstaForex Analysis 18.10.2022 11:54
Stocks rose on Monday, primarily due to the start of the corporate reporting season. Clearly, investors are no longer focusing only on increasing interest rates, high inflation and deteriorating world economy, but also on the performance of companies. This inspires optimism in the market, which decreases negative sentiment and brings back demand for shares. Thus, the stock markets in Europe and the US showed a noticeable increase, while US treasury yields have stalled and are not going anywhere after their recent growth. For example, the yield of 10-year bonds hit 4% and so far could not consolidate above it. This, in turn, puts pressure on the dollar, prompting a rise in other currencies paired with it. Considering that there is a two-week time lag until the Fed's meeting in November, investors have more time to win back losses. This may start today, during the European session, and may extend amid positive dynamics of US stock indices. Of course, the dollar will be affected negatively, but there is still the need to buy it because there are too many factors that do not allow it to decline fully. Most likely, further aggressive rate hikes by the Fed and the presence of high demand will keep it afloat for a long time. Forecasts for today: AUD/USD The pair failed to overcome 0.6330, which reinforces the existing downward trend. If this continues, the quote will fall to 0.6220. USD/CAD The pair is testing the level of 1.3715. A rise above it could lead to a further increase to 1.3885.   Relevance up to 07:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324580
Saxo Bank Podcast: The Bank Of Japan Meeting And More

The Next Monetary Intervention By The Japanese Government Would Have To Be Much Larger Than The First One

Kenny Fisher Kenny Fisher 18.10.2022 12:39
USD/JPY has edged higher today and is currently trading at 149.17. The yen has fallen for eight straight sessions, losing 500 points in that time. Yen slide continues The yen continues to set new 24-year-old lows as the dollar/yen has pushed above the 149 line. This is a higher level than when the government intervened last month, which marked the first intervention since 1998. Officials have reacted to the yen’s latest slide with familiar verbal rhetoric. Bank of Japan Deputy Governor Masazumi Wakatabe has said that the yen’s recent fluctuations were “clearly too rapid and too one-sided”. Wakatabe added that there was no contradiction between currency intervention to prop up the yen and the BoJ’s ultra-low interest rate policy, which has been the driver of the yen’s poor performance this year. Prime Minister Kishida said on Saturday that the BoJ would have to maintain policy until wages rose, and the BoJ has not shown any signs of rethinking its policy, even with the yen sliding and inflation remaining above the central bank’s target of 2%. Japan’s core CPI rose 2.8% in August, the fifth straight month that it has exceeded the 2% level. The key question is whether the government again step in and intervene in the currency markets. The first intervention clearly didn’t achieve its desired effect of stabilizing the yen below 145 and Japan’s foreign reserves fell by a record amount in September, around 2.8 trillion yen. The game of cat-and-mouse between the government and speculators betting against the yen continues, and another currency intervention could be in the works, but it would likely have to be much larger than the first intervention in order to have a more lasting effect. . USD/JPY Technical USD/JPY faces resistance at 150.04 and 151.32 There is support at 148.85 and 147.58 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
New Zealand Dollar Lost 8.5% In September And Current Circumstances May Not Play In Favor Of NZD

New Zealand Dollar Lost 8.5% In September And Current Circumstances May Not Play In Favor Of NZD

Kenny Fisher Kenny Fisher 18.10.2022 22:09
NZD/USD was up sharply earlier in the day but has pared most of those gains. In the North American session, the New Zealand dollar is trading at 0.5663, up 0.49%. New Zealand inflation higher than expected New Zealand inflation jumped 2.2% MoM in the third quarter, higher than the estimate of 1.6%. On an annualized basis, inflation climbed 7.2% in Q3, down from 7.3% in Q2 but well above the consensus of 6.6%. Inflation remains stubbornly high and is running strong across the economy. Core inflation is not showing any signs of easing, despite the central bank’s sharp rise in interest rates, with most core inflation measures topping 6%. Domestic demand is holding up, driven by a robust labour market and firm consumer spending. Read next: JP Morgan Net Income Over $9B | Kanye West Is Buying Parler| FXMAG.COM With no indication that inflation is peaking, the Reserve Bank of New Zealand is expected to continue raising rates, perhaps as high as 5.0%, until inflation is finally brought under control. The cash rate is currently at 3.5%, and a 0.75% hike at the November meeting is a strong possibility. It will be difficult for the central bank to guide the economy to a soft landing if it continues to deliver oversize hikes, but so far the economy has shown strong resilience despite the Bank’s sharp tightening. The outlook for the New Zealand dollar does not look promising. September was a disaster for the New Zealand dollar, which plunged a staggering 8.5%. Last week, NZD/USD slipped to 0.5510, its lowest level since March 2020. The risk-sensitive currency faces significant headwinds. The escalating conflict in Ukraine, which has seen President Putin annex 15% of Ukrainian territory, a likely energy crisis in Europe this winter and a hawkish Federal Reserve are likely to continue weighing on the New Zealand dollar in the short term. NZD/USD Technical NZD/USD is testing resistance at 0.5657. Next, there is resistance at 0.5754 There is support at 0.5584 and 0.5487 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. New Zealand dollar extends rally - MarketPulseMarketPulse
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

The Price Of The AUD/USD Pair Is Moving Up, But This May Reverse

InstaForex Analysis InstaForex Analysis 19.10.2022 08:05
The first thing that is seen on the daily chart of the AUD/USD currency pair is the exit of the signal line of the Marlin Oscillator from its own descending channel. Thus, the price convergence with the oscillator has started to work. The price went above the resistance of 0.6300 and is currently trying to overcome the green line of the downward price channel. The price will likely reach the 0.6360 level (28 September low). Consolidation above the level opens a second target at 0.6439 (26 September low). But the signal line of the oscillator is already approaching the zero line. If Marlin continues to grow ahead of the price, then it will touch the zero line simultaneously with the price reaching the level of 0.6360. And here a synchronous downward reversal of the price and the oscillator can occur. On the four-hour chart, the price settled above the level of 0.6300 and above the MACD line. The Marlin Oscillator is developing in the positive area. We are following the development of the last, as expected, branch of price growth.   Relevance up to 02:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324678
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The Probability Of The GBP/USD Price Consolidation Is Higher

InstaForex Analysis InstaForex Analysis 19.10.2022 08:10
Yesterday, the British pound rolled back slightly from the resistance reached on Monday, formed by the balance (red) and MACD (blue) indicator lines on a daily timescale. Now the price is between the target level of 1.1305 and the MACD line. Accordingly, consolidating above 1.1380 will allow the price to overcome the immediate resistance at 1.1500 and continue to rise to 1.1760. Consolidating under 1.1305 opens the first and weak target at 1.1170, leaving the area under which will open the 1.0810 target. Today, it turns out, is the day we wait for the price's direction. A weak divergence has formed on the four-hour chart, which increases the likelihood of the price consolidating under the support of 1.1305. Consolidating below the level will show its intention to close the gap, that is, reaching the level of 1.1170. Consolidating above 1.1380 may extend the corrective growth to 1.1500. We are waiting for the development of events.     Relevance up to 02:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324680
The Euro To US Dollar Instrument Did Not Change In Value

The EUR/USD Pair's Price May Go Above Resistance Level

InstaForex Analysis InstaForex Analysis 19.10.2022 08:13
The euro stalled on the strong price level resistance at 0.9864 (September 6 low) in line with the daily MACD indicator line. The Marlin Oscillator is growing in the positive area, which means that the price is preparing to exit above the resistance. If this attempt turns out to be successful, then the increase may last up to 0.9950/52, the low of July 14th. In order for the price to turn towards 0.9724, it needs to overcome the cluster of peaks on October 13-14 near the level of 0.9806. The situation is similar on the lower timeframe; consolidating above 0.9864 will allow the euro to rise to the target level of 0.9950, consolidating under 0.9806 will again direct the quote in a downward direction to the target level of 0.9724.   Relevance up to 02:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324682
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

On The New York Stock Exchange, The Price Of Over 2,000 Securities Has Risen

InstaForex Analysis InstaForex Analysis 19.10.2022 08:19
At the close of the New York Stock Exchange, the Dow Jones was up 1.12%, the S&P 500 was up 1.14% and the NASDAQ Composite was up 0.90%. Salesforce Inc was the top performer among the components of the Dow Jones index today, up 6.35 points or 4.31% to close at 153.53. Quotes of American Express Company rose by 4.45 points (3.14%), closing the session at 145.99. JPMorgan Chase & Co (NYSE:JPM) rose 2.98 points or 2.57% to close at 118.84. The losers were shares of Intel Corporation, which lost 0.55 points or 2.08% to end the session at 25.87. Johnson & Johnson was up 0.58 points (0.35%) to close at 166.01, while Nike Inc was down 0.29 points (0.32%) to end at 89. 68. Leading gainers among the S&P 500 index components in today's trading were Carnival Corporation, which rose 11.28% to 8.09, Lockheed Martin Corporation, which gained 8.69% to close at 431.84, and Norwegian Cruise Line Holdings Ltd (NYSE:NCLH), which rose 8.57% to close at 14.31. The biggest losers were Moderna Inc, which shed 3.71% to close at 134.09. Shares of Hasbro Inc lost 2.88% to end the session at 65.76. Quotes of DexCom Inc decreased in price by 2.81% to 96.93. Leading gainers among the components of the NASDAQ Composite in today's trading were COMSovereign Holding Corp, which rose 170.14% to hit 0.12, Akouos Inc, which gained 88.16% to close at 13.19, and shares of Helbiz Inc, which rose by 58.07%, ending the session at around 0.42. The biggest losers were Agrify Corp, which shed 58.60% to close at 4.43. Shares of Cosmos Holdings Inc lost 47.33% and ended the session at 0.08. Quotes of Salarius Pharmaceuticals Inc decreased in price by 45.18% to 2.74. On the New York Stock Exchange, the number of securities that rose in price (2293) exceeded the number of those that closed in the red (825), while quotes of 115 shares remained virtually unchanged. On the NASDAQ stock exchange, 2441 companies rose in price, 1295 fell, and 277 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.77% to 30.50. Gold futures for December delivery lost 0.43%, or 7.10, to hit $1.00 a troy ounce. In other commodities, WTI crude for December delivery fell 2.33%, or 1.97, to $82.56 a barrel. Futures for Brent crude for December delivery fell 1.43%, or 1.31, to $90.31 a barrel. Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.20% to 0.99, while USD/JPY edged up 0.12% to hit 149.21. Futures on the USD index fell 0.02% to 111.88.   Relevance up to 03:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/297377
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The Euro (EUR) Is Trying To Start Forming A New Upward Trend

InstaForex Analysis InstaForex Analysis 19.10.2022 08:24
EUR/USD 5M The euro/dollar pair stopped its upward movement and traded sideways all day on Tuesday. Volatility has declined sharply, but a downward correction has not begun, so the pair maintains some growth prospects after it has consolidated above the descending channel. In favor of the euro's growth (although it still looks rather doubtful) is the fact that the price settled above both lines of the Ichimoku indicator. However, it is still below all the lines of the Ichimoku indicator on the 24-hour time frame, so its long-term growth prospects are still vague. A flat may even begin on the 24-hour timeframe, which will look like up/down movements of 300-400 points on the hourly timeframe. You also need to be prepared for this. There was only one report on Tuesday - on industrial production in the US - which did not provoke any market reaction. It is also not necessary to expect important events this week, as the calendar is almost empty. The 5-minute timeframe shows even better that the pair has been trading sideways all day. Exactly in the middle of this intraday horizontal channel is the level of 0.9844 and the Senkou Span B line. It was around these levels that five signals were formed at once, which is a pronounced sign of a flat. Traders could try to work out the first two of them. However, neither in the first nor in the second case did the price manage to move even 15 points in the right direction. Thus, a small loss was received, which is quite normal for a flat day. COT report: The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 3,200, while the number of shorts increased by 2,900. Accordingly, the net position decreased by about 6,100 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 38,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 19. Luis de Guindos believes that the euro/dollar pair will stabilize in the coming months. Overview of the GBP/USD pair. October 19. Liz Truss will not voluntarily step down. Forecast and trading signals for GBP/USD on October 19. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The downtrend still cannot be considered completely reversed on the hourly time frame, despite a solid rise over the past few days. However, the euro is close to trying to start forming a new upward trend. If it manages to overcome the Kijun-sen line on the 24-hour timeframe, which it has now rested on, this will significantly increase its chances for continued growth. On Wednesday, we highlight the following levels for trading - 0.9553, 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9834) and Kijun-sen lines (0.9752). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union will publish its inflation report for September on October 19, and this is the only important report of the day. Not even that important, since this is the second final value for September, and there is no doubt that we will see a value of 10.0% y/y. Thus, there may not be a reaction to this report. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 00:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324670
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The Downward Trend Of The GBP/USD Pair May Return To Formation

InstaForex Analysis InstaForex Analysis 19.10.2022 08:28
GBP/USD 5M The GBP/USD currency pair corrected down quite a lot on Tuesday, but this "strength" was only due to the pair's high volatility, which has been observed in the past few weeks. The price remained above the lines of the Ichimoku indicator at the end of the day, which means that the upward movement may resume. If in the coming days the pound goes below these lines, then we can expect a new round of decline to the level of 1.0930. In general, the pound retains good growth prospects, as it is located above the critical line on the 24-hour time frame. At the same time, one should not forget about weak geopolitical and fundamental backgrounds. There will be few macroeconomic statistics this week, but in general, these two backgrounds continue to have a devastating effect on the pound. Take note that the pair has not yet managed to reach the last high - the level of 1.1486. Yesterday, there were no important events and reports in Great Britain, and there was only a report on industrial production in the United States, to which no market reaction followed. There were few trading signals on Tuesday, but this may be for the best, since the movement was still not the best during the day. Both sell signals formed near the level of 1.1354. The first short position was closed by Stop Loss at breakeven, the second position had to be closed manually. The price after the formation of the second signal did not reach the level of 1.1212, but did not return back to 1.1354 either. Consequently, the position had to be closed in the late afternoon on its own. Profit on it could be about 30 points. COT report: The latest Commitment of Traders (COT) report on the British pound showed a new weakening of the bearish mood. During the week, the non-commercial group opened 6,900 long positions and closed 3,400 short positions. Thus, the net position of non-commercial traders increased by 10,300, which is quite a lot for the pound. One might assume that the actions of the big players and the movement of the pound are finally starting to coincide, as the pound has generally gained over the last period of net growth, but we are worried that this may be another "false alarm". The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound continues to fall in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 88,000 shorts and 49,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 19. Luis de Guindos believes that the euro/dollar pair will stabilize in the coming months. Overview of the GBP/USD pair. October 19. Liz Truss will not voluntarily step down. Forecast and trading signals for EUR/USD on October 19. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair is trying to develop an upward movement on the hourly timeframe, but so far it is not doing very well. No, the growth of the last 2-3 weeks is impressive, but it is more due to the previous collapse by the same value than the strength of the British pound. Despite the fact that the British currency has more chances than the euro, we believe that the global downward trend may resume its formation. For October 19, we highlight the following important levels: 1.0930, 1.1212, 1.1354, 1.1486, 1.1649. Senkou Span B (1.1207) and Kijun-sen (1.1224) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. The release of the inflation report is scheduled for Wednesday in the UK, which may provoke a strong market reaction. If it turns out that inflation is growing again, the reaction may be very strong. Recall that the reaction of the market to the latest report on US inflation was inadequate, that is, in different directions. Therefore, we do not undertake to predict the pair's movement after the release of British inflation. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 00:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324672
The Collapse Of The Silicon Valley Bank Weakened The Dollar And USD/JPY But Supported EUR/USD, AUD/USD, And GBP/USD

America's Macroeconomic Indicators Continue To Worsen

InstaForex Analysis InstaForex Analysis 19.10.2022 08:32
The euro and the pound sterling are trying to resist the pressure exerted by the stronger US dollar. In the last several days, both currencies managed to score some gains, which means they may well start to form the ascending section of the trend. At the same time, traders should closely monitor headlines in the media and attempt to foresee how the market might react to certain events. Alas, the events taking place in the world could potentially have any outcome. When the pandemic broke and countries started to introduce lockdowns, the whole world stopped. Almost nothing worked, except, perhaps, large enterprises and industries. Planes stopped flying, trains stopped running, people stopped traveling, and restaurants and cinemas closed. It still remains to be seen how this pandemic ends because the virus hasn't gone anywhere. Moreover, the pandemic showed people that viruses can spread fast even today when the medicine is so advanced. In 2022, a conflict in Ukraine started. Actually, it began in 2014. All those years, there were still hopes for its peaceful resolution. However, the year 2022 showed the whole world that it stands on the verge of a new world war. Today, countries openly threaten each other with nuclear weapons. In light of all those events, a recession in the United States seems unavoidable. According to Bloomberg analysts, the chance of a recession in the United States within 12 months has reached 100%. Based on the latest outlooks from large analytical agencies and banks, the American economy is expected to rise by 2% in 2022 and 0.6% in 2023. Bloomberg believes US President Biden misleads Americans, reassuring them that a recession could be avoided, and the economy is stable. Macroeconomic indicators keep deteriorating, and the economy risks collapsing. In my view, the economy won't collapse. Meanwhile, a recession is unavoidable in many countries, given the events of the last 2-3 years. A recession is also inevitable in the European Union or in the United Kingdom where Governor Andrew Bailey speaks openly about it. On the chart, the formation of the descending section of the trend continues but may end at any time. It is possible that a new impulse wave is now building up. Therefore, consider selling the instrument at around 0.9397, in line with the 423.6% Fibonacci level, when the MACD reverses to the downside. It is important to trade cautiously right now, as it is unclear how long the instrument will stay in the downtrend and whether the current wave structure transforms into the ascending one.   Relevance up to 04:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324684
Analysis Of The EUR/JPY Pair Movement

The USD/JPY Pair Has The Potential For Further Growth

InstaForex Analysis InstaForex Analysis 19.10.2022 08:41
Technical analysis: USD/JPY has been trading upside as I expected and the price is heading towards first upside objective at 150.00/ Trading recommendation: Due to the strong upside pressure and the breakout of the most recent range, I see potential for bigger growth. Watch for the potential buying opportunities on the intraday dips with the upside objectives at the price of 150 and 159 Stochastic oscillator is showing fresh bull cross, which is strong sign that buyers are in control. Key support is set at the price of 148.70   Relevance up to 06:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/297393
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

The US Dollar To Canadian Dollar (USD/CAD) Pair Will Remain On The Bear's Radar

TeleTrade Comments TeleTrade Comments 19.10.2022 08:51
USD/CAD struggles to extend the recovery from two-week low, grinds near intraday top. US readiness to use SPR to battle OPEC+ supply cuts weighs on oil prices. Sluggish markets restrict immediate moves but firmer yields tease DXY buyers. With the BOC’s likely softer rate hike than the Fed’s the pair buyers remain hopeful. USD/CAD steadies near 1.3750 amid sluggish markets during Wednesday’s European morning. In doing so, the Loonie pair seesaws around intraday high while trying to stretch the previous day’s rebound. The quote’s resistance to decline could be linked to the latest retreat in oil prices, due to Canada’s reliance on WTI crude oil export, as the US eyes releasing more oil from its Strategic Petroleum Reserve (SPR) to battle the OPEC+ supply cut. WTI crude oil remains mildly bid at the fortnight low marked the previous day, retreating to around $83.70 at the latest. On the other hand, the US Dollar Index (DXY) picks up bids while tracking the recently firmer US Treasury yields. That said, the US 10-year Treasury yields added two basis points (bps) near 4.02% mark at the latest. The market’s inaction could be linked to the lack of major data/events, as well as mixed catalysts surrounding China and Russia. That said, the recently mixed covid numbers from China join Russia’s strong fight in Ukraine to challenge the sentiment. However, upbeat earnings and hopes of more stimulus from Beijing, Tokyo and the Eurozone keep the riskier assets firmer. On the same line could be the UK’s optimism due to the recent U-turn from the fiscal policies. Elsewhere, Fed bets and the comments suggesting heavy rate hikes from the US central bankers underpin the US Treasury yields and the DXY of late. Earlier in the day, Minneapolis Federal Reserve Bank President Neel Kashkari said, “Until I see some compelling evidence that core inflation has at least peaked, not ready to declare a pause in rate hikes.” With this, the CME’s FedWatch Tool signals that markets are pricing in a nearly 95% chance of the Fed’s 75 rate hike in November. It’s worth noting that the latest second-tier data from the US and Canada have been mixed but the Bank of Canada (BOC) and the Fed have both shown readiness to battle inflation and increase the benchmark rates. Even so, the hawkish pace at the Fed is much stronger than the BOC and hence the USD/CAD pair is likely to witness further upside if today’s Canadian Consumer Price Index (CPI) eases. Forecasts suggest the CPI ease to 6.8% from 7.0% prior while the closely watched BOC CPI could also decline to 5.8% YoY versus 5.6% previous readings. Technical analysis Given the bearish MACD signals and the confirmation of the five-week-old rising wedge formation on Monday, USD/CAD is likely to remain on the bear’s radar unless it successfully crosses the 1.3850 immediate hurdle comprising the wedge’s lower line.
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The Euro To British Pound Pair (EUR/GBP) Are Not Targeting The Bulls

TeleTrade Comments TeleTrade Comments 19.10.2022 08:56
EUR/GBP steps back from weekly top, grinds lower of late. Bearish MACD signals, steady RSI favors the sellers. Ascending trend line from August, 100-DMA restricts immediate downside. EUR/GBP holds lower ground near 0.8690 as traders keenly await inflation data from the UK and Eurozone heading into Wednesday’s European session. In doing so, the cross-currency pair takes a U-turn from the downward-sloping resistance line from September 26, around 0.8710 by the press time. In addition to the immediate trend line resistance, the bearish MACD signals and the steady RSI keeps EUR/GBP bears hopeful. However, the 2.5-month-long upwards-sloping support line, near 0.8690, appears a tough nut to crack for the pair sellers. Additionally, the 100-DMA support of 0.8585 also acts as the last defense of the EUR/GBP buyers, a break of which could drag the quote towards September’s low near 0.8565. On the contrary, an upside break of the 0.8710 trend line resistance isn’t an open invitation to the EUR/GBP bulls as the 21-DMA level of 0.8775 also acts as a short-term resistance. Should the pair remains firmer past 0.8775, the monthly high near 0.8865 and the 0.8900 threshold could challenge the pair buyers. Overall, EUR/GBP remains on the bear’s radar but the downside remains elusive until the quote stays beyond .8585. EUR/GBP: Daily chart Trend: Further weakness expected
Traders assume interest rates in Japan and Switzerland could steadily go up next year

The US Dollar To Swiss Franc (USD/CHF) Pair Can Lean Towards The Bulls

TeleTrade Comments TeleTrade Comments 19.10.2022 09:07
USD/CHF edges higher on Wednesday amid a modest pickup in the USD demand. Hawkish Fed expectations, elevated US bond yields act as a tailwind for the buck. The risk-on mood undermines the safe-haven CHF and offers support to the pair. The USD/CHF pair attracts some buying near the 0.9925-0.9930 area on Wednesday and moves away from a one-week low touched the previous day. The pair is currently trading around the mid-0.9900s, though the modest intraday uptick lacks bullish conviction. The prospects for a more aggressive policy tightening by the Fed assist the US dollar to regain some positive traction, which, in turn, is seen offering some support to the USD/CHF pair. The markets seem convinced that the Fed will continue to hike interest rates at a faster pace to tame inflation and have now priced in a nearly 100% chance of another supersized 75 bps increase in November. The bets were reaffirmed by hotter US consumer inflation figures released last week and the recent hawkish remarks by several Fed officials. This remains supportive of elevated US Treasury bond yields and continues to act as a tailwind for the greenback. In fact, the yield on the rate-sensitive 2-year US government bond and the benchmark 10-year Treasury note stand tall near a multi-year peak. Apart from this, the prevalent risk-on environment - as depicted by the follow-through rally in the equity markets - undermines the safe-haven Swiss francs and acts as a tailwind for the USD/CHF pair. Despite the supporting factors, spot prices, so far, have struggled to gain any meaningful traction. This, in turn, warrants some caution before positioning for any further appreciating move. Nevertheless, the fundamental backdrop seems tilted in favour of bullish traders and suggests that the path of least resistance for the USD/CHF pair is to the upside. Traders now look to the US housing market data - Building Permits and Housing Starts - for a fresh impetus. This, along with the US bond yields, will drive the USD demand and produce short-term opportunities around the USD/CHF pair.
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

Warnings From Japanese Officials About The Intervention Kept Investors Aside

TeleTrade Comments TeleTrade Comments 19.10.2022 09:18
EUR/JPY has pursued consolidation ahead of possible BOJ intervention. Japan officials have warned risks of deflation due to global demand shock. According to a Reuters poll, the ECB is set to announce a 75 bps rate next week. The EUR/JPY pair is hanging around 147.00 after a mild correction from a fresh seven-year high at 147.25. The asset is expected to pursue a rangebound structure as investors are awaiting fresh developments on the Bank of Japan (BOJ)’s intervention plans in the currency market to support yen against speculative forex moves. Continuous warnings from Japan’s officials of potential intervention have kept investors on the sidelines as the supportive move for Japan will trigger volatility in the yen-linked FX pair. Chatters over possible BOJ’s intervention heated after the Japanese yen fell to its record lows near 150.00 against the dollar in the past 32 years. On Wednesday, Japan’s Finance Minister Shunichi Suzuki, and BOJ’s Governor Haruhiko Kuroda crossed wires, citing that Japan's economy is vulnerable to external demand shock, which could tip it back to deflation. This clears the fact that the concept of policy tightening is far from thought. This week, Japan’s Consumer Price Index (CPI) data will remain in the spotlight. As per the projections, the headline CPI could move to 3.1% vs. the prior release of 3.0%. While the core CPI could accelerate to 2% against the former print of 1.6%. On the Eurozone front, the odds for a bigger rate hike by the European Central Bank (ECB) are skyrocketing. A Reuters poll on ECB’s rate hike extent states that ECB President Christine Lagarde will step up the interest rates by 75 basis points (bps) on October 27. As the European Harmonized Index of Consumer Prices (HICP) is trading at 5x than the targeted rate of 2%, efficiency in policy tightening is highly required.
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

UK Ministers Are Losing Their Confidence In The Leadership Style Of Liz Truss

TeleTrade Comments TeleTrade Comments 19.10.2022 09:29
GBP/JPY has slipped strongly to near 168.54 on higher-than-projected UK inflation data. The headline and core CPI figures have elevated by 10 bps than estimates to 10.1% and 6.5% respectively. Japanese yen could face more pressure post the growing risk of deflation due to external demand shock. The GBP/JPY pair has declined to near 168.54 as the UK Office for National Statistics has reported the headline Consumer Price Index (CPI) at 10.1%, higher than the expectations of 10% and the prior release of 9.9%. Also, the core CPI has escalated to 6.5% than the projections of 6.4% and the former figure of 6.3%. A headline CPI has recaptured the double-digit figure again, the Bank of England (BOE) policymakers could sound extremely hawkish, going forward. It is worth noting that the BOE escalated its interest rates by 50 basis points (bps) to 2.25% in its September monetary policy meeting. On Tuesday, the BOE announced that it will start its delayed gilt sale operation from the first day of November. The operation was delayed by the central bank citing financial instability. The move will trigger liquidity squeezing from the market. Meanwhile, UK political affairs are becoming vulnerable further as UK ministers are losing their confidence in the leadership style of UK PM Liz Truss. A YouGov poll of Tory members found that 55% would now vote for Rishi Sunak, who lost out to Ms. Truss if they were able to vote again, while just 25% would vote for Ms. Truss. On the Tokyo front, investors have shifted to the sidelines amid anxiety over a possible Bank of Japan (BOJ)’s intervention in the currency markets to safeguard yen against speculative FX moves. Apart from that Japan’s officials have cited the risk of deflation due to global demand shocks. The situation of deflation would force the BOJ to release more liquidity into the economy.
The AUD/USD Pair’s Downside Remains Off The Table

Recent Macroeconomic Events Are Significantly Affecting The Price Of The AUD/USD Pair

TeleTrade Comments TeleTrade Comments 19.10.2022 09:35
AUD/USD takes offers to renew intraday low, print the first daily loss in three. Market sentiment roils as economic calendar gets active. Four-month high covid numbers from China, hawkish Fed bets favor bears. Risk catalysts are important ahead of Thursday’s Aussie jobs report. AUD/USD takes offers to renew intraday low around 0.6300 as markets fade the previous risk-on mood during early Wednesday in Europe. Also exerting downside pressure on the risk-barometer pair could be the firmer US Treasury yields and anxiety ahead of Thursday’s Australian employment data for September. The US 10-year Treasury yields added six basis points (bps) near 4.06% mark at the latest. In doing so, the US bond coupons rush towards the 14-year high marked earlier in the week amid hawkish Fedspeak and mixed US data. Earlier in the day, Minneapolis Federal Reserve Bank President Neel Kashkari said, “Until I see some compelling evidence that core inflation has at least peaked, not ready to declare a pause in rate hikes.” With this, the CME’s FedWatch Tool signals that markets are pricing in a nearly 95% chance of the Fed’s 75 rate hike in November. That said, US Industrial Production for September improved but the NAHB Housing Market Index for October dropped, respectively around 0.4% MoM and 38 versus the market expectations of 0.1% and 43 in that order. Other than the Fed-linked catalysts, increasing covid woes in China and the market’s rush towards risk-safety amid higher inflation data from the major economies, recently by the UK, also propel the US Treasury yields and weigh on the AUD/USD prices. Additionally, Russia’s strong fight in Ukraine joins the political pessimism in the UK to exert additional downside pressure on the market’s previously positive mood and favor the Aussie pair sellers. It should be noted, however, that the firmer equities and cautious mood ahead of Thursday’s Australia jobs report for September put a floor under the AUD/USD prices. That said, the headline Aussie Employment Change is expected to ease to 25K versus 33.5K prior while the Unemployment Rate may remain unchanged at 3.5%. Should the scheduled Aussie job numbers match downbeat forecasts, the recently mixed comments from the Reserve Bank of Australia (RBA) could push back the hawks and please sellers. Technical analysis Failure to provide a daily closing beyond the 10-DMA hurdle around 0.6300 keeps the AUD/USD bears hopeful inside a six-week-old bearish channel, currently between 0.6345 and 0.6090.
TRY: Central Bank set to deliver significant rate hike today

The Turkish Central Bank Meeting Is Not Expected To Affect The Turkish Lira (TRY)

TeleTrade Comments TeleTrade Comments 19.10.2022 09:40
Economists at Credit Suisse still think the central bank will sell from its reserves in order to prevent excess lira weakness. They stick to an end-year target of 20.00 for USD/TRY. Another rate cut is expected “The Turkish central bank is widely expected to deliver a third consecutive policy rate cut tomorrow (20 October). We do not expect a lasting impact on the lira from tomorrow’s meeting.” “Our core view remains that the central bank will sell from its reserves in order to prevent excess lira weakness amid rising funding pressures from the balance of payments in coming months.” “We stick to an end-year target of 20.00 for USD/TRY.”
The Australian Market Has Seen Growth | Mercedes-Benz Launches New EV

The Australian Market Has Seen Growth | Mercedes-Benz Launches New EV

Saxo Bank Saxo Bank 19.10.2022 09:48
Summary:  Better-than-expected corporate results boosted US stocks for the second day. Afterhours Netflix shares rose 14% on reporting better than expected results. Oil prices fell 3% with the US said to release more strategic petroleum reserves on supply concerns. Gold advanced. Floods hampered commodity production numbers in Australia. RBA notes loan arrears and insolvencies are rising. Mercedes-Benz launched new EV models that rival Tesla’s Model Y. Rio Tinto sees lithium tightness. What’s happening in markets?   The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) indices rally for the second day  US stocks extended their gains in choppy trading, with the S&P500 gaining 1.1% and now up 3.8% in two days after continuing to rebound from nearly oversold levels, before closing at 3,719.98 points (its highest level in 8-days) on better-than-expected corporate results. All 11 sectors of the S&P500 gained, with Industrial, Materials, Utilities, and Financials leading. Defense giant, Lockheed Martin (LMT:xnys) shares gained the most since 2020, up 8.7% after its earnings per share topped estimates. Goldman Sachs (GS:xnys) rose over 2%, with stronger trading results helping the investment bank beat quarterly earnings and revenue expectations. Goldman’s results continued a strong stretch of bank earnings, including beats from Bank of America (BAC:xnys) and Bank of New York Mellon (BK:xnys) on Monday, with the financial sector outperforming on Tuesday. Meanwhile, Afterhours, Netflix (NFLX:xnas) shares rose 14% after reporting better than expected results, adding 2.4 million customers in the 3Q, beating expectations. The rally was also supported by the Bank of England calming nerves saying, the funds whose vulnerabilities also fueled the rout in UK markets have now raised tens of billions of pounds in capital, and as such are on a more sustainable footing. U.S. treasury (TLT:xnas, IEF:xnas, SHY:xnas) ended Tuesday little changed Treasuries finished a choppy session with yields largely staying near the levels from the day before. The 2-year yield was 1bp richer at 4.43% and the 10-year yield was unchanged at 4%. U.S. economic data were mixed with stronger industrial production in September but a below-expectation read in the NAHB Housing Market Index. Contrary to a Financial Times report suggesting the Bank of England would delay its quantitative tightening program, the U.K. central bank announced later in the day that it will start bond sales on Nov 1 but not including long-dated bonds initially. Australia’s ASX200 (ASXSP200.1) rises 0.3%, with lithium stocks charging, while energy companies retreat after the oil price fell 3%. The Australian share market trades 0.3% higher on Wednesday (1.5 hours into the seesion) with lithium stocks like Pilbara Minerals, (PLS), Allkem (AKE) up over 3% (for more on lithium see below). Meanwhile, the energy sector is capping broad market gains, with selling in oil stocks taking the energy sector down 1.6% after the oil price fell 3.1% to $82.82, with the US said to release emergency crude on supply concerns. Meanwhile losses in oil stocks are somewhat limited with OPEC+ members defending their supply cuts, saying they are justified by the growing risk of a global recession. Woodside (WDS) trades 1.7% down. Beach Energy (BPT) is down the most in the sector, 4.6%, after reporting production dropped amid flooding. The best performing stock on the ASX this year, Whitehaven (WHC) trades 2.2% lower today after announcing production fell 37% last quarter, with total equity sales down 32% compared the June quarter. Whitehaven Coal’s CEO said he sees demand for high quality coal continuing to outstrip global supply, which will likely continue to support coal prices. The coal price has fallen 3% this month, and is now down 15% from its all-time high. Meanwhile, gold stocks are also in focus after Gold prices steadied after the US dollar continued to fall. However St Barbara (SBM) shares are 6.2% lower after the miner cut its gold output forecast for the year, which disappointed analysts. Hong Kong’s Hang Seng (HSIV2) China’s CSI300 (03188:xhkg) Hong Kong stocks rallied, with Hang Seng rising 1.8%, following the move higher in U.S. equity index futures on reports that the Bank of England was delaying its quantitative tightening due to start at the end of October. The Bank of England denied the story later. HSBC (00005:xhkg) and Standard Chartered (02888:xhkg) gained more than 2.5%. BYD (01211:xhkg) surged 6.4% after the leading EV maker said its Q3 profit was set to rise as much as 365% Y/Y, lifting most other EV makers 3%-5% higher in share prices as well. Healthcare names surged again, with Ali Health (00241:xhkg) up 9.4%, Hansoh Pharmaceutical (03692:xhkg) up 5.9%, CSPC Pharmaceutical (01093:xhkg) up 4.5%, Sino Biopharmaceutical (01177:xhkg) up 4% and some biotech stocks soared more than 10%. Chinese airlines stocks gained from 2% to 3% after some Chinese airlines, including China Eastern Airlines and China Southern Airlines, announced the resumption of some more international flights. CSI300 ended a choppy session losing 0.2%. USDJPY climbed to 149.37, the highest level since 1990, and oil price fell to USD83.70 The Yen weekend to 149.37 with the 150 figure in sight. EURUSD, at 0.9850, and GBPUSD, at 1.1330 were little changed from Monday. NZDUSD was the notable outperformer among the G10 currencies, rising to 0.5690 while USDCAD underperformed as oil prices slumped, WTI crude fell 2% to USD83.70 on the report that the Biden administration has approved to release of more strategic petroleum reserves. What to consider? Stronger-than-expected industrial production but a softer NAHB Housing Index U.S. September industrial production came in at +0.4% M/M, (vs consensus: 0.1%, Aug: -0.1% revised) and capacity utilization increased 0.2pp to 80.3%. NAHB Housing Market Index fell to 38, below 43 expected and 46 in August. RBA sounds alarm that rate hikes could soon pause with loan arrears and insolvencies rising The Aussie dollar rose for the 3rd day after the after the USD continued to lose strength when the UK re winded some tax cuts. However, the outlook for the Australian dollar against the US remains restricted, with the RBA noting loan arrears and insolvencies have picked up in Australia. Yesterday's RBA Meeting Minutes highlighted the RBA has little room to rise rates, without compromising the health of the economy. The RBA was only able to raise rates by 0.25% this month, as business insolvencies had picked up, plus a low level of loan arrears were seen, while housing loan commitments declined -  ‘demonstrating the effect of high interest rates on housing’. Lithium sector news; Mercedes-Benz launches new EV that rivals Tesla’s Model Y. Rio Tinto sees lithium tightness Mercedes-Benz (MBR) broadened its electric vehicle range on the eve of the Paris car show; unveiling a new sporty vehicle that’s US$4,300 cheaper than Tesla’s Model Y, with Mercedes selling the EQE SUV later this year for US$68,000. The new sporty EV Merc also has a 590 kilometres range, means it travels 76 kilometres more than Tesla’s Y Model. Mercedes also plans to offer EV versions of all of its vehicles by the end of this year. And aims to only sell EVs by 2030, particularly in markets phasing out fuel engines. Also in Lithium news yesterday, Rio Tinto (RIO) said the lithium market is experiencing tightness, while demand continues to strengthen from government policies, and EV producers rolling out new models. Lithium carbonate prices remained elevated in the quarter after Power rationing in China’s Sichuan province (a key lithium supply hub) also led to production cuts. Also, Australia’s biggest pure play lithium company Pilbara Minerals (PLS) sold spodumene concentrate at a new record high price, equating to $7,830 a ton.     For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-19-oct-19102022
Kuroda Stayed On The Sidelines And The Yen Responded With Losses

Investors Are Not Afraid Of A Second Japanese Intervention

InstaForex Analysis InstaForex Analysis 19.10.2022 12:02
JPY continues to slowly but surely fall in price against the USD. The risk of intervention keeps the dollar bulls from sharp movements so far, but soon the yen may be in the epicenter of a hellish funnel. The dollar is pushing Since January, the yen has fallen against the US currency by more than 23%. The reason for such a sharp drop lies on the surface: the Bank of Japan remains true to the dovish policy, and the Federal Reserve has taken an active hawkish stance this year. To curb the record high inflation that hit America, the Fed has already held 5 rounds of interest rate hikes since March. Moreover, the indicator was raised by 75 bps three times. In light of the latest higher-than-expected US inflation data, the market expects the central bank to announce another 75 bps rate hike in November. The probability of such a scenario is estimated by traders at almost 100%. This provides strong support for the greenback, especially when paired with the yen. The Japanese currency looks very hurt right now, as it feels additional pressure from the BOJ. The head of the BOJ literally drowns the yen every day with his marginal comments. This happened yesterday as well. BOJ Governor Haruhiko Kuroda once again confirmed his determination to stick to an ultra-soft policy, despite the total tightening trend. He stressed that the central bank will maintain its status quo until the nature of inflation in the country becomes stable. The combination of hawkish sentiment from the Fed and dovish statements from the BOJ pushed the USD/JPY pair to a new record. On Wednesday night, the dollar tested another 32-year high against the yen at 149.395. Japan clenching its fists The main goal for dollar bulls right now is the key mark of 150. However, as we approach it, the risk of foreign exchange intervention by the Japanese authorities increases significantly. Not a day goes by without Japan accusing speculators of overshooting the yen and threatening them with re-intervention in the market. Recall that in September, the Japanese government for the first time in 24 years decided to support its national currency and carried out a large-scale intervention. Some analysts believe that fear of a repeat of this scenario is keeping dollar bulls from hitting the psychologically important 150 threshold. According to many traders, the red line is at this level. However, the Japanese authorities have repeatedly stated that they will be forced to press the button not by any specific mark, but by the rapid fall of the yen. Be that as it may, the 150 barrier still remains unassailable for bulls on the USD/JPY pair. And there is one curious opinion why this happens. Currency strategists at Bloomberg suggest that it is not at all the caution of investors who fear repeated intervention. The reason for this is the covert interventions that Japan is already carrying out with might and main. Experts were prompted to such an idea by sudden surges in the strengthening of the yen, which have already been noted twice in the past few days. For example, yesterday the JPY showed a slight recovery for no particular reason. Analysts believe that this was the result of the intervention. Recall that last month Japan's Vice Minister of Finance for International Affairs Masato Kanda warned of possible covert interventions. Such a move usually involves intervention in the market on a smaller scale, which is difficult to detect. USD can no longer be contained Hidden or officially recognized, insignificant or as large as last time, any intervention from Japan is no longer able to change the downward trend in the yen. Traders are well aware of the strong bilateral support the dollar currently has against the Japanese currency: the BOJ continues to go dovish, and the Fed may well accelerate even more on its hawkish path. That is why many analysts do not even doubt that in the next few days the USD/JPY pair will finally break through the resistance at around 150. And as we approach the Fed's November meeting, the asset is likely to open a new breath. If the market's hawkish expectations rise, the yen risks entering another tailspin.   Relevance up to 07:00 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324712
All Eyes On Capitol Hill, Jerome Powell Will Appear Before The Senate Banking Committee

A Reversal Of The Situation In The Markets May Take Place When The Fed Stops Raising Rates

InstaForex Analysis InstaForex Analysis 19.10.2022 12:10
The dollar's correction due to the growth of risk appetite is unlikely to last for a long time, as today the mood in the investor environment is dejected, and the US currency index turned up from weekly lows. The index rose above 112.00 on Wednesday amid expectations that the Federal Reserve will continue to implement its aggressive plans to tighten measures to reduce inflation. Minneapolis Fed President Neel Kashkari's latest commentary suggests that interest rates may need to be raised above 4.75% if core inflation continues to pick up. The dollar also continues to prevail as a safe haven currency amid deteriorating global growth prospects. Earlier this week, it came under pressure, including amid solid earnings reports and a sharp turn in UK fiscal policy. The US currency remains stable against the euro and the pound, while a new high has been updated against the yen. The Japanese currency will fall to 32-year lows, despite the possibility of intervention from Japan. However, today the Japanese central bank once again made it clear that it is not worth waiting for monetary support. According to Bank of Japan Governor Haruhiko Kuroda, monetary policy is not directed directly at Forex. "It is advisable to maintain easing to support the economic recovery, as the uncertainty around the Japanese economy is extremely high," the official said. At the same time, he made it clear that intervention against "excessive weakening of the yen was very appropriate." As for other world currencies, the dollar weakened against the New Zealand and Australian counterparts. It is expected that the central banks of their countries will keep pace with the cycle of tightening the Federal Reserve's policy. The Fed's attitude Forecasts regarding the threshold of the US central bank rate hike vary. The increase, according to available estimates, can reach up to 5%, but this is not the limit. Judging by the new information that has appeared on the web, the rate hike may reach up to 9%, it all depends on how the inflation card will fall. Someone sees the peak of inflation. Perhaps there are reasons to believe so, perhaps this is just a reflection of a great desire. Anyway, we'll find out about it soon. Wall Street and the dollar index are now trading in line with expectations of a 1.5% rate hike. If inflationary pressure does not stop and price growth continues to go up, the Fed will have to raise the bar. At the moment, a number of indicators, including Bloomberg Commodity Spot Index, indicate the passage of an inflationary peak. If so, then the dollar has no reason to conquer new heights. Given that the markets live by expectations, there may be a pullback of the US currency index from the current borders altogether, as investors will decide to bet on a more dovish approach of the Fed. Rate hike to 9% The new monthly report of Bank of America reflected the complete pessimism of investors regarding the prospects of the stock market and the growth of the global economy. A record number of respondents (83%) expect economic growth to weaken and corporate profits to fall in the next 12 months. The lion's share of market professionals are set to continue the decline in stocks. It will be possible to talk about reaching the bottom only within the framework of 2023. All short rallies have been and will be held on Wall Street exclusively in the bear market. The reversal of the currency and stock markets will occur only when the Fed refuses to raise rates further or, at least, slows down their increase. The increase in interest rates to 9% was announced by the well-known investor Mark Mobius. This is the highest level in three decades. The US central bank will have to take such a step, because it needs to stop the record rise in consumer prices for 40 years, the investor believes. It is advisable to raise the rate higher than the current inflation. Since it currently stands at 8%, the rate should be 9%, the billionaire explained in an interview with Bloomberg. He also made it clear that he does not expect a decrease in inflation in the coming months.   Relevance up to 08:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324720
All Eyes On Capitol Hill, Jerome Powell Will Appear Before The Senate Banking Committee

A Reversal Of The Situation In The Markets May Take Place When The Fed Stops Raising Rates - 19.10.2022

InstaForex Analysis InstaForex Analysis 19.10.2022 12:10
The dollar's correction due to the growth of risk appetite is unlikely to last for a long time, as today the mood in the investor environment is dejected, and the US currency index turned up from weekly lows. The index rose above 112.00 on Wednesday amid expectations that the Federal Reserve will continue to implement its aggressive plans to tighten measures to reduce inflation. Minneapolis Fed President Neel Kashkari's latest commentary suggests that interest rates may need to be raised above 4.75% if core inflation continues to pick up. The dollar also continues to prevail as a safe haven currency amid deteriorating global growth prospects. Earlier this week, it came under pressure, including amid solid earnings reports and a sharp turn in UK fiscal policy. The US currency remains stable against the euro and the pound, while a new high has been updated against the yen. The Japanese currency will fall to 32-year lows, despite the possibility of intervention from Japan. However, today the Japanese central bank once again made it clear that it is not worth waiting for monetary support. According to Bank of Japan Governor Haruhiko Kuroda, monetary policy is not directed directly at Forex. "It is advisable to maintain easing to support the economic recovery, as the uncertainty around the Japanese economy is extremely high," the official said. At the same time, he made it clear that intervention against "excessive weakening of the yen was very appropriate." As for other world currencies, the dollar weakened against the New Zealand and Australian counterparts. It is expected that the central banks of their countries will keep pace with the cycle of tightening the Federal Reserve's policy. The Fed's attitude Forecasts regarding the threshold of the US central bank rate hike vary. The increase, according to available estimates, can reach up to 5%, but this is not the limit. Judging by the new information that has appeared on the web, the rate hike may reach up to 9%, it all depends on how the inflation card will fall. Someone sees the peak of inflation. Perhaps there are reasons to believe so, perhaps this is just a reflection of a great desire. Anyway, we'll find out about it soon. Wall Street and the dollar index are now trading in line with expectations of a 1.5% rate hike. If inflationary pressure does not stop and price growth continues to go up, the Fed will have to raise the bar. At the moment, a number of indicators, including Bloomberg Commodity Spot Index, indicate the passage of an inflationary peak. If so, then the dollar has no reason to conquer new heights. Given that the markets live by expectations, there may be a pullback of the US currency index from the current borders altogether, as investors will decide to bet on a more dovish approach of the Fed. Rate hike to 9% The new monthly report of Bank of America reflected the complete pessimism of investors regarding the prospects of the stock market and the growth of the global economy. A record number of respondents (83%) expect economic growth to weaken and corporate profits to fall in the next 12 months. The lion's share of market professionals are set to continue the decline in stocks. It will be possible to talk about reaching the bottom only within the framework of 2023. All short rallies have been and will be held on Wall Street exclusively in the bear market. The reversal of the currency and stock markets will occur only when the Fed refuses to raise rates further or, at least, slows down their increase. The increase in interest rates to 9% was announced by the well-known investor Mark Mobius. This is the highest level in three decades. The US central bank will have to take such a step, because it needs to stop the record rise in consumer prices for 40 years, the investor believes. It is advisable to raise the rate higher than the current inflation. Since it currently stands at 8%, the rate should be 9%, the billionaire explained in an interview with Bloomberg. He also made it clear that he does not expect a decrease in inflation in the coming months.   Relevance up to 08:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324720
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

The Fed Is Not Ready To Pause In Raising Interest Rates

InstaForex Analysis InstaForex Analysis 19.10.2022 12:17
The dollar remains strong despite the recent rally in stock markets. The reason is the continued pressure from rising treasury yields, as well as the talks of an impending global recession. This morning, the yield of 10-year bonds exceeded 4%, and Fed members continuously hint at a further aggressive rate hike aimed at curb inflation. Yesterday, Minneapolis Fed President Neel Kashkari said the Fed is not ready to announce a pause in raising interest rates as inflation is still high and there are no clear signals that it is ready to decrease. Atlanta Fed President Raphael Bostic echoed this, adding that inflation needs to be brought under control. Existing factors that support dollar also remain effective, which means that pressure will most likely ease. Locally, there may be a price decrease amid rising risk appetite, but in the long term the scenario will be in favor of the US currency. A decline will also be perceived by market players as an invitation to purchases on the eve of the Fed meeting, and even more so after the central bank raises rates by another 0.75%. The upcoming consumer inflation report in the Euro area, which is expected to show growth to 10% y/y/ and 1.2% m/m, may tempt traders to buy euro, but the existing economic problems in the region, aggravated by the geopolitical crisis in Ukraine, will put downward pressure on the currency. Thus, after a slight rebound, EUR/USD should be sold again. Forecasts for today: EUR/USD The pair is trading above the level of 0.9820. Decline and consolidation below this mark may lead to a fall to 0.9720 GBP/USD The pair has not been able to consolidate above the level of 1.1370. This may lead to a decline to 1.1135.   Relevance up to 06:00 2022-10-21 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324698
UK Budget: Short-term positives to be met with medium-term caution

Some Excessive Rate Hikes Are Looming In The United Kingdom

Kenny Fisher Kenny Fisher 19.10.2022 12:32
GBP/USD is in negative territory today. In the European session, the pound is trading at 1.1261, down 0.48%. Inflation rises to double-digits UK inflation rose to 10.1% in September, up from 9.9% in August and above the consensus of 10.0%. It was a similar story from Core CPI, which edged up to 6.5%, up from 6.4% and higher than the forecast of 6.3%. A return to double-digit inflation is certainly not something the Bank of England wanted to see. Inflation is not showing any signs of peaking, which leaves no doubt that the BoE will have to continue to raise interest rates. The cash rate remains relatively low at 2.25% in comparison with the Federal Reserve (3.25%) and other major central banks. The cash rate will likely hit 4% or even higher by mid-2023, which means some oversize rate hikes are on the way. The BoE meets next on November 3rd and policy makers will need to deliver a hike of 0.75% or a full point in order to maintain credibility. The recent political maelstrom, in which Chancellor Hunt has abolished most of the planned tax cuts and signalled spending cuts instead, means that the BoE may not have to act as aggressively as anticipated just a few weeks ago. A key point in the fiscal U-turn provided by Hunt is the energy cap plan. The cap, which was supposed to remain in place for two years, has been scaled down to just six months. Higher energy bills for households will mean higher inflation unless energy falls substantially in the winter. The economic outlook for the UK does not look all that bright, which will likely be reflected in a weaker British pound. Goldman Sachs has downgraded its UK growth outlook, with the economy expected to decline by 1% in 2023, worse than the previous estimate of -0.4%. . GBP/USD Technical GBP/USD faces resistance at 1.1373 and 1.1455 There is support at 1.1214 and 1.1085 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Collapse of Black Sea Grain Initiative Rattles Market: Impact on Ukrainian Grain Exports

The USD/ZAR Pair Has A Chance Of Making Another Move Up And Reaching Level Of 19.00

TeleTrade Comments TeleTrade Comments 19.10.2022 12:49
The USD/ZAR pair formed an intermittent high near 18.50 recently. A break above the latter could clear the way towards the 19.20/35 area, in the view of economists at Société Générale. The 17.55/17.30 area should be an important support zone “The 50-Day Moving Average (DMA) near 17.55/17.30 should be an important support zone. Defending this can lead to the next leg of up move.”  “A cross above 18.50 can take the pair towards 18.80 and perhaps even towards 2020 high of 19.20/19.35.”
FX Talking: The Dollar's Break Point Signals Lower US Inflation and Favorable Environment for Pro-Cyclical Currencies

Podcast: The Weakening Of Japanese Yen (JPY) And Chinese Yuan (CNH) | Tesla's Earnings On The Radar

Saxo Bank Saxo Bank 19.10.2022 13:03
Summary:  Today we look at another choppy US equity market session, with a fresh rally attempt in late trading on far better than expected Netflix results and guidance. That rally is unlikely to persist as long as US treasury yields continue to set new highs for the cycle, as they did briefly this morning. The very weak JPY and fresh CNH weakness are key topics in FX as we also look at the key earnings coming up on our radar, especially Tesla. This and much more on today's pod, which features Peter Garnry on equities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-oct-19-2022-19102022
Reserve Bank of New Zealand: Kenny Fisher says he expects a 25bp rate hike on May 24th

The Kiwi Market (NZD/USD) Is Seeing A Recovery

TeleTrade Comments TeleTrade Comments 19.10.2022 13:30
NZD/USD is seeing a minor recovery, which economists at Credit Suisse look to be held at 0.5798/5813. Move below 0.5510 needed to turn near-term risk back lower “Whilst both daily RSI and MACD are holding bullish divergences, which suggests that the recovery will extend for now, our broader outlook remains outright bearish and we thus see this development only as a correction prior to an eventual move lower.” “Immediate support is seen at 0.5649 and next at 0.5617, though a move below the recent price low at 0.5510 is needed to turn near-term risk back lower and prompt a move to a major support level at the 2020 low at 0.5468.”  “Whilst we expect a better near-term ceiling to be found at the 0.5798/5813 level, above here would see scope to test the falling 55-day average at 0.5978.”
Caixin Services PMI Data Has Helped The Chinese Yuan (CNH)

Japanese Yen (JPY) Has Been At Its Lowest Since 1990

Kenny Fisher Kenny Fisher 19.10.2022 14:22
USD/JPY continues to inch upwards and is trading at 149.69, up 0.31%. Yen closing in on 150 The yen hasn’t managed a winning session since October 4th and it’s looking likely to breach the symbolic 150 level, perhaps before the week is over. The yen hasn’t traded at such low levels since 1990 and a turnaround from its prolonged slide doesn’t appear likely. The Bank of Japan has been under pressure to rethink its ultra-loose policy, as the yen has plummeted and inflation has climbed above the Bank’s 2% target. Earlier today, BoJ member Seiji Adachi poured cold water on hopes that the BoJ will change course, saying that risks to the economy and volatile financial markets precluded any shifts towards monetary tightening. Governor Kuroda echoed this stance, saying that the weak economy required massive stimulus. The BoJ has fiercely defended its yield curve control, maintaining a cap of 0.25% on 10-year government bonds. What about the yen’s downturn? With the BoJ defending its policy, the ball is in the court of the Ministry of Finance (MoF). The MoF dramatically intervened in late September to prop up the yen after it fell below 145, but the move did little more than slow the yen’s descent for a few days. Another intervention is possible, but it would have to be on a larger scale to have any substantial effect on the exchange rate. Finance Minister Suzuki has warned that the government would “properly respond” in the currency markets, but increasingly, the verbal bullets out of Tokyo are being viewed as blanks. Japan releases Core CPI for September, which is expected to rise to 3.0%, up from 2.8% in August. Inflation has been moving steadily higher, but the release is unlikely to have any effect on the BoJ’s monetary stance. . USD/JPY Technical USD/JPY is putting pressure on resistance at 149.81. Above, there is resistance at 151.32 There is support at 149.09 and 147.58 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

Netflix's Results Will Be A Hit On The Wall Street | The Bank Of England (BoE) Will Have To Be Very Aggressive

Craig Erlam Craig Erlam 19.10.2022 14:34
Trading is mixed in Europe on Wednesday, with Wall Street eyeing a slightly stronger open amid bumper Netflix earnings. Netflix is a hit Netflix results are expected to be a hit on Wall Street when the bell rings on Wednesday, with pre-markets pointing to a more than 13% rally in the stock. The streaming company reported revenues and earnings that comfortably surpassed expectations, while subscriber growth more than doubled forecasts. That was largely driven by the Asia-Pacific region which will become increasingly important for growth in the coming years. The company will continue to crack down on password sharing going forward, while the ad-supported plan will hope to draw in additional subscribers. After a tough year, things may be looking up for Netflix. UK inflation back in double-digits Inflation in the UK surpassed 10% again in September, slightly beating market expectations and further fueling concerns about the cost of living crisis and the role of the Bank of England in reining in rapid price increases. Naturally, all of this has been complicated by the political soap opera over the past few weeks, something the new Chancellor, Jeremy Hunt, has sought to calm by abandoning almost the entire controversial mini-budget. But inflation is still a problem, regardless, and the BoE will have to be very aggressive at upcoming meetings in order to try and get a grip of it. Markets are now undecided between a 75 and 100 basis point hike on 3 November but are quite confident that Bank Rate will end the year at 4% either way. With inflation now broad-based and fuel even offsetting some of the larger price increases, the worry is that these forecasts may prove too optimistic. ​ Intervention talk ramps up as USDJPY nears 150 Japan remains in focus as the dollar closes in on 150 against the yen. The threats of intervention have been coming thick and fast and many are wondering if 150 could be the point at which the Ministry of Finance pushes back once more. The last intervention wasn’t particularly successful, with the benefits unwinding in a matter of days. The question now is when they’ll jump back in and how forceful they’ll be. The message is clearly falling on deaf ears at the moment. Continuing to fluctuate Bitcoin continues to consolidate, with the recent rebound failing once more around $20,000. That level was once believed to be hugely significant as support but the reality is that it has simply become the point at which the price fluctuates around. That will change eventually but we’re now two months into that broadly being the case so there’s little to suggest it’s imminent. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The USD/CAD Pair Is Likely To Remain On The Bear’s Radar

Upcoming Data From Canada May Increase The USD/CAD Pair

InstaForex Analysis InstaForex Analysis 19.10.2022 14:39
Inflation in the world continues to rise, while the world's largest central banks continue to fight it. Central banks have chosen to raise interest rates as one of the main means of this struggle, and so far, judging by the continued growth of the curve reflecting inflation, this struggle does not bring tangible results. On Monday, Statistics New Zealand reported that consumer inflation increased by +2.2% in the 3rd quarter (with a forecast of +1.6% and against the previous value of +1.7%). The annual CPI came out with a value of +7.2% (with a forecast of +6.6% and against the previous value of +7.3%). We wrote about this in our previous review. Today, the Office for National Statistics published fresh data on consumer inflation in the UK. They were also underwhelming, posting a rise in September CPI from +9.9% to +10.1% YoY. The updated CPI for the Eurozone, which was also published today, also recorded an increase in inflation in the region in September at +9.9% YoY, although it turned out to be slightly weaker than the preliminary value of 10.0%. Today (at 12:30 GMT), inflation data in Canada will be presented by Statistics Canada together with the Bank of Canada. The publication of inflation data is very important for economists, market participants, and central bankers. Consumer prices account for the bulk of headline inflation and estimating the rate of inflation is important in setting the parameters for a central bank's current monetary policy. Given that the inflation target for the Bank of Canada is in the range of 1%–3%, the growth of the indicator (CPI and Core CPI) above this range is a harbinger of a rate increase and a positive (under normal economic conditions) factor for the CAD. Previous base CPI values (from the Bank of Canada): 5.8%, 6.1%, 6.2% (annualized). The indicator is expected to decrease to 5.6%. On the one hand, the decline in inflation in the face of its high level is a positive factor for the national economy. But on the other hand, it is still high, which continues to put pressure on the BoC to further increase the interest rate. In other words, it may be difficult to predict the market reaction to this publication. The Canadian dollar may both strengthen, especially if the CPI figures turn out to be higher than expected, and weaken, given the current drop in oil prices as well. By the way, today (at 14:30 GMT), the US Department of Energy will present its weekly report on oil reserves in the country's storage facilities. So, during this period of time, the USD/CAD pair may swing again. The next meeting of the Bank of Canada is scheduled for October 26. Assessing the reaction of the Canadian dollar to the results of the September meeting of the Bank of Canada (it first strengthened, and then continued to sharply weaken against the US dollar), it would probably be logical to assume further growth in the USD/CAD pair, also taking into account the fall in oil prices, stock indices and expectations of the development of the Fed's aggressive monetary policy. On Friday, Statistics Canada is to release its Retail Sales Index, which is a major measure of consumer spending. The index is considered an indicator of consumer confidence, also reflecting the state of the retail sector in the short term, and its possible fall (after falling by -2.5% in July) could provoke a weakening of the Canadian dollar and, accordingly, an increase in the USD/CAD pair, which has been in a steady upward trend since mid-August. As of writing, it is trading near the 1.3751 mark, through which there is an important short-term support level. Its breakdown and the breakdown of the local support level 1.3657 may provoke a deeper decline, but so far only as a correction. In general, the USD/CAD bullish trend prevails.   Relevance up to 12:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324743
The USD/JPY Price Seems To Be Optimistic

Reversing The US Dollar To Japanese Yen (USD/JPY) Pair Is Possible

InstaForex Analysis InstaForex Analysis 20.10.2022 08:03
The yen hit an important target at 150.00 (this morning's actual high of 149.96). In addition to being a round number, the target is defined by an embedded monthly timeframe price channel line. Above it are levels with increased frequency, approximately every 80 points. There were rumors again on the market that the Bank of Japan is preparing another intervention. The technical component also indicates to us a high probability of a price reversal during the formation of a divergence with the Marlin Oscillator. We believe that this is the main scenario for further developments. The nearest target in this case will be the price channel line in the area of 147.40. A divergence is also preparing to form on the four-hour chart. We will find out later this evening whether the reversal will take place or not.     Relevance up to 04:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324785
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

The Price On The Cable Market (GBP/USD) Is In The Downward Trend Area

InstaForex Analysis InstaForex Analysis 20.10.2022 08:05
According to the UK inflation figures released yesterday, it became clear that the record high inflation of the last 40 years at 10.1% is not going to decrease. The pound lost 0.94% during the day. On the daily chart, the price turned down from the point where the balance and MACD indicator lines coincide. Now the price is approaching the support at 1.1170, overcoming which opens the target at 1.0810 – the nearest green price channel line from the monthly timeframe. The price settled below the MACD line on the four-hour chart. The signal line of the Marlin Oscillator below the zero line - in the downward trend area. The price is preparing to overcome the support of 1.1170.     Relevance up to 04:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324787
The EUR/USD Pair Chance For The Further Downside Movement

Another Decline In The Euro (EUR) Is On The Horizon

InstaForex Analysis InstaForex Analysis 20.10.2022 08:10
So, the euro failed to cope with the strong resistance of the 0.9864 price level and the MACD line of the daily scale, turning around from the point of their coincidence and falling by 85 points. At the same time, there was an exit from risky assets on the market: S&P 500 -0.87%, 5-year US government bonds increased in yield from 4.22% to 4.36%. It may seem that the growth of yields is a sign of investors looking for profitable investments, and this is true, only investments in the dollar now act as such a conditionally reliable investment - long positions on the dollar since the end of September have been the largest in recent years. Investors also notice that the economic situation in the US continues to be much better than in Europe. Yesterday's data showed a 0.63% fall in construction in the eurozone in August, slightly slowing down the pace of construction in the US in September, with an increase in building permits by 1.4% in September. The price is approaching the target level of 0.9724 on the daily chart. The signal line of the Marlin Oscillator has penetrated into the territory of negative values, which indicates a high probability that the price will successfully overcome the support. And when this happens, a new target of 0.9520 will open before the euro. On the H4 chart, the price has overcome the support of the MACD line, Marlin is falling in the negative territory. The trend is downward on both timeframes, we are waiting for the euro's succeeding decline.   Relevance up to 04:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324789
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

The GBP/USD Pair Had A Chance For New Round Of Downward Movement In The Global Plan

InstaForex Analysis InstaForex Analysis 20.10.2022 08:43
GBP/USD 5M The GBP/USD currency pair continued to fall on Wednesday, although there were no special reasons for this. But we remember that the pair does not often stay in one place, especially the pound in recent weeks with its hyper volatility. The UK inflation report for September was published yesterday. The consumer price index rose to 10.1%, although a decrease of 0.2% y/y was recorded a month ago. As you can see, one decrease in inflation does not mean anything at all. The trend in this indicator remains upward, despite seven rate hikes by the Bank of England. Formally, the new rise in inflation was supposed to support the pound, as it means that the BoE will continue to raise the rate. However, traders are not interested in this moment at all. The pound fell due to the general fundamental, geopolitical and macroeconomic background. The British currency has grown enough over the past few weeks, the euro intends to fall again, so the bulls began to leave the market. In regards to Wednesday's trading signals, the situation was sad. The first signal was formed almost at the very end of the daily movement near the critical line. A rebound from this line could have been worked out with a long position, but the price managed to go up only 22 points. Thanks to this traders were able to set Stop Loss to breakeven, at which the position was closed. There was also one or two bounces from the 1.1207-1.1246 area, but with the same success. Most likely, a small loss was received on the second transaction. Not the most positive day. COT report: The latest Commitment of Traders (COT) report on the British pound showed a new weakening of the bearish mood. During the week, the non-commercial group opened 6,900 long positions and closed 3,400 short positions. Thus, the net position of non-commercial traders increased by 10,300, which is quite a lot for the pound. One might assume that the actions of the big players and the movement of the pound are finally starting to coincide, as the pound has generally gained over the last period of net growth, but we are worried that this may be another "false alarm". The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound continues to fall in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 88,000 shorts and 49,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 20. The euro has ignored the inflation report and is preparing for a new fall. Overview of the GBP/USD pair. October 20. The pound sterling is losing its winning pace. The new finance minister announced the cancellation of the tax cut plan. Forecast and trading signals for EUR/USD on October 20. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair has overcome the critical line on the hourly timeframe and may go below the Senkou Span B line in the coming hours. If this happens, then the chances for a new round of downward movement in the global plan will increase dramatically. A rebound from the lower border of the Ichimoku cloud may provoke a new growth for the pair. For October 20, we highlight the following important levels: 1.0930, 1.1212, 1.1354, 1.1486, 1.1649. Senkou Span B (1.1207) and Kijun-sen (1.1270) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. There are no major events or reports scheduled for Thursday in the UK and US. However, the pound continues to trade in a very volatile manner and does not stand still. Therefore, you can trade at least by levels and lines. You can make good money in case we witness a trend during the day. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 06:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324793
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The GBP/JPY Pair Remains On The Bear's Radar

TeleTrade Comments TeleTrade Comments 20.10.2022 08:48
GBP/JPY struggles fighting bears as it retreats from intraday high. Yields refresh multi-year top amid inflation woes but Japan policymakers resist meddling. UK PM Truss lost another supporter while Tory whips survived vote on fracking. Risk catalysts are crucial amid a light calendar, sellers could keep the reins unless Tokyo intervenes. GBP/JPY extends pullback from intraday high heading into Thursday’s London open, retreating to 168.00 after a two-day downtrend. In doing so, the cross-currency pair portrays the market’s indecision amid strong yields and political pessimism in the UK. That said, US 10-year Treasury yields refresh a 14-year high above 4.0%, around 4.14% by the press time while its two-year counterpart stays strong near the highest level since 2007, up 0.30% intraday near 4.57% at the latest. It’s worth noting that China’s debate on reducing quarantine time for international travelers seemed to have triggered the GBP/JPY pair’s latest uptick, before it dropped. Even so, the quote remains on the bear's radar amid wide divergence between the monetary policies of the Bank of Japan (BOJ) and the Bank of England (BOE), as well as due to the looming intervention by the Japanese policymakers to defend the yen. Talking about the UK’s political jitters, UK PM Liz Truss had to forgo Interior Minister Suella Braverman, over a "technical" breach of government rules, per Reuters, after losing Kwasi Kwarteng, the ex-Chancellor. However, the Tory Chief Whip and Deputy survived Wednesday’s voting in the British Parliament. “The motion by the main opposition Labour Party was defeated by 326 votes to 230 and the government proposal won, but some lawmakers said they were angry over the tactics, or lack of them, used by the government,” said Reuters. Elsewhere, broadly firmer inflation numbers from Britain, Eurozone and Canada, as well as the hawkish Fed bets and pessimism conveyed by the Fed’s Beige Book, seem to weigh on the market’s risk appetite and the GBP/JPY prices. Looking forward, GBP/JPY traders should pay attention to Japan’s money market moves and yields amid impending meddling from Tokyo, which in turn could propel the quote. However, the overall view remains bearish for the short term unless UK politics has anything major positive to cheer about. Technical analysis While failures to successfully cross the 170.00 psychological magnet lures GBP/JPY sellers, a convergence of the 10-DMA and monthly support line, around 165.20, appears crucial for buyers before relinquishing control.
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The USD/CAD Is Likely To Remain On The Bullish Mood

TeleTrade Comments TeleTrade Comments 20.10.2022 08:53
USD/CAD pares intraday gains inside a three-day-old triangle formation. RSI conditions, 50-HMA add to the downside filters. Bulls need a successful break of 1.3800 for conviction. USD/CAD grinds lower around 1.3770 during early Thursday morning in Europe, after a two-day uptrend, as traders await a clear break of immediate triangle support. In doing so, the Loonie pair portrays the market’s indecision. Other than the three-day-old symmetrical triangle’s support line, the firmer RSI (14) also keeps the USD/CAD buyers hopeful. Even if the quote drops below 1.3765 immediate support, it needs validation from the 50-HMA support of 1.3750 to convince the USD/CAD sellers. In that case, the pair could quickly drop to the weekly low near 1.3655 before declining toward the monthly low surrounding the 1.3500 round figure. Meanwhile, recovery moves need to cross the aforementioned triangle’s resistance line, around 1.3800 by the press time, to recall the USD/CAD buyers. Following that, 1.3900 and the monthly high near 1.3980 could entertain the bulls before flashing the 1.4000 mark on the chart. It’s worth noting that the USD/CAD pair’s successful run-up beyond 1.4000 won’t hesitate to aim for the May 2020 high near 1.4175. To sum up, USD/CAD is likely to remain on the bull’s radar despite the latest inaction. However, a downside break of 1.3750 might trigger a short-term correction. USD/CAD: Hourly chart Trend: Bullish
Navigating Financial Markets: Insights on Central Bank Decisions and Currency Quotes

The USD/TRY Pair Traders Are Waiting For The Decision Of The Central Bank Of The Republic Of Turkey (CBRT)

TeleTrade Comments TeleTrade Comments 20.10.2022 08:59
USD/TRY prints mild losses around all-time high as traders await CBRT Interest Rate Decision. Fresh risk-on mood also probes bulls ahead of the key event. Firmer yields, Fed vs. CBRT divergence can keep buyers hopeful. USD/TRY bulls take a breather around the all-time high, taking rounds to 18.60 heading into Thursday’s European session. In doing so, the Turkish lira (TRY) pair portrays the typical pre-event anxiety as the pair traders await the Central Bank of the Republic of Türkiye (CBRT) interest rate decision. In addition to the pre-event caution, the latest risk-on mood also weighs on the USD/TRY prices amid a sluggish session. China’s debate on reducing quarantine time for international travelers seemed to reverse the previous risk aversion. It’s worth noting that the broadly firmer inflation numbers from Britain, Eurozone and Canada, as well as the hawkish Fed bets and pessimism conveyed by the Fed’s Beige Book, seemed to have propelled USD/TRY prices previously. Ahead of the CBRT Interest Rate decision, Reuters mentions that Turkiye's central bank is expected to cut its policy rate by 100 basis points to 11% next week, a Reuters poll showed on Friday, after President Tayyip Erdogan called for more easing each month and said rates should be single digits by year-end. The survey update also states, “The central bank has shocked the markets twice in the past two months by cutting its policy rate by 100 basis points each time, lowering it to 12%, despite inflation soaring above 83% in September.” Hence, the CBRT rate cut is likely to stop the USD/TRY bulls near the all-time high but the bulls aren’t off the table amid inflation woes. and strong yields. That said, US 10-year Treasury yields refreshed a 14-year high above 4.0%, around 4.15% by the press time while its two-year counterpart stays strong near the highest level since 2007, up 0.30% intraday near 4.57% at the latest. As a result, any pullback around the CBRT decision could be elusive unless hearing major surprises. Technical analysis USD/TRY remains on the bull’s radar even as 18.60 appears immediate hurdle to cross on the daily basis to aim for the 19.00 threshold. Meanwhile, the previous weekly low of around 18.45 appears short-term key support.
Analysis Of Movement Of The Canadian Dollar To Swiss Franc Pair (CAD/CHF)

A Recovery In The US Equity Futures Undermines The Safe-Haven Swiss Franc (CHF)

TeleTrade Comments TeleTrade Comments 20.10.2022 09:09
USD/CHF holds steady near a multi-year peak, though lacks follow-through buying. A modest USD pullback holds back bulls from placing fresh bets and caps the upside. Aggressive Fed rate hike bets and elevated US bond yields still favour the USD bulls. The USD/CHF pair trades with a positive bias for the second successive day on Thursday and is currently placed near the 1.0045-1.0050 area, just below its highest level since May 2019. A combination of diverging forces, however, is holding back bulls from placing fresh bets and keeping a lid on any further gains, at least for the time being. A recovery in the US equity futures undermines the safe-haven Swiss franc and acts as a headwind for the USD/CHF pair. That said, a modest US dollar pullback offsets the supporting factor and caps the upside. The USD downtick, meanwhile, lacks any obvious catalyst and is more likely to remain limited amid the prospects for more aggressive policy tightening by the Federal Reserve. The markets are currently pricing a nearly 100% chance for another supersized 75 bps Fed rate hike move in November. This, in turn, remains supportive of elevated US Treasury bond yields. In fact, the rate-sensitive 2-year US government bond stands tall near a 15-year peak and the benchmark 10-year Treasury note rises to its highest level since the 2008 financial crisis. The fundamental backdrop supports prospects for the emergence of some USD dip-buying and an eventual breakout for the USD/CHF pair beyond the 1.0065-1.0075 strong resistance zone. Market participants now look forward to the US economic docket, featuring the release of the Philly Fed Manufacturing Index, the usual Weekly Initial Jobless Claims and Existing Home Sales data. This, along with speeches by influential FOMC members and the US bond yields, will drive the USD demand and produce short-term trading opportunities around the USD/CHF pair.
GBP: Monitoring Data Outliers Amid Hawkish BoE Expectations

In The Coming Weeks, The New Zealand Dollar To US Dollar Pair (NZD/USD) Will Face A Further Side Trade

TeleTrade Comments TeleTrade Comments 20.10.2022 09:13
According to Markets Strategist Quek Ser Leang and Economist Lee Sue Ann at UOB Group, NZD/USD faces further side-lined trading in the next weeks, likely within the 0.5570-0.5755 range. Key Quotes 24-hour view: “We highlighted yesterday that NZD ‘could rise above 0.5725 but a sustained advance above this level still appears unlikely’. However, after rising to 0.5706, NZD dropped to a low of 0.5650. The current price movement is likely part of consolidation and NZD is likely to trade sideways between 0.5625 and 0.5695 for today.” Next 1-3 weeks: “Our update from two days ago (18 Oct, spot at 0.5675) still stands. As highlighted, NZD appears to have moved into a consolidation phase and is likely to trade between 0.5570 and 0.5755 for the time being.”
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

Netflix Inc Was Leading Gainer While JP Morgan Chase & Co Was Down

InstaForex Analysis InstaForex Analysis 20.10.2022 08:16
At the close of the New York Stock Exchange, the Dow Jones fell 0.33%, the S&P 500 fell 0.67% and the NASDAQ Composite fell 0.85%. The components of the Dow Jones index The leading gainers among the components of the Dow Jones index today were The Travelers Companies Inc, which gained 7.40 points or 4.44% to close at 174.17. Chevron Corp rose 5.28 points or 3.24% to close at 168.00. Procter & Gamble Company rose 0.93% or 1.19 points to close at 129.56. The biggest losers were Home Depot Inc, which shed 9.57 points or 3.36% to end the session at 275.49. Dow Inc was up 2.70% or 1.25 points to close at 45.13, while JPMorgan Chase & Co was down 1.96% or 2.33 points to close at 116. .51. The S&P 500 index components Leading gainers among the S&P 500 index components in today's trading were Netflix Inc, which rose 13.09% to 272.38, Intuitive Surgical Inc, which gained 8.99% to close at 211.14, and shares of Valero Energy Corporation, which rose 5.32% to close the session at 123.96. The biggest losers were Generac Holdings Inc, which shed 25.34% to close at 110.30. Shares of M&T Bank Corp lost 13.89% and ended the session at 163.06. Quotes Northern Trust Corporation fell in price by 9.15% to 79.59. The components of the NASDAQ  Leading gainers among the components of the NASDAQ Composite in today's trading were Mullen Automotive Inc, which rose 57.12% to hit 0.34, Scopus Biopharma Inc, which gained 51.59% to close at 0.37, and also shares of SenesTech Inc, which rose 46.55% to close the session at 0.34. The biggest losers were Olaplex Holdings Inc, which shed 56.69% to close at 4.24. Shares of Agrify Corp lost 42.44% to end the session at 2.55. Quotes of Sientra Inc decreased in price by 37.36% to 0.38.  The number of securities that fell and rise On the New York Stock Exchange, the number of securities that fell in price (2363) exceeded the number of those that closed in positive territory (777), while quotes of 105 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,715 stocks fell, 1,085 rose, and 216 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.89% to 30.77. Commodities Gold futures for December delivery lost 1.31%, or 21.65, to hit $1.00 a troy ounce. In other commodities, WTI crude futures for December delivery rose 3.23%, or 2.65, to $84.72 a barrel. Futures for Brent crude for December delivery rose 2.53%, or 2.28, to $92.31 a barrel. FX Market Meanwhile, in the Forex market, EUR/USD fell 0.79% to hit 0.98, while USD/JPY edged up 0.43% to hit 149.90. Futures on the USD index rose 0.73% to 112.81.   Relevance up to 05:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/297535
Further Upward Price Movement Of The AUD/USD Pair Is Expected

Australia Work Report Contributes To Containment Of Earnings For The AUD/USD Pair

TeleTrade Comments TeleTrade Comments 20.10.2022 09:39
AUD/USD recovers early lost ground amid the emergence of some selling around the USD. A positive risk tone undermines the safe-haven buck and benefits the risk-sensitive aussie. A combination of factors might continue to act as a headwind and favour bearish traders. The AUD/USD reverses an intraday dip to a three-day low and climbs back above mid-0.6200s in the last hour, though lacks any follow-through buying. A modest bounce in the US equity futures prompts some selling around the safe-haven US dollar, which, in turn, offers some support to the risk-sensitive aussie. That said, a combination of factors acts as a headwind for the AUD/USD pair and should continue to keep a lid on any meaningful recovery. Rising bets for aggressive interest rate hikes by the Federal Reserve remain supportive of elevated US Treasury bond yields. In fact, the rate-sensitive 2-year US government bond stands near a 15-year peak and the benchmark 10-year Treasury note hits its highest level since the 2008 financial crisis. Furthermore, any optimistic move is likely to remain capped amid growing worries about a deeper global economic downturn, which could further benefit the greenback's relative safe-haven status. Apart from this, the softer Australian jobs report might also contribute to capping gains for the AUD/USD pair. In fact, the Australian Bureau of Statistics reported that the number of employed people rose by 0.9K in September, well below expectations for a reading of 25K. This, to a larger extent, overshadows the fact that the unemployment rate held steady at 3.5% - the lowest level since the early 1970s. Apart from this, the Reserve Bank of Australia's (RBA) decision to slow the pace of policy tightening earlier this month suggests that the path of least resistance for the AUD/USD pair is to the downside. Hence, a slide back towards the YTD low, around the 0.6170 area, remains a distinct possibility. Traders now look to the US macro data - the Philly Fed Manufacturing Index, the usual Weekly Initial Jobless Claims and Existing Home Sales data. This, along with speeches by influential FOMC members and the US bond yields, will drive the USD demand and provide some impetus to the AUD/USD pair.
The EUR/USD Price May Fall Under 1.0660

USD/JPY Is Near Jumping Over 150.00. According To ING Economics, EUR/USD May Be Trading At 0.92 By The End Of 2022

ING Economics ING Economics 20.10.2022 09:47
Many parts of the FX market are starting to see the emergence of trading ranges - although Asian FX now looks like the weak link here. Despite this consolidation, FX traded volatility levels remain near their highs as the market awaits another 75bp hike from the Fed in early November. Still higher real rates in the US will leave the dollar supported on dips USD: Dollar correction has been underwhelming Earlier this week, we had felt that conditions were building for a dollar correction - or at least for a recovery in the battered energy importers in Europe and Asia. That correction has certainly not been forthcoming in Asia, where large parts of the region have fallen to new lows against the dollar. USD/JPY is on the verge of breaking 150 - despite the threats of renewed BoJ FX intervention - and USD/CNH traded as high as 7.28 before reversing course in early Europe on reports that China might soften its quarantine restrictions for inbound travel. Keeping the dollar bid through all this has been the continued grind higher in US real rates, where the 10-year rate last night closed at a new cycle high of 1.72% - the highest level since 2009. Prospects of more restrictive US monetary conditions remain a key factor driving the dollar higher and judging from price action this week, it is going to take a lot to conclude that the Fed tightening cycle is over. On that subject, last night's release of the Fed's Beige Book  (prepared for the Fed's 2 November meeting) certainly showed no widespread decline in activity or softening in labour markets or pricing power that would merit a change in Fed tone. That leaves the dollar at its highs in Asia and about 1.5% off its highs on a trade-weighted basis. Importantly, one week traded volatility for G10 FX pairs remains elevated (e.g. 13.5% for EUR/USD and 16-18% for the commodity pairs) and warns that the dollar could easily grind back to its highs. We do not see any major market drivers today (though USD/JPY breaking 150 could elicit quite a few headlines and probably some more FX intervention). Certainly, some of the softer US housing data already seen this week has failed to dent expectations for the Fed tightening cycle. And today's US data set (existing home sales and jobless claims) looks unlikely to move the needle either. DXY to trade a 112-113 range. Chris Turner EUR: Lower gas prices have failed to provide much of a boost Earlier this week, we had felt that the sharp fall in European natural gas prices could give the euro a boost. After all, the spike in gas prices in August had weighed heavily on European FX. EUR/USD, so far anyway, has failed to enjoy much of a recovery - probably because US real rates have still pushed higher throughout. We can therefore conclude that EUR/USD price action has been poor. As such, 0.9850/0.9870 resistance may continue to hold any uptick and prevent a move closer to big channel resistance at 0.9970. Separately, we have just released our preview of next week's European Central Bank meeting.  A 75bp hike looks like a done deal and, as Francesco Pesole notes, we doubt the euro can get much joy even if the ECB threatens even more hawkish policy. 0.92 remains our year-end target for EUR/USD. Chris Turner GBP/USD: No margin for error We titled this month's FX Talking update, 'No margin for error', in order to highlight that very restrictive Fed policy created a very difficult environment for policymakers. Central bankers as far afield as Hungary and Chile had seen their currencies punished on views that they may have ended their tightening cycles too early. Of course, when it comes to policy errors, the current UK government leads the pack and despite the best efforts of new Chancellor Jeremy Hunt, the UK is struggling to regain lost fiscal credibility. The UK's five-year sovereign CDS is still trading above 40bp compared to levels nearer 25bp when PM Liz Truss took charge. Political infighting and the uncertainty of policy continue to demand a risk premium for sterling, where GBP/USD could easily slip back to the bottom end of its wide 1.10-1.15 range. The wild card is what happens to the top job and whether the re-emergence of former Chancellor Rishi Sunak would represent a steadying of the ship or merely split the Conservative party asunder. One can understand why foreign investors will want to steer clear of sterling until the political environment becomes a lot clearer. Chris Turner CEE: Lower gas prices driving FX to stronger levels We have a heavy economic calendar for today with data on the labour market, industry and PPI in Poland as well as bond auctions across the CEE region. Industrial data indicates that output started expanding again in 3Q, after declining in 2Q. This does not confirm the sharp deterioration in industrial conditions painted by the nose-diving manufacturing PMI. But still, annual growth moderated to single-digit levels in September in our view. On the FX side, CEE continues to rally driven by lower gas prices. For now, EU storage continues to increase with the latest numbers from Gas Infrastructure Europe showing storage is more than 92% full. However, with the heating season still ahead of us, it is important that the market doesn't get too complacent about the supply/demand picture in the near term. We should hear more from the European Commission in the next two days on price caps, which should be a key message for gas prices and CEE FX. However, in addition to lower gas prices, we see rising interest rate differentials across the region. In Hungary, we are at a new all-time high after Friday's NBH emergency rate hike and in Poland we are at the highest levels since early September. With EUR/USD above recent lows, we thus see favourable conditions for CEE to continue to rally, driven by further gas price declines if the European Commission approves the proposed measures. We thus see a good chance for the Hungarian forint to erase last week's losses and return below 410 EUR/HUF and the Polish zloty to move below 4.780 EUR/PLN. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Asia Market: Exports In Indonesia Are Likely To Continue To Grow, Chinese Interest Rate Decision Ahead

Australia Has A Growing Number Of Business Insolvencies | Chinese Concept Of Regulating The Way Wealth Is Accumulated

Saxo Bank Saxo Bank 20.10.2022 10:42
Summary:  The major US indices, the Nasdaq 100 and S&P 500 fell on weaker-than-expected company news, Putin clearing martial law, and more hawkish Fed comments. 10-year US bond yields hit 4.14%, its highest since July 2008 which boosted the US dollar against every G-10 peer. Netflix, the standout performer up 13% following their mostly better-than-expected results. Tesla shares slid after hours on weaker-than-expected 3Q results. AU jobs data disappoints, putting the focus back on the AUD and banking shares. Across the Asia Pacific, all eyes are on energy and oil stocks after the Crude oil price lifted 3% on EIA warnings. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) fall on weaker than expected company news, Putin clearing martial law & hawkish Fed comments US stocks fell on the backfoot after a two-day rally, with the 10-year US bond yield hitting 4.136% in the session, which is its highest level since July 2008, while 2-years rose to the highest since 2007. That in turn boosted the dollar, which rallied against every G-10 peer. Gold dropped. It comes as Fed speakers warned US inflation continues to surprise to the upside, saying there’s no reason to think key price measures have peaked. Over in UK and Canada CPI came in stronger than expected in September, up 10.1% year on year (YOY) and 6.9% YOY respectively, ensuring the Bank of England and Bank of Canada keep on hiking rates.  Earnings enthusiasm faded with backup generator manufacturing Generac (GNR) shares sliding 25% on slashing its full year sales outlook. While community bank M&T (MTB) shares crumbled 14% on the company reporting weaker than expected results. On the upside, oil stocks charged with Baker Hughes (BKR), Valero Energy (VLO) and Halliburton (HAL) up over 5% each. While Netflix (NFLX) was the stand out performer up 13% following their mostly better than expected result released the day prior as we mentioned here.  S&P 500 dropped 0.7% and Nasdaq 100 slid 0.4%. 10 of the 11 sectors of S&P 500 declined with the notable exception of Energy, which rose 2.9%. 10-year U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) jumped to 4.13% Higher-than-expected U.K. inflation prints, hawkish comments from Fed’s Bullard and Kashkari, poor results from the 20-year treasury bond auction, and corporate bond supply contributed to an around 13bp rise in yields across the curve. The 2-year yield rose to 4.56% and the 10-year surged to 4.13%, both reaching new highs. The 20-year auction was awarded at 2.5bps cheaper than the market level at the time of the auction, indicating poor demand. Corporate bond issuance amounted to around USD15 billion and added to the upward pressure on yields. Hong Kong’s Hang Seng (HSIV2) China’s CSI300 (03188:xhkg) Hang Seng Index fell 2.4% by mid-day, as China Internet stocks reversed the bounce in the past two days, falling by 4% to 7%, and local property developer names paring early gains as the relief for extra stamp duties for non-resident home buyers in the maiden Policy Address of the Hong Kong Chief Executive is less extensive than expected. Sun Hung Kai Properties (00016:xhkg) dropped 3.6% and New World Development (00017:xhkg) tumbled 7.8%. Hong Kong Stock Exchange (00388:xhkg), falling 2%, reported a 30% Y/Y decline in EPS in Q3, slightly better-than-feared. EV stocks tumbled, with Xpeng (09868:xhkg) falling 9.5% and other leading names losing by 4% to 7%.  Tanker and dry bulk operator COSCO Shipping Energy Transportation (01138:xhkg) soared more than 10%. In mainland bourses, the CSI300 fell 1.6%, with Consumer Staple and Consumer Discretionary sectors being the worst performers, falling over 3%. While all major sectors in the CSI300 declined, lithium battery makers, shipping, and coal mining companies gained. Australia’s ASX200 (ASXSP200.1), focus is on bank and energy stocks It’s worth keeping an eye on banking stocks particularly regional banks that could see more volatility, like Suncorp (SUN), Bendigo and Adelaide (BEN) and Bank of Queensland (BOQ). Also, today focus will be on oil stocks like Santos (STO), Woodside Energy Group (WDS) and Beach Energy (BPT) after the oil price darted ahead. Japanese yen flirting with 150, GBP facing political hurdles There is a lot of sense of “urgency” in the Japanese officials as USDJPY continues to flirt with the 150 handle. The surge higher in US yields overnight is likely to further pressure the yen, and FinMin Suzuki’s comments this morning on taking appropriate steps to curb speculative moves still suggest they stand ready to intervene if USDJPY rises above 150. Meanwhile, the rebound in the US dollar weighed on G10 currencies, with GBP suffering despite a pick up n BOE rate hike bets after the higher than expected UK CPI print, as political turmoil continued to weigh. Three officials left the office yesterday, including the Home Secretary and Chief Whip, although there were reports later that some of them will remain in post. Meanwhile, the fight for Truss to stay in office continues. GBPUSD testing the downside at 1.1200. USDCNH climbed to as high as 7.2790 The Chinese offshore yuan weakened to as much as 7.2790 this morning and is trading at around 7.2680 as of writing. Higher U.S. bond yields, sell-offs in Chinese stocks, concerns over a harsher line on income redistribution in China, and reports about talks on the joint production of weapons between the U.S. and Taiwan weighed on the yuan.  Gold (XAUUSD) slumps as the dollar momentum returns Gold prices heading lower to test the support at $1620/oz amid risk aversion and higher Fed bets propelling US yields higher and a rebound in the US dollar. Hawkish Fed speak yesterday, together with fresh highs in UK CPI, suggested higher-for-longer inflation and interest rates, while demand for the yellow metal also remains depressed due to ongoing lockdowns in China.  Crude oil (CLX2 & LCOZ2) in focus again following EIA warnings Oil extended gains rising 3.3% to $85.55 after EIA earlier reported US crude stockpiles dropped by 1.73 million barrels last week. Four-week seasonal demand for distillate fuels soared to the highest since 2007 while inventories remained at the lowest point on record for this time of year.  What to consider? Fed speakers further up the hawkish ante James Bullard and Neel Kashkari kept up their hawkish Fed rhetoric, in light of the burgeoning global price pressures. Bullard warned that inflation continues to surprise to the upside and the Fed needs to continue to act, also emphasising higher-for-longer rates even if inflation starts to decline in 2023. Kashkari (2023 voter) added that there is no reason to think that key price measures have peaked, and he sees little evidence of a labor market softening. He also reiterated the Saxo view that “risk of under shooting on rate hikes bigger than overdoing it”. He also said his best guess is the Fed can pause hikes sometime next year but he favours rate hikes until core inflation starts to cool, noting the Fed's rate changes take a year or so to work through the economy. Chicago Fed President Evans was also on the wires this morning, and given that he’s retiring next year, he was accepting of the fact that “beginning rate hikes six months earlier would have made sense.” UK CPI comes out hotter than expected, Euro headline inflation more subtle UK inflation came in at double-digits again, matching the 40-year high in July, at 10.1% y/y. This puts further pressure on the Bank of England to go big with its rate hike at the November meeting. Price pressures were broad-based, but most notable was the increase in food price. Scaling back of aid for electricity and natural gas prices, as suggested by the latest fiscal measures announced by Chancellor Hunt, could fuel further inflationary pressures next year. Eurozone headline inflation, on the other hand, was revised lower to 9.9% for September from flash reading of 10.0% but core measure rose to 5.8% y/y from 5.2% y/y in August, coming in at a record high. The ECB is expected to raise rates by 75bps at the October 27 meeting. Tesla shares slide after hours on reporting weaker-than-expected results Tesla (TSLA) shares fell 2.7% after hours when the EV giant reported third-quarter sales falling short of analyst estimates, noting the US dollar’s growing strength, along with production and delivery bottlenecks impacted results. Tesla’s Revenue rose to $21.5 billion, versus $22.1 billion expected by Wall Street. Profit rose to $1.05 a share, exceeding the $1.01 average Bloomberg estimate. And the closely watched Q3 automotive gross margin, came in at 27.9%, missed the 28.4% expected. Tesla cited higher costs related to a slower-than-expected ramp up in output at new factories, as well as difficulties shipping vehicles. Tesla’s shares are down almost 45% from their high against the backdrop of a slowing economy, higher inflation and rising interest rates, plus Musk’s $44 billion bid to buy Twitter. For more on Tesla click here to read Peter Garnry’s note. Discussion between the U.S. and Taiwan on joint weapon production According to Nikkei Asia, the Biden administration and Taiwan are in talks for American defense companies to provide Taiwan technology to manufacture weapons in Taiwan or to ship Taiwan-made parts to make weapons in the U.S. This, reading together with U.S. Secretary of State Blinken’s warning this Monday that “a fundamental decision that the status quo was no longer acceptable and that Beijing was determined to pursue reunification on a much faster timeline” and President Biden’s remarks of deploying U.S. forces to defend Taiwan in a CBS 60 Minutes interview last month, stirred up some unease among investors. Separately on Wednesday, Taiwan conducted live-fire military drills on Penghu Island, an archipelago in the Taiwan Strait. Investors are feeling unease about the introduction of the concept of regulating the means of accumulated wealth in China in an official document in China Market chatters show some investors are feeling unease about the phrase “we will improve the personal income tax system and keep income distribution and the means of accumulating wealth well-regulated” in the Work Report delivered by General Secretary Xi at the Chinese Communist Party’s National Congress last Sunday. The concept of regulating the means of accumulating wealth (规范财富积累机制) shows up in an official document for the first time. Hong Kong’s Chief Executive John Lee unveils his plans for active industrial policies and integration into national development schemes In his maiden Policy Address, Chief Executive John Lee unveils a Steering Group on Integration into National Development to devise strategic plans to integrate Hong Kong’s economy into the mainland’s Greater Bay Area development scheme and the Belt and Road Initiative. Li also rolls out investment-led measures aiming to boost the Hong Kong economy, including setting up a Hong Kong Investment Corporation which will establish and fund an HKD30 billion public-private co-investment fund to invest in projects that potentially drive industry development in Hong Kong. Hong Kong will also establish the Office for Attracting Strategic Enterprises whose mandate is to attract business enterprises from the mainland and overseas through favorable tax, financing, land provision, and other incentives. Weaker yen to prop up Japan inflation further Japan’s inflation data for September is due for release on Friday, and as signalled by the Tokyo CPI released earlier this month, price pressures are likely to pick up further. Bloomberg consensus expects the core measure (ex-fresh food) to come in at 3.0% y/y from August’s 2.8% y/y while the core-core measure (ex-fresh food and energy) is expected at 1.8% y/y in September from 1.6% y/y previously. The headline is expected to be a notch softer at 2.9% y/y from 3.0% y/y, but still remain way above the 2% target level. Weakness in the yen prompted an intervention from the Bank of Japan in September but the effect faded fast and the currency was significantly weaker in the month, which possible led to import price pressures. Still, the central bank is unlikely to shift its easing stance and will likely continue to wait for the global pressures to ease and USD to top out.       Aussie unemployment rises. Employment falls Traders digested much weaker than expected jobs data for September. Data released today showed just 923 jobs were added to the economy, much weaker than the 25,000 jobs Bloomberg estimated to be added. It also shows employment is falling ahead of RBA’s expectations, with less jobs added to the Australian economy, following last month’s 33,500 jobs being added. Also in important news; the unemployment rate rose by less than 0.1 percentage points, but remained at 3.5% in rounded terms. The reason for this is because rate rises and rising inflation is having a greater impact on the corporate world with the RBA also noting business insolvencies are rising in Australia.   For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-20-oct-20102022
China: PMI positively surprises the market

People's Bank of China Loan Prime Rate Stays Unchanged | A Softer Labour Market In Australia |Eyes On The US - Philly Fed Manufacturing Index

Kamila Szypuła Kamila Szypuła 20.10.2022 10:56
This morning, reports from Asia and the Pacific appeared. Traders also are now looking at macro data from the US - Philly Fed Manufacturing Index, the usual weekly data on initial unemployment claims, and data on existing home sales. Japanese Trade Balance (Sep) Japan provided data on exports and imports, and thus on its balance sheet, at the start of the day. The current reading is positive and shows an improvement in the trading result. The current reading is higher than the pronosed -2.167.4B and is at the level of -2.094.0B. For more than a year, Japan has been importing more than exporting, and since May the situation has worsened significantly. The balance then decreased from the level of -842.8B to the level of -2,384.7B. In the following months, the result was above the level of 1,000.0B. This situation is unfavorable for the country, so the current positive reading has a significant impact on the Japanese currency (JPY). Source: investing.com This positive trade result was largely influenced by the positive export performance. The published report shows that exports increased from 22% to 28.9%. He was taller than expected. This is the lowest result during the year. Source: investing.com Australia labor maket reports Australia today presented the result on the appearance of the labor market. The number of employees and the unemployment rate are instances of the country's conditions in this sector. Despite a rebound from the negative area in the previous reading, the number of people employed in September fell to 0.9K. The index scores for the year are generally in a downward trend. The decline will begin in the first half of the year, and the lowest level was in April at 4.0K. It then doubled and the annual peak was at 88.4K. The unexpected drop below zero occurred in the month following the highest score. Therefore, the positive reading from the previous period was significant for the economy. The current reading may weaken not only the economy but also the Australian dolar (AUD). Source: investing.com People's Bank of China Loan Prime Rate The positive news for the Australian labor market is that the unemployment rate remains at 3.5%. Another reading showed that this indicator holds up once again. People's Bank of China Loan Prime Rate will remain at 3.65% for the third time. EU Leaders Summit The most important event of the day for europe is Leaders Summit . The Euro Summit brings together the heads of state or government of the euro area countries, the Euro Summit President and the President of the European Commission. This meetings provide strategic guidelines on euro area economic policy. The comments made at this meeting may give a signal about future decisions, which at the moment are very important not only for the economy but also for the market. US Initial Jobless Claims Every weekly report on the number of individuals who filed for unemployment insurance for the first time during the past week will appear at 14:30 CET. Another increase is expected. The projected number of applications is at the level of 230K. This means that the indicator will be in an uptrend for the second week in a row. Philadelphia Fed Manufacturing Index The Philadelphia Federal Reserve Manufacturing Index rates the relative level of general business conditions in Philadelphia. The last picture of conditions is negative. It has been at a very low level since May, falling below zero levels. The latest reading was at -9.9, expected to rise to -5.0. This is a small but important improvement in conditions. The general appearance is negative. US Existing Home Sales Another important report for the US market is the change in the annualized number of existing residential buildings that were sold during the previous month. The outlook for this indicator is pessimistic. The number is expected to drop from 4.80M to 4.70M. Despite the economic situation, the index remained above 5.0M for a significant part of this year. The first drop below this level took place in July (4.81M). In August, it fell slightly to the level of 4.80M. Another decline may signal a deepening of the downward trend. This means that home sales deteriorate significantly. Source: investing.com Summery 1:50 CET Japan Exports (YoY) (Sep) 1:50 CET Japan Trade Balance (Sep) 2:30 CET Australia Employment Change (Sep) 2:30 CET Australia Unemployment Rate (Sep) 3:15 CET PBoC Loan Prime Rate 12:00 CET EU Leaders Summit 14:30 CET US Initial Jobless Claims 14:30 CET Philadelphia Fed Manufacturing Index (Oct) 16:00 CET US Existing Home Sales (Sep) Source: https://www.investing.com/economic-calendar/
Bank Of England Will Probably Be Unable To Avoid A Significant Easing Of Policy

Liz Truss (UK Prime Minister) In Deep Trouble | Procter & Gamble And Tesla Did Better Than Expected | Nestle Reported Its Strongest Sales Growth

Swissquote Bank Swissquote Bank 20.10.2022 10:53
The market mood was rather bearish yesterday, as the major US indices gave back a part of the early week gains. The S&P500 slid 0.67%, Nasdaq gave back 0.85%, and the Dow Jones eased 0.33%. Mixed earnings didn’t really help improve sentiment. One of the biggest gainers was Netflix which jumped 13%, but other FANG stocks, or MAMAA stocks did poorly on hawkish Federal Reserve (Fed) expectations. Better than expected Procter & Gamble did better than the earnings and revenue expectations, Nestle reported its strongest 9-month sales growth in 14 years, IBM beat analyst expectations, and boosted its full year profit forecast, and Tesla announced a better-than-expected earnings per share, but slightly missed on revenue expectations. Tesla shares slipped more than 6% in the afterhours trading. Philip Morris and Dow are due to announce earnings today, American Express and Barclay on Friday. Crude Oil In energy, the barrel of American crude rebounded yesterday, after falling toward $82 earlier this week. Politics In politics, Liz Truss is really in a hot seat, as the chaos among the Tories got worse yesterday, after Home Secretary Braverman got fired for sharing confidential information. Forex Market In the FX, Cable continued falling, the EURUSD remains sold below the 50-DMA and the Japanese yen continues diving against the US dollar. The situation of turkey In central banks, Turkey is expected to cut its policy rate by another 100bp to 11%, which would push the Turkish inflation-adjusted rate down to -71.5%. But tell that to Mr. Erdogan! Watch the full episode to find out more! 0:00 Intro 0:33 Market update 2:08 Mixed earnings: Tesla, Nestle, P&G, IBM 3:48 Growing EV competition 5:05 US crude rebounds, Exxon revised to Buy at Jefferies 5:52 ASML reports strong results, jumps 6% 7:06 Liz Truss in deep trouble 8:59 FX update: USDJPY tests 150 resistance, Turkey to cut Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Netflix #Tesla #Nestle #P&G #IBM #ASLM #earnings #hawkish #Fed #expectations #USD #EUR #JPY #GBP #TRY #gilt #sovereign #crisis #Bailey #BoE #Liz #Truss #Jeremy #crude #oil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH      
Bank of England survey highlights easing price pressures

There Is Nothing Stopping The Bank Of England From Hitting The Rate Sharply

InstaForex Analysis InstaForex Analysis 20.10.2022 11:34
Deputies quarrel, ministers are leaving, Truss' chair is shaking, inflation is rising. The pound has started a black streak again, although the presence of a white one can be questioned. The burden of problems hangs over the British currency and it does not get better, on the contrary, there are new reasons to think about the potential achievement of parity for the GBP/USD pair. The dollar gaining strength, the equally rapidly growing inflation in the UK, which the Bank of England continues to ignore, the specter of a recession. All this is happening during a possible change of power in Britain. The new prime minister has not had time to settle in the chair, as MPs want to send her after Boris Johnson. The government's twists and turns are not at the right time, but apparently there is no other way out. Inflation The pound fell for a moment after the release of inflation data. The new indicator turned out to be disappointing, the price index in the UK continued to accelerate, reflecting, among other things, the passivity of the local central bank. In September, inflation moved to double digits, increasing from 9.9% to 10.1% against the consensus of economists of 10%. More importantly, the core inflation rate rose just as quickly, amounting to 6.5% compared to 6.3% in the previous month. The highest figure in four decades, but succeeding figures are expected to be higher. "The overall inflation rate will rise to almost 11% in October, primarily due to a 27% increase in energy prices. But in the first quarter, the overall figure should decrease to 9%, since the peak of growth in food and motor fuel prices has probably been reached," Pantheon Macroeconomics economists comment. High inflation could be made an argument for strengthening the pound due to the aggressive rhetoric of the BoE, which, in theory, should have followed after another record price increase. Now nothing is keeping the central bank from raising the rate sharply at the November meeting, which was raised to 2.25% in September and is expected to rise to about 4% by the first months of the new year. In practice, things may be different. However, some economists say this may now be less likely after recent scenes in the government. Most of the September budget plan was canceled this week in favor of a return to "austerity." This leaves the economy on the path to a barely mitigated recession, which, according to the August monetary policy report, could last for about a quarter. Everything is too complicated, and the authors of this confusion are British politicians. Downing Street The inflationary picture in the UK has been erased by reports of new layoffs in the ranks of high-ranking political officials. Following the sudden departure of former Chancellor Kwasi Kwarteng, who was forced to resign on October 14, Interior Minister Sewelluella Braverman left her post. The pound tried to grow amid large-scale losses on Wednesday. This movement, apparently, was a reaction to the departure of another high-ranking member of the government, followed by a decline in the yield of UK government bonds, which did not correspond to the internal inflationary picture. Braverman was replaced by Grant Shapps, whom the prime minister had previously pushed to the back of the government. Who's next? What other reshuffles are waiting for Britain and will this save the country from collapse? Anyway, the pound likes what is happening with the change of the main characters. The drop in yields on Wednesday did not correspond to the global background against which US bond yields were pushing other countries higher. Dollar Government reshuffles have a short-term impact on the pound. The reality is that the British currency lags behind not only the strong dollar, but also the weak euro. The pound continued its downward trend, despite extremely high inflation and the rates of the financial markets on the increase in US bond yields after even more hawkish comments from the Federal Reserve representatives. The pound's illogical reaction to the consumer price index data highlights that the currency is "trading in a structural, not cyclical way. In a cyclical world, higher inflation will be accompanied by higher yields and a stronger currency," HSBC noted. When markets are most concerned about structural risks, "higher inflation and higher yields are seen as symptoms of a broader problem," the economists explain. The pound is likely to continue trading structurally until the country's authorities make more efforts to contain the domestic budget deficit or until inflation reaches a peak. In this case, stabilization of the bond market and the pound is possible. In the meantime, the downward trend is the main one. Sterling is waiting for a difficult few months, during which the GBP/USD exchange rate risks falling to 1.0800 and below. The dollar rally, fueled by even more aggressive Fed rhetoric, will put more pressure on the lifeless pound. Traders are revisiting US interest rate hikes closer to 5%. In November, the rate can be raised immediately by 100 bps. The dollar rally in the middle of the week followed statements from Minneapolis Fed chief Neel Kashkari. The official signaled that he had "very little confidence in what inflation will be in six months" and argued that the central bank should keep raising rates until there was "convincing evidence" that the inflationary peak had passed. As for rates, September forecasts suggested an upper limit of 4.5% by the end of the year. Concerns were also raised about a rise to 4.75% early next year. Core inflation rose from 6.3% to 6.6% y/y in September, while the official or headline inflation rate remained stubbornly elevated at 8.2%. After the reversal of the dollar index, expectations about reaching new highs again became more active. The current range is 112.00-114.00. These notes will remain relevant until the next FOMC meeting. If bulls manage to break above 114.00, gains will accelerate to a 2022 peak at 114.80.   Relevance up to 09:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324821
Asia Morning Bites - 14.02.2023

Depreciation Of Rupiah (IDR) Relatively Better Than Other Peer Currencies

TeleTrade Comments TeleTrade Comments 20.10.2022 11:50
At its October monetary policy meeting on Thursday, Indonesia’s central bank, Bank Indonesia (BI), hiked its 7-day reverse repo rate by 50 bps from 4.25% to 4.75%, as widely expected. The central bank Governor Warjiyo said in the policy statement that “Indonesia to monitor forex supply, strengthen policy to stabilize rupiah.” Additional Comments   2022 Current Account surplus estimate at 0.4-1.2% of GDP. Depreciation of rupiah relatively better than other peer currencies. Rupiah depreciation is in line with dollar strength, rising uncertainty and aggressive monetary tightening by some countries. Impact of fuel price hikes on food prices not as big as pvsly anticipated. Core inflation remains low, under control. Oct headline inflation is seen below September's inflation rate based on survey. 2022 inflation is still seen above target range. Will intervene in FX markets to prevent imported inflation. Continue monitoring potential impact of global risks on domestic macroeconomic conditions. Interest rate decision taken as a front-loaded, pre-emptive, forward looking measure to lower inflation expectations that are too high. Intended to bring inflation back to within target in first half of 2023. Rate decision also aimed at ensuring rupiah reflects fundamental value amid strong USD.   Market reaction On the expected rate decision by the Indonesian central bank, the Indonesian Rupiah (IDR) rebounded against its American counterpart, driving the USD/IDR from two-year highs of 15,587.50. At the press time, the spot trades 0.47% higher at 15,567.50.
China Yuan (CNH) Prints The First Daily Loss

Probability That The USD/CNH Pair Will Exceed The 7.3000 Level

TeleTrade Comments TeleTrade Comments 20.10.2022 11:56
Markets Strategist Quek Ser Leang and Economist Lee Sue Ann at UOB Group still see the likeliness of USD/CNH breaking above the 7.3000 region in the next weeks. Key Quotes 24-hour view: “While we expected USD to strengthen yesterday, we were of the view that ‘any advance is expected to face strong resistance at 7.2380’. However, USD not only blew past 7.2380 but also notched a fresh record high of 7.2743. While deeply overbought, the rally is not showing any signs of weakening just yet. That said, the next major resistance at 7.3000 is unlikely to come under challenge for now (there is another resistance at 7.2850). On the downside, support is at 7.2550 but only a break of 7.2400 would indicate that the current strong upward pressure has eased.” Next 1-3 weeks: “We turned positive on USD late last week. After USD soared to 7.2380 and eased off, we indicated that USD has to break above this level before a sustained rise is likely. Yesterday (19 Oct, spot at 7.2230), we highlighted that the risk of USD breaking above 7.2380 is increasing. We added, ‘A break of this level would shift the focus to the Sep high near 7.2670’. While our view was not wrong, we did not expect the strong and swift surge as USD blew past both 7.2380 and 7.2670. Not surprisingly, upward momentum is strong and there is a good chance for USD to break 7.3000 next. The upside risk remains intact as long as USD does not break the ‘strong support at 7.2150 (level was at 7.1800 yesterday).”  
Kuroda Stayed On The Sidelines And The Yen Responded With Losses

Forex: The Day Has Come! USD/JPY Climbed Above 150.00!

Kenny Fisher Kenny Fisher 20.10.2022 12:06
USD/JPY continues to gain ground USD/JPY is almost unchanged today but hit a milestone in the Asian session as it briefly darted above the 150 line, which has psychological significance. This marked the yen’s lowest level since August 1990 as the currency continues to slide. The yen hasn’t recorded a winning session since October 4th and has plunged about 600 points during this period. Later today, Japan releases Core CPI for September, which is expected to rise to 3.0%, up from 2.8% in August. Read next: Tesla Does Not Say Much Directly About The Demand Situation, Ally Financial Sees A Slowdown In Car Loans| FXMAG.COM The Bank of Japan holds its policy meeting next week, but it seems unlikely that it will change its ultra-loose policy. The yen is sinking and inflation is above the Bank’s 2% target, but the central bank is fixated on continuing to provide massive stimulus in order to support the weak economy. Earlier today, Japan’s 10-year government bonds breached the 0.25% cap which the BoJ has fiercely defended, rising as high as 0.264%. The BoJ has responded with an emergency bond-buying package in order to bring yields back below 0.25%. With the BoJ defending its policy and ignoring the yen’s descent, the ball is in the court of the Ministry of Finance (MoF). The MoF dramatically intervened in late September to prop up the yen after it fell below 145, but the move did little more than slow the yen’s descent for a few days. Another intervention is possible, but it would have to be on a larger scale to have any substantial effect on the exchange rate. Finance Minister Suzuki has warned that the government would “properly respond” in the currency markets, but increasingly, the verbal bullets out of Tokyo are being viewed as blanks. With the Federal Reserve showing no signs of easing up on oversize rate hikes, the yen remains at the mercy of the US/Japan rate differential, which continues to widen. The yen’s prolonged downturn looks set to continue, with the currency likely to hit new lows. USD/JPY Technical USD/JPY is testing support at 149.81. Below, there is support at 149.09 There is resistance at 150.04 and 151.32   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY breaches 150 - MarketPulseMarketPulse
Driving Growth: The Resilience of Green Bonds and Shifting Trends in Sustainable Finance

The US Dollar To Indian Rupee (USD/INR) Pair Can Now Drive To Higher Levels

TeleTrade Comments TeleTrade Comments 20.10.2022 12:08
The Indian rupee slipped to a fresh record low of 83.21 against the US dollar on Wednesday. The USD/INR could now target 84.20, then 85.90, economists at Société Générale report. Signals of a meaningful pullback are not yet visible “Weekly MACD is close to the high achieved in 2020 and diverging away from trigger line denoting an overstretched move, however, signals of a meaningful pullback are not yet visible.” “Next projections are located at 84.20 and 85.90.” “Low formed earlier this week at 82.00 must be defended to avert a short-term down move.”
CEEMEA FX Outlook 2023: The Situation Remains Fragile

It Is Expected That Rate Of The EUR/HUF Pair And The EUR/PLN Pair Will Drop

TeleTrade Comments TeleTrade Comments 20.10.2022 12:18
CEE continues to rally driven by lower gas prices. Economists at ING expect EUR/HUF to return to sub-410 levels while EUR/PLN is set to slip back below 4.78. Favourable conditions for CEE to continue to rally “In addition to lower gas prices, we see rising interest rate differentials across the region. In Hungary, we are at a new all-time high after Friday's NBH emergency rate hike and in Poland we are at the highest levels since early September.” “With EUR/USD above recent lows, we thus see favourable conditions for CEE to continue to rally, driven by further gas price declines if the European Commission approves the proposed measures.” “We see a good chance for the Hungarian forint to erase last week's losses and return below 410 EUR/HUF and the Polish zloty to move below 4.780 EUR/PLN.”  
The USD/IDR Pair Is Expected A Further Downside Movement

Indonesian Rupiah (IDR): Bank Indonesia Hikes The Rate To 4.75%

ING Economics ING Economics 20.10.2022 12:38
Bank Indonesia has hiked policy rates by 50bp to shore up the rupiah Indonesia's central bank governor Perry Warjiyo 4.75% 7-day Reverse Repurchase rate   As expected BI tightens by 50bp as expected Bank Indonesia (BI) hiked policy rates by 50bp as expected today. The central bank continued to tighten aggressively to shore up the currency which has faced renewed pressure of late (down 1.73% in October).  The Indonesian rupiah (IDR) had been relatively stable for the early part of the year, aided by hefty trade surpluses. But the heightened risk-off tone and accelerating inflation have the currency currently on the back foot.  BI ramps up rate hikes as inflation heats up Source: Badan Pusat Statistik Far from done BI was a relative latecomer to the central bank rate hike club and we believe that Governor Perry Warjiyo's work is far from over. Inflation will likely pick up further in the coming months which should ensure BI stays hawkish to close out the year. Additional BI rate hikes will also be needed to maintain FX stability, especially with markets pricing in aggressive rate hikes by the US Federal Reserve.  Read this article on THINK TagsIDR Bank Indonesia Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Conflict Over Taiwan Would Trigger A Huge Global economic Shock

Deployment Of US Forces To Defend Taiwan |Because Of Global Price Pressure, The Fed Strategy Will Remain Unchanged And More

Saxo Bank Saxo Bank 20.10.2022 12:43
Summary:  Equity markets rolled over yesterday suffering in the headwinds of a fresh strong rise in US treasury yields, as the entire US yield curve lifted to new highs for the cycle. After the close, the heavily traded Tesla reported disappointing revenue and margins and traded some 6% lower in late trading. Elsewhere, the rise in yields is pushing hard on the JPY to weaken further, but the USDJPY rate of 150.00 it’s clearly a psychological barrier for official intervention-wary traders.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The S&P 500 index closed the day –0.7% lower and the Nasdaq 100 index was down –0.4% (although far lower from the overnight highs posted after the Netflix earnings late Tuesday) Still, this was not that weak a performance, given the fresh strong lift in treasury yields, with the price action holding up relatively well after the close of trading yesterday despite the disappointing Tesla results that took that heavily traded stock down sharply after the close. The further outlook for treasury yields on incoming data, as well as the heavy earnings calendar of next week, are likely to set the tone for equity markets from here. Hong Kong’s Hang Seng (HSIV2) and China’s CSI300 (03188:xhkg) Hong Kong’s Hang Seng (HSIV2) and China’s CSI300 (03188:xhkg) Hong Kong stocks tumbled with Hang Seng Index down 2.4% hitting 13-year lows. Higher U.S. bond yields and the Chinese Yuan weakening to new lows weighed on the markets. To add to the woes, investors have become increasingly concerned about the potential policy implications of the concept of “regulating the means of accumulating wealth” and US-Taiwan discussions on joint manufacturing of defensive capabilities (more below) China Internet names sold off 5% to 9%. CSI 300 declined 0.7%. Semiconductor stocks are the notable outperformers in both the Hong Kong and mainland bourses.  SMIC (00981:xhkg) gained 0.9% and Hua Hong Semiconductor (01347:xhkg) climbed 3.2%. Maximum support for the US dollar from rising treasury yields, but price action uninspiring The US dollar is getting about as much support as it conceivably can from a fresh rise in US treasury yields, but the impact on the currency has been minimal, as it feels as if a large finger has pressed the paus button – could this be a widespread nervousness as traders look at the USDJPY level perched near 150.00, with pressure from rising global yields for the JPY to weaken further, but with market participants knowing that a large bout of official Japanese intervention will be forthcoming at some point above that level? Relatively stable sentiment despite the fresh surge in treasury yields may also be behind the lackluster price action in USD pairs here, with USDCNH correcting back lower after its burst higher yesterday on a strong CNY fixing overnight another source of resistance for the greenback. Crude oil (CLX2 & LCOZ2) in focus again following EIA warnings November WTI extended gains rising above $86/barrel overnight after the EIA yesterday reported US crude stockpiles dropped by 1.73 million barrels last week. Four-week seasonal demand for distillate fuels soared to the highest since 2007 while inventories remained at the lowest point on record for this time of year. Oil stocks charged higher with Baker Hughes, Valero Energy and Halliburton up over 5% each. Gold (XAUUSD) slumps as the dollar momentum returns Gold prices heading lower to test the support at $1620/oz amid risk aversion and higher Fed bets propelling US yields higher and a rebound in the US dollar. Hawkish Fed speak yesterday, together with fresh highs in UK CPI, suggested higher-for-longer inflation and interest rates, while demand for the yellow metal also remains depressed due to ongoing lockdowns in China. US treasuries (TLT, IEF)   US treasury yields lifted all along the curve, with the 2-year rising above 4.55% for the first time and the 10-year yield lifting aggressively to almost 4.15%, well clear of the 4.00% level that seemed to be providing bond market support in recent weeks. What is going on? Fed speakers further up the hawkish ante James Bullard and Neel Kashkari kept up their hawkish Fed rhetoric, in light of the burgeoning global price pressures. Bullard warned that inflation continues to surprise to the upside and the Fed needs to continue to act, also emphasising higher-for-longer rates even if inflation starts to decline in 2023, though he also suggested that “front-loading” of hikes is likely to end early next year (market pricing this anyway). Kashkari (2023 voter) added that there is no reason to think that key price measures have peaked, and he sees little evidence of a labor market softening. He also reiterated the Saxo view that “risk of under shooting on rate hikes bigger than overdoing it”. He also said his best guess is the Fed can pause hikes sometime next year but he favours rate hikes until core inflation starts to cool, noting the Fed's rate changes take a year or so to work through the economy. Chicago Fed President Evans was also on the wires this morning, and given that he’s retiring next year, he was accepting of the fact that “beginning rate hikes six months earlier would have made sense.” Tesla misses on revenue growth and margins, reaffirms longer term growth guidance Investors are used to Tesla beating estimates but last night the EV-maker surprised investors missing revenue and automotive gross margin estimates as the EV-maker faced battery constraints during the quarter and delivery transportation capacity during peak deliveries at the end of the quarter. While the company disappointed against estimates revenue growth was still impressive 56% y/y and the company is reiterating its 50% average growth target over the coming years, something analysts are not agreeing with seeing revenue growth declining to 14% in 2025. Shares were down 6% in late trading after the report. Discussion between the U.S. and Taiwan on joint weapon production According to Nikkei Asia, the Biden administration and Taiwan are in talks for American defense companies to provide Taiwan technology to manufacture weapons in Taiwan or to ship Taiwan-made parts to make weapons in the U.S. This, reading together with U.S. Secretary of State Blinken’s warning this Monday that “a fundamental decision that the status quo was no longer acceptable and that Beijing was determined to pursue reunification on a much faster timeline” and President Biden’s remarks of deploying U.S. forces to defend Taiwan in a CBS 60 Minutes interview last month, stirred up some unease among investors. Separately on Wednesday, Taiwan conducted live-fire military drills on Penghu Island, an archipelago in the Taiwan Strait. Chinese Investors uneasy about the introduction of policy language on wealth regulation Market chatters indicate that some investors are feeling unease about the potential policy implications of the phrase “we will improve the personal income tax system and keep income distribution and the means of accumulating wealth well-regulated” in the Work Report delivered by General Secretary Xi at the Chinese Communist Party’s National Congress last Sunday. The concept of regulating the means of accumulating wealth shows up in an official document for the first time. Weak Aussie September jobs report for September, supporting less hawkish RBA The data showed just 923 jobs were added to the economy, vs the +25k consensus from Bloomberg. It also shows employment is falling far ahead of RBA’s expectations, following last month’s 33,500 jobs being added. The unemployment rate also rose, by less than 0.1 percentage points but remained at 3.5% in rounded terms. It comes as part-time employment fell by 12,400. Recently the RBA noted business insolvencies were rising, and today’s data shows that the official stats are reflecting this too. That said, of the Australian mining companies reporting quarterly result this week, most reported labour shortages are continuing, which is affecting production. What are we watching next? Weaker yen to prop up Japan inflation further   Japan’s inflation data for September is due for release on Friday (tonight), and as signalled by the Tokyo CPI released earlier this month, price pressures are likely to pick up further. Bloomberg consensus expects the core measure (ex-fresh food) to come in at 3.0% y/y from August’s 2.8% y/y while the core-core measure (ex-fresh food and energy) is expected at 1.8% y/y in September from 1.6% y/y previously. The headline is expected to be a notch softer at 2.9% y/y from 3.0% y/y, but still remain way above the 2% target level. Weakness in the yen prompted an intervention from the Bank of Japan in September but the effect faded fast and the currency was significantly weaker in the month, which possible led to import price pressures. Still, the central bank is unlikely to shift its easing stance and will likely continue to wait for the global pressures to ease and USD to top out.         Earnings to watch Today’s earnings focus is on Swedish power and automation equipment maker ABB, diversified and medical equipment maker Danaher, miner Freeport McMoRan and mobile network equipment maker Ericsson. Today: China Mobile, China Telecom, ABB, Danaher, Investor, Philip Morris, Union Pacific, CSX, AT&T, Blackstone, Marsh & McLennan, Yara International, Nordea, Volvo, Ericsson, Freeport-McMoRan, Dow, Snap Friday: CATL, American Express, Schlumberger, Verizon Communications, HCA Healthcare, Sika Economic calendar highlights for today (times GMT) 1100 – Turkey Rate Announcement 1230 – Canada Sep. Teranet/National Bank Home Price Index 1230 – US Oct. Philadelphia Fed Business Survey 1230 – US Weekly Initial Jobless Claims 1400 – US Sep. Existing Home Sales 1400 – US Sep. Leading Index 1430 – US Weekly Natural Gas Storage Change 2145 – New Zealand Sep. Trade Balance 2301 – UK Oct. GfK Consumer Confidence 2330 – Japan Sep. National CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-20-2022-20102022
The Commodities Feed: Stronger Oil Prices Boost US Oil Production and Supply

John J. Hardy Talks With Kim Cramer Larsson About The Technical Situation In US Equities

Saxo Bank Saxo Bank 20.10.2022 14:36
Summary:  Today we look at rising US treasury yields continuing to drive brutal headwinds for risk assets, even if the price action in equity markets was fairly sedate. Meanwhile, the currency situation is extremely spring-loaded around the 150.00 level in USDJPY, which traders are eyeing with concern on the risk of enormous volatility should we trade above that level - which US yields adding energy to upside pressure in the background. Today features Technical Strategist and chartist Kim Cramer Larsson, who takes us through the technical situation in US equities, the US 10-year treasury yield, USDJPY and more. John J. Hardy hosts. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-oct-20-2022-20102022
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

UK Prime Minister, Liz Truss Resigned | Kenny Fisher (Oanda) Comments On GBP/USD

Kenny Fisher Kenny Fisher 20.10.2022 22:01
Prime Minister Truss resigns The political soap opera continues in the UK, with Prime Minister Truss playing the part of the tragic hero. Truss resigned earlier today, which was perhaps not all that surprising given the chaos that has engulfed her government from the get-go. Truss becomes the shortest-serving Prime Minister in British history, with a grand total of 44 days. The Conservatives find themselves in a dreadful predicament and will do their best to avoid an election, with Labour far ahead in the polls. The fiscal U-turns under Truss’s ill-fated leadership have badly damaged the government’s credibility, and the new Prime Minister’s first priority will be to settle things down. Truss’s brief time in office triggered an economic crisis, as the plan for unfunded tax cuts was poorly received, sending GBP/USD to a record low and forcing the Bank of England to intervene and prevent a bond market crash. The new Prime Minister will have their work cut out as they will have to restore investor confidence after a tumultuous six weeks. The country’s economic situation is not looking good. Inflation is back in double-digits, rising to 10.1% in September, up from 9.9% in August and above the consensus of 10.0%. It was a similar story from Core CPI, which edged up to 6.5%, up from 6.4% and higher than the forecast of 6.3%. The Bank of England will have to continue raising rates, but a weak economy means that a recession is likely. The BoE meets next on November 3rd and policy makers will need to deliver a hike of 0.75% or a full point in order to maintain credibility in the fight against soaring inflation. GBP/USD Technical GBP/USD is testing resistance at 1.1254. Above, there is resistance at 1.1399 There is support at 1.1162 and 1.1085 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. PM Truss resigns, British pound gains ground - MarketPulseMarketPulse
The EUR/USD Pair Chance For The Further Downside Movement

Kenny Fisher (Oanda) Talks Euro To US Dollar - 20/10/22

Kenny Fisher Kenny Fisher 20.10.2022 23:11
EUR/USD has posted considerable gains and is back above the 0.98 level. In the North American session, EUR/USD is trading at 0.9828, up 0.57%. US housing, manufacturing data decline As the Federal Reserve continues to deliver outsized interest rate hikes, the financial markets are closely monitoring US economic data, looking for signs of a slowdown. Today’s releases were softer than expected, bolstering the sentiment that the economy is losing steam. The Philly Fed Manufacturing Index came in at -8.7 in September, its fourth decline in the past five months. US Existing Home Sales fell to 4.71 million in September, down from 4.78 million in August and the eighth straight decline. The Federal Reserve meets on November 2nd and another large rate hike is expected. The Fed has pledged to keep its pedal on the gas until inflation is unmistakably on its way down, but inflation has been stubbornly persistent. The Fed’s beige book, released on Wednesday, indicated that inflationary pressures are easing, a possible sign that a peak may not be far off. In the eurozone, the final estimate for September inflation was 9.9%, a drop lower than the initial estimate of 10.0%. Still, this marks a sharp acceleration from the August reading of 9.1%. The main driver of soaring inflation remains energy prices, which are unlikely to drop substantially anytime soon, with winter just around the corner. The ECB meets on October 27th and is expected to deliver another oversized rate hike, most likely 0.75%, at the meeting. The ECB only began tightening in July and is lagging behind most other central banks, with a benchmark rate of just 1.25%. The US/Eurozone rate differential has weighed on EUR/USD, which has plunged about 8% since June 1st. With the Fed remaining aggressive and no end in sight for the war in Ukraine, the outlook for the euro is gloomy. EUR/USD Technical EUR/USD is testing resistance at 0.9814. Next, there is resistance at 0.9900 There is support at 0.9723 and 0.9637 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro gains ground on soft US data - MarketPulseMarketPulse
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

Bears Of The Australian Dollar To US Dollar (AUD/USD) Pairs Cope With The Supports

InstaForex Analysis InstaForex Analysis 21.10.2022 08:04
Yesterday, like the European currencies, the Australian dollar stayed in a wide range, after which it outlined a break through of technical supports. On the daily chart, such support is the embedded line of the downward channel. Overcoming it (leaving the area below 0.6260) opens the next target at 0.6195, there is another price channel line below it, which the price can reach at around 0.6155. The Marlin Oscillator is still resisting such a plan and is growing against the price, which may slow down the aussie and strengthen it against European currencies in the short term. On the four-hour chart, the price is supported by the MACD indicator line. The Marlin Oscillator has already moved into negative territory and is helping the bears cope with the supports to the best of its ability.   Relevance up to 04:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324915
Analysis And Trips For Trading The GBP/USD Pair In Short And Long Positions

The Price Of The British Pound To US Dollar Pair (GBP/USD) Has Potential For Further Drop

InstaForex Analysis InstaForex Analysis 21.10.2022 08:07
On Thursday, Liz Truss announced her resignation as chairman of the Conservative Party of England. As a consequence, with the selection of a new head, she will leave the post of prime minister. But even such an event did not have much effect on the course of trading the British pound. The price failed to overcome the support at 1.1170, rebounded from it by more than 160 points and just as quickly began to approach back to 1.1170. All this is happening under the balance and MACD indicator lines on a daily time frame. Overcoming the support opens the 1.0805 target – the price channel line of the monthly green time frame. On the H4 chart, the price settled again under the MACD line, which confirmed the falsity of yesterday's upward shot above this line. The Marlin Oscillator maintains its positions in the downward trend. We are waiting for the price to fall further.   Relevance up to 04:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324917
The Outlook Of EUR/USD Pair For Long And Short Position

The EUR/USD Pair: The Price Again Rushed To The Nearest Support

InstaForex Analysis InstaForex Analysis 21.10.2022 08:11
The euro bulls did not want to give up easily yesterday - the trading range was 92 points and the day closed with a white candle of 15 points. On the technical side, the price took advantage of the confusion of the Marlin Oscillator at the zero neutral line. But already in the Pacific session, yesterday's growth was blocked, the price again rushed to the nearest support of 0.9724, the Marlin Oscillator is pushing through the support of this zero line. A decline below 0.9724 opens the next target at 0.9520. On the four-hour chart, the price makes a second attack on the support of the MACD line. The price also moved under the balance indicator line, which shows us the shift in the players' mood to sell. The Marlin Oscillator is moving deeper into the downward trend.   Relevance up to 04:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324919
At The Close On The New York Stock Exchange Indices Closed Mixed

The NASDAQ Composite Was Down 0.61% And The Biggest Losers Were Talaris Therapeutics Inc

InstaForex Analysis InstaForex Analysis 21.10.2022 08:14
At the close of the New York Stock Exchange, the Dow Jones was down 0.30%, the S&P 500 was down 0.80% and the NASDAQ Composite was down 0.61%.  The Dow Jones index The leading gainer among the components of the Dow Jones index today was International Business Machines, which gained 5.79 points (4.73%) to close at 128.30. Salesforce Inc rose 3.83 points or 2.49% to close at 157.50. Verizon Communications Inc rose 0.43 points or 1.18% to close at 37.00. The biggest losers were Home Depot Inc, which shed 6.03 points or 2.19% to end the session at 269.46. Caterpillar Inc was up 2.10% or 3.87 points to close at 180.54 while Nike Inc was down 1.96% or 1.74 points to end at 86.83. .  The S&P 500 results Leading gainers among the S&P 500 components in today's trading were Lam Research Corp, which rose 7.81% to 355.87, AT&T Inc, which gained 7.72% to close at 16.74, and shares of Quest Diagnostics Incorporated, which rose 6.32% to close the session at 134.66. The biggest losers were Allstate Corp, which shed 12.90% to close at 117.71. Shares of Union Pacific Corporation shed 6.80% to end the session at 186.45. Quotes of Tesla Inc decreased in price by 6.65% to 207.28. The components of the NASDAQ Composite  Leading gainers among the components of the NASDAQ Composite in today's trading were Nextplay Technologies Inc, which rose 107.31% to hit 0.41, Cabaletta Bio Inc, which gained 50.77% to close at 1.96, and also shares of Save Foods Inc, which rose 31.33% to end the session at 1.97. The biggest losers were Talaris Therapeutics Inc, which shed 43.39% to close at 1.37. Shares of LMF Acquisition Opportunities Inc shed 34.55% to end the session at 6.82. Quotes of Gaucho Group Holdings Inc decreased in price by 30.40% to 0.21. How many fall and rise On the New York Stock Exchange, the number of securities that fell in price (2067) exceeded the number of those that closed in positive territory (1018), while quotes of 114 shares remained virtually unchanged. On the NASDAQ stock exchange, 2037 stocks fell, 1694 rose, and 240 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.54% to 29.98. Commodities Gold futures for December delivery lost 0.17%, or 2.85, to hit $1.00 a troy ounce. In other commodities, WTI crude for December delivery rose 0.50%, or 0.42, to $84.94 a barrel. Futures for Brent crude for December delivery rose 0.25%, or 0.23, to $92.64 a barrel. EUR/USD Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.12% to 0.98, while USD/JPY rallied 0.19% to hit 150.18. Futures on the USD index fell 0.07% to 112.81.   Relevance up to 05:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/297723
PLN Soars to Record Highs Ahead of NBP Decision

The Growth Of The Euro (EUR) And The Pound (GBP) Was Associated With The Resignation Of Liz Truss

InstaForex Analysis InstaForex Analysis 21.10.2022 08:20
EUR/USD 5M The euro/dollar pair managed to rise and fall on Thursday. The most important thing: the price was between the levels of 0.9747 and 0.9844 all day, between which the lines of the Ichimoku indicator also lie. That is, we got an almost perfect flat. Those "flights" during the day that we observed were not provoked by macroeconomic statistics. Not a single important report was published in the European Union yesterday, and there were two absolutely secondary ones in America, the values of which were not "bad" to cause the dollar's fall. We can assume that the growth of the euro and the pound was associated with the resignation of Liz Truss, but how can you say that the departure from the post of head of state of Great Britain is good for the pound? And what does the euro have to do with it? Well, the fall in the afternoon could definitely not have been provoked by anything. Thus, we believe that yesterday's movements are purely technical and somewhat random. In regards to trading signals, everything was not very good. In fact, two signals were generated. In both cases, the price bounced from the 0.9834-0.9844 area. In the first case, 45 points to the downside, in the second - about 30. Thus, Stop Loss should have been set to breakeven for both short positions, at which both positions were closed. Of course, it was possible to close positions manually (since the target level of 0.9752 was never reached), however, the decline was not so great to do it. COT report: The euro Commitment of Traders (COT) reports for 2022 could be used as good examples. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again and the euro is still dropping. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long non-commercial positions dropped by 3,200, whereas the number of short non-commercial positions jumped by 2,900. As a result, the net position declined by 6,100 contracts. However, this fact will hardly influence the market since the euro is still hovering near its multi-year lows. Now, professional traders still prefer the greenback. The number of long contracts exceeds the number of short contracts by 38,000. Thus, the net position of non-commercial traders may grow further without affecting the market. Although the total number of buy and sell positions is approximately the same, the euro continues falling. Thus, we need to wait for changes in the geopolitical and/or fundamental background to influence the foreign exchange market. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 21. Every day is the same! The market is consolidating around the 98th level. Overview of the GBP/USD pair. October 21.The "pendulum" is slowing down, the political absurdity in the UK is gaining momentum. Forecast and trading signals for GBP/USD on October 21. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The downward trend still cannot be considered completely reversed on the one-hour chart, despite the good growth over the past week. The euro cannot consolidate above the level of 0.9844 and above the Senkou Span B line, and now a flat may also begin. All recent movements were close to 20-year lows, from which the pair cannot be "peeled off" in any way. On Friday, trading could be performed at the following levels: - 0.9553, 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as the Senkou Span B (0.9834) and Kijun-sen lines (0.9791). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also additional support and resistance levels, but trading signals are not formed near them. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events and reports are scheduled again in the European Union and the United States. Thus, traders will have nothing to react to during the day, and the pair may remain between the levels of 0.9747 and 0.9844. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 02:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324907
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

Cable Market: The Chances For A New Round Of Downward Movement Can Increase

InstaForex Analysis InstaForex Analysis 21.10.2022 08:25
GBP/USD 5M Yesterday, the GBP/USD currency pair also had time to thoroughly "fly" from side to side. A rather strong upward movement began, within which the pound added 150 points, but in the afternoon it lost about the same amount. As in the case of the euro, macroeconomic statistics were not the reason for such movements. Most likely, even the news of Liz Truss' resignation was not the reason. Or, at least, it is impossible to logically explain why the movements were the way they were. We can even say that the market reacted, but it is very difficult to explain why it reacted this way. And even if it is difficult to explain, it is even more difficult to predict. As a result, the day ended between the Senkou Span B and Kijun-sen lines. Consolidating below the Senkou Span B will return the pound to the downside. In principle, we fully assume that the euro and the pound will resume their decline in the medium term. There are too many "buts'' preventing their succeeding growth. In regards to trading signals, there was no deficit on Thursday. The pair frequently changed direction and moved in a volatile manner. The first buy signal near the level of 1.1212 turned out to be false. The price failed to go up even 20 points, so the position closed at a loss. This was followed by a signal to sell near the same level, after which the coveted 20 points down had been reached. The second position was closed by Stop Loss at breakeven. The third signal near the same level should no longer be worked out. But it was possible to work out two signals near the Kijun-sen line. True, they also did not bring any profit, and both transactions were also closed by Stop Loss at breakeven. COT report: The latest Commitment of Traders (COT) report on the British pound showed a new weakening of the bearish mood. During the week, the non-commercial group opened 6,900 long positions and closed 3,400 short positions. Thus, the net position of non-commercial traders increased by 10,300, which is quite a lot for the pound. One might assume that the actions of the big players and the movement of the pound are finally starting to coincide, as the pound has generally gained over the last period of net growth, but we are worried that this may be another "false alarm". The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound continues to fall in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 88,000 shorts and 49,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 21. Every day is the same! The market is consolidating around the 98th level. Overview of the GBP/USD pair. October 21.The "pendulum" is slowing down, the political absurdity in the UK is gaining momentum. Forecast and trading signals for EUR/USD on October 21. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair may go below the Senkou Span B line on the one-hour chart in the coming hours. If this happens, then the chances for a new round of downward movement will increase dramatically. A rebound from the Ichimoku cloud may provoke a new growth for the pair. On Friday, trading could be performed at the following levels: 1.0930, 1.1212, 1.1354, 1.1486, 1.1649. Senkou Span B (1.1207) and Kijun-sen (1.1291) lines can also be sources of signals. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. The UK retail sales report will be released, which is not important. On the other hand, we have nothing scheduled for the US. However, let us recall that the pound continues to trade in a very volatile manner, which means that strong movements with frequent reversals can be observed today as well. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 02:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324909
The Bank Of Canada (BoC) Is Likely To Respond With Additional Oversize Hikes

Price Of The Canadian Dollar To US Dollar Pair (CAD/USD) Can Make New Lows

TeleTrade Comments TeleTrade Comments 21.10.2022 08:29
The 20-EMA at around 1.3080 has acted as major support for the counter. The dismal market mood is supporting the greenback bulls. The asset may test October high at 1.3978 after overstepping the round-level hurdle of 1.3900. The USD/CAD pair is attempting to re-test the critical hurdle of 1.3811 as the risk-off market mood has strengthened further. S&P500 futures have escalated their losses in Tokyo after two consecutive bearish trading sessions, which indicates that the risk aversion theme will stay for a while. This has also infused fresh blood into the US dollar index (DXY), which has overstepped the round-level resistance of 113.00 in Asia. Also, the 10-year US treasury yields haven’t shown any sign of exhaustion despite a juggernaut rally to near 4.23%. On a daily scale, the asset has remained in the grip of bulls after breaching the upward-sloping trendline placed from May 12 high at 1.3077. The formation of buying tails after a correction to near the 20-period Exponential Moving Average (EMA) at around 1.3680 indicates that the corrective move is concluded now and the asset will resume its upside journey. Also, the upside trending 50-EMA at 1.3445 indicates that the upside bias is intact. The Relative Strength Index (RSI) (14) tested 40.00-60.00 after remaining in the bullish range of 60.00-80.00. A conclusion of the corrective move may drive the momentum oscillator again into the bullish range. Going forward, a break above Wednesday’s high at 1.3810 will send the asset toward the round-level cushion of 1.3900, followed by the previous week’s high at 1.3978. On the contrary, a decisive drop by the asset below the round-level support of 1.3700 will drag the asset toward October 6 low at 1.3565. A breakdown of the latter will bring further weakness in the asset towards October 5 low at 1.3504. USD/CAD daily chart                
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

The Japanese Yen To US Dollar Pair (JPY/USD) Stays Under Bullish Control

TeleTrade Comments TeleTrade Comments 21.10.2022 08:34
USD/JPY picks up bids to renew intraday high near the multi-year top marked on Thursday. Yields remain firmer amid fears of high inflation, and recession. Japan’s Core CPI jumped to the highest in eight years, stronger for the sixth consecutive month. BOJ again plans for emergency bond buying but policymakers resist meddling in the market and defend buyers. USD/JPY stays mildly bid as it pokes the 32-year around 150.25-30 during Friday’s Asian session. In doing so, the yen pair rises for the consecutive 13 days while poking the highest levels since 1990 amid strong yields and the Bank of Japan’s (BOJ) defense of the easy money policy. It’s worth noting that Japan’s inflation data refreshed a multi-year high earlier in the day, which in turn exerted more pressure on the policymakers to intervene in the markets and safeguard the yen. That said, “Japan's core consumer inflation rate accelerated to a fresh eight-year high of 3.0% in September, exceeding the central bank's 2% target for the sixth straight month as the yen's slump to 32-year lows continues to push up import costs,” said Reuters. Following the data, Japanese Finance Minister Shunichi Suzuki said on Friday that authorities were dealing with currency speculators "strictly", as an extended sell-off of the yen kept markets on heightened alert for further dollar-selling intervention by Tokyo. Also, the BOJ announced emergency bond-buying operations for a second consecutive day and increase the amount of bonds it is buying for its scheduled operations, per Reuters. Elsewhere, US Initial Jobless Claims eased to 214K for the week ended on October 07 versus 230K expected and a revised down 226K prior. Further, Philadelphia Fed Manufacturing Survey Index dropped to -8.7 for October versus the -5 market consensus and -9.9 previous reading. Additionally, US Existing Home Sales rose past 4.7M expected to 4.71M but eased below 4.78M prior. Recently, Federal Reserve Governor Lisa Cook mentioned that ongoing rate increases will be required. Amid these plays, the US 10-year Treasury bond yields refreshed a 14-year high the previous day, around 4.22% by the press time. Also, the two-year US Treasury yields rose to the highest levels since 2007 before recently taking rounds to 4.62%. Further, Wall Street closed in the red following an initially upbeat performance while the S&P 500 Futures extend the previous day’s losses with 0.50% intraday downside at the latest. It should be noted that the escalating hawkish Fed calls, versus the BOJ’s dovish done, also underpins the USD/JPY pair’s upside momentum. That said, the CME’s FedWatch Tool suggests a near 98% chance of the Fed’s 75 bps rate hike. Moving on, any market meddling from the Japanese policymakers will be closely eyed and can trigger the USD/JPY sell-off. Until then, the bulls could keep the reins. Also important to watch will be the last dose of the Fed speakers’ comments before the blackout period preceding November’s Federal Open Market Committee (FOMC) meeting. Technical analysis Unless declining back below the six-month-old support line, around 149.70 by the press time, USD/JPY remains bullish.
Economic Calendar Details and Trading Analysis - August 7 & 8

The Indian Rupee (INR) Pair Justifies The Reserve Bank Of India (RBI) Intervention

TeleTrade Comments TeleTrade Comments 21.10.2022 08:49
USD/INR remains pressured after reversing from record high. RBI’s so-called meddling in spot, forward markets defends INR. Treasury yields refresh multi-year high as inflation fears join hawkish central banks. Fedspeak, RBI’s intervention eyed for fresh impulse as buyer push for entry. USD/INR takes offers to renew the intraday low near 82.70 while extending the previous day’s pullback from the all-time high during early Friday. In doing so, the Indian rupee (INR) pair justifies the Reserve Bank of India (RBI) intervention to defend the currency around an all-time low even as firmer yields challenge the pair sellers. Reuters quotes an anonymous trader from a bank in India as saying that the RBI sold USD/INR aggressively on Thursday, while also adding, “RBI likely to protect psychological 83 level on USD/INR and Thursday’s high of 83.25-83.30.” The news also mentioned, “Like in previous sessions of late, the RBI did buy/sell swaps alongside spot dollar sales, pushing forward premiums lower. The USD/INR 1-year implied yield dropped to near 2.50%.” It should be noted that the downbeat oil prices also weigh on the USD/INR due to India’s reliance on energy imports and record current account deficit. Elsewhere, mostly firmer US data and hawkish Fedspeak underpinned the US Treasury yields to refresh multi-year high. However, the US dollar struggles to avoid the weekly loss. US Initial Jobless Claims eased to 214K for the week ended on October 07 versus 230K expected and a revised down 226K prior. Further, Philadelphia Fed Manufacturing Survey Index dropped to -8.7 for October versus the -5 market consensus and -9.9 previous reading. Additionally, US Existing Home Sales rose past 4.7M expected to 4.71M but eased below 4.78M prior. Recently, Federal Reserve Governor Lisa Cook mentioned that ongoing rate increases will be required. Previously, Philadelphia Fed President Patrick Harker mentioned, per Reuters, “The central bank is not done with raising its short-term rate target amid very high levels of inflation.” Moving on, the RBI’s moves will be closely watched to determine near-term USD/INR performance. Also important will be the last dose of the Fed speakers’ comments before the blackout period preceding November’s Federal Open Market Committee (FOMC) meeting. Technical analysis A trend-widening formation called megaphone restricts USD/INR moves between 84.00 and 82.20.
CEE: CNB Strives to Counter Dovish Market Expectations

The New Zealand Dollar To US Dollar (NZD/USD) Pair Has Huge Chance For Further Weakness

TeleTrade Comments TeleTrade Comments 21.10.2022 08:53
NZD/USD sellers attack short-term key support, extends the previous day’s pullback from weekly top. Eight-day-old rising wedge formation joins bearish MACD signal to keep bears hopeful. 200-HMA adds to the downside filters, bulls need validation from the monthly top. NZD/USD appears all set to confirm a one-week-old bearish chart pattern called a rising wedge as sellers poke the support line around 0.5650 heading into Friday’s European session. The kiwi pair refreshed the weekly top before reversing from 0.5743. Even so, the quote stays on the way to the biggest weekly gains since early August. Not only the rising wedge but bearish MACD signals also keep the NZD/USD sellers hopeful of breaking the support near the mid-0.5600s. Even so, the 200-HMA level of 0.5631 acts as an extra filter towards the south before welcoming the bears. Following that, the yearly low of 0.5511 marked in the last week could offer an intermediate halt during the theoretical target surrounding the 0.5400 mark. Alternatively, recovery moves may initially aim for the 61.8% Fibonacci retracement of October 03-13 downside, near 0.5700, before approaching the stated wedge’s upper line, close to 0.5755 by the press time. It should be noted that the NZD/USD pair’s run-up beyond 0.5755 needs validation from the monthly high of 0.5815 to convince the buyers. NZD/USD: Hourly chart Trend: Further weakness expected
CNY Can Appreciate Mildly Through This Year According To Economists At Commerzbank

The USD/CNH Pair Is Looking Forward To Reaching The Weekly High

TeleTrade Comments TeleTrade Comments 21.10.2022 09:08
USD/CNH is eyeing a test of a weekly high at 7.2790 amid a vulnerable market mood. The DXY has refreshed the day’s high at 113.12 amid an improvement in safe-haven appeal. An unchanged PBOC’s monetary policy has kept yuan bulls on the tenterhooks. The USD/CNH pair has shifted its business above the crucial hurdle of 7.2600 after a perpendicular rally from Thursday’s low of 7.2209. The asset is marching vigorously towards the weekly high of 7.2790 as the risk-off impulse has rebounded firmly after a minor optimism. A pullback move in S&P500 futures has terminated and the index futures have started their downside journey. The US dollar index (DXY) has refreshed its day’s high at 113.12 as negative market sentiment has resulted in a flight of safety at the safe-haven counter for the market participants. Now, the DXY is aiming to test the weekly high at 113.21. Returns on US government bonds are buzzing in the global markets after overstepping figures recorded at the time of the sub-prime crisis.  The 10-year US Treasury yields have printed a fresh 14-year high at 4.26%. Meanwhile, investors are shifting their focus toward the S&P PMI data, which will release on Monday. Earlier, the Manufacturing PMI landed at 52.0 while the Services PMI was recorded at 49.3. On the China front, an unchanged monetary policy by the People’s Bank of China (PBOC) has kept the Chinese yuan on the tenterhooks. The central bank maintained the status quo despite the headwinds of weaker economic prospects and sluggish price pressures. Also, the real estate demand is extremely vulnerable, which needed a booster dose. Meanwhile, oil prices have turned sideways after a correction below $85.00 as soaring yields have bolstered signs of recession ahead. It is worth noting that China is a leading import of oil and subdued oil prices could retreat the major.
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The Euro To British Pound (EUR/GBP) Pair Consistently Hit Lower Lows

TeleTrade Comments TeleTrade Comments 21.10.2022 09:13
EUR/GBP has advanced to 0.8740 amid downbeat UK Retail Sales data. A negative divergence formation has bolstered signs of a bullish reversal. The cross is overlapping with the 200-EMA at around 0.8715. The EUR/GBP pair has picked significant bids and has accelerated to near 0.8740 as the UK Office for National Statistics has reported downbeat Retail Sales data. The annual Retail Sales have declined by 6.9%, against the expectations of a 5.0% decline and the prior release of -5.4%. While the monthly retail sales figure remained negative by 1.4% vs. the projections of a 0.5% decline. Meanwhile, public Sector Net Borrowings have remained marginally lower at GBP 19.248B vs. the estimate of GBP 19.325B. On an hourly scale, the asset has displayed a rebound after a bullish negative divergence formation. It is worth noting that the asset was continuously making lower lows while the momentum oscillator, Relative Strength Index (RSI) (14) made a higher low. This indicates a loss in the downside momentum. Also, the momentum oscillator has shifted into the 40.00-60.00 range. The cross is overlapping with the 200-Exponential Moving Average (EMA) at around 0.8715, which signals a consolidation ahead. Going forward, a break above the upward-sloping trendline from October 4 low at 0.8649 will drive the asset towards the round-level hurdle of 0.8900, followed by September 29 high at 0.8980. On the contrary, a drop below Monday’s low at 0.8578 will drag the asset toward August 19 high at 0.8511. A slippage below the latter will expose the cross to August 19 low at 0.8449. EUR/GBP hourly chart  
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

Political Turmoil In Great Britain Is Exerting Pressure On The Decline Of The GBP/JPY Pair

TeleTrade Comments TeleTrade Comments 21.10.2022 09:18
GBP/JPY edges lower on Friday, though the intraday downtick lacks bearish conviction. The recent UK political turmoil and dismal UK macro data continue to weigh on sterling. Rising bets for a full 100 bps BoE rate hike in November help limit any further downfall. The GBP/JPY cross remains on the defensive through the early European session and refreshes daily low, around the 168.15-168.10 region in reaction to the dismal UK macro data. In fact, the UK Office for National Statistics reported this Friday that Retail Sales declined by 1.4% in September, missing estimates pointing to a 0.5% fall. On an annualized basis, the UK Retail Sales plunged -6.9% during the reported month against the 5.0% slide expected. Moreover, the core Retail Sales tumbled 6.2% YoY in September versus -4.1% anticipated and -5.3% previous. The data adds to concerns about the cost-of-living crisis in the United Kingdom amid growing worries about a deeper economic downturn. This comes on the back of the recent UK political turmoil, which undermines the British pound and exerts some downward pressure on the GBP/JPY cross. That said, bets for a full 100 bps rate hike by the Bank of England in November help limit the downside. The Japanese yen, on the other hand, is prolonging its recent depreciating move amid a big divergence in the monetary policy stance adopted by the Bank of Japan and other major central banks. In fact, the BoJ, so far, has shown no inclination to hike interest rates and remains committed to continuing with its ultra-lose policy settings. This further seems to offer some support to the GBP/JPY cross. It, however, remains to be seen if spot prices manage to regain any positive traction amid speculations that authorities might intervene again to stem any further weakness in the domestic currency. This, along with the cautious market mood, amid looming recession risks, could offer support to the safe-haven JPY and contribute to keeping a lid on any meaningful upside for the GBP/JPY cross.
Navigating Interconnectedness: Analyzing Banks' Exposures and Funding from Non-Bank Financial Institutions

Economists Skeptical About The Strength Of The Hungarian Forint (HUF)

TeleTrade Comments TeleTrade Comments 21.10.2022 09:23
The Hungarian forint reached record lows on 13 October. The HUF has since rebounded c.5%, though it remains down 22% year-to-date. Economists at Commerzbank remain sceptical about the HUF strength. EUR/HUF levels seem to suggest that the MNB’s strategy was working “We remain sceptical as far as the strength of the forint is concerned and see it more as a reflection of improved market sentiment. The central bank (MNB) has committed to a mixture of different tools, above all aimed at financial stability and the support of the currency, which in the end make monetary policy measures less transparent. They are less suited for the fight against inflation.” “It might be dangerous for the MNB to hope that inflation rates might ease soon, thus reducing the pressure to take action regarding the key rate (and thus the downside pressure on the forint).” “For the time being, EUR/HUF levels seem to suggest that the MNB’s strategy was working. It remains to be seen how long the market will swallow that. The first test will be the key rate decision on Tuesday, and more importantly the publication of the October inflation data in early November.”
UK PMIs Signal Economic Deceleration, Pound Edges Lower

Restricting China's Access To Advanced Technologies | Advertising Partners From Many Industries Are Reducing Their Marketing Budgets

Saxo Bank Saxo Bank 21.10.2022 09:35
Summary:  With Fed officials keeping up their rate hike rhetoric, swaps are now pricing in a 5% peak rate in the first half of next year. The benchmark 10-year Treasury yield rose 9 basis points to 4.23%, which weighed on equity valuation multiples. Snap earnings also send a warning on tech earnings ahead. UK PM Truss’ resignation would do little to help with the chaos in UK economy and politics. The dollar was mixed, oil was steady, gold retreated as bond-yields rose. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) retreat as bond yields climb US stocks fell for the second day, after Treasury yields rose again, continuing to climb into territory not seen in more than a decade, with Fed officials keeping up their rate hike rhetoric. Swaps are now pricing in a 5% peak rate in the first half of next year. The benchmark 10-year Treasury yield rose 9 basis points to 4.23%, at one point hitting 4.239%, its highest level since 2008. The policy-sensitive yield, the 2-year Treasury traded up five basis points to 4.608%. As such this makes high PE tech stocks look expensive, particularly as the Nasdaq only offers a yield of 0.97%, and the S&P500 has an average yield of 1.8%, and the Dow Jones with a yield of 2.2%, all at a time when US corporate earnings are falling for the first time this year. The Nasdaq 100 fell 0.5% and the S&P 500 erased an earlier gain of more than 1%, before it ended 0.8% lower. Utilities down 2.5%, were the worst performing sector in the S&P 500. Communication Services outperformed, led by AT&T (T:xnys) which jumped 7.8% after the telecommunications giant reported earnings beating estimates and raising profit outlooks. 10-year U.S. treasury yields made a new 14-year high at 4.23% (TLT:xnas, IEF:xnas, SHY:xnas) U.S. treasuries sold off for a second day in a row, with the 2-year yield climbing 5bps to 4.615 and the 10-year yield 9bps higher at 4.23%, the highest levels in 14 years. Yields surged after the Philadelphia Fed President Harker said he was expecting the Fed Fund rate to be “well above 4% by the end of the year” and Fed Governor Cook said fighting inflation “will require ongoing rate hikes and then keeping policy restrictive for some time.” Hedging for new issues in the corporate space also contributed to the rise in yields. Hong Kong’s Hang Seng (HSIV2) China’s CSI300 (03188:xhkg) Hong Kong stocks tumbled with Hang Seng Index down 1.4% hitting 13-year lows. The bounce on the news of China shorting quarantine requirement for inbound travellers failed to hold. Higher U.S. bond yields and the Chinese Yuan weakening to new lows weighed on the markets. To add to the woes, investors have become increasingly concerned about the potential policy implications of the concept of “regulating the means of accumulating wealth” introduced in the Work Report delivered at the Chinese Communist Party’s National Congress last Sunday and the newswire report that the U.S. and Taiwan are in discussion of jointly manufacturing weapons. Chinese leading banks kept the 1-year and 5-year Loan Prime Rates unchanged. China Internet names sold off 3% to 8%. The EV space remained weak, with leading names falling by 2% to 6%. JD Health (06618:xhkg) rose 7.1% on share buyback news. Semiconductor stocks surged in Hong Kong and mainland bourses. Reportedly, the Ministry of Industry and Information Technology summoned executives of microchip manufacturers to discuss the latest moves from the U.S. to contain China’s access to U.S. semiconductor technology and pledged support to the domestic semiconductor industry. In addition, mainland securities firms published reports saying that China’s domestic chip-making industry will benefit from the whole-nation systemic initiatives to develop strategic technologies proposed at the CCP’s National Congress. Semiconductor names surged both in Hong Kong and mainland bourses, with Hua Hong Semiconductor (01347:xhkg) rising 5.6%, SMIC (00981:xhkg) climbing 1.6%, and Naura Technology (002371:xsec) limit up 10%. CSI 300 gained 0.6%. Australia’s ASX200 (ASXSP200.1) falls 0.8% on Friday, losing 1.2% on the week. Focus is on Lithium and Coal company earnings, from Allkem to Whitehaven   The following companies reporting quarterly and revenue numbers are a focus today; with Australia’s second biggest lithium company, Allkem reporting (AKE) quarterly production that missed expectations, seeing its shares decline almost 4%. Investors focused on the mining giants guidance for the year ahead with Allkem noting it expects lithium carbonate prices to be higher by 15% this quarter, than the last. Meanwhile, it reported lower grades, flagged issues including logistics delays in South America and on-going labour and equipment shortages in Western Australia. As a result, production at its South American Olaroz Stage 2 project is now delayed and planned for Q2 CY23. In good news though for Australia’s second biggest lithium company, Allkem, its net cash rose to $447 million (as at Sept. 30, up from $28.9 million from June 30). In Coal news Whitehaven Coal (WHC) shares rocked 3.2% higher after 16.6 million in block trades pushed its shares up, with the block of trades equating to 2.1% of its float. Also in Coal news, Coronado Global (CRN) results are set to be released and pulled apart, with the coal price in record high neighborhood, despite falling 13% from its high. It will be interesting to glean into their outlook for the year, particularly as coal demand usually peaks in January. For Coronado, focus will also be on the potential merger with Peabody. Other companies to watch include, wealth and financial planning business, AMP (AMP) with focus to be on how they can return $1.1b capital to investors in FY23. And in industrials, eyes will be on rubbish business, Cleanaway (CWY), who is holding its Annual Meeting. Traders will be looking to see if Cleanaway changes its earnings (Underlying Ebitda) forecast that’s pegged to be between A$630m to A$670m. USDJPY breaks 150, next to watch is 153 USDJPY finally broke above the key 150 level yesterday, the level above which many expected intervention. Officials have been jawboning the pair, including FinMin Suzuki this morning saying that they continue to watch the markets with a sense of urgency. He also seemed cautioned by the rattle in the UK markets, as suggested by his comments that they will pursue fiscal health so that market trust isn’t lost. BOJ meeting next week is key, although a change in policy stance cannot be expected. The break of 150 now exposes 153 levels in USDJPY. Crude oil (CLX2 & LCOZ2) Gains in crude oil on the back of expectations of China easing inbound tourism policy restrictions, but gains were later reversed with focus still on US efforts to curb price increase in energy. While the 15mbbl of release announced by President Biden is a part of the larger 180mbbl release that commenced earlier this year, focus is also on how the US strategic reserves will be refilled. WTI futures were seen back below $85/barrel while Brent was close to $92.   What to consider? What could the new UK PM bring in terms of policy change? After significant economic and political turmoil, Liz Truss resigned as Britain’s prime minister after just 44 days in office. The easy choice remains Rishi Sunak, former chancellor, who stood against Truss for the Tory leadership in the summer and predicted correctly that his rival would set off panic in the markets if she pressed ahead with a massive package of debt-funded tax cuts. The other alternative being ex-PM Boris Johnson or Penny Mordaunt, who also stood for the Tory leadership in the summer. Fiscal policy is unlikely top see a major shift with the new PM, as UK administration now remains extremely sensitive to market events. There is little they can do to prevent the upcoming recession or bring back asset allocation to UK assets. Market Fed rate expectations reach 5% Early 2023 Fed rate expectations have now reached over 5%, with the Fed funds rate now fully pricing in a 75bps rate hike for the November meeting and a strong probability of another 75bps rate hike at the December meeting. While the Fed has reiterated it will continue to hike more next year before it pauses, but the market pricing is now running higher than what the dot plot has hinted earlier. So the room for the Fed to surprise on the hawkish side in diminishing, especially if core inflation continues to surprise on the upside. Fed speakers are starting to turn slightly cautious looking at the market pricing, with Charles Evans last night saying that if the Fed pushes its policy rate much further than planned it could start to weigh on the economy and says he is worried that at some point rate increases could have a non-linear impact with businesses becoming more pessimistic. Harker (2023 voter) and Cook reasserted that the Fed needs to continue to hike but will noted that the Fed can pause sometime next year to assess the impact of its tightening on the economy. Another fall in weekly jobless claims for the Oct 15 week continued to suggest labor market strength despite the disruptions from recent hurricanes. China is considering reducing inbound quarantine Reportedly, the Chinese authorities are considering to reduce the current 7 days in hotel plus 3 days at home quarantine requirement for people travelling into China to 2 days in hotel plus 5 days at home. While the move may be small in magnitude, and still not confirmed by the authorities, it may have signaling power in terms of more flexbility in the day-to-day implementation of the zero Covid policy which is constraining consumption, investment and tourism. . US to expand China tech ban Bloomberg reports, citing “people familiar with the situation”, that the Biden administration is considering, at an early stage, new export bans limiting China’s access to advanced computing technologies that can be used in quantum computing and artificial intelligent software. Cyber security attacks on the rise globally, US Home Secretary warns to expect more in Asia A US official has warned that aggressive cyberattacks will rise from Russia, China, North Korea, Iran, particularly against Asian countries. It comes after a very strong spate of cyberattacks occurred globally this month, from Microsoft’s data being breached, along with the Japanese Securities Dealer Association, Australia’s Taxation Office batting three attempts per month, to the Indianapolis Housing Agency’s systems being breached as well, as well as one of Australasia’s telcos, and an ASX listed insurance group, Medibank. This reflects the need for companies and organizations to ramp up cybersecurity spending now and on an ongoing basis. This brings to mind perhaps the importance of remembering the need for diversification and possibly considering exposure to Cybersecurity stocks and ETFs. For more information, refer to our cybersecurity basket. Japan inflation hits 3%, update to CPI forecasts expected next week Japan’s core inflation touched 3% levels for the first time in over 30 years, matching expectations. Headline inflation came in higher-than-expected at 3.0% y/y while core-core ex fresh food and energy) measure was up at 1.8% y/y from 1.6% y/y previously. The stark yen weakness can prompt further import price pressures in Q4 as well, and demand is likely to push higher as well with Japan reopening its borders from the pandemic restrictions. Bank of Japan meets next week, and while policy change is hard to expect, it is expected that the central bank will raise the CPI forecast for fiscal 2022 (year ending March) from 2.3% to high-2% range. Snap earnings send tech earnings fear soaring Snap (SNAP:xnys) plunged 26.5% in the after-hour trading, following the company reported Q3 revenues growth at 6% Y/Y, largely in line with street estimates, but said its internal forecast for the Q4 revenues growth is decelerating to about flat year on year (vs market expectations of +6% Y/Y). The social media company said that they are finding “advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven pressures, and rising costs of capital.”   For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-21-oct-21102022
Liz Truss The Shortest Prime Minister In The History Of The Great Britain | Crude Oil Is Growing

Liz Truss The Shortest Prime Minister In The History Of The Great Britain | Crude Oil Is Growing

Saxo Bank Saxo Bank 21.10.2022 09:46
Summary:  Equity markets feebly attempted another rally yesterday, but the headwinds of seemingly ever-rising yields proved too strong, sending the indices sharply back lower to the lowest close in three days. This is still a relatively firm performance, given the scale of the rise in yields. Elsewhere, the USDJPY 150.00 level only proved a barrier for about a day, as the weight of rising yields saw the price action spilling higher above this level, with no signs yet of fresh official intervention against JPY weakness.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Yesterday saw a session relatively like the prior one, as an early rally simply failed to find sustenance in the face of the ongoing grind higher in US treasury yields. Still, market sentiment seems remarkably quiet despite the strong headwinds of the 25-basis point jump in longer Treasury yields this week. Next week is an important one for equities as the earnings season hits its peak with most of the megacap companies in the US reporting earnings, with the price action currently buried in the middle of the two-week range ahead of today’s session. Hong Kong’s Hang Seng (HSIV2) and China’s CSI300 (03188:xhkg) Hang Seng Index and CSI300 fluctuated in a narrow range and were down modestly. In Hong Kong, Chinese developers and China Internet stocks bounced. In mainland bourses, solar, wind power, education, nuclear power, and properties outperformed. General market sentiment is weak as U.S. bond yield risen to new highs and investors pondering the policy implications from the Chinese Communist Party’s National Congress. USD finds stride again on higher Treasury yields, USDJPY spilling above 150.00 The US dollar behaved rather oddly in recent sessions in trading sideways even as US treasuries continue to provide strong support for the currency. Hesitation yesterday from USD bulls may have been on concern that official intervention and choppy price action across USD pairs might await if USDJPY attempted to trade above the psychological 150.00 level. But that level fell late yesterday without any real fuss, trading nearly to 150.50. Still, while USDJPY moves are heavily correlated with the fresh rise in US Treasury yields, it’s interesting that another 50 basis point jump in long US treasury yields to new 14-year highs has not seen new cycle lows in EURUSD and many other USD pairs. Crude oil (CLZ2 & LCOZ2) Crude oil is among just a handful of commodities trading higher in a week that has seen another sharp jump in US bond yields drive down growth expectations. Crude and its related fuel products however continue to be supported by the risk of tightness driven by a period of supply uncertainty in the coming months as OPEC+ cuts supply, and the EU implements sanctions on Russian oil. In addition, uncertainty over Chinese demand as the zero Covid tolerance is being maintained and further incremental SPR sales of 15 million barrels will continue to weigh on prices in the short term. All developments, however, that are likely to keep crude oil rangebound for now, with Brent finding support below $90. Focus next week being earnings from six Big Oil companies, led by Exxon, Chevron and Shell. Gold (XAUUSD) Gold trades down 1.5% on the week close to key support at $1617, the September low and 50% retracement of the 2018 to 2022 rally. A second week of weakness being driven by an across the curve surge in US treasury yields with the ten-year yield rising 23 basis points on the week to 4.25%. Hawkish Fed comments and no signs of economic data showing the much-needed slowdown, has seen the market price in a Fed funds rate above 5% by early next year. The exodus from bullion backed ETFs has gathered pace this week as investors instead focus on increasingly attractive bond market yields, not least the two-year yield at 4.6% yield. Gold will likely continue to struggle until we reach peak hawkishness and/or the dollar starts to weaken. US treasuries (TLT, IEF) US treasury yields lifted all along the curve again yesterday, posting new highs for the cycle, with rises at the long end outpacing those at the short end, with the 2-10 inversion up to –37 basis points versus the cycle low below –50 bps in Sep and earlier this month. Traders are perhaps awaiting incoming data before trading shorter yields, now that the market has priced the Fed funds rate to reach above 5.00% by early next year (priced to do so at the March 2023 FOMC meeting). What is going on? UK Prime Minister Liz Truss resigned in a short statement yesterday … becoming the shortest serving Prime Minister in Britain’s history. She will stay in power until a new leader of the Conservative party can be chosen. The leading candidate is former Chancellor Rishi Sunak and other top contenders include Boris Johnson as the Conservative party has fallen to a record low in the polls against Labour. Japan inflation hits 3%, update to CPI forecasts expected next week Japan’s core inflation touched 3% levels for the first time in over 30 years, matching expectations. Headline inflation came in higher-than-expected at 3.0% y/y while core-core ex fresh food and energy) measure was up at 1.8% y/y from 1.6% y/y previously. The stark yen weakness can prompt further import price pressures in Q4 as well, and demand is likely to push higher as well with Japan reopening its borders from the pandemic restrictions. Bank of Japan meets next week, and while policy change is hard to expect, it is expected that the central bank will raise the CPI forecast for fiscal 2022 (year ending March) from 2.3% to high-2% range. UK Retail Sales volumes slide badly again in September Real (volume-based) sales were down for a second consecutive month at –1.4% MoM and –6.9% YoY, with the ex Petrol sales at –1.5% MoM and –6.2% YoY. China is considering reducing inbound quarantine The Chinese authorities are considering reducing the current 7 days in hotel plus 3 days at home quarantine requirement for people travelling into China to 2 days in hotel plus 5 days at home. While the move may be small in magnitude, and still not confirmed by the authorities, it may have signaling power in terms of more flexibility in the day-to-day implementation of the zero Covid policy which is constraining consumption, investment and tourism.Snap earnings send tech earnings fear soaringSnap (SNAP:xnys) plunged 26.5% in the after-hour trading, following the company reported Q3 revenues growth at 6% Y/Y, largely in line with street estimates, but said its internal forecast for the Q4 revenues growth is decelerating to about flat year on year (vs market expectations of +6% Y/Y). The social media company said that they are finding “advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven pressures, and rising costs of capital.” Gas prices in Europe and US see steep weekly declines US natural gas futures are heading for their longest stretch of weekly declines since 1991 as stockpiles continue to build at a faster than expected pace ahead of winter. The November (NGX2) front month contract trades down by 18% on the week and down 44% since the August peak, driven by mild autumn weather and rising production. In addition, the Freeport LNG export terminal explosion on June 8 has reduced exports, and the terminal will open in November at 85% capacity. In Europe, the TTF price trades down 10% has bounced strongly after almost reaching €100/MWh earlier in the week, a level we do not expect to be challenged until later in the winter when demand becomes more visible. With prices falling and almost full inventories, the political resolve to introduce a price cap has faded, hence the bounce. What are we watching next? US is considering national security reviews of Elon Musk business activities ... according to unnamed sources in a Bloomberg story. These would include the acquisition of Twitter and SpaceX’s Starlink satellite network. Musk has expressed his view on the war in Ukraine and investors in his Twitter takeover include Saudi and Chinese individuals. Tesla also has a strong presence in China, an awkward situation as the US has moved recently to cut off China’s access to advanced semiconductor tech. Market Fed rate expectations reach 5%, can they continue to rise? Early 2023 Fed rate expectations have now reached over 5%, with the Fed funds rate now fully pricing in a 75bps rate hike for the November meeting and a strong probability of another 75bps rate hike at the December meeting. While the Fed has reiterated it will continue to hike more next year before it pauses, market pricing is now running higher than the September FOMC dot plot forecasts. Some Fed speakers are starting to turn slightly cautious looking at the market pricing, with Charles Evans last night saying that if the Fed pushes its policy rate much further than planned it could start to weigh on the economy and says he is worried that at some point rate increases could have a non-linear impact with businesses becoming more pessimistic. Harker (2023 voter) and Cook reasserted that the Fed needs to continue to hike but will noted that the Fed can pause sometime next year to assess the impact of its tightening on the economy. Another fall in weekly jobless claims for the Oct 15 week continued to suggest labor market strength despite the disruptions from recent hurricanes. Earnings to watch Today’s earnings included the report from the world’s largest battery market CATL overnight, with a focus in the US session on consumer demand and consumption patterns in today’s American Express earnings report as well as the largest US oilfield services company Schlumberger. Today: CATL, American Express, Schlumberger, Verizon Communications, HCA Healthcare, Sika Economic calendar highlights for today (times GMT) 1230 – Canada Aug. Retail Sales 1340 – US Fed’s Evans to speak 1400 – Euro Zone Oct. Consumer Confidence Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-21-2022-21102022
Unraveling UK Inflation: The Bank of England's Next Move

Comments Of British Finance Minister Jeremy Hunt Did Not Help The British Pound (GBP)

TeleTrade Comments TeleTrade Comments 21.10.2022 10:04
British finance minister Jeremy Hunt reiterated on Friday, “we will put public finances on a sustainable path as we grow the economy.” Additional quotes "Strong public finances are the foundation of a strong economy. To stabilize markets.” “We will do whatever is necessary to get drive down debt in the medium term and to ensure that taxpayers’ money is well spent." Market reaction The pound finds little respite from Hunt’s comments, as GBP/USD drops 0.38% on the day at 1.1188, as of writing.
The Bank Of England Will Be Under Pressure To Continue Hiking Aggressively

The Political Turmoil Has Increased The Pound (GBP) And British Government Bonds

InstaForex Analysis InstaForex Analysis 21.10.2022 11:31
The pound sterling is finishing this week with wild gyrations in an immediate response to the resignation of Liz Truss as a Prime Minister. As a result, GBP's rapid rally was disrupted by a slump, thus causing a roller coaster in the GBP/USD pair. The GBP's reaction The first GBP's reaction to the news on Liz Truss stepping down was a rally. In light of the news, the sterling climbed to 1.1300. On Thursday evening, October 20, GBP/USD printed a high at about 1.1336. Analysts spoke about an active rebound of the sterling and a decline in the US dollar in parallel. Decision of Liz Truss  Yesterday, the British Premier announced her decision. She remains at the helm of the government until her successor is elected. A lot of market participants suppose that former Prime Minister Boris Johnson could return to the top job. Another contender is Rishi Sunak who is now seen a favorite to replace her. Interestingly, Liz Truss acted as the British Prime Minister for only 44 days, making her the shortest serving-leader in UK history. The financial aid package suggested by Liz Truss was roasted by MPs and recognized as inefficient. Eventually, her mini-budget was terminated because it triggered turmoil across financial markets and undermined Great Britain's reputation in terms of financial stability. Paul Dales, Chief UK Economist at Capital Economics, thinks that "Whoever takes over at Prime Minister from Liz Truss will probably have to tighten fiscal policy in the Medium-Term Fiscal Plan on 31st October (rather than just reverse the previous loosening) to prove their fiscal restraint to the financial markets. As such, it's possible that the recession will be deeper." Due to this policy on the back of rampant inflation, the recession challenge is likely to worsen with GBP contracting at a fast pace. "Weaker GDP will contribute to an easing in domestic price pressures, but just not soon enough to prevent the Bank of England from raising interest rates from 2.25% now to 5.00%," the economist said. Market expectations In this environment, market participants expect the Bank of England to soften its stance on rate hikes. However, some experts don't recommend that the market should rely on significant softening by the monetary authorities. William Mersters, senior UK sales trader and analyst at Saxo Bank reckons that "Sterling's game of snakes and ladders is far from over, yet it's unlikely GBP will show many signs of long-term recovery." "The economy is likely to continue to suffer at the hands of rising inflation, which has led to crippling everyday costs affecting households and businesses up and down the UK, reiterated by yesterday's stubbornly high CPI announcement," the experts explains.  GBP/USD On Friday morning, October 21, the pound sterling dipped 0.21% to 1.1215 against the US dollar following a spike to 1.1338 recorded yesterday. Earlier, following the announcement by Liz Truss, the sterling loosened its grip over the greenback. As a result, GBP/USD declined to 1.1187 and got stuck in this area with minor upticks. Citing Joel Kruger, market strategist at LMAX Group, "The event does not come as a surprise as the pressure for this inevitability was building in recent days. We don't expect to see much downside risk to the Pound from the event, and if anything, wouldn't be surprised to see some demand as the market looks to find comfort in the alternative." Analysts share the viewpoint that the resignation of Liz Truss is to blame for short-term chaos in financial markets. Nevertheless, the stock market is on the path to recovery. Ongoing political jitters have been bullish both the pound sterling and for British government bonds. Experts are betting on the sterling's strength in the long term, even though its dynamic is currently marked by strong gyrations.   Relevance up to 08:00 2022-10-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324941
The Run Higher In Japanese Yields Is Likely To Create Further Volatility In Global Markets

Japan Is Ready To Allocate 20 Trillion JPY To Fund The Economic Stimulus Package

TeleTrade Comments TeleTrade Comments 21.10.2022 12:05
Kyodo News Agency reports, citing sources, Japan aims to get cabinet approval for an economic stimulus package spending plan on October 28. The Japanese government and ruling coalition are considering state outlays of more than JPY20 trillion to fund the economic stimulus package, Kyodo reported. Market reaction Amidst the latest Japanese fiscal headlines and renewed US dollar strength, USD/JPY is seeing a fresh leg towards 151.00, fresh 32-year highs. The pair was last seen trading at 150.85, adding 0.48% on the day.
Bestway Might Have Larger Designs On The UK's Second Biggest Supermarket

The Political Situation In The UK Poses A Challenge For Politicians And Causes Concern In The Market

TeleTrade Comments TeleTrade Comments 21.10.2022 12:11
It is unlikely that UK politicians are going to regain market confidence any time soon. Therefore, the British pound is set to remain under pressure, economists at Commerzbank report.  UK political developments to keep investors on tenterhooks “All the issues like high inflation, the looming recession and the effects of Brexit, which were in place prior to the government crisis and constitute a considerable challenge for the politicians are likely to ensure that markets remain cautious.”  “Against the background of a struggling economy, the BoE is likely to fight high inflation levels comparatively cautiously so that monetary policy will continue to put pressure on sterling. The fact that the BoE has intervened on the markets with bond purchases, thus threatening its credibility, is not likely to be forgotten easily by the markets either.”
Softer New Jobs Reading Would Likely Weigh On The Canadian Dollar

Fed Members Claim That Rates Need To Rise To Control Inflation

InstaForex Analysis InstaForex Analysis 21.10.2022 12:16
USD/CAD closed higher after Philadelphia Fed President Patrick Harker said the central bank will raise rates above 4%. Most likely, it will remain at this level, or increase further if needed. Fed member Lisa Cook said the same thing, stressing that rates need to continue to rise to control inflation. The current rate is between 3% and 3.25%. This scenario creates opportunities to buy the pair. Since a three-wave pattern (ABC) developed, where wave "A" represents the buying pressure from yesterday, traders can enter the market by taking long positions to the 61.8% and 50% retracement level. Stop loss could be set at 1.36500, then exit the market on the breakdown of 1.38. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 09:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324955
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

Ole Hansen And John J. Hardy Talks About The US Treasury Yields, Natural gas, Gold And More

Saxo Bank Saxo Bank 21.10.2022 12:37
Summary:  Today we note the remarkable continued rise in US treasury yields as the 10-year Treasury benchmark reached 4.25%, and the perhaps equally remarkable lack of significant impact on risk sentiment and the US dollar from this latest surge in yields. We also look at the latest on natural gas, plummeting cotton prices and gold, FX themes, the busy calendar ahead for equity earnings and macro data and central bank meetings next week and more on today's pod, which features Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-oct-21-2022-21102022
EM Index Inclusions and Exclusions: India Thrives, Egypt Faces Challenges

The USD/JPY Pair Above 150! | Who Will Replace Liz Truss? | The Central Bank Of Turkey Cut Interest Rates

Swissquote Bank Swissquote Bank 21.10.2022 13:30
Liz Truss resigned. Normally, a PM resignation means uncertainty and limited visibility; it’s not a preferred scenario for the market. But the little time Liz Truss stayed in power was so hectic that investors welcomed the news that she departs sooner rather than later. All eyes are on who will replace Liz Truss? Forex In the FX, the US dollar continues extending its rally across the board, and there is nothing the other currencies can do. The dollar-yen is now trading above the 150 level, with prospect of another Bank of Japan intervention. The Central Bank of Turkey cut interest rates by another 150bp yesterday. Turkish stocks gained, as Turkish Airlines hit 100 lira level. The results American Airlines revenues grew 13% compared to the same time in 2019, and other airline companies also hinted at strong results. Snap, however, nosedived 27% in the afterhours trading, after reporting the lowest ever quarterly sales growth due to lower advertising spending. On the macro front, the Philly Fed manufacturing index came in softer than expected, but the weekly jobless claims fell – which certainly fueled the hawkish Fed expectations. Watch the full episode to find out more! 0:00 Intro 0:24 Who will be the next UK PM? 4:21 FX update: USDJPY above 150! 5:09 Turkey cuts, stocks rally 7:37 Airlines report strong results, Snap dives 8:37 Why the US jobless claims keep falling?! Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Liz #Truss #resignation #Rishi #Sunak #Boris #Johnson #Penny #Mordaunt #GBP #UK #CBT #TRY #TurkishAirlines #AmericanAirlines #Snap #earnings #USD #JPY #BoJ #PhillyFed #jobless #claims #Fed #hawks #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH      
Navigating Disclosure and Standardisation: Policy Amidst Turbulence in Sustainable Finance Market

The USD/BRL Pair: There Is A Risk Of A Deeper Pullback

TeleTrade Comments TeleTrade Comments 21.10.2022 13:40
USD/BRL recently defended the bullish gap near 5.01 resulting in a steady bounce. Only a dip below here would risk a deeper pullback, economists at Société Générale report. USD/BRL to target 5.51 if 5.42 gives way “USD/BRL is evolving within two converging trend lines forming a symmetrical triangle. The pattern denotes a clear direction is lacking. This is also highlighted by crisscross moves around the 200-Day Moving Average.”  “If the pair breaks above the upper limit at 5.42, a move towards July high of 5.51 and the descending trend line drawn since 2020 at 5.62/5.66 is expected. This is an important resistance zone.” “Only if the pair breaks below 5.01 would there be a risk of a deeper pullback.”
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The Inflation Report Is Important As The Bank Of Canada Will Meet Next Week

Kenny Fisher Kenny Fisher 21.10.2022 13:58
The Canadian dollar is in negative territory today, as the US dollar is higher against the major currencies. In the European session, USD/CAD is trading at 1.3827, up 0.45%. Canada retail sales expected to improve Canada releases retail sales for August later today. The July data was weak, with retail sales at -2.5% and core retail sales at -3.1%. The consensus for August stands at 0.4% for the headline reading and 0.2% for core retail sales. The July release was the first decline for both indicators in seven months, and another decline would raise concerns about the strength of consumer spending, a key driver of economic activity. Inflation remains high and is still the Bank of Canada’s number one priority. Headline inflation ticked lower to 6.9% in September, down from 7.0% in August. Still, the reading was higher than the consensus of 6.8%. Core inflation remains even more stubborn and rose unexpectedly to 6.0%, up from 5.8% and above the forecast of 5.6%. The inflation report takes on added significance as the Bank of Canada meets next week. Policy makers are virtually certain to raise rates, but by how much? The rise in core inflation was not a surprise for the central bank, as most BoC core inflation indicators are around 6% and have not shown any signs of peaking. The takeaway from this week’s inflation data bolsters the case for a 75 basis point hike, with inflation remaining stubbornly high. The Fed has given no signals that it plans to ease up on rate hikes anytime soon, and this hawkish stance was reaffirmed by Philadelphia Federal Reserve President Patrick Harker on Thursday. Harker said that higher interest rates had failed to curb inflation, and the Fed would have to continue raising rates, which he said will be “well above” 4% by the end of the year. Currently, the benchmark is at 3.25%, with the Fed holding its next meeting on November 2nd. . USD/CAD Technical 1.3854 and 1.4005 are the next resistance lines There is support at 1.3731 and 1.3580 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

The Reserve Bank Of Australia (RBA) Has Eased Up On Tightening

Kenny Fisher Kenny Fisher 21.10.2022 14:10
AUD/USD has dropped lower today and is trading at 0.6252, down 0.43%. Fed expected to remain aggressive The Federal Reserve has signalled that it plans to remain hawkish, as the relentless battle with spiralling inflation continues. This aggressive stance was reaffirmed by Philadelphia Federal Reserve President Patrick Harker on Thursday. Harker stated that higher interest rates had failed to curb inflation, and the Fed would have to continue raising rates “for a while”. He added that rates would be “well above” 4% by the end of the year. Currently, the benchmark is at 3.25%, with the Fed holding its next meeting on November 2nd. The markets have received the Fed’s message loud and clear, and have priced in a 0.75% hike at the November 2nd meeting and in December. The Fed has already raised rates by 0.75% at three straight meetings, and the steep rate-tightening cycle is set to continue, which is good news for the strong US dollar. Australia released September’s employment report on Thursday, which indicated that the labour market remains robust. The economy added 13,300 full-time jobs, with a decline of 12,400 part-time jobs. This follows a superb gain of 55,000 jobs in August. The strong labour market has allowed the Reserve Bank of Australia to hike rates in order to combat inflation, but the central bank has eased up on tightening. The RBA surprised the markets with a small rate hike of 0.25% at its October meeting, which was smaller than expected.  At the meeting, the RBA noted that inflation remains too high, but the modest rate hike fits in with that the central bank’s projection that inflation will peak in early 2023. The RBA meets on November 1st, a few days after the September inflation report, which will likely be a major factor in the RBA’s rate decision. The markets have priced in 0.25% increases at the November and December meetings. . AUD/USD Technical AUD/USD continues to test support at 0.6250. The next support level is 0.6121 There is resistance at 0.6331 and 0.6460 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

Europe Has Moved From The World's Largest Trade Surplus Bloc To A Deficit Bloc

Saxo Bank Saxo Bank 22.10.2022 08:13
Summary:  Barring a sudden resumption of Russian natural gas flows to Europe in the coming quarter, an economic winter is coming for Europe and the euro, as well as satellite currencies sterling and the Swedish krona. Despite the ECB and other central banks - with the extremely notable exception of the Bank of Japan - playing some catchup with the Fed in delivering policy tightening in Q3, the Fed remains the central bank that "rules them all". We will need to see the Fed easing again before we can be sure that the US dollar is finally set to roll over. USD: after the Fed tried to get cute on a policy deceleration, it found religion again.  The US dollar found a temporary peak in the wake of the June 16 FOMC press conference as the market figured that the first 0.75 percent hike since 1994 would prove a peak in Fed hawkishness for the cycle. For its part, the equity market bear market low of the cycle at the time of writing was posted on the day after that FOMC meeting. Risk sentiment found further fuel and the USD dipped slightly heading into the late July FOMC meeting as Powell offered insufficient pushback against the market, which was beginning to price that the Fed policy rate would peak by as early as December 2022 and begin rolling over in the first half of 2023. However, beginning in early August Fed members quickly moved to push back explicitly against the notion of forecasting any Fed easing with consistently hawkish rhetoric almost across the board. The USD rallied anew, even as a number of other central banks moved even more aggressively with their own rate tightening moves and guidance. The ECB even hiked 75 basis points at its September 8 meeting, the largest hike in the central bank’s history, with another 75 basis points priced for the October meeting. After the remarkable thaw in financial conditions since the June FOMC meeting, despite that meeting delivering the first “super-size” rate hike of 75 basis points, the Fed clearly decided that it had more to gain by maintaining a hawkish tone than in trying to guide for the possibility of any imminent policy pivot due to some abstract notion like the neutral rate. The Fed probably can see now that that it is easier to back down from accidents created by excessively tight policy than to risk aggravating inflation risks with easing financial conditions in the middle of a tightening cycle by trying to play cute with guidance. One factor that has added to the potential for a bounce-back in the US economy fairly deep into Q4 is the steep decline in petrol prices after their remarkable peak at record prices north of $5/gallon in early June. The decline to well below $4.00 already in August could have a significant real and psychological impact on the legendary US consumer and keep the economy and wage pressures humming a bit longer than expected for this cycle, requiring that the Fed maintain course and continue its attempt to achieve the full pace of quantitative tightening, promised to reach $95 billion in balance sheet reductions per month in September. Hence our Steen Jakobsen’s anticipation of “peak tightness” in the coming quarter. Tail risk alert for USD in Q4: the mid-term elections. The mid-terms are an important tail-risk event in Q4 for the longer-term outlook for likely US policy responses in the next recession or soft patch. The pundits and oddsmakers assure us that, while the Democrats are very likely to solidify their majority in the Senate, they are nearly certain to lose control of the House. That may well be, but the last two election cycles have taught us to treat election polls with more than a grain of salt, and two developments have dramatically raised the potential for surprises in our view: the Trump-packed US Supreme Court overturning of the Roe v. Wade case from the 1970s that guaranteed access to abortion services at a federal level, and a couple of special elections in Trump country in recent months falling to Democrats—particularly the election for Alaska’s US House representative in which the pro-Trump Sarah Palin lost to a Democrat. This was a state that voted for Trump in 2020 by a margin of 10 points and for the Republican House member by nine points over an independent challenger in the same election. With a deeply divided partisan political environment, the US is only able to make policy at the margin on the fiscal side when one party does not control both houses of Congress and the Presidency. There are important exceptions, including bipartisan issues like reducing supply chain vulnerabilities with China and limiting Chinese access to military and advanced technology. In any case, if the Democrats surprise and maintain control of the House, together with a stronger control of the Senate, it could completely flip the script on fiscal policy potential ahead of the 2024 US presidential election, generally increasing the risks of far higher inflationary outcomes. Had Biden enjoyed a mere seat or two more in the Senate over the last two years, his party might have passed a package some $2 trillion larger than what actually made it through in the so-called Inflation Reduction Act. Graphic: The jaws are widening perilously! The story since mid-2021 has been of a widening performance divergence between the soaring US dollar and weakening euro and even weaker JPY. Note that the indices are CPI-adjusted, and Japan’s retail CPI measures have likely been suppressed, meaning that the picture would look even worse than it does here. Something could give in Q4 on the Bank of Japan’s commitment to containing yields. Note that the euro weakness looks pedestrian in comparison, even after trading below parity at times in Q3. EUR, GBP and a winter of discontent. The euro fell to below parity against the US dollar on the intense and excessive pressure on inflation in the EU from soaring energy and power prices, which also presented risks to output volumes and had a seismic impact on external balances. Europe went from being the world’s largest surplus bloc on trade to a deficit bloc in a world heading into a slowdown and likely recession in Q4 and early next year.  Much has been made of the EU’s heroic efforts to build natural gas storage ahead of the heating season beginning in the autumn, but this will not cover the additional supply needed unless Russian gas flows resume over the winter—unless EU demand drops further. If Russian leader Putin, or anyone of his ilk, remains in power in Russia, the longer-term energy supply picture for Europe will remain difficult as the EU will have to continue bidding up for shipments of LNG in a tight global market. New sources of gas could be in the wings, possibly in the long run from Algeria and already in coming months from the newly-arrived-on-the-scene LNG from Mozambique. But the EU energy outlook will likely never again prove as bad as it does for the coming winter of discontent, so some major low in the euro may emerge in the coming quarter or early next year. The EU plans to cap prices may help nominal EU inflation readings to begin rolling over in coming months, but this won’t kill demand. Physical limits to natural gas supply, possibly aggravated by risks that French nuclear power is not fully back on line until late in the winter, might force power rationing and real GDP output drops. Europe will be hoping that a mild winter lies ahead, and daily and weekly weather forecasts will receive more attention than perhaps at any time in the continent’s history. Ditto for the UK with the cherry on top that the UK lacks strategic gas storage facilities even if it is scrambling on that front. Again: winter is coming and will continue to come every year, but the EU will move with existential haste to address its vulnerabilities.  The UK bears extra close watching as a country capable of a more nimble and forceful policy response than any other major country, given the combination of tremendous pressures on the UK economy from its external deficits and cost of living crisis on the one hand, and a new Prime Minister Liz Truss and her nothing-to-lose mentality on the other. Her instinct will be to move fast and move big to keep the lights on and to keep her country warm this winter for starters, but also to ensure that policy moves the UK away from its current predicament and vulnerabilities. The UK simply must find a new path toward balancing its external deficits and decreasing energy vulnerabilities if she is to enjoy more than a brief stint as PM. Her approach of populist price controls on the one hand together with tax cuts on the other are a risky gambit for sterling on the implications for the national deficit. Sterling may see an aggravated further drop this winter as long as energy prices remain divergently high for Europe (natural gas is the critical factor in particular). Further out, policy will have to show traction in attracting investment, bringing rising UK domestic energy output (UK shale gas potential unleashed?) and improving productivity to see sterling rising from the ashes. And for perspective, sterling isn’t even fully in the ashes yet anyway, as we note that in CPI-adjusted real-effective-exchange-rate terms, it is actually only mid-range since the 2016 Brexit referendum collapse. Continued tension among the Asian giants CNH and JPY: Q4 to deliver a big bang? We have highlighted the still very stretched CNYJPY exchange rate in both of the last two outlooks. The CNH has loosely tracked the USD higher, while the JPY has remained the weakling of G10 currencies on the Bank of Japan’s stick-in-the-mud refusal to shift to a tightening stance and away from its yield-curve-control policy. In Q3, the CNYJPY exchange rate reached new multi-decade highs well north of 20.00. Could Q4 finally be when something “breaks” here? On the CNY side of the equation (and closely linked, the tradeable offshore CNH), China might decide that it is simply no longer in its interest to maintain a strong currency, especially if commodity prices begin to fret at the economic outlook souring. But more likely, the capitulation could come from the Bank of Japan via a stronger JPY as discussed in our Q3 outlook. Significant further downside pressure on the yen may simply force the Bank of Japan to surrender after it held out so long in the hope of seeing wage gains rising sufficiently to suggest a sustainably positive inflation outlook. But there may also be a chicken-and-egg problem in the Bank of Japan’s measures of inflation and inflationary risks from here: the policy by Japan’s supermarket chains to keep food prices capped even as wholesale and import prices have soared, the latter aggravated by the tanking JPY. October 1st is meant to see a reset of retail prices for retail shoppers overnight, which could lead to soaring official inflation readings and a growing sense of popular outrage as the cost-of-living rises. Fiscal attempts to shield lower income households will do nothing for the JPY or alleviate the concern for medium-wage and higher income earners. Will Q4 finally be the quarter that sees the Kuroda BoJ surrender and shift its guidance, and at least shift the goal posts on yield-curve control? There is tremendous two-way volatility potential for JPY crosses, particularly if the USDJPY rips to new aggressive multi-decade highs before the BoJ finally then capitulates. The rest of G-10 FX. In this case, the “rest of G-10” would be the Swiss franc (CHF) and the “G-10 smalls” that include the AUD, CAD, NZD, SEK and NOK. Regarding CHF, with cost-of-living pressures at a maximum over the coming winter, the Swiss National Bank will be happy to continue its tightening policy and encouraging a stronger franc, which has helped materially in dampening inflation pressures for Switzerland. For the G-10 smalls, the “peak tightness” we anticipate in Q4 will likely not be kind to these less liquid currencies. For the Antipodeans AUD and NZD, we’re curious whether AUDNZD can break above the multi-year range capped by 1.1300 that stretches back over seven years, as we consider Australia’s formidable commodities portfolio and its newfound status as a current account surplus country while New Zealand is reliant on energy imports. New Zealand was also quick to tighten rates and is therefore likely at the leading edge of countries set to roll over into a slow-down and an eventual pause of its rate-tightening regime. In Europe, Norway will have to play ball to some degree with Europe’s move to cap energy prices after the country has reaped enormous windfall profits from soaring natural gas prices in particular. The Swedish krona looks cheap, but may need to see a major market bottom before its prospects can brighten sustainably, given its history as one of the more sensitive currencies to the economic outlook and risk sentiment.     Source: https://www.home.saxo/content/articles/quarterly-outlook/a-fed-thaw-needed-to-deliver-a-sustained-usd-turn-lower-04102022
Top 10 Stocks to Watch: August 2023 - BY: RYAN SULLIVAN

The First Month Of The Fourth Quarter (Q4) Can Be Ugly

Saxo Bank Saxo Bank 22.10.2022 08:19
Summary:  Equities and fixed income could face a tough Q4. Can US dollar positions provide some upside in the cold winter? US 10-year Treasury yields Things have not evolved as quickly as anticipated in my Q3 Outlook on US 10-year Treasury yields. However, the picture remains the same and is still very important to discuss.  A short recap: US 10-year Treasury yields broke a multi-decade-long downtrend with a confirmed uptrend when yields broke above 1.71 percent in January 2022, marking a new higher high. This was followed by a break of the multi-decade-long falling trend line in March.  In June yields broke above the 2018 peak at 3.26 percent and spiked at 3.50 percent, only to be hit by a correction.  That correction seems to be over, and US 10-year Treasury yields are likely set for higher levels. With just the psychological resistance at 4 percent, yields could very well reach the 1.382 Fibonacci projection at around 4.38 percent in Q4. However, there is no strong resistance until around 5.25 percent, which is around the pre-subprime peak between the 1.618 and the 1.764 Fibonacci projection levels from the 2018–2020 downtrend. S&P 500 was rejected at the medium-term falling trend line a few weeks ago just below the 0.618 Fibonacci retracement at 4,367 and just below the 55 Simple Moving Average, which is declining, indicating an underlying bearish sentiment.   Key resistance level is at 4,325. If S&P 500 closes above the falling trend line and above 4,325 the bearish picture has reversed, and the leading US index will push for levels around 4,600 and possibly all-time highs.  The trend is down on the medium term but bulls don’t give up without a fight. If they can’t hold S&P 500 above 3,886, US equities are likely in for a rough Q4. Depending on how the market reacts to the October earnings season, the first month of Q4 can be become ugly. If S&P 500 closes below 3,886 June lows around 3,636 are likely to be taken out and a 3,500-3,200 consolidation area could be reached in Q4.  3,503 is the 0.50 Fibonacci retracement of the 2020–2022 bull market and 3,200 is close to the 0.618 retracement level (3,195 to be exact). It is also the 0.382 retracement of the 2009 (end of subprime crisis bear market) through to the 2002 peak bull market.  There is still massive divergence on RSI that needs to be traded out. That can be done by either a higher high on both RSI and the Index, or by an RSI close below the 40 threshold. For RSI to drop below 40 and reset/trade out the divergence, lower levels on the S&P 500 are needed.  EURUSD The past 18 months of downtrend in EURUSD paused at parity and in the middle of the wide falling channel it has been trading in the past ten years.   Just as most market participants thought that it was the last time in a very long time we were to see the euro being stronger than the dollar, the euro has bounced back strongly.  However, it was time for a correction after almost 18 months in one direction. A correction could take EURUSD to around 1.0350 resistance.  The downtrend is likely to resume in Q4 and the parity and consolidation areas are likely to be tested once again—this time they’re likely to be taken out. The consolidation area was “founded” back in 2002 just before an almost decade-long bull move in EURUSD.  If parity is broken again, EURUSD is likely to drop swiftly to the lower level of the consolidation area, around 0.96.  However, 0.96 is not a strong support level and if EURUSD moves below the middle of the wide channel trendline, selling pressure could accelerate and push EURUSD to 0.90.  0.90 is the 1.618 Fibonacci projection level of the 2020–2022 up-and-down trend. Parity is at the 1.382 projection and 0.90 is close to the 2.00 projection.      Source: https://www.home.saxo/content/articles/quarterly-outlook/autumn-can-become-ugly-for-equities-and-bond-holders-04102022
Analysis Of Tesla: A Temporary Corrective Rally Should Not Come As A Surprise

Results Of Tesla, Netflix And Snap Do Not Seem To Be Affected By The Spectre Of Recession

Conotoxia Comments Conotoxia Comments 22.10.2022 08:40
In the world of macro data this week, the market was able to take a break from central banks' decisions on interest rate changes. On Tuesday, we had the results of the German economic sentiment index, which turned out to be more positive than expected at -59.2 points (forecast -65.7 points). Further down, however, are the low levels last seen during the crisis in 2008. Macro Data Wednesday saw the release of CPI inflation results for the Eurozone and the UK, among others, which were close to market expectations at 9.9% (forecast 10%) and 10.1% (forecast 10%), respectively. The data showed that inflation still seems to be breaking records.  Finally, of the key macroeconomic data, the number of new applications for unemployment benefits filed in the United States was positive, falling to 214,000 (forecast 230,000).   There is an estimation that the rising global inflation and the non-worsening labour market may not change the monetary policy stance from central banks. As it was mentioned in the morning's commentary on the bond market: "Looking at the chart of the quotation of the ETF with the symbol AGG, someone could see that since the peak in August 2020, the price of a unit of this fund has fallen by more than 20 percent [...] Nevertheless, presently, until the peak in US interest rate hikes is reached, this market may continue to be under pressure." Source: Conotoxia MT5, AGG, Weekly Stock Market The current week has been in terms of the earnings season for the third quarter of this year, particularly reported results from the banking sector, most of which reported positive earnings per share (EPS) results than expectations. Among others, Bank of America Corp. (BankofUS) EPS 0.81 (forecast 0.77), Goldman Sachs Group Inc. (GS) EPS 8.25 (forecast 7.69), or Blackstone Inc. (Blackstone) 1.06 (forecast 0.99). This could be a positive sign, because as the stock market saying goes, "there is no bull market without banks."  Surprising for analysts were the results of Tesla (Tesla), Netflix (Netflix) and Snap (Snap), which do not seem to be affected by the spectre of recession. The giant, which sells electric cars, improved net income to $3.33 billion (forecast $1.65 billion), revenue growth jumped 55 percent year-on-year, and earnings per share (EPS) came in at $1.05 (forecast $0.99). Netflix surprised with its first increase in subscriptions since the beginning of the year, which may have pushed its stock price up more than 10 percent at the opening of Wednesday's session.  Source: Conotoxia MT5, Netflix, Weekly In the social media market, one of the first reports was presented by the owner of Snapchat, whose y/y revenues did not seem to show significant change. Investors seem to reacted negatively, however, after the number of users of the Snapchat app appears to have fallen for the fifth consecutive quarter.Source: Conotoxia MT5, Snap, Weekly Currency Market In the absence of a decision on interest rate changes this week,  someone  could see no significant changes in the currency market. The EUR/USD pair continues to hover below parity at 1.00. Recall that these are values previously seen more than 20 years ago. Noticeably weakened the Japanese yen against the US dollar (USD/JPY) piercing the level of JPY 150. The question of possible intervention by the Bank of Japan is beginning to arise, as the exchange rate of this currency pair has risen by more than 30 percent since the beginning of the year. For the British pound, on the other hand, more uncertainty may continue, due to political developments. The recent rise in the GBP/USD pair came after the resignation of the British Prime Minister from office. Source: Conotoxia MT5, GBP/USD, Weekly The earnings season continues next week? Next week on Wall Street will be packed with the publication of reports from well-known companies. On Tuesday, Google will present quarterly results along with Coca-Cola or Microsoft. On Wednesday, there will be a report from Apple, which recently decided to cut orders for the new iPhone due to falling demand. Facebook will also present results on that day. Online retail giant Amazon will present its report on Thursday, October 27, along with McDonald's and MasterCard.  In addition, next week we could expect, among other things, the ECB's decision on interest rates in the Eurozone, CPI inflation in Germany and GDP results in the United States. In addition, at the end of the week there will be a meeting of the central Bank of Japan (BoJ), where it is possible that the topic of possible intervention in the foreign exchange market or a change in the range for Japanese bond yields would come up. The results of Tuesday's consumer mood report from the United States (CB Consumer Confidence) may seem interesting.    Grzegorz Dróżdż, a Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
British Prime Minister Rishi Sunak Sees No Chance Of Reducing Inflation, Despite Promises To Halve It

Craig Erlam And Jonny Hart Discuss The Resignation Of Liz Truss (UK PM), FX Intervention And More

Craig Erlam Craig Erlam 23.10.2022 09:29
OANDA Senior Market Analyst Craig Erlam reviews the latest market news with Jonny Hart. They discuss the UK PM resignation and what will come next, FX intervention, Snap earnings, and the week ahead. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

Tightening Of Fed Monetary Policy Next Year Will Remain If Necessary

InstaForex Analysis InstaForex Analysis 23.10.2022 09:42
The US dollar was gradually regaining its positions after Thursday's unsuccessful attempt by buyers of risky assets to continue growing. Yes, investors took advantage of the resignation of Prime Minister Liz Truss, but this did not last long. Good statistics on the US labor market and the speech of the President of the Federal Reserve Bank of Philadelphia Patrick Harker - all this strengthened the confidence that the Fed will continue to act quite aggressively, actively fighting inflation. Harker statement  Harker said on Thursday that the committee is likely to raise interest rates well above the planned 4% this year and will keep them at this level for quite some time to combat inflation. At the same time, the official did not rule out taking additional measures, if necessary. "We're going to keep raising rates for a while. Given our outright disappointment at the lack of progress in reducing inflation, I expect that by the end of the year we will exceed the 4% ceiling," Harker said during a speech at the Greater Vineland Chamber of Commerce in Vineland, New Jersey.   Expectations Policymakers are expected to commit to a fourth consecutive 75 basis point rate hike when they meet in early November this year. Many economists also expect that the Fed will go for a similar increase in December of this year, after which rates will reach their peak of about 5% in early 2023. Harker, who does not vote on monetary policy decisions this year, said the Fed will base its decisions on economic data and will remain flexible on policy, tightening next year if necessary. "If we need to, we can continue tightening policy based on new data," Harker said. "But these are extreme measures, because we have to let the system work itself, which will take time." Harker said he expected the unemployment rate to rise to 4.5% next year and then fall to 4% in 2024. According to the Ministry of Labor, it was 3.5% in September. As for inflation, Harker believes that the price index of personal consumption expenditures, the Fed's preferred indicator, will be about 6% this year, 4% next year and will drop to 2.5% only in 2024. "We really need to see a steady decline in a number of inflation indicators before we stop tightening monetary policy," he said. Lisa Cook The head of the Fed, Lisa Cook, in a separate speech, also said that high inflation would probably require a constant increase in rates, and then maintaining a restrictive policy for some time. EUR/USD As for the technical picture of EURUSD, the bears actively piled on the euro and managed to return everything to the framework of the horizontal channel observed recently. To resume growth, it is necessary to return the pair above 0.9800, which will take the trading instrument to the area of 0.9840 and 0.9870. However, the upward prospects will depend entirely on the new US data and the decisions taken by the Fed. A breakthrough of 0.9760 will return pressure on the trading instrument and push the euro to a low of 0.9720, which will only worsen the situation of buyers of risky assets in the market. Having missed 0.9720, it will be possible to wait for the lows to update around 0.9680 and 0.9640. GBP/USD As for the technical picture of GBPUSD, the growth and reaction to Truss' retirement quickly ended, which by the end of Thursday led the pound to the area of the opening level. Now bulls will focus on protecting the support of 1.1170 and the breakdown of the resistance of 1.1240, limiting the pair's growth potential. Only a breakthrough of 1.1240 will return the prospects for recovery to the 1.1290 area, after which it will be possible to talk about a sharper jerk of the pound up to the 1.1330 area – Thursday's high. We can talk about the trading instrument being under pressure again after the bears take control of 1.1170. This will deal a blow to the bulls' positions and completely negate the prospects of the bull market observed since September 28. A breakthrough of 1.1170 will push GBPUSD back to 1.1120 and 1.1070.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324949
US Dollar Index May Confirm A Potential Bullish Trend Reversal

Without US Support, Currency Interventions Are Doomed To Failure

InstaForex Analysis InstaForex Analysis 23.10.2022 09:44
What doesn't kill makes us stronger. No matter what the Federal Reserve's rival central banks try to rein in the US dollar, it still blooms. It would seem that high inflation-induced rate hikes in other countries outside the US should have cooled the ardor of the bulls on the USD index. It wasn't there! One piece of information about the acceleration of consumer prices in New Zealand, Britain and Canada was enough for the greenback to launch a new attack. The same can be said about foreign exchange interventions. In conditions of low external demand and the highest inflation in decades, the interest in reverse currency wars, thereby strengthening rather than weakening the national currency, is understandable. As well as the dissatisfaction of governments with the fall of its exchange rate. Alas, intervention in the life of Forex does not help. Large-scale long positions on the yen managed to stop the USDJPY pair at 146 for just a few days, after which it rose to 151. At the same time, the experience of foreign exchange interventions with USDJPY in 1998 and 2011, with EURUSD in 2000, with GBPUSD in 1992 was also negative. A coordinated intervention is required, like the Plaza Accord in 1985. Dollar pairs react to coordinated intervention The problem is that the conditions then and now are significantly different. In those years, the Fed defeated high inflation and could afford the weakening of the US dollar. Today, the central bank still has a lot to do before consumer prices begin to move confidently towards the target. In addition, Finance Minister Janet Yellen notes that market-determined exchange rates are the best regime for the US dollar. Its strengthening is the result of differences in economic policies and the shocks that countries face. Without US support, currency interventions are doomed to failure. You don't need to go far for an example. Japan threw money to the wind, trying to support the yen diving into the abyss. Its interference in the life of Forex only made the situation worse. Gold and foreign exchange reserves were used to sell USDJPY. It was necessary to get rid of US Treasury bonds, which led to an increase in their yields and further strengthened the dollar. Dynamics of US Treasury Bond yields Rates on 10-year securities have reached the highest level since 2007. The situation resembles the events of those years, and investors are beginning to argue that only an increase in profitability to 5-5.25% will allow the indicator to reach a plateau. Until this happens, the US dollar will continue to sweep away everything in its path. No matter how hard its opponents try, raising rates or using currency interventions. Only the European Central Bank is able to suspend the fall of EURUSD. Its meeting is rightly regarded as a key event of the economic calendar in the last full week of October. Technically, the EURUSD peak continues on the daily chart. We hold the short positions formed from the 0.9845 and 0.9815 levels and increase them on the breakout of support at 0.97. The initial target is the 0.95 mark.     Relevance up to 15:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324997
The Outlook Of EUR/USD Pair For Long And Short Position

The Eurozone Economy Is Facing A Deep Recession

InstaForex Analysis InstaForex Analysis 23.10.2022 09:49
The USD/JPY pair was storming the 151.00 mark (we wrote about this in our previous review), gold is falling in price, and the dollar continues to advance. When this article was written the DXY dollar index was near 113.34, remaining in the upper part of the range formed between the local support and resistance levels of 114.74 and 109.96. At the same time, the general upward dynamics of the dollar remains, pushing the DXY index towards more than 20-year highs near 120.00, 121.00. The breakdown of the local round resistance levels of 114.00, 115.00 will be a signal that the DXY index will return to growth. On Thursday, the dollar received support from statistics on the labor market: in its weekly report, the US Department of Labor reported a decrease in the number of initial applications for unemployment benefits (for the week of October 14) to 214,000 thousand (from 226,000 a week earlier ), which is better than economists' expectations of an increase to 230,000. The state of the labor market (together with data on GDP and inflation) is a key indicator for the Federal Reserve in determining the parameters of its monetary policy. The drop in the indicator (the number of initial and secondary claims for unemployment benefits) and its low value is a sign of a recovery in the labor market and has a short-term positive impact on the USD. There were no important macro statistics for the US on Friday. It will appear next week (for more details, see Key economic events of the week 10/24/2022 – 10/30/2022). Also next week, meetings of the three largest world central banks will be held at once: Japan, Canada, the eurozone. As for the latter, its leaders are, in general, set up for another interest rate hike. As expected, at a meeting on Thursday, European Central Bank leaders will again raise the level of key interest rates, by 0.50% or even 0.75%. According to the final estimate, annual inflation in the eurozone in September amounted to 9.9% (below the first estimate of 10.0%). Core annual CPI rose by +4.8%, which is in line with the forecast and the previous 4.8%. According to Eurostat, annual inflation fell in six of the bloc's member states, remained stable in one and rose in twenty. A recent media poll of economists showed that they expect the ECB to raise its deposit and refinancing rates by 75 bps (deposits to 1.50% and the refinancing rate to 2.00%) at the October 27 meeting to contain inflation exceeding the target level by five times. By the end of the year, deposit and refinancing rates are forecast to be 2.00% and 2.50%, respectively. At the same time, the ECB is in a difficult situation as the eurozone economy is facing a recession, with the probability of its onset within a year, and the nature of the recession can be deep and long, given the military conflict in Ukraine and confusion in the European energy market. Despite information from the previous EU leaders' summit, which "managed to reach a common agreement on energy security" with the prospect of creating a cartel of European gas buyers that would deal with the purchase and subsequent distribution, the shortage of gas and oil in Europe will continue to drive inflation. Whether the ECB, which is moving so far with cautious steps, will be able to cope with it is a question that remains open. As for the EUR/USD pair, at the time when this article was written on Friday morning, it was trading near the 0.9740 mark, in the area of a stable bear market. From a fundamental point of view, we should expect at least a strong bearish momentum in the EUR/USD pair, and at a high, a further fall of the pair towards 20-year lows, when it was trading near 0.8700, 0.8600. In general, the downward dynamics of EUR/USD remains.   Relevance up to 13:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324985
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

Geopolitics And The Euro (EUR) Situation Are Expected To Deteriorate

InstaForex Analysis InstaForex Analysis 23.10.2022 09:57
Long-term perspective. The EUR/USD currency pair gained 140 points during the current week. We can say that this is one of the best weeks for the euro in recent times, although this growth is very difficult to consider on a 24-hour TF. But on this TF, a global downward trend immediately catches the eye, within which strong corrections are still rare. However, it would be correct to say there are none. As we have already said, over the past 1.5–2 years, the euro currency has shown corrections of a maximum of 400–450 points. And the whole downward trend already exceeds 2500 points. And, of course, it is worth noting that it has been three weeks since the price last updated its 20-year lows, and the pair is still close to these lows. The beginning of an upward trend does not even "smell." Thus, the technical picture does not change. Therefore, it can be assumed that the fundamental and geopolitical backgrounds do not change either. And this is not just an assumption. It is an objective reality since the "foundation" now remains the same as it was a month ago, two months ago, and three months ago. The Fed is also raising interest rates aggressively and is prepared to do so "to the bitter end." The ECB is also simply raising the rate and is already thinking about reducing it because many EU countries may be unable to cope with tight monetary policy. The Fed rate has long been higher than the ECB rate, and the gap between their values may only increase in the coming months. When the Fed ends the rate hike cycle, a "high rate period" will begin, during which monetary policy will not change. Thus, the Fed's monetary policy may remain much tougher than the ECB for another year or two or three. Naturally, this state of affairs will support the dollar. It may not grow all this time, but it will be extremely difficult for the European currency to show tangible growth. COT analysis. COT reports on the euro currency in 2022 can be entered into the textbook as a vivid example. For half the year, they showed a frank "bullish" mood of professional players, but at the same time, the European currency was steadily falling. Then they showed a "bearish" mood for several months, and the euro currency also steadily fell. The net position of non-profit traders is bullish again, and the euro continues to fall. This is happening, as we have already said, because the demand for the US dollar remains very high against the backdrop of a difficult geopolitical situation. Therefore, even if the demand for the euro currency is growing, the high demand for the dollar does not allow the euro currency itself to grow. During the reporting week, the number of buy-contracts from the non-commercial group increased by 6.5 thousand, and the number of shorts decreased by 4 thousand. Accordingly, the net position increased by about 10.5 thousand contracts. This fact does not matter much since the euro remains "at the bottom" anyway. Professional traders still prefer the dollar to the euro currency at this time. The number of buy contracts is higher than sell contracts for non-commercial traders by 48 thousand, but the European currency cannot extract any dividends from this. Thus, the net position of the "non-commercial" group can continue to grow, but it does not change anything. If we look at the general indicators of open longs and shorts for all categories of traders, then sales are 22 thousand more (586k vs. 564k). Thus, according to this indicator, everything is logical. Analysis of fundamental events. There is nothing to note in the European Union this week except for the banal inflation report, which was released in the second assessment for September. Traders expected an increase of 10.0%, but in reality, prices rose only by 9.9% y/y. However, the epithet "only" hardly applies to an ever-growing index. We cannot say that traders were upset about this or, on the contrary, happy. This indicator does not change anything because it cannot affect the ECB's plans in a cardinal way. The European regulator cannot look at the current inflation and decide to raise the rate at each next meeting by 1% to deal with high price growth and not just pretend. There was practically no geopolitical news this week either. Perhaps that is why the euro currency has avoided a new fall. But again, there is no difference since it continues to be near its 20-year lows. Trading plan for the week of October 24–28: 1) In the 24-hour timeframe, the pair resumed their movement to the south. Almost all factors still support the long-term growth of the US dollar. The price is below the Ichimoku cloud and the critical line, so purchases are irrelevant now. It would be best if you waited at least for consolidation above the Senkou Span B line and only considered long positions. 2) The euro/dollar pair sales are still more relevant now. The price formally went above the critical line, but it did not go higher, but the line itself declined, so we expect the fall to continue with a target below the 0.9582 level (161.8% Fibonacci). In the future, if the fundamental background for the euro currency does not improve and geopolitics continues to deteriorate, the euro currency may fall even lower. Explanations of the illustrations: Price levels of support and resistance (resistance/support), Fibonacci levels – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger Bands (standard settings), MACD (5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "Non-commercial" group.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325028
Analysis And Trips For Trading The GBP/USD Pair In Short And Long Positions

The British Pound To US Dollar (GBP/USD) Pair Maintained A Long-Term Towntrend

InstaForex Analysis InstaForex Analysis 23.10.2022 09:59
Long-term perspective. The GBP/USD currency pair has increased by 40 points during the current week and remained above the critical line on the 24-hour TF. Thus, certain chances of a new upward trend are also preserved. We have already said earlier that the pound has more reasons for growth - technical. At least because it overcame the Kijun-sen line sharply and strongly moved away from its absolute lows. However, this is a double-edged sword. The last fall in the pound sterling might not have happened if not for the tax initiatives of former British Prime Minister Liz Truss. In general, her resignation turned out to be very unexpected since, at the beginning of the week, in an interview with Bloomberg, she said she was going to fight and did not intend to leave her post. We did not believe that she would leave voluntarily, and even so quickly, and we still could not announce a vote of no confidence in her in the near future. Thus, most likely, political pressure was exerted on her. However, all this is history and generally not interesting. Now I wonder who will become the new prime minister. And good old Boris Johnson can become one, as he is currently leading in the amount of support from the Conservatives, according to opinion polls. From the same conservatives who dismissed him a few months ago. The political pun in the Kingdom continues. We need to wait for new elections, but the situation will not change dramatically for the pound sterling. Politics is, of course, interesting and important. As we have seen, the Prime Minister's short-sighted decision can collapse the financial markets. However, Johnson is unlikely to make the same mistake as Truss. And even more so, Rishi Sunak, who served as finance minister under Johnson, will not allow it. But in any case, the pound still has big problems with the grounds for growth. Technically, it can show an upward movement, but will one "technique" be enough for market participants? COT analysis. The latest COT report on the British pound showed a new strengthening of the "bearish" mood. During the week, the non-commercial group closed 8,600 buy contracts and opened 3,400 sell contracts. Thus, the net position of non-commercial traders fell by 12.9 thousand, which is quite a lot for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has been growing. Still, the mood of major players remains "pronounced bearish," and the pound sterling maintains a downward trend in the medium term. And, if we recall the situation with the euro currency, there are big doubts that, based on COT reports, we can expect strong pair growth. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 91 thousand contracts for sale and 40 thousand for purchase. The difference, as we can see, is still very big. The euro cannot show growth in the "bullish" mood of major players, and the pound will suddenly be able to grow in a "bearish" mood. As for the total number of open buy and sell orders, the bulls have an advantage of over 25 thousand. But, as we can see, this indicator also does not help the pound much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of fundamental events. During the current week, only one really important report was published in the UK - on inflation. The consumer price index rose by 10.1% y/y and, as we can see, continues to grow, despite the seven increases in the key rate. Many experts suggest that the rate in the UK should be raised to at least 5% to count on a significant reduction in inflation. But is there an opportunity for BA to raise the rate so high with the current financial and economic problems? From our point of view, no, and the ECB, together with BA, will stop tightening monetary policy in the near future. Or they will greatly slow down its pace. Both can create additional pressure on the pound, as the Fed will continue to accelerate its pace at the same time. In general, the prospects for the pound are bad as usual, and rising inflation does not mean that the British regulator will increase the aggressiveness of the monetary approach. Trading plan for the week of October 24–28: 1) The pound/dollar pair as a whole maintains a long-term downward trend but is located above the critical line. Therefore, small purchases can now be considered as long as they are located above the Kijun-sen. The target is the Senkou Span B line, which runs at 1.1843. There are some reasons for the pair's growth, but there are still many reasons for a new fall. Be careful with your purchases. 2) The pound has made a significant step forward but remains in a position where it is difficult to wait for strong growth. If the price fixes below the Kijun-sen line, the pair's fall can quickly and cheerfully resume with targets of 1.0632–1.0357. Explanations of the illustrations: Price levels of support and resistance (resistance /support), Fibonacci levels – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger Bands (standard settings), MACD (5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "Non-commercial" group.     Relevance up to 10:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325030
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

Recent Reports Have Not Helped The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 23.10.2022 10:04
  The US dollar index showed contradictory dynamics this week. Initially, at the start of the five-day trading period, it dropped sharply, returning to the area of the 111th figure. The market unexpectedly increased interest in risk, amid quarterly reports of the largest US banks (in particular, Bank of America and Bank of New York Mellon), which exceeded the expectations of most analysts. After that, the main Wall Street indexes went up, while the safe greenback came under pressure. In addition, on Monday it became known that British Prime Minister Liz Truss canceled the key points of her odious anti-crisis plan, which included large-scale tax cuts. And although this step subsequently did not help her stay in the chair of the head of government, directly "in the moment" it increased interest in risky assets. Against this background, the EUR/USD pair reached 0.9875 (one and a half week price high). However, bulls on the pair were unable to develop an upward trend. On Tuesday, the US dollar index turned around and headed upward again. Throughout the week, including on Friday, the pair had been trading within a wide price range, actually circling in the area of 97-98 figures. Traders reacted reflexively and are reacting to contradictory macroeconomic statistics, mainly from the United States. For example, the greenback reacted positively to the published report in the real estate sector: the volume of construction permits issued in America increased by 1.4% in September after a serious decline in August (-8.5%). At the same time, the volume of housing sales in the secondary market (the release was published the next day) unexpectedly decreased, and immediately by 1.5% (with a forecast decline of 0.8%). The Federal Reserve-Philadelphia Manufacturing Index also turned out to be disappointing, which came out at -8.7 in October. While the growth rate of initial applications for unemployment benefits was at the level of 214,000 (a three-week low). The above-mentioned macroeconomic reports (generally of a secondary nature) could not help – neither the EUR/USD bears nor the bulls. Of course, traders reacted to these reports accordingly, but only formally – literally after a few hours, the downward/upward momentum faded away. Obviously, traders need a more powerful informational occasion that will allow them to either approach the parity level or break through the defense at the base of the 96th figure. For the development of the upward corrective movement, EUR/USD bulls need to settle above the 1.0000 mark, and for the continuation of the downward trend, bears need to go below the 0.9600 target. Current macroeconomic statistics are not able to cope with such tasks. In my opinion, EUR/USD traders can only pin their hopes on larger-scale information campaigns. The vector of price movement will be determined primarily by the level of anti-risk sentiment. By the way, Friday's dynamics of the dollar index eloquently illustrated the current situation. So, during the day, the greenback steadily strengthened its positions throughout the market, but at the start of the US session it weakened sharply: it became known that Russian Defense Minister Sergei Shoigu held telephone talks with US Defense Minister Lloyd Austin. According to Russian media, the parties discussed "topical issues of international security, including the Ukrainian issue." These are the second talks between the heads of defense departments this year (the first were in May). Amid general geopolitical tensions, this news was received by the market "with a bang". However, the growth of the EUR/USD pair was limited. Almost immediately, the press secretary of the president of Russia Dmitry Peskov said that following the conversation of the ministers, "there are no plans for a telephone conversation between Vladimir Putin and Joe Biden." However, this moment highlighted the main idea: traders react sharply to news of a geopolitical nature. A decline in anti-risk sentiment can put significant pressure on a safe greenback - and vice versa, an increase in panic will allow dollar bulls to open a second wind. Also, the tone of trading can be set by representatives of the Fed. But, to the disappointment of the EUR/USD bears, the members of the Fed have not yet decided to voice "ultra-hawkish" comments. In particular, many representatives of the central bank spoke this week – Philip Jefferson, Lisa Cook, Michelle Bowman, Patrick Harker, James Bullard, Charles Evans. In one form or another, they made it clear that the Fed is ready to continue taking steps to curb inflation in the United States. In one form or another, they hinted that they are ready to support a 75-point rate hike in November. But the thing is that even before their speeches, the probability of a 75-point rate hike at the November meeting was estimated at 95%! That is, the market has already largely played this fundamental factor. While the members of the Fed are not yet ready to "increase the degree of heat", allowing, for example, a 100-point increase. They are also not ready to talk about more distant prospects (regarding the November meeting) – according to them, further decisions will be made taking into account incoming data, primarily in the field of inflation and the labor market. Thus, traders of the EUR/USD pair in the medium term will continue to trade in the 100-point price range of 0.9750-0.9850. In my opinion, the downward dynamics will resume over time, but at the moment it is impossible to talk about prioritizing short or long positions. Given the current uncertainty, it is advisable to take a wait-and-see attitude for the EUR/USD pair.     search   g_translate       Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325008
The USD/JPY Price Reversed From The Lower Limit

Technical Picture Of The US Dollar To Japanese Yen Pair (USD/JPY)

InstaForex Analysis InstaForex Analysis 23.10.2022 10:13
The USD/JPY pair collapsed almost 600 points at the end of the trading week. The multi-week upward trend was expected to end with a collapse. Bulls on the pair updated the 32-year price high on Friday, getting close to the boundaries of the 152-th figure. And, apparently, this target fulfilled the role of the notorious "red line" for the Japanese authorities: they decided to conduct a currency intervention again. By and large, there was no doubt that the Japanese government would react to the rapidly falling yen. The only question was at what stage of USD/JPY growth the Ministry of Finance would intervene in the situation. In the previous month (and before that – in 1998), the red line corresponded to the 146 mark. However, this time the Japanese authorities decided to show restraint, observing the process of devaluation of the national currency. The fact is that the effect of the September intervention was short-lived. The USD/JPY pair collapsed by 500 points, but regained some of the lost positions on the same day. Traders took advantage of the downward pullback of the price and opened long positions en masse. The result was not long in coming: in less than a month, the pair "walked" a thousand points, breaking both the marks of 146-147, and even the mark of 150. Judging by yesterday's dynamics of the USD/JPY price (in the first half of the day), many traders tried to have time to "jump into the last car of the departing train." But after overcoming the 150.00 mark, any open longs resembled a lottery bet rather. Obviously a losing lottery, given the previous warnings of the Japanese authorities that the government may conduct a second currency intervention. Just yesterday morning, a few hours before the collapse of USD/JPY, Japanese Finance Minister Shunichi Suzuki expressed concern about the sharp weakening of the national currency, expressing readiness to intervene to support the yen. However, this hint, which was more than transparent, "did not reach the addressee." The pair rose to the level of 151.96 in a few hours – this is a new high since 1990 (by the way, over the past 12 months, the Japanese currency has depreciated by more than 30%). However, during the US session on Friday, the yen unexpectedly strengthened by 600 points, giving rise to rumors of another currency intervention. It is noteworthy that the Japanese authorities decided not to officially explain the reasons for the sharp strengthening of the national currency. Answering a direct question from journalists, Minister Suzuki told reporters that he would not comment on whether the intervention took place or not. His deputy, Masato Kanda, answered the journalists' question with a similar phrase: "I cannot comment on this information." However, insider information published by the Nikkei agency suggests that the Japanese authorities did indeed conduct currency interventions – however, it is unknown how much. However, there is no doubt that the collapse of USD/JPY was due to the intervention of the authorities. The question is different: is it possible to trust the downward momentum of the pair, given the September experience? At the very least, the fact that the bulls regained some of the lost positions on the same day is alarming. Thus, yesterday's low was fixed at 146.22, while the trading day ended at 147.66. It is likely that if it were not for the end of trading, traders would have entered the area of the 148th figure. Here it is necessary to recall the September events. Immediately after the decline, the USD/JPY pair stabilized, but at the same time, traders did not dare to cross the 146.00 mark for some time (or rather, consolidate around the 146th figure). Market participants expressed very well-founded fears that the Japanese authorities may repeat the intervention if the pair approaches the 147.00 target. It is likely that this time the market will react to the current situation in a similar way. Only now the "red line" will be 150.00 – again, only for a certain period of time. The discrepancy between the super-soft monetary policy of the Bank of Japan and the expectations of the tightening of the Federal Reserve's monetary policy will continue to push the pair up. Only now a kind of price "ceiling" in the form of the 150th price level will operate. This assumption is consistent with the USD/JPY technical picture. The daily chart shows that the pair failed to overcome the middle line of the Bollinger Bands indicator within the framework of the downward movement. At the same time, the upper line of this indicator just corresponds to the level of 150.20. Apparently, this target will serve as the upper limit of the price range within which the pair will be traded in the medium term. The lower boundary of this echelon will be the middle line of Bollinger Bands on D1, which corresponds to 146.50.   Relevance up to 11:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325032
Unlocking the Future: Key UK Wage Data and September BoE Rate Hike Prospects

The Positive Close On The New York Stock Exchange, The Dow Jones Hit A Monthly High

InstaForex Analysis InstaForex Analysis 24.10.2022 08:00
At the close on the New York Stock Exchange, the Dow Jones rose 2.47% to hit a monthly high, the S&P 500 rose 2.37% and the NASDAQ Composite rose 2.31%. Dow Jones index  Caterpillar Inc was the top performer among the components of the Dow Jones index today, up 10.88 points or 6.07% to close at 190.22. JPMorgan Chase & Co rose 6.10 points or 5.25% to close at 122.23. Goldman Sachs Group Inc rose 14.29 points or 4.60% to close at 325.10. The losers were shares of Verizon Communications Inc, which shed 1.65 points or 4.46% to end the session at 35.35. American Express Company rose 1.67% or 2.38 points to close at 140.04, while Procter & Gamble Company rose 1.25% or 1.59 points to close at 128.58. S&P 500 Leading gainers among the components of the S&P 500 in today's trading were Schlumberger NV, which rose 10.33% to 50.41, Freeport-McMoran Copper & Gold Inc, which gained 9.99% to close at 32. 03, as well as Huntington Bancshares Incorporated, which rose 9.47% to end the session at 14.45. The drop leaders were SVB Financial Group shares, which lost 23.95% to close at 230.03. Shares of Robert Half International Inc lost 8.55% and ended the session at 73.01. Quotes of HCA Holdings Inc decreased in price by 5.69% to 196.74. NASDAQ  Leading gainers among the components of the NASDAQ Composite in today's trading were Huadi International Group Co Ltd, which rose 89.27% to hit 58.92, Altamira Therapeutics Ltd, which gained 58.64% to close at 0.52 , as well as shares of Missfresh Ltd ADR, which rose by 57.50%, ending the session at around 2.52. The drop leaders were shares of Immunic Inc, which fell 77.39% to close at 2.08. Shares of Nextplay Technologies Inc lost 33.23% and ended the session at 0.28. Quotes of Kalera PLC decreased in price by 35.61% to 0.28. The number  On the New York Stock Exchange, the number of securities that rose in price (2282) exceeded the number of those that closed in the red (835), while quotes of 104 shares remained virtually unchanged. On the NASDAQ stock exchange, 2503 companies rose in price, 1265 fell, and 238 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.97% to 29.69. Gold Gold futures for December delivery added 1.40%, or 22.95, to $1.00 a troy ounce. In other commodities, WTI crude for December delivery rose 0.73%, or 0.62, to $85.13 a barrel. Futures for Brent crude for December delivery rose 1.24%, or 1.15, to $93.53 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.80% to hit 0.99, while USD/JPY shed 1.75% to hit 147.51. Futures on the USD index fell 0.90% to 111.80.     Relevance up to 04:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/297940
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

The Price Of The US Dollar To Japanese Yen Pair (USD/JPY) Is Tearing Up Again

InstaForex Analysis InstaForex Analysis 24.10.2022 08:01
On Friday, the yen made its way to strengthening from peak to peak of 575 points after an emergency intervention by the Bank of Japan. But the BOJ can also be understood, since in the morning the yen lost 2 figures and showed an extreme of almost 152 yen per dollar, having overcome the 1998 peak (147.71). This morning the price is tearing up again, having reached the range of two price channel lines at 145.55-150.00. But now we are waiting for the market to cool down, the price will initially fall below 147.50, then to 145.55. The technical reason for this is a divergence forming with the Marlin Oscillator on a daily time scale. The signal line of the oscillator is currently experiencing resistance to falling from its own zero line. In the near future, we expect the oscillator to move into the territory of a downward trend. The price consolidated below the MACD line on the four-hour chart, and the Marlin Oscillator also firmly settled in negative territory. We are waiting for the price to return under 147.50 and further advance to 145.55.     Relevance up to 04:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325062
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

In A Short Term The Growth Of The GBP/USD Pair May Run Out

InstaForex Analysis InstaForex Analysis 24.10.2022 08:05
The British pound opens the week with an increasing gap for the second consecutive week. This is a negative sign for the pound. The price met resistance from the MACD indicator line of the daily scale. If in the process of closing the gap the price falls below 1.1170, then further advance to 1.0805 may already be more successful than it happened on Friday. To consolidate the growing short-term trend, the price needs to go above the resistance of 1.1500. Growth can continue in this case up to 1.1760. At this level, short-term growth may end and the price will still return to closing today's gap. The UK October PMI will be released today. The forecast for Manufacturing PMI suggests a decline from 48.4 to 48.0 points, for Services PMI from 50.0 to 49.6. The gap is likely to close sooner rather than later. On the four-hour chart, the price looks fixed above the MACD line, an open window creates a sign of false consolidation. A decline under the MACD line, below the level of 1.1282, will return the mood to overcome the support of 1.1170. The Marlin Oscillator will already be in the negative area by this time.   Relevance up to 04:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325064
The EUR/USD Price May Fall Under 1.0660

Today There May Be Confirmation Of The Bearish Sentiment Of The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 24.10.2022 08:10
On Friday, the head of the San Francisco Federal Reserve, Mary Daly, said that the high pace of rate hikes is slowing down the economy, this pace needs to be slowed down. As a result, yields on government bonds fell, stock indices rose, and the euro closed the day up 75 points. The quote of the single currency again reached the resistance of 0.9864 and the MACD indicator line. The European Central Bank raises rates on the 27th, but we still doubt the market's willingness to switch so quickly from the Fed's leading role in pricing the euro to the ECB's leading position. Eurozone business activity indicators for October will be released today, and a recession is predicted for them. On the technical side, in order to consolidate the euro in the green, the price needs to go above the descending price channel, marked in green on the daily chart, that is, above the level of 0.9950. Price development above 0.9864 (September 6 low) before breaking 0.9950 in this situation is considered as a false exit above the MACD indicator line. Consolidation below this line may bring the price back to support 0.9724. The Marlin Oscillator is already turning down and does not share the optimism of the price. The price is already forming a divergence with Marlin on the H4 chart. As long as it's weak. A decline below the MACD line (0.9797) will set the bearish mood for the euro.       Relevance up to 04:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325066
The Bank Of England Has Warned That Negative Growth Will Extend All The Way

The British Pound (GBP) Opened With A Bullish Gap

InstaForex Analysis InstaForex Analysis 24.10.2022 08:14
Early in the European session, the British pound was trading around 1.1310. A technical correction was observed after a weekly opening with a bullish GAP. GBP/USD reached the top of the downtrend channel formed on September 30. The pound opened with a bullish GAP that reached a high of 1.1406. Currently, we can see a technical correction that could fall to cover the gap at 1.1285. According to the 4-hour chart, the British pound is above the 200 EMA and above the 21 SMA. The outlook could remain positive if it trades above 1.1280 and reaches the key area of 1.1400. With a sharp break of the strong resistance of the downtrend channel and a daily close above 1.14, we could expect an acceleration to the upside and the price could even reach 8/8 Murray at 1.1718. Conversely, in the event that the British pound breaks below the downtrend channel formed on October 13, we would expect a daily close below the 21 SMA located at 1.1240 to occur. If this happens, we could expect a bearish acceleration towards the bottom of the trend channel around 1.0970 and the pair could even drop to 6/8 Murray at 1.0742. Our trading plan for the next few hours is to buy above the downtrend channel around 1.1280 with targets at 1.1400 and 1.1718. The eagle indicator is giving a positive signal which supports our bullish strategy.       Relevance up to 06:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/297954
The Outlook Of EUR/USD Pair Is Downward In The Near Term

The Movements Of The Euro To US Dollar (EUR/USD) Pair Were Bad

InstaForex Analysis InstaForex Analysis 24.10.2022 08:18
EUR/USD 5M The euro/dollar pair managed to fall and rise on Friday. The same was observed a day earlier and, as on Thursday, no specific fundamental or macroeconomic reasons for this. There was not a single significant event in the US nor in the European Union and, nevertheless, the pair managed to show volatility of more than 100 points and they were enviable movements. Indeed, these movements were not as wonderful as it might seem, since the price overcame the Ichimoku indicator lines without any apparent difficulties, which should actually represent quite strong resistance. But for several days in a row, the price does not even notice them, which, unfortunately, can speak of a flat or "swing". We have already warned about the "swing" before. At this time, traders do not quite understand what to do with the euro, since it is already dangerous to sell at the current, lowest levels, and there is no reason to buy. As a result, the pair very often corrects and rolls back up and down. Analyzing Friday's trading signals, it is very clear that the movements were not so good. The first trading signal was perhaps the most unambiguous of all. The price rebounded from the critical line, after which it dropped to the level of 0.9747 and overcame it, then went down for about 25 more points. But it did not reach the next level, so the position should have been closed at the nearest buy signal, which was formed when it settled above 0.9747. Profit amounted to about 20 points. It was possible to open long positions on the same signal, but then "songs and dances" began near the Kijun-sen line. The price overcame it both upwards and downwards several times. Therefore, a long position should have been closed as soon as possible and it is unlikely that it was possible to make good money on it. The first rebound from the critical line should not have been worked out, since the price immediately appeared near the level of 0.9747, from which it could also rebound. Another signal near Kijun-sen could have been worked out, but it most likely caused a loss, which offset most of the profit on the first two positions. COT report: The euro Commitment of Traders (COT) reports for 2022 could be used as good examples. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again and the euro is still dropping. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long non-commercial positions increased by 6,500, while the number of shorts decreased by 4,000. Accordingly, the net position increased by about 10,500. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 48,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. If you look at the total open longs and shorts for all categories of traders, then shorts are 22,000 more (586,000 vs 564,000). Thus, according to this indicator, everything is logical. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 24. ECB meeting: how much will the central bank raise the rate? Overview of the GBP/USD pair. October 24. This week - the election of the prime minister in the UK! Forecast and trading signals for GBP/USD on October 24. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The downward trend still cannot be considered completely reversed on the hourly time frame, despite the good growth on Friday. Now the "swing" can begin and the pair can change the direction of movement every day. The lines of the Ichimoku indicator are already being ignored, which is a sign of a flat. On Monday, trading could be performed at the following levels: 0.9553, 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9779) and Kijun-sen lines(0.9791). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also additional support and resistance levels, but trading signals are not formed near them. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal.The European Union and the United States will publish indexes of business activity in the services and manufacturing sectors. If there is no strong deviation from the predicted values, then there may not be a reaction to these data either. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 02:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325054
The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

Political Situation In UK Could Add Even More Volatility In The Cable Market (GBP/USD)

InstaForex Analysis InstaForex Analysis 24.10.2022 08:23
GBP/USD 5M The GBP/USD currency pair also managed to thoroughly "fly" from side to side on Friday, as it did the day before. A rather strong decline in quotes began in the morning, which could be connected with the British statistics purely theoretically, because at the same time the euro was also falling. And an even stronger upward movement began in the US trading session, in which the pound added 260 points. We cannot conclude that this is how traders reacted to any news, because the movements during the day were multidirectional and not tied in time to any point. However, the apparently heightened volatility may indicate that the news of Liz Truss's resignation was received with a bang by the market. By the way, one cannot say that Truss's resignation is good news for the pound. Of course, we can assume that all its succeeding actions could be as disastrous as the "plan to save the economy." But still, this is unlikely, and in any case, traders managed to win back both the Truss initiative to reduce taxes, and the abolition of this plan, and the stabilization measures of the Bank of England. Truss may leave, but another Premier will come in her place and face the same economic problems. In regards to Friday's trading signals, it was a little easier for the pound than the euro. The first sell signal turned out to be false and closed on Stop Loss at breakeven. The second sell signal was already correct, and the price moved in the right direction by 130 points. Unfortunately, it was too far from the target level, so the position should have been planned to be closed manually from the very beginning. Points 70-80 on it could be taken completely freely. This was followed by the third sell signal near the Senkou Span B line, which also turned out to be false, but also closed by Stop Loss. All subsequent signals near this line should have been ignored. COT report: The latest Commitment of Traders (COT) report on the British pound showed a new growth in bearish sentiment. In the given period, the non-commercial group closed 8,600 long positions and opened 3,400 short positions. Thus, the net position of non-commercial traders fell by 12,900, which is quite a lot for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 40,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? As for the total number of open longs and shorts, here the bulls have an advantage of 25,000. But, as we can see, this indicator does not help the pound too much either. We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 24. ECB meeting: how much will the central bank raise the rate? Overview of the GBP/USD pair. October 24. This week - the election of the prime minister in the UK! Forecast and trading signals for EUR/USD on October 24. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair is trading very volatile and very inadequately on the hourly timeframe. The price often changes direction and travels impressive distances in each. The lines of the Ichimoku indicator are also ignored, which speaks of the same "swing". On Monday, trading could be performed at the following levels: 1.0930, 1.1060, 1.1212, 1.1354, 1.1486, 1.1649. Senkou Span B (1.1179) and Kijun-sen (1.1248) lines can also be sources of signals. Signals can be bounces and breakouts of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. The UK and the US are set to release reports on business activity in the services and manufacturing sectors. The reaction of traders to them may follow in case of a strong deviation from the forecast values. And the pound now, in principle, does not really need statistics in order to trade volatilely. Plus, the election of a new British prime minister will take place this week, which could add even more volatility. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 02:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325056
Foreign exchange - Euro against US dollar - preview

The EUR/USD Pair: We Should Expect An Equally Strong Growth

InstaForex Analysis InstaForex Analysis 24.10.2022 08:28
After a strong decline in EUR/USD over 14 years, the US dollars show signs of weakness. So, we are looking for a break above resistance at 0.9997 to confirm that the US dollar has topped and completed the corrective decline in EUR/USD from 1.6038 to 0.9507. We want to check whether the next impulsive rally to well above the peak of wave [A] 1.6038 has begun. As the last part of the decline in EUR/USD from 1.2266 to 0.9507 has been fast, we should expect an equally strong rally once resistance at 0.9997 breaks and the US dollar comes under pressure. The first major target to look for is June 2021 peak at 1.2266, but in the longer term, we should see a much weaker USD.   Relevance up to 07:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/297958
The Price Of USD/JPY Pair Has To Fight With The Resistance Level

Look At The US Dollar To Japanese Yen Chart (USD/JPY)

InstaForex Analysis InstaForex Analysis 24.10.2022 08:32
    Relevance up to 07:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/297960
China Yuan (CNH) Prints The First Daily Loss

The US Dollar To Chinese Yuan (USD/CNH) Pair Are Facing Challenges

TeleTrade Comments TeleTrade Comments 24.10.2022 08:36
USD/CNH snaps two-day losing streak even as China’s Q3 GDP improved. Short-term rectangle signals limited upside moves but sustained trading beyond 200-HMA favor buyers. Fortnight-old ascending trend line, bullish MACD signals also strengthen upside bias. USD/CNH remains firmer around 7.2700 as bulls retake control during early Monday, after a two-day absence. In doing so, the offshore Chinese yuan (CNH) ignores recently firmer China data while staying inside a three-day-old rectangle formation. That said, China’s Q3 GDP rose to 3.9% YoY versus 3.4% expected while September’s Industrial Output also increased by 6.3% in a year compared to 4.5% market forecasts. However, China Retail Sales eased to 2.5% YoY from 3.3% market expectations during September. Also read: China GDP (YoY) Q3: 3.9% (exp 3.3% vs. prev 0.4%), Aussie remains volatile Although the stated triangle’s upper line, around 7.2800 at the latest, challenges the USD/CNH bulls, the pair’s sustained trading beyond the two-week-old ascending trend line and the 200-SMA, respectively near 7.2180 and 7.2250, keep buyers hopeful. Also favoring the upside hopes are the bullish MACD signals. However, the monthly high near 7.2840 and the 7.3000 psychological magnet may challenge the USD/CNH buyers going forward. On the flip side, a clear break of the 200-SMA level surrounding 7.2180 could quickly direct the quote to the 50% and 61.8% Fibonacci retracement level of October 05-21 upside, near 7.1480 and 7.1160 in that order. USD/CNH: Hourly chart Trend: Further upside expected
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The Future Of The USD/CAD Exchange Rate Will Depend On The Decision Of Bank Of Canada (BOC)

TeleTrade Comments TeleTrade Comments 24.10.2022 08:40
USD/CAD has accelerated to near 1.3680 amid a stellar recovery in the DXY. The 10-year US Treasury yields have extended their losses to near 4.17% amid soaring market mood. The BOC may trim the extent of the rate hike to 50 bps this week. The USD/CAD pair sensed buying interest after dropping to near the round-level support of 1.3600 in early Tokyo. The loonie bulls have retreated after the US dollar index (DXY) defended the intervention rumors of the Bank of Japan (BOJ) recovered its entire intraday losses. The asset has extended its gains to near 1.3680. The DXY has recaptured its intraday high at 112.26 and is expected to behave critically ahead as the returns on US government bonds have dropped sharply. The 10-year US Treasury yields have extended their losses by 4.17% after displaying jaw-dropping gains to near 4.34% on Friday. Market sentiment is extremely cheerful and S&P500 futures are holding their gains. On Monday, the US S&P PMI data will be keenly watched. The Manufacturing PMI is expected to decline to 51.2 vs. the prior release of 52.0 while the Services PMI may drop to 49.2 from 49.3 reported earlier. This week, the interest rate decision from the Bank of Canada (BOC) will determine the further direction of the asset. A Reuters poll on projections for BOC’s interest rate claims that BOC Governor Tiff Macklem will announce a rate hike of 50 basis points (bps). The extent of the rate hike seems lower than their current pace of hiking interest rates. It is worth noting that the headline inflation rate in Canada was recorded at 6.9% for September. On the oil front, oil prices have dropped below the crucial support of $85.00 amid mounting global recession fears. In addition to the BOC, the BOJ and the European Central Bank (ECB) will announce their monetary policies. The BOJ may continue its ultra-loose stance while the ECB could tighten its monetary policy. An expectation of a fresh rate hike spell is weighing pressure on oil prices.
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

The AUD/JPY Pair And Unsuccessful Attempt To Recover To The Top Level

TeleTrade Comments TeleTrade Comments 24.10.2022 09:01
AUD/JPY has declined after failing to recapture an intraday high at 95.43 amid flat Chinese imports data. The RBA may return to a 50 bps rate hike pace amid higher consensus for Aussie CPI. A continuation of an ultra-dovish monetary policy by the BOJ looks likely. The AUD/JPY pair dropped again after an attempt to recapture an intraday high at 95.43. The risk barometer has sensed selling pressure despite the release of downbeat China’s economic data. Meanwhile, overall risk impulse is solid as S&P500 futures are holding their morning gains, followed by an upbeat Friday. China’s Gross Domestic Product (GDP) data for annual and quarterly segments have soared to 3.9%, higher than their projections. The overall Trade Balance has accelerated to $84.74B vs. the expectations of $81.0B and the prior release of $79.39B. China’s export data has remained upbeat while their imports have remained flat at 0.3%, much lower than the estimates of 1%. As Australia is a leading trading partner of China, lower-than-projected Chinese import data has impacted the aussie bulls. This week, aussie investors will focus on Wednesday’s Consumer Price Index (CPI) data. On an annual basis, the headline CPI figure will accelerate to 6.9% vs. the former release of 6.1%. While a decline to near 1.5% is expected from the prior settlement of the inflation rate at 1.8% on a quarterly basis. This may force the Reserve Bank of Australia (RBA) to return to the 50 basis points (bps) rate hike structure. Meanwhile, yen investors are awaiting more development on the Bank of Japan (BOJ) intervention in the currency markets to safeguard the Japanese yen against one-sided speculative moves. Japanese officials have denied commenting on whether they have intervened in currency markets or not. However, analysts at National Australia Bank (NAB) in Sydney have cited that “It’s blindingly obvious that the BOJ is intervening,” Going forward, the Bank of Japan (BOJ)’s monetary policy will remain the key. Considering the risk of external demand shocks cited by BOJ Governor Haruhiko Kuroda last week, the central will stick to its ultra-loose monetary policy.
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The EUR/GBP Pair: The Shared Currency Bulls Have Picked Demand

TeleTrade Comments TeleTrade Comments 24.10.2022 09:04
EUR/GBP is playing around the immediate hurdle of 0.8700 after a firmer rebound. The chances of a 75 bps rate hike announcement by the ECB look solid. Former UK PM Boris Johnson has asked Rishi Sunak to step back from the UK PM race. The EUR/GBP pair is hovering near the round-level resistance of 0.8700 in the late Tokyo session. The asset has accelerated after a gap-down opening near 0.8660 and is aiming to overstep the immediate hurdle of 0.8700. The shared currency bulls have picked demand as investors are betting over a bigger rate hike announcement by the European Central Bank (ECB). Price pressures in the trading bloc are mounting and have not displayed any sign of exhaustion yet. Therefore, ECB President Christine Lagarde is required to tighten its policy further. According to analysts from Rabobank, a 75 basis point (bps) interest rate hike is a done deal. They see the deposit rate reaching 3% by March next year. Currently, the ECB rates stand at 1.25% as the central bank announced a 75 bps rate hike in September. Apart from that, soaring energy bills are hurting the sentiment of households in Germany. On Friday, Reuters reported that German Parliament is preparing to vote for the approval of a €200 billion emergency rescue package to tackle the energy crisis. On the UK front, escalating political tensions have turned the pound bulls extremely volatile. The Shortest UK Prime Ministerial term by Liz Truss has dampened the confidence of stakeholders. Meanwhile, the debt crisis in the UK economy has reached the sky and the novel UK prime Minister will face the highest-ever debt burden. It would be worth watching the efforts from would-be UK Prime Minister and newly appointed Finance Minister Jeremy Hunt in fixing the pile debt mess. British Conservative Party needs a suitable candidate to maintain decorum and avoid their defeat in General Elections, scheduled for 2024. However, Boris Johnson has asked Rishi Sunak to step down from the UK PM race, which will be decided latest by Friday.
Further Downside Of The AUD/JPY Cross Pair Is Expected

The Australian Bulls Can Get Stronger Further, The AUD/USD Pair Is Positive

TeleTrade Comments TeleTrade Comments 24.10.2022 09:09
Aussie bulls are witnessing fresh demand after testing Wyckoff consolidation’s breakout. The positive market sentiment has trimmed returns on US Treasury yields. The 20-EMA has acted as major support for the counter. The AUD/USD pair has attempted a rebound after dropping to near 0.6324 in the late Tokyo session as the risk-on impulse has strengthened further led by gains recorded in S&P500 futures after a solid Friday. The US dollar index (DXY) is working on establishment above 112.00, however, a cheerful risk profile could bring volatility to the counter. Meanwhile, the 10-year US Treasury yields have dropped further to near 4.15% amid improved risk appetite. Going forward, the Australian inflation data will be of utmost importance. On an hourly scale, the asset is testing the textbook-carbon Wyckoff’s consolidation breakout. The major rebounded firmly after Richard Wyckoff’s Spring formation which indicates the climax of the selling pressure and investors make a fresh demand, considering the asset a value buy. The Spring formed at the two-year low of 0.6170. The responsive action from aussie bulls has turned into a breakout of the longer consolidation phase and now the upside break is testing the breakout’s edge. The 20-period Exponential Moving Average (EMA) at 0.6340 is acting as major support for the counter. Meanwhile, the Relative Strength Index (RSI) (14) has retraced from the bullish range of 60.00-80.00. The aussie bulls will strengthen further if the RSI (14) returns to bullish territory. Going forward, a decisive break above Thursday’s high at 0.6356 will strengthen the aussie bulls. This will drive the asset towards October 7 high at 0.6432, followed by October 4 high at 0.6548. On the flip side, a downside break of Thursday’s low at 0.6229 will drag the asset toward the fresh two-year low at 0.6170 and April 2020 low at 0.5991. AUD/USD hourly chart  
Rates Spark: Action at Both Ends of the Curve - US 10yr Treasury Yield and European Rates

The US Dollar To Indian Rupee (USD/INR) Pair Remains On The Front Foot

TeleTrade Comments TeleTrade Comments 24.10.2022 09:18
USD/INR picks up bids while snapping two-day downtrend. DXY rebounds amid mixed sentiment, hawkish Fed bets, ignores softer yields. Downbeat oil prices, pre-Fed anxiety challenge pair buyers amid holiday in India. Monthly PMIs, US Q3 GDP will be important for fresh impulse, risk catalysts are the key. USD/INR grinds higher around 82.70 as it prints the first daily gain in three despite Monday’s Diwali holidays in India. The Indian rupee (INR) pair’s latest gains could be linked to the US dollar’s broad recovery amid the market’s cautious mood. That said, the US Dollar Index (DXY) rises 0.20% intraday to 112.11 by the press time amid chatters surrounding Japan’s meddling in the market to defend the yen, as well as challenges to the risk appetite. Among the major risk-negative catalysts, fears emanating from Korea, China and Russia are crucial to the DXY’s latest rebound. On the same line could be the latest recovery in the hawkish Fed bets. The news that both North and South Korea have exchanged warning shots near their disputed western sea boundary, published on Monday, also seemed to have favored the US dollar buyers of late. On the same line could be the fears that China President Xi Jinping won’t hesitate to escalate geopolitical matters with the US when it comes to Taiwan. The reason could be linked to Jinping’s dominating performance at the annual Communist Party Congress after winning the third term in a row. Further, news that China announced covid lockdown in the factory hub Guangzhou and the latest jump in the market’s bets over the Fed’s 75 bps move in November, from 88% to 95%, also seemed to have fuelled the USD/INR prices. Additionally, ABC News quoted Ukrainian General Oleksandr Syrskiy citing fears of Nuclear war. Amid these plays, S&P 500 Futures struggle for clear directions even as Wall Street posted the biggest weekly gains in four monthly by the end of Friday. It should be observed that the USD/INR run-up also ignores a fall in the US Treasury yields as the benchmark 10-year coupons extend Friday’s pullback from the 32-year high to 4.15%, down six basis points at the latest. On the same line, a fall in the WTI crude oil prices and the hopes of the Reserve Bank of India’s (RBI) intervention to defend the INR also could have defended the USD/INR bears but did not. To sum up, USD/INR remains on the front foot due to the US dollar’s fundamental strength versus the INR. However, the RBI intervention and further declines in oil prices may test the buyers. Also important to watch are the preliminary activity numbers for October and the US Gross Domestic Product for the third quarter (Q3). Technical analysis A daily closing below a one-month-old support line, around 82.30 by the press time, becomes necessary for the USD/INR bear to retake control.
China’s Caixin Manufacturing PMI Data Might Support The New Zealand Dollar (NZD)

Expectations That The NZD/USD Pair Will Return To Normal

TeleTrade Comments TeleTrade Comments 24.10.2022 09:31
NZD/USD has displayed a rebound move to near 0.5700 as DXY turns quiet after a roller-coaster move. Investors’ risk appetite has trimmed as S&P500 futures have surrendered their morning gains. The US S&P PMI data is expected to display a weaker performance ahead. The NZD/USD pair has defended the downside around 0.5720 as investors are shrugging off fears of China Xi Jinping’s third-term leadership announcement. The asset has started displaying reflex actions after a drop and is expected to recover ahead. Overall risk profile in the market is displaying a decline in investors’ risk appetite as S&P500 futures have surrendered major of their morning gains. The US dollar index (DXY) is eyeing stability after a roller-coaster ride and is continuously auctioning above the critical hurdle of 112.00. Returns on US government bonds have declined sharply. The 10-year US Treasury yields have tumbled to 4.16%, at the press time. The continuation of China’s XI Jinping leadership for the third time has created havoc for Chinese equities as the risk of a slowdown in economic prospects has escalated. It is worth noting that New Zealand is a leading trading partner of China and weaker Chinese prospects could lead to lower exports for the antipodean. Also, Monday morning’s China Trade Balance data impacted the kiwi bulls. The overall Trade Balance has accelerated to $84.74B vs. the expectations of $81.0B and the prior release of $79.39B. China’s export data has remained upbeat while their imports have remained flat at 0.3%, much lower than the estimates of 1%. A lower-than-projected Chinese imports data brought volatility in the kiwi counter. Going forward, the US S&P PMI data will be a key trigger for the asset. The Manufacturing PMI is expected to decline to 51.2 vs. the prior release of 52.0 while the Services PMI may drop to 49.2 from 49.3 reported earlier.
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

FX Today: Major Currencies Stay Relatively Quiet (EUR/USD, USD/JPY, GBP/USD)

TeleTrade Comments TeleTrade Comments 24.10.2022 11:00
Here is what you need to know on Monday, October 24: As investors prepare for the highly-anticipated central bank decisions later this week, major currencies stay relatively quiet at the start of the new week except for the Japanese yen. The US Dollar Index moves sideways at around 112.00 and US stock index futures trade flat on the day. S&P Global will release the preliminary October Manufacturing and Services PMI data for Germany, the euro area, the UK and the US. Federal Reserve Bank of Chicago's National Activity Index will also be looked upon for fresh impetus later in the day. During the Asian trading hours, the data from China revealed that the Gross Domestic Product grew at an annualized rate of 3.9% in the third quarter. This reading came in better than the market expectation for an expansion of 3.4%. Retail Sales in China, however, rose by 2.5% on a yearly basis, falling short of analysts' estimate of 3.3%. The Shanghai Composite fell sharply following mixed data and was last seen losing more than 2% on a daily basis. USD/JPY The USD/JPY pair climbed toward 150.00 in the first hours of trading early Monday but lost over 400 pips in a matter of 10 minutes. Japan’s top currency diplomat Masato Kanda refrained from clarifying whether they intervened in the market but reiterated that they will continue to take appropriate action against excessive, disorderly market moves. Following the sharp decline witnessed in the Asian session, the pair recovered to the 149.00 area, where it's up around 1% on the day. EUR/USD EUR/USD trades in a relatively tight range near mid-0.9800s following Friday's rebound. Business activity in the euro area's and Germany's manufacturing sectors are expected to continue to contract in early October.  GBP/USD GBP/USD trades in positive territory and continues to edge higher toward 1.1400 in the early European morning on Monday. Former British Prime Minister Boris Johnson announced that he ended his big to replace Liz Truss. Meanwhile, former chancellor Rishi Sunak has reportedly 165 supporters ahead of Monday's nomination deadline and remains the clear favourite to become the next PM. Gold Following Friday's impressive upsurge, gold climbed to a fresh 10-day high near $1,670 early Monday but struggled to preserve its bullish momentum. At the time of press, XAU/USD was little changed on the day at $1,657. Meanwhile, the 10-year US Treasury bond yield is down nearly 2% on the day, helping gold hold its ground for the time being. BTC Bitcoin climbed toward $20,000 on Sunday but lost its traction before reaching that level. As of writing, BTC/USD was down 1% on the day at $19,350. Ethereum ended up gaining more than 4% last week and seems to have gone into a consolidation phase above $1,300 early Monday.
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Only A Change In The BoJ's Policy May Stop The Downtrend In The Yen (JPY)

InstaForex Analysis InstaForex Analysis 24.10.2022 12:45
The USD/JPY pair went into a turbulence zone. The pair has been fluctuating wildly for a second consecutive session. For how long will this roller coaster continue and where will it bring the pair? USD pressured by FX interventions Last week, USD/JPY surged amid a growing gap between the rate policies of the US and Japan. This resulted in a spectacular rally of the pair. In just a few days, the greenback strengthened against the yen by more than 1% and broke through the psychological level of 150. It continued to advance supported by the hawkish plans of the Fed. In the early session on Friday, USD considerably accelerated growth and jumped to a fresh 32-year high of 152. This was the last straw for the Japanese government that has repeatedly warned it would have to intervene again if the yen continued to fall. Yet, given the failure of the previous intervention, the dollar bulls downplayed these warnings and had to regret this later. At the end of the previous week, JPY unexpectedly surged by 4% in just a few hours and reached the mark of 144.50. This jump had no fundamental ground which is why traders suspected another intervention by the Bank of Japan. Although Japanese monetary authorities declined to comment, most analysts are sure that these were the measures that helped the yen recover. According to estimates, the BoJ spent around $30 billion on currency interventions which is $10 billion more compared to the previous round. Moreover, some analysts are sure that the regulator made another intervention this morning when the US dollar headed for the key level of 150 against the yen. A rapid fall in the US dollar may serve as proof of this assumption. The greenback dropped sharply without any obvious reason. "It's blindingly obvious that the BOJ is intervening," Ray Attrill, head of FX strategy at National Australia Bank in Sydney, said. Storm alert for USD/JPY However, interventions are becoming less effective with time. At the moment of writing, USD managed to recover back to 149 and settled there. The US currency is regaining ground at a fast pace, driven by the growing gap between monetary policies of the Fed and the BoJ. More than a week is left until the next Fed meeting where the regulator is expected to raise rates once again. As this event is approaching, hawkish expectations will rise, thus boosting the growth of the US dollar. In addition, traders are waiting for the report from the BoJ. The regulator is widely expected to maintain its current monetary policy and leave the rate unchanged. If so, the greenback may get another strong driver while the yen will depreciate further. But will Japan's monetary authorities put up with this? Most likely, they will continue to intervene. Japan's top currency diplomat Masato Kanda said this morning that authorities were ready to take tough measures to tackle speculations against the yen. Analysts assume that Japan may introduce more interventions in the coming days. This means that USD/JPY will be extremely volatile this week. So, traders should be very cautious when dealing with this instrument. At the same time, experts note that interventions may have limited effect on the yen. As long as the Fed is aggressively hiking the rate, the BoJ is unlikely to halt the rally of the US dollar. Only a change in the BoJ's policy may stop the downtrend in the yen. Yet, there are no signs of such a change which means that USD will keep strengthening against the yen despite all attempts by the BoJ.   Relevance up to 10:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/325116
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

Bank Of Canada (BoC) And ECB Interest Rate Expectations | Redundancies Of 4,000 Employees At Philips

Saxo Bank Saxo Bank 24.10.2022 12:51
Summary:  Equities snapped back higher Friday to close the week on a positive note and near the highs for the week, perhaps as the persistent rise in US treasury yields finally reversed sharply intraday on Friday after posting new cycle highs. The positive mood carried over into the early Asian session overnight as yields fell further, but sentiment has soured again slightly ahead of the open of the European session today. The Japanese yen weakened after Friday’s wild rally from new multi-decade lows, a move that was likely intervention-driven. The week ahead will feature earnings reports from the largest US megacaps.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Strong equity session on Friday with S&P 500 futures closing at a weekly high and this morning the index futures briefly pushed above the 3,800 level which is quite startling given the price action out of China. Many of the large US companies have considerable revenue exposure to China, so there is a downside risk here to US companies as the increasing political risk premium on Chinese equities could impact valuation on US companies with large Chinse exposure. The falling US 10-year yield likely driven by safe-haven seeking flows is offsetting at the margin some of the headwinds for US equities, but the medium-term outlook remains negative. It is also a massive earnings season week in the US with most of the mega caps reporting earnings, so volatility could easily pick up during the week in the event that these earnings surprise to the downside. Hang Seng (HK50.I) In light of the events over the weekend in China with Xi Jinping drawing up a new leadership in China (see more in-depth analysis below), the Hang Seng Index is selling off 6.4% to price levels seen as far back as 2005; in the total return basis is not quite as bad. The equity valuation on Hang Seng Index has fallen to less than 8 on 12-month forward P/E ratio suggesting that a steep political risk premium is being built into Chinese equities. Chinese mainland shares are down 3.2% during the session likely reflecting the divergence in foreign ownership. Wild ride for JPY traders Friday, likely on intervention The yen spiked further to the downside as global bond yields continued to rise Friday, with USDJPY nearly reaching 152.00 before what may have been a powerful intervention from official Japanese sources took USDJPY as far south as sub-146.50 levels on Friday as bonds also found support. Japan’s finance minister Shunichi Suzuki said that the country is in a showdown speculators and can’t tolerate “excessive” moves in the JPY. The action has sprung back overnight, taking USDJPY back to the 149.00 area in early European trading today. Other USD pairs have moved in sympathy with the wild volatility in JPY, with sudden USD weakness late Friday following through in places overnight but reversing later in the session. Elsewhere in FX, sterling is bid on hopes of an orderly transition to a new prime minister, most likely Rishi Sunak. Crude oil (CLZ2 & LCOZ2) Crude oil has given back some of Friday’s weaker-dollar-driven gains as fears over the global economic outlook continues to offset OPEC+ production cuts and EU sanctions on Russian oil flows from early December. A batch of delayed economic data out of China and President Xi tightening his grip on the country also helped sour sentiment at the start of a new week. Overall, however, the oil market judging from the bullish curve structure remains tight signalling no easy path for those looking for lower prices. Focus this week on earnings from Exxon, Shell and their Big Oil peers. HG Copper trades near resistance in the $3.5lb area ... following an end of week rally that was triggered by a weaker dollar and softer yields (see below). A batch of data released by China overnight saw copper imports reach their second highest level this year and despite the current property market crisis, the metal is seeing rising demand in order to replenish low stock levels and from clean energy production which is taking hold even as China’s broader demand for commodities have seen a slowdown due to lower economic activity. Speculators have traded copper from the short side since April, and a break above $3.70 is likely to be the minimum requirement for that to change. Gold (XAUUSD) Gold reached $1670 overnight as Friday's rally extended into the Monday session, and apart from speculation about the timing of a peak-and-reversal in US treasury yields, it is the current wild ride in USDJPY that has got the algo’s going wild in both directions. While we maintain our long-term bullish view on gold and silver, the price action has yet to confirm a reversal. This despite the second failed attempt last week to break lower through key support at $1617. The exodus from bullion backed ETFs has gathered pace recently as investors instead focus on increasingly attractive bond market yields. Gold will likely continue to trade in a choppy fashion until we reach peak hawkishness and/or the dollar starts to weaken. US treasuries (TLT, IEF) US treasury yields spiked further on Friday, with the 10-year treasury yield benchmark posting a remarkable 4.33% before treasuries finally found strong support, closing the day slightly below the prior day’s close of 4.22% and following through to 4.16% in early European trading today. Could this prove a climax peak-and-reversal in yields? We would need to see the yield work back down below 4.00% for a stronger indication. Noted “Fed whisperer” Nick Timiraos of the Wall Street Journal penned an article at the weekend suggesting that the Fed is preparing for a downshift in the pace of rate hikes by early next year (more below). US 2-year yields are also sharply lower from the Friday highs, having fallen some 20 basis points and trading near 4.43% this morning. What is going on? China’s Communist Party’s new leadership China’s General Secretary Xi lined up a team who deeply share his vision of the future of China and the blueprint of the governance model and development strategies that he had established to replace four of the seven members of the Chinese Communist Party’s Politburo Standing Committee, including Li Keqiang, Premier. The strategies of common prosperity, high-quality development, dual circulation, technology self-reliance, strengthening governance within the CCP, and deepening CCP’s leadership over all aspects of the country will continue. WSJ’s Nick Timiraos suggests the Fed is eyeing a slowdown in its pace of tightening Timiraos is widely considered to have solid access to Fed sources and in a piece released this Saturday, affirms the market view that the Fed may begin to downshift from the 75-basis point hike pace, perhaps already after the November meeting and eventually pause the tightening regime at some point early next year to offer time to assess the impact of the rapid pace of rate hikes, which took the Fed Funds rate from 0-0.25% as late as March of this year to a projected 4.25-4.50% after the December meeting. But he also notes the variety of opinions among Fed officials, some of whom are in favour of carrying on with the current pace of tightening and not wanting to signal any change in resolve as long as inflation persists anywhere near current levels. Philips in urgent restructuring laying off 4,000 employees The Dutch industrial conglomerate has been a mess for years and this morning the company is reporting revenue and EBITDA in line with estimates, but announcing a big restructuring of the company laying off 4,000 employees to improve profitability ahead of what the company expects to be more challenging times. What are we watching next? Former UK Chancellor Rishi Sunak may become next UK Prime Minister today Former PM Boris Johnson announced at the weekend that he will not run for leadership of the conservative party. The deadline to announce support from at least 100 Tory lawmakers is today at 14:00 UK time, with the only challenger to Sunak’s bid Penny Mordaunt, who may not have sufficient votes. Sunak has over 100 backers and will automatically become the next Prime Minister if Mordaunt can’t muster sufficient support for a run-off. Bank of Canada and ECB set to hike by 75 basis points this week On Wednesday, the Bank of Canada (BoC) is expected to hike interest rates by as much as 75 basis points, taking the policy rate to 4.00% if they do so, after a hotter than expected CPI print in September for Canada. On Thursday, the European Central Bank (ECB) will also further tighten its monetary policy to fight against widespread and persistent inflation. We think that the ECB will have no other choice but to send a hawkish message to the markets (meaning a 75-basis point interest rate hike) and signal further hikes to come, at least until February 2023. It is likely that the central bank will downshift interest rate hikes in December 2022 and in February 2023 to take into consideration the ongoing economic slowdown (which may end up in a recession). At this week’s meeting, the ECB governing council will also discuss two other matters: 1) Quantitative tightening and when/how it should start. But a final decision is not expected until December; 2) commercial banks’ early repayment of TLTRO (for Targeted Longer-term Refinancing Operations to provide financing at very low rates to credit institutions). Those two points are unlikely to be major market movers. Further pressure on Japan’s yield curve control? Last week, the Bank of Japan (BoJ) was forced to start emergency bond buying operations to maintain its yield curve control (YCC) policy. Pressure could remain high this week again. Several factors are pushing yields higher in Japan: highest inflation print since 1991, calls for very large wage increases and the continued upward migration in global yields, of course. Earnings to watch Around 430 earnings releases expected this week in the earnings universe that we cover during earnings seasons. Out of those more than 400 earnings releases, the most important ones are highlighted below. By the end of this week, we will have an adequate view into revenue growth, operating margin, and earnings growth on a both q/q and y/y basis. Today: Nidec, Philips, Cadence Design Systems Tuesday: First Quantum Minerals, Canadian National Railway, DSV, UPM-Kymmene, SAP, HSBC, ASM International, Norsk Hydro, Novartis, UBS, Kuhne + Nagel, Microsoft, Alphabet, Visa, Coca-Cola, Texas Instruments, UPS, Raytheon Technologies, General Electric, 3M, General Motors, Valero Energy, Biogen, Enphase Energy, Halliburton, Spotify Technology Wednesday: Dassault Systemes, Mercedes-Benz, BASF, Deutsche Bank, PingAn Insurance, CGN Power, UniCredit, Canon, Barclays, Standard Chartered, Heineken, Aker BP, Iberdrola, Banco Santander, SEB, Meta Platforms, Thermo Fisher Scientific, Bristol-Myers Squibb, ADP, Boeing, ServiceNow, Ford Motor, Twitter Thursday: ANZ, Anheuser-Busch InBev, Argenx, Shopify, Teck Resources, Neste, Kone, TotalEnergies, EDF, STMicroelectronics, PetroChina, China Life Insurance, CNOOC, Oriental Land, Shin-Etsu Chemical, Takeda Pharmaceuticals, Hoya, FANUC, Shell, Lloyds Banking Group, Universal Music Group, Repsol, Ferrovial, Hexagon, Evolution, Credit Suisse, Apple, Amazon, Mastercard, Merck & Co, McDonald’s, Linde, Intel, Honeywell, Caterpillar, Gilead Sciences, Pioneer Natural Resources Friday: Macquarie Group, OMV, ICBC, China Merchants Bank, LONGi Green Energy Technology, Midea Group, Imperial Oil, Danske Bank, Sanofi, Airbus, Volkswagen, China Construction Bank, Agricultural Bank of China, Bank of China, BYD, China Shenhua Energy, Eni, Keyence, Hitachi, Denso, Equinor, CaixaBank, Wilmar International, Swiss Re, Exxon Mobil, Chevron, AbbVie, NextEra Energy, Colgate-Palmolive, Royal Caribbean Cruises Economic calendar highlights for today (times GMT) 0715-0800 – Eurozone Oct. Flash Manufacturing and Services PMI 0830 – UK Oct. Flash Manufacturing and Services PMI 1230 – US Sep. Chicago Fed National Activity Index 1345 – US Oct. Flash Manufacturing and Services PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-24-2022-24102022
Saxo Bank Members Talks About Commodities, Intervention From Japan And More

Saxo Bank Members Talks About Commodities, Intervention From Japan And More

Saxo Bank Saxo Bank 24.10.2022 12:57
Summary:  Today we look at the zany session that developed on Friday across not just USDJPY but all markets in the wake of apparent heavy official intervention from Japan, although sources there are playing coy with their communication on the issue. We also discuss a vicious further slide in the Hang Seng index as investors vote no confidence in the signals emanating from the CCP party congress ahead of Xi's third term. A look at natural gas, copper, earnings season hitting fever pitch this week, the macro calendar for the week ahead and more in today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-oct-24-2022-24102022
Central Banks' Rates Outlook: Fed Treads Cautiously, ECB Prepares for Hike

A Summary Of Futures Contracts, The Funds Increased Their Natural Gas Shortages

Saxo Bank Saxo Bank 24.10.2022 13:08
Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to Tuesday, October 18. A week that saw stocks rebound after a solid start to the corporate-earnings season helped offset continued growth worries. The dollar traded softer and bond yields higher while commodities adopted a defensive stance with the biggest amount of net selling hitting crude oil, gold, corn and coffee. Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report Financial Markets Quick Take - October 24, 2022Saxo Market Call Podcast: HangSeng delivers a vote of no confidence in Xi's 3rd term This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to Tuesday, October 18. A week that saw stocks rebound from oversold levels after a solid start to the corporate-earnings season helped offset continued worries about how far central banks are prepared to hike rates in order to combat inflation through forcing a reduction in economic activity.    With exception of the JPY, the dollar traded softer against most major currencies while bond yields rose ahead of a mid-week spike that saw 2-year yield jump to the highest since 2007 as traders pushed expectations for the peak policy rate closer to 5% by early 2023. Commodities traded defensively throughout the week with losses seen across most sectors led by energy, especially natural gas which slumped by close to 13%.  Commodities The Bloomberg Commodity index lost 3.2% during the reporting week with losses being led by the energy sector where the market reversed some of the gains seen in the previous week when OPEC and Russia announced their surprise production cut. Natural gas slumped 13% on the week while renewed yield strength and economic worries sent most metals sharply lower with funds reversing back to net short position in gold, silver and copper.    Responding to these developments, speculators cut their total exposure across 23 major commodity futures by 7% to 1.037,869 contracts with the biggest amount of net selling hitting crude oil, gold, corn and coffee with buying concentrated in soybean oil, sugar and hogs.  Energy Responding to renewed weakness, speculators cut bullish WTI and Brent crude oil bets by a combined 57k lots to 353k lots, thereby reversing the bulk of the buying seen in the aftermath of OPEC+ decision to cut production. The change was led by a combination of longs (-42k lots) bailing out of recently established positions and fresh shorts (+15k) being added. The product market was mixed with buying of the two distillate contracts while gasoline length was reduced. Funds increased their natural gas short by 6% to 82.5k lots in response to a near 13% drop on continued mild weather and rising production.  Metals Sellers returned to the metal sector with the recently established small longs in gold, silver and copper being flipped to decent size short positions while platinum’s small gain on the week managed to attract additional fresh longs. Agriculture  The combined long in across the six major grain and oilseed contracts held steady around 471k lots with buyin of soybean oil being offset by selling of corn and wheat. In softs the main action was seen in coffee where months of relative robust price action supported by tight market conditions gave way to a 10% slump driving a 64% reduction in the net long to just 12k lots, an 18 month low. Sugar meanwhile saw net buying with the net long jumping 36% to 107k while recession worries reduced the cotton long to 22k lots and lowest since July 2020.     Forex In forex, flows remained mixed during a week that saw the dollar index trade softer by 1% after recently hitting a 20-year high. Overall the gross dollar long against nine IMM currency futures and the Dollar index rose by 5% to $15 billion, primarily driven by heavy JPY selling as the under siege currency dropped 2.3% towards the important 150 level. Elsewhere, a recovering Sterling saw net selling with speculators reducing the gross long more than offsetting fresh short selling.Speculators continued to buy euros and since August 30 when EURUSD traded around €1 they have bought €12 billion, driving their net futures exposure from a 48k lots short to a 48k lots long, a four-month high.   What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming   Source: https://www.home.saxo/content/articles/commodities/cot-crude-oil-sold-on-fading-opec-impact-metal-positions-flip-back-to-net-short-24102022
Growth Of The USD/JPY Pair Is Hampered By Resistance

The Dovish Policy Of The Bank Of Japan (BoJ) Will Not Help The Japanese Yen (JPY)

Kenny Fisher Kenny Fisher 24.10.2022 13:47
The Japanese yen is sharply lower today, as USD/JPY has climbed 1.2% and is trading at 149.41 in Europe. The yen continues to exhibit strong swings for a second straight session. The yen started the week with sharp gains and jumped to 145.28, but the dollar has recovered and pushed the yen back above 149. This is a repeat of the whipshaw we saw on Friday, when the yen traded in a range of almost 600 points. MOF apparently intervenes to boost yen The wild price action is most likely a result of intervention by Japan’s Ministry of Finance (MOF), although Japanese authorities are staying mum. Prime Minister Kishida said today that the government would not tolerate excessive currency moves based on speculators, but this rhetoric is nothing new.  The yen hit a new 32-year high of 151.95 on Friday, and the MoF may have decided to take off the gloves and has intervened for a second straight day. Will the stealth intervention succeed in propping up the yen? The move did the job on Friday, with USD/JPY falling 1.7%, but the dollar has recovered most of those losses on Monday. The harsh reality is that the widening rate differential between Japan and the US will make unilataral intervention unlikely to succeed. The Fed continues to ramp up interest rates while the Bank of Japan zealously has capped rates on JGBs. This included an emergency bond-buying package last week to keep yields on 10-year bonds below 0.25%. The yen has plunged a staggering 22% against the dollar in 2022, and speculators are betting that the yen’s slide will continue. The BoJ meets for a two-day meeting on Thursday and Friday. If the Bank maintains its dovish policy stance and refuses to provide the yen with a lifeline, the currency is likely to fall even further. . USD/JPY Technical USD/JPY faces resistance at 147.50 and 148.59 There is support at 145.23 and 143.14 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The UK Economy Looks Worse Than The Rest Of The G7 Countries

The Great Britain May Become The First Economy To Fall Into Recession

InstaForex Analysis InstaForex Analysis 24.10.2022 13:52
History is written by the winners. After the resignation of Liz Truss, who lasted 45 days as Prime Minister of Britain, investors feel omnipotent. It was the turmoil in the financial markets that forced the head of government to leave. And now they are demanding that she be replaced by a person who is worth trusting. The most likely candidate is Rishi Sunak, and his experience allows us to hope that there will be no new shock. So much the better for GBPUSD. For decades, with low interest rates, governments have been able to afford to accumulate debt without disturbing the financial markets. However, when the Bank of England raises the cost of borrowing, financial stability issues come to the fore. Large-scale fiscal stimulus in such conditions does not work and ends with the resignations of prime ministers. At the same time, the chances of aggressive monetary restriction of the BoE are decreasing. Derivatives give out only an 8% probability of an increase in the repo rate by 100 bps at the November 3 meeting. The chances of borrowing costs rising by 75 bps jumped to 92%. At the same time, Bank of England Deputy Governor Ben Broadbent said that market expectations of a 5% rate ceiling are incorrect. It should be lower. On paper, political uncertainty over the upcoming election of a new prime minister, a slowdown in BoE monetary tightening, and a lower implied ceiling on the repo rate should push GBPUSD down. Moreover, rumors are circulating in the market that whoever becomes the new head of government, the pound will remain under pressure. In particular, CIBC predicts that it will fall to $1.09 by the end of the year. The pressure on the sterling is also indicated by the presence of reversal risks, an indicator that reflects the demand for options to buy and sell the British currency, near the minimum levels for several months. GBP reversal risk dynamics At the same time, recall how quickly the pound flew into the abyss when the new government announced a mini-budget. A lot of negativity was embedded in the GBPUSD quotes, and at the moment this negativity is being recouped. As a result, sterling is strengthening against major world currencies. And the US dollar is no exception. In my opinion, peace of mind costs money. The British currency realized that a repeat of the recent history of chaos in the financial markets should not be expected in the near future, and the price is rising. Another thing is that it does not solve the fundamental problems of the UK economy. High taxes and gas prices are exacerbating the most serious cost-of-living crisis in 10 years. As, however, high inflation and rate hikes by the central bank. The country risks being the first of the world's largest economies to plunge into recession, and this circumstance will surely clip the wings of the pound. Technically, the inability of the GBPUSD bears to win back the 1-2-3 reversal pattern indicates their weakness. The exit from the triangle in the form of a break of resistance at 1.14 is a reason for short-term purchases.     Relevance up to 10:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325104
Analysis Of The USD/CHF Pair Movements

Will The US Dollar To Swiss Franc (USD/CHF) Pair Go Up To 1.0214?

InstaForex Analysis InstaForex Analysis 24.10.2022 13:58
USD/CHF: The chart shows the movement of #USD/CHF on the daily (D1) chart. Quotes are likely to move towards 1.0214, after which it will reverse and go down to 0.9605. This could happen by March 21, 2023. The level of 1.0214 was calculated from the pair's 8-year history of highs, but it is uncertain whether the pair will really head in this direction (there are doubts about the accuracy of the inclined blue line - the key resistance level). All calculations are based on the "theory of fractal extremes", which makes use of previous price movements when determining the next highs of quotes. Good luck!     Relevance up to 10:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325132
Long-Term Yields Soar Amidst Hawkish Fed: Will They Reach 5%?

It Will Be Busy Week, Central Bank's Decisions Ahead (BoC, ECB, BoJ), Softer US yields Could Play In Favour Of Gold And More

Swissquote Bank Swissquote Bank 24.10.2022 14:13
Last week ended on a strong positive footage, on hints that some Federal Reserve (Fed) officials have started talking about pausing the interest rate rises to avoid going too far. BoC, ECB & BoJ to decide Softer Fed expectations pulled US yields lower and sent equities higher.On the earnings front, 70% of the S&P500 companies that reported earnings so far did better than earnings expectations, and big US tech companies and oil giants will be reporting earnings this week. In politics, Boris Johnson announced yesterday evening that he will not be running for the PM role this week. That makes the British ex-Chancellor of Exchequer Rishi Sunak the front runner in the contest. Sterling kicked off the week on a positive note, but bumped into 50-DMA resistance. In central banks, the Bank of Canada (BoC) is expected to raise interest rates by another 50bp when it meets this week, the European Central Bank (ECB) will certainly raise its rates by 75bp, while the Bank of Japan (BoJ) is expected to stay pat. The BoJ intervened again in the currency markets on Friday to pull the USDJPY lower, after the pair flirted with the 152 level last week. The pair eased to 145.50 following the intervention and is back to almost 149 at the time of video. Commodities In commodities, US crude trades around $85per barrel level, and gold is better bid. Softer US yields could play in favour of gold if we really start seeing material easing in Fed expectations. But the latter is data dependent. Due this week, investors will closely watch the US latest GDP update, and the PCE index. Watch the full episode to find out more! 0:00 Intro 1:02 Are Fed officials softening tone? 3:23 China GDP better-than-expected, but well below target 4:44 US Big Tech & Oil Giants due to announce earnings 7:54 UK to choose its new PM 8:57 BoC, ECB & BoJ to decide 11:05 Update on crude oil & gold Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Apple #Amazon #Microsoft #Meta #ExxonMobil #Chevron #earnings #UK #PM #Rishi #Sunak #GBP #USD #JPY #BoJ #ECB #BoC #China #US #GDP #XiJinPing #crudeoil #XAU #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___  Let's stay connected: LinkedIn: https://swq.ch/cH
Technical Outlook Of The EUR/JPY Pair Movement In Short Term

The Outlook For The Euro To Japanese Yen Pair Should Remain Unchanged

TeleTrade Comments TeleTrade Comments 24.10.2022 14:38
EUR/JPY resumes the upside and retests the area beyond 147.00. The recent YTD high at 148.40 (October 21) comes next. EUR/JPY fades Friday’s strong retracement and regains the 147.00 barrier and above at the beginning of the week. Considering the current price action in the cross, the door still looks open to extra upside. That said, the immediate target now emerges at the 2022 high at 148.40 (October 21) prior to the December 2014 top at 149.78 (December 8). In the short term the upside momentum is expected to persist while above the October lows near 141.00. In the longer run, while above the key 200-day SMA at 136.92, the constructive outlook for the cross should remain unchanged. EUR/JPY daily chart  
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

Due To The Weakening Pound (GBP), The GBP/JPY Pair Will Decline

TeleTrade Comments TeleTrade Comments 24.10.2022 14:44
Both the Japanese yen and the British pound have been under a lot of pressure recently. GBP/JPY remains firm around 168.50 and economists at Rabobank believe that the pair could rise above the 170 mark. A key week for GBP and JPY “Although UK fundamentals remain sour, it is possible that the risk of further panic selling of the pound may now be contained. That said, the week ahead will be another crucial one in terms of the outlook for GBP.” “The outlook for the JPY is essentially a mix of two drivers. On one hand the BoJ’s accommodative monetary policy settings are undermining the JPY in an environment in which most other central banks are hiking interest rates. On the other hand, FX intervention from the MoF is designed to make speculators think twice about shorting the JPY.” “We see risk of GBP/JPY moving above the 170.00 level in the short-term, though we expect that these levels could be difficult to sustain, and forecast that GBP/JPY is likely to be lower on a three-month view on the back of a weak pound.”
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

The Price Of The Australian Dollar To US Dollar (AUD/USD) Has No Chance For Growth

InstaForex Analysis InstaForex Analysis 25.10.2022 08:01
The aussie is trying hard to maintain Friday's upward momentum, so yesterday it closed the day above Friday's open and above the nearest green price channel line. The next action, if the price intends to continue rising, should be the exit above the target level of 0.6360. In this case, the 0.6439 target can be reached. If the price fails to keep the upward trend, it will fall to the price channel line to the 0.6250 mark. Breaking the support opens the next target at 0.6195. The Marlin Oscillator in a neutral situation on the zero line. The price is turning up in an obvious way on the four-hour chart: it settled above both indicator lines, the Marlin Oscillator received support after yesterday's decline from the zero line, moves up, and the MACD line itself also turns into growth. There is still interest in risk in the stock market, which is likely to support commodities as well. As a result, the Australian currency may still rise until Thursday, when the European Central Bank will make a decision on monetary policy. Another thing is that the price has no room for growth – the nearest level 0.6360 is too close, and the next level at 0.6439 is obviously too high. The price may choose an intermediate solution - to retest yesterday's high at 0.6412.     Relevance up to 04:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325183
The Pound Is Now Openly Enjoying A Favorable Moment

The Cable Market (GBP/USD) Is Neutral In The Current Situation

InstaForex Analysis InstaForex Analysis 25.10.2022 08:02
Yesterday, the pound completed a task - closed the gap at the opening of the week. At the moment, the price is between the balance and MACD (daily) indicator lines, and the Marlin Oscillator is set to grow. The MACD line has lowered its slope, just as the price is consolidating. In such a situation, the entire range of 330 points between the levels of 1.1170 and 1.1500 is an area of uncertainty for the pound, a range of wide consolidation, although a triangle is visually formed. The uncertainty is likely to be resolved on Thursday when the European Central Bank makes its decision on monetary policy. On a four-hour time scale, the price lingered on the MACD line, the Marlin Oscillator clearly indicates the neutrality of the current situation. We have to wait for which direction the price will choose on Thursday.   Relevance up to 05:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325185
The EUR/USD Pair: There Are Still No Sell Signals

The Development Of The Price Of The EUR/USD Pair Growth

InstaForex Analysis InstaForex Analysis 25.10.2022 08:06
As a result of Monday, the euro did not fall, closing the day above Friday, above the balance and MACD indicator lines, and above the resistance of 0.9864. At the moment, the market is trying to win back the difference in sentiment between the Federal Reserve, which is slowing down the pace of rate hikes, and the European Central Bank, which is raising rates by 0.75% the day after tomorrow. We do not know how the market will de facto react to the ECB rate hike, although formally the mood of the players is clearly optimistic. This optimism in technical terms is expressed in the fact that if the price goes above the upper limit of the price channel and above the resistance of 0.9950, the euro opens a target of 1.0050. But if there is no upward breakthrough, for example, the ECB will raise the rate by only 0.50%, which is already being talked about in the press, or, with a 0.75% rate hike, will copy the Fed's mood and declare that it is not possible to continue to maintain such a pace for the shrinking economy, the price can easily turn into a medium-term decline with the first target at 0.9724. The price settled above the level of 0.9864 on the four-hour chart, above both indicator lines, the Marlin Oscillator is in the positive area. We follow the development of the current price growth. Long positions in the current situation is associated with increased risk.     Relevance up to 05:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325187
At The Close On The New York Stock Exchange Indices Closed Mixed

On The NASDAQ Stock Exchange, 1925 Companies Rose

InstaForex Analysis InstaForex Analysis 25.10.2022 08:08
At the close of the New York Stock Exchange, the Dow Jones rose 1.34% to a one-month high, the S&P 500 was up 1.19% and the NASDAQ Composite was up 0.86%. The Dow Jones index Amgen Inc was the top performer among the components of the Dow Jones index today, up 9.38 points or 3.72% to close at 261.32. Quotes Coca-Cola Co rose by 1.61 points (2.88%), ending trading at 57.57. Home Depot Inc rose 7.73 points or 2.81% to close at 283.26. The least gainers were Nike Inc, which lost 0.49 points or 0.55% to end the session at 88.01. The Walt Disney Company (NYSE:DIS) was up 0.32 points or 0.31% to close at 101.72, while Chevron Corp was down 0.06 points or 0.03% to end the trading at 173.13. The S&P 500 index  Leading gainers among the S&P 500 index components in today's trading were HCA Holdings Inc, which rose 7.02% to hit 210.47, Tractor Supply Company, which gained 5.30% to close at 207.83, and also shares of Regions Financial Corporation, which rose 5.28% to close the session at 20.55. The least gainers were Las Vegas Sands Corp, which shed 10.29% to close at 35.05. Shares of Starbucks Corporation shed 5.47% to end the session at 83.76. Quotes of Wynn Resorts Limited decreased in price by 3.86% to 56.53. The NASDAQ  Leading gainers among the components of the NASDAQ Composite in today's trading were Applied Genetic, which rose 62.43% to hit 0.39, Vaxcyte Inc (NASDAQ:PCVX), which gained 60.35% to close at 33. 00, as well as shares of Mullen Automotive Inc, which rose 32.94% to close the session at 0.50. The least gainers were Tricida Inc, which shed 94.48% to close at 0.60. Shares of Alfi Inc lost 54.32% and ended the session at 0.11. Quotes of Huadi International Group Co Ltd decreased in price by 43.99% to 33.00. The numbers On the New York Stock Exchange, the number of securities that rose in price (1,751) exceeded the number of those that closed in the red (1,344), while quotes of 124 shares remained virtually unchanged. On the NASDAQ stock exchange, 1925 companies rose in price, 1828 fell, and 253 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.54% to 29.85. Gold Gold futures for December delivery lost 0.15%, or 2.55, to hit $1.00 a troy ounce. In other commodities, WTI crude futures for December delivery fell 0.26%, or 0.22, to $84.83 a barrel. Futures for Brent crude for January delivery rose 0.13%, or 0.12, to $91.46 a barrel. FX Market Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.14% to 0.99, while USD/JPY edged up 0.98% to hit 149.09. Futures on the USD index fell 0.04% to 111.93.     Relevance up to 05:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/298126
The Price Of EUR/USD Pair Will Develop Sideways Movement

The Euro To US Dollar (EUR/USD) Pair Has Potential For Growth

InstaForex Analysis InstaForex Analysis 25.10.2022 08:16
Technical outlook: EURUSD pushed higher through 0.9900 intraday on Monday before easing off a bit. The single currency pair is seen to be trading close to the 0.9880 level at this point in writing as the bears might be preparing to drag towards 0.9780, near-term support. On the flip side, if the bulls are successful in pushing the price above 0.9900, they would try and test 0.9999 soon. EURUSD might be into its final leg higher since the beginning to rally from the 0.9535 lows earlier. Potential upside targets are 1.0200 and 1.0300 as projected on the daily chart here. The probability remains high for a pullback towards 0.9780 from here before turning higher again. Immediate support is seen at 0.9700-10, followed by 0.9635 and 0.9535 levels respectively. EURUSD is facing resistance at 1.0200 and a push higher would expose the next one, which is seen around 1.0350 respectively. Once the above counter-trend rally terminates, prices are expected to turn lower towards the larger-degree downtrend. Only a break below 0.9635 from here will bring back the bears into control again. Trading idea: Potential rally through 1.0200 against 0.9535 Good luck!     Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298134
The Euro May Attempt To Resume An Upward Movement

It Is Very Hard To Expect Strong Growth Of The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 25.10.2022 08:20
EUR/USD 5M The euro/dollar pair managed to trade in different directions on Monday. There was a formal reason for such movements, since weak business activity indices in the services and manufacturing sectors were published in the European Union in the morning, and similar US ones in the afternoon. However, we recall that in the past few days, both major pairs have been trading very inadequately and it is difficult to predict. Very often we see intraday reversals, corrections, pullbacks. Naturally, when a pair changes direction ten times a day, it becomes very difficult to trade. The euro continues to rise. We can see that the market still does not understand why it should buy the euro? There will be a European Central Bank meeting this week at which the rate will be raised by 0.75% with a probability of almost 100%. But the Federal Reserve will also raise its rates in early November. And the Fed rate is still much higher than the ECB rate. Therefore, we do not expect the euro to sharply rise, but the "swing" seems to have already begun. In principle, the nature of the pair's movement on Monday is perfectly visible on the 5-minute timeframe. All trading signals formed around one level 0.9844, and there were as many as eight of them. This, at least, indicates that the price spent a lot of time around the level of 0.9844, isn't this a sign of a flat? Quotes still went up a bit during the US session (immediately after the release of data on business activity), but then the same flat began. Thus, traders could only try to work out the first two signals. In both cases, the price failed to move even 15 points in the right direction, so both positions closed with a small loss. Once again, we urge everyone to be very careful in the near future. COT report: The euro Commitment of Traders (COT) reports for 2022 could be used as good examples. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again and the euro is still dropping. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long non-commercial positions increased by 6,500, while the number of shorts decreased by 4,000. Accordingly, the net position increased by about 10,500. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 48,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. If you look at the total open longs and shorts for all categories of traders, then shorts are 22,000 more (586,000 vs 564,000). Thus, according to this indicator, everything is logical. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 25. Boring Monday without bright splashes at the US session. Overview of the GBP/USD pair. October 25. Elections, elections... Forecast and trading signals for GBP/USD on October 25. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H You can see on the hourly timeframe that the pair has begun to form a new upward trend, but the movement is more like a "swing". Recall that such problems usually do not exist during periods of a decline, since it moves down with much more willingness than up. Therefore, we still believe that it is very difficult to expect the pair to show strong growth. It may continue for some time, but the dollar still looks preferable. On Tuesday, trading could be performed at the following levels: 0.9553, 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9754) and Kijun-sen lines (0.9800). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also additional support and resistance levels, but trading signals are not formed near them. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events or reports are scheduled in the European Union and America. Thus, we will likely see a flat or "swing" today. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 06:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325195
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The GBP/USD Pair Traders Will Have Nothing To Pay Attention To This Week

InstaForex Analysis InstaForex Analysis 25.10.2022 08:24
GBP/USD 5M The GBP/USD currency pair was also being difficult on Monday. Moreover, if the euro/dollar pair rose slightly in the afternoon on the basis of weak macroeconomic statistics from overseas, the pound/dollar grew without it, which once again proves the fact that both pairs are now traded inadequately. Do not be frightened by the word "inadequate", we just want to say that at this time the movements are such that they are more difficult to win back than at normal times. Remember when the pound was trading 200 points a day, how nice it was to open any positions! But those days are gone. Now both pairs are likely to consolidate, and traders are developing new trading tactics. Both the euro and the pound are now in a position where further decline is no longer obvious, and there is no reason to buy. In the meantime, this morning it became known that Rishi Sunak will become the new prime minister even without any elections. Penny Mordaunt withdrew her candidacy from the election, so Sunak was the only candidate and automatically won. Let's see what this man can do as prime minister. There were fewer trading signals for the pound on Monday than for the euro, which is even good. However, the first two trading signals near the level of 1.1354 also turned out to be false and did not even allow traders to set Stop Loss on open positions. Both closed at a loss. The third signal should not have been worked out, since the first two turned out to be false. Once again, we remind you that this week's movements can be as "torn" and complex as possible, which should be taken into account when entering the market. The nature of the movement of the pair is best seen on the 4-hour TF - a flat. COT report: The latest Commitment of Traders (COT) report on the British pound showed a new growth in bearish sentiment. In the given period, the non-commercial group closed 8,600 long positions and opened 3,400 short positions. Thus, the net position of non-commercial traders fell by 12,900, which is quite a lot for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 40,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? As for the total number of open longs and shorts, here the bulls have an advantage of 25,000. But, as we can see, this indicator does not help the pound too much either. We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 25. Boring Monday without bright splashes at the US session. Overview of the GBP/USD pair. October 25. Elections, elections... Forecast and trading signals for EUR/USD on October 25. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair is trading very inadequately on the hourly timeframe. The price often changes the direction of movement and travels impressive distances in each of them. The lines of the Ichimoku indicator are also ignored, which speaks of the same "swing". On Tuesday, trading could be performed at the following levels: 1.0930, 1.1060, 1.1212, 1.1354, 1.1486, 1.1649. The Senkou Span B (1.1179) and Kijun-sen (1.1231) lines can also be sources of signals. Signals can be bounces and breakouts of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. There are no major events or reports scheduled for today in the UK and US. Thus, it is even more likely that we will see a new "swing". There are practically no important macroeconomic events left for the pound and the dollar this week, so until the end of the week, traders will have practically nothing to pay attention to. The probability of a flat is also growing. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.         Relevance up to 06:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325197
Tokyo Raises Concerns Over Yen's Depreciation, Considers Intervention

The US Dollar (USD) Index May Have Created A Potential Resistance

InstaForex Analysis InstaForex Analysis 25.10.2022 08:37
Technical outlook: The US dollar index might have carved a potential resistance around 113.67 last week as prices reversed sharply lower towards 111.14 thereafter. The index is seen to be trading close to 111.75 at this point as traders prepare to pull back towards the 112.30-50 area before pushing the price lower again. Ideally, prices would stay below 113.67 going forward. The US dollar index could be into its last leg lower towards 107.00 to complete its larger-degree corrective drop, which had begun from the 114.67 mark earlier. If the above-proposed structure holds well, prices would stay below 113.67 and continue dragging lower towards 107.00 in the next several trading sessions. Near-term resistance is seen through the 112.30-50 zone, which might be tested before turning lower again. The index is facing immediate resistance at 113.67, followed by 114.67 while interim support is close to 110.00, followed by 109.00 and lower respectively. A break below 110.00 will accelerate prices quickly towards 109.00 and 107.00 levels going forward. On the flip side though, a break above 113.67 will bring back the bulls into control. Trading idea: Potential drop through 107.00 against 115.00 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298142
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

The Upward Movement Of US Treasuries Was Halted | Allegations Of Systematic Maltreatment Of Patients Against Orpea

Saxo Bank Saxo Bank 25.10.2022 08:46
Summary:  Equity markets managed a comeback from an intraday sell-off yesterday as treasury yields eased back lower after briefly threatening to challenge the cycle highs. Today is the first day of the blitz of earnings releases this week and will include Microsoft and Google-parent Alphabet reporting after the close of trading today. In Asia, even while the US dollar treads water, the Chinese yuan slipped to a new cycle low versus the greenback after a weak official fixing.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities are continuing to climb ahead of key earnings tonight with S&P 500 futures trading around the 3,811 level this morning and potentially could reach for the 50-day moving average around the 3,876 level if we get better than expected Q3 earnings over the coming days. Euro STOXX 50 (EU50.I) Momentum is extending this morning with STOXX 50 futures trading around the 3,542 level with yesterday’s high at the 3,551 level being the key resistance level on the upside. The key drivers are lower energy prices caused by recently very mild weather in Europe. If flows into EUR continues, European Q3 earnings surprises, and energy prices remain in easing stance then the 3,600 level could be the next big level to be tested. FX: USD treads water, CNH continues broad plunge The continued local softness in US yields and resilient risk sentiment here have kept the US dollar trading sideways and kept USDJPY out of the headlines. But USDCNH extended sharply higher after a surprising weak fix for the onshore CNY last night, and USDCNH spiked all the way to 7.368 before the move was cut about in half by later in the session. China is clearly happy to allow the CNH to weaken broadly, with EURCNH, for example, rallying hard since earlier this month and trading near the range high of the last year close to 7.30. Crude oil (CLZ2 & LCOZ2) Crude oil has settled into a relatively tight range, in Brent between $90 and $95 per barrel, while the market assesses the overall impact on demand from the global economic slowdown against a tight supply situation, especially in the distillate market, which is likely to worsen once OPEC producers in the Middle East reduce production of high yielding middle distillate crude oil from next month. In addition, EU sanctions against Russia starting in December is already having an impact on supplies reaching the region. Overall, the oil market judging from the bullish curve structure remains tight and may tighten even further during the coming months. Focus this week on earnings from Exxon, Shell and their Big Oil peers. US treasuries (TLT, IEF) US treasury yields threatened back higher toward the cycle highs yesterday, but the move was tamed as treasuries found support. The 10-year yield has been almost unchanged on a daily close basis for the last three days running (near 4.22%). The circulation of an article from “Fed whisperer” Nick Timiraos suggesting that the Fed will consider slowing the pace of hikes after the November 2 FOMC meeting saw no follow-on drop in short yields. The treasury will auction 2-year t-notes today, 5-year notes tomorrow and 7-year notes on Thursday. What is going on? EU gas (TTFMX2) traded below €100/MWh on Monday for the first time since June with the “Next hour” contract briefly trading negative following a warm start to the heating season, a development that looks set to continue in the next couple of weeks, thereby leaving storage sites near full. While a great deal of weather-related volatility, and potentially even lower prices, can be expected at the front of the curve, it is important to watch TTFMG3, the peak winter demand contract for February, which remains anchored above €140/MWh. However, the longer the warm spell continues, and LNG arrivals remain strong the worry about next winter will fade, thereby providing a much-needed boost to industries trying to navigate through the current crisis. EU energy ministers meet today to discuss the emergency actions proposed by the Commision last week. Ugly flash Eurozone PMI for October There is nothing new here. As expected, activity weakened more quickly in October. The eurozone October business activity is down at 47.1 versus prior 48.1 and expected at 47.6. It looks increasingly clear that the Eurozone economy is set to contract in the fourth quarter. The factors driving the contraction in activity are well-known: fears of a recession, widespread and higher inflation (especially in the services sector), worries about high inventories, weaker than expected sales etc. We all know the next step: companies will start to cut costs, reduce their employment expectations for 2023 and ultimately cut their labor force. All of this even before we enter winter. This is a high-risk period for the Eurozone due to the energy crisis and potential energy disruptions in some countries. DSV lifts outlook Europe’s largest logistics company is raising its EBIT outlook this morning as Q3 results are better than estimated with revenue at DKK 60.6bn vs est. DKK 56.3bn and adjusted net income of DKK 4.8bn vs est. DKK 4.7bn. The company also says that it expects a gradual decline in profitability as logistics prices are coming down from their high prices reached during pandemic bottlenecks in the global supply chain. SAP beats on revenue in Q3 Europe’s largest software company reports Q3 revenue of €7.8bn vs €7.6bn driven by strong performance in its cloud business. HSBC Q3 results beat estimates The bank reports this morning Q3 adjusted revenue of $14.3bn vs est. $13.5bn and adjusted pre-tax profits of $6.5bn vs est. $6.1bn. The bank is also lifting its outlook and announcing the replacement of its CFO. What are we watching next? Orpea could get a bailout by the French government The French retirement home group Orpea is facing a rough time since allegations of systematic mistreatment and patient abuse were discovered earlier this year. Yesterday, the stock was suspended by the French regulator AMF on rumors that the French government could step in to save the company. The stock is down 80 % year-to-date. Orpea is facing a mountain of debt (around €9.5bn). The group operates nearly 1,200 homes worldwide, with around 350 of them in France. It used to be one of the best performing stocks in the French stock market. Rishi Sunak set to become next UK Prime Minister, October 31 budget statement on tap Sunak is said to be keeping Jeremy Hunt on as Chancellor and is expected to proceed with prudence in keeping the UK’s fiscal deficits on a more sustainable path, with the austerity likely to mean a harder landing for the UK economy and the Bank of England possibly unwilling to hike interest rates as much as the market expects (or forced to do so because inflation remains stubborn and the currency weak). EURGBP jumped back higher toward 0.8750 yesterday after selling off on the news that Boris Johnson would not run for the leadership. Earnings to watch Today’s US earnings focus is on Microsoft, Alphabet, Visa, UPS, General Electric, Halliburton, and Enphase Energy. Microsoft’s business model is robust due to its large market share and dependency for its software, but the company is facing rising input costs on wages and energy cost for running its datacenters. Alphabet could post Q3 weakness as Snap’s Q3 results last week showed advertising weakness. UPS earnings are important for insights into the global economic slowdown. Today: First Quantum Minerals, Canadian National Railway, DSV, UPM-Kymmene, SAP, HSBC, ASM International, Norsk Hydro, Novartis, UBS, Kuhne + Nagel, Microsoft, Alphabet, Visa, Coca-Cola, Texas Instruments, UPS, Raytheon Technologies, General Electric, 3M, General Motors, Valero Energy, Biogen, Enphase Energy, Halliburton, Spotify Technology Wednesday: Dassault Systemes, Mercedes-Benz, BASF, Deutsche Bank, PingAn Insurance, CGN Power, UniCredit, Canon, Barclays, Standard Chartered, Heineken, Aker BP, Iberdrola, Banco Santander, SEB, Meta Platforms, Thermo Fisher Scientific, Bristol-Myers Squibb, ADP, Boeing, ServiceNow, Ford Motor, Twitter Thursday: ANZ, Anheuser-Busch InBev, Argenx, Shopify, Teck Resources, Neste, Kone, TotalEnergies, EDF, STMicroelectronics, PetroChina, China Life Insurance, CNOOC, Oriental Land, Shin-Etsu Chemical, Takeda Pharmaceuticals, Hoya, FANUC, Shell, Lloyds Banking Group, Universal Music Group, Repsol, Ferrovial, Hexagon, Evolution, Credit Suisse, Apple, Amazon, Mastercard, Merck & Co, McDonald’s, Linde, Intel, Honeywell, Caterpillar, Gilead Sciences, Pioneer Natural Resources Friday: Macquarie Group, OMV, ICBC, China Merchants Bank, LONGi Green Energy Technology, Midea Group, Imperial Oil, Danske Bank, Sanofi, Airbus, Volkswagen, China Construction Bank, Agricultural Bank of China, Bank of China, BYD, China Shenhua Energy, Eni, Keyence, Hitachi, Denso, Equinor, CaixaBank, Wilmar International, Swiss Re, Exxon Mobil, Chevron, AbbVie, NextEra Energy, Colgate-Palmolive, Royal Caribbean Cruises Economic calendar highlights for today (times GMT) 0800 – Germany Oct. IFO Business Climate survey 0855 – UK Bank of England Chief Economist Huw Pill to speak 1200 – Hungary Central Bank Decision 1300 – US Aug. S&P CoreLogic Home Price Index 1400 – US Oct. Consumer Confidence 1400 – US Oct. Richmond Fed Manufacturing Index 1700 – US Treasury to auction 2-year notes 1755 – US Fed’s Waller (Voter) to speak 2030 – API Weekly Oil and Fuel Stocks Report 0000 – New Zealand Oct. ANZ Business Confidence 0030 – Australia Q3 and Sep. CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher     Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-25-2022-25102022
Saxo Bank Podcast: The Bank Of Japan Meeting And More

The Tokyo Government Is Continuously Intervening In Forex Markets

TeleTrade Comments TeleTrade Comments 25.10.2022 09:04
USD/JPY is continuously auctioning below 149.00 as investors await more clarity on BOJ’s intervention. S&P500 futures have recovered their morning losses which indicates that the risk-on impulse could rebound. Japanese importers have been hit hard by the sliding yen to the lowest levels in 32 years. The USD/JPY pair is displaying a lackluster performance below the critical hurdle of 149.00 in the Tokyo session. The asset has turned sideways following back-and-forth cues from the US dollar index (DXY). The juggling of the DXY below 112.00 indicates that the market mood is extremely quiet. S&P500 futures have recovered their marginal losses recorded in early Tokyo. Also, the 10-year US Treasury yields have extended their losses to near 2.21%, which could bring a rebound in the risk-on impulse ahead. Knee-jerk reactions in an asset usually turn the asset into a sideways trend. The Bank of Japan (BOJ)’s stealth intervention in the currency markets against disorderly FX moves to safeguard the weakening yen has kept investors on the sidelines. The weakening of the domestic currency due to speculative moves has harmed the spirits of Japanese investors. BOJ Governor Haruhiko Kuroda, a Japanese government official said that “the recent sharp, one-sided yen weakness is not good for the economy.” Japanese officials are paying ‘full attention’ to market volatility. The Tokyo government is continuously intervening in currency markets after yen recorded its lowest levels in 32 years. The impact of the deteriorating yen is impacting the importers badly. From the purchase of oil to foodstuffs, Japan has a constant demand for dollars, that is sensitive to yield differentials, expectations from monetary policy, and technical levels reported Bloomberg. On the US front, investors’ focus has shifted to the US Gross Domestic Product (GDP) data, which will release on Thursday. . The annualized GDP is expected to improve significantly to 2.4% vs. a decline of 0.6% reported earlier.
Analysis Of Situation Of The US Dollar To Swiss Franc Pair (USD/CHF)

Solid Data Can Support The Bulls Of The Swiss Franc (CHF)

TeleTrade Comments TeleTrade Comments 25.10.2022 09:08
USD/CHF has confidently reclaimed the psychological resistance of 1.0000 despite an upbeat market mood. The DXY is trading lackluster amid the unavailability of a potential trigger. Fed’s extreme tightening measures have opened doors for recession risk. The USD/CHF pair has extended its recovery above 1.0004 in the Tokyo session after a rebound from 0.9980. The asset has picked bids despite a subdued performance by the US dollar index (DXY). The mighty DXY is displaying an intraday inventory adjustment phase, which could deliver an explosion of the volatility contraction in the European session. The risk-on profile is getting back into the picture as S&P500 futures have extended their gains after recovering their morning losses. Meanwhile, the returns on US government bonds have slipped further as investors’ risk appetite is improving. 10-year US Treasury yields have dropped marginally below 4.21%. The investing community is shifting its focus toward the US Gross Domestic Product (GDP) data, which is due on Thursday. As per the projections, the US growth rate is seen higher at 2.4% vs. a decline of 0.6% reported earlier. An occurrence of the same could delight the Fed as the labor market is losing its charm and inflationary pressures are not providing solid evidence of a slowdown in the pace of the inflation rate. As accelerating interest rates have forced institutions to trim their economic projections for the US economy, eventually, fears of recession risk have escalated. US Treasury Chief Janet Yellen cited “Cannot rule out risk” of a recession, reported MSNBC news. On the Swiss Franc front, investors are awaiting the release of the ZEW Survey-Expectations data. The economy catalyst is seen lower at -43.8 vs. the prior release of -69.2. An improvement in business and employment conditions could support the Swiss franc bulls ahead.
GBP: Monitoring Data Outliers Amid Hawkish BoE Expectations

The New Zealand Dollar To US Dollar (NZD/USD) Pair Has Potential For Future Growth

TeleTrade Comments TeleTrade Comments 25.10.2022 09:18
NZD/USD is now seen navigating the 0.5590-0.5810 band in the next weeks, suggest UOB Group’s Markets Strategist Quek Ser Leang and Economist Lee Sue Ann. Key Quotes 24-hour view: “The current movement is NZD appears to be part of a consolidation. For today, we expect NZD to trade between 0.5645 and 0.5750.” Next 1-3 weeks: “Yesterday, NZD rose to a high of 0.5675 before pulling back sharply. The price actions appear to be part of a consolidation phase and we expect NZD to trade between 0.5590 and 0.5800 for the time being. Looking ahead, NZD has to break clearly above 0.5810 before a sustained advance is likely.”
Tight Monetary Policy Is Already Weighing On The Swedish Housing Market

Difficulty In Assessing Risk | The Swedish Krona (SEK) Will Not Be Able To Increase

TeleTrade Comments TeleTrade Comments 25.10.2022 09:33
The Swedish krona is struggling to record gains. In the opinion of economists at Commerzbank, SEK will continue to struggle The great unknown – the weather this winter “Many negative factors have already been priced into SEK, but as long as it is unclear how the eurozone and its economy will get through the winter it will be difficult to price the risk of ‘a deep recession in the eurozone with the resulting effects on the Swedish economy’ out of SEK. In particular, as rate hikes will also affect the economy, in particular the housing market.” “I fear that SEK will be unable to record significant gains over the winter half.”
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The US Dollar To Canadian Dollar Pair (USD/CAD) Has A Potential For Further Rally

InstaForex Analysis InstaForex Analysis 25.10.2022 09:38
Technical analysis: USD/CAD has been trading sideways at the price of 1.3710 but I see potential for further bullish continuation. Trading recommendation: Due to the strong upside cycle in the background I see potential for the further upside continuation. Watch for the potential buying opportunities with the upside objective at 1.3855, 1.3980 and 1.4200. Stochastic oscillator is showing fresh upside cross, which is sign that there is potential for further rally. Key support is set at the price of 1.3600   Relevance up to 09:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298169
The Drop In German Inflation Is Welcome News, But It Is Mean That Can We Say That Inflation Has Peaked?

Germany’s Economy Minister Robert Habeck Statement About Natural Gas

TeleTrade Comments TeleTrade Comments 25.10.2022 09:49
Germany’s Economy Minister Robert Habeck said on Tuesday that they “expect the gas price mechanism decision at the next EU Council.” “Joint EU purchases are the best way to keep the gas price low,” Habeck added. Market reaction EUR/USD was last seen trading at 0.9864, daily lows, down 0.09% on the day.
Chinese Industrial Production And Retail Sales Have Dropped

The US Dollar To Chinese Yuan (USD/CNH) Pair Is Likely To Rise

TeleTrade Comments TeleTrade Comments 25.10.2022 11:36
Extra gains in USD/CNH now target the 7.3500 barrier prior to 7.4000, comment UOB Group’s Markets Strategist Quek Ser Leang and Economist Lee Sue Ann. Key Quotes 24-hour view: “USD surged to a fresh record high of 7.3322 before closing higher by a whopping 1.37% (7.3257). Solid upward momentum is likely to lead to further advance. A break of 7.3500 would not be surprising but in view of the deeply overbought conditions, 7.4000 is unlikely to come into view for today. Support is at 7.3000 followed by 7.2800.” Next 1-3 weeks: “Yesterday, USD cracked the major resistance at 7.3000 and jumped to a fresh record high of 7.3322. The USD strength that started about 2 weeks ago is deep in overbought territory but the rally is not showing any sign of weakness just yet. In other words, the overbought rally will most likely continue. The next resistance level of note is at 7.3500, followed by 7.4000. On the downside, a break of 7.2600 (‘strong support’ level) would indicate that the USD strength has ended.”
The cost of green steel production compared to conventional steel

The US Dollar To Thai Baht (USD/THB) Rate Will Indicate A Side Move

TeleTrade Comments TeleTrade Comments 25.10.2022 11:50
Markets Strategist Quek Ser Leang at UOB Group’s Global Economics & Markets Research suggests USD/THB is expected to trade within the 37.90-38.46 range in the short-term horizon. Key Quotes “We highlighted last Monday that ‘There is room for USD/THB to test Sep‘s high of 38.46 before the risk of a pullback increases’. While USD/THB rose to a high of 38.46 last Thursday, the pullback from the high has been relatively limited.” “The price movement appears to be part of a consolidation phase. For this week, USD/THB is likely to trade sideways, expected to be between 37.90 and 38.4. Looking ahead, if USD/THB breaks above 38.46, the focus will shift to 38.55.”
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

Political Events In UK Have Positive Effect On The British Pound (GBP)

InstaForex Analysis InstaForex Analysis 25.10.2022 12:09
The pound has been evaluating political news in a positive light since the morning. How will the mood of traders of the British currency develop in the near future and is it worth counting on the growth of the exchange rate in the future? Political twists  Today, investors are assessing the news about the appearance of a new British prime minister. Rishi Sunak was elected head of the ruling Conservative Party of Great Britain, and will also take the post of prime minister of the country. England has surpassed itself in political twists and turns. Sunak will be Britain's third prime minister this year. In July, Boris Johnson announced his intention to resign. Liz Truss, who was elected in his place, was able to stay in the prime minister's chair for 44 days and also resigned due to an avalanche of criticism against her. Many see the new prime minister as a source of stability. Perhaps there really is some truth in this, when compared with the chaotic rule of the Truss, during which serious volatility was observed in the markets. Time will tell what kind of ruler Rishi Sunak will be, but for now market players are breathing a sigh of relief and are in a cautiously positive frame of mind. GBP/USD Today, the GBP/USD pair rose to 1.1293 from the previous closing level of 1.1275. As expected, the pound may continue to rise in the short term, but it risks failing during the week. Economic data is ahead, and they are likely to show an even greater divergence from the US economy for the worse.  Britain's economic prospects While the market has welcomed the recent developments surrounding the election of a new prime minister, they alone can do little to improve Britain's economic prospects. The GBP/USD pair may continue to rise, but estimates regarding the extent of the rate hike are already declining. If the 1.1500-1.1700 range becomes a reality in the very near future, this does not mean that the quote will fly further and higher. Such a scenario is more like a decent short entry point. The target range for the end of the year is still 1.0800-1.1200. Britain released a disappointing PMI on Monday. Indices of activity in the manufacturing sector and the service sector collapsed, falling below market expectations. The composite index in October was 47.2, which is two points lower than in September. Its value has become the lowest in the last two years. In addition, the business activity indicator has been below 50 points for three consecutive months. The reason for the sharp decline in the index in October is called political instability in the country, which caused turmoil in the financial markets. The current situation  Anyway, the current situation points to the recession that has formed in the country. A reduction in economic growth may occur as early as the third quarter, and in the fourth negative trends will only intensify. The Fed's hawkish attitude The prospects of the pound, among other things, depend on the positioning of the US dollar and its further strength. Will the decline in the dollar index last until the end of the week? Much will depend on how traders react to the upcoming economic reports in connection with the forecast of the Federal Reserve's policy. The focus is on the GDP report for the third quarter and the employment cost index for the same period. Data on wages and inflation will strengthen the hawkish attitude of the Fed. One of the most significant risks for the pound this week will be the US GDP report. It can show that America is emerging from a technical recession, while the UK is entering an active phase of recession. Divergence in economic prospects will undermine the pound's recovery. A serious obstacle is the core PCE price index's release this Friday, the Fed's preferred inflation indicator. The inflation rate is expected to increase from 4.9% year-on-year to 5.2%. If so, it will be more than enough to guarantee the Fed's hawkish attitude, which has helped the dollar reach new heights against many currencies in the weeks since the bank set course to raise the benchmark interest rate to 4.5% by the end of the year and 4.75% at the beginning of the next. In general, the dollar index is forecast to rise to 114.00 this week.     Relevance up to 10:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/325237
Ed Moya Reviews The Latest Market News With Jonny Hart (OANDA Podcast)

Podcast: John J. Hardy Comments The FX Market, Ole Hansen Reviews The Commodities And More

Saxo Bank Saxo Bank 25.10.2022 12:24
Summary:  Today we round out our view on the growing Chinese equity market discount as the market takes a dim view of prospects for returns there, given the policy focus on "common prosperity", not to mention geopolitical concerns. The weakening yuan is also a key focus in Asia. Elsewhere, today we have the earnings season getting into full swing today with Microsoft, Alphabet and many others reporting. Crude oil platinum, FX and more also on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-25-oct-2022-25102022
EUR/USD Rangebound Ahead of Data Releases and Rate Expectations

The Hungarian Forint (HUF) Remains Sensitive To Global Risk Aversion

TeleTrade Comments TeleTrade Comments 25.10.2022 12:30
The Hungarian central bank meeting is on the agenda today while EUR/HUF has stabilised at 412.00. Economists at ING expect the EUR/HUG to move back to a 405-410 range. The forint should remain supported “Although the National Bank of Hungary does not need to hike rates again at the moment, we expect the central bank to confirm its readiness to act if the forint decides to weaken again.” “Considering that HUF remains sensitive to global risk aversion, we cannot rule out some periodic correction. For the time being, however, the forint should remain supported and enjoy this moment of peace created by recent central bank actions and global conditions.” “We expect the forint to return to the 405-410 EUR/HUF range.”
Hang Seng Index Plummets -2% Amid Weak China Data, Short-Term Trend Intact

The Euro To British Pound (EUR/GBP) Pair Is Likely To Meander Slowly Up

TeleTrade Comments TeleTrade Comments 25.10.2022 12:49
EUR/GBP has settled above 0.87. Kit Juckes, Chief Global FX Strategist at Société Générale, believes that the pair could advance nicely towards the 0.90 level.  Sterling unlikely to enjoy much more of a relief bounce “EUR/GBP has reversed the spike which we saw in late September but remains well above the post-Brexit average, and GBP/USD is even further above average than EUR/GBP. Both measures of volatility should fall further, as the pound settles down.”  “But with the economy surely already in recession and set to suffer from possibly even tighter fiscal policy, sterling is unlikely to enjoy much more of a relief bounce and over time, EUR/GBP is likely to meander slowly up to 0.90 or so.”
Caixin Services PMI Data Has Helped The Chinese Yuan (CNH)

Japan's Finance Ministry Is Trying To Encourage Speculators To Bet Against The Japanese Yen (JPY)

Kenny Fisher Kenny Fisher 25.10.2022 13:27
The Japanese yen is almost unchanged today, after being whipsawed over the past two sessions. In the European session, USD/JPY is trading at 1.48.93, down 0.06%. It’s been a roller-coaster ride for the yen, as USD/JPY rose 1.7% on Friday and declined by 0.9% on Monday. It’s clear that the driver behind this volatility has been intervention by Japan’s Ministry of Finance (MOF), although officials in Tokyo are keeping mum. The MOF intervened in late September, at a cost of around 2.8 trillion yen ($19.8 billion). Friday’s intervention was about double the size, and Monday was likely about the same. This means that the MOF is delivering a more powerful punch to deter speculators from betting against the yen. The interventions may have slowed the yen’s descent but it’s doubtful the moves will reverse the downward trend. Japan’s current policy mix is contradictory and likely unsustainable – the MOF is intervening in the currency markets while the Bank of Japan has intervened in the fixed-income markets and capped yields on Japanese government bonds. Markets eye BoJ meeting With the Federal Reserve widely expected to deliver another 0.75% rate next week, the US/Japan rate differential continues to widen, which will weigh on the yen. The MOF’s intervention and the subsequent volatility have heightened the interest in the BoJ’s meeting on Wednesday and Thursday, which some are calling a ‘do or die’ moment for the Japanese yen. If the BoJ continues its dovish policy and doesn’t provide the yen a lifeline, the yen is likely to fall even further. Japan’s core inflation rose to 3.0% in September, its highest level in eight years. This follows the 2.8% gain in August and matched the consensus, and the yen’s reaction has been muted today. . USD/JPY Technical USD/JPY faces resistance at 147.50 and 148.59 There is support at 145.23 and 143.14 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Inflation slowdown may let Reserve Bank of Australia go for 50bp or inaction

A Brutal Start To The Week For The Australian Dollar (AUD)

Kenny Fisher Kenny Fisher 25.10.2022 14:30
AUD/USD has steadied today after two days of sharp swings. In the European session, the Australian dollar is trading at 0.6317, up 0.09%. It was a brutal start to the week for the Australian dollar, which sank 1.1 per cent on Monday. The manufacturing and services PMIs both slowed in October, pointing to weaker economic activity. Manufacturing expanded but softened, as the Manufacturing PMI slowed to 52.8, down from 53.5. The Services PMI declined to 49.0, down from 50.6 points and its lowest level since September 2021. The decline in business activity is attributable to the continuing rise in interest rates and economic uncertainties. Australia’s labour market remains strong, but the steady diet of rate increases has slowed economic activity. Australia’s CPI expected to climb Australia releases CPI for Q3 on Thursday. The markets are bracing for an uptick in inflation. Headline CPI is expected to rise to 7.0%, up from 6.1% in Q2. Core inflation is projected to rise to 5.6%, up from 4.9%. The RBA says inflation will peak in Q4 2022 at 7.5% but will not fall back to the RBA’s 2% target until 2024. Tomorrow’s inflation report is the last key event before the RBA meets next week, which gives the inflation data added significance and could have a strong impact on the Australian dollar. The RBA surprised the markets with a 0.25% hike earlier this month, which was smaller than expected. The RBA appears to have completed its front-loading, which saw the central bank deliver four straight increases of 0.50%. The markets are expecting another 0.25% hike at the meeting next week, with the RBA hopeful that inflation will start to ease shortly without the need for oversize rate hikes, which would make a recession more likely. . AUD/USD Technical AUD/USD continues to test support at 0.6250. The next support level is 0.6121 There is resistance at 0.6331 and 0.6460 . This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The USD/JPY Price Seems To Be Optimistic

The USD/JPY Pair Could Continue To Rise Until It Meets Resistance Around 160.0

Saxo Bank Saxo Bank 25.10.2022 14:40
Despite being hit by heavy selling USDJPY stays the course and could move higher towards 160. 145 support could be key  USDJPY spiked to 151.94, which is the 2.0 projection (200%) of the volatile market 22nd September, before hit by heavy selling. Possible instigated by the Japanese Central Bank, sending the pair down below 146, spiking below the peak from then last time USDJPY got hit by heavy selling resulting in extreme volatility. Strong rebound followed and USDJPY is crawling back higher.RSI is still bullish without divergence suggesting we could see higher levels on USDJPY.However, the spike low at 145.29 should be observed. If USDJPY breaks below it could drop to around 140 Monthly chart shows how the 5th extended in USDJPY has almost reached the 2.0 projection of the 4th corrective vawe which is 152.90. If USDJPY reaches 157 it is the same distance as the 3rd vawe. However, no strong resistance until around 160. RSI is at extreme level above 82 with no divergence indicating higher levels. The uptrend is very stretched however, and more volatility should be expected, both due to Central Bank intervention and profit taking.     Source: https://www.home.saxo/content/articles/forex/ta-volatile-usdjpy-resume-uptrend-after-heavy-selling-25102022
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

The Major Indices On The New York Stock Exchange Rose

InstaForex Analysis InstaForex Analysis 26.10.2022 08:02
At the close of the New York Stock Exchange, the Dow Jones rose 1.07% to hit a monthly high, the S&P 500 rose 1.63% and the NASDAQ Composite rose 2.25%. The Dow Jones index  The top performer among the components of the Dow Jones index today was Nike Inc, which gained 3.71 points (4.22%) to close at 91.72. Quotes of American Express Company rose by 5.39 points (3.81%), closing the session at 147.02. Boeing Co rose 4.60 points or 3.24% to close at 146.65. The biggest losers were The Travelers Companies Inc, which shed 3.70 points or 2.06% to end the session at 176.09. Amgen Inc was up 1.33 points (0.51%) to close at 259.99, while UnitedHealth Group Incorporated was down 1.38 points (0.25%) to close at 540. 22. The Dow Jones index  Leading gainers among the S&P 500 index components in today's trading were Centene Corp, which rose 10.47% to 83.75, IQVIA Holdings Inc, which gained 10.17% to close at 197.83, and shares of Charles River Laboratories, which rose 9.10% to end the session at 219.12. The losers were Brown & Brown Inc, which shed 12.65% to close at 55.10. Shares of Cadence Design Systems Inc shed 5.55% to end the session at 151.32. Quotes W. R. Berkley Corp fell in price by 4.64% to 69.20.  The NASDAQ Composite Leading gainers among the components of the NASDAQ Composite in today's trading were Taysha Gene Therapies Inc, which rose 97.35% to hit 2.98, Fangdd Network Group Ltd, which gained 89.64% to close at 1.26. , as well as shares of Revelation Biosciences Inc, which rose 64.60% to close the session at 0.41. The biggest losers were Hoth Therapeutics Inc, which shed 26.37% to close at 0.24. Shares of Mana Capital Acquisition Corp lost 23.24% to end the session at 5.99. Quotes TuanChe ADR fell in price by 18.45% to 6.32. The numbers On the New York Stock Exchange, the number of securities that rose in price (2619) exceeded the number of those that closed in the red (487), while quotations of 112 shares remained practically unchanged. On the NASDAQ stock exchange, 2989 companies rose in price, 753 fell, and 241 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 4.66% to 28.46, hitting a new monthly low. Gold Gold futures for December delivery added 0.21%, or 3.55, to $1.00 a troy ounce. In other commodities, WTI crude futures for December delivery rose 0.39%, or 0.33, to $84.91 a barrel. Brent futures for January delivery fell 0.05%, or 0.05, to $91.16 a barrel. Forex Market Meanwhile, in the Forex market, EUR/USD rose 0.94% to hit 1.00, while USD/JPY fell 0.71% to hit 147.90. Futures on the USD index fell 1.03% to 110.75.   Relevance up to 04:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/298317
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

The Stock Market May Collapse And With It The USD/JPY Pair

InstaForex Analysis InstaForex Analysis 26.10.2022 08:03
The USD/JPY pair fell by 105 points yesterday, but this movement was under pressure from the rest of the market (the dollar index lost 1.00%), so it's impossible to speak about the price's intention to turn into a medium-term weakening, even if the price divergence with the oscillator intensifies. Moreover, the signal line of the oscillator has the risk of an upward reversal from the zero line. For now, we can hope for the price to overcome the nearest support at 147.52 and reach the lower level around 145.55. The MACD line is approaching this level. If growth develops, the first target will again be the price channel line around 150.00. The price is developing between the support at 147.50 and the MACD line on the four-hour chart, which tends to the resistance at 150.00. The range of uncertainty is wide, but it is created by investors' worries about tomorrow's European Central Bank meeting and even more about the elections to the US Congress, after which, if the Democrats lose, the stock market could collapse, and with it the USD/JPY pair.   Relevance up to 04:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325319
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

Yesterday A Chance Has Arrived For The British Pound (GBP) To Increase

InstaForex Analysis InstaForex Analysis 26.10.2022 08:08
Yesterday, along with the rest of the market, the pound sterling rose. The target level of 1.1500 was reached (taking into account fluctuations), a rollback from resistance is observed this morning. Consolidating above 1.1500 opens the way for further growth with the first target at 1.1760. Returning to the area under the MACD line of the daily scale (1.1336) will return the pound to the positions of October 20, to support 1.1170, leaving under which opens the target along the price channel line at 1.0800. The price divergence with the oscillator holds the growth on a four-hour timeframe, at least allowing the price to consolidate below the 1.1500 resistance. The lower boundary of the consolidation is the MACD indicator line (1.1350). Together with the MACD line of the daily period, a support range of 1.1336/50 is created.   Relevance up to 04:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325321
The EUR/USD Price Failed To Exhibit A Strong Trending Movement

There Is The Probability Of A Sideways Price Of The EUR/USD Pair Movement

InstaForex Analysis InstaForex Analysis 26.10.2022 08:12
The euro continued to grow on Tuesday and set new tasks for solving: will the price settle above the overcome resistances, this is the level of 0.9950 and the upper line of the price channel and continue to grow to 1.0050, or will it return with a consolidation to the level of 0.9950 and then continue to descend to 0.9864 and 0.9724? The Marlin Oscillator on a daily scale is prone to a reversal of corrective growth from current levels, and the price's exit above resistance will become a false signal. In this case, the downward channel will be abolished. The main events will take place tomorrow when the European Central Bank announces its decision on monetary policy. A price divergence is forming with the Marlin Oscillator on the four-hour chart. If this is not a reversal, then the probability of a sideways price movement. The safe waiting range is 0.9864-0.9950. The lower level (0.9864) is supported by the MACD indicator line.     Relevance up to 04:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325323
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The Statement Of The New UK Prime Minister Added Strength To The Pound (GBP)

InstaForex Analysis InstaForex Analysis 26.10.2022 08:16
Early in the European session, the British pound is likely to trade around 1.1438. A slight technical correction can be seen after reaching the maximum at 1.1498, yesterday in the American session. The British pound received strong support due to the speech of the Prime Minister of the United Kingdom, Rishi Sunak, where, in his first speech, he reiterated that economic stability and confidence would be at the center of his agenda. Yesterday, the US dollar also (USDX) lost strength against its main crosses, and US Treasury bonds fell sharply. The 10-year yield fell from 4.25% to 4.03%. The British pound formed a double-top pattern around 1.1498. This level represents a key level and above this area, we would expect the pound to continue its rise. In this case, it could reach the 1.1718 level. The 7/8 Murray level (1.1474) became a strong resistance. In the event that the British pound continues to trade above this level, we would expect it to continue to rise. It may also reach 8/8 Murray at 1.1718. Conversely, GBP/USD is expected to find support around 1.1380, which represents the daily pivot point. If the technical correction continues we could expect a technical bounce around the 200 EMA located at 1.1310. According to the 4-hour chart, we can see that the British pound has an uptrend channel formed on October 11. The top of the bullish channel coincides with the high of October 5. A strong break above 1.1510 is likely to occur and we could expect a bullish acceleration. On the other hand, if the British pound falls below 1.1310 (200 EMA - 21 SMA) the bearish bias is expected to continue. The price could reach 1.1230 and even fall towards the bottom of the uptrend channel at 1.1162. Our trading plan for the next few hours is to wait for a technical bounce at 1.1380 to buy or wait for a technical correction around 1.1310 (200 EMA) to buy with targets at 1.1476 and 1.1718.   Relevance up to 05:00 2022-10-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298325
Credit squeezing into central banks – what next?

Growth Of The EUR/USD Pair Could Be Associated With The Future ECB Meeting

InstaForex Analysis InstaForex Analysis 26.10.2022 08:20
EUR/USD 5M The euro/dollar pair alternated between an absolute flat and a strong trend on Tuesday. Recall that at this time the pair's movements are confusing so any development of events should be expected. However, yesterday everything went more or less logically, as the pair was again virtually in the same place during the European trading session, and again traded in a very volatile manner during the US session. There were no reports or events in the European Union and the United States that could provoke a fall in the dollar by 100 points in just an hour. Thus, we are inclined to believe that the nature of this movement was technical. The euro in the long term continues to move away from its 20-year lows, but it is still somehow hesitant. Yesterday's growth could be associated with the future European Central Bank meeting, the results of which will be known on Thursday, but at the same time, the British pound was also growing, which, in theory, should not be reacting to such a factor. But it's good that the euro is at least trying to show growth. There was a difficult situation in regards to Tuesday's trading signals, since the very first one formed in the middle of the US session, when most of the upward movement had already been completed. Thus, after the pair grew by 100 points, it was hardly worth trying to work out a buy signal. The same applies to the second signal to buy near the level of 0.9945, it also formed too late in time. Unfortunately, a pretty good move was missed, but out of 8-10 hours of the daytime, the pair was only following a trend movement for an hour, and it was impossible to predict this breakthrough. COT report: The euro Commitment of Traders (COT) reports for 2022 could be used as good examples. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again and the euro is still dropping. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long non-commercial positions increased by 6,500, while the number of shorts decreased by 4,000. Accordingly, the net position increased by about 10,500. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 48,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. If you look at the total open longs and shorts for all categories of traders, then shorts are 22,000 more (586,000 vs 564,000). Thus, according to this indicator, everything is logical. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 26. Four more explosions occurred in the area of the Nord Stream pipelines. Overview of the GBP/USD pair. October 26. The British prime ministerial election ended dull and prosaic. Forecast and trading signals for GBP/USD on October 26. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H You can see on the hourly timeframe that the pair continues to form a new upward trend and, if not for yesterday's strong growth that lasted for about an hour, we would say that the pair is preparing for a new fall. But no, it came close to price parity, breaking 400 points off its 20-year lows for the second time in recent weeks. There are still no obvious reasons to buy the euro. They can be highly technical and expressed by the bears' lack of desire to continue selling the euro. On Wednesday, trading could be performed at the following levels: 0.9553, 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, as well as Senkou Span B (0.9754) and Kijun-sen lines (0.9838). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also additional support and resistance levels, but trading signals are not formed near them. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. Today there will be no important events or reports scheduled again in the European Union and America. Thus, once again there is a possibility that we might witness a flat or "swing". What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 02:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325311
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Cable Market (GBP/USD) Is Similar To The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 26.10.2022 08:25
GBP/USD 5M The GBP/USD currency pair traded identically to the euro/dollar pair on Tuesday, which once again proves the similarity of these two pairs, as well as the fact that a lot of the currency market now depends on America and the US dollar. However, the British pound traded upward in the European trading session, unlike the euro, but in the US it was followed by a powerful jump, which took a little more than an hour. Thus, the pound/dollar again showed super volatility over 200 points on a completely empty day. We have already said earlier that the pound, from a technical point of view, it has a better chance of growth than the euro. However, now, when the pairs move almost identically every day, there is an assumption that either everything really depends only on the dollar, which the market buys or sells, which leads to almost identical movements of both pairs, or one European currency pulls the other. Either up or down. However, we still recall that when the pound fell by 1000 points, and then grew by 1100 points, the euro did without similar jerks. Only two trading signals were formed on the 5-minute time frame yesterday. The first one is when the 1.1354 level is overcome. You should have traded with a long position. The price rose to the level of 1.1442, overcame it and stopped. It was after overcoming this level, in the late afternoon that it was necessary to close longs manually. Profit amounted to at least 100 points. COT report: The latest Commitment of Traders (COT) report on the British pound showed a new growth in bearish sentiment. In the given period, the non-commercial group closed 8,600 long positions and opened 3,400 short positions. Thus, the net position of non-commercial traders fell by 12,900, which is quite a lot for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 40,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? As for the total number of open longs and shorts, here the bulls have an advantage of 25,000. But, as we can see, this indicator does not help the pound too much either. We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 26. Four more explosions occurred in the area of the Nord Stream pipelines. Overview of the GBP/USD pair. October 26. The British prime ministerial election ended dull and prosaic. Forecast and trading signals for EUR/USD on October 26. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair is trading very inadequately on the hourly timeframe. The price often changes the direction of movement and travels impressive distances in each of them. However, the upward trend still recovered, although it also does not look quite clear. We believe that the upward bias may persist, but the pair may regularly show strong declines. On Wednesday, trading could be performed at the following levels: 1.1212, 1.1354, 1.1486, 1.1649, 1.1760. The Senkou Span B (1.1179) and Kijun-sen (1.1265) lines can also be sources of signals. Signals can be bounces and breakouts of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. There are no major events or reports scheduled for today in the UK and US. Thus, there is a possibility that we will see a "swing" again. There are practically no important macroeconomic events left for the pound and the dollar this week, so until the end of the week, traders will have practically nothing to pay attention to. The probability of a flat is also growing. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 02:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325313
Foreign exchange - Euro against US dollar - preview

The Euro To US Dollar Pair (EUR/USD) Is Well Supported

InstaForex Analysis InstaForex Analysis 26.10.2022 08:30
Technical outlook: EURUSD grew through the 0.9975 high intraday on Tuesday before pulling back lower again. Prices are trading in a very tight range around 0.9950-60 for the last few hours. The instrument is looking to push through 1.0200 before giving in to the bears. A break above 1.0000 will accelerate the climb towards 1.0200 and 1.0350 lined-up resistances in the near term. EURUSD is developing its final leg higher towards 1.0200 at least with a potential up to 1.0600 as projected on the daily chart. It would then terminate the larger-degree counter-trend rally, which had begun from 0.9535 earlier. Also, note that 1.0600 is the Fibonacci 0.618 retracement of the entire drop between 1.2350 and 0.9935 as seen here. Hence, there is a high probability of a turn lower from there. EURUSD is well supported at 0.9812, followed by 0.9710 and 0.9630, while resistance comes in around 1.0200, followed by 1.0350. A break above 1.0200 will open the door to testing 1.0350 and higher levels going forward. Only a reversal from current levels and a break below 0.9710 will negate the above bullish structure. Trading idea: Potential rally through 1.0200 and 1.0350 against 0.9535 Good luck!     Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298341
The RBA Will Continue At A 25bp Pace At Coming Meetings

The Australian Government Will Not Be Able To Deliver On Its Election Promise

Saxo Bank Saxo Bank 26.10.2022 08:34
Summary:  The US major indices, the Nasdaq 100 & S&P 500 lift for the 3rd day supported by bonds yields falling, with traders digesting weaker US economic news which could persuade the Fed to slow its pace of hikes, all while parsing through stronger than expected earnings. WTI and gold both gained, while Bitcoin broke above $20,000 for the first time in nearly three weeks. Asian equity futures are in the green. Downunder investors parse through the Australian Federal budget winners; green energy, infrastructure, healthcare and parents. While mulling over Government warnings that power bills will rise 50%. What’s happening in markets?   The US major indices, the Nasdaq 100 (USNAS100.I) & S&P 500 (US500.I) lift for the 3rd day The major indices rallied 2.3% and 1.6% respectively, supported by bonds yields falling, with traders digesting weaker US economic news which could persuade the Fed to slow its pace of hikes, all while parsing through stronger than expected earnings. The 10-year Treasury yield plunged 15 bps to 4.10%, which helped the dollar fall against every G-10 peer, while the pound added 1.7%. It's worth noting so far this US earning seasons 146/S&P500 companies reported results, and 3% delivered earnings surprises to the upside, which has supported equites, with energy earnings growth up the most, averaging 164%.  While total aggregate earnings have declined. Crude oil (CLX2 & LCOZ2) rises over $85 on near supply tightness and some thinking the Fed will slow its pace of hikes  Three US economic data sets released over the last two days are pointing to the US economy souring, which could indicate the US Federal Reserve’s rate rises have been working and may perhaps persuade the Fed to slow its pace of hikes. This could be seen as a positive signal for fuel demand. Consumer Confidence fell, while the S&P Core Logic Case-Shiller 20-City House Price Index also released Tuesday showed home prices fell 1.3% in the 20 core cities studied month-on-month, but were still 13.1% higher than a year ago. The day prior we had S&P Global’s flash US Composite PMI Output Index, that tracks the manufacturing and services sectors, falling to 47.3 this month from a final reading of 49.5 in September  Australia’s ASX200 (ASXSP200.1) rises 0.3%, erasing earlier gains on hotter than expected CPI Australian CPI rose more than expected to a 32 year high, with CPI up 7.3%, hotter than the consensus expectation that consumer prices would rise 7.1% YoY. The biggest moves were in Housing prices, up 10.5% YoY, followed by Transport costs up 9.2% (fueled by fuel prices ripping up), while Food price growth remained strong, up 9% YoY. Core inflation (or trimmed mean inflation) which the RBA looks at, which excludes large rises and falls rose to 6.1% YoY, which is the highest reading since the data was first published. Today's proof shows the RBA’s pace of hikes has done very little to slow price growth and serves as a wakeup call that perhaps the RBA will continue to hike rates to slow inflation, despite employment falling and some businesses being in financial hardship. Coincidently, the last time CPI was this high, was in 1990, when the RBA hiked so aggressively it tipped the economy into recession, so that’s something to consider. It's also worth looking at asset classes that typically do well in recessionary cycles (such as bonds, and in equities healthcare, utilities and consumer staples). The Australian share market is up 0.3% on Wednesday, up for the third day. The real estate sector is leading today, up 2.3% after the sector won in the Australian Federal budget handed down last night. As for stocks, Costa Group (CGC) is up the most, 11% with investors speculating the business might be taken over.   What to consider? Australian Govt budget winners are green energy, infrastructure, healthcare and parents  The Australian Federal Budget handed down last night forecasts slower GPD growth, higher energy bills, as well as higher spending. See below for more.  A sector to watch is green transformation. With the AUD$20b to be put toward Australia’s transformation to net zero. The government outlined a large fund to mitigate climate change risk and support the transformation to net zero, with the funding going toward recently commenced projects on windfarms in VIC and the TAS Marinus Link project, while also delivering cheaper infrastructure loans for investment into renewable energy, in order to lower energy costs and achieve net zero over the coming years. Focus will be on lithium, rare earths, hydrogen, with companies like Pilbara Minerals, Allkem, Lynas and Iluka on watch.      Another sector to watch is building, construction, infrastructure and mining. With the introduction of the national Housing Accord between government and other industry bodies, there is a target of building one million new homes over 5yrs, starting mid-2024. The government will establish a AU$10bn housing Australia future fund, with an aim of providing 20k new social housing dwellings. AU$350m will be spent over 5yrs in delivering 10k affordable dwellings, with state governments to provide another 10k homes. The government also committed to its pre-election promise of a shared equity scheme, allowing eligible people to buy a house with a smaller deposit. Focus will be on stocks like Transurban, Abbri and eyes will also be on banks that could benefit from housing polices, so CBA, ANZ Bank, NAB, as well as Westpac as well as Suncorp and Bank of Queensland   Another sector to watch is health and aged care. The Government will spend AU$787.1m over four years on making a greater co-payment for prescription drugs, starting next year. Moreover, the government pledged to open 50 Medicare urgent care clinics, expand access in suburbs and regions. Overall, along with a rise in spending on hospitals, and extending various COVID-19 support measures, the government has pledged AU$6.1b. Elsewhere, the government is committing AU$2.5b to improving aged care to improving aged care facilities and staffing issues. Focus will be on health care businesses like Ramsay Health, Sonic Health Care, ResMed as well as Healius and Australian Clinical Labs.   And another big highlight was increasing child care subsidies and paid parental leave to drive female labour force participation. From July 2023, childcare subsidy rates will increase for all eligible families with annual incomes less than AU$530k, which would cover around 96% of families. The increase in paid-parental leave will cost AU$531.6mn over four years, starting in FY23. Each year from July 2024 to July 2026, the paid parental leave will increase by 2 weeks, with a total increase of 6 weeks to 26 weeks by FY27. Australian Federal Budget 2022 warns power bills will rise 50%  The Australian Federal Budget handed down last night, estimated power prices will rise 50% over the next two years. It follows on from the Australian Energy Regulator warning electricity prices will rise by up to 50% just in 2023. Either way, it seems the Australian Government won’t be able to fulfill its election promise to cut power bills. Several bodies warned Australia will run out of energy next year including the Australian Consumer and Competition Commission, who says there is a significant risk the nation will be short supply in 2023 by 56PJ, which could further cause prices to rise, and result in some manufacturers closing their businesses, with market exists already occurring.  This might be a catalyst for some to perhaps consider looking at large cap oil companies, and ETFs.       For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-26-oct-26102022
Australia Is Expected To Produce A Bumper Year Of Crops

Ukrainian Exports Of Agricultural Products May Increase In October | Rising Energy Costs Will Hurt Microsoft's Operating Margin

Saxo Bank Saxo Bank 26.10.2022 08:45
Summary:  A whiplash-inducing session for equity traders yesterday as the strong market session was spoiled after hours yesterday by weak results from Microsoft and Google-parent Alphabet. A drop in US treasury yields, meanwhile, has driven a sharp correction lower in the US dollar, with EURUSD eyeing parity suddenly ahead of next week’s FOMC meeting and AUDUSD trying to break higher after a hot core Q3 CPI reading overnight.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Strong rally in US equities yesterday touching the 50-day moving average before settling a bit lower on the close. Price action has subsequently turned negative overnight after the cash session as disappointing earnings from Alphabet and worsening outlook from Microsoft are weighing on the indices. On the positive side, the US 10-year yield is coming down from its recent peak and the Chicago Fed National Activity Index showed yesterday that the US economy operated meaningfully above trend growth in both September and August suggesting inflationary forces are still intact despite tighter financial conditions. Euro STOXX 50 (EU50.I) Touched almost the 3,600 level as we indicated yesterday was the upside level the market was looking for, but the weaker US earnings overnight might impact equity sentiment today, but on the other hand European earnings releases this morning have broadly beaten estimates. FX: USD punched lower as yields drop Yesterday saw the potent, USD-negative combination of treasury yields pushing sharply lower and strong risk sentiment, but interesting to note that the USD weakness continued in late trading yesterday, even after important megacap companies in the US reported weak earnings and risk sentiment reversed sharply, suggesting that treasury yields are the primary driver of the moment. EURUSD came within spitting distance of parity again, and could head to 1.0200 on a break above if the US 10-year yield breaks below 4.00%, although traders may rein in their market exposure ahead of next Wednesday’s FOMC meeting. USDJPY is also under pressure, trading near 148.00, and may have a path to 145.00 or lower if yields continue to ease. Elsewhere, a hot CPI print from Australia overnight (more below) has AUDUSD making a bid above the important 0.6400 area. Gold (XAUUSD) and silver (XAGUSD) Gold and silver trade higher after receiving a boost from a weaker dollar and continued decline in US bond yields amid signs the US economy is showing signs of rolling over, just days before the next FOMC interest rate decision on November 2. US yields slumped across the curve after data showed home prices tumbling the most since 2009 and US consumer confidence was down by more than expected. While another bumper 75 basis points hike is expected next week, the FOMC may decide to ease the foot of the brakes in coming meetings while assessing the impact of their rate and quantitative tightening actions. As a minimum gold needs to break above $1730 before an end to the month-long downtrend can be called. Until then watch the dollar and yields for inspiration, while silver, in order to avoid creating a potential bearish head-and-shoulder formation, needs a break above $20. Crude oil (CLZ2 & LCOZ2) Crude oil remains rangebound, with Brent currently stuck in a $90 to $95 range, after a weaker dollar led pop on Tuesday was reversed after the American Petroleum Institute reported a 4.5-million-barrel expansion in US crude stocks. In today’s weekly update from the EIA, the market will be watching distillate stocks as concerns about tight supplies continue to grow ahead of the EU embargo on Russian fuel starting next February. Diesel inventories in the US are at lowest seasonal level ever heading into winter while the situation in Europe looks similar. Developments that have driven distillate crack spreads and diesel prices at the pumps higher in recent weeks relative to gasoline. Also focus this week on earnings from Big Oil. US treasuries (TLT, IEF) US treasury yields dropped further yesterday, with the 2-year benchmark yield easing below 4.50%, and the 10-year yield pushing all the way down below 4.10% and therefore nearing the important 4.00% area. A drop in the latest Consumer Confidence survey (more below) offered a tailwind, as have talks since Monday of a possible treasury “buyback” from US Treasury Secretary Yellen, said to be prompted by the need to improve liquidity in the treasury market and attractive from the Treasury’s point of view as lower yielding long treasuries issued at far lower yields can be bought back at significant discounts. What is going on? Australia September and Q3 CPI comes in hot Yet another hot inflation report out overnight, particularly in the core inflation data, this time from Down Under, as Australia’s September CPI came in at +7.3% YoY vs. +7.1% expected, and the Q3 CPI was also higher than expected at +1.8% QoQ and +7.3% YoY vs. +1.6%/7.0% expected, with the “trimmed mean” core CPI out at +1.8%/6.1%, far above the 1.5%/5.0% expected, and 4.5% YoY in Q2. Housing prices were the biggest contributors up 10.5%, followed by Transport costs up 9.2% and Food price growth up 9%. US October Consumer Confidence weaker than expected The survey was out at 102.5 versus 105.9 expected and 107.8 in September, with a bad miss in the Present Situation component, which fell to 138.9 from 150.2 in September, a large drop and the lowest reading since early 2021. Wheat futures (ZWZ2) slipped to a five-week low on Tuesday ... with Black Sea grain exports pressuring prices while rain in recently dry growing areas in the US and Argentine adding further downward pressure to prices, especially in the US where recently planted winter wheat fields in the US Midwest look set to receive a decent dose of moisture and potentially further speed of the planting currently 79% completed. Ukraine’s export of agricultural products could rise by more than 8% in October from last month, the Ukrainian Agrarian Council said on Tuesday while ADM’s chief grain trader on an earnings call said that he sees “nothing significant that could derail” an extension of the Black Sea grain export corridor next month. Google shares down 7% on big Q3 miss It turned out that Snap’s worse than expected results last week were a good leading indicator on Google’s performance in Q3. Revenue came in at $69.1bn vs $70.8bn and operating income was $17.1bn vs est. $19.7bn as the operating margin is coming under significant pressure q/q and y/y. Revenue growth in Q3 at 6% y/y is the slowest pace since Q2 2020. Microsoft shares down 7% on worsening outlook FY23 Q1 (ending 30 September) revenue was $↨50.1bn vs est. $49.6bn and EPS of $2.35 vs est. $2.29, but it was the forecast for the current quarter that negatively surprised the market. Microsoft expects the slowdown in PC sales and rising energy costs to hurt operating margin, and the company has more or less introduced a hiring freeze to keep costs under control. What are we watching next? Bank of Canada set to hike 75 basis points We have an interesting combination of hot CPI readings in a number of places, including Canada and Australia, seeing the market adjusting expectations higher for the Bank of Canada and Reserve Bank of Australia, all while US yields have eased off on the anticipation that the FOMC will deliver a message. After the recent hot September Canada CPI reading, the market boosted expectations for today’s Bank of Canada hike to 75 basis points for today's, which will take the policy rate to 4.00% UK PM Sunak may delay budget statement scheduled for early next week Prime Minister Rishi Sunak may delay the report to give the new government a chance to find its feet first, with less urgency as sterling has not only stabilized, but rallied and UK Gilt yields have plunged, with the 10-year yield some 100 basis points lower, closing at 3.64% yesterday. Sunak reappointed Jeremy Hunt as Chancellor and announced a number of other appointments. Earnings to watch Today’s US earnings focus is Meta and given the weak results from both Snap and Alphabet due to worsening pricing on online ads we expect downward pressure on Meta’s business. Key for investors will be Meta admitting that its Metaverse bet is too expensive and will be reined in in the short-term as the company is facing tough headwinds on cash flow generation. Today: Dassault Systemes, Mercedes-Benz, BASF, Deutsche Bank, PingAn Insurance, CGN Power, UniCredit, Canon, Barclays, Standard Chartered, Heineken, Aker BP, Iberdrola, Banco Santander, SEB, Meta Platforms, Thermo Fisher Scientific, Bristol-Myers Squibb, ADP, Boeing, ServiceNow, Ford Motor, Twitter Thursday: ANZ, Anheuser-Busch InBev, Argenx, Shopify, Teck Resources, Neste, Kone, TotalEnergies, EDF, STMicroelectronics, PetroChina, China Life Insurance, CNOOC, Oriental Land, Shin-Etsu Chemical, Takeda Pharmaceuticals, Hoya, FANUC, Shell, Lloyds Banking Group, Universal Music Group, Repsol, Ferrovial, Hexagon, Evolution, Credit Suisse, Apple, Amazon, Mastercard, Merck & Co, McDonald’s, Linde, Intel, Honeywell, Caterpillar, Gilead Sciences, Pioneer Natural Resources Friday: Macquarie Group, OMV, ICBC, China Merchants Bank, LONGi Green Energy Technology, Midea Group, Imperial Oil, Danske Bank, Sanofi, Airbus, Volkswagen, China Construction Bank, Agricultural Bank of China, Bank of China, BYD, China Shenhua Energy, Eni, Keyence, Hitachi, Denso, Equinor, CaixaBank, Wilmar International, Swiss Re, Exxon Mobil, Chevron, AbbVie, NextEra Energy, Colgate-Palmolive, Royal Caribbean Cruises Economic calendar highlights for today (times GMT) 1230 – US Sep. Advance Goods Trade Balance 1400 – Bank of Canada Rate Decision 1400 – US Sep. New Home Sales 1430 – US DoE Weekly Crude Oil and Product Inventories 1500 – Canada Bank of Canada Governor Macklem to speak 1700 – US Treasury auctions 5-year T-notes 2045 – New Zealand RBNZ Governor Orr to speak 2130 – Brazil Selic Rate Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-26-2022-26102022
Reserve Bank of New Zealand: Kenny Fisher says he expects a 25bp rate hike on May 24th

The New Zealand Dollar To US Dollar Pair (NZD/USD) Is Advancing Towards The Round-Level

TeleTrade Comments TeleTrade Comments 26.10.2022 09:27
NZD/USD is oscillating in a 12-pip range as investors await US GDP data. US households are bound to postpone their new home demand due to higher interest obligations. ANZ Business Confidence dropped to -42.7 VS. projections of 42.0 and the prior release of -36.7. The NZD/USD pair has delivered a north-side break of the consolidation formed in a narrow range of 0.5740-0.5752 in the early European session. The asset is advancing towards the round-level resistance of 0.5800 as the risk-on impulse is aiming to regain the glory. S&P500 futures witnessed a vertical fall in early Asia led by weaker guidance from tech-giant Microsoft (MSFT), however, the three-day buying spree in the 500-stock basket indicates sheer optimism in the overall market structure. The US dollar index (DXY) is struggling to sustain above 111.00 and a subdued performance could accelerate volatility in the counter. Meanwhile, returns on US government bonds are declining sharply amid positive market sentiment. The 10-year US Treasury yields have dropped to 4.07% and have still not displayed any sign of exhaustion. For further guidance, investors are awaiting the release of the US Gross Domestic Product (GDP) data. As per the projections, the US economy has grown at 2.4% rate vs. a decline of 0.6% reported earlier in the third quarter of CY2022. It would be worth watching the placement of the GDP figures in comparison with the projections as Monday’s PMI numbers reported by S&P were lower than expectations. But before that, the US New Home Sales data will display the condition of the US real estate market. The economic catalyst is seen lower at 0.585M vs. the prior release of 0.685M on a monthly basis. In addressing mounting inflationary pressures, the Federal Reserve (Fed) is continuously accelerating interest rates. This has resulted in higher interest obligations for households, which has forced them to postpone their demand for new homes. In early Tokyo, ANZ Business Confidence dropped further to -42.7 against the projections of 42.0 and the prior release of -36.7. The kiwi dollar didn’t react much to the qualitative data, therefore, the entire focus will remain on the DXY’s movement and risk profile.
The USD/CHF Pair Returned To Its Previous Three-Day Recovery

The Swiss Franc (CHF) Has Not Completely Retraced Its Gains

TeleTrade Comments TeleTrade Comments 26.10.2022 09:35
EUR/CHF is trading close to parity again. Economists at Commerzbank believe that the pair could extend its advance. Swiss National Bank can still sit back for now “During the last monetary policy evaluation, the head of the SNB Thomas Jordan had pointed out that the franc would contribute to dampening inflation pressure: at the time CHF had appreciated by 7% since June.” “The franc has not completely retraced its gains which might explain why the SNB can still sit back for now. However, it also means that EUR/CHF still has some upside scope until the SNB might begin to feel unhappy about the developments.”
Navigating Disclosure and Standardisation: Policy Amidst Turbulence in Sustainable Finance Market

There Is A Risk Of A Deeper Correction In Brazilian Real (BRL)

TeleTrade Comments TeleTrade Comments 26.10.2022 09:42
Economists at Credit Suisse restate their 5.00-5.50 USD/BRL target range ahead of the final round of presidential elections on 30 October and preview FX implications of different political outcomes. A Lula victory can produce some degree of local investor disappointment “A clear victory by President Bolsonaro is likely to be the most constructive for BRL, consistent with a rapid re-test of the 30 Aug lows in USD/BRL around 5.01.”  “We suspect that any recently re-emerged fears of postelection turbulence would likely be quickly vanquished in the event of a Bolsonaro victory, adding reasons for BRL strength to local investors’ well-documented preference for the incumbent over the opposition candidate.” “While a Lula victory can produce some degree of local investor disappointment, we also remain of the view that any ensuing rallies in USD/BRL towards the top end of our 5.00-5.50 target range will rapidly attract sellers – as long as the pre-vote promises by Lula about picking an ‘orthodox’ finance minister are realized.” “We do not have a strong reason to expect a significantly different cabinet choice in the event of a Lula victory, but if this widely held assumption were to falter, the risk of a deeper correction in BRL past 5.50 would increase sharply.”
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The Decision Of The Bank Of Canada (BoC) Puts Pressure On The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 26.10.2022 09:43
The market is likely to keep a close eye on the rate decision as well as the Bank of Canada’s projections in its new monetary policy report. The loonie could enjoy some gains in the short-term if the BoC delivers a 75 basis points hike as expected, economists at Commerzbank report. If the BoC only hikes by 50 bps, the loonie is set to lose further ground “We expect that CAD will be able to benefit short-term if the BoC hikes its key rate by 75 bps with the market considering its statement to be hawkish. Increasing fears of a recession might constitute a fly in the ointment though, which would reduce possible gains.” “If the BoC does not meet expectations today and only hikes the key rate by 50 bps the loonie is likely to lose further ground against the USD. Downside pressure on USD/CAD would increase further if the BoC then also issued a dovish statement.” See – BoC Preview: Forecasts from 10 major banks, taking what is offered, a 75 bps hike  
CNY Can Appreciate Mildly Through This Year According To Economists At Commerzbank

China's Economic Policy Points To Continued Flexibility In The USD/CNY Rate

TeleTrade Comments TeleTrade Comments 26.10.2022 09:48
USD/CNH has reached the top end of Credit Suisse’s forecasted 7.00-7.35 trading range. Therefore, the Q4 USD/CNH target has been revised to 7.10-7.55.  Continuity in economic policy points to further “flexibility” on the exchange rate “President Xi did not specifically mention FX policy during his Work Report speech, but continuity in economic policy points to further ‘flexibility’ on the USD/CNY exchange rate.”  “Tuesday’s USD/CNY fix (to 7.1668, an increase of 438 pips) ‘broke’ the previous USD/CNY fix range of 7.10-7.12 seen since 10 October, confirming that yuan weakness can continue.”  “We expect negative sentiment in China equities to continue spilling over into the yuan, and now raise our Q4 USD/CNH forecast range to 7.10-7.55.”
Key Economic Events and Earnings Reports to Watch in US, Eurozone, and UK Next Week

Saxo Bank Members Talks In Podcast About Reports Of The Next Key Companies, The Biden Administration And More

Saxo Bank Saxo Bank 26.10.2022 10:54
Summary:  Today we look at a whiplash-inducing session for equities traders as a strong session yesterday on falling treasury yields and a weaker US dollar was marred in the aftermarket session by very weak earnings from Microsoft and Google-parent Alphabet. We break down those earnings reports, the next key companies to report, the status of the US dollar, crude oil and gold, and importantly: the narrative around the Biden administration, with a cooperative Fed, trying to engineer strong support for the equity market into the mid-term elections the week after next. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-oct-26-2022-26102022
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

Google and Microsoft Fell, Expectations For Meta Are Low | The Bank Of Canada Will Deliver A Jumbo Rate Hike

Swissquote Bank Swissquote Bank 26.10.2022 11:11
US indices rallied yesterday on the back of soft economic data from the US, but the sentiment reversed after the Q3 results from Google and Microsoft didn't please. Both stocks fell in the afterhours trading. Rest of the earnings were mixed. Meta is the next US giant to announce earnings, and expectations are rather… low. US Yields The US 2-year yield has been easing after hitting a fresh 15-year high last week, as the US 10-year yield fell to 4.05%. The dollar index tanked around 1%, both the EURUSD and Cable advanced past their 50-DMA, which were acting as strong resistance since the start of the year, especially since the start of the war in Ukraine. Bank of Canada The USDCAD fell to a 3-week low, as the Bank of Canada (BoC) prepares to deliver another jumbo rate hike today. The BoC could deliver a 75bp hike, which would further fuel the odds of recession in Canada by next year. FX Market It’s important to note that the common denominator of the latest FX moves is the softer US dollar. And the downside moves in dollar and the US yields depend on Fed expectations – whatever the other central banks do seem accessory to the main dollar story. Fed The Fed expectations have been shaped by softish data, and some softish comments from the Fed officials recently. But there is nothing official pointing at a potential softening tone from the Fed just yet. Hence, the recent fall in the US dollar, and rebound in equities may not last. Gains remain vulnerable. And very much so, as the latest results from the US tech giants failed to make the investors smile yesterday. Watch the full episode to find out more! 0:00 Intro 0:35 Soft US data fueled optimism… 3:15 … but Big Tech earnings hurt. GOOG & MSFT fell 6.5% post-market 5:01 Other companies announced mixed results 6:30…as UPS surprised 7:00 Some come back to stocks, but stock/ bond correlation remains high 7:52 Meta earnings preview: expect nothing crazy… Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Meta #Google #Microsoft #UPS #Spotify #GM #Visa #UBS #CocaCola #earnings #USD #EUR #GBP #CAD #BoC #rate #decision #US #home #prices #Fed #expectations #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH  
The Mexican Curve: Deeper Inversion Than the US, Signaling Turning Points Ahead

Before The Elections In Israel, The USD/ILS Pair Can Rise

TeleTrade Comments TeleTrade Comments 26.10.2022 11:18
General elections will be held in Israel on Tuesday, November 1. Ahead of general elections, economists at Credit Suisse continue to expect USD/ILS to rise towards 3.65 later in the fourth quarter. Ready to buy USD/ILS on possible dips on “clean” election outcome “The latest polls show a tie between former Prime Minister Netanyahu’s right-wing bloc and the one led by current Prime Minister Yair Lapid. Although this points to possible lingering political uncertainty, we do not expect much of an impact on the shekel.  “We continue to expect USD/ILS to rise towards 3.65 later in Q4.” “We would view possible short-term pullbacks in USD/ILS on the back of a clear election outcome as a buying opportunity.”
Analysis Of The CAD/JPY Commodity Currency Pair - 06.02.2023

The USD/CAD And The USD/JPY Exchange Rates Depend On The Actions Of Central Banks (BoC, BoJ)

InstaForex Analysis InstaForex Analysis 26.10.2022 11:27
A week of silence before the Fed meeting on November 2 helped reduce volatility in markets. Then, weaker macroeconomic data from the US strengthened confidence that the Fed will slow the pace of growth of interest rates. This is also why stocks continued to rally despite weak data and some deterioration in corporate earnings. Pound also rose after Rishi Sunak became the new prime minister of the UK. However, quotes are likely to move sideways starting today. USD/CAD Inflation in Canada turned out to be higher than expected in September even though it fell from 7% to 6.9% (6.8% was expected). Meanwhile, the core index rose to 6%, instead of falling from 5.8% to 5.6% as predicted. Clearly, price pressure continues to spread, capturing wider sectors of the economy. Although gas prices fell by 7.4%, rising prices in the service sector more than offset the decline. A week ago, markets expected the Fed rate to increase by 50 basis points. But now they are counting on a 75 basis point hike, and some even anticipate as much as 100 points, which, of course, is unlikely, but clearly indicates a slight panic in the markets. If the Fed press conference today is hawkish, and the November meeting hint at a potential 50bp rate hike in December, the situation will shift in favor of the loonie, which will eventually lead to a reversal of USD/CAD. Although it is too early to talk about this, the Bank of Canada will most likely act more cautiously. So far, according to the latest CFTC report, the net short position in CAD decreased by 363 million to -1.5 billion. But positioning remains bearish despite the slight adjustment. The estimated price is above the long-term average and is directed upwards, which gives reason to expect USD/CAD to continue growing. If the BoC shows firmness today, the pair is likely to fall towards the support level of 1.3510/20. But more realistic is the resumption of purchases, followed by a transition to a sideways range in anticipation of the Fed meeting on November 2. USD/JPY Yen broke the psychological level of 150 and flew to a new multi-year record, which led to an emergency intervention by the Bank of Japan. This caused USD/JPY to drop to a low of 146.23, the same magnitude as during the last intervention on September (£145.90 to £140.26). The exact amount of the intervention will be known after the Ministry of Finance publishes its report on October 31, but it is clear that it was no less than that of the previous intervention. There was another intervention on Monday, but it did not lead to the expected result. It seems that Japan is losing capital, and its foreign investment income is not enough to cover the deficit. Most likely, this will continue as long as the Bank of Japan carries on its ultra-soft policy. According to the latest CFTC report, the net short position in JPY rose by 1.267 billion to -7.9 billion. The positioning is steadily bearish, and there are no signs of a reversal. USD/JPY will continue to rise until the Bank of Japan changes its monetary policy. Perhaps, the meeting on Friday will give some news, but interventions will not be able to block growth.   Relevance up to 07:00 2022-10-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325331
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

The Hawkish Bank Of Canada Could Push The USD/CAD Pair Down

TeleTrade Comments TeleTrade Comments 26.10.2022 12:49
The big event of the day is the Bank of Canada (BoC) Monetary Policy Announcement. In the view of economists at ING, the BoC should hike rates to 4%, which should certainly help the loonie.  Canadian dollar deposits soon to start paying 4% “The BoC is expected to deliver a hawkish hike in the policy rate to 4.00%. The BoC could hike a further 75 bps in the cycle compared to the further 44 bps currently priced into the Canadian OIS curve.” “Presumably, interest in the 4%-yielding AAA Canadian dollar securities will only build from the reserve management community. It helps as well that as an energy exporter, Canada has been on the right side of this year's terms of trade shock.”  “If equity markets can remain stable today, the hawkish BoC event risk could push USD/CAD down to 1.3500 on the day. But a sustained move below there requires a turn in the big dollar trend, which may not be a story until 2Q23.” See – BoC Preview: Forecasts from 10 major banks, taking what is offered, a 75 bps hike
Analysis Of USD/CHF Pair: The Swiss Currency Pair Rebounds

Jing Ren's (Orbex) Forex analysis - what can we expect from US dollar to Swiss franc?

Jing Ren Jing Ren 26.10.2022 09:06
In this article: Possible developments of USD/CHF On the 1H timeframe for the USDCHF pair, we see the final part of the proposed large double zigzag consisting of cycle sub-waves w-x-y. This pattern looks fully completed, that is, the price decline in the cycle wave y, which is the primary standard zigzag, has come to an end. Currently, there is a development of the initial part of a new corrective trend. It is assumed that a standard 3-wave zigzag of the primary degree â’¶-â’·-â’¸ is being constructed. Perhaps the first two sub-waves â’¶-â’· are fully completed, so growth is expected in the direction of the 1.0096 level, in the impulse â’¸, the last leg of which takes the form of an ending diagonal 1-2-3-4-5, as shown in the chart. At that level, wave â’¸ will be at 123.6% of first impulse â’¶. US dollar to Swiss franc - alternative scenario Alternatively, the cycle pattern may take a more complex form, that is, a triple zigzag w-x-y-x-z. Thus, if this option is confirmed, we will see a decrease in the price and the construction of the final sub-wave z. It is possible that the wave z will be at 123.6% of wave y and will complete its pattern near 0.931. And its first part, the primary sub-wave â’¶, may end at a minimum of 0.947. An approximate scheme of possible future movement is shown on the chart.
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

The Australian Government Does Not Expect Significant Changes In Inflation Forecasts

InstaForex Analysis InstaForex Analysis 26.10.2022 13:54
The Australian dollar, paired with the US currency, is storming the 64th figure, reacting to the release of data on inflation in the country. The report turned out to be "unipolar": all components came out in the green zone, surpassing even the most daring expectations of experts. At the same time, the greenback is still under pressure: the US dollar index fell to the 110th mark, amid increased interest in risky assets. In other words, the situation is in favor of the upward scenario in AUD/USD, at least in the context of a large-scale correction. To confirm their ambitions, buyers of the pair will have to consolidate above the intermediate resistance level of 0.6450, which corresponds to the Kijun-sen line on the daily chart. But the main target is slightly higher—at 0.6540, which is the upper line of the Bollinger Bands indicator on the same timeframe. Above this target, Aussie rose for the last time at the end of September, so this price barrier has a psychologically important significance. But back to Australian inflation. According to published data, the consumer price index in the third quarter jumped to 7.3% YoY (with a forecast of growth to 7.0% and the previous value of 6.1%). In quarterly terms, the indicator rose to 1.8% with a growth forecast of up to 1.6%. On a monthly basis, the CPI also came out in the green zone, reaching 7.3%. Again—all components of today's report exceeded the expectations of most analysts. On the one hand, this fundamental factor really supported the Australian dollar, and not only paired with the US currency, such crosses as AUD/JPY and AUD/NZD demonstrate upward dynamics. But on the other hand, the published inflation report is unlikely to be able to keep buyers of the AUD/USD pair in good shape for a long time. As soon as the first emotions settle down, Aussie will again focus on the dynamics of the greenback. Indeed, by and large, today's release, despite its "green color," has not changed anything significantly. Representatives of the RBA may, to some extent, toughen their rhetoric, but at the same time, the regulator will continue to raise the interest rate in 25-point increments. Yes, inflation is growing at a faster pace, but it should be remembered that, according to the forecasts of the RBA, the CPI by the end of the year will be 7.8%. Therefore, the current growth of the index may be caused by "excessive concern" among RBA members, but no more. Australian Treasurer Jim Chalmers said that the government does not expect a significant change in the inflation forecast. According to him, the Treasury expects inflation to peak at the same level at the end of the year (that is, at around 7.8%). It is also worth recalling the comments of RBA Governor Philip Lowe, who, following the results of the October meeting, made it clear that members of the central bank are afraid of the negative consequences of aggressive tightening of financial conditions for consumer spending. According to him, the simultaneous increase in inflation and an increase in the rate "put a lot of pressure on consumers' budgets." In addition, members of the Reserve Bank were concerned about the state of affairs in the labor market. Whereas the latest "Australian Nonfarm" were quite contradictory – for example, the indicator of the increase in the number of employed came out at around 0.9k with a forecast of growth of 25k. Therefore, in my opinion, the positive effect of today's inflation release will be short-term. In the medium term, the Aussie will move in the wake of the US currency, which is weakening ahead of the November Fed meeting and against the backdrop of weak macroeconomic reports. In particular, the consumer confidence index dropped to 102 points, and the index of manufacturing activity from the Federal Reserve Bank of Richmond to -10 points. Such weak results have increased traders' concern about the Fed's next steps. Rumors have spread in the market that the Fed would demonstrate a less hawkish attitude at the November meeting against the background of further signs of economic weakness in the United States. It is noteworthy that experts are discussing the possible results of the December meeting, and not the November one (at which the Fed is 97% likely to raise the rate by 75 points). The probability of a 75-point rate hike in December is gradually decreasing, and this fact puts pressure on the US currency. Thus, the AUD/USD pair retains the potential for further corrective growth, but rather due to a temporary weakening of the greenback. Australian statistics supported the Aussie "at the moment," but this fundamental factor will not be able to keep the AUD/USD pair afloat if dollar bulls strengthen their positions again. The first and so far the main target of corrective growth is the mark of 0.6540—this is the upper line of the Bollinger Bands indicator on the D1 timeframe. Overcoming this target will open the way for buyers to the 66th figure, but it is too early to talk about it. Indeed, to date, the RBA has already slowed down the pace of tightening monetary policy, while the Fed is guaranteed to raise the rate by 75 points at least in November. All other assumptions are still speculation and cannot serve as a basis for a steady growth of AUD/USD.   Relevance up to 10:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325371
Long-Term Yields Soar Amidst Hawkish Fed: Will They Reach 5%?

No Repayment Of TLTRO Loans, The ECB Is Facing A Difficult Task

ING Economics ING Economics 26.10.2022 14:10
The US curve is looking to the end fo the Fed cycle, and bank funding cost is ratcheting higher. The European Central Bank is about to change the targeted longer-term refinancing operations (TLTRO) rules after the game has started. It can save €31bn in interest but early repayments should remain modest In this article The US story continues to hum in a nuanced fashion A change of TLTRO rates is now widely expected Saving the ECB money but repayments to remain more elusive Today’s events and market view The US story continues to hum in a nuanced fashion Two things have happened in the past couple of days. First the structure of the curve has flipped toward a more bullish leaning as the 5yr has resumed an outperformance on the curve as market rates have fallen. This is typical as the market starts to converge on a likely completion of the rate hiking process. Second, the market discount for the terminal rate itself has eased off from the highs. A few days back the fed funds strip was peppering the 5% area. Its now back down to 4.85%. That pulls down the need for the 10yr to ratchet higher. The 10yr had been at 4.25%, and looking up. It’s now closer to 4%, pulled there in part by a slew of weak macro data, and talk that the Fed may be about to ease off on the size of hikes once they deliver the 75bp discounted for November. But there is something else going on too. Sneaky item three. Bank funding costs are now creeping higher. The 3mth commercial paper rate is up to 25bp over the risk free rate, and double that for European names. That’s the beginning of signs of creaking in the system. If the Fed is going to pull back in the face of persistent inflation it is more likely to reflect this than the macro weakness that, after all, they are actively engineering. No panic yet. Just something to monitor. Probably enough there to keep the 10yr above 4% for now, and for it to continue to be re-pressured higher in the weeks ahead. But we are also looking at 4.25% as being quite peakish (with an outside risk to 4.5%). Can’t quite conclude that the 4.25% seen was in fact the high, but these are the things we are looking at. 5Y coming in on the curve indicates a peak in 10Y yield is getting more likely Source: Refinitiv, ING A change of TLTRO rates is now widely expected Heading into tomorrow’s ECB meeting, various press reports have put changing the terms of TLTRO loans to banks as the ECB’s favourite option. The goal is to nudge them to repay, and to reduce a perceived subsidy paid to banks that can currently place these funds back at the ECB at a higher interest rate than they borrowed. As we’ve outlined in earlier publications, all options on the table are potentially disruptive but the central bank seems intent on acting before TLTRO loans fall due, the majority of them as soon as June next year. The question now is what change the ECB will implement. The central bank seems intent on acting before TLTRO loans fall due Changing the borrowing rate from “average interest rate on the deposit facility calculated over the life of the respective TLTRO III during the rest of the life of the same operation” to “average interest rate on the deposit facility calculated over the rest of the life of the respective TLTRO III during the rest of the life of the same operation” would make the borrowing rate identical to the rate at which the proceeds are placed back at the ECB, and eliminate the carry trade opportunity. A change to TLTRO terms would only result in partial repayments Source: Refinitiv, ING Saving the ECB money but repayments to remain more elusive This wouldn’t guarantee immediate repayment of TLTRO loans, however. Likely, these funds have been earmarked by banks for other uses already, and it is probable that some banks don’t have the liquidity available to repay the ECB at the next opportunity in December 2022. Given funding difficulties over year-end some may choose to wait for March 2023 for their early repayments. Finally, we expect other banks would hold on to their TLTRO loans until their maturity given challenging funding environment currently. In the chart below, we illustrate the difference between this early repayment scenario and the original maturities of TLTRO loans. This wouldn’t guarantee immediate repayment of TLTRO loans Of course, the ECB could be more aggressive and add a spread on top of the average interest rate on TLTRO loans to incentivise earlier repayments. This is an option it might pursue if a sharp reduction in excess liquidity is its goal but we think it is far from guaranteed to work, and would end up punishing banks with the most difficulties in accessing funding markets. The other, apparently more important, objective of getting rid of the perceived subsidy to banks, can be achieved without causing such disruptions as desribed above. By this simple change, up to €31bn of interest cost to the ECB disappear. Euro syndicated supply has been above recent years' despite difficult markets Source: Refinitiv, ING Today’s events and market view The economic release calendar is relatively thin today, with only eurozone M3 growth to watch out of Europe, followed by mortgage application, inventories, and new home sales in the US. Instead, the action will be on the supply front. Italy will auction 2Y bonds as well as inflation-linked debt. The US treasury will auction 2Y floating rate notes, as well as 5Y T-notes. The UK will sell 7Y bonds. This will come on top of syndicated supply which has overshot previous years’ average on most weeks since the summer (see chart above for euro syndications). Despite this headwind, short-covering into tomorrow’s ECB could tip price action in favour of lower rates today. TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
GBP: Monitoring Data Outliers Amid Hawkish BoE Expectations

The Movement Of The NZD/USD Pair On The 4-hour Chart

InstaForex Analysis InstaForex Analysis 26.10.2022 14:20
NZD/USD: The chart shows the movement of #NZD/USD on the 4-hour (H4) chart. Quotes reached the lower border of the resistance area of 0.5809, which is shown on the chart as two parallel lines. This area determines the dynamics of the trend for the coming days. However, there is a chance for a reversal towards 0.5530. And in case of a breakdown of the upper border of the resistance area of 0.5827, the pair will rush to a new target, that is, 0.6005. Good luck!   Relevance up to 13:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325385
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The New Zealand Dollar (NZD) Has No Chance Of Strenght

TeleTrade Comments TeleTrade Comments 27.10.2022 13:36
Further advance in NZD/USD needs to clear the 0.5880 barrier in the near term, noted Market Strategist at UOB Group Quek Ser Leang and Economist Lee Sue Ann. Key Quotes 24-hour view: “Our expectation for NZD to ‘trade between 0.5715 and 0.5785’ yesterday was incorrect as it lifted off and surged to a high of 0.5844. While overbought, the rapid rise has room to extend but a sustained rise above 0.5880 is unlikely. Support is at 0.5800, followed by 0.5770.” Next 1-3 weeks: “On Tuesday (25 Oct, spot at 0.5710), we held the view that NZD is likely to ‘consolidate and trade between 0.5590 and 0.5810 for the time being’. Yesterday (26 Oct), NZD rose above 0.5810 and soared to a high of 0.5844. Despite the rapid rise, upward momentum has not improved by much. That said, NZD could rise but it has to close above 0.5880 before further sustained advance is likely. Looking ahead, the next resistance is at 0.5920. Support is at 0.5770, but only a break of 0.5740 would indicate that NZD is not strengthening further.”
Analysis Of The USD/CHF Pair Movements

What Economists At Citibank Expect Form The EUR/CHF Pair

TeleTrade Comments TeleTrade Comments 27.10.2022 13:37
Economists at Citibank expect the EUR/CHF to move lower over the next three months. The target is set at 0.95. Fade strength “CHF weakened considerably following a marginally dovish hike by the SNB in September. We like fading this move and forecast a stronger franc in the short-term. Our 0-3m forecast is 0.95.”  “In the SNB’s last meeting in September, they hiked policy rates by 75 bps to 0.5%, exiting negative interest rates. Despite the move, markets were underwhelmed by the decision, as SNB President Jordan hinted at a possibility of full-point hikes after the ECB hiked by 75 bps.”
The USD/CNH Pair Remains On The Bear’s Trend

Economist Expect That The USD/CNH Pasir Will Be Trade Between 7.2950 And 7.3550

TeleTrade Comments TeleTrade Comments 27.10.2022 13:42
Further decline in USD/CNH could see the 7.1500 area revisited ahead of 7.1300 in the next weeks, comment Market Strategist at UOB Group Quek Ser Leang and Economist Lee Sue Ann. Key Quotes 24-hour view: “While we held the view yesterday that USD ‘is unlikely to advance further’, we expected it to ‘trade between 7.2950 and 7.3550’. The subsequent sharp sell-off to a low of 7.1826 came as a surprise. The sharp and swift selloff is deeply oversold but with no sign of stabilization just yet, USD could weaken further. However, a clear break of 7.1500 is unlikely. Resistance is at 7.2050 but only a break of 7.2350 would indicate that the weakness has stabilized.” Next 1-3 weeks: “Yesterday (26 Oct, 7.3300), we indicated that while upward momentum has waned somewhat, there is still chance for USD to rise to the major resistance at 7.4000. We clearly did not expect the outsized selloff as USD nose-dived by 1.74% (NY close of 7.1880), its largest 1day drop on record. The break of our ‘strong support’ at 7.2600 indicates that the rally in USD that started two weeks ago (see annotations in the chart below) has ended. The current large pullback has room to extend to 7.1500, possibly 7.1300. On the upside, a break of the ‘strong resistance’ at 7.3000 would indicate that the rapid build-up in downward momentum has eased.”
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

ECB to hike by 75bp | Softer US Dollar (USD) Helps Gold And Crude Oil

Swissquote Bank Swissquote Bank 27.10.2022 13:51
Yesterday wasn’t not a good day for the US Big Tech. Google dived almost 10% after reporting disappointing results, while Microsoft sank almost 8%. Nasdaq bounced 2% lower after having tested the major 38.2% Fibonacci retracement, a touch below the 11700. Meta And don’t expect the things to look better today. Meta dived another 20% in the afterhours trading, after announcing disappointed results. Softer-than-expected  On the macro front, however, the Bank of Canada (BoC) surprised with a softer-than-expected rate hike, and US home sales fell almost 11% in September.   EUR/USD The US dollar index dived below its 50-DMA yesterday. The EURUSD rallied above parity, as Cable advanced past 1.16. Focun On Focus shifts to US GDP dat, the European Central Bank (ECB) decision, Apple & Amazon earnings today. Watch the full episode to find out more! 0:00 Intro 0:33 US Big Tech selloff intensifies. Meta down 20% post-market 1:55 What to expect from Apple & Amazon?7 4:05 Policy pivot? 5:20 US GDP to rebound despite sluggish economy 6:52 US dollar softer, EURUSD rallies above parity, Cable past 1.16 7:52 ECB to hike by 75bp, discuss QT 9:19 Gold, oil up on soft dollar Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Apple #Amazon #Meta #Google #Microsoft #earnings #USD #GDP #ECB #rate #decision #EUR #XAU #crudeoil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH      
The Price Of USD/JPY Pair Has To Fight With The Resistance Level

The Divergence Between The Fed And BoJ Policies Is Not Favorable For The USD/JPY Pair

TeleTrade Comments TeleTrade Comments 27.10.2022 13:59
Thursday's economic docket highlights the release of the Advance third-quarter US GDP report, scheduled at 12:30 GMT. The world's largest economy is expected to have expanded by a 2.4% annualized pace during the third quarter. This would mark a sharp reversal from the 0.6% fall in the previous quarter and the 1.6% decline registered in the first three months of the year. Economists at Société Générale offer a brief preview of the key macro data and write: “We calculate a 3% gain for real GDP, the key economic release of the week. We think that it could be even higher. What does that do for recession calls? Temporary reconsideration is our answer. Companies are becoming more conservative as compensation pressures build.” How Could it Affect USD/JPY? Ahead of the release, the emergence of some US dollar buying assists the USD/JPY to rebound swiftly from the vicinity of the 145.00 mark, or a nearly three-week low touched earlier this Thursday. A stronger GDP print will pour cold water on expectations that the Fed will soften its hawkish stance amid signs of a slowdown in the US economy. This, in turn, will lift bets for more aggressive Fed rate hikes in future and provide a fresh lift to the greenback, setting the stage for some meaningful upside for the major. Conversely, a weaker reading would add to growing market worries about a deeper economic downturn and prompt fresh selling around the buck. That said, a big divergence in the monetary policy stance adopted by the Fed and the Bank of Japan might continue to act as a tailwind for the USD/JPY pair. Investors might also refrain from placing aggressive bets ahead of the BoJ meeting on Thursday, suggesting that the immediate market reaction is more likely to be limited. Key Notes   •  US Q3 GDP Preview: Dollar bears to retain control on weak GDP print   •  US GDP Preview: Forecasts from eight major banks, strong rebound to break two quarters of negative growth   •  USD/JPY bounces off multi-week low, finds decent support ahead of 145.00 mark About US GDP The Gross Domestic Product Annualized released by the US Bureau of Economic Analysis shows the monetary value of all the goods, services and structures produced within a country in a given period of time. GDP Annualized is a gross measure of market activity because it indicates the pace at which a country's economy is growing or decreasing. Generally speaking, a high reading or a better-than-expected number is seen as positive for the USD, while a low reading is negative.      
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

The Constructive Outlook Of The EUR/JPY Pair Is Expected

TeleTrade Comments TeleTrade Comments 27.10.2022 14:03
EUR/JPY sheds part of the recent uptrend and drops below 147.00. The 2022 high at 148.40 still remains as the immediate target for bulls. EUR/JPY comes under pressure and slips back below the 147.00 mark following three consecutive daily advances. Considering the current price action in the cross, the door still looks open to extra upside. That said, the immediate target now emerges at the 2022 high at 148.40 (October 21) prior to the December 2014 top at 149.78 (December 8). In the short term the upside momentum is expected to persist while above the October lows near 141.00. In the longer run, while above the key 200-day SMA at 137.18, the constructive outlook is expected to remain unchanged. EUR/JPY daily chart  
The EUR/USD Pair: There Are Still No Sell Signals

The Euro (EUR) Requires Concerns About Growth To Ease In Order To Strengthen

TeleTrade Comments TeleTrade Comments 27.10.2022 14:06
Markets expect a 75 bps hike from the European Central Bank (ECB) today but the focus will be on communication. Nevertheless, the euro requires concerns about growth to ease in order to strengthen, Kit Juckes, Chief Global FX Strategist at Société Générale, reports. 75 bps is priced in, forward guidance is everything “A 75 bps hike is priced in, followed by at least 50 bps more in December. Warmer weather is helping, the market doesn’t expect QT to start until rates are significantly higher, but does expect to see the TLTRO being run down.”  “As important as anything else will be the tone of Christine Lagarde’s comments, and there, a clear focus on fighting inflation probably keeps the hawkish message intact. That suggests we won’t get anything negative for the euro from the meeting, a least. A stronger currency though probably requires pessimism about growth to wane.” “The Bloomberg consensus for Eurozone 2023 GDP growth has fallen from 2.5% to -0.1% since the start of March, during which time the consensus for US GDP has fallen from 2.5% to 0.4%.”  See – ECB Preview: Forecasts from 15 major banks, no obstacles to a 75 bps hike
Saxo Bank Podcast: The Bank Of Japan Meeting And More

Bank's of Japan policy may be considered as not that convincing. This week's meetings play a vital role

Kenny Fisher Kenny Fisher 27.10.2022 16:29
USD/JPY is showing little movement today, after gaining 1% on Wednesday. In the European session, USD/JPY is trading at 146.15, down 0.16%. Earlier in the day, USD/JPY touched a low of 146.11, its lowest level since October 7th. Yen is on a roll, but for how long After falling close to the 152 line last Friday, the Japanese yen has turned things around. Japan’s Ministry of Finance (MOF) intervened on Friday and Monday, in what has been described as “stealth intervention” as the MOF has refused to comment.  The MOF has engaged in sharp rhetoric against the yen’s prolonged slide, and Finance Minister Shunichi Suzuki has been blunt, saying that the government was “facing off with speculators via markets.” The currency intervention appears to have worked, with the yen improving to around 146. This latest round of interventions is much larger than the one in September, which only slowed the yen’s decline for a few days. Still, I remain sceptical about whether unilateral action such as intervention is the answer to the yen’s woes. Japan has maintained a monetary policy mix that is contradictory and likely unsustainable. The Bank of Japan has kept its ultra-loose policy, in order to support the fragile economy. This has meant intervening in the fixed-income markets in order to cap yields on 10-year JGB at 0.25%. The price for this policy has been a tumbling yen, as the US/Japan rate differential continues to widen as the Fed continues its aggressive tightening. The MOF has thrown a lifeline to the yen by intervening, but it’s far from clear that this will be an effective policy. This sets the stage for a key Bank of Japan meeting today and Friday, and the meeting could well be a “do or die” moment for the Japanese yen. If the BoJ’s message to the markets is business as usual, the yen will likely be under pressure, and the ball could revert back to the MOF and the possibility of further intervention if the yen sags and approaches the 150 line. USD/JPY Technical USD/JPY faces resistance at 147.50 and 148.59 There is support at 145.23 and 143.14 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen hits 3-week high as BOJ meets - MarketPulseMarketPulse
RBI's Strategic INR Support: Factors Behind India's Stable Currency Amidst Global Challenges

At The Close Of The New York Stock Exchange Only The Dow Jones Rose

InstaForex Analysis InstaForex Analysis 28.10.2022 08:00
At the close of the New York Stock Exchange, the Dow Jones rose 0.61% to hit a monthly high, the S&P 500 fell 0.61% and the NASDAQ Composite fell 1.63%. The Dow Jones index Caterpillar Inc was the top performer among the components of the Dow Jones index today, up 15.18 points or 7.71% to close at 212.14. Boeing Co rose 5.97 points or 4.46% to close at 139.76. McDonald's Corporation rose 8.50 points or 3.31% to close at 265.11. The losers were shares of Intel Corporation, which lost 0.94 points or 3.45% to end the session at 26.27. Apple Inc was up 3.05% or 4.55 points to close at 144.80 while Nike Inc was down 2.00% or 1.85 points to close at 90.54. .  The S&P 500  Among the S&P 500 components gaining today were ServiceNow Inc, which rose 13.44% to hit 415.67, Arista Networks, which gained 9.31% to close at 119.12, and Caterpillar Inc, which rose 7.71% to end the session at 212.14. The least gainer was Meta Platforms Inc, which shed 24.56% to close at 97.94. Shares of Align Technology Inc lost 18.10% to end the session at 181.53. West Pharmaceutical Services Inc lost 13.04% to 221.22. The NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were AgroFresh Solutions Inc, which rose 71.34% to hit 2.69, HeartCore Enterprises Inc, which gained 55.67% to close at 1.51, and also shares of Altra Holdings Inc, which rose 48.37% to end the session at 59.72. The least gainers were Core Scientific Inc, which shed 78.13% to close at 0.22. Shares of Kalera PLC lost 65.43% and ended the session at 0.07. Quotes of Transcode Therapeutics Inc decreased in price by 37.39% to 0.72. The numbers On the New York Stock Exchange, the number of securities that rose in price (1,719) exceeded the number of those that closed in the red (1,357), while quotes of 128 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,941 stocks fell, 1,821 rose, and 212 remained at their previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.40% to 27.39. Gold Gold futures for December delivery lost 0.21%, or 3.50, to hit $1.00 a troy ounce. In other commodities, WTI crude futures for December delivery rose 0.73%, or 0.64, to $88.55 a barrel. Futures for Brent crude for January delivery rose 0.82%, or 0.77, to $94.56 a barrel. FX Market Meanwhile, in the Forex market, EUR/USD fell 1.14% to hit 1.00, while USD/JPY shed 0.10% to hit 146.21. Futures on the USD index rose 0.83% to 110.46.     Relevance up to 05:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/298704
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

The Trend Of The US Dollar To Japanese Yen (USD/JPY) Pair Is Fully Downwards

InstaForex Analysis InstaForex Analysis 28.10.2022 08:05
On Thursday, the yen strengthened against the dollar by 0.11% against the growth of the dollar index by 0.79%. It is also symptomatic that USD/JPY fell amid a 0.61% decline in the S&P 500 - this shows, albeit in part, the yen's reaction to speculators' withdrawal from risk. The growth of the stock market is in doubt, as yesterday the indices fell on data on US GDP growth for the 3rd quarter by 2.6% y/y. Technically, the price develops between the price channel lines at 145.55 and 147.54. Overcoming the resistance may still extend the rise to 150.00, but a breakthrough below 145.55 will open the first stage of decline to the MACD line of the daily scale around 144.25. Breaking the MACD line will open the 141.62 target. The Marlin Oscillator is declining in negative territory, which increases the likelihood of a downside scenario. The trend is fully downwards on the four-hour chart. The main obstacle for the bears is the support level of 145.55. It is necessary to settle below it, and then other bears will join them.     Relevance up to 05:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325582
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The Upward Trend Continues On The Cable Market (GBP/USD)

InstaForex Analysis InstaForex Analysis 28.10.2022 08:09
The British pound slightly fell on Thursday due to the euro's sharp drop and the pound itself clearly does not intend to continue the decline, because other counter-dollar currencies did not react strongly to the fall of the "big brother" due to the increase in the European Central Bank rate. The upward trend continues on the GBP/USD daily chart, the target of 1.1760 is still relevant. The Marlin Oscillator is growing in the positive area, it is still far from the overbought zone. If the price settles below 1.1500, it is possible to further fall to 1.1330 (MACD line) and further, if it is overcome, to move to 1.1170. On a four-hour scale, yesterday's decline was also due to a divergence with the Marlin Oscillator. The price is approaching the critical level of 1.1500, the Marlin Oscillator is approaching the zero line. Synchronous overcoming by the price and the oscillator of their supports will give an impulsive character to a short-term decline (target 1.1330). If the price and the oscillator do not overcome the supports, the pound will continue to grow.     Relevance up to 05:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325584
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The Expectation Of Development Of The Euro's (EUR) Decline

InstaForex Analysis InstaForex Analysis 28.10.2022 08:11
With the European Central Bank rate hike by 0.75% and the release of good data on US GDP for the 3rd quarter, the euro collapsed by more than a figure, blocking the previous day's growth. US GDP growth amounted to 2.6% y/y against the expectation of 2.4%, and this factor confirms the Federal Reserve's message that the pace of rate hikes can be reduced. ECB President Christine Lagarde's rhetoric was not "soft" (which was expected), but rather just neutral. Trading volumes were high, positions were clearly being closed. But we still do not see an increase in euro sales volumes and, from the technical side, the price has not reached the target support of 0.9950, which together suggests that the price is preparing to go above 1.0050 and above the upper limit of the price channel, to the range of 1.0100/20, overcoming which opens the 1.0205 target. Consolidating under 0.9950 may push the price to 0.9864 and a little lower to the MACD line of the daily scale. Getting the price to settle under the MACD line will be the final sign of taking the course for further decline (0.9520). Which scenario will the price choose? Despite the positive signals for the stock markets, the US stock index S&P 500 fell by 0.61% yesterday, and the index has been falling for two consecutive days, that is, investors are still leaving risky assets, which puts pressure on counter-dollar currencies. This morning the entire Asia-Pacific region is in the red zone. In general, we are inclined to a scenario with a decline - we are waiting for the price to move under 0.9950 and further move towards 0.9864 with a test of the MACD line. On the H4 chart, the signal line of the Marlin Oscillator made the first plunge under the zero line. Here there is synchronization with the price, which could not reach the support of 0.9950 on the first attempt. So, we are waiting for the development of events with the expectation of the euro's decline.   Relevance up to 05:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325586
The Pound Is Now Openly Enjoying A Favorable Moment

The British Pound To US Dollar (GBP/USD) Pair And Its Trading Signal

InstaForex Analysis InstaForex Analysis 28.10.2022 08:16
Early in the European session, the British pound (GBP/USD) is trading around 1.1584, above the 21 SMA, and above the 200 EMA. The bias remains bullish but GBP is showing exhaustion levels and there could be a technical correction in the next few hours if it falls below 1.1560. GBP/USD is trading sideways between the 1.1645 and 1.1550 levels. This happens while the market awaits the Fed's policy decision that will be unveiled next week regarding the key interest rate. The dollar continued to weaken against all its rival currencies, pressured by falling US Treasury yields. This was the main factor that gave GBP/USD a strong bullish momentum. Given that the market is pricing in a 0.75% interest rate hike by the Fed, it is likely to see a technical correction in the British pound next week and it could resume its bullish cycle again. The psychological level of 1.1500 has become the initial support. A close below this level on the 4-hour chart could be considered a bearish development and will open the door for another decline towards 1.1343 (200 EMA) and 1.1230 (7/8 Murray). On the contrary, 1.1645 (top of the bullish channel) acts as an initial resistance. If it is broken and GBP/USD makes a daily close above this level, it could reach 8/8 Murray at 1.1718. Our trading plan for the next few hours is to sell below the daily pivot point around 1.1565 with targets at 1.1499 (200 EMA). On the other hand, in case there is a pullback towards 1.1610 - 1.1635, it will be considered an opportunity to sell, only if it trades below the top of the uptrend channel. In case the British pound breaks below the 1.15 psychological level, it will be a clear signal to sell with targets at 1.1343 (200 EMA) and 1.1230 (7/8 Murray). The trading instrument could even drop towards the bottom of the uptrend channel around 1.1120.   Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298717
FX Daily: Testing the easing pushback

The EUR/USD Pair Continues To Form A New Upward Trend

InstaForex Analysis InstaForex Analysis 28.10.2022 08:23
EUR/USD 5M The euro/dollar pair started a downward movement on Thursday. This is exactly what we warned about yesterday. The pair showed absolutely unreasonable growth for almost the entire week, behind which there were no macroeconomic indicators or fundamental events. Thus, we could assume that the market began to work out the European Central Bank rate hike in advance. And yesterday, when the central bank raised the rate by 0.75% (which was fully in line with forecasts), the market began to get rid of the euro, as there were no more reasons to buy it. However, a pullback from the local high of 120 points cannot break the upward trend that has formed in recent weeks. It is clearly indicated by an ascending trend line. Also, the pair is above the lines of the Ichimoku indicator on the hourly timeframe. Therefore, despite the dollar's growth on Thursday, the upward movement may continue. But in the long term, the euro's growth is still in doubt. We even admit that this week's upward movement was a run-up before a new powerful fall. After all, next Wednesday the Federal Reserve will raise its rate by 0.75%, which may become a reason for new long positions on the dollar. There were plenty of trading signals on Thursday, but all the signals from the US trading session should have been ignored, because they were formed at the time when the ECB results were announced, and important statistics were published in the USA. Thus, it was impossible to predict the pair's movement, as well as the values of the reports themselves. During the European trading session, the pair formed a buy signal near the 1.0072 level, which turned out to be false, and then two sell signals near the same level, which duplicated each other. Therefore, on the first transaction, a loss of about 20 points was received, and on the second - a profit of about 30 points. COT report: The euro Commitment of Traders (COT) reports for 2022 could be used as good examples. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again and the euro is still dropping. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long non-commercial positions increased by 6,500, while the number of shorts decreased by 4,000. Accordingly, the net position increased by about 10,500. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 48,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. If you look at the total open longs and shorts for all categories of traders, then shorts are 22,000 more (586,000 vs 564,000). Thus, according to this indicator, everything is logical. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 28. The ECB is going to continue to raise the key rate. Overview of the GBP/USD pair. October 28. The pound does not want to lose the gained momentum. Meetings of the BoE and the Fed ahead! Forecast and trading signals for GBP/USD on October 28. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H You can see on the hourly timeframe that the pair continues to form a new upward trend. The euro's decline, which we expected, has happened, but the upward trend remains relevant. Therefore, growth may resume, although in the long term, the "happy euro" may not last long. On Friday, trading could be performed at the following levels: 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as the Senkou Span B (0.9765) and Kijun-sen (0.9900). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also additional support and resistance levels, but trading signals are not formed near them. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There will be nothing remarkable in the European Union. On the other hand, we have reports on income and expenses of the American population in the US, as well as the consumer sentiment index from the University of Michigan. We do not expect a strong market reaction to such data. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 02:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325576
The AUD/USD Pair’s Downside Remains Off The Table

The Austalian Dollar To US Dollar Pair (AUD/USD) Is Showing Downside Reading

InstaForex Analysis InstaForex Analysis 28.10.2022 08:43
Technical analysis: AUD/USD has been trading downside after the breakout of the rising trend-line and triangle pattern in the background, there is chance for further downside movement. Trading recommendation: Due to the breakout of the rising trend-line and triangle pattern in the background, I see potential for further drop towards downside references. Watch for selling opportunities on the intraday rallies with the downside objectives at 0.6412, 0.6300 and 0.6215. MACD oscillator is showing downside reading, which is sign that sellers are taking control. Key resistance is set at the price of 0.6505   Relevance up to 08:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298737
Economic Calendar Details and Trading Analysis - August 7 & 8

The USD/INR Pair Indicates A Resumption Of An Uptrend

TeleTrade Comments TeleTrade Comments 28.10.2022 08:52
The greenback bulls are facing barricades at the downward sloping trendline placed from 83.30. A Positive Divergence signals a resumption in the dominant trend after a corrective move. The DXY is struggling to sustain above 110.50 amid mixed market sentiment. The USD/INR pair is struggling to cross the immediate hurdle of 82.40 in the Tokyo session. However, the US dollar index (DXY) has witnessed a minor correction after failing to sustain above the critical resistance of 110.50. Meanwhile, risk sentiment remains quiet as S&P500 futures are holding their morning losses. USD/INR daily chart On a daily scale, the major has displayed a Positive Divergence, which indicates a resumption of an uptrend after a corrective move. A bullish positive divergence was recorded after the asset made a higher low at around 81.90 while the momentum oscillator Relative Strength Index (RSI) (14) made a lower low. This dictates an oversold situation in an uptrend which is considered a bargain buy for the market participants. The 10- and 20-period Exponential Moving Averages (EMAs) at 82.47 and 82.25 respectively are aiming higher, which adds to the upside filters. USD/INR hourly chart On an hourly scale, the major is facing barricades around the downward-sloping trendline placed from October 20 high at 83.30. The 20-and-50-period EMAs have delivered a bull cross at 82.34, which indicates more upside ahead. A decisive move above Thursday’s high at 82.55 will trigger the Positive Divergence and eventually will activate the greenback bulls for an upside move towards October 10 high and all-time high at 82.82 and 83.30 respectively. Alternatively, the Positive Divergence formation could negate if the asset drops below Thursday’s low at 81.90. This will drag the asset towards October 6 low at 81.51, followed by September 30 low at 81.16. USD/INR
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The USD/CAD Pair Upside Trend Can Be Challenged

TeleTrade Comments TeleTrade Comments 28.10.2022 08:55
USD/CAD takes offers to reverse the previous day’s bounce off monthly low. RSI, MACD suggests further downside past immediate horizontal support. 50-DMA, two-month-old ascending trend line lures bears, fortnight-long resistance line, 21-DMA test buyers. USD/CAD appears all-set to print a two-week downtrend as sellers approach a short-term key horizontal support during early Friday morning in Europe. In doing so, the Loonie pair slides to 1.3530 as it fades Thursday’s recovery from the lowest levels in a month. Not only the inability to rebound from the three-week-old region surrounding 1.3500, but the bearish MACD signals and the RSI (14) also keep the sellers hopeful of breaking the nearby support zone. Following that, a downward trajectory towards the 50-DMA level near 1.3430 and then to the upward-sloping support line from early August, at 1.3280 by the press time, will lure the USD/CAD bears. In a case where the pair sellers dominate past 1.3280, the early September top near 1.3210 will precede the 1.3200 round figure to restrict the quote’s further downside. On the flip side, recovery remains elusive below a two-week-old descending resistance line, close to 1.3660 by the press time. It’s worth noting that the USD/CAD upside past 1.3660 will be challenged by the 21-DMA hurdle of 1.3700, a break of which could convince bulls to attack multiple resistance levels near 1.3840 and the monthly high near 1.3980. USD/CAD: Daily chart Trend: Further downside expected
Despite The Improvement In The Outlook Due To Falling Energy Prices, The Economic Environment In Britain Remains Difficult

Bank Of England (BOE) Is Projected To Reach The Terminal Policy Rate

TeleTrade Comments TeleTrade Comments 28.10.2022 09:02
GBP/JPY is expected to deliver a steep fall below 169.00 despite an ultra-loose BOJ policy. The BOJ will continue policy easing to achieve pre-pandemic growth rates. Next week, the BOE could announce a rate hike by 75 bps to combat mounting price pressures. The GBP/JPY pair has surrendered its entire intraday gains after facing barricades around 169.80 in the early European session. The cross has witnessed selling pressure from the market participants despite a continuation of the dovish stance by the Bank of Japan (BOJ) on interest rates. BOJ Governor Haruhiko Kuroda kept the policy rates unchanged citing weaker growth prospects and external demand shocks responsible. The central bank will continue easing policy further in order to match the current growth rate with pre-pandemic growth levels. The continuation of ultra-dovish monetary policy could terminate the recent pullback in Japanese yen as policy divergence will continue to heat up further as other G-7 central banks are bound to hike their rate cycle amid a historic surge in inflationary pressures. Going forward, Japanese officials could announce a stimulus package. Japan’s Finance Minister Shunichi Suzuki said on Thursday that “tomorrow, a stimulus package will be decided.” Japan’s national broadcaster, NHK, reported that a stimulus package of more than JPY 29 trillion is in consideration. On the UK front, pound investors are preparing ahead of the interest rate decision by the Bank of England (BOE).  To bring price stability to the UK economy, BOE policymakers will steer their rate hike mechanism. November’s monetary policy carries more importance as it will be first after the appointment of Rishi Sunak as UK Prime Minister. 18 of 30 economists surveyed by Reuters said that they expect the BOE Governor Andrew Bailey to hike its policy rate by 75 basis points (bps) at a policy meeting on November 3. The BOE is projected to reach the terminal policy rate of 4.25% in the first quarter of 2023. Currently, the BOE’s interest rate stands at 2.25%.
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

The Australian Dollar (AUD) Has A Chance For Strengthen

TeleTrade Comments TeleTrade Comments 28.10.2022 09:07
AUD/USD could enter a consolidative phase ahead of a probable climb to the 0.6550 region, note UOB Group’s Markets Strategist Quek Ser Leang and Rates Strategist Victor Yong. Key Quotes 24-hour view: “We highlighted yesterday that ‘the rapid rise appears to be overdone and AUD is unlikely to advance much further’ and we expected AUD to ‘trade in a range between 0.6440 and 0.6520’. Our view was not wrong even though AUD traded within a wider range than expected (0.6428/0.6522). Further range trading appears likely today, expected to be between 0.6405 and 0.6505.” Next 1-3 weeks: “There is not much to add to our update from yesterday (27 Oct, spot at 0.6480). As highlighted, overbought short-term conditions could lead to 1 to 2 days of consolidation first. As long as the ‘strong support’ at 0.6470, (no change in level from yesterday) is not breached, AUD is likely to strengthen further to 0.6555 later on.”
China’s Caixin Manufacturing PMI Data Might Support The New Zealand Dollar (NZD)

The US Dollar ndex (DXY) Rebounded And The NZD/USD Pair Did Not Reach The Top

TeleTrade Comments TeleTrade Comments 28.10.2022 09:17
NZD/USD has sensed selling pressure at around 0.5870 as the DXY has rebounded. Risk sentiment is turning averse as S&P500 futures have extended their morning losses. A slowdown in consumer spending has trimmed hawkish Fed bets. The NZD/USD pair has witnessed a corrective move after facing hurdles around the critical resistance of 0.5870 in the early European session. The asset has failed to cross Thursday’s high decisively as the US dollar index (DXY) has rebounded after sensing buying interest around 110.30. Meanwhile, risk sentiment is turning averse as S&P500 futures have extended their morning losses. Bleak growth projections presented by US tech companies are weighing pressure on the US 500-stock basket. The 10-year US Treasury yields have resurfaced firmly despite declining bets for a hawkish Federal Reserve (Fed). At the press time, the 10-year yields are trading at 3.95%, 0.29% higher than their prior release. The CME FedWatch tool is displaying the odds of 75 basis points (bps) rate hike at 84.8%. A slowdown in consumer spending has triggered chances of exhaustion in inflationary pressures. For the third quarter, consumer spending expanded by 1.4% vs. a prior expansion of 2.0%. A decline in household demand may restrict further price growth for goods and services. Going forward, investors will go busy with the monetary policy event by the Federal Reserve (Fed), which is scheduled for Wednesday. On the NZ front, a significant decline in China’s GDP projections could weigh on kiwi bulls as New Zealand is a leading trading partner of China. Global institution International Monetary Fund (IMF) has slashed Gross Domestic Product (GDP) forecast for China, citing Covid-19 lockdowns and the real estate crisis as responsible for a decline in economic activities. The latest review from IMF dictates that "Risks to the banking system from the real estate sector are rising because of substantial exposure." Projections for GDP have been trimmed to 3.2% vs. prior estimations of 4.4%.
EU Gloomy Picture Pointing To A Gradual Approach To Recession

ECB's Policymaker Gediminas Simkus And His Statement About European Central Bank Decision

TeleTrade Comments TeleTrade Comments 28.10.2022 09:37
European Central Bank (ECB) policymaker Gediminas Simkus hints at a potential 75 bps rate hike at the next policy meeting. Additional quotes “We're moving closer towards the neutral-rate territory.” “It is not the case that 75 basis points is the new norm.” “Expect inflation forecasts to be revised up.” “I expect ECB inflation projections to be raised in December.” “QT discussion in December should be about the start date and amounts.” Market reaction EUR/USD remains unfazed by the above comments, trading around 0.9970, up 0.06% on the day.
The Gold Rally Is Continuing To Stall, This Could Be A Good Year For Crude Oil

The Risk Is Aggravated By The Weakness Of The Japanese Yen (JPY) |Gold And Oil Are Doing Well

Saxo Bank Saxo Bank 28.10.2022 10:02
Summary:  A rocky session for equity markets once again yesterday, which tried to find cheer on falling bond yields, only for a thorough thrashing after the close yesterday on Amazon issuing its weakest ever holiday sales outlook, which saw its shares knocked some 13% in the aftermarket. Elsewhere, Apple shares managed to stabilize after its earnings report in, as revenue and earnings topped estimates. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The recent string of US earnings have not done much to keep the recent momentum in US equities alive. Neutral earnings from Apple last night was topped with awful outlook from Amazon, the second largest stock in the US equity market, that saw its shares decline 13% in extended trading. S&P 500 futures are retreating this morning trading around the 3,790 level despite a sizeable readjustment lower in the US 10-year yield to 3.93%. Euro STOXX 50 (EU50.I) European equities saw more diverging price action yesterday but closed above the 3,600 level again, but this morning STOXX 50 futures are coming down 1% trading around the 3,570 level with 100-day moving average at 3,528 being the next support level to watch. There are no economic releases in Europe of importance today so it will be interest rate direction and sentiment on earnings that will drive price action into the weekend. FX: USD pulled in two different directions as falling yields negative, weak sentiment positive The further drop in US treasury yields fail to extend the US dollar sell-off yesterday, as a far less hawkish than expected ECB took EURUSD back below parity and the Bank of Japan sent no new signals on its terminally stuck policy mix of ongoing QE and yield-curve-control.  Weak risk sentiment seems to provide offsetting support from the greenback, but the dollar will find stronger support if US data remains resilient and the Fed is faced to stay on message with further tightening, especially now that the market has significantly downshifted expectations for peak Fed Funds rate beyond the 75 basis point move expected at next Wednesday’s FOMC meeting, with less than 100 basis points of further tightening now priced and a peak rate near 4.78% by next March. Gold (XAUUSD) Gold remains on track for a second week of gains although some caution has emerged ahead of next week's FOMC meeting. Yesterday, the positive sentiment received a knock as the dollar regained some ground, especially against the euro after the ECB stayed far less hawkish than expected. Countering this potential gold negative development, US bond yields continued lower with the US 10-year treasury yield benchmark falling below the important 4% level to record a +25-basis point drop on the week. While the FOMC is expected to deliver another bumper 75 basis points hike they may tilt towards slowing the pace at future meetings while assessing the impact of their rate and quantitative tightening actions. As a minimum gold needs to break above $1730 before an end to the month-long downtrend can be called. Crude oil (CLZ2 & LCOZ2) Crude oil remains on track for a second week of gains but for now without challenging resistance indicating a market still struggling for direction with no overriding theme being strong enough to set the agenda. Strength this week has been driven by a developing tightness in the fuel product market, US exports of crude and fuels setting a weekly record and the weaker dollar, as well as strong buying from China as refineries there plan to boost fuel exports through the end of the year. Diesel markets in Europe and the US continues to signal tightness ahead of winter with elevated refinery margins and prompt spreads signalling tight market conditions. Focus next week on the Nov 2 FOMC meeting and major OPEC producers beginning to cut their production. Additional technical upside in WTI above $89.25 while Brent’s next level of resistance is the October high at $98.75. US treasuries (TLT, IEF) The US 10-year treasury yield benchmark fell through the important 4.00% level yesterday, with the yield trading as low as 3.90% before treasuries found resistance. The 3.85% area is arguably a pivotal level if treasuries continue to rally. The entire yield curve dropped yesterday, in part on a less hawkish ECB continuing the trend recently of central banks delivering less than expected on guidance, as German 10-year Bunds dropped below 2.00% for the first time in weeks on the ECB meeting yesterday (more below). It looks like we’ll be heading into next week’s FOMC meeting with a fairly hard market lean for a significant downshift in the Fed’s hawkish message. What is going on? ECB the latest central bank to surprise dovish The ECB hiked its key rate 75 basis points to 1.5% from 0.75%. Officials dropped a reference to hikes continuing for "several meetings," in the statement, while saying they expect further action. Christine Lagarde said in the press conference that more rate hikes were on the way: "We still have ground to cover." The bank will continue to reinvest all maturing assets in its asset purchase program (QE) and QT won’t be discussed until the December meeting. The market read the meeting as a strong dovish surprise, as another 20 basis points of tightening were removed from forward expectations for 2023 (down some 50 basis points now from peak expectations just over a week ago.) Apple is a fortress FY22 Q4 revenue came out at $90.2bn vs est. 88.6bn up 8% y/y keeping up with inflation and EPS at $1.29 vs est. $1.26 driven by a new all-time high of active devices. The number of paid subscriptions, which Apple has recently announced will see price hikes, have doubled in three years to 900mn. Shares were unchanged in extended trading. Amazon shares plunged 13% on Q3 results Revenue in Q3 hit $127.1bn vs est. $127.6bn up 15% y/y but operating income hit $2.5bn vs est. $3.1bn. The weaker than estimated operating income was driven by a negative revenue surprise in their cloud business AWS with revenue of $20.5bn vs est. $21bn. The free cash flow in Q3 was still negative at $5bn with the combined negative free cash flow over the past year at $26bn. The change in cash generation for Amazon indicates that the pandemic turned out to be bad for the business as it spent too much on expanding capacity that could not be maintained. The outlook for Q4 was what terrified investors with the retailer guidance operating income in the range $0-4bn vs est. $4.7bn and revenue of $140-148bn vs est. $155.5bn. Japan announces massive fiscal stimulus Japan’s Prime Minister Fumio Kushida announced a ¥71.6 trillion (nearly $500 billion) stimulus package overnight, in a purported bid to “ease inflation” and shore up his government’s popularity. The new spending in the package is set at ¥39 trillion and will focus on incentivizing companies to raise wages, national security/defense and subsidies to reduce the impact of energy costs, especially electricity bills. With the Bank of Japan not allowing government bond yields to adjust, this risks adding to the yen’s weakness as long as other major central banks are not in easing mode. Caterpillar, McDonalds, and Boeing positive stories in the negative backdrop A few positive stories to highlight amidst the massive drop in marquee megacap names include Caterpillar, which soared a massive 7.7% on impressive results. Elsewhere McDonald’s (MCD) shares rose 3.3% on reporting sales that handily beat analysts’ estimates, despite inflationary pressures. McDonald’s results were boosted by McRib sales, and the fast-food chain will offer McRib nationwide in the US from the end of this month. Meanwhile, Boeing (BA) shares jumped a day after an ugly drop on its earnings report. Yesterday, shares rose 4.5% with the company releasing a bullish 20-year forecast for China’s commercial jet market, saying China will need to double its fleet in two decades and that China will be a major driver of Boeing sales. Boeing expects China to need 8,485 new passenger and freighter planes valued at $1.5 trillion through 2041. A tough week for coffee, cotton and sugar The Bloomberg Commodity Softs index trades down 5% on the week led by a 6% drop in Arabica coffee (KCH3) $1.79/lb, a 14-month low as money managers continue to exit long-held bullish bets, now turning increasingly sour amid concerns a global recession will hurt demand at a time where the outlook for the 2023/24 crop in Brazil is showing signs of improving. However, a combination of exchange monitored stocks lingering at a 23-year low and oversold condition may soon drive a technical bounce ahead of support at $1.73/lb. Sugar (SBH3) meanwhile has been hurt by a weaker Brazilian Real boosting incentives to export. Cotton (CTZ2), down 52% from its May peak has plunged to near a two-year low on weak demand for supplies as consumers around the world cut back on spending. Weekly export sales from top shipper, the US, plunged from a year earlier with overall sales for the current season being well behind last year and the long-term average. What are we watching next? Market leaning very hard now for a dovish downshift at next Wednesday’s FOMC After the Bank of Canada surprised with a smaller than expected hike this week and the ECB surprised with more dovish forward guidance, the market is now. But will the US data cooperate and is the maximum conceivable downshift from the Fed next week already in the price – given that the Fed itself has said that it will continue to hike even as the economy – including the labor market - weakens? After all, the market has removed nearly 25 basis points of tightening through the March FOMC of next year from the peak of just above 5.0% a bit more than a week ago to just under 4.8% now, and is more aggressively pricing the Fed to begin cutting rates by late next year (December ‘23 FOMC yield down almost 50 bps from peak).  Earnings to watch Today’s US earnings focus is on the two oil and gas majors Exxon Mobil and Chevron expected to report strong earnings in Q3. Exxon Mobil is expected to grow revenue 44% y/y with the operating margin expanding further. NextEra Energy is also worth watching given the recently passed US bill on renewable energy because it may lift the outlook for the industry. Today: Macquarie Group, OMV, ICBC, China Merchants Bank, LONGi Green Energy Technology, Midea Group, Imperial Oil, Danske Bank, Sanofi, Airbus, Volkswagen, China Construction Bank, Agricultural Bank of China, Bank of China, BYD, China Shenhua Energy, Eni, Keyence, Hitachi, Denso, Equinor, CaixaBank, Wilmar International, Swiss Re, Exxon Mobil, Chevron, AbbVie, NextEra Energy, Colgate-Palmolive, Royal Caribbean Cruises Earnings releases next week: Monday: Daiichi Sankyo, Stryker Tuesday: Toyota Motor, Sony Group, Mondelez, AMD, Airbnb, Eli Lilly, Pfizer, BP Wednesday: KDDI, Novo Nordisk, GSK, Booking, Qualcomm, CVS Health, Estee Lauder, Humana Thursday: Cigna, Amgen, PayPal, Starbucks, EOG Resources, ConocoPhillips, Regeneron Pharmaceuticals, Zoetis, Canadian Natural Resources, DBS Group Friday: Duke Energy, Enbridge Economic calendar highlights for today (times GMT) 0800 – Germany Q3 GDP0900 – Eurozone Oct. Confidence Surveys1200 – Germany Oct. Flash CPI1230 – Canada Aug. GDP1230 – US Sep. Personal Income/Spending1230 – US Sep. PCE Inflation1400 – US Oct. Final University of Michigan Sentiment   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-28-2022-28102022
Analysis Of The AUD/USD Commodity Currency Pair's Price

Technical Outlook For The Australian Dollar To Canadian Dollar (AUD/CAD) Pair

InstaForex Analysis InstaForex Analysis 28.10.2022 10:06
The previous trading plan in AUD/CAD talked about opening a set of buy limits in the pair. Plan: Yesterday, during the Asian session, quotes reached 0.88200, which allowed the closing of these positions. Development: Congratulations to those who followed the strategy! The pair moved by as much as 1,000 pips. To those who have not closed their positions, there is still a chance at current prices. The trading idea was based on the "grid trading", which is usually used on cross rates Good luck and have a nice day! Don't forget to control the risks   Relevance up to 09:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325614
NBR Meeting: Hawkish Tone Maintained as Rate Cuts Await

Danmarks Nationalbank Will Follow The ECB And The EUR/DKK Pair Is Expected To Rise

TeleTrade Comments TeleTrade Comments 28.10.2022 10:13
Danmarks Nationalbank (DN) hiked its key policy rate 60 bps to 1.25%. The spread to ECB’s key policy rate is now -0.25%, which economists at Danske Bank think will be enough to weaken DKK and end the need for FX intervention. DN ‘only’ hikes 60bp to end DKK strength “As we expected, Danmarks Nationalbank (DN) opted for a smaller rate hike than ECB – ECB hiked its key policy rate 75bp today, but DN only 60bp. It widens the spread to ECB’s key policy rate to -0.25%. The decision comes after large-scale FX intervention.” “We expect the adjustment is enough to send EUR/DKK higher and end the need for further FX intervention selling and more adjustments of the interest rate spread.” “We look for EUR/DKK to rise towards the top end of this year’s trading range, i.e. to around 7.4450, and for DN to follow ECB 1:1 from here, i.e. to hike to 2.25% in February.”
The USD/CNH Pair Remains On The Bear’s Trend

Quek Ser Leang And Victor Yong Statements About The USD/CNH Pair

TeleTrade Comments TeleTrade Comments 28.10.2022 10:15
According to UOB Group’s Markets Strategist Quek Ser Leang and Rates Strategist Victor Yong, USD/CNH could grind lower to the 7.1500 region in the short term. Key Quotes 24-hour view: “The strong rebound in USD to 7.2686 came as a surprise (we were expecting USD to weaken further). We view the price movement as part of an on-going consolidation and expect USD to trade within a range of 7.2150/7.2650.” Next 1-3 weeks: “We continue to hold the same view as yesterday (27 Oct, spot at 7.1870). As highlighted, the recent USD strength has ended. The large pullback on Wednesday has room to extend to 7.1500, possibly 7.1300. However, a break of 7.2850 (no change in ‘strong resistance’ level) would indicate that the pullback is not extending lower.”
The USD/JPY Price Reversed From The Lower Limit

BOJ Governor Kuroda Has Insisted That Will Not Consider Tightening Policy

Kenny Fisher Kenny Fisher 28.10.2022 10:42
USD/JPY is in positive territory today. In the European session, the yen is trading at 146.94, up 0.47%. BoJ maintains policy All eyes were on the Bank of Japan, which wrapped up a crucial 2-day policy meeting on Friday. The meeting came just days after Japan’s Ministry of Finance (MOF) intervened in the currency markets after the yen had fallen close to the 152 line, a new 32-year low. Finance Minister Shunichi Suzuki would not confirm that the MOF had intervened for the second time in two months, but issued a blunt warning, declaring that the government was “facing off with speculators via markets.” This set the stage for today’s BOJ meeting. In the end, it was business as usual, as the Bank maintained ultra-low interest rates and kept its dovish guidance. The BoJ remains an outlier with its loose policy, as most other major central banks are tightening in order to curb inflation. What was noteworthy was that the central bank revised upwards its inflation forecast for fiscal 2023. Headline inflation was raised to 1.6%, up from 1.4% in July, and core inflation to 2.9%, up from 2.3% in July, with the BoJ warning that risks were skewed to the upside. The Bank also lowered its growth forecast for fiscal 2022 and 2023. Inflation has pushed above the BoJ’s target of 2%, but BOJ Governor Kuroda has insisted that he will not consider tightening policy until it is clear that inflation is sustainable. There was a hint from the Bank that this may not be so far off, as today’s BOJ quarterly report, noted that rising inflation is expected to “lead to sustained price rises accompanied by wage gains”. The yen has paid the price for the BoJ’s ultra-loose policy, tumbling some 20% against the dollar this year. With the BoJ making it clear that it won’t be throwing any lifelines to the yen, the currency will be under pressure from the widening US/Japan rate differential, unless the MoF continues to intervene in the currency markets. . USD/JPY Technical USD/JPY faces resistance at 147.50 and 148.59 There is support at 145.23 and 143.14 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Japan: 4Q22 GDP rebounded, but less than expected

In The Short Term, The Decline In The Japanese Yen (JPY) Can Accelerate Significantly

InstaForex Analysis InstaForex Analysis 28.10.2022 12:06
Today, the Bank of Japan has once again confirmed its status as an outsider among global central banks. Despite the global tightening trend, the BOJ has decided to maintain ultra-low interest rates. No changes on the Japanese front At the end of the week, traders on the USD/JPY pair are focused on the BOJ meeting. At the start of Friday, the central bank issued its verdict on the further monetary exchange rate. As expected, the BOJ did not present a hawkish surprise. The central bank has maintained its policy guidelines: it left interest rates at -0.1% and promised to keep the yield of 10-year bonds at around 0%. The BOJ continues to follow the dovish route, even despite the next jump in consumer prices. The report published today showed that in October, annual inflation in the country increased at the highest rate since 1989. This month, the core CPI jumped to 3.4%, which is significantly higher than the BOJ target, which is at 2%. Nevertheless, the BOJ still considers the acceleration of inflation unsustainable. The central bank expects consumer price growth to slow down to 1.6% over the next 12 months, although it has raised its inflation forecast for the current fiscal year. According to BOJ estimates, the CPI will remain around 2.9% until March 2023, which is significantly higher than the previous estimate of 2.3%. Another argument in favor of maintaining a soft monetary policy of the BOJ is the slow recovery of the economy after the COVID-19 pandemic. Now the central bank is concerned that a total increase in interest rates in the world could trigger a global recession, which would negatively affect the state of the already fragile Japanese economy. Given this risk, the BOJ sharply lowered its economic growth forecast for the current fiscal year. Now the central bank expects GDP to rise not by 2.4%, as before, but by only 2%, followed by a slowdown to 1.9%. Such gloomy prospects are the BOJ's main obstacle on the way to normalizing its monetary policy. It forces the BOJ to take a marginal dovish position, which condemns the yen to further depreciation. What is happening with JPY now? This year, the yen is experiencing the worst drawdown in almost all directions in history, but most of all against the dollar. Since January, due to the strong monetary divergence of Japan and the United States, the JPY rate has fallen against the USD by more than 20%. Unlike the BOJ, the Federal Reserve has embarked on a hawkish track this year and has significantly outpaced other central banks in terms of rate hikes. In order to curb record high inflation in the country, American politicians have already raised interest rates five times during the year and are preparing to hold another round of hikes next week. Now the markets expect that in November the Fed will again increase the indicator by 75 bps, which is an excellent driver for the dollar, especially when paired with the yen. However, at the same time, most traders believe that by December, the US central bank may slow down the rate of tightening to 50 bps, as the American economy begins to show signs of slowing down. The emergence of speculation about the Fed's less hawkish policy caused the greenback to sharply weaken on all fronts this seven-day period, including against the yen. Recall that last week the dollar reached a new 32-year high relative to the yen, approaching the 152 mark. Since then, the USD/JPY pair has fallen by almost 4%. In part, the greenback's position was undermined by two cycles of interventions, which Japan is supposed to have conducted in support of the yen. But the main pressure on the dollar was still exerted by increased expectations of a slowdown in the pace of rate hikes in America. Now that the USD/JPY pair has received another powerful boost from the BOJ, analysts expect it to return to growth. At the time of preparation of the material, the yen really moved into the red zone and fell against the dollar by 0.35%. According to experts, in the short term, the yen's decline may accelerate significantly. Memories of last month are still vivid in the minds of many, when the dovish comments of BOJ Chairman Haruhiko Kuroda caused a sharp weakening of the yen. And just half an hour after Kuroda finished his speech, the Japanese Ministry of Finance conducted the first currency intervention in 24 years. Some analysts do not rule out that in the near future the market may catch deja vu. If the dollar bulls break loose again, the Japanese government will most likely not hesitate for a long time and press the red button.   Relevance up to 08:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/325622
Upcoming Corporate Earnings Reports: Ashtead, GameStop, and DocuSign - September 5-7, 2023

Recent Decisions On Interest Rates (ECB,BoJ) | Big Oil Earnings

Swissquote Bank Swissquote Bank 28.10.2022 12:32
An ugly week of Big Tech earnings is coming to an end, having wipe out hopes of seeing earnings boost gains across the stock markets. Yesterday, Meta plunged more than 24%; Nasdaq 100 lost almost 2%. And today won’t be any better, as Apple and Amazon also lost in the afterhours trading. Amazon lost up to 20%! US Big Tech US Big Tech rather killed joy this week, so all eyes are on Big Oil to reverse mood. Exxon Mobil and Chevron will be reporting earnings this Friday and are expected to announce stunning earnings. US GDP data On the data front, investors didn’t know what to do with the mixed US GDP data yesterday. The latest GDP update showed that the US economy grew 2.6% in the Q3, exports boosted the headline figure, while imports fell - meaning that the domestic demand from the US weakened despite a significant appreciation of the US dollar. The central banks On the central banks front, the European Central Bank (ECB) hiked the interest rates by 75bp at yesterday’s meeting, as the stubborn Bank of Japan (BoJ) maintained its interest rate unchanged at -0.10% at today’s meeting, while revising the 2022 inflation forecast significantly higher from 2.3% to 2.9%. What ahead Today, investors will be watching one last thing on the macro front before the weekly closing bell – and that’s the September PCE index, along with the personal income and spending data. Any weakness could further weigh on the dollar before we close the week, and before next week’s FOMC meeting. Watch the full episode to find out more! 0:00 Intro 0:41 Big Tech selloff continues as Amazon & Apple fail to convince 2:23 Watch Big Oil earnings: Exxon & Chevron are due to report today. 4:17 US GDP data was mixed! 6:16 ECB hiked 75bp, but euro slipped 7:46 BoJ stood pat, while revising inflation forecast! 8:35 Watch US PCE index, personal income & spending Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Apple #Amazon #Meta #Google #Microsoft #ExxonMobil #Chevron #earnings #USD #GDP #ECB #BoJ #rate #decision #EUR #JPY #crudeoil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Technical Outlook Of The EUR/JPY Pair Movement In Short Term

Trading Signal Of The Euro To Japanese Yen Pair (EUR/JPY) On Daily Chart

TeleTrade Comments TeleTrade Comments 28.10.2022 13:10
EUR/JPY regains poise and reclaims part of the ground lost on Thursday. Immediately to the upside comes the YTD high at 148.40. EUR/JPY resumes the upside and surpasses the 147.00 barrier at the end of the week. Considering the current price action, there is still chances for the cross to advance further in the short-term horizon. That said, the immediate up barrier now emerges at the 2022 high at 148.40 (October 21) ahead of the December 2014 top at 149.78 (December 8). In the short term the upside momentum is expected to persist while above the October lows near 141.00. In the longer run, while above the key 200-day SMA at 137.27, the constructive outlook is expected to remain unchanged. EUR/JPY daily chart  
The USD/CAD Pair Is Likely To Remain On The Bear’s Radar

The Recent Interest Rate Hike By The Bank Of Canada Was Deemed Dovish

Kenny Fisher Kenny Fisher 28.10.2022 14:41
The Canadian dollar is lower today. In the European session, USD/CAD is trading at 1.3617, up 0.39%. Markets eye Canada’s GDP The week wraps up with Canada’s GDP for August. The economy is expected to have expanded by 0.1%, which would be unchanged from July. The economy is likely heading into a recession, and Finance Minister Chrystia Freeland stated recently that the coming months would be a “challenging economic time.” The government’s key priority is curbing high inflation, which has eased slightly. In September, inflation fell to 6.9%, down from 7.0% in August. Still, this was higher than the consensus of 6.7%, as soaring food prices kept inflation from falling further. The good news is that inflation appears to have peaked from the June level of 8.1%, which marked a 40-year high. The bad news is that core inflation was unchanged at 5.3% in September, a sign that inflation remains sticky, despite the Bank of Canada’s aggressive rate-hiking cycle. High inflation pushed the BoC to deliver another oversize rate on Wednesday, but the 0.50% hike was considered dovish, as the consensus stood at 0.75%. The cash rate is now at 3.75%, its highest level since 2008. Although inflation is far from being beaten, Canada’s economy is clearly slowing down as a result of the steep increase in rates, and the BoC is easing up on the rate pedal just a bit, in the hopes of guiding the economy to a soft landing and avoiding a recession. High rates are weighing on households and businesses and the BoC is concerned that further oversize rates may pose a risk to financial stability. The US releases Personal Income and Spending data later today as well as the Fed’s preferred inflation indicator, the Core PCE Price Index. The index is expected to rise to 5.2%, up from 4.9%, but I don’t expect today’s numbers to change the Fed’s plan to raise rates by 0.75% next week. . USD/CAD Technical There is support at 1.3656 1.3467 1.3718 and 1.3807 are resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Saxo Bank Podcast: A Massive Collapse In Yields, Fed's Tightening Cycle And More

The Eurozone Releases Its Inflation And FOMC Decision Ahead

Ed Moya Ed Moya 29.10.2022 08:37
US Will the fourth 75 basis-point rate hike be the last major rise before the Fed downshifts in December?  Next week’s FOMC decision is widely expecting a unanimous vote for one last major rate increase. With the Fed’s preferred price measure still showing inflation is running hot, that might make it harder for them to set up a possible downshift in its rate-hike pace for the December meeting. Despite an acceleration with inflation, strong consumer spending data, and a robust labor market, much of Wall Street is growing confident that the Fed will pause tightening once they take the funds rate to 4.50-4.75% next quarter. In addition to the FOMC decision, traders will also closely monitor the nonfarm payroll report.  The strong labor market is still expected to show job growth with 200,000 jobs created in October, down from the 263,000 created in the prior month. The unemployment rate is expected to tick higher and wage gains are expected to slow. It will be another busy week filled with earnings that will likely confirm the slowdown being seen across the economy.  Healthcare, consumer discretionary, energy, and car manufacturer stocks will report next week. EU Inflation has hit double-digits and remains the ECB’s number one priority. The Eurozone releases its inflation report on Monday. Inflation rose to 10.0% in September, and it is expected to surge to 10.3% in October. Some analysts are expecting a possible surge to 11.0%.  Core inflation is projected to tick higher to 4.9%. The Eurozone will release the October Final PMIs, which are projected to indicate contraction, with readings below the 50.0 level. Manufacturing will be released on Wednesday and Services on Friday. Manufacturing is expected at 46.6 and Services at 48.2, confirming the initial estimates. UK The UK releases Final PMIs for October, with Manufacturing on Tuesday, Services on Thursday and Construction on Friday. The 50.0 line separates contraction from expansion. The initial readings were 45.8 for manufacturing and 47.5 for services, indicative of weak economic activity in the UK. Construction may provide a silver lining, with an initial reading of 52.3, pointing to slight expansion. The highlight of the week will be the Bank of England’s rate decision on Thursday. The BoE raised rates by 0.50% in September and is expected to go all in with a jumbo 0.75% hike, which would bring the cash rate to 3.0%. The vote could have two dissenters, which is why markets are expecting a downshift to a half-point pace in December.  The UK may already be in a recession and higher rates will hurt households and businesses, but the BoE has little choice but to continue tightening if it hopes to curb red-hot inflation, which is at 10.1%. Russia The war in Ukraine and the severe Western sanctions have taken a steep toll on consumer spending. In August, real retail sales plunged by 8.8% and September is supposed to be just as bad with an 8.6% decline. South Africa South Africa’s recovery from Covid-19 has been slow and a weak global economy is not helping matters. The October PMI will be released on Thursday. The PMI is expected to rise slightly to 49.7, following a 49.2 read in September. A reading below 50.0 indicates contraction. Turkey Turkey will release the October inflation report on Wednesday. The Turkish central bank continues to slash interest rates, with a 150 basis point cut earlier in October. This policy has seen inflation soar to staggering levels that is more than 17 times the CBRT’s target rate.  CPI rose to a 24-year high of 83.4% in September, and the consensus for October stands at 85.6%. Switzerland Switzerland releases the October inflation report on Thursday. Inflation has been rising in Switzerland, which forced the central bank to raise interest rates by a massive 0.75% in September. Still, inflation is much lower than in the Eurozone or the UK. Headline CPI is expected to tick lower to 3.2%, down from 3.3% in September. China Strict anti-COVID measures are about to send China’s factory activity back  into contraction territory. The global growth outlook will struggle as China’s economy shows their recovery is struggling. Both services and manufacturing data are expected to weaken in October. Currency traders will pay close attention to the PBOC as they have set the yuan reference rate at the weakest levels since 2008. Authorities want a strong yuan, but defending it could prove costly.  They might need to consider narrowing the band. India India’s economy is losing momentum and the latest PMI readings might confirm that trend.  The growth outlook continues to get slashed and the current rate hiking cycle is starting to weigh much more on the economy. The RBI will have an an out-of-cycle meeting next week as the government urges them to get inflation back under 6%.  Traders should not be surprised if some RBI action occurs before the December 5-7th policy decision. Australia & New Zealand The focus is on the RBA policy decision. This meeting could have some added volatility as the general consensus leans towards a 25bp rate rise, but a half-point increase should not be ruled out.  Inflation remains hot and with the cash rate nowhere near inflation, the bank might feel more pressure to act aggressively. New Zealand’s third quarter Employment Change and Unemployment Rate data, due out next Wednesday (2 November), as an increase in employment and a decrease in unemployment will be beneficial to New Zealand’s economic growth. As the overall inflation level in New Zealand remains high, the money markets are pricing in either a half-point rise or 75- basis point rate hike at the RBNZ’s next interest rate meeting on November 23rd. Japan The Bank of Japan did not deliver any surprises. Both rates and the 10-year yield target did not have any changes. The yen remains a volatile trade and now the ball is in the Ministry of Finance hands. With momentum growing for the Fed to shift to a slower pace of tightening in December, Japan may try to be aggressive in defending the dollar-yen 150 level. Traders will also pay close attention to the minutes of the last BOJ decision. Singapore Singapore’s economy is weakening and the October PMI reading should show that the weakening trend continues. Traders will also pay close attention to the retail sales report for the month of September. Markets Energy Oil markets remain volatile as China ramps up COVID restrictions, some US oil giants signal modest commitments to boost production, and the global economic outlook continues to dim.  Next week, energy traders will get a better sense of how China’s economy is performing despite the COVID lockdowns that happened in October. OPEC will also announce their World Oil Outlook on Monday. Commodities broadly will also have a reaction to the FOMC policy decision and nonfarm payroll report. A dovish rate rise could allow for dollar weakness which could keep oil prices supported here.  If risk appetite remains healthy, WTI crude could continue to consolidate above the mid-$80s. Gold The bullish case for gold is improving as financial markets begin to grow optimistic that the Fed will begin the deliberation of a slower pace of tightening.  Gold could be on the verge of a major breakout if the FOMC decision is supported by the nonfarm payroll report at the end of the week.  Gold has initial support at $1640, with the line in the sand being $1,620.  The $1680 provides major resistance for gold, followed by the $1700 level. Cryptos Bitcoin is forming a trading around the $20,000 level as many investors await to see what happens with next week’s market reaction to the FOMC decision. What will also draw extra attention is the Hong Kong Fintech Week, that includes appearances from FTX’s Sam Bankman-Fried, but could contain more insight on how Hong Kong will provide guidelines on how retail crypto trading could be allowed. Binance CEO Zhao and Ark’s Cathy Wood will speak at the Web Summit in Lisbon. Economic Calendar Sunday, Oct. 30 Economic Data/Events: Brazilians vote in a presidential runoff election between Luiz Inacio Lula da Silva and incumbent Jair Bolsonaro. Daylight savings time ends in the UK EU trade ministers informal meeting in Prague Monday, Oct. 31 Economic Data/Events: Eurozone CPI, GDP Poland CPI Mexico GDP Australia retail sales China manufacturing and non-manufacturing PMI Japan industrial production, retail sales, housing starts South Africa trade balance Thailand trade UK mortgage approvals Danmarks Nationalbank conference, speakers include ECB Chief Economist Lane, Riksbank Governor Ingves, and Norges Bank Governor Wolden Bache Bank of Italy Governor Visco and Italian Finance Minister Giorgetti speak at a World Savings Day event. Nordic prime ministers meet in Helsinki for a Nordic Council meeting. Hong Kong Fintech Week: Speakers include FTX’s Sam Bankman-Fried, China Banking and Insurance Regulatory Commission’s Yuanqi and the Securities and Futures Commission’s Leung as speakers. OPEC launches its 2022 World Oil Outlook at the Abu Dhabi International Petroleum Exhibition and Conference. Russian President Putin meets the leaders of Armenia and Azerbaijan in the southern Russian city of Sochi. Tuesday, Nov. 1 Economic Data/Events: US construction spending, ISM manufacturing index, light vehicle sales RBA rate decision: Expected to raise rates by 15bp to 2.85% China Caixin Manufacturing PMI Canada Manufacturing PMI Czech Republic Manufacturing PMI India Manufacturing PMI Japan Manufacturing PMI, Vehicle Sales Mexico Manufacturing PMI Norway Manufacturing PMI Russia Manufacturing PMI South Africa Manufacturing PMI UK Manufacturing PMI Czech Republic GDP Macau casino revenue Mexico international reserves New Zealand building permits Denmark’s general election Riksbank Governor Ingves gives a speech on the economy and monetary policy, in Helsingborg. Web Summit conference; Speakers include Binance CEO Zhao and ARK Investment Management’s Wood Wednesday, Nov. 2 Economic Data/Events: FOMC Decision: Expected to raise rates by 75bps US MBA mortgage applications, ADP employment European Manufacturing PMI: Eurozone, France, Germany, Italy, Poland, Spain Australia building approvals Germany unemployment Japan BOJ minutes of Sept. meeting New Zealand unemployment, central bank Financial Stability Report Russia unemployment, retail sales EIA Crude Oil Inventory Report Bank of Ireland’s Financial System Conference: Speakers include Irish Central Bank Governor Makhlouf, Finance Minister Donohoe and Bank of France Governor Villeroy In Dublin. Thursday, Nov. 3 Economic Data/Events: US factory orders, durable goods, trade, initial jobless claims, ISM services index Bank of England Rate Decision: Expected to raise rates by 75bps to 3.00% UK services PMI Australia trade balance China Caixin services PMI Eurozone unemployment India S&P Global services PMI Italy unemployment Norway rate decision: Expected to raise rates by 25bps to 2.50% Russia services PMI Spain unemployment G-7 foreign ministers to meet in Munster, Germany German Chancellor Olaf Scholz visits China RBA’s Kearns speaks at the ASIC Annual Forum in Sydney. ECB’s President Lagarde and Elderson speak at Latvijas Banka Economic Conference 2022. ECB’s Panetta gives a keynote speech at ECB money market conference. BOE’s Mann speaks on a panel about inflation at an American Enterprise Institute web event. Friday, Nov. 4 Economic Data/Events: US October Change in nonfarm payrolls: 200Ke v 263K prior, unemployment Rate to tick higher to 3.6%, Average Hourly Wages European Services PMI: Eurozone, France, Germany, Italy, Spain Japan Services PMI Canada unemployment Eurozone PPI France industrial production Germany factory orders Singapore retail sales Spain industrial production Thailand CPI The UN’s Food and Agricultural Organization releases its monthly index of world food prices. ECB’s VP de Guindos gives a keynote speech at the Energy Prospectives session ECB President Lagarde gives a lecture on monetary policy in the euro area organized by Estonia’s central bank. Fed’s Collins speaks on macroeconomic conditions at a Brookings Institution virtual event. Sovereign Rating Updates: France (Fitch) Ireland (Moody’s) Norway (Moody’s) This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

The Euro (EUR) Failed To Pick Up The Falling Banner-28.10.22

InstaForex Analysis InstaForex Analysis 29.10.2022 09:06
The euro-dollar pair is trading flat on Friday after the previous day's sharp decline to 0.9960. EUR/USD bulls could not keep the price above the parity level, despite the European Central Bank's 75-point rate hike and ECB President Christine Lagarde's rather hawkish comments. The ECB has become a temporary ally of the euro, but traders have ignored this fact. Impulsively rising to the 1.0090 mark, the pair turned around and headed downward, following the US currency. By the way, the current situation serves as another confirmation that the euro is not capable of its own game. EUR/USD growth is possible only if the greenback weakens. Strengthening the single currency is optional, not a prerequisite. At the beginning of this week, a "perfect storm" formed: the dollar was losing its positions, while the euro was gaining momentum throughout the market. Thanks to a combination of these factors, the pair broke the 1.0000 mark for the first time since September 20. But as soon as the dollar bulls reminded themselves, the price impulsively declined to the area of the 99th figure. The euro failed to pick up the "falling banner", once again confirming its role as a slave, not a leader. The US dollar index updated a 5-week low on Thursday, reaching 109.36. However, on the same day, the index turned upward, reacting to the release of data on the growth of the American economy. According to the published report, the US economy recovered in the third quarter after a two-quarter decline (in the first quarter of 2022, it shrank by 1.6%, in the second - by 0.6%). In the period July-September, GDP increased by 2.6% with a growth forecast of 2.3%. The indicator was in positive territory for the first time this year, amid fears that the country is at risk of recession. The growth of consumer and government spending, as well as investments in fixed assets in the non-residential sector contributed to the improvement of the economic situation. The report was an important trump card for dollar bulls, which have recently loosened their grip. Over the past two weeks, rumors have been actively circulating in the market that the Federal Reserve will reduce the pace of monetary policy tightening after the November meeting. The latest releases, which were in the red zone, also added fuel to the fire. In particular, the US index of business activity in the manufacturing sector collapsed to 49.9 points. This is the weakest result since July 2020. The index of business activity in the services sector fell to 46 points with a forecast of a decline to 49 points. The consumer confidence index also disappointed, which fell to 102 points. The index of manufacturing activity from the Fed Bank of Richmond was also in the red zone. Amid such a series of negativity in the market, there was some confidence that in November the Fed will raise the interest rate by 75 basis points for the last time (within the current cycle). Further, the 5% indicative goal will be achieved in shorter steps – 50-point or even 25-point. For example, the probability of a 50-point rate hike following the December meeting is now 48%. The report on US GDP growth made traders doubt that the members of the Fed will reduce the pace of interest rate hikes. In my opinion, these doubts are justified, given the position of Fed Chairman Jerome Powell and most of his colleagues. Powell actually said that Americans will have to put up with the slowdown in economic growth, since "this is a sad price for reducing inflation." At the same time, he has repeatedly stated that the pace of monetary policy tightening this year "will depend on incoming data," primarily in the field of inflation. Take note that the core PCE price index, which is the preferred indicator of inflation for Fed members, rose in September to 5.1% in annual terms (in August, an increase to 4.9% was recorded). Thus, the dollar was caught between a rock and an anvil. On the one hand, there is a record increase in core inflation (the core CPI has reached a 40–year high), an increase in gasoline prices in the United States (amid the latest OPEC+ decision), foreshadowing an acceleration in the overall CPI and an increase in the PCE index. On the other hand, there are pessimistic forecasts regarding the slowdown of the American economy. According to most experts surveyed by The Wall Street Journal, US GDP growth will slow down in the coming months, as consumers and businesses continue to cut spending in the face of rising interest rates and uncertainty. Members of the Fed at the November meeting (the results of which we will learn next Thursday) will swing the pendulum in one direction or another. Either they will express concern about the economic downturn, hinting at a possible slowdown in the pace of monetary policy tightening, or they will again focus their attention on the dynamics of inflationary growth. The Fed meeting is less than a week away. Consequently, the members of the Fed now observe a 10-day silence regime and do not speak publicly. In such an information vacuum, the EUR/USD pair is likely to circle around the parity level, moving away from the 1.0000 mark by 60-100 points. Given the influence of the so-called "Friday factor", it is impractical and even risky to open trading positions now. The downward momentum of Thursday has exhausted itself, while EUR/USD bulls, apparently, are not able to organize a large-scale counteroffensive. Therefore, at the moment it is most expedient to take a wait-and-see attitude.     Relevance up to 16:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325678
The EUR/USD Pair: There Are Still No Sell Signals

European Bond Yields Went Down And There Is A Bad News For The EUR/USD Pair-28.10.22

InstaForex Analysis InstaForex Analysis 29.10.2022 09:08
The unexpected expansion of the German economy by 0.3% q/q in the third quarter did not save the euro from falling. Bloomberg analysts expected to see a 0.2% reduction in German GDP due to the armed conflict in Ukraine and the related energy crisis, but the echoes of the exit from lockdowns and large-scale population support programs due to the pandemic allowed Berlin to surprise experts. Perhaps the fall in gas prices in October will make the picture even more joyful, but it's too early to talk about breaking the downward trend in EURUSD. Dynamics of European GDP and inflation European Central Bank President Christine Lagarde's hints of a dovish reversal following the October ECB meeting and expectations that the Federal Reserve will remain resolute in the fight against inflation are to blame. From the text of the ECB's accompanying statement, the affirmation that rates would rise at several subsequent meetings had disappeared, and the Frenchwoman talked a lot about the troubles of the eurozone economy and that the tightening of monetary policy was already having its effect. The futures market lowered expectations of the deposit rate ceiling, European bond yields went down, and the euro weakened. In my opinion, after December +50 bps and February +25 bps, the ECB may stop. This implies an increase in the cost of borrowing to 2.25%, not 2.5%, as Bloomberg analysts and the futures market currently predict. Bad news for EURUSD. However, the fate of the main currency pair will certainly be decided not in Europe, but in North America, where the Fed will meet next week. According to economists surveyed by Bloomberg, the central bank will bring the federal funds rate to 5%, which will provoke a recession in the US economy. The trajectory of the movement of borrowing costs is as follows: +75 bps in November, 50 bps in December and 25 bps at each of the next two meetings. Thus, it is longer than that of the ECB, which allows us to talk about maintaining the stability of the downward trend in EURUSD, at least until the end of the first quarter of 2023. Dynamics of the federal funds rate Along with the FOMC meeting, the key event of the first week of November will be the release of data on the US labor market for October. It is expected that unemployment will rise from 3.5% to 3.6%, and employment – by 220,000. A very decent figure, given the fact that it takes +50-100,000 per month to cool the labor market and stable unemployment growth. If the US economy remains resilient amid strong employment, inflation will remain at elevated levels for longer than expected. Including due to an increase in wages by 5% or more. The Fed will need additional efforts in the process of tightening monetary policy, and this is good news for the US dollar. Technically, a Dragon reversal pattern is forming on the EURUSD daily chart. The return of quotes to the Dragon's head near 1.009 or the rebound from support at 0.9885 are reasons for buying. In the meantime, we remain in short-term sales from parity.     Relevance up to 14:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325668
ECB press conference brings more fog than clarity

Eurozone Interest Rate Decisions Will Continue To Be Data Driven -28.10.22

InstaForex Analysis InstaForex Analysis 29.10.2022 09:10
The downside risks of the European economy are growing, but with inflation rising to almost 10% in September, the European Central Bank continued to raise interest rates. After raising interest rates by 75 basis points across the board, ECB President Christine Lagarde said the committee had tightened financial conditions and more work needed to be done. "There is still a field to cover," she said. "In the current state of uncertainty, with the possibility of a recession rising, everyone has to do their job," Lagarde said. "Our job is price stability. This is our main task." Interest rates are expected to rise by early 2023. But Lagarde didn't say how high the stakes would be. Reiterating that future policy rate decisions will continue to be data-driven and meeting-by-meeting. The increase in interest rates is due to the fact that the ECB continues to see further risks to economic activity until the end of the year. "Eurozone economic activity is likely to slow significantly in the third quarter of the year, and we expect further weakening for the remainder of this year and early next year. High inflation continues to hold back spending and production. Serious disruptions to gas supplies have further worsened the situation, and both consumer and business confidence has fallen rapidly, which is also putting pressure on the economy," Lagarde said in her opening remarks. However, price stability and bringing inflation down to the ECB's medium-term target of 2% is the central bank's priority. While soaring energy and food prices are the two biggest drivers of inflation, the ECB is forecasting a general rise in consumer prices. "Inflation remains too high and will remain above our target for an extended period," Lagarde said. "Incoming data confirms that the risks to the economic growth outlook are clearly abating, especially in the near term," she added. However, price stability and bringing inflation down to the ECB's medium-term target of 2% is the central bank's priority. Although the sharp rise in energy and food prices is the most significant driver of inflation, the ECB predicts a widespread increase in consumer prices. "Inflation remains too high and will remain above our target for an extended period," Lagarde said. - The risks for the inflation forecast are primarily positive. The main risk for the nearest period of time is a further increase in retail prices and energy prices. In the medium term, if energy and food prices rise, inflation may be higher than expected."     Relevance up to 12:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325638
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The Euro To US Dollar (EUR/USD) Pair Is Showing Signs Of Strength

InstaForex Analysis InstaForex Analysis 30.10.2022 09:48
Overview : Pivot : 0.9946. The EUR/USD pair's rise from 0.9798 is still in progress and intraday bias stays on the upside for 0.9900 resistance first on the one-hour chart. All elements being clearly bullish market, it would be possible for traders to trade only long positions on the EUR/USD pair as long as the price remains well above the price of 0.9798. The EUR/USD pair will continue rising from the level of 0.9798 in the long term. It should be noted that the support is established at the level of 0.9798 which represents the daily pivot point. The price is likely to form a double bottom in the same time frame. Accordingly, the EUR/USD pair is showing signs of strength following a breakout of the highest level of 0.9873. This suggests that the pair will probably go up in coming hours. If the trend is able to break the level of 0.9873, then the market will call for a strong bullish market towards the objectives between 0.9873 and 1 USD this week. Currently, the price is in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. As the price is still above the moving average (100), immediate support is seen at 0.9798, which coincides with a key ratio (61.8% of Fibonacci). The EUR/USD pair swing around the breached resistance of the bullish channel and keeps its stability above it until now, noticing that the EMA50 continues to resistance the price from above, while RSI begins to overlap positively. Thus, the market is indicating a bullish opportunity above the above-mentioned support levels, for that the bullish outlook remains the same as long as the 100 EMA is headed to the upside. So, buy above the level of 0.9850 with the first target at 0.9900 in order to test the daily resistance 1. The buyers' bullish objective is set at the level of 0.9950. A bullish break in this resistance would boost the bullish momentum. The buyers could then target the resistance located at 0.9950. If there is any crossing, the next objective would be the resistance located at 0.9950. The level of 1 USD is a good place to take profits. Moreover, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). However, beware of bullish excesses that could lead to a possible short-term correction; but this possible correction would not be tradeable. The EUR/USD pair's rise from 0.9798 is still in progress and intraday bias stays on the upside for 0.9900 resistance first on the one-hour chart. All elements being clearly bullish market, it would be possible for traders to trade only long positions on the EUR/USD pair as long as the price remains well above the price of 0.9798. The EUR/USD pair will continue rising from the level of 0.9798 in the long term. It should be noted that the support is established at the level of 0.9798 which represents the daily pivot point. The price is likely to form a double bottom in the same time frame. Accordingly, the EUR/USD pair is showing signs of strength following a breakout of the highest level of 0.9873. This suggests that the pair will probably go up in coming hours. If the trend is able to break the level of 0.9873, then the market will call for a strong bullish market towards the objectives between 0.9873 and 1 USD this week. Currently, the price is in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. As the price is still above the moving average (100), immediate support is seen at 0.9798, which coincides with a key ratio (61.8% of Fibonacci). The EUR/USD pair swing around the breached resistance of the bullish channel and keeps its stability above it until now, noticing that the EMA50 continues to resistance the price from above, while RSI begins to overlap positively. Thus, the market is indicating a bullish opportunity above the above-mentioned support levels, for that the bullish outlook remains the same as long as the 100 EMA is headed to the upside. So, buy above the level of 0.9850 with the first target at 0.9900 in order to test the daily resistance 1. The buyers' bullish objective is set at the level of 0.9950. A bullish break in this resistance would boost the bullish momentum. The buyers could then target the resistance located at 0.9950. If there is any crossing, the next objective would be the resistance located at 0.9950. The level of 1 USD is a good place to take profits. Moreover, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). However, beware of bullish excesses that could lead to a possible short-term correction; but this possible correction would not be tradeable. Next week : Between 31 Oct. 2022 and 4 Nov. 2022. Weekly range 1.0100 and 0.9850. Point : 250 pips. Trend : uptrend above the weekly support 0.9850.     Relevance up to 10:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298893
The Euro May Gradually Climb To The Target Level

The EUR/USD Pair: The Construction Of An Upward Trend Section Has Begun

InstaForex Analysis InstaForex Analysis 30.10.2022 12:07
The wave marking of the 4-hour chart for the euro/dollar instrument has finally undergone certain changes. The demand for European currency has been growing in recent days. Quotes have been rising, and this has led to the fact that they have gone beyond the peak of the last rising wave. Thus, now we have at least a three-wave ascending structure, which can become a new upward section of the trend for five or more waves, or it can remain a three-wave corrective. In the first case, the European currency has a good chance of growth over the next few months. In the second case, the decline in quotes may resume at any moment. The most important thing is that now the wave markings of the pound and the euro coincide. If you remember, I have repeatedly warned about the low probability of a scenario in which the euro and the pound will trade in different directions. Theoretically, this is certainly possible, but in practice, it happens extremely rarely. Now both instruments assume the construction of at least one more upward wave, and the low of September 28 can be considered a new starting point. The downward section of the trend has become so complicated that even its internal waves are very difficult to identify correctly. But now we have a clear starting point. The demand for the euro currency is declining. The euro/dollar instrument did not decrease or increase by 1 point on Friday. Nevertheless, earlier a successful attempt was made to break through the 323.6% Fibonacci level, which indicates the readiness of the market to sell the instrument. On Thursday and Friday, the demand for the European currency was declining, and it was clear that the market had won back the ECB interest rate increase, and now it intends to prepare for the Fed meeting to be held next week. In my opinion, the wave pattern may undergo serious changes after the market learns the results of this meeting. What can we expect from the Fed? In the last few weeks, rumors have been actively circulating that the rate will continue to rise but at a slower pace than before. I think it's just a rumor. The head of the San Francisco Fed, Mary Daly, said that "it's time to start discussing the slowdown in the rate hike." Thus, at the November meeting, the FOMC members will only begin to pronounce this scenario. Therefore, I do not expect the rate to rise by less than 75 basis points. If this assumption is correct, then the demand for the US currency may grow significantly, just as the demand for the euro grew this week before the ECB meeting. What does this mean for wave marking? If wave 3 of the upward section is being built now, then the instrument should resume raising quotes as soon as possible so that the wave takes a five-wave form. In this case, it will be possible to expect the construction of the fifth wave of the ascending section. If this wave is c, then the decline may continue next week, but then the entire downward section of the trend may take an even longer form or start building a new downward section. General conclusions. Based on the analysis, I conclude that the construction of an upward trend section has begun, but it may not last very long. At this time, the instrument can build a new impulse wave, so I advise buying with targets located near the estimated mark of 1.0361, which equates to 261.8% by Fibonacci, by MACD reversals "up." However, by the end of this section of the trend, you also need to be ready now. At the higher wave scale, the wave marking of the descending trend segment becomes noticeably more complicated and lengthens. It can take on almost any kind of length, so I think it's best now to isolate the three and five-wave standard structures from the overall picture and work on them. One of these five waves can be just completed, and a new one has begun its construction.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325696
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The Market Is Waiting For The Most Hawkish Decision From The Bank Of England

InstaForex Analysis InstaForex Analysis 30.10.2022 12:10
For the pound/dollar instrument, the wave marking looks quite complicated at the moment but still does not require any clarification. We have a supposedly completed downward trend segment consisting of five waves a-b-c-d-e. If this is indeed the case, then the construction of a new upward trend section has begun. Its first and second waves are presumably completed, and the third wave is being built, which can be both 3 and C. Since the European wave marking has changed, both wave markings now coincide. As I have already said, the upward structure can be limited to only three waves. In this case, the completion of the third wave may occur at any time, after which the construction of a new downward trend section may begin since the peak of this wave is already above the peak of the first wave. And if this wave is c, and not 3, then it should not be extended; just a small approach above the last peak is enough. Thus, we finally managed to sort out the wave markings, which have recently left many unanswered questions, but there are still huge doubts that the demand for the British will grow for a long time now. The instrument retains the possibility of resuming a downward trend segment. The market is approaching the meeting of the Bank of England on a positive note. The exchange rate of the pound/dollar instrument increased by 55 basis points on October 28. Thus, the construction of the current wave continues, unlike the upward wave for the euro/dollar instrument, where it may already be completed. The British pound approaches the meeting of the Bank of England in a good mood, and the fact that it continues to increase and the euro does not lead me to think that the market is waiting for the most "hawkish" decision from the Bank of England. In my opinion, this may increase the interest rate by at least 75 basis points. At the last meeting, several members of the PEPP committee supported the option with an increase of 75 points, but the number of those who voted for a 50-point increase turned out to be more. Then came the report on inflation in the UK, which again witnessed an increase. Therefore, the Bank of England has no other option but to increase the pace of tightening the PREP. Until Wednesday, the demand for the British dollar may increase, and then it may suffer the fate of the euro, which began to lose demand on the day of the ECB meeting as the market played out the rate increase in advance. But the very next day, the Fed will hold a meeting, at which we should also expect a rate increase of 75 points. We are waiting for a very busy week, and the wave marking may undergo significant changes based on its results. I believe that other actions of both central banks, besides raising rates by 75 points, as everyone expects, are also not excluded. In this case, the instrument's dynamics will depend on which bank and in which direction it will deviate from the value that is now generally accepted. General conclusions. The wave pattern of the pound/dollar instrument assumes the construction of a new upward trend segment. Thus, I advise buying the instrument on the MACD reversals "up" with targets near the estimated mark of 1.1705, equating to 161.8% Fibonacci. You should buy cautiously, as the trend's downward section may resume construction. The picture is similar to the euro/dollar instrument at the higher wave scale. The same ascending wave does not fit the current wave pattern, the same five waves down after it. The downward section of the trend can turn out to be almost any length, but it may already be completed.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325698
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

Trading Signals For The Cable Market (GBP/USD) Is Downtrend

InstaForex Analysis InstaForex Analysis 31.10.2022 08:00
Early in the European session, the British pound is trading around the 21 SMA located at 1.1464. We can see a recovery in the British pound. If it continues to trade above 1.1550, it is likely to reach 4/8 Murray located at 1.1718. Last week, the British pound managed to test the psychological level of 1.1500. After showing how strong this support is, the pound started a technical bounce and is now showing signs of a bullish continuation. On the other hand, market expectations that the Federal Reserve could begin to ease its pace of monetary tightening in the coming months assure investors to turn to risky assets, leaving the dollar aside. In case investors find some proof of such prospects, assets trading against the dollar could resume or recover from downward pressure and we could detect a bullish cycle in the coming days and weeks. This week, the Federal Reserve will increase its interest rate by 0.75% on November 2nd. In the meantime, the markets are looking forward to the Fed's policy decision and we could see some calm in the market until the exact rate hike is known. Then, we could expect a change in GBP/USD's trend or a resumption of the bullish cycle. On the other hand, the Bank of England is expected to increase its interest rate by 0.50% on November 3rd. In case both regulators raise interest rates as expected, a technical correction could occur and GBP/USD could fall towards the 1.1435 level where the 200 EMA is located. As long as the British Pound trades above 1.1564 (21 SMA), we can expect it to continue rising towards 1.1718 and could even hit 5/8 Murray at 1.1962 As long as the British pound trades above 1.1564, we can expect it to continue to rise towards 1.1718 (4/8 Murray) and could even reach 5/8 Murray at 1.1962. Finally, a psychological level of 1.2000 is in the cards. Our trading plan for the next few hours is to buy the British pound above 1.1564 with targets at 1.1718. On the other hand, a close below 1.1550 (21 SMA) on the 4-hour chart will be a signal to sell, with targets at 1.1474 and 1.1357 (200 EMA).     Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298929
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

The Price Of The AUD/USD Pair Has Not Established Itself In The Decline

InstaForex Analysis InstaForex Analysis 31.10.2022 08:04
The Australian dollar reached a range of target levels of 0.6392 and 0.6453 on Friday. Consolidating below the level of 0.6392 opens the target at 0.6255 – the nearest line of the downward price channel. The Marlin Oscillator is also inclined to decrease. On the four-hour chart, the Marlin oscillator is developing in the negative area, which contributes to the bears' initiative. But in order to develop a confident decline, the price must overcome not only the support level of 0.6392, but also the MACD line, around the mark of 0.6368. While the price has not established itself in the decline, an alternative option for growth remains - a breakthrough above 0.6453 opens the target at 1.6514/32, into which the MACD line of the daily scale has been introduced.     Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325722
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

The GBP/USD Price May Get A Strong Downward Momentum

InstaForex Analysis InstaForex Analysis 31.10.2022 08:07
On Friday, the price support of 1.1500 proved to be insurmountable for the pound. Turning away from it, the pound closed the day with a white candle. The Marlin Oscillator is turning down, but the price has enough potential to reach the nearest resistance level of 1.1760. If the dollar rises today, the data on lending in the UK for September should come out worse than forecasts, and forecasts already suggest a decline, then the pound may go under 1.1500, and there the target of 1.1330 will become available - the MACD line of the daily scale. Breaking this support opens the 1.1170 target as the first target in the medium-term decline. If the appetite for risk continues, once a high like 1.1644 has been surpassed, the price will continue to rise to the target resistance of 1.1760. On a four-hour scale, the price is consolidating above the support line of 1.1500. The Marlin Oscillator has approached the zero line, which inclines the price towards a downward scenario. The MACD indicator line is approaching the level of 1.1500, strengthening it. Accordingly, after breaking 1.1500, the price may get a strong downward momentum.     Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325724
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Eurozone Currency (EUR) Is More Likely To Decline

InstaForex Analysis InstaForex Analysis 31.10.2022 08:09
The euro faces the 0.9959 support level on Monday. The target level of 0.9864 is at the bottom, and at the top is the resistance of 1.0051 (high on September 20) and the upper limit of the price channel. In general, the dollar feels strong on the market, but there is also an increased interest in risk in the market, which can pull the euro up (on Friday, the S&P 500 added 2.46%). On the other hand, Friday could also be the last day of such appetites, as the Federal Reserve is expected to raise the rate by 0.75% to 4.00% on Wednesday. Also, weak data on the eurozone may come out today. Retail sales in Germany for September are expected to be -0.3% m/m (decreasing at an annual pace from -4.3% to -4.9%), while euro area GDP for the 3rd quarter may be as low as 0.1%, which will reduce annual growth from 4.1% to 2.1%. The euro is more likely to decline from these positions. After consolidating under 0.9950, we are waiting for the price at 0.9864. On the four-hour chart, the price is consolidating at the support level and on the MACD indicator line. Overcoming supports will be a signal to decline. More precisely, the signal level is Friday's low at 0.9927. The Marlin Oscillator is falling in negative territory.       Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325726
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The Market Will Not Buy Euro (EUR) Due To High Inflation

InstaForex Analysis InstaForex Analysis 31.10.2022 08:13
The EUR/USD currency pair ended the previous week very boring, with a correction to the moving average line. Thus, the new week will begin with a dilemma: will there be a rebound from the moving or overcoming? Recall that formally, a new upward trend is now being maintained, and the pair has already managed to move away from its 20-year lows by 550 points, which has not happened to it for a very long time. However, the upward movement still does not look convincing as the beginning of a new long-term upward trend. Well, the fundamental and geopolitical backgrounds remain on the side of the US dollar. However, recently, there has been an increase in risk sentiment, and the dollar has sunk against many of its competitors. However, the dollar has not fallen in price so much as to give up on it. Thus, we fully assume that the downward trend may still resume. The last round of the upward movement of interest by 60% was due to the ECB meeting, at which the rate was raised by 0.75%. This was known in advance, so traders began to buy the euro currency in advance. However, the Fed will hold a meeting this week, at which the rate will also be increased by 0.75%. Logically, we should now see the growth of the US currency. Theoretically, the market may have already worked out "in advance" all future rate increases in the United States, of which few are left. However, we cannot know for sure whether their market has worked out or not. We have to consider both options, so we assume that the demand for the US currency will continue to grow. Moreover, we should not forget that the geopolitical conflict in Ukraine and the aggravation of relations between Russia and the West have not gone away. From time to time, the parties, it seems, take a short pause, and there is an information calm for several weeks. However, a new escalation, explosions, sabotage, terrorist attacks, or other important events force traders to turn to the US dollar again and again as the safest currency. Inflation in the European Union will continue to grow. Usually, important publications rarely happen on Mondays. However, today is not the case. Data on GDP and inflation will be published in the European Union today. And both of these reports may be as weak as possible. For example, GDP may grow by only 0.2-0.3% in the third quarter. Then it turns out that the growth of the European economy over the past four quarters will be as follows: +0,5%, +0,7%, +0,8%, +0,2-0,3%. We see a minimal increase, so the European economy is walking on the edge of the abyss called recession. The situation is sure to get worse this winter. Inflation report - you can't expect anything optimistic from it either. According to experts, the consumer price index will accelerate to 10.2-10.4%. Of course, it's too early to expect a serious slowdown from this indicator since this report is from October, and at the end of October, the ECB only raised the key rate twice, which is frankly not enough. Therefore, we do not see anything surprising in the fact that inflation will accelerate again. This report may even support the euro, as it will mean that the ECB will have to continue to aggressively raise the rate if it wants to achieve price stability at 2%. However, we do not believe that the market will buy euros due to high inflation. On Wednesday, the index of business activity in the manufacturing sector for October will be published, which is likely to fall even more and amount to 46.6. On Thursday, the unemployment rate will likely remain unchanged at 6.6%. Well, on Friday – the speech of ECB President Christine Lagarde and the index of business activity in the service sector. We do not expect any new information from Lagarde or a change in her rhetoric. Just last week, she gave a speech, but she didn't say anything super important. Therefore, the key events of the week for the euro currency are scheduled for Monday and Wednesday, when the results of the Fed meeting will be announced. The average volatility of the euro/dollar currency pair over the last five trading days as of October 31 is 115 points and is characterized as "high." Thus, on Monday, we expect the pair to move between 0.9850 and 1.0080 levels. The upward reversal of the Heiken Ashi indicator signals the resumption of the upward movement. Nearest support levels: S1 – 0.9888 S2 – 0.9766 S3 – 0.9644 Nearest resistance levels: R1 – 1.0010 R2 – 1.0132 R3 – 1.0254 Trading Recommendations: The EUR/USD pair continues to be located above the moving average. Thus, it is necessary to consider long positions with targets of 1.0010 and 1.0080 in case of a reversal of the Heiken Ashi indicator up or a rebound of the price from the moving. Sales will become relevant no earlier than fixing the price below the moving average with goals of 0.9850 and 0.9766. Explanations of the illustrations: Linear regression channels – help to determine the current trend. The trend is strong if both are directed in the same direction. Moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which you should trade now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325718
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

There Will Be A Crazy Time For The British Pound To US Dollar (GBP/USD) Pair

InstaForex Analysis InstaForex Analysis 31.10.2022 08:15
The GBP/USD currency pair continued to grow during the last trading week, although it had no good reasons for this. Recall that last Monday, it became known about the appointment of a new British Prime Minister, Rishi Sunak. We do not believe that the very fact of the change of Prime Minister was so optimistic for the British pound. However, we have already said earlier that the pound has more chances to grow than the euro. Despite some randomness of its last collapse by 1000 points and subsequent recovery by 1100 points, it still collapsed to absolute lows in its entire history. It then quickly moved away from them, indicating a likely end of the global downward trend. After that, the pound grew with and without reason, and last week it overtook the euro, which had reasons for growth. However, this week there will be a crazy fundamental background for the pound/dollar pair. On Wednesday – the Fed meeting, and on Thursday – the meeting of the Bank of England. Both central banks are 100% likely to raise their key rates, so there is no doubt that a very volatile week awaits us. Unfortunately, it is impossible to predict in advance where the currency pair will move. The market can start working out the results of both meetings in advance; the general mood of the market is of great importance. In general, we would not guess the answer to this question. Formally, the pound sterling retains the chances of a new fall. On the 24-hour TF, the key Senkou Span B line has not yet been overcome, so there may be a rebound from it with the resumption of the fall. Wednesday, Thursday, and Friday will force traders to trade actively. Next week will start for the British pound with an insignificant index of business activity in the manufacturing sector for October. According to experts, the indicator will fall to 45.8 points, below the key mark of 50.0. On Thursday, the index of business activity in the service sector and the meeting of the Bank of England. On Friday, the index of business activity in the construction sector. Naturally, the main attention of traders will be focused on the Bank of England, which can raise its rate by 0.75%. In the US, in addition to the Fed meeting, with which absolutely everything is already clear, business activity indices in all areas, including important ISM indices, will be published. ADP report on changes in the number of employees in the private sector. Well, on Friday, if someone decides to take a break after the meetings of the Fed and the BA, they will not be able to do this since Nonfarmes, the unemployment rate, and wages will be published on this day. Therefore, we are waiting for a crazy week, and hardly anyone can say where the pound will be by the end of it. The unemployment rate in the United States is very important now, as it indicates the onset of the "right recession." Recall that the Fed does not consider a slowdown in economic growth a recession if increased unemployment and layoffs of Americans do not accompany it. Thus, reports on unemployment and the labor market are very important. The US economy showed solid growth in the third quarter. Unemployment will either remain at 3.5% or rise to 3.6%. The number of new jobs outside the agricultural sector can range from 200 to 240 thousand, which, from our point of view, is a normal value. Therefore, if it were not for the BA meeting, we would say that the week should turn out to be "absolutely American." However, the market can interpret all the data, so the pair can "fly" from side to side thoroughly. From a technical point of view, it will be possible to expect a fall not earlier than fixing the price below the moving average. This may happen as early as Monday or Tuesday, and at this point, we will understand how the market is set up for upcoming events. The average volatility of the GBP/USD pair over the last five trading days is 161 points. For the pound/dollar pair, this value is "very high." On Monday, October 31, thus, we expect movement inside the channel, limited by the levels of 1.1453 and 1.1775. The reversal of the Heiken Ashi indicator downwards signals a new round of downward correction. Nearest support levels: S1 – 1.1475 S2 – 1.1353 S3 – 1.1230 Nearest resistance levels: R1 – 1.1597 R2 – 1.1719 R3 – 1.1841 Trading Recommendations: The GBP/USD pair remains at its local highs in the 4-hour timeframe. Therefore, at the moment, you should stay in buy orders with targets of 1.1719 and 1.1775 until the Heiken Ashi indicator turns down. Open sell orders should be fixed below the moving average with targets of 1.1353 and 1.1230. Explanations of the illustrations: Linear regression channels – help to determine the current trend. The trend is strong if both are directed in the same direction. Moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which you should trade now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325720
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

The Price Of The GBP/USD Pair Is Located Above All Important Lines

InstaForex Analysis InstaForex Analysis 31.10.2022 08:28
Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair also tried to correct on Friday, but failed to even reach the Kijun-sen line. The pound retains excellent chances for continuing the upward movement, as we have said more than once. Technical analysis speaks in favor of the pound now. Its rapid and powerful growth from the lows of the year suggests that we are dealing not with a banal upward correction, but with a new trend. Friday showed us that the market is ready to buy the pound, however, as in the case of the euro, this week the mood of traders can change dramatically. If the Federal Reserve meeting will be interesting for the euro, then in the pound's case, it has the Bank of England meeting. And we also have the NonFarm Payrolls report to look forward to on Friday, so this week almost every day can bring surprise and extra volatility. The British currency on the 24-hour timeframe has not yet managed to overcome the Senkou Span B line, but if anyone is able to continue to grow now, it is the pound. The situation with Friday's trading signals on the 5-minute timeframe was as simple as possible. The price never approached any level or line for the entire day, therefore, not a single signal was formed. It was not necessary to open positions, and this week you need to be cautious, as strong movements and sharp price reversals are possible as a result of a strong fundamental background. COT report: The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group opened 3,200 long positions and closed 200 short positions. Thus, the net position of non-commercial traders increased by 3,400, which is very small for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 43,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? As for the total number of open longs and shorts, the bulls have an advantage of 18,000 here. But, as we can see, this indicator does not help the pound too much either. We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 31. Crazy start of the week for the euro. Overview of the GBP/USD pair. October 31. Crazy week for the British pound! Outlook and trading signals for EUR/USD on October 31. Analysis of market situation. Analysis of GBP/USD, 1-hour chart The pound/dollar pair maintains an upward trend on the hourly timeframe, which so far looks quite convincing. The price is located above all important lines, and the upward movement is supported by the trend line. However, there are so many important events and reports this week that it is impossible to predict where the pair will end up by the end of the week. We do not rule out the dollar's growth, but it needs to be very strong to break the current trend. On October 31, trading could be performed at the following levels: 1.1212, 1.1354, 1.1486, 1.1649, 1.1760, 1.1874. Senkou Span B (1.1277) and Kijun-sen (1.1450) lines can also give signals if the price rebounds or breaks these levels. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. No major events are scheduled for Monday in the UK and the US, so traders will have nothing to react to today. But still, the market may start to move very volatilely today, as two meetings of central banks may prompt it to react in advance. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325732
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

Forecast For Movement Of The Euro To Japanese Yen (EUR/JPY) Pair

InstaForex Analysis InstaForex Analysis 31.10.2022 08:30
The EUR/JPY pair failed to make a new higher high and now is trading at 147.17 below 147.67 today's high. It is moving sideways in the short term, that's why we have to wait for a fresh trading signal before taking action. Fundamentally, the Japanese economic data came in mixed. Retail Sales rose by 4.5% versus the 4.0% expected, Prelim Industrial Production registered a 1.6% drop compared to the 0.8% drop estimated, the Consumer Confidence dropped from 30.8 points to 29.9 points far below 31.0 forecasts, while Housing Starts registered a 1.0% growth less versus 2.6% expected. Later, German Retail Sales may report a 0.5% drop, Euro-zone CPi Flash Estimate may register a 9.9% growth, Core CPI Flash Estimate could increase by 4.8%, while the Prelim Flash GDP is expected to register a 0.1% growth. EUR/JPY Trading In The Red! As you can see on the H1 chart, the rate failed to test and retest the uptrend line signaling upside pressure. It's trapped between 145.63 and 147.72 levels. The bias remains bullish as long as it stays above the uptrend line. Now, it is almost reaching the 147.72 former high. This level stands as resistance. 148.40 is seen as resistance as well. After its strong rally post the BOJ, we cannot exclude a temporary retreat. EUR/JPY Forecast! The EUR/JPY could continue to move sideways as long as the 147.72 resistance remains intact. Coming back to test and retest the uptrend line could announce a new bullish momentum. A new buying opportunity could appear if the rate makes a new higher high, a valid breakout through 148.40 activates further growth.   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298955
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Outlook For The Movement Of The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 31.10.2022 08:34
EUR/USD reached a high of 1.00937 which makes the second rally from 0.9632 to 1.00937 equal in length to the first rally from 0.9536 to 0.99997. Equality between two minor rallies like this could imply that we have only seen a corrective rally. So, one final decline to test the former low at 0.9536 or even slightly below will follow. That means we are in limbo at this point. We need to see a clear break above the minor resistance at 1.00954 to remove the possibility of a final retest of the 0.9536 low. However, a break above minor resistance at 1.00954 will confirm that we have seen a long-term low and call for more upside pressure towards 1.0198 and much higher in the longer term.   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298957
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The NZD/USD Pair Has Potential For Upside Movement

InstaForex Analysis InstaForex Analysis 31.10.2022 08:36
The NZD/USD pair is trading in the green at 0.5824 at the time of writing. In the short term, it's trapped within a range pattern, so only escaping from this formation could bring new trading opportunities. It's fighting hard to stay higher and resume its rebound as the AUD/USD pair increased a little as well. The Australian Retail Sales came in better than expected, Private Sector Credit came in line with expectations, while MI Inflation Gauge rose by 0.4%. The US is to release the Chicago PMI and the Loan Officer Survey but I don't think that the economic data could have an impact. Tomorrow, the RBA is expected to increase the Cash rate from 2.60% to 2.85%, while the FOMC should increase the Federal Funds rate by 75bps again on Wednesday. The fundamentals could drive the price during the week. The US ISM Manufacturing PMI and JOLTS Job Openings and the New Zealand Unemployment Rate and Employment Change represent high-impact events tomorrow as well. NZD/USD Strong Upside Pressure! As you can see on the H1 chart, the pair continues to move sideways between 0.5787 and 0.5870 levels. Dropping below the ascending pitchfork's median line (ML) after failing to make a new higher high signaled exhausted buyers. Now, it could challenge the median line which stands as a dynamic resistance. Staying below it, NZD/USD could drop deeper. NZD/USD Forecast! A new higher high, jumping and closing above 0.5870 activates further growth and brings new longs in NZD/USD. Registering only false breakouts through the median line (ML) and making a new lower low, a valid breakdown below the pivot point of 0.5780 announces a deeper drop and helps the sellers to go short.   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298959
Preparation Of A Common Currency For South America, Gold Trades Softer

Victory In The Elections Of Luiz Inácio Lula Da Silva | Smoother Crude Oil Trade

Saxo Bank Saxo Bank 31.10.2022 09:13
Summary:  Equity markets closed strongly on Friday, even as the narrative that has purportedly driven strength at times in the equity market of late, the hope that central banks and especially the Fed are set for a dovish shift, failed to offer any fresh support on Friday. After a fresh article from “Fed whisperer” Nick Timiraos from the Wall Street Journal suggested that the Fed fears that it may have to keep the policy rate higher for longer, the event risk of the week will be the FOMC meeting this Wednesday, though other important central bank meetings are in the mix, including a Bank of England meeting on Thursday.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Strong Friday close in the S&P 500 futures reaching the highest closing price for the up cycle that began earlier this month. S&P 500 futures are now up 8.7% from their lowest close on 12 October. This morning the index futures are trading lower hovering around the 3,898 level which is just below the 100-day moving average. This week is all about the FOMC decision and the ongoing US earnings. Euro STOXX 50 (EU50.I) European equities had a less spectacular performance on Friday and the impressive performance in US equities has not positively impacted STOXX 50 futures this morning trading lower around the 3,620 level. European equities have done better than US equities over the past month as the US technology sector has had weak Q3 earnings. FX: USD mixed as Wednesday’s FOMC meeting eyed Mixed developments for the US dollar on Friday, with the wild rally in equity markets a headwind, while the sharp, partial unwind of the anticipated dovish shift from the Fed at this Wednesday’s FOMC meeting offered some offsetting support as yields perked up slightly after testing key levels last week (see more below in What are we watching next?). After the brief foray above parity and nearly to 1.0100, EURUSD has been tamed back well below that level, while GBPUSD remains relatively bid and well clear of the pivotal level of 1.1500 ahead of the key event risk of the week for sterling, the BoE meeting Thursday (preview below). Elsewhere, USDJPY is coiling within the 145.00-150.00 range, while USDCNH has rebounded sharply and nearly back to the cycle highs. Broad CNH volatility is worth watching for contagion across asset markets. Wheat futures gap higher on Ukraine supply worries Wheat futures (ZWZ2) in Chicago surged as much as 7.7% to $8.93 on the opening after Russia over the weekend pulled out of the UN brokered black sea grain deal (see below). Since the UN and Turkey supported grain corridor opened three months ago Ukraine has shipped more than 9 million tons of foodstuff and it has helped ease tight world supplies and control global food costs. Money managers have been wrongfooted by the latest developments after raising bearish bets on Chicago wheat futures by 63% to a 28-month high in the week to October 25. Food exports from Ukraine also includes corn and sunflower oil and reduced supply of those has lifted corn futures (ZCZ2) in Chicago by 2.3% to trade near resistance at $7/bu and soybean oil futures by 2%. Gold (XAUUSD) Gold trades nervously within a narrowing range ahead of Wednesday’s FOMC meeting where another bumper rate hike is expected. What may follow, however, has caused a great deal of volatility across markets with traders looking for guidance regarding the pace and strength of future rate hikes. Gold is heading for its seventh straight month of declines, the longest losing streak since at least the late 1960’s (Bloomberg) while bullion-backed ETF holdings have dropped to a 30-month low and money managers hold a net short near the highest in four years. All developments supporting an eventual recovery, but not until we reach peak hawkishness from where we could see yields and the dollar soften. As a minimum gold needs to break above $1730 before an end to the month-long downtrend can be called. Crude oil (CLZ2 & LCOZ2) Crude oil trades softer therefore trimming a monthly gain driven by already tight markets and OPEC+’s planned supply cuts from next month. The latest weakness once again being driven by weak economic data from China and a stronger dollar ahead of Wednesday’s FOMC meeting after the famous FOMC whisperer at WSJ in an article speculated the Fed will need to keep rates higher for longer (see below). In addition to OPEC+ production cuts, the market will also have to gauge the impact of EU planned sanctions on Russian oil flows in December, a development that could be a “big hit” to already tight fuel supply, especially in Europe according to Eni’s CEO. US treasuries (TLT, IEF) The low water mark for the US 10-year treasury yield benchmark was near 3.90%, a key pivot level this week as we await the FOMC meeting and how the Fed’s guides for its future policy moves now that it is reaching an important inflection point in which the market expects it is likely the Fed will begin to hike in smaller increments as soon as December. It’s a delicate communication task to guide for a downshift without appearing too dovish. The important US economic data this week includes Thursday’s October ISM Services and especially the Friday October payrolls and earnings data for October. The October CPI is up next week. What is going on? Russia exits Ukraine grain deal Russia suspended its participation in the Ukraine grain export deal after a swarm of drones targeted at least one Russian warship from the Black Sea navy. This will block the passage of millions of tonnes of grain via southern Ukraine and may lead to a fresh jump in prices. The report is especially catastrophic as it comes together with massive wheat crop damage with the US crop belt seeing La Nina for its third consecutive year. Ukraine’s infrastructure ministry said 218 ships had been immediately affected. This included 95 that had already left its ports and were waiting at the inspection site before unloading, 101 waiting for inspection before collecting Ukrainian grain, and a further 22 that were loaded up and ready to set sail. “Putin needs leverage as things go south for him on the battlefields in Ukraine, so the threat of global food crisis needs to be put back in the Russian toolbox of coercion and blackmail,” wrote Alexander Gabuev, senior fellow at the Carnegie Endowment for International Peace via the FT. Lula’s comeback in Brazilian presidential elections Luiz Inácio Lula da Silva claimed a victory in Brazil’s presidential election on Sunday, defeating incumbent rightwing leader Jair Bolsonaro by less than two percentage points and setting the stage for a return to leftwing governance in Latin America’s largest nation. Brazilian ETFs including such as EWZ:arcx, IBZL:xams, RIO:xpar, BRZU:arcx, or BRQ:arcx may be the ones to watch, as will be the BRL later in the day. BRL has been the best performer in the EM basket (excluding Russian rouble) against the USD so far this year. Lack of economic plans from Lula may make a case for market outperformance somewhat weaker, however. What are we watching next? Is Fed concerned that market is expecting too much of a dovish shift at FOMC meeting this Wednesday? Nick Timiraos, who is seen as a kind of “Fed whisperer” and possible conduit of Fed communication with the market, had sent shivers across markets last week with a report suggesting that the November FOMC meeting may be used to signal a downshift to smaller rate hikes. This saw equity markets extending gains while the USD was on the backfoot last week, but now he has come out with another article: Cash-rich Consumers Could Mean Higher Interest Rates for Longer, saying that higher consumers savings buffers and a low level of interest expenses could require that the Federal Reserve raise rates higher and keep them there for longer due to less sensitivity to interest rates than was seen likely previously. The December 2023 EuroDollar contract had rallied as much as 50 basis points off the lows recently, correcting some 15 basis points Friday and slipping a bit lower to start this week as the market is unsure of how aggressively it should lean for dovish guidance. Big week ahead for central bank meetings The general theme is “downshifting” of guidance (As noted in the FOMC comments above). The FOMC meets Wednesday and is expected to hike 75 basis points with guidance indicating that the pace of hikes may start to slow as soon as at the December meeting (if likely with no commitment in either direction). First up, however, is tonight’s RBA meeting, where Governor Philip Lowe and company are expected to only hike 25 basis points tonight after a string of 50 basis point moves as the RBS is concerned about the impact of further tightening on consumption and mortgage payments, though a small minority still expect another 50 basis points moves. On Thursday, we have a pivotal Bank of England meeting, the first after the violent market swings during the uproar over former PM Truss’ fiscally risky policy moves. With calming markets and the new Sunak government rolling out far tighter budget plans, BoE expectations have fallen like a stone, but with the market still expecting the first ever 75 basis point move for this cycle. The BoE has s history of bad communication with the market – and an austere budget brings forward and increases the severity of the coming recession. Finally, Norges Bank also meets Thursday and is expected to hike 25 basis points, seemingly in no hurry despite a very weak currency and high inflation readings, and even having guided that it soon sees an end to the tightening cycle. Earnings to watch Today’s US earnings focus is Stryker which is expected to see its earnings growth increase to 7% y/y with operating margin still under pressure. Otherwise, as we look ahead, earnings tomorrow from Toyota, Sony, BP, AMD, and Airbnb will have the market’s focus. Monday: Daiichi Sankyo, Stryker Tuesday: Toyota Motor, Sony Group, Mondelez, AMD, Airbnb, Eli Lilly, Pfizer, BP Wednesday: KDDI, Novo Nordisk, GSK, Booking, Qualcomm, CVS Health, Estee Lauder, Humana Thursday: Cigna, Amgen, PayPal, Starbucks, EOG Resources, ConocoPhillips, Regeneron Pharmaceuticals, Zoetis, Canadian Natural Resources, DBS Group Friday: Duke Energy, Enbridge Economic calendar highlights for today (times GMT) 0900 – Switzerland SNB Weekly Sight Deposits 0930 – UK Se. Mortgage Approvals 1000 – Eurozone Oct. Flash CPI estimate 1000 – Eurozone Q3 GDP estimate 1345 – US Oct. Chicago PMI 1430 – US Oct. Dallas Fed Manufacturing Activity 1500 – ECB Chief Economist Lane to speak 0145 – China Oct. Caixin Manufacturing PMI 0330 – Australia RBA Cash Target Announcement Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-31-2022-31102022
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

After Positive Data From Japan, The GBP/JPY Pair Has Fall

TeleTrade Comments TeleTrade Comments 31.10.2022 09:14
GBP/JPY has dropped sharply from 172.00 amid mixed responses from risk impulse. Upbeat Japan’s Retail Sales data has strengthened yen. The BOE may hike its interest rates by 75 bps to 3%. The GBP/JPY pair has witnessed a steep fall after failing to sustain above 172.00 in the European session. The cross sensed selling pressure after Japan’s Bureau of Statistics reported a significant increase in Retail Sales data. Meanwhile, the market impulse is delivering mixed responses as anxiety among the market participants is accelerating ahead of the monetary policies by the Bank of England (BOE), the Federal Reserve (Fed), and the Reserve Bank of Australia (RBA). The release of the upbeat Retail Sales data has strengthened yen. The monthly and annual Retail Trade have accelerated to 1.1% and 4.5% vs. the projections of 0.6% and 4.1% respectively. The Larger Retail Sales have soared to 4.1% against the estimates of 3.6%. Apart from that, annual Industrial Production has climbed to 9.8% in comparison to the consensus of 8.7%. On the UK front, investors are awaiting Thursday’s interest rate decision by the BOE. Analysts at Rabobank see a 75 bps rate hike to 3.00% from 2.25%.  Earlier, analysts were expecting a rate hike of a full percent after the disaster of the mini-budget under the leadership of former UK PM Liz Truss and Chancellor Kwasi Kwarteng. However, novel leadership formation has infused optimism in scaled-down rate hike projections. They explain that it would still be the largest rate hike of this cycle. On policy guidance, analysts expect rates to peak at 4.75%. Meanwhile, minutes from Llyods Bank PLC’s business barometer claim that business confidence has dropped to pre-pandemic levels. The UK Consumer Confidence fell 1 point to 15% in the October survey, as reported by Bloomberg. However, the majority of employers are expecting that staff will increase for the first time in five months.  
Navigating Financial Markets: Insights on Central Bank Decisions and Currency Quotes

Central Bank of the Republic of Türkiye’s (CBRT) Fear Support The USD/TRY Pair

TeleTrade Comments TeleTrade Comments 31.10.2022 09:19
USD/TRY picks up bids to refresh all-time high, snaps two-day losing streak. CBRT’s warning to banks over FX transactions, policy divergence with the Fed keeps buyers hopeful. Risk-negative catalysts also strengthen bullish bias even as pre-Fed anxiety tests upside moves. USD/TRY renews record top near 18.65 during early Monday in Europe, around 18.60 at the latest, as the US dollar cheers broad risk-aversion ahead of the key data/events. That said, the Central Bank of the Republic of Türkiye’s (CBRT) fear and Turkish support for the grain deal also seem to propel the Turkish lira (TRY) pair. US Dollar Index (DXY) adds 0.20% intraday while printing the first gains on a day in three. In doing so, the greenback’s gauge versus the six major currencies benefit from the hawkish Fed bets, especially after Friday’s upbeat prints of the Fed’s preferred inflation gauge, namely the US Core Personal Consumption Expenditures (PCE) Price Index rose to 5.1% YoY for September versus 5.2% expected and 4.9% prior. However, the fifth quarterly fall in US private consumption raised fears of the US Federal Reserve’s (Fed) slower rate hike starting in December, which in turn tests DXY bulls. On the other hand, Turkey's central bank warned local banks about taking "necessary measures" about conducting forex transactions with foreign banks during night hours, a letter sent to lenders and seen by Reuters showed on Friday. Elsewhere, Macau’s lockdown of a casino resort and fears emanating from Russia gain major attention during a sluggish session and propel the USD/TRY prices. “Russia, which invaded Ukraine on Feb. 24, halted its role in the Black Sea deal on Saturday for an ‘indefinite term’ because it could say it could not ‘guarantee the safety of civilian ships’ traveling under the pact after an attack on its Black Sea fleet,” reported Reuters. It should be noted that the US 10-year Treasury yields seesaw near 4.00% after snapping the 10-week uptrend while the US equity future prints mild losses even after Dow Jones braces for the biggest monthly jump since 1976. Looking forward, the second-tier US activity numbers and the aforementioned risk catalysts could weigh on the USD/TRY prices. Even so, the Fed’s rejection to bow down keeps the gold bears hopeful. Technical analysis A two-week-old ascending support line, near 18.50 by the press time, restricts the short-term USD/TRY downside. Meanwhile, the 19.00 round figure will precede the 20.00 psychological magnet to lure bulls. That said, overbought RSI (14) and a month-old trading range suggests that the buyers are running out of steam
Analysis Of Movement Of The Canadian Dollar To Swiss Franc Pair (CAD/CHF)

The Swiss Currency Pair (USD/CHF) Is Profit-Oriented

TeleTrade Comments TeleTrade Comments 31.10.2022 09:27
USD/CHF grinds higher during a three-day uptrend, eyes third consecutive monthly gain. Convergence of 50-SMA, 100-SMA challenge buyers of late. MACD, RSI conditions suggest gradual advances toward the yearly low. USD/CHF buyers jostle with the 0.9975-80 hurdle during the initial hour of Monday morning in Europe. In doing so, the Swiss currency (CHF) pair braces for the third monthly gain as it pokes a joint of the 100-SMA and the 50-SMA. Given the firmer RSI (14) and the bullish MACD signals, not to forget the pair’s sustained trading beyond a three-day-old ascending trend line, USD/CHF prices are likely to remain firmer. However, a clear upside break of the 0.9980 hurdle appears necessary for the buyers to meet the 1.0000 psychological magnet. Following that, multiple hurdles around 1.0080 could probe the USD/CHF pair’s upside ahead of challenging the yearly top of 1.0148. In a case where the quote remains firmer past 1.0150, the April 2019 peak surrounding 1.0240 will gain the market’s attention. Meanwhile, the pullback move remains elusive unless the quote stays beyond the aforementioned support line from Wednesday, close to 0.9920 at the latest. Should the USD/CHF bears manage to conquer the 0.9920 support, the 0.9900 threshold and the monthly low near 0.9840 will be on their radar. Overall, USD/CHF is likely to remain firmer but the upside room appears limited. USD/CHF: Four-hour chart Trend: Further upside expected
Softer New Jobs Reading Would Likely Weigh On The Canadian Dollar

A Key Factor Has Emerged That Could Weaken The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 31.10.2022 09:47
USD/CAD gains traction for the third straight day and is supported by a combination of factors. Sliding crude oil prices undermines the loonie and acts as a tailwind amid modest USD strength. The upside seems limited as the focus remains glued to the FOMC policy decision on Wednesday. The USD/CAD pair attracts some buying for the third successive day on Monday and maintains its bid tone through the early European session. The pair is currently placed around the 1.3635 region and might now be looking to build on its bounce from levels just below the 1.3500 psychological mark, or over a one-month low touched last Thursday. Crude oil prices come under some selling pressure on Monday after weaker-than-expected Chinese business activity data revives fears about a deeper global economic downturn and slowing fuel demand. This, in turn, undermines the commodity-linked loonie and is seen as a key factor acting as a tailwind for the USD/CAD pair amid a modest US dollar strength. Furthermore, the disappointing Chinese economic data temper investors' appetite for riskier assets, which is evident from a softer tone around the equity markets. Apart from this, elevated US Treasury bond yields, bolstered by expectations for another supersized 75 bps hike by the Federal Reserve, lends additional support to the safe-haven greenback. That said, speculations that the Fed will soften its hawkish tone - amid signs of a slowdown in the US economy - might hold back the USD bulls from placing aggressive bets. Hence, investors might prefer to move to the sidelines ahead of the key central bank event risk - the outcome of the highly-anticipated two-day FOMC policy meeting on Wednesday. Adding to this, expectations of tight supply should limit any deeper losses for crude oil prices and further contribute to capping gains for the USD/CAD pair. In the absence of any major market-moving economic releases, either from the US or Canada, the mixed fundamental backdrop warrants some caution before positioning for any further intraday gains.
The Markets Still Hope That The Fed May Consider Softer Decision

The Markets Still Hope That The Fed May Consider Softer Decision

InstaForex Analysis InstaForex Analysis 31.10.2022 09:52
The coming week will be unusually rich in economic statistics and various events that will have a significant impact on the markets. A number of important economic data will be released this week, where the values of production indicators both in Europe, China and the USA will play a significant role. The numbers of indexes of business activity in the manufacturing sectors will have to indicate what impact the processes of raising interest rates have on national economies, of course, here we mean the countries of the so-called West. The decline in indicators will demonstrate a steady trend towards recession in the Western countries with the expected result - continued increase in interest rates by central banks and, as a result, continued pressure on demand in the stock markets and the dollar. Also, new data on consumer inflation in the euro area will be published today, which, as predicted, will again show its increase in annual terms from 9.9% to 10.2%. If the reports do not disappoint, then the growth of inflation in the euro area will again bring to life the topic of further continuation of the aggressive increase in European Central Bank interest rates, however, which we strongly doubt, since there are noticeable discrepancies between the words of the central bank's representatives and real actions. This allows us to believe that the euro is unlikely to receive significant support in the near future. Monetary policy meetings of the Reserve Bank of Australia and the Bank of England will be held this week. Interest rates are expected to rise by 0.25% in Australia and by 0.75% in Britain, which, in our opinion, is unlikely to noticeably change the positioning of the Australian dollar and sterling against the US currency if the Federal Reserve, following the meeting on Tuesday, makes it clear that the growth rate rates at 0.75% can be maintained until the start of the new year. Only a softening of the US central bank's position regarding the prospective aggressive continuation of raising rates can significantly change the situation on the markets and lead to a global reversal in the stock markets and a weakening of the dollar. And the icing on the cake will be the release on Wednesday and Friday of new data from the US labor market. If they show the preservation of a high rate of creation of new jobs, this may allow the Fed to continue actively raising rates, which will become a new basis for the dollar's growth. What can we expect in the markets today? We believe that trading in Europe, according to the dynamics of futures for stock indices, will start in the red, but a lot will depend on the positioning of American investors. If trading in the United States starts positive, this may put pressure on the dollar and support its local weakening, as the markets still hope that the Fed at the November meeting may consider reducing the rate growth rate in the near future. Forecast of the day: EURUSD The pair is trading in a very tight range of 0.9925-0.9970. If the eurozone inflation report turns out to be lower than expected or in line with the forecast, the pair may break out of this range and fall to 0.9820, at the same time, if inflation shows more growth, this will cause an expectation of a continuation of the ECB's aggressive rate hike and may cause the pair to rise to 1.0080. EURJPY The pair is moving in the range of 14550-147.65. A strong increase in inflation in the euro area may trigger the likelihood of continued aggressive rate hikes by the ECB, which will support the euro against the yen. In this case, a rise above 147.65 could lead to a rise of the pair to 148.65.       Relevance up to 08:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325759
Navigating Disclosure and Standardisation: Policy Amidst Turbulence in Sustainable Finance Market

Economists' Opinion On Situation In Brazil And The Brazilian Real (BRL)

TeleTrade Comments TeleTrade Comments 31.10.2022 10:04
In the end, former President Lula only gained a slim majority over incumbent Bolsonaro. The Brazilian real has stood up surprisingly well compared with other Emerging Market currencies this year but economists at Commerzbank believe that BRL has only limited appreciation potential for the time being. The real is likely to have only limited appreciation potential “In addition to continued inflation risks one reason why the central bank has not been in a rush with rate cuts is likely to have been the political uncertainty. So far both candidates have only commented about possible fiscal plans in a very vague manner. For that reason, the real is likely to react very cautiously to Lula’s victory.” “Some fear though that under Lula important fiscal reforms will not be implemented. Until details on that emerge, the real is likely to have only limited appreciation potential.”
The Commodities Feed: Stronger Oil Prices Boost US Oil Production and Supply

Escalating Tensions With Russia | This Week Focus On The Fed, RBA And The Bank Of England Decisions

Swissquote Bank Swissquote Bank 31.10.2022 10:09
Despite the broadly disappointing Big Tech earnings, and the heavy selloff we saw in most Big Tech stocks, US equities ended last week on a positive note, thanks to record profits from US Big Oil companies, and a much better than expected reaction to Apple results. American crude consolidates above the 50-DMA, but failed to clear the $90 offers last week, as recession fears prevent a further rally from developing. Fed, RBA & Bank of England This week, attention shifts to Federal Reserve (Fed), expected to raise rates by another 75bp. The Reserve Bank of Australia (RBA) and the Bank of England (BoE) are also expected to hike by 25bp, and 75bp respectively.Elsewhere, news is not great. Russia decided to pull out of a deal to allow Ukrainian crop shipments; wheat futures jumped more than 5% this morning. China China’s manufacturing and services PMI slipped below 50, to the contraction zone in October due to Covid restrictions in major cities, and many cities are still dealing with lockdown measures, and Xi Jinping made sure to emphasize that he will continue to fight… the virus. Brazil In Brazil, Lula won the election bearing Bolsonaro by less than 2 percentage points. The latter said he refuses the defeat, which means that we will see some more political uncertainty in Brazil in the coming weeks. Watch the full episode to find out more! 0:00 Intro 0:24 Big Oil earns Big 4:07 Big Tech disappoints 5:41 Don’t look at Powell to make you feel better 7:19 Russia scraps wheat deal, China slows, Brazil elections 8:32 Watch Fed, BoE, RBA decisions, US jobs & EZ inflation 9:30 …and some more earnings… Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #ExxonMobil #Chevron #Shell #BP #earnings #crudeoil #natural #gas #Fed #RBA #BoE #monetary #policy #decision #USD #GBP #AUD #EUR #ECB #inflation #wheat #futures #Ukraine #Russia #war #Brazil #elections #Lula #Bolsonaro #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Hang Seng Index Plummets -2% Amid Weak China Data, Short-Term Trend Intact

Major Currency Pairs (EUR/USD And GBP/USD) Are Now Subject To A Future Fed Decision

InstaForex Analysis InstaForex Analysis 31.10.2022 11:02
According to a preliminary estimate released by the Bureau of Economic Analysis, U.S. real GDP increased at an annualized rate of 2.6 percent in the third quarter of 2022, well above expectations. The main contribution to GDP growth was from data on foreign trade, other indicators turned out to be noticeably less positive. Take note that the US stock indexes were impressed by the strong reporting of companies, the S&P 500 index rose 2.5%, exceeding the cumulative fall of 1.35% over the previous two days, ending the week up 3.95%, which was the second consecutive weekly gain. In general, the US economy looks quite confident, which gives reason to expect that the Federal Reserve will not give clear signals about the slowdown in tightening, and the dollar may well win back the positive data, continuing to strengthen. In any case, the probability of a rate hike by the same 0.7% in December remains high. European stock indices showed mixed dynamics, high inflation and the threat of an energy crisis are still the main negative factors for the euro, which will prevent it from resuming growth. EURUSD As expected, the European Central bank raised interest rates by 0.75%, but did not give any signal that the pace of rate hikes will continue to be high. Most likely, the ECB is inclined to slow down the pace of rate hikes, as it noted "substantial progress" in the revision of monetary policy, plans for quantitative tightening will be determined at the December meeting, which came as a surprise to markets that were waiting for specifics. The insufficiently hawkish stance of the ECB provoked a decline in global bond yields, European ones suffered the most, and amid accelerating inflation. Germany's overall consumer price index reached an annualized rate of 11.6% in October, well above the 10.9% expected by economists, while Italy (11.9% vs. 9.5% experience) and France (7.1 % vs 6.5% experience) also exceeded expectations. The net long position on the euro increased during the reporting week by 3.4 billion to 9.3 billion, this is a very strong growth, indicating an increase in the positive relative to the euro. However, despite such a strong change, the settlement price turned down, the reason being that even the apparently hawkish decision of the ECB did not lead to an increase in European bond yields, and the yield differential between European and US bonds did not decrease, but even slightly increased. This discrepancy between the long-term positioning in the futures and options market, which is reflected in the CFTC report, and current yields does not yet allow us to break the trend towards the weakening of the euro. EURUSD, as we suggested a week earlier, made a successful attempt to corrective growth, it passed the resistance of 0.9920/40, however, short positions resumed in the area above parity. We assume that the euro will be under slight pressure ahead of the Federal Reserve meeting, growth above the local high of 1.0092 is unlikely, trading will go in a sideways range with a downward trend. The main target is the support zone of 0.9820/40. This scenario can be canceled if the Fed shows more pronounced weakness on Wednesday than the markets have been laying down so far. GBPUSD The Bank of England will hold a regular meeting on Thursday, and the rate is expected to rise by 0.75%. The government change has calmed the markets, yields have pulled back, and now the focus will be on inflation forecasts, as they directly affect the position of the BoE. The net short position on the pound slightly decreased during the reporting week by 0.2 billion to -3.4 billion, positioning, unlike the euro, remains confidently bearish. The yield differential widened sharply in favor of the dollar, resulting in a rapid decline in the settlement price. The pound on the wave of rumors about the easing of the Fed's position still went higher than we expected, and reached the upper limit of the long-term bearish channel. We assume that a high will be formed here, an attempt to test the strength of the local high of 1.1735 is not ruled out, but a downward reversal from current levels is much more likely. Technical support at 1.1336 and 1.1147 can also act as immediate targets. High volatility is unlikely before the announcement of the results of the Fed meeting.   Relevance up to 09:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325776
Russia Look Set To Double Its Exports For The First Half Of 2023

The Saxo Bank's Economists Talk About The Upcoming Fed Decision, The Weak Chinese Currency (CNH) And Wheat Jumping

Saxo Bank Saxo Bank 31.10.2022 11:34
Summary:  Today, we scratch our heads a bit at Friday's wildly strong equity session, as the narrative supporting recent equity market strength - the anticipation of a dovish downshift in Fed policy guidance - was rapidly unwinding on the same day. An article at the weekend from "Fed whisperer" Nick Timiraos of the Wall Street Journal suggests that the Fed is concerned the market is expecting too much of a policy climb-down this Wednesday. We also discuss wheat jumping on Russia moving against the Ukrainian grain deal, industrial metals struggling on weak China data and a weak Chinese currency, the busy earnings and macro calendar for the week ahead and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-oct-31-2022-31102022
China Yuan (CNH) Prints The First Daily Loss

Economists' Opinion On The USD/CNH Pair In The Short-Term Horizon

TeleTrade Comments TeleTrade Comments 31.10.2022 11:40
USD/CNH should face extra range bound trading in the short-term horizon, likely between 7.2200 and 7.3500, comment Markets Strategist Quek Ser Leang and Economist Lee Sue Ann at UOB Group. Key Quotes 24-hour view: “Our expectation for USD to ‘consolidate and trade within a range’ last Friday was incorrect as it rose to a high of 7.2840. USD traded on a firm note in early Asian trade today and could edge higher. However, upward momentum is not strong and any advance is unlikely to break 7.3100 (there is another resistance at 7.2980) Support is at 7.2720, followed by 7.2620.” Next 1-3 weeks: “In our latest narrative from last Thursday (27 Oct, spot at 7.1870), we indicated that the pullback in USD has room to extend to 7.1500, possibly 7.1300. USD then dropped to 7.1662 before rebounding strongly. The build-up in downward pressure faded quickly and USD is unlikely to pullback further. From here, USD could trade between 7.2200 and 7.3500 for a while.”
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

The Japanese Yen Is Still Weakened, The Fed's Decision Will Give Direction The USD/JPY Pair

TeleTrade Comments TeleTrade Comments 31.10.2022 11:47
USD/JPY gains traction for the second successive day amid sustained USD buying. The Fed-BoJ policy divergence continues to undermine the JPY and offers support. The uptick lacks bullish conviction as the focus remains on the key FOMC meeting. The USD/JPY pair edges higher for the second straight day on Monday and looks to build on its recovery from the 145.00 psychological mark, or a nearly three-week low touched last Thursday. The pair stick to its modest gains through the first half of the European session and is currently placed near a multi-day high, just below mid-148.00s. The Japanese yen continues to be undermined by the fact that the Bank of Japan held interest rates at record lows on Friday and reiterated that it will continue to guide the 10-year bond yield at 0%. The central bank reaffirmed the need for accommodative policy amid economic headwinds stemming from the resurgence of COVID-19 cases in China and global recession fears. This, along with some follow-through US dollar buying interest continues to lend support to the USD/JPY pair. In fact, the USD Index, which measures the greenback's performance against a basket of currencies, extends last week's bounce from over a one-month low amid rising US Treasury bond yields. The prospects for another supersized 75 bps Fed rate hike move in November turn out to be a key factor pushing the US bond yields higher and lending some support to the greenback. The USD bulls, however, seem reluctant to place aggressive bets ahead of this week's key central bank event risk. The Fed is scheduled to announce its monetary policy decision on Wednesday and investors will look for fresh clues about the future rate-hike path. Hence, the focus will remain on the accompanying policy statement and the post-meeting press conference. This will influence the USD price dynamics and help determine the next leg of a directional move for the USD/JPY pair. In the meantime, elevated US bond yields should act as a tailwind for the USD amid absent relevant economic data.
The AUD/USD Pair’s Downside Remains Off The Table

The Downward Trend Of The AUD/USD Pair Has Not Been Exhausted

InstaForex Analysis InstaForex Analysis 31.10.2022 11:48
On November 1, the Reserve Bank of Australia will summarize the results of its next, penultimate meeting this year. According to the forecasts of most experts, the central bank will raise the rate by 25 points, continuing to implement a moderate pace of tightening monetary policy. This time there are no "hawkish illusions", so the Australian dollar is most likely to react not to the fact of a 25-point hike, but to the subsequent rhetoric of the head of the RBA and the tone of the accompanying statement. Despite the predictable nature of the November meeting, there is still some intrigue here. Let me remind you that during the last two weeks, key macroeconomic data on the labor market and inflation were published in Australia. If the "Australian Nonfarm" turned out to be very contradictory, then inflation indicators turned out to be in the green zone, surprising market participants with a breakthrough growth to 32-year highs. Thus, according to published data, the consumer price index in the third quarter jumped to 7.3% YoY (with growth forecast to 7.0% and the previous value of 6.1%). In quarterly terms, the indicator rose to 1.8% with a growth forecast of up to 1.6%. On a monthly basis, the CPI also came out in the green zone, reaching 7.3%. All components of the published report exceeded the expectations of most analysts. The general outlook As for the labor market in Australia, the situation here is as follows. Unemployment remained at the August level of 3.5% (that is, in the area of 50-year lows), as well as the share of the economically active population (66.6%). While the number of people employed last month increased by only 900 people. You should also pay attention to an important point: the rate of price growth is almost three times higher than the rate of wage increases. In general, the market is increasingly concerned that Australia will not escape the recession. Actually, amid these concerns, the RBA has reduced the pace of interest rate hikes in order to reduce the impact of side effects. And in my opinion, to date, the RBA has no reason to reconsider its position on this issue. Here it is necessary to recall the main theses of the minutes of the October meeting of the members of the Australian central bank. The published document clearly made it clear that the RBA will raise the rate at a moderate pace in the coming months. This is eloquently evidenced by the wording of the minutes: "the members of the central bank recognized that the tightening of monetary policy has hit housing prices and household welfare, and over time may lead to a decrease in consumption (...) At the same time, the current situation requires a further increase in interest rates in the coming period." Inflation As for inflation, it is necessary to recognize that the CPI is growing at a faster pace. But, on the other hand, it should also be remembered that, according to the RBA's forecasts, the index should reach 7.8% by the end of the year (YoY). Therefore, the current growth of inflation indicators can only cause "excessive concern" of RBA members, but no more. Expectations  Thus, in my opinion, the RBA is expected to raise the interest rate by 25 basis points at tomorrow's meeting and voice the already familiar rhetoric, despite a significant increase in inflation in the third quarter. The Australian central bank is likely to make it clear that a similar 25-point scenario will be implemented at the last meeting this year. Given the latest inflation release, such restrained results of the November meeting may disappoint AUD/USD traders. It is also worth noting that the RBA will announce its verdict ahead of the announcement of the results of the next Federal Reserve meeting (November 2). Therefore, the market will react to tomorrow's events with an eye to this circumstance. If the RBA confirms the moderate pace of monetary policy tightening, while the Fed maintains its aggressive attitude (including in the context of the December meeting), the aussie will be under significant pressure. In my opinion, this is the most likely scenario, despite the increasing skepticism about the "hawkishness" of the Fed. AUD/USD Summarizing the above, we can assume that the downward trend of AUD/USD has not been exhausted. Therefore, it is advisable to use corrective bursts as an excuse to open short positions (but only after the announcement of the results of the Fed's November meeting). From a technical point of view, the AUD/USD pair is currently located between the middle and upper lines of the Bollinger Bands indicator on the daily chart. However, if the bears push the price below 0.6360, the aussie will be between the middle and lower lines of the Bollinger Bands, and the Ichimoku indicator will form a bearish Parade of Lines signal. In this case, the main bearish target will be the 0.6200 mark – this is the lower line of the Bollinger Bands on the D1 timeframe.   Relevance up to 04:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325792
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

The Currency Markets This Week Will Be Dominated By Fed Decisions

ING Economics ING Economics 31.10.2022 11:58
It is a busy week for FX markets, with key policy rate meetings on both sides of the Atlantic and some tier-one data releases. The question to be answered this week: is the Federal Reserve ready to pivot? We would argue that the Fed has less cause than many to pivot. And weak growth overseas should mean that it is too early to unwind long dollar positions In this article USD: Wednesday's FOMC will dominate EUR: Markets still price a 75bp ECB hike in December GBP: Thursday's BoE could do some damage CEE: Tough times are back USD: Wednesday's FOMC will dominate FX markets this week will be dominated by Wednesday's FOMC meeting and whether the Fed provides any oxygen to the idea of a pivot - or a shift to a slower pace of tightening. As we discuss in our FOMC preview, the Fed faces several challenges here, but we suspect the bar is quite high for a pivot and we feel it is too early to call time on the dollar's rally. After all, the market in effect already prices the pivot (pricing a 75bp hike this week and a 50bp hike in December) and we suspect the chances of another 75bp hike in December are under-priced. In addition, this week sees a whole raft of US data culminating in Friday's nonfarm employment data. We forecast 220k in job gains and an unemployment rate of 3.6% - still below the 3.8% the Fed forecast for year-end. Recall that even with the unemployment rate rising to 3.8%, the Fed's dot plots had assumed that a policy rate in the 4.25-4.50% area would be appropriate for the end of this year. As always there are two sides to the dollar story - what's going on at home and what's going on abroad. High beta currencies like the Norwegian krone, New Zealand dollar and British pound have been some of the best performers against the dollar over the last month. That has largely been due to the turnaround in sterling. But as my colleague James Smith discusses in his Bank of England (BoE) preview, the BoE may well disappoint with just a 50bp hike.  A weaker tone in sterling could undermine the recent renaissance in European currencies and push more wind back into the dollar's sails. At the same time, Chinese data continues to disappoint, with the October composite PMI dropping back into contraction territory for the first time since May. In short, it looks as though the dollar's month-long, 4.5% correction could have ended last Thursday and events this week could prove a catalyst to send the dollar back towards the highs. Our base case does see the dollar retesting the highs later this year. A break of 111.00/10 in DXY today could open up a move to the 111.80 area. Chris Turner EUR: Markets still price a 75bp ECB hike in December The eurozone continues to battle with inflation and today should see the release of a new cycle high in CPI at 10.3% year-on-year - and potentially even higher given the German CPI release. Today we will also get a first look at 3Q22 eurozone GDP, expected at 0.1% quarter-on-quarter. The news may temporarily push eurozone rates higher, even though a 75bp hike is virtually priced for the 15 December ECB meeting. Ultimately, however, our macro team believes the ECB will only hike 50bp in December and that the terminal rate for this cycle proves to be in the 2.25% area rather than the 2.80% currently priced by the markets. And bluntly, the ECB has far more cause than the Fed to pivot. With global growth under pressure from tighter rates and a misfiring Chinese economy, we think the eurozone and the euro will continue to struggle. That is why last Thursday's high of 1.0089 in EUR/USD could have been significant. A close back under the 0.9900/9910 area this week would support our preferred view of EUR/USD retesting the lows near 0.95. Chris Turner GBP: Thursday's BoE could do some damage GBP/USD is consolidating above the important 1.1500 level, holding onto recent gains. The highlight this week will be Thursday's Bank of England meeting. The market firmly prices 75bp, but we think the risk of a softer 50bp is under-priced as the BoE prepares for the coming recession. As we have argued previously - now that a lot of the fiscal risk premium has come out of sterling - the forthcoming tighter fiscal and more dovish than expected monetary policy could prove a bearish combination for sterling. We are dollar bulls and would thus favour GBP/USD breaking back under 1.1500 based on this week's confluence of events. This would also point to current EUR/GBP losses under 0.8600 proving short-lived. Chris Turner CEE: Tough times are back This week we have a busy calendar not only at the global level but also in Central and Eastern Europe. Today we start with Polish inflation, which will be crucial for next week's National Bank of Poland meeting. We expect a jump from 17.2% to 18.1% year-on-year, slightly above market expectations, mainly due to higher fuel, energy and food prices. Tomorrow in the Czech Republic, 3Q GDP data, October PMI and the state budget result will be released. The first GDP result in the region should show a contraction in the economy and confirm the start of a shallow recession. On Wednesday, we will see October PMIs in Poland and Hungary, which will confirm the downward trend in industrial sentiment. On Thursday, the highlight of this week is the Czech National Bank meeting. In line with the market, we expect interest rates to remain unchanged. A new forecast will be presented which will show lower inflation but higher wage growth, which together with the cost of FX intervention is the main risk for us in terms of a possible additional interest rate hike at the coming meetings. However, we consider the CNB hiking cycle to be finished. The FX market in the region will be dominated by global events in the coming days. Already last week, the positive trend in CEE was halted by the ECB meeting. This week will see a series of central bank meetings led by the Fed. Therefore, we see both support from high-interest rate differentials in the region and EUR/USD as being at risk. In addition, gas prices have been rising again in the last two days and many of the reasons for the strengthening trend in the CEE region over the past two weeks are now dissipating. Of course, at the local level, we will be watching the inflation numbers in Poland and the CNB meeting in particular but this week speaks strongly against CEE FX.  We see the Czech koruna as the most vulnerable at the moment, which will again be the focus of short positioning ahead of the central bank meeting. We will likely see a move towards the 24.60-24.70 EUR/CZK levels. The Hungarian forint is likely to look above 415 EUR/HUF again. On the other hand, the Polish zloty should be best positioned this week, supported by a high inflation number and an increase in NBP rate hike bets. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Analysis And Trips For Trading The GBP/USD Pair In Short And Long Positions

The Great Britain Needs Foreign Investment To Finance Current Deficit

InstaForex Analysis InstaForex Analysis 31.10.2022 12:06
Slow and steady wins the race? If at the time of the announcement of £45bn fiscal stimulus by the Liz Truss government, the derivatives market estimated the repo rate ceiling in the current monetary tightening cycle above 6%, then it has now decreased to 4.5% by May 2023. However, in September, the pound plunged to a historic low against the US dollar, and by the end of October it recovered by 12%. Will a small move by the Bank of England in November push GBPUSD even higher? If at the peak of the market turmoil the derivatives market believed in a giant 150 bps increase in the repo rate, then as the MPC meeting approaches, we are talking about 75 bps. The probability of such an outcome is estimated at 90%, and it should be noted that this is already so much. As a result, the cost of borrowing will rise to 3%, the highest level since 1989. Dynamics of expectations for the REPO rate According to Barclays, a larger move of 100 bps can be justified by a strong labor market, which accelerates inflation due to the rapid growth of wages. At the same time, 75 bps is the optimal solution, since there are no contradictions between fiscal and monetary policy in Britain now. On the contrary, ING and Citigroup believe that BoE Governor Andrew Bailey and his colleagues are able to surprise investors by raising the repo rate by 50 bps. This will potentially further ease the pressure on the bond market after the collapse caused by unjustified tax cuts from the Liz Truss government. In my opinion, the markets have already calmed down. The combination of Rishi Sunak as prime minister and Jeremy Hunt as Chancellor of the Exchequer is working in their favor. Britain needs foreign investment to finance its current account deficit, and the return of confidence in the government provides these flows, contributing to the growth of GBPUSD quotes. Another thing is that the fate of the pair does not entirely depend on the BoE. The day before its verdict, the Federal Reserve will announce its decision, and a day after the MPC meeting, a report on the US labor market will be released. The +200,000 expected by Bloomberg analysts for non-agricultural employment is a very decent figure, which will indicate the resilience of the US economy to monetary tightening and will allow the Fed to continue what they started. The position of the FOMC is of paramount importance. If it changes amid deteriorating macroeconomic statistics, the markets will smell a dovish turn, which will negatively affect the US dollar. I don't think falling Treasury yields, a weaker dollar and a rally in stocks are in the plans of Fed Chairman Jerome Powell and his colleagues. Surely the Fed will continue to talk about the determination that will support the US currency. Technically, the 1-2-3 reversal pattern continues to be realized on the GBPUSD daily chart, which can be transformed into a Dragon. This requires consolidation. If we consider this scenario as a baseline, a decline below 1.15 is a reason for short positions, followed by longs from 1.143 and 1.139.     Relevance up to 10:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325796
Positive Start Expected as Nvidia's Strong Performance Boosts Market Confidence

Dow Jones Saw The Biggest Profits And The German DAX Index Rebound From Declines

Conotoxia Comments Conotoxia Comments 31.10.2022 12:13
October 2022 seems to have brought respite to many asset classes. During this time, the stock, bond or cryptocurrency markets tried to pick up, while the US dollar seemed to lose value at the same time, along with the falling VIX "fear index" contract. Performance of key indices and companies In October,one of the popular futures contracts, the contract for the U.S. Dow Jones Industrial Average index saw the biggest gains. It rose by almost 13 percent during this period. Although the month is not yet over, for the moment, only Verizon ranks in the entire index since the beginning of October with a negative result. On a monthly basis, the decline is 0.92 percent. In contrast, the biggest increase in the index was achieved by Caterpillar (up more than 30 percent). The company reported that sales and revenues in the third quarter of 2022 recorded an annual increase of 21 percent, reaching $15 billion. The company's profit was $2.04 billion, an increase of 43.13 percent compared to the same quarter of the previous year, BBN reported. Operating profit rose 45.73 percent year-on-year to $2.42 billion. Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel engines, industrial gas turbines and diesel-electric locomotives. Source: Conotoxia MT5, Caterpillar, Monthly DAX also with growth in October The second popular instrument, which seemed to rebound from earlier declines, was the contract for the German DAX index. Although emerging macroeconomic forecasts for the German economy appear to be worsening, and the European Central Bank raised interest rates, the DAX rose nearly 10 percent. The company that may have gained the most was Deutsche Bank, as the month's performance was up more than 30 percent by now. The German bank reported its best results since 2016 in October. Net income for the third quarter of 2022 was €6.9 billion, up 15 percent year-on-year and the highest third-quarter income since 2016. The dollar exchange rate fell nearly 1 percent. Market hopes that the U.S. Fed will slow down interest rate hikes at the end of the year and in the first quarter of 2023 may have led the U.S. dollar to fall in October. At the moment, the USD index is trading 0.9 percent lower than at the beginning of the month at 111 points. The EUR/USD exchange rate is near parity at 1.0000, all likely in anticipation of the Fed's November 2 interest rate decision. The market seems to be expecting a 75bp hike to 3.75-4.00 percent, while the end of the hike cycle could be priced in at 4.75-5.00 percent in early 2023. October's biggest declines? It seems that among the popular contracts, the biggest drop in October may be the VIX, which fell 15 percent to 26.86 points this morning. Looking at the chart of the contract showing expected volatility on the S&P500 index, someone could  see that this month's trading may have turned around at a potential resistance level. Source: Conotoxia MT5, VIX, Weekly Will volatility continue at lower levels in November? Here, a lot may depend on the US central bank and events in Eastern Europe. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Read more reviews and open a demo account at invest.conotoxia.com Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Forex: Most NOK Gains May Be Channelled Against The Dollar

Together With The Risk In The Financial Markets The Norwegian Krone (NOK) Has Strengthened

TeleTrade Comments TeleTrade Comments 31.10.2022 12:19
The Norwegian krone strengthened last week in tandem with the pullback of the USD and risk-on in financial markets. Still, economists at Nordea see EUR/NOK trading as high as 10.75 until year-end. More pain to come “Historically speaking, the period towards year-end, remains a difficult period for the NOK seasonality-wise. We don’t think this year will be an expectation given the macroeconomic backdrop and see EUR/NOK trading as high as 10.75.”  “USD/NOK could rise to 11.50 if/when EUR/USD takes a turn to 0.95 again.”
Apple Q3 2023 Results – Surpassing Expectations and Aiming for New Heights

The Euro To British Pound (EUR/GBP) Cross Pair Prices Back Above

TeleTrade Comments TeleTrade Comments 31.10.2022 13:11
EUR/GBP gains some positive traction on Monday and snaps a four-day losing streak. Stronger Eurozone inflation data provide a modest lift to the euro and offer support. A combination of factors seems to underpin sterling and might cap gains for the cross. The EUR/GBP cross attracts some buying near the 0.8575-0.8570 region on Monday and snaps a four-day losing streak to its lowest level since early September. The intraday uptick picks up pace following the release of stronger Eurozone consumer inflation figures and lifts spot prices back above the 0.8600 mark during the first half of the European session. The latest data published by Eurostat showed that the annualized Eurozone Harmonised Index of Consumer Prices (HICP) accelerate to 10.7% in October from 9.9% in the previous month. Adding to this, the core figures climbed to 5.0% YoY during the reported month as compared to the 4.9% expected and 4.8% recorded in September. Separately, the first reading of the Eurozone GDP print showed that the economy expanded by 0.2% during the third quarter, matching consensus estimates. This, in turn, is seen as a key factor behind the shared currency's relative outperformance against its British counterpart and offering some support to the EUR/GBP cross. That said, a more dovish tone adopted by the European Central Bank last week - in the wake of the worsening economic outlook - continues to act as a headwind for the euro. The British pound, on the other hand, draws support from the latest optimism over the appointment of Rishi Sunak as the new UK Prime Minister. Market players see Sunak as someone who can bring stability back after the recent volatility in the markets. Adding to this, International Monetary Fund (IMF) Managing Director Kristalina Georgieva told Reuters that she expects the new UK PM Sunak to steer Britain towards a path of medium-term fiscal sustainability. Apart from this, expectations for a 75 bps hike by the Bank of England warrant some caution for aggressive bullish traders and positioning for a further appreciating move for the EUR/GBP cross. Hence, any subsequent strength is more likely to confront stiff resistance and remain capped near the mid-0.8600s, which should act as a pivotal point for intraday traders. Some follow-through buying should push spot prices back above the 0.8700 mark and allow bulls to aim back to retest the 0.8750-0.8760 supply zone.
lower Corporate Supply Expected in H2 2023, Forecasting €85-100bn Total Supply

An Ececonomic View Of The US Dollar To Malaysian Ringgit Pair (USD/MYR)

TeleTrade Comments TeleTrade Comments 31.10.2022 13:34
Further side-lined trading in USD/MYR is probable in the near term, likely between 4.6950 and 4.7400 according to Markets Strategist Quek Ser Leang at UOB Group’s Global Economics & Markets Research. Key Quotes “USD/MYR snapped its 8-week winning streak as it closed lower by 0.34% last Friday. The price action is likely the early stages of a consolidation phase”. “In other words, USD/MYR is likely to trade sideways this week, expected to be within a range of 4.6950/4.7400”.
Portugal's Economic Outlook: Growth Forecast and Inflation Trends

Soft Commodities Witnessed Another Awful Week

Saxo Bank Saxo Bank 31.10.2022 13:39
Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to Tuesday, October 25. A week where financial markets received a boost from speculation the Fed was considering a pause. The dollar traded softer with commodities predominantly trading in the black with exceptions being soft commodities and not least wheat where short selling accelerated just ahead of today's price spike on renewed Ukraine supply worries Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming   Financial Markets Daily Quick TakeSaxo Market Call Daily Podcast This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to Tuesday, October 25. A week where financial markets received a boost from speculation the Fed was considering a pause to assess to the economic impact of already implemented rate hikes and quantitative tightening measures. Both the S&P and especially the Nasdaq traded higher ahead of earnings from the big technology companies while bond yields climbed and the dollar traded softer. Commodities traded predominantly in the black led by energy and industrial metals with heavy and continued selling of softs and wheat being the main outliers. Commodities The Bloomberg Commodity index traded up 1% on the week with strength in crude oil and industrial related metals attracting fresh buying from speculators. Overall, however, the combined net long held by money managers across the 24 major commodity futures tracked in this report remains relatively low at 1 million contracts compared with 2.2 million around the time of the Russian invasion of Ukraine. A slump that has been driven by the current lack of trends and strong momentum across many commodities, as well as concerns about the short-term outlook as the markets continue to focus on a slowing global economy. Biggest changes made by funds this past were buying of crude oil, soybean meal and corn, as well as cattle and hogs while sellers concentrated their efforts in gold, wheat, sugar and cocoa. Energy Speculators maintained a relative low conviction rate regarding the short term direction of crude oil with the 4% rally during the reporting week only attracting 34k lots of net buying, thereby only part reversing the 57k lots that was net sold in the previous week. Selling of natural gas continued during the reporting week with the front month contract briefly dipping below $5/MMBtu. The result being another small increase in the net short held across four Henry Hub related futures and swap contracts to -86k lots, a 31-month high.  Metals Gold, trading unchanged on the week, nevertheless saw increased short selling in response to another and failed attempt to break below $1615 suppor. As a result the net short jumped by 61% to 33k lots, just 8k lots below the near four-year high reached a few weeks ago. Silver, together with platinum and copper all saw net buying, not least platinum which during the past month has seen its discount to gold narrow by 100 dollars to around 700, the narrowest spread since July 2021.  Agriculture  In grains, four weeks of net selling was almost reversed as buyers added soymeal and soy oil length amid price gains of 3.4% and 5.1% respectively. Together with additional buying of corn these more than offset continued selling of CBOT wheat driving the net short up by 63% to 36k lots, a 28-month high. The latest selling occurring during a week where global demand worries attracted more attention than a rapidly expanding drought situation across the US grain belt, and also before Russia over the weekend announced that they were pulling out of a deal that has allowed Ukrainian grain exports from Black Sea ports.As a result wheat futures (ZWZ2) in Chicago surged as much as 7.7% to $8.93 on the Monday opening. Since the UN and Turkey supported grain corridor opened three months ago Ukraine has shipped more than 9 million tons of foodstuff and it has helped ease tight world supplies and control global food costs. Food exports from Ukraine also includes corn and sunflower oil and reduced supply of those has lifted corn futures (ZCZ2) in Chicago by 2.5% to trade near resistance at $7/bu and soybean oil futures by 1.8%.   Soft commodities witnessed another awful week with net selling hitting all four contracts, not least coffee and cotton, now down 33% and 45% respectively from their early 2022 peaks. The coffee net long was reduced by 75% to 3k lots, the lowest bullish conviction in almost two year primarily driven by an increase in the gross short position. A similar development was seen in cotton where global demand worries and another week of selling helped attract fresh short selling, resulting in the overall net long being cut by 40% to 13k lots, a 28-month low.  Forex In forex, flows remained mixed during a week that saw the dollar index trade softer by 1% after recently hitting a 20-year high. Overall the gross dollar long against nine IMM currency futures and the Dollar index rose by 5% to $15 billion, primarily driven by heavy JPY selling as the under siege currency dropped 2.3% towards the important 150 level. Elsewhere, a recovering Sterling saw net selling driven by a combination of gross longs being reduced and fresh short selling. The euro net long reached a four month high at 48k lots on a combination of fresh longs and reduced short participation. Since late August speculators have net bought €12 billion after flipping their euro exposure from a 48k lots short to a 48k lots long.     Source: https://www.home.saxo/content/articles/commodities/cot-wheat-short-jumps-ahead-of-latest-ukraine-supply-worry-31102022
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

The Price Of USD/JPY Pair Continues Its Upward Bounce

InstaForex Analysis InstaForex Analysis 31.10.2022 13:46
Red lines- bullish channel Blue rectangle- resistance USDJPY is trading around 148.70. Price continues its upward bounce after the new lower low made last week around 145.10. The lower low in price was combined with a lower low by the RSI as well. This makes us believe that the upward move is most probably just a pause to the down trend. Trend remains bullish as price continues to trade inside the red upward sloping channel. Resistance is key at 148.90-149.40. Last time USDJPY visited this resistance area it got rejected. Bulls need to recapture this resistance area if they are to hope for more upside. USDJPY remains vulnerable to a move towards the lower channel boundary at 140.     Relevance up to 13:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299058
Analysis Of The AUD/USD Commodity Currency Pair's Price

It Tricky To Predict The Extent Of The Rate Hike By The RBA

Kenny Fisher Kenny Fisher 31.10.2022 17:47
AUD/USD is down for a third straight day. The Australian dollar is trading at 0.6395, down o.24%. Will RBA deliver a 0.50% hike? The RBA kicks off a busy week of central bank decisions when it meets on Tuesday. This will be followed by the Federal Reserve on Wednesday and the Bank of England on Thursday. The RBA has delivered a steep rate-tightening cycle this year and the upcoming meeting will be live, as it remains unclear what the RBA has in store for the markets. The markets have priced in a second-straight 25-basis point hike, which would bring the cash rate to 2.85%, its highest level since April 2013. There is, however, a 20% chance that the RBA will hike by a steep 50 basis points, given that the Bank’s focus is on curbing inflation and the battle remains far from over. Headline inflation jumped to 7.3%, up from 6.1% in Q2, while core inflation hit 6.1%, up from 4.9%. The RBA expects headline inflation to peak at 7.5%, but other views have inflation rising as high as 8.0%. RBA Governor Lowe has caught the markets wrong-footed before – the 50 bp move in June was larger than expected, and the 25 bp in October was a surprise dovish pivot. This makes it tricky to predict the extent of the rate hike on Tuesday –  the markets are leaning heavily towards a 25 bp increase, but a 50 bp move should not be discounted. For the Federal Reserve, inflation is also a key concern. The Fed’s preferred inflation gauge, the PCE core index, rose to 5.1% in September, up from 4.9% a month earlier. That cements a 75 bp rate hike on Wednesday, even though there has been talk of the Fed easing up due to concerns about the economic outlook. . AUD/USD Technical AUD/USD is testing support at 0.6403. The next support level is 0.6283 There is resistance at 0.6532 and 0.6652 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Growth Of The USD/JPY Pair Is Hampered By Resistance

The Price Of The USD/JPY Pair Is Likely To Be In Downward

InstaForex Analysis InstaForex Analysis 01.11.2022 08:01
The USD/JPY pair rose 130 points yesterday, stopping in the middle of the way to 150.00 resistance. The stop was caused by a reversal of the signal line of the Marlin Oscillator on the zero line. The price is most likely to undertake a downward scenario, that is, it will overcome the support at 147.50 and then go down to the price channel line to the area of 145.45, where the MACD line is already striving. This is a key level, a breakthrough of which, or a reversal from which will determine the further medium-term price movement. At the moment, the option with a further advance to 141.50 has a slight advantage. On the four-hour chart, the price reversed from the resistance of the MACD line. Marlin also turns down and picks up speed. The first task is to settle under 147.50.   Relevance up to 03:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325854
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Cable Market (GBP/USD): The Trend Is Mostly Downward

InstaForex Analysis InstaForex Analysis 01.11.2022 08:02
The British pound managed to break through the support level of 1.1500 yesterday. Just ahead, there is a target under the MACD line at 1.1330, but the pound may not rush and look at related currencies and external markets, since the Federal Reserve's meeting on monetary policy is tomorrow. Breaking 1.1330 will open the next target at 1.1170. The scenario with price delay, that is, with consolidation, supports the forecast for ISM Manufacturing PMI in October, which is expected to fall from 50.9 to 50.0. Construction spending in the US in September is also expected to decrease - forecast -0.5% after -0.7% in August. On the H4 chart, the price settled both under the level of 1.1500 and under the MACD indicator line. The Marlin Oscillator is in negative territory. The trend is mostly downward, but not quite mature yet, as the balance indicator line has not yet been overcome, which supports the version of the price delay before the Fed meeting.   Relevance up to 03:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325856
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

What Kind Of Scenario Is Most Likely For The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 01.11.2022 08:05
The euro undertook a downward breakout on Monday. Having made a path of 80 points, the euro has almost reached the target support of 0.9864. Apparently, the price lingered before the support to build up strength before it was overcome, as the support is strengthened by the MACD line (0.9840). Overcoming the formed range (0.9840/64) opens a further path to the target support at 0.9715 – to the April 2000 high. The Marlin Oscillator is approaching the zero line on the daily. It is likely that the price will overcome the support range and the zero line oscillator at the same time. Such synchronization will lead to a powerful downward movement. In terms of timing, such a breakthrough may take place tomorrow - on the day of the Federal Reserve meeting. On the four-hour chart, the price consolidated under the balance (red) and MACD indicator lines. The Marlin Oscillator is developing in the downward trend zone. Today, consolidation is likely before the breakout of the planned supports, or even the first attempt at such a breakout.   Relevance up to 03:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325858
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

On The New York Stock Exchange Much More Securities Fell Than Rose

InstaForex Analysis InstaForex Analysis 01.11.2022 08:09
At the close in the New York Stock Exchange, the Dow Jones fell 0.39%, the S&P 500 fell 0.75% and the NASDAQ Composite fell 1.03%. The Dow Jones The leading gainers among the components of the Dow Jones index today were The Travelers Companies Inc, which gained 2.59 points (1.42%) to close at 184.55. Quotes of Goldman Sachs Group Inc rose by 3.03 points (0.89%), ending trading at 344.85. UnitedHealth Group Incorporated rose 4.11 points or 0.75% to close at 555.35. The losers were shares of Intel Corporation, which lost 0.64 points or 2.20% to end the session at 28.43. Microsoft Corporation was up 1.59% or 3.74 points to close at 232.13, while Dow Inc was down 1.58% or 0.75 points to close at 46.73 . The S&P 500  Leading gainers among the S&P 500 index components in today's trading were Wynn Resorts Limited, which rose 9.61% to hit 63.90, Coterra Energy Inc, which gained 3.49% to close at 31.15, and also shares of DaVita HealthCare Partners Inc, which rose 3.47% to end the session at 72.99. The biggest losers were Global Payments Inc, which shed 8.83% to close at 114.25. Shares of Newell Brands Inc shed 8.24% to end the session at 13.81. Quotes of Meta Platforms Inc decreased in price by 6.09% to 93.16. The NASDAQ  The leading gainers among the components of the NASDAQ Composite in today's trading were Sonnet Biotherapeutics Holdings Inc, which rose 66.38% to 1.93, Acorda Therapeutics Inc, which gained 63.36% to close at 1.07. as well as shares of Shineco Inc, which rose 37.96% to close the session at 1.09. The biggest loser was Y mAbs Therapeutics, which shed 59.80% to close at 3.61. Shares of Tusimple Holdings Inc lost 45.64% to end the session at 3.43. Quotes Bull Horn Holdings Corp. decreased in price by 45.61% to 6.50. The numbers On the New York Stock Exchange, the number of securities that fell in price (1604) exceeded the number of those that closed in positive territory (1472), while quotes of 118 shares remained virtually unchanged. On the NASDAQ stock exchange, papers of 2004 companies fell, 1753 rose, and 165 remained at the level of the previous closing. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.50% to 25.88. Gold Gold futures for December delivery lost 0.53%, or 8.65, to hit $1.00 a troy ounce. In other commodities, WTI crude for December delivery fell 1.95%, or 1.71, to $86.19 a barrel. Futures for Brent crude for January delivery fell 1.32%, or 1.24, to $92.53 a barrel. Forex Meanwhile, in the Forex market, EUR/USD was down 0.80% to hit 0.99, while USD/JPY was up 0.87% to hit 148.74. Futures on the USD index rose 0.77% to 111.45.   Relevance up to 04:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/299126
FX Daily: Testing the easing pushback

EUR/USD: The Situation Of The Euro To US Dollar Pair Was Almost Perfect

InstaForex Analysis InstaForex Analysis 01.11.2022 08:16
Analysis of EUR/USD, 5-minute chart The euro/dollar pair continued to move down on Monday, as we predicted at the end of last week and over the weekend. We believe that the market has begun to work out the results of the Federal Reserve meeting in advance, which, in fact, are already known - the rate will be raised by 0.75% for the fourth consecutive time. Thus, the strengthening of the dollar is indeed logical. Take note that both major pairs fell simultaneously on Monday, so the euro is unlikely to decline due to macroeconomic statistics from the EU. We found out that GDP in the third quarter grew by only 0.2%, while inflation accelerated to 10.7%. As we said earlier, rising inflation is a bullish factor for the currency, as it means that the central bank can tighten its monetary policy even more. However, in the case of the European Central Bank, such a logical chain is not entirely correct, since now there are big doubts that the ECB will be able to raise the rate "to the bitter end." Moreover, the results of the Federal Reserve meeting will be summed up tomorrow, which is clearly more important than European GDP or inflation. In regards to Monday's trading signals, the situation was almost perfect. Only two sell signals were formed during the European trading session and afterwards the price fell. The first signal can be considered false, since the price managed to go down only 18 points, which, however, was enough to set Stop Loss to breakeven. The second short position brought at least 50 points of profit, and it had to be closed manually in the late afternoon. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of short orders initiated by non-commercial traders increased by 24,000, whereas the number of long orders declined by 2,700. As a result, the net position increased by 26,700 contracts. However, this could hardly affect the situation since the euro is still at the bottom. At the moment, professional traders still prefer the greenback to the euro. The number of buy orders exceeds the number of sell orders by 75,000. However, the euro cannot benefit from the situation. Thus, the net position of non-commercial traders may go on rising without changing the market situation. Among all categories of traders, the number of long positions exceeds the number of short positions by 19,000 (609,000 against 590,000). We recommend to familiarize yourself with: Overview of the EUR/USD pair. November 1. The EU economy is in a tailspin. Overview of the GBP/USD pair. November 1. Elections in the UK will soon take on the character of an annual national tradition. Forecast and trading signals for GBP/USD on November 1. Detailed analysis of the movement of the pair and trading transactions. Analysis of EUR/USD, 1-hour chart The pair is moving upwards on the one-hour chart, however, a lot may change this week. So far, the price is above the Senkou Span B line and above the ascending trend line, and on the 24-hour timeframe, it has not managed to overcome the Ichimoku cloud. Therefore, the euro can fall by another 100 points and at the same time maintain an upward trend, but at the same time, a drop below the trend line will break the upward trend. On Tuesday, the pair may trade at the following levels: 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as the Senkou Span B (0.9900) and Kijun-sen (0.9982). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events are planned in the European Union, on the other hand, a rather important index of business activity in the manufacturing sector ISM and a less important S&P index for the same sector will be released in America. A reaction to ISM may follow, especially if its value is very different from the forecast. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 06:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325866
The Pound (GBP) Will Probably Continue To Move Sideways

The British Pound (GBP) Has Chances For Continued Growth

InstaForex Analysis InstaForex Analysis 01.11.2022 08:19
Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair also continued its downward movement on Monday after soaring to 1.1645 last week. We have said before that we expect the US dollar to rise ahead of the Fed meeting. As you can see, so far everything is going according to plan. Do not forget that this Thursday will be the announcement of the results of the meeting of the Bank of England, but it is only in second place in terms of importance after the meeting of the Fed. Thus, the market is still busy working out the rate increase in the US, which will be announced tomorrow. The pound still retains great chances for continued growth. It pulled back less and is well above the Senkou Span B, but it also failed to clear the Ichimoku cloud on the 24-hour timeframe. Given the fact that the euro and the pound should move at least approximately the same, we assume that the British currency will continue to fall, at least until Wednesday. On the 5-minute timeframe, the movement of the pair was almost perfect yesterday, as the quotes only declined throughout the day. Unfortunately, the beginning of this movement was not caught, and during the day not a single trading signal was formed at all. Therefore, it was not possible to make money yesterday, and transactions should not have been opened. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group opened 3,200 long positions and closed 200 short positions. Thus, the net position of non-commercial traders increased by 3,400, which is very small for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 43,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? As for the total number of open longs and shorts, the bulls have an advantage of 18,000 here. But, as we can see, this indicator does not help the pound too much either. We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. November 1. The EU economy is in a tailspin. Overview of the GBP/USD pair. November 1. Elections in the UK will soon take on the character of an annual national tradition. Outlook and trading signals for EUR/USD on November 1. Analysis of market situation. Analysis of GBP/USD, 1-hour chart The pound/dollar pair is moving upwards on the one-hour chart, which so far looks quite convincing. The price went only slightly below the Kijun-sen line, which is not critical yet. However, Wednesday and Thursday can dramatically change the situation for the pair. Today we expect the dollar to rise, but it is rather difficult to say where the pound will end up on Friday. On Tuesday, the pair may trade at the following levels: 1.1060, 1.1212, 1.1354, 1.1486, 1.1649, 1.1760, 1.1874. Senkou Span B(1.1351) and Kijun-sen (1.1535) lines can also give signals if the price rebounds or breaks these levels. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. The UK is set to publish an index of business activity in the manufacturing sector S&P. The index is likely to remain below the level of 50.0, and the reaction to it may be, but weak. The more important ISM PMI will be released in the US in the afternoon. If the result significantly deviates from the predicted value, then the market reaction may be tangible. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 06:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325872
The Price Of USD/JPY Pair Has To Fight With The Resistance Level

Technical Look At The Movement Of The USD/JPY Pair

InstaForex Analysis InstaForex Analysis 01.11.2022 08:23
USD/JPY has seen a nice three-wave rally from the 75.57 low. That low was printed back in October 2011. Now, 11 years later, we have just seen the top of wave C at 151.94 and should now be looking for a corrective decline towards strong support near 114.00. We do think that the decline from 151.94 will be in three waves and count as an X-wave and be followed by a new three-wave rally to the upside. In the short term, we are looking for a break below support at 145.48 to confirm that USD/JPY has peaked for now and the decline towards 114.00 is in progress.     Relevance up to 07:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299147
The US Dollar Index Is Expected A Pullback Rally At Least In The Near Term

The US Dollar Started The Week Stronger | Expectations For The RBA's Decisions

Saxo Bank Saxo Bank 01.11.2022 08:44
Summary:  A return to hawkish expectations for the FOMC and risk-off from weak China data as well as possible issues in Russia-Ukraine grain deal saw markets tumble on Monday and US 10-year yields reversed back to 4.10%. Dollar strength returned as well, with gains most pronounced against the sterling and yuan. However, demand concerns returned, while oil also retreated with President Biden’s hopes of a windfall tax on profits of US energy companies weighing as well. Gold extended its downtrend with the surge in yields. Reserve Bank of Australia on watch in the day ahead, with some key Japanese names like Toyota and Sony also reporting earnings. What is happening in markets? The Nasdaq 100 (USNAS100.I) & S&P 500 (US500.I) fall on Monday ahead of Fed, but hold onto monthly gains US stocks fell into the red on their last trading day of the month with end of month rebalancing coming into play, while stocks were also on the back foot as bond yield climbed ahead of Wednesday's Fed decision. Still the S&P500 held onto a monthly gain of 8%, but on Monday the index dropped 0.75%. The Nasdaq fell 1%, but held a 4% October gain. Most Treasury yields rose, with 10-year notes up to around 4.05%, while the dollar climbed against every G-10 partner, save the kiwi. Oil and gold both retreated. Energy shares whipsawed on news that President Joe Biden will call on Congress to consider tax penalties for oil producers accruing record profits. JPMorgan Chase Marko Kolanovic is joining strategists who believe the aggressive Fed hiking is nearing an end. He thinks the Fed will raise rates by 50 basis points in December and pause after one more 25-basis-point hike in the first quarter. Apple (AAPL) shares fell 1.5% with iPhone’s Foxconn plant in central China grappling with virus outbreak.  Fertilizer giant, Archer Daniels (ADM) rose 2.2% with traders expecting higher agricultural prices amid supply concerns from added geopolitical tension. Australia’s ASX200 (ASXSP200.1) futures suggest a 0.15% rise on Tuesday, ahead of the RBA rising rates today The Reserve Bank of Australia is expected to deliver its 2nd straight month of 0.25% hikes at today’s meeting, according to Bloomberg consensus, which will take the cash rate from 2.6% to 2.85%. However it will be a tough decision, with stronger-than-expected third-quarter inflation data from last week, and hot retail and credit data yesterday giving room for a potential 50-bp (0.5%) hike. This could trigger a knee jerk jump in the Aussie dollar vs the US (AUDUSD), however we maintain our bearish view of the AUDUSD given the Fed has more ammo to aggressively rise. Also note, Governor Philip Lowe has regularly wrong-footed forecasts. Still, swaps imply only a 20% chance of an outsized move, and Australian 10-year yields are a full 25 bps below similar-dated Treasuries, meaning there are expectations that RBA will take a softer line than the Fed. The RBA will last month previously noting loan arrears and insolvencies have picked up in Australia, while housing loan commitments declined -  ‘demonstrating the effect of high interest rates on housing’. This demonstrates, the RBA has a tough task of rising rates to slow inflation, without compromising the health of the economy. FX: Dollar returns to gains ahead of FOMC Dollar started the week on a firmer note as WSJ Timiraos comments turned more hawkish over the weekend after dovish Fed expectations possibly went a bit far. The worst performer was GBP, and we had raised concerns yesterday that it was pricing in all the good news so there was scope for disappointment. GBPUSD broke below 1.1500 with EURGBP also reversing back higher to 0.8620 despite EURUSD weakness to sub-0.99. USDJPY rose back above 148.50, with US 10-year Treasury yields touching 4.1% at one point. Japan’s Finance Ministry data showed a record USD 42.8bln was spent on multiple interventions in the FX market last month to attempt to cushion the Yen’s fall. The Chinese yuan continued to slide, USDCNH rose to 7.34 and the onshore spot USDCNY seen close to 15-year highs of 7.30+ at Monday’s close. Crude oil (CLX2 & LCOZ2) worried about oil demand Crude oil prices were lower on Monday as concerns of weaker demand weighed on sentiment with the Fed commentary from whisperer Nick Timiraos shifting towards a hawkish stance again. Meanwhile, China’s PMIs fell below the 50 mark which separates expansion and contraction. On the other hand, OPEC’s World Oil Outlook estimates demand will climb 13% to reach 109.5mb/d in 2035, then hold around that level for another decade and secretary-general Haitham al Ghais said that the oil supply surplus was the main reason for the decision to cut output. There were also some reports suggesting that President Biden is considering a potential windfall tax on US energy companies. WTI futures slid towards $86/barrel. Gold (XAUUSD) in a downtrend Gold (XAUUSD) fell for a third consecutive day approaching the recent support area $1,625 as US dollar broadly strengthened with 10 year treasury yield touching 4.10% at one point on Monday. With the Fed poised for another 75bps rate hike this week, pressure on gold could increase, but we continue to see fundamental strength in gold especially given the higher-for-longer inflation expectation. But as a minimum gold needs to break above $1730 before an end to the month-long downtrend can be called.   What to consider? What next for the RBA after peak hawkishness? The Reserve Bank of Australia meets today and is expected to continue with a smaller pace of rate hikes with 25bps priced in despite a hotter than expected Q3 CPI. Q3 CPI rose by 7.3% YoY from previous print of 6.1%, coming in higher than expectations. RBA’s preferred Trimmed Mean CPI was seen at 6.1% vs. expected 5.6% (prev. 4.9%), while PPI also accelerated in Q3 to 6.4% from 5.6% previously. There are, therefore, some calls for an outsized 50bps rate hike as well as inflation continues to inch above the central bank’s 2-3% target range. An update on the latest growth and inflation projections will also be seen along with today’s rate decision. AUDUSD will need a clearly larger than expected rate hike of 50bps, or a very hawkish commentary with a 25bps rate hike to make any substantial gains. If RBA tows the line, focus shifts to USD and the Fed meeting on Wednesday. AUDNZD is also key to watch, with the 1.1000 handle on test. Eurozone GDP and inflation prints continue to make the ECB’s job tougher Eurozone inflation data for October YoY printed another record as it soared to 10.7% (prev. 9.9%), and well above the median Bloomberg expectation of 10.3%. Meanwhile, Q3 GDP growth slowed to 0.2% QoQ or 2.1% YoY (prev. 0.8% QoQ, 4.1% YoY). While mild whether and full storage hasn’t unleashed the full effects of energy shortages this year, the threat continues to loom and this could mean the macro story could deteriorate further. China PMIs and Hong Kong GDP growth send red flags China’s manufacturing and non-manufacturing PMI both plunged into contractionary territory in October with Covid curbs likely continuing to weigh on demand and manufacturing ahead of the CCP meeting. China's official manufacturing PMI declined to 49.2 in October after a brief rebound to 50.1 in September following a two-month decline. Meanwhile, services activity fell to 48.7 in October from 50.6 last month. Also, Hong Kong recorded its worst quarter in over two years, with Q3 GDP growth coming in at -4.5% YoY vs. expectations of -0.8%. The QoQ growth was also in negative territory at -2.6%, signalling recession concerns if such a performance continues despite the economy’s reopening. Key Japanese earnings on watch Big Japanese names Toyota (7203) and Sony (6758) report earnings today. While high inflation and interest rates remain a key consideration to watch for consumer spending trends, the effect of a weak yen will also be key to consider. Sony will be key to watch after the US tech tumble last week, and consensus is looking for a 10% drop in its operating profit from a year ago. Toyoto will likely continue to highlight the supply chain pressures, but possible buyback announcements could support.   For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-1-nov-01112022
Inflation slowdown may let Reserve Bank of Australia go for 50bp or inaction

The Australian Dollar To New Zealand Dollar (AUD/NZD) Pair May Move Lower

TeleTrade Comments TeleTrade Comments 01.11.2022 08:50
AUD/NZD retreats from intraday high after RBA’s Interest Rate announcement. RBA announced a 0.25% rate hike while matching market forecasts. Strong NZ Building Permits previously dragged the quote to fresh multi-day low. RBA Governor’s speech, NZ jobs report and RBNZ’s Orr will be important to defend the buyers. AUD/NZD fails to extend the early Asian session rebound from a multi-day low as it drops back to 1.1000 after the Reserve Bank of Australia’s (RBA) monetary policy decision on Tuesday. RBA matches the broad expectations while easing the rate hike trajectory with the 25 basis points (bps) of a lift to the benchmark interest rate, to 2.85% at the latest. Also read: RBA announces another 25 bps OCR rate hike in November Earlier in the day, New Zealand’s seasonally adjusted Building Permits for September jumped by 3.8% versus -1.2% expected and -1.6% prior. The same should have drowned the AUD/NZD pair to the lowest levels since July 15 before the risk-on mood triggered the cross-currency pair’s recovery. That said, the market sentiment improves during early Tuesday as the US Treasury yields remain sluggish. The same allows the US equity futures to print mild gains amid hopes of easing energy prices, as well as inflation. The reason for the cautious optimism could be linked to the downbeat US data and comments from US President Joe Biden and Russian leader Vladimir Putin. On Monday, the US Chicago Purchasing Managers’ Index and Dallas Fed Manufacturing Business Index for October came in at 45.2 and -19.4 versus 47.0 and -15.0 expected respectively. “US President Joe Biden on Monday called on oil and gas companies to use their record profits to lower costs for Americans and increase production, or pay a higher tax rate, as he battles high pump prices with elections coming in a week,” said Reuters. On the other hand, Russia’s Putin said he can set up a gas hub in Turkey ‘quite quickly’ and was sure gas contracts will be signed. The Russian leader also added that there will be many in Europe who want to do so. Looking forward, a speech from RBA Governor Philip Lowe will act as an immediate catalyst for the AUD/NZD traders to watch. Following that, New Zealand’s quarterly employment numbers and comments from Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr will be crucial for the pair’s direction. Should the strong fundamentals surrounding New Zealand joins hawkish comments from RBNZ and firmer NZ jobs report, the pair has a further downside to track. Technical analysis Although the 200-DMA defends AUD/NZD bears around 1.1005, the pair’s recovery remains elusive unless staying comfortably beyond the support-turned-resistance line stretched from November 2021, around 1.1170 by the press time.
The AUD/USD Pair’s Downside Remains Off The Table

Aussie Bulls Were Strengthened By The Positive Data

TeleTrade Comments TeleTrade Comments 01.11.2022 09:06
AUD/USD has slipped sharply to near 0.6420 for the second consecutive 25 bps rate hike An upbeat Caixin Manufacturing PMI data also supported the antipodean. The DXY has slipped to 111.30 as investors shrugged off uncertainty ahead of Fed policy. The AUD/USD has witnessed a steep fall to near 0.6420 pair as the Reserve Bank of Australia (RBA) has hiked its Official Cash Rate (OCR) by 25 basis points (bps) for the second time. The decision has remained in line with the projections and the Official Cash Rate (OCR) has increased to 2.85%. RBA Governor Philip Lower has preferred a less-hawkish policy approach to sustain economic prospects in accordance with the primary objective of brining price stability. This week, the Australian Bureau of Statistics reported the inflation rate for the third quarter at 7.3%, higher than the consensus of 7.0% and the prior release of 6.1%. Responses were mixed from economists on rate projections in between the continuation of a 25 bps rate hike as reported in October or a return to a 50 bps rate hike structure. In early Tokyo, aussie bulls were also strengthened by the release of upbeat Caixin Manufacturing PMI data. The economic data landed higher at 49.2 vs. the projections of 49.0 and the prior release of 48.1. It is worth noting that Australia is a leading trading partner of China and rising manufacturing activities in the dragon economy support antipodean. Meanwhile, the US dollar index (DXY) has witnessed a steep fall to near 111.30 as uncertainty ahead of the Federal Reserve (Fed)’s monetary policy has been shrugged off. S&P500 futures have rebounded in the Tokyo session after a bearish Monday. The 500-stock basket has recovered half of its Monday’s losses and is eyeing more gains ahead. Also, the 10-year US Treasury yields have dropped to 4.03%. As per the projections, Fed chair Jerome Powell will hike the interest rates by 75 bps for the fourth time as inflationary pressures haven’t shown evidence of exhaustion yet.
Rates Spark: Action at Both Ends of the Curve - US 10yr Treasury Yield and European Rates

The Interest Rate Decision By The Reserve Bank Of India (RBI) Ahead

InstaForex Analysis InstaForex Analysis 01.11.2022 09:10
USD/INR is heading towards 83.00 despite a steep fall in the DXY. Goldman Sachs sees the terminal rate at 5% beyond the Fed’s projected rate of 4.8%. RBI policymakers will also discuss the inflation report for the first time in the monetary policy framework. The USD/INR pair is hovering around 82.80 after a sheer upside and is aiming to reclaim the round-level resistance of 83.00. The asset is scaling higher despite a steep fall in the US dollar index (DXY) as risk-off faded. A rebound in the positive market sentiment has supported S&P500 futures. The 500-stock basket has managed to recover half of its Monday gains. Alpha generated by US government bonds has trimmed despite rising bets for a fourth consecutive 75 basis point (bps) rate hike by the Federal Reserve (Fed). The 10-year US Treasury yields have dropped to 4.03%. Apart from the Fed’s interest rate hike, guidance on policy tightening will also be crucial. A rate hike by 75 bps will push interest rates to 3.75-4%, which will inch current interest rates near the terminal rate projected near 4.80%. A report from Goldman Sachs cites that the US central bank could go beyond its desired terminal rate of 4.75% to 5%. The road to a 5% terminal rate will go through the phases of 75 basis points (bps) this week, 50 bps in December, and 25 bps in February and March, the report added. On the Indian rupee front, investors are awaiting the interest rate decision by the Reserve Bank of India (RBI), which is due on Thursday. The RBI policy will be keenly watched as the inflation report will also be discussed for the first time since the implementation of the monetary policy framework in 2016. It is worth noting that RBI Governor Shaktikanta Das has failed in keeping the inflation rate near the desired rate of 4% consecutively for three quarters.
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

The NZD/USD Prices Has Strengthen Ahead Of The Key Events

TeleTrade Comments TeleTrade Comments 01.11.2022 09:23
NZD/USD takes the bids to refresh intraday high, bracing for the biggest daily gains in a week. Upbeat New Zealand Building Permits, softer yields direct buyers towards monthly resistance line. US ISM, S&P Global PMIs precede speech from RBNZ’s Orr, New Zealand Q3 jobs report to entertain pair traders. Hawkish hopes from RBNZ lure bulls amid mixed concerns over the Fed. NZD/USD bulls attack the 50-DMA resistance for the first time since late August as it cheers the US dollar pullback during early Tuesday. In doing so, the Kiwi pair grinds higher around 0.5865 while bracing for the biggest daily gains in a week. That said, the US Dollar Index (DXY) slides to 111.05 during the first loss-making day in four while the benchmark 10-year Treasury yields fade two-day uptrend by making rounds to 4.05% of late. In addition to the broad US dollar weakness, strong data from New Zealand (NZ) and hawkish hopes from the Reserve Bank of New Zealand (RBNZ) also support the NZD/USD pair’s recent upside moves. Earlier in the day, New Zealand’s seasonally adjusted Building Permits for September jumped by 3.8% versus -1.2% expected and -1.6% prior. Additionally, China’s Caixin Manufacturing PMI, 49.2 in October versus 49.0 expected and 48.1 prior, also favored the Kiwi pair’s run-up. Firmer sentiment in China, amid hopes of more stimulus, also strengthen the NZD/USD prices during a sluggish day heading into the key data/events. “The safe-haven greenback got some support from overnight losses on Wall Street, but a rise in US stock futures and firmness in Asian stocks, led by China, scuppered that demand on Tuesday. Lower long-term US Treasury yields also removed a crutch for dollar strength,” stated Reuters. Moving on, quarterly employment numbers and comments from Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr will be crucial for the pair’s direction. Should the strong fundamentals surrounding New Zealand joins hawkish comments from RBNZ and firmer NZ jobs report, the pair has a further upside to track. It should be noted, however, that the Fed’s hawkish commentary and hesitance to discuss slow rate hikes starting from December might bolster the US dollar and weigh on the quote. Furthermore, the scheduled prints of the US ISM Manufacturing PMI and S&P Global PMIs for October might also entertain traders. Technical analysis NZD/USD pokes the 50-DMA hurdle for the first time since August but the recently firmer RSI and bullish MACD signals favor the buyers to cross the immediate moving average resistance near 0.5855. However, an upward-sloping trend line from October 06, close to 0.5880 at the latest, appears a tough nut to crack for the pair buyers. Alternatively, pullback remains elusive unless breaking the 0.5700-5695 support confluence including the 21-DMA and a three-week-old rising trend line.
The Upside Of The EUR/USD Pair Remains Limited

Analysis Of The EUR/USD Pair By Miroslaw Bawulski

InstaForex Analysis InstaForex Analysis 01.11.2022 09:29
Yesterday was a pretty good trading day. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 0.9930 level in my morning forecast and advised making decisions on entering the market there. Everything happened by analogy with last Friday, so nothing good could be obtained from the received signal in the first half of the day. A decline and breakdown of 0.9930 with a reverse test from the bottom up have led to an entry point for selling the euro, however, the pair went further down, which led to fixing losses. The US session turned out to be much better: a breakthrough and reverse test from below 0.9913 gave a sell signal, which resulted in a downward move by more than 35 points. The bulls protecting support at 0.9875 and a false breakout on it - all this led to long positions and the pair moved up by 20 points. When to go long on EUR/USD: Yesterday's eurozone GDP report gave confidence that the economy will actually contract by the end of the year and this is unlikely to be avoided. Inflation growth continued in October and exceeded 10.7%, which will force the European Central Bank to continue acting aggressively: raising rates, while counting on a quick return of consumer prices to an acceptable level. Today there are no statistics that could somehow turn the market, so it is possible that the euro will be able to return to the opening levels of the week before the Federal Reserve meeting, the results of which will be known tomorrow. If the pair goes down, forming a false breakout in the area of the nearest support at 0.9913 will be an excellent reason to build up long positions with the prospect of the euro's further recovery along the trend towards 0.9954 and 1.0000. We can talk about new attempts by the bulls to strengthen market control after the breakout of parity and the test from the down up. A breakthrough of 1.0000 would hit bearish stops and form a buy signal with the possibility of a push higher to the 1.0042 area, strengthening the bullish trend. An exit above 1.0042 will serve as a reason for growth to the area of the weekly high of 1.0090, where I recommend taking profits. In case the pair drops and bulls fail to protect 0.9913, the pressure on the euro will reverse, thus causing another slump. In this case, it will be wise to go long on a false breakout near 0.9875. It is also possible to buy the asset just after a bounce off 0.9849, or even lower - 0.9816, expecting a rise of 30-35 pips. When to go short on EUR/USD: The bears have managed to prove themselves, but have lost all the advantage in today's Asian session. It's more like running stops before key US data, so don't be surprised if the market moves against common sense in the coming days, of which there is very little in it. Today, bears should primarily protect the resistance at 0.9954, just below which are moving averages, playing on their side. It would be better to open short positions after a false breakout of this level after obscure statistics on the German import price index, which will provide an excellent entry point, allowing a return to 0.9913. If the pair settles below this level and upwardly tests it, traders may go short to push the price to the 0.9875 area, where bears may face serious obstacles. The farthest target is located at 0.9849, where I recommend taking profits. If EUR/USD moves up during the European session and bears fail to protect 0.9954, demand for the pair will jump, thus prolonging the upward trend. In this case, bears should remain cautious. They may open positions after a false breakout of 1.0000. It is also possible to go short after a rebound from the monthly high of 1.0042 or higher – from 1.0090, expecting a decline of 30-35 pips. Signals of indicators: Moving averages Trading is performed below the 30- and 50-day moving averages, which shows that the pair is still under pressure. Note: The period and prices of moving averages are considered by the author on the one-hour chart, which differs from the general definition of the classic daily moving averages on the daily chart. Bollinger Bands If the euro/dollar pair rises, the upper limit of the indicator located at 0.9935 will act as resistance. If the pair drops, the lower limit of the indicator will act as support. Description of indicators Moving average (moving average, determines the current trend by smoothing volatility and noise). The period is 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing volatility and noise). The period is 30. It is marked in green on the graph. MACD indicator (Moving Average Convergence/Divergence - convergence/divergence of moving averages). A fast EMA period is 12. A slow EMA period is 26. The SMA period is 9. Bollinger Bands. The period is 20. Non-profit speculative traders are individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions are the total number of long positions opened by non-commercial traders. Short non-commercial positions are the total number of short positions opened by non-commercial traders. The total non-commercial net position is a difference in the number of short and long positions opened by non-commercial traders.   Relevance up to 07:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325882
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

US 10-Y Treasury Yields Have Eased Back | Airbnb Expects Revenues To Increase

Saxo Bank Saxo Bank 01.11.2022 09:42
Summary:  Risk sentiment remains near the local highs heading into tomorrow’s FOMC meeting, where the market is hoping for guidance that suggests a downshift in the pace of tightening. Another micro-hike of 25 basis points from the RBA increases the sense that more central banks are set to slow their fight on inflation via rate hikes. Elsewhere, unconfirmed stories swirling overnight in China that that Covid restrictions are set to be lifted saw a potent rally in Chinese equities.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Momentum is trying to come back into US equities after yesterday’s retreat with S&P 500 futures trading around the 3,902 level. A higher close today could set in motion an extended rally into tomorrow’s FOMC rate decision lifting expectations for the Fed to signal a slowdown in rate increases. Given the latest macro figures we have gotten this might still be too early for the market to expect this, but if the Fed confirms the ‘peak hawkishness’ narrative then the 4,000 level in the S&P 500 futures is not outrageous. Euro STOXX 50 (EU50.I) Strong earnings from BP lifting sentiment in early trading in addition to positive spillover effects from the Chinese equity session seeing Hang Seng futures 6.1% higher on unconfirmed news that Chinese policymakers are considering phasing out its strict Covid policy. STOXX 50 futures are pushing higher this morning trading around the 3,649 level, which is the highest level since 13 September. The market is increasingly adjusting to the ‘peak hawkishness’ theme and if momentum extends here the 200-day moving average at the 3,675 level is the big area to watch out for. FX: USD on its back foot as market hopes for dovish downshift at FOMC meeting The market’s hope for a dovish downshift in the Fed’s guidance is a bit nuanced, as the expectations for the coming handful of meetings are back near the cycle highs, with the Fed funds priced to reach nearly 5.00% at the March or May FOMC meeting next year, while expectations farther out into next year and in 2024 are 25 or more basis points from the cycle highs. But with the USD on its back-foot and risk sentiment clearly unafraid of the Fed at the moment, the surprise side this Wednesday would be a stern message from the Fed that checks sentiment. Watching parity in EURUSD as an important psychological barometer, 1.1500 in GBPUSD, which was briefly broken yesterday, and eventually 145.00 in USDJPY and 7.25 area in USDCNH if the sudden USD drop overnight on hopes that China Covid policy is set for relaxation sticks and follows through. HG Copper (HGZ2) recovered all of Monday’s losses during Asian trading ...partly driven by a report that a “Reopening Committee” has been formed led by a Politburo Standing Member. The committee is reviewing data to assess various opening scenarios, targeting a March 2023 reopening. In addition to a weakening dollar and demand towards renewable energy, the copper market is being supported by persistent supply challenges highlighted by top supplier Codelco lowering its annual guidance for the second time in three months. The futures price remains stuck within a narrowing trading around $3.45 and looks poised for a breakout soon. Given the latest developments the risk of an upside break has risen. Gold (XAUUSD) trades higher … after falling for a third consecutive day on Monday, thereby extending its monthly losing streak to seven, the longest since the late 1960’s. The market bounced with support from lower bond yields and a softer dollar but as a minimum the yellow metal needs to break above $1730 before an end to the month-long downtrend can be called. The WGC reported that central banks bought a record 400 tons during the third quarter, more than quadruple the amount of a year earlier, thereby more than offsetting the 227 tons reduction in holdings across bullion-backed ETFs Crude oil (CLZ2 & LCOZ2) Crude oil trades higher within the established range after advancing with the broader market overnight as OPEC+ begins to cut production by around 1.2 million barrels per day, a decision that has been driven by excess supply according to its secretary-general. OPEC also released its World Oil Outlook in which they estimate demand will climb 13% to reach 109.5mb/d in 2035, then hold around that level for another decade. A weaker global economic growth hurting demand, OPEC+ production cuts and EU sanctions on Russian crude from December have all clouded the outlook, thereby supporting the current rangebound price action. Focus on Wednesday’s FOMC meeting and its potential impact on the dollar. Brent has since the September low several times been bouncing off trendline support, currently at $92 with resistance at $97.25 and $98.75. US treasuries (TLT, IEF) US 10-year treasury yields have eased back toward 4.00% after briefly touching above 4.1% yesterday. The focus on continued strength in bond markets will be the 3.90% pivot low yield posted last week, which could open up for a run to the 3.50% area, but would such a move represent a flight to safety (weak risk sentiment) or be celebrated as a sign of easing pressure on asset valuations. The key two event risks are the FOMC meeting Wednesday and how the yield curve reacts as well as the US jobs report on Friday, with the ISM Services Thursday also an interesting data point. What is going on? RBA hikes 25 bps, ups inflation forecasts, downgrades GDP and remains dovish Will the RBA stop hikes early? The RBA hiked the cash rate by 25bps (0.25%) as most expected to 2.85%, maintaining its dovish stance and bordering on restrictive, as it again acknowledged tighter financial conditions are yet to be felt in mortgage payments, but higher rates and inflation have put pressure on household budgets, causing a small amount of loan arrears and insolvencies. This rate hike cycle since May, has been the second fastest in history. We note the RBA was the first major central bank to under-deliver on rate hike expectations last month. The RBA raised its year-end 2022 CPI forecast from 7.8% to around 8%. The RBA revised its GDP forecast down, with growth of around 3% expected this year and 1.5% in 2023 and 2024. AUD knee-jerked lower on the decision, but recovered most of the lost ground against a stumbling US dollar in Asia, while sticking near local lows against the NZD. BP had exceptional Q3 in gas marketing and trading The European oil and gas major is lifting sentiment in Europe with strong net income beating expectations while cash flow generation is coming in below estimates. The energy company is increasing its buyback programme further by $2.5bn. Toyota down 2% on big operating income miss Japan’s largest carmaker is lowering its fiscal year production target as Volkswagen also recently did while posting a Q2 operating income of JPY 563bn vs JPY 765bn due to soaring materials costs and one-off items. The lower production target comes as the industry is still facing a chips shortage. UK Treasury says all Britons will have to pay more tax Chancellor Hunt said that “those with the broadest shoulders should be asked to bear the greatest burden” as the clear message from the new Sunak government, after the previous Truss-Kwarteng team triggered chaos in UK Gilts and sterling, is that financial stability is priority number one. The particulars of the new budget and policy will be laid out in a statement on November 17. US President Biden rails against oil companies not reinvesting profits, promising to raise taxes on profits that are “windfall of war”... ... saying that “The oil industry has not met its commitment to invest in America.” Such a move would require a bill to pass through Congress, however, which would likely prove difficult after the mid-term elections next week, if projections of a strong GOP showing flip the House and possibly the Senate into their hands, making for a largely lame-duck presidency for the next two years. Eurozone GDP and inflation prints continue to make the ECB’s job tougher Eurozone inflation data for October YoY printed another record as it soared to 10.7% (prev. 9.9%), and well above the median Bloomberg expectation of 10.3%. Meanwhile, Q3 GDP growth slowed to 0.2% QoQ or 2.1% YoY (prev. 0.8% QoQ, 4.1% YoY). While mild weather and full storage has not unleashed the full effects of energy shortages this year, the threat continues to loom, and this could mean the macro story could deteriorate further. Japan spent a record $42 billion to defend JPY in October The Finance Ministry is said to have another 10 trillion yen, or about $68 billion in ready cash left to throw after defending the JPY if pressure mounts again, although Japan’s central bank reserves are many, many multiples of these amounts, currently at $1.24 trillion. What are we watching next? Another small hike from a central bank (the RBA) encourages speculation of dovish shift at the FOMC meeting on Wednesday A number of recent central bank meetings of late, including the latest RBA meeting overnight, which saw Australia’s central bank only hiking rates 25 basis points for the second consecutive time, encourage the notion that the Fed is set for a dovish shift at this Wednesday’s FOMC meeting. Working against that narrative have been a number of possible “leaks” by journalists at key publications thought to have strong Fed sources, including the WSJ’s Nick Timiraos and a NY Times reporter, whose latest musings suggest that the Fed is not set to indicate any backing down from its hawkish message. An overtly defensive and hawkish FOMC meeting tomorrow could badly shock the market, which coming into this morning, at least, seems hopeful that the Fed is set to downshift its tightening guidance this week. Or at least, given that Fed expectations for the next six months or so are within a few basis points of the cycle highs, isn’t obviously afraid of the message the Fed is set to deliver: equities are up near the local highs after a ripping rally off October lows. Earnings to watch Today’s US earnings focus is AMD, Airbnb, and Uber with analysts expecting revenue growth of 31% y/y for AMD but EPS down 5% y/y as input pressures are eating up growth coming from strong product introductions. Airbnb is still riding the reopening tailwind with revenue expected to increase 26% y/y in Q3 and EBITDA expanding significantly to $1.39bn up from $888mn a year ago. Uber has a goal of becoming self-funded by 2024 and could achieve this based on the current trajectory. The company is expected to deliver revenue growth of 67% y/y and EPS of $-0.06 up from $-0.42 a year ago. Today: Toyota Motor, Sony, BP, Eli Lilly, Pfizer, AMD, Mondelez, Airbnb, Uber Wednesday: Suncor Energy, Nutrien, Novo Nordisk, Maersk, Vestas Wind Systems, GSK, Electronic Arts, Qualcomm, CVS Health, Estee Lauder, Booking, Fortinet, Ferrari, Albemarle Thursday: Verbund, Barrick Gold, Orsted, Novozymes, BNP Paribas, BMW, Enel, ING Groep, DBS Group, ConocoPhillips, Amgen, PayPal, Starbucks, Regeneron Pharmaceuticals, EOG Resources, Moderna, MercadoLibre, Block, Cloudflare, Coinbase Friday: Enbridge, Societe Generale, Intesa Sanpaolo, SoftBank, Amadeus IT Group, Duke Energy, Economic calendar highlights for today (times GMT) 0820 – Australia RBA Governor Lowe to speak 1400 – US Sep. JOLTS Job Openings 1400 – US Oct. ISM Manufacturing 2000 – New Zealand RBNZ publishes Financial Stability Report 2030 – API Weekly Report on US Oil Inventories 2145 – New Zealand Q3 Average Hourly Earnings 2145 – New Zealand Q3 Employment Change/Unemployment Rate 2230 – Canada Bank of Canada Governor Macklem to speak 0030 – Australia Sep. Building Approvals Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-1-2022-01112022
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The Prospects For Some Dip-Buying Around The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 01.11.2022 09:47
A combination of factors prompts aggressive selling around USD/CAD on Tuesday. Rising oil prices underpin the loonie and exert pressure amid a modest USD downtick. The downside seems limited amid recession fears and ahead of the FOMC meeting. The USD/CAD pair comes under heavy selling pressure on Tuesday and extends the overnight late pullback from the 1.3685 region, or a multi-day high. The downward trajectory drags spot prices to a fresh daily low, around mid-1.3500s during the early European session and is sponsored by a combination of factors. Crude oil prices regain positive traction after OPEC said that demand will be higher than initially expected in the medium to long term. This, in turn, underpins the commodity-linked loonie and exerts some downward pressure on the USD/CAD pair amid the emergence of some selling around the US dollar. The global risk sentiment gets a boost following the release of Chinese Caixin Manufacturing PMI, which improved to 49.2 in October from 48.1 previous. The upbeat market mood, along with speculations that the Fed will soften its hawkish stance amid signs of a slowdown in the US economy, is seen weighing on the safe-haven greenback. Investors, however, remain concerned about the fuel demand outlook in the wake of China's strict zero-COVID policy amid the resurgence of cases in Shanghai and Wuhan. This could act as a headwind for the black liquid. Apart from this, the protracted Russia-Ukraine war might also contribute to keeping a lid on any optimism in the markets. Furthermore, expectations that the Fed will deliver another supersized 75 bps rate hike at the end of a two-day policy meeting on Wednesday should limit the downside for the buck. This, in turn, supports prospects for the emergence of some dip-buying around the USD/CAD pair and warrants some caution for aggressive bearish traders. Market participants now look forward to the US economic docket, highlighting the release of the ISM Manufacturing PMI later during the early North American session. This, along with the broader risk sentiment, will influence the USD. Traders will further take cues from oil price dynamics to grab short-term opportunities around the USD/CAD pair.
The Japan Central Bank’s Decision Sent The Yen (JPY) Sliding

Technical Analysis Of The USD/JPY Pair By Petar Jacimovic

InstaForex Analysis InstaForex Analysis 01.11.2022 09:54
Technical analysis: USD/JPY has been trading downside and I found the breakout of the rising wedge in the background, which is sign that sellers are in control and that we might see further drop. Trading recommendation: Due to the breakout of the rising wedge pattern in the background, IO see potential for the further drop. Watch for the potential selling opportunities on the intraday rallies with the downside objective at the price of 145.20. MACD oscillator is showing fresh downside momentum, which is sign that sellers are taking control over buyers. Key resistance is set at the price of 148.85   Relevance up to 09:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299189
The USD/CHF Pair Returned To Its Previous Three-Day Recovery

There Is A Key Factor Exerting Downward Pressure On The USD/CHF Pair

TeleTrade Comments TeleTrade Comments 01.11.2022 10:08
USD/CHF snaps a three-day winning streak to over a one-week high amid modest USD weakness. Expectations for another 75 bps Fed rate hike should limit the USD losses and lend some support. A positive risk tone could undermine the safe-haven CHF and warrants caution for bearish traders. The USD/CHF pair comes under some selling pressure on Tuesday and snaps a three-day winning streak to over a one-week high touched the previous day. The pair maintains its offered tone through the early part of the European session and is currently flirting with the daily low, around mid-0.9900s. The US dollar struggles to capitalize on its gains recorded over the past three trading sessions amid speculations that the Fed will soften its hawkish stance amid signs of a slowdown in the US economy. In fact, the USD Index, which measures the greenback's performance against a basket of currencies, stalls its recent bounce from over a one-month low. This, in turn, is seen as a key factor exerting downward pressure on the USD/CHF pair. The downside for the greenback, however, seems limited amid firming expectations for another supersized 75 bps Fed rate hike at the end of a two-day policy meeting on Wednesday. Apart from this, a goodish recovery in the global risk sentiment seems to undermine the safe-haven Swiss franc. The combination of the aforementioned factors should lend some support to the USD/CHF pair, warranting some caution before placing fresh bearish bets. Market participants now look forward to the US economic docket, highlighting the release of the ISM Manufacturing PMI later during the early North American session. The data might influence the USD, which, along with the broader risk sentiment, should provide some impetus. The focus, however, will remain on the highly-anticipated FOMC policy decision, which will help determine the near-term trajectory for the buck and the USD/CHF pair.
China: PMI positively surprises the market

Lee Sue Ann And Quek Ser Leang Comment The USD/CNH Pair

TeleTrade Comments TeleTrade Comments 01.11.2022 11:24
USD/CNH remains side-lined within the 7.2200-7.3500 range for the time being, comment UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang. Key Quotes 24-hour view: “Our expectation for USD to ‘consolidate and trade within a range’ last Friday was incorrect as it rose to a high of 7.2840. USD traded on a firm note in early Asian trade today and could edge higher. However, upward momentum is not strong and any advance is unlikely to break 7.3100 (there is another resistance at 7.2980) Support is at 7.2720, followed by 7.2620.” Next 1-3 weeks: “In our latest narrative from last Thursday (27 Oct, spot at 7.1870), we indicated that the pullback in USD has room to extend to 7.1500, possibly 7.1300. USD then dropped to 7.1662 before rebounding strongly. The build-up in downward pressure faded quickly and USD is unlikely to pullback further. From here, USD could trade between 7.2200 and 7.3500 for a while.”
Ed Moya Reviews The Latest Market News With Jonny Hart (OANDA Podcast)

Saxo Bank's Podcast: Comments On Financial Conditions, The RBA Slow Pace Of Tightening And More

Saxo Bank Saxo Bank 01.11.2022 11:36
Summary:  Today we look at another jump in sentiment overnight as the RBA maintains its slow pace of tightening, increasing the drumbeat of expectations that central banks are set to ease off the policy tightening gas. But with risk sentiment having roared off the lows and financial conditions rapidly easing in the US, will the Fed have any choice but to stay on message and push back against this market rally? Elsewhere, we look at oil and natural gas, uninspired gold, stocks to watch as earnings this quarter are underperforming expectations, the increasingly busy macro calendar ahead and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-1-2022-01112022
The USD/JPY Price Seems To Be Optimistic

The Yen (JPY) Is Extremely Sensitive To The Difference In The Yield Of US And Japanese Bonds

InstaForex Analysis InstaForex Analysis 01.11.2022 11:45
The level of uncertainty in the market is off the scale ahead of tomorrow's Federal Reserve meeting, which affects the current dynamics of the dollar-yen pair. What helps USD? The US currency regained its wings at the beginning of the week. Yesterday, the DXY index soared by almost 0.8% and hovered around a weekly high at 112. The fuel for the greenback was the strengthening of hawkish market expectations ahead of the Fed's monetary policy meeting. The event at which American officials are to announce their decision on interest rates will be held on Wednesday � November 2. Now most traders expect that the Fed will raise the indicator by 75 bps for the fourth time in a row. The probability of such a scenario is estimated at 89.2%. The market's confidence in the hawkish determination of the Fed has a positive effect on the yield of 10-year US government bonds. Yesterday, the indicator rose to 4.06%, which put strong downward pressure on the JPY rate. The yen, which is extremely sensitive to the difference in the yield of US bonds and their Japanese counterparts, fell by more than 0.8% against the dollar on Monday and approached a 30-year low at 149. The sharp drop in the JPY was also facilitated by the dovish decision of the Bank of Japan, which was adopted at the end of last week. Despite the acceleration of inflation in the country, the BOJ has maintained an ultra-soft monetary rate, which implies negative interest rates. The fact that Japan left the indicator unchanged, while America is preparing for the next round of rate hikes, further intensified the divergence in monetary policy of these two countries. Most experts believe that until the monetary divergence begins to shrink, the yen will remain in a downtrend. However, judging by the forecasts regarding the Fed's future course, this will not last that long. What prevents the dollar? Now the main obstacle to the strengthening of the US currency is the growth of speculation about a possible slowdown in the pace of interest rate hikes. We are not talking about the November Fed meeting, but about more distant prospects. Weak US economic statistics, which were published last week, significantly increased market concerns about the impending recession in America. Most analysts believe that signs of weakening economic growth may force the Fed to reduce the degree of aggressiveness towards interest rates. Goldman Sachs analysts predict that in December the US central bank will raise the indicator not by 75 bps, but by 50 bps. More slowdown is expected in February and March next year. According to experts, rates will be raised by only 25 bps during this period. A less hawkish long-term scenario severely limits the dollar's growth, even though the USD may receive another boost from the Fed tomorrow. This morning, the greenback sharply moved to decline in all directions, also against the yen. At the time of preparation of the material, the USD/JPY major plunged by more than 0.5% and fell below the 148 mark. Pessimistic expectations of key US economic data contributed to the rapid decline of the asset. Today traders will focus on the ISM index of business activity in the manufacturing sector for October. According to preliminary estimates, the indicator will decrease to 50.0 against the previous value of 50.9. Investors fear that, if this forecast is implemented, the Fed may indeed change its anti-inflationary plans to less hawkish ones. In this case, the differential in US and Japanese interest rates will begin to shrink, which will help the yen strengthen against the dollar.   Relevance up to 08:00 2022-11-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/325894
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

Future Of The Cable Market (GBP/USD) Is Upward Movement

InstaForex Analysis InstaForex Analysis 02.11.2022 08:00
Trend analysis GBP/USD will move up in November from the closing of the October monthly candle at 1.1828 to the 38.2% retracement level at 1.1828 (red dotted line). Upon reaching it, the quote will continue rising to the 50.0% retracement level at 1.2286 (red dotted line), then roll back downwards. Fig. 1 (monthly chart) Comprehensive analysis: Indicator analysis - uptrend Fibonacci levels - uptrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - uptrend All this points to an upward movement in GBP/USD. Conclusion: The pair will have a bullish trend with no first lower shadow on the monthly white candle (the first week of the month is white) and no second upper shadow (the last week is white). Throughout the month, quotes will climb from 1.1464 (closing of the October monthly candle) to the 38.2% retracement level at 1.1828 (red dotted line), go further to the 50.0% retracement level at 1.2286 (red dotted line), then turn downwards. Alternatively, pound could rise from 1.1464 (closing of the October monthly candle) to the 38.2% retracement level at 1.1828 (red dotted line), then bounce down to the historical support level of 1.1443 (blue dotted line). Upward movement may resume from this level.   Relevance up to 14:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325952
The Euro May Attempt To Resume An Upward Movement

The Euro To US Dollar (EUR/USD) Pair Will Have A Bullish Trend

InstaForex Analysis InstaForex Analysis 02.11.2022 08:01
Trend analysis EUR/USD will increase this November, starting from 0.9882 (closing of the October monthly candle) to 1.0198, which is the 23.6% retracement level (red dotted line). Then, it will go to the historical resistance level of 1.0373 (blue dotted line), before turning down again. Fig. 1 (monthly chart) Comprehensive analysis: Indicator analysis - uptrend Fibonacci levels - uptrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - uptrend All this points to an upward movement in EUR/USD. Conclusion: The pair will have a bullish trend, with no first lower shadow on the monthly white candle (the first week of the month is white) and no second upper shadow (the last week is white). Throughout the month, quotes will climb from 0.9882 (closing of the October monthly candle) to the 23.6% retracement level at 1.019 (red dotted line), go to the historical resistance level of 1.0373 (blue dotted line), then turn down again. Alternatively, the pair could rise from 0.9882 (closing of the October monthly candle) to the 23.6% retracement level at 1.0198 (red dotted line), then bounce down to the historical support level at 0.9994 (dashed blue line). Upward movement may resume from this level.   Relevance up to 14:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325948
Apple Q3 2023 Results – Surpassing Expectations and Aiming for New Heights

Technical Analysis Of Both EUR/USD and GBP/USD Currency Pairs

InstaForex Analysis InstaForex Analysis 02.11.2022 08:04
Both EUR/USD and GBP/USD have been bearish lately, so it was not surprising that an upward correction is brewing. After that, another price decrease could occur. GBP/USD pulled back deeper, which creates more headroom for a decline. Since price movements form a three-wave pattern (ABC), where wave A represents the bearish pressure, traders could enter the market by selling up to the 50% retracement leel. Set stop loss at 1.16, then exit the market on the breakdown of 1.14271. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 11:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325923
The AUD/USD Pair’s Downside Remains Off The Table

How Can Move The Australian Dollar To US Dollar Pair Today

InstaForex Analysis InstaForex Analysis 02.11.2022 08:07
Yesterday, the Australian dollar once again tested the support of 0.6392 for strength, but at the same time, the resistance of 0.6453 was also tested, and the indicator line of the daily time scale was also tested. Settling under 0.6392 opens the target along the embedded line of the price channel at 0.6255. On a four-hour scale, the price is slightly above the support of 0.6392 and the MACD line. But weak Australian data released this morning prevents the price from exploiting its technical advantage. The index of manufacturing activity from AIG showed a decline in October from 50.2 to 49.6. Issuance of building permits decreased by 5.8% in September. The Marlin Oscillator, being a leading indicator, is developing in the downward trend area. Yesterday there was a reversal of the signal line of the oscillator from the zero line down. In general, we are waiting for the price to settle below 0.6392 and then move towards 0.6255.     Relevance up to 03:00 2022-11-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/325986
The GBP/USD Pair Started A New Round Of Downward Correction

The Price Of The GBP/USD Pair Will Have A Chance To Rise

InstaForex Analysis InstaForex Analysis 02.11.2022 08:11
Yesterday, the British pound settled under the level of 1.1500. It is trying to get over it again this morning. There is a repetition of the situation on September 5-8, when the price was winding up to the same level of 1.1500. But then the Marlin Oscillator was in the downward trend area and the price was below the MACD line, but now everything is different. Today's Federal Reserve meeting can push the pound under the MACD line (1.1330) and give it a downward momentum, at which, with a probability of 89.2%, the rate will be raised by 0.75%. On the four-hour chart, the price is already winding up on the MACD indicator line and also on the balance indicator line. The Marlin Oscillator is in negative territory, but close to the zero neutral line. The situation as a whole and in particular is neutral. We can only wait for the Fed's announcement and the market's reaction. Our main scenario assumes a decline, but the alternative gives the price a chance to rise to 1.1760 (July 14 low).       Relevance up to 03:00 2022-11-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325988
What's ahead of Euro against greenback today? Let's look at Stefan Doll's review

The Fed Will Be Raise The Rate And The Euro (EUR) Will Be Fall Further

InstaForex Analysis InstaForex Analysis 02.11.2022 08:13
Yesterday's PMI in the US was mixed, and investors, in anticipation of today's announcement of the Federal Reserve on the results of a two-day meeting, partly closed positions. The stock index S&P 500 fell by 0.41%, the correction against the dollar was short-lived. As a result, the dollar index fell by only 0.03%. The euro reached the range of target levels 0.9864 and 0.9950 by the shadows of the daily candle. With overcoming the MACD line (0.9840), the price will continue to decline to 0.9714. The Marlin Oscillator is in a neutral situation, preparing to go under the zero line at the same time as the price overcomes the support of the MACD line. On the four-hour chart, the price retested from below the MACD line. This is a technical sign of further decline. The retest took place without the price going above the balance line (red indicator), so this growth can be taken as a correction from the entire previous three-day decline. Marlin in negative territory. We are waiting for the Fed to raise the rate and the euro to fall further.   Relevance up to 03:00 2022-11-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325990
Analysis And Trips For Trading The GBP/USD Pair In Short And Long Positions

The Cable Market (GBP/USD): A Strong Bullish Move Is Expect

InstaForex Analysis InstaForex Analysis 02.11.2022 08:22
Early in the European session, the British pound (GBP/USD) is trading around the psychological level of 1.1500. We can see on the 1-hour chart that the pair is trading inside the downtrend channel which has been underway since October 26. GBP/USD pulled back from the highs of 1.1565 seen yesterday in the opening of the American session. The pair has found buyers at 1.1450, allowing the pair to return to levels close to 1.1500. Amid the positive sentiment for the GBP, seen during the Asian and European sessions, the instrument rose to the 21 SMA on the 4-hour chart (1.1551). Positive sentiment faded during the American session due to some upbeat data released in the US. The British pound is likely to trade within a range between 1.1501 (21 SMA) and 1.1460 (200 EMA) in the coming hours. Due to the fact that the market is awaiting the decision of the US Federal Reserve regarding the increase in the interest rate, the market could enter a consolidation phase. The market has already priced in the rate hike of 0.75%. However, speculators will be attentive to the speech that will be given after this announcement. If the Central Bank is more determined to raise its interest rate in the coming months, it will be bullish for the dollar, so the British pound could fall towards 2/8 Murray at 1.1230. On the contrary, if the bank hints that it is time to soften the pace of monetary tightening or that the next increases are below 0.75%, it could favor the British pound. Hence, GBP/USD could reach 4/8 Murray at 1.1718 or even reach the psychological level of 1.20. According to the 1-hour chart, the British pound has strong resistance at 1.1550 and strong support at 1.1420 (bearish channel). In case there is a sharp break in any of these sides, it could be a clear signal to buy or to sell. The eagle indicator reached the extremely oversold zone. If the pound trades above the 21 SMA or the 200 EMA, we could expect a strong bullish move that could push the price up to 1.1718 (4/8 Murray).   Relevance up to 05:00 2022-11-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299308
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

EUR/USD Pair: There Is Such A Strong Fundamental Background

InstaForex Analysis InstaForex Analysis 02.11.2022 08:28
Analysis of EUR/USD, 5-minute chart The euro/dollar pair continued its corrective movement on Tuesday as part of an uptrend, which after three days of falling still persists. However, yesterday the price overcame the Senkou Span B line and now there is only one support from below in the form of a trend line. If the price settles below it, then the long-term downward trend may resume, and the euro will again rush to its 20-year lows. And today, the price may overcome this line, as the results of the Federal Reserve meeting will be announced in the evening. The market has no doubts that the rate will rise for the fourth time by 0.75%, and this is a weighty argument for further strengthening of the US currency. Over the past 2-3 days, traders could already work out the rate hike "in advance", so today we can see the pair rise. However, a further fall cannot be completely ruled out either. Recall that the market can react to such important events in an unpredictable way. In regards to Tuesday's trading signals, the situation was quite interesting. At the very beginning of the European trading session, quotes bounced from the Senkou Span B line, afterwards they rose to the level of 0.9945. It was necessary to open a long position on this signal, and the profit was about 20 points. There were two bounces from the 0.9945 level, two sell signals. The first one was closed by Stop Loss at breakeven, and after the second one, the price overcame the Senkou Span B and almost reached the level of 0.9844, making it possible to earn another 60 points. This position should have been closed manually in the late afternoon. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of short orders initiated by non-commercial traders increased by 24,000, whereas the number of long orders declined by 2,700. As a result, the net position increased by 26,700 contracts. However, this could hardly affect the situation since the euro is still at the bottom. At the moment, professional traders still prefer the greenback to the euro. The number of buy orders exceeds the number of sell orders by 75,000. However, the euro cannot benefit from the situation. Thus, the net position of non-commercial traders may go on rising without changing the market situation. Among all categories of traders, the number of long positions exceeds the number of short positions by 19,000 (609,000 against 590,000). Analysis of EUR/USD, 1-hour chart The pair is moving upwards on the one-hour chart, however, it may change its direction today. The price is around 70 points from the trend line, so it will not be difficult to overcome it. Especially when there is such a strong fundamental background, like what we have for tonight. On Wednesday, the pair may trade at the following levels: 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as the Senkou Span B (0.9900) and Kijun-sen (0.9977). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. The European Union is set to publish an index of business activity in the manufacturing sector. Not the most important report or indicator. In the US we have the ADP report and in the evening - the results of the Fed meeting. The macroeconomic background will be quite weak during the day, but the market may trade actively ahead of the meeting. You need to be ready for any development of events. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate         Relevance up to 01:00 2022-11-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325978
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

The GBP/USD Pair Moved Without A Definite Direction

InstaForex Analysis InstaForex Analysis 02.11.2022 08:29
Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair tried to resume its upward movement on Tuesday, but after bouncing from the critical line, it fell. In general, we cannot say that the decline over the past few days has been strong. Rather, on the contrary, it was rather weak and with frequent rollbacks to the top. If you wish, it is quite easy to explain why the pair is moving this way, and at the same time why the euro is falling faster and stronger. The fact is that the European Central Bank meeting is already behind us, and the results of the Federal Reserve meeting will be announced today. Thus, the dollar already has good reasons to rise, which it does against the euro. In the case of the pound, the Fed meeting is not the only thing that is important, but also the Bank of England meeting, which will take place this Thursday, and at which the rate will also be raised. Therefore, the pound falls in general more slowly and weaker than the euro. We can only wait for both meetings of the central banks and see how the market reacts to them. A sufficient number of signals were formed on the 5-minute chart on Tuesday, but most of them turned out to be false. The pair moved without a definite direction during the European trading session, so three false signals were formed near the critical line. According to the rules of the trading system, traders could try to work out the first two. In the first case, the price went down 20 points, so Stop Loss should have been placed at breakeven. In the second case, it did not pass 20 points, so the position closed with a small loss when the price settled above the Kijun-sen line. A sell signal was also formed near the level of 1.1486, but it did not bring profit either, since the position was also closed by Stop Loss at breakeven. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group opened 3,200 long positions and closed 200 short positions. Thus, the net position of non-commercial traders increased by 3,400, which is very small for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 43,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? As for the total number of open longs and shorts, the bulls have an advantage of 18,000 here. But, as we can see, this indicator does not help the pound too much either. We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair is moving upwards on the one-hour chart, which so far looks quite convincing. The price went only slightly below the Kijun-sen line, which is not critical yet. However, Wednesday and Thursday can dramatically change the situation for the pair. Today we expect the dollar to rise, but it is rather difficult to say where the pound will end up on Friday. On Wednesday, the pair may trade at the following levels: 1.1060, 1.1212, 1.1354, 1.1486, 1.1649, 1.1760, 1.1874. Senkou Span B (1.1351) and Kijun-sen (1.1543) lines can also give signals if the price rebounds or breaks these levels. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. No interesting reports planned in the UK, and we only have the ADP report in the US, which rarely provokes the market to react. Thus, the key event of the day will be the Fed meeting late in the evening. Traders will have to leave the market as soon as it starts. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 01:00 2022-11-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325980
Bank of Canada keeps the rates unchanged. After the release of the US inflation, Fed's Barkin drew attention to cooling demand, but still strong labour market and inflation

The USD/CAD Pair Is Moving Towards The Bullish Level

TeleTrade Comments TeleTrade Comments 02.11.2022 09:06
USD/CAD bounces off intraday low to pare the first daily loss in five. Bullish chart formation keeps buyers hopeful but 200-SMA adds strength to the 1.3655-60 hurdle. Bears have a bumpy road to the south unless breaking 1.3495 level. USD/CAD remains mildly offered around 1.3605 ahead of Wednesday’s European session, posting the first daily loss in five at the latest. The Loonie pair’s weakness could be linked to its retreat from the 1.3655-60 resistance confluence comprising the 200-SMA and a downward-sloping trend line from October 13. The pullback moves, however, lack acceptance amid steady RSI, which in turn challenges the pair sellers. Even so, the one-week-old ascending support line, near 1.3540 by the press time, precedes the aforementioned triangle’s bottom, near 1.3495, to welcome the USD/CAD bears. Should the quote remains weak past 1.3495, the bullish chart formation gets defied, which in turn directs the USD/CAD pair towards the 61.8% Fibonacci retracement level of September-October upside, near 1.3340. Alternatively, recovery remains elusive unless the quote stays below the 1.3655-60 resistance confluence. Following that, multiple levels around 1.3700 and 1.3850 could challenge the USD/CAD buyers before directing them to the previous monthly high near 1.3980. It should be noted that the RSI is approaching the overbought territory and can poke bulls around 1.3980, if not then the 1.4000 threshold could act as an extra filter to the north. USD/CAD: Four-hour chart Trend: Limited downside expected
Underestimated Risks: Market Underestimating Further RBA Tightening

The Reserve Bank Of India (RBI) Isn’t Expected To Announce Any Major Change To Its Monetary Policy

TeleTrade Comments TeleTrade Comments 02.11.2022 09:11
USD/INR struggles for a clear directions despite pushing back bears. RBI’s likely inaction jostles with Fed’s 75 bps dovish hike to challenge traders, Reuters’ poll signals more pain for INR. Cautious optimism, sluggish yields test upside momentum ahead of FOMC. USD/INR remains sidelined around 82.70, mostly unchanged on the day, even as bulls try to defend the weekly gains ahead of the Federal Open Market Committee (FOMC) meeting. That said, the mixed sentiment and hopes of more pain for the Indian rupee (INR) appear to keep the buyers hopeful but the pre-Fed anxiety restricts the upside momentum amid a lack of major directions and an already priced-in 75 bps rate hike. Headlines from China appeared to have recently favored the market’s sentiment amid sluggish US Treasury yields. The Governor of the People’s Bank of China (PBOC), Yi Gang, recently crossed wires and stated that China's economy remains broadly on track. “We hope the housing market can achieve a soft landing,” added the policymaker. Additionally, an official from the China Banking and Insurance Regulatory Commission (CBIRC) also helped improve the mood while saying that the property sector is now "stable". The US 10-year Treasury yields remain sidelined near 4.05% at the latest as traders remain divided over the US central bank’s next move given the 75 bps rate hike and hopes favoring easy rate lifts from December. While portraying the mood, S&P 500 Futures snap a two-day downtrend to print a 0.20% intraday upside by the press time. On the other hand, the Reserve Bank of India (RBI) isn’t expected to announce any major change to its monetary policy during Thursday’s special meeting. India's rupee will recoup only some of its recent losses against the dollar over the coming year as the interest rate gap is set to widen further alongside a worsening current account deficit, according to a Reuters poll of FX strategists. It’s worth noting that the firmer US data and the recent rebound in oil prices also exert downside pressure on the INR, due to India’s reliance on energy imports and higher current account deficit. That said, WTI crude oil braces for the second weekly run-up as bulls approach $90.00. Further, the US JOLTS Job Openings increased to 10.717M in September versus the 10.0M forecast and upwardly revised 10.28M previous readings. Further, US ISM Manufacturing PMI increased to 50.2 in October versus 50.0 market forecasts and 50.9 prior. On the same line, final readings of the US S&P Global Manufacturing PMI for October rose past 49.9 initial forecasts to 50.4 but stayed below 52.0 readings for the previous month. Looking forward, the USD/INR traders need to pay close attention to how the Fed can defend the hawks despite announcing a 0.75% rate increase. The point to emphasize will be the rate lift mechanism from December. Technical analysis A two-week-old descending resistance line near 83.05 probes USD/INR bulls but the bears have a long road to travel before retaking control.
Technical Outlook Of The EUR/JPY Pair Movement In Short Term

Strength To The Downside Bias Of The EUR/USD Pair Is The Strongest Bearish

TeleTrade Comments TeleTrade Comments 02.11.2022 09:18
EUR/JPY breaks five-week-old support line during three-day downtrend. MACD prints the biggest bearish signal in a month. A daily closing below September’s peak becomes necessary for the buyers to leave the table. EUR/JPY drops half a percent as the bears keep reins around 145.80, down for the third consecutive day to early Wednesday morning in Europe. The cross-currency pair’s latest weakness could be linked to the seller’s ability to conquer an upward-sloping support line from September 26, now resistance around 146.15. Also adding strength to the downside bias is the strongest bearish MACD signal since October 03. That said, the EUR/JPY pair’s further downside needs to provide a daily closing below September’s peak of 145.63 to keep the sellers hopeful. Also acting as a downside filter is the 21-DMA level surrounding 145.15. In a case where the quote remains bearish below 145.15, the odds of its south-run towards 144.10-00 area comprising tops marked since October 20 can’t be ruled out. Alternatively, recovery moves need a daily close beyond the support-turned-resistance line around 146.15. Even so, a descending trend line from October 21, close to 147.50 by the press time, will act as the last defense of the bears. Should the EUR/JPY prices remain firmer past 147.50, the previous monthly high of 148.40 and the upper line of a 3.5-month-old bullish channel, around 149.10, will be in focus. EUR/JPY: Daily chart Trend: Further downside expected
Navigating Financial Markets: Insights on Central Bank Decisions and Currency Quotes

Unwillingness Of The Central Bank Of The Republic of Türkiye’s (CBRT) To Increase The Benchmark Interest Rates Is A Challenge For Lira (TRY)

TeleTrade Comments TeleTrade Comments 02.11.2022 09:22
USD/TRY grinds higher around all-time peak amid mixed concerns. Turkish inflation problem versus CBRT’s resistance for rate hike propels the prices. Sluggish yields and indecision over Fed’s move from December challenge buyers. Wednesday’s FOMC, Thursday’s Turkish CPI will be crucial for near-term directions. USD/TRY bulls keep the reins around the all-time high of 18.65, near 18.60 by the press time of early Wednesday morning in Europe. In doing so, the Turkish lira (TRY) pair fails to cheer the broad US dollar weakness amid fears of more pain for the TRY. The fundamental challenge for the TRY could be linked to the Central Bank of the Republic of Türkiye’s (CBRT) hesitance to increase the benchmark interest rates even as the Turkish Consumer Price Index (CPI) refreshed an all-time high of 83.45 in September. It’s worth noting that the inflation number is expected to new the record top with the 85.6% figure for October, expected to be released on Thursday. It should be noted that the successive eighth monthly fall in the Turkish factory activity in October adds strength to the USD/TRY upside. On the same line were the US JOLTS Job Openings which increased to 10.717M in September versus the 10.0M forecast and upwardly revised 10.28M previous readings. Further, US ISM Manufacturing PMI increased to 50.2 in October versus 50.0 market forecasts and 50.9 prior. On the same line, final readings of the US S&P Global Manufacturing PMI for October rose past 49.9 initial forecasts to 50.4 but stayed below 52.0 readings for the previous month. Alternatively, headlines from China appeared to have recently favored the market’s sentiment amid sluggish US Treasury yields, which in turn probes the USD/TRY bulls. The Governor of the People’s Bank of China (PBOC), Yi Gang, recently crossed wires and stated that China's economy remains broadly on track. “We hope the housing market can achieve a soft landing,” added the policymaker. Additionally, an official from the China Banking and Insurance Regulatory Commission (CBIRC) also helped improve the mood while saying that the property sector is now "stable". The US 10-year Treasury yields remain sidelined near 4.05% at the latest as traders remain divided over the US central bank’s next move given the 75 bps rate hike and hopes favoring easy rate lifts from December. While portraying the mood, S&P 500 Futures snap a two-day downtrend to print a 0.20% intraday upside by the press time. To sum up, USD/TRY remains on the bull’s radar ahead of the top-tier data/events. Technical analysis Although the 19.00 threshold restricts short-term USD/TRY upside, sellers remain absent unless witnessing a clear downside break of the fortnight-long support line near 18.50.
The Challenge to the Dollar: De-dollarisation and Geopolitical Shifts

The Fed Meeting Ahead Is A Key In The Reversal Of Markets

InstaForex Analysis InstaForex Analysis 02.11.2022 11:01
Large movements may be seen in markets today after the release of Fed's decision on monetary policy. Earlier, many expressed their belief that the US central bank will make its last rate increase this month, signal an easing, then take a short pause to assess the impact of the previous rate hikes on the country's economy. If this really happens, the US stock market will bounce up, with the trend shifting from bearish to bullish. But if the opposite occurs and the Fed makes it clear that it is too early to change their view on the pace of rate hikes, another wave of sell-offs will take place, especially in the stock markets, while US Treasury yields will rise. In short, the Fed meeting ahead is a key in the reversal of markets, though a lot will depend if the US economy is entering a recession or not. Another factor is the quarterly reports of companies. As for dollar, the change in the Fed's policy will put pressure on it, possibly causing noticeable changes. The behavior of Treasury yields will also affect USD, in which a decline will lead to a price decrease. If there are no changes, dollar will climb further, while gold prices may update recent lows. So far, a change in the Fed's policy is highly likely since members have recently stated their support on the slowdown of rate hikes. The stabilization of consumer inflation may also convince the central bank to resort to this option. Forecasts for today: EUR/USD A change in the Fed's policy could push the pair above 0.9900, to 1.0050 and then to 1.0150. USD/CAD The weakening of dollar and increase in oil prices could bring the pair down to 1.3500 after falling below 1.3570.     Relevance up to 08:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326010
Bank of England survey highlights easing price pressures

The Bank Of England (BoE) Starts Selling Bonds | Airbnb Down, Sony Up

Swissquote Bank Swissquote Bank 02.11.2022 11:50
Jay Powell will probably hammer the dovish hopes, and the latest risk rally when he speaks following the FOMC decision today. Fed In preparation for an unpleasantly hawkish Fed statement today, the US 3-month yield spiked above the 4.20% mark, the level it was normally supposed to be in 18 months, the 2-year yield returned above the 4.50% mark, the US dollar index advanced and the US equities sold off, as yields jumped. The ADP report is due a couple of hours before the Fed decision, and is expected to have eased below 200’000 in October. Any positive surprise will likely further boost the Fed hawks, and dampen the mood in risk assets. China In China, stocks extend gains on an unverified social media post that China will end its Covid measures. The Chinese foreign ministry spokesman said he was unaware of the plan. Disneyland in Shanghai was shut with people in it, after a Covid case was found in the park… I wouldn’t cry victory just yet! UK In Britain, the first day of bond selling from the Bank of England was a success. The BoE sold 1$750 million worth of bonds, demand exceeded offer, gilt yields pulled lower and sterling was steady. Airbnb Airbnb fell 5% post-market on disappointing Q4 outlook, Sony jumped near 10% in NY as softer yen helped boosting sales, BP announced the second biggest quarterly results, while Abiomed jumped 50% after Johnson & Johnson announced to buy the company. Watch the full episode to find out more! 0:00 Intro 0:18 Will Powell save the risk rally? 2:22 Market update 4:17 Oil stocks extend rally, BP announce strong profits 5:45 Airbnb down, Sony & Abiomed up 7:11 BoE starts selling bonds successfully 8:42 EUR, XAU faith in Powell’s hands… Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #FOMC #rate #decision #USD #ADP #US #jobs #report #crudeoil #ExxonMobil #Chevron #BP #China #covidzero #UK #QT #GBP #BoE #Sunak #EUR #XAU #Sony #Abiomed #JohnsonJohnson #Airnbn #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___  Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH      
The Gold Rally Is Continuing To Stall, This Could Be A Good Year For Crude Oil

Can We See An Improvement In Supplies In The Black Sea Region? | Crude Oil Is Growing

Saxo Bank Saxo Bank 02.11.2022 11:57
Summary:  A surprisingly strong survey of US job openings yesterday suggests that the US labor market remains extremely tight, potentially continuing to feed inflationary pressures. Today sees the latest FOMC meeting, at which the Fed will have to grapple with guidance and whether to flag the much-anticipated possible downshift from 75 basis point hikes at the December meeting. Given the recent easing of financial conditions and strong risk sentiment, the Fed may try to lean against the market and hawkishly keep all options on the table. Industrial metals run higher on speculation China is preparing to ease Covid rules.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The fear of recession has eased quite a bit in October and as a result equities have rallied from their lows in October. S&P 500 futures are trading around the 3,868 level this morning as the US 10-year yield has moved higher above 4% again. The big event is tonight’s FOMC rate decision which will prove to be a delicate balancing act for the Fed keeping financial conditions tight enough but smooth the transition to this higher level of interest rates without breaking the market. If the market interprets a dovish tilt tonight the 4,000 level is quickly the main focus point in the S&P 500 futures. Euro STOXX 50 (EU50.I) STOXX 50 futures touched the 200-day moving average yesterday before retreating, but this morning the index futures are continuing higher trading around the 3,661 level, which is just below the 200-day moving average. The 3,800 level in STOXX 50 futures could be the next big level to watch if momentum continues. European equities are enjoying tailwinds from easing energy and electricity markets and better than expected GDP reports in Q3 showing that the European economy can absorb the input cost shocks for now. FX: USD rallies on very strong JOLTS survey, eyes FOMC The greenback rebounded yesterday on the very strong September JOLTS jobs openings survey, which jumped sharply from the large August dip (see more below), helping US treasury yields back higher. See the FOMC meeting preview under What are we watching next? below. Today and in the wake of the important US jobs data tomorrow, the pivotal areas for EURUSD are perhaps 0.9850 and parity on the daily/weekly close, for GBPUSD, the 1.1400-1.1500 area is the zone of contention, and in AUDUSD, 0.6350-0.6530. USDJPY will be sensitive to any sharp move in US treasury yields, leaning toward 150.00 if yields jump in the wake of tomorrow’s US jobs report or challenging 145.00 if the Fed fails to surprise hawkish today and the jobs data is weak. Gold (XAUUSD) Gold reached $1657 before running into sellers as bond yields rose following stronger US economic data. The dollar and yields developments continue to haunt the metal, especially ahead of today’s critical Fed meeting. Silver, initially enjoying a trifecta of support from rising gold and copper as well as the weaker dollar, traded up to once again challenge resistance at $20/oz before running out of steam. Crude oil (CLZ2 & LCOZ2) Crude oil trades higher for a second day with WTI challenging a recent high at $90 and Brent moving closer to $97.25 resistance. Oil prices initially received a boost from China reopening speculation, the weaker dollar and OPEC+ production cuts before extending gains after the API reported a bumper 6.5-million-barrel drop in crude inventories. Apart from today’s official inventory report from the EIA, crude oil traders will turn their attention to today’s FOMC meeting given the potential impact the rate decision and comments may have on the dollar and the general level of risk sentiment. US treasuries (TLT, IEF) The key US 10-year treasury yields pulled back above the important 4.00% level after the strong September jobs openings survey out of the US yesterday, but far more important are today’s FOMC meeting and further incoming data, discussed below. The recent price action makes it clear that the 3.90% area is important resistance for bond yields and at the shorter end of the curve, the 5.00% level will be an important focus, given that the market has been unwilling to take Fed expectations more than a couple of basis points beyond that level as it continues to see the Fed cutting rates by the end of next year. What is going on? Metals run higher on China speculation Copper and nickel led a surge in base metals on speculation - which was later denied - that Beijing is preparing to ease Covid rules. However, metals held gains after China’s outgoing premier Li Keqiang said China will strive for a "better" economic outcome and promote stable, healthy and sustainable development, saying China’s economy is showing signs of stabilizing, as well as “rebounding momentum" thanks to stimulus. Developments showing the potential support for industrial metals when restrictions are being lifted, and it brought the focus back on supply issues in Copper, with inventories running low on exchanges and major producers struggling to meet their production targets. The BCOM Metal index jumped 3.4% with steel and iron ore prices also receiving a bid. HG copper’s further advance will be challenged by multiple resistance levels between $3.55 and $3.78. European earnings This morning we have got strong results from Novo Nordisk, Maersk, and GSK, while the wind turbine maker Vestas misses big on revenue and EBIT. Vestas is also adjusting its FY EBIT to –5% from previously –5% to 0%. Novo Nordisk reports Q3 revenue of DKK 45.6bn vs est. DKK 44.4bn and EBIT of DKK 20.2bn vs est. DKK 19.2bn in addition to increase its sales forecast due to strong demand for its obesity drug Wegony. Maersk is still enjoying strong earnings beating estimates on EBIT in Q3, but the container shipping company is lowering its forecast for container volume and in general the market is expecting a slowdown in 2023. US job openings and ISM manufacturing complicate Fed’s message US job openings saw an unexpected rebound in September amid low unemployment, suggesting more wage gains could be in store. JOLTS job openings came in higher at 10.7 million in September from a revised 10.3 million in August. This likely thrashes expectations of any material downshift from the Fed after today’s widely expected 75bps increase. Meanwhile, October's ISM manufacturing index also remained in expansion at 50.2, albeit falling from last month’s 50.9. However, disinflationary trends were emphasised as the index of prices paid fell to an over 2-year low. Still, sticky shelter and services inflation remains materially high suggest still-higher interest rates remain on the horizon. Terminal rate pricing for Fed funds futures has picked up again to 5% levels, and it would be hard for the Fed to push it any higher at this point, but what it can clearly hint at today is pushing out of the rate cut expectations for next year. Read our full FOMC preview here for further insights. Lack of insurance halted UN Black Sea shipments, but progress being made The UN halted grain shipments from Ukraine's Black Sea ports on Wednesday, after Russia warned ships weren't safe using the route and demanded guarantees from Ukraine. However, reports suggested early on Wednesday that an agreement had been reached and ships will start to sail again from Thursday, as pressure on Russia continues to build. We continue to watch crop and fertilizer prices, as a meaningful reversal could come through if we see improving shipments across the Black Sea region. AMD earnings supported by servers despite weak PC sales Advanced Micro Devices rose in the after-hour trading as it reported better than estimated Q3 earnings, although issuing guidance that missed analysts’ expectations. EPS came in $0.67 vs estimated $0.65, revenue $5.57B vs estimated $5.62B. Guidance suggested AMD is expecting strong growth in its server chip business in the coming quarters. Q3 results were in-line with a warning issued by AMD on October 6 which helped to reset expectations, as weak PC sales continued to underpin. Airbnb drops on disappointing guidance Airbnb reported its highest revenue and most profitable quarter but a muted Q4 outlook as consumer preferences are shifting back to cities which tend to have lower rates based on smaller sized spaces. Q3 revenue rose 29% to $2.88B, estimated $2.84B. Net profit rose 45.6% to $1.21B. But the company said it expected bookings to moderate after a bumper third quarter. Sony surges on profit beat Weak yen propped up revenues for Sony and also nudged up the fiscal year profit outlook, pushing shares higher in early trading. Q2 sales came in at 2.75tr yen, est. 2.67 tr yen while operating income was 344bn yen vs. 280.66bn yen expected. Operating profit beat was broad-based, except in games. Australian home-lending falls more than expected in September House lending in Australia fell 8.2% YoY in September (far more than the market expected) while building construction lending fell 36.6% YoY, with the weaker data sets coming out just a day after the RBA remained dovish - raising Australia’s official cash rate by 25bps (0.25%) to 2.85%. Yesterday the RBA acknowledged tighter financial conditions and the ‘full effect’ of increased interest rates are yet to be felt in ‘mortgage payments’, but the rate hikes since May, combined with higher inflation have already put pressure on household budgets. What are we watching next? FOMC meeting – Fed may want to keep a low profile, but can’t afford to be seen dovish The September JOLTS jobs openings data point yesterday was the latest to suggest that the Fed will have a hard time pre-committing to any slowdown in the pace of its policy tightening after the 75-basis-point hike that is priced in for today’s meeting. The December 14 FOMC meeting odds have not shifted much over the last couple of weeks, as investors still favour a downshift to a 50-basis-point move then and another 50 basis points of tightening early next year over the space of a couple of meetings. To surprise hawkish today, the Fed may have to make it very clear that it is willing to continue tightening beyond current expectations and beyond its September forecasts to boost the greenback via rate guidance, but is probably also reluctant to pre-commit to anything. Pointing to high reactivity to further incoming data may be one way to achieve this. That will then mean extreme volatility on the next bits of Incoming data ahead of the December meeting, starting with the ISM Services tomorrow and then the October jobs report this Friday and two more CPI releases before December 14. Earnings to watch Today’s US earnings focus is Estee Lauder, Booking, Fortinet, and Albemarle. Analysts expect revenue to decline by 11% y/y at Estee Lauder but improving operating margin. The cosmetic business is facing headwinds from labour costs and transportation. Booking is expected to deliver strong earnings growth given the better-than-expected result from Airbnb yesterday. Analysts expect 26% y/y revenue growth and EPS growth of 35% y/y. Fortinet is one of the market leaders in the fast-growing cyber security industry and with the ongoing war in Ukraine we expect demand for cyber security solutions to be high; analysts expect Fortinet to grow revenue by 30% y/y in Q3. Albemarle is riding the demand for lithium as electric vehicle sales is seeing explosive growth. Albemarle is expected to deliver 168% y/y growth in revenue and EPS growth of 545% y/y. Today: Suncor Energy, Nutrien, Novo Nordisk, Maersk, Vestas Wind Systems, GSK, Qualcomm, CVS Health, Estee Lauder, Booking, Fortinet, Ferrari, Albemarle Thursday: Verbund, Barrick Gold, Orsted, Novozymes, BNP Paribas, BMW, Enel, ING Groep, DBS Group, ConocoPhillips, Amgen, PayPal, Starbucks, Regeneron Pharmaceuticals, EOG Resources, Moderna, MercadoLibre, Block, Cloudflare, Coinbase Friday: Enbridge, Societe Generale, Intesa Sanpaolo, SoftBank, Amadeus IT Group, Duke Energy, Economic calendar highlights for today (times GMT) 0815-0900 – Eurozone Final Oct. Manufacturing PMI 0855 – Germany Oct. Unemployment Change/Rate 1215 – US Oct. ADP Employment Change 1430 – EIA's Weekly Crude and Fuel Stock Report 1800 – US FOMC Meeting 1830 – US Fed Chair Powell Press Conference 2000 – New Zealand RBNZ Governor Orr before Parliamentary Committee 0145 – China Oct. Caixin Services PMI  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-2-2022-02112022
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

Ole Hansen Comments On Commodities And John J. Hardy Talks About Forex Market

Saxo Bank Saxo Bank 02.11.2022 12:07
Summary:  Today we discuss the shockingly strong September US JOLTS job openings survey out yesterday that took down risk sentiment as US yields and the US dollar jumped. It's the latest data point to suggest that the Fed needs to hawkishly keep all options on the table to buy at least a bit of time and two monthly data cycles until the December 14 FOMC meeting, where it can better make a decision on whether to downshift the size of further hikes and provide its next set of projections and policy forecasts. A focus on incoming data is likely, but how will the market react? Elsewhere, we look at key stocks to watch as earnings season rolls on, industrial and precious metals and crude oil, key FX stories and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-2-2022-02112022
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Technical Analysis The USD/JPY Pair By Andrey Grishaev

InstaForex Analysis InstaForex Analysis 02.11.2022 12:31
USD/JPY: The chart shows the movement of #USD/JPY on the hourly (H1) chart. There is a high chance for yen to rise against dollar. Quotes may hit £144.09 per dollar in the coming days, especially if the dynamic support level (yellow triangle area on the chart) within £147.12- £146.70 is broken. Otherwise, expect a decline in yen to the key resistance level of £148.72. Good luck!   Relevance up to 10:00 2022-11-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326036
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

Inflation Remains The RBA’s Number One Priority

Kenny Fisher Kenny Fisher 02.11.2022 13:47
AUD/USD has posted strong gains today. In the European session, the Australian dollar is trading at 0.6424, up 0.48%. The Australian dollar rose as much as 0.80% after the Reserve Bank of Australia raised rates by 25 basis points on Tuesday, but couldn’t consolidate and ended the day virtually unchanged. Lowe urges caution The RBA rate hike raised the cash rate to 2.85%, its highest level since April 2013. The RBA has raised rates by a steep 275 basis points since May but has now downshifted, with small increases of 25 bp in October and November. The slower pace is noteworthy because inflation remains red-hot. Governor Lowe said on Tuesday that he expected to raise rates further in order to tame inflation, and acknowledged that the central bank was on a “narrow path” which required “striking the right balance between doing too much and too little.” Inflation remains the RBA’s number one priority, even if the price is a recession. At the same time, Lowe is well aware that soaring inflation and high interest rates are taking a toll on businesses and households, and Lowe seems eager to limit rate increases to 0.25% or even pause, if possible. The RBA’s rate policy will be data-dependent, and so far the economy has shown that it can withstand steep tightening. Still, there are signs of a slowdown, such as in manufacturing. The October PMI slowed to 49.6, down from 50.2. This marks a third successive month of flat results, with readings close to 50.0, which separates expansion from contraction. All eyes are on the Federal Reserve, which winds up its 2-day policy meeting later today. The Fed is widely expected to hike rates by 0.75%, which would bring the benchmark rate to 4.0%. The Fed is likely to raise rates to 5% early next year, which means the tightening cycle will continue into 2023. Investors will be listening closely to Fed Chair Powell’s comments, looking for clues as to whether the Fed plans to ease in December, or will we see another 75 bp hike. . AUD/USD Technical AUD/USD continues to test resistance at 0.6403. Above, there is resistance at 0.6532 There is support at 0.6283 and 0.6196 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The Indecision Of Both Bears And Bulls On The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 02.11.2022 14:26
It is difficult to overestimate the significance of the Fed's November meeting. Traders of dollar pairs are waiting for the verdict, not daring to make unipolar decisions – either in favor of the greenback or against it. A vivid illustration of this is the EUR/USD pair, which cannot determine the vector of its movement. On Monday, the price dropped sharply to the area of the 98th figure, but yesterday the downward momentum faded, which buyers took advantage of. However, their successes also leave much to be desired: the pair is circling around the 0.9900 mark, reflecting the indecision of both bears and bulls on EUR/USD. In general, a paradoxical situation has developed around the November meeting of the Fed. On the one hand, market participants have no doubt that the regulator will increase the interest rate by 75 basis points today. On the other hand, the general plot contains intrigue, primarily regarding the further pace of monetary policy tightening. So, the probability of a 75-point rate hike in November is currently 90.2%. The probability of implementing a 75-point scenario at the December meeting is 50.3%. These figures, published by the CME FedWatch Tool service, indicate the precariousness of the current situation. The scales can tilt both in the direction of the dollar and against it. If the members of the regulator in the accompanying statement (or/and Jerome Powell at a press conference) hint, or at least do not rule out, a slowdown in the tightening of monetary policy at the end of this year / early next year, the greenback will be under the strongest pressure. In this case, the EUR/USD pair will not only overcome the parity level but also gain a foothold above the 1.0050 resistance level (the upper line of the Bollinger Bands indicator on the daily chart). Moreover, the dollar may react negatively even to veiled hints from the Federal Reserve – for example, if the text of the final communique (or Powell's rhetoric) emphasizes accordingly. For example, if the regulator expresses concern about the slowdown in a number of macroeconomic indicators in the United States, takes care of the decline in the global economy, and pays attention to difficult international conditions. In other words, even if the Fed voices hypothetical reasons for slowing down the pace of rate hikes without directly indicating such intentions, the dollar will be under the strongest pressure. The fact is that over the past two weeks, the situation has been escalating in a certain way, the information background has been "dovish" in nature, so market participants will "look out" for such hints in the Fed's rhetoric. In my opinion, only "direct verbal interventions" of a hawkish nature will help the dollar bulls. In the text of the accompanying statement, as a rule, very streamlined, diplomatic language is used, so all hope is on Federal Reserve Chairman Jerome Powell. He should convey to traders a simple but important message: the Fed is not going to slow down until inflation in the United States shows signs of slowing down; without fulfilling this condition, it is pointless to reduce the pace of the rate hike. The head of the Fed should voice this message categorically and unequivocally. In this case, dollar bulls will be able to organize another rally, returning the EUR/USD pair to the area of 96–97 figures. Whereas all doubts, ambiguous hints, and cautious wording will be interpreted against the US currency. How likely is the implementation of a conditionally "hawkish" scenario? In my opinion, this scenario is basic, given all the previous rhetoric, not only of Powell but also of most of his colleagues. Powell has consistently (since the August economic symposium in Jackson Hole) defended his position that the regulator should curb inflation, while agreeing with the presence of side effects. And now, with the side effects of the Fed's aggressiveness starting to show, and inflation still at unacceptably high levels, can Powell back off? Note that the core consumer price index jumped in September to 6.6% in annual terms. This is the strongest growth rate since 1982. The upward dynamics of the core index is fixed for the second month in a row. The core personal consumption expenditures price index (the Fed's main inflation indicator) strengthened its growth rate to 5.1% year on year after rising 4.9% a month earlier. All these signals indicate that the Fed has not yet completed its number one task. As for the notorious "side effects," there are also some nuances here. Against the backdrop of a slowdown in many macro indicators, data on US GDP growth in the third quarter came out in the "green zone." The US economy expanded by 2.6% (against a growth forecast of 2.3%), after a two-quarter decline in the first half of 2022. Thus, despite the circulating rumors of a "dovish" nature, the likelihood of a "hawkish" scenario being realized today is quite high. Powell is likely to reaffirm his commitment to aggressive monetary tightening, and in one form or another, will repeat his phrase that Americans will have to put up with an economic slowdown, as "this is a sad price for reducing inflation." Nevertheless, given the continued likelihood of an alternative ("dovish") scenario, it is most expedient to take a wait-and-see position for the EUR/USD pair now, at least until the end of the final press conference of the head of the Fed.     Relevance up to 17:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326042
Inflation slowdown may let Reserve Bank of Australia go for 50bp or inaction

Jing Ren talks strengthening USD to Japanese yen, tempered AUD to US dollar and NZD/USD

Jing Ren Jing Ren 02.11.2022 08:41
USDJPY seeks to recoverThe US dollar consolidates over growing expectations of a slower pace of tightening by the Fed. On the daily chart, the greenback is above the 30-day moving average and may continue to attract trend followers. The latest bounce came under pressure in the supply zone around 149.00, which means that the price action is still in a consolidation mode. 146.00 is the first support as the RSI ventures into oversold territory. Further down, 145.00 is an important level and its breach could trigger a deeper correction towards 143.00. AUDUSD hits resistanceThe Australian dollar softened after the RBA stuck with a mere 25 basis point rate hike. The pair has found strong support over 0.6200. Three consecutive failures to break lower by the bears indicate that the path of least resistance could be up. A series of higher lows contributes to the mounting buying pressure. 0.6370 is a fresh support and 0.6300 the bulls’ second layer of defence. October’s high and daily resistance 0.6530 is a key hurdle. Its breach would cause the short side to cover and trigger an extended rally towards 0.6660. NZDUSD follows rising trend lineThe New Zealand dollar slid after the Q3 unemployment rate fell short of expectations. A rising trend line indicates a strong bullish bias as the kiwi continues to recover. A break above the double top and daily resistance at 0.5790 prompted sellers to cover, easing the downward pressure. The rally then accelerated above 0.5880 after a brief consolidation with 0.5970 as the next target. The RSI’s overbought condition may cause a limited pullback. Buying interests could be expected near 0.5800 over the trend line.
Growth Of The USD/JPY Pair Is Hampered By Resistance

The Future Of The USD/JPY Pair Is Downward Movement

InstaForex Analysis InstaForex Analysis 03.11.2022 08:00
After yesterday's Federal Reserve rate hike by 0.75%, the dollar index rose by 0.54%, but the yen strengthened by 0.35%. We believe that the efforts of the Japanese authorities to attract investment to the country are beginning to show, and the yen is also slowly returning to the status of a safe-haven currency from turmoil in world markets. The S&P 500 was down 2.50% yesterday. Japan's balance of payments has been depressed for the past four months, balancing on the zero line. The August figure was 0.059 trillion yen, while in March it was 2.55 trillion yen. We believe that the September indicator, published next week, will show a more significant increase. For the development of a medium-term strengthening, the price must overcome the support of 145.50, which is approaching the MACD line of the daily scale. Settling below the level opens the way to 141.55. The Marlin Oscillator helps the price with all its strength. The price settled below the level of 147.50 on the four-hour chart. The price is preparing to overcome the support of the balance line, and the Marlin Oscillator is already in negative territory. We are waiting for further downward movement.     Relevance up to 04:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326104
The Pound Is Now Openly Enjoying A Favorable Moment

Cable Market (GBP/USD): There Are No Signs Of A Reversal

InstaForex Analysis InstaForex Analysis 03.11.2022 08:04
Following the Federal Reserve's rate hike by 0.75%, the British pound lost more than 90 points. In today's Pacific session, the pound corrects a bit, without having time to reach any support. This is probably a sign that the price is preparing for an attack on the MACD indicator line of the daily scale at the price of 1.1330. If successful, the price may expect to reach the target level of 1.1170. The Bank of England is expected to raise rates by 0.75% today. If the meeting goes smoothly, without surprises like yesterday from the Fed, we can count on the pound to weaken. The price settled under both indicator lines on the four-hour chart – the balance line and the MACD line. The Marlin Oscillator is going down in the negative area. There are no signs of a reversal, we are waiting for the price to fall further.     Relevance up to 04:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326106
The Euro May Gradually Climb To The Target Level

The EUR/USD Pair Can Start Move In Downwarnd Trend

InstaForex Analysis InstaForex Analysis 03.11.2022 08:06
The Federal Reserve's rate hike to the expected 0.75% was not without surprise, or rather, it did not go without intrigue: the accompanying statement spoke about the effect of the delay of monetary policy on inflation (that is, the possible rate cut sooner rather than later), and Fed Chairman Jerome Powell at the conference announced a possible higher final level of the rate than previously expected by committee members. Markets immediately raised the highest expected rate to 5.1% for May 2023 from the previous peak expectation of 4.85%. As a result, the euro fell by 60 points, having overcome the support of the MACD line on the daily chart. But the Marlin Oscillator has not yet crossed the border into the downtrend area. Maybe it will happen this afternoon. But actually the 0.9714 target is available. Settling below the level will open the 0.9520 target. The S&P 500 stock index fell by 2.50%, it will push the euro down. On the H4 chart, the price went under the range of 0.9840/64 with consolidation, the Marlin Oscillator is in negative territory, we are waiting for the development of a downward trend.     Relevance up to 04:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326108
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

The British Pound To US Dollar (GBP/USD) Pair Could Expect A Technical Bounce

InstaForex Analysis InstaForex Analysis 03.11.2022 08:09
In the next few hours, we could expect a technical bounce above the 200 EMA around 1.1378. So, the price could reach 3/8 Murray at 1.1474 and even 1.1550 (top bearish channel). Conversely, in case of a sharp break below the 200 EMA and a daily close on the 4-hour chart below 1.1370, the currency pair could continue the bearish bias and the price could reach 2/8 Murray around 1.1230. The eagle indicator is giving a negative signal and any bounce towards the psychological level of 1.15 will be considered a signal to continue selling. Our trading plan for the next few hours is to buy above the 200 EMA and above the bottom of the downtrend channel around 1.1378 with targets at 1.1474 and 1.1530. On the other hand, the signal to sell will be activated if there is a strong break below 1.1370 (200 EMA) with targets at 1.1230. As long as the GBP/USD pair trades within the downtrend channel formed since Oct 26, any technical bounce back towards the 21 SMA located at 1.14 98 will be seen as an opportunity to sell.       Relevance up to 05:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299483
The Euro To US Dollar Instrument Did Not Change In Value

The Upward Trend Is Still Preserved For The Euro (EUR)

InstaForex Analysis InstaForex Analysis 03.11.2022 08:14
Analysis of EUR/USD, 5-minute chart The euro/dollar pair continued its corrective movement within the uptrend, which after four days of falling is still preserved. Recall that we do not consider the movements that took place last night and tonight, since the reaction to the results of the FOMC meeting can be observed within 24 hours quite freely. Therefore, we consider it right to analyze afterwards. At the moment, we can say that the upward trend is still preserved for the euro, as evidenced by the rising trend line. Settling below it will break the current trend, but it should be understood that a breakthrough, which will happen on a strong fundamental background, may be false. One way or another, conclusions will need to be drawn no earlier than tonight. Yesterday, in fact, the only more or less important report of the day - from ADP - was ignored. Weak volatility and almost complete absence of trend movement were observed throughout the day. The dollar only started to rise in price sluggishly during the US session. In regards to Wednesday's trading signals, the situation was difficult due to the flat. Traders could try to work out the first two signals near the Senkou Span B line, but both turned out to be false, after which all subsequent signals should have been ignored. In total, five signals were formed near the Senkou Span B line - this is a clear sign of a flat. The fall began only after the fifth signal. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of short orders initiated by non-commercial traders increased by 24,000, whereas the number of long orders declined by 2,700. As a result, the net position increased by 26,700 contracts. However, this could hardly affect the situation since the euro is still at the bottom. At the moment, professional traders still prefer the greenback to the euro. The number of buy orders exceeds the number of sell orders by 75,000. However, the euro cannot benefit from the situation. Thus, the net position of non-commercial traders may go on rising without changing the market situation. Among all categories of traders, the number of long positions exceeds the number of short positions by 19,000 (609,000 against 590,000). Analysis of EUR/USD, 1-hour chart The pair is moving upwards on the one-hour chart, but today it could stop. The price is around 70 points from the trend line, so it will not be difficult to overcome it. Especially when there is such a strong fundamental background, like what we have for tonight. No matter how the pair moved last night, high volatility and strong movements can continue to be observed today and tomorrow. Recall that the most important statistics will be released on Friday. And today the market may continue to work out the results of the Federal Reserve meeting. On Thursday, the pair may trade at the following levels: 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as the Senkou Span B (0.9900) and Kijun-sen (0.9955). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. The EU will release a report on unemployment - not the most important indicator, we do not expect the market to react to it. Two business activity indices in the service sector will be released in America - ISM and S&P. Naturally, the ISM index is much more important for traders, and they could react to it. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate           Relevance up to 01:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326096
The GBP/USD Pair May Trade Horizontally Today

The USD Rose Last Night, But Today The Pound (GBP) Could Also Grow

InstaForex Analysis InstaForex Analysis 03.11.2022 08:17
Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair was trading with low volatility and a slight downward slope for most of the day on Wednesday. Approximately the same picture was observed in the last few days. Of course, after the results of the Federal Reserve meeting were announced, the pair first soared up and then collapsed. We warned that movements can be versatile and very strong. In principle, there is nothing more to consider yesterday. Any conclusions about the Fed meeting, its results and the market reaction to them can be made no earlier than Thursday afternoon. However, the results of the Bank of England meeting will be announced on Thursday afternoon. Therefore, it will be very difficult to even understand what exactly traders reacted to and at what time. Today you just need to survive, and tomorrow it will be possible to draw the first conclusions. But even Friday would not be a quiet day, as the most important reports on the labor market and unemployment will be published in America. The pair was absolutely flat during the entire Asian session, the entire European and half-US session. Therefore, it is not at all surprising that four false signals were formed - all around the same 1.1486 level. We want to note that the signals were not the worst yet, as the first three were buy signals. Consequently, traders could work out the first of them (the position was closed by Stop Loss at breakeven), the second one (it should have been closed manually when it became clear that the pair was in a flat) and that's it. All other signals should not be processed. Therefore, yesterday's flat could have been overcome without losses. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group opened 3,200 long positions and closed 200 short positions. Thus, the net position of non-commercial traders increased by 3,400, which is very small for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 43,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? As for the total number of open longs and shorts, the bulls have an advantage of 18,000 here. But, as we can see, this indicator does not help the pound too much either. We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair is moving upwards on the one-hour chart, which so far looks quite convincing. The price went only slightly below the Kijun-sen line, which is not yet critical for the dollar's prospects. The dollar rose last night, but today the pound could also grow, because the BoE is also going to raise its rate. If this does not happen, then it will be possible to conclude that the bulls are no longer going to buy, and the pair may resume a long-term downward trend. On Thursday, the pair may trade at the following levels: 1.1060, 1.1212, 1.1354, 1.1486, 1.1649, 1.1760, 1.1874. Senkou Span B (1.1351) and Kijun-sen (1.1532) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. The results of the BoE meeting will be announced in the UK, and we will also receiva a report on business activity in the services sector. Meanwhile, indexes of business activity in the service sector S&P and ISM are scheduled in America. In general, today can also be a very volatile day. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.         Relevance up to 01:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326098
FX Daily: Upbeat China PMIs lift the mood

In The US, Stocks May Remain Risk-Free | According To Chinese Prime Minister Li Keqiang, The Chinese Economy Is Showing Signs Of Stabilization

Saxo Bank Saxo Bank 03.11.2022 08:25
Summary:  The Nasdaq 100 & S&P 500 drop after the Fed made hawkish remarks post lifting rates 0.75%. Fed says ‘we still have some ways to go’. It will make ‘ongoing increases’ until rates are ‘sufficiently restrictive’. Provided the upcoming economic data is strong, and shows the US economy is, the Fed can keep hiking. However, it could pivot as early as December. Until the next major US eco data release it seems equites could remain in risk-off mode, especially with high PE stocks, like tech, while defensive and commodity plays with rising cash flows could continue to garner interest. China’s Li signals a potential economic recovery, fuelling commodities and China’s markets. Crude oil rocks up after OPEC raised its forecast for oil demand. a2 Milk gets FDA green light. What is happening in markets? The Nasdaq 100 (USNAS100.I) & S&P 500 (US500.I) drop after Fed made hawkish remarks post lifting rates 0.75% US major indices dropped on Powell's hawkish comments. The S&P 500 shed 2.5% and the Nasdaq plunged 3.4% with megacap tech stock copping the brunt of the selloff with Apple (AAPL) down 3.73% and Tesla (TSLA) down 5.6% with the EV giant reportedly shutting its flagship showroom in China, in Beijing as it shift strategy. What prompted high PE stocks being sold off was that Treasuries yields rose across the curve, with the 10-years up 4 bps to 4.08%. The dollar reversed course and rose against every G-10 peer save the yen. So, the bottom line is, the market will now be contending with a risk-off tone, until the next US economic data sets prove the Fed can pivot. Oil moved higher, while corn and wheat dropped on grain-corridor developments. Elsewhere, Boeing (BA) shares rose 2.8% with the plane maker saying it could generate $10 billion in cash annually by mid-decade, once it turns around its operations after years of setbacks. Australia’s ASX200 (ASXSP200.1) futures suggest risk-off mode will be enacted with tech stocks on notice. Focus will be on milk Aussie tech stocks are likely to come under pressure with US bond yields rising again. However, there may be bright sparks today. Iron ore (SCOA) rose 0.4% sitting back above $80.85, which might support iron ore companies shares. That said, BHP closed 3.1% lower in NY. A2Milk (A2M) may garner attention after the US FDA gave approval for a2 Milk to be sold in the US. Bubs Australia (BUB) may likely 'piggyback' on any gains. That said, you could expect infant formula stocks to gain interest, particularly as China’s outgoing premier signal China is striving to build sustainable development. In other news; Rio (RIO) moved in on taking over a Canadian copper-gold company, Turquoise Hill Resources (TRQ). On Wednesday in Australia, Rio offered C$43 per share for the Canadian miner, saying that is its best and final offer. Rio is seeking to buy 49% of the Canadian miner, that it doesn’t already own, in a deal valued at around C$4.24 billion. Turquoise Hill Resources shares surged The Investor meeting to consider the takeover is set for November 8. Rio is also bidding to gain control of Mongolia’s Oyu Tolgoi, one of the world’s biggest copper mines. Crude oil (CLX2 & LCOZ2) rocks up after OPEC raised its forecast for oil demand   Oil rallied for several reason; firstly OPEC rose its forecasts for world oil demand in the medium to longer term, saying that $12.1 trillion of investment is needed to meet this demand. Second, an EIA report showed US gasoline inventories fell to the lowest since 2014 and East Coast distillate stocks slide to a record low seasonally, which intensifies supply concerns. Crude supplies also fell. Natural gas rose in the US and in Europe. Fed says ‘we still have some ways to go’; and it will make ‘ongoing increases’ until rates are ‘sufficiently restrictive’. What to watch next, what it means for equities Federal Reserve Chair Jerome Powell stuck to his campaign to bring inflation under control, saying “we still have some ways to go”, before rates were ‘sufficiently restrictive’ but the path may soon involve smaller hikes. Still, Powell sees it may be appropriate to make smaller hikes, as soon as December, or at the meeting after. But, he also said it was very premature to be thinking about pausing. After the Fed raised rates by 75 basis points on Wednesday, Powell said “incoming data since our last meeting suggests that ultimate level of interest rates will be higher than previously expected.” He also mentioned rate hikes have a lag effect on the economy, and the Fed needs to take this into account. This means, the devil will be in the detail ahead, as in the upcoming economic data which the Fed will respond to. Provided the upcoming economic data is strong, shows the US economy is, then the Fed can essentially keep hiking. For equites this means the risk-off mode in high PE stocks, like tech can possibly continue, inversely, defensive and commodity plays with rising cash flows might continue to garner interest. Saxo’s Head of FX Strategy says, so cue tomorrow’s ISM Services, Friday’s US jobs report, the October CPI due out next week, November 11 next week, and the November CPI report due December 12. China’s Li Keqiang signals a potential economic recovery, fueling commodities and China’s markets China’s outgoing premier Li Keqiang said China will strive for a "better" economic outcome and promote stable, healthy and sustainable development, saying China’s economy is showing signs of stabilizing, as well as “rebounding momentum" thanks to stimulus. This has supported gains in iron ore (SCOA) and also supported optimism in Asian equites. Australian lending and building approvals fall more than expected, giving the RBA greater cause to remain dovish. Keeping AUDUSD on notice House lending in Australia fell 8.2% in September (far more than the market expected) while building construction lending fell 36.6%, with the weaker data sets coming out just a day after the RBA remained dovish - rising Australia’s official cash rate by 25bps (0.25%) to 2.85%. On Tuesday the RBA acknowledged tighter financial conditions and the ‘full effect’ of increased interest rates are yet to be felt in ‘mortgage payments’, but the rate hikes since May, combined with higher inflation have already put pressure on household budgets. We believe the RBA could increasingly become dovish despite inflation running away to the upside. We think the RBA may be forced to potentially pause on rate hikes sooner, as they have done in history, despite peak inflation continuing to rise YoY. The AUDUSD remains under pressure for this reason. Plus until the Fed has reason to pivot the US dollar remains supported. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-3-nov-03112022
The AUD/USD Pair’s Downside Remains Off The Table

The Australian Dollar To US Dollar Pair (AUD/USD) Shows The Recent Gains

TeleTrade Comments TeleTrade Comments 03.11.2022 08:27
AUD/USD grinds higher around intraday top, pares the biggest daily loss in a week. Three-week-old ascending trend line defends buyers but 200-HMA is the key hurdle to win the fort. Fed’s Powell propelled US dollar, Aussie trade numbers initially failed to impress AUD bulls. Market sentiment remains dicey as traders lick post-Fed wounds ahead of US ISM Services PMI, NFP. AUD/USD seesaws near intraday high surrounding 0.6360 despite downside China PMI data during early Thursday. The reason could be linked to the early-day releases of Aussie trade numbers and the US dollar’s consolidation of the Fed-inspired gains. China’s Caixin Services PMI for October dropped to the lowest level in five months while flashing 48.4 figure versus 49.3 prior. Earlier in the day, Australia’s trade surplus increased to 12,444M In September versus 8,850M expected and 8,324M prior while the Exports rallied by 7.0%, compared to 2.6% prior. However, the growth of the Imports dropped to 0.4% versus 4.5% prior. Also challenging the Aussie pair buyers could be the escalating geopolitical tensions between North Korea and Japan join the risk-negative covid news from China to exert downside pressure on the sentiment. On the same line could be the Fed’s readiness for further rate hikes. That said, North Korea’s firing of missiles and Japan’s warning to residents weigh on the market’s risk profile, which in turn weighs on the risk barometer pair. On the same line could be the coronavirus fears from China as the lockdown surrounding the area involving the world’s largest iPhone factory defied hopes of easing the dragon nation’s zero-covid policy. Additionally, Reuters quotes China’s latest National Health Commission figures to suggest an uptick in coronavirus cases. The news states, “China reported 3,372 new COVID-19 infections on Nov. 2, of which 581 were symptomatic and 2,791 were asymptomatic.” However, a pullback in the US Dollar Index (DXY) from a one-week high to 111.90, mainly tracing the US Treasury yields should have defended the AUD/USD buyers. It should be noted that the US 10-year bond coupons ease to 4.096% while its two-year counterpart snaps a four-day uptrend as it drops to 4.611% at the latest. Moving on, the US ISM Services PMI bears the downbeat forecasts of 55.5 for October compared to 56.7 previous readings and appears important for near-term AUD/USD moves. Following that, Friday’s US Nonfarm Payrolls (NFP) will be the key, mainly due to the strong ADP data. Technical analysis AUD/USD pair bounces off a three-week-old ascending trend line while posting the recent gains. However, the bearish MACD signals and a clear downside break of the 200-HMA keep the sellers hopeful unless the quote crosses the 0.6405 hurdle. Even if the quote rises beyond 200-HMA, the weekly resistance line near 0.6430 could act as an extra filter to the north before welcoming the bulls. Meanwhile, a downside break of the immediate support line, close to 0.6325 at the latest, could quickly drag the AUD/USD prices towards the late October swing low of around 0.6210. Following that, a downward trajectory towards the previous monthly low, also the yearly bottom, surrounding 0.6170, will be in focus. AUD/USD: Hourly chart Trend: Limited upside expected
CNY Can Appreciate Mildly Through This Year According To Economists At Commerzbank

The USD/CNH Pair Justifies Bearish Technical Signals

TeleTrade Comments TeleTrade Comments 03.11.2022 08:32
USD/CNH renews intraday low, stays defensive after reversing from short-term key resistance line. China’s Caixin Services PMI dropped to five-month low. Key HMAs, RSI conditions suggest a bumpy road for the bears. USD/CNH ticks down to refresh intraday low near 7.3160 after China reported downbeat services activity data during early Thursday. In doing so, the offshore Chinese currency (CNH) pair consolidates the Fed-inspired gains but struggles to extend the late Wednesday’s pullback from a one-week-old descending resistance line. That said, China’s Caixin/S&P Global Services PMI for October dropped to the lowest level in five months while flashing 48.4 figure versus 49.3 prior. Despite the quote’s latest inaction, the bearish MACD signals and the U-turn from a short-term key resistance line direct USD/CNH sellers toward the 50-HMA and 100-HMA support levels, respectively near 7.3050 and 7.2980. However, an upward-sloping support line from Friday, near 7.2840, joins the ascending support line on RSI (14) to challenge the pair bears afterward. Alternatively, recovery moves need to cross the aforementioned resistance line, close to 7.3485, to convince USD/CNH buyers. Following that, a run-up towards the all-time high marked in October around 7.3750 can’t be ruled out. To sum up, USD/CNH justifies short-term bearish technical signals despite weaker fundamentals to support sellers. Though, the downside room appears limited. USD/CNH: Hourly chart Trend: Limited downside expected
China's Ninth Straight Month of Gold Holdings Increase; Oil Resilient Despite Russian Tanker Incident; Dollar Supported by Bond Supply Concerns

The US Dollar To Indian Rupee (USD/INR) Pair Showed An Open Gap

TeleTrade Comments TeleTrade Comments 03.11.2022 08:44
USD/INR has slipped to 82.75 after a breakdown of intraday consolidation. The RBI will provide a special report on inflation equipped with reasons and remedies for higher inflation. Fed’s hawkish guidance has turned the overall risk tone extremely negative. The USD/INR pair has surrendered its opening gains recorded due to a bigger rate hike announcement by the Federal Reserve (Fed) on Wednesday. In the morning session, the asset displayed a gap-up open as a fourth consecutive 75 basis point (bps) rate hike by the Fed weighed on risk-perceived currencies. Fed chair Jerome Powell also sounded hawkish while providing guidance cited that it is very premature to be thinking about pausing the policy tightening spell now as short-term inflation has remained higher than projections. Meanwhile, the US dollar index (DXY) is oscillating below 112.00 after a marginal fall, however, the overall risk tone is extremely negative as policy tightening measures have weakened economic projections. S&P500 futures are failing to recover firmly as higher interest rates have escalated fears of a decline in earnings guidance by the corporate. Now, investors are looking for the release of a special inflation report by the Reserve Bank of India (RBI) that will display reasons and remedies for higher inflation. Retail inflation in India has climbed to a high of 7.4% beyond the tolerance of 6% as mandated by the RBI consecutively for three quarters. This week, the release of the US Nonfarm Payrolls (NFP) data will be of utmost importance. But before that, Wednesday’s release of US Automatic Data Processing (ADP) Employment Change has remained upbeat. The US economy has added 239k fresh jobs in the labor market, which will support the Fed to keep up the pace of hiking rates further. The US NFP is seen lower at 200k vs. the prior release of 263k. While the Unemployment Rate will increase to 3.6%.
Oanda's Kenny Fisher talks US dollar against Canadian dollar

There Are An Additional Challenge For The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 03.11.2022 08:58
USD/CAD retreats from seven-day high, prints the first daily loss in six. Convergence of previous resistance, 200-SMA challenges sellers amid upbeat RSI conditions. Multiple hurdles to test bulls before the yearly top. USD/CAD seesaws around the intraday low as it pares the first weekly gain in three heading into Thursday’s European session. In doing so, the Loonie pair makes rounds to 1.3700, after flashing the day’s low of 1.3682. Even so, the quote defends the previous day’s upside break of a downward-sloping resistance line from October 13, now supporting around 1.3670. Also increasing the strength of the 1.3670-65 area is the 200-SMA. It’s worth noting that the firmer RSI (14) and a successful break of the previous key resistances keep the USD/CAD buyers hopeful of reaching the yearly top surrounding 1.3980. However, multiple hurdles near 1.3750 and 1.3830 could test the upward trajectory. In a case where the Loonie pair remains firmer past 1.3980, the 1.4000 psychological manget may act as an extra check for the bulls before directing them to the May 2020 high near 1.4175. Meanwhile, a downside break of the resistance-turned-support confluence near 1.3670-65 isn’t an open welcome to the USD/CAD bears as a weekly ascending trend line, close to 1.3550, offers an additional filter to probe the declines. Additionally challenging the pair’s south run is the horizontal support including multiple lows marked since early October, near 1.3500. USD/CAD: Four-hour chart Trend: Bullish
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

Economists Suggest The Further Upward Movement Of The NZD/USD Pair

TeleTrade Comments TeleTrade Comments 03.11.2022 10:12
NZD/USD is now seen navigating the 0.5740-0.5900 range in the next weeks, suggest Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group. Key Quotes 24-hour view: “NZD spiked briefly to 0.5942 in NY trade before plunging to close at 0.5819 (-0.35%). NZD traded on a weak note in early Asian trade and the bias today is for NZD to weaken. That said, the major support at 0.5740 is unlikely to come under threat. Resistance is at 0.5840, followed by 0.5870.” Next 1-3 weeks: “Our latest narrative was from last Thursday (27 Oct, spot at 0.5835) where NZD could rise but it has to close above 0.5880 before further sustained advance is likely. NZD did not close above 0.5880 and yesterday (02 Nov), it dropped to a low of 0.5815 before extending its decline in early Asian trade. Upward pressure has subsided and we expect NZD to trade between 0.5740 and 0.5900 for the time being.”
Long-Term Yields Soar Amidst Hawkish Fed: Will They Reach 5%?

Statements Of ECB's Member About Inflation And Monetary Policy

TeleTrade Comments TeleTrade Comments 03.11.2022 10:20
European Central Bank (ECB) executive board member Fabio Panetta said on Thursday, “we need to bring inflation back to our 2% target as soon as possible, but not sooner”. Additional quotes   Medium-term inflation outlook presents clear upside risks. Further policy adjustment is warranted. We must calibrate our monetary policy carefully to ensure inflation durably returns to target, while also guiding market expectations and limiting excess volatility. He of our stance should not rely on a one-sided view of risks. We must avoid excessive focus on short-run developments and fully taking into account the risks. The neutral interest rate provides limited guidance here. We also need to stand ready to address collateral issues. I  prefer the concept of the target-consistent rate to that of the neutral rate. Maintaining ample liquidity in the system will help ensure smooth money market functioning. Ready to intervene in a timely manner to counter unwarranted market dysfunctions, should they arise. We should ensure that TLTRO repayments have been absorbed before we stop fully reinvesting the principal payments. A controlled reduction – whereby only redemptions above a cap are not rolled over – is preferable to active sales. A bigger-than-expected rate increase may heighten volatility and have a stronger impact in the current highly leveraged environment. We need to pay close attention to ensuring that we do not amplify the risk of a protracted recession. Our policy rate remains a suitable marginal instrument of normalization. If these bigger-than-expected increases are interpreted as signalling a higher terminal rate, we could have a stronger impact on financing conditions. We have a comparatively limited understanding of the effects of reducing the size of our balance sheet.   Market reaction The EUR/USD pair was last seen trading at 0.9786, down 0.31% on the day.
Forex: Most NOK Gains May Be Channelled Against The Dollar

Norway’s Norges Bank (NB) And Another Hike | The Krone’s (NOK) Upside Potential Is Limited

TeleTrade Comments TeleTrade Comments 03.11.2022 10:26
Norway’s Norges Bank (NB) is due to deliver another hike. Economists at ING note that the EUR/NOK could break under 10.20, however, the krone’s upside potential is limited. 50 bps hike can offer some extra help to the krone “We note that consensus is split between a 25 bps and a 50 bps move today: we expect a half point hike, as the September CPI upside surprise (6.9% year-on-year) may have overshadowed concerns about slowing economic activity. We think this can offer some extra help to the krone, which is already benefiting from oil’s good performance and the support from Norges Bank’s reduced daily FX purchases for November.”  “EUR/NOK may break below 10.20 in the near-term, but we suspect that a worsening of risk sentiment conditions into year-end may limit further NOK appreciation.” See – Norges Bank Preview: Forecasts from five major banks, back to 25 bps hikes
Bestway Might Have Larger Designs On The UK's Second Biggest Supermarket

Eyes On Bank Of England (BoE) | Gold Is Under Pressure

Swissquote Bank Swissquote Bank 03.11.2022 10:35
Jerome Powell abated the latest risk rally yesterday, saying that the rate hikes will slow down, but the levels will go higher. Equities sold off, the yields jumped, the dollar gained, and hopes of seeing the end of the market turmoil got completely dashed. US Stock Market The US 2-year yield soared to 4.90%. The Dow Jones lost more than 1.50%, the S&P500 dived 2.50% and Nasdaq fell more than 3%. Forex In the FX, the prospect of higher terminal rate from the Fed boosted the USD appetite. The dollar index gained yesterday, as the EURUSD slipped again below its 50-DMA, Cable slipped below 1.14, the dollar-franc is back above parity, the dollar-yen is set for another advance to 150 on the back of the diverging rate prospects between the Fed that is now set to increase rates slower, but higher, and the Bank of Japan (BoJ), set to do nothing, for now. Gold & Bitcoin Gold is also under the pressure of a stronger US dollar and the higher US yields. Bitcoin, on the other hand, is surprisingly resilient to the broad risk selloff. Crude Oil The barrel of American crude rose to $90, as the latest EIA data showed that the US crude inventories fell by more than 3-million-barrel last week, much faster than a 200’000 barrel decline expected by analysts. Bank Of England Today, the Bank of England (BoE) is also expected to raise rates by 75bp today, but that expectation is down from around 100-150bp hike expected when Liz Truss was busy shaking the financial markets with her crazy mini budget. The BoE should no longer act twice as aggressively to compensate for the actions of an irresponsible government, but it still must fight the rising inflation in Britain. Watch the full episode to find out more! 0:00 Intro 0:25 Powell points at slower but higher rates, investors sell assets 4:13 Oil up on falling inventories 5:00 USD up against majors 7:05 BoE to hike by 75bp today 8:13 Gold under pressure, but Bitcoin surprisingly resilient Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #FOMC #rate #decision #USD #ADP #US #jobs #report #crudeoil #Apple #Amazon #Meta #Google #ExxonMobil #selloff #UK #inflation #BoE #GBP #EUR #XAU #Bitcoin #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

Economists Believe The Next Intervention Of The Bank Of Japan (BoJ) Is More Likely

TeleTrade Comments TeleTrade Comments 03.11.2022 11:03
USD/JPY staged a rebound late Wednesday and ended up closing the day flat near 148. Economists at TD Securities believe that the risk of intervention is high above the 150 level. USD/JPY may begin the process of forming a top “The combination of BOJ/MOF activity on intervention and suggestions that tweaks to YCC are possible if inflation and wages improve is a notable shift in rhetoric and may help the pair to begin the process of forming a top.” “A higher Fed terminal is a problem but we think MOF/BOJ is now the canary in the coalmine; given FX intervention has a poor track record generally, why bother employing it if you did not expect to make some policy shifts of your own.”  “We think intervention risk is very high above 150 in USD/JPY.”
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

Saxo Bank's Podcast: The Reaction Of The Markets To The Fed's Decision

Saxo Bank Saxo Bank 03.11.2022 11:58
Summary:  Today we look at the hawkish Fed Chair Powell press conference delivering a hammer-blow to sentiment as he managed to both pull off the idea that the Fed may indeed soon pivot to a slower pace of rate hikes as soon as December, but that any talk of a pause is "very premature". The result? Sentiment thrashed and the USD going vertical as the market takes Fed rate expectations and the terminal rate next year higher still. Incoming US data could further aggravate this move if the data remains even resilient, much less hotter than expected. We also talk through the reaction to the FOMC in gold, risks to sterling today if BoE fails to take the hawkish hint from Powell, stocks to watch, perspective on where we are with equity valuations and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app:           If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

US Dollar (USD) Bulls Are Back, The Norges Bank (NB) Raised Only 25bp

Saxo Bank Saxo Bank 03.11.2022 12:11
Summary:  The market caught in a vicious whiplash yesterday by a dovish interpretation of the FOMC statement that was then followed by a Powell presser that delivered a hawkish blow as the Fed Chair managed to both indicate that coming hikes may pivot to a slower pace, but that the ultimate peak in Fed rates could prove higher, with the idea that the Fed is thinking about or talking about pausing rate hikes deemed “very premature”. FX Trading focus: Powell manages to pull off a hawkish pivot. The market reaction yesterday over the FOMC meeting was a whiplash-inducing one-two as the dovish interpretation of the new policy statement was brutally reversed by a hawkish Powell presser. The key new text inserted into the new FOMC statement that allowed some room for a dovish interpretation was the phrase: “The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”  The market’s first read was dovish on the assumption that this means the anticipated downshift in Fed rate hikes is well on its way – and this phrase was a likely tip-off for a mere 50 bps increase at the December FOMC meeting. US yields dropped, risk sentiment rushed higher, and the USD sold off. In the press conference, however, Fed Chair Powell was unabashedly hawkish, saying there is a “ways to go”, and spelling out that the incoming data means that the “ultimate level” that the Fed funds reaches is likely to move to higher levels than was though at the September meeting (yes, the projection then was 4.6%, below current projections, but the implication was above current market projections). This had Fed expectations for the spring of next year edging back toward the cycle highs of 5.00% and then closing the day a full 10 basis points higher near 5.10% and trading higher still this morning. While Powell did say it may be possible that the Fed steps down to smaller hikes as soon as the December meeting, he felt that the speed of hikes Is becoming “less important” (leaving the market to infer that the Fed just keeps hiking at more meetings if incoming data supports doing so and that we could reach well beyond 5.00%). As well, we must remember that the Fed has cranked up the pace of quantitative tightening in the background, which provides its own tightening pressure on markets and arguably equates with several hundred basis points of rate tightening over the course of a year. All in all, the meeting firmly puts the USD bulls back in business, with only ugly data misses able to reign in the potential for the greenback to trade to new cycle highs against most other, if not all, of the other G-10 currencies. The next currency to get a test is sterling over today’s Bank of England meeting as discussed below. Norges bank only hiked 25 basis points this morning, with NOK somehow only getting an ugly sell-off and not a thorough thrashing. Chart: GBPUSDA very interesting test today for sterling over the Bank of England, which must preserve a hawkish tone despite signs of a weakening economy, one that will be made that much weaker by the fiscal austerity Sunak and Hunt are cooking up for the budget statement on November 16, otherwise, sterling risks an ugly melt-down again versus the US dollar that will aggravate inflation risks on a flailing currency. I wonder how long Governor Bailey will be able to maintain his position as Governor if he messes things up today by indicating caution on rate hikes beyond today’s (presumed) 75 basis point hike because of the risk of an incoming recession. An insufficiently hawkish message could see 1.1000 in GBPUSD trading in a heart-beat. The October UK Services PMI was revised higher to 48.8 vs. 47.5 originally. The US ISM Services survey later today is expected to drop to 55.3 from 56.7 in September, by contrast. Table: FX Board of G10 and CNH trend evolution and strength.The USD is coming roaring back here and will set the tone. Watching JPY as yields rise – the intervention will arrive again at some point – but not until new highs in USDJPY? NOK could be in for some further punishment after the small hike today and watching relative strength in sterling over the Bank of England today. Table: FX Board Trend Scoreboard for individual pairs.Fed Chair Powell has spoken and the USD has asserted a new up-trend, with many USD pairs showing a flip to USD-positive trend today – only sudden negative US data surprises are likely to change that development. Watching GBP pairs after today and a small sub-plot is the risk of NOKSEK tilting into a new negative trend after this Norges Bank meeting today, with EURNOK also risking a flip to a positive trend due to weak risk sentiment. Upcoming Economic Calendar Highlights 1130 – US Oct. Challenger Job Cuts 1200 – UK Bank of England Rate Announcement 1230 – UK Bank of England Governor Bailey press conference 1230 – US Sep. Trade Balance 1230 – Canada Sep. Building Permits 1230 – Canada Sep. International Merchandise Trade 1230 – US Q3 Nonfarm Productivity/Unit Labor Coasts 1230 – US Weekly Initial Jobless Claims 1330 – Czech Central Bank Rate Announcement 1400 – US Sep. Factory Orders 1400 – US Oct. ISM Services 0030 – Australia RBA Monetary Policy Statement 0030 – Australia Q3 Retail Sales Source: https://www.home.saxo/content/articles/forex/fx-update-powell-manages-to-pull-off-a-hawkish-pivot-03112022
China Yuan (CNH) Prints The First Daily Loss

Comments Of Economist About The USD/CNH Pair Situation

TeleTrade Comments TeleTrade Comments 03.11.2022 12:14
Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group note there is still room for further gains in USD/CNH in the near term. Key Quotes 24-hour view: “We highlighted yesterday that ‘The choppy movement is likely part of a broad sideways range and we expect USD to trade within a range of 7.2500/7.3400’. USD plunged briefly to a low of 7.2614 in NY trade before surging to a high of 7.3480. The rapid rise has scope to extend but a break of 7.3600 is unlikely. Support is at 7.3200, followed by 7.3000. Next 1-3 weeks: “Our update from yesterday (02 Nov, spot at 7.3020) still stands. As highlighted, while upward momentum has not improved, as long as 7.2400 (no change in ‘strong support’ level from yesterday) is not breached, there is still chance for USD to head higher. That said, a break of 7.3745 appears unlikely.”
Analysis And Trips For Trading The GBP/USD Pair In Short And Long Positions

The Market Will Remain Balanced With The Option Of The GBP/USD Pair Growth

InstaForex Analysis InstaForex Analysis 03.11.2022 12:54
In my morning forecast, I paid attention to the 1.1380 level and recommended deciding on entering the market there. Let's look at the 5-minute chart and figure out what happened. The bears did not keep waiting long and continued actively selling the pound. The breakthrough of 1.1380 took place without a reverse test, so I failed to enter short positions there and from 1.1307. In the afternoon, the technical picture was completely revised. To open long positions on GBP/USD, you need the following: It is difficult to say what the Bank of England should do to influence the situation somehow. Whatever decisions the regulator resorted to today, it is unlikely that the bulls will be able to buy off the morning fall. In the afternoon, I advise you to wait for Andrew Bailey's statement and only then look for convenient entry points into the market. I told you more about what the central bank governor can say in the morning forecast. In case of further fall of the pair, only a false breakdown in the area of 1.1210 will give a buy signal with a return to the resistance of 1.1276 formed by the results of European trading. Practically nothing depends on this area, so bulls can easily get above this range. A breakdown of 1.1276 and a reverse test from top to bottom will open the way to 1.1341. You can reach the resistance of 1.1416, where the moving averages are playing on the sellers' side. It will become more difficult for buyers to control the market there. A more distant target will be the 1.1489 area, which will lead to a fairly large capitulation of sellers - I recommend fixing profits there. If GBP/USD falls and there are no buyers at 1.1210, we may reach another low of 1.1137. Therefore, do not rush to enter the market. Only a false breakdown at 1.1137 will ensure the presence of major players. It is possible to open long positions on GBP/USD immediately for a rebound from 1.1066, or around the minimum of 1.1013, with the aim of correction of 30-35 points within a day. To open short positions on GBP/USD, you need the following: Bears keep everything under their control, which can only strengthen after the data is scheduled for the afternoon. Reports are expected on the number of initial applications for unemployment benefits and the balance of the US foreign trade balance. But much more important will be ISM's index of business activity in the service sector. If it grows, the pressure on the pound will likely only increase. At the moment, sellers need to defend the resistance of 1.1276 with all their might, where a false breakdown against the background of weak US statistics will give a sell signal based on the return of pressure on the pound and its downward movement to the next support of 1.1210. A breakout and a reverse test from the bottom up of this range will already give an entry point for sale with an update of the minimum of 1.1137. A more distant target will be the 1.1066 area, where I recommend fixing profits. The market will remain balanced with the option of GBP/USD growth and the absence of bears at 1.1276 in the afternoon. In this case, it will be possible to count on an upward movement to the maximum of 1.1341. Only a false breakout at this level forms an entry point into short positions in the expectation of a new downward movement of the pair. If there is no activity there, there may be a jerk up to the maximum of 1.1316, where I advise you to sell GBP/USD immediately for a rebound, counting on the pair moving down by 30-35 points inside the day. The COT report (Commitment of Traders) for October 25 recorded a reduction in short positions and an increase in long ones. Political changes in the UK are playing on the side of buyers of the pound. Still, many are waiting for how the Bank of England will behave about rates and a new economic program from British Prime Minister Rishi Sunak. Do not forget that the pound, as a risky asset, largely reacts to the decisions of the Federal Reserve System on interest rates. A committee meeting will be held this week, where the rate will be increased by 0.75%, which may weaken the position of GBP/USD and lead to a larger decline. However, only the Fed's commitment to maintaining a super-aggressive policy in the near future will be able to change the upward trend in the pound. Otherwise, observing the next pullback of the pound will be possible. The latest COT report indicates that long non-commercial positions increased by 3,183 to 43,511. In contrast, short non-commercial positions decreased by 223 to 91,316, which led to a slight decrease in the negative value of the non-commercial net position to -47,805 versus -51,211 a week earlier. The weekly closing price rose to 1.1489 against 1.1332. Signals of indicators: Moving Averages Trading is conducted below the 30 and 50-day moving averages, indicating a bear market's development. Note: The author considers the period and prices of moving averages on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1. Description of indicators Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow. Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green. MACD indicator (Moving Average Convergence / Divergence - moving average convergence/divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-profit speculative traders, such as individual traders, hedge funds, and large institutions, use the futures market for speculative purposes and to meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between the short and long positions of non-commercial traders.   Relevance up to 12:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326174
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

Craig Erlam And Jonny Hart Discuss The Fed And Bank Of England (BoE) Rate Decisions

Craig Erlam Craig Erlam 03.11.2022 11:47
OANDA Senior Market Analyst Craig Erlam reviews the latest market news with Jonny Hart. They discuss the Fed and BoE rate decisions and the surge in Chinese stocks amid zero-Covid rumours. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Bank Of England Will Probably Be Unable To Avoid A Significant Easing Of Policy

A Dovish Bank Of England (BoE) Can Make A Downward Pressure On The British Pound (GBP)

TeleTrade Comments TeleTrade Comments 03.11.2022 13:08
BoE Monetary Policy Decision – Overview The Bank of England (BoE) is scheduled to announce its monetary policy decision this Thursday at 12:00 GMT. The UK central bank is widely expected to lift interest rates by 75 bps - the biggest hike since 1989. Meanwhile, the worsening outlook for the UK economy might have already set the stage for a dovish pivot. Hence, the market focus will be on the accompanying statement that provides the Monetary Policy Committee's (MPC) economic and inflation projections. Apart from this, investors will scrutinize BoE Governor Andrew Bailey's comments at the post-meeting press conference at 12:30 GMT. Analysts at TD Securities offer a brief preview of the key central bank event risk and write: “We look for a 75 bps hike from the BoE in November. While the labour market has tightened further, inflation has matched the MPC's forecasts. Moreover, the several fiscal U-turns and change of PM and Chancellor should lower the risk of a larger hike. The delay of the fiscal event shouldn't mean much for the decision as the broad characteristics of fiscal policy are already known.” How could it affect GBPUSD? Ahead of the BoE's Super Thursday, the GBPUSD pair tumbles to a two-week low, below mid-1.1200s on Wednesday amid post-FOMC strong follow-through US dollar buying interest. A dovish BoE tilt could exert additional downward pressure on the British Pound and set the stage for an extension of the pair's recent pullback from a multi-week high. Meanwhile, a decision to frontload the rate hike might do little to provide any respite to bulls amid looming recession risks, suggesting that the path of least resistance for the GBPUSD pair is to the downside. Eren Sengezer, European Session Lead Analyst at FXStreet, outlines important technical levels to trade the major: “GBPUSD trades within a touching distance of 1.1250, where the 200-period SMA on the four-hour is located. In case the pair falls below that level and starts using it as resistance, additional losses toward 1.1200 (psychological level) and 1.1100 (psychological level) could be witnessed.” “On the upside, 1.1300 (Fibonacci 61.8% retracement) aligns as first resistance ahead of 1.1350 (Fibonacci 50% retracement, 100-period SMA) and 1.1435 (Fibonacci 38.2% retracement),” Eren adds further. Key Notes   •  Bank of England Preview: Why Super-Thursday is set to sink sterling, even in case of a big hike   •  BoE Interest Rate Decision Preview: A close call between 50 bps and 75 bps, GBP/USD set to suffer   •  GBP/USD Forecast: Pound looks vulnerable as BoE decision looms About the BoE interest rate decision The BoE Interest Rate Decision is announced by the Bank of England. If the BoE is hawkish about the inflationary outlook of the economy and raises the interest rates it will be positive, or bullish, for the GBP. Likewise, if the BoE has a dovish view on the UK economy and keeps the ongoing interest rate, or cuts the interest rate it will be seen as negative, or bearish.    
UK Budget: Short-term positives to be met with medium-term caution

Committee Of The Bank Of England (BoE) Is Very Divided

ING Economics ING Economics 03.11.2022 14:34
The Bank of England has hiked interest rates by 75 basis points for the first time. But its policy statement and new forecasts signal very plainly that the Bank rate is unlikely to rise as far as investors expect over coming months. We expect a 50bp hike in December, so it's unlikely to go above 4% next year The Bank of England has stepped up the pace of hikes The Bank of England faced a choice today between a ‘hawkish’ 50 basis-point rate hike and a ‘dovish’ 75bp – and in the event, it chose the latter path. Unlike the Fed and the European Central Bank, this is the first time the BoE has hiked by 75bp in this cycle. But there are no good options for the Bank, and the central message from its latest communications is clear: investors are expecting too much tightening at future meetings. We think today’s 75bp move is likely to be a one-off. The BoE’s new projections show that, if policymakers were to follow investor expectations and hike rates to 5%, the size of the economy would shrink by roughly 3 percentage points over several quarters. Inflation would be at zero in 2025. The Bank of England is forecasting a deep recession regardless of whether it hikes any further Source: Macrobond, ING, Bank of England   Curiously the message is similar – though far less extreme – in the Bank’s projections based on interest rates staying flat at 3% from now on. Not only does that suggest markets are overdoing tightening expectations, but at a pinch you could also say this hints at potential rate cuts somewhere down the line. Admittedly the Bank has been telling this story to a more limited extent for several months now in its forecasts. Governor Bailey also highlights that there’s an upward skew to its inflation forecasts, and policymakers are unsurprisingly nervous about putting too much weight on its models at a time of such uncertainty. A 75bp hike is likely to be a one-off Nevertheless, Andrew Bailey was very forthright in his press conference that rates are unlikely to rise as far as markets expect (currently just shy of 5%). What's more, the committee is very divided. One policymaker, Silvana Tenreyro, voted for just 25bp worth of tightening today. The Bank may have stepped up the pace this month, but central banks globally are having to assess whether ongoing aggressive rate hikes can be justified at a time when housing and corporate borrowing markets are beginning to creak. The choice the Bank faces at coming meetings is one of hiking aggressively to protect sterling, or moving more cautiously to allow mortgage rates to gradually fall. With around a third of UK mortgages fixed for just two years, we suspect the latter option will increasingly be seen as more palatable. The dovish messages littered throughout today’s statement and forecasts are a clear sign of that. We're pencilling in a 50bp rate hike in December and we think the Bank rate is unlikely to rise above 4% next year.   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Further Downside Of The AUD/JPY Cross Pair Is Expected

The AUD/USD Pair Is Waiting For The Development Of Support

InstaForex Analysis InstaForex Analysis 04.11.2022 08:01
This morning the Reserve bank of Australia raised the rate from 2.60% to the expected 2.85%. The Australian dollar did not react to the event, its growth in the morning is connected to a greater extent with the general correction of currencies after yesterday's fall. The aussie lost 60 points yesterday. On the technical side, the correction is caused by a reversal of the signal line of the Marlin Oscillator from the zero line. But this reversal is weak - raw materials are not growing, stock indices are declining. We are waiting for the development of support at 0.6255 – the price channel line, and here the medium-term direction of the price will be decided. The bears have the advantage in choosing scenarios, since the momentum after a double reversal from the MACD indicator line of the daily chart on October 27 and November 2 has not yet dried up. With surpassing 0.6255, the 0.6195 target will become available - the underlying line of the price channel. The four-hour chart shows a typical correction within a confident trend decline, albeit a local one. Probably, this correction or consolidation will be completed with the release of the US employment report in the evening. The forecast for Non-Farm Employment Change is 200,000, which is generally a good indicator.     Relevance up to 04:00 2022-11-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326224
Declining Industrial Activity and PPI in Poland Signal Potential Policy Easing

Cable Market (GBP/USD): The Decline Will Be Continue

InstaForex Analysis InstaForex Analysis 04.11.2022 08:05
The Bank of England raised the rate to the expected 0.75% and warned of two points: in the future, the pace of the rate hike will slow down, from the 3rd quarter the UK economy will enter a recession and it will last until mid-2024 with an increase in unemployment until the end of the 25th year to 6.4%. The pound fell by 230 points. Data on British GDP for the 3rd quarter will be released on November 11, the forecast of economists is -0.2%, obviously, the forecast coincides with the calculations of the central bank. The decline continued to the target level of 1.1170 on the daily chart. The signal line of the Marlin Oscillator went below the zero line into the area of the downtrend. After the price settles under 1.1170, we are waiting for the pound to fall further to 1.0785 - to the line of the price channel of the higher timeframe. On the four-hour chart, the price, together with the Marlin Oscillator, is turning into a slight correction. Perhaps the correction will last until the first noticeable resistance at 1.1260 - the former local support for October. After the end of the correction, we are waiting for a further fall towards the specified target.       Relevance up to 04:00 2022-11-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326228
The Price Of EUR/USD Pair Will Develop Sideways Movement

The Further Decline In The Euro (EUR) Is Expected

InstaForex Analysis InstaForex Analysis 04.11.2022 08:08
Yesterday, the euro fell by 66 points after a preliminary test from below the MACD indicator line (reversal from resistance). The price did not reach the support of 0.9710, and the Marlin Oscillator is already in the negative zone on the daily chart, which indicates the market's desire to develop a decline. Breaking the support will complete the technical formation of conditions for the price to move towards 0.9520. On the 4-hour chart, the price is settling with the rising Marlin Oscillator after yesterday's decline and in anticipation of today's US employment report. The employment forecast is optimistic. In the non-agricultural sector, 200,000 new jobs are expected against 288,000 in September, the unemployment rate, according to economists' calculations, may increase from 3.5% to 3.6%. But since the benchmarks of labor trends have already come out quite good in recent days, today's data may also exceed expectations. Such benchmarks are relatively low rates of weekly jobless claims, private sector employment (239,000), PMI sub-index from ISM employment in the manufacturing sector (50.0 vs. 48.7 in September). We expect the euro to fall further.       Relevance up to 04:00 2022-11-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326230
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The Euro (EUR) Missed A Good Chance To Form An Upward Trend

InstaForex Analysis InstaForex Analysis 04.11.2022 08:13
Analysis of EUR/USD, 5-minute chart The euro/dollar pair moved down on Thursday. If in previous articles we called it "corrective", now it is already descending, as the price has overcome the ascending trend line. The price is now around 200 points away from its 20-year lows and, apparently, is going to fall back to them and maybe even surpass it. That's how quickly and rapidly the situation in the foreign exchange market is changing. A week ago, the euro had pretty good chances for growth, and now it is ready to continue a long-term downtrend, which has been going on for two years. We said earlier that the fundamental and macroeconomic backgrounds remain, in fact, unchanged for the euro/dollar pair. Those factors due to which the pair fell, at least in 2022, remain. The US central bank added fuel to the fire on Wednesday evening, which assured of its readiness to continue and further tighten monetary policy. In regards to Thursday's trading signals, everything was unfortunate, since the first one was formed only when the price had already gone down 80 points. Therefore, the signal near the level of 0.9747 should not have been processed. We could have tried to work out the buy signal near the same level, formed during the US trading session, but it did not bring profit, as the price quickly returned to the level of 0.9747. The long position was closed by Stop Loss at breakeven. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of short orders initiated by non-commercial traders increased by 24,000, whereas the number of long orders declined by 2,700. As a result, the net position increased by 26,700 contracts. However, this could hardly affect the situation since the euro is still at the bottom. At the moment, professional traders still prefer the greenback to the euro. The number of buy orders exceeds the number of sell orders by 75,000. However, the euro cannot benefit from the situation. Thus, the net position of non-commercial traders may go on rising without changing the market situation. Among all categories of traders, the number of long positions exceeds the number of short positions by 19,000 (609,000 against 590,000). Analysis of EUR/USD, 1-hour chart You can see that the pair has changed its trend to a downward one on the one-hour chart. After a six-day fall, an upward correction may follow. However, now the euro still needs to overcome the Senkou Span B and Kijun-sen lines, which are above them. The euro missed a good chance to form an upward trend, once again. On Friday, the pair may trade at the following levels: 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, as well as the Senkou Span B (0.9900) and Kijun-sen lines (0.9859). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. The index of business activity in the services sector will be published in the European Union, as well as a speech by European Central Bank President Christine Lagarde. Reports on unemployment and nonfarm in the US. As you can see, there will be a lot of important statistics today, so the market could react to these reports. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-11-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326216
The EUR/USD Pair Chance For The Further Downside Movement

Technical Analysis Of The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 04.11.2022 08:16
Technical outlook: EUR/USD dropped through the 0.9730 mark on Thursday before finding bids again. The euro bounced back sharply thereafter and is seen to be trading close to 0.9790 levels at this point in writing. A high probability remains for a bullish turn from current levels and a push through 1.0200 highs in the next few trading sessions. EUR/USD is still holding above its critical support at 0.9700, followed by 0.9635 and 0.9535 levels respectively. The near-term structure continues to remain bullish till 0.9635 support is intact. Bulls are looking poised to come back in control from current levels as they unfold a potential Engulfing Bullish candlestick pattern on the daily chart. EUR/USD is also seen to be bouncing off the 0.786 Fibonacci retracement of the recent upswing between 0.9635 and 1.0093 levels respectively. A bullish turn from here has the potential to push the price through 1.0200, which is immediate resistance, at least. Only a sustained break below the 0.9635 mark will nullify the above structure and bring back bears into play. Trading plan: Potential rally towards 1.0200 against 0.9600 Good luck!     Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299665
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Pound To US Dollar Pair (GBP/USD) Canceled The Upward Trend

InstaForex Analysis InstaForex Analysis 04.11.2022 08:19
Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair continued to fall on Thursday. Most of it happened even before the announcement of the results of the Bank of England meeting, that is, it was a reaction to the results of the Federal Reserve meeting. A day earlier, we warned you that the market could work out Fed Chairman Jerome Powell's speech and the US rate hike within 24 hours. And so it happened. Thus, by the end of Thursday, the pair's quotes fell to the level of 1.1150 and settled below the rising trend line. Despite the fact that a tangible upward correction may now begin, the uptrend is broken, and the pound gets a new opportunity to fall to its absolute lows. Take note that the results of the BoE meeting were not dovish. The key rate rose by 0.75%, as expected by the majority. But the speech of BoE Governor Andrew Bailey, who described the prospects for the British economy in gloomy tones, turned out to be very pessimistic. In general, the British pound had few reasons to grow. Especially if we remember that the previous seven rate hikes had no positive effect on the pound. In regards to trading signals, the situation was quite good. Quotes settled below the level of 1.1354 at the beginning of the European trading session, so traders had to open a short position. Subsequently, the price fell to the level of 1.1212 and overcame it. There was no buy signal until the end of the day, so traders had to close the shorts manually. Profit on them amounted to at least 150 points, with which we congratulate everyone. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group opened 3,200 long positions and closed 200 short positions. Thus, the net position of non-commercial traders increased by 3,400, which is very small for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 43,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? As for the total number of open longs and shorts, the bulls have an advantage of 18,000 here. But, as we can see, this indicator does not help the pound too much either. We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair canceled the upward trend on the one-hour chart, but the pound may still rise in the next few days, as an upward correction is needed. The price is now below the Ichimoku indicator lines, so the probability of further decline is high. We also recall that today is the third "crazy" day in a row, as the most important reports on the labor market and unemployment will be published in the United States. You need to be ready for the pair's "flights" today. On Friday, the pair may trade at the following levels: 1.0538, 1.0930, 1.1060, 1.1212, 1.1354, 1.1486, 1.1649. Senkou Span B (1.1351) and Kijun-sen (1.1376) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. Today, the UK will release the index of business activity in the construction sector. But this report is unlikely to provoke a market reaction. But NonFarm Payrolls reports and unemployment in the US can and should do it. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.         Relevance up to 06:00 2022-11-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326234
EUR: German IFO Data and Central Bank Hawkishness Impact Euro/USD Range Trade

Technical Outlook Of The US Dollar Index (USD)

InstaForex Analysis InstaForex Analysis 04.11.2022 08:22
Technical outlook: The US dollar index rose to the 112.80 mark on Thursday before finding resistance and turning lower. The index is seen to be trading close to 112.25 levels at this point in writing as bears might prepare to come back in control. A high probability remains for a fall to 107.00 levels before the index could find some support again. The US dollar index is facing immediate resistance at 113.65, followed by 114.67 while support is seen around 107.40, followed by 104.30 respectively. Furthermore, the price is pulling back after hitting the back side of the past support trend line, which should act as strong resistance going forward. The immediate bearish boundary, which is being worked upon is between 112.80 and 109.00 respectively. Quotes are seen to reverse from the 0.786 Fibonacci retracement of the above around 112.80 levels. A break below 110.00 will confirm that the price is heading further south towards 107.00 at least. Only a consistent break above 113.65 could nullify the above structure. Trading plan: Potential drop towards 107.00 against 113.65 Good luck!       Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299669
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

A Corrective Decline Of The EUR/JPY Pair Is Expected

InstaForex Analysis InstaForex Analysis 04.11.2022 08:27
We have been looking for EUR/JPY to take off in a strong rally, but the most recent price action doesn't really support that scenario and rather looks like an ending diagonal just completed its wave v/ of 5 at 148.40. A corrective decline is ready to take over the weeks to come. A break below minor support at 143.75 will confirm that the ending diagonal has been completed and a corrective decline to the starting point of the ending diagonal at 133.25 is unfolding.     Relevance up to 07:00 2022-11-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299675
ECB decision: 50bp rate hike is on the cards, but this week's data can be game-changing

It's Just A Matter Of Time Before The EUR/USD Pair Starts To Grow

InstaForex Analysis InstaForex Analysis 04.11.2022 08:32
  The US dollar is fighting the best it can to stay strong and try to reach a new high against the euro. Looking at the most recent price action, that remains a possibility if minor support at 0.9704 is broken. The 11-year decline in EUR/USD is about to end and it's just a matter of time before EUR/USD starts to rally strongly. Only a direct break above resistance at 1.0095 will confirm that a long-term already is in place. The labor market in the US remains relatively strong. The Fed hikes rates more aggressively to fight inflation than the market has expected. However, the underlying weakness in the US economy will soon show its ugly face as the real estate market is on the edge of a collapse and that will be a major drag on the economy.   Relevance up to 07:00 2022-11-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299677
OPEC+ Meeting: Saudi Arabia Implements Deeper Voluntary Cuts to Boost Oil Prices

Supply Outlook Of Crude Oil Remains Challenged | The Norges Bank (NB) Took The Dovish Path

Saxo Bank Saxo Bank 04.11.2022 08:44
Summary:  While the Fed surprised hawkish this week, most other central banks have been surprising dovish, with the latest being Bank of England which tried to cool down the aggressive market pricing for their terminal rate. Meanwhile, Norges Bank also took the less hawkish path, and this has made USD the king again with sterling suffering the heaviest blow. US stocks and bonds were lower, and oil prices, as well as precious metals, also suffered in the aftermath of Fed’s hawkish tilt. Focus turns to NFP today which should continue to suggest a tight labor market. What is happening in markets?   The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) continued to slide on hawkish Fed and weaker outlook U.S. stocks continued to adjust for the second day to the increased prospect of interest rates being higher for longer following Powell’s pushback to the market’s speculation for Fed pivot on Wednesday, with S&P falling 1.06% and Nasdaq 100 down 2%. For a discussion on the implication of Powell’s hawkish comments on equities, please refer to Peter Garnry’s article here. Information technology, falling 3%, was the worst-performing sector in the S&P 500 while energy, up 2%, and industrials, up 1% were the outperformers. Announcements of hiring or headcount freezes from Amazon (AMZN:xnas), Apple (AAPL:xnas), Lyft (LYFT:xnas), and Morgan Stanley stirred concerns among investors about the outlook of the economy and corporate earnings. After closing, Starbucks (SBUX:xnas) reported above expectations revenues and earnings while a number of software companies, including Atlassian (TEAM:xnas), Twilio (TWLO:xnys), Appian (APPN:xnas), missed revenues guidance. 10-year U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) The U.S. yield curve bear flattened as the 2-year yield jumped to as high as 4.74%, before finishing the session at 4.71%, the highest level since 2007. It brought the 2-10 year spread to was wide as -58 and close at -56, the most inverted level in 40 years. The market has brought another 75bp hike in December back to the table, pricing in a slightly more than 50-50 chance. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) Being hit by the double whammy of the reiteration from China’s National Health Commission that dynamic zero-Covid is the primary pandemic control strategy and a hawkish Fed Chair Powell hinting at higher terminal rates, Hang Seng Index tumbled 3.06% and the Hang Seng Tech Index (HSTECH.I) dropped 3.8% on Thursday. China Internet, EV, healthcare and property stocks dragged the benchmark indices lower. Following the hike by the U.S. Fed overnight, five leading commercial banks in Hong Kong raised their prime rates by 25bps. On the data front, Caixin China PMI Services came in at 48.4 in October (consensus: 49.0; Sep: 49.3), falling further into contractionary territory. CSI300 performed relatively more resilient and pared some losses in the afternoon to finish the day losing only 0.8%. Semiconductors, defence and basic chemicals gained. Buying emerged overnight in the U.S. hours, Nasdaq China Golden Dragon Index jumped more than 3% and Hang Seng futures were nearly 1.5% higher from Hong Kong closing. FX: GBPUSD suffered on BOE-Fed differential The USD is seeing another leg higher not just on the back of Powell’s hawkishness this week, but also with the other central banks taking the less hawkish path. Both Norges Bank and BOE surprised dovish yesterday, in continuation of the trend that we have seen from Reserve Bank of Australia, Bank of Canada and the ECB earlier. GBPUSD fell over 2% to sub-1.12 on the announcement that BOE thinks market’s current pricing is too aggressive. December pricing is still at another 50bps rate hike but it won’t be a surprise if it is pulled lower after we had two dovish dissenters on Thursday. NOK saw a selloff as well, while USDJPY continues to find trouble to overcome 148.50 despite the fresh surge in US yields. Crude oil (CLX2 & LCOZ2) worried about demand After a hawkish FOMC, commodity markets have once again started to focus on demand weakness that could come as a result of Fed’s rapid tightening pace. Meanwhile, any hopes of a recovery in Chinese demand have also been crushed for now with authorities still standing by their zero Covid strategy. WTI futures traded close to $88/barrel while Brent futures were below $95. Supply outlook remains challenged however going into the winter, with OPEC+ having announced production cuts followed by EU sanctions on Russian crude flows from December. Gold (XAUUSD) and Silver (XAGUSD) to face short-term pressures Our Head of Commodity Strategy Ole Hansen wrote yesterday on how gold and silver turned sharply lower yesterday after Fed Chair Powell delivered a hammer-blow to sentiment across markets as he managed to both pull off the idea of the Fed may indeed soon pivot to a slower pace of rate hikes, but that any talk of a pause is “very premature”. Gold touched sub-1620 levels yesterday before a slight recovery later in the session while Silver took a look below $19. There is likely to be more pressure in the short term, but as yields get closer to a peak or as the possibility of central bank policy mistake increases, while inflation continues to run higher, the outlook for the precious metals could revert to being positive.   What to consider? Bank of England’s dovish hike The BOE hiked by 75bps to 3%, as expected by the consensus, but strongly pushed back against expectations for the scale of future moves, saying that the terminal rate priced in currently by the markets would induce a two-year recession. There were also two dovish dissenters at the meeting, one calling for 50bps rate hike and another for a mere 25bps. New forecasts were also released, which gave a particularly grim outlook for the economy, looking for a GDP print of -0.5% QoQ in Q3 2022 vs -0.1% expected in September. The inflation forecast now shows a peak around 11% in Q4, which is marginally hotter than the prior meeting’s projection. US weekly jobless claims tick lower, ISM services softened There was a slight decline in initial jobless claims to 217k from previous 218k, coming in marginally below the expected at 220k. Still, labor market remains tight despite some signs of cooling and continues to provide room to the Fed to continue its tightening cycle. Meanwhile, the ISM services index fell more than expected to 54.4 in October from 56.7 previously, however the prices paid gauge increased by 2% pts to 70.7 and remains elevated. Norges Bank hiked by 25bps With expectations split between a 25 or 50bps rate hike, Norges Bank took the dovish path as well despite a deteriorating inflation outlook. However, the Committee continues to place emphasis on the growth situation writing "there are signs that some areas of the economy are cooling down" and acknowledging the tightening effect that the higher policy rate is beginning to have. For the December gathering, the Committee points to a further hike being likely. Australia to double its Royal Australian Airforce cargo fleet in a $10 billion US military deal US officials are looking to approve the sale of $10 billion of iconic cargo aircraft, including 24 Hercules planes, to Australia. The US Defence Security Co-operation Agency says Australia is one of its most important allies in the western Pacific and its location and economic power ‘contributes significantly to ensuring peace and economic stability in the region’. Australia has operated the Hercules aircraft for decades, with the aircraft playing a major role in moving troops and equipment in and out of war zones and evacuating civilians after the fall of Kabul last year. It has also performed countless missions flying humanitarian supplies to countries hit by natural disasters. Australia trade surplus swells on surging energy exports Australia’s trade surplus swelled to $12.4 billion in September, smashing expectation of a $8.75 billion surplus. It comes as exports rose far than expected, up 7% vs the 1% consensus expected thanks to greater demand for mineral fuels for energy, while iron ore exports also rose. Imports remained unchanged month on month. Multiple reports of hiring freezes emphasizing margin pressures Apple paused all hiring for roles outside research and development. Amazon will pause new incremental hires in its corporate workforce, citing an "uncertain" economy and its recent hiring boom. Lyft will eliminate 13% of staff, or around 683 people.   For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/market-insights-today-4-nov-04112022
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

Rebound In The USD/JPY Pair Has Triggered Expectations For Intervention By The Bank Of Japan

TeleTrade Comments TeleTrade Comments 04.11.2022 08:50
USDJPY is oscillating above 148.00 as investors are awaiting the US NFP release for making informed decisions. Rising interest rates and weaker economic projections have impacted employment opportunities. An intervention in FX by the BOJ is expected as USDJPY has rebounded in the past few trading sessions. The USD/JPY pair is displaying a topsy-turvy performance above the critical support of 148.00 in the Tokyo session as investors have shifted their focus towards the release of the US employment data. The risk impulse is still favoring safe-haven assets as anxiety ahead of the US Nonfarm Payrolls (NFP) data is accelerating. S&P500 futures have hardly moved in the Tokyo session as investors have shifted to the sidelines. The US dollar index (DXY) is continuously struggling to surpass the immediate hurdle of 113.00. Meanwhile, the 10-year US Treasury yields have escalated to 4.16% as a hangover of hawkish guidance on the interest rates by the Federal Reserve (Fed) is far from over. Investors are in the mix on whether the Fed will pause its policy tightening measures after reaching the terminal rate proposed at 4.75% or will continue tweaking monetary policy as short-term inflationary expectations are still de-anchored. For December monetary policy decision, Friday’s NFP data will be very crucial. Continuous increments in interest rates are responsible for the postponement of expansion plans from corporate, which has trimmed the requirement for more candidates. Also, weaker economic projections have resulted in a halt in the recruitment process by various firms. It is also noticed that job additions are increasing but at a significantly diminishing rate from the past three months and October, month report is no new under the sun. As per the consensus, the US economy has added 200k jobs in the labor market vs. the prior release of 263k. Also, the Unemployment Rate is seen higher at 3.6%. On the Tokyo front, , investors are worried over Japan-North Korea renewed tensions after North Korea fired an unidentified ballistic missile over Japan, as broadcasted by NHK. For safety measures, Japan administration warned residents to take shelter from missile threats. Apart from that, a firmer rebound in the USDJPY pair has triggered expectations for repeat intervention by the Bank of Japan (BOJ) to support the Japanese yen against sheer volatility.
Rates Spark: Action at Both Ends of the Curve - US 10yr Treasury Yield and European Rates

The Retreat Of The US Dollar (USD) Will Positively Affect The Indian Rupee (INR)

TeleTrade Comments TeleTrade Comments 04.11.2022 08:54
USDINR sellers poke one-week-old support line amid sluggish markets. PBOC moves, pre-NFP consolidation allowed Asian markets to remain mildly bid. US dollar needs strong jobs report to defend the biggest weekly gains in seven. USDINR remains depressed around 82.65, down for the second consecutive day, as traders await the all-important US jobs report during early Friday. In doing so, the Indian Rupee (INR) pair also benefits from the US dollar’s retreat ahead of the key Nonfarm Payrolls (NFP). Further, the People’s Bank of China’s (PBOC) efforts to defend the Chinese Yuan (CNY) join the broad optimism in Asia to also favor the USD/INR pair sellers of late. However, firmer Treasury yields and hawkish Fed bets keep the pair buyers hopeful. On the same line could be the recently firmer Oil price, which in turn has inverse relations with the INR due to India’s reliance on energy imports and a record deficit. Furthermore, covid woes in China and fears of recession elsewhere, as well as the hawkish Fed, tease the USDINR bears. On Thursday, the USDINR pair initially rose to the highest levels in three weeks before retreating from 83.18. The pullback moves could be linked to the market’s optimism after the Reserve Bank of India’s (RBI) inflation talks. “The Reserve Bank of India's monetary policy committee met on Thursday to discuss the bank's report to the government for having failed to meet its inflation targets for three straight quarters for the first time since it was set up in 2016,” said Reuters. The news also mentioned that India's central bank will not immediately release details of the report to the government, Governor Shaktikanta Das said. Elsewhere, US ISM Services PMI for October dropped to 54.4 from 56.7 prior and 55.5 market consensus. However, the Factory Orders matched 0.3% forecast versus 0.2% upwardly revised previous readings. It should be noted that the US S&P Global Composite PMI and Services PMI got an upward revision from their preliminary readings for the stated month whereas the Initial Jobless Claims eased to 217K for the week ended on October 28 versus 220K expected and 218K prior. On the other hand, US inflation expectations, as per the 10-year and 5-year breakeven inflation rates per the St. Louis Federal Reserve (FRED) data, dropped to the lowest levels since October 19 and 13 in that order. Amid these plays, the Wall Street benchmarks closed in the red while the US 10-year Treasury yields refreshed a one-week high to 4.22% before retreating to 4.15%. Notably, the US 2-year bond coupons rose to the highest levels since 2007. It should be noted that the S&P 500 Futures remain indecisive while the yields are sidelined at the latest, which in turn portrays the sluggish markets and allow USDINR to remain weak. Moving on, the US jobs report for October will be crucial for near-term directions. Forecasts suggest that the headline US Nonfarm Payrolls (NFP) could ease to 200K in October from 263K prior while the US Unemployment Rate may increase to 3.6% from 3.5% prior. Technical analysis Bearish MACD signals join the RSI (14) retreat to favor the USDINR sellers in breaking the 82.60 support, comprising an ascending trend line from October 27. However, the late October swing low near 81.90 appears a tough nut to crack for the pair sellers. That said, recovery needs a daily closing beyond 83.00 to convince buyers.    
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The Crude Oil Situation Has Been Weighing On The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 04.11.2022 08:57
USDCAD takes offers to refresh intraday low, snapping six-day uptrend. Cautious optimism in the market joins firmer oil prices, US dollar pullback to tease pair sellers. Fed versus BOC play can keep bulls hopeful even if the US jobs report fail to impress DXY buyers. USDCAD cheers the broad US dollar pullback, as well as a mildly positive market mood, as it prints the first intraday loss in seven. That said, the Loonie pair takes offers to refresh the daily low near 1.3680 during early Friday morning in Europe. That said, the US Dollar Index (DXY) retreats from a fortnight high to pare the biggest weekly gain in seven, refreshing intraday low around 112.60 by the press time. The greenback’s latest losses could be linked to the hopes of witnessing positive news surrounding the Russia-Ukraine tussles as leaders from Germany and China meet. Also, the People’s Bank of China’s (PBOC) efforts to defend the Chinese Yuan (CNY) join the pre-data consolidation to add strength to the risk-on mood. It should be noted that the firmer prices of the Crude Oil, Canada’s main export item, also weigh on the USDCAD of late. WTI crude oil rises 1.25% intraday to $88.45 at the latest. Alternatively, the hawkish plays of the US Federal Reserve (Fed) contrast with the Bank of Canada’s (BOC) easy rate hike to favor buyers. Also, strong yields and fears of an economic slowdown are extra catalysts keeping the USDCAD bulls hopeful. Amid these plays, the US stock futures print mild gains and the yields remain firmer whereas the Asia-Pacific equities print notable gains led by China. Moving on, the employment data from the US and Canada will be crucial for the USDCAD pair traders to watch and might help the recent sellers to keep the reins amid downbeat market consensus for the US numbers. Forecasts suggest that the headline US NFP could ease to 200K in October from 263K prior while the US Unemployment Rate may increase to 3.6% from 3.5% prior. On the other hand, Canada’s Net Change in Employment may also ease to 10K versus 21.1K prior with the Unemployment Rate likely witnessing an uptick to 5.3% from 5.2% prior. Even so, the Fed versus the BOC game is in the favor of the USDCAD bulls and hence any pullback could be considered non-lucrative for sellers. Technical analysis USDCAD retreats from a six-week-old horizontal resistance, around 1.3825-10, but the downside remains elusive unless the quote stays beyond a convergence of the 50-DMA and lows marked since late October, close to 1.3500.
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

Further Weakness Of The EUR/GBP Pair Is Expected

TeleTrade Comments TeleTrade Comments 04.11.2022 09:02
EURGBP pares the biggest daily gain in six weeks. Sustained break of descending triangle, firmer oscillators favor buyers. Bears need validation from 0.8660, October’s high adds to the upside filters. EURGBP takes offers to refresh the intraday low near 0.8708 heading into Friday’s European session. In doing so, the cross-currency pair consolidates the biggest daily gains since late September, marked the previous day. Technically, the quote’s recent weakness could be portrayed by a pullback from the 200-SMA. However, a successful break of the three-week-old bearish triangle, crossed on Thursday, keeps the pair buyers hopeful unless the quote drops back below 0.8660. Also favoring the EURGBP sellers could be the bullish MACD signals and the strong RSI (14), not overbought. Even if the quote breaks 0.8660 resistance-turned-support, the downside could have a limited shelf life lower line of the stated triangle, around 0.8570, which could challenge the pair bears. It should be noted that September’s low near 0.8566 acts as the last defense of the EURGBP buyers. Alternatively, recovery moves need to cross the 200-SMA hurdle of 0.8740 to recall the EURGBP bulls. Even so, the previous monthly top near 0.8865 appears a tough nut to crack for buyers. Following that, a run-up towards the 0.9000 psychological magnet can’t be ruled out. EURGBP: Four-hour chart Trend: Further weakness expected
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

The New Zealand Dollar To US Dollar (NZD/USD) Pair Is Near The Daily Maximum

TeleTrade Comments TeleTrade Comments 04.11.2022 09:08
NZDUSD regains positive traction on Friday and draws support from a combination of factors. A modest USD downtick and a positive risk tone offer some support to the risk-sensitive Kiwi. The Fed’s hawkish outlook should help limit the USD losses and cap the pair ahead of the NFP. The NZDUSD pair attracts fresh buying near the 0.5755 region on Friday and reverses the previous day's slide to over a one-week low. The pair maintains its bid tone through the early European session and is currently placed near the daily high, just above the 0.5700 round-figure mark. The US Dollar pauses the post-FOMC rally and for now, seems to have snapped a six-day winning streak, which, in turn, offers support to the NZDUSD pair. A generally positive tone around the equity markets is seen weighing on the safe-haven buck and benefiting the risk-sensitive Kiwi. Apart from this, the USD downtick could be attributed to some repositioning trade ahead of the closely-watched US monthly jobs report, due for release later during the early North American session. That said, elevated US Treasury bond yields, bolstered by a more hawkish stance adopted by the Federal Reserve, should limit any deeper USD pullback and cap gains for the NZDUSD pair. It is worth recalling that Fed Chair Jerome Powell downplayed expectations for a dovish pivot and said that it was premature to discuss a pause in the rate-hiking cycle. Powell added that the terminal rate will still be higher than anticipated and triggered a sharp rise in the US Treasury bond yields. In fact, the yield on the two-year US government bond, which is highly sensitive to interest rate hike expectations, touched a 15-year high on Thursday and inched closer to the 5% psychological mark. The benchmark 10-year US Treasury note, meanwhile, holds steady above the 4.0% threshold and favours the USD bulls. Heading into the key data risk, the fundamental backdrop might hold back traders from placing aggressive bets and cap the upside for the NZDUSD pair, for the time being.
Upcoming Corporate Earnings Reports: Ashtead, GameStop, and DocuSign - September 5-7, 2023

Positive PMI Results In Europe And Great Britain | Waiting For The Result Of US Nonfarm Payrolls

Kamila Szypuła Kamila Szypuła 04.11.2022 10:48
In the first half of the day, attention will be paid to PMI reports in Europe. In the second half of the day, attention will shift to the results of the North American labor market. Retail Sales The first important data for the market came from Australia at the beginning of the day. the published retail sales report for another consecutive reading remains unchanged at 0.6%. This means that the demand for manufactured goods in this country remains unchanged, which may be due to the economic situation. European Services PMI The largest economies of the euro zone today published their reports for Services PMI. The overall picture is positive. Spain was the first country in the European bloc to provide a positive report. Services PMI indices reached the level of 49.7 and it was an increase against the expected 48.3 and against the previous reading of 48.5. In France, the result was also higher than expected (51.3) and reached the level of 51.7. The current reading is much lower than the previous 52.9. In the largest economy of the European Union, i.e. Germany, this indicator also increased from the level of 45.0 to the level of 46.6. These three positive readings significantly influenced the European Services PMI score which reached 48.6 and was only 0.2 from the previous reading. Only in Italy did this indicator drop. The current reading in this country is at 46.4. UK Construction PMI For the UK, the most important event of today is the Construction PMI report. The reading turned out to be really positive. The result for this sector was higher not only than the forecasts but also higher than the previous result. Construction PMI increased from 52.3 to 53.2 ECB President’s speech At the end of the week, an important speech will be from the European Union. At 10:30 CET, the following spoke: European Central Bank (ECB) President Christine Lagarde. Her comments may determine a short-term positive or negative trend. As the most important person in a European bank, he can provide very valuable comments and guidelines regarding future actions within the framework of monetary policy. Nonfarm Payrolls The United States will publish data on the number of people employed outside the agricultural sector. This number is expected to reach 200K. This forecast shows that the downward trend continues. After March, the number dropped significantly and maintained this trend until it broke out in August which was a false sign of a change in the trend. After a positive August, the decline will begin again. It may be a positive fact that he achieved better results than expected. Source: investing.com US Unemployment Rate The unemployment rate is expected to reach 3.6%. If the results met the expectations, it would mean an increase of 0.1% and thus a return to the level obtained between April and July. Canada Employment Change Canada also share the results of its job market. The outlook for the Canadian labor market is not very good. Employment Change is expected will reach the level of 10K over the previous 21.1K. The latest reading was a positive reflection from the negative levels from previous periods, but it may turn out to be one-off. Although expectations are above zero, it is not a good picture of the Canadian economy. The unemployment rate can reflect this as well. The unemployment rate is expected to increase by 10 porcet points to 5.3%. Summary 1:30 CET Australia Retail Sales (MoM) 9:15 CET Spanish Services PMI 9:45 CET Italian Services PMI 9:50 CET French Services PMI 9:55 CET German Services PMI 10:00 CET EU Services PMI (Oct) 10:30 CET UK Construction PMI 10:30 CET ECB President Lagarde Speaks 13:30 CET US Nonfarm Payrolls (Oct) 13:30 CET US Unemployment Rate (Oct) 13:30 CET Canada Employment Change (Oct) Source: https://www.investing.com/economic-calendar/
German labour market starts the year off strongly

Speech By The German Chancellor Olaf Scholz

TeleTrade Comments TeleTrade Comments 04.11.2022 11:07
German Chancellor Olaf Scholz is speaking at a press conference with Chinese Premier Li Keqiang on Friday, noting that “in these times, it's even more important than usual to talk and exchange with each other.” Further comments   It's good and right for me to be here. Xi andIi are of the same opinion that nuclear threats are not acceptable. It was clear China and Germany were no friends of "decoupling". But both need reciprocity and the same access for investments on both sides, and also prevent dependencies, Scholz said during his visit to Beijing. China will allow Biontech vaccine for expatriates in China, hopefully soon for more approval. We notice that in China self-sufficiency efforts are more and more discussed, whereas before economy was in the foreground. Want to support China in climate goals, work on goals until consultations next year. Urge Putin not to refuse an extension of Ukraine grain deal.   Market reaction EURUSD is trading listlessly below 0.9800, adding 0.32% on the day, awaiting the US Nonfarm Payrolls (NFP) release. 
China: PMI positively surprises the market

Another Leg Higher In The USD Will Mean Further Pressure On Asian FX

Saxo Bank Saxo Bank 04.11.2022 12:15
Summary:  With the Fed turning markedly more hawkish this week, along with other key central banks such as Bank of England and Norges Bank adding to the list of central banks taking dovish paths, there is potentially scope for another leg higher in the US dollar. A short-term peak in the greenback will only be seen when markets fully price in the Fed path, while a turnaround will have to wait for a shift in US economic data trends. Still, even mounting recession concerns will drive safe-haven flows to US assets. The strength of the US dollar has been the biggest talk of town this year. After a steady increase since 2008, the USD was already in a strong position at the start of the year, but it has gained a further over 17% year-to-date. Questions like when will the USD peak or has it reached a top have been on investors’ minds, and we have often pushed back on these expectations. My previous piece on the US dollar highlighted that a few things may need to change before we call it a top in the USD. These included a possible peak in the yield differential between the US and other Developed Markets, or China to part with its zero Covid policies. Both of those factors, for now, have turned further in favour of another bout of USD strength. Fed’s hawkishness vs. other central banks’ dovishness Fed Chair Powell surprised hawkish at the FOMC meeting this week, managing to reverse the dovish sentiments that developed following the press release. Pivot hopes were crushed, with the only pivot coming through being hawkish to more hawkish. Even as the Fed moves to a smaller pace of rate hikes from here, it has guided for a higher terminal rate compared to the median projection of 4.6% as per the September dot plot. This has sprung fresh strength in US yields, with 2-year printing fresh highs of ~4.75% and 10-year yields inching above 4.20% as well. In fact, the doors to 10-year yields reaching 4.75-5% have been opened with Fed’s terminal rate projections now above 5.1%. This, alone, has the potential to spark a fresh wave of strength in the US dollar. However, to add to the mix, we now have most other DM central banks taking the less hawkish route. This began with the Reserve Bank of Australia stepping down to smaller rate hikes in October, as it highlighted concerns around consumer household budgets. This was followed by dovish hints from the European Central Bank and the Bank of Canada. The latest ones from yesterday, Norges Bank and Bank of England, also surprised dovish. With expectations split between a 25 or 50bps rate hike, Norges Bank took the dovish path and hiked 25bps despite a deteriorating inflation outlook. Bank of England, despite a 75bps rate hike on Thursday, strongly pushed back against expectations for the scale of future moves, saying that the terminal rate priced in currently by the markets would induce a two-year recession. There were also two dovish dissenters at the meeting, one calling for 50bps rate hike and another for a mere 25bps. Markets are still pricing in more than a 50bps hike for the BOE’s December meeting, but expect this pricing to pare back as we approach December. This upward re-pricing of the Fed rate path, together with a downward re-pricing of expectations from other DM central banks is clear indication of further room for the USD to run higher. China’s Zero-Covid won’t disappear overnight While there was some speculation this week that China could start to consider ways to part with its Zero Covid policy, none of that has been confirmed by the authorities. If we do see the China economy open up, that suggests commodity prices could bump higher as China demand comes back online. That should support the commodity currencies such as AUD and NZD, and also bring in a recovery in the Chinese yuan. But any massive shifts or significant steps to open up the economy are unlikely in the near term, and these will likely remain subtle at best. A dynamic Zero-Covid policy is likely to stay for now, potentially with some flexibility around quarantine requirements or PCR tests. Recession risks will bring safe-haven flows to the USD The US economy still remains in a position of strength, with a strong labor market and significant household savings. This, in comparison to rising recession fears in the EU and the UK, suggest that capital flows will continue to be fuelled towards the safety of US assets. Even if we see a mild recession in the US, markets will be scrambling for liquidity which is usually found in US dollar or the US Treasuries. A temporary peak may be seen in the USD later in Q4 or early Q1 as Fed’s upward pricing reaches a peak, but still, a turnaround in the USD will be slow and stretched. What causes the turnaround? In the short run, a peak in USD would be a result of a near peak in pricing in the Fed rate path. But a more sustainable trend lower will have to wait for US economic data to show a materially different trend. Say core PCE down to 0.1-0.2% MoM levels or labor market materially cooling with NFP gains down to about 100k or so. Asian FX to continue to face headwinds Another leg higher in the USD will mean further pressure on Asian FX, especially the Chinese yuan which is facing policy divergence to the Fed and a slowing economy at home. Other tech-exposed currencies like the Korean won (KRW) and Taiwanese dollar (TWD) may be under greater pressure as well, although relative resilience can be expected for the safe-haven Singapore dollar (SGD). The Indonesian rupiah (IDR) will also likely be supported if Bank Indonesia adopts a fast pace of tightening, as a favourable current account situation also lends support. Investment inspiration to consider Long USD and short risk assets is perhaps still the most favourable strategy. We previously listed out tools that can be used to go long US dollar here. In the FX space, this can be traded using options as well with potential short positions on GBP, EUR, TWD, KRW. Also, consider that upward pricing of Fed’s rate path from here can mean short-term headwinds for Gold and Silver. We still expect medium-term upside in precious metals, however, as inflation expectations remain anchored higher in the new deglobalized world. Meanwhile, a lower pace of Fed rate hikes from here could reduce volatility in the interest rate markets, so watch the MOVE index. This could potentially lower the volatility in the FX markets as well. We believe a peak in bond volatility will be the key, and the first sign, for the markets to reverse trend.     Source: https://www.home.saxo/content/articles/forex/us-dollar-still-no-signs-of-peaking-04112022
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Strong Domestic Data Should Provide Lift To The Canadian Dollar (CAD)

TeleTrade Comments TeleTrade Comments 04.11.2022 12:34
Canadian employment details overview Statistics Canada is scheduled to publish the monthly employment report for October later this Friday at 12:30 GMT. The Canadian economy is anticipated to have added 10K jobs during the reported month, down from the 21.1K rise reported in September. The unemployment rate is anticipated to edge higher from 5.2% to 5.3% in October. According to analysts at NBF: “Recent economic indicators point to a slowdown in growth in Canada, a phenomenon that could be reflected in employment data. Layoffs may well have remained low during the month, but we believe this could have been offset by a slowdown in hiring amid declining small business confidence. Our call is for a 5K increase. Despite this gain, the unemployment rate may increase from 5.2% to 5.4%, assuming the participation rate rose one tick to 64.8% and the working-age population grew at a strong pace.” How could the data affect USDCAD? The data is more likely to be overshadowed by the simultaneous release of the closely-watched US jobs report - popularly known as NFP. That said, a significant divergence from the expected readings should influence the Canadian dollar and provide some meaningful impetus to the USDCAD pair. In the meantime, a sharp intraday rise in crude oil prices, to a nearly one-month high, underpins the commodity-linked Loonie. This, along with a modest US Dollar pullback from a two-week high touched on Thursday, is seen exerting heavy downward pressure on the major. Strong domestic data should provide an additional lift to the Canadian dollar and pave the way for a further intraday depreciating move for the USDCAD pair. Spot prices might then turn vulnerable to weaken further below the 1.3600 mark and aim back to test the 1.3500 psychological mark, which now coincides with the 50-day SMA. Conversely, any disappointment from the Canadian jobs data and (or) upbeat US NFP report should assist the USDCAD pair to attract fresh buying. Any attempted recovery, however, might confront some resistance near the 1.3675-1.3680 region. This is closely followed by the 1.3700 round figure and the next relevant hurdle near the 1.3735-1.3740 region. A sustained strength beyond the latter will negate any near-term negative bias and allow spot prices to aim back to conquer the 1.3800 mark. Key Notes   •  Canadian October Jobs Preview: Labor market upturn in the doldrums   •  Canadian Jobs Preview: Forecasts from five major banks, quite tepid jobs gain in October   •  USDCAD remains heavily offered below mid-1.3600s ahead of US/Canadian jobs data About the Employment Change The employment Change released by Statistics Canada is a measure of the change in the number of employed people in Canada. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. Therefore, a high reading is seen as positive, or bullish for the CAD, while a low reading is seen as negative or bearish. About the Unemployment Rate The Unemployment Rate released by Statistics Canada is the number of unemployed workers divided by the total civilian labour force. It is a leading indicator for the Canadian Economy. If the rate is up, it indicates a lack of expansion within the Canadian labour market. As a result, a rise leads to weaken the Canadian economy. Normally, a decrease of the figure is seen as positive (or bullish) for the CAD, while an increase is seen as negative or bearish.    
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The RBA Steep Tightening Cycle Is Slowing Growth And Hurting Businesses

Kenny Fisher Kenny Fisher 04.11.2022 11:32
AUD/USD continues to show strong volatility and is sharply higher today. In the European session, the Australian dollar is trading at 0.6338, up 0.81%. This follows losses of almost 1% on Thursday. RBA sees lower growth, higher inflation The RBA monetary policy statement was gloomy, with a warning that tough times lie ahead for the Lucky Country. The central bank is projecting a GDP of 3% over 2022, slowing to 1.5% in 2023. Inflation is expected at 4.75% over 2023, higher than the 4.25% pace in its previous policy statement. The forecasts are based on the cash rate peaking at 3.5% in mid-2023. The RBA raised the cash rate to 2.85% earlier this week, with a 0.25% hike, and Governor Lowe said that the central bank was on a “narrow path” that required “striking the right balance between doing too much and too little.” The RBA finds itself in a pickle, as its steep tightening cycle is slowing growth and hurting businesses and households. At the same time, inflation remains red-hot at 7.3%, fuelled by high food prices. Inflation remains the RBA’s number one priority, but it has eased up on the size of the hikes, hoping that inflation will peak shortly and a recession can be avoided. The week wraps up with the US nonfarm payrolls report, which has been overshadowed by Fed meetings and inflation releases. Still, the release is carefully watched by Fed policymakers and today’s data will be a factor in the December rate decision. The October consensus stands at 200,000, lower than the September reading of 263,000. With the markets split 50/50 on whether the Fed will raise rates by 0.50% or 0.75%, the NDP could provide some volatility in the currency markets in the North American session.   AUD/USD Technical There is resistance at 0.6403 and 0.6532 There is support at 0.6283 and 0.6196 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
US Treasury Yields Surge: Implications for Global Markets and Economies

There Is Still A Possibility Of A New Fall In Stock Indices

InstaForex Analysis InstaForex Analysis 04.11.2022 12:10
The outcome of the Fed meeting continues to influence world markets. However, there is a high chance that another local decline will be seen in the stock markets, while the dollar will have a new wave of strengthening. This is because the latest inflation data is coming, as well as the employment report in the US. Earlier, analysts have pointed out that the Fed will continue its aggressive rate hike if the US economy slide into recession despite the labor market having a good condition. The central bank signaled the same thing, saying that a strong labor market and economy near the edge of a recession will allow them to fight inflation vigorously. This means that if the US jobs report for October exceeded expectations, the Fed will raise rates again by 0.75%, if necessary. That is why it is better to be cautious and moderately optimistic about the end of the bear market in the equity markets. As mentioned above, there is still a possibility of a new fall in stock indices, which will once again be accompanied by a rise of dollar. This is further evidenced by the dynamics of treasury yields, which are still close to local highs. Forecasts for today: EUR/USD The pair is trading above 0.9750. If the US employment data turn out to be higher than expected, the quote will fall to 0.9650. AUD/USD The pair is above 0.6335. Further selling pressure will push it to 0.6250.     Relevance up to 07:00 2022-11-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326248
Unraveling UK Inflation: The Bank of England's Next Move

The Dovish Decision Of The Bank Of England (BoE) Puts A Heavy Burden On The GBP

Saxo Bank Saxo Bank 04.11.2022 13:39
Summary:  The FOMC meeting this week forced the market to adjust to the idea that the Fed could continue to take rates higher than had previously been priced. But clearly, to drive tightening expectations higher still, we’ll need to continue to see hotter than expected US data, with today’s US jobs report the next test on that. Elsewhere, sterling is in a world of hurt after BoE’s very dovish guidance. FX Trading focus: US incoming data focus after hawkish FOMC. BoE in dovish pushback against market hike expectations. The US dollar followed through stronger yesterday on the momentum off the back of the hawkish Powell presser Wednesday, but has come in for a chunky reversal overnight and today since a somewhat softer than expected ISM services survey yesterday (nudged lower to 54.4 vs. 55.3 expected and 56.7 in September, with the employment sub-index dipping back below 50 at 49.1 vs. 53.0 in September). Wouldn’t it be ironic if we also were to get a soft US jobs report today that takes US yields back to their starting point of the week, making Powell’s hawkish message so much noise, at least until the next incoming data point jerks the market the other way? Interestingly, the USD is selling off ahead of today’s US data releases even as short US yields are posting new highs for the cycle Specifically in today’s jobs report, in addition to any strong directional surprise in payrolls (multi-month grain of salt needed with this data series, as single releases require further corroborating evidence), we should keep both eyes on the average hourly earnings survey. Arguably, if we get the expected 0.3% month-to-month average hourly earnings print today after a couple of prior prints of a similar size, observers may begin to judge that the annualized rise in earnings is beginning to look far less threatening at sub-4.0%. The year-on-year is expected to drop to a 15-month low of 4.7% today. A significant upside surprise in earnings is perhaps could generate significant volatility. Chart: EURGBPWorth considering how the dovish Bank of England meeting yesterday (see more below) is weighing heavily on sterling, as it should, with the Bank of England reluctant to signal much tightening energy when it sees an incoming recession. Sterling is down sharply across the board, with EURGBP suddenly well backed up within the old range and now far away from the sub-0.8600 range support. The next area between the 0.8800 and pivot high of 0.8870 area looks key for whether sterling weakness is set to become a bit more unhinged, and the next key event-risk test is likely how the market greets an austere Autumn budget statement on November 17. Bank of England wrap. The BoE hiked by 75 bps to 3%, as most expected and as was mostly priced in, but Bailey and company strongly pushed back against expectations for the scale of future moves, saying that the terminal rate priced in currently by the markets would induce a two-year recession. There were also two dovish dissenters at the meeting, one calling for 50 bps rate hike and another for a mere 25 bps. New forecasts were also released, which gave a particularly grim outlook for the economy, looking for a GDP print of -0.5% QoQ in Q3 2022 vs -0.1% expected in September. The inflation forecast now shows a peak around 11% in Q4, which is marginally hotter than the prior meeting’s projection. Sterling was crushed lower, having already fallen heading into the meeting, and it speaks volumes that even though the BoE pushed back against the forward implied expectations for further tightening, which it said would trigger a 2-year UK recession, the market did not budge those expectations. In short: the market refuses to acknowledge what the BoE thinks it might do, probably figuring that the BoE will have no choice due to sterling weakness but to pursue the path to 4.50% or higher rates before mid-next year. I was surprised by the lack of discussion or journalist questioning in the press conference around the risk that currency weakness drives worse inflationary outcomes if the BoE fails to do as much as the market is pricing. Sterling remains in a heap of trouble. Table: FX Board of G10 and CNH trend evolution and strength.The USD needs to stick the move off the back of the FOMC meeting after the US jobs data today, otherwise we’ll suddenly be back to square one. The hottest movement in FX was clearly the sterling sell-off yesterday on a very clearly dovish Bank of England meeting. CNH is making waves on a lot of movement overnight and noise (unconfirmed) of an eventual opening up. Table: FX Board Trend Scoreboard for individual pairs.While the US dollar flipped to a positive trend in many places, we must still consider the risk that incoming data complicates the plot. GBP is already registering a negative trend in many new GBP pairs after yesterday’s BoE meeting. Interesting that the NOK failed to roll over to the downside in a couple of key pairs after the small hike from the Norges Bank yesterday. Upcoming Economic Calendar Highlights 1215 – UK Bank of England Chief Economist Huw Pill to speak 1230 – US Oct. Nonfarm Payrolls Change 1230 – US Oct. Unemployment Rate 1230 – US Oct. Average Hourly Earnings 1230 - Canada Oct. Unemployment Change/Rate 1400 – Canada Oct. Ivey PMI 1400 – US Fed’s Collins (Voter 2022) to speak Source: https://www.home.saxo/content/articles/forex/fx-update-us-incoming-data-sterling-pays-price-after-dovish-boe-04112022
The EUR/USD Pair: There Are Still No Sell Signals

The ECB Has Little Choice But To Deliver An Oversize Rate Hike

Kenny Fisher Kenny Fisher 04.11.2022 14:02
EUR/USD has rebounded and is in positive territory. In the European session, the euro is trading at 0.9794, up 0.45%. The upswing has ended a 3-day slide, in which the euro fell as much as 270 points. German factory orders sink The manufacturing sector in the eurozone continues to struggle. German and eurozone manufacturing PMIs are mired in contraction territory and German Factory Orders for September, published today, declined by a sharp 4.0%. A weak global economy has dampened manufacturing activity, and the war in Ukraine and the energy crisis in Western Europe will likely continue to take a toll on the eurozone economy. The grim economic outlook is a major headache for ECB policymakers, who must maneuver delicately between soaring inflation and a weak eurozone economy. The ECB joined the rate-hiking dance late and finds itself well behind the inflation curve, as headline inflation in the eurozone jumped to a staggering 10.7% in October, up from 9.9% in September. The ECB has little choice but to deliver an oversize rate hike in order to tackle double-digit inflation, and ECB President Lagarde has said that she would use “all the tools” available to bring inflation back to the ECB’s 2% target. All eyes are on today’s US nonfarm payroll report. The labour market has been resilient in the face of steep rate hikes, although we are seeing a jump in job cuts. The consensus for the October NFP stands at 200,000, lower than the September reading of 263,000. The release will be carefully watched by the Fed, as the strength of the labor market is an important factor in the December rate decision. The markets have priced in a 50/50 toss-up between a hike of 0.50% or 0.75%, which could translate into volatility for the US dollar in today’s North American session.   EUR/USD Technical EUR/USD is putting pressure on resistance at 0.9818. Next, there is resistance at 0.9956 0.9669 and 0.9531 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

OANDA Senior Market Analyst Craig Erlam Talks Recent Important Market Events

Craig Erlam Craig Erlam 04.11.2022 14:10
OANDA Senior Market Analyst Craig Erlam discusses the latest developments in GBP/USD as the Federal Reserve and Bank of England hike interest rates by 0.75%. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Softer New Jobs Reading Would Likely Weigh On The Canadian Dollar

Any Misses In The Forecasts For The Job Reports Could Make Volatility From The USD/CAD Pair

Kenny Fisher Kenny Fisher 04.11.2022 14:21
The Canadian dollar is usually quiet before North American markets open, but it is sharply higher today. USD/CAD is trading at 1.3644 in Europe, down 0.73%. US nonfarm payrolls expected to slow The week wraps up with the October employment reports from the US and Canada. The highlight will be the US nonfarm payrolls report, which, although still a key event, has been somewhat overshadowed by Fed rate meetings and inflation releases. Still, the release will be carefully watched by Fed policymakers and it will be a factor in the December rate decision. The October consensus stands at 200,000, lower than the September reading of 263,000. With the markets split 50/50 on whether the Fed will raise rates by 0.50% or 0.75%, the NFP release could provide some volatility in the currency markets in the North American session. A stronger-than-expected reading would raise the likelihood of a 0.75% hike and would likely boost the dollar. Conversely, a soft reading would reinforce expectations of the Fed easing to 0.50%, which would be bearish for the dollar. Canada is expected to post lukewarm job data for October. The unemployment rate is forecast to tick up to 5.3% from 5.2%, with a consensus of 10,000 new jobs, down from 21,100 new jobs in September. Any misses in the forecasts for the Canadian and US job reports could trigger volatility from USD/CAD in the North American session. The Fed raised rates by 0.75% at this week’s meeting, as expected, but there was a double message for the markets. The rate statement was dovish, stating that the Fed might take a pause in order to see how the rate hikes were working. However, Fed Chair Powell was hawkish in his post-meeting comments, saying that there was no sign that inflation had peaked and that it was “very premature to talk about pausing rate hikes”. The unexpected hawkish tone sent equities lower and boosted the US dollar.   USD/CAD Technical USD/CAD is putting strong pressure on support at 1.3656. Below, there is support at 1.3478 1.3757 and 1.3901 are the next lines of resistance This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

Geopolitical Backgrounds Do Not Favor The Euro Currency (EUR)

InstaForex Analysis InstaForex Analysis 06.11.2022 09:20
Long-term perspective. The EUR/USD currency pair has not gained or lost a single point during the current week. Although the euro did nothing but fall during the first four days, it managed to recover all the losses on Friday. We think the pair's movement this week has been strange, and here's why. The Fed meeting was scheduled for Wednesday evening as the most significant event of the week. Why was the dollar strengthening up until this time? It is because the Fed rate was supposed to rise for the fourth time in a row by 0.75%, so the market worked out the tightening in advance. However, after the Fed raised the rate, the market continued to buy dollars, although we expected a backlash, as it had a week earlier with the ECB meeting. However, Jerome Powell's rhetoric turned out to be a little more "hawkish" than expected, so the market continued to sell the pair on Thursday. But on Friday, the US currency collapsed when the most important statistics on the labor market and unemployment were published in the States. And this is even stranger than its growth on Thursday. The Nonfarm report turned out to be quite strong. In October, 261 thousand of new jobs were created outside the agricultural sector, which is at least 20 thousand more than predicted. Once again, the US labor market showed its excellent condition, and the dollar had to continue to grow. In addition, the September report's value was revised upward to 315 thousand. The only negative moment was the unemployment rate, which rose to 3.7%. However, the unemployment rate had already increased to this level a couple of months ago and then returned to 3.5%. And in any case, unemployment in the United States remains at the lowest level in half a century, so if this report provoked a fall in the dollar with an excellent value of Nonfarm, then this is a very strange reaction of the market. The pair on the 24-hour TF has grown back to the Senkou Span B line and will try to overcome it again next week. There are certain chances of an upward trend, but they are still small. On Monday and Tuesday, the market may realize the illogical reaction on Friday and start selling the pair again. COT analysis. COT reports on the euro currency in 2022 are becoming more and more interesting. Half of the year, they showed a frank "bullish" mood among professional players, but at the same time, the European currency was steadily falling. Then they showed a "bearish" mood for several months, and the euro also steadily fell. The net position of non-profit traders is bullish again and is strengthening, and the euro has barely moved away from its 20-year lows by 500 points. This is happening because the demand for the US dollar remains very high against the backdrop of a difficult geopolitical situation. Therefore, even if the demand for the euro currency grows, the high demand for the dollar does not allow it to grow. During the reporting week, the number of buy-contracts from the non-commercial group increased by 13 thousand, and the number of shorts decreased by 17 thousand. Accordingly, the net position increased by about 30 thousand contracts. However, this fact does not matter much since the euro remains "at the bottom" anyway. The second indicator in the illustration above shows that the net position is now quite high. Still, a little higher, there is a chart of the pair's movement, and we can see that the euro cannot benefit from this seemingly bullish factor. The number of buy contracts is higher than that of sell contracts for non-commercial traders by 106 thousand, but the euro is still trading very low. Thus, the net position of the "non-commercial" group can continue to grow, and it does not change anything. If you look at the general indicators of open longs and shorts for all categories of traders, then sales are 23 thousand more (617k vs. 594k). Analysis of fundamental events. This week, all the main data came from overseas, but there was also something to pay attention to in the European Union. On Monday, it became known that the GDP grew by 0.2% in the third quarter, which was generally in line with forecasts, and that inflation rose to 10.7%, forcing the ECB to continue to adhere to the plan to tighten monetary policy. However, this did not save the euro currency from a new fall. Only a strange movement on Friday allowed it not to finish another week in the red. Also, in the European Union, business activity indices were published this week, which are forecast to remain below 50.0. Trading plan for the week of November 7–11: 1) On the 24-hour timeframe, the pair rose again to the Senkou Span B line, but now, to continue growing, this line needs to be overcome. In this case, we will seriously consider forming a new uptrend and recommend small purchases of the pair with a target of 1.0177. However, it should be remembered that the fundamental and geopolitical backgrounds do not favor the euro currency. 2) As for the sales of the euro/dollar pair, they have now become temporarily irrelevant since the price has overcome the critical line and increased to Senkou Span B. Thus, a rebound from Senkou Span B will mean a possible resumption of the downward trend. Fixing below the critical line will mean the resumption of the downtrend. We believe it is still too early to speak confidently about the end of the downward trend that has been forming for two years. Explanations of the illustrations: Price levels of support and resistance (resistance and support), Fibonacci levels – targets when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger Bands (standard settings), MACD (5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "non-commercial" group.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326322
Unraveling UK Inflation: The Bank of England's Next Move

Inflation Continues To Grow Steadily In The United Kingdom (UK)

InstaForex Analysis InstaForex Analysis 06.11.2022 09:27
Long-term perspective. The GBP/USD currency pair has fallen by 250 points during the current week. If we talk about a purely technical picture, such a movement was logical since traders once again failed to overcome the Ichimoku cloud on the 24-hour TF. Nevertheless, considering the fundamental background, the movement can be recognized as strange and illogical. As we have already said, the pair's fall until Wednesday evening is justified. The Fed had to raise the key rate, and the market worked out this increase in advance. However, the dollar continued to rise on Wednesday evening and Thursday morning. It continued to strengthen on Thursday afternoon when the Bank of England announced the results of its meeting and raised the rate for the eighth time in a row by a record value over the past 13 years – 0.75%. And this is already very strange because it turns out that it does not matter what actions the British regulator takes – the market still buys the dollar. However, the market diligently ignored the previous seven rate increases, which was also not entirely logical. But on Friday, when strong labor market statistics were published in the US, the US dollar was already falling. It seems that the market lost touch with reality on Wednesday evening, traded in the wrong direction, and on Thursday and Friday, just tried to correct this "mistake." Therefore, we have also seen movements that do not fit with the nature of the fundamental and macroeconomic background. At the end of the week, the pair managed to gain a foothold a little above the Ichimoku cloud, but this is still not the consolidation that would allow the British pound to look optimistically into the future. The "bullish" mood in the market persists, but too often, the pound rolls back down, growing with great difficulty. The long-term downward trend may still resume. COT analysis. The latest COT report on the British pound showed a slight weakening of the "bearish" mood. During the week, the Non-commercial group closed 8.5 thousand buy contracts and 11.5 thousand sell contracts. Thus, the net position of non-profit traders increased by 3 thousand, which is very small for the pound. The net position indicator has been gradually growing in recent weeks, but this is not the first time it has been growing. The mood of major players remains "pronounced bearish," and the pound sterling maintains a downward trend in the medium term. And, if we recall the situation with the euro currency, there are big doubts that, based on COT reports, we can expect a strong pair growth. How can you count on it if the market buys the dollar more than the pound? The Non-commercial group has opened 79 thousand sales contracts and 34 thousand purchase contracts. The difference, as we can see, is still very big. The euro cannot show growth in the "bullish" mood of major players, and the pound will suddenly be able to grow in a "bearish" mood. As for the total number of open buy and sell, the bulls have an advantage of 21 thousand. But, as we can see, this indicator also does not help the pound much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of fundamental events. Only business activity indices were published in the UK during the current week. All the most significant indices (for the service sector, the manufacturing sector, and composite) expectedly continued to fall and remain below 50.0. Only IDA for the construction sector has grown. Business activity indices were also published in the States, and the most important ISM for the service sector fell to 50.2 in October. The ISM index for the manufacturing sector has also declined, but it is relatively safe at 54.4. However, who is surprised by the drop in business activity now? All three economies are racing toward recession at full speed, and the question now can only be posed as follows: how strong will each recession be? As you can see, inflation continues to grow steadily in the EU and the UK, and in the US, at a rate of 4%, it is not in a hurry to fall much. All this suggests that all three central banks will continue to raise rates and do everything to extinguish inflation. And this, in turn, will harm economic growth. Trading plan for the week of November 7-11: 1) The pound/dollar pair as a whole maintains a long-term downward trend but is located above the critical line. Therefore, small purchases can now be considered if the Senkou Span B line is confidently overcome, with targets of 1.1764 and 1.2064. There are some reasons for the growth of the British currency, but there are still many reasons for the resumption of the fall. Be careful with your purchases. 2) The pound sterling has made a significant step forward but remains in a position where it is difficult to wait for strong growth. If the price fixes below the Kijun-sen line, the pair's fall can quickly and cheerfully resume with targets in the area of 1.0632 – 1.0357. Explanations of the illustrations: Price levels of support and resistance (resistance /support), Fibonacci levels – targets when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger Bands (standard settings), MACD (5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "Non-commercial" group.         Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326324
The Upside Of The EUR/USD Pair Remains Limited

Summary Of Situation Of The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 06.11.2022 09:31
Review : The EUR/USD pair has faced strong resistances at the levels of 1.0009 because support had become resistance. So, the strong resistance has been already formed at the level of 1.0009 and the pair is likely to try to approach it in order to test it again. The bullish trend is currently very strong on the EUR/USD pair. As long as the price remains above the support levels of 0.9946, you could try to benefit from the growth. The hourly chart is currently still bearish. At the same time, some stabilization tendencies are visible between 1 USD and 0.9854. However, if the pair fails to pass through the level of 1.0009, the market will indicate a bearish opportunity below the new strong resistance level of 1.0009 (the level of 1.0009 coincides with a ratio of 78% Fibonacci). Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength above the moving average (100) and (50). The market is indicating a bearish opportunity below 1.0009, for that it will be good to sell at 1.0009 with the first target of 0.9946. It will also call for a downtrend in order to continue towards 0.9900. The daily strong support is seen at 0.9854. However, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1.0094. As a rule, the market is highly volatile if the previous day has huge volatility. But if the last week range was very large, then next week range will be probably moved between the weekly pivot point and resistance 1 or support 1. Please check out the market volatility before investing, because the sight price may have already been reached and scenarios might have become invalidated. The basic trend of EUR/USD pair is neutral, and the short term is tentatively bearish. With such a pattern, it is difficult to favour buying or selling. The first support is located at 0.9706. The first resistance is located at the level of 0.9798. However, the probabilities of moving towards the first support before the first resistance are slightly higher. Without a basic trend, it is important to monitor the price response at these levels. A bearish break in the support or a bullish break in the resistance could provide a signal that would set the new direction of the basic trend. On the other hand, if the price is blocked by support or resistance, it could be attractive to trade against the trend on the last short-term movement recorded by EUR/USD pair. Technical indicators are bearish in the very shrot term and could soon allow change to a bearish sentiment. Bearish range between the levels of 0.9600 and 0.9854. The EUR/USD pair faced resistance at the level of 0.9854, while minor resistance is seen at 0.9798. Support is found at the levels of 0.9706, 0.9633 and 0.9600. Also, it should be noted that a daily pivot point has already set at the level of 1.1836. Equally important, the EUR/USD pair is still moving around the key level at 0.9854, which represents a daily pivot in the H1 time frame at the moment. The EUR/USD pair continues to move downwards from the areas of 0.9900 and 0.9854. Yesterday, the pair dropped from the level of 0.9900 which coincides with a ratio of 50% Fibonacci on the H1 chart to 0.9753. Today, resistance is seen at the levels of 0.9854 and 0.9900. So, we expect the price to set below the strong resistance at the levels of 0.9900 and 0.9854; because the price is in a bearish channel now. The RSI starts signaling a downward trend. Consequently, the market is likely to show signs of a bearish trend. Thus, it will be good to sell below the levels of 0.9900 or/and 0.9854. Amid the previous events, the price is still moving between the levels of 0.9854 and 0.9600 in coming hours. Always, we use the time frame of H1 to determine the lower and the higher price of yesterday, because it is more precise. Moreover, we use the hourly time frame with a view to determine the lower and the higher price of last week. In overall, we still prefer the bearish scenario as long as the price is below the level of 0.9854. Furthermore, if the EUR/USD pair is able to break out the bottom at 0.9706, the market will decline further to 0.9633 (daily support 2). The price will fall into a bearish trend in order to go further towards the strong support at 0.9600 to test it again. The level of 0.9600 will form a new double bottom. Conclusion: The EUR/USD pair increased within a downtrend channel from the prices of 1.0009 and 0.9804 since a week. The bulls must break through 1.0009 in order to resume the uptrend. The trend is still bearish as long as the price of 1.0009 is not broken. Thereupon, it would be wise to sell below the price of at 1.0009 with the primary target at 0.9954. Then, the EUR/USD pair will continue towards the second target at 0.9900. We should see the pair will fall towards the next target of 0.9854. The pair will move downwards continuing the development of the bearish trend to the level 0.9804 in coming days.   Relevance up to 11:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299810
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The US Dollar (USD) Suffered A Drop In Favor Of The GBP/USD Pair

InstaForex Analysis InstaForex Analysis 07.11.2022 08:00
Early in the Asian session, the British pound (GBP/USD) is trading around 1.1325 below the 200 EMA and 21 SMA. We can note that the pair opened with a bearish gap of 67 pips at 1.1303. The pair is expected to cover this GAP in the next few hours. On Friday of last week, the British pound reached the 200 EMA (1.1365) followed by the high at 1.1381. This happened after the price had touched the bottom of the downtrend channel at 1.1143. In the next few hours, the bearish British pound is expected to reach 2/8 Murray located at 1.1230 on the condition it settles below 1.1365. The US dollar suffered a drop in favor of GBP/USD. Positive data was released on Friday. USD remains on the defensive despite the fact that the US economy created more jobs than expected in October (261,000), while the unemployment rate rose to 3.7%. According to the technical analysis, a daily close above 1.1365 -1.1380 will be a clear signal to buy with targets at 1.1474 and at the psychological level of 1.15, which coincides with the top of the bearish channel. The key level for the next few hours is to watch the area of 1.1365. Below, we will continue to sell, because the pair will be under downward pressure and could fall to 1.1150. According to the 4-hour chart, the British pound is trading within a downtrend channel. A daily close above 1.15 will be the start of a bullish cycle and the price could reach 4/8 Murray at 1.1718 and even to the psychological level of 1.20. The eagle indicator is giving a negative signal and approaching the oversold zone. So, we could expect a pullback in the pound and it could find strong support that will give it a technical rebound around the 1.1230 zone to resume the bullish cycle again. Our trading plan for the next few hours is to sell GBP/USD below 1.1381 and below 1.1365 (200 EMA) with targets at 1.1300 and 1.1230(2/8 Murray).     Relevance up to 03:00 2022-11-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299834
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

The Situation Of The USD/JPY Pair Favors A Further Decline

InstaForex Analysis InstaForex Analysis 07.11.2022 08:02
The USD/JPY pair is still developing according to our main scenario - it is declining. Friday's decline was 160 points towards the first and strong support at 145.45, determined by the embedded price channel line and MACD's indicator line of the daily chart. Today opened with a rising gap, which, if it closes later, will give the price additional technical conditions for further decline. Settling below 145.45 will open the way for the price to support 141.65. An alternative scenario suggests settling above 147.63 and rising to 150.10. On the four-hour chart, the price is developing below the balance lines (red) and the MACD line (blue), the Marlin Oscillator is in the downtrend zone. The situation favors a further decline. Target at 145.45. On this chart, the MACD line (148.00) is above the level of 147.63. Therefore, in order to develop the upward movement, it will not be enough for the price to overcome 147.63, it is also necessary to settle above the MACD line. In the previous two cases (marked with arrows on the chart), this line turned out to be an insurmountable resistance for the price.   Relevance up to 03:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326350
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The GBP/USD Pair Price Will Even Reach The Resistance

InstaForex Analysis InstaForex Analysis 07.11.2022 08:05
The pound showed good growth on Friday, having won back Thursday's fall. Monday opened with a downward gap – the price decided to take a break on the MACD line of the daily scale. Most likely the gap will be closed. It is possible that the price will even reach the resistance at 1.1500, but after that, our main scenario requires the price to reverse and return to the support of 1.1170. If the price manages to settle above 1.1500, then it may continue to rise to the next resistance at 1.1760. The Marlin Oscillator returned to the positive area on the daily chart, which increases the probability of at least a short-term growth (1.1500). On a four-hour chart, the signal line of the Marlin Oscillator is slightly turning down from the zero neutral line, which can provoke a slight price decrease before further local growt     Relevance up to 03:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326352
The Euro May Attempt To Resume An Upward Movement

EUR/USD: Downward Movement In The Current Situation Is Limited

InstaForex Analysis InstaForex Analysis 07.11.2022 08:08
US employment data came out strong on Friday, but markets appear to have tipped the risk side at the wrong time, confused about the Federal Reserve's next move. The market managed to set the probability of a 0.50% hike at the December meeting as 61.5% (from the previous 47.2%), but investors lost sight of the inflation factor, exactly what the Fed is fighting against. Inflation promises to rise even faster as the EU plans to ban purchases of Russian oil, and the G7 countries and Australia have decided to set a price ceiling for Russian oil. Oil (#CL) jumped 5.26%. Therefore, a number of economists believe another rate hike of 0.75%, or a protracted series of 0.50%. The euro rose by 211 points on Friday, but over the weekend investors rethought the current situation and Monday opened with a falling gap. But it is desirable to close the gap, so the euro can still grow, up to the upper limit of the price channel of the daily chart, to the area of 1.0025. Downward movement in the current situation is limited by support at 0.9864. Now, even from the technical side, the uncertainty of the market is visible. This uncertainty for the bears will end with the price's movement below the MACD line (0.9825). For bulls, the situation is more complicated. The exit of the price from the descending price channel does not promise to keep the upward trend, as this exit can easily turn out to be false. In this case, the resistance levels are 1.0051, 1.0100 and above. On the H4 chart, the price decides the issue with the MACD line - whether it should overcome this line and the level of 0.9950 with it, or ease the pressure for a small rollback and subsequent growth in order to close the window. We are watching.     Relevance up to 03:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326354
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

The EUR/USD Pair Will Try To Resume The Upward Direction

InstaForex Analysis InstaForex Analysis 07.11.2022 08:20
Analysis of EUR/USD, 5-minute chart Last Friday, the euro/dollar pair soared up unexpectedly for many. Naturally, such a powerful movement could not take place from scratch, it began after the release of macroeconomic statistics in the US, in particular, reports on unemployment and Nonfarm. We have already said in previous articles that both of these reports in aggregate cannot be regarded as negative for the dollar. And even more so, it was impossible to expect the dollar to fall by 200 points, when the number of Nonfarm exceeded all the most optimistic forecasts. However, we have what we have. The pair rose by 200 points and completely confused the technical picture. Last week, it mostly fell and there were reasons for this, but now it is very difficult to say what will happen next. After Friday's upward spurt, a downward correction is needed. The market reaction to Friday's events was illogical. The ascending trend line has been overcome, but now the quotes are already above it. The Senkou Span B line on the 24-hour timeframe has not been overcome, but the price will try to surpass it again. In general, the most confusing situation. Unfortunately, on Friday it was not possible to catch the upward movement from the very beginning. On the other hand, it started at the time when the US reports were released, and at that time it was clearly not recommended to open any positions. Therefore, the first trading signal was formed only in the area of 0.9844-0.9852, and it should have been worked out with a long position. The price quickly returned to the indicated area, but on the second attempt it continued to grow and almost reached the level of 0.9945. It was possible to close the position manually in the late afternoon, or it was possible by a signal near the Senkou Span B (second) line. In any case, there was profit worth around 50 points. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000). Analysis of EUR/USD, 1-hour chart You can see that the pair will try to resume the upward direction on the one-hour chart, but what will come of it? We have already noted that the market traded illogically on Thursday and Friday, so we can see a downward movement on Monday-Tuesday. Moreover, there will be no statistics and events these days. On Monday, the pair may trade at the following levels: 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, as well as the Senkou Span B (0.9900) and Kijun-sen lines (0.9852). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events and reports are expected in the US and the EU for today, so traders will have to go "bare" or go on the events of last week, which may still not be fully worked out. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 01:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326342
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

Cable Market (GBP/USD): Is Very Difficult To Say Which Trend It Is In At All

InstaForex Analysis InstaForex Analysis 07.11.2022 08:25
Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair rose sharply on Friday. From our point of view, such growth is most suitable for the definition of "correction". The pound has been falling against the dollar for a couple of weeks. Sometimes it is quite logical, sometimes groundless, but one way or another correction was required. And it happened on Friday. It happened when few people were expecting it, since the US statistics, in our humble opinion, were neither weak nor a failure. That is, the dollar fell when it should have continued to grow. On the other hand, on Thursday, when the Bank of England raised its rate by 0.75%, the pound fell when it should have risen. In general, absolute illogicality, which can persist for several more days. In principle, there is nothing more to talk about Friday's statistics, a lot has already been said about it. As for the movements and trading signals, everything was not easy here. It was absolutely flat during the European trading session, but this flat was quite difficult to recognize at first. Traders may have entered one or two trades on signals around the 1.1212 level that turned out to be false and unprofitable. At the US trading session, a strong signal to buy was already formed after the release of statistics on the labor market and unemployment. But in this case, it would be much more logical to expect the pair's fall, rather than its growth. In general, the situation was difficult. Traders could open longs only in hopes of completing the flat and increasing volatility. If they did this, they covered the morning losses and remained in profit. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group closed 8,500 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position indicator has been slowly rising in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The Non-commercial group has now opened a total of 79,000 shorts and 34,000 longs. The difference, as we can see, is still very big. The euro cannot rise even though major players are bullish, and the pound will suddenly be able to grow in a bearish mood? As for the total number of open longs and shorts, here the bulls have an advantage of 21,000. But, as we can see, this indicator also does not help the pound too much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair shows such movements on the one-hour chart that it is very difficult to say which trend it is in at all. At first, there was a landslide fall with consolidation below the key lines of the Ichimoku indicator, as well as the trend line. Now the pair has returned to the Kijun-sen and Senkou Span B lines and it is unclear whether it will bounce off them or overcome them? In general, there are clearly more questions than answers. On Monday, the pair may trade at the following levels: 1.0930, 1.1060, 1.1212, 1.1354, 1.1486, 1.1645. Senkou Span B(1.1351) and Kijun-sen (1.1364) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. There are no important events scheduled for Monday in the UK and the US, but the market can trade very volatile, continuing to work out the events and reports of the past week. Not all of them were worked out logically. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.         Relevance up to 01:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326344
The USD/JPY Price Seems To Be Optimistic

Technical Analysis Of The USD/JPY Pair Movement By Petar Jacimovic

InstaForex Analysis InstaForex Analysis 07.11.2022 08:51
Technical analysis: USD/JPY has been trading sideways at the price of 147.45. I see potential for the breakout play. Trading recommendation: Due to the range condition, watch for potential breakout of the trading range to confirm further direction. In case of the upside breakout of the resistance at 148.80, watch for buying opportunities with the upside objective at 151.85. In case of the downside breakout of the support at 145.65, watch for selling opportunities with the downside objective at 141.85     Relevance up to 08:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299866
China's Position On The Russo-Ukrainian War Confirmed At The G20 Meeting

China Will Maintain Its Zero-Covid Policy | US Dollar (USD) Back Into Gains

Saxo Bank Saxo Bank 07.11.2022 08:58
Summary:  Speculation about China relaxing its stringent dynamic zero-Covid policy stirred up risk-on trades on global equities and commodities on Friday. Hong Kong’s Hang Seng Index surged 5.4% and China’s CSI 300 rose 3.3%. A mixed job report brought about a choppy session in the U.S. and stocks managed to finish the day higher as materials and industrials rallied in the afternoon when Investors turned their focus to the China reopening notion and strength in commodities. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rebounded on Friday but were still down for the week Following a mixed job report, the U.S. equity markets had a choppy session on Friday, fluctuating between gains and losses, and finished the day higher. S&P500 gained 1.4% and Nasdaq 100 climbed 1.6%. For the week, however, S&P 500 was down 3.4% and Nasdaq 100 was 5.7% lower. All 11 sectors of the S&P 500 gained on Friday, with materials having done the best and up 3.4%. Software names underperformed on earnings and revenue misses. US  treasury (TLT:xnas, IEF:xnas, SHY:xnas) yields were largely steady after the job report U.S. treasury yields surged initially on the stronger-than-expected non-farm payroll gain of 261K jobs in the establishment survey but pared the rise after the market focus shifted to the higher unemployment rate of 3.7% and a decline of 328K in employment in the household survey. The yield curve turned steeper notably, with the 2-year yield down 6bps to 4.66%, the 10-year yield up 1bp to 4.16%, and the 30-year yield jumping 7bps to 4.25%. The market is pricing in a 65% chance of a 50bp hike at the December FOMC and a terminal Fed Fund rate at around 5.1% next year. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) rallied dramatically on reopening hope Stocks in Hong Kong and the mainland surged on intensification of speculation on relaxation (not abandoning but relaxing) of the dynamic zero-Covid policy, newswire stories reporting that the U.S. Public Company Accounting Oversight Board (PCAOB) has completed the first round of inspection on Chinese ADR ahead of schedule, and an article from Vice-Premier Liu He on the People’s Daily pledging to boost domestic aggregate demand.  Hang Seng Index jumped 5.4% and CSI300 surged 3.3%. Hang Seng China Enterprise Index surged 6% and China Internet stocks climbed 10% to 17%, with Alibaba (09988:xhkg) up 11%, and Tencent (00700:hkxg) up 7.8%. FX: USD gains return as China asserts commitment to Zero Covid FX: USD gains return as China asserts commitment to Zero Covid With plenty of chatter last week about China’s reopening, commodity currencies had been supported with NZD leading the gains against the USD and being up over 2%. AUDUSD also surged above 0.6450 into the end of the week on hopes of a recovery in commodities demand. However, weekend reports from China’s Health Ministry confirmed that China will maintain its present zero-Covid regulations but improve the pandemic control measures, hinting that protracted lockdowns will be avoided. This has sent dollar back into gains this morning, with AUD and NZD leading the declines. GBPUSD also slid back to 1.1300 and EURUSD back at the 0.99 handle. Commodities rally Commodity screens all in the green on the back China reopening hopes. The Crude Oil (CLX2 & LCOZ2) price rose 5% to $92.61, its highest level since August after rising 5.4% last week. Iron Ore (SCOA, SCOZ2) is up 1.6% today $87.30 after gaining 8.3% last week. The Copper price (HGA, HGZ2) rose 7.8% today, after rising 7.5% last week.   What to consider Mixed US jobs report to keep the Fed on a tightening path US NFP headline gains of 261k were above expectations of 200k but slowed from last month’s 315k which was revised higher from 263k. Job gains were broad-based with strong gains in healthcare, professional and business services and manufacturing. Wage growth also held up strongly, coming in at 0.4% MoM in October from 0.3% MoM previously although a tad softer on a YoY basis at 4.7% from 5.0% YoY previously. However, the unemployment rate ticked up to 3.7% from 3.5% (exp. 3.6%), although it was met with a 0.1% decline in the participation rate to 62.2%. However, with layoffs rising recently, especially in tech, it will be interesting to see how that impacts the headline NFP and the Fed tightening path in the months to come. Heightened anticipation of relaxation of the implementation of pandemic control in China Speaking at a meeting hosted by a U.S. investment bank last Friday, the former Chief Expert of Epidemiology of the Chinese Centre for Disease Control and Prevention said the relaxation of pandemic control had already started and more would come, citing the resumption of state visits, sports events (e.g. the Beijing Marathon this Sunday), and relaxing PCR test requirements and starting to charge for the tests. At a press conference last Saturday, China’s National Administration of Disease Control and Prevention reiterated adherence to the dynamic zero-Covid policy. This may dampen somewhat investors’ optimism about reopening. Nonetheless, the Chinese health officials pledged at the same press conference to improve the implementation of the pandemic control measures so as to avoid massive and protracted lockdowns. China’s approval of BioNTech vaccine for foreigners living in mainland China also stirred up some anticipation of the possibility of allowing the more effective BioNTech vaccine to be available eventually beyond foreign residents. Stocks of interest to watch First up this week, Champion Iron (CIA) goes ex-dividend today, along with Macquarie (MGQ). National Australia Bank (NAB) is due to report results on Wednesday 9th. Mosaic (MOS) a fertilizer giant reports on Monday in the US. Walt Disney (DIS) reports 9th November. On with Occidental Petroleum (OXY) and Constellation Energy (CEG) report as well. Note Oxy and CEG are some of the US' best performers this year). Ralph Lauren (RL) reports on Thursday.    For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/market-insights-today-7-nov-07112022
The Downside For The AUD/USD Pair Is Likely To Remain Cushioned

The Aussie Pair (AUD/USD) Is Expected Downside Movement

TeleTrade Comments TeleTrade Comments 07.11.2022 09:21
AUDUSD licks its wounds after a downbeat start to the week. Oscillators suggest further downside, weekly resistance line challenge buyers. Fortnight-old horizontal support region restrict short-term AUDUSD downside. Buyers need validation from October’s peak to retake control. AUDUSD remains defensive around 0.6430 after reversing from the 200-HMA support heading into Monday’s European session. Even so, the Aussie pair remains below a weekly resistance line amid bearish MACD and RSI signals. As a result, the quote is likely to witness further downside, which in turn highlights the 200-HMA support near 0.6410. Following that, the 50% and 61.8% Fibonacci retracement levels of the AUDUSD pair’s October 21-27 advances, respectively near 0.6370 and 0.6330, could probe the downside moves. In a case where the AUDUSD prices remain weak past 0.6330, a two-week-old horizontal support zone near 0.6270 will be crucial for sellers to watch as a downside break of the same could probe the yearly low surrounding 0.6170. Meanwhile, recovery moves need a successful break of the aforementioned weekly resistance line, close to 0.6475 at the latest. Even if the AUDUSD price remains firmer past 0.6475, the pair buyers may wait for a clear upside break of the previous monthly top surrounding 0.6550 to please the buyers. That said, the 0.6500 round figure may offer an intermediate halt during the run-up. AUDUSD: Hourly chart Trend: Further downside expected
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

There Could Be A Headwind For The NZD/USD Pair

TeleTrade Comments TeleTrade Comments 07.11.2022 09:34
NZDUSD opens with a modest weekly bearish gap amid the emergence of some USD buying. Elevated US bond yields and a weaker risk tone help revive demand for the safe-haven buck. Bulls might wait for a sustained move beyond the 0.5935-0.5940 area before placing fresh bets. The NZDUSD pair attracts some buying following a modest bearish gap opening to the 0.5855-0.5850 area on Monday, albeit struggles to capitalize on the move. Spot prices retreat a few pips from the daily top and remain on the defensive below the 0.5900 mark through the early European session amid a modest US Dollar strength. A combination of supporting factors assists the USD to regain some positive traction on the first day of a new week and recover a part of Friday's post-NFP slump. In fact, the mixed results from the closely-watched US monthly jobs report fueled speculations that the Federal Reserve could slow the pace of future rate hikes and weighed heavily on the greenback. That said, elevated US Treasury bond yields, along with a softer tone, helps limit any further losses for the safe-haven buck and act as a headwind for the NZDUSD pair. The market sentiment remains fragile amid concerns about headwinds stemming from China's commitment to maintaining its economically disruptive zero-COVID policy. This comes amid the protracted Russia-Ukraine war and adds to growing worries about a deeper global economic downturn. Even from a technical perspective, the emergence of fresh selling ahead of the mid-0.5900s warrants caution for bullish traders. Hence, it will be prudent to wait for strong follow-through buying before positioning for any meaningful upside for the NZDUSD pair. There isn't any major market-moving economic data due for release from the US, leaving the USD at the mercy of the US bond yields. Apart from this, traders will take cues from the broader market risk sentiment to grab short-term opportunities around the risk-sensitive Kiwi. That said, the mixed fundamental backdrop might force short-term traders to move to the sidelines ahead of the release of the latest US consumer inflation figures on Thursday.
The RBA Will Continue At A 25bp Pace At Coming Meetings

The Australian Economy Is Closely Linked To Chinese Imports

InstaForex Analysis InstaForex Analysis 07.11.2022 09:51
The previous week was rich in all sorts of events and economic statistics, which increased uncertainty in markets. First of all, there was the decision of the Federal Reserve regarding its monetary policy, which continued to be hawkish, as perceived from Jerome Powell's speech. The Fed chief once again broke expectations that the bank would begin to gradually ease the rate hikes in order to analyze its impact on the national economy. Another highlight was the data from the US labor market, which showed a steady increase in the number of new jobs at 261,000 in October against the forecast of 200,000. All these were very important as investors are monitoring the monetary policy in the US. They are trying to understand how the Fed will act in the near future, more specifically if the bank will continue its aggressive cycle of raising interest rates or not. The former will signal if rates will rise above 5%. This week, the data on US inflation will come out, which is expected to be 0.7% higher in October, against the September growth of 0.4%. Its year-on-year value, however, will correct from 8.2% to 8.0%. If the report coincides with expectations or come out higher, the Fed will continue its aggressive rate increase, which will push the value above 5%. This will keep markets bearish. But if the figure indicates a slowdown in the growth of consumer prices, stocks will rise, while dollar will weaken. Also ahead is the result of the midterm elections in the US. It is assumed that the unconditional victory of Republicans will change not only the current political course, but also the economic one. Even so, it is difficult to say how this will affect markets, so be cautious when trading. Summing this all up, negative sentiment prevails among Fed members and the market as a whole, which can put pressure on stocks, while raising up dollar. Investors are obviously not convinced that inflationary pressure in the US will end by the end of year, or show even a small but steady decline. In this situation, dollar may once again put pressure on major currencies, while treasury yields will resume growth. Forecasts for today: AUD/USD The pair shows weakening growth, influenced by the weak data on exports and imports, as well as the trade surplus in China. The Australian economy is closely linked to Chinese imports and if market sentiment is generally negative today, the pair could drop to 0.6290 after breaking 0.6400. GBP/USD The pair is trading above 1.1270. Deterioration of market sentiment ahead of the congressional election result in the US, as well as caution before the publication of inflation data, may put strong pressure on the pair. A price drop below 1.1270 will only exacerbate this likely fall.     Relevance up to 08:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326370
Apple Q3 2023 Results – Surpassing Expectations and Aiming for New Heights

Analysis Situation Of The EUR/USD Pair And The GBP/USD Pair

InstaForex Analysis InstaForex Analysis 07.11.2022 10:15
EUR/USD Higher timeframes Today, at the opening of the week, a fairly deep downward gap has formed. Now bulls are trying to close it and restore their positions to the closing point of last week. The main task for the bulls to gain new prospects in this area is to go beyond the resistances of 0.9952 - 1.0000 - 1.1014 (upper limit of the daily cloud + weekly and psychological level). The nearest most important supports today can be noted at 0.9912 (daily short-term trend) and 0.9863–68 (daily medium-term + weekly short-term trend). H4 – H1 Having worked out the last target for the breakout of the H4 cloud at the first target (0.9744), bulls managed to end the decline and, having seized the initiative, changed the current balance of power in the lower timeframes. As of writing, the main advantage belongs to the bulls, and their benchmarks for continued rise today can be noted at 1.0037 - 1.0114 - 1.0262 (resistance of the classic pivot points). Key levels form support now at 0.9862–89 (central pivot of the day + weekly long-term trend). Consolidation below will change the distribution in the preponderance of forces. *** GBP/USD Higher timeframes Today, the opening of the new week is marked by a downward gap. The market thought. We look forward to what will happen next. For bulls to continue recovering positions and moving towards the unification of monthly and weekly resistances (1.1781 - 1.1842 - 1.1895), they first need to reliably overcome the nearest zone 1.1411 - 1.1511, where bearish interests protect the historical level and weekly medium-term trend. At the same time, it should be noted that the upper limit of the daily cloud (1.1324) currently influences the situation, and the main supports today are at the boundaries of the weekly levels of 1.1238 and 1.1046. H4 – H1 The day before, bulls performed a fairly effective rise and captured the support of the central pivot point of the day (1.1302). The key resistance today is located at 1.1390 (weekly long-term trend). The breakdown and reversal of the moving average will change the current balance of power, giving the main advantage to the side of the bulls. The classic pivot points (1.1457 – 1.1537 – 1.1692 ) will become benchmarks for continuing the rise within the day. If the bulls decide to complete the ascent, then the support on their way today can be noted at 1.1222 – 1.1067 – 1.0987 (classic pivot points). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Relevance up to 08:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326376
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

Monetary Policy Divergences Makes Negative Views On Sterling (GBP)

InstaForex Analysis InstaForex Analysis 07.11.2022 11:34
In early November, the Fed and the Bank of England sent clear statements to the markets. Don't underestimate the potential for higher federal funds rates. And there is no need to overestimate the peak values of the repo rate. Different rates of monetary tightening seemed to convince investors that the GBPUSD pair has decided on the direction of further movement. It must go down. Alas, the market reaction to the US employment data for October turned everything upside down. After Rishi Sunak replaced Liz Truss as prime minister, the risk of a mismatch between fiscal and monetary policies disappeared from the pound, causing the GBPUSD to soar from 1.04 to 1.16. Speculators significantly reduced their bearish rates on sterling, but after the Bank of England became the focus of investors' attention, the sellers got down to business again. Dynamics of speculative positions on the pound Despite the increase in the repo rate by 75 bps to 3%, which was the BoE's widest move since 1989, Governor Andrew Bailey, at a press conference, preferred "dovish" rhetoric. According to him, market expectations of the borrowing cost ceiling are too high, while the UK economy is already in the deepest recession since 1990. Chief Economist Huw Pill confirmed his opinion a little later. Pill noted that rates will certainly continue to rise, but not to 5.25%, as expected by the futures market. The BoE is obviously trying to slow down sterling fans by all means. And their statements about the recession have the same purpose. At first glance, rumors of a recession spread by the regulator are counterproductive because, in such conditions, households can restrain spending, and enterprises can slow down investments. On the other hand, if the recession finally makes itself felt, the Bank of England may pause in the process of tightening monetary policy, explaining this by implementing its own plans. Dynamics of recessions in the UK economy Thus, despite the decisiveness shown in November in the form of a 75 bps increase in the repo rate, Bailey and his colleagues are moving towards gradualism, which, on paper, should support the GBPUSD bears. Especially in conditions when the Fed is ready to raise the cost of borrowing to almost 5.25%. Monetary policy divergences allow large banks and investment firms to hold negative views on sterling. Thus, Mitsubishi UFJ, Deutsche Bank and Rabobank predict that it will fall to $1.1 or lower. To their dismay, the collapse of the US dollar in response to the seemingly strong statistics on the US labor market was a real blow to the plans. In the coming days, the market will decide what it was: a dead cat bounce or a change in trend. Technically, on the GBPUSD daily chart, the pair's inability to consolidate above the fair value at 1.135 and within the corrective ascending channel indicates the weakness of the bulls and gives rise to sales in the direction of 1.12 and 1.11.   Relevance up to 09:00 2022-11-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326384
US Inflation Rises but Core Inflation Falls to Two-Year Low, All Eyes on ECB Rate Decision on Thursday

Saxo Bank's Podcast: Discussion On US Consumer Credit Growth, China Is In Focus Over Its Covid Situation

Saxo Bank Saxo Bank 07.11.2022 11:54
Summary:  Today we step back and look at last week's price action and especially after the FOMC rate decision. China is in focus over supposedly easing its Covid restrictions lifting copper and other industrial metals including emerging market equities. The USD also seems to be rolling over in the short-term easing financial conditions a bit and lifting risk sentiment. On the macro side, we discuss US consumer credit growth and what it means for the cycle and we highlighting the plunge in European economic activity over the past three months. On equities, we discuss rumoured Meta layoffs and Apple cutting its iPhone production target. Today's podcast features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-7-2022-07112022
Trading Signals For The New Zealand Dollar To Swiss Franc Pair (NZD/CHF)

Trading Signals For The New Zealand Dollar To Swiss Franc Pair (NZD/CHF)

InstaForex Analysis InstaForex Analysis 07.11.2022 12:35
The previous trading plan for NZD/CHF talked about setting up limit orders in order to decrease the price. Plan: This was realized on Friday, during the US session, when the pair tested and broke through the target level. It signals that traders should close long positions for profit. Development: Congratulations to those who followed the strategy! NZD/CHF moved by as much as 1,850 pips. The trading idea was based on the grid trading method, which is usually used on cross rates Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 10:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326400
The EUR/USD Price May Fall Under 1.0660

The Euro (EUR) Approached Parity With The US Dollar (USD)

Conotoxia Comments Conotoxia Comments 07.11.2022 13:00
The end of the first week of November saw above-average volatility in the financial markets, possibly related to rumors about the lifting of China's anti-Covid policy. China's economy seems to be suffocated by restrictions, and the lifting of the zero Covid policy could lead to faster growth in China. EUR/USD exchange rate The financial market seemed to react with euphoria to this rumor, which could lead to a weakening of the USD against the Chinese yuan in particular, as well as to increases in the EUR/USD exchange rate. As a result of the weakening dollar, we could also see commodity prices rise, including silver, which jumped more than 6 percent, surpassing $20 per ounce. China, however, dismissed the aforementioned rumor over the weekend, leaving its restrictive approach to the outbreak. This, however, seems to have failed to change the positive sentiment. Source: Conotoxia MT5, EUR/USD, Daily The euro approached parity with the US dollar, extending the gains above the $0.99 level. This may also be related to expectations that the European Central Bank  would  further tighten monetary policy to counter high inflation. Last week, President Lagarde said the bank should continue to raise interest rates even as the likelihood of a recession in the eurozone increased. Recent data showed that inflation accelerated to a new record of 10.7 percent in October. The rise in inflation, the data showed, is being driven by energy and food prices. At the same time, GDP growth in the region slowed to 0.2 percent in the July-September period. This was the weakest growth in six quarters.  Statements important for the euro exchange rate Bank of France Governor Francois Villeroy de Galhau said Monday that peak inflation in the eurozone should be reached in the first half of 2023. The impact of the energy crisis on overall price growth "will fade starting probably next spring," he - A member of the European Central Bank's Governing Council, quoted by the BBN website, told The Irish Times. He also called for interest rate hikes to continue until it is clear that core inflation has peaked, but declined to predict where final rates will be. "Our goal is not to trigger a recession, but to tame inflation." - Villeroy de Galhau stressed. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Read more reviews and open a demo account at invest.conotoxia.com Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Share of Russian metal grows in LME warehouses

Copper Buyers Sensing Support From Developments In China

Saxo Bank Saxo Bank 07.11.2022 13:15
Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to Tuesday, November 1, the day before Fed Chair Powell sent shivers across markets. Ahead of the meeting speculators cut bullish dollar bets to a 15-month low, in commodities buying was concentrated in crude oil, natural gas, copper and soybeans with gold, sugar and coffee seeing continued selling Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming   Financial Markets Daily Quick TakeSaxo Market Call Daily Podcast This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to Tuesday, November 1. The day before the FOMC delivered its fourth consecutive 75 basis rate hike in this cycle while pouring cold water on the markets hope for a slowdown after Fed Chair Powell said there is still some way to go and that incoming data means will help determine the “ultimate level” that the Fed funds reaches. In the reporting week prior to the meeting technology stocks had sold of on disappointing earnings while the dollar and US Treasury yields traded softer. The commodity sector was mixed with gains in industrial metals and grains being partly offset by softness elsewhere.  Commodities The Bloomberg Commodity traded higher on the week with a small 0.6% gain reflecting a mixed market where gains in industrial metals and especially the grains sector was being offset by losses in softs and livestock. The energy sector traded lower with losses in natural gas and gas oil disguising an otherwise strong week for crude oil.Speculators where net buyers of commodities with length being added to 13 out of the 24 commodity futures tracked in this, led by and concentrated in crude oil, natural gas , copper and soybeans. Selling was concentrated across the softs sector where all four contracts continued to be sold. Energy Speculators raised bullish crude oil bets by a combined 38k lots to 426k lots, an 18 week high. In the week both WTI and Brent rallied by more than 3% in response to OPEC+ production cuts and renewed optimism about demand in China, developments that helped attract fresh longs, primarily into Brent. Small profit taking reduced the net length in gas oil and gasoline. In natural gas a 7% price drop triggered profit taking among short sellers resulting in the net short falling by 21% to -68k lots.    Metals Money managers were net sellers of gold for a third week ahead of last week's FOMC meeting. The 17% increase to -39k lots took the net short back to near a four-year high, just ahead of a volatile few trading days where anotherr downside rejection at $1615 support helped trigger a strong short covering rally ahead of the weekend. Short covering reduced the silver net short by 43% to 3.4k lots, platinum length was added for a fifth week taking the net long to 13.3k lots and highest since March. Copper buyers sensing support from developments in China helped flip the net back to a long position of 5.3k lots and highest since June.  Agriculture  The grains sector saw net buying for a second week lifting the combined long across six grains and soy contracts to a 19-week high at 553k lots. The bulk of the buying was led by the soybeans, soy meal and oil contracts with corn seeing a small increase in the net long. The 8% jump in wheat on Ukraine export worries did not alter the overall bearish view held by funds. Selling into strength they lifted the net short in Chicago wheat to -37k lots, the biggest short bet since the depth of the pandemic panic in June 2020. The four major softs commodities continued to see heavy net selling, this week being led by 48% reduction in the sugar long to 44k lots. The cocoa net short extended to -43.7k lots and not far from a five-year high, a development that increasingly could trigger a sharp rebound should the technical and/or fundamental outlook turn more friendly. Weeks of coffee selling continued resulting in the net flipping back to a net short of -10.4k lots for the first time in 25 months. A similar situation in cotton where nine weeks of continued selling has taken the net close to neutral at just 5.4k lots.    Forex In forex, flows turned decisively against the dollar, a day before Fed Chair Powell delivered his hawkish comments which only managed to trigger some temporary dollar strength. Before this reporting week, the Greenback had increasingly been losing steam against several of the nine IMM forex futures tracked in this report. The bulk of the net dollar selling had up until recently been mostly against the euro which since late August has seen €19 billion of net buying, reversing the net position from a 48k lots short to a 106k long. This past week buying accelerated with the net long jumping 41% to a 17 month high. Combined with an aggressive 24% reduction in the JPY net short and a 250% jump in the MXN net long, the combined dollar long ended up being reduced by 59% to just $5 billion, the weakest belief in a stronger dollar since August last year.     Source: https://www.home.saxo/content/articles/commodities/cot-crude-oil-and-copper-bought-gold-sold-ahead-of-fomc-07112022
CNY Can Appreciate Mildly Through This Year According To Economists At Commerzbank

Expectations Of Economists At UBS Of The USD/CNY Pair

TeleTrade Comments TeleTrade Comments 07.11.2022 14:14
The Yuan is seeing another leg of weakness against the US Dollar. Economists at UBS expect upward pressure on USDCNY to persist. Pressure still up in USDCNY “The Yuan is likely to stay weak in the near term, given macro headwinds and the large USD yield advantage.” “The Chinese Yuan has been under pressure in part because of the disappointing pace of China’s recovery, as the government persists with its economically damaging zero-COVID policy. In addition, the continued divergence in US-China monetary policy and the subdued appetite for Chinese assets will see persistent, upward pressure on the USDCNY in the near term.”  “Our guidance to hedge CNY long exposure into 1Q23 remains in place.”
The Bank Of Canada (BoC) Is Likely To Respond With Additional Oversize Hikes

The Bank Of Canada (BoC) Is Likely To Respond With Additional Oversize Hikes

Kenny Fisher Kenny Fisher 07.11.2022 12:56
The Canadian dollar is almost unchanged today, trading at 1.3483. Canadian dollar flies on job gains It was a day to remember for the Canadian dollar, which rocketed almost 2% higher on Friday. The driver behind the spike was a massive gain in jobs at 108, 300 in October, up from 20,000 in September. The reading crushed the forecast of 10,000. Wage growth rose to 5.5%, up from 5.2%, while the unemployment rate was unchanged at 5.2%. The employment gain was especially impressive as it was spread across the economy and was made up entirely of full-time jobs. The Bank of Canada, which hiked rates to 3.75% after a 50 basis point increase in late October is likely to respond with additional oversize hikes. The markets have priced in a 70% chance of a 50 basis point increase in December, and the terminal rate is projected at 4.5%.  At the October meeting, BoC Governor Macklem said that the BoC was closer to ending the tightening cycle, while acknowledging that the BoC was far from achieving its goal of lowering inflation to its 2% target. Headline inflation has slowed to 6.9%, but core inflation has persisted. In the US, the nonfarm payrolls sent mixed and somewhat confusing signals to the market. The October reading of 261,000 was stronger than the consensus of 200,000, but it marked the smallest gain since December 2020. The unemployment rate rose to 3.7%, up from 3.5%, while wage growth rose to 5.5% YoY, up from 5.2%. The latter release is likely to keep the Fed concerned about inflationary pressures. Bottom line? The jobs report indicates that the labour market remains robust and although a 50-bp hike is likely, a 75-bp move remains a possibility. There is one more employment report and two more inflation releases ahead of the December 14th FOMC decision, each of which should be treated as a market-mover.   USD/CAD Technical USD/CAD faces resistance at 1.3420 and 1.3586 There is support at 1.3364 and 1.3248 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Apple Q3 2023 Results – Surpassing Expectations and Aiming for New Heights

Enrique Díaz-Álvarez talks Forex market highlighting euro, pound, Japanese yen and more

Enrique Díaz-Álvarez Enrique Díaz-Álvarez 07.11.2022 14:48
Currency market volatility continues to rise, and signs are emerging that the dollar rally is running out of steam. The Federal Reserve delivered a massive hike and a more hawkish than expected message, while other central banks begin to fret about the impact of higher rates on their respective economies. However, the dollar failed to rally and in fact fell against most G10 currencies, with the notable exception of sterling, which was hobbled by an uber-dovish Bank of England. The star of the week, and also the year so far, was undoubtedly the Brazilian real, a favourite of ours, which put in another scorching rally on the back of the peaceful transfer of power to what looks to be a moderate Lula administration.   All eyes turn now to the critical October CPI inflation report out of the US (Thursday). Headline prices will probably drop further as energy prices continue to moderate, but the key will be once again the more persistent core rate. UK third-quarter GDP growth (Friday) may be important for sterling. Beyond economic news, it will be important to see whether signs of China easing its COVID policies are confirmed. As this is written, signs are emerging that last week’s rally in Chineses assets may have been premature. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 07/11/2022 British pound The Bank of England hiked rates by 75 basis points last Thursday as expected, but then surprised markets with one of its periodic pivots, this time a dovish one. The Bank of England appears to be taking a blasé view of inflation and focusing on recessionary risks instead. The reference to markets overestimating the terminal rate was unusually blunt, and sterling did not like it one bit, losing significant ground against every major currency worldwide. Third-quarter GDP growth data will be in focus this week. The MPC warned last week that the UK economy may already be in a recession, and this week data is indeed expected to show that contraction on a quarterly basis. This is, however, a backward looking number, and we expect sterling to react as much or more to the US inflation data out this week. Euro Another month, another blow out inflation report out of the Eurozone. This one came just a few days after the muddled attempt at a dovish pivot from the ECB at its meeting the previous week, thereby contributing to the developing credibility gap at the institution. In addition to double digit headline inflation, sticky core inflation continues to march higher. Figure 2: Euro Area Inflation Rate (2013 – 2022) Source: Refinitiv Datastream Date: 07/11/2022 On the plus side, the worst fears about a winter energy crisis continue to fade. On the negative side, early Monday morning reports from Asia suggest that hopes for an easing of Chinese lockdowns may have been premature, and hence the recovery of European exports to China may be further delayed. This week’s main event in the Eurozone will be a number of ECB official speeches, including President Lagarde. US dollar The hopes for a Federal Reserve pivot to a more dovish stance failed to materialise last week, and in fact Chair Powell indicated that rates may have to go even higher than markets were pricing in before the meeting. Bonds fell, as did stocks, but the dollar failed to follow the script and actually ended the week slightly down in trade-weighted terms following Friday’s nonfarm payrolls data. The labour market report was mixed, but still consistent with a very tight market that is yet to feel the impact of monetary tightening in any significant way. Figure 3: US Nonfarm Payrolls (2021 – 2022) Source: Refinitiv Datastream Date: 07/11/2022 The inflation report this week is expected to show another easing of headline annual price pressures on the back of lower energy costs. However, the key will be the core index that strips out the volatile food and energy components. The Fed needs to see a downward trend in these numbers before it can think of pausing hikes in interest rates, and is unlikely to see that in this report. Japanese yen The yen was one of the better performers in the G10 last week, ending modestly higher on the US dollar. The currency remains by far the worst performing major this year, though recent intervention efforts by the Bank of Japan appear to have put a temporary floor under the yen. According to Japan’s Ministry of Finance, intervention totalled more than ¥6 trillion last month, by far the largest ever. The 150 mark on the dollar seems to be a line in the sand for the BoJ, so we would expect fresh intervention to prop up the currency should the yen make another move towards this level. Tentative signs that the Bank of Japan is open to tweaking its monetary policy stance also provided a bit of assistance to JPY. During a speech mid-week, Governor Kuroda noted that changing the bank’s yield curve control policy could be an option should inflation pick-up. Japanese inflation remains far more contained than in most other countries, though it is expected to test three decade highs in the coming months, which could force the BoJ’s hand. Swiss franc EUR/CHF ended last week little changed, and the pair continues to hover below parity. The abundance of domestic economic data had little impact on the franc. Soft prints, for the most part, continue to point to a slowdown ahead. An indicator of consumer confidence, for instance, plunged to its lowest level since its inception in 1972. Retail sales, however, continue to show healthy consumer activity, expanding by another 0.9% in September. This resembles the situation in many other economies, where sentiment indicators and hard data are at odds. There’s not much on tap from Switzerland this week. Speeches by SNB chairman Thomas Jordan and fellow member Andrea Maechler could prove the most noteworthy. Last week, chairman Jordan suggested that further rate hikes may be needed in Switzerland, confirming our view that another rate increase is on the way in December. Australian dollar The Reserve Bank of Australia mostly met expectations during its meeting last week. Interest rates were raised by another 25 basis points to 2.85%, the second in consecutive meetings, having become the first major central bank to revert back to ‘standard’ sized hike in October. Governor Lowe struck a balanced tone in his presser, keeping the door open to additional hikes of a larger magnitude, as it waits to gauge the impact of its tightening cycle on domestic activity. The growth forecast for next year was downgraded, though there was an upward revision to its inflation forecast. All in all, there were no real surprises of note, and AUD largely tracked global risk sentiment and news out of the US. Meanwhile, news out of the Australian economy last week was mixed, with surprises to the upside in business activity and housing data offset by Friday’s soft retail sales print. This week is set to be a relatively quiet one in Australia, so we expect the dollar to be driven largely by goings on elsewhere. New Zealand dollar A stronger-than-expected labour report helped propel the New Zealand dollar to the top of the FX performance tracker last week. Employment rose strongly in the third quarter (+1.3%), following three quarters of essentially flat net employment gains, with the participation rate also up more than anticipated. News that China plans to stick by its zero-covid policy led a bit of a retracement in the dollar during Asian trading this morning, although a general improvement in market risk sentiment has kept the currency well bid. Developments out of China may be the main driver of NZD this week, as the domestic economic calendar is relatively light. We also think that expectations for the RBNZ’s next meeting in a couple of weeks time will remain key. Markets are torn between a 50bp and 75bp hike, though surprises to the upside in this week’s PMI and/or inflation expectations data could tip the balance in favour of the latter. Canadian dollar Friday’s stellar employment report out of Canada helped trigger one of the most violent rallies in CAD witnessed since the extreme volatility of the global financial crisis in ‘08-’09. The employment change number blew all expectations out of the water, as 108k net jobs were created last month, above the 21k consensus and the fastest pace of job creation since February 2020. Investors reacted by immediately raising expectations for Bank of Canada policy tightening, with markets now seeing a two-in-three chance of another 50bp rate hike in December. Figure 4: Canada Employment Change (2021 – 2022) Source: Refinitiv Datastream Date: 07/11/2022 A speech by BoC governor Macklem (Thursday) could be key in shaping the aforementioned rate expectations, and confirm whether this is indeed enough to delay a dovish pivot. Should the Bank of Canada follow in the footsteps of the Fed in prolonging its hiking cycle, then CAD would likely be dragged higher along with the US currency against most majors. Swedish krona The Swedish krona appreciated against the euro last week, extending the rally in SEK to almost 2% against the common currency since the recent peak in mid-October. The latest data out of Sweden continues to be mixed. The manufacturing PMI released last week decreased to 46.8 in October, pointing to the most significant contraction in factory activity since May 2020. However, the services PMI increased to 56.9 from a more than two-year low of 55.1 in the previous month. eptember industrial production data, which will be released this Wednesday, will complete the picture of the economy’s performance, although it has to be said that this data point runs on somewhat of a lag, and is not expected to have too much impact on the currency. Norwegian krone Norges Bank has become the latest G10 central bank to begin slowing its tightening cycle. At its meeting last week, interest rates were raised by only 25 basis points, below the 50bps expected by markets. This weighed on the Norwegian krone, which fell to its lowest level in two years against the euro, although it has since recovered some of these losses. According to its communications, Norges Bank anticipates further hikes ahead, but at a slower pace due to cooling in some areas of the economy and expectations of lower inflationary pressures. This decision is at odds with core inflation, at an all-time high 5.3%, and a labour market that is almost at full employment. In the words of Norges Bank, a larger rate hike would have been needed had only these two variables been taken into account, but the board has put more weight on risks to growth and a tightening in financial conditions. The October inflation rate, to be released on Thursday, is expected to continue its upward trend. This could cause the terminal base rate to be revised upwards, which would likely support the krone. CNY Traders certainly couldn’t complain about a lack of volatility last week. The yuan ended the week higher against the broadly weaker dollar, and the drop in the USD/CNY pair on Friday was among the biggest on record. Looking beyond the FX market, last week was extraordinarily positive for equities, with the key indices rallying sharply on rumour-fuelled hopes that China may soon embark on a path to exit its controversial zero-Covid policy. On Saturday, however, officials quashed speculation, stressing that China would ‘unswervingly’ stick to zero-Covid. Chinese equities have extended their gains today, but this could tell more about their relative cheapness than the validity of reopening hopes. Just before the weekend, China’s new Covid cases surged to six-month highs. Rising infection numbers don’t bode well for the economic outlook, and domestic consumption has already taken a hit, as shown by last week’s soft PMI numbers. Looking ahead, news on the covid front and October’s inflation data (Wednesday) could prove market moving this week. Economic Calendar (07/11/2022 – 11/11/2022) To stay up to date with our publications, please choose one of the below: 📩 Click here to receive the latest market updates👉 Our LinkedIn page for the latest news✍️ Our Blog page for other FX market reports 🔊 Stay up to date with our podcast FXTalk Source: US dollar rally stalls in spite of hawkish Federal Reserve | Ebury UK
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

The Price Of The AUD/USD Pair Is Above The Indicator Lines

InstaForex Analysis InstaForex Analysis 08.11.2022 08:00
The Australian dollar managed to overcome the resistance of the MACD indicator line on the daily chart. Today it opened above this line. Now the price will try to master the target range of 0.6514/32. If it is overcome, then the next target will be the level of 0.6592. The daily Marlin Oscillator is in the neutral position, and it reached a reversal level on October 27 and August 12 (0.0185 on the indicator scale), which increases the psychological tension in connection with the upcoming US Congressional elections today. On the four-hour chart, the price is above the indicator lines, Marlin is in the positive area and shows the intention to develop a sideways movement. In general, the expectation is positive, that is, the market is preparing to meet the victory of the Republicans. But we are not in a hurry with such expectations, so we just follow the course of events.     Relevance up to 03:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326458
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

Can The Current Situation Of The GBP/USD Pair Be Interpreted As False?

InstaForex Analysis InstaForex Analysis 08.11.2022 08:02
The pound shows significant growth for the second consecutive day. Yesterday the quote reached the target level of 1.1500. Now the price has two traditional options: to consolidate the success and continue to grow towards the next target at 1.1760, or turn around from the resistance and return to 1.1170. On this path, the price has an intermediate support at 1.1315 – MACD's indicator line. Given the political elections in the US that started today, where both parties are in favor of strengthening the dollar, we give a high probability to a reversal scenario. Technically, only the Marlin Oscillator is leaning in this direction so far, which is turning down. We can only follow developments. On the four-hour chart, the price is trying to settle above the reached level of 1.1500. Consolidation is also taking place above the balance and MACD indicator lines, which shows the bulls' obvious interest in being active. The political factor is strong today and tomorrow, so if the pound falls, the current situation will be interpreted as false and reinforcing the subsequent fall of the British currency. The British establishment is determined to win the Democrats, since it is with them that the English Rothschild clan, which put Rishi Sunak as prime minister, is associated.   Relevance up to 03:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326460
FX Daily: Testing the easing pushback

The Fall Of The EUR/USD Pair Can Be Expected

InstaForex Analysis InstaForex Analysis 08.11.2022 08:05
Here the euro has reached the upper limit of the price channel, which begins on February 10 of the current year, marked in green on the daily chart. And it reached this limit at hour X - on the day of the elections to the American Congress. The first results will be known tomorrow morning, although exit polls will be broadcast in real time throughout the night. In the media, the main idea is the scenario of the weakening of the dollar in the event of the defeat of the Democrats. But the Republicans, on the contrary, are in favor of budget cuts, especially the "Not a cent to Ukraine" thesis, so in reality the Republicans are in favor of a stronger dollar. And here, with a high political and technical probability, we can see the fall of the EUR/USD pair to the levels of 0.9950, 0.9864 and further to 0.9710. If the euro consolidates above 1.0051 (high on September 20), then the price will be able to reach the target range of 1.0100/20. On the four-hour chart, the price starts consolidating under the range of the price channel line and the target level – 1.0035/51. The price is above the indicator lines, the Marlin Oscillator is not very informative in the current acute situation. Slightly below the support of 0.9950 is the MACD indicator line, falling below the level will have an important technical downward aspect.       Relevance up to 03:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326462
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The Euro To US Dollar Pair (EUR/USD) Is Growing For Almost No Reason

InstaForex Analysis InstaForex Analysis 08.11.2022 08:12
Analysis of EUR/USD, 5-minute chart The euro/dollar pair continued its upward movement on Monday and added more than 100 points in a day. On level ground. There were no macroeconomic statistics or "foundations" on Monday either in the US or in the EU, however, traders found reasons to buy the pair. Thus, the price is again above the lines of the Ichimoku indicator and again rose to price parity. Despite the strongest growth over the past two trading days, the prospects for the euro remain rather vague. On the 24-hour timeframe, the price finally broke through the Ichimoku cloud, but at what cost! All the most important events of the month are behind us, but this week we still have to "survive" the US inflation report. We believe that the euro's current growth will not last for long, but technical buy signals are slowly starting to appear. Maybe we will finally see the end of a long-term downward trend! There were only two trading signals on Monday. At first, the price bounced off the extreme level of 0.9945 not very accurately, but managed to go in the right direction only by 9 points. Then it returned to the level of 0.9945 and settled above it, so the short position closed at a loss of about 20 points. However, the buy signal also had to be worked out, and it covered the losses on the first position, and also made it possible to earn, because by the end of the day the pair reached the nearest target level of 1.0019, near which the position should have been closed. Profit amounted to at least 55 points. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000). Analysis of EUR/USD, 1-hour chart has overcome the Ichimoku cloud on the 24-hour timeframe, as well as all the Ichimoku lines on the 4-hour timeframe. So far, the movement seems confident, but what are the reasons for it? It confuses us that the pair is growing for almost no reason. We can assume that these are echoes of the previous week, but in this case it would be more logical if the pair fell rather than grew. On Tuesday, the pair may trade at the following levels: 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, as well as the Senkou Span B (0.9900) and Kijun-sen lines (0.9874). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. Today, the European Union will publish a report on retail sales. Meanwhile, there is nothing in the US. Therefore, there will be nothing to react to, but the volatile movement may persist. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.         Relevance up to 01:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326450
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

The Cable Market May Continue To Trade In A Very Volatile Manner

InstaForex Analysis InstaForex Analysis 08.11.2022 08:15
Analysis of GBP/USD, 5-minute chart Yesterday, the GBP/USD currency pair continued its sharp and powerful growth, which began on Friday. We still believe that the pair's movement is absolutely illogical, but the market thinks otherwise, and the pound continues to grow. At the moment, the price has overcome all lines of the Ichimoku indicator on the one-hour timeframe and settled above the Ichimoku cloud on the 24-hour timeframe. Therefore, both the pound and the euro finally have concrete technical grounds to count on a new upward trend. It is still unclear how strong and long it will be. We would only like to note that the fundamental and macroeconomic background remains unchanged, so it is difficult for us to count on a strong upward movement. However, both European currencies have been falling for a long time, it may be time for a correction globally. The US and British news calendar did not contain anything interesting on Monday, so the growth of the euro and the pound was not associated with any specific reasons. In regards to Monday's trading signals, everything was as simple as possible. The first sell signal near the Senkou Span B line turned out to be false, the price still went in the right direction for 45 points, so traders at least managed to set Stop Loss to breakeven, on which the short position was closed. This was followed by the price surpassing the 1.1351-1.1364 range, which was a signal to buy, which also had to be worked out. Subsequently, the pair went up to the level of 1.1486, near which the position should have been closed. Profit amounted to at least 100 points. Although the pair spent most of the day in a flat, after all, two upward jerks provided traders with a decent profit. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group closed 8,500 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position indicator has been slowly rising in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 79,000 shorts and 34,000 longs. The difference, as we can see, is still very big. The euro cannot rise even though major players are bullish, and the pound will suddenly be able to grow in a bearish mood? As for the total number of open longs and shorts, here the bulls have an advantage of 21,000. But, as we can see, this indicator also does not help the pound too much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair shows such movements on the one-hour chart that it is very difficult to say which trend it is in at all. First, there was a sharp fall and then it settled below the key lines of the Ichimoku indicator, as well as the trend line. But now the pair has settled above the Kijun-sen and Senkou Span B lines. Grounds for growth that would last even longer have appeared on higher time frames, but the situation is still unsteady. On Tuesday, the pair may trade at the following levels: 1.1060, 1.1212, 1.1354, 1.1486, 1.1645, 1.1760. The Senkou Span B (1.1351) and Kijun-sen (1.1356) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. There are no major events scheduled in the UK and the US on Tuesday, but the market may continue to trade in a very volatile manner, continuing to work out the events and reports of the past week. Not all of them have been worked out logically, but market participants are not worried about this. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 01:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326452
The EUR/USD Pair: There Are Still No Sell Signals

Technical Outlook Of The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 08.11.2022 08:19
EUR/USD held nicely above the key support at 0.9704 which keeps our preferred count alive. As long as the key support at 0.9704 protects the downside, we see the test of 0.9536 as the completion of the 11-year corrective decline from 1.6038 and the start of a new impulsive rally that ultimately will break above the former peak at 1.6038. That said, we still have a bit more evidence to confirm that the corrective low is in place. The two factors are first the support at 0.9704 is able to protect the downside and two that the short-term resistance at 1.0094 is broken for a continuation higher towards 1.0465 and longer-term the peak of wave B at 1.2350.   Relevance up to 07:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/300009
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Bullish Trend Of The Euro (EUR) Will Start To Slow Down Sharply

InstaForex Analysis InstaForex Analysis 08.11.2022 08:25
Analysis of transactions in the EUR / USD pair The test of 0.9949 happened when the MACD line was just starting to move up from zero, which was a good reason to buy. This led to a price increase of more than 50 pips. No other signals appeared for the rest of the day. Euro continued to grow, thanks to the statements made by ECB members Christine Lagarde and Fabio Panetta, as well as the Sentix investor confidence indicator for the Euro area. As for the speeches made by FOMC members Loretta Mester and Susan Collins, they did not affect the market. There are no important statistics scheduled to be released in Europe today, so investors will have to rely on the September retail sales data and speeches of Bundesbank and ECB representatives. Even so, it is likely that euro's growth will be limited and the bullish trend will start to slow down sharply. FOMC member Loretta Mester is expected to comment in the afternoon, followed by the NFIB's report on small business optimism. The latter is unlikely to support dollar, so EUR/USD will trade within the side channel. For long positions: Buy euro when the quote reaches 1.0019 (green line on the chart) and take profit at the price of 1.0079. But growth is unlikely to occur today, so be careful with buying at the highs. Nevertheless, remember that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9986, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0019 and 1.0079. For short positions: Sell euro when the quote reaches 0.9986 (red line on the chart) and take profit at the price of 0.9929. Pressure will return after hawkish statements from Fed representatives, although at best only a small correction can be seen. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0019, however, the MACD line should be in the overbought area, as only by that will the market reverse to 0.9986 and 0.9929. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.       Relevance up to 07:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326476
The Pound Is Now Openly Enjoying A Favorable Moment

The Pound May Have A Chance To Return To The Region Of Monthly Highs

InstaForex Analysis InstaForex Analysis 08.11.2022 08:28
Analysis of transactions in the GBP / USD pair The test of 1.1340 occurred at the time when the MACD line just starting to move up from zero, which was a good reason to buy. This led to a price increase of more than 50 pips. However, the upward movement was so rapid that after hitting 1.1395, no downward correction took place. That was why selling on a rebound from the level led to losses. The speech of Bank of England member Huw Pill did not affect pound, however, the initiatives proposed by the new UK Prime Minister to resolve problems with the country's budget, as well as the weakness of dollar after last week's labor market data, pushed GBP/USD up. There are no important statistics scheduled to be released in the UK today, which theoretically should help pound to make an attempt to return to the region of monthly highs. However, it appears that a decline may occur some time today. In the afternoon, FOMC member Loretta Mester is expected to speak, followed by the NFIB's report on small business optimism. The latter is unlikely to support dollar, so the pair will trade within the side channel. For long positions: Buy pound when the quote reaches 1.1513 (green line on the chart) and take profit at the price of 1.1558 (thicker green line on the chart). But growth is unlikely to occur today, so be careful when taking long positions. Also, remember that when buying, the MACD line should be above zero or is starting to rise from it. Pound can also be bought at 1.1464, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.1513 and 1.1585. For short positions: Sell pound when the quote reaches 1.1464 (red line on the chart) and take profit at the price of 1.1394. Pressure will return in the event of hawkish statements from the Fed. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1513, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.1464 and 1.1394. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.       Relevance up to 07:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326478
The Melbourne Institute Inflation Gauge For Australia Rose More Than Expected

Australia’s Consumer Sentiment Dropped | USA: A Stronger Than Expected Democratic Showing

Saxo Bank Saxo Bank 08.11.2022 08:39
Summary:  Equities extended their rebound from post-Powell lows on Monday with China reopening reports not taking any clear direction. US treasury yields jumped higher, but more so on a heavy corporate calendar rather than macro-driven, and dollar continued to slip for a second consecutive day. Asian economic data sending some warnings signs with China export/import growth turning red and Australian confidence dropping to fresh lows. US midterms ahead, and a clean Republican sweep can be further dollar negative. Earnings focus on Walt Disney in the day ahead. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rose with tech and energy leading gains Ahead of the U.S. midterm election, equity market sentiments maintained a risk-on tone. Both S&P 500 and NASDAQ rose about 1%.  Community services, energy, and information technology led gains while utilities were the largest loser in S&P 500. On corporate news, Meta (META:xnas) gained 6.5% after the company announced plans to cut staff. Viatris (VTRS:xnas) surged 13% after the pharma company agreed to acquire Oyster Point (OYST:xnas). Lyft (LYFT:xnas) plunged 15% in extended-hour trading after reporting weaker-than expected ridership growth. Tesla (TSLA:xnas), losing 5%, dragged the benchmarks indices most. US  treasury (TLT:xnas, IEF:xnas, SHY:xnas) edged higher on incoming supply Yields across the treasury curve rose around 6bps ahead of refunding auctions of the 3-year notes, 10-year notes, and 30-year bonds for a total of USD96 billion from Tuesday to Thursday. A rise of 16bps across the pond in the 2-year UK Gilt yield also added to the pressure on treasuries. Investors will be watching closely the U.S. mid-term election on Tuesday and CPI on Wednesday. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) continued to rally on China reopening hopes Stocks in Hong Kong shrugged off the headlines about China’s National Administration of Disease Control and Prevention reiterating adherence to the dynamic zero-Covid policy over the weekend. Investors took note that the health officials added that local governments should not unreasonably double down on the implementation and must ensure people’s livelihood and economic activities remain normal.  In addition, the resumption of large-scale sports events, relaxation of PCR test requirements, increases in international flights, cancellation of circuit breaker for international flights, and approval of BioNTech vaccine for foreigners living in mainland China were among the factors cited by street analysts in their reports anticipating gradual reopening in the coming months. The Hang Seng Index rose for the second day in a row, finishing 2.7% higher. Financials outperformed, with HKEX (00388:xhkg) up 5.4%, HSBC (00005:xhkg) up 3.7%, and AIA (01299:xhkg) up 3.3%,  China property names surged on better-than-expected home sales data from some tier-1 cities. Country Garden (02007:xhkg), up 11%, was the top gainer in the Hang Seng Index. Despite Apple (AAPL:xnas) cutting iPhone production, Sunny Optical (02382:xhkg) jumped 11%. MMG (01208:xhkg) surged 16%, following the removal of blockage by locals to the company’s copper mine in Peru. Zinjin Mining (02899:xhkg), up 10.3%, announced to buy a 20% stake in Zhaojin Mining (01818:xhkg), up 9.7%.  China’s October trade data came in weaker than expected but it did not have much impact on the market on Monday. FX: Dollar’s decline extends despite rise in 10-year yields The US 10-year yields rose to last week’s post-Powell highs at 4.20%+, but the dollar tumbled for a second day in a row to drop to over one-week lows. Dollar decline was broad-based, against all G10 currencies barring the loonie. Gains were led by sterling, with GBPUSD above 1.1500 and EURGBP also sliding lower to 0.8700. EUR benefitted from the weaker dollar which helped EURUSD rise above parity from lows of 0.9900 even as President Lagarde reiterated her usual tone noting inflation must be brought back down to 2%. Midterms bring further volatility risks to FX, with a clean Republican sweep likely being dollar negative as yields will likely plunge amid speculation of a hamstrung administration limiting scope for fiscal support.    Crude oil (CLX2 & LCOZ2) lower despite dollar weakness Oil prices ended lower as hopes of China easing its zero covid policy faded, even as near-term supply constraints continued to limit the slide. OPEC has begun reducing output in line with the agreement to reduce quotas by 2mb/d at its last meeting. The market is also facing the deadline for European imports of Russian oil before sanctions kick in on 5 December. This has left fuel inventories tight, with Brent crude oil futures still below $100 per barrel and WTI futures staying above $91. Meanwhile, US natural gas futures soared on cold weather fears in the West and the Northeast. December natural gas futures contracts climbed as much as 12.8% to $7.22 per MMBtu before trimming the advance later. Copper (HGZ2) trimmed last week’s gains Copper reversed back to $3.60 after racing to $3.70+ levels on Friday on China reopening optimism. However, reports that China would stick with its adherence to strict virus controls, made the metal reverse some gains. Weak economic data also weighed on sentiment with China’s imports of Copper ore down and overall imports also unexpectedly falling for the first time in more than two years. Gold (XAUUSD) held steady despite the lower USD, and it may still be quite early to call a reversal in the short-term downtrend.   What to consider US mid-term elections to spook market volatility Pundits suggest that the Republicans have very strong odds of flipping the House of Representatives in their favour, while the odds look finely balanced for whether the Senate ends retaining the slimmest of Democratic majorities. Republicans taking both houses has few immediate ramifications, as US President Biden has the presidential veto, but a stronger than expected Democratic showing that somehow sees them retaining the House and strengthening their Senate majority would be a game changer – opening for more policy dynamism from the US over the next two years rather than the expected lame-duck presidency. Uncertainty is high as pollsters have had a hard time gathering accurate indications for the election results since Trump’s victory in 2016. China’s October trade data disappointed China’s exports in USD terms declined 0.3% Y/Y in October, much worse than the growth of 4.5% expected in the Bloomberg survey and the 5.7% in September. It was the first decline in export growth since May 2020 and might point to a turning point of deceleration in exports as the global economy slowed. If adjusting for inflation in export prices, the decline of China’s exports would be even larger in the real term. Imports in USD terms declined 0.7% Y/Y (vs consensus 0.0%, Sept: +0.3%). Bank of Japan affirms easy policy, but not without some mention of a future exit The Bank of Japan released summary of opinions of the October policy meeting today, broadly reaffirming the easy monetary policy stance. Still some members stuck a slightly different tone, noting that Japan's inflation likely to remain fairly high as there are signs service prices starting to rise, and “cannot rule out chance prices will sharply overshoot forecasts.” Still, sustained wage gains remained the base case for Japan to achieve its price target and members agreed that there was no immediate need to tweak monetary policy. Importantly, one member noted that the Bank of Japan must continue examining how a future exit from ultra-low interest rates could affect financial markets, in a rare mention of an exit. Big slump in Australian business and consumer confidence Australia’s consumer sentiment tumbled to its lowest level in 2.5 years and business confidence also weakened as higher interest rates and surging inflation stoke caution over the economic outlook. NAB business confidence plunged to 0 from 5 in September, while the Westpac consumer confidence index was down to 78 for November from 83.7 previously. This bodes ill for spending ahead, suggesting RBA’s caution on rate hikes may continue to prevail despite the continued hot CPI reports. Walt Disney earnings ahead Walt Disney is scheduled to report on Tuesday with analysts expecting Q4 (ending 30 September) revenue growth of 15% y/y but EBITDA at $3bn down from $3.86bn in Q3 highlighting the ongoing margin pressure. Layoffs are coming to Meta and Apple cuts iPhone production The demand for iPhones is coming down and Apple is now announcing a cut of 3mn units as consumers are under pressure from inflation and might be extending the life of their old phones. Apple has recently hiked prices on some of its services aiming to offset the weakness in its hardware business. Meanwhile, investors have been frustrated with Meta following the Q3 earnings release as Mark Zuckerberg has reinforced the image that he does not listen to the concerns of investors that Meta is spending too much capital on its metaverse bets. According to Wall Street Journal, Meta might have listened after all as the technology company is expected to begin laying off thousands of employees. Read our equity strategist Peter Garnry’s note here.   For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-8-nov-08112022
Oanda's Kenny Fisher talks US dollar against Canadian dollar

The USD/CAD Pair Joins To The Bearish Signals

TeleTrade Comments TeleTrade Comments 08.11.2022 08:41
USDCAD picks up bids to extend the previous day’s rebound from six-week low. Bearish MACD signals, steady RSI keep sellers hopeful. Buyers can return unless breaking 1.3340, inverted hammer challenges bearish bias. USDCAD extends the week-start rebound to 1.3510 during early Tuesday morning in Europe. In doing so, the Loonie pair justifies the previous day’s “inverted hammer” bullish candlestick while poking the 50-DMA hurdle. It should be noted, however, that the Loonie pair’s sustained break of a one-month-old horizontal area surrounding 1.3500 during the last week joins the bearish MACD signals to suggest the quote’s underlying weakness in momentum. Hence, the latest rebound appears elusive unless the quote provides a daily closing beyond the 50-DMA hurdle surrounding 1.3515. Following that, a gradual run-up toward s1.3610 and 1.3720 can’t be ruled out. However, multiple hurdles around 1.3840-50 could challenge the USDCAD bulls afterward. Meanwhile, fresh sellers could wait for the quote’s downside break of the latest swing low, around 1.3465. Following that, a convergence of the 50% Fibonacci retracement level of the pair’s August-October upside and a three-month-old ascending support line, surrounding 1.3350-40, will be crucial to watch for the USDCAD bears. Should the quote provides a daily closing below 1.3340, the odds of witnessing a slump toward the early September highs near 1.3210 can’t be ruled out. Adding strength to the said support is the 61.8% Fibonacci retracement level, also known as the golden ratio. USDCAD: Daily chart Trend: Limited upside expected
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The GBP/JPY Pair Portrays The Market’s Indecision

TeleTrade Comments TeleTrade Comments 08.11.2022 08:46
GBPJPY fades two-day uptrend, remains sidelined of late. BOE witnessed a dim response of the first gilt sale, optimism surrounding UK’s fiscal policy fades. UK businesses fear gloomy Christmas amid inflation woes. Yields remain firmer as recession looms, China’s covid numbers escalate during a sluggish session. GBPJPY treads water around 168.80, pausing the two-day uptrend, heading into Tuesday’s London open. In doing so, the cross-currency pair portrays the market’s indecision amid mixed clues and a lack of major data/events. It should, however, be noted that a dim response to the Bank of England’s (BOE) first medium-term gilt selling operation seem to have teased the pair bears of late. On the same line was the recent survey for Barclays that suggest British businesses fear a gloomy Christmas ahead, as almost half of households plan to cut festive spending due to the soaring cost of living and sales are already falling sharply in inflation-adjusted terms. Furthermore, GBPJPY’s inaction could be linked to news suggesting that the UK Chancellor Jeremy Hunt is set to announce a new tax raid on inheritance, per the UK Telegraph. The news also mentioned that Chancellor Hunt and Prime Minister (PM) Rishi Sunak are understood to have agreed to freeze the threshold above which people must pay tax for another two years. Alternatively, chatters over likely positive outcomes from the next fiscal plan and UK Prime Minister (PM) Rishi Sunak’s efforts to justify his election keep the pair buyers hopeful. UK PM Sunak is poised to announce a major gas deal with America after the Cop27 climate change summit, The Telegraph can disclose. “Talks about the “energy security partnership” are in their final stages, with the US planning to sell billions of cubic meters of Liquefied Natural Gas (LNG) to Britain over the coming year,” the news adds. It’s worth mentioning that the Bank of Japan’s (BOJ) bond-buying operations and fears surrounding China’s higher covid counts since April, as well as a light calendar, restrict the GBPJPY pair’s moves. Moving on, a lack of major data/events could keep the quote sidelined but optimism surrounding the UK’s fiscal policies may allow the cross-currency pair to remain firmer ahead of the UK’s Gross Domestic Product (GDP) for the third quarter (Q3), up for publishing on Friday. Technical analysis GBPJPY bulls attack the 10-DMA hurdle surrounding 169.00 but the bearish MACD signals and steady RSI keeps sellers hopeful.
The USD/IDR Pair Is Expected A Further Downside Movement

Indonesia’s Consumer Confidence Gauge Rose

TeleTrade Comments TeleTrade Comments 08.11.2022 08:50
USDIDR remains mildly bid, extends week-start rebound amid sluggish session. Indonesia Consumer Confidence rise to 120.30 in October. US dollar licks its wound amid firmer yields, covid fears from China. Light calendar restricts immediate moves, US inflation in focus. USDIDR picks up bids to print mild gains around $15,685 during Tuesday’s inactive Asian session. In doing so, the Indonesia Rupiah (IDR) pair fails to cheer the recently firmer Consumer Confidence data amid easing market optimism. Indonesia’s Consumer Confidence gauge rose to 120.30 versus 117.2 printed in September. It’s worth noting that the covid fears emanating from China also challenge the optimism in the Asia-Pacific region. Recently, China reported the biggest jump in the fresh daily coronavirus numbers since April, which in turn justifies the dragon nation’s previous defense of the zero-covid policy. Elsewhere, geopolitical fears surrounding the next week’s Group of 20 (G20) nations’ meeting in Bali also propel the USDIDR prices of late. Recently firmer US Treasury yields and cautious mood ahead of Thursday’s US Consumer Price Index (CPI) for October also underpin the USDIDR trader’s bullish bias. Against this backdrop, the US Treasury yields are firmer and stock futures remain indecisive but the US Dollar Index (DXY) rebounds from a one-week low. Moving on, markets in the Asia-Pacific region may witness a lack of momentum amid mixed clues and an off in India. However, Thursday’s inflation data from China and the US could entertain the traders. Technical analysis The USDIDR pair’s sustained bounce off the 10-DMA, around $15,535 by the press time, enables buyers to aim for the yearly top marked earlier in November, around $15,820.
Inflation Reports In Australia And New Zealand Were Higher Than Expected

Expectations Of Easy Inflation Might Defend The NZD/USD Pair Buyers

TeleTrade Comments TeleTrade Comments 08.11.2022 08:55
NZDUSD pares recent gains as bulls step back from 1.5-month high, snaps two-day uptrend. RBNZ Inflation Expectations improved to 3.62% for two-year, 5.08% for one year. Sour sentiment, China’s covid woes exert downside pressure on prices. Lackluster moves expected ahead of US CPI, risk-aversion may help please bears. NZDUSD bulls take a breather at the multi-day high during a sluggish Tuesday morning in Europe. With this, the Kiwi pair remains mildly offered near 0.5930 after rising to the highest levels since September 20, snapping a two-day uptrend. In doing so, the quote fails to justify the strong points of the Reserve Bank of New Zealand’s (RBNZ) Inflation Expectations for the fourth quarter (Q4). That said, the RBNZ one-year inflation expectations rose from 4.86% to 5.08% QoQ whereas the more closely watched two-year counterpart increased to 3.62% compared to 36.07% marked in the third quarter (Q3). A lack of major data/events and recently firmer covid numbers from China dim the market’s previous optimism, which in turn allowed the US dollar to lick its wounds during an inactive session. China reported the biggest jump in the fresh daily coronavirus numbers since April, which in turn justifies the dragon nation’s previous defense of the zero-covid policy. Elsewhere, indecision over the US Federal Reserve’s (Fed) next move and the cautious mood ahead of the US Consumer Price Index (CPI) for October, as well as the US mid-term election, also underpin the US dollar’s corrective bounce. Amid these plays, the US Treasury yields are firmer and stock futures remain indecisive but the US Dollar Index (DXY) rebounds from a one-week low. Moving on, NZDUSD may witness further pullback but the bullish chart pattern and expectations of easy inflation might defend the pair buyers. Technical analysis A one-month-old ascending trend channel keeps NZDUSD buyers hopeful between 0.6000 and 0.6220.
Analysis Of The EUR/JPY Pair Movement

The Japanese Yen (JPY) Bulls Are Facing Pressure

TeleTrade Comments TeleTrade Comments 08.11.2022 08:58
USDJPY climbs above 146.80 as the traction is returning in the risk-off profile. US yields are advancing after hawkish commentary from Fed policymaker Barkin. Japanese administration is set to approve more stimulus and hike taxes for ultra-wealthy individuals. The USDJPY pair has given an upside break of the sideways profile in the Tokyo session. Earlier, the asset resurfaced from 146.40 in the early Tokyo session. The risk profile is turning sour as investors are turning cautious ahead of the outcome of the US mid-term elections. The mighty US dollar index (DXY) has refreshed its day’s high at 110.40 as the risk aversion theme is gaining traction. Mild gains recorded in the S&P500 futures have been eased as the risk appetite is shrinking. The 10-year US Treasury yields have reached 4.23% after hawkish guidance from Richmond Federal Reserve (Fed) President Thomas Barkin. Fed policymaker has contrary views to the chatters over a slowdown in the pace of rate hikes. Current interest rates are near the proposed one at 4.80% and smaller rate hikes will be witnessed ahead. Fed Barkin believes that the ongoing pace of rate hiking will continue as inflationary pressures have not displayed signs of exhaustion yet. The outcome of the US mid-term elections seems to favor the Republicans. A note from ANZ Bank states that “We regard a Republican-controlled Congress as the most likely scenario (55%). Not far behind, at 41%, is a split Congress, with a Republican-led House and a Democrat Senate.” An occurrence of the same could bring political instability to the economy. On the Japanese yen front, Tokyo bulls are facing pressure as Japanese Prime Minister Fumio Kishida is set to approve USD198 billion in the additional budget for the economic stimulus plan, as reported by Bloomberg. The government also “may opt to hike taxes on ultra-wealthy individuals with annual incomes of more than JPY1 billion ($6.8 million).”
The USD/CHF Pair Is All Set To Revisit The Monthly Low

The US Dollor To Swiss Franc (USD/CHF) Pair Portrays The Market’s Risk-Off Mood

TeleTrade Comments TeleTrade Comments 08.11.2022 09:08
USDCHF picks up bids to refresh intraday high, snaps two-day downtrend. Risk aversion, sluggish markets underpin USDCHF rebound ahead of the key data/events. US CPI, mid-term election outcomes and comments from SNB’s Jordan are the key catalysts to watch for clear directions. USDCHF prints mild gains around 0.9915 while snapping a two-day downtrend around the lowest level in a week. In doing so, the Swiss Franc (CHF) pair portrays the market’s risk-off mood, as well as the cautious sentiment ahead of a speech from Swiss National Bank (SNB) Governor Thomas Jordan. A jump in China’s daily coronavirus number, the biggest one since May 01, joins the market’s anxiety amid the US mid-term elections buzz and could be considered the main catalyst behind the recent swing in the mood. In this regard, Reuters states, “COVID-19 cases sharply escalated in Guangzhou and other major Chinese cities, official data showed on Tuesday, with the global manufacturing hub fighting its worst flare-up ever and testing its ability to avoid a Shanghai-style citywide lockdown.” The news also mentioned that the new locally transmitted infections climbed to 7,475 nationwide on November 7, according to China's health authority, up from 5,496 the day before and the highest since May 1. That said, an otherwise uninteresting US mid-term election gain the market’s attention as ex-President Donald Trump teased a “very big” announcement coming on November 15. “If Republicans secure a House majority, they plan to use the federal debt ceiling as leverage to demand deep spending cuts. They would also seek to make Trump's 2017 individual tax cuts permanent and protect corporate tax cuts that Democrats have unsuccessfully tried to reverse over the past two years,” said Reuters. Against this backdrop, the US stock futures print mild losses whereas the US Treasury yields grind higher and the US Dollar Index (DXY) recover from the eight-day low. Looking forward, a mention of the recently firmer Swiss inflation numbers and the SNB’s readiness for more rate increases could probe USDCHF buyers. However, the risk-off mood may help the pair remain firmer ahead of the US Consumer Price Index (CPI) for October, up for publishing on Thursday. Technical analysis USDCHF buyers remain hopeful unless the quote provides a daily closing below the 0.9880-70 support confluence, including the 50-day EMA and an upward-sloping support line from September 30.
Hang Seng Index Plummets -2% Amid Weak China Data, Short-Term Trend Intact

The Demand For Euro (EUR) And For The Pound (GBP) Can Strengthen

InstaForex Analysis InstaForex Analysis 08.11.2022 09:17
Consumer activity is important as it is the main driver for economic growth. The best indicator of its condition is retail sales, so a slowdown in Europe, from -2.0% to -1.5%, could strengthen the demand for euro, as well as pound. However, the report does not matter today as dollar is already losing position amid increasing fears brought about by the midterm election results in the US. The Republican Party is likely to take control of both houses of Congress, leading to many decisions to be delayed. This does not bode well in the context of the growing economic crisis. The market will stand still all day, waiting for the first preliminary voting results. Retail sales (Europe): Euro has skyrocketed in value against dollar. Since last Friday, the growth amounted to almost 300 points, which returned the quote to the parity level. However, euro is now overbought, so there may be a rebound or stagnation in the market. GBP/USD also rushed up by about 400 points, hitting 1.1410/1.1525. Signals show that it is overbought, so it is likely that there will be a rebound in the market.   Relevance up to 20:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326486
According to ING, investors stay vigilant to news from China. Sterling's gains may be not hold up

According to ING, investors stay vigilant to news from China. Sterling's gains may be not hold up

ING Economics ING Economics 08.11.2022 09:20
The dollar remains in correction mode and the market is watching the news from China regarding the approach to its Covid-19 policy. Today's market focus will be on the US mid-term elections. We expect the Romanian central bank to raise rates by 50bp to 6.75%, which may be the central bank's last move in this hiking cycle Today's market focus will be on the US mid-term elections USD: The known unknowns The dollar remains in corrective mode as investors, very underweight in both equity and bond markets, stand ready to adjust positions on the latest headlines out of China. Here, China’s zero-Covid policy represents a ‘known unknown’ for the market and one where any significant relaxation could unleash a wall of cash parked on the sidelines in dollars. Active investors would not want to be caught out by a year-end rally in risk assets. Some concrete news on China’s Covid policy would probably trigger more of a dollar correction, but until then FX markets will be dragged around by two key factors: central bank policy and energy prices. A recent BIS paper looking at this year’s dollar rally picks out those two factors and concludes that, with real rates still negative in many countries, it would be dangerous to be too concerned with the over-tightening of monetary policy. Fears of over-tightening do not seem to be present in the US currently, where money markets are continuing to price the Fed cycle higher and later. Perhaps one factor we are underestimating here – and one we highlighted in our FX Daily last week – is that a more drawn-out Fed tightening cycle is delivering a drop in volatility and a fillip to the carry trade. Certainly, US interest rate volatility has started to drop. For today, the focus will be on the US mid-term results. We discuss the various scenario outcomes in this article, although the immediate impact on the dollar will be muted ahead of the main event risk this week – October US CPI data on Thursday. DXY should continue to find support this week below 110. Chris Turner EUR: Staying above parity is no easy task EUR/USD climbed back above parity yesterday, still driven by a softer dollar and relatively upbeat risk sentiment. In the eurozone, we continued to hear calls for more tightening, with European Central Bank president Christine Lagarde and Governing Council member Francois Villeroy de Galhau both maintaining a hawkish tone. We doubt, however, this is offering idiosyncratic support to the euro at this stage. Today, the eurozone data calendar includes retail sales for the month of September, which are expected to have climbed on a month-on-month basis. ECB Governing Council member Joachim Nagel is speaking this morning, and we can surely expect more hawkish comments on his side. While the US inflation report and the mid-term elections are two key risk events for the dollar, macro factors continue to point at a weaker EUR/USD, and we doubt that with the economic uncertainty in the eurozone ahead of the winter and a still hawkish Fed the procyclical EUR/USD will easily remain above parity in the coming weeks. Francesco Pesole GBP: BoE Gilt sales meet lukewarm demand Lukewarm demand at yesterday’s Bank of England 7-20Y Gilt auction saw Gilts selling off and dragging other bond markets with them. Our debt strategy has been pointing out that investor demand is for shorter-dated Gilts and that £6.25bn worth of Gilt auctions later this week will not have helped the BoE’s gilt auction. Soft demand at the auction and the subsequent Gilt sell-off did not inordinately hurt sterling, however, which seems to be settling down a little. For today, the focus will be on some speeches from the BoE’s Huw Pill and Catherine Mann. Somewhat surprisingly, the pricing of the BoE cycle does not seem to have moved much since the immediate volatility following last Thursday’s Monetary Policy Committee meeting. And the FX market may now be wholly focused on the amount of fiscal restraint coming through on 17 November. We continue to favour the view that GBP/USD rallies over 1.15 are not sustainable. Chris Turner CEE: National Bank of Romania to raise rates by 50bp Today we have September industrial production and retail sales in Hungary on the calendar, and in both cases we expect weaker numbers than in August. Retail sales will also be published in the Czech Republic and the Czech National Bank will release FX intervention data for September, but the main event today is the meeting of the National Bank of Romania (NBR), which is the last one this year. We expect a 50bp rate hike to 6.75%, which means a slowdown in the pace of tightening compared to the October meeting. It may also be the last rate hike of this tightening cycle, but we do not rule out an additional 25bp rate hike in January. We think this week's data should confirm that inflation peaked in September, and we should see a lower number for October (INGF: 15.2% year-on-year). Perhaps more important than the rate hike itself will be any hint of an alteration in the tight liquidity management stance. We see little to no chance of this being changed for now, though we still have questions about how the NBR will offset the traditional year-end spending spree of the government. On the FX side, the Romanian leu has maintained a distance from NBR intervention levels for almost three weeks now and we believe positive global conditions will keep it below 4.89 EUR/RON in recent days and see potential to test new gains as we briefly saw yesterday, supported by solid demand for Romanian government bonds. Frantisek Taborsky Read this article on THINK TagsNational Bank of Romania FX Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Data May Keep The British Pound (GBP) From Rising

The Cable Market (GBP/USD) Will Be Under Pressure

InstaForex Analysis InstaForex Analysis 08.11.2022 09:22
Yesterday, despite the strong upward movement of the pound, there were no signals to enter the market. Let's take a look at the 5-minute chart and see what happened. Earlier, I asked you to pay attention to the 1.1348 level to decide when to enter the market. A breakout of this range took place without a reverse test downwards, so it was not possible to enter long positions from there. A similar story happened in the 1.1416 level. COT report: Before analyzing the technical picture of the pound, let's look at what happened in the futures market. The Commitment of Traders (COT) report for November 1 showed that both long and short positions decreased. Most likely, the upcoming meetings of the Federal Reserve and the Bank of England were to blame, after which the US dollar regained its appeal again, albeit only for a while. The current COT report does not yet take these decisions into account. The English central bank's decision to raise interest rates coincided with economists' forecasts, while BoE Governor Andrew Bailey said he was ready to slow down with further aggressive policies in favor of economic growth, which is declining rapidly. He also expressed concern about the crisis in the cost of living in the UK, which in the near future, due to a sharp increase in interest rates, may add to the crisis of the real estate market. Against this backdrop, the continued pace of interest rate hikes by the Fed and a more cautious position from the BoE led to a major sell-off of the pound. That all changed after data on the US labor market indicated a sharp contraction, becoming a serious reminder for the Fed at the end of the week that it needs to act more cautiously in the future. The latest COT report indicated that long non-commercial positions decreased by 8,532 to 34,979, while short non-commercial positions decreased by 11,501 to 79,815, resulting in a slight decline in the negative non-commercial net position to -44,836 against -47,805 a week earlier. The weekly closing price increased and amounted to 1.1499 against 1.1489. When to go long on GBP/USD: Today there are no statistics on the UK, which may keep the demand for the British pound in the short term. To maintain the upward potential, the bulls need to be active in the area of the nearest support at 1.1466, just below which there are moving averages, playing on their side. A false breakout at this level will lead to a buy signal with a re-exit at 1.1534, above which it was not possible to break through yesterday. Without this level, it will be difficult for the bulls to build a bullish market in the future. We can only talk about the continuation of the upward correction if the pair moves higher, and a breakout of 1.1534, together with a reverse downward test, will open the way to a high of 1.1603, where it will become more difficult for the bulls to control the market. The farthest target is located at 1.1666 and I recommend locking in profit there. However, we can only expect this kind of growth after the US inflation report is published, scheduled for the second half of this week. If the bulls do not cope with the tasks set and miss 1.1466, the level at the end of yesterday, then the pair will be under pressure. If this happens, I recommend postponing long positions to 1.1416. It will be wise to go long after a false breakout. It is also possible to buy the asset just after a bounce off from 1.1358, or even lower - around 1.1292, expecting a rise of 30-35 pips. When to go short on GBP/USD: The bears are in no hurry to return to the market after Friday's reports, but in order not to completely lose the initiative, you need to be active around 1.1534, otherwise you can hold out until the last month's high is updated. In case the pound rises, a false breakout at 1.1534 is a signal to sell, counting on a downward correction and a fall to the nearest support at 1.1466. A breakthrough and reverse test upwards of this range will be a signal for shorts with the update of the low at 1.1416. The farthest target is located at 1.1358 and I recommend locking in profit there. In case the pair grows and bears fail to protect 1.1534, the bulls will regain control of the situation, counting on building a new upward trend to the area of the weekly high at 1.1610. A false breakout at this level will provide an entry point into shorts with the goal of moving down. If bears are not active there, then we might see a surge up to the high of 1.1666. Therefore, I advise you to go short after a rebound, expecting a decline of 30-35 pips. Indicator signals: Trading is performed above the 30- and 50-day moving averages, which indicates further growth for the pound. Moving averages Note: The period and prices of moving averages are considered by the author on the one-hour chart, which differs from the general definition of the classic daily moving averages on the daily chart. Bollinger Bands A break of the upper limit of the indicator in the 1.1540 level will lead to a new wave of growth for the pound. Description of indicators Moving average (moving average, determines the current trend by smoothing volatility and noise). The period is 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing volatility and noise). The period is 30. It is marked in green on the graph. MACD indicator (Moving Average Convergence/Divergence - convergence/divergence of moving averages). A fast EMA period is 12. A slow EMA period is 26. The SMA period is 9. Bollinger Bands. The period is 20. Non-profit speculative traders are individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions are the total number of long positions opened by non-commercial traders. Short non-commercial positions are the total number of short positions opened by non-commercial traders. The total non-commercial net position is a difference in the number of short and long positions opened by non-commercial traders.       Relevance up to 07:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326472
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Technical Analysis Of The US Dollar To Japanese Yen Pair (USD/JPY)

InstaForex Analysis InstaForex Analysis 08.11.2022 09:28
USD/JPY: The chart shows the movement of #USD/JPY on the 30-minute (M30) chart. Seeing that quotes reached the support level of £146.05 yesterday, it is likely that a correction will take place. The theoretical target is the level of £147.69. There will be no correction if the support level of £ 146.46 is broken. Good luck! Relevance up to 08:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326492
Analysis Of USD/CHF Pair: The Swiss Currency Pair Rebounds

Swiss National Bank (SNB) Chairman Thomas Jordan And His Statement

TeleTrade Comments TeleTrade Comments 08.11.2022 09:42
Swiss National Bank (SNB) Chairman Thomas Jordan is delivering opening remarks at the High-Level Conference on Global Risk, Uncertainty, and Volatility, in Zurich. Key quotes “Our monetary policy decisions are not based exclusively on our inflation forecast.” “Policy decisions must be based on a firm commitment to the objective of price stability.“ “We are also experimenting with machine-learning models that are trained using a large set of economic and alternative indicators.” “Uncertainty must not mean indecision.” “We do not aim to fine-tune inflation within this range of 0 -2%.” “When faced with large shocks that increase the risk of persistent movements of inflation away fromthe range, determined action is necessary.” Market reaction USD/CHF is defending 0.9900 on the above comments, with the major trading at 0.9911, up 0.31% on the day.
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

A Frustrating Year For New Zealand Dollar (NZD)

TeleTrade Comments TeleTrade Comments 08.11.2022 10:09
2022 has been a frustrating year for FX forecasters, and the New Zealand Dollar in general. USD strength continues to dominate, but economists at ANZ do think the NZD will do better in 2023. USD domination will slowly subside “Looking ahead, while it is impossible to forecast when we might see geopolitical risks lessen, we do expect USD domination will slowly subside as the US economic cycle itself matures.” “With the RBNZ expected to hike by 75 bps at the next two meetings, and the Fed expected to slow the pace of hikes, the NZD has scope to regain some lost ground.” “New Zealand’s external imbalances are large. This is generally viewed by markets as more of a risk factor rather than as a reason to aggressively sell the NZD, but the fact that the deficit is set to narrow over 2023 as international tourism recovers (off a near-zero base) does reduce a negative in the equation for the NZD.” “One other string in the NZD’s bow is the gap between its current level and fair value, which we see at around 0.65. Our forecasts have this gap slowly closing over coming quarters, taking the NZD to fair value by the end of 2024.”
The USD/JPY Price Seems To Be Optimistic

Hawkish Sentiments Are Beginning To Appear In The Ranks Of The Bank Of Japan

InstaForex Analysis InstaForex Analysis 08.11.2022 11:22
Recently, the king dollar has increasingly begun to show signs of weakness, even paired with the main loser of the year - the yen. Does this mean that USD has already exhausted its bullish potential? The dollar's wings were clipped For almost the entire past year, the US currency has been the star of the foreign exchange market. Thanks to the Federal Reserve's aggressive policy, the greenback was able to strengthen significantly in all directions, but most of all against the yen. Since the beginning of the year, the dollar has risen in price against the JPY by more than 20%. Such impressive dynamics was facilitated by a sharp increase in the differential of interest rates in the United States and Japan. In order to curb record high inflation in the country, US officials have already conducted several rounds of rate hikes over the past eight months. Meanwhile, their Japanese counterparts continue to maintain an ultra-soft exchange rate and keep rates in negative territory. Last week, the divergence in the monetary policy of the Fed and the Bank of Japan escalated even more. The reason for this was the hawkish statement of the head of the US central bank. Fed Chairman Jerome Powell made it clear that the central bank does not intend to slow down the pace of tightening yet and the final level of interest rates in America may be significantly higher than previous estimates. Now most analysts expect that the indicator will reach 5.00% next year. Such a scenario assumes several more cycles of aggressive rate hikes, which should ensure a steady growth of the dollar for at least several more months. However, why does the US currency ignore Powell's hawkish comments now and weaken in all directions, including against the yen? Sluggish economic data is to blame for everything. The report on employment in the non-agricultural sector of the United States published last week showed that the unemployment rate in the country rose to 3.7%. This further increased traders' fears about the recession and its possible side effects. If the US economy continues to show signs of slowing down, the Fed may well reduce the degree of its aggressiveness towards interest rates, even despite the populist promises of Powell. The likelihood that the US central bank will move to less hawkish actions is a strong negative factor for the dollar, which now overshadows any positive catalysts. What can bring the dollar back to growth? Yesterday, the dollar experienced another loud sell-off in all directions, including against the yen. The intraday low for the USD/JPY pair was the level of 146.08, which is 1.9% lower than last week's high. At the start of Tuesday, it found the strength to return to growth again. But its dynamics looks modest: at the time of release, the quote rose by 0.1%. The dollar is growing ahead of the midterm elections to the US Congress. It is also slightly supported by news from Japan. This morning it became known that Japanese Prime Minister Fumio Kishida is going to approve an additional stimulus budget of $198 billion. In addition, a summary of the BOJ's opinions was published on Tuesday. The report showed that during the October BOJ meeting, 8 out of 9 members of the central bank's board stressed the importance of maintaining an ultra-soft monetary policy, since price growth in the country is not sustainable. Only one official said that further acceleration of inflation could not be ruled out, and therefore the central bank should be ready to adjust its monetary rate. As we can see, hawkish sentiments are beginning to appear in the ranks of the BOJ. But one opinion is clearly not enough for the BOJ to radically change the strategy it has been following for almost ten years. Some analysts believe that the central bank may move to normalize its policy in the second quarter of 2023, when the term of office of the current head of the BOJ, Haruhiko Kuroda, ends. He is due to leave office in April. As long as Kuroda's dovish stance remains at the helm, the BOJ's position will remain unchanged. This could further weaken the yen, especially if rumors of a possible slowdown in the pace of tightening in the US are not confirmed. We can see the implementation of such a scenario in the near future – after this week's release of US inflation statistics for October. If the consumer price index drops slightly, the market will regard this as another signal of the continuation of an aggressive anti-inflationary campaign in America. In this scenario, the dollar can get a powerful boost for growth. Otherwise, if the inflation data turns out to be weaker than forecasts, we may witness a further decline in the green currency and a strengthening of the yen.       Relevance up to 09:00 2022-11-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/326502
China: PMI positively surprises the market

Podcast: China Is Set To Ease Up On Its Covid Restrictions, Eyes On The USA

Saxo Bank Saxo Bank 08.11.2022 11:53
Summary:  Today we look at markets as we await US elections today and the US CPI data print on Thursday, all while everyone has very twitchy trading fingers on hopes that China is set to ease up on its Covid restrictions. We also discuss the simultaneous decline in bond market and equity market volatility and ask which asset class might be more attractive. Equity sentiment has improved sharply and is near six-month highs. In commodities, we zero in on nat-gas, gold, cocoa and coffee. Stocks to watch, including Tesla, upcoming earnings from Disney and more also on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.     Source: https://www.home.saxo/content/articles/podcast/podcast-nov-8-2022-08112022
Oanda Podcast: US Jobs Report, SVB Financial Fallout And More

Ahead Of The Midterm Elections In The USA | The EUR/USD Pair Is In Downtrend

InstaForex Analysis InstaForex Analysis 08.11.2022 11:58
Markets are anticipating the preliminary results of the midterm elections in the US, which are expected to have a significant impact on government financial policy, on inflation and, of course, the actions of the Fed. Many believe that a change will be seen if Republicans take control of both houses of Congress. This means that many decisions may be changed, especially in taxes, spending and support for the Ukrainian regime, which largely caused the high inflation in the country as demand increased amid significantly low supply, primarily in goods for everyday life. Such a scenario may cause a cautious rally in the stock markets and the weakening of the dollar. And if the data on consumer inflation, which will be presented on Thursday, show at least a slight downward correction, positive sentiment will grow, So far, about half of the Fed members are in favor of raising the rate not by 0.75%, but by 0.50% at the December meeting. This in itself may serve as a signal that the bank may start easing the rate hike, moreso if US inflation does not show a sharp increase. Forecasts for today: EUR/USD The pair is demonstrating a local downward reversal on the wave of a possible downward rollback on the stock markets today ahead of the results of the US Congress elections. But it found support at 0.9990, so a rise above this level may lead to a growth, albeit short-lived. Meanwhile, the pair's decline below 0.9990 may lead a local fall to 0.9895. GBP/USD The pair broke through 1.1465 amid lower risk appetite ahead of the midterm elections in the US. A further decline below this level will lead to a fall to 1.1350.     Relevance up to 09:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326503
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

Technical Analysis Of The Euro Situation (EUR) By Jozef Kovach

InstaForex Analysis InstaForex Analysis 08.11.2022 12:51
EUR/USD The euro is seem to be trading in the 0.9750-1.0050 range. Expectations that the ECB may raise the interest rate by 0.75% at the next meeting provide support for the euro although the currency is now hovering around its all-time lows against the dollar. At the same time, the instrument has strong resistance on its way. Indeed, the US Federal Reserve is likely to remain aggressive. The regulator is anticipated to lift interest rates by 0.75% or at least 0.5% in December. Therefore, we may observe such a price range on the chart. Final thoughts: Consider selling EUR at 1.0050, the upper limit of the range, and above. Likewise, it will be possible to go short after a breakout through today's low.   Relevance up to 11:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326517
The Japan Central Bank’s Decision Sent The Yen (JPY) Sliding

Still, The Outlook For The Yen (JPY) Does Not Look Good

Kenny Fisher Kenny Fisher 08.11.2022 14:50
The Japanese yen continues to have a quiet week. In the European session, USD/JPY is trading at 146.34, down 0.18%. Household spending rebounds Japan’s household spending bounced back in September, with its first gain in three months. Household spending rose 1.8% MoM, despite higher inflation. This reading follows a strong retail sales report for September, with a gain of 1.1%. The sharp drop in Covid cases in September contributed to the strong numbers. The question is whether the uptick in household and consumer spending will last. Inflation hit 3% in September for the first time in over 30 years, and inflation above the 3% level starts to squeeze spending in real terms. The government is hoping that the finance package that was announced today will reduce inflation and boost growth. The Japanese yen has improved lately and joined the bandwagon on Friday, as the US dollar retreated after a mixed nonfarm payrolls report. Still, the outlook for the yen, which has plummeted about 20% this year against the dollar, does not look good. The Bank of Japan hasn’t budged from its ultra-loose policy, despite the declining yen and rising inflation. The Federal Reserve is far from winding up its aggressive rate policy, with inflation still running high. With the BoJ maintaining a cap on JGB yields, the US/Japan rate differential continues to widen, which is pushing the yen lower. At the BoJ’s meeting in late October, the BOJ maintained all policy settings as well as its dovish guidance. Essentially, it was more of the same from the BoJ, with a strong likelihood that the BoJ will not make any changes before Governor Kuroda ends his term in April 2023. USD/JPY Technical There is resistance at 147.07 and 148.45 145.28 and 144.20 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

The Dow Jones Hit A Monthly High, The S&P 500 Index Also Rose

InstaForex Analysis InstaForex Analysis 09.11.2022 08:00
At the close on the New York Stock Exchange, the Dow Jones rose 1.02% to hit a monthly high, the S&P 500 index grew 0.56%, the NASDAQ Composite index climbed 0.49%. Dow Jones Amgen Inc was the top performer among the components of the Dow Jones in today's trading, up 15.37 points or 5.55% to close at 292.39. Quotes Boeing Co jumped by 4.71 points (2.86%), closing at 169.62. American Express Company rose 2.19% or 3.22 points to close at 150.20. The worst performers were Walgreens Boots Alliance Inc, which shed 0.30 points or 0.78% to end the session at 38.29. The Walt Disney Company was up 0.53 points (0.53%) to close at 99.90, while Chevron Corp was down 0.27 points (0.15%) to close at 185. 34. S&P 500 The top performers in the S&P 500 index today were SolarEdge Technologies Inc, which surged 19.13% to 251.73, Expeditors International of Washington Inc, which gained 9.06% to close at 104.40, as well as Welltower Inc, which increased by 8.22% to end the session at 66.51. The least gainers were Take-Two Interactive Software Inc, which shed 13.68% to close at 93.57. Shares of Medtronic PLC lost 6.25% to end the session at 80.19. Quotes of International Flavors & Fragrances Inc decreased in price by 4.96% to 91.41. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Taskus Inc, which rose 37.22% to hit 22.01, GrowGeneration Corp, which gained 35.05% to close at 4.47, and Skywater Technology Inc, which rose 31.60% to end the session at 11.37. The least gainers were Bioventus Inc, which shed 57.51% to close at 3.00. Shares of R1 RCM Inc lost 49.76% and ended the session at 7.41. Quotes of Athersys Inc decreased in price by 43.36% to 1.28. The numbers On the New York Stock Exchange, the number of securities that rose in price (1834) exceeded the number of those that closed in the red (1256), while quotes of 125 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,894 stocks fell, 1,771 rose, and 259 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 4.89% to 25.54. Gold Gold futures for December delivery added 2.15%, or 36.20, to $1.00 a troy ounce. In other commodities, WTI crude for December delivery fell 2.83%, or 2.60, to $89.19 a barrel. Brent futures for January delivery fell 2.39%, or 2.34, to $95.58 a barrel. Forex Meanwhile, in the Forex market, EUR/USD climbed 0.56% to hit 1.01, while USD/JPY fell 0.73% to hit 145.55. Futures on the USD index fell 0.46% to 109.49.     Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/300198
The Euro May Gradually Climb To The Target Level

EUR/USD Pair: There Are Also Support And Resistance Levels

InstaForex Analysis InstaForex Analysis 09.11.2022 08:01
Analysis of EUR/USD, 5-minute chart     The euro/dollar pair continued its upward movement on Tuesday and added another 80 points in a day. Again, for no reason. The pair traded rather calmly for most of the day, but in the US trading session it soared up within a few hours. Thus, the euro is finally growing, but it is extremely difficult to explain this growth. On the one hand, it is good for the euro that it is able to grow not only when there are specific reasons for this. This gives reason to still expect a new upward trend. On the other hand, won't this growth be "accelerated" before a new protracted fall? Recall that many respected experts believe that the pair will fall, and will also continue to do so next year! In general, the situation is rather strange and ambiguous. Only two trading signals were formed yesterday. First, the pair broke the level of 1.0019, and then 1.0072. Therefore, traders had to open a long position on the first signal, and close the position above the level of 1.0072, which brought them a profit of at least 55 points. Although the euro's current movement is strange, it still allows you to earn money, which means everything is fine. COT report     In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000). Analysis of EUR/USD, 1-hour chart     You can see that the pair continues to rise on the one-hour chart, has overcome the Ichimoku cloud on the 24-hour timeframe, as well as all the Ichimoku lines on the 4-hour timeframe. So far, the movement appears confident, but it is very difficult to explain it from a fundamental or macroeconomic point of view. It confuses us very much that the pair is growing for almost no reason. We can assume that these are echoes of the last week, but in this case it would be more logical if the pair fell rather than grew. On Wednesday, the pair may trade at the following levels: 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as the Senkou Span B (0.9900) and Kijun-sen lines (0.9905). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events planned in the European Union and the United States. Thus, there will be nothing for traders to react to, but at the same time, the pair can continue to trade in a volatile manner and trend. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326588
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The Situation Of The Pound To US Dollar (GBP/USD) Is Still Unsteady

InstaForex Analysis InstaForex Analysis 09.11.2022 08:11
Analysis of GBP/USD, 5-minute chart Yesterday, the GBP/USD currency pair continued its sharp and powerful growth, which began on Friday. We still believe that the pair's movement is absolutely illogical, but the market thinks otherwise, and the pound continues to rise. At the moment, the price has overcome all lines of the Ichimoku indicator on the one-hour timeframe and settled above the Ichimoku cloud on the 24-hour timeframe. Therefore, both the pound and the euro finally have concrete technical grounds to count on a new upward trend. It is still unclear how strong and long it will be. We only want to note that the fundamental and macroeconomic background remains unchanged, so it is difficult for us to count on a long upward movement. We fear that this movement will not become a simple "acceleration" before a new fall. This week there will be a small number of fundamental and macroeconomic events. Apart from the inflation report and the elections to the US Parliament, there is nothing special to highlight. Perhaps, by the way, the dollar is falling due to the likely victory of the Republicans in the elections. But this logical chain is absolutely non-obvious. Three trading signals were formed on Tuesday. First, the pair overcame the level of 1.1486, then rebounded from below, then settled above it. The first two sell signals can definitely be considered false, since the price could not reach the nearest target level. In the first case, it went down 28 points, in the second - about 40. That is, in both cases, Stop Loss should have been set to breakeven, at which both positions were closed. The third buy signal should not have been worked out, since the first two turned out to be false. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group closed 8,500 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position indicator has been slowly rising in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 79,000 shorts and 34,000 longs. The difference, as we can see, is still very big. The euro cannot rise even though major players are bullish, and the pound will suddenly be able to grow in a bearish mood? As for the total number of open longs and shorts, here the bulls have an advantage of 21,000. But, as we can see, this indicator also does not help the pound too much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair shows such movements on the one-hour chart that it is very difficult to say which trend it is in at all. First, there was a sharp fall and then it settled below the key lines of the Ichimoku indicator, as well as the trend line. But now the pair has settled above the Kijun-sen and Senkou Span B lines. Grounds for growth that would last even longer have appeared on higher time frames, but the situation is still unsteady. It is extremely difficult to explain why the pound is rising. On Wednesday, the pair may trade at the following levels: 1.1060, 1.1212, 1.1354, 1.1486, 1.1645, 1.1760, 1.1874. Senkou Span B (1.1351) and Kijun-sen (1.1366) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. Again, no major events are scheduled for Wednesday in the UK and the US, but the market may continue to trade in a volatile manner and trend, which is good for traders anyway. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 01:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326590
Assessing 'Significant Upside Risks to Inflation': Insights from FOMC Minutes

High Inflation, The Aggressive Fed And Geopolitical Uncertainty Increases The Likelihood Of A US Recession

InstaForex Analysis InstaForex Analysis 09.11.2022 08:15
In my previous reviews, I pointed out that the wave structures of the two instruments I analyze daily were about to see the completion of the ascending sections of the trend. These sections will comprise 5 waves, and they won't be impulse ones. This is the most likely scenario because demand for the dollar may soar in the near term. Let's now analyze possible reasons for a stronger greenback. Future decisions This article is mostly about Goldman Sachs Group. Its analysts have downgraded their forecasts for EUR to $0.94 from $0.97 for the coming three months. In the course of its latest fall, the instrument approached $0.95. Given the latest forecast, we may expect the descending section of the trend to resume its formation or a new section to build up. According to Goldman Sachs, having a floating target, the US Federal Reserve may raise interest rates to 5% by March 2023, with one increase of 0.50% and two increases of 0.25%. Meanwhile, other central banks, including the Bank of England and the ECB, won't have any floating targets. Therefore, monetary policy divergence may deepen towards the US dollar. Economic growth in the United States In addition, Goldman Sachs says there is a 35% probability of the United States entering a recession in the coming 12 months, citing high inflation, the aggressive Federal Reserve, and geopolitical uncertainty. The company underlined that its forecast is more optimistic compared to the outlooks from other firms and banks because it foresees a realistic scenario of an economic path from high inflation to low inflation and without a recession. Economic growth in the United States is expected to fall below the trend line but remain above zero. The balance in the labor market is likely to be restored, and unemployment growth to be limited. The euro and the pound If it is an accurate forecast, the US economy is unlikely to get hurt badly. If a recession is weak and inflation gets back to 2% rather fast, there will be still no reason for an increase in demand for the dollar because analysts do not expect an easy path for the European or British economy. BoE Governor Bailey announced the British economy entered a recession in the third quarter, which may last for 2 years. Meanwhile, the ECB will hardly lift interest rates to 5% because the European Union is not a single country but a union of nations in different financial situations. Some countries will survive high rates painlessly, some may need economic support for quite a long time. By economic aid, we mean new allocations and stimulus programs, and this is something the ECB would like to avoid. Thus, the dollar again looks more promising than the euro and the pound. The sum up Based on the analysis, we may anticipate that the formation of the ascending trend section will become more complex and comprise up to five waves. It may be that the fifth wave of this section is now building up. Therefore, consider buying with targets located above the peak of wave c, based on the reversals of the MACD to the upside. The entire section of the trend after September 28th now has the a-b-c-d-e structure. However, once it is complete, the formation of a new downtrend section may begin.     Relevance up to 05:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326596
Technical Analysis Of The EUR/USD Pair By Jakub Novak

Technical Analysis Of The EUR/USD Pair By Jakub Novak

InstaForex Analysis InstaForex Analysis 09.11.2022 08:24
Analysis of transactions in the EUR / USD pair The test of 0.9986 happened when the MACD line moved down quite a lot from zero, which limited the further downside potential of the pair. Some time later, another test took place, but this time the MACD line was in the oversold area, so the pair rose by about 35 pips. As for short positions at 1.0079, they led to losses. Although retail sales in the Euro area coincided with forecasts, the market was not affected in the morning. But by afternoon, euro shot up as the start of the US midterm elections weakened dollar's position due to the majority in Congress being taken by the Republicans Today, ECB member Frank Elderson is scheduled to speak, but it will be of little interest. There are also no important fundamental statistics, so the market will return to balance ahead of tomorrow's inflation data in the US. Statements by FOMC members John Williams and Thomas Barkin, along with US wholesale inventory changes, will also be of little interest. Only the next election results will lead to a surge in volatility. For long positions: Buy euro when the quote reaches 1.0088 (green line on the chart) and take profit at the price of 1.0141. But growth is unlikely to occur today, so be careful with buying at the highs. Nevertheless, remember that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0044, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0088 and 1.0141. For short positions: Sell euro when the quote reaches 1.0044 (red line on the chart) and take profit at the price of 1.0004. Pressure will return after hawkish statements from Fed representatives and news on the midterm elections in the US. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0088, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0044 and 1.0004. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326608
The French Housing Market Is More Resilient | The Chance Of Republicans Winning The Senate Is Up

The French Housing Market Is More Resilient | The Chance Of Republicans Winning The Senate Is Up

Saxo Bank Saxo Bank 09.11.2022 08:31
Summary:  Risk sentiment remained upbeat despite the fallout in the crypto world as equities focused on the results of the midterm elections. Bitcoin made fresh YTD lows in the wake of Binance's acquisition of FTX. But US yields and the dollar tumbled, helping Gold and Silver to run higher breaking some key resistances. Another surge in China’s Covid cases still kept a check on gains in oil prices, and focus today will be on inflation data from China. Disney’s disappointing results further add to this quarter’s earnings misery, and Rivian and Roblox report today. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) closed higher in a choppy session A political gridlock with a divided Congress after mid-term elections was historically positive for the equity market. S&P 500 gained nearly 1.4% and Nasdaq 100 rose as much as 2% at one point before paring all the gains and more in the early afternoon, dragged by a selloff in the crypto space. Stocks managed to bounce in the late afternoon and recover some of the early gains, with S&P 500 and Nasdaq 100 finishing a volatile session 0.6% and 0.8% higher respectively. Lyft (LYFT:xnas) tumbled 23% after weak rider growth was reported the day before. Walt Disney (DIS:xnys) plunged 6.4% in extended-hours trading on earnings miss which was dragged by weak streaming results. US  treasury (TLT:xnas, IEF:xnas, SHY:xnas) yields fell on hopes for political gridlock and strong demand in the 3-year auction US treasury yields fell 4bps to 9bps across the curve with the best performance in the 5-year to 10-year segment, with the 10-year yield down 9bps to to 4.12%. Anticipations of political gridlock in Washington that historically restrained fiscal policies saw buying in treasuries. Demand in the 3-year auction was solid with awarded yields stopped at more than 1bp richer from the time right before the auction. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) took a pause as Covid cases surged The China reopening trade took a pause in Hong Kong and the mainland bourses as domestically transmitted new cases in the mainland doubled to 7,455. Guangzhou, the capital city of the Southern Guangdong province reported 2,377 new cases and launched mandatory testing in 9 of the 11 districts of the city, and extended the lockdown of Haizhu district to Friday. Hang Sang Index fell 0.2% and CSI300 lost 0.7%. China’s passenger vehicle sales growth slowed in October to +7.3% Y/Y but new energy vehicles sales, rising 75% Y/Y, remained solid. However, EV stocks declined, with NIO (09866:xhkg) falling the most, down 9% following analysts cutting price targets on the stock. Among China internet names, Alibaba (09988:xhkg) underperformed, losing 3.7%. Macau casino stocks were the top performers, rising 2% to 4%, following Macau’s decision to relax entrance rules for some visa holders starting Sunday. FX: Weaker dollar and lower yields amid an expected Republican sweep Expectations of a split Congress saw lower US yields and further USD selling on Tuesday, and eyes are now on US CPI due later this week. Meanwhile, the crypto fallout in the wake of FTX being acquired by Binance sparked a wave of volatility. Yen gained with USDJPY falling below 146. EUR gained a firmer footing above parity amid the latest ECB rhetoric including from de Guindos who noted they will continue raising rates to levels that ensure price stability, while ECB's Nagel said he will do his utmost to make sure the ECB does not let up in the inflation fight and said that large rate hikes are necessary. GBPUSD also reclaimed 1.15 handle. Crude oil (CLZ2 & LCOF3) slid with API inventory build WTI futures slid below the key $90 mark on Tuesday and Brent slid to $95 despite a weaker dollar as a fresh surge in China’s Covid cases further sparked concerns on whether China will part ways with its Zero Covid policy. Xinjian reported its fourth highest number of new cases nationally on Monday. Inner Mongolia, which was sealed off in early October, saw cases jump to almost 1800. New infections in the province of Henan almost doubled. Meanwhile, supply concerns eased with API inventory build coming in larger than expected with crude oil inventory up 5.6mm barrels last week and gasoline inventory also coming in higher. Still, US EIA also cut its 2023 oil production estimate to 12.31mm barrels/day, suggesting structural supply concerns are here to stay. Copper (HGZ2), Gold (XAUUSD) and Silver (XAGUSD) The weakness in the dollar drove metals higher. Copper led the base metals sector higher on dwindling inventories amid positive signs for demand, challenging the September high of $3.6925 once again, ahead of $3.78. Bold move higher in gold and silver as well last night with renewed USD weakness, with the most notable being gold up at one-month highs breaking through $1680/85. A break above $1735 would likely confirm a low in the market. Silver finding some technical resistance here at $21.50 but the break above $21.15 has opened up for a move to $22.25.   What to consider Republicans likely in a strong position in the US mid-term elections Looking at the latest odds on Predictit, the chance of Republicans taking the House is up to 95% from 90% earlier. The chance of them winning the Senate is up to 83% from 74% earlier. All the closest races have tilted towards the Republicans as well. It can take several days to confirm which party will prevail, especially in the Senate. More so if we go to recounts, where the votes cast in a close race are retabulated to verify the initial results. A split Congress, as we wrote yesterday, lowers the expectation of fiscal support measures thereby leading to investors expecting a sooner Fed pivot again. This can spark a further tactically rally in equities and will likely be USD negative. Risk of a contagion in the crypto market After a weeklong dispute between crypto exchanges Binance and FTX, the former is set to acquire FTX, stating a significant liquidity crunch for FTX. This may fuel further contagion throughout the crypto market, as not only FTX but also Alameda Research - the highly linked trading firm to FTX - may be insolvent. Our crypto analyst expects increased volatility in the next couple of days and weeks. Further, this may lead to contagion across the crypto market as experienced in May and June this year, so in our view, traders and investors in the crypto market should act cautiously in the foreseeable future. Likewise, Bitcoin's correlation with NASDAQ has been record-high throughout this year - and relatively high today. Please be aware that the development of crypto may impact particularly NASDAQ. Read more here. China’s PPI and CPI are expected to slow in October China’s PPI is expected to fall -1.5% Y/Y in October vs +0.9% Y/Y in September, due to the high base last year resulting from increases in material and energy prices. Unlike other major economies, CPI in China is expected to slow to +2.4% Y/Y in October from +2.8% in September. Walt Disney reported disappointing FYQ4 results Walt Disney reported FYQ4 revenue at USD20.2 billion, about USD1 billion below street consensus estimates. Adjusted EPS declined to 30 cents, missing substantially the Bloomberg consensus of 51 cents. Subscriptions rose to 164.2 million in FYQ4, up 12 million from 152 million in FYQ3, beating expectations. The operating loss in the direct-to-consumer segment, driven by the Disney+ streaming service, however, jumped to USD1.47 billion in FYQ4 from USD1.05 billion in FYQ3. The management told analysts that they expect the direct-to-consumer segment losses “to narrow going forward and that Disney+ will still achieve profitability in fiscal 2024, assuming [they] do not see a meaningful shift in the economic climate.” France’s housing market is cooling down The combination between high inflation across the board (CPI hovering close to 6% on a year-on-year basis), lower purchasing power and higher interest rates is pushing housing prices down in France. According to the real estate promoter Century21 (one of the leading player in this market), real estate prices went down under the threshold of 10.000 Є per square meter in Paris. The deceleration in prices is however limited so far. Contrary to Tel Aviv, Amsterdam and Hong Kong, the parisian housing market is not in a situation of a speculative bubble. Prices are overvalued however. Expect prices to go down a bit more due to a drop in solvent demand. But we won't see a large decrease in prices as it is currently happening in several major cities in the United States, for instance. The French housing market is more resilient for mostly two main reasons: fixed interest rates and a comparatively low household debt (it represents about 124% of net disposable household income versus a peak at 249% in Denmark). For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-9-nov-09112022
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

Technical Analysis Of The GBP/USD Pair By Jakub Novak

InstaForex Analysis InstaForex Analysis 09.11.2022 08:37
Analysis of transactions in the GBP / USD pair The test of 1.1464 occurred at the time when the MACD line had already gone down a lot from zero, which limited the further downside potential of the pair. Some time later, another test took place, but this time the MACD line was in the overbought area, so pound grew by about 40 pips. Selling for a rebound from 1.1585 in the afternoon led to a price decrease of around 50 pips. The lack of statistics on the UK did not become a reason for opening short positions, while the start of the midterm elections in the US fueled risk appetite and weakened dollar. There is nothing important on the UK today other than the speeches of Bank of England members Jonathan Haskel and John Cunliffe. Most likely, Cunliffe will talk about the further course of the monetary policy, which may negatively affect pound. In the afternoon, there is also no important fundamental statistics, so the market will return to balance ahead of tomorrow's inflation data in the US. Statements by FOMC members John Williams and Thomas Barkin, along with US wholesale inventory changes, will be of little interest, and only the next election results will lead to a surge in volatility. For long positions: Buy pound when the quote reaches 1.1563 (green line on the chart) and take profit at the price of 1.1640 (thicker green line on the chart). But growth is unlikely to occur today, so be careful when taking long positions. Also, remember that when buying, the MACD line should be above zero or is starting to rise from it. Pound can also be bought at 1.1504, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.1563 and 1.1640. For short positions: Sell pound when the quote reaches 1.1504 (red line on the chart) and take profit at the price of 1.1434. Pressure will return after a clear lack of signs of further growth, especially ahead of tomorrow's US statistics. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1563, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.1504 and 1.1434. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 08:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326610
Economic Calendar Details and Trading Analysis - August 7 & 8

Economists' Expectations Of A Rate Hike By The Reserve Bank Of India (RBI)

TeleTrade Comments TeleTrade Comments 09.11.2022 08:43
USDINR has extended its gains to near 81.60 ahead of US mid-elections outcome. Lower consumer spending and Fed’s bigger rate hike have trimmed consensus for the US CPI. The RBI may opt for a 35 bps rate hike in its December monetary policy meeting. The USDINR pair is witnessing a significant responsive buying action after dropping to near 81.20 in the Tokyo session. The asset has extended its gains above 81.43 and has printed a day’s high of around 81.60. Escalating uncertainty ahead of the US mid-term elections outcome and the release of the US Consumer Price Index (CPI) data has kept the risk-perceived currencies on the tenterhooks. The US dollar index (DXY) has recovered after printing a day low at 109.47. For the time being, the DXY has defended its weekly low around 109.35. The risk profile is displaying mixed responses as S&P500 futures are trading with marginal losses after a bullish Tuesday. Meanwhile, obscurity over the extent of the rate hike by the Federal Reserve (Fed) in its December monetary policy meeting and anxiety ahead of the US inflation data has capped the alpha generated by the US government bonds. The 10-year US Treasury yields are displaying a subdued performance at around 4.14%. Consensus is favoring a marginal decline in US inflation data as the Fed is continuously hiking interest rates and consumer spending has been dented amid subdued average hourly earnings. On the Indian rupee front, the consecutive release of retail inflation above the targeted range has forced think tanks to lift consensus for the extent of the rate hike by the Reserve Bank of India (RBI). Economists at Goldman Sachs now expect RBI to raise interest rates by 50 bps, instead of 35 bps, at its MPC meeting next month. Also, RBI Governor Shaktikanta Das may elevate interest rates further by 35 bps in February 2023 vs. the prior projections of 25 bps.
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The GBP/JPY Pair Is Likely To Witness A Pullback

TeleTrade Comments TeleTrade Comments 09.11.2022 08:47
GBPJPY picks up bids to reverse the previous day’s pullback form weekly top. Short-term resistance line, convergence of the key SMAs challenge buyers. MACD conditions suggest further hardships for buyers, 165.00 appears a tough nut to crack for the bears. GBPJPY teases buyers around 168.00 heading into Wednesday’s London open, after snapping a two-day uptrend the previous day. The cross-currency pair reversed from the convergence of the 50-SMA and 100-SMA on Tuesday before portraying the latest bounce off the 38.2% Fibonacci retracement of the pair’s October 11-31 upside. It’s worth noting, however, that the receding bullish bias of the MACD challenges the upside bias. That said, a one-week-old descending trend line, around 168.40 restricts the GBPJPY pair’s immediate upside ahead of the aforementioned SMA confluence near 168.70. Should the quote manage to remain firmer past 168.70, the odds of witnessing a rally toward September’s high of 172.13 can’t be ruled out. Alternatively, pullback moves may aim for the 38.2% and 50% Fibonacci retracement levels, respectively near 167.40 and 165.90. However, the 200-SMA and multiple lows marked since October 14 highlight the 165.15-164.95 region as the key support for the bears to consider breaking before taking control. Overall, GBPJPY is likely to witness a pullback but stays on the buyer’s radar unless breaking the 164.95 level. GBPJPY: Four-hour chart Trend: Pullback expected
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

The NZD/USD Pair May Be Moving Towards A Round-Level Support

TeleTrade Comments TeleTrade Comments 09.11.2022 08:51
Anxiety ahead of the US inflation data has dragged the asset from the psychological resistance of 0.6000. Overall optimism in the market may provide support to the asset around the 20-EMA. The RSI (14) is still oscillating in the bullish range, which indicates that the upside momentum is still intact. The NZDUSD pair has turned sideways after failing to cross the immediate hurdle of 0.5960 in the Tokyo session. The risk profile has turned quiet as investors have shifted to the sidelines ahead of the US inflation data. The US dollar index (DXY) is displaying topsy-turvy moves around 109.70 and is expected to remain on the tenterhooks. Going forward, the outcome of the US mid-term elections and the release of the US inflation will provide a decisive action in the currency market. On a four-hour scale, the asset is auctioning in a Rising Channel pattern that indicates an upside structure. The upper portion of the chart pattern is placed from October 12 high at 0.5716 while the lower portion is plotted from October 13 low at 0.5512. The asset has witnessed selling pressure after attempting a break above the psychological resistance of 0.6000. And, the decline move is basically a mean-reversion move and is expected to find support around the 20-period Exponential Moving Average (EMA) at 0.5918. The 50-EMA at 0.5868 is still advancing, which adds to the upside filters. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates that the upside momentum is active. A corrective move to near the 20-EMA at 0.5918 will present an entry opportunity for the smart money, which will drive the asset towards the psychological resistance of 0.6000, followed by August 29 low at 0.6100. On the contrary, a downside move below Monday’s low at 0.5863 will put the Greenback bulls in the driving seat and will drag the asset towards the round-level support of 0.5800. A slippage below the latter will open room for more downside towards Thursday’s low at 0.5741. NZDUSD hourly chart
Bank of Canada keeps the rates unchanged. After the release of the US inflation, Fed's Barkin drew attention to cooling demand, but still strong labour market and inflation

The Loonie (USD/CAD) Pair Is Showing Recent Weakness

TeleTrade Comments TeleTrade Comments 09.11.2022 08:58
USDCAD seesaws around multi-day low, picks up bids of late. Challenges to sentiment from the US election results, China’s covid conditions test USDCAD bears. DXY rebound, higher inventories weigh on oil prices. Risk catalysts eyed for directions ahead of US CPI, speech from BOC’s Macklem. USDCAD grinds near 1.3450 heading into Wednesday’s European session amid dicey markets. The anxiety over US government gridlock joins covid fears from China and a cautious mood ahead of the key data/events to restrict the Loonie pair’s latest moves. That said, softer prices of Canada’s key export item, namely the WTI Crude Oil, tease the USDCAD bulls. The energy benchmark drops for the third consecutive day down 0.85% intraday near $87.75 by the press time. Also read: WTI bears attack $88.00 as concerns over China’s demand, US midterm elections join API inventory build Elsewhere, the US Dollar Index (DXY) prints mild gains around 109.70 amid the escalating fears of the US government gridlock due to the latest updates from the mid-term elections. Also fueling the market’s fears and the USDCAD prices could be the headlines suggesting a six-month high covid number from China and further virus-led lockdowns. While portraying the market’s mood, the S&P 500 Futures struggle to track Wall Street’s gains while the US 10-year Treasury yields probe bears after snapping a four-day downtrend the previous day. It should be noted, however, that the anxiety ahead of Thursday’s US Consumer Price Index (CPI) for October and a speech from the Bank of Canada (BOC) Governor Tiff Macklem challenge the pair buyers. The reason could be linked to the recently mixed US data and Fedspeak, as well as the BOC’s easing in the rate hikes. Also read: US Inflation Preview: Markets set to seize on falling Core CPI to revive pivot play, three scenarios Technical analysis A one-week-old descending trend line portrays the USDCAD pair’s recent weakness. Also keeping the sellers hopeful are the bearish MACD signal and the clear break of the previous support line from early October. Additionally, the pair’s sustained trading below the 200-SMA also adds strength to the downside bias.
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

The US CPI Report Keeps A Bearish The AUD/USD Pair

TeleTrade Comments TeleTrade Comments 09.11.2022 09:00
AUDUSD prints mild losses around six-week high, snaps three-day uptrend. Fears of US government gridlock, pessimism surrounding China’s covid conditions and softer inflation data weigh on prices. Risk appetite remains sluggish ahead of the key data/events, bears are likely to retake control. AUDUSD aptly justifies its risk-barometer status as it prints the first daily loss, so far, in four days amid political and/or covid updates. That said, the Aussie pair remains depressed around 0.6490, mildly offered heading into Wednesday’s European session. A tug-of-war between the Republicans and Democrats has so far failed to provide any meaningful signals for the mid-term elections. Even so, fears of a government gridlock keep the sentiment sour of late. Also weighing on the market’s risk appetite are the fresh virus-led lockdowns in China and the multi-month high covid numbers. Recently, China reports the highest levels of new COVID cases in six months, with the latest addition of 8,335 for November 08, while marking a fresh virus-led lockdown in Guangzhou’s second district. Elsewhere, fresh pick-up of the US Treasury yields and the latest fall in the S&P 500 Futures, after hearing the fresh victory of John Fetterman, a Democrat, of the race for Senate in Pennsylvania. It should be noted that the downbeat China inflation figures for October teased bears earlier in Asia. To sum up, the risk-off mood and a light calendar ahead of Thursday’s Consumer Price Index (CPI) keep AUDUSD bears hopeful. Technical analysis AUDUSD retreats from a convergence of the 50-DMA and a five-week-old resistance line, around 0.6510, which in turn joins the recently bearish MACD signal to tease bears targeting the 21-DMA support near 0.6370.
The USD/CHF Pair Can Overcome The Immediate Obstacle Of A Trend Line

The USD/CHF Pair Can Overcome The Immediate Obstacle Of A Trend Line

TeleTrade Comments TeleTrade Comments 09.11.2022 09:06
USDCHF picks up bids to print the first daily gains in four. Easing bearish bias of the MACD, clear bounce off fortnight-old support keeps buyers hopeful. Weekly resistance line challenge intraday buyers ahead of the key hurdle comprising 200-SMA, 50% Fibonacci retracement level. USDCHF extends the previous day’s rebound from a fortnight-old support area to 0.9870 during early Wednesday morning in Europe. In doing so, the Swiss currency (CHF) pair jostles with a downward-sloping resistance line from the last Friday. Given the quote’s successful rebound from the short-term key support area surrounding 0.9840, coupled with the recently easing bearish bias of the MACD, the USDCHF prices are likely to remain firmer. As a result, the quote may overcome the immediate trend line hurdle near 0.9875, which in turn could allow buyers to aim for the 61.8% Fibonacci retracement level of the pair’s late September-October upside, close to 0.9900. It should, however, be noted that a convergence of the 200-SMA and the 50% Fibonacci retracement level, near 0.9945, appears a tough nut to crack for the USDCHF bulls and trigger the pullback afterward. If the quote remains firmer past 0.9945, the odds of witnessing a run-up toward the parity level can’t be ruled out. Alternatively, the aforementioned horizontal support near 0.9840 restricts short-term USDCHF declines, a break of which could direct the bears towards the previous monthly low near 0.9780 and then to the 0.9740 level comprising the late September swing low. USDCHF: Four-hour chart Trend: Limited recovery expected  
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

China's Covid Situation Also Affects The USD/JPY Price

TeleTrade Comments TeleTrade Comments 09.11.2022 09:10
USDJPY rebounds from a two-week low to print the first positive day in four. Treasury yields reverse the previous day’s losses as fears of US government gridlock join recession woes, China covid concerns. Japan’s current account surplus slumps in the H1 fiscal year but improved in September. US inflation, updates from mid-term elections will be crucial for near-term directions. USDJPY prints a mild recovery from a two-week low around 145.70-80 during early Wednesday morning in Asia. In doing so, the Yen pair snaps a three-day downtrend amid the market’s cautious mood. That said, sentiment fades the previous optimism as the latest updates from the US mid-term elections suggest the US government gridlock. With this, the fears of higher rates also gain attention amid the Republican push for increasing the debt ceiling. Elsewhere, the worsening coronavirus conditions in China also contribute to the latest risk-aversion, as well as to the USDJPY prices at a distance. China reports the highest levels of new COVID cases in six months, with the latest addition of 8,335 for November 08, while marking a fresh virus-led lockdown in Guangzhou’s second district. It should be noted that Japan reported a notable monthly Current Account surplus for September but failed to ignore the heaviest decline in the surprise when considered for the first half (H1) of the current fiscal year (FY) since 2008. Additionally, talks of Bank of Japan’s (BOJ) meddling and the recently softer US data joined mixed concerns at the Fed to escalate the US Treasury yields and the USDJPY prices of late. Amid these plays, the US 10-year Treasury yields regain upside momentum past 4.14% while the two-year counterpart also print mild gains near 4.66% level. It should be noted that the US stock future print mild losses while the Asia-Pacific equities closed in the red despite Wall Street’s three-day uptrend. Moving on, political and covid updates may entertain USDJPY traders ahead of Thursday’s US Consumer Price Index (CPI) for October. Technical analysis The 50-DMA defends USDJPY buyers around 145.50 but the recovery needs validation from a three-week-old resistance line near 147.45.
Apple Q3 2023 Results – Surpassing Expectations and Aiming for New Heights

The Bank Of England's Gloomy Outlook Should Undermine The Pound (GBP)

TeleTrade Comments TeleTrade Comments 09.11.2022 09:13
EURGBP lacks any firm intraday direction and remains confined in a narrow trading band. Talks for aggressive policy tightening by the ECB underpin the Euro and offers support. The BoE’s gloomy outlook could weigh on the British Pound and favour bullish traders. The EURGBP cross struggles to capitalize on the previous day's modest gains and oscillates in a narrow trading band, just above the 0.8700 mark through the early European session on Wednesday. Talks of a more aggressive policy tightening by the European Central Bank (ECB) continue to benefit the shared currency and offer support to the EURGBP cross. In fact, several ECB policymakers said that higher rates are needed for longer to bring down double-digit inflation in the Eurozone back to its 2% target. This, in turn, pushes the rate-sensitive two-year German bond yield to its highest since December 2008 and is seen acting as a tailwind for the Euro. The British Pound, on the other hand, draws support from the recent slump in the US Dollar and keeps a lid on the EURGBP cross. That said, the Bank of England's gloomy outlook for the UK economy should undermine the Sterling and supports prospects for some upside for the cross. It is worth recalling that the UK central bank forecasts a recession to last for all of 2023 and the first half of 2024 while indicating a lower terminal peak than is priced into markets. The fundamental backdrop suggests that the path of least resistance for the EURGBP cross is to the upside and any slide below the 0.8700 round figure could be seen as a buying opportunity. Bulls, however, might wait for a sustained strength beyond the 0.8775-0.8780 resistance zone before placing fresh bets amid absent relevant market-moving economic releases. The market focus now shifts to the release of the Preliminary UK Q3 GDP report on Friday.
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

The EUR/JPY Pair Has Potential For Further Upside Movement

InstaForex Analysis InstaForex Analysis 09.11.2022 09:26
Technical analysis: EUR/JPY has been trading sideways at the price of 146.70. Anyway, I see potential for the upside breakout in the next period. Trading recommendation: Due to the trading range in the strong upside trend in the background, I see potential for further upside movement. Watch for buying opportunities if the price breaks level of 147.00 with the first upside objective at 148.30. MACD oscillator is showing upside reading, which is good sign that buyers are in control. Support is set at the price of 145.95   Relevance up to 08:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/300242
Technical Analysis: Gold/Silver Ratio Still On The Rise

Gold, Silver And Copper All Resumed Their Upside Push | The US Dollar (USD) Fell Sharply

Saxo Bank Saxo Bank 09.11.2022 09:51
Summary:  Market sentiment improved further yesterday before dipping slightly overnight, as China Covid cases are on the rise, pushing back against hopes for a lifting of Covid restrictions. In the US mid-term elections, Democrats are slightly outperforming expectations, possibly set to retain control of the Senate even if Republicans look likely set to take narrow control of the House of Representatives.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities exhausted themselves yesterday pulling back from intraday highs to close around the 3,835 level. Sentiment has weakened overnight amid the ongoing impact from the US midterm elections, bad Disney and the fallout from the implosion of FTX in the crypto industry with S&P 500 futures trading down to the 3,829 level. Tesla shares continued lower yesterday, and Elon Musk announced overnight in a filing that he had sold 19.5mn shares in Tesla, and the negative momentum could broaden as many retail investors have sizeable exposure to the stock. The next big event for the US equity market is tomorrow’s October inflation figures which are expected to show core inflation is easing a bit. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) The China reopening continued to fade as new Covid cases surged further to 8,176 yesterday. Hang Seng Index retreated 1.6% and CSI 300 slid 0.8%. China’s PPI declined 1.3% Y/Y in October due to falls in energy and materials prices and weaknesses in metal processing. CPI inflation was also weaker than expected and fell to +2.1% in October from 2.8% in September on weak consumer demand and property prices. Share prices of Chinese developers however surged, following the Chinese authorities pledged to provide credit support, including credit insurance and bond buying, to private enterprise developers. FX: USD remains on back foot after testing important support. Thursday CPI key focus The US dollar fell sharply yesterday, with EURUSD testing the pivot high of 1.0094 before pulling back slightly into this morning and USDJPY had a look toward the pivotal 145.00 level without breaking through. Elsewhere, AUDUSD tested above the 0.6522 pivot late yesterday before pulling back again, likely on concerns that rising China Covid cases are frustrating hopes that a shift away from lockdowns will provide a further boost to the commodity market. Lower US treasury yields yesterday helped drive the US dollar lower and are a key focus over the Thursday October US CPI release, as CPI releases have sparked considerable volatility in recent months. Crude oil (CLZ2 & LCOF3) slid on API inventory build and China’s Covid Challenges WTI futures trade back below $90 and Brent near $95 after a fresh surge in China’s Covid cases sparked concerns over whether China will part ways with its Zero Covid policy. Also weighing on prices was the API reporting a 5.6m build in crude and 2.6m build in gasoline stocks. On the supply the EIA made another downgrade to its forecast for US 2023 production, down 0.7m b/d since March to 12.3m b/d driven by labor shortages, high equipment costs, supply-chain constraints and not least commitment to profits over production. Precious and industrial metals pause following another upside push After pausing on Monday, gold, silver and copper all resumed their upside push yesterday with the moves being triggered by renewed dollar weakness and softer bond yields ahead of tomorrow’s US October CPI release. A selloff in cryptocurrencies potentially helped get the ball rolling, especially gold which found fresh momentum buying on the break above $1680/85 area. Technical resistance levels in silver at $21.50 and copper at $3.69 together with the EURUSD hitting resistance at the pivot high of 1.0094 paused the rally. Gold, up 83 dollars in three sessions, will be watching $1735 closely as a break above could be signalling an end to the month-long correction. Crypto market getting nervous After a weeklong dispute between crypto exchanges Binance and FTX, a letter of intent was signed yesterday for Binance to acquire FTX, stating a significant liquidity crunch for FTX. The announcement was initially a brief relief for the crypto market, but it was followed by a steep crypto sell-off, likely dragging major equity indices such as S&P 500 down as well. Nervousness is spreading throughout the crypto markets in fear of further contagion as we saw earlier this year, and a higher degree of volatility should be expected in the crypto markets. Read more here. US treasuries (TLT, IEF) US Treasury yields fell yesterday all along the curve ahead of the macro data point of the week – tomorrow's US October CPI release. Focus on the 3.90% yield on the 10-year treasury yield to the downside and 4.3% area cycle high to the upside in the wake of that release. What is going on? Disney sees margin compression in Q4 Disney+ delivered Q4 subscribers of 164.2mn vs est. 162.5mn but EPS came in at $0.30 vs est. $0.51 as energy costs and wage pressures are pressuring the operating margin. Disney+ is still on track to be profitable in the FY24 (two years from now). Disney’s Q4 revenue was $20.2bn vs est. $21.3bn. Shares were 7% lower in extended trading. Tesla shares fall another 5% and Elon Musk sells $4bn of shares The rumours about the big losses at Twitter and that Elon Musk would be forced to fund its operations were true as he filed overnight that he had sold $4bn of Tesla shares pushing the price down by another 2% in extended trading. Negative momentum could easily extend here with Tesla shares sitting a crucial support area back from March and June 2021. US Mid-term elections avoid the “red wave” of Republican gains, although Dems likely to lose House The final results are too early to call, but the Democrats may possibly retain control of the US Senate, with one race in Georgia possibly requiring a run-off as was the case in the 2020 election before any final outcome is known. Final tallies are not available for the House of Representative results, but the lean in the results makes it likely that the Republicans will take control of the House by a fairly comfortable margin (NYT estimates 225-210 this morning). Democrats losing the House means that the last two years of the Biden presidency will be “lame-duck”, with no real ability to shape new policy. At the same time, given the situation coming into this election, with soaring inflation and poor popularity for the sitting president, the Republican performance looks quite weak. As well, if the Democrats do retain control of the Senate, Republican-driven legislation will be unlikely to reach Biden’s desk, meaning he won’t have to formally veto their bills. France’s housing market is cooling down The combination between high inflation across the board (CPI hovering close to 6 % on a year-on-year basis), lower purchasing power and higher interest rates is pushing housing prices down in France. According to the real estate promoter Century21 (one of the leading players in this market), real estate prices went down under the threshold of 10.000 Є per square meter in Paris. The deceleration in prices is, however, limited so far. Contrary to Tel Aviv, Amsterdam and Hong Kong, the Parisian housing market is not in a situation of a speculative bubble. Prices are overvalued, however. Expect prices to go down a bit more due to a drop in solvent demand. But we won't see a large decrease in prices as it is currently happening in several major cities in the United States, for instance. The French housing market is more resilient for mostly two main reasons: fixed interest rates and a comparatively low household debt (it represents about 124 % of net disposable household income versus a peak at 249 % in Denmark). What are we watching next? US October CPI release tomorrow is macro event of the week Many recent US CPI releases have sparked considerable market volatility, not least the September release last month which strongly surprised by showing core inflation reaching a new cycle high of 6.6% year-on-year. Tomorrow’s October CPI release, ex Fresh Food and Energy is expected to come in at +0.5% month-on-month and +6.5% year-on-year, with the headline expected at +0.6%/7.9%, which would be the first sub-8.0% year-on-year print since February. Earnings to watch Today’s US earnings focus Rivian Automotive and DR Horton. The electric vehicle industry is in high growth phase and Rivian is also expected to report revenue of $561mn up from $1mn a year ago as the company ramps up production of its delivery vans. DR Horton is expected to deliver FY22 Q4 (ending 30 September) revenue growth up 25% as the tailwind from the backlog is still feeding through, but revenue growth y/y is expected to collapse to –6% y/y in the current quarter so the outlook is the key watch in this earnings release. Wednesday: National Australia Bank, KBC Group, Genmab, Siemens Healthineers, E.ON, Adidas, Honda Motor, Coupang, Rivian Automotive, Roblox, DR Horton, Trade Desk Thursday: Brookfield Asset Management, Fortum, Engie, Credit Agricole, Allianz, Merck, Hapag-Lloyd, RWE, SMIC, Nexi, AstraZeneca, ArcelorMittal, Siemens Gamesa Renewable Energy, Becton Dickinson, NIO Friday: Richemont Economic calendar highlights for today (times GMT) 0800 – Hungary October CPI 0800 – US Fed’s Williams (Voter) to speak 0905 – Australia RBA’s Bullock to speak Poland Announces Interest Rate 1200 – Mexico Oct. CPI 1300 – UK Bank of England’s Haskel to speak 1530 – EIA's Weekly Crude and Fuel Stock Report 1630 – UK Bank of England’s Cunliffe to speak 1700 – World Agriculture Supply and Demand Estimates (WASDE) 0001 – UK Oct. RICS House Price Balance 0100 – US Fed’s Kashkari (Voter 2023) to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-9-2022-09112022
Growth Of The USD/JPY Pair Is Hampered By Resistance

Technical Analysis Of The USD/JPY Pair By Laurie Bailey

InstaForex Analysis InstaForex Analysis 09.11.2022 10:00
The yen has completed the minimum program in the game against the dollar - reached an important support - the area where the MACD indicator line intersects with the price channel line on the daily chart. The MACD line is now at 145.33, so in order to break through the price to reach the target of 141.70, it should settle below this level. If the idea fails, then with the price reversal from the achieved supports, we will see the development of resistance at 147.63. Today's economic data provided support for the dollar bears and yen bulls. Japan's balance of payments in September increased from 0.694 trillion yen (and significantly revised upwards from 0.059 trillion) to 0.909 trillion, bank lending in October increased from 2.3% y/y to 2.7% y/y. And in China, the CPI showed a decline (that is, normalization) from 2.8% y/y to 2.1% y/y. On the four-hour chart, the price is trying to go under the support of 145.33. The Marlin Oscillator is slowly but surely moving deeper into the bulls' territory. Advantages of the decline scenario.   Relevance up to 09:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326628
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

The Pound To US Dollar Price Is In A Growing Position (GBP/USD)

InstaForex Analysis InstaForex Analysis 09.11.2022 10:05
The pound has settled above the target level of 1.1500. Were it not for the US election, we would think that the pound is aiming for an upper target of 1.1760, but the clear Democratic hold on the upper house of Congress does not give investors an incentive to continue buying counter-dollar currencies. The daily Marlin Oscillator is turning down, while being in the positive area. The price is also in a growing position, as it develops above the indicator lines. Therefore, even if the pound plans a reversal, it will not happen immediately. Moreover, for a reversal, the price needs to overcome the support of these very indicator lines (1.1315 - the MACD line). The first sign of this reversal will be the price settling below 1.1500. On the H4 chart, the MACD line (1.1478) is under the level of 1.1500, so the price needs to settle below this level. An upward movement to the level of 1.1760 is possible with the price surpassing the October 27 high at 1.1644.   Relevance up to 09:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326632
The EUR/USD Pair Has A Potential For Drop

EUR/USD Pair: There Are No Signs Of Growth Or Reversal

InstaForex Analysis InstaForex Analysis 09.11.2022 10:09
In the elections to the US Congress, the "red revolution" (Republican control of both chambers), as we thought, is not happening. In the elections to the Senate – to the main house of Congress, the Democrats are leading – 48 seats against 47 for Republicans (you need to get control of 50 seats), the Democrats are lagging behind in the lower house - 162 seats against 193 for Republicans. Control of the House of Representatives will occur when 218 seats are reached. The results will be announced later in the evening. In the current elections, as they write in American newspapers, the counting of votes will be delayed. Meanwhile, the euro managed to go above the upper limit of the price channel. The target range of 1.0100/30, taking into account fluctuations, is almost reached. Now the price has to choose one of the options: overcome the range and continue to rise to 1.0205, or return to the downward price channel with the support of 0.9950 being reached. The price channel in this case will be eliminated. We noted earlier that the programs of both competing parties are at least indirectly aimed at strengthening the dollar, so the factor of today's elections will quickly fade away as a typical psychological moment. There are no signs of growth or reversal on the four-hour chart. But this is an indicator of market neutrality. We are also in no hurry to get ahead of events, keeping both scenarios in mind.   Relevance up to 09:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326634
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The UK Demanding That The European Court Of Justice Be Stripped Of Its Role In Settling Brexit Disputes

InstaForex Analysis InstaForex Analysis 09.11.2022 12:09
UK and the European Union are rumored to be close to a major breakthrough in the months-long dispute over Northern Ireland's post-Brexit trading rules. Initially, the problem threatens a full-scale trade war, but the current crisis in which both regions experience record inflation seem to have made authorities do everything to find common ground. According to reports, the EU has begun testing the current UK database that tracks goods moving from the UK mainland to Northern Ireland. If they are satisfied with the system's performance, an agreement on customs checks in the Irish Sea may be signed. This recent upswing regarding negotiations allows Prime Minister Rishi Sunak's government to hope the deal will defuse tensions in the region and help the government resolve a number of problems. However, another key point to be addressed is the UK demanding that the European Court of Justice be stripped of its role in settling Brexit disputes in the region, which is not acceptable to the EU. The representative of the European Commission declined to comment on the progress of the talks, as did the British Foreign Office. Nevertheless, resolving the issue is beneficial as it would help correct supply chain disruptions and ease price pressures, especially if the Bank of England continues to increase rates at the current pace, which could push GDP down by up to 3.0% next year. GBP/USD In terms of GBP/USD, buyers are now focused on defending the support level of 1.1510 and breaking through the resistance level of 1.1590. This limits the upside potential as only a breakdown of 1.1590 will lead to a rise to 1.1690, 1.1730 and 1.1780. If pressure returns and sellers take control of 1.1510, the pair will drop to 1.1430 and 1.1360. EUR/USD In EUR/USD, sellers are not very active yet, so buyers have a chance to push the pair above 1.0090. A breakdown will spur growth to 1.0140, while a drop below 1.0030 will push euro back to 0.9970, 0.9920, 0.9880 and 0.9830.   Relevance up to 08:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326624
Asia Market: Optimistic Headlines From Regional Leaders China And Japan

The China Is Yet To Exit Its Strict Zero-Covid Policy

Kenny Fisher Kenny Fisher 09.11.2022 12:22
The Australian dollar is in negative territory today after an impressive rally. AUD/USD is trading at 0.6487, down 0.27%. US dollar steadies after selloff The US dollar has been in retreat since Friday, after a mixed nonfarm payroll report raised the likelihood of the Fed easing up in December and raising rates by just 0.50%, rather than 0.75%. The Australian dollar took full advantage of the US dollar selloff, rising over 200 points in a 3-day rally. AUD/USD rose to a 6-week high on Tuesday, but it’s hard to see the US dollar continuing to weaken much further. The Federal Reserve is sticking to its hawkish script and said at last week’s meeting that the terminal rate would be higher than previously anticipated. As well, with a gloomy global outlook, risk appetite will be under pressure, making the US dollar more attractive to investors. The Australian dollar faces other headwinds as well. China, Australia’s largest trading partner, is experiencing a slowdown as the country is yet to exit its strict zero-Covid policy. The RBA has eased up on rates, with two straight hikes of just 0.25%, even though inflation hasn’t shown signs of peaking. With the Fed expected to deliver hikes of 0.50% or 0.75%, the US/Australia rate differential is widening, which will weigh on the Australian dollar. The US midterms remain inconclusive, with tight races in both the House and the Senate. The Republicans were expected to easily take the House, but the race is tighter than expected. The Senate may not be decided for weeks if a runoff is required in Georgia. Any fluctuations in the currency markets are likely to be short-lived, with investors looking ahead to Thursday’s CPI report. . AUD/USD Technical There is resistance at 0.6549 and 0.6631 AUD/USD has support at 0.6411 and 0.6329 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Bio
In Crypto, You Could Prove You Own A Private Key Without Revealing It

Saxo Bank's Podcast: Huge Liquidity Pressures In The Crypto Space

Saxo Bank Saxo Bank 09.11.2022 12:41
Summary:  Today we look at the US mid-term election results, where the House looks set to flip Republican and the Senate may go down to a December 6th run-off in Georgia (as in 2020 and providing fodder for election denier conspiracy theories, etc...) but either way cementing the lame duck second half of Biden's presidency. Elsewhere, we look at the massive gold rally yesterday, in part on huge liquidity pressures in the crypto space that have prices tumbling there. Also, Tesla, Disney, stocks to watch, the USD on edge ahead of critical CPI release tomorrow and more on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app:           If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.     Source: https://www.home.saxo/content/articles/podcast/podcast-nov-9-2022-09112022
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

The USD Could Yet Reject This Breakdown Attempt | Weak Risk Sentiment Could Provide The Strongest Support For The JPY

Saxo Bank Saxo Bank 09.11.2022 13:25
Summary:  Market sentiment improved further yesterday before dipping slightly overnight, as China Covid cases are on the rise, pushing back against hopes for a lifting of Covid restrictions. In the US mid-term elections, Democrats are slightly outperforming expectations, possibly set to retain control of the Senate even if Republicans look set to take narrow control of the House of Representatives. FX Trading focus: Next test for struggling USD over tomorrow’s US CPI data. The US mid-term election results are still rolling in this morning in Europe, with the Republicans set to take a small majority in the House and the Senate outcome looking at risk of riding on the outcome of a Georgia run-off election on December 6th as neither candidate looks set to achieve the 50% required for elections there. Remember that we had a similar setup after the 2020 election when two Senate races in Georgia were only decided in a January 5 run-off. There are no real market conclusions from the outcome, even if the Georgia race gives the Republicans a majority in the Senate, as the only scenario that would have guaranteed dramatic potential for fiscal policy would have been the Democrats surprisingly retaining both houses. Other conclusions: Trump is a liability for the Republican party, which likely would have done far better without his involvement, and forensic studies of split-ticket voting will likely confirm this, and it will be interesting to see if this deters his possible renewed ambitions for the presidency. Finally: razor thin Georgia results keep alive the narratives around election fraud, etc. Can the US move beyond its dysfunctional elections by 2024 or will the republic face an existential test in that election cycle? Back to incoming data, with tomorrow’s US October CPI in focus. Let’s recall that the September CPI data point was a real shocker as many qualified slicers and dicers of the data were looking for a deceleration in the core data rather than the acceleration we got. That has me leaning for a slightly softer release tomorrow. But I am far more interested in the nature of the market reaction. As I have discussed the last couple of days on the Saxo Market Call podcast, I find the most interesting test for the US dollar one in which we see inflation decelerating and US treasury yields perhaps easing a bit lower, but in which we also see risk sentiment weak as equity and bond markets are starting to decouple, as equities begin to fret recession rather than being merely led around by the nose by the treasury market. If that is the scenario we get and the USD weakens, then I think USD weakness can extend a bit more forcefully for a time, if not, then the USD could yet reject this breakdown attempt. I withhold judgement for now, as the USD has not yet broken down. But the easiest thing to do is to simply judge what happens on the charts in the wake of the data release (not knee-jerk, but how the day closes), as we have a number of clear-cut levels in play for the major USD pairs. Chart: USDJPY USDJPY has traditionally been a strong focus over US data surprises over the years and will be in focus with the macro event risk of the week, if not the month, coming up tomorrow in the form of the US October CPI release. Reaction in yields and risk sentiment are both worth watching as I have cooked up some thoughts of late (see above) on whether US treasury markets and equity markets could move out of correlation, i.e., that risk sentiment may have a hard time celebrating a drop in treasury yields. So, a weaker than expected US CPI report together with falling treasury yields, but also together with weak risk sentiment could provide the strongest support for the JPY here in a broad sense, though it might be felt more forcefully in JPY crosses. Regardless, if the JPY finds bids tomorrow, the 145.00 level will be a huge focus in USDJPY. Table: FX Board of G10 and CNH trend evolution and strength.The USD is clearly down, but will only be out on sticking further weakness in the wake of the US CPI release tomorrow. Elsewhere, note the sterling momentum turning badly south and SEK trying to look higher, not a surprise given European equities having rallied vertically for weeks – looking a bit much. Table: FX Board Trend Scoreboard for individual pairs.EURGBP is one to focus on around the 0.8800 level. JPY crosses are interesting in places as well as yields have consolidated a bit lower – look at the 165 area in GBPJPY, for example. But it is all about key USD levels after the US data tomorrow, including 1.0100 in EURUSD, 0.6522 in AUDUSD, etc… Upcoming Economic Calendar Highlights 1200 – Mexico Oct. CPI 1300 – UK Bank of England’s Haskel to speak 1530 – EIA's Weekly Crude and Fuel Stock Report 1630 – UK Bank of England’s Cunliffe to speak 1700 – World Agriculture Supply and Demand Estimates (WASDE) 0001 – UK Oct. RICS House Price Balance 0100 – US Fed’s Kashkari (Voter 2023) to speak   Source: https://www.home.saxo/content/articles/forex/fx-update-usd-on-edge-ahead-of-the-us-cpi-data-tomorrow-09112022
Oanda Podcast: US Jobs Report, SVB Financial Fallout And More

Republicans Will Call On Reducing Budget Spending On Social Security And Medical Care

InstaForex Analysis InstaForex Analysis 09.11.2022 13:33
The euro/dollar pair is trying to settle above the resistance level of 1.0060, which is the upper border of the Bollinger Bands indicator on the D1 timeframe. If the pair succeeds, it will definitely resume a long-term bull run. However, the midterm election may limit its upside potential. Fundamental factors of political nature tend to have a short-lived impact on Forex. Traders are now assessing the possibility of a split in Congress. This is why the EUR/USD pair is unlikely to settle above the parity level for a long time. Buyers need stronger drivers to push the pair higher. Apart from that, the US will unveil inflation data tomorrow, which may drastically change the trajectory of the pair. Let's discuss the main political event of this week and of the month, namely the preliminary results of the midterm elections. Overall, we can draw some conclusions. Before the vote, many analysts assumed that Republicans would wrestle control over the Senate and the House of Representatives. Apparently, the battle will last until December. According to preliminary estimates, the ratio of seats in the Senate is 50:49 in favor of the Democratic Party after the second round in Georgia and a mixed result in Nevada. It means that Democrats may retain control even if Republicans win in Georgia but lose in Nevada. In this case, the situation of the last two years may repeat itself. In the previous elections, Republicans and Democrats had 50 seats each in the Senate. Kamala Harris, the Vice President of the United States, supports the Democratic party. She had the decisive vote back then. Under certain circumstances, if the above-mentioned states do not give their votes to Republicans, there will be no change in power in the Senate for the next two years. As for the House of Representatives, as widely expected, Republicans won the majority of seats. However, it hardly surprised anyone. The Republican Party has approximately 223-225 mandates, while Democrats have 210-212. Republicans have already won the majority of seats (218). So, Democrats lost the battle for the House of Representatives. Although the Republican Party failed to regain the upper hand in both chambers, it definitely took control of the House of Representatives. When it comes to the gubernatorial election, the situation is as follows: Democrats won 21 seats (they won in two states) and Republicans won 24 seats (they lost in two states). Therefore, it is quite logical why traders are alert now. For almost two years, the House of Representatives, the Senate, and the White House have worked in unison. There were almost no conflicts. Now, the situation will change sharply as Republicans will call on reducing budget spending on social security and medical care. otherwise, they could block an increase in the debt limit. Among the possible risks of a split Congress is a shutdown. It refers to a funding gap period that causes a full or partial shutdown of federal government operations when the government fails to pass funding legislation for its next fiscal year The greenback is also facing bearish pressure. In my opinion, this political driver will have a short-term influence on the market. No economic or political changes will happen in the foreseeable future because the Congress with its new members will begin work only in January 2023. As a rule, market participants rarely focus on long-term hypothetical events that could occur in several weeks or months. Apart from that, Democrats still have leverage in the House of Representatives (the filibuster tactic, the right of the President's veto, the Republicans' inability to revoke the veto, etc.), including possible control over the Senate. However, Democrats will have the same leverage if they lose control over the upper chamber. Therefore, there will hardly be crucial shifts in the political situation in the United States. Do not forget about tomorrow's release of inflation data. If the report is positive, traders will switch their attention to the Fed. They will be waiting for hints on whether the Fed will raise the key rate by 75 or 50 basis points. It is rather risky to open short and long positions in times of market uncertainty. Therefore, I would recommend you today to take a wait-and-see approach e and wait for the release of inflation data.   Relevance up to 12:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326653
Saxo Bank Podcast: The Bank Of Japan Meeting And More

The Bank Of Japan Remains An Outlier Amongst The Major Central Banks

Kenny Fisher Kenny Fisher 09.11.2022 13:37
The Japanese yen has steadied after posting strong gains on Tuesday. In the European session, USD/JPY is trading at 145.67, up 0.03%. Japan recorded stronger-than-expected gains in household spending and retail sales, but it’s questionable whether this positive trend will continue. Inflation hit 3% in September for the first time in over 30 years, raising concerns, but inflation is still at levels that other major central banks can only dream of.  The government is hoping that the finance package that was announced on Tuesday will reduce inflation and boost growth. Still, the outlook for the yen, which has been on a prolonged downturn against the dollar, remains grim. The Bank of Japan is unlikely to veer from its ultra-loose policy, despite the declining yen and rising inflation, unless inflation continues to rise. The Federal Reserve is expected to deliver additional oversize rate hikes, which will widen the US/Japan rate differential and likely push the dollar lower. At the BoJ’s meeting in late October, it was business as usual as policy makers maintained their dovish guidance. The BoJ remains an outlier amongst the major central banks, with a growing realization that any changes in policy will have to wait until Governor Kuroda’s term ends in April 2023. In the US, the dust from the mid-term election hasn’t yet settled. The Republicans are expected to retake the House, but with a very slim majority, while the makeup of the Senate is unlikely to be determined for several weeks. The election hasn’t had much impact on the movement of the US dollar, as investors are focussed on the US inflation report on Thursday.   USD/JPY Technical There is resistance at 147.07 and 148.45 145.28 and 144.20 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Crude decreases amid risk boosting greenback and unclear situation in China

Marc Chandler talks midterm election, greenback, crude oil and much more

Marc Chandler Marc Chandler 09.11.2022 23:54
November 09, 2022  $USD, Brazil, China, Currency Movement, ECB, EMU, Federal Reserve Poland, Japan, Mexico Overview: It is difficult to see the impact of the US midterm election in the immediate aftermath. The dollar is stronger against all the major currencies, but this seems to be mostly position adjusting ahead of tomorrow’s CPI report after a pullback in recent days. While Japanese, Chinese and Hong Kong shares fell, strong foreign buying lifted Taiwan’s shares by nearly 2.2% and South Korea’s Kospi rose more than 1%.  The Stoxx 600 in Europe is snapping a three-day advance and its 0.85% decline is giving back yesterday’s gains in full.  US equity futures are trading with a heavier bias.  US and UK 10-year yields are a couple basis points higher, while most European benchmark yields are off 1-3 bp.  Among the G10 currencies, sterling and the New Zealand dollar are bearing the brunt of the greenback’s recovery, while the Japanese yen and Swiss franc are the most resilient. Among emerging market currencies, the South Korean won continues atop the leaders’ board.  Central European currencies are among the weakest. Firmer Hungarian inflation (21.1% year-over-year) is dragging the forint lower, and there is some uncertainty ahead of Poland’s central bank meeting outcome that is weighing on the zloty. Gold jumped 2.2% yesterday to move above $1700 for the first time in a month and is holding above there today as it pulls back a bit. December WTI fell 3% yesterday, its biggest loss since mid-October and follow-through selling pushed it to around $87.25. It settled above $91 last week. A few weeks delay in reopening the Freeport export platform sent US natgas prices down 11.6% yesterday and there has been a little additional selling today. Europe’s benchmark rose 4.7% yesterday and is slightly higher today. Regulators extended support to the Chinese property market, and this may have held iron ore and extended its rebound for the seventh consecutive session.  On the other hand, December copper is giving back half of yesterday’s 2.2% gain.  December wheat is trading softer ahead of the USDA’s World Agricultural Supply and Demand estimates.   Asia Pacific Japan reported a larger than expected current account surplus in September but a larger than expected trade deficit.  The current account rose to JPY909 bln from a revised JPY694.2 bln in August (initially reported as JPY58.9 bln).  The trade balance, on a balance-of-payments basis, was JPY1.759 trillion.  The median forecast in Bloomberg's survey was for a JPY1.684 trillion shortfall.  Japan's current account report includes some details about Japanese foreign investment.  We note that after buying US Treasuries in August for the first time in 10 months, Japanese investors returned to the sell side (`JPY2.4 trillion or ~$16.5 bln).  While Japanese investors sold most other sovereign bonds in September, they bought a small amount of Swedish bonds.  The dollar value of Japan's reserves fell by $43 bln last month.  This is about what one would expect given the intervention (~JPY6.3 trillion). Other aspects of valuation adjustments look to have largely netted out.  Most other reserve currencies appreciated against the dollar while bond prices tended to have retreated.  Since the end of last year, the dollar value of Japan's reserves has fallen by about $200.5 bln.  Most of the decline reflects the sharp decline in bond prices this year and the strength of the dollar against other reserve currencies.   China's October producer prices fell 1.3% year-over-year, the first negative print in nearly two years.  Part of the drop in PPI can be explained by the base effect and the surge in prices last year after shutdowns in the US, Europe, and elsewhere ended.  In addition, commodity prices have eased this year.  The year-over-year decline in construction commodities intensified last month and energy prices (oil and coal) softened.  China's consumer inflation slowed to 2.1% in October from 2.8%. Food inflation, the main driver of Chinese CPI slowed from 8.8% in September to 7.0%, though pork prices rose.  Core CPI was unchanged at 0.6%. It has been at or below 1% for seven consecutive months. The easing of service prices (0.4% from 0.5%) is thought to reflect weaker demand related to the zero-Covid policy.    Many observers are focused on China's zero-Covid policy that they may be missing new efforts to bolster the economy.  Just like the typically LDP policy thrust is for easy monetary and easy fiscal policy, new lending is the go-to-answer for China.  Large banks are under pressure to boost lending starting now in Q4 to manufacturing and infrastructure projects.  At the same time, local governments are being allocated quotas for 2023 infrastructure bonds.  They will launch in January and ostensibly will be used for key prospects in transportation, new/green energy, and infrastructure.  Consistent with this could be another cut in reserve requirements.  There are two other reasons why the reserve ratio may cut in addition to supporting the economy.  First, some are identifying the tightening of the ratio of reserves to deposits.  Cutting reserves would help address that.  Second, this month, there are around CNY1 trillion of maturing loans from the PBOC to the commercial banks.  A 50 bp cut in reserve requirements frees up that amount.  The PBOC has also been a bit stingy lately in its reverse repo operations.  The funds could be rolling into the Medium-Term Lending Facility, where the rate and volume is expected to be announced in the middle of next week.   The JPY145 level is a key support for the dollar.  The greenback has not traded below there since October 7. It has been approached several times and has held, though the reaction bounce has become more muted.  A convincing break could quickly see JPY143.50-JPY144.00.  Initial resistance is seen in the JPY146.00-20 area.  The Australian dollar is hovering around yesterday's settlement a little above $0.6500 after reaching its best level yesterday since late September (~$0.6550).  Initial support is seen around $0.6480 and near $0.6445.  The greenback continues to trade well within the broad range against the Chinese yuan seen last Friday amid speculation that the zero-Covid policy was going to be relaxed.  It is within yesterday's CNY7.2210-CNY7.2625 range. The US dollar also remains well below the CNY7.3275 peak recorded last week.  The PBOC set the dollar's reference rate at CNY7.2189 compared with the projection (median in Bloomberg's survey) of CNY7.2275.   Europe While the market is focused on the Fed and where its terminal rate may be, yields in Europe have risen quickly.  The yield on the two-year German bund has risen from about 1.95% on November 1 to 2.35% yesterday, though it has pulled back today. The yield is rose for the past six sessions. As prices gapped lower yesterday, the yield gapped higher, and it is the highest since 2008. The gap has not been filled today. The US 2-year premium over Germany posted a two-month peak when the Fed met last week near 2.65%.  It has fallen every session through yesterday when it dipped below 2.40%.  It had not traded below 2.40% since late September, the 2.35% area may be more important.  It is the 200-day moving average and the US premium has not been below the average since June 2021.   We looked for the rate differential to peak before the dollar peaked against the euro.  Its two-year premium peaked three months ago near 2.77%.  The euro bottomed, so far, in late September around $0.9535.  We lean to that being an important low and note that the euro's downtrend line, drawn off he February, March, June, August, and September highs was violated last month but it was not sustained.  The euro moved back above it on Friday after the jobs data and amid talk of China changing its Covid policy.  The trendline comes today near $0.9850.   The ECB's monthly survey found consumer expectations for one-year inflation edged up to 5.1% in September from 5.0% in August.  The median three-year view was steady at 3%.  Pessimism over the economic outlook increased as a deeper contraction is now expected over the next 12 months (-2.4% from -1.7%).  Separately, a study by the Irish central bank and Indeed, found that wages were 5.2% higher than a year ago in October but appear to have steadied.   Yesterday, the euro took out the October high by 1/100 of a cent as it extended its rally to about 3.5 cents over the past three days.  The euro held again, slightly below $1.01. Today it is consolidating in about a fifth of a cent on either side of $1.0065. It approached support, which we peg near the $1.0035 high seen Monday, in the European morning. We had expected the dollar to trade stronger ahead of tomorrow's US CPI figures.  Sterling rose to almost $1.16 yesterday.  It had risen 4.5 cents over the past three sessions but today has slipped through yesterday's low near $1.1430 in European dealings but found a bid near $1.1420. A break of $1.1400 could see a test on $1.1375. A break of that would be disappointing, though the week's low in another cent lower.  Lastly, the central bank of Poland meets, and the market is mixed about the outlook.  It paused last month over three dissents and year-over-year CPI rose to a new cyclical high of 17.9% in October.  A slight dovish majority led by central bank Governor Glapinski may prevail.  In any case, Poland is seen to be at or near its terminal rate.   America No fewer than nine Fed officials talk between today and Thursday.  Williams, Barkin, and Kashkari speak today, but Williams has already spoken in Switzerland, and Kashkari speaks after the markets close.  That leaves Barkin.  The president of the Richmond Fed, Barkin does not have a vote on the FOMC this year and is a centrist.  Barkin is in favor of slowing the pace down while recognizing the Fed’s work is not done.  Last week, he said that is it conceivable that the terminal rate is above 5%, but that is not a plan, Barkin admitted.  The takeaway for him from last week's employment report is that the labor market remains tight.  Barkin also explained that inflation has not eased much because business have not met much resistance from customers or competitors.  Some businesses, he said, are still announcing price increases.   Mexico reports its October CPI figures today ahead of Banxico's rate decision tomorrow.  The monthly report is expected to show a slower year-over-year rate (8.45% vs. 8.70% in August and September).  The core rate is a bit stickier and made a new cyclical higher in September (8.28%) and may have extend it toward 8.45% last month.  Almost regardless of the print, Mexico is widely expected to hike its target rates by 75 bp, matching the Fed's move.  The new rate will be 10%.  Mexico is one of the few countries that have a target rate above the current inflation rate.  The swaps market sees the terminal rate in Mexico at around 10.80%.  There is some risk, we subjectively put it at around 1-in-3 that there is some discussion of some greater degrees of freedom, even if limited, from Fed policy going forward.  The peso is near its strongest level since March 2020.   We have suggested that the US dollar has formed a large head and shoulder pattern against the Canadian dollar broke the neckline at CAD1.35 last week.  It projects toward CAD1.30.  Yesterday, the greenback briefly traded below CAD1.34 for the first time since September 21.  Ideally, in today's consolidation, it will hold below CAD1.3500.  The US dollar's downside momentum against the Mexican peso stalled in front of MXN19.43 over the past two sessions.  It is bid today above MXN19.57.  Initial resistance maybe encountered in the MXN19.60 area.  The dollar jumped to almost BRL5.25 yesterday after approaching BRL5.02 on Monday, its lowest level since last August.  However, it reversed to settle a little below BRL5.15.  The market appears a bit nervous about the composition of the new government and its fiscal plans.       Disclaimer
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The Euro (EUR) Is At The Highest Levels But Can Drop

InstaForex Analysis InstaForex Analysis 10.11.2022 08:02
EUR USD The euro is at the upper limit of the range. The euro is staying at the highest levels of the week - but there is a possibility of a fall. A new round of Federal Reserve rate hikes is still ahead - +0.75% is quite likely. There is a good option to sell euros from the current one hundred with a stop of 50-70 points with possible sales higher in case of local growth with targets for a drop of 150-200 points. Relevance up to 16:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326687
The AUD/USD Pair’s Downside Remains Off The Table

The AUD/USD Pair's Bulls Could Not Overcome The Upper Line

InstaForex Analysis InstaForex Analysis 10.11.2022 08:06
The Australian dollar is now confidently losing its positions after a rapid rise to the middle of the 65th figure. On Monday, the aussie hit a new 2.5-month price high, but failed to settle above the upper line of the Bollinger Bands indicator on the daily chart, which corresponds to 0.6550. In general, AUD/USD bulls owe their fleeting success solely to the US currency. The temporary weakening of the greenback allowed the bulls to seize the initiative and develop a corrective 250-point growth. But the current situation has a reverse side of the coin: as soon as the dollar "came to its senses", the aussie was forced to follow it. The aussie does not have its own arguments for a counteroffensive, so going long on the pair looks a priori more risky than selling. For all its problems, the US currency has its "constant" advantages over the aussie, which are primarily expressed in the uncorrelation of the Federal Reserve and Reserve Bank of Australia rates. While the RBA slowed down the pace of monetary policy tightening back in September, the Fed is still hesitating on this issue. Moreover, the US central bank, following the results of the last meeting, announced that the current rate hike cycle will end at more distant positions relative to previous forecasts. In layman's terms, this means that the Fed will step over the 5% mark, raising the rate to at least 5.25%. Therefore, the very fact of slowing down the rate of increase in this case plays a secondary role, especially in the context of the AUD/USD pair. Let me remind you that after a series of 50-point hikes, the Australian central bank slowed down, and at the two previous meetings (in September and November) it raised the rate in 25-point increments. RBA Governor Philip Lowe said that the central bank's board "considered it appropriate to raise rates at a slower pace." Moreover, commenting on the results of the November meeting, he noted that the members of the central bank discussed, among other things, the consequences of refusing to raise rates. Thus, he allowed a pause in the process of tightening monetary policy. And although it is too early to talk about this at the moment, the results of the last RBA meeting disappointed AUD/USD bulls. The aussie dropped sharply, reaching 0.6275. And if the US currency had not weakened throughout the market, the pair would have systematically plunged to the area of the 60th figure. The fundamental picture of the AUD/USD pair is now distorted by political factors. The midterm elections to the US Congress, following which the Republicans are definitely winning the lower house from the Democrats (the fight for the Senate is still ongoing), put pressure on the greenback. But, as a rule, political factors flare up brightly, but fade quickly. Therefore, longs for the AUD/USD pair should not be trusted: in the very near future, the market will switch to "classic" fundamental factors, especially considering Wednesday's release. Let me remind you that key data on the growth of inflation in the United States will be published on Thursday. According to preliminary forecasts, the general consumer price index in October increased by 8.0% (y/y), and the core index – by 6.5% (y/y). Even if all components come out at the predicted level, the dollar may significantly strengthen its position, as the growth of inflation will demonstrate an extremely weak rate of slowdown. If the inflation report turns out to be in the green zone, we may witness another dollar rally, including for the AUD/USD pair. However, some other fundamental factors also play in favor of the bearish scenario. For example, the latest news from China does not contribute to the development of the upward movement. This week it became known that China's trade surplus increased to $85.15 billion (from $84.74 billion), while market expectations were at $95 billion. Also, China denied rumors that the authorities may weaken the strictest measures to counter the spread of coronavirus. According to representatives of the National Health Commission of the People's Republic of China, Beijing's "zero tolerance" approach to the coronavirus remains the main strategy for combating COVID-19. Australia is China's largest trading partner, so this information plays against the aussie. From a technical perspective, AUD/USD bulls could not overcome the upper line of the Bollinger Bands indicator on the daily chart, which corresponds to the 0.6550 mark. At the same time, the price is located under the Kumo cloud on the D1 timeframe. The pair will still retain the potential to decline, at least to the 0.6360 mark: at this price point, the average line of the Bollinger Bands indicator coincides with the Kijun-sen line. This is an intermediate support level, while the main price barrier is still the 0.6200 mark - this is the lower line of the Bollinger Bands indicator on the same timeframe.   Relevance up to 17:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326689
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The EUR/USD Pair Is Likely To Continue Its Unstable Dynamics

InstaForex Analysis InstaForex Analysis 10.11.2022 08:10
On Wednesday, the greenback was recovering from three consecutive days of rollbacks, while votes in the congressional elections continue to be counted in America. Over the past three days, the dollar has declined by more than 3% against its main competitors, including the euro. During the same time, the S&P 500 index gained about 2.8%. Market participants preferred risky assets amid increased confidence that Republicans would regain a majority in at least one or even both chambers of Congress in the midterm elections. "The idea that the Republicans will regain the House of Representatives has caught on well in the market. We're not saying it won't be good for stocks, or we won't have a few pleasant days, or it won't provide some stability. But we think that in order for the S&P 500 to really rise, Republicans also need to regain the Senate," said strategists at RBC Capital Markets. Apparently, investors were putting in quotes a scenario according to which the outcome of the midterm elections would be either a so-called "split government" (when the executive power is controlled by a Democratic president and the legislative power is controlled by Republicans), or a divided Congress (if Republicans gain control in the lower house and Democrats retain a slight advantage in the upper house). It is assumed that such an outcome will have negative consequences for the dollar and positive for stocks. According to RBC Capital Markets, the average annual return of the S&P 500 with a divided Congress is 14%, and with a Republican-controlled parliament and a Democratic president – 13%. The yield of the index under the full control of the Democrats is 10%. According to experts, a possible political impasse in Washington may exclude US President Joe Biden's proposed increase in taxes on corporate income and wealthy citizens. At the same time, the prospect of another dispute about raising the US debt ceiling is more important. The Republican Congress can put an end to fiscal stimulus and make it a little easier for the Federal Reserve to curb inflation, FS Investments analysts say. "If Republicans do get some power in the House and Senate, they could make raising the federal debt ceiling a really difficult process," Ingalls & Snyder analysts said. US politics is once again becoming a burning topic in connection with the midterm elections. Republicans are on track to achieve a majority in the House of Representatives, while Democrats may lose the Senate. In this case, the shares may rise, which will harm the dollar, Credit Suisse believes. "Although the final results of the midterm elections may be known only in a few days, it is highly likely that the Democrats will lose control of the House of Representatives, and possibly the Senate. This will lead to another phase of the "split government". We are inclined to believe that the likely result of such an outcome will be a strengthening of stocks," the bank's economists said. "Since the growth of stocks also usually goes hand in hand with the weakening of the dollar, it is logical to expect that the strengthening phase of stocks associated with the midterm elections may damage the greenback," they added. The political impasse in Washington will dispel investors' concerns about increased budget spending, exacerbating inflation, and increase the chances of the party freezing spending with the help of the debt ceiling. This will facilitate the work of the Fed, help stocks extend their recent growth, and also restrain the yield of US Treasury bonds and the dollar, analysts at Morgan Stanley believe. Meanwhile, the unexpected victory of the Democrats, according to experts, will lead to an increase in the yield of treasuries, a strengthening of the dollar and will put pressure on stocks, since a possible budget expansion will require a greater increase in rates from the Fed. Berenberg analysts believe that the election results will not have any significant impact on fiscal or monetary policy in the United States, and that the Fed's actions to curb inflation will continue to set the tone for the markets. The S&P 500 index may fall by another 16% before it reaches the "bottom" in nine months after the Fed refuses to raise interest rates, UBS strategists say. They expect that the slowdown in economic growth in the US will continue to pull stocks down until the second quarter. According to the bank's forecast, in 2023, global GDP will grow by only 2.1% year-on-year, which will be the third lowest in the last three decades. "Our forecast is approaching something like a 'global recession,'" UBS economists said. "For the US, we now expect almost zero growth in both 2023 and 2024, and a recession will begin in 2023," they added. According to experts, this economic downturn is likely to lead to a period of disinflation. Given that the US central bank has quickly raised interest rates to try to curb inflation, which has reached a 40-year high, this would give policymakers the opportunity to switch to lowering rates to stimulate economic growth, according to UBS. "In combination with the rapid fall in inflation, the Fed will reduce the key rate from the current 4% to 1.25% by the beginning of 2024," the bank's analysts said. "The speed of this reversal will stimulate every asset class next year," they believe. According to UBS estimates, expectations of a Fed reversal could raise the S&P 500 to 3,900 points by the end of 2023. The bank also predicted that future rate cuts would cause the yield on 10-year treasuries to drop by 155 basis points to 2.65%, and the dollar would slowly fall against a basket of leading currencies. US stock indexes showed a steady rise on Tuesday. Thus, the S&P 500 rose by 0.56% to 3,828.11 points. Meanwhile, the greenback fell in price against its main competitors by almost 0.5%, sinking to multi-week lows around 109.25 points. The market's increased hopes that Republicans would gain a majority in the Senate and the House of Representatives allowed risk appetite to dominate financial markets, as a result of which the safe dollar lost demand. Increased selling pressure on the US currency spurred the EUR/USD rally, as a result of which the pair reached the highest values in almost two months in the area of 1.0090. However, on Wednesday, investors were forced to turn to the defensive dollar again, since there was no clarity as to who would control Congress following the midterm elections. It is possible that the final results will have to wait a few days or even weeks, as it was in 2020. As you know, markets most of all do not like uncertainty. Key Wall Street indicators are trading in negative territory on Wednesday. In particular, the S&P is losing about 0.9%. Meanwhile, the greenback attracted bulls and tested the area just above 110. Amid renewed demand for the dollar, the EUR/USD pair lost its bullish momentum. Cautious market sentiment limits the pair's growth opportunities while investors wait for the final results of the midterm elections in America. In addition, important data on consumer inflation in the United States are looming on the horizon, which will be published on Thursday. Recently, the greenback has been under downward pressure from expectations that the Fed will soon abandon a tough rate hike cycle, possibly as early as December. However, a surprise in the form of an increase in inflation may change this opinion and contribute to the strengthening of the US currency. "The worst outcome for the markets will be core inflation, which will exceed expectations not at the expense of housing, which is easy to write off as a lag, but due to a wide range of rapidly rising prices in various categories. Given that expectations of a Fed rate hike by 75 bps next month have already been largely played back, there is a risk that such a surprise will force investors to re-evaluate at least a 50% probability of such an outcome, which will put pressure on risky assets and lead to a rise in the dollar," Credit Suisse economists said. Markets interpret any weaker data in favor of a reversal of the Fed's policy, pushing EUR/USD up. However, Thursday's high value of the consumer price index (CPI) in the US may send the pair down, Nordea believes. "Of course, the recent fluctuations in EUR/USD contradict our opinion about the upcoming strengthening of the dollar, but we believe that the recent price movements are more a reflection of tactical positioning, rather than changes in fundamental indicators," the bank's strategists said. "The Fed has clearly stated that a pause in raising rates is not discussed as long as inflation is high. Fighting inflation means raising rates and even more pain for risky assets and the real economy. It seems that investors in the stock markets refuse to take this into account and interpret any softer data in favor of a reversal of the US central bank, which leads to an increase in risk appetite and a weakening of the dollar. Eventually, the situation should change, and investors will feel the pain again and remember the old adage: "don't fight the Fed," they noted. "The US inflation report is the next key indicator in the short term. Higher-than-expected CPI data are a trigger for strengthening the dollar (6 out of 10 recent inflation releases this year), and this may well happen this week, especially if players hold a net short position on the US currency. In the future, EUR/USD is likely to continue its unstable dynamics, but we still adhere to our opinion that the pair will decline to the area of 0.9500 by the end of this year," Nordea said.   Relevance up to 18:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/326693
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Cable Market (GBP/USD) Does Not Stand Still And Is Traded Volatilely

InstaForex Analysis InstaForex Analysis 10.11.2022 08:18
Analysis of Wednesday's deals: 30M chart of the GBP/USD pair The GBP/USD pair started a rather powerful fall on Wednesday, which is already in line with the real fundamental and macroeconomic picture. Recall that we consider the pound's growth in the last few days absolutely illogical and unreasonable. If we are right, then the downward movement has now begun to offset the injustice. There was not a single significant event on Wednesday, nor Tuesday, nor on Monday in the UK and the US that could be attributed to the movement of the pound/dollar pair. Moreover, on Monday, the pair's quotes settled above the descending trend line, and it went below this line on Wednesday. Everything goes to the fact that on higher timeframes we will see "swings", and on lower timeframes these will be trends for 3-4 days. The US currency may continue to grow on Thursday if the US inflation report turns out to be weak. The consumer price index should slow down a bit so that the market finds grounds to buy the dollar. To be clear, the weaker inflation falls (or does not fall at all), the higher the likelihood of a longer and stronger tightening of the Federal Reserve's monetary policy becomes, which is always good for the dollar. 5M chart of the GBP/USD pair There were plenty of trading signals on the 5-minute timeframe on Wednesday. Let's try to figure them out. First, the price bounced twice from the 1.1550 level. Neither in the first nor in the second case, it could not go down even 20 points. Therefore, the short position closed at a loss when the price moved above 1.1550. This departure could be regarded as a signal to buy, but it also turned out to be false and also closed at a loss. The third signal near the 1.1550 level turned out to be correct, but it just shouldn't have been worked out, since the first two signals were false. As a result, the next signal was only near the level of 1.1479. The price overcame it and dropped to 1.1435, so there was a profit of about 15 pips. Further, the price rebounded from 1.1435, traders should have opened longs, but in this case, they failed to make a profit, as the price did not reach the target level of 1.1479 by 4 points and returned back to 1.1435. The next sell signal is also false, but we managed to place a Stop Loss on it, as the pair went down more than 20 points. New a sell signal near 1.1435 and this time 42 pips profit as the pair hit the 1.1356 target perfectly. The last signal was formed too late in time, but was profitable. As a result, novice traders could end Wednesday by gaining a small profit. How to trade on Thursday: The pound/dollar pair maintains a downward trend on the 30-minute TF, but the whole movement already looks like a "swing". This week there was no fundamental or other background, however, the pair does not stand still and is traded rather volatilely. We expect a new fall in the pound. On the 5-minute TF on Thursday it is recommended to trade at the levels of 1.1146, 1.1200-1.1211-1.1236, 1.1356, 1.1435, 1.1479, 1.1550, 1.1608, 1.1648. When the price passes after opening a position in the right direction for 20 points, Stop Loss should be set to breakeven. No important reports or other events scheduled for Thursday in the UK, but the inflation report will be released in the United States, which will become the "principle of the day". The pair may continue to trade in a very volatile and trendy manner. Basic rules of the trading system: 1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal. 2) If two or more positions were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored. 3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading. 4) Trade positions are opened in the time period between the beginning of the European session and until the middle of the US one, when all positions must be closed manually. 5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance. On the chart: Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines). Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.     Relevance up to 19:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326699
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

The Number Of Securities That Fell Exceeded The Number Of Those That Closed In Positive Territory

InstaForex Analysis InstaForex Analysis 10.11.2022 08:25
At the close on the New York Stock Exchange, the Dow Jones fell 1.95%, the S&P 500 fell 2.08%, and the NASDAQ Composite index fell 2.48%. Dow Jones Merck & Company Inc was the top gainer among the components of the Dow Jones in today's trading, up 0.09 points (0.09%) to close at 101.59. Quotes of McDonald's Corporation fell by 0.61 points (0.22%) to end trading at 277.79. Procter & Gamble Company lost 0.33 points or 0.24% to close at 136.48. The least gainers were Walt Disney Company, which fell 13.15 points or 13.16% to end the session at 86.75. Chevron Corp was up 4.00% or 7.41 points to close at 177.93 while Dow Inc was down 3.97% or 1.97 points to close at 47.68. . S&P 500 Leading gainers among the S&P 500 index components in today's trading were Akamai Technologies Inc, which rose 6.19% to hit 89.08, Gen Digital Inc, which gained 6.01% to close at 22.92, and also shares of Bio-Rad Laboratories Inc, which rose 5.67% to end the session at 403.49. The least gainer was Walt Disney Company, which shed 13.16% to close at 86.75. Shares of Occidental Petroleum Corporation shed 9.22% to end the session at 67.93. Quotes Norwegian Cruise Line Holdings Ltd fell in price by 8.74% to 15.77. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Merrimack Pharmaceuticals Inc, which rose 212.75% to 12.51, Outset Medical Inc, which gained 29.90% to close at 14.90, and also shares of Neurobo Pharmaceuticals Inc, which rose 29.60% to close the session at 1.62. The least gainers were Clovis Oncology Inc, which shed 71.62% to close at 0.28. Shares of Telos Corp lost 68.84% and ended the session at 3.44. Quotes of Athersys Inc decreased in price by 56.45% to 0.56. Numbers On the New York Stock Exchange, the number of securities that fell in price (2539) exceeded the number of those that closed in positive territory (564), while quotes of 97 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,848 stocks fell, 900 rose, and 221 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 2.15% to 9/26. Gold Gold futures for December delivery lost 0.44% or 7.60 to hit $1.00 a troy ounce. In other commodities, WTI crude for December delivery fell 3.77%, or 3.35, to $85.56 a barrel. Futures for Brent crude for January delivery fell 3.15%, or 3.00, to $92.36 a barrel. Forex Meanwhile, in the Forex market, EUR/USD was down 0.62% to hit 1.00, while USD/JPY was up 0.52% to hit 146.41. Futures on the USD index rose 0.75% to 110.37.   Relevance up to 03:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/300382
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The Short-Term Downward Trend Of The AUD/USD Pair Can Be Stable

InstaForex Analysis InstaForex Analysis 10.11.2022 08:30
So, the Australian dollar, as we expected, completed a false exit above the MACD indicator line on the daily chart. Yesterday, after re-working out the target range of 0.6514/32, the price went under the target level of 0.6453, now it is approaching 0.6392. There are no price barriers along the way. Further, after settling below 0.6392, the price may move to the nearest price channel line to the level of 0.6211, the low of October 21st. On the four-hour chart, the price settled below the MACD line yesterday, Marlin is falling in negative territory at a classic 45-degree angle, the short-term downward trend can be called stable. The aussie's fall is supported by adjacent markets. Oil is getting cheaper by 0.1% in today's Asian session, tomorrow the UK is expected to release a weak GDP for the 3rd quarter. Relevance up to 03:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326711
The Data May Keep The British Pound (GBP) From Rising

The British Pound (GBP) Became The Leader Of The Decrease

InstaForex Analysis InstaForex Analysis 10.11.2022 08:33
Yesterday, the British pound became the leader of the fall: -1.54%, while the dollar index rose by 0.74%. The price is approaching the support of the MACD line (1.1312), having overcome it, it will be able to continue its decline to 1.1170. Today, the US is expected to ease inflationary pressure in October estimates (CPI 8.0% y/y versus 8.2% y/y in September), which may slow down the decline, and tomorrow the British GDP forecasts could show a drop of 0.5%. The Marlin Oscillator is already preparing to move into negative territory this time. The pound is in a completely downward position on the four-hour chart - the price is developing under the MACD indicator line, the signal line of the Marlin Oscillator has overcome the zero line from top to bottom and ended up in the territory of a downward trend. Now the price needs to accumulate strength before attacking 1.1312.   Relevance up to 03:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326713
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

The Price Of The EUR/USD Pair Is Still In An Upward Position

InstaForex Analysis InstaForex Analysis 10.11.2022 08:41
The elections to the American Congress turned out to be far from being as tragic for the Democrats as the US and other world media predicted. Seats in the Senate were distributed equally 48/48. There will be re-elections in several states in December to determine the winners. The seats in the lower house this morning were distributed as follows: 182 for the Democrats, 205 for the Republicans. As a result, conflicts are already brewing in the Republican camp, a number of functionaries are demanding that Trump be removed from influence on the party, and several Republican governors have already spoken out on their nominations for the presidency (DeSantis, Hogan). Well, the markets continued their fall: S&P 500 -2.08%, euro -0.58%, oil (CL) -3.42%. A divergence has formed with the Marlin Oscillator on the daily chart. The price returned under the level of 1.0051, where it is most likely to close the day. Thus, the nearest target for the euro is the level of 0.9950. Further, we are waiting for the advance to 0.9864. The price is still in an upward position on the four-hour chart, as the development takes place above the indicator lines and Marlin is in the growth zone. A bit above the support of 0.9950 is the MACD line, which will make it difficult and slow down the price to work out this support.   Relevance up to 03:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326715
The Euro Will Probably Continue Its Upward Movement In The Near Future

The ECB Will Not Bring The Situation To A Critical Mass

InstaForex Analysis InstaForex Analysis 10.11.2022 08:44
On Wednesday, the EUR/USD currency pair began a new round of corrective movement while failing to update its previous local maximum. We've said before why this is important. If the previous highs are not updated, then there is no upward trend. Thus, a price reversal near the level of 1.0010 followed by a fall to the moving average line is very bad for the euro currency. However, we have already talked about the illogical growth of the pair in the last few days. We believe that the events of last week should have provoked a new powerful strengthening of the US currency, but not the growth of the European one. From our point of view, non-farms were strong enough, and the unemployment rate did not rise critically to sound the alarm and shout about a recession. Moreover, the recession itself may still be avoided. Some forecasts say the probability of its occurrence in the coming year is no more than 35%. And a year later, the Fed may already start lowering the key rate, which will slowly accelerate the economy again. Based on this, we believe the most logical development would be a new fall in the euro. Recall that Alan Greenspan, the former head of the Fed, believes that the US dollar will strengthen next year. Goldman Sachs lowered its 3-month forecast for the euro/dollar pair from 0.9700 to 0.9400. Thus, many significant experts do not believe that now the European currency will move to the formation of a long-term uptrend. We fully agree with this assessment because we also do not see how the euro can increase over a long distance. The Fed is not even thinking about stopping raising the rate yet, the ECB is unlikely to catch up with the Fed in terms of the rate level, and even these two factors alone suggest that the pair, at least, will not grow much and for a long time. Therefore, we believe that the decline will resume. Maybe it will no longer be large-scale and collapse, but the euro will not grow to 1.1000. Goldman Sachs forecast the Fed rate at 5%, but this may not be the limit. As mentioned above, almost all experts believe the Fed rate will continue to rise. The only question is to what level it will eventually grow. Recall that at the beginning of the year, the most "hawkish" member of the Fed monetary committee, James Bullard, spoke about raising the rate to 3.5%. Now no one doubts that the rate will rise to 4.75%, and some experts predict stronger growth. For example, Goldman Sachs economists believe the rate will rise to 5%. We believe that everything will depend on inflation. If it shows the same rate of slowdown as in the last two months, the Fed will receive the necessary grounds for further tightening monetary policy. Naturally, the higher the rate, the longer it will grow, and the more reason the dollar will continue to enjoy increased demand and strengthen against its competitors with lower rates. ECB head Christine Lagarde said last week that her department also intends to continue to fight high inflation. Still, in the case of the European regulator, it is unclear how far it can go in tightening monetary policy. We have already written earlier that not all EU countries can withstand the burden on the economy in the form of a 5% key rate. Most likely, the ECB will not bring the situation to a "critical mass." We believe that the ECB will stop somewhere in the middle to slow down inflation as much as possible, but at the same time, not bring the state of weak economies to a catastrophic state. This will mean that the rate will rise to a maximum of 4%, which is unlikely enough to return inflation to 2%. Therefore, the cost of borrowing will be more expensive in the United States, and bank deposits are also more profitable in the United States. You can make elementary money by taking a European loan and placing it on a deposit in the USA. This is a joke, but cash flows can continue to flow from Europe overseas. The average volatility of the euro/dollar currency pair over the last five trading days as of November 10 is 134 points and is characterized as "high." Thus, we expect the pair to move between 0.9897 and 1.0165 on Thursday. The upward reversal of the Heiken Ashi indicator signals the resumption of the upward movement. Nearest support levels: S1 – 1.0010 S2 – 0.9888 S3 – 0.9766 Nearest resistance levels: R1 – 1.0132 R2 – 1.0254 R3 – 1.0376 Trading Recommendations: The EUR/USD pair continues to be located above the moving average. Thus, now we should consider new long positions with targets of 1.0132 and 1.0165 in the case of a reversal of the Heiken Ashi indicator upwards. Sales will become relevant again no earlier than fixing the price below the moving average line with targets of 0.9888 and 0.9766. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 01:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326707
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The Pound (GBP) Has Neither Economic Grounds For Growth

InstaForex Analysis InstaForex Analysis 10.11.2022 08:48
The GBP/USD currency pair also began to adjust on Wednesday but, at the same time, failed to overcome the moving average confidently. As in the case of the euro currency, the pair failed to update its last local maximum, so there are certain reasons to assume that the upward trend will be completed at this point. Recall that just a few days ago, the price overcame the Senkou Span B line on the 24-hour TF, which opens up good prospects for it. However, the fundamental and geopolitical backgrounds remain such that it is very difficult to believe in the pound's growth over a long distance. Moreover, we still believe that the growth of the British currency in the last few days was illogical. This week, there was no important macroeconomic event in the US or the UK. At the expense of what did the pound grow then? Thus, we still believe that the pair's fall is more likely than its growth. Recall that bitcoin has been around the important $18,500 level for several months, bouncing 15 or 16 times. But in the end, when everyone thought growth had begun, he took "acceleration" before breaking through the "reinforced concrete" level. Therefore, we can observe something similar in currency pairs. Perhaps the movement we are seeing now is illogical and groundless – it's just an attempt by traders to drive the pairs higher so that they can sell at a more favorable rate. Recall that the UK and its economy are no longer just on the verge of recession. They already have one foot in this "swamp." This Friday, a report on GDP for the third quarter will be published, likely to turn out negative and will be the first in a series of failed reports. Thus, the pound has neither economic grounds for growth nor the support of the Bank of England nor geopolitical grounds. Interim results of the US parliamentary elections One of the most interesting recent topics has been the US Parliament's midterm elections. We want to make a reservation right away that the fall of the dollar is unlikely to be related to them since, at the moment, it is not even clear who will establish control over both chambers. Yes, the interim results speak in favor of the Republicans, but this statement is true only for the lower house. Currently, 199 seats out of 435 go to Republicans and 172 to Democrats. That is, the fate of 64 more seats is still unknown, and even the current leadership of the Republicans can be lost easily. Experts note that the second round of voting may be required in some states, which will occur no earlier than December. In some states, the votes have not yet been fully counted, and the results are very close, so the scales may tilt in either direction. Experts also believe that final results should not be expected in the coming days because counting millions of votes is not a fast process. There are states where the results are obvious, and all votes need not be considered for intermediate results. But such a picture does not develop everywhere. As for the Senate, the Republicans are leading by a margin of 1 vote. However, the fate of 5 more senators remains unknown, so the Democrats can calmly level the gap here. Recall that with equal seats in the Senate, of which there are only 100, the decisive vote will remain with Kamala Harris, who is a representative of the Democratic Party. Therefore, Democratic senators need to get three votes out of the remaining 5 to win the election to the Senate. If Republicans win in the House of Representatives, they will be able to block some of the Democrats' decisions, but they will not be able to make their own decisions alone. Both ruling parties will have to negotiate with each other on all important issues, which is perhaps even good. The average volatility of the GBP/USD pair over the last five trading days is 228 points. For the pound/dollar pair, this value is "high." On Thursday, November 10, thus, we expect movement inside the channel, limited by the levels of 1.1152 and 1.1607. A reversal of the Heiken Ashi indicator upwards will signal a new round of upward movement. Nearest support levels: S1 – 1.1353 S2 – 1.1292 S3 – 1.1230 Nearest resistance levels: R1 – 1.1414 R2 – 1.1475 R3 – 1.1536 Trading Recommendations: The GBP/USD pair has started a new downward movement in the 4-hour timeframe. Therefore, at the moment, you should stay in sell orders with targets of 1.1230 and 1.1152 until the Heiken Ashi indicator turns up. Buy orders should be opened when fixing above the moving average with targets of 1.1536 and 1.1607. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.       Relevance up to 01:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326709
The Outlook Of EUR/USD Pair For Long And Short Position

The Overall Technical Picture Of The EUR/USD Pair Is More Like A Swing

InstaForex Analysis InstaForex Analysis 10.11.2022 08:51
Analysis of EUR/USD, 5-minute chart Yesterday, the euro/dollar pair finally began to move down after several days of illogical and groundless growth. The euro fell by only 80-90 points, which is certainly not enough to speak of the start of a new even short-term downward trend. Today the pair may shoot up again if the US inflation report turns out to be very good. And in order for it to be very good, the consumer price index should fall by more than 0.3% y/y. Moreover, the dollar's fall in this case will be logical, but this does not mean at all that the market will react in this way to such data. In recent days, and even last week, we have seen little logical movement. The overall technical picture is more and more like a "swing". Formally, the euro has certain grounds to continue rising. At least because it overcame the Ichimoku cloud on a 24-hour timeframe. But from the point of view of the foundation, it is still difficult to believe in a sharp euro growth. In regards to Wednesday's trading signals, the situation on the 5-minute timeframe was not the best. Two false signals were formed near the level of 1.0072 during the European trading session. Both traders could work out and both received a loss, since neither in the first nor in the second cases the price managed to move even 15 points in the right direction. Therefore, the third sell signal should have been ignored, but it just turned out to be correct. Then a buy signal formed around 1.0019, but the pair began to grow so rapidly that it was already a difficult task to enter the market in time. However, about 20 pips could be earned on this. The new bounce from 1.0072 was to be ignored. And the last long position from the level of 1.0019 was closed by Stop Loss. As a result, the day ended with a minimal loss. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000). Analysis of EUR/USD, 1-hour chart You can see that the pair continues to rise on the one-hour chart, has overcome the Ichimoku cloud on the 24-hour timeframe, as well as all the Ichimoku lines on the 4-hour timeframe. However, it was not possible to surpass its last local high, and there is no trend line or channel. Everything looks as if we are faced with a series of short-term trends and now the pair will go down 200-300 points. On Thursday, the pair may trade at the following levels: 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as the Senkou Span B (0.9912) and Kijun-sen lines (0.9919). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events are expected in the European Union today, but in America the main report of the week on inflation will be released. So today the pair can show a fairly strong trend movement. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 06:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326719
Meta Is Cutting Discretionary Spendings And Extending Its Freeze On Hiring

Meta Is Cutting Discretionary Spendings And Extending Its Freeze On Hiring

Saxo Bank Saxo Bank 10.11.2022 09:12
Summary:  Risk sentiment took a beating again as the midterms fever faded with a lack of a Republican wave, and focus shifted back to the crypto turmoil and continued surge in Covid cases in China. Tech layoffs also took another step up with Meta slashing 13% of its workforce. USD gained despite lower US yields as it is likely turning more risk-sensitive than yield-sensitive, but focus on US CPI will add to some caution ahead of the release. A hotter-than-expected core print will likely bring the focus back on Fed’s hawkishness. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) dropped on crypto selloff, earnings disappointment, lower oil prices, and midterm elections S&P 500 plunged 2.1% and Nasdaq fell 2.4%. The sell0ff was board based with all 11 sectors of the S&P 500 in the red. The energy sector was the worst performer, falling 4.9% as crude oil prices down nearly 4% on rising US inventory levels. The collapse in crypto prices deepened, following Binance’s decision to walk away from its short-lived takeover bid for the ailing FTX. Robinhood Markets (HOOD:xnas) fell 13.8% as investors were concerned if FTX’s Sam Bankman-Fried might liquidate his 7.5% stake in Robinhood. Disney (DIS:xnys) plunged 13.2% on disappointing earnings. Meta Platforms (META:xnas) gained 5.2% after the company announced to layoff 13% of its employees to cut costs. US treasury (TLT:xnas, IEF:xnas, SHY:xnas) yields fell in a mixed session U.S. treasuries, in particular, the frontend of the curve were supported by selloff in equities and crypto, dovish comments from Fed Evans, and strong rallies in the European bond markets, seeing 2-year yields down 7bps to 4.58%, and 10-year yields falling 3bps to 4.09%. European bond yields dropped on the news that Russia was withdrawing its troops from Kherson, a Ukrainian regional capital city annexed by Russia less than two months ago. Chicago Fed president Charles Evans, who is retiring, said in an interview that there are “benefits to adjusting the pace as soon as” the Fed can and the Fed should not keep raising rates by a large amount every time on disappointing economic data. The 10-year auction did poorly with weak demand from investors but the market managed to shrug it off and had a strong close. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) The China reopening trade continued to fade on Wednesday as new domestically transmitted cases surged further to 8,176 the day before. Hang Seng Index retreated 1.2% and CSI 300 slid 0.9%. China’s CPI fell to 2.1% Y/Y and PPI declined 1.3% Y/Y in October, signaling weak domestic demand. Share prices of Chinese developers however surged, following Chinese authorities saying that they were expanding an existing credit support programme by RMB250 billion to help private enterprises, including developers, in raising debts, by providing debt insurance or bond buying. Country Garden (02007:xhkg), up 13.9%, Longfor (00960:xhkg), up 4%, were top performers in the Hang Seng Index. After trading 1% to 4% lower during the Hong Kong session, China Internet names continued to face selling pressure overnight in New York, with ADRs of Alibaba (09988), Tencent  (00700:xhkg) ,and Meituan (03690:xhkug)  each falling around 3% from their Hong Kong closing levels. FX: USD gains return as risk sentiment deteriorates The USD was back on the front foot on Wednesday ahead of the critical US CPI data due today. US midterms still ended in a political gridlock, even though a Republican wave was avoided. However, limited implication on policy means market focus can return to other key events, such as the crypto turmoil and further rise in China’s Covid cases. US 10-year yields dropped below 4.1% but it appears that the USD is not more risk-sensitive rather than being yield-sensitive. Geopolitics turned calmer with Russia retreating from the only Ukrainian regional capital captured, Kherson, but that brings some risk of new escalations as Putin gets desperate. Focus on US CPI however brought some weakness back in the DXY in early Asian hours with USDJPY back below 146.20. GBPUSD bounced back after a brief slide below 1.1350 and the EUR bounced back higher from parity. Crude oil (CLZ2 & LCOF3) WTI futures dipped further below $90/barrel mark, now touching the $85 handle, while Brent moved lower to sub-$93. Oil prices declined as the EIA reported US crude stocks rose by 3.9 million barrels to the highest since July 2021. This was offset by tightness in the fuel product markets. Gasoline inventories fell by 900kbbl, and distillate fuel stockpiles fell by 521kbbl. Meanwhile, sustained rise in Covid cases in China continued to take a hit on the demand outlook. New cases in Beijing jumped to the highest level in more than five months. Of particular concern was the number of infections found outside quarantine, suggesting the virus is still circulating through the community and would likely delay the easing of Zero Covid policies. Wheat (ZWZ2) prices lower, along with Corn, after USDA report The USDA released it’s November World Agricultural Supply and Demand Estimates report, which led to mixed but mostly lower grain prices. While the overall wheat consumption outlook was raised, USDA said demand may drop in some places, including Indonesia and Sri Lanka, due to high prices. Wheat prices plunged 2.5%. The agency also lifted its soybean output and stockpiles outlook, but robust export demand lifted prices. Meanwhile, USDA expects to see the seventh-largest corn crop on record this year, with a new estimate of 13.93 billion bushels.   What to consider? US midterms avoided a Republican wave Even with votes still being counted and runoffs yet to come to determine the US Senate majority, the midterm election didn't bring the red wave that was expected. Republicans are inching towards control of the House, but with a far narrower margin than what was predicted. Meanwhile, Democrats are likely to keep their majority in the Senate but the outcome won’t likely be confirmed for a while as Georgia heads to a runoff on December 6. The end result is still a political gridlock, much as expected, but with far smaller market implications given lack of a firm policy direction. US inflation to test the 8% level, watch core and stickier components Bloomberg consensus expects US October CPI to drop below the 8% mark and come in at 7.9% YoY from 8.2% previously, but still higher at 0.6% MoM from 0.4% in September. The core measure is also expected to ease slightly to 6.5% YoY, 0.5% MoM (prev. 6.6% YoY, 0.6% MoM) but still remain elevated compared to historical levels. Key to watch also will be the drivers of inflation, particularly the stickier shelter and services costs, which if stuck higher could move the December Fed funds future pricing more towards another 75bps rate hike, resulting in another round of selloff in equities and dollar gains. However, there is another CPI report due before the next Fed meeting in December, and we are going into today’s release with a weak risk sentiment following the crypto meltdown seen this week. This suggests that even a print that matches expectations, or is above it, will likely bring another selloff in equities and further support for the dollar. Binance walked away from FTX acquisition, another plunge in Bitcoin The contagion in the crypto and equities we mentioned yesterday is already here, and getting worse as latest developments suggest that Binance backed away from its earlier pledge, tweeting Wednesday afternoon that it would not pursue the acquisition of FTX. It cited due diligence and a reported US investigation into the exchange. Bitcoin plunged below $16,000, , while Ether followed and dipped to its lowest price since July, barely hanging on to the $1,100 level. China is in disinflation China’s PPI declined 1.3% Y/Y in October due to falls in energy and materials prices and weaknesses in metal processing. CPI inflation was also weaker than expected and fell to +2.1% in October from 2.8% in September on weak consumer demand, falling residential costs, and declines in vegetable prices. Meta to layoff 13% of its workforce Meta’s Mark Zuckerberg announced the social platform’s plan to layoff over 11,000 employees, about 13% of its workforce. Zuckerberg also said Meta is cutting discretionary spendings and extending its freeze on hiring through Q1 2023. The company reaffirmed its Q4 revenue guidance of USD30-32.5 billion, in line with expectations. Capex for 2023, according to the Company, will be in the range of USD34-37 billion, at the low end of prior guidance of USD34-39 billion.   For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-10-nov-2022-10112022
The USD/JPY Price Seems To Be Optimistic

Correlation Between The USD/JPY Pair And US 2-Y Treasury Yield Remains High

Saxo Bank Saxo Bank 10.11.2022 09:17
Summary:  When Sep CPI came lower than prior but higher than expected, S&P 500 index futures (ESZ2) had immediate reaction selling off ~3% and USDJPY - best carry trade among G10 yielding 5% - also rallied 100 pips so these two are expected to be most obvious ones to trade and show instant price action in terms of sensitivity to the data. First headline squawk highlighted in red that I saw this morning on my Bloomberg terminal was “BITCOIN DROPS BELOW $16,000…”. Last time Bitcoin (BTCUSD) dipped below $16,000 was 2 years ago and now it has fallen 77% from all time high $69,000 that was traded 1 year ago. Also to put this price action into perspective, Bitcoin/gold ratio has declined to just over 9 times compared to 35 times last year. When I checked on coinmarketcap.com, FTX - on the verge of potential bankruptcy - was the fourth biggest cryptocurrency spot exchange based on traffic, liquidity & volume, hence the risk-off sentiment has well and truly arrived as some of the notable crypto related stocks got hammered – COIN -10%, MSTR -20%, GLXY -16% while safehaven US dollar bid up broadly heading into October US CPI release tonight at 9:30pm. However we are yet to see significant systematic risk as VIX sitting at 26 with futures term structure of contango and high yield junk bond ETF (HYG) has not crashed trading 2.2% above recent low $70.40 as well as credit spread is also off 100bps below from the recent high 600bps. The current macro backdrop continues to focus and assess on the relative impact on inflation from rising real yield (10 year at 1.7%) or aggressiveness of interest rates hikes while Fed’s QT has been shrinking its balance sheet by about 3.2% from $8.9t to $8.6 in the last seven months. Even though last week’s unemployment rate looks to have bottomed from 3.5% to 3.7%, two of the mostly watched yield curves – 3m10y and 2y10y - still remain inverted at 9bps & 48bps respectively and we are not seeing substantial steepening happening yet therefore the futures implied terminal rate ~5% in 2Q next year may still have further rooms to move higher despite recent FOMC meeting’s down-shift signal and Powell’s cumulative tightening of 375bps, the most in one year since 1980.  The previous headline Sep CPI numbers 8.2% YoY showed major drivers were food, medical and shelter contributing nearly 1% each while energy and cars cooled. This time, energy may have gone up a bit and services would remain as a key area to watch as it has not stopped rising every month since Aug last year. The most recent PCE figures for Sep was 6.2% that is not only above Fed’s projection of central tendency 5.3%-5.7% but also far from its longer run target of 2%. After all, we have not seen sub 8% headline CPI since February number this year and actual result was less than estimate only once for July but given the estimate for tonight’s figures is anticipated at 7.9%, meeting this estimate may be sufficient for the equity market to find some relief rally. On 13 October, when Sep CPI came lower than prior but higher than expected, S&P 500 index futures (ESZ2) had immediate reaction selling off ~3% and USDJPY - best carry trade among G10 yielding 5% - also rallied 100 pips so these two are expected to be most obvious ones to trade and show instant price action in terms of sensitivity to the data. S&P 500 had a decent rebound last month digesting earnings as 456 companies have now reported with earnings surprise of 3% that is lowest in the last two years post Covid. S&P 500 forward earnings per share (EPS) estimated at 226 makes the PE ratio 16.6 times or 6% yield based on last night’s close 3,748 but again there-are-reasonable-alternatives (TARA) as 2 year treasury is at 4.6% and IG corporate bond ETF (LQD) giving nearly 6% with relatively lower implied volatility compared to SPY (13 vs 24). Lastly USDJPY is trading near a key level 145 that previously acted as resistance in September then turned into support level in the last two weeks. Correlation between USDJPY and US 2 year treasury yield remains high so the pair should be able to at least consolidate assuming 145 holds while long out-of-the-money call options could also work given 1 month implied volatility has fallen from 17 to 11 in recent weeks and 2 vol lower than realised volatility. Alternatively by taking more neutral to bullish view with possible Japan intervention, bull put spread (credit) could be considered using the same level 145 as the lower strike to long put and sell higher strike – say 148.50 that is half way between the recent high 152 and 145 – giving net premium of about 200 pips for one month expiry. Source: https://www.home.saxo/content/articles/forex/st-note---us-oct-cpi-preview-10112022
Saxo Bank Podcast: The Risk Of An Escalation In The US-China Confrontation, The Risk Of An Escalation In The US-China Confrontation And More

The Russia Has Announced The Intention To Withdraw Its Troops | Hopes For A Covid Zero Exit In China Fades

Saxo Bank Saxo Bank 10.11.2022 09:22
Summary:  Markets are increasingly spooked by the liquidity pressure in the crypto space, as the major crypto exchange FTX.com and its associated trading house Alameda Research may be set to go bust without a multi-billion dollar rescue, and as total market cap in crypto currencies has plunged over $100 billion over the last month. Elsewhere, the focus was meant to be on today’s US October CPI release. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities saw a hit to sentiment yesterday as Binance walked away from the deal to save the crypto exchange FTX setting in motion a plunge in cryptocurrencies. One of the largest shareholders in FTX, Sequoai Capital, is marking down its investment to zero suggesting little faith in the company and its ability to function. The risk-off moves spilled over into equity market with Tesla leading the declines among the mega caps down 7% with US President saying that Elon Musk relationships with foreign powers could be a national security issue. S&P 500 futures took out gains over the previous two sessions closing at 3,755 but the index futures are attempting to rebound this morning. Note the critical support level at 3,727 which could come into play later today if we get a negative surprise on the US inflation figures suggesting more sticky inflation. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) Following the risk-off sentiments spilling over from the crypto space and then global equities, Hong Kong and mainland China stocks declined, with Hang Seng down 2% and CSI 300 0.6% lower. China EV and Internet stocks are the top losers.  Among Hang Seng Index constituents, LINK REIT (00823:xhkg) was the performer, gaining more than 2%. AAC (02018), Apple’s acoustic product supplier, surged 5.7% on earnings beat and analysts expecting the company gaining market shares from its arch-rival after the latter losing orders from a key foreign client (most likely Apple).  FX: USD finds bids on weak risk sentiment. US October CPI release key focus later today The US dollar clawed back some of its losses as cratering crypto prices are seeing widening contagion, and rising Covid cases in China continue to drive concerns that further lockdowns are on the way. The weakest currencies were those normally associated with risk sentiment, like the smaller G10 currencies, as AUDUSD trades this morning not far above 0.6400 after a spike to 0.6550 at the beginning of the week. Overall USD direction remains in play as the USD is somewhat down, but by no means out and today’s US October CPI to theoretically set the tone, although a liquidity crisis in crypto that continues to drive contagion elsewhere could yet steal the spotlight in the near term, with poor liquidity generally associated with USD strength. A weak US treasury auction yesterday is also a concern on that front (more below). Crude oil (CLZ2 & LCOF3) Trades lower for a third day as hopes for a Covid zero exit in China fades after the country increased restrictions in a key manufacturing hub and new cases in Beijing jumped to the highest level in more than five months. WTI has returned to the $85 handle, down 9% from Monday’s peak, while Brent trades sub-$93. In addition, the market has also been hurt by the loss of risk appetite filtering through from the carnage in cryptos and after the EIA reported US crude stocks rose by 3.9 million barrels to the highest since July 2021. This was somewhat offset by tightness in the fuel product markets with gasoline inventories dropped to an eight-year low. Focus on China, the general level of risk appetite signaled through the dollar and today’s US CPI print for October.  Precious metals hold gains ahead of today’s US CPI print Gold trades above $1700 for a second day with shallow correction attempts since Tuesday's surge so far pointing to underlying support. However, with most of that currently being provided by a drop in Treasury yields and a softer dollar, today’s US CPI print for October will be watched closely. Another upside surprise may cause a temporary drop before potentially supporting prices as the market will start wondering whether the FOMC will be successful in getting inflation control. Some support also emerging from the chaos across the crypto market where the risk of contagion to other coins from the FTX fallout remains elevated. Gold support at $1682 and silver at $21 followed by $20.27. Crypto market: another plunge in crypto as Binance walks away from FTX acquisition  The contagion in the crypto and equities we mentioned yesterday is already here, and getting worse as latest developments suggest that Binance backed away from its earlier pledge, tweeting Wednesday afternoon that it would not pursue the acquisition of FTX. It cited due diligence and a reported US investigation into the exchange. Bitcoin plunged below $16,000, while Ether followed and dipped to its lowest price since July, barely hanging on to the $1,100 level. According to a research note from JPMorgan the crypto market is right now facing a cascade of margin calls and liquidity disappearing in the system. US treasuries (TLT, IEF) US Treasury yields are sharply lower this morning, with the 2-year treasury yield closing below 4.60% yesterday, the lowest since the hawkish Fed Chair Powell press conference last Wednesday. Weak risk sentiment and contagion from the melt-down in crypto markets may finally be driving safe haven flows into what is traditionally the world’s most liquid asset: UYS treasuries. The 10-year treasury benchmark yield edged below 4.10% after a very weak 10-year auction, with bidding metrics the worst in years. The US Treasury is set to auction 30-year T-bonds today. What is going on? Wheat (ZWZ2) prices lower, along with Corn (ZCZ2), after USDA report The USDA released its November World Agricultural Supply and Demand Estimates report, which led to mixed but mostly lower grain prices. While the overall wheat consumption outlook was raised, USDA said demand may drop in some EM countries due to high prices. Wheat prices plunged 2.5% with additional selling from the announcement Russia is moving its troops out of Kherson, a development that may clear the way for more crop shipiments out of Ukraine. The agency also lifted its soybean output and stockpiles outlook, but robust export demand lifted prices. Meanwhile, USDA expects to see the seventh-largest corn crop on record this year, with a new estimate of 13.93 billion bushels. Foxconn still sees high demand for high-end electronics  The electronics maker, and the biggest supplier to Apple, reported Q3 results today with operating profits and revenue beating estimates. The company still sees strong demand for consumer electronics at the high-end of the market, but sees overall consumer electronics falling in Q4 y/y. US earnings recap: Beyond Meat and Rivian The EV delivery van maker Rivian missed estimates on Q3 revenue yesterday due to supply constraints, but the EPS loss of $1.57 was less than estimated at $1.86. The EV maker still sees 2022 production target at 25,000 vs est. 26,166. Rivian shares gained 8% in extended trading hours. Beyond Meat missed big on both revenue and EBITDA, but tries to calm investors by putting out a positive cash flow level around the second half of 2023. Russia said to be set to pull troops from embattled Kherson  In the hardest fought area of the war after the Russian invasion of Ukraine, the Russian side has announced the intention to withdraw its troops to the Eastern side of the river after an intense battle to maintain control of the strategic city, which is the closest major city to the Crimean Peninsula and would bring many Russian targets, including key supply routes from Crimea, within range of Ukrainian artillery if Ukraine takes control of Kherson. UK October Home Price Survey shows massive deceleration in UK housing  The RICS House Price Balance has been tumbling in recent months as mortgage rates have spiked on the overall rate rise, but also as spreads have widened due to by poor liquidity in the market. The positive 30% reading in September was already a sharp drop from the very strong levels above 50% just two months prior, and the October survey was expected to show +19% (still shownig prices generally rising). Instead, it plunged all the way to –2%, suggesting that UK housing market pricing is decelerating at a record clip, with deeper negative readings ahead that will impact overall UK confidence. What are we watching next? US October CPI release today suddenly looking less pivotal? The crypto panic has quickly stolen focus from the US CPI data release here, possibly to a sufficient degree that even an inflation print that is solidly below the expectations could fail to spark notable relief across markets, as weak liquidity concerns possibly keep the US dollar firm and equity markets weak even if yields ease lower. The ex-Fresh Food and Energy number is expected to come in at +0.5% month-on-month and +6.5% year-on-year, after the multi-decade high of 6.6% YoY in September, with the headline expected at +0.6%/7.9%, which would be the first sub-8.0% year-on-year print since February.) Earnings to watch Today’s US earnings focus is NIO which will be latest test for the EV market as maybe providing information on the factory situation in China amid rising Covid cases. The Chinese market is the most important market for Tesla so a dire outlook from NIO could translate into negative sentiment on Tesla shares. Thursday: Brookfield Asset Management, Fortum, Engie, Credit Agricole, Allianz, Merck, Hapag-Lloyd, RWE, SMIC, Nexi, AstraZeneca, ArcelorMittal, Siemens Gamesa Renewable Energy, Becton Dickinson, NIO Friday: Richemont Economic calendar highlights for today (times GMT) 1330 – US Oct. CPI 1330 – US Weekly Initial Jobless Claims 1400 – US Fed’s Harker (voter 2023) 1400 – Poland Central Bank Governor Glapinski news conference 1530 – EIA’s Weekly Natural Gas Storage Change 1730 – US Fed’s Mester (Voter 2022) to speak 1800 – US Treasury auctions 30-year T-bonds 1830 – US Fed’s George (voter 2022) to speak 1900 – Mexico Central Bank Rate Announcement     Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-10-2022-10112022
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

The Weakening Of The US Dollar (USD) Is Not Conducive To The NZD/USD Pair

TeleTrade Comments TeleTrade Comments 10.11.2022 09:24
NZDUSD fails to cheer the US dollar weakness during early Thursday as it stays pressured around the intraday low of 0.5865 heading into the European session. In doing so, the Kiwi pair takes clues from the options market, as well as downbeat signals from the Reserve Bank of New Zealand (RBNZ). That said, the one-month RR of the NZD/USD pair, the key options market gauge, braces for the biggest weekly loss in six while printing the -0.025 figure. It’s worth noting that the RR is the difference between the call options and the put options and hence indicates the market’s bias. It should be noted that the daily RR, however, snaps a two-day downtrend with a +0.065 figure and challenges the NZDUSD bears. On a different page, Reuters said, “The New Zealand central bank's dramatic easing in monetary policy was largely warranted over the COVID-19 pandemic, but with hindsight policy tightening should have occurred earlier in 2021, an internal report released by the bank on Thursday found.” Also read: NZDUSD Price Analysis: Bears in control with eyes on daily trendline
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The GBP/JPY Pair Sellers Will Wait For A Downside Break

TeleTrade Comments TeleTrade Comments 10.11.2022 09:32
GBPJPY grinds higher around intraday top, snaps two-day downtrend. Symmetrical triangle, 200-HMA challenge immediate recovery despite firmer oscillators. Sellers need validation from 165.00 to aim for previous monthly low. GBPJPY seesaws around the intraday high as buyers struggle to defend the first daily gains in three heading into Thursday’s London open. In doing so, the cross-currency pair makes rounds to 166.60-70 of late. That said, the quote’s latest rebound could be linked to its bounce off the one-week-old ascending trend line, as well as bullish MACD signals and firmer RSI, not overbought. However, a horizontal area comprising multiple hurdle marked since November 03, as well as the 100-HMA, restrict the GBPJPY pair’s immediate upside between 167.20 and 167.30. Even if the pair manage to cross the 167.30 resistance, the monthly resistance line and the 200-HMA, respectively around 167.80 and 168.30, could challenge the quote’s additional north-run. It’s worth noting that the weekly high near 169.10 acts as an extra filter to the north. On the flip side, GBPJPY sellers will wait for a clear downside break of the aforementioned weekly support line, close to 166.00 at the latest, to retake control. Following that, the monthly low near 165.10 and late October’s trough near 165.00 could challenge the bears before directing bears toward the previous month’s bottom of 159.73. During the fall, the early August swing high of around 164.00 and the 160.00 round figure could offer intermediate halts. GBPJPY: Hourly chart Trend: Limited upside expected
The Japan Central Bank’s Decision Sent The Yen (JPY) Sliding

The Bank Of Japan Chief Brushed Aside Hopes For Any Direct FX Market Intervention

TeleTrade Comments TeleTrade Comments 10.11.2022 09:38
USDJPY comes under some selling pressure on Thursday amid a modest USD weakness. The Fed-BoJ policy divergence should act as a tailwind and help limit losses for the pair. Traders also seem reluctant and prefer to wait for the release of the crucial US CPI report. The USDJPY pair struggles to capitalize on the previous day's goodish rebound from the 145.15-145.10 support zone, or a nearly two-week low and meets with a fresh supply on Thursday. The pair remains on the defensive through the early European session and is currently placed near the daily low, just above the 146.00 round figure. A modest US Dollar downtick, amid some repositioning trade ahead of the key US macro data, turns out to be a key factor prompting some selling around the USDJPY pair. The downside, however, remains cushioned as traders seem reluctant to place aggressive bets ahead of the latest US consumer inflation figures, due later this Thursday. The crucial US CPI report will play an important role in determining the Fed's policy tightening path, which should influence the near-term USD price dynamics and provide a fresh directional impetus to the major. Nevertheless, the markets are still pricing in the possibility of at least a 50bps Fed rate hike move in December. In contrast, the Bank of Japan, so far, has shown no intentions to raise interest rates. Moreover, the BoJ remains committed to guiding the 10-year bond yield at 0%. In fact, BoJ Governor Haruhiko Kuroda reiterated on Thursday that the central bank must continue to underpin a fragile economic recovery with loose monetary policy. Kuroda added that economic uncertainty is extremely high and deeper negative rates are an option if needed. This marks a big divergence in comparison to a more hawkish Fed and supports prospects for the emergence of some buying around the USDJPY pair. Furthermore, the fact that the BoJ chief brushed aside hopes for any direct forex market intervention to safeguard the domestic currency adds credence to the positive bias. Hence, any subsequent slide might continue to attract some buyers and is more likely to remain limited, at least for the time being. That said, a convincing break below the 145.00 psychological mark will negate the constructive outlook.
Analysis Of Situation Of The US Dollar To Swiss Franc Pair (USD/CHF)

The Five-Day Losing Streak Of The USD/CHF Pair

InstaForex Analysis InstaForex Analysis 10.11.2022 09:41
USDCHF remains pressured at one-month low, down for the fifth consecutive day. US Dollar drops amid mixed Fedspeak, softer yields. Markets remain dicey as S&P 500 Future print mild gains, Asian stocks track Wall Street’s losses. Traders brace for a softer US CPI, a surprise can recall buyers. USDCHF takes offers to refresh the intraday low near 0.9825 during the early hours of Thursday’s European session. In doing so, the Swiss Franc (CHF) pair prints a five-day losing streak as it approaches the lowest levels since October 06, marked the previous day. The quote’s latest weakness could be linked to the market’s hopes of softer US inflation data for October, as well as the recently downbeat comments from the US Federal Reserve (Fed) officials. That said, Minneapolis Federal Reserve (Fed) President Neel Kashkari recently mentioned “Some things are out of our control on inflation.” Previously, New York Federal Reserve (Fed) President John Williams mentioned that the relatively stable long-term inflation expectations are good news. On the same line, Richmond Fed President Thomas Barkin also mentioned that the Fed’s fight against inflation may lead to a downturn in the US economy but that is a risk that the Fed will have to take. It should be noted that comments suggesting an absence of the need for aggressive rate hikes from the monetary policymakers of Australia, New Zealand and Japan also recently favored the market sentiment and weighed on the USDCHF prices. Furthermore, a slight decline in China’s covid numbers and Russia’s retreat from Kherson exerted additional downside pressure on the US Dollar. Earlier in the week, Swiss National Bank (SNB) Chairman Thomas Jordan said, “Our monetary policy decisions are not based exclusively on our inflation forecast.” The policymaker also mentioned that they are also experimenting with machine-learning models that are trained using a large set of economic and alternative indicators. It’s worth noting that the fears of global recession and the US political gridlock, as well as China’s covid woes, underpinned the previous day’s tepid rebound. Against this backdrop, the US Treasury yields remain pressured while the S&P 500 futures print mild gains. Further, the Asian equities trade mixed whereas the US Dollar Index (DXY) reverse the previous day’s rebound from the two-month low. Moving on, US Consumer Price Index (CPI) for October, expected to ease to 8.0% YoY from 8.2% prior, appears the key catalyst for the USDCHF traders amid chatters over the easy Fed rate hike in December. Also read: US October CPI Preview: US Dollar to weaken on a CPI-inspired risk rally Technical analysis Unless trading successfully beyond the previous support line from late September, around 0.9890 by the press time, USDCHF remains on the way to test the six-week low near 0.9740.
Bank of England survey highlights easing price pressures

The UK Central Bank (BoE) Expects A Recession To Last For All Of 2023

TeleTrade Comments TeleTrade Comments 10.11.2022 09:51
EURGBP lacks any firm intraday direction and oscillates in a range on Thursday. A combination of factors, however, continues to act as a tailwind for the cross. Talks for aggressive tightening by the ECB underpin the Euro and offers support. The BoE’s bleak outlook for the UK economy supports prospects for further gains. The EURGBP cross is seen oscillating in a range, around the 0.8800 round-figure mark through the early European session and consolidating the overnight strong gains to a nearly one-month high. The Bank of England's gloomy outlook for the UK economy turns out to be a key factor behind the British Pound's relative underperformance and acts as a tailwind for the EURGBP cross. In fact, the UK central bank expects a recession to last for all of 2023 and the first half of 2024. Moreover, the BoE last week indicated a lower terminal peak than was priced into the markets. The shared currency, on the other hand, continues to draw some support from bets for a more aggressive policy tightening by the European Central Bank (ECB). Several ECB policymakers, including President Christine Lagarde, indicated that the central bank will keep raising rates aggressively to tackle red-hot consumer inflation, which accelerated to a record high of 10.7% in October. This, in turn, pushed Germany’s short-dated yields to fresh multi-year highs earlier this week and adds credence to the near-term positive bias for the EURGBP cross. Even from a technical perspective, the previous day's sustained move and acceptance above the 0.8775-0.8780 supply zone support prospects for an extension of a nearly three-week-old uptrend. There isn't any major market-moving economic data due for release on Thursday, either from the Eurozone or the UK. Hence, the focus remains on the Preliminary UK Q3 GDP print on Friday. Investors will also look forward to British Finance Minister Jeremy Hunt's fiscal statement on November 17. Nevertheless, the fundamental backdrop seems tilted in favour of bullish traders.
Forex: Most NOK Gains May Be Channelled Against The Dollar

Norges Bank Is Likely To Step Up The Speed Of Its Measures

TeleTrade Comments TeleTrade Comments 10.11.2022 09:55
October inflation data is due in Norway. Norges Bank remains credible, cautious and flexible. Therefore, economists at Commerzbank expect EURNOK to ease towards 10 again. New information for Norges Bank “It seems that inflation is likely to have risen again. In all probability, Norges Bank will have to adjust its inflation projections to the upside again. On the other hand, Norges Bank pointed out last week that electricity and gas prices have fallen recently, which means that the rates for November and December might already be falling, thus confirming the smaller rate step in November. If prices were not falling, Norges Bank is likely to step up the speed of its measures again in December.” “25 bps more or less are not the decisive factor, what matters is the fact that the central bank continues to take decisive action against the price risks even though it is keeping an eye on the economy – the second part of its mandate.” “I stick to my view that the krone is actually trading too cheaply and that EURNOK should ease towards 10 again over the coming weeks.”
Craig Erlam And Jonny Hart Discuss Crypto Situation And The US Election Results

Craig Erlam And Jonny Hart Discuss Crypto Situation And The US Election Results

Craig Erlam Craig Erlam 10.11.2022 10:00
OANDA Senior Market Analyst Craig Erlam reviews the latest market news with Jonny Hart. They discuss the US midterm results, crypto sell-off and the upcoming inflation report. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
In Crypto, You Could Prove You Own A Private Key Without Revealing It

FTX Drama Got Worse | Eyes On The US Inflation Data

Swissquote Bank Swissquote Bank 10.11.2022 10:11
Less aggressive support for the Republicans, and more importantly, looming uncertainty, are the major factors that weighed on investor sentiment yesterday. The S&P500 slid more than 2%, Dow Jones lost 1.95%, while Nasdaq dumped 2.40%. The selloff was also fueled by the shaking crypto markets, and perhaps some investors taking risk off the table before the US inflation data, due today. Crypto In cryptos, watching, what used to be the world’s 4th biggest crypto exchange go under the water, triggered panic across the sector, getting investors to question, whether FTX is an isolated case, or this is just the tip of the iceberg, and if and how many of the cryptocurrency exchanges may haves similar insolvency problems, that are only waiting to get revealed. FX & commodities In FX & commodities, US dollar rebounded yesterday on the back of a better-than-expected Democrat results, and some repositioning before today’s inflation data, gold held ground above $1700 per ounce, while US crude fell on China Covid news and weekly rise in US oil inventories.On the geopolitical front, news that Russia announced to pull out troops from Kherson triggered mild, and short-lived gains in equities. US inflation data On the data front, investors hold their breath before the US inflation data due today. Headline inflation in the US is expected to have eased from 8.2%, to 8% in October, and core inflation is seen softer at 6.5%, compared to 6.6% printed a month earlier. PS: in six of the prior seven months, inflation exceeded expectations. So, there is a good chance that it’s the case this time around as well. Watch the full episode to find out more! 0:00 Intro 0:30 Menu du jour 0:54 Republicans gained field, but less than expected 1:46 FTX drama got worse, cryptocurrencies fell 5:03 US inflation in focus 6:07 Some earnings & company updates 7:00 FX and commodities 8:26 Russia pulls troops out of Kherson Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #FTX #FTT #selloff #Binance #Bitcoin #Ethereum #US #midterm #election #2022 #inflation #data #Russia #Ukraine #war #USD #EUR #XAU #CrudeOil #Disney #Roblox #Meta #Amazon #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH      
Inflation Reports In Australia And New Zealand Were Higher Than Expected

Inflationary Momentum In New Zealand Remains Strong

InstaForex Analysis InstaForex Analysis 10.11.2022 10:24
Risk appetite noticeably fell this Thursday morning. The S&P 500 already lost more than 2% the previous day, while stock markets in Asia-Pacific countries traded in the red zone. Europe is also likely to open lower, which can not be said to government bond yields as it showed somewhat higher stability. 10-year US Treasures stayed above 4%, confidently indicating an increase in the risk of stagflation. Part of the reason why risk appetite decreased is the preliminary results of the US elections, according to which the Republicans will receive a majority in the House of Representatives and thus be able to influence the government's budgetary policy. There is still no clarity on the Senate, as the state of Georgia will hold a second round, scheduled for December 6. The second factor is the increase in the number of Covid patients in China, which reduces the likelihood of lifting restrictions. Today, the focus will be on the US inflation report, which has a base rate forecast of +6.5%, slightly below September's 6.5%. It is very important because if inflation does not show at least some signs of slowing down, then Fed rate forecasts could rise to 6% for 2023, which will increase panic and push up demand for dollar. Conversely, a data release of 6.5% or lower could dampen anti-risk sentiment slightly and boost demand for commodity currencies. NZD/USD Inflationary momentum in New Zealand remains strong and there is no slowdown yet. But the labor market is very stable, thanks to the very large decrease in the number of workers dropping out of the labor force. Another record performance for the 3rd quarter is the growth in average hourly wages, which in the private sector grew by 8.6% y/y. It is expected that by the end of the year, this figure will exceed 9%, which leaves the RBNZ no choice but to raise rates higher. The latest RBNZ survey on inflation expectations showed that inflation is expected to reach 5.08% in 1 year versus 4.86% in September. Then, it will return to 3.62% in 2 years versus 3.07% earlier. Obviously, inflation expectations continue to rise even though the RBNZ is raising rates quite aggressively. The ANZ Bank predicts that the rate will be raised to 5% in February, then peak in the end of 2023, which looks more aggressive than the Fed's policy, and will contribute to the growth of the yield spread in favor of the kiwi. But if prices for dairy products continue to drop, NZD will halt growth. That, however, is quite unlikely as a peak in stocks of dairy products has been formed and a reduction in production is expected, which will help support prices. According to reports, NZD net short position decreased for the second week in a row. There is a bearish advantage of -0.22 billion, but the estimated price turned up, increasing the probability of a bullish correction. Kiwi broke through the resistance level of 0.5866. In case of a rebound, support will be found in 0.5810/20, while resistance will be in 0.5960 (23.6% retracement level of the fall since February 2021). AUD/USD The consumer sentiment index reportedly fell 6.9%, from 83.7 in October to 78.0 in November. Obviously, inflation in Australia continues to grow, reaching 7.3% in the 3rd quarter against 6.1% earlier. Forecasts suggest further inflation growth. This is why the Australian government is very careful in making changes to tax policy. Rate forecasts are also rising to a higher level, which leads to a drop in consumer spending. There is also a marked decrease in labor market confidence, as well as in the possibility of buying a home. In terms of positioning, the latest data says net short position in AUD decreased by 0.1 billion over the reporting week. The bearish advantage remains, with the estimated price being below the long-term average and is directed downwards. Although the trend is bearish, there will be attempts of upward correction. Support is at 0.6320/30, while resistance is at 0.6510/30. But trading will move into a side channel, the exit from which is more likely down. When trying to grow to 0.6510/30, traders must sell first in order to return the quote to 0.6320/30. However, there is no reason yet to expect a full-fledged bullish reversal.   Relevance up to 07:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326725
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

The Elections In The US Can Significantly Increase The Negative Trends

InstaForex Analysis InstaForex Analysis 10.11.2022 10:27
It seems that the Republicans were not so strong in the US, so the results of the midterm elections remain unclear. This means that the balance of power in the two houses are unchanged, which significantly affected market sentiment and led to a sell-off in the US stock market. Dynamics of trading in Europe and Asia was also influenced. Earlier, many were betting heavily that a noticeable shift in power, at least in Congress, will lead to cuts in various financial costs and tax increases. But this did not happen, which was the reason for yesterday's disappointment in the markets. In addition, data on US consumer inflation is due, which is expected to grow by 0.6% m/m and fall to 8.0% y/y in October. This is also important as it will affect the dynamics in the markets, particularly in the demand for the dollar. So far, the disappointment that befell the markets as a result of the elections in the US can significantly increase the negative trends and lead to a new collapse in the stock markets, primarily in the US. And if the data shows an increase in consumer prices, albeit insignificant, the Fed will have every reason to raise the discount rate again in December by 0.75%. In this case, the dollar will definitely receive support again against the backdrop of because of a likely resumption in growth of Treasury yields. But if the inflation rate goes down, even if slightly, there will be a new wave of purchases as investors will once again expect the Fed to gradually reduce the pace of its rate increases. Forecasts for today: XAU/USD Gold is trading below 1713.60. If dollar comes under pressure in the wake of the release of US inflation data, prices will grow to 1730.00 after overcoming the level of 1713.60. EUR/USD The pair is consolidating in the range of 0.9987-1.0090 ahead of the release of inflation data in the US. If they show growth, dollar will rise again and the pair may fall to 0.9895. But if it decreases, the pair will surge above 1.0090 and head to 1.0200.   Relevance up to 07:00 2022-11-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326727
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

Further Volatility Of The AUD/USD Pair In Today Session Is Expected

Kenny Fisher Kenny Fisher 10.11.2022 12:13
The Australian dollar has extended its losses today. AUD/USD is trading at 0.6412, down 0.29%. The US dollar has rebounded after a 3-day slide, which saw the Australian dollar climb over 200 points. The Aussie has coughed up half of those gains since Tuesday, and we could be in for further volatility in today’s North American session, as the US releases the October inflation report. Investors are somewhat confused, thanks to mixed signals from both the Federal Reserve and last week’s US employment report. The Fed meets next in mid-December, and it’s close to a toss-up as to whether the Fed will raise rates by 0.50% or 0.75%. At the last meeting, at which the Fed hiked by 0.75%, Fed Chair Powell hinted at easing up on rates but also said that the terminal rate would likely be higher than previously expected – this mixed message makes it difficult to peg the Fed as being hawkish or dovish. US inflation expected to remain hot Last week’s employment report was mixed, as unemployment and wage growth climbed, while nonfarm payrolls fell but still exceeded expectations. This makes today’s inflation report all the more important for the Fed ahead of the December meeting. A hot inflation report would likely boost the likelihood of a 0.75% hike, which would be bullish for the US dollar. CPI is expected to dip to 8.0%, down from 8.2%, which although a slight improvement, would indicate that inflation remains very high. Australia is also dealing with high inflation, and Melbourne Institute Inflation Expectations for October reinforced concerns that inflation is yet to peak. Inflation Expectations rose to 6.0%, up sharply from 5.4% in September, and the first acceleration in four months. The economy is showing signs of slowing down, and a report from the National Australian Bank on Wednesday projected that GDP would fall to 0.8% in 2023 and interest rates would peak at 3.6% next year. The cash rate is currently at 2.85%, which means that the RBA is likely to continue raising rates into 2003.   AUD/USD Technical AUD/USD is testing resistance at 0.6411. Above, there is resistance at 0.6549 There is support at 0.6239 and 0.6196 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
ECB's Hawkish Hike: Boosting EUR/USD and Shaping Global Monetary Policy

Saxo Bank's Podcast: The Equity Risk Premium, The Meltdown Of Crypto And More

Saxo Bank Saxo Bank 10.11.2022 12:22
Summary:  Today we look at the sudden shift of the plot over the last 24 hours as the crypto contagion effects from the meltdown in that space have reached sufficient magnitude to impact sentiment across markets. We emphasize caution on the network effects among many clusters of assets held by the same hands holding crypto. Also, a look at where we are with the equity risk premium as investors better not hope for "normal" equity valuations. A glance at FX and the USD rising on liquidity concerns and brushing off the drop in US treasury yields, which brings into question the reaction function around today's October US CPI release, which may not have the impact previously anticipated, even on a surprise. Today's pod features Peter Garnry on equities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-10-2022-10112022
Analysis Of The EUR/JPY Pair Movement

Technical Analysis Of The USD/JPY Pair's Movement

InstaForex Analysis InstaForex Analysis 10.11.2022 12:32
After the most powerful currency intervention by the Bank of Japan over the past three weeks, USD/JPY stopped twice at the support level of 145. This was not in favor of buyers, but it indicated where their stop orders should be. Important data on inflation will be released in the US today, where many expect to see a decrease. In this regard, traders should enter the market by selling from current prices, aiming to update the level of 145. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 10:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326773
German Business Confidence Dips, ECB's Lagarde Hosts Central Banking Conference in Portugal, EUR/USD Drifts Higher

The World's Leading Economies Not Doing Well And This Is Keeping High Demand For USD

InstaForex Analysis InstaForex Analysis 10.11.2022 12:42
Why did the euro shoot up in early November? The answer to this question can be easily found in the securities market. In October, European stock indices rose by 11% compared to 5–6% for their US counterparts. German bond yields edged up amid hawkish rhetoric from members of the ECB's Governing Council, including a higher peak deposit rate than the 3% expected by investors. The flow of capital from North America to Europe has been the catalyst for the EURUSD rally, which is one step away from completion. Indeed, despite the changed dynamics of stocks, bonds and other financial assets, their ratios still testify to the persistence of the downward trend in the main currency pair. A typical example is the interest rate swap market. Dynamics of EURUSD and interest rate swap differential Plus, the US dollar rarely falls when the Fed hasn't done its job of tightening monetary policy and the global economy is on its last legs. It may have seemed to some that falling gas prices in the eurozone would allow it to avoid a recession, and thanks to a strong labor market, the US economy would make a soft landing. Alas, the substantially increased electricity bills for European households suggest otherwise, as is the slowdown in consumer spending in the US and the depletion of their savings and falling property prices. According to UBS, these data indicate that the US is in a hard landing. If things are not going well in the world's leading economies, including the US, the eurozone and China, causing global business activity to decline, then demand for the dollar as the main safe-haven asset should remain strong. Dynamics of global business activity Keeping the trump cards "bears" on EURUSD allows large banks and investment companies to argue that the current rise of the pair is a temporary phenomenon. There can be no question of any change in the downward trend. At least for now. So TD Securities claims that in 2023 the USD index will lose 10% of its value, but its collapse will begin only in the second quarter, and not now. The return of the US dollar to the game will most likely be associated with strong inflation statistics in the US. Just yesterday we discussed the question why the Fed looks more at the monthly dynamics of indicators than at the annual one. And forecasts of +0.5–0.6% MoM on consumer prices and core inflation do not give the Fed reason to relax. With such dynamics of CPI, the chances of a 50 bps increase in the federal funds rate in December will fall from the current 52%, which will support the "bears" on EURUSD. Technically, the Three Indians reversal pattern is being implemented on the daily chart of the pair, as expected. I recommended selling euros from the levels of $1.007–1.008, which by that time were current. Due to the formation of an internal bar, we have the opportunity to increase short positions on EURUSD on a breakout of support by 0.995.   Relevance up to 10:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326769
Mexico’s Central Bank Surprised Markets With A 50bps Rate Hike Once Again

There Are Expectations That Banxico Interest Rates Will Achieve 10.0%

TeleTrade Comments TeleTrade Comments 10.11.2022 13:23
Economists at Rabobank expect Banxico to raise rates 75 basis points to 10.00%. In any case, USDMXN is set to trade above the 20 level again. MXN to outperform the rest of the LatAm region “We expect another 75 bps hike from Banxico on November 10, but after that meeting, we expect a 50 bps hike on December 15 and a final 25 bps hike on February 9, taking the policy rate up to a terminal rate of 10.75%.” “In terms of USDMXN, we did recently see a dip below support at 19.50 but that didn’t last long and our indicators are pointing to a likely reversal, with a move back above 19.80 and a likely break back above 20 yet again.” “If our 75 bps hike call is incorrect and Banxico raises rates 50 bps, then a break above 20 is likely to happen in the aftermath of the decision, but even if a 75 bps hike is forthcoming, we expect USDMXN to trade back above 20 before month-end but for MXN to outperform the rest of the LatAm region.”
The Pound Is Now Openly Enjoying A Favorable Moment

Needless to say - greenback plunged after the inflation release, so Sterling gained. If released next week GDP come at less than -0.5%, pound may recede

Kenny Fisher Kenny Fisher 10.11.2022 20:41
The British pound has soared today, following the US inflation report. GBP/USD is trading at 1.1661, up a massive 2.7%. US dollar retreats as inflation falls The October inflation report was lower than what everyone had expected, which has triggered strong volatility in the currency markets. The US dollar is sharply lower against the majors, as the markets are expecting the Fed to ease up on interest rates after today’s favourable inflation data. Headline CPI dropped to 7.7%, down from 8.2% in September and below the consensus of 8.0%. Core inflation slowed to 6.3%, down from 6.6% and lower than the forecast of 6.5%. The surprisingly low numbers have turned rate pricing on its head. Prior to the inflation release, the markets had priced in 55% for a 50 bp increase and 45% for a 75 bp hike. This has changed to 80-20 in favor of a 50 bp hike, which has sent the US dollar into a broad retreat. The Fed may end up delivering a 50 bp move in December, but investors should remind themselves that this doesn’t mean the Fed is going soft. It wasn’t too long ago that a 0.50% hike was considered ‘supersize’; it’s only in comparison to 0.75% or full-point moves that a 0.50% increase can be considered dovish. Secondly, Fed Chair Powell said at last month’s meeting that the terminal rate would be higher than previously expected, a clear sign that the Fed remains hawkish. The UK releases key data on Friday, and the markets are braced for soft readings. GDP for the third quarter is expected to slow to -0.5% QoQ, down from 0.2% in the second quarter. Manufacturing Production for September is expected at -0.4%, which would mark the third decline in four months. If these releases are weaker than expected, the pound could give back some of today’s huge gains. GBP/USD Technical There is resistance at 1.1767 and 1.1844 1.1609 and 1.1505 and providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD rockets as US inflation dips - MarketPulseMarketPulse
The South America Are Looking For Alternatives To The US Currency

Dollar isn't that strong at the moment, if inflation persists to go down, Oanda's analyst seems to hint at the pit of stocks prices

Ed Moya Ed Moya 10.11.2022 21:29
This inflation report was a nice surprise. ​ Inflation has been very slow to come down, but this report gives up hope that this deceleration with pricing pressures might bring back hopes of a soft landing. The headline reading came in lower-than-expected, but most traders were focused with the month-over-month decline with core prices. ​ If this downward trajectory for inflation holds, then you can make a strong case that the bottom is in place for US equities. US stocks are rallying as Wall Street finally sees light at the end of the Fed’s tightening cycle tunnel. ​ This cool inflation report helped stocks post their best trading day in two years. ​ Treasury yields are in freefall, the dollar is tanking, and practically every risky asset is rejoicing over this inflation report. ​ ​ Inflation ​ ​ ​  Inflation has peaked but don’t hold your breath waiting for it to get to target. Inflation is cooling after the core reading only posted a 0.3% monthly increase. ​ The headline reading dropped more than expected to 7.7% from a year ago, which is noticeably better than the peak reading from June of 9.1%. Inflation almost always proves to be stickier, so traders should not be surprised if the descent in pricing pressures takes a little while longer. Good prices have been coming down and that was supported by lower readings from cars, apparel, and energy services. ​ Wall Street is closely watching shelter prices, which rose 0.8%, the most since 1990. ​ There was some optimism with housing affordability as the monthly gains slowed for rents. ​ Shelter prices always take the longest to come down, so investors will expect this key contributor to core PCE to remain hot for another quarter. ​ This inflation was a good sign that the Fed is on the right path to winning this war with inflation, but there will still be a lot of variables thrown its way over the next couple of quarters. ​ The Fed could easily bring rates to 5.00% and if inflation proves to be stickier, it could be as high as 5.50%. ​ FX King dollar has left the building after a soft inflation report cemented the Fed’s downshift to a slower pace of tightening and revived hopes of a soft landing. The price reaction to this inflation report was a bit excessive but could be justified if the next couple of inflation reports are just as cool. ​ ​ ​ ​ Cryptos A dark crypto period was supposed to begin following the FTX debacle, but a cooler-than-expected inflation report gave every risky asset a massive boost. ​ FTX contagion risks remain elevated and while today’s broad-based crypto rally is rather impressive with bitcoin rising over 10% and ethereum surging by 16%, investment into cryptocurrencies will likely struggle here as too many key institutional investors and crypto companies have money tied up with the bankruptcy bound exchange. ​ Until we see which players were impacted by FTX and if we see other exchanges vulnerable to a liquidity crunch, any crypto rebound might be faded. More details about the actions of FTX will lead to harsher regulatory guidelines for all crypto exchanges. ​ Reportedly FTX used customer assets for risky trades, which means it seems unlikely anyone will want to rescue this company. ​ ​ ​ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Inflation cools, stocks post best day in two years, bye-bye king dollar, FTX debacle, cryptos rally on soft CPI - MarketPulseMarketPulse
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Dollar to Japanese yen - Oanda's Kenny Fisher points to the greenback's frailty

Kenny Fisher Kenny Fisher 10.11.2022 23:16
The Japanese yen has skyrocketed in today’s North American session. USD/JPY is trading at 141.81, down 3.1%. US inflation drags down the dollar The October inflation report was lower than expected, triggering a mass rush from the US dollar. The yen has jumped on the bandwagon and risen to its highest level since September 22nd. Inflation didn’t exactly tumble, but investors seized on the fact that both the headline and core readings were lower than projected, raising hopes of a soft landing for the economy. Headline CPI dropped to 7.7%, down from 8.2% in September and below the consensus of 8.0%. Core inflation slowed to 6.3%, down from 6.6% and lower than the forecast of 6.5%. The surprisingly low numbers have turned rate pricing on its head. Prior to the inflation release, the markets had priced in 55% for a 50 bp increase and 45% for a 75 bp hike. This has changed to 80-20 in favor of a 50 bp hike, which has sent the US dollar into a broad retreat. Despite the festive mood on Wall Street today, the Fed hasn’t turned dovish – a 0.50% rate hike is still a sizeable move, and the terminal rate could end up being as high as 5.50% The yen has steamrolled the dollar today, but will this be just a blip in the yen’s prolonged descent? Today was all about US dollar weakness rather than any newfound strength in the yen. The next Fed meeting is a month away, with additional inflation and employment releases prior to the meeting. If those releases are stronger than expected, expectations of a 0.75% hike will grow and the US dollar will likely move higher. The US/Japan rate differential continues to widen and will keep weighing on the yen, with no sign that the Bank of Japan will throw the currency any lifelines. The dollar may have taken a licking today, but tomorrow is a new day. USD/JPY Technical USD/JPY has broken below several support levels today. The next support level is 139.66 147.07 and 147.74 are the next resistance levels This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen soars after US inflation surprise - MarketPulseMarketPulse
RBI's Strategic INR Support: Factors Behind India's Stable Currency Amidst Global Challenges

The Positive Close Of The New York Stock Exchange, A Significant Part Of The Indices Increased

InstaForex Analysis InstaForex Analysis 11.11.2022 08:00
At the close of the New York Stock Exchange, the Dow Jones rose 3.70% to a one-month high, the S&P 500 rose 5.54% and the NASDAQ Composite rose 7.35%. Dow Jones  Salesforce Inc was the top gainer among the components of the Dow Jones in today's trading, up 14.24 points or 10.02% to close at 156.30. Quotes of Apple Inc rose by 12.00 points (8.90%), ending trading at 146.87. Home Depot Inc rose 24.95 points or 8.70% to close at 311.70. Shares of McDonald's Corporation led the decline, losing 1.91 points (0.69%) to end the session at 275.88. Merck & Company Inc was down 0.30 points (0.30%) to close at 101.89 while Amgen Inc was up 0.47% or 1.36 points to close at 291. .01. S&P 500 Leading gainers among the S&P 500 index components in today's trading were Invesco Plc, which rose 17.85% to hit 18.75, Caesars Entertainment Corporation, which gained 17.83% to close at 50.62, and shares of T. Rowe Price Group Inc, which rose 16.36% to close the session at 124.65. The least gainers were McKesson Corporation, which shed 4.12% to close at 370.32. Shares of Cardinal Health Inc shed 2.79% to end the session at 77.93. Quotes of Altria Group decreased in price by 2.19% to 44.22. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Fast Radius Inc, which rose 156.19% to hit 0.26, SHF Holdings Inc, which gained 85.78% to close at 3.79, and also shares of EpicQuest Education Group International Ltd, which rose 73.79% to close the session at 1.79. The least gainers were Apyx Medical Inc, which shed 60.45% to close at 1.74. Shares of Veru Inc lost 53.56% and ended the session at 6.97. Quotes of AGBA Acquisition Ltd decreased in price by 50.89% to 5.50. Numbers On the New York Stock Exchange, the number of securities that rose in price (2830) exceeded the number of those that closed in the red (347), while quotes of 80 shares remained virtually unchanged. On the NASDAQ stock exchange, 3,100 companies rose in price, 694 fell, and 216 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 9.81% to 23.53, hitting a new monthly low. Gold Gold futures for December delivery added 2.68%, or 45.95, to $1.00 a troy ounce. In other commodities, WTI crude for December delivery rose 0.55%, or 0.47, to $86.30 a barrel. Futures for Brent crude for January delivery rose 0.90%, or 0.83, to $93.48 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 2.03% to 1.02, while USD/JPY shed 3.97% to hit 140.62. Futures on the USD index fell 2.55% to 107.65.     Relevance up to 03:00 2022-11-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/300576
The USD/JPY Price Reversed From The Lower Limit

USD/JPY Pair: There Is Opportunity To Continue Decline

InstaForex Analysis InstaForex Analysis 11.11.2022 08:04
The yen has finally decided to do what it has been preparing for for three weeks – to break into the support zone of the September consolidation. Yesterday's drop was 546 points (-3.71%). It stopped falling between the price channel lines marked at 139.70 and 141.70. At the moment, the price is above 141.70, but significant key targets have not been achieved, so we are waiting for the continuation of the selected movement. The targets are: an intermediate target (weak level) at 139.70, a stronger level at 138.45, the final target of the movement at 136.75 is the consolidation of the third week of August. On the four-hour chart, a powerful movement started from the MACD indicator line, after the third rebound from it (marked by arrows), so there is every opportunity to continue the short- and medium-term decline. We are waiting for the price to settle under the level of 141.70.  
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The Pound (GBP) Will Strengthen Its Downward Movement

InstaForex Analysis InstaForex Analysis 11.11.2022 08:07
The pound jumped 357 points on Thursday, almost hitting the September 13 high of 1.1737. Now the price is pulling back from yesterday's peak. With this rollback, a divergence begins to form with the Marlin Oscillator on the daily chart. If the divergence is completed, then the wedge-shaped graphic structure will also be completed, the exit from which will strengthen the downward movement for the pound, at least to the target level of 1.0780. The first such reason may be today's data on British GDP for the third quarter. The forecast for it assumes a contraction of GDP by -0.5% (-0.4% in September). Industrial production for September is projected at -0.2%. The price is not yet thinking of turning around on the four-hour chart - all indicators point to the prospect of growth. Therefore, we are waiting for the release of economic data and monitoring the price reaction after the fact. The indicators in the current situation seem to be in a position driven by the price. The reversal will be confirmed when the price settles under the MACD line, under the level of 1.1500.   Relevance up to 04:00 2022-11-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326845
The EUR/USD Price May Fall Under 1.0660

The Euro (EUR) Will Be Under Pressure Today

InstaForex Analysis InstaForex Analysis 11.11.2022 08:11
Yesterday's release of data on inflation in the US stirred up the markets. So much so that the prospect of completing the upward correction on September 28 was broken from the technical side, options with medium-term growth (several months) appeared, and additional multiple scenarios appeared within this emerging growing trend. One of them is a long sideways trend in the range of 0.9710-1.0360, this range is marked on the weekly chart. In fact, this is a continuation of the correction of some long-term downward trend, the correction can continue to the 138.2% Fibonacci level, to the 1.0950 area, and the long-term trend can continue to 0.9340 or lower. The option with a flat in the range of 0.9710-1.0360 is still considered as the main one. The idea of this option is based on the idea that the market is waiting for the next Federal Reserve meeting on December 14, which should confirm the assumptions about raising the rate by no more than 0.50%. To date, the price has reached the target level of 1.0205 and is slightly rolling back from it. Yesterday's growth was 196 points. The greatest dynamics of the euro (but falling) was on March 19, 2020 (-247 pp) at the beginning of the anti-COVID hysteria. Now we are waiting for the price to roll back to the range of 1.0100/20. If the range stays, then the price may then try to overcome 1.0205. If the range does not, then the bears' next target will be 1.0051. The price even formed a divergence with Marlin on the four-hour chart. Most likely the euro will be under pressure today and on Monday. We are waiting for the price to drop to the range of 1.0100/20. Further according to the circumstances described above.     Relevance up to 04:00 2022-11-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326847
The Price Of EUR/USD Pair Will Develop Sideways Movement

The Inflation Report Was The Reason For The Growth Of The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 11.11.2022 08:17
Analysis of EUR/USD, 5-minute chart Yesterday, the euro/dollar pair continued to fall quietly until the US inflation report was released. In principle, there is nothing to analyze on Thursday other than this report. The consumer price index in America slowed down to 7.7% y/y from 8.2%. Thus, the slowdown was 0.5%, which is quite a lot. We have reiterated that the more and faster inflation slows down, the less reason the Federal Reserve has to continue aggressively raising rates. After all, the rate is being raised precisely in order to curb inflation! Of course, 7.7% is still too far from the target 2%, but inflation should not only come down in the event of continuous Fed rate hikes. At this time, the rate exceeds the "neutral" level, so monetary policy will in any case have a "cooling" effect on the economy. Therefore inflation in any case should fall. The only question is at what speed. And the Fed's succeeding decisions depend on this speed. In regards to trading signals, the picture on Thursday was simply amazing. One signal was formed during the day, available for processing, but with one big "but". It was formed exactly 5 minutes before the release of the inflation report. We usually recommend not entering the market before important events, but experienced traders could try to work out this signal by placing Stop Loss at a distance of 20-30 points. In this case, it was possible to make a profit of up to 200 points. But remember that the price could easily go in the opposite direction, as the market does not always react logically. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000). Analysis of EUR/USD, 1-hour chart You can see that the pair continues to rise on the one-hour chart, has overcome the Ichimoku cloud on the 24-hour timeframe, as well as all the Ichimoku lines on the 4-hour timeframe. Yesterday, naturally, the inflation report was the reason for the growth. If it weren't there or if it turned out to be weak, then the dollar could continue its growth and we would see a reverse movement. Therefore, it is not worth making loud conclusions about the euro's strength based on yesterday. On Friday, the pair may trade at the following levels: 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, 1.0340-1.0366, as well as Senkou Span B (0.9912) and Kijun-sen (1.0019). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events are planned again in the European Union, and a report on consumer sentiment will be released in America today. However, today the pair may continue to trade in a volatile manner. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 01:00 2022-11-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326837
The Upside Of The EUR/USD Pair Remains Limited

Technical Outlook Of The Euro To US Dollar Pair (EUR/USD) By Analytical Expert Of InstaForex

InstaForex Analysis InstaForex Analysis 11.11.2022 08:19
EUR/USD has now broken clearly above resistance at 1.0095 removing the risk of the rally from 0.9538 to 1.0095 as an A-B-C correction. So, we should at least expect EUR/USD to continue higher to 1.0302 and ideally even higher. That said, we see strong resistance building up in the 1.0228 - 1.0363 area and expect the rally to be rejected for a while for a setback towards 1.0000 before the next upside assault should be expected. According to our long-term scenario, the correction from 1.6038 to 0.9538 is complete. We consider the ongoing price action as part of the new impulsive price action and ultimately a rally above the former peak at 1.6038 but that is years ahead in the future.   Relevance up to 07:00 2022-11-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/300608
Crude Oil Ended Higher | Initial Jobless Claims Rose Marginally

Crude Oil Ended Higher | Initial Jobless Claims Rose Marginally

Saxo Bank Saxo Bank 11.11.2022 08:26
Summary:  A softer US CPI print sent the equity markets skyrocketing in an extreme reaction, but there was some pushback against dovish expectations from Fed speakers and WSJ’s Timiraos, highlighting that a 50bps rate hike at the December Fed meeting is still in play. Dollar weakness fueled gains across the metals space, but oil market remained volatile on concerns around China’s covid cases even as the authorities urged targeted measures will remain in place. UK GDP due in the day ahead before focus turns to G20 meetings next week. What’s happening in markets? The S&P 500 (ESZ2) jumped 5.5% and Nasdaq 100 (NQZ2) soared 7.5%, staging the biggest rally in two years US equities surged the most since 2020 on a softer-than-expected CPI report. S&P 500 gained 5.5% and Nasdaq 100 soared 7.5%. The gains were board-based. All 11 sectors of the S&P 500 rose, with the information technology, real estate, and consumer discretionary sectors leading the charge higher. Semiconductor names surge, Marvel Technology (MRVL) up 16.1%, Nvidia (NVDA:xnas) up 14.3%, and Advanced Micro Devices (AMD:xnas) up 14.3%.  Amazon (AMZN:xnas) surged 12%, Meta (META:xnas) gained 10.3% and Apple (AAPL:xnas) climbed 8.9%. The shift of sentiment from risk-off to risk-on saw the crypto stabilize and Bitcoin rally 13%. US treasury (TLT:xnas, IEF:xnas, SHY:xnas) soared, yields tumbling 22 to 30bps across the curve Treasuries jumped in price and yields plunged on slower-than-expected CPI data. Large buying first concentrated on the 2-year and the 5-year notes. The yield curve bull-steepening in initially, with the 2-10 spread narrowed 8bps to minus-41bps at one point. However, the long ends rallied strongly in the afternoon following a strong 30-year bond auction. The curve reversed and became more inverted with 2-10-year finishing the session at minus-52 bps. At the close, 2-year yields fell 25bps to 4.33% and 10-year yields tumbled 28bps to 3.81%. On Fedspeak, Cleveland Fed President Mester said “services inflation, which tends to be sticky, has not yet shown signs of slowing” and she views “the larger risks as coming from tightening too little”. San Francisco Fed President Mary Daly remarked “it was indeed good news that inflation moderated its grip a bit” but “one month of data does not a victory make”. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) retreated on Covid outbreaks Hong Kong and China stocks retreated on Thursday as China’s daily new domestic Covid cases came in above 8,000 second day in a row and Guangzhou extended lockdown in one of its districts. Hang Seng Index dropped 1.7% and CSI 300 lost 0.8%. China Internet and EV stocks underperformed. NIO (0988:xhkg) fell 13.2% on a bigger-than-expected loss in Q3 and a Q4 guidance below analysts’ expectations. Overnight in U.S. hours, Hang Seng Index futures jumped 4.6% after U.S. stocks soared on softer CPI data. ADRs of Alibaba (09988:xhkg), Meituan (03690:xhkg), and Tencent (00700) surged around 7% to 9% in New York hours. FX: Massive dollar selloff in the aftermath of the US CPI release The Dollar Index saw its greatest losses in a single day since 2009, falling to lows of 107.7 after the release of that softer-than-expected US CPI. The biggest gainer on the G10 board was JPY, no surprises there, given its yield-sensitive nature and the plunge in US yields. USDJPY broke below 141 although it has rebounded to 141.68 in the Asian morning. If we do see hawkish Fed comments in the coming days/weeks, some of this rally in the JPY is likely to be unwound but overall the trend in USDJPY remains biased to the downside now with most of the interest rate expectations already in the market. GBPUSD was also a big gainer as it surged to the 1.17 handle, but a test lies ahead with UK GDP release today likely to confirm the onset of a recession (read preview below). Crude oil (CLZ2 & LCOF3) volatile amid dollar weakness and China's Covid concerns Crude oil ended higher in a volatile session as earlier concerns of weak demand were overtaken by the broader market rally in response to lower inflation and the weakness in the US dollar. Concerns however remain on China’s Covid cases with Beijing reporting its highest number of cases in a year, which kept the gains restrained. WTI futures rose above $86/barrel while Brent went above $94 before retreating later. Cooler US inflation prompts gains across metals The weaker USD eased pressure on the base metals complex, with copper rising more than 2%. This was boosted by reports coming out of a Politburo Standing Committee meeting that suggest Beijing would take more targeted measures to avoid damage to the economy. If China’s Zero covid measures remain targeted, this could shift focus back to supply issues and dollar weakness. Copper (HGZ2) broke the September high of $3.6925, and is now testing resistance at $3.78. Gold (XAUUSD) also broke above the double top at 1730, likely suggesting that the bottom is in place. Silver (XAGUSD) rose to $21.83 but has since returned to the resistance turned support at $21.50.   What to consider? Softer US inflation, but what does it mean for the Fed? US CPI was softer than expected across the board, as headline M/M and Y/Y printed 0.4% (exp. 0.6%, unchanged) and 7.7% (exp. 8.0%, prev. 8.2%), respectively, while the core metrics came in at 0.3% M/M (exp. 0.5%, prev. 0.6%) and 6.3% Y/Y (exp. 6.5%, prev. 6.6%) on a Y/Y basis. Shelter prices still remained hot while the used vehicle prices declined by 2.4% M/M. While the inflation still remains high and far from Fed’s 2% target, it can be expected that the trend is lower. Markets cheered the release, expecting a downshift in Fed’s rate hike trajectory which has already been communicated at the last FOMC meeting. December Fed rate hike pricing is still close to 50bps, while the terminal rate projections have slid lower to 4.9% for May 2023. However, it is worth noting that there is one more labor market report and another CPI report due before the FOMC’s Dec 13-14 meeting. Fed speakers pushed back on the market rally The kind of market reaction we have seen to the soft CPI print in the US yesterday confirms that investors still remain on edge expecting a Fed pivot. This can prove to be counterproductive, as easing of financial conditions can derail this downtrend in inflation and reverse the less hawkish path that Fed is expected to take in the coming months. The Cleveland Fed’s Loretta Mester said that, while she was encouraged by October’s data, she sees bigger risks from tightening too little than too much. Kansas City Fed President Esther George said monetary policy “clearly has more work to do”, while the Dallas Fed’s Lorie Logan said earlier that inflation has a long way to go before it reaches the central bank’s target. They also noted it may be time to slow down the pace of hikes, however, but that it shouldn’t be interpreted as easing policy. Equally importantly, WSJ's Timiraos tweeted, "The October inflation report is likely to keep the Fed on track to approve a [50bps rate hike] next month. Officials had already signaled they wanted to slow the pace of rises and were somewhat insensitive to near-term inflation data". Easing financial conditions will likely drive the Fed speakers to a further hawkish tilt in the coming days. US jobless claims still underscore a tight labor market Initial jobless claims rose marginally to 225k from 218k, and above the expected 220k. Meanwhile, continued claims also exceeded consensus to print 1.493mln (exp. 1.475mln) from, the revised higher, 1.487mln. While this still continues to show a tight labor market in the US, it may be worth watching how it moves in the coming months especially after the wave of tech sector layoffs that we have seen in the past few weeks. The latest in the Crypto space Bloomberg reports a balance sheet hole of $8bn for FTX. Likewise, the Wall Street Journal reports that Alameda Research owes FTX about $10bn. Reuters says that the loan to Alameda Research was equal to at least $4bn. Sam Bankman-Fried (SBF), however, went to Twitter to give an explanation. He goes on to talk about two major mistakes that he has made, one being that he underestimated the demand for sudden liquidity by clients withdrawing funds. In terms of liquidity, SBF further says that: “FTX International currently has a total market value of assets/collateral higher than client deposits (moves with prices!). But that's different from liquidity for delivery--as you can tell from the state of withdrawals. The liquidity varies widely, from very to very little.” Remember, that this is contrary to the story by Bloomberg and likely the Wall Street Journal and Reuters story. It now seems plausible that FTX has a serious hole in its balance sheet”, though, hard to judge anything at this stage given the amount of rumors and unconfirmed information floating around. What remains clear is that any liquidity event will unlikely remain isolated as cascading margin calls and contagion effects are likely to be felt beyond the crypto space. UK GDP to confirm the onset of a recession UK’s Q3 GDP is scheduled for release today and the first quarterly negative print of the current cycle is expected to be seen. Consensus forecast is seen at 2.1% YoY, -0.5% QoQ, significantly lower than the second quarter print of 4.4% YoY, 0.2% QoQ. August GDP data had already begun to show a negative print with -0.3% MoM and the trend will only likely get worse in September, exacerbated by a one-off factor relating to Queen Elizabeth II’s funeral in the month, which was a national holiday. The economy is already facing a cost of living crisis, and both fiscal and monetary policy have to remain tight in this very tough operating environment. Technically, a recession may still be avoided as activity levels picked up in October, but still it will remain hard for the UK to dodge a recession going into 2023. This suggests there maybe some downside for the sterling, especially as the market refuses to cater to the Bank of England’s warning that the current expectations of terminal rate may be too steep. Credit growth in China slowed in October China’s new aggregate financing fell to RMB908 billion in October, much lower that the RMB1,600 billion expected in the Bloomberg survey and the RMG3,527 billion in September. The growth of outstanding aggregate financing slowed to 10.3% in October from 10.6% in September. New RMB loans declined to RMB615 billion in October, below the 800 billion consensus estimate and much smaller than the RMB2,470 billion in September. New RMB Medium to long-term loans to corporate fell to RMB462 billion as loan demand was weak. China’s Politburo Standing Committee met to discuss pandemic control policies  On Thursday, President Xi and the rest of the Politburo Standing Committee had a meeting to discuss its policies on pandemic control. While the statement from the meeting reiterated adherence to the dynamic zero-Covid policy, it also highlighted the push for vaccination and treatments and called on government officials to implementation of control measures more scientifically targeted and precise and to avoid doubling down on each layer of execution.   China’s Singles’ Day this Friday, Nov 11 Investors will watch closely Alibaba, JD.com, and other online retailers’ sales on Singles’ Day this Friday to gauge the strength of China’s private consumption. Analysts are expecting slower sales growth as recent data indicated slower user growth across online shopping platforms.   For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-11-nov-2022-11112022
Underestimated Risks: Market Underestimating Further RBA Tightening

The Recently Firmer Oil Prices Weigh On The Indian Rupee (INR)

TeleTrade Comments TeleTrade Comments 11.11.2022 08:32
USDINR licks its wounds at the lowest levels since late September. Eight-month low US CPI bolstered hopes of Fed’s easy rate hikes going forward. China-linked risk-aversion joins sluggish market moves to trigger USDINR consolidation. US Michigan CSI, risk catalysts eyed for fresh impulse. USDINR prints mild gains around 80.70 as it pares the recent losses around a seven-week low during Friday’s Asian session. In doing so, the Indian Rupee (INR) pair takes clues from the market’s cautious mood, after a euphoric optimism, amid a sluggish start and a light calendar. Other than the absence of major data/events, the coronavirus woes from China also propel the USDINR prices. That said, China’s Beijing reports the biggest daily jump in the covid cases in over a year. For the nation as a whole, the daily coronavirus numbers grew past 10,000 for the first time in seven months. Elsewhere, firmer equities in the Asia-Pacific region and inactive yields, thanks to the strong Wall Street closing and bank holidays in the US and Canada, also underpin the USDINR rebound. Furthermore, the US 10-year Treasury yields remain inactive around the monthly low near 3.81%, flashed on Thursday, after registering the heaviest slump since early December 2021. It should be noted that a sharp decline in the US Consumer Price Index (CPI) for October surprised markets by declining to 7.7% YoY, the lowest since last March, versus 8.0% expected and 8.2% prior. More importantly, the Core CPI dropped to 6.3% compared to 6.5% market forecasts and 6.6% previous readings. While reacting to the US inflation, Dallas Federal Reserve President Lorie Logan said that October CPI inflation data is a welcome relief while adding that (it) may soon be appropriate to slow pace of rate increases. On the same line, Federal Reserve Bank of Philadelphia President Patrick Harker said on Thursday that the US Federal Reserve could slow the rate hike pace in the coming months, as reported by Reuters. It should be noted that Kansas City Federal Reserve President Esther George, Federal Reserve Bank of Cleveland President Loretta Mester and San Francisco Fed President Mary Daly also recently promoted easy rate hikes for future meetings. As a result, the CME’s FedWatch Tool signals a nearly 80% probability of the Fed’s 50 basis points (bps) rate hike in December versus around 55% just following the last week’s Fed meeting. It’s worth noting that the recently firmer oil prices, up 0.61% near $86.70 by the press time, also weigh on the Indian Rupee due to the nation’s heavy reliance on energy imports and a troublesome level of the Current Account Deficit (CAD). Looking forward, the first readings of the US Michigan Consumer Sentiment Index (CSI) for November, expected 59.5 versus 59.9 prior, could join the updates from China and Fedspeak to entertain USDINR traders. Even so, the bears are likely to remain less affected considering the latest shift in the market’s outlook for the Fed’s next move due to the US inflation data. Technical analysis 100-DMA joins the nearly oversold RSI conditions to challenge USDINR bears around 80.50. The recovery moves, however, remain elusive unless crossing the 50-DMA hurdle surrounding 81.45.
Further Downside Of The AUD/JPY Cross Pair Is Expected

Fears Emanating From China May Challenge The AUD/USD Traders

TeleTrade Comments TeleTrade Comments 11.11.2022 08:36
AUDUSD picks up bids to pare intraday losses around seven-week high. China reports the biggest jump in daily coronavirus cases since April. The US Dollar licks US CPI-led wounds amid sluggish yields. Receding hawkish bets keep the greenback bears hopeful ahead of US Michigan CSI data. AUDUSD consolidates intraday losses around 0.6630, the highest levels since late September, as the market’s cautious optimism contrasts with the risk-negative headlines from China during early Friday. That said, the Aussie pair rallied the most since October 2011 the previous day before the bulls took a breather amid a lack of major data/events during the day-start moves. Considering Australia’s close trading ties with China, the latest surge in the dragon nation’s covid numbers challenges the AUDUSD bulls. It’s worth noting Beijing reports the biggest daily jump in the covid cases in over a year as the mainland sees the daily coronavirus numbers growing past 10,000 for the first time in seven months. On the other hand, optimism in the Asia-Pacific equity markets, by tracking Wall Street’s strong close, challenges the risk-barometer pair’s sellers. However, a banking holiday in the US and Canada joins sluggish US Treasury yields to challenge the pair’s moves. Amid these plays, Asian stocks rise but the S&P 500 Futures struggles for clear directions around a two-month high. It should be noted that the eight-month low of the US Consumer Price Index (CPI) bolstered the case of the US Federal Reserve’s (Fed) easy rate hike the previous day and propelled the pair prices the most in 11 years. Moving on, a light calendar and fears emanating from China may challenge the AUDUSD traders ahead of the first readings of the US Michigan Consumer Sentiment Index (CSI) for November, expected 59.5 versus 59.9 prior. However, the buyers are likely to keep the reins unless today’s data prints an extremely high outcome. Technical analysis AUDUSD stays on the bull’s radar unless it drops back below the 0.6500 support confluence, comprising the previous resistance line from August and the 50-DMA.
Conflict Over Taiwan Would Trigger A Huge Global economic Shock

Conflict Over Taiwan Would Trigger A Huge Global economic Shock

TeleTrade Comments TeleTrade Comments 11.11.2022 08:40
US President Joe Biden hopes to limit deterioration of ties with China when he meets its leader Xi Jinping next week, but will be honest about U.S. concerns, including over Taiwan and human rights, a senior administration official said on Thursday, reported Reuters. On the other hand, UK Today mentioned that the US has warned European countries that a conflict over Taiwan would trigger a huge global economic shock, in an effort to step up contingency planning amid rising concern about military action in the Indo-Pacific. “The US has warned European countries that a conflict over Taiwan would trigger a huge global economic shock, in an effort to step up contingency planning amid rising concern about military action in the Indo-Pacific,” adds the news. The stakes are high as the White House conveyed that US President Biden will hold talks on Monday with Xi on the sidelines of a Group of 20 Nations (G20) summit in Indonesia, their first face-to-face meeting since Biden became President in January 2021. Reuters also quotes a senior administration official from the US saying that there would be no joint statement from a meeting at which there are no expectations for specific agreements. “White House national security adviser Jake Sullivan told reporters later that the administration would brief Taiwan on the results of Biden's meeting with Xi, aiming to make Taipei feel "secure and comfortable" about U.S. support,” per the news. AUDUSD remains mildly offered The news challenges AUDUSD buyers, as well as the market’s risk-on mood, amid a sluggish Friday. That said, the Aussie pair was last seen picking up bids to 0.6620, down 0.15% intraday. Also read: AUDUSD grinds near 0.6630 as China’s covid woes jostle with US inflation-led optimism
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The British Central Bank’s (BoE) Plan To Sell Gilts

TeleTrade Comments TeleTrade Comments 11.11.2022 08:42
GBPJPY struggles to extend the daily gains amid sluggish yields, pre-data anxiety. Optimism surrounding Brexit, BOE’s next move keeps buyers hopeful but fears of Japan’s meddling test upside. Yields dropped after US inflation data amplified risk-on mood. Fears that UK Q3 GDP will amplify recession woes weigh on the prices. GBPJPY prints mild gains around 165.80 while snapping a three-day downtrend at the lowest levels in a month. In doing so, the cross-currency pair struggles to cheer the Japanese Yen’s (JPY) weakness amid cautious optimism in the UK. The reason could be linked to the bank holiday in the US and anxiety ahead of the UK’s preliminary Gross Domestic Product (GDP) figures for the third quarter (Q3) of 2022. Firmer equities in the Asia-Pacific region join the hopes of Japan’s meddling to defend the JPY to exert downside pressure on the Yen. Also likely to have favored the GBPJPY price could be the mixed readings of Japan’s Producer Price Index (PPI) for October, stronger-than-expected on YoY but matching forecasts on MoM. Talking about the risks, an eight-month low print of the US Consumer Price Index (CPI) allowed the US Federal Reserve (Fed) policymakers to back easy rate hikes and drown the US Dollar, which in turn helped the market sentiment to bolster. Amid these plays, Asian stocks rise but the S&P 500 Futures struggles for clear directions around a two-month high. It should be noted that the US 10-year Treasury yields remain inactive around the monthly low near 3.81%, flashed on Thursday, after registering the heaviest slump since early December 2021. Also challenging the GBPJPY buyers, other than the sluggish yields, are fears emanating from China’s covid conditions and anxiety ahead of Monday’s meeting between US President Joe Bide and his Chinese counterpart Xi Jinping. At home, UK PM Rishi Sunak’s optimism to solve the Brexit issue appears to defend the GBPJPY buyers of late. “British Prime Minister Rishi Sunak said on Thursday he was pleased with the progress the government was making on resolving a long-running post-Brexit trade row with the European Union over Northern Ireland,” reported Reuters. Furthermore, headlines from the Bank of England (BOE), suggesting the British central bank’s plan to sell gilts, also favor the pair buyers. “The Bank of England said on Thursday that from Nov. 29 it would start to sell back to the market some of the 19 billion pounds ($22 billion) of long-dated and index-linked gilts which it bought last month to quell market turmoil,” said Reuters. Looking forward, the UK Q3 GDP is expected to print -0.5% QoQ figure versus 0.2% prior and may recall the pair bears. However, fears of a recession are already priced-in and hence a surprise positive could have a welcome reaction. Also read: UK GDP Preview: Barrelling toward recession. Pound Sterling set to fall? Technical analysis Although a downside break of the one-month-old ascending trend line, around 166.75 by the press time, keeps sellers hopeful, the 100-day EMA challenges the bears around 164.25.    
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

Loonie (USD/CAD) Bulls Are Supported By A Hawkish Commentary From The Bank Of Canada

TeleTrade Comments TeleTrade Comments 11.11.2022 08:47
USDCAD has witnessed barricades around 1.3350 amid positive market sentiment. Loonie bulls are supported by BOC’s hawkish commentary and a recovery in oil prices. Going forward, US long-term inflation report will be of utmost importance. The USDCAD pair has sensed selling pressure around 1.3350 in the Tokyo session after attempting a pullback move around 1.3300. The asset has turned sideways which indicates further inventory distribution, which will deliver more weakness in the counter. Meanwhile, the risk profile has strengthened further as S&P500 futures are extending their gains post a bumper rally on Thursday. The US dollar index (DXY) has refreshed its day’s low at 108.00 and is expected to display more downside ahead. A sheer decline in US inflation brought a bloodbath in US government bonds. The 10-year US Treasury yields dropped to 3.8% as chances from the CME FedWatch tool claim that 75 basis points (bps) rate hike is losing its stream now. Going forward, investors will focus on long-term US inflation expectations. The US economy is needed to pass this test too as an increment in the longer-term inflation indicator may spoil the party for risk-perceived assets. The Fed has been continuously reiterating that their long-term inflation expectations are well-anchored at around 2%. And, previously the economic data landed at 2.9%. Meanwhile, Loonie bulls are supported by a hawkish commentary from the Bank of Canada (BOC) Governor Tiff Macklem and a decent recovery in the oil prices. BOC Governor cited that “Canadians should expect even more rate hikes to come on top of six that have already happened this year,” during an interview with CBC News in the late New York session. He further added that layoffs will increase, the growth rate may come to zero in the next few quarters, and the central bank is fine with a mild recession as a price to bring down inflation to desired levels. Oil prices have rebounded as a decline in US inflation has trimmed the risk of recession. A slowdown in the rate hike pace by the Fed may bring a recovery in the scale of economic activities, which will eventually accelerate oil demand ahead.
The China’s Covid Containment Continued To Negatively Impact The Output At The End Of 2022

Visitors To China Will Have To Undergo A 5-Day Quarantine

TeleTrade Comments TeleTrade Comments 11.11.2022 08:56
After the US Consumer Price Index (CPI)-led risk rally, markets witnessed another boost to risk sentiment in Friday’s early European trading after China reduced its quarantine period for travelers while the system penalizing airlines for bringing virus cases into the country will also be scrapped, per Bloomberg. “Travelers into China will be required to spend five days in a hotel or government quarantine facility,” followed by three days confined to home, the country’s National Health Commission said in a statement Friday. Market reaction The US S&P 500 futures jumped 0.50% in reaction to the China headlines, as the move is seen a big pivot to Beijing’s strict zero-Covid policy. AUDUSD built on the rebound above 0.6600, currently trading at 0.6636, adding 0.30% on the day.  
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

The US Dollar (USD) Suffered Heavy Losses | UK Gross Domestic Product (GDP) Grew

TeleTrade Comments TeleTrade Comments 11.11.2022 09:05
The upbeat market mood remains intact on the last trading day of the week as investors cheer the soft inflation data from the US and news of China easing the Covid-related restrictions. The US Dollar Index continues to edge lower below 108.00 after having lost more than 2% on Thursday and global stock indices push higher. Bond markets in the US will be closed in observance of the Veterans Day holiday but Wall Street will operate at the usual hours. The US economic docket will feature the University of Michigan's Consumer Sentiment Survey (preliminary) for November and investors will keep a close eye on central bank speakers ahead of the weekend. The US Bureau of Labor Statistics announced on Thursday that inflation in the US, as measured by the Consumer Price Index (CPI), declined to 7.7% on a yearly basis in October from 8% in September. The Core CPI, which excludes volatile food and energy prices, fell to 6.3% from 6.6% in the same period. With both of these readings coming in below market expectations, the CME Group FedWatch Tool's probability of a 50 basis points Fed rate hike in December jumped above 80% from 50% earlier in the week. In turn, major equity indexes in the US registered impressive gains, the US Dollar suffered heavy losses and the benchmark 10-year US Treasury bond yield declined toward 3.8%, losing nearly 7% on the day. US Inflation Analysis: Hiking is hard in the fog, Dollar set to decline (until the next CPI). Earlier in the day, China's National Health Commission announced that they have decided to reduce the required quarantine times for travellers and people who had close contact with identified Covid cases. The Shanghai Composite Index was last seen rising nearly 2% on the day and Hong Kong's Hang Seng Index was up 6.8%. Reflecting the risk-positive market environment, US stock index futures are rising between 0.5% and 0.7%.  The UK's Office for National Statistics (ONS) reported on Friday that the Gross Domestic Product (GDP) grew at an annualized rate of 2.4% in the third quarter, compared to the market expectation of 2.1%. Other data from the UK showed that Industrial Production expanded by 0.2% on a monthly basis in September. GBPUSD largely ignored the latest data and was last seen moving sideways slightly above 1.1700. EURUSD registered impressive gains on Thursday and continued to edge higher during the Asian trading hours on Friday. The pair was last seen trading at its highest level since mid-August slightly above 1.0200. USDJPY lost more than 400 pips on Thursday and touched its weakest level in seven weeks near 140.00 before staging a rebound on Friday. At the time of press, USDJPY was up 0.5% on the day at 141.65. Fueled by plunging US Treasury bond yields, gold price rose nearly 3% on Thursday and registered one of its largest one-day gains of the year. XAUSD is currently trading above $1,750 and it's up nearly 5% since the beginning of the week. Bitcoin gained 10% on Thursday after having lost more than 20% in the first half of the week. BTCUSD, however, seems to be having a difficult time gathering bullish momentum early Friday as markets keep a close eye on developments surrounding the FTX drama. As of writing, Bitcoin was down nearly 2% on the day at $17,250. Ethereum trades in negative territory at around $1,250 early Friday following Thursday's 17% gain. California financial regulator announces FTX investigation. Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Cryptos bounce as FTX CEO vows to do right by investors.
Apple Q3 2023 Results – Surpassing Expectations and Aiming for New Heights

The EUR/GBP Pair's Bulls Are All Set To Challenge

TeleTrade Comments TeleTrade Comments 11.11.2022 09:15
EURGBP remains mildly bid while showing no major reaction to the UK, German data. UK’s Q3 GDP eased to -0.2% QoQ versus -0.5% expected and 0.2% prior. Germany’s HICP inflation gauge confirmed 11.6% YoY figures for October. The market’s cautious optimism underpins bullish bias, off in the US, and Canada restricts immediate advances. EURGBP holds onto smaller gains around 0.8730, picking up bids of late, even as the UK’s third quarter (Q3) Gross Domestic Product (GDP) printed mixed data heading into Friday’s London open. That said, the preliminary prints of the UK’s Q3 GDP signaled that the British economy contracted by 0.20% QoQ versus -0.50% market consensus and the previous expansion of the 0.20% QoQ figure. On the other hand, the final prints of Germany’s inflation data for October, as per theHarmonized Index of Consumer Prices (HICP) measure confirmed the 11.6% initial readings. With this, the market’s cautious optimism and the Euro’s (EUR) benefit from the US Dollar’s (USD) south-run, mainly after the previous day’s US inflation data, keeps the EURGBP buyers hopeful. It’s worth noting that the US Consumer Price Index (CPI) dropped to the lowest levels in the eight months the previous day and bolstered the hopes of an easy Fed rate hike. The same contrast with the hawkish comments from the European Central Bank (ECB) representatives and enable the EUR to remain firmer. However, a bank holiday in the US and Canada restricts the market’s latest moves. On the same line are mixed concerns surrounding the US-China tussle over Taiwan and the Covid conditions in China. Amid these plays, the US S&P 500 futures stay on their way to refreshing the two-month high while the US Treasury yields remain pressured, mostly inactive. Moving on, EURGBP traders should pay attention to the updates from the UK government and the Bank of England (BOE) concerning the reaction to the UK Q3 GDP, for fresh impulse. Technical analysis A daily closing below the 21-DMA immediate support, around 0.8690 by the press time, appears necessary for the EURGBP bears to retake control. Until then, the bulls are all set to challenge the monthly resistance line, around 0.8825 by the press time.
The UK Economy Looks Worse Than The Rest Of The G7 Countries

UK Data Shows A Less Tragic Slowdown Trajectory

Alex Kuptsikevich Alex Kuptsikevich 12.11.2022 08:48
The pound rally gained new momentum on Friday morning, following a respite after the 3% rise in GBPUSD on Thursday. The British currency was supported predominantly by better-than-expected economic data and comments from the Governor of the Bank of England on the intention for further rate hikes. Forecast The UK economy contracted by 0.2% in the third quarter - noticeably less than the forecasted drop of 0.5%. One year ago, growth in the same period diminished to 2.4% after 4.4% in the second quarter and +2.1% expected. For September, the economy contracted by 0.6%, following a decline of 0.1% in August. Industrial production and manufacturing Industrial production added 0.2% in September, losing 3.1% y/y. Manufacturing is more challenging, holding on to volumes in September after contracting by a cumulative 2.9% in the previous three months. Separately, there is an improvement in the balance of foreign trade. The monthly deficit decreased to 15.6bn compared to 17.2bn a month before, 16.1bn a year ago and a peak of 23 in January. However, this is well above 'normal' levels from 2013 to 2019, near 12bn. Exports are up 46% y/y, or 11.8bn and imports are up 27% or 11.4bn. UK economy The UK economy has started to contract without surprises, evidenced by earlier labour market figures. Nevertheless, so far, it is a softer landing than previously feared. GBP/USD Nevertheless, it is essential for market participants that the published data shows a less tragic slowdown trajectory and that the decline in commodity prices in recent months is easing the pressure on imports and industry. In this environment, there are more and more reasons for long-term buying of the British pound, which renewed its historic low against the dollar in September. As a result, the GBPUSD is now above 1.1750, having beaten off losses since August. The rise in the British currency also shows signs of breaking the downtrend as GBPUSD has surpassed previous local highs and has consolidated above the 50-day average. On the technical analysis side, GBPUSD may encounter little resistance up to the 1.20 area by the end of the month, where the bulls will still have to prove their strength.
The AUD/USD Pair’s Downside Remains Off The Table

The AUD/USD Pair Become A Reversal For The Correction

InstaForex Analysis InstaForex Analysis 14.11.2022 08:00
The Australian dollar rose by 86 points on Friday, a little more than 60 points until it hits the upper limit of the price channel, and the price's intention to turn down this morning raises several questions at once: will the channel limit be reached at all, will it surpass this limit, will the price reversal from current levels be confirmed, and if so, how deep will the correction be? The most solid base for completing the correction (unless, of course, this is a reversal into a medium-term fall) is the 0.6514/32 range - a strong resistance in late September-early October, as well as highs on October 27. In this case, the support at 0.6595 can act as an intermediate target. However, if the price plans to continue rising in the medium term, then this level may also become a reversal for the correction observed this morning. The Marlin Oscillator is turning down with force on the four-hour chart. This is the only sign of the price's intention to reach the support at 0.6595. We are following developments.     Relevance up to 03:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326984
The Pound (GBP) Will Probably Continue To Move Sideways

Analysis Of Cable Market (GBP/USD) By Laurie Bailey

InstaForex Analysis InstaForex Analysis 14.11.2022 08:01
In its growth, the British pound reached the range of 5-day consolidation on August 22-26. Here, a divergence began to form with the Marlin Oscillator. Settling under 1.1737 will also fix this reversal. But as long as there is no such consolidation, we can expect the closure of the gap formed today with the opening of the market. The first target of the correction is the support level of 1.1500. If the price settles below the level, then a complex and intricate struggle will begin in the 1.1170-1.1500 range, since a serious consolidation has already been formed here since the beginning of October. On the H4 chart, the Marlin Oscillator at least settles when the price rises, which a little later will turn into a reversal of this indicator. So, when the gap is closed, the price will settle under 1.1737, we are waiting for the pound's corrective decline to the support of 1.1500.       Relevance up to 03:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326986
The EUR/USD Pair Maintains The Bullish Sentiment

The Price Of The EUR/USD Pair Will Meet With The Support

InstaForex Analysis InstaForex Analysis 14.11.2022 08:04
The euro continued rising on Friday and reached the upper limit of our estimated range, marked on the weekly chart. Now you can expect a small rollback, if the price chooses a medium-term development of growth (1.07), or a deeper rollback if a flat trend develops. The first target of the correction is the support at 1.0205. The daily Marlin Oscillator has charted a downward reversal from the overbought zone. If, nevertheless, the growth continues, then the price will face resistance at 1.0470 – a low on April 28. The Marlin Oscillator is also turning down on the four-hour chart. Corrective decline may continue below 1.0205, to the range of 1.0100/20, in which the price will also meet with the support of the MACD line.   Relevance up to 04:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326988
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The GBP/USD Pair Could Be Considered An Opportunity To Buy

InstaForex Analysis InstaForex Analysis 14.11.2022 08:07
Early in the European, session the British pound is trading at 1.1776, showing some technical correction after reaching a high of 1.1853 last week. At the opening of trading this week, the British Pound opened with a bearish GAP around 1.1791, some 40 pips from Friday's close. On the 4-hour chart, we can see that this Gap has not been fully covered yet. Therefore, it is likely that in the next few hours there will be a pullback towards the 1.1850 level and then it could be considered an opportunity to sell. On Friday GBP/USD broke sharply the resistance of 8/8 Murray which has now become a key support. In case of a technical bounce around 1.1718, there could be an opportunity to buy with targets at -1/8 Murray located at 1.1962. The price could even reach the psychological level of 1.20. The pound sterling took advantage of the US dollar's weakness as a result of lower-than-expected US inflation data. This positive sentiment in investors assured them to invest in risky assets. Therefore, the pound gained momentum. It is likely to continue its rise this week and could reach the 1.20 level. Conversely, a return below 1.1718 could signify a major technical correction and the price could hit the 21 SMA located at 1.1589. A strong technical bounce is expected around this zone which could be a signal for the bulls to resume buying and GBP/USD could reach 1.1850 and even 1.19 62 (+1/8 Murray). The eagle indicator is breaking a key level of resistance and is likely to continue to give a positive signal in the coming days. Its value could reach the 95-point zone which represents an extremely overbought area. Meanwhile, any technical bounce in the GBP/USD pair could be considered an opportunity to buy. Only a daily close below 1.1580 could be a clear signal for the pound to fall and it could reach the 200 EMA located at 1.1418.   Relevance up to 04:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/300801
The EUR/USD Pair Chance For The Further Downside Movement

The Situation Of The EUR/USD Pair Is Close To Ideal, The Euro (EUR) Is Expected To Grow

InstaForex Analysis InstaForex Analysis 14.11.2022 08:12
Analysis of EUR/USD, 5-minute chart Last Friday, the euro/dollar pair continued to grow non-stop and by the end of the day it was near the level of 1.0366. A week ago it was hard to imagine what could provoke such a sharp strengthening of the euro. As it turned out, one report on US inflation with a deviation of 0.5% from the previous value was enough. We have already said that from our point of view, such a movement does not correspond to the nature and strength of the single report that provoked this movement. But the market has its own opinion on this matter. The euro has certain grounds for growth, but at the same time, it still has quite a lot of grounds for falling. In any case, there is now an ascending trend line, which perfectly visualizes what is happening in the market. In addition, the price is confidently above the lines of the Ichimoku indicator, so most of the technical factors are now on the side of the pair's growth. As for trading signals, the situation here is close to ideal. The first trading signal was formed immediately at the opening of the European trading session near the level of 1.0195. Afterwards, the price rose to the level of 1.0269, from which it initially bounced. At this moment, long positions should have been closed in profit of about 45 points. Shorts also had to be opened, and the pair, fortunately, managed to go down 15 points, so Stop Loss had to be set, at which the position was closed. Then a new buy signal was formed near 1.0269, but it was also closed by Stop Loss at breakeven. The last signal to buy near the same 1.0269 should no longer be worked out, because at that moment two false signals had already been formed near this level. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000). Analysis of EUR/USD, 1-hour chart You can see that the pair continues to rise on the one-hour chart, has overcome the Ichimoku cloud on the 24-hour timeframe, as well as all the Ichimoku lines on the 4-hour timeframe. Last week, the reason for the growth was, of course, the US inflation report. If it didn't exist or if it turned out to be weak, then we could see a reverse movement. Now, until the moment when the pair settles below the trend line, we should expect the euro's growth. On Monday, the pair may trade at the following levels: 1.0072, 1.0124, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as the Senkou Span B (0.9912) and Kijun-sen (1.0147). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. The European Union will publish a report on industrial production, meanwhile, there's nothing in the US. We believe the pair should start correcting today. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 01:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326976
The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

The GBP/USD Pair Is Expected A Serious Downward Correction

InstaForex Analysis InstaForex Analysis 14.11.2022 08:17
Analysis of GBP/USD, 5-minute chart Last Friday, the GBP/USD currency pair continued to practically "collapse", so to speak. The US dollar fell another 140-150 points. If you look at Friday's macroeconomic statistics, it becomes clear that the British currency had no reasons to grow. Early in the morning it became known that the British GDP fell by 0.6% in the third quarter, which can hardly be called a "positive factor". However, the pound continued to rise, and to be more precise, the dollar continued to fall. Thus, the market simply ignored the British statistics, preferring to work out the US inflation report, which provoked a storm of emotions. We have an ascending trend line on the hourly timeframe, and on the 4-hour timeframe, the price is above the Ichimoku indicator lines. Thus, we have an upward trend, which does not raise doubts and questions. Nevertheless, we expect at least a serious correction this week. But in regards to trading signals, the situation on Friday was very bad. Despite the fact that most of the day there was a strong trend movement, all signals were formed only around one level - 1.1760. Thus, traders could work out only the first two. Both were for short positions, in both cases the price went down more than 20 points, but never managed to reach the target level or go a significant distance in the right direction. Therefore, both positions were closed by Stop Loss at breakeven. All subsequent signals should not have been worked out. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group closed 8,500 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position indicator has been slowly rising in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 79,000 shorts and 34,000 longs. The difference, as we can see, is still very big. The euro cannot rise even though major players are bullish, and the pound will suddenly be able to grow in a bearish mood? As for the total number of open longs and shorts, here the bulls have an advantage of 21,000. But, as we can see, this indicator also does not help the pound too much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair continues its crazy growth on the one-hour chart. Even a trend line is not really necessary to determine what the current trend is. We consider such a movement somewhat unfounded, however, the market continues to buy, so the movement can theoretically continue as long as you like. However, this week we still expect a serious downward correction. On Monday, the pair may trade at the following levels: 1.1354, 1.1486, 1.1645, 1.1760, 1.1874, 1.1974-1.2007, 1.2106. Senkou Span B (1.1394) and Kijun-sen (1.1594) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. There are no major events or reports scheduled for Monday in either the UK or the US. However, the pair may continue to trade in a very volatile manner. As for the direction of movement, we expect a downward correction. The pair cannot rise for the third consecutive day based on the US inflation report alone! What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 01:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326978
The EUR/USD Price May Fall Under 1.0660

Technical Analysis Of The EUR/USD Pair By Torben Melsted

InstaForex Analysis InstaForex Analysis 14.11.2022 08:20
EUR/USD has rallied nicely and more upside progress is expected towards at least the 161.8% extension target at 1.0480. With the break above resistance at 1.0302, our preferred scenario of a long-term bottom being in place has been confirmed. So, we will be looking for much more upside progress in the weeks and months ahead. Of course, it will not be in a straight line, but the downswings should be corrective in nature and only temporary setbacks in the underlying uptrend. Relevance up to 06:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/300805
The Euro To US Dollar Instrument Did Not Change In Value

The Euro To US Dollar Pair Has Room To Grow (EUR/USD)

InstaForex Analysis InstaForex Analysis 14.11.2022 08:26
On Friday, the EUR/USD pair extended gains despite an empty macroeconomic calendar. Nevertheless, jitters were still felt in the market, resulting in a weaker dollar against the pound. The fact that the US inflation rate has started to slow down faster means the Federal Reserve may reduce the pace of tightening. Nevertheless, fundamentally, the situation has not changed. The interest rate is now seen at 5%, meaning there should be a 0.5% increase in December and two 0.25% hikes in early 2023. That is, it is likely to be just the reduction that Powell and the FOMC members spoke about last week. One successful inflation report will hardly make the Federal Reserve change its stance. Since the interest rate will reach 5% anyway, it turns out that the inflation report has had no importance. Moreover, it remains to be seen whether inflation will keep falling every month from now on. It may well be that we will see a modest decrease in the figures or non at all next month. Technically, the pair has room to grow although a week ago, it seemed unlikely that the uptrend would continue. In the H4 time frame, the quote is above the moving average, with the lower linear regression channel heading up and the upper one reversing to the upside. In the H24 time frame, the price broke through the Ichimoku cloud. These technical factors indicate the continuation of the uptrend. It remains to be seen whether fundamental or geopolitical factors will not spoil the picture, as they are the main reason behind the fall in risk assets in 2022. Democrats keep Senate majority Last week, the midterm election was held in the United States. Various reliable media sources report that Democrats will keep the Senate, as control of the House of Representatives remains undecided. Yesterday, it became known that Democrats would keep the key 50 seats in Senate. If seats were equally divided, it would be the vice president to cast the decisive vote. To win in the US House of Representatives, one of the parties must reach 218 seats. As of Sunday, 211 Republicans won House seats and Democrats won 204 seats. Even if Democrats do not win control of the lower house, they will still be able to block any decisions and proposals of Republicans in the Senate. Therefore, one thing is clear for now: the power situation in the United States has not changed, which means that Republicans have lost the midterm election again. On November 14th, the 5-day average volatility of EUR/USD totals 168 pips and is evaluated as high. On Monday, the pair is expected to move in the range between 1.0186 and 1.0521. Heiken Ashi's downward reversal will mark the beginning of a bearish correction. Closest support levels: S1 – 1.0254 S2 – 1.0132 S3 – 1.0010 Closest resistance levels: R1 – 1.0376 R2 – 1.0498 R3 – 1.0620 Outlook: The EUR/USD pair keeps moving north. So, long positions could be held with targets at 1.0498 and 1.0521 until Heiken Ashi reverses to the downside. Short positions could be considered after consolidation below the moving average with targets at 1.0010 and 0.9888. Indicators on charts: Linear Regression Channels help identify the current trend. If both channels move in the same direction, a trend is strong. Moving Average (20-day, smoothed) defines the short-term and current trends. Murray levels are target levels for trends and corrections. Volatility levels (red lines) reflect a possible price channel the pair is likely to trade in within the day based on the current volatility indicators. CCI indicator. When the indicator is in the oversold zone (below 250) or in the overbought area (above 250), it means that a trend reversal is likely to occur soon.   Relevance up to 01:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326980
The Euro May Attempt To Resume An Upward Movement

Technical Outlook Of The EUR/USD Pair In Long And Short Positions

InstaForex Analysis InstaForex Analysis 14.11.2022 08:31
Analysis of transactions in the EUR / USD pair The test of 1.0244 happened when the MACD line went up quite a lot from zero, which limited the upward potential of the pair. In the afternoon, sell-offs surged around 1.0317, prompting a price decrease of about 30 pips. No other signals appeared for the rest of the day. CPI in Germany, as well as forecasts for the EU economy, did not affect the market. But today, the upcoming report on industrial output and speeches of ECB representatives may prompt growth in euro, albeit not as rapid as last week's. By afternoon, the situation could even put as there are no statistics scheduled to be released. For long positions: Buy euro when the quote reaches 1.0325 (green line on the chart) and take profit at the price of 1.0383. Growth is likely to occur, especially if the statements by ECB representatives remain hawkish. But remember that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0283,, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0325 and 1.0383. For short positions: Sell euro when the quote reaches 1.0283 (red line on the chart) and take profit at the price of 1.0231. Pressure will return after unsuccessful consolidation above monthly highs and weak reports on the eurozone. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0325, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0283 and 1.0231. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327006
The Data May Keep The British Pound (GBP) From Rising

The Situation Of Cable Market (GBP/USD) Should More Or Less Level Off

InstaForex Analysis InstaForex Analysis 14.11.2022 08:35
Analysis of transactions in the GBP / USD pair The test of 1.1743 occurred at the time when the MACD line moved up quite a lot from zero, which limited the upward potential of the pair. Some time later, another test took place, but this time the MACD line was exiting the overbought area, which was a good reason to sell. The quote decreased, but not that strongly. In the afternoon, another test happened, during which the MACD line was moving above zero, leading to growth of about 50 pips. Although the 3rd quarter GDP data for the UK pointed to a contraction in the economy, it was still better than the forecasts, so pound continued rising in the market. The UK manufacturing output also remained at a fairly good level, and the negative trade balance increased even more. There are no statistics scheduled to be released today, so the situation should more or less level off. This means that traders can bet on the continuation of the bull market, but it is unlikely that it will develop as rapidly as at the end of last week. There are also no reports expected in the afternoon, so the day can go pretty smoothly. For long positions: Buy pound when the quote reaches 1.1782 (green line on the chart) and take profit at the price of 1.1872 (thicker green line on the chart). Growth may occur, following the current bullish trend. But remember that when buying, the MACD line should be above zero or is starting to rise from it. Pound can also be bought at 1.1719, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.1782 and 1.1872. For short positions: Sell pound when the quote reaches 1.1719 (red line on the chart) and take profit at the price of 1.1650. Pressure may increase, but it is best to look for buying options from 1.1719. Also, take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1782, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.1719 and 1.1650. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327010
FX Daily: Upbeat China PMIs lift the mood

Meeting Of U.S. President Biden And China’s President Xi | Chinese Methods To Contain The Pandemic

Saxo Bank Saxo Bank 14.11.2022 08:38
Summary:  China released a set of 20-item guidelines on Friday to fine-tune the country’s pandemic control measures aiming at minimizing disruption to people’s livelihood and the economy. The move added fuel to the post-US CPI risk-on sentiments and saw Hong Kong and China stock soaring with Hang Seng Index up 7.7% and commodities prices higher. S&P 500 rallied another 0.9% on Friday and finished the week nearly 6% higher. Over the weekend, China’s financial regulators rolled out a 16-point plan to boost the property sector. What’s happening in markets? The S&P 500 (ESZ2) and Nasdaq 100 (NQZ2) extended post-CPI gains US stocks rallied for the second day, adding to the dramatic surge after the softer CPI prints on Thursday. S&P 500 gained 0.9% and Nasdaq 100 climbed 1.9%. The energy sector, up 3.1%, was the top performer in the S&P 500 as WTI crude oil price bounced 2.8% on China’s easing of pandemic control measures despite a rise in the number of new Covid cases. Gaming and casino stocks and consumer discretionary names also gained from optimism about China’s fine-tuning of Covid policies. FTX filed for Chapter 11 bankruptcy protection on Friday and its CEO and founder resigned. Coinbase (COIN:xnas), the largest US crypto exchange, bounced 12.8% on Friday after being dragged down by the FTX fiasco earlier in the week. Robinhood (HOOD:xnas), in which FTX’s Sam Bankman-Fried has a 7.5% stake, surged 12.9% after steep declines on Tuesday and Wednesday. Over the week, S&P 500 gained 5.9% higher and NASDAQ 100 surged 8.8%. US  treasury (TLT:xnas, IEF:xnas, SHY:xnas) markets were closed for holiday The US treasury cash markets, after the massive 25bp-30bp  post-CPI drops in yields on Thursday, took a break to observe the Veterans’ Day holiday on Friday. Treasury note and bond futures were little-changed. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) soared on China’s fine-tuning of pandemic control measures Hang Seng Index soared 7.7% on the post-CPI rally in the U.S. stock market and the easing of pandemic control measures in China. Following a meeting of the Chinese Communist Party’s new Politburo Standing Committee on Thursday, China’s health authorities issued 20 new measures on Friday to fine-tune pandemic control policies including relaxing quarantine and PCR testing requirements and prohibiting excessive lockdowns. China Internet stocks soared, with Alibaba (09988:xhkg) up 12.4%, Tencent (00700:xhkg) up 11.7%, Meituan (03690:xhkg) up 12.5%, JD.Com (09618:xhkg) up 16.1%, and Kuaishou (01024:xhkg) up 17.5%. EV maker NIO (09866:xhkg) jumped 20.4% despite missing Q3 earnings. XPeng (09868:xhkg) surged 16%. Macao casino stocks gained 8% to 9%. China consumption names also climbed on China’s easing of pandemic control. Share prices of China property developers were squeezed massively higher, with Country Garden (02007) soaring 35% and Longfor (00960 ) jumping 29%. The debt-laden CIFI (00884:xhkg) soared 72.2%. Subsequently, Bloomberg ran a couple of news reports saying China is rolling out a 16-point rescue plan to boost the ailing property markets and struggling developers. CSI300 gained 2.8%/ Australia’s ASX200 (ASXSP200.1) rises ~4% last week. Stock poised to extend rally on China’s property measures All eyes will be on Australia tech stocks following the stellar run in the US, however Aussie tech stock gains may not shoot the lights be muted today after Australia’s 10-year bond yield rose seven basis points to 3.72%.  However, Commodity stocks will be a focus; on Covid hopes, with the Copper price up 4.1%, while precious metals are higher and aluminum had its best day since 2009. In New York BHP rose 3.6%, gapping up and rising above its 200-day moving average which could be seen as bullish sign, and also means local listed counterpart will likely follow. Lithium stocks will also be in the spotlight, with Australia’s biggest Allkem (AKE) and Pilbara (PLS) a focus with sentiment picking up and the stocks already trading in record-high territory ahead of China reopening. FX: the US Dollar continued to plunge in the aftermath of a softer CPI The US dollar index plunged 1.7% on Friday, bringing the weekly loss to 4%. After falling the post-CPI decline of 3.8% on Thursday, USDJPY fell another 1.5% to 138.81 on Friday. Over the week, USDJPY fell from 1.4662 to 138.81, a 5.3% decline. EURUSD surged 1.4% on Friday, bringing its weekly gain to nearly 4%. The Chinese renminbi strengthened further against the US dollar, benefiting from China’s easing of pandemic control in addition to the impact in the aftermath of the US CPI. USDCNH declined from 7.15 to 7.09 on Friday.The Aussie dollar is gaining on the back of China's property sector rescue package. China introduced 16 property measures to address the developer liquidity crisis; from blanket debt extensions, to loosening down-payment requirements for homebuyers. On top of that that, China’s eased covid restrictions; shortening to five-day quarantines, which is aimed at reducing the economic impact of Covid Zero, rather than relaxing restrictionsThe Australian dollar jumped 1.4% on Friday and 3.7% over the week. While the market still awaits further easing developments, the market is buoyed on forward looking hopes that the AUD will continue to be bid on commodity demand picking up. The iron ore (SCOA) price is back above US$90 after rising 6% last week, the copper price lifted about 5% last week, and the lithium price is also higher, with carbonate prices up 118% year to date.  Crude oil (CLZ2 & LCOF3) WTI crude oil gained 2.8% to finish the week at USD88.96 on China’s easing of pandemic control and a sharply lower dollar but it remained stuck inside its established trading range. In addition, as the fuel product market has been tightening in Europe and the US due to low inventories of diesel and heating oil, the crude oil price is likely to find support here and the tendency is more to the upside. OPEC issues its monthly market report on Monday so all eyes will be on that. Copper (HGZ2) rose nearly 5% on Friday on China easing Covid policies Benefiting from China fine-tuning Covid policies and a sharply lower US dollar, copper rose 4.7% on Friday and nearly 7% for the week to USD3.91. It is poised to challenge a key resistance zone near $4 in the near term. As noted by Ole Hansen, Saxo’s Head of Commodity Strategy, while the prospect of copper mines in Central America, South America, and Africa temporarily increasing production is significant, the outlook for copper prices remains positive since global electrification will continue to drive the demand for copper higher. Globally, especially in Europe, the need to reduce reliance on Russian-produced natural gas, oil, and the use of coal as energy sources will continue to build momentum for accelerated electrification. But enabling the grid to handle the additional baseload will require significant new copper-intensive investment in the coming years. In addition, producers such as Chile, the world's largest copper supplier, are not optimistic about their ability to increase production of copper mines in the medium and long term amid declining ore grades and water shortages. The slowdown of the Chinese economy is temporary, and the Chinese government's economic stimulus measures are focused on infrastructure and electrification, which require a lot of industrial metals, especially copper. Gold (XAUUSD) Gold climbed 0.9% to USD1771 on Friday, with the biggest weekly gain since March. In addition to a softer US CPI on Thursday, according to Ole Hansen, supporting the underlying improvement in sentiment was the recently published Gold Demand Trends Q3 2022 update from the World Gold Council. The update outlines how central bank demand reached a quarterly record of nearly 400 tons, thereby offsetting a 227 tons outflow from bullion-backed ETFs. What to consider? China issued 20 guidelines to fine-tune its dynamic zero-Covid policy measures China’s health authorities released 20 guidelines on Friday to fine-tune the country’s pandemic control measures, a day after the Politburo Standing Committee, led by President Xi, held a meeting to discuss how to best contain the pandemic. The key measures in the guidelines include reducing the number of quarantine days for close contacts from 10 days to 8 days, relaxing some centralized quarantine to home quarantine, limiting PCR testing, prohibiting excessively extending lockdowns, promoting vaccination and treatments, and prohibiting local authorities from shutting down production, schools, and transportation without proper approval. At a press conference on Saturday, the National Health Commission emphasized the fine-tuning was optimization measures based on scientific findings but not representing a shift in the principles of dynamic zero-Covid policy. China’s financial regulators rolled out a 16-point plan to boost the property sector The People’s Bank of China and the Banking and Insurance Regulatory Commission jointly issued a notice to financial institutions with 16 measures to address the liquidity squeeze faced by property developers through measures including the relaxation of previously imposed redlines restricting banks from lending over certain ceilings and calling for financial institutions to treat private enterprise developers equally with state-owned enterprises. A busy week of Fedspeak kicked off by Fed Governor Waller After the sharp easing of financial conditions after the massive asset price movements after the release of the CPI, helped by lower bond yields, higher stock prices, and lower US dollar, the market is eagerly monitoring if Fed officials will push back on pivot speculations in order to bring financial conditions back to tighter levels. Governor Waller previously proposed that the Fed should not pause until the monthly core PCE substantially falls below 3% on an annualized basis. Biden and Xi are set to meet on the sidelines of the G20 summit U.S. President Biden and China’s President Xi will hold a bilateral meeting on the sidelines of the G20 summit in Indonesia on Monday. It will be the first time they meet in person since Biden took the presidential office in January 2021. The White House said the meeting could last a couple of hours. For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-14-nov-2022-14112022
UK Budget: Short-term positives to be met with medium-term caution

The UK And Its Fiscal Plans | Chinese Industrial Production Is Estimated To Slow

Saxo Bank Saxo Bank 14.11.2022 08:52
Summary:  Equity and commodity markets seem to be on a risk-on frenzy for now, supported by the surprise weaker US CPI print, as well as China introducing 16 property stimulus measures at the weekend, following the easing of some Covid restrictions. However the market doesn’t have too far to look for the next catalysts that could continue the rally, stunt it, or see it take a haircut. Up next we watch US producer prices, and US retail sales, which may give the Fed further ammunition to slow down its pace of tightening if the numbers show the US economy is continuing to crack. UK’s outlook, Japan’s Q3 GDP growth rates, as well as China’s industrial production, retail sales, and fixed investment data are also key to watch. As well as corporate earnings from Nvidia and the Aussie dollar.   US eco data and news on tap; US producer prices, retail sales and big retail earnings Investors will be looking for further signs that point to a slowdown in inflationary pressures. In the October CPI release last week, we saw a fall in health insurance costs due to technical factors, which added to the slowing of the service component of core CPI. This is important to the calculation of core PCE, which the Fed watches most closely. As a result, this week investors will pay more attention to the October producer prices index (PPI) numbers on Tuesday, as they try to gauge if the service component of core inflation is slowing. Bloomberg consensus estimates PPI will rise 8.4% Y/Y and +0.3% M/M for core PPI or +7.2% Y/Y. If the numbers are weaker than this, it could provide further support to the equity market rally, as the Fed would garner more catalysts to slow its pace of hikes. Then on Wednesday, retail sales are on watch and are expected to have rebounded, rising 1% in October after stagnating the month earlier. On top of that, a bevy of large retailers, report earnings including Home Depot, Walmart, and Target, which will help investors gauge the health of the world's largest economy. Elsewhere in America, Canada will release inflation and housing starts data. Look for hints on the Fed’s hiking path in Fed speak this week Investors will get to gauge what the Fed’s latest thinking is, as we hear from a number of Fed officials this week, who will likely focus on the softer CPI print last week and if it’s changed their assessment of inflation and interest rate rates. Remarks from Fed Governor Christopher Waller will likely be a focus as Waller previously proposed not to pause, until core PCE falls below 3% on a monthly annualized basis. On top of that, speeches will be made from Neel Kashkari and Loretta Mester on Thursday G-20 meeting brings focus back on geopolitics and markets G-20 leaders will be meeting Bali, Indonesia this week on Tuesday and Wednesday, and the agenda is likely to be centered around geopolitical tensions and financial market risks. It is interesting to note that China has signaled the easing of its zero covid policy ahead of this event, despite the recent surge in cases. The meeting between Biden and Xi today will be key in the current cold war environment, especially with respect to the US tech controls and the stance on Taiwan. Other key areas of focus will be the Ukraine war, despite Putin’s lack of attendance at the event, as well as the global inflation concerns and what the global tightening wave means for financial markets. Lastly, climate change is likely to remain on the agenda, with progress stalling over the year as the focus shifted to meeting the world’s energy needs. Japan’s Q3 GDP and October CPI to see the drag from a weaker JPY Japan reports preliminary Q3 GDP on Tuesday, followed by the October CPI print on Friday. Growth is likely to weaken in the third quarter, with Bloomberg consensus looking at 1.1% QoQ print from 3.5% previously, mainly driven by a drag from net exports due to the surge in import prices. However, some support may be seen from private consumption with labor cash earnings and retail sales having stayed upbeat in the quarter. Meanwhile, business investment also likely improved, as suggested by large manufacturer’s Tankan report for the third quarter. The outlook also remains supported by the series of fiscal measures announced by the government, along with increased tourism. October CPI is likely to surge to fresh highs of 3.7% from 3.0% previously, with the core measure seen at 3.5% from 3.0% in September, but the outlook is likely improving as the Japanese yen recovers. UK’s medium-term fiscal outlook will be closely watched The UK updates markets on its fiscal plans in a week of reckoning following the collapse of Liz Truss’s administration. Chancellor of the Exchequer Jeremy Hunt on Thursday presents the medium-term outlook accompanied by updated economic forecasts. He’ll try to further restore investor confidence after his predecessor’s announcement of unfunded tax cuts created panic in markets, but spending cuts and tax rises remain on the horizon. While fiscal consolidation is still needed, excessive frontloading will mean more economic pain and backloading could impinge on government credibility. It’s a delicate balance, especially with double-digit inflation and recession concerns also on watch. China’s October activity data are expected to be weak October retail sales in China are expected to decelerate to +0.7% Y/Y according to the Bloomberg survey from +2.5% Y/Y in September as the surge in COVID cases and pandemic control restrictions took their toll on consumption. Industrial production is estimated to slow to +5.3% Y/Y in October from +6.3% Y/Y in September, amid Covid-related restrictions, slower auto production, and weak exports. Nvidia results in focus. Can its outlook and results continue to move its shares off its low? Nvidia (NVDA) is set to release third-quarter earnings on Wednesday, November 16 with analysts expecting revenue of $5.84bn down 18% y/y and EBITDA of $2.1bn down from $3.2bn a year ago and EPS of $0.71 down 30% from a year ago. Nvidia shares appear to be gaining traction of late, so its results will be watched closely, especially its outlook. If they are better than expected, you could see sentiment remain supported and it shares could continue to rebound. NVDA shares have risen about 40% in four weeks, but its shares are still down 52% from its high. Nvidia has been suffering amid restricted chip sales to China and declining PC demand. Pay close attention to if its results meet or exceed expectations, its outlook and what it sees as the potential full effects on the US/China chip restrictions. For detailed analyst, refer to Saxo’s Head of Equity Strategy, Peter Garnry’s note. AUDUSD is now up 9% from its low, gaining extra legs on China’ property rescue package  The Aussie dollar is gaining on the back of China's property sector rescue package. China introduced 16 property measures to address the developer liquidity crisis; from blanket debt extensions, to loosening down-payment requirements for homebuyers. On top of that that, China’s eased covid restrictions; shortening to five-day quarantines, which is aimed at reducing the economic impact of Covid Zero, rather than relaxing restrictions. While the market still awaits further easing developments, the market is buoyed on forward looking hopes that the AUD will continue to be bid on commodity demand picking up. As commodity hope-demand picks up, so have respective commodity prices; the iron ore (SCOA) price is back above US$90 after rising 6% last week, the copper price lifted about 5% last week, and the lithium price is also higher, with carbonate prices up 118% year-to-date. The next key event to watch for the Aussie dollar is the RBA meeting minutes; released Tuesday November 15, which should give more clues on the course of the central bank’s hikes after it made a lower-than-expected 25bps rate hike this months. Major China Internet companies are scheduled to report this week Meituan (03690:xhkg) kicks off the busy earnings calendar of  China Internet companies on Monday, followed by Tencent (00700:xhkg) on Wednesday, Alibaba (09988:xhkg) on Thursday, and JD.COM (09618:xhkg) on Friday. Analysts estimates for top line growth in Q3 are subdue on weak consumption recovery and macro environment. Slow gross merchandize value (GMV) growth during the Singles’ Day festival may point to sluggish Q4 outlook. Alibaba's GMV growth during the Singles' Day festival was flat. JD.COM has not yet announced its numbers except saying GMV had positive growth Y/Y during the period (from Oct 31 evening to Nov 11 end of day). According to estimates, eCommerce platform GMV grew about 14% Y/Y but the large traditional eCommerce platforms were estimated to see GMV growth at just around 3% Y/Y.   Key company earnings releases   Monday: Meituan, Sonova, Tyson Foods, Nu Holdings, Trip.com, DiDi Global Tuesday: Infineon Technologies, Vodafone, Alcon, Walmart, Home Depot, Sea Ltd, Commonwealth Bank Wednesday: Siemens Energy, Tencent, Experian, SSE, Nibe Industrier, Nvidia, Cisco, Lowe’s, TJX, Target Thursday: Siemens, Alibaba, Applied Materials, Palo Alto Networks, NetEase Friday: JD.com   Key economic releases & central bank meetings this week Monday, Nov 14 US:  New York Fed Survey of Consumer Expectations (Oct) Eurozone: Industrial Production (Oct) Tuesday, Nov 15 US: PPI (Oct) US: Empire State Manufacturing Survey (Nov) Eurozone: GDP (Q3) Germany: ZEW survey (Nov) UK: Employment (Oct) Japan: GDP (Q3) China: Retail Sales (Oct) China: Industrial Production (Oct) Wednesday, Nov 16 US: Retail Sales (Oct) US: Industrial Production (Oct) UK: CPI, RPI & PPI (Oct) Thursday, Nov 17 US: Jobless claims (weekly) US: Housing Starts (Oct) Eurozone: HICP (Oct, final) Friday, Nov 18 US: Existing Home Sales (Oct) UK: Retail Sales (Oct) Japan: CPI (Oct) Source: https://www.home.saxo/content/articles/macro/saxo-spotlight-14-nov-2022-14112022
The USD/CHF Pair Returned To Its Previous Three-Day Recovery

Losing Streak In The USD/CHF Pair Has Been Halted

TeleTrade Comments TeleTrade Comments 14.11.2022 08:56
A six-day losing spell has halted after kissing the upward-sloping trendline around 0.9400. The 50-and 200-EMAs have turned south which indicates that the short-and long-term trend has turned bearish. A bearish range shift by the RSI (14) adds to the downside filters. The USDCHF pair has extended its recovery after overstepping the intraday hurdle of 0.9455 in the Asian session. As the risk-on impulse is losing its steam after remaining at the driver’s seat, the risk aversion theme is gaining traction. Six-day losing streak in USDCHF has been halted for now. The US dollar index (DXY) has rebounded to near 106.90 after registering a three-month of 106.28. S&P500 futures are displaying losses after an extended weekend. Meanwhile, the 10-year US Treasury yields have resurfaced to 3.89%. On a daily scale, the asset has displayed a perpendicular fall after failing to sustain above the critical resistance of 1.0100. The major has dropped sharply to near the upward-sloping trendline placed from the 6 January 2021 low at 0.8758. A sheer decline in the pair has turned the 50-and 200-period Exponential Moving Averages (EMAs) at 0.9830 and 0.9645 respectively towards the downside. This indicates that the short- and long-term trend is bearish now. Adding to that, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00 for the first time in 15 months, which indicates more weakness ahead. Should the asset drop below Friday’s low around 0.9400, the Swiss franc bulls will drag the pair towards January 31 high at 0.9343, followed by March 31 low around 0.9200. On the flip side, a break above the psychological resistance of 0.9500 will drive the asset toward the 200-EMA at 0.9645. A breach above the 200-EMA will send the asset toward the round-level resistance at 0.9700. USDCHF daily chart  
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

Loonie Investors (USD/CAD) Are Awaiting For Further Guidance

TeleTrade Comments TeleTrade Comments 14.11.2022 09:00
USDCAD has sensed buying interest around 1.3250 as DXY rebounds ahead of US midterm elections outcome. The change of the House of Representatives' stewardship to Republicans will dampen expansionary policies. Loonie investors are eyeing the release of the inflation figures. The USDCAD pair is displaying a rangebound structure after gauging the cushion around 1.3250 in the Tokyo session. The risk-on impulse has started fading led by rising volatility ahead of the outcome of the US midterm elections and the extended weekend due to the Veterans Day holiday last Friday. The risk-sensitive currencies are facing a loss in the upside momentum. Anxiety ahead of the US midterm elections has weighed on S&P500 futures. The changing hands of stewardship for the House of Representatives will impact the expansionary policies as additional approval from Republicans will stretch the time for policy execution. Investors have turned anxious as the occurrence could trim economic projections ahead in already vulnerable times when the US economy is subject to recession due to accelerating interest rates. The US dollar index (DXY) has extended its pullback move to near 107.00 despite the fact that the Federal Reserve (Fed) won’t go for hefty rate hikes as red-hot inflation has cooled down. Also, the long-term US Treasury yields have rebounded to near 3.90%. Meanwhile, Loonie investors are awaiting Wednesday’s inflation numbers for further guidance. The headline Consumer Price Index (CPI) is seen marginally higher at 7.0% vs. the prior release of 6.9%. While the core CPI that excludes oil and food prices is seen at 6.3%, higher than the prior release of 6.0%. On the oil front, oil prices have dropped after facing barricades of around $89.00 despite easing Covid-19 restrictions in China. It seems that oil bulls need some solid reasoning for extending its recent rally further.
Driving Growth: The Resilience of Green Bonds and Shifting Trends in Sustainable Finance

The USD/INR Pair's Traders Should Pay Attention To The G20 Meeting

TeleTrade Comments TeleTrade Comments 14.11.2022 09:02
USDINR bounces off 100-DMA to print the biggest daily gain in seven weeks. Biden-Xi headlines, Fed’s Waller triggered risk-off mood amid a light calendar. Moody’s cuts India’s 2022 GDP growth forecasts by citing higher interest rates, inflation and global economic slowdown. USDINR braces for the biggest daily jump in nearly two months as it picks up bids to 81.20 during early Monday morning in Europe. In doing so, the Indian Rupee (INR) pair cheers the US Dollar’s rebound amid the risk-off mood. The downbeat sentiment takes clues from anxiety ahead of the Group of 20 Nations (G20) meeting in Bali. Also weighing on the risk profile are the comments from US Federal Reserve (Fed) Governor Christopher Waller, as well as gloomy statements from the International Monetary Fund (IMF). It should be noted that Moody’s downgrading of Indian growth forecasts for 2022 exerts additional downside pressure on the INR. “Rating agency Moody's cut India's growth projections for the current and next calendar year due to higher inflation, high-interest rates and slowing global growth that, it believes, will dampen economic momentum more than it had expected,” said Reuters. The global rating giant now expects India’s Gross Domestic Product (GDP) to grow 7.0% in 2022 versus 7.7% in previous forecasts. Moody’s also expected GDP growth to deteriorate to 4.8% in 2023 before recovering to 6.4% in 2024. It should also be noted that the Reserve Bank of India (RBI) expects India to grow by 7.0% in 2022. On the other hand, Fed’s Waller said, “Rates will not fall until there is ‘clear, strong evidence’ inflation is falling,” which in turn curtailed the dovish bets on the Fed’s next moves. The policymaker, however, also mentioned that the Fed can begin to consider moving at a slower pace. Elsewhere, the IMF blamed the darker outlook on tightening monetary policy triggered by persistently high and broad-based inflation, weak growth momentum in China, and ongoing supply disruptions and food insecurity caused by Russia’s invasion of Ukraine, per Reuters. While portraying the mood, S&P 500 Futures drop half a percent whereas stocks in the Asia-Pacific region traded mixed. Further, the US 10-year Treasury yields snap a three-day downtrend of around 3.90% at the latest. Moving on, the USDINR traders should pay attention to the G20 meeting, especially to the meeting between US President Joe Biden and his Chinese counterpart Xi Jinping, for clear directions. Ahead of the event, up for taking place around 09:30 AM GMT, Reuters quotes US President Biden as saying that the US communication lines with China would stay open to prevent conflict, with tough talks almost certain in the days ahead. The news also mentioned, “The United States would ‘compete vigorously’ with Beijing while "ensuring competition does not veer into conflict", said Biden, stressing the importance of peace in the Taiwan Strait during an address to the East Asia Summit in Cambodia. He arrived in Bali on Sunday night.” On the same line, US Treasury Secretary Janet Yellen also mentioned, per Reuters, “Biden-Xi meeting aimed at stabilizing u.s. relationship with china, but have been clear about national security concerns.” Technical analysis Although the 100-DMA restricts immediate USDINR downside near 80.45, the recovery moves need validation from a seven-day-old descending resistance line, around 81.52 by the press time.
The USD/JPY Price Seems To Be Optimistic

The US-Japan Rate Differential Offers Additional Support To The USD/JPY Pair

TeleTrade Comments TeleTrade Comments 14.11.2022 09:08
USDJPY struggles to capitalize on its modest recovery gains and remains below the 140.00 mark. Rebounding US bond yields revive the USD demand, though fail to provide any meaningful lift. Bets for smaller Fed rate hikes continue to act as a headwind for the buck and capping the major. The USDJPY pair attracts some buying near the 138.80 region on the first day of a new week and reverses a part of Friday's slide to its lowest level since late August. Spot prices, however, lack bullish conviction and remain below the 140.00 psychological mark through the early European session. The US Dollar stages a modest recovery from a nearly three-month low touched on Friday in reaction to hawkish remarks by Fed Governor Christopher Waller and acts as a tailwind for the USDJPY pair. in a conversation in Sydney, Australia, Waller noted that markets have overreacted to the softer-than-expected October consumer price inflation data last week. Waller added that the Fed was not softening its fight against inflation and that it will take a string of soft CPI reports for the US central bank to take its foot off the brakes. This, in turn, pushes the US Treasury bond yields higher. The resultant widening of the US-Japan rate differential undermines the Japanese Yen and offers additional support to the USDJPY pair. Bulls, however, seem to struggle to capitalize on the attempted recovery amid rising bets for smaller rate hikes by the Fed. In fact, the markets are pricing in a greater chance of a 50 bps liftoff at the next FOMC policy meeting in December. This, in turn, holds back the USD bulls from placing aggressive bets and capping the upside for the USDJPY pair, at least for now. Apart from this, a softer risk tone offers some support to the safe-haven JPY and is seen as another factor acting as a headwind for spot prices. This makes it prudent to wait for strong follow-through buying before confirming that the USDJPY pair has formed a near-term bottom in the absence of any relevant market-moving economic releases from the US.  
Further Upward Price Movement Of The AUD/USD Pair Is Expected

UOB Group's Economists Opinion About The AUD/USD Pair's Situation

TeleTrade Comments TeleTrade Comments 14.11.2022 09:21
In the opinion of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, AUD/USD could extend the advance to the 0.6775 level in the short term. Key Quotes 24-hour view: “While overbought, the strong surge in AUD could extend further. However, a break of the major resistance at 0.6775 is unlikely today (there is another resistance at 0.6735). On the downside, a break of 0.6635 (minor support is at 0.6665) would indicate that the upward pressure has subsided.” Next 1-3 weeks: “The impulsive upward acceleration in AUD last week was accompanied by strong upward momentum. Further AUD strength is likely even though any advance is likely to be at a slower pace. The level to monitor is 0.6775. Support is at 0.6635 but only a break of 0.6595 would indicate that AUD is not advancing further. Looking ahead, the resistance above 0.6775 is at 0.6820.”
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

Inflation In The Eurozone Will Affect Risk Appetite

InstaForex Analysis InstaForex Analysis 14.11.2022 09:25
The previous week ended with a noticeable increase in risk appetite and weaker demand for dollar. The main reason was the growing purchases of government bonds in the US, accompanied by a strong drop in yields. The scenario happened because of the latest inflation data in the US, which showed a sharp decrease in the year-on-year ratio and growth in the month-over-month one. Markets have been hoping for this kind of positive news for a long time, believing that the measures taken earlier by the Fed put further pressure on the economy. Now that the figures improved, the US central bank may start easing the pace of rate increases, then take a break. Much will depend on the values of inflation indicators for November, which will be presented in December. If they show, if not a continuation of a strong decline, but at least a stabilization or a slight decrease, then a strong rally may occur in all markets without exception. It could be accompanied by the depreciation of dollar and decrease in Treasury yields. Be that as it may, positive sentiment will continue today. Although stock indices in Europe and the US remain in negative territory this morning, everything may change by the start of the US trading session. In this case, dollar will continue to weaken, then decline further towards the end of the week, especially if the published data on retail sales and their volumes show better values than expected. Data on consumer inflation in the euro area is also important as its figure will affect risk appetite. US statistics will also play an important role since the very position of the ECB on the issue of further aggressive rate hikes remains unclear. Forecasts for today: EUR/USD The pair is trading above 1.0300. If market sentiment worsens, there will be a decline to 1.0235. GBP/USD The pair is trading above 1.1735. If buying pressure remains, it will rise further to 1.1900. But if market sentiment worsens, there will be a decline to 1.1635.   Relevance up to 08:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327022
Bank Of England Will Probably Be Unable To Avoid A Significant Easing Of Policy

It Is Very Difficult For The Bank Of England To Make Responsible Decisions

InstaForex Analysis InstaForex Analysis 14.11.2022 09:28
Whatever problems the government and the Bank of England face, they all pale in comparison with the market's belief in slowing down the process of tightening the Fed's monetary policy. The decline in the growth rate of US consumer prices in October from 8.2% to 7.7% and core inflation from 6.6% to 6.3% was the catalyst for large-scale sales of the US dollar. And even the pound, vulnerable due to the weakness of the British economy, managed to soar above $1.18.—last seen at these levels in late August. The sterling rally was much less violent than the euro or the yen due to the presence of significant uncertainty in monetary and fiscal policies of the UK. On November 17, the government is due to present a new plan showing how it intends to close the £50 billion budget gap. Tax hikes will be likely, which, in a recession already in place, looks like cutting the branch you're sitting on. Indeed, the UK GDP sank by 0.2% QoQ in the third quarter. The final figure was less than Bloomberg experts predicted, but Britain remains the only G7 economy that has not yet recovered from the pandemic. Dynamics of the G7 economies In such circumstances, the appearance of "dovish" speeches from representatives of the Bank of England does not look surprising. Silvana Tenreyro believes that repo rate was in restrictive territory even before the 75 bps increase in November to 3%. It's just that monetary restrictions affect the economy with a time lag, and the current level of borrowing costs is enough to bring inflation back to the 2% target. Personally, I have serious doubts about her words, considering the forecasts of Bloomberg experts about the acceleration of consumer prices in the UK in October from 10.1% to 10.4%. According to Investec, this time, the main driver of the CPI acceleration will be energy: in the second month of autumn, electricity bills for British households rose by 27%. At the same time, economists believe that core inflation has slowed from 6.5% to 6.2% amid weakening domestic demand. Thus, it is very difficult for both the government and the Bank of England to make responsible decisions against the backdrop of a recession, the need to put public finances in order and high inflation. However, the GBPUSD is at risk of further gains due to massive sell-offs in the US dollar. Unlike in Britain, inflation in the United States continues to slow down and, most likely, has already passed its peak. This allows the futures market to assume that the federal funds rate will never reach the 5% mark that everyone expected. If so, then the top of the USD index is left behind. Technically, the Three Indians pattern has formed on the GBPUSD daily chart. However, its implementation requires a drop in quotes below 1.155. Until that happens, the sentiment remains bullish. We use the pair's pullbacks followed by a rebound from the supports at 1.175 and 1.165 for purchases.   Relevance up to 07:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327014
FX: The SNB Is Getting Its Stronger Swiss Franc Via Gains Against The Dollar

According to ING, dollar index may reach 105. Swiss National Bank talks selling Forex reserves

ING Economics ING Economics 14.11.2022 09:44
FX markets are struggling to come to terms with last week's huge correction in global asset markets, which owed as much to one-way positioning as it did to a re-assessment of the US monetary/China macro story. In this quiet week for data, the correction could have a little more to run. However, this should be good news for those needing to buy dollars USD: Not very often that DXY falls 4% in a week You only need one hand to count the number of times that DXY (a trade-weighted measure of the dollar) has fallen 4% in a single week. The severity of last week's correction owes in large part to the fact that dollar ownership has been the most 'crowded trade' in the global investment community. Equally, that community was substantially underweight equities and last week's combination of the softer core US CPI data and some supportive measures in China was the catalyst for a huge short squeeze in risk assets. This week is a quiet one for data and central bank policy action - meaning it is hard to rule out this correction running a little further. Could the DXY correction extend to 105 (from 106.90 currently)? Yes, but we would think 105 might be the extent of it. Assessing how far position adjustment can drive asset classes is always a challenging task, but some of the FX moves have come very far indeed. For example, USD/KRW in a few sessions has retraced half of the January-October rally. That does seem a little excessive in that the Fed has yet to sound the 'all-clear' on its battle with inflation. Indeed, Fed hawk Christoper Waller said that 'we've still got a ways to go' before the Fed stops raising rates - comments which have stopped the fall in US rates. In fact, we have only seen a modest 20-30bp repricing of the Fed cycle over the last three days - not particularly large by this year's standards. For those short dollars, the recent correction will be a welcome reprieve. There are no guarantees that these better levels will last, however. The Fed is still tightening and 2023 world growth forecasts are still being cut - including the IMF recently warning of even lower world growth than the downward revision to 2.7% made in its world economic outlook last month. The US data calendar is light today and the focus will be on; i) President Biden and Xi meeting at the G20 in Indonesia and ii) Fed speakers in the form of Lael Brainard (dove) and John Williams (mild hawk). Let's see whether this pair wants to push back against the big easing of financial conditions that the recent risk rally and softer dollar have delivered.  We do have a preference for DXY going higher later this year, but we have to allow position adjustment to run its course. That could see DXY trade 106.50-107.50 today. Chris Turner  EUR: Caught out The severity of the EUR/USD correction has caught out many (including ourselves). As above, this largely looks like a function of position adjustment. Even the European Central Bank's Luis De Guindos said on Friday that he felt markets had overreacted to the US CPI data. The very difficult question is whether this short EUR/USD squeeze has run its course near 1.0365 or needs to trade higher still. Given the depth, conviction, and one-sided nature of long dollar positioning (quite understandable given a sustained dollar rally since summer 2021), we all need to be careful about prematurely calling an end to this correction. Indeed, EUR/USD could easily trade to 1.05 were conditions/data to fall into place. It is not a particularly busy week for the eurozone data calendar, but there are lots of ECB speakers including several today. Pricing of the ECB tightening cycle has remained quite resilient over recent days - prompting quite a sharp narrowing in the two-year EUR:USD swap differential - normally a EUR/USD positive. Those caught short EUR/USD may mean EUR/USD struggles to trade under 1.0250/70 today. Elsewhere, EUR/CHF came lower on Friday as the Swiss National Bank sounded hawkish again and said it could sell FX reserves. This looks like a reference to being on both sides of EUR/CHF, rather than the continued buying of EUR/CHF seen over recent decades. We favour EUR/CHF lower over coming months as the SNB tries to keep the real exchange rate stable. Chris Turner GBP: This is going to hurt The UK Chancellor, Jeremy Hunt, has been ramping up the rhetoric that Thursday's autumn statement is going to hurt - comprising tax rises for all and a large cut in government spending. None of the choices are politically palatable, but failure to deliver would trigger another round of Gilt and sterling sales. 1.1670/1.1750 could be the short-term corrective low for GBP/USD before a possible push to 1.20 on a further short-squeeze (short GBP had been a conviction call amongst fund managers). But in the bigger picture, even these current GBP/USD levels near 1.18 should prove attractive for those with GBP receivables. We suspect that cable may trade back to 1.10 over coming months. The UK data calendar is quiet today and more interest will be had in tomorrow's UK jobs and earnings data. Chris Turner CEE: Region to confirm strong levels due to global conditions The Central and Eastern Europe region will see a bit of a lull this week but will still have the attention of the markets. Today we start with the September current account results for Poland, the Czech Republic and Romania. The entire region has fallen into record deficits in recent months, and we do not expect much change in September either. Third-quarter GDP for Poland, Hungary and Romania will be published on Tuesday. In the Czech Republic, the result was already published two weeks ago (-0.4% quarter-on-quarter) slightly below market expectations. In Poland, we expect a return to positive (0.2% QoQ) in line with market expectations after a negative surprise in 2Q. In Hungary, we forecast a significant decline (-1.0% QoQ), below market expectations, but in any case, the economy is expected to slow down compared to 2Q. A contraction in the economy is also expected in Romania (-2.0% QoQ) compared to a strong second quarter. Also on Tuesday, we expect October inflation in Poland to be confirmed at 17.9% year-on-year. On Wednesday, Poland's core inflation will then follow, and we expect a further rise from 10.7% YoY to 11.2% YoY.  In the FX market, the CEE regional picture remains mixed. At the global level, EUR/USD has moved well above parity in recent days, supporting emerging markets. The gas story seems to be no longer a problem for this winter with record full storage and gas prices below 100 EUR/MWh. The sentiment in Europe has improved significantly over the past two weeks with the DAX index hitting its highest levels since June this year. Overall, all point to stronger CEE FX.   On the other hand, rates across the region have fallen significantly following a dovish result from the National Bank of Poland, a massive downside inflation surprise in the Czech Republic and lower US inflation. Interest rate differentials thus collapsed, pointing to weaker FX. Overall, we expect CEE to maintain current stronger levels and further benefit from favourable global conditions. However, the biggest focus will be on the Polish zloty, which did not have much opportunity to react to governor Adam Glapinski's press conference due to closed markets. Therefore, we expect pressure on a weaker zloty towards 4.75 EUR/PLN at the beginning of the week. The Hungarian forint is teetering between the incoming EU dispute headlines, but we believe it will hold slightly above 400 EUR/HUF. The Czech koruna should maintain its current very strong levels thanks to low inflation protection and no pressure on Czech National Bank. The Romanian leu remains far from the National Bank of Romania's intervention levels, and we believe the RON should benefit the most from global conditions in the region, testing the EUR/RON 4.88 levels.  Frantisek Taborsky  Read this article on THINK
The EUR/USD Pair: There Are Still No Sell Signals

US inflation reached 7.7%, then eurodollar has touched the highest level since summer

Conotoxia Comments Conotoxia Comments 14.11.2022 10:11
The end of last week brought a strong turnaround in the US dollar following the release of inflation data from the US. The annual inflation rate in the US slowed to 7.7% in October, the lowest since January. The consensus was for a reading of 8%. Following the publication, the EUR/USD exchange rate hit its highest since August 2022. In the United States, energy costs rose 17.6%. The slowdown was also seen in food (10.9% vs. 11.2% in September) and used cars and trucks (2% vs. 7.2%). Compared to the previous month, the CPI rose 0.4%, below expectations of 0.6%, tradingeconomics calculated. At the same time, the cost of medical services pushed the CPI down. Nonetheless, the data could still point to strong inflationary pressures and broad price increases across the economy, mainly in the services sector, while commodity prices benefited from some improvements in supply chains, according to data released Friday. As a result, the dollar index lost about 4% last week, as the lower inflation reading seemed to strengthen the case for a less aggressive tightening path from the Fed. Investors are betting that the U.S. central bank would limit the size of rate hikes to 50 basis points from December, after a series of 75 basis points over the past four meetings. Source: Conotoxia MT5, USDIndex, Daily Dollar exchange rate at the start of the week The dollar index rose toward 107 points on Monday, recovering slightly from near three-month lows after Federal Reserve Chairman Christopher Waller warned investors against too much optimism over a single inflation report and said the central bank "still has a long way to go" with interest rate hikes. Waller acknowledged that the Fed may slow the pace of interest rate hikes at upcoming meetings, but stressed that markets should focus on the final level, which is possibly still "a long way off," rather than the pace of any move, tradingeconomics reported. Meanwhile, Boston Federal Reserve President Susan Collins said Friday that she believes the Fed will continue to raise interest rates at upcoming FOMC meetings. The next FOMC meeting is scheduled for December 14. Commenting on the latest inflation data for October, Collins said it is still too early to determine the peak of the Fed's rate cycle. However, she noted that the risk of excessive tightening has increased, BBN reported. Cryptogeddon continues On Monday morning, bitcoin cost less than $16,000, approaching a two-year low. This marks a drop of nearly 80 percent from last year's peak, bringing the current correction on BTC closer to similar percentage levels as after 2012 and 2016. (then BTC corrected by 86 and 83 percent from its peak). The FTX exchange has officially filed for bankruptcy, which may also involve problems for its affiliated companies (130 entities are in question) and its investors. Within days, FTX, one of the world's largest cryptocurrency exchanges, collapsed after concerns about its financial situation triggered a "run on the bank" and a wave of withdrawals from the exchange. It turned out that the exchange couldn't withdraw all of its customers' funds because it didn't have any. Fears of insolvency intensified after Binance abandoned its plan to acquire FTX. On top of that, Sam Bankman-Fried allegedly used customer funds to support the exchange's sister company, Alameda Research. Additionally, top-level employees of both FTX and Alameda are said to be looking for a way to leave the United States or are already outside the U.S., The target is said to be countries without an extradition treaty with the United States. In just one week, the price of bitcoin fell by 23 percent, ETH by nearly 25 percent, Solana took a dive of nearly 60 percent, and the Binance exchange token fell by 20 percent. The bitcoin cash seemed to lose the least during this time with a drop of 15 percent. Source: Conotoxia MT5, BTCUSD, Weekly Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Read the article on Conotoxia.com
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

The New Zealand Dollar To US Dollar (NZD/USD) Pair Is Likely To Grow Further

InstaForex Analysis InstaForex Analysis 14.11.2022 10:34
NZD/USD: The chart shows the movement of #NZD/USD on the daily chart (D1). At the time of writing, quotes are near the resistance level of 0.611. There is a chance that it will correct towards 0.600 in the following days, as shown in the chart (solid blue line). But if the key resistance level of 0.611 is broken, the pair is likely to grow further to 0.6235. Good luck! Relevance up to 09:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327031
Apple Q3 2023 Results – Surpassing Expectations and Aiming for New Heights

US Dollar (USD) Recovery Keeps A Lid On Any Meaningful Upside For The EUR/GBP Cross

TeleTrade Comments TeleTrade Comments 14.11.2022 10:58
EURGBP gains some positive traction for the second straight day, though lacks any follow-through. A modest USD rebound is weighing on the common currency and acting as a headwind for the cross. Traders also seem reluctant ahead of this week’s UK macro data and Chancellor Hunt’s statement. The EURGBP cross edges higher for the second successive day on Monday and sticks to its modest intraday gains through the early European session. The cross is currently placed above the mid-0.8700s, though lacks any follow-through buying or bullish conviction. The shared currency continues to draw some support from bets for a more aggressive policy tightening by the European Central Bank (ECB). The British Pound, on the other hand, is undermined by the gloomy outlook for the UK economy. In fact, the National Institute of Economic and Social Research (NIESR) expects the UK GDP growth to be flat in Q4 and noted that the risk of a contraction remains elevated. This, in turn, is seen lending some support to the EURGBP cross. That said, the prospects for further interest rate hikes by the Bank of England act as a tailwind for the Sterling. Apart from this, a modest US Dollar recovery from a nearly three-month low exerts some pressure on the Euro and keeps a lid on any meaningful upside for the EURGBP cross, at least for now. Traders also seem reluctant to place aggressive bets ahead of this week's important UK macro data - the monthly jobs report on Tuesday and the CPI report on Wednesday. Investors will further take cues from the BoE's Monetary Policy Report Hearings on Wednesday and Chancellor Jeremy Hunt’s Autumn Statement on Thursday. This will play a key role in influencing the near-term sentiment surrounding the GBP and determine the next leg of a directional move for the EURGBP cross. In the meantime, spot prices seem more likely to consolidate in a range amid absent relevant market-moving economic releases, either from the Eurozone or the UK.
Middle Distillates: Strong Market Support Expected

Saxo Podcast: Ahead Of The G20 Meeting, A Shift In China's Covid Policy And More

Saxo Bank Saxo Bank 14.11.2022 12:29
Summary:  Today we continue to find reason to question the quality of this melt-up in equity markets after last Thursday's soft US CPI print, with the first prominent Fed official already out overnight with pushback against this drop in US yields. Still, that's not to say that the move can't extend in the short term, as the market is also hoping that a shift in China's Covid policy is coming. Xi and Biden will meet today ahead of the G20 meeting. We also look at stocks to watch this week, an important week for earnings, the big moves in metals both precious and industrial, the US dollar and much more. Today's pod features Peter Garnry on equities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-14-2022-14112022
From UFOs to Financial Fires: A Week of Bizarre Events Shakes the World

The Soft US Inflation Report Has Raised Expectations About Fed's Decision

Kenny Fisher Kenny Fisher 14.11.2022 12:33
After a huge rally last week, the Japanese yen has reversed directions today. USD/JPY is trading at 140.21, up 0.99%. On the economic calendar, Japan releases GDP for the third quarter. There are no economic events in the US today. A week to remember The US dollar dropped like a stone last week, courtesy of a soft inflation report that saw both the headline and core readings fall in October. Both readings were lower than expected, and investors pounced on the news, as stock markets soared and the US dollar took a tumble. The yen made the most of the dollar’s misery, as USD/JPY slumped by a massive 5.3% last week and dropped to a 10-week low. The market reaction to the inflation data looks a bit extreme, and this explains the dollar’s comeback today. The soft inflation report has raised expectations that the Fed will put the brakes on its tightening, after pushing full speed ahead with four straight jumbo hikes of 0.75%. Fed policy makers aren’t bandying around the magical word “peak” to describe inflation just yet, but we are now seeing a change in terminology, such as “gradual” and “measured”. What is interesting is that the markets have gone giddy over a drop in inflation but appear to be ignoring the Fed’s warning that rates could end up higher for longer than expected. I don’t detect any signs of the Fed going dovish, but the markets are expecting a pivot, as there is already talk in the markets of the Fed cutting rates in H2 of 2023. The dollar is dusting itself off after last week’s disaster, and the yen may have trouble holding onto last week’s impressive gains. The Fed will almost certainly raise rates in December by at least 0.50%, and with the Bank of Japan maintaining a cap on JGB yields, the US/Japan rate differential will continue to widen. That spells trouble for the yen, which has lost about 20% against the dollar this year.   USD/JPY Technical USD/JPY is testing resistance at 139.91 and 141.61 There is support at 137.34 and 135.90 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Craig Erlam and Jonny Hart talk UK Autumn Statement and more

The cable's performance is outstanding indeed. XTB's Walid Koudmani highlights huge, 6% percent gain

Walid Koudmani Walid Koudmani 14.11.2022 13:37
Crypto markets attempt to recover despite widespread panic   The panic surrounding the crypto market continues this week after further developments regarding the FTX situation led to a widespread uncertainty involving the whole sector with many now questioning the safety of other major exchanges and defi protocols. Many large institutions rushed to reassure their customers, investors and market as a whole of their financial positions after major doubts emerged following the FTX collapse. Understandably, the Crypto fear and greed index is signaling levels of extreme fear as a large outflux of coins and cash from exchanges is threatening the stability of the ecosystem even further. Major price swings, spiky volatility and projects approaching collapse are all factors causing an outflow of capital from the ecosystem as the overall market cap hovers around $844 billion while major crypto currencies like Bitcoin and Ethereum attempt to hold above their key supports. While there is a high potential for unexpected developments and high volatility, some investors may take the fact that BTC and ETH stabilized slightly as a reassuring sign, at least in the short term. On the other hand, confidence in the crypto industry is likely hovering around historic lows as many who may have been supporters have begun to doubt their conviction as they see companies that may have seemed too big to fail crumble almost overnight leaving investors and customers to deal with the aftermath.    Pound pulls back from highest level since August   The pound has managed to pull off an impressive recovery since the beginning of November with the GBPUSD pair rising over 6% and reaching a high of 1.185, a level not seen since the end of August. This came as the USD started to retreat following macroeconomic reports supporting a slightly less hawkish approach by the FED and as the recently appointed British PM attempted to calm investor sentiment after his predecessor. Today we can see a fairly balanced situation in the FX market with both USD and GBP performing strongly and with the pair pulling back slightly as it trades around 1.177. Many will be focused on the G20 taking place this week as progress on the geopolitical front may also help with improving sentiment while Sunak remains under pressure with regards to taxes, cuts and migrants. From a technical perspective, the GBPUSD pair is trading at an interesting price reaction area after encountering resistance and pulling back almost 1% and breaking below the 21SMA on the hourly chart. As the sentiment surrounding the pound remains uncertain, any major developments may cause large volatility spikes that could cause a breakout from the short term trading range.
Long-Term Rates Diverge Amid Policy Divergence and Economic Signals

Foreign exchange market: this week is full of inflation prints releases as we're about to hear from Sweden, Canada, UK and more

Enrique Díaz-Álvarez Enrique Díaz-Álvarez 14.11.2022 14:50
The news that markets had been desperately hoping for finally arrived last week. Inflation in the US came out lower than expected, US rates dropped the most since the pandemic era and risk assets worldwide soared in jubilation. The dollar experienced one of the sharpests two-day falls in history, falling anywhere from nearly 6% (against the Japanese yen) to just under two percent (against the Canadian dollar, the week’s second-worst performer). Emerging market currencies also rose. The notable exception was the Brazilian real, where markets had a brutal reaction to a Lula speech suggesting that he favours Truss-style unfunded spending.   This week the focus will be on a raft of inflation reports for the month of October in several G10 countries including Sweden, Canada, the UK, and Japan. These will be scrutinised for signs that inflation is peaking, though we think that the positive surprise out of the US last week cannot be extrapolated to other economic areas. We will also be paying attention to two scheduled speeches from ECB President Lagarde. For now, the relentless dollar rally appears to have peaked, and the path of least resistance for the greenback may be down in the short-term. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 14/11/2022 British pound Last week’s third-quarter GDP report had mixed news. It was better than expected, but still negative. This means the UK may be in a technical recession already, albeit so far the numbers are consistent with a short, shallow one. Figure 2: UK GDP Growth Rate [MoM] (2013 – 2022) Source: Refinitiv Datastream Date: 14/11/2022 This week will be an intense one for data out of the UK. The employment report on Tuesday will be followed by the inflation data on Wednesday. The former is expected to show strong payrolls growth for October. The latter, steady core inflation well above 6%. Technical recession or not, we do not think that the Bank of England can afford to stop tightening any time soon given this backdrop, and expect a higher terminal rate than markets do. The unveiling of the UK government’s fiscal plan on Thursday could also garner some attention. Euro No news of any importance out of the Eurozone last week left the euro to trade mostly off events taking place elsewhere, notably the US inflation report. That said, we did get a handful of ECB member speeches, which mostly struck a hawkish tone, suggesting that there will be no let up in rate hikes just yet. Further news suggesting that China may ease COVID restrictions, which would stoke appetite for European exports there, also buoyed the common currency to a near 4% rise against the dollar. We still see market pricing for European terminal rates way too low and out of touch with economic reality and the relentless rise in inflation. Lagarde has two opportunities to jawbone these rates higher, one of Wednesday and another Friday. There will be little else to move markets in the Eurozone this week. US dollar One swallow does not a summer make, but the October inflation report was good news and was justly celebrated by markets as such. Goods prices came in lower than expected and drove both the core and headline numbers down from the previous month. The headline number has now been falling for some months, and while the more important core index is not yet falling, neither is it rising. Figure 3: US Inflation Rate (2012 – 2022) Source: Refinitiv Datastream Date: 14/11/2022 This week will be light in terms of data out of the US, but we will be getting a surfeit of Fed speeches, no fewer than seven in all. Markets will eagerly read them for hints on the impact of last week’s inflation report on Fed expectations for the December hike and the terminal Fed Funds rate. Japanese yen We’ve seen a quite remarkable reversal of fortune for the yen in the past few weeks. The yen was the best performer in the G10 last week, ending it around 6% higher on the dollar – the largest one-week move in the USD/JPY pair since 1998. While most of the rally was driven by broad weakness in the US dollar, the already suppressed valuation of the yen provided room for an outperformance. A possible dovish pivot from the Federal Reserve is also disproportionately bullish for JPY, given that the Bank of Japan is the only central bank in the G10 not to be engaging in a tightening cycle of its own. Attention this week may turn to macroeconomic news, with a number of data releases on tap. We will be paying close attention to the Q3 GDP print (Monday), trade data (Wednesday) and inflation report (Thursday). Swiss franc The Swiss franc was one of the best-performing G10 currencies last week, rallying on Friday after hawkish remarks from SNB chairman Thomas Jordan. Jordan stated that the bank is ready to take ‘all measures necessary’ to achieve price stability. Moreover he said that current monetary policy settings are ‘not sufficiently restrictive’ in order to bring inflation back towards the central bank’s target. He also confirmed that the bank remained able to sell its FX reserves as part of its policy efforts. Jordan’s hawkish rhetoric all but guarantees another interest rate hike in December, although the size of the move is more of an open question. At present, we’re leaning towards another 50 basis point hike. In the coming days, we’ll continue to focus on additional communications from the SNB, with a handful of speeches from officials scheduled this week. Aussie Signs of an easing in the Chinese government’s stance towards ‘zero-covid’ provided an element of assistance for the Australian dollar last week, though the extent of the move higher in the AUD/USD pair was still driven almost entirely by the soft US inflation print. As one of the higher-risk currencies in the G10, AUD should have been near the top of the performance tracker, though the recent dovish shift from the Reserve Bank of Australia means that the currency would receive less support from a narrowing in US rate differentials. Deputy governor Bullock reaffirmed this stance last week, noting that the bank was nearing the point where it could pause the hike cycle. We don’t necessarily expect this week’s RBA meeting minutes (Tuesday) to rock the boat, as expectations for anything other than 25bp hikes going forward are very low. The October labour report on Thursday may prove more of a market mover. Economists expect a solid rebound in job creation following the weak September data (+15k consensus), which would likely support the case for additional modest tightening in RBA monetary policy. New Zealand dollar The New Zealand dollar underperformed its antipodean G10 counterpart last week, which we can only really ascribe to the recent strong rally in the kiwi that left it trading at a near seven-month high on the Aussie dollar. There wasn’t too much domestic news to report last week, though the latest manufacturing PMI did raise a few alarm bells over the state of the New Zealand economy. The October index fell below the critical level of 50, separating expansion from contraction, for the first time since August 2021. Q3 producer price inflation data will be released on Thursday in another otherwise quiet week. The key for the New Zealand dollar in the coming days will continue to be market expectations for the next RBNZ meeting on 23rd November. Investors remain torn between a 50bp and 75bp rate hike, and will be looking for news in the interim that may support either argument. Canadian dollar CAD continues to trade in much closer lockstep with the US dollar than any other currency in the G10, outperforming during periods of USD strength, and underperforming when the greenback deprecates. This was very much evident last week as, aside from the USD, the Canadian dollar ended at the bottom of the pack among the major currencies. Remarks from Bank of Canada governor Macklem were largely ignored on Thursday. Macklem said that more rate hikes were on the way, while warning that a recession and an increase in layoffs may be a price to pay for bringing down inflation. This week will be all about Wednesday’s inflation report. Economists are pencilling in an easing the headline number to 6.9% (from 7%), but an increase in core inflation to 6.3% (from 6%). An acceleration in the latter could bring another 50bp hike into view at the December BoC meeting, which would be bullish for CAD. At the time of writing, markets only see around a one-in-four possibility of such a move. Swedish krona As one of the higher-risk currencies in the G10, the improvement in investor appetite for risk, due to the relaxation of some of the restrictions to curb covid in China and expectations of a more dovish Federal Reserve, benefited the Swedish krona disproportionally last week. As a consequence, SEK rose by around 1.5% against the euro and 5% against the dollar. The focus this week will return to inflation, with the October CPI and CPIF reports set to be released on Tuesday. While the former is expected to continue on its upward trend, the latter (the Riksbank’s preferred measure of inflation), is projected to ease from September’s thirty-year high. Any surprises to the upside in either, notably the CPIF report, could heap additional pressure on the Riksbank to continue raising interest rates aggressively, just ahead of its November meeting next week. Norwegian krone The Norwegian krone ended last week almost unchanged against the euro, but in line with other risk assets, it appreciated strongly against the dollar. Inflation data continues to be one of the main drivers in FX markets. Norway’s October inflation data was released last week, and unlike in the US, it again surprised to the upside. Headline inflation rose sharply to 7.5% in October, from 6.9% in September, and above market expectation (7.1%) – its highest rate in 35 years. The core inflation rate, arguably of even greater importance, also broke to a new record high 5.9%. Figure 4: Norway Inflation Rate (2013 – 2022) Source: Refinitiv Datastream Date: 14/11/2022 The lack of a peak in domestic price pressures will provide a big headache for policymakers at Norges Bank, which may now have to raise rates higher and deeper into next year than currently expected, which could support the krone. Third quarter GDP data will be released on Friday. We will be paying special attention to this print, as Norges bank’s dovish pivot was due to risks to growth. Chinese yuan The Chinese yuan has managed to rally against the US dollar in the past few days, rising to its strongest position since September. US inflation news has certainly helped, as the expected gap between US and Chinese monetary policy has narrowed. An easing of some of the country’s covid restrictions on Friday, including a shortening of quarantine periods and a reduction in contract-tracing efforts, have further supported the yuan. The above changes mark a significant shift in China’s approach towards the pandemic, and have raised hopes that the economy will have more breathing room as the country continues its efforts to combat the virus. That said, these steps are small ones, and authorities have emphasised that zero-Covid remains in place. Infections in China are on the rise and Beijing and a number of other key cities have seen record numbers of new cases in the past few days. In addition to covid, we’ll focus on headlines from the Biden-Xi meeting in Bali today and hard data releases, out on Tuesday. The PBoC will also set the MLF rate that day, albeit no change in rates is expected, even with inflation surprising to the downside last week (2.1% in October). Economic Calendar (14/11/2022 – 18/11/2022) To stay up to date with our publications, please choose one of the below: 📩 Click here to receive the latest market updates👉 Our LinkedIn page for the latest news✍️ Our Blog page for other FX market reports 🔊 Stay up to date with our podcast FXTalk   Read the article on Ebury
Orbex's Jing Ren talks macroeconomic events of the week 14/11-18/11

Orbex's Jing Ren talks macroeconomic events of the week 14/11-18/11

Jing Ren Jing Ren 14.11.2022 14:40
14 November 2022 Are we there yet? Falling inflation pops up risk assets GBPUSD awaits budget catalystThe pound edges higher as Britain may look to restore markets’ confidence with a new budget. Sterling has recouped losses from the September budget firesale. Traders are awaiting a new announcement while riding on the dollar’s softness. Heightened volatility could be expected this week as British finance minister Jeremy Hunt presents his plan to fill a £50 billion fiscal hole. After the market sanctioned Mr Kwarteng’s unfunded tax cuts, fiscal discipline with a mix of public spending cuts and tax rises would alleviate worries about Britain’s finances. 1.2300 is the next hurdle as the recovery goes on. 1.1150 is the closest support. USDJPY tumbles on lower inflationThe Japanese yen soared over the prospect of a narrowing interest differential with the US counterpart. Following months of parabolic ride, a weaker US CPI finally gave traders an excuse to exit an overcrowded trade. The market has been watching Japan's falling foreign reserves and pondering whether Tokyo would commit more of its war chest to prop up its currency. But now a greater fall than the one from Japanese authorities’ intervention indicates that prolonged weakness has released the reversal tension, making the yen the main beneficiary of the dollar’s retreat. 137.00 is the first support and 144.00 a fresh resistance. UKOIL struggles as China’s demand worriesOil markets cheered after China announced an easing of some of its COVID curbs. Brent crude has been going sideways over demand concerns. China’s zero-COVID policy and a resurgence in infections in major cities remain a thorny problem. Now that the manufacturing centre of Guangzhou has become ground zero, expectations of a slowdown in China’s activities and its appetite for the commodity put the buy side on the defensive. Meanwhile, global supply has kept up with US crude stocks surprisingly rising to a 16-month high. The supply demand imbalance may cap the price under 105.00. 84.00 is a key support to monitor. NAS 100 recovers on renewed Fed pivot hopesThe Nasdaq 100 bounced back as hopes of peaking inflation took a foothold. With US CPI coming in below 8% for the first time in eight months, investors have regained faith in a policy U-turn by the Fed sooner than later. Plunging Treasury yields suggests that the central bank could live with a 50bp rate hike in December, rather than a 75bp one. However, the bounce could be opportunistic as it might take multiple sets of data over the next few months to make the Fed change its mind. The pivot may only happen when there is a consistent deceleration in inflation. The index is heading towards 12800 with 10500 as a fresh support. Key data release (GMT time) Monday, 14 November BoE Monetary Policy Report Hearings 23:50 Gross Domestic Product Tuesday, 15 November 00:30 RBA Meeting Minutes 07:00 ILO Unemployment Rate 10:00 Gross Domestic Product       Wednesday, 16 November 07:00 Consumer Price Index 13:30 Retail Sales BoC Consumer Price Index Core Thursday, 17 November 00:30 Unemployment Rate
For British pound and the UK itself, this week is simply action-packed

For British pound and the UK itself, this week is simply action-packed

Jing Ren Jing Ren 14.11.2022 15:19
This week, Cable traders will have a lot to look at. Of course the big event later in the week is the long anticipated Autumn Budget that is expected to be released on Thursday. It's not expected to be such a controversial affair this time around, but there are still some pending issues that could shake up the markets. And pending nervousness after what happened last time a new Chancellor announced a spending plan. The main issue is how will Chancellor Hunt balance the books over an expected shortfall of £60B due to slower economic outlook and increasing costs. What has been leaked so far suggests that it will be a combination of higher taxes and spending cuts. While these measures are generally understood to weigh on economic growth, they are also expected to help with the inflation situation. It's stagflation now What happens with the budget is particularly relevant for the BOE, since it is facing something of a crossroads. After UK GDP came in negative for the third quarter, it's expected to show the beginning of the prolonged recession the BOE anticipated. The BOE is also forecasting that inflation will remain in the double digits for a couple of months, and won't start trending lower definitively until the middle of next year. In other words, stagflation. The question is how will the BOE choose to deal with this situation. One way is to raise rates aggressively to kill off inflation, provoking a hard landing for the economy. Another is to try to rescue the economy and let inflation run hot until productivity can increase and stabilize the currency. Both are politically difficult solutions. Since the BOE and the new Chancellor are on the same wavelength, that could work with the Autumn Budget. An "austerity" budget would work with crushing inflation sooner, and shoring up the government's finances for an expected growth strategy later. Though, all of that is in theory; practice might be an entirely different matter. But it's useful to have some insight into how officials are thinking. The data that could shake things up The first bit of important information comes out tomorrow, which are labor figures. Here the market's focus is likely to be on the claimant count numbers, since the employment change and unemployment rates are from previous months. October claimant count is expected to continue its rise and reach 27K, up from 25.5K previously. That would be the largest number of people going on unemployment since March of last year. Wednesday has what could be the market mover in cable this week, which is the release of October inflation, which is expected to move up to 10.6%, and another multi-decade high. That's above the previous 10.1%. The BOE doesn't expect inflation to peak until next year. To tighten or not to tighten Where the BOE could see some relief is in the core inflation rate, which is expected to tick lower to 6.4% from 6.5% prior, the first drop in months. This is likely to have more of an impact on monetary policy, since the BOE appears to be worried about tightening too much, which could impact liquidity in the financial sector. With the government looking to cut spending, liquidity could be even tighter. So, if core inflation starts to move lower (or moves down faster than the market anticipates, like it did in the US), then that opens the very real possibility the BOE could let up on the tightening. That would weaken the pound, and push cable lower.
Inflation slowdown may let Reserve Bank of Australia go for 50bp or inaction

Aussie versus Greenback - Reserve Bank of Australia could go for a 25bp rate hike

Kenny Fisher Kenny Fisher 14.11.2022 16:35
The Australian dollar is in negative territory today, after posting huge gains last week. In the European session, AUD/USD is trading at 0.6690, down 0.22%. The US dollar took a nasty spill last week, and the Australian dollar made the most of it, gaining 3.6%. The US dollar was slammed after a soft inflation report, with headline and core inflation slowing in October and beating the forecasts. This lit up risk appetite and sent the Australian dollar to its highest level since September 22nd. The soft inflation report had such a strong effect on the greenback because it has raised expectations that the Fed will ease up on its rate tightening. After four consecutive hikes of 0.75%, the markets have now priced in a 0.50% increase at the December meeting. That would still represent an oversize hike, but investors have been looking for a reason to rush into stocks and the drop in inflation provided that excuse. It’s still too early to tell if inflation has peaked, but the Fed has tweaked its terminology, with Fed members now describing rate policy with words like “gradual” and “measured”. The Fed hasn’t sent out any signals that it is planning a dovish pivot. Quite the contrary; the Fed has stated clearly that the terminal rate could be higher than it had expected, but the markets appear to be ignoring this message and expectations are rising that the Fed will lower rates in the second half of 2023. RBA raises inflation forecast In Australia, inflation is also the number one priority. The Reserve Bank of Australia has raised its inflation forecast, with a peak expected at 8 per cent in December and has said inflation will not decline to the 2 per cent target until 2025. The RBA is likely to raise rates by 0.25% for a third straight time at the December meeting. RBA Deputy Governor Michele Bullock said last week that the RBA could have raised rates more sharply to bring inflation down faster, but that a “scorched earth” policy would have meant the loss of strong job gains. AUD/USD Technical There is resistance at 0.6821 and 0.6934 AUD/USD tested support at 0.6667 earlier today. Below, there is support at 0.6574 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Australian dollar takes a pause - MarketPulseMarketPulse
The Pound Is Now Openly Enjoying A Favorable Moment

United Kingdom: delayed budget announcement goes public this week. On Tuesday we get to know the health of labour market

Kenny Fisher Kenny Fisher 14.11.2022 22:15
The British pound has started the week with considerable losses. In the North American session, GBP/USD is trading at 1.1733, down 0.83%. US dollar claws back It was a week to forget for the US dollar, which tumbled against the major currencies. The pound jumped on the bandwagon and soared 4% last week. The driver behind the dollar’s slide was the October US inflation report, as headline CPI dropped to 7.7%, down from 8.2% in October. Core CPI also slowed and both readings were below expectations. This sent risk appetite through the roof, as equities climbed sharply while the dollar tumbled. Investors may have gone overboard in their exuberant reaction to the inflation report, and as a result, we’re seeing the dollar bounce back against the pound and most of the majors today. The US inflation report sent the financial markets into a tizzy last week because it raised expectations that the Fed will ease up on tightening. The markets have currently priced in a 0.50% hike at the December meeting; prior to the inflation release, it was close to a coin toss between a 0.50% and 0.75% increase. A 0.50% move would still mark an oversize hike, but the markets are acting as if the Fed has made a pivot, and there is growing speculation that the Fed will cut rates in the second half of 2024. This could be little more than wishful thinking by investors – the battle against inflation is far from over and the Fed hasn’t signalled that it is turning dovish. In fact, the Fed has warned that the terminal rate could be higher than previously expected. Whether the markets are ignoring that hawkish message at their peril remains to be seen. In the UK, it’s a busy week on the economic calendar, including the Autumn Statement, which was delayed from October due the resignation of Lizz Truss. Tuesday’s employment report is expected to show a drop in unemployment numbers and an increase in wage growth, so it could be another busy day for the British pound. GBP/USD Technical GBP/USD is testing resistance at 1.1767. The next resistance line is 1.1844 1.1609 and 1.1466 are providing support   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. British pound fall, jobs report next - MarketPulseMarketPulse
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Marc Chandler talks global markets covering EuroStoxx 600, CSI 300, macroeconomics and much more

Marc Chandler Marc Chandler 14.11.2022 23:03
November 14, 2022  $USD, Brazil, China, Currency Movement, Federal Reserve, France, inflation expectations, Japan, UK Overview: China’s new initiatives to support the property sector helped lift the Hang Seng. And while the China’s CSI 300 edged higher both the Shanghai and Shenzhen composites fell. Most Asia Pacific markets fell, while Europe’s Stoxx 600 is posting a small gain. US futures are sporting modest losses. European benchmark 10-year yields are 3-5 bp lower, including UK Gilts ahead of Thursday’s budget that is expected to confirm new borrowing (Office for Budget Responsibility projects to be GBP70 bln more than previously anticipated). The 10-year US Treasury yield is about seven basis points higher near 3.88%. The dollar is mostly firmer after last week’s sharp losses. The yen is leading to the downside with about a 1.3% loss, while the Canadian dollar is holding up the best, off around 0.2%. A small handful of Asian currencies, including the Chinese yuan, are posting small gains against the greenback. Higher yields and a stronger dollar are paring last week’s sharp gold gains. It is off a little less than 1%. December WTI rallied nearly 2.9% before the weekend and is also off nearly 1% today. The cold spell in the US is helping natgas recoup its pre-weekend loss of more than 5%. Similarly, though more volatile, Europe’s natgas benchmark is recovering fully the 10.5% drop seen at the end of last week. Iron ore continues to rebound. Today’s 3.1% advance comes on top of the more than 14% rally over the past two weeks. December copper’s four-day rally is stalling, and it is off 2.3%. It rallied about 13.5% over the past two weeks. December wheat snapped a four-day before the weekend with a nearly 1.3% bounce. It is come back offered and is trading about 1% lower.    Asia Pacific China has launched two multi-point programs to revive the property market and allow a more focused implementation of its zero-Covid policy. So much depends on the implementation that it is hard to discern the real impact. Moreover, given the excess capacity in the housing market, even with the 16-points to be implemented and lending renewed, many Western observers are skeptical that the underlying challenges will be addressed. Reducing mass testing, resisting overzealous lockdowns, reducing the number of days in quarantine for inbound travelers, dropping the punishments against airlines for bringing into too many sick passengers sound well and good, but they may not herald the kind of pivot some in the financial press are claiming. Chinese officials themselves claim that policy is not being relaxed, and the number of cases is surging to 7–8-month highs. Japan reports its first estimate of Q3 GDP first thing tomorrow. It is expected to slow from 0.6% quarter-over-quarter to 0.2% largely on the back of slower consumption. Consumption rose 1.2% in Q2 and is seen having grown about a quarter as much. Business spending may have increased a little and inventories may not have been a drag (-0.3% in Q2). Despite the yen's weakness, net exports were likely a drag after contributing slightly in Q2. The GDP deflator, which is often seen as among the best metrics of overall price pressures, may show the most deflationary pressure this year. After falling 0.3% in Q1 and 0.5% in Q2, the median forecast in Bloomberg's survey projects a -0.6% reading.  The dollar slid to its lowest level against the yen since late August ahead of the weekend, slightly below JPY138.50, but has rebounded back above JPY140 in the European morning. It had stalled in front of there in Asia, but stops, perhaps related to the roughly $510 mln option (at JPY140) that expires today, saw it quickly trade up to JPY140.40. The rebound in US yields was also supportive. Nearby resistance is around JPY141.00. The Australian dollar initially rose through the pre-weekend high marginally on some optimism arising from China's measures but has succumbed to mild profit-taking pressures. It was knocked back from nearly $0.6725 to slightly below $0.6665. A break of $0.6650 could spur a retreat toward $0.6600. The greenback may have completed a three-day 3.4% decline against the Chinese yuan that took it to its lowest level since September 20 (~CNY7.0255). Optimism about the Covid and property measures helped the yuan recover. China may boost the lending at the one-year Medium-Term lending facility tomorrow and it reports October economic activity. The PBOC set the dollar's reference rate at CNY7.0899, nearly matching the median projection in Bloomberg's survey for CNY7.0903. Europe While tighter US monetary policy, via rate and the balance sheets, are well known, we have argued that many observers do not seem to be aware of the magnitude of the fiscal tightening that is taking place. The budget deficit is set to be more than halved from last year. After the Great Financial Crisis, it took several years to deliver the magnitude that is being experienced this year. The UK is engaging in its own double-barrel effort. The Bank of England is one of the few central banks that have begun to actively sell bonds it bought during QE rather than the more passive approach of limiting the re-investment of maturing proceeds. The BOE also signaled that it will begin selling the GBP19 bln (~$22 bln) Gilts purchased to help stabilize the markets (Sept 28-Oct 14). These sales of long-term bonds and inflation-linked instruments will begin at the end of the month. The operations will be demand-led, in a reverse enquire window, rather than at a preannounced pace so as to be responsive to market conditions and interest. It will publish additional operational details next month. Meanwhile, the highlight this week is Chancellor Hunt's budget statement on Thursday. Spending will be cut, and taxes will rise, even if the precise details are not fully known. The windfall tax on oil and gas firms appears earmarked to increase. Also, more revenue is to be had on bracket-creep, while lowering the threshold for paying the top rate. Still, the Office for Budget Responsibility warns borrowing will be around GBP70 bln more than previously anticipated. The UK's Telegraph reported over the weekend that the US has given the UK and EU until April to reach an agreement on the Northern Ireland Protocol. It is when President Biden is expected to visit Northern Ireland and commemorate the 1998 Good Friday Agreement, for which the US is a guarantor. However, the article's only detail was a far cry from the US setting the deadline as the headline claimed: "...and White House officials have privately indicated that he [Biden] would be happier if the situation was resolved before then." The Democratic Unionist Party has boycotted the Northern Ireland Assembly since the May election over the Protocol. New elections were delayed last week potentially until April 13, three days after the anniversary in hope of the deal by then. The UK is demanding that the role for the European Court of Justice in adjudicating disputes over the Protocol is eliminated. This has become the latest sticking point. More promising was the Telegraph's story that UK and France have reached an agreement to limit migration. The UK apparently has agreed to pay GBP60 mln to France to share intelligence on the people being smuggling through the English Channel and boost the number of officers on the beaches to limit the proportion of migrants leaving France for the UK. The UK had demanded that British "officials" would be allowed to join the patrol of the French beaches, but Paris could not abide. Instead, some British immigration officials would be part of a joint control center. The stronger than expected eurozone September industrial output figures (0.9% vs. 0.5% median forecast and August revised to 2.0% from 1.5%) failed to deter the market from paring the euro's advance. It did rise a few hundredths of a cent above the pre-weekend high but continued to work its way lower through the European morning and slipped below $1.03. The low in the North American session before the weekend was near $1.0265 and that may offer the nearby target. Sterling's pre-weekend high was near $1.1855, and initially it was bid slightly through $1.1870 in early Asia Pacific trading, but when it stalled, momentum traders appear to take profits. Sterling fell to about $1.1745 and another attempt on the upside stalled near $1.1830. It came under new selling pressure in the European morning and the market may have its sights set on the roughly GBP560 mln options that expire at $1.1715 today. America The busy week of US economic reports begins slowly. Many economic calendars do not include it, but the results of the Federal Reserve's October survey of consumer inflation expectations will be reported today. In September, the one-year expectation had fallen to 5.4% from 5.7%, the lowest since September 2021. By comparison, the University of Michigan's survey found expectation in September slipped from 4.8% to 4.7%, and then rose to 5.0% in October. Last week's preliminary results showed a tick up to 5.1%. The Fed's survey saw three-year expectations edge up to 2.9% from 2.8% and the five-year outlook rise to 2.2% from 2.0%. The University of Michigan's survey showed the 5–10-year inflation forecast outlook rose to 2.9% in October from 2.7% in September, and then, the preliminary estimate for October rose to 3.0%. It has been between 2.7%-3.1% since the start of last year. The Fed's Waller pushed hard against the market exuberant response to the softer than expected inflation print. He argued that it was only one print, and that the Fed has more work to do. But he was preaching to the converted. The market is well aware of those facts and continues to price in not only a 50 bp hike next month but more hikes next year. Governor Cook also reiterated what is widely recognized the more and longer the Fed hikes the more it risks overdoing it. Governor Brainard and NY Fed President Williams speak today, and they too are unlikely to break fresh ground. No official that has spoken before or after the CPI report to give any reason to expect a dissent at the December meeting, which slows the pace of tightening from 75 bp to 50 bp, which had been tipped in the September dot plot. Brazil has been a market darling this year, but concerns about the new government's fiscal plans has pushed it from second place behind the Russian rouble to third place, below the Mexican's peso as well. With a new team in place, including naming a finance minister, Lula appears to be pushing for a constitutional amendment that would allow welfare expenditures to be permanently outside of the budget cap. The cap limits spending increases to inflation. Constitutional amendments require 3/5 of both houses to support it in two votes. The Brazilian real was the weakest currency in the world last week, falling 3% against the weakening greenback. The Bovespa fell 5%, bucking the global equity rally.    The US dollar fell to almost CAD1.3235 ahead of the weekend, culminating a 1.5% weekly drop. It was the fourth consecutive weekly decline for the greenback, the longest losing streak since October 2021. The modest unwinding of risk-sentiment and the firmer tone for the US dollar, has seen the greenback recover to CAD1.33. The next upside target may be near CAD1.3350. Many find the Mexican peso's weakness ahead of the weekend difficult to comprehend, but we suspect it was the result of unwinding short yen carry trades that were used to finance long peso positions. As the yen strengthened dramatically, positions were unwound. The dollar shot up from new two-and-a-half year lows (~MXN19.2655) to a little above MXN19.59. A move now through MXN19.63 may signal a move toward MXN19.70-75.      Disclaimer
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

The ECB Should Consider The Interests Of All EU Members

InstaForex Analysis InstaForex Analysis 15.11.2022 08:00
The EUR/USD currency pair moved very calmly on Monday. We admit that we expected a noticeable correction on the first trading day of the week and throughout the week, but so far, our calculations have yet to be justified. So far, there is a clear upward trend for the euro/dollar pair, and, from a technical point of view, everything now speaks in favor of further growth of the euro currency. Recall that on the 24-hour TF, the price managed to overcome all the important lines of the Ichimoku indicator, so finally, we can witness a reversal of the long-term downward trend. At the same time, the "foundation" and geopolitics can break the entire "raspberry" of the European currency at any moment. After all, it is not the euro that is growing but the dollar that is falling. Let's read more: the dollar has been growing for almost two years, and traders have been busy buying American currency. And now they are reducing purchases, reducing the demand for the dollar, so the pair is growing, but this does not mean that the demand for the euro currency is growing. COT reports If we talk about the demand for a particular currency, it is best to turn to COT reports. However, they do not give a clear answer to what is happening in the minds of traders and investors. The net position on the euro among professional traders has long been "bullish," and the euro currency began to grow only in the last couple of weeks. Moreover, according to the logic of things, this "bullish" position should increase for the European currency to continue growing. Or it should decline against the US dollar. As we can see, there are certain reasons for the pair's growth in the future, but they still need to look more convincing as the factors for the growth of the US dollar at the beginning or middle of this year. We rely on technical analysis when we make forecasts and recommendations, so now we need to look more toward purchases. But at the same time, we must keep in mind that the current growth of the euro is quite doubtful from a fundamental background point of view. The EU inflation report will be quite formal. Industrial production The current week began with the publication of a report on industrial production in the EU. It turned out to be slightly better than predicted, which could support the euro on Monday. However, this is different from the scale of inflation or central bank meetings, so count on a long and strong market reaction. Let's go through the other events of the week in Europe. GDP The second estimate of the GDP report for the third quarter will be published today. The market is waiting for a slowdown in the growth rate of the European economy to 0.2% q/q. Still, in principle, all indicator estimates do not have much significance for the market. Some reactions may follow this report, but it is too "stretched" in time to "see" a reaction to it. Recall that three estimates are always published for GDP, which rarely differs much from each other. And in any case, the market is more interested in the ECB's monetary policy, which directly impacts GDP. The speech of ECB President  Thus, a much more important event will be the speech of ECB President Christine Lagarde on Wednesday. The ECB seems to have decided to raise the rate "to the bitter end" or at least "significantly" to lower inflation in the Eurozone as much as possible. This is good news for the euro, but the market needs to understand to what level the regulator will be ready to raise the key rate. We have already said earlier that not all member countries of the alliance can bear the high cost of borrowing relatively smoothly for their economies. The ECB should consider the interests of all EU members, so the rate will not rise to 5%, as, for example, in the USA. EUR/USD Christine Lagarde can refute this assumption or confirm it. She may want to do this, but her comments may dissuade traders from continuing to buy the euro currency (if they even have a place to be). So far, the euro is growing more on the fact that the Fed will stop raising its rate in a few months, and since traders had plenty of time to work out all the tightening of monetary policy, now the actions of the ECB, which is behind schedule from the Fed, are more important. The average volatility of the euro/dollar currency pair over the last five trading days as of November 15 is 168 points and is characterized as "high." Thus, we expect the pair to move between 1.0177 and 1.0513 on Tuesday. The reversal of the Heiken Ashi indicator downwards signals a new round of downward correction. Nearest support levels: S1 – 1.0254 S2 – 1.0132 S3 – 1.0010 Nearest resistance levels: R1 – 1.0376 R2 – 1.0498 R3 – 1.0620 Trading Recommendations: The EUR/USD pair continues to move north. Thus, we should stay in long positions with targets of 1.0498 and 1.0513 until the Heiken Ashi indicator turns down. Sales will become relevant again by fixing the price below the moving average line with targets of 1.0010 and 0.9888. Explanations of the illustrations: Linear regression channels – help to determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.       Relevance up to 01:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/327095
Bank Of England Will Probably Be Unable To Avoid A Significant Easing Of Policy

The Value Of The Cable Makret (GBP/USD Pair) Is Very High

InstaForex Analysis InstaForex Analysis 15.11.2022 08:03
The GBP/USD currency pair also showed no desire to move volatile on Monday. The price continues to be above the moving average line, and at least one linear regression channel is already directed upwards. As in the case of the euro currency, the pound overcame the important lines of the Ichimoku indicator on the 24-hour TF, so it has technical grounds for continuing growth in the medium term. However, there are a lot of questions about the "foundation" and geopolitics. What will happen if the conflict in Ukraine escalates with renewed vigor? What will happen if the Bank of England stops raising the rate in the near future? Recall that the military conflict between Ukraine and Russia has not been completed or frozen, and peace talks are not even "smelling" now. The APU is gradually moving forward, but this hardly means that the Russian army will turn back, which would end the conflict. New rocket attacks on Ukrainian cities are not excluded, the use of new weapons is not excluded, and the intervention of third countries directly into the conflict is not excluded. I don't even want to talk about sanctions because the parties have already introduced almost everything that could have been introduced. We can assume that the worst is over, but the probability of this is not 100%.  Bank of England The same is true with the Bank of England and its monetary policy. The British regulator has already raised the rate eight times in a row, and inflation has been growing and continues to grow. The key rate at the moment is already 3%; this is the value at which it is possible to expect at least a slight slowdown in price growth. However, this week, the next inflation report will be published and judging by the forecasts, there is no point in expecting something good from it. Currently, inflation in the UK is 10.1%, and forecasts for October indicate a new increase to 10.7–11.0%. Consequently, the Bank of England can be expected to tighten monetary policy by another 0.75% in December, but to what extent can it raise the rate? After all, its economy is also going through hard times. The British government So far, it is unclear how the British government will close the "hole" in the budget by 50 billion pounds. The corresponding financial plan from Jeremy Hunt and Rishi Sunak will be presented only on November 17. Most likely, taxes will be raised, which may cause serious discontent among the British population and significantly lower the ratings of the Conservative Party. Therefore, the BA does not have the opportunity, like the Fed, to raise the rate as much as it wants. British inflation British inflation is the most important report of the week. Unemployment rate In the UK, the unemployment rate, changes in average wages, and retail sales will also be published this week. Of course, these reports do not match the inflation report, so we associate the main market reaction with this report. A new increase in the consumer price index can support the pound, as it will likely mean a new increase in the BA rate in December by another 0.75%. But this is just a theory and an assumption, and the market can react as you like. And also, no one can know if this report has not already been worked out because it is very easy and simple to expect a new acceleration of inflation in Britain now. UK Data In the US, retail sales, industrial production, and data on applications for unemployment benefits will be released this week. Also, quite secondary are the reports. With such a macroeconomic background, it will be difficult for the pair to continue growing, which now largely depends on traders' expectations for the Fed and BA rates. We expect a tangible correction after the "take-off" last week. The pound has recovered from its absolute lows by 1400 points and is regularly adjusted downwards. Therefore, this week is a good time for a rollback. As for the longer-term prospects, the pound may continue to grow, but we do not expect a rapid recovery after losses over the past year and a half. Most likely, periods of growth and rather deep corrections will alternate. The pound still needs to look like a stable and safe currency. GBP/USD The average volatility of the GBP/USD pair over the last five trading days is 222 points. For the pound/dollar pair, this value is "very high." On Tuesday, November 15, thus, we expect movement inside the channel, limited by the levels of 1.1516 and 1.1954. The upward reversal of the Heiken Ashi indicator signals the resumption of the upward movement. Nearest support levels: S1 – 1.1719 S2 – 1.1597 S3 – 1.1475 Nearest resistance levels: R1 – 1.1841 R2 – 1.1963 Trading Recommendations: The GBP/USD pair has started a minimal correction in the 4-hour timeframe. Therefore, at the moment, buy orders with targets of 1.1841 and 1.1960 should be considered in the case of a reversal of the Heiken Ashi indicator upwards. Open sell orders should be fixed below the moving average with targets of 1.1475 and 1.1353. Explanations of the illustrations: Linear regression channels – help to determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.       Relevance up to 01:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327097
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

Technical Analysis Of The Euro/US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 15.11.2022 08:05
Technical outlook: EURUSD tested swing highs at 1.0358 on Monday, just below 1.0364, producing a Doji Candlestick pattern on the daily chart as seen here. A high probability remains for an evening star bearish signal to be produced indicating a potential drop in the next few trading sessions. The single currency pair is seen to be trading close to 1.0320 at this point in writing and prepares to drag lower towards 0.9950. EURUSD has taken out two resistances at 1.0200 and 1.0350 levels last week. This calls for a potential pullback from the current levels, before pushing further towards 1.0600, projected as the Fibonacci extensions on the daily chart. Having said that, also note that the larger-degree corrective wave might have terminated around 1.0364. EURUSD needs to at least produce a pullback towards the 0.9950-1.0000 area if not a bearish reversal, before resuming higher again. Also, note that the recent upswing between 0.9740 and 1.0364 could be worked upon in the next few trading sessions. The potential support zone is seen around 0.9900 and 1.0000 levels. The bullish structure stays until the 0.9740 immediate support remains intact. Trading idea: Potential bearish turn against 1.0450 Good luck!     Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/300973
Euro-dollar Support Tested Amidst Rate Concerns and Labor Strikes

The Close Of The New York Stock Exchange Was Mostly Red

InstaForex Analysis InstaForex Analysis 15.11.2022 08:09
At the close of the New York Stock Exchange, the Dow Jones fell 0.63%, the S&P 500 fell 0.89%, and the NASDAQ Composite index fell 1.12%. Dow Jones Merck & Company Inc was the top gainer among the components of the Dow Jones index today, up 2.39 points or 2.44% to close at 100.35. Quotes of Johnson & Johnson rose by 2.66 points (1.57%), ending trading at 171.91. Visa Inc Class A rose 1.86 points or 0.91% to close at 206.86. The least gainers were Walmart Inc, which shed 4.19 points or 2.94% to end the session at 138.39. Home Depot Inc was up 2.55% or 8.02 points to close at 306.92 while Dow Inc was down 2.24% or 1.19 points to close at 51. 95. S&P 500 Leading gainers among the components of the S&P 500 in today's trading were CF Industries Holdings Inc, which rose 5.21% to hit 107.76, PENN Entertainment Inc, which gained 4.59% to close at 37.63. as well as Moderna Inc, which rose 4.57% to close the session at 179.03. The least gainers were Hasbro Inc, which shed 9.86% to close at 57.16. Shares of Bath & Body Works Inc. lost 8.17% and ended the session at 33.06. Quotes of SVB Financial Group decreased in price by 6.73% to 219.76. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Opiant Pharmaceuticals Inc, which rose 111.58% to hit 20.10, Freight Technologies Inc, which gained 113.15% to close at 0.44, and also shares of Toughbuilt Industries Inc, which rose 72.27% to end the session at 3.79. The least gainers were Satsuma Pharmaceuticals Inc, which shed 83.22% to close at 0.68. Shares of Sellas Life Sciences Group Inc lost 43.96% to end the session at 2.55. Quotes of Nuwellis Inc decreased in price by 40.00% to 0.12. Numbers On the New York Stock Exchange, the number of securities that fell in price (2188) exceeded the number of those that closed in positive territory (956), while quotes of 111 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,257 companies fell in price, 1,538 rose, and 202 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 5.37% to 23.73. Gold Gold Futures for December delivery added 0.30%, or 5.30, to $1.00 a troy ounce. In other commodities, WTI crude for December delivery fell 4.24%, or 3.77, to $85.19 a barrel. Futures for Brent crude for January delivery fell 3.57%, or 3.43, to $92.56 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged at 0.21% to 1.03, while USD/JPY advanced 0.77% to hit 139.86. Futures on the USD index rose 0.53% to 106.73.       Relevance up to 03:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/300975
EUR: German IFO Data and Central Bank Hawkishness Impact Euro/USD Range Trade

The Drop Of US Dollar Index Could Continue Towards The Next Potential Support

InstaForex Analysis InstaForex Analysis 15.11.2022 08:13
Technical outlook: The US dollar index has remained within a 100-point range between 105.80 and 106.80 levels in the past trading session. A bit of sideways action could be expected after prices dropped to 105.86 on Friday. A star Doji candlestick pattern was carved on the daily chart indicating a potential bullish price reversal ahead. A Morning Star could be completed today to confirm the same. The instrument is looking higher against the 105.86 mark. The US dollar index might have terminated its larger-degree corrective wave, which began from 114.67 earlier. The wave structure looks corrective between 114.67 and 105.86 levels, indicating at least a pullback rally if not a trend reversal. Potential targets for a pullback are pointing towards the 110.50-60 mark, going forward. The recent downswing, which could be worked upon is between 112.65 and 105.86 levels in the next few trading sessions. If prices manage to turn lower from 110.50, the drop could continue towards the next potential support seen around 104.30. Only a break above 112.65 will confirm that the larger-degree uptrend has resumed. Trading idea: Potential rally against 105.80. Good luck!   Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/300977
Analysis Of The EUR/JPY Pair Movement

Weak Data On Japan And On China Came Out | Japanese Speculators Are Still A Little Confused

InstaForex Analysis InstaForex Analysis 15.11.2022 08:16
Yesterday and this morning, USD/JPY continues to bounce off the embedded price channel line support at 138.50. Since the growth is not strong, the Marlin Oscillator is in the downward trend, the price is deep below the indicator lines, then we are seeing a correction. Growth prospect at 141.74 is the nearest embedded line of the price channel. But if external markets put pressure on the price, the correction may end earlier. Weak data on Japan came out this morning. The decline in GDP for the 3rd quarter exceeded forecasts: -0.3% (forecast assumed growth by 0.3% q/q), and on an annualized basis, GDP amounted to -1.2% vs. 1.1% expected y/y . In China, the data also came out weak: retail sales fell from 2.5% y/y to -0.5% y/y, industrial production slowed from 6.3% y/y to 5.0% y/y. The Chinese stock index China A50 is falling by 0.14%, the Japanese Nikkei 225 manages to show growth by 0.08%, while yesterday the US S&P 500 fell by 0.89%. Japanese speculators are still a little confused, we are waiting for developments. Our main scenario is a decline. The price is settling at the support of 139.84 on the four-hour chart. The signal line of the Marlin Oscillator is approaching the zero line, from which it can turn down with a high degree of probability and pull the price along with it. After the end of the correction, with the price settling under the level of 139.84, we are waiting for a movement to 138.50.     Relevance up to 03:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327099
The Data May Keep The British Pound (GBP) From Rising

A Sign Of Investors' Intentions To Open Direct Sales Of The Pound (GBP)

InstaForex Analysis InstaForex Analysis 15.11.2022 08:19
Yesterday, the pound sterling fell 74 points under the influence of an overall strengthening of the dollar by 0.44%. Trading volumes were comparable to Friday's (very high), so we can assume that investors are taking profits and closing positions. Settling under the immediate support of 1.1737 will be a sign of investors' intentions to open direct sales of the pound. This will make the 1.1500 target available. The price divergence with the Marlin Oscillator on the daily chart is getting stronger. On the four-hour chart, the signal line of the Marlin Oscillator approached the border with the downtrend area. Settling under 1.1737 may coincide with Marlin's transition to the negative area. This pattern of synchronicity will give the price the momentum for a fall. Aim for 1.1500. The MACD line, which is slightly above the target level, can also be attacked.     Relevance up to 03:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327101
The EUR/USD Price May Fall Under 1.0660

Analysis Of The EUR/USD Pair By Laurie Bailey

InstaForex Analysis InstaForex Analysis 15.11.2022 08:22
Yesterday, the euro created the initial conditions for a reversal - it closed the gap, turned the technical indicators down. The structure of the reversal can be complicated, even after the price goes below the level of 1.0205, it cannot be said that the reversal has taken place, so it is recommended to open short positions with lower volumes. The upward trends of the weekly chart have not yet run out of steam, perhaps they are late. The risk lies in the fact that a slight decline in the euro is associated with profit taking. Producer price data (PPI) will be released today. Monthly growth for October is projected at 0.4%, the annual index is expected to decline from 8.5% to 8.3% y/y. If the data does not differ greatly from the forecast, the euro may continue to fall. We are cautiously waiting for the price to drop below 1.0205. Further, the 1.0100/20 target will become available. On the four-hour chart, the Marlin Oscillator is approaching the zero line at a high speed; having overcome it, it will pull the price down with greater force. The MACD indicator line is being introduced into the range of 1.0100/20, so this area can be considered critical for growth, that is, the upward trend will be broken if the price can overcome it.   Relevance up to 03:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327103
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The EUR/USD Pair May Settle Below The Trend Line

InstaForex Analysis InstaForex Analysis 15.11.2022 08:25
Analysis of EUR/USD, 5-minute chart The euro/dollar pair "pretended" that it had corrected. The total volatility of the day was 80 points, which is quite small in the current realities. In the past few months, both currency pairs have shown enviable volatility, so we can expect stronger movements even on Mondays. Yesterday fundamental and macroeconomic backgrounds were virtually absent. There was only one report and it was the industrial production in the European Union, which turned out to be slightly better than expected. However, the market did not react to the data and traded sluggishly and in different directions for most of the day. Therefore, in fact, there was no correction. The ascending trend line remains relevant, and the price is above the Ichimoku indicator lines. Therefore, the trend is definitely up now, but we still expect a significant correction during this week, most likely towards the trend line. In regards to trading signals, the picture on Monday was close to ideal, despite the flat movement. At first, the pair did not bounce very accurately from the level of 1.0340, which was paired with the level of 1.0366. This signal should have been worked out with a short position. Subsequently, the quotes fell to the target level of 1.0269 and fell short by only a couple of points. However, this is an acceptable error. The profit on the first trade was 45 points, and at the same moment a long position should have been opened. The price rose back to the level of 1.0340 until the evening, where the long positions should have been closed (or a little earlier). Profit - about 45 more points. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000). Analysis of EUR/USD, 1-hour chart You can see that the pair continues to rise on the one-hour chart, has overcome the Ichimoku cloud on the 24-hour timeframe, as well as all the Ichimoku lines on the 4-hour timeframe. Last week, the reason for the growth was, of course, the US inflation report. If it didn't exist or if it turned out to be weak, then we could see a reverse movement. Now we should expect the euro's growth until the moment when the pair settles below the trend line. On Tuesday, the pair may trade at the following levels: 1.0072, 1.0124, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as the Senkou Span B (0.9912) and Kijun-sen (1.0151). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. The European Union will publish a report on GDP for the third quarter in the second assessment, and there's nothing in the US. We believe that the pair should start correcting. The next estimate of GDP should not cause a strong market reaction. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 01:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327091
The Market May Continue To Buy The Pound (GBP) This Week

The GBP/USD Pair Continues Its Upward Movement

InstaForex Analysis InstaForex Analysis 15.11.2022 08:28
Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair corrected more confidently than EUR/USD on Monday. The pair lost about 100 points during the day, but it still remains above the trend line and above all the Ichimoku indicator lines, so the upward trend continues. There was no macroeconomic background both in the UK and in the US, but this week there will be at least one significant report on Great Britain, which may become crucial for the pound. If traders so zealously worked out the US inflation report last week, then this week they can also work out the British inflation report, which, most likely, will again show acceleration. And the next acceleration of inflation will automatically mean a very likely increase in the rate of the Bank of England in December by 0.75%, which, in turn, may further increase the demand for the British pound. However, inflation may rise or not, it could but not so much, so the movement can easily be reversed. All trading signals on Monday formed around the level of 1.1760, although there was no pronounced flat. However, absolutely all trading signals turned out to be false. At the European trading session, it was difficult to assume that everything would be exactly like this, so traders could work out the first two signals. The first one turned out to be an absolute failure when the price settled below the level of 1.1760, since even 20 points in the right direction were not passed. The position closed at a loss. The second signal was more successful, as the price went up 50 pips, so traders could even make a small profit on this trade, but the signal was still considered false. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group closed 8,500 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position indicator has been slowly rising in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 79,000 shorts and 34,000 longs. The difference, as we can see, is still very big. The euro cannot rise even though major players are bullish, and the pound will suddenly be able to grow in a bearish mood? As for the total number of open longs and shorts, here the bulls have an advantage of 21,000. But, as we can see, this indicator also does not help the pound too much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair continues its upward movement on the one-hour chart. We consider such a movement somewhat unfounded, however, the market continues to buy, so the movement can theoretically continue as long as you like. However, this week we still expect a serious downward correction. This may be facilitated by reports from the UK. On Tuesday, the pair may trade at the following levels: 1.1354, 1.1486, 1.1645, 1.1760, 1.1874, 1.1974-1.2007, 1.2106. Senkou Span B (1.1383) and Kijun-sen (1.1594) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. The release of unemployment and wages reports is scheduled for Tuesday in the UK. This is not the most important data, but they can also provoke a small reaction. There will be nothing interesting in America today. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 01:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327093
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

Downside Pressure Of The Euro To Japanese Yen Pair (EUR/JPY) Will Be Seen

InstaForex Analysis InstaForex Analysis 15.11.2022 08:32
We feel confident that our count is correct. So, more downside pressure will be seen over the coming weeks as a corrective decline towards 132 which really starts to take over. Short-term we would like to see a break below minor support at 142.56 as confirmation that more downside pressure is added and the 132 target is set to be reached. Only an unexpected break above minor resistance at 147.11 will prolong the current temporary rally towards 148.30, but the real pressure is to the downside at this point. Relevance up to 07:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/300997
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

Analysis Of Movement Of The British Pound To Japanese Yen (GBP/JPY) Pair

InstaForex Analysis InstaForex Analysis 15.11.2022 08:35
The ongoing correction in wave 2 has taken a rather complex shape as the X-wave turned out to be an expanded flat formation. This indicates that impatience was in play and we could see a strong decline once minor support at 163 is broken for a quick decline towards 150.09 and likely even closer to 145.76 to complete the ongoing, but complex, corrective pattern in wave 2. However, once this correction is complete, the consequences of the correction in wave 2 being an expanded flat correction call for an extended wave in wave 3 when it takes over. However, as everything is at the right time, for now, our focus should remain towards the downside towards 150.09 and possibly lower.   Relevance up to 07:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301001
The Melbourne Institute Inflation Gauge For Australia Rose More Than Expected

Fresh China Stimulus Has Added To The AUD/USD Pair Rally | Meeting Of President Biden And President Xi Showed Some Goodwill Gestures f

Saxo Bank Saxo Bank 15.11.2022 08:39
Summary:  Perhaps reality set in that markets could perhaps have been a bit too euphoric after just one inflation print showed CPI had dropped. Investors took profits from the Nasdaq 100 and S&P 500 seeing the indices fall 1% & 0.9% ahead of US PPI and following Fed officials’ remarks about ‘additional work to do’ and “a ways to go” to bring down inflation. Inflation expectations in a New York Fed consumer survey increased. Crude oil took a haircut, falling 4.2% after OPEC cut its oil demand outlook. Despite the US dollar rising against almost all major G-10 peers, The Aussie dollar nudged up to 0.67 ahead of the RBA meeting minutes. What’s happening in markets? Investors took profits from the Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) seeing the indices fall 1% and 0.9% as there’s ‘additional work to do’ to bring down inflation  Perhaps reality set in, that markets could perhaps have been a bit too euphoric after just one inflation print showed CPI had dropped. The major US indices snapped their two-day rally because US Federal Reserve speakers raised the alarm that the Fed had extra work to do to bring down inflation. Fed Governor Christopher Waller warned that “the market seems to have gotten way out in front over this one CPI report” and the Fed has “got a ways to go”.  Adding to that, Fed’s Vice Chair Lael Brainard said there is “additional work to do”. Putting it into perspective, the S&P500 has still managed to hold onto a gain of 10% from October 10. Given the rhetoric of ‘more work to do’ has been reinforced, it’s important to remember bear markets produce wild swings in markets, and volatility might be expected to pick up given the uncertainty. Ten of the 11 sectors of the S&P 500 declined with Real Estate, Consumer Discretionary, and Financials falling the most and Health Care being flat. Amazon (AMXN:xnas) dropped 2.3% as the company announced plans to layoff about 10,000 employees. Tesla (TSLA:xnas) declined 2.6% as Elon Musk said he had too much work to juggle and was running Tesla “with great difficulty”. Toll and board games maker, Hasbro (HAS:xnas) tumbled nearly 10% on analyst downgrades. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) as China rolling out financial support to the property sector Hang Seng Index climbed 1.7% and CSI 300 edged up 0.1% on the news that the People’s Bank of China and the Banking and Insurance Regulatory Commission jointly issued a notice to financial institutions with 16 measures to address the liquidity squeeze faced by property developers through measures including the temporary relaxation of previously imposed redlines restricting banks from lending over certain ceilings to developers and calling for financial institutions to treat private enterprise developers equally with state-owned enterprises. Leading China private enterprise property developers listed in Hong Kong soared, with Country Garden (02007:xhkg) jumping 45.5% and Longfor (00960) surging 16.5%. US  treasury (TLT:xnas, IEF:xnas, SHY:xnas) pared some post-CPI gains on hawkish Fedspeak and higher surveyed inflation expectations. US treasury yields rose about 6bps across the curve, paring some of the post-CPI gains, after returning from a long weekend, with the 10-year yield rising to 3.86% and the 2-year yield back to 4.39%. Hawkish comments from Fed Governor Waller that the market has gotten too much ahead of itself on one CPI report and there is still a long way to go triggered selling in treasuries during Asian hours. To add to that, the usually dovish Fed Vice Chair Lael Brainard said there is additional work to do in fighting inflation. Higher inflation expectations from the New York Fed’s Survey of Consumer Expectations weighed on the bond markets. Median one- and three-year-ahead inflation expectations increased to 5.9% and 3.1% from 5.4% and 2.9%, respectively. The median five-year-ahead inflation expectations rose to 2.4% from 2.2%. Also weighing on the markets during the session as about 12 billion corporate bond issuance. Australia’s ASX200 (ASXSP200.1) trades at its highest level since June; focus on CBA today   The biggest bank in Australia and the second biggest company on the ASX, Commonwealth Bank (CBA) reported its financial results today, with the bank reporting its net profit after tax (NPAT) from continuing operations grew just 2% compared to the prior quarter to A$2.5 billion. Its common equity Tier 1 ratio fell slightly to 11.1% vs. 11.5% q/q (showing its holding slightly less cash), and it also declared a loan impairment expense of A$222 million from bad debts, (showing Australians are feeling the pinch of the rate hikes). All in all, CBA’s income rose 9%, driven by higher margins and volume growth, which partly offset the reduced non-interest income. Meanwhile, CBA’s expenses rose, 4.5% (excluding remediation) with higher staff costs adding to the bill. CBA’s shares have risen 21% from their June low. And the technical indicators on the monthly chart suggest its slow grind up could perhaps continue, but the monthly and daily charts look somewhat mixed/choppy- it guess you could say, showing volatility may pick up. A lot can be taken by the RBA’s commentary, which has alluded to insolvencies rising up. Which we can see has been reflected in CBA’s results. Also remember the RBA said that the rate hikes from May have not fully been felt by Australians yet. That means, CBA’s margins could remain thin given inflationary pressures and rising rates. If you are looking for alpha, we still believe commodities offer the most potential over banks. Crude oil (CLZ2 & LCOF3) took a haircut, falling 4.2% after OPEC cut its oil demand outlook WTI crude price fell 4.2% as OPEC cut its global oil demand outlook down 0.1million bpd to 99.6 million bdp for 2022 and down 0.1 million bdp to 101.8 million bdp for 2023.  In the natural gas market, Freeport LNG will likely extend an outage that began in June, curbing the much-needed supply to customers in Europe and Asia. AUDUSD holds steady at around 0.67 after balanced RBA meeting minutes Despite the US dollar rising against almost all major G-10 peers, the Aussie dollar has held its ground, thanks to fresh China stimulus (with China announcing a property sector rescue package, as well as relaxing some Covid restrictions). This has added to the AUDUSD rally, with the pair now gaining 6.2% this month, in anticipation that Australia’s trade surplus will bolster, with hopes that commodity demand will improve. In its minutes released this morning, it shows that the RBA considered the case for a 50bp rate hike but settled at raising 25bps as the RBA was mindful of the full impacts of prior hikes were yet to be fully felt.  What to consider? US PPI today to watch In the October CPI released last week, a decline in health insurance costs due to technical factors contributed to the deceleration in the service component of the core CPI. In the calculation of core PCE, which the Fed watches most closely, the healthcare services prices are estimated from the PPI dataset than the CPI database. As a result, investors are likely to pay more attention to the October PPI numbers scheduled to release on Tuesday than usual as they are trying to gauge the trend of the service component of the core CPI. Bloomberg consensus estimates for headline PPI are +04% M/M and +8.4% Y/Y and for core PPI are +0.3% M/M and +7.2% Y/Y. Biden and Xi stroke a conciliatory tone but key issues unresolved  The 3-hour long meeting between President Biden and President Xi on the sidelines of the G20 Summit in Bali showed some goodwill gestures from both sides. Nonetheless, key issues remain unresolved.  In a relatively conciliatory tone, the two leaders agreed to resume talks on climate change and economic issues between officials of the two countries. U.S. Secretary of State Blinken plans to visit China early next year. Japan’s Q3 GDP unexpectedly declined Japan reported Q3 GDP that unexpectedly declined by 1.2% on a seasonally adjusted annualized basis, contrary to the consensus expecting a 1.2% growth. Falling net exports and a decline in housing investment drove the weakness. China’s October activity data are expected to be weak October retail sales in China are expected to decelerate to +0.7% Y/Y according to the Bloomberg survey from +2.5% Y/Y in September as the surge in COVID cases and pandemic control restrictions took their toll on consumption. Industrial production is estimated to slow to +5.3% Y/Y in October from +6.3% Y/Y in September, amid Covid-related restrictions, slower auto production, and weak exports. Retail bellwether companies report Q3 results today Home Depot (HD:xnys) and Walmart (WMT) are scheduled to report Q3 results today. Investors will be monitoring the top-line growth figures and assessment of business outlooks to gauge the state of US consumers. For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-15-nov-2022-15112022
Underestimated Risks: Market Underestimating Further RBA Tightening

The Indian Rupee (INR) Pair Cheers Downbeat Prints Of India’s Retail Inflation

TeleTrade Comments TeleTrade Comments 15.11.2022 08:44
USDINR takes the bids to refresh intraday high and extends the week-start run-up. India’s retail inflation dropped to three-month low in October. US Dollar traces yields to defend recovery from three-month low. US PPI, risk catalysts eyed for fresh impulse ahead of the key US Retail Sales. USDINR renews its intraday high around 81.35 as it extends the previous day’s recovery to early Tuesday morning in Europe. In doing so, the Indian Rupee (INR) pair cheers downbeat prints of India’s retail inflation, as well as the US Dollar’s recovery amid mixed concerns. “India's annual retail inflation eased to 6.77% last month, helped by a slower rise in food prices, data showed on Monday,” mentioned Reuters. It’s worth noting that the outcome was higher than the 6.73% forecasts and the Reserve Bank of India’s (RBI) tolerance limit adds to the news. The same joins broad concerns over the major central banks’ pivot to suggest a softer rate hike from the RBI, which in turn propels the Indian equities and weighs on the INR price. On the other hand, the US Dollar Index (DXY) remains mildly bid near 107.00, extending the week-start rebound from a three-month low, as hawkish comments from the US Federal Reserve (Fed) officials underpin the recovery moves of the US Treasury yields. That said, the Fed’s Vice Chair for Supervision of the Board of Governors of the Federal Reserve System, Michael Barr mentioned that the inflation is too high. Before that, Vice-Chair Lael Brainard favored a 50 bps rate hike but also stated, “We have additional work to do.” Earlier on Monday, Federal Reserve Governor Christopher Waller also promoted the ideal of a 0.50% rate hike while also warning against the market’s perception of the pivot. It should be noted that the Covid fears from China and the absence of positive headlines from the first face-to-face meeting between US President Joe Biden and his Chinese counterpart Xi Jinping also challenge the market sentiment and keeps the USDINR buyers hopeful. Against this backdrop, S&P 500 Futures print 0.50% intraday gains around the monthly high but the US 10-year Treasury yields grind higher around 3.87%. Moving on, risk catalysts are important for the USDINR pair traders ahead of the US Producer Price Index (PPI) for October, expected at 8.3% YoY versus 8.5% prior, as well as the US Retail Sales for the said month. Technical analysis A 3.5-month-old ascending trend line, currently around 80.40, restricts short-term USDINR downside.
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

Risk Catalysts Are Important For The AUD/USD Pair Traders

TeleTrade Comments TeleTrade Comments 15.11.2022 08:52
AUDUSD recovers from intraday low after an inactive start to the week. Downbeat China data, hawkish RBA Minutes and the PBOC inaction failed to impress AUDUSD traders. Absence of major risk-negative headlines from G20 favors buyers amid sluggish session. Aussie Wage Price Index, US Retail Sales could entertain traders, risk catalysts are the key. AUDUSD portrays the market’s cautious optimism during early Tuesday in Europe, up 0.10% intraday near 0.6710 at the latest. In doing so, the Aussie pair struggles to justify multiple data/events published earlier in the day from Canberra, as well as from Beijing, amid mildly positive headlines from the Group of 20 Nations (G20) meeting in Indonesia. As per the latest RBA Minutes, “Board doesn't rule out return to 50bps, or pause.” The publication also mentioned that there is no pre-set path -considered a 50bps hike, saw the stronger case for 25bps in November. On the other hand, China’s Retail Sales marked the lowest print in five months, to -0.5% YoY versus 1.0% expected and 2.5% prior, whereas the Industrial Production (IP) also dropped to 5.0% growth versus 5.2% market forecasts and 6.3% previous readings during October. Elsewhere, the recently firmer Covid numbers from the dragon nation also propel the USDCNH price as Guangzhou reports 5,124 new local Covid-19 cases as of 00:00 November 15, 2022. With this, the daily numbers turn out to be double what they were over the weekend. “A positive sign on the eve of the summit was a three-hour bilateral meeting between U.S. President Joe Biden and Chinese leader Xi Jinping in which the two leaders pledged more frequent communications despite many differences,” stated Reuters. It should be noted that the concerns over major rate hikes challenge the AUDUSD buyers. That said, the Fed’s Vice Chair for Supervision of the Board of Governors of the Federal Reserve System, Michael Barr mentioned that the inflation is too high. Previously, Vice-Chair Lael Brainard favored a 50 bps rate hike but also stated, “We have additional work to do.” Earlier on Monday, Federal Reserve Governor Christopher Waller also promoted the ideal of a 0.50% rate hike while also warning against the market’s perception of the pivot. Such comments from the US Federal Reserve officials tame optimism surrounding future policy moves and renewed the US Dollar's strength. Against this backdrop, S&P 500 Futures print mild gains but the US 10-year Treasury yields grind higher around 3.87%, which in turn challenges the US Dollar Index (DXY) recovery near 107.00 by the press time. Looking forward, risk catalysts are important for the AUDUSD pair traders ahead of the US Producer Price Index (PPI) for October, expected at 8.3% YoY versus 8.5% prior, as well as the US Retail Sales for the said month. Additionally important will be Australia’s third quarter (Q3) Wage Price Index data, up for publishing on Wednesday. Technical analysis A clear upside break of the 100-DMA, around 0.6700 by the press time, becomes necessary for the AUDUSD bulls to keep the reins. Following that, the mid-September swing high near 0.6770 should lure buyers. Alternatively, bears remain off the table unless witnessing a clear break of the 50-DMA support, around 0.6500 by the press time.
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

UOB Group’s Economist Has Noted Recovery In The NZD/USD Pair

TeleTrade Comments TeleTrade Comments 15.11.2022 08:57
The strong recovery in NZDUSD could see the 0.6160 level revisited in the near term, note UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang. Key Quotes 24-hour view: “Yesterday, we held the view that ‘the rally in NZD is likely to extend even though a clear break of 0.6160 is unlikely’. However, NZD traded sideways within a range of 0.6067/0.6120. Further sideways trading would not be surprising, likely between 0.6060 and 0.6120.” Next 1-3 weeks: “There is not much to add to our update from yesterday (14 Nov, spot at 0.6105). As highlighted, the price actions from late last week appear to be a clear upside breakout and further NZD strength would not be surprising. Overall, only a break of 0.6000 (no change in ‘strong support’ level from yesterday) would indicate that NZD is not ready to rise to 0.6160. Looking ahead, the next resistance is at 0.6200.”  
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Crude Oil Price Dynamics Can Affect The UDS/CAD Pair

TeleTrade Comments TeleTrade Comments 15.11.2022 09:09
USDCAD comes under some renewed selling pressure on Tuesday amid modest USD weakness. Bearish crude oil prices might undermine the Loonie and help limit the downside for the major. Investors now look to the US macro data and speeches by FOMC members for a fresh impetus. The USDCAD pair struggles to capitalize on the previous day's bounce from the 100-day SMA support and meets with a fresh supply near the 1.3325 area on Tuesday. The pair maintains its offered tone through the early European session and is currently placed near the daily low, around the 1.3285-1.3280 region. The US Dollar comes under some renewed selling pressure amid rising bets for a less aggressive policy tightening by the Fed. In fact, Fed fund futures are now pricing in a 91% chance of a 50 bps rate hike at the next FOMC meeting in December. This, along with a generally positive tone around the equity markets, is seen as another factor weighing on the safe-haven buck and exerting some downward pressure on the USDCAD pair. The downside, however, seems cushioned in the wake of a mildly negative sentiment surrounding crude oil prices. Rising COVID-19 cases in China raise concerns about lower fuel consumption in the world's top crude oil importer. This comes after OPEC lowered its 2022 global demand forecast and continues to act as a headwind for the black liquid, which might undermine the commodity-linked Loonie and lend support to the USDCAD pair. The mixed fundamental backdrop warrants some caution for aggressive traders and positioning for a firm near-term direction. Traders now look to the US macro data - the Empire State Manufacturing Index and Producer Price Index (PPI). This, along with speeches by influential FOMC members and the US bond yields, will drive the USD demand. Apart from this, oil price dynamics should provide a fresh impetus to the USDCAD pair.  
Saxo Bank Podcast: Riksbank's Expected 75 Basis Point Hike Today

Inflation Data Would Have To Surprise To Provide Support For Swedish Krona (SEK)

TeleTrade Comments TeleTrade Comments 15.11.2022 10:00
In Sweden, inflation is due for publication today. An upside surprise is required to provide support to the Swedish Krona, economists at Commerzbank report. Inflation data from Sweden likely to support further hikes “The data for October, due for publication today, is unlikely to point towards an improvement on the inflation front, thus confirming that the Riksbank will have to take a further 50 bps rate step next week.” “The market also expects 50 bps next week. That means today’s inflation data would have to surprise on the upside to provide support for SEK, as this would fuel speculation that the Riksbank will have to raise its rate path again, meaning that it would expect rates to peak at more than 2.50%.”  “Market sentiment of course also remains an important factor for further SEK gains.”  
Mexican Rate Spread: Tight vs. Central Bank's Rate Spread and Implications for Dis-inversion

Aggressive Bearish Bets Has Arrived Around The EUR/GBP Pair

TeleTrade Comments TeleTrade Comments 15.11.2022 10:04
EURGBP comes under some selling pressure on Tuesday, though the downside remains cushioned. The mixed UK employment figures reaffirm further BoE rate hikes and underpin the British Pound. Talks for a more aggressive tightening ECB  benefit the shared currency and lend support to the cross. The EURGBP cross extends the previous day's modest pullback from the 0.8820-0.8830 resistance zone and edges lower through the early European session on Tuesday. The cross remains on the defensive around the 0.8770-0.8765 region and moves little following the release of the latest UK employment details. The UK Office for National Statistics reported that the jobless rate unexpectedly ticks higher to 3.6% during the three months to September from 3.5% previous. Adding to this, the number of people claiming unemployment-related benefits came in at 3.3K against consensus estimates pointing to a fall of 12.6K. The disappointment, however, was offset by stronger wage growth figures. In fact, the Average Earnings Excluding Bonuses rose to 5.7% from 5.5%, beating estimates for an uptick to 5.6%. The data reaffirms market bets for a further policy tightening by the Bank of England, which is seen offering some support to the British Pound. That said, a modest pickup in demand for the shared currency acts as a tailwind for the EURGBP cross and limits the downside. Against the backdrop of talks for a more aggressive policy tightening by the European Central Bank (ECB), the emergence of fresh selling around the US Dollar offers support to the Euro. This, in turn, warrants some caution before placing aggressive bearish bets around the EURGBP cross and positioning for any further intraday losses ahead of the German ZEW Economic Sentiment.
Middle Distillates: Strong Market Support Expected

It seems that Biden-Xi meeting during the G-20 summit in Bali delivered us with more positive news than it was expected at first

ING Economics ING Economics 15.11.2022 10:56
Presidents Xi and Biden strike unexpectedly constructive tone at G-20 summit in Bali Source: shutterstock Macro outlook Global Markets: Perhaps the most unexpected development yesterday, was a surprisingly positive meeting between President Xi and President Biden at the G-20 summit in Bali. The two talked about Taiwan, where Biden noted that the US position on Taiwan and the "One China – two systems" stance, had not changed. That was helpful. For his part, President Xi openly spoke out against the use of nuclear weapons by Russia. That was also helpful. The meeting will be followed up by a visit by Secretary of State, Blinken, to visit senior Chinese officials later in the year. This was far more progress than we, or indeed most commentators had expected, and dominates what may otherwise turn out to have been a fairly irrelevant G-20 summit. That said, the feel-good factor that had been driving markets following the softer-than-expected October CPI release in the US evaporated on Monday. Stocks had been trading higher after a slightly weaker open, but tailed off sharply in late trading, leaving the S&P500 and NASDAQ down about a per cent. There had been more optimism in Asian bourses yesterday following the announcement of measures to reduce the impact of zero-Covid and to prop up the property sector. However, the CSI 300 finished only slightly higher on the day, while the Hang Seng Index put in a more solid 1.7% gain. Equity futures point to a turnaround today with US futures markets suggesting a positive open, while Chinese markets may open lower. Currencies haven’t done a lot. EURUSD is at 1.0317, not much changed from this time yesterday, the same goes for the AUD, though both the GBP and JPY have lost some ground. Asian FX had a mixed day yesterday. The KRW and INR both dropped back about half a per cent, while there was better news for the TWD and CNY. US Treasury yields pushed higher again, and really don’t seem to know which way to go. The 2Y yield is 5.7bp higher, while the 10Y is 4.1bp higher at 3.854%. Lael Brainard got in on the act talking about the Fed soon beginning to moderate the pace of tightening, though noting that they still had work to do. At least she didn't say they had "...a ways to go" which despite being ungrammatical is becoming quite a cliché.   G-7 Macro: Second-tier releases dominate the  G-7 Macro calendar today. UK labour market figures, Germany’s ZEW business survey and US PPI indices are not likely to provide much for markets to base directional trades on.   China: at 10.00 SGT/HKT today we have China’s October data dump, including industrial production, retail sales, fixed asset investment, residential property investment and the surveyed jobless rate. On balance, we don’t think the numbers will be particularly uplifting, in spite of the Golden Week holidays, which ought to have provided some support to retail spending.    Japan: 3Q22 GDP fell 0.3%QoQ, weaker than expectations for a 0.3% QoQ increase. This marks a sharp slowdown from the 0.9% QoQ increase registered for 2Q22. Private consumption grew 0.3%QoQ, down from 1.2% in 2Q22. But the biggest drag on growth came from net exports, which subtracted 0.7pp from the total GDP growth figure, while inventories nicked off a further 0.1pp. Private business investment was a bit stronger, rising 1.5%QoQ and contributing 0.2pp to overall growth, and public investment also added a further 0.1pp to overall GDP growth. Today’s weaker data add downside risk to our 2022 and 2023 GDP forecasts of 1.6% and 1.1% respectively. Indonesia:  Trade data for October is due for release today.  We expect another month of strong gains for imports and exports with the trade balance still likely in surplus.  Export growth however has slowed, which should translate to a less sizable trade surplus.  Record high trade surpluses have supported the IDR for most of 2022 but the gradual decline of this buffer suggests that a key support for the currency may be fading going into 2023.  India: Indian inflation came in at 6.77%YoY for October, which was marginally higher than had been forecast by the consensus (6.7%) but still a decent pull back from the September reading of 7.41%. Inflation will remain at about this level in November, before spiking higher again on base effects in January and February before moving lower again. So the RBI’s job isn’t over yet, even if they can probably take a more laid-back approach to rate hikes from here on. What to look out for: China activity data and G-20 Japan GDP and industrial production (15 November) Australia RBA minutes (15 November) China activity data (15 November) Indonesia trade balance (15 November) US empire manufacturing and PPI inflation (15 November) Fed's Williams, Harker Cook and Barr speak (15 November)   Japan core machine orders (16 November) Australia Westpac leading index and wage price index (16 November) US retail sales (16 November) Japan trade balance (17 November) Australia labor data (17 November) Singapore NODX (17 November) Malaysia trade (17 November) Bank Indonesia policy meeting (17 November) Bangko Sentral ng Pilipinas policy meeting (17 November) US housing starts and initial jobless claims (17 November) Japan CPI inflation (18 November) US existing home sales (18 November) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Further Upward Price Movement Of The AUD/USD Pair Is Expected

Whether There Will Be Another Soft RBA Decision Will Depend On The Data

Kenny Fisher Kenny Fisher 15.11.2022 13:26
The Australian dollar continues to gain ground and hit a two-month high earlier today. In the European session, AUD/USD is trading at 0.6756, up 0.85%. RBA to limit forward guidance The Reserve Bank of Australia minutes noted that the use of forward guidance had been useful during the Covid pandemic, but it would no longer remain a tool unless “appropriate”. The RBA said that rates “are not on a pre-set path” and it will determine the size and timing of future hikes based on incoming data and the outlook for inflation and employment. The takeaway from the minutes is that the RBA will not always provide forward guidance on interest rates, as it wants the flexibility to determine rate policy based on incoming data rather than be tied to its guidance. The RBA has eased its tightening, with two straight hikes of 0.25%, and is signalling to the markets that it could pause its rate-hike cycle or resume oversize rates, depending on the data. The RBA’s rate cycle has been steep, with 250 points in tightening since May. Despite this, inflation remains stubbornly high, and the RBA has revised upwards its inflation forecast for the end of 2022 to 8.0%, up from 7.8%. The central bank had expected inflation to slow to 3%, the top of its inflation target range, by December 2022, but that has been revised to 2025. The Federal Reserve is also looking at easing its tightening, as the markets have priced in a 0.50% increase at the December meeting. Fed Vice Chair Brainard said on Monday that she favored slowing the pace of rate hikes, but that further hikes were required in order to bring down inflation. Brainard’s stance was echoed by Fed member Waller, as Fedspeak remains hawkish, despite the unbridled euphoria in the financial markets after last week’s soft US inflation report. The Fed remains committed to curbing inflation, and a dovish pivot would make its rate tightening less effective.   AUD/USD Technical AUD/USD is testing resistance at 0.6729. Above, there is resistance at 0.6821 There is support at 0.6603 and 0.6490 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
AUDUSD Climbs to two-Months high as RBA considered 50 bps rate hike on Nov 1st.

AUDUSD Climbs to two-Months high as RBA considered 50 bps rate hike on Nov 1st.

Surya Teja Surya Teja 15.11.2022 14:17
AUDUSD rises to 0.67692 as the time of writing and the main drivers for these bullish AUD and other Risk-On assets mainly because of weaker USD across the board as well as Risk-Sensitive AUD supported by Today’s Hang Seng Index gains up 4.1%. Weaker USD technically will continue ahead of the US trading session until we see the US PPI data release where volatility are expected. Australia looking forward to have constructive dialogue with China during G20 meeting in Bali – Indonesia, which market will expect the easing China Zero-COVID Policy as the result of the dialogue. Price-Action shown the critical 0.67 major level to hold if bullish want to stay alive where 100 DMA providing dynamic support level.
The Market May Continue To Buy The Pound (GBP) This Week

What do we learn from the UK labour market data?

Kenny Fisher Kenny Fisher 15.11.2022 21:48
The British pound has reversed directions on Tuesday and posted sharp gains. In the European session, GBP/USD is trading at 1.1902, up 1.22%. The pound has punched above 1.19 for the first time since August 19th. UK wage growth a headache for BOE The UK employment report was soft, with unemployment ticking higher to 3.5%, up from 3.4%. Unemployment rose by 3.3 thousand, down from 3.9 thousand but well off the consensus of -12.6 thousand. The BoE will be most concerned about the increase in wage growth, which will create even more inflation, at a time when inflation is above 10%. Wages excluding bonuses rose to 5.7%, up from 5.5% and ahead of the consensus of 5.6%. There isn’t much slack to speak of in the labour market and the BoE will be under pressure to continue hiking aggressively, even though this will hurt the struggling UK economy. The Fed may be breathing a bit easier today, as the exuberance which sent the stock markets flying last week appears to have subsided. Investors jumped all over the soft inflation report, as risk sentiment soared and the US dollar retreated. Fed members have responded by sticking to a hawkish script, as any dovish signals could complicate its battle to bring down inflation. Fed Vice Chair Brainard said on Monday that she favored slowing the pace of rate hikes, but that further hikes were required in order to bring down inflation. Brainard’s stance was echoed by Fed member Waller who said that while the Fed may ease up on the size of future rate hikes, it should not be seen as a “softening” in its fight against inflation. Waller added that the 7.7% inflation reading in October was “enormous”, a possible rebuke of the exuberance shown by investors to the drop in inflation. GBP/USD Technical GBP/USD has broken through several resistance lines today. The next resistance lines are 1.2030 and 1.2224 1.1703 and 1.1648 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound soars despite weak job data - MarketPulseMarketPulse
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Declining gross domestic product of Japan hasn't supported Greenback

Kenny Fisher Kenny Fisher 15.11.2022 21:57
The Japanese yen hit its highest level since August 29th, as the currency powers higher. In the North American session, USD/JPY is trading at 139.17, down 0.53%. The US dollar can’t find its footing, and even a soft GDP reading out of Japan hasn’t put a dent in the current yen rally. The economy declined in the third quarter for the first time in a year. GDP fell by 1.2% YoY, much weaker than the consensus of a 1.1% gain and the 4.6% gain in Q2. The usual suspects were the drivers of the decline in GDP – weak global growth and rising inflation. In addition, the weak yen, which recently fell to 32-year lows, has contributed to higher prices. The yen has reversed its fortunes since the unexpectedly soft US inflation report and has soared 6.4% in November. Fed sends a hawkish message The investor exuberance which sent the stock markets flying last week appears to have subsided. Investors jumped on the soft inflation report, as risk sentiment soared and the US dollar retreated. Fed members have responded by sending a hawkish message to the markets, as any dovish signals could complicate its battle to bring down inflation. Fed Vice Chair Brainard said on Monday that she was in favor of slowing the pace of rate hikes, but that further hikes were still required in order to bring down inflation. Brainard’s stance was echoed by Fed member Waller who said that while the Fed may ease up on the size of future rate hikes, it should not be seen as a “softening” in its fight against inflation. Waller added that the 7.7% inflation reading in October was “enormous”, in sharp contrast to the markets, which chose to focus on the fact that inflation fell sharply from 8.2% in September. The Fed is committed to curbing inflation and is far from convinced that inflation has peaked, even though inflation appears to be trending in a downward direction. USD/JPY Technical USD/JPY is testing support at 1.39.66. Below, there is support at 138.69 There is resistance at 140.88 and 141.61 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen rises despite GDP decline - MarketPulseMarketPulse
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

British pound gains as greenback weakens and the UK market gets solider

Alex Kuptsikevich Alex Kuptsikevich 15.11.2022 14:59
The British pound is on the offensive, having risen to a three-month high against the dollar thanks to a developing correction in the latter, market stabilisation following the change of government and pro-inflationary news. Jobless claims rose by 3.3K in October after a 3.9K increase in September. September's data was an impressive revision from the initially reported 25.5K jump. Statistics now point to stabilisation in the number of unemployed near 1.5m - 2009-2013 levels. A month ago, the UK labour market was losing jobs rather briskly. More positivity comes from the wage dynamics. Taking bonuses into account, they are up 6% in the three months to August, better than the 5.5% a month earlier. In addition, rumours are circulating about the Prime Minister's intention to raise the minimum wage, which could further push wages. A more substantial than previously estimated labour market and new signs of rising wages create more incentive for the Bank of England to raise interest rates actively. GBPUSD surpassed 1.19 on Tuesday, adding more than 15% to the lows at 1.0330 set on September 26th. The Cable overcame a pullback of more than 38.2% of the amplitude of the decline from the highs of 2021 to the lows of September, a significant Fibonacci retracement level. Breaking this mark indicates that we see more than a corrective bounce in the Pound before a new round of decline. However, despite the impressive size of the rally of the last almost two months, the Pound still has the potential to rally further due to the extreme previous oversold condition. The nearest local bullish target looks to be the 1.2200 area, where the pair received support on declines in 2016, 2019 and 2020. There are chances that this area will now turn into an equally significant resistance. This area is also close to the 50% mark of the decline, a move above which could clear the way further up.
German industry rebounds in January

Germany: ZEW Economic Indicator increased noticeably

Conotoxia Comments Conotoxia Comments 15.11.2022 22:49
Germany's largest index, the Dax (DE40), has risen by more than 20 percent since its recent lows. It seems that this may have been influenced by, among other things, falling commodity prices, particularly for natural gas, which, according to IMF data, has fallen by more than 21 percent since its peaks. Could this signal the start of a change in trend or just a rebound from a bottom? Inflation key to the German economy According to the President of the Federal Statistical Office of Germany: “The inflation rate in Germany - measured as the change in the consumer price index (CPI) compared to the same month of the previous year - was +10.4 % in October 2022. The inflation rate has thus increased again after +10.0 % in September 2022. The main causes for the high inflation continue to be enormous price increases for energy products. But we are also increasingly observing price increases for many other goods and services. Rising food prices are now particularly noticeable for private households.” Today's data from the ZEW Economic Indicator, which rose by 22.5 points to -36.7 in November (values below 0 points indicate a deterioration in the situation), thus beating some of the best forecasts (-50 points were expected), seems to have warmed the climate. As the institute's commentary states: "The latest reading suggested the economic outlook for Germany has improved significantly compared to October, likely due to hopes that inflation rates would fall soon and policymakers would not have to tighten monetary policy as hard and/or for as long as feared. About 50.8 percent of the surveyed analysts predicted a deterioration in economic activity over the coming months, while 14.1 percent of them expected it to get better and 35.1 percent expected no changes.” Additionally, as Investing.com analyst Geoffrey Smith notes: “The benchmark DAX index rose nearly 1% on Monday after the European Commission gave Berlin permission to nationalize a former unit of Russian gas monopoly Gazprom, bolstering the efforts of Europe's largest economy to restore order to its energy market after the chaos caused by Russia's war in Ukraine.”  Source: MT5, DE40, Daily EUR/USD a forecast for change for the European market? The cumulative data suggesting a possible improvement in the European market situation seems to have coincided with increases in the EUR/USD pair, which has risen by more than 6 per cent since its recent lows. This may be a reason for global investors to switch to an improving economic situation in the European market, expectations of falling inflation, or even the valuation of the end of the conflict in Ukraine. However, it seems that until we see the first declines in euro area interest rates, confirmation of a change in trend may seem doubtful. Source: MT5, EURUSD, Daily   Author: Grzegorz Dróżdż, a Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Read the article on Conotoxia.com
At The Close On The New York Stock Exchange Indices Closed Mixed

At The Close Of The New York Stock Exchange Most Securities Rose In Price

InstaForex Analysis InstaForex Analysis 16.11.2022 08:02
At the close of the New York Stock Exchange, the Dow Jones rose 0.17%, the S&P 500 rose 0.87% and the NASDAQ Composite rose 1.45%. Dow Jones Walmart Inc was the top performer among the components of the Dow Jones index today, up 9.05 points or 6.54% to close at 147.44. Nike Inc rose 2.32 points or 2.22% to close at 106.71. Salesforce Inc rose 3.41 points or 2.15% to close at 162.07. The least gainers were UnitedHealth Group Incorporated, which shed 10.74 points or 2.09% to end the session at 503.01. The Travelers Companies Inc was up 1.75% or 3.20 points to close at 179.50 while Verizon Communications Inc was down 1.59% or 0.61 points to close at 37.70. S&P 500 Leading gainers among the S&P 500 index components in today's trading were SVB Financial Group, which rose 9.18% to 239.93, Ceridian HCM Holding Inc, which gained 8.30% to close at 72.68. as well as Match Group Inc, which rose 6.66% to end the session at 51.92. The least gainers were Capital One Financial Corporation, which shed 7.18% to close at 103.56. Shares of Albemarle Corp shed 6.48% to end the session at 295.86. Quotes Synchrony Financial fell in price by 4.85% to 35.92.  NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Tenax Therapeutics Inc, which rose 45.74% to hit 0.14, Qurate Retail Inc Series B, which gained 37.28% to close at 7.14. , as well as shares of Exagen Inc, which rose 42.38% to close the session at 2.99. Shares of Jowell Global Ltd. were the biggest losers, losing 56.65% to close at 0.69. Shares of Fast Radius Inc lost 47.79% and ended the session at 0.10. Quotes of Kingstone Companies Inc decreased in price by 45.03% to 0.91. Numbers On the New York Stock Exchange, the number of securities that rose in price (2,346) exceeded the number of those that closed in the red (788), while quotes of 102 shares remained virtually unchanged. On the NASDAQ stock exchange, 2499 companies rose in price, 1319 fell, and 197 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 3.41% to 24.54. Gold Gold futures for December delivery added 0.29%, or 5.15, to hit $1.00 a troy ounce. In other commodities, WTI crude for December delivery rose 1.12%, or 0.96, to $86.83 a barrel. Futures for Brent crude for January delivery rose 0.62%, or 0.58, to $93.72 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.25% to 1.04, while USD/JPY fell 0.51% to hit 139.16. Futures on the USD index fell 0.15% to 106.37.   Relevance up to 03:00 2022-11-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/301152
Analysis Of The AUD/USD Commodity Currency Pair's Price

The Aussie Price (AUD) Is Trying To Return To The Channel

InstaForex Analysis InstaForex Analysis 16.11.2022 08:07
With a desperate jump of 98 pips, the aussie left the declining channel above 0.6747 on the daily chart. Now the price is trying to return to the channel, but since the channel is built on two points, it has been discontinued. Now, to confirm the reversal, it is convenient to use the level of 0.6700 – the low of September 7th. If the support is broken, the 0.6595 target will become available. We can expect growth to develop when the price overcomes yesterday's high at 0.6799 - the nearest target will be 0.6871 - the low of August 5. The price is consolidating in the range of 80 points on the four-hour chart. Settling will increase the likelihood of further growth, a downward price reversal will mean working out the downward potential set by the divergence. The probability of these scenarios is equal. We are waiting for the development of events.   Relevance up to 03:00 2022-11-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327222
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

The Main Scenario For Cable Market (GBP/USD) Is Downward

InstaForex Analysis InstaForex Analysis 16.11.2022 08:09
The British pound managed to jump 270 points yesterday without breaking the divergence with the Marlin Oscillator on the daily chart. This is a sign of a trend reversal, but the price is in the consolidation range of August 22-26 at 1.1737-1.1933, so it is extremely important to wait for the price to exit this range in one direction or another with consolidation. Our main scenario is downward, so the target is the level of 1.1500. A price divergence has formed with the Marlin Oscillator on the four-hour chart. This increases the probability of overcoming the support of 1.1737 on the first attempt. Settling below the level opens the 1.1500 target, but on this way the price is waiting for the MACD line (1.1625), so a slight correction is possible here. The correction resistance will be the 1.1737 level.   Relevance up to 03:00 2022-11-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327224
The EUR/USD Pair: There Are Still No Sell Signals

Technically, The Euro (EUR) Has Outlined A Reversal

InstaForex Analysis InstaForex Analysis 16.11.2022 08:12
On Tuesday, the euro made a desperate attempt to rise, reaching the target level of 1.0470 (April low), after which the price returned to the level of 1.0360. Now we have only one thing left - to wait another day to let the price decide - whether to repeat the attempt at growth, or settle under 1.0360 and return to 1.0205 and then to 1.0100/20. From a purely technical point of view, the euro has outlined a reversal, as the Marlin Oscillator tells us. The influence of the oscillator is increasing on the four-hour chart - a divergence with the price has been formed. With the transition of the signal line of the oscillator into negative territory, the pressure on the price will increase even more. But we are waiting for the price to settle under 1.0360. The immediate support at 1.0205 will soon be strengthened by the MACD indicator line, as it approaches it. Here the medium-term direction of the price will be decided.       Relevance up to 03:00 2022-11-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327226
Analysis Of USD/CHF Pair: The Swiss Currency Pair Rebounds

The USD/CHF Pair Is Still Moving In A Sideways

InstaForex Analysis InstaForex Analysis 16.11.2022 08:24
Although USD/CHF on the daily chart is still moving harmoniously inside the weekly channel which dipped upwards which means that Buyers are still more dominant even though in fact on the Daily chart the USD/CHF is still moving in a sideways condition as for now after successfully testing the support level 0.9370 which is actually in the Bullish Rejection Block area, it looks like USD/CHF in the next few days will try to go up to run a liquidity pool at the level of the Equal High area which is at the level of 1.0147 but if on the way there suddenly USD/CHF experiences a significant correction until it passes below the level of 0.9350 then the most likely scenario to test the Equal High level which previously described will be invalid.     Relevance up to 01:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/113949
Technical Outlook Of The EUR/JPY Pair Movement In Short Term

The EUR/JPY Pair Will Experience A Downward Correction

InstaForex Analysis InstaForex Analysis 16.11.2022 08:28
On the daily chart, the EUR/JPY cross currency pair on the whole still looks moving above its Moving Average 200 which means that the Buyers still dominate. However, With the appearance of deviations between price movements and the CCI indicator as well as the bearish 123 pattern, it is confirmed that in the near future EUR/JPY will experience a downward correction where the level to be tested is 142.55 if this level is successfully broken below the 139.51 level will be the next level to be tested. EUR/JPY will not return to its initial bias, especially if it breaks above the 146.71 level because if this level is successfully penetrated upwards, the possibility of a downward correction scenario described previously will canceled automatically.   Relevance up to 01:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/113947
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

Technical Outlook Of Movement Of The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 16.11.2022 08:30
Technical outlook: EURUSD rose through the 1.0480 high intraday on Tuesday before hitting resistance and reversing sharply. The single currency pair slipped to 1.0280 thereafter and is seen to be trading close to 1.0355 at this point in writing. Furthermore, it has carved a Pinbar candlestick pattern on the daily chart, indicating a potential bearish reversal against the 1.0480 mark. EURUSD has easily taken out two significant resistances at 1.0200 and 1.0350 last week. Also, note that prices rallied more than 120 pips further before hitting resistance, which calls for a meaningful pullback at least towards 1.0000 before resuming higher again. A break below 1.0280 will confirm that a pullback is underway. The recent larger-degree upswing is seen between 0.9740 and 1.0480 now. Prices could drop towards the 1.0000 mark, which is close to the Fibonacci 0.618 retracement of the above upswing. A bullish turn there will resume the rally towards the 1.0600 mark before giving in to the bears again. On the flip side, a break below 0.9740 would trigger a further selloff. Trading idea: Acpotential drop against 1.0550 Good luck!   Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301166
The Euro Will Probably Continue Its Upward Movement In The Near Future

The EUR/USD Pair Are Looking For Much Higher Levels

InstaForex Analysis InstaForex Analysis 16.11.2022 08:35
EUR/USD rallied nicely to resistance at 1.0480 and was rejected for a corrective set-back towards 1.0208 and possibly even closer to 1.0090 before the next swing higher through resistance at 1.0480 for a rally towards 1.0777 and likely even closer to 1.0944. In the longer term, we are looking for much higher levels as wave 3 really starts to act like a third-wave impulsive rally as it is, but as always let's take it in baby steps as wave 3 progresses higher.   Relevance up to 06:00 2022-11-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301168
The Euro May Gradually Climb To The Target Level

The EUR/USD Pair Managed To Resume Its Upward Movement Without Any Reason

InstaForex Analysis InstaForex Analysis 16.11.2022 08:41
Analysis of EUR/USD, 5-minute chart Yesterday, the euro/dollar pair managed to resume its upward movement without any reason, but in the afternoon it lost almost everything gained by "overwork". It is still too early to talk about the strong correction we are waiting for. "Early" - in the sense that yesterday's fall in comparison with the previous growth is too small. However, we remind you that all of the euro's recent growth is practically not supported by anything. Yes, there were important statements by members of the Federal Reserve, there was an important report on US inflation, which could have provoked a fall in the dollar. But not as strong. Yesterday, for example, traders did not pay any attention to the EU GDP report. Although we already said that there might not be a reaction, not only did the market not react, it continued to work "according to its own rules". The ascending trendline continues to signal an upward trend, most of the indicators are also pointing up. In regards to trading signals, the situation on the 5-minute timeframe was close to ideal. At the beginning of the European trading session, the level of 1.0340 was overcome, so traders should have opened long positions immediately. This was followed by surpassing 1.0366 and growth almost to the level of 1.0485. The "error" of working out this level was only 4 points, but after the growth by 130 points at least it was possible to close the position without waiting for the target to be worked out pointwise. A sell signal near the level of 1.0485 could be worked out, but it could not be, if the "error" was embarrassing. In the first case, it was possible to earn another 70 points. In any case, the day turned out to be very profitable. COT report In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000). Analysis of EUR/USD, 1-hour chart You can see that the pair continues to rise on the one-hour chart, has overcome the Ichimoku cloud on the 24-hour timeframe, as well as all the Ichimoku lines on the 4-hour timeframe. Last week, the reason for the growth was, of course, the US inflation report. However, it is rather difficult to say why the steady and strong growth is still present this week. On Wednesday, the pair may trade at the following levels: 1.0072, 1.0119, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as the Senkou Span B (0.9912) and Kijun-sen (1.0210). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. European Central bank President Christine Lagarde will make a speech in the European Union, which can be very interesting, since traders will be waiting for comments on monetary policy from her. On the other hand, there are only minor reports on retail sales and industrial production in the US. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 06:00 2022-11-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327232
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The GBP/USD Pair May Begin A Long-Awaited Correction

InstaForex Analysis InstaForex Analysis 16.11.2022 08:44
Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair also continued its upward movement on Tuesday for no reason. Reports of medium importance on unemployment and wages were published in the UK in the morning but neither their values nor their status could in any way provoke a movement of 300 points up. The British pound also managed to fall by 150-170 points in the afternoon. So the volatility just went through the roof yesterday. The upward trend for the pair continues, which is clearly signaled by the trend line and the Ichimoku indicator lines. We would say that the pound has excellent chances for a long-term uptrend, but we consider its current strengthening too fast and too strong. So far, there are no reasons to sell the pair, but we are very afraid because of the groundlessness of the current movement. If the pound grew gradually, everything would be more logical and understandable. Trading signals on the 5-minute chart were perfect yesterday in terms of accuracy and strength. The first was formed literally at the opening of the European trading session near the level of 1.1760. After that, the price rose to 1.1874 and initially rebounded from it. Therefore, traders were forced to close a long position and open shorts. Profit amounted to about 70 points. The signal to sell turned out to be false and closed at a loss of 32 points. However, right there, near the level of 1.1874, a new buy signal was formed, after which the price went to the levels of 1.1974 and 1.2007, from which it rebounded. On this signal, it was necessary to close longs again and open shorts. Profit - another 70 points. The short managed to earn another 70 pips as the price dropped back to 1.1874. Thus, traders managed to earn almost 200 points of profit yesterday. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group closed 8,500 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position indicator has been slowly rising in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 79,000 shorts and 34,000 longs. The difference, as we can see, is still very big. The euro cannot rise even though major players are bullish, and the pound will suddenly be able to grow in a bearish mood? As for the total number of open longs and shorts, here the bulls have an advantage of 21,000. But, as we can see, this indicator also does not help the pound too much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair may begin a long-awaited correction on the one-hour chart. We consider the pound's growth in recent weeks somewhat unfounded. This week we are waiting for another report on British inflation, but it is unlikely to drastically affect the mood of traders. On Wednesday, the pair may trade at the following levels: 1.1645, 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259. Senkou Span B (1.1383) and Kijun-sen (1.1679) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. The "report of the week" - inflation for October - is scheduled for Wednesday in the UK. It is expected to rise again, which could theoretically support the pound. But it has already risen in price very much in recent weeks, so we do not count on new growth. In America - There are only minor reports in America, which are unlikely to seriously interest the market. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 06:00 2022-11-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327234
The Melbourne Institute Inflation Gauge For Australia Rose More Than Expected

The RBA Downgraded Its Outlook For The Property Market | Walmart Is Increasing Its FY Outlook

Saxo Bank Saxo Bank 16.11.2022 08:53
Summary:  Nasdaq 100 and S&P 500 ended higher, being lifted by softer-than-expected producer inflation. Walmart and Home Depot beat in earnings and topline. Chinese stocks surged on additional financial support to the property sector and a conciliatory tone from the Biden-Xi meeting. Hang Seng Index rose 4% to 18,343, more than 25% higher from its October low. What’s happening in markets? The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) gained on softer-than-expected US PPI Investors got a lift from the softer-than-expected PPI data which added to the post-CPI optimism that the US inflation may have peaked. S&P 500 gained 0.9% and NASDAQ 100 rose 1.5%. Stocks pared gains in the afternoon when the news of Russian missiles landing in Poland, a NATO member, hit the wires. Stocks nonetheless managed to recover from the missile news and finished the session higher.  Nine out of 11 S&P 500 sectors gained, with communication services, consumer discretionary, information technology and real estate led. On earnings, retail bellwether Walmart (WMT:xnys) surged 6.7% after reporting earnings and revenue beats and raising full-year outlook guidance. Home Depot (HD:xnys) gained 1.7% on earnings beating estimates and reaffirming full-year guidance. US  treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rallied on PPI prints, with the 10-year yield falling 8bps to 3.77% US treasuries rallied, with yields falling 5-9 basis points across the curve. The 10-year yield fell 8bps to 3.77%. The market surged in price after the growth in PPI, both in headlines and core measures, slowed more than expected. A stronger Empire State manufacturing index, returning to the expansionary territory and Fedspeak from Bostic, Barr, and Harker reiterating the slower pace but still additional work to do message, did not tame market sentiment. Adding to the fuel was some safe-haven buying of treasuries after Russian missiles hit Poland and killed two people. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) on fire as risk-on sentiment returned Hong Kong and China’s equity markets surged for the third day in a row, with Hang Seng Index soaring 4.1 % and CSI 300 climbing 1.9%, as optimism returned to the markets due to favourable policy shifts in China regarding pandemic control and property developers’ access to funding and goodwill gestures shown by China’s President Xi and the US’ President Biden at their first face-to-face meeting after President Biden took office. In addition, the Chinese authorities announced that they will allow developers, after meeting some requirements in their financials and supports from their banks, to tap into some of the presale deposits now placed in escrow accounts. China Internet stocks and semi-conductor names were among the top gainers. Commodities lift; Crude oil (CLZ2 & LCOF3) rose more than 1% after Russian rockets hit, iron ore (SCOA,SCOZ2) extended its gain and wheat whipped up 1% Crude oil (CLZ2 & LCOF3) rose more than 1% after the EIA published a report saying inventories in developed nations sunk to an 18-year low of less than 4 billion barrels. The EIA says a potential EU ban on Russian supply will add further pressure, and its output may drop below 10 million b/d next year, from about 10.7 million so far this year. For the next technical indicators and levels to watch in oil, click here. Moving to metals, the Iron ore (SCOA) price rose 1.7%, continuing its rebound and has now risen 25% this month on the back of fresh China stimulus, however the iron ore price is still down 13% from its high. The question is, if China continues to ease restrictions, will the iron ore price continue its rebound, and support affiliated iron ore equities. Meanwhile in crop markets, wheat trades higher on concerns there could be a potential escalation of the war. What to consider Fed collects more evidence inflation is easing; US producer prices cool more than expected, clocking smallest gain in a year Investors got another piece of evidence the inflationary pressures are easing, with US producer price growth rising 8% Y/Y in October (below the 8.3% Bloomberg consensus expected and down from the 8.5% Y/Y in September), with prices rising 0.2% M/M (which was less than the 0.4% expected). Excluding volatile food, energy, and trade services, the core PPI grew 6.7% Y/Y in October- while the market expected the growth remains unchanged from the September level of 7.2%. After peaking in March at 11.7%, producer price growth has moderated from improving supply chains, softer demand, and weakening commodities prices. This means, following the softer-than-expected CPI print last week, the Fed has garnered more catalysts to slow its pace of hikes, which also provides further support to the equity market and bond market rallies. However, the next important data sets the Fed will be watching are due early next month; US jobs, and November CPI, which are ahead of the Fed’s next meeting (in the third week of December). RBA meeting minutes signal food and energy prices to rise, and property prices to fall Australia’s central bank sees food price inflation rising, along with energy prices, while the Unemployment rate is expected to rise as well off its lows. The RBA downgraded its outlook for the property market, expecting property prices to continue to fall, as they have in history when the RBA is in a rising cycle. It also sees housing loan commitments further falling. Yet the RBA affirmed it will keep rising rates till inflation is within its targets as the central bank wants underlying inflation to be within 2-3%. The RBA also hinted it may be close to its target, "in underlying terms, inflation was a little over 6% with most components of the CPI rising at annualized rates of more than 3%”. What are the investor takeaways from the RBA minutes? It could be worth looking for potential opportunities in investing in Food stocks, food ETFs, and the as well as wheat and corn. Secondly, it could be worth looking for potential opportunities in energy, like crude oil, or oil stocks such as Woodside Energy and Occidental Petroleum to name a few. And with property prices falling, along with lending, keep an eye on bank shares. Consider looking at CommBank (CBA) as a proxy. Will CBA continue to rally off its low on the back of the RBA's dovish stance, or will CBA and big banks take a haircut as banks’ profits are shrinking? Walmart and Home Depot earnings beat estimates Peter Garnry, Head of Equity Strategy wrote in his notes that Walmart showed a positive surprise on its operating margin and an upward revision to the FY results and Home Depot is delivering a decent Q3 result,= as well.  Walmart, the largest US retailer reported FY23 Q3 (ending 31 October) revenue of $152.8bn up 9% y/y beating estimates and adj. EPS of $1.50 vs est. $1.32 while announcing a $20bn buyback programme. The third quarter result is so strong that Walmart is increasing its FY outlook on adj. EPS to -6% to -7% y/y from previously -9% to -11%. The 12-month trailing revenue figure eclipsed $600bn for the first time in its history. As we have seen throughout this Q3 earnings season, retailers and consumer industries have been able to either preserve or expand operating margins. Walmart is valued at a 12-month forward EV/EBITDA of 11.6x compared to 12x for the S&P 500 Index.  The largest US home improvement retailer Home Depot reports FY23 Q3 (ending 31 October) revenue of $38.9bn vs est. $37.9bn up 6% y/y and EPS of $4.24 vs est. $4.13 as the US consumer remains in good shape despite inflation and higher cost of living. Home Depot is confirming its fiscal year guidance. Tencent (00700) is scheduled to report earnings on Wednesday Tencent is scheduled to report Q3 results today. Bloomberg survey shows the street is expecting revenues to edge down around 1% Y/Y with both advertisements and gaming down Y/Y. On adjusted EPS, the consensus is calling for an 8% year-on-year decline. For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-16-nov-2022-16112022
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

John Hardy: The Forex Market Is Tremendously Important For The Global Financial System

Saxo Bank Saxo Bank 16.11.2022 08:56
Summary:  Throughout this year - and mainly since summer, strong movements within the Japanese Yen, the British Pound and the US Dollar have been very much in focus. Such movements have major implications for macroeconomics and politics, global businesses and professional traders, but do they matter to your portfolio? We have asked our Head of FX Strategy, John J. Hardy just that. You may have noticed that currencies such as the US Dollar, the Japanese Yen and the British Pound have been a big part of the news cycle in 2022. But many don’t trade currencies – otherwise referred to as forex, leaving the question whether such movements matter for private investors? To investigate that, we have spoken to our Head of FX Strategy, John Hardy. “Virtually all major currencies have seen major swings over the last year and more, showing that you need to stay vigilant on the impact of forex moves on your investments,” he says. “Depending on your portfolio construction, the volatility on the currency markets may have a smaller or larger impact on your returns. If you for instance invest in a service company in your home country that only operates there and has no import costs of note, you may not have to consider the currency angle at all. But if you invest in multi-national companies, you’ll need to pay attention to currency risks as a factor and consider hedging. At the extreme, if you invest in a company or bond from an emerging market country, you can actually end in a situation where your investment’s performance is affected equally or more by the country’s volatile currency than The extent of these moves, comes down to how your portfolio is set up, according to Hardy:the underlying performance of that instrument in local currency terms,” he says. It depends… he says.“It’s important to understand how forex impacts a company’s profits. Right now, the major driver of forex volatility has been the aggravated rise in the US Dollar as the US Federal Reserve tightening policy viciously to get ahead of inflation. This means that US companies with high levels of international sales take a hit from those revenues translated into US dollars, while non-US companies with significant sales in the US enjoy a profit tailwind and competitive advantage.”The impact of forex movements depends on both the currency market and also on the companies you are investing in: Hardy says. “It is most critical to consider how the stocks and bonds in your portfolio might be affected by extreme forex movements, like this current strong USD movement, impact the fortune of the companies you invest in,” In a situation where forex movements get extreme they tend to have a greater impact on financial instruments and the economy in general, rendering the notion of being aware of how currencies impact your portfolio even greater. What to do, then. Hardy says.“Uncovering forex risk should be part of your company research before you decide to buy a stock. You should look at where the country is based, whether it gets it’s profits from a market with local currency or another currency and is there anything you should be aware of based on that. You should also consider the company’s value chain: Is it e.g. exposed to paying producers in other currencies and is that something to be aware of?,” To ensure that you are aware of how such affects will hit your portfolio, you need to put in the work: he says. “In forex markets, there’s always a winner and a loser. One currency becomes stronger when another weakens. If you want to protect your portfolio from this, you can use a variety of derivates like options to do what is called a hedge. This essentially means that you try to remove some unwanted risk from your portfolio. But be aware, this is a complex process, so before you engage in hedging, make sure you understand the concept fully,” If some unwanted forex risk arises in your portfolio, Hardy explains that there are ways to go about it: The largest When global uncertainty rages, investors may feel like the entire notion of forex is an inconvenient truth. But on a larger scale, the currency market would be hard to live without. “The forex market is tremendously important for the global financial system. Exchange rates are essential for cross-border interactions, and a very important consideration, both strategically for sovereign powers and for businesses that source and sell goods in currency regions other than their own.” Hardy says. At the same time, the forex market is the largest of all financial markets in terms of volumes, and it is also the only one that is open 24/5. Money do, in fact, make the world go around – but are you aware of how it impacts your portfolio? If you want to read more about how to trade forex and what kind of products are available, check out our theme “Around the world in 7 pairs”. If you want to stay updated on the markets and how they develop, find Hardy’s FX updates here. If you want to learn more about hedging and how it works, click here.     Source: https://www.home.saxo/content/articles/thought-starters/does-frantic-forex-threaten-your-portfolio-16112022
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The USD/CAD Pair's Moves May Have Challenges

TeleTrade Comments TeleTrade Comments 16.11.2022 09:10
USDCAD fades bounce off 100-DMA, mildly offered of late. Improvement in market sentiment pushes back US Dollar buyers. Fears of softer demand weigh on oil prices ahead of EIA inventories. Risk catalysts should also be watched closely amid the recent swings in risk appetite. USDCAD struggles to defend buyers around 1.3270-80 heading into Wednesday’s European session, despite bouncing off the previous day. In doing so, the Loonie pair portrays the trader’s anxiety ahead of the key data from the US and Canada. Also likely to have challenged the USDCAD moves are the latest moves in the sentiment. Late on Tuesday, the news that two Russian-made rockets were fired at Poland and killed two people triggered the risk-off mood. The same triggered emergency meetings of the North Atlantic Treaty Organization (NATO) and the Group of Seven (G7), which in turn favored the US Dollar (USD) due to its safe-haven appeal. However, the latest news shared by the Associated Press (AP) quoted an anonymous US official’s findings while mentioning that the missile may have been fired by Ukraine. As a result, the risk aversion ebbed and the greenback reversed the early-day gains. Elsewhere, market forecasts of upbeat US data and the Bank of Canada’s (BOC) bearish bias seem to keep the USDCAD buyers hopeful. On Tuesday, US Producer Price Index (PPI) for October eased to 8.0% YoY versus market forecasts of 8.3% and the downwardly revised prior of 8.4%. It’s worth noting that the monthly figure reprinted the 0.2% prior (revised from 0.4%) while easing below 0.5% expectations. Moreover, the Federal Reserve Bank of New York's Empire State Manufacturing Index jumped to 4.5 in November from -9.1 in October and the market expectation of -5. It should be noted that the US Retail Sales for October is expected to post 1.0% growth versus 0.0% prior. On a different page, Bank of Canada (BOC) Governor Tiff Macklem raised concerns over the effect of the rapid increases in interest rates on Monday, which in turn suggests easy rate hikes moving forward. In late October, the BOC surprised markets by announcing 0.50% rate hike versus 0.75% expected. Talking about the oil prices, the WTI crude oil drops 0.60% intraday to $85.65 by the press time amid fears of lower demand, raised by the OPEC earlier in the week. In doing so, the black gold fails to justify the latest weakness in the US Dollar, as well as the decline in the API Weekly Crude Oil Stock to 5.835M for the week ended on November 11 versus 5.618M prior. Moving on, Canada’s Consumer Price Index (CPI) and the US Retail Sales will be crucial to watch for the USDCAD traders and can provide a corrective bounce from the key DMA support in case of matching market forecasts. Also important to watch is the weekly print of the EIA Crude Oil Stocks Change. Technical analysis USDCAD leans bearish between a one-week-old resistance line and the 100-DMA, respectively around 1.3370 and 1.3240.
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

Geopolitical Events Can Affect The NZD/USD Tranding Situation

TeleTrade Comments TeleTrade Comments 16.11.2022 09:26
NZDUSD regains positive traction amid the emergence of fresh selling around the USD. A recovery in the equity markets weighs on the buck and benefits the risk-sensitive Kiwi. Geopolitical risks and China’s COVID-19 woes might cap any further gains for the major. The NZDUSD pair attracts fresh buying near the 0.6115 area on Wednesday and steadily climbs to a fresh daily high during the early European session. The pair is currently trading just above the mid-0.6100s, though remains well below its highest level since August 26 touched the previous day. The US Dollar struggles to capitalize on the overnight late rebound from a three-month low and comes under renewed selling pressure, which, in turn, offers some support to the NZDUSD pair. The initial findings, as reported by Associated Press (AP) citing unidentified US officials, suggest that the missile that hit Poland on Tuesday may have been fired by Ukraine at an incoming Russian missile. The headlines infuse some stability in the financial markets, which, in turn, undermines the safe-haven buck and benefits the risk-sensitive Kiwi. Apart from this, firming expectations for a less aggressive policy tightening by the Federal Reserve is seen as another factor weighing on the buck. In fact, the markets are now pricing in over a 90% chance of a 50 bps rate hike at the next FOMC policy meeting in December. The bets were reaffirmed by the softer-than-expected US Producer Price Index on Tuesday, which, along with a surprise drop in the US consumer inflation figures last week, point to easing price pressures. That said, a modest uptick in the US Treasury bond yields could limit the USD losses. Furthermore, recession fears - amid worries about headwinds stemming from the protracted Russia-Ukraine war and economically-disruptive COVID-19 lockdowns in China, might cap the optimism. This, in turn, warrants some caution before placing aggressive bullish bets around the NZDUSD pair and positioning for any further gains. Traders now look forward to the US monthly Retail Sales data for a fresh impetus later during the early North American session. Adding to this, geopolitical developments might produce short-term trading opportunities around the NZDUSD pair.
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

Analysis Of The USD/JPY Pair's Situation By UOB Group

TeleTrade Comments TeleTrade Comments 16.11.2022 09:36
Extra decline in USDJPY cannot be ruled out for the time being, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group. Key Quotes 24-hour view: “USD traded in a volatile manner as it swung wildly between 137.37 and 140.62 before settling at 139.29 (-0.42%). The choppy price actions have resulted in a mixed outlook and USD could continue to trade in a volatile manner, expected to be between 138.35 and 140.35.” Next 1-3 weeks: “Our latest narrative was from Monday (14 Nov, spot at 139.05) where we expected further USD weakness albeit at a slower pace. We indicated that the 138.00 level is expected to offer solid support. However, USD dropped briefly below 138.00 yesterday (low of 137.67) before rebounding strongly. Further weakness is not ruled out, but the solid support at 137.60 may not come into view so soon, if at all. On the upside a break of 140.80 (‘strong resistance’ level was at 141.00 yesterday) would indicate that USD is unlikely to weaken further.”  
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

Aggressive Bearish Bets Around The GBP/JPY Cross Can Arrive

TeleTrade Comments TeleTrade Comments 16.11.2022 09:42
GBPJPY trims a part of its intraday gains despite stronger UK consumer inflation data. A modest recovery in the risk sentiment undermines the JPY and offers some support. Investors now look to the BoE’s Monetary Policy Report Hearings for a fresh impetus. The GBPJPY cross gains some positive traction for the third successive day on Wednesday and maintains its bid tone through the early European session. The cross, however, retreats a few pips from a multi-day high and slides back below the 166.00 mark following the release of UK inflation figures. The UK Office for National Statistics reported that the headline Consumer Price Index (CPI) accelerated to 11.1% YoY in October from 10.1% recorded in the previous month. Additional details revealed that the core inflation, which excludes volatile food and energy items, rose 6.5% YoY during the reported month. The readings were higher than market estimates and adds to pressure on the Bank of England to continue raising borrowing costs. The data, however, fails to provide any meaningful impetus to the British Pound amid worries about a deeper economic downturn. Traders also seem reluctant ahead of the BoE's Monetary Policy Report Hearings later this Wednesday. This, in turn, prompts bullish traders to lighten their bets around the GBPJPY cross. In the meantime, a recovery in the risk sentiment undermines the safe-haven Japanese Yen and could offer some support to spot prices. The initial findings, as reported by Associated Press (AP) citing unidentified US officials, suggest that the missile that hit Poland on Tuesday may have been fired by Ukraine at an incoming Russian missile. The headlines infuse some stability in the financial markets, which, in turn, dents demand for traditional safe-haven assets, including the JPY. This, in turn, warrants some caution before placing aggressive bearish bets around the GBPJPY cross.  
The Challenge to the Dollar: De-dollarisation and Geopolitical Shifts

Investors Can Start Beliving That The Fed Would Consider A Decrease Of Interest Rate Hikes

InstaForex Analysis InstaForex Analysis 16.11.2022 09:57
Positive sentiment surged on Tuesday, thanks to the latest data in the US, which confirmed the overall inflation dynamics in October both in monthly and yearly terms. According to the report, producer prices rose 0.2% m/m and 8.0% y/y, while the previous value was revised down to 8.4%. This allowed investors to believe again that the Fed would start considering the gradual decrease of interest rate hikes, if not stop it completely. But even though equity markets in both Europe and the US benefited from the news, the reaction in the forex market was rather weak. The reason could be the stabilization of Treasury yields before the release of data on US retail sales. Forecasts say the core retail sales index will show a 0.5% increase in October, while retail sales will rise by 0.9%. If the figures turn out to be no worse than the forecast or exceed it, another growth in stocks will be seen. In this case, Treasury yields may resume their decline, which should also put pressure on dollar. That will push the ICE dollar index down below 106 points, towards 105 points. Forecasts for today: EUR/USD The pair is trading near the strong resistance level of 1.0375. Positive data from the UScould push it towards 1.0500. GBP/USD The pair is below the level of 1.1900. If data from the US does not disappoint or turns out to be higher than expected, pound will resume growth to 1.2000, and then to 1.2020.   Relevance up to 08:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327256
Saxo Bank Podcast: The Risk Of An Escalation In The US-China Confrontation, The Risk Of An Escalation In The US-China Confrontation And More

Russian Missiles Fell To Poland | China Home Prices Fall

Swissquote Bank Swissquote Bank 16.11.2022 10:36
US stocks extended rally yesterday, as the unexpected easing in producer prices beefed up the optimism that the Federal Reserve (Fed) would soften the monetary tightening and the better-than-expected New York Empire State Manufacturing index hinted that the US economy is holding up well. The geopolitical fears News that Russian missiles fell to Poland somehow killed a part of that falling-inflation, resilient growth optimism. But escalation of the tensions has been avoided so far, with US President Joe Biden saying that the missile was ‘unlikely’ fired from Russia. On the index level, the geopolitical fears remained short-lived, and the S&P500 finally rebounded to close the session a touch below the 4000 psychological mark. Crude Oil On the individual level, TSM jumped on Warren Buffet and Apple news, as Walmart gained on earnings, revenue beat and $20-billion buyback. In energy, US crude gained on the geopolitical concerns after the Poland attack, and on a more-than-5-million-barrel decline in US oil inventories last week. In the FX, the US dollar eased after the mixture of soft PPI and solid Empire Manufacturing revived the dovish Fed expectations. The EURUSD traded briefly above its 200-DMA, and Cable hit the 1.20 for the first time since this summer. UK  On the data front, UK inflation data showed that inflation in the UK hit 11.1% in October vs 10.7% penciled in by analysts, revived the hawkish Bank of England (BoE) expectations but not GBP-appetite. Watch the full episode to find out more! 0:00 Intro 0:24 US stocks extend rally on encouraging data 2:17 Poland hit by missiles, but Biden contains escalation 3:37 Market update 4:13 TSM, Walmart gain 5:51 Latest on US midterms 6:28 Oil recovers 6:50 FX: USD down, UK CPI exceeds 11.1%! 8:49 China home prices fall 9:21 What else you can watch today? Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Poland #attack #crude #oil #Fed #US #inflation #Walmart #earnings #TSM #Apple #USD #EUR #GBP #UK #Bbudget #China #property #rally #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
China: PMI positively surprises the market

The USD/CNH Pair Could Still Slip Back In The Next Few Weeks

TeleTrade Comments TeleTrade Comments 16.11.2022 10:39
In the view of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, USDCNH could still slip back to the 7.0130 region in the next few weeks. Key Quotes 24-hour view: “We expected USD to ‘trade within a range of 7.0260/7.0800’ yesterday. However, USD traded within a narrower range than expected (7.0225/7.0609). The underlying tone has firmed somewhat and USD is likely to trade with an upward bias. That said, any advance is not expected to break 7.0850. On the downside, a breach of 7.0400 would indicate that the mild upward bias has eased.” Next 1-3 weeks: “Our update from yesterday (15 Nov, spot at 7.0465) still stands. As highlighted, there is room for USD to drop further to 7.0130 but oversold short-term conditions could lead to consolidation first. Overall, only a break of 7.1200 (no change in ‘strong resistance’ level from yesterday) would indicate that USD is not weakening further.”  
The Bank Of England Will Be Under Pressure To Continue Hiking Aggressively

The Bank Of England Will Be Under Pressure To Continue Hiking Aggressively

Kenny Fisher Kenny Fisher 16.11.2022 12:28
The British pound has moved higher on Wednesday. In the European session, GBP/USD is trading at 1.1934, up 0.56%. The pound roared on Tuesday, gaining close to 1% and punching past the 1.20 line for the first time in three months. It has been a busy time for sterling, which has been marked by sharp swings that would make an exotic currency blush. The pound’s volatility has been especially pronounced in the month of November. The US dollar has hit a rocky patch and the pound has taken full advantage, climbing 3.5% this month. It’s up, up, up for UK inflation UK inflation continues to rise and hit a staggering 11.1% in October, a 41-year high. The upward trend continued despite the government introducing an energy price guarantee. Inflation jumped from 10.1% in September and ahead of the consensus of 10.7%. Core CPI remained unchanged at 6.5%, but was higher than the forecast of 6.4%. The Bank of England hasn’t been able to stem rising inflation despite tightening policy but will be hoping that its jumbo 0.75% hike earlier in November will take a bite out of the next inflation report. The UK economy is facing a double-whammy of high inflation and a recession, and all eyes will be on Finance Minister Jeremy Hunt, who will announce the government budget on Thursday. Hunt will aim to restore the government’s credibility and stability, after the recent political soap opera which resulted in three different prime ministers in a matter of months and significant financial instability. The UK employment report on Tuesday was lukewarm, with unemployment ticking higher to 3.5%, up from 3.4%. The Bank of England will be concerned about the increase in wage growth, which will create even more inflation. Wages excluding bonuses rose to 5.7%, up from 5.5% and ahead of the consensus of 5.6%. The BoE will be under pressure to continue hiking aggressively, even though this will hurt the struggling UK economy.   GBP/USD Technical GBP/USD has pushed above resistance at 1.1878. The next resistance is 1.2030 1.1767 and 1.1660  are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

Saxo Bank Podcast: Tightness In The Commodity Markets, Apple Plans To Purchase US-Made Chips And Much More

Saxo Bank Saxo Bank 16.11.2022 12:37
Summary:  Today we discuss US markets exploding higher yesterday after a soft PPI release, only to have an apparently Russian missile hitting Poland on the Ukrainian border roiling sentiment. The USD behavior yesterday was inverse to the swings in equities, pointing to more correlation with risk sentiment swings than US yields as we look ahead at today's US Retail Sales data. Crude oil, tightness in the commodity markets, the huge announcement from Apple on plans to purchase US-made chips and much more on today's pod, which features Peter Garnry on equities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-nov-16-2022-16112022
The RBA Will Continue At A 25bp Pace At Coming Meetings

The RBA Will Continue At A 25bp Pace At Coming Meetings

ING Economics ING Economics 16.11.2022 12:53
There was a time when a 3%+ wage inflation rate might have mattered for the Reserve Bank's rate-setting decisions. Right now, data does not appear to be a very important input for their decision-making process  3.1% 3Q22 YoY% Wage price index  Higher Its all about where you are, not what's happening At 3.1% in 3Q22, the latest wage price index result is finally consistent with what the Reserve Bank of Australia once thought was a necessary condition for achieving their 2-3% CPI inflation target. With CPI inflation actually at 7.3%YoY currently, this particular metric ceased to have much relevance a long time ago.  Even so, 3.1% wage growth is a long way below 7.3% price inflation, indicating that in real terms, wage growth remains strongly negative. Even if the RBA were paying much attention to the run of data in its rate-setting deliberations, this latest wage data print is still innocuous.  Annual wage and price growth Source: CEIC, ING Steady as she goes At 2.85%, the current cash rate target is probably just slightly in a neutral to restrictive policy setting. Here, any further increases in rates are likely to weigh on growth a little bit more than previously. And this, rather than the run of data, seems to be what is driving Reserve Bank (RBA) policy setting. The RBA expressed concern in their latest statement about overdoing the tightening, and for this reason alone, they seem to be content to slow the pace of monetary adjustment right down to help them finesse the end game in this tightening cycle.  Consequently, even with the last inflation and now wages data surprising on the upside, we don't believe they will shift back to their previous 50bp pace of tightening and will continue at a 25bp pace at coming meetings, with the peak for cash rates likely to come in 1Q23 as the cash rate hits 3.6%.  The RBA will also be keeping a weather eye on the AUD. The recent spell of weakness has been abruptly shattered as thoughts of a US Fed pivot have gained ground, and the Reserve Bank will be keen not to encourage the AUD to rise much faster due to their actions.    TagsRBA rate policy Australian wages Australian inflation AUD Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

FX Market: Range Of 2023 The EUR/USD Pair Outcomes

ING Economics ING Economics 16.11.2022 13:57
The dollar is tumbling from multi-decade highs. Calling the FX market in 2023 requires taking a view on the Federal Reserve, the war in Ukraine, China, and the overall investment environment. We suspect that the dollar can stay stronger for a little longer. But the main message in our 2023 FX Outlook is to expect fewer FX trends and more volatility Source: Shutterstock The dollar's highwire act Having risen around 25% since the summer of 2021, the dollar has recently taken quite the tumble. For 2023, the question is whether this is the start of a new bear trend or whether the factors that drove the dollar to those highs still have a say.  Given that the most liquid FX pair, EUR/USD, was such a large driver of global FX trends in 2022, we use a scenario approach to look at a range of 2023 EUR/USD outcomes – derived from the expected volatility priced into the FX options market. The range of scenarios and end-year FX levels extend from ‘Permacrisis’, where EUR/USD could be trading at 0.80, to ‘Safe and Sound’, where EUR/USD could be closer to 1.20. Key inputs to that scenario approach are factors like: i) how aggressive the Fed will be, ii) Ukraine, Europe, and energy, iii) China, and iv) the overall risk environment. Given ING’s house view of the Fed taking rates to 5.00% in early 2023, four quarters of recession in Germany amid higher energy prices, relatively weak Chinese growth, and a still difficult equity environment, our baseline view favours softer EUR/USD levels. 2023 will see fewer FX trends and more volatility But perhaps the strongest message to get across in our outlook is that FX markets in 2023 will see fewer trends and more volatility. We say this because conditions do not look to be in place for a clean dollar trend – no ‘risk-on’ dollar decline nor ‘risk-off’ dollar rally. And central banks tightening liquidity conditions through higher policy rates and shrinking balance sheets will only exacerbate the liquidity problems already present in financial markets. Volatility will stay high. Softening global activity and trade volume growth at less than 2% will likely limit the gains of pro-cyclical currencies in 2023. EUR/USD could be ending the year near 1.00. If the positive correlation between bonds and equity markets does break down next year, it will likely come through a bond market rally. Our forecast for US 10-year Treasury yields at 2.75% year-end will argue for USD/JPY to be trading at 130 or lower. EUR/USD will set the tone for European currencies in general. We favour the Swiss franc to outperform and sterling to underperform. Scandinavian currencies may continue to struggle with the high volatility environment. Further east, we see scope for the Hungarian forint to be re-assessed positively, while the overvalued Czech koruna and Romania leu look more vulnerable as FX intervention slows. In the commodity bloc, the uncertain outcome for China continues to place a question mark on the Australian and New Zealand dollars. We again prefer the Canadian dollar – although how the housing market correction plays out will be a risk. USD/CNY itself may struggle to sustain a move sub-7.00. And in a more mixed FX environment, expect local stories to win out – one of which may be Korean debt being included in world government bond benchmarks – helping the won. EUR/USD: Four scenarios for 2023 Source: ING, Refinitiv Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Gold Market Sentiment and Analyst Forecasts: Bond Yields and China's Impact

The Bulls Are Making Their Second Attack On The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 16.11.2022 14:30
The three pillars of the upward trend in the USD index were American exceptionalism, an aggressive increase in the federal funds rate, and high demand for the dollar as a safe-haven currency. The US economy looked more resilient than others. The Fed ran ahead of the rest of the central banks like the leader of the pack on the road of tightening monetary policy, and numerous shocks in the global economy and politics forced investors to hide in safe-haven assets. In November, everything turned upside down. So, should we be surprised at the EURUSD trend reversal? When the Fed began the process of monetary restriction in March, the ceiling of the federal funds rate was estimated by the futures market at 2.8%. The FOMC's September forecast raised it to 4.6%, and Jerome Powell's words that the peak will be even higher – up to 5%. Before the release of the US inflation data for October, rumors about 6% even circulated on the market, but the slowdown in consumer prices forced investors to lower the bar. As a result, the cost of borrowing may not reach 5%. At the same time, inflation in the eurozone has not yet reached its maximum, which forces the market to maintain high expectations for the ECB deposit rate. The difference between the supposed extreme rates in the US and the eurozone is shrinking, which plays into the hands of the EURUSD bulls. Dynamics of expected extreme rates of central banks The more aggressively the Fed and other central banks tightened monetary policy, the higher were the risks that the global economy would plunge into recession. Regulators were focused on beating inflation and were often willing to sacrifice economic growth. Over time, their position has changed. First, the Reserve Bank of Australia and the Bank of Canada slowed down the rate of monetary restriction, then the Fed and the Bank of England made hints about this. Even ECB hawk Robert Holzmann noted that the Governing Council should be mindful of too drastic actions that could drive the eurozone into stagflation or recession. Dynamics of Central Bank Rates As a result, the idea of a soft landing for the US economy has been revived, suggesting a growing chance that it will still avoid a recession. In such conditions, the demand for safe-haven assets decreases, and the USD index falls. Finally, warm weather in the euro area, an increase in the filling of gas reserves to 95% instead of the usual 80–85%, and a fall in prices for blue fuel gave rise to talk that the eurozone economy is not so bad compared to the United States. It is also able to avoid recession. If so, then American exceptionalism can be forgotten, which gives strength to fans of the euro. Technically, on the EURUSD daily chart, the bulls are making their second attack in the hope of breaking both to the psychologically important level of 1.05 and to the 161.8% target according to the AB=CD pattern. Note that it is located near 1.061. The strategies for buying the euro on pullbacks, voiced in the previous two materials, continue to work like clockwork. Why give them up?     Relevance up to 11:00 2022-11-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327286
Canada: A 25bp rate hike is highly expected. BoC terminal rate is expected to hit 4.5%

USD/CAD: Bank of Canada is expected to hike the interest rate by 50bp

Kenny Fisher Kenny Fisher 16.11.2022 17:29
The Canadian dollar has edged lower on Wednesday, trading at 1.3254, down 0.18%. Canadian dollar eyes inflation The Canadian dollar has performed well in the month of November, with gains of 2.7%. The unexpectedly soft inflation report out of the US ignited risk appetite, sending equities soaring and the US dollar sharply lower. USD/CAD is having a quiet day, but that could change in the North American session, with the release of Canada’s October inflation report. The markets are bracing for a spike in inflation, with an estimate of 0.7% MoM, compared to 0.1% in September. Inflation hit 6.9% in September, a slight drop from 7.0% in August. The markets are expecting another 6.9% gain for October, and an unexpected reading could trigger some volatility from USD/CAD. The Bank of Canada has tightened rates to 3.75%, which is a very aggressive rate-tightening cycle. The markets are expecting another 0.50% increase in December, and BOC Governor Macklem has borrowed the Fed script, saying that more rate hikes are needed in order to curb inflation. Like the Fed, Macklem has left open the possibility of reducing the pace of rate hikes in order to guide the economy to a soft landing and avoid a recession. A major concern for the BoC is that inflation expectations remain high, which risks triggering a wage-price spiral that would result in inflation climbing higher. A soft inflation report today would go a long way in assuaging the BoC’s concerns over inflation and inflation expectations. The Fed is doing its best to dampen speculation that it plans to pivot in its rate policy and that the rate-hike cycle is almost completed. Fed policy makers have sounded hawkish since the inflation report sent the markets into a tizzy, as any dovish signals could hurt the Fed’s battle with high inflation. The Fed’s message remains that the fight with inflation is not over and even though there could be an easing of the pace of hikes next month, the Fed expects a higher terminal rate than it did in September. USD/CAD Technical USD/CAD faces resistance at 1.3353 and 1.3471 There is support at 1.3218 and 1.3136 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar steady ahead of inflation - MarketPulseMarketPulse
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The NASDAQ Stock Exchange 2,616 Companies Fell In Price

InstaForex Analysis InstaForex Analysis 17.11.2022 08:02
At the close of the New York Stock Exchange, the Dow Jones was down 0.12%, the S&P 500 was down 0.83% and the NASDAQ Composite was down 1.54%. Dow Jones McDonald's Corporation was the leading gainer among the components of the Dow Jones index today, up 4.67 points or 1.74% to close at 272.51. UnitedHealth Group Incorporated rose 8.51 points or 1.69% to close at 511.52. Home Depot Inc rose 0.96% or 2.98 points to close at 314.91. The least gainers were Salesforce Inc, which shed 6.95 points or 4.29% to end the session at 155.12. Intel Corporation was up 3.84% or 1.18 points to close at 29.53, while Dow Inc was down 2.11% or 1.09 points to close at 50.51. . S&P 500  Leading gainers among the S&P 500 index components in today's trading were TJX Companies Inc, which rose 5.19% to hit 79.02, Campbell Soup Company, which gained 3.89% to close at 50.71, and also shares of W. R. Berkley Corp, which rose 3.83% to end the session at 71.76. The least gainers were Advance Auto Parts Inc, which shed 15.06% to close at 156.24. Shares of Carnival Corporation shed 13.71% to end the session at 9.63. Quotes of Target Corporation decreased in price by 13.14% to 155.47. NASDAQ The leading gainers among the components of the NASDAQ Composite in today's trading were Fast Radius Inc, which rose 106.29% to hit 0.21, Qurate Retail Inc Series B, which gained 45.90% to close at 10.41 , as well as shares of InMed Pharmaceuticals Inc, which rose 36.33% to close the session at 3.79. The least gainers were shares of Dlocal Ltd, which lost 50.71% to close at 10.46. Shares of Brainsway Ltd lost 31.56% and ended the session at 2.19. Quotes of Cuentas Inc decreased in price by 28.00% to 0.25. Numbers On the New York Stock Exchange, the number of securities that fell in price (2104) exceeded the number of those that closed in positive territory (1012), while quotes of 119 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,616 companies fell in price, 1,142 rose, and 236 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.75% to 11/24. Gold Gold Futures for December delivery added 0.04%, or 0.65, to $1.00 a troy ounce. In other commodities, WTI crude futures for December delivery fell 1.83%, or 1.59, to $85.33 a barrel. Futures for Brent crude for January delivery fell 1.29%, or 1.21, to $92.65 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.43% to 1.04, while USD/JPY advanced 0.15% to hit 139.49. Futures on the USD index fell 0.13% to 106.15.     Relevance up to 03:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/301333
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

The Price Of The USD/JPY Pair Will Most Likely Reach The Target Level

InstaForex Analysis InstaForex Analysis 17.11.2022 08:06
On Wednesday, the USD/JPY pair stayed in the range of the embedded price channel lines of 138.55-139.84, making an attempt to break above the resistance. This morning prices are trying to overcome 139.84 for the second time. Settling above the level opens the 141.76 target. Settling above 141.76 casts doubt on the price's ability to return to current levels. Settling under 138.55 will open the nearest target at 137.00. Let's look at the priorities on a smaller chart. The Marlin Oscillator has gone into the positive area on the four-hour chart - into the growth area, which gives an advantage to the rising scenario. The price will most likely reach the target level of 141.76, which the MACD line has already reached from above and strengthened. From the level, we are waiting for a price reversal to the downside. If the price settling in the 138.55-139.84 range is delayed, the Marlin Oscillator will return to the negative area, and then a decline may develop without an exit above 139.84 (or slightly higher, following yesterday's example).     Relevance up to 04:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327343
The GBP/USD Pair May Trade Horizontally Today

The Price Of Cable Market (GBP/USD) Could Rise

InstaForex Analysis InstaForex Analysis 17.11.2022 08:08
The British pound, like other counter-dollar currencies, rose a bit yesterday, but did not fight the nearest resistance, and this morning it shows signs of a reversal. The divergence of the price with the Marlin Oscillator does not change its shape for the second day. The pressure remains and it will likely lead the price to the first support at 1.1737 (high on September 13). Going under the level will open the 1.1500 target. The price could rise after settling above the level of 1.1933. On the H4 chart, the Marlin Oscillator decreases ahead of the divergence pressure. At the moment, it is already being introduced into the territory of a downward trend. The price is likely to connect a little later, with the release of data on inflation in the eurozone (11:00 London time). October CPI is forecast unchanged at 10.7% YoY. The first task is to overcome the support of 1.1737. Along it is the MACD indicator line (1.1670), which also needs to be overcome to advance to 1.1500.   Relevance up to 04:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327345
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The Reversal Of The Euro (EUR) Price's Technical Features Only Intensified

InstaForex Analysis InstaForex Analysis 17.11.2022 08:11
Despite the euro's attempt to rise yesterday (closing the day with a growth of 45 points), the reversal of the price's technical features only intensified. The Marlin Oscillator starts to accelerate downwards after the reversal on the daily chart. The price subtly senses the 1.0360 level, as a result, settling below it opens the 1.0205 target. But a decline to 1.0205 or below would still be corrective. To change the trend, the price should go under the MACD indicator line, which is now very deep for the price - in the range of 0.9864-0.9950. At the same time, the MACD line itself turned into growth, which will make it difficult and complicate the development of the expected reversal. Marlin has not yet consolidated in negative territory on the 4-hour chart, which retains the potential to create a divergence, that is, another attempt to overcome 1.0470. The MACD line is approaching the support of 1.0205 and will soon break above it. The level is strengthening, so its breakthrough will be the first possible signal for price to overcome the MACD line of the daily chart. We are waiting for any more stable signals and signs.   Relevance up to 04:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327347
The EUR/USD Price May Fall Under 1.0660

The Euro To US Dollar Pair (EUR/USD) Is Likely To Turn Lower

InstaForex Analysis InstaForex Analysis 17.11.2022 08:20
Technical outlook: EURUSD has eased off from its swing highs at 1.0480 registered early this week. The single currency pair has slipped over 120 pips after hitting an intraday low at 1.0354 on Thursday. It is seen to be trading close to 1.0380. at this point in writing as the bears prepare to test the 1.0280-1.0300 area before the bulls are back in control. EURUSD has taken out two resistances at 1.0200 and 1.0350 levels and hit the 1.0480 mark. Ideally, a meaningful pullback should be due towards the 1.0000 zone before finding support. We need to see a break below 1.0350 now to open the door for prices to drop through 1.0280 and further. On the flip side, a push above 1.0480 will confirm that 1.0550 is within reach. The recent upswing, which could be worked upon is between 0.9740 and 1.0480 levels respectively. Immediate price support is seen at 0.9740 on the daily chart. Only a break below that level will confirm that the trend has turned down and the bears are poised to drag the price below 0.9500. All in all, EURUSD is likely to turn lower either from here or after printing another high. Trading idea: Potential bearish reversal against 1.0550 Good luck!     Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301349
US Dollar Index May Confirm A Potential Bullish Trend Reversal

US Dollar Index May Confirm A Potential Bullish Trend Reversal

InstaForex Analysis InstaForex Analysis 17.11.2022 08:23
Technical outlook: The US dollar index has managed to push through 106.00 after carving an interim low around 104.95 early this week. The index is seen to be trading close to the 106.05 mark at this point in writing as the bulls prepare to come back in control soon. Please be aware that prices could drop first to 104.20 before reversing higher again. The US dollar index might have completed its corrective decline from 114.67 towards 104.95 or it is extremely close to terminating its correction. Please note that the Fibonacci 0.618 extensions have been met around 106.95 during a sell-off last week. Ideally, a corrective rally should be produced towards 110.60 before resuming lower again. Only a break above 112.67 will confirm a potential bullish trend reversal and will open the door to print fresh highs above 114.67. On the flip side, please keep a watch on the 104.95 interim support as a break there will drag prices towards the 104.00-20 zone before resuming higher again. To sum up, prices are about to produce a rally either from here or after printing a shallow low below 104.90. Trading idea: Potential rally against 103.50 Good luck!   Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301351
Analysis Of The EUR/JPY Pair Movement

Forecast Of The US Dollar To Japanese Yen (USD/JPY) Pair's Movement

InstaForex Analysis InstaForex Analysis 17.11.2022 08:26
The USD/JPY pair continues to move sideways in the short term. The price action signaled exhausted sellers so that the buyers could take the lead. Still, the currency pair could develop a new leg higher only if the Dollar Index develops a new leg higher. The pair was trading at 139.51 at the time of writing, which seems undecided. Fundamentally, the Japanese data came in worse than expected while the US reported mixed data. Today, the Japanese Trade Balance came in at -2.30T far below the -1.93T expected. Later, the US data could be decisive. Philly Fed Manufacturing Index could be reported at -6.0 points versus -8.7 points in the previous reporting period, Unemployment Claims could jump from 225K to 228K in the previous week, Building Permits may drop from 1.56M to 1.51M, while Housing Starts could be reported at 1.41M below 1.44M in the previous reporting period. Better-than-expected US data could lift the greenback, while worse-than-expected figures could weaken the USD. USD/JPY Range Pattern! As you can see on the H1 chart, the pair is still trapped between 138.45 and 140.79 levels. Escaping from this range could bring us new trading opportunities. The price failed to reach 140.79 resistance, so it could come back down to test and retest the 138.45 and the channel's downside line before developing a new bullish momentum. USD/JPY Forecast! False breakdowns through the immediate downside obstacles may announce a bullish momentum. This could represent a first buying opportunity. Also, a new higher high, a valid breakout through 140.79 could bring new longs. Relevance up to 07:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301353
The Price Of EUR/USD Pair Will Develop Sideways Movement

The Euro To US Dollar (EUR/USD) Pair Maintains A Bullish Bias

InstaForex Analysis InstaForex Analysis 17.11.2022 08:29
The EUR/USD pair changed little in the short term. It's trading at 1.0376 at the time of writing. The price moves sideways trying to attract more buyers and accumulate bullish energy before resuming its growth. Technically, the Dollar Index moved sideways after reaching a resistance zone. Unfortunately for the USD, the US data came in mixed. The Retail Sales, Core Retail Sales, and Business Inventories came in better than expected, while Industrial Production and Capacity Utilization Rate reported poor data. Today, the Eurozone is to release the Final CPI and Final Core CPI. On the other hand, the US Philly Fed Manufacturing Index, Unemployment Claims, Building Permits, and Housing Starts could drive the market. EUR/USD Accumulates More Bullish Energy! EUR/USD maintains a bullish bias as long as it stays above the median line (ml) of the ascending pitchfork. The 1.0368 represented an upside obstacle, so stabilizing above it may signal more gains ahead. Still, the minor downtrend line represents a dynamic resistance. The price action developed a potential triangle pattern. EUR/USD Outlook! Staying above the median line (ml) and making a valid breakout through the downtrend line activates further growth at least towards 1.0481. This is seen as a new long opportunity. A new downside movement could be announced only by a valid breakdown below the median line (ml) and after making a new lower low.     Relevance up to 07:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301355
Saxo Bank Podcast: The Bank Of Japan Meeting And More

The Dovish Comments From The Bank Of Japan's Members

TeleTrade Comments TeleTrade Comments 17.11.2022 08:50
“Financial market stability is the most important factor to consider when it comes to exit,” mentioned Bank of Japan’s (BOJ) executive director Shinichi Uchida early Thursday. The Senior BOJ Official also mentioned that a rate hike before balance sheet adjustment possible in an exit. Earlier in the day, BOJ Governor Haruhiko Kuroda also defended the Japanese central bank’s easy-money policy while stating, “(It is) Important to continue monetary easing to support economy.” Additionally, Deputy Governor Hiroshi Nakaso mentioned that the central banks must remove emergency support measures once financial crises are over to avoid causing moral hazard in the market. “Investors have come to assume that central banks will always come to the rescue when financial markets destabilise because of the massive monetary support deployed during the COVID-19 crisis,” stated BOJ’s Nakaso in a seminar hosted by the University of Tokyo and International Monetary Fund. USDJPY prints two-day uptrend Given the dovish comments from the BOJ officials, as well as the firmer US Treasury yields, USDJPY picks up bids to print mild gains around 139.60. Also read: USDJPY Price Analysis: Bears eye a breakout of the daily coil Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.
Rates Spark: Action at Both Ends of the Curve - US 10yr Treasury Yield and European Rates

Easy Inflation From India Keeps The USD/INR Pair's Buyers Hopeful

TeleTrade Comments TeleTrade Comments 17.11.2022 08:56
USDINR rises for the fourth consecutive day despite easing from intraday high of late. China-linked fears join a rebound in the US Treasury yields to favor bulls. Sluggish markets and lack of major data/events challenge upside momentum. USDINR retreats from intraday high but flashes a four-day winning streak around 81.55 during early Thursday. In doing so, the Indian Rupee (INR) pair fails to cheer downbeat oil prices amid the recent rebound in the US Dollar. That said, US Dollar Index (DXY) snaps a two-day downtrend as it prints mild gains around 106.50 by the press time. In doing so, the greenback’s gauge versus six major currencies traces the recently firmer US Treasury yields. The benchmark US 10-year Treasury yields rose 1.2 basis points (bps) to 3.70% while printing the first positive in four days by the press time. Elsewhere, looming concerns over China’s economic growth and challenges for Asia also exert downside pressure on the INR. “Calibrating China's zero-COVID strategy to mitigate the country's economic impact will be critical to sustain and balance the recovery,” said Gita Gopinath, the first Deputy Managing Director of the International Monetary Fund (IMF), at the Caixin Summit on Thursday. Additionally, fears of slower growth and recently easy inflation from India, as well as political jitters, keep USDINR buyers hopeful. It should be noted that the WTI crude oil prices drop 1.0% to $83.80 during a two-day downtrend while S&P 500 Futures lack clear directions. Also, MSCI’s index of Asia-Pacific shares outside Japan drops 1.7% while easing from the two-month high flashed the previous day. Moving on, risk catalysts may direct the gold price amid a lack of major data events ahead of the US Weekly Jobless Claims and Philadelphia Fed Manufacturing Survey for November. Technical analysis USDINR bulls need a daily closing beyond the 50-DMA hurdle of 81.55, as well as a successful break of the 21-DMA resistance of 81.95, to keep the reins.  
Analysis Of Situation Of The US Dollar To Swiss Franc Pair (USD/CHF)

Analysis Of Situation Of The US Dollar To Swiss Franc Pair (USD/CHF)

TeleTrade Comments TeleTrade Comments 17.11.2022 09:00
The Greenback bulls will get strengthened after an upside break of the accumulation phase. A Spring formation around 0.9400 to remain a major support area ahead. The 20-and 50-EMAs are on the verge of delivering a bull cross. The USDCHF pair has extended its recovery after overstepping the immediate hurdle of 0.9458 in the Tokyo session. The asset has been underpinned as investors have preferred to turn risk-averse amid geopolitical tensions between North Korea and the US. North Korea warned on Thursday of "fiercer military responses" to U.S. efforts to boost its security presence in the region with its allies, says Reuters. Meanwhile, the US dollar index (DXY) is aiming to test Wednesday’s high around 106.78. The 10-year US Treasury yields have shown a mild recovery to near 3.73%. USDCHF has delivered a breakout of the inventory accumulation phase in which inventory shifts from retail participants to institutional investors. Earlier, the asset rebounded after forming a Spring around 0.9400 support. This marks a selling climax, followed by a responsive buying action. The 20-and 50-period Exponential Moving Averages (EMAs) are on the verge of delivering a bearish crossover of around 0.9450. Meanwhile, the Relative Strength Index (RSI) (14) is attempting to shift into the bullish range of 60.00-80.00. Going forward, a decisive move above Monday’s high at 0.9489 will drive the asset towards November 10 low at 0.9630, followed by November 9 low at 0.9800. On the flip side, a drop below Spring formation around 0.9400 will drag the pair towards January 31 high at 0.9343. Slippage below the latter will drag the major towards March 31 low around 0.9200. USDCHF hourly chart  
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The USD/CAD Pair Has Witnessed A Decent Buying Interest

TeleTrade Comments TeleTrade Comments 17.11.2022 09:08
A rebound in the risk-off market mood has strengthened the Greenback bulls. A usual test of the breakout region of the accumulation phase will offer a bargain buy to the market participants. Advancing 20-EMA adds to the upside filters. The USDCAD pair has shifted its auction profile above the critical hurdle of 1.3350 in the early European session. The asset has witnessed a decent buying interest as investors have turned cautious amid escalating geopolitical tensions between North Korea and the US. The major has refreshed it's weekly high above 1.3360 led by a steep fall in oil prices. The US dollar index (DXY) has witnessed marginal selling pressure while struggling to cross the critical hurdle of 106.60. While the S&P500 futures have shown some recovery after easing entire gains recorded in early Asia. On an hourly scale, the asset has delivered a breakout of the accumulation phase that signals the transfer of inventory from retail participants to institutional investors. A usual test of the breakout region around 1.3336 would be an optimal opportunity for investors to initiate longs. The 20-period Exponential Moving Average (EMA) at 1.3325 is advancing, which adds to the upside filters. Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates that upside momentum has been activated. Should the asset corrects marginally to near the breakout region around 1.3336, investors will consider this a bargain buy and will initiate fresh longs. This will drive the asset towards November 8 low at 1.3387, followed by November 10 high at 1.3571. On the contrary, the Loonie bulls could regain control if the asset drops below the round-level support of 1.3300, which will drag the asset towards Wednesday’s low at 1.3246 and September 1 high around 1.3200. USDCAD hourly chart  
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

Accelerating Covid-19 Infections Have Not Impacted The Kiwi Dollar (NZD)

TeleTrade Comments TeleTrade Comments 17.11.2022 09:11
NZDUSD has picked bids from 0.6120 amid obscurity in the market sentiment. The DXY is displaying a volatile performance and has surrendered intraday gains. The 10-year US Treasury yields have eased to 3.71% despite hawkish commentary from Fed’s Daly. The NZDUSD pair has witnessed buying interest after dropping to near 0.6120 in the Asian session. The asset has picked bids as the US dollar index (DXY) has turned volatile after facing selling pressure around the critical hurdle of 106.60. Market mood is displaying mixed cues as DXY has witnessed offers despite mounting geopolitical tensions between North Korea and the US. It could be possible that market participants must be awaiting further development on North Korea-US noise for making informed decisions. The DXY has surrendered the majority of its intraday gains and is likely to remain on tenterhooks as US economic calendar has nothing much to offer this week. Meanwhile, S&P500 futures are displaying topsy-turvy moves amid ambiguity in the risk impulse. The returns generated by long-term US government bonds have trimmed to 3.71% after printing an intraday high of 3.73%. Higher interest rate guidance by San Francisco Federal Reserve (Fed) President Mary Daly has failed to strengthen US yields. Fed policymaker has considered a range of 4.75% - 5.25% as reasonable for the policy rate end-point. She further added that the central bank wants to see a slowdown in the economy to cool down the red-hot inflation. On the NZ front, accelerating Covid-19 infections have not impacted the kiwi dollar much. Gita Gopinath, the first Deputy Managing Director of the International Monetary Fund (IMF), at the Caixin Summit, cited that “Calibrating China's zero-COVID strategy to mitigate the country's economic impact will be critical to sustain and balance the recovery,” This might impact recovery in the antipodean ahead.
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

Accelerating Covid-19 Infections Have Not Impacted The Kiwi Dollar (NZD) - 17.11.2022

TeleTrade Comments TeleTrade Comments 17.11.2022 09:11
NZDUSD has picked bids from 0.6120 amid obscurity in the market sentiment. The DXY is displaying a volatile performance and has surrendered intraday gains. The 10-year US Treasury yields have eased to 3.71% despite hawkish commentary from Fed’s Daly. The NZDUSD pair has witnessed buying interest after dropping to near 0.6120 in the Asian session. The asset has picked bids as the US dollar index (DXY) has turned volatile after facing selling pressure around the critical hurdle of 106.60. Market mood is displaying mixed cues as DXY has witnessed offers despite mounting geopolitical tensions between North Korea and the US. It could be possible that market participants must be awaiting further development on North Korea-US noise for making informed decisions. The DXY has surrendered the majority of its intraday gains and is likely to remain on tenterhooks as US economic calendar has nothing much to offer this week. Meanwhile, S&P500 futures are displaying topsy-turvy moves amid ambiguity in the risk impulse. The returns generated by long-term US government bonds have trimmed to 3.71% after printing an intraday high of 3.73%. Higher interest rate guidance by San Francisco Federal Reserve (Fed) President Mary Daly has failed to strengthen US yields. Fed policymaker has considered a range of 4.75% - 5.25% as reasonable for the policy rate end-point. She further added that the central bank wants to see a slowdown in the economy to cool down the red-hot inflation. On the NZ front, accelerating Covid-19 infections have not impacted the kiwi dollar much. Gita Gopinath, the first Deputy Managing Director of the International Monetary Fund (IMF), at the Caixin Summit, cited that “Calibrating China's zero-COVID strategy to mitigate the country's economic impact will be critical to sustain and balance the recovery,” This might impact recovery in the antipodean ahead.
The USD/IDR Pair Is Expected A Further Downside Movement

The Bank Indonesia Is Ready To Hike Rate To Tame The Inflation Fears In Asia

TeleTrade Comments TeleTrade Comments 17.11.2022 09:16
USDIDR prints four-day uptrend, seesaws around intraday high of late. Bank Indonesia is likely to increase benchmark rate by 50 bps. Upside break of fortnight-old resistance line could refresh multi-month high. 21-DMA, ascending trend line from late September restrict short-term downside. USDIDR grinds higher as it braces for the Bank Indonesia (BI) Rate announcement during early Thursday, poking one-week high near $15,700 during a four-day uptrend by the press time. The BI is ready to announce this year’s fourth rate hike to tame the inflation fears in the Asian economy. That said, the Indonesian central bank is likely to lift the rate by 50 bps to 5.25%, a three-year high during today’s monetary policy meeting. As a result, a downward-sloping resistance line from November 04, around $15,720 by the press time, gains major attention as a successful break of which could quickly refresh the multi-month high marked earlier in November at around $15,745. In that case, the $16,000 threshold may entertain USDIDR bulls before directing them to the yearly 2020 peak surrounding $16,740. Alternatively, pullback moves remain elusive unless breaking the 21-DMA support near $15,615. Even so, a seven-week-old ascending support line could challenge the USDIDR bears near $15,425. It should be noted that an ascending trend line from August 2022, close to $15,160 at the latest, appears the last defense of the USDIDR bulls. USDIDR: Daily chart Trend: Further upside expected    
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

Softer Japanese Yen (JPY) Continues To Lend Support To The GBP/JPY

TeleTrade Comments TeleTrade Comments 17.11.2022 09:24
GBPJPY is seen oscillating in a narrow trading band around the 166.00 mark. Expectations for further rate hikes by the BoE continue to lend some support. Bulls now await the UK government's financial plan before placing fresh bets. The GBPJPY cross struggles to gain any meaningful traction and seesaws between tepid gains/minor losses through the early European session on Thursday. The cross is currently placed near the top end of its weekly range, just above the 166.00 mark, awaiting the UK government's financial plan before the next leg of a directional move. Chancellor Jeremy Hunt will unveil his Autumn Statement later today and is expected to reduce the size of the fiscal gap. This will play a key role in influencing the sentiment surrounding the British Pound and help determine the near-term trajectory for the GBPJPY cross. In the meantime, growing acceptance that the Bank of England will continue raising borrowing costs to combat stubbornly high inflation acts as a tailwind for the Sterling. The bets were reaffirmed by Wednesday’s release of hotter-than-expected UK consumer inflation figures, which showed that the headline CPI accelerated to a 41-year high of 11.1% in October. Furthermore, BoE Governor Andrew Bailey said on Wednesday that Britain's very tight labour market was a key reason why further interest rate increases were likely. This, along with a softer Japanese Yen, continues to lend some support to the GBPJPY cross. The initial market reaction to the latest geopolitical development fades rather quickly after early findings point to the missile that hit Poland on Tuesday being accidentally fired by Ukrainian forces. Apart from this, a more dovish stance adopted by the Bank of Japan is seen undermining the safe-haven JPY. In fact, Governor Haruhiko Kuroda said on Thursday that it is important to continue monetary easing to support the economy. The fundamental backdrop supports prospects for a further near-term appreciating move for the GBPJPY cross, though bulls prefer to wait on the sidelines ahead of the key event risk. This makes it prudent to wait for some follow-through buying before positioning for additional intraday gains. That said, any meaningful downtick could attract some buyers near the 100-day SMA support, which should now act as a key pivotal point.  
China: PMI positively surprises the market

Chinese Yuan (CNY) Is Expected A Further Depreciation

TeleTrade Comments TeleTrade Comments 17.11.2022 09:31
Economists at TD Securities think the Chinese Yuan is likely to maintain downward trajectory versus the US Dollar. USDCNY is set to reach 7.40 by the end of the year. It is hard to be optimistic on CNY “Without a clear roadmap out from its zero-COVID strategy, it is hard to be optimistic on CNY, with growth prospects increasingly dim and the PBoC keeping to an accommodative monetary policy stance to support growth.”  “We expect a further depreciation of the CNY in the months ahead and see USDCNY ending at 7.40 by end 2022 though we expect some outperformance relative to forwards.”  
Investments In Specific Football Clubs Do Not Appear To Be Profitable

The Parallels Of Investing And Football Management According To Sven Goran Eriksson

Saxo Bank Saxo Bank 17.11.2022 10:25
In an exclusive interview, we sat down with former England manager Sven Goran Eriksson to discuss the parallels of investing and football management.Decision-making is equally important in investing and as a football manager. How much of your work has come down to logic and not emotions and impulse?“You always need to use logic. Football is an art. You never know what is going to happen in a football match before it starts. You have to use your brain when you pick the squad and when you pick the team. You have to put emotions to one side because with emotions, you don’t win football games. On matchday, you have to select your best starting eleven that you think is going to perform the best for certain games. When you work in a company, it’s the same thing. You have to do what you think is right, for the moment both in friendship and relationship, whatever it is, put that away, because that has nothing to do with football and logic.”In trading, basing your decisions on predetermined knowledge, known as anchoring, or being emotionally involved in a stock can be two of the biggest hazards in making investments. For a manager, an example of this could be making decisions based on players’ egos or prior media perception of players. How does a manager deal with this?"The manager will try to put out the best eleven and make changes during the game in order to win as many games as possible. If you don't play well and lose too many games, who will get the blame? The manager will be blamed for not winning games. You have to play the best players you think will win the game for you even if it means dropping a big name.”A recent real-life example of this is the relationship between Cristiano Ronaldo and manager Erik Ten Hag at Manchester United. “With Ronaldo, it’s a difficult one. We are talking about one of the best players in the world for many, many, years, scoring goals for fun. The day will come when the manager thinks no. I prefer other players. In this case, I think personally, it's very important that you sell Ronaldo because he cannot stay. I don’t think he should stay at Manchester United if he doesn’t play. He's too big of a name and it will always create these discussions. If results are not good and if Manchester United fail to qualify for the Champions League this season, that's a failure for the club.“Investors look to take advantage of short trading and long trading positions. In 2002, the England squad you selected was flagged as fairly inexperienced at the time. Like with long-trading, some decisions are made for long-term investment - was that the case here?“It was always nice to inherit young, talented players, but the balance of a team is extremely important. In 2002, we were not ready to win the World Cup. Brazil went on to deservedly win the World Cup. In 2006, I thought at the time and still today, we had a squad which was not worse than any other team at that World Cup. So yes, I’m sure the experience players gained in 2002 made the team better in 2006. I knew that this was a golden opportunity to win the World Cup but we didn't and we should have done it.”Risk and reward play a big part in trading strategies, for example; knowing when to sell and how to take advantage of positions. You took a big risk to include David Beckham in your 2002 World Cup squad who was returning from fitness, this ultimately paid off. However, was this a risk you feel you had to make? “When David Beckham got injured prior to the 2002 World Cup, he was a key player and my captain. It was my responsibility on whether he should or shouldn’t go to the World Cup. There were a lot of talks with the manager of the club, doctors of the club, doctors of the national team and with the player. If there is a small chance that they can play at any stage in the World Cup, then you have to pick them. You cannot do otherwise. This is the same with current England manager Gareth Southgate, he has a lot of players that he can’t afford to lose. If Harry Kane got injured prior to the World Cup, it would be a complete disaster.”Who could you see winning the World Cup and who do you think will be the stand out player?"If I were to put money on which team is going to win the World Cup, I would say maybe England but most likely Brazil. I think they have fantastic football players out there with speed, technique and experience with several Brazilians playing in Europe. I hope England will do it but let’s see. I hope Harry Kane will be the stand out player of the tournament, this would be great for England. However, you also have Karim Benzema, Neymar and so many others.”How do you think the Netherlands could do?“We're talking about a team who in the past, would be one of the favourites to win the World Cup. They were always in the semi-finals and would occasionally reach the final.  In this World Cup, I can’t see Netherlands reaching the semi-finals. There are other teams that have a stronger chance of winning the World Cup. For example, I think Belgium is better than Holland and then you have Argentina, Brazil, England, France and Spain, who all have a better chance of winning the World Cup.”There’s been opposing views on Raheem Sterling’s place as a starter for England - what are your thoughts and how much of an effect does form have in the build-up to a major tournament?“It's a very difficult World Cup because there are no friendly games prior to the tournament. Normally you have the players several weeks before the World Cup starts. You have training and play one or two friendly games. Now, there are no friendly games. There's some days after you play in the Premier League and you don't have as much time for training. I think it's very much dependent on the form the players are in currently. Sterling has incredible pace and one against one he can dribble and win games for England but he can also do this from the bench.”Do you believe Marcus Rashford is back to his best? How do you rate his chances of starting for England?“In recent games for Man United, he has played very well and is starting to look like the player he was a couple of years ago. I’m not sure what happened to him in the last few seasons. He looked down for a while. That happens to players, but he looks very confident and he looks very good. He has a good chance of starting. It's good for England and it’s good for Southgate.”Should James Maddison be starting in England’s first game?“I think James Maddison is doing extremely well at the moment. There are no big preparations before this World Cup going straight from the Premier League to the World Cup. Southgate can see that he's in great shape at the moment. That is why he’s been selected.”Jude Bellingham has been a regular starter for England. If he has a good tournament, would moving to a big club in the Premier League be a good move for him at this time?“He's playing in a great team and he's playing in arguably the second best league in Europe behind the Premier League. This has been the case for many years now. Playing for Dortmund, Bellingham won’t miss any chances to play in the national team. Some of the big Premier League clubs will come in for him. It will be important for him to play well at this World Cup, I'm sure that one of the big clubs in England will try to sign him in the summer.” Source: https://www.home.saxo/content/articles/thought-starters/qa-with-sven-goran-eriksson---investor-vs-football-manager-you-have-to-put-emotions-to-one-side-because-emotions-dont-make-you-a-winner-17112022
UK Budget: Short-term positives to be met with medium-term caution

FX: Credible UK Budget Will Deliver Substantial Fiscal Tightening

ING Economics ING Economics 17.11.2022 10:56
Today's FX highlight will be the UK's autumn statement. Given that the UK's bond market has largely regained its composure from the sell-off in September, we struggle to see what upside there is for sterling today. Positioning could be the wild card, however. Elsewhere, we have five Fed speakers and favour further dollar consolidation In this article USD: Softer renminbi helps support the dollar EUR: Could be dragged around by sterling GBP: Caution advised BRL: Reality check USD: Softer renminbi helps support the dollar Yesterday, we published our 2023 FX Outlook and for professional customers our FX Top Trade ideas. Our core message for FX markets in 2023 is to expect fewer FX trends - i.e. a repeat of a clean 18-month dollar trend is unlikely - and instead look for more volatility as central banks tighten rates into a recession. Feedback on the report is welcome! For today, the dollar has entered a consolidative mode. We note the rise in USD/CNH which may be giving the dollar a little support. Somewhat conversely, the better news out of China seems to be giving the local banks some problems. Here, retail investors have en masse withdrawn from Chinese bond markets in favour of equities, prompting authorities to check with local banks whether they have sufficient liquidity to meet these withdrawals. For today, we have five Fed speakers. Market pricing for the 14 December FOMC meeting is settling on a 50bp hike - such that any further reference to that today need not demand a much weaker dollar. Our slight bias near term is that long dollar position adjustment may have a little further to run, but that something like the 105 area in DXY proves a 4Q22 base. Chris Turner EUR: Could be dragged around by sterling EUR/USD remains in corrective mode and is not reacting much to press reports of the European Central Bank favouring a 50bp over a 75bp hike in December. Notably, the FX options market has shown no more signs of distress - i.e. investors are not scrambling to buy euro call options - and one can argue that this makes the 1.05 area a slightly firmer ceiling for 4Q22. Expect EUR/USD to be dragged around by GBP/USD today - just as it was in September. 1.0270-1.0500 remains our expected near-term trading range for EUR/USD. Chris Turner GBP: Caution advised The big day has arrived. Chancellor Jeremy Hunt will unveil the autumn statement aimed at plugging the fiscal hole that led to the collapse of Gilts and sterling in September. Investor views of UK fiscal credibility have largely returned to pre-Truss levels, where the 10-year German Bund-Gilt spread is now 115bp (versus 228bp in September) and the UK's 5-year sovereign CDS has narrowed to 27bp from 52bp. Arguably then, the positive re-assessment of the UK fiscal position has largely taken place and suggests that sterling does not have to rally a lot more on a credible budget. Indeed, a credible budget will deliver substantial fiscal tightening and cement views of a multi-quarter UK recession and one in which the Bank of England will continue to hike rates into 2023. As a pro-cyclical currency, this cannot be a good environment for sterling. And were Chancellor Hunt to try and back-load fiscal tightening - e.g. until after the next election in 2024 - Gilts and sterling would sell off. Overall, we expect GBP/USD to be unable to hold any gains above 1.20 and would prefer sub 1.15 levels before year-end. Equally, EUR/GBP should find support near 0.86/87. The only thing going for sterling is buy-side positioning. Being short the pound had been one of the most popular buy-side trades going into October. We have seen what positioning has done to crowded long dollar trades over the last week. It is hard to see what sterling positives the market could take from today's budget - but there is an outside risk that investors have some residual sterling shorts to cover. The outside risk near term is a very painful sterling short-squeeze taking GBP/USD to 1.23. However, that squeeze should not last long. Chris Turner   BRL: Reality check It seems fair to say that the Brazilian real has disappointed some of the more bullish expectations made when Luiz Lula won the Presidential election run-off in October. Investors had been attracted to the real because of Brazil's high real interest rates and the idea that a centrist congress could keep some of President-elect Lula's spending plans in check. However, concerns about Brazil's fiscal position and welfare spending plans have come back to the fore. The new administration, taking office in January is looking at a constitutional amendment to exclude around $30bn of welfare spending from the nation's fiscal debt limit. Reuters is also reporting that Lula may be favouring a left-wing choice for Finance Minister - typically a very sensitive topic for Latam currencies. Equally, further choices for Lula's new team are said to be coming from the administration of former left-wing President, Dilma Rousseff, who was widely associated with Brazil's last fiscal crisis. We have been more bearish on the Brazilian real than consensus for some time and in our recently published FX Outlook, we make the case for USD/BRL to be ending 2023 much closer to the 5.80 highs than the consensus estimate of 5.15. Investors looking for yield in Latam should instead continue to favour the less volatile and better fiscally positioned Mexican peso. And near term, BRL/MXN can trade back to the 3.50 lows.  Chris Turner Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Saxo Bank Podcast: Nvidia And Siemens Earnings, The Budget Statement From UK And More

Saxo Bank Podcast: Nvidia And Siemens Earnings, The Budget Statement From UK And More

Saxo Bank Saxo Bank 17.11.2022 11:01
Summary:  Today we look at risk sentiment taking a breather after a particularly strong US October US Retail Sales report, although long US treasury yields fell on the day and took the yield curve inversion to its most negative in over forty years as markets continue to price a recession ahead. The key incoming data doesn't start rolling in for another couple of weeks, so we wonder if a possible shift in weather into proper winter mode could change the complacent stance in energy markets. Elsewhere, we wonder if the Budget Statement from UK Chancellor Hunt can continue to support sterling, look at the plunge in coffee prices, Nvidia and Siemens earnings, and more. Today's pod features Peter Garnry on equities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-17-2022-17112022
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

The Reserve Bank Of Australia Will Be Wary Of A Spectre Of A Wage-Price Spiral

Kenny Fisher Kenny Fisher 17.11.2022 13:07
The Australian dollar is considerably lower on Thursday. In the European session, AUD/USD is trading at 0.6671, down 1.02%. Employment data shines Australia’s tight labor market got even tighter in October. Total employment jumped by 32,200, up from just 900 in September. The numbers were especially encouraging as full-time employment jumped by 47,100, up from 10,900 prior. The unemployment rate of 3.5%, which was already running at a 50-low, inched lower to 3.4%. The excellent numbers are unlikely to change the Reserve Bank of Australia’s rate policy. The RBA has eased the pace of rate hikes considerably, with two straight increases of a modest 0.25%. The markets have priced in another 0.25% hike at the December 6th meeting, which would bring the cash rate to 3.10%. With rates expected to peak in early 2023 around 3.5% or 3.6%, the end appears in sight for the current rate-tightening cycle. The robust labour market has put upward pressure on wages, which burst higher on Wednesday with a gain of 3.1% YoY in the third quarter, its strongest quarterly gain since 2013. The Reserve Bank of Australia will be wary of a spectre of a wage-price spiral if wages continue to accelerate, which would greatly complicate efforts to curb inflation. US retail sales for October pointed to consumer resilience, despite high interest rates and stubbornly sticky inflation. The headline and core releases both came in at 1.3%, above expectations and a strong rebound from the September data (0.0% headline, 0.1% core). This indicates that the US economy can handle additional rate hikes, with the Fed expected to raise rates to 5.0% or slightly higher. With the benchmark rate sitting at 4.0%, investors would do well to keep in mind that there is still some life left in the current rate-tightening cycle.   AUD/USD Technical 0.6603 and 0.6490 are providing support There is resistance at 0.6750 and 0.6821 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
ECB press conference brings more fog than clarity

The ECB May Well Opt For A Less Aggressive Move

InstaForex Analysis InstaForex Analysis 17.11.2022 13:16
Euro hovered at monthly highs after some ECB members hinted at a lesser rate hike next month. Of course, inflation will play a key role, but although prices have not slowed down lately, at least there is no significant upward spurt. With no momentum for another 75 basis point move, the European Central Bank could hold off on further aggressive policies, which will pull euro down as there are no other reasons to buy it. The Board of Governors and its meetings are closed, but the leaked information gives a certain reason to think about whether it is worth buying the currency now. Obviously, unless there is another unexpected spike in inflation, the ECB may well opt for a less aggressive move. Decision of the ECB The reasons why the central bank may look towards a softer policy include growing risks of a recession, the likelihood that pressure on consumer prices will ease in the near future, and the prospect that a half-point increase in the deposit rate will move closer to the neutral a level that will no longer stimulate the economy and thereby limit inflationary pressures. With four weeks before the final decision of the ECB, there is still enough time for officials to think carefully. Amid market expectations for a half-point increase, hawkish ECB politicians have made little effort to refute this view, only calmly insisting on a third consecutive 75 basis point increase. Austrian central bank governor Robert Holzmann said that now is not the time to change course, although he also kept silent about the size of the next increase. Joachim Nagel, president of the Bundesbank, took a similar approach to the situation. Their Estonian and Latvian counterparts, suffering from the most runaway inflation in the eurozone, called 50 and 75 basis points possible, but did not express a preference for which side they would take. Meanwhile, the head of the Bank of France, Francois Villeroy de Gallo, said the ECB is likely to take a less aggressive path, which could also point to 50 basis points. Inflation in the eurozone However, inflation in the eurozone remains at 10.7%, and even if the rate falls today, it will remain a record in the history. The next meeting of the Board of Governors will coincide with the publication of inflation data for November. A week later, politicians begin a period of calm before their December decision. EUR/USD With regards to the forex market, risk appetite decreased significantly, but sellers are yet to be active. For further growth in EUR/USD, it is necessary to break above 1.0440 as only that will prompt a rise to 1.0480, 1.0525 and 1.0570. If pressure persists, the pair will fall to 1.0350, then to 1.0280 and 1.0220. GBP/USD GBP/USD has halted, so buyers are focused on protecting the support level of 1.1850. They want to breaking through the resistance level of 1.1920 because that will prompt a further rise to 1.2020 and 1.2080. But if pressure returns and sellers take control of 1.1850, the pair will fall to 1.1790 and 1.1740.   Relevance up to 10:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327395
Indonesia: Inflation moderates further in March

Indonesian rupiah: Bank Indonesia goes for a 50bp rate hike

ING Economics ING Economics 17.11.2022 13:37
Bank Indonesia hiked rates aggressively despite softer-than-expected inflation Indonesia's central bank governor Perry Warjiyo 5.25% BI policy rate   As expected BI hikes rates by 50bp Bank Indonesia hiked policy rates by 50bp, a move widely expected by market participants. The 50bp rate increase was dubbed as “pre-emptive” and “front-loaded” by BI Governor Perry Warjiyo as the central bank attempts to cap inflation pressures and shore up the currency.  BI expects growth to remain robust, retaining its 4.5-5.3% year-on-year growth forecast for the year. With growth momentum intact, Governor Warjiyo decided to continue on with aggressive tightening to help maintain a healthy differential with the Fed funds target rate. BI likely keeping hawkish tone amid IDR struggles and core inflation trends Source: Badan Pusat Statistik and Bank Indonesia Core inflation trends and IDR struggles to keep BI hawkish Indonesia’s core inflation has been steadily on the uptick (October at 3.3%) and should likely sustain this trend in the coming months. The price increase for subsidised fuel, recently implemented, will likely feed through to the rest of the CPI inflation basket to keep inflation elevated. Furthermore, the recent struggles of the Indonesian rupiah should keep BI hawkish going into 2023.  We expect BI to hike rates by 50bp at the December policy meeting, matching the likely increase by the Fed at the end of the year.  Read this article on THINK TagsBank Indonesia Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Philippines: 4Q GDP Growth Was Impressive, Hit 7.2% YoY

Bangko Sentral ng Pilipinas hikes the rate by 75bp, in line with expectations

ING Economics ING Economics 17.11.2022 13:40
Bangko Sentral ng Pilipinas (BSP) has followed through with its planned rate increase of 75bp, following an announcement by its governor two weeks ago Bangko Sentral ng Pilipinas in Manila 5.0% BSP policy rate   As expected BSP follows through with planned increase BSP has hiked policy rates by 75bp, a move telegraphed by governor Felipe Medalla two weeks ago. Medalla opted to pre-announce his decision to hike rates aggressively to help anchor expectations via forward guidance.  The punchy 75bp increase to the overnight reverse repurchase rate was warranted given surging domestic inflation (7.7% year-on-year in October).  BSP believes that the domestic economy can handle the rapid-fire tightening with growth expected to hold firm as evidenced by the robust third-quarter GDP performance.    Catch me if you can: BSP hikes rates aggressively to quell inflation pressures Source: Philippine Statistics Authority Matchy-matchy: BSP to take its cue from the Fed BSP will likely retain its hawkish tone given its recent adjustment to inflation forecasts for both 2022 and 2023. Inflation is now forecast to average 5.8% (from 5.6%) in 2022 and 4.3% in 2023 (from 4.1%).. Medalla hinted that he would prefer to match any rate increase by the US Federal Reserve to maintain a 100bp interest rate differential.  We expect the BSP to increase policy rates to 5.5% in December given expectations for a 50bp increase by the Fed. The Philippine peso could get a boost from today's decision although given that the hike was pre-announced, any upside for the peso may be capped by global developments.   Read this article on THINK TagsPHP Bangko Sentral ng Pilipinas Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The South America Are Looking For Alternatives To The US Currency

USA: Housing market data can also affect Greenback

Jing Ren Jing Ren 17.11.2022 15:23
Over the next couple of days, we will be getting a series of monthly data from the US housing market. This data comes back into focus after the latest CPI reading, which is why it could have some influence on the dollar. Remember that the next CPI data release is the day before the FOMC announces its policy decision. That means the markets will have little time to adjust expectations based on the data. So, any components that can give some insight into what will happen with prices could have an outsized impact on the markets. Why it matters now The last CPI figure came in well below expectations, both on the headline and core reading. The latter is the most important for the markets, because that's what's tracked by the Fed. The thing is most of that surprise was due to a drop in cost of shelter, which basically means lower rental prices. Rent costs are part of the core inflation rate; since that only excludes food and energy costs. Apparently, analysts haven't been paying enough attention to what's been going on in the US housing industry to adequately forecast what would happen with CPI. This could be an issue beyond inflation, since housing is the largest single industry in the US, consuming the most raw materials. A slump in the housing industry, and the potential effects on the broader economy are illustrated by the 2008 subprime crisis. What happened and where are we going? As we talked about back in June, rising interest rates make it harder for people to afford to buy a house, which in turn puts downward pressure on house prices. Major housing firms have already reported that completions are down, and they expect to sell less in the coming months. Lower housing costs translates into lower rental prices. This is on top of a loss in disposable income keeping people from moving into higher cost rent, or looking for ways to lower their out of pocket expenses by, for example, sharing an apartment. The latest data on the housing market is expected to show a continuation of the trend. October US housing starts are expected to slip to 1.41M from 1.44M prior. Building permits are expected to fall -6.3% compared to the prior month. What this means is fewer new houses are coming on to the market to replace houses that have gotten too old. In the short term, this is bad for homebuilders; but the growing home deficit could imply a boom for the industry after rates come down in the long term. The more worrying sign More concerning is tomorrow's data of existing home sales, which represents a much larger number of buildings. New home building is more adjustable to market trends, and targets areas of growth. It doesn't necessarily represent trends in rent, for example, which is important for monetary policy projections. Existing home sales are expected to come in negative for the 9th consecutive month, showing a decrease of 8%. That would put home sales at 4.4M last month, compared to 4.7M in August.
The USD/JPY Price Seems To Be Optimistic

Kuroda (Bank of Japan) shares his thoughts on inflation in 2023

Kenny Fisher Kenny Fisher 17.11.2022 15:43
The Japanese yen continues to flirt with the 140 level. In the European session, USD/JPY is trading at 140.25, up 0.51%. Japan releases the October National CPI later today, which is expected to rise to 3.5%, following the September reading of 3.0%. Inflation has been on the rise and is above the BoJ’s target of 2%, although these are levels that other major central banks can only dream about. The Bank of Japan has no plans to change its ultra-loose policy, even though inflation is above the target and the yen remains weak. BoJ Governor Kuroda reiterated his well-worn script earlier today that the rise in inflation is transitory, adding that he expects CPI to drop below 2% in fiscal year 2023. The yen has been on a tear in November, with gains of close to 6%, but that is more a case of dollar weakness rather than any newfound yen strength. With the Fed planning another oversize rate hike in December, the US/Japan rate differential will continue to weigh on the yen. Read next: Many sued in FTX scandal, Elon Musk to reduce his time at Twitter, EU stocks edged higher on Thursday| FXMAG.COM Fed sends a hawkish message The investor exhilaration which sent the stock markets rallying after the soft inflation report has taken a pause. Fed policy makers responded with a hawkish message, reminding the markets that the Fed was planning to raise rates higher than they had anticipated. The Fed speak may or may not have convinced investors to settle down, but a strong US retail sales report clearly did the trick. The headline and core releases both posted strong gains of 1.3%, dampening sentiment that the Fed would pivot and ease its tightening. The US economy remains resilient and appears able to absorb further rate hikes without triggering a deep recession. Interest rates are expected to peak at 5% or slightly higher, which means that the Fed is highly likely to continue tightening into next year. USD/JPY Technical USD/JPY has support at 140.30 and 139.66 There is resistance at 141.08 and 141.86 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen dips ahead of key inflation data - MarketPulseMarketPulse
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

ING Economics predicts Bank of England may go for a 50bp rate hike during the December meeting

ING Economics ING Economics 17.11.2022 15:55
Markets have calmed in recent weeks which has allowed the Chancellor to push back some of the fiscal pain, particularly on public spending. The result is elevated borrowing in the near term, but the impact on UK growth isn't necessarily huge. Still, with energy support becoming less generous, the Bank of England can afford to hike more gradually Chancellor Jeremy Hunt leaves 11 Downing Street to present the Autumn Statement Has the government done enough to calm markets? This is a much less pertinent question than it was a few weeks ago. The change in political management, relentless leaks of possible austerity measures, and an end to the liability-driven investment (LDI) pension crisis have all contributed to calmer markets and a narrower risk premium in UK assets. Investors have also bet that a tighter budget will lessen pressure on the Bank of England to increase rates. That is perhaps an exaggeration, but the combination of these factors helped 10-year government bond yields fall from 4.5% to 3.25% in the run-up to today's Budget. But this logic was still contingent on Chancellor Jeremy Hunt presenting a plan which saw debt stabilise as a percentage of GDP in the medium-term – and the Office for Budget Responsibility has confirmed this will be the case by the fiscal year 2027/28. But the story is a little more complex than that, and the reality is the Chancellor faced a trade-off between boosting credibility by presenting immediate plans to reduce borrowing and avoiding amplifying the forthcoming recession. If anything, the Chancellor is leaning more towards the second of those priorities, in that much of the pain – particularly in terms of tighter government spending – won’t kick in for a couple of years. Public sector net investment rises to 3% of GDP next year but then falls back to 2.2% in five years’ time. The result is that borrowing is still elevated over the next couple of years, to the extent that gilt issuance plans have actually increased for the next fiscal year. Taking the Debt Management Office’s forecast 2023-24 remit of £305bn, and the BoE’s quantitative tightening programme, we estimate that private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24. The previous peak was £107bn in FY2020-21. Gilt markets may be calmer, but there’s still plenty of supply for private investors to absorb – and a lot rests on delayed pain coming through in the public finances later this decade. For now, though, sterling has taken the Autumn Statement in its stride, barely changing against the euro and slightly softening against today’s modest dollar recovery. The lack of reaction will be down to the well-flagged measures from the new government, although the currency market might once again be keeping one eye on the slight softness in the gilt market today. Our baseline view sees GBP/USD dipping below 1.15 after the current bout of position adjustment has run its course, while we also favour some modest underperformance against the euro. EUR/GBP could be trading back to 0.89 by year-end. Energy support is becoming less generous Source: Ofgem, Refinitiv, ING calculations The impact on the economy and inflation The fact that a fair chunk of the pain has been delayed means that the economic impact of the Autumn Statement on next year’s growth isn’t necessarily huge – or at least not compared to expectations. A lot of the near-term tax rises are also either concentrated on higher-income earners or energy companies – and remember that the national insurance cut implemented under former Prime Minister Liz Truss hasn't been reversed. That said, the major change is that the average household will see energy bills fixed at £3,000 a year from April, up from £2,500 previously promised. That’s still slightly more generous than would otherwise be implied by wholesale gas/electricity futures, but not by much. We estimate that, without government intervention, the average energy bill would be £3,200 in FY2023, and that reflects the big fall in prices we’ve seen since August. Interestingly, even though the Chancellor has committed to supporting households for another 12 months beyond April, we estimate that energy bills will actually fall below £3,000 on an annualised basis by the first quarter of 2024 if wholesale prices stay where they are. Admittedly that's a big "if", and the risk for the Treasury is that they increase once more, particularly for futures covering the winter of 2023/24, pushing up the cost of support – albeit this is somewhat mitigated by a widened windfall tax that will now cover renewable electricity generators. For the economy, the important point is that households will be paying a little over 8% of disposable incomes for energy in FY2023, from 7% under the original guarantee, by our estimates. However, this is before considering new payments for low-income households, which will help cushion the blow. We’re forecasting a recession with a cumulative hit to GDP of roughly 2% by the middle of next year, and expect overall 2023 GDP to fall by 1.2%. The decision on energy prices lifts our inflation forecasts by roughly one percentage point from April next year. UK inflation will be roughly 1pp higher after April Source: Macrobond, ING The impact on the Bank of England The reality is there’s not much in the Autumn Statement to cause any earthshattering changes to the Bank of England’s view that it unveiled at the November meeting. The BoE's forecasts, which envisaged recession with or without further rate hikes, were premised on some withdrawal of energy support. The assumptions it made at the time are not wildly different from what has been announced today. As a result, we think the November 75bp rate hike will probably prove to be a one-off. Admittedly, some hawkish surprises in this week’s inflation data, and signs of ongoing worker shortages, suggest the Bank’s work isn’t finished yet. But we think the committee will pivot back to a 50bp hike in December and either 25bp or 50bp in February, seeing the Bank Rate peak around 4%. Read this article on THINK TagsUK fiscal policy Inflation Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The American Dollar's Unyielding Strength Amidst Market Surprises and Economic Divergence

Leverage - One Of The Main Features Of Futures

Kamila Szypuła Kamila Szypuła 13.11.2022 11:31
Investing on the stock exchange, on the international Forex market and on other markets using various investment instruments requires knowledge, experience and the ability to use various tools. They also include financial leverage. Leverage or financial leverage - these are almost magical words for those who start their adventure with the derivatives market. Leverage is also a feature that is the main factor behind the significant rotation of participants in this market. Definition Leverage - one of the main features of futures contracts - in the long run is primarily suitable for portfolio diversification and should be dosed in moderation. This is a mechanism that allows you to achieve high profits using relatively small capital outlays. Importantly, for this to happen, the investor must use external financing, i.e. find an entity that will help multiply the funds that are the investment force. Who is it most often? Funds are obtained, for example, from banks granting loans in a fixed amount. To calculate the amount, the leverage ratio is used. An institution that agrees to support the investment by providing a specific amount receives appropriate remuneration in the form of interest on the loan. Leverage therefore helps players with less equity to enter the currency markets. Leverage is a way to increase equity, but whether it will be possible to use it depends on the lending institution. Leverage effect What effect can we talk about when we mean the financial leverage tool? It all depends on whether it helped the investment, generated more profits, or rather contributed to the loss of the investor. The effect is positive or negative. The first one can be discussed when the return on equity increases. The second is the opposite - if the operation fails, the effect will be negative. Formula: Determining whether leverage has resulted in profit or loss requires the use of a formula. Thanks to it, you can determine whether the effect of its application has a positive or negative value. The obtained result is the degree of financial leverage. If the calculated value is greater than 1, it is said to be a positive effect, in the opposite situation - a negative one. The level of financial leverage can be calculated according to the formula Or In order to calculate the financial leverage ratio, you first need to calculate return on equity (ROE) and return on assets (ROA), and then divide ROE by ROA. When and where to use? Leverage is used when investing on the Stock Exchange, as well as on the Forex market. It involves the involvement of external capital, such as loans and credits, in order to finance the company's activities. The effect of their application is to increase the profitability of the investor's equity. In practice In fact, it is a very simple tool for multiplying investment profits. If an investor only has 1,000 euros, pounds or dollars, which can be spent, for example, on the purchase of shares, should not expect large profits from the operation. The solution is to use leverage, i.e. external support. The missing amount is added, for example, by a bank or other institution, thus enabling the achievement of much greater profits from the planned operation. Leverage therefore helps to multiply capital, and the loan and scheduled interest return to the lender. It should be remembered that the higher the planned rate of return on investment, the greater the risk of the operation. Benefits There is no doubt that leveraged investing has many advantages. Among them are: the possibility of taking higher investment positions thanks to a significant increase in capital, the ability to invest in different classes of assets, increasing the chance for substantial profits earned in a short time, the ability to earn higher profits during periods and markets with low volatility. What to fear? Trading with leverage does indeed have the potential to make high profits, but if a person's prediction turns out to be wrong, then they could lose a lot more money than they invested. Leverage magnifies losses if the market moves in the opposite direction to what the trader previously assumed. Source: Jakubczyc J.(1999). "Zarządzanie finansami. Odpowiedzialność finansowa", investing.com
Unlocking the Future: Key UK Wage Data and September BoE Rate Hike Prospects

Knowledge Bank About Break Even Point And CSI

Kamila Szypuła Kamila Szypuła 12.11.2022 10:02
The best traders follow exactly what is happening in the market intelligently and are rarely surprised by events. They also use the many tools available to better manage their activities. Indicators are often such tools. The ones that attract the most attention of traders are presented in this article. Currency Strength Indicator Currency trading is fundamentally different from trading other assets as you are exposed to not one but two different assets in the form of two different currencies. Therefore, forex trading requires the development of special skills. One of the most important is measuring the strength and weakness of different currencies. This is where the currency strength indicator comes in handy. It is an indicator used for technical analysis to obtain information on the strength of a given currency against a basket of other 7 currencies as each currency has a certain degree of strength against other currencies. CSI is based on an algorithm that takes price and volume into account. The basic working principle of the CSI is to serve as a filter in decision making. This allows you to quickly determine whether, for example, the US dollar is strengthening or weakening. Based on real-time data on the current market, we can judge which currency is overbought and which is oversold. In general, it is important to compare market sentiment across different time frames when using the CSI. Another equally important issue is to remember that the strength of a given currency is always determined for a given time frame. For example, the Euro may show strength today, but be weak on a monthly basis. The CSI is used as additional confirmation and is not sufficient on its own to make decisions. Even though it does not provide 100% accurate signals, it is very useful in determining the trend direction. Generally, we can distinguish two types of CSI in terms of visuals. In the case of the first one, each currency is represented by a line moving on a uniform field, therefore all currencies are arranged in a series of different lines. In the second type of indicator, each currency is shown as a bar divided into units (squares) - the more units, the stronger the currency. Break Even Point The break-even point for a trade or investment is determined by comparing the market price of an asset to the original cost; the break even point is reached when the two prices are equal. In corporate accounting, the break-even point formula is determined by dividing the total fixed costs associated with production by the revenue per individual unit minus the variable costs per unit. When calculating the BEP for our transaction, we can consider it as a profitability indicator for our investment. If the price of an asset has increased so much that we are above the break-even point, it means that it is profitable. However, if we are below BEP, it means that the position is at a loss at the moment. Many traders use the BEP to determine where they place their stop loss when the value of their investment is temporarily higher than at the time of purchase. Thanks to this, they ensure that the position will not be closed with a loss. Means for company The break-even point is the achievement of a situation in the enterprise in which the revenues fully balance the costs and do not exceed them. In practice, this means a situation in which the company does not bring either profit or loss. Stop loss Stop loss is a specific type of pending stop order. The order is tied to a specific position and closes it when the price goes down or up and reaches the Stop Loss level. Buy trades defend a sell stop order as a stop loss. Conversely, sell trades defend a buy stop order as a stop loss. Source: investopedia.com
US Nonfarm Payrolls Disappoint: Impact on Dollar and EUR/USD Analysis

A Dictionary Of Basic Indicators In The Forex Market (RSI, EMA)

Kamila Szypuła Kamila Szypuła 12.11.2022 09:30
Investors are constantly looking for newer and better indicators, aimed at describing the market situation as accurately as possible and giving accurate buy or sell signals. One of the most basic and commonly known are moving averages. In today's article, we will also learn what the RSI really does, how to understand its indications. The Relative Strength Index (RSI) Among the many tools available to traders, the RSI oscillator is one of the most used technical indicators for both beginners and more experienced traders. Its practicality and ease of use make it a valued tool used by Forex traders and other markets. The relative strength index called RSI (Relative Strength Index) is one of the most popular indicators used by traders. As the name suggests, the RSI provides information about the strength of the price movement on the chart. How to calculate the RSI is shown in the formula below: RS = average of N closes up / average of N closes down Relative Strength Index = 100 - (100 /1 + RS) The standard setting of the RSI is 14-periods, which means that the indicator takes into account the values of the last 14 candles or time periods. For example, if all 14 candles were bullish, the RSI would read 100. However, if all 14 candles were bearish, the RSI would read 0 (or relatively close to 100 and 0). However, when the RSI is 50, it means that the last 7 candles were bullish, 7 were bearish, and the value of the average profit and loss was the same. How to interpret the RSI? If the RSI oscillator is 70 or higher, it is assumed to be overbought and also indicates that prices do not have cumulative relative strength. This is a situation where prices have surged - more than the market expected, and the move is likely to subside. An RSI index of 30 or less, on the other hand, is taken as a signal that the instrument may have already sold out, and also indicates that prices have accumulated relative strength. In this case, it is a situation where prices have fallen more than the market would expect, and the movement may be losing strength. The RSI indicator oscillates around the level of 50 - it means that there is no trend in the market. Level 50 is the midline that separates the bullish and bearish territories of the indicator. Crossing levels 30, 50 and 70 gives signals to enter into a trade. Contrary to many opinions, the Forex RSI indicator is a leading indicator. Whether you use the RSI to determine strength, find reversal points, or trade breakouts, the RSI is a versatile weapon in the trader's hand. This helps the Trader to decide whether to follow the trend or not and monitor the trend reversal to change direction. Exponential Moving Average (EMA) The exponential moving average is an extremely helpful tool for identifying trends. The trend is found by calculating the average value based on the historical data of the asset. There are several types of moving averages. The most basic is the simple moving average (SMA), which treats all previous price values equally and calculates the average on their basis. On the other hand, EMA, or exponential moving average, gives more importance (weighting) to newer data and less to older values. Formula: EMA = Closing price x multiplier + EMA (previous day) x (1-multiplier) The exponential moving average is based on a weighted average whose weights are not changed linearly but, as the name implies, exponentially. This average assigns more weight to recent values than to older values. For example, if we count EMAs from the last 20 periods, then the price from the oldest period will be the least important when calculating the current average value. The exponential moving average helps us spot the trend, and using it properly can be a good source for taking short or long positions in the market. However, keep in mind that moving averages are indicators that rely on past data. Unlike the SMA, however, the EMA reacts faster to new data because more weights are assigned to the current data. To sum up, simply speaking EMA is; an indicator that follows a trend based on past prices calculated by selecting a specific period and dividing it by the number of periods helps to smooth out price behavior Moving averages are used not only to identify the direction of the market, but also to determine where to take a position. Source: investopedia.com,
The Market May Continue To Buy The Pound (GBP) This Week

Bank of England expects that the UK economy growth will remain negative until 1H24

Kenny Fisher Kenny Fisher 17.11.2022 18:45
The British pound is sharply lower on Thursday as the US dollar has rebounded against the major currencies. In the North American session, GBP/USD is trading at 1.1787, down 1.07%. We continue to see sharp swings from the pound in November. Autumn Statement emphasises austerity Jeremy Hunt’s Autumn Statement was much more in keeping with the difficult economic times than the ill-fated mini-budget back in September, which set off a financial crisis and emergency intervention from the Bank of England. The Finance Minister’s budget outlined major spending cuts and tax hikes and Hunt stated that the government and the BoE were working in “lockstep”.  The fiscal austerity in the new budget is a step in the right direction, but the pound nevertheless has taken a tumble today. Read next: Eurozone headline inflation reached a record high in October, The UK’s future prospects for future economic development, CHF is the second best performing currency for 2022| FXMAG.COM The Office for Budget Responsibility (OBR) forecast indicated that the UK is currently in a recession, which will see unemployment jump from 3.5% to 4.9%. The BoE’s outlook is even worse, with unemployment forecast to hit 6.5% and negative growth expected in the second half of this year, throughout 2023 and into the first half of 2024. GDP declined by 0.2% in the third quarter, and the headwinds look formidable for the UK economy and the British pound. The investor euphoria which sent the stock markets rallying after the soft inflation report has taken a pause, and the US dollar has rebounded. Fed policy members sought to dispel any thoughts of a Fed pivot, reminding the markets that the Fed was planning to raise rates higher than they had anticipated. The hawkish Fed speak may or may not have convinced investors to settle down, but a strong US retail sales report clearly did the job. The headline and core releases both posted strong gains of 1.3%, dampening sentiment that the Fed was turning dovish. US consumers continue to spend despite inflation and rising rates, an indication that the Fed can continue to raise rates and probably avoid a deep recession. Interest rates are expected to peak at 5% or slightly higher, which means that the Fed is highly likely to continue tightening into next year. GBP/USD Technical There is resistance at 1.1961 and 1.2030 GBP/USD has broken below support at 1.1896 and 1.1786. Below, there is support at 1.1660     This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound takes a dive, retail sales next - MarketPulseMarketPulse
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

ING expects Reserve Bank of New Zealand to hike the interest rate by 50bp as the bigger variant may be not proper amid current circumstances

ING Economics ING Economics 17.11.2022 21:11
We expect the Reserve Bank of New Zealand to hike by 50bp next week and signal a peak rate around 5.0%. The ongoing downturn in the housing market and worsening external conditions argue against a larger, 75bp move. We are not fully convinced the RBNZ will ultimately deliver all its projected hikes, but a dovish pivot is unlikely on the cards at this stage   Source: Shutterstock More tightening required As markets attempt to guess the timing of a dovish pivot by the Fed, another hawkish standout among developed central banks, the Reserve Bank of New Zealand, will announce monetary policy next week. At the October meeting, the RBNZ hiked rates by 50bp to 3.50%, and claimed that “monetary conditions needed to continue to tighten” until the Monetary Policy Committee is “confident there is sufficient restraint on spending to bring inflation back within its 1-3% per annum target range”.  In our view, another 50bp increase looks more likely Since the October meeting, domestic data for the third quarter have been released, and unmistakably argued in favour of additional tightening. Inflation (7.2% year-on-year) proved much more resilient than forecasted, unemployment remained low (3.3%) and wage growth accelerated (2.6% quarter-on-quarter). This has led markets to consider a more aggressive 75bp hike in November as an option: currently, the OIS curve embeds 63bp of tightening.  In our view, another 50bp increase looks more likely, especially when considering the ongoing correction in the housing market (more details below) and a challenging external environment: dairy prices, global demand, the Chinese economic outlook have all deteriorated lately.  Forward-looking message will be crucial A 50bp hike may be received as a slightly dovish surprise by markets, but we believe that a greater focus will be placed on the forward-looking policy message, in particular: a) any hints in the rate projections that we are close to the peak in rates; and b) other economic projections such as on inflation and house prices.  On point a): we expect a reiteration that monetary conditions need to be tightened further to bring down inflation. There should be a certain degree of acknowledgement that global and domestic conditions have started to deteriorate, but we doubt there is appetite within the MPC to deliver a dovish signal before having seen fourth quarter inflation and employment data.   RBNZ current rate projections are unrealistic Source: RBNZ   The trade-off the RBNZ is facing is not uncommon in the central bank world: signalling much more tightening to cap inflation expectations against delivering a more moderate and realistic rate path. At this stage, we feel the RBNZ may want to risk sacrificing a bit of credibility further down the road (should they underdeliver on hikes) for the sake of fighting inflation. If anything, the incentive to signal less tightening could be to keep mortgage rates capped, but they have not signalled excessive concerns on the housing market for now.   Our estimate is that the rate projections will largely align with market expectations for the RBNZ and the Fed, so showing a peak rate at around 5.00% (90bp higher than the 4.10% shown in the August forecasts). There is also a higher probability some rate cuts (possibly from late 2023) will be introduced in the projections.     Whether the RBNZ will effectively bring rates to 5.0%+ is another question. We are not fully convinced, as an expected acceleration in the house price contraction and further worsening of external conditions in the months ahead may force a dovish turn in early 2023 (next meetings are in February and April).  Housing market troubles to continue New Zealand’s house price index shows a -4.5% quarterly decline for price in October. The magnitude of this market downturn has now exceeded the worst quarter during the Global Financial Crisis period (-4.4% in August 2008). This is contributed by the rapid rise in mortgage rates, and the more stringent 40% deposit requirement.   We expect further deterioration to the housing outlook as lending activity continues to fall In RBNZ’s August statement, their projection shows a steeper and quicker decline of 15% from December 2021 to the trough, which is worse than the previous forecast in May. We expect further deterioration to the housing outlook as lending activity continues to fall and more borrowers face higher rates when re-mortgaging.   New Mortgage lending by borrower type (YoY%) Source: RBNZ   The supply side story is a bit better. Residential construction had remained strong and have finally past its peak. The decline in new dwelling consent is led by rising construction costs and limited capacity from a filled pipeline. However, due to supportive schemes like the KiwiBuild caps, this slowdown is much shallower than the one during and after the GFC.    Ultimately, current projections for the housing market are based upon the assumption that rate is peaking at 4.10% in April 2023. This would imply that the RBNZ only has 60bp worth of hikes to deliver in its tightening cycle – which looks quite unrealistic. If indeed the new projections show a peak rate around 5.0%+, then we suspect they will also need to display a steeper/longer downturn in the housing market. The speed of the house price correction will be crucial both for the pace of further hikes and for the timing/pace of rate cuts next year.   Market impact: NZD still mostly driven by external factors We don’t expect the impact on NZD to prove long-lived Given that markets are pricing in approximately a 50% probability of a 75bp hike, a 50bp may come as a dovish surprise. However, if this is accompanied by a hawkish rate path projection – i.e. peak rate around 5.0% – the overall message should remain quite hawkish. So we think the Kiwi dollar could rise after the announcement, even though we don’t expect the impact to prove long-lived, as external factors should continue to prevail.     We have recently revised our NZD/USD forecast profile (more details in our 2023 FX Outlook), and see the pair capped in 4Q22 and 1Q23 (we target 0.60), before a gradual rebound throughout 2023 (0.64 in 4Q23). Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

The EUR/USD Pair Could Bring Back The Bulls Into Action Again

InstaForex Analysis InstaForex Analysis 18.11.2022 08:00
Technical outlook: EURUSD dropped through the 1.0305 lows on Thursday before finding support. The single currency pair is seen to be trading close to 1.0370 at this point in writing as a probability remains for yet another low towards the 1.0250-80 mark before the rally could resume. A break above 1.0405 from here would confirm that the euro is heading north again. EURUSD might still have some upside momentum left within its last-leg rally, which began from 0.9740 earlier. The intraday support zone is seen towards the 1.0250-80 area. If prices manage to drop there, the bulls will be looking to come back in control. Immediate price support on the daily chart is seen at 0.9740 and only a break below turns the structure bearish. EURUSD is working on its recent upswing between 0.9740 and 1,0480 as discussed earlier. Furthermore, the past resistance-turned-support zone is seen around 1.0000. A drop there remains possible and could bring back the bulls into action again. The overall structure remains bearish with one more shallow high left around the 1.0600 mark. Trading idea: A potential rally towards 1.0600 from 1.0280 Good luck! Relevance up to 02:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301515
The US Dollar Index Is Producing A Reasonable Bullish Divergence

The US Dollar (USD) Price May Resume Higher Again

InstaForex Analysis InstaForex Analysis 18.11.2022 08:01
Technical outlook: The US dollar index rose through the 107.00 level intraday on Thursday before finding resistance and pulling back. The index is seen to be trading close to 106.20 at this point in writing as a probability remains for yet another low towards the 104.00 level. The bulls are looking poised to come back in control thereafter and resume the larger-degree trend higher. The US dollar index looks to be still progressing into its Wave C lower towards 104.00. Please note the last leg resumed lower from the 112.67 highs after hitting the back side of the past support trend line as seen on the 4H chart here. Also, note that the Fibonacci 1.271 extension is pointing towards 103.80, which could be the next potential downside target. The US dollar index is facing immediate price resistance at 110.60, followed by 112.67; while support is seen towards 104.30 as seen on the chart presented here. Please note that the entire structure from the 114.67 highs still looks corrective with one more potential low left to be printed close to the 104.00 mark before the rally could resume. Trading idea: Potential drop to 104.00 and then the price resumes higher again Good luck!   Relevance up to 02:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301517
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

Declines At The Close In The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 18.11.2022 08:03
At the close in the New York Stock Exchange, the Dow Jones fell 0.02%, the S&P 500 fell 0.31%, and the NASDAQ Composite fell 0.35%. Dow Jones The leading performer among the components of the Dow Jones index today was Cisco Systems Inc, which gained 2.20 points or 4.96% to close at 46.59. Merck & Company Inc rose 2.38 points or 2.38% to close at 102.31. Apple Inc rose 1.93 points or 1.30% to close at 150.72. The least gainers were Salesforce Inc, which shed 5.43 points or 3.50% to end the session at 149.69. The Walt Disney Company rose 2.66% or 2.50 points to close at 91.45 while American Express Company shed 1.27% or 1.93 points to close at 150. .64. S&P 500  Among the S&P 500 index components gainers in today's trading were Bath & Body Works Inc., which rose 25.18% to 38.97, Gap Inc, which gained 5.56% to close at 12.71., as well as shares of Qorvo Inc, which rose 5.25% to close the session at 97.70. The least gainers were West Pharmaceutical Services Inc, which shed 7.57% to close at 221.93. Shares of Norwegian Cruise Line Holdings Ltd shed 6.77% to end the session at 16.40. Paycom Soft quotes fell 5.73% to 318.34. NASDAQ  The leading gainers among the components of the NASDAQ Composite in today's trading were Ardelyx Inc, which rose 40.98% to hit 1.72, CytomX Therapeutics Inc, which gained 32.23% to close at 1.60, and shares of Cuentas Inc, which rose 28.00% to end the session at 0.32. The least gainers were shares of Inotiv Inc, which fell 56.97% to close at 6.82. Shares of Golden Sun Education Group Ltd lost 46.28% and closed the session at 2.31. Quotes Singularity Future Technology Ltd fell in price by 45.93% to 1.13. Numbers On the New York Stock Exchange, the number of securities that fell in price (1996) exceeded the number of those that closed in positive territory (1109), and the quotes of 147 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,280 companies fell in price, 1,467 rose, and 258 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.75% to 23.93. Gold Gold futures for December delivery lost 0.70%, or 12.40, to hit $1.00 a troy ounce. In other commodities, WTI crude for December delivery dropped 4.23%, or 3.62, to $81.97 a barrel. Futures for Brent crude for January delivery fell 3.08%, or 2.86, to $90.00 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.23% to 1.04, while USD/JPY rose 0.46% to hit 140.18. Futures on the USD index rose by 0.37% to 106.55. Relevance up to 03:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/301521
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

AUD/USD: The Probability Of Reaching The Target Support Will Raise

InstaForex Analysis InstaForex Analysis 18.11.2022 08:08
The Australian dollar closed Thursday down 50 points. The day's low did not reach the target support at 0.6595 for two reasons: the price did not settle under 0.6700, and the technical instruments on the lower four-hour chart managed to contain the bears' attack. In the current situation, the price is gathering strength at the level of 0.6700. If the price suddenly decides to follow the stop-losses of the bears, who are gradually building up positions against the aussie under the influence of declining US government bond yields, then after breaking the November 15 high at 0.6799, it could reach the 0.6871 target (August 5 low). Settling below 0.6700 will certainly significantly raise the probability of reaching the target support at 0.6595. The price received effective support from the MACD line on the four-hour chart, after which it returned above the balance indicator line (red moving line). But Marlin decided to firmly settle in the declining area, so we are waiting for another attempt to overcome the MACD line as a development of the situation according to the main scenario. Relevance up to 03:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327453
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The Development Of Growth Of Cable Market (GBP/USD) Is Still Difficult

InstaForex Analysis InstaForex Analysis 18.11.2022 08:12
Yesterday, the British pound made the first attempt to turn around from the resistance of 1.1940, in fact, it had an idea to make a correction from the entire 16-figure growth since September 26. The task is difficult, so the price has not yet decided to attack the support at 1.1737. The price divergence with the Marlin Oscillator is gaining momentum. Such an attack will probably take place next week. The immediate task is for the price to not go up after testing this support. UK retail sales data will be released today – forecast for October is 0.3% after the September collapse of 1.4%. The forecast for sales of secondary housing in the US in October is 4.38 million against 4.71 million a month earlier, so in the end we do not expect active dollar action in the fight against the pound today. The price received support from the balance indicator line on the H4 chart. The Marlin Oscillator is in the downward trend area. Therefore, the development of growth is still difficult. At the moment, the main scenario for the pound is a sideways movement in the range of 1.1737-1.1940. Relevance up to 03:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327455
Bitcoin price may be stealing the show soon. We could say that this week Bank of Japan decision draws more attention than usually

The USD/JPY Pair May Demonstrate A More Confident Growth

InstaForex Analysis InstaForex Analysis 18.11.2022 08:18
The dollar-yen pair earlier this week updated a three-month price low, reaching 137.70. However, the USD/JPY bears failed to settle in the area of the 137th figure - dollar bulls stopped the downward momentum and turned the pair 180 degrees. In general, the trajectory of the pair's movement correlates with the trajectory of the US dollar index. Once again, we are convinced that the yen is not an independent player against the greenback. The Japanese currency certainly has its trump card, but it rather serves as a "stop tap". We are talking about a currency intervention, the risk of which increases along with the USD/JPY rate. In this context, we can say that the Japanese government controls the upper limit of the price range within which the pair is traded. According to most analysts, this limit is in the area of the 150.00 mark: exceeding this target is fraught with consequences. As for the lower limit of the conditional price range, everything depends on the "well-being" of the US currency. USD/JPY bears are forced to follow the greenback, which determines the end point of any downward surge. The yen has no arguments of its own to strengthen – primarily due to the divergence of the Federal Reserve and the Bank of Japan rates. The events of the last days serve as evidence of this. They eloquently illustrated the stated disposition, the essence of which boils down to an uncomplicated conclusion: the downtrend ends exactly where the dollar recovery begins. As you know, the US currency significantly sank throughout the market after the release of the latest data on the growth of inflation in the United States. The market started talking about the fact that the Fed will slow down the pace of monetary policy tightening at the next meeting, which will be held in December. A little later, these assumptions were confirmed by many representatives of the Fed: according to them, the central bank can afford to reduce the speed, while maintaining the final goal at the same level (that is, above the 5.0% mark). At first, traders mostly focused their attention directly on the fact of slowing down the pace of tightening of the monetary policy. But then they "listened" to the signals from the Fed representatives, who made it clear that no one was going to curtail the hawkish course – only the speed of achieving the goal slows down. In particular, Christopher Waller, a member of the Board of Governors, said that the markets should now pay attention to the "end point" of the rate hike, and not to the pace of its achievement. At the same time, he noted that the end point is probably "still very far away." Some of his colleagues also stated that, firstly, inflation in the United States is still at too high a level; secondly, it is impossible to make any long-term organizational conclusions based on only one report. Such messages eased the pressure on the dollar, and, accordingly, cooled the ardor of bears of the USD/JPY pair. Turning to the upside, the pair gradually began to gain momentum, rising by 250 points in two days. At the same time, traders ignore Japanese statistics, even when it comes to the inflation report. Key data on the growth of inflation in Japan was published during the Asian session on Friday. The report reflected a record growth of key indicators. For example, the overall consumer price index rose by 3.7% in October, which is the strongest growth rate of the indicator since 1982. The core CPI, which does not include fresh food, but includes energy prices (petroleum products), also updated the 40-year record. The consumer price index, excluding food and energy prices, jumped 2.5% year-on-year in October. All components of the above report came out in the green zone, significantly exceeding the forecast levels. It is worth noting that inflation has been exceeding the BOJ's 2% target for seven months, but at the same time BOJ Governor Haruhiko Kuroda continues to "hold the line", maintaining a soft monetary policy. This, in fact, explains such a phlegmatic reaction of USD/JPY traders to the report published today. Market participants reasonably doubt that Kuroda will toughen his rhetoric in response to the published figures. Thus, the fate of the USD/JPY downward trend depends solely on the behavior of the US currency, which is gradually beginning to "come to its senses". After all, even taking into account the slowdown in the rate hike, the Fed continues to act as an ally of the greenback, and even more so in tandem with another, which cannot count on the support of the BOJ. In my opinion, the rhetoric of the Fed representatives will only tighten ahead of the December meeting (at least in the context of determining the upper limit of the current cycle), while Kuroda will once again ignore the inflation report, declaring the preservation of the accommodative policy. All this suggests that the USD/JPY pair may demonstrate a more confident growth in the near future – at least to the Tenkan-sen line on the daily chart, which corresponds to the 142.40 mark. If we talk about the medium term, the main target here is 145.50: at this price point, the upper line of the Bollinger Bands indicator coincides with the upper limit of the Kumo cloud on the D1 timeframe. Relevance up to 02:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327451
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

Analysis Of Future Movement Of The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 18.11.2022 08:14
Despite the euro's strong desire to go down yesterday, it was not possible to overcome the support of 1.0360, the day closed higher. This morning the price is at the level, waiting for external incentives for further action. Yesterday, such incentives were the fall of oil by 3.76% and the decline of gold by 0.79%. The daily Marlin Oscillator is declining smoothly, while there are no signs that the price may abandon attempts to break through 1.0360. If this happens, the 1.0205 target will become available. On the four-hour chart, the price is supported by the balance indicator line (red moving line), but, nevertheless, the Marlin Oscillator has been in the negative area for a long time, so the price is unlikely to stop trying to overcome the supports. On the way to 1.0205, there is a MACD line (1.0260). It is also an important support to overcome. If the price fails to overcome it, then it could return to 1.0470 or even surpass the high on November 15 to form a divergence. Relevance up to 03:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327457
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Euro To US Dollar (EUR/USD) Pair Maintains An Upward Trend

InstaForex Analysis InstaForex Analysis 18.11.2022 08:30
30M chart of the EUR/USD pair The EUR/USD currency pair was trading with a slight downward bias on Thursday, just like on Wednesday. We obviously did not count on such a strong correction. The ascending trend line is still relevant, and the price is well above it. Therefore, from a technical point of view, quotes can rise at almost any moment. From a macroeconomic point of view, there is practically nothing to analyze this week. In the European Union, inflation for October was released in the second assessment. But this second valuation was only 0.1% different from the first valuation, which the market had worked out long ago. Therefore, there was no response to this report. Retail sales and industrial production were released in the US, which in themselves are not extremely significant. In addition, one of them turned out to be worse than forecasts, and the second one was better, so they simply offset each other. We repeat: we believe that the pair's growth in the last two weeks is illogical and we are waiting for a more powerful downward correction. 5M chart of the EUR/USD pair The pair's movement on the 5-minute chart was just terrible, despite the downward bias. It's not even about the levels near which the signals were formed, the fact is that the euro could not decide which way to move during the European trading session, and the total volatility of the day was 100 points, which seems to be quite a lot, but Thursday's movement can hardly be called a trend even within the day. The first buy signal turned out to be false, and even Stop Loss could not be placed at breakeven. The long position was closed at a loss. The second sell signal was formed when the price was already near the next level of 1.0354. The rebound from the level of 1.0354 is the same. It was possible to work out the fourth, fifth and sixth signals, which spoke about the same thing - about a possible fall in quotes. After each of them, the pair went down 15, 26 and 37 points. Therefore, there could no longer be a loss on these transactions (Stop Loss at breakeven when passing 15 points in the right direction), but novice traders also hardly managed to make money. Therefore, the day ended, most likely, in a small loss. There is nothing wrong with this, since the newcomers managed to make good money on the upward rally of the euro earlier. How to trade on Friday: The pair maintains an upward trend and is quite far from the trend line on the 30-minute chart. We still expect a serious correction, but it will be possible to speak about a downward trend when the pair overcomes the ascending trend line. On the 5-minute TF it is recommended to trade at the levels 1.0123, 1.0156, 1.0221, 1.0269-1.0277, 1.0354, 1.0383, 1.0433, 1.0465, 1.0483. When passing 15 points in the right direction, you should set Stop Loss to breakeven. European Central bank President Christine Lagarde will deliver a speech in the European Union. The calendar of macroeconomic events is empty in America. However, Lagarde's speech may be enough for traders to start trading more in a trend. Everything will depend on what Lagarde says. Basic rules of the trading system: 1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal. 2) If two or more positions were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored. 3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading. 4) Trade positions are opened in the time period between the beginning of the European session and until the middle of the US one, when all positions must be closed manually. 5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance. On the chart: Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines). Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.     Relevance up to 04:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327459
The Pound Is Now Openly Enjoying A Favorable Moment

The GBP/USD Pair Is Expected A Significant Downtrend This Week

InstaForex Analysis InstaForex Analysis 18.11.2022 08:32
30M chart of the GBP/USD pair Yesterday, the GBP/USD pair finally corrected as we expected. In many ways, the pound's fall was provoked by the speech of Jeremy Hunt, the British Chancellor of the Exchequer, who presented his financial plan, which provides for a tax increase instead of the cut that Liz Truss wanted to implement. We cannot unequivocally link the pound's fall with Hunt's speech, since the euro was falling at the same time, but the probability of this is still very high. However, the pound continues to be above the trend line, so the upward trend continues. From a technical point of view, the pound may continue to rise, but from a fundamental point of view, it will be even less logical than the pound's growth over the past two weeks. We believe that there were certain reasons to buy the pound from the market, but they were not so strong that the pair rose by 750 points, and the British inflation report, which could have provoked the pound's growth, did not cause such a reaction from the market. 5M chart of the GBP/USD pair Quite a lot of signals were formed on the 5-minute chart, but the movement was not the best. Let's try to figure out how to trade today. The first buy signal was formed at night near the 1.1863-1.1877 area, from which the price bounced. At the opening of the European trading session, the pair moved away from the formation point by only a few points, so a long position could be opened. Subsequently, the pair went up 70 points, but did not reach the nearest target level. The 1.1957 level is a new one that formed instead of 1.1967. Thus, beginners could get a small profit on this transaction if they were manually closed. The next two signals formed again around 1.1863 -1.1877. First, the pair overcame this area, and therefore bounced from it from below. In the first case, 53 points were passed, but here, too, most likely, Stop Loss worked at breakeven. In the second case, the price reached the target level of 1.1793 and even overcame it, so the position should have been closed with a reverse consolidation above this level. Profit at 40 points. Losses on the euro/dollar pair managed to be covered and we even managed to make some money on Thursday. How to trade on Friday: The GBP/USD pair maintains an upward trend on the 30-minute time chart, which continues to be supported by an ascending trend line. Although we still don't see a good reason to show such strong growth, the market can move regardless of our opinion. So we definitely have an upward trend at this time, but we still expect a significant downtrend this week. It has already started after the bounce from 1.2008, the question is how strong will it be in reality? On the 5-minute TF it is recommended to trade at the levels of 1.1550, 1.1608, 1.1648, 1.1716, 1.1793, 1.1863-1.1877, 1.1967, 1.1994, 1.2079. When the price passes after opening a position in the right direction for 20 points, Stop Loss should be set to breakeven. The UK will publish a report on retail sales, but nothing in the US. A slight reaction may follow the only report of the day... Basic rules of the trading system: 1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal. 2) If two or more positions were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored. 3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading. 4) Trade positions are opened in the time period between the beginning of the European session and until the middle of the US one, when all positions must be closed manually. 5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance. On the chart: Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines). Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time. Relevance up to 05:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327461
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The GBP/USD Pair Is Not Expected A Strong Market Reaction Today

InstaForex Analysis InstaForex Analysis 18.11.2022 08:35
Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair showed two good movements on Thursday. The pair began a rather sharp fall in the middle of the European trading session, which, from our point of view, was provoked by the presentation of the budget plan for the next financial year by the UK Secretary of the Treasury Jeremy Hunt (which we wrote about in more detail in the fundamental review of the pound), but in the late afternoon there was already an upward movement and at the moment the pair has returned to its original positions. Therefore, formally, it corrected this week, as we expected, but the correction turned out to be very weak, we expected and still expect a stronger fall in quotes. There were no important reports and events of a macroeconomic nature in the UK yesterday. Reports on the construction market were published in the US, as well as on applications for benefits by the American population. Both reports rarely cause at least some market reaction. Therefore, we do not associate yesterday's movements with macroeconomics. The ascending trend line remains relevant, so from a technical point of view, further growth can be expected. And no fundamental and macroeconomic reports. Trading signals on the 5-minute chart were not the best on Thursday, but still not as bad as the euro. First, the price bounced off the level of 1.1874 and went up 55 points. Therefore, there could not be a loss on a long position (Stop Loss at breakeven). Then the price formed a sell signal below the Kijun-sen line, after which it managed to reach the target level of 1.1760. Traders managed to get about 35 pips of profit on this trade. There were two rebounds from the level of 1.1760. After the first one, the price went up 40 points, but did not reach the critical line - Stop Loss at breakeven. The second rebound was formed too late, it should not have been worked out. As a result, the day ended with a small profit. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group closed 8,500 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position indicator has been slowly rising in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 79,000 shorts and 34,000 longs. The difference, as we can see, is still very big. The euro cannot rise even though major players are bullish, and the pound will suddenly be able to grow in a bearish mood? As for the total number of open longs and shorts, here the bulls have an advantage of 21,000. But, as we can see, this indicator also does not help the pound too much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair began a long-awaited, but so far very weak, correction on the one-hour chart. We consider the pound's growth in recent weeks somewhat unfounded, and this week the pound began to correct only on Thursday. However, we expect it to continue falling. On Friday, the pair may trade at the following levels: 1.1486, 1.1645, 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259. The Senkou Span B (1.1500) and Kijun-sen (1.1867) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. The UK will publish a report on retail sales, which is far from the most important, and the calendar is empty in the US. Thus, we do not expect a strong market reaction today. Most likely, it will again trade on technique. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 06:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327471
The USD/JPY Price Reversed From The Lower Limit

Interventions By The Bank Of Japan And Weakening Dollar (USD) Negatively Affects The USD/JPY Pair

InstaForex Analysis InstaForex Analysis 18.11.2022 08:47
After a prolonged decline in the pair, caused by the large-scale interventions by the Bank of Japan, as well as weakening of dollar amid falling inflation, USD/JPY moved into a phase of horizontal consolidation, with a clear upper limit at 140.8. In this situation, sellers have no choice but to set their stop orders beyond the level. So, considering that there is a three-wave pattern (ABC), where wave A represents yesterday's bullish pressure, traders can enter the market by buying up to the 50% retracement level. Stop loss could be placed at 138.5, then exit the market by taking profit on the breakdown of 140.8. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks! Relevance up to 08:00 2022-11-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327489
Unraveling UK Inflation: The Bank of England's Next Move

The Influence Of The UK Autumn Statement On The Performance Of Pound (GBP)

Craig Erlam Craig Erlam 11.11.2022 09:16
OANDA Senior Market Analyst Craig Erlam discusses how the pound has performed against the dollar recently and what impact the UK Autumn Statement had. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Forex: Most NOK Gains May Be Channelled Against The Dollar

A Recovery In Global Sentiment Should Offer Support To Norwegian Krone (NOK)

TeleTrade Comments TeleTrade Comments 18.11.2022 09:25
The Norwegian Krone is not a currency for the faint of heart. Economists at ING believe that NOK could benefit from its attractive commodity exposure but may face a big downside in a risk-off scenario.  NOK may continue to struggle with the high volatility environment “A recovery in global sentiment should offer support to NOK in the second half of next year, but restoring market confidence in a very high-beta currency is no easy feat.” “If indeed markets enjoy a calmer environment in 2023 and Norges Bank favours a stronger currency, then NOK is left with considerable room to benefit from a still strong energy market picture for Norway.” “We see EURNOK at 10.50 in the fourth quarter of 2023, but NOK hiccups along the way are highly likely.”  
Unraveling UK Inflation: The Bank of England's Next Move

The Influence Of The UK Autumn Statement On The Pound's (GBP) Situation

Craig Erlam Craig Erlam 18.11.2022 09:22
OANDA Senior Market Analyst Craig Erlam discusses how the pound has performed against the dollar recently and what impact the UK Autumn Statement had.   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Navigating Financial Markets: Insights on Central Bank Decisions and Currency Quotes

Economic Pessimism Surrounding Turkiye Could Gain Major Attention

TeleTrade Comments TeleTrade Comments 18.11.2022 09:34
USDTRY picks up bids to 18.61 during the initial hour of Friday’s European session, on the way to snapping a two-week downtrend by the press time. It’s worth noting, however, that the options market data from Reuters challenge the Turkish Lira pair’s bullish performance. That said, a one-month risk reversal (RR) ratio, a gauge of call options versus puts options, portrays the first daily gain in three while flashing 0.05 figures for Thursday. The weekly RR prints, however, drop for the second consecutive week to -0.560. While searching for the underlying reason, the recent hawkish comments from the Federal Reserve officials and economic pessimism surrounding Turkiye could gain major attention. Also read: Türkiye: Exceptionally dovish monetary policy to persist – Standard Chartered  
The AUD/USD Pair’s Downside Remains Off The Table

The AUD/USD Pair's Outlook In The Next Few Weeks

TeleTrade Comments TeleTrade Comments 18.11.2022 09:36
According to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, AUDUSD now looks side lined between 0.6590 and 0.6800 in the next few weeks. Key Quotes 24-hour view: “We expected AUD to ‘trade sideways between 0.6695 and 0.6785’ yesterday. Our view was incorrect as AUD dropped to 0.6635 before rebounding quickly to close at 0.6690 (-0.76%). Despite the decline, downward momentum has not improved much. That said, there is room for AUD to retest the 0.6635 level before the risk of a more sustained rebound increases. The next support at 0.6600 is not expected to come into view. Resistance is at 0.6715, followed by 0.6750.” Next 1-3 weeks: “After AUD soared to a high of 0.6798, we highlighted on Wednesday (16 Nov, spot at 0.6750) that while upward momentum has not improved much, there is room for AUD to advance further to 0.6820. Yesterday, AUD dropped below our ‘strong support’ level at 0.6670. The break of the ‘strong support’ indicates that AUD is not advancing further. AUD appears to have moved into a consolidation phase and is likely to trade between 0.6590 and 0.6800 for the time being.”
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

FX: G10 Currencies Should Face Less Trend And More Volatility

ING Economics ING Economics 18.11.2022 09:47
In our 2023 FX Outlook, we argued that G10 currencies should face less trend and more volatility in 2023. We saw an example this week, as the fading bear-dollar trend did not prevent some wide swings in risk-sensitive currencies (like NOK and SEK). In the UK, the pound survived the Autumn Statement, but downside risks persist in GBP/USD In this article USD: Bearish sentiment cooling off EUR: Lagarde's speech in focus GBP: Most painful fiscal measures delayed NOK: Strong domestic story may not matter USD: Bearish sentiment cooling off As recently discussed in our 2023 FX Outlook, we are quite sceptical of a clean bear dollar trend from the current levels. This week’s moves in the FX market may have offered a glimpse of what we expect to be the main theme in G10 FX next year: less trend, more volatility. The dollar has stabilised after the big correction, but regional stories triggered significant swings in some crosses. Scandinavian currencies fell by around 2% this week, hit by equity volatility and geopolitical tensions, while NZD and GBP have appreciated on some domestic optimism. In New Zealand, next week’s central bank meeting will be a key risk event: here is our preview. We think this consolidation phase in the dollar may extend for a little longer, before a re-appreciation of the greenback into the end of the year. Indeed, markets will remain highly sensitive to Fed speakers: today, only Susan Collins is scheduled to speak, but we have a number of other members lined up for next week. FOMC minutes will also be released on Wednesday. So far, post-CPI comments have indicated some lingering caution on the inflation battle as most Fed members tried to curb the market’s enthusiasm about an imminent dovish pivot. The future market has now fully priced back in a 5.00% peak rate in the first half of 2023. The US calendar is rather light today and only includes existing home sales and the Leading Index. With the dovish pivot narrative softening, we expect some re-appreciation of the dollar in the near term, but that is a trend that could only start from next week or the one after. DXY may stay around 106/107 today.    Francesco Pesole EUR: Lagarde's speech in focus ECB President Christine Lagarde will deliver a keynote speech at a banking conference this morning. Two more ECB speakers are on the list today: Joachim Nagel and Klaas Knot, both hawkish voices in the Governing Council. If the Fed remains the key driver for the dollar, the ECB continues to have a rather marginal role for the euro, which instead remains primarily tied to global risk sentiment and geopolitical/energy dynamics. EUR/USD may stay in the 1.0350-1.0400 trading range into the weekend and while we don’t exclude another short-term mini-rally, we think that the macro picture continues to point to sub-parity levels in the coming months. Francesco Pesole GBP: Most painful fiscal measures delayed The pound survived the much-feared Autumn Statement by Chancellor Jeremy Hunt yesterday. The build-up to the statement seemed to signal more restrictive measures on the economy, but Hunt counted on a calmer market backdrop and – as discussed in detail by our economist – delayed some of the most painful measures. Ultimately, the impact on next year's growth should not prove huge, especially compared to expectations. The tax hike will only affect high incomes and energy companies, and the National Insurance cut by the previous government has not been reversed. The most relevant change was the increase in the energy bill guarantee from £2,500 to £3,000 from April 2023, which should generate some drag on consumers. That is only marginally more generous than the average household energy bill under current wholesale prices (which we estimate at around £3,200). The risk is obviously that wholesale prices spike again, meaning a higher cost for the energy support package. We think it is too early to call for a prolonged stabilisation in the gilt market, and our debt team notes that there is still a lot of extra supply for private investors to absorb. We continue to see downside risks for GBP/USD as the dollar may start to recover into year-end, and target sub-1.15 levels in the near term. However, we forecast some outperformance in EUR/GBP (primarily due to EUR weakness), which could rise to 0.89 by year-end. Francesco Pesole NOK: Strong domestic story may not matter Norwegian GDP data for the third quarter surprised on the upside this morning, showing a rather strong 1.5% quarter-on-quarter growth. This is a testament to how the domestic story should remain largely supportive of NOK, also into the new year. Whether this will ultimately feed into a stronger krone is another question, and mostly depends on whether markets will prove calm enough to allow fundamentals to play a role. The last week clearly showed that the road to a recovery in NOK is going to prove quite uneven, as the low-liquidity krone should continue to face large swings. We really think volatility will be the name of the game for EUR/NOK next year, even though our base-case scenario is downward-sloping in 2023. In the short run, a return to 10.60+ is a tangible possibility. Francesco Pesole TagsNOK FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

UK Retail Sales Offer Support To The GBP/JPY Cross

TeleTrade Comments TeleTrade Comments 18.11.2022 10:28
GBPJPY struggles to preserve its modest gains to the weekly high and retreats below mid-166.00s. Stronger domestic inflation figures, the cautious mood underpin the safe-haven JPY and cap gains. A bleak outlook for the UK economy overshadows upbeat UK Retail Sales and acts as a headwind. The GBPJPY cross surrenders a major part of its intraday gains to the weekly high and retreats below mid-166.00s during the early European session on Friday. A combination of factors provides a modest lift to the Japanese Yen, which, in turn, acts as a headwind for the GBPJPY cross. Data released on Friday showed that Japan’s core consumer inflation (excluding volatile fresh food prices) accelerated to the highest level in 40 years and rose 3.6% YoY in October. This, along with the cautious mood, is seen driving some haven flows towards the JPY. That said, the Bank of Japan's dovish stance keeps a lid on any meaningful upside for the JPY and helps limit the downside for the GBPJPY cross. In fact, BoJ Governor Haruhiko Kuroda reiterated on Friday that the central bank will stick to its monetary easing to support the economy. In contrast, the Bank of England is expected to continue raising rates to combat stubbornly high inflation. The bets were reaffirmed by Wednesday's release of hotter-than-expected UK consumer inflation figures, which showed that the headline CPI accelerated to a 41-year high in October. Furthermore, BoE Governor Andrew Bailey said on Wednesday that Britain's very tight labour market was a key reason why further interest rate increases were likely. This, along with mostly upbeat UK monthly Retail Sales figures for October, offer support to the GBPJPY cross. That said, a bleak outlook for the UK economy is holding back bullish traders from placing aggressive bets around the GBPJPY cross. After processing Chancellor of the Exchequer Jeremy Hunt's new figures in the Autumn Statement, the UK Office for Budget Responsibility (OBR) has published new forecasts that predict UK GDP to shrink by 1.4% next year, as opposed to the 1.8% growth in its previous foercast, in March. The mixed fundamental backdrop warrants caution before positioning for an extension of the recent bounce from the 163.00 mark, or the monthly low touched last Friday. Traders now look to speeches by BoE's external MPC members - Catherine Mann and Jonathan Haskel - for some impetus. Nevertheless, the GBPJPY cross remains on track to register its first weekly gains in the previous three.
The NZD/USD Pair Will Have The Potential To Rally Upwards

The View Of Economists On The NZD/USD Pair's Situation

TeleTrade Comments TeleTrade Comments 18.11.2022 10:45
NZDUSD briefly edged above 0.62 this week. In the view of economists at ANZ Bank, the Kiwi has already seen the lows. USD’s safe haven premium to unwind  “While we are a touch cautious that US interest rates have gotten ahead of themselves, it is not just market expectations that the US policy cycle may be nearing a turn that is weighing on the USD.”  “We have also upgraded our China growth outlook (which should be good for commodities), and expect some of the USD’s safe haven premium to unwind following the Biden-Xi meeting in Bali, and as Europe copes with energy issues.” “That all makes us more comfortable believing that we have likely seen the lows in the NZD.”  
The Commodities Feed: First US crude draw this year

Saxo Bank Podcast: Heavy Crude Oil Market, The US And German Equity Markets And More

Saxo Bank Saxo Bank 18.11.2022 11:04
Summary:  Today we look through key markets for the technical lay of the land, from the US and German equity markets to gold, US yields. We also note a very heavy crude oil market, with cycle support possibly coming into play in the days ahead. Elsewhere, we dive into some examples of the enormous rise in options trading and note the background risk this brings to the market, regardless of whether today's massive options expiry in the US on over $2 trillion in underlying assets proves a non-event. Today's pod features Saxo Technical Strategist Kim Cramer Larsson, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-nov-18-2022-18112022
Inflation In Japan Continues To Show An Uptrend, The USD/JPY Pair Is Going Down

Japan: Core CPI inflation soars 3.6% exceeding market expectations. Even if this value is not odd-looking amid current international "standards", still, it's the highest in 40 years

Kenny Fisher Kenny Fisher 18.11.2022 11:49
The Japanese yen has edged higher on Friday and is trading at 139.90 in the European session. Japan’s Core CPI beats forecast Inflation continues to creep up in Japan. Core CPI accelerated to 3.6% in October, up from 3.0% in September and edging above the consensus of 3.5%. These levels pale in comparison to what we’re seeing in the US, the UK and elsewhere, but Japan hasn’t seen these levels of inflation in 40 years. The country has a deflationary mindset, which leads firms to absorb higher costs for fear of losing customers. However, as inflation continues to move higher, that trend is changing and consumers are feeling the pain of higher prices. Read next: High Inflation Print In Japan | Most Fed Members Remain Relatively Hawkish| FXMAG.COM Despite rising inflation and a weak yen, the Bank of Japan is resolute in maintaining its ultra-loose policy in order to support the weak economy. The BoJ has been an outlier as it has capped interest rates while the global trend has been to raise rates, arguing that cost-push inflation is only temporary. BoJ Governor Kuroda has said that inflation should peak after hitting 3%. Kuroda might want to consult with Jerome Powell or Christine Lagarde about making assumptions about inflation peaks, as they found out to their chagrin that inflation was much stickier than they had anticipated. Fed continues tightening talk Ever since the last US inflation report sent the equity markets soaring and the US dollar sliding, the Fed has circled the wagons and telegraphed a hawkish message to the markets. The latest salvo came from Fed member Bullard, who urged the Fed to raise rates to 5%-5.25% at a minimum. Bullard also presented a hawkish scenario in which the funds rate would climb all the way to 7%, a message investors clearly didn’t want to hear. Retail sales and unemployment claims were better than expected, another indication that the US economy remains resilient handle further rate hikes. The Fed’s coordinated message and the solid data have quelled the stock market rally and boosted the US dollar. USD/JPY Technical USD/JPY is testing support at 139.95. Below, there is support at 138.09 There is resistance at 141.01 and 142.87 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY calm as inflation rises higher - MarketPulseMarketPulse
Forex: What to expect from British pound against US dollar - January 17th

UK: retail sales print turned out to be a propeller for pound sterling

Kenny Fisher Kenny Fisher 18.11.2022 13:30
The British pound has pushed above the 1.19 line on Friday. GBP/USD is currently trading at 1.1924, up 0.49%. Retail sales bounce back Retail sales showed some life in October, posting a gain of 0.6% MoM. This was a strong rebound from the -1.5% reading in September and above the consensus of 0.0%. The gain is welcome news and has provided the pound with a boost today. Still, consumer spending has a long road to recovery, as retail sales came in at -6.1% YoY. This beat the September figure of -6.8% and the forecast of -6.5%, but the struggling UK economy will need a sharp turnaround in consumer spending, a key driver of economic growth. Consumer confidence remains in deep-freeze but improved slightly in October to -44, up from -49 in September. Read next: Japan: Core CPI inflation soars 3.6% exceeding market expectations. Even if this value is not odd-looking amid current international "standards", still, it's the highest in 40 years| FXMAG.COM With the UK economy in a recession, the government’s bleak Autumn Statement was no surprise. Finance Minister Hunt announced a mix of tax hikes and spending cuts. There wasn’t much for Britons to cheer about in the austerity budget, but perhaps there is a sense of relief that it is a step in the direction to restore fiscal responsibility, after the shenanigans of Liz Truss and her mini-budget caused a financial crisis. The BoE is projecting that unemployment will rise to 6.5% and the country will experience negative growth in the second half of this year, throughout 2023 and into the first half of 2024. GDP declined by 0.2% in the third quarter, and the headwinds look formidable for the UK economy and the British pound. The Federal Reserve has kept up its hawkish talk in an effort to dampen investor exuberance after the last inflation report fueled speculation that the Fed planned a pivot in policy. Fed member Bullard weighed in this week, urging the Fed to raise rates to at least 5%-5.25%. Bullard went even further, presenting a scenario in which the funds rate would climb as high as 7%. The message helped dampen risk appetite, sending equity markets lower and the US dollar higher. GBP/USD Technical There is resistance at 1.1961 and 1.2030 GBP/USD has broken below support at 1.1896 and 1.1786. Below, there is support at 1.1660 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound rises as retail sales rebound - MarketPulseMarketPulse
Further Upward Price Movement Of The AUD/USD Pair Is Expected

Technical Analysis Of The AUD/USD Pair By Jurij Tolin

InstaForex Analysis InstaForex Analysis 18.11.2022 13:39
As of writing, AUD/USD is trading near 0.6710, within short-term bullish zone, above near-term support levels 0.6641 (200 EMA on the 1-hour chart), 0.6531 (200 EMA on the 4-hour chart). At the same time, the pair remains in the zone of long-term bearish markets, below key resistance levels 0.6760 (144 EMA on the daily chart), 0.6850 (200 EMA on the daily chart), 0.6900 (50 EMA on the weekly chart). In other words, AUD/USD is in an upward correction while remaining in the global downward trend zone. This means that despite the current growth of AUD/USD, short positions are still preferable. However, they need signals to resume. The first such signal will be a breakdown of the local support level 0.6680 and support 0.6641. In this case, the price will return inside the descending channel on the weekly chart, heading towards its lower border and the 0.6100, 0.6000 marks. In an alternative scenario, AUD/USD will again attempt to break into the zone above the 0.6760 resistance level. However, the target of this movement "upward" will be near the 0.6850 resistance level. A higher rise above the 0.6900 resistance level is hardly expected for now. Support levels: 0.6680, 0.6641, 0.6565, 0.6531, 0.6500, 6455, 0.6382, 0.6285, 0.6200, 0.6170, 0.5975, 0.5665, 0.5510 Resistance levels: 0.6760, 0.6800, 0.6855, 0.6900 Trading Tips Sell Stop 0.6670. Stop-Loss 0.6810. Take-Profit 0.6640, 0.6565, 0.6531, 0.6500, 6455, 0.6382, 0.6285, 0.6200, 0.6170, 0.5975, 0.5665, 0.5510 Buy Stop 0.6810. Stop-Loss 0.6670. Take-Profit 0.6855, 0.6900     Relevance up to 12:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327519
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

Canada's CPI inflation prints didn't surprise, consensus points to a 25bp rate hike, but chances of a greater variant are still there

Kenny Fisher Kenny Fisher 18.11.2022 14:39
The Canadian dollar is trading quietly on Friday. USD/CAD is trading at 1.3337 in the European session, up 0.09%. RMPI, IPPI inflation indicators next Inflation was in the spotlight this week, as Canada released the CPI report for October. CPI climbed 6.9% YoY and rose 0.7% MoM, with both readings matching the consensus. However, the Bank of Canada’s measures for core inflation rose slightly. The data will do little to help the Bank of Canada in its deliberations ahead of a rate meeting on December 7th. The markets have priced in a 25-bp hike, with a 35% of a larger increase. The BoC has been tightening rates at full speed, raising the benchmark rates by some 350 basis points since March to 3.75%. Inflation is the BoC’s number one priority, but policy makers are on the lookout for an indication that inflation has peaked, which would provide the green light to ease the pace of tightening. Today’s inflation releases, the Raw Materials Price Index and Industrial Product Price Index, will be watched closely by the BoC, as will next week’s retail sales reports. Read next: UK: retail sales print turned out to be a propeller for pound sterling| FXMAG.COM The soft US inflation report last week sent the stock markets flying higher, as risk sentiment soared. Investors took the inflation data as an indication that the Fed was close to a pivot in its aggressive monetary policy. The Fed responded with a full court press, with Fed members hitting the airwaves and making hawkish remarks about rates. The latest appearance was from Fed member Bullard, who called on the Fed to raise rates to a minimum of 5.-5.25%. Bullard also presented a hawkish scenario in which the funds rate would not peak until 7%. The Fed offensive has had the desired effect, dampening investors expectations of a U-turn in policy, which would have complicated its efforts to tame inflation. This has helped steady the US dollar, which took a beating after the inflation report. USD/CAD Technical USD/CAD faces resistance at 1.3353 and 1.3471 There is support at 1.3218 and 1.3136 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar eyes inflation data - MarketPulseMarketPulse
The South America Are Looking For Alternatives To The US Currency

Next week RBNZ decides on interest rate. What else? Let's see Craig Erlam's preview

Craig Erlam Craig Erlam 18.11.2022 18:22
US Wall Street’s shortened trading week will be jam-packed with the FOMC minutes, more Fed speak, the flash PMIs and the final look at the University of Michigan’s inflation expectations.   One of the key events of the trading week will be the Fed’s minutes from the November policy meeting.  Financial markets will want to know if the Fed still believes that the cost of taking too little action to bring down inflation likely outweighed the cost of taking too much action. The Fed is expected to downshift to a half-point rate-hiking pace in December, but that rate-hiking cycle could last longer if pricing pressures become more entrenched.   US stock and bond markets will be closed Thursday for Thanksgiving Day and will close early on Friday.  Traders will pay close attention to Black Friday shopping data, which will give the latest pulse on the health of the US consumer.   EU  The highlight next week may well be the monetary policy accounts, although, with a steady stream of central bank commentary since the last meeting and a raft of economic data, it’s hard to say just how impactful they’ll ultimately be. The flash PMIs may tell a more interesting story of an economy heading for recession, while appearances from various policymakers – including President Christine Lagarde on Sunday – could fill in any gaps that haven’t already been filled. UK  It’s hard to get too excited about next week’s PMI data and central bank speak following the assessment from the OBR on the economic outlook, taking into consideration the latest fiscal squeeze. The UK is heading for its largest squeeze on living standards in six decades – a 7.1% decline – as interest rates continue to increase, taxes rise and the cost-of-living crisis intensifies.  The only question that remains is how soon the BoE can pause its tightening among all of these other pressures. It alluded to the fact that markets are pricing in too much at the last meeting but at this moment, another 150 basis points are still priced in. Russia Another quiet week on the economic data side, with PPI numbers the only notable releases. The focus remains on its invasion of Ukraine and how it handles recent losses in Kherson. South Africa Next week is action-packed, with inflation data being released on Wednesday ahead of the latest SARB rate decision a day later. While the headline CPI is expected to ease slightly to 7.4%, from 7.5%, core is seen rising from 4.7% to 4.9%, meaning both remain far too high. The SARB inflation target is 3-6%.  That is expected to push the SARB to hike interest rates again next week by 75 basis points, taking the repo rate to 7%.  Turkey The CBRT is expected to cut interest rates by another 150 basis points next week despite soaring inflation and a desperately weak currency. The latter has been managed with capital controls over the last couple of years and the new reserve-management system appears to be stabilizing it at record lows despite continued easing. The hope for President Erdogan is this can be carefully managed into next year’s election to at least give the impression of stability amid a potential deceleration in official inflation.  Switzerland No significant economic data or releases next week. The central bank continues to drive home the message that FX intervention could occur on either side. An inter-meeting rate hike can also not be ruled out. China The focus stays on China’s Covid situation. China’s Covid cases are near record highs and that is threatening to delay any looser rules. Expectations are now for China to reopen sometime after March. Investors widely expect Chinese commercial banks to keep both the 1-year and 5-year Loan Prime Rate (LPR) unchanged at 3.65% and 4.30% respectively. The PBOC might be delaying rate cuts until next quarter as they are concerned about yuan weakness.   India It is expected to be a quiet week for India.   Australia & New Zealand This week is mostly about New Zealand as the RBNZ is expected to deliver its sixth straight half-point rate hike. Hot inflation and wage data are expected to prevent the central bank from downshifting to a slower pace of tightening. Investors hoping for the bank to pause tightening in February might be surprised if the policymakers are worried that inflation isn’t falling quickly enough.    The lone release for Australia will be the preliminary PMI readings.  Last month the service sector fell into contraction territory while manufacturing activity continues to soften.   Japan A busy week filled with Japanese data, including preliminary PMI data for the services and manufacturing sectors in November and core CPI data for the Tokyo region in November. Inflation in Japan has hit a four-decade high and that is complicating what the BOJ wants to do.  Some economists are expecting Tokyo’s core inflation to slow for the first time since January but that is hardly the overall consensus.   Singapore The October inflation report is expected to show pricing pressures eased from 7.5% to 7.0%.  The final Q3 Q/Q GDP reading is expected to be revised a tick lower to 1.4%. Economic Calendar Saturday, Nov. 19 Economic Events The APEC Economic Leaders’ Meeting concludes Fed’s Bostic speaks at the Southern Economic Association annual meeting in Florida Sunday, Nov. 20 Events World Cup begins with Qatar hosting Ecuador ECBs Lagarde participates in formal dinner of European Roundtable for Industry Monday, Nov. 21 Economic Data/Events US Chicago Fed national activity index China loan prime rates Germany producer prices New Zealand credit card spending Sweden home prices, industry capacity utilization Taiwan export orders, current account balance Thailand GDP The Bank of Japan announces the outright purchase amount of Japanese government securities Ukraine President Zelenskiy speaks at NATO Parliamentary Assembly’s annual session ECB’s Holzmann and Simkus speak at the Conference on European Economic Integration hosted by Austria’s central bank Bank of Portugal Governor Centeno speaks at the CNN Portugal Summit Bundesbank President Nagel speaks at an evening event of the ICFW Frankfurt business journalists’ club Tuesday, Nov. 22 Economic Data/Events US Richmond Fed manufacturing index Canada retail sales Euro area consumer confidence Mexico retail sales, Banamex survey of economists New Zealand trade South Africa leading indicator Turkey consumer confidence South African President Cyril Ramaphosa is on a state visit to the UK The OECD releases its latest Economic Outlook German Chancellor Scholz speaks at the SZ-Wirtschaftsgipfel conference in Berlin ECB’s Holzmann speaks at the presentation of the Austrian National Bank’s financial stability report Fed’s Mester gives speech on wages and inflation Fed’s Bullard participates in a policy panel at the Central Bank of Chile’s annual conference RBA’s Lowe speaks at the annual CEDA dinner Wednesday, Nov. 23 Economic Data/Events FOMC minutes of November meeting US MBA mortgage applications, durable goods, initial jobless claims, preliminary PMIs, University of Michigan sentiment, new home sales European Flash PMIs: France, Germany, UK New Zealand central bank (RBNZ) rate decision: Expected to raise rates by 75bps to 4.25% Australia PMIs Mexico international reserves Russia industrial production, monthly PPI, weekly CPI Singapore CPI, GDP South Africa CPI Thailand trade balance EIA crude oil inventory report German Chancellor Olaf Scholz addresses the Bundestag on the country’s 2023 budget ECB’s de Guindos speaks at the Encuentro del Sector Financiero in Madrid Thursday, Nov. 24 Economic Data/Events US stocks and bond markets closed for Thanksgiving holiday Canada small business optimism France business, manufacturing confidence Germany IFO business climate Japan PMIs, department store sales, leading index, machine tool orders Russia gold and foreign-exchange reserves Sweden central bank (Riksbank) rate decision: Expected to raise rates by 75bps to 2.50% Turkey central bank (CBRT) rate decision: Expected to cut rates by 150bp to 9.00% South Africa central bank (SARB) rate decision: Expected to raise rates by 75bps to 7.00% Turkey real sector confidence South Africa PPI Mexico publishes monetary policy minutes ECB publishes accounts of its October policy meeting EU energy ministers hold an emergency meeting in Brussels ECB’s Schnabel speaks at the Bank of England Watchers’ Conference Friday, Nov. 25 Economic Data/Events US stock and bond markets close early Retailers hope for a strong Black Friday performance France Consumer confidence Spain PPI Sweden PPI Germany GDP Japan Tokyo CPI, PPI services Mexico GDP, current account balance New Zealand consumer confidence index, retail sales ex-inflation Singapore industrial production Thailand foreign reserves, forward contracts Sovereign Rating Updates Switzerland (Moody’s) Turkey (Moody’s) Poland (DBRS) This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Week Ahead - Central banks remain hawkish - MarketPulseMarketPulse
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

G10 Forex Market in 2023 To Be Characterised By More Volatility

ING Economics ING Economics 20.11.2022 11:30
After an 18-month bull trend in the dollar, the FX outlook has become less clear. Further position adjustment could prompt a little more short-term dollar weakness, but we do not believe the conditions are in place for a major dollar bear trend just yet. Instead, we expect FX markets in 2023 to be characterised by less trend and more volatility. Source: Shutterstock G10: Less trend, more volatility The final quarter of 2022 has seen a breakdown in the otherwise orderly dollar bull trend – a trend which had been worth 5% per quarter over the first nine months of the year. That dollar rally had largely been driven by a Federal Reserve wanting to take policy into restrictive territory – a trend only exacerbated by the war in Ukraine. For all the current discussions about peak dollar and peak macro pessimism, we think it is still worth examining whether the conditions will be in place to deliver an orderly dollar bear trend in 2023. We think not and here are three reasons why: Driving the dollar bull trend since summer 2021 has been a Fed at first abandoning Average Inflation Targeting and then trying to get ahead of the inflation surge. A call on a benign dollar decline in 2023 requires the Fed to be taking a back seat. That seems unlikely. The stark message from both the Fed’s Jackson Hole symposium and the IMF autumn meetings was that central banks should avoid relaxing too early in their inflation battle – a move which would deliver the pain of recession without any of the sustained gains on inflation. We suspect it will be too early for the Fed to sound relaxed at its 14 December meeting and March 2023 may be the first opportunity for a decisive turn in Fed rhetoric. While a softer Fed profile may be a necessary condition for a turn in the dollar, a sufficient condition requires a global economic environment attractive enough to draw funds out of the dollar. 2023 global growth forecasts are still being cut – dragged lower especially by recession in Europe. ING forecasts merchandise world trade growth below 2% in 2023 – not a particularly attractive story for the trade-sensitive currencies in Europe and emerging markets. A liquidity premium will be required of non-dollar currencies. 2023 will be a year when central banks are initially still hiking into a recession and shrinking balance sheets. The Fed will reduce its balance sheet by a further $1.1tn in 2023 and the European Central Bank will be looking at quantitative tightening, too. Lower excess reserves will tighten liquidity conditions still further and raise FX volatility levels. Again, the bar not to invest in dollar deposits remains high – especially when those dollar deposits start to pay 5% and the dollar retains its crown as the most liquid currency on the planet. What do these trends mean for G10 FX markets? This probably means that the dollar can bounce around near the highs rather than embark on a clean bear trend in 2023. If the dollar is to turn substantially lower, we would favour the defensive currencies such as the Japanese yen and Swiss franc outperforming. Here, the positive correlation between bonds and equity markets may well break down via the bond market rallying on the back of a US recession and easier Fed policy. ING forecasts US 10-year Treasury yields ending 2023 at 2.75% - USD/JPY could be trading at 130 under that scenario.  Recession in Europe means that EUR/USD could be trading in a 0.95-1.05 range for most of the year, where fears of another energy crisis in the winter of 2023 and uncertainty in Ukraine will hold the euro back. Sterling should also stay fragile as the new government attempts to restore fiscal credibility with Austerity 2.0. We cannot see sterling being rewarded much more on austerity and suspect that GBP/USD struggles to hold gains over 1.20.  Elsewhere in Europe, some differentiation could emerge between the Scandinavian currencies. The Swedish krona may struggle to enter a sustained uptrend next year given its elevated exposure to the eurozone’s growth story, while the Norwegian krone could benefit from its attractive commodity exposure. However, NOK is an illiquid and more volatile currency, and would therefore face a bigger downside in a risk-off scenario. As shown in the chart below, commodity currencies look undervalued versus the dollar on a fundamental basis. However, a stabilisation in risk sentiment is a necessary condition to close the misvaluation gap. For the Australian and New Zealand dollars, an improvement in China’s medium-term outlook is also essential, so the Canadian dollar may emerge as a more attractive pro-cyclical bet given low exposure to the economic woes of Europe and China. Another factor to consider is the depth of the forthcoming house price contraction. We think central banks will increasingly take this into consideration and will try to avert an uncontrolled fall in the housing sector. However, this is potentially a very sizeable downside risk, especially for the currencies of commodity-exporting countries, which generally display the most overvalued property markets in the G10. To conclude, we think FX trends will become less clear in 2023 and volatility will continue to rise. FX option volatility may seem expensive relative to historical levels, but not at all when compared to the volatility FX pairs are actually delivering. We suspect risk management through FX options may become even more popular in 2023.   Valuation, volatility and liquidity in G10 Source: ING, Refinitiv EUR/USD: Dollar bromance will take some breaking   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/USD 1.035 Bearish 0.98 0.95 0.98 1.00 1.00 Bullish leap of faith is too dangerous: We are bearish on EUR/USD into the end of the first quarter of 2023. Key factors which have driven EUR/USD lower this year will remain largely in place. The softish US October CPI print may give the Fed some pause for thought, but should not be enough to derail it from some further tightening – taking the policy rate close to 5.00% in the first quarter of 2023. Another key factor for EUR/USD this year has been energy. Here, our team sees prices for both natural gas and oil rising from current levels through 2023. A difficult 2023 European winter for energy may well restrain the EUR/USD recovery later in the year, continuing to depress the eurozone’s traditionally large current account surplus.   Necessary but not sufficient: Tighter Fed policy has been at the forefront of this year’s dollar rally and a shift in the Fed tone (more likely in March 2023 than December 2022) will be necessary to see the short end of the US yield curve soften appreciably and the dollar weaken. But the sufficient condition for a EUR/USD turnaround is the state of affairs amongst trading partners. Are they attractive enough to draw funds away from USD cash deposits potentially paying 5%? That is a high bar and why we would favour the EUR/USD 2023 recovery being very modest, rather than the ‘V’ shape some are talking about. ECB will blink first: The case for a central bank pivot is stronger for the ECB than the Fed. The German economy looks set to contract 1.5% next year and at its 15 December meeting, the ECB may well use its 2025 forecast round to show inflation back on target. We see the ECB tightening cycle stalling at 2.25% in February versus the near 3% currently priced by the market for 2023. This all assumes a seamless ECB introduction of quantitative tightening and one that does not upset peripheral bond markets. Add in global merchandise trade barely growing above 1% next year (recall how the 2017-19 trade wars weighed on the euro) plus the risk of tighter liquidity spilling into financial stability – all suggest the market’s bromance with the dollar will continue for a while yet.  USD/JPY: 1Q23 will be a crucial quarter   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/JPY 140.00 Bearish 145.00 145.00 140.00 135.00 130.00 Clash of the titans: The stark divergence in monetary policy between the Fed and the Bank of Japan has been the primary driver of this year’s 15%+ rally in USD/JPY. In 2023, investors may question whether the BoJ is ready to tighten. The default view is that the perma-dovish BoJ Governor, Haruhiko Kuroda, will not be moved. However, the end of Governor Kuroda’s term on 8 April 2023 will no doubt lead to frenzied speculation on his replacement and whether a less dovish candidate emerges. Interest rate markets are starting to price a change – e.g. the BoJ’s 10-year target sovereign yield of 0.25% is priced at 0.50% in six months’ time. March 2023 will be especially volatile: The first quarter of 2023 will also see huge focus on the Japanese wage round, where a rise in wages is a prerequisite for the BoJ to tighten policy. Japanese politicians have been encouraging business leaders to raise wages, while at the same time, the government has been quite aggressive with fiscal stimulus to offset the cost-of-living shock. This period will also see the Fed release its dot plots (22 March), which may be the first real chance for the Fed to acknowledge a turn in the inflation profile. As such, this period (March/April) could see a big reversal lower in USD/JPY. FX Intervention slows the move: Most agree that USD/JPY is higher for good reasons (including the energy crisis) and that Japanese FX intervention can only slow, not reverse the move. The Japanese have already spent around $70bn in FX intervention between the 146 and 151 region in USD/JPY and will likely be called into further action based on our view of a stronger dollar over coming months. FX reserves are not limitless, of course, but Japan’s large stockpile of $1.1tn means that this campaign can continue for several more months. The purpose here is to buy time before the Fed cycle turns. Unless we end up with 6%+ policy rates in the US next year, we would expect USD/JPY to be ending 2023 nearer 130. GBP/USD: Running repairs   Spot Year ahead bias4Q221Q232Q233Q234Q23 GBP/USD 1.19 Mildly Bearish 1.10 1.07 1.11 1.14 1.14 Fiscal rescue plan: After September’s government-inflicted flash crash, GBP/USD is now recovering on the expectation of more credible UK fiscal plans and the softer dollar. As above, we doubt 2023 will prove the year of a benign dollar decline. And the risk is that the Fed keeps rates at elevated levels for longer. Given sterling’s large current account deficit and its transition to high beta on the external environment, we think it is too early to be expecting a sustained recovery here. Instead, we favour a return to the 1.10 area into year-end as the government introduces Austerity 2.0 and the Bank of England cycle is repriced lower. Tighter fiscal/looser monetary mix: At its meeting in early November, the BoE pushed back against the market pricing of the rate cycle – arguing that hikes close to 5% would see the UK economy contract 5%. Our call is that the BoE terminal rate will be closer to the 3.75% area than the 4.50% that the market prices today. As the BoE assesses the degree of tightening needed to curtail inflation, the government is discussing ways to fill around a £60bn hole in the budget. The plan will be revealed on 17 November, probably in a roughly 50:50 split between tax hikes and real terms spending cuts. We look for the UK economy to contract every quarter in 2023 – making it a very difficult environment for sterling. Sterling suffers from liquidity outages: This year’s BIS triennial FX survey saw sterling retain its position as the fourth most traded currency pair. Despite this, sterling does occasionally suffer from flash crashes. We think liquidity will be at a premium in 2023 and that a Fed taking real rates even higher as economies head into recession is a dangerous combination for sterling – where financial services make up a large section of the economy. GBP/USD realised volatility is now back to levels seen during Brexit and our market call for 2023 is that these types of levels will become more, not less, common. EUR/JPY: A turn in the cycle   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/JPY 144.50 Bearish 142.00 138.00 137.00 135.00 130.00 Downside risks into 1Q23: EUR/JPY has defied typical relationships with risk assets by gently rallying all year even as both bond and equity benchmarks sold off 20%. Driving that JPY underperformance has probably been BoJ policy and USD/JPY’s strong relationship with US 10-year yields. Both the eurozone and Japan have been hit by the energy shock, where external surpluses have quickly dwindled. As above, we tend to think there are downside risks to EUR/JPY in the first quarter of 2023 as speculation mounts over BoJ Kuroda's successor as well as the ECB potentially calling time on their tightening cycle at the February meeting. US10yr can drag EUR/JPY to 130 in 2H23: A large part of the JPY underperformance during 2022 has been driven by developments in the US bond market. USD/JPY consistently shows the most positive correlation to US 10-year Treasury yields of any of the G10 FX pairs – and far higher than EUR/USD. Consistent with ING’s view on the Fed cutting rates in the third quarter of 2023, our debt strategy team sees US 10-year yields starting to edge lower in the second quarter of 2023, and then falling 100bp in the second half of 2023. In theory, this should heavily pressure EUR/JPY into the end of the year. Financial stability risks increase: Lower growth and tighter liquidity conditions – at least through the early part of 2023 – increase the prospect of financial stability risks. Recall the Fed will be shrinking its balance sheet by $1.1tn in 2023 even as liquidity and bid-offer spreads continue to create difficult market conditions. The yen lost its shine as a safe-haven currency in 2022, but we suspect relative to the euro, some of that shine can be regained in a softer US rate environment. The EUR/JPY cycle should also turn if the ECB calls time on its tightening cycle at the 2 February meeting. EUR/GBP: Listless in London   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/GBP 0.87 Neutral 0.89 0.89 0.88 0.88 0.88 In the same macro boat: Both the eurozone and UK economies have been hit hard by the war in Ukraine and the surge in energy prices. Both saw sharp terms of trade declines into August and then a sharp reversal as natural gas prices dipped into the warm winter. There is not a substantial amount of difference between our German and UK quarterly growth profiles for 2023 – both contracting every quarter of the year. Perhaps one could argue that the UK is more exposed to higher mortgage rates given the shorter duration of fixed-rate mortgages in the UK. This could all make for a trendless EUR/GBP environment. Energy price guarantees could differentiate: One important determinant for UK growth in 2023 will be how the new government handles the Energy Price Guarantee. Former UK Prime Minister, Liz Truss, offered a two-year programme – subsequently cut back to six months after the UK fiscal crisis. How the UK consumer copes with having to pay market prices for energy will be key to the UK story in 2023 as well as how the EU as a whole copes with similar challenges. Currently, it seems that the ECB is concerned that the fiscal programmes in Europe are too generous and not particularly targeted – adding to the inflation challenge.    Political wild cards: To pick out a few political wild cards, the first is a re-run of the Scottish independence referendum. The Scottish National Party (SNP) has picked 19 October 2023 as the date – although such an exercise would likely have to be approved by the UK parliament. Currently, the SNP is pursuing an action through the Supreme Court to see whether London can indeed still veto the referendum. In Europe, the focus will probably be on the fiscal path taken by the new right-wing Meloni government and also the reform of the Stability and Growth Pact. Budgets submitted in late 2023 could become an issue were the rules to be tightened again.   EUR/CHF: Swiss National Bank to guide it lower   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/CHF 0.98 Bearish 0.95 0.93 0.90 0.90 0.92 Does the SNB want a stronger Swiss franc?: The Swiss National Bank this year said it made a conscious decision to allow nominal Swiss franc appreciation in light of the inflation environment. The three-month policy rate has been raised 125bp to 0.50% and the SNB says it wants to keep the real exchange rate stable. With inflation running at 3% in Switzerland versus 10% in its largest trading partner, the eurozone, the SNB in theory should be happy with something like 5-7% per annum nominal appreciation in the Swiss franc. That certainly was the story into the end of September but does not quite explain the Swiss franc's weakness over the last six weeks. Two-sided intervention: When hiking rates earlier this year the SNB also said it would be engaging in two-sided FX intervention. Ever since the start of the financial crisis in 2008, the SNB has been more familiar as a seller of the Swiss franc – including its 1.20 floor in 2011-2015. Now its strategy is changing and we read that as an objective to potentially manage the Swiss franc stronger in line with its ambitions to tighten monetary conditions. Earlier this year, we estimated that the SNB could possibly drive EUR/CHF to the 0.90 area in summer 2023 based on expected inflation differentials and the need for a stable real exchange rate. The risk environment should favour the franc: Central banks are communicating that they need to tighten rates into recession and remove the excess liquidity poured out during a series of monetary bailouts. Tighter monetary and financial conditions typically spell stormy waters for risk assets. With its still sizable current account surplus (worth 8% of GDP in the second quarter of 2022) the Swiss franc should perform well during this stage of the global economic cycle. Closer to home, the European economic cycle and the ECB discussing quantitative tightening into early 2023 will prove a challenge to peripheral eurozone debt markets and likely reinforce the franc as a eurozone hedge. EUR/NOK: Not for the faint of heart   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/NOK 10.33 Bearish 10.30 10.15 9.95 9.70 9.60 Risk sentiment remains key: The krone is not a currency for the faint of heart. It is the least liquid currency in the G10 space, making it considerably exposed to negative shifts in global risk sentiment and equity market turmoil. It is, at this stage, way too early to call for a turn in equities, and a hawkish Fed into the new year may actually mean more pain for risk assets, at least in the near term. A recovery in global sentiment should offer support to NOK in the second half of next year, but restoring market confidence in a very high-beta currency is no easy feat. Norges Bank policy: The krone’s underperformance in 2022 was exacerbated by Norges Bank effectively sterilising oil and gas profits via a large increase in daily NOK sales. In November, FX daily sales have been scaled back from NOK4.3bn to NOK3.7bn, and we think there could be some interest by NB to further ease the pressure on the currency via smaller FX sales. With recent dovish hints suggesting that the NB hiking cycle may peak at 3.0% (with most of the country on variable mortgage rates, many more rate hikes could be difficult to tolerate), allowing a stronger currency to do some inflation-fighting sounds reasonable.  Energy prices: If indeed markets enjoy a calmer environment in 2023 and NB favours a stronger currency, then NOK is left with considerable room to benefit from a still strong energy market picture for Norway. There is probably an optimal range for oil and – above all – gas prices to trade at elevated levels but not such high levels that would significantly hit risk sentiment. For TTF, this could be somewhere around 150-200 €/MWh. This a plausible forecast for next year, but the margin for error can be very large. We see EUR/NOK at 10.50 in the fourth quarter of 2023, but NOK hiccups along the way are highly likely. EUR/SEK: Eurozone exposure a drag on SEK   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/SEK 10.80 Neutral 10.85 10.70 10.60 10.40 10.50 Riksbank’s policy: The Riksbank delivered more than one hawkish surprise in 2022, including a 100bp rate hike. This appeared to be part of a front-loading operation where lifting the krona was seen as a welcome side effect. In practice, and like in many other instances in the G10, the high volatility environment meant that short-term rate differentials played a negligible role in FX. So, despite a wide EUR-SEK negative rate differential throughout 2022, SEK was unable to draw any real benefit. That differential has now evaporated, but we expect 125bp of tightening (rates at 3.0%) in Sweden versus 75bp in the eurozone, which could suggest some EUR/SEK downside room in a more stable market environment. Also, a slowdown in FX purchases by the RB, now that reserves are back to the 1H19 levels, should remove some of the pressure on SEK. European picture: Sweden is a very open economy with more than half of its exports heading to other EU countries. Our expectations are that 2023 will see a rather pronounced eurozone recession and that the energy crisis will extend into the end of next year. Barring a prolonged period of low energy prices (and essentially an improvement in the geopolitical picture) in Europe, we doubt SEK will be able to enter a sustainable appreciation trend in 2023 as sentiment in the eurozone should remain depressed. Valuation: We are not fans of the euro in 2023, which means that our EUR-crosses forecasts reflect the weaker EUR profile. We see some room for EUR/SEK to move lower throughout the year – also considering that we estimate the pair to be around 9.0% overvalued. However, the high risk of a prolonged energy crisis in the eurozone means that SEK is significantly less attractive than other pro-cyclical currencies next year. Incidentally, SEK is highly correlated to the US tech stock market, which looks particularly vulnerable at the moment. A return to 10.00 or below would likely require a significant improvement in European sentiment. USD/CAD: Loonie is an attractive pro-cyclical bet   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/CAD 1.33 Bearish 1.34 1.32 1.30 1.26 1.24 Commodities and external factors: Our commodities team expects Brent to average slightly above $100/bbl next year, and Western Canadian Select around $85/bbl. Along with our expectations for higher gas prices, the overall commodity picture should prove rather supportive for the Canadian dollar in 2023. In our base-case scenario, where global risk sentiment gradually recovers but two major risk-off forces – Ukraine/Europe and China – remain, CAD would be in an advantageous position, since Canada has much more limited direct exposure to China and Europe compared to other commodity-exporting economies.  Domestic economy: If the US proves to be a relative 'safe-haven' in the global recession, therefore withstanding the downturn better than other major economies like the eurozone, this should offer a shield to Canada’s economy, which is heavily reliant on exports to the US. There is probably one major concern for the domestic economy: house prices. Canada is among the most vulnerable housing markets in the world, with price-to-income ratios around 9x in many cities (compared to 5-6x in the US). Whether we’ll see a sizeable but controlled descent or a fully-fledged housing crash will depend on the Bank of Canada and the depth of the recession. Monetary policy and valuation: It does appear that the BoC has started to consider domestic warning signals (probably, also house prices), and recently shifted to a more moderate pace of tightening. Markets are currently expecting rates to peak around 4.25/4.50% in Canada, and we tend to agree. Barring a rapid acceleration in the unemployment rate, a housing crash should be averted. It is also likely that the BoC will start cutting before the Fed in 2023. All in all, accepting the downside risks stemming from the housing market and/or a further deterioration in risk sentiment, we see room for a descent in USD/CAD to the 1.25 level towards the end of 2023. In our BEER model, CAD is around 20% undervalued in real terms. AUD/USD: Riding Beijing’s roller coaster   Spot Year ahead bias4Q221Q232Q233Q234Q23 AUD/USD 0.68 Mildly Bullish 0.66 0.66 0.68 0.69 0.70 Exposure to China: The Australian dollar is a high-beta currency, and the direction of global risk sentiment will be the key driver next year. We think that a gradual recovery in sentiment will be accompanied by a still challenging energy picture, which may force investors to choose which pro-cyclical currencies to bet on. When it comes to AUD, the China factor will remain very central, as Australia has the most China-dependent export machine in the G10. Our economics team’s baseline scenario is that the real estate crisis will be the main drag on growth in China and while retail should recover on looser Covid rules, slowing global demand should hit exports. One positive development: the new Australian government is seeking a more friendly relationship with Beijing, paving the way for the removal of export curbs next year. Commodities and growth: Iron ore remains Australia’s main export (estimated at $130bn in 2022), and it is a very sensitive commodity to China's real estate sector. Our commodities team thinks a return to $100+ levels is unlikely given the worsening Chinese demand picture, but still forecasts prices to average $90/t in 2023. The second and third largest exports are oil and natural gas ($100bn combined). Here, we see clearly more upside room for prices, especially on the natural gas side. On balance, we expect the commodity picture for Australia to be rather constructive next year, which could offer a buffer to the Australian economy during the downturn. Growth in 2022 should have topped the 4% mark, but that will be much harder to achieve in 2023. The combination of higher rates, reset mortgages, a slowing housing market and possibly softening labour market should bring growth back closer to 3%. This would still be an extremely strong outcome against the backdrop of global weakness.   Monetary policy and valuation: The Reserve Bank of Australia has been one of the 'pioneers' of the dovish pivot, and a return to 50bp increases seems unlikely, as the Bank is probably monitoring the rather overvalued housing market, and the inflation picture is less concerning than in the US or in Europe. Most Australian households have short-term fixed mortgage rates, and we could see a deterioration in disposable income (especially at the start of the year). We think the RBA will be careful to avert an excessively sharp housing contraction, and we expect rates to peak at 3.60% (well below the Fed and the Reserve Bank of New Zealand) and cuts from 3Q23. This would mean a less attractive carry – and less upside risk in an optimistic scenario for global sentiment; but also less damage to the economy, which may play in AUD’s favour in our baseline scenario. Valuation highly favours AUD, as the positive terms of trade shock means that AUD/USD is 20% undervalued in real terms, according to our behavioural equilibrium exchange rate (BEER) model. We have a moderately upward-sloping profile for the pair in 2023, but high sensitivity to risk sentiment and China suggests downside risks remain high. NZD/USD: Dodging the housing bullet   Spot Year ahead bias4Q221Q232Q233Q234Q23 NZD/USD 0.62 Mildly Bullish 0.60 0.60 0.62 0.63 0.64 Monetary policy: The Reserve Bank of New Zealand has given very few reasons to believe it is approaching a dovish pivot. Markets are currently expecting the Bank to hike well into 2023, and take rates to around 5.0%. While inflation (7.2% year-on-year) and job market tightness (unemployment at 3.3%) both remained elevated in the third quarter, there are growing concerns about the rapid downturn in the New Zealand property market, which in our view will trigger either an earlier-than-expected end to the tightening cycle or a faster pace of rate cuts in 2023. Housing troubles: The RBNZ recently published its financial stability report, where it showed relatively limited concern about households’ ability to withstand the forthcoming downturn in house prices. In its August 2022 forecasts, the RBNZ estimated that the YoY contraction in house prices will reach 11.6% in the first quarter of 2023. However, that implied an Official Cash Rate at 4.0%, so only 50bp of extra tightening from now, which seems too conservative now. House prices have fallen 7.5% from their first quarter 2022 peak so far, but the trend may well accelerate, especially given a hawkish RBNZ and the risk of slowing global demand hitting the very open New Zealand economy. External drivers and valuation: Even assuming a constructive domestic picture in the housing market and an attractive yield for the currency in 2023, external factors will determine how much NZD can draw any benefit. As for AUD, risk sentiment and China are the two central themes. The New Zealand dollar is more exposed to risk sentiment (as it is less liquid and higher-yielding) than AUD, but probably less exposed to China’s story. In particular, the real estate troubles in China may well hit Australia via the iron ore channel, while NZ exports (primarily dairy products) are much more linked to China’s Covid restrictions, which look likely to be gradually scaled back. In our base case, the two currencies should largely move in tandem next year. The real NZD/USD rate is 15% undervalued, according to our BEER model. EUR/DKK: Tricky mix of intervention and rates   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/DKK 7.44 Neutral 7.44 7.44 7.44 7.44 7.45 Central bank policy: Danmarks Nationalbank delivered FX intervention worth DKK45bn in September and October to defend the EUR/DKK peg. On 27 October, it opted for a smaller rate hike (60bp) compared to the ECB (75bp), which briefly sent EUR/DKK close to the 7.4460 February highs before rapidly falling back to 7.4380/90. We think it will be a busy year ahead for the central bank, as we expect very limited idiosyncratic EUR strength and potentially more pressure on EUR/DKK. Having now exited negative rate territory, DN has much more room to adjust the policy rate for a wider rate differential with the ECB if needed. However, with inflation running above 10% in Denmark, DN may prefer FX intervention over dovish monetary policy to support the peg. We have recently revised our EUR/DKK forecast, and expect a return to 7.4600 only in 2024. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
CEEMEA FX Outlook 2023: The Situation Remains Fragile

CEEMEA FX Outlook 2023: The Situation Remains Fragile

ING Economics ING Economics 20.11.2022 11:51
The geographic and geopolitical situation has made this a difficult period for the region. However, things should normalise in the coming year. We expect global pressures to ease and central banks to drop their FX intervention approach. Nevertheless, the situation remains fragile and we remain vigilant Source: Shutterstock Make the FX market normal again Although it can be said globally that the last few months have been very complicated, the CEEMEA region and in particular the CEE4 have been clearly leading the way in this mess. The Covid years forced central banks in Central and Eastern Europe to start a global hiking cycle, and this year's events have compounded the burden on the region. In our view, the main shock is already over, but we are far from out of the woods and are only moving into the second stage – the aftermath. In addition to the standard drivers of FX, such as rate differentials and EUR/USD, the price of natural gas has now become a central theme for the CEE4 region. The coming winter will test the unity of the European Union with a shallow recession and central bank efforts to end record hiking cycles bringing further pain to FX. Moreover, twin deficits, which will remain with us for a longer period, do not play in the region's favour. Central banks have been forced to do more than just hike rates to ensure price stability and the CEE4 region has split into two camps: full FX intervention regimes (Romania and the Czech Republic) and hybrid defence (Poland and Hungary). To make matters worse, politics has also come into play, and in particular, the dispute between Hungary and Poland with the EU has weighed heavily on the forint and the zloty. As you can see, the cards are heavily stacked against the CEE region, and we carry all these themes into the next year. However, we believe that these issues will be addressed in 2023 and market conditions will begin to normalise. By far the biggest potential, in our view, is the Hungarian forint, which has suffered badly from the government's uncertain access to EU funds, full dependence on Russian energy, and the greatest sensitivity to a global sell-off. Therefore, with the calming of these issues, which we believe is only a matter of time, the hidden potential of the forint could be unlocked, outperforming its CEE peers. We see a similar story on a smaller scale in Poland. On the other hand, the Czech National Bank and National Bank of Romania have taken the path of keeping FX under control, leading to artificial overvaluation. In both cases, we expect a loosening of the central banks' approach in the first half of next year, which should lead to significant depreciation. Among the high-yielders, Turkish policymakers have used an array of unorthodox policy measures to limit weakness in the Turkish lira. The Turkish election in June will be a pivotal period for financial markets, and investors will remain wary that unchecked inflation could put pressure on the lira. In South Africa, the rand looks to have found some good buyers near the 18.50 area in USD/ZAR. Those levels could be tested again early next year should the Federal Reserve push real interest rates higher again, but as pessimism in the Chinese economy starts to fade in the second half of 2023, (the rand is very much driven by commodity prices and China’s performance) USD/ZAR could be trading well below 17.00. Finally, USD/ILS normally proves a good bellwether for the broad dollar trend. And the Bank of Israel might be slightly more tolerant of shekel strength in 2023. We target 3.00 for USD/ILS. Twin deficits - the new standard in the region Source: ING forecast EUR/PLN: Conditions to improve, zloty remains at risk   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/PLN 4.70 Neutral 4.90 4.85 4.74 4.66 4.70 Valuation: Our relative value EUR/PLN model (gauging the exchange rate against other market variables, such as swap spreads, option volatility, etc) continues to point to the zloty still being some 3% undervalued against the euro. We attribute this to a mix of risks, both external, particularly the war in Ukraine and its economic fallout, and internal, specifically, tensions with the EU, elevated CPI risk and expansionary fiscal policy undermining the local currency bond market – Polish government bonds (POLGBs). Many analysts suggest another major Russian offensive may be due in the spring. If Russia simultaneously attempts to put economic pressure on the EU, this could again sour sentiment towards the CEE region. The prospect of the conflict coming to an end is a major unknown, but investors should at least become increasingly resilient to news about the war. External position: Fundamental backing behind the zloty should improve next year, but risks behind the local policy mix will rise. We expect the current account deficit to tighten from €35bn to €26bn, owing to e.g. a more favourable terms of trade. Poland is also likely to draw some €20bn from the 'old' EU budget. Moreover, the government finally decided to lean towards hard currency funding. All of this is likely to be converted via the market under the current Ministry of Finance's FX strategy – balancing the current account deficit. Also, FDI inflows should remain solid, already standing at a net €16bn in the first half of 2022. Year-end 2022 may prove more difficult, as refilling natural gas reserves may again prove costly. Politics: Domestic politics is a major unknown in 2023. The proximity of the October elections is a key risk for the fiscal consolidation the government recently unveiled to curtail weak POLGBs. The government is also attempting to reset relations with the EU – possibly encouraged by Hungary’s pro-EU turn. While reaching an actual compromise will take time (and may prove impossible ahead of the general elections), it is at least a move in the right direction and likely to improve the market perception of Poland. Moreover, opinion polls show increasing support for the EU-orientated opposition. A victory for them could prove supportive to the zloty, as investors would bet on swift access to the 'new' EU budget. EUR/HUF: Waiting for a forint breakout   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/HUF 405.00 Bearish 400.00 390.00 380.00 385.00 390.00 Inflation: The forint's (HUF) underperformance is largely related to price pressures. Despite the anti-inflationary measures provided by the Hungarian government via price caps in basic food, fuel, and utilities, core inflation is the highest in the EU. However, we believe that the peak is close. Real wage growth dropped into negative territory from September, consumer confidence is close to a record low and a higher share of companies are complaining about a lack of demand rather than a lack of labour. These factors should tame the pricing power of companies. Thus, we see headline and core inflation peaking around the end of 2022 or early 2023. As soon as inflation starts to ease, inflation expectations will come down, so a forward-looking positive real interest rate will spur interest in the HUF. Monetary policy: The central bank stepped into Phase 3 of its tightening cycle in mid-October with an emergency move. New temporary targeted measures were introduced to maintain financial stability alongside the main goal of price stability. The effective rate is now defined by the one-day deposit quick tender, sitting at 18%. With further fine-tuning in the system, we see monetary transmission improving, with short-end rates rising further. In parallel, tightening via the squeezing of liquidity will continue. The exit strategy from the 'whatever it takes' stance will be triggered by materially improved risk sentiment (see next bullet). We think this could translate into a gradual convergence of the effective rate to the base rate, starting as soon as late December. Internal risks: As this policy turnaround will be triggered by a materially improved risk environment, we see a potential relief rally in the forint, despite some normalisation in interest rates. The two key elements of internal risks are the Rule-of-Law procedure and the current account imbalance. Regarding the former, we expect Hungary to settle the dispute with the EU, opening the door for EU transfers as soon as mid-December. This will eliminate a key barrier to HUF strengthening. We expect the country’s external balance to improve in the coming months as the recession and coming winter will dampen the country’s import needs, easing the systemic pressure on the forint. In our view, this could result in a 5% strengthening of the forint over the next six months. EUR/CZK: Koruna under CNB control   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/CZK 24.30 Neutral 24.50 24.50 25.00 25.00 24.50 Monetary policy: The Czech National Bank left interest rates unchanged at 7.0% for the third consecutive meeting and we think the Bank has now ended its hiking cycle – the first central bank in the region to do so. The economy already posted a decline in the third quarter of 2022 and we believe it is heading into a shallow recession. Wage growth remains high but inflation below the CNB's forecast suggests a hawkish surprise is unlikely, in our view. The current account has plunged into a record deficit and, in relative terms, we forecast it will reach the largest deficit since 2003. Moreover, fiscal policy shows only marginal signs of consolidation, and so the Czech Republic joins the twin deficit club within the CEEMEA region. FX Interventions: The main topic for the Czech koruna in the coming months is the fate of the CNB's FX intervention regime. According to the central bank's figures, it has so far spent 16% of FX reserves from mid-May to the end of September. In our view, the CNB's activity in the markets has been zero in recent weeks, as confirmed by the Bank's board member Oldrich Dedek in a recent interview. Therefore, we see the CNB in a comfortable position and expect FX intervention to continue at least until the end of the first quarter next year with a line in the sand at 24.60-24.70 EUR/CZK. What next? For now, the koruna is clearly capped on the upside due to the presence of the CNB in the market, while we also see the pressure on the CZK from the global environment as gradually easing. Moreover, within CEE, markets see more interesting themes in Poland and Hungary and several CZK short squeezes have discouraged bets against the end of CNB FX intervention. Therefore, we expect EUR/CZK to trade slightly below the CNB's unofficial line and the koruna will return to the market's attention in the second quarter of 2023 when we think the topic of the CNB's exit strategy will return. EUR/RON: Focus on the 'managed' in managed float   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/RON 4.91 Mildly Bullish 4.94 4.95 5.10 5.10 5.10 Hiking cycle: Having reached a key rate of 6.75% in November, the National Bank of Romania is either at or very close to the end of the hiking cycle. We narrowly favour no more hikes in 2023, though we admit that chances are high for another 25bp increase in January. The NBR’s commitment to firm liquidity management will likely – on average – keep carry rates above the policy rate. However, we see a good chance for the liquidity situation to improve substantially into year-end on the back of accelerated spending by the Treasury. Mopping up this liquidity is likely to take a good couple of months. Twin deficits: While on the budget deficit side, policymakers seem committed to reaching the 3.00% of GDP target in 2024 (with a 4.4% target for 2023), developments on the current account side are not encouraging. Due to unfavourable price developments in external markets (including the energy sector) but also on the back of robust GDP growth in the first half of 2022, the trade balance deficit will close well within double digits in 2022, possibly flirting with levels last touched in 2008 when it surpassed 16.0% of GDP. This represents a significant structural weakness that will keep pressure on the leu and require constant FX intervention from the central bank. Strong EU funds absorption will be key to balancing this imbalanced picture. Politics: The relatively eventless political scene in 2022 has been rather remarkable after years of political turmoil. As per the current coalition agreement, the PNL prime minister will resign in May 2023 and a PSD prime minister should be voted in by the same coalition. While there are no real signs of trouble currently, the impending 2024 electoral year still makes it somewhat hard to picture a completely serene change of power in May-June 2023. EUR/RSD: IMF acts as an anchor of stability   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/RSD 117.30 Neutral 117.30 117.30 117.35 117.40 117.40 IMF: On 2 November, the IMF announced that a EUR2.4 billion 24-month Stand-By Arrangement (SBA) will replace the current Policy Coordination Instrument (PCI), subject to IMF Board approval in December 2022. The agreement will help to address “emerging external and fiscal financing needs”. On the external front, the IMF estimates the current account deficit to reach 9.0% of GDP in both 2022 and 2023 due to “sharply higher energy import costs along with shortfalls in domestic electricity production, as well as weakening external demand”. On the fiscal side, the initial 3.0% of GDP budget deficit target will be exceeded, most likely ending up around 4.0% of GDP. Summing up, the country needs financing, and the current choppy markets have made the IMF SBA look more appealing despite the strings attached. Monetary policy: Beyond the proposed reforms on the fiscal side, the SBA will undoubtedly shape monetary policy as well. The 2 November press release specifically mentions that “the macroeconomic policy mix should be tight to contain high inflation and support exchange rate stability” and “the ongoing monetary tightening is crucial to ensure that inflation does not become entrenched”. Essentially, we read this as a signal that the IMF is relatively comfortable with the current FX stability policy but that interest rates should continue to be increased. We revise our terminal key rate forecast from 4.50% to 5.75%, which should be reached in the first quarter of 2023. (Geo)Politics: While on the internal front, the April 2022 elections have settled things for some time, the regional developments – be it the war in Ukraine or the Kosovo car plates dispute – are making it more and more difficult for the country to sustain the ambivalent stance it has so far maintained. Absent more clarity, Serbia’s progress as a candidate country for EU accession might see little improvement in the short to medium term, which could dent its efforts to achieve the long-awaited investment grade status. USD/KZT: A defensive play on local fundamentals   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/KZT 460.00 Mildly Bullish 480.00 480.00 470.00 470.00 470.00 Scope for higher exports: The Kazakh tenge (KZT) depreciated 6% in the first 10 months of 2022, which is defensive given the geopolitics in the region and the 10-15% US dollar appreciation against major currencies. This is attributable to Kazakhstan’s stronger trade. Exports grew 48% year-on-year in the first nine months of 2022, and the current account is back to a $7.9bn surplus vs. a $5.6bn deficit in the first nine months of 2021. Oil production of 1.5m barrels per day is below the OPEC+ quota of 1.6m bpd, and the official target of 1.9-2.0m bpd, meaning there is scope for an increase in exports in 2023, assuming stable oil prices. Meanwhile, oilfield maintenance and an 85% dependence on Russian pipeline infrastructure are downside risk factors. The government is looking to reduce involvement in the FX market: The government is planning fiscal consolidation to reduce the breakeven oil price from a high $110-140 in 2021-2022 to a more comfortable $55-76/bbl to 2023-25. As a result, more FX oil revenues could be saved, reducing the gross spending of the sovereign fund to $7bn in 2023 from $9-11bn in 2021-22. However, the planned 3% GDP increase in non-oil revenues appears ambitious, and the actual conversion of FX oil revenues into KZT for state spending could be higher than officially planned in the event of non-oil revenue under-collection and higher than expected spending. Private capital flows remain uncertain: While the state capital flows, including the sovereign fund and foreign debt, are normally a mirror image of the current account, the private sector’s capital flows are subject to uncertainty. In the first nine months of 2022, private outflows (including unidentified operations) narrowed to $0.3bn vs. $3.8bn in 2021, in line with our expectations, due to the post-Covid recovery in corporate borrowing and the government’s capital repatriation measures. Continued capital inflows will require further progress in structural reforms, improvement in the global/regional risk appetite, and signs of a reversal in the nominal key rate trend, which is so far heading higher. USD/UAH: Central bank allows further depreciation   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/UAH 36.80 Neutral 40.00 40.00 38.50 37.70 37.00 Central bank: 2023 prospects for the hryvnia remain concerning. Analysts warn that the recent Russian mobilisation may prolong the conflict by at least several months. Moreover, the Ukrainian military progress may slow this winter after recent successes. This leaves the economy struggling with a massive trade deficit (US$5.4bn during the first eight months of 2023), largely reliant on international aid to shore up its FX reserves, currently at $25.2bn owing to a massive injection. However, while the scale of FX intervention has decreased markedly since its peak in July ($4bn), it remains considerable ($2bn in October). The very likely intensification of fighting in early 2023 may again push up the scale of FX intervention required to stabilise the currency. That is why we expect the central bank to allow for further depreciation of the hryvnia, possibly in the first half of 2023. Long-term view: The prospects for the Ukrainian currency largely hinge on the timing of an end to the conflict and the ensuing inflow of reconstruction aid. Various estimates indicate that the restoration may cost up to $750bn (or nearly four times the 2021 Ukrainian GDP). A fraction of this should suffice to drive USD/UAH lower, considering the costs of Ukraine’s FX intervention so far. New normal: Returning to pre-war USD/UAH levels is impossible, though. Given the massive damage to Ukraine’s infrastructure and means of production, the economy will for years remain dependent on investment-related imports. Even if those could theoretically be covered by inflows of foreign aid, the country will likely aim at maintaining a weaker hryvnia in order to support exports. USD/TRY: No relief in sight for TRY   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/TRY 18.60 Bullish 19.50 21.20 22.40 23.30 24.00 Central bank focus to keep financial conditions supportive: The Central Bank of Turkey (CBT) has delivered 350bp in cuts since August, pushing rates to 10.50%, while also signalling that the rate-cutting cycle will end in November at 9%. The reasoning behind the extension of the rate-cutting cycle at an accelerated pace remains the same. The CBT has cited the need for supportive financial conditions so as to preserve the growth momentum in industrial production and the positive trend in employment. Further signs of a slowdown in economic activity and the recovery in FX reserves since late July are likely factors for the cutting cycle. However, given tighter regulations on the asset side which selectively limit loan growth, cuts are not easing financial conditions quickly. Supportive fiscal stance and continuation of selective credit policy: The timing of the recently announced Credit Guarantee Fund package (reportedly at least TRY50bn) and any possible easing in macro-prudential regulations could reverse the recent momentum loss in lending ahead of elections, with the objective of further supporting domestic demand. Policymakers are also leaning towards a more expansionary stance on the fiscal side as the budget deficit, estimated in the Medium Term Program at 3.4% of GDP in 2022, has been rapidly increasing from c.1.4% in September. The budget deficit forecast for 2023 is 43% higher than this year's forecast. And we should not rule out a breach of this target as the elections approach – scheduled for June 2023. Inflation and external imbalances remain as major concerns: While the policy mix has tilted to a more supportive stance lately, sustained disinflation is not likely unless real rates are normalised. The recent steps are not sufficient to facilitate an external rebalancing which will be determined by the evolution of energy and gold imports. In this environment, TRY is likely to remain under pressure not only because of macro fundamentals but also because of the current unsupportive global backdrop. A recovery in FX reserves will be more challenging in this environment. USD/ZAR: Surprise fiscal outperformance   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/ZAR 17.20 Mildly Bearish 18.00 17.50 17.25 17.00 16.50 Some good fiscal news: For many years, the fiscal position has been the rand’s Achilles' heel, including the high-profile downgrade to junk status of its sovereign bonds in 2017 and their removal from key bond indices in the 2017-20 period. However, the October budgetary statement in parliament projected South Africa running a fiscal surplus next year and the country’s gross debt-to-GDP stabilising at lower and earlier-than-predicted levels. This has helped the sovereign five-year CDS retrace from the 360bp levels seen in late September. This suggests that if external conditions improve, the rand would be rewarded. Terms of trade will be key: As a high beta, EM commodity exporter, the rand is also very much driven by both commodity prices and China’s performance. Commodity prices and weak imports had helped South Africa’s current account position switch to a strong surplus in 2021 and early 2022. Into 2023, however, the South African Reserve Bank (SARB) forecasts the terms of trade declining 17% and the current account moving back into deficit. South Africa will also be playing its part in the energy transition as it switches from coal and the hope is that the nation’s electricity provider, Eskom, can find some stability if the sovereign assumes a big chunk of its debt. The profile: It seems as though international investors have started to find value in the rand when USD/ZAR trades at 18.50. We think it could trade there again into early next year if the Fed tightens US real rates still further. Yet the global stagflation story is well flagged and into 2023 we think investors could switch to a more reflationary mindset if it looks like the Fed is preparing to cut rates later in the year. Equally, it is hard to see investors remaining as pessimistic on China for the entirety of 2023. We therefore see USD/ZAR trading back to 17.00 and possibly even 16.00 as 2023 progresses. USD/ILS: Shekel well positioned when equities turn   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/ILS 3.40 Bearish 3.50 3.40 3.25 3.10 3.00 Equities a key driver: 2022 has proved a strange year for the shekel in that when the Bank of Israel (BoI) finally turned hawkish, and with good reason, the shekel sold off along with the rest of the EMFX complex. Recall that for many years the BoI had been battling shekel strength with a large FX intervention campaign. Apart from widespread dollar strength, it also does seem that the shekel is very much driven by equities. Here, declines in overseas (mainly US) equities markets drive margin calls to Israeli buy-side investors and generate shekel weakness. We tentatively expect this dynamic to reverse in the second quarter of 2023. Strong economy: The Israeli economy is expected to grow around 6% this year and 3% next year – even when the US and Europe are likely to be in a recession. Perhaps Israel should be warier of second-round inflation effects than most since the economy is operating above capacity and at full employment. However, the BoI hints that its tightening cycle might end around the 3% area and that inflation should come back into the BoI’s 1-3% target range by the end of 2023. The risks would seem to be skewed towards the BoI needing to tighten further. Why we like the shekel: Israel runs a 3%+ of GDP current account surplus, has strong domestic growth and a central bank not afraid to get involved in FX markets – meaning that shekel weakness will not be particularly welcome. In our experience, USD/ILS is always at the forefront of the dollar trend and if the dollar does turn in the first half of 2023 as we expect, USD/ILS should come a lot lower. Less concern over deflation by the BoI should mean that it will be more tolerant of USD/ILS breaking below 3.00 towards the end of 2023 – which could be the surprise. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Asia Morning Bites - 14.02.2023

Asia Forex Market: This Year Has Been Tough For Asian Currencies

ING Economics ING Economics 20.11.2022 12:04
This year has been tough for Asian currencies – hit by surging energy prices, the strong dollar, and in some cases central banks being a little slow to react. Their course in 2023 will again be determined by the dollar trend and also diverse local stories. We see 3-5% gains in Asian FX against the dollar in 2023, with the Korean won outperforming In this article Local and international factors are still uncertain Source: Shutterstock Local and international factors are still uncertain For all the effort that goes into forecasting Asian exchange rates, the last year has shown that apart from some short-lived deviations, dollar strength was the principal driving factor and EUR/USD provided perhaps the best clue as to both direction and magnitude. Within this period, there were times when other drivers took over – energy dependence was pivotal during the period immediately following the Russian invasion of Ukraine with the Indian rupee (INR) and Thai baht (THB) suffering badly while the Indonesian rupiah (IDR), Malaysian ringgit (MYR), and Australian dollar (AUD) outperformed. Then the differing inflation experiences, coupled with how much the respective central banks leaned against it, also held sway for a time. This saw the more interventionist economies (IDR, INR, PHP [Philippine peso]) which absorbed price pressures through fiscal buffers doing better at times compared to more market-oriented economies – such as the Korean won (KRW) – though this usually didn’t last. Then there were occasions when the more managed benchmark exchange rates of the region – chiefly the Chinese yuan (CNY) – would “reset” in response to local economic conditions and drag "satellite" currencies in north Asia along with it. In the end, though, perfect foresight of where EUR/USD was going would probably have been a better indicator than a full understanding of any of these other factors, and looking forward to 2023 we see few reasons why this should be much different over the coming 12 months. Asian Current a/c (% GDP) Refinitiv, ING   Our house view for EUR/USD still sees some near-term dollar strength, and for this reason, we anticipate there still being some more mileage in the weaker Asian FX story. But both the scale and duration of this residual USD-driven leg remain the subject of much debate. Any further aggressive USD appreciation could see the current account surplus economies of the region outperforming their peers (see chart). External balances across the region have been damaged by this year’s energy price spikes, although compared to the Asian Financial crisis in 1997, the region as a whole is still in a much healthier position with respect to external balances, FX reserves, and import cover (see also here).  At some point though, and possibly after some further Asian FX weakness, a number of factors will start to swing in the opposite direction. Local factors include: While still somewhat subdued, China’s economy will be in better shape in 2023 than it was in 2022. There are some tentative indications of a more nuanced approach to zero-Covid, and this may be amended further following the two sessions in March. The property development sector will still likely be a shambles, but its drag on the economy will be trending towards zero or small positives from the substantial negative in 2022. Either of the factors above may free up more fiscal resources at the local government level to push growth along. Across the rest of Asia, without a renewed energy price spike, local inflation rates should begin to moderate, allowing for some easing of policy rates and recovery of demand. Inflation already looks to be peaking in some economies and this trend is likely to spread. And while it may mean that policy rates can begin to be cut, the currency-relevant fact will be that negative real policy rates will shrink, and that could allow for some further currency strength. However, when the turn comes, how much further it has gone before this occurs, and how rapidly it reverses course, will be determined by a wide range of local and international factors, and remains the subject of considerable speculation. USD/CNY: Liquidity to remain ample   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/CNY 7.05 Neutral 7.22 7.35 7.25 7.18 7.13 Capital flows: Even though the yuan has been weak against the dollar, we have not seen net capital outflows reflected in the data. There are several possible reasons for this. More global asset indices include China's onshore assets in their portfolios. This can smooth out volatility as the Chinese market often has low correlations with other markets. Another more likely factor is that offshore Chinese entities could be remitting dollars to their onshore counterparts and then converting them to yuan. There has also been a higher trade surplus every month so far this year. All of this adds up to a strange pattern of weak yuan mapping with net capital inflows. This pattern could continue until the People's Bank of China (PBoC) believes that there is no more risk of quick and massive capital outflows. Macro backdrop: The Chinese economy has not been doing well in 2022 due to Covid measures, the real estate crisis, and recently, the slowdown in export demand from the US and Europe. Our GDP forecast for 2022 is only 3.3%. We believe that the Chinese government is gauging the risk to the healthcare system from re-opening by holding big events like the Beijing Marathon and Shanghai Expo. We may see some slightly more flexibility on Covid measures, but we believe that any important official announcement of Covid measures is more likely during the Two Sessions in March 2023. On real estate, more funding for local governments' 2023 budgets will be available by the end of 2022 via special bond sales. This should help local governments finish uncompleted homes faster. As such, there should be more construction activity in the first half of 2023 compared to the second half of 2022. But the risk of recession in the US and Europe will weigh on Chinese exporters and manufacturers, and therefore the jobs market. Due to the weakness of the economy, there is no inflation pressure and slight PPI deflation pressure in 2022. It is unlikely that high inflation will occur in China in 2023 given the weak economic prospects. With a low base effect and some improvements domestically, our GDP forecast for 2023 is 5.3%. PBoC and rates: The PBoC has not changed policy interest rates since August 2022, and the time before that was in January 2022. We believe that conventional monetary policy tools, that is, policy interest rates and required reserve ratio adjustments (RRR), are not efficient to tackle existing economic conditions from Covid measures and the real estate crisis. The PBoC has turned to lending to domestic development banks that in turn lend to local governments. This gives some breathing room on fiscal pressures. And this is more efficient as there is no lag time to get funding compared to commercial loan and bond channels. It is possible that the current practice will continue until some uncompleted homes are finished and Covid measures become more flexible. Consequently, we do not expect any change in policy interest rates in 2023. USD/INR: Real rates turn less negative   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/INR 81.10 Neutral 83.00 84.00 83.00 82.00 82.00 Capital flows: One of the factors providing support to the INR during the past year has been the expectation that Indian Government Securities (G-Secs) would be included in one or more of the global bond indices. That expectation got knocked back in early October this year, mainly on disagreements between JP Morgan and India’s Finance Ministry on settlement issues (India wants bond trades settled locally, not at Euroclear) and taxation (India is unwilling to treat foreign bond investors differently to local investors for the purposes of capital gains). There is still some scope for inclusion in 2023, but it doesn’t sound as if India’s government is all that willing to make concessions. There may be more scope for equities to draw in capital in the second half of fiscal 2023, as the dry spell in IPOs is thought likely to end with around INR10.5tr reported of approved capital raising and a further INR7tr awaiting approval. Macro backdrop: The Indian economy has not been immune to the global headwinds following Russia’s invasion of Ukraine and is particularly exposed to high energy prices given its large net importer position. Despite taking advantage of some cheaper Russian crude supplies and absorbing some price pressures through margins at state-owned petroleum companies and reduced import excise duties, inflation has still risen above 7%, and this has taken its toll on the growth outlook, with third-quarter 2022 GDP coming in slower than expected, and putting previous expectations of a 7% growth rate for 2022 out of reach. We now look for growth of 6.3% in the calendar year 2022. This is still one of the highest rates of growth in Asia, and there is scope for some firming of the growth environment next year if there are no further price shocks.   RBI and rates: After abandoning its awkward dance of trying to support both growth and leaning against rising prices in early April this year, the Reserve Bank of India (RBI) has taken a steadfast and convincing stance against inflation, taking the repo rate from its low of 4.0% up to 5.9% currently. We look for a further 25bp of rate increases in December, and perhaps another 25bp in February, taking rates to 6.4%. But by then, we may well see inflation coming off its highs, which could leave the real (adjusted for actual inflation) policy rate close to zero, rather than its current strong negative rate. This could mark the peak for the RBI, as inflation should fall further from this point, enabling real policy rates to float back into positive space. USD/IDR: Bank Indonesia to step up rate hikes   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/IDR 15540.00 Neutral 15850.00 15950.00 15800.00 15700.00 15600.00 Trade balance support could fade: The IDR was well supported by inflows related to trade for the most part of 2022. Exports managed to easily outpace imports this year as the export sector benefited from the surge in global commodity prices. Trade surpluses hit a record high in April ($7.5bn) but have since narrowed with the latest surplus down to $4.9bn. Slowing global trade and a dip in coal prices point to a further narrowing of the trade surplus which would impact Indonesia’s current account balance. Bank Indonesia (BI) expects the current account to settle between 0.4-1.2% of GDP for 2022 but revert to a deficit in 2023. This suggests that key support for the IDR in 2022 will not be around next year resulting in sustained pressure on the currency.   Macro backdrop: Indonesia has strung together six quarters of positive growth, rebounding quickly from the pandemic-induced recession in 2021. Growth got a boost from exports, which in turn helped support the recovery of the manufacturing sector. Meanwhile, relatively subdued inflation in the first half of 2022 helped support domestic consumption with retail sales benefiting from increased mobility. Inflation, however, has finally picked up in recent months and is likely to accelerate further after the government increased the price of subsidised fuel. The recent weakness experienced by the IDR has also contributed to higher inflation, a trend that should extend to 2023. Accelerating inflation is likely to cap consumption growth in the coming quarters while expectations for slower global trade suggest that exports will be subdued going into 2023. With the projected slowdown in the second half of 2022, we expect full-year growth to settle at 5.2% year-on-year in 2022 while 2023 growth could slip to 4.4%.  Central bank to stay hawkish: Bank Indonesia was a latecomer in terms of rate hikes in 2022 as inflation stayed relatively subdued for the first half of the year. Faster inflation by the second half of the year prodded the previously reluctant central bank to finally increase policy rates in a surprise move in August. BI has since been actively tightening, increasing rates by 75bp so far, and will likely need to continue tightening to support the IDR well into 2023. BI Governor Perry Warjiyo previously highlighted his preference for a stable currency, and we expect BI to hike rates by at least 100bp to help steady the IDR. USD/KRW: Second half of 2023 to be better for Korea and the won   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/KRW 1320.00 Mildly Bearish 1350.00 1400.00 1350.00 1300.00 1250.00 Capital flows: Foreigners have been net sellers of the Korea Composite Stock Price Index (KOSPI) until recently, but we see foreign investors coming back to the Korean equity market, as the sharp outflows have stagnated over the past few months. We believe that the KOSPI will benefit from an asset allocation perspective as the China-US conflict intensifies, and thus decoupling with the Chinese market is expected to some extent. On the bond side, Korea has been added to the watch list for World Government Bond Index (WGBI) inclusion and it is possible to join the WGBI next year at the earliest. This is a positive factor providing support for the Korean won and Korean authorities appear to believe inclusion is very promising. Several new initiatives including the exemption of the withholding tax, reforms to improve accessibility to the KRW market, and Korean treasury bond (KTB) trading via ICSD (International Central Securities Depositories) were proposed to improve the structure and accessibility of its capital market for investors. Macro backdrop: The Korean economy is heavily dependent on exports and is a net energy importer. The trade deficit will continue for some time as semiconductor exports continue to struggle while energy prices remain high. We expect the current account to be in a surplus, but weak trade performance will weigh on the currency markets.   BoK and rates: The Bank of Korea (BoK) has been one of the fastest-moving central banks in the race to raise rates since last year and is expected to become one of the fastest-moving to cut rates next year. We expect a 25bp hike in November, and perhaps another 25bp in January, taking rates to 3.50%. But the BoK is likely to go into a wait-and-see mode afterwards, as inflation is expected to slow to below 4% and fall further. To lighten the burden for businesses and households, the BoK will likely enter into an easing mode from the second half of next year. USD/PHP: How much longer can BSP hold the line?   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/PHP 57.20 Neutral 58.75 59.00 58.50 58.00 57.50 Current account woes to persist: The Philippines is highly dependent on imported food and energy items and has traditionally run trade deficits. Elevated global commodity prices bloated the import bill resulting in a record-wide trade shortfall. Contributing to the stark widening of the trade deficit was the economic reopening after mobility restrictions were finally relaxed in the first half of the year. Resurgent domestic demand also resulted in increased capital and consumer goods imports which were enough to push the current account into a deficit. The trade balance and current account are likely to remain in deficit in 2023, especially if commodity prices stay elevated. The central bank expects the current account deficit to widen to roughly $19bn in 2022 and $20bn in 2023, suggesting that pressure on the PHP will persist next year.    Macro backdrop: The Philippines posted solid growth numbers in the first half of 2022 after the national government relaxed mobility restrictions after improvements in Covid-19 containment. The reopening of the economy helped along by election-related spending powered strong growth for the first half of the year (7.7%). The second half of the year, however, presents a much more challenging landscape, which also marks a change in leadership after Ferdinand Marcos Jr. won the presidential election in May. Surging inflation on top of rising borrowing costs is likely to translate to a significant slowdown in growth for the second half of 2022 and the whole of 2023. We expect inflation to hit 5.6% year-on-year in 2022 and stay elevated at 5.0% in 2023, which would translate to 5.9% YoY growth in 2022 and 4.4% in 2023. Busy year for BSP: It has been a busy year for the Bangko Sentral ng Pilipinas (BSP). The central bank faced a quick acceleration in price pressures as well as a change in leadership after the presidential election. Given the country’s dependence on imported energy and food, price pressures rose quickly to drive inflation well-past target (currently at 7.7% YoY). Several deadly typhoons also pushed up food prices after the storms caused significant crop damage. The BSP responded with several rate increases, even resorting to an off-cycle decision in July as well as a pre-announced rate increase which will take the policy rate to 5% by November. BSP Governor Felipe Medalla, who assumed his post in July, vowed to match any move by the Federal Reserve in the coming months and maintain a 100bp differential with the Fed funds target rate. We expect BSP to take the policy rate to 5.5% by year-end with at least an additional 50bp worth of rate hikes in 2023 should the Fed continue to raise rates.    USD/SGD: MAS waits for recent tightening to take hold   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/SGD 1.37 Neutral 1.39 1.40 1.38 1.375 1.37 Growth outlook: Singapore has managed to post decent growth in 2022 despite the increasingly challenging global backdrop. Relatively robust trade activity in the first part of 2022 has helped support growth momentum although we have noted a slight deceleration of late. Meanwhile, retail sales recorded a steady pace of expansion despite the sharp uptick in prices. One possible development that could be supporting retail sales is the sustained influx of foreign visitors which may be driving the consistent growth of sales for department stores and recreational goods. Retail sales growth could help offset the projected slowdown in global trade somewhat and we expect Singapore growth to settle at 3.5% YoY in 2023.        GST to add to inflation pressure in 2023: Surging global commodity prices and robust domestic demand resulted in faster price increases for Singapore with core inflation rising 5.3% YoY as of September. The Monetary Authority of Singapore (MAS) now expects headline inflation to settle at 6% YoY for 2022 and between 5.5-6.5% in 2023 given current developments and the scheduled increase in the Goods and Services Tax (GST) from 7% to 8% next year. Risks to the inflation outlook remain skewed to the upside, especially if commodity prices stay elevated in 2023. A prolonged period of high commodity prices should eventually evolve into additional second-round effects that would fan both headline and core inflation.             MAS tightens aggressively: The MAS has been busy over the past few months, surprising market participants by tightening unexpectedly in October 2021, the first of five separate moves to tighten monetary policy. Given surging core inflation, MAS needed to tighten policy aggressively with two of the moves carried outside of scheduled meetings. The MAS is likely to remain hawkish given expectations that core inflation will average 3.5-4.5% YoY in 2023 and stay elevated until the second half of next year. We believe, however, that the MAS would be less aggressive in tightening should it need to act as it monitors the impact of its aggressive tightening moves. USD/TWD: Wider differentials weigh on TWD   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/TWD 31.00 Neutral 32.40 33.00 32.00 31.70 31.40 Capital flows: The weakness of the New Taiwan dollar (TWD) in 2022 mainly comes from net capital outflows of foreign investments in Taiwan’s equity market. The net outflows year-to-date amounted to $48.2bn as of 7 November. This is a lot compared to historical data of the next biggest outflows at $15.6bn in 2021, which was itself bigger than the outflows of $15.5bn in 2008. Capital outflows from the equity market have led to a fall in foreign exchange reserves of $5.62bn. Offloading of Taiwan equities should continue in 2023 as semiconductor sales should fall further as a result of the expected recession in the US and Europe and weak demand in China. Macro backdrop: Taiwan enjoyed strong semiconductor sales in the first half of 2022, but after this the economy turned sour when Covid hit, and then weakened further when weak demand in China led to a fall in semiconductor sales. Adding to this pressure is softer demand for smart devices in 2022. As the Taiwan economy specialises in semiconductor manufacturing and sales, it is prone to external economic conditions. Taiwan did experience some higher-than-normal inflation of around 3.5% YoY in the first half of 2022. But this was then followed by softer inflation pressure in the second half of 2022 as the economy slowed. For 2023, we believe that semiconductor sales will continue to fall as a recession in the US and Europe is likely in the first half of 2023, and China’s consumption demand will remain weak due to Covid measures and the ongoing real estate crisis. Taiwan's central bank and rates: As Taiwan has not encountered as high inflation as the US, Taiwan’s central bank has raised interest rates at a much slower incremental pace than the Fed. As of November 2022, Taiwan’s central bank had raised rates by just 0.5 percentage points in 2022, which is much smaller than the Fed’s 3.75 percentage points. This is one of the reasons why TWD has fallen over 15% so far in 2022. If the Fed pauses its hiking in 2023, the interest rate differential should stop widening. TagsFX Outlook FX Currencies Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Latam FX Outlook 2023: Brazil's Local Currency Bonds Can Be Very Attractive

Latam FX Outlook 2023: Brazil's Local Currency Bonds Can Be Very Attractive

ING Economics ING Economics 20.11.2022 12:24
When putting together our Latam FX outlook this time last year, we speculated on the ‘Return of the Pink Tide’ or a leftward shift in local politics. That has indeed materialised in presidential elections in Colombia, Chile and Brazil. We think 2023 will be another tricky year for Latam and continue to favour Mexican peso outperformance Source: Shutterstock Real rates in focus in Brazil The leftward shift in Latin politics in 2022 has had a mixed effect on local currency markets. The election of left-leaning presidents in both Colombia and Chile has, rightly or wrongly, been associated with heavy currency falls. The pesos of Colombia and Chile are down 15% and 5% year-to-date against the dollar. The Brazilian real on the other hand has until very recently been the darling of the EM FX world, delivering 5% nominal gains and much more when taking Brazil’s attractive carry into account. The Mexican peso has also done well with a 5% year-to-date gain. Turning first to Brazil. The independent central bank moved early and aggressively with tighter policy to contain inflation. The policy rate is now 13.75% and headline inflation has already corrected to 7% from 12% – leaving Brazil with very attractive real interest rates. The market is starting to price a 200bp easing cycle for the second half of 2023, which in theory could make Brazil's local currency bonds very attractive. Our concern for the real, however, is that former President Lula has been re-elected on a ticket of welfare spending. Brazilian growth may sink from near-3% this year to close to zero next year. And in a difficult international environment for bond markets, fiscal pressure could see the real ending the year much weaker than the 5.15 USD/BRL levels expected by the consensus. Chile’s Achilles' heel is its large current account deficit – worth 8% of GDP this year and only expected to narrow to a 5% deficit next year. Sizable current account deficits are a distinct disadvantage at a time when core rates are rising and abundant liquidity is being withdrawn. USD/CLP will likely make another run at 1000 and despite securing an IMF Flexible Credit Line, we expect the peso to remain vulnerable – especially in early 2023 when China remains weak and the dollar strong. Interestingly, the IMF recommends that Chile substantially restore its FX reserves – arguing that even in the good times, USD/CLP will not spend too much time below 900. Turning finally to Mexico, we feel the peso has a lot going for it. Banxico’s efforts to effectively manage USD/MXN near 20 stand to create the virtuous cycle of lower volatility and higher risk-adjusted returns. We much prefer the Mexican peso to Brazilian real exposure, given that the real trades on nearly twice the volatility as the peso. Mexico also looks much better placed in terms of debt, and its higher sovereign rating should provide some protection in the face of deteriorating external conditions. Finally, Mexico could become a major beneficiary of ‘nearshoring’ following recent supply chain challenges over the past three years – suggesting Foreign Direct Investment trends should be monitored carefully in 2023. Real interest rates in Latam seem attractive... Source: Refinitiv, ING USD/BRL: Fiscal challenges   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/BRL 5.30 Bullish 5.50 5.75 5.80 5.90 6.00 How fiscally aggressive can Lula be? A ‘resurrection’ is how President-elect Lula describes his return to office after narrowly beating the incumbent Bolsonaro in a second-round run-off. His pitch for a return to office was very much one based on welfare support and also a complete reversal of Bolsonaro’s free-market approach to the Amazon. Brazilian assets initially responded positively to Lula’s win in that he may be fiscally limited due to right-wing politicians having done well in congressional elections. Hence, Congress could prevent fears of unfunded social giveaways exacerbating what is likely to be an annual budget deficit of 7% of GDP and debt to GDP heading towards 90% next year. Why we are more bearish on BRL: Consensus expects USD/BRL to head back down to the 5.15 area by the end of 2023. The view here is that inflation has topped and that Brazil’s central bank can embark on a 200bp easing cycle in the second half of 2023, which should be good for the local currency bond market. We are a little more concerned that the legacy of a near 14% policy rate will be much weaker growth in Brazil next year, which will bring fiscal pressure to the fore in what will still be a challenging year for bond markets. After all, Brazil’s five-year sovereign CDS trades near 280bp for a reason. Any changes in the fiscal rules would be negative. Greater links with China?: The return of President Lula could also re-invigorate the BRICS geopolitical grouping. Where that goes in 2023 remains to be seen, although there was at some stage a suggestion of working towards some kind of BRICS currency arrangement. We doubt that Brazil would want to get entangled with such a venture, but any higher profile of the BRICS would serve as a reminder of Brazil’s heavy trade links with China – 31% of Brazil’s exports went to China in 2021. Sluggish Chinese growth could prove a headwind to Brazilian exports and push Brazil’s current account deficit towards 2% of GDP next year. USD/MXN: Peso enjoys high, risk-adjusted yield   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/MXN 19.40 Neutral 20.00 20.00 19.50 19.25 19.00 High yields, less volatility: In tracking Fed tightening this year, Banxico deserves a lot of credit for keeping USD/MXN stable. Here, three-month realised volatility is just 9.9% compared to 19.3% for USD/BRL. In response, expected volatility is substantially lower for USD/MXN as well. This has implications for the ‘carry-to-risk ratio’ – or risk-adjusted yield which is now 50% higher for the Mexican peso versus the Brazilian real. Barring Banxico ending its tightening cycle well ahead of the Fed, we expect USD/MXN to remain relatively well-contained near or under 20.00 over the next three-to-six months even as external market conditions deteriorate. Mexico well-placed for nearshoring: Disruptions to global supply chains from the pandemic and this year’s Russian invasion of Ukraine have questioned globalisation and raised the prospects of ‘friendshoring’ or ‘nearshoring’ – i.e. moving supply chains closer to home. Mexico stands to benefit from US nearshoring, sharing as it does a land border with the US and now engaged in a new USMCA trade deal. Mexico features prominently in the White House’s supply chain resilience plan, focusing on semiconductors, batteries, critical minerals, and pharmaceuticals. At $3.50/hour, Mexico’s average manufacturing industry wage compares very favourably with the US ($30/hr), but also with Latin America, e.g. Brazil and Chile at $4.71 and $5.74/hr, respectively.   Remittances still rising: Remittances back to Mexico from the US are still rising and are currently worth $5bn per month. Presumably these slow at some stage when US unemployment turns higher, but they have proved remarkably resilient so far. Mexico also has a relatively modest current account deficit of less than 1% of GDP – making remittances quite meaningful. In terms of politics, it is not clear how much President Andres Manuel Lopez Obrador can get done before elections in the summer of 2024, but his fiscal rectitude during the pandemic certainly provides insulation as global borrowing costs continue to rise. Investors continue to see Mexico as a good quality credit, trading its five-year sovereign CDS at around 140bp, compared to 280bp for Brazil.  USD/CLP: Growing pains   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/CLP 885.00 Neutral 950.00 1000.00 950.00 925.00 900.00 Controlling social tension in a recession: Left-wing President Gabriel Boric was voted into office in March 2022 on a ticket for social reform. This followed the widespread social uprising in 2019. President Boric has struggled to make progress here, with his constitutional reform package widely rejected in September – providing somewhat of a reprieve to the mining industry. 2023 stands to prove a difficult year for Chile. The IMF projects the economy will contract 1.3% next year and unemployment will rise. Balancing how to advance social reform, while keeping the mining industry onside – softening mining taxes being a recent example – will be a major challenge.   Where’s copper heading? As the largest copper producer in the world, the Chilean peso is very much driven by these prices. USD/CLP hit 1050 in July and had to seek IMF support when copper fell 25%. Our commodities team believes copper will struggle over the next six months. Incidentally, participants at the recent London Metal Exchange (LME) gathering were quite split on copper’s path. Our house view is that the continued weakness in China’s construction sector amidst the over-supply in the residential sector will keep copper on the back foot for the next three-to-six months. Equally, widespread labour unrest in the industry is hitting Chile’s copper production, recently running at a 16-year low. Limited scope for FX intervention: The exchange rate has proved a useful shock absorber for Chile’s economy. The macro imbalances created by strong consumption during the pandemic – leaving Chile with an 8% of GDP current account deficit – make the peso vulnerable to the international environment. Chile has lost 17% of its FX reserves in defence of the peso this year. And whilst it does have the precautionary support of an $18bn IMF Flexible Credit Line, it will not want to use it. A strong dollar environment into year-end and potentially through 1Q23 can see USD/CLP head back to 1000 and perhaps also drag the local central bank into some further tightening. Interestingly, the IMF has also said that Chile needs to rebuild FX reserves, suggesting USD/CLP struggles to trade under 900 on a sustained basis over the next couple of years. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Forex: What to expect from British pound against US dollar - January 17th

There Was Justification For The Pound (GBP) To Increase This Week

InstaForex Analysis InstaForex Analysis 20.11.2022 12:29
Long-term outlook. The GBP/USD currency pair has risen by only 30 points in the current week. Remember that a week ago, the increase was 500 points. As you can see, traders ignored the report on American inflation, which caused the dollar to fall sharply in recent weeks. Rather than inflation, the decrease in the likelihood of aggressive tightening of the Fed's monetary policy is to blame. But remember that this was known even before the inflation figures were released because the Fed cannot keep raising interest rates indefinitely. It is currently 4%, with a maximum level of 5% considered. As a result, a "slowdown" had to occur in any case, and the market had to be prepared for it. Another issue is the Bank of England and the British pound. Sincerely speaking, traders have no interest in the work being done in Britain by the regulator. Remember that at least seven of the BA's eight rate hikes went unheeded, and this week the UK's inflation rate updated a record set 40 years prior without causing the pound to make a significant rise or decline. The report on British inflation is generally identical to the report on American inflation. If the consumer price index continues to rise, the Central Bank's aggressive monetary policy will be more likely to be maintained. There was justification for the pound to increase this week. In the end, neither the first nor the second occurred. As a result, this report was ignored by the market. The same is true of the budget proposal that UK Treasury Chief Jeremy Hunt unveiled on November 17. Taxes won't significantly increase, but the cutoff points for applying various tax rates will be adjusted. In other words, because their annual incomes are now considered higher than before, those who previously paid at a lower rate will now pay a higher rate. Additionally, it was revealed that Liz Truss had underestimated the amount of money given to the British people as compensation for their electricity bills. Even so, this news did not significantly impact the pair's movement. Technically speaking, the pound and the euro are trading almost identically once again and continue to have the same chances of growth. COT evaluation. The "bearish" sentiment continued to weaken, according to the most recent COT report on the British pound. The non-commercial group closed 1,900 buy contracts and 8,800 sell contracts for the week. As a result, non-commercial traders' net position increased by 7,000. The net position indicator has been gradually increasing over the past few months. However, the major players' outlook is still "bearish," and despite the pound's recent rise, it is not yet clear that it is getting ready for a protracted upward trend. Furthermore, if the situation with the euro is anything to go by, it is improbable that the pair will experience significant growth based on COT reports. The market is waiting for new geopolitical shocks to return to dollar purchases, as demand for the US currency remains very high. The non-commercial group has now opened 67,500 sales contracts and 34,500 purchase contracts. As we can see, the difference is still significant. Remember that the euro cannot show strong growth while major players are "bullish." In terms of the total number of open buy and sell positions, the bulls have a 17-thousand-position advantage. However, as we can see, this indicator only helps the pound a little. Despite technical grounds for doing so, we remain skeptical of the British currency's long-term growth. Fundamental event analysis This week, several significant reports were released in the UK. Naturally, the inflation report comes first. It has already increased to 11.1% y/y and should, in theory, cause a significant market response. Additionally, there were reports on average wages (+6%), retail sales (+0.6% m/m in October), and unemployment (growth to 3.6%). The other reports, on the other hand, were even less likely to elicit a response if inflation did not. The growth potential of the pound sterling has been reached at this point. We stated a week ago that all technical indicators supported the pair's medium-term growth, but now we require a slight downward correction. The outcome is unchanged as of right now. Trading strategy for the week of November 21–25: 1) The pound/dollar pair has broken through the Ichimoku indicator's key lines, giving it the technical support necessary to establish a new long-term upward trend. We continue to be dubious about this possibility because we must see clear fundamental and geopolitical justifications. Still, we also understand that the couple can survive on nothing but technology. 1.2080 and 1.2824 are the closest targets; 2) The pound has advanced significantly, but it is still challenging to wait for rapid growth. The pair's decline can resume with targets in the range of 1.0632-1.0357 if the price fixes back below the Kijun-sen line. Sales, though, are no longer important. Explanations of the illustrations: Price levels of support and resistance (resistance and support), Fibonacci levels – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger Bands (standard settings), MACD (5, 34, 5). The net position size of each trading category is represented by Indicator 1 on the COT charts. The net position size for the "Non-commercial" group is indicated by indicator 2 on the COT charts. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327566
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

In Contrast To The ECB, The Fed Will Keep Raising Interest Rates

InstaForex Analysis InstaForex Analysis 20.11.2022 12:38
Long-term outlook. The EUR/USD currency pair moved slowly during the current week, resulting in no significant price changes. We predicted a significant downward correction at the start of this week, but it has yet to materialize. Traders have been trying to decide whether to continue making speculative purchases of the euro currency or to return to a more stable dollar. The market was uninterested in the fundamental events that occurred. For example, the European Union's October inflation report was only the second assessment with which everyone was already familiar. As a result, the market did not react to the 10.6% y/y increase in inflation. The US elections were incredibly fascinating, but it's fair to say that the outcomes were predictable. Republicans narrowly won the House of Representatives, while the Democrats kept control of the Senate with a majority. Given that they previously held control of both chambers of Congress, the Democrats' situation has worsened. In contrast, many American journalists and experts refer to this loss as "the defeat of the Republicans" because of the Republicans' confidence in the prospect of a decisive defeat. Many believed that Donald Trump, the party's leader, was laying the groundwork for the elections of 2024. He congratulated the Republicans on their victory and asserted that it was his merit before the vote count was finished. Trump then began his favorite record about "numerous violations at polling stations" after it became apparent that there would be no victory in the Senate and a slight advantage in the House of Representatives. In the end, he did submit a formal application to run in the 2024 presidential election. Recall that the Democrats receive the most criticism from Americans regarding high inflation and the current economic downturn. Inflation can safely return to 2% over the following two years, and the recession can end without actually beginning. Therefore, we predict that Biden will win a second term in office rather than Trump winning another term as US president in 2024. COT evaluation. The predictions from the COT report for the euro in 2022 are paradoxical. They displayed the openly "bullish" attitude of professional traders for the first half of the year, but the value of the euro was steadily declining at the same time. Then they displayed a "bearish" attitude for a while, and the value of the euro also steadily declined. The euro has barely budged from its 20-year lows, and the net position of non-profit traders has turned bullish again and is strengthening. As we've already mentioned, this is taking place due to the continued high demand for the US dollar against a challenging geopolitical backdrop. As a result, although demand for the euro currency is rising, the strong demand for the dollar prevents the euro currency from experiencing significant growth. The number of buy-contracts from the "non-commercial" group increased by 7,000 during the reporting week, while the number of shorts decreased by 2,000. The net position consequently increased by roughly 5,000 contracts. Recent weeks have shown a gradual increase in the value of the euro, which already accords with the COT report's indications. However, the geopolitics are likely to remain the same, or there may not be enough reasons for the euro to continue to grow. The upward trend may end as the green and red lines of the first indicator are very far apart from one another. For non-commercial traders, there are 113 thousand more buy than sell contracts. As a result, although the net position of the "Non-commercial" group may continue to increase, the euro may not experience a similar increase. Sales are 39 thousand more if you look at the overall open long and short position indicators for all trading categories (635k vs. 596k). Fundamental event analysis This week, there were no significant macroeconomic reports. Last week, when the US inflation report had the effect of a bomb detonating in the market, traders were very active in buying the pair. However, we stated that while the reaction in the form of a fall in the dollar is quite logical, the strength of its fall raises concerns. The inflation report wasn't so significant or shocking that traders started selling off US currency in large quantities. Many people are still determining the best course of action when buying the euro currency, which appears to be in the early stages of developing a new upward trend. In contrast to the ECB, the Fed will keep raising interest rates. Furthermore, neither the timing nor the identity of the party whose final bid will be higher is known. Technical factors favor the euro, and the fundamental environment offers limited support for this currency. Trading strategy for the week of November 21–25 : 1) The pair crossed all of the Ichimoku indicator's lines in the 24-hour time frame, giving it a real chance of long-term growth for the first time in a long time. Of course, if geopolitics deteriorates again, these opportunities could vanish quickly. However, we can confidently anticipate an upward movement with a target of 1.0636 (100.0% Fibonacci) and cautiously buy the pair. 2) The sales of the euro/dollar pair are no longer significant. You should now wait for the price to return below the important Ichimoku indicator lines before thinking about short positions. Explanations of the illustrations: Price levels of support and resistance (resistance and support), Fibonacci levels – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger Bands (standard settings), MACD (5, 34, 5). The net position size of each trading category is represented by Indicator 1 on the COT charts. The net position size for the "Non-commercial" group is indicated by indicator 2 on the COT charts.     Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327564
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The British Pound (GBP) May Resume Its Bullish Cycle

ING Economics ING Economics 20.11.2022 12:41
Early in the American session, the British pound (GBP/USD) is trading around 1.1901, above the 21 SMA and below the strong resistance of 1.1962 (+1/8 Murray). According to the 4-hour chart, the latest candlesticks show that the pound is showing some exhaustion of the bullish force and a technical correction could follow if GBP/USD breaks and consolidates below 1.1873. On the other hand, the pound is likely to consolidate below 1.1962-1.1880 in the next few hours. If the price manages to break below the 21 SMA (1.1873), this level could give an opportunity to continue selling with targets at 1.18 and 1.1718 (8/8 Murray). This level coincides with the bottom of the uptrend channel and could offer a technical bounce. Additionally, a sharp break below the 8/8 Murray and the uptrend channel formed since the beginning of November could mean a change in trend and the pound could fall rapidly towards the psychological level of 1.15 and even towards the area of 7/ 8 Murray located at 1.1473. On the other hand, for the pound to resume its bullish cycle, we should expect a daily close above 1.1970. Above this level, we could expect the pound to reach the psychological level of 1.20 and even +2/8 Murray located at 1.2207. The eagle indicator is at a turning point. It remains above an uptrend line, which gives us a positive signal. On the contrary, in case the moving average of the indicator breaks this support, we could expect a pound to fall towards the zone of 1.1718 in the coming days.     Relevance up to 16:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301662
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange Most Of Securities Rose

InstaForex Analysis InstaForex Analysis 21.11.2022 08:00
At the close of the New York Stock Exchange, the Dow Jones rose 0.59%, the S&P 500 rose 0.48% and the NASDAQ Composite rose 0.01%. Dow Jones UnitedHealth Group Incorporated was the top performer among the Dow Jones index components in today's trading, up 14.69 points or 2.85% to close at 530.00. Quotes of Cisco Systems Inc rose by 1.20 points (2.58%), closing the session at 47.79. Merck & Company Inc rose 1.92 points or 1.88% to close at 104.23. The least gainers were Salesforce Inc, which shed 1.65 points or 1.10% to end the session at 148.04. Walgreens Boots Alliance Inc was up 0.95% or 0.38 points to close at 39.75 while Chevron Corp was down 0.60% or 1.10 points to close at 182. .99. S&P 500 Among the S&P 500 index components gainers today were Ross Stores Inc, which rose 9.86% to hit 107.59, Gap Inc, which gained 7.55% to close at 13.67, and shares of Lincoln National Corporation, which rose 4.37% to close the session at 37.73. The least gainers were Live Nation Entertainment Inc, which shed 7.85% to close at 66.21. Shares of Fortinet Inc lost 3.66% to end the session at 52.16. Diamondback Energy Inc lost 3.44% to 156.22. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were AGBA Acquisition Ltd, which rose 50.67% to hit 6.78, Paxmedica Inc, which gained 37.42% to close at 2.13, and shares of Mercurity Fintech Holding Inc ADR, which rose by 32.91%, ending the session at around 1.05. Shares of Kiora Pharmaceuticals Inc were the biggest losers, losing 35.85% to close at 3.83. Shares of Bit Origin Ltd lost 29.80% and ended the session at 0.15. Quotes of InMed Pharmaceuticals Inc decreased in price by 28.13% to 2.76. Numbers On the New York Stock Exchange, the number of securities that rose in price (1884) exceeded the number of those that closed in the red (1211), while quotes of 138 shares remained virtually unchanged. On the NASDAQ stock exchange, 1985 companies rose in price, 1772 fell, and 237 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 3.38% to 12/23. Gold Gold futures for December delivery lost 0.66%, or 11.65, to hit $1.00 a troy ounce. In other commodities, WTI crude for December delivery fell 1.73%, or 1.41, to $80.23 a barrel. Futures for Brent crude for January delivery fell 2.17%, or 1.95, to $87.83 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged at 0.36% to 1.03, while USD/JPY rose 0.13% to hit 140.37. Futures on the USD index rose 0.25% to 106.86. Relevance up to 03:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/301736
The Price Of USD/JPY Pair Has To Fight With The Resistance Level

The USD/JPY Pair Is Waiting For Developments

InstaForex Analysis InstaForex Analysis 21.11.2022 08:01
On Friday the USD/JPY pair broke away from the embedded price channel line of 139.65 with the intention to reach the resistance of the upper nearest line around the 141.76 mark. The pair continues to rise in today's Asian session. After reaching 141.76, the price could go back to 139.65 or even lower, to 138.55. Falling below 139.65 will also make the 138.55 target available. Staying under this level opens the 136.80 target. The price is trying to overcome the MACD line on the four-hour chart. A downward reversal from it is the basis for the current price reversal from the current levels. The way to 141.76 will open up when the price settles above the MACD line. The signal line of the Marlin Oscillator moves almost horizontally, neutrally. We are waiting for developments. Relevance up to 03:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327602
The Data May Keep The British Pound (GBP) From Rising

The Price Of GBP/USD Pair Is Currently Struggling With The Support

InstaForex Analysis InstaForex Analysis 21.11.2022 08:06
After three days of the pound's unsuccessful attacks on resistance at 1.1940, the price is now pulling back with the intention to overcome support at 1.1737. This is indicated by the Marlin Oscillator intensifying the downward movement after creating a divergence with the price. Settling below 1.1737 would open the 1.1500 target. On the four-hour chart, the price is currently struggling with the support of the balance line indicator, a withdrawal under which can develop a decline in the medium term. The MACD line is at the 1.1737 level, accordingly, overcoming this support will strengthen the pound's downward mood in the medium-term. The price is currently regaining the initial impulse, set by the reversal of the Marlin Oscillator from the zero line (arrow).     search   g_translate     Relevance up to 03:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327604
The Euro To US Dollar Instrument Did Not Change In Value

The Bears Of The EUR/USD Pair Will Soon Take The Target Level

InstaForex Analysis InstaForex Analysis 21.11.2022 08:10
On Friday, the euro managed to settle below the upper limit of the wide range at 0.9710-1.0360. The Marlin Oscillator is now moving downwards. Apparently, the bears will soon take the target level of 1.0205. On the four-hour chart, the price has already crossed the balance indicator line (moving red). The Marlin Oscillator continues to move down in the territory of negative values. After crossing the MACD line (1.0275) the price will continue to move to the target support of 1.0205. Settling below the level opens the target range of 1.0100/20. Relevance up to 03:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327606
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

There Is A Chance That Europe Will Experience A Recession

InstaForex Analysis InstaForex Analysis 21.11.2022 08:17
As it has been for the past week, the EUR/USD currency pair continued its impressive growth on Friday. Therefore, no significant price changes have taken place. The illustration below shows that last week's volatility was not low, but the lack of trend movement gives the impression that the pair barely moved from its position. The European Union only experienced a few noteworthy events. In reality, the market received no new information from Christine Lagarde's two speeches, and the second assessment's report on inflation rarely caused a market reaction. Since we have stopped expecting to see a flat on the 4-hour TF in recent months, it took time to understand last week why the pair was neither rising nor falling. Regarding the other fundamental background, traders were not particularly interested in the results of the US congressional elections because nothing else was more interesting. Remember that the pair haven't grown reasonably over the past few weeks; as a result, we anticipated a strong correction last week. In any case, there is no reason for the euro to keep rising. As a result, if the correction did not occur last week, it should occur this week. At least temporarily, a downward trend will be announced if the price is fixed below the moving average line. A new week without any events in the EU. There won't be much to highlight from this week's significant events in the European Union. Speaking engagements by ECB officials, including Vice-Chairman Luis de Guindos, will take place on Monday, Wednesday, Thursday, and Friday. Even Christine Lagarde was unable to persuade the market of the significance of her speeches last week, which may be why this is interesting. Less significant ECB monetary committee members are also likely to be unsuccessful. The market is now aware that the ECB will keep raising the key rate, and it is unlikely that their members' public statements will suddenly change dramatically. As a result, we don't have high expectations for these performances. There is nothing noteworthy to highlight other than the performances. The November manufacturing and business activity indices will be released on Wednesday, and it is anticipated that all three indices will remain below the critical level of 50.0. There will only be a response to these reports if there is a significant departure from the previous month's values. Christine Lagarde acknowledged that economic and commercial activity would need to be sacrificed to lower inflation. Therefore, it won't surprise us if these indicators continue to decline. There is a chance that Europe will experience a recession, but it is unlikely that it will be severe. The market is no longer motivated to predict the EU economy's decline because it is a well-known and well-established fact. Geopolitics and central bank rates continue to be the most significant factors. Everything is more or less clear when looking at the rates. The Fed will gradually tighten monetary policy to raise the rate to 5%. The European Central Bank must aim for 5%, but it is highly unlikely that the economies of many nations can withstand such a tightening of monetary policy. We continue to think that the ECB rate will weaken and lengthen, which will not be in the European currency's favor. Everything is more challenging in geopolitics because it is virtually impossible to predict how events will unfold over the next month, two months, or three months. Numerous experts predicted that the situation would deescalate in November following the G-20 summit in Bali. We can see that this did not occur. There were simply no discussions about the "Ukrainian issue" at the summit because neither Vladimir Putin nor Vladimir Zelensky attended. Since Kyiv rejects peace talks with Russia and Moscow thinks negotiations can only take place on its terms, the military conflict will only intensify. We are still determining how things might start to get better. As of November 21, the euro/dollar currency pair's average volatility over the previous five trading days was 117 points, which is considered "high." So, on Friday, we anticipate the pair to fluctuate between levels of 1.0208 and 1.0441. An upward turn of the Heiken Ashi indicator will indicate a potential continuation of the upward movement. Nearest levels of support S1 – 1.0254 S2 – 1.0132 S3 – 1.0010 Nearest levels of resistance: R1 – 1.0376 R2 – 1.0498 R3 – 1.0620 Trading Advice: The EUR/USD pair is still fluctuating. In light of this, we should consider opening new long positions with targets of 1.0441 and 1.0498 if the Heiken Ashi indicator reverses its upward trend. Only after fixing the price below the moving average line with targets of 1.0208 and 1.0132 will sales become significant. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels – target levels for movements and corrections. Volatility levels (red lines) – the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.    Relevance up to 01:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327598
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The GBP/USD Pair Has Experienced An Average Volatility

InstaForex Analysis InstaForex Analysis 21.11.2022 08:22
On Friday, the GBP/USD currency pair also carried on with apparent reluctance. In theory, both currency pairs traded in line with their best practices and had a dull trading week. The technical images for the euro and the pound are thus identical. Most technical indicators point to an upward trend on almost all TF, both currencies are above the moving averages, and one of the linear regression channels is pointing upwards. As anticipated, there was no significant correction; instead, both pairs remained stationary for a full week. Since they moved in tandem this week, the euro and the pound have formal reasons to keep rising. But we still don't know why both currencies have appreciated so much over the past few weeks or what will allow them to do so. New or invented reasons can always be "found." However, we make an effort to refrain from doing this. As usual, there are more issues with the British pound than with the euro or the dollar. If the US economy's recession is only "possible to start," the European Union's recession "will begin, but it may be weak," and the UK's recession "has already started and will be at least long," respectively. If inflation is high throughout the European Union and the US but is already declining, it is extremely high in the UK and is still rising despite eight rate increases by the Bank of England. Additionally, a 50 billion pound "hole" in the British budget will be "patched up" in the simplest way possible by reducing spending and raising taxes. In reality, tax rates won't go up; however, in place of the high-income tax rate that previously applied to Britons with incomes over 150,000 pounds annually, the low-income tax rate will now apply to those with incomes under 125,000 pounds. Consequently, a specific group of people will see an increase in tax rates. On the other hand, the state will reduce its support for paying electricity bills, which have increased significantly. The most intriguing news of the week is the business activity index. This week, the same "gentleman's" set of macroeconomic principles will apply in the UK and the EU. Members of the central bank's monetary committee made the same speeches, and business activity indices were used. All three business activity indices share the same fundamental characteristics: They are all below the "waterline" of 50.0. They are all unlikely to experience significant growth (there is simply no basis for this). They are all likely to keep declining. Regarding Cunliffe and Pill's speeches, both adhere to the rhetoric regarding the ongoing fight against inflation and speak frequently. The most intriguing aspect is that the same business activity indices and speeches by Fed members will be published in the US. Only the manufacturing sector's business activity index, among the others, may stay above 50.0, but predictions indicate that it will also dip below this level. We won't see or hear anything new because James Bullard, Loretta Meister, and other Fed members are likely to discuss the need to slow down the pace of monetary policy tightening. The States will also release "standard" reports on orders for long-term goods and applications for unemployment benefits, to which the market rarely responds. This week, we would say, has the best chance of flat-like movement. Given the fundamental and macroeconomic context, it is challenging to anticipate new growth in the euro and the pound. Once more, a downward correction would be a far more sensible course of action. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 162 points. This value for the dollar/pound exchange rate is "very high." Thus, we anticipate movement inside the channel on Monday, November 21, constrained by 1.1734 and 1.2048. The Heiken Ashi indicator's upward reversal suggests that the upward trend may continue. Nearest levels of support S1 – 1.1841 S2 – 1.1719 S3 – 1.1597 Nearest levels of resistance: R1 – 1.1963 R2 – 1.2085 R3 – 1.2207 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair has begun a new round of downward correction. Therefore, in the event of an upward reversal of the Heiken Ashi indicator, buy orders with targets of 1.2048 and 1.2085 should still be considered. With targets of 1.1719 and 1.1597, open sell orders should be fixed below the moving average. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels – target levels for movements and corrections. Volatility levels (red lines) – the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327600
The Pound Is Now Openly Enjoying A Favorable Moment

The GBP/USD Pair Could Once Again Recover The Bullish Trend

InstaForex Analysis InstaForex Analysis 21.11.2022 08:25
Early in the European session, the British pound is trading around 1.1858, below the 21 SMA (1.1881) and inside the symmetrical triangle. GBP/USD is likely to trade in a range between 1.1925 and 1.1790 in the next few hours. GBP/USD continues to trade above the uptrend channel from early November. According to the 4-hour chart, we can see that the pound is showing signs of exhaustion. Therefore, it is likely that there will be a decline in the next few hours towards the bottom of the symmetrical triangle. GBP/USD has resistance at 1.1930 and 1.1962 (+1/8 Murray). In case it breaks and trades above these resistances, the price could reach the psychological level of 1.20 and could even reach +2/8 Murray located at 1.2207. On the downside, 1.1750 is expected to represent a key level which coincides with the bottom of the downtrend channel. In case of a sharp break, we should expect consolidation below and the price could drop below the 8/8 Murray located at 1.1718 and it could reach the 200 EMA located at 1.1513. The symmetrical triangle pattern could offer a short-term decision to take a buying or selling opportunity. The key point would be to wait for the pound to consolidate above 1.1930 to buy or wait for it to break below 1.1750 to sell. On the other hand, the pound is likely to find a strong technical bounce around 1.1750 or around 1.1718 (8/8). In case it continues to trade above this level, we will have an opportunity to buy. The pair could once again recover the bullish trend and it could reach the psychological level of 1.20. Our trading plan for the next few hours is to operate the symmetrical triangle and sell below 1.1881 (21 SMA), with targets at 1.1770 and 1.1750. The eagle indicator is showing a negative signal which supports our bearish strategy. Relevance up to 04:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301750
EUR: German IFO Data and Central Bank Hawkishness Impact Euro/USD Range Trade

Technical Analysis Of The USD Index Situation

InstaForex Analysis InstaForex Analysis 21.11.2022 08:29
There are 2 interesting thing if we look at the 4 hour chart of the USD index: 1. There is a deviation between price movement with CCI indicator. 2. The appearance of Bullish Reversal Inverted Head And Shoulders pattern. According to both of the fact belowin the near future it seems that #USDX will appreciate rallying upwards to break above the level of 107.24. If this level is successfully passed then #USDX has the potential to reach the level of the Fair value Gap area of 108.69-110.22 with the Mean Threshold at the level of 109.45 but if it is on its way to the target -The target level mentioned above suddenly reverses back down to pass the level of 105.69 then it is very likely that the bull setup that has been described above will cancel itself.   Relevance up to 02:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/114227
Mexican Rate Spread: Tight vs. Central Bank's Rate Spread and Implications for Dis-inversion

The Euro To Pound Pair (EUR/GBP) Will Try To Get Down

InstaForex Analysis InstaForex Analysis 21.11.2022 08:33
On the 4 hour chart EUR/GBP cross Currency pair seems to appear. 1. Deviations between price movements with the CCI indicator. 2. Ascending Broadening Wedge. 3. Bearish Wolve Waves Based on the three information above it can be confirmed that in the near future EUR/GBP will try to get down below the level 0,8689 where if this level successfully penetrated will potentially bring EUR/GBP down to ETA Line from Wolve Waves and/or to the level 0,8589 as a target that will aim for with a note that if on his way to these levels there is no upward correction movement that penetrates above the 0.8775 level because if this level is successfully broken above, it is very likely that the scenario described previously will potentially become invalid. Relevance up to 02:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/114225
EUR/USD Pair Has Potential For The Downside Movement Today

EUR/USD Pair: The Uptrend Line Still Retains Its Relevance

InstaForex Analysis InstaForex Analysis 21.11.2022 08:35
Analysis of EUR/USD, 5-minute chart Last Friday, the euro/dollar pair did not show any interesting movement. Despite the fact that over the past week there was quite high volatility, you still can't tell from the charts whether the price has been moving quite actively. The fact is that there was mainly a sideways movement, which is misleading. There is not much to say about the interesting events of this day. European Central bank President Christine Lagarde gave her second speech last week, and said that the central bank was ready to raise the key rate further and warned of a slowdown in economic activity as a necessary measure to bring down inflation. The market has known all this for a long time, so there was no reaction to this speech. And there was nothing else interesting. Last week was generally quite boring for macroeconomic and fundamental events, and the new one will be no better... The situation with trading signals couldn't be simpler. The pair traded between 1.0340 and 1.0375 all day, only occasionally trying to get out of it. And it was unsuccessful. Thus, traders could open one or two positions when the price tried to leave the horizontal channel, but most likely, they took a small loss on them, because there was no trend. It happens, there is nothing wrong with that. During the last months the pair was in a trend and was volatile, the flat hour has probably come. COT report The Commitment of Traders (COT) reports on the euro in 2022 are a paradox. Halfway through the year they showed an outright bullish mood of commercial players, but at the same time the euro was falling steadily. Then for a few months they showed a bearish mood, and the euro also steadily fell. Now the net position of the non-commercial traders is bullish again and getting stronger, and the euro has hardly moved away from its 20-year lows. This is happening, as we said, because demand for the U.S. dollar remains very high amid the difficult geopolitical situation in the world. So even if the demand for the euro is rising, the high demand for the dollar still does not allow the euro itself to rise as much. In the given period, the number of long positions from the non-commercial group increased by 7,000, whereas the number of shorts - by 2,000. As a result, the net position increased by about 5,000 contracts. The euro has been slowly rising in recent weeks, which already coincides with the readings of the COT report. At the same time we think that the dollar will rise due to the same geopolitics or due to the lack of factors for the euro's growth. The green and red lines of the first indicator are far away from each other, which may indicate the end of the uptrend (which, in fact, never happened). The number of longs exceeds the number of shorts by 113,000. Thus, the net position of the non-commercial traders may go on rising but it may not provoke the same growth for the euro. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 39,000 more shorts (635,000 vs 596,000). Analysis of EUR/USD, 1-hour chart On the one-hour chart, you can see that the pair has been moving sideways for more than a week, while maintaining a fairly high volatility. The uptrend line still retains its relevance, but during a flat, the price can freely overcome it, which would not be considered as a sell signal. We still expect a downward movement. On Monday, the pair may trade at the following levels: 1.0072, 1.0119, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as Senkou Span B lines (1.0111) and Kijun Sen (1.0379). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are no important events for November 21 in the EU and the USA. Therefore, the market will not react to anything today. High volatility is likely to persist and so will the flat. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327594
The EUR/USD Pair Chance For The Further Downside Movement

Technical Analysis Of The EUR/USD Pair's Movement

InstaForex Analysis InstaForex Analysis 21.11.2022 08:40
EUR/USD should move a bit lower towards 1.0236 to complete the corrective decline from 1.0482. Once this correction is complete near 1.0236, a new impulsive rally higher towards 1.0786 and possibly even closer to 1.0926 should be expected. However, for now, let's focus on the final dip closer to 1.0236 before the next move higher to 1.0482 and above. Relevance up to 06:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301757
Technical Outlook Of The EUR/JPY Pair Movement In Short Term

The Outlook Of The Euro To Japanese Yen Pair On Chart

InstaForex Analysis InstaForex Analysis 21.11.2022 08:42
Relevance up to 06:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301759
The GBP/USD Pair May Trade Horizontally Today

The British Pound (GBP) Is Also In A Flat As The Euro (EUR)

InstaForex Analysis InstaForex Analysis 21.11.2022 08:47
Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair also showed a very unimpressive movement on Friday and is also in a horizontal channel. However this channel is much wider than the one for the euro, which can be limited by the levels 1.1760 and 1.1974. Therefore, this means that the pound is also in a flat, just not as deep as the euro. The UK published its retail sales report on Friday, which was slightly above the forecasts in October. However, traders were not very happy about it. The pound literally stood in one place all day long. The upward trend formally remains. Formally, because the flat can last a week or two or even three, and sooner or later the price will go below the trend line. And it will not be considered as a signal to sell because in a flat practically all the trend indicators stop giving strong and correct signals. From a technical point of view, the pound retains good chances of rising, but from a fundamental point of view, there is no reason to grow. Trading signals for the pound were also as simple as possible, because there was only one signal for the entire day, and it was unambiguous. The price bounced from the level of 1.1874 at the US trading session, afterwards it managed to go up by 45 points. Traders could get profit in case they manually closed their position. COT report The latest Commitment of Traders (COT) report on GBP logged a slight decrease in bearish sentiment. In the given period, the non-commercial group closed 1,900 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position is gradually growing during the last months, but the mood of the big players is still bearish. The pound has been rising in recent weeks, but so far it does not seem that it is preparing for a long-term uptrend. And, if we remember the euro's situation, then based on the COT reports, we can hardly expect a surge in price. The demand for the US currency remains very high, and the market, as it seems, is just waiting for the new geopolitical shocks in order to return to buying the dollar. The non-commercial group now has a total of 67,000 shorts and 34,000 longs opened. As we can see, there is a wide gap between them. As it turns out the euro is now unable to show growth when market sentiment is bullish. When it comes to the total number of long and short positions, here bulls have an advantage of 17,000. Still, this is not enough for the sterling to increase. Anyway, we are still skeptical about the pound's long-term growth although the technical picture shows otherwise. Analysis of GBP/USD, 1-hour chart The pound/dollar pair started a long-awaited correction on the one-hour chart, but so far it is weak, and the entire movement of the past week has been more like a flat. We believe that the pound's growth in the last few weeks was unjustified, so we expect a stronger downward correction. However the price may spend some time in the horizontal channel of 1.1760-1.1974. On Monday, the pair may trade at the following levels: 1.1486, 1.1645, 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259. The Senkou Span B (1.1500) and Kijun Sen (1.1679) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. Important reports and events are not scheduled for today in the UK and USA. Therefore, most likely, the pair will remain inside the horizontal channel we mentioned above. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327596
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

EUR/USD Pair Is Still Unfolding The Last Wave Higher

InstaForex Analysis InstaForex Analysis 21.11.2022 08:50
Technical outlook: EURUSD has slipped towards the 1.0270-80 zone as discussed and predicted earlier. It might be good to exit short positions around the 1.0270-75 area since it is a potential support region. The single currency pair is seen to be trading close to 1.0280 at this point in writing as the bulls prepare for one more leg higher towards the 1.0550-1.0600 area. EURUSD is still unfolding the last wave higher from the 0.9740 lows to complete its larger-degree corrective rally, which began from 0.9535. Potential upside target extensions are close to 1.0600 and higher, for the last wave to terminate. Also, note that 1.0600 is close to the Fibonacci 0.382 retracement of the drop between 1.2266 and 0.9535 levels respectively. A high probability remains for a turn lower from 1.0600. The instrument could resume its larger-degree downtrend. Immediate price support on the daily chart is seen around 0.9740, followed by 0.9535; while interim resistance is just below 1.0500 respectively. A push above 1.0480 will confirm and accelerate the rise further towards the 1.0600 mark. Trading idea: Potential rally towards 1.0600 against 1.0000 Good luck! Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301763
The US Dollar Index Price Is Looking Higher From Here Soon

The USD Index May Bring The Bulls Back In Control

InstaForex Analysis InstaForex Analysis 21.11.2022 08:55
Technical outlook: The US dollar index rallied through 107.05 intraday on Monday as we had predicted last week. The index is seen to be trading close to 106.95 at this point in writing as the bears prepare to come back in control. It might be safe to exit long positions taken last week as 106.95-107-05 could be a potential resistance zone. The US dollar index is facing the Fibonacci 0.382 resistance of the recent downswing between 110.60 and 104.90. Also, the immediate resistance trend line is passing through the 107.05-10 zone. A probability remains high for a bearish turn from here and a drop towards 104.30 in the next few trading sessions. A break above 110.60 would void the bearish outlook. The US dollar index is facing immediate resistance around 110.60, followed by 112.67; while support comes in around 104.30 as marked on the 4H timeframe. If the bears are successful in taking control back from here, they would target 104.00 next. On the flip side, a push towards 109.00 will bring the bulls back in control. Trading idea: Potential drop towards 104.00 against 109.00 Good luck! Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301765
All Eyes On Capitol Hill, Jerome Powell Will Appear Before The Senate Banking Committee

Sharp Statements Of Fed Members Dampened Investors' Enthusiasm

InstaForex Analysis InstaForex Analysis 21.11.2022 09:00
The week ended with mixed dynamics, mainly due to increased volatility and uncertainty of future levels of interest rate hikes. After the US released its latest data on inflation, stocks rallied strongly, while Treasury yields and dollar fell. It seems that the harsh statements of some Fed representatives cooled down the ardor of investors and returned to the markets the increased degrees of uncertainty. St. Louis Fed President James Bullard and San Francisco Fed chief Mary Daly actually made it clear with their statements that the latest inflation data may not be an important factor in the central bank's decision to not only end the cycle of rising rates, but also slow its pace. While Daly noted that she expects the discount rate to rise to 5.25%, Bullard agreed that the overall rate level could be between 5% and 7%. These words show that the stance of some Fed members remain hawkish, indicating that they believe it is too early to see the decline in US inflation as a serious signal for loosening the super-tight monetary course. This raises the possibility that another rate hike of 0.75% may be decided at the December meeting, although markets had hoped that the rate might be raised by as little as 0.50%. This is where the minutes from the bank's last meeting, which will be released this Wednesday, could play the most important role. If it shows that Daly and Bullard's position prevails, markets will see another wave of sell-offs, followed by the increase of Treasury yields and dollar. Market volatility will also be high, stimulated by uncertainty, which will be the reason of sideways trend. All this will take place during low market volumes caused by the release of the lates Fed minutes and Thanksgiving holiday in the US on November 24. Uncertainty will remain high until the Fed's future rate stance is clarified. Forecasts for today: GBP/USD The pair is trading at 1.1740-1.1965. It is likely to stay in this range today. USD/CAD The pair is rising amid falling crude oil prices and traders waiting for the release of the latest Fed minutes. Quotes are a little above 1.3400, and a consolidation will prompt a local growth to 1.3475. Relevance up to 07:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327618
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

CEE FX Will Remain On The Stronger Side This Week

ING Economics ING Economics 21.11.2022 09:16
FX markets start a holiday-shortened week quietly, as the forces that drove the recent dollar correction continue to fade. In China, sentiment is softening as the Covid situation deteriorates again. For the Fed, the market is again pricing 5% rates next year. This week the highlight will be FOMC minutes, European PMIs and a few monetary policy meetings In this article USD: FOMC minutes in focus this week EUR: PMIs in focus this week GBP: Sterling could take a welcome back seat CEE: All eyes on Hungary, again USD: FOMC minutes in focus this week The dollar is continuing to crawl higher after its sharp sell-off earlier this month. Driving that sharp sell-off had been a combination of softer US CPI data and some optimism emerging from China regarding Beijing's stance on Covid Zero and the property market. On the latter, it seems that the recent outbreak of Covid in some Chinese cities is still prompting similarly restrictive measures and that the Covid Zero policy has yet to undergo wholesale changes. Additionally, regulatory forbearance on the Chinese property development sector will not turn the economy around. Here our colleague, Iris Pang, remains concerned over China's export sector into 2023. For reference, Korean trade data for the first 20 days of November released overnight was pretty poor - exports falling 17% year-on-year. USD/CNH has comfortably turned higher from the recent low near 7.00. For the Federal Reserve story, Wednesday will see the release of the minutes of the 2 November FOMC meeting. At the time, we felt that it was still a reasonably hawkish meeting - although the Fed clearly wanted to shift the narrative from the size of rate hikes to the terminal rate. The minutes could pose a risk that the current dollar correction extends - especially since we will be faced with thin markets later this week as the US celebrates the Thanksgiving public holiday on Thursday. But assuming there are no big surprises - e.g. 'many participants wanting to take stock of the tightening undertaken so far', we would expect the dollar to find support on dips. Today's session should be reasonably quiet, too. DXY probably trades a 107.00-107.50 range. Upside risks could emerge from rising US Treasury yields were this week's $120bn of US Treasury issuance to demand concessionary pricing. And for those who missed it last week, please see our 2023 FX Outlook: The dollar's high wire act. Chris Turner EUR: PMIs in focus this week EUR/USD continues to edge lower in quiet markets. The recent outperformance in eurozone equity indices is no longer providing a boost. In addition to the continued wall of European Central Bank speakers, this week will see the advanced November PMIs for the eurozone, Germany and France.  The composite PMIs are expected to be in contraction territory for all three and be a reminder that at some point the ECB will probably call time on its tightening cycle. Our team's view is that the ECB hikes 50bp on 15 December (59bp priced in the markets) and then finishes the cycle with a 25bp hike in February. In other words, we look for the cycle to conclude at 2.25% rather than the 2.90% area priced for the markets in late summer. In the short term, EUR/USD has just sunk below support at 1.0270 and we would not rule out it drifting towards the 1.0200 area near term.  Elsewhere, we note that Swedish house prices dropped 3% month-on-month in October. The Riksbank's recent release of its financial stability report warned about the heavy lending to the property sector (42% of GDP) and potential problems with a housing market downturn. Our team still expects the Riksbank to hike rates 75bp to 2.50% this Thursday - but the housing sector is certainly one of the factors which can see the Swedish krona underperform in early 2023 and EUR/SEK retesting the October 11.10 high seems likely. Chris Turner GBP: Sterling could take a welcome back seat After a wild ride since the late summer, sterling could now begin to take less of the limelight. The chancellor has delivered the autumn statement and we are now left to examine how quickly growth softens and how aggressively the Bank of England will tighten when it next meets on 15 December. On the subject of growth, the next input here will be Wednesday's release of the November PMI, where the composite indicator is expected to remain below 50 - for the fourth month in a row. EUR/GBP is softening as the euro seems to be taking the larger strain of the softer China view.  However, 0.8665 should be good intra-day support. We are more bearish on GBP/USD. And unless Wednesday's FOMC minutes throw up some dovish surprises, GBP/USD could drift back to the 1.1700/1710 area this week. Our year-end GBP/USD target remains a reasonably aggressive 1.10 - largely on the back of renewed dollar strength. Chris Turner CEE: All eyes on Hungary, again Last week, we saw the third quarter GDP results across the region, and with the exception of Hungary, we saw rather positive surprises. This week we will see a number of monthly indicators from Poland, including industrial production and labour market data, and the National Bank of Hungary meeting on Tuesday. We do not expect any fireworks from the central bankers at the November rate-setting meeting. The latest data regarding inflation and GDP were broadly in line with the central bank's expectations and the next staff projection update is only due in December. But Hungary will also be in the spotlight at the government level this week. A decision on Hungary's access to the recovery plan is expected to be taken by the European Commission on Tuesday. However, reports last week suggested that the decision could be delayed, which would be a problem for the EU finance ministers' meeting scheduled for 6 December, when a final decision on the matter is due. We expect Hungary to find a deal with the EU, but given the timing constraints, it could be a bumpy road.  In the FX market, conditions were almost unchanged for the CEE region over the past week. While global conditions remain strongly positive for the region, domestic conditions still remain on the negative side in our view though slightly better than they were. The dollar index remains near its lowest levels since mid-August, sentiment in Europe has improved slightly again, and the CEE region continues to unwind its relationship with gas prices as issues are resolved for this winter. On the other hand, local rates remain volatile and interest rate differentials are unchanged or only slightly higher.   Thus, we expect CEE FX to remain on the stronger side this week, but the situation remains fragile. Of course, the main focus will be on the Hungarian forint, which will be driven purely by incoming headlines, and given last week's indications, we can expect moves in both directions before a deal with the EU is agreed upon and the forint heads below 400 EUR/HUF. The Polish zloty maintains the largest gap against the interest rate differential and has also leveraged the most improvement in global conditions in recent weeks. Therefore, we see a move up to 4.72 EUR/PLN.   Frantisek Taborsky  Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
lower Corporate Supply Expected in H2 2023, Forecasting €85-100bn Total Supply

The Malaysian Ringgit (MYR) Is Currently Being Sold On Concerns About A Lack Of Stable Government

ING Economics ING Economics 21.11.2022 09:21
Malaysia to try to form a coalition government after the General Election results in a hung parliament  In this article Macro outlook: What to look out for: Chicago Fed national activity indicator and South Korea's trade balance Source: shutterstock Macro outlook: Global Markets: Friday did not mark a convincing spell for US equities, and although bourses opened up, they quickly lost ground, before staging a turnaround which left the S&P500 up by less than 0.5%, and the NASDAQ virtually unchanged. Equity futures are similarly lacking in a convincing directional steer today. US Treasury yields were more emphatic, with sizeable increases in yields across the curve, which may in time become the driver for a new down-leg in risk assets. 2Y Treasury yields gained 8.1bp while the 10Y rose 6.3bp to 3.829%. It’s not clear what if anything is driving this latest pick-up in yields. The main quoted Fed speaker over the latest period was Raphael Bostic, whose thoughts of a slower pace of tightening ahead and peak Fed funds rate of 4.75%-5% is hardly game-changing. G-10 currencies are a mixed bag. The EUR lost a little ground to the USD in the face of these higher bond yields and Fed rate hike expectations. EURUSD is now 1.0327, down from about 1.0360 this time Friday. The AUD is only slightly weaker, at 0.6679, while Cable has picked up slightly to 1.1886 though the JPY has weakened back above 140 and is now 140.31. Asian FX rates haven't done a lot. The CNY is a bit stronger against the USD following Friday’s moves which have brought it back down to 7.1198, and that has probably helped pull along the THB for the ride, which is now 35.814. G-7 Macro: It was a quiet end to the week for G-7 Macro, and the existing home sales figures for the US showed further declines, but were roughly in line with expectations, so didn't change the story much.  Today is equally devoid of macro interest, with a quick glance only merited for the Chicago Fed national activity index, which is likely to signal a slightly sub-trend growth reading. China: We expect banks in China to keep the 1Y and 5Y Loan Prime Rates (LPR) unchanged at 3.65% and 4.30%, respectively, given that the PBoC stayed put on the 1Y Medium-term Lending Facility (MLF) rate at 2.75% a week ago. Covid cases have climbed again. This increases the risk of more localised lockdowns even though Covid measures have been eased. This is because quarantine still depends on the number of positive Covid cases. With more relaxed Covid measures it is not surprising to see the number of cases increase. However, this should not trigger a reversal of the policy direction towards further easing of Covid policies in 2023. Taiwan: Export orders should remain in year-on-year contraction as demand for semiconductors reflects softer demand in the US and Europe and uncertainty in China. South Korea: Preliminary (first 20-day) export data has shown exports falling to their weakest since the April 2020 pandemic-induced slump. 20day November exports were 16.7% lower than a year ago, reflecting the weakness of demand in China, Europe, and to some extent the US, as well as the downturn in global semiconductor demand. Imports also fell by 5.5%YoY, which sends a downbeat message about the state of domestic demand, which could yet influence the BoK’s rate-setting intentions. Malaysia: The General Election has not resulted in a clear majority for any party, and today, we will see if talks between former Prime Minister Muhyiddin Yassin’s Perikatan Nasional (PN) Party, which came in second place, and a number of other smaller parties, will be enough to form a coalition government, or whether Anwar Ibrahim’s Pakatan Harapan (PH) coalition, which gained the most seats, can draw in enough support to form a government. Newswires expect a decision later today. The MYR is currently being sold on concerns about a lack of stable government.  What to look out for: Chicago Fed national activity indicator and South Korea's trade balance South Korea advance trade balance (21 November) China loan prime rate (21 November) Thailand GDP (21 November) Taiwan export orders (21 November) South Korea consumer confidence (22 November) Taiwan unemployment (22 November) US Richmond Fed manufacturing index (22 November) Singapore 3Q GDP final and core inflation (23 November) Thailand trade balance (23 November) US durables goods orders, new home sales, University of Michigan sentiment and initial jobless claims (23 November) Japan PMI (24 November) Korea BoK policy meeting (24 November) Japan Tokyo CPI inflation (25 November) Malaysia CPI inflation (25 November) TagsEmerging Markets Asia Pacific Asia Markets Asia Economics   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Inflation Reports In Australia And New Zealand Were Higher Than Expected

The Reserve Bank Of New Zealand (RBNZ) Is Hiking Harder Than The RBA Can

Saxo Bank Saxo Bank 21.11.2022 09:54
Summary:  With FOMC meeting minutes out and two Fed speakers to stand up, the USD is on watch along with equities that could be at risk of taking a haircut. Any hint of more hawkish comments could spark a knee-jerk reaction to the upside in the USD, which means equities could move into a risk-off mode. Focus is also on NZD with RBNZ poised to hike by 0.75%. The NZDAUD is worth watching given the RBNZ is hiking harder than the RBA can, which theoretically supports NZDAUD. In China, attention will be on how local authorities respond to outbreaks and how commodities respond. Companies that make most of their revenue from China are also in focus like Fortescue Metals (FMG). Plus why buy now pay later equities are again on notice. And the Saxo Strats 2022 World Cup Predictions are here. FOMC minutes and more Fed speakers to be key for terminal rate pricing The FOMC minutes from the November 2 meeting are scheduled to be released on Wednesday, just ahead of the Thanksgiving holiday. The key message delivered by Powell at this meeting was that the pace of rate hikes will slow down as needed, and that will likely remain the highlight of the minutes as well. However, Powell managed to deliver this message hawkishly at the press conference, but the risk from the minutes remains tilted to the dovish side. There is likely to be little consensus about whether the rates are in restrictive territory or there’s still room for that, and the divide within the committee remains key to watch as investors remain on the edge to expect a Fed pivot sometime in 2023. We have heard multiple Fed speakers over the past week, after a significant downside surprise in US CPI prompted a move lower in Fed’s terminal rate projections and fuelled significant easing of financial conditions as equity and bond markets rallied and the US dollar weakened. Waller and Bullard have tilted on the hawkish side, while the usual-dove Brainard remained more balanced as she repeated the message on cumulative tightening and being data-dependent. Daly, Mester, George and Bullard will be on the wires this week. In China, attention will be on how local authorities respond to outbreaks and implement pandemic control measures. Watch how commodities respond The economic calendar in China is light this week. However authorities may respond to China’s first Covid-related death in almost six months and the surge in new cases, which have hit their highest levels since April last year. There is concern there could be tighter restrictions, while China implements its new 20-point tweaking covid restriction plan, aimed at minimising disruptions to people’s daily lives and the economy, while adhering to zero-Covid. Officials will find it difficult to balance this, as well as the surge in cases. As such, commodities pegged to Chinese demand are front and centre again this week. The iron ore price is lower on Monday down 4% on fears China could increase restrictions, but the key steel ingredient holds onto a gain of 23% this month. This means stocks that make most of their revenue from China are also in focus like Fortescue Metals (FMG) which is up 30% this month, after China announced a somewhat property rescue package. Oil prices will continue to remain volatile as well as global growth and China lockdowns remain on watch, and the deadline for European sanctions on Russia crude also looms. Flash PMIs on the radar for US, UK and EU The S&P flash PMIs for the US, EU and UK will be released in the week, and will likely test the soft landing rhetoric that has been gaining traction. We will likely see further broad-based easing in the metrics from the October prints, as consumer spending remains constrained amid high inflation and a rise in interest rates. While expectations for December remain tilted towards a downshift in rate hikes for the Fed, ECB and the BOE, the upcoming data point will be more key in determining the terminal rate pricing. Markets are now back at pricing 5% levels for the Fed, but the ECB’s pricing for the terminal rate is still sub-3% while UK’s is 4.7% with fiscal austerity being delayed. RBNZ’s hawkishness to continue to outperform while Riksbank to play catchup The monetary policy decision from the Reserve Bank of New Zealand (RBNZ) will be key on Wednesday to determine the direction of NZD, which has seen strong gains over the past month from higher hawkishness. After a series of 50bps rate hikes, there are some expectations that RBNZ could deliver a 75bps rate hike this week, as inflation and labour market conditions support the case for further front-loading. Inflation has reached 7.2% YoY in Q3 – well above the RBNZ’s 1-3% target. Most members of the RBNZ shadow board also supported a 75bps rate hike. Meanwhile, the Riksbank has been lagging other G10 central banks in tightening policy and is now playing catch up after delivering a 100bp hike in September. The Riksbank is expected to deliver a 75bps hike on Thursday while another 100bps hike can’t be ruled out. Key earnings to watch this week; from Virgin, to Dell to two Chinese companies  Virgin Money, which is one of the UK’s biggest banks reports earnings this week, as well as the agricultural giant Deere & Co and the PC juggernaut, Dell. Separately, as discussed in Peter Garnry’s note, the highlight may be from Kuaishou Technology and Xioami, as Chinese equities have recently rallied amid the country’s fine-tune pandemic control measures. Nonetheless, increasing regulation in the private and technology sectors have still caused headwinds. The two Chinese earnings results are not expected to be blockbusters, but their outlooks may give investors a glimpse through the curtain. Buy now pay later equities again on notice Buy now pay later (BNPL) companies could be further bruised this week, with the Australian government considering policies that could see BNPL firms subject to the same rules as credit card providers. This could not only affect Australian firms but global companies which operate in Australia, such as Block (SQ, SQ2) - which owns Afterpay and Affirm (AFRM). The Australian government is weighing up options to strengthen the BNPL Industry Code, and perhaps introduce an affordability test or put the BNPL companies under the Credit Act. Such a move would ensure BNPL companies that operate in Australia, would work within the guardrails as other credit providers. Companies to watch include Zip, Block and Affirm. Sentiment could also flow to other BNPL companies including Japan’s GMO Payment Gateway and India’s Paytm. Saxo Strats 2022 World Cup Predictions: the Netherlands has the highest probability of being the champion In this article, Peter Garnry, Saxo’s Head of Equity Strategy shows how Saxo Strats used quantitative analysis to predict the winner of the 2022 World Cup and came up with a non-consensus result: expecting the Netherlands to win.   Key economic releases & central bank meetings this week Monday, Nov 21 Germany Producer Prices (Oct) Taiwan Export Orders (Oct) Tuesday, Nov 22 New Zealand Trade (Oct) Eurozone Consumer Confidence (Nov, flash) Wednesday, Nov 23 Japan Market Holiday Australia S&P Global Flash PMI, Manufacturing & Services UK S&P Global/CIPS Flash PMI, Manufacturing & Services Germany S&P Global Flash PMI, Manufacturing & Services France S&P Global Flash PMI, Manufacturing & Services Eurozone S&P Global Flash PMI, Manufacturing & Services US S&P Global Flash PMI, Manufacturing & Services New Zealand Cash Rate (23 Nov) Singapore Consumer Price Index (Oct) United States Durable Goods (Oct) United States Initial Jobless Claims United States UoM Sentiment (Nov, final) United States New Home Sales (Oct) US Fed FOMC Meeting Minutes (Nov) Thursday, Nov 24 US Market Holiday Japan au Jibun Bank Flash Manufacturing PMI South Korea Bank of Korea Base Rate (Nov) Japan Leading Indicator (Sep) Germany Ifo Business Climate (Nov) Friday, Nov 25 US Market Holiday (Partial) New Zealand Retail Sales (Q3) Singapore GDP (Q3, final) United Kingdom GfK Consumer Confidence (Nov) Germany GDP (Q3) Germany GfK Consumer Sentiment (Dec)   Key earnings releases this week Monday: Virgin, Compass, Agilent Technologies, Zoom Video, Dell Technologies Tuesday: Kuaishou Technology, Medtronic, Analog Devices, VMware, Autodesk, Dollar Tree, Baidu, HP, Best Buy Wednesday: Xioami, Prosus, Deere Friday: Meituan, Pinduoduo Source: https://www.home.saxo/content/articles/macro/saxo-spotlight--21-nov-2022-no-video-21112022
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

A Weaker Tone Around The Equity Markets Drives Flows Away From Kiwi Market

TeleTrade Comments TeleTrade Comments 21.11.2022 11:17
NZDUSD meets with a fresh supply on Monday amid some follow-through USD buying interest. COVID-19 hitters, geopolitical risks benefit the greenback and weigh on the risk-sensitive Kiwi. The downside seems limited ahead of the RBNZ decision and the FOMC minutes on Wednesday. The NZDUSD pair comes under some selling pressure on the first day of a new week and moves further away from a nearly three-month high - levels just above the 0.6200 mark touched on Friday. The pair remains depressed through the early part of the European session and is currently flirting with the daily low, around the 0.6120 region. The US Dollar builds on last week's recovery from its lowest level since August 12 and gains traction for the third successive day, which, in turn, is seen weighing on the NZDUSD pair. The better-than-expected US Retail Sales released on Thursday cast doubts on the peak inflation narrative. Furthermore, hawkish signals from several Fed officials suggest that the US central bank is still far from pausing its policy-tightening cycle and continues to act as a tailwind for the buck. Apart from this, a generally weaker tone around the equity markets provides an additional lift to the safe-haven greenback and drives flows away from the risk-sensitive Kiwi. The market sentiment remains fragile amid worries about headwinds stemming from a new COVID-19 outbreak in China and the imposition of economically-disruptive lockdowns. Apart from this, fears of a potential escalation in the Russia-Ukraine conflict temper investors' appetite for perceived riskier assets. The fundamental backdrop favours the USD bulls and supports prospects for additional intraday losses for the NZDUSD pair. Traders, however, might prefer to move to the sidelines ahead of this week's key event risks. The Reserve Bank of New Zealand is scheduled to announce its policy decision on Wednesday, which will be followed by the release of the FOMC meeting minutes. This, in turn, warrants some caution for aggressive bearish traders and positioning for a further depreciating move.
The US PCE Data Is Expected To Confirm Another Modest Slowdown

Saxo Bank Podcast: Correlation Between Risk Sentiment And The US Dollar (USD), The Outlook Of Gold, Copper And Crude Oil

Saxo Bank Saxo Bank 21.11.2022 11:54
Summary:  Today we look at downbeat sentiment on the latest concern that the reopening trade in China isn't going to happen any time soon with the first official deaths from Covid there in months reported. Elsewhere, we look at tight inverse correlation between risk sentiment and the US dollar and positioning in the US FX futures market, the holiday-shortened week in the US, gold, copper & crude oil, incoming earnings including Dell and Zoom Video, the macro calendar for this week (including the US Thanksgiving holiday) and much more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-21-2022-21112022
Investments In Specific Football Clubs Do Not Appear To Be Profitable

World Cup Begins! |The Euro (EUR) Decline | Equity Rally Wanes

Swissquote Bank Swissquote Bank 21.11.2022 10:54
Stocks in Asia fell this Monday on news that China reported its first death in six months from Covid on Sunday, and two other deaths followed. The news spurred fear that the government could make a U-turn on its decision of easing the strict Covid zero rules, and wreak havoc in Chinese markets, yet again. US Elsewhere, the US-inflation-data boosted rally faded last week, on the back of a too-strong-to-be-happy retail sales print, and a couple of hawkish comments from Federal Reserve (Fed) Presidents, including a chart from Mr. Bullard where the Fed’s terminal rate stretched up to 7%!This week, investors will focus on interest rate hikes and the US Black Friday sales. Commodities In commodities, the barrel of US crude slipped below the $80 psychological level last week, below the post-pandemic ascending trend base. Forex In the FX, the US dollar kicks off the week on a positive footage, on the back of a retreat in dovish Fed expectations. Crypto In cryptocurrencies, contagion news from the FTX collapse continues making the headlines in cryptocurrencies. According to the latest news, FTX owes more than $3 billion to its unsecured creditors, and crypto.com, Binance and OKX suspended deposits of dollar-backed stablecoins, USDC and Tether before last weekend. World Cup In sports, the world’s most expensive World Cup kicked off this weekend in the middle of the Qatari desert, with a lot of unusual news, speculation and backlash about the CO2 emissions and limited sales of alcohol, among other criticism. Investors hope sports betting and beverage companies would see a boost from the event… Watch the full episode to find out more! 0:00 Intro 0:40 China Covid worries resurface 1:57 Equity rally wanes, as attention shifts to rate talks & Black Friday 4:19 Oil dips below $80pb 5:27 USD gains, as XAU, EUR decline 6:52 FTX contagion continues, Solana further pressured 8:20 World Cup begins! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #China #Covid #World #Cup #hawkish #Fed #USD #EUR #XAU #crude #oil #US #retail #sales #Thanksgiving #BlackFriday #FTX #contagion #Bitcoin #Solana #Tether #USDC #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
The Outlook Of EUR/USD Pair For Long And Short Position

EUR/USD long positions - "The Chicago Fed National Activity Index which is due to be out in the afternoon is unlikely to support the euro bulls."

InstaForex Analysis InstaForex Analysis 21.11.2022 15:57
In my morning review, I outlined the level of 1.0268 and recommended entering the market from there. Let's have a look at the 5-minute chart. A breakout and an upside retest of this range coupled with failed attempts of the bulls to regain control created a nice sell signal. By the time of the publication, this move has generated 40 pips in profit. From the technical viewpoint, not much has changed in the second half of the day, including the strategy.     For long positions on EUR/USD: The Chicago Fed National Activity Index which is due to be out in the afternoon is unlikely to support the euro bulls. The most that can happen is profit taking and a slight upside correction by the end of the day. For this, bulls should assert their strength near the support of 1.0214, towards which bears are actively pushing the pair. The best moment to open long positions at this level will be a false breakout which will generate the first buy signal. If so, the pair may start a correction and return to the level of 1.0268 where sellers have been especially active today. A breakout and a downward retest of this range will pave the way to 1.0328 where moving averages supporting bears are located. A move above 1.0328 will open the door to a higher target of 1.0391 where I recommend profit taking. If EUR/USD declines in the North American session and buyers are idle at 1.0214, the euro will come under more pressure and may drop lower. If so, only a false breakout at the support of 1.0167 will be a good moment to open buy positions. Buying EUR/USD after a rebound is possible at 1.0132 or even at the low of 1.0090, bearing in mind an upside correction of 30-35 pips within the day. For short positions on EUR/USD: Bears are steadily selling the euro. If the US data turns out to be better than expected, the EUR/USD pair will continue its downward correction. The best moment to sell the pair will be its failed attempt to move above 1.0268, similar to those I described above. This will create a good entry point and will allow the price to move lower to the support of 1.0214. If the pair settles below this level and performs its upward retest, this will create another sell signal that will trigger stop-loss orders set by the bulls. If so, the pair may extend its fall to the area of 1.0167 where I recommend profit taking. The level of 1.0132 will serve as a more distant target, and testing this mark may cancel the bullish trend. In case EUR/USD rises in the course of the North American session and bears are idle at 1.0268, speculative sellers will start leaving the market. This will strengthen the upward correction and will pave the way to 1.0328. Selling at this pound can be done only after a false breakout. Going short on EUR/USD right after a rebound is possible at the high of 1.0391, keeping in mind a downward intraday correction of 30-35 pips.     COT report The Commitments of Traders report for November 8 showed a drop in both short and long positions. This report does not reflect the reaction to the recent US CPI data so it should not be fully trusted. Despite a slowdown in US consumer prices, and we are talking about a slowdown and not a proper decline, the US Federal Reserve will continue to hike rates. It is expected that the rate increase in December will be between 0.5% and 0.75%. As for the euro, the demand for risk assets has indeed increased. Apart from speculations that the Fed is going to ease the pace of monetary tightening, the euro is driven by the ECB's plan to maintain the rate-hiking cycle. More and more EU officials are saying that borrowing costs should be increased further in order to tackle rising inflation. However, if the EU economy continues to contract at a rapid pace, the regulator may give up the idea of aggressive monetary policy. This will definitely limit the upside potential of the pair in the medium term. According to the COT report, long positions of the non-commercial group of traders dropped by 7,453 to 232,317 while short positions declined by 9,262 to 124,718. The non-commercial net position remained positive at 107,599 versus 105,790 a week earlier. This indicates that investors are taking advantage of a cheaper euro and continue to buy it while it is holding below the parity level. They might also be accumulating long positions in hope that the pair will start to recover sooner or later. The weekly closing price advanced to 1.0104 from 0.9918.     Indicator signals: Moving Averages Trading below the 30- and 50-day moving averages indicates that the euro is set to decline further. Please note that the time period and levels of the moving averages are analyzed only for the H1 chart, which differs from the general definition of the classic daily moving averages on the D1 chart. Bollinger Bands If the pair advances, the upper band of the indicator at 1.0375 will act as resistance. Description of indicators: • A moving average of a 50-day period determines the current trend by smoothing volatility and noise; marked in yellow on the chart; • A moving average of a 30-day period determines the current trend by smoothing volatility and noise; marked in green on the chart; • MACD Indicator (Moving Average Convergence/Divergence) Fast EMA with a 12-day period; Slow EMA with a 26-day period. SMA with a 9-day period; • Bollinger Bands: 20-day period; • Non-commercial traders are speculators such as individual traders, hedge funds, and large institutions who use the futures market for speculative purposes and meet certain requirements; • Long non-commercial positions represent the total number of long positions opened by non-commercial traders; • Short non-commercial positions represent the total number of short positions opened by non-commercial traders; • The non-commercial net position is the difference between short and long positions of non-commercial traders. Relevance up to 12:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327676
Bank of England Faces Rate Decision: Uncertainty Surrounds Magnitude of Hike

ECB's Lane talks the future of monetary policy. S&P 500 expected to close at ca. $4000 in 2023

InstaForex Analysis InstaForex Analysis 21.11.2022 16:05
The situation on Forex is changing rapidly. As soon as the Fed began to consider slowing down the pace of interest rate hikes and US inflation showed signs of cooling, the dollar posted a wave of sell-offs. However, after ECB officials began to follow the Fed's rhetoric and investors expressed doubts that it would be easy to combat high prices, the EUR/USD pair collapsed from the 5-month highs, casting doubt on whether the long-term downtrend had been broken. ECB chief economist Philip Lane said that the December increase in the deposit rate would not be the last one. He also added that the regulator would probably continue to raise borrowing costs in 2023, albeit at a slower pace. According to him, monetary policy moves filter through to the economy with a delay and the European Central Bank should take this into account. This somewhat resembles the accompanying policy statement made by the FOMC in November on the cumulative impacts of rate increases and the need to be aware of them. It seems that both the Fed and the ECB are going to temper the pace of coming interest rate hikes, which deprives euro bulls of an important advantage. Read next: NVIDIA (NVDA) Q3 earnings results outperformed part of the markets forecasts| FXMAG.COM The euro's rally in early November was also caused by hopes for a soft landing due to the Fed's more resilient attitude. According to BofA, this is fundamentally wrong. The longer the US economy remains stable, the more difficult it is for the Fed to fight inflation, and the higher the risks that inflation expectations will start to rise again. The central bank needs to act more aggressively to break this vicious circle. It seems too early to expect that Jerome Powell and his colleagues will pause, which supports euro bears. Besides, the euro is coming under pressure from the gloomy outlook for US stock indices. Goldman Sachs notes that stocks do not typically recover from troughs until the rate of deterioration in economic and earnings growth slows down. The strategists estimate that the S&P 500 will end 2023 at around the 4,000 mark, which is not far from current levels. S&P 500 recap and outlook     This opinion echoes that of Morgan Stanley, which also sees the major US stock index trading at around 4,000 by the end of next year. At the same time, the company predicts the S&P 500 could fall by 24% at the end of the first quarter and it would be extremely difficult for the stock market to recover. Experts attribute this drop to deteriorating global risk appetite, which fuels demand for safe-haven assets, including the US dollar.     Thus, the driving forces behind the dollar's bullish run are still relevant. This makes investors doubt that the long-term downtrend in the main currency pair has been broken. From a technical point of view, the daily chart shows that our strategy suggesting short positions amid a breakout of support at 1.033 presented in the previous article has proven effective. The quotes reached the target at the 127.2% level according to the Butterfly pattern and then entered a correction as expected. For now, the best way to make a profit is to keep short positions open. However, a rebound from 1.022 or 1.015 may lead to a reversal. Relevance up to 13:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327682
FX Daily: Hawkish Powell lends his wings to the dollar

USA: A 50bp rate hike in December is highly expected, disappointing inflation print may lead to a dollar sell-off

InstaForex Analysis InstaForex Analysis 21.11.2022 16:24
Today's trading day began with the dollar on the offensive. The dollar index (DXY) futures also opened today's trading day with a small gap up after a lackluster gain in the previous three trading days. As of writing, DXY futures were trading at 107.74, 79 points above today's opening price and 88 points above last Friday's closing price. The dollar index ended last week with a small token gain of 17 points. Investors are still under the impression of disappointing consumer inflation data, which showed its slowdown. For instance, the Consumer Price Index (CPI) fell in October from 8.2% to 7.7% year-on-year, stronger than the estimate of an 8.0% decline. Core CPI adjusted to 6.3% versus a forecast of 6.5% year-on-year and 6.6% last month. The Fed's efforts to rein in U.S. inflation are definitely paying off. This raises the possibility that the pace of monetary tightening may soon slow down. Prior to the release of these inflation indicators, it was widely expected that interest rates would be raised again by 0.75% (to 4.75%) at the December meeting (December 13 and 14). However, some Fed officials have already made cautious statements to the effect that a slowdown in monetary policy tightening is possible in the near term, although inflation remains too high, according to them, and much work remains to be done to bring it back to the 2.0% target level. Thus, the likelihood of a 75 basis point Fed rate hike in December has declined. On the contrary, market participants are now pricing in an 80% chance of a 50 bps Fed interest rate hike in December, according to the CME Group. If the released U.S. inflation numbers disappoint investors, it will trigger a new wave of dollar selling and bring the DXY down to 109.00.     As of writing, DXY futures were trading near 110.46, staying negative and moving to the bottom of last month's new downward channel (on the DXY chart). A break of these levels may trigger a deeper drop in DXY, down to the key support levels of 107.40, 105.65. And that's exactly what happened: the price broke through the lower border of the descending channel on the DXY chart at 109.00 and reached a local low of 105.15 in the next three days. However, near this local low, the dollar sellers' strength ran out, and by now, as we noted above, the DXY dollar index is up to 107.74. If you look at the daily chart of the USD index (shown as CFD #USDX in the MT4 trading platform), you can clearly see that the price failed to break through the key support level 105.65 (200 EMA). And in the next four days, the price rebounded from that level and rose, making an attempt to break above the long-term level 107.40 (144 EMA in the daily chart of CFD #USDX) at the moment. In our previous review of DXY, we wrote that above the key support level of 105.65, the dollar index remains in the zone of a long-term bull market. With the appearance of signals to buy, long positions in DXY will again become preferable. Now the first such signal will be the return of the price to the zone above the resistance level of 107.40, and the confirming one will be the growth to the zone above the levels of 109.00, 110.00.     As you can see, the price, so far, is moving as we suggested earlier. But, as always, we must also consider an alternative scenario. Today's economic calendar is not rich in the publication of important macro statistics for the U.S., and this entire trading week in the US will be shorter than usual: on Thursday, November 24, banks and stock exchanges in this country will be closed on the occasion of Thanksgiving Day. This day marks the start of the holiday season. It includes Christmas and continues until the New Year. November 25 is a shortened working day in the United States as part of the continuation of Thanksgiving Day celebrations. In early December, major financial market players will gradually begin to sum up the results of the outgoing year, which turned out to be generally successful for the dollar and, on the contrary, disappointing for buyers of the American stock market, although they will probably still be able to please the traditional New Year's Eve rally. But it is not a fact that it will take place this year. Nevertheless, one should not discount the intention of the Fed leaders to continue tightening monetary conditions for the time being, and this is not good for American private business. Relevance up to 12:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327672
Euro to US dollar - Ichimoku cloud analysis - 21/11/22

Euro to US dollar - Ichimoku cloud analysis - 21/11/22

InstaForex Analysis InstaForex Analysis 21.11.2022 16:29
EURUSD is trading around 1.0238 right on top of the Ichimoku cloud as expected. Last week we warned bulls that price was vulnerable to pull back towards the Kumo (cloud). Price had broken below the tenkan-sen and kijun-sen indicators showing vulnerability. Price is now trading on top of the cloud which is very important short-term support. A break inside the Kumo would be a sign of weakness. Next support is at the lower cloud boundary at 1.0105. The tenkan-sen (red line indicator) is resistance at 1.0311 and the kijun-sen (yellow line indicator) resistance at 1.0353. Bulls need to break above the resistance of 1.0353 in order to resume the up trend. Relevance up to 13:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301860
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

RBA's is ready to go back to bigger hikes. Wage growth reached 3.1% in the third quarter

Kenny Fisher Kenny Fisher 21.11.2022 16:43
The Australian dollar has posted losses over three straight days and is sharply lower on Monday. In the North American session, AUD/USD is trading at 0.6610, down 0.96%. RBA shifts gears The Reserve Bank of Australia has changed course and eased up the pace of hikes, but with inflation still accelerating, is it too soon? After a string of 50-bp increases, the RBA has slowed down and delivered two straight hikes of 25 bp. The RBA was the first major central bank to make the shift, and the Federal Reserve is widely expected to ease to a 50-bp increase at the December meeting. Read next: Eurozone may find it hard to soak up big rate hikes. German PPI decreased by over 4%...| FXMAG.COM The thinking behind smaller rate hikes is it will cause less of a shock to the economy and ease the pain that households and businesses are going through as rates go up and up. At the same time, the RBA has circled inflation as public enemy number one, and it will have to keep hiking until it detects a peak in inflation. The RBA may be easing up on the pace of rates, but Governor Lowe is using the jawbone tactic to dampen any expectations that the central bank is winding up its tightening. To this end, Lowe has warned that the bank would not hesitate to return to oversize rate hikes if needed. The RBA is keeping a close eye on wage growth, which jumped to a nine-year high in Q3, gaining 3.1%. The RBA is wary of the spectre of a wage-price spiral if wages continue to accelerate, which would greatly complicate its efforts to curb inflation. The steady stream of hawkish statements from Fed members has chilled risk appetite and dashed hopes of a Fed U-turn on rate policy. The US dollar has bounced back after taking a beating following the inflation report earlier this month. The Fed has long insisted that one or two reports showing weaker inflation does not make a trend, although risk sentiment has nonetheless when inflation drops. If November’s inflation data is lower than anticipated, we can expect risk appetite to rise again, at the expense of the US dollar. The markets have priced in a 50-bp hike next month, although some Fed members have stated that a 75-bp move remains on the table. AUD/USD Technical AUD/USD is testing support at 0.6609. Below, there is support at 0.6541 There is resistance at 0.6704 and 0.6772 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie extends slide - MarketPulseMarketPulse
The US Dollar Weakens as Chinese and Japanese Intervention Threats Rise, While US CPI and UK Jobs Data Await: A Preview

Ed Moya talks stocks, China, forex, crypto and more

Ed Moya Ed Moya 21.11.2022 22:54
US stocks are lower as the global growth picture takes a hit following key China Covid lockdowns and as the US economy could have to deal with a massive rail worker strike before the holidays. ​ Adding to the risk aversion tone are rising concerns that future Russian attacks on Ukraine’s nuclear power supply could be catastrophic. Wall Street is hesitant to buy up risk assets on this World Cup-filled and shortened holiday trading week as the first wave of headlines from Beijing to a rail union vote seem likely to further fuel inflationary pressures. ​ Trading activity could take a hit as many traders will enjoy focussing on the first round of games, but for now, it seems the pulse of Wall Street seems rather downbeat. Rail/Shipping The US economy is also in jeopardy of an unwanted supply-chain hit as rail workers appear poised to strike just before the holidays. After a key vote, it is looking less likely that we won’t see some possible work stoppages, which could prove to be terrible for economic activity and prove to be inflationary. If a deal is not reached early next month the hit to the economy could be over $2 billion a day. ​ China Risk appetite vanished after deputy director of Beijing’s municipal Centre for Disease Control and Prevention Xiaofeng said, “The city is facing its most complex and severe prevention and control situation since the outbreak of the coronavirus.” This Covid wave is troubling as it nears some of the more populous districts and that is forcing Beijing to tighten its rules. ​ China also reported three Covid deaths over the weekend, which are the first deaths reported since May. It seems the zero-COVID policy is not going away anytime soon and that will definitely weigh on global growth. ​ FX​The dollar’s rally ran out of steam just as England’s World Cup campaign kicked off with a great start. ​ The forex capital of the world, London, basically shut down for England’s impressive win against Iran. ​ China’s Covid struggles are driving strong safe-haven flows into the dollar. ​ The risks to the global outlook might not be as bad as they were a few months ago, but that doesn’t mean this dollar rebound can’t go on for a little longer. ​ The dollar might be able to remain strong here heading into the holiday weekend. Crypto The FTX aftermath continues and now everyone wants to know who are the unlucky creditors that will suffer big losses. According to court documents, it seems about $3.1 billion collectively is owed to one million creditors. Bankrupt Voyager Digital is also desperately trying to find a buyer and there is a lot of skepticism that Binance will not be able to get beyond all the hurdles that also include national security concerns. Given the downbeat mood on Wall Street it comes as no surprise Bitcoin is lower. ​ Bitcoin continues to stabilize above the $16,000 level despite a plethora of negative headlines. ​ It seems something major needs to break for the sellers to take out the November lows. ​ If the $15,500 level breaks for Bitcoin, there is not much support until the $13,500 level, followed by the psychological $10,000 level. ​ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Stocks lower on China and rail strike concerns, King dollar returns, bitcoin tries to hold onto $16k - MarketPulseMarketPulse
The USD/JPY Price Seems To Be Optimistic

Japanese yen has lost ca. 20% this year. Kenny Fisher talks USD/JPY

Kenny Fisher Kenny Fisher 21.11.2022 22:58
The Japanese yen is getting pummeled at the start of the trading week.  In the North American session, USD/JPY is trading at 141.90, up 1.09%. Will BoJ Core CPI continue its upswing? Japan releases BoJ Core CPI, the Bank of Japan’s preferred inflation indicator later today. The indicator has accelerated for eight consecutive months, as inflation continues to move higher. National Core CPI, released last week came in at 3.6%, up from 3.0%. A higher-than-expected reading is unlikely to lead to any change in policy at the BoJ. Governor Kuroda has insisted that inflation is temporary and should peak around 3%.  The bank’s uncompromising stance, which has capped interest rates on Japanese government bonds, has resulted in the yen sliding about 20% against the dollar this year. Rather than stem the yen’s decline with interest rate hikes, the government has responded with massive currency interventions. Such unilateral moves are unlikely to have a lasting effect, with the Fed still aggressively raising rates and the US/Japan rate differential only getting wider. Federal Reserve members have been delivering hawkish messages to the markets, in a coordinated response to the rash exuberance in the markets following the US inflation report. The Fed speak campaign has dampened risk appetite and dashed hopes of a Fed U-turn on rate policy, which has helped the dollar recover some of its recent losses. The Fed has long insisted that one or two reports showing weaker inflation is not proof of a trend, although the markets have gone in a tizzy whenever inflation has softened. The markets have priced in a 50-bp hike next month, although some Fed members have stated that a 75-bp move remains on the table. USD/JPY Technical USD/JPY has support at 141.55 and 140.70 There is resistance at 142.74 and 144.20   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY jumps to 142, BOJ Core CPI next - MarketPulseMarketPulse
The USD/CAD Pair Has The Strong Downside Momentum

Canadian dollar weakened as crude oil prices dropped last week. Ebury's Enrique Díaz-Álvarez talks comments on Forex market

Enrique Díaz-Álvarez Enrique Díaz-Álvarez 22.11.2022 07:30
The dollar recovered somewhat from its recent drubbing on the back of a steady drumbeat of hawkish Federal Reserve speeches. Data out of the US and the Eurozone was very light last week, and what there was came out generally better than expected and reinforced the message that the main problem confronting major central banks is still inflation. Sterling was the star of the week, finishing near the top of the rankings on the back of strong inflation and employment data. Beyond G10, it was a tough week for Latin American currencies, which fell back amid weaker commodity prices and concerns about misguided fiscal policies.   With the US trading week shortened by the Thanksgiving holidays, the financial calendar will be dominated by the release of the PMI indices of business activity. We’ll be paying particularly close attention to those in the Eurozone and the UK. Consensus forecasts are gloomy, opening the possibility of a positive surprise. The calendar for central banker speeches is unusually busy this week, including several from the European Central Bank and no fewer than four from the Bank of England. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Bloomberg Date: 21/11/2022 GBP The labor report last week out of the UK supported our view that the UK recession will be short and shallow. Payrolls continue to increase at a healthy pace even while unemployment numbers are consistent with an economy at or perhaps above full employment, with no hint of job destruction as yet. Inflation soared more than expected in October, to 11.1%, its highest level since 1981. It would have been even higher if not for the government’s Energy Price Guarantee which capped household energy bills. Figure 2: UK Inflation (2013 – 2022) Source: Bloomberg Date: 21/11/2022 The Fiscal Statement contained aggressive deficit cuts, as expected, but for the most part, they were back loaded and should have little effect in the short and medium term. We think market expectations that the Bank of England can stop hiking rates well short of 5% are fanciful and expect the sterling to outperform as market consensus moves closer to our view. EUR Last week we had no macroeconomic or policy news of note out of the Eurozone, so the common currency was left to bounce around aimlessly to end near the middle of the rankings, nearly flat against the US dollar after its record rally the week prior. All eyes now turn to the PMI indices of business activity, perhaps the most reliable leading index there. Expectations are for another drop further into contractionary levels. Other sentiment indices have outperformed expectations, and the mood appears to be better than it was last month. A positive surprise there would go a long way to pushing the euro rally further. USD As in the Eurozone, economic data was mostly second tier last week, but what there was really belied the notion that the US economy is in recession. Retail sales blew out expectations growing 1.3% in the month of October. Meanwhile, producer inflation also took a turn lower, after the CPI did so the previous week. Figure 3: US Retail Sales [% MoM] (2017 – 2022) Source: Bloomberg Date: 21/11/2022 On Monday, the latest GDP figures showed that the Japanese economy contracted by 1.2% annualised in Q3 (+1.1% expected), though there was an upwards revision to the Q2 data. While this would vindicate the bank’s current stance, Thursday’s data showed that inflation rose to a new three decade high (3.7%). Whether this is enough to change the BoJ tune remains to be seen. We suspect that it won’t, although continued signs of an acceleration in domestic price pressures would likely pressure policymakers into at least considering a hawkish pivot. CHF The Swiss franc was among the underperformers last week, selling off by about 1% against the euro and the US dollar. Attention in Switzerland is increasingly turning towards the Swiss National Bank December meeting. Following his hawkish comments in the week previous, SNB chairman Thomas Jordan again suggested that further policy tightening may be required. Later in the week, SNB member Andrea Machler stated that the bank will indeed continue hiking if the forecast points to inflation above 2%. After a string of hawkish signals from the central bank, we have little doubt that these words will be followed by actions and another hike in December is all but certain. Meanwhile, declines in SNB sight deposits have been more limited in recent weeks, compared to the sharp drops witnessed in late-September and early-October. This suggests that the SNB has been less active in absorbing excess liquidity. In the coming days, our focus will be primarily on outside news, as Switzerland’s economic calendar is almost completely empty. AUD A rather quiet week by recent standards in global financial markets allowed for consolidation in the Aussie dollar last week. Somewhat surprisingly, we saw little reaction in AUD to last week’s rather strong October labour report. Another 32.2k net jobs were added in the Australian economy last month, all in full-time positions and well above expectations, while the unemployment rate also unexpectedly dropped back to 3.4%. Meanwhile, the RBA’s latest meeting minutes didn’t offer too many clues as to the direction of the bank’s next policy move, leaving the door open to both a pause in the hike cycle and larger hikes should data dictate. Figure 4: Employment Change in Australia [‘000] (2016 – 2022) Source: Bloomberg Date: 21/11/2022 We suspect that activity in AUD could pick up in the first half of this week. On Tuesday, the latest business activity PMIs will be released, which are expected to ease modestly from the previous month. A speech by RBA Governor Lowe (Tuesday) will also be closely watched. NZD One of the main event risks in the FX market this week will be Wednesday’s Reserve Bank of New Zealand meeting. This week’s meeting is a very difficult one to call, with markets torn between a 50bp and 75bp rate hike. On the one hand, the uncertainty of global growth and the recent downturn in the domestic housing market could elicit a more cautious response. On the other, however, New Zealand inflation remains far too high for comfort, the labour market is in good shape and indicators of economic activity are holding up reasonably well. On balance, we think that the RBNZ will deliver a jumbo 75bp rate hike, though it is a very tough call that could go either way. Markets are pricing in around 65bps of tightening, so a 75bp move would be bullish for the New Zealand dollar. Much will, of course, depend on the bank’s accompanying communications. We suspect that these will strike a hawkish note, stressing the need for additional hikes into 2023, and we see risks to NZD as skewed to the upside heading into the meeting. CAD A drop in global oil prices toward the end of last week weighed slightly on the Canadian dollar, though the currency managed to largely hold its own against the USD. Brent crude oil briefly dropped back below the $86 a barrel level on Friday, its lowest level since late-September, as investors feared weaker demand from China and continued increases in US rates following hawkish comments from Federal Reserve officials. There was actually very little major macroeconomic developments out of Canada last week, which partly contributed to the relative lack of volatility in the USD/CAD pair. This week looks set to be similarly quiet. Retail sales data (Tuesday) could garner some attention among market participants, though this will likely go under the radar. Expect the Canadian dollar to be largely driven by events elsewhere. SEK The increase in market risk aversion at the end of last week, due in part to escalating geopolitical tensions, weighed on the Swedish krona, which depreciated by almost 3% against the euro. This meant that SEK, which is one of the higher-risk major currencies in the world, ended the week as one of the worst performers in the G10. Figure 5: Inflation in Sweden [% YoY] (2012 – 2022) Source: Bloomberg Date: 21/11/2022 Rising domestic inflation, which soared to a 31-year high of 10.9% in October, perhaps contributed to this depreciation, as markets perceive this as further deteriorating the already bleak economic outlook. That said, we believe that the continued rise in inflation may force the Riksbank into raising its base rate aggressively at its meeting on Thursday. Our base case is for a 75 basis point rate hike, which could support the krona this week as this is not yet fully priced in. However, should the central bank suggest that it is increasingly concerned about the growth outlook, rather than fighting inflation, this could point to a moderate in the tightening cycle, which would be bearish for SEK. NOK In a similar fashion to SEK, the Norwegian krone did not have a good week, depreciating by more than 2% against the euro and the US dollar. Last week’s better-than-expected growth data limited some of the currency’s losses, although it was clear that investor sentiment remained one of the main drivers in markets. Figure 6: Norway GDP Growth (2012 – 2022) Source: Bloomberg Date: 21/11/2022 The Norwegian economy advanced 1.5% in Q3, following an upwardly revised 1.3% growth in Q2 – the largest expansion in a year. Mainland GDP, our preferred measure of growth that strips out the volatile oil and gas production component, also increased by a larger-than-expected 0.8% in Q3. In our opinion, the resilience of the Norwegian economy, together with the lack of a peak in domestic price pressures, suggest that Norges Bank may have to raise rates higher and deeper into next year than currently expected, which could support the krone. With no relevant domestic data out this week, we think that risk sentiment will be the main driver of NOK. CNY The Chinese yuan was little changed against the US dollar last week and ended roughly in the middle of the EM dashboard. Plans to ease some of China’s Covid restrictions, and efforts to support the country’s property sector, from the week before seem to have continued to work towards stabilising sentiment towards the yuan last week. Hard data for October released on Tuesday was largely on the weaker side, but not too different from expectations. While some of last week’s yuan fixings were rather strong, it seems that the easing pressure on the currency has allowed a shift towards a less aggressive stance from the PBOC. However, monetary authorities seem to be mindful of the exchange rate and don’t appear willing to engage in further policy easing, despite the economic slowdown. China’s MLF rate was left unchanged last week but, contrary to expectations, not all maturing loans were rolled over. This week, the loan-prime rates were also left unchanged. In the coming days, we’ll focus primarily on the coronavirus situation, as a recent increase in infections pushed the authorities to introduce local restrictions, dampening sentiment towards the yuan at the turn of the week. Economic Calendar (21/11/2022 – 25/11/2022) To stay up to date with our publications, please choose one of the below: 📩 Click here to receive the latest market updates👉 Our LinkedIn page for the latest news✍️ Our Blog page for other FX market reports 🔊 Stay up to date with our podcast FXTalk    
Analysis Of The AUD/USD Commodity Currency Pair's Price

Forex: Aussie versus greenback - forecast - November 22nd

InstaForex Analysis InstaForex Analysis 22.11.2022 07:40
The aussie fell 66 pips on Monday, having reached the target support at 0.6595 as the lower shadow of the one-day candle. This morning, the price is slightly correcting to the upside, but the mood, according to the falling Marlin oscillator, is still declining.     Breaking through the 0.6595 level will make the 0.6514/32 range available as a target. The range corresponds to the highs of the wide-range consolidation in late September and early October.     The price is not yet strongly reflected from the support on the four-hour chart, within a standard consolidation. There is still no convergence with the Marlin oscillator, so the downward direction prevails. But before you open short positions, wait for the price to overcome the 0.6595 level, that is, when we receive a trading signal. Relevance up to 03:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327734
The Bank Of England Has Warned That Negative Growth Will Extend All The Way

Forex: Pound sterling to US dollar - forecast - November 22nd

InstaForex Analysis InstaForex Analysis 22.11.2022 07:42
The pound fell by 0.62% (68 points) as the dollar index strengthened by 0.78% yesterday, which by this morning, creates conditions that are not bad for recommencing growth. The price stayed in the 1.1737-1.1940 range.     But the price is still under pressure due to the divergence with the Marlin oscillator, so the growth may only look like a false breakout above the 1.1940 level (break of the upper shadow). If bears prevail, the price will likely move away from the current levels under 1.1737, and settling further will open the next target at 1.1500.     On the four-hour chart, the price is moving above the MACD line and tries to rise above the balance line. The Marlin oscillator's intention to go above the zero line is clear. The main scenario seems to be a sideways movement with an attempt to rise above 1.1940. Let's wait until the direction is more stable. Relevance up to 03:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327736
The EUR/USD Pair: There Are Still No Sell Signals

Euro lost about a percent yesterday! Euro to US dollar - forecast - November 22nd

InstaForex Analysis InstaForex Analysis 22.11.2022 07:45
Yesterday, China reported a sharp rise in Covid cases in Beijing, and the return of social restrictions and isolation in several areas in the country. Oil rebounds and stock indices started to decline on risks regarding the collapse of new (after FTX) cryptocurrency platforms (Genesis). Against this backdrop, the euro fell in price by 0.80%.     This morning, the euro is approaching support at 1.0205. The price may correct just a bit, as the Marlin oscillator has a margin to the zero line on the daily chart - up to the limit of the declining territory, and may try to turn up without leaving this area. The bears' success, however, would open the 1.0100/20 target range.     The price has settled under the MACD indicator line on the four-hour chart. The Marlin oscillator is in negative territory, in the area where the direction is downward. These circumstances increase the probability of the attempt to overcome 1.0205. The immediate objective is to settle under 1.0205. Support is technically strong, preliminary price consolidation is likely. Relevance up to 03:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327738
USD/JPY Breaks Above 146 Line: Bank of Japan's Core CPI in Focus

New Zealand: RBA hiking the rate by 75bp is widely expected

InstaForex Analysis InstaForex Analysis 22.11.2022 07:54
The Reserve Bank of New Zealand will hold its last meeting of 2022 on Wednesday. Unlike most of the leading central banks in the world, members of the RBNZ meet only seven times a year. That's why each meeting attracts the attention of NZD/USD traders. And the November meeting will not be an exception. According to most experts' forecasts, the New Zealand central bank will raise the interest rate by 75 basis points, thus bringing it to 4.25%. Take note that the RBNZ raised the OCR rate by 50 points at the October meeting, as well as at the previous four meetings. However, at the final press conference, RBNZ Governor Adrian Orr admitted that they considered delivering a 75 bps hike. And yet the RBNZ was hesitant to accelerate the pace of monetary tightening, although it admitted that inflation was unacceptably high, so "there's still a lot of work to be done." As it turned out a little later, inflation is not only at a high level, but has no intention of slowing down.     The RBNZ's previous meeting was held on October 5, and the latest data on CPI growth in New Zealand was published on October 18. To the central bank's disappointment, the inflation rate soared again in the third quarter, significantly exceeding the forecasted levels. The consumer price index rose 2.2% in quarterly terms (against a forecast of 1.5%) and jumped to 7.2% year-over-year, against a forecast of a slowdown to 6.5%. In addition, the latest monetary conditions survey conducted by the central bank was published in early November. It turned out that New Zealand's inflation expectations rose across the time curve in the fourth quarter of 2022. Specifically, average one-year inflation expectations jumped to 5.1% from 4.9% seen in the third quarter of this year. Read next: Euro lost about a percent yesterday! Euro to US dollar - forecast - November 22nd| FXMAG.COM Given this disposition, it is possible to assume that the RBNZ members will consider the 75 bps hike tomorrow. Moreover, according to most currency strategists of big banks, this scenario is currently the basic one. Its realization will support the kiwi, because the hawkish mood has intensified even after the inflation report. But if the central bank keeps the moderate pace of rate hikes (i.e. increases it by 50 points to 4.0%), the pair will be under a lot of pressure. However, all indirect signs indicate that the RBNZ will decide to be more aggressive in curbing inflation. In that case, the NZD might get some short-term support against the greenback. However, upward surges in the NZD/USD pair should be used as a reason to open short positions. Moreover, the November FOMC meeting minutes will be released on the same day (i.e., November 23). This document can provoke a dollar rally, and the pair will not be an exception here. Even in case the OCR rate increases by 75 points. Since November 14, that is, since last Monday, the pair has been trading in a wide-range 100-point flat, alternately going from the limits of the 0.6080-0.6190 range. The bears are not able to find a foothold within the 60s figure. The bulls are not able to test the 62nd figure. At the end of tomorrow the scales will tip in one direction or the other. And in my opinion, the US dollar is in a better position here. Traders have already played back the news that the Federal Reserve will slow down the pace of monetary policy tightening - now they are concentrating on the scale of tightening the monetary policy. And this issue is currently debatable. In this context, the Fed's minutes, which will be published on Wednesday, is especially important. All the information of this document will be considered through the prism of the latest CPI growth report. The hawkish sentiment of most Committee members, the message that the final interest rate level will be higher (than previously expected) and the willingness to keep rates high even if inflation slows down - all these signals will greatly strengthen the dollar's position. At the same time, the RBNZ's 75 bps hike in the OCR rate has already been partly factored into current prices. The very fact of the realization of the 75-point scenario is likely to have a short-term impact on the pair. Thus, the upward price surges of the NZD/USD should be used as a reason to open short positions. The first bearish target is 0.6020 (the Tenkan-sen line on the one-day chart). The main target is slightly below, at 0.5950. At this price point the average Bollinger Bands line coincides with the upper limit of the Kumo cloud on the same chart. Relevance up to 00:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327722
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

A Fall In The British Pound (GBP) Was Hardly Surprising

InstaForex Analysis InstaForex Analysis 22.11.2022 08:00
Analyzing Monday trades: GBP/USD on 30M chart GBP/USD moved lower on Monday without any fundamental reasons. There was no important macroeconomic news or any other fundamental background. Yet, a fall in the pound was hardly surprising. It was already obvious last week that GBP had exhausted its upside momentum and that a strong downside correction was about to start soon. The correction will be logical since the recent rise of the pair was not supported by anything. However, the pair is still holding above the trendline, so the uptrend is still in place. I expect the pair to break below this line and develop a downtrend. This week, nothing important is expected in the US and the UK. So, the market may reveal its true intentions when not influenced by external factors. GBP/USD on M5 chart On the 5-minute time frame, trading signals were not so good. Traders couldn't take advantage of the downward movement as the only signal that we had emerged late at night. The first signal that should have been followed was a buy signal formed near the level of 1.1793. As the pair was falling throughout the day, the buy signal didn't bring any profit. Nevertheless, the pair moved to the upside by more than 20 pips after both rebounds from the level of 1.1793. So, traders should have set a Stop Loss to breakeven on both long positions. Actually, both positions were closed as the Stop Loss was triggered. Otherwise, traders could have closed them earlier with a small profit. The first day of the trading week cannot be called profitable but at least there were no losses. Trading tips on Tuesday: The pound/dollar pair continues to move up on the 30-minute time frame, supported by the ascending trendline. I still think that the instrument will depreciate in the coming weeks so the price will break below this trendline sooner or later. If this happens, the pound will develop a proper downtrend. On the 5-minute chart on Tuesday, it is recommended to trade at the levels of 1.1550, 1.1608, 1.1648, 1.1716, 1.1793, 1.1863-1.1877, 1.1967, and 1.1994. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. No important events are scheduled either in the UK or the US on Tuesday. This means that the market will have no strong drivers to follow. On Monday, the trend movement was rather weak which means that the price may decline slowly and may enter a flat channel. Basic rules of the trading system 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.     Relevance up to 19:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327716
The EUR/USD Price May Fall Under 1.0660

The EUR/USD Pair Started To Move Down On 1-Hour Chart

InstaForex Analysis InstaForex Analysis 22.11.2022 08:04
Analysis of EUR/USD, 5-minute chart The euro/dollar pair showed quite a confident downward movement and managed to overcome the uptrend line on Monday. Thus, the pair will no longer rise, and it may fall to the Senkou Span B line. As a reminder, as long as the price has not crossed both Ichimoku indicator lines (unless it is flat on the higher time frame), we don't consider the trend "hopeless". In other words, the pair still has chances to restore the upward movement if it is above the Senkou Span B line. But if it falls below the Senkou Span B line, then it might rush to its 20-year lows again. Remember that we consider the latest upward trend on the one-hour chart, to put it mildly, as groundless. Thus, the fall is logical. In fact, yesterday the US dollar rose without any reason either, as there were no important events and reports in the USA or the European Union. In any case, we are waiting for the price to fall to the Senkou Span B line. There was only one trade signal on Monday. The pair crossed the level of 1.0269 during the European trading session, and then managed to move down by 30 pips at the most. Therefore, you couldn't lose on the open trade, and the profit, if there was one, was minimal. However, a small profit is better than a loss. COT report The Commitment of Traders (COT) reports on the euro in 2022 are a paradox. Halfway through the year they showed an outright bullish mood of commercial players, but at the same time the euro was falling steadily. Then for a few months they showed a bearish mood, and the euro also steadily fell. Now the net position of the non-commercial traders is bullish again and getting stronger, and the euro has hardly moved away from its 20-year lows. This is happening, as we said, because demand for the U.S. dollar remains very high amid the difficult geopolitical situation in the world. So even if the demand for the euro is rising, the high demand for the dollar still does not allow the euro itself to rise as much. In the given period, the number of long positions from the non-commercial group increased by 7,000, whereas the number of shorts - by 2,000. As a result, the net position increased by about 5,000 contracts. The euro has been slowly rising in recent weeks, which already coincides with the readings of the COT report. At the same time we think that the dollar will rise due to the same geopolitics or due to the lack of factors for the euro's growth. The green and red lines of the first indicator are far away from each other, which may indicate the end of the uptrend (which, in fact, never happened). The number of longs exceeds the number of shorts by 113,000. Thus, the net position of the non-commercial traders may go on rising but it may not provoke the same growth for the euro. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 39,000 more shorts (635,000 vs 596,000). Analysis of EUR/USD, 1-hour chart The EUR/USD pair started to move down on the one-hour chart, which we expected last week. There was a reason why the quotes fell yesterday, but we could not find any reason to back up the pair's strong growth a few weeks earlier. Therefore, at this time, the pair is returning to its balance, which was disrupted a few weeks ago. On Tuesday, the pair may trade at the following levels: 1.0072, 1.0119, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, and also Senkou Span B lines (1.0116) and Kijun-Sen (1.0338). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are no important events scheduled in the EU and the USA for today. Therefore the market will have nothing to react to. High volatility is likely to persist and the price has technical reasons to continue falling. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327724
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The AUD/USD Pair Has The Potential To Continue The Rally

InstaForex Analysis InstaForex Analysis 22.11.2022 08:17
With the movement inside the Bullish Pitchfork channel on the 4 hour chart as well as the appearance of Falling Wedge pattern, then the AUD/USD commodity currency pair has a potential to continue its rally in the near future to move up and try to break above the level 0,6701. If this level successfully break above then the next level to test is 0,6799. Nevertheless, please note that if there is a downward correction if it manages to break below the 0.6475 level, it is certain that the potential for bulls from AUD/USD in the 4-hour chat will be hampered.   Relevance up to 02:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/114327
Credit squeezing into central banks – what next?

Technical Outlook Of The EUR/USD Pair By Oscar Ton

InstaForex Analysis InstaForex Analysis 22.11.2022 08:19
Technical outlook: EURUSD dropped through the 1.0222 lows on Monday before finding bids again. The single currency pair managed to pull back and is seen to be trading at about 1.0250 at this point in writing. Until prices stay above 1.0000, the bulls can come back in control and push the price towards the 1.0550-1.0600 zone before giving in to the bears again. EURUSD is facing interim resistance at 1.0481, while support comes in around 0.9935, followed by 0.9740 on the daily chart. A push above 1.0481 will further confirm and accelerate the climb towards the 1.0550-1.0600 zone. Also, note that 1.0600 is close to the Fibonacci 0.382 retracement of the previous larger-degree downswing between 1.2266 and 0.9535 levels respectively. EURUSD has been in a counter-trend rally after printing lows at 0.9535 earlier. The currency pair seems to be into its last leg higher towards the 1.0550-1.0600 zone before finding strong resistance. Also, note that the next-in-line price resistance is seen at about 1.0600 which could be the next target for bulls. Trading idea: Potential rally towards 1.0550 against 1.0000 Good luck!     Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301962
Nasdaq 100 Faces Bearish Breakdown Below Ascending Wedge and RSI Momentum Indicator

The US Dollar (USD) Index Has A Potential For Drop

InstaForex Analysis InstaForex Analysis 22.11.2022 08:21
Technical outlook: The US dollar index rose through the 107.60 highs on Monday before finding resistance. The index has pulled back since then and is seen to be trading close to 107.30 at this point in writing. It is safe to assume that the instrument is poised to turn lower towards 104.30 until the price settles below 109.00. We are looking lower in the near term. The US dollar index has hit a resistance zone around the 107.60-65 mark as seen on the 4H chart here. It has tested the immediate resistance trend line and also the Fibonacci 0.382 retracement of the recent downswing between 110.60 and 104.90. A high probability remains for a bearish turn from here and a decline lower towards 104.30. The US dollar index has been unfolding a larger-degree corrective wave lower from the 114.67 highs earlier. The corrective drop might have unfolded as a complex structure and could be into its last wave lower towards 104.30 levels. The bulls might be back in control thereafter and push prices higher towards 114.67 and further. Technical idea: Potential drop to 104.30 against 109.00 Good luck! Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301964
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

The EUR/USD Pair: New Impulsive Rally Can Begin

InstaForex Analysis InstaForex Analysis 22.11.2022 08:24
EUR/USD has moved down to test support at 1.0236 as we expected. Therefore, we don't need anymore downside progress, but to conclude that the corrective decline has been completed, we also need a break above resistance at 1.0305 and more importantly a break above resistance at 1.0396 that will call for the next impulsive rally towards 1.0782 and 1.0926 as the next upside targets. As we need a break above minor resistance at 1.0305 as an indication that the corrective decline has been completed. We also need to accept the possibility of more downside pressure towards 1.0172 before the correction finally comes to an end and a new impulsive rally can begin.   Relevance up to 07:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301968
World Cup 2022 Final Predictions: The Netherlands Is Still In The Top

Ed Moya And Jonny Hart Discuss The Trading Conditions During World Cup Games

Ed Moya Ed Moya 22.11.2022 08:51
OANDA Senior Market Analyst Ed Moya reviews the latest market news with Jonny Hart. They discuss the trading conditions during World Cup games, China’s COVID situation, a potential rail strike in the US, and cryptos.   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The cost of green steel production compared to conventional steel

The USD/THB Pair Has Been Relatively Stable

TeleTrade Comments TeleTrade Comments 22.11.2022 09:00
Over the past week, USD/THB has been relatively stable slightly above the 35.50 mark. For the week ahead, economists at MUFG Bank see the pair within a range of 35.17 to 36.68. Further THB gains may need more improvements in fundamentals “In the week ahead, markets will watch Q3 GDP numbers and October trade numbers. We expect a relatively buoyant GDP print of 4.6% YoY in Q3, from 2.5% in Q2. However, the trade deficit may continue, due to high import bills. Further THB gains may need more improvements in fundamentals.”  “For the week ahead, we see USD/THB within a range of 35.17 to 36.68 and slightly biased on the upside, along the 200 and 100 moving averages.” “We see downside risks to our end-2022 forecast of 39.25, given previous moves and are reviewing our forecasts.”   
Softer New Jobs Reading Would Likely Weigh On The Canadian Dollar

USD/CAD Pair's Traders Will Pay Attention To Canadian Retail Sales

TeleTrade Comments TeleTrade Comments 22.11.2022 09:02
USD/CAD picks up bids to pare intraday losses, the first in three days. Fading risk-on mood, recently downbeat prices of Oil keep the pair buyers hopeful. Hawkish hopes from Fed, the market’s cautious sentiment can add strength to the recovery moves. Canada Retail Sales, US PMIs and FOMC are this week’s key catalysts. USD/CAD bears struggle to keep the reins around 1.3430-40 during early Tuesday morning in Europe. In doing so, the Loonie pair prints the first daily loss in three amid the broad US Dollar sellers. However, fresh challenges for Canada’s key export item, namely the WTI Crude Oil, join recently easing optimism to underpin the bullish bias as the pair traders await Canadian Retail Sales for September. WTI Crude Oil retreats to $79.90 while reversing the early Asian session rebound from the yearly low. The black gold prices recently dropped amid chatters that the key global oil producers, namely the OPEC+ group, are likely to keep the latest oil production accord until 2023, which in turn suggests more output. On the other hand, the latest Covid woes from China weigh on the demand concerns and drown the energy benchmark. Elsewhere, the US Dollar Index (DXY) rebounds from its intraday low but still prints mild losses around 107.70 on a day amid recently downbeat comments from the US Federal Reserve (Fed) officials. Also likely to have weighed on the USD/CAD could be the softer second-tier activity data from the US. Federal Reserve Bank of Cleveland President Loretta Mester said in a CNBC interview, “I think we can slow down from 75 at the December meeting.” Previously, Atlanta Federal Reserve President Raphael Bostic also turned down the 75 bps move and challenged the US Dollar bulls. Additionally, downbeat prints of the Chicago Fed National Activity Index for October, to -0.05 compared to 0.17 prior, also allow the US Dollar buyers to take a breather. Even so, escalating COVID-19 fears from China, as the nation reports the seven-month high virus numbers and rush to lock down the major hubs, underpin the bullish bias over the USD/CAD pair. Further, the hopes of aggressive Fed rate hikes especially after the previous week’s strong US Retail Sales and Producer Price Index (PPI) keep the Loonie pair buyers hopeful. Looking forward, USD/CAD traders will pay attention to Canadian Retail Sales for September, expected -0.7% MoM versus 0.7% prior, for clear directions. However, preliminary readings of the monthly activity data and the Federal Open Market Committee (FOMC) Meeting Minutes are the key catalysts for the pair. Technical analysis The previous support line stretched from August 11, as well as the 21-Day Moving Average (DMA), respectively near 1.3460 and 1.3480, challenges the USD/CAD buyers.      
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

Expectations For The Bank Of England's Decision Offer Support For The GBP/JPY Cross

TeleTrade Comments TeleTrade Comments 22.11.2022 09:04
GBP/JPY struggles to gain any meaningful traction and consolidates near a two-week high. Bets for additional rate hikes by the BoE underpin the British Pound and acts as a tailwind. A modest pickup in demand for the JPY keeps a lid on any meaningful upside for the cross. The BoJ’s dovish stance might continue to weigh on the JPY and favours the GBP/JPY bulls. The GBP/JPY cross oscillates in a narrow band around the 168.00 mark through the early European session on Tuesday and consolidates its recent gains to a two-week high. Expectations that the Bank of England will continue hiking interest rates to curb inflation, along with subdued US Dollar demand, benefit the British Pound and offers support to the GBP/JPY cross. That said, a bleak outlook for the UK economy acts as a headwind for the Sterling. It is worth mentioning that the UK Office for Budget Responsibility (OBR) now projects the UK GDP to slump by 1.4% next year as compared to a growth of 1.8% forecast in March. Apart from this, a modest pickup in demand for the Japanese Yen keeps a lid on any meaningful upside for the GBP/JPY cross, at least for the time being. The downside potential, however, seems limited amid a dovish stance adopted by the Bank of Japan. In fact, BoJ Governor Haruhiko Kuroda reiterated on Friday that the central bank will stick to its monetary easing to support the economy and achieve the 2% inflation target in a sustained, stable fashion. This marks a big divergence in comparison to other major central banks, which should continue to weigh on the JPY. In the absence of any major market-moving economic releases, the fundamental backdrop suggests that the path of least resistance for the GBP/JPY cross is to the upside. That said, the lack of strong follow-through buying warrants some caution before positioning for an extension of the recent bounce from the 100-day SMA support tested last week.
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

The Positive Sides Of Lower Energy Prices In Europe Are Overshadowed By The Covid Situation In China And The War In Ukraine

ING Economics ING Economics 22.11.2022 09:13
Despite a goal-rich start at the World Cup in Qatar, markets are all about defense right now. New Covid restrictions in China are fuelling a return to the safe-haven dollar while investors wait for tomorrow's FOMC minutes. This may be laying the groundwork for a broader USD recovery into year-end. Elsewhere, we expect a 50bp rate hike by the RBNZ In this article USD: Recovery mode EUR: Preparing for a longer downtrend NZD: We expect a 50bp hike by the RBNZ CEE: EU disputes turn the spotlight from Hungary's central bank   USD: Recovery mode China’s Covid situation has suddenly returned as a very central driver for global markets this week. Over 27,000 cases were reported today, with the city of Guangzhou being the new epicentre of the outbreak, and local authorities are reportedly scrambling to impose those same restrictive measures that appeared a thing of the past after recent signals from the central government that the zero-Covid policy would be gradually abandoned. In FX, this has fuelled a return to the dollar. After all, optimism on China’s outlook was one of the two key forces - along with speculation about a dovish pivot by the Fed – behind the sharp dollar correction earlier this month. On the Fed side, tomorrow’s minutes will be important to watch, but the recent Fedspeak has undoubtedly added a layer of caution to the dovish pivot enthusiasm, which could mean investors may also be more reluctant to overinterpret dovish signals from the minutes. We have a few speakers to monitor today amid a very light data calendar in the US: Loretta Mester, James Bullard (both hawks) and Esther George (more neutral). Another theme to watch today will be the reported OPEC+ plans to increase output. The news caused an acceleration in the crude sell-off yesterday, with Brent trading below $85/bbl before recovering after the Saudis denied the reports. Should output hike speculation mount again, expect some pain for commodity currencies, as the combination with resurging Covid restrictions in China could prove quite toxic. We continue to see the dollar at risk of new brief bearish waves this week, but we note that the environment has now turned more benign for the greenback, and this may be laying the groundwork for a re-appreciation into year-end, which is our baseline scenario. We could see some consolidation around 107.50/108.00 in DXY today. Remember that liquidity will run significantly thinner in the second half of the week as the US enters the Thanksgiving holiday period. Francesco Pesole EUR: Preparing for a longer downtrend EUR/USD plunged back to the 1.0250 area as markets jumped back into defensive dollar trades yesterday. Indeed, the negative impact of China’s new Covid wave on the rather exposed eurozone economy and of an ever-concerning situation in Ukraine are overshadowing the positives of lower energy prices. We see further room for a contraction in EUR/USD this winter and continue to target sub-parity levels into the new year, as discussed in our 2023 FX Outlook. The eurozone calendar includes consumer confidence data (which is expected to have marginally recovered) and speeches by the European Central Bank's Robert Holzmann, Olli Rehn and Joachim Nagel. Expect some support at 1.0200 in EUR/USD: a decisive break below that level could underpin the return to a bullish dollar narrative and unlock more downside risks. Francesco Pesole NZD: We expect a 50bp hike by the RBNZ The Reserve Bank of New Zealand will announce monetary policy at 0100 GMT tomorrow, and it is a close call between a 50bp and a 75bp hike. As discussed in our meeting preview, we see 50bp as more likely, as signs of an accelerating housing market contraction warn against an overly aggressive approach. Markets (66bp in the price) and the majority of economists are, however, leaning in favour of a 75bp move. New rate and economic projections will also be released, and there are some key questions to be answered. The first of these is where the RBNZ will place the peak rate, which is currently at an unrealistic 4.10% (rates are at 3.50% now), so should be revised to 5.0% or higher, and how many cuts will be included in the profile. The second is how much more pain will be included in the forecasts for the housing market. Third is how fast inflation is projected to drop given the higher CPI readings for 3Q but more aggressive tightening. A half-point hike would likely be seen as a dovish surprise by markets at this point, but a significant revision higher in rate projections could mitigate any negative impact on the New Zealand dollar. Either way, expect any post-meeting NZD moves to be short-lived, as global risk dynamics and China news will soon be back in the driver’s seat for the currency. NZD/USD is at risk of falling back below 0.60 before the end of this year, while we target a gradual recovery to 0.64 throughout the whole of 2023. Francesco Pesole CEE: EU disputes turn the spotlight from Hungary's central bank Today is the busiest day in CEE this week. In the morning we start with the monthly indicators in Poland. The main focus will be industrial production for October, as a leading indicator for the rest of the region. Polish industrial production is benefiting from an improvement in supply chain functioning, which supports export-oriented industries, including automotive and electrical products. We expect only a slight slowdown from 9.8% to 8.8% year-on-year, above market expectations. Labour market numbers should confirm the still tight conditions with wage growth of 13.8% YoY. PPI will confirm continued price pressures in the economy with the YoY number accelerating from 0.2% to 1.1% in October. From a market perspective, today's numbers may be perceived as having implications for the National Bank of Poland's economic outlook and monetary policy. After all, it is wage growth that has been the biggest surprise to the central bank's forecast in the past. Thus, today's numbers may revive market hopes for an additional rate hike and support the zloty in the short term. However, we remain bearish in the medium term with a forecast of 4.90 EUR/PLN at the end of this year. Later today we will see the National Bank of Hungary (NBH) meeting. We do not expect any fireworks at this rate-setting meeting. The latest data regarding inflation and GDP were broadly in line with the central bank's expectations and the next staff projection update is only due in December. Against this backdrop, we don't see any game-changing moves. When it comes to the risk environment, we haven't seen a material improvement in domestic or external risk factors, which were flagged by the central bank as triggers to consider changes in its monetary stance. The Hungarian forint has been hovering in the 400-415 EUR/HUF range for the past few weeks, far from the NBH's pain threshold. The market is pausing in place, awaiting news from the Hungarian government's negotiations with the European Commission. These could theoretically come today, which would overlay today's NBH meeting. However, from last week's hints, it is likely that we will hear more bad news before any good news comes, which may cause further volatility in the FX market. However, a happy ending to this saga should see the forint below 400 EUR/HUF in our view. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The USD/JPY Price Reversed From The Lower Limit

The Yen (JPY) Will Be Sensitive To Changes In Monetary Policy Rates

TeleTrade Comments TeleTrade Comments 22.11.2022 09:43
Economists at Wells Fargo see the Japanese currency strengthening over the medium term, targeting a USD/JPY exchange rate of 135.00 by Q1-2024. Fed to stop raising rates by early 2023 “Although we anticipate US Dollar strength to continue into early 2023, we see the Japanese currency strengthening over the medium term, and believe the USD/JPY exchange rate could reach 135.00 by Q1-2024.”  “Changes in economic fundamentals should be a more influential currency driver than recent foreign exchange interventions, and we believe the Yen will be especially sensitive to changes in monetary policy rates. Given we expect the Federal Reserve to stop raising rates by early 2023, we see solid prospects for a stronger Yen past that point.”  
In Crypto, You Could Prove You Own A Private Key Without Revealing It

Stress In Crypto Market Continue | Global Recession Fears

Swissquote Bank Swissquote Bank 22.11.2022 10:30
Market sentiment is fragile on uncertainty regarding whether China would make a U-turn on its Covid reopening plans. Oil Recession fears were already weighing on fragilized oil on Monday morning, when news that OPEC+ would increase oil production by half a million barrels per day on the upcoming December 4th meeting wreaked havoc yesterday. The barrel of US crude tanked to $75 per barrel, below the September dip. Later, Saudi denied the report and we are back to $80 this morning. Forex In the FX, the US dollar index bounced higher after getting very close to the 38.2% retracement level on 2021-2022 rally, and mixed Fed comments tilt the balance to the upside for the greenback. Cryto In cryptocurrencies, news that Genesis warned investors that it could file for bankruptcy further weighed on sector sentiment. Watch the full episode to find out more! 0:00 Intro 0:22 China Covid worries fuel global recession fears 1:53 Oil dips on China worries, OPEC rumour 3:57 US dollar gains, equities fall 5:14 Should you sell Tesla because you don’t like Elon Musk? 7:39 Disney up as ex-CEO returns 8:30 Bitcoin slips below $16K on FTX contagion, Genesis warning Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Twitter #Tesla #Elon #Musk #China #Covid #selloff #crude #oil #EUR #USD #hawkish #Fed #FTX #contagion #Genesis #Bitcoin #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
The EUR/USD Pair Is Showing A Potential For Bearish Drop

The Energy Crisis Is The Main Difference Between EU and USA Situation

InstaForex Analysis InstaForex Analysis 22.11.2022 10:33
EUR/USD There is a slow but smooth reversal in euro, which has been going on for almost two weeks. The new talks of another 0.75% Fed rate hike as early as mid-December are obviously pushing the currency down. But even though inflation in the Euro area is at 10% y/y, which forces the ECB to raise the rate or make formidable statements about their willingness to increase it, there is an important factor that distinguishes it from the situation in the US. That is the energy crisis. In the US, fuel and electricity prices have changed little over the year, while in Europe, both have gone up very much, which is fatalistic. This means that euro will be under pressure, with highs of recent weeks becoming the upper limit of the range. Be careful when selling, especially from rebounds.       Relevance up to 07:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327754
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

Decline In Market Volumes Will Lead To A Strong Increase In Volatility

InstaForex Analysis InstaForex Analysis 22.11.2022 11:06
Trading volumes were quite low early this week because of the upcoming holiday in the US and increased expectations that the Fed will continue aggressively raising rates, at least until the end of this year. Even so, optimism prevailed in markets because the latest inflation data in the US noticeably decreased. The worsening situation in China, where the coronavirus infection continues to run rampant, has also prompted authorities to suspend school and business activities in Covid-infected areas. This points to a likely decline in the country's economic growth, which in turn is bound to have an impact on exports and imports to the US and other economically advanced countries. Market volumes will continue to decline, which will lead to a strong increase in volatility. However, it is unlikely to lead to any noticeable changes in the forex market because the sideways trend will continue, with some local rises or falls in the pairs where the dollar is present. A similar scenario could be seen in the stock markets, connected firstly with the above-mentioned factors, and secondly with extremely high uncertainty about the Fed's decision on rates and the bank's plans and forecasts for next year. Most likely, the decline will continue even amid positive news or data on the US economy. The focus will remain on the October Fed minutes, which might be the reason for noticeable movements. Forecasts for today: USD/JPY The pair is trading below the strong resistance level of 142.25. A break above it might push the quote to 143.30. AUD/USD The pair might resume the decline amid negative news from China and gloomy sentiment in the markets. A decline below 0.6585 might push the quote down to 0.6500.   Relevance up to 08:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327774
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

The Bank Of Japan Expresses Concern About The Decline In The Yen (JPY)

Kenny Fisher Kenny Fisher 22.11.2022 12:27
The Japanese yen has stabilized on Tuesday and is trading at 141.58, down 0.37%. USD/JPY rocketed higher on Monday, gaining 1.2%. BoJ Core CPI jumps to 2.7%  With inflation continuing to gain traction in Japan, there shouldn’t have been much surprise that BoJ Core CPI accelerated in October for a ninth successive month. Still, the 2.7% gain was much stronger than the prior reading of 2.0% and the consensus of 2.2%. The reading comes on the heels of National Core CPI, which rose to 3.6%, up from 3.0%. The Bank of Japan is unlikely to change its ultra-loose policy, even with inflation rising and a weak yen contributing to higher costs for households and businesses. The yen is well below the highs we saw in late October, when USD/JPY breached the 150 level and triggered a currency intervention. I am doubtful that such unilateral moves can have a lasting effect, but it is a tool that the government likes to resort to in order to dissuade speculators from pushing the yen lower. What may lead to a change in BoJ policy is the changing of the guard at the central bank. Governor Kuroda is scheduled to step down in April, after a 10-year stint as head of the bank. There have been calls to re-examine the bank’s policy, which has been in place for years. Sayuri Shirai, a former BOJ board member and candidate for a deputy BOJ governor, does not favor sharp rate hikes but has urged the bank to review its stimulus policy, show some flexibility and simplify its communication with the markets. This kind of thinking will be a breath of fresh air at the BoJ, whose policy meetings are usually drab affairs that are ignored by the markets, as the BoJ simply reiterates its policy and expresses concern about the decline in the yen. The most recent US inflation report was softer than expected, sending equity markets flying and the US dollar sliding lower. The Fed has responded with a steady stream of hawkish statements from Fed members, which has succeeded in dampening risk appetite and stabilizing the dollar. Fed member Mary Daly weighed in on Monday, stating that inflation remained unacceptably high and projecting that the fed funds rate will peak at 4.75%-5.00%   USD/JPY Technical USD/JPY is testing support at 141.55. Below, there is support at 140.77 There is resistance at 142.74 and 143.60 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

Saxo Bank Podcast: Downbeat Action In The Equity Market And More

Saxo Bank Saxo Bank 22.11.2022 12:37
Summary:  Today we look at the latest downbeat action in the equity market as we still await a more determined directional move after the multi-sigma upside explosion in the wake of the November 10 US CPI release. But it is interesting to note that the speculative nexus around crypto and Tesla are under intense pressure here and could prove a broader catalyst. We also look at the latest impact of rising Covid cases on commodities, the zany dump and pump yesterday in crude oil, the earnings and macro calendar ahead and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-22-2022-22112022
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The RBNZ May Want To Make A Loud Splash At Tomorrow’s Meeting

Kenny Fisher Kenny Fisher 22.11.2022 15:11
The New Zealand dollar has rebounded on Tuesday with strong gains. In the European session, NZD/USD is trading at 0.6151, up 0.83%. Will RBNZ go all out? The Reserve Bank of New Zealand has been tightening aggressively, delivering five straight 50-point hikes. The cash rate is currently at 3.5%, but this hasn’t achieved the goal of taming red-hot inflation. In the third quarter, CPI was almost unchanged, nudging lower to 7.2%, after a 7.3% gain in Q2. This was much higher than the RBNZ’s projection of 6.4%. With inflation expectations at 40-year highs, there is pressure on the bank to press the rate pedal to the floor. The RBNZ will make its rate decision on Wednesday, with the markets expecting a 75-point hike, which would be the bank’s largest rate increase on record. Policy makers are confident that the economy can withstand a 75-point increase. The labour market remains tight, with unemployment at a near-record low of 3.3%, and the economy has recovered impressively from the Covid pandemic. There is clearly a risk that a jumbo rate hike will cause a harder landing than the RBNZ would like, but inflation remains priority number one. With the next rate decision not until late February, the RBNZ may want to make a loud splash at tomorrow’s meeting. The recent US inflation report unleashed a wave of exuberance, sending equity markets higher and the US dollar on a nasty slide. Investors became more confident that Fed was close to a pivot in its aggressive policy and risk sentiment soared. The Fed has pushed back with Fed members delivering hawkish statements and projections, which has chilled risk appetite and stabilized the US dollar. Fed member Mary Daly weighed in on Monday, stating that inflation remained unacceptably high and projecting that the fed funds rate will peak at 4.75%-5.00%.   NZD/USD Technical There is resistance at 0.6072 and 0.6202 0.5955 and 0.5871 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Forex: British pound against US dollar - technical analysis - January 2nd

Trading forex cable - British pound to US dollar on November 23rd, 2022

InstaForex Analysis InstaForex Analysis 22.11.2022 23:51
GBP/USD on 30M chart     GBP/USD slightly grew on Tuesday, which was enough to maintain the upward trend and its line. Therefore, the pound still has a chance to continue rising, and in our opinion, it was and is absolutely illogical. Nevertheless, the technical picture doesn't provide any sell signals, so it wouldn't make sense to sell, no matter what the fundamental background and our expectations are. And there was no important macroeconomic news or any other fundamental background. No important reports were published either in the UK or the US on Monday, nor on Tuesday. If volatility was around 120 points on Monday, then it was 80 on Tuesday, which is quite low for the pound. Thus, there is no trend now, no volatility or logic in the way the pound moves. We expect the pair to settle below the trend line (just like the euro) and fall. GBP/USD on M5 chart     On the 5-minute timeframe, trading signals were not so good, just like it was for the euro. We observed the same flat, so it is not surprising that all the signals were formed around the same area, and they all turned out to be false. The price was not able to move 20 pips in the right direction. We can't blame the levels around which the signals were formed, it's because it's a flat, which makes any levels weak. That's why if you worked with the first two signals, you would have gotten a loss. But the loss is small and acceptable. Not every transaction is profitable. That's why nothing bad happened, just remember that the pair can trade flat. Trading tips on Wednesday: The pound/dollar pair continues to move up on the 30-minute time frame, supported by the ascending trendline. I still think that the instrument will depreciate in the coming weeks so the price will break below this trendline sooner or later. If this happens, the pound will develop a proper downtrend. But there is also a high probability of flat. On the 5-minute chart on Wednesday, it is recommended to trade at the levels of 1.1550, 1.1608, 1.1648, 1.1716, 1.1793, 1.1863-1.1877, 1.1950-1.1957 and 1.1994. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. Indexes of business activity in services and production will be published in Great Britain and the USA. These are not very important and we probably won't see a significant reaction. There will be some minor reports in America but we don't expect such data to have a strong influence on the pair. Basic rules of the trading system: 1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal. 2) If two or more positions were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored. 3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading. 4) Trade positions are opened in the time period between the beginning of the European session and until the middle of the US one, when all positions must be closed manually. 5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance. On the chart: Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines). Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time. Relevance up to 19:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327854
The Euro May Attempt To Resume An Upward Movement

EUR/USD Pair: An Upward Correction Has Begun

InstaForex Analysis InstaForex Analysis 23.11.2022 08:08
On Tuesday, the EUR/USD currency pair showed zero interest in the volatile movement. As we've already stated, it is challenging to anticipate volatile movements without fundamental and macroeconomic backgrounds. After all, these backgrounds weren't just missing last week; they were also missing locally. The market now has nothing to trade on because it has gradually processed all the available data. Because of this, over the past week and a half, we have seen relatively indistinct movements that resemble a flat more than a trend. The pair still fell by 70–80 points on Monday despite consolidating below the moving average line, so there isn't a clear flat. However, the movement is still unsatisfactory, especially on the lowest TF. We are forced to think about the "technique" because macroeconomics and the "foundation" are nonexistent now. The "technique" has made everything clear at this point. Given that the trend has shifted downward and there has been consolidation below the moving average, it is reasonable to anticipate further declines in the euro's value. Also, keep in mind that the pair's entire prior growth was illogical from our perspective; therefore, a potential fall this week or next week will already be logical. Right now, there are a few things that could help the euro's growth. They weren't numerous before, and they're even less prevalent now. Remember that the Fed's slowing pace of tightening its monetary policy is not a "dovish" factor that would be able to cause the dollar to decline. A rate cut or implementing a quantitative stimulus plan is the "dovish" factor. The Fed is not currently engaging in any practice. It's a two-edged sword that the ECB might raise rates for a while at a slightly faster pace than the Fed. After all, the Fed's rate is still higher, and there is more confidence in the US dollar than in the euro. So, in any case, we do not anticipate a significant increase in the euro's value. The majority of Fed members concur. We should reexamine the subject that has been well-known to everyone for a long time since there is, for the most part, nothing to discuss. In theory, even before Mary Daly and Rafael Bostic's speeches this week, we were certain that the Fed would only increase interest rates in December by 0.5%. However, the Federal Reserve board members did nothing more than reiterate what market participants had long believed. The rate will slow down in growth, increasing by 0.5% in December and 0.25% in February and March. The final rate level is 5%, though it may be slightly adjusted upward if inflation slows down too slowly. This forecast is what should guide our current "dancing." The present dollar exchange rate is no longer impacted by knowledge of the Fed's potential future actions. Theoretically, the euro can strengthen further against the dollar as the difference in interest rates between the ECB and the Fed is expected to close in the coming months. The euro currency can now grow, whereas the US currency previously grew as the gap widened. Therefore, we only partially rule out the possibility of the pair continuing to grow. However, the likelihood of further growth is only 30%, while the likelihood of a new fall is 70%. The pair's failure to swiftly reenter the area above the moving average yesterday favors the dollar. The pair has recently grown too quickly, necessitating a technical downward correction that benefits the dollar. The euro has no new growth drivers, which also benefits the dollar. The pair may not experience a significant decline, but another 100 to 200 points should be lost. As of November 23, the euro/dollar currency pair's average volatility over the previous five trading days was 93 points, which is considered "high." So, on Wednesday, we anticipate the pair to fluctuate between 1.0181 and 1.0367. The Heiken Ashi indicator's downward turn indicates that the downward movement has resumed. Nearest levels of support S1 – 1.0254 S2 – 1.0132 S3 – 1.0010 Nearest resistance levels: R1 – 1.0376 R2 – 1.0498 R3 – 1.0620 Trading Suggestions: An upward correction has begun for the EUR/USD pair. Therefore, in the event of a downward reversal of the Heiken Ashi indicator or a price rebound from the moving average, new short positions with targets of 1.0181 and 1.0132 should now be considered. After the price fixing is above the moving average line with targets of 1.0367 and 1.0498, purchases will become pertinent. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels – target levels for movements and corrections. Volatility levels (red lines) – the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327864
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The GBP/USD Pair Attempts To Maintain Its Upward Trend

InstaForex Analysis InstaForex Analysis 23.11.2022 08:12
Given the volume of the fundamental and macroeconomic background we currently have, the GBP/USD currency pair again displayed zero movements on Tuesday. Hint: there aren't any. Thus, it is understandable that volatility has decreased (though not to a "zero" value) and that trend movement, which is already evident on the 4-hour TF, has stopped. What should I do in this circumstance? Waiting is the easiest and most commonplace thing to do. Watch for new information, news, and events. Without them, the pair may trade sideways for several weeks, which is never good for traders. Currently, it remains above the moving average (unlike the euro). Still, we can see that two buy signals (rebounds from the moving average) did not succeed, preventing the pair from continuing its upward trend. So, we already have a flat; the only remaining question is how long it will take. In general, the pair has always traded trendily and with great volatility, especially in recent months. Therefore, no one should be surprised that the flat has started. Any movement must include a flat component. At least until the end of the week, we can continue to watch unremarkable movements that are very challenging to understand because nothing significant or important is planned. Trading on a lower TF is still possible, but issues might arise if the pair breaches the same level ten times in ten to twelve hours. The pound sterling cannot continue to increase because we do not see any justification for doing so. It is very challenging to explain why the pound has increased significantly over the past few weeks from the standpoint of the "foundation," macroeconomics, or geopolitics. As a result, we are still waiting for a strong downward correction. Scotland's decision to leave the UK has yet to be changed. We have forgotten about the issues that are now "time bombs" despite all the recent political turmoil in Britain. Remember that Edinburgh would still like to leave London's jurisdiction and rejoin the EU if Brexit could be resolved and completed. However, one valid concern arises in light of all the assertions made by Nicola Sturgeon, the First Minister of Scotland, over the past few years: Can the current administration even obtain permission to hold a new independence referendum? Or, can the current administration force this referendum without London's approval so that its outcomes will be upheld in court afterward? All that is currently visible are Sturgeon's requests for authorization to hold a referendum and London's blatant denials in response. What else has Nicola got to offer the Scots? Or does she believe that "rolling, not washing," will solve the issue? The most recent remarks made by Sturgeon were directed at the newly elected British Prime Minister, Rishi Sunak. She claimed that a new Prime Minister, who was not once more chosen by the Scots, now governs the Kingdom. Additionally, Sturgeon urged Sunak to avoid enacting austerity measures because the Scottish civil service will not comply with them and to hold early elections (obviously for the Parliament). In theory, Sunak urged Keir Starmer, the head of the Labor Party, to call for a general election. He claimed that Sunak was chosen by the Conservatives, not by the people of Britain. A new election would perfectly reflect how the British feel about the current administration because so much has changed since the last time they chose their representatives in Parliament. However, Sunak did not consent to early elections because he and his party wanted to retain their current majority. Furthermore, the majority would have been lost without a doubt. In the event of elections, Sunak's most recent proposals to cut government spending and subsidies and raise taxes would stir up a storm of emotions among the electorate, and fewer people would unquestionably vote for the Conservatives than in 2019. We should also remember Sturgeon's pledge to hold an independence referendum before October 19, 2023. There is little time left. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 121 points. This value is "high" for the dollar/pound exchange rate. Thus, on November 23, we anticipate channel movement that is constrained by the levels of 1.1740 and 1.1984. A new round of downward movement is indicated by the Heiken Ashi indicator turning downward. Nearest levels of support S1 – 1.1841 S2 – 1.1719 S3 – 1.1597 Nearest levels of resistance: R1 – 1.1963 R2 – 1.2085 R3 – 1.2207 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair attempts to maintain its upward trend. To avoid the Heiken Ashi indicator turning down at this time, buy orders with targets of 1.1963 and 1.1984 should still be considered. With targets of 1.1740 and 1.1597, open sell orders should be fixed below the moving average. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels – target levels for movements and corrections. Volatility levels (red lines) – the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327866
Ralph Shedler's Technical Analysis Of The USD/JPY Pair

The USD/JPY Pair Are Waiting For The Price To Fall To The First Support

InstaForex Analysis InstaForex Analysis 23.11.2022 08:14
On Monday, the USD/JPY pair rose above the resistance of the embedded price channel line at 141.76, on Tuesday it retreated and fell below the level, and this morning it appears like it wants to test it from below. The signal line of the Marlin oscillator is going up, so the price might just push through with the test, and with another breakout of the resistance of 141.76. Nevertheless, we can only talk about growth once the price has overcome the highs of the last two days (142.25). In this case, the MACD line near 144.85 may become the target for further movement. But we are waiting for the price to fall to the first support of 139.75. Breaking through the level will open the second target at 138.60. On the four-hour chart, the price is falling above the balance and MACD indicator lines. The MACD line and the Marlin oscillator are going down - there is a high probability of continuing such trends. To settle, the Marlin oscillator needs to move into the negative territory. This will happen once the price goes below the local high on the 17th (140.74).   Relevance up to 03:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327868
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

Technical Analysis Of The Cable Market (GBP/USD)

InstaForex Analysis InstaForex Analysis 23.11.2022 08:18
Yesterday the dollar index was down 0.60%. The pound, which followed, gained 62 points. On the daily chart, it appears like the price has settled in the range of target levels 1.1737-1.1940 in the last five days. The Marlin oscillator is developing a downward progression on the daily chart. Breaking through the nearest support at 1.1737 is already overdue. Settling below the level opens the 1.1500 target. On the four hour chart, the price can not rise above the balance indicator line, which confirms the corrective nature of the current local growth of the last few days. The Marlin oscillator outlines a reversal from the zero neutral line. Breaking through the MACD line support (1.1800) will confirm if the price really intends to overcome the target level of 1.1737 as well.     Relevance up to 03:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327870
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Growth Of The EUR/USD Pair Is Probably Over

InstaForex Analysis InstaForex Analysis 23.11.2022 08:20
The euro rose by 63 points on Tuesday, but this growth looks excessive against the background of the Russian oil price ceiling, which is already being prepared by the G-7 countries today and we also have the release of the minutes from the last hawkish meeting of the Federal Reserve. On the daily chart, the Marlin oscillator reacted weakly to yesterday's growth, and this morning it is already moving down. The growth is probably over and now the price will head towards 1.0205. The eurozone business activity indicators for November will be released today, forecasts are negative. Manufacturing PMI may drop from 46.4 to 46.0, the Services PMI forecast is 48.0 compared to 48.6 in October. Durable goods orders in the U.S. may rise 0.4% in October. On the four hour chart, yesterday's price growth looks flat, which is structurally closer to the consolidation, rather than a pronounced corrective growth. The growth occurred below the MACD indicator line. The Marlin oscillator is still in negative territory, almost touching the zero line. It is highly likely that there will be a synchronous price reversal from the MACD line and the signal line of the oscillator from the limit of the growth area. Relevance up to 03:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327872
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

The New York Stock Exchange: The Dow Jones Rose 1.18% To A 3-Month High

InstaForex Analysis InstaForex Analysis 23.11.2022 08:24
At the close of the New York Stock Exchange, the Dow Jones rose 1.18% to a 3-month high, the S&P 500 rose 1.36% and the NASDAQ Composite rose 1.36%.  Dow Jones The leading performer among the Dow Jones index components in today's trading was Intel Corporation, which gained 0.88 points or 3.04% to close at 29.82. Salesforce Inc rose 4.40 points or 3.04% to close at 149.25. Walgreens Boots Alliance Inc rose 1.20 points or 2.96% to close at 41.79. The least gainer was Walt Disney Company, which shed 1.37 points or 1.40% to end the session at 96.21. Amgen Inc was up 1.11 points (0.39%) to close at 287.05, while Boeing Co was down 0.44 points (0.25%) to close at 172.50.   S&P 500 Leading gainers among the components of the S&P 500 in today's trading were Best Buy Co Inc, which rose 12.78% to 79.88, Agilent Technologies Inc, which gained 8.08% to close at 156.86. as well as shares of CF Industries Holdings Inc, which rose 6.72% to close the session at 109.68. The least gainers were Dollar Tree Inc, which shed 7.79% to close at 152.37. Shares of Rollins Inc lost 6.14% to end the session at 39.53. Quotes of Medtronic PLC decreased in price by 5.30% to 77.93.  NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Cosmos Holdings Inc, which rose 86.93% to hit 0.33, Palisade Bio Inc, which gained 81.08% to close at 4.02, and also shares of Motorsport Gaming Us LLC, which rose 51.11% to close the session at 6.80. The least gainers were Eqonex Ltd shares, which lost 32.81% to close at 0.14. Shares of WiSA Technologies Inc lost 21.56% and ended the session at 0.20. Quotes of AGBA Acquisition Ltd decreased in price by 22.94% to 4.87. Numbers On the New York Stock Exchange, the number of securities that rose in price (2345) exceeded the number of those that closed in the red (761), while quotes of 110 shares remained virtually unchanged. On the NASDAQ stock exchange, 2259 companies rose in price, 1542 fell, and 236 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 4.79% to 21.29, hitting a new 3-month low. Gold Gold futures for December delivery added 0.07%, or 1.15, to $1.00 a troy ounce. In other commodities, WTI crude for January delivery rose 1.41%, or 1.13, to $81.17 a barrel. Futures for Brent crude for January delivery rose 1.22%, or 1.07, to $88.52 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.62% to hit 1.03, while USD/JPY shed 0.65% to hit 141.20. Futures on the USD index fell 0.63% to 107.05.     Relevance up to 04:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/302134
The NZD/USD Pair Will Have The Potential To Rally Upwards

The NZD/USD Pair Will Have The Potential To Rally Upwards

InstaForex Analysis InstaForex Analysis 23.11.2022 08:31
On the 4 hour chart kiwi shows that hidden deviations appear between price movements and the CCI indicator which confirms if in the near future NZD/USD will have the potential to rally upwards to the nearest liquidity gathering place, namely in the Equal High area, namely at the level of 0.6201 but if the CCI level drops below the level 0 and/or level 0.6962 is exceeded, it is very likely for the scenario described earlier cancel by itself. Relevance up to 05:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/114437
Navigating Financial Markets: Insights on Central Bank Decisions and Currency Quotes

The Turkish Lira (TRY) Pair Struggles Between The Geopolitical And Economic Catalysts

TeleTrade Comments TeleTrade Comments 23.11.2022 09:15
USD/TRY remains sidelined for the second consecutive day. Turkiye’s geopolitical tension with Syria jostles with improved Consumer Confidence to challenge traders. US Dollar inaction ahead of the key data/events also restricts the Turkish Lira pair’s immediate moves. USD/TRY seesaws around 18.60-65 during the second day of inaction heading into Wednesday’s European session. In doing so, the Turkish Lira (TRY) pair struggles between the geopolitical and economic catalysts ahead of the key US data and the Federal Open Market Committee (FOMC) Meeting Minutes. “Turkiye will attack militants with tanks and soldiers soon,” said President Tayyip Erdogan on Tuesday per Reuters. The national was also quoted in the news as signaling a possible ground offensive against a Kurdish militia in Syria after retaliatory strikes escalated along the Syrian border. Elsewhere, Turkish Consumer Confidence rose for the fifth consecutive month to 76.6 in November, per the latest readings flashed the previous day. The sentiment gauge rebound from a record low of 63.4 in June despite a continuing surge in inflation, according to Reuters. “The biggest improvement in confidence was seen in the general economic situation expectation over the next 12 months, which rose 3.4% from a month earlier, to stand at 80.5 points,” added the news. On the other hand, China’s daily coronavirus counts head towards the record top marked in April while the virus numbers from Beijing, Shanghai and Chongqing also increased, which in turn defends the USD/TRY bulls. On the same line were headlines from the South China Morning Post (SCMP) quoting Nomura’s Chief Economist Lu Ting as saying, “China’s economic growth next year appears to entirely hinge on a potential exit from its zero-covid policy, and even if such a shift occurs, more pain is inevitable before the real recovery.” Hence, Covid woes appear a drag for the USD/TRY pair. Against this backdrop, the US Treasury yields remain unchanged while the S&P 500 Futures also remain static as traders await the key US PMIs for November, as well as the Fed Minutes. That said, the USD/TRY pair’s further downside hinges on how well the FOMC rejects dovish calls from the policymakers. Technical analysis The USD/TRY pair’s repeated failure to cross the 19.00 threshold keeps sellers hopeful.    
The AUD/USD Pair’s Downside Remains Off The Table

The AUD/USD Pair Remains Well Supported By Modest US Dollar Weakness

TeleTrade Comments TeleTrade Comments 23.11.2022 09:25
AUD/USD gains some follow-through traction on Wednesday amid the prevalent USD selling bias. Bets for less aggressive Fed rate hikes and stability in the equity markets weigh on the greenback. Investors now look to the US macro data for some impetus ahead of the FOMC meeting minutes. The AUD/USD pair attracts some buying near the 0.6630 area on Wednesday and climbs to a two-day high during the early European session, albeit lacks follow-through. The pair is currently placed just above the 0.6650 level and remains well supported by modest US Dollar weakness. In fact, the USD Index, which measures the greenback's performance against a basket of currencies, is seen extending its pullback from over a one-week high and losing ground for the second straight day. Growing acceptance that the Federal Reserve will slow the pace of its policy-tightening cycle turns out to be a key factor that continues to weigh on the greenback. Apart from this, stability in the equity markets further undermines the safe-haven buck and benefits the risk-sensitive Aussie. That said, concerns about the potential economic headwinds stemming from a spike in new COVID-19 cases in China and the imposition of fresh lockdowns keep a lid on the optimism. Furthermore, the recent hawkish remarks by several Fed officials suggest that the US central bank might continue to raise borrowing costs to tame inflation. This, in turn, should limit any deeper losses for the buck and cap the upside for the AUD/USD pair. Traders might also refrain from placing aggressive bets and prefer to wait for a fresh catalyst from the release of the November FOMC meeting minutes. Hence, it will be prudent to wait for strong follow-through buying before confirming that the pullback from over a two-month high touched last week has run its course and positioning for any further gains. Heading into the key event risk, traders on Wednesday might take cues from the US macro data - Durable Goods Orders and the usual Weekly Initial Jobless Claims. This, along with the broader risk sentiment, will influence the USD demand and provide some impetus to the AUD/USD pair.  
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

Decision Of The Reserve Bank Of New Zealand (RBNZ) May Support The NZD

TeleTrade Comments TeleTrade Comments 23.11.2022 09:30
The Reserve Bank of New Zealand (RBNZ) hiked the official cash rate by 75 bps to 4.25%. FX markets responded well to the news, with the Kiwi spiking. Economists at ANZ Bank expect the decision to support the NZD. Recession fears may weigh on the Kiwi “Markets went into today’s decision pricing in favour of a 75 bps hike, and they got it. What they were unprepared for was the magnitude of the upgrade to the RBNZ’s OCR track, which now peaks at 5.5%. The RBNZ’s track is a technical projection, and it’s not supposed to signal that policy is on a pre-set path, but if we try to back-solve what is implied at each decision by the track, it points to another 75 bps hike in February, followed by 25 bps hikes in April and May.” “We think this decision will ultimately be NZD supportive on the grounds that the RBNZ’s track points to the OCR coming to rest above where markets expect the US Fed Funds rate to peak (markets are pricing in a 5.08% peak).” “Getting on top of inflation should also be positive for the NZD in that it should reduce the need for markets to price in an inflation discount to the real exchange rate. However, this decision will stoke recession fears, and that may weigh on the Kiwi.”  
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

President Of The Atlanta Fed Would Be Willing To Support Weaker Interest Rate Hikes

InstaForex Analysis InstaForex Analysis 23.11.2022 09:35
There is nothing to talk about since there was no news background in the first two days of the week. But today we will receive the first data that could have a chance of affecting the market. The business activity data are relatively important reports. Usually we can expect traders to react to them when results are either significantly higher or lower, which the market does not expect at all. But that happens very rarely. Thus, I do not expect any unexpected values or strong reactions from today's business activity reports. The Federal Reserve's minutes are just a normal economic report on the U.S. regions. It does not contain any information that might not be known to the market. It does not contain any important information at all. That leaves only a few reports like the durable goods orders, traders could react to it, but I don't think it will be significant. The same applies to the speeches of the Federal Open Market Committee and the European Central Bank members. In recent months, the most popular topic on the foreign exchange market has been the interest rates of a particular central bank. So much has been said and written about it... The market clearly understands that the Fed will slow down the pace of tightening of the monetary policy, while the ECB is not planning such a step yet. The demand for the euro and the pound could increase in recent weeks due to this factor, which made it possible to complete the e waves. Now the new speeches of the FOMC members, who will repeat the rhetoric of their colleagues, no longer have an impact on the market. For instance, Rafael Bostic, president of the Atlanta Fed said that he personally would be willing to support weaker interest rate hikes at the next meetings. He also said that in order to effectively fight inflation, the rate needs to be raised by a maximum of 100 basis points more. "I believe this level of the policy rate will be sufficient to rein in inflation over a reasonable time horizon", Bostic said. He, like Mary Daly, thinks the rate could end up rising a little higher than expected now, but based on current inflation data and GDP forecasts, no one is going to raise the rate above 5%. But at some point, he said, the Fed would need to pause and "let the economic dynamics play out," given that it may take what he estimated as anywhere from 12 to 24 months for the impact of Fed rate increases to be "fully realized." In my opinion, all this has long been known to the market, and each new speech by a member of the FOMC does not differ in content from the previous one. Even James Bullard, who is the brightest hawk and who could have said that the rate should be raised above 5%, keeps silent and does not argue with his colleagues. Based on all of the above, all I can say is this: there is no new data and it is not expected this week. The wave markup should and will remain in the first place during the analysis. Based on the analysis, I conclude that the construction of the uptrend section has become more complicated to five waves and is completed. Thus, I advise you to sell with targets located near the estimated mark of 0.9994, which corresponds to 323.6% Fibonacci. There is a probability of a complication with the upward section and taking a more extended form, but so far it is not more than 10%. The wave pattern of GBP/USD assumes the construction of a new downtrend section. I do not advise buying the pound right now because the wave pattern allows the construction of the downtrend section. It would be better to sell with the targets located near the 200.0% Fibonacci level.     Relevance up to 05:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327876
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

The Upcoming Fed Minutes Could Be A Strong Trigger For Market Movements

InstaForex Analysis InstaForex Analysis 23.11.2022 09:46
Until now, there is no definite trend in markets, partly due to the upcoming Fed minutes and holiday in the US. But stock markets did close higher on Tuesday because of the uncertainty over future rate hikes and strong rebound in oil prices. The latter not only supported energy and oil production stocks, but also the overall equity markets in both Europe and the US. This clearly shows that investors are carefully waiting for events that would drive the markets. Resultantly, it led to a decrease in market volumes The upcoming Fed minutes could be a strong trigger for market movements, where a prevailing hawkish sentiment will prompt a new wave of sell-offs. Meanwhile, a softer tone will lead to a rally, mainly because the market has already taken into account the likely 75 basis point rate hike in December. On the forex market, there are insignificant movements in the pairs where dollar is present. This is also due to the highly-anticipated Fed minutes and long weekend in the US. Most likely, quotes will move depending on the contents of the protocol, and it will be the same as that of the stock markets. The dynamics of government bonds will also play an important role, in which a noticeable decline in yields would put pressure on USD, while an increase would support it. Forecasts for today: GBP/USD The pair is trading within the range of 1.1740-1.1965. It will break out depending on the contents of the Fed minutes. A rise above 1.1965 might take the pair to 1.2060, while a decline below 1.1740 might push it to 1.1630. EUR/USD The pair is rising amid expectations of continued aggressive rate hikes from the ECB. A rise above 1.0350 could it to 1.0435.     Relevance up to 08:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327900
Hungarian inflation peak is behind us

FX Daily: In Hungary, The Central Bank Left Rates Unchanged

ING Economics ING Economics 23.11.2022 10:11
Risk sentiment is still being driven by news from China, with markets now turning a blind eye to Covid restrictions and instead speculating about an easing in tech regulation. Today, it's all about the Fed minutes, as bulls hope to find signs that Powell's hawkishness was conditional on a strong CPI reading. The USD correction may be nearing its bottom In this article USD: Ready to scan the Fed minutes EUR: Only a dollar function GBP: Hunt to testify CEE: The region remains quiet Source: Shutterstock   USD: Ready to scan the Fed minutes Global risk sentiment has rebounded after absorbing the news about China’s new Covid wave. One factor driving the rally has been increasing speculation that China is loosening its regulatory grip on the tech sector, essentially offering a lifeline to tech shares which have gone through some rough months. This sharp recovery in sentiment appears a bit premature in our view. While there is no clear evidence that the regulatory crackdown has taken a decisive turn (only yesterday, it was reported that China will fine Ant Group $1bn), there is plenty of evidence that Covid restrictions are rapidly being reintroduced into many parts of the country, including Shanghai. But today, all eyes are on the FOMC minutes, the big risk event before a quieter rest of the week as the US enters the Thanksgiving holiday break. Investors will scan the minutes for indications that the “higher for longer” plan is linked to short-term dynamics in CPI releases. Expect another rally in risk assets should the minutes provide hints of conditionality of Powell’s post-meeting hawkishness to a prolonged stickiness in inflation readings, which markets are now more convinced will not materialise after the latest CPI reading. In the absence of such hints, there may not be much for risk bulls to cling on to, given that the November meeting was still a largely hawkish one and the post-meeting (and also post-CPI) Fedspeak has been rather cautious on a dovish pivot. In FX, the dollar has faced a new round of selling. We don’t exclude that this correction will run a little further, but we continue to expect a rather radical inversion in the bearish dollar trend in December as the Fed remains broadly hawkish, energy prices rise again and the global economy slows. Elsewhere in the G10, the Kiwi dollar was stronger after a 75bp rate hike by the Reserve Bank of New Zealand overnight. Policymakers signalled they will take rates to 5.5% in 3Q22, that the economy will enter a recession and that the housing market will contract by 20% (more than previously expected) from its 2021 peak. We remain doubtful that the RBNZ will ultimately deliver this much tightening and tolerate such a sharp house market contraction, but for now, it remains a clear hawkish standout in the developed market. Francesco Pesole EUR: Only a dollar function The risk rally sent EUR/USD back above 1.0300. Indeed, some improvement in China-related sentiment is a positive development for eurozone assets and the euro, but swings in the pair remain primarily a function of broader dollar moves. The eurozone’s calendar includes November’s PMI numbers today. Which are expected to remain rather depressed despite the easing in energy prices. Barring a major upside surprise, it appears unlikely that the release will generate a strong market reaction. The same should be true for ECB speakers (Luis De Guindos, Pablo Hernandez De Cos, and Mario Centeno) today. The Fed minutes are the most important event for EUR/USD today, along with further changes in the market's sentiment on China. An extension of the rally to 1.0400/1.0450 is surely possible in the coming days, but a return to parity in the next few weeks remains our base case as we enter a challenging winter for the eurozone economy. Francesco Pesole GBP: Hunt to testify PMIs will be released in the UK today, and the consensus is looking for a further deterioration in both the manufacturing and composite gauges, possibly due to the prospect of austerity measures by the new UK government. On this topic, Chancellor Jeremy Hunt will testify before the Treasury Committee about his Autumn Statement this afternoon. The extended correction in the dollar is now pushing cable towards the 1.2000 gravity line. Expect some resistance around that level given the lack of strong domestic bullish drivers for the pound though. GBP’s greater sensitivity to risk sentiment compared to the euro means that further improvements in global risk sentiment can push EUR/GBP to test 0.8600 in the coming days. Francesco Pesole CEE: The region remains quiet Today, we expect a second round of monthly data from Poland, led by retail sales. Yesterday's data showed rather softer numbers. In our view, retail sales growth has slowed to low single-digit growth as wages are no longer keeping up with rising prices. We forecast growth of 3.8% year-on-year as high inflation is undermining consumers' purchasing power to such an extent that they are more cautious in their purchasing decisions. However, the attention grabber will be the POLGBs auction. Yields have moved down massively over the past month, completely changing the market picture. In the Czech Republic, we will see the Czech National Bank conference, including an opening speech by the governor, who rarely appears in public. In Hungary, the central bank left rates unchanged yesterday as expected. The National Bank of Hungary repeated its "whatever it takes" stance and the short-term focus remains on market stability until an improvement in risk perception occurs. The Hungarian forint ended slightly stronger after the press conference, but the EU story holds the main role here. Thus, we continue to wait for the European Commission's decision, which should have a positive impact on the market and move the forint closer to 400 EUR/HUF. Elsewhere, this week is more the domain of the rates market and FX remains without much enthusiasm. Impulses for bigger moves are hard to find both on the domestic and foreign side. Thus, our view hasn't changed much since Monday, and we can't expect much momentum from the region today either. The focus will thus be on the global story. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

The New Zealand Dollar (NZD) Seems To Have Gained More

Conotoxia Comments Conotoxia Comments 23.11.2022 10:20
The Reserve Bank of New Zealand raised the official cash rate (OCR) by 75 bps to 4.25% at its November meeting. As a result, the NZ interest rate rose to its highest level since January 2009. The RBNZ's decision was in line with market consensus. Wednesday's hike was the largest rate hike in the history of the central bank, which appears to be continuing its efforts to curb high inflation ahead of the upcoming RBNZ hiatus. The next scheduled meeting will not take place until 2023. Today's hike decision was the ninth in a row, meaning the OCR rate has risen 400 bps since October 2021, the most aggressive tightening by the RBNZ since 1999, according to tradingeconomics. RBNZ fights inflation New Zealand's central bank board said core consumer price inflation is too high, employment is above sustainable levels and short-term inflation expectations have risen. The committee signaled that more rate hikes may be on the way, assuming the OCR peaks at 5.5% in September 2023. Policymakers mentioned that they are aware that the spending decisions of many households will be largely constrained by rising debt service costs. A reduction in aggregate demand is expected to cause a temporary decline in GDP of about 1 percentage point from 2023, according to the RBNZ's statement to the interest rate decision. NZD highest since August 2022 The rate of the NZD/USD pair has been on the rise for six weeks, which seems to look like a better streak for the NZD since late 2020. This may also be due to the fact that interest rates in New Zealand may reach higher levels than in the United States. Additionally, the pace of hikes in the U.S. may already be lower, which, from an interest rate market perspective, may support the NZD exchange rate. Since the beginning of the month, the New Zealand dollar seems to have gained more than 6 percent against the US dollar. As a result, among the world's major currencies, the NZD is the strongest currency against the USD. In second place this month is the Japanese yen, with a strengthening of more than 5 percent. Source: Conotoxia MT5, NZDUSD, Weekly Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.     
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

Saxo Bank Podcast: The FOMC Minutes, The RBNZ Rate Hike And More

Saxo Bank Saxo Bank 23.11.2022 10:35
Summary:  Today we look at the market bouncing back strongly yesterday as we await a data dump from the US today ahead of the long Thanksgiving weekend there. While the focus from the Fed is on how the FOMC delivers its "deceleration of tightening" message, it is worth noting that financial conditions are close to their easiest since the Fed began hiking in 75 basis point increments back in June. Will this receive any comments in the FOMC minutes release tonight? We also look at leading indicators pointing to an incoming recession, talk crude oil, copper and wheat, the RBNZ hiking 75 basis points overnight, stocks to watch and much more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-23-2022-23112022
Analysis Of The CAD/JPY Commodity Currency Pair - 06.02.2023

The Slowing Canadian Economy And Rruling Out Of The Bank Of Japan Of Rate Cuts

InstaForex Analysis InstaForex Analysis 23.11.2022 10:41
Although markets are sluggish ahead of the upcoming holiday and long weekend in the US, stock indices are rising, while Treasury yields and dollar are falling. This is mainly due to the slightly less hawkish comments from Fed speakers this week, which is in contrast with the statement of St. Louis Fed President James Bullard last week that stressed that interest rates should reach at least 5-5.25%. San Francisco Fed chief Mary Daly also pointed out the need to be mindful of delays in the transmission of policy changes, and Atlanta Fed President Raphael Bostic stated that an additional tightening of 75-100p would be justified. So far, the rate forecast is stable. There is a 75% chance of a 50p increase, another 50p in February, and a peak to 5.06% by June. This is the benchmark that is currently guiding the markets. Today is packed with important statistics from the US. The first one will be the report on orders for durable goods, which will reflect the state of the industrial sector and consumer demand. Next is the consumer confidence indices from the University of Michigan, followed by the Fed minutes, where players will be looking for signals of a dovish reversal by the Fed. There are no signs that the dollar will resume rising. USD/CAD The slowing Canadian economy has not yet led to any noticeable deflationary pressure. The labor market is strong, with employment and wage growth being higher than that of the US. Retail sales also rose 1.5% m/m in October, which means that the Bank of Canada has more room to maneuver than the Fed and so far can implement a policy of containing inflation without looking at the rate of economic growth. Bank of Canada Governor Tiff Macklem will be giving a speech today, where markets expect to see a similar position to that of the Fed. However, this is likely to rule out strong moves. Regarding the loonie, the latest CFTC report showed that cumulative short positions declined by 402 million to -973 million, which means that there is a slow shift in sentiment. But overall the loonie remains bearish, with the settlement price pointing downwards and below the long-term average. It has a chance to strengthen. The possible rise of USD/CAD will end in the resistance area of 1.3500/30, followed by an attempt to test the local low of 1.3224. Chances for a deeper decline have become higher, with the target being the technical support at 1.30. USD/JPY Core CPI rose 3.6% y/y in October, 0.6% higher than that of September's. The data has risen for the 14th consecutive month, and the rate of growth is already higher than in 2014, when the sales tax was introduced to break out of the deflationary squeeze. By all indications, the time for deciding whether to end the stimulus programs is approaching. Last November 10, Prime Minister Fumio Kishida met with Bank of Japan Governor Haruhiko Kuroda, which resulted in new signals. Kuroda expressed the BoJ's position that a unilateral sharp depreciation of the yen is not welcome. This means that raising the yield ceiling for 10-year bonds from the current 0.25% is rejected, as is the ending of QQE. The rising inflation and ruling out of the BOJ of rate cuts for the time being sends a clear signal to investors who are selling the yen. As a result, the net short positions continued to decline, falling by 548 million to -5.909 billion during the reporting period. The settlement price is also reversed downward. For now, there is less reason for USD/JPY to resume its record rise as trading is highly likely to be sideways. There is also little chance that it will move beyond the technical resistance at 143.12, unless there are clearer signals from the Bank of Japan.     Relevance up to 07:00 2022-11-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327882
The South America Are Looking For Alternatives To The US Currency

On Tuesday, the S&P 500 regained the key level of 4,000 as it climbed 53 points (+1.36%) to 4003, its highest level in 2-1/2 months. - Market update by InterTrader - November 23rd, 2022

Finance Press Release Finance Press Release 23.11.2022 10:47
MARKET WRAP: STOCKS, BONDS, COMMODITIES           On Tuesday, the S&P 500 regained the key level of 4,000 as it climbed 53 points (+1.36%) to 4003, its highest level in 2-1/2 months. The Dow Jones Industrial Average rose 397 points (+1.18%) to 34,098, and the Nasdaq 100 gained 171 points (+1.48%) to 11,724.While investors awaited Wednesday's release of minutes of the Federal Reserve's November meeting, the U.S. 10-year Treasury yield retreated 6.7 basis points to 3.760%.Semiconductors (+3.34%), energy (+3.18%), and consumer durables & apparel (+2.26%) sectors were market leaders.Best Buy (BBY) surged 12.78%, as the consumer electronics retailer raised its full-year comparable sales guidance.Agilent Technologies (A) jumped 8.07%, after the life science company posted better-than-expected quarterly earnings and raised its full-year earnings guidance.Dell Technologies (DELL) climbed 6.77% and Urban Outfitters (URBN) advanced 8.89%, as both companies' quarterly results exceeded expectations.On the other hand, Dollar Tree (DLTR) plunged 7.79% after the discount store chain said it now expects full-year earnings at the lower end of its target range.Zoom Video Communications (ZM) fell 3.87%, and Medtronic (MDT) dropped 5.30%, as both companies gave down-beat business outlook.Regarding U.S. economic data, the Richmond Fed manufacturing index posted at -9 for November (vs +5 expected).European stocks also closed higher. The DAX 40 rose 0.29%, the CAC 40 gained 0.35%, and the FTSE 100 was up 1.03%.Oil prices were boosted by Saudi Arabia saying that OPEC+ was sticking with output cuts. U.S. WTI crude futures gained $1.10 to $81.14 a barrel.Gold price added $2 to $1,740 an ounce.           MARKET WRAP: FOREX           The U.S. dollar index softened against other major currencies. The dollar index fell back to 107.16.EUR/USD rose 60 pips to 1.0302. The Eurozone's official consumer confidence index posted at -23.9 for November (vs -26.8 expected).USD/JPY dropped 96 pips to 141.18.GBP/USD gained 66 pips to 1.1889.AUD/USD increased 41 pips to 0.6646. This morning, the S&P Global Australia manufacturing purchasing managers index fell to 51.5 in November.NZD/USD rebounded 53 pips to 0.6153. Later today, New Zealand's central bank is expected to raise its key interest rate by 75 basis points to 4.25%.USD/CHF slid 65 pips to 0.9520.USD/CAD declined 77 pips to 1.3371. Canada's retail sales declined 0.5% on month in September (as expected).Bitcoin rebounded 3% to $16,100.           MORNING TRADING           In Asian trading hours, NZD/USD traded higher to 0.6178. New Zealand's central bank increased its key interest rate by a record 75 basis points to 4.25%, and signaled further tightening going forward.EUR/USD traded higher to 1.0317, GBP/USD was stable at 1.1884, and AUD/USD was little changed at 0.6644.USD/JPY edged higher to 141.32.Gold price was flat at $1,740 an ounce.Bitcoin advanced a further 1% to $16,450.           EXPECTED TODAY           November S&P Global manufacturing purchasing managers index will be announced for the Eurozone (45.7 expected), Germany (45.4 expected), France (46.8 expected), the U.K. (45.6 expected) and the U.S. (50.1 expected).In the U.S., durable goods orders are expected to grew 0.3% on month in October. The latest number of initial jobless claims is expected to rise to 228,000.The number of U.S. new home sales is expected to fall to an annualized rate of 580,000 units in October.U.S. crude-oil stockpiles are expected to decline 1.055 million barrels last week.           UK MARKET NEWS           United Utilities Group, a water and wastewater services company, reported first-half results: "Revenue was down 13 million pounds, at 919 million pounds, largely reflecting lower consumption more than offsetting the allowed regulatory revenue increase. (...) Operating profit at 259 million pounds was 74 million pounds lower than the first half of last year, (...) Reported basic earnings per share increased from (31.7) pence to 51.8 pence. (...) The Board has proposed an interim dividend of 15.17 pence per ordinary share in respect of the six months ended 30 September 2022. This is an increase of 4.6 per cent compared with the interim dividend relating to last year."Oil & Gas, basic resources and auto & parts shares fell most in London on Monday.From a relative strength vs FTSE 100 point of view, BP (+6.52% to 488p) crossed above its 50-day moving average.From a relative strength vs FTSE 100 point of view, Croda International (-1.07% to 6828p) crossed under its 50-day moving average.From a technical point of view, BAE Systems (+2.07% to 798.2p), BP (+6.52% to 488p) crossed above their 50-day moving average.           ECONOMIC CALENDAR           Time Event Forecast Importance   04:30 S&P Global/CIPS Manufacturing PMI Flash (Nov) 45.6 MEDIUM     04:30 S&P Global/CIPS UK Services PMI Flash (Nov) 47.6 MEDIUM     08:00 Building Permits Final (Oct) 1.526M MEDIUM     08:30 Durable Goods Orders MoM (Oct) 0.3% HIGH     08:30 Initial Jobless Claims (19/Nov) 228k MEDIUM     08:30 Durable Goods Orders Ex Transp MoM (Oct) 0.1% MEDIUM     09:45 S&P Global Manufacturing PMI Flash (Nov) 50.1 MEDIUM     09:45 S&P Global Services PMI Flash (Nov) 49.3 MEDIUM     09:45 S&P Global Composite PMI Flash (Nov) 49.5 MEDIUM     10:00 New Home Sales (Oct) 580k HIGH     10:00 Michigan Consumer Sentiment Final (Nov) 54.7 MEDIUM     10:30 EIA Gasoline Stocks Change (18/Nov) 383k MEDIUM     10:30 EIA Crude Oil Stocks Change (18/Nov) -1.055M MEDIUM     13:00 Baker Hughes Total Rig Count (25/Nov)   HIGH     14:00 BoE Pill Speech   MEDIUM     14:00 FOMC Minutes   HIGH
Reserve Bank of New Zealand: Kenny Fisher says he expects a 25bp rate hike on May 24th

The RBNZ Statement Forecasted That The Economy Will Tip Into Recession In June 2023

Kenny Fisher Kenny Fisher 23.11.2022 12:18
The New Zealand dollar has extended its rally on Wednesday. In the European session, NZD/USD is trading at 0.6181, up 0.47%. RBNZ delivers record hike The Reserve Bank of New Zealand pushed the rate pedal to the floor today, with a supersize rate hike of 75 basis points, a record high. This raised the cash rate to 4.25%, up from 3.5% and the highest level since 2008. The move was widely expected, but nonetheless, it sent bond yields and the New Zealand dollar higher. The RBNZ is forecasting that the cash rate will peak at 5.5% in 2023, which means there’s plenty of life left in the current rate-tightening cycle, with the RBNZ currently boasting the highest cash rates among the major central banks. The bank has designated inflation as public enemy number one, but despite a series of oversize hikes, there are no signs that inflation has peaked. In the third quarter, CPI was almost unchanged in Q3, nudging lower to 7.2%, following a 7.3% gain in Q2. This figure caught the RBNZ off guard, as the bank projected that CPI in Q3 would slow to 6.4%. The Monetary Policy Statement was decidedly hawkish, noting that “core consumer price inflation is too high” and “near-term inflation expectations have risen.” How will New Zealand’s economy fare after the latest rate hike? The labour market remains tight, with unemployment at a near-record low of 3.3%, and the economy has recovered impressively from the Covid pandemic. Still, the RBNZ statement forecasted that the economy will tip into recession in June 2023 and that inflation would accelerate to 7.5% in the fourth quarter and would not fall back to the midpoint of the 1%-3% target until 2025. The RBNZ has taken off the gloves, but the prolonged battle against inflation will not end anytime soon. The US will release the FOMC minutes later today, which could impact on the movement of NZD/USD. Investors will be looking for hints about what the Fed has planned at the December 12th meeting. The markets have priced in a 50-basis point hike, although there is an outside chance of a 75 bp increase.   NZD/USD Technical There is resistance at 0.6217 and 06283 0.6139 is providing support, followed by 0.6095, a monthly support line This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The Cabel Market (GBP/USD Pair) May Trade Relatively Flat This Week

Sterling (GBP) Has Enjoyed The Risk-On Backdrop | The Kiwi (NZD) Has Found Another Support On The RBNZ Hiking

Saxo Bank Saxo Bank 23.11.2022 14:31
Summary:  The US dollar is mixed ahead of a raft of second-tier data points later today and the FOMC minutes tonight, with focus on the scale of disagreement among Fed members on the tightening path from here. A long Thanksgiving weekend is set to follow. Elsewhere, the kiwi has found another leg up on the RBNZ hiking by 75 basis points, the most ever, overnight, while sterling dodged a bullet as the UK Supreme Court ruled against Scottish independence referendum proceeding. FX Trading focus: RBNZ surprises (some) with 75 basis point hike. USD scratching around for direction. The market was about evenly split on whether the RBNZ would rock the boat with a largest.-ever rate hike overnight, which is what it delivered, taking the rate +75 bps to 4.25% and guiding rather hawkish, which helped to rise the peak rate expectation into next spring some 30 basis points toward 5.50%. This drove a bit more NZD strength, but as the currency has been on such a strong run lately, the shock value was minimal in market pricing. I suspect that while there may be a bit more to wring out of the situation here, we are very likely at peak hawkishness from the RBNZ in relative terms to other central banks. The RBNZ was one of the first G10 central banks to cease and desist with QE and begin hiking rates and the impact on NZ economic growth will mount aggressively in coming months. AUDNZD, for example, has also been helped lower not just by RBNZ hawkishness, but by the Aussie’s greater sensitive to the frustration over China’s now-you-see-it, now-you-don’t reopening process. The US dollar continues to scratch around for direction, dipping yesterday on the ideal combination for USD bears, falling long US Treasury yields and strong risk sentiment. As discussed in my Monday update, the heavy hitting data doesn’t arrive until next week with the Friday jobs and earnings data the chief focus, followed by December 13 November US CPI release.  These CPI releases have the market tied in knots – it is beginning to look a bit one-dimensional, and the market may need to broaden its focus on the implications of an incoming recession soon, but more incoming data needed to point that recession is perhaps necessary first. I don’t have my hopes up for any revelations from tonight’s FOMC Minutes release, although interesting to see if there are obvious signs of disagreement on how to guide for the slowdown in tightening, as well as whether “a few”, “some”, or even “several” Fed members make a fuss about financial conditions easing aggressively. As most of that easing has taken place after the FOMC meeting itself, it is doubtful. Chart: GBPUSDSince the epic USD slide on the November 10 release of the softer-than-expected US October CPI data, the US dollar has done very little, while sterling has generally edged higher versus its most important peers on a further thaw in negative sentiment, even if the longer term outlook for the UK has been made that much more bleak by the latest budget announcement. Sterling and the US dollar will remain sensitive to new significant shifts in sentiment and in opposite directions. If we continue to see a melt-up inspired by mounting certainty that the Fed isn’t about to surprise the market any time soon and incoming data allows the market to indulge in soft-landing hopes for now (insufficiently strong data to raise inflation fears), GBPUSD may be able to drift back to 1.2000 and possibly even to the 200-day moving average above 1.2200 or even the major pivot highs into 1.2250+ from early August (!). On the flip-side, oncoming recession concerns are likely to only rise from here, which in past market cycles will eventually lead to a deterioration in financial conditions (currently close to the easiest they have been since the before the Fed started hiking in 75 basis point increments back in June) and weaker risk sentiment. The weather could also turn colder and remind investors of Europe’s energy predicament, a constant concern in the background. But it will take a lot of cable selling to suggest weakness – effectively, we would need to take out most of the move down to 1.1500 to reverse the November 10 move in USD weakness. Source: Saxo Group Sterling has enjoyed the risk-on backdrop, with GBPUSD probing well above 1.1900 this morning, with an added modest boost on the preliminary UK November PMI’s looking relatively benign (Services unchanged at 48.8 vs.  the story breaking that the UK Supreme Court ruled against a new Scottish independence referendum proceeding until the UK government had given permission for one to be held. I have been surprised at sterling’s strength even beyond the initial reset of the situation provided by the removal of Truss-Kwarteng and supposedly soothing stability on offer from Sunak-Hunt. Perhaps positioning is the key – the last short sterling holdouts haven’t been entirely flushed and the those that have already been flushed (or took profits) are in no rush to get involved just yet. It will likely take some time and a catalyst for a fresh weak sterling cycle to develop down the road. Table: FX Board of G10 and CNH trend evolution and strength.After this RBNZ meeting overnight, have to wonder if kiwi is soon or already has reached its peak potential. Elsewhere, interesting to note the CNH relative weakness against the market, tracking USD direction as it so often does after the brief period of underperformance about a month ago. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Not hanging my hat on any new developments here. AUDNZD has achieved a remarkable -6.1 reading in its negative trend strength reading. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights 1330 – US Oct. Preliminary Durable Goods Orders 1330 – US Weekly Initial Jobless Claims 1445 – US Nov. Preliminary Manufacturing and Services PMI 1500 – US Nov. Final University of Michigan Sentiment 1500 – US Oct. New Home Sales 1905 – US FOMC Meeting Minutes 1905 – New Zealand RBNZ Governor at Parliament committee 2130 – Canada Bank of Canada Governor Macklem to testify to parliament committee   Source: https://www.home.saxo/content/articles/forex/fx-update-kiwi-at-maximum-potential-after-super-sized-rbnz-hike-23112022
The EUR/USD Pair Chance For The Further Downside Movement

The Economy And Inflation In The Eurozone Have Been Less Rate-Sensitive

Alex Kuptsikevich Alex Kuptsikevich 23.11.2022 14:48
Preliminary eurozone PMI estimates are better than expected, although they point to an economic contraction. Germany's manufacturing PMI rose from 45.1 to 46.7 in November, contrary to forecasts of a decline to 44.9. Values below 50 indicate an activity decrease, while higher-than-expected figures indicate its lesser intensity. The service sector PMI declined from 46.5 to 46.4, but above the expected 46.1. The composite PMI rose from 45.1 to 46.4 thanks to manufacturing. Earlier, a positive reversal, albeit from low levels, was also marked by the ZEW indices. Tomorrow will be the turn of the Ifo to confirm or deny this trend. Most likely, the Eurozone and the German economies will shrink in the current quarter and could also lose some money at the start of next year. However, so far, we only see signs of a relatively modest slowdown, and the labour market is displaying the highest employment rate in the history of the Euro-region. The ECB is expected to raise its rate by at least 50 points in December but might take a more drastic step with relatively strong economic data, as we saw in New Zealand earlier today. Until 2009, the eurozone economy grew strongly, even at higher rates than in the US, contributing to the euro's strength against the dollar. The economy and inflation in the Eurozone have been less rate-sensitive than expected and more so than in the USA. The euro, however, has been relatively well worked out the difference between the ECB and Fed rates. If so, the ECB could take rates above US levels, which would gradually restore the position of the single currency lost since the start of 2021.
The USD/CAD Pair Has The Strong Downside Momentum

Canada: Shrank retail sales may decrease chances of a 50bp rate hike

Kenny Fisher Kenny Fisher 23.11.2022 21:50
The Canadian dollar has edged lower on Wednesday. In the North American session, USD/CAD is trading at 1.3428, up 0.42%. Is Canada heading towards a recession? The Canadian consumer is in a sour mood. I don’t blame her, given the cost-of-living crisis and higher mortgage payments due to rising interest rates. Retail sales for September slipped 0.5% MoM as expected, but lower than the August gain of 0.4%. More worrying, retail sales fell by 1.0% QoQ, the first quarterly decline since Q2 2020. Read next: The RBNZ Statement Forecasted That The Economy Will Tip Into Recession In June 2023| FXMAG.COM The decline in consumer spending could well be a result of the Bank of Canada’s concerted effort to beat inflation with a steep rate-hike cycle, which has raised the cash rate to 3.75%. Despite this, inflation has been stickier than expected, currently at 6.9%. The drop in retail sales will put a damper on expectations of a 50-basis point hike at the December meeting, as the Bank of Canada will likely deliver a modest 25-bp hike. Inflation, the bank’s number one priority, remains very high at 6.9%, as the BoC’s aggressive rate-hike cycle is yet to show results. The benchmark rate is currently at 3.75%, and like the Federal Reserve, there’s more life remaining in the current rate-tightening cycle. The BoC is closely monitoring employment and retail sales data, as strong numbers will make it easier for the bank to continue hiking as policy makers look for that elusive peak in inflation. The bank will have little choice but to continue raising rates until it sees indications that inflation is peaking, and is expected to continue raising rates into next year. Higher and higher rates make it ever more difficult for the BoC to guide the economy to a soft landing without tipping into a recession. The Canadian dollar could show stronger movement later in the day, with two key events on the calendar. BoC Governor Macklem will testify before a parliamentary committee in Ottawa, while the FOMC releases the minutes of its meeting earlier this month, where it raised rates by 75 basis points. USD/CAD Technical USD/CAD  is putting pressure on resistance at 1.3455. Next, there is resistance at 1.3523 There is support at 1.3341 and 1.3218 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/CAD eyes Macklem, FOMC - MarketPulseMarketPulse
The Pound Is Now Openly Enjoying A Favorable Moment

UK: Recession seems to be very close or there already. Wages go up, what does not help BoE

Kenny Fisher Kenny Fisher 23.11.2022 22:04
The British pound has posted sharp gains on Wednesday. In the North American session, GBP/USD is trading at 1.2063, up 1.51%. The pound hasn’t been at these levels since mid-August. UK PMIs continue to decline The UK economy is likely in a recession, and today’s soft PMI data will only raise concerns about the economic outlook. October’s PMIs remained in contraction territory, with the Services PMI coming in at 48.2 and the Manufacturing PMI at 46.2, both unchanged from September. Read next: Canada: Shrank retail sales may decrease chances of a 50bp rate hike| FXMAG.COM The UK labour market has been a bright spot in the gloomy economic picture, but tight conditions have pushed wages higher, which is making it more difficult for the Bank of England in its fierce battle with inflation. The BoE is projecting that unemployment will rise to 6.5% and the country will experience negative growth in the second half of this year, throughout 2023 and into the first half of 2024. GDP declined by 0.2% in the third quarter, and the headwinds look formidable for the UK economy and the British pound. The Fed minutes, which will be published later today, may not contain any nuggets for the markets. The Fed has embarked on a coordinated campaign to convince the markets that it has no plans to pivot on policy and that rates will keep heading higher longer than anticipated.  The soft US inflation report triggered exuberance in the markets, with a belief that the Fed would become more dovish. However, as Fed members have been stating for the past couple of weeks, inflation remains unacceptably higher and the fight to curb inflation is far far from over. FOMC policy-makers are united in the need to continue raising rates, and the minutes should shed light on whether they are also in agreement on the end-point for the current rate-hike cycle. GBP/USD Technical GBP/USD is testing resistance at 1.2068. The next resistance line is at 1.2192 There is support at 1.1875 and 1.1767 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Sterling soars despite soft PMIs - MarketPulseMarketPulse
Bitcoin price may be stealing the show soon. We could say that this week Bank of Japan decision draws more attention than usually

Ralph Shedler (InstaForex) comments on USD/JPY - November 23rd

InstaForex Analysis InstaForex Analysis 23.11.2022 22:53
USD/JPY Strong Sellers! The USD/JPY pair is dropping at the time of writing. It's located at 139.43 above the 138.42 former low which represents a downside obstacle. The downtrend line stands as an upside obstacle. As long as it stays below this line, the rate could approach and reach new lows. Only staying above 138.42 former low could announce a potential growth at least towards the downtrend line. USD/JPY Trading Scenario! Dropping and stabilizing below 138.42 announces a deeper drop and helps traders to sell the pair. Relevance up to 21:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/302270
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

EUR/USD: The Market Is About To Go Through A Period Of Illogical Movements

InstaForex Analysis InstaForex Analysis 24.11.2022 08:00
On Wednesday, the EUR/USD currency pair again displayed this type of movement, which is very challenging to reconcile with the macroeconomic backdrop available to traders. The pair has been moving upward for almost the entire day, although, according to detailed macroeconomic statistics, the pair should have alternated between falling and growing throughout the day. Indicators of business activity in the manufacturing and service sectors were released in the European Union in the morning. All three indices were below the crucial level of 50.0, although variations from the predicted values and the previous month's values were negligibly different. Therefore, they could not be regarded as advantageous for the euro currency. Additionally, business activity indices from the USA were published, either decreasing below the "waterline" or merely remaining below it. Therefore, there was no reason for the dollar to increase. But for some reason, while the euro has not decreased, the dollar has. Orders for long-term goods were among the other reports published in the United States. Even though we don't think this report is significant, a response could have been expected, especially since its value ended up being higher than expected. As a result, everything reported as bad for the euro currency ended up being true, while everything reported as good for it was realized. In the past week and a half, we have stated this point numerous times: in principle, the entire growth of the euro currency does not correspond to the "foundation." The US dollar cannot lose hundreds of value points simply because inflation in the country has decreased. The same logic applies to the statements made by some Fed members who suggested that the rate may begin to rise more gradually in December. However, it will still keep expanding for a few more months. Additionally, for some reason, the market does not consider Jerome Powell's remarks that the rate may eventually rise more slowly than anticipated. This is, after all, a "hawkish" factor. However, as was already mentioned, the market studiously ignores all the "bullish" elements for the dollar. The technical picture on the 24-hour TF is the only factor currently supporting the euro currency. Since the price has crossed all of the Ichimoku indicator's lines, a new uptrend can be formed. What should we do with this? Now that the pair has moved back into the region above the moving average line, the 4-hour TF is moving upward. As a result, you must make a trade to gain an increase, but keep in mind that this growth is illogical. The pair may consolidate after a long downward trend. If so, a downward consolidation will undoubtedly occur and may appear illogical. The market is about to go through a period of illogical movements. We also believe that recent movements have been uniformly positive. It can move in a range between 1.0230 and 1.0450. Although it remains challenging to draw such a conclusion with certainty, it is also possible. As of November 24, the euro/dollar currency pair's average volatility over the previous five trading days was 89 points, which is considered to be "average." So, on Thursday, we anticipate the pair to fluctuate between 1.0266 and 1.0445. The Heiken Ashi indicator's downward turn indicates that the downward movement may resume. Nearest levels of support S1 – 1.0254 S2 – 1.0132 S3 – 1.0010 Nearest levels of resistance: R1 – 1.0376 R2 – 1.0498 R3 – 1.0620 Trading Suggestion: The EUR/USD pair has resumed consolidation above the moving average. To avoid the Heiken Ashi indicator turning down, we should now consider opening new long positions with targets of 1.0445 and 1.0498. No earlier than the price fixing below the moving average line with a target of 1.0132 will sales become significant. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. Moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which you should trade now. Murray levels – target levels for movements and corrections. Volatility levels (red lines) – the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.       Relevance up to 01:00 2022-11-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327979
The Data May Keep The British Pound (GBP) From Rising

GBP/USD Pair: Volatility Was Extremely High Once More

InstaForex Analysis InstaForex Analysis 24.11.2022 08:06
On Wednesday, the GBP/USD currency pair increased by at least 200 points. Volatility was extremely high once more. Yesterday's macroeconomic backdrop was present, but it needed to be sufficiently potent to spur such a movement. However, there were legitimate reasons for the growth of the pound sterling, unlike the euro. The price on the 4-hour TF stayed within the moving average. Second, the Scottish government appealed to the Supreme Court of Britain, asking for permission to hold an independence referendum. The Supreme Court of Britain released its decision on the appeal yesterday. The court denied this request, which also decided that a second referendum within the last ten years can only be held with London's permission. However we will go into more detail about this below, but for the time being, it appears that the UK won't lose a third of its territory anytime soon. Accept this is a significant enough factor for the pound's value to increase. Given that it grew much more modestly, it's possible that the pound sterling itself helped the euro currency rise. Going back to macroeconomic statistics, we can see that in the UK, the business activity indices for the services and manufacturing sectors have hardly changed from October and have continued to be below the "waterline." The indices in the United States also displayed negative dynamics, but other reports were not as dire, and some were even positive. As a result, the market would have reacted very biasedly if it had only responded to statistics. Everything would make sense if the market responded to the Supreme Court of Great Britain's ruling. That's to say that the British pound's prior growth lacked much logic in general. The pair has the potential to form an upward trend in the medium term because, from a "technology" standpoint, it has crossed all of the Ichimoku indicator's lines on the 24-hour TF. The upward trend was not reversed at the 4-hour TF because it did not drop below the moving average. The "hole" in the British budget appears to have been fixed by increasing taxes and reducing spending, which will help the economy survive this winter. Of course, the Conservatives may suffer due to these choices in the upcoming parliamentary elections, but that time will not come soon. It turned out that Nicola Sturgeon doesn't have any "aces up her sleeve." Only yesterday, we were discussing how Nicola Sturgeon might be hiding a few surprises; otherwise, why would she have cheerfully promised the Scottish people a new referendum during the previous parliamentary elections? Remember that if Sturgeon's party wins the election, she pledged to hold a referendum by the end of 2023. The party won the election, but Sturgeon's strategy would never be clear if London's approval were necessary for a valid referendum. Rishi Sunak, Liz Truss, and Boris Johnson would not consent. Who in their right mind would consent to a situation where they could lose a third of their territory? Therefore, it is utterly unsurprising that London only responded with refusals. It was revealed yesterday that the leader of the SNP will keep pressing London for the right to hold a referendum, and that's all. There were undoubtedly vociferous speeches criticizing the "undemocratic" nature of these refusals, but it turned out that Sturgeon had no "aces up her sleeve." Constant permission requests serve no purpose. Will London eventually change its mind after receiving so many rejections? Is that what Sturgeon hopes to achieve? The 21st century has amply demonstrated that any territorial dispute is most frequently settled through military means, so if she attempts to hold a referendum without the approval of Westminster, she may end up in a military conflict. Even though it is currently difficult to believe that Sturgeon will take such a step, it is possible that we could experience another armed conflict in the upcoming years. She has no choice but to defend herself in front of her populace, dread the upcoming election, and keep sending demands pouring into London. Over the previous five trading days, the GBP/USD pair has averaged 132 points of volatility. This value is "high" for the dollar/pound exchange rate. Thus, we anticipate movement inside the channel on Thursday, November 24, constrained by the levels of 1.1870 and 1.2134. The Heiken Ashi indicator's turning downward indicates a new phase of the corrective movement. Nearest levels of support S1 – 1.1963 S2 – 1.1841 S3 – 1.1719 Nearest levels of resistance: R1 – 1.2085 R2 – 1.2207 R3 – 1.2329 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair resumed moving upward. Therefore, until the Heiken Ashi indicator turns down, you should maintain buy orders with targets of 1.2134 and 1.2207. Open sell orders should have a target price of 1.1719 and be fixed below the moving average. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. Moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which you should trade now. Murray levels – target levels for movements and corrections. Volatility levels (red lines) – the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 2022-11-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327981
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The Price Of The AUD/USD Pair May Reach The Intended Target

InstaForex Analysis InstaForex Analysis 24.11.2022 08:10
The aussie has successfully broken through the resistance at 0.6700 and it is now aiming for the 0.6871 target, the low of August 5. The Marlin oscillator does not share the optimism, but it is forced to move up. Yesterday's momentum was set by the fact that the Reserve Bank of New Zealand hiked the rate by 0.75%, but today the USA is celebrating a holiday, so we expect less volatility. If the price weakens enough to reach the level of 0.6700, it could fall further and hit 0.6595, which will be followed by a change in the trend. It is uncertain whether the price will reach the intended target at 0.6871 or return to 0.6700. On the 4-hour chart, the price settled above the balance and MACD indicator lines, the Marlin oscillator is rising in the positive area. There is an uptrend, but the whole question is about the aussie's strength. Commodity markets are rising weakly and oil lost 4.2% yesterday.   Relevance up to 03:00 2022-11-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327983
The Pound Is Now Openly Enjoying A Favorable Moment

Technical Analysis Of Cable Market (GBP/USD)

InstaForex Analysis InstaForex Analysis 24.11.2022 08:14
The British pound rose by 1.42% yesterday and was among the leaders of the day (though the New Zealand dollar was at the top, which rose by 1.55% due to the RBNZ's rate hike by 0.75%), but the technical component indicates that the pound's potential to rise has run out. On the daily chart, the price has already formed a double divergence with the Marlin oscillator. Of course, there is an alternative option with the price rising above 1.2200, and if it settles above this level it could rise further. So looking at it from a practical perspective, it is better to wait until we have confirmed the developments. The probability of the price moving towards the area below 1.1940 is about 65%. On the four-hour chart, the price rises above both indicator lines, but there is also a prospect of divergence with the Marlin oscillator. The U.S. is celebrating a holiday today and the slowdown in growth will only strengthen the technical conditions of the reversal.   Relevance up to 03:00 2022-11-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327985
FX Daily: Testing the easing pushback

The Euro To US Dollar (EUR/USD) Pair Could Rise

InstaForex Analysis InstaForex Analysis 24.11.2022 08:17
Yesterday morning, the euro was rising on speculative sentiment (there was no reason for the single currency to go down), and in the evening the release of the minutes from the last FOMC meeting supported this sentiment. The minutes accurately described the mood of the FOMC members, which has been providing optimism for the last two weeks: further rate hikes may be slower, with the rate approaching a sufficiently "restrictive" level. But that optimism could vanish very quickly. Probably not today, as it is a national holiday in the U.S., but early next week. Breaking through the target level of 1.0470, it would seem, opens the way to the target of 1.0615/42, but a divergence is starting to form with the Marlin oscillator on the daily chart, so the price could fall in the medium-term before it reaches the range I mentioned. Also, the price is slightly above 1.0470 on the weekly chart, and there is the MACD indicator line (1.0485/90), which creates a strong resistance for the reversal. On the four-hour chart, the price has settled above the level of 1.0360. In case of a divergence and reversal, this movement will prove to be false. But for now, as the price grows above the balance and MACD indicator lines and Marlin oscillator moves up in the positive area, we expect the price to rise and be in the range of 1.0470/90.   Relevance up to 03:00 2022-11-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327987
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD Pair Aimed To Resume The Upward Trend

InstaForex Analysis InstaForex Analysis 24.11.2022 08:23
Analysis of EUR/USD, 5-minute chart The euro/dollar pair continued the upward movement that began a few days before. It is noteworthy that during the correction, the price broke through the ascending trend line, which indicates a change of trend to a downward one. As we can see, this did not stop the bulls, who simply took a break for a few days. Yesterday there was a lot of macroeconomic background, but we can't say which report fueled the euro to rise significantly. The thing is that the EU business activity report can hardly be considered strong or optimistic. Therefore, the euro shouldn't have grown due to this report. The US data was disappointing, but only partly, as some reports were stronger than expected. Therefore, in my opinion, the dollar's decline by a total of 100 points was quite illogical. Especially considering the fact that the price went through the trend line. However, for some reason the market does not want to buy the dollar now just as it did not want to buy the euro. The only thing we can assume in such circumstances is that the pound pulled the euro up. Speaking of the situation with technical signals, it was quite simple. Despite the upward movement during the day, the pair was traded in a range with lots of levels and lines. When the price broke through one of them, it immediately hit the next one, so it was necessary to consider them all as a range. The price managed to move out of that range only late at night, when it was definitely not advisable to open any positions. Therefore traders should not have opened any positions on Wednesday. COT report The Commitment of Traders (COT) reports on the euro in 2022 are a paradox. Halfway through the year they showed an outright bullish mood of commercial players, but at the same time the euro was falling steadily. Then for a few months they showed a bearish mood, and the euro also steadily fell. Now the net position of the non-commercial traders is bullish again and getting stronger, and the euro has hardly moved away from its 20-year lows. This is happening, as we said, because demand for the U.S. dollar remains very high amid the difficult geopolitical situation in the world. So even if the demand for the euro is rising, the high demand for the dollar still does not allow the euro itself to rise as much. In the given period, the number of long positions from the non-commercial group increased by 7,000, whereas the number of shorts - by 2,000. As a result, the net position increased by about 5,000 contracts. The euro has been slowly rising in recent weeks, which already coincides with the readings of the COT report. At the same time we think that the dollar will rise due to the same geopolitics or due to the lack of factors for the euro's growth. The green and red lines of the first indicator are far away from each other, which may indicate the end of the uptrend (which, in fact, never happened). The number of longs exceeds the number of shorts by 113,000. Thus, the net position of the non-commercial traders may go on rising but it may not provoke the same growth for the euro. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 39,000 more shorts (635,000 vs 596,000). Analysis of EUR/USD, 1-hour chart The EUR/USD pair aimed to resume the upward trend on the one-hour chart. Just a little more and the last local high could have been updated. The market still finds reasons to buy despite the fact that the price broke through the trend line, and the fundamental background is not exactly supportive of the euro. On Thursday, the pair may trade at the following levels: 1.0072, 1.0119, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, and also Senkou Span B (1.0207) and Kijun Sen (1.0315). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On November 24, European Central bank representatives will give a speech in the European Union. In particular, Isabelle Schnabel and Luis de Guindos may make interesting statements. However, it should be noted that the euro has been growing very well in recent weeks without the support of the ECB representatives. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-11-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327975
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The GBP/USD Pair Sharply Resumed Its Uptrend

InstaForex Analysis InstaForex Analysis 24.11.2022 08:32
Analysis of GBP/USD, 5-minute chart The GBP/USD pair sharply resumed its uptrend on Wednesday, which, by the way, has not ended, unlike the euro's trend. So, from a technical point of view, the pound could continue moving up, though till yesterday we did not see enough reasons for its further growth. Nevertheless, we should admit that there are more factors that speak in favor of the pound's growth, than similar ones for the euro. And yesterday we also found out that the Supreme Court of Great Britain rejected Scotland's request to grant it the official opportunity to hold a referendum, which would likely be won by those who favor secession from the kingdom. Thus, there will be no referendum (at least not a legitimate one), which means there will be no "internal Brexit" in Britain any time soon either. This is certainly very good news for the pound. The other data were so controversial that it could not force the pound to rise by 200 points. Indexes of business activity in the USA were weak, but UK data was not so good either. The US dollar had more chances to rise, because other reports were better than the forecasts, but, as we can see, the dollar did not get the chance to rise. Speaking of the situation with technical signals, it was almost ideal. There were two buy signals at the European trading session, afterwards the pound rose. After the second signal, the price surpassed levels like 1.1974 and 1.2007, but there was no sell signal. Therefore, the long position had to be closed manually in the late afternoon. You could earn at least 150 points. The first position was closed by Stop Loss at breakeven. COT report The latest Commitment of Traders (COT) report on GBP logged a slight decrease in bearish sentiment. In the given period, the non-commercial group closed 1,900 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position is gradually growing during the last months, but the sentiment of the big players is still bearish. The pound has been rising in recent weeks, but so far it does not seem that it is preparing for a long-term uptrend. And, if we remember the euro's situation, then based on the COT reports, we can hardly expect a surge in price. The demand for the US currency remains very high, and the market, as it seems, is just waiting for new geopolitical shocks so it can return to buying the dollar. The non-commercial group now has a total of 67,000 shorts and 34,000 longs opened. As we can see, there is a wide gap between them. As it turns out the euro is now unable to show growth when market sentiment is bullish. When it comes to the total number of long and short positions, here bulls have an advantage of 17,000. Still, this is not enough for the sterling to increase. Anyway, we are still skeptical about the pound's long-term growth although the technical picture shows otherwise. Analysis of GBP/USD, 1-hour chart On the one-hour chart, the price was briefly inside the 1.1760-1.1974 horizontal channel. The uptrend was restored since the pound received good news from the UK. The euro probably rose due to this event as well, which means that the pound has simply pulled the euro along with it. On Thursday, the pair may trade at the following levels: 1.1486, 1.1645, 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259. The Senkou Span B (1.1680) and Kijun Sen (1.1921) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. There are no important events or reports for Thursday in the UK and the USA. Therefore, traders will have nothing to react to. Nevertheless, there could still be a trend and volatile movement may still persist since the price broke out of the horizontal channel and retained the uptrend. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-11-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327977
Technical Outlook Of The EUR/JPY Pair Movement In Short Term

The EUR/JPY Pair May Test To Downtrend Again

InstaForex Analysis InstaForex Analysis 24.11.2022 08:38
EUR/JPY looks ready to challenge the downside again. A break below minor support at 144.29 will call for renewed downside pressure towards 142.56 and below here. It confirms the completion of the ending diagonal and a return to the origin of the ending diagonal at 133.36. That said, we have to recognize that there is an outside chance for a final rally to a new high above 148.40 to complete the ending diagonal. If this scenario unfolds, than the rally to just above 148.40 will be very short-lived and the turn lower will be quick and swift.   Relevance up to 06:00 2022-11-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/302308
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

Hawkish Interest Rate Guidance Is Likely To Strengthen The Kiwi Dollar (NZD/USD) Further

TeleTrade Comments TeleTrade Comments 24.11.2022 09:16
NZD/USD has surpassed the crucial hurdle of 0.6250 amid solid risk-on impulse. Federal Reserve policymakers are supporting the interest rate hike slowdown regime to reduce financial risks. The Reserve Bank of New Zealand sees the interest rate peak at 5.5%. NZD/USD is aiming to smash the round-level resistance of 0.6300 as RBNZ-Fed policy divergence has widened. NZD/USD is advancing firmly after overstepping the critical resistance of 0.6250 in the Asian session. The Kiwi Dollar has gained significant traction as the extent of optimism is skyrocketing in the currency market. The asset has continued its two-day winning streak and has refreshed its three-month high at 0.6270. The major is exposed to kiss the round-level resistance of 0.6300 amid no signs of amelioration in the positive market sentiment. A significant jump in investors’ risk appetite has weakened demand for the US Dollar. The US Dollar Index (DXY) is falling like a house of cards and has surrendered the cushion of 106.00. The mighty US Dollar is looking to test three month low at 105.34. Meanwhile, S&P500 futures are displaying strength ahead of the US holiday on account of Thanksgiving Day. The 10-year US Treasury yields have slipped below 3.69% as investors see no continuation of 75 basis points (bps) rate hike spell for the fifth time by the Federal Reserve (Fed). Federal Reserve policymakers vouched for decelerating interest rate hike pace A satisfactory October inflation report has eased some troubles for the Federal Reserve policymakers. Fed chair Jerome Powell and his mates are continuously making efforts to bring price stability. A decline in the headline Consumer Price Index (CPI) has delighted the Federal Reserve, which is visible in Federal Open Market Committee (FOMC) minutes. The majority of Federal Reserve policymakers have vouched for a slowdown in the interest rate hike pace to reduce financial risks and to observe the progress of efforts yet made in the form of restrictive policy measures. This has resulted in a significant fall in the US Dollar. Considering the persistent nature of inflation in the United States economy, Fed chair Jerome Powell will shift to a half-percent rate hike extent for December’s monetary policy meeting. Upbeat United States Durable Goods Orders failed to cushion the US Dollar Market participants always await indicators that depict demand by the households to make projections for Consumer Price Index (CPI) figures. The United States Durable Goods Orders data that display consumer demand for durables improved by 1% in October vs. the expectation and the prior release of 0.4%. This indicates that the consumer demand is robust and core CPI could display stagnancy ahead. This may end the plan of decelerating interest rates by the Federal Reserve. It is worth noting that households in the United States are addressing expenses with lower real income. Also, higher interest rates will result in higher interest obligations on purchases of durable goods, which could result in accelerating delinquency costs for credit providers. Reserve Bank of New Zealand sees interest rate peak at 5.5% On Wednesday, Reserve Bank of New Zealand Governor Adrian Orr hiked its Official Cash Rate (OCR) by 75 bps. This has widened the Reserve Bank of New Zealand-Federal Reserve policy divergence. In order to tighten its fight against a historic surge in inflation, the Reserve Bank of New Zealand ditched its 50 bps rate hike regime and went for a bigger rate hike. Earlier, the RBNZ hikes its OCR 50 bps consecutively five times. Price pressure in the New Zealand economy has not displayed signs of exhaustion and a peak yet, therefore, policy tightening will continue to accelerate further. The Reserve Bank of New Zealand has also provided an interest rate peak of 5.5%. Widened Reserve Bank of New Zealand-Federal Reserve policy divergence and hawkish interest rate guidance is likely to strengthen the Kiwi Dollar further and NZD/USD may smash 0.6300 sooner. NZD/USD technical outlook NZD/USD is marching towards the horizontal resistance placed from August 12 high at 0.6469 on a daily scale. The asset has comfortably established above the 61.8% Fibonacci retracement (placed from August 12 high at 0.6469 to October 13 low at 0.5560) at 0.6103. The pair has crossed the 200-period Exponential Moving Average (EMA) at 0.6233 for the first time in the past seven months. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates more upside for the Kiwi Dollar.  
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

The Fall In The Dollar Index (DXY) Helped The Australian Dollar (AUD)

TeleTrade Comments TeleTrade Comments 24.11.2022 09:18
AUD/USD is inching strongly towards the crucial hurdle of 0.6800 as US Dollar is facing immense selling pressure. The US Dollar is exposed to test a three-month low at 105.34 amid a risk appetite theme. Economists at ANZ Bank believe that the sell-off in US Dollar is exaggerated as current inflation is well above 2% target. The AUD/USD pair is marching firmly towards the round-level hurdle of 0.6800 in the early European session. The asset has gained immense buying interest from the market participants as the US dollar index (DXY) has extended its losses. A stellar improvement in investors’ risk appetite has underpinned the Aussie Dollar. The major has continued its two-day winning spell and is prepared to display more upside amid upbeat market sentiment. The US Dollar has displayed sheer losses after surrendering the critical support of 106.00. The mighty US Dollar has dropped to near 105.70 and is exposed to test the three-month low of 105.34. S&P500 futures are holding their gains recorded in Tokyo. The 500-stock basket is expected to remain quiet as US markets will remain closed on Thursday on account of Thanksgiving Day. The 10-year US Treasury yields are hovering below 3.69%. Less-hawkish opinions by the Federal Reserve (Fed) policymakers as recorded in Federal Open Market Committee (FOMC) minutes have cleared that days of a bigger rate hike by the US central bank are over. To reduce financial risks and to observe the efforts made by Fed in decelerating inflation yet, teammates of Fed chair Jerome Powell have vouched for slowing down the interest rate hike pace. Economists at ANZ Bank have a contrary opinion as they believe that softer-than-expected US inflation triggered a sell-off in the US Dollar and market reaction to the latest inflation print is exaggerated. Inflation remained near 7.7%, which is well above the central bank’s target of 2%. They further added that “It is not enough for the Fed to be confident that inflation is on track to move back to 2% sustainably”. On the Aussie front, weaker S&P PMI data has not impacted the Aussie Dollar. The Manufacturing PMI landed at 51.5, lower than the expectations of 52.4. While Services PMI dropped to 47.2 vs. the consensus of 49.1.
The USD/CHF Pair Returned To Its Previous Three-Day Recovery

Technical Analysis Of The USD/CHF Pair

TeleTrade Comments TeleTrade Comments 24.11.2022 09:23
USD/CHF extends week-start pullback towards the monthly low. Three-month-old horizontal area challenges sellers amid oversold RSI, 200-DMA restricts buyer’s entry. 61.8% and 78.6% Fibonacci retracement levels act as additional trading filters. USD/CHF takes offers to refresh the weekly low near 0.9390 as sellers cheer the third consecutive daily fall heading into Thursday’s European session. In doing so, the Swiss Franc (CHF) pair extends Tuesday‘s U-turn from 0.9600, as well as the previous day’s downside break of the 61.8% Fibonacci retracement level of January-November upside. That said, the bearish MACD signals add strength to the downside bias. However, nearly oversold conditions of the Relative Strength Index (RSI), placed at 14, suggest limited downside room for the USD/CHF pair. As a result, an area comprising lows marked during August and so far in November, around 0.9370-55, gains the major attention of the bears. If at all the USD/CHF bears conquer the 0.9355 support, the 78.6% Fibonacci retracement level near 0.9310 and the 0.9300 round figure could act as additional downside filter to challenge the pair’s further declines. On the contrary, March’s high of 0.9460 acts as an immediate upside hurdle for the USD/CHF bulls, a break of which could escalate the corrective bounce towards the 61.8% Fibonacci retracement level near 0.9500. However, the pair buyers are likely to remain indecisive unless witnessing a clear upside break of the 200-DMA, around 0.9635, at the latest. USD/CHF: Daily chart Trend: Limited downside expected
Navigating Financial Markets: Insights on Central Bank Decisions and Currency Quotes

The Turkish Central Bank Is Likely To Keep Rate Cut

TeleTrade Comments TeleTrade Comments 24.11.2022 09:28
USD/TRY remains pressured around 18.60, down for the third consecutive day, as traders prepare for the Interest Rate Decision from the Central Bank of the Republic of Turkiye (CBRT). That said, the Turkish central bank is likely to keep diverging from its global counterparts, despite strong inflation, as market consensus suggests a third consecutive rate cut to 9.0%, from 10.5% current level. In addition to the pre-CBRT consolidation, the bearish signals from the options market also weigh on the USD/TRY prices. The one-month risk reversal (RR), a gauge of the difference between the call options and the put options, drop to -0.030 level at the latest. However, the weekly RR prints +0.050 figure to consolidate the biggest loss since late August marked in the last week. On an immediate basis, Turkiye’s Capacity Utilization and Manufacturing Confidence for November could act as catalysts.
Tight Monetary Policy Is Already Weighing On The Swedish Housing Market

Riksbank Monetary Policy Decision Ahead

TeleTrade Comments TeleTrade Comments 24.11.2022 09:30
Riksbank is expected to hike its key rate by 75 basis points. The decision is unlikely to provide lasting support to the Krona, but another leg higher in SEK could be seen in the coming days, economists at ING report. Riksbank to hike by 75 bps “We expect a 75 bps hike, which appears to be very much a consensus call. We did see the RB surprise with a 100 bps move earlier this year, but that would likely be a risky move given the strains in the Swedish housing market.” “We don’t expect major and long-lasting implications from today’s policy decision for the Krona, which is currently enjoying a rather unique combination of positive factors (on the European and global risk sentiment side).”  “We could see a further leg higher in SEK in the coming days, but our longer-term view remains that the Krona will underperform as the eurozone enters a prolonged recession in 2023. We forecast a sustained return to levels below 10.50 in EUR/SEK only in the second half of next year.” See – Riksbank Preview: Forecasts from five major banks, another big rate hike
Saxo Bank Podcast: Riksbank's Expected 75 Basis Point Hike Today

Saxo Bank Podcast: Riksbank's Expected 75 Basis Point Hike Today

Saxo Bank Saxo Bank 24.11.2022 10:18
Summary:  Today we look at the market continuing to rally despite US Services PMI figures for November missed estimates suggesting the US economy continues to slow down. This means that equities right now interpret bad news as good news because it will force the Fed to pivot on the policy rate which will be net positive for equities. We also discuss expected PBOC easing, Riksbank's expected 75 basis point hike today, and the weakening USD helping financial conditions to ease globally. In commodities, our focus today is the energy market with Europe's gas market holding up well despite low volumes coming from Russia. Finally, we talk Deere earnings as the US agricultural equipment maker is delivering strong results as pricing power remain high on the back of high commodity prices on agricultural products. Today's pod features Peter Garnry on equities, Ole Hansen on commodities. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-24-2022-24112022
The Bank Of England Has Warned That Negative Growth Will Extend All The Way

The Bank Of England Has Warned That Negative Growth Will Extend All The Way

Kenny Fisher Kenny Fisher 24.11.2022 11:33
The British pound has steadied on Thursday, after soaring 1.4% a day earlier. In the European session, GBP/USD is trading at 1.2074, up 0.17%. The pound has enjoyed a splendid November, gaining 5.3%. The upswing has been impressive but is more a case of a broad pullback in the US dollar rather than newfound strength in the pound. The UK economy is likely in a recession, and the outlook is as gloomy as a rainy November day in London. The October Manufacturing and Services PMIs remained mired in negative territory, pointing to contraction. The labour market has been a bright spot but that could soon change, with the Bank of England projecting that unemployment will double to 6.5%. The UK economy declined by 0.2% in Q3, and the BoE has warned that negative growth will extend all the way to the first half of 2024. With these formidable economic headwinds, it’s difficult to make a case for the pound continuing its upswing. Inflation has hit a staggering 11.1%, despite the BoE raising the cash rate to 3.0%. The bank pressed harder on the rate pedal at the last meeting, raising rates by 75 basis points. The BoE expects rates to peak at 5%, which means there’s a lot more tightening on the way. The bank will have to tread carefully in order not to choke off economic growth as it continues to tighten in order to curb red-hot inflation. Fed says pace of hikes will ease The Fed minutes reiterated what the Fed has been telegraphing for weeks; namely, smaller rates are on the way. Fed members agreed that smaller rate increases would happen “soon”, as they continue to evaluate the impact of the current policy on the economy. Members also noted that inflation was yet to show any signs of a peak. The markets aren’t completely convinced that we’ll see lower rates at the December meeting – the odds of a 75 basis point move are at 65%, with a 35% chance of a 50 bp increase. GBP/USD Technical 1.2040 and 1.1875 are the next support levels There is resistance at 1.2192 and 1.2357 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Assessing 'Significant Upside Risks to Inflation': Insights from FOMC Minutes

FX: The Fed Minutes Surprised On The Dovish Side

ING Economics ING Economics 24.11.2022 11:55
The Fed minutes surprised on the dovish side, signalling strong support for slower rate hikes and weaker support for Powell's higher-for-longer rhetoric. The dollar could stay pressured for a bit longer, but it's probably embedding a good deal of Fed-related negatives now. US markets are closed for Thanksgiving. Elsewhere, expect a 75bp hike in Sweden In this article USD: Dovish feeling EUR: Enjoying an ideal mix for now SEK: Riksbank to hike by 75bp CEE: Consumer confidence at freezing point   USD: Dovish feeling If the November FOMC event failed to convincingly signal a dovish shift, the minutes of that meeting – released yesterday – were surely more effective in that direction. There are two key points in the minutes that markets are interpreting as dovish statements: 1. “A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate”. 2. “Various participants noted that […] their assessment of the ultimate level of the federal funds rate that would be necessary to achieve the Committee's goals was somewhat higher than they had previously expected”. Point one simply indicates that there is a larger-than-expected (“substantial”) majority of the Committee that is backing a slower pace of tightening. When adding the lower-than-expected October CPI reading to the equation, expecting more than 50bp in December would look quite counterintuitive now, and a switch to 25bp increases from the January meeting appears increasingly likely. In point two, markets may have focused on the term “various”, which indicates a rather vague consensus backing Chair Jerome Powell’s post-meeting “higher-for-longer” statement. This is very relevant, as Powell pushing longer-term rate expectations higher in the November press conference was the main counterargument to the “dovish pivot” narrative: now, it looks like his approach might not have had much backing from other FOMC members. The market reaction has been quite straightforward: risk-on, dollar-off. As we had signalled in recent commentaries, the minutes were set to be a key risk event for the dollar, and we are not surprised to see another leg lower in the greenback in an environment where markets are already shifting away from a longer-term structural long-dollar positioning. Fed funds futures are currently embedding a peak rate at 5.0%, but it might prove harder to see further re-pricing higher in rate expectations after the dovish minutes. At the same time, the degree of cautiousness manifested by Fed officials after the softer CPI figures means that markets may be reluctant to further revise their peak rate bets lower in the near term. This means that one-way traffic in FX, with the dollar staying on a downtrend for longer, still appears unlikely. The greenback has now absorbed a good deal of negatives when it comes to the Fed story, and in our view can still benefit from the deteriorating outlook outside of the US (especially in Europe and China) in the coming months. While we don’t exclude the dollar contraction to take DXY below 105.00, we struggle to see sub-105 levels holding for very long. US markets are closed for Thanksgiving today, and will be open for only half a day tomorrow. There are no data releases or Fed speakers until Monday. Expect a significant drop in liquidity into the weekend. Francesco Pesole EUR: Enjoying an ideal mix for now European currencies are enjoying a strong rally, as lower energy prices (crude was hit by the EU oil price cap proposal) and higher-than-expected PMIs yesterday had already offered some support to European sentiment before the Fed delivered some dovish minutes. We remain doubtful that it will be a smooth ride to recovery for European currencies, and our commodities team continues to see upside risks for energy prices into the new year despite recent developments. EUR/USD has broken above 1.0400 and may extend its rally to 1.0500/1.0550 in the near term, but we suspect the bullish trend may start to run out of steam as we approach year-end. A return towards parity remains our base case for December. Today, the Ifo numbers will be watched in the eurozone, as investors will scan for further evidence of slight improvements in the business outlook. European Central Bank member Isabel Schnabel will speak at a Bank of England event today, where the BoE’s Dave Ramsden, Huw Pill and Catherine Mann will also deliver remarks. Francesco Pesole SEK: Riksbank to hike by 75bp Scandinavian currencies have been the best G10 performers since yesterday, due to the Swedish krona's high sensitivity to EU sentiment and the Norwegian krone's high sensitivity to global liquidity conditions.   SEK is facing an important risk event today, as the Riksbank is set to deliver another rate hike at 0830 GMT. As per our meeting preview, we expect a 75bp hike, which appears to be very much a consensus call. We did see the RB surprise with a 100bp move earlier this year, but that would likely be a risky move given the strains in the Swedish housing market. From an FX perspective, we don’t expect major and long-lasting implications from today’s policy decision for the krona, which is currently enjoying a rather unique combination of positive factors (on the European and global risk sentiment side). We could see a further leg higher in SEK in the coming days, but our longer-term view remains that the krona will underperform as the eurozone enters a prolonged recession in 2023. We forecast a sustained return to levels below 10.50 in EUR/SEK only in the second half of next year. Francesco Pesole CEE: Consumer confidence at freezing point On the calendar today, we have a series of second-tier data prints from the region. Consumer confidence will be published in the Czech Republic and Poland. In both cases, the indicators are currently at record low levels, well below the pandemic years. However, no significant improvement can be expected for November either, given persistent inflation and energy prices. In Hungary, labour market data for September will be published. We expect wage growth of 16.7% YoY, basically the same pace as in August, slightly above market expectations. On the political front, the main focus remains on Hungary. Yesterday, we heard unofficial reports from journalists that the European Commission will recommend freezing part of the cohesion funds with the condition of further reforms, but will also recommend adopting the Hungarian RRF plan. In the end, this gives more flexibility in further negotiations, but the key will be the Ecofin meeting in two weeks' time. Today the saga will continue in the European Parliament, which has on its agenda a vote on Hungary's rule-of-law progress, which, although non-binding, could make a lot of noise in the markets. There is also a V4 meeting scheduled in Slovakia, which the Hungarian PM is expected to attend. The forint jumped up to 410 EUR/HUF after yesterday's news, which the market initially assessed as negative. But in our view, it mitigates the risk that Hungary could lose some money and opens up room for longer negotiations. Hence, we expect the forint to correct down again today closer to 400 EUR/HUF. The potential headlines from the EP meeting, which already caused considerable pain in the FX market last week, are a risk. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

EUR/USD: The Eurozone Readings Were Just Bad

Kenny Fisher Kenny Fisher 24.11.2022 13:26
EUR/USD is unchanged on Thursday, trading at 1.0393. With the US markets closed for the Thanksgiving holiday, we’re unlikely to see much movement from the US dollar. German business confidence edged slightly higher in November. The Ifo Business Climate index rose to 86.3, above the previous reading of 84.5 and the consensus of 85.0. Business confidence has been on a prolonged downturn – the index was above the 100 level in the summer of 2021 but has steadily deteriorated since then. Ifo Business Expectations accelerated as well, to 93.1, up from 84.2 but shy of the consensus of 93.8. Germany releases consumer confidence on Friday. Consumer confidence has been mired in negative territory, which is expected to edge up to -39.6, up from -41.9. German PMIs were lukewarm for October. Both the service and manufacturing PMIs remained in contraction territory, with readings below 50.0. The eurozone readings were just as bad, and France, the number two economy in the bloc, reported a contraction in business activity for the first time since March 2021. The ECB minutes will be released later today, although, like the Fed minutes, they may amount to little more than a repeat of what central bank members have been telegraphing to the markets. The ECB meets on December 15th and it’s uncertain if the bank will press the rate pedal with a third consecutive 75-basis points hike, or opt for a smaller 50 bp move. Inflation rose to 10.7% in October, up from 9.9% and there are no signs of a peak. ECB member Robert Holzmann said this week that he favors a 75-bp hike, but other members are fearful of a deep recession and want the ECB to ease up on the pace of hikes. The Fed minutes stated that members were in agreement that lower rates are coming. This wasn’t anything new, as Fed members have been saying this for the past few weeks. The Fed doesn’t want to be pinned down, saying only that an easing in the pace of rates would happen “soon”. Members also noted that inflation hasn’t shown any signs of easing. The markets have priced in a 50 bp hike at the December 14th meeting, at around 65%, with a 35% of a 75 bp increase. With a nonfarm payroll and an inflation release ahead of the meeting, this rate projection will almost certainly change.   EUR/USD Technical 1.0359 and 1.0238 are providing support There is resistance at 1.0447 and 1.0568 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
USD/JPY Breaks Above 146 Line: Bank of Japan's Core CPI in Focus

Reserve Bank of New Zealand went for a 75bp rate hike. New Zealand increased by 1.5%

Kenny Fisher Kenny Fisher 24.11.2022 22:05
The New Zealand dollar continues to gain ground this week. In the North American session, NZD/USD is trading at 0.6267, up 0.35%. New Zealand will release retail sales for Q3 later in the day. The markets are expecting a small gain of 0.5%, which would be a turnaround from a disappointing -2.2% in Q2. Consumers continue to struggle with high inflation and rising interest rates, and after back-to-back declines, a gain in retail sales would be welcome news. Read next: G7 work on a Russian oil price cap, gold has gained as dovish Fed signals spread through the market| FXMAG.COM RBNZ delivers record hike The Reserve Bank of New Zealand delivered a huge 75-bp hike on Wednesday, which raised the cash rate to 4.25%. The move had been priced in by the markets, but the New Zealand dollar jumped 1.5%, thanks to the oversize move and a broadly-lower US dollar. The cash rate is the highest among major central banks, but there’s more to come. The RBNZ has projected a terminal rate of 5.5% in 2023, which means more rate hikes in 2023. Inflation has been stickier than the RBNZ anticipated, and the bank’s Monetary Policy Statement was decidedly hawkish, noting that “core consumer price inflation is too high” and “near-term inflation expectations have risen.” The statement said that inflation is expected to accelerate to 7.5% in Q4 and would not fall to the midpoint of the 1%-3% target until 2025. The RBNZ is ready for a long fight with inflation, but it remains to be seen if the bank can guide the economy to a soft landing. The Fed minutes reiterated that lower rates are on the way, which we’ve been hearing from a stream of Federal members over the past two weeks. The minutes were vague as far as a timeline, noting that smaller rate increases would happen “soon”, as the Fed continues to evaluate the impact of the current policy on the economy. Members also voiced concern that inflation was yet to show any signs of peaking. Still, the markets viewed the minutes as dovish, which is weighing on the US dollar today. NZD/USD Technical NZD/USD is testing resistance at 0.6283. Above, there is resistance at 0.6361 There is support at 0.6217 and 0.6139 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD/USD higher ahead of retail sales - MarketPulseMarketPulse
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Japan: Manufacturing PMI declined to 49.4. It's the first contraction since 2020

Kenny Fisher Kenny Fisher 24.11.2022 22:36
The Japanese yen has posted strong gains for a third straight day. USD/JPY is trading at 138.43, down 0.82% on the day. US markets are closed for the Thanksgiving holiday, but that hasn’t put a damper on the yen’s impressive rally. Inflation has been on the rise in Japan, although at much lower levels than we’re seeing in Europe and the United States. The Bank of Japan’s preferred indicator, BOJ Core CPI, accelerated in October for a ninth straight month, rising to 2.2%.  We’ll get a look at Tokyo Core CPI for October later today, which is expected to edge up to 3.5%, up from 3.4% in September. The indicator has accelerated for five consecutive months. Japan’s manufacturing contracts Japan’s economy remains fragile, and the manufacturing sector hit a snag earlier today. Manufacturing PMI fell to 49.4 in  October, down from 50.7, which was also the consensus. This marked the first contraction in two years – the 50.0 level separates contraction from expansion. Manufacturers in Japan and elsewhere are grappling with higher input costs, while domestic and external demand has weakened, and this situation is unlikely to improve until inflation turns lower and growth recovers. The Fed minutes were viewed by the markets as dovish, which has pushed the US dollar lower today. The minutes noted that the Fed plans to implement smaller rate hikes “soon”, and the markets are expecting that already at the December meeting, the Fed will raise rates by “only” 50 bp, after four straight hikes of 75 bp. Although inflation remains a huge concern for Fed members, there is no agreement on the terminal rate. The 4.75%-5.25% range appears a safe bet, at least for now, which means that the current rate-hike cycle is on schedule to wind up in early 2023. USD/JPY Technical USD/JPY is testing support at 141.55. Below, there is support at 140.77 There is resistance at 142.74 and 143.60 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen extends rally - MarketPulseMarketPulse
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

USD/JPY Pair: The Price Is Slightly Above The Support

InstaForex Analysis InstaForex Analysis 25.11.2022 08:00
Yesterday, the yen reached strong support along the embedded price channel line of 138.60, piercing it a bit. This morning the price is slightly above the support. The Marlin oscillator is moving up, but the pair is far from being a lost cause and it hasn't lost anything yet - settling in the area below 138.60 can push the pair to fall further to 136.90. And there will be a risk of a price convergence with the Marlin oscillator. But if not, the next target is 135.17. A collapse in the stock market could be the driving force behind such a decline. On the four-hour chart, the price settled under the balance and MACD indicator lines. The Marlin oscillator is developing in the descending trend area. There is a higher probability of continuing the decline than the probability of a reversal. I expect the price to reach the target level of 136.90. Relevance up to 03:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328090
The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

The Price Of The GBP/USD Pair Has To Overcome The Important Support

InstaForex Analysis InstaForex Analysis 25.11.2022 08:01
The British pound was up 61 points yesterday. This is enough to turn down right now on a double divergence with the Marlin oscillator. But the price can be persistent and still reach the target level of 1.2200, the support area of September and October 2019. Regardless of whether the price goes up or not, in order to see a reversal, the price should return below the level of 1.1940. If this happens, the first target of the movement will be the level of 1.1737. On the four-hour chart, the MACD line is approaching the support at 1.1940. The level receives reinforcement and technical significance. Divergence is almost ready, the price has to overcome this important support (1.1940). Relevance up to 03:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328092
The Euro May Gradually Climb To The Target Level

The Price Of The Euro To US Dollar (EUR/USD) Slightly Fell

InstaForex Analysis InstaForex Analysis 25.11.2022 08:03
Yesterday's trade was moderate since the US was celebrating a national holiday, but in spite of that markets are still moving away from risk - Lockdowns are expanding across China and market participants are afraid of new gaps in production and trade. The U.S. is still celebrating its holiday, although trade will resume - but it will be short. The euro tried to reach the target at 1.0470 and now, after a failed attempt, it might fall under 1.0360. The signal line of the Marlin oscillator is going down, which sharply increases the probability of a reversal without a divergence, which is another sign that the price growth that started since the end of September has a corrective nature. Essentially there were no major changes during the day - the price is between the levels 1.0360 and 1.0470, and the potential to rise to the target range of 1.0615/42 is still there, even though it has weakened. On the four-hour chart, the price slightly fell before it could rush into the target range of 1.0470/90. A price reversal with a divergence may follow from here. Settling above this range may push the pair to rise to the target of 1.0615/42. Settling below 1.0360 and the MACD line at the same time, will encourage the price to reach 1.0205.   Relevance up to 03:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328096
The GBP/USD Pair Started A New Round Of Downward Correction

The Cable Market (GBP/USD) Has Potential For The Bullish Movement

InstaForex Analysis InstaForex Analysis 25.11.2022 08:16
Early in the European session, the British pound (GBP/USD) is trading below the 21 SMA located at 1.2110. During the last hours, the currency pair has formed a technical pattern of a symmetrical triangle. The last candles formed in the 1-hour chart confirm a possible continuation of the bullish movement. For this, we must wait for a break above 1.2111. In case the pound rises above 1.2111 it will be a signal to resume buying and this could reach the top of the uptrend channel around 1.2180 and could even reach +2/8 of Murray located at 1.2207. In case the pound rises above 1.2111, it will be a signal to resume buying and the instrument could reach the top of the uptrend channel around 1.2180 and even +2/8 of Murray located at 1.2207. According to the weekly chart, the British pound has gained over 350 pips and is entering a key overbought area. Next week, the pound is expected to make a strong technical correction towards the psychological level of 1.20 and even towards the 200 EMA located around 1.1896 on the 1-hour chart. The short-term bias favors gains, although there are some overbought readings on the daily, H-4 and H-1 charts. The zone of 1.2152 -1.2207 has become a strong resistance. In case there is a pullback towards this, such levels will be considered an opportunity to sell. Our trading plan for the next few days is to buy above 1.2110 with targets at 1.2150 and 1.2181 and we could even leave the market taking profit at 1.2207. Conversely, in case GBP/USD falls below the 21 SMA, we could sell below 1.2090 with targets at 1.20 and even 1.1962 (+1/8 Murray). The eagle indicator is giving a negative signal which supports our bearish strategy. Relevance up to 05:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/302474
The Outlook Of EUR/USD Pair Is Downward In The Near Term

The Euro To US Dollar Pair (EUR/USD) Entered A Bearish Correction

InstaForex Analysis InstaForex Analysis 25.11.2022 08:30
M5 chart of EUR/USD On Thursday, the euro/dollar pair entered a bearish correction following the steep growth of the past several days. As a reminder, the price consolidated below the ascending trend line. Given this fact, we could anticipate a continuation of the downtrend. However, the quote failed to settle below the Senkou Span B. So, the euro has been bullish over the past several days. Still, there have been hardly any reasons for this increase. It may well be that the euro simply followed the pound's suit. Indeed, the sterling advanced considerably following the ruling of the Supreme Court against holding a new independence referendum by Scotland's government. Nevertheless, it is just a theory. Speaking of the macroeconomic calendar that contained important releases only on Wednesday, it remains unclear why the euro went up anyway. Given that the price is still below the swing high, the bearish correction may extend to the Senkou Span B. When it comes to trading signals on Thursday, the 5-minute chart shows that the pair traded mostly horizontally. In other words, no trading signals were made on Thursday, so there was no need to open trades at all. COT report: As for COT reports in 2022, they reflected bullish sentiment in the first six months of the year although the euro was bearish. Then, they illustrated bearish sentiment for several months with the euro being also bearish. Currently, the net position of non-commercial traders is again bullish and increasing. Meanwhile, the euro has hardly retreated from its 20-year lows. This is due to the fact that demand for the greenback is high amid a difficult geopolitical situation in the world. Therefore, despite a rise in demand for the euro, buoyant demand for the dollar does not allow the euro to strengthen. During the reporting week, the number of long positions held by non-commercial traders rose by 7,000 and that of short positions increased by 2,000. Consequently, the net position advanced by 5,000. The euro's recent growth is gradually coming in line with the figures illustrated in the COT report. Still, the greenback may resume growth under the influence of geopolitical factors or the lack of factors for further strengthening in the euro. The green and red lines of the first indicator moved far away from each other, which may indicate the end of the uptrend. The number of long positions exceeds that of short positions by 113,000. Therefore, the net position of non-commercial traders may continue to rise further, but without triggering a similar rise in the euro. When it comes to the total number of longs and shorts across all categories of traders, there are now 39,000 more short positions (635,000 vs 596,000). H1 chart of EUR/USD In the H1 time frame, EUR/USD may resume the uptrend and update its latest swing high. Although the price broke through the trend line, fundamental factors provide little support for the euro. Therefore, the market is now bullish. Anyway, we are still anticipating a strong bearish correction. On Friday, trading levels are seen at 1.0119, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as Senkou Span B (1.0207) and Kijun-sen (1.0333). Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. Signals can be generated whenever the price bounces or breaks through extreme levels and lines. Don't forget to place a stop-loss order at the breakeven point when the price passes 15 pips in the right direction. It can help you minimize losses when a signal turns out to be false. On November 25th, Luis de Guindos, the Vice-President of the ECB, will give an interview. Given that the European regulator is likely to remain aggressive, which traders are prepared for, his speech will hardly influence the market. In the United States, no interesting macro releases are due. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. The Kijun-sen and Senkou Span B lines are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.     Relevance up to 06:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328104
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Price Of GBP/USD Pair Resumed The Uptrend

InstaForex Analysis InstaForex Analysis 25.11.2022 08:33
Analysis of GBP/USD, 5-minute chart The GBP/USD pair grew on Thursday as if nothing had happened. Recall that I said that the pound could rise against the dollar this week because the British Supreme Court ruled that Scotland does not have the power to hold a new referendum, which would have likely been won by independence supporters. Thus, Britain could lose part of its territory and economy in a matter of years if such a referendum had been held. However, London has not and will not consent to such a referendum, and Edinburgh has not been able to resolve the issue through the courts (British, by the way). Therefore, this is positive news for the pound. For instance, the same report on Wednesday did not provide any reason to buy the pair. British business activity indices remained below the "waterline" and the ones from the US, though they fell below the critical level of 50.0, are not so important that the dollar falls by 200-300 points after its release. But from a technical point of view, the uptrend is still preserved, so it had and has the right to rise. We still expect the pair to settle below the ascending trend line and the trend to change into a downward one. Despite the fact that the pair grew yesterday, it spent most of the day hovering in the flat near the level of 1.2106. All the signals were formed near that level, while volatility was about 100 pips, which is not much in the current conditions. Yesterday traders could try to use the first two signals, both of which were sell signals. After the first one the price went down 35 pips, which was enough to place Stop Loss Breakeven. After the second and third signals, which duplicated each other, the price failed to go down by just 20 pips, so there was a small loss on the second short position. All subsequent signals should not have been triggered, since the first three turned out to be false. COT report The latest Commitment of Traders (COT) report on GBP logged a slight decrease in bearish sentiment. In the given period, the non-commercial group closed 1,900 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position is gradually growing during the last months, but the sentiment of the big players is still bearish. The pound has been rising in recent weeks, but so far it does not seem that it is preparing for a long-term uptrend. And, if we remember the euro's situation, then based on the COT reports, we can hardly expect a surge in price. The demand for the US currency remains very high, and the market, as it seems, is just waiting for new geopolitical shocks so it can return to buying the dollar. The non-commercial group now has a total of 67,000 shorts and 34,000 longs opened. As we can see, there is a wide gap between them. As it turns out the euro is now unable to show growth when market sentiment is bullish. When it comes to the total number of long and short positions, here bulls have an advantage of 17,000. Still, this is not enough for the sterling to increase. Anyway, we are still skeptical about the pound's long-term growth although the technical picture shows otherwise. Analysis of GBP/USD, 1-hour chart The price resumed the uptrend on the one-hour chart, and it still does not cause any questions and doubts. The euro's growth is probably supported by the pound. However, we still think that the British currency rose too much in recent weeks, which does not meet the fundamental and macroeconomic background. So we expect that the pair will cross the trend line and fall. On Friday, the pair may trade at the following levels: 1.1645, 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259, 1.2342. The Senkou Span B (1.1680) and Kijun Sen (1.1963) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. There are no important events or reports for Friday in the UK and the USA. Therefore, traders will have nothing to react to. Nevertheless, there could still be a trend and volatile movement may still persist since the price broke out of the horizontal channel and retained the uptrend. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 06:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328106
ECB press conference brings more fog than clarity

The European Central Bank Is Getting Ready To Slow Down The Pace Of Interest Rate Hikes

InstaForex Analysis InstaForex Analysis 25.11.2022 08:40
The struggle continues for the EUR/USD pair: the bulls need to settle in the area of the 4th figure to show the strength of the upward movement, whereas the bears need to settle near the 2nd price level to finally stop the upward momentum and pave the way for the next surge to the parity level. Both sides of the "conflict", in fact, do not need a third figure, which in the current circumstances acts as a point of transit. Take note that both bears and bulls of the pair can boast of their momentary successes, but in reality they failed to consolidate their gains. The contradictory fundamental background is to blame. At the beginning of November, the dollar weakened across the market due to several factors. U.S. inflation slowed its growth, Federal Reserve officials admitted the possibility of a slowdown in monetary policy tightening, and the results of the G20 summit set the warmer tone for U.S.-China relations. All these factors came together to boost interest in risky assets, while the safe-haven dollar was out of action. The euro surged, reaching 1.0480. Then, the news flow changed a bit. The US central bank represented by many of its Committee members (Bullard, Cook, Daley, Waller and others) claims that slowing down the pace of interest rate hikes does not negate the fact that the upper bar of the current cycle may be reviewed upwards. By the way, Fed Chairman Jerome Powell also spoke about this scenario after the November meeting. The focus of the market attention shifted, the hawkish expectations strengthened and the dollar was back on the horse, due to which the pair fell to 1.0225. But bears couldn't settle in this price area. The dollar was under pressure again due to a new report, thereby, allowing the euro bulls to organize one more counterattack. We are talking about the minutes of the Fed's last meeting, which was published on Wednesday. In my opinion this document was not dovish at all. Moreover, all the key theses of the minutes were played back by the market - this report didn't bring anything sensational. But the fact is that traders reflexively reacted to the facts that have already been regarded, which were presented to the market in a "new cover". The essence of the minutes boils down to one simple conclusion: Fed members are ready to move further by smaller steps, i.e. more moderate rates. The document states that a number of Committee members believe that "a rapid tightening of monetary policy could pose a threat to economic growth and financial stability. Given the fact that the November FOMC meeting took place even before the release of data on October inflation growth in the U.S., we can assume that the central bank will slow down the pace of rate hikes at the next (December) meeting. That is, after four increases of 75 basis points, the central bank will raise the rate by 50 points. The minutes only confirmed the assumptions discussed earlier, putting a thick end to the relevant discussion. But the minutes did not answer the main question: how high can the final rate climb? The fact that the Fed will slow the rate hike is no indication that the upper bar of the current cycle will be lowered. In fact, some Fed officials (notably James Bullard) recently said that the "final stop" would probably be at 5.25%. Incidentally, in the same minutes, Fed members indicated that there has been "clear but little apparent progress" on inflation, and that rates still need to be raised. Therefore, in my opinion, the EUR/USD pair is growing on rather shaky grounds. Again, the bulls were supported by a trivial coincidence: The Fed's minutes were published ahead of Thanksgiving in America, amid low liquidity and high volatility. US statistics also weighed on the greenback: according to the latest data, business activity in the US declined again in November - both in the service sector and manufacturing. At the same time, the new orders dropped to the lowest level in 2.5 years. And yet long positions on the pair look risky. In fact, bulls have already played their game - there are no good reasons to develop an uptrend. Only the shortened Friday session (due to Thanksgiving) is on their side, due to which an inertial price growth is possible. Several factors are in favor of the bearish scenario. Firstly, the European Central Bank is also getting ready to slow down the pace of interest rate hikes in December. This was stated by some ECB officials over the past two weeks (in particular, Philip Lane and Mario Centeno), as evidenced by the minutes of the ECB's last meeting, which was published on Thursday. According to the document, back in October several members of the Governing Council were in favor of raising the rate by 50 basis points, not 75. Secondly, the safe-haven dollar (and consequently the EUR/USD bears) may find support from the news from China, where the number of coronavirus infections is growing. For example, on Wednesday the number of infections in China exceeded the 30,000th mark. Chinese authorities are once again forced to tighten quarantine measures, with partial lockdowns and mass testing resumed in major cities. The "zero-tolerance" policy, which has cost the Chinese (and global) economy so dearly, is back on track after easing the Covid policy. Thus, in my opinion, short positions in the pair look more promising, despite the contradictory fundamental background. The first bearish target is 1.0350 (the line Tenkan-sen on the D1 timeframe). The next (and so far the main) target is 1.0210. At this price point the bottom of the Bollinger Bands indicator coincides with the lower limit of the Kumo cloud on the four-hour chart.     search   g_translate     Relevance up to 01:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328088
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

Rejection Of Scotland's Candidacy For The Independence Referendum

InstaForex Analysis InstaForex Analysis 25.11.2022 08:42
The GBP/USD pair tested the 21st figure on Thursday - for the first time since the beginning of August. This is mainly due to the dollar getting weaker, as it stopped moving upward across the market. U.S. trading floors were closed yesterday (Thanksgiving Day in America), and the minutes of the November FOMC meeting, published the day before, were interpreted against the dollar. Such a fundamental background made it possible for GBP/USD bulls to hit a new multi-month high, marking 1.2152. Take note that the bulls were getting closer to the area of 20 figures during the last two weeks. After almost a week-long flat in the range of 1.1800-1.1950, the bulls decided to make a swift upward move, which enabled them not only to cross the level of 1.2000, but to also probe the area of the 21st figure. Do remember that the pound's growth was caused not only by the dollar getting weaker, but because it also had political overtones. The fact is that this week the British Supreme Court rejected the Scottish referendum bid for independence. According to the court's verdict, the Scottish government cannot initiate a second referendum without the UK Parliament's approval. In other words, the Supreme Court put an end to a long-playing story that has emerged (making GBP/USD traders nervous) and then disappeared into oblivion. Therefore, this court ruling is strategically important for the British currency. The pound got rid of a threat that had been hanging over it for several years, threatening to collapse. After all, if the Supreme Court verdict had been the opposite, next year the UK could have experienced events comparable to those of 2016, when the historic referendum on Brexit was held. As mentioned, the so-called "Scottish issue" has been hyped from time to time in the global press, going beyond local discussions in the local media. The last time this topic was actively discussed was at the end of last year, when the problems associated with the Coronavirus receded into the background. Back in September 2021, Scottish Prime Minister Nicola Sturgeon confirmed at the Scottish National Party conference that she was planning to hold a second independence referendum before the end of 2023. She stressed that these plans, put on pause because of the pandemic, are "unchanged." Recall that in the 2014 Scottish independence referendum, 45% of those who voted "for" and 55% voted "against." That is, the majority voted for union with Great Britain. This plebiscite was held two years before another - historic - referendum, where the majority of British residents (though by a slim margin) voted for secession from the European Union. The Scots, in turn, were unequivocal: nearly 70% of the region's population voted against Brexit. After that "separatist" sentiments intensified in the region. According to experts, Scotland is now essentially divided 50/50 on independence. But analysts don't rule out a possibility that many politically neutral residents of Scotland can mobilize if necessary and use the chance that fell out. After all, it would obviously present itself to them next time in several decades. That is why sociologists have repeatedly warned that at the "X hour", when hypothetical plans for a new referendum take shape, the scales will tip in favor of the region's independence. But to the disappointment of supporters of Scottish independence, the Supreme Court did not allow the local authorities to organize a second vote without an approval from the British Parliament. Downing Street has already rushed to say that the Cabinet will not allow another plebiscite. According to the government, this is a "once in a generation" event. It is obvious that the Conservatives, who control the House of Commons (and will control it at least until 2024) will not allow the Scottish nationalists to realize the idea of another referendum. Therefore, this issue can be considered closed: for the foreseeable future, all slogans and calls for Scottish independence will have no effect on the pair. However, despite the importance and significance of the Supreme Court ruling, the pair's fate now depends on the dollar's behavior. The "Scottish issue" usually flares up brightly, but fades quickly. And it looks like this time it will fade today and for a long time. Next week traders of dollar pairs will focus on the Federal Reserve representatives' rhetoric. The market's tumultuous reaction to the minutes of the November FOMC meeting suggests that the dollar continues to "rule" the currency pairs of the major group. Traders in the second round played back the news that the U.S. central bank will slow down the pace of monetary policy tightening as early as December. But at the same time, the question of what level of the rate the central bank will stop at in the current cycle is still a matter of debate. And this discussion, the degree of "hawkishness" of which will be determined by members of the Fed, will allow GBP/USD traders to determine the vector of price movement. In my opinion, the Fed's minutes will fade into the background at the beginning of next week (Fed representatives have already announced all the theses of this document). The focus will be on U.S. statistics (Nonfarm) and comments of the Fed members. If they reiterate that it is not the speed of rate hikes that matters but the end of the current cycle, then the dollar may come out on top again. The probability of this scenario is quite high, given the earlier statements of Fed Chairman Jerome Powell and many of his hawkish wing colleagues. Bulls on GBP/USD, who are taking advantage of the moment (shortened trading session on Friday, low liquidity), may try to cross the resistance level of 1.2150 (the upper line of the Bollinger Bands on the D1 timeframe) again. However, taking into account the current fundamental background, it is better to wait for the upward momentum to end, and by next week, you should consider short positions with the first target being 1.1940 (the Tenkan-sen line on D1) and the main target at 1.1700 (the middle line of Bollinger Bands on the same timeframe). Relevance up to 03:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328094
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

NZD/USD Pair: The Market Mood Is Extremely Quiet

TeleTrade Comments TeleTrade Comments 25.11.2022 09:07
The New Zealand Dollar has not been impacted much despite Retail Sales data missed estimates. NZD/USD is hoping for a cushion around the 20-MA (High-Low) band. A slippage in the RSI (14) to the 40.00-60.00 range is merely a loss of momentum, not a bearish reversal. The NZD/USD pair has attempted a recovery after dropping to near 0.6250 in the Asian session. The market mood is extremely quiet as investors are returning gradually after a holiday on account of Thanksgiving Day. Also, the USD Index (DXY) has turned flat after displaying a wild gyration in the morning trade. The Kiwi asset has not been impacted much after New Zealand Retail Sales missed estimates. The economic data landed at 0.4%, lower than the consensus of 0.5% but remained firmer from the prior release than the prior release of -2.3%. On an hourly scale, the Kiwi asset is looking for the ground near the 20-period Moving Average (High-Low) in the dimensions of 0.6252-0.6270. Broadly, the upward-sloping trendline placed from November 10 low at 0.5841 will act as a major support for the counter. Meanwhile, the Relative Strength Index (RSI) (14) has fallen into the 40.00-60.00 range from the bullish range of 60.00-80.00. This indicates that the New Zealand Dollar has lost momentum, however, the upside bias is still intact. Should the asset break above Thursday’s high at 0.6288, the New Zealand Dollar bulls will drive the asset towards August 1 high at 0.6353, followed by the round-level resistance at 0.6400. Alternatively, a decline below weekly lows at 0.6088 will drag the Kiwi asset toward November 14 low at 0.6061. A slippage below the latter will expose the major to drag further near the psychological support of 0.6000. NZD/USD hourly chart  
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

AUD/USD: Volatility In The Currency Market Has Been Squeezed Dramatically Due To Thanksgiving Day

TeleTrade Comments TeleTrade Comments 25.11.2022 09:10
AUD/USD is aiming to stabilize above the 0.6760 hurdle for further gains. The US Dollar is displaying a subdued performance as the overall market mood is extremely bullish. Australian Retail Sales data is expected to decline to 0.3% vs. the former release of 0.6%. The AUD/USD pair is displaying a lackluster performance in the Asian session amid a quiet market mood. The Aussie asset has managed to reclaim the 0.6760 hurdle after a minor sell-off in early Tokyo. Volatility in the currency market has been squeezed dramatically as trading activity is low in the United States due to Thanksgiving Day. Meanwhile, the US Dollar is displaying a subdued performance in the Tokyo session after a wild move in early trade. The US dollar has turned sideways as the economic calendar has nothing much to offer. As odds for a slower rate hike by the Federal Reserve (Fed) have strengthened, the alpha generated by US Treasury bonds is under investors selling list. The 10-year US Treasury yields have extended their losses to near 3.66%. Investors are pouring funds into the US Treasury bonds and risk-sensitive assets on the expectation that a shift to lower rate hike measures by the Fed in its December monetary policy meeting will accelerate economic projections. The dictations from the Federal Open Market Committee (FOMC) have already cleared that deceleration in the rate hike pace is necessary to reduce financial risks. On the Australian dollar front, investors are shifting their focus toward the release of Retail Sales data. The economic data is expected to decline to 0.3% vs. the prior release of 0.6% on a monthly basis. A decline in consumer demand would delight the Reserve Bank of Australia (RBA) as lower retail sales will force the producers to lower their prices to accelerate demand. This might result in a decline in inflation ahead.  
Underestimated Risks: Market Underestimating Further RBA Tightening

Decline In Oil Prices Infused Fresh Blood Into The Indian Rupee (INR) Bulls

TeleTrade Comments TeleTrade Comments 25.11.2022 09:15
USD/INR is expected to display sheer losses as it has surrendered the critical support of 81.60. The 10-year US Treasury yields have dropped to near 3.66% as investors see no 75 bps rate hike move ahead. Weaker oil prices and firmer Indian indices have strengthened the Indian rupee bulls. The USD/INR pair has slipped below the critical support of 81.60 in the Asian session. The asset has surrendered the aforementioned support ahead as overall optimism in the currency market is leading to a sell-off for the US Dollar at rallies. The US dollar has delivered a downside break of the consolidation formed in a narrow range of 105.84-1.5.94 in the early Tokyo session. The mighty US Dollar is expected to retest Thursday’s low at 105.64. Meanwhile, the 10-year US Treasury yields have started their downside journey and have dropped to near 3.66% as investors see no continuation of the 75 basis points (bps) rate hike regime after the release of the Federal Open market Committee (FOMC) minutes. On the Indian rupee front, the return of Foreign Institutional Investors (FIIs) to Dalal Street as Nifty50 has reached near its all-time highs has strengthened the Indian rupee. As FIIs are pouring funds into the Indian equity markets due to an improvement in risk appetite theme, foreign reserves in India are escalating. Apart from that, a sheer decline in oil prices due to rising infections of Coronavirus in China has also infused fresh blood into the Indian rupee bulls. It is worth noting that India is one of the leading importers of oil and lower oil prices would result in a lower outlay of funds from the Indian financial system.
The USD/CAD Pair Is Likely To Remain On The Bear’s Radar

Oil Prices Put Additional Downward Pressure On The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 25.11.2022 09:20
USD/CAD refreshes weekly low on Friday amid sustained selling around the US Dollar. The less hawkish FOMC minutes and a positive risk tone continue to weigh on the buck. An uptick in oil prices underpins the Loonie and contributes to the pair’s modest decline. The USD/CAD pair remains under some selling pressure for the fourth successive day on Friday and drops to a fresh weekly low heading into the European session. Spot prices, however, manage to hold above the 1.3300 round-figure mark and remain at the mercy of the US Dollar price dynamics. A dovish assessment of the FOMC meeting minutes released on Wednesday continues to weigh on the buck and is seen as a key factor acting as a headwind for the USD/CAD pair. In fact, officials were largely satisfied that they could stop front-loading the rate increases and that slowing the rate-hiking cycle would soon be appropriate. This, in turn, cements expectations for a 50 bps lift-off at the December FOMC meeting and drags the yield on the benchmark 10-year US government bond to its lowest level since early October. Apart from this, a generally positive tone around the equity markets is seen as another factor weighing on the safe-haven greenback. Furthermore, some follow-through uptick in crude oil prices underpins the commodity-linked Loonie and exerts additional downward pressure on the USD/CAD pair. That said, worries that the worsening COVID-19 situation in China will dent fuel demand keep a lid on any further gains for the black liquid. This, in turn, is holding back traders from placing aggressive bearish bets around the USD/CAD pair. In the absence of any major market-moving economic releases, either from the US or Canada, the US bond yields and the broader market risk sentiment will drive the USD demand. Apart from this, traders will further take cues from oil price dynamics to grab short-term opportunities around the USD/CAD pair. The intraday momentum, however, is likely to remain limited amid relatively thin trading volumes on the last day of the week.  
The Market May Continue To Buy The Pound (GBP) This Week

Sterling’s (GBP) Reserve Currency Role Is Under Threat According To Analysts At Natixis

TeleTrade Comments TeleTrade Comments 25.11.2022 09:32
Sterling is a major reserve currency, accounting for 5% of global foreign exchange reserves while the United Kingdom accounts for only 3% of global GDP. But GBP’s reserve currency role could be under threat, according to analysts at Natixis. What will happen if GBP’s reserve currency role diminishes? “Sterling’s reserve currency role is under threat, particularly since the Brexit referendum, in the face of: The UK’s relatively weak growth; The reduced appeal of the United Kingdom for corporate investment; Awareness of the small size of the UK economy relative to its reserve currency status; Labour force decline, due to the departure of Europeans; And the onset of a vicious circle where because pound sterling is less attractive, it depreciates, which in turn makes it less attractive still.” “If Sterling’s share of global foreign exchange reserves falls, foreign holders of pounds will become sellers. The market for Sterling will then have to rebalance after this selling shock, which will require a huge depreciation of the Pound: To offset central banks’ sales of GBP; To balance the UK’s current account without capital inflows.”   
Hungary's Central Bank to Maintain Base Rate at 13%, Eyes on Effective Rate Amid Forint's Performance

The Actions Of The ECB May Be A Factor Providing Some Support For The EUR/GBP Cross

TeleTrade Comments TeleTrade Comments 25.11.2022 09:35
EUR/GBP stages a modest recovery from the monthly low touched on Thursday. A combination of factors underpins the shared currency and offers some support. Rising bets for additional BoE rate hikes benefit the GBP and seem to cap gains. The EUR/GBP cross gains some positive traction on Friday and reverses a part of the overnight slide to a fresh monthly low. The cross maintains its bid tone through the early European session, though seems to struggle to capitalize on the strength beyond the 0.8600 mark and remains below the 100-day SMA. The shared currency's relative outperformance could be attributed to talks of a more aggressive policy tightening by the European Central Bank (ECB). This, in turn, is seen as a key factor offering some support to the EUR/GBP cross. The ECB Governing Council member Isabel Schnabel said on Thursday that the central bank will probably need to raise rates further into restrictive territory. Schnabel added that the incoming data suggests that the room for slowing down the pace of interest rate adjustments remains limited. Adding to this, the prevalent selling bias around the US Dollar, along with an upward revision of the German Q3 GDP print, benefit the Euro and act as a tailwind for the EUR/GBP cross. According to the final reading, the Eurozone's economic powerhouse expanded by 0.4% during the three months to September and the annual growth rate in Q3 2022 stood at 1.3% vs. the 1.2% estimated. The intraday uptick, however, lacks bullish conviction and remains capped amid the underlying bullish sentiment surrounding the British Pound. The recent sharp decline in the UK government bond yields represents an easing of financial conditions, which should allow the Bank of England to continue raising borrowing costs to tame inflation. This, in turn, is seen underpinning the Sterling Pound and keeping a lid on any further gains for the EUR/GBP cross, at least for the time being. Hence, it will be prudent to wait for strong follow-through buying before confirming that spot prices have bottomed out and positioning for any meaningful appreciating move.
The EUR/USD Pair Has A Potential For Drop

Technical Analysis Of The EUR/USD Pair's Situation

InstaForex Analysis InstaForex Analysis 25.11.2022 09:44
EUR/USD It has been ten days since euro fell below 1.0500.Until now it could not move beyond it, but there is a chance that it will rise above 1.0500 soon, heading towards 1.0600 and even 1.0700. Of course, such an increase is difficult to achieve given the current weak state of the EU economy. Uncomfortably high gas and electricity prices remain a problem, but going forward these issues will be solved, most likely as early as spring 2023. For now, it is best to sell the pair in anticipation of a big drop or a big correction.     Relevance up to 07:00 2022-11-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328124
Central Bank Policies: Hawkish Fed vs. Dovish Others"

A Decline In US Treasury Yields Will Be The Determining Factor

InstaForex Analysis InstaForex Analysis 25.11.2022 09:49
Although market activity dropped because of the holiday in the US, European stocks still grew, thanks to the contents of the latest FOMC minutes. Officials said in the protocol that they are considering a gradual reduction of interest rate hikes, which returned risk appetite. Looking ahead, it is likely that the rally will extend today despite the early closure of markets. If the rally does not start today, it is likely to happen early next week. The renewed decline in Treasury yields, which will not only keep dollar down but also put considerable pressure on it, could provide good support. And even though European and US stock indices are slightly down after yesterday's positive dynamics, the picture could change dramatically during today's European or US session. If that happens, increased demand for risky assets will affect dollar, prompting a continued decline. There is also a high chance that the positive dynamics will carry on next week, with stocks rising further and dollar continuing its collapse. A decline in US Treasury yields will be the determining factor. Forecasts for today: EUR/USD If traders manage to push euro above 1.0450, quotes could climb to 1.0580. USD/JPY If traders manage to push the pair below 138.45, quotes will drop down to 136.50.     Relevance up to 07:00 2022-11-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328128
BSP Maintains Rates Amid Moderate Inflation; Eyes Further Tightening if Needed

FX: The US Dollar (USD) Is Getting Close To Some Decent Support Levels

ING Economics ING Economics 25.11.2022 10:33
FX markets are becalmed by holiday trading conditions in the US and a very light data calendar. A further unwinding of long dollar positioning remains the risk, but we think the dollar is getting close to some decent support levels. Elsewhere, 75bp rate hikes are still going through in the likes of Sweden and South Africa In this article USD: Focus on 'Cyber Five' retail sales EUR: A little less pessimism GBP: BoE stays hawkish JPY: Set for out-performance into 2023   US retailers have come up with the 'Cyber Five' sales promotion campaign which should boost retail sales    USD: Focus on 'Cyber Five' retail sales Today sees another holiday-shortened US session following the Thanksgiving public holiday. Innovative US retailers have come up with the 'Cyber Five' sales promotion campaign which stretches from Thursday's Thanksgiving all the way through to Monday. Expect to hear reports as to how this has gone, although high levels of employment and lower levels of petrol prices (now $4.30/gallon versus a high of $5.50 in June) suggest retail sales may hold up despite talk of the looming 2023 recession. FX markets are becalmed and the only stand-outs yesterday were the large 75bp rate hikes in Sweden and South Africa, plus the 150bp rate cut in Turkey in preparation for elections next year. We also note the further legacy of this year's rise in dollar and US yields, where Ghana looks set to impose a 30% haircut on Eurobond holders as it seeks a deal with the International Monetary Fund (IMF). Back to the dollar – buy-side surveys taken right before the big sell-off on 10/11 November still had long dollar positions as 'the most crowded trade' and saw the dollar as the most over-valued on record. We doubt those views will have changed that much and the buy-side will now be eager to sell any dollar rallies, believing the dollar may well have peaked. That may be the case, but as we discuss in our 2023 FX outlook, we doubt conditions will be in place for a major dollar bear trend.  We mentioned earlier that the dollar may be nearing some decent support levels. We think DXY has strong support near 105.00, marking the 200-day moving average, important lows in early August and a big 38.2% retracement level of the whole rally from summer 2021 (when the Fed started this dollar rally with its more hawkish Dot Plots). For those needing to buy dollars, DXY levels near 105 may be as good as any. Chris Turner  EUR: A little less pessimism Business surveys in Germany and France released yesterday showed a little less pessimism. And increasingly there is a view that the forthcoming downturn will be mild because of issues like a) strong employment b) large government support and c) strong household savings. Our eurozone team, however, are a bit more pessimistic. Certainly, Europe's large exposure to the manufacturing cycle and what should be weaker export markets make us sub-consensus on European growth prospects.  Despite the looming eurozone recession, ECB hawks such as Isabel Schnabel suggest it may be premature to scale back rate increases. Currently, the market prices 61bp of hikes on 15 December (we expect 50bp). Clearly, the 50bp versus 75bp debate will continue to run. For EUR/USD, it still looks like the big dollar story is dominating. We cannot rule out a further correction into the 1.05-1.06 region but would see these as the best levels before year-end. These levels could be seen next week should Fed speakers or November US jobs data prove the catalyst. Chris Turner GBP: BoE stays hawkish Recent speeches have seen the Bank of England (BoE) staying pretty hawkish despite the fiscally tight budget and broadening consensus of recession. We think positioning has played a major role in this sterling recovery and GBP/USD could see some further, temporary gains to the 1.22/23 area – which we would again see as the best levels before year-end.  Equally, EUR/GBP has good support in the 0.8550/8600 area, and given our view of a difficult risk environment into year-end and early 2023 as central banks raise rates into recessions, sterling should remain vulnerable. Chris Turner  JPY: Set for out-performance into 2023 Probably the best chance of the dollar having peaked is against the Japanese yen (JPY). USD/JPY is now nearly 10% off its high near 152 in late October. Next week we will find out whether Japanese authorities sold FX in November – having sold a combined $70bn in September and October. So far intervention can be considered to be exceptionally well-timed and effective.   If the dollar is to move lower in 2023, USD/JPY would be the best vehicle to express the view, in our opinion. This is based on the view that the positive correlation between bonds and equities can break down – bonds rally, equities stay soft – and that the US 10-year Treasury yield ends 2023 at around 2.75%. USD/JPY could be trading at 125-130 under that scenario. We now suspect that any dollar rally between now and year-end stalls at 142/145. In addition, USD/JPY will be facing a change in the ultra-dovish Bank of Japan governor next April – a big event risk for local and global asset markets. Chris Turner TagsYen FX Dollar   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Asia Morning Bites: Focus on Regional PMI Figures, China's Caixin Manufacturing Report, and Upcoming FOMC Minutes and US Non-Farm Payrolls"

Saxo Bank Podcast: The US Equity Market Is Working Into A Critical Resistance Zone

Saxo Bank Saxo Bank 25.11.2022 10:56
Summary:  Today we look at the market still in complacent mode as it continues to celebrate easing US yields and the FOMC minutes Wednesday confirming the view that the Fed is set to slow its pace of tightening. We note that the US equity market is working into a critical resistance zone, just as the US dollar eyes important support, with the overriding question of when the market will begin to fret the impact of an oncoming recession rather than maintaining the one-dimensional focus on yields. Thoughts on Apple, commodity performance, platinum vs palladium, Natgas in Europe and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-25-2022-25112022
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

The RBNZ Has Signalled That Household Spending Will Have To Drop

Kenny Fisher Kenny Fisher 25.11.2022 11:06
The New Zealand dollar has edged lower on Friday. In the European session, NZD/USD is trading at 0.6244, down 0.33%. Retail sales post modest gain It wasn’t a spectacular rebound by any means, but New Zealand’s retail sales showed a gain in Q3. Headline and core retail sales both rose a modest 0.4% QoQ. This follows a soft Q2, when headline retail sales came in at -2.2% and the core release at -1.5%. The reaction of NZD/USD was subdued, likely a result of the Thanksgiving holiday, with US markets open for limited hours today. Retail sales data may not be as positive in Q4, with the Reserve Bank of New Zealand hiking rates by a massive 0.75% this week. The RBNZ has signalled that household spending will have to drop in order to curb inflation, and with more rate hikes still to come, it’s clear that household spending will come down during the current rate-hike cycle. The Federal Reserve has telegraphed to the markets that it will continue to raise rates, despite the last inflation report, which was softer than expected. The Fed’s message, reiterated in this week’s minutes, remains somewhat mixed. On the one hand, the Fed has signalled that the pace of rates will be easing, and the markets have priced in a ‘modest’ 50 bp hike in December after four consecutive 75-bp increases. At the same time, some Fed members are projecting that the terminal rate will be higher than previously expected. There is uncertainty as to whether this “lower for longer” stance is bullish or bearish for the US dollar, a question we’ll have to wait for market participants to answer.   NZD/USD Technical NZD/USD faces resistance at 0.6283 and 0.6361 There is support at 0.6217 and 0.6139 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The EUR/USD Pair Chance For The Further Downside Movement

European Central Bank Noted That The Outlook For Inflation Continues To Deteriorate

Conotoxia Comments Conotoxia Comments 25.11.2022 11:10
The minutes of the European Central Bank's latest meeting, released yesterday, may indicate that policymakers would not back away from further interest rate hikes, even despite the risk of recession. How is the euro exchange rate reacting? Policymakers at the European Central Bank agreed at their last meeting that the central bank should continue normalizing and tightening monetary policy to combat high inflation, even in the event of a shallow recession, according to a report on the central bank's October meeting, Trading Economics reports. Officials noted that the outlook for inflation continues to deteriorate, with inflation running too high and many times above forecasts, and that there is a growing risk of its perpetuation and the emergence of second-round effects and a wage-price spiral. However, the central bank has hinted that it may want to halt ongoing interest rate hikes if there is a prolonged and deep recession, which could curb inflation to a greater extent. The ECB raised its key interest rate by 75 basis points in October, raising borrowing costs to the highest level since early 2009, with broad support for a meeting-by-meeting approach to future monetary policy decisions, depending on the data, according to minutes released yesterday. Euro exchange rate this week and month For the euro, the current month appears to be the best since July 2020. The EUR/USD exchange rate rose more than 5 percent in November, reaching its highest level since late June 2022. It seems that, in addition to improving data from the European economy, there may also be an overestimation of expectations for further Fed actions. The U.S. dollar may already be "rallied" if no new factors emerge in the U.S. pushing up expectations for more interest rate hikes. Source: Conotoxia MT5, EURUSD, Monthly In front of the EUR/USD, however, there are potential resistances from the chart. We are talking about the lows of late 2016 and the low of March 2020. Thus, the potential resistance zone could stretch between 1.0320 - 1.0640. Nevertheless, looking at the chart, we could see that we are dealing with the biggest correction in the trend since the beginning of 2021. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Saxo Bank Podcast: The Bank Of Japan Meeting And More

In Japan Deflation Seemed A Permanent Part Of The Economic Landscape But Inflation Hits High

Kenny Fisher Kenny Fisher 25.11.2022 12:42
USD/JPY has reversed directions and posted gains on Friday, after three straight losing sessions. The yen is trading at 139.39, up 0.54% on the day. US markets are open for limited hours due to the Thanksgiving holiday, and there are no US releases on the schedule. Tokyo inflation hits 40-year high The caption above may sound dramatic, but inflation in Japan is far from the levels we’re seeing elsewhere, such as double-digits in the UK and the eurozone. Still, Japan finds itself dealing with rising inflation, after decades where deflation seemed a permanent part of the economic landscape. Tokyo Core CPI rose to 3.6% in November, nudging above the consensus of 3.5% and the consensus of 3.4%. This marked the highest reading since April 1982. There’s no arguing that core inflation isn’t accelerating – Tokyo Core CPI has strengthened for six straight months and BOJ Core CPI for ninth consecutive months. This extended uptrend belies BOJ Governor Kuroda’s insistence that cost-push inflations is only temporary and that an ultra-accommodative policy is needed to ensure that inflation becomes sustainable. The BOJ is not showing any inclination to change policy and the recent improvement in the yen means one less headache, as the need for a currency intervention has diminished. It’s likely to be business as usual for the BOJ until the spring of 2023, with two key developments on the calendar – wage negotiations and a new governor for the central bank. The Federal Reserve remains in a hawkish mode, sort of. The Fed’s stance, reiterated in this week’s minutes, remains somewhat mixed. On the one hand, the Fed has signalled that it will reduce the size of rate hikes “soon”, and the markets have priced in a ‘modest’ 50 bp hike in December after four consecutive 75-bp increases. At the same time, some Fed members are projecting that the terminal rate will be higher than previously expected. This mixed message has created uncertainty about what it means for the US dollar – will “lower for longer” raise risk sentiment and weigh on the dollar, or will investors view the Fed as remaining hawkish and stick with the US dollar? We’ll have to wait and see how the markets answer this question.   USD/JPY Technical USD/JPY faces resistance at 139.62 and 140.37 There is support at 138.43 and 137.19 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Monitoring Hungary: Glimmering light at the end of the tunnel

Next Week: Industrial Production In Hungary May Show A Better-Than-Expected Performance

ING Economics ING Economics 25.11.2022 14:16
The market is firmly backing a 50bp hike from the Fed in December, and with US economic data so far proving to be resilient, all eyes are on next Friday's jobs report and the core personal consumer expenditure deflator. We expect the number of vacancies to exceed unemployed people by a ratio of 1.9:1 and for the PCE price index to be at 0.3% month-on-month In this article US: Fed may need to toughen its stance Eurozone: All eyes on inflation Hungary: Third-quarter GDP supported by industrial and services sectors   Shutterstock   US: Fed may need to toughen its stance The market remains firmly behind the view that the Federal Reserve will raise interest rates by 50bp on 14 December given Fed speakers have indicated the likelihood of less aggressive step increases in interest rates after four consecutive 75bp hikes. However, the economic data is proving to be pretty resilient and we are a little nervous that a 7% fall in the US dollar against the currencies of its main trading partners, and the 45bp drop in the 10Y Treasury yield, is leading to a significant loosening of financial conditions – the exact opposite of what the Fed wants to see as it battles inflation. Consequently, we wouldn't be surprised to see the Fed language become more aggressive over the coming week, talking about higher terminal interest rates – with some of the more hawkish members perhaps even opening the door to a potential fifth consecutive 75bp hike in December (although we don’t think they would actually do it) to ensure the market gets the message. Currently, only three officials are scheduled to speak, but we wouldn’t be surprised to see more make sudden appearances in the media.  Data-wise, the jobs report on Friday will be the focus, but there will also be interest in the ISM manufacturing index and the Fed’s favoured measure of inflation – the core personal consumer expenditure deflator – both of which are published on Thursday. The ISM is likely to drift just below the break-even 50 level given the softening trend seen in regional manufacturing indicators. The PCE deflator could be interesting too since it doesn’t always match what happens in core CPI. If you remember, that rose “only” 0.3% month-on-month versus expectations of a 0.5% increase and was the catalyst for the recent drop in Treasury yields, as expectations for Fed rate hikes were scaled back. A 0.4%+ print for MoM core PCE deflator could generate quite a sizeable reverse reaction. Meanwhile, the jobs numbers should hold around 200,000 given the number of vacancies continues to exceed the number of unemployed people by a ratio of 1.9:1. Nonetheless, there are more firings going on in the tech sector and the increase in initial claims also points to softer employment growth in the coming months. Eurozone: All eyes on inflation Has a eurozone inflation figure ever been more important than the November reading that is due out on Wednesday? With the ECB focusing more on current inflation developments for determining when to move to smaller rate hikes, the November inflation figure will be very relevant for the December rate hike decision. While energy prices have been moderating and other supply shocks are fading, the question is how quickly this impacts consumer prices. Also keep an eye out for unemployment on Thursday. Any sign of the labour market slowing will also be taken into account at the next policy meeting. Hungary: Third-quarter GDP supported by industrial and services sectors Next week’s events calendar for Hungary is focused on one day. On the first day of December, we are going to see detailed GDP data from the third quarter. Here we expect that industrial production will show a better-than-expected performance, giving support to the net export which has suffered under the pressure of the energy crisis. Along with industry, the services sector is expected to be a key driver, which was able to limit the quarter-on-quarter drop in GDP. The manufacturing PMI has shown significant monthly volatility recently thus we see a down month in November after a significant upside surprise in October. Key events in developed markets next week Refinitiv, ING Key events in EMEA next week Refinitiv, ING TagsUS Inflation Eurozone EMEA Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair: There Are Still No Sell Signals

The ECB Members Remained Concerned About Inflation Becoming Entrenched

Kenny Fisher Kenny Fisher 25.11.2022 14:32
US markets are open for limited hours today, and investors are focussed on the World Cup and Black Friday rather than the US dollar. EUR/USD is trading quietly at 1.0392, down 0.18%. German data has not been spectacular this week, but nonetheless is moving in the right direction, as the German economy is in decent shape. Germany’s GDP for Q3 was revised upwards to 0.4% QoQ, up from 0.3% and ahead of the consensus of -0.2%. This follows a 0.1% gain in GDP in Q1 and is all the more impressive, considering the headwinds on the global scene, in particular the war in Ukraine. Germany has made a mammoth effort to stockpile energy supplies and end its dependence on Russia, which should mean that an energy crisis can be avoided this winter. German Consumer confidence remains weak but improved slightly for a second straight month. The November reading rose to -40.2, up from -41.9, although shy of the consensus of -39.6. Business confidence also edged higher earlier this week, as did Business Expectations. ECB says more rate hikes needed The ECB minutes, released on Thursday, indicated that ECB members remained concerned about inflation becoming entrenched. Members were clear about the need to raise rates in order to bring inflation back down to the 2% target, and most members supported the 75-bp hike at the October meeting, with a few voting for a 50-bp move. The markets have priced in a 50-bp increase at the December 15th meeting, after ECB policymakers hit the airwaves and urged that the ECB slow down the pace of rate hikes. Still, with inflation at a crippling 10.6%, there’s little doubt that the ECB will have to continue raising rates, and the markets expect the deposit rate, currently at 1.5%, to hit 3.0% in 2023.   EUR/USD Technical 1.0359 and 1.0238 are providing support There is resistance at 1.0447 and 1.0568 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The EUR/USD Pair Is Still In A High Position On The 1H Chart

Energy Markets In Europe Are Not Fretting Development

Saxo Bank Saxo Bank 25.11.2022 14:40
Summary:  The US dollar has worked its way into a huge support zone ahead of the next batch of incoming data. The big test ahead across markets is perhaps when we move away from a one-dimensional obsession with US yields and begin to look at how markets start to price an incoming recession. That could complicate the turnaround process from a USD bull to a USD bear market. FX Trading focus: USD eyes huge support ahead of next important incoming data next week. Time for a shift in focus for the greenback? The FOMC minutes Wednesday confirmed the market’s well-established expectation that the Fed is set to downshift to a 50-bp hike in December, with a bit more tightening thereafter and a hold for most of next year. The action in the curve has been farther out, where the market is getting more aggressive in expressing the view that the Fed will be cutting rates quite aggressively in 2024, with the December 24 EuroDollar STIR future pricing some 170 basis points of easing from the mid-2023 peak – that is up from around 100 basis points just a month ago. It is a strong indication that the market is pricing for an oncoming recession, unless inflationary pressures can somehow normalize in a very soft landing scenario. For now, the markets are celebrating US yields falling (from 3-years and further out, at least), but at some point will have to consider what a recession normally entails in terms of impacts on corporate profits, the credit cycle, asset prices etc. – in other words, a more widespread deleveraging. At this point in the cycle, we have mostly only neutralized many of the excesses inspired by the pandemic, not priced a significant recession. As well, we are in a novel environment relative to every cycle since at least 1982. Especially the 2007-09 global financial crisis is not seen as a good model for what comes next and partially for good reason: the Fed and other central banks have thoroughly learned the lesson that raging contagion in the financial system is unacceptable, and they are so used to extreme intervention to prevent disorder, with further lessons learned in the pandemic response. So markets feel comfortable in taking the financial chaos option off the table. Nonetheless, once we do cross into a recession in the US as well as Europe and elsewhere, the central banks, and more importantly governments in this age of rising fiscal dominance, will have to be far more wary of triggering an inflationary rebound when considering new easing/stimulus. In that light, there are perhaps three paths from here. More of the same (another month max): we continue to see softer, but relatively benign data that allows the market to continue to celebrate an easing of Fed tightening and the anticipation that no new inflationary shock awaits. Max USD bearish scenario. Recession fears rising with yields falling: This is the most interesting test of the USD and its correlations across assets. Would the greenback continue lower as yields fall on the anticipation that the Fed is set to eventually ease, or would weak risk appetite and increasingly poor liquidity and the fear that the Fed will prove too slow to pivot toward easing cause more significant deleveraging across markets that keeps the USD well supported? I think the US dollar’s safe haven status will still be around if we do see a new cycle of widespread risk aversion. Inconveniently sticky inflation with or without rising recession fears: Evidence continues to point to an oncoming recession, but that path could take considerable time to materialize and, in the meantime, any sign that the inflation is failing to maintain a steady downward path won’t be welcome. This could be aggravated by a situation in which China eases up on its restrictive Covid policies and is stimulating and driving commodity prices higher just as Europe and the US tilt into a recession? This scenario would be more likely to see USD sensitive to risk sentiment, as yields would have a hard time falling further in this scenario. Chart: EURUSDEURUSD has been interacting with its 200-day moving average again while not quite able to mount an attack on the recent pivot highs near 1.0480. Given our scenarios above, the two+ week into the December 14 FOMC meeting offer an interesting test of the current market backdrop – is data particularly strong and spoils the decelerating inflation narrative, or is it far weaker than expected, raising recession fears? And if the data is indifferent to stronger than expected, how unhappy is the Fed that financial conditions are at their easiest since May, before the Fed even began hiking rates in 75-bp increments? On a somewhat different note, long range weather forecasts are beginning to see very cold weather across Europe starting in about 10 days. Energy markets in Europe are not fretting this development, but if they do, it will remind euro and sterling traders that external deficits remain a risk for the single currency and sterling. Technically speaking, the first sign of weakness would be a run below the 1.0223 pivot low from the start of this week, but the bigger break-down area looks like 1.0100. Source: Saxo Group Yesterday, the Riksbank hiked the policy rate 75 basis points as a strong majority expected, taking the rate to 2.50%. Interestingly, to buy itself some optionality, the bank issued a baseline forecast for its policy rate in which inflation dropped to sub-2% by early-mid 2024, which would mean the policy rate peaks below 3%, while an “alternative scenario” of inflation failing to fall much below 4% would mean that policy rate would have to rise north of 4.50%. It was an interesting sign of central bank insecurity on the path from here, although Swedish rates hardly moving in the wake of this meeting and the alternative scenario discussion. SEK got a solid boost by the end of the day yesterday and it is now well embedded back in the range since September after the recent upside threat. It is hard to see EURSEK threatening 11.00+ again unless we are about to tilt into a severe bout of risk aversion. Table: FX Board of G10 and CNH trend evolution and strength.CNH curiously weak – doesn’t fit with where the also weak USD is trading elsewhere. Sterling strength is getting a bit out of hand here, but could yet continue if the complacent backdrop continues. Still have to believe that nearly all of the short speculation in sterling has been squeezed out. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Note USDCNH close to flipping positive – needs a solid surge above 7.200 for a stronger indication. Source: Bloomberg and Saxo Group Source: https://www.home.saxo/content/articles/forex/fx-update-usd-running-out-of-room-to-fall-on-current-drivers-25112022
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Current Price Of The GBP/USD Pair Is In A Bullish Channel

InstaForex Analysis InstaForex Analysis 26.11.2022 15:39
All elements being clearly bullish, it would be possible for traders to trade only long positions on the GBP/USD pair as long as the price remains well above the golden ratio of 1.1761. The buyers' bullish objective is set at 1.2026. The price is likely to form a double top in the same time frame. Accordingly, the GBP/USD pair is showing signs of strength following a breakout of the highest level of 1.1874. So, buy above the level of 1.1874 with the first target at 1.2026 in order to test the daily resistance 1. The level of 1.2026 is a good place to take profits. Moreover, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). This suggests that the pair will probably go up in coming hours. A bullish break in this resistance would boost the bullish momentum. Together with the relatively large distance to the fast-rising 100-day moving average (1.2000), there are some arguments for a relief rally in coming months on the table. The buyers could then target the resistance located at 1.2026. If there is any crossing, the next objective would be the resistance located at 1.2026. If the trend is able to break the level of 1.2026, then the market will call for a strong bullish market towards the objective of 1.2100 today. The GBP/USD pair is at highest against the dollar around the spot of 1.1926 since two weeks - the GBP/USD pair is inside in upward channel. Since three weeks the GBP/USD pair decreased within an up channel, for that the GBP/USD pair its new highest 1.2026. Be careful, given the powerful bullish rally underway, excesses could lead to a possible correction in the short term. If this is the case, remember that trading against the trend may be riskier. It would seem more appropriate to wait for a signal indicating reversal of the trend. Be ware, the short term currently seems to be losing ground compared to the basic trend. Longer time units should be analysed to identify possible overbought items that could be a sign of a possible short-term correction. Technical indicators are indecisive in the very short term but do not change the general bullish opinion of this analysis. On the other hand, in case a reversal takes place and the GBP/USD pair breaks through the support level of 1.1874, a further decline to 1.1761 can occur. It would indicate a bearish market. At the same time, the breakup of 1.1930 will allow the pair to go further up to the levels of 1.2026 in order to retest the double top again. It might be noted that the level of 1.2100 is a good place to take profit because it will form a new double top in coming hours. The general bullish opinion of this analysis is in opposition with technical indicators. As long as the invalidation level of this analysis is not breached, the bullish direction is still favored, however the current short term correction should be carefully watched. The bulls must break through 1.1930 so as to resume the uptrend. Other outlook for the GBP/USD pair : Pound Sterling is currently trading at 1.1850. However, if the trend reverses from this point, then a possible future share price target could be 1.2026. If the price of Pound Sterling is trading above 1.2026 then possibility of upside targets getting achieved is higher around the level of 1.2100. The basic bullish trend is very strong on the GBP/USD pair, but the short term shows some signs of running out of steam. Nevertheless, a purchase could be considered as long as the price remains above 1.1761. Crossing the first resistance at 1.2026 would be a sign of a potential new surge in the price. Buyers would then use the next resistance located at 1.2100 as an objective. Crossing it would then enable buyers to target 1.2100. Caution, a return to below 1.1761 would be a sign of a consolidation phase in the short-term basic trend. If this is the case, remember that trading against the trend may be riskier. It would seem more appropriate to wait for a signal indicating reversal of the trend. In the very short term, the general bullish sentiment is not called into question, despite technical indicators being indecisive. All elements being clearly bullish market, it would be possible for traders to trade only long positions on the GBP/USD pair as long as the price remains well above the price of 1.1761. The GBP/USD pair will continue rising from the level of 1.1761 in the long term. It should be noted that the support is established at the level of 1.1761 which represents the last bearish wave. The price is likely to form a double bottom in the same time frame. Accordingly, the GBP/USD pair is showing signs of strength following a breakout of the highest level of 1.1761. So, buy above the level of 1.1761 with the first target at 1.1875 in order to test the daily resistance 1. The buyers' bullish objective is set at the level of 1.2026 (last bullish wave). A bullish break in this resistance would boost the bullish momentum. The buyers could then target the resistance located at 1.2026. This suggests that the pair will probably go up in coming hours. If the trend is able to break the level of 1.2026 (double top), then the market will call for a strong bullish market towards the objective of 1.2026 this week. If there is any crossing, the next objective would be the resistance located at 1.2100. The level of 1.2100 is a good place to take profits. Moreover, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). Since the trend is above the 61.8% Fibonacci level (1.1761), it means the market is still in a uptrend. From this point, the GBP/USD pair is continuing in a bullish trend from the new support of 1.1761. This is shown to us as the current price is in a bullish channel. According to the previous events, we expect that the GBP/USD pair will move between 1.1761 and 1.2100 in coming hours. However, beware of bullish excesses that could lead to a possible short-term correction; but this possible correction would not be tradeable. On the other hand, in case a reversal takes place and the GBP/USD pair breaks through the support level of 1.1761, a further decline to 1.1596 can occur. It would indicate a bearish market.     search   g_translate     Relevance up to 13:00 2022-11-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/302646
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

Euro (EUR) Will Have To React To The European Central Bank's Discussion

InstaForex Analysis InstaForex Analysis 26.11.2022 15:44
Bulls on the EUR/USD pair are desperately trying to rise above the 1.0400 level: they repeatedly tried to attack the 4th figure in November, but failed each time. Traders fail to consolidate the success and, accordingly, are not able to develop it in order to claim the next, fifth price level. Their indecisiveness plays against them: as soon as the upward momentum fades, the bears come in, and they pull the price down. This "push-and-pull" takes place amid a contradictory news flow, which prohibits both bulls and the bears to dominate. In addition, the US celebrated Thanksgiving, which lasted through Wednesday, Thursday and most of Friday. The US trading floors were either closed or did work, but in a shortened period. Traders were "fishing in troubled waters", i.e. they took advantage of low liquidity and high volatility. It is obvious that next week, the market will operate the way it does normally, which means that the overall alignment of forces may change significantly, and probably not in favor of the bulls. The pair is now trying to stay within the framework of the 4th figure only by inertia. The market's interpretation of the minutes of the FOMC's November meeting, published on Wednesday, did not work in the dollar's favor: due to this fundamental factor, the bulls reversed the price, rising from 1.0225 to the 1.0450 target (high of the current week). But traders couldn't hold their positions and the pair went adrift. Bulls cannot move to the area of the 4th figure, bears cannot pull the price down to the area of the 2nd price level. Both parties need more information to push the pair. At the same time, all the previous information and events were played out, and some of them even twice. Thus, the aforementioned minutes confirmed traders' assumptions that the central bank is getting ready to slow down the rate of tightening the monetary policy. Actually, it was the only message that was dovish in nature. But it was enough for the pair to surge upwards. Traders were not confused by the fact that Federal Reserve Chairman Jerome Powell spoke about the slowdown of monetary policy at the beginning of November. In addition, some of the other Fed members repeatedly spoke about such intentions. And after the latest US inflation data reported growth, the probability of a rate hike by 50 points at the December meeting increased up to 80%. The Fed minutes that was released on Wednesday reminded the market of such intentions - nothing more. But amid low liquidity, traders decided to win back this fundamental factor by the second round. Given this disposition, the question arises: can the EUR/USD bulls develop their upward attack on such shaky grounds? Definitely not. Friday's price fluctuations show that the bulls are not confident in their own capabilities. Neither are the bears. And in my opinion, the bulls are definitely losing their grip. Figuratively speaking, you won't get far with just "one minutes", at the same time there are currently no additional arguments for a large-scale growth from the pair. But the U.S. currency may receive substantial support ahead of the December FOMC meeting. According to a number of currency strategists, estimates of the terminal rate are likely to be revised upwards in December's "dot-plot" compared to the previous forecast, which was published in September. Powell admitted such a possibility following the results of the November meeting. And if similar assumptions are made by other members of the Fed (before the 10-day "hush-hush" period), we could be witnessing another dollar rally. Again, this scenario is very likely, given Powell's previous rhetoric. In addition, the U.S. currency could receive support from the Nonfarm Payrolls report. If the unemployment rate returns to 3.5% and the growth rate of non-farm payrolls exceeds at least the 250,000 target, the dollar bulls will feel much more confident, even against the euro. The single currency (euro) will then have to react to the European Central Bank's discussion on the pace of monetary policy tightening. There are calls for the central bank to "moderate its enthusiasm" at the December meeting, that is, to raise the rate by just 50 points, and not 75. In particular, the chief economist of the ECB spoke in favor of this scenario. By the way, the preliminary data on inflation growth in the eurozone for November will be published next week. If the report shows at least minimal signs of a slowdown in CPI growth, then the euro will be under significant pressure, as in this case the issue of slowing down the pace of rate hikes can be considered a done deal. Thus, despite the bulls' attempts to settle within the framework of the 4th figure, they still have no good reasons to develop the uptrend at the moment. Long positions look risky - at least until the price stays above the resistance level of 1.0450 (the upper line of the indicator Bollinger Bands on the daily chart). In the medium term, it is better to consider short positions. The first bearish target is 1.0350 (Tenkan-sen line on the one-day timeframe). The main target is 1.0210 (at this price point, the bottom of the Bollinger Bands indicator coincides with the lower limit of the Kumo cloud on the H4 timeframe).       Relevance up to 23:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328215
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

The Further Decline Of The AUD/NZD Cross-Pair Is Expected

InstaForex Analysis InstaForex Analysis 26.11.2022 15:45
This week, the New Zealand dollar received substantial support from the Reserve Bank of New Zealand: the central bank fully justified the hawkish hopes of most experts by raising the interest rate by 75 basis points. And although the central bank implemented the base scenario, the kiwi still showed increased volatility. For instance, the NZD/USD pair updated its multi-week high to 0.6282. But in this case we cannot be sure about the success of the uptrend - the "dark horse" here is the greenback, which can significantly strengthen its positions ahead of the December FOMC meeting. That's why it is best to "monetize" the results of the RBNZ's November meeting with the help of cross-pairs that have the kiwi in it. And, in my opinion, the best option here is the AUD/NZD cross. Take a look at the weekly chart of this pair. The price has been falling steadily and consistently (though with corrective pullbacks) for the second month in a row, since early October. This means that we are dealing with a noticeable downtrend, which has a rather strong fundamental basis. It is expressed primarily (and mostly) in how the rates of the RBNZ and Reserve Bank of Australia are uncorrelated. The RBA slowed the pace of tightening back in September, complaining about the side effects of aggressive policy. And recently the RBA has been giving signals about a possible pause in the first half of next year. And although these signals are only heard in the list of hypothetical options, the market is still cautious. In my opinion, it is quite reasonable. Let's look back on the minutes of the last RBA meeting. The text of this document indicates that the central bank has no predetermined trajectory for the rate hike. Members of the central bank do not exclude two options: 1) a return to a 50 bps hike (the central bank is currently raising the rate in 25 bps); and 2) a suspension of monetary policy tightening. In my opinion, the Australian central bank will continue to raise the rate by 25 bps at the next meetings, but will end the current cycle of monetary tightening at a lower level relative to the RBNZ. The OCR rate is currently at a 14-year high (4.25%, RBA at 2.85%), with the New Zealand central bank still stating that "there is still a lot to do" as inflation remains at unacceptably high levels. At the previous (October) RBNZ meeting, the central bank raised the rate by 50 bps, as it did at the previous four meetings. However, at the final press conference, RBNZ Governor Adrian Orr admitted that 75 bps was among the options under consideration. At that time, the central bank was hesitant to accelerate monetary tightening, but the inflation data released a little later gave the RBNZ members determination in November. As a reminder, inflation in New Zealand soared again in the third quarter, well above forecast levels. The consumer price index rose 2.2% in quarterly terms (against a forecast of 1.5%) and jumped to 7.2% year over year, against a forecast of a slowdown to 6.5%. Given the inflation trends, as well as Orr's hawkish rhetoric, we can assume that the monetary policy tightening will continue to slow down next year. For example, currency strategists at the UOB have revised their earlier forecasts and moved the current cycle ceiling to 5.5%. In their view, the RBNZ will reach this target in the third quarter of 2023, after which the process of monetary policy tightening will be paused, followed by a rate cut in 2024. The RBA, for its part, is relaying softer language, while not ruling out dovish decisions. For example, at the end of its last meeting, RBA Governor Philip Lowe said that members of the central bank "considered it appropriate to raise rates at a slower pace." At the same time, he noted that the members discussed the implications and costs of not raising rates, since the central bank "takes into account the pressures of higher rates and inflation on household budgets." Thus, Lowe allowed a pause in the process of tightening monetary policy. Thus, the current fundamental background contributes to the further decline of the AUD/NZD cross-pair. The bearish scenario is also evidenced by the technical picture: the pair is between the middle and bottom lines of the Bollinger Bands indicator on the daily chart, as well as under all the lines of the Ichimoku indicator, which shows a bearish Parade of Lines signal. It is better to use any corrective surges to open short positions to the first support level of 1.0750 (the bottom line of the Bollinger Bands indicator on the daily chart). The main bearish target is 1.0700 (lower limit of the Kumo cloud on the one-week timeframe).       Relevance up to 01:00 2022-11-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328219
The Outlook Of EUR/USD Pair For Long And Short Position

The Recession In The Eurozone Will Be Short-Lived

InstaForex Analysis InstaForex Analysis 26.11.2022 15:55
Thanksgiving day, the closing of the U.S. stock markets and the outflow of liquidity caused the EUR/USD pair to get bored at the end of the last full week of fall. Not surprising, given the tumultuous moves before that. The dollar started the week in good condition and ended it in grief, completely giving up the initiative to the euro. Thanks to the strong data and hawkish speeches of the European Central Bank officials, the euro reclaimed its spot by hitting its 5-month highs and looks forward to important data on eurozone inflation and the US labor market. Strong German GDP statistics for the third quarter also boosted the morale of the euro fans. Positive consumer sentiment, business activity and the business climate were followed by encouraging news from the German economy. It expanded not by 0.3%, but by 0.4%, i.e. it was more resilient to numerous troubles, including the energy crisis, than previously thought. The main driver of growth was the consumers, whose activity increased by 1%. German GDP dynamics The latest data suggest that the recession in the eurozone will be shallow and short-lived, which supports the single currency. The market is optimistic, however the Institute of International Finance decided to add a minor hitch. According to the trade association, which was one of the first to predict the parity in EURUSD, the armed conflict in Ukraine will develop into an eternal war. It will not end in 2023, and the countries that are close to it will suffer first. In particular, the eurozone, whose GDP will shrink 2% next year due to a sharp decline in consumer and business confidence. The U.S. economy will expand by a modest 1% as the Federal Reserve's tightening of monetary policy will have a noticeable effect. The main driver of global GDP will be China, which will defeat COVID-19 and finally open its economy. However, China's efforts will not be enough. The world gross domestic product in 2023 will increase by 1.2%, which will be its worst performance since 2009. It looks like the glass is half empty for the Institute of International Finance, which provides hope to the EUR/USD bears. If the world economy feels as bad next year as it has this year, or maybe even worse, then getting rid of the U.S. dollar is not a good idea. The greenback is the currency of the pessimists. In the short-term, the dynamics of the main currency pair will be determined by releases of data on European inflation and U.S. labor market. Slowing consumer prices in the eurozone and U.S. employment are the keys to reduce the speed of monetary easing by the ECB and the Fed, so EURUSD risks showing mixed dynamics. Technically, the pair has an opportunity to continue the rally towards the 161.8% target on the Crab pattern and to win back the 1-2-3 Reversal pattern. In this regard, let's sell the euro on a breakout of support at 1.038 and 1.033 and buy it in case it grows above 1.044.     search   g_translate     Relevance up to 13:00 2022-11-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328180
ECB press conference brings more fog than clarity

The European Central Bank's Interest Rate Will Increase In the Upcoming Months

InstaForex Analysis InstaForex Analysis 27.11.2022 13:25
The wave marking on the euro/dollar instrument's 4-hour chart is convincing. The upward portion of the trend has corrected itself. Initially, I believed three waves would develop, but it is now abundantly clear that there are five waves. As a result, the waves a, b, c, d, and e have a complex correction structure. If this supposition is accurate, the building of this structure may have already been finished since the peak of wave e is higher than the peak of wave C. In this instance, it is anticipated that we will construct at least three waves downward, but if the most recent phase of the trend is corrective, the subsequent phase will probably be impulsive. Therefore, I am preparing for a new significant decline in the instrument. The market will be ready to sell when a further attempt to breach the 1.0359 level, which corresponds to 261.8% Fibonacci, is successful. The peak of the anticipated wave e was still present, so removing quotes from the lows this week did not violate the wave marking. As a new downward trend segment, most likely segment 2 or b, the most recent increase in quotes can be seen as an internal correction wave. Wave e and the upward portion of the trend will likely take a more extended form if an attempt to break through its current peak is successful. Rates will keep rising, according to an ECB vice president. This week, the euro/dollar instrument experienced positive dynamics. The demand for the euro currency was increasing despite the absence of reports and news. This allowed the instrument to develop an upward wave that still needed to deviate from the established wave pattern. However, the instrument's decline should start as early as Monday or Tuesday to preserve the integrity of the wave marking. A wave 3 or C is supposed to be built right now. The ECB Vice President Louis de Guindos' speech last week was the most interesting for the euro. There were two performances, though they were barely distinguishable from one another. According to De Guindos, the European Central Bank's interest rate will increase in the upcoming months because the European Union's inflation rate is still "indecently high," and the slowdown in economic activity cannot result in a decrease in the consumer price index. As no one who participated in the foreign exchange market questioned further tightening monetary policy, I cannot say that de Guindos' statement sparked a commotion there. The likelihood that the rate will increase further, though, is growing. The euro currency benefits from this, but wave analysis and the news background are now at odds. While the news background suggests an increase, the waves suggest a decrease. We may see both in the end. The tool can create a third wave of a descending trend before starting a new upward trend segment. However, a descending wave needs to be constructed first. If not, the wave markup might become much more difficult to read. Conclusions in general Based on the analysis, the construction of the upward trend section is complete and has become more complicated with five waves. As a result, I suggest making sales with targets close to the estimated 0.9994 level, or 323.6% Fibonacci. There is a chance that the upward section of the trend will become more complicated and take on an extended form, but this chance is currently at most 10%. The wave marking of the descending trend segment becomes more intricate and lengthens at the higher wave scale. The a-b-c-d-e structure is most likely represented by the five upward waves we observed. After the construction of this section is finished, work on a downward trend section may resume.     search   g_translate     Relevance up to 11:00 2022-11-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328232
Metals Update: Gold Demand Declines Marginally, Copper and Aluminium Positions Adjusted

Cabel Market (GBP/USD): A New Downward Trend Segment Is Predicated

InstaForex Analysis InstaForex Analysis 27.11.2022 14:25
The wave marking for the pound/dollar instrument currently appears quite confusing, but it still needs to be clarified. We have a completed downward trend section consisting of five waves (a-b-c-d-e). We also have a five-wave upward trend section, which has taken the form a-b-c-d-e and can be completed. As a result, the instrument's quotes may continue to rise for a while. Still, the European currency has already begun (presumably) constructing a new downward section, and the British should do the same. As both central banks recently increased interest rates, the news backdrop could have been interpreted in any way. The week before last, we witnessed a decline in the dollar value relative to the news backdrop, which may have contributed to its potential new growth (Nonfarm Payrolls report). Then came the inflation report, which decreased demand for the dollar even though the opposite outcome might have occurred. The internal wave structure of wave e has been complicated due to the rise in quotes this week, but so far, only this wave and only part of the trend section have done so. This wave might have a longer form. Nicola Sturgeon will research alternate exit strategies from the UK. The expected wave e could continue to build because the pound/dollar instrument's exchange rate rose by several hundred points. The ruling of the Supreme Court of the United Kingdom on the petition for a second Scottish independence referendum was the week's main event. The court ruled that the Scottish Parliament cannot pass legislation calling for a new referendum without the British Parliament's consent. In addition, the court determined that Scotland lacks the authority to organize an "advisory" referendum. Let me remind you that First Minister Nicola Sturgeon has scheduled a purportedly "consultative" referendum for the second half of 2023. This referendum aims to determine the percentage of Scots who favor independence from the UK. The Act of 1998, according to the court's chairman, Lord Robert John Reed, places all constitutional-related matters solely within the purview of the British Parliament. Based on this act, the Scottish Parliament resumed its session in 1999 and is endowed with limited authority. Nicola Sturgeon has previously said that she respects the court's decision but is disappointed. Because Scottish citizens did not support Brexit in greater numbers in 2016, she also said that Scotland would continue to look for ways to hold a referendum. The Scottish authorities "will find another way to express the will of the Scottish people," according to Sturgeon. But as of now, I can only confirm one thing: Scotland does not currently possess the legal authority to hold a referendum and will not do so anytime soon. Therefore, the union between Scotland and Britain will not be broken. At the same time, Nicola Sturgeon plans to keep looking for ways to sever ties with Britain, but it isn't easy to envision what this path might entail given that all strands of the British government are connected in London. Conclusions in general The construction of a new downward trend segment is predicated on the wave pattern of the pound/dollar instrument. I cannot suggest purchasing the instrument immediately because the wave marking already permits the development of a downward trend section. With targets around the 1.1707 mark, or 161.8% Fibonacci, sales are now more accurate. The wave e, however, can evolve into an even longer shape. The Euro/Dollar instrument and the picture look very similar at the larger wave scale, which is good because both instruments should move similarly. The upward correction portion of the trend is currently almost finished. If this is the case, a new downward trend will soon develop.     Relevance up to 11:00 2022-11-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328234
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

Macroeconomic And Fundamental Backgrounds Have Been Favorable For The Euro (EUR)

InstaForex Analysis InstaForex Analysis 27.11.2022 14:33
Analyzing Friday trades: EUR/USD on 30M chart The EUR/USD trade was very boring on Friday. There were no important events or reports in the EU or the US. The market could not react to anything, and it seemed that the movement was more like a flat. To be honest, the whole week turned out to be very boring from a fundamental and macroeconomic perspective. Basically, traders only had some basis for certain trading decisions on Wednesday. However, most of the macroeconomic reports of that day were, to put it mildly, unimportant and were not really interesting. So traders had nothing to react to during the week. As a result, the euro managed to show growth, which again raises a lot of questions. I mentioned that it is possible to find a reason for this or that movement, but if the euro had two reasons to rise, and five reasons to fall, then is it reasonable to say that the euro is growing? It has crossed the uptrend line, but now the pair is more inclined to grow. The formal downtrend is not yet canceled, because the price has yet to cross the last local high near the level of 1.0465. Therefore, we are still waiting for a significant downward correction. EUR/USD on M5 chart Several trading signals were formed on the 5-minute chart. First, the price rebounded from the level of 1.0391 and managed to go up about 20 pips. Therefore, we managed to put Stop Loss to Breakeven on this trade, but no more than that. The price failed to reach the target level. Then a sell signal was formed near the same level (1.0391). In this case, the price was able to fall to the target level of 1.0354, and beginners gained around 15-20 pips using this signal. The rebound from 1.0354 was not bad, afterwards the price started a new spiral of upward movement and crossed the level of 1.0391, where it remained until the end of trading. Therefore, the long position had to be closed manually, and the profit was about 35 pips. As a result, the day ended with 50 pips of profit, which is very good for an absolutely "empty" Friday. Trading tips on Monday: The uptrend has been canceled on the 30-minute time frame, just as we predicted a week ago. However, the pair is struggling to continue its decline. I still think that both macroeconomic and fundamental backgrounds have been favorable for the euro in the past few days and weeks. That is why we keep waiting for the downward correction, as the uptrend has not officially resumed yet. On the 5-minute chart tomorrow, it is recommended to trade at the levels of 1.0156, 1.0221, 1.0269-1.0277, 1.0354, 1.0391, 1.0428, 1.0465, 1.0483, 1.0535, 1.0582. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. On Monday, European Central bank President Christine Lagarde will give another speech, which might be interesting. However, we don't think Lagarde's rhetoric has changed in recent weeks, so she probably won't say anything new. There is nothing of interest scheduled for the US. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.     search   g_translate     Relevance up to 07:00 2022-11-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328226
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The Technical Factors Speak In Favor Of The Pound's (GBP) Growth

InstaForex Analysis InstaForex Analysis 27.11.2022 16:25
Analyzing Friday trades: GBP/USD on 30M chart GBP/USD showed even worse movement than EUR/USD on Friday. If the euro showed at least some form of local movements during the day, then the pound was flat. Again, it is not surprising since there was no fundamental and macroeconomic background. The market fully worked out the news about the British Supreme Court's decision not to hold an independence referendum in Scotland without Westminster approval, so now we need new growth factors for the pound. As I mentioned before, the pound has plenty of technical reasons for its growth. We even have a clear uptrend line on the 30-minute chart, so the British currency's growth is justified, at least technically. The picture is approximately the same on the other charts as well. I still expect a downward correction, but in this case, the pound needs to settle below the trend line. GBP/USD on M5 chart On the 5-minute chart, all trading signals turned out to be false due to the flat movement. If beginners could not lose money using the first buy signal near the level of 1.2079, since the price passed 20 points that was required for a Stop Loss, then all subsequent signals were just simply unprofitable. It's a good thing that our trading system does not recommend traders to work out more than two signals near the same level if the first two turned out to be false. Therefore, beginners didn't make any loss or profit on the first trade, while the second one (settling below the 1.2079 level at the beginning of the US session) incurred only a small loss. Traders shouldn't have used the third and fourth signals. The daily volatility rate was about 70 pips which is very low for the pound. Trading tips on Monday: The uptrend is still maintained on the 30-minute time frame, which continues to be supported by the ascending trend line. We still believe that the pair will start falling in the next week or two, so we are waiting for the price to cross this line. However, till that day, we have to admit that the technical factors speak in favor of the pound's growth, though the fundamentals and macroeconomics do not always support the pound. On the 5-minute chart tomorrow, it is recommended to trade at the levels 1.1863-1.1877, 1.1950-1.1957, 1.1994, 1.2079, 1.2141, 1.2186-1.2205, 1.2245-1.2260, 1.2329-1.2337. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. On Monday, there are no important events or reports in the UK or the US, so it will probably be a boring day for the pair. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.   Relevance up to 07:00 2022-11-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328228
India’s Investing In Program For The Green Hydrogen Industry | Covid Situation In China Is Getting Serious

The "Zero Tolerance" Policy Is Costly Not Only To The Chinese Economy

InstaForex Analysis InstaForex Analysis 27.11.2022 16:29
The U.S. dollar index paused its "downward trek" on Thursday after traders played back the release of what they considered the dovish minutes of the Federal Reserve's November meeting. However, it's impossible to be objective about the dollar's behavior right now. Thanksgiving Day, which was celebrated in the USA, distorted the whole picture. U.S. trading floors were closed on Thursday and Wednesday was a short work day, much like Friday. On top of that, there was the "Friday factor" and low liquidity. But even in such conditions, the EUR/USD bulls still failed to settle within the 4th figure. Traders finished the trading week at 1.0398. Actually, at the limit of the fourth price level, however, this is exactly the case when "a little bit doesn't count". The bulls' failure to settle above the 1.0400 mark suggests that the price's growth was passive, after the release of the Fed's minutes. Low liquidity helped the bulls reach the limit of the 4th figure, however, it needed more growth factors in order to climb further. Whereas the current fundamental picture is rather in favor of the greenback. In my opinion, the vector of the EUR/USD movement will be set next week by the level of interest in risk and the dynamics of the main macroeconomic indicators. A decline in anti-risk sentiment can significantly weigh on the greenback - and vice versa, an increase in panic will allow the dollar bulls to open a second wind. China may play a key role here as we continue to receive alarming news. The coronavirus factor has emerged once again: China reported its third straight daily record of new COVID-19 infections. For example, 39,791 new cases of coronavirus have been identified on November 26. Around 32,943 cases were reported on Thursday. And that's a new all-time high since the pandemic began. In other words, there is serious cause for concern. China is the second largest economy in the world, but has a "zero tolerance" policy for COVID. Despite significant negative consequences (including for the global economy), Beijing is adamant on this issue. Only two years after the start of the pandemic, the PRC authorities made minor concessions - the mandatory quarantine for people in contact with COVID patients (as well as for foreign travelers) was reduced from 7 to 5 days. However, even this "light" easing of coronavirus restrictions was received with enthusiasm by many market participants. Interest in risk increased noticeably and the dollar came under pressure. By the way, during this period, in early November, the pair showed a large-scale corrective growth, approaching the limits of the 5th figure. Now, apparently, China is back to tightening the screws. For example, the city of Guangzhou (the largest port city with a population of 17 million) has been undergoing a partial lockdown, affecting about 6 million people. In the largest district of Beijing - Chaoyang - most companies have closed. In addition, authorities also shut down cultural and entertainment venues in Shanghai. Local authorities also urged people to work from home if possible. The "zero tolerance" policy is costly not only to the Chinese economy, but also hits the world economy. Supply chains are collapsing, shortages of some goods are growing, and the inflation flywheel is starting to unwind again. Next week, the situation in China could worsen. In particular, Shanghai authorities have now imposed compulsory testing for all those entering from other regions, as well as a three-day quarantine in isolation. If a strict lockdown is imposed in this metropolis in the coming days (as it was this spring), anti-risk sentiment in the markets will increase significantly. Shanghai, with a population of 25 million, is considered the financial capital of China, and it will not take long for such a move to have an impact. By the way, the spring lockdown in China contributed to the development of the downward trend of EUR/USD - in a few weeks the pair decreased by almost 500 points. Thus, alarming news from China may strengthen the position of dollar bulls next week. The minutes of the Fed, which was interpreted against the U.S. currency, has already exhausted itself. In general, the market played back the possible slowdown in the rate hike even before the release of the minutes of the November meeting. Therefore, we can assume that this topic will fade in the near future. The next focus is another question - how high the Fed's final rate can climb. After all, the fact that the Fed will slow down the rate hike does not indicate that the upper limit of the current cycle will be lowered. If members of the U.S. central bank sound hawkish signals in this context (essentially repeating Powell's rhetoric), the dollar will receive substantial support throughout the market. A new outbreak of Covid in China will only spur traders' interest in the safe-haven greenback. In this case, the pair could fall to the support level of 1.0210 (the lower limit of the Kumo cloud on the four-hour timeframe) in the medium term.     search   g_translate     Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328225
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

The Aussie (AUD) May Reach The Nearest Support

InstaForex Analysis InstaForex Analysis 28.11.2022 08:00
This morning, the Australian dollar decided to form a double top on the daily chart. The base of this figure is the nearest target level at 0.6595. Crossing the base sets the next target at 0.6370. But the price has two intermediate target levels on the way, from which there can be a correction at 0.6514/32, 0.6453. Disappointing data on retail sales for October, which showed -0.2% against expectations of growth of 0.5%, was the reason why the aussie has done such a drastic move. On the four-hour chart, the price settled below the MACD indicator line, went deep under the support of 0.6700, and the Marlin oscillator entered the negative territory. Complete downward movement. We expect progress, the aussie to reach the nearest support of 0.6595.     search   g_translate     Relevance up to 03:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328242
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The Price Of The GBP/USD Pair Tries To Cross The Support

InstaForex Analysis InstaForex Analysis 28.11.2022 08:04
A double divergence has already formed on the daily chart. If the price doesn't form a triple divergence, then it is already time for it to reverse to a medium-term decline. We can confirm such a reversal once the price has settled below the level of 1.1940. The UK retail sales change index for November will be released today - forecast is 2 vs. 18 in October. The data will help the price choose the direction according to our main scenario. Once it crosses 1.1940, then the price could reach 1.1737 target, and even 1.1500. On the four-hour chart, the price tries to cross the support at 1.1940. The MACD line is above this level. Accordingly, moving away from the level will correspond to the MACD line moving away from it as well. This will be the first, even so, a qualitative signal of the reversal. Also, the Marlin oscillator seems to move into negative territory before the price goes under support. The extended divergence is also putting pressure on the price.     search   g_translate     Relevance up to 03:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328244
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The Euro (EUR) Touched The Lower Shadow Of The Support

InstaForex Analysis InstaForex Analysis 28.11.2022 08:07
Last Friday, the euro touched the lower shadow of the support at 1.0360, this morning it did the same thing. The price needs to settle under this level so it can reach 1.0205, and it will form a double top on the daily chart. But the price is not in a hurry to do so. Therefore, if today closes with a white candle, then there is a high probability of a breakout of 1.0470 and a divergence may form with the Marlin oscillator. The situation on the weekly chart contributes to the divergence option - here we see that the MACD indicator line still hasn't been reached. But whether it will be reached or not, remains an intrigue. On the four-hour chart, the price crossed the MACD line on the descending Marlin oscillator. There was a similar transition on Friday, it was not reliable. Now, when the Marlin oscillator is involved, the price has a chance of settling under 1.0360. Watch the situation, for a signal for a short-term growth or a medium-term fall.   Relevance up to 03:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328246
The EUR/USD Price May Fall Under 1.0660

The Outlook Of The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 28.11.2022 08:11
Technical outlook: EURUSD dropped to the 1.0340 lows during the Asian session on Monday before finding interim support. The single currency pair is seen to be trading close to 1.0355 at this point in writing as the bulls looking forward to coming back in control. A high probability still remains for a push towards 1.0550 before turning lower again. EURUSD could be still unfolding into its last leg higher within the area of 1.0550-1.0600 before hitting resistance. Please note that 1.0600 is close to the Fibonacci 0.382 retracement of the larger-degree downswing between 1.2266 and 0.9535. The counter-trend rally, which began from the 0.9535 lows earlier, could be into its last phase before the bears are back in control. On the flip side, if a major low is in place at 0.9535, prices would continue further above the 1.0600 mark. But before this happens, a meaningful corrective drop needs to unfold towards 1.0000. It is also the Fibonacci 0.618 retracement of the rally between 0.9740 and 1.0481 levels as marked on the daily chart here. A break below 0.9740 would nullify the bullish outlook. Trading idea: Potential rally through 1.0550 against 1.0200 in the near term. Then lower again. Good luck!   Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/302674
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The British Pound (GBP) Is Likely To Make A Strong Technical Correction

InstaForex Analysis InstaForex Analysis 28.11.2022 08:14
Early in the European, session the British pound (GBP/USD) is trading around 1.2043. The currency pair is going through a slight technical bounce, having reached a low of around 1.2025. According to the 4-hour chart, we can see that the British pound has formed a bearish GAP around 1.2089 which was Friday's close. If GBP/USD bounces above the 21 SMA located at 1.2020, it could cover the gap and could reach the top of the downtrend channel around 1.2096. In case the British pound breaks above the downtrend channel formed on November 23 and settles above 1.2097, it will be a clear signal to resume buying and the price could reach +2/8 Murray located at 1.2207. Conversely, if GBP/USD breaks below the psychological 1.20 level, it could fall rapidly towards 1.1962 (+1/8 Murray) and could even reach the area between the support of 8/8 Murray (1.1718) and 200 EMA (1.1649). The eagle indicator is trading above a downtrend channel. A technical correction is expected in the next few hours and then the pair will resume its bullish cycle. Therefore, the British pound is expected to trade above the psychological 1.20 level, which will be a signal to continue buying. The strength of the US dollar (USDX), observed in the last hours of trading on Friday, was boosted by risk aversion, causing a reversal in GBP/USD. The British pound is likely to make a strong technical correction in the coming days due to overbought levels on the daily chart. According to the daily chart, we can see that the British pound has a 200 EMA located at 1.21. As long as GBP/USD trades below this level, any technical bounce will be seen as a clear signal to sell, with short-term targets around 1.1697. Our trading plan in the next few hours is to buy the British pound above 1.2035, with targets at 1.2096 and 1.2207 (+2/8 Murray). On the other hand, if the pound falls below the psychological level of 1.20, it will be a signal to sell with targets at 1.1650.     search   g_translate     Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/302680
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

Grow Of UK Growth Rates Can Help The Pound Sterling (GBP)

InstaForex Analysis InstaForex Analysis 28.11.2022 08:17
The GBP/USD currency pair finished the previous trading week with only a slight downward pullback. The British pound's growth has been a topic of discussion for the previous week, though it is not entirely unfounded. Recall that Scotland had asked to hold a referendum without London's formal approval, but the UK Supreme Court denied it. This information means there won't be a referendum anytime soon, saving the Kingdom from losing a significant portion of its territory and economy. This factor is very important, so traders could buy the pound based on it. Additionally, all technical factors are in unison favor of the upward movement. On the 24-hour TF, the price is above all of the Ichimoku indicator's lines and is situated above the moving average line. Additionally, both linear regression channels point upward. However, the growth over the last three weeks has raised some concerns because it has been too quick. We are not opposed to the pound's quotes rising further, but we think there should be a correction. Last week, we were expecting her, but the Supreme Court "ruined" everything. Also to be considered is the possibility of a strengthening of the pound due to inflation. Inflation also occurs globally, not just in the US or the UK. Inflation is still rising in Britain even though it has been slowing down in the US for a while. Therefore, growth rates in America may start to slow down, whereas they may (theoretically) continue to grow strongly and for a long time in the UK. This element can help the pound sterling, just as it did for the euro. Inflation in Britain is unlikely to begin to decline this month, even if it does in Europe. The focus is solely on non-farm payrolls. There won't be many noteworthy activities or publications in the UK this coming week. We can only single out a few speeches by Bank of England representatives that were spread out throughout the week, along with the Thursday release of the manufacturing sector's most important business activity index. There won't be much for traders to focus on. The United States is a different situation. Their calendar will also be empty for the first half of the week. The second estimate of GDP for the third quarter and the ADP report on changes in the number of employees in the private sector will be released on Wednesday, marking the beginning of everything. We should immediately state that we do not anticipate any of these reports to elicit a strong response. This is only the second estimate of GDP, which is not likely to differ significantly from the first estimate, and the ADP report rarely causes significant changes in the dollar. However, these reports might be intriguing from the perspective of comprehending the present state of the American economy. Jerome Powell will also speak on the same day, and his "pre-election" rhetoric can potentially boost or destabilize the market. Both significant data on the personal income and expenses of the American population as well as an important ISM business activity index for the manufacturing sector will be released on Thursday, December 1. The unemployment rate, non-farm payrolls, and average hourly wages will all be released on Friday. Non-Farm Payrolls are undoubtedly the most important report of the entire week. Experts predict it will be worth between $200 and $210 thousand in November, which may seem insignificant to traders. This is partially true—the indicator has been slowing for several months—but keep in mind that this slowdown occurred when the US economy rapidly recovered from the pandemic. From looking at Nonfarm values before the pandemic, it is clear that the normal value is only 200–300 thousand per month. What matters more is whether the forecast and the value will match. The US dollar may decline significantly if, for instance, we observe +100-150 thousand. It will become significantly stronger if it exceeds 230–240 thousand. As you can see, this week will be quite busy with significant events. Over the previous five trading days, the GBP/USD pair has averaged 118 points of volatility. This value is "high" for the dollar/pound exchange rate. Thus, we anticipate movement inside the channel on Monday, November 28, with movement being constrained by levels of 1.1972 and 1.2209. The Heiken Ashi indicator's upward reversal indicates that the upward movement has resumed. Nearest levels of support S1 – 1.2085 S2 – 1.2024 S3 – 1.1963 Nearest levels of resistance R1 – 1.2146 R2 – 1.2207 R3 – 1.2268 Trading Suggestions: On the 4-hour timeframe, the GBP/USD pair has begun a minor correction. Therefore, at this time, new buy orders with targets of 1.2146 and 1.2207 should be taken into account if the Heiken Ashi indicator reverses to the upside. When a price is anchored below the moving average, sell orders should be placed with targets of 1.1902 and 1.1841. Explanations to the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. Moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels – target levels for movements and corrections. Volatility levels (red lines) – the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 05:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328256
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

This Week In The European Union Will Be Mass Of Events That Could Cause A Market Response

InstaForex Analysis InstaForex Analysis 28.11.2022 08:23
On Friday, the EUR/USD currency pair traded extremely calmly, exhibiting no sudden movements, volatility, or trend. However, the pair ended the day above the moving average, and both linear regression channels point upward. Therefore, the development of the European currency is entirely justified from a technical standpoint. Another concern is that it is obvious that the macroeconomics and foundation do not provide the euro currency with enough support for it to grow almost continuously. But since this issue has already been brought up several times, there is nothing new to add now. As we have repeatedly stated, any fundamental hypothesis should be supported by specific technical signals. It is not worthwhile to test this hypothesis if there are no signals. We can wait as long as we like for a correction, but if the majority decides to buy the euro for any reason, there won't be one. However, a correction could still start soon. The fact is that there are currently no fundamental or macroeconomic justifications for the appreciation of the euro currency. Of course, they can be "discovered" or "invented," but if that doesn't happen, how can one explain, for instance, why the European currency increased last week? Whatever it was, we are still watching for the pair to fall and consolidate below the moving average line. The most intriguing report of the week concerns inflation in the EU. The situation will be more intriguing this week than it was last week because of the macroeconomic backdrop. The European Union will host Christine Lagarde's speech on Monday. With the ECB's final meeting of the year scheduled for December, her speeches are gradually regaining importance. The market currently anticipates an additional 0.75% rate increase because, even if inflation slows by the end of November, it is unlikely that it will be able to return to 2% at the same rate level. As a result, several more significant increases are necessary, as Vice-Chairman of the ECB Luis de Guindos discussed last week. Lagarde will likely use "hawkish" language, which could theoretically support the euro. The word "theoretically" is because the market is confident that the rate will continue to grow at its fastest rate even without Lagarde's new rhetoric. There are numerous reasons why the Fed needs to catch up. First, a higher rate abroad causes an imbalance in cash flow and investment. Money comes to the US. Second, a higher Fed rate causes the dollar to rise while the euro declines. Thirdly, a high rate is necessary to reduce inflation, which is still very high and must be done. Therefore, increasing it at the fastest possible rate is necessary since it is ineffective for the European regulator to "pull the rubber." The November inflation report will be released on Wednesday. The consumer price index is expected to slow to 10.3–10.4% y/y, which can be seen as the first step toward success, according to forecasts made by experts. Nevertheless, since this is only a prediction, it might not pass. And now for something interesting. Recall that a few months ago, the US dollar started to decline relative to its rivals when US inflation started to slow down. Since the beginning of the decline in inflation, the likelihood of further aggressive tightening of monetary policy by the central bank has decreased. It can be concluded that a decrease in inflation = a fall in the exchange rate of the national currency. The European currency could lose market support if inflation in the European Union starts to decline. The European Union will release its unemployment rate and business activity index (manufacturing sector) on Thursday. There will be more significant events this week than these reports in the present context. Luis de Guindos and Christine Lagarde will perform as usual on Friday. It's more intriguing this way. As a result, there will be a lot of intriguing events this week in the European Union alone that could cause a market response. As of November 28, the euro/dollar currency pair's average volatility over the previous five trading days was 86 points, considered "average." So, on Monday, we anticipate the pair to fluctuate between 1.0310 and 1.0482 levels. A potential continuation of the upward movement will be indicated by the Heiken Ashi indicator turning back to the top. Nearest levels of support S1 – 1.0376 S2 – 1.0254 S3 – 1.0132 Nearest levels of resistance R1 – 1.0498 R2 – 1.0620 R3 – 1.0742 Trading Suggestions: The EUR/USD pair is still above the moving average. In light of this, we should now consider long positions with targets of 1.0482 and 1.0498 if the Heiken Ashi indicator reverses direction and moves upward or the price recovers from the moving. Only after fixing the price below the moving average line with targets of 1.0254 and 1.0132 will sales become significant. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     search   g_translate     Relevance up to 05:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328254
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

The EUR/JPY Pair Continue To Look For More Downside Pressure

InstaForex Analysis InstaForex Analysis 28.11.2022 08:28
Our preferred scenario remains firmly in place. We continue to look for more downside pressure as the ending diagonal completed with the test of 148.30 and we are looking for a return to the origin of the ending diagonal at 132.66. Short-term, we would like to see a break below minor support at 142.56 as confirmation that the 5-wave rally from 114.42 indeed completed with the test of 148.30 and a corrective decline to 132.66 is unfolding.   Relevance up to 06:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/302686
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The GBP/JPY Pair Will Be Able To Protect The Upside

InstaForex Analysis InstaForex Analysis 28.11.2022 08:31
Our preferred count remains firmly in place here as we are looking for a continuation to support at 163.03. A break below here will confirm our outlook for a corrective decline to 150.09 and likely even closer to the 61.8% corrective target at 145.76 before the correction from 168.43 finally comes to an end and a new impulsive rally should be expected. Short-term we see resistance near 167.79 which we expect will be able to protect the upside for a continuation lower towards 163.03 and ultimately below here too.   Relevance up to 06:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/302688
The EUR/USD Pair Maintains The Bullish Sentiment

The Price Of EUR/USD Pair Broke Through The Trend Line

InstaForex Analysis InstaForex Analysis 28.11.2022 08:33
M5 chart of EUR/USD During the last trading day of the week, the euro/dollar pair entered a bearish correction after a steep growth of the past several days. As a reminder, the price settled below the ascending trend line. However, it failed to settle below the Senkou Span B, and later on the euro also returned above the critical line. But it failed to update its local high of November 15, which suggests that the downtrend was cut short, which is now far from being evident. Nevertheless, we could anticipate a correction because the uptrend line has been crossed. There were no important and high-profile events in the EU and the U.S. on Friday, as well as during most of the past week. It may well be that the euro's growth was not quite logical again (although the right reasons can be "found", of course), so we still expect the EUR/USD to go down. There is not much to say about Friday's technical signals, since there was only one throughout the day. At the beginning of the US session, the pair rebounded from the 1.0366-1.0340 area, so traders could open long positions there. It hardly made much profit, but you could earn around 20-30 pips, which is not bad either, considering the weak volatility and since there was almost no trend. COT report As for Commitment of Traders (COT) reports in 2022, they reflected bullish sentiment in the first six months of the year although the euro was bearish. Then, they illustrated bearish sentiment for several months with the euro being also bearish. Currently, the net position of non-commercial traders is again bullish and increasing. Meanwhile, the euro has hardly retreated from its 20-year lows. This is due to the fact that demand for the greenback is high amid a difficult geopolitical situation in the world. Therefore, despite a rise in demand for the euro, buoyant demand for the dollar does not allow the euro to strengthen. During the reporting week, the number of long positions held by non-commercial traders rose by 7,000 and that of short positions increased by 2,000. Consequently, the net position advanced by 5,000. The euro's recent growth is gradually coming in line with the figures illustrated in the COT report. Still, the greenback may resume growth under the influence of geopolitical factors or the lack of factors for further strengthening in the euro. The green and red lines of the first indicator moved far away from each other, which may indicate the end of the uptrend. The number of long positions exceeds that of short positions by 113,000. Therefore, the net position of non-commercial traders may continue to rise further, but without triggering a similar rise in the euro. When it comes to the total number of longs and shorts across all categories of traders, there are now 39,000 more short positions (635,000 vs 596,000). H1 chart of EUR/USD In the H1 time frame, EUR/USD tried to resume the uptrend, but stopped just before it updated its previous local high. Although the price broke through the trend line, fundamental factors provide little support for the euro, the market has not yet found any reason to sell, which we are waiting for. Anyway, we are still anticipating a strong bearish correction. On Monday, the pair may trade at the following levels: 1.0124, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as Senkou Span B lines (1.0207) and Kijun Sen (1.0336). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On November 28, European Central Bank President Christine Lagarde will give a speech; however, all of the central bank's representatives are now in favor of further rate hikes, which traders are absolutely ready for. Lagarde may have something important to say (in theory) but the market is probably ready for that. Nothing of interest in America. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate     Relevance up to 05:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328250
The Downside Of The US Dollar Index Remains Limited

The US Dollar Index Might Be One More Low Away

InstaForex Analysis InstaForex Analysis 28.11.2022 08:36
Technical outlook: The US dollar index rose through the 106.15 high during the early Asian session on Monday before hitting resistance. The index has eased off a bit and is seen to be trading around 106.00 at this point in writing. The bears might be inclined to be back in control and drag prices lower towards 104.30 which is the next-in-line support. The US dollar index might be one more low away before turning bullish again above the 114.67 mark. The larger-degree corrective drop, which began from 114.67 earlier, either looks complete at 104.90 or it could print another low around 104.30 as highlighted here on the 4H chart. Either way, it is just a matter of time before the bulls are back in control. The US dollar index is facing resistance at 107.65, followed by 110.65 and higher; while support is seen around 114.30 levels. The bears might be looking to break below 104.30 and complete the corrective pattern before giving in to the bulls. On the flip side, a break above 107.65 would confirm and accelerate the climb towards 110.65 at least, in the near term. Trading idea: Potential drop to 104.30 against 107.65, then higher. Good luck! Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/302694
The GBP/USD Pair May Trade Horizontally Today

The Price Of Cabel Market (GBP/USD Pair) Resumed The Uptrend

InstaForex Analysis InstaForex Analysis 28.11.2022 08:43
M5 chart of GBP/USD The GBP/USD started a miniscule correction on Friday. On the one hand, there was no reason for it to sharply fall since there was no fundamental or macroeconomic background. On the other hand, the British pound significantly grew in recent weeks, so a technical correction would be logical. However, last week the U.K. Supreme Court gave unexpected and negative support to the British pound by rejecting Scotland's request to hold an independence referendum in 2023. The court ruled that Scotland's parliament does not have the legislative competence to hold a "consultative referendum" on independence next year, which Nicola Sturgeon was supposed to hold in September 2023 to understand what percentage of the country's population supports "Scexit". However, this event has already been worked out by the market, so now nothing can stop the pound from entering a correction. This week, all the main events are in the second half of the week. Settling below the ascending trend line may signify the long-awaited downward movement. When it comes to trading signals on Friday, the 5-minute chart shows that it was very complicated and confusing. The pair was flat in the Asian and European sessions, and the general volatility of the day was very low. There was no trend movement, so no wonder there were a lot of signals around the 1.2106 level. Naturally, all of them turned out to be false. Therefore, traders could try to use one or two of the first signals, most likely, they got a loss on those trades, after which trading should have been stopped, since the first two signals were definitely false. Even Stop Loss could not be set to breakeven on them. COT report The latest Commitment of Traders (COT) report on GBP logged a slight decrease in bearish sentiment. In the given period, the non-commercial group closed 1,900 long positions and 8,800 short positions. Thus, the net position of non-commercial traders increased by 7,000. The net position is gradually growing during the last months, but the sentiment of the big players is still bearish. The pound has been rising in recent weeks, but so far it does not seem that it is preparing for a long-term uptrend. And, if we remember the euro's situation, then based on the COT reports, we can hardly expect a surge in price. The demand for the US currency remains very high, and the market, as it seems, is just waiting for new geopolitical shocks so it can return to buying the dollar. The non-commercial group now has a total of 67,000 shorts and 34,000 longs opened. As we can see, there is a wide gap between them. As it turns out the euro is now unable to show growth when market sentiment is bullish. When it comes to the total number of long and short positions, here bulls have an advantage of 17,000. Still, this is not enough for the sterling to increase. Anyway, we are still skeptical about the pound's long-term growth although the technical picture shows otherwise. H1 chart of GBP/USD The price resumed the uptrend on the one-hour chart, and it still doesn't cause any questions or doubts. However, we still believe that the British currency has grown too much in recent weeks, which is not quite in line with the fundamental and macroeconomic background. So we expect that the pair will cross the trend line and fall. On Monday, the pair may trade at the following levels: 1,1760, 1,1874, 1,1974-1,2007, 1,2106, 1,2185, 1,2259, 1,2342. The Senkou Span B (1.1680) and Kijun Sen (1.1963) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. There are no important events or reports for Monday in the UK and the USA. Therefore, traders will have nothing to react to. The pair can continue to correct and the movement may not be strong, as all the most important events are scheduled for the second half of the week. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 05:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328252
FX Daily: Asymmetrical upside risks for the dollar today

FX: Data In The US This Week May Deliver A Little Support To The US Dollar (USD)

ING Economics ING Economics 28.11.2022 09:09
A very inverted US yield curve and Brent crude trading down near $80/bbl tell us that markets are growing more concerned about global demand trends. And uncertainty in China does not help either. We feel scheduled events and data in the US this week may also deliver a little support to the dollar. In general, we favour defensive positions in FX this week In this article USD: Fed-speak, prices and employment to dominate EUR: Waiting for the next inflation print GBP: Settling down CEE: Hungary remains topic number one     USD: Fed-speak, prices and employment to dominate The week starts with a focus on events in China as local authorities struggle to battle rising daily case numbers and enforce lockdowns. While a disorderly exit from China's Covid Zero policy could ultimately prove a positive for global demand, getting to that point will be an exceptionally bumpy ride for the world's financial markets. As it stands currently, events in China are being read negatively for demand trends, where for example Brent crude and industrial metal prices are under pressure. Brent at $80/bbl is a little surprising given what should be the 2mn barrel per day production cut undertaken by OPEC+ this month.  Another big read for global demand trends is the shape of the US Treasury yield curve. The current 2-10 year inversion of the curve to -80bp is exceptional and aptly reflects investors' views that recession is coming but the Fed will not be cutting rates anytime soon. On the subject of the Fed, the week ahead sees Federal Reserve Chair Jerome Powell speaking on Wednesday evening (hawks James Bullard and John Williams speak tonight also). Currently, we would pin Chair Powell to the hawkish end of the Fed spectrum and our colleague, James Knightley, thinks Chair Powell this week could push back against the recent (and perhaps premature in the Fed's mind) easing of financial conditions.  In addition to Fed-speak, the US data calendar picks up again this week, with readings on house prices, confidence, PCE inflation and Friday's release of the November jobs report. The more important data releases come on Thursday and Friday, where any uptick in the core PCE price data or strong job numbers could support potentially hawkish rhetoric from Chair Powell and send US yields and the dollar higher again. As we outlined in our 2023 FX Outlook, we just do not see conditions in place for a benign dollar bear trend - even though the buy-side is desperate to put money to work away from the dollar. Seasonally, the dollar is weak in December, but our call is that this year, the dollar can strengthen into year-end. We continue with the view that any weakness in DXY towards the 105.00 area this week (DXY now 106.18) will prove short-lived and favour a return to 108-110 into year-end. Chris Turner EUR: Waiting for the next inflation print The highlight of the eurozone data calendar this week will be November price data - released for Germany tomorrow and for the eurozone on Wednesday. The question is whether inflation will fall back from the highs (not far from 11% year-on-year) and allow the European Central Bank to potentially soften its hawkish rhetoric a little. Currently, the market prices a 62bp rate hike on 15 December.  EUR/USD is consolidating at higher levels - having been buoyed by the 20% recovery in European equity markets amidst declining energy prices. Equally, business confidence has been holding up a little better than expected. We cannot rule out EUR/USD trading back up to the 1.0480/1.0500 area again (though the reasons for that are far from obvious) but reiterate that the second half of the week could potentially push EUR/USD back to the 1.02 area. Chris Turner GBP: Settling down Three-month GBP/USD traded volatility prices are now under 12% having been near 19% in late September. Clearly, sterling trading conditions have settled down even as recession expectations solidify. Our view is that these GBP/USD gains will not last and we would not be surprised to see fresh selling interest emerging near the 200-day moving average at 1.2177 or at best the 50% retracement of the 2021-22 drop - at 1.2300.  The current inversion in yield curves around the world does, for a change, look to be a likely harbinger of recession. And with its large current account deficit, sterling should be expected to remain vulnerable. The UK data calendar is light this week, but there are a few Bank of England (BoE) speakers who may reiterate hawkish leanings. The market currently prices a 52bp BoE rate hike on 15 December. Chris Turner CEE: Hungary remains topic number one The Central and Eastern Europe (CEE) region will become more interesting in the second half of the week, while today and tomorrow will be more about global numbers. On Wednesday, Poland will see the release of inflation for November and a detailed breakdown of 3Q GDP, which positively surprised a couple of weeks ago in the flash estimate (0.9% quarter-on-quarter). Of course, given the pause in the central bank hiking cycle, the CPI print will get a lot of market attention. We expect an unchanged 17.9% YoY reading, more or less in line with market estimates. On Wednesday, we could hear something new from the European Commission (EC) on Hungary, progress with the rule-of-law and access to EU funds. Thursday will see the release of PMI indicators across the region. While we expect a rebound from the lows in Poland and the Czech Republic, we forecast a drop below the 50-point level in Hungary. Also on Thursday, the 3Q GDP breakdown will be published in Hungary, which was the only country in the region to surprise negatively in the flash reading (-0.4% QoQ). On Friday, the Czech Republic will also release the detail of 3Q GDP, which was -0.4% QoQ in the first estimate as the market expected.  In the FX market, conditions for the CEE region improved again last week. The dollar index touched new lows and sentiment improved again in Europe. On the other hand, local conditions remain negative. Interest rate differentials across the region have reached new lows again in recent days. This week, we see a chance for a reversal in the US dollar and a reality check inflation story at the global and regional level, resulting in negative pressure on the region. The European Commission decision will be a key market mover for the Hungarian forint. Although last week's news was mixed, we see it as rather positive. Thus, confirmation that Hungary no longer faces a permanent loss of EU funds should help the forint move back closer to 405 EUR/HUF. Inflation in Poland will be key for the zloty and the possibility for the market to reassess the priced-in cuts next year, which could add short-term support for the zloty. However, we see the zloty as the most vulnerable to the global story at the moment, so we remain bearish. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The EUR/USD Pair Chance For The Further Downside Movement

British pound down amid revised PPI print. Euro decreased as ECB "played down wage pressure"

Jing Ren Jing Ren 28.11.2022 08:44
GBPUSD to test major ceiling The pound holds onto its gains after the PPI for October was revised upwards. As the pair approaches the August high of 1.2270, a bearish RSI divergence is a warning sign that the rally may be running out of juice. Profit-taking could be expected in this major supply area while those who hold a bearish view in the medium-term may look to sell. However, a bullish breakout could pave the way for a reversal. 1.2020 is the first support should Sterling start to drift lower and 1.1900 another level to gauge followers’ interest. EURCHF awaits breakout The euro softened after ECB officials played down wage pressure. Following a break above September’s high of 0.9830, the euro has found robust support over 0.9720. Then higher lows show rising interest in keeping the pair afloat. 0.9890 is a major resistance to clear before the rebound could break free. A rally above the recent peak of 0.9950 would put the single currency on a bullish trajectory in the weeks to come. On the downside, 0.9760 is the support to monitor in case hesitation leads to a prolonged sideways action. Read next: For Europe, The Outlook Is Even Bleaker – EU CPI Can Reach 10.7%| FXMAG.COM GER 40 hits critical resistance The Dax 40 steadies over upbeat German Q3 GDP. The RSI’s overbought condition is a sign of overextension. As the index tests June’s high of 14700, short-term traders may look to trim their exposure. 14370 is the first support and its breach might give buyers an excuse to bail out. Then 14150 at the confluence of a recent daily low and the 20-day moving average would be a key level to prevent broader liquidation. On the upside, a break above the ceiling could lay the groundwork for a bullish reversal in the medium-term.  
Economic Calendar Details and Trading Analysis - August 7 & 8

India’s Q3 Gross Domestic Product (GDP) Figures Will Be Crucial For The USD/INR Traders

TeleTrade Comments TeleTrade Comments 28.11.2022 09:29
USD/INR retreats from intraday high as softer oil prices favor INR bulls. Covid woes weigh on the market sentiment as traders begin the key week. India’s Q3 GDP will be crucial ahead of Fed Chair Powell’s speech, US NFP. USD/INR remains directionless around 81.70 as it drops from the intraday high during early Monday morning in Europe. In doing so, the Indian Rupee balances the positives from downbeat oil prices to the negatives emanating from China. WTI crude oil renewed the yearly low around $73.90, near $74.10 by the press time, as fears of increasing supply and less demand, mainly due to the Covid woes, join woes surrounding a limit on Russian oil prices. It should be noted that the record-high daily virus infections from China and the protests to ease the Zero-Covid policy seemed to challenge the market sentiment of late. On the same line could be the recently downbeat data from Beijing. China’s Industrial Profit dropped to -3.0% during the January to October period versus -2.3% marked for the January-September era. Reuters mentioned, “Infections rose as hundreds of demonstrators and police clashed in Shanghai on Sunday night as protests over China's stringent COVID restrictions spread to several cities.” The news also quotes China’s National Health Commission to report a fifth straight daily record of 40,347 new COVID-19 infections on Nov. 27, of which 3,822 were symptomatic and 36,525 were asymptomatic. Amid these plays, the US stock futures drop nearly 0.70% while the US 10-year Treasury yields fall nearly two basis points (bps) to 3.65% by the press time. Moving on, India’s third quarter (Q3) Gross Domestic Product (GDP) figures, expected 2.6% YoY versus 13.5% prior, will be crucial for the USD/INR traders to watch on Wednesday amid economic fears. Following that, a speech from the Federal Reserve (Fed) Chairman Jerome Powell and the United States' monthly employment data for November, up for publishing on Thursday and Friday respectively, will be the key to fresh impulse. Technical analysis A daily closing beyond the 21-DMA hurdle surrounding 81.70 appears necessary for the USD/INR bulls to retake control.
The USD/CHF Pair Is All Set To Revisit The Monthly Low

The US Dollar To Swiss Franc Pair (USD/CHF) May Remain Firmer

TeleTrade Comments TeleTrade Comments 28.11.2022 09:39
USD/CHF prints three-day uptrend as sour sentiment underpins US Dollar. China-linked woes join pre-data anxiety to favor USD/CHF bulls. Swiss Q3 GDP, Fed Chair Powell’s speech and US NFP are the key calendar events. Headlines surrounding China are also important for clear directions. USD/CHF retreats from intraday high but stays on the bull’s radar for the third consecutive day, near 0.9465 heading into Monday’s European session. In doing so, the Swiss Franc (CHF) pair portrays the market’s risk-off mood ahead of the key data/events scheduled for publishing this week. Although alleged defense from Chinese authorities to safeguard equities appeared to trigger the USD/CHF pair’s latest pullback, the broad risk-aversion wave, due to the Covid fears, seems to keep the pair buyers hopeful. That said, the record-high daily virus infections from China and the protests to ease the Zero-Covid policy seemed to challenge the market sentiment of late. On the other hand, the cautious mood ahead of Switzerland’s third quarter (Q3) Gross Domestic Product (GDP), expected to grow by 1.0% YoY versus 2.8% prior growth, also seemed to have favored the USD/CHF bulls of late. Elsewhere, hopes that Federal Reserve Chairman Jerome Powell may sound hawkish during his firmer publish appearance since the November meeting, while also signaling the easy rate hikes, appear to have offered additional strength to the USD/CHF bulls. Furthermore, a record high online shopping by US citizens on Black Friday favored the US Dollar to pare recent losses. “US shoppers spent a record $9.12 billion online this Black Friday, a report showed on Saturday, as consumers weathered the squeeze from high inflation and grabbed steep discounts on everything from Smartphones to toys,” mentioned Reuters. Against this backdrop, US stock futures are down 0.70% intraday and the key Treasury bond yields also extend the latest south-run. Given the recent risk-off mood, the USD/CHF may remain firmer unless the Swiss GDP offers a positive surprise. Technical analysis A clear upside break of the two-week-old descending trend line, around 0.9450 by the press time, keeps the USD/CHF bulls hopeful of visiting the 200-DMA hurdle of 0.9636.      
The Japan Central Bank’s Decision Sent The Yen (JPY) Sliding

The Worsening COVID-19 Situation Drives Haven Flows Towards The Japanese Yen (JPY)

TeleTrade Comments TeleTrade Comments 28.11.2022 09:45
USD/JPY meets with a fresh supply on Monday amid reviving demand for the safe-haven JPY. The narrowing of the US-Japan rate differential also underpins the JPY and weighs on the pair. A modest USD strength could offer some support to the major and help limit any further losses. The USD/JPY pair struggles to capitalize on Friday's modest bounce and comes under some renewed selling pressure on the first day of a new week. The pair maintains its offered tone through the early European session and is currently flirting with the daily low, around the 138.30-138.25 region. The worsening COVID-19 situation drives haven flows towards the Japanese Yen, which is seen exerting downward pressure on the USD/JPY pair. In fact, China reported a record-high number of daily infections on Saturday, forcing the government to impose strict anti-COVID measures in several cities. Moreover, public discontent over the zero-COVID policy flared protests across China and raises concerns about a further slowdown in economic activity. This, in turn, keeps investors on the edge and boosts demand for traditional safe-haven assets. The flight to safety, along with growing acceptance of a less aggressive policy tightening by the Fed, continue to drag the US Treasury bond yields lower. This results in the further narrowing of the US-Japan rate differential, which provides an additional lift to the Japanese Yen. That said, a modest US Dollar strength extends some support to the USD/JPY pair. This, along with a big divergence in the monetary policy stance adopted by the Federal Reserve and the Bank of Japan, could help limit any further losses, at least for the time being. Despite a dovish assessment of the November FOMC meeting minutes, the US central bank is still expected to deliver another 50 bps rate hike in December. In contrast, BoJ, so far, has shown no inclination to hike interest rates. Moreover, BoJ Governor Haruhiko Kuroda reiterated that the central bank will stick to its monetary easing to support the economy and achieve the 2% inflation target in a stable fashion. In the absence of any relevant economic data, this warrants caution before placing fresh bearish bets around the USD/JPY pair.  
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The Reserve Bank of New Zealand's (RBNZ) Decision Supports Prospects For The Emergence Of Some Dip-Buying Around The NZD/USD Pair

TeleTrade Comments TeleTrade Comments 28.11.2022 09:52
NZD/USD remains under some selling pressure for the second successive day on Monday. A weaker risk tone benefits the safe-haven greenback and weighs on the risk-sensitive Kiwi. Bets for less aggressive Fed rate hikes cap the USD upside and help limit losses for the pair. The NZD/USD pair opens with a modest bearish gap on Monday and retreats further from its highest level since August 18 touched last week. The pair remains depressed through the early European session and is currently placed around the 0.6200 mark, just a few pips above the daily low. The global risk sentiment took a hit amid a wave of protests in China over the government’s zero-COVID policy, which has been fueling concerns about a deeper economic downturn. The anti-risk flow extends some support to the safe-haven US Dollar and turns out to be a key factor dragging the NZD/USD pair lower for the second straight day. That said, the prospects for a less aggressive policy tightening by the Fed keep a lid on any further gains for the greenback and should help limit losses for the major. It is worth recalling that the minutes of the November FOMC meeting released last Wednesday showed that most policymakers agreed it would soon be appropriate to slow the pace of rate hikes. Furthermore, the markets are now pricing in a greater chance of a relatively smaller 50 bps lift-off at the December FOMC meeting. This is reinforced by the ongoing downfall in the US Treasury bond yields, which should hold back the USD bulls from placing aggressive bets and lend some support to the NZD/USD pair. Apart from this, an unprecedented 75 bps rate hike by the Reserve Bank of New Zealand (RBNZ) last week supports prospects for the emergence of some dip-buying around the NZD/USD pair. This, in turn, makes it prudent to wait for strong follow-through selling before positioning for a deeper pullback. In the absence of any relevant economic data, traders on Monday will take cues from speeches by influential FOMC members - St. Louis Fed President James Bullard and New York Fed President John Williams.  
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The Bank Of Canada (BoC) Disappointed The USD/CAD Bears

InstaForex Analysis InstaForex Analysis 28.11.2022 10:13
The loonie's fate is in the hands of the Canadian central bank. There are increasing speculations that the Bank of Canada will slow the pace of its rate hike again at the next meeting, raising it only by 25 points. Such rumors of a dovish nature are not absolute, but very persistent. In particular, last week currency strategists of RBC Capital Markets voiced a corresponding forecast. Moreover, in their opinion, the central bank as a whole is already close to the end of the cycle of interest rate hikes. Judging by the pair's dynamics, the loonie is not in a hurry to draw conclusions, although such conversations have stopped the downtrend. Thus, in the first half of November, the bears tried to stay under the support level of 1.3260 (at that time it corresponded to the bottom lines of the Bollinger Bands indicator on the D1 and H4 time frames) several times. But after the bears impulsively broke through this limit, they got stuck near the level of 1.3230. The downward momentum faded, the price returned to its previous positions. After several unsuccessful attempts, the USD/CAD bears intercepted the initiative, but the controversial FOMC minutes did not allow them to launch a bullish counter-offensive. The pair finished the previous trading week at 1.3376. This week the pair's traders will focus not only on Friday's reports (the U.S. and Canada will release key labor market data on December 2). The main "test" for the loonie will be the Canadian economic growth data which will be released on Tuesday (November 29). According to preliminary projections, Canada's GDP will only grow by 1.5%. Even if the figure comes out at the forecasted level, we could talk about a significant slowdown in the growth rate of the economy (3.1% growth in the first quarter, and 3.3% in the second quarter). If the release is in the red zone, the Canadian dollar will be under considerable pressure. Because in this case the dovish rumors about further actions of the Bank of Canada will only strengthen. The official comments of the central bank's representatives so far have been contradictory. For example, Bank of Canada Governor Tiff Macklem has recently sounded very vague about how Canadians should be prepared for further rate hikes "in addition to the six that have already occurred this year". He lamented the tight labor market ("demand exceeds supply") and suggested that economic growth will be "minimal" over the next few quarters, until about the middle of next year. But he did not talk about the expected pace of rate hikes or the final point in the current cycle. At the same time as the senior deputy governor of the Bank of Canada Carolyn Rogers reported that the end of the cycle of tightening of monetary policy is "already close". She added, however, that "in the near future" there is still a need to raise interest rates to reduce inflation. I would like to point out that the Bank of Canada disappointed the USD/CAD bears at its last meeting in October: contrary to expectations of most experts, it did not raise the interest rate by 75 points, limiting itself to a 50-point hike. According to Macklem, the decision to slow the pace of policy tightening was made "amid growing fears of a deepening global economic downturn". He added that the central bank is trying to balance the risks of "under- and over-tightening". Macklem said in passing that the central bank was "nearing the end of its rate-hike cycle". And although he immediately clarified that the process of raising the rate has not yet been completed, the message itself was perceived by the market accordingly. Thus, this week's key releases (especially Canadian GDP growth) will decide the fate of the USD/CAD pair in the medium term, as the Bank of Canada will be guided by them on December 7. The slowdown in economic growth, the decline in the labor market amid the first signs of easing inflationary pressures in recent months will create an appropriate springboard for a further slowdown in the pace of monetary tightening by the central bank. These circumstances will also support the view that the Bank of Canada may be nearing the end of its current interest rate hike cycle. A 25-point rate hike at the December meeting would then be the "first swallow" announcing the unwinding of the hawkish course. The U.S. Federal Reserve, for its part, remains hawkish despite a planned slowdown in the pace of rate hikes. Moreover, some Fed officials, most notably Fed Chairman Jerome Powell, allow the possibility that the upper limit of the current cycle could exceed the 5% level. In particular, not so long ago James Bullard spoke about an indicative target of 5.25%. At the same time, many members of the Committee are actively voicing the message that inflation is still high (despite the first signs of slowing growth), and therefore the Fed has "a lot of work to do". All this suggests that the fundamental picture on the pair is gradually progressing in favor of the bullish scenario. If the major macroeconomic releases disappoint the loonie, the bulls may retest the nearest resistance level of 1.3450 (middle line of the Bollinger Bands indicator on the daily chart). Last week, the USD/CAD bulls already tried to take this price barrier by storm, but in vain. The next (main) resistance level is located at 1.3700 (the upper line of the Bollinger Bands on the same timeframe). However, it is too early to talk about reaching this target.     search   g_translate     Relevance up to 22:00 2022-11-28 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328240
The Melbourne Institute Inflation Gauge For Australia Rose More Than Expected

Australia's Economy Is Doing Fine With Rising Rates And Coping With High Inflation

InstaForex Analysis InstaForex Analysis 28.11.2022 12:04
The Australian dollar fell after the RBA governor said Australia had a better chance of a soft landing of the economy than any other developed country. First of all, Philip Lowe drew attention to a fairly successful effort to curb wage growth in the country, allowing inflation to stay well within the limits set by the regulator. Om Monday, Philip Lowe spoke before the Senate estimate hearing in Canberra. In regard to achieving a soft landing for the economy, he said, "it's not guaranteed but where I sit today, I think we have a better chance than most other countries of pulling it off." He added that the best outcome for Australia would be for wages to pick up as they have, but not go too much further. The wage growth in Australia is now at a weaker rate than in other countries, which will allow the governor to count on a quick victory over inflation once the world situation stabilizes. As Lowe explained, the difference with other countries on this issue stemmed from the fact that the RBA was the first central bank to reduce the pace of interest rate hikes to a quarter percentage point at its last two meetings. The central bank is expected to raise interest rates to 3.1% next week from the current 2.85%, as it does not want to ignore the experience of its counterparts in trying to contain high inflation and bring it back under control. Australian policymakers have created plenty of room to operate, saying they are open to resuming a half-point rate hike if it is necessary. Currently, the RBA predicts that inflation will peak at 8% this year and then decline to 3.25% at the end of 2024. When asked if markets still trust the central bank's policy, the governor said that they did trust. Lowe pointed to the expected inflation rate accounted for by the financial markets over the next five years, which shows that prices in Australia are likely to return to the RBA's 2-3% target range. "That implies the people putting money on the line do trust the RBA," he said. The RBA governor also stressed that he was closely monitoring electricity prices and the situation around the housing market, which is one of the first to respond to high interest rates and points to the possibility of a tipping point in the economy. In his opinion, the situation in the real estate market is now in perfect order and there is no reason to worry. "If we can address those two issues then that will make a substantial contribution in bringing inflation back down over the next couple of years," Lowe told the Senate. He also noted that Australia's economy with a A$2.2 trillion turnover was doing fine with rising rates and coping with high inflation, although recent data suggested that cost-of-living growth was starting to decline. According to the latest data, retail sales in Australia fell by 0.2% in October, the first drop this year, with turnover in all sectors except food also falling sharply this month. This is in addition to weakening consumer confidence and declining real estate prices. Such changes are not surprising, as inflation-adjusted wages are at their lowest level in 11 years, indicating that households are not doing as well as they used to.   Relevance up to 08:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328298
Further Upward Price Movement Of The AUD/USD Pair Is Expected

Australian Dollar (AUD) Is Particularly Sensitive To Developments In China

Kenny Fisher Kenny Fisher 28.11.2022 12:18
The Australian dollar has started the trading week with sharp losses. AUD/USD is down 0.70% in Europe, trading at 0.6704. China jitters send Australian dollar tumbling Covid cases continue to rise in China despite the government’s zero-Covid policy, and the mass lockdowns have triggered protests across China. The demonstrators have clashed with police and some have even called for Chinese President Xi to step down. The scale of the unrest has sent jitters through the global markets, which are expected to cause new supply-chain issues and chill domestic demand. The unrest in China has put a damper on risk appetite and sent the US dollar higher. The Australian dollar is particularly sensitive to developments in China, as the Asian giant is Australia’s number one trading partner. The Australian dollar fell more than 1% earlier today but has pared some of those losses. Still, if there is further negative news out of China, the Aussie will likely lose more ground. Adding to the Australian dollar’s woes was a soft retail sales report for October. Retail sales fell 0.2% MoM, down from 0.6% in September and below the consensus of 0.4%. It was the first decline since December 2021 and will renew concerns that the domestic economy is slowing down due to the Reserve Bank of Australia’s steep rate-hike cycle. The RBA has eased the pace of hikes but remains wary of a wage-price spiral, and  Governor Lowe has warned that the central bank will not hesitate to return to oversize rate hikes if needed. After an abbreviated week due to the Thanksgiving holiday, it’s a busy week for US releases. CB Consumer Confidence will be released on Tuesday, with the November report expected to dip to 100.0, down from 102.5. The key release of the week is nonfarm payrolls on Friday, which could have a major impact on the Fed’s decision to raise rates by 50 or 75 basis points at the December 14th meeting. Currently, the likelihood of a 50-bp hike is about 75%, versus 25% for a larger 75-bp increase.   AUD/USD Technical AUD/USD is testing support at 0.6706. Below, there is support at 0.6633 There is resistance at 0.6820 and 0.6903 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Steady BoE Rate Expectations Amid Empty Event Calendar in the UK

Saxo Bank Podcast: Protests In China, Lower Yields, Lower Crude Oil, Apple Risks A Further Haircut On The Risk And More

Saxo Bank Saxo Bank 28.11.2022 12:24
Summary:  Today we look at how the market is absorbing the news of widespread protests in China against Covid policies there, from lower yields to lower crude oil prices. That combination offers strong support for the Japanese yen, while Apple risks a further haircut on the risk of widening production disruptions. It is worth noting that corn prices in China are diverging from prices elsewhere, also on Covid policy disruptions. Elsewhere, we consider the status of "de-globalization" (or is it re-globalization?), and look at incoming earnings and macro calendar events for the week ahead. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-nov-28-2022-28112022
The USD/JPY Price Seems To Be Optimistic

Bank Of Japan Governor Kuroda Said That The Tightening Labour Market Will Push Wages Higher

Kenny Fisher Kenny Fisher 28.11.2022 14:10
After strong gains last week, the Japanese yen has extended its gains on Monday. USD/JPY is trading at 138.23 in the European session, down 0.67%. Yen jumps on China unrest China has applied its Covid-zero policy with a heavy hand, but Covid cases continue to rise nonetheless. The mass lockdowns have triggered widespread protests, which some injuries reported. The unrest is likely to exacerbate supply-chain disruptions and dampen domestic demand, which has hurt risk appetite. This has resulted in flows to haven assets, such as the Japanese yen. USD/JPY dropped as much as 1% earlier today, but the dollar has managed to recover some of these losses. The yen also received a boost after Bank of Japan Governor Kuroda said that the tightening labour market will push wages higher. Kuroda has long insisted that rising inflation has driven by import costs and the weak yen and is transient. Higher wages would indicate that inflation is sustained, which could result in the BoJ making some changes in its ultra-loose policy. After a short trading week in the US due to the Thanksgiving holiday, the markets will have plenty of US events to digest this week. CB Consumer Confidence will be released on Tuesday, with the November report expected to dip to 100.0, down from 102.5. The key release of the week is nonfarm payrolls on Friday, which could have a major impact on the Fed’s decision to raise rates by 50 or 75 basis points at the December 14th meeting. Currently, the likelihood of a 50-bp hike is about 75%, versus 25% for a larger 75-bp increase. Investors are viewing a 50-point move as a dovish pivot, which has been putting pressure on the US dollar. Still, even a 50-bp hike would set a record for yearly rate hikes of 4.25%.   USD/JPY Technical There is resistance at 139.82 and 141.58 There is support at 137.39 and 135.63 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
JPY: Assessing the FX Intervention Zone and Market Conditions

This week starts with news about China and COVID and will go on with Eurozone inflation data and other crucial events

Enrique Díaz-Álvarez Enrique Díaz-Álvarez 28.11.2022 15:30
Risk assets rose worldwide last week as the backdrop turned more supportive. Recession fears seem to be easing worldwide, particularly in the Eurozone, but interest rates are not rising in tandem, the best combination possible for stock markets, credit and commodity currencies. The dollar underperformed against every currency in G10, and the biggest winners were Latin American currencies. The major exception was the Brazilian real, which continues to be hobbled by fears that the Lula administration will undo the economic stabilisation achieved over the last year in Brazil.   As this is written, news of the anti-lockdown protests in China are dominating headlines and risk assets are opening softer in Asian early morning trading. In addition to the headlines from China, this should be a very busy week for markets. The flash inflation report out of the Eurozone (Wednesday) is expected to remain at record highs, specially in the core indicator, a stark contrast to the wishful thinking we see in the ECB and elsewhere that inflation will somehow go away on its own. The latter part of the week will be dominated by US macro news, including the PCE inflation report (Thursday) and the critical November payrolls report (Friday). Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 28/11/2022 GBP The pound continues to benefit from the sense of stability brought to UK finances by Prime Minister Sunak. It’s also helpful that market expectations for the terminal rate in the UK continue to creep up towards 5%. A handful of MPC members spoke last week, and there appears a general consensus among policymakers that additional interest rate hikes are required. Last week’s High Court ruling, which deemed that another Scottish Independence referendum cannot take place without Westminster consent, had little impact on sterling. This week is extremely light in terms of UK data, so risk appetite among investors and a couple of speeches by MPC members (Tuesday and Wednesday respectively) will be the main drivers of trading in the pound. EUR While sentiment in the Eurozone economy remains negative, key surveys last week all came out stronger than expected. This includes the PMI survey of business activity, but also consumer and investor confidence. For now, the weakness in the surveys has not fully shown up in the actual economic numbers, which continue to hold up rather well under the circumstances. Figure 2: Euro Area PMIs (2020 – 2022) Source: Refinitiv Datastream Date: 28/11/2022 This week, the focus will be on the flash inflation numbers for November, out on Wednesday. The excitement around the possibility that headline inflation may retreat slightly, while remaining in double digits, should be tempered by the absence of any sign of a pullback in the more persistent core number. The latter will likely remain above 5%, a dizzying and unsustainable 4% above overnight rates in the Eurozone. USD The holiday-shortened week in the US had little economic or policy news to drive markets, aside from the publication of the somewhat stale minutes of the last Fed meeting. The minutes reinforced the notion that the Fed is likely to revert back to a 50 bp hike in December, but told us little about the more important question of what to expect next year. While the payrolls report on Friday should dominate headlines, we think markets are not paying enough attention to the PCE inflation report for October, the Fed’s preferred inflation measure, released the day before. It will be interesting to see whether it confirms the softness of the CPI report that gave so much encouragement to markets, thanks partly to some technical quirks in the report. Should it come out higher than expected we could see some sharp retracement in expectations for the Fed’s terminal rate. JPY The yen traded a touch higher on the US dollar last week, though the general improvement in risk appetite meant that the currency underperformed most of its G10 counterparts. Slowly but surely, the Japanese yen is regaining its status as one of the chief safe-haven currencies in the world, a mantle lost due to the Bank of Japan’s ultra-dovish monetary policy stance. Yet, with central banks globally approaching the end of their tightening cycles, the yen is somewhat back in favour again among investors, with the currency rallying this morning on news of the worsening in the COVID-19 situation in China over the weekend. Japanese inflation data, out last week, came in higher than expected, perhaps a prelude to a slightly less dovish BoJ policy stance. Labour market data (Monday), industrial production (Tuesday), and a speech from Bank of Japan governor Kuroda (Thursday) will be closely watched by investors this week. CHF The Swiss franc ended last week little changed against the euro, and around the middle of the G10 currency performance dashboard. News from Switzerland was scarce, and the US Thanksgiving holidays ensured that trading activity was light in the second half of the week. This week’s economic calendar in Switzerland is unusually busy. Third-quarter GDP growth, sentiment indices, retail sales and PMI data will all be out. The primary focus should, however, be on the latest inflation figures (out on Thursday), as the November print may have the biggest impact on the size of the SNB’s rate hike next month. In the two months prior, the data has surprised to the downside, but at 3% it remains significantly above the SNB’s 0-2% target range. AUD News of anti-lockdown protests in China over the weekend led to a bit of weakness in the Aussie dollar this morning, as investors fret over the possibility of additional mobility restrictions in Asia’s largest economy. AUD does, however, continue to remain well bid against most currencies, as dimming fears over a global recession support high-risk assets. Domestic economic news out last week was a touch on the soft side, which perhaps contributed to the underperformance in AUD relative to its New Zealand counterpart. Both the services and manufacturing PMIs missed expectations, with the latter now at its lowest level since January (47.2). An unexpected drop in this morning’s retail sales print for October (-0.2%) has further clouded the outlook. Figure 3: Australia Retail Sales (2021 – 2022) Source: Refinitiv Datastream Date: 28/11/2022 We suspect that headlines out of China, Australia’s largest trading partner, will be the main driver of the dollar during the remainder of the week. Domestic macroeconomic data releases are few and far between, though a speech from Reserve Bank of Australia governor Lowe on Friday could draw some attention. NZD In line with expectations, the Reserve Bank of New Zealand raised its base rate by another 75 basis points last week. Some analysts had pencilled in a smaller hike in light of the growing downside risks to growth. While the RBNZ noted that a shallow recession was likely on the way in 2023, it also said that this would be a necessary condition in order for the bank to reach its inflation target. The statement remained rather hawkish. The reference to ‘tighten at pace’ was removed, though the bank noted that rates would need to go higher than previously expected. The committee even discussed the possibility of a 100bp hike at last week’s meeting. The New Zealand dollar was well supported in the aftermath of Wednesday’s RBNZ announcement – we suspect that growing expectations for hikes could keep the currency well bid this week. The bank’s commitment to bringing down core inflation is notable, and is likely to ensure that it could raise rates deeper into 2023 than most of its G10 counterparts. CAD The Canadian dollar once again underperformed most of its major peers last week, ending near the bottom of the G10 performance tracker, alongside the US dollar. Some dovish comments out of the Bank of Canada were partly behind this underperformance, with deputy BoC governor Rogers saying last week that higher rates were causing hardship for households. The BoC delivered a dovish tilt at its last meeting, and it will likely take something extraordinary for anything larger than a ‘standard’ 25bp hike at the last policy meeting of the year in December. This week is a very busy one in terms of economic data releases in Canada. Tuesday’s Q3 GDP number to expected to show that the Canadian economy expanded at a modest pace in the three months to September. Meanwhile, economists are bracing for a sharp slowdown in job creation in Friday’s labour report for November (+6k expected in the net employment change number). SEK The Swedish krona appreciated against the euro last week, in line with the general improvement in investor appetite for risk. The outcome of last week’s Riksbank meeting was more or less as expected, perhaps with a slight dovish tilt, which limited further gains for the krona. The Riksbank raised interest rates by 75 basis points to 2.5%, the highest level since 2008. The board stated that the risk of high inflation becoming entrenched is still substantial, and that it is very important that monetary policy acts to ensure a stabilisation around the 2% target within a reasonable time. Figure 4: Riksbank Base Rate (%) (2012 – 2022) Source: Refinitiv Datastream Date: 28/11/2022 In addition, the Riksbank also published its new macroeconomic projections. The target CPIF measure was projected to ease from 7.6% this year to 5.7% in 2023, an upward revision from the previous forecast of 5.1%, and then down to 1.5% in 2024, slightly lower than 1.6% expected last time. The bank expects a GDP contraction of 1% in 2023, before growth of 1.0% returns in 2024. As for the terminal rate, the bank puts it at 2.84% in the third quarter of next year. The revised rate path remains somewhat off-market expectations and, in our view, is somewhat conservative. NOK In the absence of relevant data last week in Norway, the Norwegian krone traded in line with risk assets, ending the week higher against the euro on improved risk sentiment. Expectations of a more dovish Federal Reserve, and the reduced fear of recessions, have contributed to the improvement in risk sentiment. Indeed, NOK was by far and away the best performer in the G10 last week, largely a consequence of its high-risk status. No major data will be published this week either. Therefore, we believe that the currency will continue to trade in line with other risk assets. Protests in China over increased restrictions to curb covid may continue to worsen sentiment, which may weigh on risk assets in the coming days, including the Norwegian krone. CNY The Chinese yuan was among the underperformers last week. Sentiment toward China has taken another turn for the worse, as domestic covid cases continued to hit fresh record highs. This has prompted officials to introduce local restrictions and mass testing, as a number of cities struggle to contain the spread. This will add to the strain on the Chinese economy and policymakers have rushed to provide monetary support. Last week, commercial banks in China announced fresh credit lines to help struggling property developers. For the first time since April, the PBoC also cut its reserve requirement ratio (RRR) for banks, slashing it by 25 basis points to ensure ample liquidity. In the coming days, we’ll receive fresh PMI prints for November, which should help us understand the degree of the economic slowdown. The immediate attention in China is, however, on protests against the country’s zero-Covid policy. These protests have erupted in the past few days in response to a number of tragedies, including a fire that killed 10 in Urumqi, the capital of the northwestern Xinjiang region. Protests have taken place in at least nine cities, including Beijing and Shanghai, which has further soured sentiment towards the yuan at the start of this week. Economic Calendar (28/11/2022 – 02/12/2022) To stay up to date with our publications, please choose one of the below: 📩 Click here to receive the latest market updates👉 Our LinkedIn page for the latest news✍️ Our Blog page for other FX market reports 🔊 Stay up to date with our podcast FXTalk Source: Dollar falls as recession fears recede, yields fall | Ebury UK
ECB decision: 50bp rate hike is on the cards, but this week's data can be game-changing

ECB decision: 50bp rate hike is on the cards, but this week's data can be game-changing

Kenny Fisher Kenny Fisher 28.11.2022 19:49
It has been a busy start to the week for EUR/USD, which gained 100 points earlier in today but has given up almost all of these gains. In the North American session, EUR/USD is trading at 1.0384. German CPI projected to decline Inflation is running at a double-digit clip in the eurozone and Germany, and the ECB is keeping a careful eye on Tuesday’s German CPI for November, with a consensus of -0.2%, compared to a gain of 0.9% in October. Could this be the long-sought peak in inflation? If so, it would allow the ECB to ease up on its pace of rate hikes. The ECB was late getting into the hiking game, as Lagarde & Co. clearly underestimated the stickiness of inflation, which has hit 10.4% in Germany and 10.7% in the eurozone. Read next: Commodities: Crude oil suffers from situation in China| FXMAG.COM The ECB has been aggressive and raised rates by 75 basis points in October, but the main deposit rate is at a relatively low 2.00%. The ECB has moved away from forward guidance and is relying instead on a meeting-by-meeting, data-driven approach. The markets have priced in a 50-bp increase at the December 12th meeting, but the release of German CPI on Tuesday and Eurozone CPI on Wednesday could change expectations. After a short trading week in the US due to the Thanksgiving holiday, the markets will have plenty of US events to digest this week. The US will release GDP for Q3 and the Core PCE Price Index, the Fed’s preferred inflation indicator. The key release of the week is nonfarm payrolls on Friday, which could have a major impact on what the Fed does at the December 14th meeting. Currently, the likelihood of a 50-bp hike is about 75%, versus 25% for a larger 75-bp increase. Investors are viewing a 50-point move as a dovish pivot, which has been putting pressure on the US dollar. Still, even a 50-bp hike would set a record for yearly rate hikes of 4.25%. EUR/USD Technical 1.0359 and 1.0238 are providing support There is resistance at 1.0447 and 1.0568 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro eyes German CPI - MarketPulseMarketPulse
The EUR/USD Pair: There Are Still No Sell Signals

The ECB's Balance Sheet Reduction Should Go Smoothly

InstaForex Analysis InstaForex Analysis 29.11.2022 08:00
On Monday, despite the near absence of news and events, the EUR/USD currency pair was trading higher. The growth started early in the day, much earlier than the only event of the day - Christine Lagarde's speech, and it should be noted immediately. As a result, this event was unable to have any impact on the market's mood. And the current atmosphere is unquestionably "bullish" and does not raise any concerns. As we've already stated, the expansion of the euro is wholly justified and logical from a technical standpoint. Now, every indicator on the 4-hour and 24-hour TF is visible. Therefore, conceptually, there are no issues with the European currency's growth. When we discuss macroeconomics as a foundation, it becomes a different issue. Since the market trades every day, the pair can grow perfectly well without significant newsworthy events or publications, as we have already stated. However, the euro has been expanding rapidly for almost a month, and such a sustained expansion has us scratching our heads. What foundation is the euro currently growing on? Remember that, in theory, a few factors could account for the pair's current movement. For instance, we can state that the risk sentiment in the market is rising right now, but what does this mean, and why is it rising? It is very challenging to respond. Why, then, did traders suddenly start paying attention to risky currencies when the geopolitical situation in the world hasn't changed in any way over the past month? The foundation is the same way. Yes, the ECB rate is rising quickly, and starting next month, it may start to outpace the Fed rate in terms of growth. But is this one factor enough for the euro to rise by 750 points in less than a month? It is extremely difficult to refer to macroeconomic statistics as "supporting the euro" at all. The only theoretical support factor is anticipating a slowdown in the Fed's tightening pace. How much more will the euro currency appreciate based solely on this factor? As we've already stated, it makes sense to trade for an increase while all indicators point upward. Any fundamental theory requires specific technical signals to support it. There is no need to try to predict the reversals or the future movement if there are none. The market may be closing out the short positions it has been building up for the past two years. The ECB is getting ready to reduce its balance sheet. The fundamental background is nonexistent during the first two trading days of the week. Christine Lagarde gave another speech on Monday, but this time she didn't offer any novel insights into the market. The market had no doubts about her assurance that rates would continue to be a crucial tool in the struggle against high inflation. In other words, as long as EU inflation remains sky-high, the ECB rate will rise, which the market did not doubt. Lagarde added that the topic of shrinking the ECB's balance sheet (the QT program) will be discussed in December, which should also cause a slight slowdown in the consumer price index. It's already in the news! Given that Lagarde's speech was quite late in the day on Monday, it hardly had any impact on the appreciation of the euro. The ECB chief also noted that although it is unlikely to occur soon, the central bank's balance sheet reduction should go smoothly, and rates will eventually fall. The state of the economy, the labor market, wages, and inflation expectations will all be important factors. As you can see, traders continue to have formal reasons to purchase the euro from a foundational standpoint. Still, we believe that the current fundamental background needs to be sufficiently strong to cause the euro to increase by 750 points in a matter of weeks. As of November 29, the euro/dollar currency pair's average volatility over the previous five trading days was 95 points, considered "high." So, on Tuesday, we anticipate the pair to fluctuate between 1.0332 and 1.0521 levels. The Heiken Ashi indicator's turning downward indicates a new phase of the corrective movement. Nearest levels of support S1 – 1.0376 S2 – 1.0254 S3 – 1.0132 Nearest levels of resistance R1 – 1.0498 R2 – 1.0620 R3 – 1.0742 Trading Suggestions: The EUR/USD pair is still above the moving average. Thus, until the Heiken Ashi indicator turns down, we should hold long positions with targets of 1.0498 and 1.0521. The price fixing below the moving average line with targets of 1.0254 and 1.0132 will cause sales to become significant. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     search   g_translate     Relevance up to 01:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328375
The Pound Is Now Openly Enjoying A Favorable Moment

GBP/USD: Traders Can Engage In Trading For Growth

InstaForex Analysis InstaForex Analysis 29.11.2022 08:02
The GBP/USD currency pair made a small correction to begin the new trading week. The pound did not even consider growth on Monday, in contrast to the European currency, which increased significantly. This raises questions because if the euro's growth was unjustified, we could anticipate a similar increase in the British pound. However, since nothing similar occurred, Monday can be regarded as "the most strange." In addition to the decoupling between the euro and the pound, the euro's growth and volatility were also unexpected. But let's go back to the pound, which has also increased significantly over the past few weeks. We have repeatedly emphasized how the British pound had more justification from the start to appreciate against the dollar. Since the Supreme Court of Great Britain prohibited Scotland from holding an independence referendum without official consent from London last week, there have been even more this month. Although this is excellent news for the pound, keep in mind that, for instance, the BA rate is higher than the ECB rate. Additionally, Liz Truss' departure from the UK has changed the balance of power, leading to the last pound's collapse. Rishi Sunak, who is much more knowledgeable about economics than Truss, arrived. However, the British currency has far more reasons for growth than the European one. We think there aren't enough reasons for the pound to show such strong growth. The pound/dollar pair also has everything you need to move north from a technical perspective. On the 4-hour and 24-hour TF, all technical indicators are initially pointing upwards. This is already sufficient for traders to engage in trading for growth. The pound sterling has the potential to increase in value for as long as it likes, even in the absence of robust macroeconomic and foundational support. It won't be possible, but it also won't look good. All we can do is continue the trend. You must not lose sight of the big picture; you must keep in mind that the pound currently lacks sufficient justification for rapid growth, but if the technique is bullish, selling would be foolish. Is Jerome Powell able to defend the dollar? The speech by Jerome Powell will be the main event this week. It is scheduled for Wednesday, and we are unsure of the Fed chairman's capacity to support the US dollar. It makes sense that the US dollar is currently declining because it is watching for a slowdown in the key rate's growth rate. If so, only one thing in Jerome's speech can defend the dollar. Powell must emphasize that growth can be slower but also longer and stronger. Undoubtedly, there is still time before the following Fed meeting. A new inflation report will be published, on which the Fed's monetary policy now depends almost entirely. Powell can, however, express what is expected of him on Wednesday. To say that the US dollar might fall once more in this situation is debatable. Even the following image may exist from our vantage point. Even if only because a technical correction is required, the dollar is starting to increase this week. The pound should at least be corrected since it has been rising for several weeks without cause or justification. Additionally, Powell's speech will occur around the same time and may or may not have anything to do with strengthening the US dollar. It also applies to nonfarm on Friday. Regardless of the report's strength or weakness, the market is now demonstrating that it is prepared to trade trendily and volatilely, even without a fundamental and macroeconomic background. Macroeconomic reports can only indirectly affect the pair, despite how important they may be. Additionally, they can't possibly affect market sentiment or the development of trends on a global scale. Over the previous five trading days, the GBP/USD pair has averaged 113 points of volatility. This value is "high" for the dollar/pound exchange rate. Thus, on Tuesday, November 29, we anticipate movement within the channel and are constrained by levels 1.1936 and 1.2160. The Heiken Ashi indicator's upward reversal indicates that the upward movement has resumed. Nearest levels of support S1 – 1.2024 S2 – 1.1963 S3 – 1.1902 Nearest levels of resistance R1 – 1.2085 R2 – 1.2146 R3 – 1.2207 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair began a feeble correction. Therefore, at this time, new buy orders with targets of 1.2146 and 1.2160 should be considered if the Heiken Ashi indicator reverses to the upside. With targets of 1.1936 and 1.1902, open sell orders should be fixed below the moving average. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 01:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328377
The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

The GBP/USD Pair Will Reach The Lower Limit Of Consolidation

InstaForex Analysis InstaForex Analysis 29.11.2022 08:16
Yesterday, the pound lost 128 pips. It reached the nearest target support at 1.1940. Considering the double divergence that formed with the Marlin oscillator, the main goal now is to break through the support and keep falling to the next target at 1.1737. The mortgage statistics will be released today. The main type of loan as an indicator of the health of the economy - mortgages - is expected to decline: net borrowing of mortgage debt is expected to reach 5 billion pounds in October against 6 billion in September, mortgage approvals for house purchases may show a decline to 60,200 from 66,800 in September. On the four-hour chart, the price has settled under the MACD indicator line. Now it is at the support of the target level (1.1940) and the balance line (red moving line). It will take some time to cross the support, but after that we expect a similar price movement to the target of 1.1737. The price may linger at this level, as it will reach the lower limit of consolidation in August and November.   Relevance up to 03:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328385
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The Euro (EUR) Is Losing Support From Related Markets

InstaForex Analysis InstaForex Analysis 29.11.2022 08:18
  Relevance up to 03:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328387
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

Technical Analysis Of The US Dollar To Japanese Yen Pair

InstaForex Analysis InstaForex Analysis 29.11.2022 08:10
Yesterday, the yen tried to reach the nearest support of the embedded line of the price channel at 137.00, but was pushed back up above the 138.60 line. This morning, the price is trying to go under 138.00, but it is currently prevented by the convergence that has almost formed. If the bears succeed, then the price will hit 137.00, the convergence will be in a more classical form (marked with a dotted line). On the four-hour chart, the price is building strength so it can cross the support of 138.60 reinforced by the MACD line. The Marlin oscillator is in negative territory, which is beneficial to this plan. If the plan fails, the price could rise to 139.95 as a return to the upper limit of the consolidation, but if it doesn't reverse from the level as a new attack on 138.60, then, as the price settles above 139.95, the currency might reach the 141.90 level.   Relevance up to 03:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328383
EUR: German IFO Data and Central Bank Hawkishness Impact Euro/USD Range Trade

There Is Potential For The US Dollar Index To Get A Correction

InstaForex Analysis InstaForex Analysis 29.11.2022 08:23
On the 4-hour chart of the US Dollar Index, deviations appear between its price movements and the CCI indicator so that in the near future the USD Dollar Index has the potential to appreciate an upward rally up to the 107.07 level as its main target and if the momentum and volatility are supportive, then it is possible that the 107.87 level will become the next target to be tested but because currently #USDX is stuck at the level of the Bearish Fair Value Gap area (pink box) there is a potential for #USDX to get a correction to the level 106.10 which is important as long as the correction does not exceed the level 105.75 then the scenario of an upward rally that has been described above is still valid.   Relevance up to 02:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/114775
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

The GBP/USD Pair Seems To Be Moving Upward A Rally

InstaForex Analysis InstaForex Analysis 29.11.2022 08:25
Currently, on the daily chart, Cable seems to be moving up a rally where this has also been confirmed by the triggering of the three Wiseman signals from this major currency pair, even though currently GBP/USD is undergoing a small correction and is stuck in the Daily Bullish Fair Value Gap area (green box), but GBP/USD still has the potential to appreciate upwards to the level of 1.2296 - 1.2300. However, due to the emergence of the Rising Wedge pattern, we need to be careful if there is a downward correction movement, especially if the decline exceeds the 1.1740 level because if the Cable manages to break below the level With that said, the upward rally scenario described earlier will cancel by itself.   Relevance up to 02:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/114773
ECB press conference brings more fog than clarity

All ECB Members Agreed That It Was Important To Keep Raising The Rate

InstaForex Analysis InstaForex Analysis 29.11.2022 08:27
The euro's first trading day of the week proved surprisingly active. Although there was no news background on Monday, the movements started in the evening and continued throughout the day and into the evening. There was some news, though, and I will now consider them. The speech by Christine Lagarde, which offered nothing to the market, should be our first point of reference. The market now feels secure in its position and is clear on the actions the European regulator will take in the coming months due to the ECB speakers' appearances just last week. All ECB members agreed that it was important to keep raising the rate as long as inflation was still high. A preliminary report on EU inflation for November will be released this week, and the market now anticipates that it will start to slow down a bit. This might be an exceptional circumstance, or perhaps by the end of November, there won't be any slowdown. Predictions sometimes pan out. Additionally, Isabel Schnabel gave a speech in which she said something crucial. She pointed out that the ECB is currently powerless to halt the rate increase because budgetary initiatives will cause inflation to soar. Budget plans are viewed as various initiatives to reimburse European consumers for rising electricity costs over the past year. Schnabel also pointed out that faulty inflation forecasts by central banks could result in misguided monetary policy. She added that the ECB might need to increase the rate more than initially anticipated. This is reasonable rhetoric, given that budget incentives are almost identical to monetary incentives, which are the primary cause of the EU's (and other nations') current record-high inflation rates. Restrictive measures ought to be more stringent than they would be if the EU implements fiscal stimulus. Such rhetoric is advantageous for the euro. The market will have more justification to increase demand for the euro currency as rates in the European Union rise. We need at least three waves down based on the current wave layout. This is necessary for the markup to be completely unreadable and complex, making it much more challenging to predict something. I do not contest the possibility of a continued quote rise; even yesterday's example demonstrated this. But I'm still hoping to develop a clear trend correction section. The upward trend section's construction is complete and has increased complexity to five waves (or is nearing completion). As a result, I suggest making sales with targets close to the estimated 0.9994 level, or 323.6% Fibonacci. There is a chance that the upward section of the trend will become more complicated and take on an extended form, but this chance is currently at most 10%. The construction of a new downward trend segment is predicated on the wave pattern of the pound/dollar instrument. I can no longer recommend purchasing the instrument because the wave marking already permits the development of a downward trend section. With targets around the 1.1707 mark, or 161.8% Fibonacci, sales are now more accurate. The wave e, however, can evolve into an even longer form. Relevance up to 05:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328393
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The EUR/USD Pair Still Hasn't Started A Downward Movement

InstaForex Analysis InstaForex Analysis 29.11.2022 08:30
M5 chart of EUR/USD On Monday, the euro/dollar pair showed certain movements that are quite difficult to explain. It started to sharply rise early in the morning and crossed a distance of 150 pips. Then it began to fall by the same amount in the afternoon. The only fundamental background was European Central Bank President Christine Lagarde's speech, which took place in the evening, so it could not have provoked such movements. Therefore, the pair has reached 1.0485, near which the previous local high was formed, and sharply fell. I believe that this pullback could be the start of the long-awaited bearish correction, which I already mentioned last week. The price may cross the critical line in the near future, which will be another technical factor for the fall. I expect the Senkou Span B line to be the first target, but the correction might be much stronger, since the euro's growth for the past few weeks was not quite logical and reasonable. As for trading signals, yesterday's situation was almost perfect. At the beginning of the European trading session, the price broke through the level of 1.0366, after which it rose to the nearest target level of 1.0485 and rebounded from it. Therefore, traders had to open a long position first, and then - a short position. They managed to earn about 90 pips on the first position, and also the same amount on the second one since the price went back to the level of 1.0366. As a result, two deals, good profit. COT report As for Commitment of Traders (COT) reports in 2022, they reflected bullish sentiment in the first six months of the year although the euro was bearish. Then, they illustrated bearish sentiment for several months with the euro being also bearish. Currently, the net position of non-commercial traders is again bullish and increasing. Meanwhile, the euro has hardly retreated from its 20-year lows. This is due to the fact that demand for the greenback is high amid a difficult geopolitical situation in the world. Therefore, despite a rise in demand for the euro, buoyant demand for the dollar does not allow the euro to strengthen. During the reporting week, the number of long positions held by non-commercial traders rose by 7,000 and that of short positions increased by 2,000. Consequently, the net position advanced by 5,000. The euro's recent growth is gradually coming in line with the figures illustrated in the COT report. Still, the greenback may resume growth under the influence of geopolitical factors or the lack of factors for further strengthening in the euro. The green and red lines of the first indicator moved far away from each other, which may indicate the end of the uptrend. The number of long positions exceeds that of short positions by 113,000. Therefore, the net position of non-commercial traders may continue to rise further, but without triggering a similar rise in the euro. When it comes to the total number of longs and shorts across all categories of traders, there are now 39,000 more short positions (635,000 vs 596,000). H1 chart of EUR/USD Lately, EUR/USD has shown absolutely inadequate movements on the one-hour chart. It still hasn't started a downward movement even after it crossed the ascending trend line. Yesterday, the pair updated its last local high, but failed to break through the important level of 1.0485. And now it may start a strong bearish correction, which we already expected a week ago. On Tuesday, the pair may trade at the following levels: 1.0124, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as Senkou Span B lines (1.0207) and Kijun Sen (1.0376). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On November 29, there are no important events planned in the EU and the U.S., but Monday showed us that the pair is ready to move in a volatile manner even without them. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate     Relevance up to 01:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328371
The Market May Continue To Buy The Pound (GBP) This Week

The British Pound To US Dollar Pair Started Moving Down

InstaForex Analysis InstaForex Analysis 29.11.2022 08:33
M5 chart of GBP/USD The GBP/USD also showed a strong downward movement on Monday afternoon. However, the pound's movement was different from that of the euro, which initially rose strongly. However, by the end of the day it became clear that the pairs are still synchronized, so we expect a bearish correction from both of them. In the pound's case, an important event happened yesterday - the price settled below the ascending trend line, and it may also cross the Kijun-Sen line. If that happens, then traders can use two strong sell signals. In this case, the pound might fall by 300-400 pips, as its growth in recent weeks requires at least a purely technical correction. We are already silent about the fact that the British currency was not always growing in a logical or reasonable manner. As for trading signals, the pound's situation was not as bright as it was for the euro. There were three consecutive sell signals near the level of 1.2106, and as we recall, if the first two signals are false, then it is better not to use all the next ones. However, yesterday we were lucky with the signals, because the price did not go down the required 20 pips even after the first and second signal, which means that the first short position was the only one that shouldn't have been closed. As a result, the pound dropped to the level of 1.2007 till the evening, and continued falling. The position should have been closed somewhere in this area. The profit on it was at least 80 points. COT report The latest Commitment of Traders (COT) report on GBP logged a slight decrease in bearish sentiment. In the given period, the non-commercial group closed 1,900 long positions and 8,800 short positions. Thus, the net position of non-commercial traders increased by 7,000. The net position is gradually growing during the last months, but the sentiment of the big players is still bearish. The pound has been rising in recent weeks, but so far it does not seem that it is preparing for a long-term uptrend. And, if we remember the euro's situation, then based on the COT reports, we can hardly expect a surge in price. The demand for the US currency remains very high, and the market, as it seems, is just waiting for new geopolitical shocks so it can return to buying the dollar. The non-commercial group now has a total of 67,000 shorts and 34,000 longs opened. As we can see, there is a wide gap between them. As it turns out the euro is now unable to show growth when market sentiment is bullish. When it comes to the total number of long and short positions, here bulls have an advantage of 17,000. Still, this is not enough for the sterling to increase. Anyway, we are still skeptical about the pound's long-term growth although the technical picture shows otherwise. H1 chart of GBP/USD The pair started moving down, which we have been waiting for. It has crossed the trend line, so the uptrend is officially canceled. I believe that the pound may show a solid decline in the near future. On Tuesday, the pair may trade at the following levels: 1.1760, 1.1874, 1.1974-1.2007, 1.,2106, 1.2185, 1.2259, 1.2342. The Senkou Span B (1.1680) and Kijun Sen (1.2000) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. There are no important events or reports in the UK and the USA. Therefore, traders will have nothing to react to. The pair can continue to correct and the movement may not be strong, as all the most important events are scheduled for the second half of the week. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate     Relevance up to 01:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328373
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

EUR/USD Pair: One More Leg Still Remains On The Higher

InstaForex Analysis InstaForex Analysis 29.11.2022 08:37
Technical outlook: EURUSD rose through the 1.0496 high on Monday, inching closer to the 1.0550-1.0600 area, before finding resistance. The single currency pair is seen to be trading close to 1.0385 at this point in writing after reversing sharply from 1.0496. The near-term support is seen at 1.0222 as the bulls prepare to push through 1.0560 in the short term. EURUSD is most likely preparing to push through 1.0600 but prices need to stay above 1.0222 to keep the bullish structure intact. A slip lower could drag prices up to 1.0000 which is close to the Fibonacci 0.618 retracement of the recent upswing between 0.9740 and 1.0481. Prices are expected to rally thereafter and break above the 1.0496 high. EURUSD seems to be well supported around 0.9740, followed by 0.9635 and lower; while resistance is seen towards 1.0500, followed by 1.0600 and higher respectively. Also, note that an annual downtrend line is seen to be passing through 1.0600, which could lead to a potential bearish resumption. One more leg still remains on the higher side before the bears are back in control. Trading idea: Potential rally through 1.0550-1.0600 against 1.0220. Then lower again. Good luck! Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/302891
The Euro Will Probably Continue Its Upward Movement In The Near Future

The Entire Corrective Decline Od The EUR/USD Pair Seems To Be Completed

InstaForex Analysis InstaForex Analysis 29.11.2022 08:40
We have seen the expected correction to 1.0237. We will now be looking for a break above resistance at 1.0469 for a continuation higher to the next upside target seen at 1.0783 and 1.0926. Short-term, a break above the minor resistance area between 1.0459 and 1.0469 will confirm a continuation higher to 1.0783 and above. Long-term, we regard the entire corrective decline from the 2011 high at 1.6038 as complete. A new impulsive rally that ultimately will take us above the 2011 peak is now in progress.   Relevance up to 07:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/302893
The Outlook Of EUR/USD Pair For Long And Short Position

Lagarde (Head Of ECB) Said That The ECB Will Continue To Raise Rates

InstaForex Analysis InstaForex Analysis 29.11.2022 08:53
Another attempt to attack the 4th figure ended in failure. On Monday, EUR/USD bulls hit a five-month price high at 1.0498. However, the pair did not stay at this level for long - the price fell during the US session and finished the trading day at 1.0340. If the impulsive growth was unreasonable and unusual (despite the news from China), then the downward momentum was provoked by quite a specific person - European Central Bank President Christine Lagarde. Lagarde delivered her semi-annual report to members of the European Parliament Committee on Economic and Monetary Affairs. The theme of the report was directly related to monetary policy, so the speech triggered increased volatility in the pair. And it was not in favor of the euro. It's notable that Lagarde voiced quite contradictory rhetoric. There were different ways to evaluate her speech, both in its favor and against. In the end, traders chose the second option: as a result, the euro weakened not only against the greenback, but also in many cross-pairs. So, on the one hand, Lagarde said that the ECB will continue to raise rates, despite the slowdown in business activity in the eurozone. She acknowledged that high levels of uncertainty, tighter financial conditions, and declining global demand are putting pressure on economic growth in the European Union. But the record growth of inflation in the eurozone, according to her, is forcing the ECB to move on. Lagarde expressed doubt that the consumer price index in the eurozone has reached its peak values. She noted that the cost of wholesale energy supplies continues to rise (which is the main driver of headline inflation), so a slowdown in CPI growth in November seems extremely unlikely. Lagarde said that she "would be surprised" if inflation reached its peak in October. Certainly, the talking points are hawkish. In other circumstances, EUR/USD bulls would have taken advantage of the situation and rushed upwards, building on their success (i.e. in our case they would have settled in the area of the 5th figure). If it were not for one "but". The fact is that Lagarde made it clear in the European Parliament that slowing down the pace of interest rate increases in December is still a matter of debate. In doing so she took a neutral position in the corresponding dispute of many ECB representatives. Mario Centeno, Philip Lane, Francois Villeroy de Galo and Klaas Knot, among others, spoke publicly in favor of a lower rate of monetary policy tightening. Whereas the hawkish wing of the central bank, such as Robert Holzmann, Isabelle Schnabel and Joachim Nagel, came out in favor of a 75-point rate hike in December. Lagarde stayed "above the fray." According to her, the central bank will make an appropriate decision based on many factors: "...it will be based on our updated outlook, the persistence of the shocks, the reaction of wages and inflation expectations, and on our assessment of the transmission of our policy stance". Based on a comprehensive analysis of these factors, the ECB will decide how far rates should be raised and how fast. Such statements sobered up the EUR/USD bulls and then the price rolled back and headed to the daily lows, to the area of the third figure. Even in the first half of Monday, the ball was on the side of euro-dollar pair bulls, which took advantage of the weakening of the greenback and the strengthening of the hawkish mood regarding the ECB's further actions. But the diplomatic wording of Lagarde, which allows for various scenarios (both dovish and hawkish) did not allow the bulls to consolidate their success. The bears took the initiative and pulled the price back to its previous positions. On top of that, in the afternoon, the market finally reacted to events in China, which unfolded too dynamically and unexpectedly. First, the number of coronavirus cases in China is surging. Last Thursday, Beijing reported 31,000 new infections, noting that this was the strongest daily rate of increase in the history of the pandemic. But a little later, it turned out that PRC anti-records are updated almost daily. For example, the number of diseases has already exceeded the 40,000 mark on Monday. COVID outbreak in China is fraught with another wave of lockdowns. Strict quarantine has already been imposed in many cities across the country, with millions of people locked in their homes. Enterprises and firms have moved their employees to remote work schedules (where this is possible due to the nature of their work). China is known to have a "zero tolerance" policy for the Coronavirus, so it is not surprising that the authorities reacted to the situation with the utmost severity. And this circumstance gave rise to a second problem: Anti-Coronavirus protests broke out in China. At the moment, it is difficult to talk about the prospects of the protest movement. In most cases, people are protesting against the "zero Covid" policy, which, in their opinion, does not bring results, but hits hard on the pocket. However, in some cases, demands for the resignation of Chinese leader Xi Jinping are also heard among the demonstrators. In any case, these protests are already considered the largest in China for the last 33 years, since the 1989 protests (the events on Tiananmen Square). Judging by the dynamics of the dollar index, traders are wary of the unfolding events. The situation is, in a sense, a stalemate: on one side of the coin - possible turbulence in the markets due to the protests, on the other side of the coin - negative consequences from large-scale lockdowns in major cities of China. Thus, the current fundamental background is clearly not favorable for the euro's upward movement (first of all, if we speak about a stable development, but not an impulsive breakthrough). Therefore, it is better to either take a wait-and-see position or consider short positions. The main bearish target is still at 1.0210 (the middle line of the indicator Bollinger Bands on the daily chart). Crossing this target will pave the way for the bears to reach the parity level.     search   g_translate     Relevance up to 01:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328381
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

The Euro Area Is Nearing Recession | Investors Are Looking For Hints About The ECB's Decision

InstaForex Analysis InstaForex Analysis 29.11.2022 09:00
EUR/USD lost 1,500 points after ECB President Christine Lagarde said she would be surprised if inflation in the eurozone peaked. "I would like inflation to peak in October, but I'm afraid I won't go that far," she noted on Monday. "There is too much uncertainty, particularly in the shifting of high electricity costs from the wholesale level to the retail level'. This suggests that interest rate hikes are far from over. Although consumer price growth has slowed in November, the figure remains above 10%. Investors are obviously looking for hints that the ECB will ease its interest rate increases, especially since the Euro area is nearing recession. Some members of the governing council have already called for a slower pace, following the plans to start writing off around €5 trillion ($5.2 trillion) of bonds that were bought during the recent crises. Others, however, do not see any reason to give up as inflation is more than five times the 2% target. Dutch central bank governor Klaas Knot said earlier that Europe should be prepared for a "protracted period", during which the ECB would return inflation to target. Bundesbank president Joachim Nagel said the ECB should not ease measures "too soon".     search   g_translate     Relevance up to 19:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328367
China Yuan (CNH) Prints The First Daily Loss

China Yuan (CNH) Prints The First Daily Loss

TeleTrade Comments TeleTrade Comments 29.11.2022 09:17
USD/CNH holds lower ground near intraday bottom, snaps four-day uptrend. Bearish MACD signals favor sellers but 100-SMA acts as extra filter to the south. Monthly resistance line holds the key to buyer’s dominance. USD/CNH takes offers as bears attack 7.1800 to defy the fortnight-old bullish chart formation during early Tuesday. In doing so, the offshore China Yuan (CNH) prints the first daily loss in five. That said, the Moving Average Convergence and Divergence (MACD) indicator hints at the pair’s further weakness as it flashes the bearish signals when sellers poke the support line of the upward-sloping trend channel, around 7.1780 by the press time. It should be noted, however, that the 100-SMA level of 7.1600, acts as the extra challenge for the USD/CNH bears before taking control. Following that, a southward trajectory towards the monthly low of 7.0194 can’t be ruled out. Also acting as the short-term key support is the previous monthly low near 7.0126. Meanwhile, recovery moves could aim for the 7.2000 round figures before the stated channel’s upper line, close to 7.2780 at the latest. In a case where the USD/CNH buyers keep the reins past 7.2780, the 7.2800 round figure and a downward sloping resistance line from late October, near 7.2820, could challenge the upside momentum before trying to refresh the record high marked in the last month. USD/CNH: Four-hour chart Trend: Limited downside expected  
Credit Suisse case: Western Assets expects Swiss authorities to act if sentiment doesn't improve

The Risk-On Mood Seems To Weigh On The US Dollar To Swiss Franc (USD/CHF) Pair

TeleTrade Comments TeleTrade Comments 29.11.2022 09:20
USD/CHF renews intraday low during the first negative daily performance in four. Improvement in market sentiment, downbeat US Treasury bond yields weigh on the US Dollar. Swiss Q3 GDP, US CB Consumer Confidence could offer immediate directions. USD/CHF takes offers to refresh the intraday low near 0.9460 heading into Tuesday’s European session as it snaps the three-day uptrend. Although the risk-on mood seems to weigh on the Swiss Franc (CHF) pair, a cautious mood ahead of the key data/events tests the downside momentum of late. The market’s optimism could be linked to the easing of China’s daily covid infections from an all-time high of 40,347 to 38,645. Further, a rally in the Chinese reality stocks, backed by the national securities regulator’s lifting of a ban on equity refinancing for listed property firms, also seemed to have favored the market optimism and weighed on the US Dollar. “The China Securities Regulatory Commission (CSRC) said late on Monday it would broaden equity financing channels, including private share placements for China and Hong Kong-listed Chinese developers, lifting a ban that has been in place for years,” mentioned the news. It should be noted that the mixed comments from the US Federal Reserve (Fed) policymakers and cautious mood before the release of Switzerland’s third quarter (Q3) Gross Domestic Product (GDP) seem to probe the pair sellers of late. That said, Richmond Federal Reserve Bank President Thomas Barkin recently mentioned that he supports smaller interest-rate hikes ahead as the central bank moves to bring down too-high inflation. Previously, Cleveland Fed President Loretta Mester marked the need to see several more good inflation reports and more signs of moderation to back the pause in rate hikes. On the same line, St. Louis Fed President James "Jim" Bullard stated that the situation calls for much higher interest rates than what we've been used to. Further, New York Federal Reserve Bank President John Williams said that he believes the Fed will need to raise rates to a level sufficiently restrictive to push down on inflation and keep them there for all of next year. Additionally, Fed Vice Chair Lael Brainard advocated for tighter monetary policy while citing risk-management reasons. Amid these plays, the US stock futures and equities in the Asia-Pacific region print mild gains despite the downbeat performance of Wall Street. Further, the US 10-year Treasury yields remain depressed near 3.69% by the press time and weigh on the US Dollar amid the risk-on mood. Looking forward, the Swiss GDP Annualized for the Q3, expected to ease to 1.0% YoY versus 2.8% prior, could direct USD/CHF traders ahead of the US Confederation Board’s (CB) Consumer Confidence for November. Though, Wednesday’s speech from Fed Chair Jerome Powell and Friday’s US jobs report will be crucial for clear directions. Technical analysis Unless successfully crossing the 200-DMA hurdle, currently around 0.9640 by the press time, USD/CHF remains vulnerable to refreshing the monthly low, near 0.9355 at the latest.      
The USD/CAD Pair Is Likely To Remain On The Bear’s Radar

Strengthen The Canadian Dollar (CAD) Further Is Expected

TeleTrade Comments TeleTrade Comments 29.11.2022 09:28
USD/CAD is declining towards 1.3400 amid a sheer recovery in oil prices. The risk-off impulse has faded after china announces economic stimulus to offset the Covid-inspired volatility. Apart from Fed Powell’s speech, the US/Canada GDP data will be keenly watched. The USD/CAD pair is looking for an immediate cushion after a massive sell-off post failing to sustain above the critical hurdle of 1.3500. The loonie asset is hovering around 1.3433 and is expected to extend its losses towards the round-level support of 1.3400 amid a vertical rally in oil prices. Also, the recovery in the risk-appetite theme is expected to strengthen the Canadian Dollar further. Meanwhile, the US Dollar Index (DXY) has refreshed its day’s low at 106.14 amid a decline in safe-haven’s appeal. Contrary to that, 10-year US Treasury yields have recovered to near 3.71% as investors have turned anxious ahead of the speech from Federal Reserve (Fed) chair Jerome Powell. On the United States front, investors are awaiting the release of the quarterly Gross Domestic Product (GDP) data, which will release on Wednesday. The growth rate is expected to remain stable at 2.6%. Federal Reserve (Fed) policymakers brace for a slowdown in the growth rate as it will lead to a deceleration in inflation. Meanwhile, loonie investors are also awaiting GDP figures, which are due on Tuesday. The annualized GDP is expected to improve to 3.5% vs. the prior release of 3.3%. While, on a quarterly basis, the economic data could decline to 0.4% against the former release of 0.8%. On the oil front, oil prices have roared firmly on expectations of consideration of supply cuts by the OPEC cartel to offset the recent weakness. Meanwhile, public unrest in China has been calmed for a while as Chinese marshals have barricaded people at home under coercion. However, the situation has not been solved entirely. It is worth noting that Canada is a leading oil exporter to the United States, therefore, a meaningful recovery in oil prices supports the Canadian Dollar.    
The AUD/USD Pair’s Downside Remains Off The Table

The AUD/USD Pair Remains At The Mercy Of The USD Price Dynamics

TeleTrade Comments TeleTrade Comments 29.11.2022 09:31
AUD/USD regains positive traction on Tuesday amid the emergence of fresh USD selling. Bets for less aggressive Fed rate hikes, a recovery in the risk sentiment weighs on the buck. China’s COVID-19 woes should cap optimistic moves and act as a headwind for the Aussie. The AUD/USD pair attracts some dip-buying near the 0.6640 region on Tuesday and maintains its bid tone through the early European session. The intraday positive move lifts spot prices back above the 0.6700 mark and is supported by the emergence of fresh US Dollar selling. A combination of factors fails to assist the greenback to capitalize on the overnight goodish rebound from the very important 200-day SMA and offers some support to the AUD/USD pair. A dovish assessment of the November FOMC meeting minutes released last week cemented market bets for a relatively smaller 50 bps rate hike in December. This, along with a slight recovery in the global risk sentiment, undermines the safe-haven USD and benefits the risk-sensitive Aussie. That said, the worsening COVID-19 situation in China, should keep a lid on any optimistic move in the markets and act as a headwind for the China-proxy Australian Dollar. In fact, China reported another record-high number of COVID-19 infections on Monday and the imposition of new restrictions prompted a wave of protests in several cities. This adds to worries about a further slowdown in economic activity and might continue to weigh on the market sentiment. Furthermore, the overnight hawkish comments by influential FOMC members should help limit the downside for the buck and further contribute to capping the upside for the AUD/USD pair. It is worth recalling that St. Louis Fed President James Bullard, New York Fed President John Williams and Fed Vice Chair Lael Brainard reiterated that more rate hikes are coming. This, in turn, warrants some caution for aggressive bullish traders and positioning for further gains. Nevertheless, the AUD/USD pair, for now, seems to have snapped a two-day losing streak and remains at the mercy of the USD price dynamics. Market participants now look to the release of the Conference Board's US Consumer Confidence Index for some impetus later during the early North American session. The focus, however, will remain on Fed Chair Jerome Powell's speech on Wednesday and this week's important US economic data, including the NFP report on Friday.
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Analysis Of The USD/INR Pair's Situation By Société Générale

TeleTrade Comments TeleTrade Comments 29.11.2022 09:37
USD/INR has so far defended the ascending trend line since February now at 80.70/80.50. A break below here would expose the 80.00 level and the 200-Day Moving Average (DMA), analysts at Société Générale report. 82.10 is acting as an interim resistance “Currently a bounce is under way however neckline of the pattern at 82.10 is acting as an interim resistance.”  “Daily MACD is in negative territory denoting prevalence of downward momentum.” “Holding below 82.10, a revisit of the trend line near 80.70/80.50 is not ruled out. In case this gets violated, the decline could extend towards 80.00 and perhaps even towards the 200-DMA at 79/78.50.” 
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A Bleak Outlook For The UK Economy Acts As A Tailwind For The EUR/GBP Cross

TeleTrade Comments TeleTrade Comments 29.11.2022 09:39
EUR/GBP lacks any firm intraday direction and remains confined in a narrow trading band. Talks for more aggressive rate hikes by the ECB underpin the Euro and lend some support. Traders look to the flash German CPI and BoE Governor Bailey’s speech for some impetus. The EUR/GBP cross struggles to capitalize on a two-day-old recovery move from the 0.8575-0.8570 support zone and oscillates in a narrow trading band on Tuesday. The cross, however, manages to hold above the 100-day SMA and trades around mid-0.8600s during the early European session. The downside for the EUR/GBP cross remains cushioned in the wake of more hawkish comments by European Central Bank (ECB) policymakers recently, which point to a series of interest rate hikes ahead. In fact, ECB President Christine Lagarde said on Monday that Eurozone inflation has not peaked yet. Adding to this, Dutch central bank chief Klaas Knot noted that the risk of doing too little is clearly more pronounced than doing too much. This, along with the emergence of fresh US Dollar selling, continues to underpin the shared currency and offers support to the cross. Adding to this, a bleak outlook for the UK economy contributes to the British Pound's underperformance and acts as a tailwind for the EUR/GBP cross. This, however, is offset by expectations that the Bank of England (BoE) will continue to raise borrowing costs to combat stubbornly high inflation. The mixed fundamental backdrop, in turn, is holding back traders from placing aggressive directional bets and capping the upside for the EUR/GBP cross. Market participants also seem reluctant ahead of the flash German CPI figures and BoE Governor Andrew Bailey's scheduled speech on Tuesday. From a technical perspective, repeated failures to find bearish acceptance below the 100 DMA warrants some caution for bearish traders. That said, the EUR/GBP pair's inability to gain any meaningful traction makes it prudent to wait for strong follow-through buying before confirming a near-term bottom and positioning for further gains.
Forex: US dollar against Japanese yen amid volatility and macroeconomics

FX: A US Dollar Recovery May Be On The Cards This Week

ING Economics ING Economics 29.11.2022 10:12
Markets are keeping an eye on developments in China with some concern as they prepare for two key risk events – Jerome Powell's speech tomorrow and payrolls on Friday – which look more likely to push rate expectations higher rather than endorsing dovish speculation. When adding the very inverted US yield curve, a dollar recovery may be on the cards this week In this article USD: Bracing for a hawkish Powell EUR: Few signs of abating inflation GBP: Bailey's testimony in focus CAD: Growth figures should allow 50bp hike next week   Markets are bracing for tomorrow’s speech by Fed Chair Jerome Powell, where he is expected to sound hawkish USD: Bracing for a hawkish Powell Risk assets underperformed at the start of this week, with two major variables affecting global sentiment. First, social unrest in China. Investors appear to be gravitating towards the risk-negative narrative of possible instability in the country, despite the fact that this may prompt China to expedite its exit from Covid restrictions – likely a risk-on development. The second element relates to concerns that this week's events, which include tomorrow’s speech by Fed Chair Jerome Powell (where we see a higher likelihood that he will sound hawkish) and US jobs data (which could stay strong), may cause the Fed's communicated and perceived narrative to drift away from dovish pivot expectations. As mentioned in yesterday’s daily, a 2Y10Y UST curve displaying a 75/80bp inversion is indicating a common perception that the Fed will push forward with tightening into a recession. This should be a dollar-positive combination. Today's US calendar includes some housing data as well as the Conference Board Consumer Confidence Index, which is expected to have dropped further in November. There are no scheduled Fed speakers after hawkish comments by John Williams and James Bullard yesterday. We believe the dollar can find some further support today as markets favour defensive trades ahead of key events later this week. Prior to Powell's speech, a return to 107.00/107.50 levels in DXY is possible. Francesco Pesole EUR: Few signs of abating inflation EUR/USD failed to break the 1.0500 threshold yesterday and has dropped back to the 1.0350/1.0400 area after a widespread recovery in the dollar. The eurozone's exposure to China is one key driver to watch for the euro, and it could easily outweigh the benefits of lower energy prices. Today, however, the domestic story will receive a lot of attention. Inflation readings in Germany and Spain will provide hints about eurozone-wide data due tomorrow. The consensus is for German headline inflation to stabilise at 10.4% and eurozone figures to slow slightly tomorrow. It's difficult to see this significantly altering the ECB's narrative, but an above-consensus print may prompt markets to seriously consider a 75bp hike in December (61bp are currently priced). Still, hawkish ECB expectations have not often translated into a stronger euro, and we continue to see the dollar doing the heavy lifting in driving EUR/USD moves. At this point, we believe a drop below 1.0300 is more likely than a rebound to 1.0500. Elsewhere in Europe, Sweden’s GDP numbers have just been published, disappointing on the downside with 2.5% year-on-year growth for the third quarter. Retail sales for October also came in weaker. The next Riksbank meeting is far out (early February), but a softening in data could favour a 25bp hike after last week’s 75bp move. We expect EUR/SEK to end the year around 10.85/10.95. GDP figures will also be released in Switzerland this morning, and a deceleration to 1.0% YoY in growth is expected for 3Q.  Francesco Pesole GBP: Bailey's testimony in focus Today's UK calendar is light on data, but there is one event to keep an eye on: Bank of England Governor Andre Bailey's testimony to the House of Lords. A significant shift in Bailey's policy rhetoric two weeks before the BoE meeting appears unlikely, but the proximity to the meeting also means that markets tend to over-interpret MPC members' comments. In our opinion, the most likely scenario for the December announcement is a 50bp increase; markets are currently pricing in 57bp. Cable has fallen back below 1.2000 as the dollar regained some ground, and we see room for further depreciation into the end of the year as the greenback finds more support and the pound suffers from a bleak UK economic outlook. Francesco Pesole CAD: Growth figures should allow 50bp hike next week As the dollar corrected lower during the past month, the Canadian dollar has lagged behind its G10 counterparts. The decline in crude prices, which have returned to the trading range observed before Russia's invasion of Ukraine, has been the main factor holding back the loonie's recovery. Our commodities team continues to see the upside risks for oil prices into the new year, and CAD’s limited exposure to China/Ukraine and superior liquidity are good arguments to expect CAD to outperform other procyclical currencies in 2023, should risk sentiment stabilise. Today, Canada’s third-quarter growth data will be published, and expectations are for a 1.5% annualised read. This should enable the Bank of Canada to hike by 50bp next week. Francesco Pesole TagsFX Dollar CAD Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
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Saxo Bank Podcast: Electricity Prices Spiking In Europe, Crude Oil Rebounding And Wheat Falling And More

Saxo Bank Saxo Bank 29.11.2022 10:54
Summary:  Today we look at the market trying to recover its feet as it hopes that China will remain on the path toward reopening on fresh signs that it wants to avoid curbing activity excessively after recent civil unrest due to Covid restrictions. We also note, ahead of important incoming US data over the next couple of weeks and a Fed Chair Powell speech tomorrow, that the market is taking a very strong view on the path of Fed policy and the economy, assuming the Fed will succeed in its fight against inflation and will cut aggressively in 2024. Will Powell and/or the data challenge this pronounced view? We also look at electricity prices spiking in Europe, crude oil rebounding and wheat falling, stocks to watch and upcoming earnings reports and macro data. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Markets taking a strong view that Fed will succeed | Saxo Group (home.saxo)
Japanese yen loses as jobless rate go up. Australian dollar down, Dow Jones 30 decreases amid China-COVID realties

Japanese yen loses as jobless rate go up. Australian dollar down, Dow Jones 30 decreases amid China-COVID realties

Jing Ren Jing Ren 29.11.2022 08:20
USDJPY remains under pressure The Japanese yen fell after an uptick in October’s jobless rate. The rebound has met stiff selling pressure in the former demand zone around 142.40. A break below the recent low of 138.00 suggests that the path of least resistance remains down. As more buyers switch sides, increased volatility may drive the pair even lower. 135.90 is the next level to see if buyers would make their way back. Otherwise, the greenback could drift towards 132.00. The psychological level of 140.00 is the first hurdle in case of a bounce. Read next: Meta fined by Irish regulators amidst privacy concerns| FXMAG.COM AUDUSD seeks support The Australian dollar retreats after a lacklustre retail sales reading in October. The pair is looking to hold onto its gains above 0.6700 following a rally earlier this month. A bounce off 0.6580 next to the 20-day moving average indicates interest in safeguarding the aussie’s recovery. 0.6720 is a fresh resistance and a close above 0.6800 would open the door for an extension to September’s peak of 0.6910. On the downside, a dip below said support would put the bulls on the defensive with 0.6400 as a second line of defence. US 30 shows overextension The Dow Jones 30 slips as protests in China against Covid curbs raise concerns about growth. While a rally above August’s high of 34200 is an encouraging sign, the bulls would need to secure their foothold before pushing towards 34700. A bearish RSI divergence indicates a deceleration in the upward momentum and the index could use some breathing room. A slide below 34000 has led some buyers to take profit and 33650 is the next level to gauge their interest. Only a bounce above 34300 would resume the uptrend.
Alphabet Reports Strong Q2 2023 Results with Growth in Advertising and Cloud Services - 24.07.2023

The Australian Dollar (AUD) Has Recovered Most Of Those Losses

Kenny Fisher Kenny Fisher 29.11.2022 12:30
The Australian dollar has rebounded on Tuesday after a poor start to the week. In the European session, AUD/USD is trading at 0.6737, up 1.28%. What goes down … can go right back up. This has been the story early this week for the Australian dollar, which tumbled 1.5% on Monday but has recovered most of those losses today. The Australian dollar was hit hard after a weak retail sales report and widespread unrest in China over the country’s zero-covid policy. The unrest in China has put a damper on risk appetite, as the result is likely to exacerbate supply chain disruptions and dampen domestic spending. Investors may have sensed an opportunity for profit-taking after the massive slide on Monday, which would help explain the rebound today. Fed members keep up the blitz The Fed doesn’t hold a policy meeting for another two weeks, but the Fedspeak blitz, which started after the soft US inflation report sent the markets in a tizzy, continued in earnest on Monday. Fed member Bullard said on Monday the markets could be underestimating the likelihood of higher rates and that the Fed funds rate will have to reach the bottom end of the 5%-7% range in order to curb inflation, which has been more persistent than anticipated. Fed member Williams added that the Fed needed to do more work to tame inflation, which is “far too high”. Fed member Brainard, a dove, expressed concern about inflation expectations rising above the Fed’s 2% target. The Fed has been aggressive in telegraphing the markets that its rate cycle is far from over, a message we’re likely to continue to hear in the coming weeks.   AUD/USD Technical AUD/USD is testing resistance at 0.6707. The next resistance line is 0.6829 There is support at 0.6633 and 0.6511 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Gold's Hedge Appeal Shines Amid Economic Uncertainty and Fed's Soft-Landing Challenge

China's Demand For Commodities, Goods And Production Capacity Is Important

InstaForex Analysis InstaForex Analysis 29.11.2022 14:08
Markets plunged on Monday as unrest in China, which was due to frustration at lockdowns, led to sell-offs. Equity markets closed lower, while crude oil prices dropped significantly. But the downturn is unlikely to last long because even though China's demand for commodities, goods and production capacity is important, a lot depends on the statements of world central banks. For example, St. Louis Fed President James Bullard said interest rates will continue to rise as inflation remains high. Lael Brainard, Thomas Barkin and John Williams said roughly the same thing, although they did not claim that aggressive rate hikes should continue. The upcoming speech of Jerome Powell is also expected to be hawkish, which can put pressure on stock markets and support dollar. There are some that believe that stocks will rally because investors have long since played down the Fed's extreme monetary policy stance. Markets are also reacting with great fervor to positive news, such as the short-term increase after the US published its latest inflation data. If Powell's rhetoric also does not turn out to be hawkish, there is a good chance that risk appetite will surge ahead of the Fed's December meeting. Forecasts for today: USD/CAD The pair is showing a local reversal on the back of a strong rebound in crude oil prices after its fall yesterday. A drop below 1.3415 will push quotes to 1.3320. AUD/USD The pair is rising amid improving market sentiment. A break above 0.6720 could bring the quotes to 0.6800. Relevance up to 08:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328414
Oanda's Kenny Fisher talks US dollar against Canadian dollar

Canadian dollar may fluctuate on Friday as jobs market data is released in the USA and Canada

Kenny Fisher Kenny Fisher 29.11.2022 21:34
The Canadian dollar has steadied on Tuesday, after starting the week with sharp losses. In the European session, USD/CAD is trading at 1.3444, down 0.37%. Canada’s GDP expected to slow Canada will release third-quarter GDP later today, with a consensus of a 1.5% gain. This follows a strong Q2 gain of 3.3%.  The economy has been losing steam as interest rates continue to rise, and there are forecasts for negative growth as early as Q1 of 2023. Last week’s retail sales report did not impress. Retail sales for September came in at -0.5% MoM as expected, but lower than the August gain of 0.4%. More worrying, retail sales fell by 1.0% QoQ, the first quarterly decline since Q2 2020. The Canadian dollar should be busy on Friday, as both Canada and the US release the November employment report. Read next: FxPro's Alex Kuptsikevich: It is unlikely that the Fed would take this step. Monetary policy operates with a lag of about half a year | FXMAG.COM The Fed doesn’t hold a policy meeting until December 14th but Fed members continued to hit the airwaves on Monday. James Bullard said on Monday the markets could be underestimating the likelihood of higher rates and that the Fed funds rate will have to reach the bottom end of the 5%-7% range in order to curb inflation, which has been more persistent than anticipated. John Williams added that the Fed needed to do more work to tame inflation, which is “far too high”. Lael Brainard, a dove, expressed concern about inflation expectations rising above the Fed’s 2% target. The Fedspeak blitz could continue right up the meeting, as the Fed needs the markets to buy into its message that inflation has not peaked and the Fed remains hawkish and plans to keep raising rates. USD/CAD Technical USD/CAD is facing resistance at 1.3478 and 1.3576 There is support at 1.3398 and 1.3300 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar steadies ahead of GDP - MarketPulseMarketPulse
Bitcoin price may be stealing the show soon. We could say that this week Bank of Japan decision draws more attention than usually

Japanese yen gains on the back of situation in China

Kenny Fisher Kenny Fisher 29.11.2022 21:39
The yen is in positive territory for a second straight day. In the North American session, USD/JPY is trading at 138.60, down 0.23%. Earlier, in the day the yen pushed below the 138 line but was unable to consolidate. The widespread protests in China over the country’s zero-Covid policy has unnerved investors, as the unrest is expected to worsen supply chain disruptions and chill domestic spending. The Chinese government has cracked down on the protests, and won’t be easing up on its covid policy until the number of cases drops sharply. The protests have dampened risk appetite and the Japanese yen, a traditional safe-haven, has posted modest gains. Read next: FxPro's Alex Kuptsikevich: It is unlikely that the Fed would take this step. Monetary policy operates with a lag of about half a year | FXMAG.COM The Federal Reserve continues to telegraph a hawkish message to the markets, with the Fed’s meeting two weeks away. Fed member Bullard said on Monday that the markets are underestimating the Fed, adding that the terminal rate could be in the range of 5%-7%. The markets aren’t buying into that forecast, as they have priced the terminal rate at about 5%. The Fed has been signalling that it will raise rates at the December meeting by 50 basis points, but the markets aren’t entirely convinced. The likelihood of a 50-bp move has fallen to 67%, with a 33% chance of a 75-bp move. Just two weeks ago, the ratio was 80-20 in favour of a 50-bp hike. The markets are hunting for clues about the Fed’s plans, and will be listening carefully to Jerome Powell, who is expected to touch on inflation in a speech on Wednesday. Japan’s retail sales for October slowed to 4.3%, down from an upwardly revised 4.8%. This missed the consensus of 5.0%, but retail sales have now recorded gains since March, when Japan began easing border restrictions as Covid cases subsided. USD/JPY Technical There is resistance at 139.82 and 141.58 USD/JPY is testing support at 138.62. Below, there is support at 137.39 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen extends gains - MarketPulseMarketPulse
The EUR/USD Pair Is Still In A High Position On The 1H Chart

Market Reactions To Inflation Reports In The European Union Are Significantly Weaker

InstaForex Analysis InstaForex Analysis 30.11.2022 08:00
On Tuesday, the EUR/USD currency pair was already trading considerably more steadily than it had the day before. We are still unsure of what caused those "roller coasters" that we saw. Yes, there were several unscheduled speeches by Fed officials on Monday, but for some reason, it is hard for us to recall the last time Bullard or Williams gave a routine speech that resulted in such "flights." Furthermore, none of them provided any brand-new, crucial information. Recall that a few weeks ago, Jerome Powell said that the Fed rate could rise a little bit longer than initially anticipated. If the market had previously set a rate of 5% for the pair, the upper limit is now gradually moving in the direction of 5.25% or even 5.5%. But given that this year's expectations for the rate have only increased, what is surprising about this? Remember how one of the Fed's most vocal "hawks," James Bullard, suggested raising the interest rate to 3% at the beginning of the year? Then, as time went on, this value increased gradually to 3.5%, then to 4.5%, and now we are discussing "5% or more." As a result, rates are expected to rise throughout the year, but inflation has only recently started to fall and is doing so at a slow pace. As a result, we are not surprised by the upcoming increase in the "upper limit" of the rate. Furthermore, the market had to figure out these performances in a convoluted manner if at all. The dollar should increase in strength and speed if there is a growing likelihood that new monetary policy tightening will occur. Remember that we have been anticipating a significant downward correction since early last week, but the market has been looking for any justifications to avoid purchasing US currency. The moving average line needs to fix below for the US dollar to start strengthening. In two attempts, the pair was unable to surpass the Murray level of "6/8" - 1.0498, and the total increase from its 20-year lows is already close to 1000 points. Although we still anticipate a sharp decline, we think the euro currency has grown sufficiently to this point. The euro currency may be under stress as a result of the EU inflation report. To start, market reactions to inflation reports in the European Union are significantly weaker than those to comparable reports in the United States. It so happened that in 2022, market participants received a larger share of any news and messages coming from abroad. So, from the outset, we don't anticipate a significant response to this report. Additionally, it is now quite challenging to comprehend how the market decides anything at all. Perhaps the decline we observed on Monday evening and Tuesday during the day is the market's "advance" response to the inflation report? After all, the European Union's consumer price index may slow down for the first time in a long time. At least, this is what the most recent official forecasts indicate. The rate of price growth is anticipated to decrease from 10.6% y/y to 10.3-10.4% y/y. Let it be a modest triumph nonetheless. This situation might be the start of the end for the euro as a currency. Remember that the dollar started to lose value precisely after US inflation started to slow down a few months ago. The market perceived a sharp decline in the likelihood of a Fed rate hike as a result of the slowdown in price growth. The euro currency is now capable of the same thing. The ECB will no longer need to raise interest rates as quickly as possible if inflation in the EU starts to decline. Of course, the Fed increased the rate by 0.75% twice more following the initial slowdown, so the ECB may follow. But we're attempting to predict how the market might respond. As soon as the market realized that inflation was decreasing, it started to reject buying dollars. Therefore, it makes no difference when the ECB slows the rate of tightening; the market can start selling off the euro right away or has commenced this process. Given the current technical landscape and historical context, we think that this course of events would be the most logical. As of November 30, the euro/dollar currency pair's average volatility over the previous five trading days was 97 points, which is considered to be "high." So, on Wednesday, we anticipate the pair to fluctuate between 1.0262 and 1.0454. A potential continuation of the upward movement will be indicated by an upward turn of the Heiken Ashi indicator. Nearest levels of support S1 – 1.0254 S2 – 1.0132 S3 – 1.0010 Nearest levels of resistance R1 – 1.0376 R2 – 1.0498 R3 – 1.0620 Trading Suggestions: The EUR/USD pair is still positioned close to the moving average. In light of this, we should now consider opening new long positions with targets of 1.0454 and 1.0498 if the Heiken Ashi indicator reverses its trend upward. No earlier than fixing the price below the moving average line with targets of 1.0254 and 1.0132, sales will become significant. Explanations of the illustrations: Linear regression channels – help determine the current trend. If both are directed in the same direction, then the trend is strong now. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328512
The Data May Keep The British Pound (GBP) From Rising

GBP/USD Pair: Drop Does Not Even Appear To Be A Correction

InstaForex Analysis InstaForex Analysis 30.11.2022 08:01
The new week began with a decline for the GBP/USD currency pair. This drop does not even appear to be a correction thus far. Any "big," though, always begins with something "small." Recall that for the next week and a half, we anticipate a strong downward correction. While the market has been continuously seeking out new reasons to purchase the pound sterling, unlike the European currency, the pound had good reasons to increase in value. For instance, it was significant that Nicola Sturgeon's request for the right to hold an independence referendum was denied by the Supreme Court of Great Britain. The market also acknowledged for the first time that the Bank of England is actively tightening monetary policy. The resignation of Liz Truss as prime minister and the inauguration of Rishi Sunak may also be advantageous for the pound. Well, it's hard to forget that the initiative to cut taxes was rejected. Taxes will now be increased and spending will be cut, but the economy will benefit from this. The reduction of subsidies and increases in taxes will cause financial difficulties for average Britons, but it is better for the economy if the national debt does not increase by 50 billion pounds. If not more. So, in recent weeks and months, there have been good reasons to buy the pound, but eventually, everything comes to an end. We are currently only discussing correction; however, none of us are aware of the future. We are unable to predict how much the Bank of England will increase the rate. Perhaps it will even go above the Fed rate, in which case the pound will have new justification for an increase of 500–600 points. The possibility of a new escalation in the conflict in Ukraine or between the West and the Russian Federation will raise demand for the dollar, as it did frequently in 2022. We want to emphasize that making forecasts for more than a few weeks out is currently simply impractical. We anticipate that the pair will still start a downward trend correction that could last a few weeks. What will happen next will be heavily influenced by the decisions made by central banks at their most recent meeting this year, as well as inflation data. Is Jerome Powell able to defend the dollar? In general, we don't anticipate Jerome Powell to make any revelations or alter the tone of his rhetoric. We already believe that there are valid reasons to repurchase the dollar from the market because several Fed policymakers have stated that the rate may rise faster and for a longer period than initially anticipated. It's excellent that Jerome Powell most likely shares this viewpoint. Any positive news for the US dollar could act as a "trigger" because, in our opinion, it has already been oversold in some respects. Powell's assertion and confirmation that inflation can remain high for a long time imply the need to exert pressure on it with the aid of monetary policy tools for a long period, and this could serve as the foundation for the US currency's appreciation. Strong labor market data can reassure investors that a recession is not imminent for the US economy. And it is weak if it threatens. The US dollar may benefit from this as well. As a result, we are leaning more and more toward the possibility that both major pairs will start to fall soon. We also want to point out that any fundamental hypothesis is just that—a hypothesis. They shouldn't be worked out without specific technical signals. We frequently discuss tools like bitcoin and concentrate on the fact that many "crypto experts" simply never stop mentioning the exorbitant heights of the value of the original cryptocurrency. But if these predictions come true in a few years and bitcoin itself falls to a point where it is no longer valuable, who would be interested in them? Currency pairs are the same way. Not in a few months, but in the near future, how they move is crucial. Thus, overcoming the moving will make it possible to descend. We anticipate a 500-600 point total decline from the maximum of 1.2153. The pound has been known to fluctuate by that much in recent months. Over the previous five trading days, the GBP/USD pair has averaged 137 points of volatility. This value is "high" for the dollar/pound exchange rate. Thus, on Wednesday, November 30, we anticipate movement that is constrained by the levels of 1.1855 and 1.2130 to occur inside the channel. The Heiken Ashi indicator's upward reversal indicates that the upward movement has resumed. Nearest levels of support S1 – 1.1963 S2 – 1.1902 S3 – 1.1841 Nearest levels of resistance R1 – 1.2024 R2 – 1.2085 R3 – 1.2146 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair is still corrected. In light of this, new buy orders with targets of 1.2130 and 1.2146 should currently be taken into account in the event of an upward turn in the Heiken Ashi indicator or a recovery in the price from a move. With targets of 1.1902 and 1.1855, open sell orders should be fixed below the moving average. Explanations of the illustrations: Linear regression channels – help determine the current trend. If both are directed in the same direction, then the trend is strong now. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     search   g_translate     Relevance up to 01:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328514
Analysis Of The CAD/JPY Commodity Currency Pair - 06.02.2023

Technical Analysis Of The CAD/JPY Cross Currency Pair

InstaForex Analysis InstaForex Analysis 30.11.2022 08:05
On the 4-hour chart the CAD/JPY cross currency pair can be seen that the CCI indicator is in the range of 0 to -100 and is moving below the 100 period Moving Average, so it can be confirmed that sellers are still dominating CAD/JPY while a correction is currently taking place. up and stuck at the level of the Bearish Fair Value Gap area (purple box), now this currency pair will again try to break down the 101.40 level. If it is successfully broken, the next level to be tested is at the 100.18 level during its journey to these target levels there is no upward rally corrective movement past the 104.06 level, so the downward movement is still valid.   Relevance up to 02:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/114869
Mexico’s Central Bank Surprised Markets With A 50bps Rate Hike Once Again

The USD/MXN Pair Is Confirmed To Be Still Moving In A Bearish Area

InstaForex Analysis InstaForex Analysis 30.11.2022 08:08
With price movements moving below the Moving Average of the 100 period and the CCI indicator still moving in the range of 0 to -100 levels on the 4-hour chart, the condition of the USD/MXN currency pair is confirmed to be still moving in a bearish bias while currently an upward correction is occurring. stuck at the Resistance level 19,268-19,240 if this level area is strong to hold the upward correction rate and does not exceed the 19,390 level then USD/MXN will have the potential to fall again down to the 19,036 level.   Relevance up to 02:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/114865
At The Close On The New York Stock Exchange Indices Closed Mixed

The Main Indices Fell At The Close Of The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 30.11.2022 08:17
At the close of the New York Stock Exchange, the Dow Jones rose 0.01%, the S&P 500 fell 0.16%, and the NASDAQ Composite fell 0.59%. Dow Jones Dow Inc was the top gainer among the components of the Dow Jones index today, up 1.15 points or 2.32% to close at 50.65. Quotes of American Express Company rose by 3.55 points (2.35%), closing the session at 154.42. Boeing Co rose 3.49 points or 2.03% to close at 175.32. Shares of Apple Inc became the losers, the price of which fell by 3.05 points (2.11%), ending the session at 141.17. Salesforce Inc was up 1.31% or 2.01 points to close at 151.68, while Visa Inc Class A was down 1.04% or 2.20 points to close at 209. .06. S&P 500 Leading gainers among the S&P 500 index components in today's trading were Under Armor Inc A, which rose 4.79% to hit 9.84, Celanese Corporation, which gained 4.75% to close at 105.56, and also shares of Ralph Lauren Corp Class A, which rose 4.36% to close the session at 112.66. The biggest losers were Illumina Inc, which shed 3.84% to close at 208.57. Shares of PayPal Holdings Inc lost 2.87% to end the session at 77.64. Enphase Energy Inc lost 2.83% to 303.39. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Otonomy Inc, which rose 113.82% to hit 0.23, Apollo Endosurgery Inc, which gained 67.83% to close at 10.07, and shares of OncoSec Medical Inc, which rose 50.98% to end the session at 3.85. The biggest losers were Digital Brands Group Inc, which shed 34.17% to close at 4.74. Shares of Eqonex Ltd lost 33.88% and ended the session at 0.09. Quotes of Secoo Holding Ltd decreased in price by 32.49% to 1.60. Numbers On the New York Stock Exchange, the number of securities that rose in price (1866) exceeded the number of those that closed in the red (1241), while quotes of 108 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,888 stocks fell, 1,862 rose, and 205 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.44% to 21.89. Gold Gold futures for December delivery added 0.47%, or 8.15, to $1.00 a troy ounce. In other commodities, WTI crude futures for January delivery rose 1.90%, or 1.47, to $78.71 a barrel. Brent crude futures for February delivery rose 0.95%, or 0.80, to $84.69 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.07% to 1.03, while USD/JPY fell 0.18% to hit 138.70. Futures on the USD index rose 0.11% to 106.75.     Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/303091
The AUD/USD Pair’s Downside Remains Off The Table

Technical Outlook Of The Australian Dollar To US Dollar Pair (AUD/USD)

InstaForex Analysis InstaForex Analysis 30.11.2022 08:27
After the aussie sharply fell by 100 pips on Monday, the price momentarily overcame the decline on Tuesday, but closed the day below resistance at 0.6700. The bears won. The bulls' actions were probably due to the growth in oil (WTI 0.70%) and other commodities. Now the price, in connection with the release of the US employment and GDP data today, will pay more attention to the European currencies. According to the main scenario, we expect the price to test the support at 0.6595. Then we expect it to break through the support and fall in the target range of 0.6514/32 or even lower, to the MACD line (0.6453). On the four-hour chart, the price has settled below 0.6700. The Marlin oscillator, seeing how the price failed to cross the MACD line, has moved into a descending trend area.     Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328522
The Pound Is Now Openly Enjoying A Favorable Moment

US Data May Provide The Movement Of GBP/USD Pair

InstaForex Analysis InstaForex Analysis 30.11.2022 08:29
Yesterday, the pound retreated from the support at 1.1940. It closed the day near this level, which shows that the bears really intend to fight this support and go further. Yesterday's mortgage data from the UK turned out to be worse than expected. The UK will not release any report today, but we will receive important US data. Q3 GDP in the 2nd estimate may be revised up from 2.6% to 2.7%. The Nonfarm payrolls data from ADP for November is expected to show 200,000 new jobs. Even the foreign trade balance is expected to narrow the negative balance. The Marlin oscillator is falling on the daily chart, technically putting pressure on the price. With the quotes moving below 1.1940, we are waiting for it to reach support at 1.1737, the high on September 13. The price settled below the MACD line on the four-hour chart. Also, the Marlin oscillator is in negative territory. Apparently, the price is just waiting for an external signal to start moving. Today's US data may provide such a signal. Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328524
The Euro To US Dollar Instrument Did Not Change In Value

The EUR/USD Pair May Continues To Struggle With The Balance Indicator Line

InstaForex Analysis InstaForex Analysis 30.11.2022 08:33
Yesterday, the euro tried to return to the area above the upper limit of the global range (1.0360), but it closed the day by falling 9 pips. As a result, technically nothing has changed, even on the lower time frames. Like yesterday, the price, under pressure due to divergence on the daily chart, is trying to reach the target level of 1.0205. The stock indices closed yesterday mixed, but mostly in the red zone. The probability of the Federal Reserve rate hike by 0.75% at the December meeting is at 15%. Also, market participants are tuning in to the good employment data on Friday - the Nonfarm payrolls forecast is 200,000. The yields on the U.S. government bonds continue to climb slowly. On the four-hour chart, the price continues to struggle with the balance indicator line. When the price settles below the line, it will indicate the bears' victory and a change in the short-term balance of power. In this case, the Marlin oscillator signal line staying in the negative area helps the bears. We expect the price to reach the target level of 1.0205.     search   g_translate     Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328526
Euro to US dollar - Ichimoku cloud analysis - 21/11/22

If ECB policymakers should make a decision between fighting inflation and avoiding recession, they will likely choose fighting inflation says Ipek Ozkardeskaya

Ipek Ozkardeskaya Ipek Ozkardeskaya 29.11.2022 20:58
Our editors asked Swissquote's Ipek Ozkardeskaya about her thoughts about this week's data, which seems to be crucial ahead of decisions of Federal Reserve and European Central Bank. What's more, we're astonished by Black Friday results which are said to near $10bn, so we asked Ipek for a comment on this case as well.   The ECB, nor any other central bank, can't choose to escape recession over fighting inflation   The ECB, nor any other central bank, can't choose to escape recession over fighting inflation, because inflation is toxic for an economy in the long run, and should be dealt with rapidly to avoid it from becoming structural. Therefore, if ECB policymakers should make a decision between fighting inflation and avoiding recession, they will likely choose fighting inflation. They could however adjust the speed and the force of their action according to the economic conditions. in this respect, recession could slow down the pace of tightening but won't stop it.   Read next: Investors also seem to have become less sensitive to the Ukraine War, which was a significant driver of crude in the first half of 2022 says Finimize's Luke Suddards | FXMAG.COM    This week's prints stand for the last data pack ahead of December Fed decision, supposing they came as a surprise would Fed go for a 75bp rate?   Probably not. The Fed has been clear enough in its communication that they are not done fighting inflation. However, because there is a delay between the monetary policy action and the economy's reaction, the Fed officials prefer taking smaller steps while keeping the topside open for higher rates. Therefore, I wouldn't expect the Fed to surprise with another 75bp hike in December. Unfavourable economic data - stronger-than-expected jobs, high-than-expected inflation - would rather be felt for the Fed's end-rate expectations. For now, it is around 5-5.25%.       When it comes to the Black Friday sales, there are two positive forces that explain the record figures   Despite the record Black Friday sales, retailers broadly reported a rise in inventories and slowing discretionary spending ahead of the peak US shopping season. When it comes to the Black Friday sales, there are two positive forces that explain the record figures. 1. Higher inflation pumps up the final numbers. 2. It is possible that people chose to take advantage of promotions as their purchasing power weakened by inflation. This may explain why we had record Black Friday sales this year.    But even if we factor in inflation there is still be growth in this year's holiday consumption.   This is not necessarily great news for the Fed, which targets a consumer-led recession to slow down inflation. Therefore, the US record pre-holiday sales, combined with the strong monthly retail sales data hint that the US consumer demand has not weakened enough to tame inflation. This means that the Fed would only feel more comfortable pushing its rates higher and get the slow down it is looking for.
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

GBP/USD Pair: Technical Outlook Points To A Recovery In Bullish Momentum

InstaForex Analysis InstaForex Analysis 30.11.2022 08:36
Early in the European session, the British pound is trading around 1.1972, above the 200 EMA , and below the 21 SMA located at 1.1983. According to the 1-hour chart, we can see that the British pound is trading within a downtrend channel which has been developing since November 22. The British pound is likely to trade within this bearish channel due to the release of US unemployment data (NFP) over the weekend. The pair is likely to consolidate between 1.1870 and the psychological level of 1.2000. The November FOMC minutes released last week calmed down market anxiety and investors are expecting a 0.50% rate hike in December. Such prospects are fueling risk appetite which is likely to encourage the British pound to continue its rise in the days ahead. In case risk appetite continues to dominate financial markets, the pair could extend its rise. The technical outlook also points to a recovery in bullish momentum and the price could reach the zone of +2/8 Murray at 1.2207. In case the GBP/USD pair trades above 1.1985 (21 SMA), we could expect it to reach the resistance zone that coincides with the top of the bearish channel at 1.2045. Additionally, in the event of a daily close above this level, we could expect a rally towards +2/8 Murray located at 1.2207. Conversely, in case the British pound technically bounces around the downtrend channel support, it could be a clear opportunity to buy with targets at 1.1970 and 1.2040. Our trading plan for the next few hours is to buy above 1.1883 with targets at 1.2045 and wait for a sharp break above 1.2050 to continue buying with targets at 1.2117 and 1.2207. In case there is a technical rebound around 1.1870, it will also be a signal to buy. The eagle indicator reached the extremely oversold zone on November 28. A technical bounce is likely to happen in the next few hours. Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/303099
The EUR/USD Pair Has A Potential For Drop

The EUR/USD Pair Is Gravitating Towards Growth

InstaForex Analysis InstaForex Analysis 30.11.2022 08:39
Analyzing trades on Tuesday: EUR/USD on 30M chart Yesterday, EUR/USD traded much more quietly than it did on Monday. Since there was no macroeconomic and fundamental background, traders could use news and events. But there wasn't any of that either. That's why Tuesday's volatility was only 70 pips, which was way below the average, and there was no movement. Even after it climbed to 1.0465 and tried to continue the upward movement, I still expect a strong bearish correction. We have been talking about it for more than a week, but what can we do if the market still refuses to buy the dollar right now. The fundamental background from the last couple of days enabled the dollar to rise. The technical picture allows a downward correction. However, the market waits. It is possibly waiting for Federal Reserve Chairman Jerome Powell's speech or Friday's Nonfarm Payrolls report. And these events can push the dollar to fall, but I still look at the fall as the main option. EUR/USD on M5 chart It is perfectly visible on the 5-minute chart that there was no trend on Tuesday. The price was moving solely between 1.0354 and 1.0391 during the European session. These levels couldn't be considered a wide range, but when the signal formed inside it, the price immediately went near the opposite level. Therefore, it was possible to put 50 pips between them, so there was no point in analyzing each signal because they were all the same. Only the last bounce from 1.0391 caused a sharp fall, and the price even stopped below 1.0354, but soon it returned to the area above that level, so the short position was closed with the same 10 pips as the last four trades. You could have gotten a loss on the last buy signal. Therefore, beginners could gain 20-30 pips in total on Tuesday, which is not bad for the flat. Trading tips on Wednesday: The uptrend has been canceled on the 30-minute time frame, but it may resurface. The pair is gravitating towards growth, but there is no ascending trend line anymore. We witnessed both equally strong growth and decline. In my opinion, the technical picture is very confusing right now. On the 5-minute chart on Wednesday, it is recommended to trade at the levels of 1.0156, 1.0221, 1.0269-1.0277, 1.0354, 1.0391, 1.0433, 1.0465-1.0483, 1.0535. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. Today, three rather important reports will be published and Powell will also deliver a speech. In Europe, we will pay attention to the inflation data for November, in America, we will pay attention to the ADP and GDP reports. Each of them may provoke a reaction, but the most important ones will be European inflation and Powell's speech. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.     search   g_translate     Relevance up to 01:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328508
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The GBP/USD Pair Has An Opportunity To Break The Uptrend

InstaForex Analysis InstaForex Analysis 30.11.2022 08:42
Analyzing trades on Tuesday: GBP/USD on 30M chart GBP/USD trade did not show any interesting movement on Tuesday. Volatility was around 120 pips, which is not that small for an empty day. Therefore, the pound was more active than the euro. Accordingly, its movements were also more appealing. Yesterday, the pair settled below the ascending trend line, so we expect the pound to fall. We anticipated it even before the pound settled, now nothing has changed. There were no important events and reports in the UK and US on Tuesday, but Wednesday has a lot to offer. Therefore, the second half of the week may be more active and volatile than the first half. We still believe that the pound has more room to rise in the medium term, but at the same time, it cannot move up all the time. It needs corrections from time to time, and we're waiting for one now. GBP/USD on M5 chart On the 5-minute chart, we can clearly see that the movement on Tuesday can not be considered as flat, but at the same time, we observed a flat for most of the day. The same thing applies for the euro. Almost all the trading signals were formed near 1.1994, which was considered irrelevant by the end of the day. Moreover, each of these signals was so inaccurate that it was hard to say whether it was a buy or sell signal. Thus, it was inconvenient to trade on Tuesday. In any case, beginners had to try to work out the first two signals near 1.1994, both turned out to be false. They could get a small loss on the first short position, then a Stop Loss at breakeven worked on the second long position since the price passed with the necessary 20 pips in the right direction. All further signals around 1.1994 should not have been processed. You could try to open a position on the signal around 1.1957, but it wouldn't make much profit. However, it would have covered the loss on the first position, so in that sense, it is considered profitable. As a whole, the day ended without us making any profit, which is very good if you consider the pair's movement. Trading tips on Wednesday: The pair finally has an opportunity to break the uptrend on the 30-minute time frame. Since the price finally settled below the trend line, we can now expect a downtrend. I already expected a sharp downtrend as early as last week, now both currency pairs can initiate it. On the 5-minute chart on Wednesday, it is recommended to trade at the levels 1.1793, 1.1863-1.1877, 1.1950-1.1957, 1.2064-1.2079, 1.2141, 1.2186-1.2205, 1.2245-1.2260. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. On Wednesday, there will be nothing interesting in the UK, but there will be important GDP and ADP reports in America, and Federal Reserve Chairman Jerome Powell will also speak in the evening, which will naturally attract the market's attention. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.       Relevance up to 01:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328510
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The Euro To US Dollar Pair Showed Quite Strange Movements

InstaForex Analysis InstaForex Analysis 30.11.2022 09:03
M5 chart of EUR/USD Yesterday, the euro/dollar pair showed quite strange movements. To be more precise, the movements were quite logical, since there were no important events. Therefore, the flat was quite predictable. But at the same time, there were not so many important macroeconomic and fundamental events either on Monday, and yet the pair still grew by 150 points and went down by the same amount. That is why the "roller coaster" started a flat, and such a move was not profitable. Nevertheless, the pair as a whole continues to correct against an uptrend, but the movement is still sluggish and uncertain. The price can settle below the important Senkou Span B line very soon, which can considerably increase the probability of further declines. Recall that we keep expecting a strong bearish correction, which still hasn't started. The price has already moved below the trend line and crossed the critical line, but traders are still not in a hurry to buy the dollar. Probably waiting for the Nonfarm data or Federal Reserve Chairman Jerome Powell's speech. As for trading signals, the situation was such that there was no point in putting it on the chart. The pair spent almost the entire day in the 1.0340-1.0366-1.0393 range (Kijun-Sen). These three levels should be considered as a range, since the distance between them did not exceed 30 pips. The pair tried to settle below this area during the US session, but by that time it was clear that the market was flat. COT report As for Commitment of Traders (COT) reports in 2022, they reflected bullish sentiment in the first six months of the year although the euro was bearish. Then, they illustrated bearish sentiment for several months with the euro being also bearish. Currently, the net position of non-commercial traders is again bullish and increasing. Meanwhile, the euro has hardly retreated from its 20-year lows. This is due to the fact that demand for the greenback is high amid a difficult geopolitical situation in the world. Therefore, despite a rise in demand for the euro, buoyant demand for the dollar does not allow the euro to strengthen. During the reporting week, the number of long positions held by non-commercial traders rose by 7,000 and that of short positions increased by 2,000. Consequently, the net position advanced by 5,000. The euro's recent growth is gradually coming in line with the figures illustrated in the COT report. Still, the greenback may resume growth under the influence of geopolitical factors or the lack of factors for further strengthening in the euro. The green and red lines of the first indicator moved far away from each other, which may indicate the end of the uptrend. The number of long positions exceeds that of short positions by 113,000. Therefore, the net position of non-commercial traders may continue to rise further, but without triggering a similar rise in the euro. When it comes to the total number of longs and shorts across all categories of traders, there are now 39,000 more short positions (635,000 vs 596,000). H1 chart of EUR/USD Lately, EUR/USD has shown absolutely inadequate movements on the one-hour chart. It still hasn't started a downward movement even after it crossed the ascending trend line. Yesterday, the pair updated its last local high, but failed to break through the important level of 1.0485. And now it may start a strong bearish correction, which we already expected a week ago. On Wednesday, the pair may trade at the following levels: 1.0124, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as Senkou Span B lines (1.0351) and Kijun Sen (1.0407). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On November 30, we can look forward to the following reports: the EU inflation data for November, which is quite significant, and in America, we have GDP and ADP reports, as well as Powell's speech. Therefore, we have a good amount of important events today. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 02:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328516
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

The Pound (GBP) May Show A Solid Decline In The Near Future

InstaForex Analysis InstaForex Analysis 30.11.2022 09:06
M5 chart of GBP/USD Yesterday, GBP/USD struggled to continue its downward movement after crossing the ascending trend line, but spent the entire day between the Senkou Span B and Kijun Sen lines. So technically we have a bearish correction, but it is very weak and inconclusive. Nevertheless, I still expect the dollar to significantly strengthen, which would be logical from a technical perspective. But important data will be released today, which might change traders' sentiment from bearish to bullish. For instance, Federal Reserve Chairman Jerome Powell's speech might well keep the dollar from strengthening further. But I still expect the pound to fall further, since it has grown too much recently. Now I'm waiting for the quote to cross the important Senkou Span B line, which will open the way for the pound to fall further. Although the pound was not in a classic flat on Tuesday, the character of the movement was such that it would be better for traders not to enter the market on that day. The pair moved between 1.1974 and 1.2007, which is considered a range but at the same time the price was regularly moving above and below this area. This is why there were plenty of signals, but the pair was never able to approach any of the target levels. The first buy signal appeared during the European session, so at least losses were avoided, as the price moved up more than 20 pips making it possible to place the Stop Loss without getting a loss. Then several more signals for long positions were formed, and the loss was almost inevitable. All subsequent signals around this area should not be processed since the first few signals were false. COT report The latest Commitment of Traders (COT) report on GBP logged a slight decrease in bearish sentiment. In the given period, the non-commercial group closed 1,900 long positions and 8,800 short positions. Thus, the net position of non-commercial traders increased by 7,000. The net position is gradually growing during the last months, but the sentiment of the big players is still bearish. The pound has been rising in recent weeks, but so far it does not seem that it is preparing for a long-term uptrend. And, if we remember the euro's situation, then based on the COT reports, we can hardly expect a surge in price. The demand for the US currency remains very high, and the market, as it seems, is just waiting for new geopolitical shocks so it can return to buying the dollar. The non-commercial group now has a total of 67,000 shorts and 34,000 longs opened. As we can see, there is a wide gap between them. As it turns out the euro is now unable to show growth when market sentiment is bullish. When it comes to the total number of long and short positions, here bulls have an advantage of 17,000. Still, this is not enough for the sterling to increase. Anyway, we are still skeptical about the pound's long-term growth although the technical picture shows otherwise. H1 chart of GBP/USD The pair started moving down on the one-hour chart, which we have been waiting for. It has crossed the trend line, so the uptrend is officially canceled. I believe that the pound may show a solid decline in the near future, but for now it needs to break through at least the Senkou Span B line and hope for support from this week's fundamental background. On Wednesday, the pair may trade at the following levels: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259. Senkou Span B (1.1930) and Kijun Sen (1.2045) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Wednesday, there are no important events or reports for the UK, but there will be important reports in the US and also a speech from Powell. Therefore, volatility and trend movement could be quite strong today. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 02:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328518
Analysis Of The EUR/JPY Pair Movement

The USD/JPY Pair Will Become More Volatile In The Near Future

InstaForex Analysis InstaForex Analysis 30.11.2022 09:14
The dollar-yen pair is passing the time for the second straight session in anticipation of a strong impulse. It can happen right now. The Fed chief's speech should persuade the pair to turn around. The dollar index tested a weekly high on Wednesday during Asian trading before dropping 0.13% to 106.7. The US dollar continues to sway back and forth as market uncertainty about the likelihood of US interest rate increases is out of this world. Recall that the Fed launched the most ferocious anti-inflation campaign of any central bank this year. This helped the greenback to strengthen significantly against its main competitors. It rose to 114.78 in September, marking a 20-year high. The latest report on US inflation turned out to be weaker than anticipated. As a result, increased expectations that the Fed may slightly slacken its monetary rate have caused the dollar to drop twice to 105 since the middle of this month. This week, the market's mood has once again changed. Recent remarks by Fed officials have caused traders to question whether the US is winning the war against rising prices. John Williams, the president of the Federal Reserve Bank of New York, stated on Monday that the central bank must tighten monetary policy more quickly. James Bullard, a colleague from St. Louis, emphasized that interest rates will increase even more the following year. Due to these positive remarks, a rate increase in December is now much more likely by 75 basis points. Although only a few people believed it a few weeks ago, traders now estimate it to be 37%. The dollar, which appeared to have reached the peak of its bullish potential, was revived by escalating hawkish market expectations. The dollar has been able to strengthen recently in nearly all key areas, but not simultaneously with the JPY. The yen, which has suffered more than other currencies this year due to a sharp rate hike in America, is currently holding on to its last hope that the Fed will soon adopt less hawkish policies with all its might. The "Japanese" gained more than 7% against the dollar this month thanks to speculation about a potential slowdown in American rate increases. The yen was knocked back to earth this week by the most recent remarks made by Fed officials, which slowed the sharp recovery. The USD/JPY pair is currently frozen in anticipation of a clearer signal that should shed light on the future dynamics of interest rates in America. The pair is trading in a very small price range of 138–139. In the opinion of many analysts, Jerome Powell's speech today should be a significant catalyst for the dollar-yen asset. His first public appearance since the FOMC meeting in November will be this one. Dollar bulls anticipate that J. Powell, the head of the US Central Bank, will ride this wave, given that his colleagues this week expressed hawkish views. If the Fed chief emphasizes the need for additional aggressive tightening or makes another hint at a higher level of final rates, the dollar will soar if this happens. In this case, the yen is unlikely to be able to maintain its current levels and will probably give up the positions it has worked so hard to gain. There is, of course, another scenario that, on the other hand, might cause another weakening of the dollar. The dollar is unlikely to hold up if traders interpret J. Powell's recent statements as more dovish, especially compared to the yen. Analysts believe that the USD/JPY asset will become more volatile in the near future. Whatever the Federal Reserve chairman says today will drastically impact the market. The dollar-yen asset could still weaken further, according to UOB analysts' technical analysis of the USD/JPY pair, but they also point out that its downward momentum has slowed. According to experts, we are currently observing a strong oversold major, which suggests that a decline to the next support at the level of 137.00 is unlikely. Only if the USD/JPY pair breaks through at roughly 139.60, regarded as a strong resistance level, will the dollar's bearish momentum finally end.     search   g_translate     Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/328544
Decarbonizing Steel: Contrasting Coal-based and Hydrogen-based Production Methods

Forex Market: The Inflation Print Will Be Key For The Polish Zloty (PLN)

ING Economics ING Economics 30.11.2022 09:20
Fed Chair Jerome Powell will remind the market of the central bank's hawkish determination today, supporting the dollar. Meanwhile, softer inflation is trimming expectations in the eurozone. Polish inflation will test the central bank's decision not to raise rates. And the EC will publish a statement on Hungary and its rule-of-law progress In this article USD: Holding pattern EUR: Inflation plays second fiddle to Powell GBP: Lack of domestic drivers CEE: Polish inflation will test central bank dovish camp   Federal Reserve USD: Holding pattern Despite geopolitical challenges to the East, it has been a quiet start to the week for FX markets. The trade-weighted dollar index DXY is tracing out a relatively narrow range in the 105.30 to 108.00 area. The next clear catalyst on the agenda is a speech by Fed Chair Powell tonight at 1930CET discussing the economy and the labour market. This comes at a time when the buy-side report two of their top three tail risks as: i) inflation staying high and ii) central banks staying hawkish. (The third being geopolitics.) We would say that Chair Powell has recently shown to be at the more hawkish end of the spectrum and that tonight’s event risk is a positive one for the dollar. Dollar price action after Chair Powell’s speech should also tell us something about FX positioning. If the dollar fails to rally on a hawkish speech it may continue to tell us that the market is caught long dollars at higher levels and that some further consolidation may be due into December. For the time being, however, we think the macro environment continues to favour the dollar and see Powell’s speech, the October PCE price data (Thursday) and November jobs data (Friday) as upside risks to the dollar. Chris Turner EUR: Inflation plays second fiddle to Powell Spanish and German inflation came in lower than expected yesterday. The German CPI fell 0.5% to 10.0% in November, thanks primarily to the energy base effect and lower prices for leisure and entertainment following the autumn holiday period, while food prices continued to rise. Our economics team remains sceptical that this is the series' peak, and we expect inflation to accelerate again in December. Yesterday’s numbers mean that markets are expecting a lower reading in the eurozone-wide CPI today. However, some impact on European Central Bank rate expectations has already occurred, as markets have trimmed around 7bp from December pricing, which is now at 54bp. President Christine Lagarde is scheduled to speak at least twice more before the 15 December policy announcement, but she may not change markets' expectations of a 50bp hike. The impact of the inflation story on the EUR/USD has been, predictably, limited. External factors and dollar dynamics continue to drive the pair's performance, and we see downside risks today given that Fed Chair Powell is scheduled to speak later. A break below 1.0300 could fuel more bearish momentum, bringing EUR/USD back to the 1.0200/1.0250 levels seen earlier this week. This morning, Norges Bank will publish daily FX sales for the month of December. Higher-than-expected NOK sales in 3Q22 contributed to NOK weakness, but the Bank unexpectedly reduced them in November from NOK 4.3 billion to 3.7 billion. Any further reductions may support the currency today. Francesco Pesole GBP: Lack of domestic drivers Yesterday’s testimony by Bank of England Governor Andrew Bailey did not yield any market-moving headlines. Today we’ll hear from Chief Economist Huw Pill, who recently pushed back against a 75bp hike and may therefore keep BoE rate expectations in check. Cable to test 1.1800 as Powell’s speech may support the dollar today. Francesco Pesole CEE: Polish inflation will test central bank dovish camp Today's calendar offers November inflation in Poland, the first print in the CEE region. We expect inflation to be unchanged at 17.9% year-on-year, close to market expectations. However, as usual, the range of surveys is wide, and in addition, Polish inflation has by far posted the biggest surprise in the region over the past three months. Given the pause in the National Bank of Poland's hiking cycle, we can expect a lot of market attention. We will also see the second release of Poland's 3Q GDP, which surprised positively in the flash reading (0.0% vs 0.9% quarter-on-quarter) a few weeks ago. In Hungary, PPI for October will be published and later today the European Commission is expected to release a statement on the progress made in the rule of law dispute and Hungary's access to EU funds. The statement should have been published last week; however, the EC requested more time. Reports from journalists suggest that the EC will recommend freezing part of the cohesion funds with conditions to be met by Hungary but will also recommend approval of the Recovery Plan. Yesterday's reports also suggest that the Ecofin decision will be postponed from 6 December to 12 December, but Hungarian officials remain optimistic about the final decision. In the Czech Republic, the Czech National Bank will publish its semi-annual Financial Stability Report including possible changes to macroprudential tools. We do not expect significant changes to the current mortgage rules or capital requirements for the banking sector, but we will see a press conference later today, which should be attended by the governor, who has not been seen in public very often in recent months. In the FX market, the inflation print will be key for the Polish zloty, which could revive market expectations and support the zloty in the short term. However, unchanged inflation would leave the zloty under pressure from a stronger dollar, moving back above 4.70 per euro, in our view. The Hungarian forint should benefit from the normalisation of EU relations and the end of the risk of a permanent loss of EU money. This should help the forint below 405 per euro. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The NZD/USD Pair Tested The Dynamic Resistance Level

InstaForex Analysis InstaForex Analysis 30.11.2022 09:23
NZD/USD The currency quotes for the pair NZDUSD are shown in the screenshot of the chart. The chart still contains the geometrical constructions from the previous technical analysis. The pair's quotes tested the dynamic resistance level of $0.6217 at the time of writing. The upward trend that began on 10.10.2022 and reached a local maximum of $0.6278 is not likely to continue any time soon. In other words, mainly lateral movement is anticipated within the chart's boundaries or $0.6100 to $0.6278 for each New Zealand dollar.   Relevance up to 08:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328557
FX Daily: Upbeat China PMIs lift the mood

The Chinese Authorities To Prepare For Further Easing In Its Covid Policy

Saxo Bank Saxo Bank 30.11.2022 09:31
Summary:  A dash of optimism on Tuesday with Chinese officials continuing their commitment to ease the Zero Covid policies, but US economic data continued to disappoint and focus remains on how hawkish Fed Chair Powell can get today. Along with that, a slew of pivotal US data in the week ahead kept the US dollar range-bound. Crude oil market however continued to see volatility despite easing China demand concerns, as OPEC+ production cut hopes were shattered with the weekend meeting moving online. Eurozone CPI on watch today while the softer Australia CPI for October paves the way for RBA to maintain its slower rate hike path next week. What’s happening in markets? The major US indices, the Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) continue to retreat The major US indices ended weaker, with NASDAQ100 sliding 0.7% and the S&P500 edging down 0.2% as investors are awaiting Fed Chair Powell’s speech later Wednesday. Powell will likely underscore the Fed’s desire to keep interest rates at elevated levels until inflation eases. The latest US consumer confidence reading (released Tuesday) for November showed US consumer confidence fell to a four-month low. The biggest drag on US markets on Tuesday, were information technology, utilities, and consumer discretionary. Apple (AAPL) shares fell 2.1% after the company said that it would deliver 6 million fewer iPhone Pro units in Q4 due to production disruption in Zhengzhou, China. The real estate, energy, financials, industrials sectors outperformed. United Parcel Services (UPS:xnys) gained 2.8% after the Biden Administration called on Congress to prevent a U.S. rail strike. Apple (AAPL) shares fell 2.1%, continuing their three-day pull back, which totals almost 5% ..on the back of the covid lockdown fallout in China. Apple relies heavily on the key manufacturing hub of Zhengzhou, which is now in lockdown. And as a result Apple’s production shortfall could be close to 6 million iPhone Pro units this year (this is according to people who know about Apple’s assembly operations). These reports are swirling at a time when Apple previously dropped its overall production target to about 87 million units (down from the prior 90 million estimate) on the back of demand slowing. However, Apple and the Foxconn facility are allegedly planning to make up the shortfall in lost output in 2023. But, looking at Apple shares from a technical perspective, its trading 8% lower than its 200 day moving average and the indicators suggest Apple shares could see further downward pressure - as suggested by the weekly and monthly charts. US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rose in yields ahead of Fed Chair Powell’s speech Yields edged up across the yield curve with those in the long-end rising the most. The 2-year yield rose 4bps to 4.47% while the 10-year was 6bps cheaper at 3.74%. Large supply from corporate issuance put some upward pressure on yields. There were about 11 deals with a total amount of about USD18 billion, including USD8.25 billion from Amazon, on Tuesday. Fed Chair Powell is scheduled to speak on the economy and labor market at a Brookings Institution event today on Wednesday at 1:30 U.S. eastern time (2:30am SG/HK). Investors are concerned if Powell would give hints of a terminal Fed Fund rate higher than the 5% being priced in by the market. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) surged on renewed optimism about reopening and additional support to the property sector Hang Seng Index surged 5.2% and Hang Seng TECH Index jumped 7.7%. All sectors gained, with information technology, consumer discretionary, and properties leading the charge higher. The CSI 300 gained 3.1%. The market sentiment was first buoyed by new measures from the Chinese securities regulator to relax its restriction on property developers from equity financing. Then the renewed optimism about China reopening from stringent pandemic control added to the market rally. Leading Chinese developers listed in Hong Kong jumped by 3-14%. In the mainland’s A-share markets, real estate, financials, and food and beverage led the charge higher. The strong revenue and margin beat of Pinduoduo (PDD:xnas) aided the surge of Alibaba (09988:xhkg) by 9.1% and JD.COM (09618:xhkg) by 10.9%. The ADR of Bilibili (BILI:xnas) jumped 22% overnight after reporting results beating market expectations. FX: Dollar range-bound ahead of Powell’s speech While the commodity currencies gained on Tuesday after a relief that China officials maintained their commitment to ease the Zero covid policies despite the protests and a recent rise in cases, cyclical currencies like CAD weakened as crude oil futures traded lower. Overall the dollar was range-bound with expectations around a hawkish Powell today picking up given the substantial easing in financial conditions. EURUSD remained stuck below 1.0400 while USDJPY has gains above 139 getting limited. Crude oil (CLZ2 & LCOF3)volatile with large inventory drawdown ahead of OPEC The relief from continued commitment of China officials to ease zero covid restrictions helped crude oil prices gather some momentum early on Tuesday, but the cheer was short-lived as other concerns still clouded the outlook. US economic data showed economic momentum is weakening, while Fed Chair Powell’s speech today will be key for the dollar and the markets. On the supply side, API survey reported a larger than expected crude draw, with inventories down 7.80mm b/d (exp -2.49mm b/d) but production cut expectations from OPEC (read below) this weekend eased as the meeting moved online. WTI futures traded around $79/barrel, while Brent traded lower after touching $86/barrel earlier. Technical update on Brent crude oil from Kim Cramer, our Technical Analyst. The update also takes a closer look at WTI crude oil, Dutch TTF gas and Henry Hub natural gas.   What to consider? US data disappoints, all eyes on Powell Consumer confidence pared back in November to 100.2 from 102.5 (exp. 100.00); the Present Situation Index decreased to 137.4 from 138.7 last month, while the Expectations Index declined to 75.4 from 77.9. Meanwhile, home prices in 20 large cities slipped 1.2% in September, according to the S&P CoreLogic Case-Shiller gauge. More critical data from ISM to PCE to NFP is lined up for the second half of the week, but before we get there, Fed Chair Powell’s speech will be the one to watch. Easing financial conditions raise concerns about inflation shooting back higher, but pushback from Fed officials so far hasn’t been enough for the markets yet. It remains to be seen what more Fed Chair Powell can deliver today. Reopening optimism returned in China While the daily new cases continued to surge and anti-restriction protests sprang up across major cities, investors took comfort from the light-touch reactions from the Chinese authorities and hints of preparing to ease the pandemic control measures further. A Party-controlled newspaper in Beijing published a long article reporting the stories of people having recovered from Covid, which seemingly aimed at easing people’s worries about the disease. The National Health Commission issued a memo pledging to increase the vaccination rate of the country’s senior population. In a press conference later in the afternoon, health officers again emphasized increasing the senior population’s vaccination rate as a priority and highlighted the Omicron variants as being less severe than the original virus. Officials and the state-controlled media have taken a light-touch approach to the recent protests and have not put any political stigma on the incidents. Putting these together, investors are taking the development as hints of the Chinese authorities to prepare for further easing in its Covid policy. China relaxes its restrictions on developers from attaining equity financing The China Securities Regulatory Commission (CSRC) fired the so-called “third arrow” to ease some of the restrictions previously imposed on property developers from attaining equity financing. While property developers are still barred from doing IPO in the domestic equity market, they are now domestically listed A-share developers and some Hong Kong-listed H-share developers to issue new shares to raise capital as long as the proceeds are used for restricting, M&A activities, refinancing, buying existing property projects, repaying debts, and project construction. However, proceeds are not allowed to be used in land acquisition. Softer Australia CPI paves the way for a dovish RBA next week Australian inflation data for October showed inflation is continuing to fall, and far more than expected which supports the RBA’s dovish tone and only hiking rates by 0.25% next week (December 6). Trimmed mean CPI which excludes volatile items, rose 5.3% year-on-year in October, which marks a fall in price rises, compared to the prior read, 5.4% YoY. This also shows prices for consumer goods and services in Australia are falling less than the market expects as Trimmed CPI was expected to rise 5.7%. Meanwhile, headline inflation also rose less than expected, showing consumer prices rose 6.9% YoY, which was cooler than prior 7.3% read, and less than the 7.6% expected. This follows a suite of Australian economic data that supports the RBA remaining more conservative with rate hikes. Earlier in the week, Australian retail trade data unexpectedly fell, showing consumers are feeling the strain of inflation and rising interest rates. As a house, we think spending will likely continue to slow into 2023, with the full impact of rate hikes passing through households under financial duress giving deb to income ratios are some of the highest in the world. China PMIs likely to show demand weakness China’s NBS manufacturing PMI is expected to decline to 49.0 in November, further into the contractionary territory, from 49.2 October, according to the survey of economists conducted by Bloomberg. The imposition of movement restrictions in many large cities has incurred disruption to economic activities. High-frequency data such as steel rebar output, cement plants’ capacity utilization rates, and container throughputs have weakened in November versus October. Economists surveyed by Bloomberg expect the NBS Non-manufacturing to slow to 48.0. in November from 48.7 in October, on the enlargement of pandemic containment measures. OPEC+ weekend meeting goes virtual Instead of meeting in Vienna as planned earlier, OPEC+ has now moved its December 4 meeting online which is downplaying expectations of any significant policy change after production cut expectations gathered hopes this week with crude oil prices falling to test key support levels. Some delegates also suggested that the cartel is leaning towards approving the same production levels agreed in October, when a 2mb/d cut in output was announced. Bilibili (BILI:xnas/09626:xhkg) Q3 beat expectations Bilibili reported 11% Y/Y revenue growth in Q3 and net loss came in at a smaller amount of RMB1.7 billion. User growth was solid, with average daily active users growing 25% Y/Y to 90.3 million, average monthly active users growing 25% to 332.6 million, and average monthly paying users increasing 19% to 28.5 million. Operating margin improved to -31.9% in Q3 from -44.63 in Q2 and -51.1% in Q3 last year. The company guides for a 4-7% Y/Y increase in Q4 revenue, below the consensus estimate of 8% Y/Y. EUR may be watching the flash Eurozone CPI release Eurozone inflation touched double digits for October, and the flash release for November is due this week. The headline rate of the harmonized index of consumer prices (HICP) is expected to ease slightly to 10.4% YoY from 10.7% YoY last month. The core rate that excludes food and energy prices is forecast to however remain unchanged at 5% YoY. This print will be key for markets as the magnitude of the ECB’s next rate hike at the December meeting is still uncertain, and about 60bps is priced in for now. But even with a slight cooling in inflation, which will most likely be driven by lower energy costs, there is a possibility that inflation will likely remain high in the coming months as winter months progress and cost of living gets worse. Crowdstrike (CRWD:xnas) tumbled on guidance miss The shares of Crowdstrike plunged 18.7% in the extended-hour trading after the cybersecurity provider issued Q4 revenue guidance below market expectations. For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-market-insights-30-nov-2022-30112022
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

U.S. Interest Rates Could Reach Their Peak In 2024

Conotoxia Comments Conotoxia Comments 30.11.2022 09:55
Financial markets may focus on two events today. The first may be the inflation reading for the Eurozone for November (estimates), and the second will be a speech by Federal Reserve Chairman Jerome Powell. Yesterday's inflation data from Germany showed that German consumer prices rose 10.0% year-on-year in November, slightly less than the 10.3% predicted by analysts, according to data released by the Federal Statistical Office (Destatis). A month earlier, in October, inflation was 10.4%. On a monthly basis, consumer prices fell by 0.5%, the BBN service reported. The softer inflation reading from Germany may carry over into today's inflation publication for the eurozone as a whole. The consensus calls for a reading of 10.4% versus 10.6% a month earlier. Investors in the interest rate market, along with lower inflation readings, have pushed back their expectations for action by the European Central Bank. As Bloomberg calculates, interest rate traders now see only a 24% chance of a move greater than 50 basis points at next month's ECB meeting, while as recently as Tuesday it was as high as 52%. Inflation data from the zone will be released at GTM+1. Source: Conotoxia MT5, EURUSD, Daily Markets ahead of Jerome Powell's speech According to Bloomberg, implied volatility in the FX options market is rising in the shorter term, as investors position themselves ahead of Fed Chairman Jerome Powell's key speech on the economy and labor market. The speech is scheduled to begin at 7:30 pm GTM+1 at the Brookings Institution. Investors could expect the speech to offer clues on further action on interest rates or where the current cycle would end, as well as whether an interest rate cut in 2023 is possible. According to Bloomberg data, the peak of the U.S. hike cycle is priced by the market for May or June 2023 at a level close to 5 percent, while the federal funds rate is expected to fall to 4.4 percent by January 2024. This would mean that U.S. interest rates could reach their peak in the same year, and then, according to the market, the Fed could opt for two cuts of 25 bps each. Source: Conotoxia MT5, US30, Daily Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The USD/IDR Pair Is Expected A Further Downside Movement

Bank Indonesia Monetary Policy To Remain Pro-stability

TeleTrade Comments TeleTrade Comments 30.11.2022 10:10
Perry Warjiyo, Bank Indonesia (BI) Governor, said on Wednesday that the Rupiah is expected to strengthen in 2023 supported by good economic fundamentals. Key quotes   Coordination between fiscal, monetary authorities need to be continued. Global supply chain is still hampered, global investor perspective still negative. We need to be aware of risk of global econ slowdown, high interest rates, high energy and food prices. Amid global turmoil, we need to strengthen synergy and coordination. 2023 GDP growth seen at 4.5% to 5.3%. 2024 GDP growth seen at 4.7% to 5.5%. Inflation remain high but will return to 2%-4% target in 2023, and 1.5%-3.5% in 2024. 2023 and 2024 loan growth seen at 10%-12%. 2023 energy subsidies will allow c.bank to raise interest rates in a measured way. C.bank, financial authorities independence will be maintained. Bank Indonesia monetary policy to remain pro-stability. Other c.bank tools will be directed to support economic growth. We will optimize interest rates, exchange rate, liquidity policies. BI to ensure core inflation steered toward target range by first-half 2023. BI will remain in the markets to conduct triple intervention. BI to ensure bond yield remain attractive while avoiding excessive rise. BI's macroprudential policy will remain loose. BI launches white paper digital rupiah today. 2022 C/A balance seen at +0.4% to +1.2% of GDP, 2023 C/A balance seen at +0.4% to -0.4% of GDP.   Market reaction Despite upbeat comments from the central bank Governor, USD/IDR is trading listlessly at around 15,740, almost unchanged on the day.
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

EUR/GBP Cross Pair Is Likely To Remain The Latest Recovery

TeleTrade Comments TeleTrade Comments 30.11.2022 10:14
EUR/GBP teases confirmation of a bullish chart pattern, reverses the previous day’s losses. 200-SMA adds to the upside filters, 0.8570 restricts short-term downside. RSI, MACD suggests further upside momentum toward the monthly high. EUR/GBP picks up bids to reverse the previous day’s losses around 0.8650 during the initial European session on Wednesday. In doing so, the cross-currency pair extends Friday’s rebound from the lowest levels since September while poking the neckline of a short-term inverse head-and-shoulders (H&S) bullish chart formation. It’s worth observing that the upward-sloping RSI (14), not overbought, joins the bullish MACD signals to suggest a clear break of the 0.8660 hurdle. Following that, the 200-SMA level of 0.8685 could probe the advances toward the theoretical target surrounding the monthly high near 0.8830. On the contrary, pullback moves remain elusive unless staying beyond the latest swing low of 0.8607. Even so, the lows marked during late October and in the last week, around 0.8570, appear a tough nut to crack for the EUR/GBP bears. In a case where the pair remains weak past 0.8570, September’s bottom near 0.8565 may act as a buffer as sellers aim for the August 19 peak of 0.8511. Overall, EUR/GBP is likely to remain firmer and can extend the latest recovery as the inverse H&S formation joins upbeat oscillators, namely the RSI and MACD. EUR/GBP: Four-hour chart Trend: Further upside expected  
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

Saxo Bank Podcast: Zoom In Fed Chair Powel's Speech And Apple, Crowdstrike And More

Saxo Bank Saxo Bank 30.11.2022 12:09
Summary:  Today we note that Fed Chair Powell is set to speak later today and will likely try to push back against the recent strong easing of financial conditions and pricing of hefty Fed rate cuts that the market has priced to start as early as late 2023. If Powell can't impress the market, the incoming US data might have to do so, with the November ADP private payrolls up today and the PCE inflation data tomorrow. Elsewhere, we zoom in on the latest on crude oil and commodity performance this month, talk Apple, Crowdstrike and incoming earnings and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Can a hawkish Powell pour cold water on this market? | Saxo Group (home.saxo)
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

The Australian Monthly Reports Are More Volatile And May Not Mark A Changing Trend

Kenny Fisher Kenny Fisher 30.11.2022 14:52
The Australian dollar has extended its gains on Wednesday. AUD/USD is trading at 0.6723 in Europe, up 0.54%. Australian inflation falls below 7% Australia inflation surprised on the downside with a 6.9% gain (YoY) in October. This was down sharply from the 7.3% clip in September and beat the consensus of 7.4%. The burning question on everyone’s lips, is, of course, “has inflation finally peaked?” Before the champagne bottles come out, it’s worth noting that a new method was used to calculate October CPI – under the old method, CPI would have been 7.1%, a less dramatic decline. Core CPI ticked lower to 5.3%, down from 5.4%. Australia recently added monthly inflation reports to supplement the quarterly releases, and the monthly reports are more volatile and may not mark a changing trend. Investors and policy makers will have to wait for the next quarterly CPI release in January to get a better handle on which direction inflation is headed. There was positive news from the construction sector, as Construction Work Done rebounded in Q3 with a strong gain of 2.2%, above the consensus of 1.5%. This follows a -3.8% read in Q2 and was the first gain since Q3 2021. The markets will be paying close attention to Jerome Powell, who is expected to touch upon inflation and the labour market in a speech later today. The Fed has orchestrated an effective Fedspeak blitz, with Fed members presenting a hawkish outlook for rate policy, even though the Fed has signalled it will ease up on rates in December and hike by “only” 50 basis points. This year will set a record for Fed tightening, with 425 basis points if the December increase is 50 bp. With the battle against inflation far from over, the last thing the Fed wants to temper any market exuberance, as a higher stock market could drive more inflation.   AUD/USD Technical AUD/USD continues to test resistance at 0.6707. The next resistance line is 0.6829 There is support at 0.6633 and 0.6511 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Canada: A 25bp rate hike is highly expected. BoC terminal rate is expected to hit 4.5%

On Friday greenback and Loonie may be fluctuating

Kenny Fisher Kenny Fisher 30.11.2022 19:02
The Canadian dollar has posted slight gains on Wednesday. In the North American session, USD/CAD is trading at 1.3541, down 0.28%. Will Powell’s speech be a market-mover? All eyes are on Fed Chair Powell, who will deliver a speech later today at the Brookings Institute in Washington. The fact that Powell’s remarks are the center of attention is an indication that market movement has become very dependent on rate policy. The Fed is expected to ease up on its pace of rates at the December meeting and deliver a 50-bp hike, after back-to-back increases of 75 bp. Still, the markets haven’t excluded the possibility of another 75 bp move. Investors are hoping to glean some clues from Powell as to when the Fed plans to wind up the current tightening cycle. Read next: EU works on a price cap on Russian oil. According to Craig Erlam (Oanda) OPEC+ think of a production cut| FXMAG.COM After the US inflation report underperformed, the markets climbed sharply and the US dollar sagged on speculation of a dovish pivot from the Fed. This exuberance didn’t last long, as one Fed member after another sent out a hawkish message, warning that inflation was not yet beaten and the rate hikes would continue. There is some uncertainty as to when the Fed funds rate will peak, with most forecasts projecting a range between 4.75%-5.25%. The Canadian dollar has just ended a nasty slide which saw it lose almost 300 points. We could see further volatility on Friday, when both Canada and the US release employment reports. The ADP payrolls report, released today, showed a small gain of 127, 000 jobs, down from 239,000 and shy of the consensus of 200,000. The report is not considered an accurate indication for nonfarm payrolls on Friday, and the ADP recently changed its methodology, which raises further questions about its accuracy. The forecast of nonfarm payrolls is 200,000, which would be a significant drop from the previous reading of 200,000. USD/CAD Technical USD/CAD tested support at 1.3576 earlier. Below, there is support at 1.3478 There is resistance at 1.3656 and 1.3782 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Canadian dollar ends slide, Powell next - MarketPulseMarketPulse
FX: The Gap Versus The FX spot Rate In Poland Is Already The Largest In The CEE Region

Poland: CPI inflation hits 17.4%, less than in October. Food prices go up by over 1.5% month-on-month

ING Economics ING Economics 30.11.2022 19:15
The CPI peak is still ahead but inflation should decline in 2023 on base effects, albeit with persistently high core inflation Lower CPI inflation in Poland is due to falling energy prices; food and core show fast growth November CPI inflation slowed down to 17.4% year-on-year in November from 17.9% in October versus the expected 17.9-18% YoY. The reason for the surprise is the 0.1% month-on-month drop in energy prices (lots of foreign coal was delivered and the government subsidies are working). However, the other components of inflation are still recording large increases. Food prices jumped by 1.6% MoM in November, thanks in part to earlier increases in energy prices. Core inflation is still rising fast at 0.6% MoM (after seasonal smoothing this is still high). This brings the core’s annual rate up to 11.3% YoY in November from 11.0% a month before. CPI peak still ahead but inflation should decline in 2023, albeit with high core inflation This inflation picture is far from optimistic. The peak in CPI is still ahead of us and will probably be reached in February at around 20% YoY. In 2023, we have an inflationary overhang to 'unload' due to the anti-inflation shields introduced earlier. There will be an increase in VAT on electricity, gas and heating in January, which will bump up CPI by around 2.5-3pp. Keeping 0% VAT on food is still uncertain. We heard yesterday from PM Mateusz Morawiecki that the reduction will only be in place in the first half of next year, but we assume it will be extended until at least the third quarter of 2023. Overall, average inflation next year will be around 14% YoY. The underlying theme in 2023 will be a large fall in CPI, from around 20% to around 10% by the end of the year. We note that statistical base effects will play a strong role in this slide. The core CPI should stay persistently high, at around 10% through most of the year. This will complicate the conduct of monetary policy. The 3Q22 GDP data released today shows a major slowdown in consumption, which should slow the process of high costs being passed onto retail prices. However, 2023 is an election year which usually brings new spending and it is just a matter of time before this appears. Lower energy prices reduce headline inflation in Europe, other risks remain in place After the November readings, the inflation landscape in Poland and Europe is similar. The latest data surprised on the low side, but mainly through softer energy prices, resulting from policy intervention. Globally, we are also seeing the first signs of improving inflationary pressures, i.e. softening disruptions in supply chains, falling freight prices and declines in commodity prices (including the all-important gas for Europe). But central banks, e.g. the European Central Bank and tonight the Federal Reserve, will try to calm the over-optimism. The reasons for the banks' caution are (1) stubbornly high core inflation in 2023 (especially in Poland and Euroland); (2) large fiscal stimulus in Europe/Poland, but not the US; (3) the consensus and projections from the National Bank of Poland assume a gradual normalisation of commodity prices in 2023, but we fear that when the global and Chinese economies rebound, the problem of high prices may return. NBP has definitely ended the tightening cycle The NBP has effectively ended the rate hiking cycle and today's CPI reading should be very welcome by the MPC's doves. However, cuts are unlikely next year. The problem is the persistence of core inflation in Poland, the inflationary overhang created by the large inflationary shields, and our concerns about renewed commodity price rises in 2023. There is limited capacity growth in the major producers of energy commodities or industrial metals. This could manifest in a renewed spike in prices, as Europe looks to fill gas storage for the winter of 2023-24. Also, a rebound in the global and Chinese economies could lift precious metals prices. Read next: The Global Oil Market Is Expected To Tighten Over 2023| FXMAG.COM In our view, the MPC will not change rates over the coming year. The current green shoots of global disinflation should support the POLGBs market. However, the problem of high inflation will not end with headline CPI falling to around 10% YoY at the end of 2023. The CPI drop in 2023, but with persistently high core inflation CPI (%YoY) and contributions Source: ING, GUS Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Norway: Norges bank announced lower-than-expected Forex purchases. According to ING authorities may want to support NOK

Norway: Norges bank announced lower-than-expected Forex purchases. According to ING authorities may want to support NOK

ING Economics ING Economics 30.11.2022 19:27
For the second consecutive month, Norges Bank announced lower-than-expected daily FX purchases (NOK1.9bn) for the month ahead. This may at least partly denote appetite for a stronger domestic currency, which would help fight inflation as Norges Bank’s room for tightening may be restrained by Norway’s economic woes and vulnerable property market December FX purchases trimmed to NOK1.9bn Norges Bank (NB) announced daily FX purchases data for the month of December today, and for the second consecutive month, surprised on the downside. Daily purchases were trimmed from NOK4.3bn to NOK3.7bn in November, and will be further cut to NOK1.9bn next month. December’s FX operations will be carried out only until the 16th. For context, Norges Bank conducts FX operations on behalf of the Ministry of Finance, converting NOK excess petroleum revenues (after financing the budget deficit) into foreign currency holdings, which are then saved in the Government Pension Fund Global (GPFG). In practice, NB is selling NOK in the market, primarily against USD and EUR. Assessing the FX impact The lower announced FX purchases are probably related to the recent drop in energy prices. However, the reduction in purchases for December was both unexpected and very sizeable, and followed another surprise decrease in November. We think there may be an ulterior motive behind the Finance Ministry and Norges Bank’s move: offering some support to the krone. NOK is the least liquid currency in G10 (left-hand chart below), which means it is extremely sensitive to global risk dynamics and financial conditions. While the deteriorating liquidity and risk environment in 2022 was the primary driver of NOK weakness, Norges Bank’s acceleration in FX purchases in September and October may well have added pressure on the krone. NOK is the best performing currency in G10 today, trading 1.10% higher against the USD and 0.7% against the euro thanks to Norges Bank’s announcement. NOK driven by liquidity and NB purchases Source: BIS, Norges Bank, ING Stronger NOK welcome given limited tightening room In our view, a stronger domestic currency would be welcome in Norway as it would help fight elevated inflation. The most recent CPI reading surprised to the upside once more, revealing an increase in prices to 7.5% in October, significantly higher than the 5.4% average fourth quarter Norges Bank estimates (published in September). As a result of growing economic downside risks, NB has slowed the rate of tightening, raising it only 25bp to 2.50% on November 3rd. Most importantly, its current rate projections only indicate 60bp of additional tightening, which might prove insufficient to bring inflation sustainably lower. However – along with general concerns about the slowdown in the economy – hawks at the NB may be discouraged by the vulnerability of the Norwegian housing market. As shown below, Norway has the largest share (nearly 96%) of variable rates in G10, which is unquestionably an element of concern given rapidly rising rates. Too much tightening risks causing an undesirably rapid contraction in house prices. Norway's property market looks vulnerable Source: OECD, ING In conclusion, Norges Bank and the Finance Ministry may want to offer some support to NOK via lower FX purchases, with the aim of reducing the need for direct monetary policy action (rate hikes) to fight inflation. We could see Norwegian authorities keep FX purchases lower throughout 2023 for this reason, which would be a positive development for NOK. However, FX operations are one variable in the NOK equation, and crucially one with a lower weight compared to external factors that are well beyond Norges Bank’s control: global risk appetite and financial conditions. As discussed in our 2023 FX Outlook, worsening liquidity conditions are likely to pose a challenge to high-beta currencies such as NOK. Our base case is for NOK to appreciate to 9.60 against both EUR and USD by end-2023, but we doubt it will be a smooth ride for the krone. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

Oh my... New Zealand's ANZ Business Confidence plunged reaches shocking -57.1

Kenny Fisher Kenny Fisher 30.11.2022 22:53
The New Zealand dollar has extended its gains on Wednesday. In the North American session, NZD/USD is trading at 0.6235, up 0.54%. Business Confidence slides New Zealand’s ANZ Business Confidence has been in a deep freeze for months, but things got even uglier in November, with a reading of -57.1. This followed the -42.7 reading in October and missed the consensus of -39.5. The plunge in business optimism comes despite an improvement in the economy and the easing of Covid restrictions. It has been much the same story with consumer confidence, which remains weak. The double-barreled punch of high inflation and rising interest rates has dampened the moods of consumers and businesses, and with inflation running at a 7.2% clip, the Reserve Bank of New Zealand will have little choice but to continue raising rates into 2023. Read next: On Friday greenback and Loonie may be fluctuating| FXMAG.COM The Federal Reserve remains in the spotlight, and Fed Chair Powell will be under close scrutiny when he delivers a speech today at the Brookings Institute in Washington. The fact that Powell’s remarks are the center of attention is an indication of just how dependent market movement has become on rate policy. Powell is expected to discuss inflation, which has been losing steam, but the Fed is still not ready to say inflation has peaked. Inflation may have fallen to 7.7%, but as Fed member John Williams warned earlier this week, inflation remains “far too high”. Investors are gearing for the tightening cycle to continue into 2023, but there’s uncertainty, likely shared by Fed members, as to when the rate hikes will end. The most likely scenario is that the Fed will raise rates to about 5%, but inflation, which has been stickier than the Fed expected, will have to cooperate in order for the Fed to wind up the current tightening cycle. NZD/USD Technical NZD/USD is testing resistance at 0.6209. Above, there is resistance at 0.6331 There is support at 0.6130 and 0.6008   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. NZD rises despite soft bus. confidence - MarketPulseMarketPulse
The Market May Continue To Buy The Pound (GBP) This Week

GBP/USD Pair: There Is Currently No Reason To Anticipate A Downward Correction

InstaForex Analysis InstaForex Analysis 01.12.2022 08:01
On Wednesday, the GBP/USD currency pair traded as slowly as the euro. The market did not see any reason to trade actively and trendily here either, although there were fewer reports relating to the British pound and the dollar. We can therefore draw the same conclusions about the pound. There is currently no reason to anticipate a downward correction because the price is close to the moving average line, and there has not yet been a clear consolidation below it. However, we continue to think that the pound sterling has risen too much in the last month and that there are no more reasons for it to rise. As was already stated, there was no response to yesterday's GDP and labor market reports. The "polar" nature of these two reports may be to blame for this outcome. Simply put, the GDP report was very strong, and the ADP report was weak (only 127 thousand versus a forecast of 200). As a result, "netting" prevented us from observing the dollar's rise or decline. However, rather than ignore significant data in such circumstances, the market prefers to trade alternately in both directions. In any case, we received a peculiar response and peculiar bidding. We will have to wait until Friday because there will be a few significant reports on Thursday. We want to remind you that you shouldn't consider the nonfarm report to be "trend-forming." Of course, it matters, but the dollar can quickly fluctuate by 100 to 150 points before resuming its previous positions. As a result, if the market is not prepared to buy the US dollar on Friday, it won't be. This refers to those that will cause the significant downward correction we anticipate. The ADP report: a sign of trouble for nonfarm? The number of jobs created outside of agriculture in a single month is roughly the same in both the ADP and NonFarm Payrolls reports. ISM and S&P business activity reports are comparable. And they hardly ever coincide with one another, just like business activity indices. They frequently differ in their forecasts and actual values, which are frequently revised later. As a result, one should always approach these data assuming that the values may change in a month. First, the ADP report showed a very small increase in employment—only 127 thousand. As previously stated, a normal value for the American economy is between 200 and 300,000. Although both indicators have not displayed the same dynamics over the past year, the market places a higher value on nonfarm. Until April 2022, the ADP report grew steadily before declining. With some exceptions, nonfarm rates have been falling for a year. Therefore, it is unquestionably false to infer that nonfarm will also be weak due to ADP's failure. Additionally, Nonfarm has experienced negative dynamics, so we fully anticipate that this report will reveal a lower value than a month ago (261 thousand). But the value from last month might have changed, so it's impossible to say for sure right now. All of this was written so traders would understand that the actual value could be anything, the value from the previous month could change in any direction, and the market could interpret this report however it saw fit. It is, therefore, impossible to forecast where the dollar will move on Friday at this time. Of course, volatility is likely to rise, and we still anticipate that the pair will decline. To understand where the pair may move in the future, we advise waiting several days for either a clear and confident overcoming of the moving average or a clear and confident rebound from it. Over the previous five trading days, the GBP/USD pair has averaged 132 points of volatility. This value is "high" for the dollar/pound exchange rate. As a result, we anticipate movement on Thursday, December 1, within the channel, constrained by the levels of 1.1968 and 1.2231. The Heiken Ashi indicator's turning downward indicates a new phase of the corrective movement. Nearest levels of support S1 – 1.2024 S2 – 1.1963 S3 – 1.1902 Nearest levels of resistance R1 – 1.2085 R2 – 1.2146 R3 – 1.2207 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair resumed its upward trend. Therefore, until the Heiken Ashi indicator turns down, you should continue holding buy orders with targets of 1,2207 and 1,2231. With targets of 1.1841 and 1.1780, open sell orders should be fixed below the moving average. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction to trade now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 02:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328650
The EUR/USD Pair: There Are Still No Sell Signals

There Was No Movement In The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 01.12.2022 08:05
On Wednesday, there was no movement in the EUR/USD currency pair. We wouldn't have been shocked if this situation had occurred on Monday or Tuesday because there hasn't been a single significant event or report published lately. On Wednesday, there were a ton of macroeconomic statistics. Still, traders paid no attention to the report on European inflation, although it was just as alarming as the last one on American inflation, which sparked this rally. Yet again, we are convinced that the impact of European statistical data on trader sentiment is minimal. But the main point is that quite significant reports from abroad were disregarded yesterday. The ADP report could cause a market reaction if everything in the GDP report is clearer because such reports always come out with three estimates. After the first estimate, it is clear what to expect from the value for a particular quarter. And it's puzzling why the market didn't find anything interesting in them when we consider all the information and data received. As a result, the pair is still relatively close to the moving average line, and it is still determining the direction of its future movement. For the past week and a half, we have been anticipating a significant downward correction, but this calls for a fix that is at least below the moving average. Formally, the consolidation was visible on Tuesday, but 20 points hardly qualify as a confident result. We focus on the second rebound from Murray level "6/8"-1.0498. Two rebounds from this level could signal the start of a corrective movement. As you can see, traders were unmoved by yesterday's data, so we now have to wait for Friday's nonfarm payrolls and unemployment figures. In the third quarter, US GDP increased. Since the GDP report typically includes three estimates, as we mentioned above, traders know what to expect before the second or third estimate is released. However, yesterday's report caught some people off guard because, contrary to expectations of +2.6–2.7% q/q, the actual value was 2.9%. This strong deviation should have benefited the value of the US dollar. Not only was the EU inflation report disregarded, but so was a rather significant GDP with an unexpected value. Even the ADP report received no response. Therefore, even though we think traders still have access to the factors supporting the US currency, they are not yet eager to repurchase the dollar. As a result, the third quarter of the American economy displays very positive dynamics and can easily compensate for the "disadvantages" of the first two quarters. If this occurs, the Fed will have many more opportunities to raise interest rates as much as it wants. It is again good for the dollar because if inflation stops falling, the Fed will still have opportunities to tighten monetary policy more than expected. It will then become very difficult to talk about a recession in the US economy. Additionally, the fact that there isn't a recession is excellent news for the American economy. Similar to how it is for every other economy in the world. For instance, it is unlikely that the European economy will be spared from such "happiness." Additionally, a slower inflation rate in the Eurozone might encourage the ECB to raise the key rate gradually over the next few months. The euro currency may experience the same fate as the dollar, which has been declining for several months due to the Fed's potential decision to raise interest rates more gradually than previously. Although there are more and more signs pointing to a new rise in the dollar's value, more precise technical signals are still needed to test this theory. We will only analyze Jerome Powell's speech today because it is crucial to know how the market will respond. As of December 1, the euro/dollar currency pair's average volatility over the previous five trading days was 103 points, considered "high." So, on Thursday, we anticipate the pair to fluctuate between 1.0331 and 1.0538 levels. The Heiken Ashi indicator's turning downward indicates a new phase of the corrective movement. Nearest levels of support S1 – 1.0376 S2 – 1.0254 S3 – 1.0132 Nearest levels of resistance R1 – 1.0498 R2 – 1.0620 R3 – 1.0742 Trading Suggestions: The EUR/USD pair is still positioned close to the moving average. To avoid the Heiken Ashi indicator turning down, new long positions with targets of 1.0498 and 1.0538 should now be considered. Only after fixing the price below the moving average line with targets of 1.0254 and 1.0132 will sales become significant. Explanations of the illustrations: Linear regression channels help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) determines the short-term trend and the direction to trade now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 02:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328648
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

There Was Good Close On The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 01.12.2022 08:11
At the close of the New York Stock Exchange, the Dow Jones rose 2.18% to a 6-month high, the S&P 500 rose 3.09% and the NASDAQ Composite index rose 4.41%. Dow Jones The leading gainers among the components of the Dow Jones index today were shares of Microsoft Corporation, which gained 14.81 points (6.16%) to close at 255.14. Salesforce Inc rose 8.57 points or 5.65% to close at 160.25. Apple Inc rose 4.86% or 6.86 points to close at 148.03. The least gainers were Walmart Inc, which shed 0.55 points or 0.36% to end the session at 152.42. 3M Company rose 0.13% or 0.16 points to close at 125.97, while Caterpillar Inc rose 0.55% or 1.29 points to close at 236.41. S&P 500 Leading gainers among the S&P 500 index components in today's trading were Estee Lauder Companies Inc (NYSE:EL), which rose 9.70% to 235.79, Netflix Inc, which gained 8.75% to close at 305.53, as well as shares of Hewlett Packard Enterprise Co, which rose 8.57% to close the session at 16.79. The least gainers were NetApp Inc, which shed 5.82% to close at 67.61. Shares of Charles River Laboratories shed 4.56% to end the session at 228.57. Hormel Foods Corporation fell 2.47% to 47.00. NASDAQ The top performers on the NASDAQ Composite Index today were Biophytis, which rose 92.03% to hit 0.67, Corbus Pharmaceuticals Holding, which gained 60.08% to close at 0.19, and Biodesix Inc, which rose 47.06% to end the session at 2.00. The least gainers were Aeglea Bio Therapeutics Inc, which shed 65.98% to close at 0.41. Shares of CN Energy Group Inc lost 44.93% and ended the session at 0.82. Pacifico Acquisition Corp lost 42.81% to 5.41. Number On the New York Stock Exchange, the number of securities that rose in price (2686) exceeded the number of those that closed in the red (442), while quotes of 105 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,913 companies rose in price, 872 fell, and 199 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 5.98% to 20.58. Gold Gold futures for February delivery added 1.99% or 34.75 to hit $1.00 a troy ounce. In other commodities, WTI crude for January delivery rose 2.86%, or 2.24, to $80.44 a barrel. Futures for Brent crude for February delivery rose 2.93%, or 2.47, to $86.72 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.76% to hit 1.04, while USD/JPY fell 0.44% to hit 138.07. Futures on the USD index fell 0.75% to 105.96.     Relevance up to 03:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/303272
The USD/JPY Price Seems To Be Optimistic

The USD/JPY Pair Reached The Top Of The Downtrend Channel

InstaForex Analysis InstaForex Analysis 01.12.2022 08:14
Early in the Asian session, the Japanese Yen is trading around 136.68. We can see on the 4-hour chart that USD/JPY remains trading within a downtrend channel which has been unfolding since November 17. In the American session, the USD/JPY pair reached the top of the downtrend channel around 139.88. As it failed to break this strong resistance, due to the fact that a symmetrical triangle formation also converges at that same level, the yen made a strong technical connection breaking the 21 SMA located at 138.54. The technical analysis with the fundamental analysis goes hand in hand. This can be verified because in the afternoon of the American session yesterday, the Chairman of the Federal Reserve, Jerome Powell, said that the US central bank could reduce the pace of interest rate hikes in December. This caused a fall in the dollar which benefited the Japanese Yen, gaining almost 300 pips in one day. In case there is a technical rebound around the support 136.50 or 135.93 in the next few hours, we could expect a technical correction towards the 21 SMA located at 138.54. On the other hand, if USD/JPY finds support at -1/8 Murray around 135.93, this level will serve as the key due to the fact that it is a zone of technical reversal. It is likely that it will give us an opportunity to buy, with targets at 0/8 Murray located at 137.90 and at the top of the downtrend channel around 139.06. The eagle indicator could find strong support around the uptrend channel, which could be a signal to buy the Japanese Yen in the coming hours. Our trading plan for the next few hours is to buy the Japanese Yen around 136.50, with targets at 137.50 and 138.54. Additionally, we can buy if JPY/USD consolidates around 135.93 (-1/8 Murray) with targets at 137.50 and 139.06. Relevance up to 03:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/303274
EUR/USD Pair May Have A Potential For The Further Rally

EUR/USD Pair: The Technical Picture Is Very Confusing

InstaForex Analysis InstaForex Analysis 01.12.2022 08:16
Analyzing trades on Wednesday: EUR/USD on 30M chart The EUR/USD trade was sluggish and boring on Wednesday, which had nothing to do with the macroeconomic background that traders could use during the day. The volatility of the day was about 80 points, which is not too low, but traders had the right to expect a stronger movement. Take note that at least three relatively important reports were published. Moreover, the word "relatively" hardly applies to the EU inflation report. Since the inflation rate declined by 0.6%, one could expect the euro to fall, just like the US dollar did when the inflation rate in the US started to go down. However, the euro was inclined to rise during the day, which makes no sense at all. There were two important reports in America and they turned out to be "opposite" to each other. While the GDP went up compared to the last report, the ADP report was much weaker than expected. But in this case, too, the euro continued to rise for some reason and not vice versa. If we look at the technical picture of the 30-minute chart as a whole, we can clearly see that there is no trend right now. EUR/USD on M5 chart There were a lot of trading signals on the 5-minute chart, and the price was between 1.0354 and 1.0391 for most of the day. In other words, it was in a flat. Therefore, it is not surprising that some signals turned out to be false. The first signals around 1.0354 appeared first, there were four of them. The first two were definitely false, and the price failed to move down 15 pips in the first case, while it did in the second one. Therefore, the short position closed with a small loss, while the long position closed with no profit using Stop Loss. All subsequent signals near 1.0354 should have been ignored. Two sell signals near 1.0391 did not bring much profit either. In the first case, the pair failed to reach the target level by just a few points. It reached the level in the second one, so it was possible to earn 10-15 points, which was enough to cover losses of the first trade. As a result, it was possible to finish the day in positive or negative. Trading tips on Thursday: The uptrend has been canceled on the 30-minute time frame, but it may resurface. The pair is gravitating towards growth, but there is no ascending trend line anymore. We witnessed both equally strong growth and decline on Monday. Then we saw a total flat on Tuesday and Wednesday. In my opinion, the technical picture is very confusing right now. On the 5-minute chart on Thursday, it is recommended to trade at the levels of 1.0156, 1.0221, 1.0269-1.0277, 1.0354, 1.0391, 1.0433, 1.0465-1.0483, 1.0535. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. There will be quite a few interesting reports on Thursday: EU unemployment, US income and spending and ISM business activity indices in the US. However, if you think about it, there were quite good reports on Wednesday and we all saw how the market reacted. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time. Relevance up to 01:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328644
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The British Pound (GBP) May Keep Falling | The GBP/USD Pair Did Not Reach The Target Level

InstaForex Analysis InstaForex Analysis 01.12.2022 08:19
Analyzing trades on Wednesday: GBP/USD on 30M chart GBP/USD did not show any interesting movements for most of the day, and so did EUR/USD. The pound only started to sharply fall in the evening, which again is difficult to correlate with at least one of the reports, which were published during the day. Bear in mind that the European inflation report had nothing to do with the pound, while there were only two contradictory reports released in the US. The GDP report turned out to be stronger than forecasts and the previous estimate, and the ADP report was much weaker than expected. So not only did the market not react immediately to these reports, but it also selectively ignored one of them? All in all, no matter which way you look at it, the movement on Wednesday was very strange. Despite the fact that we continue to expect a strong bearish correction, and in the afternoon there was just a downward movement, we still can't say that the market is trading logically and reasonably now. After settling below the trend line, the bearish correction got a technical basis, but the dollar's growth is not strong yet. However it is still present, which is already a good thing. GBP/USD on M5 chart On the 5-minute chart, two or three trading signals were formed near 1.1950-1.1957 during the European trading session. All these signals duplicated each other, so a long position should have been opened only once. Subsequently, the pound passed in the right direction of 60 points, so beginners could close in profit. However, the pair did not reach the target level at 1.2064. Closer to the evening, the quotes started falling and it crossed the 1.1950-1.1957 area. However, this sell signal was formed quite late and the price was already 60 pips down when it was formed. Therefore, you shouldn't have used it. Moreover, it is very difficult to connect it with the macroeconomic statistics, which was published in the US. If the market reacted to it, it was very selective and done so with delay by an hour and a half. Trading tips on Thursday: The pair started to form a downtrend on the 30-minute time frame, which I have been expecting. Although the pair continues to move quite illogically, at least we are finally witnessing a downward movement, which I have mentioned for so long. So I expect the pound to keep falling. On the 5-minute chart on Thursday, it is recommended to trade at the levels 1.1716, 1.1793, 1.1863-1.1877, 1.1950-1.1957, 1.2064-1.2079 and 1.2141. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. On Thursday, the UK will publish a business activity index for the manufacturing sector, while in the US, the ISM business activity indexes and data on personal income and expenditures of the American population will be published. I believe that investors will react to the ISM data. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.     search   g_translate     Relevance up to 01:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328646
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

Technical Outlook Of The US Dollar To Japanese Yen Pair

InstaForex Analysis InstaForex Analysis 01.12.2022 08:23
The yen continues to move according to our main scenario. Yesterday, the price almost touched one of the embedded price channel lines and fell sharply, closing the day at 138.65. In today's Asian session, the price crossed the support at 137.00 and now it intends to go lower, to the target level of 135.23. I am waiting for the price convergence with the Marlin oscillator (the dashed line on the chart). The price may also cross 135.23 and there might not be a convergence, but that would require a collapse in the stock market. Surely it can happen, but so far there are no clear technical conditions for that. So let us not get ahead of the situation and just wait for the USD/JPY to test 135.23. On the four-hour chart, the price has not yet settled below 137.00. There could be a convergence with the Marlin oscillator. Or it may not happen (if the pair falls according to the main scenario), but it might settle before the release of tomorrow's US employment report.     Relevance up to 03:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328652
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

Increase Of The Cable Market (GBP/USD) Is Not Expected

InstaForex Analysis InstaForex Analysis 01.12.2022 08:26
The British pound gained 110 pips on Wednesday, but failed to break through the support at 1.1940. Price divergence with the Marlin oscillator takes the form of the usual sideways movement, and this is the first sign of potential growth in the medium-term. First of all the price should cross the resistance of the first target level at 1.2200. Settling above it will open the prospect of further growth to 1.2410, which is a support on April 28 and resistance on June 16. We will consider the reversal conditions on the lower timeframe. On the four-hour chart, the price has settled above the MACD indicator line, and Marlin has entered the positive area. Obviously, in order to change the trend, the price and the oscillator should go back under these lines, which have now become supports. In order to confirm the reversal, the price needs to go below 1.1940. Right now we do not expect the price to rise above 1.2200 - the markets behave too impulsively lately, ignoring the global economic trends.   Relevance up to 03:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328654
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The Euro (EUR) Will Try To Break Through The Nearest Resistance

InstaForex Analysis InstaForex Analysis 01.12.2022 08:32
Yesterday, Federal Reserve Chairman Jerome Powell delivered a speech. From his message, it became clear that the Fed will raise the rate by 0.50% at the December meeting (on the 14th) in order to avoid recession as an effect of the rate hike being too fast, although he confirmed that the tightening period itself may take longer and the final rate higher. Also, according to ADP data, there were 127,000 jobs created in the private sector in October against expectations of 200,000. As a result, the dollar index lost 0.79% and the euro gained 0.77% (76 points). Now the euro will try to break through the nearest resistance at 1.0470 and reach the target range at 1.0615/42. Investors are already focusing on the weaker employment data than the economists' consensus forecast (200,000 nonfarm) suggests. As a consequence, if the price rises quickly, a divergence at a flatter angle is possible (dashed line on the chart). If the price settles above the target range, the growth may extend to the next target range at 1.0758/87 to the support area of April 14-19 and resistance on May 30. But we look at such growth with doubts, since the current growth since September is still a correction. On the four-hour chart, the price crossed the MACD line, and the Marlin oscillator has moved into the positive area. We expect the price to reach the nearest range of 1.0470/90, where the price was staying on November 28. Staying above the range opens the way to 1.0615/42. Of course, if tomorrow's US labor data turns out to be weak. If results come out strong, then the euro might confuse traders in a sideways trend for another two weeks, until the Fed meeting.     search   g_translate     Relevance up to 03:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328656
The EUR/USD Price Failed To Exhibit A Strong Trending Movement

EUR/USD Pair: There Is Still No Downward Movement

InstaForex Analysis InstaForex Analysis 01.12.2022 08:34
M5 chart of EUR/USD Yesterday, the euro/dollar pair showed quite strange movements. There were quite a lot of macroeconomic statistics and fundamental events on Wednesday, nevertheless most of them were ignored. For example, there was quite an important report on European inflation, which surprisingly fell by 0.6% y/y. However, traders didn't think it was necessary to pay attention to this report. There were also important data on GDP in the third quarter and the ADP labor market during the US trading session. Here we can understand why traders did not react to it since it was contradictory: one report was very strong, the other was very weak. However, in a couple of hours after their release, the U.S. dollar began to rise sharply, and in another couple of hours - fell sharply. Everything would be fine if there were grounds for the final fall of the US currency in the form of Federal Reserve Chairman Jerome Powell's dovish rhetoric. But he just repeated the theses that everyone already knows. However, this time traders found some kind of "truth" in his speech that was not found in previous reports. There was only one trading signal yesterday. The pair broke out of the 1.0395-1.0340 area in the middle of the US trading session, which could be used to open short positions. However, the price managed to go down only 30 pips, which was enough for the Stop Loss to breakeven, but no more. COT report As for Commitment of Traders (COT) reports in 2022, they reflected bullish sentiment in the first six months of the year although the euro was bearish. Then, they illustrated bearish sentiment for several months with the euro being also bearish. Currently, the net position of non-commercial traders is again bullish and increasing. Meanwhile, the euro has hardly retreated from its 20-year lows. This is due to the fact that demand for the greenback is high amid a difficult geopolitical situation in the world. Therefore, despite a rise in demand for the euro, buoyant demand for the dollar does not allow the euro to strengthen. During the reporting week, the number of long positions held by non-commercial traders rose by 7,000 and that of short positions increased by 2,000. Consequently, the net position advanced by 5,000. The euro's recent growth is gradually coming in line with the figures illustrated in the COT report. Still, the greenback may resume growth under the influence of geopolitical factors or the lack of factors for further strengthening in the euro. The green and red lines of the first indicator moved far away from each other, which may indicate the end of the uptrend. The number of long positions exceeds that of short positions by 113,000. Therefore, the net position of non-commercial traders may continue to rise further, but without triggering a similar rise in the euro. When it comes to the total number of longs and shorts across all categories of traders, there are now 39,000 more short positions (635,000 vs 596,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD is still showing completely inadequate movements and yesterday was just another proof of that. There is still no downward movement even after the euro crossed the ascending trend line. The pair returned to its local peaks after Powell's speech, but we still don't think that the EUR has any reasons for further growth. On Thursday, the pair may trade at the following levels: 1.0124, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, and also Senkou Span B lines (1.0351) and Kijun Sen (1.0392). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 1, the EU will publish unemployment data and the manufacturing activity index. Meanwhile, important ISM business activity indexes and reports on changes in personal income and expenditures of the American population will be released in the US. I believe that traders might react to the ISM data. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 06:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328660
The Euro May Gradually Climb To The Target Level

The EUR/USD Pair Is Preparing To Turn Lower

InstaForex Analysis InstaForex Analysis 01.12.2022 08:37
Technical outlook: EURUSD rallied through 1.0450 intraday on Thursday after dropping to the 1.0300 lows late during the New York Session on Wednesday. The single currency pair is seen to be trading close to 1.0445 at this point in writing as the bulls prepare to re-test the 1.0500 handle. It could be safe to exit long positions at around the 1.0450-1.0550 area as strong resistance is expected to be offered. EURUSD might have completed its larger-degree counter-trend rally at 1.0500 recently. If the above holds well, the bears might come back in control from here and drag prices lower towards the 1.0000 mark at least. The potential also remains for the larger-degree trend to resume lower from here and drag the price below 0.9535. The overall wave structure from the 0.9535 lows suggests that EURUSD is preparing to turn lower either from here or after pushing through the 1.0550-1.0600 range. Either way, the bears are inclined to come back in control and drag the price towards 0.9500. A break below the 1.0300 immediate price support would confirm that the next move lower has resumed. Trading idea: Potential top in place around 1.0500. Aggressive trade setup might be lower from here, towards 1.0000 against 1.0700. Good luck!   Relevance up to 06:00 2022-12-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/303290
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

InstaForex Analysis InstaForex Analysis 01.12.2022 08:42
M5 chart of GBP/USD GBP/USD showed identical movements to EUR/USD on Wednesday. Traders worked out the U.S. reports, but they had a delayed reaction to them, and Federal Reserve Chairman Jerome Powell's speech in the evening did not provide any new information to traders, but they still started selling the US dollar again. I believe that the market is still not in a mood to sell, although the euro and pound have grown enough in recent weeks to correct. But as we said before, if there are no short positions, there is no downward movement. During the last days, the pair started hovering around the Senkou Span B and Kijun-Sen lines, which makes the current technical picture even more confusing. GBP ended the day near 1.2106 and even though the rally was not justified, we still expect a bearish correction. Today will be a little bit easier in terms of the fundamental background, but on Friday we anticipate a very significant report in the form of NonFarm Payrolls data, which can show negative dynamics. As for trading signals, the situation was very complicated, but look at the nature of the pair's movement during the day! First, there were three sell signals near 1.1974, which duplicated each other. Only one short position had to be opened, and traders could close it almost anywhere. The fact is that the levels of 1.1974, 1.2007 and the Kijun-sen line were to be considered as an area. GBP did not settle above this area so there was no signal to cancel short positions. Formally, this short could be closed near the Senkou Span B line in profit. However, once again, such traders' actions were not obvious. The next buy signal in the form of GBP settling above the Senkou Span B could also bring profit, as the price at least returned to the level of 1.1974. COT report The latest Commitment of Traders (COT) report on GBP logged a slight decrease in bearish sentiment. In the given period, the non-commercial group closed 1,900 long positions and 8,800 short positions. Thus, the net position of non-commercial traders increased by 7,000. The net position is gradually growing during the last months, but the sentiment of the big players is still bearish. The pound has been rising in recent weeks, but so far it does not seem that it is preparing for a long-term uptrend. And, if we remember the euro's situation, then based on the COT reports, we can hardly expect a surge in price. The demand for the US currency remains very high, and the market, as it seems, is just waiting for new geopolitical shocks so it can return to buying the dollar. The non-commercial group now has a total of 67,000 shorts and 34,000 longs opened. As we can see, there is a wide gap between them. As it turns out the euro is now unable to show growth when market sentiment is bullish. When it comes to the total number of long and short positions, here bulls have an advantage of 17,000. Still, this is not enough for the sterling to increase. Anyway, we are still skeptical about the pound's long-term growth although the technical picture shows otherwise. H1 chart of GBP/USD The pair started moving down on the one-hour chart, which we have been waiting for. It has crossed the trend line, so the uptrend is officially canceled. I believe that the pound may show a solid decline in the near future, but for now it needs to break through at least the Senkou Span B line and hope for support from this week's fundamental background. On Thursday, the pair may trade at the following levels: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259, 1.2342. The Senkou Span B (1.1959) and Kijun Sen (1.2013) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Thursday, the UK is scheduled to release an index of business activity, while the US will release important ISM indexes for services and manufacturing. Today could also be a volatile day. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate     Relevance up to 06:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328662
Analysis Of Movement Of The Canadian Dollar To Swiss Franc Pair (CAD/CHF)

Technical Outlook Of The British Pound To Swiss Franc Pair (GBP/USD)

InstaForex Analysis InstaForex Analysis 01.12.2022 08:50
On the 4-hour chart the GBP/CHF cross currency pair appears to be stuck at the RBS (Resistance Become Support) level at 1.1353 where currently GBP/CHF seems to be getting ready to appreciate rising up to the 1.1463 level as its first target and 1.1575 as its second target however, with deviations between price movements and the CCI indicator, as long as there is no significant downward correction to below the 1.1327 level, the upward rally scenario described earlier will remain valid. Relevance up to 05:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/114981
Hong Kong’s Hang Seng Had Its Best Month | EU Inflation Slowed

Hong Kong’s Hang Seng Had Its Best Month | EU Inflation Slowed

Saxo Bank Saxo Bank 01.12.2022 09:08
Summary:  Fed Chair Powell signaled the moderation of the tightening pace could start as soon as December and the terminal Fed Fund rate would be “somewhat higher” than the FOMC’s September projections. His tone was overall less hawkish than feared. S&P 500 rose to its two-month high and Hong Kong’s Hang Seng had its best month since 1998. Bond prices surged with the 10-year treasury yield falling to 3.61%. Crude oil and commodity currencies gained. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) surged on Powell’s speech and signs of China relaxing Covid-19 restrictions Fed Chair Powell signaled that the Fed would start to moderate the pace of rate hikes as soon as December and the terminal rate might just be “somewhat higher” than the September FOMC’s projections. The less-than-feared comments stirred up another round of risk-on buying in equities. The sentiment was also bolstered by more signs coming out of China on the country’s course to ease Covid restrictions gradually despite the recent outbreaks. The S&P 500 rose by 3.1% to a two-month high. All sectors within the S&P 500, led by information technology and communication services, each rising by around 5%. Nasdaq 100 surged 4.6% to 12,030. The Dow Jones Index rose 2.2% and was said to have technically entered a bull market, after rising more than 20% from is September closing low. US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rallied on the lack of new hawkishness in Powell’s speech Yields edged up a few basis points after a mixed bag of data in the morning until Fed Chair Powell’s speech hit the wire in the New York afternoon, seeing yields reversing and yields of the 2-year up to the 5-year tumbling by more than 15bps almost immediately from the intra-day highs. The 5-year performed the best and finished the day 19bps richer at 3.74%. The 2-year yield dropped 16bps to 4.31% and the 10-year yield was 14bps lower to settle at 3.61%.  Powell reiterated his well-telegraphed higher-for-longer message but did not add additional hawkish pushback as some feared. He said that it makes sense to moderate the pace of rate increases as the Fed “approach[es] the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting”. Further, his remark of terminal rate being “somewhat higher” than the Fed’s September projection was less hawkish than feared. Australia’s ASX200 (ASXSP200.1) about 3% away from its record high The Aussie market is up 12% from its October low, with commodities back in focus and rallying after the Fed signals a possibly smaller pace of rate hikes ahead. That has pressured the US dollar, with the US dollar index now down 5.4% from its peak, and that’s supported commodity prices higher, plus, as above, there is forward looking optimism on China. Locally, equites also appear supported in Australia as monthly inflation data came out weaker than expected yesterday, which supports the RBA remaining dovish and likely only hiking by 25bps (0.25%) next week. However, the important inflation read (quarterly CPI) is due early next year, which will be a more accurate reflection of price rises, and will likely show inflation in Australia is more sticky than monthly inflation read alluded to. Also consider if the best performers of late (who are all commodity companies) can continue to build momentum if stimulus continues in China’s property sector. In November, copper-gold company Sandfire (SFR) rose 45%, energy business Origin Energy gained 41% while Australia’s fourth biggest iron ore company, Champion Iron (CIA) rose 35%, with Nickel company Nickel Industries (NIC) following up 33%. So, it’s clear to say we are watching commodity companies closely as we believe the world will still struggle with the lack of tangible supply. Hong Kong’s Hang Seng (HIZ2) gained on the removal of lockdown in four Guangzhou districts Hong Kong stocks surged on Wednesday afternoon after Guangzhou lifted the lockdown in four districts even when the number of new cases was still rising in the city. Hang Seng Index climbed 2.2% with consumer discretionary, consumer staples, and industrials rising the most. In the consumer space, food and beverage names surged, with Haidilao (06862:xhkg) up 15.5% and Xiabuxiabu Catering (00520:xhkg) up 10.9%. Bilibili (09626:xhkg) jumped nearly 17% on the earnings beat. The three Chinese airlines listed in Hong Kong gained around 5% each on reopening optimism. The share prices of automakers jumped 4% to 11% on speculation for an extension of purchase tax credits for petrol vehicles. EV maker XPeng (09868:xhkg) surged 16% ahead of earnings. Another EV maker, Li Auto (02015) surged 8.9%. Hang Seng finished November up more than 26%.  It was the best monthly performance since October 1998 at the end of the Asian financial crisis. After Hong Kong market closed, XPeng reported Q3 results, missing analyst estimates but the share price of its ADRs jumped 46%. In A shares, CSI 300 was flat with auto names outperforming. FX: NZDUSD broke above 0.63, USDJPY below 137.50 Lower yields drove the US dollar lower after Powell’s speech lacked any hints of keeping the door open for 75bps in December or laying out a path for rate hikes through the course of 2023. The Euro was supported by Powell's dovish speech taking EUR/USD back above 1.04, but lacked conviction as hawkish ECB bets also retreated after a softer Eurozone CPI for November. The biggest gainers were NOK and NZD, and NZDUSD broke above the pivotal 0.63 which is the 200dma. USDJPY heading lower for a test of 137 with 200dma next in sight at 134.50. Crude oil (CLZ2 & LCOF3) higher on weaker USD and lower US inventories Crude oil markets extended recent gains amid signs of strong demand. US crude oil inventories fell by 12.6mbbl last week, the biggest decline since June 2019, according to EIA data. Meanwhile, Chinese authorities announced relaxation of Zero Covid policies in Guangzhou despite worsening Covid outbreak, signalling a better demand outlook as well. The lack of escalation in Powell’s speech also turned the dollar lower. WTI futures rose to $81/barrel while Brent futures rose above $85. The focus is now shifting to the weekend OPEC meeting, with some expecting a cut while others suggest a rollover of the current deal is more likely. Breakout in Silver (XAGUSD), Gold (XAUUSD) up as well Silver broke above the key 22 level to its highest levels since May this year as Powell signalled that the pace of interest rate hikes will slow in December. Gold edged higher as well and finished the month up over 8%, the biggest gains since July 2020. Next key levels to watch in Gold will be the 200dma and key level at 1808 while Silver may likely be heading to the 0.618 retracement at 23.35.   What to consider? Jerome Powell sticks to the script Fed Chair Powell repeated his comments from the November FOMC and what we have heard more generally from the Fed speakers over the course of the month. He said it makes sense to moderate the pace of interest rate hikes and the time to moderate the pace of hikes may come as soon as December, while he added it seems likely that rates must ultimately go somewhat higher than what was thought in the September SEPs. Powell also said they have made substantial progress towards sufficiently restrictive policy but have more ground to cover and they will likely need to hold policy at a restrictive level for some time. While his comments still tilted towards the hawkish side but there was no escalation that the markets had hoped for. His comment that he does not want to over-tighten but cutting rates is not something to do soon was a slight contrast to his earlier acceptance that risk of tightening less is greater that the risk over-tightening. Fed's Cook (voter) also said it is prudent for the Fed to hike in smaller steps as it moves forward and how far the Fed goes with hikes depends on how the economy responds, overall sticking to the consensus. US economic data broadly weaker, focus now on PCE prices and ISM manufacturing The private ADP jobs report showed US payrolls rose 127,000 this month, the slowest pace in nearly two years, as wage gains moderated. Job openings also fell in October to 10.334mln from September's 10.687mln, reversing a surprise jump in the prior month but still remaining elevated, according to the JOLTS report. The biggest downside surprise came in Chicago PMI for November which came in at 37.2 against an expected 47.0, falling from a prior 45.2. While monthly surveys can be noisy, but this one is now flirting with pandemic lows and puts the focus on ISM manufacturing due today. The only ray of positive news came from the Q3 GDP release which was upwardly revised by to 2.9% from 2.6% previously. Softer EU CPI weakens hawkish ECB bets Euro inflation slowed for the first time in 1.5 years to 10% in November from 10.6% YoY in October. ECB officials have highlighted the data will be key for their next rate decision, suggesting lower chance of another 75bps rate hike at the December 15 meeting. Still, it remains hard to say that inflation in the Eurozone has peaked. ECB members also remain broadly hawkish and suggest that the commitment to bring inflation back to target will stay. Guangzhou lifted the lockdown of several districts as a sign of easing restrictions even as new cases at elevated levels Guangzhou, the third largest city in China and the capital of the southern province of Guangdong, removed the “temporary control areas” restrictions of several districts even though the city’s daily new cases of Covid-19 stayed at nearly 7,000. It was an encouraging sign pointing to China’s willingness to continue the fine-tuning measures that it had recently started despite the surge in new cases across the country. Speaking at a pandemic control policy workshop, Vice Premier Sun Chunlian emphasized the importance of gradually fine-tuning the pandemic control measures in response to the lower fatality of the Omicron, higher vaccination rate, and the accumulation of experience in containing the spread of the virus. Equities in focus that could benefit from rate hikes not being as aggressive, and from the festive season spending It’s the world’s first festive season not in lockdown (excluding China), so we are watching retailer shares given they will likely benefit from retail shopping rising. It’s worth watching travel and tourism companies with the market forward looking and seeing that travel-services revenue could likely continue to gain momentum. Carnival shares are up 44% from October with the company seeing some of its strongest sales since pre-covid, Royal Caribbean shares are up 83% from July. We are also watching other travel affiliated companies do well, like Boeing, which is up 48% from September, as well as airlines, such as Singapore Airlines, Qantas, Air New Zealand. However, we think although the travel and tourism sector, especially airlines, will likely see a pick-up in sales amid the seasonality, we wonder if airlines will be able to extend their share price rally into 2023 as fuel costs are not expected offer respite into 2023. This means, those larger companies or those with a wide moat, might be more in focus, as they will be more likely able to sustain the costs pressures.   For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Market Insights Today: Powell’s lack of new hawkishness; Guangzhou restrictions eased – 1 December 2022 | Saxo Group (home.saxo)
The EUR/USD Pair Is Showing A Potential For Bearish Drop

Steen Jakobsen: ECB strategy is praying, hoping and waiting... not exactly action which gives hope for real economy

Steen Jakobsen Steen Jakobsen 29.11.2022 15:07
Fed interest rate decision isn't only one ahead of us. On December 15th European Central Bank decides on its monetary policy. Although it's widely known that it's arduous task to handle, discussion is on, especially right ahead of European inflation print. Let's find out Saxo's Steen Jakobsen point of view.       Supposing European CPI soars again, could ECB choose escape from recession over fighting inflation?   ECB and its management are extremely dovish, so effectively they are already and always been on this modus operandi. Their problem is inflation CPI is running at close to 11% and PPI above 40% - the price of high inflation is significantly above increase in employment medium and long term, which is why despite all evidence ECB continues to believe inflation will come magically down to 2-2.5% end of 2023. How this will happen in a global economy of deglobalization and high energy prices in yet to answered. ECB strategy is praying, hoping and waiting... not exactly action which gives hope for real economy.   Read next: As more central banks continue to catch up with the FED's policy, we could be seeing a shift in the balance of power in the currency market says XTB's Walid Koudmani| FXMAG.COM
FX: The Gap Versus The FX spot Rate In Poland Is Already The Largest In The CEE Region

FX: The Gap Versus The FX spot Rate In Poland Is Already The Largest In The CEE Region

ING Economics ING Economics 01.12.2022 10:02
The dollar is around 1% lower across the board after what was seen as a less hawkish speech from Fed Chair Powell softened US interest rates. A softening of China’s Covid policy is also helping emerging market currencies today. The relatively large adjustment in US rates and the dollar on Powell’s speech probably says a lot about positioning In this article USD: Overreaction? EUR: 1.05/1.06 is the risk for EUR/USD GBP: 1.22/1.23 for cable CEE: Hard to be positive on the zloty   Federal Reserve Chair Jerome Powell speaking at the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institute, in Washington USD: Overreaction? The dollar came off sharply late yesterday on comments from Federal Reserve Chairman Jerome Powell which signalled that December would probably be the occasion to shift to a slower pace of rate hikes. The market has been expecting the shift to a 50bp versus 75bp rate hike for a while, although it felt the need to price the terminal rate next summer some 10bp lower at 4.90%. Indeed, US yields came off quite a sharp 20bp across the curve. We are tempted to say that looks an overreaction in that while Chair Powell did acknowledge the slowing in the pace of hikes, his core message was one of stubbornly high core inflation, particularly in the core services ex-housing category. This category is largely driven by wages and an area where the Fed struggles to see labour supply improving anytime soon. Inputs into this story will come today and tomorrow in the form of the October core PCE deflator and the November jobs report, respectively. On the former, consensus expects October core PCE to decelerate to 0.3% month-on-month from 0.5%. This basket is different from the national CPI basket, where the 0.3% MoM release on 11 November triggered a huge drop in the dollar and rally in risk assets. Any upside surprise in today’s core PCE reading could see the dollar reverse overnight losses. In the bigger picture, we continue to take the view that a trade-weighted measure like DXY can hold support levels around the 105 area (or at least will not sustain any break under it). One challenge, though, is the EM picture. If we are seeing a sea-change in China’s Covid stance – e.g., a shift to home quarantine from city lockdowns, EM currencies may be due a re-rating. On the day then, the core PCE inflation data is the biggest input, and we prefer DXY to find support near 105.00. Chris Turner EUR: 1.05/1.06 is the risk for EUR/USD EUR/USD weakness in late Europe yesterday looked a function of end-month portfolio rebalancing (European equities had vastly outperformed) and it is no surprise to now see EUR/USD well above 1.04 on the sharp drop in US yields. Resistance is clearly set at the 1.0480/1.0500 area, above which we could see a spike to the 1.0600/0620 area. That is not our preferred view, but thinning December markets and seasonal dollar weakness mean that such a scenario cannot be ruled out. Bigger picture, however, weak global demand (note Korea’s poor November export data overnight) is not a good story for the pro-cyclical euro. Additionally, colder weather coming to northern Europe is starting to push gas prices higher again and keep the eurozone trade balance under pressure. We would like to think that 1.05/1.06 is as good as it gets for EUR/USD in December. Elsewhere, look out for Swiss November CPI today. We have been bearish EUR/CHF on the view that the Swiss National Bank wants a stronger nominal Swiss franc to fight inflation. That view will be challenged, of course, should inflation surprise on the downside.  Please also see Francesco Pesole’s article on the Norwegian krone. Yesterday, Norway’s central bank announced it will trim daily FX purchases from NOK 3.7bn to 1.9bn, which sent NOK rallying across the board. As discussed in the article, we see the two consecutive cuts in FX purchases as an indication of higher appetite for a stronger krone, which would help combat inflation at a time when economic woes and property market fragility may curb the appetite for monetary tightening. Chris Turner GBP: 1.22/1.23 for cable The softer dollar environment is giving cable another lift. This rally could extend to the 1.22/23 area unless either today’s US core PCE data or tomorrow’s US jobs data can put a floor back under US yields. EUR/GBP continues to hold support near 0.86 and that may well be the case into year-end. Both the Bank of England (BoE) and the European Central Bank (ECB) should be hiking by 50bp in December. But we are taking the view that risk assets will come under more pressure over coming months – which will lead to renewed – if mild – sterling underperformance. Chris Turner   CEE: Hard to be positive on the zloty Today, we will see PMI numbers across the region. We expect a rebound from lows in Poland from 42.0 to 42.6 and in the Czech Republic from 41.7 to 42.7, following the trend in Germany. On the other hand, in Hungary we forecast a drop below the 50-point level. As in Poland yesterday, the GDP breakdown for the third quarter will be published today in Hungary, which was the only country in the region to surprise negatively in the flash reading (-0.4% quarter-on-quarter) a few weeks ago. Later today, the Czech Republic's state budget result for November will be published. Given the recent increase in the deficit for this year and the question marks over funding, the number will get more attention than usual. However, the start of pre-funding needs for next year through CZGBs switches in recent days indicates a better-than-expected MinFin situation. On the FX front, two main topics remain on the table in the region: the Polish zloty and the Hungarian forint. Yesterday's downside inflation surprise pushed down the interest rate differential in Poland by around 25bp, further widening the gap versus the FX spot rate, which is already the largest in the CEE region in our view. So, it is hard to be positive on the zloty, but for now, apart from any rally in the US dollar, we don't see a trigger for a correction. Until then, the zloty is likely to remain below 4.70 EUR/PLN. Meanwhile, the market seems to be running out of patience in Hungary and the normalisation of relations with the EU is not progressing as fast as expected. Although yesterday's news did not bring anything really new in our view, the forint returned to the 410 EUR/HUF range, which probably cleared the long positioning built up in recent weeks. Thus, in our view, it is still worth waiting for the final decision of the European Council in December and we expect the forint back to stronger levels. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
China’s Caixin Manufacturing PMI Data Might Support The New Zealand Dollar (NZD)

The New Zealand Dollar (NZD) Has Been Strengthened

TeleTrade Comments TeleTrade Comments 01.12.2022 10:06
NZD/USD has refreshed its three-month high at 0.6335 on upbeat market sentiment. The speech from Jerome Powell confirmed the termination of a 75 bps rate hike spell in December meeting. New Zealand Dollar has picked strength on upbeat Caixin Manufacturing PMI and the reopening of the Chinese economy. NZD/USD is expected to smash 0.6350 as the US Dollar is seeing more downside on policy moderation fears. NZD/USD is marching north firmly after shifting its auction profile above the round-level resistance of 0.6300 in the Asian session. The kiwi asset has refreshed its three-month high at 0.6335 as the New Zealand Dollar has been strengthened by a surprise rise in Caixin Manufacturing PMI data and a significant improvement in investors’ risk appetite post-Federal Reserve (Fed)’s commentary. Fed Powell’s promise to moderate the extreme-tight monetary policy in the December meeting has infused fresh blood into risk-sensitive assets. S&P500 futures are gathering momentum adding more upside to Wednesday’s gains. The US Dollar Index (DXY) has surrendered its short-lived recovery attempt and is on the verge of refreshing its day’s low below 105.50. Meanwhile, the 10-year US Treasury yields have slipped again to 3.60% amid healthy demand for US government bonds by investors. Federal Reserve’s Powell is set to terminate the 75 bps rate hike culture The commentary from Fed chair Jerome Powell has confirmed that the central bank is looking to slow down its interest rate hike pace. Catalysts that have compelled Fed Chair to sound less hawkish while providing interest rate guidance for December’s monetary policy meeting are a slowdown in labor demand, a decline in economic activities, and a soft October inflation report. The Federal Reserve is bound to bring price stability to the United States economy but not at the cost of the economy. Fed Chair in his speech cited that it is not appropriate to ‘Crash the economy and clean it afterward’. This has confirmed that the Federal Reserve (Fed) won’t continue the 75 basis points (bps) rate hike spell now and may shift to a lower rate hike to 50 bps. As per the CME FedWatch tool, the chances of a 50 bps rate hike announcement by the Fed in the December meeting holds around 80%. US Dollar to remain volatile ahead of Nonfarm Payrolls Another critical trigger that is going to keep US Dollar bulls on the tenterhooks in the United States Nonfarm Payrolls (NFP) data, which will release on Friday. As per the consensus, the United States economy added 200K jobs in November, lower than the prior release of 261K. Cues from US Automatic Data Processing (ADP) Employment data indicate that the additional payrolls in November are merely 127K. The Unemployment Rate is seen unchanged at 3.7%. Apart from that, investors will keep an eye on Average Hourly Earnings data. The street is expecting that the next trigger that could create troubles for the Federal Reserve is rising wage prices. Wage inflation carries the capability of driving price inflation higher. Post a slowdown in inflation led by accelerating interest rates, the United States households will remain with higher earnings that could trigger retail demand. Upbeat Caixin Manufacturing PMI drove New Zealand Dollar In early Tokyo, IHS Markit reported a surprise rise in Caixin Manufacturing data. The economic data was released at 49.4 for November month vs. 48.9 as projected and October’s release of 49.2. Despite extreme lockdown measures in November by Chinese authorities to contain the COVID-19 epidemic, the economy has managed to display better-than-projected performance. This has strengthened the kiwi asset significantly as New Zealand is one of the leading trading partners of China. Meanwhile, signs of the gradual opening of the Chinese economy led by relaxations in zero Covid-19 policy to return economic prospects on track have also strengthened the New Zealand Dollar. NZD/USD technical outlook NZD/USD has comfortably established above the 200-period Exponential Moving Average (EMA) at around 0.6200, which indicates that the long-term trend has turned bullish. Also, a bull cross, represented by the 20-and 50-EMAs at 0.5871, indicates a continuation of the upside. Going forward, the ultimate resistance is placed from August 12 high at 0.6470. Apart from that, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates that the upside momentum is intact.     search   g_translate    
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The GBP/JPY Pair Is Likely To Remain Bearish Mood

TeleTrade Comments TeleTrade Comments 01.12.2022 10:09
GBP/JPY pokes a short-term key support line amid downbeat oscillators. Clear break of two-month-old support line becomes necessary for the bears to keep reins. Monthly resistance line restricts corrective rebound below 169.00 hurdle. GBP/JPY jostles with the key support near 165.00 as bears keep the reins near the lowest levels in a fortnight heading into Thursday’s London open. In doing so, the cross-currency pair braces for the first weekly loss in three as sellers poke an upward-sloping support line from early October. That said, bearish MACD signals and downbeat RSI (14), not oversold, keeps GBP/JPY sellers hopeful of breaking the immediate support surrounding 165.00. However, the 100-DMA and the 200-DMA could challenge the GBP/JPY pair afterward around 164.35 and 162.80 in that order. Following that, a downward trajectory toward October’s low surrounding 159.73 can’t be ruled out. During the fall, the 160.00 psychological magnet may act as a buffer. Meanwhile, recovery moves will have to cross a descending resistance line from October 31, near 167.85 to convince GBP/JPY buyers. Even so, multiple tops marked in November around 169.00 could challenge the upside momentum. It’s worth noting that the 170.00 round figure and the yearly top marked in October around 172.15 may test the pair buyers before giving them control. Overall, GBP/JPY is likely to remain bearish but the room towards the south appears limited. GBP/JPY: Daily chart Trend: Limited downside expected  
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

A Modest Retracement In Crude Oil Prices Lends Support To The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 01.12.2022 10:18
USD/CAD struggles to gain any meaningful traction amid the prevalent USD selling bias. A modest downtick in oil prices undermines the Loonie and helps limit the downside. Traders now look to the US PCE inflation data and ISM PMI short-term opportunities. The USD/CAD pair consolidates the previous day's heavy losses and oscillates in a narrow range, around the 1.3400 mark through the early European session on Thursday. The US Dollar languishes near a multi-month low in the wake of dovish comments by Federal Reserve Chairman Jerome Powell on Wednesday and acts as a headwind for the USD/CAD pair. In fact, Powell sent a clear message that the US central bank will soften its stance and said that it was time to moderate the pace of interest rate hikes. This leads to an extension of the recent sharp decline in the US Treasury bond yields and keeps the USD bulls on the defensive. Apart from this, the risk-on mood - as depicted by a positive tone around the equity markets - is seen as another factor weighing on the safe-haven Greenback. That said, a modest retracement in Crude Oil prices from a one-week high touched on Wednesday undermines the commodity-linked Loonie and lends support to the USD/CAD pair. The likelihood that OPEC+ will leave output unchanged at its meeting on Sunday and demand concerns act as a headwind for the black liquid. Nevertheless, the underlying bearish sentiment surrounding the USD suggests that the path of least resistance for the USD/CAD pair is to the downside. This, in turn, supports prospects for an extension of this week's sharp pullback from the vicinity of mid-1.3600s, or the highest level since November 4 set on Tuesday. Hence, any attempted recovery could be seen as a selling opportunity and runs the risk of fizzling out rather quickly. Market participants now look forward to the US economic docket, highlighting the release of the Fed's preferred inflation gauge - the Core PCE Price Index - and ISM Manufacturing PMI. This, along with the US bond yields and the broader risk sentiment, will influence the USD. Traders will further take cues from oil price dynamics to grab short-term opportunities around the USD/CAD pair.
The USD/CHF Pair Returned To Its Previous Three-Day Recovery

The SNB Has Quietly Accepted The Franc’s Depreciation

TeleTrade Comments TeleTrade Comments 01.12.2022 10:28
On the Swiss franc front, investors keep an eye on Consumer Price Index (CPI) data. As the SNB is set to continue fighting excessive inflation, the EUR/CHF is unlikely to trade above parity, economists at Commerzbank report. Swiss inflation stands at 3% “Swiss inflation stands at 3%, as inflation data for November due today is likely to confirm. That means that inflation exceeds the Swiss National Bank’s target. The Vice-President of the SNB Martin Schlegel has made clear that the SNB will not lean back and do nothing, but will instead continue to take action against excessive inflation levels.” “Even though the SNB has quietly accepted the Franc’s depreciation of just over 3.5% against the Euro since the end of September, the FX market can never be entirely sure when the SNB’s patience will run out while inflation remains well above its target. Hence, we assume that it will still take some time before EUR/CHF will seriously tackle parity.”  
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

Investors Got Clues About Further Changes In US Interest Rates

Conotoxia Comments Conotoxia Comments 01.12.2022 10:38
Last night's speech by Jerome Powell, chairman of the US Federal Reserve, was one of the key events of the day. Investors were expecting clues about further changes in US interest rates, and they got them. Powell sounded more dovish. During his speech at the Brookings Institute, Jerome Powell signaled that the Fed may slow the pace of interest rate hikes in December, "the time for a moderate pace of rate hikes may come as early as the December meeting," - Powell said, while adding that it is likely "that restoring price stability will require maintaining policy at restrictive levels for some time." In addition, Powell added that historically premature policy easing has been strongly discouraged. "We will stay the course until the job is done," he said. - he concluded. Federal Reserve Chairman Jerome Powell also said that he "doesn't want to over-tighten" interest rates, as the central bank doesn't see fit to "crash the economy and clean up after it." Nevertheless, answering questions at a session organized by the Brookings Institute, Powell stressed that "cutting rates is not something I want to do anytime soon," the BBN service concludes. This was the Fed chairman's last public appearance before the December interest rate decision. Source: Conotoxia MT5, USDIndex, Daily Markets in a little euphoria The U.S. Nasdaq index hit its highest level in 10 weeks yesterday, the AUD/USD pair rate hit its highest level in 11 weeks, NZD/USD rose to levels seen 2.5 months ago, gold reached its highest level in 2 weeks, and the dollar index fell in November in percentage terms by the strongest amount since 2010. This reaction of the markets seems to show quite well how high investors' hopes were placed on Powell's speech, and that they were not disappointed. In addition to Powell's speech, events from China may also provide support for the markets. Investors may be pleased with China's softening stance on Covid. The top official in charge of tight restrictions on the Covid outbreak said the country's fight against the virus is entering a new phase amid a waning omicron variant, rising vaccination rates and broader experience in preventing Covid. Source: Conotoxia MT5, US100, H4 What's next ahead? After the Fed chairman's speech, it seems that the key for the markets may be Friday and data from the US labor market. It is in it that high hopes may be placed to resist the economic slowdown. However, if the labor market situation began to deteriorate as well, the Fed could face a difficult choice. Which to fight? With inflation or with the deterioration in US employment. That is what we will find out tomorrow. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The Challenge to the Dollar: De-dollarisation and Geopolitical Shifts

Fed: The Pace Of Rate Hikes Will Slow Down | Positive Potential Of Crude Oil Is Limited

Swissquote Bank Swissquote Bank 01.12.2022 10:50
Powell said that the Federal Reserve (Fed) will slow down the pace of rate hikes from next month, while insisting that smaller increases are less important than how much further to go and for how long. But all investors heard was ‘the Fed will hike by 50bp next month and bla bla bla…’ US yields and the dollar fell, equities rallied!!! Forex The US dollar’s depreciation is being cheered across the market. The EURUSD pushed above the 200-DMA as the dollar-yen fell to 136.50.And if Japan doesn’t need to spend its FX reserves to strengthen the back of the yen, they could well use it to increase the defense spending, without increasing taxes and without cutting spending. Japan And Japan is not the only country that increases defense spending. Bigger global budget for spending boosts defense stocks! Commodities In commodities, American crude rallied past the $81pb yesterday as US crude oil inventories fell by 12.6 million barrels last week, well above the 3.2 million barrel draw expected by analysts. It is because exports ran hot, and refineries hit their highest capacity since August 2019. But be careful with the rising recession odds, because investors have been cutting their net speculative positions despite the supply concerns, and that’s probably going to limit the topside potential! Watch the full episode to find out more! 0:00 Intro 0:28 Investors don’t want to hear what Powell tries to say! 3:49 FX & data roundup 6:50 Defense stocks to continue outperform 7:56 Crude oil jumps but positive potential is limited Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Powell #speech #USD #economic #data #ADP #JOLTS #GDP #NFP #unemployment #EUR #inflation #TTF #natgas #crudeoil #defense #stocks #Themes #trading #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The Melbourne Institute Inflation Gauge For Australia Rose More Than Expected

There Is A Chance That The RBA Will Again Raise Rates By 25bp

Kenny Fisher Kenny Fisher 01.12.2022 13:14
AUD/USD continues to power upwards and hit 10-week highs earlier today. The Australian dollar climbed 1.5% on Wednesday and has edged higher today. In the European session, AUD/USD is trading at 0.6796, up 0.14%. US dollar slides after Powell speech Fed Chair Jerome Powell spoke on Wednesday and gave the markets what they wanted to hear with regard to the December rate hike. Powell strongly hinted that the Fed would slow the pace of rate increases at the December 14th meeting, after four successive 75-bp hikes. Powell said that slowing down at this point “is a good way to balance the risks”, as the Fed Chair is trying to slow the economy while avoiding a recession. The markets duly responded by pricing in a 50-bp rate hike at 80%, up sharply from 65% prior to Powell’s remarks. This sent financial markets higher, while the US dollar was broadly lower. Investors focussed on Powell’s hint that rate hikes will slow at the next meeting, choosing to ignore his comments that rates could rise higher than previously expected and for a prolonged period in order to curb stubborn inflation. The likely easing to 50 bp was a green light for the markets, and what is down the road can be worried about another time. In Australia, Private Capital Expenditure disappointed in Q3 with a reading of -0.6%. This was below the Q2 reading of 0.0% and way off the consensus of 1.5%. The RBA meets on December 6th after having eased on rate hikes, with two straight increases of 25-bp. The cash rate is currently at 2.85%, and there is a good chance that the RBA will again raise rates by 25 bp next week, as it looks to fight inflation while guiding the economy to a soft landing.   AUD/USD Technical AUD/USD is testing resistance at 0.6829. Above, there is resistance at 0.6903 There is support at 0.6707 and 0.6633 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Oanda Podcast: US Jobs Report, SVB Financial Fallout And More

Saxo Bank Podcast: The Fed Chair Powell Speech, The US Equity Market Rallied And More

Saxo Bank Saxo Bank 01.12.2022 13:19
Summary:  Today we look at the market exploding higher in the wake of the Fed Chair Powell speech on inflation and the labor market yesterday, as we note that Powell failed to specifically push back much against the current easing of financial conditions and market expectations that Fed policy will be loosening already by late next year and especially in 2024. But we also caution that, while the US equity market rallied through key resistance yesterday, the market has a tendency to react strongly to event risks on the day without notable follow through in following sessions. On that note, we also have important incoming data that can test yesterday's reaction in the form of the October US PCE inflation indicator ahead of tomorrow's US jobs report. We also look at the commodities market reaction to Powell's speech, particularly precious metals and discuss copper in the context of the drumbeat of news pointing to China easing up on Covid policy, as well as crude oil. Today's pod features Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.     Source: https://www.home.saxo/content/articles/podcast/podcast-dec-1-2022-01122022
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

Soft US Data Helped US Yields Lower All Along The Curve

Saxo Bank Saxo Bank 01.12.2022 14:28
Summary:  Fed Chair Powell’s speech on the economy, inflation and the labor market yesterday only confirmed the market’s forward expectations for Fed policy. The lack of notable pushback from Powell on the market’s pricing of eventual Fed easing saw equity markets in a celebratory squeeze and the USD taken down a few notches as weak data prior to his speech added to the reaction and the drop in US treasury yields. But now that we have the binary reaction, cue the incoming data. Today's Saxo Market Call podcastToday's Market Quick Take from the Saxo Strategy TeamFX Trading focus: USD dumped on Fed Chair Powell speech, but cue the incoming data. Fed Chair Powell failed to deliver the kind of pushback against easy financial conditions that many had the right to expect in his speech yesterday, as the policy guidance was rather light in the speech. Most of the speech centered on a discussion of inflationary risks and where the Fed felt comfortable with the trajectory and outlook, and where it felt less certain, which was especially notable in the labor market/wage dynamics. The heart of the speech discussed the likely permanent reduction in the potential labor force due to older workers leaving the work force during the pandemic and the uncertainty of how quickly the wage pressures would ease. Near the end of the speech, Powell said “Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level. It is likely that restoring price stability will require holding policy at a restrictive level for some time.” The lack of certainty and Powell suggesting it may be appropriate to reduce the size of Fed hikes to 50 basis points at the December FOMC meeting emboldened the market. The question is whether the very “binary” interpretation of his speech will feed a new extended sell-off in the US dollar, as incoming data could quickly reject the narrative. Soft US data added to the reaction function yesterday and helped US yields lower all along the curve, although this did not unfold until the market had a look at what the Fed Chair had to say. The November Chicago PMI plunged to a scary 37.2 (vs. 47 expected and 45.0 in October) and the November ADP private payrolls change were out at a 21-month low of +127k vs. the +200k expected. Today’s key event risk is the core month-on-month PCE inflation print, expected at +0.3% MoM and 5.0% year-on-year. Any upside surprise would sit very poorly with yesterday’s reaction, as would a stronger than expected November jobs and/or earnings data tomorrow. Chart: USDJPYUSDJPY plunged down through the 137.50 area recent pivot low yesterday in the wake of Fed Chair Powell’s speech as US yields dropped all along the curve, with the US 10-year benchmark yield hitting 3.60%, a new local low ahead of the important 3.50%. The 200-day moving average, currently near 134.50 and rising rapidly, is zooming into view and will be a key test that might be hard to break unless US yields continue lower, which will be far more down to incoming data in coming weeks. The pain trade across markets now will be either a) stronger than expected US data and/or b) more inflationary data regardless of the strength in the real economy (that would require the Fed to remain higher for longer and for the market to eventually reset forward inflation expectations). Also watch global energy prices, a second source of vulnerability for the JPY due to its import of nearly all energy supplies. Some BoJ member jaw-boning overnight on an eventual policy shift also helping the JPY at the margin. Source: Saxo Group Not a big focus for traders, but EURSEK is still up in the high part of the range despite what has normally been a supportive backdrop for SEK (the historic SEK sensitivity to risk sentiment). Why? Likely, as the market shields its eyes at the implications of the rate hike cycle into the Swedish domestic economy on the one hand. We recently saw that staggering 7.7% drop in real volumes of Retail Sales for October and the country’s consumers have yet to feel the brunt of higher mortgage payments as the impact on discretionary spending mounts in coming months (well over half of mortgages taken out in 2020-21 were on floating rates of a year or less). As well, European PMIs are weak and are unlikely to pick up significantly as long as energy prices remain an issue, with the Swedish economy traditionally leveraged to the EU economy. The Swedish November Manufacturing PMI was also out this morning and hit a new cycle low at 45.8. Table: FX Board of G10 and CNH trend evolution and strength.The US dollar down-trend re-intensified yesterday after Fed Chair Powell’s speech, with the USD breaking to new cycle lows in places, but will the incoming data continue to support both risk on and lower US yields, the ideal combination for USD bears? Elsewhere, note the NZD continuing its remarkable run while the JPY has perked up as a function of falling US treasury yields. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.AUDNZD hits new cycle lows today as the market may be fretting RBA dragging its heels on rate tightening more than the supportive news out of China on the trend toward reopening. If there is a pair ripe for mean reversion on the one-month time frame or less, it might be NZDCAD, the trending outlier in absolute value terms. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights 1230 – US Nov. Challenger Job Cuts 1330 – US Oct. PCE Inflation 1330 – US Weekly Initial Jobless Claims 1420 – US Fed’s Logan (Voter 2023) to speak 1500 – US Nov. ISM Manufacturing 1645 – ECB Chief Economist Lane to speak   Source: https://www.home.saxo/content/articles/forex/fx-update-usd-bears-celebrate-lack-of-powell-pushback-01122022
China: Caixin manufacturing PMI reaches 49.4, a bit more than in October. ING talks possible reduced impact of COVID on the country's economy

China: Caixin manufacturing PMI reaches 49.4, a bit more than in October. ING talks possible reduced impact of COVID on the country's economy

ING Economics ING Economics 01.12.2022 15:41
Chinese manufacturing activity contracted further in November. The future depends on the implementation of Covid measures and external demand Conditions for international trade remain very tough The detail reveals a picture that is weaker than the headline numbers suggest China's Caixin manufacturing PMI surprised on the upside at 49.4 in November compared to 49.2 in October. It appears as though smaller manufacturers did not suffer as badly as had been expected by the consensus, which had forecast an index of 48.9. But looking at the details of the sub-indices, it looks like manufacturing activity actually deteriorated faster in November.  Read next: There are quite strong indications that Fed and ECB will go for 50bp rate hikes | FXMAG.COM The employment sub-index was the lowest it has been since March 2020. In contrast, the input price sub-index has been above 50 for the last two months due to high crude oil and metals prices. And even though the two sub-indices diverged, they point to slower sales growth and slimmer profit margins for smaller manufacturers, which is a more downbeat story than that suggested by the headline numbers. Future depends on implementation of existing Covid measures Weaker external demand is another headache for Chinese exporters. With even weaker external economic growth projected for 2023, it seems that there will be no immediate reversal of the weak trend for Chinese exporters any time soon. One possible positive note is that although Covid cases in China continue to run high, Vice Premier Sun has stated that "...with the weakening of the pathogenicity of the Omicron virus, the popularisation of vaccination and the accumulation of experience in prevention and control, China is facing a new situation and new tasks in the prevention and control of the epidemic".This hints that local government officials will likely exercise Covid measures with an intent to reduce their impact on the economy even if there are no further imminent changes in the overall Covid rules.  Read this article on THINK TagsPMI Covid China Caixin PMI Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Analysis Of USD/CHF Pair: The Swiss Currency Pair Rebounds

Kenny Fisher talks weaker greenback versus Swiss franc - December 1st

Kenny Fisher Kenny Fisher 01.12.2022 23:39
The Swiss franc continues to gain ground as the US dollar has weakened broadly in the wake of Fed Chair Powell’s comments on Wednesday. In the North American session, USD/CHF is trading at 0.9384, down 0.74% US dollar slides as Powell signals 50-bp hike It may not have been a dovish pivot, but the financial markets saw a green light after Jerome Powell’s comments on Wednesday. Powell’s speech was essentially a rehash of the Fedspeak we’ve been hearing over the past several weeks, but his broad hint that the Fed would ease the December rate hike to 50 basis points (after four straight hikes of 75 bp) gave investors the excuse to buy equities. Read next: There Is A Chance That The RBA Will Again Raise Rates By 25bp| FXMAG.COM Powell said that slowing down at this point “is a good way to balance the risks”, as the Fed Chair is trying to slow the economy while at the same time avoiding a recession. The markets responded by pricing in a 50-bp rate hike at 80%, up sharply from 65% prior to Powell’s remarks. This sent financial markets higher but pushed the US dollar sharply lower, with USD/CHF dropping close to 1% on Wednesday. Powell’s message was balanced, as he reiterated that rates could rise higher than previously anticipated and for a longer period in order to tame inflation. The Fed remains committed to bringing inflation lower, and Powell said  “substantially more evidence” was needed to convince the Fed that inflation was actually declining. The markets, however, chose to go on an equity spree, buoyed by expectations that the Fed has decided to ease the pace of rate hikes. This week’s data continues to raise concerns about the Swiss economy.  The KOF Economic Barometer slowed to 89.5, down from 90.0 and shy of the estimate of 91.3. The ZEW Expectations survey also slowed to -57.5, down from -53.1 and well off the consensus of -41.9. Retail sales for October, released today, were a huge disappointment at -2.5%. This follows a 2.6% gain in September and missed the consensus of 3.3%. The Swiss franc has enjoyed a superb November, as USD/CHF has plunged 5.5%. If this trend continues, we could see the Swiss National Bank express some concern about the rising Swiss franc, which could drag down the key export sector. USD/CHF Technical USD/CHF  is putting pressure on support at 0.9366. The next support level is 0.9277 There is resistance at 0.9482 and 0.9577 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Swiss franc climbs as US dollar sags - MarketPulseMarketPulse
The EUR/USD Pair Has A Potential For Drop

German retails sales don't steal the show from euro which looks quite good versus greenback

Kenny Fisher Kenny Fisher 01.12.2022 23:50
The euro has climbed to its highest level since June 29th, as the US dollar continues to struggle. In the North American session, EUR/USD is trading at 1.0496, up 0.85%. German retail sales slide German consumers are being squeezed by the double-whammy of rising interest rates and double-digit inflation, and the October retail sales report shows that consumer spending was sharply lower. Retail sales dropped 2.8% YoY, versus 1.2% in September and a consensus of -0.6%. On an annualized basis, retail sales plunged 5.0%, much worse than the September read of -0.9% and the consensus of -2.8%. The soft retail sales report couldn’t dampen the shine on the euro, which has climbed sharply as the US dollar can’t find its footing. The dollar found itself in full retreat after Fed Chair Jerome Powell’s speech on Wednesday. Powell’s comments were balanced and didn’t stray from the steady stream of Fedspeak we’ve been hearing for weeks, but investors still treated the speech as dovish, sending equity markets higher and the US dollar lower. The markets were delighted that Powell essentially confirmed that the Fed would ease policy as soon as the December meeting. After four straight rate increases of 75 basis points, the Fed is poised to deliver a milder 50-bp hike, with perhaps smaller hikes in the new year. Read next: Soft German retail sales can't stop EUR/USD - MarketPulseMarketPulse Powell said that smaller rate increases were less important than the question of high to hike and for how long. Powell added that the direction of inflation remains “highly uncertain”, and that more evidence was needed to demonstrate that inflation had peaked. As well, he said that rates will likely rise “somewhat higher” than the September forecast. That certainly sounds like a hawkish stance, but the markets chose to focus on Powell’s broad hint that the Fed would likely begin lowering rates as soon as next week. The Fed may not consider that a dovish pivot, but the fact remains that Powell’s comments have renewed optimism, sending stocks higher and the US dollar lower. EUR/USD Technical EUR/USD is testing resistance at 1.0490. Above, there is resistance at 1.0583 There is support at 1.03537 and 1.0264 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Soft German retail sales can't stop EUR/USD - MarketPulseMarketPulse
The US Dollar Weakens as Chinese and Japanese Intervention Threats Rise, While US CPI and UK Jobs Data Await: A Preview

Ed Moya talks US data, Forex, cryptocurrency and more - December 1st

Ed Moya Ed Moya 01.12.2022 23:53
US stocks were unable to hold onto earlier gains as Wall Street digested a swathe of economic data that showed inflation is easing and the labor market is cooling. ​ It’s been a nice rally but no one wants to be aggressively bullish heading into the NFP report. Yesterday’s Fed Chair Powell speech was good news for risky assets as he focused on inflation coming down and that the economy is doing well. ​ The risks of overtightening have many expecting the Fed to end its tightening cycle early next year and that will continue if the labor market softens quickly. ​ Earlier, investors were looking for any signs to buy stocks after reports that China was getting ready to release new Covid guidelines. China is far from willing to completely relax its guidelines, but these next steps could help end protests. ​ ​ ​ ​ US data The Fed’s preferred inflation gauge grew 5% from a year ago, confirming the recent trend of falling pricing data points. ​ The closely watched ISM report fell into contraction territory, reaching the lowest levels since the pandemic recovery began. The ISM’s prices paid also dropped to the lowest levels since May 2020. ​ October personal income and spending data were rather strong but no one expects that to continue going forward. ​ The initial jobless claims headline reading showed the labor market is still strong. ​ First-time claims fell by 16,000 to 225,000, which was lower than expected and well below the highs seen in the summer. ​ Continuing claims was interesting as it jumped to 1.61 million, which is getting closer to the pre-pandemic average of 1.7 million. ​ The trends are clear for inflation, but the big question mark is if the labor market is going to have a broader slowdown. ​ Tomorrow’s NFP report will be important as it could move forward bets that inflation will continue to decline. ​ FX The BOJ’s Tamura made quite a first impression to fx traders. ​ Tamura helped send the yen lower after he noted, “It would be appropriate to conduct a review at the right time, including the monetary policy framework and inflation target.” ​ Currency traders are used to Japan always having ultra-loose policy but that seems like it will have to change in the new year. ​ Cryptos Cryptos are struggling today as the earlier rally faded ahead of NFPs and as concerns brew that Tether loans could be the next big risk for the cryptoverse. ​ Stablecoins are an important part of the crypto world and if one of the major ones break, that will send bitcoin and ethereum to new lows. ​ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Stocks volatile ahead of NFP, US Data, BOJ Tamura’s first impression, Tether loan concerns - MarketPulseMarketPulse
The Data May Keep The British Pound (GBP) From Rising

The Cable Market (GBP/USD) Resumed Its Upward Trend

InstaForex Analysis InstaForex Analysis 02.12.2022 08:00
The GBP/USD currency pair increased by at least 350 points on Wednesday and Thursday. You only need to know that market participants were merely purchasing pounds and selling dollars. We have already mentioned that the market has been building up short positions for almost two years and that the pair's growth may be a simple profit-taking move. However, from our perspective, everything has a limit. In a few months, the pound has increased by 2,000 points. In other words, it expands faster than it did when things were "troubled." The current state of affairs in the foreign exchange market is shocking. Considering only the most recent global cycle, the dollar has been rising against the euro and the pound for two years. However, the dollar is now falling at the speed of light and seemingly for no reason. Reiterating that technical corrections occur and should occur on the most senior TF, all the upward movement in recent months might be a correction in the technical trend. However, such a movement appears merely disheartening over several days or weeks. For instance, the US dollar dropped by 240 points yesterday, even before releasing the most significant ISM business activity indices in the US. Because there was only one round of downward movement on Wednesday, it only dropped by 100 points. I would like to find at least some justification for purchasing the pair on Wednesday night, then on Thursday. As a result, the pair's attempt to consolidate below the moving average was unsuccessful. The upward trend is still present, the pound is expanding rapidly, and all indicators across all timeframes point upward. What else would be required to trade profitably? In addition, we concur. You will recall that we have always emphasized the importance of concrete technical signals supporting any fundamental hypotheses. Such theories shouldn't be tested if there are no signals. And so we find ourselves in a paradoxical situation where technology says "up," the foundation says "it's time to adjust," and "technology" also allows correction, but we only see growth. Is it reasonable to anticipate anything from non-farms? In theory, given how the market behaved this week and the week before, there is absolutely no reason to believe that today's reports on the unemployment rate and non-farm payrolls won't have some effect on the market's "bullish" sentiment. Remember that there aren't many terrible factors that can cause the dollar's value to drop by three digits. So what could be the cause of reports on non-farms and unemployment, even if they are much stronger than expected? A 100-point adjustment? Both the dollar and the pound have already been oversold. A technical correction could start at any time. But that's the issue—it gets much harder to predict when the equipment and foundation completely misalign. A correction is imminent because the pound has increased by 1100 points in the previous month alone. It obviously can expand at a different rate in December. However, we did not observe a decline in the pair when there were specific fundamental and macroeconomic reasons for sales. When these grounds are out of sight, we will witness a strong fall following the law of meanness. Therefore, it is necessary to treat all news, reports, and events with extreme caution regardless of their nature. The only thing left to say is that there were no significant events this week in the UK, so everything that occurred on the foreign exchange market had an entirely American foundation. Even theoretically, the weakening of the pound sterling was impossible because the only report on business activity in the manufacturing sector received from the UK was once again below the "waterline" of 50.0. The only thing left for us to do is make it through Friday, observe the strange movements again, and wait for the infrastructure and machinery to catch up, at least somewhat. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 163 points. This value for the dollar/pound exchange rate is "very high." As a result, on Friday, December 2, we anticipate movement that is constrained by the levels of 1.2091 and 1.2419. The Heiken Ashi indicator's turning downward indicates a new phase of the corrective movement. Nearest levels of support S1 – 1.2207 S2 – 1.2146 S3 – 1.2085 Nearest levels of resistance R1 – 1.2268 R2 – 1.2329 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair resumed its upward trend. Therefore, until the Heiken Ashi indicator turns down, you should maintain buy orders with targets of 1.2329 and 1.2419. When a price is anchored below the moving average, sell orders should be placed with targets of 1.1902 and 1.1841. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     search   g_translate     Relevance up to 02:00 2022-12-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328771
The EUR/USD Price May Fall Under 1.0660

The Euro To US Dollar Pair Held Above The Moving Average Line

InstaForex Analysis InstaForex Analysis 02.12.2022 08:01
We have already stated in our daily trading recommendations that the current movements are illogical and torn. This is on the hourly TF or lower. But things still need to be better at the 4H-TF. The current issue is that, despite everything in the information sphere, the dollar continues to decline for some reason. The market perceives any news or report as a new call to abandon the US dollar. For instance, on Wednesday night, the US dollar dropped by 150 points. Such a decline would make sense if Powell abruptly declared that there would be no more rate increases in the US and that fighting inflation was no longer necessary. If today's Nonfarm showed a negative value, such a decline would be expected. However, Powell's speech, which we all heard (or read in its entirety), made it clear that there was no justification for doing away with US currency. The reason the dollar kept declining even on Thursday is typically a mystery. Powell's performance will be discussed in more detail below, but let's discuss the technique. The upward trend has been maintained because the euro/dollar pair held above the moving average line. As we previously stated, a consolidation 20 points below the moving average cannot be regarded as a confident sell signal. Please, we witnessed it firsthand yesterday. In a few hours, the price easily returned to the region above the moving average and reached the Murray level of "6/8" at 1.0498. Even though we have been waiting for a real downward correction for almost two weeks, given how the pair has been moving in recent weeks, we wouldn't be surprised if this unfounded growth continues. But what can you do if investors sell the dollar regardless of the circumstances? Powell's remarks were of no interest to the market. In addition to Powell's speech on Wednesday, the third quarter GDP report was also released. Although we stated that it always comes out in three estimates, allowing market participants to know what to expect from each subsequent publication, the indicator has become much stronger than anticipated this time. What did we see, then? 50 points of US currency growth, then a 150-point decline? Let us go back to the Federal Reserve Chairman's speech. Every single one of Powell's theses was previously known to the market. Any Fed monetary committee member who knew about them did not keep it a secret. James Bullard, Mary Daly, and other committee members consequently raised them. However, the market determined that while Bullard's remarks were uninteresting, Powell's comments on the same topic were worthwhile. As a result, the dollar fell once more in a circumstance where it could have been prevented. What did Powell essentially say? Will December see a decline in the rate? It's not news. Will the Fed require a significant amount of time where rates remain high? Additionally, this is not breaking news, and I believe this thesis to be more of a "hawkish" factor. If so, will the peak rate level — anticipated to be reached in the year's first half — be higher than expected? So, this is another "hawkish" aspect! Additionally, the market has long been aware of it. Because of this, we have two "hawkish" statements and one "dovish" statement (which is a stretch), but the US dollar crashed to the ground like a mowed lawn. Therefore, expecting the market to respond logically to what is happening right now is absurd. The current market is just obligated to operate non-farm as it should. We are considering all the absurdities of the previous two or three weeks. If the value of the labor market report is completely normal today, but the dollar is falling, we will only be able to look at the macroeconomic background sometime soon. Instead, we will only be able to trade on technology every day. Recall that the average number of new jobs is between 200 and 300 thousand. Less - the decline of the dollar will appear reasonable. As of December 2, the euro/dollar currency pair's average volatility over the previous five trading days was 118 points, considered "high." As a result, we anticipate that the pair will fluctuate on Friday between 1.0378 and 1.0612. The Heiken Ashi indicator's turning downward indicates a new phase of the corrective movement. Nearest levels of support S1 – 1.0376 S2 – 1.0254 S3 – 1.0132 Nearest levels of resistance R1 – 1.0498 R2 – 1.0620 R3 – 1.0742 Trading Suggestions: The EUR/USD pair is attempting to resume its uptrend. As a result, until the Heiken Ashi indicator turns down, it is necessary to hold long positions with a target of 1.0620. No earlier than the price fixing below the moving average line with a target of 1.0254 will sales become significant. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.       Relevance up to 02:00 2022-12-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328769
Further Downside Of The AUD/JPY Cross Pair Is Expected

Now The Price Of AUD/USD Pair Is Building Strength

InstaForex Analysis InstaForex Analysis 02.12.2022 08:04
The Australian dollar rose above the 0.6799 level yesterday, the November 15 peak. Target levels have been changed. Now the price is building strength to advance to 0.6917, the September 13 peak. Oil gained 1.13% yesterday, gold gained 1.92% and the dollar index fell 1.25%, but the aussie added a modest 0.45%. Rumor has it that the Reserve Bank of Australia will only raise rates by 0.25% at their next meeting (December 6). All these incoming data suggest that the bullish correction which started back on October 13 is coming to an end. A divergence with a new, flatter angle is forming on the daily chart. To complete it, it will be convenient if the price reaches the nearest target level of 0.6917. But if the price settles below 0.6799, a double weak divergence will be formed, and it is almost done. On the 4-hour chart, the price divergence with the oscillator is almost ready. But with important U.S. jobs data coming out today, market participants will wait a bit with the early development of technical reversal signs. We wait for the data and progress. Target levels are marked on the charts. Relevance up to 04:00 2022-12-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328773
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

GBP/USD Pair: The Pace Of Growth Will Likely Slow Down

InstaForex Analysis InstaForex Analysis 02.12.2022 08:07
The pound is trying really hard (and possibly due to recklessness) to work using the expected weakness of the Federal Reserve and today's US jobs data. The forecast for new non-farm jobs is 200,000 against 261,000 in October. The pound gained 1.73% yesterday. The Marlin oscillator is extremely subdued, it is developing in a horizontal channel with the intention of going down. It is possible for the oscillator to move up from this range, but then the price shouldn't rise by less than 2% for the day, which is unlikely. The nearest target is 1.2410 - low of April and high of June 16. If the price settles above the level, the next target will be the 1.2598-1.2666 range - the double top of May. On the four-hour chart, the price settled above the level of 1.2200. The divergence of the price with the oscillator Marlin, which is about to occur, suggests that the pace of growth will likely slow down the pace. For now we wait for the price to reach the target level of 1.2410.   Relevance up to 04:00 2022-12-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328775
The EUR/AUD Pair May Have The Potential To Continue Its Decline

EUR/USD Pair: A Pause In Growth In Anticipation Of New Important Information Is Expected

InstaForex Analysis InstaForex Analysis 02.12.2022 08:10
In anticipation of today's US jobs data, on the back of Federal Reserve Chairman Jerome Powell's seemingly not obvious dovish speech, the euro rose 119 pips yesterday. The price crossed the target level of 1.0470, the peak of November 28, and is now heading to the target range of 1.0015/42. The range is defined by the highs of June and May. So far, the price is going with our scenario with forming a divergence when the target range is reached. On the four-hour chart, there is a sign that a double divergence is forming with the Marlin oscillator. In the current market sentiment, it may mean a pause in growth in anticipation of new important information. That will be the U.S. employment data for November. Forecast is 200,000 new jobs, compared to 261,000 in October. The improving dynamics of weekly unemployment claims and yesterday's drop of the ISM Manufacturing Employment subindex from 50.0 to 48.4 might be weaker than expected. Traders will be waiting for this situation to become clearer. Relevance up to 04:00 2022-12-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328777
The Collapse Of The Silicon Valley Bank Weakened The Dollar And USD/JPY But Supported EUR/USD, AUD/USD, And GBP/USD

The Demand For US Currency (USD) Significantly Dropped

InstaForex Analysis InstaForex Analysis 02.12.2022 08:27
The demand for US currency significantly dropped on Wednesday night and Thursday during the day. Due to this, the euro/dollar and pound/dollar instruments saw price increases of about 200 and 300 basis points, respectively. In yesterday's reviews, I already conducted a thorough analysis of the news landscape of these days. I concluded that economic data could not have a significant enough impact on market sentiment to cause the US dollar to depreciate significantly against the euro and the pound. The market did not react that way because the news background was not that bad for the dollar. The only thing that has anything to do with the US dollar's decline is Jerome Powell's speech on Wednesday night. Other analysts have written quite a bit about this subject, and most concur that Powell's speech didn't offer anything novel or demoralizing. The Fed President noted that economic growth is below the anticipated trajectory, inflation is still very high, and a slowdown in the rate increase could occur as early as December. However, he added that the interest rate might rise for longer than the Fed had anticipated in September. What qualifies as the "hawkish" element? Why did the market respond to the "dovish" statements rather than him? Other FOMC members have expressed this "dovish" rhetoric numerous, but the market did not retaliate as violently. I don't think explaining how the market reacted to the speech is worthwhile because it initially "aimed" at buying both instruments. Just look at how the US session began on Thursday and how the US dollar immediately began to decline (and both instruments up). Although Powell's speech was given days earlier, the American statistics at the start of the session had yet to be made public. However, the market also identified factors that reduced demand for the dollar. Thus, I conclude that, rather than Powell's speech being full of "dovish" theses, the market decided that the demand for the dollar was declining. It didn't abound, though. What comes next? The wave e peak on the euro currency has been broken once more, and the wave marking may get even more complicated. The British pound believes that everything is the same. Another significant Nonfarm Payrolls report will be released in the USA today, which is expected to send the market into a frenzy. But I think the market won't care what this report is worth. Regardless of how compelling the report is, the value of the US dollar will decline if they decide to keep selling it. Perhaps I need to be more accurate and treat the market fairly. I would be okay if the situation changed the next day completely. But if the market interprets the news background in its convenient manner, what use is it to analyze it at all? I conclude that the upward trend section's construction is complete and has increased complexity to five waves. As a result, I suggest making sales with targets close to the estimated 0.9994 level, or 323.6% Fibonacci. The trend's upward portion could become more complicated and take on a longer form, and the likelihood of this happening is increasing daily. The construction of a new downward trend segment is predicated on the wave pattern of the pound/dollar instrument. I cannot suggest purchasing the instrument immediately because the wave marking already permits the development of a downward trend section. With targets around the 1.1707 mark, or 161.8% Fibonacci, sales are now more accurate. The wave e, however, can evolve into an even longer form.       Relevance up to 05:00 2022-12-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328781
Russia's Weekend Mutiny Raises Concerns About Putin's Power Grip; Market Highlights: Gold Support, FX Intervention, and Fed's Stress Test Results

A Wait-And-See Attitude Towards All US Dollar Pairs Is Advisable

InstaForex Analysis InstaForex Analysis 02.12.2022 08:35
Traders are focused on today's NonFarm Payrolls report. Key US labor market growth data is especially important right now in light of recent events. If the data lets the dollar bulls down as well (in addition to the PCE and ISM manufacturing index), the greenback will bear significant pressure in all major pairs. Also, keep in mind that the NonFarm Payrolls will be released less than two weeks before the Federal Reserve's December meeting. The last speech of Fed Chairman Jerome Powell was not beneficial for the dollar (in my opinion - undeservedly), while a disappointing labor market report will only add fuel to the fire. In that case, the EUR/USD bulls, in particular, can already think about conquering the 6 figure in the medium term. In general, recent events are not unfolding in favor of the U.S. currency. And it is not only because of objective circumstances. For example, the market reacted quite adequately to the decline of the ISM manufacturing index, which collapsed to 49 points, reaching its lowest value since May 2020. Traders also reacted fairly to the slowdown in the core PCE index, although this slowdown was minimal (and predictable). No complaints here, as they say. At the same time, in my opinion, market participants are interpreting too many fundamental factors against the greenback - even in those cases where there is a less favorable aspect of the issue. For example, Powell said during his last speech that the time to reduce the pace of rate hikes "may come as soon as the December meeting." At the same time, he said that the final level of the federal funds rate will likely be higher than the September forecasts. It is noteworthy that Powell had previously voiced both theses, and each time the market reacted differently to his words. Lately, the fundamental environment has not been in favor of the greenback: traders are keenly reacting to negative information for the dollar and are quite skeptical to positive (hawkish) signals. A vivid example of this is the market's reaction to Powell's speech: market participants went with the dovish messages and chose to ignore the statement that the final rate will be at a higher level. All this suggests that today's Nonfarm data will also be treated in a "special" manner. In my opinion, the data can only support the dollar if all components of the report come out in the green. Otherwise it will be interpreted against the greenback. Let me remind you that dollar bulls were not impressed by the last (October) Nonfarm data. Specifically, the unemployment rate climbed to 3.7% (from the previous value of 3.5%) and the average hourly wage growth rate slowed on an annualized basis to 4.7%, whereas it has been consistently above or in line with the 5% level since January. The share of the economically active population in October slightly decreased, but still, to 62.2%. All of the aforementioned indicators came out in the red, much to the disappointment of supporters of the strong dollar. After this report, the odds of a 75-point rate hike at the December meeting dropped to 20% (according to the CME FedWatch Tool). Accordingly, the 50-point scenario became the base case, with an 80% chance of being realized. According to general forecasts, the number of employed people should increase by 200,000 in November. The unemployment rate is likely to remain unchanged at 3.7%. The annualized growth rate of average hourly earnings may slow to 4.5%. In my opinion, the dollar will get no support even if all components of the release come out at projected levels. At the same time, there is definitely an implication that the numbers may not reach the forecasts at all. The alarm bells have already rung on this subject: The day before yesterday, the ADP released a disappointing report which showed an increase of 127,000 new jobs in the non-farm payrolls, contrary to its forecast of 200,000. However, we have to admit that the ADP numbers do not always correlate with the official numbers, so there is still intrigue here. At the moment, it is advisable to take a wait-and-see attitude towards all dollar pairs, and EUR/USD is not an exception here. The Nonfarm data will probably not be able to change the situation: as mentioned before, the fundamental situation is not in favor of the dollar. Nevertheless, opening long positions ahead of such an important release is a very risky action. Taking into account the "Friday factor", it is an unreasonable risk, especially since the pair is in the area of 5-month highs Relevance up to 07:00 2022-12-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328789
Credit Suisse case: Western Assets expects Swiss authorities to act if sentiment doesn't improve

The US Dollar To Swiss Franc (USD/CHF) Bears Remain Hopeful

TeleTrade Comments TeleTrade Comments 02.12.2022 08:54
USD/CHF snaps two-day downtrend as buyers prepare for US jobs report. Cautious mood, rebound in yields allow bears to take a breather amid sluggish session. US NFP could recall pair bears on downbeat forecasts, dovish Fed outlook. USD/CHF picks up bids to pare recent losses around the lowest levels in a fortnight during early Friday. That said, the Swiss Franc (CHF) pair rebounds to 0.9385 by the press time. The quote’s latest consolidation could be linked to the anxiety ahead of the key US employment data, as well as recent comments from International Monetary Fund (IMF) Managing Director Kristalina Georgieva. The cautious mood before the US Nonfarm Payrolls (NFP) gained extra strength after New York Fed’s John Williams stated that the Fed has a ways to go with rate rises. On the other hand, IMF’s Georgieva said that recession risks are rising for many countries, the outlook for global growth is exceptionally uncertain and dominated by risks. Also likely to have probed the USD/CHF bears could be the fears surrounding the slowdown in the Initial Public Offering (IPO) markets. While portraying the mood, the S&P 500 Futures drop 0.30% intraday to 4,070 whereas the US 10-year Treasury yields printed a corrective bounce off the 10-week low to 3.54% by the press time. However, the USD/CHF bears remain hopeful as the majority of the Fed policymakers, including Chairman Jerome Powell advocated for easy rate hikes. On the same line were the comments from US Treasury Secretary Janet Yellen. Furthermore, mostly downbeat United States data also weigh on USD/CHF prices. It should be noted that the softer economics from Switzerland also challenged the USD/CHF bears of late. Swiss Real Retail Sales dropped by 2.5% YoY in October versus anticipated growth of 3.3% and 2.5% (revised) prior. Additionally, the nation’s Consumer Price Index (CPI) matched 3.0% YoY forecasts and prior while missing on MoM to 0.0% versus 0.1% expected and previous readings. To sum up, USD/CHF portrays the pre-data correction and is likely to decline further after the US statistics. Forecasts suggest that the headlines Nonfarm Payrolls (NFP) is likely to ease with a 200K print versus 261K prior while the Unemployment Rate could remain unchanged at 3.7%. Technical analysis Despite the latest rebound, the USD/CHF bears remain hopeful of breaking the previous monthly low of 0.9355 unless the quote stays firmer beyond the support-turned-resistance line from November 15, close to 0.9415 by the press time.      
Underestimated Risks: Market Underestimating Further RBA Tightening

The USD/INR Pair’s Failure Joins Indicator’s Bears Signals

TeleTrade Comments TeleTrade Comments 02.12.2022 09:07
USD/INR bears take a breather around two-week low. Sustained trading below 50-DMA, bearish oscillators favor sellers. Four-month-old support line, 100-DMA to challenge bears, descending trend line from late October adds to the upside filters. USD/INR stays defensive around the lowest levels in two weeks, steady around 81.10 by the press time, as bears pause after a four-day south-run during early Friday. Even so, the Indian Rupee (INR) buyers remain hopeful to extend the latest downturn. That said, the USD/INR pair’s failure to cross the 50-DMA joins the Moving Average Convergence and Divergence (MACD) indicator’s bears signals and downbeat conditions of the Relative Strength Index (RSI) line, placed at 14, to keep bears hopeful. With this, the intraday sellers could keep attacking the 81.00 threshold ahead of reaching the key support line from early August, near 80.90. Following that, the 100-DMA level surrounding 80.77 and November’s low of 80.47 could lure the bears afterward. Alternatively, a convergence of the three-week-old descending trend line and the 50-DMA highlights 81.90 as strong resistance for the USD/INR bulls to crack before retaking control. Even so, a downward-sloping resistance line from October 20, close to 82.35, could challenge the pair’s further upside. In a case where AUD/USD remains firmer past 82.35, the odds of its run-up towards the record high marked in October around 83.30 can’t be ruled out. USD/INR: Daily chart Trend: Further downside expected     search   g_translate    
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The Risk Sentiment Should Provide A Fresh Impetus To The NZD/USD Pair

TeleTrade Comments TeleTrade Comments 02.12.2022 09:09
NZD/USD gains traction for the fourth successive day amid the prevalent USD selling bias. The Fed’s dovish pivot keeps the US bond yields depressed and weighs on the greenback. The cautious market mood could cap the risk-sensitive Kiwi ahead of the US NFP report. The NZD/USD pair attracts fresh buying on the last day of the week and maintains its bid tone through the early European session. This marks the fourth straight day of a positive move and lifts spot prices closer to the highest level since mid-August touched on Thursday. Bulls now await a sustained strength beyond the 0.6400 mark amid the prevalent US Dollar selling bias.y The USD Index, which measures the greenback's performance against a basket of currencies, languishes near a multi-month low amid the recent dovish signals from the Federal Reserve officials. In fact, Fed Chair Jerome Powell sent a clear message on Wednesday that the US central bank will soften its stance and said that it was time to slow the pace of interest rate hikes. Apart from this, signs of easing inflationary pressure and sluggish US Treasury bond yields continue to weigh on the greenback. On Thursday, the US Bureau of Economic Analysis reported that the Personal Consumption Expenditures (PCE) Price Index slowed to 6% YoY in October from 6.3% previous. Adding to this, the annual Core PCE Price Index, the Fed's preferred gauge of inflation, edged down to 5% from 5.2% as expected. The softer data dragged the yield on the benchmark 10-year US government to a nearly two-month low. That said, the cautious mood could limit losses for the safe-haven USD and cap the risk-sensitive Kiwi. Furthermore, traders also seem reluctant to place aggressive bets and prefer to move to the sidelines ahead of the closely-watched US monthly employment details. The popularly known NFP report, due later during the early North American session, will influence the near-term USD price dynamics. Apart from this, the broader risk sentiment should provide a fresh impetus to the NZD/USD pair. Nevertheless, spot prices remain on track to register gains for the seventh successive week.  
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The USD/CAD Pair May Witness Further Downside

TeleTrade Comments TeleTrade Comments 02.12.2022 09:13
USD/CAD remains indecisive after two-day downtrend, defends weekly gains. Federal Reserve policymakers’ dovish bias, softer United States data weigh US Dollar. Chatters surrounding China, Oil price cap on Russian exports test WTI bulls. Downbeat expectations from Canada, United States employment report tease Canadian Dollar buyers. USD/CAD portrays the market’s indecision ahead of the monthly employment data from the United States and Canada during early Friday. In doing so, the Canadian Dollar fails to justify the retreat in the WTI crude oil, Canada’s key export item, amid a lackluster US Dollar. That said, the Loonie pair seesaws around 1.3430 by the press time, after a two-day downtrend. Even if the USD/CAD pair remains inactive as of late, the hopes of slower rate hikes from the Federal Reserve (Fed) contrasts with the recently hawkish bias surrounding the Bank of Canada (BOC) to keep the bears hopeful. It’s worth noting that the looming Oil price cap from the Group of Seven (G7) nations and recovery in China’s Covid conditions hint at the further firming of Canada’s key earner, which in turn could weigh on the Loonie pair. Federal Reserve policymakers contrast with Bank of Canada officials to favor USD/CAD bears The dovish bias of the Federal Reserve (Fed) Chairman Jerome Powell, as well as downbeat comments from US Treasury Secretary Janet Yellen, initially raised hopes of easy rate hikes. Following that, Federal Reserve (Fed) Governor Michelle Bowman stated that (It is) appropriate for us to slow the pace of increases. Before him, Fed Governor Jerome Powell also teased the slowing of a rate hike while US Treasury Secretary Yellen also advocated for a soft landing. Further, Vice Chair of supervision, Michael Barr, also said, “We may shift to a slower pace of rate increases at the next meeting.”  It’s worth noting that the recent comments from New York Fed’s John Williams seemed to have tested the US Dollar bears as the policymakers stated that the Fed has a ways to go with rate rises. On the other hand, Bank of Canada (BOC) Governor Tiff Macklem testified in late November while saying, “We expect our policy rate will need to rise further.” Additionally, BOC’s Senior Deputy Governor Carolyn Rogers said, “It will take time to get back to solid growth with low inflation but we will get there.” Differences between United States and Canada data also weigh on Loonie pair On Thursday, United States Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge, matched 5.0% market forecasts on YoY but eased to 0.2% MoM versus 0.3% expected. Further, US ISM Manufacturing PMI for November eased to 49.0 versus 49.7 expected and 50.2 prior. Earlier in the week, the US ADP Employment Change marked the lowest readings since January 2021 with 127K figure for November versus 200K forecast and 239K previous readings. Further, the second estimate of the US Gross Domestic Product (GDP) Annualized for the third quarter (Q3) marked 2.9% growth versus 2.6% initial forecasts. Talking about Canada, Labor Productivity jumped to 0.6% in the third quarter (Q3) versus -0.1% expected and 0.1% prior (revised). Further, S&P Global Manufacturing PMI for November increased to 49.6 from 49.3 market expectations and 48.8 prior. Previously, Canada’s Gross Domestic Product Annualized for the third quarter (Q3) eased to 2.9% versus 3.5% expected and 3.2% (revised down) prior. Oil buyers stay hopeful WTI crude oil remains on the bull’s radar despite the latest retreat to $81.00. The reason could be linked to the comments from the Group of Seven Nations (G7) Price Cap Coalition, as well as hopes for China’s economic recovery. Late on Thursday, Reuters quoted an Official from the G7 Price Cap Coalition as saying, “We are 'very very close' to agreement on $60-a- barrel price cap on Russian oil exports.” The diplomat also showed optimism about agreeing on refined products price cap by February 5. Further, the consecutive three days of the downtrend of Chinese daily Covid infections from a record high allowed the policymakers to tease the “next stage” in battling the virus while announcing multiple easing of the activity-control measures. Additionally, a likely inaction at this week’s meeting of the Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+. Considering Canada’s reliance on reliance on Crude Oil exports and likely hardships for the black gold supplies, as well as improvement in demand, the USD/CAD pair may witness further downside. United States, Canada job numbers are the key Given the likely downbeat outcome from both the Canadian and United States employment data, USD/CAD pair traders may try to find greater details and could react with more aggression in case of a surprise outcome. That said, the headline US Nonfarm Payrolls (NFP) is likely to ease with a 200K print versus 261K prior while the Unemployment Rate could remain unchanged at 3.7%. It should be noted that a likely easing in the Average Hourly Earnings for the stated month could also weigh on the USD/CAD price. On the other hand, Canada’s Net Change in Employment may decline to 5K versus 108.3K prior while the Unemployment Rate could increase to 5.3% from 5.2% previous readings. USD/CAD technical analysis Despite the latest inaction, the USD/CAD pair portrays a clear U-turn from the 50-DMA, as well as a downward-sloping resistance line from October 13, currently joining each other around 1.3570-75. However, a failure to break a two-week-old ascending support line, near 1.3400 by the press time, keeps the Loonie pair buyers hopeful. Even if the quote breaks the 1.3400 support line, a convergence of the 100-DMA and an ascending trend line from August 25, close to 1.3290 at the latest, appears a tough nut to crack for the USD/CAD pair sellers. Alternatively, a clear upside break of the 1.3570-75 resistance confluence will need validation from the recent peak of 1.3645 to convince USD/CAD bulls. Following that, a run-up towards the 23.6% Fibonacci retracement level of the Loonie pair’s August-October upside, near 1.3680, can’t be ruled out. It should be noted that the USD/CAD pair’s advances past 1.3680 may witness a bumpy road around 1.3840 before the bulls could aim for the yearly high marked in October around 1.3980. Overall, USD/CAD is likely to remain sidelined with a short-term downside bias. USD/CAD: Daily chart Trend: Limited downside expected     search   g_translate    
Inflation slowdown may let Reserve Bank of Australia go for 50bp or inaction

Orbex's Jing Ren looks into Aussie against greenback - December 2nd

Jing Ren Jing Ren 02.12.2022 09:16
It is likely that the AUDUSD pair will form a bearish triple zigzag Ⓦ-Ⓧ-Ⓨ-Ⓧ-Ⓩ in the long term, where the primary wave Ⓩ is a simple zigzag (A)-(B)-(C). The intermediate wave (B) of this zigzag took the form of a simple bullish zigzag A-B-C. At the moment, an impulse wave (C) is being formed, which consists of minor sub-waves 1-2-3-4-5. Minor wave 3 consists of five sub-waves of the minute degree. Most likely, the development of the minor corrective wave 4 in the form of a minute double zigzag was completed not so long ago. Thus, the market may continue to move down in the impulse wave 5. The currency is expected to decline to the previous low of 0.617, marked by the impulse 3. However, corrective wave 4 may not have been fully completed. Bulls could build only two parts of correction 4, that is, we can see fully formed sub-waves ⓦ-ⓧ, and the sub-wave ⓨ is still being built, but is already close to its completion. In the near future, the market may grow to 0.689. At that level, the entire corrective wave 4 will be at 76.4% along the Fibonacci lines of previous bearish impulse 3. Then, after the full completion of wave 4, we can expect a decline in the minor wave 5.
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

Below-Forecast NFP Figures Could Encourage The Fed To Shift To A Softer Stance

InstaForex Analysis InstaForex Analysis 02.12.2022 09:27
Markets are looking out for today's US employment data as it could signal whether the Fed will finally end its cycle of aggressive interest rate hikes. Wednesday's ADP jobs report already came in well below expectations, while Jerome Powell's recent speech was less hawkish than expected. If upcoming news indicate a surge in lay-offs, sharp fall in employment and dip in new job gains, then this means that inflation is likely to ease soon, so the bank can confidently start to reduce the rate increases. This is also what Powell said when he indicated that Fed rates may increase by 0.50%, not 0.75%, in December. In short, below-forecast labor market figures could encourage the Fed to shift to a softer stance, which will be positive for markets. It could lead to a new rally in equities, especially in the US. As for Treasury yields, they will go down along with dollar. Forecasts for today: AUD/USD The pair is trading below 0.6830. If positive sentiment increases, the quote could break out of the resistance level and head towards 0.6900. USD/CAD A renewed rally in crude oil prices could put pressure on the pair. A drop below 1.3400 will bring it down to 1.3300. Relevance up to 06:00 2022-12-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328785
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

US dollar softens as PCE deflator decelerates, Japanese yen gains from Bank of Japan which suggests end of QE

Jing Ren Jing Ren 02.12.2022 08:55
NZDUSD makes higher high The US dollar continues to soften after October’s PCE showed a deceleration. The pop above the high of 0.6290 is a confirmation that the bulls are still in control after a short-lived correction. Strong momentum may send the pair to August’s high at 0.6460 which is a major ceiling from the medium-term perspective. Its breach could force the last selling interests to cover and trigger a bullish reversal in the weeks to come. As the RSI surged into the overbought area, 0.6270 is the closest support in case of a pullback. Read next: Orbex's Jing Ren looks into Aussie against greenback - December 2nd | FXMAG.COM CADJPY struggles for bids The Japanese yen rallied after BoJ officials hinted at a potential exit of QE. On the daily chart, a fall below the double bottom by the June and August lows around 102.00 may cause a bearish reversal. A bearish MA cross shows an acceleration to the south. The latest rebound came to a halt at 103.40, which suggests that the path of least resistance is down. The psychological level of 100.00 could be next. The RSI’s overextension may attract some buying but the bears may see a bounce as an opportunity to sell into strength. NAS 100 awaits more catalyst The Nasdaq 100 steadies as traders await November’s reading on the US labour market. On the daily chart, the index has found solid support over the 20-day moving average (11500) next to the previous double top from October. The surge in conjunction with a bullish MA cross shows that the recovery could be speeding up towards 12300. But before that, the RSI’s overbought situation means that the price could use some breathing room after a vertical ascent. 11850 is the immediate support and 11650 a key demand zone.
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

FX: Today’s US Payrolls With A Strong Bearish Rhetoric On The USD

ING Economics ING Economics 02.12.2022 09:56
While macro factors continue to point at dollar resilience in our view, markets are fully buying into the Fed's pivot story, and have turned more structurally bearish on the dollar. Today's US payrolls may fall short of triggering an inversion of this trend, and USD downside risks persist. Keep an eye on Canadian numbers too ahead of next week's BoC meeting USD: Payrolls may not offer lifeline to the dollar With the DXY index correcting by more than 7% since the early November peak, and trading below 105.00 for the first time since July, it is now evident that markets have operated a structural shift towards a bearish dollar narrative. It’s also evident that such a shift is primarily due to expectations that the Fed is nearing the end of its tightening cycle. As explained by our US economist here, investors have called Fed Chair Jerome Powell’s higher-for-longer “bluff”, applying a larger weight on four indicators (CPI, PPI, import prices and yesterday’s PCE) that are pointing to abating price pressures. Fed Funds futures show peak rate expectations have dropped below 4.90%, after having priced in 5.25% less than a month ago. In our view, this radical shift in the market’s reaction function is premature, and may not be sustainable if the Fed increases the volume of its rate protest by sounding more stubbornly hawkish and the next inflation readings argue against a rapid descent in inflation. Incidentally, the global macro picture remains challenging – especially in Europe (where colder weather may push gas prices higher) and China – which also points to dollar resilience. However, we must acknowledge that markets are approaching today’s US payrolls with a strong bearish rhetoric on the dollar, and would likely jump on more risk-on (USD-negative) bets unless we see a convincingly strong payroll read. The consensus is centred around 200k, and we forecast 220k, with the unemployment rate staying at 3.7%. Those numbers would be quite respectable and indicate that the jobs market has indeed remained extremely tight, but while it may halt the dollar’s trend, it could fail to invert it. All in all, the balance of risks appears slightly tilted to the downside for the dollar today. A contraction in payrolls to 150k could generate a fresh round of large USD selling.    The yen should be exceptionally sensitive to the jobs figures today. The main risk for USD/JPY is that UST 10Y yields fail to find extra support at 3.50%: a further bond rally could force a break below the 134.50 200-d MA and unlock additional downside potential for USD/JPY. Still, markets may struggle to live with sub-3.50% rates for long in the current environment. Francesco Pesole EUR: Ignoring some warning signs EUR/USD moves should only be a function of the market’s reaction to US payrolls today. There is a non-negligible risk we explore 1.0600, with the pair not having any clear resistance levels until the 1.0780 6-month highs. We are, however, getting the feeling that markets are ignoring at least one warning sign for the euro. The recovery in business sentiment in the eurozone has undoubtedly been the result of lower gas prices, which have benefitted from mild weather in Europe. TTF contracts are trading at one-month highs now and may see further upside volatility in the near term as temperatures in northern Europe are expected to fall. A significant recovery in gas prices would likely make the recent rally in EUR/USD unsustainable. On the domestic side, we’ll see PPI numbers in the eurozone today, and hear from ECB president Christine Lagarde again. Yesterday, she sounded quite hawkish, signalling the need to keep inflation expectations anchored and implicitly leaving the door open for a 75bp move in December. Markets currently price in 55bp, and we are calling for a half-point hike. Francesco Pesole GBP: Cable nearing the peak? There are no domestic drivers for the pound today given a light data calendar and no Bank of England speakers. As discussed in the dollar section above, US payrolls may fail to invert the bearish dollar trend and GBP/USD may find a bit more support around 1.2300-1.2350. However, as for EUR/USD, cable is not factoring in the negative implications of rebounding gas prices and weak economic fundamentals. A return to 1.1500 around the turn of the year seems appropriate in our view. Francesco Pesole CAD: Jobs numbers quite key for BoC Payrolls will also be published in Canada today. We must note the employment series has been rather volatile, with the October figures coming in at a very strong 108k, which was entirely driven by full-time hiring. The consensus is centred around a very small 10k increase, and there is a high chance we could see a negative read. This would probably keep markets leaning in favour of a 25bp rate hike by the Bank of Canada next week (currently, 30bp are in the price). However, we see room for some upside surprise today in the jobs numbers and see a higher chance of another 50bp by the BoC. USD/CAD may soon re-test the 1.3290 100-d MA, but would require a more steady rebound in crude prices to keep the bearish momentum going. Francesco Pesole Read this article on THINK TagsPayrolls FX Dollar CAD Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Rates Spark: Action at Both Ends of the Curve - US 10yr Treasury Yield and European Rates

Yesterday, Hang Seng and CSI 300 went up slightly. Non-farm payrolls are published later today

ING Economics ING Economics 02.12.2022 10:13
US data provide fresh reasons for declines in bond yields, the USD...though payrolls later...caution warranted Source: shutterstock Macro outlook Global Markets: The run of data in the US supported some further declines in US Treasury yields yesterday (see next section for more). 2Y yields dropped by 8.3bp, while their 10Y counterparts fell 10.1bp to 3.505%. Bond yields haven’t been this low since mid-September. The Fed’s Williams was attempting a rear-guard action to try to reinstil a sense of hawkishness into market perceptions of the Fed, talking of still having “…a ways to go” before rates are high enough. Markets are not buying it. Equity markets looked to be running a little low on conviction yesterday. US stocks ended practically unchanged after a very flat session. In Asia, the Hang Seng index and CSI 300 both gained yesterday, but only 0.75% and 1.08% respectively, as investors perhaps take a more cautious outlook on Zero covid relaxation. Daily case numbers have been back above 4,000 (symptomatic) for the last two days. Nonetheless, this fizzling out of conviction hasn’t helped the USD, and EURUSD is now above 1.05 (1.0530 as of writing), the AUD back above 68 cents, Cable 1.2263 and the JPY 135.20. Asian FX gains yesterday were driven by the high beta KRW and THB as expected. They are now 1299.60 and 34.78 respectively. The CNY made further small gains to reach 7.0534. G-7 Macro: Plenty of data yesterday to get your teeth into, and most (though not all) of it pointed to weaker activity, and slowing inflation. The PCE deflator data for October had come in for a lot of scrutiny as people looked to poke holes in the recent declines in CPI. (for more, read this linked article from our US Economist) Yes, there are differences between these two series, but on the whole, they tend to move pretty closely together, and that is what happened in October. The headline PCE inflation rate fell from an upwardly revised 6.3% (was initially 6.2%) to 6.0%, while the core PCE rate, which a lot of people seem to think is the Fed’s preferred measure of inflation (maybe, but only when it suits them) fell from an (again) upwardly revised 5.2% to only 5.0% on a 0.2%MoM increase in the core price level. Further declines in core PCE inflation look probable purely on the basis that the MoM increases in November and December last year were quite high. So by the time December PCE is out, we may be much closer to 4.5%. Not so scary.  Admittedly, personal incomes and expenditures remained solid in October, and jobless claims looked fairly muted, So the story is not all one way. We also got the manufacturing ISM figures yesterday. Headline activity figures dropped into contraction territory, the employment index also moved into contraction and the prices paid index fell to a very weak-looking 43.0. Today is all about payrolls of course. The consensus forecast is 200,000 for the main figure, and for the unemployment rate to remain 3.7%, while average hourly earnings may drift slightly lower to 4.6%. Anything is possible though with this set of data, so surprises should be no surprise. South Korea: CPI inflation softened more than expected in November. The inflation rate for November fell to 5.0% YoY (vs 5.7% in October, 5.2% market consensus). The price index actually fell 0.1% MoM (nsa). The sharp slowdown in consumer price inflation in November was largely due to stable gasoline and fresh food prices, but also to a high base last year.  We believe that today's outcome was not enough to dispel concern from the Bank of Korea about price inflation, as core CPI remained high (4.8%YoY), and so we expect the BoK to maintain its hawkish tone until early next year.  What to look out for: US jobs report South Korea CPI inflation (2 December) Fed’s Evans speaks (2 December) US non-farm payrolls (2 December) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Commodities Feed: OPEC+ meeting ahead

Oil Bulls In Charge Before OPEC Meeting | Equities Posted Timid Gains

Swissquote Bank Swissquote Bank 02.12.2022 10:16
Sentiment was mixed at yesterday’s trading session. Equity bulls were timid, while the dollar bears were in charge of the market after the latest PCE data, which is the Fed’s favorite gauge of inflation showed that the core PCE index slowed more than expected in October. USD The softening inflation sent the US dollar index tumbling below its 200-DMA for the first time since summer 2021. The US dollar index slipped below its major 38.2% Fibonacci retracement on 2021-2022 rally, and stepped into the bearish consolidation zone. Finally! Markets Trading in equities was much less festive than the FX yesterday, as the ISM manufacturing index warned that the US manufacturing activity fell below 50, the contraction zone, for the first time since summer 2020.Today, the much-expected jobs data should determine whether the S&P500 deserves to quit the ytd negative trend, or stay in it. How strong, or soft the NFP data should be to keep the equity rally going? Watch the full episode to find out more! 0:00 Intro 0:38 US dollar tumbled on soft PCE data 3:51 But equities posted timid gains on ugly ISM figure 4:44 What NFP print could help the S&P500 extend gains? 6:31 Gold broke important technical resistances 7:11 Oil bulls in charge before OPEC meeting, Russian price cap 8:12 Bitcoin rallies past $17K 9:02 Blackstone limits withdrawals from its real estate fund. Ouch. Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #NFP #jobs #unemployment #PCE #data #Powell #speech #economic #data #EUR #GBP #JPY #XAU #crudeoil #EU #Russia #oil #cap #OPEC #Bitcoin #Blackstone #realestate #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq  Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

Canada’s Economy Showed A Massive Gain In Jobs

Kenny Fisher Kenny Fisher 02.12.2022 10:21
The Canadian dollar continues to show limited movement. In the European session, USD/CAD is almost unchanged at 1.3433. We are likely to see stronger movement in the North American session, as both the US and Canada release the November employment reports. US nonfarm payrolls expected to soften Today’s highlight is the US nonfarm employment report, with a consensus of 200,000 for November. This follows a 261,000 gain in October. The US employment market has been surprisingly resilient, considering the sharp rise in interest rates. The employment market has recently started to cool off, but unless today’s NFP release significantly underperforms, it won’t change the Fed’s view that it is still too early to tell if inflation is on its way down. Canada’s economy showed a massive gain in jobs in October, with 108,300. This was ten times the estimate of 10,000. November is expected to show a small gain of 5,000, with the employment rate projected to tick higher to 5.3%, up from 5.2%. Canada’s economy is generally performing well, and today’s employment report is the final key release prior to the Bank of Canada’s rate meeting on December 7th. The Bank of Canada has been aggressive in its tightening, in order to curb inflation which is running at a 6.9% clip. Like the Fed, the BoC is looking for signs that inflation has peaked, but until then we can expect oversize rate hikes to continue, with a 50-bp hike likely next week. Jerome Powell’s speech on Wednesday sent the US dollar sharply lower, as Powell’s comments were not as hawkish as feared. Powell said that more evidence was needed to show that inflation was falling, and reiterated that rates would likely rise higher than the Fed has projected in September. Still, investors chose to focus on Powell’s broad hint that the Fed would ease the pace of rates next week with a 50-bp move, after four straight hikes of 75 bp.   USD/CAD Technical USD/CAD has support at 1.3398 and 1.3300 There is resistance at 1.3478 and 1.3576 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The Gold Rally Is Continuing To Stall, This Could Be A Good Year For Crude Oil

Saxo Bank Podcast: Reports From Yesterday, The Crude Oil And Natural Gas Outlook And More

Saxo Bank Saxo Bank 02.12.2022 12:07
Summary:  Today we look at a slight divergence in reaction patterns across markets after a weaker than expected core PCE inflation reading and ISM Manufacturing survey in the US pushed treasury yields and the US dollar lower, but failed to support further equity market upside. Elsewhere, we round up interesting earnings reports from yesterday, discuss silver technicals and the crude oil and natural gas outlook, today's November US jobs report and more. Today's pod features Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-dec-2-2022-02122022
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

The Australian Dollar To US Dollar (AUD/USD) Pair Is Waiting For A Rebound

InstaForex Analysis InstaForex Analysis 02.12.2022 14:29
The focus of today's trading day will be on the release (at 13:30 GMT) of the US Department of Labor's November data report. And we see trader activity and market volatility gradually decreasing after the dollar set another anti-record during today's Asian trading session as the dollar index (DXY) fell to a new 22-week low at 104.33. Meanwhile, the AUD/USD pair is rising again today. As of writing, it was trading near 0.6816, testing the 0.6840 key resistance level (200 EMA on the daily chart) for the second day in a row. If further market events continue to develop negatively for USD, after the breakdown of the resistance level, AUD/USD will go to the key long-term resistance level 0.6900 (50 EMA on the weekly chart). Its breakdown will increase the probability of further growth of AUD/USD towards the key resistance levels 0.7100, 0.7170 (200 EMA on the weekly chart), which separates the long-term bearish trend of the pair from the bullish one. So far, despite the growth of the pair, which can be described as corrective, there is still a long-term bearish trend. In view of this, short positions remain preferable below the resistance levels 0.6840, 0.6900. The first signal for the resumption of short positions will be a breakdown of support levels 0.6760 (144 EMA on the daily chart), 0.6733 (200 EMA on the 1-hour chart). A breakdown of the 0.6620 support level will confirm our main forecast, which is negative for the pair, and will also mean a revival of the downward dynamics with AUD/USD returning inside the downward channel on the weekly chart. Read next: Building permits do not matter at all. As for durable goods orders, even though some significant upward or downward changes are recorded, the effect will be minimal| FXMAG.COM Alternatively, AUD/USD will break into the zone above the resistance levels 0.6840, 0.6900. But, most likely, in this zone, AUD/USD is waiting for a rebound and further movement according to our main (negative for AUD/USD) scenario. Support levels: 0.6760, 0.6733, 0.6700, 0.6620, 0.6600, 0.6500, 0.6455, 0.6390, 0.6285, 0.6200, 0.6170, 0.5975, 0.5665, 0.5510 Resistance levels: 0.6840, 0.6900 Trading Tips Sell Stop 0.6785. Stop-Loss 0.6855. Take-Profit 0.6760, 0.6733, 0.6700, 0.6620, 0.6600, 0.6500, 0.6455, 0.6390, 0.6285, 0.6200, 0.6170, 0.5975, 0.5665, 0.5510 Buy Stop 0.6855. Stop-Loss 0.6785. Take-Profit 0.6900, 0.7037, 0.7100, 0.7170 Relevance up to 12:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328833
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

The European Commission Expects The Eurozone Economy To Decline

Kenny Fisher Kenny Fisher 02.12.2022 12:16
EUR/USD is unchanged on Friday, trading at 1.0524. US nonfarm payrolls expected to drop to 200K The week wraps up with one of most important releases on the calendar, US nonfarm payrolls. The robust labour market is showing signs of cooling down, as rising interest rates have slowed economic activity. Nonfarm payrolls have been falling and the trend is expected to continue, with a consensus of 200,000 for November, down from 261,000 a month earlier. With the Fed holding its policy meeting on December 14th, the NFP report will be closely watched by policy makers, who have relied on a strong job market to press ahead with an aggressive rate cycle. The US dollar has been in retreat since Jerome Powell’s speech on Wednesday. The speech was balanced, with Powell reiterating that inflation remained too high and rates would continue to rise higher. Still, the markets focussed on the fact that Powell strongly hinted the Fed would ease rates at the December meeting with a 50-bp hike, and the optimism sent equities higher and the dollar lower. The euro has made the most of the dollar’s weakness, and EUR/USD posted its best month since 2012, with gains in November of 5.3%. Still, the euro has been on a prolonged decline and started 2022 close to 1.14. The outlook for the euro is weak, as the European Commission expects the eurozone economy to decline in Q4 2022 and Q1 2023. The driver of the expected decline is the huge jump in energy prices caused by the war in Ukraine. The eurozone has been hit hard by double-digit inflation, and the ECB will have to continue raising rates, despite weak economic conditions, until it is convinced that inflation has peaked. Read next: If ECB policymakers should make a decision between fighting inflation and avoiding recession, they will likely choose fighting inflation says Ipek Ozkardeskaya| FXMAG.COM EUR/USD Technical EUR/USD faces resistance at 1.0583, followed by a monthly line at 1.0683 There is support at 1.0490 and 1.03537 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The Reserve Bank Of Australia Would Bring The Cash Rate To 3.10%

Kenny Fisher Kenny Fisher 02.12.2022 12:12
The Australian dollar’s has posted small gains today and is trading at 0.6816. After starting the week with sharp losses, AUD/USD has rebounded and hit a 13-week high on Thursday, at 0.6845. All eyes on US nonfarm payrolls Today’s highlight is the US nonfarm employment report, with a consensus of 200,000 for November. This follows a 261,000 gain in October. The US employment market has been surprisingly resilient, considering the sharp rise in interest rates. The employment market has recently started to cool off, but unless today’s NFP release significantly underperforms, it won’t change the Fed’s view that it is still too early to tell if inflation is on its way down. Jerome Powell’s speech on Wednesday sent the US dollar sharply lower, as Powell’s comments were not as hawkish as feared. Powell said that more evidence was needed to show that inflation was falling, and reiterated that rates would likely rise higher than the Fed has projected in September. Still, investors chose to focus on Powell’s broad hint that the Fed would ease the pace of rates next week with a 50-bp move, after four straight hikes of 75 bp. Reserve Bank of Australia Governor Lowe issued a shocking apology about rate policy earlier in the week. Lowe said that it was regrettable that people listened to the RBA saying it wouldn’t raise rates before 2024. but then delivered seven oversized rate hikes in 2022. Many Australians took out mortgages based on the RBA assurance but are now getting squeezed by huge mortgage payments. The RBA meets next Tuesday and is widely expected to raise rates by 25-bp, which would bring the cash rate to 3.10%. Read next: If ECB policymakers should make a decision between fighting inflation and avoiding recession, they will likely choose fighting inflation says Ipek Ozkardeskaya| FXMAG.COM AUD/USD Technical AUD/USD testing resistance at 0.6829 earlier today. Above, there is resistance at 0.6903 There is support at 0.6707 and 0.6633 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

The EUR/USD Currency Pair Has Been Trading Higher

InstaForex Analysis InstaForex Analysis 04.12.2022 10:21
Long-term perspective. The EUR/USD currency pair has been trading higher again this week, adding approximately 150 points. Given that we have been waiting for the end of the two-year global downward trend for a long time, it does not appear to be too much. But first, let's address all of this week's paradoxes. Almost every day during this time, we discussed how the growth of the European currency was completely illogical and unreasonable. Generally, the pair increased only on Wednesday, Thursday, and Friday. What's all the fuss about these days? On Wednesday evening, Jerome Powell delivered a speech. Powell's speech is not a Nonfarm or a Central Bank meeting, to which the market always reacts. The Fed's chairman speaks frequently, and other members of the monetary committee speak as well, making it difficult to surprise the market with regular monetary policy statements. And, on Wednesday, the Fed's chairman said nothing new to traders that they didn't already know. Nonetheless, the US currency began to fall again, as if Powell had stated that the Fed rate would not be raised further. On Thursday, when the only important report of the day was the US ISM index for the manufacturing sector, the dollar fell steadily throughout the day. However, the index was released late in the afternoon. What happened on Friday, however, best illustrates our statements about groundlessness. Despite the failure of ADP earlier in the week, the most important nonfarm payrolls report came in much stronger than expected, at 263 thousand in November. The US dollar immediately began to rise, but after a few hours, it began to fall, and by the end of the day, it had returned to where it had begun to rise. As a result, the market should have considered it necessary to work out logically, even the Nonfarm report, which was unequivocally in favor of the dollar. As a result, there is only one conclusion to be drawn: we are now witnessing an illogical growth of the pair, and the same illogical fall could occur at any time. There is no relationship between the fundamental (or macroeconomic) background and the pair's movements. COT evaluation. The COT reports on the euro currency in 2022 are contradictory. During the first half of the year, professional players were openly "bullish," but the European currency steadily fell. Then, for several months, they were "bearish," and the euro currency steadily fell. The net position of non-commercial traders is now bullish and strengthening, and the euro is rising. Still, the relatively high value of the "net position" allows for the completion of the upward movement to occur soon. The number of buy contracts from the "non-commercial" group increased by 4.7 thousand during the reporting week, while the number of shorts increased by 4.6 thousand. As a result, the net position increased by approximately 0.1 thousand contracts. The European currency has continued to rise in recent weeks, coinciding with the COT report readings. At the same time, the US currency's growth may resume due to the same geopolitics or the complete absence of factors for further euro currency growth. The first indicator's green and red lines are very far apart, which may indicate the end of the ascending trend (which was not). The number of buy contracts for non-commercial traders is 133 thousand more than the number of sell contracts. As a result, while the net position of the "non-commercial" group may continue to improve, the euro may not follow suit. If you look at the overall indicators of open longs and shorts for all traders, sales are 33 thousand higher (755k vs. 723k). Fundamental event analysis This week in the European Union, there were almost no noteworthy events. And even if there were, they would be difficult to spot on the charts because the market spent most of the week simply selling the dollar, paying no attention to events or publications. Christine Lagarde spoke twice but didn't say anything new to the market, so there was no reaction. The EU published an inflation report for November, which showed a 0.6% decrease in the indicator, and the market did not react in any way. It is impossible to say what the market reacted to and why it did so. The point is that there was news that should have caused the dollar to rise and news that should have caused the euro to fall, but for some reason, we only saw the euro rise, although a technical downward correction has been brewing for more than two weeks. Trading strategy for the week of December 5-9: 1) On the 24-hour timeframe, the pair has broken through all of the Ichimoku lines, indicating that it has a good chance of continuing to rise. Of course, if geopolitics deteriorates again, these opportunities will vanish quickly. Still, for the time being, we can expect an upward movement with a target of 1.0636 (100.0% Fibonacci) and higher and buy (cautiously) the pair. The most important thing is to ignore the fundamental background! 2) The euro/dollar pair sales are no longer relevant. To consider short positions, you must first wait for the price to fall below the key lines of the Ichimoku indicator. So far, no factors indicate the US dollar will resume its global trend. However, in today's world, everything can change in an instant. Explanations of the illustrations: Price levels of support and resistance (resistance and support), Fibonacci levels – targets when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger bands (standard settings), MACD (5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "non-commercial" group.     Relevance up to 07:00 2022-12-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328878
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Pound (GBP) May Be Forming A New Upward Trend

InstaForex Analysis InstaForex Analysis 04.12.2022 10:25
Long-term forecast. The GBP/USD currency pair has gained another 220 points during the current week. Powell's words could be interpreted in any way, and traders concluded that they were again not in favor of the dollar, although Powell mentioned a longer rate hike and a longer period of high rates. But why did traders wait for the Fed chairman's speech if they could keep selling US dollars? This week's movements of the pair were devoid of logic. Friday's nonfarm payrolls came in above expectations, last month's value was revised upward, and the dollar continued to fall in price at the end of the day. As a result, it makes no sense to analyze any Nonfarms or Powell speeches at this time. What difference does it make what the monetary committee members say just two weeks before the last meeting or what reports are released if the market is still selling the dollar? This week, nothing was interesting in the UK because it is difficult to consider the index of manufacturing business activity, which was below the "waterline" and remained below it, as an important event. It is only necessary to examine the technique. Nothing has changed in the past week because the pair has only moved in one direction. Essentially, we have been waiting a long time for the global downward trend to end, and we are now waiting for the downward correction to begin. And it could happen at any time because the market is unresponsive to events that should support the dollar. So, once it has had enough of the pair's purchases, it will start selling them, which will also be illogical. COT evaluation. For the second week in a row, the latest COT report on the British pound showed an increase in "bearish" sentiment. The non-commercial group closed 5,000 buy contracts and 4,000 sell contracts last week. As a result, the net position of non-commercial traders fell by 1,000. The net position indicator has gradually increased in recent months. Still, the mood of major players remains "bearish," and while the pound sterling is rising against the dollar, it is difficult to explain why. We do not rule out the possibility of a sharp decline in the pound in the near future. Also, both major pairs are moving almost identically right now. Still, the net position for the euro is positive and even suggests that the upward momentum is about to be completed, whereas the net position for the pound is negative. The "non-commercial" group now has 62 thousand contracts for sale and 28.5 thousand for purchase. As we can see, the difference is significant. The bulls have a 13 thousand advantage in open buy and sell positions. Although there are technical reasons to be skeptical about the long-term growth of the British currency, the foundation or geopolitics do not imply such a strong strengthening of the pound sterling. Fundamental event analysis Because nothing was interesting in the UK this week, we can only consider American news and events, as we did in the first part of the article. Even so, they could not be considered because the market reacted to them as it saw fit. As a result, there was a reaction, but it provided no benefit. Aside from trading actively and volatilely this week, both pairs showed good intraday trends. As a result of our recommendations, it was possible to make good money on shorter timeframes. Nothing interesting is happening in Britain right now, either globally or locally. We previously stated that the Supreme Court's decision on the inadmissibility of Scotland to hold an independence referendum could support the pound. However, this occurred more than a week ago and has nothing to do with the euro or the European Union. Jeremy Hunt's financial plan has also been available for some time, so he is unlikely to support the British pound. Trading strategy for the week of December 5-9: 1) Because the pound/dollar pair is above all of the Ichimoku indicator's key lines, it has the technical grounds to form a new long-term upward trend. The nearest targets are 1.2307 and 1.2759, with the first already calculated. A downward correction is required, as indicated by the 4-hour TF. However, the pair must fall below the 4-hour moving average for this to happen. 2) The pound sterling appears to be forming a new upward trend. It now has legitimate reasons to grow, but it has gained nearly 2,000 points in two months. How much longer will traders be willing to keep buying? Sales are no longer relevant, but we are still looking for a significant correction in the vicinity of the Senkou Span B line. Explanations of the illustrations: Price levels of support and resistance (resistance and support), Fibonacci levels – targets when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger bands (standard settings), MACD (5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "Non-commercial" group.     Relevance up to 07:00 2022-12-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328880
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The NonFarm Payrolls Report Had Negative Impact On The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 04.12.2022 10:30
EURUSD hourly chart. The euro and the US market were falling after the release of the NonFarm Payrolls report. The results were higher than forecast, +264,000. The unemployment rate dropped from 3.8% to 3.7%. The report gives the Federal Reserve room for both a 0.5% and 0.75% rate hike in December. Fed on Dec. 14.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328862
EUR: German IFO Data and Central Bank Hawkishness Impact Euro/USD Range Trade

The Market Has Recently Decreased Demand For US Dollar (USD)

InstaForex Analysis InstaForex Analysis 04.12.2022 10:33
The wave marking on the euro/dollar instrument's 4-hour chart still appears quite accurate. However, the entire upward portion of the trend is starting to get more complicated. It has already assumed a clear corrective and somewhat prolonged form. A-b-c-d-e waves have a complex correction structure that we have discovered. Since wave e is much higher than the peak of wave C, if the wave markings are accurate, construction on this structure may be nearly finished. In this instance, it is anticipated that we will construct at least three waves downward, but if the most recent phase of the trend is corrective, the subsequent phase will probably be impulsive. Therefore, I am preparing for a new, significant decline in the instrument. The market will be ready to sell when a new attempt to breach the 1.0359 level, which corresponds to 261.8% Fibonacci, is successful. On the other hand, the retraction of quotes from reaching lows this week suggests that the entire wave may end up longer and that the instrument's most recent decline is not the first wave of a new descending section. Consequently, the scenario involving the first two waves of a new downward trend segment is rejected. Because there isn't an increase in demand for US currency, the wave pattern is generally starting to become muddled. The demand for the dollar has risen, but only momentarily. On Friday, the euro/dollar instrument increased by ten basis points. This number in no way represents the state of the market on Friday. During the day, the instrument fell by 100 basis points before rising by the same amount. Naturally, the decline was brought on by American statistics. The total number of nonfarm payrolls came in at 263,000, exceeding market expectations by 60,000. Remember that the ADP report, released earlier this week, indicated that only 129 000 jobs would be created outside the agricultural sector. The market has recently decreased demand for US dollars because it anticipated that the Payrolls report would also be weak. But as it turned out on Friday, the release of the Payrolls report didn't affect anything. Its value turned out to be higher than anticipated. Still, the demand for the dollar only rose for a short time (about an hour) before the market started to reduce it again, which caused the instrument's overall value to increase. What is happening with the US currency now cannot be expressed in words. It would be possible to comprehend why the dollar declined on Friday if additional US reports proved weak. Although the unemployment rate remained unchanged in November at 3.7%, average wages increased more than the market anticipated. Therefore, all three American reports exceeded expectations, so a few hours after their release, demand for US currency started to decline. This inquiry is especially pertinent if we remember that the wave markings advocated constructing at least one more downward wave. In other words, almost all of Friday's arguments favored lowering the instrument, but the day ended with a raise, further complicating the overall wave picture. We could now face endless complications from the trend segment already ascending. Conclusions in general I conclude that the upward trend section's construction is complete and has increased complexity to five waves. As a result, given that the MACD is signaling "down," I advise selling with targets close to the estimated 0.9994 level, which corresponds to a 323.6% Fibonacci ratio. The trend's upward portion could become more complicated and take on a longer form, and the likelihood of this happening is increasing daily. The wave marking of the descending trend segment becomes more intricate and lengthens at the higher wave scale. The a-b-c-d-e structure is most likely represented by the five upward waves we observed. After the construction of this section is finished, work on a downward trend section may resume. Relevance up to 12:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328882
Bank of England survey highlights easing price pressures

The ECB And The Bank Of England Still Have A 75% Chance Of Tightening Monetary Policy

InstaForex Analysis InstaForex Analysis 04.12.2022 10:38
The wave marking for the pound/dollar instrument currently appears quite confusing, but it still needs to be clarified. We have a five-wave upward trend section, which has taken the form a-b-c-d-e and may already be complete. As a result, the instrument's price increase may last a while. Therefore, both instruments are still in the process of developing an upward trend segment, which will be followed by the start of a mutual decline. Recently, the British pound's news background has been so varied that it is challenging to sum it up in one word. The British pound had more than enough reasons to rise and fall. As you can see, it primarily went with the first option. The internal wave structure of wave e has become more complicated this week due to the rise in quotes over the previous week. I am currently waiting for the decline of both instruments. Still, these trend sections may take an even longer form because the wave marking on both instruments allows the ascending section to be built up to completion at any time. The Fed is indicating that monetary policy will be tightened. The pound/dollar exchange rate on Friday increased by 45 basis points. The dollar displayed positive dynamics for a brief period, and all three US reports were positive, but it wasn't enough to support further gains. The market did not react as it should have on Friday. Given that the number of payrolls turned out to be high, unemployment did not rise, and wages increased more than anticipated, it was anticipated that demand for US currency would increase significantly. However, as I previously stated, the US dollar could not take hold of the hard-won positions. Thus, yet another excellent opportunity to finish building the suggested wave e, and the upward portion of the trend has yet to be recovered. Even though the news context is not calling for sales for the first time, we are once more observing an increase in the instrument. The ECB, Fed, and Bank of England meetings will occur in December. In anticipation of these meetings, the market is already moving its instruments. Recall that the Fed will raise interest rates by only 50 basis points, or almost 100%, while the ECB and the Bank of England still have a 75% chance of tightening monetary policy. As a result, the market favors the euro and the pound more. However, the ECB and the Bank of England will raise their interest rates by 50 basis points and abandon their aggressive stance. In this instance, the recent spike in instrument sales was unfounded. Even though the news background does not support it, I anticipate the development of a new downward trend segment. The market's reluctance to raise demand for the dollar contradicts this. As a result, the current wave markup fails, and sometimes it is difficult to explain why the US dollar is falling. Conclusions in general The construction of a new downward trend segment is predicated on the wave pattern of the pound/dollar instrument. Since the wave marking permits the construction of a downward trend section, I cannot advise purchasing the instrument. With targets around the 1.1707 mark, or 161.8% Fibonacci, sales are now more accurate. The wave e, however, can evolve into an even longer form. The euro/dollar instrument and the picture look very similar at the larger wave scale, which is good because both instruments should move similarly. The upward correction portion of the trend is currently almost finished. If this is the case, a new downward trend will soon develop.   Relevance up to 13:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328884
The Data May Keep The British Pound (GBP) From Rising

The UK's New Week Will Start With The Business Activity Index

InstaForex Analysis InstaForex Analysis 05.12.2022 08:00
The GBP/USD currency pair also made a sluggish attempt to begin a downward correction on Friday. Still, despite having every opportunity to do so, it could not establish a foothold, even below the moving average. Remember how the market on Friday centered on international macroeconomic data on the labor market, unemployment, and wages? This statistic is crucial, particularly on the eve of the Fed meeting, which will take place in a few weeks. Recall that the state of the labor market and unemployment will play a major role in the aggressiveness of Jerome Powell's tone and any decisions that may be made at the upcoming meetings. The Fed can afford to raise the rate if the labor market is healthy (and Friday's nonfarm data once again demonstrated that the condition is excellent). This is no longer necessary since inflation has been falling for four consecutive months, and the key rate has already risen to 4%. As a result, instead of growing by 0.75% in December, as most experts predict, it will increase by 0.5%. However, the labor market is important. And if it is robust, the value of the US dollar should rise. It had to expand. If only the market had considered all the recent developments that favor the dollar. Remember, there are very specific reasons why we have been waiting for a strong downward correction for the past two weeks. There is no justification for the pound to increase. It has increased by 2,000 points in just a few months, but the UK has yet to give any incredibly upbeat news. Yes, we do remember that Liz Truss resigned along with her reforms, and there will not be any tax cuts. Additionally, keep in mind that Scotland won't be holding an independence referendum anytime soon, which is excellent news for the pound. The growth in recent months is still unjustified, though. Practically no significant news will be released; how will the pound perform? The UK's new week will start with the business activity index (services sector) release. Forecasts indicate that this index will continue to be below 50.0, so traders won't have anything to react to. The construction industry's business activity index was released on Tuesday. Not the most important report, either. Nothing in Britain will be more intriguing. Events in the United States will be a little bit more interesting. Applications for unemployment benefits are due on Thursday, the Michigan consumer confidence index is due on Friday, and a fairly significant index of business activity in the ISM services sector will be released on Monday. The ISM index will undoubtedly garner the most attention, and the macroeconomic backdrop will be quite weak, but this is all that is currently on the calendar. A meeting of the monetary committee will take place soon, and its members are not permitted to give interviews or speeches. As a result, Fed representatives won't give any speeches this week. As a result, there won't be many significant news stories or events this week. Will the market continue to trade irrationally and purchase the British pound? Which is the question we must ask once more? We might learn the answer to this query this week. If the British pound manages to rise this week, all doubts will be finally answered because there will be little news. Still, we'll wait for a downward correction, which we'll have to spot by breaking through the moving average line. Opening short positions is not advised in the absence of this overcoming. GBP/USD Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 163 points. This value for the dollar/pound exchange rate is "very high." Thus, on Monday, December 5, we anticipate movement within the channel and are constrained by the levels of 1.2108 and 1.2472. The Heiken Ashi indicator's turning downward indicates a new phase of the corrective movement. Nearest levels of support S1 – 1.2268 S2 – 1.2207 S3 – 1.2146 Nearest levels of resistance R1 – 1.2329 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair resumed its upward trend. Therefore, until the Heiken Ashi indicator turns down, you should maintain buy orders with targets of 1.2329 and 1.2472. With targets of 1.1963 and 1.1902, open sell orders should be fixed below the moving average. Explanations of the illustrations: Linear regression channels help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.       Relevance up to 01:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328908
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The Euro To US Dollar (EUR/USD) Pair Is Still In An Upward Trend

InstaForex Analysis InstaForex Analysis 05.12.2022 08:01
On Friday, the EUR/USD currency pair was trading higher once more, but this is hardly shocking given that the euro has been increasing almost daily in recent weeks, almost without any real support. The fundamental background occasionally lends support to the euro but does so infrequently while the pair continues to increase. On Friday afternoon, we issued a warning, stating that even if the non-farm payrolls come in strong, we shouldn't prematurely declare the euro's demise because we might experience the opposite trend by day's end. We didn't think it was possible, but that's how it turned out. However, the market only worked out strong non-farms, good unemployment, and well-grown wages for a half hour or an hour before forgetting about them and returning to its recent favorite activity. As a result, we are still attempting to relate the foundation to macroeconomics and market behavior. They are utterly at odds with one another, and the pair is currently moving upward, although this is illogical. Tomorrow, it may also move downward illogically. This is the threat posed by the current circumstance. Technically speaking, the upward trend continues and doesn't raise any concerns or doubts. There is no longer any indication of a correction based on the 4-hour and 24-hour TF indicators, which all point upward. Corrections occur occasionally, but this is a relatively uncommon occurrence, and they are quite weak. Accordingly, the pair may continue moving north this week based on the "technique," even though there will be a few reasons for this, as we will see below. GDP and Christine Lagarde's speeches There would be few macroeconomic statistics this week if there were significant events and reports last week that the market either ignored or misinterpreted. It should be noted that traders acted as if the most recent EU inflation report did not exist by not paying any attention to it. Most likely, this week will bring similar events. But everything is generally in order. The next speech by Christine Lagarde, the head of the ECB, will take place on Monday. Although we don't anticipate her to say anything fundamentally novel on the eve of the regulator's meeting, we still need to be on the lookout for any surprises. The index of service sector business activity and retail sales will also be released on this day. Though not the most crucial indicator, business activity will likely continue to be below the "waterline" of 50.0. The third estimate of the GDP for the third quarter will be released on Wednesday, and, likely, it will be similar to the second estimate. Again, since traders are already very familiar with the value of GDP, they will have little to react to. On Thursday, Christine Lagarde will give two more speeches, and other ECB officials will also speak during the week. Therefore, it is generally possible to receive interesting information, but only in the event of something "loud" will it be possible to wait for the market's response. However, does the market currently require "loud" information? The pair's movement is still extremely volatile and trending. Whether macroeconomics or the foundation are involved, the euro is strengthening. As a result, traders won't even need news and reports to make trading decisions. The market can start selling the euro just as it is currently buying it irrationally. The current situation is like a "trap" designed to raise the pair's rate as high as possible before actively selling. However, since this is only an assumption, it is impossible to know. In any case, the start of a potential downward movement can be identified by fixing the price below the moving average line. Selling the pair is advised at that time. As of December 5, the euro/dollar currency pair's average volatility over the previous five trading days was 127 points, considered "high." So, on Monday, we anticipate the pair to fluctuate between 1.0405 and 1.0661. The Heiken Ashi indicator's turning downward indicates a new phase of the corrective movement. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: The EUR/USD pair is still in an upward trend. As a result, you should continue holding long positions until the Heiken Ashi indicator turns down, with targets of 1.0621 and 1.0620. Sales will become significant only when the price is fixed below the moving average line with a target of 1.0254. Explanations of the illustrations: Linear regression channels help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328906
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange Gained More Securities Than Lost

InstaForex Analysis InstaForex Analysis 05.12.2022 08:07
At the time of closing on the New York Stock Exchange, Dow Jones rose 0.10%, the S&P 500 index fell by 0.12%, the NASDAQ Composite index fell by 0.18%. Dow Jones The growth leaders among the components of the Dow Jones index were Boeing Co shares, which went up by 7.09 p. (4.03%), closing at the mark of 182.87. Nike Inc quotes increased by 1.43 p. (1.29%), completing tenders at 112.20. Dow Inc papers increased in price by 0.48 p. (0.94%), closing at 51.55. Salesforce Inc shares were the leaders of the fall, the price of which fell by 2.44 p. (1.66%), completing the session at the mark of 144.56. Intel Corporation shares rose 0.42 p. (1.41%), closing at 29.41, and Goldman Sachs Group Inc decreased in price by 3.23 p. (0.84%) and completed bidding at 380 , 58.  S&P 500  The leaders among the S&P 500 index components in today's trading were shares of Enphase Energy Inc, which gained 7.01% to 336.00, SolarEdge Technologies Inc, which gained 4.40% to close at 308.77, and shares of Huntington Ingalls Industries Inc, which gained 4.24% to close the session at 240.68. The least gainers were the PayPal Holdings Inc shares, which decreased in price by 4.93%, closing at 74.66. Valero Energy Corporation shares lost 3.76% and completed the session at 127.07. Arista Networks quotes decreased by 3.39% to 135.04. Nasdaq  Growth leaders among the components of the Nasdaq Composite index were Shuttle Pharmaceuticals Inc, which went up by 65.07% to 2.41, Yunhong CTI LTD, which gained 46.69%, closed at 0.56, as well as Anavex Life Sciences shares Corp, which increased by 35.85%, completing the session at a mark of 12.05. The leaders of the fall were shares of Theratechnologies Inc, which declined 36.02% to close at 1.35. Shares of Biovie Inc lost 31.80% and ended the session at 5.49. Redhill Biopharma Ltd. fell 27.21% to 0.27. Numbers On the NYSE, 1,672 gained more securities (1,409) than lost (1,409), while 119 stocks were essentially flat. On NASDAQ, 2,141 stocks gained, 1,547 declined, and 268 remained flat. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 3.93% on June 19, hitting a new 6-month low. Gold Futures for gold futures with delivery in February lost 0.19%, or 3.45, reaching $ 1.00 per troy ounce. As for other goods, the prices for WTI oil with supply in January decreased by 1.31%, or 1.06, to $ 80.16 per barrel. Futures for Brent oil futures with delivery in February fell 1.23%, or 1.07, to $ 85.81 per barrel. Forex Meanwhile, on the Forex market EUR/USD did not change significantly 0.17% to 1.05, while USD/JPY fell 0.74% to 134.27. The USD index futures were down 0.22% to 104.46 Relevance up to 03:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/303619
The Price Of USD/JPY Pair Has To Fight With The Resistance Level

Now The Price Of The US Dollar To Japanese Yen Has Two Options

InstaForex Analysis InstaForex Analysis 05.12.2022 08:08
Last Friday, the USD/JPY pair fell by 104 points, and so the pair did not reach the target level of 133.10 that was set by the embedded line of the price channel. Now the price has two options: to continue working on the support or to move up from the current levels in a correction in order to reach the target resistance level of 135.2, or to 137.00, and turn around to 133.10, but with an attempt to cross it and fall to 130.41. This level coincides with the August 2 low. A price convergence with the Marlin oscillator in this form, unfortunately, does not provide any advantage to any of the scenarios so it can remain at 133.10 from the current levels. On the four-hour chart, the price settles under the level of 135.25. The Marlin oscillator is rising, but it is still in the negative territory. In order for the price to continue rising, it needs to settle above 135.25. By that time Marlin will be in the positive territory. Resistance at 137.00 is reinforced by the MACD indicator line, so the fate of the decline from October 21 may be decided here Relevance up to 03:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328910
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The Price Of Cable Market (GBP/USD) Is Able To Reach The First Target Level

InstaForex Analysis InstaForex Analysis 05.12.2022 08:10
The British pound took advantage of the dollar's weakness on Friday, closing the day up by 42 points. The Marlin oscillator is moving sideways in a range. GBP may leave this range and can go either up or down, but for now, the price, according to the oscillator, is able to reach the first target level at 1.2410. Settling above the level opens the next target at 1.2598-1.2666 (high of May 2022). On the four-hour chart, the price is rising vigorously. The Marlin oscillator is slowly rising than it has so far held a divergence. But the divergence is weak and once the signal line crosses the line it is forming, the divergence will lose its trace and the Marlin will enter the overbought zone Relevance up to 03:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328912
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

EUR/USD Pair: The Main Scenario Is The Price Reaching Target Range

InstaForex Analysis InstaForex Analysis 05.12.2022 08:13
The EUR/USD still managed to end Friday with a positive even though there was good data on the US labor market, which judging by the market's reaction after its release had initially pulled down the euro by more than 100 pips. In today's Asian session this local uptrend continues. The price still aims to reach the target range at 1.0615/42. The main scenario is the price reaching this range and a divergence following it. In case the price settles above 1.0615/42, the next target range of 1.0758/87 will become available. However, we should be more careful about this target, because the Federal Reserve meeting on the 14th is becoming more and more uncertain. To be exact, there have been more hawkish features lately. On the four-hour chart, Friday's decline was stopped by the balance and MACD indicator lines. Having received support from them, the price reversed to growth. Divergence on this chart is still there, but it is weak and does not prevent the price from reaching the first target range of 1.0615/42 Relevance up to 03:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328914
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The Market Has Never Seized Chance To Halt The Rise In Demand For The Euro (EUR) And The Pound (GBP)

InstaForex Analysis InstaForex Analysis 05.12.2022 08:31
It makes perfect sense to include Friday in trading textbooks. To understand how and when the market might change its direction of movement or when the movement might intensify, all traders carefully study the calendar of economic events. The core of the fundamental analysis is this. But occasionally, as they say, there are exceptions. Additionally, they took too much time this time. Remember that I have frequently questioned whether raising the euro and pound's exchange rates is necessary? The fifth e waves for both trading instruments took on an extended form and were supposed to be finished a long time ago. I have written and am currently writing about this exact subject. Over the last two weeks, the market has had many opportunities to halt the rise in demand for the euro and the pound and create at least a corrective downward set of waves. However, the market has never seized this chance. Or decided not to. The fundamental analysis loses its meaning when the market chooses not to consider the news and trades in a single direction. Furthermore, because the market always trades in one direction, wave analysis is pointless because you can wait for specific waves to form but they never do. The drawback of waves is that they can take on almost any length. Even the current waves e have room to grow. As a result, I've been watching for a decline for the past two weeks, and during that time, the instruments have been rising. The market had anticipated a reading of around 200 thousand for the nonfarm payrolls report on Friday, but it came in at 263,000. The unemployment rate is 3.7% as of today. In November, wages increased by 0.6%, despite the market expecting a rise of just 0.3%. At the same time, the US dollar only briefly appreciated before falling back down. It is impossible to explain why both instruments increased on Friday night, given that the week ended at peak levels. Let me remind you once more that fundamental analysis (at least on Friday) should have led to a decline in both instruments, and wave analysis predicts the formation of a descending set of waves. But once more, neither waves nor fundamental analysis could predict the movement we saw. And all you can do is tolerate it. Now that the trend can become more complex on both ends, the waves e can as well, which will necessitate adjusting the wave markup. It's also unsettling to think about what will occur in December when all three central banks meet for the final time this year. The market's response should vary depending on the meetings attended, the decisions made, and the rhetoric used. But if you can only go in one direction, will the market still want to be so diverse? We'll likely experience several surprises in December. I conclude that the upward trend section's construction is complete and has increased complexity to five waves. As a result, I suggest making sales with targets close to the estimated 0.9994 level, or 323.6% Fibonacci. The trend's upward portion could become more complicated and take on a longer form, and the likelihood of this happening is increasing daily. The construction of a new downward trend segment is predicated on the wave pattern of the pound/dollar instrument. Since the wave marking permits the current construction of a downward trend section, I cannot advise purchasing the instrument. With targets around the 1,1707 mark, or 161.8% Fibonacci, sales are now more accurate. The wave e, however, can evolve into an even longer form Relevance up to 05:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328918
The Euro To US Dollar Instrument Did Not Change In Value

The Downward Movement Of The EUR/USD Pair Did Not Start

InstaForex Analysis InstaForex Analysis 05.12.2022 08:33
M5 chart of EUR/USD On Friday, EUR/USD went upwards again by the end of the day. This time the overall growth was not so strong since important reports were published in America, which were definitely in favor of the US dollar. The greenback grew for a while after the reports, but in the evening the euro started rising again and offset all the losses after the US data. If the dollar grew quite naturally after the Non-farms and the unemployment, then the euro's subsequent growth raised some questions. However, we could get used to this situation. The euro has been growing for quite a long time without any particular reason, so we have only to work out these trends and quite volatile movements. Separately, the macroeconomic statistics from across the ocean was quite strong, so the market should have been selling the pair, not buying it. The pair generated unfortunate signals on Friday. Before the US reports were released the pair was in a flat, and after it EUR/USD plunged so fast that there was no chance to work out this movement. That is why the first signal appeared in the middle of the US trading session, when the price rebounded from 1.0485. After that the pair went down about 35 pips, so traders could place the Stop Loss to Breakeven. The next buy signal was near the same level of 1.0485, but it appeared too late, so traders could not use it. But if some traders opened a long position, they definitely made a profit. COT report COT reports on EUR/USD have puzzled traders through most of 2022. Half of the year, COT reports indicated clear-cut bullish sentiment among large market makers while the single European currency was extending its weakness. For a few months, the reports showed a bearish sentiment and the euro was also trading lower. Now sentiment of non-commercial traders is turning bullish again, and the euro is rising, but it is a rather high net position that allows us to assume that the upward movement will end soon. During the reporting week, the number of Buy contracts for the Non-commercial group increased by 4,700, and the number of short contracts rose by 4,600. Accordingly, the net position grew by about 100 contracts. The European currency has been rising in recent weeks, which is already in line with the readings of the COT reports. At the same time, we believe that the US currency may still regain its footing amid the same geopolitics or due to the lack of fundamentals for further growth of the euro. The green and red lines of the first indicator moved far away from each other, which could mean the end of the uptrend (!!!) (which, in fact, never happened). The number of BUY contracts is higher than the number of SELL contracts for non-commercial traders by 133,000. Thus, the net position of the "non-commercial" group may continue to rise further, but this may not trigger a similar rise in the euro. If we look at the overall numbers of open long and short contracts for all categories of traders, there are 33,000 more sell contracts (755,000 vs. 723,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD continues to show absolutely erratic movements and Friday was just another proof of this. After the ascending trend line was broken, the downward movement did not start. After Federal Reserve Chairman Jerome Powell's speech, the pair returned to its local peaks for absolutely no reason and then it did not even fall after the strong US data. Therefore, movements can only be analyzed using technique. On Monday, the pair may trade at the following levels: 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, and also Senkou Span B (1.0359) and Kijun Sen (1.0414). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 1, the EU will publish retail sales and business activity reports in the service sector. In America, the ISM Services Business Activity Index will be released, which is the most important report of the day. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group Relevance up to 01:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328902
The Euro Will Probably Continue Its Upward Movement In The Near Future

EUR/USD Pair Is Followed The Expected Path Higher

InstaForex Analysis InstaForex Analysis 05.12.2022 08:36
EUR/USD continue to follow the expected path higher. After a break above minor resistance at 1.0481, the upside has been cleared for a rally towards 1.0785 and 1.0926 as the next upside targets. Longer term, we are looking for much higher levels as we regard the entire corrective decline from 1.6038 as complete and the ongoing impulsive rally should ultimately break above the 2011 peak at 1.6038. That said we should as always take the rally higher in baby steps as it of course will not be in a straight line, but the rally will take years to unfold. Relevance up to 06:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/303637
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

The GBP/USD Pair Failed To Start A Downward Correction

InstaForex Analysis InstaForex Analysis 05.12.2022 08:40
M5 chart of GBP/USD GBP/USD also plummeted on Friday after the U.S. data and then sharply rose for no reason. Therefore, the pound showed almost identical movements to the euro. Everything we have mentioned in the article on the euro, is also true for the pound. It is also worth noting that the sterling is also not standing still, and is actively rising. The market continues to reduce positions on the dollar, which leads to the growth practically on a straight line, regardless of the macroeconomic statistics and fundamental background. Reminder: even the speech of Federal Reserve Chairman Jerome Powell last week was not dovish, so the pair should not rise at all. However, at the moment it can continue doing so for a long time. Fundamentals and macroeconomics are almost irrelevant now. As for trading signals, the pound's situation was more interesting. Two buy signals near the level of 1.2259, both were false. In both cases the price went up 20 points, so Stop Loss orders should have been placed and there should be no loss. After that there was a buy signal near the level of 1.2185, which was quite dangerous to use, because strong US data had been released about half an hour before and it was more reasonable to expect the pair's decline, but not the rise. Nevertheless, those who opened a long position made a profit, as the quotes rose to 1.2259 and overcame that level. As a result, the day could even turn out to be profitable, in spite of the illogical movements. COT report The latest COT report on the British pound indicated increasing bearish sentiment for the second consecutive week. In the given period, the non-commercial group closed 5,000 BUY contracts and 4,000 SELL contracts. Thus, the net position of non-commercial traders decreased by 1,000. The net position is growing during the last months, but the sentiment of the big players is still bearish, and the GBP is rising against the USD, but it is very difficult to answer the question why it does so. We don't exclude the option in which the pound could sharply fall in the near future. Take note that both major pairs are moving almost equally now, but the euro's net position is positive and even implies that the upward momentum will end soon, while it is negative for the pound... The non-commercial group now has a total of 62,000 short positions and 28,500 long positions. The difference, as you can see, is very large. As for the total number of open Buy and Sell, the bulls have the advantage by 13,000. We are still skeptical about the British currency's growth in the long term, although there are technical reasons for it, but the foundation or geopolitics obviously do not imply such a solid strengthening of the pound. H1 chart of GBP/USD The pair continues to trade very high and failed to start a downward correction on the one-hour chart. The most interesting thing is that the uptrend has resurfaced, but the trend line is no longer relevant, and there is no new trend line. Therefore, at this time, the pound can move in either direction with equal probability. On Monday, the pair may trade at the following levels: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259, 1.2342, 1.2429-1.2458. The Senkou Span B (1.1959) and Kijun Sen (1.2104) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Monday, the UK is set to publish the index of business activity in the service sector, and traders will unlikely be surprised by its results. In America, the ISM Services Business Activity Index will be released, which has greater importance and weight in the eyes of traders. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group Relevance up to 01:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328904
The Data May Keep The British Pound (GBP) From Rising

There are some factors which can help greenback in the remainder of the year. Next week BoE, Fed and ECB decide

ING Economics ING Economics 05.12.2022 09:18
This week will prepare markets for the last key events of the year: policy meetings by the Fed, ECB and BoE on 14-15 December. It looks like the dollar's long positioning has now completely faded, and three factors - the Fed remaining hawkish, China's optimism being misplaced and energy prices rising again - could contribute to a USD re-appreciation   European Central Bank president Christine Lagarde and US Fed chair Jerome Powell USD: Balanced positioning The dollar index is now trading 8% off its early November high, and it can’t be excluded that a busy couple of weeks before the festive period will continue to put some pressure on the greenback, which is incidentally seasonally weak in December. This is, however, not our base case, as we suspect instead that the dollar correction may have run its course, and several factors should allow for some re-appreciation into year-end. First, markets have speculated about a dovish pivot from the Federal Reserve after signs of slowing inflation, but our suspicion is that the Fed will maintain its hawkish narrative for longer, implicitly or explicitly protesting against the recent drop in yields. Strong jobs numbers on Friday should offer a basis for this. After all, endorsing the market’s dovish narrative may be premature and risky for the Fed whose plan should be to let markets do the heavy lifting in tightening - and our rates team is bearish on Treasuries in the near term. A still highly inflationary global environment may struggle to live with sub-3.50% 10-year yields. Secondly, USD/CNY is trading below 7.00 for the first time since September, with the yuan following Chinese risk assets higher after the government announced an easing of Covid rules. The government’s move appears to be a direct consequence of recent demonstrations against its Covid policy, but a further untightening of restrictions may prove complicated. Many parts of the country – including Beijing – are facing a surge in cases, and the vaccination rates (especially booster doses) among the elderly still look insufficient. At the same time, the real estate and export sectors remain a key concern for the medium outlook in China, and one that may prevent the yuan from appreciating much further. Third, with Russia rejecting the cap on oil prices at $60/bbl and threatening output cuts, along with a projected drop in temperatures in many parts of Europe, the energy crisis may return and we see ample room for gas and oil prices to climb back. That would be a positive development for the dollar.   Today, the US calendar includes ISM service figures for November, while PPI and University of Michigan survey numbers are the other major releases to watch this week. There are no Fed speakers as the pre-FOMC blackout period has now started. According to our calculations based on CFTC data, the dollar’s aggregate positioning against G10 currencies is now neutral, and at the lowest levels since August 2021. With more limited room for position-squaring effects to weigh on the dollar, our view for this week is that we could see at least some stabilisation in the greenback. DXY may struggle to extend its drop below 103/103.50, and a rebound to 105.50/106.00 looks more likely in our view. Francesco Pesole EUR: Energy scares coming back? The eurozone’s calendar lacks market-moving data this week, and only includes some final releases (GDP, PMIs). However, we’ll get a chance to hear the last few comments by European Central Bank officials before the 15 December policy meeting. Markets appear to have reinforced their 50bp expectations over 75bp, especially after the latest deceleration in eurozone inflation which makes the hawkish rhetoric harder to defend. However, energy-related news should be more relevant for the euro this week, with falling temperatures in Europe and the price cap on Russian oil coming into effect today. Urals grade crude is trading around $10 below the $60/bbl cap, but Russia has already announced that it would prefer to trim production rather than sell at the embargo price. OPEC+ has held production steady and is only scheduled to meet again in February, but we continue to see risks that a tighter picture in the energy market in 2023 could lead to higher oil and gas sooner rather than later. Given the high sensitivity of EUR/USD to the eurozone’s terms of trade (which is primarily driven by energy prices), further upside risks for energy commodities equal downside risks for the euro. This week, some dollar stabilisation could make the EUR/USD rally run out of steam around the 1.0600/1.0650 area, and possibly lead to a more sustainable drop below 1.0450/1.0500. We remain bearish on the pair into year-end. Francesco Pesole GBP: Cable is still a dollar story Markets have aligned their expectations for the Fed, the ECB and Bank of England’s December rate hikes at 50bp. There is only a residual 7bp of extra tightening in the OIS curve for the 15 December BoE meeting, and our call is also for a half-point move. Rate expectations are unlikely to be stirred this week given the BoE has entered its quiet period and there are no major data releases in the UK. We struggle to see cable extend its rally to 1.25 and beyond, but it will undoubtedly be primarily a dollar/risk sentiment story driving the pair before the BoE meeting. A contraction below 1.20 seems more appropriate given global and UK macro fundamentals.   Francesco Pesole CEE: Ecofin may close the Hungarian saga This week will kick off with the release of wage growth in the Czech Republic, a key number for the Czech National Bank given that a wage-inflation spiral is a major risk for the board. The central bank forecasts 6.1% in nominal terms; we expect a number closer to 8.0% year-on-year. However, we don't believe this will be enough to trigger a hawkish reaction. On Tuesday, EU finance ministers may vote on a European Commission proposal to freeze Hungary's access to EU funds. On Wednesday, we will see industrial production results in the Czech Republic and Hungary where we expect to see slowing but still solid numbers. In Romania, a breakdown of 3Q GDP will be published and later we will see the National Bank of Poland's decision. After the publication of inflation last week, which surprised to the downside, we can expect nothing but a confirmation of the end of the hiking cycle. Then on Thursday, November inflation in Hungary will be published. We expect a further jump in YoY numbers from 21.1% to 22.4% and a similar jump in core inflation, in line with market expectations. In the FX market, the CEE region remains well supported by the external environment, despite our expectations, especially thanks to the weak US dollar, which remains a question mark for this week. At the local level, the main themes remain the same: Hungarian forint and Polish zloty. In Hungary, FX remains mainly driven by the EU story and we should see new headlines this week. However, the markets are visibly losing patience, resulting in high volatility, which we expect this week as well. Positioning in our view became more balanced last week, creating room for a new rally if we hear positive news, which is our baseline. In this case, we expect the forint to return below 405 EUR/HUF. In Poland, the main topic will of course be the NBP's meeting, which will again test the market's willingness to accept the decision to end the hiking cycle. The massive rally in rates and POLGBs last week following the release of inflation data further widened the gap between the zloty and interest rate differential. FX thus remains vulnerable, in our view. We remain bearish with expectations for the zloty to return above 4.72 EUR/PLN. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Oil Prices Has Gave A Support To The Canadian Dollar (CAD)

TeleTrade Comments TeleTrade Comments 05.12.2022 09:34
USD/CAD is at a make or a break near the round-levels support of 1.3400. Upbeat US Nonfarm Payrolls have failed to provide a cushion to the US Dollar. The Bank of Canada is set to hike its interest rates by 50 bps consecutively for the second time. USD/CAD is expected to deliver more losses on a breakdown of the Ascending Triangle pattern. USD/CAD has witnessed a sheer downside after surrendering the critical support of 1.3442 in the Asian session. The loonie asset has dropped firmly below the round-level support of 1.3400 in the Tokyo session as a significant improvement in risk appetite has impacted the US Dollar. The US Dollar Index (DXY) has turned sideways after registering a fresh five-month low at 104.14. The USD Index is expected to extend its losses ahead as the risk-on impulse has strengthened dramatically. The US Dollar is facing immense pressure as the Federal Reserve (Fed) is shifting its mindset towards a slow rate hike culture to safeguard the United States economy from financial risks. S&P500 futures are displaying a lackluster performance as investors are awaiting the release of US ISM Services PMI data for fresh impetus. Meanwhile, the 10-year US Treasury yields have recovered firmly to near 3.53% on upbeat US Nonfarm Payrolls (NFP) data. Also, hawkish commentary from the Federal Reserve policymaker about interest rate peak has weakened US Treasury bonds. Chicago Fed President Charles Evans said on Friday, "We are probably going to have a slightly higher peak to Fed policy rate even as we slow pace of rate hikes," reported Reuters. Upbeat US Nonfarm Payrolls failed to provide cushion to the US Dollar Markets participants were expecting that only better-than-projected US labor market data could add life to the US Dollar. The Greenback has been facing immense pressure from investors after Federal Reserve policymakers started sounding ‘less hawkish’ on interest rate guidance. On the labor front, the United States economy added 261K fresh jobs against the projections of 200K. The jobless rate remained unchanged at 3.7%. The catalyst that could support the US Dollar ahead is the improvement in Average earnings data. The labor cost index has improved to 5.1%. Robust labor demand along with higher wage rates possess the capability of accelerating inflation as higher wages would force households to more spending on durables. This could refresh troubles for Federal Reserve chair Jerome Powell. Recovery in oil prices and upbeat Canadian employment data supported the Canadian Dollar The Canadian Dollar has been supported by a recovery in oil prices and better-than-projected payroll data.  Oil prices recovered sharply amid multiple tailwinds. Easing lockdown curbs in China and upbeats US Nonfarm Payrolls (NFP) data strengthened global economic projections. It is worth noting that Canada is a leading oil exporter to the United States economy and solid oil prices support the Canadian Dollar.   The Canadian economy added 10.1K jobs in November vs. the projections of 5K. Also, the Unemployment Rate has eased to 5.1% against the projections of 5.3%. This is going to delight the Bank of Canada (BOC) to announce a higher rate hike in its mission of bringing price stability. Bank of Canada is set to hike interest rates further Canada’s inflation rate remained unchanged in October at 6.9%, which indicates that the Bank of Canada is required to continue its policy tightening measures further to curtail inflationary pressures. In October’s monetary policy, Bank of Canada Governor Tiff Macklem hiked interest rates by 50 basis points (bps). As per the estimates from CIBC, the Canada central bank will continue its 50 bps rate hike regime. Analysts at CIBC point out that the Bank of Canada will increase rates by 50 bps on Wednesday, before pausing in 2023. A 50 bps rate hike by the Bank of Canada will accelerate the interest rate to 4.25%. This is going to widen the BOC-Fed policy divergence, which is impacting the Loonie asset for now. USD/CAD technical outlook USD/CAD is at a make or a break near the edge of the upward-sloping trendline of the Ascending Triangle chart pattern on a four-hour scale. The upward-sloping trendline of the chart pattern is placed from November 16 low at 1.3228 while the horizontal resistance is plotted from November 10 high at 1.3571. The Loonie asset has dropped below the 50-and 200-period Exponential Moving Averages (EMAs) at 1.3436 and 1.3459 respectively, which indicates that the short-term and long-term trend is bearish. Meanwhile, the Relative Strength Index (RSI) (14) is hovering around 40.00.  A breakdown of the same will trigger a bearish momentum.     search   g_translate    
Analysis Of The AUD/USD Commodity Currency Pair's Price

The Further Australian Dollar (AUD) Strength Is Not Ruled Out

TeleTrade Comments TeleTrade Comments 05.12.2022 09:43
A potential move to 0.6915 remains on the cards once AUD/USD clears 0.6850, suggest Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group. Key Quotes 24-hour view: “We expected AUD to ‘trade between 0.6765 and 0.6845’ last Friday. AUD subsequently dropped to 0.6743 before rebounding quickly. We view the price movements as part of a consolidation and expect AUD to trade within a range of 0.6760/0.6850 today.” Next 1-3 weeks: “There is not much to add to our update from last Friday (02 Dec, spot at 0.6800). As highlighted, while further AUD strength is not ruled out, it has to break clearly above 0.6850 before an advance to 0.6915 is likely. The likelihood of a clear break of 0.6850 would remain intact as long as AUD does not move below 0.6730 (no change in ‘strong support’ level from last Friday).”
Inflation Reports In Australia And New Zealand Were Higher Than Expected

G10 Pacific Currencies (AUD And NZD) Quite Clearly Benefit From The Easing Of Restrictions In China

TeleTrade Comments TeleTrade Comments 05.12.2022 09:51
Both the Chinese Renminbi as well as the Pacific G10 currencies (AUD and NZD) are benefitting quite clearly from the fact that several cities in China decided to ease coronavirus curbs. Nonetheless, excessive AUD and NZD are not justified, according to economists at Commerzbank. China’s leadership is reacting “Corona measures are being eased more quickly than one might have assumed even last week. In particular as the introduction of these measures had initially caused CNY, AUD and NZD weakness the FX market had potential for a correction. I completely agree with that, in particular as I was critical about the initial market reaction. At the same time, I caution against throwing out the baby with the bath water.” “I know that everyone blamed the corona lockdowns (and fears of them) for weak growth in China. However, even if we see a reversal in China’s lockdown policy that does not mean that everything will be happiness ever after. That means that excessive AUD and NZD strength is not justified.”
The AUD/USD Pair’s Downside Remains Off The Table

The Market Is Highly Skeptical That The RBA Can Return To The Aggressive Pace Of Rate Hikes

InstaForex Analysis InstaForex Analysis 05.12.2022 09:56
The Reserve Bank of Australia will hold its last meeting of the year on Tuesday, December 6. It is by no means a passing meeting, so the AUD/USD pair may experience increased volatility. The previous signals are contradictory, so a certain intrigue regarding the results of the December meeting remains. However, in anticipation of this event the market has already formed its position with regard to the base case scenario. Thus, according to the opinion of the majority of experts polled by Reuters, the RBA this month will increase the rate by 25 points—the same as at the previous two meetings. There is a consensus on this issue, while further prospects for tightening monetary policy already look vague. At the very least, analysts' opinions regarding the pace of the rate hike after the December meeting differ. For example, 12 of 30 economists surveyed said that in the first quarter of next year, the RBA will increase the rate by a total of 50 points, 11 predicted a 25-point hike, while six analysts do not expect any steps in this direction from the RBA. In general, at the end of the first half of 2023, many of the experts surveyed (15 of 29) see an interest rate level of 3.60% "or higher," while 14 analysts said the rate would be below 3.6%. At the same time, some of them admit the option of the RBA taking a wait-and-see approach after the December meeting, which means that the rate will peak at 3.10%. Note that the Reserve Bank of Australia is gently and gradually leading traders to the fact that the regulator may indeed take a pause in rate hikes for the foreseeable future. In particular, the minutes of the latest RBA meeting indicate that members of the regulator simultaneously do not rule out two scenarios: they can either return to a 50-point rate hike, or suspend the process of tightening monetary policy. Judging by the opinion of the absolute majority of experts, the market is highly skeptical that the RBA can return to the aggressive pace of rate hikes. Market participants are more likely to be ready for an alternative option, according to which the RBA will take a break after the December or February meeting (when the Central Bank would have Q4 2022 data on inflation growth in Australia). RBA Governor Philip Lowe and his subordinates are also gradually preparing the markets for the implementation of a conditionally "dovish" scenario. In particular, Deputy Governor Michelle Bullock said back in November in the Senate of the Australian parliament that the regulator is approaching the moment when it will be possible to pause and look around. In turn, the head of the central bank, speaking last Friday at the Bank of Thailand's economic conference in Bangkok, said that inflation expectations in Australia remain under control, and the RBA's decision to slow the rate increase reflects the lagging effects of monetary policy. At the same time, he added that the Australian regulator seeks to slow down inflation "without having too much negative impact on the economy." The latter thesis, in one form or another, was repeatedly voiced by Lowe and his colleagues. And recently, this message is sounding more and more often, and so to speak, "louder" (accents are set accordingly). At the same time, each Australian macroeconomic release is considered by the market through the prism of these signals. For instance, last week, AUD/USD traders reacted rather strongly (more aggressively than usual) to a disappointing retail sales report which otherwise would have been ignored by the market. Consumer Spending in Australia was unexpectedly in the red, showing a contraction of 0.2% (instead of the forecasted 0.5% growth). Of course, the release itself reflects negative trends, but in this case, the published report was taken by the market as another argument in favor of a possible pause in the process of tightening monetary policy. Thus, the outcome of the December meeting of the RBA may turn out soft. The 25-point interest rate hike is already fully factored into current prices—this decision is likely to be ignored by the market. The market's attention will be focused on the rhetoric of the accompanying statement and on Philip Lowe's statements. If the RBA leadership "outright" allows a pause for a rate hike in early 2023, the Aussie will be under pressure, despite all prior hints about it. Judging by the results of the above-mentioned Reuters poll, most experts are still confident that the RBA will raise rates in the first half of 2023, even at a slow pace. Given such uncertainty, it is most reasonable to take a wait-and-see attitude for the AUD/USD pair until the RBA's verdict is pronounced. Relevance up to 07:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328938
The EUR/USD Pair: There Are Still No Sell Signals

Investors Began To Buy The Euro With Renewed Vigor After ECB President Christine Lagarde's Speech

InstaForex Analysis InstaForex Analysis 05.12.2022 10:20
Markets prefer to shoot first and then think later. Otherwise, they would miss the moment. When ECB President Christine Lagarde said that central banks should pursue policies that would anchor inflation expectations, investors began to buy the euro with renewed vigor, pushing EURUSD quotes to the highest levels since June. In reality, however, Lagarde's phrase does not guarantee that the deposit rate will rise by 75 bps in December. No matter how this shot turned out to be a blank. The logic of investors selling the U.S. dollar is clear: inflation is slowing and will continue to do so, which means the Fed does not need to take giant steps down the road of tightening monetary policy. The factor of an aggressive federal funds rate hike, along with U.S. exceptionalism and high demand for safe haven assets, was the key driver of the EURUSD rally. If the ECB starts to catch up with the Fed, the dollar has one less trump card to play. Lately, the macrostatistics of the euro area has been pleasantly surprising, which is reflected in the growth of the index of economic surprises. It is quite possible that the currency bloc will either manage to avoid recession or the recession will be quick and insignificant. It looks like the U.S. is not as far from the eurozone as previously thought. A change in investors' outlook on the matter has given EURUSD a helping hand. Dynamics of Economic Surprise Indices In fact, the U.S. dollar has only one trump card left—its status as a safe-haven asset, and even that fails. When the yield of Treasury bonds grew, the competitors of the grenback in the face of gold, yen and franc were in disgrace. However, the decline in interest rates on debt has turned them from outsiders into favorites. As a global recession approaches, investors will no longer park their money in North America, but will prefer Japan, Switzerland, or a perpetual asset. Jerome Powell had a chance to turn things around. Had he voiced his dissatisfaction with financial conditions, the EURUSD pair would hardly have been able to soar above 1.05. The weakening of the latter makes it difficult for the Fed to fight inflation, but the central bank also seems to believe that the PCE will continue to slow. Dynamics of financial conditions in the USA Unlike Lagarde, who believes that the global economy is entering an era of volatile inflation. That is why central banks should anchor inflation expectations at the target level of 2%. Households must trust that their work will lead to price stability. That's the only way to win. Volatile inflation makes it doubtful that EURUSD will continue to go further upward in the same way as in October and early December. Most likely, it will be stormy. In technical terms, the euro approached the target by 161.8% by the Crab pattern within an arm's length. It is located near the $1.061 mark. A rebound may follow from it or from the 1.057 pivot point, which will allow to partially take profits on the longs formed above 1.0395. Subsequently, we use pullbacks to buy EURUSD Relevance up to 06:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328928
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

Saxo Bank Podcast: Key Economic Indicators Point To An Incoming Recession In Europe

Saxo Bank Saxo Bank 05.12.2022 11:31
Summary:  Today we note that the market seems to be in see-no-evil, hear-no-evil mode, as hot earnings data from the US on Friday was unable to sustain a reaction in treasury yields, with financial conditions at their easiest in months. Still, key economic indicators point to an incoming recession in Europe even as the EURUSD manages to pull above 1.0500. We also preview tonight's RBA meeting, interesting earnings reports this week and much more. Today's pod features Peter Garnry on equities, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Financial conditions continue to ease, ease, ease | Saxo Group (home.saxo)  
ADP Non-farm payrolls jobs market data show a growth of 127K, much less than the previous print

Greenback gains from the November wage growth, US 30 changed direction as traders benefit from the NFP

Jing Ren Jing Ren 05.12.2022 08:40
USDCHF remains under pressure The US dollar jumped over strong wage growth in November. A drop below the recent low of 0.9370 further weighed on sentiment by invalidating the double bottom between August and November. As the latest buyers are forced to bail out, the directional bias remains down. The pair is setting sail for last April’s low of 0.9200. The RSI’s oversold condition led to a bounce which might be capped by strong selling interest. 0.9460 is the first hurdle and the bulls will need to clear 0.9550 before they could press for a recovery. EURGBP struggles for support The higher-beta pound outperforms across the board thanks to improved risk sentiment. The recent rebound came to a halt at 0.8670 and a subsequent fall below the critical floor at 0.8570 indicates that the path of least resistance is down. This is an invalidation of the rally from early September after a two-month long consolidation. As buying interest becomes scarce, the bears may see a rebound as an opportunity to sell into strength. 0.8500 would be the next target should the sell-off regains momentum. US 30 bounces off support The Dow Jones 30 whipsawed as traders took profit post-NFP. The index has been looking to hold onto its recent gains after a rally above August’s high of 34300. A bounce off the previous consolidation range near 33600 and over the 20-day moving average suggests that the uptrend is still intact. The demand zone between 33600 and 33900 is key in keeping the current bullish framework valid. A close above 34700 could trigger a new round of momentum buying and send the price to last April’s high of 35500.
Nasdaq 100 Faces Bearish Breakdown Below Ascending Wedge and RSI Momentum Indicator

The hourly chart of the DXY index shows the end of the global corrective trend, which took the form of a triple zigzag consisting of five main cycle waves w-x-y-x-z

Jing Ren Jing Ren 05.12.2022 08:43
Thus, the market may currently be at the beginning of the first part of a major bearish trend. It is assumed that the bears form a triple zigzag pattern Ⓦ-Ⓧ-Ⓨ-Ⓧ-Ⓩ. It seems that the sub-waves Ⓦ-Ⓧ-Ⓨ-Ⓧ have already been completed. In the near future, the price is expected to continue falling in the primary wave Ⓩ. Its end is possible near 101.59. At that level, it will be at 76.4% of wave Ⓨ. Let's consider an alternative option in which the formation of a cycle triple zigzag will continue. Most likely, we see a zigzag price movement in the wave z. The wave z may take the form of a zigzag Ⓐ-Ⓑ-Ⓒ, where the first impulse Ⓐ and the correction Ⓑ in the form of an intermediate double zigzag are already completed. The entire wave z can complete its pattern near 116.21 level. At that level, it will be at the 61.8% Fibonacci extension of wave y. The first sub-wave (1), which is part of the primary wave Ⓒ, is likely to reach the level of 107.22, marked by a minute correction.
Market Focus: US Rate Hikes, Eurozone Inflation, and UK Monetary Policy Uncertainty

The latest dollar selloff is a hint that the US dollar has certainly peaked this year, and next year will be, (...) , a year of softening for the greenback

Ipek Ozkardeskaya Ipek Ozkardeskaya 05.12.2022 13:36
US stocks fell on Friday, after the latest data showed that Americans got more jobs in November, and more importantly they got a better pay. Wages grew by 0.6% over the month, which was the biggest monthly gain, and the double of what was penciled on by analysts.   Of course, the news was great for the American workers, but much less so for the Federal Reserve (Fed), who is dreaming of a softer US labour market, and weak wages so that people could just STOP spending in hope that inflation would fall.   Read next: If ECB policymakers should make a decision between fighting inflation and avoiding recession, they will likely choose fighting inflation says Ipek Ozkardeskaya| FXMAG.COM But nope, it's just another month of strong US jobs data which certainly got Mr Powell to scratch his head.  Investors just... don't want to price Fed rate at 5%!  More, and better paid jobs fueled US inflation expectations, boosted the Fed hawks, and brought forward the idea that the Fed could be attracted by another, a fifth 75bp hike in the December meeting,   US equities fell and the dollar gained.  But then, the S&P500, which gapped lower at the open closed the session almost flat, and the US dollar index gave back all post-jobs gains to close the week where it was before data, and even came lower in Asia this morning.   Why?   Probably because investors priced in the fact that the Fed won't increase its rates by 75bp this month. It will probably increase them by more in the first half of next year. But that information doesn't go through for some reason, and the pricing for the Fed's terminal rate is still below 5%.   So be careful, even though the rally in equities looks like it could continue, and the weakness in the US dollar is what could mark the last weeks of a chaotic trading year, we will certainly see these forces reverse in the first weeks of January, if not before.  S&P500 at crossroads  The S&P500 closed what was normally supposed to be a week of losses with gains. The index added more than 1% last week, and closed the week right at the top of the year-to-date descending channel, and above its 200-DMA.   The RSI index doesn't point at overbought conditions, the MACD index is slightly positive, and the volatility index slipped below 19, low volatility being a sign of improving risk appetite, and potentially sustainable gains.   Is there a possibility for this rally to extend despite all the red flags? Yes! There is, though, with the risk of Jerome Powell sounding like at the Jackson Hole speech back in summer – which had destroyed the market mood in a couple of minutes.   The next big data is due next week, on Tuesday, a day before the FOMC decision. Until then, investors could give themselves the luxury to dream about a dovish future.   The freefalling dollar  Until then, we could see the US dollar lose more field against most majors, if we are lucky enough. The EURUSD for example gained more than 10% since the end of September, as Cable gained nearly 20% since the Liz Truss dip.   As such, the US dollar rebound seems a bit aggressive, especially knowing that the market has been refusing to price in a terminal rate for the Fed above 5%.  So, there is a risk that we don't see a one-sided dollar selloff when the Fed remains sufficiently hawkish – and when the market pricing will have to match the Fed talk at some point.   But the latest dollar selloff is a hint that the US dollar has certainly peaked this year, and next year will be, despite some Fed hawkishness, and some rebounds, a year of softening for the greenback and recovery for other currencies.   OPEC doesn't cut output  The weekend was rather eventless, as OPEC decided to maintain its daily output restriction unchanged at 2mio barrels per day at Sunday's meeting, which could be seen as a negative development for the bulls.   But there are two price-supportive developments that could limit losses below the $80pb.   First, Europeans finally agreed on the Russian oil price cap at $60pb, that Russia refused – hinting that the Russians could reduce their oil output in the coming months, which would than reduce the global supply and push prices higher.   Second, China is easing Covid measures. The Chinese reopening could counter the global recession odds and support oil prices.  In US crude, strong resistance is seen at $85pb, 50-DMA. 
ECB interest rate hiking is six times faster than in the previous tightening cycles

The reduction of fears related to a possible frosty winter may support the euro exchange rate

Kamila Szypuła Kamila Szypuła 05.12.2022 13:37
The situation of currency pairs is affected by macroeconomic and political events. In the Asian market, developments in China, which has recently been struggling with an increase in coronavirus infections, are of particular importance. December is particularly important because the last decisions regarding interest rates will be made this year, which will affect the forex market.   Decreased winter fears may support the euro. The looming recession in the UK is starting to take its toll on the pound. The Aussie awaiting RBA decision Positive Japan services PMI   EUR/USD The EUR/USD pair is at its highest level in months. The upward trend in recent weeks has been strong. ING FX experts remain bearish on the euro/dollar exchange rate until the end of the year, but there are experts who believe that the exchange rate will continue its upward move. It is worth paying attention to the readings of PMI indices for services that will be released today from many countries and the already mentioned ISM data from the US. Today's readings for the EU were weaker than expected, but it seems that the market is waiting for the release of the US report. The news related to energy issues in the euro zone may be loud this week. The price cap of the G7 is $60. per barrel, and Urals oil is traded at $10. below this ceiling. Moscow has already announced that it prefers to limit production rather than sell at a fixed price. However, the reduction of fears related to a possible frosty winter may support the euro exchange rate.   Read next: If ECB policymakers should make a decision between fighting inflation and avoiding recession, they will likely choose fighting inflation says Ipek Ozkardeskaya| FXMAG.COM   GBP/USD The pound/dollar exchange rate increased its gains in November. The recent rebound in the pound/dollar (GBP/USD) has regained momentum, but Monday morning brings some break to the rally. The final service PMI reading for November published today was in line with expectations (48.8). More and more serious opinions announcing a more significant and prolonged recession in the British economy may start to show up in the pound's quotations. Especially that the market will also price in scenarios regarding the decision of the Bank of England on the level of interest rates. The Bank of England will decide next week's rate on Thursday (December 15), the same day as the ECB and a day later than the Federal Reserve (December 14).   AUD/USD AUD/USD refreshed to a seven-week high above 0.6850. Now turned down, sentiment remains bearish. The AUD/USD exchange rate is susceptible to the economic situation in the US and Australia. The situation in China is of great importance for the strength of the Australian dollar. Announcement of easing covid restrictions in China may support the situation of the Australian dollar. Markets are expecting the Reserve Bank of Australia to keep the cash rate on hold at 2.85% after inflation slowed sharply in October. The RBA will be deciding on rates tomorrow. The market is pretty much 50/50 on a 25 bp bump up.   Read next: Chinese And European Services PMIs Fell| FXMAG.COM   USD/JPY USD/JPY bearish movement developed and the currency pair is moving to its lowest level since August. The USD/JPY pair is very liquid as both currencies are among the top reserve currencies in the world. As with other major currency pairs, USD/JPY can also be sensitive to macroeconomic data from the US and Japan. Today's reading for PMI services in Japan was optimistic.   Source: finance.yahoo.com, investing.com,
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

Greenback has lost 6% since the late-September. Fed decides next week

Enrique Díaz-Álvarez Enrique Díaz-Álvarez 05.12.2022 15:59
A relatively dovish speech from Fed chair Powell, and the prospect of a pivot away from zero-COVID in China, put some fuel into the risk asset rally last week. The US dollar was once again one of the worst performing currencies in the world, having suffered its worst monthly performance since September 2010 in November, falling against all but one of its G10 peers. The greenback has now retraced 6% from its late-September highs in trade-weighted terms. Traders are now short the dollar on net, and we could see some consolidation of current levels into year-end, but it will all depend on the relative hawkishness of the respective central banks at their upcoming December meetings.   This week will be a quiet one in terms of data releases and policy news, and markets will likely mark time as they wait for the big three central bank meetings that will take place in the span of less than 24 hours next week. The Federal Reserve will kick things off on 14th, followed by the Bank of England and the ECB on 15th. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 05/12/2022 GBP Sterling continued its strong rebound from the depths of the fiscal crisis, as markets become more confident that sane fiscal policies will be followed and the backdrop becomes more friendly to risk taking in general. Macroeconomic data releases also continue to come in slightly better-than-expected, notably the recent PMI prints, further raising hopes that the downturn in UK activity may not be as severe or prolonged as some of the worst-case scenarios. Talk of a Swiss-style model for relations with the EU also soothed nerves last week, and some hawkish comments from MPC members probably mean that sterling will have an easier time going up than down. That is, at least until the Bank of England clarifies (or further muddies!) its position at the December meeting in 10 days hence. A 50 basis point rate hike is widely expected by investors, so attention will likely be largely on the bank’s rhetoric on the pace and extent of additional tightening in 2023. EUR The drought of market moving news out of the Eurozone last week and this one means that the common currency is mostly moving in reaction to news elsewhere, notably the US and China. Both were positive last week, with Powell telegraphing a rate hike of only 50bps in December and Chinese authorities signalling that lockdown measures will be relaxed. Hopes that the zero-COVID policies may soon be a thing of the past has helped risk assets in general in the past week, and allowed the euro to bounce around the top of the 1.00-1.05 range where it has been trading for the past few weeks. Q3 GDP data will be released on Thursday, though this is merely the revised print, so volatility in the euro may be rather low around its release. Expect ECB member speeches to garner far more attention leading into next week’s highly important European Central Bank meeting. USD Markets were desperate for a sign that the Fed is ready to pivot away from massive 75bp hikes, and it got its wish last week. A 50bp rate increase in December is now priced in, and while in previous hiking cycles this would have been considered a jumbo move, this passes for good news on the rate front nowadays. News out last week was positive for the economy, and mixed for inflation. Actual activity numbers are so far strong in the US, and labour markets remain taut. While the PCE inflation report confirmed the good news from the earlier CPI one, wages in October rose considerably more than expected and seem to be trying to catch up with inflation, raising the prospect of second-round inflationary effects. For now, all is forgotten in celebration that 75bp are done with. Bonds rallied in tandem with risk prices and the dollar continued to retrace its 2022 gains. Figure 2: US PCE Inflation Rate (2012 – 2022) JPY The yen has continued its strong recovery in the past few weeks, and was once again one of the better performers in the G10 last week. An improvement in risk sentiment would ordinarily be perceived as bearish for the safe-haven Japanese yen, though the recent sell-off in the currency and intervention efforts from the Bank of Japan has left it prone to recovery rallies. Last week’s move propelled the USD/JPY pair below the 135 level for the first time since August. A slew of economic data releases will be closely watched by currency traders this week. Today’s services PMI came in slightly stronger-than-expected, although printed only modestly in expansionary territory (50.3 vs 50.0 expected). Revised third quarter GDP data on Wednesday could also shift the yen if we see a significant deviation from the initial estimate. CHF Improved risk sentiment meant that the safe-haven franc trailed most of its G10 peers, ending last lower against the euro. News from Switzerland failed to help the currency, with most readings disappointing expectations. Third-quarter GDP growth was unimpressive at +0.2% QoQ, and the Q2 reading was revised down to just +0.1%. Real retail sales dropped sharply in October (-2.5% YoY) and the forward-looking sentiment indices dipped as well, suggesting a slowdown ahead. Figure 3: Switzerland GDP Growth Rate (2012 – 2022) Source: Refinitiv Datastream Date: 05/12/2022 The centre of attention was, however, inflation. As expected, the headline rate stabilised at 3% in November, with core price growth ticking up to 1.9%. The Swiss economy is slowing and the data seems to send some disinflation signals. However, considering that price growth remains far above the central bank’s comfort threshold, we think that the poor economic numbers won’t deter the SNB from hiking interest rates next week – our base case remains for a 50bp hike. AUD Signs of a move towards easing the zero-covid policies in China should be disproportionately bullish news for the Aussie dollar, though the currency lagged behind most of its high-risk G10 peers last week, including the New Zealand dollar. Expectations that the RBA will deliver no more than a 25bp rate hike at its meeting on Tuesday has partly held back the rally in AUD – indeed markets see almost a 30% chance of no hike at all. There will be no policy meeting in January, so Tuesday meeting could lay the groundwork for an end to the tightening cycle. Markets are pricing in 70bps of hikes through to the middle of next year, so any hints that hikes could end in Q1 would be perceived as dovish for AUD. Third-quarter GDP data out on Wednesday, and trade balance figures on Thursday will round out an unusually busy week in Australia. NZD The New Zealand dollar was the best performer in the G10 last week, with the kiwi receiving headwinds from both easing Fed rate hike bets and positive headlines out of China – New Zealand’s largest trading partner. Domestic economic news out of New Zealand last week, notably housing, terms of trade and business confidence data, was actually unambiguously bearish for NZD, although it was largely overlooked by investors. Weaker business confidence, sky-high inflation and ongoing labour shortages do present near-term risks to the economy, and could lead to a correction in the recent dollar rally in the coming week. There will be no real major economic data releases out of New Zealand this week, so NZD could be driven largely by events elsewhere, notably covid news out of China. CAD CAD once again trailed behind its major peers last week, ending roughly unchanged versus the US dollar. Data out of Canada last week was rather mixed, with slightly softer-than-expected GDP figures offset by modest surprises to the upside in the November PMI data and employment reports. High uncertainty heading into this week’s Bank of Canada meeting has partly contributed to this underperformance, with markets torn between a 25bp and 50bp rate hike. While economists are pencilling in a 50bp move, markets only see a one-in-four chance of one, which opens the door to a hawkish surprise. On balance, we think that a 25bp hike is more likely. Excess demand and a lack of a clear peak in core inflation may encourage a larger move, though we think that heightened growth concerns could tip the balance towards less tightening. This would be a bit of a disappointment for investors, but would probably only lead to a small sell-off in CAD given current market pricing. SEK The Swedish Krona ended last week slightly higher against the euro, in line with other risk assets, which rose as investor risk appetite improved. Economic data released last week was rather mixed. GDP data showed that the Swedish economy expanded by 0.6% quarter-on-quarter in Q3, slightly less than expected (+0.7%). Consumer confidence rose to 55.8, up from the lowest level since 1993. While this remains at historically low levels, this improvement makes us marginally more optimistic about the outlook for the Swedish economy. Figure 4: Sweden Consumer Confidence (2012 – 2022) Source: Refinitiv Datastream Date: 05/12/2022 On the other hand, retail sales fell by 1.3% month-on-month in October, the third consecutive monthly drop and the steepest since June. No major data will be published this week, so we suspect that SEK will largely trade in line with other risk assets. NOK In the absence of relevant data last week in Norway, the Norwegian krone traded in line with risk assets, ending the week higher against both the US dollar and the euro. This week’s focus will be on the November inflation data to be released on Friday. Headline inflation is expected to ease slightly from the 35-year high recorded in the previous month, but core inflation is expected to remain unchanged at a very high 5.9%. If confirmed, thi would cement our view that Norges bank will need to keep raising rates in the coming months in order to control inflation. In the event of an upside surprise, there is a possibility that the central bank will again discuss the possibility of raising rates by 50 basis points, which could support the Norwegian currency. CNY The Chinese yuan traded higher against the US dollar last week, with the USD/CNY pair falling below the key psychological threshold of 7.0 for the first time since September. Signs of a move towards a reopening of the Chinese economy has helped CNY. The COVID protests appear to have been largely contained, and have forced authorities to rethink their zero-COVID approach. A number of cities have announced an easing of curbs and Chinese officials appear to be moving towards further easing. Last week, Vice Premier Sun Chunlan, mentioned ‘decreased pathogenicity’ of the omicron variant and stated that the country is entering a ‘new stage’ in its fight against COVID. China has also announced an acceleration of efforts to vaccinate the elderly, targeting one of the main roadblocks to a full reopening. Investors will continue to focus on COVID news this week. Largely disappointing November PMI data suggests that this remains key for the Chinese economy. Aside from COVID policy signals, consumer and producer inflation data for November, out on Friday, will be worth watching. Economic Calendar (05/11/2022 – 09/12/2022) Read the article on Ebury
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

The EUR/USD Pair Has All Signs Still Point Upward

InstaForex Analysis InstaForex Analysis 06.12.2022 08:00
On Monday, the EUR/USD currency pair made a small adjustment but is still above the moving average line. As a result, we can only discuss a rollback, not a correction. There were legitimate reasons for the pair to fall on Monday, and all signs still point upward. As a result, it was a justified strengthening of the US dollar rather than a gesture of goodwill. Numerous reports of all kinds were released for the day, most of which had little chance of being noticed by traders. The only things that had an impact were the ISM index in the United States, which unexpectedly increased to 56.7 when everyone expected it to decline, and retail sales in the European Union, which decreased by almost 2%. The US dollar increased in both situations, which makes sense. So, Monday's big question (were traders satisfied with their purchases of the euro currency?) was unanswered. Purchases of the euro currency made without justification have been noted recently. There won't be any significant events in the EU or the USA today, so the pair's growth may already have resumed. We shall see. Also, note that the downward correction is screaming at the top of its lungs; it is no longer just simmering. Small rollbacks occasionally still have a place, but they are very weak. Remember that the pair has already recovered 1,000 points in just two months from 20-year lows. When was the last time the euro fell for two years straight without being able to recover by more than 400 points? Since we understood that the euro currency could not continue to fall indefinitely, we have been waiting for a significant upward movement for a very long time. However, the euro's two-year decline was logical from the standpoint of geopolitics, which serves as its basis. And right now, the value of the euro is rising practically for free. Even though this may only be a technical adjustment on a global scale, we would still like to see some logic behind the movements. The "tough" monetary policy of the Fed will last for a very long time. We already mentioned a little above that the US dollar has increased over the past two years for a reason. And right now, for no apparent reason, the value of the euro is rising. Let's revisit the monetary policy of the Fed. The American Central Bank was the first to raise interest rates, and it did so quickly and aggressively. The rate is now at 4%, is almost certain to increase to 5%, and will stay at its peak level for the entirety of 2023 and the first half of 2024. Many experts whose opinions were sought out by The Financial Times expressed this prediction. They predict that the US economy will experience slower growth rates or a recession in the upcoming year, forcing the Fed to lower interest rates once or twice in 2024. Nevertheless, this will occur in at least 1.5 years. Rates will remain very high throughout, putting pressure on inflation and the economy. The size of the rate and the differences in rates with other central banks are more significant for the dollar, though. In other words, the US currency controls the Fed rate at 5% and the ECB rate at 3%. This factor should already be supporting the US dollar and won't change in the future. The European currency cannot grow even in this scenario because the ECB rate is lower and is likely to stay that way because many experts, including us, have serious doubts about the European regulator's capacity to catch up to the American regulator. The market could have anticipated all future Fed rate hikes. Therefore, the dollar remains in the driver's seat from a fundamental perspective. If what we have observed over the past two months is, in fact, a global technical correction, it should be finished soon, and the pair will start to consolidate in a very small range. As of December 6, the euro/dollar currency pair's average volatility over the previous five trading days was 112 points, considered "high." As a result, we anticipate that the pair will fluctuate on Tuesday between 1.0395 and 1.0620. The Heiken Ashi indicator's upward reversal indicates that the upward movement has resumed. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: The EUR/USD pair is still in an upward trend. In light of this, we should consider opening new long positions with targets of 1.0742 and 1.0620 if the Heiken Ashi indicator reverses its upward trend. Sales will become relevant if the price is fixed below the moving average line with targets of 1.0376 and 1.0254. Explanations of the illustrations: Linear regression channels help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329026
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Cable Market Pair's Growth May Resume (GBP/USD)

InstaForex Analysis InstaForex Analysis 06.12.2022 08:01
On Monday, the GBP/USD currency pair also started to adjust after the euro. Except for the retail sales report, which only applied to the European Union, the British pound had exactly the same foundation as the euro. Thus, a "neutral" business activity index was also published in Britain, and news stories in the United States focused on both currency pairs. Therefore, it was logical and natural for the pound/dollar pair to decline on Monday. Unlike its movements from the previous week or weeks. Unfortunately, the legitimacy of the dollar's growth yesterday leaves us in the dark as to whether or not the market is now prepared to stop making illogical purchases of the pound in favor of more sensible purchases of the dollar. After all, today's macroeconomic and fundamental backgrounds won't exist, so the pair's growth may resume. It might start up again after a few days. As a result, it is still essential to carefully watch the "technique." And the "technique" is still almost entirely clear at this point. On the 4-hour and 24-hour TF, every indicator is pointing upward. A consolidation below the moving average line might be the earliest warning sign to sell. Even so, it won't be regarded as a powerful signal. However, every powerful movement begins with a small step. Therefore, you must first overcome the moving average before anticipating a stronger pair fall. Technically, everything will remain absurdly simple if the subsequent attempt to overcome the moving fails. The upward trend will continue, and it will be possible to purchase a pair more using the Heiken Ashi indicator's upward reversals. Whatever perspective you take, the dollar should increase. As was already mentioned, there won't be many significant events this week in either the UK or the USA. The US ISM services sector yesterday released a fairly significant index of business activity, which led to a strengthening of the dollar. There won't be any additional significant macroeconomic events this week. The "silence mode" among the members of the monetary committees is also activated because even important speeches are not scheduled due to the impending meetings of the BA and the Fed. From our perspective, the time is right for a downward correction. However, despite our patiently waiting for it for two weeks, the market has continued to demand a pair. So, generally speaking, we stick with what we previously believed. Fundamentally speaking, the correction ought to be strong at the moment. From a technical perspective, the pair can keep expanding indefinitely. The dollar may benefit little, even from the Fed and BA meetings. The news that the Federal Reserve will start to slow down the pace of tightening monetary policy shocked the market greatly. Still, these disappointments have already been resolved, giving the dollar a chance to rise before the meeting of the American regulator. The market steadfastly ignored the previous eight rate increases, so it can ignore the ninth, making life easier with the Bank of England. The currency pair has enough time to move up and down because the meetings are still one and a half to two weeks away. Additionally, the British regulator can "moderate its enthusiasm" and only increase the rate by 0.5% in December. Further, this could lead to traders' dissatisfaction and a sell-off of the pound, which has been rising unreasonably recently along with everything else. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 180 points. This value for the dollar/pound exchange rate is "very high." As a result, on Tuesday, December 6, we anticipate movement constrained by the levels of 1.2000 and 1.2362. The Heiken Ashi indicator's upward reversal indicates that the upward movement has resumed. Nearest levels of support S1 – 1.2085 S2 – 1.1963 S3 – 1.1841 Nearest levels of resistance R1 – 1.2207 R2 – 1.2329 R3 – 1.2451 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair has begun a new round of correction. Therefore, in the event of an upward reversal of the Heiken Ashi indicator, new buy orders with targets of 1.2329 and 1.2362 should be considered. With targets of 1.2000 and 1.1963, open sell orders should be fixed below the moving average. Explanations of the illustrations: Linear regression channels help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching. Relevance up to 01:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329028
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The Australian Dollar To US Dollar Pair Is Trying To Increase

InstaForex Analysis InstaForex Analysis 06.12.2022 08:04
By the end of Monday the dollar index gained 0.78%, oil prices fell by 3.66% and the Australian dollar fell by 1.37%. The price overcame the support at 0.6730 and now it is trying to increase in today's Asian session, but without losing the opportunity to settle below the level. The price can reach the target support at 0.6642, in case it overcomes yesterday's low at 0.6688, in which case the signal line of the Marlin oscillator will break through the zero line and move into the territory of the downtrend. Divergence continues to exert its effect on the price. On the four-hour chart, the price settled under the MACD line and under the level of 0.6730. Also, the Marlin oscillator settled in the negative territory. By cumulative circumstances of both charts, the bears have advantages. We wait for things to progress and AUD to reach the target support at 0.6642. Relevance up to 03:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329030
The GBP/USD Pair Started A New Round Of Downward Correction

The GBP/USD Pair's Price Should Go Below Yesterday's Low

InstaForex Analysis InstaForex Analysis 06.12.2022 08:06
Under the general pressure of the market, the British pound declined by 100 points on Monday. It reached support at 1.2200. Now the price tries to break away from it. If it succeeds in rising then it could reach the target resistance at 1.2410. The Marlin oscillator falls to the lower limit of its own range, which slightly increases the bears' probability of winning. The price should settle under 1.2200 in order to fall further starting tomorrow. The nearest support at 1.1940 will become the target. On the four-hour chart, the price stopped decreasing at the MACD indicator line. Here, we see that in order for it to fall further, the price should settle not under 1.2200, but under the MACD line. That means that the price should go below yesterday's low at 1.2161. The Marlin oscillator managed to linger in the negative territory. It will become clear whether it will be able to develop its success, pulling the price down, closer to the afternoon. Relevance up to 03:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329032
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Euro To US Dollar Situation Becomes More Complicated

InstaForex Analysis InstaForex Analysis 06.12.2022 08:09
Yesterday's strong data on factory orders and business activity in the US was able to stop the development of risk appetite. October Factory Orders were up 1% in October, November ISM Services PMI rose from 54.4 to 56.5. The dollar index was up 0.78%, the S&P 500 -1.79%, and oil -3.66% (WTI). The euro fell a bit short of hitting the target range of 1.0615/42. Consequently, the situation becomes more complicated - will it reach the range once a complex structure of the divergence with the Marlin oscillator is completed, or has the price reversal already taken place yesterday? Let's look at the weekly chart. Here the price is above the MACD indicator line (1.0433). If the current week closes below the MACD line, then it is considered false when it rises above this line, but if it actually closes above the line, then EUR will rise further. The Federal Reserve will hold a meeting next week. There are more signals from the committee regarding the continuation of a longer tight policy than what traders assume. As a consequence, the technical signals may be broken, and the euro may reverse after the price settles above any level. On the four-hour chart, the price reversed from the support of the MACD line. The price can "run away" from this line and work out the range of 1.0615/42. Marlin's oscillator shows the intention to reverse from the zero line upwards. But if the price does intend to reverse into a medium-term decline, it needs to overcome two supports: 1.0470 and 1.0433. Relevance up to 03:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329034
The Price Of EUR/USD Pair Will Develop Sideways Movement

The EUR/USD Pair Will Continue Its Strengthening Up

InstaForex Analysis InstaForex Analysis 06.12.2022 08:13
If we look at the daily chart for the main EUR/USD currency pair, it can be seen that yesterday's PL Dot was right at the close level of this area, making today's Bar under upward pressure from yesterday's low area of 1.0480 where Fiber will be pushed to go above the Projected High level. today at the level of 1.0548 if this level is broken then it is very likely that EUR/USD will continue its strengthening up to the Halo/Sacrosanct level at 1.0595 but due to the formation of deviations between price movements and the Awesome Oscillator indicator and yesterday's bar forming a Bearish Divergent bar (Wiseman.1 ) then Fiber also has the potential to be corrected downwards but as long as it does not close beyond the Block 1.0480 level, the Bull scenario on EUR/USD today will still run   Relevance up to 04:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/115201
Hungary's Central Bank to Maintain Base Rate at 13%, Eyes on Effective Rate Amid Forint's Performance

The EUR/GBP Pair Will Be Corrected Downwards For A Moment

InstaForex Analysis InstaForex Analysis 06.12.2022 08:16
With the emergence of deviation in the price movements of the EUR/GBP cross currency pair with the CCI indicator and the formation of the Bullish 123 pattern followed by the appearance of Ross Hook (RH) on the 4-hour chart, practically EUR/GBP has the potential to appreciate upwards to the 0.8634 level as a target. especially and if the momentum and volatility are sufficiently supportive, it is possible that the 0.8675 level will be the next target to be tested but before that happens it seems that EUR/GBP will be corrected downwards for a moment where the level to be tested is the Bullish Fair Value Gap area and/or or the Bullish Orderblock level is at the 0.8579 level but if the correction to fall below it still continues to break below the 0.8569 level then it is very likely that the Bull scenario described earlier will cancel and become invalid by itself. Relevance up to 04:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/115199
The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

The British Pound (GBP) Is Expected To Move Down

InstaForex Analysis InstaForex Analysis 06.12.2022 08:18
Early in the European session, the British pound is trading around 1.2201, below the 21 SMA (1.2220), and below +1/8 Murray (1.2207). Since November 11, the British pound has been trading within an uptrend channel and it is likely to resume its bullish cycle in the next few hours, only if it consolidates above 1.2220. We have seen a big move higher in the last few weeks, reaching the top of the bullish channel around 1.2345. Yesterday in the American session, we saw a drop in the GBP/USD pair from 1.2345 towards 1.2160. In the last few hours, we have seen a technical correction and it could continue if the price settles below 1.22. The British pound is expected to drop below 1.2198 in the coming hours and could be a signal to sell, with targets at the bottom of the uptrend channel around the psychological level of 1.20. To the upside, we expect the pound to settle above 1.2220, then it could give us a signal to buy with targets at 1.23. In case of a break through the high of 1.2343, the price could reach the area of 1.2380 which represents the top of the bullish channel. If the pound continues to rise, it could reach the psychological level of 1.25 and even reach +2/8 Murray located at 1.2695. The eagle indicator provides a negative signal. Therefore, we should expect the pound to trade below 1.2220 to sell with targets at 1.20 and the 200 EMA located at 1.1803.     Relevance up to 05:00 2022-12-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/303809
Analysis Of The Euro To US Dollar Pair Situation - 30.01.2023

The EUR/USD Pair Tried To Start A Bearish Correction

InstaForex Analysis InstaForex Analysis 06.12.2022 08:22
M5 chart of EUR/USD Trading EUR/USD was quite inconvenient on Monday. Last week we repeatedly mentioned that the euro's movements made no sense and that its inconsistency with the fundamental and macroeconomic background contradicts any logic. On Monday, however, the pair tried to match the published reports, but EUR/USD radically changed its direction several times because of such reports. Nonetheless, it still entered a correction. We can mark out the retail sales in the European Union as well as the ISM service sector index in the US out of all the reports released on Monday. These reports triggered the most apparent market reactions. The retail sales report turned out to be too weak, so the euro was falling. The ISM index was surprisingly strong and so the dollar rose. So all in all, by the end of the day we can say that the dollar grew for the right reasons. We can only hope that from now on the pair would move according to the news. As for trading signals, the situation was not the worst, but it certainly was not the best either. Basically, there were only three trading signals, all three - near the level of 1.0579, and all three turned out to be false. In the first case, the pair passed the sufficient distance to the downside, so traders set the Stop Loss to Breakeven, which was used to close the deal. In the second case, the buy signal was obviously false, and the deal was closed with some loss, when the price was lower than 1.0579. The third signal could not be used, though it could bring some profit to traders. COT report COT reports on EUR/USD have puzzled traders through most of 2022. Half of the year, COT reports indicated clear-cut bullish sentiment among large market makers while the single European currency was extending its weakness. For a few months, the reports showed a bearish sentiment and the euro was also trading lower. Now sentiment of non-commercial traders is turning bullish again, and the euro is rising, but it is a rather high net position that allows us to assume that the upward movement will end soon. During the reporting week, the number of Buy contracts for the Non-commercial group increased by 4,700, and the number of short contracts rose by 4,600. Accordingly, the net position grew by about 100 contracts. The European currency has been rising in recent weeks, which is already in line with the readings of the COT reports. At the same time, we believe that the US currency may still regain its footing amid the same geopolitics or due to the lack of fundamentals for further growth of the euro. The green and red lines of the first indicator moved far away from each other, which could mean the end of the uptrend (!!!) (which, in fact, never happened). The number of BUY contracts is higher than the number of SELL contracts for non-commercial traders by 133,000. Thus, the net position of the "non-commercial" group may continue to rise further, but this may not trigger a similar rise in the euro. If we look at the overall numbers of open long and short contracts for all categories of traders, there are 33,000 more sell contracts (755,000 vs. 723,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD tried to start a bearish correction, which I have been waiting for the past few weeks. However, the price is still above the Ichimoku indicator, so it might end up with a pullback. There will not be much news and reports this week, so traders are left on their own again and their sentiment will not be influenced by macroeconomics or fundamentals. On Tuesday, the pair may trade at the following levels: 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as Senkou Span B (1.0359) and Kijun Sen (1.0441). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 6, there are no important reports or events in the EU and the US. Nevertheless, we expect a correction or at least a trend during the day. As usual, the strongest movement might come during the US trading session. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329022
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The British Pound (GBP) Indicated Increasing Bearish Sentiment

InstaForex Analysis InstaForex Analysis 06.12.2022 08:26
M5 chart of GBP/USD GBP/USD was also trading lower on Monday, but this is on the one-hour chart. For example, on the 4-hour chart, all of Monday's decline appears like a slight pullback. That is why this fall does not look like the correction that I have been waiting for two weeks. As it often happens lately, the most active movements were at the US trading session. That is when the U.S. dollar showed the biggest growth, and this time it was supported by macroeconomic statistics, especially by the ISM U.S. service sector activity report. Finally traders worked off the report, which was in favor of the dollar, instead of ignoring it. But at the same time, it is too early to make conclusions yet. The pair might resume its unsubstantiated rally today, like it did on Friday after the initial reaction to the NonFarm report. That is why I keep waiting for a strong bearish correction, but the pair should cross the Senkou Span B and the Kijun-Sen lines in order for it to have some technical reasons. Also, I believe that the dollar is oversold and the pound is overbought anyway. Monday's trading signals were not the best. The first one was not bad (near 1.2342), after it was formed, the price went down to 1.2259 and rebounded from it with perfect accuracy. Therefore, traders had to close the shorts with about 50 pips profit. Then, four signals followed at once near 1.2259, and the first three turned out to be false. If at the first signal it was possible to set the Stop Loss to Breakeven, at the second one - you couldn't, and the third one should not have been used. As well as the most recent sell signal near 1.2185, which was formed too late. COT report The latest COT report on the British pound indicated increasing bearish sentiment for the second consecutive week. In the given period, the non-commercial group closed 5,000 BUY contracts and 4,000 SELL contracts. Thus, the net position of non-commercial traders decreased by 1,000. The net position is growing during the last months, but the sentiment of the big players is still bearish, and the GBP is rising against the USD, but it is very difficult to answer the question why it does so. We don't exclude the option in which the pound could sharply fall in the near future. Take note that both major pairs are moving almost equally now, but the euro's net position is positive and even implies that the upward momentum will end soon, while it is negative for the pound... The non-commercial group now has a total of 62,000 short positions and 28,500 long positions. The difference, as you can see, is very large. As for the total number of open Buy and Sell, the bulls have the advantage by 13,000. We are still skeptical about the British currency's growth in the long term, although there are technical reasons for it, but the foundation or geopolitics obviously do not imply such a solid strengthening of the pound. H1 chart of GBP/USD The pair continues to trade very high on the one-hour chart, but still tries to start a bearish correction. The pair has been rising for several weeks for no reason, yesterday is hardly indicative, although, the dollar did have reasons to rise on Monday. But if it strengthens today (when the calendar of events will be empty), then it will be possible to draw louder conclusions that the market was saturated with long positions on the pound and is now ready for shorts. On Tuesday, the pair may trade at the following levels: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259, 1.2342, 1.2429-1.2458. The Senkou Span B (1.1959) and Kijun Sen (1.2122) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Tuesday, there are no important reports or events in the UK and the US. It would be nice if traders find any reason to sell the pair today. Because then it will be possible to consider that the bearish correction, which we were waiting for a long time, has started. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group Relevance up to 01:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329024
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

The Pace Of Interest Rate Increases Will Be Slowed Down In The Near Future

InstaForex Analysis InstaForex Analysis 06.12.2022 08:28
After a string of similarly bizarre days, Monday was very strange. Many people are already perplexed as to why the euro and the pound continue to rise even on days without justification. If almost all factors point in this direction, why isn't the creation of a correction set of waves for both instruments started right away? If there is no explanation, why is the demand for US currency decreasing almost daily? Remember that last week, although he said nothing fundamentally novel in his speech, Jerome Powell brought down the dollar's value, demonstrating the validity of these questions. The dollar rose for an hour before falling again, making Friday's payrolls appear paradoxical. Additionally, nonfarm payrolls revealed that everything is fine with the US labor market. There is no need to worry about a recession, and the Fed can keep raising rates to the currently planned level of 5%. What do we ultimately have? The ECB may increase the interest rate by 2% or 2.5%, but there is little difference between those increases. The Fed will increase interest rates by at least 1%, and the Bank of England and ECB will likely do so. All three central banks will increase interest rates to slow inflation, at least for the foreseeable future. The pace of interest rate increases will be slowed down in the near future by all three central banks following the same trend. The situation is unchanged, but demand for US dollars is steadily declining while demand for the euro and the pound is rising. When it was widely believed in the market a few weeks ago that only the Fed would slow the tightening of monetary policy in December, more and more analysts are now inclined to think that the Bank of England and the ECB will do the same. All three banks are now anticipated to increase rates by 50 basis points. In this scenario, there will be even fewer factors supporting the rise of the euro and pound, as one of the few causes of the dollar's decline at the moment could be characterized as the highest likelihood of convergence with the most abrasive PEPP tightening strategy. The euro and the pound will lose this advantage if the ECB and the Bank of England do not raise their rates by 75 basis points. Even without the abovementioned condition, I have long anticipated a quote decline. With the circumstances mentioned above, it ought to be even faster and stronger. The further both instruments go, the more painful and powerful their eventual fall will be. The market may trade in very challenging ways to comprehend, but eventually, everything returns to equilibrium. Additionally, the European and British currencies might not find this balance appealing. I conclude that the upward trend section's construction is complete and has increased complexity to five waves. As a result, I suggest making sales with targets close to the estimated 0.9994 level, or 323.6% Fibonacci. The likelihood of this scenario is increasing, and there is a chance that the upward portion of the trend will become more complicated and take on an extended form. The construction of a new downward trend segment is predicated on the wave pattern of the pound/dollar instrument. Since the wave marking permits the current structure of a downward trend section, I cannot advise purchasing the instrument. With targets around the 1.1707 mark, or 161.8% Fibonacci, sales are now more accurate. The wave e, however, can evolve into an even longer form Relevance up to 06:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329040
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

Analysis Of The Euro To Japanese Yen Pair (EUR/JPY)

InstaForex Analysis InstaForex Analysis 06.12.2022 08:34
EUR/JPY has now broken nicely below the ending diagonal support line calling for a continuation lower to the origin of the ending diagonal at 132.66. Short-term we expect a re-test of the broken support line near 142.57. The former support line should now act as resistance. Once the temporary setback is complete, renewed downside pressure will push the price towards the 132.66 target. On the way down to 132.66, support is seen near 138.46 and 134.89. Relevance up to 07:00 2022-12-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/303817
Inflation slowdown may let Reserve Bank of Australia go for 50bp or inaction

Reserve Bank of Australia went for 25bp rate hike. Fed Funds futures hint a 5% peak rate next year

ING Economics ING Economics 06.12.2022 08:55
The Reserve Bank of Australia hiked by another 25bp and we expect 50bp of further tightening in 2023 to reach a 3.60% peak rate. Implications for AUD are limited, however, and we see downside risks as Chinese sentiment falters. Markets are back to pricing in a 5.00% peak Fed rate, which is helping the USD recover. EUR/USD may stabilise before another leg lower The Reserve Bank of Australia has raised the official cash rate to 3.1% USD: Recovery mode The risk-on wave generated by easing Covid restrictions in China did not extend beyond Asian stock markets yesterday, and risk assets were mostly weaker after a surprise rise in US ISM service cast doubts on dovish Fed bets, and Fed Funds futures are once again pricing in a 5.00% peak rate in 2023. Risk sentiment has remained fragile this morning. The dollar has recovered some ground, mostly against the Japanese yen (which is the most sensitive to the Fed factor) and some high-beta currencies. We think USD/JPY could climb back above 140.00 in the run-up to the Federal Open Market Committee (FOMC) meeting next week, as markets take stock of strong jobs data and weigh a more hawkish outcome than previously expected. Elsewhere, USD/CNY is climbing back to the key 7.00 level, and we expect a break higher sooner than later. We discussed yesterday how the dollar had fallen back to a neutral position versus G10 currencies. This means that a further drop in the dollar will need to see investors make a conviction call on an extended dollar bear trend as the room for long-squeezing has now shrunk significantly. We think such a call would be premature and expect a dollar recovery into year-end. Today, the US calendar is very light (only the trade balance for October to highlight) and there are no Fed speakers due to the pre-FOMC blackout period. We could see reduced FX volatility today, and the dollar may cement recent gains.   Francesco Pesole EUR: Downside risks prevail EUR/USD has not moved dramatically compared to other G10 crosses despite the dollar rebound. The pair could hover around 1.0450/1.0500 today, but is mostly facing downside risks in our view. The freshly imposed EU embargo on Russian seaborne crude and the $60 per barrel price cap may start to show their effects on the energy market soon. When adding an expected drop in temperatures in Europe from this week, the risks of a new rally in energy prices are non-negligible, and the euro is highly exposed to such risks. There are no major data releases to flag in the eurozone today and no scheduled ECB speakers. Francesco Pesole Read next: Vodafone Shares Fell By 45%, Apple May Be Moving Production Outside Of China | FXMAG.COM AUD: Another 25bp hike by the RBA The Reserve Bank of Australia (RBA) hiked rates by another 25bp to 3.10% this morning. Since the RBA has policy meetings approximately every month, it can continue to hold a very straightforward meeting-by-meeting, data-dependent approach, and there was unsurprisingly very little forward guidance in today’s statement except for the vague reference to more tightening ahead.   We currently forecast the RBA peak rate at 3.60%, and a 25bp rate hike at the next meeting (7 February). Tomorrow morning, Australian GDP figures for the third quarter will be released and should show strong growth (consensus 6.3% year-on-year). However, jobs and CPI releases later this month and in January will be more important for the RBA. AUD/USD reaction to the RBA hike was positive but quite contained, and the pair remains strictly tied to global risk dynamics and especially market sentiment on China. It does appear that optimism related to easier Covid restrictions in China is quickly evaporating, and AUD may soon end at the bottom of the G10 scorecard. We target 0.66 for both year-end and the first quarter of 2023. Francesco Pesole CEE: Another delay in EU-Hungary story The EU-Hungary story changes every day. The agenda for today's Ecofin meeting was changed at the last minute and it seems that today there will only be a discussion on the subject but no vote. This confirms earlier speculation that the lack of time between the publication of the European Commission's recommendations and today's Ecofin meeting would require an extraordinary meeting later. Last week the EC recommended to the EU Council to suspend 65% of the EU funds on three operating programmes for 2021-27 for Hungary, amounting to €7.5bn. Regarding the recovery funds, the EC approved Hungary's recovery plan but said that actual disbursement of the funds will take place only after Hungary met 27 "super milestones" by the end of the first quarter of next year. So what is the schedule for the coming days? We are likely to hear new headlines today that will give us guidance on what to expect next Monday, when an additional Ecofin meeting is due to take place, and on Thursday and Friday next week, when the last European Council meeting for this year is scheduled, which should be the final deadline of this story. On the FX side, in the CEE region, the weaker euro against the US dollar was probably the main reason behind the weakness, but still, the Hungarian forint led yesterday's losses. Presumably, another investor lost patience given another delay of a decision in this story. However, the turnaround in sentiment in global markets does not imply a favourable week for the region. Only retail sales in Romania and the Czech Republic are on the calendar today, but the focus will once again be on the Hungarian forint and the Polish zloty. Frantisek Taborsky Read this article on THINK TagsReserve Bank of Australia Dollar CEE Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Disappointing German March macro data increase risk of technical recession

Germany: Industrial orders rose 0.8% month-on-month. Ifo: More than 50% of industrial companies affected by supply chain issues

ING Economics ING Economics 06.12.2022 09:17
Industrial orders rebounded slightly in October, on the back of strong bulk orders. However, Germany's descent into an industrial recession continues German industrial orders rebounded somewhat in October but were unable to reverse the negative trend. After the sharp fall in August and September, industrial orders increased by a meagre 0.8% month-on-month in October, from -2.9% MoM in September. Excluding bulk orders, industrial orders would have dropped by 1.2%. Over the year, industrial orders were down by almost 3.2%. Since the start of the year, German order books have shrunk by almost 15% and have fallen in seven out of ten months. Read next: Reserve Bank of Australia went for 25bp rate hike. Fed Funds futures hint a 5% peak rate next year| FXMAG.COM Despite the ongoing order deflation, order books are still filled and the reported backlog is high. Supply chain frictions are still disrupting industrial production. According to a recent Ifo survey, more than half of all German industrial companies are still affected by supply chain problems. In recent weeks, there had been some encouraging signals from the German and European economies, suggesting that the recession might be less severe than many had thought. The jury is obviously still out but the collapse in German industrial orders is one important signal that shows that the long slide into (industrial) recession continues. Read this article on THINK TagsIndustrial propduction Germany Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Saxo Bank Podcast: The Upcoming Bank Of Japan Meeting, A Look At Crude Oil, Copper And More

The Pressure On The JPY And The Japanese Financial System Mounts Again

Saxo Bank Saxo Bank 06.12.2022 09:34
Summary:  "Japan’s real GDP drops by 8 percent." - John J. Hardy. Japan mobilised hundreds of billions of USD in its currency reserves in 2020 to defend the Bank of Japan’s (BoJ) unmoved monetary policy and the JPY itself as the BoJ refused to hike the policy rate from -0.1 percent or to lift the yield cap on 10-year Japanese government bonds at 0.25 percent. As 2022 rolls into 2023, the pressure on the JPY and the Japanese financial system mounts again on the global liquidity crisis set in motion by the vicious Fed policy tightening and higher US treasury yields.   Initially, the BoJ and Ministry of Finance deal with the situation by slowing and then halting currency intervention after recognising the existential threat to the country’s finances after burning through more than half of central bank reserves. But as USDJPY rises through 160 and 170 and the public outcry against soaring inflation reaches fever pitch, they know that the crisis requires bold new action. With USDJPY soaring beyond 180, the government and central bank swing into motion.   First, they declare a floor on the JPY at 200 in USDJPY, announcing that this will only be a temporary action of unknown duration to allow for a reset of the Japanese financial system. That reset includes the BoJ moving to explicitly monetise all  its debt holdings, erasing them from existence. QE with monetization is extended to further lower the burden of Japan’s public debt, but with a pre-set taper plan over the next 18 months. The move puts the public debt on course to fall to 100 percent of GDP at the end of the BoJ operations, less than half its starting point. The BoJ policy rate is then hiked to 1.00 percent and all yield-curve control is lifted, which allows the 10-year rate to jump to 2.00 percent.   Banks are recapitalised as needed to avoid insolvency and tax incentives for repatriating the enormous Japanese savings held abroad see trillions of yen returning to Japanese shores, also as Japanese exports continue to boom. Japan’s real GDP drops by 8 percent on reduced purchasing power even as nominal GDP rises 5 percent due to cost of living increases, but the reset puts Japan back on a stable path and establishes a tempting crisis-response model for a similar crisis inevitably set to hit Europe and even the US eventually.   Market impact: USDJPY trades to 200 but is well on its way lower by the end of the year.    Source: Japan pegs USDJPY at 200 - Saxo Outrageous Prediction | Saxo Group (home.saxo)
Rates Spark: Action at Both Ends of the Curve - US 10yr Treasury Yield and European Rates

The World Bank's Outlook On The Indian Economy

TeleTrade Comments TeleTrade Comments 06.12.2022 10:01
An official at the World Bank offers his outlook on the Indian economy and the Rupee. Key quotes "India well placed to navigate global headwinds." "The impact of global headwinds on India is relatively lower compared to other emerging economies." "Have no concerns about India's debt sustainability at this stage." "An unexpected hike by the US fed could lead to rupee depreciation, rise in retail inflation in India." Also read: USD/INR Price News: Indian Rupee renews monthly low past 82.00 with eyes on RBI
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The BOJ Policymaker’s Hesitance Favors The GBP/JPY Buyers

TeleTrade Comments TeleTrade Comments 06.12.2022 10:03
GBP/JPY picks up bids to challenge six-week-old resistance. Cautious optimism underpins recovery moves amid sluggish session. BOE hawks, indecision surrounding BOJ’s next move favor pair buyers. GBP/JPY prints 0.30% intraday gains as it pokes a multi-day-old resistance line surrounding $167.60 heading into Tuesday’s European session. In doing so, the cross-currency pair cheers the market’s risk-on mood, as well as sluggish US Treasury bond yields and the indecision over the Bank of Japan’s (BOJ) next moves. Reuters quotes Takeo Hoshi, an academic with close ties to incumbent central bank policymakers, to mention that the Bank of Japan (BoJ) could do away with its 10-year Japanese government bond (JGB) yield cap in 2023 on increasing odds that inflation and wages will exceed expectations. Earlier in the day, BOJ’s Kuroda mentioned that Japan has not achieved stable 2% inflation accompanied by wage rises. However, the policymaker also stated, “Once 2% inflation target is consistently met, will consider exiting ultra-loose policy.” Hence, the BOJ policymaker’s hesitance in accepting tighter monetary policies favors the GBP/JPY buyers. The same could be linked to the recently sluggish US Treasury yields and mildly bid S&P 500 Futures. It’s worth noting that the British Retail Consortium’s (BRC) Like-For-Like Retail Sales jumped 4.1% YoY in November versus 1.2% prior. Even so, Reuters said, “British consumer spending ticked up last month at a rate that greatly lagged behind inflation, according to surveys on Tuesday that underscored the pressure on household budgets ahead of the Christmas holidays.” On the contrary, the final readings of the UK’s November month S&P Global/CIPS Composite PMI eased to 48.2 versus 48.3 initial forecasts whereas the S&P Global/CIPS Services PMI confirmed the 48.8 flash estimates. Amid these plays, US stock futures print mild gains and the Treasury bond yields also reverse the early Asian session declines. Moving on, headlines surrounding the BOJ’s next move and the BOE’s optimism could entertain the GBP/JPY traders amid a light calendar. Technical analysis GBP/JPY justifies the last Friday’s rebound from the 100-DMA, around 164.40 by the press time, to lure the bulls. Even so, a downward-sloping resistance line from October 10, close to 167.60 at the latest, restricts the short-term upside of the pair. That said, steady RSI (14) and sluggish MACD signals, mostly in the red, keep the pair sellers hopeful. GBP/JPY: Daily chart Trend: Further weakness expected
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Crude Oil Prices Edge High And Acts As A Headwind For The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 06.12.2022 10:08
USD/CAD struggles for a firm intraday direction and remains confined in a range on Tuesday. A modest uptick in crude oil prices underpins the Loonie and acts as a headwind for the pair. The downside remains cushioned amid the emergence of some buying around the US Dollar. The USD/CAD pair oscillates in a narrow band on Tuesday and consolidates the overnight strong rally of around 220 pips from sub-1.3400 levels. The pair holds steady near a one-week high through the early European session, with bulls now awaiting a sustained strength beyond the 1.3600 round-figure mark. Crude oil prices edge high and recover a part of the previous day's slump of nearly 6.5% amid hopes for a recovery in fuel demand amid the easing of COVID-19 curbs in China. This, in turn, underpins the commodity-linked Loonie and acts as a headwind for the USD/CAD pair. The downside, however, remains cushioned amid the emergence of some US Dollar buying, bolstered by bets that the Federal Reserve may raise interest rates more than projected. The Institute for Supply Management (ISM) reported that the US Service PMI unexpectedly increased to 56.5 in November from 54.4 in the previous month. This comes on the back of the upbeat US monthly jobs report released on Friday and suggests that the economy remained resilient despite rising borrowing costs. The incoming strong US macro data validates Fed Chair Jerome Powell's forecast that the peak interest rate will be higher than expected. The mixed fundamental backdrop, meanwhile, warrants some caution before placing aggressive directional bets around the USD/CAD pair. Traders might also prefer to move to the sidelines and await the latest monetary policy update by the Bank of Canada (BoC) on Wednesday. In the meantime, traders on Tuesday might take cues from the release of Trade Balance data from the US and Canada. Apart from this, the USD and oil price dynamics should provide some impetus.
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

Positive US Dollar Tracing Acts As A Headwind For The NZD/USD Pair

TeleTrade Comments TeleTrade Comments 06.12.2022 10:10
NZD/USD fails to preserve its modest intraday gains amid some follow-through USD buying. Bets that the Fed will continue to raise interest rates offer some support to the greenback. The optimism over the easing of restrictions in China limits losses for the risk-sensitive Kiwi. The NZD/USD pair attracts some intraday selling near the 0.6355 area on Tuesday and drops to the lower end of its daily range during the early European session. The pair is currently trading around the 0.6300 mark, which if broken decisively will set the stage for an extension of the overnight sharp pullback from the highest level since mid-August. The US Dollar gains some positive traction and looks to build on the overnight solid recovery move from over a five-month low, which, in turn, acts as a headwind for the NZD/USD pair. Against the backdrop of Friday's upbeat US monthly jobs report, the stronger US ISM Services PMI print on Monday suggested that the economy remained resilient despite rising borrowing costs. This fueled speculations that the Fed may lift interest rates more than projected and is seen as a key factor acting as a tailwind for the greenback. Market participants, however, seem convinced that the US central bank could scale back the pace of its rate-hiking cycle and have been pricing in a relatively smaller 50 bps lift-off in December. Apart from this, the latest optimism over the easing of COVID-19 curbs in China keeps a lid on the safe-haven buck and helps limit the downside for the NZD/USD pair, at least for the time being. The mixed fundamental backdrop warrants some caution for aggressive bearish traders and before confirming that the major has topped out. Tuesday's relatively thin US economic docket, featuring the release of Trade Balance data, might do little to provide any impetus to the NZD/USD pair. That said, the US Treasury bond yields, along with the market risk sentiment, could influence the USD price dynamics and produce short-term opportunities around the major.
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

The US Dollar Strengthened As A Result Of The Hawkish Fed Rectification

Swissquote Bank Swissquote Bank 06.12.2022 10:21
Stocks fell and the US dollar strengthened on Monday on a stronger than expected ISM services read in the US, which came in above expectations, and hinted that the economic activity, at least in the US services sector continues growing, and growing un-ideally faster-than-expected despite the Federal Reserve’s (Fed) efforts to cool it down. The Aussie In the FX, the Aussie was slightly better bid after the Reserve Bank of Australia (RBA) raised its rates by another 25bp today, and took the rates to levels last seen a decade ago. EUR/USD and GBP/USD But elsewhere, the US dollar strengthened as a result of the hawkish Fed rectification. The dollar index first eased to a fresh low since June, then rebounded. It has way to recover above its 200-DMA, which may mean that some majors, including EURUSD and Cable could return below their 200-DMA as well. Yet, even if we see rebounds in the US dollar, the medium to long term direction of the dollar will likely be the south in the coming months. The EURUSD could recover to 1.10, Cable to 1.30. USD/JPY More stretched… Vontobel sees the USDJPY’s fair value at 100, and Standard Chartered predict Bitcoin could fall another 70%, and spur a 30% rally in gold! Watch the full episode to find out more! 0:00 Intro 0:25 Fed hawks are back 3:07 S&P500 could further fall 4:40 Selling USD rallies sounds like a plan 8:22 A 70% fall in Bitcoin could spur a 30% rally in gold?! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #economic #data #Fed #expectations #USD #EUR #GBP #JPY #XAU #Bitcoin #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

The Reserve Bank Of Australia Raised The Interest Rate At Its Last Meeting

Conotoxia Comments Conotoxia Comments 06.12.2022 10:26
The Bank of Australia seems to be a fairly conservative central bank, which does not surprise with big interest rate hikes, but raises them systematically. This time was no different at the last meeting of the year. The Reserve Bank of Australia raised the interest rate by 25 basis points to 3.1% at its last meeting in 2022, matching market forecasts. The move marked the eighth consecutive rate hike, raising borrowing costs to levels not seen since November 2012, with the central bank announcing further increases as inflation in Australia is too high, tradingeconomics reports. The widely expected decision means the central bank has raised interest rates since May to 3 percentage points, the sharpest annual tightening of monetary policy since 1989. The committee reiterated that the interest rate is not a predetermined rate, as the size and timing of future increases will continue to be determined by incoming data. The council added that inflation in Australia will peak at around 8% this year, before weakening in 2023 and reaching just above 3% in 2024. Policymakers have reaffirmed their commitment to bringing inflation to target and will do whatever is necessary to achieve this. Source: Conotoxia MT5, AUDUSD, Daily Australian dollar exchange rate after the decision From mid-October to today, the AUD has strengthened against the USD by almost 9%. Today, after the decision, the AUDUSD exchange rate rose to 0.6723, which may represent an increase of 0.4% since the beginning of the day. Thus, higher and higher peaks and higher and higher lows could be observed on the chart of the described currency pair, which may be characteristic of a potential uptrend. From the point of view of technical analysis, only overcoming the vicinity of 0.6640 could lead to the formation of a new low within the recent upward structure. Interest rate hikes the cause of recession? Fitch thinks so As reported by BBN, Fitch Ratings once again lowered its global economic growth forecast for next year, citing the intensification of interest rate hikes by central banks, as well as the worsening trend in China's real estate market. Fitch lowered its growth forecast by 0.3 percentage points to 1.4% for 2023, while seeing the U.S. economy with slight GDP growth. Chinese growth, on the other hand, is expected to rise 2.8% this year and 4.1% in 2023. The eurozone economy is also expected to grow slightly, thanks to the easing of the energy crisis. The rating agency also said that central banks in the US and Europe will continue to raise interest rates above initial estimates. At the same time, a recession could be expected in the Eurozone and the UK this year, and in the US in the second half of 2023, the agency added. Source: Conotoxia MT5, US500, Weekly Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Bank Of Canada: A 50bp Rate Hike Would Be Received As A Hawkish Surprise

ING Economics ING Economics 06.12.2022 11:52
Elevated inflation, robust economic activity and a super-tight jobs market argue for another 50bp rate hike. However, recession fears are rising and policy is in restrictive territory, meaning that the top in rates looks close. Markets are pricing in only 32bp at the moment, so a 50bp would likely send CAD higher, but the FX reaction should be short-lived. The Bank of Canada hiked rates by 100bp in July with more expected by year-end A very close call The Bank of Canada has raised interest rates a cumulative 350bp since the first move in early March and we look for a further 50bp hike on Wednesday. 3Q GDP came in at 2.9% annualized, nearly double the consensus forecast rate, while inflation at 6.9% continues to run at more than three times the 2% target. Then we had last Friday’s 108,300 increase in Canadian employment, meaning that there are now 523,000 more Canadians in work than there were before the pandemic struck in February 2020. Inflation is lower in Canada than in the US Source: Refinitiv, ING   At its latest meeting the BoC acknowledged that some effects of tighter policy were being seen, citing softer housing while weak external demand is also impacting the Canadian economy. But with demand continuing to outstrip the economy’s supply capacity, inflation pressures show little sign of softening as quickly as the Bank of Canada would like. They also warned that “price pressures remain broadly based, with two-thirds of CPI components increasing more than 5% over the past year”. That story has not changed and with central banks globally warning that the risk of doing too little to fight inflation outweighs the risk of doing too much the BoC are likely to signal further tightening remains possible.   For now we expect a final 25bp rate hike in early 2023, but this is not a strong call. The housing market is particularly vulnerable, with the mortgage market structure meaning Canadians are more impacted by rising rates than American home owners. We are also seeing signs in Europe and the US that inflation is showing more signs of softening and if replicated in Canada this may argue against that final hike. FX: Not many long-term implications for CAD Markets are pricing in only 32bp for tomorrow’s BoC announcement, so a 50bp rate hike would be received as a hawkish surprise and likely trigger a CAD rally. However, we expect the post-meeting FX impact to be rather short-lived, as external factors remain more important for CAD. The recent fragility in risk sentiment shows that downside risks for all high-beta currencies remain elevated. At the same time, CAD is considerably less directly exposed to swings in China’s sentiment compared to many other pro-cyclical currencies. The tightening supply picture in the crude market does leave room for a recovery in prices and this should be a positive development for the loonie. We think USD/CAD could end the year around 1.37 as the USD strengthening is partly offset by a potential recovery in oil prices.  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The AUD/USD Pair’s Downside Remains Off The Table

The RBA Is Likely To Resume Its Rate Hikes In February

Kenny Fisher Kenny Fisher 06.12.2022 14:12
The Australian dollar is in positive territory on Tuesday, after sustaining losses of 1.4% a day earlier. In European trade, AUD/USD is trading at 0.6721, up 0.35%. RBA raises cash rate by 25 bp The Reserve Bank of Australia lifted interest rates by 25 basis points, bringing the cash rate to 3.1%. This is the highest the cash rate has been since 2012, and there was some speculation that the RBA might take a pause from raising rates. One can also make the argument that with the next rate meeting not until February 7th, there will anyway be a “default pause” in January. As the move was widely expected, the Australian dollar has had a muted reaction to the move. There wasn’t much for investors to glean from Philip Lowe’s rate statement, which was almost identical to the November statement. Lowe noted that the RBA expects to increase rates, but “is not on a pre-set course” and rate decisions would be data-dependent. This last point may seem obvious, but events such as consumer spending, employment and inflation will be key drivers which determine rate policy in the early part of 2023. There is a great deal of uncertainty as to the terminal rate, which forecasts ranging from 3.3% all the way to 3.8%. What is clear is that the RBA is likely to resume its rate hikes in February, barring a remarkable decline in inflation. The markets will have to quickly shift attention from the RBA to GDP, which will be released on Wednesday. GDP for Q3 is expected to slow to 0.7%, down from 0.9%. A reading that is wide of the mark could result in some volatility from AUD/USD.   AUD/USD Technical AUD/USD faces resistance at 0.6760 and 0.6878 There is support at 0.6676 and 0.6558 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Analysis Of Crude Oil Futures, WTI Prices Recorded A Slight Decline

Saxo Bank Podcast: Supply Worries Over The Russian Oil Price Cap And More

Saxo Bank Saxo Bank 06.12.2022 14:19
Summary:  Today we are announcing our newly released 2023 Outrageous Predictions highlighting improbable, but not impossible, events that could really shake the markets. We discuss the reversal in S&P 500 futures to the big 4,000 level driven by a surprise beat on ISM Services Index yesterday suggesting that the US economy is reaccelerating again. The US yield move higher yesterday is also setting the stage for our attention on USDJPY in today's FX focus. On commodities our focus today is on the oil market given the demand uncertainties over China's reopening and supply worries over the Russian oil price cap. Today's pod features Peter Garnry on equities, Ole S. Hansen on commodities, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-dec-6-2022-06122022
Foreign exchange - Euro against US dollar - preview

Euro: Is There A Broader Correction To Be Feared? Aussie Got Little Support From The RBA Decision

Kamila Szypuła Kamila Szypuła 06.12.2022 14:10
The financial markets are already starting to slow down, and currently I have no major events on my calendar that could affect the movement of currency pairs. For now, the currency pairs are waiting for next week, where, among others, the Fed and the ECB will decide on interest rates. The EUR/USD, recorded a correction this morning. The British pound had exactly the same background as the euro. The RBA raised the spot rate by 25 basis points to a 10-year high. The yen did not get support from the Governor of the Bank of Japan Kuroda   EUR/USD - The overall picture of pray remains positive The EUR/USD exchange rate strengthened yesterday, recorded a correction this morning. Currently, the pair is trading around 1.0500. The overall picture of pray remains positive. Now the question for EUR/USD as the correction started yesterday is whether this is just a respite or is there a broader correction to be feared. Retail sales in Europe continue to fall. It came down to -2.7% in October, which is far worse than the expected. US Services PMI, Industry Orders and ISM Services PMI exceeded expectations. These reports added support to the US Dollar but contributed to the decline of the Euro/Dollar pair. The macroeconomic calendar is completely empty today, so market players have nothing to watch.     GBP/USD started a correction The GBP/USD pair also fell. It is currently trading around 1.2200. On Monday, the GBP/USD currency pair also started a correction. The British pound had exactly the same background as the euro, except for the retail sales report, which was only for the European Union. In addition, the neutral index of business activity was also published in the UK. There won't be many significant events in either the UK or the US this week. Yesterday, the US ISM services sector published a quite important business activity index, which led to the strengthening of the dollar. Therefore, the correction is justified.   AUD/USD Pair gets a lot of support Currently, the appreciation of AUD/USD is slightly decreasing. The US dollar continued its rebound on Tuesday morning against its main competitors in the foreign exchange market, but not against the Australian Dollar, which was supported by the RBA decision. The Reserve Bank of Australia raised rates for the eighth time as part of the current monetary policy tightening cycle, with an accompanying statement that was slightly less dovish than market participants expected. The Reserve Bank of Australia matched market forecasts by announcing a 25 basis point rate hike to 3.10%. The currency pair is not only supported by events in its economy but also by events in China. Australia and China cooperate economically, therefore its influence is visible and justified. So reports China will soon reduce its strict Zero-COVID policy seemed to support market optimism as well as AUD/USD bulls.   USD/JPY USD/JPY continued its gains in the Asian session, followed by a slight correction. Yesterday, the dollar posted its biggest daily gain against the yen since June. Bank of Japan Governor Kuroda didn't help the yen overnight with dovish comments about aiming for a sustained and stable 2% inflation target. Sources: dailyfx.com, investing.com
Canada: A 25bp rate hike is highly expected. BoC terminal rate is expected to hit 4.5%

Canada: A 25bp rate hike is highly expected. BoC terminal rate is expected to hit 4.5%

Kenny Fisher Kenny Fisher 06.12.2022 17:00
The Canadian dollar is slightly lower on Tuesday. In the European session, USD/CAD is trading at 1.3620, up 0.24%. What does the Bank of Canada have planned? The Bank of Canada has been aggressive in its tightening, including a whopping full-point hike in July, which brought the cash rate to 2.50%. The BoC has been gradually easing since then, raising rates by 75 bp and then 50 bp, bringing the cash rate to 3.75%. Will the trend continue on Wednesday? According to the markets, probably yes. There is a 72% chance of a 25 bp move, with a 28% likelihood of a second straight 50 bp move. Read next: To Simplify The Organization, Pepsico Will Lay Off Thousands Of Workers At The Headquarters In The USA | FXMAG.COM At the October meeting, there was a 50/50 split over whether the BoC would raise rates by 50 or 75 bp, and the Bank opted for the more conservative move. With the Canadian economy showing signs of slowing down amidst an uncertain global outlook, a modest 25-bp hike would make sense. Still, it must be remembered that inflation remains very high at 6.9% and the BoC has shown that it is willing to keep the rate pedal on the floor if necessary. If the BoC goes for the 50 bp increase, it would be viewed as a hawkish surprise which would likely boost the Canadian dollar. What can we expect from the BoC in 2023? The terminal rate is projected at around 4.5%, which would mean several more rate hikes early in the New Year. Of course, rate policy will be heavily dictated by key data such as employment, consumer spending and inflation. In addition, the BoC will want to keep pace (or close to it) with the Federal Reserve, which is widely expected to raise rates by 50 bp next week. USD/CAD Technical USD/CAD is testing resistance at 1.3619. Above, there is resistance at 1.3762 There is support at 1.3502 and 1.3359 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

It Was A Negative Close In The New York Stock Exchange For 2185 Securities

InstaForex Analysis InstaForex Analysis 07.12.2022 08:00
At the close in the New York Stock Exchange, the Dow Jones fell 1.03%, the S&P 500 fell 1.44%, and the NASDAQ Composite fell 2.00%.  Dow Jones  UnitedHealth Group Incorporated was the top performer among the Dow Jones index components in today's trading, up 4.28 points or 0.80% to close at 539.32. The Travelers Companies Inc rose 0.69% or 1.29 points to close at 188.50. Procter & Gamble Company rose 0.19 points or 0.13% to close at 149.28. The least gainers were Walt Disney Company shares, which lost 3.64 points or 3.79% to end the session at 92.29. Boeing Co was up 3.60% or 6.67 points to close at 178.43, while Chevron Corp was down 2.58% or 4.55 points to close at 172.01.  S&P 500  Among the S&P 500 index components gainers today were Textron Inc, which rose 5.25% to 73.57, Lumen Technologies Inc, which gained 3.85% to close at 5.40, and shares of Exelon Corporation, which rose 2.68% to end the session at 42.87. The least gainers were NRG Energy Inc, which shed 15.08% to close at 34.68. Shares of Enphase Energy Inc shed 7.77% to end the session at 309.73. Paramount Global Class B was down 6.97% to 18.15. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Summit Therapeutics PLC, which rose 194.27% to hit 2.31, Pacifico Acquisition Corp, which gained 59.01% to close at 8.03, and also shares of Eterna Therapeutics Inc, which rose 43.87% to end the session at 4.46. The least gainers were Gossamer Bio Inc, which shed 74.60% to close at 2.36. Shares of INVO Bioscience Inc lost 35.62% to end the session at 0.47. Quotes of MEI Pharma Inc decreased in price by 33.52% to 0.26. Numbers On the New York Stock Exchange, the number of securities that fell in price (2185) exceeded the number of those that closed in positive territory (891), while quotes of 121 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,618 companies fell in price, 1,099 rose, and 217 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 6.84% to 22.17. Gold Gold futures for February delivery added 0.15%, or 2.65, to $1.00 a troy ounce. In other commodities, WTI January futures fell 3.46%, or 2.66, to $74.27 a barrel. Brent oil futures for February delivery fell 3.86%, or 3.19, to $79.49 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair was unchanged 0.24% to 1.05, while USD/JPY was up 0.22% to hit 137.04. Futures on the USD index rose 0.28% to 105.53   Relevance up to 02:00 2022-12-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/303957
The USD/JPY Price Seems To Be Optimistic

The USD/JPY Pair Wait For The Price To Reach The Nearest Level

InstaForex Analysis InstaForex Analysis 07.12.2022 08:01
The USD/JPY pair continues to develop the correction of the last two days. Yesterday, faced with the nearest resistance of the embedded line of the price channel of the higher chart (137.00), the price only grew by 28 pips. The price and the Marlin oscillator have formed a convergence, the pair may rise further. The nearest target is the line at 138.65. If it penetrates this level, the price might go up to 140.05. A little above this second target is the level of 140.35, which is the low of September 22. Maybe, the price will try to reach it as well. On the four-hour chart, the price went above the MACD line, even with a slight consolidation. The Marlin oscillator is in the positive area. The short-term trend is increasing, we wait for the price to reach the nearest level at 138.65.   Relevance up to 03:00 2022-12-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329136
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

The Cable Market Is Moving Deeper Into The Bears' Territory

InstaForex Analysis InstaForex Analysis 07.12.2022 08:04
Yesterday, the pound opened and closed the day under the target level of 1.2200. It means that the price settled under this level, and the target is now the support at 1.1933, which is the low of June 14. The signal line of the Marlin oscillator is going under the lower limit of its own range, and soon we might see it in a downtrend. It is possible that the market is already experiencing the pressure of the double divergence (azure line), it will form and will be a confirmation of the reversal in the medium-term perspective. On the four-hour chart, the price has settled under the MACD indicator line. The Marlin oscillator is moving deeper into the bears' territory. We see a downtrend.   Relevance up to 03:00 2022-12-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329138
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The EUR/USD Price Has A Chance To Break Through The Target Range

InstaForex Analysis InstaForex Analysis 07.12.2022 08:06
Yesterday at the close of the session the euro broke support at 1.0470. Stock and commodity markets closed the day lower and we can assume that the currency market is desynchronizing with the related markets, which has been observed in recent weeks. As a consequence, in the event of a 0.75% Fed rate hike on December 14th, the stock market is most likely to fall, followed by the euro and other counter-dollar currencies. There is still a chance that the price will break through the target range at 1.0615/42. Settling under 1.0433, i.e. under the MACD weekly line, will lower this possibility of the euro's growth, the 1.0205 target will become available. The divergence, marked by the blue solid line, will be confirmed. On the four-hour chart, the price is below the MACD line, the MACD line itself shows signs of a bearish reversal. The Marlin oscillator is in negative territory. The short-term trend is downward.   Relevance up to 03:00 2022-12-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329140
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

The GBP/AUD Pair Is Still In A Bullish Condition

InstaForex Analysis InstaForex Analysis 07.12.2022 08:13
With the GBP/AUD price movement on the daily chart still moving above its 50 MA and the formation of the Bullish 123 pattern followed by Ross Hook (RH) it can be seen that buyers are still dominating this cross currency pair but it seems that in the near future it will be corrected slightly to the level 1.7916 but please pay attention as long as the downward correction does not exceed the 1.7700 level, then you can be sure that GBP/AUD is still in a bullish condition and will try to test the 1.8256 level.   Relevance up to 04:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/115293
The Japan Central Bank’s Decision Sent The Yen (JPY) Sliding

USD/JPY: The Downward Scenario Described Earlier Will Cancel Itself

InstaForex Analysis InstaForex Analysis 07.12.2022 08:19
With USD/JPY stuck at the level of the Fair Value Gap area (Pink Box) on the daily chart, now the main currency pair has the potential to depreciate to the 133.63 level as the main target and the 131.78 level as the second target, suddenly USD/JPY corrected upwards to exceed the level of 142.25 where this has been confirmed by a deviation between price movements and the CCI indicator, the downward scenario described earlier will cancel itself.   Relevance up to 04:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/115291
FX: The SNB Is Getting Its Stronger Swiss Franc Via Gains Against The Dollar

The Swiss Franc Has Been One Of The Strongest Currencies

InstaForex Analysis InstaForex Analysis 07.12.2022 08:22
The Swiss Franc has been one of the strongest currencies over the last one and a half years, but that seems to be over. A firm bottom is in place at 0.9403 and a rally back to the 2013 high at 1.2650 is in progress. Short-term we would like to see a break above minor resistance at 0.9885, which will open the way for a rally towards the trendline resistance near 1.0531. This resistance line is likely to reject the first attempt to break above it, but the second attempt should prove successful and will call for more upside towards the long-term target near 1.2650.   Relevance up to 06:00 2022-12-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/303969
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The EUR/USD Pair May Start Turning Lower Towards The Larger Trend

InstaForex Analysis InstaForex Analysis 07.12.2022 08:28
Technical outlook: EURUSD dropped to the 1.0455 low intraday on Wednesday in line with our projection. Immediate short-term target potential remains in the 1.0400-20 zone before prices could develop a pullback rally. The single currency pair is seen to be trading close to 1.0470 at this point in writing as the bears might be preparing for yet another drag lower soon. EURUSD might have carved a meaningful lower top around 1.0595 or is very close to carving one. Either way, the highly realistic wave count remains bearish towards 1.0000 at least. Short-term support is at 1.0420, followed by 1.0220 and lower; while interim resistance is seen around 1.0595. A break below 1.0420 will confirm that a meaningful top is in place around 1.0595. EURUSD might test the 1.0700-50 zone, which is close to the resistance trend line, before turning lower towards the larger trend. A push through 1.0595 will indicate the possibility of carving another high towards the 1.0700-50 levels before going to the bears. The medium-term projected target remains 1.0000 and only a consistent drop lower will indicate that prices are settled below 0.9535. Trading idea: Potential drop towards 0.9535 against 1.0700 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/303973
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

Economic Data From Australia And China Weighed On The AUD/USD Pair

TeleTrade Comments TeleTrade Comments 07.12.2022 08:59
AUD/USD picks up bids to print the first daily positive in four. Downbeat China trade numbers, softer-than-expected Aussie GDP fail to convince bears amid pre-Fed blackout. Beijing announces new COVID-19 prevention and control guidelines. Light calendar emphasizes risk catalysts for fresh impulse. AUD/USD prints mild gains around 0.6700 as buyers struggle to defend the first daily gains in four heading into Wednesday’s European session. The Aussie pair’s latest gains could be linked to the recently released Covid guidelines from China. That said, China’s National Health Commission (NHC) mentioned that asymptomatic patients, cases with mild symptoms can undergo home quarantine. The updates also mentioned, “High-risk zones with no new infections for 5 straight days should be released from lockdown in a timely manner.” On the contrary, fears of global recession, as conveyed by the key representatives of major banks and Bloomberg economics seem to challenge the AUD/USD bulls. Additionally, softer-than-expected Australia Gross Domestic Product (GDP) for the third quarter (Q3) and downbeat prints of China’s November monthly trade data also weighed on the AUD/USD prices. However, hopes of overcoming China-linked virus fears and faster economic transition, due to the NHC guidelines, seem to have triggered the latest risk-on mood, which in turn favors AUD/USD bulls. Amid these plays, the S&P 500 Futures print mild gains while the US 10-year Treasury yields print mild gains near 3.55%. Moving on, China’s risk-positive announcements and second-tier data may entertain AUD/USD traders ahead of Thursday’s China inflation numbers and Friday’s preliminary readings of the US Michigan Consumer Sentiment Index. Technical analysis Tuesday’s Doji candlestick above the 21-DMA, around 0.6700 by the press time, keeps AUD/USD buyers hopeful.
Kuroda Stayed On The Sidelines And The Yen Responded With Losses

BoJ’s Nakamura: Don't See Need To Change Current Monetary Policy Framework Now

TeleTrade Comments TeleTrade Comments 07.12.2022 09:03
Further comments crossing the wires from Bank of Japan (BoJ) Board Member Toyoaki  Nakamura, as he continues to speak about the inflation and monetary policy outlook.   Key to future policy will depend on whether inflation will rise sustainably. Not convinced yet whether consumer inflation will exceed 2% in fiscal 2023 onward. Rate of wage increase in next year's spring wage negotiations alone won't lead to policy tweak debate. Don't see need to change current monetary policy framework now.   Market reaction USD/JPY was last seen trading at 137.52, accelerating its advance on the dovish BoJ comments. The spot is up 0.35% on the day.
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The Kiwi Pair’s (NZD/USD) Failure Signals Hint At The Quote’s Further Downside

TeleTrade Comments TeleTrade Comments 07.12.2022 09:06
NZD/USD remains sidelined as sellers attack short-term key support line. Bearish MACD signals, RSI divergence keeps sellers hopeful. 21-SMA guards immediate recovery, 0.6470-75 region is the key hurdle to the north. NZD/USD treads waters around 0.6320-30 as bears flirt with the short-term key support line during early Wednesday. Even so, the Kiwi pair’s failure to cross the 21-SMA and bearish MACD signals hint at the quote’s further downside. Also keeping sellers hopeful is the bearish RSI divergence on the chart. The oscillator-price divergence could be witnessed when the NZD/USD prints higher lows but the RSI, placed at 14, fails to print the commensurate bottoms, which in turn suggests the lack of momentum strength even if the prices remain firmer. As a result, the bearish move could quickly be materialized at the first chance. That said, an upward-sloping support line from November 10, near 0.6315, gains major attention as a downside break of the same might work as a trigger for the NZD/USD south-run. In that case, lows marked on November 28 and 17, respectively near 0.6155 and 0.6065, could lure the bears before highlighting the previous monthly low of 0.5740. On the flip side, a clear break of the 21-SMA level surrounding 0.6360 appears necessary to convince NZD/USD buyers. Even so, multiple hurdles surrounding 0.6470-75, comprising the highs marked in August and December, appear a tough nut to crack for the bulls before retaking control. NZD/USD: Four-hour chart Trend: Further weakness expected
Growth Of The USD/JPY Pair Is Hampered By Resistance

The USD/JPY Pair Portrays The Market’s Risk-On Mood

TeleTrade Comments TeleTrade Comments 07.12.2022 09:16
USD/JPY picks up bids to refresh intraday high around 137.60 during early Wednesday in Europe. In doing so, the Yen pair portrays the market’s risk-on mood amid a light calendar. However, the options market signals are in contrast with the USD/JPY price run-up. That said, the one-month risk reversal (RR) for the Yen pair, the ratio between call and put premiums, braces for the biggest weekly print in three by flashing -0.325 at the latest. In doing so, the weekly RR drops for the third consecutive week. Further, the daily RR snaps a two-day uptrend by printing the -0.435 figure at the latest. It’s worth noting that China’s announcement of the new Covid policy appeared to have triggered the latest risk-on mood. Also favoring the USD/JPY could be the comments from various policymakers at the Bank of Japan (BOJ). Recently, BOJ Board Member Toyoaki Nakamura said that it is ‘premature to tweak monetary policy now as service prices remain low. Also read: USD/JPY Price Analysis: Retreats from monthly resistance around 137.00  
The EUR/USD Price May Fall Under 1.0660

Euro Analysis: A Strong Support Is Needed

InstaForex Analysis InstaForex Analysis 07.12.2022 09:29
EUR/USD A correction is seen in the US stock market. A strong support is needed to trigger a rally. With euro, the situation is different as it is moving within a range. To those who did not sell earlier, you may do so from 1.0580. If the price rises, sell from 1.0580-1.0610 and from 1.0680. But if euro goes down, look for good buying points at the bottom.   Relevance up to 19:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329130
Analysis Of The EUR/JPY Pair Movement

The USD/JPY Pair Will Be Able To Hold Its Annual Growth

InstaForex Analysis InstaForex Analysis 07.12.2022 09:35
The USD/JPY pair plummeted in November, which made many question its bullish potential. However, the dollar's recent growth convinces investors otherwise. So what to expect from the major? The dollar is winning so far The greenback rose 0.3% against its major peers on Wednesday night. The dollar was supported by rising concerns about the global recession. The day before, three leading U.S. banks - J.P. Morgan, Goldman Sachs and The Bank of America - said they expect a slowdown in global economic growth next year, as rising inflation is threatening consumer demand. The pessimistic outlook reinforced the anti-risk sentiment that prevailed for the third consecutive session. The MSCI All-Country World Index, which tracks stock market performance in 48 countries, fell 1.26%, down from a three-month high last week. The loss of appetite for equities and increased demand for the dollar was also triggered by strong US macrodata. Recall that earlier this week the Institute for Supply Management (ISM) said that economic activity in the services sector grew from 54.4 to 56.5 in November. The data followed Friday's report from the U.S. labor market, which also pleased dollar bulls. The nation's NonFarm Payroll employment rose more than forecast last month. The portion of optimistic data greatly strengthened the market's hawkish expectations for further monetary policy by the Federal Reserve. Currently, most traders expect the U.S. central bank to raise the rate by 50 bps next week. The probability of an increase by 75 bps is only 5%. However, talk of a higher peak in U.S. interest rates has returned to the market. Many investors believe the rate could reach 5.25% in 2023, whereas now it is in the 3.75-4% range. The hope that the Fed will continue to raise rates next year and keep them high for a long time acts as a very powerful trigger for the dollar at this point. This factor particularly helps the greenback against the yen. After USD/JPY plummeted to a 3-month low of 133.64 last week, it has now gained 3% and has managed to stay above 137. There aren't many new factors that can strongly influence the asset's dynamics now. In the coming days, investors will focus on two events: the US consumer price index for November and next week's Fed meeting. If investors see more robust inflation and hear hints of a higher peak in U.S. interest rates from U.S. officials, it will likely trigger a new wave of growth in the USD/JPY pair. What's in store for the USD/JPY next year? In November, the U.S. currency posted its worst monthly performance in 14 years against the yen. It fell by more than 7% due to fears that the US central bank is going to slow the pace of rate hikes. However, most currency strategists, recently surveyed by Reuters, believe that in the next few months, USD/JPY will be able to hold its annual growth, which amounted to 20%. The growing threat of recession in the U.S. and other countries should provide support to the dollar. In the backdrop of risk aversion, the greenback will once again feel a surge of strength, which will help it recover its recent losses on all fronts, even against the yen. "For now, the forces that have supported the USD this year remain valid, despite the recent correction lower. Other currencies do not look as attractive yet," said Athanasios Vamvakidis, head of G10 FX strategy at Bank of America. In the BofA baseline, the U.S. dollar will remain strong early next year and will only start a more sustained downward path after the Fed pauses. Despite the dollar's recent pullback, major currencies are not expected to recoup their 2022 losses against the USD until at least late 2023, the survey showed. Analysts estimate that the Japanese yen, down nearly 20% for the year and currently trading around 136.50 per dollar, was expected to change hands around 139.17, 136.17 and 132.67 per dollar over the next three, six and 12 months respectively.   Relevance up to 08:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/329168
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

FX: Financial Markets Now Seem To Be Settling Into The View Of A 2023 Recession

ING Economics ING Economics 07.12.2022 11:23
After the broad-based risk rally seen over the last six weeks, financial markets now seem to be settling into the view of a 2023 recession. And as long as the Federal Reserve stays hawkish, the dollar should perform well. For today, look out for policy rate meetings in Canada and Poland, where we expect a 50bp hike and unchanged rates respectively USD: Recessionary fears should keep the dollar in demand After a positioning-led rally in risk assets over the last six weeks, financial markets seem to be settling back into a macro-led environment where the 2023 global slowdown is front and centre. Brent crude is dipping sub $80/bbl despite the OPEC+ supply cut, bonds are rallying and equities are starting to hand back some of their impressive rally from October lows. Importantly, the US yield curve continues to deeply invert. The 2-10 year Treasury curve is now inverted by a staggering 82bp. This is by far the best representation of the macro view that recessionary fears are building, yet the Fed has yet to cave in. We continue to see this as a positive environment for the dollar and a negative one for commodity and pro-cyclical currencies. DXY has found support under 105 and could well make a run to 107 ahead of next week's FOMC meeting, where we think it is too early for the Fed to signal the 'all-clear' on inflation with its influential Dot Plots. The main threat to our bullish dollar view comes from the risk of any softer US November price data (PPI released tomorrow, CPI next Tuesday) or a more positive re-assessment of Chinese growth prospects on the back of relaxed Covid measures. However, poor Chinese trade data released overnight serves as a reminder that the export environment will remain exceptionally challenging for China into 2023.   Chris Turner The Bank of Canada (BoC) will announce monetary policy today. As discussed in our meeting preview, the consensus is split between a 25bp and 50bp hike, but we believe a half-point move looks more appropriate given strong economic activity and a very tight labour market. Still, we admit it is a very close call given that the expected economic slowdown and fragility of the Canadian housing market argue for a smaller rate increase. Markets are pricing in 35bp for this meeting, so slightly leaning in favour of a quarter-point hike: in our base-case 50bp scenario, the Canadian dollar should rally on the back of the hawkish surprise. However, we don’t see the BoC impact on CAD to be very long-lasting, as external factors remain more important. A sustained recovery in CAD from these levels undoubtedly requires a rebound or at least a stabilisation in oil prices. Today, USD/CAD could trade back below 1.3600, but short-term upside risks remain high.  Francesco Pesole EUR: Sideshow It has felt like EUR/USD trading has become more settled over the last week, yet one week and one month realised EUR/USD volatility are still above 13%. This could be a precursor to one of the main themes we outlined in our 2023 FX Outlook, one of less trend and more volatility in FX markets.  There is a case that last week's 1.0595 print was the corrective high in EUR/USD - we should know a lot more by next Wednesday evening after the FOMC meeting - and it will be interesting to see what the European Central Bank has to say on the 15th. Some are speculating that the current calm in European bond markets could prompt the ECB to be slightly more aggressive in its quantitative tightening plans - so let's see. We have a couple of ECB speakers today, Philip Lane at 0810CET, and Fabio Panetta at 1530CET, but neither looks likely to knock the market off its consensus of a 50bp hike next week. For today, EUR/USD could drift down to 1.0400 in quiet markets. Chris Turner GBP: Mildly bearish Trading conditions have certainly settled down for sterling where one-month traded volatility is pretty steady in the 12-13% area having traded above 20% in late September. It looks like the Gilt market has rallied enough for the time being, with spreads to German Bunds now starting to widen again. In other words, the fiscal rectitude rally has run its course and sterling will not find any more positives here. If, as above, we are turning to a more macro-led trading environment, then sterling should underperform. A Fed staying hawkish into a recession should see equity markets come under renewed pressure. Typically, this is a negative environment for sterling, where the UK's large current account deficit is penalised. GBP/USD has turned from a strong resistance level at 1.23 and our bias into next week would be for a return to the 1.19 area. Chris Turner CEE: NBP closing the tightening cycle Top of today's agenda is the monetary policy meeting of the National Bank of Poland (NBP). After last week's surprisingly low inflation, it is hard to expect any outcome other than stable interest rates. Although we think the peak in inflation is still ahead and inflation will slow only very gradually next year, the prospect of a weak economic performance will prevail at the MPC and we expect the same story next year. However, for now, the bigger focus will be on tomorrow's press conference by Governor Adam Glapinski and any potential mention of interest rate cuts, which could be a red rag to a bull for the markets. As we mentioned on Monday, the gap between the zloty and the interest rate differential is the largest in the region at the moment and together with EUR/USD heading lower, this is not good news for FX. EUR/PLN is thus vulnerable, especially to the upside in our view and we could see a move above the 4.720 level which was already tested on Monday. On the EU/Hungary story, as expected yesterday's Ecofin meeting did not bring a resolution to the current saga. The Ecofin was due to discuss both the recovery funds to Hungary and the European Commission's proposal for sanctions under the rule of law mechanism. EU member states have requested a new assessment of Hungary from the EC given that the original version did not include the latest changes on the Hungarian side. According to reports, the new assessment is expected to be discussed at an additional Ecofin meeting on 12 December and formally approved on 19 December. On the one hand, the EU's timing problems play into Hungary's hands, as the rule-of-law procedure will end without sanctions if the European Council does not decide on the issue; on the other, the EU may block the disbursement of cohesion funds after that date. However, after yesterday, it seems that the situation will be tense until almost the final day of the year. On the FX side, the Hungarian forint touched its weakest levels since mid-November yesterday, but the currency erased some of its losses after the Czech finance minister, who is leading the current negotiations, said he believes a deal will be reached in the coming days. Thus, positioning continues to clear and in our view, the trend is tilting more towards the negative side of this story now. Hence, tangible progress should bring a significant rally, while further negative news may result in only slight weakening. Nevertheless, for today we expect a partial calming of the situation after yesterday's headline storm and we expect the forint closer to 410 EUR/HUF. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Oanda Podcast: US Jobs Report, SVB Financial Fallout And More

Much Depends On Whether The Economy Slows Down Early Next Year

InstaForex Analysis InstaForex Analysis 07.12.2022 11:40
Markets are troubled by the growing fears that the Fed will change its mind on interest rates due to the recent positive data on the US economy. They worry that the increase will again be 0.75% instead of the 0.50% announced by Jerome Powell last week. The most affected stock markets, especially in the US. Other financial markets are not so negative, such as the government debt market, which only shows consolidation and nothing more. In the forex market, the dollar has risen slightly for the past two days, but it remains uncertain whether this is a signal of a new trend. The situation indicates that investors in the stock markets took advantage of the positive news to lock in profits before the Fed meeting next week. The dynamics of the three main indices show that their decline is not that deep as they have corrected to strong support levels, but remain in a short-term upward trend. The sell-off in the past two days is also likely because investors want to get into cheaper assets after the meeting as Powell's words have very high chances of coming true. In terms of statistics, layoffs are expected to surge early next year due to the slowdown of the US economy. History shows that abrupt changes in interest rates have a delayed effect for three to six months. And if the US economy slows down in the 1st quarter quite markedly, the cycle of rate increases could end in the 2nd quarter, provided that inflation dips. Forecasts for today: EUR/USD The pair is trading at 1.0460. An increase in buying pressure will push the quote to 1.0585. XAU/USD Gold has a high chance of staying above the level of 1764.00. If market sentiment improves, expect the price to return to 1808.00   Relevance up to 08:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329158
Mexican Rate Spread: Tight vs. Central Bank's Rate Spread and Implications for Dis-inversion

Technical Outlook: The EUR/USD Bear Trend Will Be Confirmed And The GBP/USD Has Not Managed To Close Above

Saxo Bank Saxo Bank 07.12.2022 11:53
EURUSD rejected at 1.06. Uptrend set to reverse with down side potential to 1.01GBPUSD rejected at key level at 1.23. Rising wedge pattern indicates a reversal EURUSD rejected at 0.382 retracement of the entire down trend since 2021. (See weekly chart) a few cents below 1.06.There is divergence on daily time period indicating the short-term rebound/uptrend is weakening and could come to an end. AURUS is currently testing the short-term steep rising trendline and if EURUSD drops back below the daily 200 SMA there is strong indication the trend will reverse. Bear trend will be confirmed by a break below 1.0290. If that scenario plays out there is potential down to support at around 1.01.If EURUSD breaks above 1.06 the uptrend is likely to extend to around 1.08 Source all data and charts: Saxo Group   GBPUSD has been forming a rising wedge like pattern hitting resistance at around 1.23. GBPUSD has not managed to close above.Currently testing both the lower rising trendline and the 200 daily SMA GBPUSD could break lower. If GBPUSD breaks below the trendline followed by a break below 1.19 the uptrend has reversed and GBPUSD could drop to the 0.382 retracement at 1.1566. 100 and 55 SMA’s will also provide some support. A close above 1.23 however, could lead to further upside with potential to 1.2660-1.2745. However, there is no divergence on RSI indicating GBPUSD could move higher but a close above 1.23 is needed.The 1.23 is strong resistance. It is also the 0.50 retracement of the entire down trend since 2021. Weekly RSI is currently being rejected at the 60 threshold.       Source: Technical Update - EURUSD and GBPUSD rejected at key resistance levels. Trend reversal in the cards | Saxo Group (home.saxo)   
Softer New Jobs Reading Would Likely Weigh On The Canadian Dollar

Saxo Bank Podcast: Crude Oil Plunging To New Lows, Focus On Bank Of Canada Meeting And More

Saxo Bank Saxo Bank 07.12.2022 11:59
Summary:  Today we note the US market continuing lower and closing near pivotal level, this time with no notable catalyst driving the selling, as US treasury yields actually dropped at the long end of the US yield curve, taking the yield curve inversion to a new cycle- and multi-decade extreme. It also looks like the easing of China's Covid policy is running out of steam as a factor. In commodities, we look at crude oil plunging to new lows despite alarming supply fundamentals, and wheat prices also on the defensive on unusually elevate export activity for the season. A look at today's Bank of Canada meeting, TSMC making even larger investments in the US, Apple postponing its EV plans and much more on today's pod, which features Peter Garnry on equities, Ole S Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source : Podcast: US equity market limping at pivotal levels after sell-off extends | Saxo Group (home.saxo)
The Australian Dollar Failed To Hold Its Gains, The Pound Strengthened Against The US Dollar

The Australian Dollar Failed To Hold Its Gains, The Pound Strengthened Against The US Dollar

Kamila Szypuła Kamila Szypuła 07.12.2022 13:14
The darkening economic outlook drove fresh safe-haven demand for the US Dollar on Wednesday. The US dollar changed little after some of America's biggest banks warned of an impending recession The Fed, Bank of England (BoE) and European Central Bank (ECB) will set interest rates next week and central bankers will enter a period of silence before meetings. Positive reports appeared in the euro zone. Policymakers enter a period of calm ahead of key meetings of the Bank of England, the Federal Reserve and the European Central Bank Australian Dollar is facing renewed pressure. BoJ board member Nakamura once again encouraged the JPY bears Read next: Euro: Is There A Broader Correction To Be Feared? Aussie Got Little Support From The RBA Decision | FXMAG.COM EUR/USD may be bearish? The EUR/USD pair trades close to 1,050. Any breakout lower than 1.045 will be considered bearish. Economists at ING note that the pair could move lower to 1.0400. The European currency is expected to closely follow the dynamics of the dollar, the impact of the energy crisis on the region and the divergence between the Fed and the ECB. Additionally, the markets' overestimation of the potential Fed policy reversal remains the sole driver of the pair's price action for now. There were further concerns about the impact of colder winter conditions, especially in the context of the still uncertain energy situation. Positive reports appeared in the euro zone. Employment rose slightly and the GDP Y/Y and GDP Q/Q readings turned out to be higher than expected. GDP Y/Y increased to 2.3% against the expected 2.1%, while GDP Q/Q increased by 0.1% to 0.3%. Speeches by members of the European Central Bank will also take place today, but they are not expected to have a significant impact on the euro exchange rate. GBP/USD holds gains above 1.2150 The GBP/USD pair is trading around 1.2190. The pound strengthened against the dollar on Wednesday to a nearly six-month high as policymakers enter a period of calm ahead of key meetings between the Bank of England, the Federal Reserve and the European Central Bank. There are no significant macroeconomic events for the pound today. The Bank of England raised interest rates from 0.1% to 3.0% in the current monetary policy tightening cycle, with markets pricing in an interest rate peak of around 4.6% next year. Economists predict the Bank of England will decide to raise interest rates by 50 basis points next Thursday. One BoE policymaker said higher interest rates could lead to a deeper and longer recession. Yesterday, the Reserve Bank of Australia recently raised its key interest rate by 25 basis points to 3.1% The Australian dollar failed to hold its gains and it is facing renewed pressure after data showed that the Australian economy expanded less than expected in the third quarter. Annual GDP by the end of July was 5.9% instead of the expected 6.3% and the previous reading of 3.6% was revised down to 3.2%. Overall, national data show a strong economy. Yesterday, the Reserve Bank of Australia recently raised its key interest rate by 25 basis points to 3.1%, taking borrowing costs to a level not seen in a decade, and further tightening is expected to bring down inflation. A board member of the Bank of Japan (BoJ) said that adjusting monetary policy would be premature The currency pair is trading around 137.3590. BoJ board member Nakamura once again encouraged the JPY bears with his statement. A board member of the Bank of Japan (BoJ) said that adjusting monetary policy would be premature. Source: dailyfx.com, investing.com, finance.yahoo.com
ECB's Hawkish Hike: Boosting EUR/USD and Shaping Global Monetary Policy

On The New York Stock Exchange, The Dow Jones Did Not Rise In Price

InstaForex Analysis InstaForex Analysis 08.12.2022 08:00
At the close of the day on the New York Stock Exchange, the Dow Jones did not rise in price, the S&P 500 index fell 0.19%, the NASDAQ Composite index fell 0.51%. Dow Jones The leading performer among the components of the Dow Jones index today was 3M Company, which gained 1.77 points (1.42%) to close at 126.35. Merck & Company Inc rose 1.16 points or 1.06% to close at 110.09. Amgen Inc rose 0.87% or 2.47 points to close at 285.76. The biggest losers were Salesforce Inc, which shed 2.79 points or 2.09% to end the session at 130.48. Apple Inc. shares rose 1.97 points (1.38%) to close at 140.94, while Boeing Co was down 1.93 points (1.08%) to close at 176.50.  S&P 500  Leading gainers among the S&P 500 index components in today's trading were State Street Corp, which rose 8.19% to hit 80.45, Campbell Soup Company, which gained 6.02% to close at 56.18, and also shares of Bank of New York Mellon, which rose 4.13% to close the session at 44.61. The biggest losers were M&T Bank Corp, which shed 7.72% to close at 147.97. Shares of Brown Forman lost 7.30% to end the session at 68.27. Expedia Inc (NASDAQ:EXPE) dropped 6.32% to 90.79. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Prometheus Biosciences Inc, which rose 165.67% to hit 95.80, Transcode Therapeutics Inc, which gained 133.44% to close at 0.98, and also shares of Vor Biopharma Inc, which rose 41.86% to end the session at 6.10. The biggest losers were Ensysce Biosciences Inc, which shed 53.36% to close at 1.04. Shares of Versus Systems Inc lost 46.98% and ended the session at 0.79. Bruush Oral Care Inc Unit fell 46.95% to 0.50. Numbers On the New York Stock Exchange, the number of securities that fell in price (1608) exceeded the number of those that closed in positive territory (1466), while quotes of 134 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,196 companies fell in price, 1,487 rose, and 198 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 2.30% to 22.68. Gold Gold futures for February delivery added 0.91%, or 16.30, to $1.00 a troy ounce. In other commodities, WTI futures for January delivery fell 2.40%, or 1.78, to $72.47 a barrel. Futures for Brent crude for February delivery fell 2.28%, or 1.81, to $77.54 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair was unchanged 0.38% to 1.05, while USD/JPY fell 0.38% to hit 136.52. Futures on the USD index fell 0.40% to 105.12.   Relevance up to 03:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/304121
Oanda expect next rate hikes as Bundesbank and ECB predicts will accelerate

The European Currency (EUR) Has Already Grown Too Much

InstaForex Analysis InstaForex Analysis 08.12.2022 08:02
On Wednesday, the EUR/USD currency pair kept moving. Since there are no fundamental or macroeconomic backgrounds, such a movement today shouldn't be considered surprising in theory. Yesterday, the pair was able to adjust to the moving average line once more but failed to get past it. As a result, the upward trend is still present, and the US dollar still needs to grow, as we have been hoping for more than two weeks. Despite the technical picture, we do not even see general signs that the pair is ready to start correcting, as all indicators continue to signal an upward movement. Typically, as an impulse approaches completion, each peak moves steadily closer to the previous one. Nothing comparable can be found today. In the absence of significant news or events, the market pauses but does not close long positions. And for that reason, there is no correction. Similar circumstances existed with the US dollar for a protracted period, as the pair could not move higher by more than 400 points. The situation is now reversed. The lack of current growth factors in the euro currency is what I find most intriguing. If they could have been located a week or two ago (and then only with a strong desire), they are now impossible to locate. There were two more or less important reports this week, one on Monday and two on Wednesday. Retail sales in the European Union fell short, and the US ISM index turned out to be stronger than expected. This week's overall score is 2:1 in favor of the dollar as a result of yesterday's report on the third quarter of EU GDP coming in slightly higher than expected. However, the US dollar could not reap any particular benefits from this. It is currently unable to gain a foothold beneath the moving. The market has forgotten the "tough" stance taken by the Fed. The European currency did not increase in value over the past month for unique reasons, as we have recently stated on numerous occasions. Some factors support the US dollar, but you can find individual reports that back the euro, and you can recall the Fed's readiness to start easing up on the pace of tightening monetary policy. The European currency has grown too much compared to the available resources, even though it has grown reasonably. There is now a lull, but the two cannot start adapting. In light of this, it is currently unnecessary to consider and analyze macroeconomics' "foundation." Why would you do this if the market is already buying? This is sarcasm because no one can predict when market participants will realize that you can sell and buy. We need to pay attention to upcoming meetings of the Fed or the ECB in light of recent changes in the foreign exchange market. It is well known that the ECB will most likely increase rates by 0.75% and that the Fed will only increase rates by 0.50%. Even considering this factor, the euro has already grown too much. It may, however, currently support the euro currency. In any case, a correction is overdue at this point. We will wait for a downward correction even if it turns out tomorrow that the ECB tightens monetary policy more than the Fed. However, we also want to remind you that with specific technical indicators and support, it would be a good idea to sell the pair right now. The situation is as follows: you must wait for a correction and be prepared for it, but it is also advised to only open short positions in the presence of signals. The market is currently trading irrationally, and this irrationality might last for a while. Additionally, it brought about the unjustified strengthening of the euro. As of December 8, the euro/dollar currency pair's average volatility over the previous five trading days was 115 points, which is considered "high." So, on Thursday, we anticipate the pair to fluctuate between 1.0378 and 1.0609. The Heiken Ashi indicator's turning downward indicates a new phase of the corrective movement. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: The EUR/USD pair is still in an upward trend. So, until the price is fixed below the moving average, new long positions with targets of 1.0742 and 1.0620 should be taken into consideration. No earlier than fixing the price below the moving average line with targets of 1.0376 and 1.0254 will sales become relevant. Explanations of the illustrations: Linear regression channels help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.       Relevance up to 01:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329243
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

The GBP/USD Pair Has Slightly Pulled Back Downward

InstaForex Analysis InstaForex Analysis 08.12.2022 08:04
On Wednesday, the GBP/USD currency pair maintained its position above the moving average line. As a result, the pair has slightly pulled back downward, but breaking below the moving average line was impossible. Because both linear regression channels point upward, the upward trend is still present. At this time, none of the indicators point to a potential pair decline. We stated earlier that the pound has only strengthened over the past few weeks. This is only partially accurate, as there are still occasional downward pullbacks. However, they are also too feeble, and the pair has long needed a significant downward correction. Over the past two months, the pound has increased by more than 2,000 points. Under any circumstance and with any fundamental or macroeconomic background, this is excessive. Even if we are incorrect in our assessment, a correction of at least 400–500 points downward should occur after such an increase. Furthermore, the pair should stabilize for a few weeks to avoid further growth because, at this rate, the pound will rise another 2,000 points in a few months, making the currency pair more volatile than bitcoin. The movements have always been more controlled and smooth in the foreign exchange market. It rarely has significant ups or downs. But that is what we are currently witnessing. This week, the UK had no macroeconomic background. Two reports on business activity in the services and construction sectors were released, but neither supported a stronger pound. The ISM index for the USA unexpectedly rose for many people. If we only consider this week, the movement may be logical. But why, for instance, did the pound price increase again yesterday? Even though nothing significant happened on Wednesday in the UK or the US, it nevertheless continued to grow. Trump is confidently on his way to losing another election. We already mentioned in the article on the euro/dollar exchange rate that discussing upcoming central bank meetings makes little sense in light of the recent movements of the currency pair. However, since the fundamental background is completely missing at this point, it will also be impossible to talk about anything else. Even topics that are not directly related to the economy are not significant or interesting. It is only important to note that, as we discussed a few weeks ago, the Democrats ultimately prevailed over the Republicans in the elections for the US Senate. As a result, the Lower House results show a victory for the Republicans, while the Upper House results show a victory for the Democrats. Also, Democrats are still the president and vice president. As a result, the Republican victory was extremely flimsy and uncertain. Their advantage is negligible even in the House of Representatives, where the Democrats hold 213 seats and the Republicans have 221. The outcome was not what the party of Donald Trump, who has already declared his intention to run for president in 2024, expected. We predicted time and time again that Trump would not win a second term simply because he was Donald Trump during the 2020 election. It is very difficult to think of a president of the United States with a more scandalous personality. It is very difficult to recall what has improved in America under Trump, even if we ignore all the scandals in which he has been involved. Trump, who for a long time equated the "coronavirus" with a "runny nose," may be to blame for the failure of the fight against the pandemic. And when the 2020 election kicked off, Biden won simply because many Americans were willing to vote for anyone other than Trump, not because he was a stronger candidate than Trump. Well, how could anyone forget the scandal over which Trump resigned? As a result, Donald Trump will not be elected president in 2024. Although he may receive the votes of 60 or even 70 million Americans, more people will still remember his "merits" to the country. Over the previous five trading days, the GBP/USD pair has averaged 174 points of volatility. This value for the dollar/pound exchange rate is "very high." As a result, on Thursday, December 8, we anticipate movement constrained by the levels of 1.2004 and 1.2371. The Heiken Ashi indicator's upward reversal indicates that the upward movement has resumed. Nearest levels of support S1 – 1.2146 S2 – 1.2085 S3 – 1.2024 Nearest levels of resistance R1 – 1.2207 R2 – 1.2268 R3 – 1.2329 Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     search   g_translate     Relevance up to 01:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329245
The AUD/USD Pair’s Downside Remains Off The Table

In Today's Asian Session The AUD/USD Pair Is Moving Down

InstaForex Analysis InstaForex Analysis 08.12.2022 08:06
The Australian dollar gained 0.58% yesterday. The price reached the resistance at 0.6730 and in today's Asian session it is moving down from it. The Marlin oscillator is already moving into the negative territory on the daily chart, the development of this intrusion will lead the price to the target support at 0.6642. Breaking yesterday's high at 0.6743 will allow the price to continue rising to the target resistance at 0.6799 (November 15 high). On the four-hour chart, the price settled under both indicator lines, below the level of 0.6730. The Marlin oscillator is developing in the downtrend area. We expect the price at 0.6642 (November 29 low).   Relevance up to 03:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329247
The Data May Keep The British Pound (GBP) From Rising

The Cable Market Has A Sign Of A Downward Momentum

InstaForex Analysis InstaForex Analysis 08.12.2022 08:10
Yesterday, the pound was down along with the rest of the counter-dollar currencies. It closed the day almost at 1.2200 (1.2202), which means it did not settle below the level nor did it rise above it. Now only the Marlin oscillator can tell us which direction the price is headed. But it also can't go under the lower limit of its own channel. Apparently, the situation will become clear tomorrow. The main scenario is that GBP will fall, as the double divergence keeps intensifying, the target is 1.1933. On the four-hour chart, the price settled under the MACD line, and it is only necessary to overcome the balance line (red indicator), which will mean a shift in traders' interest in selling the pound. The price reversal from the MACD line was synchronized with the reversal of the Marlin oscillator from the zero line to the downside. This is a sign of a downward momentum. Overcoming yesterday's low of 1.2106 opens the next target at 1.1933.   Relevance up to 03:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329249
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The EUR/USD Pair's Price Will Try To Break The Support Level

InstaForex Analysis InstaForex Analysis 08.12.2022 08:13
U.S. government bond yields fell on Wednesday. The 2-year rate shed about 10 points (4.23-4.36%) as it fell from the lower limit of the weekly range that formed since investors started to have expectations on the Federal Reserve meeting. The euro rose 40 pips on this. The price tried to reach the important test level of 1.0433. But this level was not tested (and, as a consequence, a reversal from the support), which provides a chance for the price to go down again. But the attempt at growth looks stronger, so the price's probability of reaching the target range of 1.0615/42 has slightly increased. The signal line of the Marlin oscillator is directed downward, while this weighs on the price, there is a 60% probability that the support at 1.0433 will be tested from the current levels. It is unlikely that the euro will decide to make sharp movements before the Fed meeting, which is due on the 14th, so in case it breaks through 1.0433, EUR might rise again. On the four-hour chart, the Marlin oscillator returned to the negative territory, making yesterday's way to a positive a false move. Therefore, at least the price will try to break the support of the MACD line and try to overcome the support at 1.0470 to reach 1.0433. There are no bright trading signals for today. Growth in the range of 1.0615/42 is possible only if the price crosses yesterday's high at 1.0550.   Relevance up to 03:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329251
Mexico’s Central Bank Surprised Markets With A 50bps Rate Hike Once Again

The Daily Outlook Of The USD/MXN Currency Pair

InstaForex Analysis InstaForex Analysis 08.12.2022 08:19
On the daily 4-hour chart for the USD/MXN currency pair, it can be seen that there is a deviation between the price movement and the CCI indicator and being above the Moving Average so that in the near future it is predicted that this currency pair will appreciate to the level of 19,858 as the main target to be penetrated and above. 20,107 as the second target but if on the way to the targets that have been described there is a sudden significant downward correction that goes past the level of 19,344 then all the Bull scenarios that have been described previously will cancel by itself. Relevance up to 03:00 2022-12-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/115363
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD Prices Could Print One More Shallow High

InstaForex Analysis InstaForex Analysis 08.12.2022 08:26
Technical outlook: EURUSD rallied through 1.0549 highs intraday on Wednesday before easing off. The single currency pair is seen to be trading close to 1.0500 at this point in writing as the bears prepare to come back in control soon. Prices could print one more shallow high above 1.0549 before reversing lower again. Ideally, 1.0595 should hold as interim resistance. EURUSD seems to have carved a potential top at 1.0595 or it could push through the 1.0600-1.0700 area before a top is formed. Either way, the bears might be inclined to come back in control and drag prices below the 0.9535 swing lows. A break below 1.0220 would add further confidence towards the proposed bearish setup. EURUSD is also facing the resistance of its one-year-old resistance trend line since the 1.2266 high as seen on the daily chart. If prices manage to break above 1.0595, the next potential target is seen towards 1.0750 as projected on the chart here. Watch out for intraday resistance towards the 1.0550-60 zone for a bearish reversal. Trading idea: Potential bearish reversal against 1.0700 Good luck! Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/304145
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

EUR/USD Pair: The Long-Term Picture Remains The Same

InstaForex Analysis InstaForex Analysis 08.12.2022 08:29
We continue to look for more upside pressure towards 1.0927 and much higher in the longer term. That said, in the short term, we need a break above minor resistance at 1.0595 to avoid the possibility of an expanded flat correction playing out. If minor resistance at 1.0595 is able to cap the upside for a break below minor support at 1.0290, then we have the expanded flat correction playing out. A dip to 1.0097 should be seen before the next strong rally higher. No matter whether the price breaks directly above minor resistance at 1.0595 or the expanded flat correction playing out, the long-term picture remains the same, calling for a rally to 1.0927 and much higher in the longer term. It will only be a time-matter issue. Relevance up to 07:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/304147
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The Bank Of Canada Did Not Become An Ally For The Loonie (CAD)

InstaForex Analysis InstaForex Analysis 08.12.2022 08:34
On Wednesday, the Bank of Canada announced the results of its final meeting this year. The Canadian central bank has raised its overnight rate by 50 basis points, lamented the high rate of inflation and praised the national economy's growth dynamics in the third quarter. However, despite such unipolar signals, the Canadian dollar did not benefit from the December meeting. On the contrary, the loonie weakened noticeably against the greenback: the USD/CAD pair reached its monthly high at 1.3650. What were the bulls unhappy with? In fact, it's a rare case, when the rally is not caused by strengthening of the greenback - in this case, the loonie is just getting weaker. The US dollar index is still under pressure (ahead of the December FOMC meeting), so the uptrend of USD/CAD only happened because the loonie's pessimistic. As is often the case, "the devil is in the details". For example, behind the loud statement that inflation in Canada is still unacceptably high is an inherently contradictory clarification. The central bank pointed out that three-month rates of change in core inflation have come down - and according to central bank economists, this is "an early indicator that price pressures may be losing momentum." This means that the central bank saw in the latest releases the first signs of slowing inflationary growth, with all the ensuing consequences. Recall that the core CPI (which excludes volatile food and energy prices), on an annualized basis, fell to 5.8% in Canada from the previous 6%. Most experts had expected an increase to 6.3% instead of a decline. However, perhaps in other circumstances market participants would have ignored the central bank's remark about the slowdown in inflation growth. But this thesis was voiced in conjunction with another message, the essence of which boils down to the readiness of the Canadian central bank to suspend the process of tightening monetary policy. On the one hand, Bank of Canada Governor Tiff Macklem said that they will maintain a hawkish course, given the high level of inflation in the country. But on the other hand, the text of the Bank of Canada's accompanying statement voiced the opposite signals. To be more precise, in the published statement the probability of further tightening of the monetary policy is already in question. The document states that the Governing Council "continues to assess how tighter monetary policy is working to slow demand, how supply challenges are resolving, and how inflation and inflation expectations are responding." I suppose that the wording was the direct reason why the Canadian dollar weakened in the whole market. After all, this is not the first time the message has been voiced recently. In particular, the deputy head of the Canadian Central Bank Carolyn Rogers announced recently that the end of the tightening cycle of the monetary policy is "already near". And Macklem himself has repeatedly gestured that the central bank is "approaching the end of its rate hike campaign". Therefore, the wording of the final communique became a kind of "quintessence" of rhetoric of the Bank of Canada representatives. By the way, the 50-point rate hike in this context should not be considered as a hawkish factor. Do recall that some analysts (in particular, RBC Capital Markets) before the meeting said that the Canadian central bank can slow down the rate hike to 25 points, acting, so to speak, "quietly" in the beginning of 2023. But the central bank, on the one hand, decided to keep the 50-point pace, but on the other hand, de facto allowed a pause in the rate hike. Such a strategy was interpreted by the market as a factor that is not in favor of the loonie, due to which the Canadian currency plunged throughout the market. Bulls need to overcome the resistance level of 1.3690 (in this price point, the upper line of the Bollinger Bands indicator coincides with the upper limit of the Kumo cloud on the D1 timeframe) in order to develop an uptrend. The Bank of Canada did not become an ally for the loonie, but now it is important that the Fed does not become an "enemy" of the greenback. In other words - prospects of developing the uptrend now depend on the Federal Reserve. We can suppose that the results of the December meeting of the Bank of Canada will allow the bulls to test the resistance level of 1.3690, and probably, the area of the 37th figure. But the bulls need the support of the US central bank for a large-scale (and most importantly, stable) bullish attack. Thus, taking into account forthcoming events in the US (release of the data on inflation growth in the US and the Fed's December meeting), it is impossible to speak about bullish prospects for USD/CAD now. In the current conditions, "safe longs" should be in the range of 1.3690-1.3700. The nearest support level is 1.3550 (average Bollinger Bands line on H4 and Tenkan-sen line on D1).   Relevance up to 00:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329237
The Pound Is Now Openly Enjoying A Favorable Moment

The GBP/USD Pair May Have A Potential For Further Growth

InstaForex Analysis InstaForex Analysis 08.12.2022 08:40
Technical analysis: GBP/USD has been trading upside as I expected and the price has reached first upside objective at 1.2222. I still see potential for further growth towards next upside references. Trading recommendation: Due to the upside trend in the background and rejection of the key support, I see potetnial for the further growth. Watch for the potential buying opportunities on the intraday dips with the upside objectives at the price of 1.2265 and 1.2320. Stochastic oscillator is showing fresh upside momentum, which is strong sign that buyers are in control. Key support is set at the price of 1.2100   Relevance up to 08:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/304157
The EUR/AUD Pair May Have The Potential To Continue Its Decline

FX: EUR/USD Remains Reasonably Supported, The Forint Has Stabilised Around 410 EUR/HUF

ING Economics ING Economics 08.12.2022 09:12
December is normally a weak month for the dollar, having declined this month in eight of the last ten years. Market sentiment still feels slightly negative on the dollar, where it falls far more easily than it rises. We cannot see an immediate catalyst for another dollar decline today and would expect more consolidation ahead of event risks next week USD: Holding pattern As above, December is normally a weak month for the dollar. January and February are typically much better months. Thus for dollar bulls like ourselves, December is proving a month of damage limitation. Dollar price action is still soft. Any whiff of softer price data - e.g. yesterday's downward revision to US 3Q unit labour cost data - sees the dollar easily slip. Dollar gains remain hard to come by. Beyond today's US initial claims (remaining remarkably low in the 220-240,000 region) will be November PPI data tomorrow (core expected to fall to 5.9% year-on-year from 6.7%) and then an incredibly busy week into Tuesday's CPI release and Wednesday's FOMC meeting. Preventing an even large dollar correction this month is the fact that Fed expectations have not yet crumbled. The terminal rate is still priced above 4.90% for next spring and this is just about keeping US two-year Treasury yields above the 4.25% area. Short-end yields holding up here and the ongoing inversion of the US curve is key to our call that the dollar can hold gains/bounce back into 1Q23. Clearly, next week's FOMC meeting will have a big say here - we will publish our FOMC preview shortly. DXY looks like it will continue to trade on a soft footing near 105.00, but should meet demand below there. Chris Turner  EUR: ECB focus moves onto QT EUR/USD remains reasonably supported near 1.05 - helped largely by the dollar's soft performance across the board. We may be reading too much into it, but the pricing through the OIS market for next week's European Central Bank rate meeting yesterday edged up to a 67bp hike from 54bp a day earlier. The move may be a function of some more hawkish remarks from ECB Chief Economist Philip Lane and seems to be putting the risk of a 75bp hike back on the agenda. Our house call is for 50bp. Our base case view assumes that this EUR/USD corrective rally stalls in the 1.05/1.06 area this month. The bigger risk of a rally probably comes more from a less hawkish Fed than a more hawkish ECB. Equally, we do see European gas prices edging higher again as a cold snap hits northern Europe. TTF natural gas prices are now back up to EUR150/MWH from 100 earlier this month. This will again pressure the trade balance and higher gas prices are one of the key reasons we are not more bullish on EUR/USD next year. Expect another narrow EUR/USD range today centered around 1.05. The data calendar is quite light and ECB speakers are President Christine Lagarde at 1300CET, Pablo De Cos at 1315CET and Francois Villeroy at 17CET - all seen on the dovish end of the spectrum. Elsewhere, we have the Swiss National Bank's (SNB's) Andrea Maechler speaking at 1530CET. In addition to Fed, ECB and Bank of England rate meetings next week we also have the quarterly SNB policy decision. It looks like market pricing is split between a 25bp and 50bp hike (taking rates to 0.75-1.00%). Let's see what she has to say today. EUR/CHF has been a bit stronger than we had expected, but assuming the SNB stays hawkish, we continue to see downside risks here. Chris Turner  GBP: Housing downturn starting to gain momentum The latest RICS survey on house price expectations shows respondents the most negative on the outlook for UK house prices since May 2020. That is not a surprise given the cost of living crisis and policymakers in the process of tightening, not loosening, fiscal and monetary conditions. Despite seasonal weakness in the dollar, we really struggle to see GBP/USD trading much higher and for those corporates with USD needs or GBP receivables, we see these 1.22/23 levels as perhaps the best GBP/USD levels for the next three to six months. Chris Turner CEE: Zloty will follow the NBP press conference As expected, the National Bank of Poland left rates unchanged at 6.75% yesterday. This is the third meeting in a row when the council did not raise rates. The post-meeting statement did not bring much new. The council's assessment remained unchanged compared to November and given that, as in November, the decision was announced after the close of trading, we have to wait for the market reaction. However, the main event, Governor Adam Glapinski's press conference, will come later today and we can expect another dovish outcome. In Hungary, we will see inflation for November today. We expect the headline number to exceed 22% and core inflation at 23% YoY, slightly above market expectations. We see food prices rising further as domestic producer prices are skyrocketing in the food industry (close to 50% YoY). Still, the strengthening of the forint may ease some pressure on imported inflation, and as aggregate demand retreats, inflation in services could also slow down. On the FX side, the forint has stabilised around 410 EUR/HUF after a barrage of EU headlines in recent days and we expect it to stay there until next week when we should hear new headlines from Brussels. The Polish zloty will be tracking the NBP governor's press conference and thus will hardly see reasons to strengthen. On the other hand, we expect the zloty to retest 4.72 EUR/PLN. The Czech koruna strengthened yesterday to its strongest levels since mid-November, probably in response to the Czech National Bank's confirmation of zero activity in the FX market in October and the erasing of the last hopes for the central bank's exit from this regime, and can be expected to remain in this range of 24.25-35 EUR/CZK. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
China’s Foreign Minister Qin Gang Downplayed Russia’s Invasion Into Ukraine

Putin Has Now Warned That The Ukraine Conflict Could Go On For A Long Time

Saxo Bank Saxo Bank 08.12.2022 09:17
Summary:  U.S. bond yields plunged on a softer revision of the Unit Labor Cost, WSJ Nick Timiraos’ article on decelerating in housing cost inflation, and Putin’s nuclear threat. U.S. equities were modestly lower on their fifth day of decline. Profit-taking selling in Hong Kong and China stocks after the release of the Politburo meeting readout and 10 additional measures to ease pandemic control policy saw the Hang Seng Index down 3.2% What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) skid again. Campbell Soup boils up S&P 500 fell for the fifth session and briefly breached its 100-day moving average again before bouncing off the low to close slightly above it. S&P 500 was 0.2% lower and Nasdaq 100 was down 0.5% on Wednesday. Eight of the 11 sectors within the S&P 500 declined, with healthcare, consumer staples, and real estate the only sectors advancing. Market sentiment was depressed by the recessionary signals sent out from the bond markets and Putin’s warning of the rising threat of nuclear war. Tesla (TSLA:xnas) dropped 3.2% on reports of cutting prices in China and the U.S. markets. Campbell Soup (CPB:xnys) surged 6% after reporting earnings beating analyst estimates due to strong gross margins. State Street (STT:xnys) jumped 8.2% after announcing a share buyback. US treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) fell on a softer unit labor cost print, Putin’s nuclear threat and WSJ Nick Timiraos article U.S. treasuries were well bid throughout the session, with yields falling by around 11bps across most parts of the curve. The 2-year was 11bps richer to settle at 4.26% and the 10-year yield fell 11bps to 3.42%. The Q3 unit labor cost was revised down to 2.4% from the previously reported 3.5%. The softer data provided somewhat of a relief to investors who had been concerned about wage inflation might slow the Fed from downshifting rate hikes in 2023. In addition, in his latest article, the Wall Street Journal’s Nick Timiraos, citing street economists, said the deceleration in rental increases in new apartment leases may mean “the end is in sight for one of the biggest sources of inflation” that Fed Chair Powell specifically pointed out as being important to watch in his recent Brookings Institution speech. Adding fuel to the rally in treasuries was the flight to safety bids following Putin’s threat of nuclear war. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) sold the new Covid-19 containment measures news Buy the rumor and sell the news in play yesterday in the Hong Kong and mainland China equity markets. After a lackluster morning session, Hong Kong and mainland China stocks rallied in the early afternoon after investors took note of the no mention of dynamic zero-Covid and a more balanced tone towards economic growth in the readout of the politburo meeting and the release by the Chinese health authorities of additional 10-measures to further fine-tune and ease China’s Covid-19 containment strategy. The markets nonetheless reversed soon afterward and tanked 3.2% as “sell the news” profit-taking came in. Southbound monies had a net outflow from Hong Kong back to the mainland of over HKD5 billion, of which HKD1.9 billion was selling the Tracker Fund of Hong Kong (02800:xhkg). Chinese developers were among the biggest losers following the second share placement in a month from Country Garden (02007:xhkg), with China Resources Land (01109:xhkg) down 5.3%, COLI (00688:xhkg) down 6.2%, Longfor (00960:xhkg) down 12.1%, and Country Garden down 15.5%. Selling was also aggressive in mega-tech names and saw Alibaba (09988:xhkg) down 5.3%, Tencent (00700:xhkg) down 3.7%, and Meituan (03690:xhkg) down 3.6%. The three leading Chinese airlines listed in Hong Kong, however, outperformed and gained by 2% to 6%. In economic data, China’s exports in November declined 8.7% (in USD terms) in November from a year ago, weaker than expectations. CSI 300 was down 0.3%. Australia’s share market holds six month highs, gold stocks charge, Australia's trade surplus beats expectations The Australian benchmark index, the ASX200 (ASXSP200.1) opened 0.3% on Thursday, but holds six month high territory. As for the best performers in the ASX200, clean metal small cap miner Chalice (CHN) rose 12% after drilling confirmed it found new sulphide minerals in Western Australia. CHN would typically be classed as higher risk company as its doesn’t earn income, which is why its share are suffering while interest rates are rising. CHN shares are down 35% YTD. Gold stocks are looking interesting as recessionary calls get louder- gold generally outperforms in a recession. Evolution Mining (EVN) shares are up 5%, continuing to rally it in uptrend and have gained 61%, moving EVN shares up off their 5-year low. In the larger end of town, BHP shares broke higher but profit taking turned its break higher into loss. BHP shares are up 26% this year, with the major miner, along with RIO and Fortescue doing well of late after the iron ore (SCOA) price picked up 7% this month, with China easing restrictions. On the downside, engineering company Downer (DOW) plunged 31% to $3.31, which is its lowest level since April 2020 after Downer downgrading its outlook and flagging irregularities in utilities business. The AUDUSD slides on AU exports falling more in October, and imports sinking; supporting RBA remaining dovish On the economic news front, Australia’s trade surplus fell in October, but less than expected. This reflects that Australia is earning less income as demand for commodities has fallen from its peak, ahead peak energy season and China easing restrictions. The Australian surplus fell from $12.4 billion to $12.2 billion (when the market expected the surplus to fall to $12 billion flat). In October, exports surprisingly fell 1%, vs market expectations they'd rise 1%, while imports fell 1%. This supports the RBA keeping rates low, as such after the data was released, the AUDUSD immediately fell. FX: USD weakens on lower yields The US dollar weakness extended further on Wednesday as US 10-year yields plunged to fresh lows since mid-September breaking below the 3.50% support. There were some concerns on wage pressures as US Q3 Unit Labor Costs were revised lower to 2.4% (prev. 3.5%, exp. 3.1%), which pushed back on some of the wage-price spiral fears while still remaining elevated. GBPUSD pushed above 1.22 and EURGBP is testing the 0.86 handle. NZDUSD came back in sight of 0.64 even as AUDNZD recovered from 1.0532 lows printed after Australian Q3 GDP data came in beneath expectations. The Japanese yen gained on lower US yields, but gains were restrained by commentary from BoJ's Nakamura who reiterated Governor Kuroda, noting it is premature to tweak policy now as service prices remain low and he is not sure now is the right timing to conduct a review of the policy framework. Crude oil (CLZ2 & LCOF3) prices pressured by demand concerns Oil posted its fourth straight day of losses, erasing all of the gains of this year. While demand concerns are rising with the aggressive global tightening seen this year, supply side has remained volatile. US crude inventories fell by a less-than-expected 5.19 million barrels last week, as exports didn't repeat their prior performance. Distillate stocks rose by more than 6 million barrels and gasoline supplies climbed by 5.3 million barrels amid weak demand. Still, the bigger factor is that the short-term technical traders appear to be in control of the oil market currently. WTI plunged to lows of $72/barrel while Brent went to sub-$78 levels. Gold (XAUUSD) higher on China’s central bank purchases Gold’s safe-haven appeal has come back in focus with China joining the long list of other countries who have been strong buyers of bullion. The PBoC added 32 tons to its holdings in November, the first increase in more than three years. This brings it total gold reserves to 1980 tons. This is also potentially a step towards our outrageous prediction on a new reserve asset, as speculations mount that China, Russia and several other countries could be looking to move away from USD reserves. Gold prices gained over 1%, and helped drag the rest of the sector higher as well. Industrial metals like Copper and Nickel also pushed higher due to the weaker US dollar.   What to consider? Putin’s nuclear threat sours risk sentiment Following drone attacks on three Russian air bases that Moscow blamed on Kyiv, Putin has now warned that the Ukraine conflict could go on for a long time and nuclear tensions have also risen because of it. He also did not clearly stay away from pledging that Russia will not be the first to use nuclear weapons, and rather said that Russia will defend itself and its allies “with all the means we have if necessary. The irresponsible talks on nuclear weapons is a sign that Putin is getting desperate with Ukraine gaining military grounds, and his actions will be key to watch. Risk sentiment likely to be on the back foot today, and food prices as well Uranium will be in focus. Japan Q3 GDP continues to show contraction The final print of Japan’s Q3 GDP was released this morning and it was slightly better than the flash estimate of -1.2%, but still showed a contraction of -0.8% annualized sa q/q. Stronger than expected growth in exports and a build of inventories led to the upward revision, private consumption was slower than previously expected at just 0.1% q/q. Lower oil prices and the return of inbound tourists may further aid the Japanese economy, but slowdown in global demand will continue to underpin a weakness in exports. Eurozone Q3 GDP grew more than initially forecasted The final estimate of the Eurozone Q3 GDP shows an increase to 0.3% versus prior 0.2%. Growth fixed capital formation was the biggest contributor to growth (0.8 percentage point) behind household spending (0.4 percentage point). The contribution from government expenditure was negligible on the period. This shows that households and companies are rather resilient despite the negative economic environment and inflation across the board. Based on the latest PMI for November (the last estimate was published on Monday), we expect a small GDP contraction in the eurozone in Q4. This would be marginal (probably minus 0.1%). Bank of Canada hiked 50bps and signalled the next move will be data dependent Bank of Canada hiked policy rate by 50bps to 4.25%, in line with market expectations but higher than the market pricing of 25bps. The central bank signalled the next move will be data dependent by saying that the “Governing Council will be considering whether the policy needs to rise further to bring supply and demand back into balance and return inflation to target.” Still, there was a slight hawkish tilt as the Bank said that the BoC will consider if future rate hikes are necessary to bring supply and demand back into balance and return inflation to target, which means there is potential for more rate hikes after a temporary pause. The Politburo says China will continue to “optimize” its pandemic control measures The Chinese Communist Party ended a politburo meeting that focused on economic policies for 2023 and anti-corruption works in the party on Tuesday. The readout of the meeting released on Wednesday makes no mention of the “dynamic zero-Covid” policy. Instead, it says that China will strive to better coordinate pandemic prevention and control with socioeconomic development and continue to optimize the country’s pandemic control measures. The readout does not reiterate the warning on the property sector and the rhetoric of “housing is for living in, not for speculation” but instead pledges to “be vigilant of large economic and financial risks and strive to prevent systemic risks.” Overall, the readout from the Politburo meeting seems to confirm the policy shift to gradually easing pandemic control measures and supporting the property to the extent of preventing it from causing systemic risks to the financial system and the economy. The readout emphasises stability by the utmost important priority for 2023 and the leadership of the Chinese Communist Party over economic policies as well as economic activities of the country. The readout also pledges to continue the anti-corruption campaign and enhance the governance of  the Chinese Communist Party. China issued 10 additional measures to ease Covid-19 containment practices China’s National Health Commission issued 10 additional measures to further fine-tune and relax the country’s pandemic prevention and control practices. The crux of these new measures are to further reduce the scope and length of lockdowns and quarantines and restrict the use of PCR tests. While these are important relaxation to the current practices, especially in reducing the unit of movement restriction to as narrow as floor or even apartment as opposing to the whole block or community and making quarantine-at-home the default option instead of centralised quarantine. Nonetheless, in comparison with the high expectations in recent days, these measures may be considered a bit underwhelming and do not provide a more definite roadmap of exiting the use of lockdown.  China’s exports shrank 8.7% Y/Y in November In USD terms, China’s exports declined 8.7% Y/Y in November, much weaker than the -3.9% consensus estimate and -0.3% in October. The fall in exports was broad-based across destinations, U.S.  down 3.8% Y/Y, European Union down 9.3% Y/Y, and Japan down 4.6%. Exports to ASEAN slowed to a 7.7% growth in November from 19.7% in October. Imports, falling by 10.6% Y/Y, also below expectations. Some outperforming stocks to watch Generally, there are always outperformers in markets, even when times are tough. A hot scoop for you is that that Campbell Soup shares popped 6% higher on Wednesday, gapping up to $56.18. Its shares are now 15% off their record high that it hit in 2016. That year, the Syrian war escalated, Trump was elected, and there was a string of terror attacks around the world. And amid war talks now escalating this year Campbell Soup shares entered an uptrend, gaining 45% from last November. If recessionary talks and Russia war concerns linger, you might expect this company to continue to benefit. It has free cash flow, and consistent rising profit growth. Another stock that did well overnight was General Mills, rising 2% to an all time high, $87.50 after the wheat price jumped 3% overnight on supply concerns returning. We mentioned General Mills as a company to watch in our Five Stocks to Watch video. Despite the wheat price falling 19% from September after supply returned to the market, General Mills has been able to grow its quarterly profit and free cash flows.      For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Putin’s nuclear warning; China reopening trade is fading – 8 December 2022 | Saxo Group (home.saxo)
Gold Stocks Have Performed Very Well Under Pressure

Gold Stocks Are Looking Interesting As Recessionary Calls Get Louder

Saxo Bank Saxo Bank 08.12.2022 09:24
Summary:  Risk picked up in markets with Putin warning the threat of nuclear war is rising, yet he stopped short of pledging not to use atomic weapons. Traders are also unnerved by growing recessionary fears; and next week’s US CPI read ahead of the Fed's interest rate hike. Campbell Soup boils up on stronger than expected earnings, gold and gold stocks bound higher as they typically do amid recessionary concerns. Gold stock Evolution Mining appears in an uptrend. Watch our six minute video.       What you need to know now about markets Risk picked up in markets with Putin warning the threat of nuclear war is rising, yet he stopped short of pledging not to use atomic weapons. Traders are also unnerved by growing recessionary fears; and next week’s US CPI read. Will it show CPI fell to 7.3% down from 7.7% YoY? And will the Fed hike by 0.5% on December 15 instead of 0.75%? Uncertainty pushed up bond yields, and pressured equities lower with the S&P500 falling for the fifth day. Oil fell for fourth day to $72,01 erasing all of 2022s gains. Focus is on uranium stocks and the URA ETF, as well as metals with iron ore, copper, and gold higher. Agriculture commodities and equities are back in the limelight, with Putin’s threats pushing wheat prices up 3.1%. The major indices, the Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) skid again. Campbell Soup boils up S&P500 fell for the fifth session falling below its 100 day moving average again, but managing to close above it as a sign that sell pressure could be easing, as markets await Friday’s producer inflation. Nevertheless, the S&P500 has now lost about 3.6% over five days of selling with the next level of support at perhaps around 3900 still insight. The Nasdaq 100 fell 0.5% on Wednesday, taking its four-day lost to almost 4.6%. Outperforming stocks on watch - Campbell Soup and wheat giant General Mills Generally, there are always outperformers in markets, even when times are tough. A hot scoop for you is that that Campbell Soup shares popped 6% higher on Wednesday, gapping up to $56.18 after the company reported stronger quarterly earnings than expected. Its shares are now 15% off their record high that it hit in 2016. That year, the Syrian war escalated, Trump was elected, and there was a string of terror attacks around the world. And amid war talks now escalating this year Campbell Soup shares entered an uptrend, gaining 45% from last November. If recessionary talks and Russia war concerns linger, you might expect this company to continue to benefit. It has free cash flow, and consistent rising profit growth. Another stock that did well overnight was General Mills, rising 2% to an all-time high, $87.50 after the wheat price jumped 3% overnight on supply concerns returning. We mentioned General Mills as a company to watch in our Five Stocks to Watch video. Despite the wheat price falling 19% from September after supply returned to the market, General Mills has been able to grow its quarterly profit and free cash flows. Gold stocks charge, Australia’s share market holds six month highs   The Australian benchmark index, the ASX200 (ASXSP200.1) opened 0.3% on Thursday, but holds six month high territory. As for the best performers in the ASX200, clean metal small cap miner Chalice (CHN) rose 12% after drilling confirmed it found new sulphide minerals in Western Australia. CHN would typically be classed as higher risk company as its doesn’t earn income, which is why its share are suffering while interest rates are rising. CHN shares are down 35% YTD. Gold stocks are looking interesting as recessionary calls get louder- gold generally outperforms in a recession. Evolution Mining (EVN) shares are up 5%, continuing to rally it in uptrend and have gained 61%, moving EVN shares up off their 5-year low. In the larger end of town, BHP shares broke higher but profit taking turned its break higher into loss. BHP shares are up 26% this year, with the major miner, along with RIO and Fortescue doing well of late after the iron ore (SCOA) price picked up 7% this month, with China easing restrictions. On the downside, engineering company Downer (DOW) plunged 31% to $3.31, which is its lowest level since April 2020 after Downer downgrading its outlook and flagging irregularities in utilities business. In FX, the AUDUSD slides on Australia exports falling in October, and imports sinking; supporting the RBA remaining dovish Australia’s trade surplus fell in October, but less than expected. This reflects that Australia is earning less income as demand for commodities has fallen from its peak, ahead peak energy season and China easing restrictions. The Australian surplus fell from $12.4 billion to $12.2 billion (when the market expected the surplus to fall to $12 billion flat). In October, exports surprisingly fell 1%, vs market expectations they'd rise 1%, while imports fell 1%. This supports the RBA keeping rates low, as such after the data was released, the AUDUSD immediately fell.   For a weekly look at what to watch in markets - tune into our Spotlight.For a global look at markets – tune into our Podcast.   Source: Video: Risk picks up, oil erases 2022 gains, Campbell Soup boils up, General Mills rises | Saxo Group (home.saxo)
Economic Calendar Details and Trading Analysis - August 7 & 8

The Indian Rupee (INR) Pair Rose To The Highest Levels

TeleTrade Comments TeleTrade Comments 08.12.2022 09:35
USD/INR picks up bids to reverse the previous day’s pullback from monthly high. Seven-week-old descending trend line, bearish MACD signals tease sellers. Sustained trading beyond 200-SMA keeps buyers hopeful of witnessing fresh record top. USD/INR remains firmer around a one-month high as it jostles with a short-term key resistance line near 82.65 during early Thursday. The Indian Rupee (INR) pair rose to the highest levels in a month the previous day before reversing from 82.77. In doing so, the USD/INR pair retreated from a downward-sloping resistance line from October 19 following the Reserve Bank of India’s (RBI) interest rate hike. It’s worth noting that the failure to cross the aforementioned resistance line joins the recently bearish MACD signals to tease USD/INR sellers. However, successful trading beyond the 200-SMA level, around 81.80 by the press time, keeps the pair buyers hopeful. As a result, the quote is likely to remain firmer but the further upside needs validation from the previously mentioned resistance line near 82.65. Following that, a run-up towards the all-time high marked in October around 83.45 can’t be ruled out. Meanwhile, a downside break of the 200-SMA could welcome the USD/INR bears. That said, the late November swing high around the 82.00 round figure also restricts short-term declines of the pair. In a case where USD/INR remains bearish past 82.00, the odds of witnessing a slump towards the monthly low are around 81.00 and then towards the late November swing low of 80.37. USD/INR: Four-hour chart Trend: Further upside expected
Credit Suisse case: Western Assets expects Swiss authorities to act if sentiment doesn't improve

The USD/CHF Pair Snaps The Two-Day Downward Trend

TeleTrade Comments TeleTrade Comments 08.12.2022 09:37
USD/CHF prints mild gains while defending the bounce off weekly support line. 200-HMA probes the run-up targeting 13-day-old resistance line. MACD, RSI suggests extension of recent moves towards the north. USD/CHF picks up bids to 0.9420 during the first weekly positive, so far, in three heading into Thursday’s European session. In doing so, the Swiss Franc (CHF) pair also snaps the two-day downtrend as it grinds near the intraday high. The quote’s latest upside could be linked to the repeated bounce off the one-week-old ascending trend line. Also keeping the buyers hopeful are the bullish MACD signals and the firmer RSI (14) line, not overbought. However, the 200-HMA level surrounding 0.9435 guards the USD/CHF pair’s immediate upside. Also acting as the short-term key resistance line is a downward-sloping trend line from November 21, near 0.9500 by the press time. In a case where the USD/CHF bulls manage to keep the reins past 0.9500, tops marked during November 30 and 21, close to 0.9550 and 0.9600 in that order, will be in focus. On the contrary, pullback moves remain elusive beyond the aforementioned short-term support line, near 0.9370 as we write. That said, the 0.9400 round figure limits the USD/CHF pair’s immediate downside. In a case where the quote stays weak past 0.9370, it becomes vulnerable to testing the lows marked during late March, around 0.9200. USD/CHF: Hourly chart Trend: Limited upside expected
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

The NZD/USD Pair Struggles To Extend The Day-Start Bounce

TeleTrade Comments TeleTrade Comments 08.12.2022 09:45
NZD/USD retreats towards 50-HMA, snaps two-day winning streak. Bearish MACD signals, weekly resistance line keep sellers hopeful Convergence of 200-HMA, ascending trend line from late November challenge further downside. Bulls need validation from 0.6470-75 to refresh yearly top. NZD/USD remains mildly offered around 0.6350 heading into Thursday’s European session. In doing so, the Kiwi pair struggles to extend the day-start bounce off the 50-Hour Moving Average (HMA) while defending the one-week-old bearish trend, as shown by the descending trend line. Also supporting the downside bias are the bearish MACD signals. That said, a clear downside break of the 50-HMA, around 0.6335 by the press time, holds the key to the NZD/USD pair’s short-term downside. Even so, the 200-HMA and an upward-sloping trend line from November 28, close to 0.6300, appears a tough nut to crack for the Kiwi pair sellers. Following that, a slump towards the late November swing low near 0.6155 can’t be ruled out. Meanwhile, recovery moves need not only cross the weekly resistance line, around 0.6365 at the latest, but should also cross the monthly high surrounding 0.6475 to lure the NZD/USD bulls. It’s worth noting that the August month’s peak near 0.6470 adds strength to the 0.6470-75 resistance area. During the quote's sustained trading beyond 0.6475, the 61.8% Fibonacci Expansion (FE) of the pair's moves from November 28 to December 05, close to 0.6510, will be on the NZD/USD buyer's radar. Overall, NZD/USD is likely to remain weak for the short term and the sellers can regain control on a successful break of 0.6300. NZD/USD: Hourly chart Trend: Limited downside expected
The USD/CAD Pair Has The Strong Downside Momentum

USD/CAD Pair: Limited Downside Movement Is Expected

TeleTrade Comments TeleTrade Comments 08.12.2022 09:49
USD/CAD pulls back from intraday high to pare daily gains. Weekly support line holds the key for bear’s entry. Buyers need validation from November’s peak to keep the reins. USD/CAD registers another failure to cross the one-month-old resistance line as it drops to 1.3655 amid the initial hour of Thursday’s European trading session. The Loonie pair’s latest declines also take clues from the impending bear cross on the MACD, as well as RSI (14) pullback from the overbought territory. Although the intraday bears are having an upper hand by the press time, an upward-sloping support line from Monday, close to 1.3650, restricts the USD/CAD pair’s immediate downside. Following that, a southward trajectory towards the 200-Simple Moving Average (SMA) level surrounding 1.3480 can’t be ruled out. However, a three-week-old ascending trend line near 1.3420 appears crucial for the USD/CAD seller’s further dominance as a break of which won’t hesitate to poke the previous monthly low of 1.3226. Alternatively, an upside clearance of the monthly resistance line near 1.3685 will need validation from the 1.3700 threshold and November’s peak of 1.3808 to convince the USD/CAD bulls. In that case, the 1.3855-60 and the 1.3900 level could also probe the Loonie pair’s further upside before highlighting the 1.4000 psychological magnet. USD/CAD: Four-hour chart Trend: Limited downside expected
Analysis Of The EUR/JPY Pair Movement

The Japanese Yen Is Weighed Down By The Weaker Domestic Data

TeleTrade Comments TeleTrade Comments 08.12.2022 09:50
USD/JPY oscillates in a narrow trading band amid subdued trading action on Thursday. A combination of factors undermines the JPY and extends some support to the major. Bets for less aggressive Fed rate hikes keep the USD bulls on the defensive and cap gains. The USD/JPY pair lacks any firm directional bias and seesaws between tepid gains/minor losses through the early European session on Thursday. The pair, however, manages to hold its neck above the daily low and is currently placed around the 136.65-136.70 area, nearly unchanged for the day. The Japanese Yen is weighed down by the weaker domestic data, showing an unexpected current account deficit and an economic contraction during the third quarter. Apart from this, a goodish rebound in the US Treasury bond yields widens the US-Japan rate differential and further contributes to driving flows away from the JPY. This, in turn, assists the USD/JPY pair to attract some buying near the 136.25 region. The intraday uptick, however, lacks bullish conviction and runs out of steam near the 137.25 zone amid subdued US Dollar demand. Expectations that the Fed will slow the pace of its policy tightening cycle keeps the USD bulls on the defensive and caps the upside for the USD/JPY pair. That said, the incoming positive US macro data has been fueling speculations that the Fed might lift rates more than recently projected. This, in turn, holds back traders from placing aggressive bets around the USD/JPY pair and leads to a range-bound price action. Hence, the focus will remain glued to the upcoming FOMC policy meeting on December 13-14. Heading into the key central bank event risk, investors will confront the release of the latest US consumer inflation figures, which should influence the Fed's policy outlook and drive the USD demand. This, in turn, will help determine the next leg of a directional move for the USD/JPY pair. In the meantime, traders on Thursday will take cues from the release of the usual Weekly Initial Jobless Claims data from the US, due later during the early North American session. This, along with the US bond yields and the broader market risk sentiment, will be looked upon for short-term trading opportunities around the USD/JPY pair.
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

The Euro Benefited From The Weakening Of The US Dollar, A Potential Downside Risk For The Australian Dollar Over The Next Few Weeks

Kamila Szypuła Kamila Szypuła 08.12.2022 14:14
The euro stabilized against the US dollar on Thursday and the U.S. dollar clawed back some of the previous day's declines, as the market weighs in on the Fed's rate hike path. The euro benefited from the weakening of the US dollar The Australian dollar against the US currency fell sharply the 10-year Treasury note has fallen almost continuously EUR/USD was unable to overcome its late-June high EUR/USD hit a five-month high earlier this week but was unable to overcome its late-June high of 1.0615. The pair's mood remains bearish today. Compared to the previous day, the EUR/USD pair has fallen and is trading around 1.0469. The euro gained overnight after better-than-expected euro-wide GDP data showed an increase of 0.3% q/q in the third quarter instead of the expected 0.2%. This may indicate that the economic slowdown in Europe may not be as serious as previously feared. The European Central Bank will review its policy on 15 December. The broader weakness of the US dollar also helped strengthen the euro. GBP/USD The pound fell 0.3% against the dollar to $1.2175 and fell 0.35% against the euro. Sterling falls as falling UK house prices add to recession fears. The UK is facing a winter of strikes as rail workers, teachers and nurses demand better wages as the cost of living soared, exacerbated by rising energy costs after the Russian invasion of Ukraine. What's more, the prospects for next year are equally bleak. The UK economy could contract in the coming months. AUD/USD- commodity prices have a negative impact The Australian dollar against the US currency fell sharply this week. Currently, the pair is trading at mid-September levels. From The Australian Dollar (AUD) perspective, commodity prices have a negative impact on the currency coupled with yesterday's weaker GDP data. This morning started positively for the Australian dollar with a better-than-expected trade balance for October, but today the main focus will be on the US labor market data. If the reports turn out to be positive for the dollar, they will bring bears for the AUD/USD pair. Most recently, the Australian dollar got support from the easing of COVID restrictions in China, but that has since dissipated due to the rising number of COVID cases causing concern. The RBA's decision on interest rates also failed to support the Aussie. Overall, the current fundamental headwinds facing the AUD outweigh the US Dollar, which could suggest a potential downside risk for the Australian Dollar over the next few weeks. JPY is weaker The Japanese Yen is slightly weaker so far today despite GDP there narrowly beating forecasts. Annualised GDP was -.08% for the third quarter instead of -1.1% anticipated. The Japanese yen (JPY) which is highly sensitive to shifts in U.S. Treasury yields, fell 0.2% to 136.82. Instead the dollar-yen pair jumped. Currently, the pair is trading around 136.8130. The yield on the 10-year Treasury note has fallen almost continuously since hitting a 15-year high in late October. The Bank of Japan's ultra-loose monetary policy at a time when other central banks around the world are aggressively raising interest rates has made the yen the weakest major currency in the world in recent months. As a result, the USD/JPY exchange rate increased. However, according to some experts, the yen may rise against the US dollar next year. Source: finance.yahoo.com, dailyfx.com, investing.com
There Are Risks That An Increase In The Price Of Oil May Provoke China To Limit The Export Of Diesel Fuel

Saxo Bank Podcast: Look At Crude Oil Dynamics, Natural Gas In Europe, Weak Outlook From US Banks And More

Saxo Bank Saxo Bank 08.12.2022 14:26
Summary:  Today, we look at the overall sense that market players don't want to take any strong new bets until we get to the other side of Dec 31. We also look US treasury yields dropping through pivotal levels at the longer end of the curve and the remarkable fact that the curve remains near its most inverted even as the 2-year yield is at local range lows. The market is increasingly convinced that Fed easing is set to start within 12 months after a bit more hiking next week and early next year. We also look at crude oil dynamics, natural gas in Europe, Swedish housing prices, weak outlook from US banks, the latest woes for Tesla, the Bank of Canada keeping CAD the weakest of G10 currencies, and more. Today's pod features Peter Garnry on equities, Ole S Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Will market be allowed to go into hibernation until 2023? | Saxo Group (home.saxo)
Bank of Canada keeps the rates unchanged. After the release of the US inflation, Fed's Barkin drew attention to cooling demand, but still strong labour market and inflation

The Next Decision Of The Bank Of Canada Will Be Between A 25bp Rate Hike And A Pause

Kenny Fisher Kenny Fisher 08.12.2022 14:44
Bank of Canada surprises with 50 bp hike The Bank of Canada delivered a second straight 50-bp hike on Wednesday, which brought the cash rate to 4.25%. The markets had been split on whether the BoC would raise by 50 bp or 25 bp, pricing in 33 bp ahead of the decision. The move didn’t have an effect on the Canadian dollar, which closed the day unchanged. The BoC decided on the larger rate move due to strong growth, a tight labour market and high inflation. The rate statement noted that inflation is “still too high” but added that core inflation has been falling, which may indicate that inflationary pressures are “losing momentum.” What’s next for the BoC? The rate statement contained a significant hint that the Bank may be close to winding up the current tightening cycle, stating that the BoC was “considering whether the policy rate needs to rise further”. This was in contrast to the October meeting when the BoC stated it “expects that the policy interest rate will need to rise further.” This appears to be a dovish shift, in that additional rate hikes are longer a given. The BoC meets next in late January, and the Bank’s rate decision could again go down to the wire, only this time it will be a choice between a 25 bp increase and a pause. Policy makers have some time to gauge the effect of high rates on the domestic economy and they will also be keeping a close eye on developments in Europe, China and the US. Ahead of next week’s CPI report, the US releases PPI and UoM Inflation Expectations on Friday. There are signs that inflation is weakening, and if this is reflected in Friday’s data, the financial markets could get a boost and the US dollar could lose ground, a scenario we’ve become accustomed to seeing whenever inflation underperforms.   USD/CAD Technical There is weak resistance at 1.3681. The next resistance line is 1.3766 USD/CAD has support at 1.3596 and 1.3484 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Analysis And Trips For Trading The GBP/USD Pair In Short And Long Positions

Despite Grim Background the Bank OF England Will Have To Keep Raising Rates

Kenny Fisher Kenny Fisher 08.12.2022 14:54
The British pound is in negative territory on Thursday. In the European session, GBP/USD is trading at 1.2174, down 0.29%. We’ll get a look at inflation expectations in both the UK and the US on Friday, ahead of the key US inflation report next week. It has been a rather quiet week on the economic calendar, save for the November PMIs out of the US and the UK. The PMIs reflect the different directions taken by the UK and US economies. In the UK, the Services PMI remained in negative territory, unchanged at 48.5. This points to contraction in the services sector, which has been hit by the cost-of-living crisis and economic uncertainty, which has dampened consumer spending. In the US, Services PMIs rose to 56.5, above the previous read of 54.4 and the consensus of 53.5. The services sector is showing expansion and this will lend support to the argument that the US economy is resilient enough to absorb additional rate hikes, as the Fed continues to battle high inflation. BoE expected to raise by 50 bp Like the Federal Reserve, the BoE has also circled inflation as public enemy number one, but Governor Bailey doesn’t have a strong economy to work with. With GDP in negative territory and inflation at a staggering 11.1%, the economy may already be experiencing stagflation. Despite this grim background, the BoE will have to keep raising rates in order to get the upper hand on inflation and keep inflation expectations in check. The BoE is expected to raise rates by 50 bp next week, which would raise the cash rate to 3.50%. As rates continue to rise, there is the danger of the recession becoming deeper and lasting longer. This winter is likely to bring a rash of strikes from public workers, which will keep the BoE on guard for signs of a wage-price spiral, which could complicate the Bank’s efforts to curb inflation.   GBP/USD Technical 1.2169 and 1.2027 are the next support levels GBP/USD is testing support at 1.2169. Below, there is support at 1.2027 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange, 1727 Of Securities Rose In Price

InstaForex Analysis InstaForex Analysis 09.12.2022 08:00
At the close of the New York Stock Exchange, the Dow Jones rose 0.55%, the S&P 500 rose 0.75%, and the NASDAQ Composite rose 1.13%. Dow Jones The leading performer among the components of the Dow Jones index today was Nike Inc, which gained 3.03 points (2.80%) to close at 111.36. Quotes of Cisco Systems Inc rose by 0.81 points (1.68%), closing the auction at 48.99. Boeing Co rose 2.58 points or 1.46% to close at 179.08. The least gainers were Goldman Sachs Group Inc, which shed 1.84 points (0.51%) to end the session at 358.08. American Express Company was up 0.65 points (0.42%) to close at 154.12, while 3M Company was down 0.35 points (0.28%) to close at 126. 00. S&P 500 Leading gainers among the S&P 500 index components in today's trading were SVB Financial Group, which rose 6.89% to 222.64, NVIDIA Corporation, which gained 6.51% to close at 171.69, and shares of Ceridian HCM Holding Inc, which rose 5.05% to end the session at 65.83. The least gainers were Lincoln National Corporation, which shed 10.86% to close at 31.45. Shares of Avery Dennison Corp shed 6.54% to end the session at 179.22. Quotes of Aptiv PLC decreased in price by 4.47% to 93.42. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Pharvaris BV, which rose 356.57% to hit 11.46, Rent the Runway Inc, which gained 74.26% to close at 2.37, and also shares of Qutoutiao Inc, which rose 59.66% to end the session at 0.83. Eiger Biopharmaceuticals Inc was the biggest loser, shedding 69.53% to close at 1.17. Relmada Therapeutics Inc lost 47.84% to end the session at 2.17. Design Therapeutics Inc (NASDAQ:DSGN) was down 33.33% at 8.46. Numbers On the New York Stock Exchange, the number of securities that rose in price (1,727) exceeded the number of those that closed in the red (1,352), while quotes of 123 shares remained virtually unchanged. On the NASDAQ stock exchange, 2154 companies rose in price, 1554 fell, and 218 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.72% to 22.29. Gold Gold futures for February delivery added 0.18%, or 3.25, to $1.00 a troy ounce. In other commodities, WTI January futures fell 0.44%, or 0.32, to $71.69 a barrel. Futures for Brent crude for February delivery fell 1.13%, or 0.87, to $76.30 a barrel. Forex Meanwhile, on the Forex market, EUR/USD rose 0.50% to hit 1.06, while USD/JPY edged up 0.01% to hit 136.62. Futures on the USD index fell 0.28% to 104.76. Relevance up to 03:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/304270
The USD/JPY Price Seems To Be Optimistic

USD/JPY Pair Is Waiting For The Development Of The Downtrend

InstaForex Analysis InstaForex Analysis 09.12.2022 08:01
The yen was happy that the dollar weakened in yesterday's European session and this morning it went on to rise further. The Japanese currency, however, has a difficult task to overcome the convergence pressure with the Marlin oscillator on the daily chart. It might result in two things, which is crossing the target support at 133.25 and a double convergence. On the four-hour chart, the price started to fall from the MACD line. Now the price is crossing the support of the balance line, and Marlin is already in negative territory. Signals have synchronized, we are waiting for the development of the downward movement. The target is 133.25. Relevance up to 03:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329360
The Market May Continue To Buy The Pound (GBP) This Week

Now The Price Of The GBP/USD Pair Is Falling

InstaForex Analysis InstaForex Analysis 09.12.2022 08:04
The pound did not settle below 1.2200. This level is probably not defined correctly, so it was modified and moved a little bit lower, to 1.2155 - to the low of May 13, also reached on November 24, as resistance. Now we see that the price falling under 1.2155 on December 6 was false. If the price grows to the resistance at 1.2410, there might be a triple divergence with the Marlin oscillator (turquoise line in the oscillator). If the price gathers its strength and suddenly goes under 1.2155, the signal line of Marlin will overcome the support of the lower limit of the range and will start the medium-term decline. We are waiting for progress. On the four-hour chart, the price has crossed the resistance of the MACD line. The Marlin oscillator helped in this, moving into the positive area. Short-term growth. We are waiting for it to be done. Relevance up to 03:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329362
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The EUR/USD Price Received A Small Impulse For Growth

InstaForex Analysis InstaForex Analysis 09.12.2022 08:07
The euro continues to move sideways as we expected in previous reviews, in anticipation of the Federal Reserve meeting. There is growth in the current phase of the sideways movement. The Marlin oscillator is directed down, which on the one hand may indicate a change of the sideways phase to a decline, but such a signal on the daily chart looks weak, so the second option still suggests reaching the 1.0615/42 range. This might be done by Wednesday evening, when the Fed will announce its monetary policy decision. On the four-hour chart, the Marlin has already moved into the growth area. The price received a small impulse for growth with a bounce from the MACD indicator line. We do not observe strong growth. Relevance up to 03:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/329364
The EUR/USD Pair Maintains The Bullish Sentiment

The European Currency (EUR) Will Fully Recover Its Losses

InstaForex Analysis InstaForex Analysis 09.12.2022 08:09
The EUR/USD currency pair on Thursday maintained its previous movement pattern. Once more, the price could not surpass the moving average line, which is now giving rise to grave concerns. Recall that the moving average differs from a reinforced concrete line like Senkou Span B or Kijun-sen. Rather, it serves as a guideline for a short-term trend. However, overcoming it has no sacramental truth if the trend movement abruptly stops (there is no regular updating of highs or lows). The pair, however, cannot fall a few dozen points below the moving average line. What does this mean? Are no bears present at all, or is a significant fall anticipated? As strange as it may sound, we are still waiting for the US currency to strengthen after two weeks of anticipating a downward correction. Since there aren't any macroeconomic statistics this week, the euro hasn't had any grounds for growth in the last three to four weeks. Even reports like the GDP are now being worked out by the market, which previously chose to ignore them due to the complete lack of information. As a result, at this point, the pair is unable or unwilling to adjust even a few hundred points. We are sick of stating that traders have already anticipated events like the US midterm elections and changes to the ECB or Fed's monetary policy on numerous occasions. Yes, the Fed will meet next week, but what will the market gain from it if it already knows that rates will increase by 0.5% rather than 0.75% as they did at the previous four meetings? Undoubtedly, a lot of time has been spent working out this factor. Furthermore, since the rate of inflation in the EU has yet to slow down, it is still too early to anticipate a change in the ECB's attitude. As a result, we do not anticipate any modifications to the monetary strategy from the European regulator. If so, why has the value of the euro currency increased in recent weeks if the rate increase of 0.75% hasn't also been planned for a long time? What can the pair be anticipated to do in December? It is reasonable to assume that it will now experience the same downward correction. The only option left for traders is to fix at least some of the long positions because all potential drivers of the growth of the European currency have already been identified. Although we do not rule out the possibility that the euro will continue to rise over the coming years, this growth is occurring too quickly and sharply. It has risen by 1,000 points in just two months. Remember that 2,800 points made up the entire downward trend, which lasted two years. This means that by March or April of the following year, the European currency will fully recover its losses from the previous two years. This is not possible. It is possible to comprehend why strong and long-term growth should be anticipated from the pair if there were good reasons for this, such as a sharp improvement in the global geopolitical situation or a stronger ECB rate hike than the Fed. But which global factors currently support the euro? Threatening to last for many years is the geopolitical conflict in Ukraine. For the parties to the conflict and the entire world, no one can predict when a new escalation will start and how it will end. The Fed's rate will undoubtedly increase to 5%, possibly even higher, and will stay there for at least one and a half to two years. The ECB rate, however, is covered with much less information. Most likely, it will also keep expanding, but as we already mentioned, not all EU nations can bear the burden on their own economies. As a result, the ECB will adopt a less aggressive monetary policy than the Fed. If so, then the dollar, not the euro, is also growing as a result of this. As of December 9, the euro/dollar currency pair's average volatility over the previous five trading days was 115 points, considered "high." As a result, we anticipate that the pair will fluctuate on Friday between 1.0444 and 1.0643. A downward reversal of the Heiken Ashi indicator will indicate a new attempt to correct it. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: The EUR/USD pair is still moving upward. Therefore, before fixing the price below the moving average, we should consider long positions with targets of 1.0623 and 1.0612. No earlier than fixing the price below the moving average line with targets of 1.0376 and 1.0254 will sales become relevant. Explanations of the illustrations: Linear regression channels help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching Relevance up to 01:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329354
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

The British Economists Made Unfavorable Predictions For The British Economy

InstaForex Analysis InstaForex Analysis 09.12.2022 08:12
Also, on Thursday, the GBP/USD currency pair failed to break through the moving average line. If you examine the price movement since November 4 (or for a full month), you will see that only twice has the price been able to break below the moving average and quickly go back to the area above it. The British pound has increased by almost 2,000 points over the past 2.5 months, and the two-year downward trend is about 4,000 points. When there were good reasons and grounds for this, the pound fell by 4,000 points for two years. It has now increased by 2000 points in just 2.5 months. Depending on what? One more time: the likelihood of another UK government change, the failure of Liz Truss' tax proposals, and the Supreme Court's decision to deny Scotland the right to hold a referendum are significant factors. Remember that the Bank of England has already increased the key rate eight times, which should help the pound. But are these explanations sufficient for the pair to change by 50% of the overall trend in just 2.5 months? Even though we have yet to see a single typical downward correction over the past 2.5 months. The pound's increase has been too brisk and abrupt. A significant pullback down is required for a new upward trend to continue (if one is, of course). There are no headlines, important reports, speeches, or world events. Typically, one major global issue dominates the information landscape, even though it may not directly affect the market's mood. Recent events include the UK's election of the Prime Minister, Liz Truss' resignation, the rejection of Truss' tax proposals, the passing of Queen Elizabeth II, and the Supreme Court of Great Britain's decision to deny Scotland the right to a referendum. Only those subjects that have recently been exclusively related to the UK are listed. As we can see, there was no fundamental issue for traders. Additionally, information was occasionally obtained from the Bank of England, which made every effort to revive the economy and balance the financial system. The early British economists Andrew Bailey and others made unfavorable predictions for the British economy, which also affected the mood. Then what? The Scottish Referendum issue is resolved, and all disputes between the EU and Britain are put on hold. There needs to be more information from BA, the Ministry of Finance, or Rishi Sunak. In reality, there is nothing for traders to react to. Additionally, only some have access to strong macroeconomic reports, and even when they do, the market only sometimes responds to them logically. The topic of the US congressional elections recently dominated the information sphere. Again, it is doubtful that this subject directly affected the dollar's value, but it at least provided fodder for conversation. Every time the Fed met, the rate increased by 0.75%. Then what? Although the Fed's monetary policy is tightening, the dollar is no longer rising. Long-term Fed interest rates will be high, but the dollar cannot adjust. Since important data is released every two to three days, there is little to talk about in the foreign exchange market. Even macroeconomic reports are released regularly. The fundamental background currently leaves much to be desired in general. The strategy enables the British pound to grow indefinitely, but it is simple to use when the price is at its highest point, and all indicators point upward. As before, at the very least, the price must surpass the moving average, which it has yet to do, to expect a strong downward correction. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 141 points. This value for the dollar/pound exchange rate is "very high." Thus, we anticipate movement inside the channel on Friday, December 9, constrained by 1.2076 and 1.2357. The Heiken Ashi indicator's downward reversal once more indicates an attempt by the pair to correct. Nearest levels of support S1 – 1.2207 S2 – 1.2146 S3 – 1.2085 Nearest levels of resistance levels R1 – 1.2268 R2 – 1.2329 R3 – 1.2390 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair attempts to move upward. Therefore, until the Heiken Ashi indicator turns down, you should maintain buy orders with targets of 1.2329 and 1.2357. With targets of 1.2085 and 1.2024, open sell orders should be fixed below the moving average. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching. Relevance up to 01:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329356
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

The Current Information Flow Is Not Able To Provoke A Stable Price Movement Of The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 09.12.2022 08:22
Next week the US Federal Reserve and the European Central Bank will hold their last meetings of the year. These events will be the final chord of the year - at least for euro-dollar traders. The Fed will announce its verdict on December 14 and the ECB the next day. Also, the US core inflation data will be released on December 13, which will also trigger higher volatility amongst the dollar pairs. In other words, the currency market is going to experience a lot of turbulence next week which will be followed by a pre-Christmas, pre-New Year's (and then post-New Year's) calm. As a rule, the market's activity slows down for a few weeks after the December meetings of the key central banks. Although, given the general unstable situation in the world (geopolitical tensions, COVID in China), 2022 may be an exception in this regard. At the moment, the EUR/USD pair is drifting within the 5th figure, just continuing its current movement, reflexively reacting to the current information flow. Recently, bears have repeatedly tried to settle within the 4th figure, while bulls still try to conquer the 6th price level. But both sides are acting quite cautiously ahead of high-profile events in December, which is why the pair is actually winding circles around the 1.0500 mark. If we consider intraday trading, then, as they say, "day to day is not necessary." Bears dominated on Monday and Tuesday, pulling the price to the 1.0460 mark. Then bulls seized the initiative, regaining the lost positions. At the moment, the pair is just trading around 1.0550-1.0560. Looking ahead, the current information flow is not able to provoke a stable price movement of the pair – either down or up. Any trader, who opens short or long positions, will do so while thinking of next week's events. Therefore, at the first opportunity, the trader will lock in the profit and will not "play for a long time". Consequently, any price fluctuation is unreliable. Considering last week's dynamics, we can say that the pair is trading in the range of 1.0450-1.0570. But again, this is a temporary price tier. So far, the bullish/bearish momentum emerges and eventually ends within this range. It is obvious that traders will surpass this range by next week, the only question is in which direction. This will depend primarily on the outcome of the Fed and ECB meetings. And at the moment, traders are forced to make decisions under conditions where they don't have any "relevant" information. The Fed members observe the "blackout period" (a 10-day period prior to the meeting), so now traders are left "on their own" - one-on-one with an army of specialized experts and insiders. Information coming in is quite diverse and most importantly, contradictory, so they cannot decide on the vector of their movement. For example, on Thursday the analysts of Danske Bank published their forecast, which provoked increased volatility while the economic calendar is empty. According to currency strategists of this Danish bank, the Fed and the ECB will raise interest rates by 50 points in December. Experts revised their earlier forecast, according to which the Fed was to raise the rate at the December meeting by 75 points. Now they see the following actions of the US central bank: 50 basis points in December, then 50 points in February and 25 in March. That is the final point, according to Danske Bank, will be at the level of 5.25%, but it will be achieved at a slower pace. As for the ECB, Danske Bank analysts suggest a hawkish bias. According to their forecasts, the ECB will raise rates in December by 50 points and will continue to raise them during the first quarter of 2023 - at least to 2,75%, but with possible "prolongation" towards further hikes. In addition, according to Danske Bank, at the end of the December meeting, the ECB will present key principles of the end to reinvestments under the APP process, in which reinvestments will almost come to a full stop. The Danish bank's forecast was interpreted in favor of the euro, thanks to which the bulls could again get close to the middle of the 5th figure. As you know, ECB representatives are divided into two camps (or voice a neutral position) - some are in favor of continuing aggressive policy, while others are in favor of slowing down the pace of tightening of monetary policy. Therefore, there is still intrigue on this issue. ECB President Christine Lagarde, who made a speech on Thursday, did not add clarity, as her speech was ceremonial in nature. Opening the annual conference of the European Council on systemic risks, she voiced common phrases, saying that the unstable global environment "poses sizable risks for financial stability in Europe", while the deteriorating prospects of the global economy only increase these risks. Therefore, the EUR/USD pair, most likely, will drift further in a conditional price range of 1.0450-1.0570 with possible testing of 1.0600, if the only significant releases on Friday (the index of producer prices in the US and the consumer sentiment index from the University of Michigan) will come out in the red zone. But again - any price fluctuations this week should be treated with a certain amount of skepticism, because the decisive battle of bears and bulls is still ahead.     Relevance up to 01:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329358
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

EUR/USD Pair: It Is Very Likely That The Bears Will Take Control Of The Pair

InstaForex Analysis InstaForex Analysis 09.12.2022 08:29
Technical outlook: EURUSD rallied through the 1.0586 high intraday on Friday, just a few pips shy from its recent swing high at 1.0595. A bearish reversal from here will confirm that a lower top is in place and that the bears are back in control. The single currency pair is seen to be trading around 1.0574 at this point in writing as the bears aim to break below 1.0420 in the near term. On the flip side, if prices break above 1.0595, this price action could open the door to test up to the 1.0700-50 high before giving in to the bears again. Looking at the wave structure, the larger-degree corrective wave, which had begun from 0.9535 earlier, looks mature. It is just a matter of time when the bears enter the market and drag prices lower towards 1.0000 at least. EURUSD is facing immediate resistance at 1.0595, followed by 1.0700-50; while support comes in around 1.0420, followed by 1.0220 and lower respectively. A break below 1.0420 or above 1.0585 will be now required to gauge the next big move. A higher probability remains for the bears to be back in control sooner than later. Trading idea: Potential bearish reversal against 1.0700 Good luck! Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/304296
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

FX: EUR/USD Will Struggle To Trade Sustainably, Price Action In G10 Currencies Has Been Quite Mixed

ING Economics ING Economics 09.12.2022 08:52
The US dollar is still battling December seasonality, which is leading it to weaker levels. However, the market will mainly focus on next week rather than going in one direction. The European Commission may release a new assessment of Hungary USD: Still fighting seasonal trends Global risk sentiment recovered yesterday after a few grim sessions for global equities, and the dollar faced some broad-based depreciation. As highlighted in our recent FX commentaries, the dollar tends to be seasonally weak in December, so this is a month of damage limitation for dollar bulls like ourselves. Price action in G10 currencies has been quite mixed, with the best performers being AUD, CHF and CAD yesterday. Among the pro-cyclical currencies, we continue to think that CAD has a better chance of outperforming next year thanks to limited exposure to China and Europe’s economic woes while being positively correlated to a rise in energy prices, which is our commodity team’s baseline scenario. The US calendar includes PPI and University of Michigan survey numbers today. With markets being focused on various gauges of inflation, expect dollar sensitivity to these data releases. The dollar could stabilise around current levels as markets gear up for the last week of action (Fed, ECB and BoE meetings) of 2022. DXY may stay around 104.50/105.00 today. Francesco Pesole EUR: Rally above 1.06 would be premature Markets are pricing in around 55bp of tightening ahead of the ECB meeting next week, and with no more speakers before the rate announcement and no key data releases except for the ZEW surveys on Tuesday, we doubt that rate expectations will move much in the coming days. Our base case is still that EUR/USD will struggle to trade sustainably above 1.0600, and is mostly facing downside risks into year-end as the dollar could regain some ground on global risk uncertainty and rebounding energy prices. Francesco Pesole GBP: Keeping an eye on key technical levels The only release to highlight in the UK calendar today is the Bank of England’s inflation attitude survey. Still, markets appear to have cemented their expectations around a 50bp rate hike by the BoE next week, and this may not change drastically before the policy announcement. GBP/USD could hover around 1.22 today, but risks are tilted to the 1.2126 200-day Moving Average being tested soon, in our view. EUR/GBP is trading around the 0.8630 100-day MA, and while we have less of a clear directional call on this pair in the short term, we see upside risks in the longer run. Francesco Pesole CEE: European commission may issue new assessment on Hungary Another tough week in the CEE region is behind us, but Friday has a lot to offer. Apart from the global story, we will be watching the market reaction to yesterday's National Bank of Poland press conference, which was not as dovish as expected. Governor Glapinsky said that the end of the hiking cycle has not yet been decided. On the other hand, he also mentioned falling inflation and a return to single digits numbers. That said, we believe the cycle has been closed and we do expect higher inflation than the central bank. Today the economic calendar is thin in the region, but we may hear more headlines from the European Commission regarding Hungary. An updated European Commission assessment could be released today, which should take into account the newly passed laws on the Hungarian side and thus be more in line with EU requirements. This follows the Commission's follow-up to Tuesday's Ecofin meeting and the member countries that made the request. The outcome of the assessment should be positive for Hungary and for the markets, but there've been plenty of surprises so far in this story.  Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The USD/IDR Pair Is Expected A Further Downside Movement

Bank Indonesia Efforts For Containing Stubborn Inflation Are Gaining Momentum

TeleTrade Comments TeleTrade Comments 09.12.2022 09:08
USD/IDR is facing barricades while surpassing the immediate hurdle of 15,600 on weaker Indonesian Retail Sales. Indonesian annual Retail Sales have landed at 3.7%, lower than the prior release of 4.6%. Going forward, US Factory-gate price index will be of significant importance. The USD/IDR pair is attempting to climb above the immediate hurdle of 15,600 in the Asian session. The asset is not getting strength amid the release of downbeat Indonesian Retail Sales data. The annual economic data has landed at 3.7%, lower than the prior release of 4.6%. A decline in Retail Sales indicates subdued retail demand by households. The Inflation rate in the Indonesian economy is declining for the past three months till October. Now, a further decline in Retail Sales will lead to more exhaustion in the inflationary pressures. This is going to delight Bank Indonesia (BI) as their efforts for containing stubborn inflation are gaining momentum. Meanwhile, the US Dollar Index (DXY) is hovering around day’s low at 104.50 as the risk-appetite theme is gaining significant momentum. S&P500 futures have recorded marginal morning losses and have resumed their recovery after a three-day losing streak. The 10-year US Treasury yields have sensed pressure and have dropped to near 3.46% as the Federal Reserve (Fed) is set to announce a less hawkish monetary policy next week. On Friday, investors will keep an eye on the United States Producer Price Index (PPI) data. The factory-gate prices will provide fresh cues to the market participants. According to the consensus, the headline PPI in the United States is expected to drop to 7.4% from the prior release of 8.0%. Also, the core PPI is seen lower at 6.0% vs. the former figure of 6.7% on an annual basis. A decline in the factory-gate price index will provide fresh ground for a further decline in inflation.
China's Ninth Straight Month of Gold Holdings Increase; Oil Resilient Despite Russian Tanker Incident; Dollar Supported by Bond Supply Concerns

The USD/INR Pair Pays Little Heed To The Firmer Oil Price

TeleTrade Comments TeleTrade Comments 09.12.2022 09:11
USD/INR takes offers to refresh intraday low as riskier assets cheer US dollar weakness. Recovery in Crude Oil fails to challenge Indian Rupee buyers amid cautious optimism at home and abroad. US consumer sentiment, inflation expectations should be watched for fresh impulse. USD/INR cheers the US Dollar weakness as it drops to the lowest level in three days, around 81.15 during early Friday. In doing so, the Indian Rupee (INR) pair pays little heed to the firmer Oil price, which generally has inverse relations with the INR moves. Although the weekly prints tease the greenback buyers, the US Dollar Index (DXY) prints a three-day downtrend near 104.60, down 0.21% intraday as traders brace for the next week’s busy schedule comprising the Federal Reserve (Fed) monetary policy meeting and the inflation data, not to forget today’s consumer-centric figures. In doing so, the greenback’s gauge versus the six major currencies traces the US Treasury bond yields while justifying the downbeat US data. Talking about the latest data, US Initial Jobless Claims matched 230K market consensus for the week ended on December 02, versus the upwardly revised 226K prior. Further, the four-week average also printed 230K figure compared to 229K in previous readings. Earlier in the week, the US Goods and Services Trade Balance deteriorated to $-78.2 billion versus $-79.1 billion expected and $-73.28 billion prior. Further, the final readings of the Unit Labour for Q3 eased to 2.4% QoQ versus 3.5% first estimations. On the other hand, WTI crude oil prints the first daily gain in six, up 1.08% intraday near $72.35 by the press time, as geopolitical fears join hopes of more demand from China to favor the energy buyers. Even so, the black gold remains near the yearly low marked the previous day. Against this backdrop, S&P 500 Futures and stocks in the Asia-Pacific zone print mild losses while the US 10-year Treasury bond yields remain pressured around the three-month low marked on Wednesday. Moving on, intraday USD/INR traders should pay attention to preliminary readings of the Michigan Consumer Sentiment Index for December, expected 53.3 versus 56.8 prior. Also important to watch will be the University of Michigan’s (UoM) 5-year Consumer Inflation Expectations for the said month, 3.0% previous readings. Technical analysis USD/INR justifies the failure to cross a seven-week-old resistance line, around 82.65 by the press time, as bears approach 50-DMA support, at 81.95 as we write
The Downside For The AUD/USD Pair Is Likely To Remain Cushioned

The Aussie Asset Has Gained Strength As China PPI Displayed

TeleTrade Comments TeleTrade Comments 09.12.2022 09:17
AUD/USD is aiming to surpass 0.6800 as the market sentiment has become extremely bullish. China’s factory-gate price deflation has cemented a dovish commentary from the PBOC. A decline in the US PPI data is going to delight the Fed as expectations for a drop in inflation will get strengthened. The AUD/USD pair is gathering momentum to surpass the immediate resistance of 0.6800 in the Tokyo session. The Aussie asset has gained strength as investors have underpinned the risk appetite theme. The major is holding its morning gains amid an intense sell-off in the US Dollar Index (DXY). The USD Index is hovering around 104.50 and is expected to re-test weekly lows around 104.10. Meanwhile, S&P500 futures have recovered morning losses and have resumed their upside journey. The 500-united States stock basket futures are looking to extend their gains as a slowdown in the interest rate hike pace looks imminent. While the 10-year US Treasury yields have dropped to near 3.46%. The Australian Dollar has picked strength as China’s factory-gate price index has shown a deflation. China Producer Price Index (PPI) displayed a contraction of 1.3%. Also, the annual inflation rate has dropped to 1.6% but remained higher than anticipation. A significant decline in inflationary pressures is going to create troubles for the Chinese administration. No doubt, a dovish commentary from the People’s Bank of China (PBOC) in the upcoming monetary policy meeting has been cemented. It is worth noting that Australia is a leading trading partner of China and fresh economic stimulus in the Chinese economy will also support the Australian Dollar. Meanwhile, investors in the United States are focusing on Producer Price Index (PPI) data. As per the projections, the headline PPI is expected to drop to 7.4% from the prior release of 8.0%. Also, the core PPI is seen lower at 6.0% vs. the former figure of 6.7% on an annual basis. A decline in US factory-gate price index is going to delight the Federal Reserve (Fed), which is working on foot to achieve price stability as early as possible.  
The USD/CAD Pair Has The Strong Downside Momentum

USD/CAD Pair Remains Pressured And Downside Movement Is Expected

TeleTrade Comments TeleTrade Comments 09.12.2022 09:22
USD/CAD fades bounce off intraday low, struggles to reject two-day downtrend. Multiple hurdles to the north join downbeat RSI conditions to challenge bulls. Sellers have comparatively smoother roads to travel on breaking 1.3560. USD/CAD retreats to 1.3588 as bulls struggle to defend the first daily gains in three heading into Friday’s European session. In doing so, the Loonie pair justifies downbeat RSI (14), as well as failures to cross the near-term key hurdles, in teasing the bears. That said, the latest lows surrounding 1.3560 holds the key for the USD/CAD seller’s entry, a break of which could quickly drag the quote towards the December 02 swing high near 1.3520. Following that, the 1.3500 round figure may act as an intermediate halt before highlighting the two-week-old support line, close to 1.3435 at the latest, for the pair bears. In a case where USD/CAD bears dominate past 1.3435, the odds of witnessing a fresh monthly low, currently around 1.3385, can’t be ruled out. On the flip side, a one-week-old horizontal resistance area near 1.3600 restricts the immediate upside of the USD/CAD pair. Also acting as the key barrier for the pair buyers is the 1.3640-45 area that encompasses multiple levels marked since November 29. Overall, USD/CAD remains pressured unless the quote successfully breaks the 1.3645 hurdle. USD/CAD: Hourly chart Trend: Further downside expected
Analysis Of USD/CHF Pair: The Swiss Currency Pair Rebounds

Risk Appetites Have Increased Because Of The US Readiness For Human Rights Sanctions On Russia And China

TeleTrade Comments TeleTrade Comments 09.12.2022 09:25
USD/CHF holds lower ground in the weekly low, down for the fourth consecutive day. Mixed sentiment, downbeat US Treasury yields weigh on US Dollar. Early signals for next week’s US inflation, monetary policy meetings of Fed, SNB will be in focus. USD/CHF prints a four-day downtrend as sellers poke the lowest levels in eight months around 0.9325, marked the last Friday. That said, the Swiss Franc (CHF) pair remains pressured around 0.9335 during early the early Asian session. The quote’s latest losses could be largely linked to the broad-based US Dollar weakness ahead of the next week’s busy schedule comprising the Federal Reserve (Fed) monetary policy meeting and the inflation data, not to forget today’s consumer-centric figures. In doing so, the major currency pair ignores challenges to the sentiment emanating from China and Russia, as well as fears of the global recession. US Dollar Index (DXY) prints a three-day downtrend near 104.60, down 0.22% intraday while tracing downbeat US Treasury yields and justifying the softer US data printed of late. On Thursday, US Initial Jobless Claims matched 230K market consensus for the week ended on December 02, versus the upwardly revised 226K prior. Further, the four-week average also printed 230K figure compared to 229K in previous readings. Earlier in the week, the US Goods and Services Trade Balance deteriorated to $-78.2 billion versus $-79.1 billion expected and $-73.28 billion prior. Further, the final readings of the Unit Labour for Q3 eased to 2.4% QoQ versus 3.5% first estimations. Talking about the risk catalysts, Organisation for Economic Co-operation and Development (OECD) Head Mathias Hubert Paul Cormann joined World Trade Organization (WTO) Director Dr. Ngozi Okonjo-Iweala to highlight the risk of the global recession. On the same line is China’s Premier Li Keqiang. However, US Treasury Secretary Janet Yellen’s rejection of recession woes and hawkish expectations from the Fed fails to underpin the DXY rebound. US Treasury Secretary Yellen said on Thursday night that "Recession is not inevitable," while also declining to say whether the dollar had peaked against other currencies. Elsewhere, news from the Wall Street Journal (WSJ), suggesting the US readiness for human rights sanctions on Russia and China, recently weighed on the market’s risk appetite. However, the previous headlines signaling China’s interest in rebuilding ties with the US and easing the Zero-Covid policy tried to defend the optimists. The mixed mood could be witnessed in mildly bid S&P 500 Futures and downbeat US Treasury yields, as well as slightly positive commodities, which in turn weigh on the US Dollar. Moving on, the USD/CHF pair traders should pay attention to the preliminary readings of the Michigan Consumer Sentiment Index for December, expected 53.3 versus 56.8 prior, for fresh impulse. Also important to watch will be the University of Michigan’s (UoM) 5-year Consumer Inflation Expectations for the said month, 3.0% previous readings. Above all, next week’s monetary policy meeting by the Swiss National Bank (SNB) and the Federal Open Market Committee (FOMC) will be crucial for the pair traders to follow. Technical analysis A daily closing below the monthly bottom surrounding 0.9325 becomes necessary for the USD/CHF bears to keep the reins and approach March 2022 low near 0.9195.  
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The US CPI Report Will Provide A Fresh Directional Impetus To The NZD/USD Pair

TeleTrade Comments TeleTrade Comments 09.12.2022 09:32
NZD/USD gains traction for the fourth straight day on Friday amid the prevalent USD selling bias. Bets for less aggressive Fed rate hikes keep the US bond yields depressed and weigh on the buck. A positive risk tone further undermines the safe-haven buck and benefits the risk-sensitive Kiwi. The NZD/USD pair edges higher for the fourth successive day on Friday and climbs back closer to the top end of its weekly trading range. The pair sticks to its modest gains through the early European session and is currently placed around the 0.6400 round-figure mark. A combination of factors drags the US Dollar closer to a multi-month low set earlier this week, which, in turn, is seen acting as a tailwind for the NZD/USD pair. Rising bets for a less aggressive policy tightening by the Fed, along with a generally positive risk tone, continue to weigh on the safe-haven greenback. The markets seem convinced that the US central bank will slow the pace of its rate-hiking cycle and have been pricing in a relatively smaller 50 bps lift-off in December. Furthermore, the optimism over the easing of strict COVID-19 restrictions in China remains supportive of a recovery in the global risk sentiment. That said, the incoming positive US economic data fuels speculations that the US central bank might lift rates more than projected, which should limit losses for the USD. Moreover, worries about a deeper global economic downturn might further contribute to capping the upside for the growth-sensitive New Zealand Dollar. Traders might also refrain from placing fresh bets ahead of next week's key data/event risks - the US consumer inflation figures and the FOMC meeting. The crucial US CPI report will influence the Fed's policy outlook, which, in turn, will drive the USD and provide a fresh directional impetus to the NZD/USD pair. Hence, it remains to be seen if bulls are able to retain control or if the intraday move-up runs out of steam at higher levels. Nevertheless, the NZD/USD pair has reversed modest weekly losses and remains well within the striking distance of its highest level since mid-August, around the 0.6440-0.6445 area touched on Monday. Market participants now look to the US economic docket, featuring the release of the Producer Price Index (PPI) and the Prelim Michigan Consumer Sentiment Index. This, along with the risk sentiment, could provide some impetus and allow traders to grab short-term opportunities around the NZD/USD pair on the last day of the week.
Bitcoin price may be stealing the show soon. We could say that this week Bank of Japan decision draws more attention than usually

The Prospects For A Relatively Smaller Fed Rate Hike Benefits The Japanese Yen (JPY)

TeleTrade Comments TeleTrade Comments 09.12.2022 09:40
USD/JPY drifts lower on Friday amid heavy follow-through selling around the USD. Bets for less aggressive Fed rate hikes, depressed US bond yields weigh on the buck. Traders, however, seem reluctant ahead of next week’s key US data/FOMC meeting. The USD/JPY pair comes under fresh selling pressure on the last day of the week and drops to a multi-day low, albeit lacks follow-through. The pair trims a part of its intraday losses and trades around the 136.25-136.30 region during the early European session, still down over 0.25% for the day. The US Dollar prolongs its steady descent for the third successive day amid firming expectations for a less aggressive policy tightening by the Fed, which, in turn, is seen weighing on the USD/JPY pair. In fact, the markets seem convinced that the US central bank will slow the pace of its rate-hiking cycle and have been pricing in a 50 bps lift-off in December. The prospects for a relatively smaller rate hike contributes to the ongoing decline in the US Treasury bond yields. This, in turn, results in the narrowing of the US-Japan rate differential, which benefits the Japanese Yen and exerts additional downward pressure on the USD/JPY pair. The downside, meanwhile, seems limited, warranting caution for bearish traders. The incoming positive economic data from the United States has been fueling speculations that the US central bank might lift interest rates more than estimates. This might hold back traders from placing aggressive bearish bets around the USD and offer some support to the USD/JPY pair ahead of next week's key US macro data and the central bank event risk. The market focus remains on the highly-anticipated FOMC policy meeting on December 13-14. Moreover, the latest US consumer inflation figures are also scheduled for release next Wednesday, which will influence the Fed's policy outlook. This, in turn, will play a key role in driving the USD in the near term and provide a fresh directional impetus to the USD/JPY pair. In the meantime, traders on Friday will take cues from the US economic docket, featuring the release of the Producer Price Index (PPI) and the Prelim Michigan Consumer Sentiment Index. This, along with the US bond yields, could provide some impetus to the USD. Apart from this, the broader risk sentiment might produce some trading opportunities around the USD/JPY pair.  
The USD/JPY Price Reversed From The Lower Limit

Analysis Of The US Dollar To Japanese Yen Pair

InstaForex Analysis InstaForex Analysis 09.12.2022 09:41
The bearish trend in USD/JPY broke as soon as the quotes hit 136. However, after a sharp rise, the pair went back to the 50% retracement level. The current situation presents a great opportunity to open long positions, especially since there is a three-wave pattern, in which wave A represents the bullish pressure this week. This means that traders can enter the market by buying from the 50% retracement level or from a false breakdown of 136, then set stop-loss at 134 or after the false breakout of 136. Exit by taking profit upon a breakout around 138.0 and 142.5. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks. Relevance up to 05:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329366
EUR/USD Pair May Have A Potential For The Further Rally

EUR/USD Pair May Have A Potential For The Further Rally

InstaForex Analysis InstaForex Analysis 09.12.2022 09:46
Technical analysis: EUR/USD has been trading upside and the previous swing high at the price of 1.0590 is on the test. In case of the upside breakout of swing high, I see potential for the further rally. Trading recommendation: Due to the strong upside pressure in the background and buyers in control, I see potential for the further upside movement. Watch for the potential buying opportunities in case of the upside breakout of the 1.0690. Upside objective is set at the rice of 1.0750 MACD oscillator is showing fresh upside momentum, which is strong sign that buyers are in control. Key support is set at the price of 1.0450 Relevance up to 08:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/304310
Growth Of The USD/JPY Pair Is Hampered By Resistance

The US 10-Y Yield Situation Creates An Obstacle For Further Strengthening Of The JPY

InstaForex Analysis InstaForex Analysis 09.12.2022 09:52
By the end of the week, the dollar was under pressure from negative sentiment about the future prospects of the U.S. economy. This led to a sharp fall on many fronts. USD/JPY was no exception On Friday morning, USD/JPY plummeted by 0.6% and dropped below the 136 level. The reason for the sharp decline was the general weakness of the greenback. The DXY index fell more than 0.5% at the start of the day. The ground was knocked out from under the dollar's feet by increased fears of recession in the United States. Weaker-than-expected US economic data contributed to the growth of speculations on the subject. A report from the Labor Department released yesterday showed that initial claims for state unemployment benefits increased more than forecast to 230,000 over the week, while the number of people receiving benefits after an initial week of aid jumped to a 10-month high of 1.671 million. The fact that unemployment remained steady reinforced the market's view of the unenviable prospects for the world's largest economy. America could enter recession as soon as next year. Another harbinger of a negative scenario is the inversion of the U.S. Treasury bond yield curve. Now the gap between the yield of 2-year and 10-year bonds is -83.7 bps. Given all these factors, investors are concerned that the growing risk of a slowdown in economic growth may force the Federal Reserve to soften its monetary policy. Currently, traders estimate the probability that the Fed will raise rates by 50 bps in December at 93%. At the same time, most market participants believe that the rate will peak at just below 5% next May. Less hawkish market expectations significantly weigh on the U.S. currency. Against this backdrop, the dollar index has already lost more than 8% from its 20-year high reached in September. Recall that this year's peak for the greenback was 114.78. The USD is now trading just above 104. The dollar suffered the heaviest losses last month against the yen, which, on the contrary, showed the worst dynamics among the Group of 10 currencies throughout the year. The JPY gained more than 7% against the greenback in November. The key catalyst was an increase in speculations about a slowdown in U.S. rate hikes, which led to a sharp collapse in U.S. Treasury bond yields. The Japanese currency is extremely sensitive to changes in this indicator. Its significant dynamics always provokes equally strong movement of the yen. At the moment, the yield of 10-year US government bonds is keeping its growth above 3.48%, which creates an obstacle for further strengthening of the JPY. The US Consumer Price Index for November is expected to provide strong support to the yields. The report will be released next week, ahead of the Fed's interest rate decision. Economists estimate that overall inflation will remain unchanged at 7.7%. If the forecast comes true and we do see a more robust figure, it could change the mood of the market considerably. It is likely to bring back talk of a higher final level of interest rates in America and a continuation of an aggressive anti-inflation campaign. Analysts at Danske Bank see a further hike in interest rates by 50 basis points (bps) and a hawkish message from Federal Reserve chair Jerome Powell for CY2023. Also, the neutral rate is expected at 5.00-5.25%. Experts think that the steady rise in prices is the only chance for the dollar to hold out next week where in addition to the Fed meeting, the interest rate decisions of the ECB and Bank of England are also expected. As for USD/JPY, it is likely to remain in a consolidation phase until U.S. consumer inflation data is released. Most analysts predict that the pair will trade in a narrow price range of 136-137 in the short term. However, strong volatility in the asset is expected after the release of the key report. Depending on the data, dollar-yen might show either a strong upward bounce or a sharp retreat to the downside. The next potential trigger for the pair is the Fed's decision on the interest rate, which will be announced on Wednesday, December 14. Technical analysis of the USD/JPY pair The fall below the neckline, built from the December 6 low at 135.96, put a lot of pressure on the USD this morning. In addition, the USD/JPY asset failed to stay above the 200-period exponential moving average at 137.10, which also indicates the strength of the Japanese yen. Meanwhile, the RSI relative strength index has shifted into a bearish range of 20.00-40.00, indicating the start of downward momentum. In order to fall further, bears need to pull the pair below Friday's low of 135.77. This would take the pair to round support at 135.00, followed by the December 5 low of 134.13. On the other hand, a break above the 200-EMA near 137.00 would open a quick path to Wednesday's high at 137.86. A takeover there would send dollar bulls to the November 25 high of 139.60.   Relevance up to 08:00 2022-12-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/329392
The Challenge to the Dollar: De-dollarisation and Geopolitical Shifts

Saxo Bank Podcast: The Market's Conviction That The Fed Will Be Cutting Rates, Today's Important WASDE Report And Much More

Saxo Bank Saxo Bank 09.12.2022 11:46
Summary:  Today, we look at recent commodity market performance, where hopes for a reopening of Chinese activity is weighed against concerns for the forward outlook elsewhere. We also highlight the market's conviction that the Fed will be cutting rates in the second half of next year and wonder how the market will treat a less accommodative dot plot from the Fed at next Wednesday's FOMC meeting. A look at recent earnings reports, soybeans ahead of today's important WASDE report and much more on today's pod, which features Peter Garnry on equities, Ole S Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Next week’s likely FOMC dot plot is not what the market is pricing | Saxo Group (home.saxo)
China Restricts Gallium and Germanium Exports, Heightening Global Tech War

Major Currency Pairs Have Recently Shown A Slowdown In Their Growth (EUR/USD, GBP/USD, AUD/USD)

Kamila Szypuła Kamila Szypuła 09.12.2022 13:54
The dollar was broadly flat against major currencies on Friday as concerns about the health of the US economy resurfaced, as well as ahead of producer inflation data later in the day and the Federal Reserve's interest rate meeting next week Investors are expecting a series of interest rate decisions from central banks - including the Fed, the European Central Bank and the Bank of England - next week. Markets bet all three will limit pace of rate hikes, with hikes of 0.5bp The dollar index continued its decline yesterday keeping the Euro bulls on the front foot. The GBP/USD pair is rising for the third day in a row. The yen benefiting from growing expectations AUD/USD tried to regain ground today Read next: The FTC Is Trying To Block Microsoft's Merger With Activision| FXMAG.COM EUR/USD EUR/USD continues its grind higher in early European trade as key US data events lie ahead. The euro/dollar pair is trading in a better position than yesterday. This morning the euro rose 0.25% is $1.0581. The pair is currently trading at 1.0513. The dollar has a tendency for weakness in December. The dollar index continued its decline yesterday keeping the Euro bulls on the front foot. There has been comments this week from some ECB members discussing the possibility of further rate hikes. Later in the day attention turns to the US economic calendar as we await the US PPI as well as University of Michigan data. A positive data print could offer some support for the dollar while a weaker print could push EUR/USD lower. As for the US PPI, it is expected to maintain its previous level of -0.2%. A University of Michigan date specifically Michigan Consumer Sentiment is important, it is expected to increase by 0.1 to reach 56.9. GBP/USD GBP/USD Pair is on the buyers radar today. The GBP/USD pair is rising for the third day in a row and steadily climbing to the upper end of its weekly range. The pair points to a well-established short-term uptrend. A combination of factors is bringing the US dollar back to near the multi-month low reached earlier in the week. The Bank of England set to announce its monetary policy decision next week, with another interest rate increase of 50 basis points expected. It also can impact on the pound. Moreover, the gloomy outlook for the UK economy may keep investors from betting aggressively around the British pound and limit the GBP/USD pair, at least for now. Investors are now looking at Friday's US economic breakdown, which will release the Producer Price Index and flash Michigan Consumer Sentiment Index. This, along with US bond yields and broader risk sentiment, could influence USD price dynamics and provide some impulse for the cable market. AUD/USD AUD/USD tried to regain ground today China’s loosening Covid restrictions also lent optimism to the market, though renewed global recession fears and uncertainty around US Federal Reserve policy tightening kept sentiment in check. Meanwhile, latest data showed that Australia’s economy expanded less than expected in the third quarter as persistent inflation and rising interest rates dampened domestic consumption. The Reserve Bank of Australia raised its policy rate by 25 basis points to 3.1% at its December meeting. USD/JPY Currently, the pair is trading at 134.4750. On the daily chart, you can see that the dollar against the Japanese yen is falling. The recent weakness of the dollar affects the pair's advantage. The Japanese yen appreciated to around 136 per dollar, heading back to its highest levels. Also the yen benefiting from growing expectations that the Bank of Japan could end its ultra-easy monetary policy with inflation around 40-year highs. Source: investing.com, dailyfx.com, finance.yahoo.com
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

Cable Market (GBP/USD): The Uptrend Is Still Present

InstaForex Analysis InstaForex Analysis 10.12.2022 15:38
After falling during Friday's Asian trading session, the dollar then rose at the beginning of the European session. Thursday's story seems to be repeating itself. After hitting an intraday local low of 104.44, the DXY futures were back on the rise, climbing to the proverbial 105.00 mark. The dollar and its DXY index remain under pressure despite dollar bulls' attempts to regain control. There are 3 weeks left till New Year, but the situation in the financial markets is not becoming less tense, though some big players of the financial market have already summed up the results of the year and are gradually closing positions, balancing their investment portfolios and going out of the market. Due to this, the volume of trades has already started to decline. However, this does not mean that volatility is also declining. Next week we will have another powerful breakthrough in this respect: besides the release of important reports, 4 major world central banks (USA, Switzerland, UK and eurozone) will announce their decisions on monetary policies. British reports will open the upcoming week (at the beginning of the European trading session): the British National Statistics Office will release data on industrial production and GDP for October. This report shows the aggregate economic data and will have a strong impact on the Bank of England's monetary policy decision (the BoE is set to meet on Thursday, December 15). GDP growth means an improvement in economic conditions, which makes it possible (with a corresponding increase in inflation) to tighten monetary policy, which, in turn, usually has a positive effect on the quotes of the national currency. Monthly GDP data (as opposed to quarterly reports) does not affect the pound so much. Nevertheless, traders, who follow the dynamics of its quotes, are likely to pay attention to this report. Indicators in the manufacturing industry and industrial production in the UK are expected to fall, and GDP growth will decrease, which should have a negative impact on the pound, including in the GBP/USD pair. In the meantime, GBP/USD has been on an uptrend for the third consecutive month, having recovered from a deep fall in August and September. Back then, as we remember, the ill-conceived policy of the then Prime Minister Lisa Truss' cabinet to reduce taxes and increase spending led to a sharp drop in the market for British government bonds and the pound. Economists said that the British financial system was hours away from a grand collapse or just a collapse in general. The BoE had to intervene to prevent the pound and the British stock market from plunging even further: in late September, according to Bloomberg, the central bank purchased British government bonds (conventional gilts) with a residual maturity of more than 20 years in the secondary market from September 28, and promised to buy long-term government bonds worth another 65 billion pounds. "The purchases will be carried out on whatever scale is necessary," the BoE said at the time. However, GBP/USD has also been rising in the last 3 months and amid the weakening U.S. dollar. The DXY index reached a local high of 114.74 in September (since June of 2002), but then started falling in November by more than 5.0%. And the DXY has fallen another 1.1% since early December, to its current high of 104.81. And so far, as we noted at the beginning of this article, the dollar and its DXY index remain under pressure. As for GBP/USD, the pair was trading near 1.2240, bullish in the medium-term (above the support levels of 1.2110, 1.1930 and 1.1875) when this article was written. The uptrend is still present for the time being: steady growth to the area above the long-term resistance level of 1.2250. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329414
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

The EUR/USD Pair Is Likely To Experience The Strongest Price Turbulence

InstaForex Analysis InstaForex Analysis 10.12.2022 15:43
Bulls and bears of the EUR/USD pair impulsively react to the current information flow. The initiative is to change hands, but in fact the price stalls above 1.0500 but below 1.0600. The fifth figure acts as a springboard for a large-scale attack, which will inevitably occur next week. The only question is in which direction, down or up. Obviously, the vector of the EUR/USD price movement will depend on the Federal Reserve and the European Central Bank: next week the central banks will sum up the year results and outline further prospects. In the meantime, traders have to act cautiously, so to speak, "according to the situation". The intraday market sentiment is changing fast, but all the downward and upward price bursts are short-lived. For instance, on Friday morning, EUR approached the limits of the 6th figure, marking 1.0589. Amid a nearly empty economic calendar, the forecast of currency strategists of Danske Bank had a certain influence on the pair. This forecast was interpreted by the market in favor of the single currency (and not in favor of the dollar). Danske Bank economists expect the ECB policy rate to peak at 2.75% in the first half of 2023, but the risks will be shifted towards a further increase. At the same time, they revised their hawkish forecast on the pace of monetary tightening by the Fed. According to them, the Fed will increase the rate twice more by 50 points (in December and February) and once more (in spring) - by 25 points. As a rule, such forecasts have a limited (and short-term) influence on the pair, but under current circumstances, apparently, traders especially pay more attention to this analytical report. But again - in anticipation of the high-profile events that will take place next week, any price spikes are temporary in nature. On Friday afternoon, the bears took the initiative, reacting to the inflation report. The US producer price index was published at the beginning of the US trading session on Friday, which did not disappoint the dollar bulls, contrary to pessimistic expectations. The overall PPI in annual terms came out at 7.4% (with the forecasted slowdown to 7.2%). On the one hand, it was expected to slow down, but, on the other hand, the rate of deceleration was not as fast as previously expected. The core index, excluding food and energy prices, reached the 6.2% target year-on-year, while most analysts predicted a decline to 5.9%. The situation here is similar: the index has been declining consistently for the past 8 months, but the rate of decline slowed in November. The pair then retreated from the daily highs, going down to the base of the 5th figure. The greenback received additional support from another report, which was released in the U.S. We are talking about the consumer sentiment index from the University of Michigan. This index showed positive dynamics contrary to the pessimistic forecasts. Thus, in December the index grew up to 59.1 points while experts expected further decline down to 55 points. However, the downward dynamic of the pair is likely to be of limited nature. It's just that the aforementioned reports turned out to be in favor of the dollar, and so the bulls locked in profit, not risking to leave short positions till Monday. The notorious "Friday factor" played its role here, which weighed on the pair. But taking into account the current fundamental background, we can say with confidence: both short and long positions on the pair are risky. Even within the fifth figure. Next week, the pair is likely to experience the strongest price turbulence, even before the announcement of the Fed verdict. The day before that event, i.e. on December 13, the key report of the Consumer Price Index growth will be published in America. If it reflects further slowing of inflation growth in the US, the market will play a conditionally dovish outcome of the Fed meeting in advance, i.e. the dollar will be under strong pressure. But if the report is contradictory, it is difficult to predict the reaction. So, taking into account the high degree of uncertainty, it is risky to open longs or shorts for the pair. It is better to take a wait-and-see position. Big events of the forthcoming week will completely redraw the current picture - both fundamental and technical. Relevance up to 17:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329439
RBA Minutes Signal Close Decision, US Retail Sales Expected to Rise

FX: Movement Of Major Currency Pairs This Week

Kamila Szypuła Kamila Szypuła 10.12.2022 20:01
Next week we will have another powerful breakthrough in this respect: besides the release of important reports, 4 major world central banks (USA, Switzerland, UK and eurozone) will announce their decisions on monetary policies. The dollar may strengthen again. A strong US economy and aggressive interest rate hikes are strong assets for the US dollar, but not the only ones. The USD index rose as a result of strong demand for safe assets at a time when fear dominated the markets. A deep recession would increase the demand for the US dollar as a safe-haven asset. Read next:The Fed And Slowing Down The Pace Of Rate Hikes On Last Meeting This Year?| FXMAG.COM EUR/USD This week the pair started at 1.0545. This level was followed by a weekly high of 1.0585. On Wednesday, the pair met the expectations of ING economists and moved around 1.0400, thus reaching the lowest levels of the week at 1.0452. The mood was gloomy and the bulls had challenges ahead. The pair gradually recovered from losses and returned to trading above 1.0500. Currently, the pair is trading at 1.0572 There were no economic events during the week that could significantly affect the currency pair. On Wednesday, the euro received support from the eurozone as the domestic gross production reading was higher than expected. Moreover, the weak us dollar during the week added strength to EUR/USD. EUR/USD price movement will depend on the Federal Reserve and the European Central Bank. Next week the central banks will sum up the year results and outline further prospects. EUR/USD Weekly Chart GBP/USD The cable market started the week well at 1.2295. On the same day, GBP/USD hit its highest level of the week, trading at 1.2336. Tuesday and Wednesday were the weakest days for the couple. Just like EUR/USD, the pound/dollar also hit a low on Wednesday, dropping to 1.2107. After that, the pair rose and recorded a correction. Currently, the price of the pair is at 1.2239. This week has been empty in terms of reports. The movement of the pair was influenced mainly by the situation of the dollar. Next week brings a lot of emotions among traders. British reports will open in the coming week with data on industrial production and GDP for October. This report presents aggregated economic data and will have a major impact on the Bank of England's monetary policy decision (Thursday). GBP/USD Weekly Chart AUD/USD The pair of Australian dollar (AUD/USD) started the week at 0.6799. Like the British pound, the Aussie hit a weekly high on Monday. The highest price level was 0.6848. Then the pair began to wane. Following the trend of currencies from the old continent, Wednesday was the lowest level of the pair, 0.6672. And just like the pairs above, AUD/USD tried to recover. The pair closed the week at 0.6772. China's announcement of easing covid restrictions added support to the Australian dollar. On Tuesday, the Reserve Bank of Australia recently raised its key interest rate by 25 basis points to 3.1%, but the bank's decision did not add strong support to the AUD price. AUS/USD Weekly Chart USD/JPY USD/JPY started the week at a low of 134.4900, on the same day it recorded a weekly low of 134.1300. The upward trend continued until Wednesday. On that day, the Japanese yen pair peaked at 137.8010. There were declines after that. The week ended with USD/JPY at 135.0740 Undoubtedly, the weakness of the dollar and the statement of the representative of the Bank of Japan added support to the Yen. USD/JPY Weekly Chart Source: investing.com, finance.yahoo.com
Asia Morning Bites: Focus on Regional PMI Figures, China's Caixin Manufacturing Report, and Upcoming FOMC Minutes and US Non-Farm Payrolls"

On The New York Stock Exchange All Indices Fell In Price

InstaForex Analysis InstaForex Analysis 12.12.2022 08:00
At the close of the New York Stock Exchange, the Dow Jones was down 0.90%, the S&P 500 was down 0.74% and the NASDAQ Composite was down 0.70%. Dow Jones The leading performer among the components of the Dow Jones index today was Walt Disney Company, which gained 0.83 points (0.90%) to close at 93.38. Verizon Communications Inc rose 0.30 points or 0.81% to close at 37.40. Salesforce Inc rose 0.98 points or 0.75% to close at 131.11. The least gainers were Chevron Corp shares, which lost 5.54 points or 3.19% to end the session at 168.00. Amgen Inc was up 2.42% or 6.92 points to close at 278.65 while Walmart Inc was down 2.33% or 3.47 points to close at 145.31.  S&P 500  Leading gainers among the S&P 500 index components in today's trading were Paramount Global Class B, which rose 5.08% to hit 19.02, Tesla Inc, which gained 3.23% to close at 179.05, and also shares of Netflix Inc, which rose 3.14% to close the session at 320.01. The least gainers were were Schlumberger NV, which shed 5.91% to close at 46.97. Shares of Etsy Inc lost 5.74% to end the session at 126.78. Quotes of Halliburton Company decreased in price by 5.33% to 33.01. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were HTG Molecular Diagnostics Inc, which rose 117.57% to hit 0.54, ClearOne Inc, which gained 73.40% to close at 1.40, and also shares of China Jo-Jo Drugstores Inc, which rose 51.20% to end the session at 3.31. Shares of Grom Social Enterprises Inc were the biggest losers, losing 66.28% to close at 1.30. Shares of Autolus Therapeutics Ltd shed 38.13% to end the session at 1.85. Quotes Appreciate Holdings Inc fell in price by 33.43% to 2.73. Numbers On the New York Stock Exchange, the number of securities that fell in price (2143) exceeded the number of those that closed in positive territory (958), while quotes of 98 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,359 companies fell in price, 1,374 rose, and 226 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 2.42% to 22.83. Gold Gold futures for February delivery added 0.36%, or 6.50, to $1.00 a troy ounce. In other commodities, WTI January futures rose 0.10%, or 0.07, to $71.53 a barrel. Futures for Brent crude for February delivery rose 0.72%, or 0.55, to $76.70 a barrel. Meanwhile, in the Forex market, the EUR/USD pair was unchanged 0.25% to 1.05, while USD/JPY was up 0.02% to hit 136.68. Futures on the USD index rose 0.17% to 104.93.     Relevance up to 03:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/304437
The EUR/USD Pair Has A Potential For The Breakout Mode

EUR/USD Pair: All Trend Tndicators Are Still Pointing Upward

InstaForex Analysis InstaForex Analysis 12.12.2022 08:02
On Friday, as it did all last week, the EUR/USD currency pair displayed relatively slow movements. Although there is no trend movement on the 4-hour TF, and volatility cannot be said to be at a minimum right now, the pair's movement over the previous five trading days was far from ideal. Once more, the US dollar could not adjust or even stop moving. Therefore, there is currently no technical justification to sell the pair, as all trend indicators are still pointing upward. However, there are numerous fundamental and macroeconomic explanations. Many macroeconomic reports from recent weeks have been favorable for the US dollar. The most recent nonfarm payrolls, for instance. But at best, each of them only briefly caused a slight dollar strengthening, which quickly subsided. Reports in favor of the euro had a more lasting impact. For the market, the recent fundamental background has been reduced to the fact that the Fed will start to slow down the pace of tightening monetary policy. The market was uninterested in anything else, which primarily caused the US dollar to decline over the past few weeks or even months. Additionally, given that the downward trend lasted for nearly two years, during which the European currency demonstrated the ability to adjust by a maximum of 400 points, it should be noted that from a technical perspective, the current movement to the north may be a banal correction for a 24-hour TF. It had to end eventually. Possibly right now. As a result, if we examine the "technique," everything makes perfect sense. The development of the European currency raises many questions if we examine its "foundation." Meetings of the central banks and American inflation. This week's Fed and ECB meetings will undoubtedly be the most important events. Everything now comes down to the fact that both regulators will raise their rates by 0.5% after weeks of discussions, declarations, speeches, etc. If the Fed's decision was anticipated by the market for some time due to the monetary committee members' discussions over the past two to three weeks about the need to moderate the aggressive mood, then the ECB's decision does not appear to be as clear-cut and logical at this time. Recall that while inflation in the US has been declining for several months in a row, it is still rising in the European Union. Consequently, the ECB lacks a moral justification for slowing the rate of rate increases at this time. But as we already stated, the issue of high inflation (above the target level of 2%) may persist for a long time. Additionally, not all EU nations can withstand 5% or higher rates. The ECB will have to offer them monetary support through various programs, which it has only recently abandoned in favor of tightening monetary policy. In this scenario, they may begin to experience financial difficulties. The European regulator will, therefore, probably adopt a stance that is "somewhere in the middle." He will try to increase the rate, but he won't chase the Fed. In this scenario, inflation will go down, but it's unlikely that it will reach the desired 2% level. Since the situation in the United States is exactly the opposite – the rate will rise as much as necessary, and inflation will inevitably return to 2% – from our perspective, this situation may start to put pressure on the euro once more. In addition to the ECB meeting, the European Union will publish a report on industrial production for October. On Friday, the business activity indices for manufacturing and services for December will be made public. All three indices are below the "waterline" of 50.0, and the slowing of economic growth results from tightening monetary policy. So there is no point in waiting for these indicators to improve. The euro can continue to rise if the ECB decides to increase the rate by 0.75%. If not, the fall will inevitably occur. It has also been simmering for a while. As of December 12, the euro/dollar currency pair's average volatility over the previous five trading days was 96 points, which is considered "high." So, on Monday, we anticipate the pair to fluctuate between 1.0444 and 1.0643. The Heiken Ashi indicator's upward reversal indicates that the upward movement has resumed. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nerarest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestion: The EUR/USD pair is still moving upward. Therefore, before fixing the price below the moving average, we should consider long positions with targets of 1.0623 and 1.0612. Sales will become relevant if the price is fixed below the moving average line with targets of 1.0444 and 1.0376. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329470
The Pound Is Now Openly Enjoying A Favorable Moment

The Pound (GBP) Price Has Once Again Increased Almost Out Of Nowhere

InstaForex Analysis InstaForex Analysis 12.12.2022 08:06
Even though neither the US nor the UK released any significant macroeconomic publications on Friday, the GBP/USD currency pair managed to increase at the end despite the lack of movement. Thus, the pound price has once again increased almost out of nowhere, which has even stopped surprising in recent weeks. The moving average, linear regression channels, and the Ichimoku indicator's lines on the 24-hour TF point upward. Technically speaking, the situation is clear-cut: there is an upward trend. But just as with the euro, we've been wondering for a while now: On what basis is the pound sterling increasing? Yes, there are many technical reasons, but what about the macroeconomic and fundamental ones? The response is the same as it was for the euro: essentially none. Although it has increased the rate for eight straight meetings, it might slow down in December, even though the current inflation rate does not favor this. In the UK, the consumer price index has long exceeded 10% and so far doesn't appear to be slowing down. As a result, the BA and the ECB have no reason to slow down the rate hike pace. We are talking about tightening monetary policy by 5 to 5.5 percent in the United States to combat inflation. However, a more drastic tightening in Britain may be required because of Brexit and the pandemic, and the British economy does not feel as secure as the American one. As a result, there is a deadlock: The Bank of England cannot raise the interest rate continuously or by any amount. There is a lot of "foundation" this week. Reports on the UK's GDP and industrial production will be released to start a new week. Although these reports are not all that significant, a response might come as a result. The market might be distracted this week by central bank meetings and inflation reports, which are of higher priority. Because there will be no other events on Monday, the market may focus on these figures. Tuesday will be a fascinating day as well. Data on unemployment and wages will be released in the UK, and the US will release its November inflation report, which may show another slowdown in consumer price growth to 7.3–7.6% y/y. When Britain releases its November inflation report on Wednesday, we can, at best, anticipate a slowdown of 0.1-0.2%. To 10.9–11.0 percent from the current 11.1%. As we can see, even if such a reduction occurs, it will not be sufficient to begin reducing the rate at which the key rate is increasing. The Fed meeting's outcomes and a press conference with Jerome Powell will be presented in the evening. Results of the Bank of England meeting, at which the rate may also increase by 0.5% to 3.5%, will be announced on Thursday. Retail sales, unemployment benefit claims, and industrial production are all examples of American activity. Retail sales and business activity indices for the manufacturing and service sectors were released Friday in Britain and the US, respectively. As you can see, this week is expected to be very volatile and trending because we anticipate a sufficient number of events and important events each day. However, the market's response to particularly significant events can be unpredictable. Over the previous five trading days, the GBP/USD pair has averaged 131 points of volatility. This value for the dollar/pound exchange rate is "very high." So, on Monday, December 12, we anticipate movement within the channel and are constrained by the levels of 1.2131 and 1.2393. The downward reversal of the Heiken Ashi indicator indicates that the pair is attempting to correct. Nearest levels of support S1 – 1.2207 S2 – 1.2146 S3 – 1.2085 Nearest levels of resistance R1 – 1.2268 R2 – 1.2329 R3 – 1.2390 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair attempts to move upward. Therefore, until the Heiken Ashi indicator turns down, you should maintain buy orders with targets of 1.2329 and 1.2390. With targets of 1.2131 and 1.2085, open sell orders should be fixed below the moving average. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     search   g_translate     Relevance up to 01:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329472
The AUD/USD Pair’s Downside Remains Off The Table

AUD/USD Pair: Right Now The Price Reversed From The Resistance Level

InstaForex Analysis InstaForex Analysis 12.12.2022 08:08
On the daily chart, the price divergence with the Marlin oscillator has acquired a particular structure, but in spite of this, it is still a standard single divergence with price peaks on November 15 and December 5. Right now the price reversed from the resistance at 0.6799 and it is now moving towards 0.6730. Crossing the support will open the target at 0.6642. The Marlin oscillator is preparing to move into negative territory. On the four-hour chart, the price attacks the support of the MACD line (0.6755), the Marlin oscillator synchronously crosses the area below the zero line. Surpassing 0.6755 will inspire the price to attack the important level of 0.6730.     Relevance up to 04:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329474
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

GBP/USD Pair Has A Signal For A Short-Term Decline In Price

InstaForex Analysis InstaForex Analysis 12.12.2022 08:11
Last Friday, the pound confirmed its consolidation above the support at 1.2155 by closing the second white candle. The signal line of the Marlin oscillator does not share the price's optimism and outlined the breakdown of the lower limit of its own range. The price has a weak chance of reaching 1.2410 (low of April 28). In this case a triple divergence may form (along the turquoise line). As for the intention to develop the downward movement, the price may settle under 1.2155. On the four-hour chart, the price plunged below the MACD line and the balance line again. The Marlin crossed the area under the zero line while the price breaks through the area under the indicator supports. This is a signal for a short-term decline in price. We are waiting for the price to settle under the nearest support at 1.2155. Relevance up to 04:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329476
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

EUR/USD Pair Has A High Probability Of A Downward Movement

InstaForex Analysis InstaForex Analysis 12.12.2022 08:14
Last week it nearly closed at the opening level. The price did not approach the MACD line on the weekly chart, and the MACD line moved lower, settling in the area where support is at 1.0410. The price has lost a major thing - momentum. Now it will be harder to overcome the MACD line. Being able to do so will open the target level at 1.0205 (high on September 12). Anyway, the weekly candlestick is already moving above the MACD line, and the only thing that can stop the price from going up is the outcome of the Federal Reserve meeting. On the daily chart, the divergence and its angle are still unclear. Either the divergence has formed, or the price will reach the target range at 1.0615/42, and the divergence will form along the less steep slope. On the four-hour chart, the Marlin oscillator has penetrated into the bears' area. The price has crossed the area under the support of the MACD line and under the balance line (red sliding line). There is a high probability of a downward movement.   Relevance up to 04:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329478
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

EUR/USD Pair Is Still Waiting For A More Serious Bearish Correction

InstaForex Analysis InstaForex Analysis 12.12.2022 08:20
M5 chart of EUR/USD On Friday, EUR/USD tried to rise further, but eventually collapsed near 1.0579, which it failed to surpass earlier. Thus, a new round of local correction began, but its strength and depth still leave much to be desired, we are still waiting for a more serious bearish correction. There were no important reports or events in the eurozone, and in the US - PPI, which helped the dollar to grow a little bit, and Consumer Sentiment Index from the University of Michigan, which was ignored. Basically, last week the pair was moving quite logically according to the macro data, however, the quote's recent movement can hardly be logically explained. I still believe that the euro has grown too much and it is time for it to go down. This week there will be plenty of macro data and fundamental events to implement that plan. Speaking of trading signals, everything was pretty good as well, though not ideal. At the beginning of the European session two sell signals around 1.0579 appeared, afterwards the pair fell to 1.0514, where the Kijun Sen was. The rebound from this line followed, so it was time to close the short positions and try to open the long ones. However longs did not bring any profit, but by the end of the day there were no other signals, so the deal could be closed in zero manually. On the first deal profit was about 25 points. COT report COT reports on EUR/USD have puzzled traders through most of 2022. Half of the year, COT reports indicated clear-cut bullish sentiment among large market makers while the single European currency was extending its weakness. For a few months, the reports showed a bearish sentiment and the euro was also trading lower. Currently, the net position of non-commercial traders is again bullish and increasing. Although the euro is rising, a rather high value of the net position allows us to assume an early completion of the uptrend. During the reporting week, the number of long positions held by non-commercial traders increased by 3,900 and that of short positions grew by 1,300. Accordingly, the net position grew by about 2,600 contracts. The green and red lines of the first indicator moved far away from each other, which could mean the end of the uptrend (!!!) (which, in fact, never happened). The number of long positions exceeds that of short positions by 125,000. Therefore, the net position of non-commercial traders may continue to rise further but without triggering a similar rise in the euro. When it comes to the total number of longs and shorts across all categories of traders, there are now 35,000 more short positions (661,000 vs 626,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD continues to remain near its local highs, but this week traders will have so many events and reports that they can use that it is impossible to say which direction the price may move and where the current week will end. I'm still waiting for a strong bearish correction and I believe it could happen this week. On Monday, the pair may trade at the following levels: 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as Senkou Span B (1.0442) and Kijun Sen (1.0517). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 12, there are no important reports or events in the EU and the US, but the most interesting ones are yet to come. In particular, the Federal Reserve and European Central Bank meetings and the inflation report. The market may well start to process all these data beforehand, starting from Monday, so volatility could be high this week. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329466
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The Cabel Market (GBP/USD) Keeps Trading Noticeably Higher

InstaForex Analysis InstaForex Analysis 12.12.2022 08:31
M5 chart of GBP/USD GBP/USD found grounds for its growth on Friday. Despite the fact that there were no UK reports on that day and US reports were rather supportive for the USD, GBP still managed to grow by the end of the day. Anyway, we are not even surprised with such a state of affairs, the pound has been rising practically without correcting for the past weeks and months. Of course, there are corrections on the one-hour chart and they are visible, but when switching to a 24-hour chart or even a 4-hour one there were no pullbacks or even if there were, they turn out to be very weak. Thus, the new trading week will have to dot all the i's. Or else the pound will continue rising for no reason, or maybe the highly anticipated and strong bearish correction might actually begin. Speaking of trading signals, everything was quite messy. The first two trading signals near 1.2259 were false, and the price was only able to go the necessary 20 points in the right direction in the second case, so as to be able to set the Stop Loss to Breakeven. Therefore, you could lose on the first trade. The next step was a sudden collapse, provoked unexpectedly by the US producer price index, the price went down to the critical line and bounced from it, creating a buy signal. But it was possible to use it only after the price crossed 1.2259, which was the third signal near this level, while the first two were false. Consequently, it should not have been triggered. COT report The latest COT report on the British pound showed that the bearish mood is weakening. During the reporting week, non-commercial traders opened 1,700 long positions and closed 7,800 short ones. The net position increased by almost 10,000. The net position dropped by 1,000. The figure has been on the rise for several months. Nevertheless, sentiment remains bearish, and the pound is on the rise against the greenback for no reason. We assume that the pair may well resume the downtrend soon. Notably, both GBP/USD and EUR/USD now show practically identical movement. At the same time, the net position on EUR/USD is positive and negative on GBP/USD. Non-commercial traders now hold 54,000 sell positions and 30,000 long ones. The gap between them is quite wide. As for the total number of open longs and shorts, the bulls have an advantage here by 10,000. Technical factors indicate that the pound may move in an uptrend in the long term. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD GBP/USD keeps trading noticeably higher on the one-hour chart, but still trying to maintain a corrective mood. This week everything will depend on the macro data and the meetings of several central banks, so movements may be sharp and could be in any direction. We should brace for it. On Monday, the pair may trade at the following levels: 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259, 1.2342, 1.2429-1.2458. The Senkou Span B (1.2121) and Kijun Sen (1.2210) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. Today, GDP (not quarterly) and industrial production reports will be released in the UK. Most likely, they will provoke a small reaction from the market, but this week there will be much more important events, and right from the start, the market may already try to work them out. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate     Relevance up to 01:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329468
The Downside Of The US Dollar Index Remains Limited

Analysis Of United States Dollar (USD) Currency Index

InstaForex Analysis InstaForex Analysis 12.12.2022 08:34
With the formation of a Bullish Pitchfork channel on the 4-hour chart of the United States USD Index, currently #USDX will try to go to the middle line of the Pitchfork channel or the 105.77 level. If successful, the next level to be tested is the 106.67 area if the momentum and volatility are sufficiently supportive. However, if on its way to the target level previously described, USDX suddenly reverses downwards again, especially breaking below the 104.43 level, then the bull scenario described earlier will automatically become invalid.   Relevance up to 03:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/115521
The Market May Continue To Buy The Pound (GBP) This Week

GBP/USD Pair Is Starting To Show Signs Of Saturation Over The Rally

InstaForex Analysis InstaForex Analysis 12.12.2022 08:37
On the daily chart the main GBP/USD currency pair is starting to show signs of saturation over the rally that occurred over the previous few days, as reflected in several things: 1. 1.2296 is difficult to break upwards 2. The appearance of the Bearish = Rising Wedge pattern. 3. Formation of a Bearish pattern 123. 4. The appearance of Bearish Wiseman 1 & 2 signals. Therefore, in the next few days, as long as Cable does not reverse its rally up above the 1.2344 level, this major currency pair still has the potential to depreciate to the 1.2045 level as its main target and if the decline has quite high volatility then it is possible that the 1.1777 level will become next target to go to. Relevance up to 03:00 2022-12-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/115519
The Price Of EUR/USD Pair Will Develop Sideways Movement

EUR/USD Pair: The Bulls Still Need To Complete The Wave

InstaForex Analysis InstaForex Analysis 12.12.2022 08:41
Technical Market Outlook: The EUR/USD pair has hit the level of 1.0589, but the bulls still need to complete the wave v of the wave A to the upside as a part of the ABC-X-ABC complex corrective structure. Nevertheless, it looks like the bulls made a Double Top price pattern at the level of 1.059 and the market reversed lower. Moreover, another bearish pattern is visible on the H4 time frame chart in form of a Rising Wedge. The neutral momentum does not support the bullish outlook yet and the correction lower towards the level of 1.0444 is needed to break below the level of fifty on the RSI indicator. Weekly Pivot Points: WR3 - 1.05486 WR2 - 1.05312 WR1 - 1.0522 Weekly Pivot - 1.05138 WS1 - 1.05046 WS2 - 1.04964 WS3 - 1.04790 Trading Outlook: The EUR had made a new multi-decade low at the level of 0.9538, so as long as the USD is being bought all across the board, the down trend will continue towards the new lows. In the mid-term, the key technical resistance level is located at 1.0389 and only if this level is clearly violated, the down trend might be considered terminated. Please notice, there is plenty of room to the downside for the EUR to go, all of the potential technical support level are very old and might not be much reliable anymore. Please be aware, that any sustained breakout below the technical support seen at 0.9737 will extend the down move even more and will put the level of 0.9669 in view. In the longer term, the key technical resistance level is located at 1.0789 (swing high from May 30th), so the bulls still have a long road to take before the down trend reversal is confirmed. It looks like the simple corrective ABC cycle might evolve into more complex and time consuming ABC-X-ABC cycle.     Relevance up to 08:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/304491
Economic Calendar Details and Trading Analysis - August 7 & 8

USD/INR Pair Takes Clues From The Recent Recovery In Oil Prices

TeleTrade Comments TeleTrade Comments 12.12.2022 09:28
USD/INR prints three-day losing streak as it takes the bids to refresh intraday high. Precursors for US inflation suggest hawkish rate hike announcements from the Federal Reserve. India inflation, Industrial/Manufacturing Production keeps traders on the edge, recovery in oil prices also fuels USD/INR prices. USD/INR stays firmer for the third consecutive day, up 0.20% intraday near 82.70, as traders await India inflation and industrial output figures during early Monday. In doing so, the Indian Rupee (INR) pair takes clues from the recent recovery in oil prices, as well as the firmer US Dollar amid the risk aversion. Fears of recession join the market’s cautious mood ahead of the key data/events to underpin the US Dollar’s haven demand. That said, US Treasury Secretary Janet Yellen said, “There's a risk of a recession, but it certainly isn't something that is necessary to bring inflation down.” Further, the economic slowdown fears could be linked to the yield curve inversion as the US 10-year Treasury bond yields and the two-year bond coupons portray a negative difference. Also favoring the US Dollar could be the recently firmer data. Among them, the Producer Price Index (PPI) matched the market forecasts of 7.4% YoY for November versus 8.1% prior. Further, the Core PPI rose to 6.2% YoY versus 6.0% expected and 6.7% previous readings. Additionally, preliminary readings of the University of Michigan’s (UoM) Consumer Sentiment Index rose to 59.1 for December versus 53.3 market forecasts and 56.8 final readings for November. Moreover, the 1-year inflation expectations dropped to 4.6%, the lowest since September 2021 while compared to 4.9% expected whereas 5-10 year expectations were stable at 3.0%. It should be noted that the US ISM Services PMI improved to 56.5 versus 54.4 expected. It should be noted that the WTI crude oil snaps a six-day losing streak as it rises 0.20% intraday gains near $71.60. India’s reliance on oil imports makes the INR susceptible to energy price moves. Against this backdrop, the S&P 500 Futures print mild losses near 3,960 while tracking Friday’s downbeat close of Wall Street. Further, the US 10-year Treasury yields remain firmer around 3.56%. It should be observed that the US 2-year Treasury bond yields flash 4.33% as the latest quote. Looking forward, India’s monthly Consumer Price Index (CPI) for November, expected 6.92% YoY versus 6.77% prior, as well as Industrial and Manufacturing Output for October, will be important for the USD/INR pair traders to watch. However, major attention will be on the US CPI and the Federal Open Market Committee (FOMC) as the hawkish bets on the Fed increased of late. Technical analysis USD/INR again pierces a two-month-old descending resistance line, around 82.60 by the press time, amid firmer MACD signals and upbeat RSI (14). As a result, the bulls are likely to overcome the stated upside hurdle this time, which in turn could challenge the all-time high marked in October around 83.42.
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The Absence Of Hawkish Remarks From BOC’s Macklem Could Help The USD/CAD

TeleTrade Comments TeleTrade Comments 12.12.2022 09:31
USD/CAD retreats from intraday high, struggles to defend buyers. WTI bounces off yearly low, snaps six-day downtrend, amid fears of supply crunch. Sour sentiment, anxiety ahead of the key data/events underpin US Dollar. Speech from BOC Governor Maclem can entertain traders ahead of bumper catalysts. USD/CAD consolidates daily gains around 1.3650 heading into Monday’s European session as the Loonie pair traders turn cautious ahead of a speech from Bank of Canada (BOC) Governor Tiff Macklem. Also challenging the pair buyers could be the recently firmer prices of Canada’s key export item, WTI crude oil. It’s worth noting, however, that the hawkish Fed bets and recession woes keep the US Dollar firmer as traders await Tuesday’s US Consumer Price Index (CPI) and Wednesday’s Federal Open Market Committee (FOMC) meeting. WTI crude oil prints mild gains around $71.80 as it bounces off the yearly low while snapping a six-day downtrend. In doing so, the black gold portrays the supply crunch fears as Russian President Vladimir Putin rejects supplying oil to those countries who accept the European Union (EU)-led oil price caps. Also likely to challenge the oil flow could be the shutdown of the key pipeline supply energy benchmark to the US, namely the Keystone pipeline. On Sunday, Canada's TC Energy said it has not yet determined the cause of the Keystone oil pipeline leak last week in the United States, while also not giving a timeline as to when the pipeline will resume operations, reported Reuters. On the other hand, the US Dollar Index (DXY) extends Friday’s gains amid recession woes, recently highlighted by US Treasury Secretary Janet Yellen. On Friday, the US Producer Price Index (PPI) matched the market forecasts of 7.4% YoY for November versus 8.1% prior. Further, the Core PPI rose to 6.2% YoY versus 6.0% expected and 6.7% previous readings. Additionally, preliminary readings of the University of Michigan’s (UoM) Consumer Sentiment Index rose to 59.1 for December versus 53.3 market forecasts and 56.8 final readings for November. Moreover, the 1-year inflation expectations dropped to 4.6%, the lowest since September 2021 while compared to 4.9% expected whereas 5-10 year expectations were stable at 3.0%. It should be noted that the US ISM Services PMI improved to 56.5 versus 54.4 expected. While portraying the mood, the markets witness a sluggish start to the key week with mildly offered S&P 500 Futures and inactive Treasury yields. To sum up, mixed sentiment and anxiety prior to the crucial data/events can keep the USD/CAD on the front foot even if the latest rebound in oil prices probes the upside moves. It should be noted that the absence of hawkish remarks from BOC’s Macklem could help the Loonie pair to remain firmer as the Canadian central bank has recently ruled out odds of aggressive rate hikes. Technical analysis A daily closing beyond the seven-week-old descending resistance line, around 1.3655, becomes necessary for the USD/CAD bulls to keep the reins. However, the pair bears are off the table unless witnessing a clear downside break of the previous resistance line from October 13, close to 1.3510 at the latest.    
Analysis Of The USD/CHF Pair Movements

USD/CHF Pair Is Expecting Further Upside Movement

TeleTrade Comments TeleTrade Comments 12.12.2022 09:35
USD/CHF buyers struggle inside a bullish chart formation. Upbeat MACD signals suggest further advances, 200-HMA acts as an additional upside filter. Bears have a bumpy road to travel unless breaking 0.9300 support. USD/CHF prints mild gains around 0.9360 even as the 50-Hour Moving Average (HMA) challenges the buyers during early Monday in Europe. In doing so, the Swiss Franc (CHF) pair justifies bullish MACD signals while staying inside a short-term falling wedge bullish chart pattern. That said, the quote’s latest weakness becomes less troublesome beyond the stated wedge’s support line, around 0.9310 at the latest. Even if the quote defies the bullish chart formation, by breaking the 0.9310 support, the 0.9300 round figure could act as an extra filter to the south before pleasing the USD/CHF bears. In that case, lows marked during April and March around 0.9195 and 0.9150 respectively, will gain the major attention of the pair sellers. Meanwhile, recovery moves need validation from the 50-HMA hurdle of 0.9365, a break of which could poke the stated wedge’s upper line, close to 0.9395 at the latest. It should be noted that the USD/CHF run-up beyond 0.9395 should provide a clear break of the 200-HMA, around 0.9405 by the press time, to boost the buyer’s morale. Following that, a rally towards the late November swing high around the 0.9600 threshold can’t be ruled out. USD/CHF: Hourly chart Trend: Further upside expected
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The Aussie Pair (AUD/USD) Is Amid Bearish Signals

TeleTrade Comments TeleTrade Comments 12.12.2022 09:39
AUD/USD remains depressed around intraday low during the first loss-making day in four. Bearish MACD signals, failure to cross weekly resistance line keep sellers hopeful. Buyers need validation from monthly high to retake control. AUD/USD retreats to 0.6775 as it defies the three-day winning streak heading into Monday’s European session. In doing so, the Aussie pair retreats toward the 200-Hour Moving Average (HMA) amid the bearish MACD signals. It’s worth noting that the quote’s failure to cross a one-week-old ascending trend line also contributes to the bearish bias. That said, the AUD/USD weakness past the 200-HMA level of 0.6755 will aim for the 50% Fibonacci retracement level of the pair’s November 29 to December 05 upside, near .6745. However, a two-week-old horizontal support area surrounding 0.6670 appears a tough nut to crack for the AUD/USD bears. In a case where AUD/USD remains bearish past 0.6670, a downward trajectory towards the late November swing low near 0.6585 can’t be ruled out. Meanwhile, recovery moves may initially confront the 23.6% Fibonacci retracement level round the 0.6800 round figure before challenging an upward-sloping resistance line near 0.6825. Even if the AUD/USD bulls manage to cross the 0.6825 hurdle, the monthly high of 0.6850 will act as an extra upside filter to challenge the pair’s further advances. Overall, AUD/USD is likely to witness a short-term pullback but the bulls remain hopeful unless witnessing a clear downside break of 0.6670. AUD/USD: Hourly chart Trend: Further downside expected  
Kuroda Stayed On The Sidelines And The Yen Responded With Losses

Japan's Economy Is Not Yet In A Phase Where The Central Bank Can End Yield Curve Control

TeleTrade Comments TeleTrade Comments 12.12.2022 09:45
USD/JPY is aiming to shift its auction profile above 137.00 as the risk-off mood is strengthening further. Mixed views on the Federal Reserve policy outlook have escalated anxiety among the market participants. The Bank of Japan is aggressively working to achieve a 2% inflation rate. USD/JPY is expected to accelerate gains amid technical tailwinds. USD/JPY is hovering around the critical hurdle of 137.00 in the early European session. The asset is aiming to shift its business profile above the aforementioned critical hurdle as investors are getting anxious ahead of the announcement of the interest rate decision by the Federal Reserve (Fed). Volatility will stay a little longer this time as it is the last monetary policy of CY2022, which is expected to remain uncertain due to rising expectations of a slowdown in the pace of the interest rate hike. Also, Federal Reserve chair Jerome Powell is expected to provide interest rate guidance for the whole CY2023. S&P500 is displaying a subdued performance as investors await more development on Federal Reserve’s policy outlook through commentary from Federal Reserve policymakers. The 10-year US Treasury yields have surrendered gains and are auctioning below 3.57%, at the time of writing. The US Dollar Index (DXY) is displaying back-and-forth moves around the immediate resistance of 105.20. The US Dollar is facing hurdles in overstepping the 105.20 resistance despite a solid risk aversion theme in the global market. Mixed views on Federal Reserve policy outlook muddle investors’ sentiment After the release of the Federal Open Market Committee (FOMC) minutes for October’s monetary policy, it was clear that Federal Reserve policymakers are advocating a deceleration in the interest rate hike pace. Federal Reserve chair Jerome Powell and his teammates were in favor of reducing financial risks and assessing the impact of efforts made by the Federal Reserve in achieving price stability. Now, the release of upbeat payroll data for November and fresh demand in the United States service sector has triggered the option of a bigger rate hike continuation to safeguard the economy from a rebound in inflation. There is no denying the fact that higher employment generation and solid demand in service sector have the potential to spur the inflation rate again. Rabobank analysts said they expect the United States central bank to hike the policy rate by 50 basis points (bps) and see policymakers revising the terminal rate projection to the neighborhood of 5%. United States Inflation to set a stage for Federal Reserve’s policy Before the announcement of the last monetary policy of CY2022 by the Federal Reserve on Wednesday, investors are awaiting the release of Tuesday’s Consumer Price Index (CPI) data. As per the consensus, the headline inflation is expected to remain unchanged at 7.7% while core CPI that excludes oil and gas prices will inch higher to 6.4% from the former release of 6.3%. The United States Producer Price Index (PPI) data released on Friday is indicating the continuation of a slowdown in the inflation rate. The price Index for factory-gate rates was trimmed to 7.4% in line with expectations. A decline in prices for final products indicates a decline in demand, which forced producers to go easy on decision-making for end-products prices. However, investors should brace a surprise jump in inflation as the United States economy added 263K jobs in November more than the expectations of 200K. Tight labor demand is accompanied by premium earnings that could result in solid demand for durable goods by households. Bank of Japan to continue policy easing despite rising wages The risk of a decline in inflation has been triggered after a contraction in Japan’s Gross Domestic Product (GDP) numbers. A subdued demand never propels a hike in the price rise index. Bank of Japan (BOJ) Haruhiko Kuroda is of the view that even if wages rise by 3%, the BOJ will maintain its current easy policy until inflation reaches 2%. This would weigh more pressure on the Japanese yen. Meanwhile, Bank of Japan (BOJ) board member Hajime Takata said in an interview with the Nikkei newspaper published on Saturday that Japan's economy is not yet in a phase where the central bank can end yield curve control. He further added that there were some positive signs in corporate capital expenditure and wages, as reported by Reuters. USD/JPY technical outlook USP/JPY has accelerated to near the downward-sloping trendline plotted from November 22 high around 142.24. The asset is at a make or a break after a firmer rally. A bull cross, represented by the 20-and 50-period Exponential Moving Averages (EMAs) at 136.5, indicates more upside. Meanwhile, the Relative Strength Index (RSI) (14) has moved into the bullish range of 60.00-80.00. Sustainability above the same will keep the reins in the asset solid.     search   g_translate    
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

The New Zealand Dollar (NZD) Is Still The Best-Performing G10 Currency

TeleTrade Comments TeleTrade Comments 12.12.2022 09:50
The Kiwi ended the week back above 0.64, and while it didn’t reclaim Monday’s highs, it’s still the best-performing G10 currency month to date. Economists at ANZ Bank expect volatility this week. NZD seasonality is usually positive in December “NZD seasonality is usually positive in December, but while it has that and higher interest rates in its corner, there are no guarantees that it will finish this week un-bruised, with several central bank meetings due.” “Volatility beckons ahead of the Fed meeting, which is expected to be hawkish, with a 50 bps hike and a much higher terminal rate (2023) ‘dot plot’. Our chief concern is what this might do to the USD, which has come under pressure as the trendy ‘pivot’ narrative has taken hold, despite clear signs of sticky US inflation.” “NZ factors will also play a role, with the HYEFU and GDP due this week, but they’re likely to play second fiddle to volatility and the global vibe (again!).”  
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

US Inflation Data May Affect The Type Of Fed Decision, Which Will Be An Important And Long-Lasting Event

InstaForex Analysis InstaForex Analysis 12.12.2022 10:23
The Fed will start its two-day monetary policy meeting on Tuesday, during which the members will recap the past year and make its forecasts for GDP, labor market, employment and interest rates for the coming years. It will be an important and long-running event as it will determine, at least for the first quarter of next year, the bank's overall view of the economy. Tomorrow's release of consumer inflation data in the US will not go unnoticed either as expectations are a 7.3% rise in CPI y/y and 0.3% m/m. But if the figures show a decline, inflationary pressures will ease, which is good for the economy. This may give the Fed a strong reason to reduce the rate hike after Wednesday's 0.50% increase. In the event of such a scenario, a strong rally in stock markets will occur, accompanied by a decline in dollar and Treasury yields. But if the CPI data exceed expectations, demand for equities will dip, while dollar will surge Forecasts for today: USD/JPY The pair remains trading within the range of 135.80-138.00. It will not go out until the release of the US consumer price index. USD/CAD The pair is trading within the range of 1.3535-1.3700. It will not go out until the release of the US consumer price index and the Fed monetary policy meeting.     Relevance up to 07:00 2022-12-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329494
Monitoring Hungary: Glimmering light at the end of the tunnel

FX: More Pain For The Forint (HUF) Can Be Expected, The Correlation Between US 10-year Yields And G10 Dollar Crosses Has Picked Pp

ING Economics ING Economics 12.12.2022 12:31
A heavy event risk calendar this week stands to define the core themes for 2023. First and foremost is the question of how quickly US inflation decelerates (CPI on Tuesday) and how the Fed will respond (FOMC Wednesday.) A whole host of central bank meetings around the world, including the ECB on Thursday, will provide insights on how long policy stays tight USD: How long does policy need to stay tight? A pivotal week for FX and global asset markets lies ahead of us. The week will play a major role in determining whether central banks (particularly the Federal Reserve) need to keep policy tighter for longer, or can (as the market prices) start to relax a little over inflation and can consider rate cuts in the second half of next year to ensure a soft landing. The two key event risks here are tomorrow's US November CPI reading and Wednesday's FOMC meeting - including the release of a fresh set of dot plots. Going into these event risks the market is pricing the Fed tightening cycle peaking in the 4.90/5.00% area next spring and then 50bp of rate cuts being delivered in the second half. And consensus is for another relatively soft 0.3% month-on-month core CPI release tomorrow, which would tend to support the market's pricing. We look at a range of Fed scenarios in our FOMC preview. As noted previously here, December is typically a soft month for the dollar and probably a more dovish set out of outcomes and a weaker dollar does the most damage to positioning, which is probably still long dollars. However, we do feel that market consensus still underappreciates the risk of inflation staying higher longer and also is dangerously second-guessing the Fed in terms of 2H23 rate cuts. The Fed has said that it feels there is good forward guidance value in its dot plots and it may choose to get across its current message of tight policy staying in place for longer through those dot plots. Our rates team also sees upside risks to US 10-year yields from the 3.50% area, with outside risk to the Fed discussing outright US Treasury sales (rather than just roll-offs) if it does think the long end of the curve is too stimulative. Notably, the correlation between US 10-year yields and G10 dollar crosses has picked up substantially since the soft October CPI release on 10 November. The long end of the curve is therefore going to be a key battleground for the dollar. Event risks this week will therefore determine whether 2023 starts with a focus on the inflation battle being won and the prospect of stimulative, reflationary policy coming through - a dollar negative. Or whether sticky inflation ties the hands of central bankers, the US yield curve remains steeply inverted and the dollar continues to perform well in a challenging risk environment. We do see the latter scenario as more likely, but this week should certainly give one of the scenarios a big lift. There is very little on the US calendar today and we would expect DXY to go into tomorrow's CPI release near its current 105 levels. Chris Turner EUR: A big week for central bank meetings in Europe This week sees central bank meetings in the eurozone, Switzerland and Norway, where 50bp hikes are expected in the former two and a 25bp hike in the latter. Please see our full European Central Bank preview here and our Swiss National Bank preview here. On the former, we note there is still a slight risk of the ECB doing 75bp rather than 50bp - which would probably help the euro. But this of course comes after the US CPI/FOMC risk. Given the 10% EUR/USD correction off the late September lows, our preference would be that EUR/USD struggles to hold any gains over 1.06 this week and could end the week lower should US events oblige.  Chris Turner GBP: BoE to hike 50bp this week This week's highlight will be the Bank of England meeting on Thursday. Please see our full preview here. We expect the BoE to revert to a 50bp hike (55bp hike priced) as it tries to balance high inflation against growing evidence of a prolonged downturn - with little signs of stimulus.  Our game plan assumes that GBP/USD struggles to hold any gains over 1.23, while EUR/GBP should find support in the 0.85/0.86 area. A winter of discontent should see sterling underperform should central bankers need to keep rates tight(er) into a recession.  Chris Turner CEE: Asymmetric response to global developments A busy week at the global level will be accompanied by several data points from the Central and Eastern Europe region. This week's headline number will be November inflation in the Czech Republic. We expect inflation to accelerate from 15.1% to 15.9% year-on-year, slightly above market expectations. The number will have the market's attention not only because of the Czech National Bank meeting next week but also because of the surprising slowdown in inflation in October when government measures against high energy prices came into play. After this number, we can then expect more headlines coming from the CNB given Thursday's start of the blackout period. Also today, Hungary's assessment is expected to be discussed at the European Council level. However, early rumours suggest that the European Commission's conclusion remains unchanged. November inflation in Romania will be published on Tuesday. We expect an increase from 15.3% to 16.6%, above market expectations. Although we have already seen inflation slowing in previous months, this result would thus raise the peak again. We do not expect another rate hike from the National Bank of Romania in January, but either way, it will be a close call, and tomorrow's number could be key. In the second half of the week, we will then see secondary data across the region such as the current account balances in Poland and the Czech Republic and the final inflation estimate in Poland, including the core number. In the FX market, this week we will be watching the impact of global events on the region. Our baseline scenario of a stable EUR/USD should not bring too much change for the region, but risks both ways are significant and higher volatility compared to previous rather quiet weeks in the CEE FX market can be expected. As we mentioned earlier, interest rate differentials have fallen significantly over the past weeks in the region leaving FX vulnerable to global shocks. Also, the gas story is creeping back and with higher gas prices we see growing signs of a renewed relationship with FX. The region's reaction would thus be asymmetric in the direction of weaker FX in our view, if the US dollar ends up as a winner this week. The Hungarian Forint will be following a separate story in addition to the EU developments and the newly lifted fuel caps. Given the negative rumours, more pain for the forint can be expected and the question is whether EUR/HUF will make another march towards the 430 level as it did in October, which led the central bank to an emergency rate hike in the middle of that month. In our view, the long positioning has fully unwound, and the market is leaning towards the short side again, but we don't think that the negative outcome of the EU story is fully priced in, so it is likely that we will test new highs this week. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

Euro Holds Above $1.05, USD/JPY Pair Rose Above 136

Kamila Szypuła Kamila Szypuła 12.12.2022 14:19
This week is one of the most macro-packed so far this year, with four major central banks holding their final policy meetings of the year, plus consumer inflation data from the United States that could be instrumental in determining the outlook for U.S. interest rates and the dollar. The U.S. Federal Reserve, the European Central Bank, the Bank of England and the Swiss National Bank will all release rate decisions. Overall, risk assets came under pressure on Monday despite further signs from China that it may be moving away from its very restrictive Covid-19 policy. Read next: Rivian Break Down Of Joint Venture Negotiations With Mercedes | Amgen Inc. Begins Action to Acquire Pharmaceutical Company Horizon Therapeutics| FXMAG.COM Euro Holds Above $1.05 Ahead of Key Policy Meetings A package of positive readings from Great Britain appeared. Against the yen the dollar rose 0.2% EUR/USD EUR/USD has been rising since reaching a 20-year low of 0.9536 in October. The rate reached the level of 1.0595, but was unable to break the breakout point and the previous high at 1.0615 and 1.0638 respectively. It is currently trading around the 1.0560 level with an upside bias. The euro is weaker today as the US dollar gains ahead of a crucial week of central bank meetings and data. There are no key macro economic events for the EUR/USD pair today. The European Central Bank is expected to deliver a dialed-down 50 bps rate hike on Thursday. Meanwhile, all eyes turn to CPI numbers from the US due on Tuesday GBP/USD The overall look of the cable market looks bearish. The GBP/USD pair is currently trading close to the level it closed last week at 1.2239. On the daily chart, we can see that the price of the cable has increased to this level. Trading on the daily chart shows the price around 1.2280. The British pound was subdued in reaction to the breaking of British GDP this morning, however, after the start of the European session, the reaction may be more positive. Other reports were also positive with only Industrial Production (MoM) (Oct) dropping to 0.0%. Source: investing.com GBP/USD daily chart AUD/USD The Australian dolar was last down 0.4% at $0.6772. Today, the AUD/USD pair reached 0.6795 during the day and then started to fall. On the daily chart, we can see that the pair is trading at 0.6756. USD/JPY USD/JPY started the week with gains. The pair rose from 135.0740 – the last week close level - to 136.8440 - current trade. This means that the Japanese yen is negatively compared to the US dollar. In other words against the yen the dollar rose 0.2% Today there were reports of the Japanese PPI, which was higher than expected. Year on year PPI reached 9.3% and PPI m/m 0.6% However, they did not support the yen. The last statement of the representatives of the Bank of Japan still plays a role. Bank of Japan Governor Haruhiko Kuroda recently said it was too early to discuss the possibility of reviewing the central bank's monetary policy framework. However, an analyst close to policy makers suggested that the BoJ may drop the 10-year bond yield cap as early as next year. Source: investing.com, dailyfx.com, finance.yahoo.com
The USD/JPY Price Seems To Be Optimistic

USD/JPY Pair: The Main Scenario Is An Upward Movement In The Short-Term

InstaForex Analysis InstaForex Analysis 13.12.2022 08:00
On Monday, the Japanese yen crossed the resistance of the 137.08 monthly embedded price channel line and headed towards 138.75. Surpassing this level sets the target range at 140.05/35 , which was the low of the 22nd of September. The prospect of a double convergence with the Marlin oscillator never materialized. The signal line of the oscillator has already broken into the growth area. The main scenario is an upward movement in the short-term. On the four-hour chart, the price has settled above the indicator lines, above 137.08, and now it continues to rise. The momentum for growth was set by a synchronous price reversal from the MACD line and the signal line of Marlin oscillator from the zero neutral line (arrows).       Relevance up to 03:00 2022-12-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329605
The Data May Keep The British Pound (GBP) From Rising

The Price Of GBP/USD Pair May Rise To The First Target Level

InstaForex Analysis InstaForex Analysis 13.12.2022 08:02
Technical indicators for the British pound froze in a neutral position. The price took advantage of this and continued to grow. Optimistic data on the British economy was released yesterday and among them was the monthly construction output which increased 0.8% in volume terms in October. The UK employment report will be released today and forecasts are mixed: the quarterly unemployment rate is seen higher at 3.7% against the former release of 3.6%, the 3-month moving average for employment may rise from -52,000 to -17,000 and wage growth is projected to rise 6.2%. Eventually, the price may rise to the first target level of 1.2410 and further rise to 1.2598. On the four-hour chart, the price is on the ascending MACD line. The Marlin oscillator is currently in the green - area of growth. The main assumption is that the price would reach the first target at 1.2410.   Relevance up to 03:00 2022-12-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329607
The EUR/USD Price May Fall Under 1.0660

EUR/USD Pair: This Morning, The Price Is Trying To Rise

InstaForex Analysis InstaForex Analysis 13.12.2022 08:06
Investors raise their expectations this week, in which several central banks meetings (Federal Reserve, European Central Bank, Bank of England) are held, given the ongoing divergence between central banks' monetary policies. The Fed will become softer, while the ECB will be more hawkish. Formally, the forecast for a rate hike by all central banks is the same - 0.50%, but there has been so much talk about a surprise from the ECB that a 0.75% hike has become a forecast rather than a surprise. And that's why the euro closed Monday at the opening level despite the decline of other counter-dollar currencies. This morning, the price is trying to rise. Today's main event will be the US inflation report for November. CPI is expected to decline from 7.7% y/y to 7.3% y/y. The euro has a chance to reach the target range of 1.0615/42. If the divergence in the sentiment of the central banks is really strong, the euro may go higher, to the range of 1.0758/87 (highs in May and June). On the four-hour chart, the price failed to fall under support of the MACD line. The last reversal from it occurred this morning. The Marlin oscillator is shifting to the upside. We expect the price to reach the first target range of 1.0615/42.
The EUR/USD Price Failed To Exhibit A Strong Trending Movement

The EUR/USD Price Failed To Exhibit A Strong Trending Movement

InstaForex Analysis InstaForex Analysis 13.12.2022 08:18
The EUR/USD currency pair's trading remained subdued and undetectable on Monday. Once more, the price failed to exhibit a strong trending movement, initiate a correction, and even surpass the moving average line situated very nearby. In terms of the 4-hour TF, there was no movement at all on Monday. On the one hand, this market behavior is expected, given the lack of any significant news or events in the US or the EU on Monday. Nothing prompted a reaction. On the other hand, this week's calendar is packed with significant events, so the market may already be anticipating them. It could have, but it chose not to this time. As a result, we have continued on an upward trend up to this point, which has long raised many concerns. As we've already mentioned, the pair's growth is completely logical from a technical standpoint because all indicators point upward. Fundamentally speaking, however, the euro currency's downward correction following its rapid and illogical growth should have begun two weeks ago. Important inflation reports and meetings of all three central banks that are relevant to us will take place this week. Since these events frequently overlap, we won't predict how the market will respond to them at this time. In response to such important reports, there may be a delay of several hours or even a day. Most of the time, traders will be forced to respond to the following event without planning. We also want to remind you that trading sessions impact how the market reacts. If the Fed meeting's outcomes are disclosed late evening, European exchanges cannot make any sense of them. As a result, the response of Europeans can be anticipated the following morning, when reports and data will be made public. Will US inflation continue to fall? In theory, there is almost no reason to doubt it will continue. It has already been falling for four consecutive months while the Fed's key rate has been rising. There is, therefore, no justification for anticipating that inflation will suddenly resume its downward trend. We also need to remember that any change in interest rates has a long-term impact (as many Fed members have stated). In other words, if the rate changes, it will take three to four months for key macroeconomic indicators to reflect. Therefore, there is absolutely no reason to anticipate the end of the consumer price index slowdown. The sole issue is how quickly it will deteriorate. According to official predictions, inflation will decrease to 7.3–7.6% y/y by the end of November. The actual value, in our opinion, will be closer to 7.3%, which will support the Fed's decision to begin easing up on the pace at which it tightens monetary policy. On the one hand, this is bad news for the US dollar because the rate at which the market has been actively selling the dollar hasn't slowed down recently. However, it is the ratio of the Fed rate to the ECB rate that matters, not the Fed rate itself. Unexpectedly for many, the European regulator may also increase its rate this week by 0.5%. That is, to slow the rate at which monetary policy is tightening, despite European inflation, which is currently at 10%, only began to decline at the end of November. From our perspective, one decline is too minor to discuss a particular trend. The current key rate of the ECB is 2%, which is not even close to the "neutral level" at which pressure on inflation (and the economy) starts to build. As a result, we are certain that the decrease in inflation in November was coincidental. It's just one slowdown, in any case. The market may therefore view the ECB's decision to start easing up on its apparent aggressive stance, which was intended to curb high inflation. We think that the factors contributing to the euro's decline are increasing daily. As of December 13, the euro/dollar currency pair's average volatility over the previous five trading days was 88 points, considered "average." So, on Tuesday, we anticipate the pair to fluctuate between 1.0453 and 1.0625. An upward turn of the Heiken Ashi indicator will indicate a potential continuation of the upward movement. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestion: The EUR/USD pair is still moving upward. Therefore, until the price is fixed below the moving average, long positions with targets of 1.0625 and 1.0620 should be considered. Only after fixing the price below the moving average line with targets of 1.0453 and 1.0376 will sales become relevant. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     search   g_translate     Relevance up to 01:00 2022-12-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329601
Analysis And Trips For Trading The GBP/USD Pair In Short And Long Positions

GBP/USD Pair: The Most Active Movements Are Still Ahead

InstaForex Analysis InstaForex Analysis 13.12.2022 08:20
On Monday, the GBP/USD currency pair did not attempt to begin a downward correction and remained above the moving average line. On Monday, the UK released comparatively significant GDP and industrial production reports, while the US and the EU still need to release significant data. Since the GDP was not reported quarterly, we cannot say that these reports are especially significant. As a result, the market's response could have been stronger. However, the EUR/USD pair has traded consistently throughout the day. Consequently, Monday went off without a hitch. The technical picture has stayed the same for a very long time, but it doesn't stay the same either. The pair is still above the moving average, and we occasionally make slow attempts to move below it. On the 4-hour TF, the price is situated above every line of the Ichimoku indicator, and both linear regression channels point upwards. There are, therefore, no technical grounds to anticipate a decline in quotes at this time. However, the most active movements are still ahead because this week will be packed with many significant events and publications. It is important to note that the pair's volatility has significantly dropped over the past few weeks. The average volatility is now only 113 points, down from 150 to 200 points a month or two ago. This is odd considering that one would anticipate an increase in this indicator on the eve of three central bank meetings. But as you may recall, we have frequently stated that it is impossible to predict how the market will react to such significant events. Therefore, if the current week turns out to be less volatile than it initially appears, we won't be surprised. The Bank of England rate and inflation may differ from one another. The ratio of inflation to the Bank of England rate is the most significant issue we want to address in this article. American inflation has been declining for four consecutive months, European inflation has been declining for one month, and British inflation is still rising. There has not been a single decrease in the consumer price index despite the Bank of England raising its key rate eight times in a row. Thus, the British regulator found itself in a situation where there was no way out other than to raise the rate even further. However, the rate will also need to be increased, even more than by the Fed, which the British economy might need help handling. Experts predict that BA will increase the rate by 0.5% this week, and for this reason alone, we have doubts about the British pound's ability to continue rising. Over the last two months, the pound sterling has increased by 2000 points, which is a significant increase. It increased primarily due to the need to counteract the global downturn, market expectations for a slowdown in Fed rate increases, and Liz Truss' resignation for rejecting tax proposals. But at this point, we're talking about a slowdown in the BA's growth rate. The slowdown, when there hasn't even been a single decline in inflation. BA won't reach the required inflation rate of 2%, or it will raise the rate for a very long time. In both scenarios, the pound may respond by falling. The Fed has justification for shifting from an aggressive to a moderate stance. Not the Bank of England. Additionally, the regulator will face even more inquiries if inflation keeps increasing (the corresponding report is already due on Wednesday). Particularly in light of management's candid remarks about the impending two-year recession. What transpires? Since inflation is high and a recession is unavoidable, the Bank of England can no longer raise interest rates as quickly as it once could. The market may view all of these factors very differently. Still, after a 2000-point rise against such a fundamental backdrop, it is very challenging to envision the British pound strengthening further. Over the previous five trading days, the GBP/USD pair has averaged 113 points of volatility. This value is "high" for the dollar/pound exchange rate. Thus, on Tuesday, December 13, we anticipate movement within the channel and are constrained by levels 1.2169 and 1.2390. The Heiken Ashi indicator's downward reversal again indicates that the pair is making another attempt to correct. Nearest levels of support S1 – 1.2146 S2 – 1.2085 S3 – 1.2024 Nearest levels of resistance R1 – 1.2207 R2 – 1.2268 R3 – 1.2329 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair is attempting to resume its upward trend. Therefore, until the Heiken Ashi indicator turns down, you should maintain buy orders with targets of 1.2329 and 1.2390. With targets of 1.2146 and 1.2085, open sell orders should be fixed below the moving average. Explanations of the illustrations: Linear regression channels help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 01:00 2022-12-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329603
The Euro May Attempt To Resume An Upward Movement

This Week The EUR/USD Pair May Fly From Side To Side

InstaForex Analysis InstaForex Analysis 13.12.2022 08:23
M5 chart of EUR/USD On Monday, EUR/USD moved sideways for the most part. This is perfectly visible in the chart above. Despite the fact that the pair is still near its local highs, it can neither continue to move up, nor start a bearish correction. At the moment, the price is stuck between the critical line and 1.0579. There was no macroeconomic and fundamental background on Monday, but the pair was moving up and down during the day. However, these movements do not clarify where the euro will move in the medium term. Therefore, the only thing we can do is to wait for the central bank meetings and inflation reports. Market reaction could be mixed, but there is nothing else to do. The euro climbed too high (as well as GBP), and there aren't many support factors for it right now (only technical). Nevertheless, the market still refuses to buy the US currency. On the bright side, the trading signals were very good. First, the pair rebounded from the Kijun-Sen line, forming a buy signal. Then it rose to 1.0579, rebounding from it twice (sell signals). Afterwards, it returned to the critical line and bounced from it. Thus, I have managed to open three deals, two of which closed with about 30 pips profit, and one without a loss. The first trading day of the week was profitable, let's hope the other days will be profitable as well. COT report COT reports on EUR/USD have puzzled traders through most of 2022. Half of the year, COT reports indicated clear-cut bullish sentiment among large market makers while the single European currency was extending its weakness. For a few months, the reports showed a bearish sentiment and the euro was also trading lower. Currently, the net position of non-commercial traders is again bullish and increasing. Although the euro is rising, a rather high value of the net position allows us to assume an early completion of the uptrend. During the reporting week, the number of long positions held by non-commercial traders increased by 3,900 and that of short positions grew by 1,300. Accordingly, the net position grew by about 2,600 contracts. The green and red lines of the first indicator moved far away from each other, which could mean the end of the uptrend (!!!) (which, in fact, never happened). The number of long positions exceeds that of short positions by 125,000. Therefore, the net position of non-commercial traders may continue to rise further but without triggering a similar rise in the euro. When it comes to the total number of longs and shorts across all categories of traders, there are now 35,000 more short positions (661,000 vs 626,000). H1 chart of EUR/USD On the hour chart, EUR/USD is still near its local highs and above the Ichimoku indicator lines. At the same time, quotes have been in a limited range for more than a week, which, on the one hand, can be called a horizontal channel, but on the other hand - not. Anyway, this week the pair may "fly" from side to side, so we should be ready for any movements. On Tuesday, the pair may trade at the following levels: 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, and also Senkou Span B (1.0442) and Kijun Sen (1.0514). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 13, there are no important reports or events in the EU, but the US will publish the inflation report for November, which is important because the Federal Reserve's monetary policy depends on it. Therefore, the stronger the actual value deviates from the projections, the stronger the market reaction may be. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group Relevance up to 01:00 2022-12-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329597
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

GBP/USD Pair: This Week Everything Will Depend On The Macro Data And Meetings Of The Central Banks

InstaForex Analysis InstaForex Analysis 13.12.2022 08:25
M5 chart of GBP/USD GBP/USD failed to settle below the critical line on Monday, so the uptrend (if it can be considered as such now) is still present. At the moment, the price is still above the Ichimoku indicator, but it stopped rising, and the pair failed to surpass 1.2342. The pound rose 2000 pips in the recent months, which is unreasonably high in my perspective. I'm still waiting for a strong bearish correction. It might have started on Monday, but the UK GDP report turned out to be neutral, and the industrial production was completely in line with the forecasted values. In general, the pound showed exactly the same movements as the euro did. So, traders have to wait for all those events and reports, which are scheduled for this week. They will be available starting today. Speaking of trading signals, everything was quite messy. All the signals, except for the first one, were formed near 1.2259, which is a sign of a flat. Maybe, there was no flat on Monday, but the movement was still unpleasant. You could earn about 10 pips on the first buy signal near the critical line, because a sell signal followed near the first obstacle. This signal turned out to be false, as well as all subsequent ones. Therefore, traders could work only the first two. The first trade closed with a loss, the second - with the Stop Loss at breakeven. As a result, the day ended either with minimal loss or nothing. COT report The latest COT report on the British pound showed that the bearish mood is weakening. During the reporting week, non-commercial traders opened 1,700 long positions and closed 7,800 short ones. The net position increased by almost 10,000. The net position dropped by 1,000. The figure has been on the rise for several months. Nevertheless, sentiment remains bearish, and the pound is on the rise against the greenback for no reason. We assume that the pair may well resume the downtrend soon. Notably, both GBP/USD and EUR/USD now show practically identical movement. At the same time, the net position on EUR/USD is positive and negative on GBP/USD. Non-commercial traders now hold 54,000 sell positions and 30,000 long ones. The gap between them is quite wide. As for the total number of open longs and shorts, the bulls have an advantage here by 10,000. Technical factors indicate that the pound may move in an uptrend in the long term. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD GBP/USD continues to trade very high on the one-hour chart, but still tries to maintain a corrective mood since the highs are no longer updated. This week everything will depend on the macro data and meetings of the central banks, so the movements may be very strong and can turn in any direction. We should be ready for any developments. On Tuesday, the pair may trade at the following levels: 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259, 1.2342, 1.2429-1.2458. The Senkou Span B (1.2121) and Kijun Sen (1.2210) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. There are no interesting events planned for Great Britain, but the market should be satisfied with the US inflation report. Of course, if the actual value of this report completely coincides with the forecast, then there might not be any reaction, but you should still be prepared in case the pair moves sharply. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group Relevance up to 01:00 2022-12-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329599
The EUR/USD Pair Chance For The Further Downside Movement

Germany's Inflation Data Will Be Have Impact On The Euro

InstaForex Analysis InstaForex Analysis 13.12.2022 08:29
Analysis of transactions in the EUR / USD pair The test of 1.0540 occurred when the MACD line was far above zero, so the upside potential was limited. No other signals appeared for the rest of the day. The speech of ECB Supervisory Board member Kerstin Jochnick was ignored, perhaps because today is a more interesting day as ahead is Germany's inflation data, which is set to slow down. That will have a negative impact on euro, especially after the ZEW Institute's business sentiment index for Germany and the eurozone. But the whole focus will be on the afternoon, particularly on the data on US consumer prices. A decline in the index will most likely lead to a sharp rise in euro to new December's highs, as well as on a new yearly high. Meanwhile, a surge in US inflation will put an end to the bullish outlook, which will negatively affect risk appetite. For long positions: Buy euro when the quote reaches 1.0555 (green line on the chart) and take profit at the price of 1.0605. Growth will occur only when inflation data in Germany exceeds expectations. But remember that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0515, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0555 and 1.0605. For short positions: Sell euro when the quote reaches 1.0515 (red line on the chart) and take profit at the price of 1.0461. Pressure may increase after weak Eurozone statistics and before important US data. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0555, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0515 and 1.0461. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 05:00 2022-12-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329615
The Pound Is Now Openly Enjoying A Favorable Moment

GBP/USD Pair: For Short Positions, Pressure Will Return If Reports Indicate Strong Inflation In The US

InstaForex Analysis InstaForex Analysis 13.12.2022 08:36
Analysis of transactions in the GBP / USD pair The test of 1.2245 occurred at a time when the MACD line had just started to move above zero, which was a good reason to buy. This led to a price increase of over 40 pips, in which the quote hit 1.2285. Selling from this price was not very successful because the pair did not go down immediately. No other signals appeared for the rest of the day. The smaller contraction in UK GDP in the third quarter did not make investors too happy, but the monthly growth exceeded expectations, so pound romovese, albeit temporarily. However, today, a number of labor market reports are scheduled, such as the changes in jobless claims, unemployment rate and average UK earnings. A decline in all indicators will lead to a momentary drop in pound, especially since the UK trade balance data and the Bank of England's financial stability report will not have much impact on the market. Meanwhile, the speech of Bank of England Governor Andrew Bailey will be decisive as he may shed some light on future monetary policy. In the afternoon, the US will release a report on consumer prices, which, if shows a decline, will push pound to new December and yearly highs. A rise in US inflation, on the other hand, will put an end to the bullish outlook and risk appetite, which will drive GBP/USD lower. For long positions: Buy pound when the quote reaches 1.2286 (green line on the chart) and take profit at the price of 1.2344 (thicker green line on the chart). Growth will resume if there are very good statistics. But remember that when buying, the MACD line should be above zero or is starting to rise from it. Pound can also be bought at 1.2229, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.2286 and 1.2344. For short positions: Sell pound when the quote reaches 1.2229 (red line on the chart) and take profit at the price of 1.2169. Pressure will return if reports indicate strong inflation in the US. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.2286, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.2229 and 1.2169. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader Relevance up to 05:00 2022-12-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329617
Navigating Interconnectedness: Analyzing Banks' Exposures and Funding from Non-Bank Financial Institutions

FX: The EUR/HUF Cross Rate Continues Its Volatile Path, The South African Rand (ZAR) Is The Worst EMEA FX Performer

ING Economics ING Economics 13.12.2022 09:01
FX markets have been becalmed over the last two weeks as participants tidy up positions for year-end and await the next key input into the global macro stay. One such input will be received today in the form of the US November CPI release, where another soft 0.3% MoM core reading is expected. Its a big release and will set the tone for tomorrow's FOMC meeting A scandal involving South African President Cyril Ramaphosa is driving the rand underperformance USD: November CPI front and centre Traded levels of volatility for longer tenors (one month and three months) have been falling sharply over the last two weeks as the FX markets take a breather. Even though shorter-dated tenors price in plenty of volatility over the next week, the view seems to be that into the first quarter of next year, FX markets can continue to settle. That view will be challenged over the next 36 hours with the release of the November US CPI at 1430CET today and the Federal Open Market Committee (FOMC) tomorrow at 20CET. Given that last month's CPI release was a major trigger for the dollar sell-off, all eyes will be on today's figure. Our chief international economist, James Knightley, is forecasting the key core component at 0.3% month-on-month, the same as the consensus and the same as last month. James says the upside risk stems from shelter and Owners' equivalent rent not falling as quickly as consensus expects – it takes time for the decline in asking rents to feed into what is actually being paid. And downside risks come from used car prices again and whether medical costs stay soft after their technical fall last month. James says there will be more focus today on "services ex shelter" inflation, given that Fed Chair Jerome Powell highlighted that in a recent speech.  Today's release will set the dollar tone for tomorrow's FOMC meeting and into the first quarter of 2023. We think the market is being a little early in pricing 50bp of rate cuts for 2H23 and could see the dollar bouncing on any upside surprise in today's CPI data – including upward revisions to last month's reading. The data probably will not be a knock-out blow to the dollar – one way or the other – given tomorrow's big FOMC meeting including a new set of Dot Plots. Therefore plenty to play for over the next 36 hours. A DXY close above its 200-day moving average at 105.80 would be helpful in supporting our view that the dollar will be strengthening through 1Q23. Chris Turner EUR: Make or break As above, CPI and FOMC inputs into the dollar equation will be a key driver of EUR/USD into year-end and early 1Q23. If we were to pick out two levels, we would say the 1.0600/10610 area is key resistance. A close above that on a soft US CPI release would warn of a lot more pain into year-end and EUR/USD drifting up to 1.08 and even 1.0950/1.1000. On the downside, the 200-day moving average is now 1.0350 and would be a level any investors trapped long dollars at higher levels might choose to offload some dollars. Away from EUR/USD, the EUR/HUF cross rate continues its volatile path. News from Brussels last night is that there appears to be progress on the release of EU funds to Hungary. Investors have been here before with many false dawns, but it does indeed seem like progress is being made. As we discuss in our recently released Directional Economics, the Polish zloty, not the Hungarian forint, will probably be the market's target for scrutiny in 2023. Chris Turner GBP: Better jobs data gives the BoE a headache We have just seen the latest UK jobs data, where the November payroll increased more than double what was expected and the weekly earnings rate ex-bonus nudged up to 6.1% 3m/YoY, the highest in a year. This adds to thoughts of a full employment recession and supports some of the more hawkish pricing of the Bank of England (BoE) policy cycle. It is probably not enough to prompt the BoE into another 75bp hike on Thursday (a 57bp hike is priced) but will support sterling.  Today's UK data could light the fuse of a Cable rally, were US CPI data to oblige. Our prior has been that this rally stalls around this 1.2300/2310 area – but a close above here warns of another three to four big figures higher during thin, year-end markets. Chris Turner ZAR: President Ramaphosa faces proxy impeachment vote One might have expected the South African rand to be doing a little better over recent weeks. The dollar is weaker, the China re-opening narrative has prompted a rally in the industrial metals markets and seen South Africa's terms of trade improve markedly. But no, outside of the Russian rouble, the rand is the worst EMEA FX performer since 10 November – the release date of the soft US October CPI data. Driving that rand underperformance seems to be politics. President Cyril Ramaphosa has been caught up in a scandal, whereby an independent panel has concluded he might have violated the constitution in the way he handled the investigation into the theft of cash at his property. The findings of that panel will today be put to a vote in the South African parliament – seen as a proxy impeachment vote for Ramaphosa. The question is how many disgruntled members of the ruling African National Congress (ANC) party will join with the opposition in supporting the panel's finding. As above, we would have thought the rand would be trading a lot stronger were it not for this vote. But equally, if the vote goes through, USD/ZAR could easily be trading over 18.00 in thin December markets. In short, current levels near 17.50 may not last for long. Chris Turner  Read this article on THINK TagsSouth Africa FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
FX Daily: Upbeat China PMIs lift the mood

China’s New Aggregate Financing Increased Less Than Expected | Tesla And Rivian Shares Fell

Saxo Bank Saxo Bank 13.12.2022 09:09
Summary:  U.S. equities had a broad-based rally ahead of the CPI data with energy leading the gains. USDJPY bounced, approaching 138, as US yields moved higher. Crude oil prices rose snapping a 5-day losing streak amid supply worries from Keystone pipeline. Traders took profits in Hong Kong and Chinese stocks, selling Chinese property, technology and EV names. All eyes on November US CPI now where a softer print is generally expected but room for an upside surprise remains. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) advanced ahead of the CPI report Softer prints in the one, three, and five years ahead inflation expectation numbers in the New York Fed’s Consumer Expectations Survey on Monday boosted risk-on sentiments ahead of the release of the most watched CPI report on Tuesday. The S&P500 bounced from its 100-day moving average, gaining 1.4%. All 11 sectors of the benchmark advanced, with energy, utilities, and information technology leading the gains. Valero Energy, surging 5.2%, was the best performer in the S&P500. The tech-heavy Nasdaq 100 rose 1.2%. Tesla (TSLA:xnas) shed 6.3%, falling to the stock’s lowest level in two years on concerns about suspending output in stages at his Shanghai factory ahead of the Lunar New Year and Musk pledged more Tesla shares for margin loans. US Treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) rose after a weak 10-year notes auction In a thin-volume session ahead of the CPI report on Tuesday and the FOMC on Wednesday, yields on Treasuries were 1bp to 3bps higher. The auction of USD32 billion of 10-year notes, awarded at 3.625%, 3.7bps cheaper than at the time of the auction, was the worst since 2009.  The one, three, and five years ahead consumers’ inflation expectations in the New York Fed’s Consumer Expectations Survey fell to 5.2%, 3%, and 2.3% in November from 5.7%, 3.1%, and 2.4% respectively in October. The yields on the 2-year notes and 10-year notes added 3bps each to 4.38% and 3.61% respectively. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) consolidated ahead of key events Ahead of two key events, the FOMC meeting in the U.S. and the Central Economic Work Conference (CEWC) in China, investors in Hong Kong and mainland Chinese stocks took profits and saw the Hang Seng Index 2.2% lower and the CSI300 sliding 1.1%. Chinese property developers and management services, technology, and EV stocks led the charge lower. Country Garden Services (06098:xhk) tumbled 17% after the property services company’s Chairman agreed to sell more than HKD5 billion worth of shares at a 10.9% discount. Longfor (00960:xhkg), The Hang Seng Tech Index dropped by 4%, with Meituan (03690:xhkg) declining by 7%. Li Auto (02015:xhkg) tumbled 12% after reporting larger losses and a large gross margin miss. In A shares, property and financials stocks were top losers while pharmaceuticals gained. FX: USDJPY heading to 138 ahead of US CPI release The US dollar remained supported ahead of the big flow of key data and central bank meetings later in the week. The modest run up higher in US Treasury yields, along with higher oil prices, brought back some weakness in the Japanese yen. USDJPY reached in sight of 138 and the US CPI release today will be key for further direction. EURUSD remained capped below the key 1.06 handle, but a break of that if it was to happen will open the doors to 1.08. NZDUSD eying a firmer break above 0.64 but would possibly need help from CPI for that. Crude oil (CLF3 & LCOF3) prices gain further on China’s easing while Keystone pipeline remains shut Crude oil prices rose on Monday after a week of heavy losses on demand concerns and fading China reopening. Prices were underpinned by further easing of China’s restrictions despite concerns earlier in the week from a rapid surge in cases. Despite reports that the Keystone pipeline was being partially reopened, it remains completely shut on Monday which suggests a potential drop in storage levels at Cushing, Oklahoma, the WTI delivery hub. WTI futures rose to $74/barrel, while Brent touched $78.50. The market awaits news from Russia on whether it will make good on its threat to cut supply to price cap supporters, while the focus will also turn to US CPI today and the FOMC decision tomorrow, as well as the oil market reports from OPEC and IEA.   What to consider? Stronger UK GDP growth but clouded energy outlook, expect more volatility Some respite was seen in UK’s growth trajectory as October GDP rose 0.5% M/M after being down 0.6% M/M last month’s due to the holiday for Queen’s funeral and a period of national mourning. However, the UK may already be in a recession and the outlook remains clouded which suggests there isn’t enough reason for Bank of England to consider anything more than a 50bps rate hike this week. Energy debate continues to run hot and create volatility in gas prices, after weaker wind generation led to talks of refiring the reserve coal plants, but the request was cancelled later on Monday as wind generation rose. The situation continues to highlight the vulnerability of the energy infrastructure due to lack of baseload, and a bigger test probably lies ahead in 2023. Focus will be on energy companies amid the cold snap in the northern hemisphere with coal plants on standby. Agriculture commodities also a focus Australia’s ASX200 (ASXSP200.1) is expected to have a positive day of trade on Tuesday, as well as Japan’s market, while other Asia futures are lower. In Australia, consumer and business confidence are due to be released. In equites, focus will be on energy commodities and equities, given weather forecasts show a deep chill is descending on the northern hemisphere, and threatening to erode heating fuel stockpiles. Natural gas futures surged, while Oil rose 3% $73.17 a barrel. Energy stocks to watch include Australia’s Woodside, Beach Energy and Santos, Japan’s Japan Petroleum Exploration, Eneos, JGC, Chiyoda and Hong Kong-listed PetroChina, CNOOC and China Oilfield Services. Separately, coal futures are also higher, with Asia set to face a coal winter, and coal plants were previously asked to be on high alert in the UK, with snow blanketing parts of the UK. For coal stock to watch, click here. Separately, wheat prices rose 2.8% on expectations supply could wane; so keep an eye on Australia’s wheat producers GrainCorp, and Elders. Elsewhere, Australian beef output is poised to ramp up in the first half of next year, as the herd continues to rebuild. Australia’s Rural Bank agriculture outlook expects increased slaughter rates, and beef production to rise 5% in the first half, (mind you that’s well below average). So keep an eye on Elders, which helps sell and buy livestock, and Australian Agricultural Co – Australia’s largest integrated cattle and beef producer. EV car makers dominate headlines; revving up competition, despite concerns demand could soften Tesla shares fell 6.3% Monday, to its lowest level since November 2020, making it the worst performer by market cap. TSLA shares have fallen about 54% this year. TSLA is reportedly suspending output at its Shanghai electric car factory in stages, from the end of the month, until as long as early January, amid production line upgrades, slowing consumer demand and Lunar New Year holidays. Most workers on both the Model Y and Model 3 assembly lines won’t be required in the last week of December. Rivian shares also fell 6.2% on reports its scrapping plans to make electric vans in Europe with Mercedes. Instead, Rivian will focus on its own products. While Mercedes-Benz says it will continue to pursue the electrification of its vans and its shares closed almost flat in Europe. VW shares were also lower in Europe, despite it announcing plans to increase market share in North America to 10% by 2030 from 4%. VW wants to produce more electric SUV models in the US; and produce ~90,000 VW’s ID.4 model in 2023 in America. NY Fed consumer expectations survey shows slowing inflation, but.. NY Fed’s Survey of Consumer Expectations indicated that respondents see one-year inflation running at a 5.2% pace, down 0.7 percentage point from the October reading. Expectations 3yrs ahead fell to 3.0% from 3.1% and expectations 5yrs ahead fell to 2.3% from 2.4%. However, it is worth noting that inflation expectations remain above fed’s 2% target and unemployment and wage data was reportedly steady. Softer US CPI to offer mixed signals and considerable volatility Last month’s softer US CPI report was a turning point in the markets and inflation expectations have turned markedly lower since then. Consensus is looking for another softer report in November, with headline rate expected at 7.3% YoY, 0.3% MoM (from 7.7% YoY, 0.4% MoM) while the core is expected to be steadier at 6.1% YoY, 0.3% MoM (from 6.3% YoY, 0.3% MoM). While the case for further disinflationary pressures can be built given lower energy prices, easing supply constraints and holiday discounts to clear excess inventory levels, but PPI report on Friday indicated that goods inflation could return in the months to come and wage inflation also continues to remain strong. Easing financial conditions and China’s reopening can be the other key factors to watch, which could potentially bring another leg higher in inflation especially if there is premature easing from the Fed. Shelter inflation will once again be key to watch, which means clear signs of inflation peaking out will continue to remain elusive. China’s aggregate financing and RMB loans weaker than expectations In November, China’s new aggregate financing increased less than expected to RMB1,990 billion (Bloomberg consensus: RMB2,100bn) from RMB908 billion in October. The growth of total outstanding aggregate financing slowed to 10.0% Y/Y in November from 10.3% in October. New RMB loans also came in weaker than expected at RMB1,210 billion (Bloomberg consensus: RMB1,400bn; Oct: RMB615.2bn). Despite the push from the authorities to expand credits, loan growth remained muted as demand for loans were sluggish. Japan and the Netherland joining the U.S. in restricting semiconductor equipment exports to China According to Bloomberg, Japan and the Netherland have agreed in principle with the U.S. to join the latter in restricting the exports of advanced chipmaking machinery and equipment to China. The decisions have yet to be confirmed but it is expected that announcements will be made in the coming weeks.     Detailed US CPI and FOMC Preview – read here. Sign up for our Outrageous Predictions 2023 webinar - APAC edition: Wed, 14 Dec, 11.30am SGT For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: US CPI day, expect considerable volatility – 13 December 2022 | Saxo Group (home.saxo)
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

Higher Interest Rates Could Push The Canadian Economy Into An Unnecessarily Painful Recession

TeleTrade Comments TeleTrade Comments 13.12.2022 09:36
USD/CAD has managed to pick bids above the crucial support of 1.3600. A decline in United States inflation will set the stage for a slowdown in the interest rate hike by the Federal Reserve. The Bank of Canada is ready to hike interest rates further if it fails to see signs of a slowdown in inflation. USD/CAD is expected to display a sheer move as the RSI (14) is hinting at a volatility contraction. USD/CAD has attempted a recovery after dropping marginally below the crucial support of 1.3620 in the early European session. The Lonnie asset is aiming to conquer the immediate resistance of 1.3640 as the US Dollar Index (DXY) has recovered sharply as the market mood has turned cautious again ahead of the United States inflation and the outcome of the Federal Reserve (Fed) policy. The US Dollar Index (DXY) has recovered sharply after a corrective move below the round-level support of 105.00. The USD Index has accelerated its recovery to near 105.06 and is expected to remain volatile ahead. Investors are confused about whether to underpin the risk-aversion theme as the Federal Reserve is set to hike its interest rate peak guidance in its monetary policy meeting on Wednesday or to support the risk appetite theme due to lower consensus for the United States Consumer Price Index (CPI) data. Meanwhile, S&P500 futures are displaying a marginal fall in early London after posting solid gains on Monday. The 10-year US Treasury yields are hovering around the critical resistance of 3.60%, displaying obscurity in the market mood. Upbeat US PPI and lower annual inflation expectations trim inflation consensus Market participants have got anxious ahead of the release of the US inflation. Price pressures have remained the talk of the town this year as the sentiment of the households remained dented and the Federal Reserve policymakers remained worried thinking about the consequences of a higher price rise index. A surprise drop in November’s Producer Price Index (PPI) report and one-year consumer inflation expectations is hinting at a slowdown in the current inflation rate. The headline PPI dropped to 7.4% as producers are worried about a decline in consumer spending. While one-year consumer inflation expectations have declined to 5.2% in November from 5.9% in October, marking the biggest one-month decline on record. This has led to a decline in the consensus for headline inflation to 7.4% vs. the former release of 7.7%. While the core CPI is expected to trim to 6.1% against 6.4% reported earlier. Analysts at JP Morgan Chase & Co. have cited that a soft reading in US CPI data could spark a powerful rally in US equities. The 500-stock basket of the United States could rally up to 10% if headline inflation drops to 6.9% or lower, as reported by Bloomberg. Lower inflation to cement a slowdown in Federal Reserve’s interest rate hike pace Mounting inflation pressures have been forcing the Federal Reserve to tighten the interest rate policy despite the accelerating risks of a recession. The agenda of the Federal Reserve chair Jerome Powell has been the achievement of price stability. Signs of deceleration in the inflationary pressures will set the stage for a slowdown in the policy tightening pace by the Federal Reserve. The risk of higher interest rate peak guidance for CY2023 as the inflation rate will remain beyond the targeted rate of 2% for a while. Rabobank analysts said they expect the US central bank to hike the policy rate by 50 basis points (bps) and see policymakers revising the terminal rate projection to the neighborhood of 5%. BOC Governor seems on foot to hike rates further if fails to dwindle inflation The speech from Bank of Canada (BOC) Governor Tiff Macklem on Monday cleared that the Canadian central bank won’t think twice about hiking interest rates further if inflation remains stubborn ahead. While speaking to business leaders in Vancouver, the Bank of Canada Governor said that policy tightening has begun to work but would take time to feed the economy. The present challenge in front of the Bank of Canada is that higher interest rates could push the economy into an unnecessarily painful recession, as reported by Reuters. USD/CAD technical outlook USD/CAD has dropped after facing barricades around the supply zone placed in a narrow range of 1.3690-1.3700 on an hourly scale. On a broader note, the 20-period Exponential Moving Average (EMA) at 1.3640 is overlapping with the Loonie asset price, which indicates a sideways auction profile. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates a consolidation ahead till the release of a potential trigger
The Downside For The AUD/USD Pair Is Likely To Remain Cushioned

The AUD/USD Pair Is Expecting A Further Downside Movement

TeleTrade Comments TeleTrade Comments 13.12.2022 09:37
AUD/USD recovers from intraday low but stays indecisive on a daily basis. Bearish RSI divergence, rising wedge keeps sellers hopeful even as 100-DMA adds to the downside filters. Recovery remains elusive below 0.6880, weekly high guards immediate upside. AUD/USD picks up bids to pare the previous day’s losses around 0.6755-60 heading into Tuesday’s European session. In doing so, the Aussie pair bounces off intraday low but stays inside a one-month-old rising wedge bearish chart pattern. In addition to the rising wedge, the bearish RSI divergence also teases the AUD/USD bears despite the pair’s latest recovery. On the same line could be the consecutive bearish MACD signals published in the last week. When a higher high on prices fails to gain support from the higher tops of the RSI, it is called the bearish RSI divergence and suggests the quote’s downside. That said, the 0.6800 round figure and the weekly high near 0.6815 challenge the near-term AUD/USD upside ahead of the stated wedge’s upper line, close to 0.6680 by the press time. In a case where the Aussie bulls manage to keep the reins past 0.6880, September’s high near 0.6915 will be in focus. Alternatively, pullback moves could aim for the aforementioned wedge’s lower line, near 0.6695 at the latest, a break of which will confirm the bearish chart pattern that theoretically suggests a south-run towards the mid-0.6400s. During the fall, tops marked in October near 0.6550 and 0.6520, as well as the 100-DMA level surrounding 0.6675, could act as intermediate halts. AUD/USD: Daily chart Trend: Further downside expected  
Hungary's Central Bank to Maintain Base Rate at 13%, Eyes on Effective Rate Amid Forint's Performance

The EUR/GBP Pair Is Displaying A Sideways Auction Profile

TeleTrade Comments TeleTrade Comments 13.12.2022 09:40
EUR/GBP is auctioning below 0.8600 as investors await UK Employment data. Increment in households’ earnings data could be a double-edged sword for the UK economy. The ECB is expected to hike its interest rates by 50 bps to 2.50%. The EUR/GBP pair is displaying back-and-forth moves marginally below the crucial hurdle of 0.8600 in the early European session. The cross is displaying a sideways auction profile as investors are awaiting the release of the United Kingdom Employment data. The asset remained topsy-turvy on Monday despite upbeat UK Gross Domestic Product (GDP) data. The monthly GDP data (October) reported an expansion of 0.5% while the street was expecting a contraction of 0.1%. Also, Industrial and Manufacturing Production data remained better than anticipation but were contracted on an annual basis for October month. Now, investors have shifted their focus to the UK Employment data. As per the projections, the jobless claims gamut will witness a decline of 13.3K. While the quarterly Unemployment Rate (October) is seen higher at 3.7% against the former release of 3.6%. Apart from that, Quarterly Average Earnings data excluding Bonuses is seen higher at 5.9% vs. the former release of 5.7%. An increment in households’ earnings could be a double-edged sword. No doubt, higher earnings will delight households in offsetting inflation adjusted-payouts but will also increase retail demand, which will escalate inflation further. This week, the interest rate policy by the Bank of England (BOE) will hog the limelight. Analysts from Danske Bank are expecting a 50 basis point (bps) rate hike announcement.  On the Eurozone front, investors are awaiting a monetary policy announcement from the European Central Bank (ECB), which is scheduled for Thursday. Analysts at Rabobank think that the ECB is likely to raise the policy rate by 50 basis points in December but note that they are not fully discounting the possibility of a 75 bps hike. They have forecasted a terminal rate of 3%.
Analysis Of The EUR/JPY Pair Movement

Concerns Surrounding Russia And China Could Restrict USD/JPY Pair Moves

TeleTrade Comments TeleTrade Comments 13.12.2022 09:45
USD/JPY remains sidelined after rising to an eight-day high. Treasury bond yields snap four-day uptrend, US Dollar stays depressed. Mixed concerns surrounding US CPI, challenges for BOJ’s pivot restrict immediate USD/JPY moves. USD/JPY traders witness a lack of direction as the quote grinds higher around 137.70 during the early Tuesday in Europe, after refreshing the multi-day top in the Asian session. The yen pair’s latest inaction could be linked to a lack of major data/events, as well as the cautious mood ahead of the US Consumer Price Index (CPI) for November. It should be noted that the mixed concerns surrounding the Bank of Japan’s (BOJ) next moves and sluggish US Treasury yields also restrict the immediate USD/JPY moves. Recently, Bloomberg released an analysis, relying on the data from the Japanese Bankers Association, which challenges the market’s hopes of the BOJ’s monetary policy tightening. “Japan’s financial regulator is examining how vulnerable lenders would be to a sudden slump in government bonds should the nation’s central bank pivot away from its ultra-loose monetary policy in future,” per Bloomberg. It should be noted that the recently firmer inflation and nearness to the end of BOJ Governor Haruhiko Kuroda’s term underpinned the talks of BOJ’s exit from the easy-money policies. Elsewhere, the US 10-year and two-year Treasury bond yields print the first daily loss in four around 3.59% and 4.36% in that order while the US Dollar Index (DXY) retreats to 104.95 at the latest. On Monday, the one-year inflation precursor from the New York Fed slumped the most on record but contrasted with the upbeat inflation expectations for the 5-year and 10-year reported by the St. Louis Federal Reserve (FRED) data. On the same line, the last week’s downbeat prints of the United States Producer Price Index (PPI) also hinted at softer US inflation but the University of Michigan’s (UoM) Consumer Sentiment Index, as well as the US ISM Services PMI and inflation expectations from the UoM Survey, suggested firmer prints of the US CPI. Amid these plays, the S&P 500 Futures print mild losses whereas stocks in the Asia-Pacific region trade mixed even as Wall Street benchmarks posted notable gains. Moving on, the mixed messages from the market, as well as from concerns surrounding Russia and China, could restrict USD/JPY moves ahead of the US inflation data. However, a firmer print of the US CPI, expected at 7.3% YoY versus 7.7% prior, won’t hesitate to recall the pair buyers amid recent hawkish Fed bets. Also read: US Consumer Sentiment Preview: Dollar set to decline on falling inflation expectations Technical analysis USD/JPY’s latest run-up could be linked to the week-start break of a descending resistance line from November 23, now support around 136.10. Also keeping the USD/JPY buyers hopeful are the bullish MACD signals and the firmer RSI (14), not overbought. However, a convergence of the 61.8% Fibonacci retracement level of the Yen pair’s run-up between August and October, as well as a seven-week-long downward-sloping trend line, challenges the USD/JPY bulls around 138.70.
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

A Bleak Outlook For The UK Economy Keeps A Lid On Any Further Gains For The GBP/JPY Cross

TeleTrade Comments TeleTrade Comments 13.12.2022 09:49
GBP/JPY touches a five-month high on Tuesday, albeit lacks follow-through buying. A generally positive risk tone undermines the safe-haven JPY and remains supportive. The mixed UK jobs data fails to impress bulls or provide a fresh impetus to the cross. Traders also seem reluctant ahead of the UK CPI report and the BoE meeting this week. The GBP/JPY cross edges higher for the fifth successive day and climbs to a five-week high, around the 169.25 region during the early European session. A generally positive risk tone, bolstered by the easing of COVID-19 curbs in China, continues to weigh on the safe-haven Japanese Yen and acts as a tailwind for the GBP/JPY cross. The British Pound, on the other hand, draws support from stronger UK wage growth figures, which suggests that the Bank of England will continue to raise borrowing costs to combat stubbornly high inflation. The UK Office for National Statistics (ONS) reported that Average Weekly Earnings, excluding bonuses, rose by +6.1% during the three months to October as compared to +5.8% in the previous month. The gauge including bonuses edged higher to 6.1% in October from 6.0% in September. This helps offset an uptick in the unemployment rate and an unexpected rise in the claimant count change. That said, a bleak outlook for the UK economy acts as a headwind for the Sterling Pound and keeps a lid on any further gains for the GBP/JPY cross. In fact, British Finance Minster Jeremy Hunt told BBC News on Monday that the UK economy is likely to get worse before it gets better. Traders also seem reluctant to place aggressive bets ahead of this week's key data/central bank event risk. The latest UK consumer inflation figures are due for release on Wednesday. This will be followed by the Bank of England meeting on Thursday. This, in turn, warrants some caution for bullish traders and positioning for any further appreciating move for the GBP/JPY cross. The fundamental backdrop, however, suggests that any meaningful dip might be seen as a buying opportunity and remain limited.
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

The Outlook Of The New Zealand Dollar To US Dollar Pair

TeleTrade Comments TeleTrade Comments 13.12.2022 09:53
NZD/USD slipped below the 0.64 mark. Economists at ANZ Bank expect a degree of treading water ahead of US Consumer Price Index (CPI) data. It makes sense to brace for volatility “Today is likely to see similar whippy price action ahead of US CPI, which is the first big event of the week. This will be the final data point ahead of Thursday’s Fed meeting, which we think will be hawkish and arguably poses the greatest risk to the Kiwi (in terms of its potential to drive an upside correction in the USD DXY).”  “We think it makes sense to brace for volatility.” See – US CPI Preview: Forecasts from 10 major banks, inflation appears to have peaked
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

The Aussie Has Shown The Weakest Momentum Among The G10 Currencies

InstaForex Analysis InstaForex Analysis 13.12.2022 10:10
Tensions over what signals the Fed will show are rising due to a recent article that said officials are divided on how long rates should increase. According to the note, some expect a steady decline in inflation in the coming months, so the rate hike should be stopped as soon as possible. Others, however, fear that inflation will not fall adequately next year, so they call for rates to be raised further, or at least held high longer. The US inflation report for November will be published today, but so far businesses are not yet seeing any threats of higher inflation. In fact, yields on 5-year TIPS bonds have been falling since March 2022. Another increase in inflation will cause another uncertainty to the economy, which will ramp up demand for dollar, while reducing risk appetite. NZD/USD A further rise in government spending is likely to increase the risk of tougher policy in New Zealand. This means that interest rates could be raised above forecast, which the RBNZ estimates is at 5.5%, while the ANZ bank sees 5.75%. If that happens, the country will fall into recession much faster than expected, but bond yields will be higher, which would strengthen expectations of a yield spread. Positioning on NZD continues to be bearish, but the performance is still minimal and close to neutral. Net short positions increased by 97m to -411m during the week, however, the estimated price shows no intention to turn downwards yet, which means that the direction of capital flows is more inclined to a rise. NZD/USD is trading in a narrow range, near the resistance level of 0.6460/80. Bulls do not have enough strength to trigger a breakout, but it could hit 0.6240/50 as long as the Fed shows a more hawkish view on its monetary policy. AUD/USD Business confidence turned negative in November, falling below zero for the first time since November 2021. Fortunately, conditions remained fairly high at +20p. But with activity persisting, there is little sign of any reversal in inflation. Cost growth remained largely unchanged at elevated levels on both the labor and input costs, while retail prices continued to rise at a rapid pace. Overall, there is growing concern that the strength of the economy will converge in 2023. This indicates that companies are becoming increasingly pessimistic due to the slowdown in global economy, weaker consumption, rising inflation and higher rates that are lowering real household incomes. That is why it was not a surprise that net short positions in AUD declined by 272 million to -2.713 billion during the week. Bearish performance persists, but the medium-term trend is in AUD's favor. The settlement price is above the long-term average, pointing upwards, which suggests that attempts to go higher will continue. Even so, AUD has shown the weakest momentum among the G10 currencies over the past week due to both volatility in the Fed's monetary policy outlook and growing worries over whether China is willing to cut their restrictions. Hitting 0.6880 and 0.6910/30 are possible, but only if the Fed gives hawkish signals on Wednesday evening. The strength of AUD is also not enough for a sustained rise.   Relevance up to 07:00 2022-12-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329635
GBP: BoE Stands Firm on Bank Rate and Mortgage Interest Relief, EUR/GBP Drifts Lower

Tough time for Canadian dollar, stronger British pound, consolidating S&P 500

Jing Ren Jing Ren 13.12.2022 08:27
USDCAD tests key resistance The Canadian dollar struggles over plunging oil prices amid demand concerns. On the daily chart, the outlook remains positive and crossing moving averages may suggest a potential acceleration to the upside. The pair hit resistance at the former support at 1.3700 and led some intraday traders to take profit. A bullish breakout would extend gains to November’s high of 1.3800, which could foreshadow a recovery to the previous peak of 1.3970. 1.3560 is the first support in case of prolonged hesitation. EURGBP struggles for support The pound strengthened after the UK’s GDP beat expectations in October. The pair has failed to build a support base after it dropped below the major bottom (0.8570) that has been valid since last September. The RSI’s oversold condition led to a limited bounce but might not be enough to save the day as more traders may have switched to the short side. Only a close above 0.8640 would keep the euro bulls in play. Otherwise, a fall below 0.8560 would attract momentum sellers and send the exchange rate to 0.8500. Read next: Euro Holds Above $1.05, USD/JPY Pair Rose Above 136| FXMAG.COM SPX 500 grinds key support The S&P 500 consolidates as investors await US inflation data later today. After turning south at 4100 near September’s high, the index has struggled to find follow-up bids. A fall through the base of the previous bullish momentum prompted buyers to exit and reassess the mixed mood. The latest rebound to the psychological level of 4000 is an important test and a breakout would open the path to the recent peak at 4100. 3910 is a key level to keep the index afloat as its breach could trigger a liquidation towards 3820.
British pound to US dollar - trend analysis and what can we expect this week

Moves in currencies and financial markets in general were, however, rather subdued as traders marked time ahead of this week’s avalanche of central policy news

Enrique Díaz-Álvarez Enrique Díaz-Álvarez 13.12.2022 11:20
Last week’s currency rankings had an unusual couple on top: the Chinese yuan and the Swiss franc. The former was buoyed by the increasing signs that China is moving away from its zero-covid lockdown policy, whereas the latter appears to have finally caught a break after a few weeks of improving risk sentiment, as traders brace for another outsized interest rate hike from the Swiss National Bank this week. Moves in currencies and financial markets in general were, however, rather subdued as traders marked time ahead of this week’s avalanche of central policy news. The Federal Reserve, European Central Bank and Bank of England will all hold their last policy meetings of the year in a period of fewer than 24 hours on Wednesday and Thursday. All three are once again set to deliver sizable rate increases, although we expect to see a moderation in the size of these hikes, with 50 basis point moves priced in across the board. In addition, the US and UK inflation numbers for November both come out just before their respective central bank meetings. The potential for a surprise either way in those reports that upset the narratives just before the meetings is an underappreciated risk, we think. Either way, get ready for some serious volatility in currency markets this week, particularly surrounding the aforementioned central bank announcements. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 12/12/2022 GBP Sterling eked out yet another weekly gain last week against both the euro and the dollar, in a week almost completely lacking in major news, confirming that for now the path of least resistance for the pound is up. The pound was buoyed further this morning by strong GDP data for October, which showed a surprise expansion (+0.5%). Figure 2: UK GDP Growth Rate [% MoM] (2021 – 2022) Source: Refinitiv Datastream Date: 12/12/2022 The Bank of England meeting is now in sight and we, like everyone else, expect the MPC to raise the bank rate by another 50bps. The key will be the expected split within the MPC, i.e. how many members express a hawkish dissent in favour of a 75bp move and how many do so for a dovish 25bp hike. We think that an unprecedented four-way split is not out of the question either, with Silvana Tenreyro indicating recently that she could vote in favour of no change. The publication of key labour market and inflation data in the days leading up to the meeting do, however, make forecasting this week’s meeting an unusually difficult one. EUR After an unusually quiet week in the Eurozone, all eyes turn to the December meeting of the ECB on Thursday. We expect the central bank to raise rates by 50bps, in line with consensus. We do, however, think that the gap between minimal market expectations for future hikes and economic reality is large, and we expect the communications from the ECB to push in a hawkish direction. The staff projections have (again) underestimated inflation, so we expect these to (again) be revised substantially higher, though (again) somehow future inflation will be expected to converge to the ECB target. However, the changes may not be dramatic and given the ECB’s track record, it is not clear whether anyone pays attention to these any more. Their impact could, therefore, be relatively muted. Overall, euro trading will depend as much, or more, on events across the Atlantic, particularly given the key inflation report will also be released out of the US. USD The unusual juxtaposition between the November CPI release on Tuesday and the Fed meeting the next day will make for very volatile trading this week. The market is expecting a relatively mild outcome in the monthly number of less than 4% annualised inflation for both the headline and the core measures. An upside surprise here may be more upsetting than a downward one, as it would make it more difficult for the Fed to pivot towards a wait-and-see policy the next day. As for the Fed meeting, perhaps the key outcome will be the terminal rate that FOMC members expect to see in 2023, represented by the bank’s famous ‘dot plot’. Anything north of 5% could upend the positive narrative of the last few weeks, and provide some headwinds for the US dollar. JPY The yen lagged behind most of its major counterparts last week, with the glaring omissions of the commodity-dependent currencies (NOK and CAD), despite some slightly better-than-expected economic news out of Japan. Last week’s Q3 GDP print beat consensus, though was still in line with a downturn. The Japanese economy contracted by 0.8% annualised in the three months to September according to the revised print, slightly stronger than the -1.1% priced in. A weak yen and uncertainties abroad do, however, continue to cloud the outlook, and a technical recession in 2023 remains a distinct possibility. Trade balance data (out on Wednesday) will be closely watched by market participants this week, though we suspect that the yen will be driven far more by the Fed’s announcement on Wednesday than any domestic news. CHF In a rare turn, the Swiss franc outperformed all other G10 currencies last week. The franc’s volatility has, however, been limited and it ended the week little changed against the US dollar and the euro. After a rather uneventful week, we’re moving towards a hectic one, with the Swiss National Bank set to deliver another interest rate increase this week. We expect a 50bp hike from the SNB, which would take the policy rate to 1%, and the return to the initial pace of tightening following a jumbo 75bp move in September. We think that a slowdown in the pace of tightening is warranted given the decline in Swiss inflation, which has eased to 3% in the last two months. Aside from the rate decision itself, we’ll focus on the language on the franc and FX interventions, as well as the updated inflation forecast. All in all, the SNB will likely maintain its hawkish stance in the near-term, albeit we think that the bank will soon consider when to end the hiking process. AUD Both the Australian and New Zealand dollars outperformed all of their major counterparts last week, with news of a relaxation in China’s zero-covid policy a disproportionately good developpement for the antipodean economies. The rally in AUD was, however, rather limited under the circumstances, particularly in light of the RBA’s moderately more hawkish than expected message following its policy meeting on Tuesday. The RBA raised rates by 25bps, no surprises there, though it did once again stress that it plans to continue hiking at future meetings – markets had braced for a softening in the bank’s forward guidance. The RBA has continued to indicate that future tightening will be contingent on macroeconomic data. This Thursday’s labour report and PMI figures will take on added importance, as investors weigh up whether the RBA will go again at its next policy meeting in February, or wait until the subsequent one in March. NZD Similarly to AUD, the positive headlines out of China provided decent support for the New Zealand dollar, which advanced back above the $0.64 level towards the end last week. A pledge from PM Ardern that her government would prioritise the economy in 2023 has been the only real development of note in the the past few days. This lack of market news has led to minimal volatility in NZD – one month implied volatility in the NZD/USD pair fell to its lowest level since mid-September on Friday. We think that volatility should pick up markedly this week. Aside from the major central bank announcements elsewhere, Q3 GDP data will also be released on Wednesday. CAD The BoC raised rates by 50bps during its policy meeting last Wednesday, more aggressive than priced in, although it signalled a potential pause in the hiking cycle by removing a commitment to raising interest rates at future meetings. The initial reaction in CAD was a positive one, as markets were only pricing in a rather modest chance of a half a percentage point hike, although the dollar found gains hard to come by and ended the week as one of the worst performers in the G10. Investors saw this tweak in communications as a signal that a pause in the hiking cycle may be on the way. Indeed, we think that future hikes now appear unlikely, barring a material blow up in inflation data. Figure 3: BoC Base Rate (2012 – 2022) Source: Refinitiv Datastream Date: 12/12/2022 Another drop in global oil prices last week compounded the misery for CAD. With no domestic news on tap this week, we expect the currency to continue to be driven largely by developments in commodity markets and the Fed announcement on Wednesday. SEK In the absence of relevant data in Sweden last week, the Swedish Krona traded in line with risk assets. Trading in the EUR/SEK pair was choppy, although in the end, the krona ended last week virtually unchanged against the euro. Signs of division among policymakers in the Riksbank’s meeting minutes has further clouded the outlook, and provided no real clear direction for SEK. Volatility is expected to be high this week, as in addition to the ECB and Fed meetings, November inflation data will be released in Sweden. Both headline and core inflation are expected to increase from the previous month. Inflation is already at very high levels, so further signs of an upward trend could strengthen the case for the Riksbank to continue raising interest rates at an aggressive pace in the coming meetings and boost the currency. NOK Last week, Brent crude oil prices fell below $80 for the first time since Russia’s invasion of Ukraine, leading to a general underperformance in the commodity currencies. As a result, the Norwegian krone fell by more than 3.5% against the euro and was one of the worst-performers in the G10, alongside CAD. Figure 3: Brent Crude Oil Futures (2021 – 2022) Inflation data released last week also weighed on the krone. Norway’s inflation rate eased more than expected to 6.5% in November, from October’s 35-year high 7.5%. Core inflation also fell to 5.7% from 5.9% in the previous month, perhaps an indication that rate hikes are beginning to filter through to weaker demand and price pressures. In light of this development, we see it increasingly unlikely that Norges bank will return to rate hikes of 50 basis points or more, and expect another ‘standard’ 25bp move at its Thursday’s policy meeting. The market expects this to be the last rate hike in the current cycle, so any indication that this may not be the case could be bullish for the currency. CNY The Chinese yuan was a rare outperformer last week, posting substantial gains against most currencies as the country inched away from its zero-COVID policy. After an easing in restrictions on a local level, authorities are now lifting curbs nationwide. Most importantly, home quarantine will now be allowed and the QR health code will no longer be needed to visit most public places. This has given hope of an improvement in economic activity, especially in the services sector, which took a turn for the worse in November according to the latest PMI data. Last week’s export and import data also collapsed (-8.7% and -10.6% YoY in November respectively in dollar terms). Inflation remains low amid soft consumer demand, with prices increasing by only 1.6% last month, the slowest pace since March. Looking ahead we’ll continue to focus on economic data and COVID news. On Thursday, a set of hard data for November is scheduled for release. On that day, we’ll also keep an eye on the medium-term lending facility. Despite the subdued loan demand and low inflation, the MLF is expected to remain unchanged, and the focus should be on the rollover. Economic Calendar (12/11/2022 – 16/12/2022) To stay up to date with our publications, please choose one of the below: 📩 Click here to receive the latest market updates👉 Our LinkedIn page for the latest news✍️ Our Blog page for other FX market reports 🔊 Stay up to date with our podcast FXTalk Read the article on Ebury
Orbex's Jing Ren talks US dollar versus Japanese yen, EURCHF and DAX - December, 12 2022

Orbex's Jing Ren talks US dollar versus Japanese yen, EURCHF and DAX - December, 12 2022

Jing Ren Jing Ren 12.12.2022 08:34
USDJPY holds steady The US dollar edged higher after November’s PPI beat estimates. Sentiment remains fragile after the price made a U-turn at 137.80, which was a brief support in the previous consolidation. Some buying interest has emerged from 135.40 with the RSI returning to the neutral area. A break above 137.80 would extend gains to the top of a faded rebound at 139.70. Only its breach could lighten up the mood and attract more buyers. On the downside, 133.70 would be a critical floor to keep the current bounce valid. EURCHF pulls back The euro retreats ahead of the ECB interest rate decision. On the daily chart, the single currency is still consolidating its gains after breaking above September’s high of 0.9850. The supply zone near the recent peak (0.9940) seems to be a hard hurdle to clear. The choppy price action is a sign of hesitation due to a lack of catalyst. 0.9820 is the closest support and the RSI’s oversold condition may attract some bargain hunters. A bounce above the psychological level of 0.9900 could trigger a sustained recovery. Read next: What’s more worrisome is the fact that we will continue to learn of all of the contagion and aftereffects of the FTX collapse in the coming weeks and months. | FXMAG.COM GER 40 struggles for support The Dax 40 fell back as traders took profit ahead of a data-intensive week. The bulls have struggled to lift offers around June’s peak of 14650. Instead, a fall below 14350 prompted short-term buyers to take some chips off the table. The former demand zone around 14400 has become a supply one, and more sellers would join the rank if the buy side fails to reclaim it. The recent low of 14150 sits on the 30-day moving average and is a major support. The index could be vulnerable to a deep retracement should it be pierced.
Bestway Might Have Larger Designs On The UK's Second Biggest Supermarket

The Bank Of England Is Likely To Continue Raising Rates Despite Weak Economic Conditions

Kenny Fisher Kenny Fisher 13.12.2022 13:35
The British pound remains calm this week and is trading at 1.2286, up 0.20%. It is a busy week on the economic calendar, but GBP/USD isn’t showing much interest. Today’s UK employment data was within market expectations, which resulted in a muted reaction from sleepy sterling. The unemployment rate ticked upwards to 3.7%, up from 3.6%. Wage growth climbed to 6.1%, up from 5.9% and above the consensus of 5.8%. Wages remain well below the inflation level of 11.1%, but will still be of concern to Bank of England policy makers, who will want to avoid the spectre of a wage-price spiral, which would make the battle against inflation that much more difficult. This may not be something that the BoE can control, with the threat of public workers going on strike to demand more pay. The BoE is likely to continue raising rates, despite weak economic conditions, as defeating inflation remains its first priority.  The BoE meets on Thursday and is expected to raise rates by 50 basis points, which would bring the cash rate to 3.50%. US CPI expected to dip All eyes are on the US inflation report for November, which will be released later today. The consensus stands at 7.3%, following a 7.7% gain in October. The timing of the report is interesting, as it comes just one day before the Federal Reserve meeting on Wednesday. Inflation fell in October and was softer than expected, and the US dollar took a plunge, as the markets became hopeful of a dovish pivot from the Fed. If inflation is again lower than expected, the dollar could find itself under pressure, although the markets could be more cautious with a Fed meeting just around the corner.   GBP/USD Technical 1.2240 and 1.2136 are the next support levels There is resistance at 1.2374 and 1.2478 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Worrisome Growth Signals in Eurozone PMI: Recession Risks Loom Amid Persistent Inflation Pressures

Saxo Bank Podcast: Market Speculators And Hedgers Are Revving Up For Another Blast Of Volatility

Saxo Bank Saxo Bank 13.12.2022 13:41
Summary:  Today, we highlight the absurd levels of volatility around recent US CPI releases ahead of today's US November CPI data point, noting signs that market speculators and hedgers are revving up for another blast of volatility in the wake of today's release. At the same time, we suggest that the reaction function may be difficult as the FOMC meeting follows hot on the heels of this release the following day. Elsewhere, we look at precious metals and copper levels, whether regulators will (or should) approve mergers like the Novozymes-Christian Hansen attempt, earnings to watch for the rest of the week and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-dec-13-2022-13122022
The USD/JPY Price Reversed From The Lower Limit

The Japanese Yen Stabilized Below 138 To The US Dollar

Kamila Szypuła Kamila Szypuła 13.12.2022 14:34
The dollar was stable on Tuesday ahead of the release of the US inflation data and the last Federal Reserve meeting this year, and investors waited for an updated interest rate outlook. US stocks rose on Monday as investors gained confidence in experts' forecasts of a 7.3% increase in the US consumer price index in November. If this forecast comes true, it will be the fifth consecutive decline and the lowest level in 11 months. Even if this would still leave inflation well above the Fed's 2% target, it may be enough justification to hold back the pace of monetary policy tightening EUR/USD The rate increased slightly to 1.0543 from 1.0538. The EUR/USD daily range is 1.05281 - 1.06287 Today's data from Germany on CPI met expectations, holding the level of 10%. Source: investing.com The EU ZEW economic sentiment index improved to -23.6 in December from -38.7 in November, data released on Tuesday showed, but it still points to more pessimism than optimism. Thursday's meeting of the European Central Bank remains the focus of the week, at which an interest rate hike of 50 basis points is expected. Read next: The Huge Order Boeing 787 Dreamliners By United Airlines | Former FTX CEO Sam Bankman-Fried Was Arrested| FXMAG.COM GBP/USD The pound was broadly stable on Tuesday as gains from the UK employment data were offset by caution ahead of a key US consumer inflation reading. Also, today's UK data could ignite the cable rally fuse should the US CPI data be bound. The release of employment data showed that unemployment met estimates, while wages and the employment rate improved. The number of employees on the payroll increased by 107,000. to a record level of 29.9 million. The number of job vacancies recorded a fifth straight decline, reflecting the uncertainty stemming from economic pressure on recruitment. Wage growth turned out better than expected, with both total and regular wages increasing by 6.1% y/y, which is the fastest rate in history outside of the pandemic. The forecast for core US inflation YoY is 6.1% while overall inflation YoY is expected to come in at 7.3% compared to October’s print of 7.7%. Sterling recently rose 0.2% to $1.2296 ahead of the Bank of England's (BoE) policy decision on Thursday. Last week it hit a nearly six-month high at $1.2345. The Bank of England meets Dec. 15, when a 50 basis point rate increase is expected. USD/JPY USD/JPY hit a 32-year high of 151.95 in October, the day the Bank of Japan intervened for the second time to prevent the yen from depreciating. From this peak, the price is in a downtrend channel. The general mood of the pair is bullish. The Japanese yen stabilized below 138 to the dollar. Price is now approaching the upper band of the channel but is struggling to break above the breakpoint and recent high of 137.67 and 137.86 respectively. USD/JPY Pair slipped to 137.3270 from 137.6498 In a recent announcement, Mana Nakazor, a potential candidate for Vice Governor of the Bank of Japan next year, said the central bank should change its policy statement to give itself more room to adjust interest rates. She suggested that the Bank of Japan should "admit that interest rates may go up or down depending on economic developments" and that he should signal that "massive monetary easing will be over". The Bank of Japan is expected to maintain its monetary policy stance at its next meeting on December 19-20. Source: investing.com, dailyfx.com, finance.yahoo.com
The Outlook Of EUR/USD Pair Is Downward In The Near Term

EUR/USD Pair: The Upward Trend Is Still In Place

Paolo Greco Paolo Greco 14.12.2022 08:00
Tuesday's trading of the EUR/USD currency pair was quiet for most of the day. However, everything was altered when the US inflation report for November was released. In general, we cautioned that the significance of this report now is comparable to that of the Fed meeting. A stronger movement was sparked by the most recent inflation report than by the Fed meeting. Therefore, we were not surprised by the movement of 110 points in a half-hour. Although we have been anticipating a significant downward correction for several weeks, the fact that the European currency increased once again was not even surprising. We have discussed moving north repeatedly over the past few months, but yesterday everything made perfect sense. More than expected, US inflation has slowed down significantly. The US dollar naturally declined due to the situation because the likelihood of the Fed tightening its monetary policy decreased as inflation rose. Additionally, the domestic currency benefits whenever the Central Bank's monetary policy is tightened. So, based on Tuesday's results, we can only reiterate that the upward trend is still in place. There is still no reason to open short positions since the pair has been unable to move past the moving average line. Of course, this week could see several upside-down turns. Even the ECB and Fed meetings will suffice in this case. However, the reality is that the Fed's "hard" and "hawkish" stance cannot be maintained in light of the inflation report. No one has any doubts about the rate increasing by 0.5% tonight. The question was, "What level will it eventually reach?" Additionally, the Fed has no justification for raising the rate beyond 5.5–5.25%, given that inflation is showing signs of steadily declining. And the market may have long since recovered this level of the wager. The Fed's attitude could change. As we have previously stated, inflation now significantly influences the future of the dollar. On the one hand, the fact that inflation is declining is good for the economy. As a result, the Fed will raise the rate less frequently, hold it there longer, and do less to "cool" the economy as a whole. On the other hand, the dollar benefits from tight monetary policy, and it can be said that it lost one of its trump cards yesterday. The US dollar's potential to strengthen in the near future is most intriguing. It has already fallen far enough to justify this. Still required is a correction to the downside. The European currency has already accounted for every growth factor, so growth cannot last forever, even without declines. The annual rate of US inflation dropped to 7.1%, which is 0.2% lower than the most optimistic forecast. The decline in the dollar value might not have occurred if it had reached 7.3%. But we work with what we've got. Now that statements about the need to keep calming the monetary mood have been made, it is reasonable to expect a 0.5% rate hike tonight. At the upcoming meeting, the Federal Reserve may only increase the rate by 0.25%, which for the market could be another cue to sell US currency. The ECB can save the dollar. The ECB may start to slow down the pace of tightening even before it waits for its inflation to slow down, as we have already stated that the pair must adjust occasionally. This element can support the dollar. Thus, a paradoxical situation arises. On the one hand, a new growth factor has been added to the euro. On the other hand, there is still a high likelihood that it will fall in the near future. Third, selling is not advised because there is only one technical signal. Before considering selling, we must still wait for the pair to consolidate below the moving average line. As of December 14, the euro/dollar currency pair's average volatility over the previous five trading days was 98 points, which is considered "high." So, on Wednesday, we anticipate the pair to fluctuate between 1.0529 and 1.0726 levels. The Heiken Ashi indicator's turning downward indicates a new phase of the corrective movement. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trading Advice: The EUR/USD pair is still moving upward. As a result, until the Heiken Ashi indicator turns down, it is necessary to maintain long positions with targets of 1.0726 and 1.0742. No earlier than the price fixing below the moving average line with a target of 1.0376 will sales become significant. Explanations for the illustrations: Channels for linear regression help identify the current trend. The trend is currently strong if they both move in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.       Relevance up to 01:00 2022-12-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329727
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The GBP/USD Pair Moved Perfectly Logically Yesterday

Paolo Greco Paolo Greco 14.12.2022 08:01
On Tuesday, the GBP/USD currency pair also traded very calmly up until the release of American inflation data. The euro/dollar article covered everything we wanted to say about this report. Thus, we won't say it again. The market violently responded to the American report while ignoring the British statistics from the previous two days. Additionally, there was something to focus on. As an illustration, the unemployment rate, which was released yesterday and increased slightly to 3.7%. Although wages have also increased, the actual values in these reports generally tracked predictions. That may explain why there was no response from them. A similar picture was seen on Monday when statistics on the gross domestic product and industrial production were released. The market most likely ignored these reports because they were almost exactly in line with forecasts, not because they were unimportant. What do we have for the Bank of England and Fed meetings? The upward trend continues. The pair moved perfectly logically yesterday, but there are still concerns about the validity of the last three or four weeks. Although the dollar is greatly oversold and the pound is greatly overbought, the market indicated last week that it did not want to open short positions. Additionally, since there were hardly any significant macroeconomic statistics or events, the time for correction was favorable. Both linear regression channels point upward, and the pair is still located above the moving average. The price is above all the Ichimoku indicator's lines on the 24-hour TF. Therefore, there was no justification for starting sales, and there isn't. What about the inflation rate in Britain? A UK inflation report will be released today in addition to the Fed meeting, the results of which will be announced tonight. This report is less significant than the one on American inflation, but you still need to pay attention to it. It follows roughly the same logic. The probability that the pound will decline increases as British inflation declines. However, only some things are as clear-cut when it comes to British inflation and the Bank of England. The Fed has every reason to slow down the pace of tightening monetary policy, given that the consumer price index has been falling in the United States for five consecutive months. However, in Britain, inflation has never dropped and will start to do so at the end of November. According to official predictions, this number could drop to 10.9–11%. 11.1% is the current inflation rate. As we can see, even if there is a slowdown, it will probably be very slight. One slowdown does not indicate a downward trend. Especially when we are talking about a slowdown of 0.1-0.2%, it may just be a simple accident. Therefore, BA's attitude shouldn't change. However, at this time, the BA rate has the most questions. However, the BA can reduce the rate of monetary policy tightening to 0.5% once every six weeks. However, if the Fed is acting in this manner against a backdrop of a five-month decline in inflation, then the BA is acting in this manner against a backdrop of no slowdown in price growth. As a result, predicting how the market will react to the potential slowdown in British inflation is extremely challenging. Simplest scenario: a decline in the value of the British pound and inflation of more than 0.2%. However, in reality, such a reduction might not change anything regarding the "rigidity" of BA's monetary strategy. The British regulator will need to keep raising the rate for a long time because inflation will continue to be very high. The situation is now quite straightforward. It would be best if you bought since there are no concerns or doubts raised by the upward trend, and keep in mind that the pound needs to adjust badly. But only after breaking through the moving average line will it be possible to think about starting short positions. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 124 points. This value is "high" for the dollar/pound exchange rate. As a result, on Wednesday, December 14, we anticipate movement constrained by the levels of 1.2243 and 1.2492. The Heiken Ashi indicator's downward reversal again indicates that the pair is making another attempt to correct. Nearest levels of support S1 – 1.2329 S2 – 1.2268 S3 – 1.2207 Nearest levels of resistance R1 – 1.2390 R2 – 1.2451 R3 – 1.2512 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair is still moving upward. Therefore, until the Heiken Ashi indicator turns down, you should maintain buy orders with targets of 1.2451 and 1.2492. With targets of 1.2146 and 1.2085, open sell orders should be fixed below the moving average. Explanations for the illustrations: Channels for linear regression help identify the current trend. The trend is currently strong if they both move in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.     search   g_translate    
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The NASDAQ Stock Exchange 2118 Companies Rose In Price

InstaForex Analysis InstaForex Analysis 14.12.2022 08:05
At the close of the New York Stock Exchange, the Dow Jones rose 0.30%, the S&P 500 index rose 0.73%, the NASDAQ Composite index rose 1.01%. Dow Jones Chevron Corp was the top performer among the components of the Dow Jones index today, up 3.78 points or 2.23% to close at 173.53. Salesforce Inc rose 2.51 points or 1.89% to close at 135.62. Merck & Company Inc rose 1.94 points or 1.78% to close at 110.91. The least gainers were Amgen Inc, which shed 4.52 points or 1.63% to end the session at 272.26. UnitedHealth Group Incorporated was up 1.40% or 7.64 points to close at 538.22, while McDonald's Corporation was down 0.85% or 2.34 points to close at 274. 28. S&P 500 Among the S&P 500 index components gainers in today's trading were Moderna Inc, which rose 19.63% to 197.54, Halliburton Company, which gained 7.87% to close at 37.00, and Match Group Inc, which rose 7.67% to end the session at 46.89. The least gainers were United Airlines Holdings Inc, which shed 6.94% to close at 41.17. Trimble Inc lost 6.38% to end the session at 55.03. Quotes of American Airlines Group decreased in price by 5.21% to 13.46. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were OpGen Inc, which rose 84.80% to hit 0.23, Vincerx Pharma Inc, which gained 60.93% to close at 1.08, and shares of Netcapital Inc, which rose by 58.27%, ending the session at around 2.20. Shares of Quotient Ltd became the leaders of the decline, which decreased in price by 50.01%, closing at 0.34. Shares of Argo Blockchain PLC ADR lost 37.21% and ended the session at 0.43. Quotes of Harpoon Therapeutics Inc decreased in price by 36.87% to 0.89. Numbers On the New York Stock Exchange, the number of securities that rose in price (2162) exceeded the number of those that closed in the red (934), while quotes of 113 stocks remained virtually unchanged. On the NASDAQ stock exchange, 2118 companies rose in price, 1630 fell, and 206 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 9.80% to 22.55. Gold Gold futures for February delivery added 1.65%, or 29.55, to hit $1.00 a troy ounce. In other commodities, WTI crude for January delivery rose 2.95%, or 2.16, to $75.33 a barrel. Futures for Brent crude for February delivery rose 3.33%, or 2.60, to $80.59 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.89% to hit 1.06, while USD/JPY shed 1.48% to hit 135.63. Futures on the USD index fell 1.09% to 103.62 Relevance up to 03:00 2022-12-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/304804
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD Pair Has The Potential For Bearish Reversal

InstaForex Analysis InstaForex Analysis 14.12.2022 08:09
Technical outlook: EURUSD rallied through the 1.0673 highs during the New York session on Tuesday before finding resistance. The single currency pair is seen to be trading close to 1.0630 at this point in writing as the bears remain more inclined to come back in control soon. A break below 1.0500 is now required to confirm that the bears are back in control here to stay for a while. EURUSD has hit the Fibonacci 1.271 extension (Red) as seen on the daily chart here, potentially terminating its larger-degree corrective wave. Furthermore, it is also the Fibonacci 0.382 retracement of the earlier downswing between 1.2266 and 0.9535 respectively. A high probability remains for a bearish turn from the 1.0670-1.0750 zone ahead. EURUSD has also hit its trend line resistance of 18 months as prices tested 1.0673. A bearish candlestick formation here will turn prices towards the larger-degree downtrend and drag below the 0.9535 mark in the next several weeks. Immediate price resistance is now seen at 1.0750 while support comes in around 1.0500. Trading idea: Potential bearish reversal against 1.0790 Good luck! Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/304806
Tokyo Raises Concerns Over Yen's Depreciation, Considers Intervention

USD Analysis: A Strong Bullish Reversal Should Be Seen From Current Levels

InstaForex Analysis InstaForex Analysis 14.12.2022 08:11
Technical outlook: The US dollar index dropped through the 103.15 lows during the New York session on Tuesday before finding bids again. The index is seen to be trading around 103.65 at this point in writing as the bulls prepare to push higher from here. Immediate price resistance is at 105.20 as marked on the 4H chart here and a break there confirms the bottom is in place. The US dollar index has further produced a bullish divergence on the 4H RSI as marked here. This could be seen as a potential trend reversal against the recent swing low at 103.15. We need to see a candlestick pattern formation here. The minimum requirement for a three-wave corrective decline from 114.70 has been fulfilled now. If the above scenario is correct and holds well, a strong bullish reversal should be seen from current levels towards 110.00-50 at least. Short-term price support is just below 103.15, while resistance is 105.20. A break higher will add further confidence towards the bullish setup. Prices should be looking higher from current levels. Trading idea: Potential bullish reversal against 102.00 Good luck! Relevance up to 04:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/304808
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

The AUD/USD Pair's Price Is In The Upward Position

InstaForex Analysis InstaForex Analysis 14.12.2022 08:15
The Australian dollar rose 111 pips on Tuesday. The price is falling this morning, which updated the double divergence. It has not yet reached the target level of 0.6917, and there could be two reasons why: the level was not correctly defined at the time, the price reversed from the nearest level at 0.6894, the September 2019 high. A confirmation of the reversal is when the price returns below 0.6799. In this case, the 0.6730 target and further at 0.6642 will become available. The alternative scenario assumes that the price will settle above 0.6894-0.6917 and it will continue to rise to 0.7048 - the August 1 high. On the four-hour chart, the price is in the upward position, it is above the indicator lines, the Marlin is in the growth area. The main momentum will be set by the results of today's Federal Reserve meeting. Relevance up to 04:00 2022-12-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329731
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

GBP/USD Pair: A Reversal Scenario From The Current Levels Is Also Possible

InstaForex Analysis InstaForex Analysis 14.12.2022 08:18
The British pound gained 93 points yesterday, reaching the target level of 1.2410. A triple divergence with the Marlin oscillator on the turquoise line on the daily chart has not formed. But all is not lost on the divergence. If the price reaches the target range of 1.2598-1.2666 at today's Federal Reserve meeting, the triple divergence might happen. Then the price will reverse to 1.2410 and 1.2155. The oscillator signal line may continue rising until it reaches the upper limit of the range (marked with pink lines), then the price will likely cross the 1.2598-1.26666 range, afterwards there are no obstacles to the consolidation area of April at 1.2990-1.3085. A reversal scenario from the current levels is also possible, and this is still the main option, because the double divergence remains in action, the Marlin signal line only has to go under the lower limit of the range, where it has been for 7 sessions. Target levels: 1.2155 (May low), 1.1933 (June low). On the four-hour chart, the price is above the indicator lines, the Marlin is in the positive area. But the price shows the intention to go under the MACD line (1.2285), and the Marlin under the zero line. Everything will be decided in the evening, which is when the Fed meeting will take place as well as the subsequent press-conference of Fed Chairman Jerome Powell.     search   g_translate     Relevance up to 04:00 2022-12-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329733
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The Euro (EUR) Did Not Stay In A Horizontal Range

InstaForex Analysis InstaForex Analysis 14.12.2022 08:19
The euro reached the target range of 1.0615/42. Yesterday's important U.S. inflation report contributed to this, and overall, the euro did not stay in a horizontal range. Yesterday's movement added more mystery to today's Federal Reserve meeting. On the technical side, will there be a double divergence from the current levels? In fact, all the conditions for that have been met. Second mystery, if the price reaches the next target range of 1.0758/87, will a divergence occur there? (The dotted line on the daily chart is an option). If not, the price will continue to rise to 1.1000. And another question, also among the new ones, to what extent has the market taken into account the 0.50% rate hike? Will there be a reversal of the euro precisely because of this circumstance – the revaluation of the single currency? Here we come to fundamental uncertainties: how pessimistic are investors about the outlook for the European economy? Yesterday, Italian industrial production for November showed a decline of 1.0% versus a forecast of -0.2%. The eurozone's industrial production will come out today with a forecast of -1.5% but it is likely to be worse. On Friday, the eurozone's trade balance for October will be released with a forecast of -32.5 billion euros compared to -37.7 billion in September. But we also expect a worse figure for this index, as weak trade balance data has already been released this week for the peripheral eurozone countries. And there is another reason why investors may not show a strong desire to buy - even if the rate hike is not 0.75%, but 0.50%, it will still be a 4.50% increase - can the stock market withstand that rate? The stock market withstood the November rate hike with great difficulty. And on the day of the rate hike, the S&P 500 was down 2.5%. On the four-hour chart, the price is waiting in the range of 1.0615/42. Even a divergence with the Marlin oscillator was formed. But it is weak and can hardly be an indicator before such an event like the Fed meeting. We can only wait for the development of events.   Relevance up to 04:00 2022-12-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329735
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

In Theory, The Euro Can Continue Rising Against The US Dollar

Paolo Greco Paolo Greco 14.12.2022 08:23
M5 chart of EUR/USD EUR/USD went up again on Tuesday, although it only grew because of the US inflation report. However, this report was worth a lot. Recall that inflation is the main determinant of the Federal Reserve's monetary policy now, so this report is even more important than the Fed meeting itself. That's why it's no surprise that the dollar fell 110 points in just half an hour when the market learned about a bigger than expected decline in the Consumer Price Index. And there were no other major events or announcements during the day. But there was no need for that. The euro kept the positive mood and in theory can continue rising against the dollar. I still expect a strong bearish correction, but this week (I warned you) the pair's movement could be almost anything. Tuesday's trading signals were bad. Unfortunately, we failed to catch the beginning of the upward movement, so the first signal was formed after the inflation report was released, and also when the upward movement was almost over. Therefore, the buy signal near 1.0637 should not be worked out. As well as all succeeding signals to buy near this level. There were also two sell signals, but both of them were created quite late, so there was no point in taking a risk and trying to gain some tens of points using them. The best option was not to open positions at all on Tuesday. Moreover, all the signals near 1.0637 turned out to be false. COT report COT reports on EUR/USD have puzzled traders through most of 2022. Half of the year, COT reports indicated clear-cut bullish sentiment among large market makers while the single European currency was extending its weakness. For a few months, the reports showed a bearish sentiment and the euro was also trading lower. Currently, the net position of non-commercial traders is again bullish and increasing. Although the euro is rising, a rather high value of the net position allows us to assume an early completion of the uptrend. During the reporting week, the number of long positions held by non-commercial traders increased by 3,900 and that of short positions grew by 1,300. Accordingly, the net position grew by about 2,600 contracts. The green and red lines of the first indicator moved far away from each other, which could mean the end of the uptrend (!!!) (which, in fact, never happened). The number of long positions exceeds that of short positions by 125,000. Therefore, the net position of non-commercial traders may continue to rise further but without triggering a similar rise in the euro. When it comes to the total number of longs and shorts across all categories of traders, there are now 35,000 more short positions (661,000 vs 626,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD is still near its local highs, but this week traders will have so many events and reports that they can use that it is impossible to say which way the price will move further and where the current week will end. The U.S. dollar could still show gains even if Fed Chairman Jerome Powell shows a dovish stance. On Wednesday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0579, 1.0637, 1.0765, 1.0806, and the Senkou Span B (1.0442) and Kijun Sen (1.0573). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 14, the European Union will publish the Industrial Production report and the results of the Fed meeting will be announced in the US. The results will be known late in the evening, when intraday traders should have left the market. You can stay if you put Stop Loss. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group Relevance up to 01:00 2022-12-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329723
The Pound Is Now Openly Enjoying A Favorable Moment

This Week Might Not Be So Rosy For The Pound (GBP)

Paolo Greco Paolo Greco 14.12.2022 08:28
M5 chart of GBP/USD On Tuesday, GBP/USD also showed a rapid upward movement of 160 pips in half an hour. Then, of course, the pullback started, and the pound's growth was triggered, as it is easy to guess, by the US inflation report, which fell more than forecasted. There is nothing more to analyze yesterday. Although Britain also released two reports in the morning, which the market simply ignored. The unemployment rate in Great Britain rose to 3.7%, and the average wages including bonuses rose by 6.1%. Both the first and second reports were fully in line with forecasts. Thus, the pound maintains its uptrend, positioning above the lines of the Ichimoku indicator of the 4-hour chart. If the euro's trading signals were bad, then the pound's signals were excellent. There were two buy signals near 1.2259 during the European trading session. The first one was closed by Stop Loss without losing anything, as the price quickly returned to its initial positions. In the second case, traders managed to place the Stop Loss to Breakeven, and the pair rushed up after the US inflation report. It stopped only near 1.2429, from which it made a very eloquent rebound. At this point we should have closed the long positions (140 pips profit) and opened the shorts. The sell signal also turned out to be profitable, as the price fell almost to 1.2342. The deal should have been closed manually, the profit was about 40 pips. Therefore, the day turned out to be very successful. COT report The latest COT report on the British pound showed that the bearish mood is weakening. During the reporting week, non-commercial traders opened 1,700 long positions and closed 7,800 short ones. The net position increased by almost 10,000. The net position dropped by 1,000. The figure has been on the rise for several months. Nevertheless, sentiment remains bearish, and the pound is on the rise against the greenback for no reason. We assume that the pair may well resume the downtrend soon. Notably, both GBP/USD and EUR/USD now show practically identical movement. At the same time, the net position on EUR/USD is positive and negative on GBP/USD. Non-commercial traders now hold 54,000 sell positions and 30,000 long ones. The gap between them is quite wide. As for the total number of open longs and shorts, the bulls have an advantage here by 10,000. Technical factors indicate that the pound may move in an uptrend in the long term. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD GBP/USD continues to trade higher on the one-hour chart, and it also received support from the US inflation report. However, this week might not be so rosy for the pound, as two central bank meetings might provoke totally unpredictable reactions. Remember that everything depends on what decisions central banks will take and what their heads will say at the press-conference. On Wednesday, the pair may trade at the following levels: 1.2106, 1.32185, 1.2259, 1.2342, 1.2429-1.2458, 1.2589, 1.2659. The Senkou Span B (1.2121) and Kijun Sen (1.2287) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Wednesday, the UK is set to publish its inflation report, which might be very interesting as well. In the US, the key event of the week is the outcome of the Federal Reserve meeting, the last one this year, and the press conference with Fed Chairman Jerome Powell. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 01:00 2022-12-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329725
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

AUD/JPY Pair Has The Potential To Depreciate In The Near Future

InstaForex Analysis InstaForex Analysis 14.12.2022 08:34
On the 4 hour chart, AUD/JPY cross currency pairs has : 1. The deviation between price movement with CCI Indicator. 2. The appearace of Ascending Broadening Wedge Pattern. Based on two things above, then AUD/JPY has the potential to depreciate in the near future where the level of 91.94 will be the main target to be tested if it turns out to be penetrated, it is very likely that AUD/JPY will continue its decline to the level of 91.08 but because tonight there will be the release of the predicted US Fed Fund Rates to make market movements volatile, please pay attention to the 93.30 level because if this level can be exceeded then all the downward scenarios previously described will cancel by itself.   Relevance up to 05:00 2022-12-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/115733
Bank of Japan to welcome Kazuo Ueda as its new governor

Traders Heard Hawkish Messages From The Bank Of Japan For The First Time In A Long Time

InstaForex Analysis InstaForex Analysis 14.12.2022 08:39
The dollar-yen pair fell almost 300 points yesterday, reacting to the U.S. inflation report. The data came out in the red zone, disappointing the dollar bulls. The U.S. dollar index fell to a six-month low, to the bottom of the 103rd figure. USD/JPY, in turn, updated only a weekly low, denoting itself at 134.69. After that, the downward impulse faded, and during the Asian session on Wednesday, the pair even regained some of the lost positions, returning to the area of the 135th figure. Traders do not risk developing the downward direction in anticipation of today's events: the Federal Reserve will announce the results of its meeting at the end of the trading day. Notably, the main driver of the December USD/JPY decline was not the dollar, but the yen, which strengthened due to the unexpected hawkish statements of some representatives of the Bank of Japan. In comparison, yesterday's inflation report, which is crucial for all dollar pairs, triggered a 300-point drop. While signals from Japanese regulators let the bears of USD/JPY make a 600-point advance from 139.92 (Nov 30) to a 4-month low of 133.66 (Dec 2). Recall that at the beginning of this month, traders heard hawkish messages from the Bank of Japan for the first time in a long time. BOJ board member Asahi Noguchi stated that the central bank is ready to partially revise its soft monetary policy if inflation indicators turn out to be "too high." He called this step a "preventive measure" to curb inflationary growth. A little later, the head of the Japanese regulator Haruhiko Kuroda indirectly confirmed the existence of such intentions. He said that the central bank is really considering an exit from the ultra-soft monetary policy "as soon as the central bank reaches its inflation target of two percent on a sustainable basis." At the same time, he added that if the price target is reached, the bank's management will discuss the fate of assets in ETF's "as part of a strategy to exit the ultra-soft policy." Previously, Kuroda had only allowed easing the parameters of monetary policy if such a need arises. He repeated this mantra with such persistence and for so long that traders, for the most part, were no longer reacting to these dovish messages. Moreover, there is a strong opinion in the market that major changes of a hawkish nature are a priori possible only after the current governor of the Bank of Japan leaves his post (his second term in office expires in April 2023, re-election is impossible). That is why the USD/JPY traders reacted so strongly to the latest statements by Noguchi and Kuroda. Moreover, these official statements are overgrown with relevant rumors. In particular, according to Reuters, the Bank of Japan may abandon the yield cap on 10-year Japanese government bond (JGB) next year as Japan enters an era of high inflation. According to news agency sources, the Japanese regulator "begins to worry about the possibility of inflation accelerating more than expected." However, not all of Kuroda's colleagues agree that the Bank of Japan needs to adjust its policy. For example, board member Toyoaki Nakamura recently said that the country's economy is still recovering from the recession caused by the COVID pandemic, so the central bank should patiently continue easing monetary policy. At the same time, inflation dynamics are not worrying Nakamura. According to him, consumer inflation in Japan is accelerating, "but next year its growth rate is likely to slow down, as the stimulus from rising energy and food prices is already weakening." It is also worth noting that yesterday representatives of the Japan Bankers Association reported that the country's banks could suffer losses on their government bonds in the amount of more than $1 trillion if the Bank of Japan loosens its control over the yield of 10-year bonds. Commenting on this information, Bloomberg sources in the Japanese government said that the financial regulator is now studying how vulnerable creditors will be to a sudden fall in government bonds if the central bank still abandons the ultra-soft monetary policy. In other words, the discussion about leaving the ultra-soft monetary policy is still ongoing, but even the very fact of this discussion provides background support for the yen. Of course, in the short term, the USD/JPY pair will focus only on American events, reacting to the results of the December Fed meeting. But at the same time, it is worth recognizing that the Japanese currency now has "its own" fundamental arguments that can strengthen the bearish mood for the pair (earlier, the downward impulses of USD/JPY were mainly due to the weakening of the greenback). Therefore, if the Fed does not support the dollar today, the pair's downward trend may develop in the medium term. From a technical point of view, the USD/JPY pair on the daily chart is located between the middle and lower lines of the Bollinger Bands indicator, and is under all the lines of the Ichimoku indicator, signaling the priority of short positions. The main target of the downward movement is 133.90, which corresponds to the lower line of the Bollinger Bands on the D1 timeframe.       Relevance up to 01:00 2022-12-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329747
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Kenny Fisher USD/JPY - analysis

Kenny Fisher Kenny Fisher 13.12.2022 23:56
The Japanese yen is sharply higher on Tuesday. In the North American session, USD/JPY is trading at 134.97, down 1.95%. US inflation underperforms again The US dollar is in broad retreat after US CPI was softer than expected. The November reading dropped to 7.1% y/y, down from 7.7% in October and slightly lower than the 7.3% consensus. The trend was similar for core CPI, which dipped to 6.0%, down from 6.3% and below the consensus of 6.1%. We’ve seen this story before – equities jump and the US dollar slides after a soft CPI report, as the markets speculate that the Fed could make a dovish pivot in response to falling inflation. What makes this inflation report even more interesting is that the Fed winds up its policy meeting on Wednesday. Today’s CPI data hasn’t changed the pricing of a 50-bp hike tomorrow, which has about an 80% likelihood. The markets will be listening carefully to the tone of Jerome Powell’s rate statement and follow-up remarks, hoping for clues about the next meeting in February. There is a strong chance that the Fed will hike by 25 bp and then take a pause – this would be significant because it would that the rate tightening cycle would terminate at 4.75%, below the 5.00% level or higher which many forecasts projected for the terminal rate. In all the market enthusiasm, investors would be well to remember that even with the recent fall in inflation, it remains more than three times the Fed’s target of 2%. The battle with inflation is far from over and we are yet to hear the Fed utter the magic phrase that “inflation has peaked”.  Jerome Powell and Co. may continue to drum out a hawkish message, but the critical question is whether anyone in the market is listening. . USD/JPY Technical USD/JPY broke below support at 136.20 earlier. This is followed by support at 1.3453 There is resistance at 1.3734 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY takes a tumble after soft CPI - MarketPulseMarketPulse
Driving Growth: The Resilience of Green Bonds and Shifting Trends in Sustainable Finance

Soaring Oil Prices Gave Impacted The Indian Rupee (INR)

TeleTrade Comments TeleTrade Comments 14.12.2022 09:05
USD/INR has jumped to near 82.70 as firmer oil prices have offset the impact of the subdued US Dollar. S&P500 futures have extended their gains which indicates that the traction is in favor of risk-sensitive assets. Apart from the decline in the interest rate pace, investors will also focus on Fed policy guidance for CY2023. The USD/INR pair has witnessed a decent buying interest in the opening trade, which has driven the asset towards 82.70 despite a quiet market mood. The asset has displayed a sheer rebound as oil prices have registered significant gains on expectations of a recovery in global economic prospects after a soft landing of the United States inflation in November consecutively for the second month. The US Dollar Index (DXY) is displaying topsy-turvy moves around 104.10 as investors have shifted to the sidelines ahead of the interest rate decision by the Federal Reserve (Fed). S&P500 futures have extended their gains in the Asian session, which indicates that the traction is in favor of risk-sensitive assets. The US Treasury bonds have gained immense interest from investors as the Fed is set to announce a smaller rate hike, delighted by a slowdown in the inflationary pressures. The 10-year US Treasury yields have dropped below 3.50%. The soft landing of November’s inflation report has supported Fed policymakers' view of slowing down the policy tightening pace to safeguard the economy from financial risks and to assess the impact of efforts made in cooling off ultra-hot inflation. Apart from the extent of the decline in the interest rate pace, investors will also focus on policy guidance for CY2023. On the oil front, soaring oil prices after a decline in US inflation have impacted the Indian Rupee. The Supply crisis in the US after a shutdown of a major pipeline has also strengthened oil prices. It is worth noting that India is a leading importer of oil and higher oil prices accelerate India’s fiscal deficit and eventually impact Indian Rupee.  
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

Analysis Of The New Zeland Dollar To US Dollar Pair

TeleTrade Comments TeleTrade Comments 14.12.2022 09:06
NZD/USD is looking for a cushion around 0.6430 as investors see a less-hawkish Fed monetary policy. The decline in US inflation is backed by a significant drop in gasoline prices, used cars, and airline fares. Going forward, a mixed response is expected from New Zealand GDP data. The NZD/USD pair has turned sideways around 0.6430 after a gradual correction from Tuesday’s high above 0.6500. The Kiwi asset is seeking a cushion as the overall market is still bullish. Anxiety ahead of the Federal Reserve (Fed) policy has seldom impacted the risk-sensitive currencies in the Tokyo session. The US Dollar index (DXY) is displaying a lackluster performance as investors are awaiting the Fed’s interest rate announcement for making informed decisions. The USD Index is auctioning above 104.10 amid a quiet market mood. Sheer volatility is expected in the US Dollar as the Fed is expected to adopt a less-hawkish sound while dictating the last monetary policy of CY2022. The 10-year US Treasury yields are continuously oscillating below 3.50% after a decline in the United States Consumer Price Index (CPI) consecutively for the second month. The decline in US inflation is backed by a significant drop in gasoline prices, used cars, and airline fares. Analysts at RBC Capital Markets see the Fed raising the Fed Funds rate by 50 basis points (bps) on Wednesday and they then pointed out that the more encouraging inflation signs make a pause in early 2023 more likely. On the New Zealand front, investors are awaiting the release of the Gross Domestic Product (GDP) data, which will release on Thursday. As per the consensus, the quarterly GDP data for the third quarter is seen lower at 0.9% vs. the prior release of 1.7%. While the annual GDP is expected to expand sharply by 5.5% against the former release of 0.4%. In the Half Year Economic and Fiscal Update, the New Zealand Treasury has forecasted three-quarters of a shrinking economy starting in the second quarter of 2023.  
Analysis Of The USD/CHF Pair Movements

The Swiss National Bank Will Hike Interest Rates By 50 bps To 1%

TeleTrade Comments TeleTrade Comments 14.12.2022 09:09
USD/CHF is oscillating below 0.9300 as investors await Federal Reserve’s policy release for fresh cues. Investors seek policy guidance for CY2023 from the Federal Reserve as an interest rate hike by 50 bps is highly expected. An interest rate hike by 50 bps is expected from the Swiss National Bank to keep inflation near 2%. USD/CHF  is expected to resume its downside journey as technical indicators narrate more weakness ahead. USD/CHF is displaying back-and-forth moves in a narrow range below the critical resistance of 0.9300 in the early European session. The Swiss Franc major asset is manifesting a lackluster performance as investors seek further guidance, which will be provided by the Federal Reserve (Fed) after it will announce its last monetary policy of CY2022 on Wednesday. The US Dollar Index (DXY) is showing a balanced auction profile of around 104.00 after a recovery from a fresh five-month low at 103.59. On Tuesday, the USD Index displayed a perpendicular turmoil after the release of a soft November inflation report. A meaningful decline in the United States Consumer Price Index (CPI) dampened safe-haven’s appeal. The US Treasury bonds got decent traction which has led to a fall in 10-year yields below 3.50%. Meanwhile, S&P500 futures have extended their upside momentum on Wednesday amid rising hopes of a slowdown in the pace of the interest rate hike by the Federal Reserve. Analysts at JP Morgan Chase & Co. cited that a soft reading in US CPI data could spark a powerful rally in US equities. Continuations of an upside move in the S&P500 futures are portraying a risk appetite theme in the market. While the Swiss Franc is awaiting the monetary policy by the Swiss National Bank (SNB), scheduled for Thursday, for fresh impetus. Soft US Inflation report cements Fed’s interest rate hike by 50 bps The street was expecting a decline in the US inflationary pressures as the Producers Price Index (PPI) and oil prices remained weak in November. A decline in prices of finished goods at the factory gate by manufacturers is critical for a slowdown in consumer inflation. November’s US PPI reported a drop in headline figures to 7.4% from the former release of 8.0%. The headline CPI has dropped to 7.1% while the core inflation that doesn’t include oil and gas prices tumbled to 6.0%. Weaker prices of gasoline used cars, and airline fares remained major contributors to the lower price rise index. A significant deceleration in US inflation has set the ground for less-hawkish monetary policy by the Federal Reserve. Fed policymakers were already advocating for a slowdown in policy tightening pace to reduce financial risks. And, a termination of 75 basis points (bps) rate hike spell looks solid, which will leave the option for a 50 bps rate hike announcement. The Federal Reserve might not choose a 25 bps rate hike as the inflation rate is still extremely diverged from the targeted rate of 2%. Policy guidance for CY2023 from Fed’s Powell a key trigger ahead After a second consecutive decline in the United States monthly inflation report, an interest rate hike announcement by 50 bps seems real. Therefore, investors will keep an eye on monetary policy guidance by Federal Reserve chair Jerome Powell for the entire CY2023. A note from Commerzbank dictates that “The 50 basis points (bps) hike, which is generally expected for tomorrow's FOMC meeting, can be considered almost certain after today's data.” We continue to assume that the Fed will reduce the size of the rate hikes again at the beginning of 2023, moving by only 25 bps in February and March. Swiss National Bank to replicate expected Federal Reserve’s 50 bps move ahead The fourth quarterly monetary policy meeting of the Swiss National Bank is scheduled for Thursday and Swiss National Bank Chairman Thomas J. Jordan is expected to hike its interest rate further by 50 bps. A Reuters poll on the Swiss National Bank’s interest rate expectations indicates that the central bank will hike interest rates by 50 bps to 1%. Switzerland’s inflation rate has already dropped from a peak of 3.2% to above 2%. To dodge inflation risks, the Swiss National Bank already shifted its borrowing cost from negative to positive territory for the first time after 2014. Investors also believe that the Swiss National Bank will keep in mind the widening interest rate differential from the European Central Bank (ECB) while drafting monetary policy. USD/CHF technical outlook USD/CHF has shifted into a negative trajectory after a downside break of the declining channel formed on a four-hour scale. The Swiss Franc major asset has dropped sharply after hovering around the 20-period Exponential Moving Average (EMA), which indicates that the short-term trend has turned bearish. The 200-period EMA at 0.9530 is continuously slopping downwards from the past month, which signifies a bearish long-term trend. Meanwhile, the Relative Strength Index (RSI) (14) is on the verge of slipping into the bearish range of 20.00-40.00, which will trigger a bearish momentum ahead.     search   g_translate    
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The USD/CAD Pair Has The Potential For Further Upside Movement

TeleTrade Comments TeleTrade Comments 14.12.2022 09:14
USD/CAD grinds higher after bouncing off weekly low. Bullish MACD signals, sustained trading beyond convergence of 21-day EMA, one-month-old support line favor buyers. Seven-week-old descending trend line restricts recovery moves ahead of monthly high. USD/CAD remains sidelined around mid-1.3500s, picking up bids to 1.3565 by the press time of early Wednesday morning in Europe. In doing so, the Loonie pair defends the early Asian session recovery from the 1.3530 support confluence including the 21-day EMA and a one-month-old ascending trend line. Additionally favoring the upside momentum are the bullish MACD signals. That said, a downward-sloping resistance line from October 21, close to 1.3650 at the latest, restricts the quote’s short-term upside. Following that, the monthly high of 1.3700 will be crucial resistance as it holds the gate for the USD/CAD pair’s run-up toward the previous monthly high surrounding 1.3810. It’s worth noting, however, that multiple hurdles near 1.3850 and 1.3900 could test the bulls past 1.3810. Meanwhile, a daily closing below the 1.3530 support confluence won’t hesitate to challenge the monthly low of 1.3385. Should the USD/CAD bears keep the reins past 1.3385, the 50% Fibonacci retracement level of August-October upside, near 1.3350, will precede November’s bottom surrounding 1.3230 to challenge the Loonie pair’s further downside. Also acting as a downside filter is the 61.8% Fibonacci retracement level of 1.3200. USD/CAD: Daily chart Trend: Further upside expected
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The Japanese Yen (JPY) Struggles To Gain Any Meaningful Traction

TeleTrade Comments TeleTrade Comments 14.12.2022 09:16
GBP/JPY remains under some selling pressure for the second successive day on Wednesday. Softer UK consumer inflation figures undermine the British Pound and act as a headwind. A positive risk tone dents the JPY’s relative safe-haven status and lends support to the cross. The GBP/JPY cross edges lower for the second straight day on Wednesday and retreats further from over a one-month high, around the 169.25 area touched the previous day. The cross remains depressed below the mid-167.00s through the early European session and drifts back closer to the weekly low in reaction to softer UK consumer inflation figures. The British Pound weakens a bit after the UK Office for National Statistics (ONS) reported that the headline CPI decelerated from the 2% rise reported in the previous month and rose 0.4% MoM in November. Furthermore, the yearly rate eased from 11.1% in October to 10.7% during the reported month. Meanwhile, the core inflation gauge, which excludes volatile food and energy items, come in at a 6.3% YoY rate in November as compared to 6.5% in October and anticipated. The data, however, does little to alter market expectations for a 50 bps rate hike by the Bank of England on Thursday and helps limit the downside for the GBP/JPY cross. The Japanese Yen, on the other hand, struggles to gain any meaningful traction and fails to provide any impetus to the GBP/JPY cross. A generally positive risk tone, bolstered by the optimism over the easing of COVID-19 curbs in China and firming expectations for a less aggressive policy tightening by the Fed, seems to act as a headwind for the safe-haven JPY. This, in turn, supports prospects for the emergence of some dip-buying around the cross, warranting some caution for aggressive bearish traders. Hence, it will be prudent to wait for a sustained weakness below the 167.00 mark before positioning for any further depreciating move.
USA: Final Q3 GDP amounts to 3.2%. Subtle Micron earnings

Meta Platforms (META) rose 4.74%, Amazon.com (AMZN) gained 2.14%, Alphabet (GOOGL) climbed 2.49%

Intertrader Market News Intertrader Market News 14.12.2022 10:10
DAILY MARKET NEWSLETTER December 14, 2022                 Pre-Market Session News Sentiment Technical Views           EUR/USD   Euro Stoxx 50 (Eurex)   Brent (ICE)                 Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.                     Price Movement Analyst Views Target Pivot   Dax (Eurex) 14,476.00 -11.00 (-0.08%) Read the analysis 14,530.00 14,310.00     FTSE 100 (ICE Europe) 0.00 0.00 (0.00%) Read the analysis 7,517.00 7,462.00     S&P 500 (CME) 4,068.25 +13.00 (+0.32%) Read the analysis 4,088.00 4,025.00     Nasdaq 100 (CME) 12,001.00 +42.25 (+0.35%) Read the analysis 12,100.00 11,850.00     Dow Jones (CME) 34,492.00 +104.00 (+0.30%) Read the analysis 34,750.00 34,200.00     Crude Oil (WTI) 75.21 -0.18 (-0.24%) Read the analysis 76.40 74.00     Gold 1,809.93 -0.87 (-0.05%) Read the analysis 1,824.00 1,800.00                     MARKET WRAP           Market Wrap: Stocks, Bonds, CommoditiesOn Tuesday, U.S. stocks closed higher as market sentiment was lifted by softer-than-expected inflation data. The Dow Jones Industrial Average rose 103 points (+0.30%) to 34,108, the S&P 500 increased 29 points (+0.73%) to 4,019, and the Nasdaq 100 gained 127 points (+1.09%) to 11,834.In fact, stocks pared gains ahead of the Federal Reserve's interest-rate decision on Wednesday. The S&P 500 once jumped over 2.7% within the session.U.S. data showed that consumer prices grew only 7.1% on year in November, slower than +7.6% expected and +7.7% in October. Monthly inflation rate was only 0.1% (vs +0.3% expected, +0.4% in October)..The U.S. 10-year Treasury yield sank 10.8 basis points to 3.503%.Media (+2.15%), real estate (+2.04%), and semiconductors (+1.85%) sectors led the market higher.Meta Platforms (META) rose 4.74%, Amazon.com (AMZN) gained 2.14%, Alphabet (GOOGL) climbed 2.49%, Apple (AAPL) edged up 0.68%, while Tesla (TSLA) slid 4.09%.Moderna (MRNA) surged 19.63%, and Merck & Co (MRK) rose 1.78%. A treatment developed by both company proved to reduce melanoma deaths in a mid-stage trial.United Airlines (UAL) fell 6.94% after the company announced an order of 100 Boeing 787 jets.European stocks also closed higher. The DAX 40 rose 1.34%, the CAC 40 increased 1.42%, and the FTSE 100 was up 0.76%.U.S. WTI crude futures advanced $2.10 to $75.25 a barrel.Gold price jumped $28 to $1,810 an ounce.Market Wrap: ForexThe U.S. dollar dropped sharply against other major currencies as softer-than-expected inflation data led investors to anticipate slower interest-rate hikes by the Federal Reserve. The dollar index fell to 104.04.USD/JPY sank 206 pips (-1.50%) to 135.61.EUR/USD jumped 93 pips to 1.0630. In Germany, the ZEW economic sentiment index improved to -23.3 in December (vs -27.0 expected).GBP/USD increased 94 pips to 1.2363. In the U.K., the latest jobless rate edged up to 3.7% (as expected). The number of jobless claims increased 30,500 in November (vs +3,300 expected).AUD/USD climbed 109 pips to 0.6854.USD/CHF fell 72 pips to 0.9291, and USD/CAD slid 88 pips to 1.3548.Bitcoin gained over 3% to $17,700.Morning TradingIn Asian trading hours, the Bank of Japan reported that its Tankan large manufacturers index fell to 7 (vs 6 expected) in the fourth quarter, while the Tankan large non-manufacturers index rose to 19 (vs 16 expected). Also, core machine orders grew 5.4% on month in October (vs +2.4% expected).USD/JPY remained subdued at 135.52.EUR/USD dipped to 1.0623, GBP/USD traded lower to 1.2348, and AUD/USD fell to 0.6827.Gold price was stable at $1,810 an ounce.Bitcoin advanced further to $17,820.Expected TodayIn the U.K., the inflation rate is expected to tick down to 11.0% on year and 0.7% on month in November. The retail price index is expected to increase 0.6% on year in November.The Eurozone's industrial production is expected to decline 1.2% on month in October.In the U.S., the Federal Reserve is expected to raise its key interest rates by 50 basis points to 4.25-4.50%.The U.S. Energy Department is expected to report a reduction of 3.595 million barrels in the crude-oil stockpiles.           UK MARKET NEWS           U.K. data showed that the inflation rate slowed to 10.7% on year (vs +11.0% expected) and 0.4% on month (vs +0.7% expected) in November.Auto & Parts, retail and basic resources shares fell most in London on Monday.From a relative strength vs FTSE 100 point of view, BAE Systems (-1.2% to 821p), Compass Group (-0.18% to 1899p) crossed under their 50-day moving average.           ECONOMIC CALENDAR           Time Event Forecast Importance   02:00 Core Inflation Rate MoM (Nov) 0.6% HIGH     02:00 Inflation Rate MoM (Nov) 0.7% HIGH     02:00 Inflation Rate YoY (Nov) 11% HIGH     02:00 Core Inflation Rate YoY (Nov) 6.6% MEDIUM     07:00 MBA 30-Year Mortgage Rate (Dec/09)   MEDIUM     08:30 Export Prices MoM (Nov) -0.4% MEDIUM     08:30 Import Prices MoM (Nov) -0.4% MEDIUM     10:30 EIA Gasoline Stocks Change (Dec/09) 2.714M MEDIUM     10:30 EIA Crude Oil Stocks Change (Dec/09) -3.595M MEDIUM     14:00 Fed Interest Rate Decision 4.5% HIGH     14:00 FOMC Economic Projections   HIGH     14:00 Interest Rate Projection - Longer   MEDIUM     14:00 Interest Rate Projection - 3rd Yr   MEDIUM     14:00 Interest Rate Projection - 2nd Yr   MEDIUM     14:00 Interest Rate Projection - 1st Yr   MEDIUM     14:00 Interest Rate Projection - Current   MEDIUM     14:30 Fed Press Conference   HIGH                                     NEWS SENTIMENT           Legal & General Group PLC LGEN : LSE 258.20 GBp +1.89% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   HSBC Holdings PLC HSBA : LSE 500.10 GBp +1.27% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Barclays PLC BARC : LSE 161.78 GBp +2.76% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Deutsche Lufthansa AG LHA : XETRA 7.989 EUR +4.58% In the last 5 days         NEWS SENTIMENT (24H) Very Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Deutsche Bank AG DBK : XETRA 10.248 EUR +2.83% In the last 5 days         NEWS SENTIMENT (24H) Neutral       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Rio Tinto PLC RIO : LSE 5,747.00 GBp +2.33% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                           TECHNICAL VIEWS           EUR/USD Intraday: the bias remains bullish.   Pivot: 1.0600   Our preference: Long positions above 1.0600 with targets at 1.0655 & 1.0675 in extension.   Alternative scenario: Below 1.0600 look for further downside with 1.0580 & 1.0550 as targets.   Comment: The RSI shows upside momentum.                     Euro Stoxx 50 (Eurex)‎ (Z2)‎ Intraday: choppy.   Pivot: 3941.00   Our preference: Long positions above 3941.00 with targets at 3995.00 & 4017.00 in extension.   Alternative scenario: Below 3941.00 look for further downside with 3919.00 & 3903.00 as targets.   Comment: The RSI is mixed.                     Brent (ICE)‎ (G3)‎ Intraday: bullish bias above 79.25.   Pivot: 79.25   Our preference: Long positions above 79.25 with targets at 81.30 & 82.30 in extension.   Alternative scenario: Below 79.25 look for further downside with 78.50 & 77.40 as targets.   Comment: The next resistances are at 81.30 and then at 82.30.        
The EUR/USD Pair Has A Potential For The Breakout Mode

FX: The Lagarde Effect On EUR/USD Pair Should Be Significantly Smaller And Shorter-Lasting Than The Powell Effect

ING Economics ING Economics 14.12.2022 10:47
The Fed's job today was made harder by yesterday's drop in US inflation, but we still think Chair Powell will try to deliver a credible rate protest and push back against easing financial conditions after delivering a 50bp rate hike. This could take some pressure off the dollar, but downside risks remain - admittedly - quite high Federal Reserve building in Washington, DC USD: In need of some Powell "magic" Yesterday’s US inflation reading made the Federal Reserve's job even harder as it prepares to announce another rate hike at 1900 GMT today. Core CPI dropped to 6.0% year-on-year, and headline to 7.1% in November, prompting a new round of dovish speculation on the Fed’s rate path. As discussed here by James Knightley,  we are not changing our call for a 50bp hike today, but the chances of the peak rate reaching 5.0% have admittedly shrunk. The market’s pricing for today’s announcement has also remained anchored to 50bp, and it’s fair to believe that investors’ reaction will be primarily driven by the forward-looking language of the statement and of Powell’s press conference. Our perception is that the Fed will want to deliver some sort of “rate protest”, essentially pushing back against the recent easing in financial conditions. To do that, Powell will need to downplay the recent abatement in price pressure, stick to the view that the inflation battle is still to be won and ultimately try to re-anchor peak rate expectations to the 5.00% handle. That is easier said than done. The unsuccessful reiteration of “transitory inflation” in 2021 served as a lesson to the Fed, and now warns against abandoning rate hikes too early or sticking too long to the notion that inflation isn’t yet on a reliable downward path. So, Powell will have to walk the fine line between credibility risk and the Fed’s explicit preference to overdeliver rather than underdeliver on policy tightening. While we are in the camp of higher interest rates and a stronger dollar, we have to admit the risk of wanted or unwanted dovish mis-steps is elevated. We knew December would be a challenging month for dollar bulls like ourselves, and downside risks remain significant today. Still, our base case is that the dollar can recover some of the lost ground as Powell works his magic to deliver a broadly hawkish – and above all credible – message. Francesco Pesole EUR: Powell effect larger than the Lagarde effect EUR/USD is consolidating above 1.0600 after the post-US CPI knee-jerk reaction brought it to a 1.0660 high. While positioning data suggests little room for more short-squeezing on the pair, markets appear more comfortable in laying down the basis for a more structural bullish approach. Today’s FOMC announcement will tell us whether the Fed can still offer some support to the dollar, and tomorrow’s European Central Bank announcement may give hints about balance sheet reduction. However – as discussed in our FX and rates preview – the Lagarde effect on EUR/USD should be significantly smaller and shorter-lasting than the Powell effect. A dovish Fed today could open the door for a rally to 1.0800 before Christmas, but we favour a correction to sub-1.05 levels instead, fuelled by a Fed rate protest and higher energy prices.   Francesco Pesole GBP: Inflation slowdown not that relevant now Inflation has also started to decelerate in the UK. The November reading, released this morning, showed a smaller-than-expected month-on-month CPI reading (0.4% vs expected 0.6%), which brings the YoY number to 10.7% from 11.1% in October. Core inflation slowed from 6.5% to 6.3%. The pound’s reaction to the data has been quite muted, which is not surprising given the wait-and-see approach ahead of today’s FOMC risk event and since the inflation figures do not suggest a different outcome for tomorrow’s Bank of England meeting. Consensus and markets are expecting a 50bp hike, and this is also our house call. Today, cable will be primarily moved by the FOMC reaction. We expect a correction below 1.2300, but the risks of a negative dollar reaction are – as discussed above – non-negligible: in that case, 1.2500 may be tested before the Christmas break. Francesco Pesole SEK: Inflation in Sweden going the wrong way While inflation shows signs of abating in some major economies, Sweden’s CPI report showed that – as expected – both core and headline rates kept rising in November. Core CPIF moved from 9.3% to 9.5% YoY, and CPIF, excluding energy, from 7.9% to 8.0% YoY. The krona is slightly stronger after the release, mainly because the rise in inflation was slightly smaller than consensus expectations. Still, this is enough to reinforce our view that Riksbank will have to deliver another 75bp of tightening in the first half of 2023. The next meeting is in February, and a few more data releases should offer markets and policymakers some clearer guidance. Incidentally, we’ll see a change at the helm of Riksbank, with Erik Thedéen taking over as governor from 1 January. EUR/SEK is trading in the 10.85/10.90 range at the moment, and we currently see some upside risks (to 11.00) for the pair in the short term driven by a renewed deterioration in market sentiment, especially in Europe. For 2023, we forecast a moderately bearish scenario for EUR/SEK, targeting 10.40/10.50 in the second half of next year. Francesco Pesole Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
All Eyes On Capitol Hill, Jerome Powell Will Appear Before The Senate Banking Committee

There Was A Strong Rally Ahead Of The Announcement Of The Fed's Decision On Monetary Policy

InstaForex Analysis InstaForex Analysis 14.12.2022 11:11
The latest consumer inflation data in the US indicated a noticeable decline, which caused a strong drop in dollar, an increase in demand for equities and a decline in government bond yields. The report noted that CPI in the US fell from 7.7% to 7.1% y/y in November and decreased from 0.4% to 0.1% m/m. Although this is much lower than expected, the figure really impressed investors, so there was a strong rally ahead of the announcement of the Fed's decision on monetary policy. More importantly, the central bank will also reveal its forecasts for future inflation, GDP and unemployment, which will give investors an indication of how long the rate hike cycle will last and how deep a possible recession could be. In addition, Fed Chairman Jerome Powell has a speech scheduled, in which he is likely to discuss their assessment of the economy and future plans for monetary policy. So far, markets believe that his statements will be hawkish, but some are expecting a softer one where the Fed will say that it will be ready to stop raising rates sooner rather than later. If things go that way, a rally will be seen in all markets, accompanied by a weaker dollar. Forecasts for today: EUR/USD The pair is currently consolidating below 1.0655. If the Fed says positive statements, it could hit 1.0785. USD/CAD The pair is trading above the level of 1.3520. A rise in oil prices and a decline in dollar could take it to 1.3400.   Relevance up to 07:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329751
It Was Possible That Tesla Would Move Closer To Resistance

Tesla Trades At Cheapest, Crude Oil Rallied More Than 2.50%

Swissquote Bank Swissquote Bank 14.12.2022 11:19
Yesterday’s inflation report in the US filled investors with joy and further hope that inflation in the US may have peaked this summer and we will be heading lower from here, and that the Federal Reserve (Fed) will adopt a softer monetary policy stance and hike, yes, by 50bp today, but certainly not more than another 25bp in February. Powell  But Powell could also stress the fact that inflation remains significantly high compared with the 2% policy target, and that relaxing the tightening measures prematurely is not a good idea. US Dollar In the FX, the US dollar index fell following the softer-than-expected CPI print, and hit a fresh low since summer. Markets The softer US dollar, and stronger euro sent the European indices to fresh highs since summer. The DAX flirted with the June peak, and the Eurostoxx50 traded at the highest level since FebruaryCrude oil rallied more than 2.50% yesterday, on hope that the Fed could slow down the rate hikes, and not push the US into a deep recession to fight inflation. The FTX drama In cryptocurrencies, the FTX drama continues with the arrestation of Sam Bankman-Fried in the Bahamas, news that investors withdrew $3.7 billion worth of funds from Binance since last week, and that Binance reportedly stopped the stablecoin USDC withdrawals. Bitcoin But Bitcoin couldn’t care less. The price of a coin advanced more than 3% yesterday, showing that the FTX drama has been priced in and out and further drama should not hit the coin harder. Watch the full episode to find out more! 0:00 Intro 0:27 How does the Fed will about falling US inflation? 5:24 US dollar falls, majors & global equities rally 6:45 Crude oil tests short-term resistance 7:35 Bitcoin up despite unideal sector news 8:33 Tesla trades at cheapest ever PE Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #FOMC #Fed #rate #decision #dotplot #USD #CPI #inflation #data #EUR #GBP #JPY #XAU #crudeoil #DAX #EU50 #Bitcoin #SamBankmanFried #FTX #Binance #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Analysis Of Tesla: A Temporary Corrective Rally Should Not Come As A Surprise

Saxo Bank Podcast: Look At Tesla Posting New Cycle Lows, Equity Market Upside Fading Quickly And More

Saxo Bank Saxo Bank 14.12.2022 13:06
Summary:  Today we look at yesterday's reaction to the softer than expected US November CPI data, with equity market upside fading quickly even as the reaction in US yields and the US dollar was stickier. We also discuss today's upcoming FOMC meeting, with the Fed facing a tough task if it wants to push back against easing market conditions and policy expectations today. We also look at Tesla posting new cycle lows and concerns for the stock and EV market, Apple, Inditex, crude oil, precious metals, and more. Today's pod features Peter Garnry on equities, Ole S Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: FOMC will have a hard time moving the needle today | Saxo Group (home.saxo)
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

The Australian Dollar Held Above $0.68, Today The Fed Will Make Its Last Decision Of The Year

Kamila Szypuła Kamila Szypuła 14.12.2022 14:08
Dollar bears have come out of hibernation. After gaining 16% in the first 10 months of the year, the dollar index, which measures the dollar against a basket of currencies, lost 5% in November. It has since fallen another 1%, reflecting a smaller-than-expected increase in consumer prices in November. Fed ahead In currency markets, the dollar fell again after tumbling against a range of major currencies on Tuesday. The dollar is also facing more headwinds. The Federal Reserve is expected to reduce the scale of future interest rate hikes, which would allow other central banks to close the interest rate gap that attracts investment to the United States. US interest rates, which are the lower bound on both government and corporate bond yields, range from 3.75% to 4%, which is well above rates in other major economies such as the Eurozone where the deposit rate is 1.5%, or Japan, where interest rates are actually negative. Today the Fed will make its last decision of the year. Futures pricing shows markets expect the Fed will slow the pace of hikes. The latest rate hike is expected to raise rates by 50 bp this time. Fed officials say interest rates will go up. They want investors to focus on trajectory, not pace, and are signaling that interest rates could peak above market-expected 4.8% and stay there for most of 2023. If the Fed sticks to the "higher for longer" mantra central banks in Europe, the UK and China will struggle to catch up given the volatile state of their economies. EUR/USD The EUR/USD benefited from the release of inflation data, breaking the level above 1.06. The euro rose by 0.9% yesterday, and the pan-European Stoxx 600 index saw gains of 1.29%. However, the European Central Bank is also getting ready for a 50bps rate hike tomorrow. In Europe, the ECB will announce its latest monetary policy decision tomorrow. Both the Fed and the ECB are expected to raise interest rates by 50 basis points, keeping the rate differential between them the same, but central banks may differ in their forecasts for the coming months. Differences in the forecasts of the two central banks for the coming months will determine where EUR/USD will trade in the short to medium term. Read next: "Candid Stories" - Instagram like BeReal? Supermarkets Are Doubling The Number Of Their Own Product Lines | FXMAG.COM GBP/USD Yesterday, GBP/USD opened the prospect of a move towards 1.2750 after breaking 1.2300. The pound rose by 0.82% against the dollar yesterday to reach a 6-month high. The upward price movement was due to newly released inflation data from the US. Today, decisions on monetary policy will be announced by the Fed, and on Thursday, next to the ECB, the Bank of England. The Bank of England will have to contend with the biggest drop in living standards in history as the energy crisis, fiscal austerity and lack of growth eat into British household budgets. After positive GDP data on Monday, UK Chancellor Jeremy Hunt warned that the economy could get worse before it got better. While yesterday's employment figures were largely positive, they indicated a slowdown in employment as firms prepare for a tough start to 2023. The Bank of England released its Financial Stability Report yesterday, warning that 2023 will be a tough year for British households due to a combination of falling real incomes, rising mortgage costs and higher unemployment. AUD/USD The Aussie Pair benefited from lower-than-expected US inflation. Yesterday, the pair was trading low in daily levels in the 0.6733-0.6793 range. Today, the quotes are higher above 0.68, oscillating close to the highest levels in three months The lack of events on the Australian market makes the AUD/USD pair dependent on reports and events from America. USD/JPY The Japanese yen held its recent advance to below 136 per dollar. Yesterday, the USD/JPY traded above 137. The decline will occur after the release of US inflation data. The drop took place from the level of 137.2760 to the level of 135.3800. Currently, the pair is trading at a price of 135.0040.   Source: finance.yahoo.com, investing.com, dailyfx.com
The Pound (GBP) Will Probably Continue To Move Sideways

GBP/USD Pair Still Slightly Declined While Maintaining Its Position Above The Moving Average Line

Paolo Greco Paolo Greco 15.12.2022 08:00
On Wednesday morning, the GBP/USD currency pair attempted to maintain its upward trend. However, in the afternoon, it still slightly declined while maintaining its position above the moving average line. Recall that right now, we are not considering the outcomes of the Fed meeting because they make no sense. Summarizing will be necessary once the market has fully processed the meeting's outcomes and all of Jerome Powell's Wednesday night remarks. The results of the BA meeting and Andrew Bailey's speech will be made public today. Thus, such inferences will be possible on Friday at the earliest. How often does the pair move in one direction by 100–200 points after the Central Bank meeting before returning to its initial positions the following day? How should the results be interpreted in this situation? As "dovish" or as "hawk"? Therefore, we do not want to rush to conclusions. However, drawing hasty conclusions about how the market will respond to macroeconomic statistics is unnecessary. In theory, traders should focus on just two reports to fully comprehend the current state of the foreign exchange market. Inflation in the United States and the UK declined significantly in November. British - by 0.4%, and American - by 0.6%. The market expected a gradual decrease in price growth in both the first and second cases. However, the US dollar dropped by 150 points in the first instance, and the British pound dropped by 20 points in the second. As a result, the market has once again demonstrated that, in theory, it does not care about the specifics of a given report or event. It is sticking to its plan and is intent on purchasing the pound. Although we still anticipate that the market will remain absurd for a while, we advise starting short positions once the pair has stabilized below the moving average line. What course of action will the Bank of England take? As previously stated, a summary of the outcomes of all three meetings will be possible on Friday. Today, predicting when and how traders will respond will be impossible. Traders can continue analyzing the outcomes of the Fed meeting during the European trading session. The outcomes of the ECB and BA meetings will be made public at noon. Moreover, each of these occurrences may indirectly impact one European currency. As a result, actions today may be completely illogical. What is BA capable of? The rate will increase by 0.5%, and the market is confident. This tightening won't be sufficient to combat inflation, but the Bank of England, unlike the ECB, has already increased the rate eight times and can do so again today, bringing it to 3.5%. So, if we anticipate a clear decline in the value of the euro in the case of the ECB, we make no assumptions whatsoever in the case of the BA. Such a decision is open to interpretation by the market. The degree to which the British regulator raises the rate will determine many factors. And only Andrew Bailey can respond to this query. Will he, however, want to do it? As you can see, our equation contains way too many unknowns. It's impossible to find an answer because there are so many unknowns. Therefore, until Friday, when it will be possible to draw at least some conclusions, it is still best to trade solely on "technique" or not at all. The growth of the pound/dollar pair has been excessive and at least 50% unreasonable. The pound could use this time to correct since there were essentially no significant fundamental and macroeconomic events last week. The price on the 4-hour TF could not even dip below the moving average because traders needed to lock in profits on long positions. Additionally, it is situated close to where the price is. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 121 points. This value is "high" for the dollar/pound exchange rate. As a result, on Thursday, December 15, we anticipate movement constrained by the levels of 1.2317 and 1.2557. The Heiken Ashi indicator's downward reversal again indicates that the pair is making another attempt to correct. Nearest levels of support S1 – 1.2390 S2 – 1.2329 S3 – 1.2268 Nearest levels of resistance R1 – 1.2451 R2 – 1.2512 R3 – 1.2573 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair is still moving upward. Therefore, until the Heiken Ashi indicator turns down, you should maintain buy orders with targets of 1.2512 and 1.2557. When a price is anchored below the moving average, sell orders should be placed with targets of 1.2207 and 1.2146. Explanations for the illustrations: Determine the present trend with the aid of linear regression channels. The trend is currently strong if they both move in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones Relevance up to 01:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329852
The Japan Central Bank’s Decision Sent The Yen (JPY) Sliding

The US Dollar To Japanese Yen Pair's Price Could Rise A Bit

InstaForex Analysis InstaForex Analysis 15.12.2022 08:00
After the USD/JPY pair fell to support 135.34 on Tuesday, the price continues to stay at this price channel line until this morning. The Marlin oscillator is rising, the price has an opportunity to rise to 137.12. Crossing this level will make the 138.78 target available. Settling below 135.34 will open the 133.26 target. Taking into account the sharp price decline on Tuesday (-211 points), which is not typical of the growing correction (which started on December 5), the main scenario is the pair falling to the nearest support at 133.26. On the four-hour chart, the price is above 135.34, the Marlin oscillator is rising in the area of the downtrend. The price could rise a bit, to the resistance of the MACD line (136.30), from which a reversal with the 133.26 target is likely. Relevance up to 04:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329854
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

On 4H Chart The Price Of GBP/USD Pair Falls Under The Pressure

InstaForex Analysis InstaForex Analysis 15.12.2022 08:12
The British pound gained 59 pips yesterday. It reached the resistance at 1.2410. On the daily chart, the Marlin oscillator is not rising, increasing the probability of its decline from its own range (pink lines) down. Take note that the longer the signal line of the oscillator stays in the range, the more likely there is a triple divergence on the turquoise line. Today the Bank of England is seen to raise the rate by 0.50% from 3.00% to 3.50%, which will actually be the start of the slowdown of the tightening period. As usual, the distribution of votes on the size of the rate hike will be important. On the four-hour chart, the price falls under the pressure of the resulting divergence. At the moment, the price is below 1.2410. To ensure the intention to show any significant decline, the price should cross the support of the MACD line (1.2302), then the first target of 1.2155 will become available. Then the price could fall to 1.1933 Relevance up to 04:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329856
The Euro May Gradually Climb To The Target Level

The Technical Picture Of The EUR/USD Pair Has Changed

InstaForex Analysis InstaForex Analysis 15.12.2022 08:15
The euro bulls' optimism about yesterday's Federal Reserve meeting turned out to be in vain. The U.S. central bank raised the rate by the expected 0.50%, but retained the sentiment for a longer period of the tightening cycle, raising the average expectation for the final rate of the FOMC committee members from the previous 4.6% to 5.1%. Apparently this is what Fed Chairman Jerome Powell had in mind when he warned the market about a likely longer period of tightening than expected. As we expected in yesterday's review, the stock market did not survive the 0.50% rate hike and was down 0.61% (S&P 500). Yesterday's events marked the beginning of a mid-term stock market decline. Also as we expected, eurozone industrial production in October came in worse than expected: -2.0% versus expectations of -1.5% and versus a downward revision from 0.9% to 0.8% for September. The European Central Bank will announce its decision on monetary policy today. This is probably the only reason why investors did not sell off the euro, expecting support from the ECB. The European economy needs support. Germany has planned to raise its debt issuance by 540 billion euros to fight the energy crisis (in the pandemic year of 2021, Germany borrowed about 490 billion). As a consequence, the ECB will be pessimistic. The technical picture has changed. On the daily chart, the divergence acquires a more classic appearance, though for a traditional appearance it needs to form closer to the dashed pink line, which will be another growth wave to the target range of 1.0758/87. But the price can also go down now, settling under the 1.0615/42 range, and then yesterday's exit above it will turn out to be false. On the four-hour chart, the divergence, which was extremely weak yesterday because of the Fed meeting, remained and became stronger. Now it is in force, pushing the price down. The reversal option from the current levels becomes the main scenario. If the ECB and the market "correctly understand" the mutual goals and objectives, then after settling under 1.0615 we expect the price to fall to 1.0470 Relevance up to 04:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329858
The EUR/USD Price May Fall Under 1.0660

The EUR/USD Pair Moved Very Calmly Yesterday

Paolo Greco Paolo Greco 15.12.2022 08:18
For most of the day on Wednesday, the EUR/USD currency pair maintained a calm pace of movement. In general, there have been a few significant movements this week. The market experienced a spike in emotions following the release of the US inflation report, which was highly anticipated, and following the release of the minutes from the Fed meeting last night. Tradition dictates that we wait to discuss the Fed meeting's outcomes. At the very least, this is true: only a few hours have passed since they made their announcement, and even this evening, as they have done numerous times, the pair can alter their course drastically. We also want to remind you that the market's response to such a significant event can last up to 24 hours. The European markets can begin analyzing the meeting's outcomes this morning since they didn't have time to do so last night. One significant event will coincide with another today during lunch when the ECB publishes the meeting's outcomes. Furthermore, determining what traders respond to will take a lot of work. We prefer to hold off on concluding until all relevant events have passed. We still anticipate a significant downward correction, but it has yet to occur. It is noteworthy that the euro did not fall even during those times when there were no supportive factors. There are no longer any corrections of 100-200 points, whereas there were a few months ago. Although it is impossible to predict when strong sales will start, the market is ready for them. As a result, we continue to advise clients to prepare for a significant move south while also opening short positions only in response to the proper sell signals. The US dollar can benefit from the ECB. It will be very difficult to predict what could cause the European currency to fall today if the European Central Bank does not initiate it. The market may sell the pair on a day with no macroeconomic or fundamental background. However, it would be pointless to foresee such a turn of events. Today, the ECB plans to increase the key rate by 0.5%. In the context of the struggle against inflation, a slowdown in the pace of monetary policy tightening is ineffective. As we previously stated, some EU nations might not be able to bear the high cost of borrowing, so the ECB will need to give them financial assistance later. And this is a new QE program or something similar. As a result, the European regulator must strike a balance between two competing fires: high inflation and the potential to plunge the economies of some nations into a serious crisis. Because of this, the euro has already appreciated too much about the dollar and will continue to do so without any justification. Only after one decline in inflation could the ECB decide to slow the pace of tightening. For instance, the Fed made this choice in response to five reports on inflation that revealed a slowdown in the price growth rate in the United States. Given that the Fed rate is already twice as high as the ECB rate and that this gap will continue to grow slowly or not at all in the future, the European currency should lose market support. The ECB may increase its rate several times if the Fed refuses to raise it any further at some point, but this is unlikely to occur before three months. The likelihood of the pair continuing to grow for an additional three months is low. It is preferable to use this time for correction before moving on to growth. Thus, the European currency is still trading at a very high level, and there is currently no selling signal, even after excluding the movements from yesterday evening (which can be easily leveled today). Every trend indicator points upward. As of December 15, the euro/dollar currency pair's average volatility over the previous five trading days was 92 points, which is considered "high." So, on Thursday, we anticipate the pair to fluctuate between 1.0593 and 1.0777 levels. A round of corrective movement begins when the Heiken Ashi indicator reverses its direction downward. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trading Suggestions: The EUR/USD pair is still moving upward. As a result, until the Heiken Ashi indicator turns down, it is necessary to maintain long positions with targets of 1.0742 and 1.0777. Sales will become significant if the price is fixed below the moving average line with a target of 1.0498. Explanations for the illustrations: Determine the present trend with the aid of linear regression channels. The trend is currently strong if they both move in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones Relevance up to 01:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329850
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Analysis Of The USD/CAD Pair's Situation

TeleTrade Comments TeleTrade Comments 15.12.2022 08:58
USD/CAD picks up bids to print the first daily gains in four, bounces off weekly low. Sluggish markets, rebound in US Treasury yields allow US Dollar to pare recent losses. WTI crude oil eases from one-week high as downbeat China data, higher interest rates probe oil bulls. USD/CAD extends recovery from weekly low to refresh intraday high near 1.3570 during the first positive day in four amid early Thursday. In doing so, the Loonie pair takes clues from the latest rebound in the US Dollar, as well as a pullback in Canada’s main export item, WTI crude oil. US Dollar Index (DXY) consolidates recent losses around 103.80 while bouncing off one-month-old support, as well as the six-month low, as traders turn cautious ahead of multiple central bank announcements. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM On the other hand, WTI crude oil snaps a four-day uptrend as it retreats from the weekly top to $76.70 amid fears of lesser demand due to downbeat China data and higher interest rates at the major central banks. Recently, China’s Retail Sales slumped to -5.9% in November versus -3.6% expected and -0.5% prior while Industrial Production came in at 2.2% compared to 3.3% market forecasts and 5.0% previous readings. Previously, OPEC and the International Energy Agency (IEA) forecasted a rebound in oil demand and joined the softer US Dollar to favor the energy bulls. The market’s reassessment of the Fed verdict, suggesting a 50 bps rate hike and readiness to hold the rate higher for a longer period, could be cited as a reason for the US Dollar’s latest recovery, as well as the USD/CAD pair’s upside. Against this backdrop, S&P 500 Futures remain mildly offered but the US 10-year Treasury bond yields probe a two-day downtrend near 3.50%. Further, the US two-year bond yields also extend recovery from the monthly low while printing the first daily positive in three near 4.25%. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM Moving on, the second-tier data from Canada, mainly relating to housing and employment insurance, may entertain USD/CAD pair traders. However, major attention will be given to the monetary policy announcements from the Swiss National Bank (SNB), European Central Bank (ECB) and the Bank of England (BOE). Technical analysis Wednesday’s Doji candlestick above the 21-day Exponential Moving Average (EMA), at 1.3535 by the press time, keeps USD/CAD buyers hopeful of reaching the monthly high near 1.3700.
Chinese Industrial Production And Retail Sales Have Dropped

Chinese Industrial Production And Retail Sales Have Dropped

TeleTrade Comments TeleTrade Comments 15.12.2022 09:05
USD/CNH is inch far from surpassing the immediate resistance of 0.6950 as the Chinese Retail Sales contracted further. Chinese annual Retail Sales data (Nov) has contracted by 5.9% vs. -3.6% as expected. Fed chair Jerome Powell sees interest rate peak at 5.1% after pushing interest rates at 4.25-4.50%. The USD/CNH pair has faced intermittent resistance around 6.9650 in the Tokyo session. The asset is expected to surpass the above-mentioned resistance as the National Bureau of Statistics of China has reported weaker Retail Sales data. The annual Retail Sales data (Nov) has reported a contraction of 5.9% while the street was expecting a contraction of 3.6%. As retail demand has weakened further, it is going to impact negatively the Chinese Consumer Price Index (CPI) ahead. A severe contraction in retail demand is going to compel the People’s Bank of China (PBoC) to look for policy easing to support economic prospects and push inflation higher. Apart from the Retail Sales data, annual Chinese Industrial Production has dropped to 2.2% vs. the consensus of 3.6% and the prior release of 5.0%. This seems to be the consequence of prolonged Covid-19 lockdown restrictions by the administration to contain the spread. As the Chinese government has rolled back various curbs after the protest from the general public, economic prospects will get track of progress. Meanwhile, the US Dollar Index (DXY) has displayed a sheer recovery in the Asian session after printing a fresh six-month low at 103.49 on Wednesday. The USD Index has advanced above 103.80 on higher interest rate peak guidance by the Federal Reserve (Fed). Despite a significant United States CPI softening, the road to a 2% inflation target is far from over. Fed chair Jerome Powell sees interest rate peak at 5.1% after pushing interest rates at 4.00-4.25% on Wednesday and has cited Average Hourly Earnings as the next threat to the harmony in the United States economy.
The USD/IDR Pair Is Expected A Further Downside Movement

The Indonesian Parliament Passed A Law Increasing The Responsibilities Of The Bank Of Indonesia

TeleTrade Comments TeleTrade Comments 15.12.2022 09:12
USD/IDR picks up bids on mixed prints of Indonesia trade data for November. Indonesia Trade Balance rose more-than-expected to $5.16 billion but Imports and Exports dropped. Indonesian Parliament’s move for Bank Indonesia also teases pair buyers. US Dollar reverses post-Fed losses amid cautious mood ahead of the key central bank announcements. USD/IDR remains firmer around the intraday high of $15,640, close to $15,620 by the press time, as mixed Indonesia trade figures join fears of more burden for the Bank Indonesia (BI) during early Thursday. Also favoring the Indonesia Rupiah (IDR) bears is the US Dollar’s rebound from a six-month low as market sentiment dwindles ahead of the key central bank meetings and the US Retail Sales data. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM Indonesia's Trade Balance came in at $5.16 billion compared to the $4.25 billion expected and $5.67 billion prior while Imports slumped to -1.89% versus 7.0% market consensus and 17.44% previous readings. Further, Exports eased to 5.58% during the stated month versus 9.50% market forecasts and 12.3% previous readouts. Earlier in the day, the Indonesian Parliament passed a law to increase the BI’s responsibilities. The new move will hold BI responsible for supporting economic growth and also formalizing the debt monetization operations for the country. “Called the ‘Development and Strengthening of Financial Sector’ bill, the new set of rules are also seen opening the door for ex-politicians to head Bank Indonesia (BI), raising concerns about its independence.” On the other hand, the US Dollar Index (DXY) consolidates recent losses around 103.80 while bouncing off one-month-old support, as well as the six-month low, as traders turn cautious ahead of multiple central bank announcements. The US Dollar’s rebound could also be linked to the reassessment of the Fed verdict, suggesting a 50 bps rate hike and readiness to hold the rate higher for a longer period. Amid these plays, S&P 500 Futures remain mildly offered but the US 10-year Treasury bond yields probe a two-day downtrend near 3.50%. Further, the US two-year bond yields also extend recovery from the monthly low while printing the first daily positive in three near 4.25%. It should be noted that Indonesia’s benchmark equity index, IDX Composite, prints mild losses of around 6,765 by the press time. Looking forward, monetary policy announcements from the Swiss National Bank (SNB), European Central Bank (ECB) and the Bank of England (BOE) could trigger the market’s volatility and propel US Dollar. Also important to watch will be the US Retail Sales for November, expected -0.1% MoM versus 1.3% prior. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM Technical analysis Unless providing a daily close beyond the six-week-old descending resistance line, near $15,715 by the press time, the USD/IDR remains on the bear’s radar.
Rates Spark: Action at Both Ends of the Curve - US 10yr Treasury Yield and European Rates

The US Dollar (USD) Weakness Probed The USD/INR Pair Buyers

TeleTrade Comments TeleTrade Comments 15.12.2022 09:20
USD/INR grinds higher around intraday top, extends India Inflation-led rebound. US Dollar benefits from market’s cautious mood ahead of key central bank announcements. Fed announced 50 bps rate hike, as expected, but showed readiness to keep higher rates for longer. Key central bank announcements, US Retail Sales eyed for fresh impulse. USD/INR makes rounds to an intraday high near 82.65 during early Thursday, extending the previous day’s recovery moves amid mixed sentiment. That said, the Indian Rupee (INR) dropped the previous day amid downbeat Indian inflation but the US Dollar weakness probed the USD/INR buyers. However, the recently cautious mood in the market, especially as a slew of central bank announcements are in line, seems to underpin the USD rebound and favor the pair to remain firmer. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM India’s WPI Inflation eased to 5.85% in November versus 7.0% expected and 8.3% prior. The same turns down the odds of the Reserve Bank of India’s (RBI) further rate hikes and weighs on the INR. On the same line could be the downbeat concerns surrounding the Indian Current Account Deficit (CAD). “India's current account deficit likely rose to its highest in nearly a decade in the July-September quarter as elevated commodity prices and a weak rupee stretched the trade gap even further, a Reuters poll of economists found,” said Reuters. It’s worth noting that the US Dollar Index (DXY) consolidates recent losses around 103.90, up 0.30% intraday while bouncing off the six-month low amid cautious markets. The US Dollar’s rebound could also be linked to the reassessment of the Fed verdict, suggesting a 50 bps rate hike and readiness to hold the rate higher for a longer period. To portray the mood, S&P 500 Futures remain mildly offered but the US 10-year Treasury bond yields probe a two-day downtrend near 3.50%. Further, the US two-year US bond yields also extend recovery from the monthly low while printing the first daily positive in three near 4.25%. It should be noted that India’s benchmark equity index, BSE Sensex, prints mild losses of around 62,390 by the press time. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM Looking forward, USD/INR traders should pay attention to the multiple central bank announcements, including the Swiss National Bank (SNB), European Central Bank (ECB) and the Bank of England (BOE), as the same could trigger market volatility and propel the US Dollar. Additionally, the US Retail Sales for November, expected -0.1% MoM versus 1.3% prior, may also direct short-term pair moves. Technical analysis A daily closing beyond 82.90 appears necessary for the USD/INR bull’s conviction.
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The AUD/USD Pair Expects A Limited Decline

TeleTrade Comments TeleTrade Comments 15.12.2022 09:21
AUD/USD takes offers to refresh intraday low, reverses from 6.5-month-old resistance line. Sluggish oscillators add strength to the pullback moves targeting November’s peak. Three-week-old ascending trend line, 100-DMA challenge bears before giving them control. AUD/USD stands on slippery grounds as it drops to 0.6825 while refreshing daily low during early Thursday morning in Europe. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM In doing so, the Aussie pair reverses from the downward-sloping resistance line from early June. Given the sluggish prints of the RSI and MACD, the latest pullback from an important hurdle is likely to extend. However, multiple tops marked since mid-November, near the 0.6800 round figure, could challenge the AUD/USD bears. Following that, a south-run towards a three-week-long support line, close to 0.6710 at the latest, can’t be ruled out. In a case where the AUD/USD pair remains bearish past 0.6710, the July low near 0.6680 and the 100-DMA level surrounding 0.6675 by the press time, could challenge the quote’s further downside. On the flip side, recovery moves need to provide a daily closing beyond the 6.5-month-old resistance line, currently near 0.6880, to recall the AUD/USD bulls. Even so, the monthly high near 0.6900 and the 50% Fibonacci retracement level of the pair’s April-October downside, near 0.6915, could challenge the upside momentum before highlighting the 0.7000 psychological magnet for the buyers. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM   AUD/USD: Daily chart Trend: Limited downside expected
Analysis Of The EUR/JPY Pair Movement

The US Dollar To Japanese Yen (USD/JPY) Pair May Witness Further Advances

TeleTrade Comments TeleTrade Comments 15.12.2022 09:27
USD/JPY picks up bids to snap two-day downtrend. Multiple levels marked since December 01 restrict immediate upside. Receding bearish bias of MACD signals further recovery. 100-SMA acts as the last defense USD/JPY bears. USD/JPY clings to mild gains during the first daily positive in three around 135.80 heading into Thursday’s European session. In doing so, the yen pair portrays recovery from a two-week-old ascending trend line while poking a resistance area comprising multiple levels marked since early December. Given the recently easing bearish bias of the MACD, coupled with the quote’s rebound from the short-term key support line, the USD/JPY may witness further advances. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM However, a clear upside break of the 135.80-136.00 area becomes necessary to convince the pair buyers. Even so, the 100-SMA level near 137.15 could challenge the Yen pair recovery. In a case where the USD/JPY bulls manage to keep the reins past 137.15, a run-up towards the late November swing high near 139.90 and then to the 140.00 round figure can’t be ruled out. On the contrary, pullback moves need to break the aforementioned support line, near 134.60 at the latest, to recall the USD/JPY bears. Following that, a fall toward the monthly low near 133.60 appears imminent. Should the USD/JPY pair remains bearish past 133.60, the south-run could aim for the August month’s low near 130.40. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM   USD/JPY: Four-hour chart Trend: Limited upside expected
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

A Positive Risk Tone Helps Limit The Downside For The NZD/USD Pair

TeleTrade Comments TeleTrade Comments 15.12.2022 09:33
NZD/USD seesaws between tepid gains/minor losses through the early European session. A hawkish assessment of the Fed’s decision revives the USD demand and caps the upside. The disappointing Chinese macro data further contribute to the modest intraday pullback. Depressed US bond yields keep a lid on the USD recovery and should help limit the slide. The NZD/USD pair struggles to capitalize on its modest intraday uptick and attracts some sellers near the 0.6465 region on Thursday. The pair retreats to the lower end of its daily range during the early European session and is currently trading around the 0.6435-0.6430 area. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM The US Dollar stages a modest recovery from its lowest level since mid-June amid a hawkish assessment of the Federal Reserve's policy decision on Wednesday and acts as a headwind for the NZD/USD pair. The US central bank delivered a widely anticipated 50 bps rate hike on Wednesday and signalled that it will continue to raise rates to crush inflation. The so-called dot plot projected at least an additional 75 bps increases in borrowing costs by the end of 2023 and the terminal rate rising to 5.1%, up from the 4.6% forecasted in September. Adding to this, the US central bank expects that it will take longer to get to the 2% inflation goal. Furthermore, Fed Chair Jerome Powell, during the post-meeting press conference, said that more data was needed before the central bank would meaningfully change its view of inflation. This, in turn, offers some support to the buck, which, along with disappointing Chinese macro data, prompts selling around the resources-linked Kiwi. The NZD/USD pair, however, remains well within the overnight range, warranting caution for bearish traders. Investors seem convinced that the Federal Reserve will soon have to pivot from an ultra-hawkish stance to something more neutral. This, in turn, is keeping the US Treasury bond yields depressed and holding back the USD bulls from placing aggressive bets. Apart from this, a positive risk tone helps limit the downside for the NZD/USD pair, at least for now. Traders now look to the US macro data - Retail Sales, the Philly Fed Manufacturing Index and Weekly Initial Jobless Claims - for some impetus later during the early North American session. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM
RBI's Strategic INR Support: Factors Behind India's Stable Currency Amidst Global Challenges

Markets Stay Relatively Quiet Early Thursday

TeleTrade Comments TeleTrade Comments 15.12.2022 09:44
Following the highly volatile action witnessed during the American trading hours on Wednesday, markets stay relatively quiet early Thursday with investors gearing up for the Bank of England and the European Central Bank policy announcements. The Swiss National Bank will also unveil its interest rate decision and the US economic docket will feature Retail Sales and Industrial Production data for November alongside the weekly Initial Jobless Claims and the NY Fed's Empire State Manufacturing Survey. As expected, the Federal Reserve hiked its policy rate by 50 basis points to the range of 4.25-4.5% following its December policy meeting. The revised Summary of Economic Projections (SEP) showed that the median terminal rate projection rose to 5.1% from 4.6% in September's SEP. Although the initial market reaction to the hawkish dot plot provided a boost to the US Dollar, the currency lost its strength during FOMC Chairman Jerome Powell's press conference. Powell said no one knew if the US economy would tilt into a recession next year or not and added that they could revise the peak rate projection lower if they continued to see soft inflation data. The US Dollar Index (DXY) fell to its weakest level in six months at 103.44 late Wednesday and the 10-year US Treasury bond yield retreated below 3.5%. The risk-averse market environment helps the US Dollar stay resilient against its rivals in the European session on Thursday with the DXY clinging to modest recovery gains slightly below 104.00. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM Earlier in the day, the data from China showed that Retail Sales contracted at an annual rate of 5.9% in November, missing the market expectation for a decrease of 3.6%. Additionally, Industrial Production expanded by 2.2% in the same period, compared to analysts' estimate of +3.6%: Australian Bureau of Statistics announced on Thursday that the Unemployment Rate stayed unchanged at 3.4% in November with the Employment Changed coming in at +64K. Nevertheless, AUD/USD struggled to capitalize on the upbeat data and declined toward 0.6800, pressured by the risk-averse market environment and dismal macroeconomic figures from China. Similarly, NZD/USD stays on the back foot and trades in negative territory below 0.6450. The data from New Zealand revealed that the Gross Domestic Product expanded at an annual rate of 6.4% in the third quarter, beating analysts' projections of 5.5%. EUR/USD came within a touching distance of 1.0700 late Wednesday before retreating toward 1.0650 on Thursday. The ECB is widely expected to raise its policy rate by 50 bps. Hence, investors will pay close attention to revised quarterly projections and President Christine Lagarde's comments on QT and the policy outlook.  ECB Preview: Five reasons to expect Lagarde to lift the Euro with a hawkish hike. GBP/USD touched its highest level since early June near 1.2450 on Wednesday but lost its traction. As market participants gear up for the BOE rate announcements, the pair trades in negative territory slightly below 1.2400. BoE Interest Rate Decision Preview: Focus on vote split amid high inflation and economic gloom. USD/JPY struggled to make a decisive move in either direction on Wednesday and closed the day flat. The pair clings to modest daily gains above 135.70 in the European morning. USD/CHF slumped to its lowest level since late March at 0.9216 late Wednesday but managed to stage a rebound. The pair holds above 0.9250 so far on Thursday. The SNB is expected to raise the policy rate by 50 bps to 1% but some experts think that the bank could opt for a 75 bps hike instead. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM Bitcoin rose to its highest level in over a month near $18,400 on Wednesday but erased its daily gains before closing flat below $18,000. BTC/USD edges lower early Thursday and trades near $17,700. Ethereum lost nearly 1% on Wednesday and is already down more than 1% on Thursday, trading slightly below $1,300.
The USD/JPY Price Reversed From The Lower Limit

The USD/JPY Pair Has The Potential For The Downside Movement

Peter Jacimovic Peter Jacimovic 15.12.2022 10:04
Technical analysis: USD/JPY has been trading upside over the Asia session but I see strong resistance at 135.60 and potential for the downside movement. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM Trading recommendation: Due to the strong downside in the background and key resistance, I see potential for the the downside movement towards lower references. Watch for the potential selling opportunities with the downside objective at 134.65. Stochastic oscillator is showing overbought condition and potential for the downside movement..... Key resistance is set at the price of 136.00 Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM   Relevance up to 09:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305055
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

The Fed Has Slowed The Rate Of Rate Hikes, But Don't Expect The Fed To Change Its Policy Immediately

InstaForex Analysis InstaForex Analysis 15.12.2022 11:04
The euro and the British pound declined after yesterday's statements by Fed Chairman Jerome Powell that the central bank had yet to complete its anti-inflationary campaign to raise interest rates. Borrowing costs are now expected to be slightly higher than economists predict next year. "We still have some ways to go," Powell said at a news conference on Wednesday in Washington after the Federal Open Market Committee raised the key interest rate by 50 basis points from the range of 4.25%-4.5%. According to new projections from policymakers, rates will hit their highs at 5.1% next year and then fall to 4.1% in 2024, a higher level than previously thought. Powell claims that the size of the rate hike at the next meeting in February 2023 will depend on incoming data - leaving the door open for another move of half a percentage point or a step down to a quarter point. More importantly, Powell spoke out against the Fed changing its policy next year - bearing in mind the fact that rates could be lowered in the second half of 2023. "It will become appropriate to slow the pace of increases as we approach the level of interest rates that will be sufficiently restrictive to bring inflation down to our 2% goal," Powell said during the press conference. Against this backdrop, demand for risky assets waned and stock indices sagged as investors speculated that the Fed would halt rate hikes after the latest inflation data, which continued to decline for the third month in a row. Traders were also betting that borrowing costs would reach around 4.8% in May, followed by a 50 basis point cut in the second half of 2023. A couple of weeks ago, Powell signaled plans to moderate the pace of rate hikes and delivered on that promise, but one would not expect the Fed to immediately reverse its policy after several declines in the annual rate of inflation. The central bank cut the pace of rate hikes after four consecutive hikes by 75 basis points, the sharpest increase since Paul Volcker led the central bank in the 1980s. It will take time for the regulator to achieve its goals and it does not intend to retreat from them. Given that the economy has so far coped very well even with such a high cost of borrowing, we do not have to worry about a recession. With the inflation rate going down like that, we can probably avoid a serious problem. Yesterday, Powell made it clear that higher rates would affect the economy. The Fed's growth projections for 2023 were revised up by 0.5%. The 2022 GDP estimate was also raised slightly to 0.5%. As for the unemployment rate, the central bank raised its forecast to 4.6% next year from 3.7% in November. EUR/USD As the EUR/USD pair, demand for the euro has weakened and now everything will depend on the US retail sales data and the EuropeanCentral Bank's decision on monetary policy. To continue rising, the euro needs to break above 1.0670, which will spur the trading instrument to break through the new December high at 1.0720. Above this level, it would be easy to climb to 1.0740. In case of a decline in the trading instrument, only a drop below the support of 1.0625 may increase the pressure on the pair and push it to 1.0580, opening the way to the low of 1.0540. GBP/USD As for the GBP/USD pair, it is moving within the sideways channel. After yesterday's upward spurt, bulls reduced their appetite because of the statements of Jerome Powell and now everything depends on the Bank of England and its decisions. Now bulls need to break through 1.2395 to continue the uptrend. Settling above this level, the price may return to the area of 1.2440. After that, the British pound may soar to the area of 1.2490. The pressure on the trading instrument may return if bears take control over 1.2340. This is likely to push the pound/dollar pair back to 1.2290 and 1.2240 Relevance up to 08:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329911
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

Saxo Bank Podcast: Market Reaction To Fed Decisions And Today's Heavy Central Bank Calendar And More

Saxo Bank Saxo Bank 15.12.2022 11:13
Summary:  Today we look at the FOMC waxing about as hawkish as one could expect with higher inflation and rate projections for next year, especially relative to market expectations. And yet, despite some churning, US yields and the US dollar reacted very modestly to the meeting. Still, this morning has seen some sudden USD strength and weak risk sentiment - could this be due to forward liquidity concerns rather than anything the Fed delivered yesterday? Thoughts on precious metals, crude oil, today's heavy central bank calendar and more also today's pod, which features Ole Hansen on commodities and John J. Hardy hosting and on FX. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.  Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: Market shrugs off FOMC. Another agenda now? | Saxo Group (home.saxo)
The Price Of Gold Depends On The US Dollar, Better Than Expected Pending Home Sales Data From The US May Raise The US Dollar And Affect The Gold

The Decline Of Gold Quotes Looks Quite Logical In Response To The Hawkish Fed

InstaForex Analysis InstaForex Analysis 15.12.2022 11:18
You can disbelieve the Fed as much as you like, but going against it is like death. Gold perfectly understands this, reacting sensitively to monetary policy. And if the lion's share of FOMC officials predicts that the federal funds rate will rise by 75 bps in 2023, to 5.25%, and not by 50 bps, as the futures market expected before, then it would be nice for the bulls on XAUUSD to fix part of the profit on longs. Inflation is still very high by historical standards, the Fed's work is not yet done, and all this means that a stable upward trend in precious metals should not be expected. There will be serious pullbacks. Fed forecasts for the federal funds rate In fact, FOMC members are human beings first and foremost, and human beings make mistakes. At the end of 2021, the Committee predicted an increase in the cost of borrowing by 75 bps, to 1%, but in fact the rate rose to 4.5%. Twelve months ago, there was hope that inflation would slow down on its own without much intervention from the central bank. Now the dominant idea is that prices can be reduced to 3%–4%, but further movement towards the target looks very problematic. If not impossible. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM In any case, the current 7% CPI is still very high, and it is inappropriate to say that the Fed's job is done. The further trajectory of the federal funds rate will depend on new data. Its 50 bps hike in February is not out of the question, which brings back investor interest in the disgraced U.S. dollar. Gold is anti-dollar and usually goes down when the American currency goes up, so the decline of the XAUUSD quotes looks quite logical in response to the hawkish rhetoric of the Fed. Dynamics of the U.S. dollar and gold What's next? In my opinion, the fall of the USD index has gone too far, and it would be nice for the precious metal to go for a correction amid profit-taking on longs by speculators. If the nearest U.S. macro statistics convince of the strength of the economy, the chances for the federal funds rate to rise to 5% in early February will increase, and the U.S. dollar will strengthen. On the contrary, worsening data will benefit Treasury bonds. Rising prices for these papers leads to a decrease in yields and turns on the green light before EURUSD and gold. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM A lot depends on the main currency pair. The share of the euro in the structure of the USD index is 57%. At the moment, EURUSD remains stable due to the expectations of the ECB's "hawkish" rhetoric at the December 15 meeting. If the market is disappointed, the pair will collapse, dragging XAUUSD with it. Technically, on gold's daily chart, the "bears" are trying to implement the Anti-Turtles reversal pattern and the inside bar. If their opponents fail to catch the lower boundary of the latter at $1,796 per ounce, it will be an evidence of their weakness and a reason to form short positions. They can be increased later on a breakout of supports at $1,789, $1,783 and $1,777. At the same time, I wouldn't be too keen on selling. As the precious metal quotes move down, we're looking for an opportunity to fix profits and reverse. Relevance up to 08:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329899
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The BoE And The ECB Raised Rate By 0.50% To 3.50% Today, Australian Dollar Falls After Disappointing Data From China

Kamila Szypuła Kamila Szypuła 15.12.2022 14:29
Post-Fed volatility risk is not over yet. All eyes are on the ECB's approach to quantitative monetary tightening and economic updates from the BoE. The US Federal Reserve has also delivered a 50bps interest rate hike, pushing borrowing costs to the highest level since 2007 and hinting at a rate peak of 5.1% next year, above previous projections The Federal Reserve's decision was as provocative as expected for policy decisions - at least in relation to market expectations. The observation of volatility from risk assets and the dollar was noticeably more limited than one might expect Despite Chairman Powell's hawkish tone, the US dollar fell to a new low. The dollar has since fallen to a new five-month low. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM EUR/USD The EUR/USD Pair is trading soft on the session and drops just before the ECB meeting. The euro fell 0.67% to $1.0611 The European Central Bank was set to raise interest rates for the fourth time in a row, although by less than at its last two meetings. The decision was as expected, ie a 50bp hike. Thus, interest rates in the euro zone reached the level of 2.50% Supply chain crisis in the Eurozone economy have not calmed yet as war tensions between Russia and Ukraine are still solid. This is expected to keep Eurozone inflation expectations solid ahead. The European Central Bank expects the inflation rate to remain above 2% for the next three years. This will force the president of the European Central Bank, Christine Lagarde, to further tighten interest rate policy in order to tame rampant inflation. GBP/USD There is an interest rate decision by the Bank of England, and the big fear is the same as the ECB's: recession fears that could stop the Central Bank from raising interest rates further next year. This could result in discrepancies in interest rate expectations between the US and the UK. The Bank of England (BoE) has raised interest rates for the 9th consecutive meeting as the UK central bank continues to battle with inflation. The BoE raised the bank rate by 0.50% to 3.50% today After the expected half-point increase by the Bank of England, the British pound continued to fall. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM AUD/USD The Australian dollar weakens slightly following disappointing rounds of key Chinese economic data. The Australian dollar is moving within a bearish trend China's slowdown has negative consequences for Australia. China is Australia's largest trading partner. Thus, economic performance in the former often has knock-on effects on the latter. If this is the case, a slowdown in China could hurt Australian production in the future, perhaps inspiring the Reserve Bank of Australia to change its policy course USD/JPY USD/JPY Pair rose to 136.6907 from 135.4721 getting a lift from the Fed decision. The Japan trade deficit narrowed modestly in November according to data released overnight, with brisk growth for both imports and exports. Source: finance.yahoo.com, investing.com
At The Close On The New York Stock Exchange Indices Closed Mixed

On The New York Stock Exchange 2,473 Shares Declined More Than The Gain Of 595

InstaForex Analysis InstaForex Analysis 16.12.2022 08:00
At closing bell on the New York Stock Exchange, the Dow Jones fell 2.25 percent to a one-month low, the S&P 500 index shed 2.49 percent and the NASDAQ Composite fell 3.23 percent. Dow Jones The leaders among Dow Jones index components in Thursday trading were shares of Verizon Communications Inc. which gained 0.32p (0.85%) to close at 37.77. Chevron Corp dropped 1.29p (0.75%) to close at 171.04. Walmart Inc shares shed 1.31p (0.89%) to close at 145.36. International Business Machines were the least gainers, with shares falling 7.50p (5.00%) to close the session at 142.36. Shares of Apple Inc soared 6.71p (4.69%) to 136.50, while Intel Corporation dropped 1.11p (3.93%) to 27.15. S&P 500 The gainers among S&P 500 index components in today's trading were Lennar Corporation shares, which gained 3.82% to 94.29, DR Horton Inc. which gained 3.49% to close at 90.45 and Align Technology Inc. which gained 3.15% to close the session at 201.97. Western Digital Corporation shares were the least gainers, dropping 10.10% to close at 32.21. Shares of Nucor Corp lost 9.35% and closed the session at 134.10. Warner Bros Discovery Inc. dropped 8.93 percent to 10.00. NASDAQ The top gainers among NASDAQ Composite index components in today's trading were Core Scientific Inc, which gained 72.00% to 0.43, Imv Inc, which gained 66.55% to close at 3.64, and Scopus Biopharma Inc, which gained 44.85% to close the session at 0.34. Third Harmonic Bio Inc shares were the least gainers, down 78.28% to close at 4.30. Shares of Axcella Health Inc lost 50.78% and closed the session at 0.44. Novavax Inc's stock declined 34.30% to 11.32. Numbers On NYSE, 2,473 shares declined more than the gain of 595, while 113 remained almost flat. On NASDAQ, 2,775 stocks declined, while 961 gained and 197 remained flat. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 7.99% to 22.83. Gold Gold futures for February delivery lost 1.75% or 31.80 to hit $1.00 a troy ounce. In other commodities, WTI crude for January delivery fell 1.37%, or 1.06, to $76.22 a barrel. Futures for Brent crude for February delivery fell 1.58%, or 1.31, to $81.39 a barrel. Forex Meanwhile, in the Forex market, EUR/USD fell 0.53% to hit 1.06, while USD/JPY edged up 1.74% to hit 137.82. Futures on the USD index rose 0.79% to 104.23. Relevance up to 03:00 2022-12-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/305167
The AUD/USD Pair’s Downside Remains Off The Table

The Aussie Is Expected Futher Downside Movement

InstaForex Analysis InstaForex Analysis 16.12.2022 08:01
The Australian dollar fell by more than 160 pips on Thursday, crossing the entire range of the ascending local channel (flag) on the daily chart in two days. In order to continue the decline, the price should go below the lower limit of this newly formed channel, which is yesterday's low at 0.6678. After that the price has two nearest target levels, 0.6642 and 0.6590. The MACD indicator line is between 0.6525 and 0.6590. The main struggle for further medium-term prospects will unfold in this range. The signal line of the Marlin oscillator completed the formation of a complex structure of divergence, and now it is in the area of the downtrend. On the four-hour chart, the price corrects after yesterday's strong move. Resistance is at 0.6730. After completing the correction, we expect the aussie to fall further. Relevance up to 03:00 2022-12-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329989
The Pound Is Now Openly Enjoying A Favorable Moment

The GBP/USD Price Will Probably Need Some Time To Pause

InstaForex Analysis InstaForex Analysis 16.12.2022 08:03
The pound fell 247 points on Thursday. The reason for this was the Bank of England meeting, where two members of the committee voted to keep the rate unchanged. But as the other 7 members of the Committee voted to raise the rate, it was raised by 0.50%. The bottom shadow of the daily candlestick reached the support at 1.2155. Moving below it will open the next target at 1.1933. The Marlin oscillator attracts attention. It now has a triple factor of decline: double divergence, coming out of the range down (pink lines), falling into negative territory. The price will probably need some time to pause after such a significant movement, but in the future we expect the price at the specified target. On the four-hour chart, the price has settled under both indicator lines, the Marlin oscillator is developing in the downtrend area. We expect the price to settle under the level 1.2155 Relevance up to 03:00 2022-12-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329991
FX Daily: Testing the easing pushback

The Euro May Complete Its Preparation For The Downward Movement

InstaForex Analysis InstaForex Analysis 16.12.2022 08:06
The European Central Bank meeting was held yesterday. The rate was raised by 0.50%, and the ECB decided to reduce its holdings in the APP program. The decline will amount to €15 billion per month on average until the second quarter of 2023. The Committee expects at least two more raises of 0.50%. The euro jumped more than 100 points on such news. But then active investors saw oil falling, the U.S. stock market going down a bit late for the previous Federal Reserve meeting, and the euro closed the day with a loss of 53 points. The market went with our scenario, as the stock market fell and the euro along with it. The S&P 500 is down 2.49%. Take note that the European stock indices started falling right from the opening, which means that they showed even more weakness for the rate hike (as representatives of the weaker economy) than the U.S. market. The European Euro Stoxx 50 collapsed by 3.51%. The reversal of the single currency is coming hard. It has not reached the target range of 1.0758/87, but the readings of the Marlin oscillator, which is persistently declining, confirming the divergence, suggests a new historical extreme of 1.0736. The price is now pondering in the range of 1.0615/42. A consolidation under it opens the way to 1.0470, the low of April 28. On the four-hour chart, the price is settling in the range of 1.0615/42. A reverse consolidation above the range will complicate and slow down the reversal. The MACD line, which is just below this range (1.0567), is also slowing the decline. The Marlin oscillator did not get ahead of events this time and returned to the positive area. We are waiting for the euro to complete its preparation for the downward movement. Relevance up to 03:00 2022-12-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329993
The Price Of EUR/USD Pair Will Develop Sideways Movement

A Bearish Correction Of The EUR/USD Pair Keeps Forming

Paolo Greco Paolo Greco 16.12.2022 08:14
Analyzing Thursday's trades: EUR/USD on 30M chart EUR/USD flew from side to side on Wednesday and Thursday. This is exactly what I predicted at the beginning of the week and during the weekend. It was obvious that the results of the meetings of the European Central Bank and the Federal Reserve would not be discouraging or shocking, so there won't be a trend. Nonetheless, volatility should have increased, which we saw. Now that the inflation reports have been released and the meetings are behind us, we can say that the U.S. dollar never found any reason to rise. Yes, we did see a nice growth from the dollar last night, but it still didn't go far from its local highs. The euro has grown by 1200 points for two months, and the current pullback doesn't go over 150 points, so from a technical point of view, there is no reason to talk about the beginning of a downtrend. There are no signs of a possible downward movement on the higher charts. The results of ECB and Fed meetings were quite flat - both of them raised the rates by 0.5%, and both of them indicated that the rates will keep rising. There was no good reason to favor any currency over the other. EUR/USD on M5 chart Trading signals found in the European trading session were quite good. In the very beginning, there was a sell signal near 1.0663, afterwards the pair fell to 1.0607, which made it possible for beginners to earn about 35 pips. There was a double buy signal near 1.0607, but it was also worth working out. Approaching the time when the ECB was about to announce the results of its meeting, the pair moved away from 1.0607 so traders were able to set the Stop Loss to Breakeven and stay in the market. Therefore, newcomers could continue to support long positions without much risk. As it turned out, this was the right decision, as the pair continued to rise and even surpassed 1.0697. You could only close the longs when EUR fell below this level. It was possible to get 60-70 points of profit here as well. But all the subsequent signals should not be filled. The sell signal at 1.0697 was formed at a "dangerous time" (although it was profitable), while the rest of the signals were formed too late in time. Trading tips on Friday: The pair moves high on the 30-minute chart even after the two central bank meetings. Thus, there was no drastic change in the technical picture this week. There is still no trend line or channel. A bearish correction keeps forming, but it refuses to start. On the 5-minutes chart on Friday, it is recommended to trade on the levels 1.0465-1.0483, 1.0536, 1.0582-1.0607, 1.0663, 1.0697, 1.0736, 1.0787, 1.0806. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. On Friday, the EU and the US will release business activity indexes for services and manufacturing for December. Although they are less important than the other events this week, investors might react. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time. Relevance up to 02:00 2022-12-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329985
The Data May Keep The British Pound (GBP) From Rising

The Pound (GBP) Finally Has A Chance To Start The Downtrend

Paolo Greco Paolo Greco 16.12.2022 08:18
Analyzing Thursday's trades: GBP/USD on 30M chart GBP/USD lost more than 200 pips on Thursday and its movements were not the same as EUR/USD, although the impact of the results of the Federal Reserve meeting turned out to be the same for both pairs, the impact of the European Central Bank and the Bank of England both raising their rates synchronously by 0.5% had a different impact on the pound. The EU also announced the start (next year) of the quantitative tightening program, which could support the euro for a while... However, now we are talking about the pound. The first thing to take note of is that the pair did collapse, and such a fall could theoretically be the start of a new downtrend. Next, the price has settled below the weak ascending trend line. Third, the market at last has stopped thoughtlessly buying the pound, even when there is no reason for it. The BoE only provided dry information after the meeting, as it said that it was ready to continue to hike rates, but the pace of its growth has already slowed. Recession in the British economy has already begun, unemployment will rise, households and the real estate market are experiencing problems. Inflation may have passed its peak (or it may not, as it has only dropped once so far). GBP/USD on M5 chart Despite the fact that there was nearly a sharp plunge yesterday, the trading signals were not appealing. Let's start with the fact that GBP started falling at night, so it was impossible to catch its start. In the middle of European session and in the beginning of US one (when the BoE announced the results of its meeting) the pair hovered near the area of 1.2329-1.2337, making around three sell signals. In the first two cases, the pair was down by at least 20 pips, so both short positions were closed with Stop Loss at breakeven. But the third sell signal could be stopped, because the first two signals turned out to be false (though they didn't bring losses). And it was after this signal that the pound started to fall sharply. The last two sell signals should not be used, since by that time the pair had already gone most of the way down. The day ended without profit and without loss. Trading tips on Friday: On the 30-minute chart, the pound finally has a chance to start the downtrend, it has crossed the trend line. Of course, this week's movements were provoked by the fundamental backdrop, and next week the market may resume its groundless purchases of the pound. But nevertheless for the first time in a long time we have real signals of a strong bearish correction, which we have been waiting for a long time. On the 5-minute TF on Friday, it is recommended to trade at the levels 1.1950-1.1957, 1.2064-1.2079, 1.2141, 1.2186-1.2205, 1.2245-1.2260, 1.2337-1.2343, 1.2444.. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. On Friday, business activity indexes of services and manufacturing for December will be published in the UK and the US. There might be a reaction, but only if the reports deviate from the forecasted values. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time Relevance up to 02:00 2022-12-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329987
The EUR/USD Pair: There Are Still No Sell Signals

The EUR/USD Pair Has The Potential For Bearish Decline

InstaForex Analysis InstaForex Analysis 16.12.2022 08:21
Technical outlook: EURUSD rallied through 1.0736 sharply during the New York session on Thursday only to find resistance and reverse. Prices dropped below 1.0600 thereafter giving up over 130 pips in no time. A potential top seems to be in place at 1.0736 as the bears target lower towards the 1.0000-50 area at least. The single currency pair is seen to be trading close to 1.0640 at this point in writing as the bears prepare to resume lower again. EURUSD has also produced an Engulfing Bearish candlestick pattern right at the trend line resistance of over 18 months as seen on the daily chart. A high probability remains for the larger-degree downtrend to resume lower towards 0.9400 levels in the next several weeks. Also, note that the Fibonacci 1.618 extension of the counter-trend rally was almost tested at 1.0740. If not a trend reversal, which is too early to confirm, EURUSD is setting up for a corrective decline towards 1.0000 before finding support. The recent upswing is now seen between 0.9740 and 1.0736 levels and the Fibonacci 0.618 retracement is seen close to the 1.0000 mark (not projected here today). The price is looking lower in the near term. Trading idea: Potential bearish decline against 1.0750 Good luck! Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305187
Driving Growth: The Resilience of Green Bonds and Shifting Trends in Sustainable Finance

The Latest Weakness In Oil Prices Exerts Downside Pressure On The USD/INR Pair

TeleTrade Comments TeleTrade Comments 16.12.2022 09:03
USD/INR reverses from the highest levels in six months, snaps two-day winning streak. US Dollar cheered risk aversion wave as central banks prefer higher rates for longer time. Easing in Indian trade deficit, traders’ defense of 83.00 and softer oil prices favor pair sellers. US PMIs for December eyed for fresh impulse. USD/INR retreats to 82.75 from a 1.5-month high, marked the previous day, as global markets take a sigh of relief during early Friday. In doing so, the Indian Rupee pair bears the burden of the market’s consolidation amid a light calendar, as well as the traders’ defense of the 83.00 round figure, not to forget the softer oil prices. Also likely to weigh on the pair could be the recent easing in the Indian trade deficit. That said, India's trade deficit narrows in November to $23.9 billion from $26.9 billion in October, per the latest readings reported by Reuters. While conveying further details, the news stated that India's merchandise exports for November stood at $31.99 billion, while imports stood at $55.88 billion. Elsewhere, traders try hard to defend the 83.00 round figure and seemed to have weighed on the quote of late. Reuters quotes an anonymous trader from India as saying, “There will be ‘understandable hesitancy’ among traders with the psychological level of 83 nearby.” The news also adds that It will "take a lot" for the rupee to fall below 83 toward a record low. It should be noted that the latest weakness in oil prices also exerts downside pressure on the USD/INR due to India’s reliance on energy imports. While the economic slowdown fears were enough for the WTI crude oil to retreat from the weekly top, the downbeat China data and hopes of resumption of output from the Canadian oil pipeline seemed to have weighed on the black gold prices. That said, WTI crude oil remains mildly offered near $76.20 after snapping a four-day uptrend the previous day. On Thursday, the US Dollar cheered risk-aversion as global central banks propelled benchmark rates in the latest monetary policy announcements and showed readiness to keep the rates higher for longer. On the same line was US President Joe Biden’s crackdown on Chinese chipmakers. Given the lack of major catalysts and the market’s consolidation, the USD/INR may witness further pullback ahead of the US PMIs. That said, the market forecasts surrounding the US S&P Global PMIs appear mixed as Services activities are likely to improve but not the manufacturing ones. Even so, both these sectors are expected to print the below 50 figure that suggests a contraction in activities and could weigh on the US Dollar in case of a downbeat outcome. Technical analysis A daily closing beyond the 83.00 round figure becomes necessary for the USD/INR pair to stay on the bull’s radar.
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The Outlook Of The Loonie Pair (US Dollar/Canadian Dollar)

TeleTrade Comments TeleTrade Comments 16.12.2022 09:08
USD/CAD seesaws around intraday low after reversing from 1.5-month-old resistance line. Recovery from 100-SMA joins bullish MACD signals, firmer RSI to suggest further advances. 200-SMA, monthly support line adds to the downside filters. USD/CAD picks up bids to pare intraday losses around 1.3640 during early Friday morning in Europe. In doing so, the Loonie pair reverses the early Asian session pullback from a six-week-old descending resistance line. That said, the quote’s bounce off the 100-SMA level, around 1.3530 by the press time, joins the bullish MACD signals and the firmer RSI (14), not overbought, to signal the USD/CAD pair’s further advances. Hence, the quote’s another battle with the aforementioned resistance line, near 1.3675 at the latest, can’t be ruled out. However, a clear upside break of the same, as well as a run-up beyond the monthly top of 1.3700, becomes necessary for the USD/CAD bull’s conviction. Following that, a run-up towards the previous monthly top surrounding 1.3810 can’t be ruled out. On the flip side, the 61.8% Fibonacci retracement level of the pair’s early November moves, near 1.3585, acts as immediate support to watch during the quote’s further downside. Additionally challenging the USD/CAD bears is an upward-sloping support line from mid-November and the 200-SMA, respectively around 1.3500 and 1.3480. To sum up, USD/CAD remains on the bull’s radar despite the loss on daily basis. USD/CAD: Four-hour chart Trend: Further recovery expected
The Downside For The AUD/USD Pair Is Likely To Remain Cushioned

The AUD/USD Pair Is Defending The Previous Day’s Bearish Bias

TeleTrade Comments TeleTrade Comments 16.12.2022 09:09
AUD/USD retreats from intraday high to 0.6700 amid early Friday morning in Europe. In doing so, the Aussie pair takes clues from the options market while defending the previous day’s bearish bias that portrayed the quote’s heaviest slump in 33 months. That said, the one-month risk reversal (RR) of AUD/USD,  a gauge of calls to puts, drops the most in three weeks on daily basis, per data source Reuters. That said, the spread between call and put options prints -0.035 level by the press time. The bearish bias in the options market could be linked to the broad pessimism surrounding global economic transition and central bankers’ moves. Also likely to have weighed on the sentiment could be the US-China tussles, not to forget the dragon nation’s lack of ability to convince traders of the economic recovery. It should be noted, however, that the weekly RR remains firmer for the fourth consecutive time, to 0.130 at the latest, which in turn challenges the downside bias amid Friday’s sluggish start. Also read: AUD/USD extends its recovery to near 0.6740 as risk off impulse eases, US PMI in focus
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

A Dovish Policy Stance By The People’s Bank Of China Is Going To Strengthen The New Zealand Dollar (NZD)

TeleTrade Comments TeleTrade Comments 16.12.2022 09:18
NZD/USD has sensed selling pressure while stretching its recovery above 0.6370 amid broader pessimism. The Federal Reserve is considering wage inflation a major trigger that could propel general inflation. The New Zealand Dollar is going to display reflexive moves on the People’s Bank of China monetary policy. NZD/USD has retreated after testing the upward-sloping trendline while the downside filters are still solid. NZD/USD has faced resistance of around 0.6380 in the early European session. The New Zealand Dollar major asset delivered a recovery after dropping to near 0.6320 and stretched its recovery in the Tokyo session as the risk-off impulse witnessed ease. However, the aversion theme is extremely solid on a broader note. The recovery move in the Tokyo session should not be considered a reversal for now as it needs more filters. Meanwhile, the US Dollar Index (DXY) is displaying a subdued performance amid the absence of a potential trigger ahead. The USD Index is oscillating around 104.35 after correcting from above 104.80. S&P500 futures are extending Thursday’s sell-off as firms in the United States are having the trauma of higher interest obligations led by escalated terminal rate guidance. The 10-year US Treasury yields have attempted recovery and have surpassed 3.48% as the demand for US government bonds has fizzled out. On the New Zealand front, investors are shifting their focus toward the interest rate decision by the People’s Bank of China (PBoC), which is scheduled for Tuesday. The New Zealand Dollar may display significant volatility, being one of the leading trading partners of China. Federal Reserve sees wage inflation as a major threat ahead Average Hourly Earnings in the United States are continuously advancing to justify tight labor demand. Firms spend a significant amount in retaining and hiring talent to maintain a comfortable flow of operational activities. Higher earnings by the households will continue to keep retail demand solid as individuals will be left with decent funds after catering necessities. Rising wage inflation could propel general inflation ahead as lower inflation can be achieved with a higher unemployment rate. Escalating payroll numbers and eventually robust retail demand would keep inflation on the rooftop. United States Retail Sales dropped larger than predicted On Thursday, the monthly Retail Sales data (Nov) contracted by 0.3% while the street was expecting a contraction of 0.1%. A decline in retail demand would result in more inflation softening as firms will be forced to provide goods and services at lower prices. Analysts at Wells Fargo expect spending to contract in CY2023 but it's too soon to call this the start of a sustained decline in goods spending. For making lower inflation projections, the United States economy is needed to show a sustained decline in consumer spending. For further guidance, investors are keeping an eye on preliminary S&P PMI data. As per the projections, the Manufacturing PMI is seen unchanged at 47.7 while Service PMI would improve to 46.8 vs. the former release of 46.2. New Zealand Dollar banks upon PBoC policy for further guidance The central bank of the second largest economy is going to announce its monetary policy after easing prolonged Covid-19 restrictions. The People’s Bank of China is scheduled to announce its December monetary policy on Tuesday. Citing weaker economic prospects, a troubled real estate market, and contracted retail demand, the People’s Bank of China is expected to announce a dovish monetary policy. People’s Bank of China policymakers should look to trim their Prime Lending Rate (PLR) to support low inflation and deflation in factory-gate prices. A dovish policy stance by the People’s Bank of China is going to strengthen the New Zealand Dollar as the Kiwi economy will receive more business from China. NZD/USD technical outlook NZD/USD has sensed significant demand after dropping to near the upward-sloping trendline from November 21 low at 0.6087. The rebound from the aforementioned trendline needs to pass various filters for a bullish reversal consideration. A bear cross, represented by the 20-and 200-period Exponential Moving Averages (EMAs) at 0.6384, indicates more weakness ahead. The Relative Strength Index (RSI) (14) is attempting to shift into the 40.00-60.00 range. A decisive decline in the bearish range of 20.00-40.00 will trigger a bearish momentum
FX Daily: Asymmetrical upside risks for the dollar today

The US Dollar Index (DXY) Failure To Defend The Previous Day’s Rebound

TeleTrade Comments TeleTrade Comments 16.12.2022 09:23
US Dollar Index pares the biggest daily gain in 10 weeks amid sluggish session. Mixed US statistics, Fed’s hesitance in praising hawks keep sellers hopeful. Recession woes and Sino-American tensions keep buyers hopeful ahead of December PMIs. US Dollar Index (DXY) makes rounds to 104.30-40 as it prints mild losses heading into Friday’s European session. In doing so, the greenback’s gauge versus the six major currencies consolidates the biggest daily gain since early November, marked the previous day. The DXY’s failure to defend the previous day’s rebound from a six-month low could be linked to recently mixed data in the US and a lack of a major catalyst during early Friday. It’s worth noting that the US Retail Sales flashed -0.6% MoM figure in November versus 0.1% expected and 1.3% prior. Further, manufacturing survey details from Philadelphia Fed and New York Fed came in disappointing for the said month whereas Industrial Production eased in November and the Jobless Claims also dropped for the week ended on December 09. It’s worth noting that the market sentiment remains dicey as recession woes underpin the Treasury bond yields but the US stock futures and equities in the Asia-Pacific region remain lackluster ahead of the final shot of data from the big week. The reason for the lack of negative performances of equities could be linked to the hopes for more stimulus from China. With the mixed signals, the US Dollar Index fails to extend the previous day’s recovery moves. On Thursday, the global central bankers’ rush towards higher rates and readiness to keep them high for longer, to battle the inflation woes, seemed to have triggered the risk-off mood and underpinned the US Dollar demand. On the same line could be the latest Sino-American tussles as Reuters reported that the Biden administration on Thursday added Chinese memory chipmaker YMTC and 21 "major" Chinese players in the artificial intelligence chip sector to a trade blacklist, broadening its crackdown on China's chip industry. Moving on, the market forecasts surrounding the US S&P Global PMIs appear mixed as Services activities are likely to improve but not the manufacturing ones. Even so, both these sectors are expected to print the below 50 figure that suggests a contraction in activities and could weigh on the US Dollar in case of a downbeat outcome. It should be noted, however, that the US Federal Reserve’s (Fed) hesitance in favoring the hawks, despite raising rates by 50 basis points (bps), seems to challenge the DXY bulls. Technical analysis US Dollar Index losses could be linked to the failure to cross a one-week-old descending resistance line, around 104.55 by the press time. However, RSI (14) stays near the oversold conditions and hence challenges the odds favoring major declines.
"SD/JPY Nearing Intervention: Japanese Officials Prepare for Action

Euro bonds benefit from Christine Lagarde's rhetoric. Euro touched 1.0736

Ipek Ozkardeskaya Ipek Ozkardeskaya 16.12.2022 09:30
I should admit that I thought the major event of this week would be Federal Reserve (Fed) President Jerome Powell's speech and a dot plot from the FOMC members, which would look significantly more hawkish than the expectations, and a couple of eventless 50bp hikes from the other major central banks including the European Central Bank (ECB), the Bank of England (BoE) and the Swiss National Bank (SNB).   But the week's central bank surprise came from Christine Lagarde yesterday.   Lagarde's 'whatever it takes' moment  The ECB raised its interest rates by 50bp as expected yesterday, and hinted at the accompanying statement that there would be more rate hikes on the pipeline.   And President Christine Lagarde killed all hope that the ECB would take into account the slowing economy, and recession, when hiking rates.   Instead, Lagarde kept telling reporters that the rates in the Eurozone will continue to rise 'steadily and significantly' over the next meetings. She said that the ECB will raise the rates by another 50bp at the next meeting. Then by another 50bp in the meeting after that. And another 50bp in the meeting after that. Then another one!   No central banker has given such 'forward guidance' before. The idea of 'meeting to meeting adjustment to the monetary policy', the concept of 'we will be watching the data to decide the next steps' got hammered, yesterday. Christine Lagarde made the most hawkish speech since she came to the office. And yesterday's meeting was one of the most important ones since Mario Draghi's 'whatever it takes', back in July 2012.   Lagarde's speech was the 'reverse whatever it takes', or the new 'whatever it takes to bring inflation to 2%'.   And oh, the ECB will also start unwinding its balance sheet from March, but the officials sound like they don't have a clue about how that will play out, because they have never done it before. This is what they said.   Merry Xmas!  European yields spikde during Madame Lagarde's speech. The German 10-year yield jumped more than 10%. The French and the Spanish 2-year yield did the same. The Italian 2-year yield soared more than 13%.  Christine Lagarde's speech also sent the markets to hell yesterday, and smashed whatever hope was left for a year-end stock rally.   The DAX and the CAC fell more than 3%.   Of course, the ECB's hawkish announcements – that came a day after the Fed's hawkish decision - wreaked havoc across the US equities as well. The S&P500 slipped below its 100-DMA, as Nasdaq fell below its 50-DMA.   Read next: EU economy expected to grow 0.8% in 2023. Following ECB hikes can be higher than Fed ones | FXMAG.COM Here in Switzerland, the SMI also paid the price of a 50bp hike from the SNB and the ECB. The index fell around 2.50%, although some breathed a sigh of relief that the EURCHF stayed relatively stable, not the get the Swiss franc more expensive for European clients.   Go, euro!  Even though the euro was relatively stable against the franc, the single currency got a nice initial boost from the ECB decision and especially Lagarde's cruelly hawkish press conference against the US dollar.   The EURUSD spiked to 1.0736, the highest level since April, then gave in to the broadly stronger US dollar, and is back below the 1.07 mark this morning.   But the significant hawkish shift in ECB's policy stance, and the determination of the European leaders to shot inflation to the ground should continue giving some more support to the euro, therefore, price pullbacks in EURUSD could be interesting dip buying opportunities for a further rally toward the 1.10 mark.  And if the US dollar strengthened yesterday, it was certainly due to a heavy selloff in stocks and bonds that ended up with investors sitting on cash. Other than that, the data released in the US yesterday was not brilliant! The retail sales fell by most in a year; holiday shopping apparently didn't help improve numbers. The Empire Manufacturing index tanked from 4.5 to -11, versus -1 expected by analysts. Both data hinted at a slowing economic growth in the US, which should normally boost recession fears and keep the Fed hawks at bay. And that could mean a further downside correction in the dollar in the run up to Xmas.
Growth Of The USD/JPY Pair Is Hampered By Resistance

Signs Of Stability In The Financial Markets Could Undermine The Safe-Haven Japanese Yen (JPY)

TeleTrade Comments TeleTrade Comments 16.12.2022 09:38
USD/JPY comes under fresh selling pressure on Friday amid a modest USD weakness. The Fed’s hawkish outlook to revive the USD demand and lend support to the major. Fading safe-haven demand could undermine the JPY and help limit losses for the pair. The USD/JPY pair meets with a fresh supply on Friday and erodes a part of the previous day's rally to over a two-week high. The pair maintains its offered tone through the early European session, though has managed to recover a few pips from the daily low and is currently placed just below mid-137.00s. The US Dollar struggles to capitalize on the overnight recovery move from a six-month low and comes under some renewed selling pressure on the last day of the week. This, in turn, is seen as a key factor acting as a headwind for the USD/JPY pair. That said, the Fed's hawkish outlook should help revive the USD demand and lend some support to the major, at least for the time being. It is worth recalling that the US central bank struck a more hawkish tone on Wednesday and signalled that it will continue to raise rates to crush inflation. In the so-called dot plot, policymakers projected at least an additional 75 bps increases in borrowing costs by the end of 2023 and see the terminal rate rising to 5.1%, higher than the 4.6% level forecasted in September. Apart from this, signs of stability in the financial markets could undermine the safe-haven Japanese Yen and contribute to limiting the downside for the USD/JPY pair. Even from a technical perspective, repeated failures to find bearish acceptance below the very important 200-day SMA and the subsequent bounce warrant caution before positioning for a further near-term depreciating move. Market participants now look forward to the release of the flash US PMI prints, due later during the early North American session. The data might influence the USD price dynamics, which, along with the broader risk sentiment, should provide some impetus to the USD/JPY pair. Nevertheless, spot prices remain on track to post modest gains for the second successive week.
China Restricts Gallium and Germanium Exports, Heightening Global Tech War

Forex: Buying And Selling Currency Options

Saxo Bank Saxo Bank 16.12.2022 09:46
What are Forex (FX) Options?Forex options are just like equity options which gives the buyer of the options the right but not the obligation to buy or sell a currency pair on a specific date (expiry) at a specific price (strike price). In exchange for this right, the option buyer typically pays a premium to the seller/writer of the option.The key point of difference between FX options and Equity options is that a call option on one currency is necessarily a put option on the other currency. If you are buy EURUSD call – you are essentially buying EUR call and USD put. Basic Terms Types of FX OptionsThere are two types of FX options – calls and puts. Buying a call option gives you the right to buy a currency pair while buying a put option gives you the right to sell a currency pair on the expiry date. Selling a call option involves taking on an obligation to sell at a pre-agreed price on the expiry date while selling a put option involves taking on an obligation to buy at a pre-agreed price on the expiry date in exchange for receiving a premium.We shall use an example involving EURUSD call and put options below to illustrate this:Scenario Analysis for EURUSD option at expiry vs Owning an outright 2 mth EURUSD forward Assumption: Buy/Sell 100,000 EURUSD Call/Put option at strike 1.07 with 2 month tenor for 0.0150 (150 pips), P&L in USD Buying FX OptionsTypically, traders who wish to place a directional bet on a currency pair would buy OTM calls or puts. As OTM options are much cheaper and as a result offer the most leverage, it gives the most bang for buck especially when one is trying to trade strategies that offer asymmetrical returns. OTM options however are most prone to time decay (meaning the more time passes without the spot prices moving in favour of the option the more acute the loss of value of the option). At times, traders might wish to buy ATM options due to their sensitivity to volatility and price changes in the underlying. Due to their higher deltas (sensitivity to spot price move), they are also relatively more likely to expire in-the money. The flip side is that ATM options cost more than OTM options and therefore can lead to higher loss of premium if the option expires worthless. ITM options have high intrinsic value (forward price - strike for calls and strike – forward price for puts) and often work like a proxy spot position. These options are usually much more expensive and thus offer little leverage. In addition, the total premium loss would be much larger should the option expire worthless. In short, the optionality in an ITM option is limited and hence it tends to be less popular. Another way good traders would try to reduce the premium paid is via trading option strategies to implement their views. Some common strategies include call spreads (Buy call, Sell call), put spreads (Buy put, Sell put), collar strategies (Long stock, Buy put, Sell call) and risk reversals (Sell put/Buy call or Sell call/Buy put) Selling FX OptionsTraders can generate income by selling FX options in exchange for a premium. As an option seller, you are receiving the premium to protect the option buyer from market moves. The maximum gain from selling options is the premium received while the losses can be unlimited. Why do traders sell FX Options?If selling FX options can lead to unlimited losses, why would anyone sell them? As the value of options comprise of volatility, time decay and moneyness of the option, traders can take advantage of temporary spikes in volatility to sell FX options to express their view on the market. Premium received can be measured in basis points to give you a fairer indication of the amount of premium you receive during different time periods. Selling putsIf you are bullish on USDJPY and think that the pair is unlikely to fall below 136 in the next month (and you are prepared to buy it at 136 even if it gets there), one way to express this view is to sell 1 month puts at the strike of 136 for some premium. If USDPY stays above 136, you do not have any obligations at expiry but if USDJPY falls below 136, you would be long USDJPY from 136. Selling callsOn the contrary, if you are bearish on USDJPY and think the pair is unlikely to rise above 140 in the next month (and you are prepared to sell at 140 even if it gets there), you can sell 1 month calls at strike 140 for some premium. If USDJPY stays below 140, you do not have any obligations but if USDJPY rises above 140, you will be short USDJPY from 140. Key differences between FX options and Equity options1. FX options are traded over-the-counter (OTC) instead of an exchange. As these products are traded OTC, the variables like the size, strike price, and tenor are customizable. You can choose your own size, expiry date and strike price instead of adhering to standardized ones you would typically find in an exchange traded option like equity options. 2. FX options are European style options. This means that these options can only be exercised on the expiry date as compared to any time before expiry in American options.3. When you exercise an FX option, the resulting position is a FX margin position instead of a position required to be fully funded by cash. For example, a 100,000 USDJPY call option expiring in-the-money (ITM) will result in a long 100,000 USDJPY position that utilizes way less margin than 100,000 USD. If initial margin is 5%, then 5,000 USD is required to receive this position at the strike price in addition to the position P&L. Key advantages of trading FX options1. The maximum loss from buying FX options is the premium paid. Buying FX options to express your view will not lead to margin calls due to mark-to-market losses. 2. Selling FX options in the right conditions can lead to a steady income (premium) stream to supplement your portfolio returns. Typically traders can take advantage of a interim spike in volatility in a deeply liquid market that trades 24 hours a day for 5 days a week to sell FX options to maximize their returns. 3. Options are often used by FX traders as proxy take profit (Sell call against long/Sell put against short) or stop loss orders (Buy put against long/Sell call against short) for their spot tradingKey risks of trading FX options1. There is a potential of unlimited loss when selling FX options due to the high leverage factor. 2. There is a risk of using FX options as a means to take profit or enter into a position as the option might be in-the-money before expiry and turn out-of-the-money at expiry. Without the option, you might have taken profit or entered into a position via a spot order otherwise. 3. Buying far OTM FX options frequently can lead to a low probability of success and too much premium loss due to time decay.   Source: Primer on FX Options | Saxo Group (home.saxo)
"Global Steel Output Rises as Chinese Production Surges, Copper Market Remains in Deficit

There Will Probably A Rally Today And For The Remaining Two Weeks Until The End Of The Year

8 eightcap 8 eightcap 16.12.2022 09:55
Pressure returned on markets due to negative sentiment that followed the Fed's decision on interest rates. Most likely, players wanted to lock in gains on assets at more interesting prices, so even though the rate hike and latest economic statistics in the US were not surprising, they did their best to trigger a collapse, using recession fears as an excuse. Of course, it could also be because the Fed said they expected a slightly higher average interest rate level, but that was not new, as is the economic data that was lower than expected. Nevertheless, it is unlikely that yesterday's decline is a sign of a global reversal as an important leading indicator, which is US treasuries, did not show a strong increase. Stock markets are also beginning to grow since today's European session, and this may continue until the US trading session. It seems that the gold market is climbing as well, while dollar is declining smoothly. There will probably a rally today and for the remaining two weeks until the end of the year, which will not only recover yesterday's losses, but will also lead to a noticeable increase in risk appetite, accompanied by a weaker dollar. Forecasts for today: EUR/USD The pair halted at 1.0655, but stabilization in markets and increased drisk appetite could push it towards 1.0785. USD/CAD The pair is trading within the range of 1.3525-1.3700. If market sentiment improves, it could stay at 1.3525.   Relevance up to 08:00 2022-12-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330015
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

Surprise Hawkishness From Christine Lagarde | Netflix Ad-Supported Versions Have Poor Demand

Swissquote Bank Swissquote Bank 16.12.2022 12:28
The European Central Bank (ECB) raised its interest rates by 50bp as expected yesterday, and President Christine Lagarde said that the ECB will raise the rates by another 50bp at the next meeting. Then by another 50bp in the meeting after that. And another 50bp in the meeting after that. Then another one! Markets European yields spiked during Madame Lagarde’s speech. The DAX and the CAC fell more than 3%. The S&P500 slipped below its 100-DMA, as Nasdaq fell below its 50-DMA. The EURUSD spiked to 1.0736, the highest level since April. EU The significant hawkish shift in ECB’s policy stance, and the determination of the European leaders to shot inflation to the ground should continue giving some more support to the euro, therefore, price pullbacks in EURUSD could be interesting dip buying opportunities for a further rally toward the 1.10 mark. US And if the US dollar strengthened yesterday, it was certainly due to a heavy selloff in stocks and bonds that ended up with investors sitting on cash. Other than that, the data released in the US yesterday was not brilliant! The retail sales fell by most in a year; holiday shopping apparently didn’t help improve numbers. The Empire Manufacturing index tanked from 4.5 to -11, versus -1 expected by analysts. Both data hinted at a slowing economic growth in the US, which should normally boost recession fears and keep the Fed hawks at bay. And that could mean a further downside correction in the dollar in the run up to Xmas. Netflix In Individual stock news, Netflix slumped more than 8.5% on news that its new ad-supported versions didn’t kick off well, as most people preferred keeping ads away when they were in the middle of the Meghan and Harry drama! Watch the full episode to find out more! 0:00 Intro 0:35 Surprise hawkishness from Christine Lagarde 3:09 … sent sovereign bonds & stocks tumbling 5:13 … should help the euro recover 7:01 … at least against the British pound 8:14 Netflix falls as ad-supported versions sees weak demand Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #hawkish #ECB #Lagarde #speech #BoE #FOMC #Fed #SNB #rate #decisions #USD #EUR #GBP #CHF #DAX #CAC #SMI #EuroStoxx50 #Netflix #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

There Was A Rally Of Hawks This Week, Statement Of The President Of The European Central Bank Supported The Euro

Conotoxia Comments Conotoxia Comments 16.12.2022 12:35
Hawks are defined as those members of committees deciding on interest rates who are in favor of raising those rates. So there was a rally of hawks this week, as both the Fed and the ECB and the Bank of England and the Bank of Switzerland, among others, decided to raise the price of money and, moreover, are unlikely to change that for the time being. The king, or rather queen of the hawks, became the president of the European Central Bank, Christine Lagarde, and her statement supported the euro exchange rate. The European Central Bank yesterday raised interest rates by 50 basis points as expected, reiterated that there would be further increases and outlined plans for quantitative tightening. The common currency initially strengthened after the decision and reached a six-month high of $1.07. In the afternoon, however, it gave back some of the earlier gains, with market participants trying to assess how much additional rate hikes would hurt the already fragile economy. The ECB raised its inflation forecasts, while economic growth forecasts were sharply lowered. According to the latest forecasts by ECB economists, inflation is expected to reach 8.4 percent in 2022, only to fall to 6.3 and 3.4 percent in the next two years, respectively. Meanwhile, GDP is expected to grow by 3.4 percent in 2022, only to fall to 0.5 percent in 2023 and rise to 1.9 percent in 2024. However, that was not what seemed to be the most important statement. It was probably that the ECB needs to raise rates more than the market is currently pricing in. Christine Lagarde assumes that rates in the Eurozone can be raised at 50 bps for a longer period of time. Thus, the market has begun to expect the peak in eurozone rates to fall above 3 percent. Source: Conotoxia MT5, EURUSD, H1 As a result, the euro was above $1.07 at one point, and what's more, the eurozone may be coming out on top in terms of the pace of rate hikes in the future. Nevertheless, high interest rates and a weaker outlook for economic growth may leave their mark on other markets like the stock market. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Mexican Rate Spread: Tight vs. Central Bank's Rate Spread and Implications for Dis-inversion

The Cable Market (GBP/USD) Held Back Bearish Enthusiasm, The ECB President Christine Lagarde Gave Support To The Euro

Kamila Szypuła Kamila Szypuła 16.12.2022 13:51
The dollar was little changed on Friday after jumping in the previous session as traders analyzed a string of central bank rate hikes and grappled with the prospect that borrowing costs could still rise. This week has been hot in central bank events. The Fed raised its key interest rate by 50 basis points on Tuesday. Jerome Powell's speech at the press conference sparked volatility in the market.Further tightening is excellent news for the US dollar. Yesterday, the ECB and the BoE also followed the Fed and raised rates by 50 bp. GBP/USD Thursday's Bank of England rate hike of 0.5 percentage point pushed base rates to highs not seen since 2008 (3.5%). But even that wasn't enough to prevent GBP/USD from its biggest daily drop in six weeks The markets interpreted the move as a "dovish" increase in interest rates, even though six of the nine members of the Monetary Policy Committee in London voted for it, and another member wanted stricter action. This division does not suggest that the Bank is willing to refrain from further rate hikes. Thursday's close of the day showed that GBP/USD fell convincingly below the uptrend line that had previously held back bearish enthusiasm for five weeks. This puts clear downward pressure on the pair. The pound fell on Friday against the euro and the U.S. dolar. Sterling fell 0.2% to $1.2160 against the dolar, versus the euro , the pound exchanged hands at 87.39 pence, 0.2% lower on the day. EUR/USD EUR/USD touched a post-ECB high of 1.0736 yesterday before consolidating gains around the 1.0650 area. The technical set-up for the pair remains positive. Yesterday the European Central Bank raised interest rates by 50 bp as expected. Thus, the rate level reached 2.50%. This level was last seen in 2008. The ECB expects it to increase further. The European Central Bank (ECB) will raise interest rates "significantly" in the coming months to fight entrenched inflation, The ECB President Christine Lagarde said yesterday, sending a hawkish signal to the market. This signal turned out to be crucial for the strength of the euro. The ECB's hawkish stance, if fully realized, suggests that the single currency has room to grow in the coming weeks. Read next: Knorr-Bremse Strengthens Its ESG Measures In Partnership With Deutsche Bank | Arizona Is Attractive For The EV Market | FXMAG.COM USD/JPY Against the Japanese yen, the dollar fell 0.54% to 137.01 on Friday. The Japanese yen held above 137 per dollar, facing renewed pressure after the US Federal Reserve offered a more hawkish outlook on its policy. The yen clearly depreciated after the Fed meeting. However, it may fall as the Bank of Japan meeting approaches early next week (19-20/12) AUD/USD The Australian dollar fell sharply to around $0.67, facing renewed pressure as major central banks presented a more hawkish monetary policy outlook than markets anticipated, adding to fears of a potential recession next year. In the European session, it will fall even more and is below $0.67. Moreover, the latest data showed that consumer inflation expectations in Australia hit a seven-month low in December, while the country's unemployment rate remained at 3.4% in November. Investors also reacted to data showing that Australian private sector activity contracted for the third straight month in December. Source: investing.com The RBA has now raised the cash rate for eight consecutive months and said it expects further tightening to bring down inflation. Source: finance.yahoo.com, investing.com, dailyfx.com
The Global Factor As The First Principal Component For The Weekly Movements Of The CEE4 Currencies

The Global Factor As The First Principal Component For The Weekly Movements Of The CEE4 Currencies

ING Economics ING Economics 17.12.2022 08:04
Since the beginning of the coronavirus pandemic in March 2020, the currencies of CEE4 countries (Czech Republic, Hungary, Poland and Romania) have exhibited similar short-term (weekly) dynamics[1] but diverse mid-term trends against the USD. In the period from 15 March 2020 to 27 November 2022, the HUF depreciated against the dollar by 23%, PLN by 13% and RON by 8%, whereas CZK appreciated by 1% (Figure 1). Such a divergence was barely observed prior to the Covid outbreak as, during the two years preceding it, the CEE4 currencies showed a relatively similar 13-17% depreciation against USD. This suggests that the post-Covid divergence is not a technical event but, rather, that it has fundamental roots. In this article we take a closer look at the common and individual drivers of these CEE4 FX movements to show that it’s highly likely that for the past two years fundamentals have played a more important role. Also, noteworthy, after March 2020, the CEE4 currencies differentiate in terms of their reaction to the initial one-month long risk off (from -3% for RON to -10% for HUF), the subsequent recovery of April 2020–June 2021 (from 10% for RON to 23% for CZK) and by the scale of subsequent depreciation (from -11% for CZK to -28% for HUF). It is also evident from Figure 1 that the difference in the relative performance of HUF against PLN and RON started to be more pronounced after the beginning of the war in Ukraine, suggesting some fundamental or political factors have been at play. Methodology of Global-Regional-Local decomposition Factors at play in divergence of CEE4 FX movements The divergence in the CEE4 FX movements since the Covid outbreak suggests that even though the pandemic was a powerful global event that had a similar effect on currency movements in the region, other factors have been at play, which deserves a closer look. In other words, in addition to global movements, domestic factors have played a role, and these are the key focus of this article. To distinguish the factors behind the CEE4 FX movements, we use the global-regionallocal (GRL) decomposition, which is based on the methods of Principal Component Analysis. According to the framework, the dynamics of the USD vs any CEE4 currency can be expressed as the sum of three uncorrelated components: global, regional and local. This statistical framework allows us to decompose the divergent trends of CEE4 currencies against USD presented in Figure 1, as well as to identify the sources of shortterm exchange rate co-movement. In the latter case, this can be done by computing the contribution of GRL factors to the variance of short-term fluctuations. We define the global factor as the first principal component for the weekly movements of the CEE4 currencies plus the other 14 EME currencies (RSD, TRY, ZAR, ILS, BRL, MXN, CLP, CNY, INR, IDR, KRW, PHP, SGD, TWD) against USD. Next, the regional factor is extracted as the first principal component of the remaining part of CEE4 currency movements. The local component is the remaining part of the exchange rate dynamics. GRL decomposition of weekly fluctuations – it’s almost all about the global factor Figure 2 reveals that the global factor, which accounts for between 64% for HUF and 82% for RON variability, is by far the most important determinant of weekly exchange rate fluctuations for all CEE4 currencies5. This very high correlation of the global factor with the US dollar index (DXY) indicates that, over the short run, the dollar’s value is driving CEE4 volatility. The contribution of the regional factor, which is correlated with the EUR/USD rate, ranges from 7 to 22%, whereas the role of the local component is relatively small, especially for PLN and CZK. FX weekly fluctuations Global = most important Regional = 7-22% impact Local = relatively small role Read the article on ING Economics   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more The correlation of short-term (weekly) movements of CEE4 currencies ranged between 0.79 for HUF/USDRON/USD pair to 0.92 for PLN/USD-CZK/USD pair ↑
Czech Republic: Tax Revenues Should Be Higher Than MinFin Expects

FX: It Seems The Czech Economy Can Afford The Relative Strength Of Czech Koruna, Romanian Leu (RON) Seems To Be Overvalued Relative To Its Macro Fundamentals

ING Economics ING Economics 17.12.2022 08:04
Our conclusion is that, over recent years, the short-term fluctuations of CEE4 currencies have been driven predominantly by global factors, but medium-term trends have been strongly related to local fundamentals. In the current environment of elevated economic uncertainty and high inflation, this implies that economic policy affecting the fiscal position, the current account balance and inflation exerts a sizeable impact on the value of CEE4 currencies. Looking at the currencies case by case, it seems the Czech economy can afford the relative strength of CZK, though there might be signs of hot capital inflows playing a part in the recent appreciation. HUF weakness seems to reflect the macro fundamentals as well as the idiosyncratic risk premium and serve as a mechanism of maintaining competitiveness. By that logic, RON seems to be overvalued relative to its macro fundamentals, with weaker levels prevented by a more active central bank involvement on the FX market. At the same time, Romania is tactically benefitting from the stronger RON given lower imported inflation, and avoids higher financial costs related to the elevated share of FX public debt. Lastly, Poland’s fundamentals seem to be structurally closer to Czech fundamentals, but may have higher vulnerability to internal and international politics in the region. Read the article on ING Economics   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

A Very Low Difference In The Performance Between CEE4 And The Broader Set Of EMEA Currencies

ING Economics ING Economics 17.12.2022 08:04
GRL decomposition of trends – local is the most interesting Over the analysed period, the global factor was responsible for CEE4 currency depreciation against the USD of between -6% for RON and -10% for CZK (Figure 3). This element of the FX movement can be explained by the upward trend in the USD index of 7% over the period. We note the muted global influence on RON relative to other currencies in the group, which could be explained by its more tightly managed FX regime that aims to reduce RON short-term volatility. Regional factor resulted in a relatively small divergence between CEE4 currencies FX deviation between countries Global = most correlated Regional = relatively small role Local = main source of deviation Another observation is that the role of the regional factor was relatively small, standing at between 1ppt and 2ppt. This reflects a very low difference in the performance between CEE4 and the broader set of EMEA currencies over the analysed period. In our opinion, two opposing effects have been at play. On the one hand, CEE4 economies were quite overheated before the pandemic and provided a strong anticyclical policy response in reaction to Covid, which made them vulnerable to global inflation shock. Moreover, the fallout of the conflict in Ukraine caused an aversion to CEE4 assets, which undermined their currencies. On the other hand, EU membership makes CEE4 currencies less vulnerable to global risk compared to other EMEA currencies. Lastly, the local (country-specific) component was the main source of divergence in FX dynamics of CEE4 currencies. In the case of CZK, it made a positive 12ppt contribution, for PLN and RON it was responsible for a moderate -2ppt, but for HUF it knocked off 13ppt versus the dollar. Importantly, comparing the post March 2020 performance versus USD with the dynamics prior to the Covid outbreak, CZK has remained the strongest of the group, while HUF remained the weakest. That leads us to believe, that Covid was a global factor that pushed all currencies in the same direction, but at the same time made the local differences more visible and acute. Interpretation – making economic sense of domestic factors March Our view is that the divergent trends in the local component of CEE4 exchange rates are related to differences in macroeconomic fundamentals as well as the increased role of these fundamentals for FX markets in times of elevated economic uncertainty. This is illustrated by Figure 4, in which we collate a set of structural indicators relevant to understanding FX market developments. In our opinion, the arguments behind the relative strength of CZK are twofold. First, the Czech Republic is the most developed economy, both in terms of GDP per capita and the quality of institutions. It is the only CEE4 country classified by the IMF as an Advanced Economy rather than Emerging Economy. Second, the medium-term fundamentals of the Czech Republic are relatively sound. The international investment position and public debt are at sustainable levels, whereas inflation, albeit currently high, is forecast to return to target by 2025. For these reasons the Czech Republic has the highest credit rating among CEE4 economies and domestic fundamentals have been exerting a steady upward pressure on the value of CZK since the outbreak of Covid. When considering more forward-looking fundamentals, while having the lowest GDP growth rate in the group, the Czech Republic is somewhat insulated from potential external activity and current account shocks, among others thanks to the lowest share of the EU in exports (71%). The vulnerability of the current account from the imports side due to growth in energy prices seems not too high, given the moderate share of imports in the local energy mix. Also, there is lower evident dependence on the availability of EU funds, which is more of the case for the rest of the CEE4 group. Looking at the capital flows, there could have been an effect of hot capital inflows, as real estate prices seem to have been growing at elevated rates in recent years, meaning vulnerability of a reversal in the case of an economic downturn. Fluctuations in the CZK FX rate are not too relevant to the government given the low share of FX-denominated government debt (8%) and the declining non-resident share in gross public debt (30%). The local fundamentals for the relatively weak HUF are different and, in most cases, the opposite to the CZK. High levels of public and net foreign debt combined with fiscal and current account deficits6 potentially raise concerns about medium-term sustainability, especially in an environment of rising interest rates. This is reflected in the relatively low level of credit ratings issued by international credit agencies combined with a negative rating outlook. Apart from the above stock-flow issues, there are signals of inflation expectations de-anchoring, which is reflected in relatively high consensus inflation forecasts. Even though in the short-term upward inflation surprises usually lead to nominal FX appreciation, especially if they are accompanied by monetary policy tightening expectations, in the medium and long-term, high and persistent domestic inflation requires exchange rate depreciation to restore international price competitiveness. Our view is that for HUF, the latter channel dominated in 2022. Looking ahead, the risks of negative surprises on Hungary’s economic activity and finances are elevated, given the high dependence on the EU in terms of exports and financing (EU funds expected to be available for Hungary by 2027 are equivalent to almost 35% of its 2021 GDP, and are subject to political discussions), as well elevated dependence on non-EU energy imports. Also, Hungary has enjoyed even stronger capital inflow in the real estate market, meaning vulnerability to reversal. Local fundamentals of PLN and RON are sometimes closer to those for CZK and in other cases more similar to HUF Figure 4 also illustrates that the local fundamentals of PLN and RON, the mid-performers in terms of FX, are sometimes closer to those for CZK (eg, public debt) and in other cases more similar to HUF (eg, international investment position, sovereign ratings and outlook). Consensus forecasts for inflation in Poland and Romania in 2025 are slightly lower than in Hungary, but they are still above inflation targets of 2.5%. For these reasons, the impact of the local factor on PLN and RON has been broadly neutral. It can be added that for RON some of the market pressure on the FX market, related to Romania’s vulnerable fiscal and external positions as well as risky growth profile, could have been offset by the managed FX regime, which allows officials to protect the leu7. Moreover, Romania is the least dependent on energy commodity imports among CEE4 countries. From a forward-looking perspective, the mid-performers are facing challenges, such as Romania’s large twin deficit and therefore exposure to global downturn or Poland’s tensions with the EU and proximity to adverse geopolitical reality in the region. But at the same time, Romania’s lower energy import dependency and less hot real estate market, as well as Poland’s solid GDP growth trend and relatively stable structure of CA deficit8 could serve as mitigating factors. Read the article on ING Economics   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Forex Market Week Sum Up:The Overall Picture Of Major Currency Pairs Is Bearish

Kamila Szypuła Kamila Szypuła 17.12.2022 19:51
It was the most important week in 2022. Fed President Jerome Powell and ECB President Christine Lagarde reminded the markets that they are still committed to fighting inflation, rather than focusing on promoting economic growth. EUR/USD The pair ended the week at 1.0574, thus trading below $1.06. The close is similar to earlier this week, with the pair also trading above $1.05. Also on Monday it recorded a low of 1.0511. This week the most important event in the euro zone was the ECB's decision on interest rates. The central bank of the European Union made the same decision as the Fed and the Bank of England, i.e. it raised interest rates by 50 bp. But it was the president of the ECB who gave the euro strength. And on Thursday, after a hawkish statement, it reached its highest level of the week, hadel was close to 1.07 (1.0691 to be exact). A number of significant events took place in the European Union this week. The ECB meeting was adjourned; the remaining data must be resolved. Despite traders' expectations for a fall of 1.5-2.5%, industrial production fell by 2% in October. Instead of an increase of 10%, exactly as indicated by the first estimates of the index, inflation rose in November by 10.1%. The economic activity index in the manufacturing sector increased to 47.8, and in the services sector to 49.1. However, both indicators are still below the 50.0 threshold, so they cannot be considered positive at the same time. This week's macroeconomic reports from the EU seem to be disappointing. This problem has been around for a long time. In general, the euro continues to grow unreasonably, although it has already reached its peak. GBP/USD The GBP/USD pair started the week of December 12-16 at 1.2266. Then after the US data inflation traded between 1.2243-1.2300. The lowest level, similarly to the euro, was recorded by the cable pair at the beginning of the week, the lowest traded at 1.2217, and the highest at 1.2248 this week. The pair ended the week below $1.22 as fears of a recession increase. Overall, the British pound looks set to end the week under strong pressure against the US dollar, with weak economic data on Friday fueling fears of a recession in the national economy. Thursday's Bank of England rate hike of 0.5 percentage point pushed base rates to highs not seen since 2008 (3.5%).Markets interpreted the move as a dovish interest rate hike. The recent decision of the Bank of England revealed a three-way split of votes: six out of nine MPC members voted for a 50 bp rate hike, two members voted for no change, and the last member voted for another 75 bp rate hike. Recession fears are intensifying with prospects for the UK to be in recession for "an extended period" while inflation is expected to remain very high in the short term before falling sharply from mid-2023. Overall, the short-term outlook for the economy in the UK remain negative, which is starting to show in sterling now. AUD/USD The Aussie Pair started the week at 0.6780. The movements of the pair were similar to EUR/USD and GBP/USD. The pair recorded the lowest trade at 0.6678 and the highest at 0.6892. Ending the week at 0.6686. The Australian dollar was weakened last week after the US dollar posted an incredible rally amid growing fears of a recession. The Federal Reserve raised the interest rate by 50 basis points to a target of 4.25% - 4.50% on Wednesday. Read next: Assistance In Making Investment Decisions - Technical Analysis| FXMAG.COM Australia's unemployment rate remains at a multi-generational low of 3.4% after adding 64,000 jobs. jobs in November. This is in addition to the growing trade surplus from the previous week. The rest of the fundamental picture is a little mixed towards the end of the year, when building permits and retail sales data are disappointing. These figures appear to have been influenced by RBA interest rate hikes. USD/JPY USD/JPY started the week trading at 136.6790. The week's high is 138.15 and the low is 134.71. As you can see, the trade was very diverse and the price fluctuated rapidly. The pair ended the week at 136.69 Source: finance.yahoo.com, dailyfx.com, investing.com
Analysis Of The EUR/JPY Pair Movement

The USD/JPY Price May Move Sideways Today And Tomorrow

InstaForex Analysis InstaForex Analysis 19.12.2022 08:01
On Friday, the USD/JPY pair returned to the 135.38-137.12 trend line range after another false breakout above its upper line of 137.12. Earlier, such false exits were on December 12 and December 6. Monday opened with a downward gap of about 80 pips and despite the high upper shadow of today's candle, that gap has not closed. Maybe the price will reach the bearish target at 135.38 and then go back to 137.12 to close the gap. As a result, we expect the price to move sideways in the current range of 135.38-137.12 today and tomorrow. Further, according to the main scenario, the price will cross support at 135.38 and move towards the target of 133.33. The Marlin oscillator is in the negative territory, but if the price is still flat, then the oscillator signal line will go along the zero line. Or it will continue its gradual decline in the area of the downtrend, showing us the increasing prospect of an expected fall. On the four-hour chart, the price has settled under the balance and MACD indicator lines. The Marlin oscillator also looks settled under the zero line. We expect the gap to close and the price to return under these indicator lines. Next, we expect an attack on support at 135.38 Relevance up to 03:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330109  
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The GBP/USD Pair Is Generally Staying In The Downtrend Area

InstaForex Analysis InstaForex Analysis 19.12.2022 08:04
On Friday, the pound could not go past the support at 1.2155, but the Marlin oscillator settled under the zero line, which helps the price to settle under the support. After such consolidation, we are waiting for the price at the next target level of 1.1933. Correction from 1.1933 is likely, as the MACD indicator line is approaching, which will strengthen the support. On the four-hour chart, the price is consolidating at the support of 1.2155, having settled under the balance indicator line (red). The signal line of the Marlin oscillator is slightly rising as part of the correction, generally staying in the downtrend area Relevance up to 03:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330111
At The Close On The New York Stock Exchange Indices Closed Mixed

The US Stock Market Finished Trading On The Back Of Negative Dynamics

InstaForex Analysis InstaForex Analysis 19.12.2022 08:07
US stocks closed lower, Dow Jones down 0.85% The US stock market finished trading Friday lower on the back of negative dynamics from the sectors of utilities, consumer goods and oil and gas. Dow Jones At the close of the New York Stock Exchange, the Dow Jones fell 0.85% to a one-month low, the S&P 500 fell 1.11% and the NASDAQ Composite index fell 0.97%. Caterpillar Inc was the top performer among the components of the Dow Jones in today's trading, up 0.89% or 2.06 points to close at 232.72. Boeing Co rose 0.98 points (0.53%) to close at 184.70. Dow Inc rose 0.27 points or 0.55% to close at 49.80. The least gainers were American Express Company shares, which lost 3.92 points or 2.61% to end the session at 146.30. Nike Inc was up 2.36% or 2.56 points to close at 105.95 while McDonald's Corporation was down 2.06% or 5.61 points to close at 266.12.  S&P 500 Leading gainers among the S&P 500 index components in today's trading were Adobe Systems Incorporated, which rose 2.99% to 338.54, Meta Platforms Inc, which gained 2.82% to close at 119.43, and also shares of Universal Health Services Inc, which rose 2.49% to close the session at 135.83. The least gainers were shares of Ford Motor Company, which fell 6.98% to close at 12.12. Shares of Moderna Inc shed 6.74% to end the session at 193.29. Quotes of CarMax Inc decreased in price by 6.04% to 61.44. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Cosmos Holdings Inc, which rose 178.91% to hit 23.01, Nanthealth LLC, which gained 98.95% to close at 5.70, and shares of Trean Insurance Group Inc, which rose 91.51% to end the session at 5.97. Shares of Synaptogenix Inc became the least gainers, which decreased in price by 74.63%, closing at 1.20. Shares of Agrify Corp lost 69.87% and ended the session at 0.25. Quotes of Axcella Health Inc decreased in price by 63.08% to 0.16. Numbers On the New York Stock Exchange, the number of securities that fell in price (2161) exceeded the number of those that closed in positive territory (893), and quotes of 105 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,231 companies fell in price, 1,478 rose, and 188 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.92% to 22.62. Gold Gold futures for February delivery added 0.84%, or 15.05, to $1.00 a troy ounce. In other commodities, WTI futures for January delivery fell 2.34%, or 1.78, to $74.33 a barrel. Futures for Brent crude for February delivery fell 2.64%, or 2.14, to $79.07 a barrel. Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.37% to 1.06, while USD/JPY fell 0.78% to hit 136.68. Futures on the USD index rose by 0.23% to 104.44 Relevance up to 03:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/305334
The Euro May Gradually Climb To The Target Level

The EUR/USD Price May Settle Under Friday's Low

InstaForex Analysis InstaForex Analysis 19.12.2022 08:10
Last Friday, the euro lost 38 pips, leaving the target range of 1.0615/42. The euro was pulled down by the stock markets (S&P 500 -1.11%, Euro Stoxx 50 -0.83%) and rising European bond yields with the Greek (4.32% 10-year) and Italian (4.28% 10-year) government bonds leading the way. Of the peripheral eurozone countries, the highest yields are Polish bonds at 6.66%, but their yields have been consistently high since March, and in October they were over 8.5%. If things continue like this, and the European Central Bank plans to raise the policy interest rate by 0.50% at the next two meetings, then Italy and the peripheral eurozone can start a debt crisis again. The media is not yet sounding the alarm on this issue, but there are already discussions about it. After the Federal Reserve and the ECB meetings, the probability of the euro reaching the 1.0758/87 range, with a milder divergence (the pink dashed line on the daily chart), has fallen considerably. The euro is now aiming for 1.0470. The price will have to struggle with the MACD line on the weekly chart at 1.0385. The victory over it will confirm the euro's development according to the medium-term descending scenario and the next step under parity. On the four-hour chart, the price reached the MACD line and it is accumulating strength to overcome it. The Marlin oscillator is in the negative territory, it helps the price in this struggle with support. We wait for the price to settle under Friday's low at 1.0585 Relevance up to 03:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330113
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The GBP/USD Pair Moved Much More Steadily

Paolo Greco Paolo Greco 19.12.2022 08:13
On Friday, the GBP/USD currency pair moved much more steadily than it did on Thursday when it dropped by 250 points. Nevertheless, the downward trend persisted, and the price stayed below the moving average line, which is already a remarkable accomplishment given that the pair struggled to adjust for many weeks. A specific technical signal is available for purchase for the first time in a very long time. Remember that the pound has increased by 2,000 points over the past 2.5 months and that we have been anticipating a downward correction for the past three weeks. Such growth is unreasonable and illogical. At least last week, traders had the fortitude to reason through the fundamental background roughly. Remember that the Bank of England increased the rate by 0.5%, slowing the tightening of monetary policy. But if the Fed did it at a 4% rate, the BA would do it at a 3% level. If the Fed has been waiting for five successive drops in inflation, the BA hasn't even been waiting for the first one and has already started slowing the growth rate. Therefore, we think another increase of 0.75% could maintain the pound's upward trend; however, an increase of 0.5% can be viewed as "dovish," even though it is not. Whatever the central banks' last-week decisions were, the pound increased by 2,000 points in just 2.5 months. However, this justifies the current expectation of a 700–800 point decline. Furthermore, given that the growth factors for the pound have not increased recently, it is completely unclear how it will be able to expand over the long term. All of this operates like a "pendulum" without outside forces. The pendulum starts swinging weaker and weaker after you let go of it. Likewise, the pound. It has been moving downward for two years but has since increased by 2000 points. Logically, there should be a drop of 800-1000 points right now, followed by a 500-point rise. A period of consolidation will follow. This week, nothing will impact the market's mood. This week, there will be one more significant news in the UK than in the EU. The third quarter GDP report will be released in the final assessment on Thursday. The 0.2% q/q decline that traders are anticipating is not too bad. A response is unlikely to occur if there is no significant departure from the forecast. Additionally, this week in the US, there will be one more significant report than in the EU. Even then, it would be a great stretch. It is worthwhile to focus solely on Friday's reports on long-term use orders and personal income and expenditures of the American population. These reports are always labeled "important," but the response is uncommon. Therefore, no significant events will occur in the United States this week. There will only be supplemental reports. Therefore, nothing should stop traders from initiating the new "swing" of the pendulum that we discussed earlier. We don't see any way the pound can start to increase again this week. If this occurs, the British pound price will increase once more inexplicably. It makes no sense to attempt to predict it in this situation because there are no foundations for growth. Although the reverse consolidation above the moving average line will once more signal that options for opening long positions should be considered, we will continue to wait for a sharp decline. Over the previous five trading days, the GBP/USD pair has averaged 154 points of volatility. This value is "high" for the dollar/pound exchange rate. As a result, on Monday, December 19, we anticipate movement constrained by the levels of 1.1979 and 1.2289 to remain inside the channel. A round of upward correction will begin if the Heiken Ashi indicator reverses direction upward. Nearest levels of support S1 – 1.2146 S2 – 1.2085 Nearest levels of resistance R1 – 1.2207 R2 – 1.2268 R3 – 1.2329 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair began moving downward. Therefore, until the Heiken Ashi indicator appears, you should maintain sell orders with targets of 1.2085 and 1.1979. When the moving average is fixed above, buy orders should be placed with targets of 1.2329 and 1.2390. Explanations for the illustrations: Determine the present trend with the aid of linear regression channels. The trend is currently strong if they both move in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 01:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330107
The Euro May Attempt To Resume An Upward Movement

The Euro Will Soon Reverse The Two-Year Downward Trend

Paolo Greco Paolo Greco 19.12.2022 08:16
On Friday, the EUR/USD currency pair attempted to initiate a downward correction but was unsuccessful. The euro currency quotes continued to trade above the moving average line through the end of the day and the following week. Remember how, despite being ordinarily close by in recent weeks, the price could not even beat the moving in the strictest sense of the word. According to our assessment, this is already pushing the bounds of reality because, if things continue, the euro will soon reverse the two-year downward trend. The only option now is to hold out hope that the market will wake up and remember the pair's sales since this is impossible. If not corrective. Of course, there are such illogical periods as this one. All they need is experience. You'll recall that the pair was in a flat for about four months, which is also not the best choice. You have to accept that there is no logic to the current movements and that any fundamental or macroeconomic background is seen as favoring the euro. Technically speaking, there aren't any issues at all. It needs to be the right time to open long positions because a clear upward trend is at play. Since only the euro currency is increasing, you can only pay attention to statistics or current affairs at different times. Therefore, it is not advised to consider short positions even though the price is above the moving average. Keep in mind that particular technical signals must support any fundamental premise. If there are none, there is no need to attempt to "in advance" formulate the hypothesis. It is possible to skip the new week's preview. We review the first article's upcoming fundamental and macroeconomic events every week. However, there is little to say or write about at the moment. The only event on the EU calendar for the following five working days is a speech by ECB Vice-Chairman Luis de Guindos as of Monday. This one incident is unlikely to impact the market's mood. Moreover, the technical situation had stayed the same since last week, when there were more than enough significant events. Of course, there is always the possibility that after the weekend, the market will resume trading more logically after it has had a chance to process all the new information. Specifically, it will start the significant downward correction we have been anticipating for the past three weeks. Nevertheless, there is no point in considering the fundamental background because, in the first place, it does not exist, and, in the second, it will still have no bearing on how the pair moves. On the eve of a new week, we can only say that the outcomes of the meetings between the ECB and the Fed did not favor the euro. Formally, only the ECB announced the start of the QT program at the beginning of the following year, which was an unexpected "knight move." But if the BA and the Fed have already started similar programs for a long time, what about this decision is "hawkish"? We are interested in the relationship between the ECB and the Fed's decisions and the ECB's actions. The movement of the pair (whether the dollar or the euro is currently rising) is determined by this ratio. Even Christine Lagarde's comments about multiple 0.5% rate increases in the future have no special significance. Additionally, the Fed will keep raising the rate for several additional meetings. Additionally, for a considerable period, the Fed rate will be higher than the ECB rate, which should again favor the dollar rather than the euro. Therefore, the US dollar should increase no matter how you view it. It should be increased, even if only by 400–500 points. As of December 19, the euro/dollar currency pair's average volatility over the previous five trading days was 104 points, considered "high." So, on Monday, we anticipate the pair to fluctuate between levels of 1.0480 and 1.0687. An upward turn of the Heiken Ashi indicator will indicate a potential continuation of the upward movement. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: The EUR/USD pair is continuing its upward trend. With targets of 1.0687 and 1.0742 in the event of a price reversal from the moving average, we are now considering opening new long positions. Only after fixing the price below the moving average line with targets of 1.0498 and 1.0480 will sales become significant. Explanations for the illustrations: Determine the present trend with the aid of linear regression channels. The trend is currently strong if they both move in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day Relevance up to 01:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330105
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

EUR/USD Pair: The Probability Of Falling Down Is High

Paolo Greco Paolo Greco 19.12.2022 08:23
M5 chart of EUR/USD EUR/USD continued its sluggish decline on Friday. At the end of the day, it was still below the critical line, which provides grounds to expect that the euro will continue to fall to the target Senkou Span B line. So far, there are no grounds to assert that a new downtrend has begun. Some relatively important reports were released on Friday, but the market did not even work them out in a logical sense. For instance, the US services business activity indexes were much weaker than the previous month, falling far below the 50.0 level. But the US dollar was strengthening against the euro at that time. So the reports influenced the market sentiment, but they did it in a peculiar way. Generally speaking, if in the last weeks, we observed an unreasonable growth, now we may observe an unreasonable decline. Fortunately, there will be almost no news this week, so there should not be a conflict between the macroeconomic background and the pair's movement. At the same time, there is no guarantee that traders will not start buying again. There were enough trading signals on Friday and all of them were formed near the Kijun Sen line. Since none of these signals were correct, traders could work out only the first two. First, the pair bounced very crookedly from the critical line, so it bounced a bit more accurately. In the first case, it went up about 10 pips, in the second case it went up about 15 pips. Therefore, most likely, traders either closed both trades at zero, or received a minimal loss. However, a 10-15 point loss is obviously not a reason to get upset. COT report In 2022, the COT reports for the euro are becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now the net position of non-commercial traders is again bullish and strengthens almost every week. The euro is growing but a fairly high value of the net position may point to the end of the upward movement or at least, to a correction. During the given period, non-commercial traders opened 8,600 long positions, whereas the number of short positions rose by 8,500. Thus, the net positions fell by 100. Notably, the green and red lines of the first indicator have moved far apart from each other, which may mean the end of the ascending trend (which wasn't actually an uptrend because the upward movement of the last two and a half months fits under the "correction" category against the global downtrend). The number of long positions is 125,000 higher than the number of sell positions opened by non-commercial traders. Thus, the net position of the non-commercial group may continue to grow. However, the euro may remain unchanged. The overall number of short orders exceeds the number of long orders by 33,000 (711k,000 vs. 678,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD is still very high, though it is stuck below the critical line. So far, there is no certainty that it will continue to move down, though we have been waiting for it for several weeks. We think that the probability of falling down is high, but the market may well decide otherwise. This should be taken into account. On Monday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0592, 1.0736, 1.0806, as well as Senkou Span B lines (1.0442) and Kijun Sen (1.0623). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are no important reports or events scheduled for today in the EU and the US. And the pattern will remain the same all through this week. We believe this is a good opportunity for a bearish correction. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330101
The GBP/USD Pair May Trade Horizontally Today

GBP/USD Pair: According To COT Report, Sentiment Remains Bearish

Paolo Greco Paolo Greco 19.12.2022 08:26
M5 chart of GBP/USD GBP/USD continued to move down on Friday. In addition to business activity indices in the manufacturing and services sectors in the UK and the US, there was a report on British retail sales, which turned out to be weaker than forecast. So overall, the pound fell logically, but at the same time, not all the reports were worked out logically. During the day, there were many reversals, and the whole movement was more like a flat, than a downtrend. The week ended near the Senkou Span B line, which the bears will have to overcome this week if they are ready for a further decline. Failure to overcome this line could trigger the uptrend of the last two and a half months. There were a lot of trade signals on the 5-minute chart. The first sell signal near 1.2185 seemed profitable and was even duplicated by a rebound from the same level from below. The price fell to the Senkou Span B line and bounced from it, forming a buy signal. Therefore, it was possible to earn about 40 pips on the first trade. The buy signal was also profitable, because the pair returned to 1.2185 and settled above it. However, later the pair fell lower, where long positions should have been closed. The profit was another 40 pips. The new sell signal turned out to be a false one, which resulted in the loss of about 30 pips. The next buy signal was also negative, but Stop Loss broke even. All subsequent signals should not be processed, and the day ended with the total profit. COT report The latest COT report showed a decrease in bearish sentiment. During the given period, non-commercial traders opened 3,500 long positions and 1,000 short positions. The net position grew by about 2,500. This figure has been on the rise for several months. Nevertheless, sentiment remains bearish, and GBP/USD is on the rise for no reason. We assume that the pair may well resume the downtrend soon. Notably, both GBP/USD and EUR/USD now show practically identical movement. However, the net position on EUR/USD is positive and negative on GBP/USD. Non-commercial traders now hold 58,000 short positions and 32,000 long ones. The gap between them is still wide. As for the total number of open longs and shorts, the bulls have a 5,000 advantage here. Technical factors indicate that the pound may move in an uptrend in the long term. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD GBP/USD finally dropped below the Kijun-Sen line on the one-hour chart, but there is another important line on the way. The Senkou Span B might keep the uptrend, especially since the market has only been set up for buying just recently. If it crosses the Senkou Span B line, then we can count on a strong correction, which we have been waiting for a long time. On Monday, the pair may trade at the following levels: 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259, 1.2342, 1.2429-1.2458. The Senkou Span B (1.2120) and Kijun Sen (1.2281) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. There are no important events planned for Monday, neither in the UK, nor in the US. The key point will be the Senkou Span B line. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 01:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330103
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Analysis Of The Outlook On The Loonie Pair (USD/CAD)

InstaForex Analysis InstaForex Analysis 19.12.2022 08:29
If you pay attention to the daily chart, the USD/CAD commodity currency pair appears to be stuck in the weekly Resistance Orderblock area which is quite significant at 1.3702 where at the same time a Double Top pattern (Cyan circle) is formed which is also followed by a deviation between its price movement and the Awesome Oscillator indicator, in addition to the emergence the Ascending Broadening Wedge pattern is also strengthening if in the next few days The Loonie will be brought down to the level of 1.3225 but with a note that during the fall there was no significant upward correction movement that exceeded and penetrated above the 1.3750 level because if this level is successfully broken above, the decline scenario described previously will become invalid and cancel by itself. Relevance up to 02:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/115919
Credit squeezing into central banks – what next?

Today, The Euro (EUR) Is Expected That Volatility Will Be Lower

InstaForex Analysis InstaForex Analysis 19.12.2022 08:36
Analysis of transactions in the EUR / USD pair The recently released data on activity in the eurozone disappointed traders as it hinted at the possibility of recession next year. In addition, inflation rose to 10.1% in November, further strengthening the belief that the ECB will continue to raise rates, no matter what it takes. This put euro under pressure. There is a chance for a rebound today, but it is only after the IFO's report on business expectations, present situation and business climate in Germany. The three indices are projected to rise, which should restore bullish sentiment in the market. However, if the reports turn out weaker than expected, euro will slide further. Wage levels in the eurozone will not be of much importance in determining the market's direction. There are also no statistics in the afternoon, so expect volatility to be lower and for euro to trade within the channel. For long positions: Buy euro when the quote reaches 1.0615 (green line on the chart) and take profit at the price of 1.0661. Growth could occur after a strong report from the IFO. But remember that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0582, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0615 and 1.0661. For short positions: Sell euro when the quote reaches 1.0582 (red line on the chart) and take profit at the price of 1.0545. Pressure will increase if Germany reports weak economic statistics. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0615, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0582 and 1.0545. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader Relevance up to 07:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330139
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

FX Volatility Remains Subdued, The Investor Mood Seems To Be Leaning Towards A 2023 Slowdown

ING Economics ING Economics 19.12.2022 08:54
FX volatility remains subdued as financial markets lick their wounds ahead of year-end. This week's data calendar is relatively light in the G10 space, with a focus on the Bank of Japan (BoJ) meeting, US housing data and confidence readings on both sides of the Atlantic. We'll also see central bank meetings in Hungary and the Czech Republic, too   USD: Risk rolls over Looking across asset markets the investor mood seems to be leaning towards a 2023 slowdown. Bond markets remain bid, while both equity and commodity markets are rolling lower after a decent rally in October and November. Investors will continue to focus on China as a potential engine of growth in 2023, but for the time being, we have yet to see any material outperformance of the Chinese renminbi or local equity markets. This suggests that the risk of a disorderly exit from zero-Covid policies for the time being trumps the reopening story and perhaps Beijing's re-orientation to growth policies. That leaves the market to focus on the tight(er) monetary policy being implemented around the world. Last week's hawkish shift from the European Central Bank has dented eurozone and global growth prospects for 2023 and leaves the dollar in a rather mixed position. On the one hand, the ECB wants tighter monetary conditions - including a stronger euro. On the other, the Federal Reserve is not done with its tightening cycle and a global slowdown typically is not a good story for a pro-cyclical currency like the euro. Events this week look unlikely to break new ground on this story. In the US, we will see a variety of housing data (all expected to be soft), some consumer confidence data and on Friday the PCE personal income, spending and price data. The November core PCE deflator is expected at a subdued 0.2% month-on-month - in line with the softer CPI prints of October and November. None of this looks likely to provide much support to US bond yields, where the 10-year Treasury is hanging onto the 3.50% area by its fingernails. This all tends to suggest that DXY risks sinking back to the 104.00/104.10 area this week. Chris Turner EUR: Expect comparisons to 2007 Last week's hawkish tilt from the ECB wll invariably draw comparisons to the 2007 period, where EUR/USD enjoyed a strong rally. The Fed had concluded its tightening cycle at 5.25% in the summer of 2006 and the ECB was playing catch-up - a catch-up which resulted in former ECB President Jean-Claude Trichet's final and ill-fated rate hike to 3.25% in July 2008. Coincidentally, expectations now are that the ECB will also be taking the policy rate to 3.25% next summer. The difference this time is that global growth is much weaker now than in 2007 (5-6%) and we suspect high energy prices will continue eating into the eurozone's external position. On the agenda today is the Germany Ifo business confidence index for  December. Last week's release of the German PMI data showed a modest pick-up in business confidence - albeit still in recessionary territory. Today's Ifo data is expected to see the expectations component bounce up to 82 from 80 - still very low. Any upside surprise could give EUR/USD a modest boost in thin markets.  We doubt EUR/USD will break new ground this week, although it is hard to rule out a move back up the 1.0700 area. Chris Turner CEE: Last NBH and CNB meetings of the year  The CEE region will remain interesting until the last moment of the year. On Tuesday, the Hungarian National Bank (NBH) will hold its last meeting. The NBH has made it clear on several occasions that the temporary and targeted measures, introduced in mid-October, will remain in place until there is a material and permanent improvement in general risk sentiment. Although we've seen some progress here, we don't think enough has changed to trigger an adjustment in the monetary policy's hawkish "whatever it takes" setup. Nevertheless, Hungary will also be in the spotlight because of other milestones in the EU story. The European Council approved Hungary's recovery plan and suspended cohesion funds for 2021-2027 under the rule of law mechanism. The next step should be the signing of a partnership agreement between Hungary and the EC on the absorption of the cohesion funds. However, it is not clear how and when this will take place. The Czech National Bank (CNB) will hold its last meeting of the year on Wednesday. We expect it to be a non-event, with rates and FX regimes unchanged. The new forecast will not be released until February. Board members have been very open in recent days and hence there is minimal room for any surprises. The traditional dovish majority has publicly declared that interest rates are high enough and continue to choose the "wait and see" path. The governor also confirmed this week that the central bank will continue to defend the koruna. At the same time, another board member confirmed that the CNB has not been active in the market for some time. So it is hard to look for anything new here either.  In the FX market, as we mentioned last week, we believe that the global story has little positive to offer to the region this year. On the other hand, the deterioration in equity market sentiment late last week should have a delayed impact on CEE FX this week. Moreover, domestic rates with the exception of Hungary cannot support FX, so we should see some correction of previous gains in the region this week. We do not think central bank meetings will impact FX much and so the main story will be the Fed and ECB effect from last week. We see the Czech koruna as the most vulnerable as it hit new lows against the euro on Friday. A correction back to 24.250 EUR/CZK should thus not be a problem. On the other hand, we think the Hungarian forint can still benefit from the progress in the EU story for a while and get below 405 EUR/HUF. The Polish zloty remains trapped in the 4.680-700 EUR/PLN band, and we see it rather on the upper side for this week.  Frantisek Taborsky GBP: Sterling will be the main victim of euro strength The ECB would clearly like a stronger euro to help out with its battle against inflation and it was telling at last week's ECB press conference that President Christine Lagarde was keen to highlight that the ECB would be tightening longer than the Fed. If the ECB is to be successful in getting the euro higher, then the euro will need to rally against those currencies with major weights in the trade-weighted euro index. The biggest weights in this index are the US dollar (16%), the Chinese renminbi (14%) and then the British pound (12%). Of the three, we would say that sterling is the most vulnerable given that the Bank of England (BoE) is closer to ending its tightening cycle than the Fed and that the UK's large current account deficit leaves sterling vulnerable in a global slowdown. We suspect EUR/GBP finds good demand under 0.87 now and we remain happy with a 0.89 target for 1Q23. Chris Turner Read this article on THINK
Saxo Bank Podcast: The Bank Of Japan Meeting And More

The Japanese Authorities May Be Considering A Policy Review In 2023 | Elon Musk Is Seeking New Investors For Twitter

Saxo Bank Saxo Bank 19.12.2022 09:01
Summary:  A chorus of hawkish Fed speak and weakening US PMI data, together with global tightening concerns elevating further last week, continued to weigh on risk sentiment. The Japanese yen will remain in focus amid BOJ policy review chatter as the central bank meets this week. Musk’s Twitter saga continues, weighing further on Tesla. China’s reopening concerns also remain as the Covid waves spreads rapidly, but a steady economic growth focus by the authorities is seen. Oil and gold start the week being bid. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) retreated for the third day on concerns about the Fed’s rate path in 2023 On Friday, the U.S, stock market continued to slide for the third day in a row since Fed Chair Powell’s hawkish leaning comments on the post-FOMC presser on Wednesday. Remarks from several other Fed officials reiterating that the Fed may have a long way to go and may need to raise rates beyond the 5.1% peak projected added to the risk-off sentiment. S&P 500 shed 1.1% and Nasdaq 100 declined 0.9%. All sectors within the S&P 500 lost, with real estate, consumer discretionary, and utilities falling the most. Ford Motor (F:xnys) was the biggest losing stock within the S&P500. The automaker dropped nearly 7% on Friday after it announced a price increase for its electric truck due to rising material costs and supply chain issues. Tesla (TSLA:xnas), falling 4.7%, was the second biggest laggard with the Nasdaq 100, following Moderna (MRNA:xnas) which declined 6.7%. Adobe, gaining 3% after reporting an earnings beat, was the best performer within Nasdaq 100, followed by Meta (META:xnas) which rose 2.8% on an analyst upgrade. US Treasury yield curve (TLT:xnas, IEF:xnas, SHY:xnas) steepened as the 2-year yield fell and the 10-year yield rose The 2-year notes were well bid and finished the Friday session 6bps richer at 4.18%. The 2-year notes are now yielding not only less than the 3-month Treasury bills but also the lower bound of the Fed Fund target rate. Softer than expected S&P Global US manufacturing as well as services PMI added fuel to the demand for the front end of the Treasury curve. Hawkish comments from the Fed’s Williams, Daly, and Mester might have contributed to the selling in the long end of the curve. Yields on the 10-year notes rose 4bps to 3.48%. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland Chinese stocks had a morning session on Friday. Hang Seng Index opened lower on the back of tumbling overseas markets overnight despite the positive news from the US accounting regulatory body removing the delisting risk of Chinese companies listed in the U.S. bourses for now. Stocks had a rally on market chatter of reopening of the border between Hong Kong and the mainland earliest next month before the gains waned and the Hang Seng Index was 0.4% higher. The front page editorial at the mouthpiece People’s Daily this morning is upbeat about growth in China but it does not catch much attention from investors. Leading Chinese property developers outperformed, gaining 2% to 6%.  In A-shares, CSI300 was modestly lower, driven by profit-taking in semiconductor names and weaknesses in autos. Real estate and educational services outperformed. In the evening, a readout was released setting out the key results of the Central Economic Work Conference. FX: Dollar starts the new week on a weaker footing as JPY gains on 2023 policy review speculations The US dollar ended last week lower again, albeit modestly, with majority of weakness against the NOK. EURUSD also took a brief look above 1.07 on ECB hawkishness but is heading below 1.06 this morning as peripheral spreads remain a concern and continue to cast doubts on how far ECB’s hawkishness can run. USDJPY had a volatile week as a drop below 135 was not maintained despite US yields remaining capped. A fresh bout of strength in coming to JPY this morning on reports of Japan PM Kishida considering a tweak in BOJ’s 2% inflation goal next year (read below). GBPUSD also reversed back below 1.2200 after a look above 1.2400 last week. AUDUSD traded close to 0.67 to start the new week, with one eye on RBA minutes due this week but another on China reopening delays resulting from a large number of workers calling in sick. Crude oil (CLF3 & LCOG3) prices advance on China’s growth push and US refilling SPR Oil prices started the week on a firmer footing, with WTI rising towards the $75/barrel mark and Brent heading back towards $80. While there are unconfirmed reports of massive number of cases and fatalities in China from the spread of Covid, the government’s official message continues to stress upon the need to expand consumption as the key economic priority for 2023. This helps paint a better demand outlook for oil, as global demand slowdown concerns continue to mount. Moreover, it was reported that the US is starting to replenish the Strategic Petroleum Reserve (SPR), starting with a 3-million barrel, fixed-price purchase.   What to consider? Hawkish Fed speak continues A number of Fed speakers on Friday continued to highlight the case for higher-for-longer inflation as investors give too much weight to peaking inflation in the US. Fed’s Daly (non-voter in 2023) said she was prepared to hold peak rates for more than 11 month if necessary, and highlighted the core services ex-housing inflation which is still quite elevated. Mester (non-voter in 2023) said she expected the Fed to hike more than its median forecast, and the Fed will need to maintain rates for an extended period once hikes are done. Williams (2023 voter) said it is possible that Fed hikes more than terminal rate forecast. US flash PMIs send warning signals Flash December PMIs for the US slumped to fresh lows, sending more warning signals about the economic momentum going into 2023. Manufacturing PMI came in at 46.2, below last month’s 47.7 and the expected 47.8, while the services PMI receded to 44.4 from 46.2 previously. Markets have however understood the Fed’s message on hiking rates into a possible recession, and do not take bad news as good news anymore. Japan PM Kisihda hinting at altering inflation goal for central bank Reports suggested that Japan PM Kishida plans to revise a ten-year-old accord with the BOJ and will consider adding flexibility to the agreement's 2% price goal. Kishida will discuss the matter with the next central bank governor, who'll take office in April. Furthermore, some more comments from officials this morning continued to signal that the authorities may be considering a policy review in 2023, and more hints are awaited at the BOJ meeting tomorrow. Ex-BOJ Deputy Governor Yamaguchi said that the BOJ must stand ready to tweak YCC next year if Japan's economy can withstand overseas economic risks, while also warning that once inflation expectations become entrenched, it is very hard to control them. China’s Central Economic Work Conference emphasized economic stability and had a conciliatory tone towards platform companies The Chinese Communist Party held its annual Central Economic Work Conference (CEWC) on Dec 15 and 16 to formulate China’s macroeconomic policy frameworks for 2023. According to the readout released, the CEWC emphasized policy priorities as being economic stability and high quality of development. Fiscal policies will be expansionary and monetary policies will be forceful and precise. The focus is however more on quality than quantity and the choice of words tends to imply “best effort” rather than hard targets. Mainland economists are expecting the GDP growth target, which will not be released until the two-session meetings in March 2023, to be around 5% for 2023. While there will be supportive measures to ensure stability in the housing markets, the rhetoric of “housing is for living in, not for speculation” is once again in the readout. Domestic consumption is a key focus. In industrial policies, weak links in manufacturing technology, energy, mining, agriculture, new energy, AI, biomanufacturing, green and low carbon, quantum computing, and the digital economy are priorities. Encouragingly, the CEWC removes last year’s “preventing the disorderly growth and expansion of capital” from its readout this year and instead pledges “support to platform enterprises in leading development, creating employment, shining in competing globally” and “support the development of the private sector and private enterprises”. EU considering cutting the proposed natural gas price The EU nations are likely to discuss cutting the gas price cap by almost a third today after the EUR275 per megawatt-hour was proposed last month. As energy crisis continues to threaten a fresh surge in inflation and growth slowdown in the region, it is also stretching government budgets to maintain popularity. But this will eventually be inflationary again, as price caps hardly work effectively. Elon Musk hinting at stepping down from Twitter Elon Musk is seeking new investors for Twitter at the same price he paid when he took the company private in October, Semafor reported. Musk is asking on Twitter the question that “should I step down as head of Twitter? I will abide by the results of this poll”. He said he is going reverse his prior decision to suspend the Twitter accounts of several journalist and reinstate them based on the results of a Twitter survey. Meanwhile, Musk's actions are weighing heavily on Tesla shares — and the selloff may continue.   For a global look at markets – tune into our Podcast. Source: Market Insights Today: Fed’s hawkish speak; BOJ’s policy review hints – 19 December 2022 | Saxo Group (home.saxo)
The USD/CHF Pair Is Likely To Decline More

The USD/CHF Pair Is Expected To Weaken Further

TeleTrade Comments TeleTrade Comments 19.12.2022 09:18
USD/CHF remains pressured near intraday low, prints the first daily loss in three. Multiple supports stand tall to challenge sellers even as looming bear cross on MACD signal further downside. 200-HMA, two-week-old descending trend line guard immediate upside. USD/CHF holds lower ground near the intraday bottom as bears struggle to retake control, after a two-day leave, during early Monday. That said, the Swiss Franc (CHF) pair prints mild losses near 0.9320 by the press time. The quote’s latest weakness could be linked to the U-turn from a fortnight-long descending resistance line, as well as the 200-HMA. Also keeping the USD/CHF bears hopeful is the looming bear cross on the MACD indicator. However, the downside moves remain unconvincing to the pair bears unless the quote stays beyond the previous resistance line from November 30, close to the 0.9300 threshold by the press time. Also challenging the USD/CHF bulls is an upward-sloping trend line from the last Wednesday, around 0.9280 at the latest. In a case where the quote remains bearish below 0.9280, the odds of witnessing a downturn toward the monthly low near 0.9215 can’t be ruled out. On the flip side, buyers need to keep the reins past 0.9350 to mark their dominance. In doing so, the quote should stay past the aforementioned immediate resistance line and the 200-HMA. Following that, a run-up towards the 0.9400 threshold and then to the monthly high 0.9470 can’t be ruled out. USD/CHF: Hourly chart Trend: Further weakness expected
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

Analysis Of The Movement Of The Kiwi Pair (NZD/USD)

TeleTrade Comments TeleTrade Comments 19.12.2022 09:21
NZD/USD prints mild gains to keep Friday’s recovery moves between 50-SMA and 100-SMA. Impending bull cross on MACD, sustained bounce off monthly support line keep buyers hopeful. 200-SMA, monthly resistance line act as additional trading filters. NZD/USD grinds higher towards 0.6400, around 0.6385 by the press time, as buyers flirt with the 50-SMA during early Monday. In doing so, the Kiwi pair defends the previous day’s rebound from the 100-SMA, as well as the recovery moves from an upward-sloping support line from November 17. Given the impending bull cross on the MACD, as well as the quote’s repeated hesitance in breaking the 100-SMA, NZD/USD is likely to overcome the hurdle of 0.6392 level comprising the 50-SMA. Following that, the run-up could aim for the 0.6400 and the 0.6500 thresholds before the monthly resistance line, around 0.6535 at the latest, could challenge the bulls. In a case where NZD/USD manages to keep the reins past 0.6535, June’s top at around 0.6575 and the 0.6600 round figure will be in focus. Meanwhile, the 100-SMA level surrounding 0.6345 precedes the one-month-long ascending support line, mentioned previously, to restrict the immediate downside near 0.6335. It’s worth noting, however, that a downside break of the 0.6335 support could quickly drag NZD/USD prices towards the 200-SMA level surrounding 0.6200. However, any further downside appears bumpy. NZD/USD: Four-hour chart Trend: Further recovery expected
China's Ninth Straight Month of Gold Holdings Increase; Oil Resilient Despite Russian Tanker Incident; Dollar Supported by Bond Supply Concerns

USD/INR Pair: Traders Seem Cautious Ahead Of Wednesday’s Monetary Policy Meeting Minutes Of The Reserve Bank Of India

TeleTrade Comments TeleTrade Comments 19.12.2022 09:23
USD/INR pares intraday gains around six-week high, stays depressed of late. US Dollar remains depressed on softer US PMIs, ignore hawkish Fedspeak. Market players expect continuous grind between 82.70 and 83.00. RBI Minutes, US Core PCE Price Index in focus. USD/INR remains pressured around 82.70, keeping the previous day’s pullback from a one-month high during early Monday. In doing so, the USD/INR appears mostly directionless, despite printing mild losses, as traders seem cautious ahead of Wednesday’s monetary policy meeting Minutes of the Reserve Bank of India (RBI). That said, the US Dollar weakness appears the key catalyst behind the Indian Rupee (INR) pair’s latest losses, as it snaps a two-day uptrend amid a sluggish start to the week. That said, the US Dollar Index (DXY) prints the first daily loss in three, down 0.20% intraday near 104.55, amid cautious optimism in the market. In doing so, the DXY struggles to justify the recently hawkish comments from Federal Reserve Bank of Cleveland President Loretta Mester and New York Federal Reserve President John Williams. The reason could be linked to Friday’s downbeat prints of the preliminary US PMIs for December, as well as the Fed’s 0.50% rate hike. It’s worth noting that trading sentiment in India appears sour as Reuters mentioned, “The Indian rupee is expected to weaken marginally this week, with the focus on US economic data and broad moves in the dollar, while government bond yields could see an upside given the caution that has set in recently.” Elsewhere, talks surrounding the Bank of Japan’s (BOJ) end of ultra-loose monetary policy and China’s readiness for heavy stimulus, amid mixed concerns over the Covid conditions, challenge the market’s moves amid a lack of major data/events. Looking forward, USD/INR traders should pay attention to Wednesday’s RBI Meeting Minutes for clear directions. “The RBI raised the repo rate by 35 basis points to 6.25% at that meeting, in which Governor Shaktikanta Das highlighted inflation concerns,” mentioned Reuters. The pair buyers may want to confirm the inflationary fears in this week’s RBI Minutes. On the other hand, the Fed’s preferred inflation gauge, namely Friday’s US Core Personal Consumption Expenditures (PCE) - Price Index for November, expected 4.6% YoY versus 5.0% prior, will be crucial for the USD/INR pair traders. Technical analysis An eight-day-old ascending trend channel defends USD/INR bulls between 82.60 and 83.15.
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The Downside Moves Of The GBP/JPY Appear To Have Limited Room

TeleTrade Comments TeleTrade Comments 19.12.2022 09:29
GBP/JPY fades bounce off two-week low as it approaches the key support. 100-DMA, five-week-old ascending support line restricts short-term downside. Bearish MACD signals, clear break of 50-DMA favor sellers. GBP/JPY bears keep the reins, fading the day-start bounce off 165.20, ahead of Monday’s London open. That said, the cross-currency pair’s daily closing below the 50-DMA joins the bearish MACD signals to favor GBP/JPY bears. However, a convergence of the 100-DMA and an upward-sloping trend line from November 11, near 164.70, appears a tough nut to crack for the bears. In a case where the prices drop below 164.70, November’s low near 163.00 could act as an extra filter towards the south before highlighting the 160.00 psychological magnet. It should be noted, however, that October’s low near 159.75 could challenge the GBP/JPY bears afterward. Alternatively, recovery moves appear elusive unless the quote provides a daily closing beyond the 50-DMA level of 167.15. In that case, a five-week-old horizontal resistance area near 169.00-169.20 will act as the key hurdle to the upside. Also acting as an extra filter is the 170.00 round figure. Overall, GBP/JPY remains on the back foot as it breaks key support and has MACD as a backup to call the bears. However, the downside moves appear to have limited room unless providing a daily closing below 164.70. GBP/JPY: Daily chart Trend: Further downside expected
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The USD/CAD Pair's Short-Term Movements Seem To Be Limited

TeleTrade Comments TeleTrade Comments 19.12.2022 09:32
USD/CAD struggles to defend bears during the first daily loss in three. Oil price initially cheered hopes of China stimulus, softer US Dollar before latest consolidation. Inflation is the key but holiday mood could restrict short-term moves. USD/CAD consolidates intraday losses as it grinds higher around 1.3680, following a downbeat start to the week. That said, softer US Dollar and optimism surrounding Crude Oil seemed to have contributed to the Loonie pair’s first daily loss in three before the latest paring of moves amid a light calendar and mixed concerns. US Dollar Index (DXY) picks up bids from intraday low but prints 0.15% daily loss around 104.60 as traders struggle for clear directions. The reason could be linked to the hawkish Fedspeak and softer US PMIs for December. That said, Federal Reserve Bank of Cleveland President Loretta Mester and New York Federal Reserve President John Williams recently favored higher rates. On the other hand, the US S&P Global Manufacturing PMI dropped to 46.2 from 47.7 in November, as well as the market expectation of 47.7. Further, S&P Global Services PMI declined to 44.4 in December's flash estimate from 46.2 in November and market expectation of 46.8. It should be noted that the WTI crude oil prices, Canada’s main export retreats to $75.00 after an initial run-up to $75.93. Even so, the black gold snaps a two-day downtrend amid hopes of firmer demand from China and the US decision to buy back oil for its state reserves. On the contrary, global recession woes underpin the US Treasury yields and challenge equity traders. In addition to the mixed signals and holiday mood could also be held responsible for the USD/CAD pair’s latest moves. Moving on, the Bank of Canada's (BOC) Consumer Price Index (CPI) Core for November, expected 6.4% YoY versus 5.8% prior, will be important for the USD/CAD traders ahead of the Fed’s preferred version of inflation, namely Friday’s US Core Personal Consumption Expenditures (PCE) - Price Index, expected 4.6% YoY and 5.0% prior. Technical analysis A seven-day-old horizontal resistance area near 1.3700 inside a rising wedge bearish formation, established since early November, restricts short-term USD/CAD moves.
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

The Situation Around Inflation And The US Dollar May Have An Impact On The Aussie Pair

TeleTrade Comments TeleTrade Comments 19.12.2022 09:36
AUD/USD struggles to defend bulls during the first positive day in three. Risk appetite remains mixed as hopes of more stimulus from China, Covid woes test sentient amid light calendar. Hopes of Australia-China diplomatic ties also underpin AUD/USD rebound. Reserve Bank of Australia Meeting Minutes, Federal Reserve’s preferred inflation data will be crucial for Australian Dollar traders. AUD/USD seesaws around the 0.6700 round figure as a short-term moving average defends the Australia Dollar buyers during early Monday morning in Europe. In doing so, the Aussie pair portrays the cautious optimism in the market amid sluggish moves and a light calendar. However, broad US Dollar weakness allows the pair buyers to cheer the first daily gains in three. China-linked news favor AUD/USD buyers. Be it a likely restoration of the Aussie-Sino ties or China’s readiness for more stimulus, AUD/USD has reasons to defend the latest recovery moves. In this regard Reuters said, “Australian Foreign Minister Penny Wong will visit China this week, Prime Minister Anthony Albanese said on Monday, signaling an improvement in diplomatic relations between Beijing and Canberra.” The news also stated that China President Xi Jinping and his senior officials on Friday pledged to shore up China's battered economy next year by stepping up policy adjustments to ensure key targets are hit. Alternatively, doubts over China’s economic growth and the reliability of the latest easing in Covid policy seem to challenge the AUD/USD pair buyers. It’s worth noting that the People’s Bank of China's (PBOC) defense of easy money policy also keeps the Australia Dollar firmer, due to the strong trade links between Australia and China. US Dollar fails to cheer hawkish Federal Reserve talks US Dollar Index (DXY) picks up bids from intraday low but prints 0.15% daily loss around 104.60 as traders struggle for clear directions. The reason could be linked to the hawkish comments from the US Federal Reserve (Fed) officials and softer US PMIs for December. Federal Reserve Bank of Cleveland President Loretta Mester and New York Federal Reserve President John Williams recently favored higher rates. On the other hand, the US S&P Global Manufacturing PMI dropped to 46.2 from 47.7 in November, as well as the market expectation of 47.7. Further, S&P Global Services PMI declined to 44.4 in December's flash estimate from 46.2 in November and market expectation of 46.8. AUD/USD traders await Reserve Bank of Australia Meeting Minutes, United States Inflation data In its latest monetary policy meeting, the Reserve Bank of Australia (RBA) announced 25 basis points (bps) rate hike and showed readiness for more. However, the RBA Governor Philip Lowe appeared less convinced of the hawkish move and hence the AUD/USD pair traders will pay more attention to confirm the dovish bias over the RBA, which in turn could weigh on the Australian Dollar. On the other hand, the Federal Reserve’s (Fed) preferred version of inflation, namely Friday’s US Core Personal Consumption Expenditures (PCE) - Price Index, expected 4.6% YoY and 5.0% prior, will be important for the AUD/USD pair traders. Should the inflation number appear softer, the US Dollar may have more downside to trace, which in turn could weigh on the Aussie pair. Additionally, Australia’s Mid-Year Economic and Fiscal Outlook will be important as economic fears gain momentum, which if confirmed could weigh on the AUD/USD prices. AUD/USD: Technical analysis AUD/USD bears mark another retreat from the 200-SMA, after an early November rebound from the stated key Simple Moving Average (SMA). Not only the U-turn from the 200-SMA, around 0.6680 by the press time, but an impending bull cross on the Moving Average Convergence and Divergence (MACD) indicator also keeps the AUD/USD pair buyers hopeful. However, a successful run-up beyond the previous weekly start of around 0.6730 appears necessary for the Australia Dollar buyers. Following that, a one-week-old horizontal hurdle surrounding 0.6815 appears as the last defense of the AUD/USD pair bears, a break of which could propel the quote towards a convergence of the five-week-old ascending trend line and the monthly top, close to the 0.6900 round figure. On the flip side, a break of the 200-SMA level surrounding 0.6680 could fetch the Australia Dollar towards the late November swing low near 0.6585. In a case where the AUD/USD bears break the 0.6585 support, the November 08 peak of 0.6551 appears the key challenge before activating a south run towards the previous monthly low near 0.6272. AUD/USD: Four-hour chart Trend: Recovery expected
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

Demand For The Euro Is Still Weak, But There Is A Chance For A Return To December Highs

InstaForex Analysis InstaForex Analysis 19.12.2022 10:10
Euro has every chance of rising as recent data from the US hints at a possible recession in the country by next year. Activity indices in the US remained in negative territory, below 50 points, which is very bad. The first one that was hurt was the real estate market, followed by the service sector and the manufacturing sector. The only one that is still holding on is the labor market, but last week Fed Chairman Jerome Powell said he will make use of wages to fight inflation. Wages have a very large impact on inflation as they are a particularly large item of expenditure. According to Powell, the labor market will be the key to a further rise in inflation, so something must be done about it. Right now, wages are rising much higher, which is not in line with the Fed's policy of returning to 2% inflation. The key question for Fed officials is whether the sharp rise in US wages over the past 18 months is a one-off action, or whether, after companies have adjusted to labor shortages, higher cash wages will be the norm. If this is the case, Powell can maintain a tight monetary policy. Forecasts published by the Fed last week already suggested that the key rate for next year could hit 5.1%, which is higher than the expected value. This led to the stock market crashing down. Labor shortages, which were caused by coronavirus-related constraints, have provided more opportunities for employers and workers to raise wages as competition for hiring intensified. But in most cases, households have barely kept up with the rising cost of living. As the figures show, total employer payroll spending increased by 5% in the 12 months to September, up from 3.7% a year earlier. Although earlier wages were not a big part of the story, now that companies are trying their best to retain employees, it is likely that the central bank will take a closer look at what is happening in the labor market and not just regulate its level. Talking about the forex market, demand for euro is still weak, but there is a chance for a return to December highs if the European Central Bank retains its hawkish monetary policy. However, traders need to keep the quote above 1.0660 because only by that will euro hit 1.0700 and 1.0740. In case of a decline below 1.0580, pressure will surge, which will push the quote to 1.0540 and 1.0490. In GBP/USD, trading is taking place within the sideways channel, so buyers need to break above 1.2200 in order for the quote to rise to 1.2250 and 1.2301. But if sellers take control of 1.2130, pound will fall to 1.2070 and 1.2000.
National Bank of Poland Meeting Preview: Anticipating a 25 Basis Point Rate Cut

According To Central Banks Tight Monetary Policy Will Continue In 2023

InstaForex Analysis InstaForex Analysis 19.12.2022 10:20
Volatility has been extremely high for financial markets last week due to the Fed, Bank of England and ECB meetings and the release of economic data. All of them caused sell-offs in risky assets, primarily because nothing new has happened and nothing substantial has been said. The ECB and the Fed raised interest rates as expected, while the latest statistics were in line with expectations. Most central banks also noted that tight monetary policy will continue in 2023. Basically, last week's events have brought back the expectations that a widespread recession could start as early as next year. This led to another stock market crash and a rise of dollar to recent highs. However, the decline is likely just a correction, not a full-scale downward trend as demand could return if market sentiment improves. That could also lead to a weaker dollar and more stable treasury yields during the last two weeks of the year. Forecasts for today: AUD/USD 0.6680 is a key support level in AUD/USD. If market sentiment improves today, the pair could bounce up to 0.6800, then go to 0.6915. USD/JPY Even if USD/JPY is bullish, a rise in risk appetite could prompt the pair to rebound to 138.00.   Relevance up to 06:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330121
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The GBP/USD Pair Has Clearly Worked Out The Pair's Buying Strategy

Peter Jacimovic Peter Jacimovic 19.12.2022 10:29
Central banks-issuers of G10 currencies seemed to have conspired by raising the main interest rates by 50 bps, but the weakest link was the BoE. Andrew Bailey's statement that inflation in Britain has reached its peak and two MPC members who voted to keep the cost of borrowing at the same level provoked the second best daily EURGBP rally of the year. Sterling weakened against the U.S. dollar by 1.5%, against the Swiss franc by 1%. Dynamics of Central Bank Rates Despite the slowdown in consumer prices from 11.1% to 10.7% in November, it was premature to talk about victory over inflation. And although the head of the central bank tried in every possible way to smooth over the phrase about the peak of CPI with statements about the stability of inflationary pressure and about further decisive measures to tighten monetary policy, he failed. Futures market lowered its forecast for the repo rate ceiling to 4.52% by August, British bond yields declined, and GBPUSD quotes collapsed. While the Fed and the ECB signaled that they were ready to raise rates higher than investors expected, the Bank of England, on the contrary, did not convince that it could reach the peak predicted by the derivatives market. Should we be surprised at the weakening of the pound? GBPUSD could continue its pullback lower as investors adjust their BoE borrowing cost expectations for 2023, Credit Agricole said. Dynamics of expectations for the repo rate In comparison, the ECB has made it clear that it is going to add 50 bps to the deposit rate one or more times in the future, causing derivatives to raise their ceiling forecast to 3.7%. The Fed, in its forecasts, openly stated that the cost of borrowing is likely to rise to 5.25%. Different rates of monetary restriction pushed up the EURGBP quotes and dropped the GBPUSD pair. Curiously, the UK and the Eurozone economies are considered weak, but the latest data signal their greater resilience than previously thought. The ECB used this to support the euro, the BoE ignored it, sinking the pound. An additional driver of the weakening of sterling against the U.S. dollar was a portion of disappointing statistics for the United States, including retail sales, industrial production and business activity. The markets saw the specter of a recession in this, began to sell risky assets and buy safe haven assets, which accelerated the pullback of GBPUSD. As long as global risk appetite continues to fall, and the Bank of England does not begin to repent of its mistake about the peak of inflation, the pair will continue to be under pressure. Technically, on the daily chart, the GBPUSD has clearly worked out the pair's buying strategy from 1.2325, followed by a reversal and the formation of short positions on the rebound from the pivot point at 1.2425. The inability of the "bears" to overcome the support at 1.2065–1.2075 is a reason for profit taking. On the contrary, its successful assault will allow to increase the shorts in the direction of 1.198 and 1.184 Relevance up to 06:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330119
Bank of England raised the interest rate, UK unemployment data go out tomorrow

EUR/USD Pair Looks Reasonably Well Supported | The Japanese Yen Galloped Higher In The Morning

Kamila Szypuła Kamila Szypuła 19.12.2022 14:04
The US dollar fell on Monday as improved market sentiment pushed stocks and riskier currencies up. The US Dollar Index (DXY) - which tracks the dollar against a basket of six major currencies - fell 0.2% to 104.580 The euro gained 0.4% to $1.06260 , while sterling strengthened 0.7% to $1.22195. However, both remained lower than their levels before last week's central bank moves. EUR/USD The EUR/USD pair started trading above $1.06 this week. The technical outlook for the euro remains positive and reasonably well supported. The single currency appreciated against the US dollar The latest publication of the German Ifo shows that the sentiment in Europe's largest economy "improved significantly" at the end of the year. The business climate rose to 88.6 from 86.4 in November, breaking the index's six consecutive declines, while the expectations reading hit 83.2, up from 80.2 the previous month. GBP/USD And EUR/GBP GBP/USD generally trades in the range of 1.2170 - 1.2200 during the day. The intraday high was above 1.2240. Currently, the cable pair is trading in the range of 1.2170- 1.2180 The British pound crept back toward the previous week's six-month high against the US dollar on Monday, days after the Bank of England (BoE) raised its benchmark interest rate to its highest level since 2008. The Bank of England made its ninth consecutive interest rate hike on Thursday, raising interest rates by 50 basis points (bps) to 3.5% as the central bank battled double-digit inflation. Read next: Russian Drones Attacked Kyiv Again | Most respondents do not want Musk| FXMAG.COM The euro fell 0.1% against the pound to 86.94 pence. The single currency hit a month-high against the pound sterling on Thursday after decisions by the BoE and the European Central Bank (ECB). ING analysts believe the pound sterling could be vulnerable against the euro, and their target is to move to 89p in the first quarter of 2023. USD/JPY The Japanese yen galloped higher amid illiquid trading conditions on Monday morning on news of a possible change in the Bank of Japan's (BoJ) monetary policy targets. The Bank of Japan currently has a prime interest rate of -0.10% and maintains yield curve control (YCC), setting a range of +/- 0.25% around zero for Japanese government bonds (JGB) for up to 10 years. The BoJ and the People's Bank of China are the only two major central banks with loose monetary policies. Much of the rest of the world is tightening financial conditions to deal with uncomfortably high and volatile inflationary pressures. The BoJ meeting will take place tomorrow, but at this stage the market does not expect any changes. USD/JPY has been in a downtrend since it peaked at 151.95 on the day of the BoJ intervention. At the end of last week, the price moved towards the upper band of the channel but was unable to sustain the move above it. The downtrend may continue to resist, currently at 137.45. Looking at the chart of the pair, you can see the strengthening of the yen against the us dollar. The pair returned to trading around $135 but is now trading above $136, meaning the yen's strength was short. AUD/USD The uplifting Australian dollar is trading slightly higher against the US dollar this Monday. This comes after China announced its intention to stimulate the economy with loose monetary policy and fiscal support. Looking at the chart, it is clear that the beginning of the week for Aussie is strong. Comparing to the close, the can pray increased significantly and is now trading above $0.67. Source: investing.com, dailyfx.com, finance.yahoo.com
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

On The New York Stock Exchange, Most Of Securities Fell In Price

InstaForex Analysis InstaForex Analysis 20.12.2022 08:00
At the close on the New York Stock Exchange, the Dow Jones fell 0.49% to a one-month low, the S&P 500 fell 0.90%, and the NASDAQ Composite fell 1.49%.  Dow Jones The leading performer among the Dow Jones index components in today's trading was Walgreens Boots Alliance Inc, which gained 0.27 points (0.69%) to close at 39.32. Chevron Corp rose 1.16 points or 0.69% to close at 169.88. JPMorgan Chase & Co rose 0.77 points or 0.60% to close at 130.06. The least gainers were Walt Disney Company, which shed 4.30 points or 4.77% to end the session at 85.78. Nike Inc was up 2.74% or 2.90 points to close at 103.05, while Home Depot Inc was down 1.86% or 6.01 points to close at 317. 33.  S&P 500  Leading gainers among the S&P 500 index components in today's trading were NRG Energy Inc, which rose 1.58% to 31.54, Wells Fargo & Company, which gained 1.53% to close at 41.82. as well as Quest Diagnostics Incorporated, which rose 1.48% to end the session at 151.45. The least gainers were Warner Bros Discovery Inc, which shed 6.66% to close at 9.25. Shares of Under Armor Inc A shed 6.01% to end the session at 9.54. Quotes of CarMax Inc decreased in price by 5.45% to 58.09. NASDAQ The leading gainers among the components of the NASDAQ Composite in today's trading were Madrigal Pharmaceuticals Inc, which rose 268.07% to hit 234.83, Axcella Health Inc, which gained 165.27% to close at 0.43, and also shares of Soleno Therapeutics Inc, which rose 103.86% to end the session at 1.85. Shares of Cosmos Holdings Inc became the drop leaders, which fell in price by 67.01%, closing at 7.59. Shares of Pingtan Marine Enterprise Ltd shed 11.72% to end the session at 0.58. Quotes of Schmitt Industries Inc decreased in price by 44.88% to 0.46. Numbers On the New York Stock Exchange, the number of securities that fell in price (2222) exceeded the number of those that closed in positive territory (876), while quotes of 90 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,698 companies fell in price, 1,051 rose, and 177 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.93% to 22.41. Gold Gold futures for February delivery lost 0.21%, or 3.85, to hit $1.00 a troy ounce. In other commodities, WTI crude for February delivery rose 1.85%, or 1.38, to $75.84 a barrel. Futures for Brent crude for February delivery rose 1.45%, or 1.15, to $80.19 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.21% to 1.06, while USD/JPY rose 0.19% to hit 136.95. Futures on the USD index practically did not change 0.00% to 104.33 Relevance up to 03:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/305503
The AUD/USD Pair’s Downside Remains Off The Table

Suddenly The AUD/USD Pair Resumed Strengthening

InstaForex Analysis InstaForex Analysis 20.12.2022 08:01
In the midst of volatility and participation in the market which is starting to decline ahead of the upcoming Christmas and New Year holidays, AUD/USD seems to be showing a weakening of the rally it is currently undergoing on the daily chart where this can be seen from the appearance of: 1. Ascending Broadening Wedge Pattern. 2. The Appearance of Rising Wedge Pattern, 3. Deviations occur between price movements and the CCI indicator. 4. Price movements that move below the 200-period Moving Average serve as a pretty good dynamic resistance. Based on the four facts above then AUD/USD in the next few days has the potential to depreciate where the 0.6586 level will be the main level to be tested. If this level is successfully broken, the 0.6171 level will be the next target to be tested, but all of this will become invalid if it is on its way to these levels. suddenly AUD/USD resumed strengthening above the 0.6894 level. Relevance up to 02:00 2022-12-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/116021
The AUD/USD Pair’s Downside Remains Off The Table

Suddenly The AUD/USD Pair Resumed Strengthening - 20.12.2022

InstaForex Analysis InstaForex Analysis 20.12.2022 08:01
In the midst of volatility and participation in the market which is starting to decline ahead of the upcoming Christmas and New Year holidays, AUD/USD seems to be showing a weakening of the rally it is currently undergoing on the daily chart where this can be seen from the appearance of: 1. Ascending Broadening Wedge Pattern. 2. The Appearance of Rising Wedge Pattern, 3. Deviations occur between price movements and the CCI indicator. 4. Price movements that move below the 200-period Moving Average serve as a pretty good dynamic resistance. Based on the four facts above then AUD/USD in the next few days has the potential to depreciate where the 0.6586 level will be the main level to be tested. If this level is successfully broken, the 0.6171 level will be the next target to be tested, but all of this will become invalid if it is on its way to these levels. suddenly AUD/USD resumed strengthening above the 0.6894 level. Relevance up to 02:00 2022-12-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/116021
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

On 4H Chart, The AUD/USD Price Is Still Conducting A Wide Range Consolidation

InstaForex Analysis InstaForex Analysis 20.12.2022 08:08
The Australian dollar spent Monday between the lower limit of the local ascending channel and the resistance level of 0.6730. If the aussie was willing to break out of yesterday's general trend of consolidating world currencies, commodities, which increased slightly in price, did not allow it to do so. This morning, AUD/USD is trying to attack the lower limit of the channel. Going beyond this area will coincide with crossing yesterday's low at 0.6684. The nearest target is the support level of 0.6642. Then 0.6590, which the MACD line is approaching. On the four-hour chart, the price is still conducting a wide range consolidation below 0.6730. The minutes from the Reserve Bank of Australia meeting showed the central bank's intention to suspend the easing cycle at the next meeting in February due to the uncertainty of further economic prospects. Also, the People's Bank of China kept key lending rates unchanged, which kept the Australian currency in the shadow of pessimism. As a result, I expect the bears to win and the price to be at 0.6590 Relevance up to 03:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330230
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The GBP/USD Price Continues To Look At The Downtrend

InstaForex Analysis InstaForex Analysis 20.12.2022 08:11
The markets started the week with rising risk aversion, continuing the trend that started in the second half of last week. US stock index S&P 500 fell by 0.90%, but European indices still managed to close the day in the green zone. Yields on U.S. government bonds rose. On 5-year securities from 3.62 (Friday's close) to 3.72%. The British pound closed the day near the opening level of 1.2155. This morning, the price continues to look closely at the downward movement, the descending Marlin oscillator shares this intention. The target is 1.1933. On the four-hour chart, the price spent two days under the balance indicator line, indicating a consolidation before an impulsive downward movement. Consolidation was supported by the target level of 1.2155 (low of May 13), now the price has crossed this level. The reversal of the signal line of the Marlin oscillator suggests that the downward movement will progress today. Relevance up to 03:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330232
The Euro To US Dollar Instrument Did Not Change In Value

The EUR/USD Pair's Price Will Move To The Target Level

InstaForex Analysis InstaForex Analysis 20.12.2022 08:13
Yesterday, EUR/USD tried to move past the upper limit of the 1.0615/42 range, but as a result, the price closed the day below the lower limit of the range, which confirmed that the euro settled below 1.0615. It is still necessary to wait for the Marlin oscillator's transition into the negative area, and then the price will move to the target level of 1.0470. On the four-hour chart, the price is held by the MACD indicator line. Yesterday, there was an attempt to go past it. This was marked by the price testing 1.0576 (low of the day), when the euro crosses this level, it will start to move to the target level of 1.0470 (low of April 28). The Marlin oscillator is developing on the lower half of the four-hour chart, in the area of the downtrend.   Relevance up to 03:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330234
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

EUR/USD Pair: The Only Option Is To Wait For The Correction

Paolo Greco Paolo Greco 20.12.2022 08:16
On Monday, the EUR/USD currency pair resumed trading. This is not at all surprising considering that the entire first trading day of the week was devoid of any significant fundamental developments or macroeconomic publications. The odd thing was that, in contrast to last week, when there was simply something to pay attention to, the pair displayed only moderate volatility and no discernible trend movement. Additionally, there is nothing of note this week, so it won't surprise us if the euro/dollar pair moves slowly and completely ineffectively throughout the week. Here, it's important to keep in mind that it's December 20. In other words, the New Year and the entire "set of holidays" are still less than two weeks away. Although the market doesn't always go on vacation two weeks before the New Year's holidays, volatility can significantly drop simply because many traders will leave the market. The graphic below demonstrates how volatility has decreased over the last few weeks. If we ignore the two days last week when the pair gained 145 points, then the pair now gains, on average, 70–80 points per day. And the graph unmistakably demonstrates how volatility is decreasing as the New Year's holiday draws near. There was no fundamental background going back to Monday. Given that it was delivered a few days after the ECB meeting, we do not consider Luis de Guindos' speech to be significant. Later on, we'll discuss it, but only within the parameters of the form. Technically speaking, the pair is currently close to the moving average. At the very least, this movement must be overcome to determine the start of a potential strong downward correction, which we have been watching for several weeks. But not just any victory, but self-assurance. In theory, the pair had overcome significant challenges in recent weeks, "if only by some kind of." We keep emphasizing that the most recent round of the euro's growth can be deemed 70% unjustified. The price was only able to fluctuate by 100–150 points in the previous month. As a result, the only option is to wait for the correction. The stakes will go up, says Luis de Guindos. In theory, the message of the ECB Vice-Chairman's speech is already clear. He only reported "unreal" news to the market. Of course, Christine Lagarde and her "deputy" speak frequently, and their rhetoric is consistent throughout each speech. As a result, we cannot claim that de Guindos' speech was significant or had an impact on the market's mood. Mr. de Guindos added that he was unable to predict how high the ECB rate would ultimately rise. In other words, de Guindos omitted to respond to the current currency's most crucial query. Let's discuss why this query is the most crucial. Since one decline does not constitute a trend, the ECB started to slow down the pace of monetary policy tightening even though inflation had not yet started to decline. As a result, it has already taken a backward step in the battle against inflation. Everything is fine if we are referring to the fact that the European regulator will simply increase the rate "to the bitter end" at a slower rate. We have bad news for the euro currency if it raises the rate with an eye toward the problematic EU nations. Consequently, if de Guindos had stated the target clearly, it would have been possible to deduce certain information from which to base a trading plan for the upcoming weeks. However, he remained silent, so nobody knows if the rate will increase after one more meeting or after 21. We continue to think that given the current situation, the euro must simply begin adjusting, so we are watching for the moving average line to cross and the euro to decline. As of December 20, the euro/dollar currency pair's average volatility over the previous five trading days was 105 points, which is considered "high." So, on Tuesday, we anticipate the pair to fluctuate between 1.0515 and 1.0725 levels. A potential continuation of the upward movement will be indicated by an upward turn of the Heiken Ashi indicator. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance levels R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: The EUR/USD pair is continuing its upward trend. With targets of 1.0725 and 1.0742 in the event of a price reversal from the moving average, we are currently thinking about new long positions. No earlier than fixing the price below the moving average line with targets of 1.0515 and 1.0498 will sales become relevant. Explanations for the illustrations: Determine the present trend with the aid of linear regression channels. The trend is currently strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones Relevance up to 05:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330240
The Market May Continue To Buy The Pound (GBP) This Week

GBP/USD Pair: The Long-Term Downward Trend Has Most Likely Ended

Paolo Greco Paolo Greco 20.12.2022 08:21
On Monday, there was no desire to move the GBP/USD currency pair. Since there was not a single significant event or publication in the UK or the USA on this day, as we have already stated, this market behavior should not be surprising. Additionally, the holidays of Christmas and the New Year are drawing near, so a flat might become available on the market soon. The pound did not exhibit the expected movements last week, when there were numerous events and reports. In general, only one day stands out as being particularly volatile: Thursday, when the pair lost 250 points. Every other day was "passed by the register." We now have a clear signal for the potential start of the fall, which we have been waiting for three weeks, but it is important to note that the price is still fixed below the moving average line. The approaching New Year's holiday may also cause a delay in putting this scenario into action. In theory, there are no concerns or questions raised by the current upward trend as a whole. Check it out for yourself: every subsequent price peak and minimum is higher than the preceding one. The previous local low was not changed despite Thursday's 250-point drop. As a result, the pair can quickly resume the development of an upward trend, which has now generated a lot of inquiries. We have stated numerous times that in just 2.5 months, the pound has increased by 2,000 points. Whatever the fundamentals, which were not always in the pound's favor, it is still a lot for such a short time. We can only conclude that the long-term downward trend has most likely ended in light of this growth. You may recall that we stated that strong trends end with a swift and forceful movement in the opposite direction. The pair should not, however, continue to move exclusively in one direction for the foreseeable future, even in the absence of corrections. What are the chances that the pound will have next year? Let's be clear: starting in 2023, neither the pound nor the dollar is expected to grow significantly. In the first half of the year, the rate situation should "settle down," and the market will no longer be affected by the thing that made it trade actively in 2022. A lot will also depend on the geopolitical situation in Ukraine, Nicola Sturgeon's ability to hold the promised independence referendum, new economic shocks to the British economy, and the Bank of England's ability to fight off inflation. As sad as it may be, geopolitics ultimately determines the fate of the pound; however, other factors should not be discounted. The pound has already increased by 50% since it fell over the previous two years. Consequently, we don't think it will be able to maintain strong growth over the following 12 months. However, there are currently no fresh, potent factors that could support the US dollar. There is no need to wait for strong dollar growth because the Fed and Jerome Powell have already said that the rate will only be raised 2-3 more times. In general, we think the pound's situation can now be characterized as a "pendulum." First, there should be a long and powerful fall, then a half-rise, and finally a half-fall, or by 800-1000 points, to the vicinity of the 1.1400 level. The pair can then start to consolidate, which involves moving 500–600 points in each direction while frequently switching the direction of movement. As a result, there should be a downward pullback first, after which it will be possible to wait for a new wave of growth. Since only genuinely minor events are scheduled in the UK and elsewhere this week, there is nothing to look forward to. Next week, however, will be genuinely festive. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 159 points. This value is "high" for the dollar/pound exchange rate. Thus, we anticipate movement inside the channel on Tuesday, December 20, with movement being constrained by levels of 1.2020 and 1.2338. A round of upward correction is indicated by the Heiken Ashi indicator's upward reversal. Nearest levels of support S1 – 1.2146 S2 – 1.2085 Nearest levels of resistance R1 – 1.2207 R2 – 1.2268 R3 – 1.2329 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair began moving downward. Therefore, until the Heiken Ashi indicator appears, you should maintain sell orders with targets of 1.2085 and 1.2020. When the moving average is fixed above, buy orders should be placed with targets of 1.2329 and 1.2338. Explanations for the illustrations: Determine the present trend with the aid of linear regression channels. The trend is currently strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones. Relevance up to 05:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330242
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Trend Ot The EUR/USD Pair May Change To A Flat

Paolo Greco Paolo Greco 20.12.2022 08:23
M5 chart of EUR/USD EUR/USD continued its sluggish decline on Monday. It is particularly visible on the one-hour chart. The pair reversed several times, which made it inconvenient to trade. But now we are close to the Christmas and New Year's holidays, so the trend may change to a flat. Basically, there was no fundamental or macroeconomic reason for the pair to show the movements it did. Calendars of events of the European Union and the US were empty. So I conclude that the correction continues, but the very nature of the current movement may be quite unfavorable for us. I don't know if the flat will begin today, but at the same time, volatility has significantly decreased lately. Consequently, traders will also become less active and will start to leave the market quietly before the holidays. Speaking of trading signals, yesterday was quite unfavorable for obvious reasons. The first buy signal, breaking through the 1.0623-1.0637 area, turned out to be false, and the price was up by 15 points, which gave traders a chance to place the Stop Loss to breakeven. This was followed by a sell signal around the same area, after which the pair reached the nearest target level of 1.0581, which made it possible to earn about 20 pips. You could also use the buy signal near 1.0581, the price went back to the critical line, so traders could gain 20 pips more. In general, the day was not that bad, but at the same time the pair can go flat, which is fraught with false signals and losing trades. COT report In 2022, the COT reports for the euro are becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now the net position of non-commercial traders is again bullish and strengthens almost every week. The euro is growing but a fairly high value of the net position may point to the end of the upward movement or at least, to a correction. During the given period, non-commercial traders opened 8,600 long positions, whereas the number of short positions rose by 8,500. Thus, the net positions fell by 100. Notably, the green and red lines of the first indicator have moved far apart from each other, which may mean the end of the ascending trend (which wasn't actually an uptrend because the upward movement of the last two and a half months fits under the "correction" category against the global downtrend). The number of long positions is 125,000 higher than the number of sell positions opened by non-commercial traders. Thus, the net position of the non-commercial group may continue to grow. However, the euro may remain unchanged. The overall number of short orders exceeds the number of long orders by 33,000 (711k,000 vs. 678,000). H1 chart of EUR/USD EUR/USD is still in a high position on the one-hour chart, and it has hardly settled below the critical line. So far, we're not sure whether it will continue to move down, though I have been waiting for it to do so for several weeks now. I believe that there is a high probability that it will fall, but the market may think otherwise. Also, keep in mind that the New Year is less than 2 weeks from now, and volatility may drop significantly and the movement may turn into a flat. On Tuesday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0736, 1.0806, as well as Senkou Span B (1.0550) and Kijun Sen (1.0630). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are no important reports or events scheduled for today in the EU and the US. And the pattern will remain the same all through this week. I believe that this is a good opportunity for a bearish correction, but the market may think otherwise... What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate     Relevance up to 05:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330236
The Cabel Market (GBP/USD Pair) May Trade Relatively Flat This Week

The Cabel Market (GBP/USD Pair) May Trade Relatively Flat This Week

Paolo Greco Paolo Greco 20.12.2022 08:25
M5 chart of GBP/USD On Monday, GBP/USD spent the entire day moving sideways. We can't say that volatility was "at zero", but still, the closer Christmas and New Year holidays come, the more it decreases. Volatility was around 125 points on Monday. There were several reversals during the day, which had absolutely nothing to do with macroeconomics or fundamentals, because there were neither of those. The price did not settle below the Senkou Span B line, therefore, the pound will not fall further for the time being. The pair may trade relatively flat this week and probably until the New Year. So far, the lines of the Ichimoku indicator are still strong, but if the flat continues for several more days, they will become weaker. In any case, GBP needs to cross the area below the bottom of the Ichimoku cloud in order to continue moving down. As for the trading signals, almost all of them were formed near 1.2185. And, since all but the fourth turned out to be false, traders could try to work out only the first two. After the sell signal, the price could not pass even 20 points in the right direction, so the short position was closed with a small loss. After the buy signal, it went up about 40 pips, but failed to reach the target level of 1.2259, so the trade most likely closed at Stop Loss at breakeven. The last signal to work out was a rebound from the Senkou Span B line, which took a 30 pips profit as GBP returned to 1.2185. COT report The latest COT report showed a decrease in bearish sentiment. During the given period, non-commercial traders opened 3,500 long positions and 1,000 short positions. The net position grew by about 2,500. This figure has been on the rise for several months. Nevertheless, sentiment remains bearish, and GBP/USD is on the rise for no reason. We assume that the pair may well resume the downtrend soon. Notably, both GBP/USD and EUR/USD now show practically identical movement. However, the net position on EUR/USD is positive and negative on GBP/USD. Non-commercial traders now hold 58,000 short positions and 32,000 long ones. The gap between them is still wide. As for the total number of open longs and shorts, the bulls have a 5,000 advantage here. Technical factors indicate that the pound may move in an uptrend in the long term. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD could not cross the Senkou Span B line at the first attempt. Therefore, the downtrend seems to persist, but paused for the time being. The pair can also go flat. If GBP manages to cross the Senkou Span B line, then we can count on a stronger downward movement, which I have been waiting for a long time. On Tuesday, the pair may trade at the following levels: 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259, 1.2342, 1.2429-1.2458. The Senkou Span B (1.2120) and Kijun Sen (1.2282) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. There are no important events planned for today, neither in the UK, nor in the US. The key point will be the Senkou Span B line. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group. Relevance up to 05:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330238
Nasdaq 100 Faces Bearish Breakdown Below Ascending Wedge and RSI Momentum Indicator

Demand For US Currency (USD) Increased As A Result Of The Fed's Monetary Policy Decision

InstaForex Analysis InstaForex Analysis 20.12.2022 08:30
A recession in the second half of 2022 was widely discussed. Overall, the entire year has proven to be very full of noteworthy events. Unfortunately, not all of them had the plus sign. The currency market, however, is unconcerned with the type of signal that one event or another had. We trade up if "plus" and down if "minus." Only the movement's direction is up for debate. The ongoing military conflict between Russia and Ukraine took up the majority of the first half of the year. Not because there aren't any battlefield events anymore, but rather because they no longer qualify as "shock" content, the media has recently stopped covering them all. Despite how absurd it may sound, the world is already accustomed to the military conflict in Ukraine, especially considering that it is not the first such conflict to occur since the Second World War. The dollar actively increased during the first half of the year against the backdrop of market anti-risk sentiment. Demand for US currency increased as a result of the Fed's aggressive interest rate hikes. Together, these two elements gave the dollar strong support. However, by the end of the year, when it became apparent that the conflict in Ukraine was taking on the appearance of being a protracted one that could last for years, the European Union and the United States would not cave to Russia and would continue to support Ukraine, and that sanctions on both sides, despite hurting the economies of both, did not alter either side's position, the interest in the conflicts around the world started to wane a little. The market has already stopped retaliating violently when one of the parties makes a move on the battlefield or when missiles are fired at cities, military installations, storage facilities, or infrastructure. No one is surprised anymore by the recession. The USA, the UK, and the European Union are the most likely locations. The only remaining query is how durable and strong. Despite this, the market is no longer concerned about it now that the issue has already been thoroughly explored. Additionally, economic growth is no longer interesting because it is obvious that all economies will experience a slowdown. Only inflation is still up for debate. Since inflation is declining quickly and, more importantly, steadily, the United States is in a leading position in this area. However, this is also detrimental to the dollar because the Fed is finding it harder and harder to justify raising interest rates. As a result, demand for the euro and the pound may remain high over the next three to six months because the ECB and the Bank of England will need to raise their interest rates faster than the Fed. This presumption, however, does not eliminate the requirement to first construct a corrective set of waves and only then to construct a new upward section of the trend. I currently view this scenario as the primary one. I conclude from the analysis that the upward trend section's construction has grown more intricate and is almost finished. As a result, I suggest making sales with targets close to the estimated 0.9994 level, or 323.6% Fibonacci. Although there is a strong likelihood that the upward portion of the trend will become even more extended and complicated, there is currently a signal to turn lower. The construction of a new downward trend segment is predicated on the wave pattern of the pound/dollar instrument. Since the wave marking permits the current construction of a downward trend section, I am unable to advise purchasing the instrument. With targets around the 1.1707 mark, or 161.8% Fibonacci, sales are now more accurate. Wave e is likely finished, though it could take on an even longer form Relevance up to 06:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330244
The US Dollar Index Price Is Looking Higher From Here Soon

The Bulls Of US Dollar Index Should Remain In Control

InstaForex Analysis InstaForex Analysis 20.12.2022 08:32
Technical outlook: The US dollar index dropped through the 103.35 lows during the early Asian session on Tuesday before pulling back sharply. The index is seen to be trading close to 114.15 at this point in writing as the bulls are looking to push through the 105.50 initial resistance. The index has tested the backside of its resistance trend line at 103.56, which acts as strong support now. The US dollar index has rallied swiftly through the 104.50 high after printing a low close to 103.00 over the last week. Furthermore, the price has now taken out its initial resistance trendline and is trading into the buy zone. Ideally, the bulls should remain in control from here and push prices through 105.50, 107.00 and higher in the next few trading sessions. The US dollar index has got enough momentum to push through 110.50 in the near to medium term. If prices break above 110.50, it could confirm further upside towards 114.70 and higher as the bulls remain in control. On the flip side, a bearish turn from 110.50 might indicate that the index is heading further downward below 103.00 going forward. It is looking higher from here in the near term though. Trading idea: Potential bullish turn against 102.00 Good luck!   Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305533
Technical Outlook Of The EUR/JPY Pair Movement In Short Term

Technical Analysis Of The Euro To Japanese Yen Pair

InstaForex Analysis InstaForex Analysis 20.12.2022 08:36
EUR/JPY is unfolding the scenario according to expectations. After a temporary recovery in wave B to 146.73, we saw a strong decline as wave C took over. The ideal target for wave C is seen at the origin of the ending diagonal near 133.00. In the short term, we see resistance at 142.70. If broken, a retest of the former support line of the ending diagonal near 143.80 could be seen before renewed downside pressure towards the 133 target. Relevance up to 07:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305541
India: Reserve Bank hikes and keeps tightening stance

Analysis Of The USD/INR Pair: Pair Remains Bullish

TeleTrade Comments TeleTrade Comments 20.12.2022 09:10
USD/INR picks up bids inside fortnight-old bearish chart pattern. Immediate resistance line, bearish MACD signals test recovery moves inside rising wedge. 50-SMA, looming bull cross on MACD restrict immediate downside. Slower grind to the north more likely amid firmer RSI, sustained trading beyond the key SMAs. USD/INR picks up bids to snap a two-day south run as the Indian Rupee (INR) pair prints mild gains around 82.80 during early Tuesday morning in Europe. In doing so, the Indian Rupee pair bounces off the 50-SMA, as well as the weekly support line, near 82.60 by the press time. However, bearish MACD signals and a downward-sloping resistance line from Friday, close to 82.85 challenge the USD/INR bulls. Following that, the upper line of the stated rising wedge bearish chart formation near 83.10 will be on the USD/INR bull’s radar. Overall, USD/INR remains bullish but the upside room appears limited. Meanwhile, a clear break of the 82.60 support confluence including the 50-SMA and a one-week-old ascending trend line could quickly drag the USD/INR bears toward the 200-SMA level surrounding 81.80. In a case where the USD/INR pair remains bearish past 81.80, the monthly low near 81.00 and November’s bottom surrounding 80.35 will gain the market’s attention. If the USD/INR bears dominate past 80.35, the 80.00 psychological manget should act as the last defense of the bulls. USD/INR: Four-hour chart Trend: Limited upside expected
The USD/CAD Pair Has The Strong Downside Momentum

Crude Oil Prices Significantly Affect The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 20.12.2022 09:14
USD/CAD picks up bids to reverse the week-start losses. US Dollar benefits from the BOJ-inflicted losses in bond, stock markets. Oil price weaken amid economic fears surrounding China. Canada Retail Sales, US housing data eyed for fresh impulse. USD/CAD clings to mild gains around 1.3700 as the US Dollar reverses the intraday losses heading into Tuesday’s European session. The Loonie pair’s run-up could also be linked to the downside move of Canada’s main export item, namely WTI crude oil. That said, the US Dollar Index (DXY) picks up bids to pare recent losses around 104.50 as the Treasury bond yields rally on the Bank of Japan’s (BOJ) surprise. Recently, the BOJ tweaked its policy to widen the Yield Curve Control (YCC) measures while keeping the monetary policy unchanged. Also underpinning the US Dollar’s latest rebound could be the economic fears surrounding China, as well as the globe. Behind the moves could be the World Bank’s cut in China’s economic forecasts as well as the hawkish actions of the major central banks to tame inflation, especially when the recession fears are already looming. However, comparatively less hawkish comments from the Fed officials join softer US PMIs to challenge DXY bulls. Elsewhere, WTI takes offers to refresh intraday low near $75.50, down half a percent at the latest. The European leaders’ agreement on the oil price cap for Russian energy exports also seems to exert downside pressure on the black gold prices. Amid these plays, S&P 500 Futures and the Asia-Pacific stocks print losses while the US 10-year Treasury yields rise for the third consecutive day to refresh the monthly peak near 3.70%, at 3.67% by the press time. Looking forward, the risk-aversion wave may help USD/CAD buyers ahead of the Canadian Retail Sales for October, expected -0.3% versus 0.5% prior. On the other hand, US Building Permits and Housing Starts for November may also direct short-term pair moves. Technical analysis A daily closing beyond the 1.3700 hurdle, comprising multiple tops marked in the last two weeks, becomes necessary for the USD/CAD bulls to aim for the previous monthly high near 1.3810. Otherwise, a pullback towards the 50-DMA support of 1.3557 can’t be ruled out.
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The Japanese Yen Gains, Prompting Aggressive Selling Around The GBP/JPY Cross

TeleTrade Comments TeleTrade Comments 20.12.2022 09:22
GBP/JPY plummets to over a two-month low in reaction to the BoJ’s hawkish twist on Tuesday. A dovish outlook, however, caps gains for the JPY and assists spot prices to recover a few pips. The fundamental backdrop favours bearish traders and supports prospects for further losses. The GBP/JPY cross comes under intense selling pressure on Tuesday and plunges to its lowest level since October 12 in reaction to the Bank of Japan's hawkish twist. Spot prices, however, manage to recover around 150 pips and jumps back above the 162.00 mark during the early European session. The Japanese Yen rallies across the board after the Japanese central bank announced its monetary policy decision, which, in turn, prompts aggressive selling around the GBP/JPY cross. In an unexpected move, the BoJ widened the allowable trading band for the 10-year government bond yield to 50 bps on either side of the 0% target from the 25 bps previous. This is seen as a step towards the policy normalisation process, which, in turn, provides a strong boost to the JPY. The BoJ, however, sticks to its dovish guidance and pledges to ramp up monetary stimulus as needed. The central bank also projects that interest rates will move at current or lower levels. In the post-meeting press conference, BoJ Governor Haruhiko Kuroda said that Japan's economy still faces a lot of uncertainty and sees inflation growth fading in 2H 2023. This caps the upside for the JPY and assists the GBP/JPY cross to attract some buyers near the 160.80-160.75 area. Any meaningful recovery, however, still seems elusive, warranting some caution for bullish traders. The prevalent risk-off mood, amid growing recession fears, should continue to benefit the JPY's relative safe-haven status. Apart from this, a dovish outcome from the Bank of England meeting last week, with two MPC members voting to keep interest rates unchanged, might undermine the GBP. This, in turn, acts as a headwind for the GBP/JPY cross and keep a lid on the intraday uptick. Even from a technical perspective, a convincing break below the very important 100 and 200-day SMAs favours bearish traders and supports prospects for the emergence of fresh sellers at higher levels. Hence, any subsequent move up could be seen as a selling opportunity and runs the risk of fizzling out quickly in the absence of relevant economic data from the UK.
The USD/JPY Price Seems To Be Optimistic

The USD/JPY Pair Is Likely To Extend The Latest Weakness

TeleTrade Comments TeleTrade Comments 20.12.2022 09:31
USD/JPY drops more than 3.0% to refresh multi-day bottom after Bank of Japan tweaks Yield Curve Control (YCC) policy. Chatters surrounding Japan’s budget, Treasury bond buying also entertain Yen traders. BOJ Governor Kuroda shows readiness to ease policy if needed, USD/JPY stays pressured. Risk aversion fails to underpin US Dollar as Federal Reserve appears less hawkish. USD/JPY bears the burden of the Bank of Japan’s (BOJ) surprise policy tweak during early Tuesday, despite the latest rebound. While portraying the Yen trader’s mood, the quote initially slumped to the lowest levels since early August before the recent bounce from 132.66 to 133.60. Even so, the quote remains 2.75% in the red as we write. Bank of Japan surprises markets with YCC move, drowns USD/JPY Bank of Japan (BOJ) held its benchmark rate unchanged at -0.10% and kept the short-term interest rate target at -0.1% while directing 10-year Japanese Government Bond (JGB) yields toward zero. In doing so, the Japanese central bank matched the market expectations and should have kept the USD/JPY intact. The surprise factor, however, was the BOJ’s alteration of the Yield Curve Control (YCC) and the bond issuance announcements. “The BOJ will expand the range of 10-year Japan government bond yield fluctuations from its current plus and minus 0.25 percentage points to plus and minus 0.5 percentage points,” reported Reuters. Following that, the Yen pair plunged to the multi-day low of 132.66 ahead of bouncing back beyond 133.00. The BOJ not only affected the USD/JPY prices but also roiled the risk appetite and propelled the Treasury bond yields across the board, which in turn allowed the US Dollar to pare intraday losses. BOJ Governor Haruhiko Kuroda defends Yen buyers Having witnessed the BOJ-inflicted slump in the USD/JPY prices, Governor Haruhiko Kuroda allowed the Yen traders to lick their wounds while defending the easy money policies for one last time. In doing so, BOJ’s Kuroda highlights the need for a 2.0% inflation target, as well as shows readiness to ease monetary policy if needed. “Today's decision on yield curve control is not an exit of yield curve control or change in policy,” said BOJ’s Kuroda per Reuters. Also read: BoJ’s Kuroda: Necessary to achieve 2% inflation target sustainably, stably in tandem with wage growth US Dollar fails to cheer risk-off mood Despite the risk-aversion wave, the US Dollar Index (DXY) remains mildly offered near 104.40, down for the second consecutive day. The reason for the USD/JPY pair’s weakness could be linked to the Federal Reserve’s (Fed) less hawkish bias, as informed via the latest monetary policy meetings, as well as the softer US Purchasing Managers’ Indexes (PMIs) for December. Also likely to have weighed on the US Dollar are the strongly hawkish statements from the European Central Bank (ECB) officials, as well as upbeat German data. Risk catalysts will be crucial for Yen sellers Looking forward, USD/JPY pair bears need to pay close attention to the risk catalysts and the bond market moves for near-term directions amid a light calendar. Also important will be the US Building Permits and Housing Starts could join Germany’s Producers Price Index (PPI) data to direct immediate moves. However, major attention will be given to the Fed’s preferred inflation gauge, namely Friday’s US Core Personal Consumption Expenditure (PCE) – Price Index for December, expected 4.6% YoY versus 5.0% prior. USD/JPY technical analysis USD/JPY extends a downside break of the 200-DMA, as well as an upward-sloping trend line from early August, towards refreshing the multi-day low. Given the impending bear cross on the Moving Average Convergence and Divergence (MACD) indicator, as well as the downbeat Relative Strength Index (RSI), located at 14, not oversold, the USD/JPY pair is likely to extend the latest weakness. However, the RSI (14) is near the oversold territory and hence signals limited downside room, which in turn highlights the 78.6% Fibonacci retracement level of the May-October upside, near 131.70. Also acting as the downside filter is the August month low near 130.40 and the 130.00 round figure. In a case where the USD/JPY rebounds from the current level, the support-turned-resistance line from August, around 134.15 by the press time, could challenge intraday bulls. Following that, the 200-DMA hurdle surrounding 135.75 will be crucial to watch for the Yen buyers. Above all, a two-week-old horizontal resistance area near 138.00 could restrict the USD/JPY buyers from entering the ring. USD/JPY: Daily chart Trend: Limited downside expected
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Economists At HSBC Believe That The Japanese Yen Can Strengthen During 2023

TeleTrade Comments TeleTrade Comments 20.12.2022 09:35
The Japanese Yen is set to strengthen during 2023, in the view of economists at HSBC. If the BoJ tweaks its monetary policy, the JPY may strengthen further “We believe the upward pressure on USD/JPY exerted by its yield differentials should cease when the Fed stops hiking.” “If the Bank of Japan tweaks its monetary policy (not our economists’ base case), the USD/JPY pair may fall even harder.” “A normalisation of extremes in valuation and improving Japan’s current account should also support the Japanese Yen.”
The Results Of The March Meeting Of The Bank Of Japan Are Rather Symbolic

The Bank Of Japan Assessed That The Economy Was Possibly To Recover

Conotoxia Comments Conotoxia Comments 20.12.2022 09:50
The Bank of Japan appears to be joining the ranks of the world's other central banks in deciding to take the first step toward tightening monetary policy. While it has not raised its official interest rate, it has increased the range for Japan's bond yields, which may make its interest rates a bit more attractive. Since September 2016. The Bank of Japan has kept a check on bond yields, at the time setting a target for the 10-year bond yield at 0% with a maximum deviation of 10 bps. This was meant to stimulate inflation along with other programs and provide cheap financing. The BoJ then expanded the expected fluctuation range, and when sellers of Japanese paper became too numerous and yields rose above the range, it triggered unlimited buying of those bonds. In July 2018, the fluctuation band was extended to 20 bps, and in March 2021 to 25 bps from the 0% level. Today, the range was widened to 50 bp, pushing yields towards it, to their highest level since 2015. With today's decision, the Bank of Japan (BoJ) kept its key short-term interest rate at -0.1% and the 10-year bond yield near 0%, as expected. At the same time, the central bank changed the yield curve's tolerance range in an effort to reduce some of the costs of prolonged monetary stimulation (the Bank had to launch unlimited bond purchases). The council said it would widen the 10-year government bond yield spread from the current +/-0.25 points to +/- 0.5 points. Meanwhile, the BoJ assessed that the economy was possibly to recover, with the impact of COVID and supply issues waning, while downward pressure continued due to high commodity prices and a slowdown in foreign economies, tradingeconomics reported. The annualized inflation rate is possible to rise in 2022 due to increases in the cost of food, energy and durable goods, before weakening in the middle of fiscal 2023. The council reiterated that it will take additional easing measures if necessary, and expects short- and long-term rates to remain at current or lower levels. Significant impact on the yen exchange rate Although interest rates were not changed, Japanese bond yields moved up, reducing their divergence from bonds of the US, Germany or other countries where a rate hike cycle is underway. As a result of this, the Japanese yen was able to gain decisively, falling from the JPY137 area to JPY133 this morning. Japan was thus able to take another step to support the yen, following its previous second successful currency intervention. Source: Conotoxia MT5, USDJPY, Daily Perhaps after a strong dollar, the time would come for a strong yen as well, and changing the target for bond yields may be just the first step. Further possible action, may be an interest rate hike, where the market expects an increase to 0.3 percent in 2023. This would mean a 40bp increase, which, assuming US rates can start falling or stop rising at the same time, could give the yen a boost after a disastrous 2022. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

FX: The BOJ's Role As An Ultra-Dovish Outlier Among Global Central Banks

ING Economics ING Economics 20.12.2022 11:02
The Bank of Japan announced a surprise change in its yield curve control policy, and will now allow JGBs to trade to an upper bound of 0.50%. While Governor Kuroda has explicitly warned this is not a rate hike, taming speculation of further BoJ normalisation in 2023 won't be easy. USD/JPY may break below 130.00. Elsewhere, expect no fireworks from Hungary The Bank of Japan in Tokyo USD: BoJ hawkish shift may have broad implications Markets have been shaken from their pre-festive low volatility torpor this morning, as the Bank of Japan announced a surprising change in its yield curve control (YCC) policy. The target band for the 10-year JGB has been widened to +/- 0.50% from the previous 0.25%, essentially allowing higher interest rates in the current inflationary environment despite still officially targeting 0.00% as the outright target. The move was accompanied by an increase in the amount of JGB purchases, from JPY 7.3tn per month to 9tn. The immediate impact on the yen has been sizeable, with USD/JPY dropping by around 3.0%, and currently trading around 133.00. The BOJ's role as an ultra-dovish outlier among global central banks had been a key driver of JPY weakness in 2022, and markets are now assessing whether today’s announcement is effectively a first step towards a broader policy normalisation process in Japan, which would quite radically change the outlook for the yen in 2023. Incidentally, there is a risk that speculation of even higher JGB rates in 2023 could spill over into global bonds and equities (like it did today). Governor Haruhiko Kuroda’s press conference has been all about pushing back against such speculation: he explicitly warned markets not to interpret this as a rate hike and said that he doesn’t think a further widening of the yield band is needed. Our suspicion is that markets may need more reassurance with this, especially considering that Kuroda is due to be replaced in April 2023 and the timing may suggest the BoJ may be laying the groundwork for normalisation under a new governor. For now, we think risks remain skewed to the downside for USD/JPY into the festive break, and we cannot exclude a break below 130.00 - also given the generally soft dollar environment. For now, the negative reaction in global equities is capping pro-cyclical currencies, and offering some USD support on balance, but broader dollar weakness is surely a possibility in the near term. DXY could press 103.50 by the end of this week. In the US, housing data will be in focus today, with housing starts expected to have dropped further in November as high mortgage rates continue to weigh on the property sector. Francesco Pesole EUR: Sidelined, for now EUR/USD has been on the sidelines of the post-BoJ market reaction, holding marginally above 1.0600. It’s likely that the downward pressure on the dollar from the BoJ's hawkish shift has been fully offset by the deterioration in risk sentiment, which negatively impacts the pro-cyclical euro. As discussed in the USD section above, there are lingering downside risks to the dollar and we could see EUR/USD test 1.0700 before Christmas. Anyway, volatility should become significantly thinner from Wednesday/Thursday, with today’s BoJ announcement having been the last major event in markets. The eurozone calendar includes consumer confidence data – which is expected to have slightly improved in December – and speeches by ECB’s Peter Kazimir and Madis Muller. Francesco Pesole GBP: No domestic drivers There is nothing to highlight in the UK calendar today, and the pound should continue to be driven by dollar dynamics. EUR/GBP initially had a positive reaction to the BoJ announcement, likely due to GBP’s higher sensitivity to the adverse response in global equities, but is now back at yesterday’s close. Still, GBP downside risks should be larger than for the euro if risk sentiment remains pressured today, and EUR/GBP may move to the upper half of the 0.87-0.88 band. Francesco Pesole CEE: NBH ends a dramatic year with a quiet meeting The economic calendar for today offers several macro numbers from Poland, led by industrial production. We expect November's output to have slowed significantly in year-on-year terms, from 6.8% to 0.7%, well below market expectations. Also, today we will see data from the labour market and industrial producer prices in Poland. Then in Hungary, the State Debt Management Agency (AKK) will present its financing strategy for next year. The government is currently in the process of revising the budget, but the main question will be what the government's assumption will be for the absorption of EU money. Later, we will see a decision by the National Bank of Hungary (NBH) at its last meeting of the year. The NBH has made it clear on several occasions that the temporary and targeted measures, introduced in mid-October, will remain in place until there is a material and permanent improvement in the general risk sentiment. Although we’ve seen some progress here, we don't think enough has changed to trigger an adjustment in the monetary policy’s hawkish “whatever it takes” setup. Although the EU story is still not over, tangible progress should keep the forint on the stronger side and limit potential losses. Moreover, the NBH liquidity measures have worked, and implied FX yields once again soared to record highs during December; on average, they are double that of regional peers, protecting the forint from a further sell-off in our view. Overall, we expect the forint to move towards 400 EUR/HUF and below that level next year. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Saxo Bank Podcast: The Bank Of Japan Meeting And More

A Signal That The BankOf Japan Is Tweaking Its Current Ultra-Loose Policy

Kenny Fisher Kenny Fisher 20.12.2022 12:19
The Japanese yen has sent the dollar tumbling on Tuesday. USD/JPY has fallen 3.26% and is trading at 132.44 in Europe. In the Asian session, USD/JPY fell as low as 131.99 but has recovered slightly. BoJ tweaks yield curve control At the end of its policy meeting, the Bank of Japan stunned the markets with a change to its yield curve control (YCC). The BoJ announced it would widen the band around the 10-year bond yield to 50 basis points, up from 25 bp. The move allows long-term interest rates to rise higher and the reaction was deafening, as the yen soared and climbed to its highest level since August 11th. The move was completely unexpected, as the BoJ meeting was expected to be a sleeper with no policy changes. It was just yesterday that I wrote in these pages that the BoJ was not expected to change policy until the changing of the guard in April 2023, when Governor Kuroda steps down. The BoJ move is certainly dramatic but needs to be kept in proportion. The BoJ is maintaining its YCC targets and said it would sharply increase bond purchases. This could be a signal that the Bank is tweaking its current ultra-loose policy and is not planning to withdraw stimulus. The BOJ has staunchly defended its yield cap with massive bond purchases, and this has distorted the yield curve and fueled a sharp drop in the yen, which has contributed to higher costs for imports of raw materials. BoJ policy makers may have become uncomfortable with these side effects and felt that the time was right to take a small step towards normalisation. This ‘baby step’ packed a massive punch as seen in the yen’s reaction, and the markets will be looking for hints at further moves from Governor Kuroda as his term winds down.   USD/JPY Technical USD/JPY has broken below several support levels. The next support level is 131.13 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Saxo Bank Podcast: The Bank Of Japan Shocking Markets, The Japanese Yen Rose

Saxo Bank Saxo Bank 20.12.2022 12:27
Summary:  Today we look at the Bank of Japan shocking markets overnight with a surprise shift in its yield-curve-control policy, as it lifted the cap on 10-year JGB's to 50 basis points from 25 basis points. The JPY rose in stepwise fashion together with the jump in longer Japanese yields and global yields were also impacted, taking risk sentiment lower. In commodities, we discuss metals and natural gas. In equities, we discuss the outlook for European defense stocks, including Rheinmetall and cover upcoming earnings reports from Nike, where the bar of market expectations looks high, and from FedEx, where the bar of expectations is quite low. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Bank of Japan roils markets with a surprise policy tweak | Saxo Group (home.saxo)
The Results Of The March Meeting Of The Bank Of Japan Are Rather Symbolic

The Bank Of Japan's Decision To Allow 10-Year Government Bonds Caused Turmoil In The Financial Markets, USD/JPY Trading Below 133

Kamila Szypuła Kamila Szypuła 20.12.2022 13:30
The US Dollar index retreated following the BoJ policy announcement helping EUR/USD edge higher. Later in the day we have US building permit data which could reignite some bullish behavior in the US dollar. Moreover, forex traders focused on the Japanese yen today, which jumped on key Bank of Japan (BoJ) policy. EUR/USD The EUR/USD pair also gains today, receiving a trade above $1.06. Currently, trading is in the range of 1.0630-1.0640. This morning we heard comments from ECB policymaker Nagel who stated the Central Bank is still a long way from hitting its inflation goal reiterating that the ECB likewise need to be persistent on rates. Yesterday’s upbeat German IFO survey on Business Climate and this morning drop in German PPI, which hit a 9-month low. Improving data coupled with a slightly hawkish ECB turn last week may speak in favor of a continuation of the current EUR/USD rate. At present, the mood remains bullish. Read next: Voluntary Extradition Of Sam Bankman-Fried | The Inflation Reduction Act (IRA) Is A Path To Net Zero| FXMAG.COM USD/JPY USD/JPY dropped sharply today from trading above 137 to below 134. The pair is now trading below 133, 132.6420 to be precise The Japanese Yen launched higher after the Bank of Japan tilted monetary policy at its meeting today. The USD/JPY Pair has raced to a four-month low. The pair tried to break above the upper band of a descending trend last week but was unable to do so. Today’s attempt was also unsuccessful and the BoJ’s announcement aided maintenance of the trend channel. All of this contributed to the couple's sentiment, which is currently bearish. Most BOJ watchers had expected no changes until the current governor Haruhiko Kuroda's 10-year term ends at the end of March. While it kept broad policy settings unchanged he BOJ decided to let long-term yields to move 50 basis points either side of its 0% target, wider than the 25 basis point band previously. The move has had a negative impact on the US dollar and could boost the Yen as Japanese investors are given an incentive to bring money home while increasing the Yens haven appeal. AUD/USD The price of the Aussie pair was above the 0.6725 level at the beginning of the day, but then fell below $0.67. Trading is currently in the range 0.6665- 0.6670 The Australian dollar fell above $0.67 to its lowest level in a month after the Bank of Japan's surprise decision. The Australian was also under pressure as other major central banks offered a more hawkish outlook on policy than markets anticipated, adding to fears of a potential recession next year. Meanwhile, recent minutes from the Reserve Bank of Australia's meeting revealed that policymakers were considering a bigger rate hike of 50 basis points. GBP/USD At the beginning of the day, cable trading was very mixed. The price of the pair traded above $1.22 and then fell all the way down to $1.2088. Currently, the price is stabilizing in the range of 1.2150-1.2175. The overall picture of the pair looks bearish and the price trades mostly above $1.21. The pound posted a slight gain on Tuesday in weak trading ahead of Christmas, but was on track for its biggest quarterly gain against the dollar since 2009. The pound is up 8.8% against the dollar in the last three months of the year, putting it on track for its best quarter in more than 13 years. Goldman Sachs expects the pound to fall to $1.07 in three months and hold at $1.11 in six months. Source: investing.com, dailyfx.com, finance.yahoo.com
The EUR/USD Pair Maintains The Bullish Sentiment

The EUR/USD Pair Is Still Moving In The Right Direction

Paolo Greco Paolo Greco 21.12.2022 08:00
On Tuesday, the EUR/USD currency pair continued to trade with low volatility and virtually no trend change. A week and a half before the New Year and a few days before Christmas, as we already stated in yesterday's article, it is very challenging to anticipate that the market will trade normally. In theory, the first indications of "vacationing" were seen last week, when the pair's movements were only moderately prompted by the background's crazy volume and significance. No, the volatility varied greatly from day to day, but the illustration below amply demonstrates how this indicator has been declining over the past few weeks. Even a few weeks out from the holidays, it appears that traders have already begun to take their Christmas vacations. Of course, we have no control over how the majority of market participants feel or what they want. No publications or events will compel the market to trade if it chooses not to. Furthermore, no publications-related events are currently scheduled. The first thing to remember is that the pair can stay in a flat or on a "swing" for several weeks. Due to the lack of trend movements, trading the pair will be very challenging in both scenarios. We also anticipate a downward correction, which we have been anticipating for three weeks, to start in the near future. Even inexperienced investors can see that the European currency is unjustly positioned so high and cannot even slightly adjust downward. In terms of the dollar, this situation is utterly unfair. The ECB's signals are being awaited by the market. We have brought up the issue of whether it is necessary to strengthen the euro several times in recent weeks. The dollar fell due to market expectations of a slowdown in the pace of monetary policy tightening, though there are always possible explanations for why the pair moves in one direction or the other. When we contrast the beginning of the dollar's decline with when these rumors first started to circulate, we find that the timing is almost exact. Therefore, the market has most likely already determined the Fed rate of 5.25%. So the current query is: when will the ECB start to tell the market that the rate is not going to rise indefinitely? Although they haven't announced it, they have already slowed down the tightening pace, and the EU's inflation rate is still very high, clearly indicating that the rate hike will not be slowed down. Then, in the upcoming months, they might lower the step to 0.25% or even declare that the tightening cycle in monetary policy is coming to an end. Who claimed that the rate would be increased to 5% or more by the European regulator? And the market might start to stop making more purchases of the euro once it realizes that the ECB is not chasing the Fed. In addition to this, a downward correction has been developing for a few weeks. On the eve of the New Year, we can only come to the same conclusion as before: you should buy since the technique continues to indicate that the upward trend will continue, but at any time the euro currency could begin to fall, which could be both strong and prolonged. As of December 21, the euro/dollar currency pair's average volatility over the previous five trading days was 92 points, which is considered to be "high." So, on Wednesday, we anticipate the pair to fluctuate between 1.0518 and 1.0703 levels. A potential continuation of the upward movement will be indicated by an upward turn of the Heiken Ashi indicator. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: The EUR/USD pair is still moving in the right direction. With targets of 1.0703 and 1.0742 in the event of a price reversal from the moving average, we are currently thinking about new long positions. No earlier than the price being fixed below the moving average line with targets of 1.0518 and 1.0498 will sales become relevant. There is currently a very good chance that it will be flat. Explanations for the illustrations: Determine the present trend with the aid of linear regression channels. The trend is currently strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. The CCI indicator's entry into the oversold (below -250) or overbought (above +250) areas indicates that the trend is about to reverse Relevance up to 01:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330348
The GBP/USD Pair Started A New Round Of Downward Correction

The GBP/USD Pair Has Now Dropped To The Critical Line

Paolo Greco Paolo Greco 21.12.2022 08:01
In contrast to the EUR/USD currency pair, the GBP/USD pair exhibits at least some signs of movement. In theory, the fall continues after the price has fixed below the moving average line. We can therefore conclude how a scenario with a downward correction would be implemented. To put it mildly, the fall is not significant, the pair's volatility has recently decreased, and there are many uncertainties regarding the pair's potential future trend movement. The trend movement, if there is one, is very weak on the lower TF, as is quite obvious. The pair is currently traveling south, which is good. However, you should keep in mind that a flat or "swing" has a high likelihood of occurring in the final days of the previous year. Not to mention the possibility that the market will unexpectedly recall purchasing British currency. After all, as the past month has demonstrated, they do not at all require a sound fundamental or macroeconomic background. A pound may be purchased at any time. As a result, we are placing our money on the possibility of a downward correction. But action should be taken as soon as a flat is detected. The pair has now dropped to the critical line on the 24-hour TF, which is significant because it has grown closer to the price than it has fallen to the line. However, a rebound is possible either way. In actuality, the price must be fixed below the moving average line to constitute a sell signal. It is evident from the illustration above that there have been plenty of these fixations recently, but almost none of them have resulted in a significant movement to the South. It should be understood that the moving is frequently found close to the price; therefore, for the price to remain above it, it must constantly increase, which is essentially impossible. Fixing below the moving average line is, therefore, undoubtedly a strong signal, but confirmation is necessary if traders anticipate a movement of more than 100 points. How should we interpret the UK GDP report? Tomorrow in the UK, the final report on the third quarter's GDP will be released. Even though a lot of high-ranking officials have already said that the British economy has entered a recession and that it could last a while, things aren't too bad right now. A 0.2% decline is not a particularly significant decline, even though the third quarter may only be the first of many "negative" quarters. Undoubtedly, a recession is a recession, but in the United States, people wouldn't even notice a 0.2% decline. They focus primarily on the unemployment rate and the state of the labor market. To be fair, it should be mentioned that unemployment in the United Kingdom is essentially stable. By the way, the American economy declined significantly more in the first two quarters of this year. As a result, we don't think the GDP report will have any kind of market impact. The uncertain future that traders fear is now very clearly defined, especially in matters about the UK. In the UK, nothing else intriguing is scheduled for this week. There is nothing comparable on the horizon, although we would like to write right now about a global event that might influence the market's mood in the near future. We can say that there was an information calm after the epic with Brexit and the pandemic came to an end, as well as after the subsequent change of government. This is neither good nor bad; there is simply not enough news at the moment to warrant discussion and analysis. Additionally, we don't want to focus on completely irrelevant and trivial information because this will only confuse us. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 148 points. This value is "high" for the dollar/pound exchange rate. Thus, on Wednesday, December 21, we anticipate movement that is constrained by the levels of 1.1991 and 1.2287 to remain inside the channel. A round of upward correction will begin if the Heiken Ashi indicator reverses direction upward. Nearest levels of support S1 – 1.2085 Nearest levels of resistance R1 – 1.2146 R2 – 1.2207 R3 – 1.2268 Trading Suggestions: On the 4-hour timeframe, the GBP/USD pair is still trending downward. As a result, for the time being, you should maintain sell orders with targets of 1.2085 and 1.1991 until the Heiken Ashi indicator appears. When the moving average is fixed above, buy orders should be placed with targets of 1.2287 and 1.2329. Explanations for the illustrations: Determine the current trend with the aid of linear regression channels. The trend is strong right now if they are both moving in the same direction. The short-term trend and the direction in which trading should be done at this time are determined by the moving average line (settings 20.0, smoothed). Murray levels serve as the starting point for movements and adjustments. Based on the most recent volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. The CCI indicator's entry into the oversold (below -250) or overbought (above +250) areas indicates that the trend is about to reverse Relevance up to 01:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330350
The Price Of USD/JPY Pair Has To Fight With The Resistance Level

The USD/JPY Price Makes A Standard Correction After A Strong Movement

InstaForex Analysis InstaForex Analysis 21.12.2022 08:03
Yesterday, after the Bank of Japan announced that it has decided to expand its target band for long-term government bond yields and increase the volume of bond purchases on its balance sheet, the USD/JPY pair collapsed by 3.79%. The lower shadow of the daily candlestick exactly worked off the support of the monthly chart's embedded price hyperchannel line at 130.58. Crossing this level of support will make 126.90 the next target. But so far the price (in corrective growth) is headed to the upper line at 133.33. The Marlin oscillator settled in the negative area, it has a decent margin of distance in moving down. We are waiting for the correction to end, an attempt to overcome 130.58 and attempt to break through 126.90. On the four-hour chart, the price makes a standard correction after a strong movement. The Marlin oscillator is in a hurry to get out of the oversold area, and the higher it rises, the longer it will decrease. The limit of the correction is the nearest resistance of 133.33, but the price may not reach this level. Relevance up to 03:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330354
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

The Cable Market (GBP/USD) Is Still In Downtrend

InstaForex Analysis InstaForex Analysis 21.12.2022 08:05
The British pound continues to move along the target level of 1.2155, the Marlin oscillator is moving horizontally, but still in the territory of the downtrend. Settling under 1.2155 will be the main condition for reaching the nearest target at 1.1933 (June 14 low). The upward movement is possible, but is an alternative scenario. In order for it to progress, it is necessary to close today's daily candle above support at 1.2155. Also, the Marlin oscillator should show growth for such a daily close. We will consider an additional growth condition on the four-hour chart. There is a resistance in the form of the MACD indicator line around 1.2250. Therefore, closing the day above 1.2155 is only an initial condition. Pulling back from the area under the support will strengthen the downtrend. Today, we expect pessimistic indicators for the UK. Public sector net borrowing for October is expected to rise to 14.6 billion pounds against 12.7 in September, retail sales volumes from CBI for December may show decline from -19 to -24 points. Perhaps the data will help the bears on the pound. Relevance up to 03:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330356
The EUR/USD Price May Fall Under 1.0660

The EUR/USD Pair's Price May Cross The Lower Limit

InstaForex Analysis InstaForex Analysis 21.12.2022 08:09
The euro decided to stay in the 1.0595-1.0645 range for the fourth day. The previous target range of 1.0615/42 has been expanded. On the daily chart, the Marlin oscillator doesn't dare to move into the area of the downtrend, it is declining slowly. There is a high probability that with the price crossing the lower limit of the range at 1.0595, the Marlin will also be in negative territory. In this case, the downtrend will get the momentum it needs. The first target is 1.0470. On the four-hour chart, the price can settle in the 1.0595-1.0645 range once the oscillator develops in the negative territory. This is a sign of interest in the entire movement and developing the momentum that occurred on December 15-16. The MACD line is a support for the flat. Moving past 1.0595 will mean the price has crossed this support. Relevance up to 04:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330358
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

EUR/USD Pair: Germany Reports Can Increase Pressure

InstaForex Analysis InstaForex Analysis 21.12.2022 08:12
Analysis of transactions in the EUR / USD pair The pair tested 1.0582 when the MACD line was already far from zero, so the downside potential was limited. Sometime later, another test took place, but this time the MACD line was in the oversold area, which was a good reason to buy. This led to a price increase of about 30 pips. Selling at 1.0617 was not successful, resulting in losses. Although the decline in Germany's PPI was stronger than expected, it had little impact on euro because the weak US real estate market data led to a larger rise in the pair. Today, there is another report from Germany which could, to some extent, have a positive effect on euro. This is the leading consumer climate index for January. There is also the consumer confidence index in the US and secondary market housing sales that could weaken dollar and further strengthen euro, however, the former's figures should show a decline. If the data is the same as expected, the pair will continue to trade sideways. For long positions: Buy euro when the quote reaches 1.0629 (green line on the chart) and take profit at the price of 1.0680. Growth could occur after strong reports in Germany. But remember that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0597, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0629 and 1.0680. For short positions: Sell euro when the quote reaches 1.0597 (red line on the chart) and take profit at the price of 1.0545. Pressure will increase if Germany reports weak economic statistics. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0629, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0597 and 1.0545. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader Relevance up to 04:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330364
The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

Reports On The UK's Public Sector Will Not Have Effect On The Cabel Market

InstaForex Analysis InstaForex Analysis 21.12.2022 08:16
Analysis of transactions in the GBP / USD pair The pair tested 1.2155 when the MACD line was already far from zero, so the upside potential was limited. Sometime later, another test took place, but this time the MACD line was declining from its highs, which was a good reason to buy. Surprisingly, it resulted in losses. Ahead are reports on the UK's public sector net borrowing and retail sales, however, they will not have much effect on the market as trading volume and volatility are likely to be low due to the upcoming Christmas and New Year holidays. Most probably, GBP/USD will continue to trade in the channel it has been in since the end of last week. The US consumer confidence index and secondary market housing sales could weaken dollar and strengthen pound if the data are beyond expectations. If they are the same, the pair will resume trading sideways. For long positions: Buy pound when the quote reaches 1.2187 (green line on the chart) and take profit at the price of 1.2270 (thicker green line on the chart). Growth will occur if there are weak US reports. But remember that when buying, the MACD line should be above zero or is starting to rise from it. Pound can also be bought at 1.2135, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.2187 and 1.2270. For short positions: Sell pound when the quote reaches 1.2135 (red line on the chart) and take profit at the price of 1.2055. Pressure will return if there is no bullish activity at the weekly highs. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.2187, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.2135 and 1.2055. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 04:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330366
The EUR/AUD Pair May Have The Potential To Continue Its Decline

EUR/USD Pair Is Looking For A Bit More Corrective Downside Pressure

InstaForex Analysis InstaForex Analysis 21.12.2022 08:30
We continue to look for a bit more corrective downside pressure toward 1.0469 before the next impulsive rally higher towards 1.0927 which will likely complete wave 3. In the short term, a break below minor resistance at 1.0569 will confirm the final decline towards 1.0469 will complete the correction and will set the stage for the next impulsive rally higher to 1.0927 and ultimately higher too. For now, look for a break below 1.0569 to trigger the next decline toward 1.0469. Relevance up to 06:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305707
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

GBP/USD Pair: The Bears Are Still Unsuccessfully

InstaForex Analysis InstaForex Analysis 21.12.2022 08:32
Yesterday, a few entry signals were made. Let's take a look at the M5 chart to get a picture of what happened. In the previous review, we focused on the mark of 1.2177 and considered entering the market there. Growth and a false breakout through the level, following the bears' attempts to reach the weekly low, produced a sell signal. The pair plunged by over 40 pips. In the course of the North American session, the pair retested the mark of 1.2160 to the upside, which created a sell entry point, and the price plummeted by another 60 pips. When to go long on GBP/USD: The pair is still trading sideways due to the absence of any macro releases. Rare fluctuations have a negative effect only on speculators' stop orders, while the general market situation remains the same. Today, the UK will see the release of data on public net borrowing and CBI distributive trades. These figures have nothing to do with the forex market. Therefore, they are unlikely to somehow affect the pair. For that reason, it is wiser to go long after a false breakout through the nearest support level of 1.2152, which is in line with the bullish moving averages. The quote may then go to the resistance level of 1.2219, which is also the upper limit of the channel. It is important that the bulls break through the mark and consolidate above it as this will allow them to push the pair to 1.2301. If the pair tests this level, this will mean that major players have returned to the market. The quote will rise to 1.2350, where it is wiser to lock in profits, in case of a downside retest of this level. However, if the bulls fail to maintain control over 1.2152, it will become possible to go long after a false breakout through 1.2087, the lower limit of the channel. GBP/USD could be bought on a rebound from 1.2009, allowing a correction of 30 to 35 pips intraday. When to go short on GBP/USD: The bears are still unsuccessfully trying to update weekly lows. Due to the current sideways trend, it is wiser to sell the instrument as higher as possible. A false breakout through the nearest resistance level of 1.2219 will generate a sell signal with the target at 1.2152, which is in line with the moving averages. A breakout and a retest of this mark to the upside will create a sell entry point with the target at 1.2087. The most distant target stands at 1.2009 where it is wiser to lock in profits. In case of growth in GBP/USD and the absence of the bears at 1.2219, the bulls will tighten their grip on the market. A sell entry point will form after a false breakout through 1.2301. If there is no trading activity there, GBP/USD could be sold on a rebound from 1.2350, allowing a bearish correction of 30 to 35 pips intraday. Commitments of Traders: The COT report for December 13th logged a rise in long and short positions. Given that the number of long positions exceeds that of short positions, the pair is now facing strong buying pressure. In fact, traders are ready to buy the pair at the current high price. Last week, the Bank of England announced it would continue hiking rates to fight stubborn inflation, which slowed down a bit last month. The regulator's policy makes experts think that the UK economy is in a recession. Therefore, the pair's growth potential is likely to be limited. For that reason, it is wiser to wait for a downward correction in order to buy the instrument. According to the latest COT report, short non-commercial positions rose by 1,015 to 57,747 and long non-commercial positions grew by 3,469 to 32,008. Consequently, the non-commercial net position came in at -25,739 versus -28,193 a week ago. The weekly closing price of GBP/USD increased to 1.2149 versus 1.1958. Indicator signals: Moving averages Trading is carried out in the range of the 30-day and 50-day moving averages, reflecting a sideways trend in the market. Note: The period and prices of moving averages are viewed by the author on the hourly chart and differ from the general definition of classic daily moving averages on the daily chart. Bollinger Bands Resistance stands at 1.2185, in line with the upper band. Indicator description: Moving average (MA) determines the current trend by smoothing volatility and noise. Period 50. Colored yellow on the chart. Moving average (MA) determines the current trend by smoothing volatility and noise. Period 30. Colored green on the chart. Moving Average Convergence/Divergence (MACD). Fast EMA 12. Slow EMA 26. SMA 9. Bollinger Bands. Period 20 Non-commercial traders are speculators such as individual traders, hedge funds, and large institutions who use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions are the total long position of non-commercial traders. Non-commercial short positions are the total short position of non-commercial traders. Total non-commercial net position is the difference between the short and long positions of non-commercial traders. Relevance up to 04:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330362
The Outlook Of EUR/USD Pair Is Downward In The Near Term

The Outlook Of EUR/USD Pair Is Downward In The Near Term

InstaForex Analysis InstaForex Analysis 21.12.2022 08:36
Technical outlook: EURUSD has been oscillating sideways within a tight range of 1.0580 to 1.0650 over the last few trading sessions. The single currency pair is seen to be trading close to 1.0610 at this point in writing, closer to the lower border of consolidation. A breakout can be expected this week since the triangle consolidation range is around 70 pips. EURUSD had surpassed the 1.0736 high over the last week before finding resistance. The currency pair turned lower from its 18-month resistance trend line and produced an Engulfing Bearish candlestick pattern as seen on the daily chart. A high probability remains for a turn lower towards the 1.0100-50 area at least in the next several trading sessions. EURUSD is facing stiff resistance around the 1.0640-50 zone and might have terminated its triangle consolidation. A break below 1.0570-80 is now awaited to confirm a bearish breakout, which could accelerate a move lower towards the 1.0100-50 area. Also, note that the Fibonacci 0.618 retracement of the recent upswing between 0.9740 and 1.0736 is seen passing close to the above range. The outlook is downward in the near term. Trading idea: Potential bearish turn against 1.0750 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305717
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

There Is Already Signs That The EUR/USD Market Is Flat

Paolo Greco Paolo Greco 21.12.2022 08:41
M5 chart of EUR/USD EUR/USD was tightly stuck between 1.0581 and 1.0658 on Tuesday. In addition, it is also located between the lines of the Ichimoku Senkou Span B and Kijun-Sen. Therefore, it's a total flat, which may persist for a few weeks. Recall that the key moment in the currency market now is how close we are to the Christmas and New Year holidays. Firstly, it affects the calendar of events, which is simply empty. Secondly, traders are slowly leaving the market in anticipation of the holidays. All this leads to a decline in volatility and absence of trend movement. Needless to say, there were no interesting events yesterday, neither in the US, nor in the EU... The Ichimoku lines may soon cease to be strong and important. This is their normal reaction to a flat. Speaking of trading signals, I have to say that we were lucky again. The first buy signal near 1.0581 turned out to be strong and accurate. The price rebounded from it, and traders had to open long positions. By the middle of the US trading session, the price climbed up to the Kijun-Sen line, from which it also bounced. Here it was necessary to close the longs with about 55 points of profit and open new shorts. It was possible to get about 30 pips more profit on the short positions, as the pair went on to move down for the rest of the day. COT report In 2022, the COT reports for the euro are becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now the net position of non-commercial traders is again bullish and strengthens almost every week. The euro is growing but a fairly high value of the net position may point to the end of the upward movement or at least, to a correction. During the given period, non-commercial traders opened 8,600 long positions, whereas the number of short positions rose by 8,500. Thus, the net positions fell by 100. Notably, the green and red lines of the first indicator have moved far apart from each other, which may mean the end of the ascending trend (which wasn't actually an uptrend because the upward movement of the last two and a half months fits under the "correction" category against the global downtrend). The number of long positions is 125,000 higher than the number of sell positions opened by non-commercial traders. Thus, the net position of the non-commercial group may continue to grow. However, the euro may remain unchanged. The overall number of short orders exceeds the number of long orders by 33,000 (711,000 vs. 678,000). H1 chart of EUR/USD EUR/USD is still in a high position on the one-hour chart, although it has hardly settled below the critical line. So far, we're not sure whether it will continue to move down since there's already signs that the market is flat. Lines of the Ichimoku indicator may soon merge with each other and lose all meaning. We should now rely on the 1.0581-1.0658 horizontal channel. On Wednesday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658, 1.0736, 1.0806, as well as Senkou Span B (1.0589) and Kijun Sen (1.0656). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are no important reports or events scheduled for today in the EU and the US. And the pattern will remain the same all throughout this week. So far, all this leads to a flat... What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group. Relevance up to 05:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330372
The GBP/USD Pair May Trade Horizontally Today

There May Be More False Signals For The GBP/USD Pair

Paolo Greco Paolo Greco 21.12.2022 08:49
M5 chart of GBP/USD On Tuesday, GBP/USD had a tendency to move down, but this type of movement seems more like a flat. It is not surprising that we see such movement ahead of the Christmas and New Year holidays. Traders leave the market, volatility drops and there is no macroeconomic and fundamental background. So we may see a similar movement for another week or two. Basically, there is nothing to analyze in the currency market now, you can only rely on "bare technique". At the moment, the pound is between 1.2106 and 1.2185, but these levels cannot be considered as the limits of a horizontal channel. If we have a fairly clear channel for the euro, then there's nothing like that for the pound. As a consequence, there may be more false signals for the GBP/USD pair. Oddly enough, there were almost no false signals on Tuesday. Only the first sell signal on crossing 1.2106-1.2120 had failed. The price did not even manage to pass 20 points in the right direction after the signal appeared, so the deal closed with a loss. The next buy signal was much better, and the pair managed to reach the nearest target level of 1.2185, which made a profit of about 35 pips. The rebound from 1.2185 should have been worked out, too, by a short position, which brought about another 30 pips profit, as the price dropped to the target area of 1.2106-1.2120. And formed another buy signal in it, which also made it possible for traders to make profit, as the price moved up for the rest of the day. As a result, three profitable deals and one losing one - not bad for a flat. COT report The latest COT report showed a decrease in bearish sentiment. During the given period, non-commercial traders opened 3,500 long positions and 1,000 short positions. The net position grew by about 2,500. This figure has been on the rise for several months. Nevertheless, sentiment remains bearish, and GBP/USD is on the rise for no reason. We assume that the pair may well resume the downtrend soon. Notably, both GBP/USD and EUR/USD now show practically identical movement. However, the net position on EUR/USD is positive and negative on GBP/USD. Non-commercial traders now hold 58,000 short positions and 32,000 long ones. The gap between them is still wide. As for the total number of open longs and shorts, the bulls have a 5,000 advantage here. Technical factors indicate that the pound may move in an uptrend in the long term. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD fell below the lines of the Ichimoku indicator. In normal conditions, this would've helped in continuing the downward movement, but now this may not mean anything since the pair could be in a flat for quite some time. On Wednesday, the pair may trade at the following levels: 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259, 1.2342, 1.2429-1.2458. The Senkou Span B (1.2274) and Kijun Sen (1.2256) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. There are no important events planned for today in the UK and the US, so there is a high probability that the flat will persist. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group Relevance up to 06:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330376
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The GBP/USD Pair Action Signaled That The Downside Movement Ended

InstaForex Analysis InstaForex Analysis 21.12.2022 08:52
The GBP/USD pair dropped a little in the short term as the Dollar Index tried to rebound. Now, it is trading at 1.2166 at the time of writing. After its strong growth, a temporary retreat was natural. The instrument could test and retest the immediate downside obstacles before jumping higher. The price action signaled that the downside movement ended and that the buyers could take the lead. Fundamentally, the UK is to release the CBI Realized Sales and the Public Sector Net Borrowing but I don't think that the indicator will have an impact. Later today, the Canadian inflation figures could have a big impact on the USD as well. Also, the US CB Consumer Confidence could increase from 100.2 to 101.0. This is seen as a high-impact event as well. GBP/USD Retests Sellers! Technically, the rate dropped but it has failed to take out the 1.2133 - 1.2106 zone. Now, it has come back above the descending pitchfork's median line (ml). So, the median line and the demand zone represent downside obstacles. Testing and retesting these levels could announce a new bullish momentum. New false breakdowns could signal exhausted sellers and strong buyers. GBP/USD Forecast! As long as it stays above 1.2133 and above the median line (ml), the GBP/USD pair could develop a new bullish momentum. Testing and retesting, registering false breakdowns could bring a new long opportunity. Relevance up to 06:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305727
Further Downside Of The AUD/JPY Cross Pair Is Expected

EUR/AUD Pair Has The Potential To Be Corrected Down

InstaForex Analysis InstaForex Analysis 21.12.2022 08:55
On the 4-hour chart the EUR/AUD cross currency pairs after successfully breaking above the 1.5753 level can be seen: 1. Deviation between price movement with Awesome Oscillator indicator. 2. The appearance of the first Wiseman (Bearish Divergent Bar). Based on the two things above, in the near future EUR/AUD has the potential to be corrected down to the level of 1.5780 as the main target and the 1.5495 level as the second target, but considering that the Christmas and New Year holidays are approaching there is a possibility that volatility in the market will decrease so that if it is on its way heading towards the targets mentioned earlier, suddenly EUR/AUD reverses upwards and goes back up past the 1.5983 level, the downside scenario described earlier will become invalid and cancel itself. Relevance up to 05:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/116113
Analysis Of The AUD/USD Commodity Currency Pair's Price

The AUD/JPY Cross Currency Pair Will Have The Potential To Be Corrected

InstaForex Analysis InstaForex Analysis 21.12.2022 08:58
It seems that the AUD/JPY cross currency pair will try to test the support area in the near future at the range 87.70 - 87.28. If this level is strong enough to halt its decline, AUD/JPY will have the potential to be corrected, rally up to the 88.84 level as the main target. the area 89.35-89.91 as the second target with a note that the support area level 87.70-87.28 is able to halt its decline, but if the opposite happens the support area is not strong enough to hold its decline, then the upward rally scenario described earlier will cancel itself. Relevance up to 05:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/116119
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

FX: The Last Czech National Bank Meeting Of The Year, Downside Risks For The Pound In The New Year

ING Economics ING Economics 21.12.2022 09:18
Markets are unlikely to be moved by any data release over the Christmas period, but a bumpy exit from the zero-Covid policy in China and developments in the energy market might cause a deterioration in global risk sentiment. We remain bullish on the dollar in early 2023. The Czech National Bank will close this year's meetings of central banks in the region.   This is the last FX Daily of 2022. We'll resume publication on Wednesday, 4 January 2023. We wish all our readers a happy holiday season! USD: No key data in the next two weeks Markets are still digesting yesterday’s hawkish surprise by the Bank of Japan as we approach the quietest period of the year. The market reaction to the BoJ shock has seen a widespread sell-off in bonds, but no negative spillover into Western equities. USD/JPY is trading around 131.80 at the time of writing: closing the year above 130.00 may be a welcome development at the BoJ as it could signal that speculation on further policy normalisation has – for now – been kept in check. Today, markets will look at the Conference Board consumer confidence as well as home sales data. Yesterday, housing starts came in above consensus while building permits plunged much more than expected. In neighbouring Canada, expect CPI data to impact the Canadian dollar this afternoon. Since this is the last FX Daily of the year, we should also look at potential FX drivers in the two weeks ahead. On the data side, the US calendar includes personal income, PCE and durable goods orders for November (on 23 December) as well as Dallas and Richmond Fed manufacturing indices on 27-28 December. For the time being, there are no scheduled Fed speakers until the Fed minutes release on 4 January. We doubt data will be able to shake markets in the low-volatility environment of the festive period. News from China and on the energy crisis is more likely to drive any significant move if anything. In China, an increasing number of unofficial reports suggest that the actual death toll may be considerably larger than the reported one: should this be backed by more evidence, markets may increasingly doubt the sustainability of China’s zero-Covid exit path, with negative implications for the yuan, Asian EMFX, and high-beta currencies. On the energy side, Russia’s potential retaliation to the EU cap on gas prices, a possible re-escalation in the conflict in Ukraine and weather-related news (which has been a key driver of gas prices lately) may all have repercussions on the FX market. European currencies continue to look quite vulnerable from this point of view. We think DXY could close the year around the current levels. In line with its seasonal trend, December has been a soft month for the greenback. It’s worth remembering that the dollar rose in each of the past four years in January. Our view for early 2023 is still one of dollar recovery. Francesco Pesole EUR: Keeping an eye on energy market volatility We think EUR/USD may find some stabilisation around 1.0600 into year-end as volatility starts to drop. A drop to sub-1.0500 levels is, however, possible should market sentiment deteriorate, especially on the energy side. There are no major data releases to highlight in the next two weeks for the euro, at least until the German CPI figures for December are released (3 January). No European Central Bank speakers are scheduled. Elsewhere in developed Europe, keep an eye on today’s release of the Swedish Economic tendency survey. In Norway, it will be worth keeping monitoring daily FX purchases published by Norges Bank on 30 December. The Bank has scaled down krone sales in the past two months, and – as discussed here – this may signal appetite for a stronger currency. Expect some NOK volatility around the release. We see EUR/SEK and EUR/NOK enter the new year from the 11.00-11.10 and the 10.45-10.55 ranges, respectively. Francesco Pesole GBP: Outlook for 2023 still looks challenging While dealing with multiple strikes, the UK will not see a lot of data releases in the coming two weeks, with tomorrow’s first GDP data unlikely to move the market. There are no scheduled Bank of England speakers until the first week of January. We continue to see mostly downside risks for the pound in the new year, as a recessionary environment and sensitivity to market instability may cause a return to the 1.15-1.18 range in cable. For this festive season, GBP/USD may hold around 1.2100-1.2250. Francesco Pesole CEE: CNB in a comfortable situation Yesterday's meeting of the National Bank of Hungary brought a surprisingly hawkish market reaction. The NBH managed to maintain its "higher rates for longer" stance while announcing that the programme of providing hard currency to energy importers will be extended for the coming months. Both represent positive news for the forint. Implied yields have risen again to near-record levels, providing a shield against potential sell-offs. In addition, falling gas prices have once again driven FX in the CEE region in recent days, and given that Hungary is the most energy-dependent country in the region, this is translating positively into a strengthening forint. Thus, all in all, everything speaks in favour of further strengthening of the forint, strengthening our view and we expect 400 EUR/HUF levels in coming days. Today, we will see the last Czech National Bank meeting of the year. In line with the market, we expect rates and the FX regime to remain unchanged. The board members have been very open in their talks over the past few days, so we are unlikely to see any surprises. Although inflation rose more than the market expected in November, it is still below the CNB's forecast due to government measures. Moreover, the koruna has been below the CNB's intervention level for a long time and in fact yesterday it reached its strongest level against the euro in 11 years. Thus, according to the new reaction function, the central bank is in a comfortable situation. For now, we believe the koruna is mainly supported by global conditions, falling gas prices and a weaker US dollar. In both cases, we believe this is temporary and moreover, the positioning seems mostly long within the region in the case of the koruna. Thus, we think koruna will hit its limit soon.  Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
China's Ninth Straight Month of Gold Holdings Increase; Oil Resilient Despite Russian Tanker Incident; Dollar Supported by Bond Supply Concerns

The USD/INR Pair Struggles To Defend The Previous Day’s Gains

TeleTrade Comments TeleTrade Comments 21.12.2022 09:30
USD/INR stays mildly bid, struggles for clear directions amid mixed clues. Markets pare BOJ-led moves but the corrective bounce lack momentum. US Dollar recovers ahead of CB Consumer Confidence, Oil cheers hopes of more stimulus. USD/INR stays defensive near 82.70, printing mild gains during the retreat on early Wednesday. In doing so, the Indian Rupee (INR) pair struggles to defend the previous day’s gains as the US Dollar rebound jostles with the firmer Oil prices, as well as the market’s cautious optimism. US Dollar Index (DXY) picks up bids to pare recent losses around 104.10, snapping a two-day downtrend with mild gains, as US Treasury yields remain firmer despite the overall market consolidation. That said, the DXY dropped the most in a week the previous day as the greenback traders feared less Japanese bond-buying of the US Treasury bonds due to the BOJ action. Japan is the biggest holder of the US Treasury bonds and the latest move allows Tokyo to put more funds into the nation than letting it flow outside. That said, the 10-year counterpart rose more than the two-year ones and hence reduced the yield curve inversion that suggests the odds of the recession. On the other hand, WTI crude oil seesaws near a short-term key hurdle around $76.50, up 0.30% intraday by the press time. In doing so, the black gold cheers the broad-based US Dollar weakness, as well as cautious optimism in the market. Adding strength to the run-up could be the latest inventory data from the private data provider American Petroleum Institute (API).  It should be noted that the hopes of China’s more investment, due to the World Bank’s cutting of growth forecasts for the dragon nation and the policymakers’ readiness to battle the recession fears, favor the market sentiment. On the same line could be the US Senate’s advancement of the $1.66 trillion government spending bill, as well as Japan’s upbeat economic forecasts. While portraying the mood, the US 10-year Treasury yields grind near a three-week high of 3.69% while the two-year bond coupons stay firmer around 4.26% by the press time. Further, Wall Street closed in green and allow stocks in the Asia-Pacific bloc to print mild gains of late. Additionally, yields on the two-year Japanese Government Bonds (JGBs) rose beyond 0.0% for the first time since 2015. Given the mixed clues and a light calendar ahead of the US Conference Board (CB) Consumer Confidence figures for December, expected at 101.00 versus 100.00 prior, the USD/INR pair is likely to remain sluggish. However, the downbeat fundamentals surrounding India, as compared to the US, keeps the Indian Rupee bears hopeful. Technical analysis Although the 10-DMA restricts immediate USD/INR downside near 82.60, upside momentum remains elusive unless witnessing a daily closing beyond the 83.00 hurdle.
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

The EUR/JPY Cross Currency Pair Is In Bearish Trend

TeleTrade Comments TeleTrade Comments 21.12.2022 09:33
EUR/JPY prints mild gains around the lowest levels in three months. 200-DMA probes bears but downbeat oscillators, key support break signal further downside. Early December swing low guards immediate recovery moves. EUR/JPY bears take a breather at a three-month low, picking up bids to 140.30 heading into Wednesday’s European session. In doing so, the cross-currency pair seesaws around the 200-DMA to pare the biggest daily slump since June 2016. Even so, bearish MACD signals, an absence of oversold RSI and sustained trading below the previous key support line from March 2022, now resistance around 141.85, keep the EUR/JPY bears hopeful. That said, the sellers need a daily closing below the 38.2% Fibonacci retracement level of March-October upside, close to 139.25, to retake control. Following that, September’s bottom surrounding 137.35 and 50% Fibonacci retracement near 136.40 could challenge the EUR/JPY bears before highlighting the golden ratio, namely the 61.8% Fibonacci retracement level at 133.55, will be in focus. Should the EUR/JPY prices remain bearish past 133.55, May’s bottom of 132.66 could act as the last defense of the bulls. Alternatively, recovery moves need to cross the December 02 low of 140.75 to convince short-term buyers. In that case, the support-turned-resistance trend line from March, near 141.85, could gain the bull’s attention. It’s worth noting that the EUR/JPY pair’s run-up beyond 141.85 could aim for the top marked in June and the monthly peak, respectively near 144.25 and 146.75. EUR/JPY: Daily chart Trend: Bearish
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The Kiwi's Pair (NZD/USD) Holds Lower Grounds

TeleTrade Comments TeleTrade Comments 21.12.2022 09:36
NZD/USD holds lower grounds near the intraday bottom surrounding the 0.6300 threshold as European traders flex muscles during Wednesday’s early hours. In doing so, the Kiwi pair traces the options market’s clues as the Risk Reversal (RR), calculated as the difference between call and put options, drops the most since early November 03. With the daily RR of -0.240 at the latest, the NZD/USD options market snaps consecutive four weeks of bullish signals with the latest weekly RR being negative. The reason could be linked to the US Dollar’s recovery, as well as downbeat New Zealand trade numbers for November. Additionally, mixed concerns surrounding China and anxiety over the bond market moves seem to also weigh on the NZD/USD prices. Looking forward, the US Conference Board (CB) Consumer Confidence figures for December, expected at 101.00 versus 100.00 prior, will be important to watch for fresh impulse. Additionally, headlines surrounding China, Japan and bond markets will also be crucial for clear directions. Also read: NZD/USD seesaws near 0.6350 even as New Zealand trade deficit increases  
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

Worries About Rising COVID-19 Cases In China Contribute To Capping Gains For The AUD/USD Pair

TeleTrade Comments TeleTrade Comments 21.12.2022 09:41
AUD/USD gains some positive traction on Wednesday, albeit lacks follow-through. The risk-on impulse benefits the Aussie; a modest USD strength caps the upside. The fundamental backdrop supports prospects for a further depreciating move. The AUD/USD pair struggles to capitalize on its modest intraday gains on Wednesday and faced rejection near the 0.6700 round-figure mark. The pair, however, sticks to a mildly positive bias through the early European session and is currently trading around the 0.6675-0.6680 region, just above the 100-day SMA support. A goodish recovery in the global risk sentiment - as depicted by the upbeat tone around the equity markets - is seen as a key factor lending some support to the perceived riskier Aussie. That said, the emergence of some US Dollar buying keeps a lid on any meaningful upside for the AUD/USD pair and warrants some caution for bullish traders. The USD draws some support from a modest uptick in the US Treasury bond yields, bolstered by the Fed's hawkish outlook. In fact, the US central bank indicated that it will continue to raise rates to crush inflation. Furthermore, the Bank of Japan's policy tweak, which triggered a sell-off in bond markets on Tuesday, act as a tailwind for the US bond yields. Apart from this, worries about rising COVID-19 cases in China contribute to capping gains for the AUD/USD pair. This, along with dovish Reserve Bank of Australia (RBA) minutes released on Tuesday, showing that policymakers considered leaving rates unchanged at the December meeting, suggests that the path of least resistance for spot prices is to the downside. Market participants now look forward to the US economic docket, featuring the release of the Conference Board's Consumer Confidence Index later during the early North American session. Traders will further take cues from the US bond yields and the broader risk sentiment, which will influence the USD price dynamics and provide some impetus to the AUD/USD pair.  
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Today's Release Has The Potential To Trigger Price Turbulence In The USD/CAD Pair

InstaForex Analysis InstaForex Analysis 21.12.2022 09:50
USD/CAD is falling this week, demonstrating a downtrend after five weeks of consecutive growth. So, the loonie was near 1.3250 in the beginning of November, but last Friday, the bulls tested the 37th figure. The 500-point march was accompanied by corrective pullbacks, but in general, the uptrend was clearly visible. Conflicting results on the Bank of Canada's December meeting only fueled the bullish sentiment. Despite the greenback's shaky position, the USD/CAD bulls were rising, eventually climbing to the 37th figure. But their confidence ran out in this price area. Obviously, the bulls need a source of information to boost them so they can work on a bullish attack. However, bears also need some informational boost to develop a bearish pullback to 1.3550 (upper limit of the Kumo cloud on D1), and then to 1.3460 (lower limit of this cloud on the same chart). Today's report may "rattle" the pair. At the start of Wednesday's U.S. trading session, Canada will release key data on the country's inflation growth. And in light of the controversial results of the Bank of Canada's December meeting, this report is particularly significant to the Loonie. Two weeks ago, the Canadian central bank raised its interest rate by 50 basis points. Bank of Canada Governor Tiff Macklem lamented the high inflation rate and positively assessed the dynamics of the national economy growth in the third quarter. On the one hand, the formal results of the December meeting were in favor of the Canadian dollar. On the other hand, a closer look at these results suggests opposite conclusions. By the way, the Canadian dollar reacted negatively to the stance of the accompanying statement, falling in many currency pairs. And here's why. Behind the central bank's statement that inflation in Canada is still at an unacceptably high level is an inherently opposite clarification. The Bank of Canada said in an accompanying statement that the three-month rates of change in core inflation have come down - and according to central bank economists, this is "an early indicator that price pressures may be losing momentum." In other words, the central bank saw the first signs of a slowdown in inflationary growth, with all the consequences that this implies. In fact, the possible consequences of a further decline in inflation are also mentioned in the text of the final communique. The phrase in question is worth quoting in full: The "Governing Council will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target". Such preceding statements add value to an already significant macro report. This suggests that today's release has the potential to trigger price turbulence in the USD/CAD pair, especially if the final numbers deviate from projections. Let me remind you that in October, the core consumer price index (which excludes volatile food and energy prices), in annualized terms, declined to 5.8% from the previous 6% value. Instead of a decline, most experts expected an increase to 6.3%. According to preliminary forecasts, the downtrend will develop in November. Thus, according to the majority of experts, the core CPI will come out at 5.6% (y/y): this could be the weakest growth rate of the indicator since March 2022. As for overall inflation, a decline in indicators is also expected - both in monthly and annual terms. In particular, in monthly terms, the index should decline into negative territory (-0.1%) after growth to 0.7% in October. On a year-on-year basis, the index is likely to come out at 6.6% (the weakest growth rate since February of this year). As we can see, the forecasts are rather weak, so if the report turns out to be in the red zone, the Canadian dollar will be under a lot of pressure. In such a case, the pair might retest the 37th figure again, updating the current week's high (1.3702). Take note that the resistance level is slightly higher, at 1.3760 (the upper line of the Bollinger Bands indicator on the daily chart), so the USD/CAD bulls have a good chance to break through the 37th figure, if the current inflation report turns out to be a disappointment. However, an alternative scenario is also possible: if the report is in the green zone, the bears could develop a bearish rollback to 1.3550 (Kumo cloud upper limit at D1) and then to 1.3460 (Kumo cloud lower limit on the same chart). At the moment, it would be best to maintain a wait-and-see attitude on the pair: the inflation report will determine the price movement vector in the medium term. Relevance up to 12:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330374
Analysis Of The EUR/JPY Pair Movement

Higher Yields Will Mean Unrealized Losses On Japanese Government Bonds

InstaForex Analysis InstaForex Analysis 21.12.2022 09:51
Yen shot up on Tuesday after the Bank of Japan made a very bold decision on monetary policy. However, what is more important is the statements of Governor Haruhiko Kuroda, which gave investors an indication of what to expect when the policy ends. Yesterday, Kuroda shocked markets by announcing that he will allow 10-year bond yields to rise to around 0.5%. This is obviously a strategic adjustment to buy time in determining the yield curve next year following the changes in central bank policy, when interest rates are forecast to rise. Currently, the yield on 10-year Japanese securities is at 0.46%. This has led to a rise in Japanese bank stocks as investors are waiting for higher returns from financial institutions. Kuroda said all decisions taken were in order to increase the effectiveness of monetary policy. Given that his term ends next year, there will be at least two more meetings under his leadership, which means that his successor will complete the path to policy normalization. But there are those who point out that higher yields will mean unrealized losses on Japanese government bonds, including those held by the Bank of Japan. A sustained policy change could also hit Japanese stocks, as well as break the latest bond yield peg and trigger a sell-off in dollar in favor of yen. That will lead to Japanese investors divesting from overseas investments, which could result in a sell-off in emerging markets. As mentioned earlier, the forex market reacted to this by moving quite strongly. In USD/JPY, there is a strong support around 130.20, and its breakdown will lead to another sell-off around 126.20 to 121.10. In EUR/USD, demand remains quite weak, but there is a chance to return to December highs if the European Central Bank retains its hawkish monetary policy. However, traders need to keep the quote above 1.0660 because only by that will euro hit 1.0700 and 1.0740. In case of a decline below 1.0580, pressure will surge, which will push the quote to 1.0540 and 1.0490. Relevance up to 05:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330368
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

The Yen’s Upswing Was Triggered By The Unexpected Bank of Japan's Move

Kenny Fisher Kenny Fisher 21.12.2022 13:11
The Japanese yen is unchanged on Wednesday, taking a pause after posting huge gains a day earlier. In the European session, USD/JPY is trading at 131.68. BoJ yield move sends yen soaring It was a day to remember for the Japanese yen, which gained a staggering 3.7% against the dollar. USD/JPY fell as low as 130.56, its lowest level since August. The yen’s upswing was triggered by the Bank of Japan, which stunned the markets by widening the yield control band to 50 basis points, up from 25 bp. The move, which was announced at the BoJ’s policy meeting, was completely unexpected as policy makers gave no hints of any changes prior to the meeting. The markets had assumed that any major policy moves would wait until after Governor Kuroda’s term ends in April. The band for 10-year yields has widened, but it’s important to remember that yield curve control policy, although modified, remains in effect, as the target of 0% hasn’t changed. At a press conference after the meeting, Governor Kuroda insisted that the move was not an interest hike. This is technically correct, although the effect of the wider band is the same, as Japanese bonds can now pay higher interest rates since the cap on yields is higher. Now that the dust has settled, the question is what’s next from the BoJ? The tweak to the yield control band can be viewed as a baby step towards normalisation, after decades of an ultra-loose monetary policy. There is now talk of the BoJ raising rates out of negative territory next year, which would mark a sea change in policy. The BoJ meets next in January, and the markets have priced in a rate hike at 22%.   USD/JPY Technical USD/JPY has support at 131.13 and 130.15  There is resistance at 132.83 and 134.12 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Mixed US Activity Picture: July Rate Hike Likely, Followed by a Pause

The EUR/USD Pair Keeps Trading Above $1.06, The USD/JPY Is Below 132

Kamila Szypuła Kamila Szypuła 21.12.2022 12:10
The USD gets some support from a slight increase in US Treasury yields, supported by the Fed's hawkish outlook. In fact, the US central bank has announced that it will continue to raise interest rates to suppress inflation. Moreover, the Bank of Japan's policy modification that sparked a sell-off in bond markets on Tuesday is acting as wind in the sails for US bond yields. Market participants are now awaiting economic data from the United States, including the release of the Consumer Confidence Index. EUR/USD The euro holds its level above $1.06, and today the mood is bearish. The current pair is trading below 1.0620. The US dollar is regaining some positive traction and reversing some of the overnight sharp decline which is seen as a headwind for the EUR/USD pair. Wednesday morning kicked off with German GfK consumer confidence data (see economic calendar below) for January which beat expectations suggestive of a more upbeat outlook for the third consecutive print. With the dollar trading higher today, EUR/USD has managed to utilize this economic data to keep in the green this morning. Read next: Indonesia Has Potential In The Development Of Solar Energy| FXMAG.COM GBP/USD Cable Market price is down today. At the start of the day, GBP/USD traded above 1.2190 and is currently trading at 1.2130. The US Dollar regains some positive traction and turns out to be a key factor acting as a headwind for the GBP/USD pair. On the other hand, the British pound is weakened by the dovish outcome of last week's Bank of England (BoE) meeting. The US Economic Report includes the Conference Board's Consumer Confidence Index, due to be released later during the early North American session. This, along with US bond yields and broader market sentiment for risk, will weigh on USD price dynamics and provide some impetus to GBP/USD. After that, the focus will shift to the publication of final UK GDP figures for Q3. AUD/USD The Aussie Pair trading rebounds below $0.67 today. It is currently above 0.6675. The Aussie and The Kiwi (NZD) are among the most liquid of these carry trades and took the biggest hit when the BOJ badly wrong-footed a very thin market in the week before Christmas. A good recovery in global risk attitudes – indicated by the optimistic tone in equity markets – is seen as a key factor supporting the perception of riskier Australians. That said, the appearance of some US dollar purchases limits any significant gains for the AUD/USD pair. USD/JPY The USD/JPY Pair is currently trading at June levels. Latest data helped Yen with effect on USD/JPY trading level in range 131.73-131.76 The bears of the pair are waiting for a return to the downtrend The currency pair remains vulnerable amid mixed comments from Japanese authorities about the Bank of Japan's surprising policy move The Bank of Japan kept the policy equilibrium rate at -0.10% but adjusted its Yield Curve Control (YCC) by setting a range of +/- 0.50% around zero for Japanese government bonds (JGB) for up to 10 years. Previously, the YCC target was +/- 0.25% around zero. The bond market had been moving into the upper 0.25% band for some time amid speculation that the bank would have to step down at some point in the face of accelerating inflation. BoJ Governor Haruhiko Kuroda remained steadfast in preparations for yesterday's meeting that the policy would be resolutely upheld. Source: investing.com, dailyfx.com, finance.yahoo.com
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

A Positive Close On The New York Stock Exchang, 2414 Securities Rose In Price

InstaForex Analysis InstaForex Analysis 22.12.2022 08:00
At the close of the day on the New York Stock Exchange, the Dow Jones rose 1.60%, the S&P 500 rose 1.49%, the NASDAQ Composite index rose 1.54%. Dow Jones The leading performer among the components of the Dow Jones index today was Nike Inc, which gained 12.57 points or 12.18% to close at 115.78. Quotes Boeing Co rose by 7.71 points (4.09%), ending trading at 196.00. Caterpillar Inc rose 2.80% or 6.59 points to close at 241.73. The leaders of the fall were Walgreens Boots Alliance Inc, which shed 0.93 points or 2.35% to end the session at 38.60. The Walt Disney Company rose 0.10 points (0.11%) to close at 86.92, while McDonald's Corporation rose 0.91 points (0.34%) to close at 268. 16. S&P 500 Leading gainers among the S&P 500 index components in today's trading were Nike Inc, which rose 12.18% to 115.78, APA Corporation, which gained 5.76% to close at 46.67, and Etsy Inc, which rose 5.69% to end the session at 134.33. The leaders of the fall were Host Hotels & Resorts Inc, which shed 6.09% to close at 15.88. Shares of Walgreens Boots Alliance Inc shed 2.35% to end the session at 38.60. Quotes Western Digital Corporation fell in price by 2.18% to 31.38. NASDAQ The top gainers among the components of the NASDAQ Composite in today's trading were Gorilla Technology Group Inc, which rose 69.79% to 4.74, SINTX Technologies Inc, which gained 57.16% to close at 11.74. as well as shares of Rekor Systems Inc, which rose 56.45% to close the session at 0.93. The leaders of the fall were Meiwu Technology Co Ltd, which shed 83.43% to close at 0.32. Shares of Core Scientific Inc lost 75.53% and ended the session at 0.05. Quotes Icecure Medical Ltd fell in price by 46.92% to 1.38. Numbers On the New York Stock Exchange, the number of securities that rose in price (2414) exceeded the number of those that closed in the red (679), while quotes of 99 shares remained virtually unchanged. On the NASDAQ stock exchange, 2469 companies rose in price, 1219 fell, and 186 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 6.56% to 20.07. Gold Gold futures for February delivery lost 0.04%, or 0.65, to hit $1.00 a troy ounce. In other commodities, WTI crude for February delivery rose 2.90%, or 2.21, to $78.44 a barrel. Futures for Brent crude for February delivery rose 2.91%, or 2.33, to $82.32 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair was unchanged 0.08% to 1.06, while USD/JPY was up 0.47% to hit 132.32. Futures on the USD index rose 0.24% to 103.85. Relevance up to 03:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/305885
The AUD/USD Pair’s Downside Remains Off The Table

AUD/USD Pair And The First Signal Of The Continuation Of The Local Growth

InstaForex Analysis InstaForex Analysis 22.12.2022 08:01
Yesterday, the Australian dollar reached the target support at 0.6642 and is now trying to rise above resistance at 0.6730. Once it settles above this level, it can continue rising to the nearest resistance at 0.6799. In this case, the Marlin oscillator will be in the positive area (above the zero line) and after reaching 0.6799, AUD will be able to take off in the range of 0.6894-0.6917. But it is currently too early to speak about growth, maybe the price will go under 0.6730, because Marlin is quite stable in the negative territory. The key level for the short-term downtrend is 0.6590. The MACD line is close to it, and from this level we will find out whether the price reversal will be a medium-term growth, or if we will see a medium-term decline when the price crosses the supports. On the four-hour chart, the price moved above the MACD line, the Marlin oscillator in a strong rising position. This is the first signal of the continuation of the local growth to the nearest level of 0.6799 (November 15 high). Relevance up to 03:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330470
The Pound (GBP) Will Probably Continue To Move Sideways

The Pound (GBP) Will Probably Continue To Move Sideways

InstaForex Analysis InstaForex Analysis 22.12.2022 08:03
Yesterday, the British pound fell by 100 pips due to a sharp increase in the budget deficit from £13.37bn in October to November's £21.20bn. GBP/USD did not receive any support from the sharp increase in retail sales index from the CBI, which showed 11 in December against -19 a month earlier. But this morning, the currency pair is rising, pulling up against the neutral state of other currencies. The 1.2155 level becomes a resistance. It is still easier for the price to go down to 1.1933. On the four-hour chart, the downward movement is hampered by the double convergence, although it isn't strong. If GBP does reach 1.1933, it will probably happen next week. The pound will probably continue to move sideways, but below 1.2155.     search   g_translate     Relevance up to 03:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330472
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

EUR/USD Pair Is Expectes Downward Movement

InstaForex Analysis InstaForex Analysis 22.12.2022 08:05
There is no way the euro can leave the range of 1.0595-1.0645. Last week's trading volumes were high, but now investors are obviously leaving the market for the Christmas weekend till the 27th, therefore, the market can thin out by today or tomorrow, and EUR can leave the current range. The oscillator signal line lies on the zero line; this is a dangerous symptom of an upward reversal from it, followed by the price leaving this range and moving upwards, where the target is the 1.0758/87 range. According to the main scenario, we expect downward movement, the nearest target is 1.0470. On the four-hour chart, there is nothing more to add to the basic ideas. In order to develop the main scenario, the price needs to settle under 1.0595, which means that EUR will automatically settle under the MACD line. Marlin is trying to enter the positive area, but so far it is within the framework of consolidation. A sign of growth is when the price settles above the upper limit of the range at 1.0645. Relevance up to 03:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330474
The Japan Central Bank’s Decision Sent The Yen (JPY) Sliding

In The Near Future The USD/JPY Pair Will Try To Drop

InstaForex Analysis InstaForex Analysis 22.12.2022 08:12
USD/JPY on the 4-hour chart seems to be continuing its bearish bias after being corrected and testing the 131.78 level now in the near future USD/JPY will try to fall down towards the 130.58 level where the bearish bias of this major currency pair has been confirmed by its movement. is below the 100 EMA but if on the way down there is a sudden upward correction which exceeds the 132.53 level then the decline scenario described will become invalid and cancel by itself. Relevance up to 04:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/116175
The Upside Of The EUR/USD Pair Remains Limited

EUR/USD Pair: There Is No Bearish Correction Even After Weeks Of Strong Growth

Paolo Greco Paolo Greco 22.12.2022 08:26
M5 chart of EUR/USD EUR/USD is still trading within the 1.0581-1.0658 horizontal channel. In fact, this is a very good moment, as we have clear guidelines for the pair's movement, despite the fact that a flat was formed in the market. At least the pair does not form false signals, which leads to losses. However, there is nothing more to say about the technical pattern. The pair, ignoring the flat, is still in a high position and there is no bearish correction even after weeks of strong growth. However, the coming Christmas and New Year's holidays will cancel the desire to trade, so the flat might last for another week or two, or maybe even more. There were no important events or reports in the EU and the US on Wednesday. I still expect a bearish correction in the medium term, but at this time, a flat. On Wednesday, EUR only approached the important line just once. It happened during the US trading session. It reached the Senkou Span B line with minimal error, so this rebound could be regarded as a buy signal. However, it was formed quite late, so it was not necessary to open a long position. Also, take note that the Senkou Span B line might converge with the Kijun-Sen in the near future, so I won't adjust just yet. These lines lose their strength in a flat. COT report In 2022, the COT reports for the euro are becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now the net position of non-commercial traders is again bullish and strengthens almost every week. The euro is growing but a fairly high value of the net position may point to the end of the upward movement or at least, to a correction. During the given period, non-commercial traders opened 8,600 long positions, whereas the number of short positions rose by 8,500. Thus, the net positions fell by 100. Notably, the green and red lines of the first indicator have moved far apart from each other, which may mean the end of the ascending trend (which wasn't actually an uptrend because the upward movement of the last two and a half months fits under the "correction" category against the global downtrend). The number of long positions is 125,000 higher than the number of sell positions opened by non-commercial traders. Thus, the net position of the non-commercial group may continue to grow. However, the euro may remain unchanged. The overall number of short orders exceeds the number of long orders by 33,000 (711,000 vs. 678,000). H1 chart of EUR/USD EUR/USD is still in a high position on the one-hour chart, although it has hardly settled below the critical line. So far, we're not sure whether it will continue to move down since there's already signs that the market is flat. Lines of the Ichimoku indicator may soon merge with each other and lose all meaning. We should now rely on the 1.0581-1.0658 horizontal channel. If EUR manages to go beyond it, then we can count on some trend movement. On Thursday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658, 1.0736, 1.0806, as well as Senkou Span B (1.0589) and Kijun Sen (1.0656). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are no important reports or events scheduled for today in the EU. A not so important GDP report for the third quarter will be published in the US. But "every cloud has a silver lining", so let's not miss it. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 05:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330480
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

The GBP/USD Price Often Reverses Against The Trend

Paolo Greco Paolo Greco 22.12.2022 08:29
M5 chart of GBP/USD On Wednesday, GBP/USD continued a not so strong downward movement, which seems like a flat. The price often reverses against the trend and rolls back up. And these pullbacks and corrections are very difficult to predict, because the lines are starting to get worse and there is no fundamental and macroeconomic background. So, at least, we have some trend movement, but it is not easier to trade in it than in the flat. Nonetheless, the British currency is correcting somehow, which is what I have been waiting for for more than 3 weeks. This is still better than if the pair stood in one place and formed bundles of false signals in an absolute flat. The end of the week may turn out to be a little more interesting than its first half, since at least some reports will be published in the UK and the US. Speaking of trading signals, the situation wasn't the worst. The very first signal near 1.2185 was formed with minimal error, so traders could open short positions. Later, the price fell below 1.2106, but quickly returned to the area above it, so the short should have been closed while longs should have been opened. We managed to earn about 50 pips on it. It was not possible to gain anything using the longs since the pair failed to reach the target level, but it passed in the right direction by 20 points, so a Stop Loss should have been set to Breakeven. The next buy signal also turned out to be false, but the price did not pass the necessary 20 points, so you could lose on this position. The next signal near 1.2106 should have been ignored. All in all, you could end the day with a bit of profit. COT report The latest COT report showed a decrease in bearish sentiment. During the given period, non-commercial traders opened 3,500 long positions and 1,000 short positions. The net position grew by about 2,500. This figure has been on the rise for several months. Nevertheless, sentiment remains bearish, and GBP/USD is on the rise for no reason. We assume that the pair may well resume the downtrend soon. Notably, both GBP/USD and EUR/USD now show practically identical movement. However, the net position on EUR/USD is positive and negative on GBP/USD. Non-commercial traders now hold 58,000 short positions and 32,000 long ones. The gap between them is still wide. As for the total number of open longs and shorts, the bulls have a 5,000 advantage here. Technical factors indicate that the pound may move in an uptrend in the long term. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD is still trading below the lines of the Ichimoku indicator. Therefore, the downtrend persists, but the pound is moving down in a "shaky" manner, so it is not always possible to make a profit. Also, GBP might go into a flat soon. On Thursday, the pair may trade at the following levels: 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259, 1.2342, 1.2429-1.2458. The Senkou Span B (1.2274) and Kijun Sen (1.2146) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. Today, the UK and the US will publish their third quarter GDP reports. Therefore, the market might show a bit of reaction, but only if the results deviate from the forecasts. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 05:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330482
The Pound Is Now Openly Enjoying A Favorable Moment

The Cable Market (GBP/USD) Is Likely To Continue The Technical Rebound

InstaForex Analysis InstaForex Analysis 22.12.2022 08:08
Early in the European session, the British pound (GBP/USD) is trading at 1.2109. It is rebounding after reaching a low of 1.2054 yesterday in the American session. It is currently trading below the 21 SMA and within a falling wedge pattern whose break could lead to a bullish movement in the British pound in the next few days. In case there is a technical bounce around this technical figure between 1.2045 or in case it falls towards the 200 EMA located at 1.2021, it could be considered an opportunity to buy with targets at 1.2145 and 6/8 Murray (1.2207). The US dollar index (UDX) recovers after heavy losses of the previous day which in turn is considered a key factor putting downward pressure on GBP/USD. However, the dollar is likely to remain under downward pressure until the end of the year, which benefits the recovery of the British pound. We expect a strong technical bounce to occur around the 200 EMA (1.2021) or around the psychological level of 1.20. Only a significant break below these supports could cause strong bearish pressure and the British pound could fall to the area of 1.15 in the medium term. Conversely, a sharp break above 1.2145 could be a clear signal to buy the British pound with targets at 1.2207 (6/8 Murray) and 1.2323. On the contrary, in case the British pound fails to break the strong resistance of 1.2145, we could expect a decline and a continuation of the bearish movement and GBP/USD could fall towards the 200 EMA around 1.2021. According to the 4-hour chart, we can see that the eagle indicator has reached the extremely oversold area. It is likely to continue the technical rebound in the next few hours and could reach levels of 1.23 in the next few days. Relevance up to 04:00 2022-12-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305889
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The GBP/USD Pair Rebounded As The Dollar Index Remains Under Pressure

InstaForex Analysis InstaForex Analysis 22.12.2022 08:33
1.2120 at the time of writing. It has bounced back as the Dollar Index remains under pressure. You already know from my analyses that the DXY is in a major corrective phase. Fundamentally, the US and UK data came in mixed yesterday. Today, the UK Final GDP could drop by 0.2%, the Current Account could be reported at -20.0B, while Revised Business Investment may report a 0.5% drop. On the other hand, the US Final GDP could report a 2.9% growth, the Final GDP Price Index may register a 4.3% growth, CB Leading Index is expected to drop by 0.5%, while the Unemployment Claims indicator could increase from 211K to 221K. GBP/USD Rebound! The instrument is challenging the descending pitchfork's median line (ml). This stands as a dynamic resistance. As you can see on the H1 chart, the rate drops along the median line. It has failed to stabilize above or below the sliding lines (sl, sl1). Yesterday's low of 1.2055 represents a static downside obstacle. The rate could slip lower as long as it stays below the 1.2133, median line, and under the upside sliding line (sl1). A valid breakout above the upside sliding line (sl1) could invalidate a deeper drop and could announce a potential lege higher. GBP/USD Forecast! Testing and retesting the resistance levels, registering only false breakouts could announce a new potential drop. Still, only a new lower low, a valid breakdown below 1.2055 confirms a deeper drop. This scenario could announce a potential drop toward the lower median line (lml). Jumping and stabilizing above the sl1 could bring new long setups. Relevance up to 07:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305920
The USD/CHF Pair Is All Set To Revisit The Monthly Low

The USD/CHF Pair Ended In The Red On Wednesday

TeleTrade Comments TeleTrade Comments 22.12.2022 08:59
USD/CHF takes offers to refresh intraday low, down for the fourth consecutive day. US Dollar traces a pullback in Treasury yields amid mixed sentiment, holiday mood. Firmer US data allowed greenback to recover but hawkish statements in SNB quarterly report challenged USD/CHF bulls. US GDP, PCE details will be crucial for short-term directions amid holiday mood. USD/CHF sellers keep the reins around the mid-0.9200s as they refresh intraday low during a four-day downtrend early Thursday. The Swiss Franc (CHF) pair bounced off it's weekly low the previous day before retreating from 0.9290. Even so, the quote ended Wednesday on a negative note as hawkish details of the Swiss National Bank’s (SNB) quarterly report jostled with the mixed US data. “The level of uncertainty associated with the (Swiss GDP) forecast is still high,” said the SNB in its quarterly economic upside the previous day. The SNB also mentioned that inflation will remain elevated for the time being. On the other hand, the US Conference Board’s (CB) Consumer Confidence jumped to the eight-month high of 108.3 for December, compared to the market forecasts of 101.0 and the revised prior readings of 101.40. However, the US Existing Home Sales for November, 4.09M MoM compared to 4.2M expected and 4.43M prior. Elsewhere, Ukrainian President Volodymyr Zelensky’s US visit and Russian President Vladimir Putin’s readiness to increase the country’s military potential challenge the risk appetite. Additionally, the Bank of Japan’s second unscheduled bond buying and a retreat in the US Treasury yields recently exerted downside pressure on the US Dollar and weigh on the USD/CHF prices. Given the latest US Dollar pullback and the holiday mood, the US Gross Domestic Product (GDP) for the third quarter (Q3) and Core Personal Consumption Expenditure (PCE) details for Q3 will be important for immediate directions. Forecasts suggest that the US GDP will confirm 2.9% Annualized growth in Q3 while the Core PCE is anticipated to also meet the initial forecasts of 4.6% QoQ during the stated period. Technical analysis A sustained U-turn from the 10-DMA hurdle, around 0.9300 by the press time, directs USD/CHF towards a five-week-old descending resistance line, near 0.9175.
Economic Calendar Details and Trading Analysis - August 7 & 8

India’s Benchmark 10-year Treasury Bond Yields Rose

TeleTrade Comments TeleTrade Comments 22.12.2022 09:12
USD/INR reverses from one-week high, snaps two-day uptrend. RBI Minutes defy hopes of pause in rate hikes amid inflation woes. Mixed US data, BOJ’s second unscheduled bond operation weighs on US Dollar. US Q3 GDP, PCE details will be important for immediate directions. USD/INR retreats from the weekly top, taking offers to refresh the intraday low near 82.77 during early Thursday, as the US Dollar reverses the previous day’s recovery amid mixed catalysts. Also adding strength to the Indian Rupee (INR) are the recently firmer Indian Treasury bond yields after the Reserve Bank of India’s (RBI) hawkish comments in the latest monetary policy meeting Minutes. “RBI cannot afford to prematurely pause its rate tightening cycle with inflation staying above its upper tolerance band,” stated RBI Minutes on Wednesday. The Minute Statement also quotes Governor Shaktikanta Das as saying that a premature pause in monetary policy action would be a costly policy error at this juncture. Following the hawkish comments from RBI, India’s benchmark 10-year Treasury bond yields rose to 7.29% versus 7.28% marked the previous day. On the other hand, the US 10-year Treasury bond yields remain depressed near 3.65% after retreating from the monthly high of 3.72% the previous day. The same weighs on the US Dollar Index (DXY), down 0.36% around 103.88 by the press time. It’s worth noting that the DXY bounced off it's weekly low the previous day as the US Conference Board’s (CB) Consumer Confidence jumped to the eight-month high of 108.3 for December, compared to the market forecasts of 101.0 and the revised prior readings of 101.40. However, the US Existing Home Sales for November, 4.09M MoM compared to 4.2M expected and 4.43M prior, probed the US Dollar bulls. Additionally favoring the US Dollar’s safe-haven demand were updates surrounding Russia and Ukraine as Ukrainian President Volodymyr Zelensky’s US visit and Russian President Vladimir Putin’s readiness to increase the country’s military potential. Alternatively, China’s readiness for more stimulus and the Bank of Japan’s (BOJ) second unscheduled bond buying allow US stock futures to remain mildly bid, as well as let the US Treasury bond yields retreat, at the latest. To sum up, the year-end holiday season could challenge the USD/INR moves. However, the final prints of the US Gross Domestic Product (GDP) and Core Personal Consumption Expenditure (PCE) details for the third quarter (Q3) could entertain the pair traders ahead of Friday’s US Core PCE Price Index for November, also known as the Fed’s preferred inflation gauge. That said, the US GDP is expected to confirm 2.9% Annualized growth in Q3 while the Core PCE is anticipated to also meet the initial forecasts of 4.6% QoQ during the stated period. Technical analysis Although multiple rejections from 83.00 keeps USD/INR bears hopeful, a three-week-old bullish channel, between 83.30 and 82.65, restricts short-term moves of the pair.
The USD/JPY Price Seems To Be Optimistic

The Holiday Mood Could Restrict The USD/JPY Pair Moves, The Covid Cases In Asia Major Increased

TeleTrade Comments TeleTrade Comments 22.12.2022 09:21
USD/JPY bounces off intraday low but stays mildly offered around four-month bottom. Yields struggle for clear directions, grinding lower off late, as BOJ announced another unchanged bond buying. Tokyo to pull Covid alert to the highest, PM Kishida pushes Japanese industry for more investment. US GDP, Treasury bond moves eyed for fresh impulse. USD/JPY picks up bids to consolidate intraday losses around 131.90 during early Thursday. Even so, the Yen pair remains mildly offered while reversing the previous day’s rebound from a four-month low. That said, the quote’s latest weakness could be linked to the mixed headlines from Japan, as well as sluggish US Treasury yields and the holiday mood in the market. Additionally challenging the USD/JPY traders is the cautious mood ahead of the key US data/events scheduled for release. Tokyo is up for the highest Covid alert as the virus cases in Asia major increased recently. The same should have pushed the Japanese government to revise growth forecasts for the fiscal year 2023. “Japan's real gross domestic product (GDP) is expected to expand 1.5% in the fiscal year beginning in April 2023, the government said in its new semi-annual projection, up from 1.1% in the previous forecast made in July,” mentioned Reuters. On the same line were comments from Japanese Prime Minister (PM) Fumio Kishida who pushed local industries for 100 trillion Japanese Yen investment as soon as possible. Elsewhere, talks of China’s higher budget deficit in 11 months join fears of a spending slowdown in Australia and geopolitical concerns relating to Russia-Ukraine to probe the sentiment. It should be observed that the Bank of Japan’s (BOJ) second unscheduled bond-buying also exerts downside pressure on the USD/JPY prices. Amid these plays, the US Dollar Index (DXY) traces depressed Treasury yields while the S&P 500 Futures remains mildly bid by the press time. Looking forward, the holiday mood could restrict USD/JPY moves but final prints of the US Gross Domestic Product (GDP) and Core Personal Consumption Expenditure (PCE) details for the third quarter (Q3) could entertain the pair traders ahead of Friday’s US Core PCE Price Index for November, also known as the Fed’s preferred inflation gauge. That said, the US GDP is expected to confirm 2.9% Annualized growth in Q3 while the Core PCE is anticipated to also meet the initial forecasts of 4.6% QoQ during the stated period. Technical analysis Unless providing a daily closing beyond the early December low near 133.65, the USD/JPY bears can keep attacking August month’s low surrounding 130.40 to aim for further downside.
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The Australia And New Zealand Group (ANZ) Challenge The AUD/USD Bulls

TeleTrade Comments TeleTrade Comments 22.12.2022 09:30
AUD/USD seesaws around intraday high, as well as the weekly top, on mixed concerns. Aussie analysts predict slowdown in spending, China’s budget deficit hit record high during January-November period. US data, yields eyed for fresh impulse amid holiday mood. AUD/USD grinds near an intraday high of 0.6765 heading into Thursday’s European session. In doing so, the Aussie pair seesaws near the weekly top amid mixed news surrounding Australia and China, while cheering the US Dollar’s pullback on softer Treasury bond yields. That said, analysts from the Australia and New Zealand Group (ANZ) highlight fears of a slowdown in Aussie spending and challenge the AUD/USD bulls. “Total ANZ-observed spending from 20 Nov – 18 Dec was just 10% higher than in 2019, despite a CPI increase of 10.5% between Dec 2019 and Sep 2022 and population growth of 1.8% from Dec 2019 to Jun 2022,” said the latest report. It should be noted that the news suggesting China’s biggest budget deficit on record also probes the AUD/USD buyers. That said, China’s budget deficit hit a record high for the first 11 months of 2022 and weigh on the AUD/USD prices. On the other hand, Bloomberg cites China’s State Council and the People’s Bank of China (PBOC) to hint at more positives for the dragon nation. “China’s State Council, People’s Bank of China (PBoC) and the country’s top securities regulator jointly conducted a study during last week’s economic policy meeting, aiming to prioritize growth and boost the property market in 2023,” reported Bloomberg. Also likely to propel the AUD/USD prices could be the downbeat US Treasury yields and the softer US Dollar, amid a lack of major data/events and due to the Bank of Japan’s (BOJ) efforts. That said, the US 10-year Treasury yields remain depressed around 3.65%, extending the previous day’s pullback from the monthly high while the US Dollar Index (DXY) prints mild losses near 103.90 at the latest. Looking forward, final prints of the US Gross Domestic Product (GDP) and Core Personal Consumption Expenditure (PCE) details for the third quarter (Q3) could entertain traders ahead of Friday’s US Core PCE Price Index for November, also known as the Fed’s preferred inflation gauge. That said, the US GDP is expected to confirm 2.9% Annualized growth in Q3 while the Core PCE is anticipated to also meet the initial forecasts of 4.6% QoQ during the stated period. Technical analysis A clear upside break of the 0.6730 resistance confluence, including the convergence of the 200-Exponential Moving Average (EMA) and a two-day-old descending resistance line, keeps AUD/USD bulls hopeful of piercing the downward-sloping resistance line from December 13, close to 0.6785 by the press time.    
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

The ECB Vice-President Luis De Guindos:" We Have No Choice But To Act"

TeleTrade Comments TeleTrade Comments 22.12.2022 09:33
European Central Bank (ECB) Vice-President Luis de Guindos said on Thursday that “we should expect to raise interest rates at this pace for a period of time.” Additional quotes   Indication for Q4 2022 is that we are perhaps in negative territory, but not very deep, with GDP expected to contract by 0.2%. Over the course of the next two or three months inflation will be somewhere around its current level, in q2 2023 it will see a drop to hover around 7% by the middle of the year. We have no choice but to act. If we do nothing, the situation would be worse because inflation is one of the factors behind the current recession. Increases of 50 basis points may become the new norm in the near term. Our interest rates will then enter into restrictive territory. I am concerned that markets could underestimate the persistence of inflation. I am concerned that markets might consider fiscal policy to be incompatible with monetary policy, that there is a potential conflict. Banks have a solid capital position and can withstand a shock, but i have a lot more doubts about non-banks, notably hedge funds.   Market reaction In reaction to the above hawkish comments, EUR/USD keeps its upbeat momentum intact at near-daily highs of 1.0650, up 0.43% so far.
The USD/CAD Pair Has The Strong Downside Momentum

Analysis And Outlook Of The USD/CAD Pair Situation

TeleTrade Comments TeleTrade Comments 22.12.2022 09:45
USD/CAD holds lower grounds near intraday bottom, prints four-day downtrend. Cautious optimism, downbeat Treasury yields weigh on US Dollar. WTI seesaws near 13-day high amid hopes of more demand on winter, travel concerns. USD/CAD takes offers to refresh intraday low near 1.3580 during early Thursday morning in Europe. In doing so, the Loonie pair drops for the fourth consecutive day while extending the previous day’s downside break of a short-term key support trend line toward another support line. That said, the quote’s latest weakness could be linked to the broad US Dollar weakness, as well as firmer prices of WTI crude oil, Canada’s main export item. It should be noted that the mixed prints of Canada inflation data failed to recall USD/CAD buyers the previous day. US Dollar Index (DXY) drops half a percent to around 103.85 at the latest as the US 10-year Treasury yields remain depressed at around 3.65%, extending the previous day’s pullback from the monthly high. WTI crude oil prints mild losses as it pares the daily gains around $78.40. Even so, hopes of more energy demand due to fierce winter and more travel forecasts keep the black gold positive on a weekly basis. On Wednesday, Canada’s Consumer Price Index (CPI) declined to 6.8% YoY in November from 6.9% in October, versus market forecasts of 6.7%. Further, the more important reading of inflation, namely the Core Bank of Canada (BOC) CPI, which excludes volatile food and energy prices, remained unchanged at 5.8% YoY. It should be noted that the Bank of Japan’s (BOJ) second unscheduled bond-buying joins the cautious optimism in the market, as portrayed by mildly bid stock futures and Asia-Pacific equities, also exert downside pressure on the USD/CAD prices. Bloomberg cites China’s State Council and the People’s Bank of China (PBOC) to hint at more positives for the dragon nation and revives the market’s optimism of late. “China’s State Council, People’s Bank of China (PBoC) and the country’s top securities regulator jointly conducted a study during last week’s economic policy meeting, aiming to prioritize growth and boost the property market in 2023,” reported Bloomberg. Alternatively, news suggesting China’s biggest budget deficit on record, for the January-November period, joins the Russia-Ukraine woes to probe the USD/CAD bears. Looking forward, final prints of the US Gross Domestic Product (GDP) and Core Personal Consumption Expenditure (PCE) details for the third quarter (Q3) could entertain traders ahead of Friday’s US Core PCE Price Index for November, also known as the Fed’s preferred inflation gauge. That said, the US GDP is expected to confirm 2.9% Annualized growth in Q3 while the Core PCE is anticipated to also meet the initial forecasts of 4.6% QoQ during the stated period. Technical analysis A clear downside break of the two-week-old ascending trend line, around 1.3630 by the press time, directs USD/CAD bears towards an upward-sloping support line from November 15, close to 1.3540 at the latest.
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

Technical Analysis Of The Euro To US Dollar Pair By Expert Of InstaForex

InstaForex Analysis InstaForex Analysis 22.12.2022 09:51
EUR/USD Euro has been consolidating under 1.0700 for more than a week. Most likely, this is due to the market's sentiment with the end of the year, as well as the uncertain outlook for economies in both the US and the EU in early 2023. In technical aspects, this horizontal consolidation below the resistance level suggests a breakout and a potential rise. However, it is unlikely to be very strong, so it is best to continue selling euro from 1.0720, especially in the case of growth to 1.0800 - 1.0900. Read more: https://www.instaforex.eu/forex_analysis/330500 Relevance up to 07:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330500
Ralph Shedler's Technical Analysis Of The USD/JPY Pair

Ralph Shedler's Technical Analysis Of The USD/JPY Pair

InstaForex Analysis InstaForex Analysis 22.12.2022 09:53
USD/JPY Temporary Growth! The USD/JPY pair is trading at 131.91 at the time of writing. As you can see on the H1 chart, after its massive drop, the rate tried to rebound and recover. It has climbed as much as 132.45 where it has found supply. USD/JPY increased within a minor up channel. Dropping below the channel's downside line, below the uptrend line signaled exhausted buyers. The 132.45 yesterday's high represents an upside obstacle while the 131.56 immediate low represents a downside obstacle. USD/JPY Trading Conclusion! Dropping below the 131.56 obstacle could confirm a deeper drop. 130.64 represents a potential downside target.   Relevance up to 09:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305954
The Gold Rally Is Continuing To Stall, This Could Be A Good Year For Crude Oil

The Summary Of Forex And Commodity In 2022 And What Can Be The Trade Of 2023?

Swissquote Bank Swissquote Bank 22.12.2022 10:07
he Dollar King was back in 2022. Will anything change in 2023? And how will safe haven assets fare in this context of high inflation and geopolitical tensions? Gold & Oil: is further strength still on the table?   Find out all the answers in our Market Outlook 2023! 00:00 Intro 00:29 How impressive was the 2021-2022 US dollar rally? Could it extend in 2023 or will it extinguish? 2:47 Japanese yen was the worst G20 performer of 2022. What's next for the yen and the BoJ? 5:29 Has the Swiss National Bank given up on its fight against the strong franc? 7:35 Why did Gold perform so poorly in a year of rising inflation and geopolitical tensions? 10:53 Wasn't Crude Oil supposed to grow to $200pb? Is further oil strength still on the table? 15:33 What's the trade of 2023? You can find the first part of the Outlook 2023 Stocks & Indices here: https://youtu.be/OIMXEAxIRrE Glenn began his investment management career in 1997 and has managed private client and family office wealth ever since. Glenn is the Founder & Managing Director of Harver Capital, an active macro investment manager at www.harvercapital.com. Ipek Ozkardeskaya has begun her financial career in 2010 at the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high-net-worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst at the London Capital Group in London and in Shanghai. She returned to Swissquote Bank as a Senior Analyst in 2020. _____ #swissquote #forex #forextrading #commodities #inflation #crudeoil #chf #usd _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars, and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      
Equity Markets Rise, VIX at 12 Handle After ECB Rate Hike and US Economic Resilience

The Saxo 2023 Outrageous Predictions For 2023 In Special Edition Of The Podcast

Saxo Bank Saxo Bank 22.12.2022 11:24
Summary:  In this Special Edition of the podcast, we discuss the Saxo 2023 Outrageous Predictions for 2023, based on the theme of The War Economy. Our Outrageous Predictions are a yearly exercise in looking at possible, if improbable events that may unfold in the year ahead and will alter the investment landscape if they do come to pass. This Special Edition podcast features Editor-in-Chief of the 2023 Outrageous Predictions John J. Hardy and major contributor Peter Garnry. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Special Edition - Saxo Outrageous Predictions for 2023 | Saxo Group (home.saxo)
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The GBP/USD Pair Is Trading Just Above 1.20, The Australian Dollar Is The Strongest Today

Kamila Szypuła Kamila Szypuła 22.12.2022 13:49
The US Dollar is weaker today as markets appear to be restoring their signal ahead of next week's holiday. Chinese words about stimulating economic growth strengthened risk sentyment. The Australian Dollar is the biggest gainer today as the generally more optimistic sentiment towards risky assets helped to bolster it. Later in the day, the focus will be on US GDP, which is expected to improve for the third time in a row, revealing a downside risk for the EUR/USD pair. In addition, central banks must balance the need to fight inflation with the risk of further deepening of the economic slowdown. EUR/USD EUR/USD keeps trading above 1.06 for another day. For a significant part of the day, the pair traded in the range of 1.0630-1.0660. It is currently trading below 1.0630, 1.0622 to be precise The euro has a strong start to Thursday's European session with the dollar weakening. In addition, de Guindos of the European Central Bank (ECB) upheld the hawkish narrative, stating that "50 basis points may soon become the new standard" to quell rising inflationary pressures in the eurozone. GBP/USD The cable pair dropped to 1.2040. The British pound traded around $1.21, down slightly from its recent six-month high of $1.2446 as investors weighed less hawkish BoE and economic outlook. Analysts mainly see the risk of the pound falling between now and the end of the year as the UK economy is stuck in stagflation conditions. The outlook for the UK is still pretty bleak. The UK economy contracted slightly more than originally estimated in the third quarter and business investment performed poorly, the Office for National Statistics said on Thursday. Household spending and business investment fell significantly, boosting expectations that the British economy was heading into recession. Most services sub-sectors experienced a slowdown, however, services output increased by 0.1% in Q3 2022, revised upwards from the first estimate of solid output. Compared to pre-coronavirus (COVID-19) levels, service output is now 1.3% lower than in Q4 (October-December) 2019. Read next: Credit Suisse Sold Building In Geneva | Visa Is Building Success At The Expense Of Small Retailers| FXMAG.COM USD/JPY USD/JPY dropped from 137.50 to 130.50 in no time. It has since stabilized. USD/JPY in the Asian session fell to around 131.70, in the European session the pair rose above 132.10. The yen firmed on Thursday, returning towards a four-month peak against the dollar hit this week after an unexpected tweak to the Bank of Japan's bond yield controls spurred bullish yen bets. Japan is the largest holder of government bonds and once again, if domestic yields move north, the world's largest debt market could be affected. The bank's new CEO is due to be appointed in April 2023, and there is a perception that he could pave the way for the new leader to tighten policy in the face of accelerating inflation. The yen is used as a funding currency by some investors, and the rise in Japanese yields changes the price dynamics for these participants. AUD/USD Yesterday, at the end of the day, the exchange rate was below $0.67, but closer to midnight it started to increase. The new day will start with an increase in the Aussie pair. It peaked at 0.6769, then you start to fall. Trading is at 0.6726 The sentiment-linked Australian dollar outperformed its major counterparts on Wednesday, benefiting from a cautious improvement in risk appetite. The aussie also benefited from a general weakness in the US dollar, as well as hopes for more pro-growth policy measures in China. Earlier in December, the Reserve Bank of Australia raised its policy rate by 25 basis points to 3.1%, taking borrowing costs to a level not seen in a decade. Source: dailyfx.com, investing.com, finance.yahoo.com
At The Close On The New York Stock Exchange Indices Closed Mixed

Declines In Most Sectors In The US Stock Marker, Only The Energy Sector Rose. The Cryptocurrency Market Has Stagnated.

Conotoxia Comments Conotoxia Comments 22.12.2022 14:31
After a week full of interest rate rises, it seems that markets may finally be catching their breath, or at least most of them. The exception may be Japan, where the central bank there has announced a turnaround in financial policy. Macroeconomic data Monday saw the publication of several important macroeconomic data, including the German Ifo Business Climate Index for December, the RBA meeting minutes, the PBoC Loan Prime Rate and a statement and the Bank of Japan. The German Ifo Business Climate Index is an important index that measures business sentiment in Germany. The reading for December was 88.6 points, which was better than expected (87.4 points) and may signal an improvement in business sentiment in Germany. The previous reading for November was 86.4 points. The result may indicate that the German economy is in better shape than expected and could be a positive signal for other economies in Europe. The minutes of the RBA (Reserve Bank of Australia) meeting did not bring any surprises and contained no significant changes to the central bank's monetary policy, which is expected to continue to raise interest rates. The PBoC (People's Bank of China) interest rate remained at 3.65%, which was expected by the market. The Bank of Japan (BoJ) released its monetary policy statement and held a post-meeting press conference. The first steps were taken to tighten monetary policy, announcing a rate hike and increasing the level of government bond purchases. Because of this, the Nikkei index (JP225) may have fallen by more than 3% since the start of the week. Source: Conotoxia MT5, JP225, Daily On Tuesday, we learnt about the number of new building permits in the US, the reading for November was 1.342 million, worse than expected (1.485 million) and a decrease in permits compared to the previous month (1.512 million). The reading may indicate that the construction sector in the US is less active than expected, which could have a negative impact on the economy, potentially contributing to higher unemployment in the sector in the future. Wednesday brought the publication of more data. We learned about Canada's core inflation reading (excluding food and energy prices). The reading for November was 0.0% m/m, while 0.2% m/m was expected. This represents no change in the price level compared to the previous month (0.4% m/m.). On the same day, we learned the reading of the Consumer Confidence index, which measures consumer sentiment in the US. The reading for December was 108.3 points, which is better than expected (101.0 points) and represents an improvement in consumer sentiment compared to the previous month (101.4 points). This good result could be attributed to the pre-Christmas period. The last of the important publications concerned US crude oil inventories. The reading for last week was -5.894 million barrels (previously 10.231 million b.). Which could suggest a return to a further shortage of this crude. On Thursday, we learned of signs of a slowdown in the UK economy. The GDP reading for the third quarter of this year was 1.9% y/y. (2.4% y/y was expected). This is down from the previous reading of 4.4% y/y. Due to the holidays starting on Friday's session, some stock exchanges will close earlier than usual, which should be taken into account in investment intentions. The stock market Declines in most sectors in the US are unlikely to represent optimism about the 'Father Christmas rally' starting. We could see the largest in the new technology sector. TheTechnology Select Sector SPDR Fund (XLK), which tracks the sector's quotations, fell by 4.8%. Only the energy sector rose. This seems to have had something to do with rising energy commodity prices this week. Source: Conotoxia MT5, XLK, Daily This week gave us the last of this year's Q3 figures. Tuesday brought the release of financial results from Nike (Nike), the global footwear and apparel giant, among others. The company reported Q3 EPS of $0.85, better than expected ($0.65). Next is General Mills (GnrlMils), the food manufacturer reported EPS of 1.1, a reading that came as a positive surprise to analysts (1.06 was expected). Next is FactSet Research (FactSet), a data and analytics solutions company, reported Q3 earnings of 3.99 per share, 3.62 was expected. On Wednesday, we learned the results of Micron (Micron), a computer memory manufacturer, which reported an EPS loss of 0.04 in Q3 (-0.01 expected). On the same day, Cintas (Cintas), an apparel services company, reported Q3 earnings per share of 3.12, expected (3.03). Carnival Corp (Carnival-US), the cruise company, reported a loss of $0.85 per share in Q3, better than expected (-$0.88). Currency and cryptocurrency market After a week of decisions by as many as 11 central banks, we saw numerous interest rate rises. These seem to have changed some global currency market trends. The EUR/GBP pair saw the biggest increase, up 1%, but we saw the biggest changes in pairs linked to the Japanese yen. The USD/JPY exchange rate has fallen by more than 3% over the course of this week and now stands at around 132. This is a drop of more than 13% from its peak, and appears to have been triggered by Monday's announcement of a change in monetary policy by the central bank of Japan. Source: Conotoxia MT5, USDJPY, Daily The cryptocurrency market has stagnated. The price of bitcoin (BTCUSD) was virtually unchanged over the course of this week, rising by just 0.3%. One of the strongest gaining cryptocurrencies was ethereum (ETHUSD), which increased in value by 2%. The digital currency market appears to continue to remain in its sideways course, showing no signs of changing. It's time for Christmas to begin! As we begin the festive period, we will not know any more key data until the end of the year, and the markets have to accept that this year would probably do without the usual 'Father Christmas rally' during this period. Nevertheless, we would like this period to be the best it can be for all of us. The Conotoxia team sends its regards. Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Asia Morning Bites: Focus on Regional PMI Figures, China's Caixin Manufacturing Report, and Upcoming FOMC Minutes and US Non-Farm Payrolls"

Thursday Brought Declines At The Close In The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 23.12.2022 08:01
At the close in the New York Stock Exchange, the Dow Jones fell 1.05%, the S&P 500 index fell 1.45%, the NASDAQ Composite index fell 2.18%. Dow Jones The leading gainer among the components of the Dow Jones index today was Verizon Communications Inc, which gained 0.53 points (1.40%) to close at 38.31. Nike Inc rose 0.93 points (0.80%) to close at 116.71. Procter & Gamble Company rose 0.35 points or 0.23% to close at 152.19. The least gainers were Boeing Co shares, which fell 7.75 points or 3.95% to end the session at 188.25. Intel Corporation was up 3.21% or 0.86 points to close at 25.97, while Microsoft Corporation was down 2.55% or 6.24 points to close at 238.19.  S&P 500 Leading gainers among the S&P 500 components today were FedEx Corporation, which rose 3.35% to 175.69, VF Corporation, which gained 2.95% to close at 26.21, and Warner Bros Discovery Inc, which rose 2.10% to end the session at 9.23. The least gainers were shares of Tesla Inc, which decreased in price by 8.88%, closing at 125.35. Shares of Lam Research Corp lost 8.65% and ended the session at 409.11. Quotes of Applied Materials Inc decreased in price by 7.84% to 97.60. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were IsoPlexis Corp, which rose 102.87% to hit 1.40, E-Home Household Service Holdings Ltd, which gained 91.76% to close at 1, 35, as well as Core Scientific Inc, which rose 72.94% to end the session at 0.09. The least gainers were Akso Health Group DRC shares, which were virtually unchanged at 0.00% to close at 0.39. Shares of Dragonfly Energy Holdings Corp lost 40.75% to end the session at 14.86. Quotes Pacifico Acquisition Corp fell in price by 35.06% to 1.13. Numbers On the New York Stock Exchange, the number of securities that fell in price (2,350) exceeded the number that closed on the plus side (735), while 101 stocks were virtually unchanged. On NASDAQ, 2,439 stocks were down, 1,256 were up, and 189 remained flat. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 9.47% to 21.97. Gold Gold futures for February delivery shed 1.41%, or 25.65, to hit $1.00 a troy ounce. In other commodities, WTI crude for February delivery fell 0.03%, or 0.02, to $78.27 a barrel. Brent oil futures for February delivery fell 0.56%, or 0.46, to $81.74 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.09% to 1.06, while USD/JPY fell 0.08% to hit 132.37. Futures on the USD index rose 0.25% to 104.11. Relevance up to 03:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/306064
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

The Price Of USD/JPY Pair Can Still Reach 133.35

InstaForex Analysis InstaForex Analysis 23.12.2022 08:05
Yesterday, the yen was calm, its slow growth (growth of the USD/JPY pair which means that the dollar rose) did not face any resistance, so this morning it continues to gradually rise. The price is facing the 133.35 target, the nearest internal resistance line in the price hyperchannel of the monthly chart. The Marlin oscillator can grow without interruptions until it touches the zero line. From 133.35, a synchronous reversal of the price and the oscillator downwards, to the target of 130.58. Yesterday, the U.S. stock index S&P 500 fell by 1.45%, and if the yen, with the Bank of Japan's help, will push for its role as a safe haven, then the pair could fall further to support around 127.00. On the four-hour chart, the Marlin oscillator has already reached the zero line. But the price can still reach 133.35. The main movement is likely to occur after the Christmas holidays. Relevance up to 03:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330592
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

The GBP/USD Price Can Face The Red Balance Indicator Line

InstaForex Analysis InstaForex Analysis 23.12.2022 08:08
Yesterday, the British pound fell by 40 pips, this morning it continues to gradually fall on the daily chart. There are no external signs of a reversal, before the price falls to support at 1.1933. The price can face the red balance indicator line at this level. Settling below the level will give the price the strength to fight the support of the MACD line and the price level of 1.1737 (September 13 high). The Marlin oscillator is slowly moving deeper into bearish territory. On the four-hour chart, the signal line of Marlin has crossed the former convergence line in the oscillator window. Convergence might be getting a gentler slope, but since the price has gone down from the local price channel, breaking the forming line in the oscillator window most probably indicates a breakdown of the convergence, which might intensify the price decline. Relevance up to 03:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330594
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Euro To US Dollar Pair's Market Is Currently Completely Flat

Paolo Greco Paolo Greco 23.12.2022 08:10
On Thursday, the EUR/USD currency pair kept its position above the moving average line while making gentle progress along it. Of course, the best way to describe the entire current movement is as totally flat and not as a movement along the moving average. Remember that the price cannot move sideways and along the moving average at the same time. The moving average line will eventually begin to point in the direction of the east, at which point the price will cross it ten times per day. As a result, the euro/dollar pair's market is currently completely flat. Volatility has decreased, as we have already stated, if not to the lowest values, then at least to quite low levels, such as those for 2022. Consequently, it is currently very challenging to trade a pair. Given that nothing noteworthy is occurring at the moment in either the world or the market, there may not be anything else to say about the technical situation. Everybody is gradually preparing for Christmas and the New Year. No significant publications, speeches, or statements have been made recently. There is nothing to analyze; all that is left to consider is how the upcoming year will go and how the pair will behave in January. However, in our opinion, the euro currency can now remain flat for a considerable amount of time. Keep in mind that a flat is not uncommon in the foreign exchange market. And it isn't required to continue for a week or two. When a minimal number of new positions are created, the market is flat. Traders now merely see no reason to open the deals because they do not open, or they are waiting for a more favorable environment. In any case, there are no discounts, and there might not be any for several months. Of course, we hope that no such extreme scenarios will arise, but in reality, anything is possible. Naturally, the moving-overcoming signals have no relevance at this point. We must now either wait for the flat to be finished or try to trade within the side channel's borders on the lower TF. In the third quarter, the American economy expanded. The US GDP for the third quarter in the third and final assessment was this week's only significant report. In theory, we stated yesterday that we did not anticipate a response to this report. It might still be, given that the third quarter's actual value was 0.3% higher than expected. The result was a 3.2% increase in the American economy, which more than offset the losses from the first two. Therefore, it cannot be said that a recession in the United States has started as of the third quarter. Although the vast majority of economists predict a recession for the coming year, it is always preferable for it to begin later or for the fall to be as small as possible. The US economy appears to be doing well right now. As a result, we believe it is premature to discuss a recession. It might be very fleeting and shallow. The Fed has already increased its rate nearly to the desired level in the interim. Five months in a row have seen a decrease in inflation. The states have a great chance to exit the high inflationary period quickly and with minimal losses. However, predicting how the EU's battle against inflation will turn out is still quite challenging. As you may recall, many experts question the ECB's ability to raise the rate "as long as it takes." This indicates that even if the battle lasts for years, the rate won't rise above the Fed rate. This is unfortunate for the value of the euro. It is impossible to predict the rate's potential value because ECB representatives are silent about the rate's eventual level. As of December 23, the euro/dollar currency pair's average volatility over the previous five trading days was 73 points, which is considered "average." So, on Friday, we anticipate the pair to fluctuate between 1.0531 and 1.0677 levels. The Heiken Ashi indicator's reversal means nothing because the pair is completely flat. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: Although the EUR/USD pair has been flattening out for several days, it is still maintaining an upward trend. Trading can only be done on the lower TF inside the side channel because the 4-hour TF hardly ever moves. Explanations for the illustrations: Channels for linear regression help identify the current trend. The trend is currently strong if they are both moving in the same direction. The short-term trend and the direction in which to trade right now are determined by the moving average line (settings 20.0, smoothed). Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 04:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330598
The Market May Continue To Buy The Pound (GBP) This Week

The Pound Has Risen Too Much, The Decline In Quotes Should Continue

Paolo Greco Paolo Greco 23.12.2022 08:13
Unlike the EUR/USD pair, the GBP/USD currency pair remains volatile and, more importantly, trending. This movement can be viewed as a "gift under the Christmas tree," as the euro/dollar pair is now stationary. In general, we have stated numerous times that the pound is heavily overbought, the dollar is oversold, and the pound's most recent monthly growth was illogical. As a result, we were expecting a downward correction, but only this week did the pair convincingly gain a foothold below the moving average (for the first time in a month), so we can now enjoy a trending downward movement. We do not believe it is necessary to inquire as to why the dollar is rising alongside the pound but not alongside the euro. You should be grateful that at least one of the two pairs enables you to cooperate with it, initiate transactions, and generate revenue. We think that since the pound has risen too much, the decline in quotes should continue. There are drop targets between levels 12 and 14. What will occur after this correction is difficult to predict because much will depend on the health of the British economy and the degree to which the Bank of England will be willing to raise its key rate. And there are lots of uncertainties and questions surrounding this. Since Rishi Sunak, Jeremy Hunt, and Andrew Bailey have all openly admitted that the British economy will experience a recession, this is a fact. The regulator will have less opportunity to raise the rate as the economy worsens. We already have doubts about his ability to raise it to the Fed rate level. If not, the British pound should have even less support considering that one of the main factors driving its recent growth was market expectations of a slowdown in the pace of monetary policy tightening in the US. The UK economy has shrunk by 0.3%, but this is only the start. Yesterday, we presumed that those market participants would ignore the inflation report. We anticipated that there might be a response, but we did not anticipate a strong one. But the issue that the dollar has been dealing with for the past two months is now being faced by the pound. The market uses macroeconomic publications as justification to open trades on a trend and trade in the direction it sees fit. Although GDP reports (especially not in the first estimates) rarely cause significant movements, the pair fell by about 130 points yesterday. However, the US GDP increased more than anticipated, while the UK GDP shrank more than anticipated. When taken as a whole, these reports provided a solution to the dilemma of what to do with the pound on Thursday. But let us point out that the pound dropped on both Tuesday and Wednesday. We think the fall should have occurred on Thursday, when it might not have been as severe. The market shouldn't be uncertain about the direction of movement because it is obvious that the market won't "flatten." The British economy can now experience losses every quarter, which is bad not just in terms of the actual economic contraction. This is problematic because BA might reduce the rate of tightening financial conditions once more in early 2023. The BA did it after the first slight slowdown, just as the Fed did after five inflation decreases. As a result, it is already concerned about a severe and abrupt recession. Additionally, it might have to slow down to 0.25% if the economy experiences a significant decline in the fourth quarter. So, we think the pound should drop another 300–400 points. Every day, however, there are fewer and fewer reasons to expect a new, powerful upward movement. Over the previous five trading days, the GBP/USD pair has averaged 131 points of volatility. This value is "high" for the dollar/pound exchange rate. As a result, on Friday, December 23, we anticipate channel movement that is constrained by levels of 1.1899 and 1.2161. A round of upward correction will begin if the Heiken Ashi indicator reverses direction upward. Nearest levels of support S1 – 1.2024 S2 – 1.1963 S3 – 1.1902 Nearest levels of resistance R1 – 1.2085 R2 – 1.2146 R3 – 1.2207 Trading Suggestions: On the 4-hour timeframe, the GBP/USD pair is still trending downward. Therefore, until the Heiken Ashi indicator appears, you should maintain sell orders with targets of 1.1963 and 1.1899. When the moving average is fixed above, buy orders should be placed with targets of 1.2207 and 1.2268. Explanations for the illustrations: Determine the present trend with the aid of linear regression channels. The trend is currently strong if they are both moving in the same direction. The short-term trend and the direction in which to trade right now are determined by the moving average line (settings 20.0, smoothed). Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones. Relevance up to 04:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330600
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The Decline Of Euro To US Dollar (EUR/USD) Pair Has Begun

InstaForex Analysis InstaForex Analysis 23.12.2022 08:29
EUR/USD has begun the final part of its decline to the corrective target at 1.0469 from where the next impulsive rally towards 1.0927 and likely 1.1384 is expected. In the short term, a break below minor support at 1.0573 will confirm the descent towards 1.0469 to complete the correction in wave 4/. In the longer term, we are looking for EUR/USD to move much higher and ultimately break above the 2011 peak at 1.6038.   Relevance up to 06:00 2022-12-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306086
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

Oscar Ton's Technical Outlook Of The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 23.12.2022 08:31
Technical outlook: EURUSD dropped to the 1.0573 low during the New York session on Thursday before finding bids again. The single currency pair is seen to be trading around 1.0605 at this point in writing as the bears prepare for a breakout. The currency pair has remained sideways for the most part of the week and a clear break below 1.0560 would confirm a breakout. Interim resistance stays at 1.0736 keeping the bearish outlook intact for now. EURUSD turned lower from 1.0736 over the last week carving an Engulfing Bearish candlestick pattern right at the trend line resistance as seen on the daily chart. Prices might rally through the 1.0670-80 zone, which is the near-term resistance, before turning lower towards the larger-degree trend. The bears are keen to take advantage until prices stay below 1.0736. EURUSD might have terminated its counter-trend rally, which began from 0.9535 around the 1.0736 highs last week. If the above holds well, prices would stay below 1.0736 and reverse lower towards 0.9535 and further in the next few weeks. On the flip side, if 0.9535 is a major bottom carved, prices should find support around the 1.0100-50 area. The bias is looking lower in the near term. Trading idea: A potential drop against 1.0750 Good luck! Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306088
The Euro May Gradually Climb To The Target Level

EUR/USD Pair Is Still In A High Position On The 1H Chart

Paolo Greco Paolo Greco 23.12.2022 08:33
M5 chart of EUR/USD EUR/USD is still trading within the 1.0581-1.0658 horizontal channel. As I mentioned before, such a clear horizontal channel is now more of a positive than a negative because traders have clear trading targets, which are executed by the pair itself. For example, yesterday, the price perfectly reached both limits of the channel, which let traders open a position and make profit despite the flat. So it is possible to trade and make profit even in the flat if you follow the basic rules. The US had a macroeconomic background and the GDP report for the third quarter was the first report this week that was actually worth paying attention to. GDP grew not by 2.9% as predicted, but by 3.2%, so the dollar's growth (especially during the US session) was logical and justified. Another thing is that from a technical perspective, this movement did not change anything because the pair remained in the flat anyway. There were several trading signals on Thursday and all of them were quite pleasant. First, the price rebounded twice from the critical Kijun-Sen line. In the first case, it went down by 20 points, so traders had to put a Stop Loss on the trade to Breakeven, which was used to close it. In the second case, the price fell to the Senkou Span B line and 1.0581, where the shorts should have been closed with profit at around 40 pips. You could have used the buy signal, but it did not bring traders any profit, as the price failed to start a new growth. As a result, the deal closed with zero or just a small loss. Altogether there was a profit of about 30-40 points. COT report In 2022, the COT reports for the euro are becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now the net position of non-commercial traders is again bullish and strengthens almost every week. The euro is growing but a fairly high value of the net position may point to the end of the upward movement or at least, to a correction. During the given period, non-commercial traders opened 8,600 long positions, whereas the number of short positions rose by 8,500. Thus, the net positions fell by 100. Notably, the green and red lines of the first indicator have moved far apart from each other, which may mean the end of the ascending trend (which wasn't actually an uptrend because the upward movement of the last two and a half months fits under the "correction" category against the global downtrend). The number of long positions is 125,000 higher than the number of sell positions opened by non-commercial traders. Thus, the net position of the non-commercial group may continue to grow. However, the euro may remain unchanged. The overall number of short orders exceeds the number of long orders by 33,000 (711,000 vs. 678,000). H1 chart of EUR/USD EUR/USD is still in a high position on the one-hour chart, and is still in a total flat. Lines of the Ichimoku indicator may soon merge with each other and lose all meaning. We should now rely on the 1.0581-1.0658 horizontal channel. If EUR manages to go beyond it, then we can count on some trend movement. On Friday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658, 1.0736, 1.0806, as well as Senkou Span B (1.0589) and Kijun Sen (1.0656). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 23, no important report or event scheduled in the EU, while the US will release reports on the PCE Price Index, Durable Goods Orders, and Capital Goods Orders. I don't think these reports will be able to take the pair out of the flat, but there might be some reaction. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 05:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330602
Forex: US dollar against Japanese yen amid volatility and macroeconomics

US Dollar: The Bears Might Be Back In Control Thereafter

InstaForex Analysis InstaForex Analysis 23.12.2022 08:38
Technical outlook: The US dollar index rose through the 104.24 high during the New York session on Thursday before it faced mild resistance. The index has eased off a bit and is seen to be trading close to 104.00 at this point in writing. The bulls are looking poised to push through the 105.50 initial resistance in the near term, provided that 103.00 holds good. The US dollar index might have carved a significant bottom close to the 103.00 mark last week. The corrective drop, which began from the 114.70 high, looks complete around 103.00, printed last week. If the above structure holds well, the bulls will remain in control from here on and push through 105.50 and 107.00 levels in a few coming sessions. On the flip side, if the index is ready to produce a much deeper correction lower below 103.00, we can expect prices to produce a pullback/corrective rally at least towards 110.50 in the near term. The bears might be back in control thereafter, targeting below 103.00. Either way, the bias is looking higher in the near term. Trading idea: Potential rally against 102.00 Good luck! Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306092
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The Pound (GBP) Was Weakening Solely Due To Technical Reasons

Paolo Greco Paolo Greco 23.12.2022 08:43
M5 chart of GBP/USD GBP/USD was trading with a downward bias on Thursday. If a few days before that, the pound was weakening solely due to technical reasons, then yesterday it seems that it fell because of macro data. The UK and the US both released their GDP reports. Previously, I didn't think that there would be a strong reaction to such data, but to think, these reports were the reason for the pound's downfall. The pound was rising very often last month, a strong bearish correction is in place, so the pound would've fallen anyway even without the macro data. However, the US GDP grew more than the experts' forecasts and the UK GDP shrank more than the experts' forecasts. Thus, these reports provided additional support to the US currency, which strengthened during the day by more than 100 points. Speaking of trading signals, everything was fine. First, the price rebounded from 1.2106 and rose to the critical line. You can get around 10 pips of profit using the long position. The rebound from the Kijun-Sen line has triggered a spiral of decline, and GBP passed 1.2106 and fell to the area of 1.1974-1.2007, from which it rebounded. Hence, short positions should have been closed there, and the profit was about 100 pips. The rebound from the area could be used as a buy signal, but it brought only 10 pips of profit, as the pair could not start a new upward movement. Anyway, three deals were opened and all three were profitable. COT report The latest COT report showed a decrease in bearish sentiment. During the given period, non-commercial traders opened 3,500 long positions and 1,000 short positions. The net position grew by about 2,500. This figure has been on the rise for several months. Nevertheless, sentiment remains bearish, and GBP/USD is on the rise for no reason. We assume that the pair may well resume the downtrend soon. Notably, both GBP/USD and EUR/USD now show practically identical movement. However, the net position on EUR/USD is positive and negative on GBP/USD. Non-commercial traders now hold 58,000 short positions and 32,000 long ones. The gap between them is still wide. As for the total number of open longs and shorts, the bulls have a 5,000 advantage here. Technical factors indicate that the pound may move in an uptrend in the long term. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD is still trading below the lines of the Ichimoku indicator. Therefore, the downtrend persists, and the pound makes good use of New Year's Eve, since a bearish correction has been long overdue. Also, GBP might go into a flat soon. On Friday, the pair may trade at the following levels: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259. Senkou Span B (1.2274) and Kijun Sen (1.2111) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. There are no important events scheduled for Friday in the UK, while the US will release reports on the PCE Price Index, Durable Goods Orders, and Capital Goods Orders. Considering that the pound is falling now, these reports can be used to open new shorts. In other words, there might be a reaction. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 05:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330604
The USD/JPY Price Seems To Be Optimistic

Analysis And Forecast Of The US Dollar To Japanese Yen (USD/JPY) Pair

InstaForex Analysis InstaForex Analysis 23.12.2022 08:49
The USD/JPY pair rebounded after its amazing sell-off. Still, the rebound could be only temporary. The price action developed a potentially bearish pattern, so a new bearish momentum is in cards. Fundamentally, the Japanese National Core CPI rose by 3.7% matching expectations. Later today, the US is to release important economic figures. So, the fundamentals could really shake the markets. Core PCE Price Index is seen as a high-impact event and could report a 0.2% growth. Personal Income, Personal Spending, Durable Goods Orders, Core Durable Goods Orders, New Home Sales, and Revised UoM Consumer Sentiment will be released as well. USD/JPY Up Channel! Technically, the rate developed an up-channel pattern. As long as it stays above the minor uptrend line, the rate could approach and reach new highs. Now, it challenges the weekly S1 (132.78) static resistance (support turned into resistance). The 132.90 former high represents an upside obstacle as well. On the other hand, 132.14 stands as static support. USD/JPY Forecast! The USD/JPY pair could resume its growth if it jumps and closes above 132.90. This is seen as a buying signal. The channel's upside line represents an upside target. Dropping below 132.14 activates a sell-off and brings new short opportunities.     Relevance up to 07:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306096
Analysis Of The USD/CHF Pair Movements

The USD/CHF Market’s Cautious Mood Ahead Of The Key US Data

TeleTrade Comments TeleTrade Comments 23.12.2022 08:57
USD/CHF grinds higher after rising the most in a week, lacks upside momentum of late. US Dollar cheers firmer data, hawkish Fed bets and US President Biden’s comments. Headlines surrounding China, Russia flash mixed clues amid sluggish session. US Core PCE Price Index, Durable Goods Orders will be crucial for the bulls to keep reins. USD/CHF seesaws around intraday high as traders await fresh clues during early Friday. In doing so, the Swiss Franc (CHF) pair portrays the market’s cautious mood ahead of the key US data, despite defending the US Dollar's strength. Also challenging the pair bulls could be the mixed macros and the year-end season that knocks on the door. Optimism over China’s pro-growth policies recently gained momentum after the People’s Bank of China (PBOC) marked the biggest weekly cash injection in two months. The same joins the policymakers’ pledge to defend the world’s second-largest economy to overcome the Covid-inflicted pessimism via more stimulus. It’s worth noting that the chatters surrounding Evergrande’s nearness to an offshore debt restructuring plan also underpin the cautious optimism in the markets. On the other hand, a rally in Shanghai’s hospitalization and challenges to China’s medical system due to the latest easing of the Zero-Covid policy seems to probe the optimists. Further, the US Senate’s passage of a $1.7 trillion government funding bill and the latest comments from US President Joe Biden showing readiness to tame inflation keeps USD/CHF buyers hopeful. It should be noted that an increase in the hawkish Fed bets, backed by Thursday’s US data, also underpins the USD/CHF upside. That said, the US economy expanded at an annualized rate of 3.2% in the third quarter (Q3), per the final readings of the Gross Domestic Product (GDP), versus 2.9% previous estimates. Further, the Personal Consumption Expenditure (PCE) Prices match 4.3% QoQ estimations during Q3 2022 whereas the Core PCE improved to 4.7% QoQ versus 4.6% market forecasts. Amid these plays, S&P 500 Futures print mild gains while ignoring the Wall Street benchmarks. Further, the US 10-year Treasury bond yields extend the previous day’s rebound near the one-month high, marked early in the week. Looking forward, USD/CHF traders may pay attention to the risk catalysts ahead of the US Core Personal Consumption Expenditure (PCE) - Price Index, the Federal Reserve’s preferred inflation gauge, as well as Durable Goods Orders, for November. As per the market consensus, the US Core PCE Price Index remains unchanged at 0.2% MoM. However, the Annualized forecasts suggest softer figures of 4.7% YoY versus 5.0% previous readings. Further, US Durable Goods Orders could register a contraction of 0.6% in November compared to the previous increase of 1.1% (revised from 1.0%). Given the mixed forecasts for the key data, as well as the recent improvement in sentiment, the USD/CHF buyers should remain cautious. Technical analysis A daily closing break of the 13-day-old resistance line, now support around the 0.9300 threshold, keeps USD/CHF buyers hopeful of poking the monthly resistance line, around 0.9400 by the press time.
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The USD/CAD Pair Remains Depressed Heading Into The European Session

TeleTrade Comments TeleTrade Comments 23.12.2022 09:07
USD/CAD comes under some renewed selling pressure on Friday amid a modest USD downtick. A recovery in global risk sentiment is seen weighing the safe-haven buck and exerting pressure. Hawkish Fed expectations should limit the USD fall and lend support ahead of the US PCE data. The USD/CAD pair struggles to capitalize on the previous day's goodish rebound from a one-week low and meets with a fresh supply on Friday. The pair remains depressed heading into the European session and is currently placed near the lower end of its daily range, around the 1.3630-1.3625 region. A modest recovery in the US equity futures prompts some selling around the safe-haven US Dollar, which, in turn, is seen as a key factor weighing on the USD/CAD pair. The USD downtick, however, is likely to remain limited amid reviving bets for a more aggressive policy tightening by the Fed, bolstered by the upbeat US macro data released on Thursday. In fact, the US GDP growth for the third quarter was revised higher to show that the economy expanded by 3.2%, faster than the 2.9% estimated previously. Adding to this, the number of Americans filing new claims for unemployment-related benefits increased less than expected during the week ended December 17, pointing to a still-tight labour market. The resilient US economy could allow the Fed to continue raising borrowing costs, which, in turn, continues to act as a tailwind for the US Treasury bond yields and favours the USD bulls. Meanwhile, subdued action around crude oil prices fails to provide any impetus to the commodity-linked Loonie and could further lend support to the USD/CAD pair. Traders, however, might refrain from placing aggressive bets and prefer to wait on the sidelines ahead of Friday's release of the US Personal Consumption Expenditure (PCE) data. The Core PCE Price Index - the Fed's preferred inflation gauge - will be looked upon for fresh cues on inflation and influence the US central bank's decision on future rate hikes. This, in turn, will play a key role in driving the USD demand in the near term and provide some meaningful impetus to the USD/CAD pair on the last day of the week. Apart from this, oil price dynamics should further contribute to producing short-term trading opportunities around the major.
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The Aussie Pair (AUD/USD) Sticks To Its Intraday Gains

TeleTrade Comments TeleTrade Comments 23.12.2022 09:14
AUD/USD regains some positive traction on Friday amid a modest USD weakness. A positive risk tone undermines the buck and benefits the risk-sensitive Aussie. Hawkish Fed expectations, rising US bond yields should limit deeper USD losses. Traders might also prefer to wait for the US PCE data before placing fresh bets. The AUD/USD pair attracts fresh buying near the 100-day SMA on Friday and stalls the previous day's retracement slide from a one-week high. The pair sticks to its intraday gains through the early European session and is currently placed near the daily high, just below the 0.6700 mark. A modest recovery in the US equity futures prompts some selling around the safe-haven US Dollar, which, in turn, is seen lending some support to the AUD/USD pair. That said, worries about economic headwinds stemming from a surge in new COVID-19 cases in China should keep a lid on any optimism in the markets and the risk-sensitive Aussie. Apart from this, renewed fears that the Fed will retain its hawkish stance to tame inflation should limit the USD losses and contribute to capping the major. Against the backdrop of a more hawkish commentary by the Fed last week, the upbeat US economic data released on Thursday revived bets for a more aggressive policy tightening by the US central bank. In fact, the US GDP growth for the third quarter showed that the economy expanded by 3.2%, faster than the 2.9% estimated. Moreover, the Initial Weekly Jobless Claims increased less than expected during the week ended December 17, pointing to a still-tight labour market and resilient US economy. This, in turn, continues to push the US Treasury bond yields higher and supports prospects for the emergence of some dip-buying around the USD. Traders might also prefer to wait on the sidelines ahead of Friday's release of the US Core PCE Price Index - the Fed's preferred inflation gauge, due later during the early North American session. Hence, it will be prudent to wait for strong follow-through buying before positioning for any further intraday appreciating move for the AUD/USD pair.
Rates Spark: Action at Both Ends of the Curve - US 10yr Treasury Yield and European Rates

The Sino-American Tussles Challenge The USD/INR Pair Sellers

TeleTrade Comments TeleTrade Comments 23.12.2022 09:20
USD/INR retreats from the seven-week high as Indian Rupee (INR) sellers take a breather ahead of the key United States data on early Friday. That said, the quote prints mild losses near 82.85 by the press time, despite staying firmer for the third consecutive week. In doing so, the USD/INR pair takes clues from the options market as the one-month risk reversal (RR) of the USD/INR, a measure of the spread between call and put prices, prints the biggest daily number in one week. Additionally portraying the USD/INR options market optimism is the upbeat print of weekly RR, following the negative marks of the previous week. In both cases the risk reversal figure is 0.035. It’s worth noting that the USD/INR pair’s latest pullback could be linked to the optimism surrounding China’s pro-growth policies. However, the Sino-American tussles contradict the move and challenge the pair sellers. Further, a lack of momentum in the bond markets seems to restrict immediate USD/INR moves as traders await the US Core Personal Consumption Expenditure (PCE) - Price Index and Durable Goods Orders for November ahead of a holiday-shortened final week of 2022. Also read: Pre-Christmas US Data Preview: Core PCE and Durable Goods may extend US Dollar retreat
The Price Of USD/JPY Pair Has To Fight With The Resistance Level

The US-Japan Rate Differential Could Supports Prospects For Some Meaningful Upside For The USD/JPY Pair

TeleTrade Comments TeleTrade Comments 23.12.2022 09:21
USD/JPY struggles for a firm intraday direction and seesaws between tepid gains/minor losses. A positive risk tone, widening US-Japan rate differential undermine the JPY and offer support. Bulls, however, seem reluctant and prefer to wait for the US PCE data before placing fresh bets. The USD/JPY pair builds on the previous day's rebound from the 131.65 area and touches a three-day high on Friday, though lacks bullish conviction. The pair manages to hold steady around mid-132.00s through the early European session as traders keenly await the US Personal Consumption Expenditure (PCE) data before placing fresh directional bets. The Fed's preferred inflation gauge, the Core PCE Price Index is due for release later during the early North American session and will provide fresh cues on inflationary pressures. This, in turn, should play a key role in influencing the next policy move by the Fed and help determine the next leg of a directional move for the US Dollar. Heading into the key data risk, investors prefer to wait on the sidelines, leading to subdued range-bound price action around the USD/JPY pair. The downside, meanwhile, remains cushioned amid a recovery in the global risk sentiment, which tends to undermine the safe-haven Japanese Yen. Apart from this, a further rise in the US Treasury bond yields, bolstered by reviving bets for a more aggressive policy tightening by the Fed, acts as a tailwind for the USD and lends some support to the USD/JPY pair. Against the backdrop of a more hawkish commentary by the Fed last week, the upbeat US macro data released on Thursday fueled speculations that the US central bank will have to stick to its hawkish stance to tame inflation. This, in turn, pushes the yield on the benchmark 10-year US government bond closer to the monthly top. The resultant widening of the US-Japan rate differential could contribute to driving flows away from the JPY and supports prospects for some meaningful upside for the USD/JPY pair. That said, the Bank of Japan's recent policy tweak, widening the range for fluctuations in the 10-year government bond yield, benefits the JPY and warrants caution for bullish traders. Hence, it will be prudent to wait for strong follow-through buying before confirming that spot prices have bottomed out.
Upcoming Corporate Earnings Reports: Ashtead, GameStop, and DocuSign - September 5-7, 2023

The Economy In Britain And The EU May Shrink In The Second Quarter Of The Fourth

InstaForex Analysis InstaForex Analysis 23.12.2022 09:29
The EUR/USD instrument has been immobilized in the final days of the current year. The upward wave e has already assumed a sufficiently extended form and should be finished, so the market sees no reason to start building a correction wave at this time. Although there hasn't been much news this week, some information has been received. Luis de Guindos, who serves as Christine Lagarde's "right hand," in particular, spoke twice this week. He stated on Monday that he had no idea how much higher ECB rates would go or how high they could go. Such statements from one of the founding members of the ECB, in my opinion, do not boost public confidence in the euro. I'm sure that the demand for the euro currency would be waning right now if the market hadn't taken its vacation earlier than expected. Just as the British pound, which also constructed a sizable wave e but has already begun to decline, is being hit by it. Luis de Guindos provided new commentary on monetary policy on Thursday, stating "The ECB will raise interest rates "at such a pace" for a predetermined period." We mean a step of 50 basis points when we say "at this rate," as was the case at the meeting in December. I'm not sure what is meant by "a certain time," though. Both "two more meetings" and "five more meetings" can be meant by this expression. The market must, however, be aware of the potential magnitude of the rate increase. Since its limit value of 4% and 6% differs, the market response and the euro exchange rate will also vary. In other words, de Guindos omitted to address the crucial issues. He asserted that the EU economy could contract by 0.2-0.3% by the end of the fourth quarter, which could signal the start of a recession. Let me remind you that two consecutive "negative" quarters at the beginning of this year, despite strong growth in the third, could have signaled the beginning of the US recession. In contrast, the economy in Britain and the EU grew only moderately in the first two quarters, shrank in the first quarter of the third, and may shrink in the second quarter of the fourth. As a result, both European economies could experience negative economic growth, which would require central banks to exercise greater caution in tightening monetary policy. In America, there are no such issues at the moment, and the rate is already getting close to its final value. The Fed no longer needs to raise rates by 75 or 50 basis points at each meeting, even though the recession may start in 2023. This situation, in my opinion, will affect the dollar in the coming month or two. This assumption fits the current wave markup very well, as a decrease is anticipated for both instruments. I conclude from the analysis that the upward trend section's construction has grown more intricate and is almost finished. As a result, I suggest making sales with targets close to the estimated 0.9994 level, or 323.6% Fibonacci. Although there is a strong likelihood that the upward portion of the trend will become even more extended and complicated, there is currently a signal to turn lower. The construction of a new downward trend segment is predicated on the wave pattern of the pound/dollar instrument. Since the wave marking permits the current construction of a downward trend section, I am unable to advise purchasing the instrument. With targets around the 1.1707 mark, or 161.8% Fibonacci, sales are now more accurate. Wave e is likely finished, though it could take on an even longer form. Relevance up to 06:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330612
The Results Of The March Meeting Of The Bank Of Japan Are Rather Symbolic

The Bank Of Japan Will Shock The Markets Once More Due To Inflation In Japan Has Increased

InstaForex Analysis InstaForex Analysis 23.12.2022 09:34
The Central Bank of Japan's recent actions appears to have been intended as a warning. As of today, the primary measure of inflation in Japan has increased even further and reached its highest level since 1981, which will undoubtedly increase market speculation that the Bank of Japan will shock the markets once more by altering its monetary policy in 2023. The Ministry of Internal Affairs reports that consumer prices in Japan increased by 3.7% in November compared to the same month last year. The Bank of Japan's primary index's results and the economists' evaluation were in agreement. The growth of the index was primarily driven by higher food prices, which even outpaced the growth of energy prices. It is clear that a variety of government initiatives, such as funding travel, contributed to keeping prices below 4%, but the battle against high inflation is far from over. Those who trade Japanese bonds barely responded to these data: Benchmark 10-year bonds and five-year securities both saw modest increases, which caused yields to drop by one basis point to 0.205%. The foreign exchange market hasn't undergone many notable changes either. Notably, core inflation has gone above the Bank of Japan's 2% target for eight straight months. The main trend is strengthening, as evidenced by the current level of inflation, which is 2.8% when fresh food and energy are excluded. Now, speculation that the central bank is on the verge of a policy reversal will continue to be supported by recent actions of Bank of Japan Governor Haruhiko Kuroda and recent data. Let me remind you that Kuroda shocked the markets at the beginning of the week when he announced that he would now permit the yield on 10-year Japanese bonds to rise to about 0.5%, which is twice the prior cap of 0.25%. All of this is a tactical maneuver to buy time before determining the future yield curve, which will change after the Central Bank's policy is altered next year when it is anticipated that interest rates will be raised. Many economists now anticipate that after the new governor assumes office, a policy change could occur as soon as next spring. Regarding the outlook for monetary policy, many analysts now predict that core inflation in Japan will reach 4% in December of this year before dipping to 2.7% in the first quarter of 2023 as a result of new government subsidies. Furthermore, data for January won't be available until after the Bank of Japan meeting in January, although economists anticipate that these subsidies will start to have a significant impact on inflation in that month. Regarding the USDJPY pair's technical picture, it is clear that the area around 130.20 serves as strong support over the long term. After the most recent news, the level of 121.10 will be the furthest goal. Its breakdown will trigger another significant sell-off in the vicinity of 126.20. It is not necessary to mention that the demand for the yen will decline in some circumstances right now. Regarding the EURUSD's technical picture, the demand for the currency is still quite weak, but there is still a chance that it will reach its December highs. To achieve this, a break above 1.0660 is required, which will cause the trading instrument to surge toward the new December high of 1.0700. You can easily climb to 1.0740 above this point. Only the failure of support at 1.0580 will put more pressure on the pair and drive EURUSD to 1.0540 with the possibility of falling to a minimum of 1.0490 if the trading instrument declines. Relevance up to 08:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330634
For What It Is Worthy To Pay Attention Next Week 23.01-29.01

Saxo Bank Podcast: Discussing These Pressing Wish List Items For The New Year

Saxo Bank Saxo Bank 23.12.2022 11:32
Summary:  In this Special Edition of the podcast, we discuss what investors are hoping to see in 2023 after the most traumatic year for "balanced" portfolios in modern memory. Items on the Wish List include hopes for a soft landing, easing pressure from central banks as inflation fades, a weaker US dollar, Chinese demand returning and more. But is this what investors will get? Discussing these pressing wish list items for the New Year on this special edition podcast are Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Read next:Migration Of Sports From Traditional Television To Streaming Is Chugging Ahead- The NFL Sunday Ticket On YouTube| FXMAG.COM Source: Podcast: Special Edition - Investors' Wish List for 2023 | Saxo Group (home.saxo)
Analysis Of Movement Of The Canadian Dollar To Swiss Franc Pair (CAD/CHF)

Analysis Of Movement Of The Canadian Dollar To Swiss Franc Pair (CAD/CHF)

InstaForex Analysis InstaForex Analysis 23.12.2022 11:48
The previous trading plan in CAD/CHF discussed about setting new buy limits in the market. For traders who have failed to follow this, there is still a chance to enter the market at better prices, but with stop orders not limit orders. Starting from the current prices, place a buy stop order in increments of 500 pips. Exit upon the breakdown of 0.709. This strategy is called grid trading, which is usually used on cross rates. It involves holding positions that are significant in time and distance. For that reason, it is recommended to use swap-free accounts, not increasing the volumes in the grid (0.01 standard lot for every $1,000 of the deposit), and monitoring price movements. Good luck and have a nice day! Don't forget to control the risks. Relevance up to 09:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330646
Outlook 2023: The Major Trends And Themes For The Coming Year

Outlook 2023: The Major Trends And Themes For The Coming Year

Swissquote Bank Swissquote Bank 23.12.2022 11:38
DISCLAIMER: The opinions and comments of the speakers provided in this video do not constitute investment advice. You are responsible for your trades. All investments involve risk. 2022 has been very difficult for financial markets, equities, crypto, and bonds went down. Investors were hardly finding a safe place. In this chaotic environment, Peter Rosenstreich, head of investment products at Swissquote, and Ipek Ozkardeskaya, senior analyst, discuss the major trends and themes for the coming year and the way to invest for private clients with managed and balanced portfolios.   00:00 Intro 00:24 How to hedge or benefit from inflation 02:36 Shorting the global markets 06:54 Promising sectors for 2023? 08:32 Sustainable energy & decarbonization 09:10 Metaverse counter-performance 10:30 Global cybersecurity needs growing 11:57 Low point of semiconductors? 12:45 China: economic growth vs equity valuation 14:27 Themes Trading: how to invest in megatrends Peter Rosenstreich is the head of investment products at Swissquote. He identifies and analyses opportunities in structural and sustainable change, which includes new business models, disruptive technology, and impacts from sustainable investment. Ipek Ozkardeskaya began her financial career in 2010 at the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high-net-worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst at the London Capital Group in London and in Shanghai. She returned to Swissquote Bank as a Senior Analyst in 2020. #swissquote #megatrend #themestrading #inflation #sustainability #decarbonisation #investing #investingtips #metaverse #cybersecurity #chinastocks _____ Themes Trading is a product issued by Swissquote Bank SA based in Switzerland and regulated by FINMA. _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars, and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Apple Q3 2023 Results – Surpassing Expectations and Aiming for New Heights

Major Currency Pairs Are Trading Green Today. EUR/USD Holds Above 1.06, GBP/USD Trades Help At 1.21

Kamila Szypuła Kamila Szypuła 23.12.2022 12:56
The dollar fluctuated on Friday and was little changed in morning trading in London after two days of gains, as investors weighed up the outlook for interest rates following the release of stronger than expected U.S. economic data on Thursday. The dollar index has dropped more than 8% since hitting a 20-year high in September, with a sharp slowdown in U.S. inflation raising hopes that the Fed may soon end its tightening cycle. A second report said the U.S. economy rebounded in the third quarter at a pace faster than previously estimated. In today's economic calendar, the focus is solely on US economic data. EUR/USD The euro was up slightly against the dollar, standing 0.1% higher at $1.061, after slipping less than 0.1% on Thursday. The pair traded low yesterday around 1.06, sometimes falling below this level. Today, the pair is recovering and trading above 1.06 again, mainly in the 1.0610-1.0620 range GBP/USD The cable pair is trading around 1.20. It is now up and trading close to $1.21, 1.2070 to be exact. Yesterday, the price of the pair fell even below 1.20, today it is recovering, similarly to the euro pair. It grows especially during the European session. Yesterday’s UK GDP brought about the first quarter of negative growth for the UK economy in 2022. In addition, strike action in the UK, dishing household income in the midst of elevated inflation makes conditions tough for the Bank of England (BoE) but may likely end rate hikes sooner than the Federal Reserve. Read next: Migration Of Sports From Traditional Television To Streaming Is Chugging Ahead- The NFL Sunday Ticket On YouTube| FXMAG.COM USD/JPY USD/JPY holds trade above 132. And like the other major currency pairs, it is trading much higher today than it did at the end of yesterday. The Japanese yen was down 0.2% at 132.62 to the dollar. Yet the Japanese currency was on track for a weekly gain of around 3% after the Bank of Japan (BOJ) tweaked a key bond market policy earlier this week. Former deputy finance minister Eisuke Sakakibara said in an interview with Bloomberg that he sees USD/JPY could rise to 120. Earlier this year, he said USD/JPY could rise to 150. In October it was just over 152, its highest level since 1990. And maybe this time his predictions will come true. He also believes the BoJ may raise the yield curve control limit at the January meeting. Further tightening of monetary policy by the BoJ may not be what some market participants expect, and further hawkish attitude may come as a surprise. The Japanese yen is a little confused after CPI figures bring pressure on building prices for the country's archipelago. The headline CPI was the highest in 30 years and by the end of November amounted to 3.8% yoy. It was below expectations at 3.9%, but above standard at 3.7%. AUD/USD The Australian pair traded below $0.67 yesterday. Today she tried to cross that level again. I managed to get over it for a while. Currently, the pair is below $0.67, 0.6696 to be exact. The Australian dollar traded below $0.67 facing renewed pressure as better-than-expected US data bolstered the case for further monetary tightening from the Federal Reserve. Meanwhile, a recent rise in local bond yields has saved the Australian from further losses as an unexpected hawkish turn from the Bank of Japan fueled expectations that Japanese investors could shed Australian debt to bring some funds back home. Source: dailyfx.com, investing.com, finance.yahoo.com
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

Canadian inflation report was mixed but there is a strong likelihood that the BoC will raise rates by 25bp

Kenny Fisher Kenny Fisher 23.12.2022 13:26
The Canadian dollar has edged lower on Friday. In the European session, USD/CAD is trading at 1.3600, down 0.33%. We could see stronger movement from the Canadian dollar in the North American session, with key events in both Canada and the US. Canada releases GDP for October, with a forecast of a weak gain of 0.1% m/m. This would be unchanged from September GDP. Canadian consumers have been holding tighter to the purse strings and saving their hard-earned money, as wage growth has failed to keep pace with inflation. The decline in consumer spending has hurt economic growth and there are worrying signs that economic growth has stalled in the fourth quarter. In the US, the week wraps up with a host of events. The markets will be paying particular attention to the PCE Core Index, the Fed’s preferred interest indicator. The index is expected to slow to 4.6% y/y in November, down from 5.0% a month earlier. Personal Spending and Personal Income are also expected to soften. The US also releases durable goods, UoM consumer confidence and UoM inflation expectations. GDP revised upwards, jobless claims beat forecast The US dollar received a lift on Thursday, thanks to some solid US data. Unemployment claims rose to 216,000, up from 214,000, but investors liked that the reading was lower than the consensus of 222,000. As well, GDP for Q3 was revised upwards to 3.2%, up from 2.9% in the initial estimate. The strong data is another indication that the Federal Reserve needs to maintain its aggressive tightening stance, which has raised the likelihood of higher-for-longer rates. The markets were hoping that Thursday’s Canadian inflation report would provide clues about BoC rate policy, but inflation was mixed. Headline CPI slowed to 6.8%, down from 6.9%, while two core indicators rose slightly. It appears too early to determine if inflation is headed lower, and as thing stands, there is a strong likelihood that the BoC will raise rates by 25 basis points at its January meeting.   USD/CAD Technical There is resistance at 1.3640 and 1.3762 1.3576 and 1.3484 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Analysis Of The EUR/JPY Pair Movement

A Rising Speculation That The Bank of Japan Could Tighten Policy In The Near Term

Kenny Fisher Kenny Fisher 23.12.2022 14:17
The dust is beginning to settle after the Bank of Japan’s stunning move earlier this week.  At its policy meeting, the BoJ widened the yield curve on long-term bonds from 0.25% to 0.50%. The move blindsided the markets, which had anticipated a ho-hum BoJ meeting with no changes in policy. The announcement sent USD/JPY tumbling by over 500 points and has raised speculation that the BOJ could make further changes before BOJ Governor Kuroda wraps up his term in April. The yen has since settled down and the markets are keeping an eye on other releases. National Core CPI for November delivered as expected, as the 3.7% gain matched the consensus and ticked up from 3.6% in October. The BoJ also released meeting minutes, but these were from the October meeting. Some members voiced concern about the strong descent of the yen, saying it caused uncertainty and had many negative effects on the economy. It should be kept in mind that the yen was much weaker in October when these comments were made, but it does indicate that the yen’s strength is of concern to the BOJ. Another interesting comment was that the Bank needed to assess how the markets would react if the BoJ decided to exit its easy policy. After this week’s yield curve move, this point takes on added urgency, with rising speculation that the BoJ could tighten policy in the near term. Markets eye PCE Core Index In the US, there are a host of events today. The markets will be paying particular attention to the PCE Core Index, the Fed’s preferred interest indicator. The index is expected to slow to 4.6% y/y in November, down from 5.0% a month earlier. Personal Spending and Personal Income are also expected to soften. The US also releases durable goods, UoM consumer confidence and UoM inflation expectations. Investors will be paying close attention to the inflation and inflation expectation releases. The US posted strong numbers on Thursday. Unemployment claims rose to 216,000, up from 214,000, but investors liked that the reading was lower than the consensus of 222,000. As well, GDP for Q3 was revised upwards to 3.2%, up from 2.9% in the initial estimate. The solid is another indication that the economy is well-positioned to handle additional rate hikes, which the Fed has promised as it battles inflation.   USD/JPY Technical  USD/JPY is putting pressure on resistance at 132.83. Above, there is resistance at 134.12 There is support at 131.13 and 130.15 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The Kiwi (NZD) Saw A Sharp Further Run To The Downside Yesterday, The EUR/GBP Pair Tests The Highs

Saxo Bank Saxo Bank 23.12.2022 14:26
Summary:  After Q3 GDP data revision that reminds us that the UK is in the vanguard for economies lurching into recession, sterling has lurched into a new slide and is even threatening a break down versus the euro as EURGBP tests the highs since the Truss-Kwarteng mini-budget sterling wipeout. Elsewhere, a plunge in the kiwi is likely down to position squaring and rebalancing ahead of year end after a remarkable recent run. Today's Special Edition Saxo Market Call podcast: Investors' Wish List for 2023.  FX Trading focus: Sterling stumbles after weak GDP, Kiwi longs take profit. Last important US data point of the year up today: November PCE inflation. The latest Q3 UK GDP revisions suggest the economy is weakening even more quickly than previously thought last quarter, as growth was revised down to -0.3% QoQ from -0.2% previously, and the Private Consumption figures was revised to -1.1% QoQ vs. -0.5% previously. The combination of a Bank of England that wants to soft-pedal further tightening and the promises of fiscal austerity from the Sunak-Hunt duo are a powerful negative for sterling as we look ahead into the New Year, which will likely bring relative UK economic weakness even if our thoughts that  recession fears for next year globally are over-baked for the first two and even three quarters. The FX fundamentals are entirely the opposite for the euro, as the ECB attempts a maximum hawkish stance as it recognizes the risks that the fiscal impulse can keep inflationary pressures elevated from here. The two-year yield spread is close to its highest since October of last year. Chart: EURGBPA weak GDP revision yesterday didn’t appear to be the proximate trigger for sterling’s latest lurch lower, but does remind us of the relative weakness of the UK outlook and the combination of a heel-dragging BoE (on further tightening) and austere fiscal picture could set up further declines in the weeks and months. Worth noting that the key EURGBP is pushing on the top side of the range established since the volatile days surrounding the Truss-Kwarteng mini-budget announcement. A hold above 0.8800 could lead to a test of the higher end of the range since the 2016 Brexit vote above 0.9200. A higher euro is straightforward if ECB maintains its hawkish stance as the EU fiscal impulse is far stronger from here. The wildcard for the euro side of the equation is the usual existential one of peripheral spreads and whether these stay orderly if yields resume their rise next year. Source: Saxo Group Elsewhere, the kiwi saw a sharp further run to the downside yesterday with no proximate identifiable trigger. AUDNZD traded all the way to 1.0719 before backing off to below 1.0650 at one point this morning. I suspect that this was an extension of the position squaring after a the remarkable run higher in the kiwi over the last two months, driven both by relative RBNZ hawkishness, but in particular by RBA (and arguably BoC), sparking heavy flows in AUDNZD just after the pair had traded almost to a decade high on hopes for a Chinese reopening boosting the outlook for Australia. The current reality on the ground in China is even worse than during the zero Covid tolerance days, but we know that the Arguably, recent record low consumer confidence readings in New Zealand suggest that the RBNZ will need to climb down from its hawkishness, at least in relative terms to its peers, going into next year. After an incredible slide in AUDNZD and rally in NZDCAD, I suspect we will see powerful mean reversion in the coming three months in those pairs. It feels like USD traders have checked out for this year. Hard to tell if today’s US November PCE inflation data can generate any excitement on a soft print after the soft CPI print earlier this month generated a lot of fuss that quickly faded on the very same day. A more interesting development would be a slightly hot core set of PCE core readings than expected today (the month-on-month core reading expected at +0.2% and year-on-year expected to have decelerated sharply to 4.6% from 5.0% in October. EURUSD has traded within a 100-pip range for more than a week and the 1-month implied volatility has recently plumbed lows (around 7.50%) not seen since the beginning of this year and would probably be lower still had not the Bank of Japan roiled markets this week. But the USD will have a hard time ignoring any further slide in risk sentiment to close out the year. And the beginning of the calendar year is nearly always interesting for new themes and often for demarcating key highs or lows for the year. Consider the following from the last six years of the EURUSD trading history: 2022: High for the year in EURUSD posted in February, but that high was only a few pips above the 1.1483 high water mark of January. Low for year posted in September 2021: High for the year was in January, on the third trading day of the year, low in late November 2020: Exceptional pandemic year, low for year posted in March, high in December 2019: High for quite year posted on January 10, low on October 1 2018: High for year posted in February, but highest daily close not above intraday high in January. Low posted in November 2017: Low for year in January, high in September (December high less than a figure from September high water mark) Table: FX Board of G10 and CNH trend evolution and strength.The JPY still sits with a strong positive reading, but has yet to “trend” after the huge one-day move this week – a few more days of lack of movement and questions marks would begin to flourish around its status. Elsewhere, note the NZD going full circle and now broadly outright weak after its status as king of the G10 as recently as less than two weeks ago. Gold posted a sharp reversal yesterday. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Note that the weakness in risk sensitive currencies like SEK, NZD, AUD & GBP are seeing those edging into a downtrend versus the US dollar – worth watching for a deepening of these moves if risk assets continue south into the New Year. The EURCHF bears watching if the pair can take out 0.9900-0.9950 as currently the pair is caught in a very tight range. NZD is rolling over in many pairings. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights 1330 – Canada Oct. GDP 1330 – US Nov. PCE Inflation 1330 – US Nov. Flash Durable Goods Orders 1500 – US Dec. Final University of Michigan Confidence   Source: https://www.home.saxo/content/articles/forex/fx-update-sterling-and-kiwi-stumble-as-year-winds-down-23122022
The Pound Is Now Openly Enjoying A Favorable Moment

The Cable Market (GBP/USD) In The Week Leading Up To Christmas Drops Significantly

Kamila Szypuła Kamila Szypuła 24.12.2022 14:33
The dollar weakened against most currencies in uncertain, weak trading on Friday as data signaled the US economy was cooling down somewhat, bolstering expectations of smaller interest rate hikes by the Federal Reserve and improving investors' appetite for risk. Excluding the volatile food and energy components, the PCE index gained 0.2% after rising 0.3% in October. The so-called core PCE price index rose 4.7% year-on-year in November, following a 5.0% increase in October. The Fed tracks PCE price indices for its monetary policy. The Fed is widely expected to raise interest rates by just 25 basis points at its next policy meeting in January, after a series of big hikes. USD/JPY The Jena/Dollar pair enjoyed a high level only on Monday, i.e. before the Bank Of Japan meeting. The pair's trade on this day was the highest of the week, with the day's highest trade reaching 137.4430. On Tuesday, the day of the Bank of Japan meeting, the pair dropped drastically and traded below 133. It also hit a low on that day, trading at 130.68. USD/JPY traded in the 132-133 range for most of the week. It closed the week at 132.8720. Against the yen, the dollar rose 0.4% to 132.82 yen. The dollar, however, was on track for a weekly drop of 2.8% after the Bank of Japan (BOJ) revised a key bond market policy earlier this week. In a surprise move, the Bank of Japan adjusted its yield curve control strategy this week, broadening the range where long-term Japanese yields are allowed to trade. Governor Kuroda downplayed the action as a mere "fine-tuning" of policy to ensure the smooth functioning of the domestic bond market, insisting that it was not really a tightening. Markets now expect the BoJ to leave negative rates by April, pricing in a 15bps rate hike that will bring rates back above zero. Then the new governor of the BoJ will take over, so investors are basically betting that the change of leadership will usher in a new era of monetary tightening in Japan. EUR/USD EUR/USD traded mixed. The weekly range was very wide 1.0580-1.0660. The highest level was recorded at the upper end of the weekly range, 1.0660, and the lowest level was read on Thursday and it was lower than the 1.0578 range. In terms of projected fundamental event risk until the end of 2022, last Friday's PCE deflator was arguably the last significant release. The Fed's preferred inflation reading fell from 6.1 to 5.5, while the core reading was in line with expectations, falling from 5.0 to 4.7 percent. GBP/USD Contrary to EUR/USD, the cable pair has been falling day by day this week. It peaked at the beginning of the week trading above 1.22, 1.2241 to be exact. The lowest level was below 1.20. GBP/USD's weekly low was at 1,996. These declines were significantly affected by the publication of UK GDP. Revised figures show the UK economy contracted more than initially thought in the three months leading up to September. The economy shrank by 0.3%, down from the previous estimate of 0.2%, as business investment performed worse than initially thought. Growth figures for the first half of 2022 have also been revised downwards. The UK is expected to fall into recession in the final three months of the year as soaring prices hit growth. AUD/USD The currencies of Australia, New Zealand and Canada strengthened against the US dollar. The Australian unit rose 0.4% to $0.6710 The Aussie pair mostly traded in the 0.6650-06750 range this week. It peaked on Thursday, with the pair trading high at 0.6768, while the week's low was well below the weekly range. The low of the week is 0.6638. The Australian will close the week at 0.6720. The main drivers were Chinese optimism about stimulating economic growth in 2023, as well as fluctuations in the USD based on US economic data. Markets may be a bit overreacting to global risk sentiment given the worsening COVID situation in China, which could put the Australian dollar at risk for further weakness in the coming week as well as in the first quarter of 2023. Source: investing.com, finance.yahoo.com
The EUR/USD Pair Has A Potential For The Breakout Mode

EUR/USD Pair: Volatility Will Return After The Christmas Holidays

InstaForex Analysis InstaForex Analysis 27.12.2022 08:05
Analysis of transactions in the EUR / USD pair There were no market signals on Monday because the pair failed to test any of the presumed levels. The same situation could occur today, but volatility will return after the Christmas holidays are over. By then, large movements will be seen in EUR/USD. For today, the pair is unlikely to move up, especially since there are no statistics due out in the Euro area. The upcoming US reports on the foreign trade balance, inventories in wholesale warehouses and housing price index are also of little interest, but given the low trading volume, figures that are better than expected could lead EUR/USD lower. For long positions: Buy euro when the quote reaches 1.0655 (green line on the chart) and take profit at the price of 1.0690. Although there is a chance for growth today, it is unlikely to be last long. Also, buy only when the MACD line is above zero or starting to rise from it. Euro can also be bought at 1.0628, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0655 and 1.0690. For short positions: Sell euro when the quote reaches 1.0628 (red line on the chart) and take profit at the price of 1.0590. Pressure will return if the US reports strong statistics. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0655, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0628 and 1.0590. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 05:00 2022-12-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330830
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Upward Correction In GBP/USD Pair Could End At Any Moment

InstaForex Analysis InstaForex Analysis 27.12.2022 08:09
Analysis of transactions in the GBP / USD pair There were no market signals on Monday because the pair failed to test any of the presumed levels. There are no statistics due out in the UK today, so the upward correction in GBP/USD could end at any moment. Also, the upcoming US reports on the foreign trade balance, inventories in wholesale warehouses and housing price index are of little interest, but given the low trading volume, figures that are better than expected could lead the pair lower. A break of yesterday's lows will add pressure on the market, which will quickly push the pair towards monthly support levels. This is why traders should be careful when buying at the current highs. For long positions: Buy pound when the quote reaches 1.2100 (green line on the chart) and take profit at the price of 1.2141 (thicker green line on the chart). Growth could occur, but do not expect strong rises. Buy when the MACD line should be above zero or is starting to rise from it. Pound can also be bought at 1.2061, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.2100 and 1.2141. For short positions: Sell pound when the quote reaches 1.2061 (red line on the chart) and take profit at the price of 1.2007. Pressure will return if the US reports strong statistics. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.2100, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.2061 and 1.2007. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 05:00 2022-12-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330832
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

EUR/USD Pair Is Still In A High Position And Is Still In A Total Flat

Paolo Greco Paolo Greco 27.12.2022 08:11
M5 chart of EUR/USD EUR/USD is still trading within the 1.0581-1.0658 horizontal channel on Monday. As I mentioned earlier, such a clear horizontal channel is more of a good thing right now since traders have clear reference points that they can use. But in general, there is no such movement, which is naturally hard to consider as a favorable time to trade. Not only was there no trend on Monday, there was basically no movement. The volatility of the day was about 20 points, and there were no reports or events in the US or the EU. This is probably due to the Christmas holidays. Many platforms, exchanges and companies were simply closed on Monday. No trading signals on Monday, which means that you shouldn't enter the market. Today, the situation might improve a bit (in terms of volatility), but we probably won't see any movement outside the 1.0581-1.0658 channel. Especially considering the overnight rebound from the upper limit, which could be regarded as a sell signal. Now the pair can go down to 1.0581. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, non-commercial traders opened 12,700 long positions, whereas the number of short positions fell by 4,800. Thus, the net positions rose by 7,900. The number of long positions is 143,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? From our point of view, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to adjust. The overall number of short orders exceeds the number of long orders by 43,000 (684,000 vs. 641,000). H1 chart of EUR/USD EUR/USD is still in a high position on the one-hour chart, and is still in a total flat. Lines of the Ichimoku indicator have already merged with each other and have lost meaning. As we can see, they are being worked out with precision. You should go for the 1.0581-1.0658 channel. If EUR manages to go beyond it, then we can count on some trend movement. Or you should continue to trade on a rebound from these levels. On Tuesday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658, 1.0736, 1.0806, as well as Senkou Span B (1.0589) and Kijun Sen (1.0656). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 27, no important report or event scheduled in the EU and the US. I don't expect the flat to end today. Volatility will probably remain low. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group. Relevance up to 05:00 2022-12-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330820
The EUR/AUD Pair May Have The Potential To Continue Its Decline

No Justification For The Euro To Rise Against The Dollar

Paolo Greco Paolo Greco 27.12.2022 08:15
On Monday, the EUR/USD currency pair did not stay in a flat position. It did not move at all. The day's volatility, which was 20 points, can be safely regarded as the lowest level of the year. Regarding the present technical situation, there is nothing more to be said in theory. Additionally, from a fundamental and macroeconomic perspective, given that neither the United States nor the European Union had any notable events on Monday. Now, locating the price's position with the moving average or focusing on the linear regression channels' direction is useless. The pair are motionless. Opening transactions is pointless if the market is stagnant. The flat was evident yesterday because, in theory, the pair has been trading in a very narrow side channel for more than a week. It will probably continue at least through the end of this year. Possibly even longer. We still anticipate a significant downward correction in the medium term, but the flat must first end. We continue to see no justification for the euro to rise against the dollar. This has been covered extensively already, so we won't go over it again. Does COVID spread outside of China? The unprecedented rate of the "coronavirus'" spread within their own country may have been the most important news of the previous week. When alarming reports from China first started to arrive a few weeks ago, we issued a warning that the Chinese government might conceal the true number of infections and fatalities. Information about the actual state of things started to leak into the international media, despite the insane rates of dissemination. The number of infected people currently numbers in the hundreds of millions. There aren't enough doctors and hospitals in the nation to treat a fifth or a sixth of the population, making it physically impossible to count every person who has already contracted the disease. Therefore, if the situation is worse in reality, we won't be shocked. According to some reports from unreliable sources, hospitals are overcrowded, which is understandable based solely on the number of infections. The situation is shocking all around. There is no doubt that the Chinese economy will continue to decline even if COVID does not spread beyond China this time. "Lockdowns," widespread illness-related absences from work, an initial massive economic contraction, and the launch of new stabilization initiatives, all of which will accelerate inflation. And it is extremely challenging to identify a nation in the world today that is not connected to China. Additionally, this implies that other nations' economies will also suffer. The world may enter a state similar to that of the end of 2019 and the beginning of 2020 if the infection escapes the Celestial Empire once more. Even though vaccines are available globally, this in no way implies that "coronavirus" infections and fatalities have decreased among people. We appear to be in for another fantastic year full of interesting surprises. As of December 27, the euro/dollar currency pair's average volatility over the previous five trading days was 54 points, which is considered "average." So, on Tuesday, we anticipate the pair to fluctuate between 1.0577 and 1.0685 levels. The Heiken Ashi indicator's reversals are now completely irrelevant because the pair is flat. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: Although the EUR/USD pair continues to move higher, we have been seeing a flat price for more than a week. Trading can only be done on the lower TF inside the side channel because the 4-hour TF hardly ever moves. Explanations for the illustrations: Channels for linear regression help identify the current trend. The trend is currently strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones. Relevance up to 04:00 2022-12-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330816
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The Downward Bias Of The GBP/USD Pair Persists

Paolo Greco Paolo Greco 27.12.2022 08:20
M5 chart of GBP/USD GBP/USD traded flat on Monday as well, although last week it had shown at least some movement. However, Monday was a holiday, and volatility rose in the evening, which gives us hope to see at least some kind of movement. But because of a complete absence of the fundamental and macroeconomic background, it will be difficult to expect a trend or high volatility. But at least there's still some kind of movement. I expect the pound to continue the downward movement on the one-hour chart, which is a part of the global correction at the higher time frames. In our fundamental articles, we discuss why this movement makes sense at the moment. Naturally, there were no trading signals yesterday, and the pair showed about 30 pips of volatility and did not even approach any level or line. Therefore, you shouldn't have entered the market yesterday. COT report The latest COT report showed a decrease in bearish sentiment. During the given period, non-commercial traders opened 3,200 long positions and closed as many as 16,800 short positions. Thus, the net position grew by about 20,000, which is a lot for the pound. This figure has been on the rise for several months. Nevertheless, sentiment remains bearish, and GBP/USD is on the rise for no reason. I assume that the pair may well resume the downtrend soon since there is a need for at least a correction. Notably, both GBP/USD and EUR/USD now show practically identical movement. Since the net position is not even bullish yet, buying may continue for a few months to come. Non-commercial traders now hold 40,800,000 short positions and 35,200 long ones. The gap between them is small. I am still skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD is still trading below the lines of the Ichimoku indicator and it just reached the critical Kijun sen line on Monday night, from which it bounced. You can acknowledge the rebound as a sell signal, so expect the pound to fall. On Tuesday, the pair may trade at the following levels: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259. Senkou Span B (1.2265) and Kijun Sen (1.2093) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. There are no important events in the UK and the US, so there will be nothing to react to for today. I believe that we will continue to see a flat, but the downward bias also persists, so GBP could move down. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group Relevance up to 05:00 2022-12-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330824
Analysis Of The EUR/JPY Pair Movement

The US Dollor To Japanese Yen Situation (USD/JPY)

InstaForex Analysis InstaForex Analysis 27.12.2022 08:34
Since our last update, wave A of the expected A-B-C correction is about done and wave B is ready to take over for a corrective rally toward 141.25 from where wave C is likely to take over for a decline towards 119.10 and maybe even closer to solid support near 115.00. In the short term, we expect a second dip closer to 130.00 to complete wave A and set the stage for wave B to take over and start the corrective rally toward 141.25. Relevance up to 07:00 2022-12-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306393
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The Kiwi Pair (NZD/USD) Cheers The Broadly-Softer The US Dollar

TeleTrade Comments TeleTrade Comments 27.12.2022 08:58
NZD/USD seesaws inside immediate trading range, prints mild gains. China Industrial Profits deteriorate, Beijing scraps Covid quarantine rule for inbound travelers. US Dollar Index prints three-day downtrend as softer US statistics challenge hawkish Fed bets. NZD/USD bulls flirt with the 0.6300 round figure while posting a three-day winning streak early Tuesday. In doing so, the Kiwi pair cheers the broadly-softer US Dollar, as well as the risk-on mood. However, recently downbeat data from China joins the holiday mood to probe the bulls. That said, China’s Industrial Profits dropped 3.6% during the January-November period versus -3.0% previous readings. Further, geopolitical fears emanating from Russia and North Korea also challenge the Kiwi pair buyers amid the year-end inaction in the markets. Even so, risk appetite remains firmer as scrapped the COVID quarantine rule for inbound travelers, starting from January 08. Furthermore, the softer prints of the US inflation and output data raise doubts about the Federal Reserve’s (Fed) next hawkish move and hence weigh on the US Dollar. As a result, the US Dollar Index (DXY) drops for the third consecutive day, down 0.13% intraday near 104.05 by the press time. On Friday, US Core Personal Consumption Expenditures (PCE) Price Index, mostly known as the Fed’s favorite inflation gauge, matched 4.7% YoY forecasts for November versus 5.0% prior. Further, the Durable Goods Orders for the said month marked a contraction of 2.1% compared to -0.6% expected and 0.7% previous readings. More importantly, the Nondefense Capital Goods Orders ex Aircraft marked improvement of 0.2% compared to 0.0% expected and 0.3% revised down prior. Additionally, the Federal Reserve (Fed) Bank of Atlanta’s GDPNow tracker rose to show +3.7% annualized growth for the fourth quarter (Q4) versus +2.7% previous estimates. Against this backdrop, S&P 500 Futures rise 0.75% intraday to 3,898 whereas the US 10-year Treasury yields retreat to 3.73% at the latest. Looking forward, China-linked optimism could join the bearish bias from the Fed to propel the NZD/USD pair during a likely inactive week comprising no major data/events. Technical analysis An upside break of the previous resistance line from December 15, around 0.6215 by the press time, keeps NZD/USD buyers hopeful amid the bullish MACD signals. However, the 21-DMA hurdle surrounding 0.6345 guards the quote’s immediate upside.
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

Softer US Data Helps The AUD/USD Pair To Remain On The Buyer’s Radar

TeleTrade Comments TeleTrade Comments 27.12.2022 09:02
AUD/USD retreats from intraday high but stays positive for the second consecutive day. China Industrial Profits drop 3.6% during January-November period, easing Covid restrictions keep sentiment positive. Mixed US data weighs on hawkish Fed bets, US Dollar during holiday-thinned markets. AUD/USD pares intraday gains around 0.6750 during Tuesday’s sluggish morning in Europe. In doing so, the Aussie pair takes clues from the recently flashed downbeat China data. However, cautious optimism in the market joins the receding hawkish bias from the Federal Reserve (Fed) to keep the pair buyers hopeful. China’s Industrial Profits dropped 3.6% during the January-November period versus -3.0% prior. It’s worth noting, however, that the People’s Bank of China’s (PBOC) heavy liquidity injections keep the market sentiment firmer despite the downbeat data. That said, the Chinese central bank injected the most funds in two months during the last week. On a broader front, China scrapped the COVID quarantine rule for inbound travelers starting from January 08. The nation’s National Health Commission also mentioned “China's management of COVID-19 will also be downgraded to the less strict Category B from the current top-level Category A.” The news joined geopolitical fears emanating from Russia and North Korea to portray cautious optimism in the market. As a result, S&P 500 Futures rise 0.60% intraday to 3,892 whereas the US 10-year Treasury yields remain sluggish at around 3.74% by the press time. Other than the risk-positive catalysts from China, softer US data also helps AUD/USD to remain on the buyer’s radar. US Core Personal Consumption Expenditures (PCE) Price Index, mostly known as the Fed’s favorite inflation gauge, matched 4.7% YoY forecasts for November versus 5.0% prior. Further, the Durable Goods Orders for the said month marked a contraction of 2.1% compared to -0.6% expected and 0.7% previous readings. More importantly, the Nondefense Capital Goods Orders ex Aircraft marked improvement of 0.2% compared to 0.0% expected and 0.3% revised down prior. Additionally, the Federal Reserve (Fed) Bank of Atlanta’s GDPNow tracker rose to show +3.7% annualized growth for the fourth quarter (Q4) versus +2.7% previous estimates. Alternatively, geopolitical fears emanating from Russia and North Korea challenge the Aussie pair buyers amid the year-end inaction in the markets. Amid these plays, S&P 500 Futures rise 0.75% intraday to 3,898 whereas the US 10-year Treasury yields retreat to 3.73% at the latest. Given the market’s consolidation of intraday gains and the lack of major data/events ahead of Friday’s China PMIs, the pair traders should look for the qualitative catalyst for clear directions. Technical analysis Although the 100-DMA restricts short-term AUD/USD downside near 0.6650, a daily closing beyond the 21-DMA hurdle surrounding 0.6740 becomes necessary for the bulls to keep the reins.
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The GBP/JPY Pair Is Aiming To Re-Test A Six-Day High As A Continuation Of Loose Policy Is Impacting The Japanese Yen

TeleTrade Comments TeleTrade Comments 27.12.2022 08:54
GBP/JPY is approaching 161.00 as BOJ sees a continuation of easy monetary policy. BOJ Governor sees rising labor demand ahead and a shift in wage-setting behavior by the firms. The BOE needs to slowdown the interest rate hike pace as households are failing to segment monthly installments. The GBP/JPY pair has extended its gains to near 160.78 after rebounding from near the psychological resistance of 160.00 in the Asian session. The cross has gained sheer momentum as Bank of Japan (BOJ) Governor Haruhiko Kuroda is standing with the decade-long view of easy monetary policy. The asset is aiming to re-test a six-day high around 161.00 as a continuation of loose policy is impacting the Japanese yen. After the decision of widening the allowance band around BOJ’s yield target, BOJ’s Governor has cleared that the decision was not meant to be a step towards an exit from ultra-loose monetary policy. BOJ Governor sees rising labor demand ahead and a shift in wage-setting behavior by the firms. While Japan PM Fumio Kishida stated that it was premature to state now whether the government and the central bank could revise a decade-old joint statement that commits the Bank of Japan (BOJ) to achieve its 2% inflation target at the earliest date possible, as reported by Reuters. In the early Tokyo session, the Japan Statistics Bureau reported a decline in the Unemployment Rate to 2.5% vs. the expectations and the former release of 2.6%. The catalyst that has impacted the Japanese Yen is the weak Retail Sales data. The annual Retail Trade has dropped to 2.6% against the consensus of 2.8% while the monthly Retail Trade (Nov) has contracted by 1.1% while the street was expecting a contraction of 0.2%. On the UK front, think tank see a slowdown in the interest rate hike by the Bank of England (BOE) as households are failing to augment their monthly payments. Analysts at BBH think that the Bank of England tightening expectations may need to adjust lower after a separate consumer survey showed nearly two million UK households had failed to make at least one mortgage, rent, loan, credit card, or any other bill payment over the last month."  
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Oil Prices Have Extended Their Upside Journey And Support The Canadian Dollar (CAD)

TeleTrade Comments TeleTrade Comments 27.12.2022 09:15
USD/CAD has surrendered the previous week’s low around 1.3560 amid weakness in the US Dollar Index. A decline in the US PCE and US Durable Goods Orders data has cemented expectations for lower inflation ahead. An increment in oil prices led by supply worries on expected cuts from Russia has supported the Canadian Dollar. USD/CAD is expected to deliver more weakness below 1.3550 amid a Double Top formation. USD/CAD has witnessed a steep fall after surrendering the previous week’s low around 1.3560 in the early European session. The Loonie has dropped to near 1.3550 and is expected to display more weakness as the US Dollar Index (DXY) has faced immense pressure led by a decline in the United States Personal Consumption Expenditure (PCE) Price Index data released on Friday. The US Dollar Index has turned sideways in a 103.60-103.80 range after a gap down open. The appeal for the USD Index has been trimmed led by upbeat market sentiment. A significant decline in the consumption expenditure by households in the United States economy has improved the risk appetite of the market participants. Meanwhile, S&P500 futures have extended their gains after a firmer revival on Friday. A sheer drop in the consumption expenditure and the United States Durable Goods Orders data has provided comfort to the US equities. The return on 10-year US Treasury bonds is hovering around 3.74%. A decline in US PCE favors further inflation softening Federal Reserve (Fed) chair Jerome Powell and his teammates are putting their blood and sweat into achieving price stability in the United States economy. Inflation is still roaring, however, a gradual slowdown in the inflationary pressures on a recurring basis is delighting the Fed policymakers. The headline PCE dropped to 5.5% while the street was expecting a drop of 5.3% but remained significantly lower than the former release of 6.1%. While the core PCE Price Index remained in line with the estimates of 4.7% and lower than the prior release of 5.0%. This has cemented expectations of further decline in the United States inflation ahead. Consumption expenditure by households is a critical inflation indicator and a decline in the same is going to force the producers to curtail prices of goods and services at factory gates.   US Durable Goods Orders contraction favors less-hawkish Federal Reserve policy Apart from the decline in the United States PCE data, the catalyst that has impacted the US Dollar Index is the decline in the demand for Durable Goods. The US Durable Goods Orders have contracted by 2.1% against the consensus of a 0.6% contraction. A decline in demand for Durable Goods indicates a further drop in the core inflation measures as a slowdown in demand is critical for softening inflation in the economy. This may compel the Federal Reserve to go light on the interest rates by looking for a smaller rate hike. Also, a continuous decline in the overall demand could result in a lower interest rate peak by the Fed. Oil prices above $80.00 support the Canadian Dollar Oil prices have extended their upside journey and have crossed the psychological hurdle of $80.00 on escalating supply worries after Russia warned of supply cuts to offset the price cap imposed by G7 nations along with the European Union. According to Russia’s Deputy Prime Minister Alexander Novak, Moscow may cut its oil output by 500,000-700,000 barrels a day in early CY2023. Earlier, the G7 levied a price cap on Russian oil supply at $60/barrel to weaken its income for funding arms and ammunitions requirement for war with Ukraine. It is worth noting that Canada is a leading exporter of oil to the United States and higher oil prices support the Canadian Dollar. USD/CAD technical outlook USD/CAD has witnessed a steep fall after forming a Double Top chart pattern on an hourly scale. The Loonie asset witnessed a steep fall while attempting to surpass the crucial resistance of 1.3700 with less enthusiasm and zeal. The major is expected to display sheer downside if it surrenders the crucial support placed from December 14 low around 1.3520. The 50-and 200-period Exponential Moving Averages (EMAs) at 1.3615 have delivered a death cross, which indicates more weakness in the Lonnie asset ahead. Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which signals that the downside momentum has been triggered.     search   g_translate    
The USD/JPY Price Reversed From The Lower Limit

The USD/JPY Pair Will Take Cues From Risk Trends

TeleTrade Comments TeleTrade Comments 27.12.2022 09:20
USD/JPY is treading listlessly amid a quiet start to the holiday-shortened week. US Dollar drops with Treasury bond yields amid China-led risk-on mood. USD/JPY bulls need acceptance above 133.00 to resume the recovery. USD/JPY is trading on the defensive heading into the early European morning, as the Japanese yen traders take it easy after a volatile last week.   The downbeat tone around the pair could be partly due to a broad-based US Dollar weakness, fuelled by persisting risk flows and lower US Treasury bond yields. Reports that China is planning to scrap the quarantine rules for inbound travelers alongside further relaxation of restrictions boosted risk sentiment, weighing negatively on the safe-haven US Dollar. Light trading following the Christmas holiday weekend also left the USD/JPY pair gyrating in a narrow range below the 133.00 level so far. Markets refrain to place any fresh directional bets on the Japanese yen after the previous week’s surprise yield curve revision by the Bank of Japan (BoJ). The BoJ’s move caught markets off-guard and triggered a fresh sell-off in bonds and stocks globally before a ‘Santa rally’ kicked in the second of the week, helping calm market nerves. The pair will take cues from risk trends for any moves, as the US data docket remains relatively light amid a holiday-shortened week. From a short-term technical perspective, USD/JPY is failing to find acceptance above the 133.00 level, threatening recovery attempts. A sustained move above the latter is needed to extend the corrective upside toward the 133.50 psychological mark. However, the bearish 21-Daily Moving Average (DMA) cut the mildly bullish 200DMA from above, validating a bear cross on Friday. The 14-day Relative Strength Index (RSI) is sitting just above the oversold territory, backing the bearish potential. Friday’s low at 132.15 is the next downside target for sellers, below which the December 22 low at 131.64 could be retested. USD/JPY: Daily chart USD/JPY: Additional technical levels
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

EUR/USD Pair Has Potential For The Further Growth Towards Upper References

Peter Jacimovic Peter Jacimovic 27.12.2022 09:32
Technical analysis: EUR/USD has been trading upside and I found breakout of the resistance zone, which is good sign for the further growth. Trading recommendation: Due to the breakout of the resistance zone and strong upside trend in the background, I see potential for the further growth towards upper references. Watch for the potential buying opportunities on the intraday dips with the first upside objective at the price of 1.0730 MACD oscillator is showing fresh upside momentum, which is strong sign that buyers are in control. Key support is set at the price of 1.0640 Relevance up to 08:00 2022-12-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306419
German labour market starts the year off strongly

Germany’s Firms Brace For A Mild Recession In 2023

TeleTrade Comments TeleTrade Comments 27.12.2022 11:35
Citing a survey conducted by the Federation of German Industries (BDI) and the Association of German Chambers of Industry and Commerce (DIHK), Reuters reported that Germany’s firms brace for a mild recession in 2023 even though supply chain disruptions were expected to gradually ease. BDI’s President Siegfried Russwurm said, "The last quarter of 2022 and the start of 2023 are likely to be accompanied by a decline in economic activity. However, we expect only a slight slump." Meanwhile, DIHK President Peter Adrian noted, "Freight rates for container prices are approaching long-term normal values again, and the congestion outside international ports is slowly easing.” "If the announced relaxations of China's zero-COVID policy are implemented, it would also be a positive signal for global supply chains," Adrian added. Market reaction The above comments have little to no impact on the Euro, as EUR/USD is keeping its range at around 1.0650, still adding 0.18% on the day.
Tight Monetary Policy Is Already Weighing On The Swedish Housing Market

Economists At Danske Bank: "The EUR/SEK Uptrend In 3-6M Remains Intact"

TeleTrade Comments TeleTrade Comments 27.12.2022 11:47
Economists at Danske Bank expect EUR/SEK to move higher over the coming months to 11.20 due to weak growth dynamics, relative monetary policy and the Riksbank’s disregard for SEK weakness. Range-bound near-term, then higher “We stick to our non-consensus view on the SEK amid weak growth dynamics, especially for Europe, scope for another downturn in global equities and relative monetary policy where the Riksbank is far behind the Fed and treats the SEK with benign neglect. Furthermore, the interest-rate weapon is a double-edged sword for the SEK as too much tightening runs the risk of hurting the housing market and thus scaring away investors from SEK assets. These factors suggest that the EUR/SEK uptrend in 3-6M remains intact.” “In the 6-12M perspective, the Fed pivot and generally bigger optimism about the global economy may be real and with that a sustainable recovery in risk assets and the SEK.”  “Forecast: 10.80 (1M), 11.00 (3M), 11.20 (6M), 11.00 (12M).”
China’s Caixin Manufacturing PMI Data Might Support The New Zealand Dollar (NZD)

Analysis Of The NZD/USD Commodity Currency Pair

InstaForex Analysis InstaForex Analysis 27.12.2022 11:51
Considering that we are currently entering the Christmas and New Year holiday season, the NZD/USD Commodity currency pair on the 4-hour chart has the potential to move within a narrow range in the range 0.6228 - 0.6511, however due to the emergence of deviations between price movements and the Stochastic Oscillator indicator, the Kiwi has the potential to try to test the 0.6406 level as the first target and 0.6511 as the second target. However, if the momentum and volatility are inadequate, please pay attention to the 0.6228 level because if this level is successfully broken then NZD/USD has the potential to weaken. Relevance up to 02:00 2022-12-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/116399
Apple Q3 2023 Results – Surpassing Expectations and Aiming for New Heights

Economists At Danske Bank Forecast The EUR/GBP Exchange Rate To Fall Slightly

TeleTrade Comments TeleTrade Comments 27.12.2022 12:03
Economists at Danske Bank forecast EUR/GBP at 0.85 in 12 months as global growth slowdowns and relative appeal of UK assets to investors are a positive for the Pound relative to EUR. Modestly lower in 2023 “In the very near-term, we expect fragile risk appetite and too aggressive market pricing on the BoE to keep EUR/GBP around current levels.” “Further out, we remain cautiously optimistic that the cross will head modestly lower as a global growth slowdown and the relative appeal of UK assets to investors are a positive for GBP relative to EUR.” “Forecast: 0.87 (1M), 0.86 (3M), 0.85 (6M), 0.85 (12M).”
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

GBP/USD Is Struggling, The Aussie Pair Have Good Day And Is Trading Above 0.67$, The EUR/USD Is Trading Above 1.0650

Kamila Szypuła Kamila Szypuła 27.12.2022 13:16
Data released by the US Bureau of Economic Analysis on Friday revealed that the Core Personal Consumption Expenditure (PCE) price index rose 0.2% m/m in November. The annual core PCE price index, the Fed's preferred measure of inflation, fell to 4.7% over the same period from 5% in October. Ahead of the Christmas break, Wall Street's major indices posted gains on Friday and failed to find demand for the US dollar. China has said it will lift quarantine requirements for incoming visitors, further easing three years of border controls to contain COVID-19. China's reopening, which also entails a resumption of Chinese tourist outbound trips, will boost the consumer and service sectors outside the country, particularly in nearby Southeast Asia. As a result, the dollar weakened significantly on Tuesday as most emerging Asian currencies strengthened and risk appetite. Currencies in New Zealand and Australia also rose. It is too early to tell how China's reopening will affect global economic activity, but there appears to have been a positive shift in risk sentiment after the three-day weekend. Attention will also focus on the US economic report, which will include the October housing price index and November data on the balance of trade in goods. Investors, however, are likely to ignore these numbers and focus on risk perception. USD/JPY The yen's strength didn't last long and I'm already seeing a slight increase in USD/JPY today. Today, USD/JPY is back to trading above 133. The pair is trading around 133.30. The weakness of the pair, however, does not excuse the recent mixed data from the US and Japan, let alone comments trying to challenge the political hawks at the Bank of Japan (BOJ). That said, Japan's unemployment rate fell to 3.5% in November from 3.6% previously expected, while the jobs/apprentices ratio again printed 1.35 in the month in question compared to 1.33 market forecasts. Moreover, retail trade growth fell to 2.6%YoY against 2.8% of market consensus and 4.4% previously revised upwards. EUR/USD In recent days, the currency pair has been trading in a short range between $1.0580 and $1.0650. Currently, it is trading slightly above this range, signaling an uptrend. EUR/USD has continued its move higher. The pair is taking advantage of US dollar weakness extensively as risk flows dominate further moves to reopen China. Taking advantage of the weakness of the US currency, the EUR/USD pair is up today and is trading around 1.0650, mostly just above that level. Today's high level so far has been 1.0671.   GBP/USD GBP/USD lost its bullish momentum after encountering resistance near 1.2100 early in the European session on Tuesday. GBP/USD drops towards 1.2050 on light trading as UK markets are closed for Christmas. The pair is downplaying the risk sentiment surrounding China that is weakening the US dollar. China announced earlier in the day that it would lift quarantine requirements for travelers from January 8 as part of its reopening efforts. Over the weekend, Chinese officials said they would stop publishing daily revisions to the number of confirmed coronavirus cases. It is worth noting that the valuation of the US dollar through risk perception should continue to drive the pair's actions. Today, the situation of the cable pair is downside with the current trade at 1.2036. AUD/USD The Aussie trades in a strong tone on Tuesday, supported by positive market sentiment. The pair is rising for the third day in a row, extending its rebound from 0.6650. It is currently trading at 0.6737. Source: investing.com,  finance.yahoo.com Data released by the US Bureau of Economic Analysis on Friday revealed that the Core Personal Consumption Expenditure (PCE) price index rose 0.2% m/m in November. The annual core PCE price index, the Fed's preferred measure of inflation, fell to 4.7% over the same period from 5% in October. Ahead of the Christmas break, Wall Street's major indices posted gains on Friday and failed to find demand for the US dollar. China has said it will lift quarantine requirements for incoming visitors, further easing three years of border controls to contain COVID-19. China's reopening, which also entails a resumption of Chinese tourist outbound trips, will boost the consumer and service sectors outside the country, particularly in nearby Southeast Asia. As a result, the dollar weakened significantly on Tuesday as most emerging Asian currencies strengthened and risk appetite. Currencies in New Zealand and Australia also rose. It is too early to tell how China's reopening will affect global economic activity, but there appears to have been a positive shift in risk sentiment after the three-day weekend. Attention will also focus on the US economic report, which will include the October housing price index and November data on the balance of trade in goods. Investors, however, are likely to ignore these numbers and focus on risk perception. USD/JPY The yen's strength didn't last long and I'm already seeing a slight increase in USD/JPY today. Today, USD/JPY is back to trading above 133. The pair is trading around 133.30. The weakness of the pair, however, does not excuse the recent mixed data from the US and Japan, let alone comments trying to challenge the political hawks at the Bank of Japan (BOJ). That said, Japan's unemployment rate fell to 3.5% in November from 3.6% previously expected, while the jobs/apprentices ratio again printed 1.35 in the month in question compared to 1.33 market forecasts. Moreover, retail trade growth fell to 2.6%YoY against 2.8% of market consensus and 4.4% previously revised upwards. EUR/USD In recent days, the currency pair has been trading in a short range between $1.0580 and $1.0650. Currently, it is trading slightly above this range, signaling an uptrend. EUR/USD has continued its move higher. The pair is taking advantage of US dollar weakness extensively as risk flows dominate further moves to reopen China. Taking advantage of the weakness of the US currency, the EUR/USD pair is up today and is trading around 1.0650, mostly just above that level. Today's high level so far has been 1.0671.   Read next:Shopping On Etsy Continues To Be Popular| FXMAG.COM GBP/USD GBP/USD lost its bullish momentum after encountering resistance near 1.2100 early in the European session on Tuesday. GBP/USD drops towards 1.2050 on light trading as UK markets are closed for Christmas. The pair is downplaying the risk sentiment surrounding China that is weakening the US dollar. China announced earlier in the day that it would lift quarantine requirements for travelers from January 8 as part of its reopening efforts. Over the weekend, Chinese officials said they would stop publishing daily revisions to the number of confirmed coronavirus cases. It is worth noting that the valuation of the US dollar through risk perception should continue to drive the pair's actions. Today, the situation of the cable pair is downside with the current trade at 1.2036. AUD/USD The Aussie trades in a strong tone on Tuesday, supported by positive market sentiment. The pair is rising for the third day in a row, extending its rebound from 0.6650. It is currently trading at 0.6737. Source: investing.com,  finance.yahoo.com
The USD/CHF Pair Returned To Its Previous Three-Day Recovery

The USD/CHF Pair Returned To Its Previous Three-Day Recovery

TeleTrade Comments TeleTrade Comments 27.12.2022 13:23
The US dollar accelerates its downtrend and reaches levels below 0.9300. Hopes of a slowdown in Fed tightening are hurting the USD. News that China is easing covid restrictions further has boosted market mood. The US Dollar resumed its near-term downtrend against the Swiss Franc on Tuesday, with the pair extending its pullback from last week’s highs at 0.9345 to levels below 0.9300. The pair drops about 0.5% so far today, retracing the previous three day’s recovery. Hopes of Fed easing are hurting the Dollar US macroeconomic figures released last Friday have boosted hopes of a slowdown on the Federal Reserve’s monetary tightening path in 2023, which has hurt demand for the Greenback. The US Core Personal Consumption Expenditures Price Index, a gauge closely observed by the Fed to assess inflationary trends, eased in November for the third consecutive month, suggesting that the price pressures might have started a deceleration trend. Furthermore, consumer spending remained practically unchanged from the previous months. These figures pave the way for the Federal Reserve to ease its tightening path. On the other hand, Chinese authorities have announced the end of COVID-19 restrictions for inbound travelers. The National Health Committee assured that from January 8, quarantines for visitors to China will be scrapped, which has boosted risk appetite in an otherwise quiet post-Christmas market, adding selling pressure to the safe-haven USD.
August CPI Forecast: Modest Inflation Increase Expected Amidst Varied Price Trends

At The Close On The New York Stock Exchange All Indices Fell

InstaForex Analysis InstaForex Analysis 28.12.2022 08:00
At the close on the New York Stock Exchange, the Dow Jones rose 0.11%, the S&P 500 index fell 0.41% and the NASDAQ Composite fell 1.38%.  Dow Jones The gainers among Dow Jones index components in today's trading were shares of Verizon Communications Inc. which gained 0.84p (2.19%) to close at 39.25. Caterpillar Inc. gained 3.27p (1.36%) to close at 243.14. Chevron Corp. gained 2.23 pct (1.26%) to close at 179.63. Shares of the Walt Disney Company were the least gainers, with their price dropping 1.64p (1.86%), ending the session at 86.37. Shares of Apple Inc soared 1.83p (1.39%) to close at 130.03, Goldman Sachs Group Inc dropped 3.54p (1.02%) and closed the session at 341.97.  S&P 500 index The top gainers among the S&P 500 index components in today's trading were shares of Wynn Resorts Limited, which gained 4.47% to 84.33, VF Corporation, which gained 4.18% to close at 27.16, and Las Vegas Sands Corp, which gained 4.17% to close the session at 48.46. Shares of Tesla Inc were the least gainers, down 11.41% to close at 109.10. Moderna Inc shares lost 9.50% and closed the session at 180.17. NVIDIA Corporation shares were down 7.14% to 141.21. NASDAQ  The top gainers among NASDAQ Composite index components in today's trading were shares of Elys Game Technology Corp, which gained 111.91% to 0.37, Lightjump Acquisition Corp, which gained 100.00% to close at 19.00, and shares of Quotient Ltd, which gained 94.74% to close the session at 0.37. The least gainers were shares of Tuesday Morning Corp, which fell 46.12% to close at 0.83. Shares of Mingzhu Logistics Holdings Ltd lost 44.57% and closed the session at 0.97. Lion Group Holding Ltd. was down 36.45 percent to 0.68. Numbers On NYSE the number of securities, which fell in price (1697) exceeded the number of securities, which closed on the plus side (1401). On NASDAQ, 2,517 stocks were down, 1,251 were up, and 139 remained flat. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 3.74% to 21.65. Gold Gold futures for February delivery added 0.98%, or 17.65, to $1.00 a troy ounce. In other commodities, WTI crude for February delivery rose 0.16%, or 0.13, to $79.69 a barrel. Futures for Brent crude for March delivery rose 0.43%, or 0.36, to $84.86 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair was unchanged 0.05% to 1.06, while USD/JPY was up 0.49% to hit 133.51. Futures on the USD index fell 0.12% to 103.89. Relevance up to 03:00 2022-12-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/306511
Hang Seng Index Plummets -2% Amid Weak China Data, Short-Term Trend Intact

The EUR/GBP Cross Currency Pair Is Moving In A Bullish Channel

InstaForex Analysis InstaForex Analysis 28.12.2022 08:04
If we pay attention to the EUR/GBP price movements on its 4 hour chart It is clear that this cross currency pair is moving in a bullish channel and above its moving average where in the near future EUR/GBP is trying to break above the 0.8866 level as its main target and 0.9065 as its second target but considering the volatility and the number of participations There are still few market participants during the Christmas and New Year holidays, so it is wise to pay attention to the level below the current price, namely 0.8794 because if this level is broken, there is a high probability that the Bull scenario described earlier will cancel itself. Relevance up to 05:00 2022-12-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/116509
The EUR/USD Pair Could Resume Its Larger Degree Downtrend

The EUR/USD Pair Could Resume Its Larger Degree Downtrend

Oscar Ton Oscar Ton 28.12.2022 08:11
Technical outlook: EUR/USD broke through 1.0670 intraday highs intraday on Tuesday before hitting resistance as projected. Bears came back strong thereafter, dragging prices through 1.0610-20 lows. The pair has recovered since then and is seen to be trading close to the 1.0645 mark at this point in writing. The near-term outlook remains unchanged with a bearish bias against the 1.0736 level. EUR/USD's counter-trend rally looks complete at the 1.0736 mark as prices hit close to projected targets around 1.0750-50. The three-wave rally, which had begun from 0.9535 earlier, has further met trend line resistance as seen on the daily chart here. Furthermore, prices have met the Fibonacci 0.382 retracement around 1.0600, of the entire drop between 1.2266 and 0.9535. EUR/USD could resume its larger degree downtrend against 1.0736 and drag further below 0.9535 in the next several weeks. On the flip side, prices could find support close to the 1.0000-100 zone and turn higher again. Either way, a high probability remains for a slip lower towards 1.0000 at least from current levels. Trading plan: Potential bearish turn against 1.0750 Good luck! Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306527
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The GBP/JPY Corss Pair Can Continue To Go Higher

Torben Melsted Torben Melsted 28.12.2022 08:18
GBP/JPY could have completed the first two waves of wave 5/ higher and if this is the case, then we should see GBP/JPY continue higher towards 178.40 in the coming weeks. That said, we have an alternative scenario with almost equal odds calling for more downside action to complete a complex correction in wave 4/. If this scenario proves to be correct then a decline below 155.93 with the possibility of a deep decline to 149 before starting to move higher will become possible. Therefore we recommend waiting for a break above minor resistance at 169.28 before engaging here as the risk of being caught on the wrong side of a trade is too large. Relevance up to 07:00 2022-12-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306537
Rates Spark: Action at Both Ends of the Curve - US 10yr Treasury Yield and European Rates

Higher Oil Prices Are Hurting The Indian Rupee (INR)

TeleTrade Comments TeleTrade Comments 28.12.2022 08:42
USD/INR is trading inside the woods but is expected to reach 83.00 sooner. A decline in overall economic activities in the US economy might trim inflation expectations further. Firmer oil prices are impacting the Indian Rupee, being one of the leading importers of oil. The USD/INR pair is oscillating in a rangebound territory below 83.00, following the footprints of the US Dollar Index (DXY). The asset is inside the woods from the past two trading sessions but is expected to recapture the critical resistance of 83.00 ahead. The US Dollar Index (DXY) is attempting to recapture the crucial hurdle of 104.00 as progressive steps from China for the reopening of the economy after a longer follow-up of no-tolerance Covid-19 policy failed to support risk-perceived currencies. S&P500 failed to make progress in the revival move recorded on Friday as faced selling pressure on Tuesday. The 10-year US Treasury yields have sensed marginal correction after reaching to near 3.85%, displaying a risk-off mood in the global market. Going forward, investors will keep eye on views from think tanks about the decline in the inflation-related indicators in the United States economy. The recent slowdown in demand for Durable Goods and consumption expenditure compelled think tanks to trim the longevity of hawkish monetary policy by the Federal Reserve (Fed). Economists at ING shared an opinion that the recession will accelerate inflation's slide and will allow the Fed to respond with rate cuts before CY2023 is out. Now, a decline in US International deficit led by a slowdown in overall economic activities is signaling the mounting side-effects of higher interest rates by the Fed. On the oil front, oil price is struggling to recapture the $80.00 hurdle but is still in a bullish trajectory. The deadly duo of solid oil prices and volatility in the global market are impacting the India Rupee. It is worth noting that India is one of the leading importers of oil and higher oil prices weaken Indian Rupee.
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

The Kiwi Pair (NZD/USD) Is Expected To Fall Further

TeleTrade Comments TeleTrade Comments 28.12.2022 08:48
NZD/USD holds lower ground near intraday bottom, extends pullback from 50-SMA. Failure to stay beyond 200-SMA, looming bear cross on MACD favor sellers. One-month-old ascending trend line restricts immediate downside. 61.8% Fibonacci retracement adds to the upside filters. NZD/USD prints mild losses around 0.6260 as it drops for the second consecutive day heading into Wednesday’s European session. In doing so, the Kiwi pair not only extends pullback from the 50-SMA but also marks one more downside move below the 200-SMA. The downside moves also take clues from the impending bear cross on the MACD indicator, as well as the lower high formation marked since December 13. That said, an upward-sloping support line from November 28, close to 0.6245, holds the key for the NZD/USD pair’s further downside. Also acting as the short-term key support is the monthly low near 0.6230, quickly followed by late November’s swing low surrounding 0.6290. Meanwhile, the 61.8% Fibonacci retracement level of the NZD/USD pair’s November 28 to December 13 upside, also known as the “Golden Ratio”, guards immediate recovery moves of the pair around 0.6290, in addition to the 200-SMA hurdle of 0.6283. During the quote’s run-up beyond 0.6290, the 0.6300 round figure and the 50-SMA resistance of 0.6311 could probe the NZD/USD bulls before giving them control. Even so, successful trading beyond the 50% Fibonacci retracement level surrounding 0.6335 appears necessary for the Kiwi pair buyers to keep the reins. NZD/USD: Four-hour chart Trend: Further downside expected  
The USD/CAD Pair Is Likely To Remain Sidelined

The USD/CAD Pair Is Likely To Remain Sidelined

TeleTrade Comments TeleTrade Comments 28.12.2022 08:55
USD/CAD grinds near intraday high after bouncing off three-week low. US Dollar rebound, easing optimism over China’s Covid updates weigh on Oil price. Holiday season, light calendar restricts immediate moves but firmer US Treasury yields keep USD/CAD buyers hopeful. USD/CAD prints mild gains around 1.3530 as bulls and bears jostle during the first positive day for the Loonie pair in three. The US Dollar rebound and the recent pullback in the Oil prices could be linked to the quote’s recovery. However, the holiday mood and a light calendar, not to forget fewer macros, keep the USD/CAD traders in check. US Dollar Index (DXY) struggles to defend recent gains around 104.25, fading the bounce off a one-week low, amid sluggish US Treasury bond yields. In doing so, the greenback’s gauge versus the six major currencies also justifies the recently mixed US data, as well as mixed concerns surrounding the Fed’s next moves. Even so, receding fears of the US recession and easing optimism surrounding China’s Covid conditions seem to keep the DXY bulls hopeful. Recently, a Researcher from the Federal Reserve Bank of San Francisco’s Economic Research Department ruled out odds favoring the US economic slowdown for at least the upcoming two quarters. That said, US Good Trade Balance for November improved to $-83.3B versus $98.8B prior but the US S&P/Case-Shiller Home Price Indices for October dropped to 8.6% YoY versus 9.7% expected and 10.4% previous readings. In the last week, mixed readings of the US inflation and growth figures raised doubts about the Federal Reserve’s (Fed) hawkish move, especially after the US central bank appeared cautiously optimistic in its latest monetary policy meeting. On a different page, China announced multiple measures to open national and international boundaries in a rush to convey the easing of COVID-19 fears. However, the US doubts the moves and probes the risk-on mood. The dragon nation initially ruled out the quarantine requirement for inbound travelers before stating that the nation will resume citizens' applications for ordinary passports for tourism and visits abroad from January 8, 2023. Even so, a US Official mentioned, per Reuters, that the US government may impose new COVID-19 measures on travelers to the United States from China over concerns about the "lack of transparent data" coming from Beijing. Against this backdrop, the US Treasury yields remain stable while the stock futures print mild gains and the WTI crude oil extends the previous day’s pullback from a three-week high, down 0.22% intraday near $79.60 at the latest. Given the market’s actions, as well as the light calendar and no major macros, the USD/CAD is likely to remain sidelined. It should be noted that the US Pending Home Sales for November which holds the market consensus of 0.6% versus -4.6% previous readings, will decorate the calendar. Technical analysis USD/CAD recovers from the 200-SMA, around 1.3500 by the press time, as the RSI (14) defends recovery from the oversold territory. Also supporting the Loonie pair’s rebound is the receding strength of the bearish MACD signals. As a result, the USD/CAD rebound is likely to approach the 1.3570 resistance confluence including the one-week-old descending resistance line, as well as the previous support line from November 15.
Bitcoin price may be stealing the show soon. We could say that this week Bank of Japan decision draws more attention than usually

The Bank Of Japan Must Maintain The Easy Policy As The Japanese Economy Is In A Critical Phase

TeleTrade Comments TeleTrade Comments 28.12.2022 08:56
USD/JPY has slipped marginally to near 134.00, however, the upside is still favored amid uncertainty in the market. Federal Reserve might look for returning to policy easing led by the recent decline in retail demand and economic activities. The expression of loose monetary policy continuation in the Bank of Japan’s summary of opinions has weakened the Japanese Yen. USD/JPY may display more upside after a Rising Channel breakout and bullish signs from the momentum oscillator. USD/JPY pair has sensed long liquidations after a vertical rally around 134.40 in the early European session. The asset has corrected marginally to near 134.10, however, the corrective move seems healthy for the major as the market sentiment is still risk-averse. The Japanese yen pair is expected to resume its upside journey for recapturing the critical resistance of 135.00 ahead. Meanwhile, S&P500 futures are displaying a subdued performance as the market participants are getting anxious amid the festive mood. The 500 United States stock basket witnessed selling pressure on Tuesday led by weakness in technology stocks and a decline in International Trade Deficit. The return on 10-year US Treasury bonds has trimmed below 3.85% but is still showing promising signs of recovery ahead. The US Dollar Index (DXY) is struggling to surpass the crucial resistance of 104.00, however, the upside is still favored amid uncertainty in the global market towards the rapid reopening approach of the Chinese administration. Federal Reserve might return to policy easing sooner Recent decline in the United States Durable Goods Orders and Personal Consumption Expenditure (PCE) Price Index have delivered an expression of a slowdown in inflation expectations further. A sheer decline in the demand for durable goods, and consumption expenditure by households are critical for a decline in inflationary pressures. And now, a decline in Tuesday’s International Deficit as firms are restricting themselves from expanding operations due to higher interest obligations is going to compel the Federal Reserve to return to policy easing context sooner. On Tuesday, the US Census Bureau reported that Exports of goods for November were $168.9 billion, $5.3 billion less than October exports while Imports of goods for November were $252.2 billion, $20.8 billion less than October imports. This indicates a decline in overall economic activities, which might result in lower employment opportunities in the CY2023. United States economy is far from recession Market participants have been debating over the United States economy getting into recession and a higher Unemployment Rate to achieve price stability. As the Federal Reserve is hiking interest rates dramatically, economists have been compelled to trim Gross Domestic Product (GDP) projections and firms get restricted from executing of expansion plans. Thomas M. Mertens, a Researcher from the Federal Reserve (Fed) Bank of San Francisco’s Economic Research Department came out with a recession predictor based on macroeconomic time series, particularly the jobless unemployment rate. He cited that no predictors indicate an upcoming recession over the next two quarters currently. And, the jobless rate does not currently signal an impending recession. Bank of Japan’s Summary of Opinions favors easy monetary policy ahead In the Summary of Opinions by the Bank of Japan, the central bank cleared that widening of the yield band was meant to address distortion in 10-year Japanese Government Bonds (JGBs) pricing but this is not a step toward an exit from ultra-easy policy, as reported by Reuters. The expression from the Bank of Japan’s summary of opinions indicates that the central bank must maintain the easy policy as the Japanese economy is in a critical phase in hitting the price goal. No doubt, the economy is showing signs of wage rises, and a positive economic cycle but it is appropriate to maintain an easy policy for time being. USD/JPY technical outlook USD/JPY is on the verge of kissing the horizontal resistance plotted from the December 14 low around 134.52. The US Dollar is extremely strong as the asset has delivered a breakout of the Rising Channel chart pattern formed on an hourly scale. The pair has scrolled above the 200-period Exponential Moving Average (EMA) at 133.88, which indicates that the long-term trend has turned bullish. Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which signals that the upside momentum has been triggered.     search   g_translate    
Analysis Of The AUD/USD Commodity Currency Pair's Price

Expected Limited Growth Of The Australian Pair (AUD/USD)

TeleTrade Comments TeleTrade Comments 28.12.2022 09:08
AUD/USD picks up bids to refresh intraday high after confirming a bullish moving average crossover. Two-week-long downward-sloping resistance line challenges short-term upside moves. MACD signals suggest further upside, rising trend line from December 16 adds to the upside filters. AUD/USD renews intraday high around 0.6755 while reversing the previous day’s pullback from the two-week top amid the initial European session on Wednesday. In doing so, the Aussie pair justifies the bullish moving average crossover amid sluggish days of trading due to the year-end holiday mood in the West. That said, the 50-HMA pierced the 200-HMA from below and portrayed the “Golden Cross” the previous day. The MACD also justifies the bullish signals from the Hourly Moving Averages (HMAs). As a result, the quote is up for challenging a two-week-old resistance line near 0.6765. However, another trend line resistance from December 16, close to 0.6780, adds filters to the AUD/USD upside. In a case where the Aussie pair remains firmer past 0.6780, the 0.6800 round figure and 0.6820 hurdle may probe the bulls before directing them towards the monthly high near 0.6895. On the flip side, the 50-HMA level near 0.6730 restricts short-term AUD/USD downside ahead of the 200-HMA support, close to 0.6715 at the latest. Following that, an ascending trend line from the last Tuesday, near 0.6680 by the press time, could act as the last defense of the AUD/USD bulls, a break of which could quickly drag the quote towards the monthly low surrounding 0.6630. AUD/USD: Hourly chart Trend: Limited upside expected
Bank of England raised the interest rate, UK unemployment data go out tomorrow

The EUR/USD Pair Rose Because Demand For The US Dollar Fell

Jakub Novak Jakub Novak 28.12.2022 09:14
Analysis of transactions in the EUR / USD pair The first test of 1.0655 occurred at the time when the MACD line was quite far from zero, so the upside potential was limited. Sometime later, a second test took place, but this time the MACD line had just begun to move above zero, which was a good reason to buy. This led to a price increase of around 13 pips. The pair fell after the slight upward movement and headed towards 1.0628. Although trading volume was quite low in the past days, EUR/USD rose because demand for dollar fell after reports revealed that the foreign trade balance and inventories in wholesale warehouses in the US rose slightly. And since there are no statistics due out in the Euro area today, markets will focus on the upcoming pending home sales in the US. However, the data will not have much impact on the pair as the problems in the real estate market signal a recession, limiting the upside potential of dollar. This could lead to a further rise in EUR/USD. For long positions: Buy euro when the quote reaches 1.0665 (green line on the chart) and take profit at the price of 1.0695. Although there is a chance for growth today, it is unlikely to be last long. Also, buy only when the MACD line is above zero or starting to rise from it. Euro can also be bought at 1.0634, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0665 and 1.0695. For short positions: Sell euro when the quote reaches 1.0634 (red line on the chart) and take profit at the price of 1.0597. Pressure will return if the attempts to consolidate at weekly highs fail. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0665, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0634 and 1.0597. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 07:00 2022-12-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330957
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

Pending Home Sales Report Will Not Have Much Impact On The GBP/USD Pair

Jakub Novak Jakub Novak 28.12.2022 09:18
Analysis of transactions in the GBP / USD pair The pair tested 1.2100 at the time when the MACD line was just starting to move above zero, which seemed like a good signal to buy. However, the upward movement never took place, resulting in losses. The same thing occurred in the afternoon, when the pair tested 1.2061. At first, it happened when the MACD was far from zero, so the downside potential was limited. But on its second test, the MACD line was in the oversold area, so trading positions ended in losses again. It was only at the end of the day that everything was compensated, when traders bought the rebound from 1.2007. Once again, there are no statistics due out in the UK, so pressure could return in GBP/USD at any moment. However, quotes are already around December lows so there is little chance that traders will dare sell at the end of the year. And although the US is publishing its data on pending home sales today, it will not have much impact on the pair as the problems in the real estate market signal a recession, limiting the upside potential of dollar. This could even lead to a rise in GBP/USD. For long positions: Buy pound when the quote reaches 1.2061 (green line on the chart) and take profit at the price of 1.2116 (thicker green line on the chart). Growth will occur if the yearly lows are not broken. But take note that when buying, the MACD line should be above zero or is starting to rise from it. Pound can also be bought at 1.2022, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.2061 and 1.2116. For short positions: Sell pound when the quote reaches 1.2022 (red line on the chart) and take profit at the price of 1.1965. Pressure will return if there is no bullish activity above 1.2060. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.2061, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.2022 and 1.1965. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.     search   g_translate       Relevance up to 07:00 2022-12-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330959
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

The Euro To US Dollar Pair Is Currently Trading More Sensibly

Paolo Greco Paolo Greco 28.12.2022 09:26
Although this fact is simple to understand, the EUR/USD currency pair was already trading with more volatility on Tuesday than it did on Monday. The reality is that the volatility on Monday was exceptionally low - only about 20 points. This value was a result of the day's actual output status. The flat was still preserved even though the indicator had already risen to average values by Tuesday, as is very clear from the above illustration. If the pair is moving in a side channel, how much volatility does it matter? As a result, there has been no change in the technical situation over the past day. However, we did issue a warning that we could observe a flat up until December 31. The pair has fallen by about 100 points from its recent highs, but there are no signs of a correction at the moment. Remember that the British pound has been actively adjusting over the past two weeks, so the fact that the pound is falling while the euro is not surprising us more than the fact that New Year's Eve will be flat. This is not crucial at this time, though. Since there aren't any significant events scheduled for this week, traders are vacating the market. As a result, the euro/dollar pair is currently trading more sensibly. Since there is no way to plan these movements on the 4-hour TF, we can only wait for the flat to be finished. You could try trading only on the newest TF, but even then it would be very difficult and dangerous. After the New Year, the dollar's demand might start to increase. We think that the pair will eventually fall. Over the past few months, the value of the US dollar has dropped too far and too quickly. As we previously stated, market expectations for a slowdown in the Fed's monetary policy's tightening pace can be viewed as the primary cause of its decline. The dollar started to decline when these rumors first surfaced. But as we all know, the ECB also lowered the growth rate in December. Thus, it appears that the dollar's decline was unjustified and illogical. However, we have repeatedly called traders' attention to the absurdity of the euro and pound price increases. Even purely theoretical explanations weren't always available for this. Even when it was on the dollar's side, the macroeconomic and fundamental context was frequently interpreted in favor of the euro. And this is the first justification for why the US dollar should start to appreciate. China is the second explanation. No matter what anyone says, we think the Chinese epidemic will have an impact on the country's economy. Despite Beijing's denial, there are multimillion-dollar diseases, overcrowded morgues, and overcrowded hospitals. If several hundred million people contract the disease, it will inevitably have an impact on demand, retail sales, production levels, and GDP. People simply refuse to report to work out of fear of contracting an infection or because they are already sick from one. It is even harder to imagine how all macroeconomic indicators will collapse if we are talking about 300 million people. The Angolan economy is not the same as the Chinese economy, though. China accounts for more than one-third of global industrial production. As a result, many businesses will encounter a shortage of particular products, parts, or raw materials. 2020 will be reenacted, when the economy was rapidly contracting even without "lockdowns." As a result, if everything that news organizations are reporting about what is happening in China is accurate, a new financial crisis is imminent. And this is happening at a time when the Central Bank is actively raising rates to counteract the negative effects of the monetary stimulus that was required following the previous "coronavirus" pandemic. The world could once again be engulfed in an epidemic if COVID spreads outside of China, which is very likely given that Beijing recently removed all quarantine restrictions on entry and exit from the country. And it makes no difference that we now have the necessary medications and vaccines. They still only help the disease progress; they still do not offer protection against infection. As of December 28, the euro/dollar currency pair's average volatility over the previous five trading days was 50 points, which is considered to be "low." So, on Wednesday, we anticipate the pair to fluctuate between 1.0594 and 1.0694 levels. The Heiken Ashi indicator's reversals are now completely irrelevant because the pair is flat. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trading Suggestions: Although the EUR/USD pair continues to move higher, we have been seeing a flat price for more than a week. Trading can only be done on the lower TF inside the side channel because the 4-hour TF hardly ever moves. Explanations for the examples: Channels for linear regression help identify the current trend. The trend is currently strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.     Relevance up to 05:00 2022-12-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330931
The Pound Is Now Openly Enjoying A Favorable Moment

Analysis Of Cable Market's Movement (GBP/USD)

InstaForex Analysis InstaForex Analysis 28.12.2022 10:14
Yesterday's selling pressure ended the bullish correction in GBP/USD. Since buyers' stop orders are under the round level of 1.2 and quotes are currently at the 50% retracement level, continuing the price decrease is much easier. Now, there is a three-wave pattern "ABC", where wave A represents the selling pressure yesterday. This means that traders could enter the market by selling up to the 50% retracement level, with stop loss at 1.21 or at a false breakdown of 1.20467. Exit the market upon the breakdown of 1.20. This trading idea is based on the Price Action and Stop Hunt methods. Good luck in trading and have a nice day! Don't forget to control the risks.     Relevance up to 09:00 2022-12-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330973
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

There Are Many Indications That In Spring In Japan, Large Companies And Trade Unions Will Negotiate Higher Wages

Kenny Fisher Kenny Fisher 28.12.2022 11:57
The Japanese yen continues to lose ground this week and is in negative territory on Wednesday. In the European session, USD/JPY is trading at 134.11, up 0.49%. Post-Christmas holiday trading remains thin, but USD/JPY has made steady gains and climbed 1% this week. The US dollar has recovered somewhat after last Tuesday’s slide when it fell a staggering 3.8% after the BoJ widened its yield curve band. The move blindsided the markets, which had not expected any major policy moves prior to the end of Governor Kuroda’s term in April. Summary of Opinions – no exit from loose policy Investors were all ears as the BoJ released today the summary of opinions from last week’s dramatic meeting. The summary of opinions showed that several of the nine board members said that the tweak to yield control was aimed at enhancing the current stimulus programme rather than ending it. This reiterated what Governor Kuroda stated in a press conference after the meeting. Still, speculation remains high that the BoJ could take further steps that tighten policy, and even exit the Bank’s ultra-loose policy, especially with inflation running at a 40-year high. The summary of opinions indicated that members discussed rising inflation and the possibility that higher wages would remove the risk of a return to deflation. The BoJ has been focused on wages, arguing that strong wage growth will ensure that inflation is sustainable, as opposed to inflation that is driven by higher costs for energy and raw materials. The government is also making wages a top priority, and there are indications that major companies and labour unions will negotiate higher wages in the spring. If the BoJ sees that wages are rising it could raise its yield curve control target, which is currently around 0% for 10-year bonds. The BoJ will likely be back in the headlines shortly, with its next meeting on Jan. 17th and 18th. Read next: Leading Used Tesla Prices Fall Faster Than The Market| FXMAG.COM USD/JPY Technical  USD/JPY is testing resistance at 134.12. Above, there is resistance at 134.82 There is support at 133.25 and 132.29 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

The Optimism Around China Easing Of Covid Protocols Has Cool Down, The Aussie Pair Is Trading Near 0.68

Kamila Szypuła Kamila Szypuła 28.12.2022 13:54
Data on the US housing market will be in the spotlight, and with the housing recession dominating recent headlines, these indicators will provide important information on the health of the US housing market. What's more, the optimism around China and the easing of Covid protocols has dimmed a bit since yesterday after rumors that the US may impose new restrictions on travelers from China. This is because US officials are concerned about the lack of "transparent" data coming from Beijing. USD/JPY The dollar gained against the yen by as much as 0.67% to 134.40 In the morning of the Asian session, the USD/JPY pair rose above the 134 level. This level did not last long and the pair returned to trading at 133. In Asian trade, the highest since December 20, when the BOJ caused the pair to fall sharply as a result of an unexpected loosening of the yield band on 10-year Japanese government bonds. On that day, the yen posted its biggest one-day gain against the dollar in 24 years, closing 3.8% higher on the day as traders speculated on an eventual withdrawal of the stimulus. Now, the yen has also come under pressure after the Bank of Japan signaled last week's surprise policy change did not mark the beginning of a broader withdrawal of monetary stimulus. BJ Governor Haruhiko Kuroda said that "The Bank will pursue the target price in a sustainable and stable manner, accompanied by wage increases, by further easing monetary policy under the control of the yield curve." Meanwhile, Kuroda expressed hope that ongoing labor shortages would encourage companies to raise wages, and said conditions in the Japanese labor market were expected to tighten further. GBP/USD The situation on the cable market has improved. The pair in today's trading was on the rise. Currently, the pair is approaching the level of 1.21. EUR/USD EUR/USD is trading above 1.0630 today. It is currently maintaining its high level above 1.0650. Maintaining support for EUR/USD has recently been more hawkish rhetoric from the European Central Bank (ECB) compared to the US Federal Reserve (FED). ECB policymaker Klaas Knot reiterated this in an interview yesterday, stating that between now and July 2023 it would provide “a pretty decent rate of tightening. Fudge warned that doing too little remains a greater risk with a slowdown to 50 basis points, giving the central bank time to assess the impact of rate hikes. In the rare positive nexus that has been talked about, the worst may already be behind the Eurozone, and the potential recession, if it does occur, will be relatively shallow and short-lived. AUD/USD The Aussie pair is in an uptrend on the daily chart. AUD/USD is trading close to 0.68. The gains were short-lived and the Australian currency is now facing resistance. Australian and New Zealand dollars fluctuated on Wednesday as initial optimism from China, which reopened its borders after three years, gave way to greater volatility over global growth prospects. Australian government bond yields rose as markets reopened after Christmas, catching up with their overseas counterparts. Source: finance.yahoo.com, investing.com, dailyfx.com
Analysis Of The Euro To US Dollar Pair Situation - 30.01.2023

Now The EUR/USD Pair Has Found Strong Support At 1.0630

Ralph Shedler Ralph Shedler 28.12.2022 14:00
The EUR/USD pair is trading in the green at 1.0643 at the time of writing. The price dropped a little in the short term and it has reached a strong demand zone. Still, larger growth is far from being confirmed. The United States reported mixed data in the last trading session. The Goods Trade Balance, HPI, and the S&P/CS Composite-20 HPI exceeded expectations, while Prelim Wholesale Inventories reported poor data. The US Pending Home Sales could move the EUR/USD later today. The economic indicator could remain in the negative territory, it could report a 0.9% drop. In addition, the Richmond Manufacturing Index will be published as well. EUR/USD Accumulates More Bullish Energy! Technically, the EUR/USD pair dropped after failing to stabilize above the 1.0662 key resistance and now it has found strong support at 1.0630. I've told you in my previous analysis that the currency pair could only test and retest this level before coming back higher. The next upside target is represented by the weekly R1 (1.0660). The level of 1.0660 remains a major resistance. EUR/USD Forecast! A valid breakout above 1.0662 and a touch of a new higher high may activate a further upside movement and could be seen as a buying opportunity. Relevance up to 12:00 2022-12-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306587
Serious liquidity crisis? According to Franklin Templeton, a massive, but unlikely deposit flight from Credit Suisse would have to happen

The Swiss National Bank (SNB) Has Shown That It Is Not Shy About Intervening In The Currency Markets

Kenny Fisher Kenny Fisher 28.12.2022 14:08
Market activity is subdued on Wednesday in thin post-holiday trade. In the European session, USD/CHF is almost trading at 0.9280, down 0.14%. Over the final two months of the year, the Swiss franc has looked sharp against the US dollar. USD/CHF tumbled 5.6% in November and is down another 1.6% in December. The pair fell as low as 0.9215 on December 14th, its lowest level since April. The Swiss National Bank (SNB) is keeping a close eye on the appreciation of the Swiss franc, as this makes Swiss exports more expensive. The SNB has shown that it is not shy about intervening in the currency markets if it believes that the Swissie exchange rate is too high. The SNB has joined the global tightening party in 2022, raising interest rates into positive territory after years of sub-zero rates. The SNB delivered an oversize rate of 0.50% earlier this month, bringing the cash rate to 1.00%. The central bank had an accommodative monetary policy in place for years in order to combat deflation. In the new era of rising inflation, the SNB has switched gears, with 175 basis points of tightening this year. Switzerland’s inflation rate of 3% is much lower than in the eurozone, but this is above the SNB’s target of 0-2%. At the December meeting, the SNB said it would not rule out further tightening, which will largely depend on inflation forecasts. If inflation does not ease, there is a strong likelihood of another rate hike in March. ZEW Economic Expectations climbs It’s a very light calendar this week in Switzerland, with just two events. Earlier today, ZEW Economic Expectations showed a strong improvement with a reading of -42.8 in December, up from -57.5 in November and above the consensus of -50.5 points. This is a step in the right direction, but the latest reading was the 10th straight in negative territory. On Friday, we’ll get a look at the KOF Economic Barometer, which has been on a downturn. The consensus stands at 86.9 for December, following 89.5 in November.  Read next: The Optimism Around China Easing Of Covid Protocols Has Cool Down, The Aussie Pair Is Trading Near 0.68| FXMAG.COM USD/CHF Technical USD/CHF is putting pressure on support at 0.9256. Below, there is support at 0.9159 There is resistance at 0.9377 and 0.9498 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Source: https://www.marketpulse.com/20221228/swiss-franc-showing-strength/    
At The Close On The New York Stock Exchange Indices Closed Mixed

On The New York Stock Exchange, The Number Of Securities That Fell Was Much Higher Than Those That Rose

InstaForex Analysis InstaForex Analysis 29.12.2022 08:00
At the close of the New York Stock Exchange, the Dow Jones was down 1.10%, the S&P 500 was down 1.20% and the NASDAQ Composite was down 1.35%. Dow Jones JPMorgan Chase & Co was the top gainer among the components of the Dow Jones in today's trading, up 0.72 points (0.55%) to close at 132.46. Quotes of Goldman Sachs Group Inc fell by 1.10 points (0.32%) to close at 340.87. Johnson & Johnson shed 0.77 points or 0.43% to close at 176.66. Shares of Apple Inc were the least gainers, the price of which fell by 3.99 points (3.07%), ending the session at 126.04. The Walt Disney Company was up 2.55% or 2.20 points to close at 84.17, while Dow Inc was down 2.34% or 1.20 points to close at 49. 99.  S&P 500 Leading gainers among the S&P 500 index components in today's trading were Generac Holdings Inc, which rose 5.61% to 96.26, Tesla Inc, which gained 3.31% to close at 112.71, and shares of Illumina Inc, which rose 1.08% to end the session at 190.81. The least gainers were SolarEdge Technologies Inc, which shed 5.87% to close at 275.84. Shares of APA Corporation shed 5.16% to end the session at 45.18. Quotes of Southwest Airlines Company decreased in price by 5.16% to 32.19. NASDAQ The leading gainers among the components of the NASDAQ Composite in today's trading were Kala Pharmaceuticals Inc, which rose 218.37% to hit 12.48, Minerva Surgical Inc, which gained 66.15% to close at 0.27, and also shares of Transcode Therapeutics Inc, which rose 51.82% to end the session at 0.61. The least gainers were Minerva Neurosciences Inc, which shed 39.15% to close at 1.43. Shares of Model Performance Acquisition Corp lost 35.54% to end the session at 8.78. Quotes Lightjump Acquisition Corp fell in price by 37.11% to 11.95. Numbers On the New York Stock Exchange, the number of securities that fell in price (2407) exceeded the number of those that closed in positive territory (717), while quotes of 69 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,412 companies fell in price, 1,348 rose, and 156 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 2.26% to 22.14. Gold Gold futures for February delivery lost 0.59%, or 10.70, to hit $1.00 a troy ounce. In other commodities, WTI crude for February delivery fell 1.08%, or 0.86, to $78.67 a barrel. Futures for Brent crude for March delivery fell 1.20%, or 1.02, to $83.66 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged at 0.24% to 1.06, while USD/JPY edged up 0.72% to hit 134.45. Futures on the USD index rose 0.34% to 104.24.     Relevance up to 03:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/306666
The EUR/USD Pair Has Key Support Is Near At The Price of 1.5075

The Probability Of The EUR/USD Trend Reversal Towards Fresh Lows Remains High

Oscar Ton Oscar Ton 29.12.2022 08:14
Technical outlook: EUR/SD raised through the 1.0674 highs intraday on Wednesday, just shy by a few pips from our projection at the 1.0680 mark, before finding resistance. The currency reversed sharply thereafter slipping to the 1.0606 lows carving a shooting star candlestick pattern on the daily chart. It is seen to be trading close to the 1.0620 mark at this point in writing, as bears prepare to be back in control. EUR/USD might have completed its lower degree pullback at the 1.0674 mark and is now looking ready to drag lower towards 1.0350 at least. Potential remains for bears to resume the larger degree downtrend and drag prices below the 0.9535 mark. A slip below the 1.0570 interim support will accelerate lower towards 1.0350 and further. EUR/USD further reversed from its trend line resistance and the Fibonacci 0.382 retracement around 1.0736. Hence probability remains high for a trend reversal towards fresh lows below 0.9535. Alternatively, prices could drop towards 1.0000-50 before finding support and resming its rally. Either way, prices are looking lower in the near term. Trading plan: Potential bearish turn against 1.0750 Good luck!     Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306675
EUR: German IFO Data and Central Bank Hawkishness Impact Euro/USD Range Trade

The US Dollar Index Seems To Have Completed Its Larger Degree Corrective Drop

Oscar Ton Oscar Ton 29.12.2022 08:15
Technical outlook: The US dollar index dropped through the 103.50 lows again intraday on Wednesday before finding support. The index produced a rally towards 104.20 thereafter, as bulls came back strong in control. It is seen to be trading close to the 104.05 levels at this point in writing as bulls prepare for the next near-term target around 105.50 and 107.00 respectively. The US dollar index has been consolidating within a contracting triangle since printing lows around the 103.00 mark as seen on the 4H chart. Prices did manage to rally through the 104.40 levels before drifting sideways and it looks like the last wave could terminate ahead of the 103.50 mark. Once complete, prices could produce a bullish breakout and a push through 104.50 will be confirmed. The US dollar index seems to have completed its larger degree corrective drop, which began from the 114.70 levels, around 103.00 mark recently. If the above holds well, prices will stay above 103.00 and continue pushing higher towards 114.70 and beyond. Alternatively, prices could find resistance at 110.00-50 range before reversing lower again. Trading plan: Potential rally against 102.00 Good luck!   Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306677
The EUR/USD Pair Is Still In A High Position On The 1H Chart

The EUR/USD Pair Is Still In A High Position On The 1H Chart

Paolo Greco Paolo Greco 29.12.2022 08:18
M5 chart of EUR/USD EUR/USD was still trading within the 1.0581-1.0658 horizontal channel. There was one more attempt to cross the upper limit of this channel, but in the end it was followed by a rebound and the pair retained the flat. Just like the previous days, there were no important fundamental or macroeconomic events in the EU and the US. So there was nothing to react to and I'm not surprised that there is a flat. I mentioned before that all we have to do now is to wait for the pair to leave this channel or trade on the lower time frames for a bounce from its limits. But those bounces are not always accurate either. I would like to remind you once again that it is not the best time to trade when facing a flat. All of yesterday's trading signals were near 1.0658 and the critical line. Since the price managed to settle above the level by 9 pips, I added another level to this area so that the signals were clearer - 1.0669. The first two signals to sell proved to be false, in the first case, the pair went down 15 pips, so the trade closed at Stop Loss Breakeven. In the second case, the pair closed above 1.0658 so the trade closed with a small loss. All subsequent signals in this area should not be used. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, non-commercial traders opened 12,700 long positions, whereas the number of short positions fell by 4,800. Thus, the net positions rose by 7,900. The number of long positions is 143,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? From our point of view, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to adjust. The overall number of short orders exceeds the number of long orders by 43,000 (684,000 vs. 641,000). H1 chart of EUR/USD EUR/USD is still in a high position on the one-hour chart, and is still in a total flat. Lines of the Ichimoku indicator have already merged with each other and have lost meaning so I fixed their last position and didn't change it. As you can see, they are being worked out accurately enough. We should go for the 1.0581-1.0669 horizontal channel. If EUR manages to go beyond it, then we can count on some trend movement. Or you should continue to trade on a rebound from these levels. On Thursday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, as well as Senkou Span B (1.0589) and Kijun Sen (1.0656). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are still no important events scheduled for December 29 in the EU and the US. I don't expect the flat to end today. Volatility will probably remain low. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate     Relevance up to 05:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331043
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The GBP/USD Pair Maintains The Bearish Sentiment

Paolo Greco Paolo Greco 29.12.2022 08:22
M5 chart of GBP/USD GBP/USD was quite active on Wednesday (volatility was at least 100 pips), but it spent the last few days between 1.2007 and 1.2106. Thus, it is safe to say that sterling ended up in the horizontal channel as well. Basically, this is not surprising, since today is December 29. The pound has already pleased us in the last days of the year with its relatively good trend movement. Now it has gone to a well-deserved rest. There was no macroeconomic and fundamental background on Wednesday and the situation will not change before the end of the week. I expect the pair to fall next month but now the flat may persist for some time. Despite the fact that the pair was in the 100-point horizontal channel, trading signals continue to form quite well. And not all of them are false. The first buy signal was formed last night, but at the opening of the European trading session, the pair was not too far from the point of formation, so a long position could be opened. The price eventually crossed the critical line and the 1.2106 mark. It was necessary to close the long positions after the price settled below 1.2106. This will enable you to earn 60 pips. You should open a short position when the pair settles below 1.2106. The pair started falling almost rapidly and by the end of the day it was near 1.2007, but there were no other signals. Therefore, you should have manually closed the position, which has brought about 50 pips more. Thus, despite the flat, traders managed to make at least 100 pips according to our recommendations. COT report The latest COT report showed a decrease in bearish sentiment. During the given period, non-commercial traders opened 3,200 long positions and closed as many as 16,800 short positions. Thus, the net position grew by about 20,000, which is a lot for the pound. This figure has been on the rise for several months. Nevertheless, sentiment remains bearish, and GBP/USD is on the rise for no reason. I assume that the pair may well resume the downtrend soon since there is a need for at least a correction. Notably, both GBP/USD and EUR/USD now show practically identical movement. Since the net position is not even bullish yet, buying may continue for a few months to come. Non-commercial traders now hold 40,800,000 short positions and 35,200 long ones. The gap between them is small. I am still skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD maintains the bearish sentiment but also found itself in a horizontal channel. If this movement persists, the lines of the Ichimoku indicator may lose their strength in a short time, and we'll have to fix their last acceptable price value, because the pair can cross them 5 times a day in a flat. On Thursday, the pair may trade at the following levels: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259. Senkou Span B (1.2218) and Kijun Sen (1.2061) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. There are no important events in the UK and the US, so there will be nothing to react to for today. I believe that the flat may last till the end of the year, or even longer. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate     Relevance up to 05:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331045
The Japan Central Bank’s Decision Sent The Yen (JPY) Sliding

Analysis Of USD/JPY Pair: USD/JPY Pair Could Come Back Higher

Ralph Shedler Ralph Shedler 29.12.2022 08:34
USD/JPY Uptrend Intact USD/JPY dropped a little but it could still resume its uptrend as long as it stays above the uptrend line. Technically, the uptrend line represents a downside obstacle. The 134.52 former high stands as an upside obstacle (resistance), while the 133.49 former low represents a static downside obstacle (support). The current retreat could be only a temporary one before resuming its growth. The rate could test and retest the near-term downside obstacles before jumping higher. USD/JPY Trading Conclusion As long as it stays above 133.49 and above the uptrend line, USD/JPY could come back higher at least towards the 134.52 former high. An upside continuation could be activated if the price passes above 134.52. Relevance up to 07:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306697
Bank of Canada keeps the rates unchanged. After the release of the US inflation, Fed's Barkin drew attention to cooling demand, but still strong labour market and inflation

The USD/CAD Pair Is Expected To Drop Again

Torben Melsted Torben Melsted 29.12.2022 08:35
USD/CAD Strong Rebound! The USD/CAD pair failed to stay below the 1.3504 historical level or to stabilize below the 1.3495 Tuesday's low signaling exhausted sellers. After dropping below the uptrend line, the price action signaled that the uptrend ended and that the sellers could take the lead. Now, it has turned to the upside trying to retest the broken uptrend line which represents an upside obstacle (downside obstacle turned into an upside obstacle). It climbed as much as 1.3613 yesterday and now it has dropped again below the uptrend line. As long as it stays below yesterday's high and under the uptrend line, USD/CAD could drop again. USD/CAD Trading Conclusion! The uptrend line and the 1.3613 represent upside obstacles. USD/CAD could drop again as long as it's located below these levels. Still, only dropping below the 1.3495 former low validates a deeper drop. Jumping above the uptrend line and above 1.3613 indicates further growth.   Relevance up to 07:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306699
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

The EUR/JPY Pair Is Likely To Approach The Uptrend Line

Ralph Shedler Ralph Shedler 29.12.2022 08:39
EUR/JPY Temporary Retreat The EUR/JPY dropped a little in the short term after reaching the 142.87 level. It is likely to approach the uptrend line which represents a downside obstacle. As long as it stays above it, the price could jump higher. Yesterday's high of 142.87 acts an upside obstacle. It declined after reaching this level. On the other hand, the 141.72 former low stands as a downside obstacle as well. So, only dipping below it activates a new downside movement and invalidated an upside continuation. EUR/JPY Trading Conclusion Testing and retesting the uptrend line, staying above this obstacle may indicate a new upwards movement at least towards the former high of 142.87. Relevance up to 07:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306701
The Outlook Of EUR/USD Pair For Long And Short Position

Very Weak Pending Home Sales Data Helps The EUR/USD Pair To Rise

Jakub Novak Jakub Novak 29.12.2022 08:46
Analysis of transactions in the EUR / USD pair The first test of 1.0634 occurred at a time when the MACD line was quite far from zero, so the downside potential was limited. Sometime later, a second test took place, but this time the market signal was to buy, which resulted in a price increase of around 20 pips. 1.0665 was tested in the afternoon. EUR/USD rose slightly on Wednesday after the US reported very weak data on pending home sales. However, the situation leveled off quickly as ahead are reports on the Euro area's M3 money supply and private sector lending, which are likely to put a lot of pressure on euro. Then, this afternoon, the US will release its weekly data on jobless claims. For long positions: Buy euro when the quote reaches 1.0634 (green line on the chart) and take profit at the price of 1.0668. Although there is a chance for growth today, it is unlikely to last long. Also, buy only when the MACD line is above zero or starting to rise from it. Euro can also be bought at 1.0606, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0634 and 1.0668. For short positions: Sell euro when the quote reaches 1.0606 (red line on the chart) and take profit at the price of 1.0573. Pressure will return if reports from the Euro area turn out to be weaker than expected. Failed consolidation at 1.0606 will also lead to a decline. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0634, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0606 and 1.0573. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 07:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331075
The Data May Keep The British Pound (GBP) From Rising

Bears Are Very Active In The Cable Market (GBP/USD)

Jakub Novak Jakub Novak 29.12.2022 08:49
Analysis of transactions in the GBP / USD pair The pair tested 1.2022 at the time when the MACD line was just starting to move below zero, which seemed like a good signal to sell. However, the downward movement never took place, resulting in losses. A similar scenario occurred in the afternoon, when the pair tested 1.2061. It was only when the quote hit 1.2116 that the pair began to decline, falling by over 90 pips. Once again, there are no statistics due out in the UK, so pressure could return in GBP/USD at any moment. And considering how the bears defended yesterday's weekly highs, it is likely that they are very active in the market. In the US, the weekly data on jobless claims will be released this afternoon, but it will be of little interest. For long positions: Buy pound when the quote reaches 1.2045 (green line on the chart) and take profit at the price of 1.2085 (thicker green line on the chart). Growth will occur if the yearly lows are not broken. But take note that when buying, the MACD line should be above zero or is starting to rise from it. Pound can also be bought at 1.2009, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.2045 and 1.2085. For short positions: Sell pound when the quote reaches 1.2009 (red line on the chart) and take profit at the price of 1.1965. Pressure will return if there is no bullish activity above 1.2045. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.2045, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.2009 and 1.1965. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331077
The USD/CHF Pair Is All Set To Revisit The Monthly Low

The USD/CHF Pair's Bears Have A Challenge

TeleTrade Comments TeleTrade Comments 29.12.2022 08:52
USD/CHF prints three-day losing streak, renews intraday low of late. Swiss ZEW Survey – Expectations improved in December to -42.8. Lack of market’s confidence in the US Dollar’s recovery favors bears amid mostly downbeat sentiment. Yields refreshed multi-day top on China, Russia concerns before easing amid a lackluster trading session. USD/CHF takes offers to refresh intraday low around 0.9267 as it cheers the US Dollar pullback amid inactive markets during the holiday season. In doing so, the Swiss currency (CHF) pair fails to justify the previous day’s Doji candlestick amid firmer Swiss ZEW Survey numbers for December. As per the latest Swiss ZEW Survey – Expectations, the sentiment gauge improved in December to -42.8 versus the -50.5 forecasts and -57.5 previous readings. On the other hand, US Pending Home Sales for November dropped to -37.8% YoY versus -36.7% expected and -37.0% prior while Richmond Fed Manufacturing Index for December improved to 1.0 versus -4.0 anticipated and -9.0 prior. Also weighing on the quote could be the latest retreat in the US Treasury yields, which in turn weigh on the US Dollar. That said, the US 10-year Treasury yields drop 2.8 basis points to 3.858% by the press time, after rising the most since October 19 the previous day. While the market’s consolidation and a lack of major data could be held responsible for the USD/CHF pair’s latest weakness, the Swiss Franc’s (CHF) safe-haven appeal and recently firmer data seem to favor the bears amid receding hawkish bias over the Fed. That said, news from Reuters suggesting inconsistent virus details from Beijing and multiple economies announcing fresh testing requirements from China previously weighed on the market sentiment and propelled the US Treasury yields. “China reported three new COVID-related deaths for Tuesday, up from one for Monday - numbers that are inconsistent with what funeral parlors are reporting, as well as with the experience of much less populous countries after they re-opened,” reported Reuters. Additionally challenging the risk takers is Russia’s rejection of peace with Ukraine unless it accepts the treaty allowing additional territories, as well as an escalated war in the city of Kherson. Against this backdrop, stocks in the Asia-Pacific region trade mixed while the S&P 500 Futures print mild gains, despite the downbeat closing of the Wall Street benchmarks. Moving on, the USD/CHF pair may witness the continuation of the latest moves amid a likely absence of major data/events. Even so, the US Initial Jobless Claims, Treasury yields and headlines surrounding Russia, as well as China, should be eyed for intraday directions. Technical analysis Wednesday’s Doji candlestick and a two-week-old ascending support line, close to 0.9235 by the press time, challenge USD/CHF bears. Recovery moves, however, remain elusive unless crossing the 21-DMA hurdle surrounding 0.9330.
Underestimated Risks: Market Underestimating Further RBA Tightening

WTI Crude Oil’s Weakness Allows The Indian Rupee (INR) To Remain Firmer

TeleTrade Comments TeleTrade Comments 29.12.2022 08:57
USD/INR stays defensive amid sluggish markets, grinds lower of late. China Covid concerns weigh on risk profile in Asia but softer US Treasury yields probe Indian Rupee bears. India Trade Deficit for Q3, US Initial Jobless Claims eyed for fresh impulse. USD/INR holds lower ground near 82.75 as bulls and bears jostle during Thursday’s Asian session. The Indian Rupee (INR) pair welcomed bears the previous day but the broadly firmer US Dollar challenges the downside moves before the latest weakness, mainly due to the downbeat US Treasury yields. In doing so, the quote cheers softer Oil prices amid lackluster trading days through the end of 2022. That said, the US 10-year Treasury yields drop 2.8 basis points to 3.858% by the press time, after rising the most since October 19 the previous day. The pullback in the benchmark US bond coupons from a three-week high also weighs on the US Dollar Index (DXY), down 0.15% intraday near 104.35 by the press time. It’s worth noting, however, that the sour sentiment in the Asia-Pacific markets, mainly due to China-linked Covid woes, seems to challenge the USD/INR bears. On the contrary, WTI crude oil’s weakness allows the Indian Rupee (INR) to remain firmer, due to India’s reliance on energy imports. Multiple countries, including India, announced requirements of Covid tests for Chinese travelers as doubts over Beijing’s reporting of data and a hidden jump in the virus numbers weigh on sentiment. On the same line could be Russia’s rejection of peace with Ukraine unless it accepts the treaty allowing additional territories, as well as an escalated war in the city of Kherson. Against this backdrop, MSCI’s Index of Asia-Pacific outside Japan extend the previous day’s losses while India’s BSE Sensex drops half a percent at the latest. Moving on, the India Trade Deficit for the third quarter (Q3) will precede Infrastructure Output for November to direct short-term USD/INR moves. On the other hand, weekly prints of the US Initial Jobless Claims and Chicago PMI for December will be eyed for short-term directions. Overall, the year-end inaction could allow the pair to consolidate the monthly gains. Technical analysis Although multiple failures to cross the 83.00 hurdle on a daily closing basis keep USD/INR bears hopeful, the 21-DMA support restricts the immediate downside of the pair to around 82.45.
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

The Aussie Pair Seesaws Inside A One-Week-Old Ascending Trend Channel

TeleTrade Comments TeleTrade Comments 29.12.2022 09:00
AUD/USD prints heaviest intraday gains since Friday despite recent inaction. Bullish chart formation, sustained trading beyond 0.6700 support confluence favor buyers. Multiple hurdles stand tall to test upside momentum. AUD/USD reflects the market’s holiday mood as it treads water around 0.6750 despite posting the biggest daily gains in nearly a week during early Thursday. In doing so, the Aussie pair seesaws inside a one-week-old ascending trend channel amid sluggish oscillators. Other than the channel formation and sluggish RSI, as well as MACD, the quote’s successful trading beyond the 0.6700 support confluence also keeps buyers hopeful. However, 23.6% Fibonacci retracement level of the pair’s November 10 to December 13 upside, near 0.6775, guards the quote’s immediate upside. Following that, the aforementioned channel’s upper line, around 0.6805 at the latest, could challenge the AUD/USD bulls. In a case where the Aussie buyers cross the 0.6805 hurdle, multiple levels around 0.6820 and 0.6850 could probe the advances before highlighting the monthly peak of 0.6893 and the 0.6900 round figure. On the flip side, pullback moves remain elusive unless the quote stays beyond the 0.6700 key support comprising the 200-Exponential Moving Average (EMA) and bottom line of the stated channel. Should that happen, a quick fall to the monthly low marked in the last week around 0.6630 can’t be ruled out. Though, the 61.8% Fibonacci retracement level around 0.6580, also known as the “Golden Ratio”, appears a tough nut to crack for the AUD/USD bears. AUD/USD: Four-hour chart Trend: Bullish
The USD/CAD Pair Has The Strong Downside Momentum

The USD/CAD Pair Is Likely To Extend The Latest Weakness

TeleTrade Comments TeleTrade Comments 29.12.2022 09:08
USD/CAD renews intraday low while paring the biggest daily jump in a fortnight. Convergence of 100-SMA, previous support line from mid-November challenge upside moves. 200-SMA appears a tough nut to crack for the bears. USD/CAD takes offers to refresh intraday low around 1.3580 as it pares the biggest daily gains in two weeks heading into Thursday’s European session. In doing so, the Loonie pair extends the day-start pullback from the 1.3615 resistance confluence despite bullish MACD signals. That said, the 200-Simple Moving Average (SMA) joins the support-turned-resistance line from November 15 to highlight the 1.3615 level as the key hurdle. Given the quote’s recent pullback from the stated resistance, a pullback towards the mid-December swing low near 1.3520 can’t be ruled out. However, the 200-SMA level of 1.3507 and the 1.3500 round figure could challenge the USD/CAD bears afterward. In a case where the Loonie pair drops below the 1.3500 round figure, the monthly low of 1.3385 will be in the spotlight. Alternatively, recovery moves need to portray successful trading beyond the 1.3615 key resistance to convince the USD/CAD buyers. Even so, a one-week-old descending trend line near 1.3655 could challenge the quote’s further upside before directing the bulls toward the monthly peak of 1.3705. To sum up, the USD/CAD pair is likely to extend the latest weakness but the room towards the south appears limited. USD/CAD: Four-hour chart Trend: Limited downside expected  
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The New Zealand Dollar (NZD) Is Holding Its Revival Move

TeleTrade Comments TeleTrade Comments 29.12.2022 09:10
NZD/USD is aiming to reclaim the 0.6350 hurdle despite a solid risk-aversion theme. The New Zealand Dollar is holding its revival amid optimism about China’s reopening. Fed’s ultra-hawkish policy has resulted in a sheer decline in US Pending Home Sales data. The NZD/USD pair has extended its recovery above 0.6320 in the Asian session. Earlier, the Kiwi asset picked up demand after dropping to near the round-level support at 0.6300. The major is expected to extend its recovery to near 0.6350 despite the risk-aversion theme in the global market. The return on 10-year US Treasury bonds has trimmed to near 3.86% despite caution in the market led by a sheer spike in Covid-19 infections in China, however, the upside is still favored. Meanwhile, S&P500 futures are not getting decent traction from the market participants amid weak risk appetite. The US Dollar Index (DXY) is struggling to cross the critical resistance of 104.40. Ambiguity in performance from different asset classes is expected ahead as trading activity has dropped amid the festive mood. The continuation of an ultra-hawkish monetary policy by the Federal Reserve (Fed) is significantly impacting the realty sector in the United States. On Wednesday, the National Association of Realtors published the Pending Home Sales, which declined by 4% on a monthly basis in November while the street was expecting an expansion of 0.6%. Higher interest rates by the Fed have forced households to drop the expression of buying a new home at the current juncture. Although, risk-perceived assets are facing the heat of China’s reopening after strict Covid measures. The New Zealand Dollar is holding its revival move as ease in supply chain disruptions will increase the trading activity of New Zealand with China. It is worth noting that New Zealand is one of the leading trading partners of China.
Apple Q3 2023 Results – Surpassing Expectations and Aiming for New Heights

The EUR/GBP Pair Is Likely To Witness More Inaction

TeleTrade Comments TeleTrade Comments 29.12.2022 09:12
EUR/GBP struggles to extend pullback from 11-week high. US Treasury yields retreat from three-week top, EU bond coupons grind near 11-year high but Gilts stay depressed. Geopolitical fears from Russia join China Covid woes but lack of market participation, absence of major data bore momentum traders. EUR/GBP remains sidelined around 0.8825, after reversing from a nearly two-month high the previous day, as traders seek more clues amid the market’s indecision headline into Thursday’s London open. Even so, the cross-currency pair remains pressured as the geopolitical concerns surrounding Russia and fears of economic slowdown propel the Eurozone Treasury bond yields while the UK’s Gilts dropped to the lost levels for seven weeks. Russia’s rejection of peace with Ukraine unless it accepts the treaty allowing additional territories joins an escalated war in the city of Kherson to weigh on the sentiment. On the same line could be the major nations’ notification to require the Covid tests for Chinese travelers amid doubts over Beijing’s reporting of data and a hidden jump in the virus numbers. It’s worth noting, however, the comparatively stronger hawkish bias of the European Central Bank (ECB) policymakers versus the Bank of England (BOE) decision-makers challenge the EUR/GBP bears. Even so, the chatters surrounding the bloc’s recession seem to have gained more attention of late, which in turn should have recalled the bears the previous day. Against this backdrop, the US 10-year Treasury yields dropped 2.8 basis points to 3.86% by the press time, after rising the most since October 19 the previous day. That said, the Eurozone 10-year Treasury bond yields rose to the highest levels since July 2011 before retreating to 2.51% while the UK’s 10-year Gilt coupons dropped for the third consecutive day to refresh multi-day low. Looking forward, the EUR/GBP is likely to witness more inaction but the recent escalation in the Russia-Ukraine fight and the economic slowdown fears surrounding the bloc could weigh on the prices. Technical analysis Despite the failure to cross the 0.8855-65 resistance zone, comprising multiple levels marked since late September, EUR/GBP remains on the bear’s radar unless breaking the 200-DMA support, close to 0.8575 at the latest.
FX: The SNB Is Getting Its Stronger Swiss Franc Via Gains Against The Dollar

The Outlook For The EUR/CHF Pair For The Year 2023 By Analysts At JP Morgan

TeleTrade Comments TeleTrade Comments 29.12.2022 09:14
Analysts at JP Morgan offer a negative outlook for EUR/CHF for the year 2023, with a target of 0.95 in Q1 2023 and 0.92 by the end of 2023. Key quotes “CHF's anti-cyclical properties and the SNB's bullish policy regime shift for the currency point to further downside for EUR/CHF into 2023.” “The CHF remains one of the best proxies of global growth, serving as a reliable hedge against lingering downside risks to the cycle next year.” “Real rate differentials and Switzerland's sustained current account surplus remain bullish CHF tailwinds, particularly vs. EUR.” “Deleveraging flows should also be CHF-supportive.”
Metals Market Update: Decline in LME Copper On-Warrant Stocks, Zinc and Lead Surplus Continues, Nickel Market in Supply Surplus

USD/JPY Pair Bounced Off Support Area, GBP/USD Pair Broke Bearish Out Of Its Rising Wedge

Saxo Bank Saxo Bank 29.12.2022 12:10
Summary:  USDJPY bounced from strong support but still in a down trend. The pair needs to break bullish out of falling channel for 140EURGBP testing key resistance at 0.8867. Upside potential to 0.92GBPUSD broken out of rising wedge but sellers have failed to take control. 1.19 support is key USDJPY bounced off support area 131.49-130.38 and the lower trendline in the falling channel like pattern. Divergence on RSI indicates that could have been the lows for now. There is still negative sentiment however, but if USDJPY breaks above the upper falling trend and back above 200 daily SMA there could be short-term upside momentum to 140-141.25.If USDJPY slides back and closes below 130.38 it is likely to fuel a sell-off down to around 126.35 . That scenario is likely to unfold if RSI also breaks below its lower rising trendline.   All charts and data : Saxo Group EURGBP has at first attempt been rejected at the resistance at around 0.8867. A close above could move the pair for 0.92 i.e., same distance a wide sideways consolidation area illustrated by the vertical arrows.However, if EURGBP slides back below 0.8754 it could stay range bound for quite some time.RSI is showing positive sentiment however and all Simple Moving Averages (SMA) are rising i.e., showing underlying bullish sentiment indicating we are to see higher levels in EURGBP. GBPUSD broke bearish out of its rising wedge like pattern now hovering around the 200 daily SMA. Bears don’t seem to be able to push the pair lower. RSI is still showing positive sentiment and there is no divergence indicating we could see a GBPUSD moving higher and have another attempt reaching resistance 1.2667.If sellers succeed in pushing GBPUSD below 1.19 that could change and give them more energy to push GBPUSD down to around 1.1629. Medium-term pictureGBPUSD got rejected at the 55 weekly SMA which is dropping sharply and has not managed to close a week above resistance at 1.2293. Weekly RSI is still showing negative sentiment indicating GBPUSD bounce from September trough has run its course and lower levels is in the cards. GBPUSD could slide back down to around 1.14For GBPUSD to gain further upside a weekly close above 1.2293 is needed combined with RSI closing above 60 threshold.       RSI divergence explained: When  price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend Source: Technical Update - USDJPY, EURGBP & GBPUSD | Saxo Group (home.saxo)
US Inflation Rises but Core Inflation Falls to Two-Year Low, All Eyes on ECB Rate Decision on Thursday

Special Edition Of The Podcast: A Look Back At A Remarkably Brutal Year For Investors

Saxo Bank Saxo Bank 29.12.2022 12:15
Summary:  This Special Edition of the podcast features an interview with Saxo CIO Steen Jakobsen, who looks back at a remarkably brutal year for investors on the double whammy of bear markets in both bonds and equities, and looks ahead at 2023. In particular, the conversation considers the misguided optimism for next year that is ironically based on a base case of disinflation, recession and an eventual return of central bank easing. Are markets ready for a more positive outcome for the real economy? John J. Hardy hosts. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: Podcast: Special Edition: Special Edition: A look ahead at 2023 with Steen Jakobsen | Saxo Group (home.saxo)
Collapse of Black Sea Grain Initiative Rattles Market: Impact on Ukrainian Grain Exports

Economists At Société Générale Expect The USD/ZAR Pair To Drop By The End Of 2023

TeleTrade Comments TeleTrade Comments 29.12.2022 12:17
The Rand fell around 10% versus the US Dollar on a spot return basis this year. Looking ahead, economists at Société Générale expect the USD/ZAR pair to plunge to 15 by the end of 2023. Rates are likely to stay at 8% until the end of 2023 “Despite the heightened political uncertainties, we remain positive on the ZAR. The re-opening of China and broader USD depreciation should deflate USD/ZAR in our view towards 15.00 by end-2023.” “Headline inflation peaked five months ago but remains above the target range of 3-6%. We expect the central bank to slow the pace of tightening and deliver two more hikes of 50 bps in 1Q23 to 8%. Rates are likely to stay at this level until the end of 2023.” “GDP growth may moderate from 1.9% this year to 1.2% in 2023.”
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

EUR/USD Pair Remains Within Its Horizontal Trading Range, The Aussie Failed To Break The Resistance At 0.68

Kamila Szypuła Kamila Szypuła 29.12.2022 13:38
The dollar weakens on Thursday after gaining in the previous session, and investors were nervous towards the end of the year as initial optimism about China reopening has faded. China's reopening was initially met with applause in global markets, giving a boost to the commodity complex and risk assets in general, however, the rising number of COVID cases flooded local Chinese hospitals, adding to the level of concern for a positive reopening. What's more, the Asian stock market is also influenced by information from China. Asian stocks weakened slightly on Thursday as soaring COVID cases in China alarmed investors and cast doubt on the chances of a quick recovery for the world's second-largest economy after the easing of stringent COVID-related restrictions. From the USD's perspective, labor market data is scheduled for later today. Weekly initial jobless claims will be the only data appearing in the US economic report. Although expectations are slightly weaker than the previous reading, if the actual data is in line with these forecasts, the impact on the dollar breakout should be minimal given the minor changes. USD/JPY The Bank of Japan announced an unplanned bond purchase operation for the second time during the day, trying to limit yields. The Central Bank offered purchases of unlimited amounts of 2- and 5-year bills and a daily offer to buy 10-year debt at 0.5%. The BoJ faces an increasing challenge as it plans to increase its planned bond purchases in Q1 2023 by 23%. Although yesterday during the US session USD/JPY exceeded 134, today it is trading well below 133.80. Read next: The First Technical Problems Of Twitter Under The Leadership Of Elon Musk, Tesla Shares Worst Of The Year| FXMAG.COM AUD/USD The uplifting Australian dollar has danced to the rhythm of global factors recently. The Australian and New Zealand dollars struggled to recover on Thursday after failing to sustain overnight gains as concerns over the global interest rate outlook outweighed optimism over China easing COVID-19 restrictions. Faced with a scarcity of major market catalysts, the Australian pair (AUD/USD) lay flat. Thus, the Aussie failed to break the resistance at around 68. Today, the pair is trading above 0.6710 The futures market now suggests the Reserve Bank of Australia may be more aggressive than previously thought as traders price in a higher peak of around 4% by September next year, down from 3.6% just a week ago. They also suspect the RBA will not cut rates until 2024. EUR/USD The EUR/USD pair traded mostly in the range of 1.0620-1.0630 in the morning, sometimes falling below the lower limit. Currently, the pair is trading around 1.0640. EUR/USD fell below 1.0650 in the second half of the week as the risk aversion of the market environment helped the US dollar find demand. However, the pair remains within its horizontal trading range and the technical outlook offers no directional guidance for now. GBP/USD GBP/USD managed to rebound and climb towards 1.2050 early Thursday after falling to the 1.2000 area late Wednesday. The pair's short-term technical picture suggests buyers are still hesitant to commit to a steady recovery. The cable pair trades below $1.21. Mostly trading on the daily chart is below 1.2050. Source: investing.com, dailyfx.com, finance.yahoo.com
Inflation In Japan Continues To Show An Uptrend, The USD/JPY Pair Is Going Down

Labor Agreements In Early 2023 Would Have An Effect On The Bank Of Japan's Decisions

Kenny Fisher Kenny Fisher 29.12.2022 13:48
The Japanese yen has posted gains on Thursday, putting the brakes on this week’s dollar rally of over 1%. In the European session, USD/JPY is trading at 133.64, down 0.60%. This week has been marked by low liquidity, with many traders closing their books or taking a holiday at the end of the year. Japanese markets have been open all week, and USD/JPY has shown more movement than the other majors. BOJ defends yield curve target In a week that has been light on economic releases, the Bank of Japan has provided plenty of material for the markets. The BoJ shocked the markets last week when it widened the yield curve band on 10-year bonds, from 0.25% to 0.50%. The move had the same effect as a rate hike and sent the yen sharply higher. After the move, Governor Kuroda said that the tweak was aimed at making the yield curve more sustainable rather than removing it. Investors remain unconvinced, with speculation rising that the BoJ could raise the cap to 0.75% or eliminate its yield curve control altogether. The BoJ has tried to dispel speculation that further changes to the yield curve are on the way. The Bank announced on Wednesday and again today unlimited bond purchases, with the aim of defending its yield curve target, which is around 0% for 10-year bonds. The tweak on the yield curve band did not affect this target, which the BoJ has insisted will remain in place. What we are seeing here is a continuation of a cat-and-mouse game between the BoJ and investors, with each side testing the resolve of the other. In October, the yen fell close to 152 before the Ministry of Finance intervened in the currency markets and propped up the yen. Inflation is on the rise in Japan and has climbed to 3.7%, a 40-year high. The BoJ, however, remains unconvinced that inflation is sustainable unless accompanied by stronger wage growth. If labour agreements in early 2023 result in higher wages, the BoJ could raise its yield curve control target, which would be a massive change in policy. Read next: EUR/USD Pair Remains Within Its Horizontal Trading Range, The Aussie Failed To Break The Resistance At 0.68| FXMAG.COM USD/JPY Technical USD/JPY tested support at 133.62 earlier. The next support level is 132.62 There is resistance at 134.86 and 135.98 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

The British Pound (GBP) Remains Calm Today

Kenny Fisher Kenny Fisher 29.12.2022 14:06
The British pound has shown little movement since before Christmas and remains quiet on Thursday. This is not surprising as trading volumes are down during the holidays and there are few key events on the calendar this week. In the European session, GBP/USD is trading at 1.2023, up 0.07%. There are no tier-1 events out of the UK this week, leaving US data in the spotlight. On the manufacturing front, the Richmond Fed Manufacturing Index rebounded to 1 point in December, up sharply from -9 in November and ahead of the consensus of -4 points. The wage index rose to 35 in December, up from 27 in November, another indication that wage growth remains strong. The US housing sector has been sending mixed signals for November. Existing home sales fell sharply while new home sales rebounded higher. Pending home sales were released on Wednesday, with a disappointing reading of -4.0% m/m, down from 4.7% in October and shy of the consensus of -1.0%. Pending home sales have been in a deep rut, posting a decline for six straight months and 12 of the last 13 months. The housing sector is clearly in trouble, although the silver lining could be that mortgage rates have been declining, which should lead to an increase in house purchases early next year. Today’s highlight is US unemployment claims. Last week’s release rose slightly, from 214,000 to 216,000. The markets are braced for a jump to 225,000, but the markets are unlikely to react to volatility in the week-to-week releases; the four-week moving averages smooths the weekly data and provide a more accurate picture of unemployment. Read next: EUR/USD Pair Remains Within Its Horizontal Trading Range, The Aussie Failed To Break The Resistance At 0.68| FXMAG.COM GBP/USD Technical GBP/USD has support at 1.1949 and 1.1846 There is resistance at 1.2095 and 1.2198 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

At The Close On The New York Stock Exchange All Indices Rose

InstaForex Analysis InstaForex Analysis 30.12.2022 08:01
At the close on the New York Stock Exchange, the Dow Jones rose 1.05%, the S&P 500 index rose 1.75%, the NASDAQ Composite index rose 2.59%. Dow Jones The leading performer among the components of the Dow Jones index today was Walt Disney Company (NYSE:DIS), which gained 3.01 points or 3.58% to close at 87.18. Salesforce Inc rose 4.07 points or 3.17% to close at 132.54. Apple Inc rose 2.83% or 3.57 points to close at 129.61. The least gainers were Walgreens Boots Alliance Inc, which lost 0.11 points (0.29%) to 37.47 by the end of the session. Merck & Company Inc. shares rose 0.26 points (0.23%) to close at 110.82, while Boeing Co rose 0.53 points (0.28%) to close at 188. .91. S&P 500  Leading gainers among the S&P 500 index components in today's trading were SVB Financial Group, which rose 8.40% to 234.63, Tesla Inc, which gained 8.08% to close at 121.82, and shares of Warner Bros Discovery Inc, which rose 6.31% to end the session at 9.43. The least gainers were shares of Cardinal Health Inc, which shed 1.12% to close at 77.72. Shares of CF Industries Holdings Inc shed 0.96% to end the session at 85.51. AmerisourceBergen fell 0.78% to 166.05. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Hoth Therapeutics Inc, which rose 143.64% to hit 10.72, Kala Pharmaceuticals Inc, which gained 99.04% to close at 24.84, and also Palisade Bio Inc (NASDAQ:PALI), which rose 77.90% to close at 3.22. The least gainers were FStar Therapeutics Inc, which shed 40.38% to close at 4.09. Shares of Jasper Therapeutics Inc lost 21.97% to end the session at 0.46. Quotes of Th International Ltd decreased in price by 20.00% to 2.60. Numbers On the New York Stock Exchange, the number of securities that rose in price (2651) exceeded the number of those that closed in the red (450), while quotes of 73 shares remained virtually unchanged. On the NASDAQ stock exchange, 3,095 companies rose in price, 646 fell, and 141 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 3.16% to 21.44. Gold Gold futures for February delivery added 0.34%, or 6.15, to $1.00 a troy ounce. In other commodities, WTI crude for February delivery fell 0.37%, or 0.29, to $78.67 a barrel. Futures for Brent crude for March delivery fell 0.31%, or 0.26, to $83.73 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.56% to 1.07, while USD/JPY shed 1.12% to hit 132.96. Futures on the USD index fell 0.48% to 103.68. Relevance up to 03:00 2022-12-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/306809
The Price Of EUR/USD Pair Will Develop Sideways Movement

EUR/USD Pair May Resume Its Larger Degree Downtrend

Oscar Ton Oscar Ton 30.12.2022 08:03
Technical outlook: EUR/USD rallied through a 1.0690 high during the New York session on Thursday only to find resistance as projected earlier. The single currency pair has eased off and is seen to be trading close to the 1.0655 level at this point in writing. If a potential lower top is in place at 1.0690, prices would reverse sharply from here and drag through the 1.0000-50 zone in the next few trading sessions. EUR/USD has been drifting sideways for the last two weeks after printing the 1.0736 highs. It is likely that bears are going to come back strong since prices reversed from the 1.0690 mark. A break below 1.0570 is still required to confirm a lower top in place and accelerate further towards 1.0350 and the 1.0000-50 mark at least. Looking lower in the near term if 1.0736 holds well. EUR/USD may also resume its larger degree downtrend, which began from the 1.2350 peak in 2021. If the structure holds, prices could drag below 0.9535 mark to complete the two year pattern before giving in to bulls. Either way, we are optimistic for a near term earish drop to at least 1.0350 from current levels before finding support. Trading plan: Potential drop against 1.0750 Good luck! Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306811
Warsaw Stock Exchange SA Approves Dividend Payout: Neutral Impact Expected

The US Dollar Index Has A Potential For Rally

Oscar Ton Oscar Ton 30.12.2022 08:05
Technical outlook: The US dollar index slipped through the 103.56 lows during the New York session on Thursday holding above its range low at 103.50. The index is seen to be trading close to the 103.65 mark at this point of writing as bulls are seemed to be poised to hold prices above the 103.40-50 range. A break above 104.40 is still required to confirm a bullish breakout though. The US dollar index might have terminated its last wave of the sideways consolidation at the 103.56 mark. If it is correct, prices would stay above 103.50 and go higher above 104.50 to break on the north side. Please note that a minimum projected target is 105.50 and 107.00 thereafter. Bulls remain poised to come back in control and hold prices above the 103.00 mark. Also, note that the larger degree corrective drop from 114.70 looks complete at 103.00. If the structure holds well, bulls will remain inclined to push prices towards 114.70 and further, and complete its two-year rally that began from the 89.50 level. Either way, we can expect a rally from here at least towards 107.00 and 110.50, if not further. Trading plan: Potential rally against 102.00 Good luck!   Relevance up to 04:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306813
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The EUR/USD Currency Pair Remained Completely Flat

Paolo Greco Paolo Greco 30.12.2022 08:20
On Thursday, the EUR/USD currency pair remained completely flat in trading. The macroeconomic, structural, and technical conditions have not changed over the past day. The market either keeps celebrating or is simply on vacation. Even in these difficult circumstances, the pair manages to show growth, albeit a weak one. This phenomenon has already been covered extensively. It is evident even from the aforementioned illustration, which shows the most recent 2.2–2.5 months, that the price has only twice in this period managed to break below the moving average. Keep in mind that a fix below the moving average signals a potential trend change. We only had two warnings available to us in 2.5 months, and we never even noticed a downward correction. The price has been close to the moving average line throughout, but in most cases, it has been unable to fall below it. As a result, the paradoxical growth of the euro currency persists, and if it keeps doing so, the effects of the two-year downward trend will quickly level off. In theory, we have stated numerous times that there are currently essentially no growth factors for the euro. As it waited for a slowdown in the rate of tightening of the Fed's monetary policy starting in September or October, the market started to take profits on short positions. The European currency has increased by 1200 points during this time, and the overall downtrend is 2800 points. As a result, the pair responded roughly one-third to this trend. This is ideal for a correction, but if the movement of recent months signals the start of a new upward trend, then we require convincing justifications for the growth of the euro rather than just a technical requirement to adjust upwards. Additionally, if the upward trend has begun, it cannot occur completely without downward corrections, especially if there are a few reasons for the euro currency to increase in value. The euro currency has been growing in an illogical manner for more than a month, and despite flying the flag of a flat, it has managed to do so even over the New Year's holiday. There are still no drivers of euro growth. Beginning in 2023, macroeconomic statistics will have a significant impact on both the euro and the dollar. Remember that there are no central bank meetings planned for January, so the market can only focus on speeches by the Fed and ECB members as well as data. We are anticipating reports on inflation, nonfarm payrolls, GDP, and other economic indicators, as we would with any month. Recall that the only reports that matter right now are those related to inflation and non-farms. How the ECB and the Fed change their monetary policies is dependent on these data. In December, both central banks started to move away from an aggressive monetary policy, but we think that the Fed is the only one whose actions are warranted. The Fed has managed to slow inflation for five months, and there is every reason to believe that this trend will continue. As a result, there is no longer a need for a sharp increase in the key rate. Furthermore, the Fed won't give up on tightening further. It will probably increase the rate by a total of 0.75%. But there are still a lot of issues with the ECB. It also started to slow down the rate of rate increases, but it did so with only a few declines in inflation. Since the impact of a rate change lasts for 3–4 months, the four previous increases should be sufficient to bring inflation down for a while. However, we think the European regulator gave up the aggressive strategy too soon. By giving up on it, the ECB is also signaling that it is not prepared to raise rates for as long as it takes, which increases the likelihood that the inflation target won't be met or that it will take much longer than in the US. Because neither the euro nor the dollar are currently supported by fundamentals, the euro currency should not grow at all. On the 24-hour TF, however, there is still not a single indication that the correction has started. As of December 30, the euro/dollar currency pair's average volatility over the previous five trading days was 54 points, which is considered "average." So, on Friday, we anticipate the pair to fluctuate between 1.0606 and 1.0714. The Heiken Ashi indicator's reversals are now completely irrelevant because the pair is flat. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trading Suggestions: Although there is still an upward trend for the EUR/USD pair, it has been flat for the past two weeks. Trading can only be done on the lower TF inside the side channel because the 4-hour TF hardly ever moves. Explanations for the illustrations: Channels for linear regression help identify the current trend. The trend is currently strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones. Relevance up to 04:00 2022-12-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331156
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The Cable Market (GBP/USD) Is Still Trending Downward

Paolo Greco Paolo Greco 30.12.2022 08:22
On Thursday, the GBP/USD currency pair traded much more calmly than it had in recent days while still maintaining a corrective tone. Recall that over the past two weeks, the pound sterling has undergone active adjustment, fully meeting our expectations. Only the EUR/USD pair, which is not only not being adjusted but also attempting to maintain the upward trend of recent months, is now able to ask questions. The euro and the pound now have a strong correlation, which raises many additional questions. Remember that over the previous two weeks, there were no fundamental or macroeconomic backgrounds. We would comprehend such a movement of the two major currency pairs if the "foundation" at this time supported the euro but failed the pound. However, nothing comparable exists today. 2023 might not be any better for the British pound than 2022. It has grown significantly over the past three months, but it can also be seen as a banal correction. The 24-hour TF demonstrates exactly what we mean. If this is merely a correction, it might end soon given that the British pound currently lacks significant growth drivers. Another issue is that there aren't enough factors driving the US dollar's growth. For this reason, we recommend a period of consolidation over the coming months, during which the currency pair will alternately move by 500–600 points in each direction. In other words, we can get a flat on a 24-hour TF. Scotland might leave the UK. On the one hand, since London has repeatedly refused to allow different types of referendums in Edinburgh, it would have been possible to put an end to this issue for a very long time. A second referendum was first sought after Nicola Sturgeon claimed that the majority of Scots opposed leaving the EU in the 2016 referendum. It then attempted to force through an "advisory" referendum that doesn't appear to have any legal standing but was intended to determine the percentage of Scots who want to break away from England. However, Sturgeon was turned down, regardless of the prime minister. London's stance is simple to comprehend and even appears to be logical and reasonable. A referendum was held in 2014, but the majority of Scots decided not to break away from England at that time. It is obvious that everything began to turn upside down in 2016, so the Scots' perceptions may evolve. However, because things are constantly changing in our world, it turns out that any region has the right to declare its independence whenever it wishes by holding a "legitimate expression of the will of the people." Even if the law does not specifically address such a situation. As a result, any country or region can secede at any time. Although it is challenging for us to assess how morally upright, ethical, and just this is, the fact remains. If this choice is accepted as fair, there will be 500–600 distinct states on the map of the world in 50 years. Scotland alone is responsible for the desire to secede. And there is the issue with Nicola Sturgeon, who, if her party wins the parliamentary elections, has promised a referendum to her people by the end of 2023. Now that the party has won, it's important to keep the promises. And it's still very unclear how Ms. Sturgeon plans to carry them out. No court in the world will accept a referendum she holds without London's approval as legitimate. The right to hold a referendum was recently rejected by the British Supreme Court. However, Sturgeon will probably lose the following election if she does not call a referendum. The year 2023 looks to be just as interesting for the UK as the previous five or six years. Without a doubt, the pound will plunge back to parity or even lower if Britain loses Scotland. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 81 points. This value is "average" for the dollar/pound exchange rate. So, on Friday, December 30, we anticipate movement that is contained within the channel and constrained by the levels of 1.1971 and 1.2133. The Heiken Ashi indicator's downward turn indicates that the downward movement may resume. Nearest levels of support S1 – 1.2024 S2 – 1.1963 S3 – 1.1902 Nearest levels of resistance R1 – 1.2085 R2 – 1.2146 R3 – 1.2207 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair is still trending downward. Therefore, in the event of a downward reversal of the Heiken Ashi indicator or a price recovery from the moving average, new sell orders with targets of 1.1963 and 1.1902 should be taken into account. When the moving average is fixed above, buy orders should be placed with targets of 1.2133 and 1.2207. A flat is also highly likely right now. Explanations for the illustrations: Determine the present trend with the aid of linear regression channels. The trend is currently strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the likely price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.     Relevance up to 05:00 2022-12-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331158
The EUR/USD Pair Has A Potential For The Breakout Mode

The EUR/USD Pair Hovers Within Sideways Consolidations

Torben Melsted Torben Melsted 30.12.2022 08:29
EUR/USD has been locked in a sideways consolidation, but we continue to look for a slightly deeper correction towards 1.0470 to complete wave 4/ and set the stage for wave 5/ higher to 1.0927 as this will complete wave 3. In the longer term, we are looking for much higher levels for EUR/USD, but we will have to take the ride higher in baby steps as always as most of the time, the pair hovers within sideways consolidations and corrective counter-trends and only 1/3 of the time, it actually moves higher.   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306831
Analysis Of USD/CHF Pair: The Swiss Currency Pair Rebounds

An Upside Reversal Of The USD/CHF Pair Could Be Activated

Ralph Shedler Ralph Shedler 30.12.2022 08:33
USD/CHF Down Channel! The USD/CHF pair dropped within a down-channel pattern. As long as it stays below the downtrend line, the price could drop deeper despite temporary rebounds. It's trading at 0.9230 at the time of writing far above yesterday's low of 0.9216. Technically, the rate dropped below the 0.9222 historical level which represented a downside obstacle. It failed to stay below it signaling exhausted sellers. Now, the rate could try to come back toward the downtrend line. USD/CHF Trading Conclusion! An upside reversal could be activated if the rate jumps and stabilizes above the downtrend line. Staying within the down channel and dropping below 0.9222 again may announce more declines.   Relevance up to 06:00 2022-12-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306835
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Euro (EUR) Is Rigging Again ANd EUR/USD Pair Is Still In A High Position

Paolo Greco Paolo Greco 30.12.2022 08:41
M5 chart of EUR/USD EUR/USD tried to leave the 1.0581-1.0669 horizontal channel ahead of the New Year. We can hardly say that it succeeded, but it was a few dozen points above that channel. But we can't say that the flat is over now either. Yes, there is a slight upward bias, and it might last for the near future, but volatility is still low, and the day's growth by 20-30 points can hardly be called a trend. Basically, I don't expect the market to be active right now, and I don't expect any trend movements from the pair either. Taking into consideration that today is the last trading day of 2022, it is better to wait for the new year and the flat to end. I still expect a downward movement from the euro, but even in the last days of the year we see the desire to rise while the pound is falling. There is almost no logic in the movements now. Trading signals were formed three times yesterday. At the beginning, the pair rebounded from 1.0658 and managed to go down "as much as" 15 pips, so a Stop Loss should have been set at breakeven on the short position. That was followed by another sell signal around the area of 1.0581-1.0669, which could only bring losses, because the pair did not even fall 15 pips. Nevertheless, closer to the evening, the position could be closed manually at a minimum loss. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, non-commercial traders opened 12,700 long positions, whereas the number of short positions fell by 4,800. Thus, the net positions rose by 7,900. The number of long positions is 143,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? From our point of view, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to adjust. The overall number of short orders exceeds the number of long orders by 43,000 (684,000 vs. 641,000). H1 chart of EUR/USD EUR/USD is still in a high position on the one-hour chart, and is still in a total flat. Lines of the Ichimoku indicator have already merged with each other and have lost meaning. As you can see, they are being worked out accurately enough. EUR is rigging again, so we have moved the lines to their real price levels, but the price can easily and freely cross them several times a day. On Friday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, as well as Senkou Span B (1.0654) and Kijun Sen (1.0640). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are still no important events scheduled for December 30 in the EU and the US. I don't expect the flat to end today. Volatility will probably remain low. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 05:00 2022-12-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331160
Analysis Of The CAD/JPY Commodity Currency Pair - 06.02.2023

The CAD/JPY Pair Could Approach And Reach New Lows

Ralph Shedler Ralph Shedler 30.12.2022 08:43
CAD/JPY Upside Seems Over! The CAD/JPY pair registered a strong downside movement and now it could develop a larger drop after passing below the uptrend line. From the technical point of view, the uptrend line represented a downside obstacle. Dropping below it signaled that the upside movement could be over and that the price could develop a new downside movement. As long as it stays under the downtrend line, the CAD/JPY pair could approach and reach new lows. CAD/JPY Trading Conclusion! The currency pair is expected to drop deeper as long as it stays under the downtrend line and after falling below today's low of 97.69. Relevance up to 06:00 2022-12-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306839
Technical Outlook Of The EUR/JPY Pair Movement In Short Term

Technical Analysis Of The Euro To Japanese Yen Pair (EUR/USD)

Torben Melsted Torben Melsted 30.12.2022 08:25
EUR/JPY continues to point lower toward the origin of the ending diagonal at 133.44. From the May 2020 low at 114.42, we have seen a five-wave rally to 148.40 and wave 5 of I turned into an ending diagonal. Once they complete, the target for the following correction is back to the origin of the ending diagonal, which in this case is 133.44. This is why we are looking for a corrective target. It doesn't mean that the correction can't be deeper than the 133.44 target, but that is the first logical target to look for and that's what we are doing.   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306829
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

GBP/USD Pair Maintains The Bearish Sentiment On 1H Chart

Paolo Greco Paolo Greco 30.12.2022 08:46
M5 chart of GBP/USD GBP/USD traded between 1.2007 and 1.2106 on Thursday. So while the euro is trying to go back to moving up, the pound is completing its downward movement and going into a flat. The fact that both major currency pairs are moving in completely different directions right now is a bit surprising since there are no fundamental and macroeconomic backdrops at the moment. Nevertheless, this is the holiday period, so illogical and non-standard movements shouldn't be surprising. Today is the last trading day of 2022. Hardly anyone is expecting either strong movements or a trend from the pair. I believe that the pound has not yet fully corrected, so the bearish movement will continue in January 2023. All of Thursday's trading signals were near the critical line. At the beginning of the US session, the pair rebounded from the Kijun-Sen line and fell 38 pips within 15 minutes. Not much, but it was significant. Of course, this trading signal cannot be considered a real one since GBP did not reach the nearest target level. However, it did pass the 20 points that was required to place the Stop Loss to Breakeven. Then the pair returned to the critical line, but it could neither rebound from it nor cross it, which is why there was no signal. COT report The latest COT report showed a decrease in bearish sentiment. During the given period, non-commercial traders opened 3,200 long positions and closed as many as 16,800 short positions. Thus, the net position grew by about 20,000, which is a lot for the pound. This figure has been on the rise for several months. Nevertheless, sentiment remains bearish, and GBP/USD is on the rise for no reason. I assume that the pair may well resume the downtrend soon since there is a need for at least a correction. Notably, both GBP/USD and EUR/USD now show practically identical movement. Since the net position is not even bullish yet, buying may continue for a few months to come. Non-commercial traders now hold 40,800,000 short positions and 35,200 long ones. The gap between them is small. I am still skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD maintains the bearish sentiment but is also in the horizontal channel. If this movement persists, the lines of the Ichimoku indicator may lose their strength in a short time, and we'll have to fix their last acceptable price value, because the pair can cross them 5 times a day in a flat. On December 30, the pair may trade at the following levels: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259. Senkou Span B (1.2218) and Kijun Sen (1.2063) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. There are no important events in the UK and the US, so there will be nothing to react to for today. I believe that the flat may last till the end of the year, or even longer. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate     Relevance up to 05:00 2022-12-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331162
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The EUR/USD Pair Suddenly Decided To Leave The Horizontal Channel

Paolo Greco Paolo Greco 30.12.2022 08:57
Analyzing Thursday's trades: EUR/USD on 30M chart EUR/USD continued to trade in a very sluggish manner on Thursday. Quotes slightly rose and by the end of the day the pair even managed to settle above 1.0657. However, we can't be too confident on this. The pair formally left the horizontal channel but it is still flat. Therefore, we wouldn't make any conclusions regarding the end of the sideways movement. There is still no fundamental and macroeconomic background, the reports will start coming out next week and it is not a fact that they will be able to bring the market out of the coma. We can only expect serious moves next Friday, which is when the EU inflation report and the Unemployment Nonfarm payrolls in the US will be released. Until then, we may continue to see movement, which will be very much like a flat. I still expect the euro to fall. EUR/USD on M5 chart Recently, novice traders have been lucky with the euro/dollar pai, but there is a limit to everything. There were three signals on Thursday, but due to the fact that the pair suddenly decided to leave the horizontal channel, all the signals were false. At least the first rebound from 1.0657 let beginners close the short position without loss since the price crawled down 15 pips. However, the second sell signal turned out to be absolutely false and the deal closed with a loss. The loss is not considerable since volatility is still low. Moreover, the position should have been closed manually closer to the evening and the loss should have been minimized that way. In general, there were no big losses, but now the pair is no longer in the horizontal channel, which means that there might be a lot of false signals today. Trading tips on Friday: EUR/USD left the 1.0587-1.0657 horizontal channel on the 30-minute chart. However, this doesn't mean that the flat is over. It just means that the euro can cross the upper limit in any direction. Therefore, there could be a lot of false signals today. On the 5-minute timeframe, we recommend trading at the levels 1.0465-1.0483, 1.0536, 1.0587-1.0607, 1.0657-1.0668, 1.0697, 1.0736, 1.0787, 1.0806. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. Today, there are no important reports or events scheduled in the EU or the US, so I don't expect the flat to end. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time. Relevance up to 06:00 2022-12-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331166
Beyonce Bounce and Soaring UK Inflation: A Challenge for Bank of England

The Technical Picture Of GBP/USD Pair Does Not Change Ahead Of The New Year

Paolo Greco Paolo Greco 30.12.2022 09:01
Analyzing Thursday's trades: GBP/USD on 30M chart GBP/USD was still trading in the horizontal channel on Thursday which is perfectly shown in the chart. The technical picture does not change ahead of the New Year. There are still no fundamental and macroeconomic events so traders have nothing to react to. I expect the pound to fall further but the situation will have to be analyzed next year. There will be plenty of reports next week, especially business activity indexes and data on the labor market and unemployment in the US. Most likely, the flat will end, but at the same time it may persist for a few more weeks. Anyway, beginners should wait for the price to leave the horizontal channel or trade on a bounce from its limits. GBP/USD on M5 chart On the 5-minute chart, you can clearly see that there were two signals yesterday. The price bounced from 1.2064 both times. In the first case, it was down 27 pips, in the second by 20 pips. Thus, in both cases, beginners had to put Stop Loss on short positions. Those were the orders on which both trades were closed. Therefore, there was no profit or loss on Thursday. Take note that this scenario is not the worst since there is a total flat on the market, which means a high probability of false signals that can lead to losses. Trading tips on Friday: On the 30-minute time chart, GBP maintains a downtrend, even though the trend line has lost its relevance. At the same time, take note that the pair has been in the horizontal channel for six days, so there is a high probability that the flat will still persist. On the 5-minute chart, it is recommended to trade at the levels 1.1793, 1.1863-1.1877, 1.1950-1.1957, 1.2008, 1.2064-1.2079, 1.2141, 1.2186-1.2205. As soon as the price passes 20 pips in the right direction, you should set a Stop Loss to breakeven. There are no important events or reports in the UK or US. Thus, there will be nothing to react to and there's still a high probability of a flat. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time. Relevance up to 06:00 2022-12-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331168
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The GBP/JPY Cross-Currency Pair’s Latest Weakness Could Be Linked To The Broad-Based Strength Of The Japanese Yen

TeleTrade Comments TeleTrade Comments 30.12.2022 09:12
GBP/JPY takes offers to refresh intraday low, extends the previous day’s pullback from one-week high. BOJ announced the third day of bond market moves, keeps JPY on the front foot. Mixed headlines surrounding China, fears of risk-negative announcements from UK PM Sunak also weigh on prices. Yields struggle for clear directions and should be eyed for fresh impulse. GBP/JPY renews intraday low around 159.70 as bears keep the reins for the second consecutive day on early Friday. The cross-currency pair’s latest weakness could be linked to the broad-based strength of the Japanese Yen (JPY), as well as fears emanating from the UK, amid a sluggish morning session. It’s worth noting that the Bank of Japan’s (BOJ) third consecutive day of bond market action joins the mixed sentiment to keep the Yen as the market’s favorite. That said, pessimism surrounding China’s Covid conditions and the Ukraine-Russia tussles joining the global recession woes to weigh on the sentiment. Alternatively, the hopes of the peak in the virus numbers in China and the discovery of an anti-Covid pill joins the chatters of no economic slowdown in the US and Europe to keep the markets positive. Also likely to defend the optimists is the US government funding bill worth $1.7 trillion for the fiscal year 2023. The Times’ news suggesting UK Prime Minister’s readiness for halving financial support on energy bills for businesses, amid concerns about the cost, also seemed to have exerted downside pressure on the GBP/JPY prices. “The report comes after British public borrowing during last month hit its highest for any November on record, reflecting the mounting cost of energy subsidies, debt interest and the reversal of an increase in payroll taxes,” per the news. Against this backdrop, US 10-year Treasury yields fade the previous day’s pullback from the six-week high by taking rounds to 3.8% while the S&P 500 Futures print mild losses around 3,865 despite Wall Street’s positive closing. To sum up, the market’s rush toward risk safety and hopes of a hawkish move in 2023 by the BOJ seems to keep the JPY on the front foot and hence the GBP/JPY bears are likely to keep the reins amid a light calendar through the year-end. Technical analysis GBP/JPY bears approach 159.60 support, comprising the one-week-old ascending trend line, after reversing from a fortnight-long resistance line, close to 161.00 by the press time. That said, bearish MACD signals suggest further downside of the cross-currency pair.      
The Price Of USD/JPY Pair Has To Fight With The Resistance Level

The USD/JPY Pair Is Expected To Fall Further

TeleTrade Comments TeleTrade Comments 30.12.2022 09:19
USD/JPY justifies weekly support break to print two-day downtrend. Bears approach eight-month-old horizontal support area before poking the latest multi-month low. Descending trend line from October, 21-DMA restricts immediate upside. USD/JPY drops for the second consecutive day after reversing from a two-month-old descending resistance line, down 0.35% intraday near 132.60 during early Friday. In doing so, the Yen pair also justifies the previous day’s downside break of a one-week-old ascending support line, now resistance around 133.90. That said, the quote is declining towards a horizontal support zone comprising multiple levels marked since April, around 131.50-30. However, the pair’s further declines past 131.30 appear limited due to the sluggish MACD signals. In a case where the USD/JPY breaks the 131.30 support the recent bottom surrounding 130.55, also the lowest level in four months, will be in focus. Also likely to challenge the USD/JPY bears is the August month’s low near 130.40 and the 130.00 round figure, a break of which could quickly drag the quote towards May’s low near 126.35. Alternatively, the immediate support-turned-resistance line, around 133.90, guards short-term USD/JPY recovery. Following that, a downward-sloping resistance line from October 21 and the 21-DMA could challenge the bulls around 134.20 and 135.00 respectively. It’s worth noting, however, that a convergence of the 200-DMA and the 61.8% Fibonacci retracement level of the pair’s May-October upside, near 136.25, appears a tough nut to crack for the USD/JPY buyers. USD/JPY: Daily chart Trend: Further downside expected
Driving Growth: The Resilience of Green Bonds and Shifting Trends in Sustainable Finance

The Indian Rupee (INR) Bulls Are Likely To Display Action Based On The Movement Of The Oil Price

TeleTrade Comments TeleTrade Comments 30.12.2022 09:21
USD/INR has dropped to near 82.70 as investors are adjusting positions after an ease in the risk-off mood. Analysts at Deutsche Bank see inflation above the target of 2% set by the Fed. The Indian Rupee bulls will display action according to the oil price activity ahead. The USD/INR pair is displaying volatile moves in early trade as investors are adjusting positions after an ease in the risk-off mood. The asset has dropped to near 82.70 and is likely to remain on the back foot amid a sheer drop in the US Dollar Index (DXY). The USD Index is hovering near the lower side of the weekly trading range. The asset has auctioned in a range of 103.50-104.60. Investors should brace for a lackluster performance on Friday as the entire trading activity is expected to decline. On Thursday, the risk appetite of the market participants was improved after the equities domain in the United States was delighted with value-buying. Investors rushed to park their funds in S&P500 after a two-day sell-off. An ease in the negative market sentiment favored US Treasury bonds. The 10-year US Treasury yields dropped to 3.82% after a four-day winning streak. The market is edge away from entering into the CY2023 and the street has started talking about inflation projections in the United States economy. Federal Reserve (Fed) chair Jerome Powell and his teammates have worked hard for cooling off the ultra-hot inflation. No doubt, the street has witnessed a sheer drop from the inflation peak of 9.1% but the road to 2% inflation is still out of sight. In the opinion of economists at Deutsche Bank “Headline inflation seems to have already peaked in the United States.” However, it will still be well above the target set by the Fed in 2023. On the Indian front, the Indian Rupee bulls are likely to display action based on the movement of the oil price. The black gold has rebounded after dropping to near $77.00 but is struggling to extend its gains further as a spike in Covid-19 cases in China is displaying short-term pain in the oil demand. It is worth noting that India is one of the leading importers of oil and volatility in oil prices impacts the Indian Rupee.
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The COVID-19 Situation In China Is becoming More And More Serious Therefore The New Zealand Dollar (NZD) Has Witnessed Selling Pressure

TeleTrade Comments TeleTrade Comments 30.12.2022 09:25
NZD/USD has slipped sharply below 0.6320 as the US Dollar Index has shown a recovery move. Market mood is turning cautious as the Covid-19 situation in China is getting vulnerable. Going forward, investors will keep an eye on China’s official PMI data. The NZD/USD pair has dropped to near intraday low at 0.6316 in the Asian session as the US Dollar Index (DXY) has attempted a recovery after dropping to near 103.50. The New Zealand Dollar has witnessed selling pressure as COVID-19 situation in China is getting more vulnerable. The headline of rising deaths from Covid-19 in China has spooked the market mood again. According to UK-based health data firm Airfinity “Around 9,000 people in China are probably dying each day from COVID-19. Also, cumulative deaths in China since Dec. 1 likely reached 100,000 with infections totaling 18.6 million. S&P500 futures are holding the majority of their gains recorded on Thursday, portraying cautious optimism in the global market. At the press time, the USD Index is attempting to extend its rebound move above the crucial hurdle of 103.70. Meanwhile, the 10-year US Treasury yields have recovered their entire morning losses and have scrolled above 3.83%. It seems that investors are shrugging off the release of an increment in initial jobless claims data and are supporting the USD index again. On Thursday, the United States Labor Statistics department reported an increase in jobless claims to 225K led by a pause in the recruitment process by various firms due to a bleak economic outlook. This week, investors will keep an eye on China’s official PMI data, which will release this weekend. As per the projections, the National Bureau of Statistics (NBS) Manufacturing PMI is seen higher at 49.2 vs. the former release of 48.0. A sheer outperformance is expected from the Non-Manufacturing PMI catalyst as the economic data is seen at 51.4 vs. the prior release of 46.7. It is worth noting that New Zealand is one of the leading trading partners of China and the PMI status of the Chinese economy will have a significant impact on the New Zealand Dollar.  
The AUD/USD Pair’s Downside Remains Off The Table

The Bears Of The AUD/USD Pair Struggle To Retake Control

TeleTrade Comments TeleTrade Comments 30.12.2022 09:30
AUD/USD fades bounce off 50-HMA amid failures to cross three-day-old descending resistance line. Looming bear cross on MACD keeps sellers hopeful but 200-HMA is a tough nut to crack for sellers. Bulls need validation from 0.6800 to retake control. AUD/USD snaps a two-day uptrend as it retreats from a short-term downward-sloping resistance line during early Friday. Even so, the sluggish MACD and holiday mood in the market restricts the Aussie pair’s downside and hence the quote remains mildly offered near 0.6770 by the press time. It should be observed that the MACD is likely teasing the bears, despite being sidelined of late, which in turn joins the quote’s failure to cross the immediate hurdle to keep the sellers hopeful. However, the 50-HMA level surrounding 0.6755 restricts the AUD/USD pair’s immediate downside. Should the quote breaks the immediate HMA support, traders will pay attention to the key downside level of 0.6718, comprising the 200-HMA, a break of which could quickly drag the Aussie pair towards the monthly low of 0.6629 marked in the last week. Alternatively, recovery moves need to cross the descending trend line from Wednesday, around 0.6785, to push back the bearish bias. Even so, the weekly top surrounding the 0.6800 round figure acts as an extra filter to the north before welcoming the AUD/USD bulls. Overall, AUD/USD remains sidelined even as the bears struggle to retake control. AUD/USD: Hourly chart Trend: Sidelined
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The Loonie Pair (USD/CAD) Is Displaying A Lackluster Performance In The Face Of Indecision In Global Markets Regarding Inflation Forecasts For 2023

TeleTrade Comments TeleTrade Comments 30.12.2022 09:34
USD/CAD is displaying a sideways profile around 1.3550 as investors are avoiding building positions amid the festive season. Federal Reserve might continue its hawkish policy as the street sees inflation well above 3% in CY2023. The US Dollar witnessed selling pressure after the release of additions in the weekly Initial Jobless Claims. USD/CAD is likely to continue its rangebound structure amid the unavailability of any major economic event. USD/CAD is displaying a sideways performance in the early European session as investors are hesitating in building positions ahead of the long weekend. The Loonie asset is displaying a lackluster performance in a narrow range around 1.3550 amid indecisiveness in the global markets towards inflation projections for CY2023. The risk-perceived currencies are failing to capitalize on the improved risk appetite of investors after Thursday’s action. S&P500 displayed a firmer recovery after investors saw value-buying in the equities domain of the United States. In early Friday, S&P500 futures are holding their Thursday gains but are failing to extend their recovery further. It seems that investors are preferring to go light in CY2023 as volatility could heat up. The US Dollar Index (DXY) is struggling to extend its gains above the immediate resistance of 103.70 after a recovery attempt from 103.50. The USD Index has been oscillating in a bounded range of 103.50-104.60 since Monday. Meanwhile, caution in the market is supporting the 10-year US Treasury yields. The return in 10-year US Treasury bonds is holding above 3.83%. A rise in weekly jobless claims impacted the US Dollar The US Dollar Index witnessed selling pressure on Thursday after the United States Department of Labor (DoL) reported an increase in the number of individuals applying for jobless claims for the very first time. The economic data landed at 225K for the week ending December 23, higher than the former release of 216K. The impact of higher interest rates by the Federal Reserve (Fed) has forced the firms to pause the recruitment process. Firms have halted the employment creation process as the street sees bleak economic growth amid expectations of the continuation of extremely hawkish monetary policy by the Federal Reserve. This led to a surge in jobless claims. Street sees no achievement of the Fed’s 2% inflation target in 2023 In CY2022, the agenda of the Federal Reserve chair Jerome Powell and his teammates has remained the achievement of price stability. Federal Reserve policymakers continuously hiked interest rates to squeeze the supply of the US Dollar into the economy. No doubt, the central bank managed to drag the headline Consumer Price Index (CPI) from its peak of 9.1% but the road to recovery is far from over. Economists at TD Securities are of the view that inflation in the United States will remain well above 3% by the end of Q4 2023. “We look for headline inflation to end the year at a robust 7.1% YoY pace in Q4, but to slow to 3.1% in Q4 2023. We also forecast Core CPI inflation to end the year at a still-high 6.0% but to decelerate to 3.3% in Q4 2023.” Also, in the opinion of economists at Deutsche Bank “Headline inflation seems to have already peaked in the United States.” However, it will still be well above the target set by the Fed in 2023. Oil price struggles to recapture $80.00 China’s Covid-19 status is getting vulnerable each day as the number of infections are rising dramatically.  Also, death numbers are scaling higher as medical facilities are unable to address each infected individual. This has also forced various nations to demand negative Covid reports of arrivals from China in order to safeguard themselves from the pandemic. The street is in a dilemma whether to support oil prices by considering optimism over the reopening of the Chinese economy or to consider the short-term pain due to supply chain disruptions. The oil price has rebounded after dropping to near $77.00 but is struggling to recapture the crucial hurdle of $80.00. It is worth noting that Canada is a leading oil exporter to the United States and higher oil prices might support the Canadian Dollar. USD/CAD technical outlook USD/CAD has shifted its auction profile below the upward-sloping trendline placed from November 16 low at 1.3228 on a four-hour scale. The Loonie asset is hovering below the 200-period Exponential Moving Average (EMA) around 1.3550. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range. A slippage of the momentum oscillator inside the bearish range of 20.00-40.00 will trigger a bearish momentum.
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

EUR/USD Pair Is Trading Above 1.0670, USD/JPY Pair Drop Below 132

Kamila Szypuła Kamila Szypuła 30.12.2022 13:41
As we enter the final trading day of 2022, the rebound in the dollar index can be attributed in part to investor repositioning as markets remain cautious ahead of the long weekend. The lack of data this week left markets fueled by renewed tension between Russia and Ukraine, as well as mixed sentiment around rising Covid numbers in China. EUR/USD The EUR/USD pair in the European session exceeded the level of 1.0680. It is currently trading just below that level - 1.0679 EUR/USD surged towards 1.0700 during European trading hours before pulling back slightly. The renewed weakness of the US dollar on the last trading day of the year seems to be helping the pair stay in the red in the absence of fundamentals. In the absence of high-impact macroeconomic releases, investors are unlikely to take large positions on the last trading day of the year. Data from the euro zone showed Spain's Harmonized Index of Consumer Prices fell to 5.6% on an annualized basis in its preliminary December reading from 6.7% in November. However, these data did not have a noticeable impact on the behavior of the euro against rivals. The ISM Chigao Purchasing Managers Index for December will be the only data to appear in the US Economic Report. GBP/USD The Cable pair is trading at 1.2050 now. GBP/USD managed to climb above 1.2050 early Friday after breaking a two-day streak on Thursday. As trading conditions remain weak on the last trading day of the year, the pair may struggle to make a firm move in either direction. Despite cautious market sentiment, the US dollar is struggling to find demand on Friday and is helping the pair limit their losses. Fears of recession in the UK are likely to limit sterling growth in Q1 2023, especially if the housing market continues to deteriorate. In theory, the impact on the GBP should be negative, with lower housing demand resulting in softer inflation and a more dovish Bank of England (BoE). Read next: TC Energy Corp Has Announced That It Is Aiming To Fully Reactivate The Keystone Oil Pipeline System After The Largest Reported Spill In The Pipeline's History| FXMAG.COM AUD/USD The Aussie pair was heading above 0.68 today and it managed to do so, but failed to maintain the level. At the time of writing, the AUD/USD pair is trading below 0.68 at 0.6794. The Australian dollar is set to fall in 2022, falling for a second consecutive year as the US Federal Reserve's aggressive monetary tightening, China's economic woes and slowing global growth have affected the currency. The Reserve Bank of Australia has also made a radical policy change after committing late last year to keeping the cash rate at a record low of 0.1% in 2022. The RBA has now raised the cash rate to 3.1%, its highest since November 2012, and said it expects further tightening as part of ongoing efforts to bring down inflation. USD/JPY USD/JPY is trading below 132 on the last trading day. In October, the yen fell to a 32-year low of nearly 152 per dollar as the Bank of Japan maintained its ultra-low interest rate policy while the US Federal Reserve began an aggressive monetary policy tightening campaign to curb rising inflation. However, the currency recovered about half of those losses as Japanese authorities intervened in the FX markets and defended the yen in the last quarter of 2022, while the BOJ unexpectedly raised the upper end of its 10-year government bond tolerance range to 0.5% from 0.25 % in December. Source: investing.com, dailyfx.com, finance.yahoo.com
Crude Oil Upward Trend Remains Limited

Prices Of Energy Resources In Europe Have Already Started To Fall, The Picture Of Forex And Crypto Market

XTB Team XTB Team 30.12.2022 14:36
Energy resources: OIL, NATGAS The entire world is heavily dependent on conventional energy sources such as oil petroleum, natural gas or coal, so there is a clear connection between the raw materials energy and inflation. When prices move moderately, producers do not they change react immediately because they can take advantage of economies of scale. The problem occurs in when the price increases several times and the producers' costs have to be passed on to consumers. As we mentioned earlier, the current situation is reminiscent of the 70s of the last century, when the energy crisis led to an inflationary spiral. As then, so now the supply of oil is strongly limited (initially artificially, and now due to problems in the supply chain and lack of appropriate investment in production capacity). It is true that the supply is slowly growing, but the demand recovers much faster, which has led to a huge increase in raw material prices. Oil and natural gas prices in Europe have already started to fall from near historic highs. The question, however, is whether the market is experiencing demand destruction? Stocks of raw materials are at exceptionally low levels, with no greater ones on the horizon investment in the extractive sector, and countries with spare production capacity will take advantage of the current high prices. Therefore, there is a risk of extending the period of highs prices, as it was in the 1970s and in 2011-2014. In addition, when we adjust oil prices for inflation, we can see that after the initial increase at the beginning in the 1970s, the valuation of this raw material remained at a high level until the early 1980s. It is another argument proving that without an adequate increase in supply, high oil prices can stay with us longer. Forex market: EURUSD, USDJPY The recent return of higher and volatile global price dynamics has triggered a surge exchange rate volatility and depreciation of the currencies of countries with the highest inflation rate. In In times of economic uncertainty, investors tend to turn to safe haven currencies (the so-called safe havens of the foreign exchange market), mainly the US dollar. Also and this time it was no different, and the dollar index rebounded from the June 2021 lows by over 20%. Meanwhile, the trade-weighted index (TWI) remains at elevated levels. This index, adjusted for inflation, measures the strength of the US dollar against the currencies of major partners of the United States. We see that the TWI REER USD index has strengthened significantly in recent years, which may indicate that the dollar is overvalued. When it comes to EURUSD, however, the situation is more complicated. In mid-July 2022 euros reached parity with the dollar, falling to its lowest level in 20 years. this fall it was triggered not only by the strength of the US currency, but also because of the crisis as a consequence of the war between Russia and Ukraine. High energy prices in Europe have worsened trading conditions in the euro area, leading to an even greater depreciation of the single currency. There is no indication that energy prices will fall in the near future, but if such a scenario materializes, the euro would have a chance to move away from the parity level. In the case of EURUSD, the market's attention is focused on the weakness of the euro, while in the case of USDJPY monetary policy sets the pace. Since the early 2000s, the Bank of Japan has pursued an ultra-loose policy monetary policy while controlling the bond yield curve. This has not changed even after inflation started to rise. Meanwhile, the Fed turned its stance 180 degrees to strangle inflation through aggressive interest rate hikes. The difference in bond yields is a key factor for this pair, even if the Bank of Japan decides to change its current policy. Cryptocurrencies: BITCOIN, ETHEREUM Cryptocurrencies are still a young asset class. The history of Bitcoin goes back a little over 10 years, a most of the remaining cryptocurrencies (so-called altcoins) were created after 2017, which is why the reactions of the cryptocurrency exchange rate to the increase in the level of inflation are not sufficiently known. from this Therefore, when trying to assess digital asset quotes, it is difficult to rely solely on on historical data. Due to the tendency of investors to buy cryptocurrencies as part of diversifying their exposure to traditional financial markets, as well as the involvement of institutions in this market, begins to be a visible correlation between the reactions of debt-financed companies and the price of Bitcoin. Movements Cryptocurrency rates in response to rising inflation are beginning to resemble stock market reactions, which based on historical data are a bit easier to track and analyze. As a rule, rising inflation is not conducive to the valuation of risky assets and becomes a disadvantage for them burden when central banks decide to tighten monetary policy. Rate hikes interest rates, difficulties in obtaining capital and the rising cost of living in a recessionary environment indicate a decrease in risk sentiment and decreases in the valuation of risky assets. having it in mind, the cryptocurrency market will not be helped by rising inflation, which prompts banks to raise Stop. Therefore, even if the trend of cryptocurrency adoption continues - and they are noticeable signals that this is the case - movements on the charts of individual cryptocurrencies may resemble those of US100, only on a larger scale. Five key facts about cryptocurrency adoption BlackRock creates a bitcoin trust fund for US investors institutional and begins cooperation with Coinbase JP Morgan creates an open living room inside the Decentraland metaverse and explores the possibilities blockchain technology Ethereum processed 1.45 million smart contracts in Q1 2022 vs. 1.16 million in Q4 2021 (up 25%) NFT popularity is growing: 7.84 million transactions in OpenSea in Q1 2022 vs. 4.85 million carried out in Q4 2021 (up 61.6%) 46 million Americans own Bitcoins and 1 billion people will use cryptocurrencies in over the next 4 years
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Worst Year Since The Brexit For The British Pound (GBP) But For The US Dollar Look Like The Best Since 2015

Kamila Szypuła Kamila Szypuła 31.12.2022 17:42
The Fed and central banks around the world have been raising interest rates to fight soaring inflation stemming from supply chain problems related to the COVID-19 pandemic and an energy crisis related to oil producer Russia's Ukraine invasion. As a result, all three major averages registered their biggest one-year percentage declines since the 2008 financial crisis. Along with domestic worries, investors around the world have also been monitoring China, the world's second biggest economy, for signs of weakness. The dollar was on track to record its best year since 2015 on Friday on the last trading day of the year, dominated by Federal Reserve rate hikes and fears of a sharp slowdown in global growth. Since March, the Fed has raised interest rates by a total of 425 basis points in an attempt to stem rising inflation. The last trading week of the year is behind us. How the major currency pairs fared. GBP/USD The cable pair ended the last week of the year in bullish sentiment. The week the GBP/USD pair started trading below $1.21 at 1.2050. The pair traded mostly in the 1.20-1.21 range. The highest level of the pair reached the level above the upper limit of the crossbody, i.e. 1.2113. The highest was at 1.2003 and came before the weekly high. The British pound ended 2022 nearly 11% lower at $1.2, its worst year since the Brexit vote in 2016, amid a general cautious mood regarding the economic outlook for 2023, political uncertainty, and as a hawkish Fed sent the USD higher. The pound recovered since then after Rishi Sunak became the new prime minister but remains under heavy pressure, as the recession is looming while the Bank of England appears more dovish compared with its peers. Read next: ESG - Business Management For The Common Good| FXMAG.COM  EUR/USD EUR/USD traded above 1.06 but below 1.07. The pair started the week at 1.0630 and ended at 1.0712. The highest level reached at the end of the trade exceeding 1.07. The lowest level was still above 1.06 - 1.0611. AUD/USD The Australian pair, similarly to the euro pair, managed to break the upper level of resistance, which was at the level of 0.67. Thus, the couple ended the week on the highest level. The lowest level was at the beginning of the week (0.6699). Then the pair received support from information from China and thus grew above 0.67. USD/JPY The USD/JPY pair traded mostly around 132. It peaked above 132 at 134.420 and the low was below 131 (130.8210). The pair ended the last week of the year at 131.1050 The Bank of Japan (BOJ) is considering raising its January inflation forecast to show price growth close to its 2% target for fiscal years 2023 and 2024, the Nikkei reported on Saturday. This month, the BOJ launches an extension of its 10-year yield caps, which is officially intended to straighten out bond market disruptions, but some analysts see them as a way out of ultra-loose monetary easing. Japan's core consumer prices excluding fresh food in November hit their highest since 1981, according to last week's government data. The BOJ will release its latest quarterly growth and price forecasts after its next policy meeting on Jan. 17-18. Source: finance.yahoo.com, investing.com, dailyfx.com
Growth Of The USD/JPY Pair Is Hampered By Resistance

The USD/JPY Pair May Call For Renewed Upside Progress

Torben Melsted Torben Melsted 02.01.2023 08:00
USD/JPY only needs a small dip below 130.56 to complete wave A and set the stage for a temporary rally in wave B towards resistance in the 141.25 - 143.78 area before wave C takes over for a decline toward 113.90. This will likely complete an X-wave and call for renewed upside progress in USD/JPY. That said, we will as always take baby steps and start by looking for the small dip to just below 130.56 to complete wave A and set the counter rally in wave B towards 141.25.   Relevance up to 06:00 2023-01-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306962
The EUR/USD Pair Is Showing A Potential For Bearish Drop

The EUR/USD Pair Is Showing A Potential For Bearish Drop

Oscar Ton Oscar Ton 02.01.2023 08:05
Technical outlook: EURUSD has rallied through 1.0700, inching closer to the recent swing high at 1.0736. The single currency pair is seen to be trading close to 1.0700 at this point in writing and might test the 1.0736-50 zone before reversing lower again. Prices need to retrace at least towards 1.0000-50 before finding support again. The instrument is looking lower from here in the near term. EURUSD also seems to have most likely completed its larger-degree counter-trend rally, which began from the 0.9535 lows in September 2022. The three-wave rally has further stalled at its 18 months old resistance trend line and the Fibonacci 0.382 retracement of its drop between 1.2266 and 0.9535 as seen on the daily chart here. If the above structure holds well, prices would resume lower from here and drag below 0.9535 in the next several weeks. Alternatively, if EUR has carved a meaningful bottom around 0.9535 and is following an uptrend, prices might resume higher again from the 1.0000-50 zone. Either way, we expect lower prices in the near term. Trading idea: A potential bearish drop against 1.0750. Good luck!   Relevance up to 06:00 2023-01-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306968
Analysis Of The Euro To US Dollar Pair Situation - 30.01.2023

The Euro (EUR) Failed To Correct Against The Upward Movement

Paolo Greco Paolo Greco 02.01.2023 08:17
M5 chart of EUR/USD EUR/USD continued to grow in a sluggish manner during the last trading day of the New Year, but in general the pair's movement in recent weeks still looks like a flat. The euro failed to correct against the upward movement of the last few months, despite the fact that there were plenty of opportunities to do so. So we go into the new year with the same set of factors and the state of the market mood. At this rate, the single currency may continue to rise this week, because the market simply refuses to sell the euro and buy the dollar right now. We have repeatedly talked about why the euro should fall and for example, the pound corrected by nearly 500 points late last year. But if the market refuses to sell, there can be no downward movement. There were several trading signals on Friday, December 30. Traders had the 1.0640-1.0669 area, within which there were two more levels and lines. Therefore, all three buy signals were formed when the price bounced or crossed the entire area, rather than individual price levels. In each of the three cases, the price went up at least 20 pips so traders could and should have put the Stop Loss to Breakeven. Consequently, there was no loss on any of the open positions (if traders opened them on the last trading day of the year), but it is unlikely that they also managed to make profit on them. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, non-commercial traders opened 2,700 long positions, whereas the number of short positions fell by 1,100. Thus, the net positions rose by 3,800. The number of long positions is 146,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 41,000 (685,000 vs. 644,000). H1 chart of EUR/USD EUR/USD is still in a high position on the one-hour chart, and is still in a total flat. Lines of the Ichimoku indicator have already merged with each other and have lost meaning. Since the euro is inclined to rise, we have moved the Ichimoku lines to their real price values, but the price can cross them easily and freely several times a day. On Monday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, as well as Senkou Span B (1.0654) and Kijun Sen (1.0660). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 2, the EU will release its manufacturing activity report for December (final value). I don't expect a significant reaction from the market. The flat will likely persist. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate     Relevance up to 06:00 2023-01-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331255
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The Pound (GBP) Has Completed Its Correction And Moved Into A Flat

Paolo Greco Paolo Greco 02.01.2023 08:21
M5 chart of GBP/USD GBP/USD traded between 1.2007 and 1.2106 on Friday. Thus, while the euro is trying to continue its upward movement, the pound has completed its correction and moved into a flat. The fact that both major currency pairs are moving in completely different directions right now is a bit surprising since there are currently no fundamental and macroeconomic backgrounds. Nevertheless, it is the holiday period, so you shouldn't be surprised by illogical and non-standard movements. You could say that both pairs are in a flat right now. So let's just wait for the flat to end because we will finally receive fundamental and macroeconomic data this week. But it will be closer to the end of the week. There were quite a lot of trading signals on Friday. If not for the Kijun-sen line exactly in the middle of the 1.2007-1.2106 horizontal channel, everything would have been fine, because it would be possible to trade on a pullback from these levels. But I also warned you that Ichimoku indicator lines lose their power during flat conditions so the price can cross them 10 times a day. And so it happened on Friday. The price bounced from the critical line twice during the European session. In the first case, it was 20 pips down, so a Stop Loss should have been set to Breakeven. In the second case, the price reached 1.2007, so the position closed with profit of about 25 points. The rebound from 1.2007 was a buy signal and it should have been worked out too. Literally, within an hour, the pair rose to 1.2106 and rebounded from it, and so traders could earn 70 pips more. The rebound from 1.2106 should have worked with a short position as well, and the price almost hit 1.2007 again. But it didn't work out and the price returned to the area above the critical line. However, this trade also closed in profit, so traders could gain at least 100 pips on the last trading day of 2022. COT report The latest COT report showed that bearish sentiment had weakened. During the given period, non-commercial traders opened 5,300 long positions and as many as 10,600 short positions. Thus, the net position fell by about 5,300. This figure has been on the rise for several months, and the sentiment may become bullish in the near future. Although the pound has grown against the dollar for the last few weeks, it is still difficult to answer why it keeps rising. On the other hand, it could fall in the near future (in the mid-term prospect) because it still needs a correction. In general, in recent months the COT reports correspond to the pound's movements so there shouldn't be any questions. Since the net position is not even bullish yet, buying may continue for a few months to come. Non-commercial traders now hold 40,600,000 long positions and 51,500 short ones. I am still skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD maintains the bearish sentiment but is also in the horizontal channel. The lines of the Ichimoku indicator have already lost their strength because the pair can cross them 5 times a day in a flat. Now we have to wait for the flat to end or trade for a pullback from the limits of the horizontal channel. On January 2, the pair may trade at the following levels: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259. Senkou Span B (1.2218) and Kijun Sen (1.2063) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. There are no important events in the UK and the US, so there will be nothing to react to for today. I believe that the flat may persist for a few more days. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 06:00 2023-01-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331257
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The NZD/USD Pair Is Likely To Extend The Latest Pullback

TeleTrade Comments TeleTrade Comments 02.01.2023 08:32
NZD/USD prints mild losses around a two-week high, justifies the previous day’s bearish candlestick formation. Previous support line from October, bearish MACD signals also keeps sellers hopeful. 200-day EMA holds the key to Kiwi bear’s conviction. NZD/USD holds lower ground near the intraday bottom of 0.6329 during the mid-Asian session on a sluggish Monday. The Kiwi pair’s latest inaction could be linked to the holidays in multiple markets, including New Zealand. Even so, the quote prints mild losses while justifying the previous day’s bearish Doji candlestick. Also favoring the NZD/USD bears are the bearish MACD signals and the pair’s sustained trading below the previous support line from October 13, now resistance around 0.6400. As a result, the Kiwi pair is likely to extend the latest weakness toward the 200-day Exponential Moving Average (EMA) support surrounding 0.6235. During the fall, the 0.6300 round figure may act as an intermediate halt whereas the late November swing low around 0.6155 could challenge the NZD/USD bears afterward. On the contrary, the Kiwi pair’s successful trading above 0.6400 support-turned-resistance could propel the quote toward the previous monthly high near 0.6515. It’s worth noting that the NZD/USD pair’s sustained run-up beyond 0.6515 enables the bulls to aim for a June 2022 high of 0.6575. Overall, NZD/USD is likely to extend the latest pullback but the downside room appears limited. NZD/USD: Daily chart Trend: Limited downside expected  
The USD/CAD Pair Is Likely To Remain On The Bear’s Radar

The USD/CAD Pair Is Likely To Remain On The Bear’s Radar

TeleTrade Comments TeleTrade Comments 02.01.2023 08:36
USD/CAD reverses from intraday low, probes the previous daily loss. Convergence of 200-SMA, three-day-old ascending trend line restricts immediate downside. Bulls remain off the table unless crossing the previous support line from November. Downbeat RSI line, sustained trading below key trend line, SMA favor sellers. USD/CAD takes a U-turn from the intraday low while picking up bids to 1.3560 amid the holiday-thinned trading session on Monday. In doing so, the Loonie pair bounces off the convergence of the 200-SMA and an upward-sloping support line from the last Wednesday. That said, the quote’s failure to stay beyond the support-turned-resistance line from November 15, following the previous week’s bounce off the 200-SMA, joins sustained trading below the 50-SMA to keep USD/CAD sellers hopeful. As a result, the Loonie pair is likely to conquer the 1.3520 support level and aim for the 1.3500 round figure. However, the double bottom around 1.3485, marked in the last week, will be crucial for the USD/CAD bears to keep the reins. Following that, the previous monthly low of around 1.3385 could lure the pair sellers ahead of November’s bottom surrounding 1.3225. Meanwhile, the pair’s recovery moves could aim for the weekly resistance line, around 1.3570, before poking the 50-SMA level surrounding 1.3580. Though, successful trading beyond the 1.5-month-old support-turned-resistance line, close to 1.3610 at the latest, becomes necessary for the USD/CAD bulls to retake control. Overall, USD/CAD is likely to remain on the bear’s radar unless even as the downside room is limited. USD/CAD: Four-hour chart Trend: Further downside expected    
Analysis Of The EUR/JPY Pair Movement

The USD/JPY Pair Is Hoping For A Continuation Of Weakness

TeleTrade Comments TeleTrade Comments 02.01.2023 08:40
USD/JPY is expected to surrender the 131.00 support as the USD Index has faced immense pressure. The FOMC minutes will provide a detailed explanation of December’s monetary policy decision. The BOJ is considering raising its inflation targets to 2% for CY2023 and 2024. The USD/JPY pair is hovering around 131.00 after a less-confident rebound from 130.78 as settled on Friday. The asset is hoping for a continuation of weakness, which might drag the asset again below the immediate support of 131.00. The major is likely to face significant heat amid weakness in the US Dollar Index (DXY). The USD Index remained in the grip of bears on Friday after surrendering its trading range of 103.47-104.57. The consolidation of two weeks displayed a breakdown as investors poured liquidity into risk-perceived currencies led by declining inflation expectations for CY2023. Analysts at Natixis cited the monetary policy expression by the Federal Reserve (Fed) is a restrictive one as the mortgage rate is higher than nominal wage growth in the United States economy. While S&P500 remained choppy on Friday as the trading activity was trimmed dramatically amid a festive market mood but ended on a subdued note. The 10-year US Treasury yields advanced further to 3.88% as the demand for government bonds dropped. This week, the critical event that will support the USD Index in gauging a decisive move will be the release of the Federal Open Market Committee (FOMC) minutes. The FOMC minutes will provide a detailed explanation of December’s monetary policy decision. Apart from that, the market participants will keep an eye on cues about economic projections and likely monetary policy action by Fed chair Jerome Powell ahead. On the Tokyo front, clear inflation projections for the next two years by the Bank of Japan (BOJ) are supporting the Japanese Yen. Nikkei reported on Saturday that the BOJ is considering raising its inflation forecasts in January to show price growth close to its 2% target in fiscal 2023 and 2024
Rates Spark: Action at Both Ends of the Curve - US 10yr Treasury Yield and European Rates

The USD/INR Market Participants Seem Still Busy Enjoying New Year Celebrations

TeleTrade Comments TeleTrade Comments 02.01.2023 08:42
USD/INR is oscillating in a tight range for the past two weeks amid the absence of potential triggers. The 20-and 50-EMAs are on the verge of delivering a bearish crossover around 82.37. A break inside the bearish range by the RSI (14) will activate bearish momentum. The USD/INR pair is displaying some volatility in its opening trade on Monday after the festive mood. The asset is oscillating in the midst of the two-week-long trading range and is likely to continue further as the market participants seem still busy enjoying New Year celebrations. Meanwhile, the US Dollar Index (DXY) dropped sharply to near 15-day low of around 103.00 on Friday amid a recovery in the risk-appetite theme. The 10-year US Treasury yields climbed to 3.88% amid obscurity in the overall risk theme. On a four-hour scale, the Indian Rupee asset is oscillating in a range of 82.35-82.96 for the past two weeks. This could be termed as an inventory adjustment, however, it is difficult to tag it as an accumulation or a distribution. The 20-and 50-period Exponential Moving Averages (EMAs) are on the verge of delivering a bearish crossover around 82.37, which might trigger a short-term downtrend. While, the 200-EMA at 82.33 is sloping north, which indicates that the upside trend is still solid. The Relative Strength Index (RSI) (14) is on the verge of delivering a break into the bearish range of 20.00-40.00, which might trigger a bearish momentum. Should the asset break below December 13 low around 82.35, the Indian rupee bulls will drag the asset towards December 9 low around 82.00 followed by November 25 low at 81.42. On the contrary, a breakout of the consolidation above the round-level resistance of 83.00 will expose the asset to hit its all-time high at 83.29. A breach of the latter will send the major into unchartered territory. USD/INR four-hour chart  
The USD/IDR Pair Is Expected A Further Downside Movement

The USD/IDR Had A Successful Trading Beyond A Five-Month-Old Ascending Support Line

TeleTrade Comments TeleTrade Comments 02.01.2023 08:49
USD/IDR picks up bids to snap two-day downtrend as US Dollar rebounds during holiday-thinned markets. Indonesia Inflation, S&P Global PMI came in firmer for December, President Widodo expects 2023 growth above 5.0%. Markets remain inactive but doubts surrounding China seem to weigh on IDR. US PMIs, FOMC Meeting Minutes and the US employment report will be crucial to watch for clear directions. USD/IDR prints to mild gains around $15,560, following a two-day downtrend, as US Dollar rebounds amid a sluggish trading day. In doing so, the Indonesia Rupiah (IDR) pair ignores downbeat Indonesia data. That said, Indonesia's Inflation rose by 5.51% YoY versus 5.39% previous whereas the MoM figures grew by 0.66% compared to 0.09% prior release. It’s worth noting that Core Inflation grew by 3.36% YoY against 3.3% previous readings. Furthermore, Indonesia S&P Global PMI for December also improved to 50.9 versus 50.3. Earlier in the day, Indonesia President Joko Widodo mentioned, per Reuters, that he expects 2023 growth above 5.0%. It should be observed that the latest Indonesia Inflation figures are above the Bank Indonesia (BI) target range between 2.0% and 4.0%, which in turn should have propelled the IDR. However, economic fears surrounding China, as well as holidays in major markets seemed to have allowed the USD/IDR bears to take a breather. Doubts over China’s economic recovery, due to the Covid outbreak, join the downbeat comments from the International Monetary Fund’s (IMF) Managing Director Kristalina Georgieva concerning Beijing, seem to underpin the US Dollar rebound. Even so, the latest headlines from Reuters seem to challenge the IDR bears by pushing back pessimism surrounding China. “Some people in China's key cities of Beijing, Shanghai and Wuhan braved the cold and a spike in COVID-19 infections to return to regular activity on Monday, confident of a boost to the economy as more recover from infections,” said Reuters. Given the light calendar and off in multiple markets, not to forget recently mixed signals surrounding China, USD/IDR is likely to remain firmer. However, this week’s activity data from the US, Minutes of the latest Federal Open Market Committee (FOMC) meeting and December month employment numbers are crucial for clear directions. Technical analysis A successful trading beyond a five-month-old ascending support line, currently around $15,455, keeps USD/IDR buyers hopeful of challenging November 2022 peak of $15,821.      
The Downside For The AUD/USD Pair Is Likely To Remain Cushioned

The Australian Dollar (AUD) Managed To Remain In A Positive Trajectory

TeleTrade Comments TeleTrade Comments 02.01.2023 08:54
AUD/USD is aiming to recapture the 0.6850 barrier as US Dollar Index has shifted into a bearish trajectory. Higher interest rate hikes by the Federal Reserve might impact the ISM Manufacturing PMI. The release of the FOMC minutes on Thursday will provide a detailed explanation of December’s policy. AUD/USD is hoping for a continuation of a six-day winning streak after sustaining above 0.6800. AUD/USD settled the last trading session of CY2022 on a promising note after the US Dollar Index (DXY) faced immense pressure. The Aussie asset continued its winning spree for the sixth day despite less trading activity due to the festive week. Usually, the overall trading activity gets reduced sharply amid a holiday-truncated week as investors prefer to save themselves from unexpected wild gyrations. The Australian Dollar managed to remain in a positive trajectory despite the vulnerable Covid-19 situation in China. Covid-19 cases have spiked sharply and the situation is beyond the control of medical facilities. This has triggered short-term pain in the extent of economic activities. Risk-perceived assets like S&P500 ended 2022 on a cautious note as analysts have mixed responses over economic projections. On contrary, the risk-sensitive currencies witnessed firmer demand from the market participants. The US Dollar Index (DXY) delivered a downside break of the consolidation formed in a 103.37-104.57 range. While the return on 10-year US Treasury bonds continued their strength and rose to near 3.88%. US ISM PMI seems crucial amid higher interest rates by the Federal Reserve Investors are keenly waiting for the release of the United States ISM Manufacturing PMI data, which will release on Wednesday. It is crucial to understand the change in the extent of economic activities as the Federal Reserve is continuously hiking interest rates. In December’s monetary policy meeting, Fed chair Jerome Powell hiked interest rates by 50 basis points (bps) to 4.25-4.50%. This has compelled firms to skip their expansion plans as interest obligations could be extremely higher in the current period of time. According to the estimates, the US ISM Manufacturing PMI data is expected to improve to 49.6 from the former release of 49.0. Apart from that, investors will focus on New Orders Index data that provide cues about the forward demand in the United States economy. The economic data is seen higher at 48.1 vs. the former release of 47.2. Federal Open Market Committee hogs limelight This week, the event of Federal Open Market Committee (FOMC) minutes will remain in the spotlight. The release of the FOMC minutes on Thursday will provide a detailed explanation of December’s monetary policy decision. Apart from that, the market participants will keep an eye on cues about economic projections and likely monetary policy action by Fed chair Jerome Powell ahead. A scrutiny of Federal Reserve chair Jerome Powell’s speech in December’s monetary policy meeting clears that the central bank sees interest rate peak around 5.1%. Considering opinions from various Federal Reserve policymakers, the central bank will keep interest rates at their peak and continue for the entire CY2023 to achieve price stability. Caixin Manufacturing PMI seems crucial amid China’s vulnerable Covid situation The Chinese economy has attracted a significant decline in economic projections by think tanks after adopting a sheer pace in reopening the economy. After a firm protest by households for the rollback of lockdown restrictions, it seems necessary to check out the deviation in the figures from the prior release. As per the consensus, the Caixin Manufacturing PMI data is expected to drop marginally to 49.3 from the prior release of 49.4. Observation from the Chinese official Manufacturing PMI shows a downbeat expression. Official China’s Manufacturing PMI data dropped to 47.0 vs. the expectations of 49.2 and the former release of 48.0. AUD/USD technical outlook On a four-hour scale, the Aussie asset is auctioning in a Rising Channel chart pattern, which is highly neutral as it has formed after a sell-off move from December 13 high around 0.6900. The round-level resistance of 0.6800 has remained a critical barrier for the Australian Dollar for the past 15 trading sessions. A recovery move in the Aussie asset has pushed it above the 20-period Exponential Moving Average (EMA) around 0.6747. Also, the 200-EMA at 0.6700 is still solid, which indicates that the long-term trend is still bullish. The Relative Strength Index (RSI) (14) is struggling to shift into the bullish range of 60.00-80.00. An occurrence of the same will trigger bullish momentum
Technical Outlook Of The EUR/JPY Pair Movement In Short Term

The EUR/JPY Pair's Investors Got Cautionary Ahead Of The Release Of The German HICP

TeleTrade Comments TeleTrade Comments 02.01.2023 08:56
EUR/JPY is likely to drop further to near 139.00 as investors are cautious about Euro ahead of German inflation. Rising wage growth is infusing fresh blood into the Eurozone inflation. The BOJ has raised inflation targets substantially for CY2023 and 2024. The EUR/JPY pair dropped to the psychological support of 140.00 as investors got cautionary ahead of the release of the German Harmonized Index of Consumer Prices (HICP), which will release on Tuesday. The cross dropped sharply late Friday as investors poured funds into the Japanese Yen led by the bond-buying program from the Bank of Japan (BOJ) last week. The Euro is likely to witness a power-pack action after the release of the German HICP. As per the projections, the inflation indicator is seen higher at 11.8% vs. the former release of 11.3%. Lately, European Central Bank (ECB) President Christine Lagarde cited the rising wage rate as responsible for the continuous escalation of inflationary pressures. ECB President cited that the central bank must prevent this from adding to already high inflation, as reported by Reuters. Meanwhile, analysts at Natixis believe that “In the Eurozone, the real long-term interest rate is well below potential growth, and the mortgage rate is lower than nominal wage growth; monetary policy is therefore completely expansionary.” Apart from the German Inflation data, investors will also focus on German Unemployment data. The Unemployment Change (Dec) is expected to escalate to 27K against the former release of 17K. While the jobless rate might trim to 5.5% from the former release of 5.6%. On the Tokyo front, the higher inflation forecast by the Bank of Japan (BOJ) is supporting the Japanese Yen bulls. Nikkei reported that the BOJ is considering raising its inflation forecasts in January to show price growth close to its 2% target in fiscal 2023 and 2024. While the core Consumer Price Index (CPI) is seen rising around 3% in fiscal 2022, between 1.6% and 2% in fiscal 2023, and nearly 2% in fiscal 2024
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD Pair Had A Chance For The Upside Movement

Peter Jacimovic Peter Jacimovic 02.01.2023 10:26
Technical analysis: EUR/USD has been trading downside this morning but I found rejection of the key support zone, which is sign that there is chance for the upside movement. Trading recommendation: Due to the rejection of the rising trend-line and support zone at the price of 1.0665, I see potential for the upside movement towards upside references... Watch for the potential buying opportunities on the intraday dips with the upside objectives at the price of 1.0710 and 1.0735 RSI oscillator is showing oversold condition, which is good sign for the further rally... Key support is set at the price of 1.0665 Relevance up to 09:00 2023-01-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306992
Navigating Adobe's Earnings with Options: Opportunities and Risks for Investors

Saxo Bank Podcast: The Summary Of The End Of 2022 In The Markets

Saxo Bank Saxo Bank 02.01.2023 10:57
Summary:  Today, we look at how markets closed last year, noting the weakening of the US dollar in to year-end even as US treasury yields backed up into year end. Despite those higher yields, USDJPY trades near multi-month lows in anticipation of the Bank of Japan and the Fed moving in opposite directions with their policy for the balance of this year. Elsewhere, we dive into commodity positioning and the energy market as mild weather continues to drive gas and power prices down in Europe while crude oil actually rallied. A look at energy stories to track this year and more also on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: Podcast: First weeks of a New Year often pivotal | Saxo Group (home.saxo)
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The EUR/USD Pair Trading Idea By Analytical Expert Of InstaForex

InstaForex Analysis InstaForex Analysis 02.01.2023 12:17
The last trading day of 2022 closed with good trades, which received a negative reaction at the end of the Asian session. This is a recurring phenomenon when a year ends and another one starts. I propose a downward trading idea along the lines of: In fact, there is a three-wave pattern (ABC) in which wave A represents the bearish initiative during the Asian session. I suggest you consider short positions with a pullback of 50% Fibo according to what is shown above. The risks are limited to 1.07130. Profit should be locked in at the breakdown of 1.06355, 1.05700 and 1.04400. This trading idea is based on the "Price Action" and "Stop hunting" methods. Good luck! Don't forget to control the risks. Relevance up to 09:00 2023-01-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331285
The USD/JPY Price Reversed From The Lower Limit

The Japanese Yen (JPY) Started 2023 With Modest Gains

InstaForex Analysis InstaForex Analysis 02.01.2023 12:27
The yen started 2023 with modest gains on Monday as traders weighed the risk of further technical strength amid thin holiday trading. The Japanese currency rose 0.3% to 130.77 per dollar in early trading in Tokyo. A close below the dollar-yen's August low of 130.41 would open up the door for further declines in the pair, according to chart watchers. Some investors were opening small short-dollar positions in case a break occurs in the absence of normal market liquidity, said some Asia-based currency traders familiar with the transactions who asked not to be named because they were not authorized to speak publicly. The yen is up about 16% from its October low amid government intervention, hopes for slowing US rate hikes and speculation about a possible policy shift from the Bank of Japan this year. The BOJ's unexpected December decision to tweak its yield curve control parameters is seen by many as a sign that its ultra-easy monetary policy might soon be coming to an end. Read next: Twitter Did Not Pay $136,260 Rent, Microsoft Reported Its Worst Quarterly Results In Years| FXMAG.COM Relevance up to 09:00 2023-01-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331287
The Commodities Feed: Oil maintains positive momentum

COT: Bullish Bets Across All Five Crude Oil And Fuel Products Rose

Saxo Bank Saxo Bank 02.01.2023 12:36
Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to Tuesday, December 27. A week that saw speculators showing a continued and broad interest in adding exposure to commodities, led by oil, gold and corn. The dollar short extended further as the euro long reached a 23-month high Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities while in forex we use the broader measure called non-commercial. Link to latest report What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming   Financial Markets Daily Quick TakeSaxo Market Call Daily Podcast This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to Tuesday, December 27. A week that despite seeing activity grind to a near halt ahead of yearend saw speculators showing a continued interest in adding exposure to commodities, led by oil, gold and corn, while the yield on 10-year US Treasuries climbed. Developments both driven by an improved outlook for demand in China as the economy reopens following months of lockdown restrictions. The Nasdaq dropped 2.3% as it headed towards a 33% annual slump while continued selling of the dollar primarily benefitted the euro and the Japanese yen. Commodities The Bloomberg commodity index traded higher by 1.3% during the reporting week as it headed for another strong yearly gain, not least driven by tight markets keeping most futures contracts in a state of backwardation. While the Bloomberg Spot index ‘only’ delivered a 6.8% return last year, the tightness and with that elevated backwardations especially during the first half of the year helped drive the BBG Total Return index, which included the positive carry of selling (rolling) an expiring contract at a higher price than where the next month was bought, to an annual return of 16%. During the reporting week all but one of the 24 major commodity futures tracked in this saw net buying, resulting in the combined net long rising by 16% to 1.4 million lots, a six-month high. Two-thirds of the increase was driven by fresh longs being added while the remaining third was driven by traders cutting back on short positions. With all sectors getting bought with natural gas the only exception, the driver behind these developments has to be found in overall macroeconomic developments, most notably the weaker dollar and emerging optimism about the demand outlook in China.   Energy Bullish bets across all five crude oil and fuel products rose, driven by a combination of fresh longs being added and reduced short positions. Biggest change was seen in Brent where a 44% jump, the biggest in 17 months, lifted the net long to 144k lots, a seven-week high. The continued collapse in natural gas, despite the pre-Christmas winter freeze, helped boost the net short by 63% to 59k.Crude oil futures ended a volatile 2022 close to unchanged after having traded within the widest range since 2008. Another volatile year undoubtedly lies ahead with multiple uncertainties still impacting supply and demand. The two biggest that potentially will weigh against each other in the short term remain the prospect for a recovery in Chinese demand being offset by worries about a global economic slowdown. Covid fears, inflation fighting central banks, lack of investments into the discovery of future supply, labour shortages and sanctions against Russia will also play its part in the coming months. Metals   The gold long reached 67.3k contracts, and highest since early June, primarily driven by short sellers scaling back exposure in frustration over the yellow metals ability to weather a fresh rise in US bond yields. While gold has yet to make a decisive break to the upside the sentiment has nevertheless changed from a sell-into-strength to a buy-into-weakness market.Having closed 2022 near unchanged despite massive headwinds from a stronger dollar and surging treasury yields, the outlook for 2023 looks more price friendly with recession and stock market valuation risks, an eventual peak in central bank rates combined with the risk of inflation not returning to the expected sub-3% level by yearend all adding support. In addition, the de-dollarization seen by several central banks last year, when a record amount of gold was bought, look set to continue, thereby providing a soft floor under the market. As always, the dollar and yield movements will be a key focus while in the short term the market will look ahead to Wednesday’s FOMC minutes and Friday’s US job report.  Read next:Twitter Did Not Pay $136,260 Rent, Microsoft Reported Its Worst Quarterly Results In Years| FXMAG.COM Agriculture The prospect of a reopening in China giving demand a boost helped drive continued demand for key crops with speculators raising bullish bets across the six main grain and soy contracts to a four-week high at 429k contracts, well below the April peak at 819k contracts when panic buying in the aftermath of the Russian invasion of Ukraine saw prices surge higher. The change was primarily driven by a 40% boost to the corn net long to 159k contracts while the soymeal long reached 130k contracts, just shy of the 2018 record at 134k. In softs, the sugar net long jumped to 258k contracts to a 16-month high and not far from the peaks in 2016 (286k) and 2021 (270k) which both ended up signaling months of subsequent selling. The cocoa position flipped back to a small net long after 19k contracts were added in a week that saw the price jump 5.4%.   Forex Speculators was leaving 2022 behind holding the biggest dollar short since July 2021. Against nine IMM futures and the Dollar Index, the gross dollar short reached $7.4 billion with a $19.6 billion equivalent long in the euro being partly offset by short, albeit reduced, positions in JPY, AUD, CAD and MXN. The additional length being added to the euro long occurred ahead of Thursday’s Golden Cross when the 50-day simple moving average crossed above the 200-day. The 3% increase lifted the net long to a 23-month high at 146k contracts.    Source:COT: Funds loaded up on commodities ahead of yearend | Saxo Group (home.saxo)
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

FX: The US Dollar And Sterling (GBP) Starting Off The Year In Worst Shape

Saxo Bank Saxo Bank 02.01.2023 14:08
Summary:  The year is starting off with the US dollar on its back foot even as US treasury yields rose into year end as the market continues to believe that we are nearing the end of the Fed rate hike cycle, with easing to follow, while the ECB has grown increasingly hawkish and the Bank of Japan is seen further adjusting its policy mix under new leadership from early Q2. Will the first key data of 2023 on Friday play well with the market’s strong convictions? Today's Saxo Market Call podcast.Today's Market Quick Take from the Saxo Strategy Team FX Trading focus: USD stumbles into the New Year, with sterling also on its back foot. The JPY has risen to the top of the heap on the anticipation of a further shift in BoJ policy after Governor Kuroda’s exit in early April. Even with US yields backing up into year – particularly at the longer end of the curve – the market continues to express view is that the Fed is set for peak policy rates at the March or May FOMC meeting, followed by eventual cuts as soon as Q4. This has been the case for some time, with the only new information available in the last days of 2022 a particularly strong US Consumer Confidence reading for December that is rather out of synch with an anticipated dip into recession in the US. End-of-quarter and end-of-year flows may have been behind the surge in treasury yields and the weakening of the greenback, so we will need at least this week for a sense of how things are shaping up, and the most interesting test of the market’s conviction would be another batch of stronger than expected jobs and especially earnings data and another strong ISM Services print this Friday. Another important factor for the US dollar in the opening weeks to a couple of months of this year is the debt ceiling fight and how much brinksmanship the weak GOP majority in the US House is willing to engage in. As the ceiling approaches, the US Treasury runs down its general account with the Fed, currently at $400+ billion and capable of being run down to $100 billion or less, which is a net boost to USD liquidity. Once the ceiling is inevitably raised, with or without concessions from the Biden administration, the opposite effect swings into gear as the Treasury then builds its account again, sucking liquidity out of the market. EUR and especially JPY strength. The drivers (and some of the irony) of sharp JPY strength are discussed with the look at the USDJPY chart below. The driver of a strong euro into year-end was ECB President Lagarde finally getting religion on the inflation fight here very late in the cycle. The strongest evidence of how the market sees a divergence in the Fed vs. ECB forward is in something like the far forward 3-month short-term-interest rate contracts, which suggest that by the end of 2024, the Fed policy rate will be little more than 50 basis points above the ECB’s policy rate, at something like 3.50% for the Fed and just under 3.00% for the ECB. This has narrowed from well over 100 basis points in early November and something like 180 basis points early in 2022. A factor tempering the upside euro potential is concern that the ECB won’t be able to deliver as much as it would like for the market to believe it is capable of without triggering an ugly new aggravation of peripheral spreads as a weak economy like Italy’s can’t fund itself at 3% without QE. Italian Prime Minister Meloni has already http:been out complaining against the ECB’s communication style and the ESM. Read next: The First Trading Day Of 2023: GBP/USD Is Trading 1.2051, USD/JPY Pair Below 131, The Aussie Pair Is Around 0.68 And EUR/USD Above 1.0680| FXMAG.COM Chart: USDJPY USDJPY tanked into year-end, nearing the recent cycle lows even as US long treasury yields climbed into year-end. For most of 2022, long US yields were a very reliable coincident indicator, but the market has its sights next year on the decelerating Fed hikes that it eventually sees turning into rate cuts, while the Bank of Japan is seen further tinkering with its policy in the direction of tightening, particularly once Governor Kuroda’s replacement is found after his early April exit. Ironically, the anticipation of a BoJ shift is resulting in enormous QE to enforce the current regime. When yields were on the rise last year and the US 10-year yield first hit the current level of 3.85% in late September, the USDJPY rate was near 145.00. From here, the current USDJPY trajectory can only find support from a follow through from the BoJ in the direction of tightening (incrementalism remains a risk there) and a world that is diving into a classic disinflationary recession, with the Fed continuing to get marked lower. The challenge for this assumption would be a far stronger than expected global economy, with resilient US activity for another couple of quarters and inflation and a fresh surge in energy prices. Source: Saxo Group Overnight, we got a miserable official Non-manufacturing PMI for December from China as the end of Zero Covid early last month is likely reaching peak impact now and through the next few weeks, followed by a likely strong resurgence in Chinese demand. How the Chinese policy and its economy shapes up on the other side of the early Lunar New Year holiday (January 23) will be an important factor in how 2023 shapes up. Table: FX Board of G10 and CNH trend evolution and strength.The US dollar and sterling starting off the year in worst shape. The latter may be a durable theme this year as the Bank of England is set for QT – a tricky proposition for a twin deficit country that will have to find buyers of its paper outside of the country. Elsewhere, the outsized JPY strength is the most prominent development as this year gets under way. It looks excessive relative to the recent rise in global bond yields. CAD is paying for the Bank of Canada’s dovishness, but oil is a bit resurgent. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs. Note that the “ATR heat” is fading to light orange (second quintile of last 1000 observations) for about half of the pairs tracked here as volatility has eased in recent weeks. Will be watching USD and JPY pair status over the coming week or two for developments, which are often important on calendar year rolls, as emphasized for EURUSD in my most recent FX Update. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights US Markets Closed 0145 – China Dec. Caixin Manufacturing PMI Source: FX Update: USD stumbles into the New Year. | Saxo Group (home.saxo)
Metals Market Update: Decline in LME Copper On-Warrant Stocks, Zinc and Lead Surplus Continues, Nickel Market in Supply Surplus

First Trading Day Of 2023: GBP/USD Is Trading 1.2051, USD/JPY Pair Below 131, The Aussie Pair Is Around 0.68 And EUR/USD Above 1.0680

Kamila Szypuła Kamila Szypuła 02.01.2023 13:54
Central banks and inflation remain the focus of the markets, as well as signals indicating how long and deep the recession may turn out to be. The Euro area economy also heading into recession, concerns over winter gas supplies have eased meaning the slowdown may not be as severe as feared just a few months ago. The first trading day of the year was subdued with many countries, including major shopping malls such as the UK and Japan, closed for the holidays. The dollar strengthened on Monday, moving away from its recent six-month lows against a basket of major currencies for the time being. This week, the critical event that will support the USD Index in gauging a decisive move will be the release of the Federal Open Market Committee (FOMC) minutes. The FOMC minutes will provide a detailed explanation of December’s monetary policy decision. Once trading conditions normalize and major markets return to operation on Tuesday, safe harbor flows could begin to dominate financial markets. In this scenario, the US dollar is likely to hold its ground against its risk-sensitive rivals. USD/JPY The USD/JPY pair is trading below 131 on the daily chart. It is trading in a narrow range of 130.75-130.80. On the Tokyo front, clear inflation projections for the next two years by the Bank of Japan (BOJ) are supporting the Japanese Yen. GBP/USD The cable pair is trading at 1.2051 at the time of writing. On the daily chart, the pair is moving in a narrow range. Following the modest rebound witnessed on the last trading day of 2022, GBP/USD came under subtle bearish pressure and declined toward 1.2050 on the first trading day of 2023. Nevertheless, trading action remains relatively subdued in the absence of data releases. Read next: Twitter Did Not Pay $136,260 Rent, Microsoft Reported Its Worst Quarterly Results In Years| FXMAG.COM EUR/USD After falling towards 1.0650 in the early morning hours in Europe on Monday, EUR/USD managed to rebound towards 1.0700. Thanks to Friday's increases, the pair closed the previous six weeks in the black. Currently, the pair is trading in a range below 1.07, to be precise 1.0686 Meanwhile, the S&P Global manufacturing PMI for the Eurozone was 47.8, in line with market expectations and preliminary estimates.  On the negative side, Germany's S&P Global Manufacturing PMI was 47.1, slightly below the initial estimate of 47.4. In the rest of the day there will be no publication of important macroeconomic data. Eurozone and US bond and equity markets will be closed for the New Year holiday, suggesting EUR/USD is likely to trade in a narrow channel in the second half of the day. AUD/USD Similarly to the euro, the Australian failed to maintain the high level seen at the end of the year. Today, it mostly traded above 0.68, but has now fallen below that level. Trading just below 0.68, at 0.6798 Source: investing.com, finance.yahoo.com
The Pound Is Now Openly Enjoying A Favorable Moment

The GBP/USD Pair Appears To Be Moving In The Bearish Channel

InstaForex Analysis InstaForex Analysis 03.01.2023 08:01
On the daily chart, the main currency pair GBP/USD appears to be moving in the Bearish channel and below the Moving Average. Just testing the Bearish Breaker Block level at 1.2106, Cable has the potential to depreciate in the next few days to the 1.1992 level and if this level is successfully penetrated by GBP/USD The USD has the potential to fall down to the 1.0923 level as long as it is on its way to the targets. There will be no significant upward correction, especially if it is broken above the 1.2426 level because if this level is successfully broken above, it will make all the scenarios previously described cancel automatically. Relevance up to 03:00 2023-01-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/116815
The Outlook Of EUR/USD Pair For Long And Short Position

EUR/USD Pair: The Bias Is Looking Lower In The Near Term

Oscar Ton Oscar Ton 03.01.2023 08:04
Technical outlook: EURUSD rose through 1.0700 on Monday before finding resistance and turning lower. The currency pair missed the recent swing high at 1.0736 by a few pips and might be looking to drag towards 1.0350 and 1.0000-50 in the next few trading sessions. The single currency pair is seen to be trading close to 1.0670 at this point in writing as the bears want to be in control. EURUSD prices have reacted right at the trend line resistance, which connects 1.2266 and 1.1500 highs as seen on the daily chart here. Furthermore, the currency pair has also tested the Fibonacci 0.382 retracement of the larger-degree downswing between 1.2266 and 0.9535. A high probability remains for a turn lower from here towards 1.0350 and the 1.0000-50 area at least. EURUSD has also completed its corrective rally, which began from the 0.9535 lows earlier, just below the 1.0750 mark. The bears will be inclined to drag prices lower below 0.9535 in the next several weeks. Alternatively, if the trend has reversed to the upside against the 0.9535 lows, the instrument might still drop to the 1.0000-50 mark, before finding support again. The bias is looking lower in the near term. Trading idea: A potential bearish move against 1.0750 Good luck!   Relevance up to 03:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307087
The US Dollar Index Is Expected A Pullback Rally At Least In The Near Term

The US Dollar Index Is Expected A Pullback Rally At Least In The Near Term

Oscar Ton Oscar Ton 03.01.2023 08:06
Technical outlook: The US dollar index dropped through the 103.12 lows on Monday before finding support. The index tested its recent swing low but did not break below 103.07, holding the bullish structure intact. It is seen to be trading close to 103.25 at this point in writing as the bulls remain poised to resume higher towards 105.50 and 107.00 levels respectively in the near term. The US dollar index seems to have also completed its larger-degree downswing, which began from the 114.70 highs earlier. The corrective wave might have terminated just ahead of 103.00 as the bulls are now looking to come back in control. A push above 104.50 will confirm that a higher low is in place at 103.12 and that prices are looking higher from here. The US dollar index might be looking to resume its larger-degree upswing and push beyond the 114.70 highs in the next few weeks. Alternatively, if the drop from 114.70 is still incomplete, prices could pull back and find resistance around 107.00 and 110.00-50. The bears might come back in control thereafter and drag prices below 103.00. Either way, we expect a pullback rally at least in the near term. Trading idea: A potential rally against 103.00 Good luck! Relevance up to 04:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307089
The USD/JPY Price Seems To Be Optimistic

Analysis Of The USD/JPY Pair By Torben Melsted

Torben Melsted Torben Melsted 03.01.2023 08:13
We have seen the expected break below the former low at 130.56. This should be the final decline in wave A. We should see wave B take over anytime now for a corrective rally towards 141.25 and perhaps closer to the 61.8% corrective target at 143.78. In the short term, a break above minor resistance at 130.33 and more importantly a break above resistance at 131.40 will confirm that wave A has been completed and wave B is in progress towards 141.25. This is not the time to go short USD for more downside progress. Relevance up to 06:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307097
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

The EUR/USD Pair Rebounded From 1.0669 During The European Session

Paolo Greco Paolo Greco 03.01.2023 08:20
M5 chart of EUR/USD EUR/USD continued trading with low volatility and mainly sideways on Monday. It showed a slight growth during the final days of 2022, but as a whole remained within the horizontal channel. And on Monday the technical picture didn't change at all. There are still very few fundamental events and macro data. For example, yesterday, the final purchasing manager's index for manufacturing in December was published in Germany. Naturally, it did not provoke any market reaction. More or less important data will be available closer to the end of the week and then we would expect more serious moves. But I warned you last week that the flat may take much longer than many expected. I wouldn't be surprised if it lasts another 2 or 3 weeks. There was only one trading signal and it was very good. There's always a risk of false signals when facing a flat, so the less of them, the better. The pair rebounded from 1.0669 during the European session, but it failed to go up even 15 pips. Basically, in an hour after this signal was formed it was clear that there would be no movement on Monday, so the position could be closed manually with small profit. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, non-commercial traders opened 2,700 long positions, whereas the number of short positions fell by 1,100. Thus, the net positions rose by 3,800. The number of long positions is 146,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 41,000 (685,000 vs. 644,000). H1 chart of EUR/USD EUR/USD is still in a very high position on the one-hour chart, and is still in a flat. Lines of the Ichimoku indicator are very close to each other and have lost meaning. The pair can cross them easily and freely now because it's in a horizontal channel. Therefore, I can't say anything new about the technical picture at the moment. On Tuesday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, as well as Senkou Span B (1.0654) and Kijun Sen (1.0660). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 3, the US will release its manufacturing activity report for December (final value). I don't expect a significant reaction from the market. The flat will likely persist. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 05:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331321
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The Flat Of The GBP/USD Pair May Persist For A Few More Days At Least

Paolo Greco Paolo Greco 03.01.2023 08:25
M5 chart of GBP/USD GBP/USD continued to trade within the 1.2007-1.2106 horizontal channel on Monday. Thus, the technical picture remained the same, and volatility during the day was still low. Take note that the pair did not move at all during the entire US session. Literally, in the sense of the word. The holidays continue, and traders are not in a hurry to come back to the market. Therefore, this kind of movement shouldn't be surprising. No important reports published in Great Britain and the US. However, it doesn't matter now: in order for the pair to leave the flat, traders should be adamant to move. The flat might even persist until Friday, though some very important US data will be released on that day. Therefore, the pair can still be traded but only in the smallest time frames. There was only one trading signal yesterday. If one of the traders moved in great haste, he/she could open a short position when the pair crossed the critical line. However, after an hour, the movement stopped, so the position could be closed at any time till the evening and you could even make a profit. But all in all, there were no movements yesterday. COT report The latest COT report showed that bearish sentiment had weakened. During the given period, non-commercial traders opened 5,300 long positions and as many as 10,600 short positions. Thus, the net position fell by about 5,300. This figure has been on the rise for several months, and the sentiment may become bullish in the near future. Although the pound has grown against the dollar for the last few weeks, it is still difficult to answer why it keeps rising. On the other hand, it could fall in the near future (in the mid-term prospect) because it still needs a correction. In general, in recent months the COT reports correspond to the pound's movements so there shouldn't be any questions. Since the net position is not even bullish yet, buying may continue for a few months to come. Non-commercial traders now hold 40,600,000 long positions and 51,500 short ones. I am still skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD is still in the horizontal channel. The lines of the Ichimoku indicator have already lost their strength because the pair can cross them 5 times a day when facing a flat. Now we have to wait for the flat to end or trade for a pullback from the limits of the horizontal channel. On January 3, the pair may trade at the following levels: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259. Senkou Span B (1.2216) and Kijun Sen (1.2063) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. Today, the UK and the US are set to publish the manufacturing activity indices in the final estimates for December - absolutely minor reports. I believe that the flat may persist for a few more days at least. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 05:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331323
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The EUR/USD Pair Opened Surprisingly Calm This Year

InstaForex Analysis InstaForex Analysis 03.01.2023 08:26
EUR/USD opened surprisingly calm this year. In previous years, it traded within a narrow range during Christmas and the first working days of the New Year, but now it was in a wide range, consolidating under the highs. This means that a breakout is brewing around the top of the range. In terms of the European and US markets, they remain closed during the New Year and just started trading normally today. Thus, it is unlikely that there will be strong movements, so investors need to be careful when entering the market. A good trading idea today is to sell above the current highs of December. If this do not succeed, try again in 60-80 pips. Remember not to risk more than 1% of the deal. Good luck! Relevance up to 07:00 2023-01-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331331
China: PMI positively surprises the market

The USD/CNY Pair Central Rate Was Set By The People's Bank Of China (PBOC)

TeleTrade Comments TeleTrade Comments 03.01.2023 08:42
On Tuesday, the People’s Bank of China (PBOC) set the USD/CNY central rate at 6.9475 versus Monday's fix of 6.9646 and market expectations of 6.9477.  
The China’s Covid Containment Continued To Negatively Impact The Output At The End Of 2022

The China’s Covid Containment Continued To Negatively Impact The Output At The End Of 2022

TeleTrade Comments TeleTrade Comments 03.01.2023 08:48
China's Caixin Manufacturing PMI for December dropped to 49.0 vs. 48.8 expected and 49.4 previous, showing that the country’s covid containment continued to negatively impact the output at the end of 2022. While output fell at a softer rate compared to November, total new orders fell at a quicker pace. Wang Zhe, Senior Economist at Caixin Insight Group said, “Both manufacturing supply and demand continued to shrink last month. Fallout from the pandemic was a drag on production and sales, with the subindexes for output and total new orders staying below 50 for the fourth and fifth straight months, respectively.” “Due to the economic downturn and weak demand overseas, the reading for new export orders also remained in contraction for the fifth straight month,” Wang added. AUD/USD holds lower ground below 0.6800 The upbeat print of the Chinese Manufacturing PMI fails to lift the Aussie Dollar, as AUD/USD is testing lows near 0.6775, down 0.41% on the day, at the time of writing.  
China’s Caixin Manufacturing PMI Data Might Support The New Zealand Dollar (NZD)

China’s Caixin Manufacturing PMI Data Might Support The New Zealand Dollar (NZD)

TeleTrade Comments TeleTrade Comments 03.01.2023 08:50
NZD/USD has slipped firmly to near 0.6300 as the US Dollar Index has climbed above 103.60. A release of the upbeat Caixin Manufacturing PMI at 49.0 has failed to support the New Zealand Dollar. Investors have turned cautious after the New Year celebrations and a long weekend. The NZD/USD pair has witnessed a sell-off in the Asian session despite upbeat China’s Caixin Manufacturing PMI data. The Kiwi asset has dropped to near the round-level support of 0.6300 despite figures remaining better than expectations but lower than the former release. The release of the economic data at 49.0 vs. the projections of 48.8 might support the New Zealand Dollar ahead, being one of the leading trading partners of China. Going forward, the status of China’s promotion of foreign trade and the capital attraction will remain in focus. China’s State Administration of Foreign Exchange (SAFE) Director Pan Gongsheng said on Tuesday, “China will use exchange rate policy tools to promote foreign trade, expand foreign capital stock and to manage its FX reserve assets in 2023,” Meanwhile, the risk-perceived assets are facing the heat of long weekend-inspired volatility. The risk appetite of the market participants has trimmed dramatically as investors are cautionary in making positions before settling in the market. S&P500 futures have witnessed decent selling pressure from the market participants as investors are concerned above economic prospects in CY2023. The US Dollar Index (DXY) has climbed to near 103.50 after a recovery move from the crucial support of 103.20. After the release of the Caixin Manufacturing PMI, investors will shift their focus toward the United States ISM Manufacturing PMI data, which will release on Wednesday.  
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

The Aussie Asset Is Marching Towards The Horizontal Resistance

TeleTrade Comments TeleTrade Comments 03.01.2023 08:53
AUD/USD has climbed above 0.6830 as the risk-on profile has rebounded firmly. Better-than-projected release of the Caixin Manufacturing PMI data has supported the Australian Dollar. The RSI (14) has shifted into the bullish range of 60.00-80.00, which indicates that the bullish momentum has been activated. The AUD/USD pair has got immense strength after the release of better-than-anticipated Caixin Manufacturing PMI data. The economic data landed at 49.0 higher than the former release of 48.8 despite a spike in Covid-19 infections after the Chinese administration adopted a sheer pace for reopening the economy. The US Dollar Index (DXY) has dropped below 103.20 despite a recovery move in the opening session. Meanwhile, S&P500 futures have recovered their entire losses displayed in early Asia, portraying a firmer rebound in the risk-appetite theme. On a four-hour scale, the Aussie asset is marching towards the horizontal resistance, which is a three-month high, placed from December 13 high at 0.6893. The Australian Dollar has picked strength after a mild correction to near the 20-period Exponential Moving Average (EMA) at 0.6792. Also, the 50-period EMA at 0.6765 is advancing, which indicates that the upside bias is still solid. Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 40.00-60.00, which indicates that the bullish momentum has been triggered. Going forward, a break above December 5 high around 0.6850 will drive the Aussie asset towards a three-month high around 0.6900. A breach of the latter will confirm more upside towards August 30 high at 0.6956. On the contrary, a downside move below December 29 low at 0.6710 will drag the major further towards December 22 low at 0.6650 followed by November 21 low at 0.6585. AUD/USD four-hour chart  
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The Lonnie Pair (USD/CAD) Is Expected To Extend Its Downside Journey

TeleTrade Comments TeleTrade Comments 03.01.2023 08:56
USD/CAD has displayed an A-shape sell-off as investors have shrugged off China’s Covid-inspired uncertainty. FOMC minutes will provide cues about the monetary policy outlook for CY2023. The Loonie bulls are likely to dance to the tunes of Canada’s employment data. The USD/CAD pair has displayed a perpendicular downside move after testing the previous week’s high around 1.3606 in the early Asian session. The Lonnie asset has dropped vigorously to near 1.3545 and is expected to extend its downside journey as the risk-averse theme has lost its traction. A value-buying context in the S&P500 futures has made the market mood cheerful in the Asian session. Also, risk-perceived currencies have gained positive traction. Meanwhile, the US Dollar Index (DXY) has turned sideways after a sheer drop to near 103.15. The USD index is hovering near its crucial support, therefore, sheer volatility is expected from the counter ahead. Investors are shifting their focus toward the minutes of the Federal Open Market Committee (FOMC), which will release on Thursday, as it will disclose the rationale behind hiking the interest rates by 50 basis points (bps) and pushing them to 4.25%-4.50%. Federal Reserve (Fed) chair Jerome Powell has already cleared that interest rates will peak around 5.1%. Inflationary pressures in the United States are extremely stubborn, therefore, investors should expect the continuation of higher interest rates straight to the end of CY2023. Meanwhile, Loonie investors are awaiting the release of Friday’s employment data. The Bank of Canada (BoC) may continue facing troubles as wage prices are escalating in the economy. Higher employment bills will keep inflation at elevated levels and may force BOC Governor Tiff Macklem to tighten policy further. On the oil front, oil price are struggling to sustain above $80.00 as the street is expecting an increase in the number of Covid-19 infections ahead. Analysts at Capital Economics have warned that "China is entering the most dangerous weeks of the pandemic".
The Results Of The March Meeting Of The Bank Of Japan Are Rather Symbolic

Ulrich Leuchtmann, Head Of FX And Commodity Research At Commerzbank: "The Fact That Japanese Central Bankers Will Have To Defend The New Upper Limit For JGB Yields With Even More Determination"

TeleTrade Comments TeleTrade Comments 03.01.2023 09:03
Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank expresses his take on the impact of the Bank of Japan (BoJ) bond purchases on the Japanese Yen. Key quotes “The Bank of Japan’s (BoJ) decision to allow higher JGB yields had spontaneously been interpreted as the beginning of the end of ultra-expansionary monetary policy not only by me.“ “It seemed to be the general interpretation. In the meantime the market no longer seemed to be 100% certain whether that was correct. Because the BoJ justified its explanation with purely market-technical reasons. USD-JPY temporarily traded with a 134 handle.” “However, in particular the fact that Japanese central bankers will have to defend the new upper limit for JGB yields with even more determination resulted in a reversal. USD-JPY is once again trading at levels around 131.00 (while I write this), so roughly where the currency pair was trading following the BoJ decision.”  
The EUR/USD Pair Has Key Support Is Near At The Price of 1.5075

The EUR/USD Pair Has Key Support Is Near At The Price of 1.5075

Peter Jacimovic Peter Jacimovic 03.01.2023 09:23
Technical analysis: EUR/USD has been trading downside this morning and key support is near at the price of 1.5075. Trading recommendation: Key support zone is set at the price of 1.5075 and watch for the price action around this key support zone to confirm further direction. In case of the rejection of the key support zone at 1.0575, watch for buying opportunities towards upside references at 1.0670 In case of the downside breakout of the support zone, watch for selling opportunities towards objective at 1.0510 Relevance up to 09:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307135
Norges Bank Takes Bold Steps: Signals Strong Tightening to Strengthen Weaker Krone

Saxo Bank Podcast: Picture Of The Market Situation In Relation To The US Dollar And Other Markets

Saxo Bank Saxo Bank 03.01.2023 10:43
Summary:  Today, we remind traders that the market action doesn't really start for much of global liquidity until today's opening of UK and US markets, with Japan not even set to start trading until tomorrow. This makes the JPY volatility in particularly difficult to interpret in thin markets. Most of the USD move that has unfolded this morning did so during and after the recording of this podcast, but we suggest that it is important to wait for the US data on Friday for a firmer sense of where the market stands on the US dollar and other markets, including gold. Today we also discuss the important year ahead for Tesla, with more products and platforms in the mix than at any time in its history, contrasting its outlook with that of Volkswagen. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Read next:The Korea Fair Trade Commission (KFTC) Will Impose A Fine Of $2.2 Million On Tesla Inc| FXMAG.COM If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source:Podcast: 2023 really starts today and tomorrow | Saxo Group (home.saxo)
US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

Tesla Hit A Fresh Record, FOMC Minutes And US Jobs Will Give Direction

Swissquote Bank Swissquote Bank 03.01.2023 10:53
The New Year started with the IMF Chief Georgieva warning that the global economy faces ‘a tough year, tougher than the year we leave behind’. German PMI German PMI data pointed at a faster than expected contraction in manufacturing activity in December, while the European manufacturing PMI came in at 47.8, in line with expectations. European markets This being said, trading in European markets was rather optimistic on the first trading day of the year, as European nat gas futures eased on mild weather. Forex The US dollar index kicked off the year on a subdued note, letting the dollar-yen tip a toe below the 130 mark. The EURUSD however, couldn’t build on gains above the 1.07 mark, while Cable remained steady-ish a touch above its 200-DMA, which stands near 1.2030 level. Gold Gold jumped to $1843 per ounce despite the positive pressure on the yields recently, while oil remained offered into the 50-DMA, which stands a touch below the $81 per barrel mark. Bitcoin Trading in Bitcoin remains boring. US data and OPEC On the economic data front, we will watch FOMC minutes, US jobs data, and OPEC meeting this week. EV On individual stocks front, carmakers announce their Q4 deliveries. Tesla hit a fresh record, but the number of cars delivered last quarter fell short of expectations, while Rivian reportedly doubled production in the final quarter of 2022 to hit its 25’000 yearly target. Watch the full episode to find out more! 0:00 Intro 0:17 IMF warns that 2023 could be tougher than 2022 1:31 Chinese data disappoint 2:42 But European stocks remain bid 4:41 FOMC minutes & US jobs will give direction 6:07 US crude tests 50-DMA resistance 7:33 Tesla's record Q4 deliveries fall short of expectations Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #HappyNewYear #2023 #IMF #warning #economic #recession #China #Covid #energy #crisis #USD #EUR #JPY #Bitcoin #XAU #Tesla #Rivian #deliveries #FOMC #minutes #OPEC #US #jobs #data #NFP #DAX #CAC #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

A Negative News Flow From China Provides Indirect Support For The USD/JPY Bears

InstaForex Analysis InstaForex Analysis 03.01.2023 11:53
The dollar-yen pair tested the psychologically important price level of 130.00 today, temporarily falling to the area of the 129th figure. The pair has updated a six-month low, but this is not surprising: USD/JPY bears consistently develops a downward trend. Looking at the weekly chart, we can see that the price is now declining as part of the next wave of downward movement. Three weeks ago, the Bank of Japan provoked price turbulence, which turned out to be in favor of the national currency. In general, the downward rally began in October last year, when the pair reached a multi-year price high (151.96). After that, the Japanese authorities conducted another currency intervention, thereby extinguishing the upward impulse. And further events also turned out to be in favor of sellers: the dollar weakened against the backdrop of slowing inflation in the U.S. and a decrease in the Fed's aggressiveness, while the yen received unexpected support from the Japanese regulator. And all this happened and is happening against the background of a kind of "election race" for the post of head of the Bank of Japan: traders react to statements by possible successors of Haruhiko Kuroda (as a rule, these statements are quite hawkish). At the same time, the dovish statements of Kuroda himself, who is guaranteed to leave his position in April, are ignored by market participants. And now the yen, after a short respite in the pre-New Year period, continues to strengthen its position due to several fundamental factors. First, there is growing confidence in the market that the Bank of Japan, having doubled the yield ceiling on 10-year bonds in December, has taken only the first step towards normalizing monetary policy. Last week, on New Year's Eve, Kuroda refuted this assumption. He stated that this decision of the central bank was due to "market and technical reasons." But traders, apparently, are betting that the regulator will further weaken its policy of controlling the yield curve in the future or abandon it altogether. The market is increasingly talking about the possible implementation of such a scenario. In particular, Columbia University professor Takatoshi Ito (who worked with Kuroda at the Japanese Ministry of Finance in 1999–2001) recently said that such a decision by the central bank is a kind of prelude to the rejection of ultra-loose policy. He did not agree with the current head of the central bank that inflation in Japan will slow down this year. Arguing his position, Ito points to the latest data on the growth of the consumer price index: in November, annual consumer inflation reached 2.8%, even without taking into account energy and food prices. This means that inflation may remain above the 2% target level in 2023, even if prices for energy resources and products stop rising. Moreover, according to Ito, this year's wage negotiations are likely to lead to significant increases, boosting consumers' purchasing power, triggering another spike in prices, due to stronger demand. By the way, Takatoshi Ito is one of the candidates to replace Kuroda as head of the Bank of Japan. Other likely successors to Kuroda are also saying in one form or another that the Japanese regulator may have to take the next steps towards normalizing monetary policy. In particular, former Vice Finance Minister for International Affairs Takehiko Nakao said that he favors a smooth transition from the central bank's ultra-loose monetary policy. In my opinion, the market has formed a common position on the interpretation of the December decision of the Japanese Central Bank. And this position boils down to the fact that at the end of last year, the Bank of Japan marked the beginning of the end of the ultra-loose monetary policy. In turn, "hawkish" comments of Kuroda's possible successors are further confirmation of this assumption. The yen is in high demand on the back of such conclusions. Also, we should not forget that Japanese currency has a status of a "safe-haven," so a negative news flow from China provides indirect support for USD/JPY bears. On Saturday, it became known that China's official Manufacturing PMI for December dropped to 47.0, contrary to expectations of a 48-point decline. As we know, the 50-point mark separates contraction from growth, while the Manufacturing PMI has been below the key level for the third consecutive month. China's Caixin Manufacturing PMI, released today, fell to 49.0 (with a forecast of a decline to 49.4). Economists polled by Reuters said the worsening epidemiological situation in China could lead to temporary labor shortages and increased supply chain disruptions. Meanwhile, a new wave of coronavirus infection is spreading in China at an unprecedented rate. Thus, the existing fundamental background contributes to the further decline of the USD/JPY pair. Today, traders tested the 129.50 support level (the lower line of the Bollinger Bands indicator on the daily chart), but then retreated to the area of the 130th figure. There is no doubt that the bears will again storm this price barrier in the medium term, overcoming which will open the way for them to the next support level at 129.00 (the lower Bollinger Bands line on the H4 timeframe). Relevance up to 09:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331353
The EUR/USD Pair Has Opportunities For Bullish Movement

The EUR/USD Pair's Movement Is Still Much More Similar To A Flat Than A Trend

Paolo Greco Paolo Greco 03.01.2023 12:28
On Monday, the EUR/USD currency pair remained flat, but there was still a slight upward bias. The European currency largely decreased on the first trading day of the week, month, and year, although there was little volatility during the day and no macroeconomic or fundamental background. In comparison to the final week of last year, there have been no changes to the concept. If we merely look at the past two weeks, the pair's movement is still much more similar to a flat than a trend. There is no question about the upward trend if you look at the previous three to four months, and even though the price is near the moving average, it cannot be fixed below it. As a result, the technical situation is unchanged at this time. Due to the poor movement and nearly total flat, trading pairs on the 4-hour TF is still quite difficult. If the right signals are there, trading on the lower TF is conceivable. Since there hasn't been any news over the past two weeks, it has been challenging to share any new information. Only China made the unfavorable decision on the eve of the New Year. In China, a new wave of the coronavirus epidemic started, and unverified reports indicate that by mid-December, there were already hundreds of millions of cases. Although it is impossible for us to determine whether this information is accurate, the market showed no signs of reaction. Therefore, we do not think that current market information on Chinese epidemiology is crucial. A localized epidemic is not particularly terrifying, as we've already stated. It will be frightening if the epidemic spreads from China once more. Some nations have already started to stop flying to China since, after a few flights, it was discovered that roughly half of the passengers had coronavirus. Therefore, a new worldwide wave of the disease may be just around the corner. And after that, the market can experience another "storm," and the US dollar, which enjoys all kinds of catastrophes, will probably become more expensive. Nonfarm may signal the start of a period of dollar growth. The main source of information for this week's macroeconomic background is American news. Only the most significant inflation reports will be made public in the European Union. We want to gauge the likelihood that the pair will fall this week given the existing situation, in which the euro simply will not depreciate flatly. From our perspective, the market right now needs a "kick." Furthermore, it was "a shove from a high mountain," not just a "kick." The value of the euro has increased significantly compared to the fundamental backdrop that traders had at their disposal. Its frantic inability to adapt comes across as quite odd. It is unlikely that the "push" will be an inflation report, but it may be a nonfarm report. Without macroeconomic indicators, traders can certainly begin selling a pair, but since these articles are so significant this week, why not mix business with pleasure? The nonfarm payroll data, therefore, have a great probability of becoming this "push." As always, forecasts for this report are as impartial as they can be. About 200,000 new positions outside the agriculture industry are anticipated to have been added in December. Although such a result was predicted a month ago and a failed ADP was released later, nonfarm finally turned out to be very strong. As a result, we do not rule out the possibility that something similar occurred last month. In any scenario, there is just no room for short-term euro growth. The construction of an upward worldwide trend must be kept up, so some adjustment is required. But for now, we don't see many reasons to keep the configuration going either. The slowing of the ECB's monetary policy tightening pace is the primary cause of concerns regarding the expansion of the euro. If the pair manages to establish itself below the moving average this week; this could be a false breakdown, of which there have been quite a few in recent weeks. Because the price can frequently cross the moving average line because of the current flat movement, it should be kept in mind. As of January 3, the euro/dollar currency pair's average volatility over the previous five trading days was 65 points, which is considered "normal." So, on Tuesday, we anticipate the pair to fluctuate between 1.0601 and 1.0731. A new round of upward momentum will be signaled by the Heiken Ashi indicator's upward reversal. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trading Suggestions: Although the EUR/USD pair continues to move upward, the movement is still sluggish and "flat." Trading can only be done on lower time frames because there are hardly any moves on the 4-hour time frame. Explanations for the illustrations: Channels for linear regression allow identifying the present trend. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.     Relevance up to 05:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331317
Analysis Of The EUR/JPY Pair Movement

Any Strong Movement From The Yen Is Unlikely Today Due To Japanese Markets Are Closed

Kenny Fisher Kenny Fisher 03.01.2023 12:45
The Japanese yen has posted winning sessions for three straight days and is in positive territory on Tuesday. Japanese markets are closed today for a holiday, so any strong movement from the yen is unlikely today. It’s a very light day on the economic calendar. There are no Japanese events, while the US releases Final Manufacturing PMI. Yen keeps rolling Japanese markets remain closed for an extended holiday but the good times continue for the yen. Since falling to 151 in October, the currency has rebounded and earlier today broke below the symbolic 130 level, for the first time since May. If USD/JPY closes the day below 130, that will give support for the downtrend to continue. The next target for a downside push is the 125 line, which has held since April. Investors would love to know what the Bank of Japan has planned in the coming months. The BoJ tweaked its yield curve band in December, a move that blindsided the markets and sent the yen flying higher. With Governor Kuroda winding up his 10-year term in April, there were no expectations that Kuroda would make any significant policy changes, and the focus was on his potential successor. Kuroda has insisted that the tweak was not a prelude to the Bank exiting its massive stimulus program, but the markets aren’t so sure. What is clear is that inflation continues to rise in Japan, which is putting pressure on the BoJ to tighten policy. This could take the form of further widening the yield curve band or eliminating the 0% target for 10-year yields. The BoJ next meets on January 18th and investors will be all ears. BoJ policy meetings used to be sleepy affairs, where board members dutifully announced they were maintaining current policy. This is clearly no longer the case, with the BoJ widening the yield curve band at the December meeting and board members discussing the impact that an exit from stimulus would have on the markets. Read next: New Record For Electric Car Manufacturer - Tesla Deliveries Increased By 40% Year-On-Year| FXMAG.COM USD/JPY Technical USD/JPY is testing support at 130.50. The next support level is 129.76, which has held since June There is resistance at 131.25 and 132.13 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Source: Japanese yen breaks below 130 - MarketPulseMarketPulse  
China Restricts Gallium and Germanium Exports, Heightening Global Tech War

EUR/USD, GBP/USD And AUD/USD Fell Sharply After The US Dollar Recovered

Kamila Szypuła Kamila Szypuła 03.01.2023 13:23
The US dollar appreciated, mainly due to the minutes from the December meeting of the Federal Reserve. The U.S. central bank raised interest rates by 50 basis points last month after four consecutive increases of 75 basis points in a year, but said it may have to keep interest rates higher for longer to bring inflation under control. Minutes from the December Fed meeting are due to be released on Wednesday, with investors looking for clues as to what rate path is likely to be taken in 2023. The market seems to be struggling to interpret the change in China's Covid-19 strategy. On the one hand, it is predicted that it is likely to unleash the world's second largest economy and its associated supply chains. The Chinese data remains soft and the Caixin manufacturing PMI released today came in with a narrow miss. In December it was 49.0 instead of 49.1 forecast and 49.4 earlier. Moreover, there was a desire from the Chinese side for better relations with the US after their foreign minister said they would look for more open channels of communication. It is worth noting, however, that the exchanges point to a risky market environment, which usually makes it difficult for the US dollar to find demand. USD/JPY The Japanese yen continued to strengthen today with USD/JPY dipping below 130 for the first time since June last year. It has now returned to trading above 130 and is close to 131. The yen, which hit a seven-month high during the Asian trading hours, was recently trading low at 130.45 to the dollar. The pair's decline was mainly driven by a new Japanese yen buying spurt as US equities futures fell at the open and bolstered safe-haven inflows into the yen. Speculation that the BoJ was about to start moving away from its very lax policy flared up in December when the central bank extended the yield cap on 10-year Japanese government bonds (JGB). This was further reinforced by the Nikkei report on Saturday. Read next: The Korea Fair Trade Commission (KFTC) Will Impose A Fine Of $2.2 Million On Tesla Inc| FXMAG.COM GBP/USD GBP/USD drops below the key 1.2000 level for the first time in 4 weeks as the dollar index recovers. Today's morning drop in GBPUSD is due to the recovering dollar index. The risk-positive market environment does not appear to be helping sterling find support so far. As noted above, the decline is attributable to the stronger dollar and not to UK-specific factors, which may also have exaggerated the impact. The UK economy is weighed down by recession fears, high inflation and the cost of living crisis. The Bank of England has raised interest rates nine times since December 2021 to try to bring down inflation, which remains close to a 41-year high. EUR/USD EUR/USD lost traction and fell towards 1.0550 early Tuesday after climbing above 1.0700 on Monday. It's hard to stop the driving force of the pair's recent actions as the market recovers with the US dollar strengthening again. Nevertheless, technical forecasts point to a bearish slope after the sharp decline seen during the European session. Euro still awaits German CPI data release, which may help EUR/USD move towards 1.06. Source: investing.com Read next: New Record For Electric Car Manufacturer - Tesla Deliveries Increased By 40% Year-On-Year| FXMAG.COM AUD/USD The Australian pair fell from above 0.68 to 0.6695 Weaker than expected official Chinese PMI data released over the weekend may have contributed to the decline. The Australian remains supported by expectations that the Reserve Bank of Australia will raise interest rates later this year as part of its ongoing effort to bring down inflation. Markets are currently divided on whether the RBA will deliver another rate hike in February. Australia's trade balance remains at a record high and the AUD/USD exchange rate weakens due to interest rate differentials, and the domestic economy continues to benefit from this. Source: investing.com Source: dailyfx.com, investing.com, finance.yahoo.com
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

Paolo Greco Paolo Greco 03.01.2023 14:42
On Monday, the GBP/USD currency pair kept trading in the side channel. The British pound has adjusted very well over the past few weeks, but a week or so before the new year, it decided that enough was enough and that it was important to wait for fresh data and a "basis" before indicating a new increase or decline. That's all right, but this week in the UK, there are essentially no scheduled data or events. In our opinion, business activity indices across various industries are incapable of causing a significant movement and exit from the flat. The American data from Friday are a different story. Depending on how new it turns out to be, the pound might stay in the side channel. However, if it comes as a surprise, then the motions are pretty real. Now, the side channel can only reach levels 1.2010 and 1.2115. Currently, there is nothing new to say about the UK. First of all, the Christmas and New Year's holidays remain. There are no significant remarks because a large number of BA politicians and officials are on vacation. We previously predicted that there wouldn't be many of them this week based on macroeconomic statistics. It would be unusual to anticipate news from Nicola Sturgeon, who is scheduled to organize a referendum in Scotland this year to keep her election promise. What do we have, then? Nothing is happening: there are no publications, speeches, news, or movements. All that is left to do is wait for at least one item on this list to emerge or for the lower TF to trade flat. I'd want to draw attention separately to the 24-hour TF, where the pair was fixed below the critical line. Although it could seem like a good cause to keep adjusting, the price has fallen so far below this line that it will be easy for it to start going north again. Conclusion? This week, the pound should start to decline; by then, it might be too late. You must depart the side channel through its lower boundary to accomplish this. Our wait is over. The British economy's health could cause the pound to decline. In 2023, the British economy can go through a lot of challenging times. The British economy could have the strongest and darkest recession, to start. These worries might just be confirmed by this week's business activity indicators, which will be released. For instance, today's report on business activity for December could show a decrease of 44.7 points. Even more significant than this number itself is the fact that company activity in the production sector has been declining since May 2021, or for 18 months. It had a value of roughly 66 points when it started its descent into the abyss. This is not shocking considering how many central banks have used monetary stimulus to boost their economies to excellent levels. The Bank of England is also no different. Following a brief delay brought on by the rejection of monetary initiatives, a progressive drop to dangerous values began at the start of the year. Since the indicator has now fallen below the "waterline" of 50.0 for five consecutive months, the business climate in the industry has slowed and worsened. Given that the third quarter marked the official beginning of the recession, things can only get worse. The Bank of England can tighten monetary policy considerably more gradually than it is now doing, notwithstanding significant inflation. It might not be able to increase the rate at each meeting, even at 0.5%. Several committee members opposed the increase at the previous two "monetary meetings." This shows that a large number of BA officials are concerned about the British economy and believe that it will weaken over the next two years, necessitating the introduction of new QE initiatives to reverse the downward trend. However, inflation won't go down unless new monetary policy tightening occurs. There is nearly a deadlock, and the pound sterling might be the loser. It has increased significantly during the last three months, gaining 2000 points. The market can now begin to gradually recoup this unjust growth. As previously stated, the pound's increase over the previous three to four months accounts for almost half of its loss over the previous two years. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 92 points. This number is the "average" for the dollar/pound exchange rate. Thus, on Tuesday, January 3, we anticipate movement that is contained inside the channel and is constrained by the levels of 1.1957 and 1.2141. The Heiken Ashi indicator's upward reversal portends the possibility of fresh upward action inside the side channel. Nearest levels of support S1 – 1.2024 S2 – 1.1993 S3 – 1.1963 Nearest levels of resistance R1 – 1.2054 R2 – 1.2085 R3 – 1.2115 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair entered a side channel. As a result, at this time, we should think about trading in anticipation of a recovery from the levels of 1.1993 (1.2024) and 1.2115. Explanations for the illustrations: The use of linear regression channels enables the identification of the current trend. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones Relevance up to 05:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331319
ECB press conference brings more fog than clarity

Traders Of The EUR/USD Pair Can Assume Consolidation With A Subsequent Rebound

InstaForex Analysis InstaForex Analysis 03.01.2023 14:57
Today's European trading session began with a sharp strengthening of the dollar, including against the euro. Perhaps this is how market participants, who follow euro quotes, reacted to yesterday's publication of European macro data, which turned out to be rather weak (yesterday, major world exchanges did not work, and there was low activity of traders and low trading volumes on the market). The S&P Global manufacturing PMI for December came out at 47.1 against the forecast and the previous value of 47.4. The manufacturing PMI for the entire euro area remained at around 47.8. The indices are also below the value of 50, which separates the growth of activity from its slowdown. It is also possible that on the first trading day of the new year, market participants are trying to protect themselves from the risks related to the rising coronavirus infections in China, high inflation, geopolitical tensions, and the threat of a global recession, seeking refuge in a protective dollar. Thus, the EUR/USD pair lost 1.2% in the first hours of today's European session, falling by 130 points to the opening price of today's trading day. As of writing, EUR/USD is trading near 1.0544, very close to the strong support at 1.0525. Considering such a sharp drop, literally in a couple of hours, as well as reaching a zone of strong support, from a technical point of view, near the current levels, we can assume consolidation with a subsequent rebound, given the general upward trend of the pair. European Central Bank Governing Council member Joachim Nagel said yesterday that the ECB needs to take further action to contain inflationary expectations, i.e., continue to tighten their monetary policy. As for today's economic calendar, the preliminary harmonised consumer prices (HICP) for Germany will be released at 13:00 (GMT). The index (CPI) is published by the EU Statistics Office. It is an indicator for inflation and is used by the Governing Council of the ECB to assess the level of price stability. In normal economic conditions, rising prices force the country's central bank to raise interest rates to avoid excessive inflation (higher than the target set by the central bank). Therefore a rise in the index is positive for the national currency (under normal circumstances), and a decrease in the index (expected to 10.7% from 11.3% in November) is negative. At the beginning of the U.S. trading session, the updated PMI for the U.S. manufacturing sector (from S&P Global) will be released. Previous values were 47.7, 50.4, 52.0, 51.5, 52.2, 57.0, 59.2. The forecast for December is 46.2 (the preliminary estimate was 46.2), indicating a continued slowdown in this sector of the U.S. economy, which is a negative factor for the dollar. Relevance up to 12:00 2023-01-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331373
A Bright Spot Amidst Economic Challenges

The IMF Warned That 2023 Would Be Worst Than 2022, As The US, EU And China Would All See A Decline In Growth

Kenny Fisher Kenny Fisher 03.01.2023 15:11
The US dollar is showing strong gains against the majors on Tuesday, with the exception of the Japanese yen. EUR/USD has tumbled by 1.27% and is trading at 1.0528 in Europe. Investors eye German CPI EUR/USD is sharply lower today, despite a very light economic calendar. The only release of note is German CPI, which will be released later today. Despite the lack of fundamentals, the US dollar is taking advantage of risk aversion in the markets. There are headwinds everywhere you look. The war in Ukraine, the threat of recession in the US and the eurozone and China’s slowdown all make for a gloomy outlook as we start the new year. Germany’s inflation has been falling, and the downtrend is expected to continue. The consensus for December CPI is 9.0%, compared to 10.0% in November. If the consensus proves accurate, it could put further pressure on the euro, as the ECB may have to reconsider its hawkish stance on rate policy. The International Monetary Fund didn’t bring any festive cheer with its pessimistic message on Monday. The IMF warned that 2023 would be tougher than 2022, as the US, EU and China would all see a decline in growth. Adding to the gloom, the IMF said that it expected one-third of the global economy to be in recession this year. In October, the IMF cut its growth outlook from 2.9% to 2.7%, due to the war in Ukraine as well as central banks around the world raising interest rates. After the Christmas and New Year’s holidays, the markets are easing back in, as the data calendar gets busier as of Wednesday. We’ll get a look at the Fed minutes from the December meeting, which was a hawkish affair that surprised investors and gave the US dollar a boost. On Friday, the US releases the employment report, which always plays an important factor in the Federal Reserve’s rate policy.   EUR/USD Technical EUR/USD is testing support at 1.0528. Below, there is support at 1.0469 There is resistance at 1.0566 and 1.0636 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.   Source: EUR/USD slides to three-week low - MarketPulseMarketPulse
The EUR/AUD Pair May Have The Potential To Continue Its Decline

The EUR/AUD Pair May Have The Potential To Continue Its Decline

InstaForex Analysis InstaForex Analysis 04.01.2023 08:00
If we look at the 4-hour chart of the EUR/AUD cross, we can see that sellers are still dominating, which is indicated and confirmed by the appearance of: 1. Deviations between EUR/AUD price movements and the Awesome Oscillator indicator. 2. Alligator indicator that opens downwards. 3. All three Wiseman have been fulfilled. Based on the facts above, in the near future EUR/AUD will try to test the nearest Wiseman level 3 (Bearish Fractal), namely at the 1.5623 level. If it is successfully broken down, then EUR/AUD will have the potential to continue its decline to the 1.5495 level. However, on its way to the previously mentioned target levels, suddenly EUR/AUD reverses corrected upwards beyond the 1.5746 level,then all scenarios of a decline with the targets previously described will become invalid and cancel automatically. Relevance up to 01:00 2023-01-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/116897
PLN Soars to Record Highs Ahead of NBP Decision

The EUR/USD Pair Started The Bearish Correction

Paolo Greco Paolo Greco 04.01.2023 08:08
M5 chart of EUR/USD EUR/USD started the bearish correction that I have been talking about for a long time. Of course, it is too early to conclude that the fall will be strong and could take long, but yesterday the pair made a big step towards this scenario. I have been mentioning a strong correction since 3 weeks ago, but there were no sell signals on the higher charts, and the market continued to buy the pair even when there were no reasons to do so. The only macro data from yesterday that I could mention are the data on German inflation and U.S. manufacturing activity. German inflation went down from 10% to 8.6% while CPI has fallen from 47.7 to 46.2. It is unlikely that the euro fell because of these reports. But yesterday's technical picture was quite pleasant. In the very beginning of the European session, there was a sell signal near the Ichimoku indicator, later the price crossed 1.0581 and went down about 50 pips. Unfortunately, the price failed to reach the next target level of 1.0485, but there was no buy signal during the day. Therefore, the deal had to be closed manually closer to the evening with profit around 80 pips. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, non-commercial traders opened 2,700 long positions, whereas the number of short positions fell by 1,100. Thus, the net positions rose by 3,800. The number of long positions is 146,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 41,000 (685,000 vs. 644,000). H1 chart of EUR/USD EUR/USD resumed the downward movement on the one-hour chart, and settled below the horizontal channel, in which it spent several weeks. I expect the euro to fall further, which can only be prevented by Friday's US data. However, I believe that even if they turn out to be weak, in the mid term the US dollar will still show growth. The euro has risen too much and for no reason at all over the last months, a correction is necessary. On Wednesday, the pair may trade at the following levels: 1.0269, 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, and also Senkou Span B lines (1.0623) and Kijun Sen (1.0616). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 4, the ISM manufacturing activity index for December will be released in the US, followed by the Federal Reserve minutes later in the evening. I don't expect the market to show a significant reaction to the minutes, but the ISM index might provoke one in case its value is much different from the forecasts. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 06:00 2023-01-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331409
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The GBP/USD Pair Finally Has A Real Opportunity To Continue Moving Downward

Paolo Greco Paolo Greco 04.01.2023 08:13
M5 chart of GBP/USD GBP/USD also plummeted on Tuesday, left the horizontal channel and is now set to continue falling. It is hard to say why the pound plunged yesterday since there were no important events in the UK, and the latest reports referred more to the euro and the dollar, but not to the pound. Nevertheless, the pound was also falling actively, so we conclude that the nature of this movement is technical. If you remember, I have mentioned many times in recent weeks that the pound rose 2000 points too quickly and sharply. The 2000 points is half of the whole downtrend, which lasted 2 years. And this distance has been covered in only 2.5 months. Therefore, the bearish correction was necessary to "restore justice". Thus, from a technical perspective, it is absolutely logical that the pound is falling. There were a lot of trading signals yesterday because the movement was volatile. Let's break them down. At the beginning of the European session, the pair crossed the critical line so traders had to open the short positions. Then the pair passed 1.2007 and 1.1974 and it passed about 60 more points to the downside. Unfortunately, GBP did not reach 1.1874, and a strong upward movement began in the afternoon. So, when the price crossed 1.1974-1.2007, the shorts should have been closed. Unless, traders closed them earlier manually. You could only get several dozens of points on this trade, and it wasn't possible to do so using the buy signal because the pair failed to reach the critical line. But the long position closed at Stop Loss without loss. The last sell signal should not be executed, as it was formed quite late. COT report The latest COT report showed that bearish sentiment had weakened. During the given period, non-commercial traders opened 5,300 long positions and as many as 10,600 short positions. Thus, the net position fell by about 5,300. This figure has been on the rise for several months, and the sentiment may become bullish in the near future. Although the pound has grown against the dollar for the last few weeks, it is still difficult to answer why it keeps rising. On the other hand, it could fall in the near future (in the mid-term prospect) because it still needs a correction. In general, in recent months the COT reports correspond to the pound's movements so there shouldn't be any questions. Since the net position is not even bullish yet, buying may continue for a few months to come. Non-commercial traders now hold 40,600,000 long positions and 51,500 short ones. I am still skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD GBP/USD left the horizontal channel on the one-hour chart and now it finally has a real opportunity to continue moving downward, as I expected. The price is also located below the Ichimoku indicator lines, which are gaining strength again with the resumption of the trend movement. On January 4, the pair may trade at the following levels: 1.1645, 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259. Senkou Span B (1.2216) and Kijun Sen (1.2063) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Wednesday, there are no important events planned for Great Britain. Meanwhile, the US will release its ISM manufacturing activity index. The Federal Reserve minutes will be announced in the evening but everyone is focused on the ISM index. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 06:00 2023-01-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331413
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD Pair Expect A Final Dip To Below 1.0519

Torben Melsted Torben Melsted 04.01.2023 08:19
EUR/USD has corrected as expected and is close to completing sub-wave iv. We still need EUR/USD to move a little lower and closer to our ideal target near 1.0470, but we are in the final stages of this corrective wave and should soon see wave v take over for the next rally higher towards 1.0927 to complete wave v/ and 3. Longer term, we are looking for much higher levels for EUR/USD, but as always we suggest taking things in baby steps. For now, we expect a final dip to below 1.0519 and ideally closer to 1.0470, but all we need is a dip below 1.0519 to fulfill all requirements for wave c/ of iv/ and to set the stage for wave v/ higher to 1.0927. Relevance up to 07:00 2023-01-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307264
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

EUR/USD: The Moment May Have Come For The Significant Downward Correction

Paolo Greco Paolo Greco 04.01.2023 08:24
On Tuesday, the EUR/USD currency pair dropped abruptly and unexpectedly for many, dropping between 120 and 130 points. It should be noted that although the euro has traveled quite a distance, yesterday's macroeconomic environment did not support such a movement at all. Therefore, what we predicted throughout the three-week flat period came to pass. Strong statistical trends or significant fundamental events had little to no impact on how the flat ended. Only two statistics were available to dealers yesterday: the German inflation rate and the US manufacturing sector's business activity index. The American data was weaker than expected and released considerably later than the pair's decline, so it was unlikely to result in a strengthening of the US dollar. The European currency did not drop more than 100 points as a result of the German inflation report, although it showed a 1.4% y/y decline. The euro could theoretically collapse as a result of the sharp decline in German inflation, which suggests that European inflation may also experience a significant slowdown this Friday. The likelihood of the ECB rate hike cycle finishing earlier increases with the rate at which inflation drops. The likelihood that the ECB will resume raising interest rates by 0.25% in the near future is higher. As we previously stated, market expectations for a slowing in the pace of the Fed's monetary policy tightening are the key cause of the dollar's decline during the past three months. The ECB already slowed these rates in December, and with a new decline in inflation, the likelihood of a swift and dramatic tightening of monetary policy will decrease even further. Therefore, there is no longer any need for the two to keep traveling north. It has struggled mightily to increase for the past three weeks, refusing even to slightly modify. Most likely, what we saw was an inertial movement as traders tried to take advantage of the rally in anticipation of a deeper, sustained decline in the pair. Now that we can see it, the moment may have come for the significant downward correction we have been anticipating for a while. The movement's direction is chosen. If we focus solely on this week's macroeconomic and structural backdrops, substantial changes can hardly be anticipated all day other than Friday. As previously stated, there were no justifications for "flights" yesterday. Only the ISM index for the US manufacturing sector is due today; however, it won't be released until later in the evening. The minutes of the Fed's meeting will be made public later that evening, but as they are a formal document, the market rarely reacts to them. What else is left for this week, then? Non-farm, the ISM service sector index, and EU inflation. This week's reports are all due on Friday. As a result, it will be challenging to predict what traders will trade actively and volatilely today and tomorrow. Or will one day suffice, and today we will once more see flat? Now, the euro should continue to decline logically regardless of the macroeconomic or structural background. Additionally, there won't be a final one this week. The Fed is gradually beginning to awaken, and this week there are many lectures planned by Fed officials. All reports, declarations, and speeches will only occasionally steer the pair in a specific direction; ultimately, everything will depend more on the traders' decision to engage in active trading. However, even while inflation in the EU slows down very slightly on Friday and non-farm payrolls in the US are expected to be low, we continue to feel that the euro should continue to fall. As of January 4, the euro/dollar currency pair's average volatility over the previous five trading days was 88 points, which is considered to be "normal." As a result, we anticipate that the pair will fluctuate on Wednesday between levels 1.0480 and 1.0656. A round of upward corrective will be signaled by the Heiken Ashi indicator's upward reversal. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trading Suggestions: The EUR/USD pair has finally resumed or at least attempted to resume, its trend movement. Until the Heiken Ashi indication turns up, you should hold short positions with objectives of 1.0498 and 1.0480. After the price reverses above the moving average, long trades should be initiated with goals of 1.0656 and 1.0742. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones Relevance up to 05:00 2023-01-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331405
The USD/JPY Price Seems To Be Optimistic

Technical Analysis Of Movement Of The US Dollar To Japanese Yen (USD/JPY)

Torben Melsted Torben Melsted 04.01.2023 08:28
USD/JPY has completed wave A with a test of 129.50. Wave B has taken over for a rally towards 141.25 in the days/weeks ahead. In corrective waves, the B-wave is always the hardest to predict in terms of shape, as all possible combinations are possible. This also means that wave B could make a new low below 129.50 before rallying higher towards the ideal target at 141.25. Let us be clear, we are not saying that wave B will make a new low. Wave B could be a simple zig-zag moving nicely higher from here. What we are saying is that all possible options within the wave theory are realistic in B-waves, which makes them almost unpredictable and very hard to trade.   Relevance up to 07:00 2023-01-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307266
The GBP/USD Pair Started A New Round Of Downward Correction

Experts Are Currently Most Worried About The British Economy

Paolo Greco Paolo Greco 04.01.2023 08:30
On Tuesday, the GBP/USD currency pair resumed its downward trend after a week and a half of flat trading. The downward trend just continued throughout this time because it was unable to even break through the moving average line, and yesterday the fall started again. There are numerous reasons why we are anticipating a further decline in the value of the pound sterling, as we have stated numerous times. First, experts are currently most worried about the British economy. It is stronger than its European or American counterparts. Second, the UK has the highest inflation and has only slowed down once so far. Third, the Bank of England's ability to tighten monetary policy "to the bitter end" is seriously questioned. In other words, to a pace at which we can confidently predict that inflation will return to the target level in the near term, not in ten years. Fourth, the British pound increased by 2,000 points in just 2.5 months during the second half of the year, which we deem to be unwarranted and excessive. As a result, we anticipate a decline to roughly the 15th level. After then, a protracted period of consolidation could start, during which moves of 400–500 points might alternate. Such a movement may appear as a flat or "swing" on a 24-hour TF, but we anticipate that in a few months, the market won't have enough variables to construct either an upward trend or a downward trend. There is a question that a new significant issue will emerge, which may steer the pair down a particular path for a considerable amount of time given the events of the previous three years, and, in the case of the UK, the previous six years. We would want to remind you that the coronavirus epidemic is still ongoing, that there is still a geopolitical crisis in Ukraine, and that Scotland could still leave the UK in the foreseeable future. While it is true that it is currently very difficult to predict how an independence referendum may proceed, this also shouldn't be wholly disregarded. The goal of the pound is to decrease. Even the typical macroeconomic numbers may not be sufficient for the British pound to stop dropping in the coming weeks or months. Yesterday is a good illustration of this. Trading went on, although there is no connection between German inflation and the British pound. As a result, in our judgment, technical factors now outweigh fundamental ones. After an unwarranted increase, the pound should adapt, and that says it all. This week, there won't be many significant publications or events in the UK. Indicators of business activity scarcely qualify as such, especially when we are discussing the second estimates of indicators for December. As a result, the ISM indices for the US services and manufacturing sectors, as well as nonfarm payrolls and unemployment, will have readings for the pair for the remainder of the first week of 2023. The data is all imported. Although weak data can still readily and freely cause the US dollar to decline, the pattern is becoming more significant. Even with mediocre American figures, the trend is negative, thus we are anticipating a maximum pullback upward before the collapse should begin. However, we do not think that the pound will attempt to reach its current absolute lows, which are close to the level of 1.0350, this year. There are also no solid justifications or bases for this. Although it is currently hard to determine when they will debut, they might do so in 2023. Nobody is certain of the future course of the military conflict in Ukraine or whether a new wave of a pandemic would spread around the world. The likelihood of a rise in the US dollar, which many continue to view as a "safe-haven" and the safest currency in the world, increases as the situation in Ukraine and throughout the world becomes more volatile. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 109 points. This number is the "average" for the pound/dollar exchange rate. So, on January 4, we anticipate movement that is contained within the channel and is constrained by the levels of 1.1877 and 1.2095. The Heiken Ashi indicator's downward turn indicates that the downward momentum has resumed. Nearest levels of support S1 – 1.1963 S2 – 1.1902 S3 – 1.1841 Nearest levels of resistance R1 – 1.2024 R2 – 1.2085 R3 – 1.2146 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair finished its sideways pattern and started back down. As a result, if the Heiken Ashi indicator reverses downward at this time, new short positions with objectives of 1.1902 and 1.1877 should be taken into consideration. Open long positions with goals of 1.2095 and 1.2146 as soon as the price is fixed above the moving average. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones Relevance up to 05:00 2023-01-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331407
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

Concerns Among Investors About The Demand Outlook For The Products Of Apple

Saxo Bank Saxo Bank 04.01.2023 08:57
Summary:  The share price of Tesla plunged 12% following releasing weak deliveries in December. Apple’s market value fell below US2 trillion for the first time since March 2021 on weakening demand for its MacBooks, the Apple Watch and Airpods. The USD bounced by 1% against EUR and GBP. Crude oil slid by 4% on higher OPEC daily production. On Wednesday, all eyes are on the US ISM Manufacturing Index, JOLTS job openings, and the December Fed minutes. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) slid with significant weakness in Apple and Tesla U.S. equities started the year weaker on Tuesday. S&P 500 slid 0.4% and Nasdaq 100 lost 0.8%. Energy, plunging 3.6% on a 4% decline in crude oil, was the worst-performing sector within the S&P 500 Index. Communication Services, up 1.4%, advanced the most, with Meta (META:xnas) up 3.7% and Alphabet (GOOGL:xnas) up 1.1%. Nasdaq 100 was dragged down particularly hard by the declines in the share prices of Apple (AAPL:xnas) which accounts for 13% index weighting and Tesla (TSLA:xnas) which accounts for 2.5% index weighting. Tesla fell by 12.3% after releasing weak December delivery data. Apple slid 3.4% on a Nikkei report suggesting potential weak demand for the company’s products, taking the company’s market value down below USD2 trillion, the first time since March 2021. Apple accounted for 13% in Nasdaq 100 weighting. Tesla plunged 12.3% on weak December deliveries Tesla announced Q4 deliveries of 405.3K coming short of the estimate at 420.8K and significantly below the 439.7K units produced in Q4. In this article, Peter Garnry suggests that Telsa is facing problems of elevated battery costs that forced the EV maker to raise prices and excessive electricity costs in Europe that weighs on demand. Some demand in the U.S. in Q4 might have been pushed into Q1 2023 by the EV purchase tax credit in the Inflation Reduction Act. The share price of Tesla plunged 12.3% on Tuesday, its largest decline by percentage since September 2020. Apple fell by 3.4% on reportedly weakening demand for its MacBooks, the Apple Watch and Airpods A Nikkei article reported that “Apple has notified several suppliers to build fewer components for Airpods, the Apple Watch and MacBooks for the first quarter, citing weakening demand”. The article stirred up concerns among investors about the demand outlook for the products of the consumer electronics giant. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rallied with yields on the 10-year 14bps richer to 3.74% Bids returned to Treasuries as German Bunds jumped in price following German CPI coming in softer than expectations.  Yields on 10-year German bunds fell by 6bps on Tuesday and by 18 bps since the New Year. On the tape, former Fed Chair Aland Greenspan and former New York Fed President Bill Dudley said a not-too-severe U.S. recession was the most likely outcome. The 10-year segment led the rally, with yields 14bps richer to 3.74%. Yields on the 2-year fell by 6bps to 4.37%. The corporate issuance calendar was busy with 19 investment grade bonds for a total of over 30 billion issued on Tuesday. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) On its first day of trading in 2023, Hang Seng Index opened lower but rallied to post a 1.8% gain. Hang Seng TECH Index (HSTECH.I) climbed 1.9%. Chinese telco, consumer, electricity utilities, pharmaceuticals, autos, and Macao casino operators led the charge higher. It is widely expected that the border between the mainland and Hong Kong will be reopened as soon as January 8, 2023. In addition, a rebound in mobility data in some large Chinese cities, such as Guangzhou, Chongqing, Shanghai, and Beijing helped market sentiment. Investors brushed off the weak December NBS PMI reports released during the holiday and the Caixin PMI on Tuesday and the seemingly inevitable surge and spread of Covid inflections during the initial stage of relaxation of pandemic containment in China to focus on the improved economic outlook in mainland China and Hong Kong for 2023. Southbound flows into Hong Kong amounted to a decent HKD4.25 billion, of which buying in Tencent (00700:xhkg) accounted for HKD1.58 billion. Following the release of strong December sales, BYD rose by 4.7%, Li Auto by 10.5%, and Xpeng by 7.8%.  China’s CSI 300 Index gained 0.4%, with computing, communication, media, and defense names gaining the most. FX: the dollar gained 1% versus EUR and GBP As Saxo’s Head of FX Strategy, John Hardy, put it in his note, USD wakes up with a bang ass US market come back on line. Softer CPI prints from Germany triggered selling in the Euro and saw EURUSD down 1%. The pound sterling also slid 1% versus the dollar. The Yen held on relatively well, after briefly strengthening to 129.52, finished the day little changed at around 131. Crude oil fell nearly 4% on higher OPEC production WTI crude fell 3.9% on Tuesday following production by OPEC countries increased by 150,000 barrels to 29.14 million barrels a day, partly due to higher output from Nigeria. The warmer-than-normal weather in the U.S. and Europe also weighed on the market sentiment. What to consider? German December CPI softer than expectations Germany released headline CPI at 8.6% Y/Y below the street estimate of 9.0%Y/Y and November’s 10.0%. Germany’s EU Harmonized CPI came in at 9.6% Y/Y, falling from the 10.2% expected and 11.3% in November. U.S. ISM Manufacturing Index, JOLTS Job openings, and the December FOMC minutes to focus on Wednesday We have a busy economic calendar in the U.S. on Wednesday. The ISM Manufacturing Index is generally considered by investors as one of the key indicators in the recession question. The Bloomberg consensus estimate is calling for a further decline into the contractionary territory to 48.5 in December from 49.0 in November. JOTLS job openings (consensus 10.05 million; Nov 10.33 million) will also be closely monitored as the data series was highlighted by Fed Chair Powell almost every time in his assessment of the state of the labor market and monetary policies. Finally, at 2pm US EST, we will have the minutes from the Fed’s December FOMC meeting. For a global look at markets – tune into our Podcast. Source: Market Insights Today: – Apple and Tesla plunged; ISM, JOLTS, and Fed minutes the focus on Wednesday - 4 January 2023 | Saxo Group (home.saxo)
US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

Tesla Had A Bad Start To 2023, US Treasury Yields Fell Sharply

Saxo Bank Saxo Bank 04.01.2023 09:10
Summary:  US equities got off to a choppy start in 2023 with a slightly weak session yesterday, but with notable weakness in high profile companies like Tesla after it reported weak Q4 deliveries, while market cap leader Apple posted a new cycle low. The US dollar traded was choppy in volatile trading but generally ended the day on the strong side, even as US treasury yields dropped. Gold chopped back and forth but surged back toward yesterday’s highs overnight.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures started the year’s first day of trading yesterday with the element that they had plenty of in 2022, namely volatility. The index futures started rallying in the beginning of the session helped by positive sentiment in Europe and China trading up as much as 1.2% at the intraday high, but spillover effect on sentiment from the slide in Tesla shares and related technology stocks took S&P 500 futures down 0.4%. The intraday price range in S&P 500 futures was more than 2%. The first important macro events of the year are the ISM Manufacturing and the JOLTS Job Openings report for December which could move interest rates and inflation expectations and thus US equity futures later in the session. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) Hang Seng Index rallied for the second straight session in 2023 rising by 1.8%. Hang Seng TECH Index surged 3.4%, led by Alibaba (09988:xhkg)  soared more than 7% following the news that the Chinese authorities approved an increase in registered capital of the consumer finance unit of Ant Group. Shares of Chinese developers and management services providers climbed on anticipation of state support from the state-owned Economic Daily emphasizing the importance of the real estate sector to the economy in its editorial. Longfor (00960:xhkg) and Country Garden Services (06098:xhkg) each jumped around 10%, being the top performers of the Hang Seng Index. Sunny Optical (02382:xhkg), a supplier to Apple (AAPL:xnas), plunged 12% on analyst downgrades and a Nikkei report that “Apple has notified several suppliers to build fewer components for Airpods, the Apple Watch and MacBooks for the first quarter, citing weakening demand”. CSI 300 is unchanged. FX: Yesterday’s USD rally moderates. AUD surges on possible end of Chinese coal ban The US dollar surged yesterday for no readily apparent reason, even as US treasury yields dropped and risk sentiment was strong early in the day. The rest of the day saw very choppy action that suggests currency traders are struggling to find their feet in 2023, although the greenback generally ended the day stronger than where it started ahead of the first important macro data of the year this Friday. Overnight, the Aussie surged sharply, erasing the AUDUSD losses yesterday and seeing AUDNZD to new local highs as Chinese authorities discussed a partial lifting of the Australia coal import ban. Crude oil (CLG3 & LCOH3) Crude oil futures, led by gasoline and diesel, turned sharply lower during its first full day of trading with the early 2023 focus being centred around a short-term deterioration in demand as China struggles with Covid-19, milder weather reduces demand for heating fuels and the IMF’s latest warning that one third of the world may suffer recession in 2023. OPEC increased production by 150k b/d last month according to a Bloomberg survey as Nigeria, currently producing below its quota, ramped up production. US production meanwhile is expected to rise by just 600k b/d in 2023, with the pre-pandemic record peak at 13m b/d remaining out of sight. On the supply side Russia’s December shipments of oil slumped to the lowest for 2022 driven by storm disruptions and a shortage of vessels. In Brent, the uptrend from early December looks challenged with a break below $81 signalling further loss of momentum, initially towards $79.65.  Gold (XAUUSD), silver (XAGUSD) and platinum (XPTUSD) This trio of investment and semi-industrial metals, led by gold’s break higher, are the only commodities trading in the black this week. On Tuesday, sudden dollar strength was being offset by a sharp fall in US treasury yields, both highlighting weak risk sentiment at the beginning of a new trading year. In general, we are looking for a price friendly 2023 for investment metals supported by recession and stock market valuation risks, an eventual peak in central bank rates combined with the prospect of a weaker dollar and inflation not returning to the expected sub-3% level by yearend. However, in the short-term continued dollar strength - as risk appetite elsewhere suffers - may prove too hard to ignore, thereby raising the prospect for a correction and better buying levels. Focus on today’s FOMC minutes and Friday’s US job report. Key support in gold at $1801 with trendline resistance at $1852 being followed by $1878. Yields on US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) fall sharply on US first trading day of 2023 US Treasury yields fell sharply all along the curve, but fell the most at the longer end of the curve, with the 10-year yield benchmark down almost 15 basis points to 3.73%. Some of the move was in sympathy with European yields, which dropped on a much softer than expected German CPI print.  The 10-year US Treasury yield level to watch to the upside is perhaps the 4.00% area ahead of the 4.34% high from October, which is a 15-year high. To the downside, the cycle lows below 3.50% (intraday cycle low was 3.40%) are the focus, with the first major test of the US Treasury market up this Friday on the release of US jobs data and the December ISM Services index and next week on the December CPI report on Thursday, January 12. What is going on? US House Republicans so far failing to elect new Speaker of the House A minority of more Trumpist-leaning Republicans are holding back the election of Kevin McCarthy to become the next Speaker, as he failed to win approval after three rounds of voting yesterday. The House is unable to conduct any kind of business until a new Speaker is elected, and the degree of dysfunction in the House over the next two years will likely be determined by the identity of the leader in the house. Inflation is cooling down in Germany Germany December CPI rose 8.7 % year-over-year against prior 10.4 %. The monthly decline is astounding: minus 1.0 % from November to December. In parallel, inflation also slowed down in Germany’s largest state by population – North Rhine Westphalia – with CPI out at minus 1.0 % month-over-month. This matters because it is one of the major industrial states. The drop is partially explained by the drop in energy prices and the one-time government support to reduce the gas bills of households and SMEs. This means the decline in inflation may not last. It will highly depend on the evolution of energy prices this winter. But this is a welcome figure as we kick off the new year. Officials in China discuss easing Australia coal import ban Bloomberg is breaking this story, citing sources familiar with the matter, which claim that bureaucrats are proposing allowing a few major coal consumers in China to resume imports as soon as April 1. The Australian dollar jumped sharply in response, as did Australian coal exporters, and even major miner BHP Billiton posted a strong session overnight. Tesla shares plunge 12% to lowest levels since August 2020 Tesla had a bad start to 2023 as the EV maker reported worse than expected Q4 deliveries Tuesday night trailing the productions figures for the quarter expanding the gap between production and deliveries to a new high. Investors are speculating whether Tesla is facing a demand issue and the recent implemented discounts to entice buyers are still in place suggesting Tesla is willing to sacrifice its operating margin at the expense of keeping up demand to maintain high utilization of its factory capacity. Read our take on Tesla in yesterday’s equity note. What are we watching next? November JOLTS Job openings up later, FOMC Minutes up tonight The JOLTS survey of job openings dropped in October back toward the low for 2022 at just above 10.3M as the November release today is expected to post a new cycle low near 10.0M. Still, these numbers are far north of the previous pre-pandemic record near 7.5M. The FOMC minutes tonight may not move markets much, but are worth watching for where FOMC members are expressing their inflation concerns. Earnings to watch The earnings calendar is light in the first week of the new year, but in a couple of weeks the first Q4 earnings releases will begin to be released. The Q4 earnings season will continue its focus on margin pressures related to input costs on employees and raw materials including energy. This week’s earnings focus is Walgreens Boots Alliance (WBA) and Conagra Brands, with WBA expected to -3% revenue growth y/y for the quarter that ended on 30 November adding to the series of quarters with negative revenue growth. Conagra Brands is expected to deliver 7% revenue growth y/y for the quarter that ended on 30 November as the manufacturer of packaged foods is able to pass on inflation to its customers. Thursday: Walgreens Boots Alliance, Conagra Brands, Lamb Weston, Constellation Brands, RPM International Friday: Naturgy Energy Economic calendar highlights for today (times GMT) 0745 – France December Flash CPI 0815-0900 – Eurozone final December Services PMI 0930 – UK Nov. Consumer Credit/Mortgage Approvals 1500 – US Dec. ISM Manufacturing  1500 – US Nov. JOLTS Jobs openings 1900 – US FOMC Minutes 2130 – API's Weekly Crude and Fuel Inventory Report 0145 – China Dec. Caixin Services PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – January 4, 2023 | Saxo Group (home.saxo)
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The Loonie Pair (UAD/CAD) Is Likely To Face Barricades Around The Horizontal Resistance

TeleTrade Comments TeleTrade Comments 04.01.2023 09:14
The risk-off market mood in global markets has strengthened the US Dollar, A bull cross, represented by the 20-and 50-EMAs at 1.3578, indicates more upside ahead. The RSI (14) has jumped into the bullish range of 60.00-80.00, which supports the Greenback. The USD/CAD pair has dropped to near 1.3636 in the Asian session after multiple failed attempts of breaking above the critical resistance of 1.3680. The US Dollar Index is delivering a subdued performance as investors are restricting themselves from making potential positions before the release of the United States ISM Manufacturing PMI data. Meanwhile, S&P500 futures are attempting to recover after a two-day sell-off, however, the resilience in recovery is still missing, which indicates that the risk profile is still negative. Investors should note that the trend has turned bullish on a four-hour scale after remaining topsy-turvy for a long period. The Loonie asset is likely to face barricades around the horizontal resistance plotted near the round-level hurdle of 1.3700. A bull cross, represented by the 20-and 50-period Exponential Moving Averages (EMAs) at 1.3578, indicates more upside ahead. Meanwhile, the Relative Strength Index (RSI) (14) has jumped into the bullish range of 60.00-80.00, which indicates more upside ahead. A decisive break above the December 16 high around 1.3700 will strengthen the US Dollar and will drive the Loonie asset toward October 25 high at 1.3748 and November 3 high at 1.3808. On the contrary, the major could drop to November 23 high at 1.3440 after surrendering the psychological support of 1.3500. Later on, a slippage below 1.3440 will expose the Loonie asset for more downside towards December 5 low at 1.3385. USD/CAD four-hour chart  
Growth Of The USD/JPY Pair Is Hampered By Resistance

The USD/JPY Pair Rebounded As Investors Underpinned The US Dollar Amid A Risk-Off Market Mood

TeleTrade Comments TeleTrade Comments 04.01.2023 09:15
USD/JPY is struggling to extend its recovery above 131.00. A spree of lower highs in the asset indicates a continuation of the downside trend. Downward-sloping 20-and 50-EMAs add to the downside filters. The USD/JPY pair is struggling to extend its recovery above 131.00 in the early European session. Earlier, the asset rebounded after sensing buying interest around 129.50 as investors underpinned the US Dollar amid a risk-off market mood. The US Dollar Index (DXY) is displaying a subdued performance as investors are awaiting a fresh trigger for a decisive move. On a four-hour scale, one could easily identify the continuation of the downtrend and the absence of any recovery move from the US Dollar. The Relative Strength Index (RSI) (14) is constantly failing to overstep 60.00, which indicates the presence of a ‘sell on rise’ context in the trading activity. Apart from that, downward-sloping 20-and 50-period Exponential Moving Averages (EMAs) at 131.15 and 132.15 indicates more weakness ahead. It would be prudent to wait for a pullback move to near the 50-period EMA around 132.15 for building a short position, which will drag the asset toward the psychological resistance at 130.00 followed by May 4 low at 128.63. On the flip side, a rebound move above December 29 high at 134.50 will drive the asset towards December 7 low around 134.00. A breach above the latter will send the asset towards December 20 high at 137.47. USD/JPY four-hour chart  
Warsaw Stock Exchange SA Approves Dividend Payout: Neutral Impact Expected

The US Dollar Index: The Drop Could Be Still Considered As A Pullback

Oscar Ton Oscar Ton 04.01.2023 10:09
Technical outlook: The US dollar index rallied through 104.50 during the New York session on Tuesday as projected before facing resistance. The index has slipped sharply towards the 103.50-60 area as the European sessions opened on Wednesday. The drop could be still considered as a pullback before the bulls are back in control pushing the price towards 105.50 and 107.00 respectively. The US dollar index might have terminated its larger-degree corrective drop at 103.05 as seen on the 4H chart presented here. It further managed to carve a higher low around 103.12 last week before producing a rally of over 120 points. Ideally, the bulls would keep control and push the instrument through 107.00 at least, provided that 103.05 holds well. The short-term wave structure could be described as follows. The first leg higher was completed at 104.50 on Tuesday as the second wave retraces back to the 103.50-60 zone. If the above structure holds well, prices would stay above 103.05 and continue pushing higher as the third wave unfolds. Only a break below 103.00 would nullify the above bullish structure. Trading idea: Potential bullish move against 102.00 Good luck!       Relevance up to 09:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307296
OPEC+ Meeting: Saudi Arabia Implements Deeper Voluntary Cuts to Boost Oil Prices

The Oil Market Is Showing A Strong Local Drop In Prices

InstaForex Analysis InstaForex Analysis 04.01.2023 11:32
Problems of tech companies in the US appeared again, causing the local market to fall. Similarly, the European market fell because right after a significant increase, shares of TESLA and APPLE collapsed by more than 14% and 4% respectively, resulting in a negative closing of stock indices. This shattered all hopes of a rise in demand for equities, which had been expected at the start of the new year. The forex market could not stay away from the situation of the stock market either as dollar began to rise before the opening of the US trading session. The driver was the growing expectations of lower inflation in Europe, which was influenced by the CPI data from Germany. This increased the likelihood that other global central banks will follow the Fed in taking a pause in raising interest rates. The oil market also came under pressure, showing a strong local drop in prices. Most likely, the negative sentiment will continue if the minutes of the December Fed meeting, which is due out today, do not hint at a pause in rate hikes in the 1st quarter of the new fiscal year. The labor market data not showing a slowdown in growth will give a similar effect. The turning point could be the upcoming US consumer inflation figures as markets will surely shift from bearish to bullish once the data shows a slowdown. This could be accompanied by a marked weakening of dollar. Many remain optimistic on a global reversal in markets. Forecasts for today: USD/JPY The pair is trading below 131.40. If market sentiment improves today, there will be a local recovery towards 132.50. AUD/USD The pair is trading below 0.6825. Again, if the situation in the markets stabilizes and investor sentiment improves, the pair will rise above 0.6825 and surge to 0.6900 Relevance up to 06:00 2023-01-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331411
Decarbonizing Steel: Contrasting Coal-based and Hydrogen-based Production Methods

FX: The Entire CEE Region Has Regained Its Relationship With Gas Prices, Which Is Driving FX To New Gains

ING Economics ING Economics 04.01.2023 11:38
The dollar has started 2023 with some stability after suffering heaving losses for large parts of the last quarter. Asset managers keen to earn their fees will be looking to put money to work and will probably be positively assessing developments in China. Yet the dollar is seasonally strong in January and February and may hold up better than most think USD: JOLTS and FOMC minutes in focus today The dollar has started the year on a slightly firmer footing, where it has strengthened against all G10 currencies except the Japanese yen (JPY). That is a far cry from the 2% (vs Canadian dollar) to 13% (vs New Zealand dollar) losses suffered by the dollar in 4Q22. Even though December is seasonally a negative period for the dollar, some stability was actually seen on the back of the Federal Reserve's hawkish hike. We felt at the time that the Fed story providing some support to short-dated US yields could help the dollar, which has seemed to be the case. That Fed story will remain a key driver of the dollar and global asset market trends in 2023. The market has been pretty resolute in pricing further Fed tightening to 4.95/5.00% next spring/summer and then a 200bp easing cycle within two years to leave Fed funds at some kind of neutral 3% rate into 2025. That pricing will no doubt be challenged over the coming weeks and months. For example, today's focus will be on the November JOLTS job opening data, which is expected to decline to 10 million from 10.33 million. How this data emerges versus the consensus will shape views on how quickly the tight US labour market is unwinding and whether the Fed can show less concern about frustratingly high inflation. More insights into Fed thinking on the subject will be found in the release of the December FOMC minutes at 20CET.  Away from the Fed, all eyes are on developments in China and whether the liberalisation of Covid containment policies can prompt a re-rating of 2023 Chinese and global growth prospects. It feels a little too early for fund managers to bet the farm on this story, where instead the nation appears to be weathering the storm before shutting down for the Lunar New Year on 23 January. That said, global growth prospects are also receiving a lift from the sharp fall in global energy prices (especially gas) and thus it should not be a surprise to see equity markets starting the New Year on the front foot. Seasonally, January and February are strong months for the dollar and we favour some modest retracement of the heavy dollar losses seen last quarter. Should Fed and global activity (weak PMIs) allow, we have a slight bias that DXY can recover to the 106 area near term - perhaps even to 108 over the next two months. Chris Turner EUR: Benign winds EUR/USD has started 2023 on a slightly softer footing, but it is hard to argue that it needs to fall even more sharply. A major driver of the euro's drop last summer had been the terms of trade story on high gas prices - a story that has completely reversed since September. Equally, the risk environment starts the year with a glass half full/recessions will be mild approach and the dramatic narrowing in two-year EUR:USD swap spreads cannot be hurting EUR/USD either. As it stands then, there does not seem to be a strong and immediate case for EUR/USD to break back down to the 200-day moving average near 1.03. Perhaps one can expect a 1.0500-1.0750 range to build over coming sessions, with Friday's US December jobs data a possible catalyst for a range breakout. Elsewhere, we today see Swiss CPI data for December. We said in our Swiss National Bank (SNB) review back in December that the SNB probably wanted to keep the real Swiss franc strong for the time being as it battled above-target inflation. Assuming Swiss inflation stays near 3% year-on-year in today's release, we would assume the SNB has an interest in keeping EUR/CHF below the 0.9900/9910 area as it continues with its two-sided FX intervention campaign. Chris Turner GBP: Settling after a lively December After a very lively December, EUR/GBP looks to be settling into a trading range above 0.8800. That big rally from 0.86 to a high of 0.8875 was largely driven by the divergence in European Central Bank and Bank of England policy, where the BOE's dovish hike stood in stark contrast to the ECB's move. We had felt that the 0.88/0.89 area was a fair level for EUR/GBP towards year-end and into 1Q23 and sterling's performance this year will probably be driven by how soon the BoE can stop tightening and how quickly expectations of an easing cycle can build.  We are a little more bearish on GBP/USD, where we think the 200bp Fed easing cycle priced from summer 2023 could be pared back a little. 1.1650 would be the GBP/USD target were US (especially price/wages) data to surprise on the upside. Chris Turner CEE: Falling gas prices kick start the region to fuel new gains On today's agenda is the meeting of the National Bank of Poland. We expect rates to remain unchanged and the rhetoric to be the same as in the December meeting. The new forecast will be published only in March, so there is not much to discuss here. The governor's press conference will take place tomorrow at 3pm local time. Also tomorrow, Polish inflation for December will be published, as always the first in the region. Inflation is expected to fall again at an annual rate, but we think this is not the end of the story and the January and February numbers should show a rebound. Then on Friday, the monthly data set from the Czech Republic will be of interest, which so far suggests the deepest recession in the region. We expect November's industry numbers to bring year-on-year growth back into negative territory. On the FX front, the market is only slowly returning from low Christmas liquidity back to normal. While locally, market rates remain highly volatile resulting in more of a decline in interest rate differentials versus the euro, global conditions prevail and support further rallies in the region. Favourable EUR/USD levels are no doubt helping, but the main reason in our view is the massive drop in gas prices over the past two weeks. The entire CEE region has regained its relationship with gas prices, which is driving FX to new gains. The Czech koruna touched EUR/CZK 24.050 yesterday, the strongest level since April 2011, leading the rally in the region. Similarly, the Hungarian forint also took advantage of the favourable global conditions and pegged to the EUR/HUF 400 level. However, gas prices seem to have stabilised and hence this driver should not support these two currencies in the coming days any further. On the other hand, the Polish zloty and the Romanian leu, despite a likely weaker relationship with gas prices, have lagged and could still benefit from this in the coming days. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Russia's Weekend Mutiny and Gold's Bounce off Support Raise Concerns; Verbal Intervention in USD/JPY and US Banking Stocks Tumble Ahead of Fed's Stress Test Results

Saxo Bank Podcast: Lifting Risk Sentiment And Seeing A Weaker US Dollar

Saxo Bank Saxo Bank 04.01.2023 12:45
Summary:  Today, we note that today's inter-market picture makes far more sense than what we saw yesterday as some low inflation data in Europe is helping to drive global bond yields lower, lifting risk sentiment and seeing a weaker US dollar. This came after a volatile and confusing day yesterday. The biggest winner of the first couple of days this year has been gold, which has soared above major resistance. We also look at the latest Tesla plunge and some of the network effects that may be aggravating its decline, discuss the reversal in crude oil prices and new lows in natural gas prices and how markets may continue to flourish on signs of a weakening economy. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Read next: How Dream Sports Built Its Value, High Inflation And Its Impact On The Hedge Fund| FXMAG.COM Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Read next:Exxon And Chevron Abandon The Global Market And Focus On The Americas| FXMAG.COM Source: Podcast: Global markets getting back in synch today | Saxo Group (home.saxo)
The Drop In German Inflation Is Welcome News, But It Is Mean That Can We Say That Inflation Has Peaked?

The Drop In German Inflation Is Welcome News, But It Is Mean That Can We Say That Inflation Has Peaked?

Kenny Fisher Kenny Fisher 04.01.2023 12:52
After a dreadful showing on Tuesday, EUR/USD has rebounded today. In the European session, the euro is trading at 1.0618, up 0.66%. Investors eye German CPI German CPI was lower than expected in December. CPI slowed to 9.6%, down sharply from 11.3% in November and below the consensus of 10.7%. This marked the first time that German inflation has fallen into single digits since the summer. Spanish inflation, released last week, also slowed in December. The next test is the release of eurozone inflation on Friday. Inflation is expected to fall to 9.7%, down from November’s 10.1%. The drop in German inflation is welcome news, but two caveats are in order. First, the German government enacted a price cap for electricity and gas in December, which meant that energy inflation slowed in December. However, services inflation, which is a more accurate gauge of price pressures, rose to 3.9% in December, up from 3.6% a month earlier. Second, inflation remains at unacceptably high levels. Germany’s annual inflation in 2022 hit 7.9%, its highest level since 1951. If eurozone inflation follows the German lead and heads lower, can we say that inflation has peaked? Some investors may think so, but I wouldn’t expect ECB policy makers to banter around the “P” word. The central bank reacted very slowly to the surge in inflation and has been playing catch-up as it tightens policy. Lagarde & Co. will therefore be very cautious before declaring victory over inflation. If eurozone inflation drops significantly in the upcoming release, it will provide some relief for the ECB in its battle with inflation. The ECB has adopted a hawkish stance, and the markets are still expecting a 50-bp hike at the February 2nd meeting. In the US, the markets are back in full swing after the holidays. Today’s key events are ISM Manufacturing PMI and the minutes from the Fed’s December meeting. In October, the PMI contracted for the first time since May 2020, with a reading of 49.0 (the 50.0 threshold separates contraction from expansion). Another weak reading is expected, with a forecast of 48.5 points. The Fed minutes will make for interesting reading, providing details about the Fed’s commitment to continue raising rates, which surprised the markets and sent the US dollar sharply higher.   EUR/USD Technical EUR/USD is putting pressure on resistance at 1.0636. Next, there is resistance at 1.0674 There is support at 1.0566 and 1.0487 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Metals Market Update: Decline in LME Copper On-Warrant Stocks, Zinc and Lead Surplus Continues, Nickel Market in Supply Surplus

The EUR/USD Pair Is Trading Above 1.06 Again, The USD/JPY Pair Is Close To Level Of 131

Kamila Szypuła Kamila Szypuła 04.01.2023 14:38
The dollar fell on Wednesday, losing against currencies such as the Australian dollar and against the euro, which gained ground on the data series. The dollar was already under pressure from investors becoming more optimistic about the prospect that China's easing of strict COVID restrictions would breathe life into the world's second-largest economy. Wednesday's data showed that consumer price pressure in France fell much more than expected in December, while the previous day's data from Germany also showed that inflation fell much more than expected. Last week's Spanish inflation data painted a similar picture. The Fed meeting minutes from the last Federal Open Market Committee (FOMC) meeting are due to be released later and may shed more light on the board's outlook for the monetary policy tightening cycle. Perhaps more importantly, the market will also be watching employment and inflation figures ahead of the next FOMC meeting in early February. EUR/USD The euro saw its biggest one-day fall against the dollar on Tuesday. Today, the EUR/USD pair is trading above 1.06 again. The breakout took place during the European session, in the asia session the pair stayed below 1.06 The Eurozone showed resilience in late 2022 with plenty of positive data, which so far looks set to continue into 2023. Yesterday brought more positive data as German inflation figures came in at -0.8% vs. forecast - 0.3% with unemployment rate beating estimates. French flash inflation figures were released earlier today, further strengthening the narrative. The S&P Global Eurozone PMI Composite Output Index remains below 50 and is down for the sixth consecutive month at 49.3, up from 47.8 in November. The data signaled the slowest decline since July last year, when activity levels began to decline. This decline has moderated in each of the last two periods of the study. Eurozone Services PMI business activity index rose to 49.8 in December from 48.5 in November. Source: investing.com Read next: Exxon And Chevron Abandon The Global Market And Focus On The Americas| FXMAG.COM USD/JPY The yen pair in the European session is heading towards 131. Japan's manufacturing PMI declined slightly in December. AUD/USD The Australian dollar surged towards 0.68 on Wednesday. Moreover, some experts believe that AUD/USD is moving towards 0.69. The current level of the pair shows that it is further than close to this level. The Australian was driven by optimism that . China considers partial lifting of Australia's coal mining ban Read next: How Dream Sports Built Its Value, High Inflation And Its Impact On The Hedge Fund| FXMAG.COM GBP/USD Sterling rose against the weakening dollar and was slightly higher against the euro as the easing of COVID rules in China prompted investors to bid on risky currencies. The cable market in the morning session stayed below 1.20, in the European session there was a breakout and the pair returned to htrading around 1.2050. ING analysts warned of a potential bearish sentiment in the pound against the US dollar. ING analysts believe that sterling's performance against the euro this year will likely depend on how quickly the Bank of England (BoE) can stop tightening monetary policy. Investors see potential bullish signals for the single currency against the pound if the ECB continues to raise interest rates while the BoE sends mixed messages. Source: investing.com, dailyfx.com, finance.yahoo.com
The Euro May Attempt To Resume An Upward Movement

The EUR/USD Pair Has A Potential For Bearish Drop

Oscar Ton Oscar Ton 05.01.2023 08:01
Technical outlook: EURUSD has been trading within a narrow range for the last 24 hours, after pulling back higher from 1.0520. The single currency pair is seen to be trading around 1.0600 at this point in writing and is expected to remain sideways for a while before the bears are back in control. A break below 1.0520 will open the door to drop towards at least 1.0440 and 1.0350 in the near term. EURUSD seems to have terminated its larger-degree corrective rally to a 1.0736 high over the last week of December 2022. Prices reversed from a convergence of the trend line resistance and the Fibonacci 0.382 retracement of its earlier drop between 1.2266 and 0.9535 as seen on the daily chart here. It is likely that a larger-degree downtrend has resumed against 1.0736 now. EURUSD could proceed towards 0.9535 and lower in that case in the next several weeks. Alternatively, if prices are to resume higher above 1.0736, the instrument needs to produce a corrective drop towards 1.0350 and up to the 1.0000-50 area. Either way, a high probability remains for a drop from current levels to 1.0350 at least, before finding support. Trading idea: Potential bearish drop against 1.0736 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307423
The EUR/USD Pair Has A Potential For The Breakout Mode

The Downward Movement Of The EUR/USD Pair Will Resume

Paolo Greco Paolo Greco 05.01.2023 08:07
M5 chart of EUR/USD EUR/USD quickly returned to the 1.0581-1.0658 horizontal channel on Thursday and it moved exclusively sideways for most of the day. I certainly don't think that the flat will resume now, though we cannot totally rule it out. Anyway, important macro data are coming out now, the holidays are coming to an end, representatives of central banks will soon come back to work and there will be their speeches. However, after the quotes closed below the horizontal channel on Tuesday the downward movement did not continue, which is important. On the one hand, it might mean a pullback to the upside, after which the fall will resume. On the other hand, there were no reasons for the euro to fall on Tuesday, so the market may just admit its mistake and continue moving in the flat. Tomorrow's EU and US macro data is against the second version, as it is hard to imagine that the inflation and non-farms reports will be ignored by the market. All of Wednesday's trading signals were formed in the 1.0581-1.0623 area. That is, in the 40-point range, where the Senkou Span B and Kijun Sen lines ran. Therefore, each time a signal was formed, the price was almost immediately near the next important line or level. Theoretically, it was possible to "add" some ten points of profit, but we leave these decisions to traders, because not everybody likes to trade in the absolute flat. In any case almost all trade signals were not false. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, non-commercial traders opened 2,700 long positions, whereas the number of short positions fell by 1,100. Thus, the net positions rose by 3,800. The number of long positions is 146,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 41,000 (685,000 vs. 644,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD clearly returned to the lines of the Ichimoku indicator, so now it is the moment of truth. If the price clearly bounces from these lines, the downward movement will resume. If not, the flat may resume. After Friday the pair could go anywhere because the macroeconomic background will be very strong on that day. On Thursday, the pair may trade at the following levels: 1.0269, 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, and also Senkou Span B lines (1.0631) and Kijun Sen (1.0616). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 5, the U.S. will release ADP private sector workers report, unemployment claims and the second estimate of the service sector business activity index for December. All three reports are considered to be of little importance, so I don't expect the market to react to them. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 05:00 2023-01-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331496
FX Daily: Asymmetrical upside risks for the dollar today

The Next Move Of The US Dollar Index Should Be Higher

Oscar Ton Oscar Ton 05.01.2023 08:08
Technical outlook: The US dollar index is forming a potential low around the 103.50-60 zone after reversing from 104.50 early this week. The index is seen to be trading close to 104.00 at this point in writing as the bulls are looking poised to come back in control. Prices are expected to rally towards 105.50 and to 107.00 in the near term. The 103.00-05 handle should remain intact for the bullish outlook to hold. The US dollar index seems to have terminated its larger-degree corrective drop, which began from the 114.70 highs earlier to 103.05 recently. Furthermore, a higher high has also been carved around 103.12 last week of December 2022. A high probability remains for a continued rally from here towards 107.00 and up to the 110.00-50 zone at the most. The US dollar index has further unfolded its lower-degree upswing between 103.12 and 104.50 respectively. The drop to 103.50-60 thereafter is seen as a retracement/pullback, which looks complete. If the above structure holds well, the next move should be higher towards 105.50 and 107.00 in the near term. We will review the trend around 107.00 and decide on the next move. Trading idea: Potential rally towards 107.00 against 102.00 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307427
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

GBP/USD Pair: Traders Now Have The Right To Expect The Flat

Paolo Greco Paolo Greco 05.01.2023 08:14
M5 chart of GBP/USD On Wednesday, GBP/USD returned both to the horizontal channel and to the area between the Kijun-Sen and Senkou Span B lines. Thus, the pair is exactly where it has been for the last few weeks - in an absolute flat between 1.2007-1.2106. Right now I don't think that the flat has resumed, but we cannot fully exclude such an option. We should keep in mind that there were no reasons for the pound to fall by 150 points on Tuesday. So yesterday, the market could simply return to its initial positions. In fact, the only macroeconomic event was the US ISM Manufacturing PMI. It fell to 48.4 points in December, which was worse than the most pessimistic forecasts. So overall, we can consider the dollar's fall as logical. The fall happened at night and in the morning, and during the day the pair was in the same place. That's why I think that there was almost no reaction to the ISM report. Speaking of Wednesday's trading signals, it was as simple as possible. There was a buy signal in the 1.1974-1.2007 area in the morning, inside which also lay the Kijun-sen line. A consolidation above this area made it possible for traders to open long positions, but for the rest of the day, the price failed to reach the nearest target level of 1.2106. Therefore, a long position should have been closed manually anyway. The profit on it was 30-40 pips, which is not too bad. COT report The latest COT report showed that bearish sentiment had weakened. During the given period, non-commercial traders opened 5,300 long positions and as many as 10,600 short positions. Thus, the net position fell by about 5,300. This figure has been on the rise for several months, and the sentiment may become bullish in the near future. Although the pound has grown against the dollar for the last few weeks, it is still difficult to answer why it keeps rising. On the other hand, it could fall in the near future (in the mid-term prospect) because it still needs a correction. In general, in recent months the COT reports correspond to the pound's movements so there shouldn't be any questions. Since the net position is not even bullish yet, buying may continue for a few months to come. Non-commercial traders now hold 40,600,000 long positions and 51,500 short ones. I am still skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD sharply left the horizontal channel and also sharply returned to it. Thus, traders now have the right to expect the flat. Granted that I expect the pound to fall, so far there aren't many technical signals for selling. Such signals may be considered as a rebound from the Senkou Span B line or consolidation below the critical line, which lies just at the bottom limit of the horizontal channel. On January 5, the pair may trade at the following levels: 1.1645, 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259. Senkou Span B (1.2092) and Kijun Sen (1.2003) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Thursday, the UK will publish the index of business activity in the service sector in the second estimate for December, which may rise to 50.0. But I don't think this report is overly important. The only other important data in America are ADP, unemployment claims and S&P service sector index for December second estimate. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.      Relevance up to 06:00 2023-01-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331498
The USD/JPY Price Reversed From The Lower Limit

The USD/JPY Pair Broke Without Problems Through Minor Resistance

Torben Melsted Torben Melsted 05.01.2023 08:18
USD/JPY recovered nicely yesterday and broke without problems through minor resistance at 130.73 telling us, that wave A has completed and wave B now is unfolding towards the ideal target seen near 141.25. The next hurdle to look for is seen at 134.45 and we do expect the first attempt to break above here to be rejected for a corrective decline towards at least the 132.10 - 132.60 area before the next attempt to break through for a continuation towards the 141.25 target. Short-term we see support near 131.42 which we expect will act as a floor for the rally towards 134.45. Read next: The EUR/USD Pair Is Trading Above 1.06 Again, The USD/JPY Pair Is Close To Level Of 131| FXMAG.COM Relevance up to 07:00 2023-01-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307430
China: PMI positively surprises the market

On Thursday, The USD/CNY Central Rate Is At 6.8926

TeleTrade Comments TeleTrade Comments 05.01.2023 09:04
On Thursday, the People’s Bank of China (PBOC) set the USD/CNY central rate at 6.8926 versus Wednesday’s fix of 6.9131 and market expectations of 6.8955.   Read next: The EUR/USD Pair Is Trading Above 1.06 Again, The USD/JPY Pair Is Close To Level Of 131| FXMAG.COM
The Japan Central Bank’s Decision Sent The Yen (JPY) Sliding

The USD/JPY Pair Has Displayed A Recovery

TeleTrade Comments TeleTrade Comments 05.01.2023 09:07
USD/JPY has rebounded after dropping below 132.00 as investors have shifted their stance to a risk-off mood. Upbeat US payroll data would serve as a reason for the continuation of hawkish policy by the Fed. The BOJ may continue to ease policy further to achieve higher inflation targets. The USD/JPY pair has picked bids after a corrective move below the crucial support of 132.00 in the Tokyo session. The asset has displayed a recovery as the risk-off impulse has rebounded firmly amid soaring anxiety ahead of the United States Employment data. S&P500 has sensed immense pressure as an expression of upbeat employment addition in the United States economy could serve as a reason for the continuation of hawkish monetary policy by the Federal Reserve (Fed) for the entire CY2023. The US Dollar Index has squared off its entire morning gains and is looking to recapture the immediate resistance of 104.00. Meanwhile, the 10-year US Treasury yields have also rebounded to near 3.72%. Friday’s US Nonfarm Payrolls (NFP) data will be keenly watched by the market participants. As per the consensus, the US labor market has witnessed an addition of fresh payrolls of 200K in December against 263K reported earlier. The Unemployment Rate is seen unchanged at 3.7%. Although inflation has been softened in the past few months led by higher interest rates, the Fed is still worried that the low jobless rate could spurt the price index again. The sheer demand for labor would be compensated by higher wages, which would result in higher retail demand as individuals will have more money in pockets for disposal. Read next: Exxon And Chevron Abandon The Global Market And Focus On The Americas| FXMAG.COM Before the release of the official US employment data, investors will look after Automatic Data Processing (ADP) Employment Change data, which is seen higher at 150K against the prior figure of 127K. On the Tokyo front, the Bank of Japan (BoJ) is likely to raise fiscal 2022 and 2023 forecasts for the core Consumer Price Index (CPI) in its new quarterly projections, as reported by Reuters. A scenario of a higher inflation forecast will fade rumors of policy shift as higher inflation will be augmented by more policy easing measures from the central bank.  
The AUD/USD Pair’s Downside Remains Off The Table

Thursday's US Economic Reports Can Provide Some Impetus To The AUD/USD Pair

TeleTrade Comments TeleTrade Comments 05.01.2023 09:19
AUD/USD comes under some selling pressure on Thursday, though the downside seems cushioned. Looming recession fears cap the optimism in the markets and undermine the risk-sensitive Aussie. Rising bets for smaller Fed rate hikes weigh on the USD and help limit deeper losses for the major. The AUD/USD pair finds decent support near the 0.6800 mark and climbs to the top boundary of its daily trading range during the early European session. The pair is currently placed around the 0.6830-0.6835 region, nearly unchanged for the day, still well below the multi-month high retested on Wednesday. Despite the reopening of the Chinese economy, growing recession fears keep a lid on any optimism in the markets and act as a headwind for the risk-sensitive Australian Dollar. The downside, meanwhile, seems cushioned, at least for the time being, amid a softer tone surrounding the US Dollar, which continues to be weighed down by the prospects for smaller rate hikes by the Fed. In fact, the minutes of the December FOMC monetary policy meeting released on Wednesday showed that officials unanimously supported raising borrowing costs at a slower pace. This, in turn, keeps the US Treasury bond yields depressed near a three-week low and is seen undermining the greenback. Traders, however, seem reluctant to place aggressive bets ahead of the US macro data. Read next: Exxon And Chevron Abandon The Global Market And Focus On The Americas| FXMAG.COM Thursday's US economic docket features the release of the ADP report on private-sector employment and the usual Weekly Initial Jobless Claims. This, along with the US bond yields and the broader risk sentiment, will influence the USD dynamics and provide some impetus to the AUD/USD pair. The focus, however, will remain on the closely-watched US jobs report (NFP), scheduled for release on Friday.
The USD/CAD Pair Has The Strong Downside Momentum

A Softer Risk Tone Is Seen Pushing The USD/CAD Pair Higher

TeleTrade Comments TeleTrade Comments 05.01.2023 09:25
USD/CAD defends 100-day SMA and rebounds from a one-month low touched on Thursday. Looming recession risks weigh on investors’ sentiment and benefit the safe-haven greenback. An uptick in oil prices could underpin the Loonie and cap any meaningful gains for the major. The USD/CAD pair attracts some buyers in the vicinity of the 100-day SMA support and stages a modest bounce from a one-month low touched earlier this Thursday. The pair sticks to its intraday recovery gains through the early European session and is currently placed just above the 1.3500 psychological mark. A softer risk tone assists the safe-haven US Dollar to regain some positive traction, which, in turn, is seen pushing the USD/CAD pair higher. Despite the easing of strict COVID-19 curbs in China, concerns about a deeper global economic downturn continue to weigh on investors' sentiment and keep a lid on any optimism in the markets. That said, a combination of factors might hold back the USD bulls from placing aggressive bets and cap the upside for the major, at least for the time being. Read next:Exxon And Chevron Abandon The Global Market And Focus On The Americas| FXMAG.COM The minutes of the December FOMC policy meeting showed that officials unanimously supported raising borrowing costs at a slower pace. The prospect for smaller rate hikes by the Fed is reinforced by the fact that the US Treasury bond yields remain within the striking distance of a three-week low touched on Wednesday. This should act as a headwind for the USD. Apart from this, an uptick in crude oil prices might underpin the commodity-linked Loonie and warrants caution for the USD/CAD bulls. Traders now look to the US economic docket, featuring the release of the ADP report on private-sector employment and the usual Weekly Initial Jobless Claims. This, along with the US bond yields and the broader risk sentiment, will drive the USD demand and provide some impetus to the USD/CAD pair. Apart from this, oil price dynamics could contribute to producing short-term trading opportunities. The focus, however, remains on monthly employment details from the US and Canada, due on Friday.
Mexico’s Central Bank Surprised Markets With A 50bps Rate Hike Once Again

In The Near Future The USD/MXN Pair Will Drop Down

InstaForex Analysis InstaForex Analysis 05.01.2023 09:36
On the daily chart USD/MXN currency pairs move inside the channel that dips down (Bearish) and the Moving Average is still in a Death Cross condition and the CCI is below level 0 where this all indicates that in the near future USD/MXN will drop down to the level of 19,036 in the next few days but if it is on its way towards that level suddenly there is an upward correction that exceeds the level of 19,582, so the decline scenario described earlier will become invalid. Read next: How Dream Sports Built Its Value, High Inflation And Its Impact On The Hedge Fund| FXMAG.COM Relevance up to 02:00 2023-01-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/117007
The EUR/USD Pair Chance For The Further Downside Movement

The EUR/USD Pair May Have A Potential For The Further Growth

Peter Jacimovic Peter Jacimovic 05.01.2023 09:48
Technical analysis: EUR/USD has been trading sideways at the price of 1.0608 and I see potential for the upside continuation towards upside reference. Trading recommendation: Due to the rejection of the key support zone in the background and symmetrical triangle pattern in creation, I see potential for the further growth. Watch for the buying opportunities on the intraday dips with the upside objective at the price of 1.0675 Stochastic Oscillator is showing fresh bull cross, which is good sign for further rally Key support zone is set at the price of 1.0520 Read next: How Dream Sports Built Its Value, High Inflation And Its Impact On The Hedge Fund| FXMAG.COM   Relevance up to 09:00 2023-01-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307460
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

FX: The Fall In The Pound Also Saw Egyptian Hard Currency Foreign Debt Rally

ING Economics ING Economics 05.01.2023 10:49
The December FOMC minutes caused barely a ripple in the FX market. Instead, investors are left to interpret China's battle with Covid and plunging energy prices. The sharp fall in natural gas prices is a boon to European energy importers, but a Fed still concerned with tight labour markets suggests the European FX recovery against the dollar is limited USD: FOMC minutes barely move the needle Last night's release of FOMC minutes could have been perceived as slightly hawkish, yet FX and interest rate markets barely budged. At the heart of the 2023 story is the risk management trade-off of the Federal Reserve under-appreciating sticky inflation versus over-tightening and delivering weaker-than-needed growth. For the time being, the Fed is still more concerned by the former and plans ongoing rate increases. In practice, we think that means another 50bp hike from the Fed in February (the market seems to prefer 25bp hikes in February and March) and then rate cuts from the third quarter onwards. For rate markets the battle this year seems to be whether inflation will allow the Fed to deliver the roughly 50bp of easing expected in the second half of the year. For today's session, the focus will be on the December ADP jobs data, where a +150k number is expected after last month's 127k rise. Currently, the consensus expects tomorrow's December nonfarm jobs reading at +200k. Yesterday we highlighted the importance of the JOLTS job opening data. The December figure showed a surprise rise, which will fan Fed fears of the US labour market staying tight. A firm ADP number today could also deliver a little support to US yields and the dollar. Away from the Fed story, the market's early year focus is on China's Covid battle and slumping energy prices. Commodity markets - always very sensitive to the China demand story - are taking a cautious approach here. In other words, they are not prepared to look through (presumably) surging infections towards the second half growth story. Equally the China story, in addition to very warm weather, is weighing on energy prices where both oil and gas are plunging. Indeed, European natural gas now trades at a discount to Asian natural gas and warns that LNG shipments will be re-routed to Asia. For the time being this fall in natural gas is prompting a re-assessment of European growth prospects and supporting European FX - especially CE4 currencies. That may well remain the near-term trend unless US price data is sufficient to re-price the Fed tightening cycle to the 5.50% area and lift the dollar. As above, ADP will be key for the dollar today. A subdued DXY range well within 104-105 looks likely. Chris Turner EUR: A welcome reprieve from energy The sharp fall in energy prices is being welcomed across Europe. That is already showing up in softer-than-expected German and French inflation data. Today the focus will be on Italian inflation data ahead of tomorrow's eurozone December CPI release, currently expected at 9.5% year-on-year. As discussed yesterday, the sharp fall in natural gas is generating even further improvement in the euro's terms of trade and is a euro positive. However, EUR/USD may struggle to make further upside gains until key event risks have been surmounted such as tomorrow's December US jobs release and next Thursday's US December CPI reading. Expect EUR/USD to continue trading in a 1.0580-1.0640 range, though we would probably say the upside risks are greater given developments in the energy story and the re-rating underway of European equities. Elsewhere, the National Bank of Poland left rates unchanged at 6.75% yesterday. Our team feels that sticky inflation will not allow an easing cycle to materialise in the second half of this year, however. Look out for the press conference from NBP Governor Adam Glapinski at 15CET today. 7.5% implied yields for the zloty and a rally in European bond markets amid lower energy prices can probably keep EUR/PLN gently offered for the time being. Chris Turner GBP: PM Sunak's new targets The UK Conservative government came out on the offensive yesterday with Prime Minister Rishi Sunak announcing five strategic targets for this year, among which were halving inflation, stabilising debt to GDP and ensuring a return to growth. The reduction in inflation may be the most attainable of these three and the one over which the government has the least control.  On the subject of inflation, today sees the 1030CET release of the Bank of England's Decision Maker Panel (DMP) survey. This looks at inflation expectations in the business sector. The November survey, published in early December, saw one-year inflation expectations drop to 7.2% from 7.6% YoY. Presumably, this should fall again in today's survey. We still think the market is over-pricing the BoE tightening cycle at a peak near 4.50% (+100bp) in August this year. But that pricing has been resolute. EUR/GBP should continue in a 0.8800-0.8850 range for the time being, while cable can loiter well within this week's 1.19-1.21 range. Chris Turner EGP: Another devaluation in the Egyptian pound The Egyptian pound (EGP) sold off another 6-7% yesterday. This is a heavily managed exchange rate and the decline is taken as a controlled move by local authorities. The fall in the pound also saw Egyptian hard currency foreign debt rally on the view that authorities were conforming to IMF conditionality of a flexible exchange rate in return for the $3bn IMF facility agreed in October. The legacy of the 2022 inflation and interest rate shock to emerging markets continues to play out in Africa, where sovereign CDS premia remain among the highest in the world. Among those sovereign credits under pressure is Nigeria, which also has a heavily managed exchange rate. The Nigerian naira was allowed to depreciate 4% in December, but with implied yields still at 50% - expecting further naira depreciation - we can only think that lower energy prices will be heaping more pressure on this currency. Those forwards price USD/NGN at 500 in three months' time - which certainly looks to be the direction of travel. Chris Turner Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Asia Morning Bites: Inflation Data in Focus, FOMC, ECB, and BoJ Meetings Ahead

In Poland May Not See Inflation Peak Until February, Although 2023 Will Not Be A Stellar One For Most Asian Economies, They Will Still Mostly Grow Faster Than Anywhere else

ING Economics ING Economics 05.01.2023 11:01
The warm weather in Europe is helping the region to get through the energy crisis, though many central bankers across the globe are still not done with rate hikes Back from holidays Happy New Year. We are gradually returning from holiday and sharpening our minds and pens again for another year of economic excitement. The Christmas break is traditionally a period with very little economic news and data, which allows us to keep the first economic update of the year brief. Our main views for 2023 are still intact and nicely presented in our Global Macro Outlook 2023. Still, there have been some important developments since the release of our outlook in early December. China has made a full U-turn on its zero-Covid strategy and is now experiencing a surge in Covid cases. For Western economies, an end to zero-Covid in China has always been a double-edged sword. On the one hand, it means that after a wave of surging Covid cases, the Chinese economy could open earlier and faster than initially thought, lowering the risk of new supply chain frictions. On the other hand, this reopening will very likely push up demand and prices for energy. In Europe, warm temperatures and strong winds since mid-December have not only led to lower wholesale prices for gas but also lowered gas consumption and filled up national gas reserves again. Unless the continent gets caught out by a severe winter in the coming months, the risk of an energy supply crisis has become extremely low. As a result of lower energy prices and government intervention, headline inflation came down more significantly than initially expected in December. If energy prices stay at their current levels throughout the year, headline inflation could come down quickly. Just taking the energy base effects into consideration, eurozone headline inflation could temporarily even touch 2% towards the end of the year. However, let’s not forget that there are still many “pass-throughs” at play and that it is almost normal for headline inflation to drop significantly after energy price shocks, while core inflation could still increase further and stay stubbornly high. Before getting overly enthusiastic remember that energy prices are highly volatile and recent developments cannot be extrapolated to the entire year. We have revised down our energy price assumptions but still expect an increase in the second half of the year when China starts to accelerate and Europe prepares for next winter. The central bank meetings in December hinted at a possible central bank divergence in 2023. While the Bank of England turned more dovish and even the Federal Reserve lost some of its uber-hawkishness, the two most dovish central banks of the last decade – the European Central Bank and the Bank of Japan – became more hawkish. The ECB, in particular, seems determined to continue hiking rates whether or not the economy falls into recession, and headline inflation could retreat faster than expected. As much as many central banks got carried away with ultra-loose monetary policy when inflation was low, there is now the risk that they will get carried away with overly restrictive monetary policy. Maybe it is just human for central bankers to want to secure their place in history as the slayers of inflation. In any event, don’t expect recent positive inflation developments to change central bankers’ minds anytime soon. Many people start the new year expecting the best but preparing for the worst. We take a different stance. We still expect a difficult macroeconomic year but are clearly preparing for the best. At a glance: our house view Energy: mild weather eases natural gas concerns The European natural gas market has come under significant pressure recently with TTF falling by around 50% since early December. Milder weather has reduced heating demand and as a result, Europe is seeing an unusual build in gas storage in the middle of winter. Gas storage is around 84% full compared to a five-year average of around 70%. It appears as though Europe will enter the injection season with comfortable storage, although there are still plenty of risks around the remaining Russian supply and also the potential for increased competition for LNG from China, as the country drops its zero-Covid policy. A more comfortable European market has meant that prices are unlikely to be as strong as initially expected. However, prices will still need to remain elevated to ensure demand destruction keeps the market in balance through the 2023/24 winter. We expect TTF to average EUR125/MWh in 2023, but uncertainty and lingering supply risks mean the market will remain extremely volatile. The outlook for the oil market remains bullish. China’s Covid policy change should prove supportive for demand in the medium to long run, although admittedly rising Covid infections could weigh on demand in the immediate term. Russian oil supply is still expected to fall due to the EU ban on Russian seaborne crude and refined products. As a result, the oil market is expected to tighten from the second quarter onwards, which supports our view for Brent to average a little over US$100/bbl over 2023. Warren Patterson Eurozone: ECB moves into uber hawkish zone The fall in sentiment indicators was partially reversed in December on the back of lower energy prices, courtesy of the extremely mild winter weather. That said, the strong fall in industrial production in October still suggests negative GDP growth in the fourth quarter and falling orders, high inventories and weakening hiring activity point to a further contraction in the first quarter. We expect only a weak recovery thereafter, leading to, at best, stagnating GDP for the whole of 2023. The more subdued energy prices and resolving supply chain frictions will push inflation down further, though core inflation is likely to prove more stubborn. We therefore don’t expect headline inflation to fall below 3% before 2024. After a hawkish monetary policy meeting in December, members of the ECB’s Governing Council have continued to emphasise a very hawkish message, pencilling in 50bp rate hikes for “a period of time”. On the back of this, we expect a 50bp rate hike both in February and March, followed by another 25bp rate hike in May. Bond yields have less upward potential and might fall again in the first half of the year. Peter Vanden Houte US: Fed nears end of hiking cycle as recession draws closer Recession worries are mounting in the US as the Federal Reserve continues hiking interest rates despite the economy already bracing itself for a deep housing market downturn and American CEOs being as pessimistic as they were in the depth of the Global Financial Crisis. With more companies adopting a defensive posture we expect to see hiring and investment plans cut back aggressively. The combination of job worries, lingering inflation and falling asset prices are likely to lead to sizeable falls in consumer spending while residential construction will also drag output lower. We look for a further 50bp of rate hikes in the first quarter given that inflation remains the Federal Reserve’s focus. Nonetheless, we believe that the composition of the CPI basket (heavy weighting towards housing and vehicles) is helpful in bringing about sharp falls in inflation from the second quarter onwards. Remember, too, that the Fed has a dual mandate that places a strong emphasis on the job market as well as targeting 2% inflation. With more flexibility to respond to the recession than most other central banks, we see significant scope for interest rate cuts and falling Treasury yields later in the year. James Knightley UK: Bank of England turns more dovish but rate cuts still a while off The UK economy has most likely been contracting since the third quarter of last year, and we expect this trend to continue until the summer. Admittedly, a recession is likely to be mild by historical standards, not least because the job market remains uber-tight, plagued by increasingly persistent labour shortages. We expect a peak-to-trough fall in GDP of a little over 1.5%. Against that backdrop, it’s not surprising that the Bank of England is turning more dovish. December’s decision registered a noticeable shift in voting patterns among committee members, which much like the Fed, resulted in a ‘smaller’ 50bp rate hike. We expect 50bp worth of additional tightening, though the jury’s out on whether this will come in one burst or split into 25bp increments. Either way, the BoE is likely to be slower to turn to rate cuts than in the US. Stickier inflation, owing to Europe’s energy crisis, and the tight UK job market, suggests the first rate cut is unlikely before 2024. James Smith China: no smooth road to recovery China’s lifting of Covid measures domestically and for international travellers will, in time, help the economy to normalise. But we can expect the short term to be dominated by the very high level of Covid cases, which have come at a time when the economy is already very weak. Looking at other economies in the region which have suffered similar severe waves of Covid (India’s Delta wave springs to mind) we would expect this wave to last no more than three months at which time the economy could start to revert to a more normal footing. However, this could also coincide with the US and Europe entering recession, which will weigh on any manufacturing recovery and export growth even as China’s domestic issues abate. The People’s Bank of China has set the policy tone for 2023 as stable, strong, and precise, which suggests that policymakers do not envisage much adjustment to interest rates or reserve requirements. Instead, a re-lending programme could be the main tool to inject liquidity into specific industries or for a specific purpose. Fiscal stimulus will focus on supporting long-term economic growth and will likely be delivered in March. Iris Pang Asia: region slows as global recessionary fears build Asian growth is slowing as its major external trading partners slide towards recession while its major regional economic hub (China) battles a new Covid wave. Not helping, a global downturn in semiconductor demand is hitting hard at the major manufacturing sector of the region, and domestic demand is being undermined by higher policy rates and the erosion of purchasing power due to inflation. But it isn’t all bad. Inflation, which was never as bad as most of Europe or the US, and has required a more nuanced policy tightening response, already shows clear signs of peaking in many economies. Easier policy and a troughing of the downturn are likely over the middle of the year. Japan may be an outlier here as it is making tentative overtures towards a normalisation of central bank policy, though we think any steps the Bank of Japan makes this year will be extremely tentative. China, too, will emerge from the current Covid wave within a quarter or two and should begin to grow more strongly, lifting regional exports once more. Overall, although 2023 will not be a stellar one for most Asian economies, they will still mostly grow faster than anywhere else. Rob Carnell CEE: New Year's repricing is a reminder that the inflation story is not over Leading indicators suggest a rebound from the bottom in economic activity, but hard data will continue to underwhelm for a while yet. Still, more attention will be paid to inflation, which we think peaked in Hungary and Romania at the turn of the year. In the Czech Republic, the January repricing should bring inflation back within reach of the September peak. In Poland, on the other hand, we may not see inflation peak until February, and we also expect inflation here to be the most persistent in the CEE region. However, we do not expect much more action from central banks. In Romania, after the last surprisingly strong inflation number, it looks as though the National Bank of Romania (NBR) may deliver one more 25bp hike to 7.00%. But otherwise, we consider the hiking cycle in the region to be over. So the main question is when inflation in the region will fall enough that central banks will be willing to start normalising monetary conditions. We see the Czech National Bank and the National Bank of Hungary as the first in this race. Conversely, we forecast the NBR will cut rates only at the end of this year with the National Bank of Poland following next year at the earliest. Frantisek Taborsky FX markets: dollar to find support as central banks spark abrupt decline FX markets have shown a little more stability over the last month and the dollar has found some support after dropping around 8% through October and November. The hawkish December FOMC meeting has certainly helped here and provided a counterweight to a surprisingly hawkish ECB. The major outperformer has been the Japanese yen, which received a further boost in December after the Bank of Japan shifted its 10-year JGB yield target. Rarely can there be said to be a more successful case of FX intervention than Tokyo’s efforts to sell USD/JPY in the 145/150 area. Looking ahead, the seasonal trends are more dollar supportive in the January-February window and this may be the more likely period for EUR/USD to make a move lower. Markets price the turn in the Fed cycle and a weaker dollar from the third quarter onwards, though we suspect sustained gains in EUR/USD may be harder to come by as central bankers continue to hike into recessions. Chris Turner Rates: set to reverse higher before collapsing lower 2022 saw the biggest bear market for bonds in modern times. A peak in US inflation opened the door for a decent rump of investors to square up on bear market positions in the fourth quarter, requiring the buying of both duration and risk. However, this just stored up pressure for resumed higher market rates ahead. Despite the easing in inflation pressures, the first quarter will have a strong rate hiking theme. The Fed is still hiking and needs tighter financial conditions. That should force market rates back up. With the ECB on a hiking mission too, upward pressure on eurozone market rates will also feature. While we see resumed upward pressure on rates dominating the first quarter, the biggest narrative for 2023 as a whole will be one of significant falls in market rates. The Fed and the ECB will peak in the first quarter, and once there, market rates will have a carte blanche to anticipate future cuts. Larger falls for US market rates are projected later in 2023, reflecting likely subsequent Fed cuts. But with cuts less likely from the ECB, expect a relative steepening of the US curve versus the eurozone one. This is a classic box strategy where the US curve steepens out (dis-inversion), and the eurozone one re-steepens by less. By the end of 2023, the US 10yr Treasury yield should be back down at 3% and the eurozone 10yr swap rate at 2.5%. But we should not go below these levels for long. Padhraic Garvey Read this article on THINK TagsRates Monthly Update FX Energy Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

The US Stock Market Is Off To A Low Start Before The Bull Market Resumes

InstaForex Analysis InstaForex Analysis 05.01.2023 11:47
Following the decline that occurred on January 2, which was due to the collapse of TESLA and APPLE shares, stock indices rose as investors focused on the latest economic statistics from the US and the minutes of the December Fed meeting. Data in the Euro area also caused a strong surge not only in local indices, but also in EUR/USD. Conversely, the US indicator was in decline, which should have led to a decline in the US stock market. However, this did not happen, probably due to growing expectations that the Fed will soon stop raising rates. Investors are clearly hopeful that the local equity market will not fall further as they believe that the worst has already happened. It can be said that the US stock market is off to a low start before the bull market resumes. The positioning of short and long positions has reached the strongest divergence in favor of sellers, which can be overcome at any time if the market thinks that it is time to start buying. The upcoming inflation data in the US will be a signal to buy, but only if there is a noticeable decline in the figures. Read next: Samsung Suffers From Weakening Demand, Amazon Will Increase The Total Number Of Layoffs To Over 18,000| FXMAG.COM Forecasts for today: USD/JPY The pair is trading around 132.70. A break above this level, which could happen if there is positive sentiment in the market, will push it to 134.45. WTI Oil found support at 73.00. If this level holds and positive sentiment prevails, a rise to 75.00 can be expected.   Relevance up to 07:00 2023-01-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331508
The Gold Rally Is Continuing To Stall, This Could Be A Good Year For Crude Oil

Saxo Bank Podcast: The Gold Rally Fading, Crude Oil Ripping Lower And The Japanese Yen (JPY) Mean Reverting To Weakness And More

Saxo Bank Saxo Bank 05.01.2023 11:56
Summary:  Today, we look at the market continuing to stumble around in the range, with little conviction emerging so far this year. Will this mean a trigger-happy reaction to incoming data? Elsewhere, we look at the gold rally fading, crude oil ripping lower and the Japanese yen mean reverting to weakness after its spectacular two-month rally, a likely sign of near-term exhaustion for that move. We also discuss Amazon chopping more jobs than expected, the still tight US labor market and much more. Today's podcast features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next: The Bank Of England Urgently Needs To Tame Stubbornly High Inflation| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Market stumbling around, awaiting incoming data | Saxo Group (home.saxo)
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

FOMC Minutes Were Hawkish, All Eyes On US Jobs Data, Weaker Energy Gives Hope

Swissquote Bank Swissquote Bank 05.01.2023 12:06
Released yesterday, the FOMC minutes were hawkish enough to get the S&P500 erase early gains, but not hawkish enough to get the index to close in the red. The index closed the session 0.75% higher. Nasdaq gained 0.50%. UD Data Today, we will see what the ADP report tells about new hirings in December. Analysts believe that the US economy may have added around 150’000 new private jobs last month. Note that the latter is not a good indication regarding what’s to come on Friday. Last month, the ADP printed a weak 127’000 figure, while the NFP came in at 263’000. Therefore, even the avalanche of layoff news from big companies, and a soft ADP print may not be enough convince that the US jobs market is cooling. Energy In energy, weaker nat gas prices, combined to the past few days’ recession fears, and news that OPEC output increased in December thanks to the recovery in Nigerian supply from outages – despite the OPEC+ will to cut output to keep prices sustained - pulled the price of American crude 5% lower yesterday. Forex In the FX, the Australian dollar is surfing on the positive Chinese vibes, while the US dollar index couldn’t extent the early week gains, and we are about to see a death cross formation on the daily chart. Read next: Samsung Suffers From Weakening Demand, Amazon Will Increase The Total Number Of Layoffs To Over 18,000| FXMAG.COM The EURUSD is bid around 1.0550, as Cable sees buying interest below 1.20 despite its worse economic fundamentals compared to other G7 economies. One of the most popular trades of the moment is long the Japanese yen against EUR, USD and pound. Watch the full episode to find out more! 0:00 Intro 0:31 FOMC minutes… hawkish as expected 2:58 All eyes on US jobs data 5:54 Weaker energy gives hope, but oil could hold support above $70pb 7:45 Chinese stocks shine, as Aussie gets decent boost from China reopening 10:04 Long yen is among the most popular trades of the momet! Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #FOMC #minutes #US #jobs #ADP #NFP #data #USD #EUR #JPY #AUD #China #Covid #reopening #natural #gas #crude #oil #Alibaba #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

The Situation Of The Chinese Economy Could Be A Serious Problem For The Australian Dollar In Early 2023.

Kenny Fisher Kenny Fisher 05.01.2023 12:12
The Australian dollar has posted limited losses on Thursday. In the European session, AUD/USD is trading at 0.6822, down 0.17%. Australian dollar soars as China mulls coal imports The Australian dollar rocketed higher on Wednesday, rising 1.6% and hitting a 3-week high. This followed reports that China was considering easing its ban on imports of Australian coal. The ban has been in place since 2020, but relations between Australia and China have improved since the new Australian government took office. The move would bolster the Australian economy, although the Australian government was surprisingly low-key, saying that the coal industry had found alternative markets. China is Australia’s number one trading partner, which means that developments in China have a significant impact on Australia and the direction of the Australian dollar. The sharp U-turn in China’s covid policy, from zero-covid to easing restrictions should give a boost to the Chinese economy in the long term. However, we can expect China’s economy to slow down and even contract in the first quarter, due to the surge in Covid cases which is dampening demand for services and also lowering production as many workers report in sick. This could pose a major headwind for the Australian dollar early in 2023. The Federal Reserve minutes reflected the hawkish message that Jerome Powell had for the markets at the December meeting. FOMC members committed to maintaining a restrictive policy while inflation remained unacceptably high, saying that more evidence was needed to show that inflation was on a “sustained downward path to 2 per cent”. The minutes noted that several members warned against “prematurely loosening monetary policy”. Despite the Fed’s hawkish stance, there is still a dissonance between the Fed’s message and market pricing. The minutes noted that no FOMC members expect any rate cuts this year, while the markets have priced in a possible small reduction by the end of 2023 and have forecast a funds rate peak at 4.5%-4.75%. The Fed, on the other hand, expects rates to hit 5% or higher. Minneapolis Fed President Kashkari said on Wednesday that rates could rise to 5.4% or even higher if inflation doesn’t head lower. Read next: Samsung Suffers From Weakening Demand, Amazon Will Increase The Total Number Of Layoffs To Over 18,000| FXMAG.COM AUD/USD Technical AUD/USD has support at 0.6703 and 0.6620 There is resistance at 0.6841 and 0.6969 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The GBP/USD Pair Started A New Round Of Downward Correction

Cable Market Is Trading Near 1.2000, USD/JPY Is Above 132, EUR/USD Holds Trade Above 1.06

Kamila Szypuła Kamila Szypuła 05.01.2023 14:10
The dollar was more or less flat in choppy trading on Thursday after the Federal Reserve's closing minutes were released. The FOMC minutes repeated the message of a critical fight against inflation, more rate hikes ahead and no forecasts for 2023. The Fed publication reminded markets that policymakers do not anticipate a rate cut in 2023 and want to see "much more evidence" of progress to conclude that inflation is on a downward path. Analysts said the protocols were broadly in line with expectations, explaining the markets' relatively subdued reaction. A higher-than-expected JOLT reading of 10.45 million job vacancies in November and the ISM Manufacturing PMI survey triggered a rebound in the US dollar (DXY) index. Although the headline PMI fell slightly in December, the employment index in the PNI report unexpectedly rose to 51.4 from 48.4 in November. Meanwhile, the hawkish tone in the minutes of the December Federal Reserve meeting provided additional support for DXY. Looking ahead, the market will be watching the US employment data today to decipher the potential implications for the Fed at its next meeting in February. It's worth watching future reports. Private ADP employment figures will be released tomorrow ahead of NFP figures and on the EU side EU inflation figures will be released tomorrow after Italy showed slightly lower inflation readings in monthly and yearly comparisons. Next week, the US inflation data for December will be watched closely as the Fed continued to stress the impact of inflation on market disbelief as another lower printout would mean a sixth consecutive cooler printout for the headline and third for the core indicator. USD/JPY The Japanese yen trimmed losses from the previous session against the US dollar. On the Tokyo front, the Japanese yen witnessed a sharp decline after BJ Governor Haruhiko Kuroda advocated further policy easing to push the wage price index to meet elevated inflation projections for 2023 and 2024. The currency and commodity markets started the year with a break in volatility. Japan relies heavily on imports for most of its energy, and with crude oil down about 9% in the last few days, the yen could be the beneficiary of this move. In addition to the yen, the US dollar was weakened during the New York close but has since recovered some of those losses. The USD/JPY pair managed to exceed the level of 132 in the Asian session. It looks like the pair will be headed in the direction of 133 in the near future. GBP/USD GBP/USD traded slightly lower in the early hours of Europe on Thursday and fell towards 1.2000. The UK services PMI rose close to breakeven in December, suggesting little change in activity this month. Read next: Samsung Suffers From Weakening Demand, Amazon Will Increase The Total Number Of Layoffs To Over 18,000| FXMAG.COM EUR/USD EUR/USD keeps trading above 1.0600, but a drop below is still possible. The fundamental landscape surrounding the euro area economy has changed slightly compared to the first three quarters of 2022 and this is largely due to the significant reduction in oil and gas prices, which has brought a huge relief to the bulk importer of these commodities. From today's data from europe, the PPI report is expected. The European Economic Report will include a Producer Price Index (PPI), but that data is unlikely to trigger a significant reaction, especially ahead of Friday's Eurozone Inflation Report. AUD/USD The Aussie Pair keeps its trade above 0.68 despite being closer to 0.68 than 0.69. The Australian dollar soars as traders boost economic confidence in China Most of the AUD's gain took place during Wednesday's trading session in the Asia-Pacific region. At the time, investors likely priced in the potential economic impact of future trade flows between Australia and China due to several developments. Read next: Harvard Business Review Research Shows That Education Is No Longer So Important On The Labor Market, The Ban On The Import Of Hamsters Has Been Lifted, 60/40 Portfolio Is Ended?| FXMAG.COM Source: dailyfx.com, finance.yahoo.com, investing.com
Hungary's Central Bank to Maintain Base Rate at 13%, Eyes on Effective Rate Amid Forint's Performance

The EUR/USD Pair Ended The Week Trading At 1.0648, The Cable Market (GBP/USD) Managed To End The Week Above 1.20

Kamila Szypuła Kamila Szypuła 07.01.2023 20:00
The dollar offset earlier gains after US employment data showed employers created 223,000 jobs in December, more than economists had forecast, while wage growth slowed this month. Fed futures traders have raised bets that the Fed will raise interest rates by 25 basis points at the end of its two-day meeting on February 1 after Friday's data. An increase of 25 basis points is now seen as a 67% probability, up from 54% before, and an increase of 50 basis points is now seen as a 33% probability. USD/JPY USD/JPY started the week at 130.92, ended the week much higher at 132.0540. The week's high was even higher than the last reading and the pair crossed 134 at that point. The low was shockingly low compared to the high as it was below 130, 129.53 to be exact. EUR/USD The EUR/USD pair started the week and the new year at a high level of 1.07. It ended the week trading at 1.0648. It was a tumultuous week for the pair as they had to struggle many times to keep their trade above 1.06 and thus their low was read below that level. The lowest level was even below 1.05 at 1.0491, the highest later was at the level from the beginning of the trading week, i.e. at 1.0709. Unsurprisingly, drastically lower energy prices in the Eurozone helped to soften the headline measure of inflation, where it improved year-on-year and month-on-month - highlighting the trend of lower prices for EU consumers. EU headline inflation drops from 10.1% to 9.2% YoY. Core inflation rises from 5% to 5.2% YoY. According to estimates, energy price growth, although still the largest contributor to the overall index, fell from 41.5% in October to 25.7% in December. By contrast, price pressures on non-energy or food items are higher, suggesting that high inflation remains quite common. GBP/USD Similarly for the euro, the cable pair also had a difficult week. The pound was exceptionally weak and fell below 1.20. They will start the week at 1.2111 and thus it is the highest reading in this trading week, and the end of the week was at 1.2093. The lowest level of the GBP/USD pair was below 1.1850 (1.1848). AUD/USD The Aussie pair was the best among the major pairs of valises. Throughout the week, AUD/USD traded in a tight range compared to other pairs. The pair's weekly range was 0.6700-0.6875. The pair started the year trading at 0.6821 and finished at 0.6879. The end of the week was close to the week's high at 0.6888. The pair dropped the lowest in the week at 0.6690. The factors contributing to the pair's volatility appear to have been largely external, with Chinese politics, Federal Reserve meeting minutes and US employment figures playing a role. China's efforts to break out of its economically stifling zero-case Covid-19 policy appear to come with several challenges. While official figures show a situation that is under control, anecdotal evidence from hospitals and morgues suggests a more problematic transition. At the moment, Australia's trade surplus remains at record highs and the November figure will be known this Thursday. Source: finance.yahoo.com, investing.com
At The Close On The New York Stock Exchange Indices Closed Mixed

At The Close Of The New York Stock Exchange, The NASDAQ Composite Had The Biggest Growth

InstaForex Analysis InstaForex Analysis 09.01.2023 08:00
At the close of the New York Stock Exchange, the Dow Jones rose 2.13%, the S&P 500 rose 2.28%, and the NASDAQ Composite rose 2.56%. Dow Jones The leading performer among the Dow Jones index components in today's trading was Intel Corporation, which gained 1.17 points or 4.25% to close at 28.73. Walgreens Boots Alliance Inc rose 1.42 points or 4.04% to close at 36.61. Dow Inc rose 2.11 points or 3.99% to close at 55.02. The biggest losers were UnitedHealth Group Incorporated, which gained 0.04 points (0.01%) to end the session at 490.00. Home Depot Inc was down 0.65% or 2.06 points to close at 317.53, while Chevron Corp was up 0.75% or 1.32 points to close at 176. 56. S&P 500 The leading performers in the S&P 500 index today were Costco Wholesale Corp, which rose 7.26% to 482.87, Old Dominion Freight Line Inc, which gained 6.83% to close at 300.70. , as well as shares of IDEXX Laboratories Inc, which rose 6.82% to close the session at 447.77. The biggest losers were Baxter International Inc, which shed 7.84% to close at 48.45. Shares of Waters Corporation shed 7.15% to end the session at 322.21. Quotes of Thermo Fisher Scientific Inc decreased in price by 3.94% to 535.00. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Swvl Holdings Corp, which rose 115.36% to hit 0.30, Medavail Holdings Inc, which gained 80.19% to close at 0.56, and also shares of Golden Sun Education Group Ltd, which rose by 77.78%, ending the session at around 2.24. The biggest losers were Fate Therapeutics Inc, which shed 61.45% to close at 4.24. Shares of Nabriva Therapeutics AG shed 44.84% to end the session at 1.30. Quotes of Graphite Bio Inc decreased in price by 39.54% to 1.85. Numbers On the New York Stock Exchange, the number of securities that rose in price (2655) exceeded the number of those that closed in the red (459), while quotes of 79 shares remained virtually unchanged. On the NASDAQ stock exchange, 2689 companies rose in price, 1087 fell, and 190 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 5.92% to 21.13. Gold Gold futures for February delivery added 1.66%, or 30.50, to hit $1.00 a troy ounce. In other commodities, WTI crude for February delivery rose 0.14%, or 0.10, to $73.77 a barrel. Futures for Brent crude for March delivery fell 0.14%, or 0.11, to $78.58 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 1.18% to 1.06, while USD/JPY shed 0.99% to hit 132.09. Futures on the USD index fell 1.12% to 103.65.       Relevance up to 03:00 2023-01-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/307765
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

AUD/USD Pair: The Continuation Of Growth Is Expected

InstaForex Analysis InstaForex Analysis 09.01.2023 08:02
Pacific currencies have taken the lead in volatility since the beginning of the year. The New Zealand dollar closed Friday up 2.09% and the Australian dollar up 1.96%. The US dollar index lost 1.15%. On the daily chart, the Marlin oscillator has already moved into the bulls' territory; now it is the price's turn to move above the resistance at 0.6917. In case it succeeds, which is quite probable due to the growth in commodities (China has resumed buying Australian coal after a two-year break due to the political circumstances), the AUD/USD pair may continue rising to the target level of 0.7048, which is the high on August 1. Then we might see the formation of a divergence (dashed lines on the chart) and a reversal of the price into a medium-term decline for a few months. On the four-hour chart, the price continues to rise, fearlessly approaching resistance at 0.6917 (the September 13 peak). There is a high probability that it will cross this level. We are cautiously waiting for the continuation of growth. Relevance up to 03:00 2023-01-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331696
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The Main Scenario Of The GBP/USD Pair Is Downward

InstaForex Analysis InstaForex Analysis 09.01.2023 08:04
At the end of last week, the price tried to attack the support of the MACD indicator line (blue moving one), but because of the sharp growth of the adjacent markets, the pound's growth on Friday blocked Thursday's decline. As a result, the quote was in the range of December 22. What does it mean? Judging by the volumes, which were rather high for the beginning of the new year, the pound intends to overcome the main resistance of the second half of December - 1.2155. If the price settles above this level, the pair may reach the 1.2410 target. Important macro data will be released on Thursday - the US inflation data will be published according to the schedule, so I don't expect a qualitative market growth (if any) before that moment, even at the stock exchanges, because the S&P 500 grew by 2.28% on Friday only because Charles Evans made a statement regarding the 0.25% rate hike at the Federal Reserve's next meeting. But the realization that even the current rate of 4.50% is already becoming heavy on the stock markets may quickly bring investors back to reality. On the four-hour chart, the price is completely in an upward position. However, such a technical situation has occurred more than once since the end of December 2022. In general, I see sideways movement in the range of 1.1933-1.2155 and I am waiting for further developments. The main scenario is downward. Relevance up to 03:00 2023-01-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331696
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

Today, The Euro (EUR) May Have A Chance To Rise

InstaForex Analysis InstaForex Analysis 09.01.2023 08:08
The dollar's first rush to a massive strengthening across the board since trading opened in the new year was wiped out by Friday's surge in counter-dollar currencies and the return of risk appetite to the markets - stock markets have already exceeded their pre-new year's values. The euro rose 125 pips on Friday, which is one of the signs that the bearish correction is over, but until the price settles over the range of 1.0595-1.0660 and the signal line of the Marlin oscillator on the daily chart falls to the positive area, it is too premature to change the reversal strategy. The second scenario, with the formation of a complex extended divergence, which we considered in mid-December, gets an upgraded look - the reversal from the support area of 1.0470 while reaching the target range of 1.0758-1.0787. On the daily chart, it is marked with the dashed lines. At the moment, under the main scenario, I expect the correction to end in the range of 1.0595-1.0660 and movement below 1.0470, which will also mean that the price will move under the MACD indicator line. On the four-hour chart, the price settled above the MACD line, the Marlin has settled in the positive area, and the situation changes into which the euro could rise. But the price and the oscillator are not settling on the daily chart, so the output on the four-hour chart may not be accurate. Relevance up to 03:00 2023-01-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331698
Analysis Of The Euro To US Dollar Pair Situation - 30.01.2023

The EUR/USD Pair Is Waiting To Start The Next Rally

Torben Melsted Torben Melsted 09.01.2023 08:13
EUR/USD corrected to a low of 1.0482 just above our ideal target seen at 1.0472. Once EUR/USD finished its correction, we saw a very strong rally confirming that wave 4/ had been completed and wave 5/ towards 1.0927 now is in progress. Support is now seen at 1.0636 and 1.0581 which we expected will act as a floor for the next rally towards 1.0927.   Relevance up to 06:00 2023-01-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307771
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The Kiwi (NZD) Has The Opportunity To Appreciate Upwards

InstaForex Analysis InstaForex Analysis 09.01.2023 08:22
With the emergence of deviations between the price movements of the NZD/USD commodity currency pair and the CCI indicator, the Kiwi has the opportunity to appreciate upwards to test up to the 0.6439 level as its main target and the 0.6511 level as the next target to be achieved but if it is on its way to the targets If the Kiwi level suddenly reverses downwards until it passes the 0.6217 level, all scenarios for an upward movement described earlier will become invalid and cancel automatically. Relevance up to 03:00 2023-01-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/117183
FX Daily: Upbeat China PMIs lift the mood

The Chinese Authorities Are Considering To Relax Restrictions On Highly-Leveraged Property Developers

Saxo Bank Saxo Bank 09.01.2023 08:32
Summary:  U.S. stocks surged over 2% following the ISM services index shrinking to 49.6 and average hourly earnings growth slowing to 0.3% M/M in December from a downward revised 0.4% in November (previously reported 0.6%). Investors became more optimistic about inflation having peaked because of these unexpected weaknesses in services and wages. Yields on 10-year Treasury notes plunged 16 basis points to 3.56%. The dollar fell against all G10 currencies with the Dollar Index shedding 1.1%. Gold and copper advanced. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) surged more than 2% on slowing wage growth and activities in services in contraction Bad news once again was good news for equities last Friday when the U.S. released slower wage growth in December as well as in November (a downward revision) and the ISM services index plunged unexpectedly by 6.9 points to 49.6 and into the contraction territory.  Investors noted that Fed Chair Powell had emphasized in his recent speeches that the price of core services other than housing, which was driven by wages and service sector activities, is the most important price category to consider for understanding the future evolution of inflation. Despite the higher-than-expected prints in non-farm payrolls and a lower unemployment rate, Nasdaq 100 rose 2.8% and S&P 500 climbed 2.3%. All 11 sectors within the S&P500 gained, with materials, up 3.4%, leading, followed by information technology, and real estate. Tesla recovered from early losses on cutting prices in China and bounced 2% Tesla China has cut again the price of its Model 3 by 13.5% to RMB 20,990 (USD3,350) and Model Y by 10% to RMB 25,990 (USD3,790) in China within three months from the prior price cut.  Following the news, shares of Tesla (TSLA:xnas) plunged as much as 7.7% in early trading but recovered throughout the day and managed to finish the Friday session 2% higher. Costco (COST:xnys) surged 7.2% on strong December sales Costco reported U.S. comparable sales rose 6.4% in December 2022, above the 5% expected by street analysts. The strong holding sales performance saw the bulk retailer’s share price advance 7.2% last Friday. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) soared with yields on the 10-year notes 16bps richer to 3.56% Treasuries were bid following the growth in average hourly earnings slowed to 0.3% M/M and 4.6% Y/Y from a revised down 0.4% M/M (previously reported 0.6%) and 4.8% Y/Y (previously reported 5.1%). Yields oscillated for a while as investors weighed the soft wage growth against the solid payrolls and fall in unemployment rates. Decisive declines in yields came after the release of the ISM Services Index which unexpectedly collapsed to 49.6 in December from 56.5 in November, indicating contracting activities in the service sector. A service sector in contraction may help cool down inflation in core services excluding housing which is the focus of Fed Chair Powell. Yields on the 2-year notes fell by 21bps to 4.25% and those on the 10-year notes became 16bps richer to 3.56%. What should you be watching today in equities across APAC; Copper, gold, iron ore The Australian share market (ASXSP200.I) opened 1% higher today, following the stellar close of US shares. This week we could also see some money deployed that was removed from the market from the end of US financial year two weeks ago. In terms of key pockets of potential gains to watch; Commodity stocks could likely to do well as there is room for the Fed to not be as hawkish. The copper price rose 2.4% to its highest level since November, which will could likely boost copper stocks today and this week, and spot gold price jumped 1.8% to a range it last traded in June last year. Also keep an eye on coal stocks this week, as coal demand usually peaks in January and Chinese authorities are in discussion on a partial end to the Australian coal ban. So keep an eye on Whitehaven Coal and New Hope. Meanwhile, iron ore equities may be possible laggards. Vale, Champion Iron, Fortescue Metals, BHP and Rio will be on watch as the Iron ore price (SCOA) has fallen 1.3% from its five month high as buying of iron ore is expected to grind lower as China heads to lunar new year holidays. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) Hong Kong stocks consolidated in a choppy session. Shares of Chinese developers surged in the morning session, following China’s central bank and bank regulator jointly issued a directive to allow banks in cities with declining home prices to lower mortgage interests below the floor dictated current policies. Adding to fuel the rally in property developers was the comment from China’s Minster of Housing and Urban-Rural Development in an interview with the People’s Daily, pledging support to the financing needs of developers and reports suggesting that China is considering relaxing the “three red lines” that constraining highly leveraged developers from getting new financing. Stocks however turned to the south after the lunch break. President of the China Society of Economic Reform said the Chinese Government will roll out “some forceful measures” to redistribute income and “establish a mechanism to regulate wealth accumulation” in order to advance “common prosperity”.   Hang Seng Index finished last Friday 0.3% lower. Alibaba Health (00241:xhkg), Meituan (03690:xhkg), and Haidilao (06862:xhkg) were among the biggest losers with the Hang Seng Index. EV stocks fell, following the news that Tesla China has cut again the price of its Model 3 and Model Y in China within three months from the prior price cut. In A-shares, China’s CSI300 advanced by 0.3% with solar names, lithium battery makers, electric equipment, non-ferrous metal, petrochemicals, and basic chemicals leading. FX: the dollar declined versus G10 currencies on Friday The USD posed a bullish breakout from the three-week range at the start of 2023 but aggressively snapped back after a disappointing PMI release on Friday as 10-year yields dipped back towards 3.55%. NOK, AUD and NZD were the biggest gainers against the USD on Friday, with AUD also benefitting from China reopening. AUDNZD remains supported above 1.0800 with USDCNH testing support at 6.8200 on the Chinese reopening wave with extra vigour via strong PBoC midpoint fixes and measures aimed at propping up the ailing real estate sector. USDJPY slid to 132 with BOJ Governor Kuroda sticking to dovish intentions but PM Kishida once again saying over the weekend that he will have 'discussions' with new BOJ governor. The Aussie dollar flagged a bullish signal, crossing above the 200-day moving average The US dollar suffered its longest streak of weekly falls in two months. So that’s supporting other currencies higher. In particular, the commodity currency, the Aussie dollar broke above its 200-day moving average, which could be seen as a bullish sign. The Aussie dollar trades at two-month highs of 68.85 US cents. What's also supporting the Aussie dollar is that China’s reopening is expected to add considerably to Australia’s GDP. Some economists predict a 0.5% addition to GDP in a year once Chinese students and tourists return. JPMorgan thinks over the next two years Aussie GDP will grow near 1% thanks to inbound Chinese students and holiday makers likely returning. Crude oil (CLG3 & LCOH3) remains volatile amid China’s chaotic reopening The first week of 2023 was tough for crude oil, with global demand concerns weighing and China outlook remaining mixed. Despite removing most virus-related restrictions, a surge in cases across the country could stifle economic activity. Meanwhile, the IMF warned that a third of the global economy could be in recession in 2023. Supply side concerns are also seen with European sanctions on Russian oil having kicked in, while OPEC has reiterated that it is willing to step in with further production cuts. WTI futures traded slightly higher to $74/barrel in Asian morning while Brent was close to $78.90. Gold (XAUUSD) advanced over 2% on weaker USD Gold is off to a positive start in 2023, and a further boost was seen on Friday after the mixed jobs report and weakness in ISM services saw a plunge in the USD. However, demand ahead of Lunar New Year is likely to stay strong, and central banks are also active in the physical market. People’s Bank of China bought another 30 tonnes of gold in December 2022, following 32 tonnes in November, boosting the country's stash of gold to 2,010 tonnes. Speculation remains rife that these are steps for China to move away from dollar-based trading as geopolitical tensions remain high. Gold prices are testing $1870 this morning and support at $1808 will be key to hold to maintain the uptrend. US CPI data due this week remains key. Copper getting in close sight of $4 as China stimulus continues Copper is leading a rebound in base metals as China looked to support its property sector. Beijing may allow some firms to add leverage by easing borrowing caps and push back the grace period for meeting debt targets. These were part of the “three red lines” policy that contributed to the downturn in recent years. HG Copper broke above resistance at the 200-day at $3.8525, and will be targeting the $4 per pound next.  Read next: The U.K. Economy Is In Trouble, Fall Of GDP Is Expected!| FXMAG.COM What to consider? US macro: Big miss in ISM services overshadows NFP gains The ADP report from last week had set up expectations for a stronger NFP print on Friday, and while the headline came in stronger and with a drop in unemployment but the market instead focused on significantly slower wage growth and the reaction was dovish, with the US dollar sagging. Still, the report doesn’t change the fact that US labor market remains tight and WSJ’s Timiraos also noted that Friday’s employment report does little to clarify how much the Fed will raise interest rates at its next policy meeting. Nonfarm payrolls showed US employers added 223,000 jobs last month, from a downwardly revised 256,000 in November, with the unemployment rate hitting a cycle low of 3.5% again. Wage growth however slowed to 4.6% YoY (0.3% MoM) in December from a revised 4.8% YoY (0.4% MoM) in November, keeping the market reaction to the overall jobs report mixed, before the big disappointment from ISM services which surprisingly dipped into contraction for the first time since May 2020 to 49.6 vs. expected 55. The forward-looking sub-indicator, new orders, fell 10.8 pts to 45.2 but details were still mixed with 11 of the 18 services sector remaining in expansion. Fed speakers continue to highlight inflation concerns A host of Fed speakers were on the wires on Friday, and key message was the need for more rate hikes still despite signs of price pressures cooling. Cook (voter) said inflation is "far too high" and "of great concern" despite recent encouraging signs, while Bostic (non-voter) said the Fed needs a target rate above 5% and he expects Fed to hold at a peak policy rate for an extended period, "well into 2024". Barkin, another non-voter, touched more on inflation saying that that the Fed is still resolute on inflation, and needs to stay on the case until inflation is sustainably back to the 2% goal. Retiring member Evans however called for a slower pace of rate hikes. The eurozone inflation is cooling down It was largely expected that the eurozone inflation would cool down in December. But the first estimate is actually much lower than forecasted, at 9.2 % versus prior 10.1 % in November. This is a positive development and it goes in the right direction, of course. But this is still a high number. Looking at the main components, energy had (without surprise) the highest annual rate in December at 25.7 %), followed by food, alcohol and tobacco (13.8 %), non-energy industrial goods (6.4%) and services (4.4%). What is worrying is that core CPI continues to increase at 5.2 % versus prior 5.0 % and expected 5.1 %. This will push the European Central Bank (ECB) to keep hiking interest rates in the short-term. But the peak in interest rates is getting closer (Mario Centeno) and the eurozone macroeconomic outlook is not that bad actually (if there is a recession underway, it is at the mild end according to the ECB chief Philip Lane). Alibaba’s Jack Ma cedes his control of Ant Group According to a statement released by the company on 7 January, Jack Ma terminated his acting-in-concert arrangement with other individuals. Under the new structure, 10 individuals, including Mr. Ma, have independent voting rights in the management of the company, as opposed to the prior arrangement that gave Mr. Ma indirect control of 53,46% of the voting rights. Mr. Ma’s stake in Ant Group is reduced to 6.2% from 10.6%. China’s government think-tank said China is launching measures to regulate wealth accumulation President of the China Society of Economic Reform, which is under the National Development and Reform Commission (NDRC), said in a reform forum that the Chinese Government is launching “some forceful measures” to redistribute income, increase taxes, social security, and transfer payments, and “establish a mechanism to regulate wealth accumulation” in order to advance “common prosperity”. Establishing a mechanism to regulate wealth accumulation was first mentioned in President Xi’s work report delivered at the Chinese Communist Party’s 20th National Congress as a means to advance common prosperity. China is reportedly considering to relax the three red-line policy that restrained developers from borrowing According to Bloomberg, the Chinese authorities are considering to relax restrictions on highly-leveraged property developers from increasing their borrowings. The uplift of the restrictions would be important addition to the recent support measures to the real estate sector in China. The three red lines that were introduced in 2020 restrict developers’ ability to borrow if their debts have gone beyond the stipulated limits relative to assets, net debt, or cash. For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Contraction in US ISM services and soft wage growth overshadows strong jobs numbers – 9 January 2023 | Saxo Group (home.saxo)
Polish Inflation Declines in July, Paving the Way for September Rate Cut

UK’s November GDP Will Likely Signal The Start Of Recession, The Q4 Earnings Season Starts Next Week

Saxo Bank Saxo Bank 09.01.2023 08:37
Summary:  Volatility back in focus this week with US CPI on the radar, after jobs report showed a strong headline but softening wage growth. Economic concerns in the US are increasing but it still isn’t enough for the Fed to shift focus from inflation which is likely to remain about three times the Fed’s 2% target, and Fed Chair Powell’s comments this week will also be key. China’s December CPI is expected to come in modestly higher, with PPI less negative as well. Australia’s November CPI will key for further direction in AUDUSD. UK’s November GDP will likely signal the start of an incoming official recession, and Q4 earnings season kicks off with bank earnings in focus this week.         US CPI remains the most key data point to watch, Fed Chair Powell speaks as well There is enough reason to believe that we can get some further disinflationary pressures in the coming weeks. Economic momentum has been weakening, as highlighted by the plunge in ISM services last week into contraction territory, particularly with the forward-looking new orders subcomponent. An unusually warm winter has also helped to provide some reprieve from inflation pains. Bloomberg consensus forecasts are pointing to a softening in headline inflation to 6.5% YoY, 0.0% MoM (from 7.1% YoY, 0.1% MoM prev) while core inflation remains firmer at 5.7% YoY, 0.3% MoM (from 6.0% YoY, 0.2% MoM). Still, these inflation prints remain more than three times faster than the Federal Reserve’s 2% target. Fed officials have made it clear they expect goods price inflation to continue to ease, expecting another big drop in used car prices. But officials are seemingly focused on services ex-housing which remains high. So even a softer inflation print is unlikely to provide enough ammunition for the Fed to further slow down its pace of rate hikes. Fed Chair Jerome Powell this week as well, and his tone will be key to watch. Volatility on watch if US CPI sees a big surprise The last two months have shown that big swings in US CPI can spark significant volatility in the equity markets, given the large amounts of hedging flows and short-term options covering. With a big focus on CPI numbers again this week, similar volatility cannot be ruled out. Volume might be thin still this week as many are still on holidays, so moves in equities could be amplified in either direction. Meanwhile, FX reaction to CPI has been far more muted, but some key levels remain on watch this week. A higher-than-expected CPI print could keep expectations tilted towards a 50bps rate hike again in February, while a miss could mean expectations of further slowdown in Fed’s tightening pace to 25bps in February could pick up which can be yield and dollar negative. EURUSD looks stretched above 1.0650 and key levels to watch will be 1.0500, while USDJPY needs to close below 130.38 to extend the downturn further. USDCNH remains key to watch as well as it gets closer to test 6.8000 amid China reopening and easing in property sector. AUDUSD is also flashing a bullish signal after breaking above the key 0.69 this morning with China reopening momentum underpinning. The Aussie dollar flags a bullish signal, crossing a key level. Could inflation add to the rally? After the US dollar suffered its longest streak of weekly falls in two months, the commodity currency - the Aussie dollar broke above its 200-day moving average, which is seen by some as a bullish sign with the Aussie dollar (AUDUSD) trading at two-month high of 0.69 US cents. What's also supporting the currency is that China’s reopening is expected to add considerably to Australia’s GDP. There’s a potential 0.5% addition to GDP in a year once Chinese students and tourists return. Plus there is likely to be an extra boost to GDP from the anticipated pick up in commodity buying from China. Extra hot sauce could even come from China potentially buying Australian coal again. JPMorgan thinks over the next two years, Aussie GDP will grow 1% alone thanks to inbound Chinese students and holiday makers likely returning. The next catalyst for the currency is inflation, CPI data out on Wednesday Jan 11. Core or trimmed CPI is expected to have risen from 5.3% YoY to 5.5% YoY. If CPI come in line with expectations, or above 5.3% YoY, you might also think the AUD rally could be supported.  China’s CPI expected modestly higher, PPI less negative Economists surveyed by Bloomberg had a median forecast of China’s December CPI at an increase of 1.8% Y/Y, edging up from 1.6% in November, mainly due to base effects, as food prices are likely to be stable and higher outprices in the manufacturing sector might be offset by a fall in services prices. PPI in December is expected to be -0.1% Y/Y, a smaller decline from -1.3% Y/Y in November, benefiting from base effects. The decline in coal prices was likely to be offset by an increase in steel prices. Growth in new RMB loan and aggregate financing expected to slow in China The Bloomberg survey consensus is forecasting a modest decline in new RMB loans to RMB1,200 billion in December from RMB1,210 billion in November despite the Chinese authorities have been urging banks to lend to the real estate sector. New aggregate financing is expected to slow to RMB1,850 billion from RMB1,990 billion, primarily dragged by a decline in bond issuance from local governments. UK November GDP to signal an incoming recession UK’s monthly GDP numbers are due this week, and consensus expects a contraction of 0.3% MoM in November from +0.5% MoM previously which was boosted by the favourable M/M comparison vs. September, which was impacted by the extra bank holiday for the Queen’s funeral. The economy is clearly weakening, and another quarter of negative GDP print remains likely which will mark the official start of a recession in the UK. Start of the US earnings season The Q4 earnings season starts next week with major US banking earnings most notably from Bank of America, JPMorgan Chase, and Citigroup. Analysts remain muted on US banks with earnings expected to show another quarter of negative earnings growth compared to a year ago. For the overall Q4 earnings season we expect to see more industries experiencing margin compression than industries experiencing expanding margins. This will continue to be a headwind for earnings growth. Analysts did not see the margin compression coming in Q3 and judging from current estimates they have not materially revised down their expectations. That means that the Q4 earnings season and beyond could be paved with more disappointments. The list below shows the most important earnings releases next week. Tuesday: Albertsons Thursday: Fast Retailing, Seven & I Friday: DiDi Global, Aeon, Bank of New York Mellon, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, UnitedHealth, BlackRock, Delta Air Lines, First Republic Read next: The U.K. Economy Is In Trouble, Fall Of GDP Is Expected!| FXMAG.COM Key economic releases & central bank meetings this week Monday 9 January U.S. Manheim used vehicle index (Dec) Germany Industrial production (Nov) Eurozone Sentix Investor Confidence (Jan) Eurozone Unemployment rate (Nov) Japan: market closed for holiday Tuesday 10 January France Industrial production (Nov) Japan Tokyo-area CPI (Dec) Fed's Bostic speaks in a moderated discussion Fed's Daly interviewed in WSJ Live event Fed Chair Powell speaks at Riksbank event Wednesday 11 January Australia retail sales (Nov) Australia CPI (Nov) U.S. MBA mortgage applications (Jan 6) Thursday 12 January Australia trade (Nov) U.S. CPI (Dec) China CPI & PPI (Dec) Fed's Harker discusses the economic outlook Friday 13 January U.S. U of Michigan Consumer Sentiment (Jan, preliminary) Eurozone: Industrial production (Nov) UK: Monthly GDP (Nov) Japan: Money supply (Dec) China: Imports, exports and trade balance During the week: China: Aggregate financing, new RMB loans, money supply (Dec) Source: Saxo Spotlight: What’s on the radar for investors & traders for the week of 9-13 Jan? US/China/Australia inflation, UK GDP and the start of Q4 earnings season | Saxo Group (home.saxo)
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

ISM Services PMI And Factory Orders Help The AUD/JPY Price To Remain Firmer

TeleTrade Comments TeleTrade Comments 09.01.2023 08:42
AUD/JPY clings to mild gains around three-week high. Australia Building Permits slumped in November, Tokyo markets are off for Coming-of-Age Day. China-linked headlines propel risk-on mood amid a sluggish start to the key week. Inflation numbers from US, China and Japan appears crucial for clear directions. AUD/JPY seesaws around the highest levels in three weeks as it makes rounds to 91.00 during Monday’s sluggish Asian session. In doing so, the cross-currency pair takes clues from the markets’ risk-on mood to grind higher. However, a holiday in Japan joins downbeat Aussie data and hawkish concerns from the Bank of Japan (BOJ) to challenge the AUD/JPY bulls. That said, Australia’s Building Permits dropped to -15.1% YoY in November versus -6.4% prior. Further details suggest that the MoM prints also declined to -9.0% from -5.6% prior (revised from -6.0%), as well as the -1.0% market forecasts. On the other hand, comments from Japanese Prime Minister (PM) Fumio Kishida also seem to probe the AUD/JPY pair’s upside momentum. “While communicating closely with markets, the BOJ needs to make its policy more flexible with an eye on an eventual normalization of monetary policy,” said Japan PM Kishida. The market’s risk profile remains firmer as China reopens national borders after a three-year pause. On the same line could be the early signals suggesting China’s heavy shopping during the festive season, as well as comments from People’s Bank of China (PBOC) Official suggesting optimism surrounding China’s growth conditions. Read next: The U.K. Economy Is In Trouble, Fall Of GDP Is Expected!| FXMAG.COM It should be noted that Friday’s downbeat prints of US wage growth, ISM Services PMI and Factory Orders also add strength to the risk-on mood and help the AUD/JPY price to remain firmer. Amid these plays, Wall Street closed positive while the US 10-year Treasury yields dropped 16 basis points (bps) to 3.56%, the lowest levels in three weeks. It’s worth noting that the S&P 500 Futures print 0.20% intraday gains by the press time. Looking forward, inflation data from Tokyo, China and the US will be important for the AUD/JPY pair traders to watch for clear directions as upbeat sentiment jostles with hawkish bets on the Bank of Japan (BOJ). Technical analysis Although the resistance-turned-support line defends AUD/JPY bulls around 89.80, a two-month-old descending trend line near 93.00 challenges the upside momentum.
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The GBP/JPY Pair Is Likely To Remain On Tenterhooks Amid Volatility Contraction

TeleTrade Comments TeleTrade Comments 09.01.2023 08:44
The formation of an ascending triangle chart pattern indicates a volatility contraction. Advancing 50-EMA indicates that the upside bias in the short term is still solid. A 40.00-60.00 range oscillation by the RSI (14) indicates that investors are awaiting a trigger for a decisive move. The GBP/JPY pair has corrected after facing barricades around the psychological resistance of 160.00 in the Asian session. The cross has slipped to near 159.50 and is likely to remain on tenterhooks amid volatility contraction. Trading activity is expected to remain quiet as Japanese markets are closed on account of Coming of Age Day. On an hourly scale, the cross is auctioning in an Ascending Triangle chart pattern that signals a volatility contraction. Usually, a volatility contraction is followed by a breakout, which results in wider ticks and heavy volume. The horizontal resistance of the aforementioned chart pattern is plotted from January 4 high around 160.20 while the upward-sloping trendline is placed from January 5 low at 158.52. At the time of writing, the cross is looking for support around the 20-period Exponential Moving Average (EMA) at 159.53 after a mild correction. While the 50-EMA at 159.25 is sloping north, which indicates that the short-term trend is solid. The Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates that investors are awaiting a fresh trigger for a decisive move. For an upside move, the cross needs to deliver a breakout of the chart pattern above January 4 high around 160.20, which will drive the asset towards December 27 high around 161.00. An upside break of the latter will expose the cross for more upside to near December 28 high around 162.34. Alternatively, a breakdown below January 5 low at 158.52 will drag the cross towards January 3 high at 157.46 followed by January 3 low at 155.36. Read next: The U.K. Economy Is In Trouble, Fall Of GDP Is Expected!| FXMAG.COM GBP/JPY hourly chart  
Underestimated Risks: Market Underestimating Further RBA Tightening

Hopes Of An Upbeat US Earnings Season Also Seem To Favor The USD/INR Bears

TeleTrade Comments TeleTrade Comments 09.01.2023 08:49
USD/INR dribbles near the lowest levels in one month. China reopening joins PBOC headlines to underpin risk-on mood in Asia. Downbeat US wage growth weigh on Treasury yields and hawkish Fed bets. Japan holiday, light calendar and upbeat oil prices allow bears to lick their wounds. USD/INR bears lick their wounds near 82.30, after refreshing a one-month low, as the Indian Rupee (INR) buyers await fresh clues during early Monday. In doing so, the quote remains indecisive after printing a three-day downtrend at the latest. That said, China-inspired risk-on mood joins the broadly softer US Dollar to weigh on the USD/INR prices. However, a light calendar and the cautious mood ahead of this week’s key US inflation data, as well as the holiday in Japan, restrict the pair’s immediate moves. It’s worth noting that China’s reopening of the international borders after a three-year blockage bolstered optimism in Asia. Also favoring the risk appetite could be early signals suggesting Beijing’s heavy shopping amid the year-end festive season. Furthermore, comments from the People’s Bank of China (PBOC) Official also hinted at robust growth expectations from the dragon nation and underpinned the firmer sentiment. On the other hand, Friday’s downbeat prints of US Average Hourly Earnings, ISM Services PMI and Factory Orders pushed back the hawkish hopes from the Fed as the figures raised the US recession concerns, which in turn weighed on the US Dollar Index (DXY). Additionally, weighing on the DXY could be the mixed comments from the Fed policymakers and hopes of an upbeat US earnings season also seem to favor the USD/INR bears. Alternatively, a light calendar and upbeat prices of Crude Oil put a floor under the USD/INR prices. The reason could be linked to India’s reliance on energy imports. Amid these plays, S&OP 500 Futures print mild gains while India’s benchmark equity index BSE Sensex rises over 1.0% by the press time. Moving on, a lack of major data/events and firmer oil prices can restrict the USD/INR pair’s immediate moves ahead of Thursday’s US Consumer Price Index (CPI) data. Technical analysis A clear downside break of the 82.40 horizontal support favors USD/INR bears targeting the early December 2022 swing low near 82.10
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The Aussie Pair (AUD/USD) Has Delivered An Upside Break

TeleTrade Comments TeleTrade Comments 09.01.2023 08:49
A cheerful market mood has strengthened the Australian Dollar. North-side sloping 20-and 50-EMAs add to the upside filters. The RSI (14) has shifted into the bullish range of 60.00-80.00, which indicates that bullish momentum is active now. The AUD/USD pair is displaying a sideways auction around the immediate hurdle of 0.6930 in the Asian session. The Aussie asset is expected to continue its upside journey amid sheer volatility in the US Dollar Index (DXY). The USD Index has dropped below 103.25, at the time of writing, and is expected to refresh its six-month low below the critical support of 103.00 amid a risk-appetite theme. S&P500 futures have carry-forwarded Friday’s strength as investors see a slowdown in the policy tightening pace by the Federal Reserve (Fed) ahead. Meanwhile, the 10-year US Treasury yields dropped to 3.56%. On a four-hour scale, the Aussie asset has delivered an upside break of the horizontal resistance plotted from December 13 high around 0.6880, which has turned into support now. Also, the breakout of the Rising Channel chart pattern indicates the strength of the Australian Dollar. Upward-sloping 20-and 50-period Exponential Moving Averages (EMAs) at 0.6833 and 0.6800 respectively add to the upside filters. Also, the Relative Strength Index (RSI) (14) has delivered a breakout into the bullish range of 60.00-80.00, which indicates that the upside momentum has been triggered. After a juggernaut rally, a corrective to near December 13 high around 0.6880 would be an optimal buy for investors, which will drive the major towards Monday’s high at 0.6930, followed by the psychological resistance at 0.7000. On the contrary, a downside move below December 29 low at 0.6710 will drag the major further toward December 22 low at 0.6650 followed by November 21 low at 0.6585. AUD/USD four-hour chart  
Caixin Services PMI Data Has Helped The Chinese Yuan (CNH)

The USD/CNH Pair Remains On The Bear’s Radar

TeleTrade Comments TeleTrade Comments 09.01.2023 08:54
USD/CNH drops to the lowest levels since August 17, 2022. Clear break of 200-DMA, bearish MACD signals favor sellers as they eye two-month-old descending support line. Previous support line from June adds to the upside filters. USD/CNH takes offers to renew a multi-day low around 6.7900 heading into Monday’s European session. In doing so, the offshore Chinese Yuan (CNH) pair extends the previous day’s downside break of the 200-DMA to poke the lowest levels since mid-August 2022. Also adding strength to the bearish bias is the pair’s sustained trading below the support-turned-resistance line from early June, as well as the bearish MACD signals. That said, USD/CNH bears are on their way to meeting a downward-sloping support line from November 14, close to 6.7650 by the press time. The pair’s further downside, however, appears limited as the 61.8% Fibonacci retracement level of its February-October upside, near 6.7150, could challenge the USD/CNH sellers afterward. If not, then the mid-2022 low surrounding 6.6170 and the 6.6000 round figure will be in focus. On the contrary, recovery moves may initially aim for the 50.0% Fibonacci retracement level surrounding 6.8420 ahead of confronting the 200-DMA level of 6.8730. Following that, the seven-month-old support-turned-resistance line near 6.9240 will be in focus as it holds the key to the USD/CNH run-up towards the 7.0000 psychological magnet. Overall, USD/CNH remains on the bear’s radar even if the downside room appears limited. USD/CNH: Daily chart Trend: Further downside expected
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

Favoring The USD/CAD Bears Could Be The Challenge For The Federal Reserve

TeleTrade Comments TeleTrade Comments 09.01.2023 08:58
USD/CAD drops to the lowest levels in one month as bears keep the reins. China reopening, challenges for Fed hawks underpin risk-on mood. Oil price grinds higher amid softer US Dollar, hopes of more energy demand from China. Upbeat Canada jobs report versus mixed US data adds strength to the bearish moves. USD/CAD bears occupy the driver’s seat as the Loonie pair slides to the lowest levels in a month heading into Monday’s European session. In doing so, the quote takes clues from the market’s upbeat sentiment, as well as firmer prices of Canada’s main export item WTI crude oil. That said, WTI crude oil buyers poke $75.00 amid expectations that the China-inspired global optimism could tame the recession fears and inflate the energy demand. Also likely to have favored the black gold prices could be the downbeat US Dollar and geopolitical fears surrounding Russia. Elsewhere, China’s reopening of the international borders after a three-year blockage bolstered the market’s optimism. Also favoring the risk appetite could be comments from the People’s Bank of China (PBOC) Official who hinted at robust growth expectations from the dragon nation. Additionally favoring the USD/CAD bears could be the challenge for the Federal Reserve (Fed) hawks, especially after the latest US data.  On Friday, United States Nonfarm Payrolls (NFP) rose by 223,000 in December compared to the market expectations of 200,000 and November's increase of 256,000 (revised from 263,000). Further details of the US December jobs report revealed that the Unemployment Rate declined to 3.5% from 3.6% in November and 3.7% expected. More importantly, the Average hourly earnings rose 0.3% in December versus 0.4% prior while the YoY figures eased to 4.6% from 4.8% in November. Further, US ISM Services PMI slumped to the lowest levels in 31 months while suggesting a contraction in activities with 49.6 figures for December, versus the market expectations of 55 and 56.5 marked in November. On the same line, US Factory Orders also slumped, falling 1.8% in November after gaining 0.4% in October. On the other hand, Canada’s Net Change in Employment rose by 104K in December versus 8K expected and 10.1K prior while the Unemployment Rate dropped to 5.0% during the stated month, compared to 5.2% market forecasts and 5.1% previous readings. Despite the mixed readings of the key US data, Atlanta Federal Reserve bank president Raphael Bostic stated that the US economy is definitely slowing, which in turn drowned the key US Treasury bond yields and the US Dollar. That said, the US 10-year Treasury yields dropped 16 basis points (bps) to 3.56%, the lowest levels in three weeks, whereas the US Dollar Index (DXY) marked the biggest daily slump since November 11. Against this backdrop, Wall Street closed with notable gains and helps the S&P 500 futures to remain firmer, which in turn exerts downside pressure on the US Dollar and favors Oil prices. Moving on, Thursday’s US inflation data will be crucial for the USD/CAD pair traders while today’s Canadian Building Permits and Tuesday’s speech from Bank of Canada (BOC) Governor Tiff Macklem could offer intermediate directions. Technical analysis A clear downside break of the 100-DMA, around 1.3480 by the press time, directs the USD/CAD bears towards the 1.3230-25 support zone comprising a seven-month-old ascending trend line and multiple levels marked since July 2022.
The USD/JPY Price Seems To Be Optimistic

The Risk-On Impulse Undermines The Safe-Haven Japanese Yen (JPY)

TeleTrade Comments TeleTrade Comments 09.01.2023 09:46
USD/JPY oscillates in a narrow trading band on the first day of a new week. The prevalent USD selling bias is seen as acting as a headwind for the major. The risk-on mood undermines the safe-haven JPY and limits the downside. The USD/JPY pair struggles to gain any meaningful traction on the first day of a new week and seesaws between tepid gains/minor losses through the early European session. The pair is currently placed just below the 132.00 round-figure mark and seems vulnerable to extending Friday's retracement slide from over a one-week high. The US Dollar adds to Friday's softer US macro data-inspired losses, which, in turn, is seen as a key factor acting as a headwind for the USD/JPY pair. In fact, the closely-watched US monthly jobs report (NFP) showed that Average Hourly Earnings grew 0.3% last month, lowering the YoY rise to 4.6% from 4.8% in November. This was seen as an indication that inflation pressures could be weakening. Furthermore, the US ISM Services PMI fell into contraction territory and hit the worst level since 2009, fueling expectations for a less aggressive policy tightening by the Fed. This leads to an extension of the downfall in the US Treasury bond yields, which continues to weigh on the buck. That said, the risk-on impulse undermines the safe-haven Japanese Yen and acts as a tailwind for the USD/JPY pair. China's biggest pivot away from its strict zero-COVID policy boosts investors' confidence, which is evident from a generally positive tone around the equity markets. The latest optimism, however, is likely to remain limited amid concerns that the massive flow of Chinese travellers may cause another surge in COVID infections and worries about a deeper global economic downturn. Moreover, the recent reports that the Bank of Japan (BoJ) plans to raise its inflation forecasts could lend support to the JPY. This, in turn, suggests that the path of least resistance for the USD/JPY pair is to the downside. Hence, any attempted recovery could be seen as a selling opportunity and runs the risk of fizzling out rather quickly in the absence of any relevant macro data from the US.
Sterling Slides as Market Anticipates Possible Final BOE Rate Hike Amidst Weakening Consumer and Housing Market Concerns

The Market Is Betting On A Shallow Recession In Some Parts Of The World

Saxo Bank Saxo Bank 09.01.2023 09:58
Summary:  Markets jumped higher on Friday after a mixed December jobs report from the US, mostly reacting a bit later in the session to the very weak December ISM Services survey, which suggests a rapidly decelerating services sector. US rates plunged all along the curve and the USD tanked as the market lowered Fed rate hike expectations, and risk assets rallied, with a further tailwind from China’s huge policy shifts in recent weeks.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) On Friday, it seems the market was looking past the strong labour market data focusing on the miss on the ISM Services Index in December at 49.6 vs 55. This bolsters the view that bad news is good news as it will cause the Fed to halt its monetary tightening sooner rather than later. Our view is still the same that inflation will remain stickier than what the market expects and thus even a mild slowdown in the economy will not lead to substantially lower interest rates. When the market recognizes this, it will begin to price equities more on slowing growth not offset by lower interest rates. Nevertheless, the US equity market is picking up momentum with S&P 500 futures extending their gains up 0.2% trading around the 3,924 level and above the upper level of the recent trading range. If momentum extends and the news flow remains supportive then the 3,950 level could quickly come into play. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) Alibaba (09988:xhkg), surging 7.6%, was the best performing stock within the Hang Seng Index on Monday, following Ant Group announcing a new arrangement in which Alibaba’s founder Jack Ma cedes his indirect control of Ant Group. The new arrangement, which apparently has the blessing of the Chinese authorities, signals that Alibaba and its affiliates may be close to an end of the government-imposed reorganization and return to relative normal business.  Separately, Chairman of the China Banking and Insurance Regulatory Commission said that the rectification of the financial arms of internet platform companies had basically finished. Hang Seng Index surged 1.4% as of writing. China’s CSI300 gained 0.7% with non-ferrous metal, education services, and poultry farming leading. FX: USD sells off on weak ISM Services survey The US dollar sold off after a mixed jobs report delivered not signal, but then a shocking drop in the December ISM Services (more below) took down US treasury yields sharply all along the curve. By this morning’s trade, the move sent EURUSD back above 1.0675 and within reach of the 1.0700+ highs from December, while AUDUSD jumped to new cycle highs above 0.6900 on the weaker greenback together with surging metals prices on China’s policy shift (more below.). Despite the big drop in yields, USDJPY reacted less than other USD pairs as the strong rally in risk sentiment saw flows focusing on more pro-cyclical currencies, like AUD, NZD and NOK. Crude oil (CLG3 & LCOH3) remains volatile amid China’s chaotic reopening The first week of 2023 was tough for crude oil, driven by global growth concerns, a very mild winter across the Northern Hemisphere dampening demand, and a mixed outlook for China. Despite removing most virus-related restrictions, a surge in cases across the country has hit the short-term demand outlook while at the same time setting the economy on a path to recovery. Meanwhile, the IMF warned that a third of the global economy could be in recession in 2023. Supply side concerns are also seen with European sanctions on Russian oil having kicked in, while OPEC has reiterated that it is willing to step in with further production cuts. Short-term resistance being the 21-day moving at $75.65 in WTI and $81.15 in Brent. Gold (XAUUSD) surged higher on weak US ISM Gold’s already positive start to 2023 received a further boost on Friday after the mixed jobs report and very weak ISM services (see below) triggered a plunge in yields and the dollar. Total ETF holdings reached a one-month high while central banks remain active with the PBoC saying that it bought another 30 tonnes of gold in December 2022, following 32 tonnes in November, boosting the country's stash of gold to 2,010 tonnes. Speculators started the new year by boosting their net futures long to a seven-month high, supported by the current strong momentum and a general gold friendly outlook for 2023 driven by recession risks and peak dollar and yields. The next major hurdle for gold being $1896, the 61.8% retracement of the 2022 correction, with a break above confirming the change in direction that has been under way since November. Copper trades near key $4 level as China stimulus continues Copper jumped to a six-month high in Asia on Monday, driven by a general rebound in base metals as China looked to support its property sector. Beijing may allow some firms to add leverage by easing borrowing caps and push back the grace period for meeting debt targets. These were part of the “three red lines” policy that contributed to the downturn in recent years. Copper has advanced since November after lockdown protests led to an abrupt change in direction towards reopening the economy following months of fruitless lockdowns. The change in direction set by the government has bolstered the outlook for demand beyond the first quarter. Having broken above its 200-day moving average on Friday, now support at $3.8475, HG copper almost touched the key $4 level overnight. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) soared with yields on the 10-year notes 16bps richer to 3.56% Treasuries were bid Friday following the news of slowing average hourly earnings. Yields oscillated for a while as investors weighed the soft wage growth against the solid payrolls and fall in unemployment rates. Decisive declines in yields came after the release of the shockingly wevak December ISM Services Index (more below on the ISM and US jobs report), indicating contracting activities in the service sector. Two-year yields fell 21bps to 4.25% and those on the 10-year notes dropped some 16 bps to 3.56%. What is going on? Asian and EM equities enter bull market The leading MSCI indices tracking these two segments of the global equity market have entered a bull market up 20% since their lows in October fueled a more positive narrative. The market is betting on a shallow recession in some parts of the world, while inflation keeps coming down, and on top of a successful kickstart of the Chinese economy. All three wishes may not be able to be fulfilled simultaneously and our view is that the market is getting too excited about growth too early as a lot of uncertainty persists. Eurozone inflation is cooling off It was largely expected that the eurozone inflation would cool in December. But the first estimate was much lower than forecasted, at 9.2 % versus 10.1 % in November. This is a positive development and goes in the right direction, but this is still a high number. Looking at the main components, energy had (without surprise) the highest annual rate in December at 25.7 %), followed by food, alcohol and tobacco (13.8 %), non-energy industrial goods (6.4%) and services (4.4%). What is worrying is that core CPI continues to increase at 5.2 % versus prior 5.0 % and expected 5.1 %. This will push the European Central Bank (ECB) to keep hiking interest rates in the short term. But the peak in interest rates is getting closer (Mario Centeno) and the Eurozone macroeconomic outlook is not as bad as feared (if there is a recession underway, it is at the mild end according to the ECB chief Philip Lane). US macro: big miss in ISM services overshadows NFP gains The ADP report from last week had set up expectations for a stronger NFP print on Friday, and while the headline came in stronger than expected at ´+223k and the unemployment rate dropped back to the cycle low of 3.5%, the market instead focused on significantly slower wage growth than expected. The Average Hourly Earnings in December slowed to 4.6% YoY (0.3% MoM) from a revised 4.8% YoY November, keeping the market reaction to the overall jobs report mixed. Ninety minutes later, the December ISM services survey saw a shocking drop into contraction for the first time since May 2020 at 49.6 vs. expected 55 and 56.5 in November. The forward-looking New Orders sub-index fell over 10 points to 45.2 but details were still mixed with 11 of the 18 services sectors remaining in expansion. AUDUSD jumps to new 4-month high, clears 200-day moving average With the US dollar suffering its longest streak of weekly drops in two months, the Aussie dollar broke above its 200-day moving average for the first time since last April, and traded above 0.6900 for the first time since last August. Also supporting the currency is that China’s reopening is expected to add considerably to Australia’s GDP. There’s a potential 0.5% addition to GDP in a year once Chinese students and tourists return, and an anticipated rise in commodity exports to China, especially coal after a prior ban, could add an extra boost to GDP. JPMorgan thinks that over the next two years, Aussie GDP will grow 1% alone thanks to inbound Chinese students and holiday makers likely returning. The next catalyst for the currency is inflation (CPI) data out on Wednesday Jan 11. Core or trimmed CPI is expected to have risen from 5.3% YoY to 5.5% YoY. Fed speakers continue to highlight inflation concerns A host of Fed speakers were on the wires on Friday, and key message was the need for more rate hikes still despite signs of price pressures cooling. Cook (voter) said inflation is "far too high" and "of great concern" despite recent encouraging signs, while Bostic (non-voter) said the Fed needs a target rate above 5% and he expects Fed to hold at a peak policy rate for an extended period, "well into 2024". Barkin, another non-voter, touched more on inflation saying that that the Fed is still resolute on inflation, and needs to stay on the case until inflation is sustainably back to the 2% goal. Retiring member Evans however called for a slower pace of rate hikes. Read next: Plans To Sell FTX Assets Met With Opposition From US Trustee Andrew Vara| FXMAG.COM What are we watching next? How long will market celebrate any additional signs of a slowing US economy? The market’s primary focus on Friday after a very weak US ISM Services survey was the celebration of lower US treasury yields as weak data drives expectations that the Fed can ease its policy tightening more quickly than previously expected, but typically, a weaker economy would mean falling earnings and a credit crunch, which drives markets lower. Only hopes for a benign “soft landing” can continue to see the market celebrating signs of a weakening economy, if that is indeed what we get. This week includes very little in the way of important US data outside of Thursday’s December CPI (perhaps less focus there than previously, given we have seen a number of softer inflation-related data of late). Q4 Earnings season begins this Friday with the largest US financial institutions reporting and the reports and guidance coming over the following couple of weeks will bear close watching. Earnings to watch The Q4 earnings season kicks off this Friday with banking earnings from Bank of America, JPMorgan Chase, and Citigroup with consensus expecting earnings to continue contracting among US banks before coming back to growth this year. The key uncertainty is credit quality in 2023 as it is linked to the degree of a recession or maybe no recession at all in the US economy. With higher interest rates level expectations are that banking revenue will slowly begin to accelerate and if high interest rates persist for an extended period, the longer-term growth for banks could be quite attractive. Overall, the Q4 earnings season is likely going to see an extension of value and tangible companies performing better than intangible-driven companies. Tuesday: Albertsons Thursday: Fast Retailing, Seven & I Friday: DiDi Global, Aeon, Bank of New York Mellon, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, UnitedHealth, BlackRock, Delta Air Lines, First Republic Economic calendar highlights for today (times GMT) 1000 – Eurozone Nov. Unemployment Rate 1200 – Mexico Dec. CPI 1330 – Canada Nov. Building Permits 1530 – UK Bank of England Chief Economist Huw Pill to speak 1730 – US Fed’s Bostic (non-voter) to speak 1730 – US Fed’s Daly (non-voter) to speak 2000 – US Nov. Consumer Credit 2330 – Japan Dec. Tokyo CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – January 9, 2023 | Saxo Group (home.saxo)
Analysis Of The AUD/USD Commodity Currency Pair's Price

The Aussie Pair Has A Potential For Further Upside Movement

Peter Jacimovic Peter Jacimovic 09.01.2023 10:56
Technical analysis: AUD/USD has been trading upside and I found breakout of the multi-week defined trading range, which is good sign that buyers are in control and that there is chance for further upside movement. Trading recommendation: Due to the strong upside pressure and short-term trend in the background, I see potential for further upside movement towards next upside objectives. Watch for the potential buying opportunities with the upside objectives at 0.7020, 0.7125 and 0.7265. MACD oscillator is showing fresh upside momentum, which is strong sign that buyers are in control. Key support is set at the price of 0.6850 Read next:After The Correction, Jacek Ma's Share In Shareholder Votes Will Fall To 6.2%| FXMAG.COM   Relevance up to 09:00 2023-01-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307818
BSP Maintains Rates Amid Moderate Inflation; Eyes Further Tightening if Needed

The Dollar Is Broadly Weaker, Inflation In The CEE Region Is Still A Problem

ING Economics ING Economics 09.01.2023 11:16
The dollar is broadly weaker after Friday's release of a sub-50 December ISM services reading added weight to the view that the US will enter a recession. At the same time, China's Covid pivot is sparking a re-assessment of activity currencies. We'll hear more from central bankers this week and the data highlight will be Thursday's December US CPI release USD: ISM services knocks stuffing out of the dollar The dollar starts the week under pressure and has seen some sizable losses over the last two trading sessions. Friday's price action proved instructive. The slightly lower-than-expected average hourly earnings data saw the dollar soften a little, but the sub-50 ISM services release really knocked the dollar hard. As our US economist, James Knightley, notes, ISM services readings under 50 are one of the most reliable indicators of a US economy headed into recession. This reading has not so much questioned whether the Fed will be taking rates close to 4.75/5.00% this spring, but rather added to the pricing of the subsequent Federal Reserve easing cycle. Growing convictions that the Fed will have to ease later this year come at a time when China is dismantling its zero-Covid architecture and policy measures - especially in the property sector - are reorienting towards growth. This combination is proving a very benign one for emerging currencies and commodity currencies in general. As usual, we think the FX markets will take their cue from the US yield curve, where Friday's bullish disinversion of the curve (as short-dated yields crumble) point to a more reflationary setting and a weaker dollar. Were US two-year Treasury yields to drop below the 4.10/20% area this week, we would expect another decent leg lower in the dollar. Whether those US short-end yields drop more this week will be determined largely by Thursday's US December CPI release. James Knightley is on consensus expecting core inflation at 0.3% month-on-month and 5.7% year-on-year. Downside surprises here were a big catalyst in the dollar reversing lower last year and this data point will remain one of the biggest FX triggers of the month. The week also sees Fed Chair Jerome Powell speaking at a Riksbank symposium on central bank independence. With concerns building around a US recession and price data easing, the tide seems to be turning against his hawkish rhetoric. In all, we suspect investors will be looking to add to positions in EM FX and the commodity complex this week. The Chinese renminbi is enjoying strong gains and Asia's high beta Korean won is flying. It seems very hard to fight this trend - especially in the second week of the year when money is being put to work. The recent DXY low at 103.45 looks vulnerable and 102.00 now looks to be the direction of travel as US recession fears build. Chris Turner EUR: Memories of 2007 EUR/USD has been participating in this dollar sell-off and the bias looks higher. Conditions here feel a little like the summer of 2007 when the slowdown in the US housing market saw the conviction build - especially from August 2007 onwards - that the Fed would have to ease. Having traded in a 4.50-5.00% range for the first half of 2007, US two-year yields crumbled to 2.70% by the end of 2007 and EUR/USD rallied around 10%. Of course, there are many differences between then and now, e.g. US sub-prime then, versus the US inflation battle now. But a surprisingly hawkish European Central Bank (both then and now) warns that EUR/USD could rally hard if the market is convinced the Fed will ease. Low gas prices and China reopening are also supportive for EUR/USD and we would say that, despite the bearish seasonals for EUR/USD, pressure is building for further near-term gains. With money probably flowing into emerging market funds now - and out of dollar deposits - we can see EUR/USD heading up to 1.0735/85, with outside risk to the 1.09 area should US price data soften again this week. Chris Turner GBP: BoE Chief Economist speaks at 1630CET Sterling has received some support from the better global risk environment. The highlight of today's session will be a 1630CET speech by Bank of England (BoE) Chief Economist, Huw Pill, with the title: 'The UK economic and Monetary Policy Outlook'. We have noted recently that the market has been locked onto expectations that the Bank rate will be taken to the 4.50% area (or +100bp from today's level) into the summer. This pricing has been resolute for several months. Recent job and wage data has yet to assuage the BoE's concerns over a tight UK labour market, thus we doubt Huw Pill will need to sound very dovish today.  With the dollar at risk of falling further, GBP/USD looks biased towards the 1.2350 area this week, while EUR/GBP should find support in the 0.8780 area. Chris Turner CEE: Inflation prints across the region We have a heavy calendar this week led by inflation numbers across the region. Today we start with Hungarian industrial production and foreign trade and in the Czech Republic, we will see the final estimate of 3Q GDP and labour market numbers. Tomorrow, the Romanian central bank is scheduled to meet, and we think it will raise interest rates for the last time to 7.00%, but give a 30% probability that rates will remain unchanged. December inflation in the Czech Republic will be released on Wednesday. We expect a further increase from 16.2% to 16.4%, slightly above market expectations. Then on Friday, we will see December inflation in Hungary and Romania. In Hungary, we expect a further rise from 22.5% to 25.9% YoY, also slightly above market expectations. In Romania, we think inflation has already peaked and expect a small decline from 16.8% to 16.6% YoY. The CEE markets experienced a massive rally in rates and bonds last week, but also in FX for most of the region. This week should show that inflation in the region is still a problem and this chapter is not over yet. Most interesting will be the Hungarian forint and another jump higher in inflation. Hungary is the only country in the region that has seen inflation surprise to the upside in each of the last three months. Thus, another surprise would likely push the forint back above 400 EUR/HUF. Overall, higher EUR/USD after Friday's US jobs report is good news for the region. On the other hand, the fall in market rates is again undermining domestic conditions for FX. As we mentioned earlier, the drivers of the previous rally have been exhausted in our view and we should see a quieter week in the FX market. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Despite The Improvement In The Outlook Due To Falling Energy Prices, The Economic Environment In Britain Remains Difficult

The Bank Of England's Committee Members C.L. Mann: "Restricting Energy Prices Is Forcing A Shift In Spending To The Rest Of The Consumer Basket"

Jakub Novak Jakub Novak 09.01.2023 11:25
More and more politicians have expressed their belief that UK inflation is slowing significantly this year. However, one of the Bank of England's committee members, Catherine L. Mann, said the recent introduction of a price ceiling could trigger inflation in other sectors by boosting consumer spending. Mann speach "By limiting energy prices, we have mechanically lowered the rate of inflation, which is irrelevant to future monetary policy decisions," Mann said during a panel discussion at the American Economic Association's annual conference. "Restricting energy prices is forcing a shift in spending to the rest of the consumer basket, thus causing potentially higher inflation," she added. Mann also spoke about global climate change, arguing that regulatory policies aimed at reducing emissions could change the economic environment over the coming decades. Bank of England  The Bank of England raised interest rates nine times since December 2021 in order to suppress inflation as quickly as possible. Although the bank now expects inflation to fall sharply this year, policymakers are divided on how long interest rates will rise further. Mann voted for a 75 basis point rate hike in December, while the rest of the group opted for a half-point increase. Two other officials opted to leave it at that. At the moment, investors are certain of another rate hike in February this year, but whether it will be by half a point or by a quarter is a big question. Minutes from the last meeting showed that most policymakers consider the labor market to be rather tight and inflationary pressures on domestic prices and wages remain stable. This would well justify further monetary policy tightening. Read next: After The Correction, Jacek Ma's Share In Shareholder Votes Will Fall To 6.2%| FXMAG.COM GBP/USD As far as the technical picture of GBP/USD is concerned, Friday's record rise of over 200 pips was quite impressive. Buyers need to break above 1.2160 to maintain their advantage, adn the breakdown of this range will strengthen the hope for further recovery towards 1.2220. After that, it will be possible to see a rise to 1.2260. But if pressure returns after the bears take control of 1.2100, the pair will rush down to 1.2040 and 1.1980. EUR/USD In EUR/USD, a break above 1.0700 will spur a rise to 1.0730 and 1.0770, while a dip below 1.0650 will increase the pressure on the pair and push it to 1.0610 and 1.0570. Relevance up to 08:00 2023-01-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331722
EUR/USD Trading Analysis and Tips: Navigating Signals and Volatility

Saxo Bank Podcast: The Wild Reaction To A Very Weak December ISM Services Survey And More

Saxo Bank Saxo Bank 09.01.2023 12:56
Summary:  Today we look at the mixed US jobs report on Friday and more importantly, the wild reaction to a very weak December ISM Services survey, while we question whether a single data point deserves such a strong reaction function. Regardless, the market took down US treasury yields and the US dollar in the wake of the data. Elsewhere, the market is scrambling to absorb the remarkable policy shift out of China, with metals, AUD and especially CNH firming further. A look at stocks to watch, perspective on the big US banks as they are the first to report for the upcoming earnings season on Friday. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next: Incorporating Slack And Other Apps Into The Salesforce Platform Can Actually Put Buyers Off| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Over-reacting to a single data point? | Saxo Group (home.saxo)
Gold Stocks Have Performed Very Well Under Pressure

Gold Has Been The Star Performer During The First Week Of Trading

Saxo Bank Saxo Bank 09.01.2023 13:09
Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to Tuesday, January 3. A week that saw bullish dollar bets being reduced while money managers added exposure to gold and grains while China's changed virus approach, recession risks and warm weather saw net selling of WTI, natural gas and copper Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities while in forex we use the broader measure called non-commercial. Link to latest report What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming   Financial Markets Daily Quick TakeSaxo Market Call Daily Podcast This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to last Tuesday, January 3. A week that given the timing saw limited activity across markets. Stocks were mixed, the dollar a tad stronger while bond yields softened after the IMF began the new year by warning a third of the world would be in a recession this year. This warning together with China’s messy and abrupt change from lockdowns to removing all restrictions helped send commodities sharply lower, led by energy while the metals, both precious and industrials received a boost.  Commodities The energy sector began 2023 on the defensive, thereby driving the Bloomberg Commodity Index to a 2.7% loss in the reporting week to January 3. Recession worries and mild winter weather reducing demand for natural gas and fuel products helped send the energy sector sharply lower. The abrupt change from the Chinese government on several key policies received a mixed reaction across industrial metals with a short-term challenging demand outlook being offset by the prospect for a recovery gathering pace in the coming months.    Hedge funds, responded to these developments by adding exposure to grains, especially soybeans and corn while reducing length in energy, especially WTI and natural gas. The metal space was mixed with gold length rising to a seven-month high while copper length was almost cut in half.      Energy: A challenging start to the new year being driven by China, recession and warm weather demand worries saw natural gas tank by more than 22% while crude oil traded softer by around 3%. The response to these price changes were a 23% increase in the natural gas short while crude oil was mixed with WTI seeing a 30k lots reduction to 165k driven by a combination of longs being reduced and especially fresh short selling. Brent crude oil meanwhile saw buying extend to a third week as funds continued to buy into price weakness, a sign that funds sees limited downside below $80 at this stage.  Market comment from today’s quick take: The first week of 2023 was tough for crude oil, driven by global growth concerns, a very mild winter across the Northern Hemisphere dampening demand, and a mixed outlook for China. Despite removing most virus-related restrictions, a surge in cases across the country has hit the short-term demand outlook while at the same time setting the economy on a path to recovery. Meanwhile, the IMF warned that a third of the global economy could be in recession in 2023. Supply side concerns are also seen with European sanctions on Russian oil having kicked in, while OPEC has reiterated that it is willing to step in with further production cuts. Short-term resistance being the 21-day moving at $75.65 in WTI and $81.15 in Brent. Metals: Demand for gold, which started to recover after the yellow metal made a triple bottom around $1620 back in November, extended into the new year with funds raising their net long by 8% to 7.8k lots, a seven-month high. Supported by momentum and the outlook for a friendlier 2023 for investment metals gold has been the star performer during the first week of trading. While many wise traders over the years have refrained from getting involved during the first few weeks of a new year, the continued rally has increasingly forced technical focused traders to get involved. Further upside momentum will need support from central banks purchases and renewed demand from long term investors through ETFs. Both of which are playing out after China’s PBoC added 62 tons during November and December while ETFs last week saw its first back to back week of buying since last April.    Copper jumped to a six-month high in Asia on Monday, driven by a general rebound in base metals as China looked to support an economic rebound. In addition, the under siege property sector has also received fresh support after the government showed signs of abandoning its “three red lines” policy that contributed to the downturn in recent years. Copper has advanced since November after lockdown protests led to an abrupt following months of fruitless lockdowns.  The change in direction set by the government has bolstered the outlook for demand beyond the first quarter thereby supporting the latest run higher. Friday’s break above the 200-day moving average towards key resistance in the $4 per pound area is likely to have been driven by hedge funds caught off guard by rapid changing outlook for China. In the week to January 3 they almost cut in half their High grade copper net long to 8.3k lots, in line with the five-year average but some 90% below the late 2020 peak. Agriculture: Funds bought grains for a second week with the combine net long across the six futures contracts tracked in this rising to 494k lots, an eight-week high. Despite the normally quiet time of year, funds nevertheless bought 83k lots of corn in the two weeks ending last Tuesday, the most in any two weeks since November 2021. Elsewhere the soybean net long jumped to 143k lots, the largest since June while the wheat short remained elevated despite seeing a 6% reduction. Softs were sold in response to price weakness across all four contracts, the exception being coffee, after funds reduced their net short.  Forex After accumulating the biggest dollar short since July 2021, short sellers started the year on the defensive as the dollar showed signs of early strength against most of the major currencies, expect for the Japanese yen. The result being a 43% reduction in the gross dollar short against nine IMM futures and the Dollar index. The main flows as per the table below were selling of EUR, GBP and JPY being partly offset       Source: COT: Gold and grains in demand | Saxo Group (home.saxo)
The USD/CAD Pair Has The Strong Downside Momentum

The Canadian Dollar (CAD) Surged On The Strong Employment Report

Kenny Fisher Kenny Fisher 09.01.2023 13:22
The Canadian dollar has extended its gains on Monday, after climbing close to 1% on Friday. In the European session, USD/CAD is trading at 1.3396, down 0.35%. Canada creates over 100K jobs The final employment report of 2022 was a winner. The Canadian economy surprised with a massive gain of 104,000 jobs, crushing the estimate of 8,000 and up from the November reading of 10,100. The unemployment rate ticked lower to 5.0%, below the estimate of 5.2% and the prior read of 5.1%. The Canadian dollar surged on the strong employment report as well as mixed US numbers, as the nonfarm payrolls was decent but wages and the Services PMI were soft. Canada’s superb job numbers could play a key factor in the Bank of Canada’s rate decision on January 25th as a 25-basis point increase appears more likely. The markets have priced in a 75% likelihood of a 25 bp move, up from 64% prior to the release. Three of Canada’s major banks are saying they are also expecting a 25-bp increase, which would bring the cash rate to 4.5%. There are two key events next week which could provide clues on what the BoC has planned at its next meeting – the BoC Business Outlook Survey and the December inflation report. BoC Governor Macklem has said that future rate hikes will be data-dependent and the central bank and investors will be closely watching the inflation release. In the US, nonfarm payrolls came in at 223,000, down from 256,000 but above the estimate of 203,000. This was a decent release, but investors focussed on the bad news. Average hourly earnings rose 4.6%, well off the 5.0% estimate and shy of the prior reading of 4.8%. As well, the ISM Services PMI fell into contraction territory for the first time since May 2020. The index slipped to 49.6, down sharply from 56.5 and the forecast of 55.5. A reading below the 50.0 threshold separates contraction from expansion.  The drop in wages and weak services data indicate that the US economy is slowing and is likely to tip into recession. This could force the Fed to ease up on its pace of rate hikes, and as a result, the US dollar was broadly lower on Friday. Read next: Incorporating Slack And Other Apps Into The Salesforce Platform Can Actually Put Buyers Off| FXMAG.COM USD/CAD Technical There is resistance at 1.3522 and 1.3609 1.3358 and 1.3271 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Analysis Of The EUR/JPY Pair Movement

Tokyo Core CPI Has Been Moving Steadily Higher And Is Expected To Continue This Trend

Kenny Fisher Kenny Fisher 09.01.2023 13:31
The Japanese yen is calm on Monday and is trading slightly higher, at 132.27. The yen ended the week on a strong note, posting gains of about 1% on Friday. USD/JPY has shown significant volatility since late December. Last week, the pair traded in a range of over 500 points, which included breaking below the 130 line for the first time since May. We could see stronger movement again today, as Japan releases Tokyo Core CPI and Household Spending later in the day. Tokyo Core CPI expected to rise to 3.8% Tokyo Core CPI has been moving steadily higher since January 2022, when it came it a negligible 0.2%. The December report rose to 3.6%, up from 3.4%, and the upward trend is expected to continue, with a forecast of 3.8% for January. After years of deflation, rising prices have become the new norm. The Bank of Japan has repeatedly stated that it will not change its ultra-loose policy due to higher inflation. Governor Kuroda said last month that he expects inflation to fall below the 2% target as the effect of soaring import costs will ease. The BOJ shocked the markets in December by widening the yield curve band, and there is speculation that Kuroda’s successor, who will take over in April, could raise the yield targets on long-term bonds, which would be a major policy change. High inflation has taken a bite out of Household Spending, which fell to 1.2% in October, down from 2.3% a month earlier. The downtrend is expected to continue, with a weak gain of 0.6% expected for November. The US dollar was lower across the board on Friday, after the US posted some soft data. Nonfarm payrolls was slightly better than expected at 223,000, but wage growth headed lower. Average hourly earnings rose 4.6%, well off the 5.0% estimate and shy of the prior reading of 4.8%. The ISM Services PMI underperformed, slipping to 49.6, down sharply from 56.5 and the forecast of 55.5. This marked the first time the PMI has fallen into contraction territory since May 2020, with a reading below the neutral 50.0 threshold. The drop in wages and the weak services data indicate that the US economy is slowing and is likely to tip into recession, which could force the Fed to reconsider its aggressive rate-tightening policy. Read next: Incorporating Slack And Other Apps Into The Salesforce Platform Can Actually Put Buyers Off| FXMAG.COM USD/JPY Technical There is weak support at 132.13, followed by 131.14 133.28 and 134.75 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The RBA Is Expected To Raise Rates By 25bp Next Week

The Aussie Pair Is Trading Above 0.69$, The Euro Above 1.07, The British Pound Also Benefits From A Weak Dollar

Kamila Szypuła Kamila Szypuła 09.01.2023 14:33
The US dollar on Monday approached a seven-month low against other major currencies after data suggested the Federal Reserve could slow the pace of rate hikes. The dollar suffered its biggest quarterly loss in 12 years in the last three months of 2022, driven mainly by investor confidence that the Fed would not raise interest rates above 5%. The probability of a 25 basis point Fed rate hike in early February rose above 70% after the release of this data, reflecting the return of dovish Fed betting. The US economic report will not contain any important macro data on Monday. Later in the day, Atlanta Federal Reserve Bank Chairman Raphael Bostic will give a speech, and he said on Friday that he expects the Fed to keep interest rates at peak levels until 2024. Friday's monthly employment report showed an increase in non-farm payrolls and a slowdown in wage growth. The US employment data hit the US dollar hard. USD/JPY The Japanese yen strengthened above 132 to the dollar, returning to its highest level in seven months. The yen is building on December gains amid mounting speculation that the Bank of Japan may soon move away from ultra-easy policy after it unexpectedly raised the upper end of its 10-year government bond tolerance band to 0.5% from 0.25% last month . However, BJ Governor Haruhiko Kuroda clarified that the move was not a sign of starting a massive stimulus exit, but was intended to improve the functionality of the bond market. AUD/USD The AUD/USD pair builds on Friday's strong rally and gains strong traction on the first day of the new week. This marks the second day in a row of positive movement. The Aussie pair broke through the 0.69 level in the Zajati session. China's hopes of reopening may have contributed to the strengthening of the commodity currency. The world's second largest economy has lifted quarantine requirements for visitors, taking another step towards reconnecting to the world in the post-Covid era. Over the weekend, China finally reopened its sea and land border crossings with Hong Kong, the last pillar of its zero-covid policy, after three years. On the monetary policy front, the currency remains supported by expectations that the Reserve Bank of Australia will raise interest rates further this year in an ongoing effort to bring down inflation. Otherhand, markets are currently split on whether the RBA will deliver another rate increase at its Feb. GBP/USD The British pound hit a two-and-a-half-week high on Monday against a fundamentally weak dollar. GBP/USD entered a consolidation phase and pulled back towards 1.2100 after hitting a two-week high at 1.2175 earlier in the day. The US dollar came under strong selling pressure before the weekend. Traders are fully pricing in a 25bps rate hike at the February BoE meeting with around a 65% chance of a larger 50bps hike. The money markets predict that the bank rate will peak at around 4.5% in the middle of this year. EUR/USD EUR/USD is on a strong gain for the second day in a row. After Friday's rally before the weekly close, EUR/USD rose to 1.0699 on Monday. The euro benefited from better market sentiment. Today the EUR/USD pair climbed towards 1.0700. Unemployment in the EU shows a downward trend and November's print jobs reached 6.5% . Lower gas prices are also contributing to optimism in the eurozone and a better economic outlook for the eurozone, but the main driver of the euro appears to be a sell-off of the dollar along with flows into risky assets. Source: investing.com, finance.yahoo.com, dailyfx.com
At The Close On The New York Stock Exchange Indices Closed Mixed

At The Close On The New York Stock Exchange Only The NASDAQ Composite Index Rose

InstaForex Analysis InstaForex Analysis 10.01.2023 08:04
On Thursday this week, investors will be waiting for the publication of data on consumer prices in the US. Analysts believe that annual inflation in the country slowed down to 6.5% in December from 7.1% per annum recorded in November. The statistics may give traders a hint as to what to do next with the US Federal Reserve, whose next two-day meeting will take place on January 31 and February 1. About 77% of analysts expect the regulator's discount rate to increase by 25 basis points to 4.5-4.75%. In addition, as early as this Friday, the largest US banks will report on their financial results for the previous year. At the close on the New York Stock Exchange, the Dow Jones fell 0.34%, the S&P 500 index fell 0.08%, the NASDAQ Composite index rose 0.63%.  Dow Jones The leading performer among the Dow Jones index components today was Salesforce Inc, which gained 6.59 points or 4.69% to close at 147.10. Quotes of Intel Corporation rose by 0.58 points (2.02%), closing trading at 29.31. Goldman Sachs Group Inc rose 4.92 points or 1.41% to close at 353.00. The least gainers were Merck & Company Inc, which shed 4.46 points or 3.88% to end the session at 110.38. Johnson & Johnson rose 2.59% or 4.67 points to close at 175.58 while The Travelers Companies Inc shed 2.45% or 4.75 points to close at 189.12. S&P 500 Leading gainers among the components of the S&P 500 in today's trading were Tesla Inc, which rose 5.93% to 119.77, Norwegian Cruise Line Holdings Ltd, which gained 5.90% to close at 13.81. as well as shares of NVIDIA Corporation, which rose 5.18% to close the session at 156.28. The least gainers were Baxter International Inc, which shed 7.74% to close at 44.70. Shares of Regeneron Pharmaceuticals Inc shed 7.69% to end the session at 680.49. Quotes of Northrop Grumman Corporation decreased in price by 4.99% to 495.41. NASDAQ  The leading gainers among the components of the NASDAQ Composite in today's trading were CinCor Pharma Inc, which rose 143.97% to 28.74, Amryt Pharma Holdings Ltd, which gained 107.29% to close at 14.51. as well as Albireo Pharma Inc, which rose 92.16% to end the session at 43.85. The least gainers were shares of Calithera Biosciences Inc, which shed 81.77% to close at 0.66. Shares of Peak Bio Inc shed 27.27% to end the session at 2.56. Quotes of Cerus Corporation decreased in price by 28.04% to 2.72. Numbers On the New York Stock Exchange, the number of securities that rose in price (1868) exceeded the number of those that closed in the red (1202), while quotes of 102 shares remained practically unchanged. On the NASDAQ stock exchange, 2192 companies rose in price, 1561 fell, and 172 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 3.98% to 21.97. Gold Gold futures for February delivery added 0.33%, or 6.10, to hit $1.00 a troy ounce. In other commodities, WTI crude futures for February delivery rose 1.42%, or 1.05, to $74.82 a barrel. Futures for Brent crude for March delivery rose 1.46%, or 1.15, to $79.72 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.82% to 1.07, while USD/JPY shed 0.19% to hit 131.82. Futures on the USD index fell 0.68% to 102.94. Relevance up to 03:00 2023-01-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/307907
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The EUR/USD Pair Has A Potential For Bearish Turn Against 1.0900

Oscar Ton Oscar Ton 10.01.2023 08:06
Technical outlook: EURUSD rose through fresh swing highs around 1.0750-60 on Monday before finding resistance. The entire zone between 1.0750 and 1.0800 is potential resistance as marked with the previous high close to 1.0800. The currency pair is most likely to change trends from the above zone in the near term. Aggressive traders might continue to hold short positions. EURUSD has hit both projected targets of the previous rally in September-October 2022 as marked in the red here. The single currency pair hit the Fibonacci 1.618 extension at 1.0758 and might reach 1.0800 briefly before turning lower again. The projected targets are towards 1.0400 and 1.0130-50 levels in the next few trading sessions. EURUSD is supported at 1.0520 as the bears prepare to take that out in the near term. A drag lower will confirm that a meaningful top is in place around 1.0750-60 and that prices are up for a pullback. Also, note that the Fibonacci 0.618 retracement of the entire rally between 0.9535 and 1.0750-60 is seen passing through the 1.0130 mark, which should be viewed as strong medium-term support. Trading idea: Potential bearish turn against 1.0900 Good luck! Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307915
The US Dollar Index Is Producing A Reasonable Bullish Divergence

The US Dollar Index Is Producing A Reasonable Bullish Divergence

Oscar Ton Oscar Ton 10.01.2023 08:10
Technical outlook: The US dollar index dropped through the 102.30 intraday lows on Monday before finding some bids coming. The index is seen to be trading close to 102.80 at this point in writing and is expected to continue higher as the bulls prepare to come back in control. Prices have hit a major Fibonacci target at 102.30 as seen on the 4H chart here. The price is looking higher from here. The US dollar index seems to have completed its drop from 114.70, hitting the Fibonacci 1.618 target at the 102.20-30 zone. The bulls can be expected to come back strong from current levels and continue higher in the next several weeks. Immediate price resistance is seen through 105.35 and a push-through will confirm that bulls are back in control. The US dollar index is also producing a reasonable bullish divergence on the 4H chart as seen here. This could be a potential sign of a trend reversal, which could produce a meaningful rally towards at least 109.00. Aggressive traders might want to hold long positions from current levels, targeting 105.35 in the next few trading sessions. Trading idea: Potential bullish move against 102.00 Good luck!   Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307921
The Downside For The AUD/USD Pair Is Likely To Remain Cushioned

The Aussie Pair (AUD/USD) Keeps Friday’s Upside Break

TeleTrade Comments TeleTrade Comments 10.01.2023 08:56
AUD/USD remains sidelined around four-month high, snaps two-day uptrend. Eight-week-long ascending trend channel, sustained breakout of 200-DMA favor bulls. Multiple Fibonacci retracement levels add to the downside filters. AUD/USD struggles to defend the 0.6900 round figure as bulls retreat after poking the highest levels since late May the previous day. Even so, the Aussie pair keeps Friday’s upside break of the 200-DMA inside a two-month-old bullish chart formation, namely ascending trend channel. Also keeping the AUD/USD buyers hopeful are the bullish MACD signals. That said, the quote’s latest pullback could aim for the 61.8% Fibonacci retracement level of its June-October 2022 downside, near 0.6860, before challenging the 200-DMA support of 0.6838. Should the AUD/USD prices drop back below the key moving average, a convergence of the 50% Fibonacci retracement level and lower line of the stated bullish channel could challenge the bears around 0.6730-25 before giving them control. Following that, a slump toward the 38.2% Fibonacci retracement near 0.6600 can’t be ruled out. Alternatively, the recent high near 0.6950 and the stated channel’s upper line, close to 0.6990 could challenge short-term AUD/USD buyers. It’s worth noting that the 0.7000 psychological magnet and late August 2022 swing high near 0.7010 act as additional resistances to test the pair’s upside momentum. In a case where the AUD/USD price remains firmer past the 0.7010 threshold, the August 2022 peak of 0.7136 should return to the charts. AUD/USD: Daily chart Trend: Bullish
The Canadian Dollar Is Likely To Remain On Tenterhooks

The Canadian Dollar Is Likely To Remain On Tenterhooks

TeleTrade Comments TeleTrade Comments 10.01.2023 09:03
USD/CAD is displaying back-and-forth moves, following the footprints of the US Dollar Index. Federal Reserve Powell’s speech has become critical after a decline in US economic activities and wage inflation. Bank of Canada Macklem’s speech could be hawkish after upbeat December employment data. USD/CAD may remain in the grip of bears on a broader note amid declining 20-and 50-EMAs. USD/CAD is struggling to extend its recovery move from 1.3350 above the immediate resistance of 1.3400 in the early European session. The Loonie asset is displaying a sideways auction as investors are awaiting speeches from Federal Reserve (Fed) chair Jerome Powell and Bank of Canada (BoC) Governor Tiff Macklem for fresh cues. The market mood has turned risk-averse amid selling interest in risk-perceived assets like S&P500 futures. The 500-stock basket futures have continued their late Monday sell-off mood in the Asian session. Also, a rebound in the 10-year U Treasury yields to near 3.54% has weighed on investors’ risk appetite. The US Dollar Index (DXY) is displaying a lackluster performance below the critical resistance of 103.00 as investors have preferred to remain quiet ahead of the speeches. Federal Reserve Powell’s speech hogs limelight The speech from Federal Reserve Powell, which is scheduled for Tuesday, carries significant traction. Investors expect that soaring recession fears led by a slowdown in Services and Manufacturing PMI in the United States and a constructive decline in December’s Average Hourly Earnings might impact the methodology yet designed by Fed Powell and his teammates to combat stubborn inflation. However, other Fed policymakers are still solid on their prior views. On Monday, San Francisco Fed Bank President Mary Daly dictated that December wage data was one month of data, which can't be declared as a victory. It's too soon to declare victory and stop further interest rate hikes. To tame stubborn inflation, it is reasonable for interest rates to be at 5%-5.25%. Also, Atlanta Fed bank president Raphael Bostic sees interest rate peak in at 5%-5.25%. He further added that the Federal Reserve will continue keeping higher interest rates active into CY2024. United States Inflation- a key trigger ahead This week, the show-stopper event will be the United States Consumer Price Index (CPI) data, which will release on Thursday. Considering a firmer drop in wage inflation and a decline in the extent of economic activities, the inflation rate is expected to continue its declining spree. According to Bloomberg, the Labour Department’s CPI is expected to show core inflation at 5.7% from the former release of 6.0%. In the opinion of Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank, the US Dollar could stay resilient even with a soft reading. “The majority of analysts polled by Bloomberg expect that consumer prices will not have risen in December. If that turns out to be correct, we could bet on everything being priced in, with the Dollar not coming under pressure. However, I am not so sure.” Bank of Canada Macklem’s speech to provide further assistance The Canadian Dollar is likely to remain on tenterhooks as Bank of Canada Governor Tiff Macklem will deliver a speech on Tuesday. After the release of stronger-than-expected Employment Change and a decline in the Unemployment Rate to 5.0% from the consensus of 5.2% last week, market participants believe that this might escalate wage discussions among firms and job seekers. Bank of Canada’s Macklem could deliver hawkish projections for interest rates as higher employment bills for firms will heat up inflation further. USD/CAD technical outlook After a breakdown of stretched consolidation formed in a range of 1.3482-1.3702 on a four-hour, USD/CAD has dropped dramatically to near 1.3350. The range expansion on the south side is expected to continue further as the overall market sentiment is still positive. Declining 20-and 50-period Exponential Moving Averages (EMAs) at 1.3450 and 1.3510 respectively, add to the downside filters. Also, the Relative Strength Index (RSI) (14) has shifted into the bearish range of the 20.00-40.00 range, which indicates that a bearish momentum has been activated. On the oil front, the oil price has extended its downside to near $74.50 despite analysts at Morgan Stanley having raised their forecast for China’s GDP to above 5.0%. A note from Morgan Stanley states that the removal of barriers to the housing/property sectors and recovery from COVID zero will strengthen China's economic recovery, which will solidify prospects starting from the second quarter of CY2023. It is worth noting that Canada is a leading exporter of oil to the United States and lower oil prices impact the Canadian Dollar.
Analysis Of The USD/CHF Pair Movements

Further Downside Of The USD/CHF Pair Is Expected

TeleTrade Comments TeleTrade Comments 10.01.2023 09:11
USD/CHF picks up bids to pare recent losses around the lowest levels since March 2022. Bearish MACD signals, failure to cross the support-turned-resistance signal further downside. 61.8% Fibonacci retracement level guards immediate upside, bears can aim for previous yearly bottom. USD/CHF traders lick their wounds around the 10-month low, picking up bids to 0.9210 amid early Tuesday morning in Europe. In doing so, the Swiss currency (CHF) pair might have taken clues from the downbeat RSI (14) to pare recent losses. However, the bearish MACD signals keep the sellers hopeful. Additionally favoring the bearish bias could be the quote’s previous failure to jump back beyond the support-turned-resistance line from January 2021, close to 0.9420 by the press time. It’s worth noting that the 61.8% Fibonacci retracement level of the pair’s upside from January 2021 to October 2022, around 0.9290, restricts immediate recovery moves of the USD/CHF pair ahead of the previous support line near 0.9420. Also acting as an upside filter is the August 2022 low of 0.9370 and 50% Fibonacci retracement near 0.9450. Should the USD/CHF bulls keep the reins past 0.9450, the odds of witnessing a reversal to the late 2022 downtrend can’t be ruled out. Meanwhile, the year 2022 low of 0.9090 appears immediate important support to watch during the USD/CHF pair’s further downside. Following that, the 78.6% Fibonacci retracement level of 0.9055 could lure the bears ahead of highlighting the 0.9000 psychological magnet. In a case where the USD/CHF pair remains weak past 0.9000, the mid-2021 low of 0.8926 and the year 2021 bottom surrounding 0.8755 will be in the spotlight. USD/CHF: Weekly chart Trend: Further downside expected
Analysis Of The EUR/JPY Pair Movement

FX Analyst at Commerzbank Expects The USD/JPY Pair To Quickly Fall Below 130

TeleTrade Comments TeleTrade Comments 10.01.2023 09:19
A glance at the Yen over the next few days might be interesting. Antje Praefcke, FX Analyst at Commerzbank, expects the USD/JPY pair to dive below the 130 level. How far does the BoJ go? “Next week's BoJ meeting will be exciting. After the surprise widening of the yield target in December, the big question is how far the BoJ will go. Perhaps next Wednesday we will get a first hint. Although it is likely to get really exciting starting in April, when the new Governor will take over, whose nomination is still pending.” “If there are already signs next week that the BoJ really is moving further away from its ultra-expansionary stance, I would expect USD/JPY to quickly fall below 130.”
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

In The Opinion Of UOB Group’s Economist The Rally In The NZD To Extend

TeleTrade Comments TeleTrade Comments 10.01.2023 09:23
In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, further upside is expected once NZD/USD leaves behind the 0.6410 level. Key Quotes 24-hour view: “While we expected ‘the rally in NZD to extend’ yesterday, we held the view that ‘the major resistance at 0.6410 is unlikely to come under threat’. However, NZD edged one pip above 0.6410 (high of 0.6411) before pulling back. Upward momentum is slowing and this coupled with still overbought conditions suggests NZD is likely to trade sideways. The expected range for today is 0.6330/0.6405.” Next 1-3 weeks: “We highlighted yesterday (09 Jan, spot at 0.6350) that the risk for NZD has shifted to the upside but it must clear 0.6410 before further gains are likely. NZD subsequently rose to a high of 0.6411. Our view remains unchanged, as there is no clear break of 0.6410. On the downside, a breach of 0.6285 (‘strong support’ level was at 0.6250 yesterday) would indicate that the upside risk has subsided.”
The Euro Will Probably Continue Its Upward Movement In The Near Future

The Euro To US Dollar (EUR/USD) Pair May Further Move Upside

Peter Jacimovic Peter Jacimovic 10.01.2023 09:47
Technical analysis: EUR/USD has been trading upside and I found breakout of the well defined trading range, which is good sign for the further rise. Trading recommendation: Due to the breakout of the defined trading range , I see potential for further upside movement towards main objective. Watch for the potential buying opportunities on the intraday dips with the upside objective at the price of 1.1150 MACD oscillator is showing fresh upside momentum, which is strong sign that buyers are in control. Key support is set at the price of 1.0720   Relevance up to 09:00 2023-01-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307953
Hang Seng Index Plummets -2% Amid Weak China Data, Short-Term Trend Intact

The EUR/GBP Pair Sticks To Its Modest Intraday Gains

TeleTrade Comments TeleTrade Comments 10.01.2023 09:57
EUR/GBP attracts fresh buying on Tuesday and recovers further from over a two-week low. Dovish BoE expectations weigh on the British Pound and remain supportive of the move. The recent hawkish ECB rhetoric underpins the Euro and supports prospects for further gains. The EUR/GBP cross regains positive traction following an early dip to sub-0.8800 levels and moves away from over a two-week low touched the previous day. The cross sticks to its modest intraday gains through the early European session and is currently placed near the top end of its daily range, around the 0.8825-0.8835 region. The British Pound's relative underperformance comes amid a bleak outlook for the UK economy, which has been fueling expectations that the Bank of England (BoE) is nearing the end of the current rate-hiking cycle. Apart from this, a modest pickup in the US Dollar demand is seen weighing on the Sterling and lending some support to the EUR/GBP cross. The shared currency, on the other hand, benefits from hawkish European Central Bank (ECB) rhetoric. In fact, ECB Governing Council member Francois Villeroy de Galhau said last Thursday that it would be desirable to reach the right terminal rate by next summer. Furthermore, ECB expects wage growth to be very strong over the next few quarters. In the absence of any major market-moving economic releases, either from the UK or the Eurozone, the aforementioned bullish fundamental backdrop supports prospects for additional gains. That said, any subsequent move up might continue to confront stiff resistance and is more likely to remain capped near the 0.8865-0.8875 heavy supply zone.  
Pound Slides as Market Reacts Dovishly to Wage Developments

Saxo Bank Podcast: The Major European Equity Markets, The Future Of Internet Search And More

Saxo Bank Saxo Bank 10.01.2023 11:17
Summary:  Today we note that the major European equity markets have come full circle since the Russian invasion of Ukraine last February, in part driven by a near freefall in natural gas prices over the last few weeks on mild weather. How much more can the market wring out of this development? We also note the reversal in the US equity market rally yesterday ahead of the important CPI data on Thursday. In equities, focus toward the end of the week on the major US banks reporting, but in the meantime, we have the important news for Google of a $10 billion investment in OpenAI as the future of internet search is heating up for the first time in many years. This and more on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Read next: The Weather-Driven Crash Showed The Southwest Airline's Bigger Problems| FXMAG.COM Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next:The Aussie Pair Is Trading Above 0.69$, The Euro Above 1.07, The British Pound Also Benefits From A Weak Dollar| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com   Source: Podcast: European equities have come full circle since Russian invasion | Saxo Group (home.saxo)
Warsaw Stock Exchange SA Approves Dividend Payout: Neutral Impact Expected

US Dollar Is Under Pressure, Russian Crude Shipments On Falling Trend

Swissquote Bank Swissquote Bank 10.01.2023 11:25
Good news is that Asian stocks entered bull market. Bad news is that the Federal Reserve (Fed) President Jerome Powell could hammer the post-NFP stock rally in US stocks. Sentiment is mixed and investors are tense before Powell’s speech, and Thursday’s US inflation data. S&P500 The S&P500 was unable to extend gains above the 3900, rapidly started erasing early-session gains and ended the session 0.08% lower. Nasdaq also gave back early-session gains, though closed the session 0.60% higher. US makret US equity futures are in the negative this morning, as the King of market disappointment, the Fed Chair Jerome Powell, will be speaking at an event in Stockholm today, and he will probably not pop the champagne just because the wages grew less than expected last month, especially when you think that the US economy added a near record 4.5 million jobs last year, and that the unemployment rate fell to 3.5%. Forex In the FX, the US dollar index remains under a decent selling pressure, as a result of the dovish Fed expectations since last Friday’s US jobs data. The EURUSD advanced to 1.0760 yesterday, Cable flirted with 1.22 this morning, and gold consolidates gains. Energy market In energy, crude oil remains under pressure despite the Chinese reopening talk, and the falling Russian supply. We see that the European sanctions weigh on Russian oil supply, as the 4-week average shipments decline despite a small gain posted last week. That means that the lower Russian supply will be another supportive factor of oil prices. Watch the full episode to find out more! 0:00 Intro 0:27 Asian stocks enter null market 1:25 Powell could shoot Fed doves down 5:18 Another big S&P500 is possible 7:11 US dollar under pressure 8:32 Russian crude shipments on falling trend 9:32 Copper futures rally, but risks prevail Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #Powell #speech #Fed #expectations #USD #EUR #GBP #XAU #earnings #season #Lululemon #banks #MSCI #AsiaPacific #bull #market #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The USD/CNH Pair Remains On The Bear’s Trend

The USD/CNH Pair May Return To 6.7000 In The Next Few Weeks

TeleTrade Comments TeleTrade Comments 10.01.2023 12:25
Further downside could drag USD/CNH back to the 6.7000 region in the next few weeks, comment UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang. Key Quotes 24-hour view: “Our view for USD yesterday was that it ‘could break 6.8000 but it might not be able to maintain a foothold below this level’. We indicated, ‘the next support is at 6.7700’. USD weakened more than we expected as it dropped to a low of 6.7665. While oversold, the decline in USD could test the major support at 6.7500 before the risk of a more sustained rebound increases. In other words, a sustained decline below 6.7500 is unlikely. Resistance is at 6.8000, followed by 6.8150.” Next 1-3 weeks: “Yesterday (09 Jan, spot at 6.8200), we indicated that USD is likely to weaken, albeit at a slower pace. We noted that support levels are at 6.7700 and 6.7500. USD subsequently dropped to a low of 6.7665. We continue to expect USD to weaken and if USD breaks below 6.7500, the focus will shift to 6.7000. Overall, only a break of 6.8500 (‘strong resistance’ level was at 6.8800 yesterday) would indicate that USD is not weakening further.”
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

The Bank Of Japan Says That Inflation Is Close To A Peak

Kenny Fisher Kenny Fisher 10.01.2023 12:29
The Japanese yen continues to have a quiet week. USD/JPY is showing little movement on Tuesday, trading at 131.84. Tokyo Core CPI hits 4.0% Tokyo Core CPI, a key inflation indicator, was higher than expected and in December hit 4.0% for the first time since 1982. This was up from 3.6% in November and above the forecast of 3.8%. Food and energy costs were the drivers behind the uptick, but higher prices were broad-based, casting doubt on the Bank of Japan’s argument that inflation is mainly due to import costs. The BoJ says that inflation is close to a peak, but inflation indicators such as Tokyo Core CPI don’t corroborate that view. The markets were caught flat-footed by the BoJ in December when it suddenly widened the yield curve control band, and wary investors are on the lookout for further policy changes, such as another widening of the band or eliminating its yield curve control target for long-term bonds. Higher inflation is putting pressure on the BoJ to respond, and the monthly policy meetings are no longer sleepy affairs that have no bearing on the markets. The BoJ meets again on January 18th and in addition to announcing policy will update its inflation forecasts. High inflation has taken its toll on consumers, and Household Spending declined in November for the first time since June, with a reading of -1.2%. This was down from 1.2% in October and missed the consensus of 0.6%. The government has introduced an economic stimulus package that includes subsidies for electric bills and is counting on the measures to push inflation lower. Still, the package isn’t expected to make an impact until February, which means inflation could continue to accelerate in January. Read next: According To Analysts, Russia May Collapse Within A Decade, Guaranty Trust Bank Has Fined| FXMAG.COM USD/JPY Technical There is weak resistance at 132.13, followed by 133.30 131.25 and 130.60 are the next support lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
British Prime Minister Rishi Sunak Sees No Chance Of Reducing Inflation, Despite Promises To Halve It

British Prime Minister Rishi Sunak Sees No Chance Of Reducing Inflation, Despite Promises To Halve It

Jakub Novak Jakub Novak 10.01.2023 14:10
UK Prime Minister Rishi Sunak said UK inflation is not certain to slow down this year so there is a need to continue influencing wages in order to limit their rise despite ongoing negotiations with striking sectors, including the National Health Service and the railways. Sunak has come under criticism Sunak has come under criticism over promises to halve inflation this year. This is despite the forecasts of the Budget Authority that the rate of price increase will slow down significantly as it is without any additional intervention from the government. Rising energy prices in the UK led to inflation exceeding 11% last year, causing a cost-of-living crisis. The Prime Minister and many other politicians have also changed for this reason. The new Prime Minister, Rishi Sunak, has decided to take seriously the issue of containing price rises, which is his top priority and the reason why he is resisting calls to adopt high public sector wage demands as this is sure to spur yet another rise in inflation. A growing political problem for the prime minister However, unrest is now taking place all over the country as citizens are pushing for a 19% pay rise. Another issue is that Sunak refused to answer the question of whether he has private medical care, saying it was of little consequence. This has become a growing political problem for the prime minister, who is under pressure from both members of his own Conservative Party and the general public. GBP/USD Talking about the forex market, yesterday's rise in GBP/USD is gradually slowing down, so buyers need to stay above 1.2140 in order to maintain their advantage. The breakdown of 1.2200 will push the pair to 1.2260 and 1.2301, while a drop below 1.2140 will bring it to 1.2090 and 1.2040. EUR/USD In EUR/USD, there is a chance to update the December highs, but this is only if the pair breaks above 1.0760. Such a move will push euro to 1.0790 and 1.0850, while a fall below 1.0720 will bring it to 1.0680 and 1.0650.     Relevance up to 09:00 2023-01-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331837
EUR/USD Pair Has Potential For The Downside Movement Today

The EUR/USD Pair Is Still Above 1.0700$, The USD/JPY Pair Was Little Changed

Kamila Szypuła Kamila Szypuła 10.01.2023 14:52
The US dollar improved slightly against its major trading partners early on Tuesday. The National Federation of Independent Business's monthly small business sentiment reading fell further in December as small businesses continue to struggle with high inflation that is dragging down profits. The economic outlook has deteriorated further this year. Markets are increasingly doubting whether the Fed will need to raise interest rates above 5% to cool down inflation as the effects of its aggressive rate hikes last year are already being felt in the economy. The focus for today will be Fed Chair Powell’s comments. USD/JPY So far, the Japanese yen has changed little against the dollar this week. USD/JPY was little changed on the news, but the Bank of Japan’s ability to maintain a loose monetary policy setting may come under closer scrutiny. USD/JPY is currently bullish and trading at 132.2600. In the earlier trading hours, the pair was even below 132. Japanese inflation appears to be accelerating after the headline Tokyo CPI hit a 40-year high at 4.0% year-on-year to the end of December. This was in line with forecasts, but core CPI was also 4.0% for the same period, above the 3.8% anticipated and 3.6% prior. EUR/USD EUR/USD has lost its traction and declined toward 1.0700 in the early American session on Tuesday. The EUR/USD was even above 1.0750 today. But the current level shows that the pair failed to break through the 1.0740 level, and the daily chart shows that the pair is barely down. It is possible that the EUR/USD pair will drop below 1.0700. While the US dollar remains under pressure from lower rate expectations, the Euro continues to be bolstered by the ECB’s insistence that rates will need to go higher to dampen ongoing price pressures. With the Fed coming to the end of its rate hike cycle, and with the ECB still in full flow, rate differentials between the two will continue to favor Euro strength. The EUR/USD pair as focus shifts to FOMC Chairman Powell's speech. GBP/USD The British pound traded above to $1.2, near a two-and-a-half-week high against the dollar, which hit Monday, The Cable Market is currently below that level, far from it. Trading is at the time of writing around 1.2120. The Bank of England's chief economist, Huw Pill, warned of the risk of continued inflationary pressures from a tight labor market, even if natural gas prices stabilize or fall. The UK central bank is likely to raise interest rates again to 4% next month. Meanwhile, markets are divided as to how much more interest rates will rise. On the data front, all eyes are on the monthly UK GDP figures. AUD/USD The Aussie pair stayed above 0.69 in the early hours of trading, but failed to maintain that level and found itself below it again. Currently, the Australian pair is trading around 0.6860. In addition, the market is also slightly favoring a quarter point hike from the Reserve Bank of Australia (RBA) to 3.35%. The probabilities may change data on monthly prices of consumer goods and services and retail sales for November, which will be published on Wednesday. After a surprise dip in October, inflation picked up again to an annualized 7.3%, while retail spending is expected to rise by a solid 0.7% thanks to major sales this month. Source: finance.yahoo.com, investing.com
The RBA Is Expected To Raise Rates By 25bp Next Week

The AUD/USD Price Can Go Above The Resistance Line

InstaForex Analysis InstaForex Analysis 11.01.2023 08:01
The Australian dollar was down 22 points on Tuesday, unfortunately, not clearly correlated with the commodity markets as we had hoped for in our last review of the currency pair in question. Copper was up 1.26% yesterday, while gas was down 6.9%. There was no qualitative price breakthrough above the resistance at 0.6917 (the high on August 1, 2022). Divergence with the oscillator has already formed (lilac line), but there is still a risk of its upgrade to a less steep slope (the blue dotted line). The limit of growth is the target level of 0.7048. This issue will probably be resolved tomorrow, with the release of the US inflation report. On the four-hour chart, the price has settled under 0.6917, but the price is still above the indicator lines and the Marlin oscillator is in the growth zone. The price can go above the resistance line without any noticeable difficulties. The first sign of the reversal is when the price crosses the MACD indicator line, going below the 0.6845 mark. Relevance up to 03:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331912
The Pound Is Now Openly Enjoying A Favorable Moment

Fundamental Speculative Reasons May Prevent The Pound From Going Down

InstaForex Analysis InstaForex Analysis 11.01.2023 08:04
Yesterday, the British pound tried to settle above the target level of 1.2155 (low of May 13 and close to the high on November 24), but the consolidation failed. The Marlin oscillator did not reach the zero line, still in the descending trend area. The probability increases, either a reversal, then an attempt to cross the support at 1.1933 along with the MACD line. Fundamental speculative reasons may prevent the pound from going down, the main one is the release of the December CPI in the US, which is expected tomorrow. And specifically to the technical situation under consideration, a false sharp movement to the upside can be obtained for this fundamental reason, since consolidation is short-term, trading volumes are high and warns about a possible repositioning of big players. The false rally can be expressed by the fact that the price may not reach the 1.2410 target level, it will soon return under 1.2155 and further below 1.1933. On the four-hour chart, the price is moving below 1.2155, but as long as the Marlin oscillator stays in the green zone, such growth to the level, except for the continuation of the sideways movement, does not say anything. The main sign of a reversal is when the price crosses the MACD line (1.2040) on this chart. Relevance up to 03:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331914
The Price Of EUR/USD Pair Will Develop Sideways Movement

Jerome Powell's Speech Was Neutral For The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 11.01.2023 08:06
On Tuesday, the euro traded around 20 pips and settled below the target range of 1.0758/87. This can update the divergence, and its possible form is shown by the dotted line on the daily chart. Federal Reserve Chairman Jerome Powell's speech on Tuesday was neutral, and now investors are waiting for Thursday's US inflation report. On the four-hour chart, the price is also consolidating under the lower limit of the target range, and due to the local sideways movement, the signal line of the Marlin oscillator decreases. As a consequence, there is a prospect of divergence, in which the price may go above the upper limit of the target range (1.0787 - the high on May 30).   Relevance up to 03:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331916
Analysis Of The AUD/USD Commodity Currency Pair's Price

Analysis Of The AUD/USD Commodity Currency Pair's Price

InstaForex Analysis InstaForex Analysis 11.01.2023 08:09
On the 4-hour chart of the AUD/USD currency pair, you can see the corrective movement of the upward rally of the commodity currency pair being stuck in the weekly Resistance area (Weekly Bearish Orderblock) 0.6951 coupled with the appearance of deviations between price movements and the Awesome Oscillator indicator, so there is a high probability of AUD/USD The USD will depreciate down to the level of 0.6630 but if on its way to the target level AUD/USD suddenly reverses upwards and penetrates above the 0.6951 level then the downside scenario described earlier will become invalid and cancel itself. Relevance up to 03:00 2023-01-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/117345
Growth Of The USD/JPY Pair Is Hampered By Resistance

The USD/JPY Pair Will Continue Its Rally Up

InstaForex Analysis InstaForex Analysis 11.01.2023 08:11
If we look at 4 hour chart USD/JPY main currency pairs looks like the following facts: 1. There is a deviation between price movements with Awesome Oscillator Indicator. 2. The form of Bullish 123 pattern. 3. The appearance of Wiseman. 1 (Bullish Divergent Bar). 4. The appearance of Wiseman. 2 (SAO). Based on the four facts above, in the coming days the main currency pair USD/JPY has the potential to appreciate, rally upwards to test the 134.77 level. If it is successfully penetrated, USD/JPY will continue its rally up to the 136.19 level and if momentum and volatility are supportive then USD/JPY will continue its rally up to the level of the 138.03-140.03 area but if on its way to the targets of this area suddenly USD/JPY reverses back to its initial bias (Bearish) to break below the 129.51 level then all the scenarios previously described will become invalid and cancel by itself.   Relevance up to 03:00 2023-01-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/117341
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Euro May Not Have Any Specific Growth Drivers Now

Paolo Greco Paolo Greco 11.01.2023 08:16
On Tuesday, the EUR/USD currency pair attempted to begin a downward correction, but it was unsuccessful. Therefore, no new inferences can be made in light of the outcomes from Tuesday. When we look at technical or fundamental issues, it becomes quite difficult to explain why the European currency is expanding once again. Remember that, in theory, any movement of any instrument on the foreign exchange market can be explained with relative ease. Another query is whether each movement should merely be explained after the fact rather than being predicted. Sadly, it is not always feasible to forecast a movement, if only because there are so many players in any market, even major ones, and they are not always motivated by the desire to benefit from a currency transaction. The euro currency may not have any specific growth drivers now, but if demand for it increases, it may still increase. Additionally, the requirement for large firms and banks to perform business activities may increase demand. In this instance, the situation looks like this: macroeconomics and the foundation at least claim that the expansion of the euro currency is unreasonable, but it is still increasing. We have been observing this exact image for a month. From the perspective of macroeconomics and the "foundation," yesterday was essentially empty. Only Jerome Powell's speech was scheduled, but new language or theses from the president of the Fed are necessary for a response to such an event to occur. What is there to react to if Mr. Powell simply reiterates what traders have known for a long time? The Fed's monetary policy intentions are now public knowledge and include no secrets, so it makes no sense to expect a language change. Recent articles on macroeconomics cannot be characterized as resonant; rather, they were framed by expectations and forecasts. We continue to think that nonfarm payrolls and unemployment should have caused the dollar to appreciate rather than sink, and this week may mark the sixth week of falling inflation. Powell, therefore, has no incentive to alter his rhetoric at this time. The QT program is still in use. Recently, everyone has forgotten that the Federal Reserve uses additional measures to combat excessive inflation in addition to raising the key rate. Since around six months ago, the QT program, which is a reduction in the Fed's balance sheet, has been in effect. In other words, the regulator removes additional money from the economy, which contributed to previously high inflation, by selling government and mortgage bonds that it had actively purchased as part of the QE program. As a result, the decrease in inflation is not just a result of the key rate rising. The Federal Reserve's balance sheet was around $8.5 trillion as of December, having decreased by $350 billion. Using the M1 money supply indicator, we can see that it is currently 19.9 trillion dollars and has dropped by roughly 1 trillion over the past six months. As you can see, this method is likewise quite effective, although the M1 money supply was 4.8 trillion dollars before the epidemic. It has thus multiplied four times. There shouldn't be any more doubts about why inflation has risen at this point. Consequently, the first conclusion is that the QT program should be in place for a very long time because rates are high but the Fed won't keep them that way indefinitely. For a new acceleration of the economy, which can result in a new acceleration of the consumer price index, the rate of inflation must be lowered when it returns to 2%. Therefore, the Fed will attempt to maintain this value only with the aid of the QT program after inflation recovers to 2%. This is a favorable development for the dollar, but the ECB has also begun to cut its balance sheet at this time, and the market isn't exactly keen to purchase US dollars. Therefore, in the near future, a greater emphasis should be placed on technical analysis, but keep in mind that there aren't many fundamental grounds for the euro to increase in value. The Murray level of "8/8" can temporarily halt the expansion of the euro, but for it to decline, there must at least be consolidation below the moving average. As of January 11, the euro/dollar currency pair's five most recent trading days had an average volatility of 110 points, which is considered "high." So, on Wednesday, we anticipate the pair to fluctuate between 1.0626 and 1.0846. A bout of corrective movement will begin when the Heiken Ashi indicator reverses to the downside. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trading Suggestions: The EUR/USD pair is attempting to maintain its ascent. You can continue to hold long positions at this time with a target price of 1.0864 until the Heiken Ashi signal turns down. After fixing the price below the moving average and setting a target price of 1.0498, you may start opening short positions. Explanations for the illustrations: Channels for linear regression allow us to identify the present trend. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones Relevance up to 05:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331920
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The British Pound (GBP) Is Still Declining

Paolo Greco Paolo Greco 11.01.2023 08:23
Although the GBP/USD currency pair started to fluctuate on Tuesday, it is now above the moving average line. As a result, the increasing tendency is still present at this time. We have emphasized numerous times that we are anticipating the devaluation of the pound and the euro. Since there has been a noticeable decline in recent weeks, if the pound sterling exceeds our expectations by at least 50% to 60%, the euro does not at all justify them. But the pound sterling is the subject of this article. Therefore, no significant macroeconomic data were released on Monday or Tuesday. It's perhaps even a good thing that there are no publications these days, especially in light of how the market reacted to numbers from abroad on Friday. We think that relatively positive statistics on the labor market and unemployment have caused an irrational decline in the value of the dollar. But that is the past. The pound is still declining, therefore, expect a new consolidation below the moving average line. In the UK, you may only reserve Friday this week. Reports on the GDP and industrial production will be made public on this day. Since there isn't much logic in the current price swings and market participants are more interested in data from the USA than the UK, we won't lie: we don't anticipate a major response from traders to this data. To put it another way, everything in Britain is consistently bad. The pound sterling has lost 1.5 times its value since British citizens narrowly decided that leaving the EU was a good idea. The country is still experiencing political unrest, and the Conservative Party, led by Boris Johnson and Liz Truss, may already lose its majority in Parliament at the next elections. And Rishi Sunak, who was brought in as the economy's savior, has thus far made decisions that could force him into early retirement. Although Mr. Sunak has not yet drawn direct criticism, he simultaneously increased taxes, which has already sparked a protest among medical professionals. The UK is once again experiencing the coronavirus. A medical staff uprising during a recent "coronavirus" outbreak. If you recall, we said a few weeks ago that, as long as the COVID outbreak in China remains limited to China alone, it won't have a particularly negative impact on the world economy. But despite unofficial reports that the cost of treating people who contracted the "coronavirus" illness was already in the hundreds of millions, we were honestly shocked that hardly any nation in the world had cut off communication with China. The outcome was very apparent and unmistakable: cases of a new strain of Omicron have already been reported in 29 different nations, and on certain flights leaving China, nearly half of the passengers were sick. It is not unexpected that the number of cases of the disease is increasing globally. On this particular occasion, an emergency meeting in the UK with Rishi Sunak as the chairperson was planned. The British medical system experiences an increase in flu and other seasonal viral infections every winter due to the country's relatively chilly climate. They now include the "coronavirus," a disease that spreads rapidly among people. As a result, there are too many patients for ambulances to transport, and many people have to wait for hours or even days for doctors to arrive. In addition, medical professionals decided to strike at the same time due to the lack of pay rises and the rapidly declining value of the pound as a result of high inflation and tax increases. Of course, nurses are exempt from the tax hike because they are unlikely to make 125 thousand pounds a year, but generally speaking, the financial situation of many medical professionals is getting worse, and their care is crucial to the country's health. According to the administration, salary increases are impossible because they can lead to further increases in inflation, which still hasn't subsided despite eight increases in the key rate and consequently slows down economic growth. The British economy, meanwhile, has entered a recession that might last for at least two years. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 162 points. This figure is "high" for the dollar/pound exchange rate. As a result, on Wednesday, January 11, we anticipate movement that is constrained by the levels of 1.1992 and 1.2316. A potential continuation of the upward rise will be indicated by the Heiken Ashi indication turning back to the top. Nearest levels of support S1 – 1.2146 S2 – 1.2085 S3 – 1.2024 Nearest levels of resistance R1 – 1.2207 R2 – 1.2268 R3 – 1.2329 Trading Suggestions: On a 4-hour timeframe, the GBP/USD pair is attempting to begin a new upward trend. Therefore, in the event of an upward reversal of the Heiken Ashi indicator, we can currently contemplate new long positions with goals of 1.2268 and 1.2351. If the price is firmly locked below the moving average, you can start short positions with 1.1992 and 1.1902 as your targets. Explanations for the illustrations: Channels for linear regression allow us to identify the present trend. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.     search   g_translate     Relevance up to 05:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331922
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The EUR/USD Pair Is Likely To Continue Higher

Torben Melsted Torben Melsted 11.01.2023 08:25
EUR/USD is likely to continue higher towards our target seen at 1.0933 to complete wave 5/ and 3. After a temporary correction in wave 4, renewed upside progress to above 1.0933 should be expected. Short-term we see support near 1.0695 and 1.0577. The latter should act as a floor for the expected rally towards our ideal target near 1.0933. That said, we should also respect the fact that the best part of the rally in wave 3 now is behind us and we only need the final push higher to 1.0933 to complete wave 3 and set the stage for a correction in wave 4.   Relevance up to 06:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308116
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The EUR/USD Pair Is Staying Near Its Local Highs

Paolo Greco Paolo Greco 11.01.2023 08:31
M5 chart of EUR/USD On Tuesday, EUR/USD froze in place. The price moved sideways all day, staying near its local highs. The pair last grew on Friday, when crucial data on the labor market, unemployment and business activity was released in the US. The market, as it has been doing lately, treated this data one-sidedly, just ignoring any positive information for the dollar. And when the upward momentum dried up, once again it could not even start a correction. There was only one event yesterday - the speech of Federal Reserve Chairman Jerome Powell, but he did not touch the monetary policy issues in Stockholm, so traders did not get any new information. There were three trading signals during the day. The price rebounded from 1.0748 every time. And this scenario can be considered just fine, because everything could have been much worse in flat conditions. All the three signals turned out to be false, since the price failed to reach the nearest target level or line. Nevertheless, the pair was going down by 15 points, so a Stop Loss should have been set at breakeven on all open trades. Besides, there was no buy signal. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 29,300, whereas the number of short positions fell by 13,100. Thus, the net positions decreased by 16,200. The number of long positions is 130,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 44,000 (671,000 vs. 627,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD has once again settled above the lines of the Ichimoku indicator. Theoretically, it may mean the beginning of a "swing" movement on the higher chart, but on the lower chart it looks like an attempt to resume the upward movement, despite the absence of the appropriate fundamental and macroeconomic background. For the time being we are getting set on going long, but there's also a high probability of a decline. On Wednesday, the pair may trade at the following levels: 1.0269, 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, 1.0938, 1.1036 and also Senkou Span B (1.0616) and Kijun Sen (1.0622). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 11, there are no important events or reports planned in the US and the EU, so the flat may persist. Nevertheless, traditionally we expect the euro to fall. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group Relevance up to 05:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331924
The Market May Continue To Buy The Pound (GBP) This Week

The Cable Market (GBP/USD) Does Not Find Grounds For The Continuation Of Growth

Paolo Greco Paolo Greco 11.01.2023 08:34
M5 chart of GBP/USD GBP/USD started a weak correction on Tuesday after two days of growth, but the most it could achieve was a descent to the extremum level of 1.2106. Yesterday was a blank day in terms of macro data and fundamental events. Federal Reserve Chairman Jerome Powell's speech was devoted to climate issues, and not a single word was said about monetary policy. Naturally, forex traders are not too interested in climate change issues. During the day, the pair showed some interesting moves, but on the whole it traded sideways. I expect GBP to fall because it has corrected enough to resume its decline now. Also, I believe that the market's reaction last Friday was totally illogical, so now it should be offset. Speaking of trading signals, the picture was almost perfect, despite the flat. First, the pair bounced with a slight error of 1 pip from 1.2185. At that point traders could open short positions. Then it went down to 1.2106, from which it also bounced with minimum error. At this point it was possible to close the shorts and open the longs. By the end of the day the pair almost returned to 1.2185, but it did not work out, so longs had to be closed manually. Profit was 45 pips on the first deal, and it was about 30 pips on the second deal. Thus, it was possible to earn good profit in a flat. COT report The latest COT report showed an increase in bearish sentiment. During the given period, non-commercial traders opened 3,000 long positions and as many as 12,400 short positions. Thus, the net position fell by about 9,400. This figure has been on the rise for several months, and the sentiment may become bullish in the near future,but it hasn't yet. Although the pound has grown against the dollar for the last few months, from a fundamental perspective, it is still difficult to answer why it keeps rising. On the other hand, it could fall in the near future (in the mid-term prospect) because it still needs a correction. In general, in recent months the COT reports correspond to the pound's movements so there shouldn't be any questions. Since the net position is not even bullish yet, traders may continue to buy the pair over the next few months. Non-commercial traders now hold 43,600,000 long positions and 63,900 short ones. I remain skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD has risen sharply, but so far does not find grounds for the continuation of growth. And that's simply because there are none. I assume that traders may start to buy the euro and pound again without any reason, but if we pay attention to the fundamentals and macroeconomics, the British currency should fall, not grow. Also, we are also considering the possibility that a "swing" could start, which we expected a bit later. On January 11, the pair may trade at the following levels: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259, 1.2342, 1.2429-1.2458. The Senkou Span B (1.2012) and Kijun Sen (1.2023) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Wednesday, there are no important events in the UK and the US, so there will be nothing for traders to react to during the day. Consequently, flat may persist and volatility may be low. If the "swing" has started, the pair may continue to move with the 1.1874 target for no reason. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 05:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331926
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

The EUR/USD Pair Is Facing Immediate Resistance Level

Oscar Ton Oscar Ton 11.01.2023 08:38
Technical outlook: EURUSD is pushing through 1.0750 again as the Asian session is progressing on Wednesday. The single currency pair is seen to be trading close to 1.0750 at this point in writing, after registering an intraday high around 1.0755. Please note that the 1.0750-1.0800 zone remains strong resistance as marked on the daily chart. We expect a bearish reaction here. EURUSD has been traded sideways in the past two trading sessions between 1.0710 and 1.0750 levels, which is clear on the hourly chart. The current push higher could be seen as the final thrust before the bears could be back in control. The corrective drop is expected to drag prices lower at least to 1.0350-60, which is a potential support and the Fibonacci 0.382 retracement of the rally between 0.9535 and 1.0760. EURUSD is facing immediate resistance close to 1.0800, while support is seen at 1.0481 on the daily chart. A break below 1.0481 will confirm that the bears are back in control and a meaningful top is in place. Also, note that potential remains for a drag through 1.0130, which is the Fibonacci 0.618 retracement of the above rally. Trendline support from the 0.9535 low is further viewed around 1.0130 as a potential bullish turn. Trading idea: The potential bearish move against 1.0900 Good luck!   Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308126
The USD/CHF Pair Is All Set To Revisit The Monthly Low

The USD/CHF Pair Is All Set To Revisit The Monthly Low

TeleTrade Comments TeleTrade Comments 11.01.2023 09:24
USD/CHF takes offers to refresh intraday bottom, fades bounce off nine-month low. Downside break of weekly support line, bear cross underpin downside bias. Recovery moves remain elusive unless crossing 0.9275 hurdle. USD/CHF breaks an upward-sloping trend line to welcome bears after the previous day’s brief absence. That said, the Swiss Franc (CHF) pair renews its intraday low around 0.9210 during the early hours of Wednesday morning in Europe. In addition to the downside break of the two-day-old support line, USD/CHF also cheers bear cross of the key moving averages on the hourly format. The bearish moving average crossover could be witnessed as the 100-Hour Moving Average (HMA) slips beneath the 200-HMA. It's worth noting that an absence of oversold RSI also signals a smooth road to the south for the pair sellers. As a result, the USD/CHF pair is all set to revisit the monthly low surrounding 0.9165, which is also the lowest level since March 2022. In a case where the bears keep reins past 0.9165, the 0.9100 round figure and the previous yearly low around 0.9090 will gain the market’s attention. Read next: The EUR/USD Pair Is Still Above 1.0700$, The USD/JPY Pair Was Little Changed| FXMAG.COM On the contrary, the support-turned-resistance line stretched from Monday, around 0.9230 by the press time, guards immediate recovery of the USD/CHF pair. Following that, a three-day-old trend line resistance near 0.9255 could test the pair buyers. However, the USD/CHF bulls may remain cautious unless witnessing a clear upside break of the key HMA convergence surrounding 0.9275. USD/CHF: Hourly chart Trend: Further downside expected  
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The GBP/JPY Cross Is Likely To Display Volatile Moves

TeleTrade Comments TeleTrade Comments 11.01.2023 09:28
GBP/JPY is failing to surpass the immediate resistance of 161.00 as BOJ is discussing an exit from its ultra-loose policy. Japanese administration and the BOJ will review their decade-long loose policy under novel BOJ leadership. The Pound Sterling may display significant action after the release of UK’s economic activities data. The GBP/JPY pair has sensed selling pressure after multiple failed attempts of surpassing the critical resistance of 161.00 from the past two trading sessions. The cross is likely to display volatile moves amid chatters over the review of decade-long easy policy under the new Bank of Japan (BoJ) leadership ahead. Discussions over a review of prolonged ultra-loose monetary policy by the BoJ are getting heated now.  Earlier, Japanese Prime Minister Fumio Kishida said that the administration and the BoJ must discuss their relationship in guiding economic policy after he names a new Bank of Japan (BOJ) governor in April. He further added that the administration is looking to revise its long-decade blueprint of beating deflation and may look for an exit from ultra-loose monetary policy. And, now former BoJ board member Sayuri Shirai said on Wednesday “Review of last 10 years can be conducted under new BoJ leadership, but difficult to envisage a major change in the policy framework.” It seems that the Japanese economy has considered high inflation environment a better way to combat the Japanese yen's weakness as other economies are constantly shrinking the supply of their respective currencies. Read next: According To Analysts, Russia May Collapse Within A Decade, Guaranty Trust Bank Has Fined| FXMAG.COM On the United Kingdom front, investors are awaiting the release of the data belonging to economic activities comprising Gross Domestic Product (GDP) figures, Industrial Production, and Manufacturing Production data, which are scheduled for Friday. Meanwhile, the Bank of England (BOE) has cornered poor execution from Prudential Regulation Authority for their faulty risk-management systems as banks faced high exposure due to sheer market volatility in CY2022. Events like the collapse of Archegos Capital demonstrated firms’ large and concentrated exposure to single counterparties, as reported by Financial Times.  
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

WTI Crude Oil’s Weakness Challenges The Loonie Pair (USD/CAD)

TeleTrade Comments TeleTrade Comments 11.01.2023 09:17
USD/CAD takes offers to pare intraday gains around 1.3420 during early Wednesday morning in Europe. In doing so, the Loonie pair fails to trace options market signals as it consolidates the previous day’s recovery moves from a six-week low. One-month risk reversal (RR) of the USD/CAD pair, a ratio of call options versus put options, also known as the bullish bets and the bearish bets in that order, printed the first positive figures in three days at the latest, to +0.019. It’s worth noting that the weekly RR printed the biggest positive figures since late September in the last, with a +0.118 level. That said, the current week’s risk reversal appears -0.136 at the latest. Read next: According To Analysts, Russia May Collapse Within A Decade, Guaranty Trust Bank Has Fined| FXMAG.COM Moving on, the downbeat US Treasury yields and expectations of softer US inflation data may keep the USD/CAD bears hopeful. However, WTI crude oil’s weakness challenges the Loonie pair’s further downside. Also read: USD/CAD stays mildly bid above 1.3400 as Oil price drops amid recession woes  
The AUD/USD Pair’s Downside Remains Off The Table

UOB Group Experts Expect The Aussie Pair To Trade Between 0.6870 And 0.6950

TeleTrade Comments TeleTrade Comments 11.01.2023 09:37
A move above 0.6950 should allow AUD/USD to have another chance to revisit the 0.7000 mark in the near term, suggest Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group. Read next: The EUR/USD Pair Is Still Above 1.0700$, The USD/JPY Pair Was Little Changed| FXMAG.COM Key Quotes 24-hour view: “Yesterday, we highlighted that AUD ‘is unlikely to advance much further’ and we expected it to ‘trade between 0.6870 and 0.6950’. While AUD did not advance further, it traded within a range of 0.6860/0.6930. The price actions are likely part of a consolidation phase and AUD is likely to trade between 0.6855 and 0.6925 today.” Next 1-3 weeks: “Yesterday (10 Jan, spot at 0.6910), we indicated that while momentum continues to point to a higher AUD, it must break and stay above 0.6950 before a move to 0.7000 is likely. We continue to hold the same view. Overall, only a breach of 0.6825 (no change in ‘strong support’ level from yesterday) would indicate the current upward pressure has eased.”
The USD/JPY Price Reversed From The Lower Limit

The USD/JPY Pair Is Expected To Break Above The Resistance Level Of 138.14/18

TeleTrade Comments TeleTrade Comments 11.01.2023 09:43
USD/JPY’s weakness has slowed a little following the aggressive sell-off in Q4. Economists at Credit Suisse expect the pair to eventually find a floor at key support at 127.53/27. Resistance at 138.14/18 is expected to cap “Whilst a near-term consolidation phase should be allowed for, resistance at 138.14/18 is expected to cap and strength, if seen, will be seen as temporary and our broader outlook stays negative for further weakness in Q1 back to 129.62, then our core target of the ‘neckline’ to the multi-year base and 50% retracement of the 2020/2022 uptrend at 127.47/27. We would then look for a potentially major floor here.” “Should weakness directly extend below 127.27/126.36 we would see support next at the 61.8% retracement at 121.44.” Read next: According To Analysts, Russia May Collapse Within A Decade, Guaranty Trust Bank Has Fined| FXMAG.COM
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

Analysis Of Situation Of The NZD/USD Pair

TeleTrade Comments TeleTrade Comments 11.01.2023 10:01
NZD/USD edges higher on Thursday amid renewed USD selling bias, albeit lacks follow-through. Bets for less aggressive Fed rate hikes keep the US bond yields depressed and weigh on the USD. A positive risk tone further undermines the safe-haven buck and benefits the risk-sensitive Kiwi. Traders, however, seem reluctant to place aggressive bets ahead of the US CPI print on Thursday. The NZD/USD pair reverses an intraday dip to the 0.6340 area and trades with a mildly positive tone during the early European session. The pair is currently placed around the 0.6370-0.6375 region and remains well within the striking distance of a nearly three-week high touched on Monday. The intraday uptick is sponsored by the emergence of fresh selling around the US Dollar, weighed down by firming expectations that the Fed will soften its hawkish stance. The bets were reaffirmed by last week's data, which showed that the US wage growth in December and pointed to signs of easing inflationary pressures. Furthermore, business activity in the US services sector contracted and hit the worst level since 2009 in December. This, in turn, fuels speculations for a less aggressive policy tightening by the Fed, which keeps the US Treasury bond yields depressed near a multi-week low and is seen as a key factor undermining the buck. Apart from this, a generally positive tone around the equity markets dents the greenback's relative safe-haven status and benefits the risk-sensitive Kiwi. The NZD/USD pair, however, lacks bullish conviction as traders seem reluctant to place aggressive bets ahead of the US consumer inflation data, due for release on Thursday. Read next: According To Analysts, Russia May Collapse Within A Decade, Guaranty Trust Bank Has Fined| FXMAG.COM The crucial US CPI report should provide further clarity on whether the Fed will have to increase its target rate beyond 5% to curb stubbornly high inflation. This, in turn, will play a key role in influencing the near-term USD price dynamics and help determine the next leg of a directional move for the NZD/USD pair. In the meantime, the US bond yields could drive the USD demand and provide some impetus to the NZD/USD pair in the absence of any relevant market-moving economic releases from the US. Apart from this, traders will take cues from the broader market risk sentiment to grab short-term opportunities around the major.  
The GBP/USD Pair Started A New Round Of Downward Correction

Analysis Of The GBP/USD Pair And Trading Trip

Jakub Novak Jakub Novak 11.01.2023 10:15
Analysis of transactions in the GBP / USD pair Target levels were not reached on Tuesday because volatility was low. It was also why no entry points appeared in the market for the whole day. Once again, there are no statistics scheduled to be released in the UK today, so the upward trend may be limited in the morning. Then, in the afternoon, there is only the US crude oil inventory and 10-year Treasury yields reports, which will have no impact on the forex market in the short term. Traders better bet on positions within the horizontal channel. For long positions: Buy pound when the quote reaches 1.2185 (green line on the chart) and take profit at the price of 1.2267 (thicker green line on the chart). Growth will occur unless there are no good statistics from the UK. Also, take note that when buying, the MACD line should be above zero or is starting to rise from it. Pound can also be bought at 1.2137, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.2185 and 1.2267. Read next: The EUR/USD Pair Is Still Above 1.0700$, The USD/JPY Pair Was Little Changed| FXMAG.COM For short positions: Sell pound when the quote reaches 1.2137 (red line on the chart) and take profit at the price of 1.2060. Pressure may return ahead of Thursday's US inflation data. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.2185, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.2137 and 1.2060. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader   Relevance up to 08:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331948
The US PCE Data Is Expected To Confirm Another Modest Slowdown

Saxo Bank Podcast: The Conflicting Signals From Expanding US Credit, Apple's Deepening Vertical Integration Moves, Strong Metals Markets And More

Saxo Bank Saxo Bank 11.01.2023 10:22
Summary:  Today we discuss the bounce-back in US equity markets as we are all supposedly holding our breath for a CPI release tomorrow when the last soft CPI release in December drove zany intraday volatility and a rally that was quickly erased - etching out a market top at the time. Elsewhere, we discuss the conflicting signals from expanding US credit while another sentiment survey disappoints, look at strong metals markets as a clear expression of hopes for a China-driven recovery, Apple's deepening vertical integration moves as it looks to ditch Samsung screens, and much more. Today's podcast features Peter Garnry on equities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next:The EUR/USD Pair Is Still Above 1.0700$, The USD/JPY Pair Was Little Changed| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Metals are sending loud signals as US equities in limbo | Saxo Group (home.saxo)
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

Fed Chairman Jerome Powell Appealed To Lawmakers To Use Their Regulatory Powers To Address Climate Change

InstaForex Analysis InstaForex Analysis 11.01.2023 12:03
Fed Chairman Jerome Powell asked politicians to avoid interfering with the central bank, stressing it should be free from any influence as long as it struggles with persistently high inflation. Price stability is the backbone of a healthy economy He explained that stabilizing prices requires tough decisions that can be politically unpopular. "Price stability is the backbone of a healthy economy and, over time, brings immeasurable benefits to the population," Powell said. "But restoring it when inflation is high may require measures that are unpopular in the short term as we raise interest rates to slow the economy. The lack of direct political control over our decisions allows us to take the necessary measures without regard to short-term political factors," he added. Markets surprisingly took these statements calmly, perhaps because they did not provide any direct indication of where the Fed's policy was heading. Nevertheless, further increases are expected this year. Read next: Pietro Beccari Will Be The Louis Vuitton’s CEO, Departures Several Top Executives At Rivian| FXMAG.COM Senator Elizabeth Warren of Massachusetts criticized the observed round of rate hikes Powell has recently encountered strong opposition and criticism of his actions from both parties. Most recently, Senator Elizabeth Warren of Massachusetts criticized the observed round of rate hikes, while President Joe Biden largely refrained from commenting on the Fed's actions, noting that the central bank is primarily responsible for fighting inflation. "Without clear legislation, it would be inappropriate for us to use our monetary policy" Although Powell repeatedly stated that political factors have not influenced his actions, it is clear that the pressure on the central bank is high as more and more politicians are talking about a return to a softer approach amid the first signs of slowing inflationary pressures. He also appealed for lawmakers to use their regulatory powers to address climate change, as well as asked major banks to check their financial preparedness in case of situations, such as hurricanes and floods. "Decisions on policies that directly address climate change should be made by the elected branches of government, reflecting the will of society," he said. "But without clear legislation, it would be inappropriate for us to use our monetary policy to develop a greener economy or to achieve other goals related to climate change in the world," he added. EUR/USD With regards to the forex market, EUR/USD still has a chance of updating the December highs, but for this to happen, the pair has to break above 1.0760 as only that will push the quote to 1.0790 and 1.0850. Meanwhile, a drop below 1.0720 will bring the pair to 1.0680 or to 1.0650. GBP/USD In GBP/USD, buyers need to stay above 1.2140 to maintain their advantage as the rise is gradually slowing down. The breakdown of 1.2200 will spur the pair to reach 1.2260 and 1.2301, while a fall below 1.2140 will push it to 2090 and 1.2040. Read next: According To Analysts, Russia May Collapse Within A Decade, Guaranty Trust Bank Has Fined| FXMAG.COM Relevance up to 08:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331954
French strikes will cause limited economic impact

Macron's Pension Reform Proposal Becomes A Defining Moment In His Presidency

Jakub Novak Jakub Novak 11.01.2023 12:13
Emmanuel Macron unveiled a plan to gradually raise the minimum retirement age in France from 62 to 64 by 2030, drawing the ire of trade unions. They immediately called for strikes in protest against the reform. A defining moment in Macron's second five-year term as president. In a statement, Macron said citizens need to work longer in order to raise the relatively low employment rate of the elderly, as well as prevent a permanent deficit in the public system financed by employee contributions. However, trade union organizations believe that this just unfairly punishes low-skilled workers and people who started working at an early age. They called for a first day of strikes and demonstrations on January 19, saying it is a start. The reform should be a defining moment in Macron's second five-year term as president. If he manages to push through this, he will face the paralyzing upheaval that accompanied, and sometimes crushed, attempts by his predecessors to change labor and retirement laws. But if he backs down, it will undermine his ambition to bring about a business-friendly transformation of the economy in France over a decade. Macron was forced to withdraw his pension reform proposal in 2020 The government plans to introduce a bill in parliament as early as February this year, and Macron may eventually have to use a special constitutional measure to bypass the vote if he cannot persuade some opposition MPs to support it. Recall that Macron was forced to withdraw his pension reform proposal in 2020 after months of demonstrations and strikes. At that time, they had to back down due to the Covid pandemic. This time, the reason to step aside could be the troubled French economy, which is struggling with rising energy prices and high inflation. Public finances are also struggling after huge spending during the pandemic and energy crisis. EUR/USD  So far, this has not affected the markets in any way, but once the unrest starts, it is likely that euro will decline. But for now, it still has a chance of updating the December highs as long as buyers manage to push the quote above 1.0760. That is the only way for EUR/USD to reach 1.0790 and 1.0850. A drop below 1.0720, meanwhile, will bring the pair to 1.0680 or to 1.0650. GBP/USD In GBP/USD, buyers need to stay above 1.2140 to maintain their advantage as the rise is gradually slowing down. The breakdown of 1.2200 will spur the pair to reach 1.2260 and 1.2301, while a fall below 1.2140 will push it to 2090 and 1.2040.   Relevance up to 08:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331956
The Melbourne Institute Inflation Gauge For Australia Rose More Than Expected

The Quarterly CPI Release Could Determine The RBA Decision

Kenny Fisher Kenny Fisher 11.01.2023 12:34
The Australian dollar is trading quietly on Wednesday. AUD/USD is at 0.6904, up 0.14%. Australian CPI climbs to 7.3% Australian inflation pushed higher in November, rising to 7.3% following a 6.9% gain in October. This matched the forecast. The trimmed mean rate, a key gauge of core inflation, rose to 5.6% in November, up from 5.4% a month earlier and its highest level since 2018. The drivers behind the increase were higher jet fuel prices as well as accommodation prices. The drop in inflation in October (6.9%, down from 7.3% prior) had raised hopes that inflation might have peaked, but the rise in the November release has dampened such hopes. Retail sales for November jumped 1.4%, buoyed by Black Friday sales. This was much higher than the forecast of 0.6% and the October read of 0.4%. Consumer spending remains strong despite the double-whammy of rising interest rates and high inflation. What will be the RBA’s take on this data? The trimmed mean rate indicates that the rise in inflation is broad-based, a reminder that the RBA has more work to do as it tackles high inflation. The strong retail sales data shows that the economy can still bear further hikes, and the markets have priced in a 25-basis point increase at the February 7th meeting. The RBA rate policy is data-dependent, which means that the quarterly CPI release on January 25th could determine what decision the central bank takes at the meeting. The minutes of the December meeting indicated that the RBA considered three options at that meeting – a 25 bp hike, a 50-bp hike and a pause. In the end, RBA members opted for the 25-bp increase. I would expect the RBA to show similar flexibility at the February meeting. Fed Chair Powell finds himself under constant scrutiny, not just for his comments but also for what he doesn’t say. Powell participated on a panel at a symposium of the Swedish central bank on Tuesday. The topic was central bank independence, and Powell did not touch upon the economy or monetary policy. The markets took this as a dovish sign and the US dollar pared gains as a result. Read next:Pietro Beccari Will Be The Louis Vuitton’s CEO, Departures Several Top Executives At Rivian| FXMAG.COM AUD/USD Technical 0.6931 remains a weak resistance line, followed by 0.7044 0.6817 and 0.6747 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Pound Sterling: Short-Term Repricing Complete, But Further Uncertainty Looms

Eurozone Inflation Has Fallen Back Into Single Digits But The ECB’s Message Remains Hawkish

Kenny Fisher Kenny Fisher 11.01.2023 14:44
The euro is drifting on Wednesday, trading at 1.0730. EUR/USD has climbed about 1% this week, and Monday’s high of 1.0760 is its highest level since June 22nd. Can the euro continue to push higher? ECB unlikely to change aggressive stance Eurozone inflation has fallen back into single digits, raising hopes that inflation may have finally peaked. The headline rate slowed to 9.2% in December, down from 10.1% in November and beating the forecast of 9.7%. The slowdown is welcome news for the ECB, but investors shouldn’t count on the central bank becoming dovish and ending its current rate-tightening cycle, even if inflation continues its downturn in the coming months. The drop in headline inflation has been fuelled by energy subsidies by governments in Germany and other eurozone members, as well as lower energy prices. Core inflation rose to 5.2% in December, up from 5.0% in November, which indicates that underlying price pressures remain strong. The ECB is unlikely to ease its pace of hikes until the core rate shows a sustained fall as well as a drop in wage growth. In the meantime, the ECB’s message remains hawkish. ECB President Lagarde said in December that the markets were underestimating how high rates would go and noting that the ECB was likely to continue raising rates in 50-bp increments “for a period of time”. The US releases December CPI on Thursday, and we’ve seen in recent months how inflation reports can move the equity and currency markets. The consensus for headline inflation stands at 6.5%, following the November gain of 7.1%. The core rate is also expected to ease, with a forecast of 5.7% in December, compared to 6.0% in November. In recent months, soft inflation reports have sent the US dollar lower, as the markets have assumed that the Fed will not be able to continue hiking in the face of falling inflation. I would expect a similar reaction if December’s inflation numbers are lower than expected. Read next: The EUR/USD Pair Maintains A Steady Upward Trend, The Aussie Pair Keeps Close To 0.69| FXMAG.COM EUR/USD Technical EUR/USD has support at 1.0711 and 1.0612 There is resistance at 1.0800 and 1.0953 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Metals Market Update: Decline in LME Copper On-Warrant Stocks, Zinc and Lead Surplus Continues, Nickel Market in Supply Surplus

FX: EUR/USD Optimism Continuing To Build, USD/JPY Is Consolidating At The Lows

ING Economics ING Economics 11.01.2023 14:52
FX markets are consolidating ahead of tomorrow's important December US CPI release. But the dollar bias is lower. Business surveys point to a slowing US economy and, if inflation allows, the Fed will be in a position to ease policy later this year. Commodity markets remain bid on the China rebound story and we expect emerging and commodity FX to remain bid USD: Business pessimism builds We highlighted in yesterday's publication that the day presented two event risks to the building dollar negative sentiment. Those were Federal Reserve Chair Jerome Powell's comments at a Riksbank symposium and the US NFIB small business confidence reading. In the end, Chair Powell avoided discussing monetary policy and instead warned against central bank mission creep into climate policy. And the NFIB survey was very pessimistic indeed, including a view on pricing power which ING's US economist, James Knightley, says is consistent with US core inflation dropping to a more comfortable 2-3% year-on-year area by the late summer. That core reading is currently running at 6.0% year-on-year and is expected to drop to 5.7% YoY in tomorrow's December CPI release - the key US release this week. Thus this year's FX market proposition remains whether US inflation can acquiesce enough to allow the Fed to cut later this year. The markets price a 50/60bp hike into the spring, then a cut of a similar magnitude by year-end. A further 150bp of easing is priced into next year. ING's house view is a little more aggressive, looking for 100bp of cuts this year and then a further 150bp next year. Assuming no upside surprises in inflation then and the increasing focus on China firmly supporting domestic demand, the risk environment is being read as positive. We note copper, a key barometer of Chinese demand, climbing back to $9000/MT in Asia today. We think investors will therefore be looking to sell the defensive dollar on rallies as they put money to work in 2023. As always, we think the short end of the US yield curve will play a major role in FX markets and as long as two-year US Treasury yields continue to hover near the range lows at 4.20/4.25%, the dollar will stay on the soft side.  DXY remains soft and we would say the near-term bias remains towards the 102.00 area, unless tomorrow's US CPI release throws a hawkish curveball. The US event calendar looks exceptionally light today, although we will start to see US quarterly earnings releases build through the week. Chris Turner EUR: Options market turns more bullish EUR/USD remains gently bid, buoyed by expectations of a Fed U-turn in the second half of this year, China reopening and a belatedly hawkish European Central Bank. On that subject, we have four ECB speakers today. Market expectations are firmly set on a further 125-150bp of ECB tightening this year - seemingly 50bp hikes in both February and March and a final 25bp in May to take the deposit rate to 3.25%. Our eurozone team agrees with this pricing.  Looking at the FX options market we can see EUR/USD optimism continuing to build. Measures such as the risk reversal - the cost of a 25 delta EUR/USD call option versus a similar EUR/USD put option - continue to move in favour of EUR/USD upside. As recently as October, the markets were prepared to pay 2% extra in volatility terms for a 3-month 25 delta EUR/USD put option. That skew for euro puts has now narrowed to 0.67%. The skew turning positive - in favour of EUR/USD calls - would be a big moment for the FX market. As above, the seemingly benign investment environment (despite the horrors in Ukraine) probably has investors wanting to buy EUR/USD on dips. It is the time of year when FX markets move on fixing flows from the asset management community. Today's EUR/USD bias looks towards resistance at 1.0785 and potentially towards the 1.09 area tomorrow, should the US CPI release oblige. Chris Turner JPY: Lots of focus on the BoJ USD/JPY is consolidating at the lows and the focus very much remains on Bank of Japan (BoJ) policy after December's surprise widening in the 10-year JGB yield target band. 10-year JGB yields continue to press the topside of the new +/- 0.50% band, with the expectation growing that the band will be widened to +/- 1.00% over the coming months. Despite the BoJ marketing these adjustments as a measure to address JGB market functioning, investors are reading this as BoJ tightening - and yen positive. Focus on the exit of the ultra-dovish BoJ governor in April means that investors will be very cautious selling the yen over coming periods. One month realised USD/JPY volatility is still at an incredibly high 16.5% - making the JPY far too volatile for any kind of funding currency - and we think USD/JPY can end the quarter somewhere near 128. Chris Turner CEE: Czech inflation to rise again Yesterday's meeting of the National Bank of Romania (NBR) brought a 25bp rate hike to 7.00%, as expected. Although we consider this to be the last hike in this tightening cycle, we feel that the NBR wants to keep the door open if needed. But probably the most interesting part is the dropping of the "firm liquidity control" commitment. While dovish in essence, we read this more like an after-the-fact acknowledgement rather than any forward guidance. The Romanian leu barely changed yesterday but we still think it should benefit from global factors, catch up with the lag behind the region and make another move below NBR levels. Today, the focus shifts to the Czech Republic. December inflation we think will show a rise from 16.2% to 16.4% year-on-year, above market expectations. However, as we showed earlier, there is still room for upside surprises. Moreover, fuel prices are the main reason for slower inflation than we have been used to, while inflation remains strong in other parts of the CPI. For the market, the higher number should be a reminder that the inflation problem is still with us and this may be the first opportunity this year to reassess the strong dovish expectations built up recently. At the one-year horizon, markets expect a 170bp rate cut, which is hard to believe given the current Czech National Bank rhetoric, the record strong koruna and the inflation profile. However, the koruna is looking the other way and ignoring domestic conditions. More important for it and the entire CEE region at the moment is the global story, the massive improvement in sentiment in European markets and gas prices below EUR70Mwh. This, in our view, should keep the positive sentiment in the region at least for the rest of the week and keep FX steady.                                Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

InstaForex Analysis InstaForex Analysis 12.01.2023 08:00
At the close of the New York Stock Exchange, the Dow Jones was up 0.80%, the S&P 500 was up 1.28% and the NASDAQ Composite was up 1.76%. According to forecasts, annual inflation in the US slowed to 6.5% from 7.1% in November. Analysts note that the expected slowdown in inflation, coupled with an improvement in the situation in supply chains and an easing of covid restrictions in China, creates the basis for optimism in the markets. The publication of the consumer price index is expected on Thursday. Dow Jones The leading performer among the Dow Jones index components in today's trading was Microsoft Corporation, which gained 6.92 points or 3.02% to close at 235.77. Quotes of Home Depot Inc rose by 8.37 points (2.61%), closing the auction at 329.00. Apple Inc rose 2.76 points or 2.11% to close at 133.49. The least gainers were shares of Verizon Communications Inc, which shed 0.77 points or 1.84% to end the session at 41.18. Salesforce Inc was up 1.72% or 2.54 points to close at 144.90, while Procter & Gamble Company was down 0.81% or 1.23 points to close at 150. .66.  S&P 500 Leading gainers among the S&P 500 index components in today's trading were Bio-Rad Laboratories Inc, which rose 6.53% to 461.17, Etsy Inc, which gained 6.11% to close at 134.69. as well as SolarEdge Technologies Inc, which rose 5.84% to close the session at 302.15. The least gainer was Teleflex Incorporated, which shed 7.60% to close at 239.77. Shares of DexCom Inc lost 4.26% and ended the session at 106.16. Quotes of Intuitive Surgical Inc decreased in price by 4.20% to 259.96. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Atlis Motor Vehicles Inc, which rose 276.12% to 10.08, Broadwind Energy Inc, which gained 96.90% to close at 4.45. as well as shares of Bed Bath & Beyond Inc, which rose 68.60% to close the session at 3.49. The least gainers were Tantech Holdings Ltd, which shed 28.10% to close at 2.20. Shares of American Virtual Cloud Technologies Inc lost 24.65% to end the session at 1.07. Quotes of Kala Pharmaceuticals Inc decreased in price by 20.27% to 21.00. Numbers On the New York Stock Exchange, the number of securities that rose in price (2,342) exceeded the number of those that closed in the red (728), while quotes of 101 shares remained virtually unchanged. On the NASDAQ stock exchange, 2499 companies rose in price, 1223 fell, and 181 remained at the level of the previous close. Broadwind Energy Inc (NASDAQ:BWEN) rose to a 52-week high, up 96.90% or 2.19 points to end at 4.45. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 2.48% to 9/21. Gold Gold futures for February delivery added 0.23%, or 4.35, to $1.00 a troy ounce. In other commodities, WTI crude for February delivery rose 3.30%, or 2.48, to $77.60 a barrel. Futures for Brent crude for March delivery rose 3.47%, or 2.78, to $82.88 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.21% to 1.08, while USD/JPY rose 0.14% to hit 132.43. Futures on the USD index fell 0.01% to 102.97.     Relevance up to 03:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/308278
The RBA Raised The Rates By 25bp As Expected

Inflation In Australia Is Moving In The Opposite Direction

InstaForex Analysis InstaForex Analysis 12.01.2023 08:01
Australia's inflation report was released on Wednesday, which exceeded expectations of most experts. The consumer price index rose 7.3% in Q4 2022, with a forecast of 6.8% growth. Notably, in the third quarter, inflation showed signs of slowing (when the growth forecast was 7.4%, the indicator turned out to be at 6.9%). And in the fourth quarter analysts expected further development of this trend - but in fact the CPI returned to the level of the second quarter, thereby puzzling market participants. In addition, on Wednesday another equally important report was published in Australia, which reflected a significant increase in consumer activity. We are talking about retail sales, which rose by 1.4% month-on-month in November (with a modest forecast of 0.6%). This is the strongest growth rate since last March. For comparison, in the previous month the figure increased by only 0.4%. The data added to the fundamental picture for the pair, which is shaping up quite positively. The relevant news flow is mainly related to China, which abandoned its "zero-Covid" policy and resumed imports of coal from Australia. The reset in relations between Beijing and Canberra was appreciated by AUD/USD traders: in the first week and a half of 2023, the pair rose more than 200 pips to settle at the 69th figure area. Interest rate  Wednesday's inflation report, which is important in and of itself, also suggests that the Reserve Bank of Australia will continue to "quietly" tighten monetary policy parameters. The RBA has cut the rate of interest rate hikes to 25 points since last October, but assures markets that it is not going to pause the tightening of monetary policy. The resumed growth of inflation in the fourth quarter suggests that the issue of a pause is now finally off the agenda (at least in the perspective of the next meetings). Following the December meeting, RBA head Philip Lowe said that the central bank does not pursue a pre-planned course: in his words, the size and timing of future rate hikes "will be determined by incoming data and the outlook for inflation and the labor market. Another noteworthy phrase from the head of the RBA is that the Board's priority remains restoring low inflation and getting inflation back into the 2-3% range over time. Inflation report is unlikely to prompt the RBA to be more aggressive As we can see, so far inflation in Australia is moving in the opposite direction. Therefore, the likelihood of any pause at this point is close to zero. On the other hand, the latest inflation report is unlikely to prompt the RBA to be more aggressive (in the context of a return to the 50-point rate). Most likely, the Australian central bank will continue to raise the rate in 25-point increments, without risking to increase the rate due to possible side effects (relevant concerns were repeatedly voiced by the RBA representatives). In other words, the aforementioned report will not lead to any "revolutionary" changes, despite its greenback color. At the same time, this release has reduced to zero the probability of a pause in the RBA rate hike. That's enough for the aussie to keep trying to climb back up to the 70s. But so far the bulls' attempts to get closer to the main price barrier at 0.7000 are failing. During the two days the pair's bulls were assaulting the intermediate resistance level at 0.6930 (the upper line of the Bollinger Bands indicator on the daily chart), but each time they were back to their previous positions, to the base of the 69th figure. The reason for such indecisiveness is also caused by the inflationary report, only now it is the American one. US data Let me remind you that the US Consumer Price Index will be released at the beginning of the US session. According to most experts, the release will reflect a further slowdown in US inflation, reinforcing the discussion that the Fed may move to a 25-point rate hike. The likelihood of such a scenario materializing (at least in the context of the February meeting) has risen to 76% after last Friday's Nonfarm data. If inflation also disappoints traders, the probability of a 25-point rate hike in February will probably rise to 85-90%. The greenback will again come under pressure and bulls will have an excuse to make a march to the 70s. The alternative scenario But the alternative scenario (though unlikely, of course) is that inflation in the US will show growth contrary to what most experts predicted. In that case, the dollar bulls will assert themselves all over the market, especially in the light of the latest statements of the Fed representatives. Mary Daly and Raphael Bostick made some very hawkish remarks this week. Specifically, Daly said that the rate could be raised "by either 25 or 50 points" at the next meeting. Also, in her opinion, the final point of the current cycle would be in the 5.1%-5.25% range (that is, she was against lowering the upper bound). Bostick took a similar stance. Fed All this suggests that it is too early to write off the hawkishness of the Fed: if the inflation report surprises market participants with its greenback, the US currency will strengthen its position considerably. Again, this option is unlikely, but judging by the dynamics of the dollar pairs, traders do not risk to play against the greenback on the threshold of this release. AUD/USD Thus, at the moment the best option for the pair is to take a wait-and-see stand, because the key macro report of Thursday is hypothetically able to "redraw" the fundamental picture for all the dollar pairs.   Relevance up to 23:00 2023-01-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332040
The USD/JPY Price Reversed From The Lower Limit

The USD/JPY Pair Has A Chance For Further Growth

InstaForex Analysis InstaForex Analysis 12.01.2023 08:08
This morning, the Japanese yen fell to the lower limit of the consolidation of the last four days. Like the European currencies, the yen is waiting for today's US inflation report for December. The signal line of the Marlin oscillator makes a second attempt within a week to move into a downward trend area. If it succeeds this will help the price reach support at 129.77. Crossing the level makes the 127.10 target available. The embedded lines of the global price channel marked on the daily chart have changed in accordance with the current situation. On the four-hour chart, the price is trying to cross the support of the MACD line. It is helped by the Marlin oscillator, which has already moved into the downward trend area. So, we wait for the price to reach the first target at 129.77. This is the main scenario. The alternative involves crossing the resistance at 133.50 and a possible further growth to the MACD line on the daily chart (137.00).   Relevance up to 03:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332042
The Data May Keep The British Pound (GBP) From Rising

The GBP/USD Pair Is Still In The Area Of The Downtrend

InstaForex Analysis InstaForex Analysis 12.01.2023 08:11
The pound is settling at 1.2155 for the third day. Obviously, investors are waiting for today's US inflation report for December. If the data is above projections, the dollar may develop an attack against major world currencies. The main indicator of breaking the trend in the current situation is the MACD line (1.1977) - going under it will signal that the British currency will start a medium-term decline. Slightly below the MACD line is the support at 1.1933, which is the June 14, 2022 low. The Marlin oscillator on the daily chart is still in the area of the downtrend, which increases the chances of a reversal. On the four-hour chart, the Marlin oscillator behaves suspiciously, as if it intends to form a divergence with the price. Such suspicion is based on the reversal of the oscillator signal line from the zero line upwards, i.e. it is a reversal that has received sufficient momentum to form a full-fledged divergence. The MACD line is located at 1.2060. If the price breaks through it, it will be the first sign that the GBP/USD pair is serious about reaching 1.1737, 1.1495. Relevance up to 03:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332044
The Euro May Attempt To Resume An Upward Movement

The EUR/USD Pair Is Waiting For The US CPI Report

InstaForex Analysis InstaForex Analysis 12.01.2023 08:15
The euro is set to master the target range of 1.0758-1.0787 this morning. According to our main scenario, I expect the formation of the price divergence with the Marlin oscillator and the euro's reversal to a medium-term decline. It is impossible to predict how high the price will still be able to grow in case the CPI falls, but from a purely technical perspective, a reversal can take place even from current levels, which indirectly implies CPI values are higher than forecasts. The forecast for December CPI is 6.5% y/y versus 7.1% y/y in November, while the forecast for the core index is 5.7% y/y versus 6.0% y/y. It is likely that this strong decline in inflation is causing traders to expect them with excessive optimism. The forecast for monthly inflation, or more precisely core CPI for December, is 0.3% versus 0.2% in November, with the overall monthly CPI forecast at 0.0% versus 0.1% a month earlier. In other words, the data could end up disappointing. Albeit not by much, but enough to keep investors from buying counter-dollar currencies. On the four-hour chart, the price and the Marlin oscillator have a structure similar to the formation of a divergence. We have to wait for the US inflation report and make a decision according to the market behavior. The uptrend will break in case the price falls below 1.0660, that is, when it crosses the support of the MACD line.     Relevance up to 03:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332046
Mexico’s Central Bank Surprised Markets With A 50bps Rate Hike Once Again

The USD/MXN Pair Is Trying To Correct A Rally Upwards

InstaForex Analysis InstaForex Analysis 12.01.2023 08:28
The USD/MXN currency pair on the 4-hour chart appears to be trying to correct a rally upwards after successfully breaking below the 19,036 level where this is confirmed by the appearance of deviations between price movements and the Awesome Oscillator indicator. The level to be tested in the near future is the area 18,980-19,039 but if before successfully heading to that area level suddenly USD/MXN moves down again to break below the 18,911 level then it is very likely that the scenario described earlier will become invalid and cancel itself. Read next:Discussion Of Bank Representatives On Financing The Ecological Transformation | FXMAG.COM Relevance up to 05:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/117451
The EUR/USD Price May Fall Under 1.0660

The EUR/USD Pair Continues The Upward Movement

Paolo Greco Paolo Greco 12.01.2023 08:46
M5 chart of EUR/USD On Wednesday, EUR/USD continued to move mainly sideways. There was a slight upward bias, but the pair constantly rolled back down, constantly changing the direction of the movement. The US and the EU did not release any reports so traders had nothing to react to, but they still find reasons to buy the euro, though it is very difficult to do so. The pair failed to start a bearish correction normally, unlike the pound, and today, considering the movements of the last weeks, it will be very difficult to predict the market's reaction to the inflation report. It is better to say that with a high probability the market will try to interpret the report in favor of the euro again. If inflation is falling, that's bad for the dollar. If inflation is falling slowly or not at all, it's good for the dollar. Accordingly, inflation should slow down very weakly in December for the market to start buying the dollar. In other cases, the pair's growth is more likely. All of the trading signals of the day were formed near 1.0736 and all of them were not accurate, but what else should we expect from the signals during the flat? Traders could try to use only the first two, but there was not even 15-point movement in the right direction neither in the first, nor in the second case, so both trades could make the loss. Unfortunately, yesterday it was impossible to avoid it. Read next: The EUR/USD Pair Maintains A Steady Upward Trend, The Aussie Pair Keeps Close To 0.69| FXMAG.COM COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 29,300, whereas the number of short positions fell by 13,100. Thus, the net positions decreased by 16,200. The number of long positions is 130,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 44,000 (671,000 vs. 627,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD continues the upward movement, which started last Friday. Yes, it has weakened, but it still continues even without a local correction. It might do the same thing today, if the US inflation data shows a slowdown as expected. On Thursday, the pair may trade at the following levels: 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, 1.0938, 1.1036, as well as Senkou Span B (1.0597) and Kijun-sen (1.0630). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 12, the US will publish its inflation report. Meanwhile, the EU's calendar of events is empty. So everyone will focus on the inflation data. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 05:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332054
The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

The GBP/USD Pair's Traders Still Use Every Opportunity To Buy

Paolo Greco Paolo Greco 12.01.2023 08:52
M5 chart of GBP/USD On Wednesday, GBP/USD ended a weak bearish correction after a rebound from 1.2106. Now it's approaching 1.2185, if GBP crosses this mark then the pair might rise further. I mentioned before that the downward movement would be more logical, but traders still use every opportunity to buy, but in most cases there are no macroeconomic or fundamental reasons for that. However, the pair's general trend is not that important for the weakest charts because trading is carried out by levels and lines. Therefore, in principle, it does not matter whether the market trades logically or not, as long as the movement itself is good and has a trend. But there is a problem with it now because the market does not always move like a trend even intraday. Traders would say that they were lucky on Wednesday because there was only one signal -a rebound from 1.2106. After its formation and till the evening the price was able to grow by about 25 points, which traders could earn on this trade. There is also a probability of a flat between 1.2106 and 1.2185. COT report The latest COT report showed an increase in bearish sentiment. During the given period, non-commercial traders opened 3,000 long positions and as many as 12,400 short positions. Thus, the net position fell by about 9,400. This figure has been on the rise for several months, and the sentiment may become bullish in the near future, but it hasn't yet. Although the pound has grown against the dollar for the last few months, from a fundamental perspective, it is still difficult to answer why it keeps rising. On the other hand, it could fall in the near future (in the mid-term prospect) because it still needs a correction. In general, in recent months the COT reports correspond to the pound's movements so there shouldn't be any questions. Since the net position is not even bullish yet, traders may continue to buy the pair over the next few months. Non-commercial traders now hold 43,600,000 long positions and 63,900 short ones. I remain skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. Read next: The EUR/USD Pair Maintains A Steady Upward Trend, The Aussie Pair Keeps Close To 0.69| FXMAG.COM H1 chart of GBP/USD On the one-hour chart, GBP/USD has risen sharply, but so far it doesn't have any grounds for the continuation of growth. I assume that traders may start to buy the pound for no reason, but if we pay attention to the fundamentals and macroeconomics, the British currency should fall, not grow. Also, we should also consider the possibility that a "swing" or flat could start, and the market might probably have an illogical reaction to today's US inflation report. On January 12, the pair may trade at the following levels: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259, 1.2342, 1.2429-1.2458. The Senkou Span B (1.1983) and Kijun Sen (1.2023) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Thursday, there are no important events planned for Great Britain, but the US will publish a really important report, which might affect the market sentiment a lot. Thus, volatility may increase during the day, but I don't expect the pair's movement to be logical. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 06:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332058
Bank of England raised the interest rate, UK unemployment data go out tomorrow

The EUR/USD Pair: A Bearish Reversal Remains A High Probability

Oscar Ton Oscar Ton 12.01.2023 08:56
Technical outlook: EURUSD rose through the 1.0775 high intraday on Thursday as projected earlier, testing the resistance zone. The single currency pair is seen to be trading close to 1.0762 at this point in writing, having eased off a bit from the intraday highs. A bearish reversal remains a high probability from current levels around the 1.0760-1.0800 zone as the bears remain poised to be back in control. EURUSD might have completed its rally, which started from the 0.9535 lows in September 2022. The instrument might have carved a formidable low around 0.9535, which could hold in the next coming months. As prices approach strong resistance around 1.0800, they are expected to at least retrace lower towards the 1.0300-50 zone, which is the initial Fibonacci retracement of the rally between 0.9535 and 1.0775. EURUSD is supported at 1.0481, while resistance comes in around 1.0800 going forward. It is a matter of time before the bears are back in control and it would be interesting to see how prices react closer to the 1.0800 mark. A break below 1.0481 is what traders will be waiting for to initiate fresh short positions as a high would be in place then. Read next: Discussion Of Bank Representatives On Financing The Ecological Transformation | FXMAG.COM Trading idea: Potential bearish turn against 1.0900 Good luck!   Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308312
Bank Indonesia Maintains Unchanged Rates Amidst Inflation Stability and IDR Pressure

The US Dollar Index Is Seen To Be Trading Close To 102.80

Oscar Ton Oscar Ton 12.01.2023 09:05
Technical outlook: The US dollar index slipped through the 102.63 lows during the Asian session on Friday, testing the previous swing low at 102.57. The fact that the bulls are still holding the above price support is indicative of a potential sharp bullish reversal from here in the near term. The index is seen to be trading close to 102.80 at this point in writing as the bulls remain poised for a comeback. The US dollar index might have terminated its larger-degree drop, which started from 114.70 in September 2022. Prices carved a low around 102.55, close to the projected Fibonacci 1.618 extension at 102.30 as seen on the 4H chart presented here. If the above structure holds true, we can expect a sharp rally at least towards 110.00 in the next few trading sessions. The US dollar index is facing immediate resistance at 105.35, while support comes in just around the 102.00-30 zone. The fact that RSI is also showing bullish divergence on several timeframes (not shown today) also builds a strong case of a potential bullish turn from current levels. Only a significant and consistent break below 102.30 will nullify the bullish scenario. Read next: The EUR/USD Pair Maintains A Steady Upward Trend, The Aussie Pair Keeps Close To 0.69| FXMAG.COM Trading idea: Potential rally against 101.50 Good luck! Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308320
Dollar Strength Continues as 10-year Treasury Surges to 4.34%, Reaching Highest Levels Since Financial Crisis

Analysis Of The Singapore Dollar Pair's Movement (USD/SGD)

Torben Melsted Torben Melsted 12.01.2023 09:08
USD/SGD is displaying a nice-looking S/H/S top that will be activated upon a break below support at 1.3278 and call for a decline to at least 1.2095, but likely will set the stage for a continuation to below the 2011 low near 1.2000. Short-term we see resistance near 1.3440 and important resistance at 1.3617 that is expected to cap any correction for the break through key support at 1.3278 for the expected decline towards 1.2095. Read next: The EUR/USD Pair Maintains A Steady Upward Trend, The Aussie Pair Keeps Close To 0.69| FXMAG.COM Relevance up to 07:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308322
FX: The SNB Is Getting Its Stronger Swiss Franc Via Gains Against The Dollar

FX: The SNB Is Getting Its Stronger Swiss Franc Via Gains Against The Dollar

ING Economics ING Economics 12.01.2023 09:24
FX markets today see one of the most highly awaited data points of the month - US CPI. The last two soft releases were the foundation for the fourth quarter rally in risk assets and today's release should determine whether this year's rally - and the decline in the dollar - continue. Next week's Bank of Japan meeting is also in focus as is strength in EUR/CHF EUR: Sowing some independent strength The euro showed some independent strength yesterday and had quite a strong rally against European currencies - especially the Swiss franc (see below). Some tried to link that rally to a story that Germany would support fresh EU bond issuance to support state aid in Europe's fight against US green subsidies in its Inflation Reduction Act. That linkage seems a little far-fetched and European peripheral debt barely budged on the story. But we are still seeing eurozone equity outperformance, which must be providing the euro with some good support. For today, the FX options market prices a 90 pip EUR/USD range for the CPI release. Assuming no upside surprises in CPI, the EUR/USD direction of travel looks towards the 1.09 area. 1.0660/1.0700 might well contain any downside today. Chris Turner USD: December CPI to determine whether risk rally continues It has been a relatively good start to the year for risk assets. Global equity indices are up around 3.7%, led by Europe. Bond indices are up a decent 2-3% and emerging market assets are in demand, with EM local currency bond indices up close to 3%. This environment of money being put to work has weighed on the defensive dollar, which is softer against many emerging market currencies and quite a few G10 currencies. This benign environment has been secured partially on the back of soft US price and activity data. Softer US price data has come both in the form of hard data and through surveys. Today sees the release of the December US CPI. Expectations are that the core will be rising at a relatively subdued 0.3% month-on-month pace and 5.7% year-on-year. This compares to 0.6/0.7% MoM readings last summer. As always, there are many moving parts in the data. For example, will medical costs and used car prices continue to drag the number lower? And does it remain too early to expect lower rental prices to drag shelter costs - a big component - down? Recently, the Federal Reserve has been highlighting that it is focused on the core services inflation reading ex-housing. So let us see what that number offers today. ING's US James Knightley is on consensus forecasting the 0.3% MoM/5.7% YoY reading. A number in line with consensus probably allows the risk rally to continue. Expectations of a Fed easing cycle in the second half of the year, China reopening and lower energy prices are all encouraging this reallocation towards risk and should today's CPI number oblige, DXY could make a move towards the 102 area. Any upside surprise in the number could see DXY bounce to the 104.00/104.25 area, but we doubt it would completely spell the end for the better risk/softer dollar environment. Chris Turner JPY: Bank of Japan meetings are all live USD/JPY sold off in early Asia on a local media report that the Bank of Japan could again review its JGB yield target at next week's meeting. The report suggested December's widening of the JGB yield target band might not have been enough to address the BoJ's concerns over bond market functioning. The report also suggested that the BoJ would raise its fiscal 2023 and 2024 inflation ex-food forecast to 2% - effectively signalling the end of its deflation fears. This comes at a time of much focus on a pick-up in wages in Japan and a more sustainable rise in inflation. The FX options market prices a 1.3% range for USD/JPY today, where a benign US data print could send USD/JPY back to this year's low at 129.50. Next week's BoJ meeting means that any upside should be limited to the 132.60/133.00 area. Chris Turner CHF: Wrong We had been forecasting a lower EUR/CHF this year on the view that the Swiss National Bank wanted a stronger nominal Swiss franc to fight inflation. Instead, EUR/CHF yesterday broke above 1.00. There are probably two factors driving the move. The first is that USD/CHF is a lot lower, meaning that the SNB is getting its stronger Swiss franc via gains against the dollar and does not need it a lot stronger against the euro. The second is that the hawkish European Central Bank and the further 125bp of tightening expected will out-tighten the SNB. Given that it looks like the dollar will stay offered for the time being and the ECB looks unlikely to relent on its hawkishness, this trend to a higher EUR/CHF may remain in place. However, we doubt the SNB would want to see a big rally this early and the move may stall in the 1.0070/1.0100 area. We had thought EUR/CHF could trade to 0.95 this summer, but it looks like we will have to revise up those forecasts. Chris Turner  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

A Modest Pullback In Crude Oil Prices Undermines The Commodity-Linked Loonie (CAD)

TeleTrade Comments TeleTrade Comments 12.01.2023 09:55
USD/CAD attracts fresh buying on Thursday, though the upside potential seems limited. A modest downtick in oil prices undermines the Loonie and lends support to the major. Smaller Fed rate hike bets weigh on the USD and could cap gains ahead of the US CPI. The USD/CAD pair regains positive traction on Thursday and steadily climbs to the top end of its weekly range, closer to mid-1.3400s during the early European session. The intraday move up, however, lacks bullish conviction and is more likely to remain capped ahead of the release of the latest US consumer inflation figures. In the meantime, a modest pullback in crude oil prices from over a one-week high touched on Wednesday undermines the commodity-linked Loonie and lends some support to the USD/CAD pair. Despite the recent optimism led by China's pivot away from its zero-COVID policy, worries that a deeper global economic downturn will hurt demand act as a headwind for the black liquid. That said, subdued US Dollar price action might hold back traders from placing aggressive bullish bets around the major and keep a lid on any further gains. In fact, the USD Index, which measures the greenback's performance against a basket of currencies, languishes near a seven-month low amid the prospects for smaller rate hikes by the Fed. Investors now seem convinced that the US central bank will soften its hawkish stance amid signs of easing inflation. This is evident from a further decline in the US Treasury bond yields and continues to weigh on the greenback. Traders, however, might prefer to wait for the crucial US CPI report before determining the near-term trajectory. Read next: The EUR/USD Pair Maintains A Steady Upward Trend, The Aussie Pair Keeps Close To 0.69| FXMAG.COM The Fed policymakers have indicated that they remain committed to combat high inflation and that rates could remain elevated for longer, or until there is clear evidence that consumer prices are falling. Hence, a stronger US CPI print will lift bets for a more hawkish Fed and push the USD higher, allowing the USD/CAD pair to build on this week's recovery from its lowest level since November 25. Conversely, a softer reading will set the stage for an extension of the recent rejection slide from the 1.3700 round-figure mark.
The Price Of USD/JPY Pair Has To Fight With The Resistance Level

ING Report: Next Week's BoJ Meeting Means That Any Upside Should Be Limited

TeleTrade Comments TeleTrade Comments 12.01.2023 10:00
USD/JPY came under modest bearish pressure early Thursday and declined below 132.00. The pair could plunge to 129.50 on mild US data, economists at ING report.  Any upside should be limited to the 132.60/133.00 “The FX options market prices a 1.3% range for USD/JPY today, where a benign US data print could send USD/JPY back to this year's low at 129.50.” “Next week's BoJ meeting means that any upside should be limited to the 132.60/133.00 area.” See – US CPI Preview: Forecasts from 10 major banks, price pressures to ease further
Further Downside Of The AUD/JPY Cross Pair Is Expected

The Australian Dollar Might Draw Support From Rising Bets

TeleTrade Comments TeleTrade Comments 12.01.2023 10:02
AUD/USD surrenders modest intraday gains and retreats below the 0.6900 mark in the last hour. The cautious market mood lends some support to the safe-haven buck and acts as a headwind. Bets for an additional RBA rate hike in February should limit losses ahead of the key US CPI. The AUD/USD pair struggles to capitalize on its modest intraday gains and fails near the 0.6925-0.6930 supply zone for the third straight day on Thursday. Spot prices retreat below the 0.6900 mark during the early part of the European session and refresh the daily low in the last hour, though the downside seems limited. The Australian Dollar might draw support from rising bets for an additional interest rate hike by the Reserve Bank of Australia (RBA) in February, bolstered by Wednesday's hotter domestic inflation data. In fact, the Australian Bureau of Statistics reported that the headline Consumer Price Index (CPI) re-accelerated to the 7.3% YoY rate - a 32-year-high - in November from the 6.9% in the previous month. Apart from this, subdued US Dollar price action could act as a tailwind for the AUD/USD pair, at least for the time being. The USD Index, which measures the greenback's performance against a basket of currencies, languishes near a multi-month low amid diminishing odds for a more aggressive tightening by the Fed. A slowdown in the US wage growth was seen as the initial sign of easing inflationary pressures, which could allow the US central bank to soften its hawkish stance. This leads to a further decline in the US Treasury bond yields and weighs on the buck. That said, the cautious mood helps limit any further losses for the safe-haven USD. Read next:Discussion Of Bank Representatives On Financing The Ecological Transformation | FXMAG.COM The anxiety ahead of Thursday's release of the latest US consumer inflation figures tempers investors' appetite for perceived riskier assets. This is evident from a softer tone around the equity markets, which is seen benefitting the greenback's relative safe-haven status and capping the upside for the risk-sensitive Aussie. Hence, the focus remains on the crucial US CPI report, due later during the early North American session.
The USD/CAD Pair Has The Strong Downside Momentum

The USD/USD Pair Is Expected A Downside Continuation

Peter Jacimovic Peter Jacimovic 12.01.2023 10:24
Technical analysis: USD/CAD has been trading sideways at the price of 1.3437 but I see potential for the downside continuation. Trading recommendation: Due to the test of the lower trend-line of the bigger channel in the background, I see potential for the further downside continuation. Watch for the potential selling opportunities with the downside objective at 1.3354. Stochastic oscillator is showing overbought condition and potential for the further downside movement. Key resistance is set at the price of 1.3450/70 Read next:Pietro Beccari Will Be The Louis Vuitton’s CEO, Departures Several Top Executives At Rivian| FXMAG.COM Relevance up to 09:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308361
All Eyes On Capitol Hill, Jerome Powell Will Appear Before The Senate Banking Committee

The Fed Will Most Likely Be More Deliberate In Its Decisions

Jakub Novak Jakub Novak 12.01.2023 10:29
While market players await the crucial inflation data from last year, which could trigger another rally, three leading Chicago Fed economists said the Fed will raise rates by one more percentage point before announcing that it has reached the ceiling so it will end the monetary policy tightening. Randall Kroszner Economists predict that rates will peak around 5.5% and stay there for a long time, keeping prices of everything from food to fuel in check. "I do think the Fed is going to keep rates at the highs for a while," said Randall Kroszner, a former Fed governor. "Even if inflation falls by 200 basis points over the year, or maybe even 300 basis points, the Fed will still keep rates at 5.5%," he added. Inflation  Inflation jumped to a 40-year high last year as global demand for goods and services recovered. Although prices have fallen since then, they are still well above the Fed's 2% target, making the bank realize that they missed the appropriate time they should have started to raise rates. Of course, if no more problems arise in the market and if the situation remains stable, economic recession will still be avoided. Interest rates Fed officials increased interest rates to 4.3% last month and forecasted that it will reach 5.1% this year. This is entirely different from the path they took back in the 1970s, when inflation began to slow. It was probably because the decision before was a fatal mistake as prices began to rise sharply again, leading to a crisis in the economy. Read next: Pietro Beccari Will Be The Louis Vuitton’s CEO, Departures Several Top Executives At Rivian| FXMAG.COM The Fed has not lost confidence in the markets Although today's data may indicate that inflation remains under control, the Fed will most likely be more deliberate in its decisions. At least, that is what many market participants are hoping for. But many experts say there is a vast difference between the late 1970s, early 1980s and today as it is obvious that the Fed has not lost confidence in the markets. If events unfold in this way, a rate hike will probably lead to a mild recession later this year, but it will only be short-lived. EUR/USD In terms of the forex market, there are still chances of hitting new monthly highs in EUR/USD as long as buyers manage to push euro to 1.0760. That will spur the pair to rise above 1.0790 and reach 1.0850. But if pressure returns and sellers get ahold of 1.0760, euro will collapse to 1.0720 and head to 1.0680 or as low as 1.0650. GBP/USD In GBP/USD, the rally is gradually slowing down, which means that buyers need to stay above 1.2120 in order to maintain their advantage. Only the breakdown of 1.2180 will push pound to 1.2240 and 1.2300 as a return of pressure around 1.2120 is likely to result in a collapse to 1.2060 and 1.2010.   Relevance up to 08:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332086
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

Saxo Bank Podcast: Why The Euro Is Strong, Weak Housing News And More

Saxo Bank Saxo Bank 12.01.2023 10:40
Summary:  Today we look at global equity markets gunning for more to the upside, apparently expecting a benign US CPI release today and pricing in a soft landing scenario as long treasury yields settled back lower after a strong US 10-year treasury auction yesterday. We also look at a resurgent JPY, why the euro is strong, but some thoughts on longer term caution, coffee and grains in commodities, the latest expansion plans abroad from TSMC, weak housing news but strong housing stocks & more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next: Pietro Beccari Will Be The Louis Vuitton’s CEO, Departures Several Top Executives At Rivian| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Market showing no fear ahead of US CPI | Saxo Group (home.saxo)
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

The Members Of The European Central Bank Remain Hawkish So The ECB Will Raise Rates At The February Meeting By 50 Points

InstaForex Analysis InstaForex Analysis 12.01.2023 10:50
The European Central Bank continues to demonstrate a hawkish attitude amid contradictory data on inflation growth in the eurozone. Last week, a report on the growth of the consumer price index was published. The overall CPI was in the red zone, falling to 9.2% (with a forecast decline to 9.6%). While core inflation, excluding volatile energy and food prices, on the contrary, continued to gain momentum, rising to a record 5.2%. Energy prices  The structure of the report suggests that the growth of energy prices slowed down in December to almost 26%. While food, alcohol and tobacco rose in price by almost 14%, services increased in price by 4.4%, and industrial goods by 6.4% (in November – by 6.1%). This suggests that the decline in overall inflation is due to warm weather in the European region: the purchase price of gas in European countries in December was almost five times lower than in August. The cheapening of the blue fuel had an impact on electricity prices, as many European power plants produce electricity using gas. In particular, in France, the purchase price of electricity at the end of August exceeded €1,000 per megawatt-hour, and at the end of last month it dropped to €240. Germany also contributed to the slowdown in overall inflation: last month, German government provided a one-time compensation for electricity bills. The slowdown in the overall CPI In other words, the slowdown in the overall CPI was not due to the ECB but Mother Nature, which spoils the European region this year with warm days. The growth of the core consumer price index indicates that the problem of high inflation has not only not been resolved, but is getting worse. The ECB Hawkishness Representatives of the European Central Bank understand this very well, and therefore do not lower the degree of intensity in their rhetoric. Moreover, members of the ECB have been sounding clear hawkish signals lately. For example, Latvian central bank governor Martins Kazaks said that he expects a "significant" rate increase at the February and March meetings, after which the steps could become "less as necessary." We are talking about two 50-point rate hikes. The ECB could then slow the pace of monetary tightening to 25 bps. Isabel Schnabel ECB Governing Council member Isabel Schnabel also called for further rate hikes this week, as "inflation will not subside on its own." In turn, Austrian central bank chief Robert Holzmann said there are no signs of weakening market expectations regarding inflation at the moment. However, he added that rates would need to "raise significantly to reach levels sufficiently restrictive to ensure that inflation returns to the target level." His colleague, Bank of Finland Governor Olli Rehn, made a similar statement yesterday, saying that rates should be raised significantly "in the next couple of meetings" to keep inflation in check. The ECB will raise rates As you can see, the members of the European Central Bank remain hawkish, at least in the context of the next two meetings. However, they prefer not to specify where the final point of the current cycle of tightening monetary policy is. For example, French central bank chief Francois Villeroy de Galhau said last week that it was desirable to peak interest rates by summer, "but it's too early to say at what level." At the same time, he stressed that rates will remain at the peak level "for as long as necessary." Thus, now we can say with confidence that the ECB will raise rates at the February meeting by 50 points and very likely by the same amount at the March meeting. This scenario is the base case despite a slowdown in overall inflation in the euro area. EUR/USD Meanwhile, the prospect of a 50-point Fed rate hike at the February meeting is highly questionable. For now, the CME FedWatch Tool says there is a 74 percent chance of a 25 basis point rate hike next month. If today's U.S. inflation report comes out at least at the predicted level (not to mention the red zone), the probability of the 25-point scenario will increase to 80%–90%. In this case, the difference in interest rates between the U.S. and Europe will continue to shrink, and this circumstance will provide background support to the euro. However, this fundamental factor will play on the side of the euro even before the actual implementation—the hawkish attitude of the ECB against the background of slowing inflation in the United States will allow buyers of EUR/USD to organize another offensive upward, to the borders of the 8th figure. Technically, the pair is currently testing the upper line of the Bollinger Bands indicator on the daily chart, which corresponds to 1.0750. Overcoming this target will open the way not only to the next price barrier at 1.0800, but also to the main resistance level at 1.0930 (the upper line of the Bollinger Bands indicator, coinciding with the upper boundary of the Kumo cloud on the W1 timeframe). A slowdown in U.S. inflation, a softening of the Fed's rhetoric, and an increase in the hawkish mood of the ECB will create the necessary information background for the implementation of the upward scenario.   Relevance up to 09:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332090
The USD/JPY Price Seems To Be Optimistic

The USD/JPY Pair Drop To 130, The Aussie Pair Keeps Trading Above 0.69$

Kamila Szypuła Kamila Szypuła 12.01.2023 14:22
Financial markets started Thursday with optimism putting some pressure on the US dollar, although activity remained subdued ahead of the release of the US Consumer Price Index (CPI). Traders, meanwhile, seem reluctant to place aggressive bets and prefer to wait for the release of US consumer inflation data on Thursday. The headline CPI is expected to rise by 6.5% in the 12 months to December, much better than previously at 7.1%, and further decline from a multi-year high of 9.1% recorded in June. Investors will pay particular attention to the underlying reading, which excludes fluctuations in food and energy prices. Core inflation peaked at 6.6% y/y in September, falling to 6% in November. A key US CPI report should clarify whether the Fed will need to raise its interest rate target above 5% to curb stubbornly high inflation. December inflation data from the US may significantly affect the valuation of the US dollar. Apart from inflation data, the US will publish preliminary jobless claims data for the week. USD/JPY The yen gained ground on Thursday amid expectations that the Bank of Japan will review the side effects of monetary easing. Due to the strengthening of the yen, USD/JPY fell to the level of 130.7030. Overall, the yen also indirectly benefited from the more dovish move markets are pricing in for the Federal Reserve. Markets are clearly pricing in a Fed turnaround that will come early after weaker US economic data earlier this month. The upcoming BOJ meeting, expectations of an upward revision of the bank's inflation forecast, and the imminent announcement of a new BOJ chairman are also likely to fuel expectations for a change in policy. Read next: The New Disney Drama: Disney Is Opposing Activist-Investor Nelson Peltz| FXMAG.COM EUR/USD The EUR/USD daily chart has seen an impressive series of green candles this year, extending its rally from deep below par that started in September 2022. EUR/USD keeps trading above 1.0750. On the “EUR” side, further interest rate hikes from the European Central Bank are expected. The bottom line is that expectations for future interest rate support will continue to favor the euro. GBP/USD The GBP/USD Pair lost the momentum of its rebound and dropped below 1.2150 ahead of Thursday's US session amid cautious market sentiment. The short-term technical outlook suggests that GBP/USD's bullish bias remains intact. What's more, the pound fell to its lowest level since late September on Wednesday as the rising euro hit a seven-month high amid hawkish messages from European Central Bank officials. AUD/USD In the Asian session, the pair traded above 0.69, only in the European session did it drop below this level. Currently, the pair of the Australian has regained strength and again trades above $0.6910 The Australian and New Zealand dollars rose on Thursday as markets assumed incoming US data would confirm a cooling in inflation, while Australia boasted a surprisingly large trade surplus amid falling imports. Local data showed how Australia continued to benefit from being a net exporter of resources when commodity prices were still relatively high. The country's trade surplus rose to A$13.2bn ($9.13bn) in November, well above forecasts. Source: dailyfx.com, finance.yahoo.com, investing.com
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

All Eyes On US Inflation Data!, Bitcoin Rebounds

Swissquote Bank Swissquote Bank 12.01.2023 14:29
Today is the most important day of the trading week, in terms of economic data release, as the US will reveal its latest CPI update, and it could be a make-or-break moment for the market sentiment. Consumer price inflation  Consumer price inflation in the US probably eased to 6.5%, from 7.1% printed a month earlier. Core inflation fell to 6% at last release, from a peak of 6.6% printed for October, and is expected to fall further to 5.7% y-o-y.US equities extended gains yesterday, on hope that softening inflation will further boost the Fed doves. Today’s US inflation data will help move things, to one side or the other. But keep in mind that there is room for decent hawkish pricing given that the money markets still price that the US interest rates will top around 4.9%, while the Fed officials are struggling to convince investors that they will go above 5%. Watch the full episode to find out more! 0:00 Intro 0:26 All eyes on US inflation data! 3:27 Why inflation may not ease smoothly this year? 5:51 Some bank analysts see EURUSD at 1.15 7:01 Short sterling? 7:51 Bitcoin rebounds as FTX finds $5bn to repay customers 8:36 Why bonds are better alternative for dovish Fed bets? Read next: The USD/JPY Pair Drop To 130, The Aussie Pair Keeps Trading Above 0.69$| FXMAG.COM Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #CPI #inflation #Fed #China #expectations #USD #EUR #GBP #JPY #crude #oil #copper #Bitcoin #FTX #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange The Dow Jones Rose 0.64% To Hit A Monthly High

InstaForex Analysis InstaForex Analysis 13.01.2023 08:00
At the close on the New York Stock Exchange, the Dow Jones rose 0.64% to hit a monthly high, the S&P 500 index rose 0.34%, the NASDAQ Composite index rose 0.64%. Dow Jones The leading performer among the components of the Dow Jones index today was Walt Disney Company, which gained 3.48 points or 3.61% to close at 99.81. Salesforce Inc rose 4.70 points or 3.24% to close at 149.60. Boeing Co rose 6.29 points or 3.02% to close at 214.32. Shares of Coca-Cola Co were the leaders of the fall, the price of which fell by 0.80 points (1.29%), ending the session at 61.21. Walgreens Boots Alliance Inc was up 1.24% or 0.46 points to close at 36.66, while Walmart Inc was down 0.90% or 1.32 points to close at 144. 81. S&P 500 The top gainers among the S&P 500 index components in today's trading were American Airlines Group, which gained 9.71% to 16.83, United Airlines Holdings Inc, which gained 7.52% to close at 51.30, and Cognizant Technology Solutions Corp Class A shares, which gained 5.85% to close the session at 65.10. The least gainers were Charles River Laboratories, which shed 5.95% to close at 232.25. Bio-Techne Corp lost 5.14% to end the session at 82.17. Quotes of Illumina Inc decreased in price by 5.05% to 193.75. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Arrival Vault USA Inc, which rose 100.00% to hit 0.54, Akerna Corp, which gained 66.67% to close at 1.65, and also shares of Moxian Inc, which rose by 73.32%, ending the session at around 1.04. The leading gainers were Oramed Pharmaceuticals Inc, which shed 76.46% to close at 2.54. Atlis Motor Vehicles Inc lost 35.32% to end the session at 6.52. Quotes of Universe Pharmaceuticals Inc decreased in price by 25.30% to 0.90. Numbers On the New York Stock Exchange, the number of securities that rose in price (2353) exceeded the number of those that closed in the red (733), while quotes of 91 shares remained virtually unchanged. On the NASDAQ stock exchange, 2633 companies rose in price, 1063 fell, and 181 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 10.72% to 18.83, hitting a new 6-month low. Read next: The USD/JPY Pair Drop To 130, The Aussie Pair Keeps Trading Above 0.69$| FXMAG.COM  Gold Gold futures for February delivery added 1.17%, or 22.05, to $1.00 a troy ounce. In other commodities, WTI crude for February delivery rose 1.20%, or 0.93, to $78.34 a barrel. Futures for Brent crude for March delivery rose 1.50%, or 1.24, to $83.91 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.91% to 1.09, while USD/JPY shed 2.43% to hit 129.24. Futures on the USD index fell 0.94% to 101.96.   Relevance up to 03:00 2023-01-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/308486
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

The General Trend Of The USD/JPY Pair Is Still Growing

InstaForex Analysis InstaForex Analysis 13.01.2023 08:04
The Australian dollar rose 61 pips on Thursday due to good data on lower US inflation. The 0.7048 target level is about 80 pips away. It is possible that the price will reach that level, but the possible divergence from this level will be much stronger than the one from the current levels. This morning's figures from Australia and China are pessimistic. Home loans in Australia fell by 2.0% over the month, real estate investment fell by 3.6%, China's trade balance for December increased from $69.8 billion to $76.2 billion, but at the expense of a strong export decline of 10.0% y/y (imports fell by 9.8% y/y). As a consequence, we expect the price to settle at the support of 0.6917. Consolidation under the level, which will not happen today, will open the next target at 0.6800. But for now we are watching the development of moderate growth. On the four-hour chart, a price divergence has formed with the Marlin oscillator. The general trend is still growing. After the end of the correction, the price can rise to the 0.7048 target.     Relevance up to 03:00 2023-01-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332180
The Pound Is Now Openly Enjoying A Favorable Moment

The British Pound (GBP) Will Not Strengthen In The Coming Days

InstaForex Analysis InstaForex Analysis 13.01.2023 08:07
On Thursday, under overall market pressure, while the dollar index fell by 0.95%, the British pound rose by 62 points. The signal line of the Marlin oscillator reached the limit of the ascending trend line - the risk of a downward reversal of the oscillator from the current values has increased. Several British macro data will be released today with all the indicators showing negative outlook; GDP for November is expected to fall by 0.2%, the trade balance might drop from -14.5 billion GBP to -14.9 billion GBP, November industrial production may show the decline of 0.2%, the construction sector production might contract by 0.3%. Even on such an indicator as the misuse of mortgages may worsen the quarterly index from -£5.1bn to -£7.9bn. As a result, I don't expect the British pound to strengthen in the coming days. In the best case, it may settle at the support of 1.2155 (low of May 13, high of November 24). In the future, in case the local trend for weakening the dollar continues, the pound can rise to the target level of 1.2410 (high on June 16). On the four-hour chart, as we expected in the previous review, the divergence has formed. But in the current environment, where markets had a strong bullish momentum yesterday with the release of the US inflation report, the divergence looks weak and might turn into a sideways swing. I expect the price consolidation to end and further developments next week.   Relevance up to 03:00 2023-01-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332182
The Euro May Gradually Climb To The Target Level

The EUR/USD Pair Is Expected To Move Upside

InstaForex Analysis InstaForex Analysis 13.01.2023 08:10
Yesterday's US inflation data came out as forecasted. Despite a 0.3% y/y rise in the monthly core CPI, the index declined to 5.7% from the previous 6.0% y/y and the CPI was 6.5% y/y against the previous 7.1% y/y. The S&P 500 stock index was up 0.34%, the VIX volatility index, otherwise known as the risk index, was down 10.72%, and the yield on 5-year US government bonds fell from 3.66% to 3.53%. All this lifted the euro by more than 90 points so it is able to continue the upward movement. The target level is 1.0990, which is the Fibonacci reaction level (not the standard one) of 314% from the August 28-October 4 movement. Read next: The USD/JPY Pair Drop To 130, The Aussie Pair Keeps Trading Above 0.69$| FXMAG.COM There could also be a subsequent market reversal to a medium-term trend below parity, perhaps a reversal divergence will start to form from 1.0990. But for the time being, I expect EUR to rise until it grows tired of doing so. On the four-hour chart, a weak divergence is formed, which is a sign of forthcoming consolidation. Upon completion of the consolidation, I expect the pair to continue rising. The general trend on this chart is an uptrend.   Relevance up to 03:00 2023-01-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332184
Bank Indonesia Maintains Unchanged Rates Amidst Inflation Stability and IDR Pressure

The US Data Did Not Work Against The Dollar In All Cases

Paolo Greco Paolo Greco 13.01.2023 08:27
M5 chart of EUR/USD On Thursday, EUR/USD continued to move mainly sideways until the US inflation report was released. We learned that the inflation rate fell again in December, to 6.5% on an annual basis. Just as I mentioned: the stronger and faster inflation falls, the more likely it is that the dollar will fall as well. The logic is simple: the Federal Reserve has less and less reason to continue raising rates at all. Thus, yesterday was quite logical in terms of the pair's movements. But it does not mean that the euro was growing logically and reasonably a few weeks before that. Remember that during the last several months we did not even witness a proper correction. It cannot rise for months just because of one factor, right? But on the other hand, expecting the euro to fall is a fundamental hypothesis. If it is not confirmed by concrete technical signals, you should not work it out. All of Thursday's trading signals were formed after the release of the inflation data. That is the time when the price began to "fly" in all directions. In fact, the only strong and clear signal was the rebound from 1.0736, but it was very difficult to enter the market. The last buy signal around 1.0806 was produced when the market calmed down more or less, but at the same time, it was too late. The best option was not to enter the market yesterday. Read next: GM, Ford, Google And Solar Producers Would Work Together To Set Standards For Increasing The Use Of VPPs| FXMAG.COM COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 29,300, whereas the number of short positions fell by 13,100. Thus, the net positions decreased by 16,200. The number of long positions is 130,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 44,000 (671,000 vs. 627,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD continues the upward movement, which started last Friday. The movement is a consequence of the US data, which did not work against the dollar in all cases. But the market interpreted all the reports in favor of the euro, so we see a continuous upward movement. On Friday, the pair may trade at the following levels: 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, 1.0938, 1.1036, as well as the Senkou Spahn B (1.0597) and Kijun Sen (1.0630). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 13, only the Consumer Sentiment Index will be released in the US and Industrial Production in the EU. Not the most important reports at this time. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate       Relevance up to 05:00 2023-01-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332192
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

During The US Trading Session The GBP/USD Pair Sharply Changed Its Direction

Paolo Greco Paolo Greco 13.01.2023 08:30
M5 chart of GBP/USD On Thursday, GBP/USD also showed high volatility and "flew" in different directions. Basically, at the end of the day, we can say that the pound's growth was logical and justified since US inflation continues to decline and is already at 6.5%. Of course, it is still far away from 2%, but the index is confidently moving towards this target and can reach it as early as in 2023. Thus, the Federal Reserve may start to cut rates as early as this year, although several members of the Monetary Committee said that rates will remain high throughout this year. All of these factors together mean only one thing: the Fed will continue to slow down the pace of monetary tightening. But we can't say the same about the Bank of England. There are serious concerns that the BoE will not be able to raise rates "to the bitter end," but so far the British central bank is expected to tighten more in 2023 than the Fed. Speaking of trading signals, yesterday's situation was very complicated, as the pair sharply changed its direction during the US trading session, and there was only one signal in the European session - a bounce from 1.2185. This signal could have been taken by a short position, but it had to be closed manually before the inflation data was released. The profit on it was about 35 pips. Further we should think about entering the market only after the second rebound from 1.2106, when traders calmed down more or less and "digested" the latest information. After this signal, the pair showed another movement of 100 points, so traders could get a good profit, wherever they closed the long. You shouldn't have traded in the first couple of hours after the report was released. COT report The latest COT report showed an increase in bearish sentiment. During the given period, non-commercial traders opened 3,000 long positions and as many as 12,400 short positions. Thus, the net position fell by about 9,400. This figure has been on the rise for several months, and the sentiment may become bullish in the near future, but it hasn't yet. Although the pound has grown against the dollar for the last few months, from a fundamental perspective, it is still difficult to answer why it keeps rising. On the other hand, it could fall in the near future (in the mid-term prospect) because it still needs a correction. In general, in recent months the COT reports correspond to the pound's movements so there shouldn't be any questions. Since the net position is not even bullish yet, traders may continue to buy the pair over the next few months. Non-commercial traders now hold 43,600,000 long positions and 63,900 short ones. I remain skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD rose sharply, tried to correct, and increased again. At this time, a new uptrend may emerge, but there is no trend line or channel at this time. On January 13, the pair may trade at the following levels: 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259, 1.2342, 1.2429-1.2458. The Senkou Span B (1.2023) and Kijun Sen (1.2162) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Friday, the UK will release its GDP (monthly) and Industrial Production reports. In the US, we only have the Consumer Sentiment Index. You should focus on the British GDP but it is hard to call that report important as well. Nonetheless, some market reaction should follow. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group. Read next: GM, Ford, Google And Solar Producers Would Work Together To Set Standards For Increasing The Use Of VPPs| FXMAG.COM   Relevance up to 05:00 2023-01-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332194
Gold Traded Softer In Response To Dollar Strength, The Bank Of Japan Left Its Policy Levers Unchanged

A Softer US Inflation Data Helps Gold, The Japanese Yen Was The Biggest Gainer

Saxo Bank Saxo Bank 13.01.2023 09:03
Summary:  A Fed downshift to 25bp hikes may be firmer in the cards with the in-line 0.3% M/M increase in the core CPI bringing the measure to 3.1% on a three-month annualized basis. Yields on the 10-year Treasury notes plunged 10bps to 3.44% and the S&P 500 closed just below its 200-DMA. The Japanese Yen was the biggest winner in the currency space on speculation for further policy shifts by the BOJ next week. Bank of America, JPMorgan Chase, and Citigroup report Q4 earnings today.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) advanced on CPI prints supporting a Fed downshift U.S. stocks climbed, following CPI data that support the Fed to slow the pace of rate hike to 25bps in February. Nasdaq 100 gained 0.5% and S&P 500 edged up 0.3%. Closing at 3983.17, the S&P 500 has its 200-day moving average of 3,984.39 within reach. Energy, rising 1.9, was the best-performing sector within the S&P 500 as WTI crude oil climbed over 1% to USD78.29. Interest rate-sensitive REITS was the other top winning sector. American Airlines (AAL:xnys) surged 9.7% on upbeat revenue growth and earnings guidance and a debt reduction plan.   US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rallied, yields on the 10-year sliding to 3.44% After choppy initial reactions when traders digested the CPI prints, U.S. Treasuries advanced and their yields slid decisively. The headline and core CPIs in December were in line with expectations. Investors noted the decline of the core inflation on a three-month annualised basis to 3.1% and the softness in core services excluding shelter and concluded that the Fed is on track to downshift to a 25bp hike in February. Comments from Fed’s Harker (voter) that “hikes of 25bps will be appropriate going forward” added conviction to the notion. The strong results from the USD18 billion 30-year auction saw yields on the long end richer further. Yields on the 10-year finished the session 10bps lower to 3.44% and those on the 2-year were 4bps lower to 4.12%. In Australia and Asia today focus is on; risk-on assets, Oil, Iron Ore and Copper charging The Australian share market (ASXSP200.I) opened 0.8% higher, with most other Asian markets are set to open in the positive. Ahead of Australia’s company reporting season kicking off next month, we’re thinking we could likely see many commodities companies upgrade their outlooks for 2023, expecting higher earnings as many resources prices have quickly entered bull markets amid China easing restrictions sooner than expected. However today, eyes will once again be on commodities and affiliated equites; as the oil price jumped for the 6th day, moving up to $78.30, after rising 1.1%, The copper price rose 0.1% to $4.17 on the COMEX market in New York. Iron ore (SCOA) is 0.6% higher at $123, a new 6-month high. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) traded sideways on profit taking After making a new six-month high, Hang Seng Index reversed and pared gains to finish Thursday only 0.4% higher. Profit-taking weighed on recent policy beneficiaries, such as mainland Chinese property developers, domestic consumption names, mega-cap internet stocks, and Macao casino operators. Country Garden, down 6.3%, was the biggest loser within the Hang Seng Index. Shares of EV makers bucked the market trend of retracement to advance, led by BYD (01211:xhkg) which was up 5.3% and was the top winner among Hang Seng Index constituents. NetEase (09999:xhkg) outperformed other China internet names with a 3.7% gain on collaborating with the state-owned CCTV to broadcast the Lunar New Year gala on the company’s metaverse platform. FIT Hong Teng (06088:xhkg), a subsidiary of Foxconn, soared 17.2% on speculation that the company might replace GoerTek (002241:xsec) to assemble AirPods for Apple. In A-shares, telecommunication, electric equipment, EV, non-bank financials, and new energy outperformed as the domestic consumption space retraced. CSI300 climbed 0.2%. FX watch; Australian dollar is on the heels of 0.70 US After US CPI data showed US prices have continued to fall, the US dollar vs the AUD continued to fall, taking its fall from its peak to 10%. Inversely, Australia's trade balance data released yesterday, as well as Aussie retail and Aussie CPI earlier in the week, plus the all-important easing of China’s restrictions sooner than expected, all support upside in the AUD. As such the Aussie versus the US rallied to new four-month highs, 69.67 US. The next resistance level, the psychological 70.00 US is the next hurdle to get over. Aussie home loan data released today is the next catalyst to watch. If it’s stronger than expected, the AUDUSD could march on up. FX: USDJPY crumbles on weaker USD and BOJ speculation The Japanese yen was the biggest gainer on Thursday, boosted both by lower US yields as well as speculation around a policy tweak by the Bank of Japan at the next week’s meeting. USDJPY slid from 132.50 to 129 handle. Japanese 10-year bonds continued to test the upper limit of the permitted trading band, and rose higher to 0.53% in early Asian hours testing the central bank’s resolve on a dovish policy. EURUSD broke above 1.08 to fresh highs of 1.0867 with expectations of Fed-ECB divergence setting a bullish tone. Crude oil (CLG3 & LCOH3) rounding in at about 6% gains for the week Crude oil prices gained further on Thursday amid the risk on tone set by further softening in inflation pressures. China’s steady commitment to reopen the economy and provide a stimulus to the economy continued to support sentiment this week, along with Chinese buyers become more active in the physical market as import quotas were increased. WTI futures rose to $79/barrel while Brent moved above $84/barrel. Gold (XAUUSD) reached $1900 on expectations of Fed downshift Gold saw another rally with a softer inflation print in the US bolstering the case for a further downshift in the Fed’s rate hike trajectory. A broadly dovish tone from the Fed members also saw a plunge in US yields and weighed on the USD, helping support gains in Gold as well. Silver outperformed gold, and platinum and palladium gained as well.    Read next: GM, Ford, Google And Solar Producers Would Work Together To Set Standards For Increasing The Use Of VPPs| FXMAG.COM What to consider? US CPI boosts the case for a Fed downshift A further slowdown was seen in US CPI last night, with the headline sliding to 6.5% YoY as expected from 7.1% YoY in November, stepping into the disinflationary territory on a m/m basis with a negative 0.1% print from +0.1% previously. Core inflation also eased in-line with expectations to 5.7% YoY in December from 6.0% YoY previously but still higher on m/m basis at 0.3% from 0.2% in November. Services inflation was still higher, being the more sticky component of inflation, but with six consecutive months of softening in inflation, the Fed could take some comfort that its tightening moves are working. Market is pricing in another step down at the Fed’s next decision on Feb 1 to 25bps rate hike, but the terminal rate pricing still stands at sub-5% levels compared to a unanimous voice from the FOMC members calling for rates over 5%. Meanwhile, US jobless claims unexpectedly fell to 205,000 from a revised 206,000 the previous week, suggesting labor market is still tight. Continuing claims also surprisingly improved, dropping to 1.63 million from 1.7 million. Fed members also signal a further downshift Patrick Harker (voter) said 25-bp increases "will be appropriate going forward" after data showed inflation moderating. Thomas Barkin (non-voter) also emphasised that Fed has more work to do, although he signalled that "it makes sense to steer more deliberately." Bullard was relatively more hawkish, but he also doesn’t vote this year. He said that he favors getting the benchmark above 5% as soon as possible before holding. US Bank earnings kickstart today US banking earnings kick off the Q4 earnings season today, most notably from Bank of Bank of America, JPMorgan Chase, and Citigroup. Analysts remain muted on US banks with earnings expected to show another quarter of negative growth compared to a year ago. Peter Garnry, Saxo’s Head of Equity Strategy, wrote in his recent article that the interest rate shock had been bad for banking earnings and activity levels across the investment banking division. As credit portfolios have an average maturity of around seven years banks will slowly begin rolling their assets into higher interest rate levels which will begin to accelerate their net revenue figures improving profitability over time. If the US economy just experience a shallow recession in real terms and strong nominal growth then US banks should be considered as a good tactical trade over the coming years. CPI and PPI inflation remained low in China CPI in China rose to 1.8% y/y in December from 1.6% in November, in line with expectations. The year-on-year growth was due to a low base. On a month-on-month basis, CPI was unchanged in December. Excluding food and energy, core CPI came in at 0.7% y/y in December, edging up slightly from 0.6% y/y in November but remaining subdued. The change in PPI rebounded less than expected to -0.7% y/y versus -0.1% expected and -1.3% y/y in November. Deflation in the processing sector narrowed to -2.7% Y/Y in December from -3.2% Y/Y in November. The mining component in the PPI swung to 1.7% Y/Y in December from -3.9% Y/Y in November. TSMC (TSM:xnys) Q4 earnings beating estimates, expecting revenue decline and CAPEX cuts in 2023 The world’s largest foundry of semiconductors beats on net income in Q4 driven by a gross margin of 62.2% versus the 60.1% expected. TSMC says the company is to face margin headwinds in 2023 with revenue growth slowing down. For Q1 2023, the management expects revenues to fall to between USD16.7 billion and USD17.5 billion from USD17.57 billion in Q1 2022. CAPEX in 2023 is expected to be between USD32 billion and USD36 billion, against $36bn in 2022. The company is considering a second manufacturing plant in Japan and a new automotive chips plant in Europe. It has also expanded its 28nm production in China and is planning to mass produce its new 2nm in 2025 in its facilities in Taiwan. TSMC expects that revenues of the global semiconductor industry, excluding memory chips, to fall 4% in 2023. UK November GDP to signal an incoming recession UK’s monthly GDP numbers are due this week, and consensus expects a contraction of 0.3% MoM in November from +0.5% MoM previously which was boosted by the favourable M/M comparison vs. September, which was impacted by the extra bank holiday for the Queen’s funeral. The economy is clearly weakening, and another quarter of negative GDP print remains likely which will mark the official start of a recession in the UK.   For a look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Softer US CPI supports Fed downshift, Bank earnings ahead - 13 January 2023 | Saxo Group (home.saxo)
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

CPI In The US Slowed Down Further, Falling To 6.5% y/y With Expectations

Saxo Bank Saxo Bank 13.01.2023 09:13
Summary:  The market churned wildly in the wake of perfectly in-line US CPI data yesterday after perhaps hoping for even stronger signs of decelerating inflationary pressures than the data delivered. Alas, in the end the market celebrated the data, sending US treasury yields and the USD lower and risk sentiment higher, with the S&P 500 testing its 200-day moving average. Gold touched $1,900 per ounce.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities chopped around after the in-line December CPI data release, with the S&P 500 index taking a stab at trading above the 4,000 level and the 200-day moving average just above that level for the March future (and at 3,984 for the cash index – the cash index never traded north of 4,000 yesterday, peaking at 3997). For its part, the Nasdaq 100 has been interacting with the prior support areas now resistance around 11,550. Interesting days and weeks ahead as we trade up into pivotal technical levels just ahead of earnings season. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) Hang Seng Index had a lackluster session on Friday trading sideways around yesterday’s close. Mainland’s CSI300 advanced 0.8% led by a bounce in domestic consumption, brokerage, and insurance names. China’s exports in December fell 9.9% in U.S. dollar terms from a year ago and imports declined 7.5%. The Chinese authorities have reportedly drafted an action plan to help “quality” property developers to strengthen their balance sheets. Shares of Chinese developers however have generally retraced and registered modest losses. The three Chinese state-own oil companies traded in Hong Kong advanced between 1% and 3% on higher oil prices. NetEase, rising 3%, stood out among China internet names. FX: USD drops on in-line CPI data. JPY strongest on BoJ expectations, falling yields The US dollar fell after a chaotic knee-jerk reaction to in-line CPI data, as the market may have been leaning for a softer-than-expected surprise. In the end, US yields dropped and risk sentiment rallied anew, the ideal combination for USD bears. The selling was most intense for the balance of the day in USDJPY, which probed new cycle lows below 129.00 and much of the move coming ahead of the US data as the market was busy absorbing the news flow from earlier in the day on the potential for a shift in BoJ policy at next Wednesday’s BoJ meeting. Japanese 10-year bonds continued to test the 0.50% upper limit of the permitted trading band, rising to above 0.57% by late Asian hours hours and testing the central bank’s resolve. EURUSD broke above 1.08 to fresh highs of 1.0867 with expectations of Fed-ECB divergence setting a bullish tone. EURUSD also cleared the prior highs and traded as high as 1.0868, while AUDUSD touched a new high of 0.6983, just ahead of the key 0.7000 level. Crude oil (CLG3 & LCOH3) seen heading for a 6% weekly gain Crude oil has rallied strongly this past week on China’s improving outlook and after US inflation continued to cool, thereby supporting the general level of risk appetite, not least through a weaker dollar. China, the world's biggest importer is expected to hit record consumption this year, a development already gathering pace with Chinese buyers becoming more active in the physical market as import quotas are increased. Gains in the energy sector being led by gasoline after its premium over WTI rose to the highest since August. In the short-term WTI may now find some resistance at $80, where the 50-day moving average is lurking while in Brent that level can be found at $84.75. Gold trades near $1900 as cooling inflation softens up the dollar Gold is heading for a fourth weekly gain as US inflation continues to ease thereby supporting a further downshift in the Fed’s rate hike trajectory. A broadly dovish tone from Fed members also supported gold as the dollar and bond yields softened. Trading just below $1900 and within an area of resistance, today’s price action ahead of the weekend will be important in order to gauge the underlying strength. Physical demand may struggle in the short term as traders warm to higher prices, not least in India where demand according to Reuters plunged by 79% in December from a year earlier. In addition, we have yet to see demand for ETF’s, often used by long-term focused investors, spring back to life with total holdings still hovering near a two-year low at 2923 tons. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) drop, long yields perched near cycle lows The in-line US CPI data release yesterday saw a choppy market but eventually saw treasuries strongly bid later in the session, sending the 2-year to a test just below the prior 4.13% low at one point and the US 10-year yield toward the 3.40% pivot low from back in early December. A 30-year T-bond auction saw the strongest bidding metrices since last March. Read next: GM, Ford, Google And Solar Producers Would Work Together To Set Standards For Increasing The Use Of VPPs| FXMAG.COM What is going on? US December CPI in-line with expectation, boosts the case for a Fed downshift A further slowdown in US CPI as expected yesterday, as the headline slid to 6.5% YoY as expected from 7.1% YoY in November, stepping into the disinflationary territory on a m/m basis with a negative 0.1% print from +0.1% previously. Core inflation also eased in-line with expectations to 5.7% YoY in December from 6.0% YoY previously but still higher on m/m basis at 0.3% from 0.2% in November. Services inflation was still higher, being the stickier component of inflation, but with six consecutive months of softening in inflation, the Fed could take some comfort that its tightening moves are working. The market is pricing in another step down at the Fed’s next decision on Feb 1 to 25bps rate hike, but the terminal rate pricing still stands at sub-5% levels compared to a unanimous voice from the FOMC members calling for rates over 5%. Meanwhile, US jobless claims point to a tight labour market, unexpectedly falling to 205,000 from a revised 206,000 the previous week. Continuing claims also surprisingly improved, dropping to 1.63 million from 1.7 million. Resources companies: earnings upgrades could be on the cards Commodities companies are likely to start to upgrade their outlooks for 2023, ahead of reporting full year results in February. Iron ore, copper and aluminium companies in particularly are likely to upgrade their 2023 earnings as these respective commodity prices quickly entered bull markets +64%, +30%, and +20% respectively from their lows as China eased restrictions sooner than expected. The Iron ore (SCOA) price as an example, rose 2% alone in Asia today, hitting a new 6-month high. BHP shares in Australia hit a new record high of A$49.64 while Rio Tinto trades about 3% shy of its record, with both iron ore, and copper giants trading higher in anticipation of higher free cashflow in 2023. WASDE report sees corn prices jump the most since September The USDA on Thursday unexpectedly cut its outlook for US domestic production and available stocks of both corn and soybeans, a sign that an ongoing drought from last year may continue to underpin prices. The worst Argentinian drought in 60 years also led to a downgrade in the outlook for soybeans and corn production, some of that being partly offset by an expected bumper harvest in Brazil. One bright spot was wheat where the USDA raised its outlook for global production. Following the WASDE report corn (ZCH3) rose 2.5%, soybeans (ZSH3) 1.8% while wheat (ZWH3) was up by less than 1%. Sweden December CPI hits new cycle highs as weak krona aggravates inflation The December headline number came in at +2.1% MoM and +12.3% YoY vs. 1.8%/12.0% expected, respectively and vs. 11.5% YoY in Nov. The core data was +1.9% MoM and +10.2% YoY vs. +1.6%/+9.8% expected, respectively and vs. +9.5% YoY in Nov. What are we watching next? Bank of Japan meeting next Wednesday shaping up as major event risk The recent news flow and rumor mill sees the Bank of Japan announcing further tweaks to its policy next Wednesday at its meeting. Ironically, the anticipated further widening of its yield curve control “band” (de facto more of a “cap”) on 10-year JGB’s comes as long yields are dropping sharply elsewhere, accentuating the tightening of spreads between Japanese yields and those in, for example, Europe and the US. Earnings to watch The Q4 earnings season kicks off today with banking earnings from Bank of America, JPMorgan Chase, and Citigroup with consensus expecting earnings to continue contracting among US banks before coming back to growth in 2023. The key uncertainty is credit quality in 2023 as it is linked to the degree of a recession or maybe no recession at all in the US economy. With higher interest rates level expectations are that banking revenue will slowly begin to accelerate and if high interest rates persist for an extended period, the longer-term growth for banks could be quite attractive. In addition, US banks have extended credit at the fastest pace in 2022 since the year leading up to the Great Financial Crisis. Overall, the Q4 earnings season is likely going to see an extension of value and tangible companies performing better than intangible-driven companies. Today: DiDi Global, Aeon, Bank of New York Mellon, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, UnitedHealth, BlackRock, Delta Air Lines, First Republic Economic calendar highlights for today (times GMT) 1000 – Eurozone Nov. Trade Balance 1000 – Euro zone Nov. Industrial Production 1330 – US Dec. Import Price Index 1500 – US Fed’s Kashkari (Voter 2023) to speak 1500 – US Jan. Preliminary University of Michigan Sentiment 1520 – US Fed’s Harker (Voter 2023) to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – January 13, 2023 | Saxo Group (home.saxo)
Rates Spark: Action at Both Ends of the Curve - US 10yr Treasury Yield and European Rates

The USD/INR Pair Has Been Among The Buyers' Interest

TeleTrade Comments TeleTrade Comments 13.01.2023 09:16
USD/INR has displayed a responsive buying action amid a recovery in US Treasury yields. The 20-and 50-EMAs are on the verge of delivering a bearish crossover around 82.15. A bearish range shift by the RSI (14) has triggered the downside momentum. The USD/INR pair has witnessed a responsive buying action to near the critical support of 81.00 in the Asian session. The Indian Rupee asset has witnessed buying interest again amid a recovery in the US Treasury yields. Also, a marginal rebound in the US Dollar Index (DXY) has supported USD/INR.   Meanwhile, the S&P500 futures have sensed selling pressure as investors have trimmed their longs in Asia after remaining bullish in the past three trading sessions. The US Dollar Index is aiming to shift its auction profile above the critical resistance of 102.00. USD/INR has witnessed a sell-off after a breakdown of the consolidation formed in a range of 82.56-82.96 on a daily scale. On a broader note, the formation of the Double Top chart pattern around 83.29 triggered a bearish reversal. The 20-and 50-period Exponential Moving Averages (EMAs) are on the verge of delivering a bear cross around 82.10, which will be added to the downside bias. Also, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which indicates that the downside momentum is solid. Going forward, a decisive break below the December low at 81.00 will further drag the asset towards September 23 low at 80.78 followed by November 11 low at 80.48. On the flip side, a rebound move above November 21 high at around 82.00 will drive the asset toward December 15 low at 82.42. A breach above the latter will expose the asset to reach January high around 83.00. Read next:  The USD/JPY Pair Drop To 130, The Aussie Pair Keeps Trading Above 0.69$| FXMAG.COM USD/INR daily chart  
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

Higher Oil Prices Will Strengthen The Canadian Dollar (CAD)

TeleTrade Comments TeleTrade Comments 13.01.2023 09:25
USD/CAD has picked strength amid caution in the market mood, however the overall sentiment is still positive. Federal Reserve is likely to trim the pace of policy tightening due to a downward trend in US inflation. A sheer recovery in oil prices led by expectations of economic recovery in China may strengthen the Canadian Dollar. USD/CAD is likely to continue its downside journey toward the horizontal support plotted at 1.3226. USD/CAD has picked strength and has extended its recovery to near the round-level resistance of 1.3400 in the early European session. Earlier, the Loonie asset picked up demand after dropping to near 1.3345 as the risk appetite of the market participants dropped. Investors trimmed their longs in risk-sensitive assets after a stretched rally. The S&P500 futures have sensed selling pressure after remaining extremely bullish consecutively in the past three trading sessions, portraying caution in the overall positive market mood. A decline in the risk appetite has also impacted the demand for US government bonds, which has increased the 10-year US Treasury yields to 3.47%. The US Dollar Index (DXY) has turned sideways below 102.00 after registering a fresh seven-month low at 101.65. Soften US Inflation supports lower interest rate hike by the Fed Thursday’s release of the United States Consumer Price Index (CPI) has provided confidence that the price pressures are softening and the Federal Reserve (Fed)’s blueprint of achieving price stability is operating effectively. From a peak of 9.1%, the annual headline price index has dropped to 6.5% in a few months. Thanks to the declining gasoline and used car prices have decelerated the pace of inflation in the United States economy. A meaningful decline in the US price index has triggered odds of further deceleration in the pace of the interest rate hike already after slowing in December’s monetary policy meeting as Federal Reserve chair Jerome Powell and his teammates are working in the right direction. Philadelphia Fed Bank President Patrick Harker said on Thursday that it was time for future Fed rate hikes to shift to 25 basis points (bps) increments, as reported by Reuters. S&P500 to achieve recovery if Fed trims policy tightening pace The equity domain in the United States economy witnessed an intense sell-off in CY2022 as the Federal Reserve was on a trip of hiking interest rates to achieve the 2% inflation target. The US central bank hiked the borrowing rates with four 75 basis points (bps), two 50 bps, and one 25 bps rate hike announcements to 4.25-4.50%. As inflation is getting under control gradually and the Federal Reserve won’t be so hard on interest rates, it looks like the S&P500 will get back into the picture. The slowdown in the pace of the interest rate hike will allow firms to achieve a sense of optimism, which will support them in executing expansion plans and boosting operations. No doubt, the pace of policy tightening will be trimmed but short-term pain will stay. Philadelphia Fed Bank President Patrick Harker cited that recession in the United States economy is not into the picture but the Gross Domestic Product (GDP) could slow to 1% this year. Oil faces barricades for around $79.00 After a perpendicular rally led by support from recovery in the Chinese economy led by sheer reopening measures and expectations of further sanctioning on Russia, oil prices are facing a halt around $79.00. Moscow is expected to face further sanctions from Western countries for oil supply as nations want to restrict it from getting liquidity to fund arms and ammunition in its fight against Ukraine. Further upside in the oil price looks likely amid a decline in US inflation, which will trim the policy tightening pace of the Fed. Meanwhile, the United States administration has denied oil supply to China from its Strategic Petroleum Reserve (SPR). This will force the Chinese economy to look for alternative suppliers, which could accelerate oil prices in a short span of time. It is worth noting that Canada is a leading exporter of oil to the United States and higher oil prices will strengthen the Canadian Dollar. Read next: The USD/JPY Pair Drop To 130, The Aussie Pair Keeps Trading Above 0.69$| FXMAG.COM USD/CAD technical outlook USD/CAD has delivered a breakdown of inventory distribution placed in a range of 1.3500-1.3700 on a four-hour scale. A breakdown of the inventory distribution phase results in extreme volatility expansion which triggers wider ticks to the downside. The Lonnie asset is likely to find a cushion around the horizontal support plotted from November 15 low at 1.3226. Meanwhile, downward-sloping 20-and 50-period Exponential Moving Averages (EMAs) at 1.3414 and 1.3460 respectively, add to the downside filters. A bearish momentum will be triggered if the Relative Strength Index (RSI) (14) will slip into the bearish range of 20.00-40.00.
Navigating Interconnectedness: Analyzing Banks' Exposures and Funding from Non-Bank Financial Institutions

May And June Will Likely Be A Period Of Uncreased The EUR/HUF Pair Volatility

TeleTrade Comments TeleTrade Comments 13.01.2023 09:43
A gradual depreciation of HUF vs. EUR is likely, but analysts at TD Securities still expect the Forint to record positive returns when accounting for carry. May and June will likely be a period of increased EUR/HUF volatility “We don't see any room for EUR/HUF to permanently move below 400. We think that a gradual HUF spot depreciation in the order of magnitude of 5-10% is in the interest of the NBH. As such, we think that EUR/HUF will gradually move higher through 2023 and end the year at 425.” “Unless EUR/HUF falls notably below 400, the NBH will probably attempt to ease the longer-term rates first, rather than the overnight rate.” “May and June will likely be a period of increased EUR/HUF volatility as EU member states will need to extend the current sanctions on Russia linked to Russia's invasion of Ukraine.”
Hang Seng Index Plummets -2% Amid Weak China Data, Short-Term Trend Intact

The Bank Of England (BoE) Is Coming To The End Of The Current Cycle Of Interest Rate Increases And Support The EUR/GBP Rate

TeleTrade Comments TeleTrade Comments 13.01.2023 09:53
EUR/GBP struggles to gain any meaningful traction and oscillates in a narrow band on Friday. A bleak outlook for the UK economy undermines the Sterling and continues to lend support. The recent hawkish ECB rhetoric underpins the Euro and supports prospects for further gains. The EUR/GBP cross consolidates its recent gains to the highest level since September 29 touched earlier this Friday and seesaws between tepid gains/minor losses through the early European session. The cross remains below the 0.8900 round-figure mark following the release of the UK macro data, though seems poised to prolong the uptrend witnessed since the beginning of this week. The UK Office for National Statistics reported that the economy expanded a modest 0.1% in November as compared to estimates for a 0.2% contraction. This, however, marked a notable slowdown from the 0.5% growth recorded in October. Moreover, weaker-than-expected UK industrial and manufacturing production data adds to the bleak outlook for the UK economy, which has been fueling speculations that the Bank of England (BoE) is nearing the end of the current rate-hiking cycle. This, in turn, could undermine the British Pound and lend some support to the EUR/GBP cross. The shared currency, on the other hand, continues to draw support from more hawkish signals from the European Central Bank (ECB). In fact, several ECB officials spoke this week and confirmed that they will have to raise interest rates further in the coming months to tame inflation. That said, a modest US Dollar recovery keeps a lid on the Euro and holds back traders from placing aggressive bullish bets around the EUR/GBP cross. Nevertheless, the aforementioned fundamental backdrop suggests that the path of least resistance for spot prices is to the upside. Read next: The New Disney Drama: Disney Is Opposing Activist-Investor Nelson Peltz| FXMAG.COM Even from a technical perspective, the overnight convincing breakout through the 0.8865-0.8875 supply zone supports prospects for a further near-term appreciating move. Some follow-through buying beyond the 0.8900 round figure will reaffirm the positive outlook and allow the EUR/GBP cross to reclaim the 0.9000 psychological mark.
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

FX: Weekend Profit-Taking May Pose The Biggest Risk To The EUR/USD Pair

ING Economics ING Economics 13.01.2023 10:06
An on-consensus US December CPI release has allowed the FX markets to revert back to the main event – a potential sea-change in Bank of Japan (BoJ) policy and perhaps plenty of downside in USD/JPY. That is the hottest story in town right now. Soft US consumer sentiment and softening inflation expectations should also keep the dollar bias bearish today Looking at the FX options market, USD/JPY remains the stand-out interest USD: Slip sliding away An on-consensus US CPI release yesterday did not interrupt this year’s narrative of the US Federal Reserve being able to cut rates later in the year and the dollar being able to fall. As our US economist James Knightley wrote in his review of the release, it seems that it is mainly the shelter component holding the core month-on-month reading up here and shelter should start to come sharply lower in the second quarter. Consensus is now behind consecutive 25bp Fed hikes in February and March, followed by a Fed turning dovish over the summer and starting to deliver rate cuts later in the third quarter. The Fed taking rates back towards less restrictive territory remains a tailwind to risk assets – especially to emerging risk assets buoyed by China rebound expectations. Fund flow data show good momentum in Chinese equity ETFs, which is normally very supportive of the renminbi. It is a quiet day for US data, and a soft University of Michigan consumer sentiment plus declining inflation expectations can keep the dollar on the back foot. With USD/JPY expected to stay under pressure into next Wednesday’s Bank of Japan meeting, the DXY can stay biased to the 102.00 area near term. Chris Turner EUR: ECB will be happy with the stronger euro The ECB’s trade-weighted euro has now returned to levels seen last February. And actually, the year-on-year change in EUR/USD is now mildly positive. This will be welcome news to the ECB, where last summer’s 6% YoY EUR/USD decline was contributing to the inflation problem. With short-dated (two-year) USD swaps drifting to new lows for the move, EUR/USD swap differentials continue to move in favour of EUR/USD. And this is a theme which we suspect will play a greater role in EUR/USD pricing over the next 12 months. For today, the eurozone data calendar sees the release of November industrial production and the trade balance. We will also find out how much European banks have repaid of their targeted longer-term refinancing operations (TLTROs) drawings in January. The expectation is around €200bn, with the range being around €50bn-450bn. Any higher-than-expected repayment might be positive for two reasons: i) it would reduce excess euro liquidity and would be supportive of eurozone rates and ii) it might be seen as a sign of confidence as precautionary borrowing is paid back. Let’s see. EUR/USD remains on course for 1.0900 and possibly 1.0950. Weekend profit-taking may pose the biggest risk to EUR/USD, but 1.0750 should now be a good near-term base. Chris Turner JPY: Off to the races Looking at the FX options market, USD/JPY remains the stand-out interest. One-week implied volatility remains at a very high 20% and volatility for the Bank of Japan (BoJ) meeting next Wednesday is priced as high as 40% or a near 1.7% move in spot USD/JPY. As events showed yesterday with the 2% USD/JPY fall, even at these levels the FX options market may still be under-pricing volatility. This huge interest in USD/JPY is understandable. The BoJ may be on the verge of its biggest policy change in decades. Even short-dated JPY Interest Rate Swaps have started to move and are at the highest levels (near 30bp) since 2008! Clearly, USD/JPY has come a long way very fast, but some of the longer-term skews in the FX options market point to a structural shift in the market’s view in USD/JPY. We suspect few will want to stand in the way of the USD/JPY downside. 126.50 looks like the clear near-term target for USD/JPY. Chris Turner CEE: Higher EUR/USD is a small boost for region All the important numbers have already been published this morning. Romania's December inflation fell from 16.8% to 16.4% YoY, more or less in line with market expectations. In Hungary, on the other hand, inflation rose from 22.5% to 24.8 % YoY, less than the market expected. Later today, we will see the final December inflation number in Poland, which surprised in a flash estimate to the downside to 16.6% YoY. We'll also have some secondary data such as the current account in Poland, Czech Republic and Romania, and today, after the end of trading, Fitch will publish a rating review of Poland. The country is currently rated A- with a stable outlook and we do not expect any changes today. Also in Poland, the lower house of parliament will vote on a bill that should help unlock EU money and get access to €35.4bn. On the FX market, we found the CEE currencies almost unchanged after yesterday's US inflation number. However, higher EUR/USD today will give them a chance to erase this week's losses. But still, it shouldn't change much in the picture of a flat week. For the Polish zloty we see a return below 4.680 EUR/PLN and for the Czech koruna levels below 24.00 EUR/CZK. Hungarian inflation numbers should be good news for forint and we can go back below 396 EUR/HUF. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The USD/CAD Pair Has The Strong Downside Momentum

The USD/CAD Pair Has The Strong Downside Momentum

Peter Jacimovic Peter Jacimovic 13.01.2023 10:12
Technical analysis: USD/CAD has been trading DOWNSIDE as I expected and the price has reached the first downside objective at the price of 1.3350. Anyway, I see potential for further downside movement due to the strong downside momentum. Trading recommendation: Due to the strong downside pressure in the background and rejection of the key resistance zone, I see potential for the further downside movement and potential second target. Watch for the potential selling opportunities on the rallies with the downside objective at the price of 1.3250. MACD oscillator is showing fresh downside momentum, which is strong sign that sellers are in control. Key resistance is set at the price of 1.3450 Read next: The New Disney Drama: Disney Is Opposing Activist-Investor Nelson Peltz| FXMAG.COM Relevance up to 09:00 2023-01-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308548
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

The Fed's Unclear Stance Is why Investors Are Holding Back In The Markets

InstaForex Analysis InstaForex Analysis 13.01.2023 10:27
The latest inflation data in the US prompted a rally on Thursday, but it did not lead to a strong rise in stock indices. This is because market players remain worried of the Fed's monetary policy, which continues to be tight and is likely to end with interest rates above 5% this year. The report showed that consumer inflation continued to slow down in the US, with the year-on-year figure falling to 6.5% and the month-over-month data declining to -0.1%. Although Fed Chairman Jerome Powell did his best not to comment on the issue, some members of the bank showed hawkish rhetoric in their speeches, arguing for continued increases in interest rates. This is unclear stance is the reason why investors are holding back in markets. But there is another reason for the moderate market reaction, that is, the Q4 earnings reports from companies. Big US banks will release their data on this, which is likely to set the direction for markets. If they show good earnings and performance reports, yesterday's rally in the stock markets will continue, accompanied with a weakening of dollar. Of course, the uncertainty will remain in markets until the outcome of the Fed meeting on February 1. This means that until then, players will continue to debate on whether the Fed will go for a 0.25% rate hike and then pause or not. Forecasts for today: AUD/USD The pair is declining towards 0.6920. If this level holds, an attempt to rise to 0.7030 will happen. XAU/USD Gold tested the level of 1900.00 for the first time since May 2022. It could correct down to 1885.60, then return to 1915.80. Relevance up to 07:00 2023-01-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332206
China: PMI positively surprises the market

According To Economist At UOB Group Only A Breach of 6.7620 Would Indicate That The USD Weakness Has Stabilized

TeleTrade Comments TeleTrade Comments 13.01.2023 10:37
Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group note that a convincing breach of 6.7000 in USD/CNH remains unlikely. Key Quotes 24-hour view: “Yesterday, we highlighted that USD ‘could break the major support at 6.7500’. We added, ‘the next support at 6.7000 is unlikely to come into view’. Our view was not wrong as USD dropped to a low of 6.7250. Despite the relatively large decline, downward momentum has not improved significantly. While there is room for USD to weaken to 7.0000, a sustained decline below this major support is unlikely today. Overall, only a breach of 6.7620 (minor resistance is at 6.7480) would indicate that the USD weakness has stabilized.” Next 1-3 weeks: “We have expected USD to weaken since last week. As USD fell, we indicated in our most recent narrative from Tuesday (10 January, spot at 6.7850) that USD is likely to weaken further and that a break of 6.7500 will shift the focus to 6.7000. USD took out 6.7500 in NY trade yesterday and plummeted to a low of 6.7250. We continue to expect USD weakness even though after such a large decline over a short period, the prospect of a sustained drop below 6.7000 is not high. On the upside, a breach of 6.7920 (‘strong resistance’ level was at 6.8250 yesterday) would indicate that the USD weakness has run its course.”  
Polish Inflation Declines in July, Paving the Way for September Rate Cut

The UK Economy Is Sputtering, GDP For November Outperformed With a 0.1% Gain

Kenny Fisher Kenny Fisher 13.01.2023 12:54
The British pound is slightly higher on Friday. GBP/USD is trading at 1.2234, up 0.24%. The pound has enjoyed a solid week, with gains of 1.2%. US inflation drops again US inflation continues to decline and slowed for a sixth straight month in December. Headline CPI fell to 6.5%, down from 7.1% and matching the estimate. The drop was driven by lower prices for gasoline as well as new and used vehicles. Core CPI showed a similar trend, dropping from 6.0% to 5.7%, which matched the forecast. Inflation is coming down slowly and remains much higher than the Fed’s 2% target, as any Fed member will be quick to point out. Still, it’s clear that inflation is on the right path as the impact of the Fed’s aggressive tightening cycle is being felt in the economy. The inflation data came in as expected, but the markets were nonetheless delighted and the US dollar sustained losses across the board on Thursday. The Fed was also pleased that inflation continues to downtrend. After the inflation release, Fed member Harkins said he supports a 25-basis point hike at the February meeting and expects rates to rise “a few more times this year”, with a 25-bp pace being appropriate. This sounds like an acknowledgment that inflation has peaked, although we won’t be hearing the “P” word from any Fed official, for fear of the markets going overboard and loosening conditions, which would complicate the fight against inflation. Other Fed members have come out in support of a 25-bp hike in February and the CME’s FedWatch has pegged the odds of a 25-bp increase at 93%. Barring some unforeseen event, a 25-bp hike looks like a done deal. In the UK, GDP for November outperformed, with a 0.1%, gain, above the forecast of -0.2% but weaker than the October read of 0.5%. The broader picture is not pretty, with GDP falling by -0.3% in the three months to November. The UK economy is sputtering and the Bank of England has its work cut out as it must continue raising rates, despite the weak economy, in order to curb high inflation. The BoE meets next on February 2nd.   GBP/USD Technical GBP/USD tested support at 1.2192 earlier in the day. The next support level is 1.2017 There is resistance at 1.2290 and 1.2366 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The USD/JPY Price Seems To Be Optimistic

USD/JPY Ended The Week Below 128, GBP/USD Managed To End The Week Above 1.22

Kamila Szypuła Kamila Szypuła 14.01.2023 20:01
The data from the US revealed that the Consumer Price Index declined by 0.1% on a monthly basis in December. The Core CPI, which strips volatile energy and food prices, was up 0.3% in the same period. Finally, annual Core CPI arrived at 5.7%, down from 6% in November, as expected. Although the US Dollar struggled to find direction with the initial reaction to the US inflation report, dovish comments from Fed officials triggered a sharp decline in the US T-bond yields and weighed heavily on the currency. Atlanta Federal Reserve Bank President Raphael Bostic said that he was comfortable with a 25 basis points (bps) increase at the next meeting. On the same note, Philadelphia Fed President Patrick Harker noted that it was time for future Fed rate hikes to shift to 25 bps increments. Dovish comments from Fed officials, however, made sure that investors continued to move away from the US Dollar. The latest Michigan Consumer Sentiment report showed consumer sentiment remaining low. Year-ahead inflation expectations fell to 4% from 4.4% while the five-year reading nudged a touch higher to 3% from 2.9% in December. USD/JPY USD/JPY started the week trading at 130.8020. Over the next days, trading was in the range of 131.50-132.50. The USD/JPY pair reached its highest level on Wednesday, a record high was set at 132.8370. After that, the pair began to fall below 130. The pair recorded a low just before the end of the trading week at 127.53, and ended the week just above the weekly low of 127.8340. The Japanese Yen ended last week on the front foot from both USD weakness driven by softening inflation in the U.S. as well as market hopefulness around a more aggressive Bank of Japan (BoJ). A change from the current ultra-loose monetary policy due to elevated inflationary pressures could be something that can take place next week. The Bank of Japan meets on January 18. EUR/USD For the EUR/USD pair, this week was in an uptrend. The pair started the week at 1.0669. And around 1.0660 it recorded its lowest weekly level. In the following days it was growing, exceeding the level of 1.07. On Thursday, the EUR/USD pair crossed the threshold of 1.08 and above this level reached the weekly maximum - 1.0870. The trade for the pair ended above 1.08 at 1.0828. European Central Bank (ECB) policymaker Martins Kazaks said there was no reason for markets to be betting on an interest rate cut. While the Fed is now widely expected to ease further policy tightening, ECB policymakers are scrambling to ensure markets understand their commitment to the hawkish outlook. GBP/USD The cable pair started the week at 1.2114 and finished much higher at 1.2234. GBP/USD traded the low for the week at 1.2097. The record high level in the week was reached by the pair at the level of 1.2242. GBP/USD has benefited from the broad-based selling pressure surrounding the US Dollar and reached its highest level since December 15 at 1.2250. The pair's near-term technical outlook suggests that the bullish stays intact. Gross Domestic Product Growth was 0.1% when the markets had been looking for a 0.2% contraction. However, as manufacturing and industrial production missed expectations. Interest rate support for sterling is likely to remain fitful as the economic numbers trickle out. Continued poor labor relations and the prospect of recession, possibly accompanied by a degree of ‘stagflation’ will keep the Pound a nervous bullish bet. AUD/USD The Australian pair started the week at 0.6901. In the following days, trading was in the range of 0.6865-0.6950. The lower border of the range was also the weekly low of the AUD/USD pair. The Aussie Pair's weekly peak traded close to the 0.70-0.6984 level. The pair finished trading near 0.70 at 0.6980 Source: finance.yahoo.com, investing.com
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

The Positive Close In The New York Stock Exchange, All Indices Rose

InstaForex Analysis InstaForex Analysis 16.01.2023 08:00
Also on Friday, the largest US banks published their financial results for the fourth quarter and all of last year. The net profit of all four banking giants decreased in 2022. In this regard, shares of Wells Fargo are depreciating by 3.8%, Bank of America - by 2.8%, JP Morgan - by 1.3%, Citigroup - by 0.8%. At the close in the New York Stock Exchange, the Dow Jones rose 0.33% to hit a monthly high, the S&P 500 index rose 0.40%, the NASDAQ Composite index rose 0.71%. Dow Jones The leading performer among the components of the Dow Jones index today was JPMorgan Chase & Co, which gained 3.52 points or 2.52% to close at 143.01. Quotes of Caterpillar Inc rose by 3.39 points (1.33%), closing the session at 258.46. Apple Inc rose 1.33 points or 1.00% to close at 134.74. The least gainers were UnitedHealth Group Incorporated (NYSE:UNH), which shed 6.10 points or 1.23% to end the session at 489.57. Shares of Intel Corporation rose 0.18 points (0.59%) to close at 30.11, while Walt Disney Company shed 0.41 points (0.41%) to close at 99. 40. S&P 500  Leading gainers among the components of the S&P 500 in today's trading were Illumina Inc, which rose 3.80% to 201.11, Wells Fargo & Company, which gained 3.25% to close at 44.22, and also shares of Stanley Black & Decker Inc, which rose 3.06% to end the session at 88.91. The least gainers were Northrop Grumman Corporation, which shed 5.44% to close at 461.43. Shares of Ford Motor Company lost 5.29% to end the session at 12.72. Quotes of General Motors Company decreased in price by 4.75% to 36.51. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were iPower Inc, which rose 50.42% to hit 0.77, Moxian Inc, which gained 45.21% to close at 1.51, and shares SmileDirectClub Inc, which rose 46.77% to end the session at 0.70. The least gainers were Catalyst Biosciences Inc, which shed 32.69% to close at 0.26. Shares of Bed Bath & Beyond Inc shed 30.15% to end the session at 3.66. Quotes of AGBA Acquisition Ltd decreased in price by 21.52% to 4.12. Numbers On the New York Stock Exchange, the number of securities that rose in price (1848) exceeded the number of those that closed in the red (1178), while quotes of 117 shares remained virtually unchanged. On the NASDAQ stock exchange, 2343 companies rose in price, 1320 fell, and 185 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.55% to 18.35, hitting a new 52-week low. Gold Gold futures for February delivery added 1.25%, or 23.75, to $1.00 a troy ounce. In other commodities, WTI crude for February delivery rose 2.03%, or 1.59, to $79.98 a barrel. Futures for Brent crude for March delivery rose 1.64%, or 1.38, to $85.41 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.12% to 1.08, while USD/JPY fell 1.06% to hit 127.85. Futures on the USD index fell 0.10% to 101.89.   Relevance up to 03:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/308651
The USD/JPY Price Seems To Be Optimistic

The USD/JPY Pair Has No Other Signs Of Reversal

InstaForex Analysis InstaForex Analysis 16.01.2023 08:01
The downtrend of the USD/JPY pair and the rising trend of the Marlin oscillator dragged on in a counter move. Considering the fact that the oscillator is leading, as well as data showing a price reversal following the established trend of the oscillator, I expect the pair to rise, at least into a significant correction from a decline since October 21, 2022. If we don't run into surprises, the reversal will occur from the nearest support at 127.10, which we can see on the daily chart. The first bullish target will be the nearest enclosed line of the price channel around 129.80. Crossing it opens the way to the next line (133.70), which is close to the MACD indicator line. The MACD line acts as an independent level of support and resistance, if it coincides with any other graphic line that strengthens it. On the four-hour chart, there is a reversal of the Marlin oscillator. There are no other signs of reversal. But while these signs are forming, the price can still manage to reach the support 127.10.     Relevance up to 03:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332315
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

Market Interest To Purchase The British Currency (GBP)

InstaForex Analysis InstaForex Analysis 16.01.2023 08:04
Bulls are fighting for the key level of 1.2155 in order to win. On the daily chart, the price settled above this level, now 1.2410 is under the scope of speculators, and in case the price settles above this level, the 1.2598-1.2666 target range (high on May 27) will become available. The Marlin oscillator has settled in the positive area, its influence on the price has increased. Actually, the price went above the balance indicator line (red moving line), which shows the shift in market interest to purchase the British currency Relevance up to 03:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332317
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

The Price Of EUR/USD Pair Turned Up From The Upper Limit

InstaForex Analysis InstaForex Analysis 16.01.2023 08:07
On Friday, the euro settled above the target range of 1.0758/87. Now, with the support of the Marlin oscillator, it is rising in the green zone, the price moves to the target level of 1.0990 - to the Fibonacci reaction level of 314.0% from the first growth branch on September 28-October 4. From this level, we expect a renewed divergence to form and the price to reverse into a medium-term decline. On the four-hour chart, the price turned up from the upper limit of the range (1.0787), showing the strength against the earlier convergence. Perhaps the market is preparing for a double convergence at 1.0870, where it could settle before rising further. Consolidation could be based on today's US holiday.   Relevance up to 03:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332319
The Outlook Of EUR/USD Pair For Long And Short Position

The Outlook Of EUR/USD Pair For Long And Short Position

Jakub Novak Jakub Novak 16.01.2023 08:11
Friday's lack of statistics limited the upside potential of EUR/USD, but did not change the bullish dynamics of markets. Apparently, buyers are firm on continuing the upward movement of euro, and good economic statistics are what they are waiting for. Today, Germany is set to release data on its import prices, which is likely to lead to a surge in volatility. Meanwhile, in the US, citizens are celebrating Martin Luther King Day, so trading volume will be low, which will limit the further upside potential of the pair. For long positions: Buy euro when the quote reaches 1.0877 (green line on the chart) and take profit at the price of 1.0957. There is a chance for growth today as there is positive market sentiment. But before buying, make sure that the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0818, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0877 and 1.0957. For short positions: Sell euro when the quote reaches 1.0818 (red line on the chart) and take profit at the price of 1.00738. Pressure will return if the attempt to consolidate at weekly highs fails. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0877, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0818 and 1.0738. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 06:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332337
The Market May Continue To Buy The Pound (GBP) This Week

The GBP/USD Pair's Price Will Likely Rise This Week

Paolo Greco Paolo Greco 16.01.2023 08:15
Last week, GBP/USD was able to stay above the MA. Therefore, we have a bullish continuation. The price will likely rise this week as fundamental factors could help boost the pound against the dollar. Still, a correction may occur. Although the pair retraced up, it can hardly be seen as the resumption of the uptrend. Since anything can happen, it is wiser to turn to technical analysis in a confusing situation. Currently, there are enough factors signaling the possibility of both an uptrend and a downtrend. It is important to understand that the market may ignore some factors. The fact that the Bank of England is highly likely to keep raising interest rates more aggressively than the US Federal Reserve in 2023 indicates that the pound will be on the rise against the greenback. Notably, almost all technical factors are now signaling a bullish continuation. Consequently, there is no point in going short before consolidation below the MA. In the 24-hour time frame, the price is above the critical line. Therefore, it will become possible to open short positions only when the pair settles below it. Interest rates haven't peaked yet In early February, three major central banks will hold monetary policy meetings. The Federal Reserve is anticipated to hike rates by 25 basis points. Meanwhile, the Bank of England and the ECB are expected to raise rates by 50 basis points. The market is likely to price these increases in advance. As for 2023 prospects for interest rates, the Federal Reserve is seen lifting rates up to 5% in the first quarter of 2023, according to a Bloomberg survey. The regulator will then consider whether another 25 basis point rate rise is needed. The ECB is predicted to increase interest rates by 50 basis points at the coming two meetings. Its further plans remain to be seen. Thus, by the end of the first quarter, the ECB's interest rate may reach 3.5%. The Bank of England is forecast to stay aggressive, which could harm the economy even more. The rate will most likely be raised from the current 3.5% to 4.25%, which implies three increases of 0.25%. However, in the case of the ECB and the BoE, those rate hikes will not be enough to curb inflation. Therefore, the future of the pound and the euro will be determined when interest rates reach the forecast readings. If regulators sacrifice economic growth and keep up with the tightening cycle, both the euro and the pound may surge against the greenback in the first two quarters of the year as the Federal Reserve will be on the finishing line of the same process. If the ECB and the BoE change their stance, inflation may be stuck in the range of 5 to 7% for a long time. If the banks decide not to continue with rate increases, the euro and the pound will go south. So far, fundamental factors have shown good prospects for both currencies. However, everything may drastically change in a few months. The 5-day average volatility of GBP/USD for the past 5 days totaled 111 pips and is evaluated as high. On Monday, the pair is expected to move in a channel limited by the 1.2119 and 1.2341 levels. Heiken Ashi's upward reversal will signal the likelihood of an uptrend. Support S1 – 1.2207 S2 – 1.2146 S3 – 1.2085 Resistance: R1 – 1.2268 R2 – 1.2329 Outlook: The GBP/USD pair is trying to extend the uptrend in the 4-hour time frame. So, long positions could be opened with targets at 1.2329 and 1.2341 until Heiken Ashi reverses to the downside. Short positions could be considered after consolidation below the moving average with targets at 1.2085 and 1.2024. Indicators on charts: Linear Regression Channels help identify the current trend. If both channels move in the same direction, a trend is strong. Moving Average (20-day, smoothed) defines the short-term and current trends. Murray levels are target levels for trends and corrections. Volatility levels (red lines) reflect a possible price channel the pair is likely to trade in within the day based on the current volatility indicators. CCI indicator. When the indicator is in the oversold zone (below 250) or in the overbought area (above 250), it means that a trend reversal is likely to occur soon Relevance up to 05:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/332323
Tokyo Raises Concerns Over Yen's Depreciation, Considers Intervention

Analysis Of The US Dollar Currency Index Price Movement

InstaForex Analysis InstaForex Analysis 16.01.2023 08:19
With the appreance of Bearish 123 pattern followed by the breakout below Hook (RH) as well as price movement from USDX on its daily chart, it is confirmed that Seller still dominates the price movement from US Dollar Currency Index where in the near future USDX seems to be trying to test the 101.27 level as its first target and the 97.66 level will be the second target if momentum and volatility are supportive and if there is no upward correction movement that exceeds the 103.90 level, if this level is successfully penetrated upwards then there is a high probability that a price decline scenario from USDX will potentially become invalid and cancel by itself. Read next: The UK Economy Expects A Slightly Fall In Inflation, Expected To Fall By 0.1%| FXMAG.COM Relevance up to 06:00 2023-01-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/117627
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

Analysis Of The Price Movements Of The EUR/USD Currency Pair

InstaForex Analysis InstaForex Analysis 16.01.2023 08:20
If we pay attention to the price movements of the major EUR/USD currency pairs on the daily chart, we can see the following facts: 1. The price movement is moving in a channel that is going up (bullish). 2 The price is above its Moving Average. Based on the two facts above, it seems that in the next few days Fiber will try to test the 1.1082 level but with the appearance of deviations between price movements and the Awesome Oscillator indicator this major currency pair also has the potential to be corrected downwards if it turns out to be on its way to the target level that has been set. mentioned above exceeds 1.0639 and if this level is successfully broken down then Fiber has the potential to be halted by its upward movement for the next few days. Relevance up to 06:00 2023-01-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/117629
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

EUR/USD Pair: The Probability Remains High For A Meaningful Pullback

Oscar Ton Oscar Ton 16.01.2023 08:26
Technical outlook: EURUSD pushed marginally higher through the 1.0874 high during the early hours of trade on Monday. The single currency pair has eased off thereafter and is seen to be trading close to 1.0855 at this point in writing. Major resistance at 1.0786 was taken out over the last week and the probability remains high for a meaningful pullback to get underway soon. EURUSD seems to have either completed its rally, which began from the 0.9535 low in September 2022 or is close to completing it. A potential evening star candlestick pattern could appear on the daily chart as seen here. A daily close below 1.0780 will confirm the bearish signal and initiate a meaningful pullback going forward. EURUSD remains well supported at the 1.0481 low as seen on the daily chart. A break there will further confirm that the bears are back in control and drag lower towards the 1.0350-70 zone at least. Also, note that potential remains for a drop until 1.0050 which is the Fibonacci 0.618 retracement of the entire rally between 0.9535 and 1.0874 respectively. Read next:The UK Economy Expects A Slightly Fall In Inflation, Expected To Fall By 0.1%| FXMAG.COM Trading idea: Potential drop against 1.0900 to resume soon. Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308681
The EUR/USD Pair Has A Potential For The Breakout Mode

EUR/USD Pair: The Euro Can Continue To Rise

Paolo Greco Paolo Greco 16.01.2023 08:30
M5 chart of EUR/USD On Friday, EUR/USD corrected to the critical line, bounced from it perfectly, and then resumed the upward movement. The euro grew, though volatility often drops on Mondays, and trend movements are rare at the Asian trading sessions. But as we can see, the market is still set to buy the pair, so there are no sell signals, and the uptrend is unquestionable. On Friday, the EU released a report on industrial production, which can hardly be considered as important. The index rose by 1% as of the end of November, but market participants preferred to ignore it. And why should the euro need any help now, if it is constantly growing? The report on consumer sentiment from the University of Michigan was published in the US in the afternoon, which rose by as much as 5 points, but the dollar got no support from the market. Thus, the picture of the current situation has not changed at all. Friday's trading signals were very bad. If there was an intraday trending movement at the European trading session, then there was none of the kind at the US session (when all the signals were formed). The signals were formed near 1.0806, and traders could try to use only the first two. In both cases, the price was able to pass in the right direction by more than 15 points, so Stop Loss at breakeven should have been set on both trades. Consequently, neither profit nor loss was made on Friday, which is not too bad, given the nature of the movement. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, the number of long positions held by non-commercial traders increased by 16,000, whereas the number of short positions rose by 11,000. Thus, the net positions increased by 5,000. The number of long positions is 135,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 48,000 (702,000 vs. 655,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD continues the upward movement, which started last Friday. The rebound from the Kijun-Sen line has preserved the uptrend, so the euro can continue to rise, even despite the lack of fundamental and macroeconomic background on Monday. The market only sees the euro. On Monday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0938, 1.1036, 1.1137 as well as the Senkou Span B (1.0622) and Kijun-Sen (1.0794). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are no important events or reports scheduled for January 16 in the US and EU. So there will be nothing for traders to react to, but the euro can continue to rise in the current circumstances. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group. Relevance up to 05:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332333
The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

The GBP/USD Pair Did Not Reach The Nearest Target Level Of 1.2259

Paolo Greco Paolo Greco 16.01.2023 08:33
M5 chart of GBP/USD GBP/USD also maintained an upward trend on Friday. The price tried to cross the area of the critical line, but failed both times. The pound has good chances to rise at the beginning of a new week. The British currency had a reason to rise on Friday. At least during the European session. GDP rose in November not decline as experts expected and this report was enough for the pair to rise. The US Consumer Sentiment Index was stronger than expected, but this report was not interesting for traders, as it was in favor of the dollar. We might have already gotten used to it over the last months. Thus, the pound is aiming for a new round of upward movement, which resumed after Friday, right when trading started on Monday. We already said in our fundamental articles, that the "fundamentals" of the current week are more likely to support the pound than the dollar. Technically, the correction is still possible, but there are no sell signals, so it is not worth selling the pair. Friday trading signals were not the best, but not the worst either. The price rebounded from 1.2162-1.2185 twice, and then went up from 22 to 52 pips. Accordingly, when opening long positions, a Stop Loss should have been set to Breakeven. The pair did not reach the nearest target level of 1.2259 so traders did not make any profit or loss on any of the open trades. COT report The latest COT report showed an increase in bearish sentiment. During the given period, non-commercial traders closed 7,600 long positions and opened as many as 1,500 short positions. Thus, the net position fell by about 9,100. This figure has been on the rise for several months, and the sentiment may become bullish in the near future, but it hasn't yet. Although the pound has grown against the dollar for the last few months, from a fundamental perspective, it is difficult to answer why it keeps rising. On the other hand, it could fall in the near future (in the mid-term prospect) because it still needs a correction. In general, in recent months the COT reports correspond to the pound's movements so there shouldn't be any questions. Since the net position is not even bullish yet, traders may continue to buy the pair over the next few months. Non-commercial traders now hold 36,000 long positions and 65,500 short ones. I remain skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. Read next: The UK Economy Expects A Slightly Fall In Inflation, Expected To Fall By 0.1%| FXMAG.COM H1 chart of GBP/USD On the one-hour chart, GBP/USD continues to grow, located above the lines of the Ichimoku indicator. At this time it would be possible to form a trend line or a channel, but they would have too strong slope angle, so we believe that it is better to orient on the lines of Kijun-sen and Senkou Span B. On January 16, the pair may trade at the following levels: 1.1974-1.2007, 1.2106, 1.2185, 1.2259, 1.2342, 1.2429-1.2458, 1.2589. The Senkou Span B (1.2023) and Kijun Sen (1.2182) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Monday, there are no important events in the UK and US, but the Asian trading session has already shown that the market is ready to buy even without any fundamental and macroeconomic background. Accordingly, GBP may continue to rise this week. Meetings of the Federal Reserve and the Bank of England are coming up, and from the US central bank is expected a new slowdown in raising the rate. This factor may well push the pair up. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 05:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332335
Warsaw Stock Exchange SA Approves Dividend Payout: Neutral Impact Expected

The US Dollar Index Is Now Facing Strong Resistance

Oscar Ton Oscar Ton 16.01.2023 08:37
Technical outlook: The US dollar index dropped through fresh lows at 101.36 in the early hours of trade on Monday. The index is seen to be trading close to 101.55 at this point of writing as the bulls prepare to come back in control soon. A break above the 102.25 short-term resistance will be the first sign of the bulls coming back in control and that a bottom is in place at 101.36. The US dollar index seems to have now completed its larger-degree drop, which had begun from the 114.70 high. If the above structure holds well, prices would push higher producing a bullish reversal signal. A potential Engulfing Bullish candlestick pattern is unfolding on the 4H chart presented here. Further, RSI is also producing bullish divergences on several timeframes (not shown here). The US dollar index is now facing strong resistance at 105.35 as marked on the 4H chart here. A push higher will further add confidence to the bullish outlook and that a bottom is in place at 101.36. Potential remains for a push towards 106.40 and 109.50 levels in the next several trading sessions. Trading idea: Potential rally against 100.50. Good luck! Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308685
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Speech Of Bank Of England Governor Andrew Bailey Could Have Impact On The Pound (GBP)

Jakub Novak Jakub Novak 16.01.2023 08:42
Analysis of transactions in the GBP / USD pair Pound continues to rise as more market players believe that the latest Brexit issues are going to be resolved since EU and UK representatives are set to meet again this week to continue the dialogue. If there is good news, GBP/USD will strengthen, following the trend that was formed last week. And since there are no important statistics scheduled to be released today, buyers have all chances for growth. The speech of Bank of England Governor Andrew Bailey could either strengthen or weaken the pound, so traders should pay close attention to what he will say. In the US, citizens are celebrating Martin Luther King Day, so trading volume will be low, which may limit the further upside potential of the pair. For long positions: Buy pound when the quote reaches 1.2285 (green line on the chart) and take profit at the price of 1.2351 (thicker green line on the chart). Growth could occur as continuation of the upward trend. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.2236, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2285 and 1.2351. For short positions: Sell pound when the quote reaches 1.2236 (red line on the chart) and take profit at the price of 1.2154. Pressure will increase if there is no support from big players at the current highs. But make sure that when selling, the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2285, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.2236 and 1.2154. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader   Relevance up to 06:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332339
Asia Market: Exports In Indonesia Are Likely To Continue To Grow, Chinese Interest Rate Decision Ahead

Asia Market: Exports In Indonesia Are Likely To Continue To Grow, Chinese Interest Rate Decision Ahead

ING Economics ING Economics 16.01.2023 08:53
China MLF decision and Indonesian trade are Asia's highlights on a quiet day for the G-7 as the US is on holiday. The JPY and JGBs remain in the spotlight ahead of Wednesday's Bank of Japan meeting Source: shutterstock Macro outlook Global Markets: US stocks made further gains on Friday, though on a relatively modest scale as the boost from low inflation data earlier in the week began to fade. Some of the zing also went out of the bond market too. 2Y US Treasuries, which had looked overbought at levels below the lower bound of the Fed funds rate (4.25%), saw yields rising 8.7bp, reversing most of Thursday’s decline. Yields on the 10Y US Treasury rose 6.4bp to just over 3.50%. It’s a public holiday in the US today so markets may be a little uninspired today. But there is still some room to close the gap between the implied peak Fed funds rate (currently 4.92%) and 5.0% (ING f) or 5.0%+ (consensus Fed view), and this gap will probably be closed, even if you think the Fed will pivot later this year. Given some fairly extreme speculative positioning (commitment of traders’ report) this raises the possibility of some tactical positioning, even if strategically, you consider the broader move in yields from here to be lower. EURUSD drifted a bit lower on Friday but remains above 1.08. Most of the rest of the G-10 pack is pretty steady, the exception being the JPY, which has been getting a lot of support from investors betting on a change in policy at Wednesday’s meeting. Practically none of the consensus of forecasters thinks the BoJ will actually move, but no one will want to miss out by being on the wrong side of any surprise on either yield curve control or policy rates. 10Y JGB yields remain above 0.50%. The rest of the Asian FX pack made solid gains on Friday, catching up with the G-10’s moves the day before. The IDR led the charge, rising 1.24%, followed by the THB (1.16%) and PHP (0.84%). G-7 Macro: There is nothing of much interest on the G-7 macro calendar today. China: The PBoC will announce its 1Y Medium Lending Facility (MLF) policy rate decision today. The consensus is for a pause at 2.75%. There could, however, be an extra liquidity injection on 1Y MLF volumes. One reason is that the Chinese New Year holiday is coming and liquidity is usually tight before this. But this is not certain, as the PBoC has already been injecting liquidity to cover the holiday period through open market operations. Another reason is that the PBoC could inject extra liquidity via the MLF at the beginning of the year rather than cutting the required reserve ratio to support what is usually strong loan growth in the first quarter. The market should perceive more liquidity injections as supportive measures for economic growth. Indonesia: Trade data will be released on Monday.  The market consensus points to a second straight month of contraction for imports as energy imports slide after global energy prices moderate.  Exports are likely to remain in expansion but settle at 7.4%YoY, resulting in a trade surplus of roughly $4bn, much lower than the high of $7.5bn recorded in 2022.  Smaller trade surpluses suggest that the IDR may lose some support in 2023. What to look out for: China activity data Japan PPI inflation (16 January) China medium term lending facility (16 January) Indonesia trade balance (16 January) Philippines remittances (16 January) Australia consumer confidence (17 January) China GDP, retail sales and industrial production (17 January) Singapore NODX (17 January) Japan core machine orders and industrial production (18 January) BoJ policy meeting (18 January) Taiwan GDP (18 January) US retail sales, PPI, industrial production and MBA mortgage applications (18 January) Japan trade balance (19 January) Australia employment change (19 January) Malaysia BNM policy meeting (19 January) Bank Indonesia policy meeting (19 January) US initial jobless claims and housing starts(19 January) South Korea PPI inflation (20 January) Japan CPI inflation (20 January) US existing home sales (20 January) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Decarbonizing Steel: Contrasting Coal-based and Hydrogen-based Production Methods

Forex: CEE FX Will Be Driven Mainly By The Global Story, The Polish Zloty (PLN) Should See Slightly Stronger Levels

ING Economics ING Economics 16.01.2023 09:02
FX markets open the week on a quiet footing, but with core 2023 trends intact. Emerging market currencies remain bid on the China reopening story, plus the Japanese yen remains very much in demand ahead of Wednesday's BoJ decision. Softer China data this week will test the conviction of renminbi bulls, plus UK inflation and labour data will be key for GBP USD: Dollar to remain gently offered The week starts with DXY bouncing from a marginal new low at 101.80 in Asia overnight. Today marks a partial US market holiday to respect Martin Luther King day and could mean that trading conditions, which seemed quite illiquid last week, remain so. The US data calendar is relatively light this week but as our US economist, James Knightley, writes in our economic preview, retail sales, industrial production and existing home sales should all fall on the soft side. In theory, then, this should not impact too much the market expectations of two 25bp Federal Reserve hikes in February and March, both of which are expected to be reversed by year-end. The benign Fed story and the China reopening trade have kept emerging market currencies on the front foot. What seems a conviction call in the market now is that the dollar has turned, pressure to defend emerging market currencies with rate hikes has reversed and 2023 will mark the virtuous cycle of flows into emerging markets, currency gains, rate cuts and local currency bond markets performing well. Indeed, one of the benchmark EM local currency bond market indices is already up 4.2% this year and has retraced more than two-thirds of last year's decline. The further success of this story clearly relies both on a benign Fed and more positive news on China. On the issue of China, we are now starting to see local authorities admitting the rising death toll after abandoning the zero-Covid policy last November. Clearly, any renewed shut-down would dent this year's optimism. Equally, tomorrow sees the release of China's fourth-quarter GDP data, which is expected to have contracted on the quarter with an exceptionally low reading of 1.5% year-on-year. We presume that investors are looking through the fourth quarter and probably through the first quarter Chinese data and are positioning for the reopening benefits to appear from the second quarter onwards. So let's see how long Asian FX positioning copes with some softer Chinese data tomorrow. Also very much in focus this week is the Bank of Japan (BoJ) meeting on Wednesday. Further adjustments to its JGB targets are in focus and investors are positioning for this with higher longer-dated swap rates. 10-year Japanese swap rates have pushed another 5bp higher overnight to the highest levels in a decade. We suspect USD/JPY can trade down to 126.50 before Wednesday. The factors that have pressured DXY below 102 remain in place, but DXY may find support in the 101.30/50 region this week. Chris Turner EUR: 1.0900/1.0950 may be best EUR/USD levels of the week EUR/USD continues to trade comfortably above 1.09. The focus in Europe this week may be some key speakers at the World Economic Forum in Davos, where European Central Bank President Christine Lagarde speaks on Friday. We will also see some German data in final CPI and the ZEW investor expectations survey - which is expected to have improved. As above, EUR/USD will probably be driven by events in Asia this week. However, we suspect that 1.0900/1.0950 levels may be the best of the week.  Elsewhere this week we have a Norges Bank policy meeting. A final 25bp rate hike is expected to 3.00%. The oil market remains bid on the back of the foreseen pick-up in Chinese demand. And with investors taking a glass-half-full approach to risk assets this year, the EUR/NOK bias is probably lower this week. Chris Turner GBP: UK data will be key this week Sterling has taken rather a back seat so far this year. However, the UK data calendar picks up in the form of both labour market data and December CPI this week. Last week had seen the conviction of a further 100bp hiking cycle from the Bank of England (BoE) start to soften. 95bp of tightening is now priced in by August this year. It is not clear that this week's data will add to those softer expectations - wages and inflation could remain high- but we do see those BoE tightening expectations coming under pressure over coming months. That could see EUR/GBP continue to nudge up towards 0.89, which is our target for the end of this first quarter. Chris Turner CEE: Light calendar means stronger FX This week we are looking at a lighter calendar in the CEE region with rather secondary data prints. Today, we will see the release of the Czech Republic's PPI, Poland's state budget result for last year, and Poland's core inflation for December. The core CPI rose from 11.4% to 11.7% YoY, according to our estimates, despite a drop in the headline number. Romania's industrial production for November will be released on Wednesday. On Friday, we will see data from the Polish labour market, and after the close of trading Fitch will publish a rating review of Hungary. Given the drop in gas prices and the compromise found between the Hungarian government and the European Commission, we do not expect any changes. On the political front, we will follow the EU story and the government's efforts to unlock access to EU funds. Last week the lower house passed a law on judicial reform and now it is the turn of the opposition-controlled Senate. On the FX market, given the lack of regional momentum, CEE FX will be driven mainly by the global story. In general, we expect higher EUR/USD and good sentiment in Europe to keep CEE supported. Moreover, gas prices are testing lower levels again, which could be positive for the Czech koruna and Hungarian forint. In addition, the forint should still benefit from lower-than-expected inflation and could test lower levels below 394 EUR/HUF this week. On the other hand, we think the koruna has the strongest long positioning in the region at the moment and further gains will be difficult. Thus, we expect levels around 24.00 EUR/CZK for this week. The Polish zloty, which has lagged behind the region so far, should also see slightly stronger levels and could benefit from the regional optimism and move a bit lower below to 4.68 EUR/PLN. Frantisek Taborsky  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Corn Prices Recorded Their Biggest Weekly Gain, Gold Demand In India May Suffer A Temporary Setback

Corn Prices Recorded Their Biggest Weekly Gain, Gold Demand In India May Suffer A Temporary Setback

Saxo Bank Saxo Bank 16.01.2023 09:14
Summary:  US equity markets ended last week on a high note, as the US S&P 500 Index closed above its 200-day moving average and within a point of the psychologically pivotal 4,000 level as Q4 earnings season is now under way. The currency market could steal the limelight this week as a pivotal Bank of Japan is up on Wednesday. Will Governor Kuroda declare victory on bringing inflation back to Japan and shift policy again, triggering a further spike in the Japanese yen?   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities continue to toy with key resistance levels as Q4 earnings season got underway on Friday, dipping intraday but ending the week on a high note, just one point shy of the psychologically important 4,000 level in the S&P 500 index (cash index, the future trades clear of 4k), which is also just above the 200-day moving average and near other technical levels. Today is a market holiday in the US, but through next week’s heavy calendar of megacap earnings reports, traders will watch whether the market can clear this key resistance area and make a bid to surpass the December pivot highs near 4,100 for the cash index. The Nasdaq 100 index has more work to do, still trading almost 600 points below its 200-day moving average and the December pivot highs above 12,100. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) The CSI300 surged over 2%, led by pharmaceuticals, computing, and nonbank financials. Expectations of reacceleration of economic activities as a result of reopening and relaxation of regulation continued to boost market sentiment. Corporate filing information showed that The Chinese authorities had recently taken up “special management shares” also known as “golden shares” in local units of Alibaba and Tencent (00700.xhkg) apparently to exert influence over business decisions far beyond the around 1% equity stake that otherwise represents under normal situations. Investors generally welcome the move as it tends to signal that the Chinese authorities are shifting from a less predictable and heavy-handed crackdown on internet platform companies to more institutionalized and predictable supervision of the industry. By mid-day Monday, Alibaba and Tencent each gained about 1% and the Hang Seng Index advanced 0.7%. FX: JPY takes centre stage this week as BoJ to meet Wednesday The Japanese yen gained over 3% against the USD last week, moving from highs of 132.87 to lows of 127.46 on Friday. The yen was also stronger on all the crosses amid Bank of Japan’s unscheduled bond buying operations as the markets continued to test the policy yield cap of 0.5% ahead of the BoJ meeting this week and speculation of further policy tightening (more below). The US dollar was also broadly weaker, as EURUSD posted marginal new cycle highs overnight above 1.0870. AUDUSD has found a bid of late on anticipation of China’s reopening, testing 0.7000 overnight but reversing back a bit lower into early European trading today. Australia’s employment data will be key on Thursday. GBPUSD will focus on the host of UK data, from labour market data tomorrow morning, to the CPI release on Wednesday and Retail Sales data on Friday. Crude oil (CLG3 & LCOH3) trades softer after last week's strong gains Crude oil prices were steady to softer in early Monday trading after recording over 8% gains last week on China’s reopening optimism.  China’s road traffic levels are continuing to rebound from record low levels following the easing of COVID-19 restrictions. A congestion index comprising the 15 cities with the most vehicles registrations has risen by 31.3% vs a week earlier. Meanwhile, increased import quotas by China saw oil demand pick up in the physical market. Sentiment was also bolstered by expectations of the Federal Reserve slowing its interest rate hikes, following lower than expected inflation. Shale executives looking to substantially increase drilling would need US oil prices to climb to $89 a barrel, according to the latest energy survey by the Federal Reserve Bank of Kansas City. OPEC and IEA release their monthly oil market reports on Tuesday and Wednesday. Gold and copper trades softer following last week's surge Gold together with copper has been the in-demand commodities at the start of the year on China demand recovery hopes and not least the softer dollar and bond yields as the market adjust lower their expectations for future US rate hikes. Gold reached an eight-month high and copper a six-month high overnight before running into some light profit-taking. With RSIs on both in overbought territory, the underlying strength of both metals will sooner or later be tested, and the dollar probably holds the key. Hence the importance of Wednesday’s BoJ meeting, the outcome of which may trigger a major move in USDJPY (see below). Gold demand in India may suffer a temporary setback as traders adapt to near record prices. In addition, we have yet to see demand for ETF’s, often used by long-term focused investors, spring back to life with total holdings still hovering near a two-year low. US Treasury yields rebounded slightly Friday (TLT:xnas, IEF:xnas, SHY:xnas) After trading near the cycle lows of late last year into 3.40% for the 10-year benchmark on benign inflation data last week and a series of very strong auctions for especially longer-dated US Treasuries, the 10-year yield rebounded toward 3.50%. US treasury markets are closed for a holiday today. Read next: The UK Economy Expects A Slightly Fall In Inflation, Expected To Fall By 0.1%| FXMAG.COM What is going on? Iron ore loses heat, falling 4.5% after China accuses parties of price gouging The key steel making ingredient, iron ore (SCOA) fell 4.5% to $119.85 in Asia today, after China’s top economic planner, the National Development and Reform Commission (NDRC), said its cracking down on illegal activities such as hoarding and price gouging as it attempts to keep the iron ore price stable, after the iron ore price had risen 65% from October. Still iron ore inventory levels are lower than they were a year ago, when China’s economy was effectively in lockdown. Shares of iron ore majors, however, remained near their record highs with investors remembering that China has made such accusations in the past, and the iron ore price has recovered. BHP ended slightly higher, closing around record high territory, Rio fell slightly from its records while Fortescue Metals fell 2%. Corn (ZCH3) closed last week with strong gains following the US crop output report Corn prices recorded their biggest weekly gain since August as droughts curb the world’s supply buffer. The US Department of Agriculture unexpectedly cut its outlook for US domestic production and available stocks of both corn and soybeans, a sign that an ongoing drought from last year may continue to underpin prices. The worst Argentinian drought in 60 years also led to a downgrade in the outlook for soybeans and corn production, some of that being partly offset by an expected bumper harvest in Brazil. Corn prices were up over 3% in the week and Soybeans up over 2%. Part of the rally being driven by wrongfooted speculators who ahead of the report had cut bullish corn bets by 24%. Hedge funds opened their 2023 accounts by aggressively cutting exposure across the agriculture sector With energy also being sold, the latest COT report covering the week to January 10 saw buying being concentrated in just a few metal contracts led by copper and gold. Overall, the gross long across the 24 major commodity futures tracked in our weekly update fell by 15% to 1,194,000 contracts, the biggest one-week drop in six months. The changes were in line with price development across the different sectors with gains in precious (0.6%) and industrial metals (1.7%) being offset by losses in energy (-3.9%) grains (-2.7%), softs (-3%) and livestock (-1.5%). What are we watching next? Bank of Japan meeting on Wednesday shaping up as major event risk The recent news flow and rumor mill sees the Bank of Japan announcing further tweaks to its policy this Wednesday at its meeting, with a further JPY surge on Friday a clear sign that the market sees the meeting as a major event risk. As well, the Bank of Japan again broke its daily record for Japanese government bond purchases Friday as yields defied its 0.5% cap. The BOJ bought roughly 10 trillion yen ($78 billion) in JGBs over the past two days, with a 5 trillion yen purchase on Friday topping the high it had just set Thursday and is preparing to purchase more Japanese government bonds today, according to the Nikkei Somewhat ironically, the anticipated further widening of the BoJ’s yield-curve-control “band” (de facto more of a “cap”) on 10-year JGB’s this week or at a future meeting comes as long yields are dropping sharply elsewhere, accentuating the tightening of spreads between Japanese yields and those in, for example, Europe and the US. Earnings to watch The Q4 earnings season continues this week, with a relatively light schedule before next week’s mother lode of mega-cap earnings reports.  The key uncertainty is credit quality in 2023 as it is linked to the degree of a recession, or even whether there will be a recession at all in the US economy. Overall, the Q4 earnings season is likely going to see an extension of value and tangible companies performing better than intangible-driven companies. Interesting names this week include a former high-flyer like Netflix, which has achieved a more than 100% rally of its 2022 lows coming into this week’s report, even if it trades at under 50% of its peak valuation back in late 2021. Tuesday: Sartorius Stedim, Morgan Stanley, Goldman Sachs, Interactive Brokers Wednesday: EQT, Charles Schwab, PNC Financial Services, Kinder Morgan Thursday: Procter & Gamble, Netflix Friday: Investor, Sandvik, Ericsson, Schlumberger Economic calendar highlights for today (times GMT) US Markets Closed for Martin Luther King, Jr. Holiday 1300 – Poland Dec. Core CPI 1500 – UK Bank of England Governor Beaily to testify on financial stability 2330 – Australia Jan. Westpac Consumer Confidence 0200 – China Dec. Industrial Production/Retail Sales/Q4 GDP Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – January 16, 2023 | Saxo Group (home.saxo)
Bank of Canada keeps the rates unchanged. After the release of the US inflation, Fed's Barkin drew attention to cooling demand, but still strong labour market and inflation

A Modest Pullback In Crude Oil Prices Could Undermine The Commodity-Linked Loonie (CAD)

TeleTrade Comments TeleTrade Comments 16.01.2023 09:16
USD/CAD comes under renewed selling pressure on Monday amid sustained USD weakness. Rising bets for smaller Fed rate hikes and a positive risk tone continue to weigh on the buck. A modest pullback in oil prices could undermine the Loonie and help limit any further losses. The USD/CAD pair struggles to capitalize on Friday's bounce from the 1.3320 area, or its lowest level since November 25 and meets with a fresh supply on the first day of a new week. The pair remains on the defensive through the Asian session and is currently placed near the daily low, around mid-1.3300s. The US Dollar extends its recent sell-off and drops to a fresh seven-month low amid speculations that the Fed may be nearing the end of its rate-hike cycle. This, in turn, is seen as a key factor exerting downward pressure on the USD/CAD pair. Investors now seem convinced that the US central bank will soften its hawkish stance and have started pricing in a smaller rate hike going forward. The bets were lifted by last week's US consumer inflation figures, which showed that the headline CPI fell for the first time in more than 2-1/2 years in December. Read next: The UK Economy Expects A Slightly Fall In Inflation, Expected To Fall By 0.1%| FXMAG.COM Adding to this, several Fed officials backed the case for a 25 bps lift-off in February. This, along with a generally positive tone around the equity markets, continues to weigh on the safe-haven buck. That said, growing worries about a deeper global economic downturn should keep a lid on the optimism and lend some support to the greenback. Apart from this, a modest pullback in crude oil prices could undermine the commodity-linked Loonie and further contribute to limiting the downside for the USD/CAD pair, at least for the time being. The mixed fundamental backdrop warrants caution for aggressive bearish traders and positioning for any further losses. The US markets will remain closed on Monday in observance of Martin Luther King Jr. Day. Moreover, there isn't any major market-moving economic data due for release from Canada. Hence, traders will look to the Bank of Canada's Business Outlook Survey report for some impetus around the USD/CAD pair. Apart from this, oil price dynamics should influence the Canadian Dollar and allow traders to grab short-term opportunities around the major.
China's Ninth Straight Month of Gold Holdings Increase; Oil Resilient Despite Russian Tanker Incident; Dollar Supported by Bond Supply Concerns

The INR Investors Are Likely To Shift Their Focus Toward The Fiscal Budget

TeleTrade Comments TeleTrade Comments 16.01.2023 09:21
A recovery in the US Dollar Index has also provided support to USD/INR. Growing expectations for a smaller Fed’s interest rate hike have weakened the USD Index broadly. Upbeat oil prices and FII outflows might trigger volatility for the Indian Rupee. The USD/INR pair has picked strength marginally below the critical support of 81.20 as the US Dollar Index (DXY) has attempted a recovery after refreshing a seven-month low at 101.45. The Indian Rupee asset has refreshed its day’s high at 81.35 amid firmer oil prices on a broader note. The risk appetite of the market participants seems solid as risk-perceived assets like the S&P500 futures are holding on to their gains added in Asia after a four-day winning spell. The USD index has recovered firmly to near 101.60 but is required to clear more filters to claim a bullish reversal. Meanwhile, United States markets are closed on Monday on account of Martin Luther King Jr. Day. A recovery in the USD Index could be short-lived as the risk profile is still extremely positive. Rising expectations for a smaller interest rate hike by the Federal Reserve (Fed) in its February monetary policy meeting are responsible for the weakness in the US Dollar Index (DXY). As per the CME FedWatch tool, chances of a 25 basis points (bps) interest rate hike by the Fed have scaled above 94%. On the Indian Rupee front, investors are likely to shift their focus toward the Fiscal Budget FY2023-24, which is scheduled for the first week of February. In the meantime, rising Foreign Institutional Investment (FII) outflows are also impacting the Indian Rupee bulls. Read next: The UK Economy Expects A Slightly Fall In Inflation, Expected To Fall By 0.1%| FXMAG.COM Being one of the major importers of oil, rising oil prices are also expected to impact the Indian Rupee bulls. Strategists at TD Securities expect the global benchmark crude to trade at $100/b in the latter part of 2023 led by China’s reopening and the Fed’s lower rate hike structure, which might keep affecting the Indian Rupee.
The RBA Is Expected To Raise Rates By 25bp Next Week

Traders Seem Reluctant To Place Aggressive Bullish Bets Around The AUD/USD Pair

TeleTrade Comments TeleTrade Comments 16.01.2023 09:27
AUD/USD gains some follow-through traction on Monday and climbs to a fresh five-month high. Bets for smaller Fed rate hikes, a positive risk tone undermines the USD and offers some support. Looming recession fears cap the optimism and act as a headwind for the risk-sensitive Aussie. The AUD/USD pair kicks off the new week on a positive note and climbs to its highest level since mid-August during the Asian session. The pair, however, trim a part of its intraday gains and retreat below the 0.7000 psychological mark in the last hour. A combination of factors drags the US Dollar to a fresh seven-month low on Monday, which, in turn, acts as a tailwind for the AUD/USD pair. The US consumer inflation figures released last week showed that the headline CPI fell for the first time in more than 2-1/2 years in December. The data fueled speculations that the Fed may be nearing the end of its rate-hiking cycle and lifted bets for smaller rate hikes in February. This, along with a generally positive tone around the equity markets, continues to weigh on the safe-haven buck and benefits the risk-sensitive Aussie. The Australian Dollar draws additional support from rising odds for a further interest rate hike by the Reserve Bank of Australia (RBA) in February, bolstered by the upbeat domestic data released last week. In fact, the Australian Bureau of Statistics reported that the headline Consumer Price Index (CPI) re-accelerated to the 7.3% YoY rate - a 32-year-high - in November from the 6.9% in the previous month. Furthermore, Australian Retail Sales surpassed the most optimistic estimates and jumped 1.4% in November, while October's reading was also revised up to show a 0.4% growth. Read next: The Swedish Real Estate Market Will See Significant Price Drops| FXMAG.COM Market participants, however, remain worried about the economic headwinds stemming from the COVID-19 outbreak in China. Apart from this, the protracted Russia-Ukraine war has been fueling concerns about a deeper global economic downturn, which keeps a lid on the optimism in the markets. Traders also seem reluctant to place aggressive bullish bets around the AUD/USD pair amid a holiday in the US and ahead of the Chinese economic release, including the Q3 GDP print, on Tuesday.  
Analysis Of The EUR/JPY Pair Movement

USD/JPY Pair Is Declining Towards The Horizontal Support Plotted From May

TeleTrade Comments TeleTrade Comments 16.01.2023 09:29
USD/JPY has sensed buying interest after dropping to near 127.20. The USD Index has recovered to near 101.60 despite the upbeat market mood. Downward-sloping 20-and 50-EMAs indicate more weakness ahead. The USD/JPY pair has retreated after sensing buying interest around 127.20 in the early European session. The asset has followed the footprints of the US Dollar Index (DXY) and has attempted a recovery. The USD Index has recovered to near 101.60 despite the upbeat market mood, which could result in a resumption of the downside journey. Meanwhile, the Japanese Yen bulls are likely to dance to the tunes of the Bank of Japan (BOJ) monetary policy, which is scheduled to be announced on Wednesday. The commentary from BOJ Haruhiko Kuroda will be keenly watched amid soaring chatters bout an exit from a decade-long ultra-loose monetary policy. USD/JPY is declining towards the horizontal support plotted from May 24 low at 126.36 on a daily scale. Downward-sloping 20-and 50-period Exponential Moving Averages (EMAs) at 132.10 and 135.36 respectively, add to the downside filters. The Relative Strength Index (RSI) (14) is oscillating in the bearish range of 20.00-40.00, showing no signs of divergence and oversold, which might result in further weakness in the US Dollar. Going ahead, USD/JPY needs to drop below Monday’s low at 127.22, which will expose the asset for more downside towards the horizontal support plotted from May 24 low at 126.36. A slippage below the latter will open room for further downside toward the psychological support at 125.00. Read next: The Swedish Real Estate Market Will See Significant Price Drops| FXMAG.COM On the flip side, a decisive move above December 20 low at 130.57 will drive the asset toward January 9 low at 131.31 followed by January 12 high at 132.56. USD/JPY daily chart  
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

The EUR/USD Pair Is Expected The Upside Movement

Peter Jacimovic Peter Jacimovic 16.01.2023 09:52
Technical analysis: EUR/USD has been trading downside this morning and I found the test of the key support zone at the price of 1.0800. I see potential for the upside movement. Trading recommendation: Due to the intraday oversold condition and the test of the key support zone, I see potential for the upside rotation towards upper reference at 1.0870. Watch for potential buying opportunities with the upside objective at 1.0870 Stochastic oscillator is showing oversold condition and potential for the upside rotation. Key support is set at the price of 1.0800 Read next: The Swedish Real Estate Market Will See Significant Price Drops| FXMAG.COM Relevance up to 09:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308717
The USD/JPY Price Seems To Be Optimistic

Traders Ignore Kuroda's Dovish Statements, The January Meeting Of The Bank Of Japan May Not Be In Favor Of The Yen

InstaForex Analysis InstaForex Analysis 16.01.2023 12:13
At the start of the new trading week, the dollar-yen pair updated its multi-month price low, reaching 127.25. The pair was last in this price area in May last year. The yen is strengthening ahead of the Bank of Japan's January meeting, which will be held the day after tomorrow, January 18. Traders ignore Kuroda Rumors that the Japanese regulator will continue to move towards monetary policy normalization are supporting the national currency. In my opinion, Bank of Japan is really on the threshold of cardinal changes, but these changes will probably take place not in January but in the spring of this year, when a new leader will take over the helm of the Japanese central bank to replace the consistent "dove" Haruhiko Kuroda. All of his potential successors are delivering rather hawkish messages, while Kuroda himself maintains a dovish attitude. Therefore, one should not expect any sensations from the January meeting: the current head of the central bank will most likely repeat the previously announced messages about commitment to accommodative policy. Nevertheless, the yen continues to strengthen its position, despite Kuroda's soft comments. The USD/JPY pair has been within the downward trend since October last year, when the Japanese authorities re-conducted a currency intervention. Then a series of events followed in favor of the development of a bearish scenario: first, the dollar weakened throughout the market (against the background of slowing inflation in the U.S. and rumors of a slowdown in the Fed rate hike), and then the Bank of Japan unexpectedly doubled the yield ceiling on 10-year bonds. According to a number of experts, the central bank has taken only the first step towards normalizing monetary policy. And although Haruhiko Kuroda, as they say, "directly" refuted this assumption (stating that this decision was due to "market-technical reasons"), traders, apparently, are betting that the regulator will further weaken its policy of control over the yield curve in the future or even abandon it altogether. The market is increasingly talking about the possible implementation of such a scenario. Recall that yield curve control was one of the key factors behind the 12% devaluation of the Japanese currency against the dollar. And after the Bank of Japan expanded the range of yield tolerance from the target level in December, the yen strengthened by more than six percent. It is noteworthy that traders ignore Kuroda's dovish statements, who not only refutes hawkish intentions, but also expresses readiness for further steps to ease monetary policy. Despite such announcements, there is growing confidence in the market that the Bank of Japan will announce further adjustment to the yield curve management procedure or even abandoning it in the coming months. Some analysts suggest that this will happen as early as Wednesday, following the results of the January meeting. Read next: Lowering The Price Of Electric Vehicles Is Supposed To Be Tesla's Unusual Strategy To Generate Demand In The US Market| FXMAG.COM Downward outlook for USD/JPY In my opinion, market expectations are too high, so the results of the January meeting of members of the Japanese regulator may not be in favor of the yen. But the trading principle "buy on rumors, sell on facts" is now playing on the side of the USD/JPY bears: during the Asian session on Monday, the yen was in high demand. Setting aside intraday price fluctuations, we can assume that the pair retains the potential for further decline, both in the medium and long term. First, don't forget about the weakening dollar. The latest CPI growth report, which reflected a slowdown in U.S. inflation, put pressure on the greenback. The probability of a 25-point rate hike at the Fed's February meeting rose to 93%. In addition, the market again started talking about the fact that the Fed may end the cycle of raising interest rates ahead of schedule, and its final level will be below the aanounced level of 5.1%. Secondly, the yen will only strengthen its position in the near future, even if the outcome of the Bank of Japan's January meeting is not in its favor. In just 3.5 months, Haruhiko Kuroda will leave his post, while his likely successors, in one form or another, say that the Japanese regulator may have to make the next steps towards normalization of monetary policy. In particular, former Vice Minister of Finance for International Affairs Takehiko Nakao said he supports a smooth departure from the central bank's ultra-loose monetary policy. Another contender, Columbia University professor Takatoshi Ito, voiced a similar position. Technical picture of the pair The technical picture also speaks about the priority of the downward scenario: on the daily chart, the pair continues to be on the lower line of the Bollinger Bands indicator, as well as under all the lines of the Ichimoku indicator, which shows a bearish Parade of Lines signal. Considering medium-term and long-term trading, it is advisable to use corrective bursts to open short positions to the first support level at 127.25 (the price low of the current year) and 126.50 (the lower line of the Bollinger Bands indicator on the weekly chart).   Relevance up to 09:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332370
The USD/JPY Price Reversed From The Lower Limit

USD/JPY Pair Is Trading Above 128 Again, The Testimony Of Bank Of England Governor Andrew Bailey May Have Affect On The Pound (GBP/USD)

Kamila Szypuła Kamila Szypuła 16.01.2023 12:52
The dollar started the week on the back foot to a seven-month low against a basket of major competitors in Asian trading, with the yen in particular, as investors increased bets that the Bank of Japan would further improve its yield control policy. USD/JPY Year-on-year PPI by the end of December amounted to 10.2%, above the previous forecasts of 9.5% and 9.7%. The month-on-month figure for December was 0.5%, above 0.3% expected and 0.8% earlier. The data revealed upward revisions. From a macro perspective, the soaring PPI is problematic for corporate Japan, with companies facing a dilemma related to rising production costs. The upcoming central bank meeting, expectations of an upward revision of the bank's inflation forecast, and the imminent announcement of a new BOJ chairman are also likely to fuel expectations for a policy change. A generally positive tone around the equity markets undermines the safe-haven Japanese Yen and lends some support to the USD/JPY pair. Now the pair is above 128.20. Source: investing.com Source: finance.yahoo.com AUD/USD The AUD/USD pair started the new week on a positive note and climbed to its highest level since mid-August during the Asian session, surpassing the 0.70 level. Unfortunately, the Australian pair failed to hold above 0.70 and is now trading above 0.6970. Iron ore, Australia's main export, fell slightly on Monday but remains well above its low of last October. Tomorrow, China's GDP data will be watched closely for clues on the health of the world's second-largest economy. Higher commodity prices and China's quick re-opening from Covid restrictions have also supported the currency, with Australia's main trading partner partially lifting restrictions on Australian coal exports after an unofficial ban in 2020. Markets are currently divided over whether the RBA will make another rate hike in February. Read next: McDonald's Will Be Replaced In Kazakhstan By The Russian Vkusno & Tochka| FXMAG.COM EUR/USD EUR/USD showed a decent gain after breaking the critical resistance of 1.0840 in the Asian session. Although the EUR/USD pair failed to hold above 1.0840 and then dropped significantly, it has recovered and is trading above 1.0830. The publication of the expected decline in the US consumer price index (CPI) for December increased the chances of further slowing down the pace of policy tightening by the Fed. It is worth noting that in December the Fed announced a less hawkish monetary policy. The Fed raised interest rates by 75 basis points (bp), but after observing a significant decrease in inflation, it may change the scope of the increase. In the euro area, the European Central Bank (ECB) wants to reach the final interest rate faster. ECB Governing Council member and French central bank governor Francois Villeroy de Galhau, quoted last week, said the central bank should aim to reach its final interest rate by the summer. GBP/USD GBP/USD halted the correction, recovering to 1.2200 in the European session on Monday. The US dollar continues to rebound despite betting on smaller rate hikes by the Fed. Furthermore, a bank holiday in the US market could also keep volatility high around the GBP/USD pair with limited liquidity. Attention is now focused on the testimony of Bank of England (BoE) Governor Andrew Bailey before the Treasury Select Committee of the UK Parliament. Source: investing.com, finance.yahoo.com
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

Analysis Of The CAD/JPY Commodity Currency Pair

InstaForex Analysis InstaForex Analysis 17.01.2023 08:00
After successfully breaking down the 95.38 level on the 4-hour chart, the CAD/JPY commodity currency pair is now being pulled up again to go up and above that level where now the CAD/JPY has the potential to be corrected, rally up to the 97.09 level as its main target and the 97.53-98.16 area level as the next target with a note that during the upward correction journey it does not return to its original bias (Bearish) especially if the decline breaks below the 95.08 level where if this level is successfully penetrated then all upward correction scenarios described previously will become invalid and cancel automatically.   Relevance up to 03:00 2023-01-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/117715
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Analysis Of The USD/CAD Pair: The Loonie Will Try To Go Up

InstaForex Analysis InstaForex Analysis 17.01.2023 08:01
If we look at the 4-hour chart for the USD/CAD commodity currency pair, we can see: 1. Bullish 123 Pattern. 2. Deviations appear between price movements and the Awesome Oscillator indicator. Based on the two facts above, in the near future The Loonie will try to go up to break above the 1.3439 level. If this level is successfully broken above, this commodity currency pair will have the potential to rise up to the 1.3471 level as its first target and the 1.3513-1.3562 area level as the next target but if on the way to the targets that have been described suddenly The Loonie reverses downwards to break below the 1.3316 level then all scenarios that have been described just now will become invalid and cancel automatically.
The Euro May Attempt To Resume An Upward Movement

The EUR/USD Pair Maintains The Uptrend, So The Euro Can Continue To Rise

Paolo Greco Paolo Greco 17.01.2023 08:06
M5 chart of EUR/USD On Monday, EUR/USD tried to start a corrective movement, but it was not even able to settle below the critical line. And the Kijun-Sen line was in close proximity to the price. No pullback either. It would be better to say: the price has simply stopped rising. Such movements are absolutely logical for Monday. Fundamental and macroeconomic backgrounds were absent, traders had nothing to react to. Next, there will be more news and events, but not sure that they will be important, as this week only representatives of the Federal Reserve and the European Central Bank will speak. They may release information which is not yet known to traders or may not. This will determine traders' activity and volatility of the pair this week. I still believe that the euro went up too much during the last months and we are waiting for a bearish correction. Lately, it's been obvious that the upward momentum is fading, so new long positions will require some strong reasons. So far, there are none. As the pair showed the trend movement only at night and in the morning, and spent most of the day in the flat, Monday's trading signals were not the best. The price rebounded from 1.0806 twice, creating buy signals. In the first case, it was 20 pips up, which was enough to set Stop-Loss to breakeven. In the second case, it was 8 points, but the price had not fallen below 1.0806 till the end of the day, so the position could be closed manually at zero. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, the number of long positions held by non-commercial traders increased by 16,000, whereas the number of short positions rose by 11,000. Thus, the net positions increased by 5,000. The number of long positions is 135,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 48,000 (702,000 vs. 655,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD continues the upward movement, which started last Friday. The location above the Kijun-Sen line maintains the uptrend, so the euro can continue to rise, even though there is no fundamental and macroeconomic background. The market only sees the euro. On Tuesday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0938, 1.1036, 1.1137 as well as the Senkou Span B (1.0630) and Kijun Sen (1.0800). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are no important events or reports scheduled for January 17 in the US and EU. John Williams, a member of the Fed's monetary committee, will give a speech late in the evening. Therefore, traders will have nothing to react to, but the euro may still rise. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 05:00 2023-01-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332449
The Pound Is Now Openly Enjoying A Favorable Moment

The Pound (GBP) Did Not Fall And It Kept The Uptrend

Paolo Greco Paolo Greco 17.01.2023 08:09
M5 chart of GBP/USD GBP/USD was also trading sideways for most of the day. The most active movements happened during the Asian trading session and the beginning of the European session, and we saw a flat during the day. Not surprising because this often happens on a Monday, which is when there is no news and reports and traders are just bracing for the week. The pound did not fall below the critical line during the day, so it kept the uptrend. If new bullish factors for the pound appear this week, then the upward movement will continue. Federal Reserve officials might change their stance to a more dovish one, which may be the reason for the dollar's fall. But this is just a guess. Recall that technical signals have higher priority and you should pay attention to them first. Much will also depend on the Bank of England's actions at the next meeting because there are active rumors about a possible slowdown of monetary tightening in February. If that happens, the pound might enter a bearish correction against the dollar. Speaking of trading signals, everything was pretty good. There was a sell signal around 1.2259 at the beginning of the European session, afterwards the pair fell to 1.2185 and crossed this level. It failed to fall further and ended up rising above this mark, where short positions should have closed with about 50 pips of profit. A position should have been opened by the buy signal at 1.2185, but the price was able to go only 30 pips in the right direction. Therefore, the long closed at Stop Loss at breakeven. There was also another buy signal near 1.2185, but it too did not bring any profit. COT report The latest COT report showed an increase in bearish sentiment. During the given period, non-commercial traders closed 7,600 long positions and opened as many as 1,500 short positions. Thus, the net position fell by about 9,100. This figure has been on the rise for several months, and the sentiment may become bullish in the near future, but it hasn't yet. Although the pound has grown against the dollar for the last few months, from a fundamental perspective, it is difficult to answer why it keeps rising. On the other hand, it could fall in the near future (in the mid-term prospect) because it still needs a correction. In general, in recent months the COT reports correspond to the pound's movements so there shouldn't be any questions. Since the net position is not even bullish yet, traders may continue to buy the pair over the next few months. Non-commercial traders now hold 36,000 long positions and 65,500 short ones. I remain skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD continues to grow, located above the lines of the Ichimoku indicator. At this time it would be possible to form a trend line or a channel, but they would have too strong slope angle, so we believe that it is better to orient on the lines of Kijun-sen and Senkou Span B. On January 17, the pair may trade at the following levels: 1.1974-1.2007, 1.2106, 1.2185, 1.2259, 1.2342, 1.2429-1.2458, 1.2589. The Senkou Span B (1.2023) and Kijun Sen (1.2187) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Tuesday the UK will release unemployment and payrolls data, which the market can easily ignore. There is nothing interesting in the US except a speech by Fed member John Williams later in the evening. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group Relevance up to 05:00 2023-01-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332451
Bank of Japan to welcome Kazuo Ueda as its new governor

BOJ Governor Kuroda Continues To Emphasise The Need For Wage Growth In Japan

Saxo Bank Saxo Bank 17.01.2023 08:24
Summary:  The highly-watched Bank of Japan policy decision due Wednesday has spooked tremendous volatility and warrants a cautious stance. But whether we see further policy tweaks this week or not, speculation for BOJ to remove its yield curve control will likely to build into BOJ chief nominations due February 10, spring wage negotiation in March and a change of hands at the helm in April. There is a lot at stake with regards to the upcoming Bank of Japan decision on January 18. Quiet unusual for those who have spent years covering Japan macro and realize how it was so easy to miss headlines from BOJ meetings previously. But with the implied volatility in overnight USDJPY options at over 50%, the highest levels since 2016 (see Chart below), all eyes will be glued to the BOJ announcements this week. USDJPY traded to lows of 127.23 on Monday before rising back towards 129 on Tuesday morning – all this despite the US bond markets being closed on Monday. Enough reason to believe that the focus for the Japanese yen has moved to domestic events, rather than being a pure play of yield differentials. USDJPY Overnight Option Implied Volatility. Source: Bloomberg, Saxo Markets Why BOJ could further tweak its policy this week? The surprise December move to shift the ceiling of the trading band for 10-year Japanese government bonds from 0.25% to 0.5% was the first step to removing massive stimulus Bond yields have since tested the new cap, and breached it for the last three consecutive days prompting the BOJ to announce unscheduled bond buying worth over 10 trillion yen. A local media report last week also said that the central bank will evaluate the side effects of its massive monetary policy easing, which fuelled further speculation that another policy tweak may be on the cards. December Tokyo CPI touched 4% levels and the latest PPI numbers have risen to double digits at 10.2% YoY, suggesting Japan’s inflation has not yet started to cool Increasing case of a global soft-landing would likely continue to support Japan’s exports and overall growth But the BoJ loves to surprise the markets. With so much speculation built in for this week’s tweaks, officials may rather choose to wait to see the full impact of last month’s move before taking further action. But whether the BOJ announces a change this week or not, bears are unlikely to give up with Governor Kuroda set to retire in April and the next BOJ chief will likely be under pressure to exit negative rate policy before too long. That selection process could be taking place over the next month, with nominations likely by February 10. Hawkish names would spur further expectations that the BOJ will eventually end its YCC policy. Thereafter, focus will shift to spring wage negotiations due in March. Many Japanese corporate, including Uniqlo owner Fast Retailing, Nippon Life Insurance and Suntory Holdings, have already announced wage hikes. BOJ Governor Kuroda continues to emphasise the need for wage growth in Japan to consider removing stimulus. Finally, the change of hands at the helm of the BOJ in April, with a new Governor and two new deputy Governors set to take charge, could further continue to fuel speculation of a policy shift. So the direction of where this is headed seems correct, but the timing is uncertain. It may be worth considering a bearish outlook on Japan equities (JP225) and a positive outlook on Japanese banks (Topix Bank ETF), but the current volatility levels suggest a cautious stance may be warranted this week.   Source: Macro Insights: Bank of Japan meeting playbook – bracing for volatility | Saxo Group (home.saxo)
The Price Of USD/JPY Pair Has To Fight With The Resistance Level

The USD/JPY Pair Is Likely To Witness Further Recovery

TeleTrade Comments TeleTrade Comments 17.01.2023 08:26
USD/JPY picks up bids to extend the week-start rebound from the lowest levels since May 2022. Upbeat RSI backs confirmation of bullish chart pattern to tease buyers. 200-HMA acts as final defense of buyers, 50-HMA guards immediate downside. USD/JPY refreshes intraday high around 129.15 as it pierces the neckline of a two-day-old inverse head-and-shoulders (H&S) bullish chart pattern during early Tuesday, retreating to 129.00 by the press time. Not only the inverse H&S confirmation but the upbeat RSI (14), not overbought, also adds strength to the USD/JPY rebound from the lowest levels since late May 2022. As a result, the Yen pair buyers are well-set to approach the 130.00 round figure before aiming for the theoretical target surrounding 130.40. It’s worth observing that the RSI line is approaching the overbought territory and may probe the USD/JPY bulls around 130.40, if not then the 200-HMA level surrounding 131.25 will be in focus. Additionally, the 131.00 round figure could act as an extra filter towards the north. On the flip side, the resistance-turned-support line of the stated inverse H&S, around 128.75 by the press time, restricts the immediate downside of the USD/JPY pair ahead of the 50-HMA level near 128.30. In a case where the Yen pair remains bearish past 128.30, the monthly low around 127.20 and May 2022 low near 126.35 will gain the market’s attention. Overall, USD/JPY is likely to witness further recovery but the upside room appears limited. USD/JPY: Hourly chart Trend: Further recovery expected
Economic Calendar Details and Trading Analysis - August 7 & 8

The USD/INR Pair Remains On The Front Foot Another Day In A Row

TeleTrade Comments TeleTrade Comments 17.01.2023 08:28
USD/INR picks up bids to portray three-day winning streak, extends bounce off monthly low. China’s upbeat data-dump fails to trigger risk-on mood as full markets return. US Dollar Index traces yields to pare recent losses around multi-month low. Risk catalysts are the key ahead of US Retail Sales for December. USD/INR remains on the front foot for the third consecutive day as the pair buyers approach 82.00, up 0.20% around 81.80 by the press time, during the initial trading hours of the Indian market opening on Tuesday. The Indian rupee (INR) pair’s latest rebound could be linked to the market’s inability to extend the previous risk-on mood as the US traders return to the desk after a long weekend. While tracing the link to sentiment, China’s ability to impress markets despite posting upbeat data gains major attention. Earlier in the day, China’s National Bureau of Statistics (NBS) released the fourth quarter (Q4) Gross Domestic Product (GDP), as well as Industrial Production and Retail Sales figures for December. However, downbeat comments from NBS joined the market’s doubts about the actual numbers seemed to have weighed on the risk profile. That said, China's Q4 GDP rose 2.9% YoY versus 1.8% expected and 3.9% prior. Further details suggest that the Industrial Production for December grew 1.3% YoY versus 0.5% market forecasts and 2.2% prior readings. Additionally, Retail Sales improved to -1.8% YoY for December compared to -7.8% consensus and -5.9% prior. Even so, the NBS said that the foundation for economic recovery is not solid yet. Elsewhere, the US 10-year Treasury yields defend the week-start recovery, up two basis points (bps) near 3.54% while S&P 500 Futures print mild losses as it retreats from the monthly high. It’s worth noting that shares in India remain mildly bid but those from China and Australia print losses and challenge the risk appetite. As a result, the US Dollar Index (DXY) extends the previous day’s rebound from the lowest levels since June 2022. Not only had the shift in the risk appetite but an improvement in the Oil prices and doubts over the Reserve Bank of India’s (RBI) capacity to defend the INR, considering the reliance on imports and wide budget deficit, also seem to propel the USD/INR prices of late. That said, WTI crude oil picks up bids to reverse the week-start pullback from a two-week high, up 0.60% intraday near $79.60 at the latest. Looking forward, the second-tier US data like NY Empire State Manufacturing Index for January, expected -4.5 versus -11.2 prior, for clear directions. However, major attention will be given to Wednesday’s US Retail Sales for December, expected 0.1% YoY versus -0.6% prior. Above all, February 01 will the key day for the USD/INR pair traders as it will offer the budget proposal from Indian Finance Minister and the Federal Reserve (Fed) also holds its monetary policy meeting on that day. Technical analysis A fortnight-old descending resistance line challenges USD/INR bulls around 81.90.    
The AUD/USD Pair’s Downside Remains Off The Table

The Australian Dollar (AUD) Failed To Keep The Aussie Asset On The Escalated Levels

TeleTrade Comments TeleTrade Comments 17.01.2023 08:33
AUD/USD is displaying topsy-turvy moves in a 0.6960-0.6978 range amid caution in the market mood. The formation of a Rising Channel indicates an upside trend in a limited territory. The Aussie asset has been overlapped by the 20-EMA, which indicates a consolidation added. The AUD/USD pair is displaying topsy-turvy moves in a tad wider range of 0.6960-0.6978 in the Asian session. The Aussie asset has turned sideways following the footprints of the US Dollar Index (DXY). The USD Index is showing a sideways profile amid uncertainty in the market after a stretched weekend. Also, strengthening US Treasury yields has trimmed investors’ risk appetite. The 10-year US Treasury yields have climbed to near 3.54%. Meanwhile, S&P500 futures are displaying a subdued performance amid caution in the market mood. AUD/USD is auctioning in a Rising Channel chart pattern on an hourly scale, which signals a continuation of the north-side trend in a marked boundary. On Monday, the Australian Dollar failed to keep the Aussie asset on the escalated levels after a failed breakout. The asset has been overlapped by the 20-period Exponential Moving Average (EMA) at 0.6964, which indicates a sideways auction ahead. Also, the Relative Strength Index (RSI) (14) is hovering in the 40.00-60.00 range, which adds to the volatility contraction filters. A decisive move above Monday’s high at 0.7019 will drive the Aussie towards August high at 0.7137. A break above August high will send the major toward June 9 high around 0.7200. On the contrary, a downside move below December 29 low at 0.6710 will drag the major further toward December 22 low at 0.6650 followed by November 21 low at 0.6585. AUD/USD hourly chart  
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

A Modest Uptick In Crude Oil Prices Acts As A Headwind For The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 17.01.2023 08:36
USD/CAD oscillates in a narrow band and is influenced by a combination of diverging forces. A modest uptick in crude oil prices underpins the Loonie and acts as a headwind for the pair. A softer risk tone benefits the safe-haven greenback and helps limit any meaningful downside. Traders now look to Canadian consumer inflation and the US macro data for a fresh impetus. The USD/CAD pair is struggling to gain any meaningful traction on Tuesday and oscillating in a narrow trading band through the Asian session. The pair is currently hovering around the 1.3400 mark, nearly unchanged for the day, and is influenced by a combination of diverging forces. A modest uptick in crude oil prices underpins the commodity-linked Loonie and acts as a headwind for the USD/CAD pair. The negative factor, to a larger extent, is offset by some follow-through US Dollar buying, which, in turn, lends some support to the major and helps limit the downside, at least for the time being. Data released earlier this Tuesday showed that China's economy grew at a better-than-expected pace in the fourth quarter. Furthermore, improving trends in Chinese Retail Sales and Industrial Production fueled optimism over an economic recovery in the world's largest crude importer and acts as a tailwind for oil prices. That said, worries about a potential global recession keep a lid on any meaningful upside for the black liquid. Traders also seem reluctant and prefer to wait on the sidelines ahead of the monthly OPEC report, due later this Tuesday, which will be looked upon for any change in the demand forecast for the current year. The US Dollar, on the other hand, attracts some haven flows amid the prevalent cautious market mood, though lacks bullish conviction amid hopes for a less aggressive policy tightening by the Fed. The mixed fundamental backdrop warrants some caution before positioning for a firm intraday direction for the USD/CAD pair. Moving ahead, the focus shifts to Canadian consumer inflation figures, due for release later during the early North American session. This, along with oil price dynamics, might influence the Canadian Dollar. Apart from this, the Empire State Manufacturing Index from the US  should provide some impetus to the USD/CAD pair
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The Better-Than-Expected Chinese Economic Data Lends Some Support To The NZD/USD Pair

TeleTrade Comments TeleTrade Comments 17.01.2023 08:41
NZD/USD edges higher on Tuesday, though lacks follow-through buying beyond 0.6400. The upbeat Chinese macro data lends support, though a combination of factors cap gains. Recession fears, a modest USD strength keeps a lid on any meaningful upside for the pair. The NZD/USD pair gains some positive traction during the Asian session on Tuesday, though struggles to capitalize on the move beyond the 0.6400 round-figure mark. Spot prices remain confined in a familiar trading range held over the past one-and-half week or so. The better-than-expected Chinese economic data fueled optimism over a recovery in the world's second-largest economy and lends some support to the NZD/USD pair. In fact, China's recorded a  growth of 2.9% during the fourth quarter and Industrial Production surpassed estimates. Furthermore, Retail Sales shrank less than anticipated and pointed to a positive trend among consumers. That said, the worst yet COVID-19 outbreak in China continues to weigh on investors' sentiment. This is evident from a softer tone around the equity markets, which benefits the safe-haven US Dollar and acts as a headwind for the risk-sensitive Kiwi. This, in turn, warrants some caution for aggressive bullish traders and positioning for any meaningful appreciating move for the NZD/USD pair. The USD uptick, meanwhile, is more likely to remain capped amid growing acceptance that the Fed will soften its hawkish stance amid signs of easing inflationary pressures. Moreover, several Fed officials backed the case for smaller rate hikes and reaffirmed bets for a 25 lift-off in February. This should keep a lid on the buck and limit the downside for the NZD/USD pair, at least for now. The mixed fundamental backdrop might hold back traders from placing directional bets around the NZD/USD pair and supports prospects for an extension of the range-bound price action. Moving ahead, Tuesday's US economic docket features the release of the Empire State Manufacturing Index. This, along with the broader risk sentiment, might influence the USD and provide some impetus.
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The JPY Is Gaining Strength Despite Rising Uncertainty Over The Release Of The Monetary Policy By The Bank Of Japan

TeleTrade Comments TeleTrade Comments 17.01.2023 08:50
GBP/JPY is struggling to sustain above 157.00 as UK wage growth might trigger inflation projections. The Japanese Yen is gaining strength despite rising uncertainty ahead of the Bank of Japan policy. A shortfall of labor in the UK economy is creating troubles for the Bank of England policymakers. GBP/JPY is demonstrating an Inverted Flag formation which might result in further weakness in the cross. GBP/JPY is struggling to shift its business above the immediate resistance of 157.00 in the early European session. The cross is facing barricades in escalating its recovery further amid rising chances that the Bank of England (BOE) will face stiff hurdles in achieving price stability. The Pound Sterling is expected to remain on tenterhooks as investors are waiting for the release of the United Kingdom Employment data, which is scheduled for Tuesday. Meanwhile, the Japanese Yen is gaining strength despite rising uncertainty over the release of the first monetary policy by the Bank of Japan (BoJ) of CY2023. What has escalated curiosity among the market participants is that the Bank of Japan might call for an exit from its decade-long ultra-loose monetary policy. Considering the subdued performance of the GBP/USD pair, the GBP/JPY might display some volatility ahead. Soaring wage inflation a major trouble for Bank of England policymakers The United Kingdom's economy has been through turbulent times in CY2022 due to political instability and faulty risk-management systems in the banking sector. The economy seems a laggard in controlling the stubborn inflation in comparison to other Western leaders. Monday’s speech from Bank of England (BoE) Governor Andrew Bailey in which he assures inflation softening failed to provide strength to the Pound Sterling. Bank of England’s Bailey has provided remarks of decelerating inflation on the basis of falling energy prices. However, the Bank of England Governor is still worried about rising wage growth, which could be a hurdle in decelerating inflation. He added that the 'Major risk to BoE's central case for inflation coming down is the UK labor shortage.' Brexit seems to be the major catalyst responsible for the shortage of labor in the United Kingdom's economy. The post-Brexit UK economy is facing a shortfall of more than 300,000 workers as the result of ending the free movement of labor with the EU, according to a new estimate by leading researchers, reported by Financial Times. Spotlight shifts to United Kingdom Employment data For further action in the cross, investors are keenly awaiting the release of the United Kingdom Employment data. As per the projections, the Unemployment Rate for three months (Nov) is expected to remain steady at 3.7%. While the Average Earnings excluding bonus is expected to rise to 6.3% from the prior release of 6.1%. The rationale behind higher consensus for the Average Earnings data could be the shortage of labor in the UK economy.  This might escalate the upside risk for inflation ahead as more liquidity in the palms of the households will result in bumper retail demand, which will not provide any reason to producers to trim prices of goods and services at factory gates. The higher Producer Price Index (PPI) will continue to strengthen the inflationary pressures. BOJ to provide cues about exit from easy monetary policy For the past decade, the Bank of Japan is heavily pouring liquidity into the economy to fight deflation and spurt the growth rate. This has led to a serious cut in the value of the Japanese Yen, which is the reason why the Bank of Japan and other Japanese officials have started considering an exit from the loose monetary policy. In its first monetary policy on Wednesday, the BoJ might provide cues about changing policy stance ahead. Apart from that, investors are curious about the novel leadership of the Bank of Japan. Headlines from Reuters that the new Bank of Japan governor nominee is likely to be presented to parliament Feb 10 have provided some development. Career c.bankers Amamiya, Nakaso, Yamaguchi are seen as top candidates for being the successor of current Bank of Japan Governor Haruhiko Kuroda. GBP/JPY technical outlook GBP/JPY is forming an Inverted Flag chart pattern on an hourly scale that indicates a sheer consolidation, which is followed by a breakdown in the same. Usually, the consolidation phase of the chart pattern serves as an inventory adjustment in which those participants initiate shorts, which prefer to enter an auction after the establishment of a bearish bias. The 50-period Exponential Moving Average (EMA) at 157.00 is acting as a major barricade for the Pound Sterling. Meanwhile, the Relative Strength Index (RSI) (14) is facing barricades around 60.00. A failure in stepping into the bullish range of 60.00-80.00 might trigger significant offers from the market participants
Analysis Of The USD/CHF Pair Movements

Mixed Moods In The Market Are An Additional Force To The USD/CHF Pair's Pullback Movements

TeleTrade Comments TeleTrade Comments 17.01.2023 08:54
USD/CHF takes offers to reverse the week-start rebound. DXY retreats despite firmer Treasury bond yields, sour sentiment as full markets return. Updates from Davos can entertain traders ahead of US Retail Sales. USD/CHF holds lower ground near the intraday bottom of 0.9243 as European traders brace for an active Tuesday, mainly due to the return of the US market players after a long weekend. Adding strength to the pair’s pullback moves could be the mixed sentiment in the market, which in turn probes the US dollar’s rebound from a multi-month low. That said, the market’s skepticism about Chinese growth numbers joins the lack of major data/events, as well as fears of recession, to weigh on the risk profile. The same underpins the US Treasury yields’ rebound, as well as weighs on the S&P 500 Futures as it retreats from the one-month high. “Two-thirds of private and public sector chief economists surveyed by the WEF expect a global recession this year, with some 18% considering it ‘extremely likely’ - more than twice as many as in the previous survey conducted in September 2022,” reported Reuters. On the same line, China reported upbeat prints of the fourth quarter (Q4) Gross Domestic Product (GDP), as well as Industrial Production and Retail Sales for December. However, the National Bureau of Statistics (NBS) from Beijing mentioned that the foundation for economic recovery is not solid yet, which in turn weighed on the risk profile afterward. Alternatively, receding fears of the Fed’s monetary policy contraction, especially after the recently mixed US data, allow traders to remain hopeful ahead of this week’s key data, namely US Retail Sales for December, expected 0.1% YoY versus -0.6% prior. Ahead of that, NY Empire State Manufacturing Index for January, expected -4.5 versus -11.2 prior, may entertain traders while updates from Davos could offer additional hints to the USD/CHF pair traders. Technical analysis Despite the latest weakness, the USD/CHF pair is yet to defy the previous day’s bullish signals, flashed via the Doji candlestick on the Daily formation, which in turn keeps the pair buyers hopeful of poking a one-week-old resistance line near 0.9320 by the press time. Alternatively, Monday’s low of 0.9218 puts a floor under short-term declines of the pair.
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

The EUR/USD Pair Has A Potential For The Further Upside Movement

Peter Jacimovic Peter Jacimovic 17.01.2023 09:05
Technical analysis: EUR/USD has been trading sideways at the price of 1.0820 but I see potential for the breakout play to the upside. Trading recommendation: Due to the breakout of the Pitchfork channel to the upside and the bullish trend in the background, I see potential for the further upside movement. Watch for the potential buying opportunities with the upside objective at 1.0870. Stochastic is showing neutral reading Key support is set at the price of 1.0805   Relevance up to 08:00 2023-01-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/308849
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Forex: The Bank Of Canada (BoC) Looks Set To Face A Hike Or No-Hike Dilemma

ING Economics ING Economics 17.01.2023 10:00
Chinese activity data for 4Q22 released overnight was much better than expected and supports the proposition that the 2023 Chinese growth story will support pro-cyclical currencies, including the euro. Ongoing declines in natural gas prices are also helping. Today's focus will be on digesting UK labour market data, the German ZEW, and Canadian CPI Activity data released overnight supports the view that China's zero-Covid reversal will spark resurgent Chinese demand USD: Quiet start to the week still favours pro-cyclical currencies FX markets have had a quiet start to the week – perhaps awaiting edicts from Mount Davos? However, Chinese data released overnight was material and very much supports this year's hottest trend that China's zero-Covid reversal will spark resurgent Chinese demand. My colleague Iris Pang was very impressed by the December retail sales and fourth-quarter GDP data, so much so that she has revised up the 2023 China GDP forecast to 5%. The December data, in particular, supports the proposition that despite the pick-up in case numbers, the freedom of movement story is positively dominating the Chinese demand story. The Chinese data did not, however, trigger any follow-through buying of the renminbi or Asian currencies in general. Rather than concluding that this story has already run its course in FX markets, we would prefer to see price action as merely quiet before the Chinese New Year starting next week, and the big event risk in early Asia tomorrow, which is the Bank of Japan (BoJ) meeting. The dollar itself is steady. The US data calendar only really kicks off with what may be a soft December US retail sales release tomorrow. And there are no Fed speakers during European hours today. Some further DXY consolidation looks likely in a 102.00-102.50 range today. A downside break could emerge in Asia tomorrow, were the BoJ to again tweak its 10-year JGB yield target. Chris Turner  EUR: Revising the EUR/USD forecast higher Yesterday we published some substantial upside revisions to our EUR/USD forecast profile. Broadening signs of slowing US price pressures, stronger signs of US recession, a better Chinese demand outlook and a better energy situation all made our sub-consensus EUR/USD forecasts untenable. We now favour EUR/USD moving higher through 2Q23 towards the 1.15 area – but the gains may stall there in 2H23 given what could be trouble with the US debt ceiling in late summer and higher energy prices next winter. Back to the shorter term, the EUR/USD backdrop remains supportive. As discussed above, China's demand trends are supportive of pro-cyclical currencies like the euro. That better outlook for the eurozone could appear in today's German January ZEW investor survey, where the expectations component is expected to have improved from -23 to -15.  Also positive is the continuing fall in European gas prices. Two stories caught our eye today. The first is that European natural gas inventories are now 82% full versus the average levels of 63% normally seen at this stage of the heating cycle. The second is that Chinese importers are redirecting LNG shipments to Europe, given local inventories seem sufficient. That is a surprise. The continuing fall in European natural gas remains a positive development for the eurozone trade balance and is euro supportive. EUR/USD may consolidate in a 1.0780-1.0870 range today – but the near-term macro trends remain supportive. Chris Turner GBP: 50bp hike still in play for February Our UK economist, James Smith, describes today's release of November jobs figures as "another month of relative resilience in the UK jobs market". Wage growth was a little higher than expected and supports the latest findings from the Bank Of England's Decision Maker Panel survey. Depending on the resilience of tomorrow's release of December UK CPI data it seems too early to dismiss the risk of another 50bp rate hike from the Bank of England on 2 February. Currently the market prices in around 42bp of tightening at that meeting. Today's data saw EUR/GBP drop 15 pips – a move that makes sense. EUR/GBP is trading close to 0.89 because of December's hawkish ECB shift. The longer the BoE stays in hawkish mode, the more support sterling can get. Expect EUR/GBP to trade on the soft side of an 0.8850-0.8900 range today, with tomorrow's UK CPI release proving the next major input. Chris Turner CAD: Inflation key for BoC January move The Bank of Canada (BoC) looks set to face a hike/no-hike dilemma at next week’s (25 January) policy meeting. Signs of slowing economic activity were taken on board in the latest BoC statement and clearly emerged in yesterday’s BoC Business Outlook survey, where the future sales index dropped to the lowest since the pandemic and most interviewed firms said they expect a recession in Canada. However, the jobs figures came in very strong in the December read, with robust full-time hiring keeping the unemployment rate around cyclical lows. The slowdown in wage growth from 5.4% to 5.2% did not seem enough of a silver lining, and markets have been reluctant to price out the 19bp currently embedded in the OIS curve. Today’s CPI read will be key. Consensus expectations are centred around a deceleration in headline inflation from 6.8% to 6.4%, and from 5.0% to 4.9% in the core (median) rate. Any signs of resilience in inflation would likely see markets fully price in a 25bp hike in January. Below-consensus reads should support CAD short-dated bonds, but it seems hard that investors will completely rule out a hike next week. The impact on CAD should be quite visible in both directions, although external forces should remain the key drivers on the loonie. Building USD weakness may favour a USD/CAD contraction to 1.31-1.33 in the coming weeks, although a surprise hold by the BoC is a clear upside risk for the pair.  Francesco Pesole Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Results Of The March Meeting Of The Bank Of Japan Are Rather Symbolic

The USD/JPY Pair Can Fall Sharply Ahead Of The Results Of The BOJ Meeting

InstaForex Analysis InstaForex Analysis 17.01.2023 10:59
USD/JPY traders are feeling nervous. The Bank of Japan will sum up the results of its 2-day monetary policy meeting on Wednesday. Now any surprise from the BOJ could have a significant effect. The culminating event of the week in the currency market should be the Japanese central bank's monetary policy meeting, which kicked off on Tuesday. With inflationary pressures intensifying in Japan and chaos reigning in the local bond market, many investors believe that the BOJ could announce a major policy shift this week, like it did last month. Recall that the BOJ tweaked its Yield Curve Control policy (YCC) in December, causing the yen to rise sharply against the dollar. Since then the pair has fallen over 6% and its future prospects are not bright at all. Investors clearly see that the BOJ is in a difficult predicament. Its decision to widen its tolerance range for 10-year bond yields was dictated by a desire to improve market functioning, as the bond market faced a liquidity problem. But the measure has made the situation even worse. By changing the YCC, the BOJ stoked the flames of market speculation about its possible surrender. This in turn provoked a massive sell-off in 10-year Japanese Government Bonds (JGB), which pushed their yields up. Since last week, the central bank has been trying its best to keep the index within the new limits by conducting daily emergency operations to buy JGBs. However the yield of 10-year JGBs is still growing above the set ceiling. That's what leads investors to think that the BOJ will be forced to further increase the permissible range of long-term bond yield fluctuations from its 0% target at the January meeting. If the BOJ makes such a decision again, it will serve as a great catalyst for the yen. In the short term, the USD/JPY risks falling below its 7-month low at 127.22. An even greater threat to the pair is the development of a radical scenario, which implies a complete abandonment of the BOJ's YCC policy. If the central bank decides to burn all bridges, USD/JPY will go into a prolonged free-fall. "The 10-year JGB yield could rise as high as 1% if the BOJ abandons yield curve control this week," according to estimates by Daiwa Securities strategist Eiichiro Tani. This negatively affects the movement of the pair. According to analysts at Goldman Sachs, the next YCC correction will help the yen strengthen against the dollar by more than 3%, to the level of 125, and an abandonment of the YCC will open a fast way to even higher levels for the Japanese currency. It's worth noting that US bank analysts don't even consider the latter scenario. Most of Goldman Sachs' analysts expect the BOJ to keep YCC in place with possible further tweaks to improve its sustainability. Financial analyst Barbara Rockefeller is of the same opinion. She believes that we should not expect the BOJ to take impulsive actions in the form of abandoning the YCC or a sharp change in the monetary course. "Allowing a giant move from 25 bp to 1% in under a month is too wild for any central bank, let alone the staid BoJ. So, abandonment is almost certainly out of the question, but that doesn't mean the market will not be expecting it and testing prices, forcing the bank to buy more bonds. We expect a whole lot of backroom arm twisting," Rockefeller said. According to ING economists, the USD/JPY pair can fall sharply ahead of the results of the BOJ meeting. They suspect USD/JPY can trade down to 126.50 before Wednesday. As for the dynamics of the dollar-yen asset after summing up the results of the BOJ meeting, everything depends on the market's reaction to the rhetoric of the Japanese officials. If it is considered hawkish, the quote will fall, as I mentioned before. If the central bank stays true to its dovish principles, in the short-term, the pair may show a steady recovery from the recent lows. By the way, this scenario is followed by all economists recently surveyed by Bloomberg. Experts expect the BOJ to refrain from any changes at its January meeting. But the probability they are wrong is quite high, because last month none of the 47 economists surveyed by Bloomberg was able to predict YCC changes   Relevance up to 08:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/332473
Bestway Might Have Larger Designs On The UK's Second Biggest Supermarket

In UK Employers Are Starting To Lay Off Workers, Wages Are Also Reported To Have Fallen

Jakub Novak Jakub Novak 17.01.2023 11:06
Pound rallied on Monday after news emerged that average wages in the UK continued to rise at an almost unprecedented rate. However, this puts further pressure on the Bank of England in terms of interest rates, forcing it to consider another increase at its meeting scheduled for next month. Reportedly, average household income excluding bonuses was 6.4% higher in the last three months to November 2022, which is the biggest increase since records began in 2001, not counting the peak of the coronavirus pandemic. This indicates that the labor market remains too challenging for the central bank, especially since inflation could hit double-digits if wages continue to rise at the current rate.  Labor shortages in the UK pushed unemployment to fall to a record low In a bid to prevent an inflationary spiral, the central bank raised rates from 0.1% to 3.5% late last year and is expected to announce a further 50 basis point increase as early as February. However, labor shortages in the UK pushed unemployment to fall to a record low below 4%, giving workers unprecedented market power. The pressure was most acute in the private sector, where wages rose by 7.2%. In the public sector, growth was only 3.3%, well below the current inflation rate of 10.7%. The decline in living standards has triggered a wave of strikes in recent months as workers insist on wage increases to offset inflation. Wages are also reported to have fallen by 2.6% compared to last year instead of rising at the end of December. The Bank of England's latest forecast says the unemployment rate will exceed 6% According to reports, the number of new vacancies fell by 75,000 to 1.16 million in December. This suggests that employers are starting to lay off workers as the economic situation worsens. The rate has jumped to 3.4% per thousand employees in the three months to November, up 1.1% from the previous three-month period. The Bank of England's latest forecast says the unemployment rate will exceed 6% over the next three years. GBP/USD Going back to GBP/USD, attempts to get out of the horizontal channel have been unsuccessful. Now, buyers need to stay above 1.2160 in order to maintain their advantage. A breakdown of 1.2225 will push the pair to 1.2300 and then towards 1.2350. Meanwhile, sellers taking control of 1.2160 will lead to a decline to 1.2090. EUR/USD As for EUR/USD, there is a chance of further growth, but buyers have to hold above 1.0810. That will spur the pair to rise to 1.0840 and 1.0885. Meanwhile, a decline to 1.0810 will put pressure on the pair, bringing it towards 1.0755 and 1.0720, or possibly to 1.0685   Relevance up to 08:00 2023-01-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332485
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

The European Central Bank Have Provided Support For The EUR/USD Pair And The Euro

InstaForex Analysis InstaForex Analysis 17.01.2023 12:05
The US currency is working hard to stay afloat and not slide to the lowest levels. Nevertheless, the greenback occasionally slumps, unwittingly giving a chance to the euro. The latter willingly uses this opportunity and tries to rise as much as possible, having accumulated a certain amount of growth. Analysis The greenback started the week lower, hitting a 7-month low against other currencies, but stabilized later on. On Monday evening, January 16, EUR/USD soared to a new 9-month high of 1.0874 but then pulled back to the critical 1.0816 mark. As a result, the pair lost 0.16%, but started recovering by the next trading session. On Tuesday morning, January 17, EUR/USD traded in the range of 1.0829-1.0830, having partly recouped its earlier losses. The technical situation According to analysts' estimates, the technical situation has stabilized slightly. At a certain moment, the pair reached the highest level since April 2022, but then retreated to the lower limit of the current range. This is because risk appetite has decreased, which supports the dollar and is a "headwind" preventing the euro's growth. Disappointing US macro data, published last week, contributed to the dollar's downfall. Recall that in December 2022, US consumer prices fell for the first time in more than 2.5 years. This had a significant impact on the greenback, as aggressive Federal Reserve rate hikes were the key driver of its growth (by 8%) in 2022. EUR/USD The US currency is gradually recovering from a seven-month low. This puts significant pressure on the EUR/USD pair. Traders and investors are worried about the economic problems triggered by the outbreak of COVID-19 in China, as well as the protracted Russian-Ukrainian conflict. This increases fears about the global economic downturn and restrains optimism in the markets. In such a situation, experts record a massive outflow of capital to USD as a safe asset. This limits the euro's growth and worsens its future prospects. US inflation  On the bright side, US inflation is gradually easing, which recently reached its highs in the last 40 years. Against this background, investors expect the Fed to pause rate hikes. In addition, market participants believe that interest rates will not be raised immediately, but gradually and by a certain amount. Most economists (91%) expect a 25bp hike and only 9% expect a 50bp hike. The Fed would soften its hawkish stance According to experts, a significant recovery of the dollar is still elusive. Market participants used to be confident that the Fed would soften its hawkish stance after seeing signs of continued easing of inflation pressures. However, assumptions that the central bank is close to ending its rate hikes were not justified. At the moment, it will probably continue to raise rates, but may slow the pace of rate hikes (only by 25 basis points in February). According to economists at Deutsche Bank, most of the current factors are in favor of a continued decline in the greenback and a relative stabilization of the euro. A combination of China's economic reset after the removal of covid restrictions and an improving energy situation in the EU have set the USD back. In addition, recent hawkish statements from the European Central Bank have provided support for EUR/USD and the euro. At the same time, there is growing confidence in the markets that inflation in the US will peak, so EUR/USD could rise to 1.1500 in 2023 and the dollar could remain in a downtrend Relevance up to 09:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/332491
Gold's Hedge Appeal Shines Amid Economic Uncertainty and Fed's Soft-Landing Challenge

China Posts Encouraging Data, The DAX Extended Its Advance To The Fresh Highs

Swissquote Bank Swissquote Bank 17.01.2023 12:29
European stocks kick off the week on last week’s positive vibes, adding more gains to their best ever start to a year. Dax The DAX extended its advance above the 15000 mark, to the fresh highs since before the war in Ukraine started. French CAC40 And the French CAC40 took over the 7000 resistance and is only around 4% below the 2022 peak. European stock The recovery in European stocks is impressive, yet could it last? China On the data front, China grew 3%, well below the government’s 5.5% target last year, but the Q4 rebound was well above market expectations. Retail sales contracted significantly less than expected as well, while unemployment unexpectedly fell, giving signs that the end of Covid zero measures are feeding into the data. Forex In the FX, the US dollar was better bid yesterday, but price rallies could be good to sell, especially against oil and commodity currencies, that should extend rebound on Chinese reopening story. Watch the full episode to find out more! 0:00 Intro 0:16 Could European stocks extend rally? 2:14 Energy, commodities swing between recession fears & China reopening 4:36 Stay away from meme stocks 5:57 Bitcoin catches up with stocks, but downside risks prevail 7:07 China posts encouraging data 8:18 Selling USD against energy & commodity currencies? Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #China #growth #recession #fear #WEF #Fed #ECB #expectations #USD #EUR #JPY #CAD #AUD #crude #oil #copper #DAX #CAC #rally #earnings #season #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Saxo Bank Podcast: The Upcoming Bank Of Japan Meeting, A Look At Crude Oil, Copper And More

Saxo Bank Podcast: The Upcoming Bank Of Japan Meeting, A Look At Crude Oil, Copper And More

Saxo Bank Saxo Bank 17.01.2023 13:06
Summary:  Today, we look at the upcoming Bank of Japan meeting, noting the extreme anticipation around the event, together with the likelihood of considerable intraday volatility in the wake of the event, even if the Bank of Japan tries to deliver as little as possible, as we all know that new leadership and a likely further tightening of policy is in the pipeline with Kuroda's replacement after April. A look at crude oil, copper, upcoming earnings and macro data and more on today's pod, which features macro strategist Charu Chanana on the BoJ, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it. Read next: Alibaba And Its Share Buyback Program Which Is Supported By Ryan Cohen, Microsoft Corp. Plans To Incorporate AI Tools| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Bank of Japan in a corner, can’t avoid volatility | Saxo Group (home.saxo)
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

The Bank Of Japan Is Expected To Increase Its Inflation Forecast At The Meeting

Kenny Fisher Kenny Fisher 17.01.2023 13:13
The Japanese yen is in calm waters on Tuesday, as the Bank of Japan’s two-day meeting starts today. In the European session, USD/JPY is trading at 128.76, up 0.18%. Markets eye BOJ meeting The markets are keeping a close eye on the BOJ meeting. The central bank shocked the markets at the December meeting with a policy tweak that widened the bank around 10-year JBs to 0.50%, up from 0.25%. The speculation that the BOJ could follow through with additional moves at this meeting has pushed USD/JPY back below the 130 level. On Monday, USD/JPY touched 127.21, its lowest level since May. It seems likely that further moves are coming from the BOJ, but it’s unclear whether the BOJ will announce the changes on Wednesday or will wait until the new BOJ Governor takes over in April. Unlike the Fed, the BOJ appears to have no interest in telegraphing its plans and is keeping mum, which is making this meeting that much more dramatic. I expect to see some volatility from USD/JPY on Wednesday – if the BOJ does make any policy tweaks, the yen will likely continue to improve. Conversely, if the BOJ maintains the status quo, traders will be disappointed at the lack of action and the yen would likely lose ground. The BOJ has spent over six trillion yen ($86 billion) since Friday to defend its new 0.50% cap on 10 JGB, as sellers continue to flood the bond market. The central bank could widen the band to 0.75% or make a radical change and discard its yield curve control altogether. Let’s not forget that the BOJ is expected to increase its inflation forecast at the meeting, which would mark a step closer to normalization and would be bullish for the yen. USD/JPY Technical There is resistance at 129.40 and 130.82 128.40 and 127.54 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Bank Of England Can Tighten Monetary Policy Considerably More Gradually Than It Is Now Doing

GBP/USD Is Strengthening And Trading Above 1.2260, Investors Took A Breather Ahead Of The Bank Of Japan Meeting

Kamila Szypuła Kamila Szypuła 17.01.2023 14:11
The US dollar is under pressure as the market seems to expect the Federal Reserve to ease its aggressive monetary policy later this year. USD/JPY The yen was close to a seven-month high as investors took a breather ahead of a potential change in policy at the Bank (BOJ). At the last meeting, the Yield Curve Control (YCC) program was changed, setting a range of +/- 0.50% around zero for Japanese government bonds (JGB) for up to 10 years. They previously targeted +/- 0.25% around zero. While they are not expected to change their prime interest rate, which currently stands at -0.10%, another change to the long-term yield target range is being discussed. Today, USD/JPY managed to break above 129 but failed to hold. The USD/JPY pair stabilized above 128.50. AUD/USD The Australian dollar jumped towards yesterday's six-month high against the US dollar, with China's GDP much better than forecast. China's GDP printed at 2.9% year-on-year in the fourth quarter versus expectations of 1.6% and 3.9% previously. At the same time, other Chinese data were released, and industrial production for the year to end-December was 1.3% instead of the expected 0.1%. On the monetary policy side, the local market favors a quarter-point hike from the Reserve Bank of Australia (RBA) to 3.35% in February, with some chance it could stop at its first meeting since May. Australian government bond yields remained stable, albeit close to last week's one-month lows. Monday's drop in the AUD/USD pair did not affect the prevailing uptrend. The pair of the Australian in the morning session was approaching the key level of 0.6975, the pair managed to exceed this level, but did not hold it and fell in the European session. Currently the Aussie Pair is trading above 0.6955. Read next: Alibaba And Its Share Buyback Program Which Is Supported By Ryan Cohen, Microsoft Corp. Plans To Incorporate AI Tools| FXMAG.COM GBP/USD The British pound edged higher on Tuesday after data showed a tight labour market and accelerating pay growth. GBP/USD trades above 1.2200, bouncing back from daily lows after the UK jobs report. The UK unemployment rate stabilized at 3.7% in November, while average hourly earnings rose more than expected. GBP/USD raises bids to reverse early-week pullback from monthly high. Broad US dollar pullback lays foundation for cable pair recovery ahead of key jobs report. Talks of Brexit labor shortages, UK labor strikes and British Prime Minister Sunak's difficulties are being explored by the GBP/USD bulls. The Bank of England is expected to raise interest rates at its tenth consecutive meeting on February 2 in an attempt to bring inflation down further. Today's UK employment data becomes more important for GBP/USD traders. The pair traded close to 1.2200 in both the Asian and European sessions and also fell below 1.2200. Currently, the cable pair is rising and trading above 1.2260 EUR/USD The latest German economic sentiment index, ZEW, rose in January, beating both last month's reading and market forecasts. The positive reading, the first since February 2022, points to "a notable improvement in the economic situation over the next six months" Today's ZEW release had little or no impact on the euro, which has been treading water against the US dollar so far. EUR/USD remains above 1.0800. The euro is expected to take center stage as the European Central Bank (ECB) aims to peak interest rates by the summer. The EUR/USD pair started Tuesday trading around 1.0830. In the European session it fell below this level. It managed to cross 1.0840 but dropped to around 1.0835 Source: investing.com, dailyfx.com, finance.yahoo.com
FX Daily: Upbeat China PMIs lift the mood

In 2023 There Will Be Conditions For Economic Growth In China

InstaForex Analysis InstaForex Analysis 17.01.2023 14:25
The fundamental background for the EUR/USD pair remains ambiguous. On the one hand, the dollar is under pressure amid growing confidence in the slowdown of the Fed rate hike to 25 points. On the other hand, traders need additional information impulse for the upward movement. The pair consolidated within the 8th figure (for the first time since last April), but to conquer the 9th price level, not to mention the 10th figure, they need a powerful informational trigger. Chinese anti-records Experts pinned certain hopes on China, which today published key data on its economic growth. However, these hopes were not justified. The data turned out to be negative, but for the most part they came out in the green zone. Neither the dollar nor the euro were the beneficiaries of today's release. In terms of figures, the situation is as follows. China's GDP grew 3.0% last year, down from 8.4% in 2021. If we exclude the 2.2% growth after the first blow of the coronavirus crisis in 2020, this is the worst performance since 1976. Clearly, this result reflected the effects of the "zero tolerance" policy on COVID, which Beijing abandoned only at the end of last year. A sharp 180-degree turn suggests that in 2023 there will be conditions for economic growth in China. In addition, according to The Wall Street Journal, the Chinese authorities have significantly eased pressure on technology companies, relaxed strict regulation of real estate and recently lifted the ban on coal imports from Australia (which was in effect for more than two years). However, another question remains regarding the overall global demand for Chinese goods, given the global economic slowdown and the threat of recession in the world's largest economies. In addition, another alarming signal was published today: it became known that the population of the People's Republic of China decreased last year for the first time in more than 60 years. According to a number of analysts, this is a historic shift, which in the future will have long-term consequences for both the Chinese and the global economy. According to data, Chinese population decreased by 850,000 people last year to 1.41 billion. The reverse side of a coin However, despite the set anti-records, the safe dollar could not benefit from the situation, including in pair with the euro. Several factors acted as a counterbalance. First, almost all the components of today's release came out in the green zone. China's fourth-quarter GDP beat forecasts despite growth at the slowest pace since the 1970s, with China's economy expanding 2.9% (slowing down from 3.9% growth in the third quarter), while the consensus forecast was 1.8%. As mentioned above, in 2022, the Chinese economy grew by 3.0%, while the forecast was at 2.7%. Other indicators are also green: for example, retail sales in December fell by 1.8%, while experts were more pessimistic in their estimates, expecting a decline of 9.5%. In turn, the volume of industrial production grew by 1.3% (in annual terms), with a weak growth forecast of 0.5%. The official unemployment rate fell to 5.5% (forecast was 5.8%). The second support factor that somewhat smoothed over the negative emotions on the market from today's release was the fact that Beijing still abandoned the frankly destructive policy of zero-COVID policy. Thus, contradictory signals from China could not tip the scales—neither in the direction of buyers nor in the direction of sellers of EUR/USD. Moreover, some support for the euro is provided by the ECB representatives, who voiced hawkish comments. In particular, European Central Bank chief economist Philip Lane said in an interview with the Financial Times that "interest rates should be much higher than they are now." Earlier similar messages were voiced by other representatives of the European regulator, in particular Martins Kazaks, Isabel Schnabel, Robert Holzmann, Olli Rehn and Francois Villeroy de Galhau. Conclusions The pair is holding within the 8th figure, against the background of the general weakness of the greenback and the 90% probability of the implementation of the 25-point scenario at the February meeting of the Fed. The hawkish comments of the ECB only fuel interest in buying EUR/USD, but do not allow the pair's bulls to organize a large-scale counterattack. In my opinion, short positions on the pair are too risky and fundamentally unreasonable. Whereas it is advisable to consider longs only after overcoming the 1.0860 resistance level, which corresponds to the upper line of the Bollinger Bands indicator on the D1 timeframe. It is likely that the price turbulence (which may not be in favor of the dollar) will be provoked by representatives of the Fed, many of whom will voice their position in the second half of the week. The market is expecting speeches by Lorie Logan, Susan Collins, Lael Brainard, Patrick Harker, Christopher Waller and John Williams. Perhaps they will shift the balance of power towards EUR/USD buyers. However, in the current, rather shaky situation, it is best to take a wait-and-see attitude Relevance up to 10:00 2023-01-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332508
At The Close On The New York Stock Exchange Indices Closed Mixed

At The Close On The New York Stock Exchange Indices Closed Mixed

InstaForex Analysis InstaForex Analysis 18.01.2023 08:00
At the close on the New York Stock Exchange, the Dow Jones fell 1.14%, the S&P 500 fell 0.20%, the NASDAQ Composite index rose 0.14%. Dow Jones McDonald's Corporation was the top performer among the components of the Dow Jones index today, up 5.22 points or 1.94% to close at 274.11. Chevron Corp rose 2.93 points or 1.65% to close at 180.49. Apple Inc rose 1.18 points or 0.88% to close at 135.94. The least gainers were Goldman Sachs Group Inc, which shed 24.08 points or 6.44% to end the session at 349.92. The Travelers Companies Inc (NYSE:TRV) was up 4.60% or 8.92 points to close at 185.00 while Verizon Communications Inc was down 2.41% or 1.01 points. and finished trading at 40.85. S&P 500  Leading gainers among the S&P 500 components in today's trading were Tesla Inc, which rose 7.43% to 131.49, Morgan Stanley, which gained 5.91% to close at 97.08, and NVIDIA Corporation, which rose 4.75% to end the session at 177.02. The least gainers were Emerson Electric Company, which shed 6.82% to close at 91.24. Shares of Goldman Sachs Group Inc lost 6.44% to end the session at 349.92. Mohawk Industries Inc lost 6.30% to 111.18. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Celyad SA, which rose 137.80% to hit 1.90, Calyxt Inc, which gained 90.25% to close at 0.35, and Avenue Therapeutics Inc, which rose 63.11% to end the session at 1.99. Shares of Viveve Medical Inc were the least gainers, losing 70.54% to close at 0.26. Shares of Edesa Biotech Inc lost 42.06% to end the session at 1.46. Quotes of Angion Biomedica Corp fell in price by 30.88% to 0.70. Numbers On the New York Stock Exchange, the number of securities that rose in price (1,579) exceeded the number of those that closed in the red (1,484), while quotes of 99 shares remained virtually unchanged. On the NASDAQ stock exchange, 1960 companies rose in price, 1775 fell, and 168 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.67% to 19.36. Gold Gold futures for February delivery lost 0.53%, or 10.25, to hit $1.00 a troy ounce. In other commodities, WTI crude for March delivery rose 1.42%, or 1.14, to $81.25 a barrel. Futures for Brent crude for March delivery rose 2.56%, or 2.16, to $86.62 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.23% to 1.08, while USD/JPY fell 0.28% to hit 128.18. Futures on the USD index rose by 0.18% to 102.13 Relevance up to 03:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/309013
The Price Of USD/JPY Pair Has To Fight With The Resistance Level

The Price Of USD/JPY Pair Has To Fight With The Resistance Level

InstaForex Analysis InstaForex Analysis 18.01.2023 08:01
The USD/JPY pair strengthens the reversal signs every day. Now it is the reversal of the signal line of the Marlin oscillator from the lower limit of its own ascending channel, confirmed price reversal from the enclosed line of the global price channel around 127.14, settling above the median line of the descending price channel in green. Now the resistance and target levels are as follows: 129.80 - the price channel line, 131.10 - the upper limit of the price channel, 133.65 - the embedded line of the global channel, where the MACD line is approaching. On the four-hour chart, the Marlin oscillator broke into the green zone this morning. This is a good thing, since the price has to fight with the resistance of 129.80, near where the MACD line is.   Relevance up to 03:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332562
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

GBP/USD Pair's Analysis: The 1.2410 Target Is Available

InstaForex Analysis InstaForex Analysis 18.01.2023 08:04
The British pound gained 93 points on Tuesday. On the daily chart, the Marlin oscillator rose as well. The price is noticeably above the balance indicator line. The 1.2410 target is available. A lot of important data on the UK and US economy will come out today, which, based on the forecasts, may contribute to this growth. UK Consumer Price Index for December is expected to decrease from 10.7% y/y to 10.5% y/y, CPI monthly growth may show 0.4%, Producer Price Index for November may increase from 14.8% y/y to 16.4% y/y. In the US, the PPI could decline 0.1% in the December estimate (6.8% y/y vs. 7.4% y/y in November), and December retail sales could show a decline of 0.8%. The first signs of a breakdown of the double divergence appeared on the four-hour chart. The signal line of the Marlin oscillator went above the line forming the divergence. At the same time, the line itself is in the positive area. The price is rising above both indicator lines - the balance line and the MACD line.     Relevance up to 03:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332564
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD Pair Is Shifting Into A Downtrend

InstaForex Analysis InstaForex Analysis 18.01.2023 08:06
Yesterday, the euro closed the day lower, with an attempt to enter the target range of 1.0758/87. Trading volumes were slightly above the average. This does not mean that big players have already closed their long positions, but it suggests that their partial repositioning is likely. There is still a probability of forming an updated price divergence with the Marlin oscillator on the daily chart. But with the signal line of the oscillator moving below the zero line, and once the price settles under 1.0758, this probability will be neutralized. The nearest target is 1.0660, followed by 1.0595. The MACD line is approaching 1.0595, accordingly, crossing this support will be the key point in breaking the uptrend. The price has formed a standard divergence with the oscillator. On the four-hour chart, the Marlin has settled in the area of the downtrend, the price has settled under the balance indicator line (red sliding), indicating a shift into a downtrend. Moving the price under the lower limit of the support range of 1.0758/87, where the MACD line is approaching, will inspire the bears to cross the lower supports as well   Relevance up to 03:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332566
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

The AUD/JPY Currency Pair Is Moving In A Downward Trend

InstaForex Analysis InstaForex Analysis 18.01.2023 08:14
It can be seen clearly on the daily chart that the AUD/JPY currency pair is moving in a downward channel which means the bias is still bearish but currently it is corrected upwards especially since the emergence of the Bullish 123 pattern which was followed by the appearance of the Ross Hook where this level will be tested in the near future. tested by AUD/JPY so that if the 91.76 level is successfully penetrated above it then AUD/JPY in the next few days has the potential to appreciate up to the 93.50 level as the main target and the 95.03 level will be the next target to be tested but please pay attention to the emergence of the AUD Ascending Broadening Wedge pattern /JPY has the potential to fall back to its main bias (Bearish) where if the 86.97 level is penetrated below then all scenarios of an upward rally that have been described previously will become invalid. Relevance up to 05:00 2023-01-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/117807
Agriculture: Russia's Exit from Black Sea Grain Deal Impacts Grain Prices

Representatives Of The ECB Claim That By The End Of 2023, Inflation Should Have Reached The Target Level

Paolo Greco Paolo Greco 18.01.2023 08:23
On Tuesday, the EUR/USD currency pair continued to rise and showed no signs of wanting to begin a reversal. The first two trading days of the week had essentially no fundamental or macroeconomic background, but traders still could not see any reason to fix at least some of the profit on long holdings. Therefore, the technical situation is unchanged at this time. While we have been anticipating a significant downward correction for more than a month, we also recognize that this is merely a basic hunch. We cannot think of any justifications for the European currency to have grown so strongly in such a short amount of time. There is now no sell signal, but the price is still above the moving average line on the 4-hour TF and above the lines of the Ichimoku indicator on the 24-hour. Many analysts' recent economic and currency forecasts have made mention of the Chinese economy. They present completely disparate arguments at the same time that frequently conflict with one another. For instance, the removal of COVID's "zero tolerance" policy is considered a benefit for the world economy and volatile currencies. Everyone is aware that the US dollar often emerges as the most secure and stable currency when uncertainty occurs. Right now, the situation is reversed. The Celestial Empire's economy is expanding, but at the same time, birth rates are declining, and population growth is declining for the first time in 60 years. We've long accepted that the Chinese population is growing, but since 400 million of the nation's 1.5 billion people are seniors, international experts are now raising the alarm. Since there will always be more retirees, if there is no growth, there will also be no economic growth and a recession. The Chinese government has already started encouraging more children to be born by removing limitations on having one or two children in a family and instead giving financial advantages to each child. This news, in our opinion, only serves as background information and does not directly affect the movement of the euro/dollar pair. The ECB officials' language continues to be "hawkish." The ECB and Fed's interest rates are currently one of the most important factors affecting the foreign currency market, as has been stated numerous times. We think that market participants are still buying euros because they anticipate a significant rate increase in the European Union but not a comparable process in the United States. It's straightforward: Since the Fed's rate has nearly reached its maximum, it makes no sense to raise it quickly. The next two meetings are expected to see two increases of 0.5% each, followed by an increase of 0.25%, according to the ECB rate. Representatives of the ECB claim that by the end of 2023, inflation should have reached the target level. They also anticipate that a dramatic fall in the price of gasoline and oil will have a favorable impact on the inflation rate. While we somewhat concur with Philip Lane and Isabel Schnabel, we think that inflation may not be moderate enough to prevent rate increases in the coming months. In any scenario, the euro currency will no longer have any motivation to demonstrate growth if the ECB also completes the tightening program. So far, we are unable to identify any causes for the European currency to increase during the majority of this year. We might claim that it is currently partially fortunate because the market frequently ignores favorable news for the currency. Lucky is the lucky one, though. One cannot dismiss the expansion of the euro as completely irrational. It is unstable and not very promising, in our opinion. One of the riskier currencies is still the euro, and nobody can predict what surprises 2023 will bring. We are certain that the euro may plunge once more if new global tensions develop. The euro could quickly decline once the ECB has finished hiking rates. The euro may drop quickly if the EU economy does go into recession. As of January 18, the euro/dollar currency pair's average volatility for the previous five trading days was 89 points, which is considered "normal." So, on Wednesday, we anticipate the pair to fluctuate between 1.0704 and 1.0882. The Heiken Ashi indicator will turn back up to signal the start of the upward movement. Nearest levels of support S1 – 1.0742 S2 – 1.0620 S3 – 1.0498 Nearest levels of resistance R1 – 1.0864 R2 – 1.0986 Trading Suggestions: The moving average has undergone a new micro adjustment in the EUR/USD pair. At this point, we can take into account opening additional long positions with goals of 1.0864 and 1.0882 if the Heiken Ashi indicator reverses direction and moves higher or the moving average recovers. After the price is locked below the moving average line, you can start opening short positions with targets of 1.0704 and 1.0620. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 05:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332572
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The British Pound (GBP) Is Still Increasing

Paolo Greco Paolo Greco 18.01.2023 08:34
Despite the lack of any compelling explanations, the GBP/USD currency pair once again displayed an upward trend on Tuesday. In the UK, data on unemployment and earnings were released early in the morning. These numbers cannot be characterized as "strong" or "failed," but it is very tough to call them either. Simply put, the unemployment rate remained at 3.7% in November, while earnings climbed by 6.4%, which was basically in line with expectations. Remember that the UK has been experiencing a severe cost of living problem for several months. The country's population's salaries are devalued by the fast-falling value of the pound in 2022 and a strong rise in inflation. Naturally, the least socially protected groups experience the most severe pound devaluation. Simply described as low-paid, everyday laborers. They can tell that the value of the pound has decreased by 10%. 10% inflation is a lot to them. Therefore, it is difficult to describe the 6.4% growth in earnings during a time of inflation that is higher than 10%. However, traders hurried to repurchase the pound after discovering a teaspoon of honey in a barrel of tar. They are completely correct from a technical standpoint because there isn't even one sell signal at the moment. The pair is still above the moving average line on the 4-hour TF, and both linear regression channels point upward. The price is above all of the Ichimoku indicator's lines on the 24-hour TF. Therefore, anything is possible based on fundamental research, but the pound will gain in value if the market buys more of it. Since many currently anticipate that the Bank of England will reduce the "monetary pressure" on the economy, the pound can, of course, halt this process at any point. Simply put, the BA may again pause the pace of tightening monetary policy in February to prevent a serious recession. If so, one of the strongest pillars of the pound's support may be lost. The Bank of England's governor is overjoyed with confidence. On Tuesday, Andrew Bailey testified before the House of Commons Treasury Committee. It had been a while since he had spoken in public because the head of BA rarely does so. He expressed his optimism for a significant drop in inflation in 2023 as a result of reducing energy prices in his address. He thinks that the military confrontation between Ukraine and Russia in 2022 caused the sharp rise in energy prices, but gas prices have dropped by almost four times since then, suggesting that inflation can be slowed down even without the regulator's help. Additionally, Mr. Bailey informed the Committee that the financial markets had calmed following the Liz Truss board issue, which saw a dramatic devaluation of the pound and an increase in government bond yields. The BA chairman added, "However, it will take some time to convince people that the worst is over." The markets continue to anticipate a further increase in rates in early February despite Mr. Bailey's silence on the subject. Since the anticipation of lower inflation naturally entails that the regulator may slow down the pace of tightening monetary policy more, we think Bailey's comments can be viewed as a "dovish" element. And give it a total break with the possibility of several months. The pound is still increasing, though. The result is the following image: The pound is growing regardless of how quickly or slowly rates are rising; rates may even cease rising altogether. Therefore, we continue to think that the more crucial element is the slowing of the US rate rise. Based on this reason, the British pound may continue to increase for some time, but its prospects may suffer if the rate is lowered to 0.25%. In any case, you shouldn't anticipate a significant decline in the value of the pound until the price is locked below the moving average. When that occurs, it will be possible to guess whether this is just a little reversal or the start of a new, lengthy decline in the value of the pound. Over the previous five trading days, the GBP/USD pair has averaged 117 points of volatility. This figure is "high" for the dollar/pound exchange rate. Therefore, on January 18, we anticipate movement that is contained inside the channel and is constrained by the levels of 1.2151 and 1.2385. A new bout of corrective action will begin when the Heiken Ashi indicator reverses direction and moves back down. Nearest levels of support S1 – 1.2207 S2 – 1.2146 S3 – 1.2085 Nearest levels of resistance R1 – 1.2268 R2 – 1.2329 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair is attempting to advance further. Therefore, until the Heiken Ashi indicator swings down, it is still possible to hold long positions with goals of 1.2329 and 1.2385. If the price is set below the moving average, short trades can be opened with goals of 1.2085 and 1.2024. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 05:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332574
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Euro To US Dollar (EUR/USD) Pair Is Struggling To Rise

Torben Melsted Torben Melsted 18.01.2023 08:36
EUR/USD is struggling to spike higher to our ideal target at 1.0933. We still think that a final short-term spike closer to 1.0933 could be seen to complete wave 3 and set the stage for a correction in wave 4 towards the 1.0437 - 1.0500 area. That said, we are aware of the possibility that we have seen a fifth wave failure at 1.0869 that completed wave 3 and wave 4 already is in motion. If this is the case, then we need a direct break below support at 1.0726. Then fifth-wave failures are rare. So, taking for granted that a fifth-wave failure has been seen, is being over-confident, therefore it's not our preferred count. Relevance up to 06:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309033
The USD/JPY Price Reversed From The Lower Limit

What To Expect From The USD/JPY Pair Today

Torben Melsted Torben Melsted 18.01.2023 08:44
The spike higher is confirmation that wave b of B completed with the test of 127.22 and wave c of B now is in progress towards the 138.20 - 138.73 area to complete the expanded flat correction in wave B. The ongoing c-wave should unfold in five sub-waves and end above the termination point of wave a at 134.77. That said, we must remember that B-wave has an endless variety of wave combinations at its disposal, making them very difficult to decipher. That doesn't mean that the Elliott wave principle doesn't apply, it absolutely does, but the waves don't really reveal themselves until the very last minute.   Relevance up to 06:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309037
The GBP/USD Pair Started A New Round Of Downward Correction

The UK IS Hoped For A Slowdown In Inflation In 2023

Paolo Greco Paolo Greco 18.01.2023 08:48
M5 chart of GBP/USD On Tuesday, no correction occurred and GBP/USD was bullish throughout the day. Technically, there were reasons for the rise. Interestingly, the market interprets fundamental and macroeconomic data in its own unique way. Thus, the UK delivered statistics on unemployment and wages. The UK jobless rate remained unchanged and held steady at 3.7%, and wages grew slightly faster than expected. In other words, there were no reasons for buying the pair. Later, BoE Governor Andrew Bailey delivered a speech. He said he hoped for a slowdown in inflation in 2023 as energy prices went down. As a reminder, inflation growth was partially caused by higher oil and gas prices in 2022. This means that there is a high probability of a slowing in the pace of rate hikes. So, how can it be good for the pound? The tone of Bailey's speech was in no way hawkish. Moreover, he said nothing about monetary policy or interest rates at all. However, the market decided otherwise. Tuesday kicked off with a false buy signal at around 1.2185. In half an hour, the price settled above this level. Traders incurred losses of some 30 pips and were able to open long positions. The price rose to 1.2259 but pulled back, generating a sell signal. Therefore, traders closed long positions with a profit of about 30 pips and opened short positions. Another sell signal was false, and traders incurred losses of 30 pips. The final buy signal would bring a profit of some 10-15 pips if the upward move did not stop by then. COT report: The latest COT report showed an increase in bearish sentiment. In a week, non-commercial traders closed 7,600 longs and opened 1,500 shorts. The net non-commercial position fell by 9,100. The net non-commercial position has been on the rise in recent months. However, sentiment has not turned bullish yet. Although the pound sterling has been bullish against the greenback in recent months, its growth can hardly be explained in terms of a fundamental point of view. We should not rule out the possibility that the pound may fall against the dollar in the medium term. There is still the need for a continuation of the corrective move in the market. Overall, the latest COT reports have been in line with the pair's movement. Since the net position is not bullish yet, a buying spree may go on for several months more. Non-commercial traders now hold 36,000 long positions and 65,500 short ones. We are still skeptical about the pair being bullish in the long term although there are technical reasons for that. However, in terms of fundamentals and geopolitics, this will unlikely be a strong and fast uptrend. H1 chart of GBP/USD In the H1 time frame, GBP/USD keeps rising above the Ichimoku line. There have been not enough reasons for growth, but the pound has already gained 2,100 pips in recent months. On January 18, important levels are seen at 1.1974-1.2007, 1.2106, 1.2185, 1.2288, 1.2342, 1.2429-1.2458, and 1.2589. Senkou Span B (1.2043) and Kijun-sen (1.2191) may also generate signals. Don't forget to place a stop-loss order at the breakeven point when the price passes 20 pips in the right direction. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels, which can be used for locking in profits. On Wednesday, the UK will see the release of its inflation report for December. In the US, several minor reports will be delivered. In addition, some Fed officials will give interviews. All in all, they may also affect the price. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. The Kijun-sen and Senkou Span B lines are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders Relevance up to 06:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/332578
The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

The Bears Of The EUR/USD Pair Are Still Poised To Be In Control

Oscar Ton Oscar Ton 18.01.2023 08:58
Technical outlook: EURUSD dropped below 1.0800 overnight and registered a fresh intraday low at 1.0766 during the Asian session on Wednesday. The single currency pair is seen to be trading close to 1.0770 at this point in writing as the bears are still poised to be in control. A meaningful top could be in place at 1.0874 as projected earlier. EURUSD is about to carve either a Doji or Engulfing Bearish candlestick pattern on the weekly chart after having reversed from 1.0874. Traders might be preparing for a sharp bearish reversal over the next week with an initial target around 1.0370. That would break the immediate price support of 1.0481 seen on the daily chart here. EURUSD is facing no intraday resistance around the 1.0820-30 area. Any pullback rallies should be met with resistance over there as the bears are regaining control. On the flip side, a consistent push above 1.0874 will test the price above 1.0900 before finding resistance again. Having said that, a high probability still remains for a drop lower with 1.0874 intact. Trading idea: Potential bearish reversal against 1.0950 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309041
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

There Is A Clear Need To Stimulate Demand For The EU Currency (EUR)

InstaForex Analysis InstaForex Analysis 18.01.2023 09:01
The wave marking on the euro/dollar instrument's 4-hour chart is still quite compelling and getting more intricate, and the entire upward segment of the trend is still quite convoluted. Although its length is better suited for the pulse portion, it has taken on a powerful corrective and extended form. The waves a-b-c-d-e have been combined into a complicated corrective structure, with wave e having a form that is far more complex than the other waves. Since the peak of wave e is substantially higher than the peak of wave C, if the wave markings are accurate, construction on this structure may be nearly finished. I'm still planning for a decline in the instrument because we are predicted to build at least three waves down in this scenario. The demand for the euro currency increased throughout the first two weeks of the year, and during this time the instrument was only able to modestly deviate from previously established levels. A further attempt to surpass the 1.0721 level, which corresponds to 127.2% of the Fibonacci ratio, was successful, allowing the wave e to grow even longer. Unfortunately, there is another delay in starting to build the trend correction part. The euro may be supported by rate divergence up until the ECB meeting. On Tuesday, the euro/dollar instrument had a 30 basis point decline. As a result of how small these price increases are, the current wave markup hardly changes at all. However, since the instrument's present motions are more horizontal in type and the news background is essentially nonexistent, I am unable to compare them to the instrument's current movements. Only the German inflation report might have been of interest to market players yesterday. The market was aware of the expected value because the second estimate was identical to the first. The decrease in the euro in the afternoon can be attributed to the German inflation report from the morning, but how can you account for the euro's rise in the morning? I think that the current news context shouldn't be used to explain the fluctuations of the euro. Other aspects form the basis of the market. Since the ECB is 90% likely to hike rates by 50 basis points in February and the Fed by 25, the market has already determined, in my opinion, that there is a clear need to stimulate demand for the EU currency. As a result, for the first time in a long time, the difference between the ECB and Fed interest rates will be decreasing rather than widening. This element may encourage strong demand for the euro. If this is the case, then the response to the ECB rate hike in two weeks is already being seen. This factor may already be coming into play on the day of the European regulator's meeting, and we will observe a decline in the instrument. This decline may coincide with the completion of wave e, which has already taken on an overly extended form. If my assumption is correct, then wave 5-e is being built now. This means that the increase could break off at any time. Conclusions in general I conclude that the upward trend section's building is about finished based on the analysis. As a result, given that the MACD is indicating a "down" trend, it is now viable to contemplate sales with targets close to the predicted Fibonacci level of 0.9994 (323.6%). The potential for complicating and extending the upward portion of the trend remains quite strong, as does the likelihood of this happening. The market will be ready to finish the wave e when a bid to break through the 1.0950 level fails. The wave marking of the descending trend segment notably becomes more intricate and lengthens at the higher wave scale. The a-b-c-d-e structure is most likely represented by the five upward waves we observed. After the construction of this portion is complete, work on the downward trend segment can start   Relevance up to 06:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332580
The EUR/USD Pair Has Opportunities For Bullish Movement

The EUR/USD Pair Has Opportunities For Bullish Movement

Peter Jacimovic Peter Jacimovic 18.01.2023 09:12
Technical analysis: EUR/USD has been trading upside this morning and I found rejection of the key support zone at the price of 1.0770, which is good sign for the further rally. Trading recommendation: Due to the rejection of the support zone and strong upside trend on the higher frames, I see potential for further growth towards upside references. Watch for the potential buying opportunities on the intraday dips with the upside objectives at 1.0865 and 1.1100 Stochastic oscillator is showing oversold condition and fresh flip up, which is good sign for further bullish movement. Key support is set at the price of 1.0770   Relevance up to 08:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309080
Bank of Japan to welcome Kazuo Ueda as its new governor

The Bank Of Japan Has Made It Clear That It Does Not Intend To Abandon The Ultra-Loose Monetary Policy

InstaForex Analysis InstaForex Analysis 18.01.2023 09:17
The dollar-yen pair soared by more than 350 points during the Asian session on Wednesday, reacting to the results of the January meeting of the Bank of Japan. If yesterday the pair fixed a low at 128.02, at the moment, the price has peaked at 131.60. Traders are playing back the "dovish" results of the January meeting of the members of the Japanese regulator. Expected "sensation" On the one hand, nothing sensational happened today. The previous rhetoric of the head of the central bank, Haruhiko Kuroda, was clearly dovish: he did not get tired of repeating that the December decision to expand the allowable range of fluctuations in the yield of ten-year government bonds does not indicate a reversal of the monetary rate of the central bank. Therefore, it would be surprising if he changed his position and supported the next steps to normalize monetary policy at the January meeting. On the other hand, traders, contrary to Kuroda's dovish assurances, still bet (judging by the behavior of the yen) that the Bank of Japan would make further adjustments to the policy of controlling the yield curve or completely abandon it. Note that the yield of Japanese government bonds on Monday again exceeded the new target yield range, reaching 0.51%. But in the end, the conservatism of the consistent "dove" Kuroda won. The Japanese central bank has made it clear that it does not intend to abandon the ultra-loose monetary policy, which it has adhered to for years. The regulator kept the parameters of the monetary policy and worsened the forecast for the growth of the Japanese economy. The short-term interest rate on deposits of commercial banks with the central bank was left at -0.1% per annum, the target yield on ten-year government bonds is near zero. No changes were made to the yield range. Also, there are no changes in the central bank's outlook on interest rates. Disappointing (for the yen) macroeconomic forecasts The Bank of Japan's quarterly outlook report said the country's economy is likely to recover weakly "as the effects of the coronavirus pandemic and supply constraints ease." At the same time, price growth is expected to "narrow by the middle of the next fiscal year" (in Japan, the fiscal year, as you know, is set from April 1 to March 31). According to the central bank's economists, prices may deviate to the downside "because wage growth will not increase as expected." Inflation is estimated to be around 3% this fiscal year and decline to 1.6% next year. In addition, the Bank of Japan worsened its forecast for the country's GDP growth in the current fiscal year from the previously expected 2%. Arguing for its decision, the central bank pointed to a slowdown in economic growth abroad and high prices for raw materials. The regulator also worsened its forecasts for the next fiscal year (2023): economy is estimated to grow by 1.7% against the previous estimate of 1.9%. Summing up all of the above, in the "bottom line," we have the following situation: 1) the Bank of Japan has retained the range within which the yield of 10-year government bonds can fluctuate (+/- 0.5%); 2) allowed (predicted) a slowdown in inflation in the second half of 2023; 3) worsened the forecast for the growth of the country's economy—both in the current fiscal year and next. It's too early to write off the yen The announced results of the January meeting a priori do not imply tightening monetary policy. And yet, it is not worth writing off the Japanese currency. Moreover, it is risky since many market participants surely desires to make money on the upward dynamics of USD/JPY. This is a rather risky venture as the upward momentum may fade by medium-term, and the pair will turn downward again. First, in just three months—in April of this year—Kuroda will leave his post after 10 years in office. Despite the actual inaction of the central bank at the January meeting, the pressure from the market will not disappear anywhere, and will only increase over time. While the likely successors of Haruhiko Kuroda at least allow for a scenario in which the central bank will take further steps to normalize the monetary policy. Secondly, the yen may be supported by inflation, which, apparently, is not going to slow down in Japan. On Friday, January 20, key inflation data for December will be published. According to preliminary forecasts, the general consumer price index will show an increase in inflation by 4.0%. If the indicator comes out, at least at the forecast level, it will be a new high for the last 41 years. The CPI excluding fresh food prices should also show positive dynamics (expected to rise to 4.1%), as well as the consumer price index excluding food and energy prices (this indicator should rise to 3.0%). Recall that the corporate goods price index published the day before yesterday (which measures the prices of goods purchased by Japanese corporations) rose in December by 10.2% year-on-year, exceeding the average market forecast of growth by 9.5%. If the inflation figures comes out, at least at the forecast level (not to mention the "green zone") on Friday, the yen may again begin to enjoy increased demand, despite the "dovish" results of the January meeting. Conclusions Thus, at the moment, it is best to take a wait-and-see position for the USD/JPY pair, watching the price move upwards. As the upward impulse fades, short positions can be considered with the first target at 128.70 (the middle line of the Bollinger Bands indicator on the four-hour chart) and 127.25 (the lower line of the Bollinger Bands on the same timeframe)   Relevance up to 07:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332590
Hang Seng Index Plummets -2% Amid Weak China Data, Short-Term Trend Intact

Forex: The EUR/GBP Pair May Struggle To Trade Sustainably, The Reserve Bank Of Australia's Policy Remains An Open Question

ING Economics ING Economics 18.01.2023 09:55
The Bank of Japan defied hawkish speculation and held policy steady this morning, sending the yen lower. Some market confusion was also generated by a headline suggesting the European Central Bank is mulling slower rate hikes: clarifications may come from Davos by the end of the week, and the euro may recover. In the US, the data calendar picks up again The Bank of Japan in Tokyo USD: US data back in focus An exceptionally grim Empire Manufacturing reading for January has been the only noteworthy data release out of the US so far this week, and the dollar has continued to be a bystander as developments in Japan, Europe and China drive most market moves. Today, retail sales, PPI, industrial production and TIC flows data will be in focus. The market's scrutiny over the US economic outlook has grown exponentially since the ISM service report pointed to an imminent recession: expect more pain for the dollar should fresh signs of a slowdown emerge now that the US data calendar is picking up again. The Fed’s Raphael Bostic, Patrick Harker and Lorie Logan are set to speak today. The fall in the yen after the BoJ announcement (more details in the JPY section below) is offering some relief to the dollar this morning. However, we suspect this may only prove temporary and downside risks into the 101-102 area still prevail in the very near term. After all, the global environment continues to be rather benign for the ongoing rerouting of flows into emerging markets and high-beta currencies. The growing feeling that China may face a reality check on the sustainability of looser Covid rules may be contributing to halting CNY gains, but recent data gave reasons for optimism on Chinese growth, as noted by our colleague Iris Pang here. We are also approaching the lengthy Chinese New Year holiday season, which may be keeping some investors on hold before moving significantly into Chinese assets. Our commodities strategists have revised their forecasts for iron ore and copper prices higher on the back of China’s reopening. A demand-driven improvement in the metal price outlook is an ideal scenario for commodity currencies: the Australian dollar is a good example here, also considering the tentative conciliatory steps in Sino-Australian diplomatic relations. Indeed, the Reserve Bank of Australia's policy remains an open question: the resilience of inflation poses risks to our conservative call for only two more 25bp hikes before the end of the hiking cycle, and could add some more steam to the AUD rally. A 0.70-0.72 range could easily become the norm for AUD/USD in the next few weeks. Francesco Pesole EUR: Conflicting news Yesterday was a day of conflicting headlines for the euro. In a long interview to the Financial Times, Chief Economist Philip Lane offered elaborate reasoning to support the ECB’s recent hawkish rhetoric. However, later in the day, a Bloomberg report cited some ECB officials saying that Governing Council members are actually considering a slower pace (25bp) of tightening. EUR/USD dropped below 1.08 on the news. It does seem premature for the ECB to unwind its hawkish narrative just yet, and we would not be surprised to see some remarks aimed at “mitigating” yesterday’s dovish headline. Francois Villeroy (today) and President Christine Lagarde (tomorrow) have a chance to do so in Davos. Either way, the overall environment looks likely to stay largely supportive for EUR/USD and a return to 1.0850-1.0900 seems possible by the end of this week. Other conflicting headlines came from Germany. Chancellor Olaf Scholz said he’s sure that Germany will avoid a recession, while his finance minister suggested in a previous interview that there will indeed be a recession, but it should be very mild. The ZEW expectation survey (which spiked into positive territory yesterday) surely seemed to favour more optimism on the German outlook, and undoubtedly fed into the divergence in growth narratives between the eurozone (increasingly upbeat) and the US (increasingly downbeat). This ultimately makes us believe EUR/USD can stay mostly supported for now. Francesco Pesole GBP: Inflation matches expectations December CPI numbers were released in the UK this morning and largely matched consensus expectations. Headline inflation decelerated from 10.7% to 10.5%, while the core rate held at 6.3%. With the peak apparently past us, we could see headline inflation return to 6% in the summer and 3.5-4% by year-end, according to our economists. It’s important to note that core services jumped from 6.4% to 6.8%, a development that the BoE should particularly take into consideration, and when added to yesterday’s wage data should tilt the balance towards a 50bp hike in February. EUR/GBP is back to pre-Christmas – sub-0.8800 levels – thanks to some idiosyncratic EUR underperformance and a supported pound. As discussed in the euro section above, ECB-related weakness in the euro may not last long, and EUR/GBP may struggle to trade sustainably below 0.8800 for now – also given the lack of strong bullish forces in the pound. Francesco Pesole JPY: No hawkish surprise by the BoJ The Bank of Japan’s decision to leave its policy tools unchanged has seen USD/JPY live up to its pricing as one of the most volatile pairs in the G10 space. We expect that to continue. The big correction higher in USD/JPY may endure for a little while. This is because the BoJ’s forecasts for CPI ex-food remain below 2% for FY23 and FY24 and could make the case for the new BoJ governor in April to continue with the current ultra-loose policy. Yet USD/JPY is down at 130 on both the BoJ and the dollar story. We look for a broadly weaker dollar – especially in the second quarter when US core inflation should fall more quickly. This means USD/JPY should again come under pressure from the dollar side. And plenty of speculation over a BoJ policy shift in April should limit USD/JPY upside too. We see this correction stalling in the 132.50/133.00 area (outside risk to 135), with a bias to 126/128 for the end of the first quarter. Later in the year USD/JPY will probably be trading under 125. Chris Turner Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Gold Traded Softer In Response To Dollar Strength, The Bank Of Japan Left Its Policy Levers Unchanged

Gold Traded Softer In Response To Dollar Strength, The Bank Of Japan Left Its Policy Levers Unchanged

Saxo Bank Saxo Bank 18.01.2023 10:22
Summary:  The Bank of Japan was going to surprise overnight no matter what it decided, and with the market leaning for some kind of further tweak in policy after a December move, Governor Kuroda and company surprised by indicating no change at all in the initial statement, sending the JPY sharply lower. Elsewhere yesterday, the euro was marked lower on a story that the ECB is set to slow the pace of hikes already after the February ECB meeting. US December Retail Sales on tap today.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities continue to trade in a pivotal area ahead of the heart of earnings season set for the coming couple of weeks, with the 200-day moving average and 4,000 area in focus for the S&P 500. Financial conditions remain very easy as corporate credit spreads and the VIX continue to poke into the low range of the last year as the market hopes for a soft landing for the economy and as the Fed is seen as easing away from its tightening regime after another two 25 basis point hikes at coming meetings.  Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) Hang Seng Index ticked up by 0.3% and CSI300 edged down by 0.1%. Online and mobile gaming names led in both the Hong Kong and mainland bourses. China released 88 new licenses of online/mobile games, including one title from Tencent (00700:xhkg), up 1.2%. and one title from NetEase (09999:xhkg), up 4.6%. The other internet names, however, traded weak, with around 1% to 3% losses. Vice-Premier Liu He’s speech at Davos attempted to assure the audience about a 2023 recovery in the Chinese economy and stability in the real estate sector. He also sang from the same recent hymn book of other Chinese leaders to try to assure the world about China’s openness and not resorting to equalitarianism in its drive for common prosperity. FX: JPY weakens as BoJ refuses to tweak policy, ECB surprises with dovish shift. The market was leaning for further policy tightening from the Bank of Japan after December’s surprise widening of the yield-curve-control “band”, but the Bank of Japan failed to deliver, leading to the yen getting shocked back lower, in part on the unwinding of the largest spike in implied volatility for over-night options over the event in years. More below on the BoJ. Elsewhere, officials from the ECB were quoted late yesterday afternoon, indicating a that, while the expected 50 basis point hike is likely for February, there is increasing support for a deceleration to 25-basis point hikes at subsequent meetings. This development took the euro sharply lower yesterday as, for example, German 2-year yields dropped over 10 basis points on the news. Crude oil (CLG3 & LCOH3) pushes higher Crude oil edged higher, thereby erasing early January losses, after OPEC’s Secretary General Haitham Al Ghais said he’s optimistic about the outlook for the global economy and with that demand for crude oil. The oil producer group said that a potential slowdown in advanced economies is countered by accelerating growth in Asia. The market is expected to tighten as Russia’s supply suffers from G7 price caps and China’s demand recovery underpins. Russia said it expects Western sanctions to have a significant impact on its oil product exports, likely leaving it with more oil to sell. Focus today the dollar following the BOJ meeting and not least IEA’s Oil Market Report for January. EIA’s weekly stock report delayed until Thursday.  Gold correction risk with dollar the key focus Gold traded softer overnight in response to dollar strength after the Bank of Japan failed to deliver another tweak to its interest rate policies (see above).  While industrial metals such as copper continues higher on China demand hopes, the yellow metal continues to get most of its directional input from the dollar. ETF flows and risk reversals in the options market have remained flat for weeks with no sign of demand despite the recent rally, potentially signalling increased risk of a short-term correction driven by recently established speculative longs. US Treasury yields rebounded slightly Friday (TLT:xnas, IEF:xnas, SHY:xnas) The Bank of Japan stood pat on its current policy mix even as the market was leaning for some further policy tweak, sending JGB’s sharply lower and taking US yields down a few notches as well overnight, with the 10-year benchmark Treasury yield poking back below 3.50%. The focus remains on incoming data and the shape of the US yield curve, with December US Retail Sales data up today. Read next: GBP/USD Is Strengthening And Trading Above 1.2260, Investors Took A Breather Ahead Of The Bank Of Japan Meeting| FXMAG.COM What is going on? BOJ maintains policy unchanged, launches new tool to support bond market The Bank of Japan left its policy levers unchanged at the January meeting, defying heavy market speculation of another tweak after the surprise in December. The announcement saw the yen plunge by over 2%, as the central bank said it would continue large-scale purchases of government bonds and increase it on a flexible basis as needed. The central bank, in a new measure to maintain yield control policy, also extended a loan offer to banks for funds of up to 10 years against collateral for both fixed- and variable-rate loans. Meanwhile, the BOJ still sees inflation getting back to sub-2% range this year. Core CPI estimate for FY2022 was only slightly raised to 3.0% for 2.9% previously, while the FY2023 estimate of 1.6% was maintained. In the press conference, BoJ Governor Kuroda said that the sustainable inflation goal is not yet in sight, suggesting low odds that he will declare victory on bringing back inflation before his exit in April. Goldman Sachs plunges, Morgan Stanley soars after both banks report earnings Goldman Sachs plunged yesterday after its earnings report, dropping more than 6% on rising expenses and on rising compensation costs for employees. Revenues dropped on reduced M&A activity and its foray into retail banking continues to drag on results. Morgan Stanley, meanwhile, was the S&P 500’s second best performer on the day, jumping over 5% after reporting Q4 earnings, with strong results in its wealth management division noted Industrial metals boosted by upbeat China data Better than expected economic data from China helped boost sentiment in the base metal sector. China’s December activity data came in better-than-expected, while protests in Peru continued to cloud the supply outlook for copper. HG Copper trades above $4.25 after surging to the highest since June, and up 11.6% this month after recording nine consecutive daily gains. Prices for Iron ore also rose in Singapore to back above $120, locking in gains of over 1%. Gloomy US survey data – NY Fed manufacturing The NY Fed's Empire manufacturing survey tumbled to -32.9 in January from -11.2 in December, well beneath the consensus -9 and marking the lowest level since mid-2020 and the fifth worst reading in the survey’s history. Both new orders and shipments plummeted sharply, and moderation in input and selling price growth was seen. Fed member Barkin (non-voter) repeated that median CPI is still too high, saying that he needs to see inflation convincingly back to target before Fed pauses rate hikes and that he is not in favour of backing off too soon UK Dec. CPI out this morning and slightly hotter than expectations as the headline rose +0.4% MoM and +10.5% year-on-year vs. +0.3%/+10.5% expected, respectively while the core CPI level rose +6.3% YoY vs. +6.2% expected and +6.3% in November. Sterling traded slightly firmer after the data. What are we watching next? ECB’s dovish surprise likely as inflation slows The ECB is considering a slower pace of rate hikes than Christine Lagarde indicated in December. While a 50bps increase next month remains the most likely outcome, a 25bps move in March is gaining support. Inflation in the Eurozone is slowing, and a sharp drop in natural gas prices suggest that we can continue to expect lower inflation in the months to come at least until the 2023 winter risks emerge. The final CPI print for December for the Euro-are will be released today and ECB’s minutes of the December meeting are due tomorrow. Earnings to watch The Q4 earnings season continues today with more US financial services companies reporting, including the retail-focused PNC Financial Services and Charles Schwab. Kinder Morgan is a company operating an extensive pipeling transportation and energy storage network, while EQT is a US-based natural gas producer and the second largest producer in the largest US shale gas production area in Appalachia (the Marcellus shale). Guidance on the future productivity of its reserves could be a focus there after the wild ride for natural gas this year on Russia’s invasion of Ukraine. Today: EQT, Charles Schwab, PNC Financial Services, Kinder Morgan Thursday: Procter & Gamble, Netflix Friday: Investor, Sandvik, Ericsson, Schlumberger Economic calendar highlights for today (times GMT) 0900 – IEA's Oil Market Report for January1000 – Eurozone Final December CPI1330 – US Dec. Retail Sales1330 – US Dec. PPI1400 – US Fed’s Bostic (non-voter) to speak1415 – US Dec. Industrial Production and Capacity Utilization1500 – US Jan. NAHB Housing Market Index1900 – US Fed Beige Book1900 – US Fed’s Harker (voter 2023) to speak0001 – UK Dec. RICS House Price Balance0030 – Australia Dec. Employment Change / Unemployment Rate   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – January 18, 2023 | Saxo Group (home.saxo)
Economic Calendar Details and Trading Analysis - August 7 & 8

Reserve Bank of India Is Projecting Inflation To Dip Below 6% In Q1 2023

TeleTrade Comments TeleTrade Comments 18.01.2023 10:26
Indian Rupee was the second worst performer vs USD in 2022, behind only the Yen. Economists at Commerzbank look for a stable to slightly firmer INR in 2023. RBI nearing end of hike cycle “The RBI is expected to tighten policy further by another 30-50 bps in the next six months. Nevertheless, RBI is nearing the end of its tightening cycle.” “Inflation is expected to have averaged 6.8% in 2022. RBI is projecting inflation to dip below 6% in Q1 2023 but it is expected to hold at around 5% in 2023. This should pave the way for RBI to pause rate hikes but not enough to cause them to cut.” “We look for a stable to lower USD/INR in 2023 at 81.50 by year-end.”
The RBA Is Expected To Raise Rates By 25bp Next Week

According To UOB Group’s Economist The Bias For The AUD/USD Pair Will Be Upside

TeleTrade Comments TeleTrade Comments 18.01.2023 10:29
In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, extra upside remains likely in AUD/USD in the next weeks. Key Quotes 24-hour view: “AUD traded within a range of 0.6931/0.6997 yesterday, slightly narrower than our expected range of 0.6930/0.7000. Upward momentum has improved a tad and while the bias for AUD is to the upside today, a sustained advance above 0.7025 is unlikely. Support is at 0.6965, a breach of 0.6940 would indicate the current mild upward pressure has faded.” Next 1-3 weeks: “There is not much to add to our update from yesterday (17 Jan, spot at 0.6965). As highlighted, while the bias for AUD is still on the upside but without improvement in momentum, we continue to think that 0.7070 is unlikely to come into view so soon. On the downside, a break of 0.6915 (‘strong support’ level previously at 0.6890) would indicate that the AUD strength from more than a week ago has ended.”
Despite The Improvement In The Outlook Due To Falling Energy Prices, The Economic Environment In Britain Remains Difficult

Yields On JGB's Fell Back Sharply, Markets May Expect To See Another 50bps Rate Hike From The Bank Of England

Michael Hewson Michael Hewson 18.01.2023 11:34
Yesterday saw another positive session for European markets, although the FTSE100 underperformed despite hitting a new 4 year high. US markets returned from their long weekend break with a choppy and somewhat mixed session, with the Dow and S&P500 struggling while the Nasdaq 100 finished slightly higher, as various earnings announcements painted a mixed picture of the US economy. Bond yields also chopped between negative and positive territory as yields ended the day little changed. BoJ tweaks bond program Asia markets have spent the day still digesting yesterday's economic numbers from China, as well as today's Bank of Japan rate decision. The Japanese yen has seen some decent gains over the past few weeks, with those gains accelerating after the Bank of Japan caught markets by surprise last month by widening the band of its yield curve control to between -0.5% and +0.5%, from +/-0.25%. It would appear that with current governor Kuroda set to leave in April that the BoJ wanted to start seeding the ground for a possible shift in the coming months, however as with everything related to monetary policy markets have already started to front run any possible change.. The 10-year JGB has consistently tested above the upper bound of the 0.5% in the past few days testing the central banks resolve in the process. The central bank has been consistent in maintaining that they aren't in any rush to make major adjustments to its yield curve control policy yet, however events appear to have overtaken them, as volatility has increased. The Bank of Japan's challenge today has been to try and reset market expectations, as well as try to avoid a further rapid appreciation in the yen, in the same way they wanted to manage the declines in their currency over the past few months. Suffice it to say they appear to have succeeded, pushing back on the recent moves that have pushed the yen higher. This morning the Bank of Japan kept monetary policy unchanged, which wasn't a surprise, but they also announced they would continue large scale bond buying and be more flexible about duration in order to keep policy settings loose. Yields on JGB's fell back sharply from the 0.5% upper bound in the wake of the announcement. Today's pushback or reset whatever you want to call it, shouldn't have been too much of a surprise given recent yen moves. Japanese central bank officials have always been particularly sensitive to sharp short term moves in either direction where the yen is concerned in the same way they were about recent yen weakness. The direction of the move is less of a concern rather than the speed of it, and in slowing the yen move lower the BoJ is merely resetting market expectations about future policy change, with the US dollar rising back above 130.00 UK inflation set to slip back in December After the peak of 11.1% in October, headline CPI fell back to 10.7% in November in a welcome sign that we could well be past the peak, when it comes to price rises.Recent falls in oil and gas prices are also likely to start to feed into the underlying numbers, while PPI inflation has also been falling in recent months, though given problems with the PPI calculations we haven't had clear visibility on that in the past couple of months, as the ONS continues to review how that is calculated. Today's December inflation numbers are expected to show that inflationary pressures continue to subside, but are only expected to fall modestly to 10.5%, with core prices also still high at 6.2%. We already know that food price inflation is trending in the mid-teens, which means that headline CPI is expected to remain above 10% for a while. It's also important to remember that RPI is even higher. With average wage growth trending at 6.4% and unemployment still low, the gap between wages and inflation is still quite wide, although it is narrowing from both directions. This probably means we can expect to see another 50bps rate hike from the Bank of England when it meets in just over 2 weeks' time, although any decision is unlikely to be unanimous, given the 3-way split last time. Headline CPI in the EU is also expected to be confirmed at 9.2% in December with core prices at 5.2%. EUR/USD – has struggled to overcome the 1.0870 area, prompting a fall to 1.0780. Could see a deeper fall towards 1.0720. The key resistance sits at 1.0950 which is a 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110. GBP/USD – ran out of steam at 1.2300 yesterday, with the risk that the move above 1.2000 level is running out of steam, despite the decent rebound from the 1.1830/35 area. The next big resistance lies at the 1.2350 area. We need to hold above the 1.2000 area for further gains to unfold. EUR/GBP – the failure at the 3-month highs at 0.8895 this week has seen a drift back towards last week's low at 0.8770/80. Below 0.8770/80 retargets the 0.8720 area. USD/JPY – has recovered off 127.20 area this week, just shy of the 126.50 area which is the 50% retracement of the up move from 101.18 to the highs at 151.95. Has squeezed back above the 130.00 area and could extend back through 132.60 on towards 134.80 without undermining the downward momentum. FTSE100 is expected to open 10 points lower at 7,841 DAX is expected to open 32 points higher at 15,219 CAC40 is expected to open 11 points higher at 7,088 Email: marketcomment@cmcmarkets.comFollow CMC Markets on Twitter: @cmcmarketsFollow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

The Japanese Yen (JPY) Weakened, The Aussie Pair Is Trading Above 0.70$

Kamila Szypuła Kamila Szypuła 18.01.2023 13:33
Today the US releases data on retail sales and PMI indices, which are supposed to show support for inflation fading. USD/JPY At the two-day meeting, the BOJ unanimously maintained its YCC targets, set at -0.1% for short-term interest rates and around 0% for 10-year yields. The Japanese yen weakened by more than 2 percent in the wake of the Bank of Japan's monetary policy announcement in January. If the losses continue, this will be the best one-day performance for the USD/JPY pair. To understand why the yen weakened so quickly here, one has to go back to what happened in December. Last month, the central bank shocked the markets by widening the yield curve band around 0% to plus/minus 50 basis points. It was from +/- 25 bp. The central bank also increased asset purchases to 9 trillion yen each month from 7.3 trillion previously. The markets saw this as a move by the central bank towards normalizing policy. Therefore, investors were strongly focused on further corrections today. When this did not happen, these bets were voided. The USD/JPY pair strengthened and traded above 131. After this recovery, the pair began to fall to a level around 129.10. AUD/USD The Australian and New Zealand dollars gained on Wednesday on the retreating yen. The Australian jumped 2.0% to 91.36 yen. For now, the BJ's pledge to keep yields low has provided relief to global bond markets and the Australian 10-year yield fell 8 basis points to 3.57%. The main event of the week in the country will be data from the Australian labor market, which will be released on Thursday. The Austrailan pair (AUD/USD) has broken through the 0.70 level and is trading at 0.7020 at the time of writing Read next: Un Secretary General Antonio Guterres Encouraged The Transition To Green Energy At The World Economic Forum In Davos, The Chinese Economy May Surprise You Positively| FXMAG.COM GBP/USD The British pound received support this morning after mixed inflation data. UK headline inflation fell as expected to 10.5%. UK consumer price inflation fell to a three-month low of 10.5% in December but remains close to 40-year highs. The core CPI reading, which excludes food and energy from the calculations, underscores the tense labor market conditions seen in yesterday's UK employment data, while the recent fall in energy prices has contributed to the decline in the headline figures. The BoE has raised interest rates nine times since December 2021 to try to bring down inflation, with markets currently evaluating an 82% chance of a 50 bp rate hike at its next meeting, scheduled for February 2. GBP/USD holds its gains above 1.2300 again, undisturbed by mixed UK CPI data amid fresh US dollar weakness. Today's UK employment data becomes more important for GBP/USD traders given the recent comments from Bank of England (BoE) governor Andrew Bailey, as well as the worsening conditions of the UK labor strikes. EUR/USD The EUR is one of the weakest contenders against the US Dollar, with EUR/USD pulling back sharply after testing the 1.0870 level. The rest of this week is quite sunny on the economic calendar, which tends to support existing trends. The EUR/USD pair fell sharply mid-session in the US despite significant US dollar weakness. The euro fell after market talks suggesting that representatives of the European Central Bank (ECB) are considering slowing down the pace of monetary policy tightening. Rumors suggest that CEO Christine Lagarde and company will decide to raise interest rates by 50 basis points in February. The comments of the European Central Bank's chief economist Philip Lane also influenced the euro, who said that in order to bring interest rates back to their target levels and bring inflation back to the desired level, it will be necessary to stop the tightening of monetary policy by the central bank. At the World Economic Forum EU officials have announced their intention to accelerate the energy transition with a series of fiscal measures that support technological innovation in the green energy space. The support is expected to include a state aid mobilization as well as a sovereignty fund to stop companies relocating to the US. Source: finance.yahoo.com, investing.com, dailyfx.com
Inflation In Japan Continues To Show An Uptrend, The USD/JPY Pair Is Going Down

Bank Of Japan Declared That It Would Keep Up Its Massive Bond Purchases

Jakub Novak Jakub Novak 18.01.2023 13:45
The Bank of Japan refuted market speculation about additional policy changes by stepping up efforts to defend its stimulus package to sustain the economy, which caused the Japanese yen to fall precipitously versus the US dollar. Bond yields were also impacted, and they dramatically decreased. Yield of 10-year bonds  The council of Governor Haruhiko Kuroda kept the target yield of 10-year bonds under its curve control program at around 0% and the negative interest rate at -0.1% today, according to the most recent statistics. The central bank also declared that it would keep up its massive bond purchases and, if necessary, increase them. Furthermore, the Central Bank increased the amount of loans available to commercial banks to encourage them to buy more government debt to justify its ultra-easy policy. This was another way the regulator showed its commitment to regulating the yield curve in the near future. Officials continue to doubt that inflation will stay over 2% The Bank of Japan's revised predictions also revealed that officials continue to doubt that inflation will stay over 2% on a sustained basis in the years to come, justifying additional stimulus even after Kuroda steps down in April. Experts claim that the statement's earlier-than-anticipated release revealed a consensus among the Bank of Japan Board of Directors. There were hopes that the Japanese regulator would budge in response to the political stance taken by the Federal Reserve System, the European Central Bank, and the Bank of England. However, this did not happen.  USD/JPY pair's technical picture The yield on benchmark 10-year bonds decreased by more than 10 basis points to below 0.4% after the rulings were released, as I mentioned above, while the yen dropped by more than 2% to 131.25 per dollar. Regarding the USD/JPY pair's technical picture, the nearest resistance level is 132.20. If this range is broken, the trading instrument, which is now at 136.50, will rise much higher, and the pressure on the dollar will resume. If the support level of 127 is tested again and broken, we can anticipate a further decline in the dollar to a level around 122.40, where the demand for the yen will diminish once more, causing a small upward move in the pair. Let me remind you that there is a growing expectation that the Bank of Japan will take more explicit action to normalize policy. Many economists began discussing rising interest rates this year after the regulator unexpectedly increased its target range of 10-year yields to 0.5% last month, a move that three-quarters of those surveyed saw as a move toward normalizing policy. However, based on the direction the Japanese regulator is currently heading, such modifications shouldn't be anticipated. Read next: Un Secretary General Antonio Guterres Encouraged The Transition To Green Energy At The World Economic Forum In Davos, The Chinese Economy May Surprise You Positively| FXMAG.COM Kuroda's extensive program Kuroda's extensive program of ultra-soft policy has come under the heaviest criticism numerous times, but the regulator has persisted in purchasing bonds each time to affect their profitability and thereby boost the economy. At first, Kuroda argued that the action taken last month was intended to enhance market functionality. Although the yield limit was raised to 0.5% in December, this did not affect liquidity, and the Kuroda-noted yield curve distortion has subsequently gotten worse. Even before the governor's tenure ends, more steps will be taken, according to some experts.   Relevance up to 09:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332616
Assessing the 50-50 Risk: USD's Outlook and Market Expectations for a June Fed Hike

The ZEW Index: The Mildly Negative Assessment Of The US Economy, The German Economy Was Assessed Similarly To The Eurozone As A Whole

Conotoxia Comments Conotoxia Comments 18.01.2023 13:54
The ZEW Index is a survey of the economic sentiment of financial market experts in Germany. It measures expectations for the German economy over the next six months. The survey is conducted by the Centre for Economic Research (ZEW). The indicator is based on responses from analysts and economists from banks, insurance companies and other financial institutions. It is regarded as an important indicator for assessing economic activity in Germany and is closely monitored by many investors. Currently, the value of this indicator has reached a positive reading for the first time since February 2022 (16.9 points), which could mean that the situation of this economy could be improving. What else could we learn from the survey? Evaluation of the economic situation The January survey was conducted among 179 analysts and specialists. Regardless of the region assessed, the majority of specialists view the current economic situation negatively. The worst performer here is China, where as many as 77% of respondents view the current economic situation negatively. Second from the bottom is Germany with 60.3%. What may seem interesting is the mildly negative assessment of the US economy, currently at minus 5 points, which is a drop from the previous positive reading of 6.8 points.China also ranks first in terms of perceptions of the future. As many as 58.9% of respondents answered that the situation for this economy would improve (previously 41.9%). This may be linked to the expected easing of the 'zero COVID' policy. Similarly, respondents answered about the behaviour of the SSE Composite index (56% positive responses), to which we could gain exposure through the iShares MSCI China ETF (MCHI). Source: Conotoxia MT5, MCHI, Weekly The future of the German economy was assessed similarly to the euro area as a whole. The ZEW index reached 16.9 points and 16.7 points respectively. This is a significant improvement on the previous reading, which rose by more than 40 points in both cases. 44% of specialists forecast that the value of the DAX index (DE40) would increase, while 38.1% of respondents believe that it would remain unchanged. There is a noticeable improvement in sentiment relative to the last survey for all indices. Source: Conotoxia MT5, DE40, Weekly Despite the negative reading of the ZEW indicator for the future of the US economy, at minus 6.7 points, we continue to see an improvement on the last reading, which was minus 23.3 points. One could conclude that more important than the value of a given indicator is its trend of change. A more optimistic view is taken of the future of the Dow Jones Industrial index (US30), with 48.2% of respondents expecting it to increase in value (previously 41.1%), while 31% believe it would remain unchanged. Source: Conotoxia MT5, US30, Weekly The foreign exchange market and interest rates The survey questions also focused on two currency pairs: the euro to the US dollar and the euro to the Chinese yuan. In both cases, survey's experts expect a significant strengthening of the European currency. The biggest change is expected for the EUR/USD pair, where as many as 53.5% of respondents expect an increase (previously 46.2%) and 33.5% assume no major change. Source: Conotoxia MT5, EURUSD, Weekly The positive attitude towards a strengthening of the euro appears to be linked to interest rate expectations. Almost unanimously, 87.1%, respondents were in favour of an increase in euro area interest rates in the short term. However, they are less positive about increases in the long term (we could assume more than six months), where 48.3% of respondents expect rates to rise and 36.5% expect no change. In second place in terms of expected interest rate increases is the United States. 79.2% of respondents see a further tightening of monetary policy in the forthcoming FOMC decision. In the long term, 38% of respondents expect an increase and 39.8% expect no change. These expectations seem to be reflected in US bond yields. Long-term 10-year bonds have lower yields than short-term ones (e.g. 2-year bonds). Currently, this difference is 0.65 percentage points. This situation may seem illogical, as why would we want to receive less for holding our funds longer. Historically, a similar relationship has usually heralded a period of recession or slowdown in the economy, which, it seems, we are beginning to feel today. Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service)
The Japan Central Bank’s Decision Sent The Yen (JPY) Sliding

The Japan Central Bank’s Decision Sent The Yen (JPY) Sliding

Kenny Fisher Kenny Fisher 18.01.2023 13:58
The Japanese yen has fallen sharply on Wednesday. In the European session, USD/JPY is trading at 129.38, up 0.96%. Earlier in the day, the yen fell as low as 131.58 but has pared some of today’s losses. BOJ maintains policy After a quiet start to the week,  the Japanese yen is showing strong volatility today. This follows the Bank of Japan’s policy meeting, where policy makers defied market expectations and made no changes to rate and yield curve control (YCC) settings. The markets had been on alert since the BoJ widened the band on 10-year JGBs in December, and there was speculation that the BoJ widen the band or even ditch its yield curve control altogether at today’s meeting. The central bank’s decision to stay on the sidelines sent the yen sliding as much as 2.6% before it recovered. The BoJ forecasts for GDP and inflation didn’t show much change and were overshadowed by the BOJ’s non-move. The GDP forecast was downgraded from 2.0% to 1.9% for FY22 and 1.9% to 1.7% for FY23. The inflation outlook didn’t change much either  – the FY22 forecast was raised from 2.9% to 3.0% and the FY23 remained unchanged at 1.6%. The weak Japanese economy means that risks to growth are tilted to the downside and the BoJ is unlikely to make any policy tweaks to its ultra-loose policy before the new BOJ Governor takes over in April. Japanese government bond yields have fallen sharply in response to the BOJ decision to keep YCC in place, retreating from the 0.50% cap and falling as low as 0.36%. The cap had been under attack in recent days, forcing the BOJ to spend trillions of yen to defend it. I would not be surprised to see yields move higher in the short term due to speculators again testing the BoJ resolve to defend the cap. Read next:Un Secretary General Antonio Guterres Encouraged The Transition To Green Energy At The World Economic Forum In Davos, The Chinese Economy May Surprise You Positively| FXMAG.COM USD/JPY Technical USD/JPY has pushed above resistance at 1.2940 and 131.33. The next resistance line is 133.28 128.40 and 127.71 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The AUD/USD Pair’s Downside Remains Off The Table

The Decline Of The AUD/USD Pair Will Develop In The Medium Term

InstaForex Analysis InstaForex Analysis 19.01.2023 08:00
The Australian dollar is taking the lead after markets collapsed yesterday due to the disappointing U.S. retail sales report - December sales were down 1.1%. And a divergence with the Marlin oscillator has formed on the aussie's daily chart. The price has already crossed the support level of 0.6917 and the signal line of the oscillator is about to move into negative territory. The nearest target is 0.6800. In case the price crosses 0.6730 and the MACD line, the decline will develop in the medium term. On the four-hour chart, the price settled under the MACD line, Marlin forcefully penetrated into the territory of the downtrend. The aussie's in a downtrend.   Relevance up to 03:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332695
The Pound Is Now Openly Enjoying A Favorable Moment

Now The British Pound (GBP) Can Continue To Decline

InstaForex Analysis InstaForex Analysis 19.01.2023 08:01
Yesterday, the British pound tested the target level of 1.2410, as it was in mid-December. Now the pound can continue to decline to the nearest support at 1.2155. This level is close to the MACD indicator line, so it will be the key for the further market development - either medium-term decline (below 1.1737), or growth to 1.2598, in case it doesn't cross 1.2155. On the four-hour chart, there are no clear signs of the reversal so far. The nearest would be the transition of the Marlin oscillator into the zone of negative values. But while the price is above the MACD indicator line, the oscillator readings will not be enough. Therefore, let's wait for the price to go below the indicator line, below 1.2230, and then watch for the main struggle around 1.2155. This is the main scenario. Relevance up to 03:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332697
The EUR/USD Price May Fall Under 1.0660

The Euro Closed The Day With Growth Of Only 5 Points

InstaForex Analysis InstaForex Analysis 19.01.2023 08:03
The U.S. S&P 500 stock index collapsed 1.56% on Wednesday, pulling down counter-dollar currencies and curtailing risk appetites. The reason was the strong decline in U.S. retail sales. In the December estimate, sales were down 1.1%; a revision to the November estimate lowered the figure from -0.6% to -1.0%. The yield on 5-year U.S. government bonds fell from 3.61% to 3.43%. This is an important moment as it shows that investors are starting to withdraw from risky instruments. If our assumption is correct, then the stock market will be the driver of the dollar's strength in the future. The euro was able to gain 100 points yesterday, but closed the day with growth of only 5 points. It stopped falling at the upper limit of the target range at 1.0758/87. Now the divergence, marked by the blue line on the daily chart, can be considered as completed. After the price leaves under the lower limit of the range (1.0758), the target 1.0660 will become available. Yesterday, on the four-hour chart, the Marlin oscillator made a false breakout into the positive area (ascending trend area), quickly returned to the negative territory, and now the oscillator helps the price cross the 1.0758/87 range and together with it the MACD indicator line. In case it succeeds, the price will be stimulated to reach the first target   Relevance up to 03:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332699
Analysis Of The Euro To US Dollar Pair Situation - 30.01.2023

A Significant Downward Correction Of The EUR/USD Pair Is Still Expected

Paolo Greco Paolo Greco 19.01.2023 08:18
On Wednesday, the EUR/USD currency pair started trading up again after adjusting to the moving average line. Again, we observed a very typical technical image: the euro currency microscopically sank before starting to rise again. The most intriguing aspect is that there was no justification for this yesterday. However, what can you do if the market perceives any communication channel as supporting the euro currency? The EU released its December inflation report in the morning. It would appear to be a significant report, but this was the indicator's second and final estimate for December, and it was identical to the first. In addition, the report stated that inflation decreased to 9.2%, or by as much as 0.9%. Such drop rates can be described as "extremely quick." The decline in inflation is a "dovish" factor for the euro, though, since it may prompt the ECB to resist a swift increase in the key rate sooner rather than later. Keep in mind that the US currency stopped increasing last year just as inflation started to decline. Therefore, there is no chance that this report has anything to do with the strengthening of the euro. To put it more properly, the market was free to interpret it in any way it saw fit, which is likely exactly what it did. Once more, we witnessed the euro's growth without any justification. There is now no trading signal to sell, and a significant downward correction is still expected. Additionally, the more the euro appreciates, the more it will eventually decline as investors realize they may sell as well as buy. However, given that there are now no sell indications, we do not advise taking short positions. This week's three trading days have demonstrated that the sentiment of the market has not changed. It is still just interested in purchasing euros, so when it takes a pause, the bears are not strong enough to cause even a standard correction. Pay close attention to the 24-hour TF, which demonstrates unequivocally that the growth is now 1100 points, almost reversed. This distance is critical for the euro. The head economist of the ECB thinks that rates ought to be higher. Nobody is debating. This week's events included a speech by ECB head economist Philip Lane in addition to the completely useless inflation report. He offered no ground-breaking information in his address. Mr. Lane just mentioned that the rates naturally needed to be substantially higher than they are now. And it appears that the market took note of this development, cheering the addition of a new motive to buy. In reality, everyone is aware of the necessity for additional tightening of monetary policy and has done so for much longer than the first month. We do not dispute the length of the process required to tighten monetary policy, during which time the market can provide the necessary fundamental background. But how much longer will the euro's value increase based solely on the issue of declining rate divergence? Additionally, the rates from the Fed and ECB have not even begun to converge yet. The gap still exists, and the Fed will keep raising its rate; if the spread were twice as large, the euro would grow logically. Even the market is aware of the rate increase that will take place in early February. By 0.25 percent in the United States (with a 90% chance) and by 0.5% in the European Union. It has also been known for a very long time that this is true. Remember that the euro's whole downward trend (the last one, as there have been several throughout the years) was 2800 points, taking 21 months to complete. In less than 4 months, the euro has now increased by 1,350 points. At this rate, all losses from the previous two years will be absorbed for another four to five months. In any scenario, the Fed rate will stay above the ECB rate for a considerable amount of time, even if there are unique underlying reasons for this. It is unclear whether the ECB will keep up its rate hike policy after boosting the rate by 1.25%. In general, we continue to think that the euro's strength is excessive but normal growth. As of January 19, the euro/dollar currency pair's average volatility over the previous five trading days was 103 points, which is considered "high." So, on Thursday, we anticipate the pair to fluctuate between 1.0693 and 1.0899. The Heiken Ashi indicator will turn back up to signal the start of the upward movement. Nearest levels of support S1 – 1.0742 S2 – 1.0620 S3 – 1.0498 Nearest levels of resistance R1 – 1.0864 R2 – 1.0986 Trading Suggestions: A new micro pullback to the moving average has begun for the EUR/USD pair. In the event of an upward reversal of the Heiken Ashi indicator or a rebound from the moving average, we can currently consider opening new long positions with goals of 1.0864 and 1.0899. After putting the price below the moving average line, you may start opening short trades with goals of 1.0693 and 1.0620. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.     Relevance up to 04:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332701
Further Upward Price Movement Of The AUD/USD Pair Is Expected

Analysis Of The Aussie Pair Situation (AUD/USD)

InstaForex Analysis InstaForex Analysis 19.01.2023 08:14
On the daily chart for the AUD/USD commodity pair, two interesting things can be seen: 1. The appearence of Ascending Broadening Wedge pattern. 2.The deviation between price movement with Awesome Oscillator indicator. Based on the two things above, in the next few days AUD/USD has the potential to depreciate to the level of the area of 0.6750-0.6684 unless on its way to the level of that area AUD/USD suddenly reverses upwards and penetrates the level of 0.7127, then the downside scenario that has been described it will cancel by itself. Relevance up to 02:00 2023-01-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/117911
GBP/USD Options Market Anticipates 70 Pip Range on BoE Day

Slowdown In Inflation Is Likely To Produce A Rise In The British Pound (GBP)

Paolo Greco Paolo Greco 19.01.2023 08:23
On Wednesday, the GBP/USD currency pair resumed rising and managed to gain another 140–150 points. The UK inflation report, of course, served as the foundation for such a decision. The market reacted quite strongly and bought the pound virtually the entire day, although the actual value perfectly aligned with the prediction (10.5% in December). We have stated that a minor slowdown in inflation is likely to produce a rise in the British pound since it will force the Bank of England to hike interest rates more quickly than anticipated. The fact that it will be prepared for such a step is, however, far from certain. However, the market purchases the pound because it thinks there isn't and won't be any other option. In reality, given that all technical indicators point upward, what else can we anticipate from the British pound at this point? There isn't a single sell signal. The pound has already climbed "some" 2,100 points from its 2022 lows. However, if all technical indicators are pointing upward and we base our trading primarily on them, what difference does it make if we also consider that their growth is overly rapid and unreasonable? The first rule of trading is to always trade in the direction of the trend. Because there are no sell indications, we continue to trade for a raise while keeping in mind that the current growth is as irrational as possible. Additionally, the Bank of England's rate, which is currently 3.5%, should be mentioned. Let's assume it increases to 4% in two weeks. What will happen to inflation? It will fall by 0.5 percent. How can inflation respond to declining energy costs? Another negative 2–3%? In other words, for inflation to return to the target level within two to three years, the Bank of England needs to hike the rate to at least 5%, if not as high as 6%. They do not anticipate inflation to go below 3% this year, not even in the United States, where it has already decreased to 6.5%. What is there to say about the UK? It will take time for inflation to return to 2%. Morgan Stanley, an investment bank, has released a statement suggesting a potential future decline in inflation. The consumer price index may drop to 3% by the end of 2023, and 2% should be anticipated by the end of 2024, according to its analysts. As you can see, the inflation rise process is quick and simple, whereas the inflation fall process is difficult and drawn out. James Gorman, CEO of Morgan Stanley, thinks that a Fed rate cut this year is unlikely. Thus, the Fed's policy will continue to be "hawkish" for a very long time, something that market participants have forgotten lately. We think the dollar will bounce back, and just before the following sentence, let's not forget that we've been talking about a negative correction for nearly a month. In a report released by Standard Chartered, analysts predict that the euro and the pound will soon start to adjust. The report claims that after rapid expansion, there is no consolidation. The euro has already increased by 9%, and the pound has surged much more. A further increase is not impossible, but it is improbable without adjustment. The Fed is anticipated to boost the benchmark rate by at least 0.75%, according to Standard Chartered. And the American currency must be supported by this fact. The Fed rate's anticipated peak value may change as a result of China's strong economic recovery, which may cause a reduction in the rate of inflation's decline. As you can see, the biggest banks and research firms are similarly perplexed by the sudden and severe decline in the value of the US dollar, and the Fed hasn't even given up on tightening monetary policy yet. In the present situation, however, all we can do is wait for the market to "wake up," at which point the price will at the very least stabilize below the moving average. Remember that a fixation below the moving average is a signal for a potential trend change, but more evidence is required. Over the previous five trading days, the GBP/USD pair has averaged 138 points of volatility. This figure is "high" for the dollar/pound exchange rate. So, on January 19, we anticipate that movement that is constrained by the levels of 1.2205 and 1.2481 will occur inside the channel. A new phase of the corrective movement is indicated by the Heiken Ashi indicator turning downward. Nearest levels of support S1 – 1.2329 S2 – 1.2207 S3 – 1.2085 Nearest levels of resistance R1 – 1.2451 R2 – 1.2573 R3 – 1.2695 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair is still rising. Therefore, until the Heiken Ashi indicator turns down, it is still possible to hold long positions with objectives of 1.2451 and 1.2481. If the price is set below the moving average, you can start opening short bets with a 1.2085 objective. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 04:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332703
The Euro To US Dollar Instrument Did Not Change In Value

The Euro To US Dollar Instrument Did Not Change In Value

InstaForex Analysis InstaForex Analysis 19.01.2023 08:26
The wave marking on the euro/dollar instrument's 4-hour chart is still quite compelling and getting more intricate, and the entire upward segment of the trend is still quite convoluted. Although its length is better suited for the pulse portion, it has taken on a powerful corrective and extended form. The waves a-b-c-d-e have been combined into a complicated corrective structure, with wave e having a form that is far more complex than the other waves. Since the peak of wave e is substantially higher than the peak of wave C, if the wave markings are accurate, construction on this structure may be nearly finished. I'm still planning for a decline in the instrument because we are predicted to build at least three waves down in this scenario. The demand for the euro currency was increasing again in the first week of 2023, and the instrument was only able to deviate somewhat from its prior highs during this time. A new attempt to surpass 1.0721, which according to Fibonacci amounts to 200.0%, was successful, allowing the wave e to take on an even longer form. Unfortunately, there is another delay in starting to build the trend correction part. The Eurozone's inflation rate dropped to 9.2%. Despite having a high amplitude throughout the day on Wednesday, the euro/dollar instrument did not change in value. Just like that, demand for the euro rose in the morning while demand for the dollar rose in the afternoon. Two motions in separate directions that were almost identical were received. Since wave e is still under construction, it cannot be said to be finished. Since the data for the same month of December had already informed the markets of a decline to 9.2%, many experts did not pay the report on European inflation the proper attention. The final evaluation and the original one agreed. However, this report continues to be crucial in my opinion, which is why. Because central banks "dance" on inflation, it is currently a top concern in many countries around the world. Therefore, it is irrelevant whether it is the first or second assessment. The most important development is that inflation has begun to fall and is doing so swiftly. Perhaps Andrew Bailey and Christine Lagarde were correct when they predicted that lower energy prices would lead to lower inflation (which we are now seeing). Similar remarks were made by the ECB president at the same time last year. Since the ECB won't need to hike rates in increments of 75 or 50 basis points anymore, I think that over time, the European Union's declining inflation rate will start to put pressure on the euro. But as of now, inflation is still too high, so a slowdown in the rate of interest rate hikes is out of the question. Even if the consumer price index experiences a new, significant slowdown the next month, I believe the plans to increase the rate in the European Union by another 100-125 basis points will stand. However, the ECB might then decide to tighten by 25 points. Conclusions in general I conclude that the upward trend section's building is about finished based on the analysis. As a result, given that the MACD is indicating a "down" trend, it is now viable to contemplate sales with targets close to the predicted 0.9994 level, or 323.6% per Fibonacci. The potential for complicating and extending the upward portion of the trend remains quite strong, as does the likelihood of this happening. The market will be ready to finish the wave e when a bid to break through the 1.0950 level fails. The wave marking of the descending trend segment notably becomes more intricate and lengthens at the higher wave scale. The a-b-c-d-e structure is most likely represented by the five upward waves we observed. After the construction of this portion is complete, work on the downward trend segment can start.   Relevance up to 06:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332711
The EUR/USD Pair Chance For The Further Downside Movement

On The One-Hour Chart The EUR/USD Pair Has A Chance To Move Down

Paolo Greco Paolo Greco 19.01.2023 08:32
M5 chart of EUR/USD EUR/USD tried to cross 1.0868 on Wednesday twice, but by the end of the day it still moved away from this mark. If we weren't already used to the fact that the euro could rise by more than 1000 pips over the past months, we would say that the market is now in a flat. The pair has been between 1.0780 and 1.0868 for several days. But it might be just the calm before the euro surges. Do recall that the euro is desperately unwilling to correct, and only takes pauses from time to time. Yesterday the EU published a totally uninteresting inflation report. "Uninteresting" because it was the second estimate of the indicator for December, and it was not at all different from the first. Moreover, inflation fell quite noticeably, by 0.9%, which could in no way provoke a rise in the euro in the first half of the day. The euro was already falling even more during the US session, though the US reports were also weak. Despite the unusual behavior, Wednesday's trading signals were actually quite good. The first buy signal was not formed at the beginning of the movement, near 1.0806. After that the price managed to rise to 1.0868 and rebound from it, which was exactly ideal. The profit is 40 pips. The rebound from 1.0868 should have been used to open a short position, but the price failed to reach 1.0806, so this trade was closed with a Stop Loss at breakeven. Then followed a buy signal around 1.0868, which turned out to be false, the loss was 20 pips. And the last sell signal near the same level brought traders the profit of about 60 pips, as the price dropped below the critical line. In general, the day was very successful. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, the number of long positions held by non-commercial traders increased by 16,000, whereas the number of short positions rose by 11,000. Thus, the net positions increased by 5,000. The number of long positions is 135,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 48,000 (702,000 vs. 655,000). H1 chart of EUR/USD You can see on the one-hour chart that EUR/USD has a chance to move down. Crossing the critical line is quite an important signal, unless the price manages to rise above it today. This is a possibility, because lately the pair's movement seems more like a flat. On Thursday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137 and also Senkou Span B (1.0675) and Kijun Sen (1.0802) . Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 19, European Central Bank President Christine Lagarde will give a speech in the EU, which might be interesting. Then there are just minor reports and a few speeches from the Federal Reserve in the US. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 05:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332705
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The Market Is Still Taking Every Opportunity To Buy The Pound (GBP)

Paolo Greco Paolo Greco 19.01.2023 08:36
M5 chart of GBP/USD GBP/USD was rising again for most of the day and at least it corrected for a little bit during the US session. Bank of England Governor Andrew Bailey gave a speech this week, the essence of which was an expression of hope for the fall of the inflation rate in Britain "by itself". We think it is a dovish factor, but the pound still rose anyway. Yesterday, however, the UK inflation report recorded 10.5% in December, which was completely in line with forecasts, but the pound rose again. By itself, a weak fall in inflation is a bullish factor for the British currency, but at the same time the forecast and the actual value coincided.The market is still taking every opportunity to buy EUR and GBP, so I'm not surprised that both of them strengthened. Reports on industrial production and retail sales came out in the US yesterday, and they were weaker than expected, but the dollar rose steadily in the afternoon. There is still not much logic in the pair's movements. Speaking of trading signals, yesterday was almost ideal. During the night, the price rebounded from 1.2259 and rose to 1.2429. By the opening of the European trading session, the price moved back no more than 10 pips from the point of formation, so a long position could be opened. It brought profit of not less than 130 pips. The sell signal near 1.2429 also turned out to be a good one, and the price returned to 1.2342 at night, allowing traders to earn about 80 pips more. Even if they didn't wait for a breakout of 1.2342, the deal was still profitable. As a result, two deals and a profit of more than 150 pips. That was a great day! COT report The latest COT report showed an increase in bearish sentiment. During the given period, non-commercial traders closed 7,600 long positions and opened as many as 1,500 short positions. Thus, the net position fell by about 9,100. This figure has been on the rise for several months, and the sentiment may become bullish in the near future, but it hasn't yet. Although the pound has grown against the dollar for the last few months, from a fundamental perspective, it is difficult to answer why it keeps rising. On the other hand, it could fall in the near future (in the mid-term prospect) because it still needs a correction. In general, in recent months the COT reports correspond to the pound's movements so there shouldn't be any questions. Since the net position is not even bullish yet, traders may continue to buy the pair over the next few months. Non-commercial traders now hold 36,000 long positions and 65,500 short ones. I remain skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD continues to grow, sitting above the Ichimoku indicator lines. There are still few reasons for growth, and the pound has already gained 2100 points in recent months. However the market is still not happy with the USD, so the trend is unambiguous. On January 19, the pair may trade at the following levels: 1.2106, 1.2185, 1.2288, 1.2342, 1.2429-1.2458, 1.2589, 1.2659. The Senkou Span B (1.2063) and Kijun Sen (1.2290) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits.There are no interesting events in the UK on Thursday, and we only have minor reports in the US, which are unlikely to cause high interest among traders. A good opportunity for the pound to correct, but will it take advantage of it? What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     search   g_translate       Relevance up to 05:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332709
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

The EUR/USD Pair Has A Potential For The Higher Prices

Peter Jacimovic Peter Jacimovic 19.01.2023 08:49
Technical analysis: EUR/USD has been trading sideways at the price of 1.0786 and I see potential for the upside rotation towards upper references. Trading recommendation: Due to the strong support zone at the price of 1.0770, I see potential for the upside rotation towards resistance zone. Watch for the potential buying opportunities with the upside objective at the price of 1.0870. Stochastic oscillator is showing oversold condition and potential for the higher prices. Key support is set at the price 1.0770 Relevance up to 08:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309259
Unraveling UK Inflation: The Bank of England's Next Move

The Downward Part Of The GBP/USD Trend Has Started To Take Shape

InstaForex Analysis InstaForex Analysis 19.01.2023 08:59
The wave markup for the pound/dollar instrument currently appears rather complex, but it doesn't call for any explanations and starts to diverge dramatically from the markup of the euro/dollar instrument. Our five-wave ascending trend section has the form a-b-c-d-e and is most likely already finished. Since there was a very active departure of quotes from previously established highs between December 15 and January 6, there is a much greater likelihood that the British pound will finish the upward segment of the trend. As a result, I can say that the downward part of the trend has started to take shape and will include at least three waves. And as part of this segment of the trend, which can take both a five-wave and a five-wave impulse, the increase in the instrument's quotes over the past several days may be wave b. However, the drop in the British pound should continue because there has only been one downward wave created thus far, and it has not been in the strongest or most compelling form. There is no limit to how many times or how long the rising phase of the trend can become more convoluted, but this is not a typical occurrence. I continue to attempt to expand upon the conventional wave structures, which can be utilized for both work and prediction. The UK's inflation rate has remained unchanged. On Wednesday, the pound/dollar exchange rate increased by 60 basis points. The pound could have increased the price much further, but in the afternoon, the quotes started to decline from the day's high points. The preservation of the current wave marking is essentially at stake with this departure. The marking of wave b will change, and the entire upward segment of the trend will assume an even more complex shape if the instrument's increase persists today or tomorrow. While this hasn't happened, I'm hoping for a decrease in quotes given this week's major British news events that have already transpired. But because there is no background news on Thursday and Friday, the market sentiment might not shift. When compared to November, there were no appreciable changes in the UK's inflation data for December. From 10.7% y/y to 10.5% y/y, the consumer price index slowed. Core inflation stayed the same at 6.3%, indicating no change at all. As a result, the decrease in inflation proved to be official. A 0.2% slowdown is almost equivalent to no slowing at all. The market quickly deduced that even after the Bank of England rate increased to 3.5%, inflation was still rising and that we could expect an increase in early February of at least 50 basis points. This conclusion led to an increase in demand for the British pound yesterday. Now that this aspect has been taken into account, the demand for the pound can gradually decline. Conclusions in general The building of a downward trend section is still assumed by the wave pattern of the pound/dollar instrument. At this point, sales with objectives at the level of 1.1508, or 50.0% by Fibonacci, might be taken into consideration by the "down" reversals of the MACD indicator. The upward portion of the trend is probably over, however, it might yet take a longer form than it does right now. However, you must exercise caution while making sales because the pound has a significant tendency to rise. The euro/dollar instrument and the picture seem extremely similar at the larger wave scale, which is fortunate because both instruments should move similarly. Currently, the upward correction portion of the trend is almost finished (or has already been completed). If this is the case, a downward portion will likely be built for at least three waves, with the possibility of a drop in the region of figure 15   Relevance up to 06:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332715
Forex: Most NOK Gains May Be Channelled Against The Dollar

Forex: Most NOK Gains May Be Channelled Against The Dollar

ING Economics ING Economics 19.01.2023 09:22
Intense scrutiny of the US growth story means that the dollar remains vulnerable to data releases as markets keep scaling back Fed rate expectations. We see more downside risks for USD in the near term. Elsewhere, hawkish ECB minutes and remarks by Lagarde could support the euro, and we expect a 25bp hike by Norges Bank despite rising bets of a hold Source: Shutterstock USD: Data continues to haunt the dollar In yesterday’s FX Daily, we flagged the risk of fresh US data hitting the dollar given the recent scrutiny (and pessimistic narrative) by the market of the US growth story. That risk materialised as retail sales and industrial production came in softer than expected, triggering another round of dovish repricing in Federal Reserve rate expectations. The USD 2-year swap rate hit 4.35% yesterday, the lowest since early October, and the differential with the corresponding EUR rate is now very close to the -124bp December high. Our US economist now sees growing risks that the Fed may stop hiking after a 25bp move in February. The correlation between the 2-year swap rate differential and EUR/USD has not been very strong in the past year but is picking up again. Most importantly, the weakness in the correlation largely derived from the euro’s low sensitivity to European Central Bank policy, rather than to the Fed’s. The fact that the ongoing dovish repricing is not only a consequence of slowing inflation but also of a worsening economic outlook in the US has exacerbated the negative implications for the dollar, especially as a positive re-rating of growth expectations is happening in Europe and China. One could argue that the dollar is facing a rather uniquely-timed combination of negative factors, and that the sustainability of the optimistic growth re-rating in Europe and China may be challenged by fresh commodity price volatility and high infection numbers – respectively. We see value in such an argument, and a straight-lined dollar depreciation in the first quarter is far from assured. But global and US-specific dynamics continue to suggest a bearish bias on the dollar in the near term. DXY may re-test yesterday’s 101.55 lows by the end of the week. Today, markets will watch the size of the increase in initial jobs claims, as well as housing data and the Philadelphia Fed survey. The Fed’s Susan Collins, Lael Brainard and John Williams are scheduled to speak. Elsewhere, Asian G10 currencies are following diverging paths this morning. The yen is recovering across the board as markets seem to cautiously re-enter long positions after the Bank of Japan defied the hawkish speculation yesterday. We continue to see downside risks for USD/JPY despite a dovish BoJ. The Australian dollar has come under pressure after a surprise contraction in employment in December, which endorses the recent cautious stance by the Reserve Bank of Australia. Still, we’d need to see inflation come off more convincingly before making strong calls about the end of the RBA hiking cycle. We continue to favour AUD/USD on the back of positive external developments (China, risk sentiment). The New Zealand dollar is suffering from some spill-over effects from AUD, while the news that prime minister Jacinda Ardern is resigning at the end of her mandate hardly seems like a key driver considering that her party is trailing in the polls ahead of the October election. Francesco Pesole EUR: ECB pushes back against dovish speculation Yesterday, ECB Governing Council member Francois Villeroy explicitly pushed back against recent reports suggesting a switch to 25bp increases and said that President Christine Lagarde’s 50bp guidance remains valid. Lagarde herself will speak in Davos today, and there is a good chance she will reiterate the ECB’s hawkish stance despite lower energy prices. Dovish speculation should be further challenged by the release of the December 2022 ECB meeting minutes, as the details of the dissent to a “too conservative” 50bp hike should emerge, as well as guidance to “multiple” 50bp increases. We expect to see some consolidation/further upside in EUR/USD by the end of the week when the pair could trade around 1.0850/1.0900. Francesco Pesole GBP: Starmer to pledge Brexit fix The leader of the opposition Labour Party, Keir Starmer, is reported to deliver a rather conciliatory speech in Davos today about the future of EU-UK relationships. In an interview with the Financial Times, Starmer criticised the Brexit deal and said he aims to rebuild good trade relationships with the bloc. The Labour party is leading by a rather large margin in the latest opinion polls ahead of next year’s general elections and evidence of a softer stance on Brexit should benefit the pound in the long run. Today, there are no events or data releases in the UK. Some recovery in the EUR may still send EUR/GBP back to 0.8800+ by the end of this week. Francesco Pesole NOK: Norges Bank may deliver last hike today Norges Bank announces monetary policy this morning, and the consensus is split between a 25bp and a hold. The latest projections saw the Bank signal a 3.00% peak rate (now at 2.75%) in early 2023, and a combination of resilient underlying inflation, growth and employment suggests – in our view – this should be the right time to deliver the last hike of the cycle. Indeed, concerns about slowing economic activity, lower energy prices and housing market vulnerability are all important factors in the Norges Bank’s decision-making process, and we admit it’s a rather close call. There will be no new projections today, but only a brief statement, so the krone's reaction will primarily depend on the hike/no-hike decision. In line with our call, we see upside risks for NOK today. EUR/NOK could trade close to 10.60-10.65 again today, but idiosyncratic EUR strength suggests most NOK gains may be channelled against the dollar. Francesco Pesole Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

Subdued US Dollar Price Action Lends Some Support To The NZD/USD Pair

TeleTrade Comments TeleTrade Comments 19.01.2023 10:10
NZD/USD trades with modest losses on Thursday, though the downside remains cushioned. Looming recession risks weigh on investors’ sentiment and undermine the risk-sensitive Kiwi. Subdued USD price action lends some support to the major and helps limit any deeper losses. The NZD/USD pair edges lower during the Asian session on Thursday and moves away from its highest level since June 2022, around the 0.6530 area touched the previous day. Spot prices, however, manage to hold above the 0.6400 mark, making it prudent to wait for strong follow-through selling before positioning for any further intraday downfall. The weaker US macro data released on Wednesday adds to worries about a deeper global economic downturn and continues to weigh on investors' sentiment. This is evident from a softer tone around the equity markets and acts as a headwind for the risk-sensitive Kiwi, which reacts little to news that Prime Minister Jacinda Ardern will step down next month. That said, subdued US Dollar price action lends some support to the NZD/USD pair and helps limit the downside, at least for the time being. A further decline in the US Treasury bond yields, amid firming expectations for a less aggressive policy tightening by the Fed, keeps the USD bulls on the defensive. In fact, the markets now seem convinced that the US central bank will soften its stance and have been pricing in a smaller 25 bps rate hike in February. The bets were reaffirmed by the US data, showing that retail sales in December fell by the most in a year and manufacturing output recorded its biggest drop in nearly two years. That said, several FOMC members indicated on Wednesday that they will push on with more interest rate hikes even as inflation shows signs of easing and economic activity is slowing. Apart from this, looming recession risks should benefit the greenback's relative safe-haven status and exert some downward pressure on the NZD/USD pair. Traders now look to the US economic docket, featuring the Philly Fed Manufacturing Index, the usual Weekly Initial Jobless Claims and housing market data. Read next: The Japanese Yen (JPY) Weakened, The Aussie Pair Is Trading Above 0.70$| FXMAG.COM This, along with speeches by Fed officials and the US bond yields, might influence the USD price dynamics later during the early North American session. Apart from this, traders will take cues from the broader risk sentiment to grab short-term opportunities around the NZD/USD pair. Nevertheless, the mixed fundamental backdrop warrants some caution before placing aggressive directional bets
The USD/IDR Pair Is Expected A Further Downside Movement

The USD/IDR Pair Is Expected A Further Downside Movement

TeleTrade Comments TeleTrade Comments 19.01.2023 10:12
USD/IDR struggles to extend losses despite breaking seven-month-old support line as traders await Bank Indonesia (BI) Rate decision. 200-DMA, oversold RSI conditions also challenge bears around multi-day low. Buyers remain off the table unless rising back beyond 100-DMA. BI is expected to end the rate-hike cycle with 0.25% lift in benchmark interest rate. USD/IDR bears pressure on the key moving average as the key awaits the Bank Indonesia (BI) Rate decision during early Thursday. In doing so, the Indonesia Rupiah (IDR) extends the retreat from seven-month-old previous support to $15,100 by the press time. That said, the BI is up for the final blow in the fight again inflation as market forecasts suggest the last 0.25% rate hike before the end of monetary policy contraction, at least for now. Bank Indonesia will deliver another 25 basis points interest rate hike on Thursday as it tries to bring inflation under control without having a big impact on economic growth, a Reuters poll of economists forecast. On the technical front, the quote’s sustained weakness below an upward-sloping trend line from early June 2022 joins the bearish MACD signals to keep the USD/IDR sellers hopeful. However, the oversold RSI conditions join the 200-DMA, around $15,100 by the press time, to challenge the bears. Should the quote drops below $15,100, the August 2022 peak surrounding $14,980 and the 61.8% Fibonacci retracement level of the USD/IDR pair’s June-November upside, near $14,910, could challenge the pair sellers. On the flip side, a daily closing beyond the support-turned-resistance line, close to $15,200 by the press time, appears necessary to recall the USD/IDR bulls. Even so, the early December swing low near $15,290 and the 100-DMA level around $15,420, could test the upside momentum. USD/IDR: Daily chart Trend: Further downside expected
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The Rebound In The British Pound Contributes To A Strongly Bid Tone Around The GBP/JPY Cross

TeleTrade Comments TeleTrade Comments 19.01.2023 10:16
GBP/JPY witnessed heavy selling on Thursday and retreats further from a three-week high. Recession fears boost demand for the safe-haven JPY and exert some downward pressure. The prospects for more BoE rate hikes underpin the GBP and should limit deeper losses. The GBP/JPY cross extends the previous day's retracement slide from the 161.50 region, or a three-week high and remains under heavy selling pressure on Thursday. Spot prices snap a three-day winning streak and drop back closer to mid-157.00s, hitting a fresh daily low heading into the European session. As investors digest the Bank of Japan's (BoJ) dovish policy decision on Wednesday, looming recession risks boost demand for the safe-haven Japanese Yen and exert pressure on the GBP/JPY cross. Investors remain concerned about the potential headwinds stemming from the worst yet COVID-19 outbreak in China. Apart from this, the protracted Russia-Ukraine war has been fueling worries about a deeper global economic downturn. The fears were fueled by Wednesday's weaker US macro data, which showed that retail sales in December fell by the most in a year and manufacturing output recorded its biggest drop in nearly two years. This, in turn, forces investors to take refuge in traditional safe-haven assets and benefits the JPY. Apart from this, a modest pullback in the British Pound contributes to the heavily offered tone surrounding the GBP/JPY cross. Despite the downfall, spot prices remain well above the weekly low amid expectations that the Bank of England will continue raising interest rates to combat stubbornly high inflation. The bets were lifted by the stronger wage growth data released on Tuesday, which is expected to keep inflation elevated. Furthermore, the headline UK CPI - though fell to a three-month low in December - is still running at levels last seen in the early 1980s. Read next: Un Secretary General Antonio Guterres Encouraged The Transition To Green Energy At The World Economic Forum In Davos, The Chinese Economy May Surprise You Positively| FXMAG.COM In the absence of any relevant market-moving economic releases from the UK, the aforementioned mixed fundamental backdrop warrants some caution for aggressive bearish traders. Hence, it will be prudent to wait for strong follow-through selling before positioning for any further depreciating move for the  GBP/JPY cross
The RBA Is Expected To Raise Rates By 25bp Next Week

The AUD/USD Bears Cheer The Recession Woes In The US

TeleTrade Comments TeleTrade Comments 19.01.2023 10:21
AUD/USD bears poke previous monthly top during a two-day downtrend from five-month high. Australia jobs report bolstered case for slower rate hike from the RBA. US Treasury bond yields renew multi-day low even as downbeat data, hawkish Fedspeak renew recession fears. AUD/USD holds lower ground near the intraday low near 0.6890 as the previous monthly top probes the bears during the second loss-making day amid early Thursday in Europe. In doing so, the Aussie pair extends the previous day’s pullback from the highest levels since August 2022 amid a downbeat Australian employment report for August, as well as growing fears of recession. Australia’s headline Employment Change turned negative on a seasonally adjusted basis, printing -14.6K figure versus 22.5K expected and 64K prior. Further, the Unemployment Rate also rose to 3.5% compared to the market consensus of witnessing no change in the 3.4% previous readings. Elsewhere, softer prints of the US data and hawkish Fed talks renew economic slowdown fears and weigh on the sentiment, which in turn exert downside pressure on the risk-barometer AUD/USD pair. That said, US Retail Sales marked the biggest slump in a year while the Producer Price Index also dropped to the lowest level in six months during December. Further, St. Louis Federal Reserve's President James Bullard said US interest rates have to rise further to ensure that inflationary pressures recede. On the same line, President of the Federal Reserve Bank of Cleveland Loretta Mester praised the Fed’s actions to tame inflation. Further, Kansas City Fed President Esther George mentioned that the central bank must restore price stability, "that means returning to 2% inflation." Recently, Dallas Federal Reserve President Lorie Logan supported a slower rate hike pace but also mentioned possibly a higher stopping point. As the AUD/USD bears cheer the recession woes in the US, as well as fears of a less hawkish Reserve Bank of Australia (RBA) due to the downbeat Aussie jobs report, the pair traders ignore upbeat concerns surrounding China. Recently, Gita Gopinath, the first Deputy Managing Director of the International Monetary Fund (IMF) said, “China could see a sharp recovery in economic growth from the second quarter onwards based on current infection trends after the dismantling of most COVID-19 restrictions.” Amid these plays, the S&P 500 Futures and Australia’s ASX 200 print mild losses while the US 10-year Treasury yields refresh a four-month low and the two-year counterpart drops to the lowest levels since early October at the latest. Looking forward, AUD/USD traders should pay attention to the risk catalysts, mainly the central bank speakers amid a light calendar, for clear directions as bears struggle to retake control.
Mexico’s Central Bank Surprised Markets With A 50bps Rate Hike Once Again

Mexican Retail Sales Could Direct The USD/MXN Moves

TeleTrade Comments TeleTrade Comments 19.01.2023 10:33
USD/MXN picks up bids to renew intraday high, defends two-day gains. US Dollar remains pressured as softer US data fails to support hawkish Fed talks. Mexican Peso is among the top Emerging Market performers as commodity prices surge. USD/MXN reveres intraday losses to 18.95 heading into Thursday’s European session as Mexican Peso consolidates recent gains around the multi-month low. The resource-rich Latin America (LATAM) cheers softer US Dollar, as well as higher commodity prices to exert downside pressure on the USD/MXN prices. That said, the quote’s downside move also takes clues from the softer US Treasury yields and fears of US recession, mainly due to the downside US data. However, consolidation of the recent losses ahead of Friday's Mexican Retail Sales seem to have triggered the latest corrective bounce. While checking the details the US Retail Sales marked the biggest slump in a year while the Producer Price Index also dropped to the lowest level in six months during December. Alternatively, St. Louis Federal Reserve's President James Bullard said US interest rates have to rise further to ensure that inflationary pressures recede. On the same line, President of the Federal Reserve Bank of Cleveland Loretta Mester praised the Fed’s actions to tame inflation. Further, Kansas City Fed President Esther George mentioned that the central bank must restore price stability, "that means returning to 2% inflation." Recently, Dallas Federal Reserve President Lorie Logan supported a slower rate hike pace but also mentioned possibly a higher stopping point. Elsewhere, the US 10-year Treasury yields refresh a four-month low whereas the two-year counterpart drops to the lowest levels since early October at the latest. Against this backdrop, the S&P 500 Futures print mild losses by the press time, while tracking Wall Street’s close. Looking forward, Friday’s Mexican Retail Sales could direct USD/MXN moves amid a light calendar before that. However, the risk catalysts and yields will be crucial to watch for clear directions. Read next: Un Secretary General Antonio Guterres Encouraged The Transition To Green Energy At The World Economic Forum In Davos, The Chinese Economy May Surprise You Positively| FXMAG.COM Technical analysis The downside break of the previous key support line from July 2017, now resistance around 19.73, keeps USD/MXN bears hopeful. Meanwhile, the pair buyers need validation from 61.8% Fibonacci retracement level of the pair’s run-up from July 2017 to April 2020, close to 20.65, to retake control.
Underestimated Risks: Market Underestimating Further RBA Tightening

Economists At Credit Suisse Still Think The Rupee Will Weaken Vs USD

TeleTrade Comments TeleTrade Comments 19.01.2023 10:40
Last week’s Dollar selloff pushed USD/INR below 82.00. Economists at Credit Suisse now widen their USD/INR range to 81.00-84.0 and highlight the risk of RBI intervention near 81.00. USD/INR target widened to 81.00-84.00  “Although we still think the Rupee will weaken vs USD over the long term, in the short term REER stability means that USD/INR will reflect broad USD weakness, as the RBI occasionally shifts its intervention corridor accordingly.” “Now that the 82.00 level has broken, we expect more rigorous intervention by the central bank near 81.00.”  Read next: Un Secretary General Antonio Guterres Encouraged The Transition To Green Energy At The World Economic Forum In Davos, The Chinese Economy May Surprise You Positively| FXMAG.COM “Although further USD weakness means the RBI could shift its intervention corridor yet again, recent history suggests that 81.00 is a firmer ‘red line.’ As such, we widen our Q1 USD/INR forecast range to 81.00-84.00.” 
The EUR/USD Pair Has A Potential For Drop

EUR/USD Pair Holds Gains Above 1.0800, The Aussie Pair Falls To 0.6875

Kamila Szypuła Kamila Szypuła 19.01.2023 14:16
Concerns about US growth due to recent shortages in US PPI and retail sales cast a shadow over the dollar. The Fed's hawkish speakers are being largely shunned by the markets at this point. USD/JPY The Japanese yen, long favored as a safe haven and funding currency, has become so embroiled in market speculation over central bank policy in recent weeks that Wednesday's status quo decision triggered the yen's biggest fall in nearly three years. In a bond market where the central bank battled bond bears to defend its yield cap, the BoJ bought up so many of the issued 10-year Japanese government bonds that market liquidity virtually dried up. Speculators focused on the yen instead. Until late last year, BJ's dovish stance in the face of aggressive rate hikes by the Federal Reserve and other major central banks meant the yen was cheap and weak, making it an ideal currency to borrow for investment. Today USD/JPY started the day at 128.55 but then dropped below 128. USD/JPY is now trading back at the level from the start of the day, above 128.50 AUD/USD The Australian dollar falls after the unemployment rate in December was 3.5% from 3.4%. The figures show that the labor market remains robust, even as the Reserve Bank of Australia raised the cash rate by 3% from its pandemic low. The bank has rolled back large rate hikes and the futures market has a 50-50 chance of a 25 basis point hike priced at the February 7 monetary policy meeting. Ahead of this meeting, the key CPI data for the fourth quarter will be released on Wednesday next week, January 25. The RBA said it expects growth to 8% later this year The AUD/USD pair extended an overnight sharp pullback from the 0.7060-0.7065 area, its highest level since Aug. 16, and remains under strong selling pressure for a second consecutive day on Thursday. The downward trajectory remains uninterrupted throughout the European session. The Australian pair is currently trading below $0.70 but above $0.6850. Read next: Elon Musk Is Facing Trial In Fraud Trial Over 2018 Tweets| FXMAG.COM GBP/USD GBP/USD consolidates losses below 1.2350 during Thursday's European session. GBP/USD pair is currently above 1.2330. On the UK front, inflationary pressures have eased, according to the December Consumer Price Index (CPI) report published on Wednesday. Headline inflation was lowered to 10.5% on an annualized basis and the core CPI, which excludes oil and food prices, remained stable at 6.3%. The magnitude of the drop in the inflation rate is not enough to convince market participants that inflation in the UK is falling in a promising way. Therefore, investors should prepare for the continuation of the extremely hawkish monetary policy of the Bank of England (BoE). The UK data schedule is empty on Thursday, however, and traders will have to content themselves with looking ahead until Friday, when consumer confidence figures for January and retail sales figures for December are released. Consumers are expected to be a little less optimistic than they were. EUR/USD European Central Bank (ECB) President Christine Lagarde's speech on Thursday will point investors to the likely monetary policy actions in February. Falling energy prices in the euro area have moderated inflation, but the current rate of inflation is still far from the median. Therefore, investors should prepare for a hawkish comment by Lagarde from the European Central Bank. European Central Bank (ECB) policymaker Francois Villeroy de Galhau said on Wednesday it was "too early to speculate what we will do in March". However, he believes that Lagarde's earlier forecast of 50 bp is still valid. EUR/USD holds gains above 1.0800 in European trading. The pair is supported by falling US Treasury yields. Source: investing.com, finance.yahoo.com
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

The Australian Jobs Report In December Had A Negative Impact On The Australian Dollar (AUD)

Kenny Fisher Kenny Fisher 19.01.2023 14:53
The Australian dollar has extended its slide on Thursday. AUD/USD is trading at 0.6884 in Europe, down 0.82%. Australian employment data disappoints Australia’s December employment report was weaker than expected, sending the Australian dollar sharply lower. The headline reading showed a loss of 14,600 in total employment, which may have soured investors. The release wasn’t all that bad, as full-time jobs showed gains of 17,600, with part-time positions falling by 32,200. The unemployment rate remained at 3.5%, but this was a notch higher than the forecast of 3.4%. On the inflation front, recent releases point to inflation moving higher. November CPI rose to 7.3%, up from 6.9%, and the Melbourne Institute Inflation Expectations climbed to 5.6%, up from 5.2%. We’ll get a look at the all-important quarterly inflation reading next week. Inflation came in at 1.8% q/q in Q3, and an acceleration in Q4 would force the Reserve Bank of Australia to consider raising rates higher and for longer than it had anticipated. The cash rate is currently at 3.10%, and I expect the RBA will raise it to 3.50% or a bit higher, which means we are looking at further rate hikes early in the year. The US dollar seems to take a hit every time there is a soft US release, and this week has had its share of weak data. The Empire State Manufacturing Index sank to -32.9, while headline and core retail sales both fell by -1.1%. PPI came in at -0.5%. All three releases were weaker than the November readings and missed the forecasts, indicating that cracks are appearing across the US economy, as the bite of higher rates is being felt. The markets are clinging to the belief that softer numbers will force the Fed to ease up on its pace of rate hikes and possibly end the current rate-cycle after a 25-bp increase in February. The Fed has done its best to dispel speculation that it will pivot, but I expect the US dollar to lose ground if key releases are weaker than expected.   AUD/USD Technical AUD/USD is testing support at 0.6893. Below, there is support at 0.6810 0.6944 and 0.7027 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

The Close Of The New York Stock Exchange Was Red For All Indices

InstaForex Analysis InstaForex Analysis 20.01.2023 08:00
At the close of the New York Stock Exchange, the Dow Jones fell 0.76%, the S&P 500 fell 0.76%, and the NASDAQ Composite index fell 0.96%. Dow Jones UnitedHealth Group Incorporated was the top performer among the components of the Dow Jones index today, up 8.12 points or 1.71% to close at 484.36. Quotes Merck & Company Inc rose by 1.11 points (1.02%), ending trading at 109.90. Chevron Corp rose 1.77 points or 1.00% to close at 179.00. The least gainers were Home Depot Inc, which shed 12.81 points or 3.96% to end the session at 310.88. 3M Company was up 3.52% or 4.32 points to close at 118.43, while American Express Company was down 2.37% or 3.57 points to close at 146. 85. S&P 500 Among the S&P 500 index components gainers in today's trading were Comerica Inc, which rose 5.91% to 69.84, M&T Bank Corp, which gained 5.49% to close at 153.81, and shares of Truist Financial Corp, which rose 4.31% to end the session at 47.71. The least gainers were Enphase Energy Inc, which shed 10.92% to close at 222.97. Shares of SolarEdge Technologies Inc lost 10.32% to end the session at 286.72. Quotes Northern Trust Corporation fell in price by 8.60% to 90.46. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Neurosense Therapeutics Ltd, which rose 76.19% to hit 2.22, Salarius Pharmaceuticals Inc, which gained 52.99% to close at 3.58, and also shares of Cuentas Inc, which rose 40.48% to end the session at 0.59. The least gainers were Jupiter Wellness Inc, which shed 38.81% to close at 0.62. Shares of Aceragen Inc lost 33.33% and ended the session at 5.76. Quotes of SurModics Inc decreased in price by 29.35% to 26.38. Numbers On the New York Stock Exchange, the number of securities that fell in price (1842) exceeded the number of those that closed in positive territory (1204), while quotes of 91 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,337 stocks fell, 1,353 rose, and 190 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.88% to 20.52. Gold Gold futures for February delivery added 1.41%, or 26.90, to $1.00 a troy ounce. In other commodities, WTI crude for March delivery rose 1.22%, or 0.97, to $80.77 a barrel. Futures for Brent crude for March delivery rose 1.51%, or 1.28, to $86.26 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.38% to 1.08, while USD/JPY fell 0.38% to hit 128.38. Futures on the USD index fell 0.28% to 101.82   Relevance up to 03:00 2023-01-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/309378
Growth Of The USD/JPY Pair Is Hampered By Resistance

Growth Of The USD/JPY Pair Is Hampered By Resistance

InstaForex Analysis InstaForex Analysis 20.01.2023 08:01
After the yen experienced increased volatility on Wednesday, the currency in question is moving sideways yesterday and this morning as well. At the same time, traders are still bullish on the pair, the nearest target is 129.80, which is the line of the price channel on the higher chart. In case the quote continues to rise, the upper line of the descending green price channel is waiting around the 130.67 mark. Leaving the channel will open the next target at 133.60. The Marlin oscillator supports the price growth by rising in its own ascending channel. Crossing the signal line of the oscillator above the zero line will strengthen the price growth. On the four-hour chart, the Marlin oscillator is rising in the positive area, but growth is hampered by resistance of the balance indicator line. The MACD line is currently above the price, above the resistance of 129.80 on the daily chart. Also, considering the downtrend, we can assume other market obstacles to the pair's growth. With time, however, we still expect a full-fledged correction from the price decline from October 21. Relevance up to 03:00 2023-01-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332814
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The GBP/USD Pair Does Not Show The Prospects Of Development

InstaForex Analysis InstaForex Analysis 20.01.2023 08:04
The British pound has not yet succumbed to the pressure of stocks. The U.S. S&P 500 was down 0.76% yesterday, the British FTSE100 -1.07%. Asian stocks are trading mixed this morning. UK retail sales data for December will be released today with forecast at 0.5% versus -0.4% in November. The overlap of the decline is 0.1%, which is good amid the collapse of US retail sales (-1.1%), only the pound's strength against the stock market pressure may be running out, so the data should still be better than the forecast for a strong growth. From a technical point of view, the pressure on the price is also increasing - the Marlin oscillator shows the intention to turn down with the prospect of forming a divergence, and it hasn't crossed the linear resistance of 1.2410. There is a 60% probability of a reversal. On the four-hour chart, the price slowed down before 1.2410, the Marlin oscillator follows the price, it does not show the prospects of development. As a consequence, fundamental factors are coming to the forefront. We're waiting for reports and monitoring the price's reaction to it. The first clear sign of the reversal will be the price crossing the MACD line, which is near the highs of the 1.2280 on August 1 and 10.   Relevance up to 03:00 2023-01-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332816
The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

The Main Scenario Of The EUR/USD Pair Is Still A Downtrend

InstaForex Analysis InstaForex Analysis 20.01.2023 08:07
Yesterday's attempt to overcome the support range at 1.0758/87, just like the previous day, had failed. The euro rose by 38 pips. Now, the EUR/USD has a chance to rise to the target level of 1.0990 like it did on Wednesday. It has a small chance, the main scenario is still a downtrend, with the price crossing this range and settling below it. The probability of growth will increase only when the divergence breaks on the daily chart. This may happen after EUR crosses the January 18 high at 1.0887. On the four-hour chart, yesterday's rebound occurred from the MACD indicator line. Here, too, at the moment, the Marlin oscillator is in the red zone.   Relevance up to 03:00 2023-01-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332818
EUR: German IFO Data and Central Bank Hawkishness Impact Euro/USD Range Trade

The US Dollar Index Price Is Preparing To Rally

Oscar Ton Oscar Ton 20.01.2023 08:24
Technical outlook: The US dollar index dropped through the 101.65 low before finding support again as the bulls prepare to come back in control. The index is seen to be trading close to 101.80 at this point in writing and is expected to push through the 102.40 initial resistance in the near term. Ideally, prices should stay above the 101.00 interim low carved early this week. The US dollar index might have completed its larger-degree decline between 114.70 and 101.00. Prices have met the Fibonacci 1.618 extension around 102.22 and climbed by almost 100 points. If the above structure holds well, the bulls are expected to come back strong from here and push prices through 105.35 to confirm a potential trend reversal. The US dollar index is preparing to rally against the 101.65 low according to the lower-degree wave structure. Prices are either preparing to rally through 106.50 and up to 109.50 or to push towards a new high above 114.70. Either way, the instrument is looking higher from here as long as the 101.00 support remains intact. Trading idea: Potential rally against 101.00 Good luck!     Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309397
The EUR/USD Price May Fall Under 1.0660

The EUR/USD Pair Is Still Vulnerable To A Bearish Reversal

Oscar Ton Oscar Ton 20.01.2023 08:17
Technical outlook: EURUSD rallied through the 1.0844 highs intraday on Friday before finding resistance. The single currency pair is seen to be trading just below 1.0830 at this point in writing and could slip below the 1.0770 interim support anytime soon. That would confirm that a meaningful top is in place at 1.0887 early this week and the bears are back in control going further. EURUSD has risen in the past several weeks from the 0.9535 low through the 1.0887 high. In the process, the bulls have taken out a major resistance around 1.0786. This price action is indicative of the fact that the instrument should be preparing for a meaningful pullback towards at least 1.0370 and down to 1.0050 in the next few weeks. EURUSD is still vulnerable to a bearish reversal from the resistance zone of 1.0800-1.0900 as marked on the daily chart. Immediate support is seen at 1.0481; while resistance is around 1.0900-10 respectively. A break below 1.0481 will add further confidence to the bearish proposed target of 1.0370, followed by 1.0050. Trading idea: Potential bearish move against 1.0950 Good luck!     Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309396
Underestimated Risks: Market Underestimating Further RBA Tightening

The Indian Rupee (INR) Cheers Broad US Dollar Weakness

TeleTrade Comments TeleTrade Comments 20.01.2023 08:38
USD/INR probes three-day downtrend but bears approach seven-week-old key support line. Hopes of more foreign fund inflow due to moves of Indian private players underpin INR strength. Mixed US data weigh US Dollar even as Fed policymakers stay hawkish heading into pre-FOMC blackout. Firmer Oil price, RBI’s defensive move could challenge the USD/INR bears. USD/INR holds lower ground at the weekly low as bears keep control during early Friday in India, despite recent bounce off the intraday low to 81.25. In doing so, the Indian Rupee (INR) cheers broad US Dollar weakness, as well as hopes of INR demand, amid a sluggish session. The chatters over heavy inflows due to Adani Enterprise's $2.5 billion share sale and the merged HDFC’s likelihood of receiving $3.0 billion Foreign Portfolio Investment (FPI) keeps the INR on the front foot. However, upbeat prices of WTI crude oil, up 0.55% intraday near $81.20 by the press time, seem to challenge the pair bears due to India’s reliance on energy imports. On the same line could be the Reserve Bank of India’s (RBI) market meddling to tame the Indian Rupee upside also limit the quote’s losses. It should be noted that the RBI’s monthly bulletin said on Thursday that a slowdown in growth with possibilities of recession in swathes of the global economy had become the baseline assessment even as inflation might average well above target. The RBI also argued in the bulletin that emerging markets were appearing more resilient now. Elsewhere, policymakers of the Federal Reserve (Fed), the European Central Bank (ECB) and the Bank of England (BoE) favored the rate hike trajectory despite the recent softening of data. However, the US Dollar failed to cheer the hawkish comments as Treasury bond yields remain sidelined around multi-day low and the US statistics came in mixed on Thursday. That said, Federal Reserve Bank of New York President John Williams and Fed Vice Chair Lael Brainard was the latest ones to back the higher rates at the US central bank as policymakers sneak into the pre-monetary policy mum starting this Saturday. It should be noted that the People’s Bank of China’s (PBOC) status quo and the Taiwan Defence Ministry’s signal about China’s growing air presence fail to gain major attention. Against this backdrop, the key US Treasury bond yields remain pressured while the S&P 500 Futures print mild gains. That said, stocks in the Asia-Pacific region trade mixed at the latest. Moving on, a light calendar pushes USD/INR traders to watch for risk catalysts and central bank comments for fresh impulse. Technical analysis Although the USD/INR bears keep the reins unless the quote remains below the 100-DMA level of 81.75, an upward-sloping support line from December 01, 2022, around 81.05 by the press time, puts a floor under the price.
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The Loonie Pair (USD/CAD) Is Getting Ready To Grow

TeleTrade Comments TeleTrade Comments 20.01.2023 08:42
USD/CAD remains indecisive on a day while taking rounds to 1.3460-50 during early Friday. Even so, the Loonie pair braces for the first weekly gain in five amid upbeat signals from the options market. That said, a one-month risk reversal (RR) of the USD/CAD pair, a ratio of call options versus put options, also known as the bullish bets and the bearish bets in that order, printed the first positive figures in three days at the latest, to +0.075 by the end of Thursday’s North American session. It’s worth noting that the weekly RR reverses the previous negative figure of -0.323 with +0.100 by the press time. It should be noted that the firmer prices of Oil, Canada’s key export, contrasts with the US Dollar’s inability to cheer the hawkish Federal Reserve (Fed) comments to restrict immediate USD/CAD moves. Also read: USD/CAD looks to regain 1.3500 despite firmer Oil price, Canada Retail Sales, Fed talks eyed
Further Upward Price Movement Of The AUD/USD Pair Is Expected

Positive Tone Around The Asian Equity Markets Help Limit The Downside For The AUD/USD Pair

TeleTrade Comments TeleTrade Comments 20.01.2023 08:48
AUD/USD gains some positive traction on Friday, though lacks follow-through. The USD benefits from rebounding US bond yields and caps gains for the pair. A mildly positive risk tone might act as a tailwind for the risk-sensitive Aussie. The AUD/USD pair edges higher during the Asian session on Friday and recovers further from over a one-week low, around the 0.6870 region touched the previous day. The pair, however, trims a part of its modest intraday gains and is currently placed around the 0.6920-0.6915 area, up less than 0.15% for the day. The US Treasury bond yields build on the overnight recovery from a four-month low and lend some support to the US Dollar, which, in turn, acts as a headwind for the AUD/USD pair. The upbeat US macro data released on Thursday, along with fresh hawkish rhetoric from Fed officials, is seen pushing the US Treasury bond yields higher and underpinning the greenback. The markets, however, continue to price in a greater chance of a smaller 25 bps Fed rate hike in February. This should keep a lid on any meaningful upside for the US bond yields and the USD. Apart from this, a generally positive tone around the Asian equity markets could benefit the risk-sensitive Aussie and help limit the downside for the AUD/USD pair. Investors turn optimistic over a recovery in the world's second-largest economy after China kept its key lending rates at historic lows for a fifth straight month. The move indicates that the government plans to keep liquidity conditions loose in order to spur an economic recovery. This might hold back traders from placing bearish bets around the AUD/USD pair. Hence, it will be prudent to wait for strong follow-through selling before positioning for an extension of this week's sharp retracement slide from the highest level since mid-August. Market participants now look to the US Existing Homes Sales data, which, along with speeches by influential FOMC members, will drive the USD and provide some impetus to the AUD/USD pair
Mexico’s Central Bank Surprised Markets With A 50bps Rate Hike Once Again

Mexican Peso (MXN) Investors Are Likely To Keep An Eye On The Banco de México Decision

TeleTrade Comments TeleTrade Comments 20.01.2023 08:55
USD/MXN is oscillating in a narrow range below the critical resistance of 19.00. The market mood is quite confusing as the S&P500 futures and US Treasury yields are showing a recovery. The Fed might announce two more 25 bps interest rate hikes before pausing the policy tightening program. The USD/MXN pair is showing a balanced auction below the round-level resistance of 19.00 in the early European session. The asset is expected to surpass the immediate resistance as Federal Reserve (Fed) policymakers are continuously passing hawkish commentaries for the terminal rate and sustenance of higher interest rates to tame the stubborn inflation. Market mood is quite confusing as the S&P500 futures are showing a recovery move after a three-day losing spell and also the 10-year US Treasury yields have extended their recovery above 3.41%. The US Dollar Index (DXY) has climbed to near 101.80 after a rebound to near 101.60. Thanks to the hawkish commentary from Fed policymakers, which are acting as a cushion for the US Dollar. New York Fed Bank President John Williams cited that “With inflation still high and indications of continued supply-demand imbalances, it is clear that monetary policy still has more work to do to bring inflation down to our 2% goal on a sustained basis”, as reported by Reuters. Although signs of inflation softening are present, more policy tightening is still needed to contain roaring inflation. Meanwhile, Reuters claims that Fed chair Jerome Powell will pause the policy tightening program for the rest of CY2023 after hiking interest rates by 25 basis points (bps) in the next two monetary policy meetings. Meanwhile, Mexican Peso investors are likely to keep an eye on the interest rate decision by the Banco de México, which is scheduled in February. Analysts at Rabobank, expect the terminal rate at 10.75% after a final 25 basis points (bps) hike in February.
The USD/JPY Price Reversed From The Lower Limit

The USD/JPY Pair's Growth Remains Limited

TeleTrade Comments TeleTrade Comments 20.01.2023 08:57
USD/JPY gains positive traction on Friday and draws support from a combination of factors. A further recovery in the US bond yields helps revive the USD demand and acts as a tailwind. A positive risk tone undermines the safe-haven JPY and provides an additional lift to the pair. The USD/JPY pair attracts some buyers on the last day of the week and steadily climbs back above the 129.00 mark during the Asian session. Spot prices, however, remain confined in a familiar range held since the beginning of this week, warranting caution for bullish traders before positioning for any further intraday positive move. The US Dollar draws some support from a further recovery in the US Treasury bond yields and turns out to be a key factor acting as a tailwind for the USD/JPY pair. In fact, the yield on the benchmark 10-year US government bond move away from its lowest level since mid-September touched on Thursday amid uncertainty over the Fed's rate-hike path. In fact, the markets have been pricing in a greater chance of a smaller 25 bps Fed rate hike move in February. That said, the upbeat US macro data released on Thursday, along with the recent hawkish rhetoric from several Fed officials, suggest that borrowing costs are likely to remain elevated for longer, which, in turn, favours the USD bulls. Apart from this, a generally positive tone around the equity markets undermines the safe-haven Japanese Yen and lends support to the USD/JPY pair. Investors turn optimism over a recovery in the world's second-largest economy after the People’s Bank of China (PBoC) kept its benchmark loan prime rate at historic lows for a fifth straight month on Friday. The upside for the USD/JPY pair, meanwhile, remains capped, at least for the time being, amid fresh speculation that high inflation may invite a more hawkish stance from the Bank of Japan (BoJ) later this year. It is worth recalling that the BoJ earlier this week decided to leave its monetary policy settings unchanged, defying expectations for more hawkish signals. Nevertheless, the fundamental backdrop supports prospects for some meaningful upside for the USD/JPY pair, though the lack of a strong follow-through buying warrants caution. Market participants now look to the US Existing Homes Sales data, which, along with speeches by influential FOMC members, will drive the USD and provide some impetus to the USD/JPY pair.
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The Short-Term Trend Of The GBP/JPY Corss Is Bullish Now

TeleTrade Comments TeleTrade Comments 20.01.2023 09:11
GBP/JPY is approaching 160.00 as investors are still confused about forward Bank of Japan’s policy stance. Bank of England might discover a meaningful downtrend in inflation from the late spring amid tight monetary policy. Bank of Japan could look for an exit from the expansionary policy as inflation is stably rising. GBP/JPY might display a power-pack action after the release of the United Kingdom Retail Sales data. GBP/JPY has extended its recovery move above the critical resistance of 159.00 in the early European session. The cross is marching towards the round-level resistance of 160.00 ahead of the United Kingdom Retail Sales data. On Thursday, the asset rebounded from 157.70 after the Bank of Japan (BOJ) maintained the status quo by keeping the interest rates and yields target unchanged. Bank of Japan (BoJ) Governor Haruhiko Kuroda kept the interest rate at -0.10% and the 10-year Japanese Government Bonds (JGBs) around 0% steady, commented that there is “no need to further expand the bond target band.” He further added that Japan’s economy is still on the path towards recovery from the pandemic and the BoJ is aiming to achieve a 2% inflation target sustainably, stably in tandem with wage growth. BOE’s Bailey sees a sheer declining inflation trend in the late Spring Policymakers at the Bank of England (BOE) have put severe efforts for decelerating the pace of the Consumer Price Index (CPI) by accelerated interest rates. December’s CPI report has shown a consecutive decline in the inflation trend for the first time since the Covid-19 pandemic period, led by declining energy prices. The United Kingdom has been one of the laggards in slowing down the pace of inflation. On Thursday, Bank of England Governor Andrew Bailey cited “He expects that inflation will fall quite rapidly this year, probably starting in the late spring. While commenting on the terminal rate, the Bank of England Governor sees the interest rate peak near the market expectations at 4.5%. The Bank of England Governor is seeing a shallow recession than the historic ones. Earlier, Bank of England policymakers cited rising wages as responsible for escalating inflation. Bargaining power has been shifted in the favor of job-seekers due to a shortage of labor. Investors await United Kingdom Retail Sales for fresh cues For further guidance, investors will keep an eye on the United Kingdom Retail Sales data, which is scheduled for Friday. As per the projections, the annual Retail Sales (Dec) data could contract by 4.1% vs. a contraction of 5.9% reported in the prior same period. However, the monthly economic data is expected to expand by 0.5% against the contraction of 0.4%. A recovery in the retail demand on a monthly basis could be the outcome of rising employment bills due to employees’ bargaining power, which is leaving more funds in the palms of households for disposal. A better-than-projected retail demand could spurt the forward inflation expectations, which could accelerate hawkish Bank of England bets. Mixed Japan’s inflation fails to provide any boost to the Japanese Yen Bank of Japan’s unchanged monetary policy-inspired gains in GBP/JPY faded later as investors still believe that the central bank will look for an exit from its decade-long ultra-loose monetary policy. A rising trend in inflation and the administration’s effort to increase wages could end the expansionary monetary policy ahead. However, the release of the National CPI indicates that investors should wait further before reaching to a conclusion. Japan’s National headline CPI has landed at 4.0%, lower than the consensus of 4.4% but higher than the former release of 3.8%. While the core inflation that excludes oil and food prices has soared to 3.0% higher than the expectations of 2.9% and the prior release of 2.8%. National CPI that excludes fresh food has remained in line with the estimates at 4.0%. GBP/JPY technical outlook The recovery move from GBP/JPY around the upward-sloping trendline of the Ascending Triangle chart pattern plotted from January 13 low at 155.65 has pushed it above the 20-period Exponential Moving Average (EMA) at 159.22. There is no denying the fact that the short-term trend is bullish now.  The horizontal resistance of the volatility contraction chart pattern is placed from January 9 high at 160.92. Meanwhile, the Relative Strength Index (RSI) (14) has scaled above 60.00, which indicates that the upside momentum is active now. Broadly, the cross might find barricades after reaching the horizontal resistance mentioned above.
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The Latest Tension Surrounding Taiwan Seems To Probe The NZD/USD Bulls

TeleTrade Comments TeleTrade Comments 20.01.2023 09:12
NZD/USD clings to mild gains during two-week uptrend. Cautious optimism in the market joins sluggish US Treasury yields, USD to favor buyers. Hawkish Fedspeak, recession fears probe upside momentum amid light calendar. NZD/USD remains mildly bid around 0.6415 as the Kiwi bulls cheer the upbeat sentiment amid sluggish hours of early Friday’s trading. In doing so, the quote reverses the previous day’s losses while bracing for the second consecutive weekly gain. The risk-on mood could be linked to the hopes of more stimulus from China, mainly after the People’s Bank of China’s (PBOC) fifth monthly inaction. On the same line could be the challenges for the Federal Reserve’s (Fed) rate hike trajectory emanating from the downbeat US data. On Thursday, the US Unemployment Claims dropped to the lowest levels since late April 2022 and the Philadelphia Fed Manufacturing Survey Index also improved However, US Building and Housing Starts joined the previously release downbeat US Retail Sales and Producer Price Index (PPI) to propel fears of a recession in the world’s largest economy, earlier backed by the softer wage growth and activity data from the US. It should be observed that New Zealand’s Business NZ PMI for December and Visitor Arrivals for November both eased in their latest readings and challenge the Kiwi pair buyers of late. Alternatively, the US Dollar Index (DXY) picks up bids to 102.15 as it consolidates the previous day’s losses, the biggest in over a week, as Fed policymakers favor higher rates during their last public appearances before the 15-day silence period ahead of the February Federal Open Market Committee (FOMC) meeting. It’s worth noting that the latest tension surrounding Taiwan also seems to probe the NZD/USD bulls. Amid these plays, the key US Treasury bond yields struggle to extend the previous day’s rebound from the multiday low while the S&P 500 Futures print mild gains. That said, stocks in the Asia-Pacific region trade mixed at the latest. Moving on, a lack of major data/events, as well as hawkish Fedspeak, could challenge the NZD/USD pair’s upside ahead of the key week comprising multiple activities, inflation and growth numbers for the key economies. Technical analysis The 100-bar Exponential Moving Average (EMA) joins the 50-EMA and the weekly support-turned-resistance to challenge the NZD/USD bulls around 0.6415. However, the previous day’s low of 0.6365 restricts the immediate downside of the quote, a break of which will highlight the 61.8% Fibonacci retracement level of the NZD/USD pair’s January 06-18 upside, near 0.6315.      
CNY Can Appreciate Mildly Through This Year According To Economists At Commerzbank

CNY Can Appreciate Mildly Through This Year According To Economists At Commerzbank

TeleTrade Comments TeleTrade Comments 20.01.2023 09:16
Economists at Commerzbank forecast CNY to appreciate mildly through this year due to the earlier-than-expected Covid reopening and the expectation of more market-friendly economic policies. Yuan gains appeal “The Covid policy U-turn has actually improved the growth outlook for this year. Once the infection waves are over, economic activity could return to normal in the second quarter or even as early as March.” “A shift in the government’s economic policy is contributing to a better outlook for this and next year. The government is keen to restore confidence.” “The PBoC will optimize expectation management to maintain CNY exchange rates at a ‘reasonable equilibrium level’.” “Due to the earlier-than-previously-expected Covid reopening and an expected peak in the Dollar strength, we now forecast CNY will continue to appreciate mildly through this year.”
Rates Spark: Central banks vs economic data

The ECB Will Stay The Course With Rate Hikes, Netflix Reported Q4 2022 EPS Below Market Expectations

Saxo Bank Saxo Bank 20.01.2023 09:28
Summary:  The US equity markets ended lower again on Thursday as strong US jobless claims data underpinned, despite Fed speakers largely supporting the case of a downshift in February. Meanwhile, ECB speakers surprised hawkish, supporting EURUSD, and the post-BOJ strength in Japanese yen also sustained. Mixed earnings results with P&G down but Netflix rising despite missing EPS estimates as subscriber numbers grew. Gold returned to gains after three days of pullback, and crude oil prices also edged higher on China optimism.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) slid on concerns about earnings Nasdaq 100 moved down by 1% and S&P500 slid 0.8% in a relatively quiet day. Energy and communication services bucked the decline and managed to each gain around 1%. Microsoft added to its previous day’s decline, falling 1.7% on Thursday. Consumer product giant, Procter & Gamble (PG:xnys) dropped 2.7% on a small earnings miss but disappointing organic sales growth due to a weaker-than-expected volume trend. Netflix (NFLX:xnas) jumped 6.9% in the extended hours after reporting a 7.7 million subscriber increase in Q4. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) consolidated on hawkish ECB comments and a strong Philly Fed survey Treasuries erased their gains in Asian hours as yields followed German bunds higher in London hours on pushbacks from ECB’s Lagarde and Knot to speculation on a downshift of ECB rate hikes from 50bps to 25bps. Yields, especially in the short-end of the curve, climbed further following a smaller-than-expected 190K rise in initial jobless claims and an increase of the Philly Fed Business Outlook Index by 4.8 points to -8.9, better than the consensus estimate of -11.0. The 6-month ahead conditions sub-index improved nearly 6 points to 4.9. The Fed’s Vice Chair Brainard said she was supportive of slowing the rate hike to 25bps at the February FOMC while reiterated “the need for further rate increases, likely to just above 5 percent”. According to Nick Timiraos at the Wall Street Journal, Brainard raised the possibility that the Fed might not need to see as much evidence of a slowdown in labor markets to be confident of inflation improving. The USD17 billion TIPS auction went very strong with bid-to-cover at 2.79, well above the average of 2.25. As the federal government reached its debt limit, Treasury Secretary Yellen wrote a letter to Congress about measures that the Treasury Department is taking to keep meeting obligations until at least early June to allow time for Congress to work on raising the debt limit. Yields on the 2-year rose 4bps to 4.13% and those on the 10-year climbed 2bps to 3.39%, bringing the 2-10-year curve 2bps more inverted at -74. Hong Kong’s Hang Seng (HIF3) unchanged; China’s CSI300 (03188:xhkg) higher Hang Seng Index opened lower on Thursday but managed to pare losses and finished the day nearly unchanged. Techtronic (00669:xhkg), falling 5.4% on analyst downgrades, was the biggest loser with the Hang Seng Index. Chinese developer stocks and consumer names outperformed while China internet stocks, except Tencent, dragged. Country Garden (02007:xhkg) gained 4.9% and Longfor (00960:xhkg) climbed 3.5%. Leading sportswear name, Li Ning (02331:xhkg) rose 3.9%. BYD (01211:xhkg) rose 2.3% while other EV markers edged down. The speculation that a new “Strong Nation Transportation” ride-hailing app is backed by the government to compete with the incumbent platform companies, though later clarified being not the case, weighed on internet stocks, seeing Meituan (03690:xhkg) down 2.1% and Alibaba (09988:xhkg) down 1.7%. Chinese social platform, Kuashou (01024:xhkg) plunged nearly 6% after a co-founder sold shares. The Hang Seng TECH Index slid 1.7%. Overseas buying into A-shares through Stock Connect continued for 12 days in a row with a net buying of RMB9 billion on Thursday, bringing the net buying in January so far to over RMB100 billion. On Thursday, semiconductors, computing, ride-hailing, electronics, pharmaceuticals, brokerage, and defence stocks outperformed. CSI100 gained 0.6%. FX: Dollar slightly lower as Yen and Euro continue to gain The USD was slightly lower on Thursday as the ECB hawkishness continued to outpace that of the Fed and the post-BOJ recovery in the Japanese yen continued. USDJPY traded at sub-129 levels after a trip higher to 131.50 on the BOJ-day. EURUSD has returned above 1.0800 amid ECB member Knot and President Lagarde staying hawkish (read below). NZD and AUD were the underperformers. NZDUSD slid below 0.6400 before a slight recovery as news of NZ PM Ardern’s resignation weighed. AUDNZD’s drop below 1.0800 was also reversed. Crude oil (CLG3 & LCOH3) rebounds Crude oil prices gained as China optimism continued to reign. Reports that China’s covid caseload has peaked further boosted optimism that demand will start to recover more sustainably. Markets shrugged off rising inventories in the US. Commercial stockpiles rose 8,408kbbls last week, according to EIA data. Global demand expectations also got a boost as US jobless claims data supported the view that the labor market is still tight. WTI futures touched $81/barrel again after a drop towards $78 while Brent was back above $86. Gold (XAUUSD) climbed higher after three days of decline Gold continues to show resilience and found fresh bids on Thursday after three days of pullback. Support at $1900 continued to hold, and the yellow metal rose back above $1930 as US yields remained near new cycle lows despite some gains last night. However, demand from ETFs is yet to pick up with expectations that inflation will eventually come back to Fed’s target levels. Some correction may also be seen as Gold’s demand eases after China’s Lunar New Year festival, but the long-term view holds that 2023 will be friendlier towards investment metals, as last year’s headwinds – most notably dollar and yield strength – begin to reverse. For investors, what’s the big picture in markets right now with bond yields down 94bps and gold up nearly 20%? Despite bond yields rising on Thursday, to 3.4% the US 10-year Treasury yield broke below key support two days ago. As our head of technical analysis points out the closely watch yield could drop to 3.22%. As you may recall, our view at Saxo has been that peak hawkishness came in Q4 2022, which supports the retreat in bond yields since November last year. Bond yields are now down 94 basis points from their October peak. At the same time, the gold price rose 19% during the same period, given it typically tends to have an inverse relationship to bond yields, in particular real yields. If we see the Fed pauses later in the year, as Ole points out on yesterday’s podcast, the gold price could rally further in 2023.  Read next: Elon Musk Is Facing Trial In Fraud Trial Over 2018 Tweets| FXMAG.COM What to consider? More Fed members, including Brainard, hinting at a 25bps rate hike Lael Brainard (voter) said the recent downshift in the pace of rate hikes allows the Fed to assess more data as it moves policy to a "sufficiently restrictive" level, noting we are now in "restrictive" territory and are probing for a sufficiently restrictive level. She didn’t clearly confirm a 25bps rate hike for February, but hinted at that saying Fed downshifted the rate hike pace in December to absorb more data, and that logic is applicable today. Another voter Williams is speaking in the Asian morning hours, and signalling that the Fed has more work to do but labor demand far exceeds supply. Non-voter Collins reaffirmed her view that rates need to rise to likely just above 5%, and then the Fed needs to hold rates there for some time, also saying that it is appropriate to slow the pace of hikes particularly with risks now more two-sided. US initial jobless claims a good reminder that labor market is still tight While the focus somewhat shifted towards growth concerns yesterday after the disappointment from US retail sales and industrial production data. US jobless claims unexpectedly fell last week by 15k to 190k vs. expected 214k. Pre-covid monthly average was 345k per week while the 5Yr trend was 245k. So the data is still strong and a good reminder that inflation may continue to stay much higher than expected levels. The Philly Fed regional manufacturing index was also released yesterday, and it wasn’t as bad as the Empire State manufacturing survey stressing our view that survey results can be volatile. That index came in at -8.9 which was better than the -11.0 expected and marginally better than the -13.9 last month. Hawkish ECB speakers pushback against reports of slowing rate hikes ECB's Knot said that market developments of late are not entirely welcome and that the ECB won't stop after a single 50bps hike, planning to hike by 50bps multiple times. Despite a softer CPI print lately, Knot said that there are no signs of underlying inflation pressures abating, and said that the ECB will be in "tightening mode" until at least mid-year. ECB President Lagarde was also on the wires, saying economic news has become much more positive as the contraction in Eurozone 2023 GDP may be smaller than previously expected, so the ECB will stay the course with rate hikes. It's the demography, stupid! Earlier this week, we have learnt that China reached its demographic peak with 10-year ahead of projections. This will serve a as wake-up call for other countries, certainly. The world population growth is now below 1 % for the first time since the first half of the 20th century. About 61 countries in the world are expected to see their population decrease by at least 1% by 2050 (the population of Japan has been decreasing since 2010 while that of Italy since 2014, for instance). Expect massive consequences for the labor market. In Germany, about 500,000 people will leave the labor market each year between 2025 and 2035. This is massive! We are entering into a world of human capital shortage. Japan’s December CPI touches 4%, eyes on BOJ nominations due in February Japan’s December CPI came in at 4.0% YoY from 3.8% YoY previously, with core CPI also at 4.0% YoY while the core-core measure was a notch softer-then-expectations but still above the 2% target, coming in at 3.0% YoY. Despite the Bank of Japan’s pushback on expectations to tweak policy this week, speculations are likely to continue as inflation breadth is spreading. A contender to succeed Bank of Japan Governor Kuroda, Takatoshi Ito, said that the BOJ's next step may be to widen 10y band, could raise it to 0.75% or 1.00% by mid-year, likely won't tweak yield curve control at least until April, and may abandon negative rates this year depending on inflation and wage developments. Procter & Gamble disappointed on weaker organic growth and volume trend Procter & Gamble, the consumer product giant, reported FYQ2 2023 EPS of USD1.59, slightly below the USD1.60 street estimate. The bigger disappointment came from weaker organic growth as a result of a softer than expected volume trend. The management raise sales outlook for FY23 sales outlook but had its FY23 EPS outlook at the low end of its initial range. Netflix reported a gain of 7.7 million subscribers in Q4 Netflix reported Q4 2022 EPS at USD0.12 below market expectations. However, share prices jumped on a better-than-expected gain of 7.7 million subscribers in Q4. Guidance for Q1 2023 revenue at USD8.17 billion was stronger than market expectations.     For a look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Market Insights Today: US jobs data confirms labor market strength; ECB’s surprise hawkishness – 20 January 2023 | Saxo Group (home.saxo)
Navigating Interconnectedness: Analyzing Banks' Exposures and Funding from Non-Bank Financial Institutions

Forex: The Czech Koruna (CZK) And Hungarian Forint (HUF) Touched New Lows Against The Euro (EUR)

ING Economics ING Economics 20.01.2023 09:50
Dollar losses have abated amid deteriorating risk sentiment, but the ongoing dovish repricing of Fed rate expectations and hawkish rhetoric by the ECB point to upside risks for EUR/USD in the near term. Elsewhere, Hungary's sovereign rating should remain unchanged. Worsening sentiment will be the reason if we see a correction of recent gains in CEE USD: Taking a breather G10 volatility has started to wane amid fewer market-moving data releases in the second half of this week and as Asian markets approach the long Chinese New Year holiday. The dollar is stabilising, as the underperformance of stocks seems to be offsetting the recent negative turn in US data. Yesterday, a surprise drop in jobless claims confirmed that signs of weakness in the US economy are still not being found in the jobs market. The tightness of the labour market remains the key factor precluding front-end bonds from another big rally: markets are still pricing in a 4.90% peak Fed rate and 'only' 60bp of cuts in the second half of the year. Our economics team is calling for a larger-than-expected easing package later this year: 100bp from a 5.0% peak. For now, however, markets may feel comfortable with the current dollar levels ahead of next week’s fresh round of data releases in the US. DXY could hold above 102.00 today, with some focus on housing data and two Federal Reserve speakers (Patrick Harker and Christopher Waller). Discussions over the US debt ceiling are set to be an important driver for markets, but we currently see this having a material impact on the FX market only around the late summer. Francesco Pesole EUR: ECB dovish speculation didn't last long The European Central Bank provided a very reasonable amount of pushback against reports earlier this week that suggested 25bp increases were being considered. Christine Lagarde reiterated her recent hawkish rhetoric yesterday and the minutes from the December meeting all but confirmed the growing pressure from the hawks in the governing council. The details of the 'deal' with the more moderate near term were quite clear: a conservative 50bp hike in December was acceptable only with a pre-commitment to two 50bp hikes in February and March. Taking the ECB guidance at its word has its risks, but those two hikes look very likely at this point. This is good news for the euro, and as long as US data remains on the soft side, EUR/USD should benefit from a rather supportive rate differential. A test of 1.0900/1.0950 next week looks on the cards, but things may be rather quiet today since the eurozone calendar is quite empty and Christine Lagarde should not surprise with anything new as she speaks again in Davos.  Elsewhere in Europe, Norges Bank held rates unchanged at yesterday’s meeting but announced that it is likely to raise them again in March. That should be the last hike of the cycle according to the NB projections, even though the Bank did not go as far as explicitly saying so yesterday. That may have helped offset the negative impact on the krone, which remains driven by external factors for now. Francesco Pesole GBP: A negative surprise with one piece of optimism UK retail sales for December were released this morning and delivered a pretty strong disappointment. Numbers are down roughly 1% month-on-month and follow another dip in consumer confidence in data released earlier this morning. Because of volatility surrounding the Queen's funeral last year, it looks like fourth quarter GDP will be flat. But ongoing weakness in consumption, and some expected declines elsewhere (construction/manufacturing perhaps), mean first quarter GDP will probably fall by upwards of 0.5pp. One piece of good news - it looks like the government won't need to increase household energy bills from April, or if they do the uplift will likely only last one quarter. That should mean the squeeze on consumers isn't quite as bad as first feared. While the economy is still showing signs that it's headed for recession through 2023, ongoing pressure in wages and core services inflation suggest the Bank of England is on course for one final 50bp rate hike in February, rather than the more modest 25bp move the Fed appears to be heading for. The pound has reacted negatively, down 0.30% after the release. However, we continue to favour GBP versus the dollar but see moderate upside risks in EUR/GBP. Francesco Pesole CEE: No change expected to Hungary's rating Today, we have only labour market data from Poland on the calendar. We expect wage growth to slow at an annual pace but remain above market expectations. At the same time, employment growth should remain solid despite the slowing economy. Later today, Fitch will publish a rating review of Hungary. We expect the rating and outlook to remain unchanged. While we still see downside risk to the outlook, we expect that the current EU story and fiscal policy developments should be sufficient to warrant no change in today's review. In the FX market, the CEE region remains strongly supported with EUR/USD higher and gas prices testing new lows in recent days. The Czech koruna and Hungarian forint, current stars of the region, touched new lows against the euro and the Romanian leu strengthened to its strongest levels in weeks following a record-breaking government bond auction. The Polish zloty, on the other hand, as the only outperformer within the region, continues to slide higher, weighed down by several risks. Today, on the other hand, we could see a slight retracement of gains in the region resulting from yesterday's correction in equity markets and the deterioration in sentiment after the new year rally in Europe. We expect the koruna to return to 24.00 EUR/CZK and the forint back to 396 EUR/HUF. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

Saxo Bank Podcast: Rebounding Yields On Hawkish ECB Talk, US Jobless Claims Report, Results From Procter And Gamble And More

Saxo Bank Saxo Bank 20.01.2023 11:10
Summary:  Today we note that rebounding yields on hawkish ECB talk and another very strong weekly jobless claims report out of the US have the JPY weakening again, but not supporting the US dollar outside of USDJPY. Elsewhere, we look at stronger than expected results from Netflix and weaker than expected results from Procter and Gamble as volumes drop due to price hikes. A look at crude oil dynamics now that the EU is attempting its embargo on Russian crude, gold maintaining remarkable strength and avoiding notable consolidation, the macro calendar for the week ahead and more. Today's pod features Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: US jobless claims, hawkish ECB halt the slide in yields | Saxo Group (home.saxo)
Bestway Might Have Larger Designs On The UK's Second Biggest Supermarket

Weak Consumer Spending And Consumer Confidence Point To Economic Problems In The UK

Kenny Fisher Kenny Fisher 20.01.2023 12:21
The British pound has edged lower on Friday. In the European session, GBP/USD is trading at 1.2360, down 0.27%. Retail sales fall sharply UK retail sales were dismal in December. The headline figure fell -1.0% m/m, missing the forecast of 0.5% and below the November read of -0.5%. The core rate declined by 1.1%, shy of the forecast of 0.4% and below the November reading of -0.3%. On an annualized basis, the numbers were downright ugly – headline retail sales came in at -5.8% and the core rate at -6.1%, which was worse than November and below the estimates. Any hopes for a surge in spending due to Christmas were dashed, as consumers cut back due to the cost-of-living crisis. Inflation has eased a bit but remains in double digits, and consumers are expected to hold tight to the purse strings, as food and energy prices remain high and wages have been eroded by inflation. Consumer confidence remains in deep-freeze, with GfK Consumer Confidence falling to -45 in December, down from -42 in November and shy of the consensus of -40. Weak consumer spending and confidence points to a struggling economy, but the Bank of England has little choice but to continue raising rates in order to curb inflation. This will be a slow process, with the BoE projecting that inflation will fall to 5% late in the year. The Federal Reserve enters a 2-week blackout period after today, ahead of the rate meeting on February 1st. This means that public comments or interviews from Fed officials will be sharply curtailed. This made Fed member Brainard’s comments on Thursday all the more important. Brainard sounded hawkish, saying that rates needed to remain high even with signs that inflation was starting to ease. The Fed dot plot indicates that rates will peak at 5.1%, while the markets have priced a peak at around 4.75%. We’ll hear from Fed members Harker and Waller later today. Read next:A Serious Security Vulnerability In T-Mobile Caused Another Hacker Attack| FXMAG.COM GBP/USD Technical 1.2352 is a weak resistance line, followed by 1.2455 There is support at 1.2255 and 1.2179 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Speculation That The Bank Of Canada Could Wind Up Its Tightening At The First Meeting Of 2023

Kenny Fisher Kenny Fisher 20.01.2023 12:23
The Canadian dollar is unchanged on Friday, trading at 1.3466 in the European session. We could see some volatility in the North American session, as Canada releases retail sales. Retail sales expected to decline The markets are bracing for a downturn in retail sales for November, with a forecast of -0.5% m/m for the headline figure and -0.4% for the core rate. This follows a strong report in October, as the headline reading was 1.4% and core retail sales at 1.7%. If the releases are as expected or lower, it could be a rough day for the Canadian dollar. Today’s retail sales release is the final major event prior to the Bank of Canada’s meeting on January 25th. The markets have priced in a 25-bp increase, but a hold is also a possibility, especially with December inflation falling to 6.3%, down from 6.8%. The BoC has raised rates by some 400 basis points in the current rate-tightening cycle, which began in March 2022. Similar to the market outlook on the Fed’s rate policy, there is significant speculation that the BoC could wind up its tightening at the first meeting of 2023 and then keep rates on hold. The BoC has said that future hikes will be determined by economic data, and there are signs of strength in the economy despite the Bank’s aggressive rate policy. GDP expanded by 2.9% in Q3 which was stronger than expected and job growth sparkled in December, with over 100,000 new jobs. The markets will be looking for clues about future rate policy from the rate statement and BoC Governor Macklem post-meeting comments. Read next: $1 Million In Sanctions Against Former President Donald Trump, Netflix Co-Founder Reed Hastings Has Stepped Down As CEO| FXMAG.COM USD/CAD Technical 1.3455 is a weak support line, followed by 1.3328 1.3582 and 1.3707 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
ECB press conference brings more fog than clarity

The Necessity Of Raising The Rate By Half A Point In The Near Future Still Hold

Jakub Novak Jakub Novak 20.01.2023 12:45
After Christine Lagarde, president of the European Central Bank, warned yesterday that inflation in the eurozone is still too high and is the biggest problem, the euro increased somewhat. She also pledged that lawmakers will not back down from their attempts to get price growth back to normal levels. Lagarde stated on Thursday in Davos that "Inflation by any measure, no matter from which side you look at it, is too high. We'll continue raising rates and then shift to a trajectory that restricts spending for a sufficient amount of time to quickly bring inflation back to 2%." Core inflation is far from ideal Some eurozone politicians have previously suggested that it is already reasonable to discuss the viability of a less aggressive rate hike after price growth slows and the price of natural gas declines, but only after another step of 0.5 percentage points is predicted in February. Some, on the other hand, argue that core inflation is far from ideal and point out that it set a new record high in December. Christine Lagarde and those who want to keep moving forward with rate increases will benefit from this.  Francois Villeroy de Galhau and Klaas Knot Lagarde's words from last month regarding the necessity of raising the rate by half a point in the near future still hold today, according to members of the Governing Council Francois Villeroy de Galhau and Klaas Knot, who recently confirmed them in Davos. At least one additional rate rise of 50 basis points is anticipated at the following meeting based on the new data that is now available. However, if the rate of inflation increase does not aggressively go down, the regulator will likely continue to pursue a strong stance until the spring of this year. A report from the European Central Bank's monetary policy meeting A report from the European Central Bank's monetary policy meeting claims that several officials first predicted a rate increase of 75 basis points in December but afterward revised their prediction downward by 0.5%. The risks of underlying pricing pressure are discussed in the paper, along with worries about inflation being entrenched in the eurozone countries for a longer period. Lagarde's words Lagarde added that a little recession is now more probable than the start of one. "Over the past three weeks, the news has changed dramatically for the better. Despite not being a great year, it will be substantially better than we anticipated," said Lagarde.  EUR/USD  Given that the bullish trend has not yet been broken, the technical picture of EUR/USD indicates that demand for the euro could resume at any time. There is also a prospect for more expansion and setting new records for the year. Staying above 1.0820 will cause the trading instrument to surge to the 1.0870 region, which is what is needed to achieve this. You may reach 1.0930 with ease by climbing over this point. If the trading instrument falls, only a breakdown of support at 1.0820 will put more pressure on the pair and potentially cause it to fall as low as 1.0720. GBP/USD Regarding the technical picture of the GBP/USD, it failed to update the weekly maximum, severely limiting the pair's future upward potential. Buyers must continue to trade over 1.2330 to keep their advantage. The only thing that will increase the likelihood of a further recovery to the 1.2500 region, after which it will be feasible to discuss a more abrupt move of the pound up to the 1.2550 area, is the loss of resistance at 1.2430. After the bears seize control of 1.2330, it is feasible to discuss the pressure on the trading instrument. The GBP/USD will be forced back to 1.2250 and 1.2190 as a result, hitting the bulls' positions Relevance up to 09:00 2023-01-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332859
Analysis Of The EUR/JPY Pair Movement

The USD/JPY Pair Is Trading Close To 130.00, The EUR/USD Pair Is Still Above 1.08

Kamila Szypuła Kamila Szypuła 20.01.2023 13:24
The dollar traded around seven-month lows on Friday as a plethora of data worries investors that an economic slowdown may be inevitable. Today's day in the economic calendar is quite calm, apart from the events from the economic forum in Davos and statements of the Fed (Waller, Harker). Next week, however, we'll get our first look at the US GDP figures, which are crucial to the outcome of the "soft landing" the Fed hoped for as it continued to tighten financial conditions to bring down inflation. Markets expected a smaller tightening from the Fed after US retail sales revealed their lowest level of activity in the last 12 months. USD/JPY The Japanese yen fell today despite the December CPI data. Further selling pressure around the Japanese yen lifts USD/JPY Pair to fresh daily highs. On the daily chart, USD/JPY is in an uptrend and is approaching 130.00. The 10-year Japanese government bond (JGB) yield fell below 0.40% today, well below the Bank of Japan's 0.50% ceiling that remained unchanged at its meeting earlier this week. GBP/USD The pound fell on Friday after weak retail sales data reminded investors about the gloomy outlook for the British economy. The cable pair started the day close to 1.24, but reports caused a weakening and a change of direction. The pair is currently trading below 1.2360. UK CPI data showed yesterday that there was an increase in inflation in services and an acceleration in food/beverage prices, which will be a cause for concern for decision makers at the Bank of England. The poor economic outlook in the UK fuels speculation that the BoE may be less hawkish on policy than previously expected. Retail volumes are down 1% since November, pointing to a challenging environment for consumers as the cost of living continues to be reduced. EUR/USD EUR/USD holds slight gains while trading above 1.0800 in European trading. The US dollar is trying to rebound alongside US Treasury yields, despite an improved risk profile. Looking ahead, EUR/USD traders should pay attention to ECB President Lagarde's speech and recent speeches from Fed policy makers. ECB's Lagarde reiterates that the central bank will continue to raise rates. The recent gains of the major currency pair can be linked to the broad weakness of the US dollar, as well as the optimism surrounding the old continent, namely the Eurozone. Today, the major currency pair EUR/USD traded mostly in the range of 1.0830-1.0847. Currently, the EUR/USD pair is below this range at 1.0820. Read next: $1 Million In Sanctions Against Former President Donald Trump, Netflix Co-Founder Reed Hastings Has Stepped Down As CEO| FXMAG.COM AUD/USD AUD/USD is down sharply for the second day in a row, and the risk of continued decline has increased with the pair below 0.6930. The sentiment-linked Australian dollar has underperformed its major counterparts over the past 24 hours. The Australian was weighed down by local data on Thursday, which showed Australian employment unexpectedly fell in December, spurring a bond rally as markets priced in a lower interest rate peak from the Reserve Bank of Australia. The focus is now on the quarterly inflation report next Wednesday. Economists expect consumer prices to increase by 7.5% in the fourth quarter of last year compared to last year. Source: investing.com, finance.yahoo.com, dailyfx.com
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

The EUR/USD Currency Pair Failed To Initiate A Correction

Paolo Greco Paolo Greco 20.01.2023 13:31
EUR/USD 5M analysis. On the fourth trading day of the week, the EUR/USD currency pair failed to initiate a correction once more. Since there has been a total flat in the region of 1.0780 to 1.0868 for the past five days, the quotes have been mostly drifting sideways all day. On Thursday, there were no significant publications or events, so traders were unable to find any justification for engaging in active trading. Christine Lagarde spoke at the World Economic Forum in Davos and reaffirmed the ECB's willingness to keep hiking the key rate, but the market was already fully aware of this information before her remarks. Furthermore, we think that the euro's recent gains, possibly even months' worth of growth, are directly related to the prospect of future ECB rate hikes and the impending rejection of the Fed's rate hike. As a result, we think Lagarde hasn't provided the market with any new information. Several trade signals emerged yesterday, however, they were all centered around the price range of 1.0806 to 1.0802. The pricing was never able to determine the closest goal level because there was essentially no movement. All of the signals were therefore erroneous. Only the first two of them could be figured out by traders. The pair were fastened below the designated area first, and then above. The purchase transaction was completed at a stop loss at breakeven in the second example since it could move 15 points in the right direction in the first. Consequently, traders suffered a slight loss. However, false signals are often formed in the flat, so nothing terrible happened. COT Report The recent COT reports on the euro currency are entirely consistent with market activity. The aforementioned image makes it very evident that, from the start of September, the net position of significant players (the second indicator) has been improving. At about the same time, the value of the euro started to increase. Although the net position of non-commercial traders is currently "bullish" and growing virtually weekly, it is the relatively high value of the "net position" that now permits the upward trend's impending end. This is indicated by the first indicator, which frequently occurs before the end of a trend and on which the red and green lines are quite far apart. The number of buy contracts from the "non-commercial" group increased by 16,000 during the reporting week, while the number of short positions decreased by 11,000. The net position consequently increased by 5,000 contracts. For non-commercial traders, there are currently 135 thousand more buy contracts than sell contracts. What remains to be seen is how much longer the major players will boost their long positions. Moreover, a downward correction should have started long ago from a technical perspective. We think this process can't go on for another two or three months. You need to "discharge" a bit, or alter, even based on the net position indicator. Sales are 48 thousand more if you look at the overall indicators of open longs and shorts for all trading categories (702 vs. 655k). EUR/USD 1H analysis. The pair has been trending sideways for a week on the hourly timescale, albeit maintaining an upward mood. The euro currency is currently moving in the manner of bitcoin, which has been quite fond of sliding down during the past year, then going flat for a few weeks or months. However, the downward correction has not yet started. We corrected the Ichimoku indicator's last digestible value and did not transfer the weak Ichimoku indicator lines to the flat's end. We reserve the following levels for trade on Friday: the Senkou Span B (1.0679) and Kijun-sen (1.0802) lines, as well as the range of prices between 1.0658 and 1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, and 1.1137. The Ichimoku indicator's lines might move during the day, therefore, this should be considered when choosing trade signals. Additional support and resistance levels exist as well, but no signals are created close to them. Levels, extremes, and lines can be "bounced" and "overcome" by signals. Remember to place a break-even stop-loss order if the price moves up or down by 15 points. If the signal turns out to be bogus, this will shield against potential losses. Christine Lagarde will give another speech in the European Union on January 20, but the market indicated yesterday that it was not very interested in what she had to say. Furthermore, Lagarde herself didn't offer anything essentially novel. In the United States, nothing noteworthy will happen today. Explanations for the illustrations: Price levels of support and resistance (resistance/support) are thick red lines, near which the movement may end. They are not sources of trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, transferred to the hourly timeframe from the 4-hour one. Are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They are sources of trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "Non-commercial" group Relevance up to 11:00 2023-01-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332877
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Eurozone Economy Is Holding Up Fairly Well Despite The Ukraine War

Kenny Fisher Kenny Fisher 20.01.2023 14:36
The euro continues to have a very quiet week, as EUR/USD appears content to trade around the 1.08 line. Lagarde brings her message to Davos It’s difficult to think of ECB President Lagarde as a hawk, as she ignored rising inflation in the eurozone for a long period, insisting that it was transitory. The ECB was late to the global tightening party and found itself scrambling to curb inflation. The new Lagarde has become more hawkish and hasn’t shied away from making strong statements, such as warning the markets not to underestimate the ECB’s rate policy. Lagarde has brought her hawkish message to Davos this week, saying that inflation remains “way too high” and that the ECB would stay the course until inflation returns to 2%. With inflation currently at 9.2%, that promises to be a slow process. The ECB is widely expected to raise rates by 50 basis points in February, but what happens after that isn’t clear. The eurozone economy is holding up fairly well despite the Ukraine war and the feared energy crisis appears to have been averted, thanks to a warm winter and diversification efforts. The question going forward is whether the ECB will respond to the positive economic environment with a smaller hike of 25 bp or will it keep the pedal on 50-bp increases in order to ensure that inflation does not become entrenched. Lagarde said in December that the Bank would determine future rate moves based on data and that it was very possible that more 50-bp increases were coming after February. ECB members are divided on the issue, leaving the markets uncertain about what will happen at the March meeting. The Federal Reserve begins a two-week blackout period after today, ahead of the rate meeting on February 1st. This means that public comments or interviews from Fed officials will be sharply limited. Fed member Brainard spoke on Thursday and echoed the Fed’s hawkish stance. Brainard said that rates needed to remain high even with signs that inflation was starting to ease. The Fed dot plot indicates that rates will peak at 5.1%, while the markets have priced a peak at around 4.75%. We’ll hear from Fed members Harker and Waller later today.   EUR/USD Technical 1.0780 is a weak support line. Below, there is support at 1.0691 1.0921 and 1.1010 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Analysis And Trips For Trading The GBP/USD Pair In Short And Long Positions

It Was A Good Week For The Cable Pair, GBP/USD Pair Achieved 1.24$. EUR/USD Kept Above 1.08

Kamila Szypuła Kamila Szypuła 21.01.2023 17:52
During the week we heard from a chorus of speakers at the Fed who raised the alarm about an interest rate hike and didn't wait for weaker and disinflationary data, the dollar could have been stronger. In the last trade, st. Louis Federal Reserve Chairman James Bullard spoke for the second time this week and said US interest rates must continue to rise to ensure inflationary pressures subside. USD/JPY The USD/JPY pair started the trading week at 128.07. On Monday, the pair was falling, so the pair recorded its weekly low on that day, below 128.00 at 127.2530. In the following days, the USD/JPY pair rose until it reached a weekly high of 131.45. USD/JPY did not stay above 130.00 and in the following days the pair fell. The pair closed the week at 129.5390. The Bank of Japan met this week remains unchanged. The governor of the Bank of Japan reiterated that the central bank will maintain its very loose monetary policy. The next meeting of the Bank of Japan is scheduled for March 9-10. GBP/USD It was a good week for the cable pair. The pound gained strength which helped the GBP/USD pair to rise. GBP/USD started the week at 1.2226. The weekly minimum at 1.2175 appeared at the beginning of the week on Monday and Tuesday. The cable pair peaked above 1.24 (1.2428), and the GBP/USD pair ended the week above this level (1.2401). UK retail sales figures revealed a monthly decline in both the report's "volume" and "value" metrics. After alcohol fueled the World Cup's economic recovery in November, British consumers decided to tighten their belts in December as the cost of living remained low. In the strike-hit month of December, consumers not only spent less but also bought fewer goods, which had negative readings on both accounts compared to November. Bank of England Governor Andrew Bailey had further comments on inflation and the market's view of where the final rate will be. Bailey reiterates earlier forecasts that inflation will fall significantly in 2023, but still well above the 2% target. Big Sterling impact events are few and far between next week and mostly include manufacturing PMI data. EUR/USD The main currency pair EUR/USD is holding steady in the week despite falls above 1.08. Also above this level it started and ended the trading week. The EUR/USD trading week started at 1.0828 and ended at 1.0858. The pair recorded a weekly low well below the 1.08 level at 1.0774, and the week's high came close to the 1.09 level at 1.0884. The next meeting of the European Central Bank is scheduled for February 2. ECB President Christine Lagarde said on Friday that the ECB will "keep the course" on raising rates as inflation remains too high. AUD/USD The Australian's pair started the week at .6979. Over the next few days, the AUD/USD pair traded above 0.6950 and rose until it reached a weekly high of 0.7059. It then declined until reaching a weekly low of 0.6875. At the end of the trading week, the Aussie Pair rebounded from the low to end the week at 0.6973. Source: investing.com, finance.yahoo.com
The AUD/USD Pair’s Downside Remains Off The Table

The Bullish Outlook For The AUD/USD Pair Will Depend Solely On The US Dollar

InstaForex Analysis InstaForex Analysis 22.01.2023 15:21
The AUD/USD pair has come under heavy pressure this week, following the release of the Australian labor market report. The release unexpectedly came out in the red zone, and the aussie made a new weekly low, sliding to 0.6876. However, we can say by the end of the week the bears couldn't take their successes, on Friday, the aussie regained some of the lost ground and got back to the 69th figure area. I note that the main "test" for the Aussie is yet to come – key data on inflation growth in Australia in the 4th quarter of 2022 will be published next week. If this report disappoints the AUD/USD bulls, then the implementation of bullish ambitions will have to wait: further growth of the pair will be possible only due to the weakening of the greenback. But today, all is not lost for bulls, although the "Australian Nonfarm" has significantly spoiled the fundamental background for aud/usd. Aussie lost an rally It should be noted that the Australian labor market has been a staunch ally of the aussie over the past few months. The unemployment rate gradually decreased during the first half of last year, and since June it has fluctuated in the range of 3.4% -3.5% (for comparison, we can say that the peak was recorded in October 2021 at around 5.2%). The growth rate of the number of employed has recently shown a positive trend (October and November should be especially noted in this context). Given the trends of recent months, no "trick" was expected from the December report: experts predicted a decrease in unemployment and an increase in the number of employed. However, the published release was, to put it mildly, controversial, and it is not at all surprising that the market interpreted it against the aussie. Traders focused their attention on the fact that unemployment remained at 3.5%, while according to forecasts, it should have fallen to 3.4%. The proportion of the economically active population unexpectedly dropped to 66.6% (although an upward trend was observed over the past three months). But most of all, the indicator of the increase in the number of employees was disappointing: the indicator came out at -14,600, despite the fact that experts expected to see a 27,000 increase. However, one point needs to be clarified here. The structure of this component indicates that in December the level of part-time employment significantly decreased (-32.200). While the number of full-time employees increased by 17,600, it is known that full-time positions offer a higher level of wages and a higher level of social security, compared to temporary part-time jobs. And yet, the "overall result" was against the aussie (especially since the 17,000th increase in full employment did not impress investors). Australian Nonfarm put a lot of pressure on AUD/USD. Bulls were forced to retreat from the key resistance level of 0.7000. All is not lost yet As a result of the trading week, bulls still managed to return to the area of the 69th figure. Therefore, the 0.7000 price barrier is still on the horizon. The inflation report, which will be published in Australia next week, can play a decisive role here. According to preliminary forecasts, the consumer price index in the 4th quarter will come out at around 1.8% in quarterly terms (in the 3rd and 2nd quarters, an increase of 1.8% was recorded). While in annual terms, an increasing trend can be recorded - experts predict growth to a record 7.5%. If both components of the release come out in the green zone, the Australian dollar paired with the US currency will again try to gain a foothold in the area of the 70th figure. Let me remind you that the Reserve Bank of Australia slowed down the pace of rate hikes to 25 points last fall - earlier than many central banks of the world's leading countries. Therefore, this issue was removed from the agenda a few months ago. However, in December, there were rumors on the market that the RBA might even pause in tightening monetary policy. And although representatives of the Australian central bank have repeatedly denied such intentions, the relevant rumors do not subside. And if inflation indicators in Australia show a downward trend next week, talk of a "dovish character" will again be on the agenda, especially against the backdrop of weak "Australian Nonfarm". Findings Despite the disappointing data in the labor market, it is still too early to write off the Australian dollar. A strong inflation report may well bring the aussie back to life, especially against the backdrop of a weakening greenback. If Australian inflation disappoints, then the bullish outlook for AUD/USD will depend solely on the US dollar. Given the high degree of uncertainty, before the release of the above-mentioned inflation report (Wednesday, January 25) for the pair, it is advisable to take a wait-and-see attitude.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332913
The EUR/USD Price May Fall Under 1.0660

The ECB Has No Other Options But To Keep Tightening The Monetary Policy

Paolo Greco Paolo Greco 22.01.2023 15:25
Analyzing Friday's trades: EUR/USD on 30M chart On Friday, EUR/USD continued to trade mainly sideways with low volatility. It spent the entire day between 1.0806 and 1.0867. There were no important events in the EU or the US on Friday, only European Central Bank President Christine Lagarde speech at Davos forum. This is Lagarde's second speech this week. The first one was held on Thursday and she didn't reveal any important information that traders have not heard yet. Judging by the fact that the pair has been flat for the entire day, Lagarde said nothing important on Friday. But what can she say now except that rates will keep going up? The ECB has no other options but to keep tightening the monetary policy. The euro has been rising for several months on that factor (as well as on the market expectations of an end to the Federal Reserve rate hike). Thus, the technical picture has not changed at all on Friday. EUR/USD on M5 chart Since the movement was mostly flat, it is not surprising that a lot of signals were formed. At the end of the day I removed 1.0837 from the chart, and beginners could work out only the first two signals near this level. I only marked the first two signals, because all subsequent signals should not be worked out. The price could not pass in the right direction by even 15 points neither in the first, nor in the second case, so both trades closed with a small loss. The next signal worthy of attention was formed near 1.0806 during the US trading session. Due to this signal, beginners were able to win back the morning losses. The price went up about 30 points, and closer to the evening the deal should have been closed manually. Therefore, the total possible profit/loss fluctuated within +-10 points. Not the most successful day, but it is difficult to expect other results from the flat. Trading tips on Monday: The pair maintains the uptrend on the 30-minute chart, despite crossing the trend line. As we can see, neither four bounces from 1.0867, nor crossing 1.0806 can change the market sentiment to bearish yet and could not contribute to the end of the flat. As a result, we have a flat on the highest price values of the last time without any hint of correction. On the 5-minute chart, it is recommended to trade at the levels 1.0657-1.0668, 1.0697, 1.0736, 1.0768, 1.0806, 1.0905, 1.0923-1.0933, 1.0966, 1.0989. Lagarde will speak in the EU and there's nothing in the US. I believe that Lagarde's new speech will be no better than the old ones, so I don't expect a strong reaction. The flat is likely to continue. Basic rules of the trading system: 1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is. 2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored. 3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement. 4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually. 5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels. On the chart: Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now. The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines). Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.   Relevance up to 11:00 2023-01-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332921
For What It Is Worthy To Pay Attention Next Week 23.01-29.01

What It Is Worthy To Pay Attention Next Week 23.01-29.01

InstaForex Analysis InstaForex Analysis 22.01.2023 15:36
High volatility continues to rock the markets. Last week was also influenced by it, especially after new data from the US published an important report. Last Wednesday's report showed a slowdown in inflation in the country, this time in the production of various goods: the PPI fell in December (to -0.5% against the forecast of -0.1% and the previous value of +0.2%, and to 6.2% on an annualized basis against the forecast of 6.8% and the previous value of 7.3%). A week earlier, consumer inflation data had also shown another slowdown, with the annual CPI falling back to 6.5% in December from 7.1% a month earlier and the core CPI dropping to 5.7% from 6% in November. At the same time, data on some of the most important sectors of the U.S. economy show a slowdown, which is a consequence, among other things, of the Federal Reserve's tight policy. In particular, according to the data from last week, the volume of industrial production declined again (to -0.7% in December from -0.6% in November), moreover, the forecasted decline by -0.1%, and capacity utilization rate - to 78.8% from 79.4% a month earlier. Despite the fairly good labor market conditions, the aforementioned and other data put pressure on Fed policymakers to reconsider their tough approach to monetary policy parameters in the direction of easing. Raising rates as macroeconomic indicators deteriorate is an unacceptable mistake, economists say, especially since the Fed's tight monetary policy has already borne fruit - inflation is falling, though still far from the 2% target. Next week will provide new food for thought for market participants regarding the Fed's monetary policy outlook. Particular attention will be paid to Thursday's release of preliminary U.S. GDP data for Q4 2022. Growth is expected to be 2.8% (after a 3.2% increase in Q3 and a decline in the first half of the year). This data will push back the threat of a technical recession (2 consecutive quarters of GDP decline). Market participants will pay attention to the release of important macro data on both the U.S. and other major economies of the world, such as Canada, Australia, Germany, the eurozone economy, British, as well as the results of the Bank of Canada meeting (Wednesday) on the monetary policy. Monday, January 23 Australia. Manufacturing Purchasing Managers Index (PMI) (from Commonwealth Bank of Australia and S&P Global). Services PMI (from Commonwealth Bank of Australia and Markit Economics) (preliminary releases) These reports are an analysis of a survey of 400 purchasing managers in which respondents are asked to assess relative levels of business conditions, including employment, production, new orders, prices, supplier deliveries, and inventories. Since purchasing managers have perhaps the most up-to-date information on company conditions, this indicator is an important indicator of the state of the Australian economy as a whole. These sectors form a significant part of Australian GDP. A result above 50 signals is seen as positive (or bullish) for the AUD, whereas a result below 50 is seen as negative (or bearish) for the AUD. Data worse than 50 is seen as negative for the AUD. Previous Values: Manufacturing PMI: 50.2, 51.3, 52.7, 53.5, 53.8, 55.7, 56.2, 55.7. Services PMI: 47,3, 47,6, 49,3, 50,6, 50,2, 50,9, 52,6, 53,2. The level of influence on the markets is medium. Tuesday, January 24 Germany. Manufacturing PMI (PMI). Composite index (PMI) of business activity (preliminary releases). This S&P Global report is an analysis of a survey of 800 purchasing managers in which respondents are asked to assess the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries, and inventories. Since purchasing managers have perhaps the most up-to-date information on company conditions, this indicator is an important indicator of the state of the German economy as a whole. This sector accounts for a large portion of Germany's GDP. Normally, a result above 50 signals is seen as positive, or bullish for the EUR, whereas a result below 50 is seen as negative, or bearish for the EUR. Data worse than the forecast and/or the previous value will have a negative impact on the EUR. Previous values: Manufacturing PMI: 47.1, 46.2, 45.1, 47.8, 49.1, 49.3, 52.0, 54.8, 54.6, 56.9, 58.4, 59.8, Composite PMI: 49.0, 46.3, 45.1, 45.7, 46.9, 48.1, 51.3, 53.7. January forecast: 47.5 and 48.9, respectively. The level of influence on the markets (pre-release) is high. Eurozone. Manufacturing PMI Composite (preliminary release) S&P Global Manufacturing PMI (manufacturing PMI) released by S&P Global is a significant indicator of business conditions in the eurozone. A result above 50 signals is seen as positive (or bullish) for the EUR, whereas a result below 50 is seen as negative (or bearish) for the EUR. Data worse than the forecast and/or previous value will have a negative impact on the EUR. Previous values: 49,3, 47,8, 47,3, 48,1, 48,9, 49,9, 52,0, 54,8, 55,8, 54,9. Forecast for January: 49.0. The level of impact on markets (pre-release) is high. UK. Manufacturing and Services sectors (PMI) (provisional release) The PMI Manufacturing and Services Business Activity released by S&P Global is a significant indicator of British economic conditions. If the data is worse than expected and the previous value, the pound is likely to decline short-term, but sharply. Data better than the forecast and the previous value will have a positive effect on the pound. In the meantime, a result above 50 is seen as positive and strengthens the GBP, below 50 is seen as negative for the GBP. Previous values: Manufacturing PMI: 45.3, 46.5, 46.2, 48.4, 47.3, 52.1, 52.8, 54.6, 55.8, 55.2, 58.0, 57.3. Services PMI: 49,9, 48,8, 48,8, 50,0, 50,9, 52,6, 54,3, 53,4. Forecast for January: 45.0 and 49.9, respectively. The level of influence on the markets (pre-release) is high. US. S&P Global Business Activity Indices (PMI): Manufacturing, Composite and Services Economy (Preliminary Release) The S&P Global Composite PMI and Services PMI are among other monthly reports released by S&P Global and are important indicators of the health of the US manufacturing and US economy as a whole. A result above 50 is seen as positive (or bullish) for the USD, whereas a result below 50 is seen as negative (or bearish) for the USD. Readings above 50 signals an acceleration in activity, which is positive for the USD. If the indicator falls below the forecast, and especially if it is below 50, the USD may weaken sharply in the short term. Previous PMI values: 46.2, 47.7, 50.4, 52.0, 51.5, 52.2, 57.0, 59.2 in the manufacturing sector. Composite 45.0, 46.4, 48.2, 49.5, 44.6, 47.7, 52.3, 53.6, 56.0; In the services sector 44.7, 46.2, 47.8, 49.3, 43.7, 47.3, 52.7, 53.4, 55.6. The level of market impact of this S&P Global report (preliminary release) is high. However, it is still lower than the similar report from ISM (American Institute for Supply Management). The outlook for January is 46.1, 44.7 and 44.5, respectively. The level of influence on the markets (pre-release) is high. New Zealand. Consumer Price Index (CPI) (Q4) Consumer prices account for most of the overall inflation. Rising prices cause the central bank to raise interest rates to curb inflation, and conversely, when inflation declines or there are signs of deflation (this is when the purchasing power of money increases and prices of goods and services fall), the central bank usually seeks to devalue the national currency by lowering interest rates in order to increase aggregate demand. This indicator (Consumer Price Index, CPI) is key to assess inflation and changes in consumer preferences. A high reading is bullish for the NZD, while a low reading is bearish. Previous values: +2.2% (+7.2% annualized) in Q3, +1.7% (+7.3% annualized) in Q2, +1.8% (+6.9% annualized) in Q1 2022). Data better than forecast and previous values should reflect positively on NZD. Forecast for Q4: +2.4% (+7.1% YoY). The level of impact on the markets is high. Wednesday, January 25 Australia. CPI (Q4). Reserve Bank of Australia CPI, Core Inflation Trimmed mean (Q4) The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a certain period. CPI is a key indicator to assess inflation and changes in purchasing habits. Assessment of the inflation rate is important for the central bank management in determining the parameters of current monetary policy. A figure below the forecast/previous value can provoke weakening of the AUD, as low inflation will force the RBA governors to pursue a soft monetary policy course. Conversely, rising inflation and high inflation will pressure the RBA to tighten its monetary policy, which is seen as positive for the currency in normal economic conditions. Previous values of the index: +1.8% (+7.3% annualized) in Q3, +1.8% (+6.1% annualized) in Q2 2022, +2.1% (+5.1% annualized) in Q1 2022, +1.3% (+3, 5% annualized) in Q4, +0.8% (+3.0% annualized) in Q3, +0.8% (+3.8% annualized) in Q2, +0.6% (+1.1% annualized) in Q1 2021. Forecast for Q4 2022: +1.7% (+7.2% annualized). The level of impact on markets is high. The RBA Core Inflation - Trimmed mean - (for Q4) Released by the RBA and the Australian Bureau of Statistics. It captures the movement of retail prices of goods and services, which are included in the consumer basket. The simple truncated average method takes into account the weighted average core, the central 70% of the index components. Previous index values: +1.8% (+6.1% annualized) in Q3, +1.5% (+4.9% annualized) in Q2 2022, +1.4% (+3.7% annualized) in Q1 2022, +1.0% (+2, 6% annualized) in Q4, +0.7% (+2.1% annualized) in Q3, +0.5% (+1.6% annualized) in Q2, +0.3% (+1.1% annualized) in Q1 2021. Forecast for Q4 2022: +1.9% (+6.7% annualized). The level of impact on the markets is high. Canada. Bank of Canada interest rate decision. Accompanying statement of the Bank of Canada. The interest rate level is the most important factor in assessing the value of a currency. Investors look at most other economic indicators only to predict how rates will change in the future. The country's inflation rate has accelerated to a near 40-year high (in February 2022, Canadian consumer prices rose 5.7% year-over-year after rising 5.1% in January to a 30-year high, in May to 7.7%, and already 8.1% in June). This is the highest rate since early 1983! The Bank of Canada estimates that the neutral interest rate level, at which it neither stimulates nor slows economic activity, is 2.5%. The current interest rate level is 4.25%. The Bank of Canada is widely expected to raise interest rates again at this meeting, most likely by 0.25%. In an accompanying statement, Bank of Canada policymakers will explain the decision and possibly share plans for the monetary policy outlook. The tough tone of this statement will cause the Canadian dollar to strengthen. A more softer tone may provoke weakening of the CAD. The level of impact on the markets is high. Canada. Bank of Canada Press Conference The press conference consists of 2 parts - first the prepared statement is read out and then the conference is open to questions from the press. This is one of the main methods the Bank of Canada uses to communicate with market participants about monetary policy, also giving hints about future monetary policy. It elaborates on the factors that have influenced the bank's interest rate management decision. During the press conference, Bank of Canada Governor Tiff Macklem will explain the bank's position and give an assessment of the current economic situation in the country. If the tone of his speech is firm on the monetary policy of the Bank of Canada, the CAD will strengthen in the foreign exchange market. If Macklem argues in favor of monetary policy easing, the CAD is likely to decline. In any case, during his speech high volatility in the CAD is expected. The level of influence on the markets is high. Thursday, January 26 US. Annual GDP for Q4 (Preliminary Estimate). Core Personal Consumption Expenditures Index (PCE Price Index). Unemployment claims. Durable goods orders. Orders of capital goods (excluding defense and aircraft) The GDP is a key indicator of the US economy. Along with labor market and inflation data, GDP data are crucial for the US central bank in determining its monetary policy. A strong result strengthens the U.S. dollar; a weak GDP report negatively affects the dollar. There are 3 versions of GDP released at monthly intervals - Preliminary, Revised, and Final. Preliminary release is the earliest and it has the biggest impact on the market. The Final release has less impact, especially if it coincides with the forecast. Previous values for the index (annualized) are: +3.2%, -0.6%, -1.6%, +6.9%, +2.3%, +6.7%, +6.3% (Q1 2021). Forecast for Q4 2022 (preliminary estimate): +2.8%. The level of impact on markets (pre-release) is high. The Core Personal Consumption Expenditure Index (or Core PCE) is the primary measure of inflation which Fed FOMC officials use as the primary indicator of inflation. The level of inflation (in addition to labor market and GDP conditions) is important to the Fed when setting its monetary policy parameters. Rising prices put pressure on the central bank to tighten its policy and raise interest rates. Price index (PCE) values that are higher than forecasted could push the U.S. dollar up, as this would hint at a possible hawkish shift in the Fed's outlook, and vice versa. Previous values are +4.7% (Q3), +4.7% (Q2 2022), +5.2% (Q1 2022), 5.0% (Q4 2021), +4.6% (Q3), +6.1% (Q2), +2.7% (Q1 2021). Forecast for Q4 2022 (preliminary estimate): +5.3%. The level of impact on markets (preliminary release) is high. Also at the same time, the U.S. Labor Department will release its weekly report on the state of the U.S. labor market with data on the number of initial and continued jobless claims. The labor market condition (together with GDP and inflation data) is a key indicator for the Fed in determining its monetary policy parameters. A result above expectations and a rise in the indicator suggests weakness in the labor market, which negatively affects the U.S. dollar. A fall in the indicator and its low value is a sign of labor market recovery and can have a short-term positive impact on the USD. The initial and continued Unemployment Claims are expected to remain at pre-pandemic lows, which is also a positive sign for the USD, indicating a stabilization of the US labor market. Previous (weekly) values for initial jobless claims data: 190,000, 205,000, 206,000, 223,000, 216,000, 214,000, 231,000, 226,000, 241,000, 223,000, 226,000, 217,000, 214,000, 226,000, 216,000, 219,000, 190,000, 209,000, 208,000, 218,000, 228,000, 237,000, 245,000. Previous (weekly) values on unemployment reapplication data: 1647k, 1634k, 1694k, 1718k, 1669k, 1678k, 1670k, 1609k, 1551k, 1503k, 1494k, 1438k, 1383k, 1364k, 1365k, 1346k, 1376k, 1401k, 1401k, 1437k, 1412k. The level of influence on the markets - from medium to high. Orders for durable goods. Orders for capital goods (excluding defense and airvraft) Durable goods are defined as hard products with an expected life of more than 3 years, such as cars, computers, appliances, and airplanes, and imply large investments in their production. This leading indicator measures the change in the total value of new orders for durable goods placed with manufacturers. Growing orders for this category of goods signal that manufacturers will increase activity as orders are filled. Capital goods are durable goods used to produce durable goods and services. Goods produced in the defense and aviation sectors of the U.S. economy are not included in this indicator. A high reading strengthens the USD, while a low reading is negative for the USD. A low reading is also negative for the USD, while a high reading is positive for the USD. Previous Durable Goods Orders Indicator: -2.1% in November 2022, +0.7%, +0.3%, +0.2%, -0.1%, +2.2% in June, +0.8% in May, +0.4% in April, +0.6% in March, -1.7% in February, +1.6% in January. Previous values for the "capital goods orders excluding defense and aircraft" indicator: +0.2% in November 2022, +0.3% in October, -0.8% in September, +0.8% in August, +0.3% in July, +0.9% in June, +0.6% in May, +0.3% in April, +1.1% in March, -0.3% in February, +1.3% in January. Forecast for December: +2.5% and 0%, respectively. The level of impact on the markets is high. Friday, January 27 U.S. Personal Consumption Expenditures (PCE Core Price Index) The annual core price index PCE (excluding volatile food and energy prices) is the main inflation indicator used by Fed FOMC officials as the main indicator of inflation. The level of inflation (in addition to labor market and GDP conditions) is important to the Fed when setting its monetary policy parameters. Rising prices put pressure on the central bank to tighten its policy and raise interest rates. Core Price Index (PCE) values above the forecast could push the U.S. dollar up, as this would hint at a possible hawkish shift in the Fed's outlook, and vice versa. Previous values: +4.7% (annualized), +5.0%, +5.1%, +4.9%, +4.7%, +4.8%, +4.7%, +4.9%, +5.2%, +5.3%, +5.2% (in January 2022). Forecast for January: +0.2% (+4.6% annualized). The level of influence on the markets is medium to high. U.S. University of Michigan Consumer Confidence Index (final release) This index is a leading indicator of consumer spending, which accounts for most of the overall economic activity. It also reflects American consumers' confidence in the country's economic development. A high reading indicates economic growth while a low reading indicates stagnation. Generally speaking, a low reading is seen as negative (or bearish) for the USD in the short term. An increase in the indicator would strengthen the USD. The previous indicator values: 59.7, 56.8, 59.9, 58.6, 58.2, 51.5, 50.0, 58.4, 65.2, 59.4, 62.8, 67.2 in January 2022. Forecast for January: 64.6 (preliminary estimate 64.6 with a forecast of 61.6). The level of impact on markets (final release) is medium   Relevance up to 12:00 2023-01-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332879
The RBA Is Expected To Raise Rates By 25bp Next Week

The Aussie Pair (AUD/USD) Is In The Positive Area

InstaForex Analysis InstaForex Analysis 23.01.2023 08:00
The Australian dollar is leading gains in the currency market. On Friday, it rose by 59 pips and this morning it has already gained 25 pips. A divergence is about to be broken on the daily chart. Visually, the price will overcome the divergence with growth above 0.7000. There is a 70% probability of success, but there is still a 30% probability of price reversal from the current levels. The growth target is the 0.7090-0.7130 range, a strong reversal and consolidation range from 2021. On the four-hour chart, the price is above the balance and MACD line, the Marlin oscillator is in the positive area. Cautiously expect growth to the specified target range.   Relevance up to 03:00 2023-01-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332927
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The General Trend Of The GBP/USD Pair Is An Uptrend

InstaForex Analysis InstaForex Analysis 23.01.2023 08:01
It took the British pound three days to cross the resistance of 1.2410. The pound might still get some support for further rally if it could cope with Friday's disappointing retail sales data (-1.0% in December). There is one hidden obstacle for the pound's growth, which is the dotted line of the lilac-colored price channel on the daily chart. If the price overcomes it, there is nothing to prevent growth towards the target level of 1.2598, which is also indicated by the other dotted line of the price channel (blue). On the four-hour chart, the signal line of the Marlin oscillator has turned up from the limit of the area of the downtrend. The general trend is an uptrend. Due to the optimism, I expect the pair to rise to the target level of 1.2598.   Relevance up to 03:00 2023-01-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332929
Credit squeezing into central banks – what next?

The Euro Is Moving Towards The Target Level

InstaForex Analysis InstaForex Analysis 23.01.2023 08:02
The stock markets' brisk rise helped keep the euro from nearly an "imminent" breakthrough from the 9-month high. This morning, there is a gap. Even the signal line of the Marlin oscillator was above the divergence line. We don't know why the S&P 500 rallied by 1.89% on Friday, almost simultaneously (since Thursday) with pension funds contributions being cut to delay the "shutdown", as the US starts a hot period of disputes about the limit of the national debt. In the meantime, the euro is moving towards the target level of 1.0990. But the gap is open, and if it closes after crossing 1.0990 or if the price doesn't reach this mark, we don't know what will happen. I don't expect the euro to rise above 1.0990, we consider the given growth only as a temporary way out of the general strategy, which involves a decrease in risk appetite. On the four-hour chart, nothing interferes with growth, except for the window at the opening of the session. The price is above the indicator lines and the Marlin oscillator is in a good position for growth. The growth is expected to be short-term.   Relevance up to 03:00 2023-01-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332931
The EUR/USD Pair Maintains The Bullish Sentiment

Analysis Of The Euro To US Dollar Pair Situation

Torben Melsted Torben Melsted 23.01.2023 08:15
EUR/USD is struggling to hold its head above water but the ongoing correction from 1.0887 will soon drag it lower towards the 1.0437 - 1.0500 target area. We did say that we expected this correction to be complex and shallow in alternation with wave 2 which was deep and simple in its structure. It's possible that the ongoing sub-wave b of 4 will be able to reach resistance at 1.0933 which was our ideal target for wave 3 but it failed to reach this target. Then, we often see the sub-wave b of the following correction reach the expected target. However it's not a requirement, so don't take it for granted that we reach 1.0933 before the following decline towards the 1.0437 - 1.0500 target area.   Relevance up to 06:00 2023-01-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309559
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

Analysis Of The GBP/JPY Pair, GBP/JPY Has Been Corrected

Torben Melsted Torben Melsted 23.01.2023 08:16
GBP/JPY has been corrected since the 168.41 peak back in late April 2022. We are missing the final dip lower to 145.76 to complete the correction in wave 2 and set the stage for the next impulsive rally above 172.13 towards 195.50. Short-term we expect minor resistance at 162.33 to be able to cap the upside for the final dip closer to the ideal target at 145.76 to complete wave 2 and then higher in wave 3.   Relevance up to 06:00 2023-01-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309561
The Upside Of The EUR/USD Pair Remains Limited

The Upside Of The EUR/USD Pair Remains Limited

Oscar Ton Oscar Ton 23.01.2023 08:19
Technical outlook: EURUSD rose through 1.0903 in the early Asian session on Monday. The single currency pair is seen to be trading close to 1.0895 at this point in writing as the bears prepare to take control back. Prices have reached the resistance zone as marked on the daily chart here and could turn lower from here. The upside remains limited going forward. EURUSD is close to terminating its larger-degree corrective wave, which began from 0.9535 back in September 2022. The bulls have managed to remain in control for the past several weeks taking out major resistance at 1.0786 over the last week. They will likely take a break as the bears prepare to drag lower towards 1.0380 and down to 1.0050 going forward. EURUSD has also been accompanied by bearish divergence on the RSI on several different timeframes (hourly, 4H and Daily). This could also be a potential turning point and trend reversal. A break below 1.0481, which is immediate price support, will confirm a meaningful top in place above 1.0900. The instrument is looking lower from here soon. Trading idea: Potential bearish reversal against 1.0950-70. Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309563
The EUR/USD Pair: There Are Still No Sell Signals

The EUR/USD Pair: There Are Still No Sell Signals

Paolo Greco Paolo Greco 23.01.2023 08:25
M5 chart of EUR/USD Last Friday, EUR/USD was trading flat again. The end of last week was quite dull since the market decided to take a break. Macroeconomic and fundamental backgrounds were almost absent, but at the same time traders did not use this time for a correction. Thus, the euro once again failed to move down at least a little bit. The pair spent several days near the local highs, and on Monday it easily updated them, and this week we will see growth. Surely, there were no important events during the weekend or on Monday night, that's why the euro was aiming for growth again without any reasons. Reminder: the meetings of the Federal Reserve and the European Central Bank will be held in a week and the central banks' rates are one of the key factors, which explains why the euro grows. The Fed is almost guaranteed to lower the tightening rate to 0.25% and the ECB will continue to raise the rate at 0.5%. Based on the fact that the rate gap is starting to narrow, traders are still buying the euro. There was only one trading signal on Friday. The price rebounded from the 1.0802-1.0806 area at the beginning of the US trading session, and then went up about 30 points. That is how much profit could be made on Friday. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders increased by 16,000, whereas the number of short positions rose by 11,000. Thus, the net positions increased by 5,000. The number of long positions is 135,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? Moreover, from a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 48,000 (702,000 vs. 655,000). H1 chart of EUR/USD You can see on the one-hour chart that EUR/USD has spent about a week in the 1.0806-1.0868 horizontal channel, but today it could come out of it through the upper limit. Therefore, the ascending movement may continue this week, but there are still no sell signals. On Monday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137 and also Senkou Span B (1.0679) and Kijun Sen (1.0834). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 23, ECB President Christine Lagarde will give another speech in the EU, but it will be late in the evening. In the US, there are no major events scheduled for tonight. We do not expect a strong market reaction to Lagarde's speech but at the same time the euro might continue to rise even without a clear reason. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 05:00 2023-01-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332935
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The GBP/USD Pair Is Still Trading In An Uptrend

Paolo Greco Paolo Greco 23.01.2023 08:28
M5 chart of GBP/USD GBP/USD also traded mostly sideways on Friday, and it's still trading the same way at the beginning of the new week. At the moment, the pound returned to its local high near 1.2429, but has not yet managed to overcome it. Thus, further growth is still questionable, but given the predisposition of the market to buy euro and pound in recent weeks and months, I will not be surprised if it still rises this week. The market is already focused on the next Federal Reserve and Bank of England meetings and it looks like we shouldn't expect the Fed to be more aggressive, but the BoE with its highest inflation rate has no other way but to keep raising the rate aggressively. I don't think this is entirely true, as no one knows how much longer the BoE will be able to raise the rate. The recession in the British economy may be the longest and deepest among EU countries, but the fact remains that the market believes the BoE will continue to tighten monetary policy. There were three buy signals on Friday. All of them were near 1.2342. The price rebounded from the specified level three times, but it was only able to go in the right direction by more than 20 points on the third time. Therefore, you should have only opened one long position. The pair was able to grow by about 35 pips until the evening, that's how much traders could get on this single deal by closing it manually. COT report The latest COT report showed an increase in bearish sentiment. During the given period, non-commercial traders closed 7,600 long positions and opened as many as 1,500 short positions. Thus, the net position fell by about 9,100. This figure has been on the rise for several months, and the sentiment may become bullish in the near future, but it hasn't yet. Although the pound has grown against the dollar for the last few months, from a fundamental perspective, it is difficult to answer why it keeps rising. On the other hand, it could fall in the near future (in the mid-term prospect) because it still needs a correction. In general, in recent months the COT reports correspond to the pound's movements so there shouldn't be any questions. Since the net position is not even bullish yet, traders may continue to buy the pair over the next few months. Non-commercial traders now hold 36,000 long positions and 65,500 short ones. I remain skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD is still trading in an uptrend and continues to be above the lines of the Ichimoku indicator. Thus, due to technical reasons, we can expect the pound to continue rising even if it is unreasonable. There are no sell signals, therefore, it is not necessary to expect a sharp fall from the pound. Do recall that the pound sharply rose in the last months and too quickly at that, therefore, it is considered overbought. But the market believes that buying without any clear reason is still possible, so the pair may continue rising this week. On January 23, the pair may trade at the following levels: 1.2106, 1.2185, 1.2259, 1.2342, 1.2429-1.2458, 1.2589, 1.2659. The Senkou Span B (1.2063) and Kijun Sen (1.2307) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Monday, there are no important events planned in the US and Britain, but overnight trading already showed that the market is ready to buy the pair again, despite the lack of fresh fundamental and macroeconomic background. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 05:00 2023-01-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332937
The Downside Of The US Dollar Index Remains Limited

The Downside Of The US Dollar Index Remains Limited

Oscar Ton Oscar Ton 23.01.2023 08:30
Technical outlook: The US dollar index dropped through the 101.20 lows during the early Asian session on Monday. The index has found some support thereafter and is seen to be trading close to 101.40 at this point in writing. A push above 102.10-20 will confirm that a meaningful bottom is in place and the bulls are back in control. The downside remains limited from here. The US dollar index has further terminated its larger-degree drop, which started from 114.70, in September 2022. The Fibonacci 1.618 extension has been met at 102.20 as seen on the 4H chart here. A high probability remains for a bullish reversal from the current levels towards 106.50 and 109.50 respectively. The US dollar index is facing strong resistance at 105.35. A push higher will confirm a further upside and that the bulls are here to remain in control. Near-term resistance is seen around 102.50 and it would be encouraging to see prices break higher. Only a consistent break below 101.00 will void the above-presented bullish scenario. Trading idea: Potential trend reversal higher against 100.00 Good luck!   Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309569
The USD/CHF Pair Is Likely To Decline More

The USD/CHF Pair Is Likely To Decline More

TeleTrade Comments TeleTrade Comments 23.01.2023 08:42
USD/CHF consolidation the biggest daily gains in over a week. Two-week-old descending trend line, 200-HMA guard immediate upside. Bearish MACD signals back the failure to cross key hurdles and direct sellers towards immediate support line. USD/CHF holds lower ground as it extends the previous day’s pullback to snap a two-day uptrend around 0.9180 on early Monday. In doing so, the Swiss Franc (CHF) pair also justifies the bearish MACD signals while approaching an ascending support line from last Wednesday, close to 0.9160 by the press time. It’s worth noting that the quote’s weakness past 0.9160 will make it vulnerable to refreshing the monthly low, currently around 0.9085. As a result, August 2021 low near 0.9020 and the 0.9000 psychological magnet could gain the USD/CHF bear’s attention past 0.9160. If at all the USD/CHF pair remains bearish past 0.9000, the June 2021 bottom around 0.8925 and the year 2021 trough of 0.8757 will be in focus. On the flip side, a convergence of the downward-sloping resistance line from January 06 and the 200-Hour Moving Average (HMA), close to 0.9230-35, could challenge short-term USD/CHF recovery. Following that, a run-up towards 0.9365 and the monthly high near 0.9410 can’t be ruled out. In a case where USD/CHF remains firmer past 0.9410, the late November 2022 swing high around 0.9600 will be in focus as it acts as the last defense of the pair sellers. Overall, USD/CHF is likely to decline more but the downside room appears limited. USD/CHF: Hourly chart Trend: Further downside expected
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The USD/CAD Pair Is Expected Limited Downside Movement

TeleTrade Comments TeleTrade Comments 23.01.2023 08:46
USD/CAD picks up bids to reverse intraday losses, probes two-day downtrend. Multiple moving averages stand tall to challenge recovery moves. MACD, RSI conditions suggest further weakness but 10-week-old support line restricts immediate downside. USD/CAD licks its wounds during a sluggish Monday morning as the pre-Fed blackout joins the Lunar New Year holidays in China. Even so, the bears remain hopeful as the quote extends the previous day’s pullback from the key moving averages. That said, the Loonie pair reverses the week-start losses near 1.3375 by the press time. Not only a slew of moving averages but the bearish MACD signals and the mostly steady RSI (14) also keep the USD/CAD sellers hopeful of visiting an upward-sloping support line from November 15, 2022, around 1.3335 at the latest. It should be noted that the quote’s weakness past 1.3335 could make it vulnerable to dropping toward the September swing high near 1.3205. However, the 200-DMA support of around 1.3195 could challenge the USD/CAD bears afterward. In a case where the USD/CAD bears keep the reins past 1.3195, the 1.3000 psychological magnet will be in focus. Alternatively, the 21-DMA guards the pair’s immediate upside around 1.3480 ahead of the convergence of the 50-DMA and the 100-DMA, close to 1.3510-20. If at all the USD/CAD buyers manage to cross the 1.3520 hurdle, a downward-sloping resistance line from October 13, 2022, near 1.3615, could act as the last defense of the pair sellers. Overall, USD/CAD remains on the bear’s radar even if the 2.5-month-old support line limits nearby declines. USD/CAD: Daily chart Trend: Limited downside expected
Driving Growth: The Resilience of Green Bonds and Shifting Trends in Sustainable Finance

The Indian Rupee (INR) Pair Cheers The Broad US Dollar Weakness

TeleTrade Comments TeleTrade Comments 23.01.2023 08:49
USD/INR licks its wound after refreshing multi-day low. Strong foreign inflow, broad US Dollar weakness underpins USD/INR slump. Hawkish Fed talks fail to impress USD bulls amid hopes of easy rate hike in February, policy pivot afterward. Markets expect RBI to curb Indian Rupee strength aroud 81.00 round figure, Advance readings of US Q4 GDP eyed too. USD/INR pares intraday losses around 81.00, after declining to the lowest levels since early November 2022 during early Monday’s trading in India. In doing so, the Indian Rupee (INR) pair cheers the broad US Dollar weakness, as well as the heavy inflow to the Indian economy, while also portraying the fears of the Reserve Bank of India’s (RBI) market intervention. That said, the US Dollar Index (DXY) drops 0.30% intraday to 101.65 by the press time, down for the fourth consecutive day in a row, amid cautious optimism in the market and the absence of Federal Reserve (Fed) talks during the two-week ‘blackout period’ before the Fed meeting. The greenback’s gauge versus the six major currencies also highlights the market forecasts of the Fed’s slow interest-rate increases for the second straight meeting in February, as well as the nearness to policy pivot. That said, downbeat US data and easing inflation woes underpinned the dovish market’s expectations from the US central bank. At home, heavy foreign inflows due to the major private players’ capital issues and hedgers’ activity seemed to have favored the INR as well. It should be noted that a jump in India’s foreign exchange reserves to a five-month high also favored the USD/INR bears. “India's foreign exchange reserves rose to $572 billion in the week through Jan. 13, their highest level since early August last year, the Reserve Bank of India's (RBI) statistical supplement showed on Friday,” said Reuters. It’s worth noting that the Lunar New Year holidays in Asia and a lack of major data/events seem to have allowed the USD/INR buyers to take the risk. On the same line are the market chatters that the RBI will intervene to defend the pair from slipping beneath the 81.00 round figure. Against this backdrop, US Treasury yields remain pressured while the US stock futures print mild gains while the stocks in the Asia-Pacific region trade mixed. Moving on, an absence of Fedspeak and Chinese traders may restrict the USD/INR moves. However, the first readings of January’s Purchasing Managers Indexes (PMI) and the US four-quarter (Q4) Gross Domestic Product (GDP) will be the key to follow for clear directions. Technical analysis Unless printing successful trading beyond the previous support line from early August 2022, close to 81.95 by the press time, the USD/INR pair is likely declining toward November 2022 low near 80.40.
The AUD/USD Pair’s Downside Remains Off The Table

The AUD/USD Pair May Witness Further Grinding

TeleTrade Comments TeleTrade Comments 23.01.2023 08:54
AUD/USD clings to mild gains after snapping four-week uptrend. Risk appetite remains positive amid talks of soft landing, policy pivot in the US. China’s week-long Lunar New Year holidays, pre-Fed blackout restrict immediate moves. Australia CPI, US Q4 GDP will be crucial for fresh impulse. AUD/USD seesaws around 0.6980-85 as it defends the week-start gains amid a sluggish Monday morning in Europe. In doing so, the Aussie pair remains mildly bid amid week-long holidays in China and the US Federal Reserve (Fed) policymakers’ stipulated off from the public appearances ahead of early February’s Federal Open Market Committee (FOMC) meeting. It’s worth noting that the receding hopes of the global recession, as well as growing chatters surrounding the Fed’s policy pivot, seems to underpin the bullish bias surrounding the risk barometer pair AUD/USD. Late the last week, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said that the global “outlook is less bad than we feared a couple of months ago.” On the same line, JP Morgan Chase & Co. spotted seven indicators to suggest easing economic slowdown fears. Further, the US National Association of Business Economics (NABE) recently released a survey saying, “The likelihood that the United States is already in recession or will fall into one this year has dropped over the past three months to 56% from a nearly two-thirds possibility,” per Reuters. Elsewhere, the Fed policymakers’ inability to convince of their hawkish bias, mainly due to the downbeat US data, joins optimism surrounding China to keep the AUD/USD buyers hopeful. Amid these plays, the US Treasury yields remain pressured around multi-day, fading the last few days’ corrective bounces, while the US stock futures print mild losses and the Asia-Pacific equities trade mixed. Given the lack of major data/events during the rest of the day, the AUD/USD pair may witness further grinding. However, Australia’s quarterly Consumer Price Index (CPI), up for publishing on Wednesday, will precede the US four-quarter (Q4) Gross Domestic Product (GDP) to entertain the pair traders. Technical analysis Bearish Doji on the weekly chart, that too exactly below the 200-SMA, teases AUD/USD bears.
The USD/JPY Price Reversed From The Lower Limit

The Major Options Market Players Are Bullish On The USD/JPY Prices

TeleTrade Comments TeleTrade Comments 23.01.2023 08:56
USD/JPY takes the bids to refresh intraday high near 130.00 during early Monday in Europe as buyers keep the reins after taking positions at the eight-month low in the last week. In doing so, the Yen pair traces upbeat signals from the options market to lure buyers. That said, the one-month risk reversal (RR), the gauge of call options versus the put options, prints the strongest RR figures since late October 2022. That said, the one-month RR rose to the +0.820 level on the weekly basis at the latest, testing the highest bullish level since October 28, 2022. On the daily format, the RR printed mild gains around +0.185. Hence, the major options market players are bullish on the USD/JPY prices even if the pair is yet to portray a confirmatory rebound from the multi-day top. Also read: USD/JPY bears eye 129.00 on BoJ Minutes, focus on US GDP, Tokyo inflation
Central Banks' Rates Outlook: Fed Treads Cautiously, ECB Prepares for Hike

Gas And Oil Prices Are Higher Too Ahead Of The EU Embargo On Russian Products

Saxo Bank Saxo Bank 23.01.2023 09:08
Summary:  Risk on tone supported by lower bond yields and US dollar. Saxo’s equity baskets show the best gains are in sectors benefiting from China’s reopening. If NZ's CPI slows more than expected, the NZDUSD may see profit taking. Chinese New Year brings limited market hours. Australia’s ASX200 to take out a new all-time high, but CPI is in the way. Gold and copper continue to rally up. Oil prices are higher ahead of the EU embargo on Russia. Tech profits expected to dive, but there is room for disappointment. Saxo Spotlight: What’s on investors & traders radars this week, January 23-27: US GDP, AU NZ CPI, Microsoft & Tesla earnings Risk on tone supported for now as bond yields hold near lows, along with US dollar index US Treasury bond yields trading at some of the lowest levels down about 0.8% from the October peak, but yields are up slightly at 3.48%. Yields look set for lower levels and could even head back down and could drop below the 200-day SMA. The next level we’re watching is if yields fall to 3.22%.  If that level is reached, it would theoretically support US equities. We’d also need to see the US dollar remain lower. The US dollar index is now down 10% from its September high, but rose slightly on Friday after hotter than expected US prouder inflation for November, which bolsters the case for the Fed to keep hiking, even if it’s at a slower pace. Most gains in Saxo's equity baskets are in sectors benefiting from China’s reopening The Travel, E-commerce basket of stocks are up the most this month, followed by Energy Storage and China Consumer and Technology basket. However year-on Year, the most growth is from Defence which is up 21%. Economic news brings FX into focus US fourth-quarter GDP data, European PMIs and the Bank of Canada rate decision, as well as CPI for Australia and NZ will all be watched. NZ Consumer prices are expected broadly to have climbed 7.1% in the fourth quarter from a year earlier, which could mark CPI is slowing from the prior 7.2% and, more importantly, less than the 7.5% predicted by the Reserve Bank in its most recent forecasts. Given the NZ dollar was one of the strongest currencies last week, it could face profit taking if the data is weaker than expected. Market hours are limited this week, for Chinese New Year This also means light volume is expected and thus moves could perhaps be amplified on thin trade. China’s market is shut all week (Monday to Friday), Hong Kong’s market is shut for Monday to Wednesday, Singapore’s market is shut for Monday and Tuesday. Australia’s market shut Thursday for Australia Day. Australia’s ASX200 could likely to take out a new all-time high..... this is supported by the rally in commodities and expected higher earnings from mining companies, which make up 25% of the market. However CPI is a focus this week. Our technical analyst backs up this thinking, that the ASX200 is likely to hit a new all high- for more click here. But the danger this week is if Q4 CPI is hotter than expected on Wednesday, then equities could see profit taking. However overall sentiment is bullish for the ASX as demand for copper and iron ore is likely to pick up after CNY. CPI is expected to rise to 5.8% YoY from 5.6% (trimmed Mean CPI). And CPI YoY is expected to rise to 7.7% YoY, from 7.3%. Hotter data could further fuel the AUD and a likely fuel a sell-off in tech stocks and real estate. In company news to watch, iron ore company Champion Iron (CIA) reports quarterly earnings. Given the iron ore price is up 66% from its low, its outlook is expected to be optimistic. In commodities Gold and copper are gaining momentum and oil rallies The precious metal, gold, has been supported by lower yields and the US dollar falling, which has supported gold up 19% from its September low. As Ole Hansen points out we might need to see ETF holdings pick up in Gold, to see longer term investors getting involved, which could support gold higher, or potentially we may see some profit taking. However, gold momentum remains as long as the USD and yields behave. Recall that if the Fed pauses rates and rates peak, we think there is a case for our outrageous prediction of gold hitting $3,000 coming true. Copper trades up 0.5% to $4.25, its highest level since June last year, continuing its 32% rally off its low on expectations that China will increase buying after the Luna New Year holiday. Plus there are also disruptions on copper output in Peru, which could impact 2% of global copper output. So given inventory levels are already lower and demand expectations are picking up, copper prices are underpinned. Gas and oil prices are also higher too ahead of the EU embargo on Russian products which starts on February 5th. Oil (WTI) is up 1.3% to $82.64, at this level since early November, after two weeks of gains. Refinery demand is supporting prices. Tech companies' profits are expected to dive, but earnings estimates could be too optimistic & disappoint In the S&P500(US500.I) tech companies, which make up 26% of the market, are expected to report a quarterly profit drop of 9.2% on average, according to Bloomberg. This could be the biggest tech profit drop since 2016. Forward 12-month earnings of 39% is also expected according to Bloomberg. The danger is that estimates are still too bullish, and markets will likely be disappointed, which would trigger a fall. Overall aggregate S&P500 earnings are expected to have grown 2.12% in the quarter and miners are expected to deliver the most growth, real estate with the least. So far, only 55 companies have reported in the S&P500 and earnings have fallen over 4% on average. So, the bear case is still a factor for some investors, especially in tech. More job cuts are expected with margins being squeezed. EV companies are also facing pressure with higher metal prices. On Tuesday Microsoft kicks off earning season. Defence giants Raytheon and Lockheed Martin report on Tuesday. Tesla reports Wednesday. On Thursday Intel and Mastercard report, and steel giant Nucor. On Friday Chevron. These could be industry proxies to watch with a major focus on their outlooks.   Key economic releases & central bank meetings this week to watch  Monday 23 January China, Hong Kong, Taiwan, South Korea, Indonesia, Malaysia, Singapore Market Holiday Japan BOJ Meeting Minutes (Dec) Tuesday 24 January China, Hong Kong, Taiwan South Korea, Malaysia, Singapore Market Holiday Australia Judo Bank Flash PMI, Manufacturing & Services Japan au Jibun Bank Flash Manufacturing PMI UK S&P Global/CIPS Flash PMI, Manufacturing & Services Germany S&P Global Flash PMI, Manufacturing & Services France S&P Global Flash PMI, Manufacturing & Services Eurozone S&P Global Flash PMI, Manufacturing & Services US S&P Global Flash PMI, Manufacturing & Services Thailand Customs-Based Trade Data (Dec) Germany GfK Consumer Sentiment (Feb) United Kingdom CBI Trends (Jan) Wednesday 25 January China, Hong Kong, Taiwan Market Holiday New Zealand CPI (Q4) Australia Composite Leading Index (Dec Australia CPI (Q4) Japan Leading Indicator (Nov, revised) Singapore Consumer Price Index (Dec) United Kingdom PPI (Dec) Thailand 1-Day Repo Rate (25 Jan) Germany Ifo Business Climate New (Jan) Canada BoC Rate Decision (25 Jan) Thursday 26 January Australia, China, Taiwan, India Market Holiday Japan BOJ Summary of Opinions (Jan) South Korea GDP (Q4) Japan Services PPI (Dec) Philippines GDP (Q4) Singapore Manufacturing Output (Dec) Norway Labour Force Survey (Dec) United Kingdom CBI Distributive Trades (Jan) Canada Business Barometer (Jan) United States Durable Goods (Dec) United States GDP (Q4, advance) United States Initial Jobless Claims United States New Home Sales (Dec) Friday 27 January China, Taiwan Market Holiday Japan CPI, Overall Tokyo (Jan) Australia PPI (Q4) Australia Export and Import Prices (Q4) United States Personal Income and Consumption (Dec) United States Core PCE (Dec) United States UoM Sentiment (Jan, final) United States Pending Home Sales (Dec) Source:Saxo Spotlight: What’s on investors & traders radars this week? | Saxo Group (home.saxo)
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

FX: Low Gas Prices Should Remain Supportive For FX In The CEE Region

ING Economics ING Economics 23.01.2023 09:17
Risk assets are largely holding onto their 2023 gains, buoyed by the view that recessions may be mild and that slowing price pressures could allow the Fed to respond if need be. This has left the dollar gently offered. Ahead of next week's Fed and ECB policy decisions, this week's focus will be on US 4Q GDP, PMI readings, and rate decisions in Canada and Hungary USD: Dollar to stay gently offered The dollar starts the week gently offered. Trading conditions in Asia overnight have been quiet as China starts a week of public holidays for the Lunar New Year. A quick review of asset market performance year-to-date shows equities performing well with European and Chinese equities leading the pack at +8%. Bond markets have also been performing well, led by the emerging market local currency sector. The big question for this year remains whether we will see a differentiation between equities and bond markets as the US and Europe go into recession. And indeed, it seems that credit market participants are reluctant to drive credit spreads any narrower at this stage in the cycle. Ahead of next week's Fed meeting, the US focus this week will be on the provisional January PMI readings, where both manufacturing and services sentiment are expected to continue with recessionary sub-50 levels. Thursday should see a reasonably strong 4Q22 US GDP figure of 2%+ quarter-on-quarter annualised, although as our US economist James Knightley writes, that strength may be driven by the trade side and on the back of weak US imports. Friday sees the December personal income data, including the Fed's preferred measure of inflation, the core PCE deflator. James is sub-consensus on this, looking for a 0.2% month-on-month reading and supporting the narrative that the US inflation threat is easing. The data calendar in theory should keep the dollar on the soft side this week. However, DXY has come quite a long way already and we doubt whether the market is ready to add to short dollar positions ahead of next week's FOMC meeting - which could pose a positive event risk to the dollar should the Fed push back on the 50bp of easing the market now prices for this year. As such, DXY may find support in the 101.30/102.00 range this week. Chris Turner EUR: ECB pushback successful Judging by the levels of the two-year EUR swap (3.19%) European Central Bank speakers have been successful in pushing back against last Tuesday's Bloomberg News story that the ECB wanted to slow the pace of its hikes after February. This story had sent this swap rate down to 3.05%, softening EUR/USD with it. Both of those trends have now been reversed. However, as above on the dollar story, we suspect investors may be reluctant to chase EUR/USD through resistance at 1.0950/1000 ahead of next week's central bank event risks. In terms of eurozone data, look for the provisional January PMI readings across the eurozone, Germany, and France (released tomorrow) and Germany's Ifo on Wednesday. The Ifo will be particularly interesting to see whether the expectations component picks up anywhere near as sharply as the German ZEW investor survey. Please see here for our eurozone macro team's latest views on the region. A bullish wildcard for the euro could come from any further comments on new joint EU bond issuance to support green investments, as European politicians attempt to support local industry in the face of President Biden's Inflation Reduction Act.  Elsewhere, Francesco Pesole has today published a scenario outlook for the EUR/SEK. Our core view is for a lower EUR/SEK this year. Chris Turner GBP: Holding its own Sterling continues to perform well and is holding onto the gains made last week on the back of high wage and core CPI readings. The market now prices a 45bp Bank of England (BoE) hike at next week's meeting. The firming up of BoE tightening expectations has allowed sterling to match this year's strength of the euro. And certainly, there has been a marked improvement in the perception of UK sovereign risk as evidenced by the five-year sovereign CDS trading back down to 22bp last week. This week's UK calendar mainly focuses on the January PMI readings, where again both the manufacturing and services components are expected to be in recessionary territory. Overall, we suspect GBP/USD might not have the momentum to sustain a break above 1.2450/2500 this week, while EUR/GBP should find support in the 0.8700/8730 area. Chris Turner CEE: All eyes on the Hungarian forint This week, the region gets interesting again. Today, we get a series of monthly indicators from the Polish economy, which should show further signs of slowing. The main focus will be on industrial production, which we estimate grew by 1.2% year-on-year, less than market expectations. Tomorrow, consumer confidence in the Czech Republic will be published and later we will see the decision of the Hungarian National Bank (NBH). We saw a downside surprise in December inflation, but believe the peak is still ahead. We do not expect any changes in monetary policy settings, but the market will be looking for some signs of an early interest rate cut. In our view, the NBH will maintain a hawkish tone and will not encourage speculation of premature action. On Wednesday, Poland will release labour market data. Besides the calendar, we can expect further statements from the Czech National Bank board members before the blackout period for the February meeting begins on Thursday. However, at the moment everything points to continued stability in interest rates. In Hungary, Fitch downgraded the sovereign rating outlook from stable to negative on Friday. The agency cites among the reasons the delay in payments from EU funds, which implies insufficient progress in the EU story. In addition, this Friday, S&P will publish a rating review of Hungary. The agency already downgraded its outlook in August.   In the FX market, at the global level, not much changed for the CEE region last week. Higher EUR/USD, improving sentiment in Europe and low gas prices should remain supportive for FX in the region. However, all eyes will be on the Hungarian forint this week as it faces an NBH meeting and rating risks. We believe the forint will find a way to maintain its current strong values at the end of the week despite higher volatility. A deterioration in the outlook should not be a major surprise for the market and we also expect the hawkish NBH to dampen the current market speculation on an early rate cut, which should be positive for the forint. On the other hand, positioning is on the long side according to our estimates though if everything goes according to plan, we could test 390 EUR/HUF. Elsewhere, we see the Czech koruna still near 24.00 EUR/CZK and the Polish zloty should go below 4.70 EUR/PLN. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

Overall The Rising Trend Of The EUR/USD Pair Is Still In Place

Paolo Greco Paolo Greco 23.01.2023 09:42
On Friday, the EUR/USD currency pair continued to move more sideways than upwards, but overall the rising trend is still in place, and the European currency soared with renewed force tonight and in the morning. The pair simply took a little break last week before a new "take-off," in theory. We are not the only ones puzzled by this; a sizable number of specialists are also questioning what is motivating the market, which keeps buying the euro currency. Nothing significant occurred on Monday night that could have caused the euro to increase significantly. As a result, the overall situation is unchanged: the pair frequently exhibits growth for no apparent reason. We've already mentioned that the euro may now be supported by one or two factors. The first is the highly likely narrowing of the ECB-Fed rate differential in the coming months. The second is a technical upward trend correction following a slump of approximately two years. However, it should also be acknowledged that the euro is expanding too quickly and in excess. The outcomes of the Fed and ECB meetings, which will be held in a week and a half, are in reality already known to the market. We think that these occurrences may cause the market's sentiment to shift. However, we must reiterate that the market will act regardless of the underlying and macroeconomic context if it chooses to purchase the euro and sell the dollar. Just that there are times when the macroeconomics and "foundation" don't correspond with the direction of movement. So, all you need to do is pay closer attention to technical analysis, which depicts market activity flawlessly. What will this week's trading bring? In terms of macroeconomics or "foundation," this week won't be the most interesting. There won't be many truly significant stories or happenings. We should begin by listening to a few more remarks from Christine Lagarde. Last Thursday and Friday, the ECB's president spoke, although she offered no essentially novel information. Monetary policy, it should be understood, is like the Titanic in the Atlantic. If Lagarde speaks five times in two weeks, she simply cannot surprise market participants every time because she shifts the direction of her movement extremely slowly. Therefore, just one performance out of five or ten can cause a market shift. But it's also impossible to dismiss the ECB president's statement as "unimportant." Lagarde will present this week on Monday, Tuesday, and Friday. Tomorrow will also see the release of business activity indices for the EU services and industrial sectors in addition to Lagarde's speeches. Serious changes in their values shouldn't be anticipated based on the forecasts. All three indicators are predicted by experts to remain below the "waterline" of 50.0, therefore a big response to these findings is not anticipated absent significant departures from expectations. All of the events scheduled for this week, following the European Union, are listed above. It turns out that traders can, in theory, focus only on the "method" for the next five days. And all that is saying at this point is that neither a sell signal nor a condition for the pair to decline exists. On the 4-hour TF, all indications are pointing upwards, and on the 24-hour TF, the price is above all of the Ichimoku indicator's lines. Such a movement might theoretically continue for as long as you like. Although we are not opposed to the euro's expansion, we think there should also be corrections. It should be remembered that nearly all of the Fed's monetary policy committee members indicated last week that they were prepared to continue tightening monetary policy. Although it appears to be a "hawkish" aspect, the dollar showed little sign of reaction. It is therefore far from certain that the dollar will appreciate, even if supportive elements for the US currency emerge this week. As of January 23, the euro/dollar currency pair's average volatility over the previous five trading days was 79 points, which is considered "normal." So, on Monday, we anticipate the pair to fluctuate between 1.0813 and 1.0971. The Heiken Ashi indicator's downward reversion will signal the beginning of a new phase of corrective activity. Nearest levels of support S1 – 1.0864 S2 – 1.0742 S3 – 1.0620 Nearest levels of resistance R1 – 1.0986 Trading Suggestions: The EUR/USD pair is attempting to move north once more. Until the Heiken Ashi indicator turns down, you can continue holding long positions with goals of 1.0971 and 1.0986. After putting the price below the moving average line and setting a target price of 1.0742, you may start opening short positions. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 07:00 2023-01-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332947
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Pound (GBP) Is Fast Increasing Once More

Paolo Greco Paolo Greco 23.01.2023 09:46
The GBP/USD currency pair started moving upward again on Friday and is currently approaching the regional high of December 14. Traders may be unable to break through the Murray level of "8/8" (1.2451), but so far, everything indicates that the British pound will continue to rise. One should only attempt to explain why the British pound has climbed by 600 points over the previous two weeks if one wants to comprehend what is going on in the market right now. The likelihood of a subsequent increase in the BA rate has not increased during this time, and the Fed has not changed its monetary policy. The US inflation report, which showed a new, significant deceleration, is the only thing that can be noted. The market quickly rejoiced and rushed to sell US dollars because it believed that the Fed's monetary policy would soon slow down again. Thus, the pound is fast increasing once more, but since it is a British currency, we can claim that this movement is at least somewhat predictable. Nevertheless, the pair corrected lower by 600 points in late December and early January. However, we are still baffled as to how the British pound can keep rising in value. The CCI indicator has entered the overbought region, which frequently heralds a reversal and movement in the other direction, even though all trend indicators are currently going upward. Although the meetings of the Bank of England and the Fed will take place in a week and a half, the market is already aware of both central banks' decisions. Of course, what the Central Bank leaders say matters as well, and there might be some surprises. However, the market can now determine those judgments that won't be made public until next week. Formally, the GDP report is the most significant report of the week. If the current week is boring for the European currency, it will be even more so for the pound. The producer price index will be released on Wednesday in the UK, and business activity indices for the manufacturing and service sectors will be released on Tuesday. Indicators of business activity are very likely to stay below the 50.0 thresholds, and the producer price index doesn't usually cause a market reaction. We are not anticipating any crucial communications from the UK. It remains only to consider the American events. Business activity indices will once more be released in the United States tomorrow, and they will also remain nearly 100% below the "waterline." A report on the fourth quarter's GDP and orders for long-term goods will be released on Thursday. Data on American citizens' spending and income, as well as the University of Michigan's consumer sentiment index, were released on Friday. The GDP report will undoubtedly garner the greatest interest. Currently, the official prediction indicates a quarterly rise of 2.6-2.7%. That is, although there is still a 50% chance that the American economy will experience a recession this year, it has not yet happened. The US economy expanded in the most recent quarter, and this development may have strengthened the dollar had the market not been generally inclined to buy the euro and the pound. As a result, we think that the dollar won't increase significantly even if the GDP report's predicted value is exceeded. Every other report is solely secondary information. Of course, in theory, the market might potentially react to them, but in practice, if it does, it will either be minimal or nonexistent. Furthermore, these data won't be able to change the market's sentiment enough to stop the dollar's upward trajectory. Additionally, there won't be any significant speeches this week because there is a "silent mode" 10 days before the next central bank meeting. We won't get any new information from the primary source because Fed officials aren't allowed to speak on monetary policy. But because nearly all of the monetary committee members spoke last week and we are aware of what to anticipate from the Federal Reserve next week, it is no longer necessary. Over the previous five trading days, the GBP/USD pair has averaged 117 points of volatility. This figure is "high" for the dollar/pound exchange rate. Thus, we anticipate movement inside the channel on Monday, January 23, with movement being constrained by levels of 1.2302 and 1.2535. A new phase of the corrective movement is indicated by the Heiken Ashi indicator turning downward. Nearest levels of support S1 – 1.2390 S2 – 1.2329 S3 – 1.2268 Nearest levels of resistance R1 – 1.2451 R2 – 1.2512 R3 – 1.2573 Trading Suggestions: On the 4-hour timeframe, the GBP/USD pair is still rising. Therefore, until the Heiken Ashi indicator swings down, it is still possible to hold long positions with goals of 1.2512 and 1.2535. If the price is locked below the moving average with targets of 1.2207 and 1.2146, short trades may be opened. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones Relevance up to 07:00 2023-01-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332953
Bank of England survey highlights easing price pressures

The Bank Of England Is Forced To Act Aggressively

Marek Petkovich Marek Petkovich 23.01.2023 10:02
The second consecutive decline in retail sales in December, this time by 1%, reminded investors of bad times. It seems too early to say that the UK economy will avoid recession. Sky-high energy bills and depleted household wallets indicate that retailers are in for a tough year. This threw the pound into the murky waters of last year, when Britain was named the worst G7 economy, never fully recovering from COVID-19. The optimists, however, have not lost faith. And the retreat of GBPUSD seems to them a temporary phenomenon. The economy looks more resilient Sterling fans cannot but rejoice that the Bank of England is among those for whom the glass is half full. According to Governor Andrew Bailey, the path for the BoE in 2023 will be easier than in 2022. Inflation is showing signs of slowing down, and the economy looks more resilient than previously thought. As a result, in a favorable scenario, the cycle of tightening monetary policy can be completed earlier. Derivatives are currently seeing a rise in the repo rate from 3.5% to 4.5% by the summer, and the central bank removed the phrase in its latest accompanying statement that it does not agree with the markets. In my opinion, Bailey is disingenuous. Unlike in the USA, where inflation expectations have fallen to 2%, UK's indicator, with a period of 1.2 and 5 years, hovers near the 4% mark, which forces the Bank of England to act aggressively. We are talking about raising the repo rate by 50 bps in February, which creates a comfortable advantage for the GBPUSD. And you can say anything you want. Softer rhetoric allows the economy to feel support from the central bank. Dynamics of inflation expectations in Britain Along with the decline in retail sales, consumer confidence from Gfk fell for the first time in four months. On the other hand, according to the Recruitment and Employment Confederation (REC), 184,000 new job postings were created in January, up a quarter from a year ago. According to REC, this is encouraging. At the beginning of the year, employees usually look for new positions, so an increase in job offers is good news for the economy. The vulnerability of Britain's GDP is perhaps the main problem of the pound. On the contrary, an increase in optimism about the outlook for the global economy, an improvement in global risk appetite, and a slowdown in the Fed's monetary restriction inspire investors with confidence in the continuation of the GBPUSD upward campaign. Indeed, the latest Consensus Economics surveys show that the eurozone will avoid a recession, and JP Morgan market models indicate that the U.S. will not fall into recession either. Add to that the opening of China, and the overall picture starts to play with bright colors. GBP/USD Technically, on the daily chart, the risks of winning back the double top with the GBPUSD pair look much less than the probability of restoring the upward trend. It makes sense to continue buying the pound against the U.S. dollar in the direction of the previously indicated target at 1.256.   Relevance up to 08:00 2023-01-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332957
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

For The First Time Since Last April The EUR/USD Pair Is Above 1.09

Ipek Ozkardeskaya Ipek Ozkardeskaya 23.01.2023 10:20
The week started slowly in Asia, as many markets were closed due to the Chinese New Year holiday. But those that were open benefited from the positive vibes from the US markets last Friday.  US equities rally, led by tech stocks  The S&P500 rallied 1.89% and flirted with the 200-DMA again, and closed the week a stone's throw from the ceiling of the 2022-to-date bearish trend.   Nasdaq did even better. The index rallied 2.86%, boosted by a well-deserved 8.50% rally from Netflix - which not only announced better-than-expected results in the Q4, but also a mouth-watering beat on the subscription growth end, with 7.7 mio new subscribers – a number that we thought we would hear only during a pandemic!   Google, on the other hand, jumped 5.72%, but for a less glamorous reason. The company said it will fire 6% of its workforce, which is around 12'000 jobs globally. Investors heard 'yes, that will clearly improve the cloud profitability!'   In total, Amazon, Microsoft and Google will be cutting 40'000 jobs.   Fed's quiet period  The quiet period for Federal Reserve (Fed) officials will help us digest what has been said over the past weeks.   In summary, we know that the Fed will further slow the size of its rate hikes in the coming months. $  But the fact that the Fed will raise by only 25bp next meeting doesn't mean that it won't continue hiking the rates. The rates will likely go above 5% in the Q1.  Focus on earnings  Microsoft, Johnson&Johnson, General Electric,Texas Instruments, Intel, Tesla Mastercard, Visa, Chevron and American Express are among companies that will go to the earnings confessional this week.  Big Tech earnings projections are down by about 5% since October.   Yet, expectations went sufficiently low that there is plenty of room for a positive surprise, as has been the case with Netflix.   FX & energy  The dollar kicked off the week under pressure. The EURUSD already hit the 1.09 mark early in the session, for the first time since last April, and is just a couple of pips away from the major 50% retracement on 2021-2022 selloff.   PMI data due tomorrow could confirm that the European economies took a softer hit thanks to mild start to the winter, and cheaper energy prices as a result of it.   And sufficiently strong PMI data, combined to the negative pressure in the US dollar into the Fed meeting, could help the EURUSD take a chance on the 1.10 resistance in the coming sessions.   In energy, crude oil posted its second straight week of gains on Friday, as the Chinese reopening story and prospects of higher global demand, and around 1 mbpd gap between supply and demand outweighed the recession fears.   The latest rebound in European nat gas prices, and the fact that we now have cold and snow in Europe could also tilt the balance further to the upside.   The barrel of American crude spent last week above the 50-DMA, now around $78pb, but couldn't clear the 100-DMA, which stands around $82pb.   The next target for the oil bulls is a move above the $82pb, for a potential extension of gains toward the $87/88 range.  
Saxo Bank Podcast: Natural Gas On Colder Weather, Wheat And Coffee Under Pressure, JPY Weaker And More

Saxo Bank Podcast: Natural Gas On Colder Weather, Wheat And Coffee Under Pressure, JPY Weaker And More

Saxo Bank Saxo Bank 23.01.2023 11:41
Summary:  Today we look at Friday's strong resurgence in US equities, which came after a seeming strong rejection of the rally into pivotal levels in the US S&P 500 index. This leaves market technicals in limbo ahead of the blast of earnings reports from large US companies this week and next. We also discuss confusing macro signals as financial conditions continue to ease, although treasury yields have pulled back from their recent slide. Also on the pod: the latest positioning data in commodities markets, natural gas on colder weather, wheat and coffee under pressure, JPY weaker, a look ahead at this week's busy earnings and less busy macro calendar and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next: There Have Been Concerns That Tesla Price Cut Could Trigger A Price War| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Mixed signals ahead of US earnings blast | Saxo Group (home.saxo)
The South America Are Looking For Alternatives To The US Currency

The South America Are Looking For Alternatives To The US Currency

Jakub Novak Jakub Novak 23.01.2023 12:38
Today's announcement that Argentina and Brazil are once again in the early stages of beginning negotiations on the formation of a single currency for financial and commercial activities came as the demand for risky assets continued to increase. The idea of a unified currency will undoubtedly encounter many political and economic challenges. South America The two major economies in South America have been debating ways to coordinate their currencies for many years, frequently as a response to the dominance of the dollar in the area. There has not been much advancement in practice as a result of the ongoing macroeconomic imbalances in both nations and the sporadic political barriers to this concept. In a joint essay published in the Argentine newspaper Perfil on the eve of their meeting on Monday in Buenos Aires, Brazilian Luiz Inacio Lula da Silva and Argentine Alberto Fernandez noted that the development of regional trade can be aided by the exchange of their respective currencies. "By removing obstacles and resolving disputes, we hope to modernize and simplify the regulations governing the promotion of regional currencies. We also choose to keep talking about the idea of establishing a common South American currency that can be used for financial and business transactions, cutting expenses," the declaration read. Many developing nations and markets are looking for alternatives to the US currenc Numerous analysts have remarked that many developing nations and markets are looking for alternatives to the US currency and that Argentina has recently struggled with the highest inflation in more than three decades. It is evident that Brazil's economy, like those of many other nations, will grow slowly this year, but the new Lula administration aims to considerably increase public spending, making it possible for it to keep its election pledges and causing another inflationary spike in the area. It has started by Argentina The conversations were started by Argentina, according to the Brazilian government's delegate. However, they are still in their very early stages, and no completion date has been established. Brazilian Finance Minister Fernando Haddad revealed to reporters in Buenos Aires that Argentina is striving to revive its trade, which has been steadily declining recently owing to high inflation, and that one of the proposals being discussed is a single currency for financial and commercial operations. "Argentina is one of the nations with which we are in communication to develop exports, therefore we are examining several prospects that will allow us to increase trade." Argentine Economy Minister Sergio Massa stated in an interview that Argentina and Brazil will extend invitations to other Latin American nations to join, but he did not want to "offer false hopes" due to the lengthy nature of the two nations' commercial integration. EUR/USD Regarding the technical analysis of EUR/USD, there is still demand for the single currency, and there is a potential that monthly and annual highs will continue to be updated. Staying above 1.0870 will cause the trading instrument to increase to the 1.0930 region, which is what is needed to achieve this. Above this point, you can easily reach 1.0970 and update 1.1000 in the near future. Only the collapse of support at 1.0870 will put more pressure on the pair and drive EUR/USD to 1.0820, with the possibility of dropping to a minimum of 1.0760 if the trading instrument declines. GBP/USD Regarding the technical picture of GBP/USD, the pound's growth is still going strong. Buyers must sustain their advantage by staying over 1.2390. However, only the breakdown of resistance at 1.2440 will make it more likely that the recovery will continue to the 1.2500 region, after which it will be feasible to discuss a more abrupt move of the pound up to the 1.2550 region. After the bears seize control of 1.2390, it is feasible to discuss the pressure on the trading instrument. The GBP/USD will be pushed back to 1.2340 and 1.2250 as a result, hitting the bulls' holdings. Relevance up to 09:00 2023-01-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332979
The USD/JPY Price Seems To Be Optimistic

The Japanese Yen Fell And USD/JPY Reached Level Of 130, The EUR/USD Pair Lost Its 1.09 Level And Agian Is Around 1.0880

Kamila Szypuła Kamila Szypuła 23.01.2023 13:44
The US dollar fell today on the possibility of less aggressiveness from the Fed. Poor trading conditions are likely to continue as many major hubs in Asia are closed for Lunar New Year celebrations. Two very important data will be published in the US this week: first look at US GDP in Q4 on Thursday followed by Core PCE on Friday. USD/JPY The Japanese yen fell towards 130 to the dollar, moving further back from multi-month highs as the Bank of Japan remains committed to its ultra-low interest rate policy despite rising inflation and increasing market pressure. Last week, the central bank countered speculation about another policy adjustment by keeping interest rates very low and leaving its yield control policy unchanged. Meanwhile, traders are eyeing the BOJ meeting in March for a potential move as well as April when a new BOJ governor will step in. The USD/JPY pair started the week below 129.50, but rose quickly and passed the 130.00 level. At the time of writing, USD/JPY is trading at 130.3640. EUR/USD The euro hit a nine-month peak against the dollar on Monday as comments on European interest rates signalling additional jumbo rate rises contrasted with market pricing for a less aggressive Federal Reserve. The euro is also being supported by an easing of recession fears amid a fall in natural gas prices. ECB Governing Council member Klaas Knot said on Sunday: "expect us to raise rates by 0.5% in February and March, and that we will not be done by then, and the next steps will be taken in May and June." His colleague Olli Rehn he noted that he saw grounds for significant interest rate hikes. The ECB's hawkish expectations coupled with increased bets on a slowdown in the pace of US Federal Reserve (Fed) tightening are helping to reduce the monetary policy divergence between the two central banks, which in turn favors the EUR/USD pair's rally. EUR/USD pair has lost its traction and pulled away from the multi-month it set above 1.0900 earlier in the day. Read next: British Pub Earnings Will Suffer Significantly| FXMAG.COM GBP/USD Economic affairs in the UK are somewhat calmer with attention being paid to the current round of industrial action hitting the UK and the perceived unfreezing of UK-EU relations. The British currency recently fell 0.32% to $1.2359 and lost more against the euro. The core CPI, which excludes energy, food, alcohol and tobacco and which some economists consider a better guide to inflation trends, remained unchanged at 6.3%. Market prices point to a 70% chance of a 50 basis point rate hike at the Bank of England's February meeting. Sterling pulled back from a seven-month high against the dollar on Monday, which hit during the Asian hours. GBP/USD turned and fell towards 1.2350 during the European trading hours on Monday. AUD/USD The RBA did not rule out another rate hike at its February meeting as mentioned in previous minutes and remains divided between no change and a 25 basis point increase, Wednesday's inflation printout could bring more clarity. On a positive note for the Australian dollar, commodity prices are projected to remain elevated throughout 2023, mainly based on China reopening and coal exports to European countries. AUD/USD is hovering around 0.6980-85, defending early week gains on a weak Monday morning in Europe. The pair of the Australian failed to stay above $0.70, but is trading close to this level, so a re-breakout cannot be ruled out. Source: investing.com, finance.yahoo.com
Bank of Japan to welcome Kazuo Ueda as its new governor

The BoJ Is Projecting That Inflation Will Peak At 3% In March

Kenny Fisher Kenny Fisher 23.01.2023 14:14
The Japanese yen has edged lower on Monday. In the European session, USD/JPY is trading at 130.15, up 0.45%. The yen slipped 1.3% against the dollar last week, falling as low as 131.57 before recovering. Inflation heads higher Core CPI jumped 4.0% y/y in December, its highest level since 1981. This matched the forecast and followed a 3.7% gain in November. The usual suspects were at play, as food and energy prices rose sharply. Energy prices climbed 15.2%, while food prices were up 7.4%, the fastest pace since 1977. Core CPI has exceeded the BoJ’s 2 percent inflation target for nine straight months, as the central bank’s argument that inflation is transitory has become increasingly hard to defend.  The BoJ is projecting that inflation will peak at 3% in March, but it’s unclear why inflation will start to fall, barring a complete turnaround in energy and food prices. With wage growth lagging behind inflation, the cost of living is squeezing consumers, who are likely to cut back on consumption which will hamper economic growth. We’ll get another look at inflation on Tuesday, with the release of the central bank’s preferred inflation gauge, BoJ Core CPI. The index rose steadily in 2022, from just 0.8% in January to 2.9% in November. The consensus for December is unchanged but a reading of 3.0% or higher will put pressure on the BoJ to tighten policy, which would be bullish for the yen. The BoJ surprised the markets last week when it maintained policy settings at its monthly meeting. The non-move may have been primarily aimed as an ambush on speculators who bought yen in anticipation of the BOJ tightening policy. Still, the markets are expecting a shift in the BoJ’s ultra-loose policy, although it could occur after the new governor takes over in April. What is clear is that the BoJ will continue to command the attention of traders. The BoJ’s next meeting is on March 8th.   USD/JPY Technical There is resistance at 130.67 and 131.69 129.46 and 128.41 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The USD/JPY Price Seems To Be Optimistic

The First Outlook Of The Day Of The USD/JPY Pair Situation

InstaForex Analysis InstaForex Analysis 24.01.2023 08:00
On the daily chart, the price is close to the upper limit of the downtrend price channel of green color (130.70). The Marlin oscillator is in the positive territory, so the main scenario assumes that the price overcomes this resistance and an attempt to further growth to the upper line of the price channel of blue color in the area of its intersection with the MACD line, near the 133.60 mark. There is a small divergence on the four-hour chart. If the reversal develops, i.e. if it overcomes the support of the MACD line (129.40), then the signal line of the oscillator may return to negative territory. Further, falling to the lower line of the global price channel, to the area of 127.27 (daily) is likely.   Relevance up to 03:00 2023-01-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333043
The Pound Is Now Openly Enjoying A Favorable Moment

There Is A Small Chance Of The Price Of The GBP/USD Pair Reversal

InstaForex Analysis InstaForex Analysis 24.01.2023 08:01
The fourth day of price consolidation before the resistance at 1.2420 begins. Settling above this mark will allow the price to continue rising to the target level of 1.2598. Only if the nearest resistance of the embedded price channel line does not interfere, which is marked on the daily chart by the lilac dotted line (resistance 1.2475). The Marlin oscillator is turning down a bit - there is a small chance of the price reversal from 1.2420 to the downside. On the four-hour chart, let's look at the details. There is an uptrend, it will be strengthened by the price settling above 1.2420. The opposite situation, a downtrend, may occur when the price is below the MACD indicator line, below 1.2320. The Marlin oscillator has moved into the bulls' area, respectively, growth is more likely Relevance up to 03:00 2023-01-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333045
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Upward Trend Of The EUR/USD Pair Is Still Present

InstaForex Analysis InstaForex Analysis 24.01.2023 08:03
Investors are stubbornly buying stock market instruments and bringing confusion to the related currency market. Yesterday, the S&P 500 gained 1.19% and the euro gained 15 pips. There is a double divergence on the daily chart, but the market's desire to change this technical pattern is obvious. The 1.0990 target is getting closer. The eurozone business activity indicator for January will be released this afternoon, the forecast is 50.2 points against 49.8 in December. In the US, this indicator may also show growth (the forecast is 45.0 vs. 44.7 previously), but manufacturing PMI is expected to weaken to 46.0 from 46.2 in December, while in Germany the Manufacturing PMI is expected to rise to 47.9 from 47.1. The euro can take advantage of this divergence. On the four-hour chart, the upward trend is still present - the price is above the indicator lines and the Marlin is in a rising position. The closest signal to a downtrend will be when the price crosses the support of the MACD line, below 1.0824 Relevance up to 03:00 2023-01-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333047
The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

The EUR/USD Prices Should Ideally Stay Below The 1.0926 High And Turn Lower

Oscar Ton Oscar Ton 24.01.2023 08:05
Technical outlook: EURUSD carved an intraday high at 1.0926 on Monday before reversing sharply to 1.0850 during the New York session. The single currency pair has pulled back since then and is trading close to 1.0880 at this point in writing.Prices should ideally stay below the 1.0926 high and turn lower towards the 1.0770 initial support on lower timeframes. It would confirm that the bears are back in control. EURUSD might be extremely close to resuming lower towards 0.9535 and further. The large-degree corrective rally, which began from 0.9535, looks complete and calls for a turn lower from current levels. If not a trend reversal, we can expect a meaningful correction towards 1.0370 and 1.0050 levels going forward. A break below 1.0480 adds to further confidence in the bearish move. EURUSD faces strong resistance around the 1.0900-1.1000 zone as marked on the daily chart. The bears will remain inclined to be back in control and drag prices lower towards 1.0370 in the near term. Also, note that 1.0050 is the Fibonacci 0.618 retracement of the above rally between 0.9535 and 1.0926 levels. Hence, the probability remains high for a bullish reversal if prices drop to those levels. Trading idea: Potential bearish move against 1.1000 Good luck!     Relevance up to 04:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309715
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange More Securities Rose In Prices

InstaForex Analysis InstaForex Analysis 24.01.2023 08:10
At the close of the New York Stock Exchange, the Dow Jones rose 0.76%, the S&P 500 rose 1.19%, and the NASDAQ Composite rose 2.01%. Dow Jones Shares of Intel Corporation led the way among the components of the Dow Jones index today, up 1.05 points or 3.59% to close at 30.27. Salesforce Inc rose 4.62 points or 3.05% to close at 155.87. Apple Inc rose 2.35% or 3.24 points to close at 141.11. The least gainers were Procter & Gamble Company, which shed 1.92 points or 1.34% to end the session at 141.05. Verizon Communications Inc was up 0.93% or 0.37 points to close at 39.63 while Amgen Inc was down 0.86% or 2.27 points to close at 260. 97. S&P 500 Leading gainers among the components of the S&P 500 in today's trading were Advanced Micro Devices Inc, which rose 9.22% to hit 76.53, Western Digital Corporation, which gained 8.66% to close at 41.79. as well as shares of Tesla Inc, which rose 7.74% to end the session at 143.75. The least gainers were Xylem Inc, which shed 7.95% to close at 101.42. Shares of SBA Communications Corp shed 3.55% to end the session at 286.27. Schlumberger NV fell 2.60% to 55.86. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Gbs, which rose 293.13% to hit 1.03, Helbiz Inc, which gained 109.13% to close at 0.43, and VERB TECHNOLOGY COMPANY INC, which rose 69.65% to end the session at 0.39. The least gainers were Catalyst Pharmaceuticals Inc, which shed 29.04% to close at 14.76. Shares of Atlis Motor Vehicles Inc shed 25.11% to end the session at 3.40. Quotes of Ontrak Inc decreased in price by 21.23% to 0.83. Numbers On the New York Stock Exchange, the number of securities that rose in price (2196) exceeded the number of those that closed in the red (841), while quotes of 122 shares remained virtually unchanged. On the NASDAQ stock exchange, 2362 companies rose in price, 1346 fell, and 201 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.20% to 19.81. Commodities Gold futures for February delivery added 0.23%, or 4.35, to hit $1.00 a troy ounce. In other commodities, WTI crude for March delivery rose 0.01%, or 0.01, to $81.65 a barrel. Futures for Brent crude for March delivery rose 0.57%, or 0.50, to $88.13 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.15% to 1.09, while USD/JPY rose 0.84% to hit 130.65. Futures on the USD index rose by 0.01% to 101.79. Relevance up to 04:00 2023-01-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/309717
FX Daily: Asymmetrical upside risks for the dollar today

The Bulls Of The US Dollar Index Will Remain Poised To Come Back In Control

Oscar Ton Oscar Ton 24.01.2023 08:18
Technical outlook: The US dollar index rose through the 101.85 high during the New York session on Monday before finding some resistance. The index has pulled back a bit and is seen to be trading close to 101.60 at this point in writing. A break above 102.20 and subsequently 102.40-50 will confirm that the bulls are back in control with a meaningful bottom in place at 101.00-20. The US dollar index might have completed its larger-degree corrective decline, which had begun from the 114.70 high in September 2022. Both the Fibonacci extensions have been met as seen on the 4H chart here. Furthermore, the index has not printed another low below its January 18 low at 101.11; while its counterpart EURUSD printed a shallow high. The above phenomenon can be considered a bullish divergence for the US dollar index. The bulls will remain poised to come back in control as long as prices stay above 101.11. Immediate price resistance is seen at 105.35 on the 4H chart and a break higher will confirm a meaningful bottom in place and that the bulls are back in control. Trading idea: Potential bullish turn against 101.00. Good luck! Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309719
The Price Of EUR/USD Pair Will Develop Sideways Movement

Analysis Of The Chart Of The Euro To US Dollar Pair

Torben Melsted Torben Melsted 24.01.2023 08:21
Relevance up to 06:00 2023-01-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309727
Apple Q3 2023 Results – Surpassing Expectations and Aiming for New Heights

The EUR/GBP Pair Looks Set For The Next Challenge Key Resistance

Torben Melsted Torben Melsted 24.01.2023 08:23
EUR/GBP has been consolidating within a rectangle since early October 2016 and looks set for the next challenge key resistance at 0.9306. A break above here should confirm the rally towards 1.0500. Short-term we are looking for EUR/GBP to break above minor resistance at 0.8786 and more importantly resistance at 0.8805 as confirmation that the next impulsive rally higher towards 0.9305 is in motion and ultimately a break above key resistance at 0.9306 is expected for a continuation higher towards 1.0500. Read next:British Pub Earnings Will Suffer Significantly| FXMAG.COM Relevance up to 06:00 2023-01-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309729
EUR/USD Pair Has Potential For The Downside Movement Today

The Upward Movement Of The EUR/USD Pair May Persist In The Near Future

Paolo Greco Paolo Greco 24.01.2023 08:26
M5 chart of EUR/USD EUR/USD did not show any particularly interesting movements on Monday. The pair was rising at night, falling at the European trading session, staying flat at the US one. The only event that was interesting was a formal one. The new speech of European Central Bank President Christine Lagarde, who will speak five times in two weeks, did not give any new information. Lagarde basically said everything she could last week. She made it clear that the ECB's monetary approach will not be adjusted in the coming months, the rate will continue to rise at 0.5% for at least two more meetings. So there was nothing for traders to react to. There will not be many interesting events this week, but it absolutely does not mean that the price will stand in one place and wait for the Federal Reserve and ECB meetings, which will take place next week. Thus, for the time being, technique is top priority. There were no signals on Monday. During the US trading session, the pair fell to 1.0868 and the critical line, which together formed a support area. However, EUR did not rebound or cross this mark so there were no signals. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 10,300, whereas the number of short positions fell by 2,300. Thus, the net positions decreased by 8,000. Now the number of long positions is higher than the number of short positions opened by non-commercial traders by 127,000. From a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 52,000 (711,000 vs. 659,000). Read next: The Japanese Yen Fell And USD/JPY Reached Level Of 130, The EUR/USD Pair Lost Its 1.09 Level And Agian Is Around 1.0880 | FXMAG.COM H1 chart of EUR/USD EUR/USD maintains a bullish sentiment on the one-hour chart, staying above the lines of the Ichimoku indicator. Thus, the upward movement may persist in the near future, despite the flat last week. As we can see, there is still no way for the euro to correct, and traders prefer to buy the pair or not to do anything at all. On Tuesday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137 and also Senkou Span B lines (1.0679) and Kijun Sen (1.0845). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 24, Lagarde will deliver a speech in the EU, but the market has already shown that it already has all the necessary information and is not ready to work out all of Lagarde's speech. Traders will pay more attention to the indexes of business activity in the services and manufacturing sectors in the US and EU but those are not very important either. The market will only react to these reports if the results significantly deviate from the forecasts. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 06:00 2023-01-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333053
The Market May Continue To Buy The Pound (GBP) This Week

The Market May Continue To Buy The Pound (GBP) This Week

Paolo Greco Paolo Greco 24.01.2023 08:31
M5 chart of GBP/USD GBP/USD corrected a bit on Monday, but it was more of a usual downward pullback than a correction, which is clearly visible on the one-hour chart. The pair failed to cross 1.2429 for the second time, but it does not make much sense, because the pair cannot go for a new round of bearish correction either. The price is still above the Ichimoku indicator, and there is nothing to analyze on Monday, because there were no interesting events either in the US or the UK. Basically, the market continues to be guided by only one factor - the factor of divergence reduction between the rates of Bank of England and the Federal Reserve. The market expects the Fed rate to slow down and the BoE rate to continue to rise at the same rate. We doubt that the British central bank is capable of raising the rate even higher, but the market believes in that outcome for now, so it continues to buy the pound in general, rather than the other way around. Since most of the past day the pair's quotes were moving in the same direction, we got some interesting signals. At the beginning of the European session, the price rebounded from 1.2429 twice, after which it went down to 1.2342. These signals should have been covered by a short position, and the position could have been closed when the price settled above 1.2342. The profit on this deal was about 60 pips. You could have also used the buy signal near 1.2342, and it proved to be profitable. The deal should have been closed manually closer to the evening, the profit was about 20 points. Read next: The Japanese Yen Fell And USD/JPY Reached Level Of 130, The EUR/USD Pair Lost Its 1.09 Level And Agian Is Around 1.0880 | FXMAG.COM COT report The latest COT report showed an decrease in bearish sentiment. During the given period, non-commercial traders opened 5,500 long positions and as many as 700 short positions. Thus, the net position increased by 4,800. This figure has been on the rise for several months, and the sentiment may become bullish in the near future, but it hasn't yet. Although the pound has grown against the dollar for the last few months, from a fundamental perspective, it is difficult to answer why it keeps rising. On the other hand, it could fall in the near future (in the mid-term prospect) because it still needs a correction. In general, in recent months the COT reports correspond to the pound's movements so there shouldn't be any questions. Since the net position is not even bullish yet, traders may continue to buy the pair over the next few months. Non-commercial traders now hold 41,500 long positions and 66,000 short ones. I remain skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD is still trading in an uptrend and continues to settle above the lines of the Ichimoku indicator. Thus, the market may continue to buy the pound this week, when the fundamental and macroeconomic background will be quite scarce. But market participants have repeatedly shown that they are willing to buy the pair for no particular reason. On January 24, the pair may trade at the following levels: 1.2106, 1.2185, 1.2288, 1.2342, 1.2429-1.2458, 1.2589, 1.2659. The Senkou Span B (1.2260) and Kijun Sen (1.2351) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Tuesday, manufacturing and services sector business activity indexes will be released in the US and the UK, but it is not the most important data. We are not interested in the market reaction of 20-30 points. We already see such a movement every day even without important reports. We can only count on a stronger reaction if the values of the reports are surprising. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 06:00 2023-01-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333057
Hang Seng Index Plummets -2% Amid Weak China Data, Short-Term Trend Intact

Analysis Of The Scenario Of The EUR/GBP Cross Pair

InstaForex Analysis InstaForex Analysis 24.01.2023 08:35
If we look at the 4 hour chart, We can scan the EUR/GBP cross currency pair for the appearance of: 1. The Deviation between EUR/GBP price movement with CCI indicator. 2. The appearance of Bulllish 123 pattern followed by the appearance of Ross Hook (RH). From the two things above, it can be seen that EUR/GBP is trying to break above the 0.8814 level. If it is successfully penetrated above, the first target to aim for is 0.8846 and 0.8872 as the second target, but if on its way to these level targets, suddenly EUR/GBP drops below the level of 0.8743, It can be sure that the bull scenario described earlier will cancel itself.   Relevance up to 06:00 2023-01-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/118061
Nasdaq 100 Faces Bearish Breakdown Below Ascending Wedge and RSI Momentum Indicator

Analysis Of The Scenario Of The US Dollar Index

InstaForex Analysis InstaForex Analysis 24.01.2023 08:40
On the 4-hour chart the US Dollar Index appears to be moving in a bearish channel and is below the Moving Average so that in the near future #USDX has the potential to continue its decline below the 101.50 level as the main target and 101.27 as the second target, but if before succeeding to the target levels mentioned earlier, suddenly #USDX reverses upwards and breaks above the 102.87 level, the downside scenario described earlier will cancel itself.   Relevance up to 06:00 2023-01-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/118063
Analysis Of The USD/CHF Pair Movements

Analysis Of The USD/CHF Pair Movements

TeleTrade Comments TeleTrade Comments 24.01.2023 08:54
USD/CHF prints mild losses during the first daily fall in three. Mixed sentiment, pre-data anxiety joins China-linked optimism to weigh on USD/CHF prices. US inflation expectations, hawkish central banks keep the buyers hopeful. Off in China, Fed’s blackout restrict immediate moves but US PMIs, Q4 GDP are more important for clear directions. USD/CHF sellers return to the table, after a two-day absence, in early Tuesday. That said, the Swiss currency (CHF) pair’s latest weakness could be linked to the market’s consolidation amid a cautious mood ahead of the key data/events from Switzerland and the US. Also keeping the sellers hopeful could be the broad US Dollar weakness amid cautious optimism and sluggish performance. That said, China’s Lunar New Year holidays join the pre-Federal Open Market Committee (FOMC) blackout period for the Fed policymakers to restrict the market’s immediate moves. Even so, the US Dollar fades from the previous day’s corrective bounce as softer US data on Monday backed dovish bias from the US central bank. On Monday, softer prints of the US Conference Board’s Leading Index for December joined the lines of previous downbeat data from the US and signaled to ease inflation fears in the world’s largest economy, which in turn suggests less need for the Fed to be hawkish in February. It’s worth noting that the market players do expect a softer Fed rate hike in February and policy pivot afterward, which in turn weigh on the US Dollar. Alternatively, the US inflation expectations, as per the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED) data, rise for the third consecutive day to 2.28% each and justify the pre-blackout hawkish Fed comments and challenge the sentiment. Furthermore, news that the US confronts China over companies’ ties to the Russian war effort, shared by Bloomberg, joins the talks surrounding the US debt ceiling in the Senate to probe the market optimists. Amid these plays, the S&P 500 Futures resist following Wall Street’s gains while retreating from the six-week high marked the previous day, making rounds to 4,030-35 at the latest. On the same line, the US 10-year and two-year Treasury bond yields snap three-day recovery moves by struggling around 3.51% and 4.21% by the press time. Given the USD/CHF pair’s consolidation amid mixed clues, the upcoming Swiss trade numbers for December and the first readings of January’s S&P Global PMIs for the US will be important for intraday traders. However, major attention will be given to the US fourth-quarter (Q4) Gross Domestic Product (GDP) will be the key amid recession woes. Should the US data keep coming softer, the US Dollar could refresh the multi-month low marked earlier in January, which in turn will weigh on the USD/CHF prices. Technical analysis A 12-day-old bearish channel restricts USD/CHF moves between 0.9035 and 0.9270.  
Rates Spark: Action at Both Ends of the Curve - US 10yr Treasury Yield and European Rates

The USD/INR Pair Is Expected A Further Upside Movement

TeleTrade Comments TeleTrade Comments 24.01.2023 09:01
USD/INR remains firmer for the second consecutive day, grinds near intraday top. Successful break of three-week-old descending trend line, upbeat oscillators suggest upside break of 100-DMA. Previous support line from early August 2022 acts as the last defense of USD/INR bears. USD/INR holds onto the week-start breakout of the previously key resistance line as bulls flirt with the 81.65 level during an initial hour of the Indian trading session on Tuesday. Even so, the 100-DMA challenges the immediate upside moves near 81.80. It’s worth noting, however, that the receding bearish bias of the USD/INR and the upbeat RSI (14) suggest further upside of the pair. Hence, the quote is likely to overcome the immediate barrier to the north near 81.80. Following that, the 82.00 round figure will be the focus of the USD/INR buyers. In a case where USD/INR remains firmer past 82.00, the support-turned-resistance line from early August, near 82.10 at the latest, will be crucial to watch as a sustained break of which might give control to the bulls. On the flip side, the immediate support line from January 06, the previous resistance near 81.40, puts a floor under the USD/INR declines. Should the quote remains weak past 81.40, the 81.00 round figure and the monthly low marked on Monday close to 80.90 may entertain the USD/INR bears. If at all the Indian Rupee (INR) pair refreshes it's monthly low, November’s trough surrounding 80.35 should be in the spotlight. USD/INR: Daily chart Trend: Further upside expected
Further Upward Price Movement Of The AUD/USD Pair Is Expected

China’s Reopening Could Boost Australia’s Economy

TeleTrade Comments TeleTrade Comments 24.01.2023 09:03
AUD/USD is struggling to extend gains above the immediate resistance of 0.7040. Reserve Bank of Australia might continue its restrictive monetary policy despite a contraction in economic activities. Federal Reserve is highly likely to decelerate the pace of policy tightening to 25 bps amid softening inflation. AUD/USD is expected to continue its upside momentum broadly as momentum oscillators are supporting the Australian Dollar. AUD/USD has sensed selling interest while attempting to surpass the immediate resistance of 0.7040 in the Asian session. The Aussie asset is witnessing heat after the release of the downbeat preliminary Australian S&P PMI (Jan) data in early Tokyo. Also, a recovery in the US Dollar Index (DXY) has triggered volatility in the Aussie asset. The US Dollar Index has recovered after dropping to near 101.50. The USD Index has refreshed its day’s high at 101.61 as investors are supporting the safe-haven assets again amid a decline in the demand for US government bonds. The 10-year US Treasury yields have recaptured the critical resistance of 3.52%. Meanwhile, the S&P500 futures are aiming to recover their morning losses. The 500-US stock basket futures witnessed significant buying interest on Monday amid rising chances of further deceleration in the pace of policy tightening by the Federal Reserve (Fed). Australian Manufacturing PMI trims straight for seven month According to the preliminary S&P PMI (Jan), Australian Manufacturing PMI has trimmed consecutively for the seven-month to 49.8 while the street was expecting an expansion to 50.3. Also, the Services PMI has dropped vigorously to 48.3 from the consensus of 49.7. Rising interest rates by the Reserve Bank of Australia (RBA) in its fight against stubborn inflation are leading to a contraction in economic activities. The absence of easy money for firms to execute investment and expansion plans along with bleak economic demand has trimmed the scale of economic activities. Australian economic activities could recover ahead as China is on the path of recovery now after dismantling Covid-inspired lockdown curbs. According to a note from JPMorgan, Australia’s economy could be no small beneficiary of an end to China’s zero-Covid policy over the next two years. Also, China’s reopening could boost Australia’s economy by 1%. Investors await Australian Inflation for further guidance This week, investors will keenly focus on the release of the Australian Consumer Price Index (CPI) data for the fourth quarter of CY2022, which is scheduled for Wednesday. According to the estimates, the annual CPI is expected to escalate further to 7.5% from the prior release of 7.3%. While monthly inflation is seen sharply higher at 7.7% from the former release of 7.3%. A release of the unchanged or higher-than-anticipated Australian inflation data might force the Reserve Bank of Australian Governor Philip Lowe to hike its Official Cash Rate (OCR) further. It is worth noting that the Reserve Bank of Australia is continuously hiking the interest rates to trim inflation, however, the energy prices are continuously ruining the whole plan. Australian Treasurer Jim Chalmers cited that the worst part of the country's inflation crisis was over. He believes "The Australian economy will begin to soften a bit this year and that is the inevitable likely consequence of higher interest rates and a slowing global economy.” Federal Reserve to trim the pace of restrictive policy further Multiple catalysts belonging to the United States are conveying that inflation is softening further. Firms have been forced to release fewer employment opportunities due to the lower Producer Price Index (PPI) amid bleak economic projections. Also, US Treasury Secretary Janet Yellen cited on Monday that overall, she has a “good feeling that inflation is coming down.” This has further accelerated the odds of 25 basis points (bps) interest rate hike by the Federal Reserve (Fed) in its February monetary policy meeting. According to the CME FedWatch tool, the odds of a 50 bps interest rate hike have vanished significantly. More than 98% chances are favoring a 25 bps interest rate hike by Federal Reserve chair Jerome Powell. It is worth noting that the Federal Reserve has already trimmed the scale of hiking interest rates after four consecutive 75 bps interest rate hikes to 50 bps in its December monetary policy meeting. AUD/USD technical outlook AUD/USD is marching towards the five-month high plotted from January 18 high at 0.7064 on an hourly scale. The Aussie asset displayed a V-shape recovery from January 19 low around 0.6875, which provides confidence that bullish momentum is present in the current trend. The 20-period Exponential Moving Average (EMA) around 0.7020 is constantly providing cushion to the Australian Dollar. Also, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates that the upside momentum is solid
The USD/CAD Pair Is Likely To Remain On The Bear’s Radar

The Loonie Pair (USD/CAD) Cheers The Broad US Dollar Weakness

TeleTrade Comments TeleTrade Comments 24.01.2023 09:07
USD/CAD fades bounce off intraday low during four-day downtrend. Oil price struggles to defend gains amid mixed concerns. Hawkish hopes of Bank of Canada, talks surrounding Fed policy pivot keep sellers hopeful. Preliminary readings of US S&P Global PMIs for January will be crucial ahead of BoC interest rate decision. USD/CAD slides to 1.3350 as bears keep the reins for the fourth consecutive day heading into Tuesday’s European session. In doing so, the Loonie pair cheers the broad US Dollar weakness, as well as a slow grind to the north in prices of Canada’s key export item, namely WTI crude oil, ahead of monthly activity data from the US. It’s worth noting that Wednesday’s Bank of Canada (BoC) monetary policy decision will be eyed closely by the pair traders amid talks surrounding a policy pivot. That said, WTI crude oil pares intraday gains near $81.70 after a softer start to the week. Even so, black gold remains around the seven-week high amid hopes of China-linked demand. It should be observed that the latest talks surrounding the US readiness to use Special Petroleum Reserves (SPR) in the need weigh on the quote. Elsewhere, the struggles between the US and China surrounding the Beijing-based companies’ ties to the Russian war effort join the fears of economic recession to weigh on the market sentiment and probe USD/CAD bears. Though, mixed figures of the Canadian housing data published the previous day joined the downbeat US Conference Board’s Leading Index and put a floor under the prices. On a broader front, the absence of Fed policymakers’ talks ahead of the February meeting and the Lunar New Year holidays in China restricts the market moves, as well as limit USD/CAD pair’s momentum. Amid these plays, the S&P 500 Futures resist following Wall Street’s gains while retreating from the six-week high marked the previous day, making rounds to 4,030-35 at the latest. On the same line, the US 10-year and two-year Treasury bond yields snap three-day recovery moves by struggling around 3.51% and 4.21% by the press time. To break the monotony, USD/CAD traders may take clues from the first readings of January’s S&P Global PMIs and the fourth-quarter (Q4) Gross Domestic Product (GDP). However, major attention will be given to Wednesday’s BoC where the Canadian central bank is up for 0.25% rate hike. More importantly, hints for further rate hikes will be closely observed to determine further downside bias for the Loonie pair. Technical analysis Having failed to cross the 100-DMA, around 1.3515 by the press time, the USD/CAD bears poke a 10-week-old support line, near 1.3340 at the latest, to confirm further downside of the Loonie pair.
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

The Kiwi Pair (NZD/USD) Has Picked Strength

TeleTrade Comments TeleTrade Comments 24.01.2023 09:16
NZD/USD has overstepped the 0.6500 resistance amid a cheerful market mood. The New Zealand Dollar is driving the Kiwi asset towards the upper portion of the Rising Channel. An oscillation in the bullish range by the RSI (14) indicates more upside ahead. The NZD/USD pair surpassed the psychological resistance of 0.6500 in the early European session. The kiwi asset has picked strength as the US Dollar Index (DXY) has witnessed immense pressure after failing to recapture Monday’s high at 101.87. The USD Index has refreshed its day’s low at 101.47, portraying a risk appetite theme in the market. The S&P500 futures have managed to recover their morning losses and have turned positive. Meanwhile, the 10-year US Treasury yields are struggling at around 3.52%. NZD/USD is marching towards the upper portion of the Rising Channel chart pattern placed on a two-hour scale. The upper portion of the Rising Channel is placed from December 28 high at 0.6356 while the lower portion of the chart pattern is plotted from January 6 low at 0.6190. The 20-period Exponential Moving Average (EMA) at 0.6464 is acting as a major support for the New Zealand bulls. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates that the upside momentum is firmer. For an upside move, the asset needs to surpass Wednesday’s high at 0.6530, which will drive the asset toward June 3 high at 0.6576. A breach of the latter will expose the asset to the round-level resistance at 0.6600. On the flip side, a breakdown below January 16 high at 0.6426 will drag the Kiwi asset toward January 17 low at 0.6366 followed by January 12 low around 0.6300. NZD/USD two-hour chart  
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The Broader Risk Sentiment Will Influence The Safe-Haven Japanese Yen (JPY)

TeleTrade Comments TeleTrade Comments 24.01.2023 09:19
GBP/JPY retreats from a nearly four-week high touched on Monday, though lacks follow-through. A combination of factors revives demand for the safe-haven JPY and exerts pressure on the cross. Expectations that elevated UK CPI might force the BoE to continue raising rates helps limit losses. The GBP/JPY cross comes under some selling pressure on Tuesday and erodes a part of the overnight gains to a nearly four-week high. The cross remains depressed around the 161.25-161.30 area through the early European session and for now, seems to have snapped a six-day winning streak. A combination of factors assists the Japanese Yen to regain some positive traction and stall its recent corrective decline, which, in turn, is seen weighing on the GBP/JPY cross. Despite the Bank of Japan's decision last week to leave its policy settings unchanged, investors seem convinced that a shirt in stance is inevitable amid stubbornly high inflation. The bets were lifted after the latest CPI report from Japan showed that consumer inflation rose to a 41-year high level of 4% in December. Apart from this, worries about a deeper global economic downturn further underpin the JPY's relative safe-haven status against its British counterpart. Read next: The Japanese Yen Fell And USD/JPY Reached Level Of 130, The EUR/USD Pair Lost Its 1.09 Level And Agian Is Around 1.0880 | FXMAG.COM The downside for the GBP/JPY cross, meanwhile, seems limited amid speculations that elevated consumer inflation will maintain pressure on the Bank of England (BoE) to continue raising interest rates. In fact, the UK Office for National Statistics reported last week that the core CPI in the UK stayed at 6.3% in December or more than three times the BoE's 2% target. Furthermore, the emergence of fresh selling around the US Dollar benefits the British Pound, which might hold back traders from placing aggressive bearish bets. This, in turn, warrants some caution before positioning for an extension of the intraday depreciating move. Market participants now look forward to the release of the flash UK PMI prints for January for some impetus. Apart from this, the broader risk sentiment will influence the safe-haven JPY and contribute to producing short-term trading opportunities around the GBP/JPY cross. Bulls, meanwhile, are likely to wait for some follow-through buying beyond the 161.75-161.80 area, above which spot prices could aim to test the late December swing high, around the 162.30-162.35 region. The momentum could get extended further towards the 163.00 mark en route to the 100-day SMA, which coincides with the 164.00 horizontal support breakpoint near the 164.00 level.
US CPI Surprises on the Upside, but Fed Expectations Unchanged Amid Rising Recession Risks

Layoff In Spotify, AUD/USD Pair Has Traded Back Above 0.7000

Saxo Bank Saxo Bank 24.01.2023 09:43
Summary:  US equities sprinted to new local highs yesterday, with the S&P 500 crossing back above the 200-day moving average ahead of the heart of earnings season set to swing in motion today on Microsoft and other large companies reporting, with the earnings calendar heavy through next week. The US dollar trades weaker across the board as the Fed enters its quiet period ahead of next week’s FOMC meeting.   What is our trading focus? Equities: Momentum is building with breakout in technology stocks US equities rose yesterday with S&P 500 futures reaching their highest close since mid-December and Nasdaq 100 futures rallied all the way to 12,000 before closing a bit lower. Sentiment is improving on technology stocks due to the significant layoff announcements improving the outlook for profitability. The US leading indicators were weaker than estimated and the level observed fits with a high degree of certainty of a recession, so it feels like the equity market is balancing on a knife-edge. Today is an important earnings session with the key focus being Microsoft after the market close, but ahead of the market open earnings from industrials such as GE and 3M will set the tone on the opening. FX: USD falters again as risk sentiment bulls higher The greenback has traded weaker since yesterday, although yesterday’s high water mark in EURUSD above 1.0900 yesterday has not yet been surpassed as the USD weakness was more pronounced against more pro-cyclical currencies like AUD and SEK within the G10 on the strong surge in risk sentiment, even as the anticipation of Fed rate cuts for late this year and through next year has eased significantly (about 30 basis points for the policy rate priced by end of 2024 from the trough of late last week). The Fed has entered a quiet period ahead of next Wednesday’s FOMC meeting, with little data in the interim save for the December PCE inflation data this Friday. Elsewhere, New Zealand and Australia report Q4 CPI tonight in the Asian session and a Bank of Canada decision is up tomorrow (see preview below). Crude oil (CLH3 & LCOH3) supported by firm diesel prices ahead of sanctions Europe’s diesel market reached a two-month high on Monday with the ICE gasoil (FPc1) contract trading above $1000 per ton. A development being driven by EU’s ban on seaborne imports of Russian fuel products from February 5, and increased demand for jet fuel as travel continues to recover. Overall, the focus stays with China amid hopes of a recovery in fuel demand more than offsetting potential weakness in the US as economic data points to slowdown. National holidays across Asia, especially in China and Singapore kept trading to a minimum. In Brent, traders will now be looking for $90 next while support is in the $84 area. Gold trades higher on US recession concerns Gold reached a fresh nine-month high overnight after US leading indicators saw another sharp fall in December, and together with weak company earnings and layoffs and last week's weak retails sales it raises the risk of a US recession in the near term. A senior director at The Conference Board said: “Overall economic activity is likely to turn negative in the coming quarters before picking up again in the final quarter of 2023”. Developments that raises the potential for just one more US rate hike before the FOMC decides to pause. ETF holdings, which has been drifting lower this month finally saw a small pickup in demand while silver’s plunge remains a concern. At one point on Monday, it dropped 5% on technical selling and long liquidation below $23.20 before recovering to trade $23.60 this am. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) yields continue to edge higher US treasuries continue to soften, taking yields modestly higher after the 10-year benchmark’s move below the prior significant 3.40% low was rejected. This morning sees the 10-year benchmark trading back above 3.50% with company earnings and guidance in focus as the heart of earnings season swings into motion today. Yields at the front of the US yield curve have also rebounded from new lows posted last week in the wake of weak US Retail Sales and a dovish BoJ meeting, with the 2-year rising from a low of 4.03% last Thursday to 4.23% currently. The US treasury will hold a 2-year auction today. What is going on? Biden administration confronts China, accusing Chinese companies of supporting Russia’s war effort Citing “people familiar with the matter”, a Bloomberg article claims that the Biden administration has confronted China with evidence that state-owned Chinese companies are supplying “non-lethal” military and other assistance that amounts to a support of Russia’s war effort in Ukraine, while stopping short of “wholesale evasion” of US sanctions. More positive signs the travel sector is roaring back in Asia; on land and in the air Chinese road traffic congestion increased 22% from a year ago, as measured across 15 key cities. This is a positive sign that Chinese residents are striving to return to normalcy. Moving to air traffic, we believe the broader Asian-Pacific regional will likely report stronger numbers for Q4 of 2022 and Q1 of 2023, supporting higher revenue in the travel and tourism sector. Despite airlines travel returning, airlines costs are also rising with fuel costs higher after the oil price has bounced up 17% off its December low. Growth has a high ceiling for domestic Chinese air travel, with passenger traffic in November (the most recent available data point) at some 75% below late 2019 levels. The Aussie dollar above 0.7000. Australia CPI next test AUDUSD has traded back above 0.7000, nearly matching the highest levels since last August. The Aussie initially jumped to 0.7045 today in Asia after Australia’s service sector data improved, even though the Services PMI print remained in contractionary phase. The Q4 Australian CPI report is out tomorrow and is expected to rise to 5.8% YoY from 5.6% (for the important trimmed mean CPI), amid tighter energy markets, and higher metal prices. Spotify to cut 6% of workforce Like the rest of the technology sector Spotify announced yesterday that it is cutting 6% of its workforce to offset the top line weakness and improve profitability. The initial reaction in Spotify shares was strong but was faded during the session. The US Leading Indicator (LEI) fell sharply again in December It continues to signal recession for the US economy in the near term said Ataman Ozyildirim, Senior Director, Economics, at The Conference Board. “There was widespread weakness among leading indicators in December, indicating deteriorating conditions for labor markets, manufacturing, housing construction, and financial markets in the months ahead. Meanwhile, the coincident economic index (CEI) has not weakened in the same fashion as the LEI because labor market related indicators (employment and personal income) remain robust. Nonetheless, industrial production— also a component of the CEI—fell for the third straight month. Overall economic activity is likely to turn negative in the coming quarters before picking up again in the final quarter of 2023.” What are we watching next? Bank of Canada meets tomorrow – most see a 25-basis point hike tomorrow followed by a pause Most observers are looking for the Bank of Canada to hike one last time for this cycle tomorrow to take the policy rate to 4.50% and to indicate a pause to assess inflationary and labor market conditions before deciding on next steps. The Bank of Canada hiked rapidly in 2022 in an attempt to catch up with galloping inflation but has contrasted with the Fed in signalling a pause in the hike cycle before the Fed, which has been slow to signal that peak rates may be nearing. USDCAD trades near the lows since last November at 1.3350 this morning, with the 200-day moving average creeping higher and near 1.3200. Earnings to watch The Q4 earnings season accelerates this week with key earnings from Microsoft, ASML, Tesla, Visa, and Chevron. The aggregate earnings surprise for the S&P 500 companies that have reported earnings is currently 4.1% and the market has responded positively to the Q4 earnings reported so far with Netflix’s 8.5% jump on its strong outlook for its advertising business being the clearest evidence. Today’s key earnings focus is Microsoft (read our earnings preview here) with expectations of lower revenue growth and lower operating margin. Other important earnings today are from J&J, Texas Instruments, GE, and 3M. Today: Nidec, Microsoft, J&J, Danaher, Verizon, Texas Instruments, Raytheon Technologies, Union Pacific, Lockheed Martin, Intuitive Surgical, GE, 3M, Halliburton, DR Horton Wednesday: ASML, Lonza Group, Tesla, Abbott Laboratories, NextEra Energy, IBM, Boeing, ServiceNow, CSX, Freeport-McMoRan, Lam Research, Norfolk Southern Thursday: Tryg, Novozymes, Kone, Nokia, LVMH, Christian Dior, STMicroelectronics, SAP, Diageo, Atlas Copco, Volvo, SEB, Visa, Mastercard, Comcast, Intel, Blackstone, Valero Energy, Archer-Daniels-Midland, Dow, Nucor, L3Harris Technologies, Southwest Airlines, American Airlines Friday: Fanuc, Chevron, American Express, Colgate-Palmolive Economic calendar highlights for today (times GMT) 0810 – ECB’s Klaas Knot to speak 0815-0900 – Eurozone Jan. Flash Manufacturing and Services PMI 0930 – UK Jan. Flash Manufacturing and Services PMI 0945 – ECB President Lagarde to speak 1100 – UK Jan. CBI Business Optimism and Trends in Total Orders/Selling Prices 1300 – Hungary Central Bank Rate Decision 1330 – Philadelphia Fed Non-manufacturing Survey 1445 – US Jan. Flash Manufacturing and Services PMI 1500 – US Jan. Richmond Fed Business Conditions 1800 – US Treasury auctions 2-year notes 2130 – API's weekly report on US oil inventories 2145 – New Zealand Q4 CPI 0030 – Australia Q4 CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – January 24, 2023 | Saxo Group (home.saxo)
The RBA Is Expected To Raise Rates By 25bp Next Week

Forex: AUD Has Cemented Its Position As The Most Popular Long Trade In 2023

ING Economics ING Economics 24.01.2023 09:52
The market is focused on the US growth story and the dollar is more and more influenced by data prints. Today's PMI numbers should help limit downside exposure for the dollar. The euro remains supported by ECB officials fighting speculation of a 25bp hike. Hungary's central bank tests market sensitivity on an upcoming rate cut Some improvement in the market's sentiment around the health of the service sector in the US should help limit downside exposure for the dollar USD: Data-related risks are back Risk assets have started the week on the front foot, with equities rising yesterday in Europe and the US while Chinese markets are closed for the whole week. The dollar remained moderately offered. It’s become increasingly clear that larger swings in the dollar are now driven by data releases given the market's heightened sensitivity to the US growth story ahead of next week’s Federal Open Market Committee (FOMC) meeting. Preliminary PMIs will be released across developed markets today, and despite the surveys not being as highly regarded as the ISM in the US, that elevated sensitivity to data likely makes today’s releases a risk event for the dollar. Consensus expectations are centred around a modest recovery in the service index and in the composite survey. Some improvement in the market’s sentiment around the health of the service sector in the US should help limit downside exposure for the dollar. In that case, DXY may hold around 102.00 today unless PMIs in Europe surprise to the upside. Richmond Fed manufacturing data is the other release in the US calendar today. In the rest of G10, AUD has cemented its position as the most popular long trade in 2023, breaking decisively above 0.7000 yesterday. Tonight’s fourth-quarter CPI data in Australia will be key, as evidence of sticky inflation may force a hawkish repricing across the AUD curve (which currently embeds 40bp of extra Reserve Bank of Australia tightening) and add steam to the AUD/USD rally. CPI figures are released also in New Zealand tonight, and we see a larger risk they could show a deceleration in price pressures compared to Australia. AUD/NZD may retest the recent 1.0950 highs soon as the NZD curve has more room for a dovish repricing. Francesco Pesole EUR: Reality check Given that part of the recent EUR strength has relied on a re-rating of growth expectations in the eurozone thanks to lower energy prices, today’s PMIs will likely be a reality check on the sustainability of this driver for the common currency. Consensus expectations are moderately upbeat and signal that the PMI services index could return above 50.00 for the first time since July. Still, it will now take quite a good deal of positive news to push another big idiosyncratic euro rally. It seems more likely that EUR/USD could test 1.1000 on the back of rising market risk appetite weighing on the safe-haven dollar, if anything. At the same time, the effective pushback by ECB officials against speculation around 25bp hikes is likely limiting downside risks for the pair. President Christine Lagarde has one last chance to deliver any remark today before the quiet period kicks in ahead of next week’s meeting. A mere reiteration of her recent rhetoric, however, seems highly likely at this stage. Francesco Pesole GBP: Limited upside room against the euro PMIs may look a bit grimmer in the UK compared to the eurozone today, which could hinder the modest rebound in EUR/GBP seen over the past two trading sessions. The pair may struggle to climb above 0.8830-0.8850 for now. Still, the pound should be able to count on a generalised alignment in market expectations around a 50bp hike by the Bank of England next week (45bp priced in at the moment), which suggests a smaller scope for a correction.  Francesco Pesole HUF: Central bank assesses progress at home and abroad This week's highlight in the region is the National Bank of Hungary (NBH) meeting today. The central bank has made it clear that it wants to see a tangible and permanent improvement in risk sentiment. This means an improvement on the geopolitical side and on internal issues such as the Rule of Law, the current account deficit, and inflation. While we have seen some progress on all of these issues, in our view it is not enough for the central bank. However, after the progress in the EU story and lower-than-expected inflation, markets are already looking for indications of the NBH cutting rates, which are the highest in the CEE region. We expect the central bank to confirm its intention to keep interest rates high for longer today. However, we concede that the current situation could be tempting for the central bank to test the market by sending a dovish message. Increasingly, the market is seeing signs of speculation of a too-early interest rate cut. If the NBH resists the temptation and confirms the hawkish tone, we expect the current speculation to cool down and the forint could get back on track. In addition, yesterday's reaction to Fitch's downgrade of the rating outlook to negative could slightly clear long positioning and clear the way for further forint appreciation. In that case, we expect that the forint could test 390 EUR/HUF soon. Otherwise, the current positioning favours a rather asymmetric reaction negatively towards EUR/HUF 400. Frantisek Taborsky Read this article on THINK TagsHungary FX Daily Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
US CPI Surprises on the Upside, but Fed Expectations Unchanged Amid Rising Recession Risks

More Job Cuts, Microsoft Is Putting $10 Billion Into The Now-Very-Famous ChatGPT

Swissquote Bank Swissquote Bank 24.01.2023 10:51
The week started with more news of layoffs, and further gains in the S&P500. S&P500 The S&P500 traded above the 200-DMA, yet again. Earnings will decide whether the latest gains will be sustainable. Microsoft All eyes are on Microsoft – not only because it will release Q4 earnings after the bell, but also because it’s been making a great buzz since the start of the year thanks to its bet on ChatGPT. The company confirmed yesterday that is putting $10 billion into the now-very-famous ChatGPT. PMI On the macro front, PMI data released this morning showed that the manufacturing activity in Japan didn’t improve in January, while Australia’s manufacturing PMI slipped below 50, into the contraction zone for the first time in 32 months, but business confidence improved to a three-month high, on China’s reopening. EUR/USD Elsewhere, the EURUSD couldn’t consolidate gains above the 1.09 mark yesterday. But today’s PMI data could help give another boost to the single currency. And, if not, the message from the European Central Bank (ECB) is crystal clear: the rate hikes will continue and that’s positive for the euro. Watch the full episode to find out more! 0:00 Intro 0:31 More job cuts, more S&P500 gains? 2:44 Has Microsoft hit the jackpot with ChatGPT? 5:07 FX roundup: commo-currencies, euro and yen 8:15 Gold’s next bullish target at $1980 per ounce Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #ChatGPT #Microsoft #earnings #PMI #data #USD #EUR #JPY #CAD #AUD #crude #oil #XAU #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

European Markets Have Started To Lose Some Of Their Early Year Momentum

Michael Hewson Michael Hewson 24.01.2023 11:32
US markets started the week very much on the front foot yesterday, with the S&P500 closing above the 4,000 level and the Nasdaq 100 leading the way higher with its second successive 2% daily gain.   The outperformance in tech appears to point to a growing conviction on the part of investors that the Fed will soon have to look at cutting rates before the end of the year, although to look at bond markets yesterday, yields also moved higher, as money flowed out of treasury markets.   With a lot of tech companies starting to announce job cuts, as well as other measures to rein in costs, and inflationary pressures showing further signs of easing, it would appear that US investors are starting to think in terms of the next move higher, despite concerns over lower profits   Given the uncertain economic backdrop this comes across as a bit of a leap of faith, and its also notable that while US markets have started to gain momentum in the past few days, European markets have started to lose some of their early year momentum.   While US markets surged higher yesterday it is notable that today's European market open is likely to be a much more tepid affair, suggesting perhaps that investors in Europe don't share the same enthusiasm about the economic outlook, despite the reopening of the Chinese economy, which may help to provide a demand boost.   This increase in optimism is likely to be reflected in today's flash PMI numbers for January, which have already seen a pickup in economic activity in the past few months due to the sharp declines in energy prices from the peaks in August and September.   In Germany manufacturing PMI fell to 45.1 in October, but has recovered since then, albeit is still very much in contraction territory. Services have seen a similar pattern, dropping to two-year lows of 45, before showing small signs of a recovery. We expect to see a further improvement in today's January numbers to 48 for manufacturing and 49.5 in services.     In France, we've seen a similar pattern in manufacturing, although services have been more resilient due to the energy price subsidies provided by the French government to cushion French households from the worst effects of higher prices. France manufacturing is expected to improve to 49.5 from 49.2, and services to 49.8 from 49.5.   In the UK, manufacturing has struggled over the past 3 months and looks set to continue to do so, while services have been slightly more resilient. As we head into 2023 the challenges for business will be whether we see new investment, and a pick-up in economic activity, after the rising pessimism seen at the end of last year. Manufacturing is expected to remain subdued at 45.5, while services could slip back from 49.9 to 49.5.   Public sector borrowing in December is expected to remain high on the back of rising debt interest and energy price support with expectations of a small fall from November's £22bn to £18bn.   US manufacturing and services are expected to remain weak at 46 and 45 respectively.      EUR/USD – a marginal new high at 1.0927 yesterday, before slipping back again. The main resistance remains at the 1.0950 area which is 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110. Support remains back at the 1.0780 area.   GBP/USD – ran out of steam just below the 1.2450 area yesterday slipping back towards the 1.2320 area. Has managed to hold above the 1.2300 area for the last three days. Above 1.2450 could see a move towards 1.2600. A move below 1.2290 could see a move towards 1.2170.   EUR/GBP – slid back from the 0.8815 area but while above the 50- and 100-day SMA which acted as support last week the bias remains for a return to the recent highs at 0.8890. The next support below 0.8720 targets 0.8680.   USD/JPY – has squeezed back above the 130.20 area, with a move through 131.60 and last week's high potentially targeting a return to the 132.50 area in the short to medium term. Support currently at the 128.20 area as well as the lows last week at 127.20.     FTSE100 is expected to open 20 points higher at 7,804   DAX is expected to open 47 points higher at 15,150   CAC40 is expected to open 23 points higher at 7,055   Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
US Inflation Rises but Core Inflation Falls to Two-Year Low, All Eyes on ECB Rate Decision on Thursday

Saxo Bank Podcast: Earnings Season Kicks Off In Earnest, Silver's Ugly Dip Relative To Still-Strong Gold

Saxo Bank Saxo Bank 24.01.2023 12:05
Summary:  Today we discuss the US equity market melting up technically at an awkward moment, as leading indicators suggest we are barreling into a recession. In any case, a big test ahead as earnings season kicks off in earnest with today's batch of companies reporting, including beaten down mega-cap Microsoft after hours. In commodities, a check-in with crude oil, silver's ugly dip relative to still-strong gold, and one of the most shorted commodities, coffee. Stocks to watch today, the macro calendar picking up and more also on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it. Read next: South African Petrochemical Company Sasol Is Moving Away From Fossil Fuels, Germany Again Refused To Send Tanks To Ukraine| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Uncomfortable squeeze as earnings season rush kicks off | Saxo Group (home.saxo)
The AUD/USD Pair’s Downside Remains Off The Table

The Aussie Pair Is Above 0.70$, GBP/USD Pair Lost Its Level Of 1.24$

Kamila Szypuła Kamila Szypuła 24.01.2023 12:56
The dollar traded near a nine-month low against the euro and lost its recent gains against the yen on Tuesday as investors weighed the risk of a US recession with the Federal Reserve's monetary policy outlook. USD/JPY The Japanese yen gained slightly against the US dollar today after Jibun Bank's composite PMI was 50.8 in January from 49.7 previously. The manufacturing component was the same as last month's 48.9, but the services component was 52.4, above the previous reading of 51.1. These are diffusion ratios, and an index above 50 is seen as positive for the economy. The dollar fell to 127,215 yen last week, the weakest since May, before the Bank of Japan's policy review, as investors assumed the BoJ would begin to end its stimulus program. However, the BJ left the policy unchanged, giving the dollar some respite. Analysts believe BOJ change will come sooner rather than later as policy makers make tweaks to their yield curve control mechanism. USD/JPY drops towards 129.00 but rebounded and trades above 130.00 again. EUR/USD The eurozone showed resilience in late 2022 with plenty of positive data that so far seemed to carry over to 2023. The hawkish rhetoric of ECB policymakers continues to strengthen the euro while optimism about avoiding recession is growing. The euro, on the other hand, gained almost 0.8% last week, which was boosted by a wave of officials from the European Central Bank. ECB President Christine Lagarde also reiterated on Monday that the central bank will continue to raise interest rates rapidly to curb inflation, which is still more than five times higher than the 2% target rate. PMIs in the euro zone were higher than expected. Only Germany's Manufacturing PMI fell from 47.1 to 47.0. EUR/USD lost grip and fell towards 1.0850 after the release of mixed PMI data from Germany and the euro zone. Ahead of the US S&P Global PMI survey, the US dollar index has been stable above 102.00. The EUR/USD pair is trading close to 1.0870 at the time of writing. Source: investing.com GBP/USD The British pound was lower on Tuesday after data showed economic activity weakened further in January, underlining the risk that Britain could slip into a recession in 2023. After an impressive December services PMI report, markets were hoping for another encouraging reading in January given a slightly brighter outlook now that inflation seems to be headed in the right direction. This was not to be the case as the new year brought with it a sustained decline in private sector business activity in the UK. The flash UK PMI Composite was 47.8 (December: 49.0). lowest in 24 months. In contrast, the UK industrial production index was 46.6 (December: 44.4). The highest in 6 months. UK Services PMI Business Activity Index at 48.0 (December: 49.9). The Bank of England is still expected to raise its key interest rate for the tenth consecutive time on Feb. 2 after its next scheduled meeting. The cable pair also lost amid emerging reports. GBP/USD pair trades below 1.2400 again and is now at 1.2318 AUD/USD The Australian dollar was nearing a five-month high from last week at 0.7063 as the US dollar comes under increasing pressure. While the CPI is the main target of the RBA's mandate of targeting 2-3% over the business cycle, the Producer Price Index (PPI) may also play a role. The PPI will be released this Friday and if it accelerates in the fourth quarter, it could be a problem for CPI this quarter. Companies face higher costs. It's also worth noting that the Australian and New Zealand dollars hit multi-month highs on Tuesday as investors refocused on risky assets, easing recession fears and a less aggressive Federal Reserve. The pair of the Australian Dollar, despite not maintaining previous imports, remains above 0.70. The Aussie Pair is currently trading at 0.7023. Source: investing.com, fiance.yahoo.com, dailyfx.com
Soft PMIs Are Further Signs Of A Weak UK Economy

Soft PMIs Are Further Signs Of A Weak UK Economy

Kenny Fisher Kenny Fisher 24.01.2023 14:15
The British pound has posted slight gains on Tuesday. In the European session, GBP/USD is trading at 1.2302, down 0.60%. UK debt hits record UK debt costs soared in December, sending the budget deficit to a record 27.4 billion pounds. This was sharply higher than the November reading of 18.8 billion pounds and the consensus of 17.3 billion pounds. The drivers behind the sharp upturn were rising interest payments and government subsidies for gas and electricity. The government’s bill for the subsidies in December was some 7 billion pounds. Despite the grim debt news, the pound remains steady, thanks to broad US dollar weakness. UK PMIs for December didn’t help matters, as both the Services and Manufacturing PMIs came in below the 50 level, which indicates contraction. Manufacturing rose slightly to 46.7, up from 45.3 in November and above the forecast of 45.0 points. The Services PMI fell to 48.0, down from the November read and the forecast, both of which were 49.9 points. The soaring debt and soft PMIs are further signs of a weak UK economy. These are clearly not ideal conditions for raising interest rates, but with inflation at 10.5%, the Bank of England doesn’t really have much choice, as entrenched inflation could cause more damage to the economy than high interest rates. The road back to low inflation promises to be a long one, with the BoE projecting that inflation won’t drop to 5% until late this year. The US will release Manufacturing and Services PMIs which are expected to remain in contraction territory. Manufacturing is expected to tick lower to 46.1 (46.2 prev.), while Services is forecast to dip to 44.5 (44.7 prev.). If the releases are softer than expected, the US dollar could lose ground as speculation will rise that the Fed may have to ease up on the pace of rates. Read next: South African Petrochemical Company Sasol Is Moving Away From Fossil Fuels, Germany Again Refused To Send Tanks To Ukraine| FXMAG.COM  GBP/USD Technical GBP/USD is testing support at 1.2335. Below, there is support at 1.2233 There is resistance at 1.2499 and 1.2601 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

Rising U.S. Treasury Bond Yields Have Helped The USD/JPY Bulls

Marek Petkovich Marek Petkovich 24.01.2023 14:38
For a long time, the Bank of Japan has been at war with financial markets, but in January decided to conclude a truce with them. Keeping the overnight rate at -0.1% and the range of the targeted yield of 10-year bonds at +/-0.5%, the BoJ offered banks a new system of lending not at a fixed, but at a floating rate secured by securities. The volume of bids at the first auction amounted to £3.13 trillion, three times the amount offered. Commercial institutions will invest the money received, including in bonds, which will stabilize the situation both in the Japanese debt market and in the USDJPY pair. Everyone needs rest. After sharp movements that first led the yen to fall to a 30-year bottom against the U.S. dollar, and then to its strengthening by 17%, the Japanese currency requires rest. A truce is the best way to ensure it, but it was not without a change in the external background here, either. Rising U.S. Treasury bond yields have allowed the USDJPY bulls to raise their heads. The prevailing market optimism about China and Europe's resilience in the face of the energy crisis suggests that the United States will be able to avoid a recession. This reduces the demand for such a reliable asset as American debt obligations and contributes to the growth of interest rates on them. It's quite possible that institutional investors, who took their net positions on the yen into positive territory for the first time since June 2021, will have to moderate their ardor. At least in the short term. Dynamics of USDJPY and speculative positions on the yen As history shows, inflation can sharply slow down to 2% only in the event of a downturn in the U.S. economy. This was the case in the 1970s, when the Fed's aggressive monetary tightening under Paul Volcker pushed the U.S. into recession. This was the case during the global economic crisis of 2008. Now the situation looks different. The U.S. labor market remains strong as a bull, and the improvement in the economies of China and the eurozone raises global risk appetite and weakens financial conditions. Risks of a rebound in inflation are increasing, and the odds of a U.S. GDP contraction are shrinking. Not surprisingly, Treasury yields are rising, contributing to USDJPY pair consolidation. Read next:South African Petrochemical Company Sasol Is Moving Away From Fossil Fuels, Germany Again Refused To Send Tanks To Ukraine| FXMAG.COM Undoubtedly, the downward trend remains in force as, sooner or later, the Bank of Japan will have to give up control of the yield curve and raise rates. All the more so given the acceleration in consumer prices in Japan to 4%, the highest mark in 41 years, and accelerating wages. Nevertheless, any asset needs a break on a long hike, so USDJPY consolidation is just what the doctor ordered. Technically, there is a steady downward trend on the daily chart of the pair, but it is too early to speak about its recovery without quotes falling below the fair value of 128.5. The rebound from the 128–128.5 convergence area can be used for buying. Unsuccessful EMA tests near 131.8 and 133.3 can be used to sell the USDJPY.   Relevance up to 11:00 2023-01-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333107
Analysis Of The AUD/JPY Currency Pair Scenarios

Analysis Of The AUD/JPY Currency Pair Scenarios

InstaForex Analysis InstaForex Analysis 25.01.2023 08:00
On the daily chart of the AUD/JPY currency pair it can be seen that the CCI indicator has managed to pass the -100, 0, & 100 levels, this means that buyers have dominated so that in the next few days AUD/JPY will try to break the Equal High level of 91.87 so that if the AUD/JPY level If this is successfully penetrated upwards, AUD/JPY will have the potential to test the 92.88 level as its main target and the 94.20-95.62 area as the next target. However, with the emergence of the Ascending Broadening Wedge pattern, please pay attention to the downward correction movement, especially those that exceed the 88.65 level because if this level is successfully penetrated then all Bull scenarios that have been previously described will become invalid and cancel by themselves. Relevance up to 01:00 2023-01-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/118151
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The Australian Dollar Maintains Its Role As The Market Leader

InstaForex Analysis InstaForex Analysis 25.01.2023 08:09
The Australian dollar successfully maintains its role as the market leader. Yesterday, it rose 17 pips, this morning the aussie gained 46 pips to reach the bottom of the target range at 1.7090-0.7130. A consolidation above the target range will open the target at 0.7284 (June 2022 high), so now there is a tussle at the current levels, and the bears may lose another two figures. The divergence on the daily chart is already broken, so it's up to the price. There is an uptrend at the four-hour chart: the price is rising above both indicator lines, the Marlin oscillator is rising in the uptrend area, there are no early signs of a reversal. Perhaps such signs will appear in the 1.7090-0.7130 range.   Relevance up to 03:00 2023-01-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333159
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The British Pound (GBP) Could Possibly Correct Even Further

InstaForex Analysis InstaForex Analysis 25.01.2023 08:11
The British pound failed to cross the resistance of the target level of 1.2420 yesterday, and it closed the day by falling 47 pips while the Marlin oscillator is descending on the daily chart. The pullback is on hold for now before the price rushes above 1.2420, since the price is still above the balance indicator line (red). This shows that market participants prefer long positions. Since the distance between the 1.2155 and 1.2420 target levels is quite large (265 pips), we can expect a sideways price movement in the upper half of this range, until the price is squeezed by 1.2420 and the MACD line on the daily chart (gray rectangle). On the four-hour chart, the price has settled under the MACD indicator line (blue sliding), the Marlin oscillator is in the red zone. There is a downtrend here, the pound could possibly correct even further before it rises above 1.2420. Consolidating under 1.2155, below the MACD indicator line on the daily chart, may give us a signal of breaking the uptrend. Relevance up to 03:00 2023-01-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333161
Bank of England raised the interest rate, UK unemployment data go out tomorrow

The EUR/USD Pair Continues To Rise In The Positive Area

InstaForex Analysis InstaForex Analysis 25.01.2023 08:14
The euro closed Tuesday with slight gains, some other counter-dollar currencies closed the day with losses. Investors are gently probing for further growth (Forex), but the stock market is not stable. Yesterday, the S&P 500 closed the day almost flat (-0.07%), the Russell 2000 was down 0.22%, whereas PMIs came out good. There was a new divergence on the daily chart. Nonetheless, it is just an expectation of a renewed divergence, which might be broken. Therefore, the uptrend is still present, and the target is 1.0990. On the four-hour chart, the price has once again moved away from the support of the MACD line, the Marlin oscillator continues to rise in the positive area. It is still in an uptrend. I expect the price to reach the target level of 1.0990. Consolidation under the MACD line, below 1.0845, will be the first signal for a reversal Relevance up to 03:00 2023-01-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333163
The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

The British Pound Is Showing Signs Of Exhaustion Of The Bullish Force

InstaForex Analysis InstaForex Analysis 25.01.2023 08:17
Early in the European session, the British pound is trading around 1.2326 showing signs of exhaustion of the bullish force. We can see that it is consolidating below the uptrend channel that has been broken. GBP/USD is now below the 21 SMA located at 1.2364 and above the 6/8 Murray located at 1.2207. Yesterday during the American session, the British pound fell to a low of around 1.2261, after better-than-expected US PMI and weak UK data. GBP/USD started a technical rebound from 1.2261 and is now consolidating around 1.2322. This level is the key because it is located below the uptrend channel formed since January 9, which has become a strong resistance. Only a daily close above 1.2370 on the 4-hour chart could mean the resumption of the bullish cycle and the pound could once again trade within the uptrend channel and GBP/USD could reach 7/8 Murray at 1.2451 and could even reach the psychological level of 1.25. If the British pound trades below the key point of 1.2370 in the next few hours, there is a possibility that it will continue to fall and the instrument could reach the 6/8 Murray at 1.2207 and could even reach the 200 EMA located at 1.2153. Our trading plan for the next few hours is to sell below 1.2365 or at current price levels around 1.2322, with targets at 1.2250, 1.2207, and 1.2153.   Relevance up to 05:00 2023-01-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309905
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The EUR/USD Pair Is Still Trading Close To The Intraday High

Oscar Ton Oscar Ton 25.01.2023 08:20
Technical outlook: EURUSD rallied through the 1.0902 high during the Asian session on Wednesday, potentially completing a corrective rally after having tested 1.0926 on Monday. The single currency pair is still trading close to the intraday high at this point in writing as the bears remain inclined to be back in control soon. the price is looking lower from here going forward. EURUSD produced a Pinbar candlestick pattern on the daily chart on Monday after printing the 1.0926 high. The interim resistance still holds well and a follow-through lower could produce an Evening Star reversal. If the structure unfolds accordingly, the currency pair could be well on its way towards 1.0370 and 1.0050 at least. EURUSD remains supported at 1.0766, followed by 1.0481. A break lower will be required to confirm a bearish reversal ahead. Also, note that the Fibonacci 0.618 retracement of the entire rally between 0.9535 and 1.0926 is passing through 1.0050. A high probability remains for a bullish reversal if prices reach there. We shall review the wave structure then. Trading idea: Potential bearish turn against 1.1000 Good luck!     Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309913
FX Daily: Testing the easing pushback

The EUR/USD Pair Should Start A New Decline Soon

Torben Melsted Torben Melsted 25.01.2023 08:23
EUR/USD is completing the corrective wave from 1.0835 and should soon start a new descent towards the ideal corrective target area between 1.0437 - 1.0500 to complete wave 4 and set the stage for the next impulsive rally in wave 5. However, for now, it's the correction in wave 4 that is interesting for us. The instrument continues to follow its path as closely as possible. Correction is always hard to read as all possible combinations are available and especially the b-wave wave within a correction is the most difficult to read.   Relevance up to 06:00 2023-01-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309917
The US Dollar Index Price Is Looking Higher From Here Soon

The US Dollar Index Price Is Looking Higher From Here Soon

Oscar Ton Oscar Ton 25.01.2023 08:27
Technical outlook: The US dollar index dropped through 104.40 during the early Asian session on Wednesday before finding support again. The index has been oscillating within a contracting triangle since January 18, after hitting the 101.11 low.This could be seen as the last leg potentially before a break higher towards 102.50 and further. The price is looking higher from here soon. The US dollar index is seen to be trading close to 101.50 at this point in writing as the bulls prepare to come back in control. A push through 102.10-20 will enable DXY to break out of consolidation and open the door towards 102.50 and the 105.35 strong resistance. For the above bullish structure to hold, prices should stay above 101.10 going forward. The US dollar index seems to have terminated its larger-degree corrective wave, which had begun since the 114.70 high in September last year. If the above structure holds well, the bulls will be poised to push through 105.35 in the near future, followed by 106.50 and 109.50 in the coming weeks. A probability also remains to print a new high above 114.70. Trading idea: Potential bullish turn against 100.00 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309919
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The EUR/USD Pair Maintains A Bullish Sentiment

Paolo Greco Paolo Greco 25.01.2023 08:41
M5 chart of EUR/USD EUR/USD did not show any interesting movements on Tuesday. Moreover, the movements were almost an exact copy of the previous day. The euro tried to settle below the critical line, but failed and so it returned to the area just above the Kijun-sen line. Macro data were released yesterday, some of which were worth mentioning, however, I have already warned you that the market would only react if the actual values significantly differed from projections. There was no such thing, so traders did not react to the PMIs on the manufacturing and services sectors in the US and EU. Furthermore, traders certainly did not hear anything new from European Central Bank President Christine Lagarde's speech. Thus, the euro remains near its local highs and is still unable to start a bearish correction. There was a buy signal on Tuesday. The Kijun-sen line and 1.0868 level should be considered as an area. The price fell to this area at the European trading session and stayed in it for most of the day. When it finally left this area, half of the US session had already passed. Therefore, it was up to traders to decide if they wanted to open a long position. In any case, there was no loss on this transaction. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 10,300, whereas the number of short positions fell by 2,300. Thus, the net positions decreased by 8,000. Now the number of long positions is higher than the number of short positions opened by non-commercial traders by 127,000. From a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 52,000 (711,000 vs. 659,000). H1 chart of EUR/USD EUR/USD maintains a bullish sentiment on the one-hour chart, staying above the lines of the Ichimoku indicator. Thus, the upward movement may persist in the near future, despite last week's flat. As we can see, there is still no way for the euro to correct, and traders prefer to buy the pair or not to do anything at all. On Wednesday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137 and also Senkou Span B lines (1.0799) and Kijun Sen (1.0854). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events or reports in the EU and the US for today. If the pair spent the first two days moving sideways, then there is a high probability that we will witness the same thing today. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders.     Relevance up to 05:00 2023-01-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333173
The EUR/USD Pair Chance For The Further Downside Movement

The EUR/USD Market Did Not React To Economic Indicators From The Eurozone

Paolo Greco Paolo Greco 25.01.2023 08:44
The EUR/USD currency pair is gradually increasing. On Tuesday, the European currency continued to "bask in the sun" above the moving average line while the British pound started another round of downward adjustment. The pair cannot even slightly drop below the moving average, let alone experience a correction or something more significant, as we have constantly highlighted. The technical picture and our findings are therefore unchanged from Tuesday. The market is still solely looking north, and there is currently essentially no correlation with the pound. And it doesn't happen very often. In the European Union, three business activity indices were released yesterday. And because there was no market response to them, we will not even consider them. We would have alerted traders to the fact that one or more indices had experienced a major increase or decrease. However, since the market has not given these statistics any consideration, we don't think it's worthwhile to concentrate on them. It should be highlighted that recent relationships between the euro and its macroeconomic and fundamental background are illogical. Many reports are disregarded, and many reports are just used as justification for opening new long positions. As a result, the "foundation" and macroeconomics lose their essential substance. If the market is just engaged in purchasing euros, what use is it to analyze this or that report? Any news, message, or report can be evaluated from various perspectives. One of the major drawbacks of basic analysis is that every occurrence can be regarded as having both a positive and negative meaning. We make an effort to avoid adjusting the news to the movement of the pair, therefore we blatantly admit that the market now gives reports, speeches, and other events very little consideration. It would be more accurate to state that there is currently only one betting factor in the market, which is honestly already beginning to annoy me. The ECB is expected to keep tightening monetary policy practically indefinitely, according to the market, but the Fed has run out of options. While the ECB rate is currently being increased by 1.25% for three meetings, the Fed rate is very readily capable of rising to 5.5%. There is just a 0.25% difference. Does this mean that the euro is expanding exponentially as a result of this 0.25%? ECB members' remarks simply serve to perplex traders. Even more unpleasant than the subject of trading is one more issue. These are the ECB representatives' remarks regarding the same rates. The chairman of the ECB delivered three speeches last week, and members of the monetary committee who are also the central bankers of their respective nations also delivered multiple speeches. Rates will increase at a noticeable rate going forward, and almost everyone agreed. This makes sense and is to be expected; otherwise, it cannot be. Recall that the ECB debated tightening in various ways for a very long time last year but was unable to make a decision. He is currently far behind the Fed as a result. No one will comprehend his refusal if he delays raising the rate for a moment. There is just no need to slow the rate of growth with off-scale inflation at this point because the European Union recession has not yet started. As a result, the ECB simply lacks formal justification for tightening monetary policy by 0.5%. We believe that even a single rise of 0.75% would not be harmful. Members of the ECB are aware of this. What do we ultimately have? All of the ECB officials keep repeating their mantra about high inflation and hiking interest rates, and the market "digests" all of this by giving us more long positions in the euro currency. Nevertheless, there is nothing new that we discover every day. The market appears to be simply buying more euros by taking advantage of all formally "bullish" factors. Why sell the euro if you can ride the rising trend? We appear to be witnessing an inertial increase. As of January 25, the euro/dollar currency pair's average volatility over the previous five trading days was 76 points, which is considered "normal." So, on Wednesday, we anticipate the pair to fluctuate between 1.0804 and 1.0956. The Heiken Ashi indicator's upward reversal will signal the restart of the upward momentum. Nearest levels of support S1 – 1.0864 S2 – 1.0742 S3 – 1.0620 Nearest levels of resistance R1 – 1.0986 Trading Suggestions: The EUR/USD pair is still moving upward. Now is a good moment to think about opening new long positions with goals of 1.0956 and 1.0986 following the Heiken Ashi indicator's upward turn or when the price is recovering from a move. With goals of 1.0804 and 1.0742, short trades can be opened after the price is fixed below the moving average line. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. The short-term trend and the direction in which you should trade at this time are determined by the moving average line (settings 20.0, smoothed). Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 05:00 2023-01-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333169
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The Upward Movement Of GBP/USD Pair Can Resume Almost At Any Moment

Paolo Greco Paolo Greco 25.01.2023 08:50
M5 chart of GBP/USD The pound plummeted after the poor UK PMI data. In our article on the euro, we said that traders did not react to similar reports from the EU and the US, but in the pound's case, the time when sterling started to fall had perfectly coincided with the release of the PMI data. The very essence was not exactly clear. The PMI for the manufacturing sector was slightly higher, while the PMI for the services sector was slightly down. How can such data be interpreted in favor of the dollar? But take note that traders had formal reasons to sell the pair, and recently, we haven't seen the market react in a logical manner. Therefore, it was necessary to rejoice yesterday, instead of asking questions. Now the pound is below the critical line, which allows us to expect a decline by 400-500 points within the new round of the global correction. Keep in mind that the meetings of the Bank of England and Federal Reserve will take place next week, and the market can slowly change its attitude towards the dollar and the pound, as it has enough time to work out the most probable decisions at the future meetings. Speaking of trading signals, as well as twenty-four hours earlier, everything was fine. The pound was moving in a trend, so the trading signals were quite good. First, the pair crossed the 1.2342-1.2351 area, and then fell to 1.2259, having worked with minimum error. The rebound from 1.2259 announced the need to close the short positions and open the longs. The profit was about 50 pips. The buy signal should have worked too, and it gained another 50 pips, as the price managed to go back to 1.2342. As a result, traders gained about 100 pips. COT report The latest COT report showed a decrease in bearish sentiment. During the given period, non-commercial traders opened 5,500 long positions and as many as 700 short positions. Thus, the net position increased by 4,800. This figure has been on the rise for several months, and the sentiment may become bullish in the near future, but it hasn't yet. Although the pound has grown against the dollar for the last few months, from a fundamental perspective, it is difficult to answer why it keeps rising. On the other hand, it could fall in the near future (in the mid-term prospect) because it still needs a correction. In general, in recent months the COT reports correspond to the pound's movements so there shouldn't be any questions. Since the net position is not even bullish yet, traders may continue to buy the pair over the next few months. Non-commercial traders now hold 41,500 long positions and 66,000 short ones. I remain skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD risks breaking the uptrend. While the price is above the Senkou Span B line, the upward movement can resume almost at any moment. But overcoming the critical line is already a heavy step to a new round of downward movement. On January 25, the pair may trade at the following levels: 1.2106, 1.2185, 1.2288, 1.2342, 1.2429-1.2458, 1.2589, 1.2659. The Senkou Span B (1.2260) and Kijun Sen (1.2351) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Wednesday, there are no important events in the US and the UK, so the pair can calm down and take a small break. Nevertheless, if sterling continues to fall, we will consider it as a logical step from a technical perspective. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders   Relevance up to 05:00 2023-01-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333175
The GBP/USD Pair Started A New Round Of Downward Correction

The GBP/USD Pair Started A New Round Of Downward Correction

Paolo Greco Paolo Greco 25.01.2023 08:57
The GBP/USD currency pair started a new round of downward correction on Tuesday, and as a result, by the end of the day, it had fallen below the moving average line. Yesterday, we discussed the pair's inability to go over the level of 1.2451, where the latest rise in the value of the pound came to a stop, as well as the overbought CCI indicator, which frequently signals an impending negative reversal. These two technical elements were what made Tuesday successful. We want to point out right now that numerous reports have been released in the last day, all of which have been about commercial activity in the USA and the UK. However, it is impossible to categorically label these findings either positively or negatively. UK business activity increased in the manufacturing sector while marginally declining in the services sector. However, neither index rose above the "waterline" of 50.0, indicating that the trend is still downward. Based on this information, how could the pound have been declining all day? Let's take a look at it from the other angle: although the manufacturing and services business activity indices in the US increased, they both continued to be below the "waterline," and by the time they were released, the downward trend had already ended. Here, the numbers don't add up. It turns out that either the market calculated all of these statistics using its logic, or these reports have absolutely nothing to do with what occurred. Remember that we have been anticipating a significant decline in the value of both the pound and the euro for a very long time. It should not have been the only round of downward movement that we saw between December 14 and January 6. Therefore, we think it will make sense to start moving downward again after recovering to the level of 1.2450. We continue to have serious doubts that the Bank of England will hike the benchmark interest rate "to the bitter end." And if we are correct, there simply isn't any justification for the pound to increase. In just a few months, it has already gained more than 2,000 points, which is roughly half of what it lost during the most recent worldwide decline. The BA rate is expected to rise higher, according to experts. According to experts consulted by The Financial Times, the British regulator will probably keep raising the rate. There is no doubt in our minds, but how quickly will he complete it? Recall that there have been persistent reports about a further slowing in the UK's monetary policy tightening pace in recent weeks. Forecasts are more conservative due to worries over the British economy, although the UK's current inflation rate points to an increase of at least 2.0–2.5%. However, according to analysts, what matters most right now is BA's commitment to keeping the rate rising; they don't care how much higher it will go or how long it will take. They point out that the 0.1% increase in November's British GDP was a welcome surprise. Some even assert that because of this signal, we may infer that the British economy won't enter a recession in the fourth quarter, as practically predicted before by Rishi Sunak and Andrew Bailey. In addition, there have been 27,000 new jobs added, salaries are increasing at a record rate, and inflation is still at its highest point in 40 years. Everything would seem to be in favor of raising the rate by 0.5% further. And if the Bank of England does not disappoint next week, the pound may continue to rise. However, we want to remind you that the rise of the pound in recent weeks and months may have been influenced by high market expectations for interest rates. Most likely, the market has already resolved this issue. Despite the Fed's continued rate increases, the dollar has not increased since the US inflation rate first began to decline. Although only slightly, inflation in Britain has already started to slow down twice. However, if we apply the fairness principle, the pound should have already stopped gaining value if this support factor was the only one available to it. We also caution against drawing quick judgments about the UK recession, as it is highly unlikely that it can be stopped. And it won't be judged until the middle of this year, at the earliest. Over the previous five trading days, the GBP/USD pair has averaged 120 points of volatility. This figure is "high" for the dollar/pound exchange rate. Thus, we anticipate movement inside the channel on Wednesday, January 25, with movement being constrained by levels of 1.2209 and 1.2449. A potential continuation of the upward movement will be indicated by an upward turn of the Heiken Ashi indicator. Nearest levels of support S1 – 1.2268 S2 – 1.2207 S3 – 1.2146 Nearest levels of resistance R1 – 1.2329 R2 – 1.2390 R3 – 1.2451 Trading Suggestions: In the 4-hour timeframe, a significant correction in the GBP/USD pair began. Therefore, until the price is anchored above the moving average, it is possible to hold short positions with goals of 1.2268 and 1.2207. If the price is stable above the moving average line, you can start trading long with goals of 1.2390 and 1.2449. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. The short-term trend and the direction in which you should trade at this time are determined by the moving average line (settings 20.0, smoothed). Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zone   Relevance up to 05:00 2023-01-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333171
The German economy underperformed in the Q4 of 2022, GDP declined

The Fall In Energy Prices Caused An Increase In German IFO Business Sentiment, Eyes On The Bank Of Canada Rate Decision

Michael Hewson Michael Hewson 25.01.2023 09:24
European markets were somewhat of a mixed bag yesterday after the lates flash PMI numbers painted a patchy outlook for certain parts of the economy in the UK and Europe.   US markets also underwent a mixed finish with the Dow finishing higher and the Nasdaq 100 lower,  due to caution ahead of the release of key earnings announcements after the close last night, with the main focus on Microsoft's Q2 numbers being of particular interest. These saw the software giant record revenues of $52.7bn, which was slightly below expectations, with profits of $2.32c a share.   As expected, personal computing and gaming revenue was disappointing, falling short of forecasts at $14.24bn, however this was offset by strong cloud revenue of $27.1bn. Windows OEM revenue fell 39%, while Xbox content and services saw a decline of 12%. On guidance Microsoft was rather pessimistic suggesting that Azure growth would slow, and that new business was already becoming more difficult. Microsoft also said subscriptions were also likely to slow, and that revenues would remain flat in Q3.   Looking ahead to today's European session the pessimistic outlook to last night's earnings numbers looks set to see a slightly lower open.   With UK inflation seeing a step-down last week to 10.5%, it remains painfully high for a lot of people, and on the RPI measure is even higher. In December, the ONS took the decision to pull the release for PPI inflation due to problems with some of the calculations, with respect to diesel prices as well as the food prices calculation.  This is significant as PPI can act as a leading indicator as to what is coming down the line when it comes to inflationary, as well as disinflationary forces. Prior to the ONS pulling the numbers in December there had been evidence that factory gate prices had been falling sharply with the last recorded October numbers seeing a slowing in inflationary pressure from the peaks in the summer.   If we get a further sharp slowdown in the annual numbers, this ought to give confidence that the headline numbers will also see similar falls in the coming months. Annualised input numbers in October came in at 19.5%, down from 20.8%, while output prices for October came in at 17.2%. Monthly input price estimates for today's December numbers are for a decline of -0.8%.   With energy prices continuing to fall over the winter, we've started to see gradual improvements in economic activity across the euro area. This improvement has been reflected in the better-than-expected German manufacturing numbers yesterday and was also responsible for a better than forecast improvement in German IFO business sentiment in December to 88.3.   This trend is expected to continue in today's January numbers with another improvement to 90.3, with the current assessment also set to improve to 94.9, and expectations set to rise to 85.3, from 83.2.   It was back in October that the Bank of Canada set the cat amongst the pigeons when it raised rates by a less than expected 50bps to 3.75%, in a move that suggests that central banks were starting to wake up to the possibility that too aggressive rate rises could do more harm than good.   They then followed that with another 50bps rate rise in December, to 4.25%, as concern grew that raising rates too high could create problems in the housing market.   With today's decision coming a week before next week's Federal Reserve decision, a lot of people are looking at the Bank of Canada for a steer in terms of whether we could see a step down from the Fed. It is widely anticipated that the BoC will announce another step down to 25bps, after headline inflation fell back to 6.4% from 6.8% in December. Median core prices however have remained sticky, remaining at 5% in November and up at the highs of the year, which in turn may mean the Bank of Canada could decide to err towards 50bps.     EUR/USD – currently range trading between the highs this week at 1.0927, and wider resistance at the 1.0950 area which is 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110. Support remains back at the 1.0780 area.   GBP/USD – continues to struggle below the 1.2450 area and slipped back to towards the 1.2250/60 area. Above 1.2450 could see a move towards 1.2600. A move below 1.2250 could see a move towards 1.2170.    EUR/GBP – having found support above the 50- and 100-day SMA last week the bias remains for a return to the recent highs at 0.8900. The next support below 0.8720 targets 0.8680.   USD/JPY – found resistance just above 131.00 yesterday, before slipping back. A move through 131.60 and last week's high potentially targets a return to the 132.50 area in the short to medium term. Support currently at the 128.20 area as well as the lows last week at 127.20.    FTSE100 is expected to open 5 points higher at 7,762   DAX is expected to open 25 points lower at 15,067   CAC40 is expected to open 10 points lower at 7,040   Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

The Bank Of Canada Is Preparing To Announce Its Final 25bp Hike

Ipek Ozkardeskaya Ipek Ozkardeskaya 25.01.2023 09:27
Trading in the US was eventless, except for the wild moves that marked the opening bell at the NYSE.  The S&P500 swung around the 4000, without any major moves up or down, as investors remained undecided faced with mixed company earnings, and mixed economic data.  Both US services and manufacturing PMI came in better than expected in January, but both remain in the contraction zone. While the Richmond Manufacturing index fell to -11, significantly lower than -5 expected by analysts.   In summary, the data confirmed a certain slowdown in US economic activity, but it didn't point to a free fall.   The US 2-year yield fell for the second straight session, as the soft data kept the Federal Reserve (Fed) doves at a soft and warm spot.   But at the current levels, the swap market suggests around 48 bp rate increase over the next two FOMC meetings. This means that the present activity in the swap market gives around 8% probability for no rate hike at all after the Fed's February meeting.   And if that's what keeps the S&P500 bid around the 4000 mark, it's worrying.  Earnings, earnings  The S&P500 could or could not get a boost from Microsoft at today's session, as Microsoft announced better-than-expected results yesterday after the market close, but the results were not all rosy. The revenue – which grew at its slowest pace since 2016 - slightly missed expectations, but the earnings beat estimates. The Intelligent Cloud segment grew 18%, as the Azure services grew 31% - slower than the past quarter but better than expected with the prospects of being further boosted by the ChatGPT deal. The shares rallied 5% in the afterhours, but gains were mostly given back.   S&P500 futures are down -0.40% at the time of writing.  Today, it's Tesla's turn to go to the earnings confessional after the bell, and nobody can tell you with confidence what will happen to the share price once the results are freshly out of the oven.   Tesla is doing very well, the company announced record car deliveries quarter after quarter, but the record deliveries weren't enough to meet the market expectations over the past three quarters. And unfortunately, the expectations make the market price, and missing them is no good thing for the share price.  In the FX  The US dollar remains under the pressure of soft data, and worryingly softening Fed expectations, while the euro got the boost that we were hoping for at yesterday's PMI release.   The EURUSD is again testing the 1.09 level to the upside this morning. And the gently widening divergence between the hawkish European Central Bank (ECB) expectations and the dovish Fed expectations remains supportive of a further advance. But be careful, the pair is about to step into the overbought market, which could slow the rally into the 1.10 target.  Across the Channel, the numbers were not as enchanting as on the main continent, and no one is surprised I guess to see the services PMI plunge to 48 in January with all the strikes going on. The manufacturing PMI on the other hand contracted less than expected but a new report suggested that the number of UK firms facing collapse jumped by more than a third at the end of last year.   Cable plunged below its year-to-date ascending channel, and the euro-pound is bought without much hesitation at the 50, 100-DMA levels, and should continue pressuring higher on a broadly stronger euro.   In Canada, the Bank of Canada (BoC) is preparing to announce its final 25bp hike. The dollar-CAD puts more weight into clearing the 1.3350 support, but crude oil is not helping, as the price of a barrel of American crude continues bumping its head against the solid $82pb wall, the 100-DMA, without being able to break it to the upside.   The API data showed almost 3.4-million-barrel build in the US inventories last week, hinting that the more official EIA data could also disappoint the bulls at today's read.   But the medium term outlook for crude oil remains positive, therefore, price pullbacks remain interesting dip buying opportunities as long as the 50-DMA support, which stands a touch below the $78pb mark, holds. 
The Hungarian Central Bank Confirmed Its Commitment To Keeping Conditions Tight For A Longer Period

The Hungarian Central Bank Confirmed Its Commitment To Keeping Conditions Tight For A Longer Period

ING Economics ING Economics 25.01.2023 09:44
The Bank of Canada is facing a hike/no-hike dilemma today. Our view is that it will deliver the last 25bp hike of the cycle now, but retain some flexibility to avoid sounding too dovish. The CAD impact may be slightly positive. Elsewhere, there are no key data releases in the US, while the German Ifo index will be watched closely after yesterday's strong PMIs USD: No key US data today Yesterday’s PMIs painted a less dramatic picture of the US service sector compared to the latest ISM survey and triggered a positive reaction in the dollar. However, markets quickly sold the USD rally, confirming a rather pronounced bearish bias despite encouraging data. It does appear investors are happily buying the dip in EUR/USD around the 1.0850 handle at the moment, and that could prove to be a short-term floor for the pair. There are no data releases to highlight today and no Fed speakers due to the pre-FOMC blackout period. Markets have cemented their view that next week’s move will be a 25bp hike, but are still reluctant to fully price in another 25bp of tightening: the futures and swap market are embedding a 4.90% peak rate. This signals the perceived balance of risks is tilted to the dovish side ahead of next week’s FOMC. Should this narrative gain more traction this week, the dollar may remain gently offered. However, a sharper decline in the dollar may not be on the cards until other large event risks (European Central Bank, Bank of England meetings) are past us. Francesco Pesole EUR: 1.0850 emerging as a short-term floor A below-consensus reading in German manufacturing was the only flaw in an otherwise convincing set of PMIs in the eurozone yesterday. The eurozone composite PMI index moved back into expansionary territory (i.e. above 50.00) for the first time since June 2022, endorsing the ongoing re-rating of the growth outlook in the region. As mentioned in the USD section, 1.0850 has emerged as a buy-the-dip area in EUR/USD over the past two sessions. Good data out of the eurozone is likely keeping most investors on the bullish side of the euro for now, and downside risks for EUR/USD appear contained. A test of 1.1000 by the end of the week is looking more likely, although a decisive break higher is not our base case before the ECB. Today, the focus will be on the Ifo indices out of Germany. All three gauges (business climate, current assessment, and expectations) are expected to improve. Looking at the ECB pricing ahead of next week's meeting, it now seems very plausible that markets will not question a 50bp hike, although another half-point move in March is not fully priced in (around 80% implied probability). The degree of ECB President Christine Lagarde’s commitment to another 50bp move will be the key driver of the market reaction next week. Francesco Pesole CAD: BoC to hike one last time Once a hawkish stand-out, the Bank of Canada is facing a hike/no-hike dilemma today. This is, at least, what market pricing seems to suggest, with 17bp of tightening priced in for today’s announcement. Economists’ consensus is leaning more in favour of a 25bp move, which is also ING’s view. As discussed in our BoC preview, a still-tight jobs market is partly offsetting the decline in headline inflation and signs of economic slowdown, and probably suggests this is the right time to deliver the last 25bp hike of the cycle. Should the BoC surprise with a hold, there’s a good chance the bank will keep the door open for a move in March, which would match the market’s current pricing, and ultimately fail to hit the Canadian dollar. A 25bp hike but a strong signal that rates have peaked and growing concerns on the economic outlook (new economic projections are released today) could prove to be a more dovish outcome than a “hawkish hold”, as markets price in more rate cuts in the second half of the year. This is, however, hardly a desirable outcome for a central bank that is still fighting inflation, and our impression is that the BoC will want to retain some ambiguity around future moves for now. The impact on CAD may be positive but rather limited in the end. USD/CAD remains on track for a move to 1.30 in the coming months, in our view, but USD weakness should be the primary driver of such a move. Francesco Pesole HUF: Forint strongest since the middle of last year The Hungarian central bank yesterday confirmed its commitment to keeping conditions tight for a longer period and that it has taken a patient approach to monetary policy. Moreover, the NBH reiterated its intention to continue withdrawing liquidity from the market via the one-week discount bill and the long-term deposit tender. More interestingly, the NBH raised the reserve requirement ratio for banks to 10% effective from April. Overall, it has sent a very clear signal that the hawkish mode will last for an extended period of time and the central bank is not going to allow any hasty moves. The result is a forint slightly below 390 EUR/HUF at the end of yesterday's trading, higher rates at the short end of the IRS curve and FX implied yields climbing higher. The forint is thus the strongest since the middle of last year and we believe it could still benefit from yesterday's decision. Added to this is the higher EUR/USD level compared to last week and yesterday's renewed drop in gas prices back below €60/MWh. On the other hand, we may see some profit-taking today after the forint's multi-day rally and ahead of Friday's risky sovereign rating review from S&P. Overall, we expect the forint to stabilise around 390 EUR/HUF for now. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Earnings, Soft PMIs, and Market Dynamics: Impact on Yields, Dollar, and Key Developments

Microsoft Forecasts A Continuous Slowdown, Eurozone PMI Rose

Saxo Bank Saxo Bank 25.01.2023 10:13
Summary:  US equities posted an uninspiring session yesterday and the mood soured slightly after the close on Microsoft reporting earnings and issuing weak guidance for its cloud business. Today, the hotly anticipated Tesla earnings report is up after hours. Elsewhere, US Treasury yields dipped and the Australian dollar jumped to new cycle highs in many AUD pairs, including versus the US dollar, on hotter than expected Australian Q4 CPI data.   What is our trading focus? Equities: Momentum faded in US equities mixed earnings The Q4 earnings releases yesterday weighed on sentiment yesterday with the biggest negative surprise coming from 3M expecting -3% to 0% organic revenue growth in 2023 which indicates a sharp decline in volume which 3M confirmed is taking place in consumer electronics and retail related businesses. After the cash close Microsoft reported a worse than expected outlook sending S&P 500 futures lower trading around the 4,020 level early European trading hours. We expect sentiment to remain in a negative mood as the market awaits Tesla’s Q4 result after the market close. FX: USD generally weaker together with sterling, AUD surges The USD was sold again yesterday after a minor rebound, with EURUSD trading back above 1.0900 by this morning and near the cycle highs, while the weaker USD signal was not particularly pure or broad. USDJPY remains above 130.00 as the price action there has lost energy, for example. Some of the euro strength may be on EURJPY flows as the ECB jawboning remains on the hawkish side of late, and on EURGBP flows as sterling stumbled badly yesterday on a very weak preliminary January UK Services PMI yesterday, with EURGBP well back up into the range above 0.8800. The recent cycle top there was just south of 0.8900. Overnight, AUD jumped broadly to the strong side overnight on hot CPI data (more below). Crude oil (CLH3 & LCOH3) sits between two chairs Following Tuesday’s sharp fall, as investors turned more risk adverse following disappointing earnings, crude oil prices are slightly higher into today’s session with recession fears continuing to be offset by an expected increase in Chinese demand and supply concerns related to next month's EU embargo on Russian seaborne sales of fuel products. In Brent the approach to $90 and the December high at $89.40 is likely to prove a tough nut to crack until more supporting news reaches the market. API data showed another build in US crude stocks, but at 3.4mn barrels if was less than the huge builds seen recently. The EIA data is out later today. Gold at new cycle high Gold reached a new cycle high on Tuesday of $1942.5 before profit taking emerged following the better-than-expected PMIs before bouncing back after the weak Richmond Fed index. Bullion trades up close to 6% this month and more than 300 dollars above the early November low on growing recession fears and expected slowing of Fed tightening. The remainder of the week is littered with US economic data, including US Q4 GDP and PCE, the Fed’s favoured inflation metric. Gold remains in a steep uptrend with support at $1900 followed by $1880 where the 21-day moving average and trendline from the November low meet. Silver has stabilised following Monday’s short-lived sell off below $23.15 but a couple of closes above the 21-day moving average, last at $23.76 will be needed to turn the sentiment more supportive. Chicago wheat futures advance Chicago wheat, one of the three most shorted commodities by the hedge fund industry trades near a one-week high after crop conditions worsened in Texas, the second biggest US producing state of winter wheat, a reminder that dry soil conditions remain following last year's massive drought. In the week to January 17, data from the CFTC showed hedge funds held the biggest short position in Chicago wheat since May 2019. Together with Arabica coffee, another heavily shorted contract, these contracts remain exposed to short covering should the technical and/or fundamental outlook turn more favourably. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) yields fall. Very strong 2-year Treasury auction US treasuries found support and rallied yesterday, taking the 10-year treasury yield benchmark back below 3.50% and the 2-year was back below 4.20% this morning, in part after a very strong 2-year auction that saw the strongest bidding metrics since the early 2020 pandemic outbreak timeframe. The US treasury will auction 5-year T-notes today. Grumbles around a protracted US debt ceiling showdown in Congress and the risk of default by the US government not wearing on trust in US sovereign paper yet, with “crunch time” for the issue seen as early as early summer if the situation not resolved before then. What is going on? Microsoft’s outlook sent shares lower The world’s largest software company missed revenue estimates in Q2 (ending 31 December) by a small margin but hit the EPS consensus estimate with EPS at $2.32 for the quarter. The initial reaction was positive in the extended trading session but as the outlook became clearer to investors shares sold off. Microsoft forecasts a continuous slowdown in the commercial business in the next two quarters leaving room for a growth acceleration later in 2023. ASML confirms strong demand for chips Europe’s largest technology company reports Q4 sales of €6.4bn in line with estimates and a gross margin of 51.5% vs est. 49.3%. Investors will be pleased to see the confidence in the outlook with Q1 sales guidance at €6.1-6.5bn vs est. €6.1bn and FY23 revenue growth of 25% compared to consensus at 20% y/y. The company also sees a slight improvement in the gross margin. The Aussie dollar rallied up to 0.8% to 0.7100+, a new 5-month high on hot Q4 CPI print The Australian dollar popped to 0.7108 US, its highest level since early August after another Australian inflation print came out hotter than expected after electricity prices surged, rents also remained stubbornly high, along with furnishings, and household equipment price. Core Trimmed Mean CPI rose 6.9% YoY, above the 6.5% consensus expected. Headline inflation came in at 7.8%, slightly below consensus expectations. Recall the RBA expects inflation to remain high in early in 2023, particularly amid higher energy costs. This is also in line with several other government bodies’ thinking. The stronger inflation data saw odds of an RBA hiking pause for February falling, with a majority now looking for a hike at the Feb. 8 RBA meeting, with about 65 basis points of total additional tightening priced for the RBA, with a peak policy rate priced near 3.75%. Eurozone Flash Jan. Composite PMI edges into expansion Eurozone PMI rose to 50.2 in January from 49.3 in December and 49.8 expected, suggesting that the region may be able to skirt a recession due to a less harsh winter this season which has given room to the ECB to continue to focus on fighting underlying inflationary pressures. Manufacturing PMI was just below the key 50-mark at 48.8 but better than last month’s 47.8, while the rise of services PMI to 50.7 drove most of the gains. UK services PMI, on the other hand, fell to 48 from 49.9 in December, while manufacturing gained slightly to 46.7 in January from 45.3 previously but still remained in contraction. This suggests further signs of UK being in a recession in early 2023 and possibly a sooner pause for the BOE than the ECB. US Flash Jan. PMIs hold up better than expected US flash PMIs for January surpassed expectations, as services rose to 46.6, above the expected 45.0 and the prior 44.7, while manufacturing lifted to 46.8 from 46.2 (exp. 46.0), which comes ahead of ISM on February 1st. The composite rose to 46.6 from 45.0, and this will probably further boost the calls in favour of a soft landing rather than a deep recession as has been the case since the start of the year due to faster-than-expected China reopening and stronger Eurozone outlook. Still, activity is in contraction and job growth is cooling, but the January print also pointed to a re-acceleration in the input cost inflation. US and Germany to send tanks to Ukraine The Biden administration is reportedly expected to announce the intent to send 30 M1 Abrams tanks to Ukraine, with Germany’s Chancellor Scholz also reportedly deciding to send at least 14 of its Leopard 2 tanks to Ukraine after a long hesitation. Reports suggest Germany would only agree to send its best tanks if the US did likewise. It is unknown how rapidly the tanks could be deployed at the front. The US Justice Department and eight US states sue Alphabet Inc.’s Google (GOOGL:xnas) ... charging the company with a monopoly in its digital advertising market place and calling for a break-up of the company’s business in this area. Google retorted that the case “largely duplicates an unfounded lawsuit by the Texas Attorney General, much of which was recently dismissed by a federal court. DoJ is doubling down on a flawed argument....” Alphabet, Inc.’s share price fell 2% yesterday. Codelco produced 10% less copper than planned last year Production at Codelco, the Chilean state-owned miner said on Tuesday it produced 10% less copper than planned last year. Driven by mishaps at existing operations, such as rockfall, equipment malfunctions and dam freeze. In addition, some projects were delayed as the industry is seeing cost blowouts. Chile, the world's biggest supplier has increasingly been challenged by steadily falling ore quality, water shortages and projects becoming pricier. Developments that together with social unrest in Peru and the expected pickup in demand from China and the green transformation point to underlying support for copper. Freeport-McMoRan (FCX) report production and earnings later today and it may overtake Codelco as the world’s top producer. What are we watching next?  Bank of Canada meets today – most see a 25-basis point hike tomorrow followed by a pause Most observers are looking for the Bank of Canada to hike one last time for this cycle today to take the policy rate to 4.50% and to indicate a pause to assess inflation- and labour market conditions before deciding on next steps. The Bank of Canada hiked rapidly in 2022 in an attempt to catch up with galloping inflation but has contrasted with the Fed in signalling a pause in the hike cycle well before the Fed, which has been slower to signal that peak rates may be nearing. USDCAD trades near the lows since last November at 1.3350 this morning (2023 low is 1.3322), with the 200-day moving average creeping higher and near 1.3200. Tesla earnings on watch for margin pressure from price cuts Analysts expect revenue growth of 36% y/y and EPS of $1.12 up 64% y/y. Analysts are still very bullish on revenue growth for 2023 with expectations at 30% growth despite the recent slip in deliveries and three quarters of growing difference between production and deliveries. This is also reflected in the consensus price target at $190 vs the current price of $144. Traders and investors are also expressing a bullish take on Tesla with the put-call ratio on volume being 0.79 and the put-call open interest ratio at 0.65. The key thing to watch will be the comments on recent price cuts for several models, and how that impacts the bottom line, and whether the demand response is big enough to offset the price reduction to see the bottom line grow this year. Earnings to watch Today’s key earnings focus is ASML and Tesla as both earnings will set the direction for sentiment in the market. Read our earnings preview from yesterday here.  Today: ASML, Lonza Group, Tesla, Abbott Laboratories, NextEra Energy, IBM, Boeing, ServiceNow, CSX, Freeport-McMoRan, Lam Research, Norfolk Southern  Thursday: Tryg, Novozymes, Kone, Nokia, LVMH, Christian Dior, STMicroelectronics, SAP, Diageo, Atlas Copco, Volvo, SEB, Visa, Mastercard, Comcast, Intel, Blackstone, Valero Energy, Archer-Daniels-Midland, Dow, Nucor, L3Harris Technologies, Southwest Airlines, American Airlines  Friday: Fanuc, Chevron, American Express, Colgate-Palmolive  Economic calendar highlights for today (times GMT) 0900 – Germany Jan. IFO Business Climate survey  1500 – Canada Bank of Canada Rate Decision  1530 – US Weekly DoE Oil and Product Inventories  1600 – Canada Bank of Canada Statement and Press Conference  1800 – US 5-year Treasury Auction  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – January 25, 2023 | Saxo Group (home.saxo)
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The EUR/GBP Cross-Currency Pair Rises For The Fourth Consecutive Day

TeleTrade Comments TeleTrade Comments 25.01.2023 10:15
EUR/GBP grinds near weekly high, up for the fourth consecutive day. Clear rebound from 50% Fibonacci retracement, upside break of 100-SMA favor bulls. One-week-old resistance line restricts immediate upside ahead of monthly top. EUR/GBP picks up bids to 0.8845 as bulls poke intraday high, as well as the weekly top, heading into Wednesday’s European session. In doing so, the cross-currency pair rises for the fourth consecutive day after reversing from the 50% Fibonacci retracement of its run-up from early December to January 13. In addition to a successful rebound from the key Fibonacci retracement level of 0.8722, the EUR/GBP pair’s ability to cross the 100-SMA hurdle, as well as the bullish MACD signals, favor the bulls. It should be noted, however, that a downward-sloping resistance line from January 13, close to 0.8860 at the latest, guards the quote’s immediate upside. That said, the quote’s run-up beyond 0.8860 could enable the EUR/GBP bulls to refresh the monthly high, currently around 0.8900. In that case, the 61.8% Fibonacci Expansion (FE) of its moves between December 01, 2022, and January 13, 2023, close to 0.8955, will gain the market’s attention. Alternatively, pullback moves may initially aim for the 100-SMA level surrounding 0.8815 ahead of targeting the 0.8800 round figure. Following that, the 50% Fibonacci retracement level of 0.8722 should lure the EUR/GBP bears. In a case where the quote remains bearish past 0.8722, the 61.8% Fibonacci retracement level near 0.8680, also known as the “golden ratio”, will be crucial to watch. EUR/GBP: Four-hour chart Trend: Further upside expected
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

A Hawkish Interest Rate Decision By The Bank Of Canada Might Strengthen The Canadian Dollar

TeleTrade Comments TeleTrade Comments 25.01.2023 10:24
USD/CAD is set to extend the downside to near the weekly low around 1.3320. Bank of Canada is expected to hike the interest rate further by 25 bps to 4.5%. The expectation of a smaller interest rate hike by the Federal Reserve is backed by escalating recession fears. USD/CAD is expected to deliver a breakdown of the Inverted Flag chart pattern that might expand volatility ahead. USD/CAD is hovering near the critical support above 1.3340 in the early European session. The Loonie asset has dropped after failing to sustain above 1.3400 and is expected to decline further to near the weekly lows around 1.3320. The major is following the footprints of the US Dollar Index (DXY), which is displaying a subdued performance. Weakness in the S&P500 futures led by a dip in Microsoft earnings due to missed estimates in the cloud business and technical glitches in the NYSE has turned investors’ risk-averse. Also, investors are restricting themselves from building full-capacity positions ahead of the United States Gross Domestic Product (GDP) data. The US Dollar Index (DXY) is struggling to sustain above the 101.50 resistance. The alpha created by the US government bonds has rebounded firmly. The 10-year US Treasury yields have scaled to near 3.47%. Bank of Canada to tighten policy further To tame stubborn inflation, the Bank of Canada (BoC) might continue to tighten its monetary policy further. Canada’s inflation has been recorded at 6.3% from its December Consumer Price Index (CPI) report, which is three times more than the 2% inflation target. According to a poll from Reuters, Bank of Canada Governor Tiff Macklem’s aggressive policy tightening campaign is expected to calm down as the street sees a further interest rate hike by 25 basis points (bps) to 4.50%. Also, it conveys that the Bank of Canada will keep interest rates at 4.5% for the rest of the year, which indicates that this might be the end of further policy tightening. Canada’s headline inflation stood at 6.3% for December and is expected to remain above 2% inflation target till Q3CY2024. Factors that have kept Canada’s inflation at the rooftop are the tight labor market and supply chain bottlenecks. Upbeat employment opportunities have not provided a significant reason to producers to trim the prices of goods and services at factory gates. A higher-than-projected hawkish interest rate decision by the Bank of Canada might strengthen the Canadian Dollar. Oil price attempts a recovery from $80.00 Sheer weakness in the oil prices witnessed on Tuesday has met with demand in Wednesday morning around the critical support of $80.00. The black gold witnessed immense pressure as oil demand is expected to witness short-term pain due to extended holidays in Chinese markets for Lunar New Year celebrations. Also, the absence of chatters about supply cuts in the report from OPEC impacted the oil price. Meanwhile, the oil price has attempted a recovery amid headlines that the United States is considering refilling the Strategic Petroleum Reserve (SPR). US President Joe Biden exploited the oil reserves to fight rising oil prices in CY2022. It is worth noting that Canada is a leading exporter of oil to the United States and a recovery in the oil price might support the Canadian Dollar. Read next: The Aussie Pair Is Above 0.70$, GBP/USD Pair Lost Its Level Of 1.24$| FXMAG.COM Contraction in US GDP might accelerate recession fears After a better-than-projected preliminary United States S&P PMI data, investors are shifting their focus toward the release of Thursday’s Gross Domestic Product (GDP). The street is expecting the fourth quarter GDP at 2.8% vs. the prior release of 3.2%. Investors should be aware of the fact that the US Bureau of Economic Analysis reported negative growth in the first two quarters of CY2022. And further contraction in the fourth quarter might accelerate recession fears. The rationale behind softening of economic activities is the higher interest rates by the Federal Reserve (Fed), which has trimmed the leakage of borrowings due to higher interest obligations. Apart from that, chatters about interest rate policy by the Federal Reserve are impacting the US Dollar. The street is expecting a further deceleration in the pace of policy tightening by the Federal Reserve as inflation has been softened significantly. USD/CAD technical outlook USD/CAD is forming an Inverted Flag chart pattern on an hourly scale that indicates a sheer consolidation, which is followed by a breakdown in the same. Usually, the consolidation phase of the chart pattern serves as an inventory adjustment in which those participants initiate shorts, which prefer to enter an auction after the establishment of a bearish bias. Downward-sloping 20-and 50-period Exponential Moving Average (EMA) at 1.3365 and 1.3375 respectively are acting as a major barricade for the US Dollar. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates volatility contraction
The RBA Is Expected To Raise Rates By 25bp Next Week

Australia Inflation Report Helps The AUD/USD Pair

TeleTrade Comments TeleTrade Comments 25.01.2023 10:26
AUD/USD takes the bids to rise to a fresh high since August 2022. A clear upside break of previous resistance from November, bullish MACD signals favor buyers. Nearly overbought RSI (14), multiple hurdle since June 2022 challenge immediate upside. AUD/USD bulls cheer the strong Aussie inflation data as the quote renews the five-month peak near 0.7115 during early Wednesday. In addition to the upbeat prints of the quarterly Australia Consumer Price Index (CPI) and Reserve Bank of Australia Trimmed Mean CPI, the Aussie pair’s ability to successfully cross an ascending trend line from November 15, around 0.7095 at the latest, also favor the bulls. It’s worth noting that the bullish MACD signals add strength to the upside move. However, a horizontal area comprising multiple levels marked since June 2022, around 0.7130-40 restricts appears a strong resistance for the AUD/USD pair traders. Adding strength to the stated hurdle is the overbought condition of the RSI (14). Should the Aussie pair stays comfortably beyond 0.7140, the odds of witnessing the pair’s run-up toward the mid-2022 peak surrounding 0.7285 can’t be ruled out. Alternatively, intraday sellers could take entries in case the AUD/USD price drops below the resistance-turned-support line near 0.7095. Read next: The Aussie Pair Is Above 0.70$, GBP/USD Pair Lost Its Level Of 1.24$| FXMAG.COM Even so, the previous weekly high near 0.7065 and the last Thursday’s low near 0.6870 may test the AUD/USD bears. It should be noted that the 61.8% Fibonacci retracement level of the pair’s June-October 2022 downside and the 200-DMA, respectively near 0.6855 and 0.6815, appear the last defense of the pair buyers as a clear of the same might confirm the bearish trend. AUD/USD: Daily chart Trend: Limited upside expected
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The New Zealand Dollar Weakens A Bit Following The Release Of CPI Data

TeleTrade Comments TeleTrade Comments 25.01.2023 10:46
NZD/USD meets with some supply in reaction to unimpressive consumer inflation data. The yearly CPI rate falls short of RBNZ’s forecast and weighs on the domestic currency. Subdued USD price action lends some support to the pair and helps limit deeper losses. The NZD/USD pair comes under some selling pressure on Wednesday and snaps a three-day winning streak back closer to its highest level since June 2022 touched last week. The pair remains depressed below the 0.6500 psychological mark through the early European session, though lacks follow-through amid subdued US Dollar price action. The New Zealand Dollar weakens a bit following the release of domestic consumer inflation data, which showed that the headline CPI decelerated to 1.4% during the fourth quarter from the 2.2% previous. Adding to this, the annual inflation rate came in below the Reserve Bank of New Zealand's (RBNZ) 7.5% forecast and remained stable at 7.2%. The data forces investors to lower the expectations for the cash rate peak in New Zealand to 5%, from 5.5% and prompts some selling around the NZD/USD pair. Furthermore, worries about a deeper global economic downturn keep a lid on any optimism in the markets and further contributes to driving flows away from the risk-sensitive Kiwi. That said, the underlying bearish sentiment surrounding the greenback helps limit the downside for the NZD/USD pair. In fact, the USD Index, which tracks the greenback's performance against a basket of currencies, remains depressed near a nine-month low amid expectations for a less aggressive tightening by the Fed. Read next: South African Petrochemical Company Sasol Is Moving Away From Fossil Fuels, Germany Again Refused To Send Tanks To Ukraine| FXMAG.COM The markets now seem convinced that the US central bank will soften its hawkish stance and have been pricing in a greater chance of a smaller 25 bps rate hike in February. This might continue to weigh on the buck and supports prospects for the emergence of some dip-buying around the NZD/USD pair. Hence, it will be prudent to wait for strong follow-through selling before confirming that the pair has topped out in the near term and positioning for any deeper corrective pullback. There isn't any major market-moving economic data due for release from the US on Wednesday. That said, the broader risk sentiment might influence the USD price dynamics and provide some impetus to the NZD/USD pair. Traders, however, might prefer to wait on the sidelines ahead of this week's important US macro releases, including the Advance Q4 GDP print and the Core PCE Price Index on Thursday and Friday, respectively.
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

The Euro Is Doing Well, Fed Expectations Become Alarmingly Soft

Swissquote Bank Swissquote Bank 25.01.2023 11:47
Trading in the US was eventless, except for the wild moves that marked the opening bell at the NYSE. S&P500 The S&P500 swung around the 4000, without any major moves up or down, as investors remained undecided faced with mixed company earnings, and mixed economic data. Microsoft  Microsoft announced better-than-expected results yesterday, but the 5% rally in the afterhours trading rapidly faded. Tesla is due to announce its earnings today. Forex In the FX, the US dollar remains under the pressure of soft data, and worryingly softening Fed expectations. The EURUSD is testing the 1.09 resistance on encouraging PMI data, while sterling is softer on growing slowdown worries. Bank of Canada In Canada, the Bank of Canada (BoC) is preparing to announce its final 25bp hike. The dollar-CAD puts increasing weight into clearing the 1.3350 support, but crude oil is not helping, as the price of a barrel of American crude continues bumping its head against the solid $82pb wall, the 100-DMA, without being able to break it to the upside. Read next: The Department Of Justice's Lawsuit Against Google | FXMAG.COM Watch the full episode to find out more! 0:00 Intro 0:38 S&P500 flat around 4000 1:55 Fed expectations become alarmingly soft 2:55 Microsoft earnings may not boost sentiment in S&P500 4:43 Tesla earnings due after the bell 6:26 US softer, euro stronger 7:29 Deteriorating UK outlook is not a concern for FTSE 100 8:48 BoC to announce a final 25bp hike 9:00 Crude oil: $82pb resistance too strong to clear… Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Tesla #Microsoft #earnings #ChatGPT #Nvidia #PMI #data #Fed #ECB #expectations #USD #EUR #GBP #BoC #rate #decision #CAD #crude #oil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Bank of Japan to welcome Kazuo Ueda as its new governor

The Bank Of Japan Won't Abruptly End Its Easy Policy

Jakub Novak Jakub Novak 25.01.2023 14:14
According to the former executive director in charge of monetary policy during the epidemic, the US dollar is aggressively losing ground against the Japanese yen. However, the Bank of Japan is likely to gradually end emergency measures to stabilize the yield curve once the new governor assumes office in April of this year. This is because the emergency measures will likely last for several months. Former director Eiji Maeda stated in an interview that "it is likely that the Bank of Japan will take steps within the first six months after the election of a new governor." Despite this, the regulator "is likely to continue to maintain a soft monetary policy to keep bond yields low" even if the YCC is finished and the negative interest rate resumes a positive trajectory. A chance that pricing pressure could develop  As Japan transitions away from an economy where inflation has been near zero for a considerable amount of time, according to Maeda, a former senior economist at the Bank of Japan, the country is on track to end persistent deflation. Additionally, it presents the Bank of Japan with a chance to stop using aggressive stimulus measures. "The economy is beginning to experience moderate inflation, which lessens the urgency for taking quick action. There is a chance that pricing pressure could develop in the vicinity of 1% to 1.5%," added Maeda. Haruhiko Kuroda Let me recollect that the Bank of Japan governor, Haruhiko Kuroda, spoke out against a vigorous market assault on the Bank of Japan's incentive scheme exactly one week ago. After the Central Bank's unexpected move to boost the target rate on 10-year notes to 0.5% in December last year, speculation about a potential policy change started to emerge. However, as the majority of experts point out until Kuroda steps down on April 8, more adjustments are unlikely. Read next: The Aussie Pair Is Gaining Strong Positive Traction Agian, USD/JPY Drop Below 130.00| FXMAG.COM Maeda Maeda added that a major factor in the December decision was the yen's excessive volatility. In addition to increased foreign currency rate volatility and a decline in market liquidity, YCC has "major side consequences," according to Maeda. He asserts that the bank won't abruptly end its easy policy. Instead, it's more likely that the phase-out will be followed by an increase in bond purchases and an adequate flow of cash to the financial markets. Options are quite likely, including a further 25 basis point widening of the yield range, which would mark the beginning of the end for YCC. During its subsequent policy normalization step, the Bank of Japan "may announce the phase-out of the YCC and pledge to maintain the bond yield ceiling at 0.75%," according to Maeda. USD/JPY Regarding the USD/JPY's technical picture, it is clear that the dollar is actively losing ground versus the yen. A breach of the support level of 126.35 might put more pressure on the trading instrument, which could result in a bigger sell-off between 124 and 121.30. Only after the US dollar has regained control over the resistance level at 131.60 will it be possible to discuss an upward correction and strengthening of the greenback. This could cause a stronger upward move in the area between 134.70 and 138.30, where large dollar sellers have returned to the market. EUR/USD Regarding the technical analysis of EUR/USD, there is still demand for the single currency, and there is a potential that monthly and annual highs will continue to be updated. To do this, the trading instrument must remain above 1.0860, which will cause it to move to the vicinity of 1.0930. You can easily get through this point to reach 1.0970 when an update to 1.1007 is imminent. Only the collapse of support at 1.0860 will put more pressure on the pair and drive EUR/USD to 1.0805, with the possibility of dropping to a minimum of 1.0770 if the trading instrument declines.   Relevance up to 08:00 2023-01-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333213
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

Today’s CPI Release Has Negative Impact On The New Zealand Dollar

Kenny Fisher Kenny Fisher 25.01.2023 14:31
The New Zealand dollar is under pressure on Wednesday. In the European session, NZD/USD is trading at 0.6478, down 0.41%. Markets eye New Zealand CPI The New Zealand dollar reacted negatively to today’s CPI release, falling as much as 0.60% before paring these losses. Fourth-quarter CPI remained unchanged at 7.2%, a notch above the consensus of 7.1%. More importantly, the reading was below the Reserve Bank of New Zealand’s forecast of 7.5%, which could mean that the central bank will ease up on the pace of rate hikes. The central bank has been aggressive, as it raised rates by some 325 basis points in 2022, bringing the cash rate to 4.25%. Similar to the Fed’s experience, the markets aren’t buying into the RBNZ’s hawkish message and are betting that rates will peak at 5.0%, lower than the RBNZ’s projection of 5.5%. The central bank delivered a supersize 75-basis point hike in November, and prior to the inflation release, the market had priced in a 75 bp or 50 bp hike as a 50/50 toss-up. Following the CPI reading, that has changed to 70/30 in favour of a 50-bp move. Inflation has been falling globally while domestically, consumer spending and confidence have fallen due to the rising cost of living. This has raised speculation that the RBNZ could wind up its current rate cycle earlier than it anticipated. The US releases GDP for the fourth quarter on Thursday and we could see some volatility from the US dollar. GDP is expected to slow to 2.8%, down from 3.2% in Q3 but still a respectable pace of growth. On Wednesday, US PMIs pointed to contraction in the manufacturing and services sectors, pointing to cracks in the US economy as high rates continue to take their toll. The US dollar remains under pressure as soft readings have raised hopes that the Fed will ease up on rate policy due to the slowing economy. Read next: The Aussie Pair Is Gaining Strong Positive Traction Agian, USD/JPY Drop Below 130.00| FXMAG.COM NZD/USD Technical 0.6455 is under pressure in support.  The next support line is 0.6379 There is resistance at 0.6547 and 0.6648 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

The Aussie Pair Is Gaining Strong Positive Traction Agian, USD/JPY Drops Below 130.00

Kamila Szypuła Kamila Szypuła 25.01.2023 13:27
The dollar gained on Wednesday during limited trading. Traders broadly expect the Fed to raise interest rates by 25 basis points next Wednesday, down from the 50 bp hike in December. Earlier, investors will look at the US economic growth data for the fourth quarter, which will be released on Thursday. Moreover, a drop in global energy prices and a resulting slowdown in inflation in advanced economies has spurred speculation the Fed and other central banks might soon stop raising interest rates. USD/JPY Spot prices struggle to capitalize on the move and held steady at 130.00 through the early European session. USD/JPY is trading below this level. EUR/USD The chances of a bigger interest rate hike by the ECB are growing rapidly. As reported by Bloomberg, ECB policymaker Gediminas Simkus reiterated on Tuesday that the ECB should continue raising interest rates by 50 basis points in the face of mounting wage pressure. The euro gained thanks to optimism about the euro zone's economic prospects. As for the future of the euro, economists at CIBC Capital Markets said the improving macroeconomic situation and further policy tightening by the ECB herald the strength of the euro in 2023. During the Asian trading hours, the EUR/USD pair rose until it broke above the 1.0900 level. The momentum fails to sustain and the pair trades below that level at around 1.0870. Read next: The Department Of Justice's Lawsuit Against Google | FXMAG.COM AUD/USD The Aussie pair is gaining strong positive traction for the fourth day in a row and is recovering from 0.7100 for the first time since mid-August during the Asian session on Wednesday. The Australian dollar rose to a more than five-month high on Wednesday after higher-than-expected inflation data, bolstering the case for further interest rate hikes. Australian headline inflation (CPI) continues to pick up, as does the preferred trimmed CPI, on both a month-on-month and year-on-year basis. Australia is set to benefit from the Chinese reopening now that the Chinese government has stated that the nation has already reached a peak in infections and hospitalization rates. The reopening has resulted in increased purchases of Australia’s top export, iron ore, as prices have trended higher. The daily AUD/USD chart shows this pair in an uptrend. The pair managed to record gains over the course of three consecutive days. The AUD/USD pair performed well in the early stages of 2023, driven in large part by the continued downtrend of the dollar. Today, the pair gained above 0.7100, but failed to hold and is below this level again. GBP/USD Details of the UK Producer Price Index (PPI) for January may be of interest to GBP/USD investors ahead of Thursday's key US Q4 GDP and next week's Fed meeting. Sterling fell against the dollar and euro on Wednesday after data showed British manufacturers unexpectedly lowered prices in December, suggesting inflation could be easing ahead of next week's Bank of England policy meeting. The news that UK factories have lowered prices is likely to ease the burden on Bank of England policymakers who need to consider how far to raise interest rates in the fight to bring down inflation. The market expects the BoE to raise interest rates for the tenth time since late 2021 as it fights inflation. Markets are currently evaluating a 75% chance of a 50 point rate hike. The cable pair is still trading below 1.2400, close to the 1.2300 level. Source: finance.yahoo.com, investing.com
Analysis Of The EUR/JPY Pair Movement

The USD/JPY Pair Continues To Fall In Negative Territory

InstaForex Analysis InstaForex Analysis 26.01.2023 08:00
The USD/JPY pair has chosen to move exactly along the descending price channel, having turned from its upper limit. Such adherence to the line chart makes it possible to determine the price's movement - the point of intersection of the median line of the price channel with one of the embedded lines of the global hyperchannel (blue lines) - the 124.05 mark. In this case, the intermediate target is the nearest blue line of the hyperchannel at the 127.27 mark. The Marlin oscillator has moved into the red zone (downtrend). It will probably leave its own ascending trend channel and form some kind of downtrend. Probably also within the limits of a new downtrend channel (lilac). An alternative scenario is as follows: since the price crossed yesterday's high (130.58), and settled above it, the next target will be 133.60 - the point of intersection of the embedded price hyperchannel line with the MACD indicator line. On the four-hour chart, the price went under the MACD line, the Marlin oscillator continues to fall in negative territory. The downtrend prevails.   Relevance up to 03:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333279
The GBP/USD Pair May Trade Horizontally Today

The GBP/USD Price Settled Above The Indicator Lines

InstaForex Analysis InstaForex Analysis 26.01.2023 08:01
The British pound is still living up to our expectations - it is developing sideways movement in the upper half of the 1.2155-1.2420 range. At the moment, the price is supported by the balance line. In due course it will be joined by the MACD line. Investors have already entered the "waiting mode", anticipating the Federal Reserve meeting on February 1. The upper target is 1.2598-1.2666; the lower and more strategic target is 1.2155, which, if left, would mean the breakdown of the ascending trend to a medium-term decline. There is nothing remarkable on the four-hour chart. The price settled above the indicator lines, but for the sideways movement, the MACD line could move horizontally, and the price will turn around, which is already happening. The Marlin oscillator has the same uninformative state Relevance up to 03:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333281
The Euro May Gradually Climb To The Target Level

The Euro May Gradually Climb To The Target Level

InstaForex Analysis InstaForex Analysis 26.01.2023 08:03
The euro rose 29 pips yesterday. It takes 70 pips more to reach the target level of 1.0990. Apparently, the price will have time to cover that distance before next week's Federal Reserve meeting. The following optimistic events can lift the euro to the target level of 1.1200, but if the Fed is not optimistic, we expect the traditional price reversal according to the technical picture, i.e. the divergence, which is brewing on the daily chart. And so far this is our main scenario. On the weekly chart, the price reached the Fibonacci level of 138.2%. This is a strong level from which the price reversed in September 2019, in March 2017, in June 2016 and earlier. On the four-hour chart, yesterday's pattern was repeated - the price reversed up from the MACD indicator line. The Marlin oscillator is slowly rising. I expect the euro to gradually climb to the target level of 1.0990   Relevance up to 03:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333283
Inflation In Japan Continues To Show An Uptrend, The USD/JPY Pair Is Going Down

Inflation In Japan Continues To Show An Uptrend, The USD/JPY Pair Is Going Down

InstaForex Analysis InstaForex Analysis 26.01.2023 08:05
The USD/JPY pair has been trading in its own "coordinate system", prioritizing fundamental factors. For example, the pair was actively rising at the start of the week, despite the decline in the U.S. dollar index. Traders of USD/JPY ignored the general weakening of the US currency and even updated the local high (131.14). We will discuss the reasons for such behavior below, but first of all we should pay attention to the most important fact: the bulls failed to settle above the resistance level of 131.00 (middle line of the indicator Bollinger Bands on the D1 chart). Bulls found it hard to climb above this level, which speaks about how unstable their position is. The scale is still in favor of the yen, even in that isolated "coordinate system", in which the pair has to trade. Yen at the helm What is the peculiarity of the pair's behavior? For so many years, the yen acted as a follower, while the greenback took the lead. The Bank of Japan's monetary policy with Governor Haruhiko Kuroda, who was appointed to his post in 2013, repeated the same mantra month after month - that the central bank is committed to accommodative policy and, if necessary, ready to further ease monetary policy parameters. Everybody got used to this rhetoric and did not react to it, at least in the context of the USD/JPY pair. Nearly all of the BOJ meetings were of a pass-through nature, so they had little effect on the price values. But everything changed in December, when the BOJ allowed long-term Japanese government bond (JGB) yields to move in a wider range at the end of the last meeting in 2022. This decision was made, firstly, quite unexpectedly, and secondly - ahead of Kuroda's resignation (he will leave his post in April). Therefore, the market interpreted the outcome of the December meeting very unambiguously, coming to the conclusion that the central bank had taken the first step towards the normalization of monetary policy. Since then, the yen has ceased to be a "slave" in the USD/JPY pair: the focus is no longer just on the Federal Reserve's monetary policy prospects, but also on the prospects of a pivot in the Japanese central bank's policy. The BOJ strikes back The BOJ obviously did not expect such a violent reaction from the market and such unambiguous, categorical conclusions. That is why Kuroda said back in late December that the central bank was not going to abandon its ultra-loose monetary policy in the near future. But the market ignored his rhetoric. Earlier this week, the bears had to deal with another blow: the BOJ published the minutes of its December meeting where several Governing Council members stressed that the "the Bank should carefully explain that it needs to continue with monetary easing, that its accommodative policy stance has not been changed,". The bears were then forced to retreat. Bulls took the initiative and hit a new local high on Tuesday, testing the 131.00 level of resistance. But they failed to hold on to their positions: the bears took the initiative as soon as the bullish momentum faded. At the moment, when this article was being written, the pair was already going down to the bottom of the 129th figure, almost 200 points away from the local high (in only 2 days!). The pair is going down not only because the dollar is "moping" (dollar index is moving to the base of the 101st figure again), but the yen is also strengthening its positions due to "its" own fundamental factors. Inflation, inflation, inflation First, inflation in Japan continues to show an uptrend, renewing multi-year records. Overall consumer price inflation accelerated to 4.0% in December. Excluding fresh food and energy, consumer prices climbed 3.0% annually, and the corporate goods price index was up 10.2% y/y. On Friday, January 27, Japan will publish another important inflation indicator, the January Tokyo Consumer Price Index. It is considered a leading indicator for price movements across the country, so certain conclusions can be drawn from the published figures. If it will be in favor of the yen again, the USD/JPY pair may return to the area of 127-128 figures, where it was traded in early January. Traders of the pair are now acting ahead of the consolidated forecasts. Thus, according to most experts, Tokyo's overall CPI will rise to 4.2%: the last time the figure was at that high was in November 1981. The other components of the report (excluding fresh food prices; excluding food and energy prices) should also show an uptrend. Conclusions Judging by the results of the last few days, we can conclude that the yen held its ground and did not let the bulls settle above the resistance level of 131.00. Undoubtedly, the greenback, which is getting weaker all over the market again, has also played its part. But we should also consider that the pair was rising this week while the USD index was falling. Therefore, the pair is bearish also due to the strengthening of the Japanese currency. Further price declines will largely depend on this week's key releases: if US GDP growth data for Q4 and the core PCE index come out in the red, while Tokyo CPI surprises with its greenback, the pressure on the pair will only intensify. The main bearish target is 127.30 (bottom line of the Bollinger Bands indicator on the D1 chart).   Relevance up to 01:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333277
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange Only The Dow Jones Index Rose

InstaForex Analysis InstaForex Analysis 26.01.2023 08:10
At the close on the New York Stock Exchange, the Dow Jones rose 0.03%, the S&P 500 index fell 0.02%, the NASDAQ Composite index fell 0.18%.  Dow Jones The leading performer among the components of the Dow Jones index today was Walt Disney Company, which gained 2.12 points or 2.00% to close at 108.12. McDonald's Corporation rose 3.44 points or 1.28% to close at 273.00. Walgreens Boots Alliance Inc rose 0.38 points or 1.06% to close at 36.28. The least gainers were 3M Company shares, which lost 2.07 points or 1.80% to end the session at 112.93. The Travelers Companies Inc was up 1.30% or 2.51 points to close at 190.74 while Amgen Inc (NASDAQ:AMGN) was down 1.22% or 3.16 points or ended trading at 256.54. S&P 500 Leading gainers among the components of the S&P 500 in today's trading were MarketAxess Holdings Inc, which rose 10.25% to 363.28, Capital One Financial Corporation, which gained 8.99% to close at 116.09. as well as Warner Bros Discovery Inc, which rose 8.59% to end the session at 14.53. The least gainers were Nextera Energy Inc, which shed 8.71% to close at 76.59. Shares of Nasdaq Inc lost 5.85% and ended the session at 58.30. Quotes of Intuitive Surgical Inc decreased in price by 5.50% to 243.80. NASDAQ The leading gainers among the components of the NASDAQ Composite in today's trading were Minerva Surgical Inc, which rose 65.90% to 0.38, Alvarium Tiedemann Holdings Inc, which gained 65.41% to close at 15.40. as well as shares of GeoVax Labs Inc, which rose 58.89% to close the session at 1.11. Shares of Grom Social Enterprises Inc became the leaders of the decline, which fell in price by 35.63%, closing at 2.06. Shares of Helbiz Inc lost 29.76% and ended the session at 0.29. Quotes of Waitr Holdings Inc decreased in price by 27.79% to 0.42. Numbers On the New York Stock Exchange, the number of securities that rose in price (1651) exceeded the number of those that closed in the red (1387), while quotes of 132 shares remained virtually unchanged. On the NASDAQ stock exchange, 1906 companies rose in price, 1745 fell, and 194 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.63% to 19.08. Gold Gold futures for February delivery added 0.60%, or 11.70, to $1.00 a troy ounce. In other commodities, WTI crude for March delivery rose 0.46%, or 0.37, to $80.50 a barrel. Futures for Brent crude for March delivery rose 0.30%, or 0.26, to $86.39 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.28% to 1.09, while USD/JPY fell 0.46% to hit 129.55. Futures on the USD index fell 0.27% to 101.40. Relevance up to 04:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/310098
The Pound Is Now Openly Enjoying A Favorable Moment

The British Pound (GBP) Made A Strong Technical Rebound

InstaForex Analysis InstaForex Analysis 26.01.2023 08:18
Early in the European session, the British pound is trading around 1.2398 showing a slight technical correction after reaching 1.2417 in the Asian session. Yesterday during the American session, the British pound made a strong technical rebound when it reached the bottom of the uptrend channel formed since January 11. According to the 4-hour chart, we can see that the British pound has been trading within a downtrend channel formed since January 18. A few hours ago, the GBP/USD pair managed to touch the top of this channel and we could expect a technical correction towards the 21 SMA at 1.2361. The instrument could even reach an area of 1.2310 (bullish channel bottom). On the other hand, in case the GBP/USD pair consolidates below 1.2361 there is a strong signal that the pound could fall and even break the bullish channel and reach the area of 6/8 Murray located at 1.2207. Additionally, if bullish strength prevails, we could expect a pullback towards 7/8 Murray located at 1.2450. In case this level acts as a barrier and the pound fails to consolidate above this zone, it will be seen as an opportunity to sell, with targets at 1.2360 (21 SMA) and 1.2207 (6/8 Murray). In case the pound resumes its bullish cycle, we should expect it to consolidate above 1.2450, then it could reach the psychological level of 1.25 and 8/8 Murray located at 1.2695. Our trading plan for the next few hours is to sell the pound below the downtrend channel around 1.2414 or to wait for a pullback towards 1.2451, with targets at 1.2361, 1.2300 and 1.2207   Relevance up to 05:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310102
The Euro Will Probably Continue Its Upward Movement In The Near Future

The Euro Will Probably Continue Its Upward Movement In The Near Future

Paolo Greco Paolo Greco 26.01.2023 08:25
M5 chart of EUR/USD EUR/USD did not show any interesting movements on Wednesday. The euro is still trading near its local highs and cannot enter a bearish correction. Even without any fundamental and macroeconomic background, traders do not wish to lock in profits on long positions, which would lead to at least a small pullback down. Thus, the uptrend persists, as the price continues to be above the Ichimoku indicator lines. The upward movement looks more sideways, but at the same time, there is a slight upward bias. The nature of the movement isn't the best right now. Not much action this week either, but there will be three central bank meetings next week. Maybe this is one of the reasons why traders are being cautious right now. There were three trading signals yesterday. All of them were in the area of 1.0845-1.0868. The movement itself was very weak, so the pair could not go even 15 pips in the right direction for the first two times. Therefore, you should have opened only one long position. You could earn using that one position since there were no sell signals by the end of the day. You could manually close the long position in the evening, which brought a profit of about 30 pips. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 10,300, whereas the number of short positions fell by 2,300. Thus, the net positions decreased by 8,000. Now the number of long positions is higher than the number of short positions opened by non-commercial traders by 127,000. From a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 52,000 (711,000 vs. 659,000). H1 chart of EUR/USD The technical picture on the one-hour chart remains unchanged. We can see that the pair maintains the bullish sentiment, located above the lines of the Ichimoku indicator. Therefore, the euro will probably continue its upward movement in the near future, despite the flat last week. As we can see, there is still no way for the euro to correct, and traders prefer to buy the pair or not to do anything at all. On Thursday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137 and also Senkou Span B lines (1.0799) and Kijun Sen (1.0864). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No major events or reports in the European Union. Meanwhile, we have the relatively important GDP report and durable goods data in the US. Under certain circumstances, the market reaction might follow that data. But if in fact the values and forecasts coincide, it will be minimal. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 05:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333291
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The GBP/USD Pair Tried To Break The Uptrend But Failed

Paolo Greco Paolo Greco 26.01.2023 08:28
M5 chart of GBP/USD GBP/USD resumed growth on Wednesday, failing to settle below the important Senkou Span B line, and remains below the critical line. Therefore, we should talk about preserving the uptrend, although the previous local highs have not been updated yet. Nevertheless, the pound still finds grounds for a rather considerable growth, though there are no grounds. At the moment, either it will continue the upward movement, or it tries to stay in the channel of 1.2288-1.2429 until next week, which is when the meetings of the Bank of England and the Federal Reserve will take place. There has been a lot of talk lately about central bank rates and possible decisions to be made next week. I believe that even without any "surprises", the market has already worked out all of next week's decisions "in advance". The US GDP report for the fourth quarter will be released today, but it often coincides with the forecasts, so the reaction could be weak or nonexistent. Yesterday, the pair did not have the best momentum, but it created one trading signal during the day. The pair crossed the 1.2342-1.2354 range, but it was in the middle of the US session, so the profit on this deal was not high. Traders managed to gain about 10-15 pips on it, which is better than nothing or a loss. COT report The latest COT report showed a decrease in bearish sentiment. During the given period, non-commercial traders opened 5,500 long positions and as many as 700 short positions. Thus, the net position increased by 4,800. This figure has been on the rise for several months, and the sentiment may become bullish in the near future, but it hasn't yet. Although the pound has grown against the dollar for the last few months, from a fundamental perspective, it is difficult to answer why it keeps rising. On the other hand, it could fall in the near future (in the mid-term prospect) because it still needs a correction. In general, in recent months the COT reports correspond to the pound's movements so there shouldn't be any questions. Since the net position is not even bullish yet, traders may continue to buy the pair over the next few months. Non-commercial traders now hold 41,500 long positions and 66,000 short ones. I remain skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD tried to break the uptrend but failed. So, now we have to wait for a new consolidation below the Kijun-Sen line, after which we need to overcome the Senkou Span B. Without this, there is no reason to expect a strong decline. It still has no specific reasons for growth, but the market stays bullish on the threshold of the Fed and BoE meetings. On January 26, the pair may trade at the following levels: 1.2106, 1.2185, 1.2288, 1.2342, 1.2429-1.2458, 1.2589, 1.2659. The Senkou Span B (1.2260) and Kijun Sen (1.2354) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Thursday, there are no important events in the UK, but the US will release two reports, which can hypothetically influence the pair's movement. Of course, the GDP report for the fourth quarter will be the most important one, but the durable goods report has been attracting only a very small portion of traders' attention lately. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 05:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333293
Hang Seng Index Plummets -2% Amid Weak China Data, Short-Term Trend Intact

Technical Analysis Of The EUR/GBP Cross Pair

Torben Melsted Torben Melsted 26.01.2023 08:34
EUR/GBP has seen an expanding leading diagonal as sub-wave i/, which has been followed by an expanding flat correction that still could move a bit lower into the support area between 0.8770-0.8785 before setting the stage for the next impulsive rally higher to at least 0.8994 and possibly even higher. Short-term a break above minor resistance at 0.8824 will be a strong indication that sub-wave ii/ has completed and sub-wave iii/ higher to 0.8994 is unfolding. Relevance up to 07:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310122
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The Loonie Pair (USD/CAD) Is Looking To Shift Its Business

TeleTrade Comments TeleTrade Comments 26.01.2023 08:43
USD/CAD is aiming to shift its auction above 1.3400 as the BoC has reached the terminal rate for now. The rising probability of a smaller interest rate hike by the Fed is weighing on US yields. Oil price is losing foot above $80.50 as oil demand sees short-term pain due to China’s Lunar New Year holidays. The USD/CAD pair has corrected marginally after a recovery move from 1.3380 in the Asian session. The Loonie asset is looking to shift its business above 1.3400 despite a recovery attempt from the US Dollar Index (DXY). The recovery attempt in the USD Index seems less confident amid the risk-on market mood. S&P500 futures are showing marginal gains in early Asia after settling almost flat on Wednesday. The 500-stock basket has turned volatile as corporate are demonstrating their quarterly performance through earnings displays. The USD Index is putting efforts in building a cushion around a seven-month low at 101.10 ahead of the United States Gross Domestic Product (GDP) (Q4) and other economic data, which will release on Thursday. The rising probability of a smaller interest rate hike by the Federal Reserve (Fed) for its February meeting is weighing on the US Treasury yields. The alpha generated by the 10-year US Treasury bonds has dropped to 3.44%. The street is expecting a contraction in the scale of economic activities in the fourth quarter to 2.6% from the former release of 3.2% as Fed chair Jerome Powell has burnt their hands by triggering recession fears in his fight against stubborn inflation. The release of the Durable Goods Orders (Dec) will provide cues about the forward demand, which is expected to jump to 2.5% vs. the prior release of -2.1%. Meanwhile, the Canadian Dollar is expected to face the heat as Bank of Canada (BoC) Governor Tiff Macklem has paused further policy tightening after pushing the interest rates by 25 basis points (bps) to 4.5%. The BoC will keep interest rates steady at 4.5% for the rest of the year and will assess the impact of yet terminal rate ahead. On the oil front, oil price is struggling to sustain above 80.50 as celebrations in China due to the Lunar New Year festival has resulted in a pause in economic activities and henceforth a short-term pain in the oil demand. It is worth noting that Canada is a leading exporter of oil to the United States and lower oil prices might impact the Canadian Dollar.  
Economic Calendar Details and Trading Analysis - August 7 & 8

The USD/INR Pair Is Likely To Witness A More Sluggish Day Ahead

TeleTrade Comments TeleTrade Comments 26.01.2023 08:45
USD/INR pares recent losses amid holiday in India, cautious mood ahead of key US data. Mixed sentiment restricts market moves as traders await US Q4 GDP, PCE Price data. Odds favoring higher foreign fund inflow and softer Oil price favor INR buyers. Concerns surrounding Fed’s pivot keep US Dollar on a dicey floor. USD/INR retreats to 81.45 while paring the intraday gains during early Thursday. The Indian Rupee (INR) pair initially reacted to the US Dollar’s corrective bounce ahead of the key data but price-positive signals for the INR joined Indian holidays to recall the bears. That said, the US Dollar Index (DXY) bears take a breather around an eight-month low as traders await the first readings of the US fourth quarter (Q4) Gross Domestic Product (GDP), expected to print annualized growth of 2.6% versus 3.2% prior. Also important are the US Durable Goods Orders for December and the Q4 Personal Consumption Expenditure (PCE) Price data. It’s worth noting that the downbeat US Treasury yields and hawkish bets on the European Central Bank (ECB), versus the recently increasing odds favoring the Fed’s policy pivot, seem to exert downside pressure on the DXY. “Traders broadly expect the Fed to increase rates by 25 basis points (bps) next Wednesday, a step down from a 50 bps increase in December,” said Reuters. Elsewhere, the expected jump in the Indian foreign fund inflow due to the Adani Enterprise offerings joins the recently easing WTI crude oil prices to weigh on the USD/INR prices. That said, the WTI crude oil drops nearly half a percent to $80.30 by the press time. On the other hand, the hopes of more public sector demands and importers’ moves, as well as the Reserve Bank of India’s (RBI) actions, could weigh on the INR. Given the Republic Day holiday in India, USD/INR is likely to witness a more sluggish day ahead, in addition to the pre-data anxiety. That said, the downbeat expectations from the scheduled US data keep the pair sellers hopeful but a positive surprise could trigger a notable reaction ahead of the next week’s Federal Open Market Committee (FOMC) meeting. Also read: US Gross Domestic Product Preview: Three reasons to expect a US Dollar-boosting outcome Technical analysis A two-week-old bearish channel restricts USD/INR moves between 80.80 and 81.75 at the latest
Further Upward Price Movement Of The AUD/USD Pair Is Expected

The Aussie Pair Traders Cheer A Hawkish Hopes Of the Reserve Bank Of Australia (RBA)

TeleTrade Comments TeleTrade Comments 26.01.2023 08:47
AUD/USD seesaws around five-month high, up for the fifth consecutive day. Hong Kong’s upbeat return after five-day holidays, Tesla earnings underpin favor firmer sentiment. Strong Aussie inflation renewed talks of RBA’s 0.25% rate hike versus previous chatters of policy pivot. US Q4 GDP, PCE Price data will be crucial for clear directions ahead of next week’s FOMC. AUD/USD clings to mild gains above 0.7100 as bulls take a breather after refreshing the five-month high during early Thursday in Europe. That said, the Aussie pair traders cheer Hong Kong’s resumption of trading after five days, as well as hawkish hopes of the Reserve Bank of Australia (RBA) after the previous day’s strong Aussie inflation data. However, a cautious mood ahead of the first readings of the US fourth quarter (Q4) Gross Domestic Product (GDP) seems to challenge the quote’s upside. Additionally probing the AUD/USD buyers is the Australia Day holiday. Hong Kong’s equity benchmark Hang Seng leads the Asia-Pacific gainers with above 2.0% gains by the press time even if markets in Australia, India and China are closed. The reason for the upbeat sentiment could be linked to the market chatters suggesting strong holiday spending in China. Elsewhere, the reversal in the previous talks of the RBA’s policy pivot, especially after the upbeat Aussie Q4 and monthly Consumer Price Index (CPI) data, also underpins the AUD/USD pair’s upside moves. As per the latest market chatters, the odds favoring the RBA’s 0.25% hike are back on the table after a brief absence. It should be noted that the upbeat performance of Tesla jostles with Microsoft’s risk-negative headlines to offer a mixed move to the S&P 500 Futures and challenge the risk-barometer AUD/USD pair. However, the downbeat US Treasury bond yields and the broad US dollar weakness ahead of the key data keep the buyers hopeful. Looking forward, the US Q4 GDP and Personal Consumption Expenditure (PCE) Price data will be important for the immediate direction. Also crucial will be the US Durable Goods Orders and trade data for December. That said, the downbeat expectations from the scheduled US data keep the pair buyers in the driver’s seat but a positive surprise could trigger a notable reaction ahead of the next week’s Federal Open Market Committee (FOMC) meeting. Also read: US Gross Domestic Product Preview: Three reasons to expect a US Dollar-boosting outcome Technical analysis Higher highs on RSI (14) contrast with the lower high on AUD/USD prices and challenge the current bullish trend. As a result, multiple highs marked since June 2022, near 0.7140 will be the key to watch. Also read: AUD/USD Price Analysis: Steadies around 0.7100 amid hidden bearish RSI divergence
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The Kiwi Pair (NZD/USD) Is Expected To Remain On The Tenterhooks

TeleTrade Comments TeleTrade Comments 26.01.2023 08:51
NZD/USD is displaying back-and-forth action ahead of US GDP data. The USD Index is aiming to build a cushion around 101.20 despite the risk-on market mood. The Ascending Triangle formation is indicating a squeeze in volatility. The NZD/USD pair is continuously facing hurdles in recapturing the psychological resistance of 0.6500 in the early European session. The Kiwi asset is expected to remain on the tenterhooks as investors are awaiting the release of the United States Gross Domestic Product (GDP) data. The US Dollar Index (DXY) is aiming to build a cushion around 101.20 as anxiety among investors is escalating regarding the US GDP, core Personal Consumption Expenditure (PCE), and Durable Goods Orders data. Meanwhile, positive market sentiment is solidifying further as the S&P500 futures have extended their morning gains. NZD/USD is displaying topsy-turvy action in an Ascending Triangle chart pattern that indicates volatility contraction on an hourly chart. The New Zealand Dollar has sensed demand after dropping to near the upward-sloping trendline plotted from January 19 low at 0.6365 while the horizontal resistance is placed from January 18 high at 0.6531. The 20-EMA at 0.6483 is overlapping the Kiwi asset, which indicates consolidation ahead. Also, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates an absence of a potential trigger for a decisive move. For an upside move, the asset needs to surpass Wednesday’s high at 0.6530, which will drive the asset toward June 3 high at 0.6576. A breach of the latter will expose the asset to the round-level resistance at 0.6600. On the flip side, a breakdown below January 16 high at 0.6426 will drag the Kiwi asset toward January 17 low at 0.6366 followed by January 12 low around 0.6300. NZD/USD hourly chart  
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The GBP/JPY Cross-Currency Pair Remains Bearish

TeleTrade Comments TeleTrade Comments 26.01.2023 08:57
GBP/JPY bounces off intraday low but stays negative on a day. BoJ Summary of Opinions suggest policymakers are divided considering higher inflation. UK Business Confidence gauge slumps to the lowest levels since 2009. Sluggish markets restrict immediate moves, Tokyo inflation eyed. GBP/JPY picks up bids to extend the latest rebound from the intraday low past 160.00 heading into Thursday’s London open. Even so, the cross-currency pair remains bearish on a day around 160.45 at the latest. The opening of the European and British markets seemed to have allowed the GBP/JPY pair traders to consolidate the daily losses amid sluggish market conditions ahead of the key US data concerning growth and spending. Elsewhere, the Bank of Japan's (BoJ) Summary of Opinions underpins the bearish bias of the GBP/JPY pair as policymakers are divided over the exit of the ultra-easy monetary policy considering the increasing inflation. “The divergence in views highlights the challenge policymakers face in determining whether the recent cost-driven rise in inflation will shift to one backed by robust demand and higher wages - a prerequisite for raising ultra-low interest rates,” said Reuters. On the other hand, fears of economic slowdown in the UK escalate amid downbeat prints of the British business sentiment index shared by Bloomberg. The Institute of Chartered Accountants in England and Wales said Thursday that its latest monitor of business sentiment dropped to an index reading of -23.4, the weakest since 2009. The last survey, published in November, stood at -16.9. Bloomberg also mentioned that the Federation of Small Businesses’ confidence index dropped to -46 points in the final quarter of 2022 from -36 in the third quarter. With this, the sentiment gauge dropped to the lowest level since 2014. It should be noted that the anxiety ahead of the next week’s bumper calendar comprising multiple key central bank meetings and Friday’s Tokyo Consumer Price Index (CPI) for January, expected 4.4% versus 4.0% prior, also weigh on the GBP/JPY prices. Furthermore, the downbeat performance of the Treasury bond yields adds to the bearish catalysts’ list for the quote. Technical analysis Although a two-week-old support line puts a floor under the GBP/JPY prices near 160.00, the recovery remains elusive unless the quote provides a daily closing beyond the 200-Exponential Moving Average (EMA), around 162.20 by the press time
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

The Bank Of Canada Raised Interest Rates By 25bps, The EIA Data Showed An Unexpected Rise In US Crude Inventories

Saxo Bank Saxo Bank 26.01.2023 09:11
Summary:  Risk sentiment was boosted in the US afternoon session after Bank of Canada’s pause signal sparked hopes of the Fed taking a similar turn next week. This saw dollar dipping and Gold surging to fresh cycle highs. Earnings results continue to be mixed with cost cutting efforts in the limelight, but some optimism came from buyback announcements from companies like Chevron and Blackrock. Meanwhile, Tesla beat on the EPS but missed on margin and free cash flow. HK stocks return today after Lunar New Year holiday while China markets are still closed.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) pared early losses to finish little changed On the back of the weakness in the outlook, especially a 7%-8% sequential decline in its Azure cloud computing in the current quarter, from Microsoft (MSFT:xnas), at one point in the New York morning Nasdaq 100 fell as much as 2.5% and S&P 500 slide nearly 1.7%. Stocks then spent the rest of the day climbing to recover from the morning losses. Nasdaq 100 finished the Wednesday session down only 0.3% and S&P 500 nearly unchanged. Microsoft pared early loss to close 0.6% lower. AT&T (T:xnys) jumped 6.6% on solid wireless subscription growth. Boeing (BA:xnys) plunged as much as 4.2%, following reporting a Q4 loss due to margin weakness, but pared all the loss and more, closing 0.3% higher. After the close, Tesla (TSLA:xnas) reported EPS of USD1.19, beating expectations slightly but EBITDA margin of 22.2% missing expectations. The EV giant expects to deliver about 1.8 million vehicles in 2023, in line with expectations. Tesla shares surged over 5% in extended hour trading. US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) richer by 1-3bps on lower UK & European yields Treasuries got a bid across the pond from stronger U.K. gilts and European government bonds which were helped by safe-haven buying on concerns of a potential escalation of the war in Ukraine as Germany and the U.S. are supplying tanks to Ukraine. Traders also took note of the Bank of Canada’s indication of a plan to pause rate hikes to assess the impact on the economy after raising its policy rate by 25bps to 4.5% on Wednesday. The 5-year auction went well with strong demand. Treasury yields fell 1 to 3 bps across the curve, with the 2-year finishing the session at 4.13% and the 10-year at 3.44% Hong Kong’s stock market back from the Lunar New Year holiday; Shanghai and Shenzhen closed Hong Kong’s stock market is resuming trading today after a 3-day long Lunar New Year Holiday while the mainland bourses remain closed for the holiday. During the first four days of the Lunar New Year holiday from Saturday to Tuesday, China’s passenger trips by road, rail, air, and water waterways reached nearly 96 million in China, about 29% higher from the same period last year. Chinese ADRs were in general firmer from their pre-holdiday closes in Hong Kong, with Alibaba (BABA:xnys; 09988:xhkg) up 1.2%, Tencent (TCEHY:xnas; 00700:xhkg) up 2.1%). JD.COM (JD:xnas; 09618:xhkg) up 0.6%, Li Auto (LI:xnas; 02015:xhkg) +6.5%, and NIO (NIO:xnys; 09866:xhkg) +7.1%. FX: Dollar downturn resumes amid expectations of a dovish Fed While a downshift in the Fed rate hike trajectory has been broadly signalled by the members of the board before the quiet period kicked off, the Bank of Canada’s pause signal has left the markets hoping for a similar turn from the Fed next week. This brought a fresh weakness in the US dollar overnight, with G10 gains led by AUD after a firmer-than-expected Q4 CPI print yesterday which would likely drive the RBA to continue to hike for now. AUDUSD hold above 0.71 with AUDNZD marching above 1.0950. GBPUSD returned back above 1.2400 as well while EURUSD is hovering near the YTD high of 1.0927 with a strong German Ifo report (read below) and hawkish rhetoric from the ECB continuing. USDJPY also back below 129.50 in the Asian morning. Crude oil (CLG3 & LCOH3) prices range-bound Crude oil prices remained firm on Wednesday after the EIA data showed an unexpected rise in US crude inventories. EIA reported a 0.5mln bbl build for US crude stocks in the latest week, marking the fifth straight build, albeit considerably less after the 8.4mln bbl build for the prior week, and on the lighter side of analyst expectations for a 1mln bbl build. Meanwhile, a weaker dollar and sustained positive signals from China reopening underpinned as well. WTI continued to find bids at $79.50 while Brent was supported around $85.50 with eyes on the December high of $89.40. Gold (XAUUSD) pushes to fresh 9-month highs; eyes on 1950 The weakness in the dollar amid expectations of a Fed downshift to a smaller rate hike next week continues to push Gold prices higher. The yellow metal surged to 1949.20 overnight, the highest levels since April 2022. A dovish hike by the Bank of Canada last night has set up the markets for a similar shift from the Fed next week. The US GDP release today will be of key interest to gauge whether the market expectations shifting in favor of a soft landing rather than a recession can continue to hold. The focus will then turn to the PCE data on Friday before we head into the Fed meeting week. Support at $1900.  Read next:Despite The Challenges Starbucks Is Developing In Italy, Bank BNP Paribas In Frankfurt Have Been Raided| FXMAG.COM What to consider? Bank of Canada’s dovish hike The Bank of Canada raised interest rates by 25bps to 4.50%, the highest level in 15 years. It plans to hold going forward, but Governor Tiff Macklem said he's "prepared" to hike again if needed. The decision was slightly dovish with a clear pause being signalled, despite the caveat to hike again. The MPR saw the bank lower its 2022 and 2023 inflation forecast but sees 2024 inflation at 2.3% (prev. 2.2%), the same year it expects it to reach its target. Growth forecasts were raised in 2022 and 2023, but lowered in 2024. Markets are taking this as a positive signal in the hope that the Fed could take a similar turn next week. Improving German business outlook further lowers recession risk Germany business confidence survey signalled that the worst may be over for the economy and a slowdown may be ahead, but a deep recession appears to be unlikely at this point. The threat of an immediate energy crunch has receded due to the less harsh winter, and supply-chain constraints are also easing with China’s reopening. The expectation index of the Ifo survey rose for the fourth successive month to 86.4 in January from 83.2 previously, but remained historically subdued amid elevated inflation curbing purchasing power. The current assessment slightly deteriorated. US GDP on the radar today, along with jobless claims An advance print of the Q4 GDP will be released in the US today, and some deceleration is expected from last quarter’s 3.2% YoY. But consensus still expects a strong growth of 2.7% YoY as spending on services sustained. The big concern will be if we see consumers pulling back, as was signalled by a slump in retail sales this month. That could raise concerns on whether a soft landing is really possible. However, judging from the recent labor market strength, it may be too soon to count the consumer out. Initial jobless claims for last week will also be on watch after the previous figure dipped to sub-200k levels signalling a still-tight labor market. Tesla earnings beat Tesla reported Q4 revenue of USD24.32 billion, 1% above the consensus estimate of USD24.07 billion as per Bloomberg’s survey, and a growth of 13% Q/Q and 37% Y/Y. Adjusted net income grew nearly 60% to USD 3.69 billion from a year ago. Adjusted earnings per share came in at USD1.19, beating the consensus estimate of USD1.12 by 6%. The gross margin of 25.1% was below the 26.6% expected by the street and the EBITDA margin of 22.2% was lower than the 22.6% forecasted by analysts. The EV giant said it is accelerating cost-cutting actions. Tesla commented that its factory in China has been running near full capacity and it is not expecting meaningful volume increases in the near term. Chevron boosts buyback on record profits Chevron (CVX) announced $75 billion buyback (22% of marketcap and tripling the current program) that will start in Apr 1 and raised dividend by 6.3% to $1.51/share a quarter implying yield of 3.4%. 4Q earnings are due tomorrow. Other companies like Blackrock and Netflix have also announced buybacks for 2023, sending some optimism on a soft landing scenario as companies are not hoarding cash with fears of an incoming recession.   Source: Market Insights Today: Bank of Canada’s dovish hike; Step up in share buybacks – 26 January 2023 | Saxo Group (home.saxo)
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

Two Small Caps Listed On Euronext Paris Have Faced Severe Financial Difficulties, The Q4 GDP Will Be Released In The US Today

Saxo Bank Saxo Bank 26.01.2023 09:16
Summary:  A whipsaw session in the US for equity traders, as a steep sell-off intraday, in part on Microsoft shares gapping lower at the open on its after-hours earnings report of the prior day was fully reversed by the close. Tesla’s strong guidance after hours kept the mood elevated, as did sideways to lower US treasury yields and a weak US dollar. Another long list of US and European companies are set to report earnings today, including Europe’s largest company by market cap, luxury goods maker LVMH.   What is our trading focus? Equities: US equity market holds up after a stumble The market suffered a significant intraday drawdown yesterday, in part on mega-cap Microsoft gapping lower on the open after its earnings report after the close on Tuesday. But that stock and the broader market recovered to approximately unchanged by the close of the session, keeping the sense of suspense alive around the direction of this market, with a long-standing descending trend-line from the all-time top in play for the S&P 500 near recent highs above 4,000 and the price action criss-crossing the 200-day moving average. Today sees a further flurry of earnings reports, including from the two credit card giants Mastercard (to report before market open) and Visa (after market close). Hong Kong’s Hang Seng (HIF3) surged on return from the Lunar New Year holiday On the first trading day of returning from the Lunar New Year holiday while the mainland bourses remain closed, Hang Seng Index surged 2% and Hang Seng TECH Index jumped 3.6%. During the first four days of the Lunar New Year holiday from Saturday to Tuesday, China’s passenger trips by road, rail, air, and water waterways reached nearly 96 million in China, about 29% higher than in the same 4-day period in the Lunar New Year holiday last year. It added to the optimism that the initial Covid outbreak when pandemic containment measures were lifted has not stalled the rebound in mobility and economic activities. Xiaomi (01810:xhkg), surging 12%, was the best performer within the benchmark Hang Seng Index, following the leak of an EV blueprint design being considered as an indication of the mobile phone and electronic device maker is on track to launch its first EV in 2024. FX: USD drops with resilient risk sentiment and as yields ease lower, perhaps in part on dovish Bank of Canada The USD remains on the weak side, falling again after a brief rally yesterday as sentiment rebounded in equity markets. Another strong treasury auction (see more below) kept US yields under pressure, with the Bank of Canada’s signalling of a pause after yesterday’s hike reminding the market of the US Fed’s trajectory as it is seen pausing rate hikes soon. AUD was especially firm, rallying hard yesterday after a firmer-than-expected Q4 CPI print which is seen likely to drive the RBA to continue to hike for now. AUDUSD has held above 0.71, while AUDNZD rallied hard to 1.0950+, closing in on its 200-day moving average just above 1.1000. GBPUSD recoverd back toward 1.2400 as well while EURUSD is hovering near the YTD high of 1.0927 after a strong German Ifo report yesterday (read below) and hawkish rhetoric from the ECB continuing. USDJPY also back below 129.50 overnight in Asia. Crude oil (CLG3 & LCOH3) prices range-bound Crude oil trades near unchanged after holding tight ranges overnight the Asia session amid low liquidity as the Lunar New Year holiday continues.  EIA reported a 0.5mn barrel build in US crude stocks in the latest week, while Cushing inventories jumped by more than 4 mn barrels, the biggest since April 2020, to 35.6mn barrels, thereby supporting the current spread widening between WTI and Brent to near $6/bbl. Export was firm while total products demand to its lowest for this time of year since 2014. Meanwhile, a weaker dollar and sustained positive signals from China reopening underpinned prices. WTI continued to find bids at $79.50 while Brent was supported around $85.50 with eyes on the December high of $89.40. Gold (XAUUSD) pushes to fresh cycle high near $1950 The weakness in the dollar amid expectations of a Fed downshift to a smaller rate hike next week continues to push gold prices higher. The yellow metal reached 1949.20 overnight, the highest levels since April 2022. A dovish hike by the Bank of Canada last night has set up the markets for a similar shift from the Fed next week. The US GDP release today will be of key interest to gauge whether the market expectations shifting in favor of a soft landing rather than a recession can continue to hold. The focus will then turn to the PCE data on Friday before we head into the Fed meeting week. Additional price momentum being provided by ETF’s where total holdings this week has jumped by 13 tons. Support at $1900 with resistance at 1963$, a Fibonacci level. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) yields fall, 5-year auction another strong one US treasuries continued to rally and yields edged lower, keeping the 10-year US treasury benchmark yield below 3.50%. A 5-year auction saw very strong bidding metrics, if not quite as dramatic as those of the 2-year auction of the prior day. More impactful US macro data is up today, including the first Q4 GDP estimate and weekly jobless claims number, with December PCE inflation data up tomorrow. What is going on? Tesla reports strong profits, forecasts 37% jump in sales this year The company beat consensus estimates in reporting $1.19 of earnings per share and said that it would increase its output “as quickly as possible” after having previously forecasted that it would average 50% annual growth in coming years. The coming year’s forecast production increase was for a rise of about 37%, and questions loom about the company’s margins after it cut prices sharply earlier this month. The company warned on economic uncertainty and claimed to be accelerating its “cost reduction roadmap.” Tesla stock has rallied over 40% from the cycle lows of a few weeks ago and was up marginally in late trading yesterday after the earnings release. Bank of Canada’s dovish hike The Bank of Canada raised interest rates by 25bps to 4.50%, the highest level in 15 years. It plans to hold going forward, but Governor Tiff Macklem said he's "prepared" to hike again if needed. The decision was slightly dovish with a clear pause being signalled, despite the caveat to hike again. The MPR saw the bank lower its 2022 and 2023 inflation forecast but sees 2024 inflation at 2.3% (prev. 2.2%), the same year it expects it to reach its target. Growth forecasts were raised in 2022 and 2023, but lowered in 2024. Markets are taking this as a positive signal in the hope that the Fed could take a similar turn next week. Improving German business outlook further lowers recession risk Germany business confidence survey signalled that the worst may be over for the economy and a slowdown may be ahead, but a deep recession appears to be unlikely at this point. The threat of an immediate energy crunch has receded due to the less harsh winter, and supply-chain constraints are also easing with China’s reopening. The expectation index of the Ifo survey rose for the fourth successive month to 86.4 in January from 83.2 previously but remained historically subdued amid elevated inflation curbing purchasing power. The current assessment slightly deteriorated. Bad time for small caps on Euronext Paris With tightened financial conditions, it is getting increasingly complicated for several small companies to get access to affordable financing. In less than two days, two small caps listed on Euronext Paris have faced severe financial difficulties. A court ordered the liquidation of Deinove – a French biotechnology company pioneering the exploration of a new domain of life, unexplored at 99.9 %: the microbial dark matter. The company, based in the South of France, failed to secure a new round of financing. Yesterday, Lysogène went into receivership. This is another French biotechnology company focusing on lead programs in neurodegenerative lysosomal. The stock is down 85 % on a yearly basis. Expect other small listed companies to experience the same fate as access to financing is getting much more complicated in a high-interest environment. The biotechnological sector is certainly one of the most vulnerable, along with other high-tech segments (such as artificial intelligence). What are we watching next? US GDP on the radar today, along with jobless claims An advance print of the Q4 GDP will be released in the US today, and some deceleration is expected from last quarter’s 3.2% YoY. But consensus still expects a strong growth of 2.7% YoY as spending on services was sustained. The big concern will be if we see consumers pulling back, as was signalled by a slump in retail sales this month. That could raise concerns on whether a soft landing is possible. However, judging from the recent labour market strength, it may be too soon to count the consumer out. Initial jobless claims for last week will also be on watch after the previous figure dipped to sub-200k levels signalling a still-tight labour market. Earnings to watch Today’s key earnings focus in Europe is on the largest company on the continent by market value, LVMH, which continues to ride high on strong sales, and with special focus on how the company guides on the anticipation of a reopening China. It reports after the European market close today. A number of other prominent European names are reporting, including SAP (results already out this morning, with upbeat revenue guidance relative to forecast). In the US, the focus is on the two credit card giants Mastercard, which will report before the open and Visa, which reports after the market close. US chip giant Intel will also report after the market close, as that beleaguered company continues to try righting the ship after touching eight-year lows last year, and with slumping PC demand a prominent concern. Today: Tryg, Novozymes, Kone, Nokia, LVMH, Christian Dior, STMicroelectronics, SAP, Diageo, Atlas Copco, Volvo, SEB, Visa, Mastercard, Comcast, Intel, Blackstone, Valero Energy, Archer-Daniels-Midland, Dow, Nucor, L3Harris Technologies, Southwest Airlines, American Airlines Friday: Fanuc, Chevron, American Express, Colgate-Palmolive Economic calendar highlights for today (times GMT) 1330 – US Dec. Chicago Fed National Activity Index 1330 – US Q4 GDP Estimate 1330 – US Weekly Initial Jobless Claims 1500 – US Dec. New Home Sales 1530 – US Weekly Natural Gas Inventory report 1600 – US Jan. Kansas City Fed Manufacturing Activity 2330 – Japan Jan. Tokyo CPI 0000 – New Zealand ANZ Business Confidence/Activity Outlook 0030 – Australia Q4 PPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – January 26, 2023 | Saxo Group (home.saxo)
FX Daily: Upbeat China PMIs lift the mood

Chinese Have Enough Money To Temper Recession, Tesla’s Record Profit

Swissquote Bank Swissquote Bank 26.01.2023 10:56
The S&P500 was flat yesterday, as investors tried to make sense of the deluge of company earnings that hit the fan before, during and after the session. Microsoft didn’t gain on better-than-expected earnings, and Tesla announced record profits, but the share price jumped only 5% in the afterhours. Stocks Latest positive price action in stocks – which is now fading, and the positive price action in bonds suggest that the recession odds became less for stock traders, and more for bond traders since the start of this year. And that’s a risk for stock gains, besides earnings. Bank of Canada In central banks, Bank of Canada (BoC) hiked its bank rate by 25bp yesterday and announced to pause. The BoC decision spurred the expectation that the Federal Reserve (Fed) could do the same: hike by 25bp next week then pause. Bank of England For the Bank of England (BoE), investors are almost sure that the year will end with a 25bp hike due to the slowing economy. Australia But in Australia, the surprise rebound in Australian inflation, spurred the Reserve Bank of Australia (RBA) hawks yesterday. Summary In summary, investors’ hearts will continue to swing between slowing economy and easing inflation, and the bumps in inflation along the way.But the data will tell who is right and who is wrong. All eyes are on US GDP today! Watch the full episode to find out more! 0:00 Intro 0:47 Microsoft sold on slowing revenue warning 1:51 Tesla’s record profit sees limited reaction 3:34 Stock and bonds don’t price the same recession odds 5:11 FX update: USD down, euro, sterling, Aussie up 7:51 Chevron to buy back $75bn stocks! 9:01 Chinese have enough money to temper recession. They just need to spend it! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Tesla #Microsoft #earnings #Chevron #stock #buyback #US #GDP #data #Fed #ECB #BoE #RBA #BoC #expectations #recession #odds #USD #EUR #GBP #AUD #crude #oil #China #New #Year #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      
Bank of Japan to welcome Kazuo Ueda as its new governor

BoJ Core CPI Has Now Accelerated And Challenging The Bank Of Japan’s Stance

Kenny Fisher Kenny Fisher 26.01.2023 13:52
Tokyo CPI expected to rise Inflation has been on the rise in Japan and the trend is expected to continue with the release of Tokyo CPI later today. The headline figure is expected to rise to 4.4% in December, up from 4.0% in November, while the core rate is forecast to climb to 4.2%, up from 4.0%. Earlier this week, BoJ Core CPI, the central bank’s preferred inflation gauge, rose to 3.1%, up from 2.9% prior and above the forecast of 2.9%. BoJ Core CPI has now accelerated for 11 straight months, challenging the BoJ’s stance that inflation is transitory. The BoJ is projecting that inflation will peak at 3% in March, but this forecast seems questionable, given that rising energy and food prices have been driving inflation higher and higher. With wage growth lagging behind inflation, the cost of living is squeezing consumers, who are likely to cut back on consumption which will hurt Japan’s fragile economy. Kanda sends warning to speculators The yen has been relatively quiet over the past two weeks, but Japan’s top “currency diplomat” sent out a warning today. Vice Finance Minister for International Affairs Kanda said that sharp, one-sided moves in the currency markets would not be tolerated. Kanada oversaw the currency intervention in October after the yen had fallen close to 152 to the dollar. The yen has since rebounded and is currently trading close to 130 to the dollar. Kanda’s message is aimed at speculators, but with inflation rising and the BoJ’s ultra-loose policy looking increasingly anachronistic, speculators are likely to continue betting that the BoJ will have to tighten policy and the yen will rise as a result. The IMF had a message of its own for the BoJ, suggesting that the central bank allow more flexibility in 10-year bond yields, which would mean a shift in BoJ policy. It’s a busy day on the economic calendar, with the US releasing GDP and durable goods. GDP is expected to slow to 2.6% in Q4, which would still point to solid growth. Durable Goods is forecast to rebound and gain 2.5% in December, following a soft reading of -2.1% in November. Traders can expect some volatility from the US dollar in the North American session, as the markets have jumped on any soft readings as a signal that the Fed will have to ease up on its aggressive rate policy, and this has sent the US dollar lower. Read next: GBP/USD Pair Is Struggling To Extend Previous Highs, EUR/USD Pair Continued Its Gains| FXMAG.COM USD/JPY Technical There is resistance at 130.36 and 131.69 129.46 and 128.40 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Unraveling UK Inflation: The Bank of England's Next Move

GBP/USD Pair Is Struggling To Extend Previous Highs, EUR/USD Pair Continued Its Gains

Kamila Szypuła Kamila Szypuła 26.01.2023 12:06
The Bank of Canada's interest rate decision appears to have put sentiment risk back as markets hope other central banks will follow suit. The BoC announced a pause in interest rate hikes to assess the impact of the recent hikes on the Canadian economy. Given that the BoC was the first major central bank to raise interest rates, market participants seem to see yesterday's announcement as a sign that the Federal Reserve and the ECB may follow suit. The dollar fell to an eight-month low against its peers on Thursday as a dismal US corporate earnings season fueled recession fears ahead of many central bank meetings next week. The Fed's policy-setting committee will begin a two-day meeting next week and markets have priced in a 25 basis point (bp) rate hike, down from the central bank's 50bp and 75bp hikes recorded last year. USD/JPY The Japanese yen gained against the US dollar on Wednesday, taking advantage of the US dollar's significant weakness. Despite minor recent changes by the Bank of Japan towards policy normalization, the BoJ remains the most dovish developed central bank. USD/JPY is down for the third day in a row and touches a new weekly low around 129.00 during the Asian session on Thursday. Fresh speculation that high inflation could lead the Bank of Japan (BoJ) to be more hawkish later this year continues to support the JPY. Bets were lifted by data released last week that showed Japan's nationwide core inflation hit 4% in December - its highest annual print since December 1981. Although USD/JPY fell in the Asian session, in the European session the pair gained and traded close to 129.90. AUD/USD Trade was a bit weak as Australia was closed for the holidays. The Australian dollar's rally against the US dollar is gaining momentum on the back of rising optimism over China's reopening and rising commodity prices. AUD/USD has been trading nicely in an uptrend since October. Earlier this month, the pair rose above a key resistance. The Australian pair is doing quite well and trading above 0.7100 during the European trading session. EUR/USD EUR/USD continued its gains from yesterday, holding above 1.09 after opening in Europe. The euro gained strength against the dollar yesterday as the domino effects of the Bank of Canada's interest rate decision swept through the market. ECB Governing Council member Gabriel Makhlouf said on Wednesday: "We must continue to raise interest rates at our meeting next week - taking a similar step to our December decisions," and added that the same should happen at the next March meeting. EUR/USD remains stable at around 1.0900 during the European session. Traders refrain from placing new EUR/USD bets ahead of critical US GDP releases. Read next: Musk Intends To Cut Costs In Tesla On Everything| FXMAG.COM GBP/USD The Bank of England is set to raise interest rates by half a point to 4.0% to tackle double-digit inflation, while markets are split on how much further rates will rise beyond that. Britain's inflation rate moved further away from October's 41-year high. Meanwhile, the risk of the UK slipping into recession continued to weigh on sentiment after the latest PMI survey showed the UK business economic activity fell. GBP/USD is struggling to extend previous highs at around 1.2400 during European trading hours. The US dollar is licking its wounds with weaker US Treasury yields amid dovish Fed betting. Source: investing.com, finance.yahoo.com, dailyfx.com
Collapse of Black Sea Grain Initiative Rattles Market: Impact on Ukrainian Grain Exports

Forex: The South African Reserve Bank Meet Today And A Gawkish Statement Today Could Be Enough To Push The USD/ZAR Pair Back To The 16.90

ING Economics ING Economics 26.01.2023 10:17
Notable yesterday was the dollar selling off after the Bank of Canada said it was ready to pause/end its tightening cycle. Some in the market could be thinking the Fed is of a similar mindset. At the margin that suggests the dollar could go into next week's Fed meeting on the offered side. Today the focus is US 4Q GDP data and a rate decision in South Africa USD: Dollar can stay offered Trade-weighted measures of the dollar continue to edge lower. The catalyst for modest weakness over the last 24 hours has been the Bank of Canada's (BoC's) decision to pause and perhaps end its tightening cycle. The move saw US yields tick modestly lower and weigh on the dollar as investors considered whether the Federal Reserve was on the verge of adopting a similar position - perhaps at the 22 March FOMC meeting. Next week's Fed hike of 25bp looks locked in.  This all fits with the narrative of easing pricing pressures and a mild US recession, which could actually see the Fed easing and a weaker dollar stimulating Rest of World (RoW) growth. And the re-weighting of portfolios to RoW assets remains a key story for 2023.   For today, the data focus is on US 4Q GDP data. Our team forecasts a slightly below-consensus number and is mainly driven by lower imports and inventory building - not necessarily 'good' growth. We will also see the advanced goods trade balance for December which is expected to have widened again. Additionally, we will see the volatile durable goods orders for December and also the weekly initial jobless claims which so far are showing no signs of easing in labour market supply pressures. We are not sure that DXY is ready to break below support at 101.30 just yet. And we see next week's FOMC meeting as an upside risk to the dollar. But for the time being, expect DXY to stay offered in a 101.30-102.00 range. Chris Turner EUR: ECB blackout period finally arrives After a few wobbles, it looks like markets have finally got the message from the European Central Bank that it will be hiking by 50bp at both the February and March meetings. A further 40bp of tightening is then priced over the summer. We look for just one more 25bp hike in May which will take the deposit rate to 3.25%. The ECB now goes into a blackout period ahead of next Thursday's policy meeting - suggesting these tightening expectations may not move much further. With the market pricing a 50bp easing cycle by the Fed in the second half of the year, this combination leaves EUR/USD at the highs of the year above 1.09. As we mentioned on Monday, investors may struggle to push EUR/USD through the 1.0950/1000 area ahead of next week's FOMC/ECB risk events - though it looks like EUR/USD will stay bid.  One note of caution to the EUR/USD really, however, is that the EUR/USD risk reversal - the price investors pay for a euro call over a similar euro put option - is no longer shifting away from euro puts and in favour of euro calls. Perhaps this is a function of where the EUR/USD spot is. Yet this could suggest that investors and corporates see 1.10 as the top of a multi-month trading range. Chris Turner GBP: Peak rates? Sterling has been holding its own against the euro and the dollar. The biggest event risk for sterling over the coming months is when the Bank of England calls time on the tightening cycle. We are looking for a 50bp hike next week and then a 25bp hike in March to conclude the cycle at 4.25%. But presumably, at some point, the BoE will have to signal the top and we have already seen investors lose conviction over a peak in the cycle at 4.50%. The peak is now priced at around 4.37%. There is probably substantial short sterling positioning on the crosses in expectation of the turn in the BoE cycle. This makes for a bumpy ride. But overall we are happy with our end 1Q23 forecast for EUR/GBP at 0.89, which will probably leave cable trading towards the lower end of a 1.20-1.24 range. Look out for UK January CBI retail sales figures today - likely to confirm a downtrend on the back of weak consumer confidence and squeezed real incomes. Cable to trade well within a 1.2350-1.2450 range. Chris Turner ZAR: 50bp hike should help the rand Today sees the South African Reserve Bank meet to set interest rates. The majority of forecasters are looking for a 50bp hike to 7.50%, though a few are looking for a 25bp hike. Like many, the SARB is dealing with above-target inflation - now at just over 7% year-on-year versus the SARB's 3-6% target range. Markets price this hike as the last in the cycle and price the policy rate pretty flat at near 7% over the next three years.  Peak interest rates are music to the ears of bond investors and one of the best-performing asset classes this year is the EM local currency government bond index, currently up 4.2% year-to-date. South Africa still has a near 3% weighting in such an index, meaning that the rand should be a beneficiary should investors add to positions in EM local currency bonds. However, the rand has been underperforming this year and one would have expected the huge reversal in USD/CNY to be dragging USD/ZAR much below 17.00. That has not happened, perhaps because of the weak domestic demand outlook in South Africa amid ongoing challenges in energy supply. Yet a softer dollar environment and the China reopening story should remain a bullish cocktail for the rand and a hawkish SARB statement today could be enough to push USD/ZAR back to the 16.90 area. Medium-term, we are becoming a little more bullish on the rand. Chris Turner   Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
It Is Quite Possible That The Australian Dollar Is Tired Of Growth

It Is Quite Possible That The Australian Dollar Is Tired Of Growth

InstaForex Analysis InstaForex Analysis 27.01.2023 08:00
AUD/USD has initially consolidated in the 0.7090-0.7130 range - the body of Thursday's daily candle is fully within this range. The signal line of the Marlin oscillator starts to turn down. It is quite possible that the Australian dollar, the leader of the current week, is tired of growth and turns down from the current levels. It is possible that the price will go above the reached range, but the Federal Reserve meeting will be held on Wednesday, and in case this meeting has a hawkish tone, the US dollar will attack on all the financial fronts, and the AUD/USD pair will not reach the target level. In fact, we will get a typical false price exit above the technical resistance. On the four-hour chart, the price consolidates in the 0.7090-0.7130 range, the Marlin oscillator is in a position of having two interpretations: the formation of a small divergence (possible decline, a small correction), the decrease in the signal line of the oscillator as a discharge of the oscillator before its further growth. Further price growth as development of the current uptrend is possible once the price settles above 0.7130. The reversal may occur only when the price crosses the MACD indicator line (0.7063). This mark coincides with the local low of January 25 (gray oval).     Relevance up to 03:00 2023-01-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333405
The Data May Keep The British Pound (GBP) From Rising

The British Pound (GBP) Will Likely Cross 1.2420 Today

InstaForex Analysis InstaForex Analysis 27.01.2023 08:01
Yesterday, the pound almost closed the day at the opening level, increasingly supporting the resistance level of 1.2420. The signal line of the Marlin oscillator is sideways, but its location is still in the positive zone, which creates a higher probability of breaking this resistance today or on Monday. In this case, GBP can reach the target level of 1.2589 (a significant resistance of May-June last year). On the four-hour chart, the price returned above the balance and MACD lines. Yesterday's assumption about the price spiraling over this line is fulfilled. The Marlin oscillator is developing in the positive area, in spite of yesterday's short-term price drop. The MACD line, though weak in the current situation, still provides support. GBP will likely cross 1.2420 today. Relevance up to 03:00 2023-01-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333407
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

Analysis Of The EUR/USD Pair: There Is Growth

InstaForex Analysis InstaForex Analysis 27.01.2023 08:04
Yesterday, the euro failed to move towards the 1.0990 target and rolled back to Wednesday's initial positions. If today's U.S. consumer income/expenditure data is close to the forecast, the 1.0990 target will be much closer. Consumer spending for December is expected to be down 0.1%, while income is expected to be up 0.2% after a 0.4% gain in November. As before, the probability of forming a divergence between the price and the Marlin oscillator with the consequent reversal of the price into a medium-term decrease remains. On the four-hour chart, the price returned above the MACD indicator line after a brief (and false) move below it. The same false movement was made by the Marlin oscillator yesterday. Currently, there is growth. Expect the day to close above Wednesday's closing level.   Relevance up to 03:00 2023-01-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333409
The Price Of EUR/USD Pair Will Develop Sideways Movement

The Bears Of EUR/USD Remain Poised To Firm Their Grip Further

Oscar Ton Oscar Ton 27.01.2023 08:10
Technical outlook: EURUSD rallied through the 1.0929 highs on Thursday before finding resistance and pulling back again. The single currency pair is seen to be trading close to 1.0870 at this point in writing as the bears remain poised to firm their grip further. A drag below 1.0770 will add confidence to the bearish outlook in the near term. Ideally, prices should stay below 1.0929. EURUSD seems to have terminated its rally, which had begun from the 0.9535 low in September 2022, at the 1.0929 high. If the above scenario is correct and holds well, prices should reverse lower from here and drag towards 1.0400 at least. A bullish reversal from 1.0700 could resume the uptrend though. The instrument is looking lower for the moment. EURUSD remains well supported at 1.0481, while resistance is strong around 1.0929 as seen on the daily chart. A minimum drag below 1.0481 is now required to confirm a further bearish move. The potential targets remain towards 1.0400 and down to 1.0050 levels respectively. A high probability remains for a bullish turn from 1.0050 levels since it is the Fibonacci 0.618 retracement of the entire rally. Trading idea: Potential bearish drop against 1.1000 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310293
EUR: German IFO Data and Central Bank Hawkishness Impact Euro/USD Range Trade

The US Dollar Index Price Is Expected To Produce A Bearish Reaction

Oscar Ton Oscar Ton 27.01.2023 08:15
Technical outlook: The US dollar index dropped through the 101.11 lows on Thursday, re-testing its earlier swing low of January 18, 2023, before finding bids again. The index is seen to be trading close to 101.60 at this point in writing as the bulls prepare to come back in control. A push above the 102.50 short-term resistance will add further confidence to the bullish setup. The US dollar index might have terminated its larger-degree drop just ahead of 101.00. The entire drop, which had begun from the 114.70 highs, should be retraced towards 106.50 up to 109.50 in the next several trading sessions. On the flip side, if the price consistently breaks below 101.00, it would continue further towards 100.00 and lower. The US dollar index is facing strong resistance at 105.35 as marked on the daily chart here. A push-through will confirm and add further confidence in the bullish setup. The price is expected to produce a bearish reaction if they reach 109.50 since it is the Fibonacci 0.618 retracement of the entire drop between 114.70 and 101.11 respectively. Trading idea: Potential bullish rally against 100.00 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310301
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

An Even More Complex Correction Of The EUR/USD Pair Could Take Place

Torben Melsted Torben Melsted 27.01.2023 08:18
EUR/USD moved a bit closer to the ideal target at 1.0933. However, topping at 1.0929 is more than enough to fulfil the 1.0933 target. We expect wave B to be complete and will look for a decline in wave C over the coming days/weeks into the corrective target area between 1.0437 - 1.0500 to complete wave 4. That said we still have to remember that even if we see the expected corrective decline to the 1.0437 - 1.0500 area, an even more complex correction could take place, but for now, we will be looking for a break below minor support at 1.0835 as confirmation that wave B has completed and wave C is in motion.   Relevance up to 06:00 2023-01-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310311
Bond Markets Feeling Weighted: US 10-Year Yield Still Pressured

The Entire Movement Of EUR/USD Pair Still Looks More Like A Flat

Paolo Greco Paolo Greco 27.01.2023 08:28
M5 chart of EUR/USD EUR/USD did not show any interesting movements on Thursday. The price was still moving slightly above the critical line, and the entire movement still looks more like a flat than a trend. The pair surged at the beginning of this week, which many regarded as resumption of the uptrend. Actually, the price has simply moved into a horizontal channel just above the previous one. Therefore, we are dealing with a non-standard flat. Yesterday, there were some interesting reports in America. As we mentioned in our fundamental articles, all the four reports, which could interest the traders at least a little bit, were better than forecasts, some of them were much better. However, the U.S. currency failed to benefit from it. In particular, the GDP report showed the economy growing at 2.9%, not 2.6% as forecasted. But the market still refuses to buy the dollar. Thursday's trading signals were average. There were two signals near the 1.0864-1.0868 area, which could be taken as a rebound, but it was so inaccurate... Thus, traders could open a short position first and then a long position. Loss was made on the first trade, as the price failed to pass even 15 points in the right direction, and a small profit was made on the second trade, which made it possible to offset the loss on the first trade. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 10,300, whereas the number of short positions fell by 2,300. Thus, the net positions decreased by 8,000. Now the number of long positions is higher than the number of short positions opened by non-commercial traders by 127,000. From a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 52,000 (711,000 vs. 659,000). H1 chart of EUR/USD The technical picture on the one-hour chart remains unchanged. We can see that the pair maintains the bullish sentiment, and is located above the lines of the Ichimoku indicator. However, the pair was mostly flat, whether there was macro data or not. Thus, the euro can not rise, but it is not willing to fall as well. It looks like everything will be decided next week. We have set the last digestible value of the Ichimoku indicator lines, because it can merge during a flat and can also be very weak. On Friday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137 and also Senkou Span B lines (1.0825) and Kijun Sen (1.0854). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 27, the EU will host another speech by European Central Bank President Christine Lagarde, of which there have been 4 or 5 over the past two weeks, and there will be several reports in America, not the most important ones. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 05:00 2023-01-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333417
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The GBP/USD Pair Has Failed To Break The Uptrend

Paolo Greco Paolo Greco 27.01.2023 08:34
M5 chart of GBP/USD GBP/USD moved mostly sideways than up or down on Thursday. If you look at the pair's movements over the past two weeks, it seems more like a flat, and a fairly wide one at that. The horizontal channel's limits could be 1.2288 and 1.2429. But whether it's wide or narrow doesn't change the matter. The pound keeps moving sideways as well, keeping the uptrend and staying near to its local highs. Yesterday, traders had good reasons to buy the dollar. But the fall was only local, intraday in nature. If there were no US reports, the movements could be the same. Therefore, you should keep in mind that the market interprets the macro data either in favor of the pound, or they don't pay attention to reports at all. It looks like everything will be decided next week since the Bank of England and Federal Reserve are set to hold meetings then. Speaking of trading signals, they turned out to be very good. At first, the pair reached the level of 1.2429, rebounded from it, and traders could open a short position using this signal. Then the price fell to 1.2342-1.2354, from which it also bounced. Traders could gain about 50 pips on the first trade, and they could open a longs on the second signal, which also turned out to be profitable. Its profit level depended on where the traders closed it manually. COT report The latest COT report showed a decrease in bearish sentiment. During the given period, non-commercial traders opened 5,500 long positions and as many as 700 short positions. Thus, the net position increased by 4,800. This figure has been on the rise for several months, and the sentiment may become bullish in the near future, but it hasn't yet. Although the pound has grown against the dollar for the last few months, from a fundamental perspective, it is difficult to answer why it keeps rising. On the other hand, it could fall in the near future (in the mid-term prospect) because it still needs a correction. In general, in recent months the COT reports correspond to the pound's movements so there shouldn't be any questions. Since the net position is not even bullish yet, traders may continue to buy the pair over the next few months. Non-commercial traders now hold 41,500 long positions and 66,000 short ones. I remain skeptical about the pound's long term growth, though there are technical reasons for it. At the same time, fundamental and geopolitical factors signal that the currency is unlikely to strengthen significantly. H1 chart of GBP/USD On the one-hour chart, GBP/USD tried to break the uptrend but failed. So, now we have to wait for the pair to settle below the Kijun-Sen line, afterwards we need to overcome the Senkou Span B. Without that there is no reason to expect a strong decline. It still has no specific reasons for growth, but the market stays bullish on the threshold of the Fed and BoE meetings. In parallel, the market is moving in the horizontal channel. On January 27, the pair may trade at the following levels: 1.2106, 1.2185, 1.2288, 1.2342, 1.2429-1.2458, 1.2589, 1.2659. The Senkou Span B (1.2268) and Kijun Sen (1.2354) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. There are no important developments scheduled for Friday in the UK, but the US will release several minor reports, including Consumer Sentiment Index from University of Michigan as well as Personal Income and Personal Expenditures. I don't expect traders and investors to react to such data so the pair will probably remain flat. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 06:00 2023-01-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333419
The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

The ECB President Christine Lagarde's Speech Could Bring Back Risk Appetite

Jakub Novak Jakub Novak 27.01.2023 08:38
Analysis of transactions and tips for trading EUR/USD The test of 1.0902 occurred when the MACD line was just starting to move below zero, which was a pretty good signal to sell. It led to a price decrease of around 20 pips. Sometime later, another test took place, but this time it was at 1.0861 and has led to a price increase of about 30 pips. No other signals appeared for the rest of the day. The strong US GDP report boosted dollar up on Thursday, halting the bull market for EUR/USD. Most likely, this momentum will continue today as nothing could affect market volatility, not even the upcoming data on the M3 monetary aggregate and private sector lending in the eurozone. Of course, ECB President Christine Lagarde's speech could bring back risk appetite, but it will be much later in the week. More exciting reports await in the afternoon, namely the core PCE index, the Fed's preferred inflation figure, the change in spending levels and personal income, the consumer sentiment index, and inflation expectations index from the University of Michigan. Good readings will raise dollar demand further, which will lead to a decline in EUR/USD, similar to that of yesterday's. For long positions: Buy euro when the quote reaches 1.0890 (green line on the chart) and take profit at the price of 1.0925. Growth could occur if the economic data for the Euro area comes out better than expected. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0852, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0890 and 1.0925. For short positions: Sell euro when the quote reaches 1.0852 (red line on the chart) and take profit at the price of 1.0816. Pressure will increase if the upcoming US data exceeds expectations. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0890, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0852 and 1.0816. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.       Relevance up to 06:00 2023-01-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333425
China Restricts Gallium and Germanium Exports, Heightening Global Tech War

FX Daily: US pessimism softens ahead of a busy week

ING Economics ING Economics 27.01.2023 09:15
Markets' concerns about the US growth picture seemed to have eased, paving the way for a modest recovery in the dollar. Next week could, however, see a larger upside USD correction as the FOMC appears to have more room to surprise on the hawkish side compared to the ECB. Elsewhere, SEK is benefitting from good eurozone data, but domestic figures have lagged A 50bp hike by the ECB next week looks like a done deal, and we expect President Christine Lagarde to maintain a hawkish tone USD: Gearing up for an upside correction? The year started quite poorly for the US growth story, but the past couple of weeks have – at least – not given reasons to be even more pessimistic. Yesterday, growth figures in the US were slightly above consensus, and durable goods orders came in strong. We recommend reading our US economist’s note on those releases though, as a deeper look tells a different story than what the headline figures suggest. The week ends with December data on personal income and spending, as well as the PCE deflator, which are all expected to have decelerated.  The dollar did find some support yesterday after markets read US data as encouraging, and should enter a week packed with less bearish momentum. There is probably more room for the FOMC to surprise on the hawkish side compared to the ECB next week, and we could see an upside correction in the dollar materialise. For today, we can expect some consolidation around 102.00 in DXY. Francesco Pesole EUR: Still counting on the 1.0850 floor We have highlighted over the past few days how levels around 1.0850 in EUR/USD seemed to have formed a buy-the-dip floor for the pair. Yesterday’s price action added evidence that this is indeed the case, and we may have to wait for some more sizeable downshifting in USD bearishness in the run-in or after the FOMC meeting next week to witness a decisive break to the downside in EUR/USD. There are no market-moving data releases in the eurozone today, and some focus may only be on Spanish growth numbers this morning. Our economics teams published the ECB preview yesterday. A 50bp hike next week looks like a done deal, and we expect President Christine Lagarde to maintain a hawkish tone and push back against rate cut speculation. The recent communication hiccups however suggest the impact on the euro may not be too pronounced. Francesco Pesole SEK: Dealing with softer domestic data Sweden’s jobs and retail sales were released this morning and came in on the weak side. Unemployment ticked higher to 7.5% and retail sales were down 8% year-on-year in January. Earlier this week, the Economic Tendency index had pointed to a deterioration in the growth picture at the start of the year (while surveys in the eurozone were quite upbeat), although consumer confidence rebounded. SEK has not experienced much weakness as the data flow seemed to deteriorate, even though markets are no longer fully pricing in a 50bp hike by the Riksbank at the 9 February meeting. The solid growth story in the eurozone is probably offsetting the repricing lower in rate expectations. We recently published a scenario analysis for EUR/SEK in 2023. Our core view is that a gradual descent towards 10.50 will materialise by the third quarter. Francesco Pesole HUF: Rating decision will determine the future path of the forint The calendar in the CEE region is empty for Friday and it will be more interesting after the end of trading today. In Hungary, S&P will publish a rating review that will have the market's attention more than usual. A week ago, Fitch – surprisingly for us – downgraded the rating outlook from stable to negative, which highlights the question of whether Hungary has made sufficient progress in negotiations with the European Union for rating agencies. It is the slower absorption of EU funds that seems to have been the main reason for Fitch's decision. S&P has already held a negative outlook since last August and it was the inflow of EU funds that was the main risk of the latest review. Moreover, we expect S&P's new forecast to be revised to the downside in both GDP growth and the fiscal outlook. While we see downgrade risks high, our base case is for an unchanged rating today. With Fitch's recent decision, we think today's review will attract a lot of market attention and will be key for the future development of the forint. Given the heavy long positioning, we can expect an asymmetric reaction in the 385-395 EUR/HUF range. Frantisek Taborsky Read this article on THINK TagsSEK HUF FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Assessing 'Significant Upside Risks to Inflation': Insights from FOMC Minutes

Federal Reserve: Back to 25bp hikes as slowdown fears mount

ING Economics ING Economics 27.01.2023 09:19
Last year saw the most aggressive policy tightening path in four decades, but Fed officials have laid the groundwork for more modest 25bp hikes in February and March. Recessionary forces are building though and inflation looks set to slow sharply from here, implying rates cuts will be on the agenda later in the year US Federal Reserve Chair Jerome Powell 25bp with more still to come Having raised the Fed funds target range by 425bp in 2022, including 75bp and 50bp moves, expectations are firmly centred on the Federal Reserve opting for a more modest 25bp interest rate increase on Wednesday – taking the target range to 4.5-4.75%. While inflation is still well above target and unemployment is at a cycle low, there are signs that the economy is responding to tighter monetary policy and the Fed will be cognisant of fears that hiking rates too hard and fast risks toppling the economy into recession. Officials certainly appear to be backing "standard" 25bp increases from now on after enacting their most aggressive hiking cycle for 40 years, but most are warning that there is still more work to be done. Consequently, we expect to hear that ongoing interest rate hikes are "appropriate" with the balance sheet shrinking strategy remaining in place. Scenarios for the Federal Reserve meeting Source: ING   Officials are unlikely to switch to a “data dependency” narrative just yet, fearing that adopting too dovish a line could fuel market expectations for eventual rate cuts. In turn, this could lead to an unwanted loosening of financial conditions that contribute to inflation staying higher for longer. Conversely, signalling 25bp but then hiking by a more aggressive 50bp would generate a large risk-off reaction with sharply higher borrowing costs. The majority of the committee would likely consider this too risky an option given the potential to intensify recessionary forces that could end up excessively dampening inflation. With no new Federal Reserve forecasts at this meeting, the accompanying press conference is likely to re-affirm that it is appropriate to move in smaller 25bp steps from now on and we are not at the endpoint yet. The Fed could over and/or under-hike other rates for technical reasons, but likely won't Apart from the headline funds rate range of 4.25% to 4.50%, the Fed will also adjust higher the rate on the reverse repo facility and on excess reserves. These are currently at 4.3% and 4.4% respectively, and are often seen as the tighter corridor within which the effective fed funds rate sits (currently 4.33%). There is constant speculation on the likelihood of the Fed deciding to under-hike the rate on the reverse repo facility, to bring it to flat to the fed funds floor (it’s currently 5bp over). The logic would be to encourage less use of this facility, which routinely takes in US$2tr in excess liquidity on a rolling daily basis. However, in all probability, repo would simply trade down to the same area, without a material effect on volumes. There is a similar argument to instead over-hike the rate on excess reserves, say by 30bp (instead of 25bp). The idea here would be to encourage a downsize in the use of the reverse repo facility in place of an upside in bank reserves (higher relative remuneration). This would allow the Fed to better manage bank reserves, ensuring that it doesn't fall too fast, as it gradually ratchets its balance sheet lower through the ongoing soft quantitative tightening programme (as it allows $95bn of bonds per month to roll off the front end). In all probability, it won’t do this either. It is already a 10bp spread between the reverse repo window and the excess reserves one, and widening that to 15bp might not make a material difference. That said, a spread of 20bp just might, and is something the Fed could consider down the line i.e. under-hiking the reverse repo rate and over-hiking the rate on excess reserves. On this occasion, there would be quite a surprise if it did anything along these lines, at least not at this juncture. The Fed could also upsize the quantitative tightening agenda, but likely won't either The Fed has also been quite quiet on the balance sheet roll-off programme. It seems that’s the way it likes it – churning away quietly in the background, and not causing too many market ripples. The big question in this space is whether the Fed could consider outright selling some bonds off its books, and thereby engage in a harder version of quantitative tightening. It would be huge if it did. There is certainly an appetite for bonds in the market if the recent Treasury auctions are anything to go by. However, such selling of bonds outright would likely be a step too far at this juncture, as it would likely generate a tantrum. But it's always there should the Fed start to feel that the fall in longer-dated market rates is acting contrary to its hiking efforts on the front end. Even a mention that it is looking at this down the line would have a material effect. Not expected, but these are potential market movers that we need to cross off as the meeting outcome unfolds. Importantly, any mention of potentially upsizing the bond roll-off in the future or considering any bond selling (e.g. of the longer-dated mortgage portfolio) would signal it was uncomfortable with where longer-dated market rates are at. But the outlook is darkening and the peak is close We think that the Fed will probably hike once more on 22 March, but that will mark the top for the policy rate. We are concerned that signs of a slowdown will spread and intensify with a recession our baseline forecasts. Residential construction has fallen in each of the past six months, industrial production has been down for the past three months and retail sales have dropped by 1% or more in both November and December. Unfortunately, business surveys offer no hint of a turn with both the manufacturing and service sector ISM indices in contraction territory and the Conference Board’s measure of CEO confidence at the most depressed level since the Global Financial Crisis – a clear signal that businesses will be focusing more on cost-cutting rather than revenue expansion this year. At the same time, the heavy weighting of shelter and vehicles within CPI and clear signs of softening corporate pricing power mean that inflation will be close to 2% by the end of this year. Rents have topped out in most major cities while vehicle prices are now falling, with the National Federation of Independent Businesses survey on price intentions pointing to a sharp slowdown in core inflation through the second quarter into the third quarter of this year. As for the jobs market, while headline payrolls growth remains impressive there are flashing warning lights with the temporary help component reporting falling employment numbers in each of the past five months. This is concerning because this grouping of workers is typically easier to hire and fire by the nature of the position so they tend to lead broader shifts in payrolls. Worryingly, the declines are getting bigger each month, suggesting the momentum in the jobs market is souring. In an environment of weak activity, falling inflation, and mounting job losses, we doubt the Fed will raise rates beyond March with rate cuts the order of the day from the third onwards. FX: Things are getting interesting It has been pretty much one-way traffic for the dollar bear trend since early November. Clear signs of easing US price pressures and a slowing economy have upended the prior narrative of a Fed forced to tighten into a recession. Risk assets have rallied strongly. Data shows that the EUR/USD six-hour reaction to last year’s Federal Open Market Committee (FOMC) decisions triggered moves of anywhere between +/- 0.7%. And the FX options market has a 90 pip range priced for EUR/USD over the period which covers both the Fed and the ECB meetings next Wednesday/Thursday.  We were about to say that an expected 25bp rate hike from the Fed and a relatively unchanged statement would have little impact on FX markets. Yet we have just seen FX markets move on the Bank of Canada’s decision to halt its tightening cycle at 4.50%. The dollar was marked lower on this decision, presumably on the minority view that the Fed could also be ready to call time on its tightening cycle. This suggests that the FOMC meeting could prove more interesting than the market has priced. Our base case would assume that EUR/USD continues to trade near 1.08/1.09 after the FOMC meeting. Any suggestion that the Fed was virtually done tightening could send EUR/USD through 1.10. While aggressive Fed push-back against the 50bp of 2023 easing already priced by the market could briefly send EUR/USD to 1.07. In the bigger picture, we expect EUR/USD to head higher this year – perhaps to the 1.15 area in the second quarter – this will be the time when US inflation is falling more sharply and China re-opening is providing a tailwind to the pro-cyclical currencies, including the euro. Read this article on THINK TagsUS Recession Interest rates Federal Reserve Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Analysis Of USD/CHF Pair: The Swiss Currency Pair Rebounds

Analysis Of USD/CHF Pair: The Swiss Currency Pair Rebounds

TeleTrade Comments TeleTrade Comments 27.01.2023 09:21
USD/CHF picks up bids to extend the previous day’s rebound from weekly low. Convergence of 200-SMA, support-turned-resistance line and a descending trend line from early January appears tough nut to crack for bulls. Impending bull cross on MACD, sustained bounce off 23.6% Fibonacci retracement suggest further recovery. USD/CHF grinds higher past 0.9200, mildly bid while extending the previous day’s rebound from the week’s low during early Friday. In doing so, the Swiss currency pair rebounds from the 23.6% Fibonacci retracement level of its January 06-18 downside, near 0.9160 by the press time. It’s worth noting that the looming bull cross on the MACD adds strength to the USD/CHF rebound from 0.9160 support, which in turn signals further advances of the pair. As a result, the 200-SMA, downward-sloping resistance line from early January and the one-week-old previous support line, close to 0.9255-60, appear the key hurdle for the USD/CHF bulls before retaking control. In a case where the pair rises past 0.9260, the odds of witnessing a run-up toward the monthly high near 0.9410 can’t be ruled out. However, the 61.8% Fibonacci retracement level near 0.9285 and the 0.9300 round figure may act as intermediate halts during the expected rally. Alternatively, pullback moves need to conquer the 23.6% Fibonacci retracement level surrounding 0.9160 to retake control. Following that, a downward trajectory towards the monthly low surrounding 0.9085 can’t be ruled out. It should be observed, however, that the USD/CHF weakness past 0.9085 makes it vulnerable to declining toward the August 2021 low near 0.9020. Read next: Trump Returns To Social Media, Meta Will Restore The Former President's Account| FXMAG.COM USD/CHF: Four-hour chart Trend: Limited recovery expected
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The USD/INR Pair Is Expected To Extend Gains

TeleTrade Comments TeleTrade Comments 27.01.2023 09:27
USD/INR has surpassed the critical hurdle of 81.60 amid sheer recovery in the USD Index. Anxiety ahead of the US PCE data has trimmed the risk appetite of the market participants. Softening US core PCE price index might not surprise investors as core US CPI and PPI were also trimmed. The USD/INR pair has witnessed a respopsive buying interest after droping to near 81.40. The asset has been scaled above 81.60 and is expected to extend gains, following the footprints of the US Dollar Index (DXY). The risk appetite of the amrket participants has dropped significantly as investors are shifting their focus towards the announcmenet of the interest rate decision by the Federal Reserve (Fed). But before that, investors will keep an eye over the release of the United States Personal Consumption Expenditure (PCE) Price Index (Dec) data. Reuters estimates show that markets expect the core PCE inflation, which excludes volatile food and energy prices, to rise 0.3% on a monthly basis and forecast the annual rate to decline to 4.4% from 4.7% in November. A decline in the economic data shouldn’t surprise investors as Decembers’ core Producer Price Index (PPI) and Consumer Price Index (CPI) have already dropped significantly. Read next: Trump Returns To Social Media, Meta Will Restore The Former President's Account| FXMAG.COM Volatilty triggered in the market ahead of the Fed’ monetary policy has accelerated selling pressure in the risk-perceived assets. S&P500 futures have dropped sharply amid pessimism that further interest rate hikes by Fed chair Jerome Powell will accelerate recession fears. Firms will be forced to halt their recruitiment process or might look for laying-off employees in anticipation of weaker demand projections. On the Indian Rupee front, fresh development over digital currency announced by the Reserve Bank of India (RBI) is impacting the Indian Rupee. RBI Executive Director Ajay Kumar mentioned that digital currency will further bolster the digital economy, make payment system more efficient.
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

TeleTrade Comments TeleTrade Comments 27.01.2023 09:36
USD/CAD portrays corrective bounce from seven-month-old ascending support line. Downbeat oscillators, 38.2% Fibonacci retracement and previous support line guards recovery moves. 100-DMA holds the key to buyer’s conviction while break of 1.3300 could aim for 200-DMA. USD/CAD picks up bids to pare recent losses around the lowest levels in 11 weeks, mildly bid near 1.3340 heading into Friday’s European session. In doing so, the Loonie pair bounces off an upward-sloping support line from early June 2022. However, a convergence of the previous support line from mid-November and the 38.2% Fibonacci retracement level of the pair’s April-October upside, near 1.3380 by the press time, restricts USD/CAD pair’s recovery. Other than the aforementioned key resistance confluence near 1.3380, the bearish MACD signals and the downward-sloping RSI (14) also challenge the Loonie pair’s corrective bounce. Even if the USD/CAD buyers manage to cross the 1.3380 hurdle, the 100-DMA surrounding 1.3525 will be crucial to stop the upside momentum, a break of which won’t hesitate to challenge the monthly high of near 1.3685. On the flip side, a daily closing below the stated multi-month-old support line, close to 1.3300 at the latest, could quickly fetch the USD/CAD pair towards the 200-DMA support of around 1.3210. In a case where the USD/CAD remains bearish past 1.3210, the 1.3200 round figure may act as the last defense of buyers before relinquishing control. USD/CAD: Daily chart Trend: Limited recovery expected
Analysis Of The EUR/JPY Pair Movement

The US Core PCE Data Will Be Crucial For The USD/JPY Pair

TeleTrade Comments TeleTrade Comments 27.01.2023 09:38
USD/JPY retreats towards intraday low, reverses the previous day’s corrective bounce. BoJ extends five-year loans against collateral to financial institutions to defend YCC as JGB rallied after Tokyo inflation. US Dollar traces firmer yields ahead of US Core PCE Price Index for December. USD/JPY prints mild losses around 130.00, after a failed attempt to recover, as the Bank of Japan (BoJ) marks a show of Yield Curve Control (YCC) during early Friday morning in Europe. In doing so, the Japanese central bank extends five-year loans against collateral to financial institutions, from February 01, 2023, to 2028. The BoJ activity could be linked to a jump in the 10-year Japanese government bond (JGB) yield to 0.50% after Tokyo Consumer Price Index (CPI) refreshed a 42-year high of 4.3% for January. It’s worth noting that this is the BoJ’s second attempt in January to defend the YCC policy, which in turn suggests further challenges for the ultra-loose monetary policy of the Japanese central bank. Contrary to the BoJ action, a run-up in the US 10-year Treasury bond yields and the market’s rush towards risk-safety, mainly after Thursday’s upbeat US growth numbers, challenges the USD/JPY bears. On the same line could be the cautious mood ahead of the Federal Reserve's (Fed) favorite inflation number, namely the US Core Personal Consumption Expenditures (PCE) – Price Index for December, expected to remain unchanged at 0.2% MoM. Against this backdrop, the US 10-year Treasury yields extend the previous day’s recovery to 3.52% while the S&P 500 Futures print mild losses. That said, Japan’s Nikkei 225 drops 0.12% on a day as it snaps a five-day uptrend. Looking forward, the US Core PCE data will be crucial for the USD/JPY pair as the Fed is ready to announce another 0.25% rate hike in the next week. It should be noted that the downbeat US inflation precursor could confirm the market’s dovish expectations from the US central bank and may exert more downside pressure on the Yen pair. Also read: US December PCE Inflation Preview: Is there room for further US Dollar weakness? Technical analysis Multiple failures to cross the 21-DMA surrounding 130.00 keeps pushing USD/JPY down even as a fortnight-old support line, close to 128.80 at the latest.
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The Aussie Pair Investors Have Turned Risk Averse Ahead Of The Release Of The US PCE Price Index Report

TeleTrade Comments TeleTrade Comments 27.01.2023 09:46
Investors have turned risk-averse ahead of the US PCE Price Index data. The formation of an Ascending Triangle indicates sheer volatility contraction. The RSI (14) has shifted into the 40.00-60.. range, which indicates an exhaustion in the upside momentum. The AUD/USD pair has corrected sharply to near 0.7100 in the early European session. The Aussie asset has sensed selling pressure as investors have turned risk averse ahead of the release of the United States Personal Consumption Expenditure (PCE) Price Index data. Meanwhile, an improvement in the safe-haven’s appeal has strengthened the US Dollar Index (DXY). S&P500 futures has demonstrated a sell-off as further interest rate hikes by the Federal Reserve (Fed) might accelerate recession fears. The 10-year US Treasury yields has added gains further to near 3.53%. On an hourly scale, AUD/USD is oscillating in an Ascending Triangle chart pattern that indicates a sheer contraction in volatility. The upward-sloping trendline of the chart pattern is plotted from January 25 average price at 0.7061 while the horizontal resistance is placed from January 26 high around 0.7140. The 20-period Exponential Moving Average (EMA) at 0.7110 has overlapped the asset, which indicates a rangebound acution profile. Read next: Trump Returns To Social Media, Meta Will Restore The Former President's Account| FXMAG.COM It is observed that the Relative Strength Index (RSI) (14) has shifted into the 40.00-60.00 range from the bullish range of 60.00-80.00, which conveys that the bullish momentum has faded now. Should the asset breaks above January 26 high at 0.7142, Aussie asset will deliver a breakout the Ascending Triangle, which will drive the major towards the round-level resistance of 0.7200. A breach of the latter will expose the asset for more upside toward June 3 high at 0.7283. On the contrary, a downside move below December 29 low at 0.6710 will drag the major further toward December 22 low at 0.6650 followed by November 21 low at 0.6585. AUD/USD hourly chart
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The EUR/GBP Pair Is Likely To Witness Further Recovery

TeleTrade Comments TeleTrade Comments 27.01.2023 09:51
EUR/GBP takes the bids to refresh intraday low after snapping two-day downtrend. Convergence of 200-EMA, immediate descending trend line guards recovery moves. 50% Fibonacci retracement appears the key support for bears to watch. EUR/GBP bulls struggle to retake control as the cross-currency pair renews intraday high near 0.8785 heading into Friday’s European session. In doing so, the quote jostles with the 200-bar Exponential Moving Average (EMA) and a downward-sloping resistance line from Wednesday, close to the 0.8785-90 hurdle. It’s worth noting that the receding bearish bias of the MACD and the RSI (14) attempt to regain the 50 level keeps the EUR/GBP buyers hopeful. Also luring the EUR/GBP bulls could be the cross-currency pair’s bounce off the 50% Fibonacci retracement level of December 01, 2022, to January 13, 2023 upside, close to 0.8720. Hence, the quote’s one more attempt to break the two-week-old resistance line, around 0.8840 by the press time, can’t be ruled out. Following that, a run-up to the monthly peak of 0.8897 becomes imminent. Meanwhile, the EUR/GBP pair’s fresh weakness remains unimportant till it stays beyond the 50% Fibonacci retracement level of 0.8722. In a case where EUR/GBP remains bearish past 0.8720, the 61.8% Fibonacci retracement level, also known as the golden ratio, could act as the last defense of the buyers around 0.8680. Overall, EUR/GBP is likely to witness further recovery but the bulls are far from retaking control. EUR/GBP: Four-hour chart Trend: Corrective bounce expected
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

The Modest Strength Of The US Dollar Acts As A Headwind For The NZD/USD Pair

TeleTrade Comments TeleTrade Comments 27.01.2023 09:59
NZD/USD surrenders modest intraday gains amid the emergence of some buying around the USD. Thursday’s upbeat US macro data fuels hawkish Fed expectations and underpins the greenback. A positive risk tone acts as a headwind for the buck and offers support to the risk-sensitive Kiwi. The NZD/USD pair continues with its struggle to find acceptance above the 0.6500 psychological mark and seesaws between tepid gains/minor losses on Friday. The pair trades around the 0.6485-0.6480 region during the early European session and remains well within a familiar trading range. A modest US Dollar strength is seen as a key factor acting as a headwind for the NZD/USD pair, though a generally positive tone around the equity markets limits the downside for the risk-sensitive Kiwi. The greenback draws some support from the mostly upbeat US macro data released on Thursday, which backs the case for the Fed to maintain its hawkish stance for longer. This leads to a further recovery in the US Treasury bond yields and underpins the buck. The robust economic indicators, meanwhile, boost investors' confidence and acts as a headwind for the safe-haven greenback. Furthermore, the markets still seem convinced that the US central bank will slow the pace of its policy tightening. The CME's FedWatch Tool points to a nearly 90% probability for a smaller 25 bps rate hike at the upcoming FOMC meeting next week. This further contributes to capping the greenback and lends support to the NZD/USD pair. Traders might also be reluctant to place aggressive bets and prefer to wait for the release of the US Core PCE Price Index - the Fed's preferred inflation gauge. This, along with the US bond yields and the broader risk sentiment, might influence the USD and provide some impetus to the NZD/USD pair. The fundamental backdrop, meanwhile, warrants some caution before confirming that the pair has topped out and positioning for any meaningful corrective pullback.
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Visa Earnings Beat Expectations And Mastercard Report Was Still Below Expectations

Saxo Bank Saxo Bank 27.01.2023 10:31
Summary:  The market mood remained upbeat yesterday, with US equities posting their highest close since early December, although an ugly earnings report after hours took chip giant Intel down nearly 10%. Treasury yields rebounded in the US after the lowest weekly jobless claims number since last May and a firmer than expected first estimate of Q4 GDP. The good mood was not shared by India, where equities tumbled after an attack by a short-shelling outfit on Adani’s network of companies.   What is our trading focus? Equities: US equity hits new highs since early December, but weak Intel weighs after hours The market rallied again yesterday, closing at new high since early December, with a broad advance across most sectors. The rally took the S&P to within hailing distance of the next key resistance area, the range highs into 4100, while the tech-heavy Nasdaq 100 closed just a hair above its 200-day moving average on the cash index and north of 12,000, the highest close since last September. A weak earnings report from Intel (more below) marred sentiment in late trading as the chip giant’s shares were marked sharply lower. Hong Kong’s Hang Seng (HIF3) consolidated, holding onto weekly gainsy Hang Seng Index fluctuated between modest gains and losses after yesterday’s strong post-holiday rally and ahead of the resumption of trading in the mainland bourses on Monday. High-frequency data on multi-mode traveling activity and holiday consumption continued from various sources continued to be positive and pointed to a solid recovery. Chinese developers and Macao casino operators were among the top gainers. Country Garden (02007), rising nearly 6%, was the best performer within the benchmark Hang Seng Index after the developer secured a 3-year bank loan. FX: USD avoids further drop on strong US data The latest weekly US jobless claims posted a new low for the cycle at 186k and since May of last year, with the first Q4 GDP estimate marginally stronger than expected. This helped US treasury yields rebound slightly and generally helped the USD avoid a further drop, although volatility in US yields has eased. EURUSD can’t seem to decide whether to take out 1.0900 after having criss-crossed the level for several days running, just as GBPUSD has been unable to take 1.2400 and the pivot high of 1.2446 from December after several over the last seven trading days, and USDJPY has meandered without conviction in the 130.00 area, with new lows in US long yields or some further indication of policy action from the Bank of Japan or both likely needed to post new lows. A dip back below 129.70 was seen in early Asia as Tokyo CPI for January came in above expectations. The next event risk for USD traders is today’s December PCE inflation data release ahead of the Fed meeting next week where the broad consensus is still for a step down to a 25bps rate hike.  Crude oil (CLG3 & LCOH3) prices range-bound Crude oil trades near unchanged on the week with an underlying positive sentiment, as China demand optimism offsetting slowdown and recession risks elsewhere. Trafigura Group sees “a lot of upside” for oil markets as pent-up demand is unleashed, especially as Chinese consumption rebounds after the nation dismantled its strict Covid Zero policy. The market is also focusing on a potential risk to supply from EU sanctions on Russian fuel shipments from February 5, and a plan under consideration to introduce a price cap on diesel at $100 a barrel against a current market price of $130. Brent is currently trading within nine-dollar wide up trending channel within a medium-term downtrend, both offering firm resistance in the $89-$90 area. Ahead of channel support at $80.35 some support is likely to be provided by the 21- and 50-day moving averages, currently around $83.50.  Gold (XAUUSD) rejected at $1950  Gold is heading for its first, albeit small, weekly loss in six weeks and following Thursday’s rejection at $1950 an upbeat US GDP report for Q4 and a still-low initial claims weekly print helped send yields and the dollar a tad higher, thereby reducing the appeal. Given gold’s steep ascent during the past two months a period of consolidation is long overdue and whether it’s consolidation or correction will depend on the yellow metals ability to hold trendline and the 21-day moving average both currently around $1890. Watching ETF holdings which reached an 11-week high following a modest increase, and US breakeven and inflation swaps which have started to move higher, thereby challenging the markets outlook for sub-2.5% inflation. Focus now turns to next week's FOMC and in the meantime the dollar remains the key source of short-term trading strategies. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) rose on stronger-than-expected economic data  U.S. Treasures sold off after the release of overall stronger-than-expected economic headlines. Real GDP grew at 2.9% annualized in Q4, faster than the 2.6% median forecast though more than half of the increase came from a rise in inventories. Initial jobless claims surprisingly fell further to 186K the lowest print since last May. New home sales rose 2.3% sequentially against expectations for a decline. Durable goods orders grew 5.6% M/M while the median forecast expected a decline. The 7-year auction had strong demand with a strong bid-to-cover ratio of 2.69 times and was awarded 2bps richer than the market level at the time of the auction. Yields on the 2-year notes settled 6bps higher at 4.18% and the 10-year bounced back to 3.49% on the close and rose to 3.52% into early European hours What is going on? IMF urges the Bank of Japan to consider policy flexibility  The BOJ should consider increasing flexibility in long-term yields, the IMF said, highlighting that the risks to inflation are tilted to the upside with exceptionally high uncertainty. Options include raising its 10-year yield target, widening the trading band, switching back to a quantity goal for bond buying and aiming at a shorter-maturity yield. Japan needs to see a 3% across-the-board rise in nominal wages to anchor CPI above the BOJ's 2% target, fund Deputy MD Gita Gopinath said. Intel sent nearly 10% lower after hours on revenue miss, dire forecast The chip giant reported weaker than expected results for Q4, as it continues to deal with the post-pandemic slump in demand after the work-from-home and IT infrastructure upgrade wave boosted sales the prior two years. Even worse, the company posted a revenue forecast for the current quarter at $10.5 to $11.5 billion, far short of consensus estimates of $14 billion (the year ago quarter was north of $18 billion). In part, the weak estimate is due to customers having stockpiled significant inventories that must be worked through before demand for components rises again. The company predicted an earnings loss of 15 cents/share for the upcoming quarter as well, the first such prediction in decades. Indian stocks crater further on Hindenburg short-seller report on Adani. The network of Adani companies saw their prices fall steeply again, after Indian markets were closed yesterday, with Adani Enterprises down over 8% in late trading overnight. Adani is said to be preparing a detailed response to the short-selling outfit’s allegations. Visa and Mastercard report slower rise in card spending than expected Visa earnings beat expectations, but the company only reported a +1.7% rise for the quarter in card spending, some 5% below expectations. Mastercard reported a growth of 11% on the quarter, but that was still below expectations. The companies report that customers are shifting to cheaper brands for some of their spending. Mastercard closed 0.4% higher, having reported before the market open, while Visa reported after hours. EU considering $100 cap on Russian diesel The European Union is floating a plan to cap the price of Russian diesel at $100 a barrel from February 5 (the same date as the EU will ban almost all imports of refined Russian products). For reference, diesel futures are currently trading at $130/barrel, as they usually trade at a premium to crude. A lower $45 threshold would be set for discounted fuels like fuel oil, but member states will need to unanimously agree to the final figures. The objective remains to keep the Russian flows coming but cut Moscow’s revenues.   Japan's Tokyo CPI beats expectations Tokyo CPI for January came in above expectations, with the headline rising to 4.4% YoY from a revised 3.9% YoY previously and estimate of 4.0% YoY. The core measure rose to 4.3% YoY from 3.9% YoY while the core-core measure was also higher at 3.0% YoY from 2.7% YoY in December. This makes way from another beat in the overall CPI for January as well and saw USDJPY down by about 50pips in response to 129.70 after a modest rise in the US session as US yields rose. Asia’s inflation surge from Australia to New Zealand to Japan is raising concerns on how China’s reopening could potentially fuel another leg of price pressures globally as commodity prices surge. Iron ore price hits new 2022 high, on Fortescue seeing China demand pick up in 1H2023 In thin trade with China’s market still on public holidays, iron ore (SCOA), the key steel making ingredient, hit a new six month high price today, $126.20 a ton, not only driven by expectations China will increase buying after the Lunar new year holiday, but also as Australia’s large pure play iron ore company, Fortescue sees stronger sales in the first half of 2023. Fortescue reported China increased buying of port side iron ore in the prior quarter to 4.0mt, and it sees sales in the first half increasing to 9.3mt. All in all, iron ore supply is still lower than it was a year ago, and demand is increasing which underpins price supports. The iron ore price is now up 67% from its low, which has boosted optimism that iron ore companies will guide for stronger outlooks. Australia, an investment proxy for China reopening sees biggest monthly rally since 2020 Australia’s ASX200 (ASXSP200.I) has recorded its biggest monthly rally since November 2020, up 6.5% so far with Australia being considered an investment proxy for China's reopening. We see Australian investment instruments and exchange-traded funds drawing flows in 2023 as China’s economy emerges from covid19. Australia’s equity market, considered a dividend and commodity play, is heavily made up of financial and materials companies. Mining giant BHP Group expects 17% dividend growth, with iron ore miners forecasting higher demand for high-grade iron ore from China, which supports higher earnings. Australian insurers, banks and financials will likely benefit from the RBA’s rate hikes with QBE and Westpac as examples, see 60% and 40% profit boosts amid higher earnings on assets. What are we watching next? Lower output in the Black Sea region reducing world supplies key crops Ukraine’s corn and wheat production is set to fall for a second year in 2023, with corn output not expected to exceed 18 million tons and wheat production 16 million tons as farmers reduce planting due to the war, a grain sector group said on Thursday. Ukraine’s agriculture minister said last month that 2022 corn production could fall to 22-23 million tons from 41.9 million tons in 2021. Wheat production is estimated to have fallen to about 20 million tons last year. In addition, the USDA said on Thursday it saw Russia’s official wheat crop estimate as “not feasible”. Because of disrupted wheat supplies and strong demand, Thai rice, a benchmark for Asia, has soared to the highest in almost two years. Rice is a staple for half the world, and while wheat soared to a record in March last year, rice was relatively subdued for most of 2022, constraining food inflation in Asia. US December PCE Inflation is up today While focus has pulled away from inflation a bit recently on the significant deceleration in its trajectory, the market may be somewhat poorly prepared for a hotter than expected number today. The headline figure is expected at 0.0% MoM and +5.0% YoY vs. +5.5% YoY in November. The core is expected in at +0.3% MoM and +4.4% YoY vs. +4.7% YoY in November. Earnings to watch Earnings reports are few and far between on a Friday, but a couple of interesting names are on the docket today, including Chevron, which has declared it will buy back $75 billion of its own stock and increase its dividend, and major US consumer products company Colgate Palmolive.  Next week’s sports an ongoing big blast of earnings reports, which will include most of the remaining mega-caps after Microsoft this week (Apple, Alphabet and Amazon reporting next Thursday). Today: Fanuc, Chevron, American Express, Colgate-Palmolive Economic calendar highlights for today (times GMT) 1330 – US Dec. PCE Inflation1500 – US Dec. Pending Home Sales1500 – US Jan. Final University of Michigan Confidence1600 – US Jan. Kansas City Fed Services Survey Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher     Source: Financial Markets Today: Quick Take – January 27, 2023 | Saxo Group (home.saxo)
A Better-Than-Expected US GDP Read, Nvidia Extends Rally

A Better-Than-Expected US GDP Read, Nvidia Extends Rally

Swissquote Bank Swissquote Bank 27.01.2023 10:41
US equities rallied on Thursday, boosted by a decent rally in Tesla and Chevron stocks, and a better-than-expected GDP read in the US. But be careful! The US growth number was good, but not necessarily for good reasons. US data The US will reveal another gauge of inflation, the PCE data, that is closely watched by the Federal Reserve (Fed). A slower than expected core PCE would be a cherry on top for closing a week where the S&P500 rallied past its 2022 bearish trend top, and which could soon confirm a cup and handle pattern above the 4100 mark. But beware, Intel slumped 10% in the afterhours trading after revealing a worse-than-expected quarterly loss due to a steeper than expected fall in PC chip sales, and giving a weaker-than-expected forecast for the current quarter. Forex In the FX, the US dollar is better bid on the back of a strong GDP report, while gold is down from the $1950 resistance. The EURUSD is again below the 1.09 mark, while Cable consolidates below 1.24, with a clear resistance forming into the 1.2450 mark. The AUDUSD on the other hand extends gains above 71 cents level as the heated inflation report this week boosted the Reserve Bank of Australia (RBA) hawks. The market remains strongly short the Aussie, meaning that if the Aussie gains further momentum to the upside, we could see a short covering that could further emphasize the bullish trend. Read next: GBP/USD Pair Is Struggling To Extend Previous Highs, EUR/USD Pair Continued Its Gains| FXMAG.COM Watch the full episode to find out more! 0:00 Intro 0:25 S&P extends rally to bullish era 0:39 Tesla rallies 11% on record profits 1:41 Chevron jumps near 5% on stock buyback, pre-earnings 2:02 US GDP growth is good, but not for good reason 4:30 Luxury is the new Tech! 7:05 Watch US PCE data today! 7:40 Intel down 10% post-earnings, Nvidia extends rally 8:32 FX update: Aussie’s ascent could trigger a short squeeze! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Intel #Nvidia #Tesla #Microsoft #Chevron #earnings #US #GDP #inflation #data #Fed #expectations #USD #EUR #GBP #AUD #crude #oil #XAU #China #Covid #reopening #luxury #rally #Burberry #Hermes #LVMH #Swatch #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The Results Of The March Meeting Of The Bank Of Japan Are Rather Symbolic

The Tokyo Core CPI Reading Is Adding Pressure On The Bank Of Japan

Kenny Fisher Kenny Fisher 27.01.2023 11:46
The Japanese yen is in positive territory on Friday. In the European session, USD/JPY is trading at 129.76, down 0.33%. Tokyo CPI hits 4.3% Inflation indicators in Japan continue to head northwards. Tokyo Core CPI rose to 4.3% y/y in January, up from 3.9% in December and ahead of the consensus of 4.2%. This is the highest level in 42 years, but what is more worrying for the Bank of Japan is that the indicator has exceeded the central bank’s target of 2% for the eighth straight month. The increase was broad-based, with food and fuel prices the main contributors to the increase. The Tokyo Core CPI reading follows other inflation indicators which have hit decades-high levels, adding pressure on the BoJ to exit its stimulus programme. The BoJ insists that inflation will peak at 3% in March. but this view seems over-optimistic, given the trend we’re seeing from inflation data. BOJ Governor Kuroda has said he will maintain the Bank’s ultra-loose policy until wages increase, which would indicate that inflation is driven by domestic demand rather than cost-push factors. Kuroda winds up his term in April, and the new Governor could decide to tighten policy, which would boost the yen. US GDP climbed 2.9% y/y in Q4, down from 3.2% in Q3 but still a respectable clip. Will the US be able to avoid a recession? The answer isn’t clear, as the economic data shows a mixed picture. The employment market remains robust and overall growth has been positive. Manufacturing and Services PMIs continue to show that these sectors are contracting and housing has been especially weak, as it lowered Q4 GDP by about 1.3%. Much will depend on the strength of consumer spending, which accounts for some 68% of GDP. Consumer spending rose 2.1% in Q4, down slightly from 2.3% in the third quarter. However, the December release is worrying, as consumer spending declined by 1.1%. If this trend continues, it seems likely that the US economy will tip into a recession. Read next: Another Sector Announced Layoffs, Hasbro Reduced Its Workforce, IBM And SAP Have Joined Technology Companies That Are Reducing Employment| FXMAG.COM USD/JPY Technical 129.46 is a weak support level. The next support line is 128.40 There is resistance at 130.89 and 131.69 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Alphabet Reports Strong Q2 2023 Results with Growth in Advertising and Cloud Services - 24.07.2023

The Aussie Pair Is Holding Above 0.7100, The Major Currency Pairs Are Waiting For US PCE Report

Kamila Szypuła Kamila Szypuła 27.01.2023 13:15
The dollar strengthened on Friday, moving away from multi-month lows against the euro and sterling as investors began to focus on the many important central bank meetings next week. The US Federal Reserve, European Central Bank and Bank of England are due to make interest rate decisions next week as they assess what policy adjustments may be needed to fight rampant inflation in a challenging global economic environment. In today's expected audience session, the core US PCE data for December will be released. This is the Fed's preferred measure of inflation and price pressures are expected to ease further. USD/JPY Annual inflation in Japan's largest city, Tokyo, continues to climb, with the base rate hitting 4.3% in January, the highest level in more than four decades. The USD/JPY pair in the European session is trading close to 130.00, at 129.96. Earlier, the couple managed to break the level of 130.00 but failed to maintain it. The couple is waiting for the publication of the US PCE report. EUR/USD The US dollar draws support from the mostly upbeat US macro data released on Thursday, which in turn is seen as a key factor putting some pressure on EUR/USD. Expectations for a more hawkish nature of the European Central Bank (ECB) should additionally contribute to limiting deeper losses. It is worth recalling that several ECB officials supported additional interest rate hikes in the coming months to fight stubbornly high inflation. Today European Central Bank (ECB) President Christine Lagarde is set to speach. The frequency of Lagarde's speeches in recent times has almost reduced her impact on the financial markets and the euro, which leads me to believe that today's forecasts may not have a significant impact. However, the market's attention will remain focused on key risks related to the central bank's events next week. The Fed will announce its policy decision at the end of its two-day meeting on Wednesday. This will be followed by the ECB monetary policy meeting on Thursday, which in turn will play a key role in determining the next stage of the EUR/USD directional move. The EUR/USD pair broke above 1.09 in the morning but fell again. Currently, the EUR/USD pair is trading in the range of 1.0875-1.0880. Read next: Ukraine Is Calling For More Sanctions Against Russia| FXMAG.COM GBP/USD Given the volatility of the market, the GBP/USD pair may witness a further sideways move ahead of the US PCE price index for December. British Finance Minister Jeremy Hunt's willingness to accelerate growth is unimpressive to GBP/USD buyers as the Chancellor defends his position on a tax hike despite heavy criticism from other Conservatives. Alternatively, the growing calls for Brexit solutions, at least from Irish diplomats, appear to be helping the GBP/USD pair bearish. Investors expect the British economy's slowdown to end the Bank of England (BoE) tightening cycle soon. The Cable pair (GBP/USD) broke above 1.24 at the beginning of the day, but similarly to the EUR/USD pair, it failed to hold and fell. Currently, the GBP/USD pair is trading in the range of 1.2360-1.2370. AUD/USD The Australian dollar, tied to sentiment, rose cautiously on Thursday after US GDP data boosted Wall Street's risk appetite. In the fourth quarter of 2022, the US economy grew by 2.9% q/q. This is more than the consensus of 2.6%. The Australian dollar traded at around $0.71, hovering near its highest in almost eight months as rising inflation in the country fueled bets on further central bank policy tightening. Annual inflation in Australia rose 7.8% in December, the largest increase since 1990 and above market forecasts of 7.5%. The Aussie pair is holding above 0.7100 despite having dropped earlier. Source: investing.com, finance.yahoo.com, dailyfx.com
The US PCE Data Is Expected To Confirm Another Modest Slowdown

The US PCE Data Is Expected To Confirm Another Modest Slowdown

Michael Hewson Michael Hewson 27.01.2023 13:26
European markets have struggled for direction this week, finishing the day modestly higher after two days of minor losses.   US markets on the other hand finished the day strongly higher, with the Nasdaq 100 leading the way higher on the belief, rightly or wrongly, that the US economy is heading for a soft landing whatever the Fed does next week.   Yesterday's Q4 GDP numbers showed the US economy expanded by 2.9%, while weekly jobless claims fell again to 186k from 192k the week before.   If there are any concerns that the US economy is on the brink of a recession it's certainly not being reflected in the economic data, which still looks solid, as we look towards next week's Federal Reserve rate meeting.   Today we get a look at the latest personal spending numbers for December, after seeing a sizeable slowdown in the November numbers to 0.1%, after a strong October showing of 0.9%.   If we get a similar weak reading today, and all the forecasts suggest we might, then that would suggest a rising caution amongst US consumers about how the economy is evolving as we head into 2023. We've already seen US banks setting aside hefty loan loss provisions in their most recent earnings numbers, a move which might suggest rising unease that consumers are becoming more frugal with their spending, or that a slowdown might result in credit losses.   Expectations are for December personal spending to decline by -0.1%, which seems somewhat conservative given that retail sales showed a decline of -1.1% a couple of weeks ago.   Whatever numbers we get today it seems almost certain that we will see the Federal Reserve raise rates by another 25bps next week, and judging by the rally in US stocks yesterday, the market has increasingly priced in that outcome instead of what might have been a 50bps move.   The big concern is what markets aren't pricing, and while the Bank of Canada earlier this week signalled a pause in its rate hiking cycle, that doesn't mean the Fed will follow a similar path, even though markets appear to be pricing exactly that sort of outcome.   While yesterday's GDP numbers increasingly appear to support the prospect of a soft landing, the labour market data also suggests that the Fed has the headroom to continue to be much more aggressive.   Today's PCE Core Deflator inflation data is expected to confirm another modest slowdown from 4.7% to 4.4%, and the lowest reading since October 2021. It would also support the case for a more modest 25bps next week, however as we get nearer to the end of the Fed's rate hiking cycle there is some divergence with respect to what might come next.   Judging by the bond market reaction which saw yields move higher there may be a realisation that rates are likely to remain higher for longer, while the strong close for stocks might suggest the market believes rate cuts might not be too far away.   That seems doubtful if last night's Tokyo CPI is any guide, after inflation there surged to a new 42 year high at 4.4%, well above expectations of 4%. This suggests that global inflation is likely to be stickier than markets are currently pricing.   We'll soon see who is right when Fed chair Powell speaks next week, but if markets think a pause is coming, they could be in for a bit of a wake-up call.   EUR/USD – another fairly tight range yesterday with resistance at 1.0927 and the highs this week, as well as wider resistance at the 1.0950 area which is 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110. Support remains back at the 1.0780 area.   GBP/USD – made another attempt to move towards the 1.2450 resistance area yesterday, before slipping back. We need to see a move through the 1.2450 area to target further gains towards 1.2600. A move below 1.2250 could see a move towards 1.2170.    EUR/GBP – the failure to make progress through the 0.8850 area has seen the euro slip back. Also have resistance at the previous highs at 0.8900. Still have support above the 50- and 100-day SMA which we saw last week at the 0.8720/30 area. Below 0.8720 targets 0.8680.   USD/JPY – needs to break through the 131.00 area to target a move back towards 132.60. While below the risk is for further declines towards the lows at 127.20. We have interim support at the 128.20 area initially.   FTSE100 is expected to open 13 points higher at 7,774   DAX is expected to open 44 points higher at 15,176   CAC40 is expected to open 3 points higher at 7,099   Email: marketcomment@cmcmarkets.com   Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

The S&P500 Rallied Past Its 2022 Bearish Trend Top

Ipek Ozkardeskaya Ipek Ozkardeskaya 27.01.2023 13:36
eur to usd, eur usd, eur/usd, convert eur to usd, 1 eur to usd, eur vs usd, 100 eur to usd, euro to usd, what is euro?, what is dollar?, what is us dollar? US equities rallied on Thursday, boosted by a decent rally in Tesla and Chevron stocks, and a better-than-expected GDP read in the US.   The latest US GDP update was a strong beat. The US economy grew 2.9% in Q4, down from 3.2% printed a month earlier, but significantly better than the 2.6% penciled in by analysts.   But be careful! The US growth number was good, but not necessarily for good reasons.   Inventory adjustments and government spending were the main boosters of the GDP in the latest quarter, while domestic purchases increased just around 0.2%, down from 2% printed in Q1.   Plus, the housing sector took a massive 27% hit on annual basis, business inventories grew around 0.6% versus 6% printed a quarter earlier, and trade with other countries was good, but not because Americans exported more, but because they imported less.   In summary, the latest GDP data was boosted by government spending and inventory adjustments, but the growth engines, which are consumption and investment - that hint at the health of the future economy did quite poorly.   So what do you make of the data?  In one hand, slowing demand is great news for the Fed because their aggressive tightening policy hammers demand, and that should further ease inflation and further soften the Fed's policy. And all that, with the weekly jobless claims headed further down as a sign that the jobs market is still not feeling the pinch of the higher rates and the slower demand – although IBM announced it will cut 3900 jobs, and SAP 3000 this week. But oops, IBM is down 4.5% after the news. Too bad.  On the other hand, weaker demand is not great news, as it means that your favorite companies will be selling less stuff and will be making less money.   But there is always this hope that the Chinese could fill in the gap this year, thanks to the pandemic savings that will be flowing into the stuff that Chinese like to buy the most in the coming months. In this sense, Burberry and Swatch shares look nothing less exciting than the tech stocks during the pandemic. And that despite the war and a global cost-of-living crisis.  Focus on US PCE  The US will reveal another gauge of inflation, the PCE data, that is closely watched by the Federal Reserve (Fed). A slower than expected core PCE would be a cherry on top for closing a week where the S&P500 rallied past its 2022 bearish trend top, and which could soon confirm a cup and handle pattern above the 4100 mark.  But beware, Intel slumped 10% in the afterhours trading after revealing a worse-than-expected quarterly loss due to a steeper than expected fall in PC chip sales, and giving a weaker-than-expected forecast for the current quarter.  Aussie shines  The US dollar is better bid on the back of a strong GDP report, while gold is down from the $1950 resistance.   The EURUSD is again below the 1.09 mark, while Cable consolidates below 1.24, with a clear resistance forming into the 1.2450 mark.   The AUDUSD on the other hand extends gains above 71 cents level as the heated inflation report this week boosted the Reserve Bank of Australia (RBA) hawks. The 50-DMA crossed above the 200-DMA, confirming a golden cross formation on the daily chart, while the market remains strongly short the Aussie, meaning that if the Aussie gains further momentum to the upside, we could see a short covering that could further emphasize the bullish trend.   
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

The Euro Has A High Probability Of Growing Further This Year

Jakub Novak Jakub Novak 27.01.2023 13:51
According to a survey of analysts, the European Central Bank's decision to raise interest rates by 50 basis points is already final, so the euro has a high probability of growing further this year. By May of this year, the cost of borrowing will likely have increased by another half-point due to the fight against ongoing inflation. Many respondents believe that the deposit rate will remain at 3.25% for the next year or until the economy starts to deteriorate, at which point it will be reduced by a quarter point. These modifications won't likely occur until June 2024. ECB policy meeting More than half of the analysts surveyed think that policymakers will continue to face the strongest pricing pressure in recent memory despite the 250 basis point rate hike, the ECB's most aggressive tightening of monetary policy. Next week's ECB policy meeting, which will be the first in 2023, is very probably going to result in a half-point rate increase. This was stated repeatedly by ECB President Christine Lagarde in January. Polls also indicate that although oil prices are down, eurozone inflation is steadily declining, and the Federal Reserve is considering a less aggressive rate hike in its cycle, regulators will still be inclined to tighten policy following the February meeting. Lagarde speech Lagarde will give another speech today, and she and her hawkish colleagues will undoubtedly hint that the interest rate will be raised by the same amount in March as it was in February. A more gradual approach is preferred by some of the 26 members of the Governing Council, but just four out of the 46 economists questioned think it is likely to happen. Signals for the March meeting will be the main topic of discussion in February. The possibility exists that even a small dovish reading by the markets, brought on by a softening of the phrasing, could induce a decline in the value of the euro. Read next: The Aussie Pair Is Holding Above 0.7100, The Major Currency Pairs Are Waiting For US PCE Report| FXMAG.COM Even while inflation may now be in the single digits, it is still higher than the ECB's target rate of 2% and closer to 10%. Numerous experts predict that the Governing Council's largest challenge will be to strike a balance between lowering overall inflation and the base, which is falling more slowly than expected because it ignores energy prices. Next week, the ECB is anticipated to provide additional information regarding its plans to shrink its bond portfolio by 5 trillion euros. The procedure will start with officials allowing partial debt payback and not reinvesting the revenues, as they currently do. EUR/USD Regarding the technical analysis of EUR/USD, there is still demand for the single currency, and there is a potential that monthly and annual highs will continue to be updated. To do this, the trading instrument must remain above 1.0860, which will cause it to move to the vicinity of 1.0930. You can easily get through this point to reach 1.0970 when an update to 1.1007 is imminent. Only the collapse of support at 1.0860 will put more pressure on the pair and drive EUR/USD to 1.0805, with the possibility of dropping to a minimum of 1.0770 if the trading instrument declines. GBP/USD Regarding the GBP/USD technical picture, the demand for the pound is declining. Buyers must sustain their advantage by remaining over 1.2350. The only way to increase the likelihood of a further recovery to the area of 1.2430 and, ultimately, a greater movement of the pound up to the region of 1.2490 and 1.2550, is for the resistance at 1.2440 to fail. After the bears seize control of 1.2350, it is feasible to discuss the pressure on the trading instrument returning. The GBP/USD will be pushed back to 1.2285 and 1.2170 as a result, hitting the bulls' positions   Relevance up to 09:00 2023-01-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333447
The RBA Is Expected To Raise Rates By 25bp Next Week

The Outlook For The Aussie (AUD) Remains Bright

Kenny Fisher Kenny Fisher 27.01.2023 14:29
The Australian dollar is almost unchanged on Friday, trading at 0.7112. Australia’s PPI slips Just a day after Australian CPI unexpectedly rose, the Producer Price Index went in the opposite direction. PPI in the fourth quarter slowed to 5.8% y/y, down from 6.4% in Q3 and below the consensus of 6.3%. On a monthly basis, PPI fell to 0.7%, much weaker than the gain of 1.9% in Q3 and the forecast of 1.9%. The RBA has raised rates sharply but inflation is yet to peak. The CPI release for Q4 was a shocker, rising to 8.4% after a 7.3% gain in Q3. The markets had priced in a peak rate of 3.6%, but with the cash rate currently at 3.1% and more rate hikes on the way, it appears that the market is underestimating the terminal rate. The Australian dollar has been on a tear, rising around 10% since Nov. 1. The outlook for the Aussie remains bright, both for domestic and global reasons. At home, the RBA will continue to raise rates in order to curb inflation. Abroad, China has reopened and that will increase demand for Australian exports. As well, commodity prices are high which is good news for the export sector and the Australian dollar. Will the US be able to avoid a recession? The answer isn’t clear, as the economic data shows a mixed picture. The employment market remains robust and overall growth has been positive, with GDP for Q4 coming in at 2.9%. Manufacturing and Services PMIs continue to show that these sectors are contracting and housing has been especially weak, as it lowered Q4 GDP by about 1.3%. Consumer spending, which accounts for some 68% of GDP, could determine whether the US economy tips into a recession or not. Consumer spending rose 2.1% in Q4, down slightly from 2.3% in the third quarter. However, the December release is worrying, as consumer spending declined by 1.1%. If the Fed is to guide the economy to a soft landing, retail sales will have to rebound strongly. Read next: The Aussie Pair Is Holding Above 0.7100, The Major Currency Pairs Are Waiting For US PCE Report| FXMAG.COM AUD/USD Technical There is resistance at 0.7160 and 0.7256 0.7064 and 0.6968 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Bank Of England Will Probably Be Unable To Avoid A Significant Easing Of Policy

The Bank Of England Is Likely To See One Or Two More Rate Hikes In The First Half Of The Year

Kenny Fisher Kenny Fisher 27.01.2023 14:32
The British pound is slightly lower on Friday. In the European session, GBP/USD is trading at 1.2366, down 0.37%. Will US Core PCE continue to drop? There are no UK releases today, so all eyes will be on the US Core PCE, which is considered the Federal Reserve’s preferred inflation indicator. The forecast stands at 4.3% y/y for December, following 4.7% in November. If the print is in line with the forecast, it will mark a fourth straight decline in inflation. The Core PCE release, even if it misses expectations, won’t change the outcome of the Fed meeting next Wednesday. The CME’s Fed Watch has pegged the likelihood of a 25-basis point hike at 98%. Still, the meeting could have a strong impact on the US dollar, depending on the tone of the rate statement and Fed Chair Powell’s follow-up remarks. The Fed has been very consistent in its hawkish stance, reiterating that rates will stay high and there are no plans to cuts rates, in contrast to the markets, which are expecting rate cuts late in the year. If the Fed repeats its hawkish stance at the meeting, it could give a lift to the US dollar. The Bank of England holds its meeting just a day after the Fed on Feb. 2. The central bank is widely expected to raise rates by 0.50%, which would bring the cash rate to 4.0% and would be a 10th straight rate increase. Despite the significant tightening, inflation is running at a sky-high 10.5%, meaning that the BoE can’t even think about a pause in its rate-tightening cycle. The terminal rate is likely to be reached at 4.25%-4.5%, so we’re likely to see one or two more rate hikes in the first half of the year. For the BoE, the first sign of success against inflation will be to bring it back to single digits, after four straight months above 10%.   GBP/USD Technical 1.2335 and 1.2233 are providing support There is resistance at 1.2446 and 1.2499 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The USD/JPY Price Reversed From The Lower Limit

Forex Weekly Summary: USD/JPY Ended At 129.80, AUD/USD Closed Above 0.71

Kamila Szypuła Kamila Szypuła 28.01.2023 14:29
The US dollar was flat in trading this week. Next week's economic calendar is filled with high-impact events such as the Fed on Wednesday or the BoE and ECB on Thursday. And if the major central banks aren't enough, there will be an NFP report on Friday, and given the stance taken by the Fed on Wednesday, this jobs report could be even more important than usual as the FOMC monitors the data for signs of a slowdown from massive rate hikes from last year. USD/JPY USD/JPY started the trading week at 129.2700. Then it increased and exceeded the level of 130.00. On Tuesday, USD/JPY crossed the 131.00 level and recorded the highest trading level of the week at 131.0650. The level above 131.00 was not maintained and the pair fell below 130.00 again. Following this decline, USD/JPY hit a week-high trading low close to 129.00, 129.0400 to be exact. The pair then increased and broke above 130.00 again, but USD/JPY failed to hold above that level and ended the week at 129.8000. GBP/USD The Cable pair (GBP/USD) started the week trading quite high at 1.2399 and rose to a week high of 1.2446. The GBP/USD pair then declined and hit a trading low of 1.2274 on Tuesday. After that, the GBP/USD pair rose and traded above 1.2350. The cable pair ended the week just below 1.2400 at 1.2395. The British pound is gearing up for the week ahead which includes the Bank of England (BoE) and Federal Reserve interest rate decisions respectively. The BoE suggested another hike of 50 basis points, which is confirmed by prices in the money market. At the last meeting the majority voted for 50 bp, but taking into account new economic data, votes may be divided between 50 bp and 25 bp. The BoE is likely to remain unchanged - this would likely cause a bearish reaction on the pound. EUR/USD The major pair (EUR/USD) is holding above 1.08 and this week's trade was extremely favorable for the pair. The EUR/USD pair started the week trading at 1.0874. The EUR/USD pair then rose. Weekly trading was mostly above the 1.0860 level. EUR/USD peaked above 1.09 at 1.0930. The week's trading low for the pair was below 1.0850, while the EUR/USD record low was at 1.0841. EUR/USD ended the week at 1.0874. The market's attention will remain focused on the key risks related to the central bank's events. The Fed will announce its policy decision at the end of its two-day meeting on Wednesday. This will be followed by the ECB monetary policy meeting on Thursday, which in turn will play a key role in determining the next stage of the EUR/USD directional move. AUD/USD The Australian pair (AUD/USD) performed best on Wednesday in the major currency pairs. AUD/USD started the week trading at 0.6971. Then the Aussie pair rose and passed the 0.70 level, maintaining this level in the following trading days. On the first day of trading, AUD/USD traded below 0.70 and thus recorded the lowest trading level of the week at 0.6965. The highest trading level of the Australian pair was above 0.7100, at the level of 0.7138. The Aussie Pair finished the week just above 0.7100. Australia’s annual inflation jumped 7.8% in the December quarter, the biggest increase since 1990 and above market forecasts of 7.5%. The strong reading was more than twice the pace of wage growth and cemented expectations that the Reserve Bank of Australia will hike interest rates by 25 basis points in February. Source: investing.com, finance.yahoo.com
The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

The USD/JPY Pair Tends To Keep The Trend In A Sideways Direction

InstaForex Analysis InstaForex Analysis 30.01.2023 08:00
The yen has not chosen a particular direction over the past three days, but it continues to move sideways. However, it was followed by the price moving out of the descending green price channel, and now this channel is canceled. The price will be guided by the blue embedded lines of the global hyperchannel again. The nearest resistance is the MACD line near 132.95, the nearest support is the price channel line near 127.27. The main movement will be on Wednesday, when the Federal Reserve will announce its monetary policy decision. Right now the pair's growth is supported by the Marlin oscillator, whose signal line is testing the resistance of the upper limit of the descending lilac channel. Slightly lower you can find the lower limit of the ascending channel of azure color, it tends to keep the trend in a sideways direction. On the four-hour chart, sideways movement is evident, even the MACD line is moving horizontally. The Marlin oscillator is also balancing on a neutral zero line. We're wait for the Fed meeting on Wednesday.   Relevance up to 03:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333542
The Data May Keep The British Pound (GBP) From Rising

The Data May Keep The British Pound (GBP) From Rising

InstaForex Analysis InstaForex Analysis 30.01.2023 08:01
The pound continues to settle before the resistance at 1.2420. On the daily chart, the signal line of the Marlin oscillator is slightly inclined downward, which may indicate the price's desire to fall to the lower limit of the consolidation range - to the low of January 24 (1.2262). On the four-hour chart, the price is between the balance and MACD indicator lines, the Marlin oscillator is in the green zone near the zero line, and the situation is neutral overall. On Wednesday, the Federal Reserve will release its monetary policy decision. Obviously, this event will be the driving force behind the Forex market. The U.S. consumer confidence index for January will be released tomorrow. The forecast is 109.0 compared to 108.3 in December. The data (and the expectation thereof) may keep the pound from rising.   Relevance up to 03:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333544
The Price Of EUR/USD Pair Will Develop Sideways Movement

The Price Of EUR/USD Pair Will Develop Sideways Movement

InstaForex Analysis InstaForex Analysis 30.01.2023 08:03
Last Friday, the euro was down 22 points. The trading volume was below the average, which suggests that big players have a wait-and-see attitude ahead of the Federal Reserve meeting on Wednesday. Such an observation would indicate a likely strong move right on the day of the announcement of the Fed meeting results. I believe that the euro will move downward, since the Fed still maintains its monetary policy, including the verbal one, more hawkish than that of the European Central Bank meeting. An extended divergence is gaining strength on the daily chart. We can talk about breaking the downtrend in the medium-term once the price has settled under the MACD indicator line (1.0718). By this time, the Marlin oscillator has already moved into negative territory. The first target will be the support at 1.0595, which is the December 5 high, coinciding with the Fibonacci correction level of 23.6% of the growth since last September 28. On the four-hour chart, the price settled below the MACD line, but it is still held by the balance line, which indirectly confirms the wait-and-see attitude of speculators. Divergence pressure is weakening, the oscillator signal line may briefly return to the green zone, the price will develop sideways movement under the MACD line (1.0892).   Relevance up to 04:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333546
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The NASDAQ Stock Exchange 2,131 Companies Rose In Price

InstaForex Analysis InstaForex Analysis 30.01.2023 08:07
At the close of the New York Stock Exchange, the Dow Jones rose 0.08%, the S&P 500 rose 0.25%, and the NASDAQ Composite rose 0.95%. Dow Jones The leading performer among the components of the Dow Jones index today was American Express Company, which gained 16.43 points or 10.54% to close at 172.31. Visa Inc Class A rose 6.73 points or 3.00% to close at 231.44. Walgreens Boots Alliance Inc rose 0.67 points or 1.84% to close at 37.17. The least gainers were shares of Intel Corporation, which lost 1.93 points or 6.41% to end the session at 28.16. Chevron Corp was up 4.44% or 8.34 points to close at 179.45 while The Travelers Companies Inc was down 1.74% or 3.35 points to close at 188. .76. S&P 500 Leading gainers among the S&P 500 index components in today's trading were Tesla Inc, which rose 10.99% to 177.88, American Express Company, which gained 10.54% to close at 172.31, and shares of L3Harris Technologies Inc, which rose 7.92% to end the session at 212.10. The least gainers were Hasbro Inc, which shed 8.11% to close at 58.61. Shares of KLA Corporation shed 6.85% to end the session at 399.37. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were BuzzFeed Inc, which rose 85.17% to 3.87, Applied UV Inc, which gained 52.88% to close at 1.59, and shares of Lucid Group Inc, which rose 43.00% to end the session at 12.87. The least gainers were Nemaura Medical Inc, which shed 42.31% to close at 1.65. Shares of Jack Creek Investment Corp. lost 33.79% and ended the session at 12.44. Quotes of Akerna Corp fell in price by 31.46% to 1.22. Numbers On the New York Stock Exchange, the number of securities that rose in price (1,738) exceeded the number of those that closed in the red (1,303), while quotes of 114 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,131 companies rose in price, 1,535 declined, and 173 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.17% to 18.51. Commodities Gold futures for February delivery lost 0.09%, or 1.80, to hit $1.00 a troy ounce. In other commodities, WTI crude for March delivery fell 1.91%, or 1.55, to $79.46 a barrel. Futures for Brent crude for March delivery fell 1.18%, or 1.03, to $86.44 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair was unchanged 0.19% to 1.09, while USD/JPY fell 0.30% to hit 129.82. Futures on the USD index rose 0.08% to 101.72.   Relevance up to 04:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/310476
Hang Seng Index Plummets -2% Amid Weak China Data, Short-Term Trend Intact

The EUR/GBP Pair Still Has The Chance To Continue Its Decline

InstaForex Analysis InstaForex Analysis 30.01.2023 08:22
Even though the EUR/GBP currency pair is currently being dominated by sellers who aim to bring this currency pair down to a level of 0.8743 on the 4-hour chart, the EUR/GBP needs momentum to continue its decline so that in the near future this currency pair has potential to be corrected upwards to the level of 0.8782 where this has been confirmed by the emergence of deviations between price movements and the MACD Histogram indicator where as long as the upward correction does not exceed the level of 0.8804, EUR/GBP still has the opportunity to continue its decline to the level of 0.8743 again.   Relevance up to 01:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/118425
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Outlook Of The GBP/USD Currency Pair

InstaForex Analysis InstaForex Analysis 30.01.2023 08:26
If we look at the daily chart for the main GBP/USD currency pair, then there will be some interesting things: 1. The appearance of the Double Top Pattern (Yellow circle). 2. Deviations appear between price movements and the MACD indicator. 3. The appearance of Bearish 123 pattern. Based on the three facts above then in a few days ahead Cable has the potential to go down trying to break below the level 1,2262 as the main target to be tested if this level managed to break then 1,2086 will be the next target to be tested while on the way to these levels is not a upward correction which exceeds the 1.2447 level because if this level is successfully penetrated upwards then it is very likely that the decline scenario described earlier will become invalid and automatically cancel itself.   Relevance up to 01:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/118431
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The Potential For A Bullish Turn Of The EUR/USD Pair Remains High

Oscar Ton Oscar Ton 30.01.2023 08:29
Technical outlook: EURUSD dropped to the 1.0837 lows on Friday during the New York session, just managing to test previous short-term support at 1.0835. The single currency pair has since found support and is seen to be trading close to 1.0875 at this point in writing. A meaningful top might be already in place around 1.0929 over the last week as the bears are willing to hold prices lower. EURUSD should ideally stay below 1.0929 to keep the bearish momentum intact. The larger-degree rally which began in September 2022 from 0.9535 looks mature and complete at 1.0929. If the structure holds well, we should witness a meaningful pullback towards 1.0400 and down to 1.0100 going further. EURUSD is facing intraday resistance close to 1.0900, while support is seen through 1.0835. A break below 1.0835 will confirm and accelerate a move further towards 1.0750 and 1.0480 in the next few trading sessions. Also, note that 1.0100 is close to the Fibonacci 0.618 retracement of the above rally, hence the potential for a bullish turn remains high from there. Trading idea: A potential bearish move against 1.1000 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310490
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

The EUR/USD Pair May Announce A New Bullish Momentum

Ralph Shedler Ralph Shedler 30.01.2023 08:32
The EUR/USD pair continues to move sideways in the short term as the Dollar Index moves somehow sideways as well. It's trading at 1.0868 at the time of writing above Friday's low of 1.0837, indicating that the buyers are still very strong. Fundamentally, the German Prelim GDP may report a 0.0% growth, while Spanish Flash CPI is expected to increase by 4.9%. Still, the fundamentals should have a big impact only tomorrow. The US CB Consumer Confidence is expected to jump to 109.2 from 108.3, while Chicago PMI could come in better compared to the previous reporting period as well. Only better than expected US data and poor Eurozone figures could save the greenback from the downside. EUR/USD Exhausted Sellers! EUR/USD is trapped between the 1.0845 and 1.0926 levels, so only escaping from this range could bring us great trading opportunities. Now, it challenges the 1.0867 historical level after finding resistance at the weekly pivot point of 1.0880. Technically, the price is also trapped between the median line (ml) and the upper median line (uml) of the descending pitchfork. This is seen as a potential flag, as a bullish pattern. EUR/USD Forecast! A valid breakout above the pivot point (1.0880) and above the upper median line (uml) validates further growth up to the range's resistance of 1.0926. Coming back to test and retest 1.0845 may announce a new bullish momentum.   Relevance up to 07:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310498
Dollar Strength Continues as 10-year Treasury Surges to 4.34%, Reaching Highest Levels Since Financial Crisis

Analysis Of The USD/SGD Pair Movement

Torben Melsted Torben Melsted 30.01.2023 08:42
It has been a couple of weeks since we saw USD/SGD break below the S/H/S top neckline near 1.3256. With this break, the S/H/S top was activated for a decline towards at least 1.2049 in the weeks/months ahead. Ultimately, we will be looking for a break below the 2011 low at 1.2000 for a decline closer to par against the USD in the coming years. Short-term we could still see some consolidation within the 1.3100 - 1.3250 area before the next down move towards 1.2049 and ultimately lower.   Relevance up to 07:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310506
Analysis Of The Euro To US Dollar Pair Situation - 30.01.2023

Analysis Of The Euro To US Dollar Pair Movement

Torben Melsted Torben Melsted 30.01.2023 08:39
EUR/USD traded in a very narrow range between 1.0835 - 1.0900 last week, but it should just be a matter of time before support at 1.0835 breaks and confirms that wave C of 4 is well underway towards the ideal target near 1.0481. Once the correction in wave 4 completes, we will be looking for a new impulsive rally towards at least 1.1625 and possibly even closer to resistance near 1.2350. Relevance up to 07:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310504
The EUR/USD Pair Maintains The Bullish Sentiment

The EUR/USD Pair Maintains The Bullish Sentiment

Paolo Greco Paolo Greco 30.01.2023 08:47
M5 chart of EUR/USD EUR/USD did not show any interesting movements on Friday. The price was striving for the critical line, and when it reached this line, it failed to overcome it. Thus, the flat pattern persisted and the price continued to move above the Ichimoku indicator lines (we registered them in the last "pre-flat" position), so there are no changes in the technical picture. There are reasons to expect that this week trading will be very volatile, which suggests that the flat will finish. But in our fundamental articles we have already analyzed this point. I think that the "signs" of all the forthcoming events are very serious, but the reaction to them may be quite different from what everyone expects now. In other words, the outcome of the European Central Bank and Federal Reserve meetings has already been worked out "in advance" and if there are no surprises, the market reaction will be very restrained. We also expect that the market will come to the conclusion that it is simply unreasonable to buy the euro. Speaking of Friday's trading signals, it was difficult. During the European session, the pair showed a desire to move logically, so there was a buy signal near 1.0868. The position was closed by the Stop Loss without incurring any loss because the price failed to reach the target level. At the US trading session, the pair started the "roller coaster ride" near the 1.0854-1.0868 area, which resulted in a whole series of false signals. Traders could work off one more, any signal, which surely closed in a loss. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 9,500, whereas the number of short positions fell by 2,000. Thus, the net positions decreased by 7,500. Now the number of long positions is higher than the number of short positions opened by non-commercial traders by 134,000. So now the question is: how long will the big players increase their longs? From a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 52,000 (732,000 vs. 680,000). H1 chart of EUR/USD The technical picture on the one-hour chart remains unchanged. We can see that the pair maintains the bullish sentiment, and is located above the lines of the Ichimoku indicator. However, the pair was mostly flat, whether there was macro data or not. Thus, the euro can not rise, but it doesn't want to fall as well. This week, traders will have enough reasons to complete the flat. On Monday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137 and also Senkou Span B lines (1.0825) and Kijun Sen (1.0846). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On January 30, there are no important and interesting events planned in the European Union and the United States, all the most interesting is in the second half of the week. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 07:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333562
The Euro May Attempt To Resume An Upward Movement

The Euro May Attempt To Resume An Upward Movement

Jakub Novak Jakub Novak 30.01.2023 08:55
Analysis of transactions and tips for trading EUR/USD The test of 1.0890 occurred when the MACD line was already far from zero, so the upside potential was limited. Sometime later, another test took place, but this time the MACD line was in the overbought area, which was a good signal to sell. This resulted in a price decrease of around 40 pips. No other signals appeared for the rest of the day. Statements from ECB President Christine Lagarde had no impact on the market last Friday, while data on core PCE in the US, which matched forecasts, sent dollar higher. For today, the only report worth watching is Germany's GDP data for Q4, which might be worse than expected. That could bring back pressure on EUR/USD. However, there are no statistics scheduled to be released in the afternoon, so euro may attempt to resume an upward movement ahead of the Fed meeting this week. For long positions: Buy euro when the quote reaches 1.0885 (green line on the chart) and take profit at the price of 1.0925. Growth could occur if the economic data from Germany exceeds expectations. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0855, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0885 and 1.0925. For short positions: Sell euro when the quote reaches 1.0855 (red line on the chart) and take profit at the price of 1.0816. Pressure will return if the attempt to rise above 1.0885 fails. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0885, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0855 and 1.0816. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader   Relevance up to 07:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333574
The GBP/USD Pair May Trade Horizontally Today

The GBP/USD Pair May Trade Horizontally Today

Jakub Novak Jakub Novak 30.01.2023 08:58
Analysis of transactions and tips for trading GBP/USD The test of 1.2360 occurred when the MACD line was just starting to move below zero, which was a pretty good signal to sell. However, the pair did not fall, resulting in losses. No other signals appeared for the rest of the day. Friday's data from the US coincided with forecasts, so GBP/USD traded horizontally. Most likely, this momentum will continue today because there are no UK statistics scheduled to be released in the morning. However, demand may return before the Bank of England meeting as market players are expecting interest rates to be raised again quite aggressively. There are also no statistics scheduled to be released in the afternoon, so a decrease in volatility could trigger a reversal in the market. For long positions: Buy pound when the quote reaches 1.2405 (green line on the chart) and take profit at the price of 1.2455 (thicker green line on the chart). Growth could occur as there are no statistics scheduled to be released today. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Pound can be bought at 1.2374, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2405 and 1.2455. For short positions: Sell pound when the quote reaches 1.2374 (red line on the chart) and take profit at the price of 1.2330. Pressure will increase if the attempt to update last Friday's high fails. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2405, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2374 and 1.2330. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333576
The EUR/USD Pair Has A Potential For The Breakout Mode

The EUR/USD Pair Has A Potential For The Breakout Mode

Peter Jacimovic Peter Jacimovic 30.01.2023 09:04
Technical analysis: EUR/USD has been trading sideways at the price of 1.0860 inside of the downside channel. I see potential for the breakout mode in the next period. Trading recommendation: Due to the strong upside trend in the background and potential for the breakout of the downside channel, I see further upside continuation. Watch for the potential breakout of the downside channel to confirm further rally towards upside objective at 1.1045 Stochastic oscillator is showing fresh upside momentum, which is strong sign that buyers are in control. Key support is set at the price of 1.0835   Relevance up to 08:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310523
Italy Eases Windfall Tax Impact Amid China's Deflation, Focus on US Inflation Report

Philips In The Netherlands Is Reporting Layoffs, Multiple Drone Strike Targeting Factories In Iran

Saxo Bank Saxo Bank 30.01.2023 09:40
Summary:  The Asian session saw a significant swoon in risk sentiment for the first time in weeks as Chinese mainland markets sold off steeply after a gap opening higher in their first session after the long holiday closure. This contrasts with US equity markets, which squeezed sharply higher once again Friday as financial conditions continue to ease aggressively ahead of this Wednesday’s FOMC meeting. Will the Fed want to spring a hawkish surprise to make this market take it seriously?   What is our trading focus? Equities: It is all about technology earnings this week Friday’s price action in S&P 500 futures ended on a high note with the index futures closing at their highest level since mid-September. US financial conditions remain in a negative trend and long-term bond yields are still well in the range and well-behaved leaving little macro headwinds for US equities, except for the warning signals flashing out of the leading indicators. The Q4 earnings season has so far been mixed with big names such as Intel and Microsoft reporting a deteriorating outlook. This week it is all about earnings with the most important to watch being those from Apple, Alphabet, and Amazon reporting late Thursday after the market close. This morning the S&P 500 futures are rolling over from Friday’s highs trading around the 4,063 level which is just above the intraday low from Friday’s session. Hong Kong’s Hang Seng (HIG3) retreated; China’s CSI300 (03188:xhkg) pared gains After advancing 2.9% in a holiday-shortened trading week, the Hang Seng Index gave back most of the gain from last week on profit-taking as well as disappointing property sales during the Lunar New Year. As of writing, Hang Seng Index lost 2.2%, with Chinese developers and mega-cap internet names leading the decline. Leader developer Country Garden (02007:xhkg) plunging 7.4% was the top loser within the Hang Seng Index, followed by Alibaba (09988:xhkg) which tumbled 7.1. CSI300 gapped higher by over 2% at the open when the Chinese market returned from a week-long holiday but pared most of it and was up only 0.5% as of writing. Auto, defence, electric equipment, and electronics were among the outperformers. FX: Dollar eyes a bounce this week The USD has been range-bound over the last two weeks, but a huge week ahead looms with a slew of key data (ISMs on Wednesday and Friday, the jobs report Friday) and central bank meetings (Fed, BoE and ECB) key catalysts. Any of three scenarios might support a USD comeback this week, at least consolidating some of its weakness over the past couple of months. The primary risk might be a Fed that is in the mood to challenge the market’s complacency and easing financial conditions as the market has priced a deceleration in rate tightening and eventual rate cuts later this year. Secondarily, stronger than expected US data would be a surprise and could boosts the US dollar by driving US yields higher. Finally, significantly weak US data could reverse the wild squeeze higher in equity markets, offering safe-haven support for the greenback. Elsewhere, the ECB may find it impossible to surprise hawkish, while the BoE may be happy to err on the side of dovishness as sterling has bounced back comfortably and energy prices have eased. Crude oil (CLH3 & LCOH3) lower despite Iran strikes Crude oil prices trade softer following Friday’s big drop which left the sector down on the week. An Israeli drone strike against a target in Iran only had a temporary positive price impact with the market instead focusing on signs of increased Chinese demand as the country reopens after the LNY break. Friday’s correction was primarily driven by profit taking from recently established longs after another failed attempt to break key resistance in the $89-$90 area in Brent. Pivotal week ahead with a slew of data and central bank meetings, which will continue the argument between recession and soft landing, driving energy markets. Also focus on the impact of fresh sanctions on Russian esports from February 4 and this week's OPEC+ meeting although no material changes are expected. Gold (XAUUSD) focus turns to FOMC Gold ended last week unchanged and has so far traded close to flat during the APAC session. Overall, it remains in a steep bullish trend with local support at $1920 being followed by trendline and 21-day moving average support around $1900. The Israeli strike on targets in Iran had limited positive impact with the market instead focusing on Wednesday’s FOMC meeting for confirmation of a less hawkish 25 bp rate hike as well as Friday’s US job report. Eight consecutive weeks of buying has lifted the hedge fund long in Comex gold futures to a nine-month high of 107k lots (10.7m oz) while total ETF holdings remain flat, the latter a worry as it raises the risk of a correction from non-sticky speculative and technical driven longs. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) rose on stronger-than-expected economic data U.S. yields are rangebound ahead of important event risks this week, including the first week of the month economic data noted above in the USD section, but also over the FOMC meeting this Wednesday. The 10-year yield benchmark continues to coil in the 3.50% area as the yield curve remains steeply inverted and the market predicts a soft landing for the economy and Fed easing beginning later this year. What is going on? Explosions in Iran could raise geopolitical tensions There are reports of multiple drone strike targeting factories in Iran. Reports state that the drones came from an Israeli airbase in Azerbaijan. Many of the reports are centred around Isfahan, which is a central city that's reportedly home to some military plants, perhaps the ones supplying drones to Russia for the war in Ukraine. Australia’s biggest pure-play Copper company reports production record, but flags risk of higher electricity costs Oz Minerals’ (OZL) quarterly copper output hit a record high in Q4, while it sees higher production over the year again, with slightly less gold production compared to 2022. The miner noted inflation risks in forward guidance, forecasting higher costs in 2023 amid rising power prices, and a higher Australian dollar. This sets the tone for what we can potentially expect from some of Australia’s and the world’s largest miners when they report 2022 results next month. That said, raw material price strength in copper and gold could underpin Oz Minerals’ revenue and earnings, with consensus expecting 19% revenue growth in 2023, and 45% earnings growth. The company recommended shareholders approve its $9.6 billion takeover by BHP. Philips reports cut of 6,000 employees The wave of layoffs is continuing among technology companies and this morning Philips in the Netherlands is reporting layoffs corresponding to 8% of the workforce in a drive to cut costs to offset weakness across the business and costly recalls in its consumer medical device business. Copper’s supply disrupted rally Copper’s 20% rally since early November has primarily been driven by speculation that the reopening of China will support an overall increase in demand despite recession risks weighing elsewhere. But while that pickup has yet to materialise, thereby exposing copper and other recent highflying industrial metals to a correction, the risk to supply has increasingly become a stickier source of support for copper. Morgan Stanley estimates that close to 7% of global copper production is currently disrupted or at risk, while Chile’s output continues to disappoint. Lunar New Year consumption in China rose 12.2% from last year According to the VAT data released by the State Taxation Administration, sales in consumption-related industries grew by 12.2% during the Lunar New Year holiday from the same lunar calendar period last year. Sales of goods grew 10% and services consumption climbed 13.5% Y/Y. Dining-in spending surged 53% Y/Y. Tourist agency sales soared 130% Y/Y, and tourist hotel lodging was up 16.4% Y/Y. Budget hotel sales increased by 30.6%. Movies’ box office exceeded RMB6.7 billion. China reiterated its push for domestic consumption; extended stimulus measures from its monetary toolbox China’s State Council, in a meeting chaired by the outgoing Premier Li Keqiang, pledged to boost domestic consumption as a key driver to support economic growth in 2023. Separately, the People’s Bank of China extended some lending facilities to support investments that reduce carbon emissions, develop clean use of coal, and the transport and logistics industries. Read next: Inflation Is Falling, But Does It Mean That The Fed's February Decision Will Be Dovish?| FXMAG.COM What are we watching next? Market conditions thickening the plot for this week’s FOMC meeting The FOMC meeting this week was meant to confirm the Fed’s further downshift in the pace of its rate hikes with a 25-basis point rate hike and offer few surprises. But the market has lurched into an aggressive back-up in risk sentiment, with easing financial conditions as the market prices the Fed to likely have reached its peak interest rate for the cycle after only another 25 basis points of further hiking after this week’s presumed hike, which would take the Fed Funds policy rate to 4.75-5.00%. The Fed continues to object to the market’s expectation of an eventual rate cutting campaign set to begin by later this year, and it may attempt to surprise somehow on the hawkish side after especially the latter part of the “higher for longer” message from the Fed has been ignored. What does that look like? Difficult to say: a 50 basis point move would be bold but would come as a profound shock to markets. Perhaps the most hawkish message the Fed can deliver on rates would be a refusal to guide for an end of the rate-hike cycle just yet, somehow noting that financial conditions are too easy for it to consider that its policy is sufficiently tight. BP seeing an accelerated energy transition Russia's war in Ukraine will accelerate the shift away from oil and gas, with a much sharper decline in demand for fossil fuels seen in 2035, according to BP's annual energy outlook out today. Nations are prioritizing domestic renewable energy sources as a way to boost supply security while also cutting carbon emissions. Still in BP’s most conservative scenario in terms of climate goals, global oil demand would still be around 73 million barrels a day by 2050, only down 25% from 2019. OPEC will continue to gain market shares over the coming years because it has lower costs. The war will also cause global GDP to be at least 2% lower by 2025, compared with the expectation a year ago (from Bloomberg). Earnings to watch The Q4 earnings season kicks into gear this week around 218 companies among those we track during the earnings reporting. The three most important earnings are Apple, Alphabet, and Amazon due to their size in the equity indices and the economy. The first earnings to move markets will be Snap and Caterpillar tomorrow with both reflecting cyclical components in the economy. Today: Ryanair, UniCredit, Sumitomo Mitsui Financial Group, Canon, Philips, NXP Semiconductors, GE HealthCare Technologies Tuesday: Canadian Pacific Railway, Daiichi Sankyo, Fujitsu, UBS Group, Exxon Mobil, Pfizer, McDonald’s, UPS, Caterpillar, Amgen, AMD, Mondelez, Marathon Petroleum, Electronic Arts, Spotify, Snap Wednesday: Novo Nordisk, Orsted, Keyence, Hitachi, GSK, BBVA, Novartis, Meta, Thermo Fisher Scientific, Southern Copper Thursday: DSV, Dassault Systemes, Siemens Healthineers, Infineon Technologies, Deutsche Bank, Sony, Takeda Pharmaceutical, Shell, ING Groep, Banco Santander, Siemens Gamesa Renewable Energy, Nordea, Roche, ABB, Apple, Alphabet, Amazon, Eli Lilly, ConocoPhillips, Qualcomm, Honeywell, Starbucks, Gilead Sciences, JD.com, Ford Motor, Ferrari Friday: Coloplast, Sanofi, Intesa Sanpaolo, Denso, CaixaBank, Naturgy Energy, Assa Abloy, Regeneron Pharmaceuticals Economic calendar highlights for today (times GMT) 0800 – Spain Flash January CPI 1000 – Eurozone Jan. Confidence Surveys 1530 – US Jan. Dallas Fed Manufacturing Activity 2330 – Japan Dec. Jobless Rate 0030 – Australia Dec. Retail Sales 0130 – China Jan. Manufacturing and Non-manufacturing Survey Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – January 30, 2023 | Saxo Group (home.saxo)
Underestimated Risks: Market Underestimating Further RBA Tightening

The USD/INR Pair May Witness Further Upside

TeleTrade Comments TeleTrade Comments 30.01.2023 09:43
USD/INR picks up bids to extend the previous week’s rebound from 2.5-month low. RBI likely to announce 0.25% rate hike in February before ending tightening cycle. Fears of Adani stocks rout, firmer Oil price also weigh on Indian Rupee. Indian budget likely to emphasize deficit reduction, hopes of Fed’s dovish hike caps USD/INR upside. USD/INR portrays a three-day uptrend around 81.70 as traders brace for the key data/events from India and the US during early Monday. Also likely to have underpinned the Indian Rupee (INR) pair’s run-up could be the pessimism surrounding the nation’s equities due to a company-specific move and fears of a downbeat budget for the Fiscal Year 2023-24 (FY). Indian equities slumped to a three-month low after Adani group shares drowned the markets after the Hindenburg Research report triggered a $48 billion rout in shares of the top-tier Indian enterprise. Not only the equity rout but the likely exodus of foreign funds due to the Adani-led slump also weighs on the Indian Rupee (INR). Further, recently firmer prices of Crude Oil, mildly offered near $79.50 by the press time, also favors the USD/INR buyers. On the contrary, mixed US data and cautious mood ahead of the Federal Reserve’s (Fed) monetary policy meeting decision probe the USD/INR bulls. During the last week, the Fed’s preferred gauge of inflation, namely the Core Personal Consumption Expenditures (PCE) Price Index, matched 4.4% YoY market forecast versus 4.7% prior while the monthly figure rose to 0.3% versus 0.2% expected and previous readings. Ahead of that, the US Bureau of Economic Analysis' (BEA) first estimate of the US fourth quarter (Q4) Gross Domestic Product marked an annualized growth rate of 2.9% versus 2.6% expected and 3.2% prior. On the same line, the Durable Goods Orders jumped 5.6% in December versus the 2.5% market forecast and -1.7% upwardly revised prior. On a different page, China’s return from the one-week-long Lunar New Year (LNY) holidays bring some good news as the nation’s Center for Disease Control and Prevention (CDC) signaled the end of the Covid wave. On the same line could be the could jump in the Chinese festive demand, of around 12.2% versus the year ago, as well as readiness to bolster economic growth via lending tools, spending and higher imports. Amid these plays, the US Treasury bond yields grind higher but the stock futures print mild losses. Furthermore, the Asia-Pacific shares grind higher but the US Dollar Index (DXY) struggles to extend a two-day recovery while India’s NSE 50 drops near 0.20% intraday at the latest. Moving on, Wednesday becomes the key day for the USD/INR pair traders as Indian Finance Minister Nirmala Sitharaman will unveil the details of India’s Union Budget for the Fiscal Year 2023-24. Ahead of the release, Reuters said, “The Indian government will present a budget on February 1 that will likely put deficit reduction ahead of vote-winning spending, even as Prime Minister Narendra Modi looks towards seeking a rare third term of office in 2024.” Read next: Inflation Is Falling, But Does It Mean That The Fed's February Decision Will Be Dovish?| FXMAG.COM Additionally, the Reserve Bank of India is expected to raise its main interest rate by a modest 25 basis points to 6.50% at its meeting one week after New Delhi's budget, before leaving it at that level for the rest of the year, a Reuters poll of economists found. The same could keep the USD/INR buyers hopeful as policy pivot appears closer. Moving on, USD/INR pair may witness further upside should the Indian budget updates disappoint the markets, which is more likely. However, the expected dovish hike from the Fed and likely weakness in the US Nonfarm Payrolls (NFP) may restrict the pair’s upside moves. Technical analysis The USD/INR pair’s successful trading beyond the 10-DMA, around 81.45 by the press time, keeps the buyers hopeful. However, the 100-DMA, close to 81.85 at the latest, holds the key to the bull’s dominance.
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

TeleTrade Comments TeleTrade Comments 30.01.2023 09:46
USD/CAD keeps bounce off 2.5-month low while snapping two-day downtrend. Shift in market sentiment exerts downside pressure on Oil price, favors US Dollar. China-linked headlines entertain traders amid a light calendar. Fed’s dovish hike, softer NFP appears necessary for bears to keep the reins. USD/CAD picks up bids to refresh intraday high around 1.3325 during the first positive day in three heading into Monday’s European session. In doing so, the Loonie pair takes clues from the downbeat Oil prices, Canada’s main export, as well as a rebound in the US Dollar amid the market’s cautious optimism. That said, WTI crude oil takes offers to refresh intraday low near $79.50 as early Asian session optimism, mainly led by China’s return from the one-week-long Lunar New Year (LNY) holidays, fades amid mixed concerns. Read next: A Loss Of $48 Billion In Shares Of The Indian Group Adani As A Result Of The Hindenburg Research Report| FXMAG.COM Also challenging the Oil price could be the US Dollar Index (DXY) rebound from the intraday low while ignoring the US Treasury bond yields. That said, the DXY prints a three-day uptrend near 102.00 but the US 10-year Treasury bond yields retreat from daily tops to 3.50% after the Japanese panel teases hawkish moves of the Bank of Japan (BOJ). Elsewhere, Bloomberg poured cold water on the face of expectations that the holiday season propelled China activities. The analysis stated a few signs of improvement in the Chinese economy despite its second month without Covid Zero curbs. The research, however, marks the Lunar New Year (LNY) holiday season as marking a lid on some activities. Against this backdrop, the US Treasury bond yields retreat from the intraday top but the stock futures print mild losses. Furthermore, the Asia-Pacific shares grind higher and the US Dollar Index (DXY) defends a two-day recovery. Looking forward, risk catalysts are likely to determine short-term market moves ahead of Wednesday’s Federal Open Market Committee (FOMC) and Friday’s US jobs report for January. It’s worth noting that headlines surrounding China are an extra burden on the USD/CAD watchers to determine near-term moves. Technical analysis A four-day-old bearish triangle restricts USD/CAD moves between 1.3290 and 1.3330.
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The Kiwi Asset (NZD/USD) Is Facing Pressure

TeleTrade Comments TeleTrade Comments 30.01.2023 09:52
NZD/USD is facing hurdles in shifting its auction above 0.6500 amid a recovery in the USD Index. Softening consumer spending has bolstered the expectations of a smaller interest rate hike by the Fed. This week, the release of the NZ Employment data will be of utmost importance. The NZD/USD pair is failing in keeping its auction above the psychological resistance of 0.6500 in the early European session. The Kiwi asset is facing pressure as the US Dollar index (DXY) has shown a perpendicular recovery move after a sheer decline to near 101.40. The recovery move in the USD Index is quite strong and is showing signs of vertical decline in the risk appetite of the market participants. S&P500 futures are continuously adding more losses as investors have underpinned the risk-aversion theme amid soaring volatility ahead of the interest rate decision by the Federal Reserve (Fed). While the alpha generated by the US government bonds has trimmed as investors are seeing a lower terminal rate than previously anticipated. The 10-year US Treasury yields have dropped to near 3.50%. Softening consumer spending and Personal Consumption Expenditure (PCE) Price Index have bolstered the expectations of a smaller interest rate hike by the Fed. It is worth noting that Fed chair Jerome Powell has already trimmed the scale of interest rate hikes in its December monetary policy meeting to 50 basis points (bps) after announcing four consecutive 75 bps rate hikes. The Fed is expected to trim the scale of the interest rate hike further by 25 bps. On the New Zealand front, investors are awaiting the release of the Employment data, which is due on Wednesday. The Employment Change (Q4) is expected to drop to 0.7% from the former release of 1.3%. While the Unemployment Rate is seen unchanged at 3.3%. The New Zealand economy is failing to generate significant employment opportunities amid higher interest rates by the Reserve Bank of New Zealand (RBNZ).  
The Downside For The AUD/USD Pair Is Likely To Remain Cushioned

The Downside For The AUD/USD Pair Is Likely To Remain Cushioned

TeleTrade Comments TeleTrade Comments 30.01.2023 10:01
AUD/USD comes under some selling pressure on Monday and hits a fresh daily low in the last hour. A weaker tone around the equity markets is seen exerting pressure on the risk-sensitive Aussie. Bets for smaller Fed rate hikes keep the USD depressed and should help limit losses for the major. The AUD/USD pair attracts some sellers following an early uptick to the 0.7120 area on Monday and remains on the defensive through the early European session on Monday. Spot prices drop to a three-day low, around the 0.7075 region in the last hour, though any meaningful downside still seems elusive. A softer risk tone - as depicted by a weaker trading sentiment around the equity markets - is seen as a key factor driving flows away from the risk-sensitive Aussie. Despite China's move to scale back its strict zero-COVID policy in December, the worst yet COVID-19 outbreak in the country has been fueling uncertainty about a strong economic recovery. This, in turn, tempers investors' appetite for riskier assets and keeps a lid on any optimism in the markets. The downside for the AUD/USD pair, meanwhile, is likely to remain cushioned, at least for now, amid subdued US Dollar price action. In fact, the USD Index, which tracks the Greenback against a basket of currencies, languishes near a nine-month low amid firming expectations for a less aggressive policy tightening by the Fed. The markets seem convinced that the US central bank will soften its hawkish stance and expect a smaller 25 bps rate hike on Wednesday. Read next: A Loss Of $48 Billion In Shares Of The Indian Group Adani As A Result Of The Hindenburg Research Report| FXMAG.COM The bets were lifted by Friday's release of the US Personal Consumption Expenditures (PCE) data, which showed that the Core PCE Price Index fell to the 4.4% YoY rate in December from the 4.7% previous. That said, other US macro data released recently pointed to a resilient economy and backed the case for the Fed to maintain its hawkish stance for longer. Hence, the focus will remain on the outcome of a two-day FOMC meeting, which might provide cues on future rate hikes. Heading into the key central bank event risk, traders might refrain from placing aggressive bets and prefer to move to the sidelines. Apart from this, rising odds for an additional rate hike by the Reserve Bank of Australia (RBA) in February could underpin the Australian dollar and help limit any meaningful corrective pullback for the AUD/USD pair. This makes it prudent to wait for strong follow-through selling before confirming that spot prices have topped out.
Metals Market Update: Decline in LME Copper On-Warrant Stocks, Zinc and Lead Surplus Continues, Nickel Market in Supply Surplus

FX Daily: Stress testing the consensus view

ING Economics ING Economics 30.01.2023 10:11
The week ahead sees several key event risks for FX markets - largely in the form of central bank meetings in the US, eurozone, and other parts of Europe. Fresh communication from central bankers will stress test investors' view that the peak in tightening cycles is close at hand. A Fed push-back against 2H23 easing expectations could support the dollar USD: Action kicks off tomorrow The dollar starts the weak in very narrow ranges and not far from the lows of the year. This week will stress test the consensus view amongst investors that i) the Federal Reserve will start to acknowledge easing price pressures and soon end its tightening cycle, ii) China reopening will support global growth and iii) that lower energy prices mean improved European growth prospects. Our macroeconomists discuss many of those themes in their week ahead preview, including links to full previews for this week's FOMC, European Central Bank and Bank of England meetings. Our FX contribution to the FOMC preview outlines a scenario where the dollar could sell off and EUR/USD trade over 1.10 were the Fed to hugely surprise by suggesting that any additional hikes, after this week's 25bp increase, would be data dependent. That seems unlikely. More likely is the Fed pushing back against the 50bp of easing priced into the second half of the year and the dollar enjoying a brief rally. In addition to Wednesday's FOMC meeting, the US data calendar contains two important pieces of US data. The first is Tuesday's release of the fourth quarter Employment Cost Indicator (ECI) - one of the Fed's preferred gauges of price pressures in labour markets. This had spiked to 1.4% in the first quarter of last year from the previous three months, but is expected to drop back to 1.1% in the fourth quarter from 1.2% in the third. Any upside surprise here could see expectations swing toward a more hawkish FOMC outcome. And Friday sees the US January jobs report. ING's US economist, James Knightley, sees the headline job creation starting to dip. And assuming there are no upside surprises in the average earnings figures, we assume this data release would continue to support the benign, dollar-bearish environment. Clearly, it is a busy week for FX with arguably most of the volatility coming between the FOMC meeting outcome on Wednesday evening and the ECB/BoE decisions and press conferences on Thursday lunchtime. In the background, this week also sees the reopening of Chinese markets after the Lunar New Year public holiday. Investors are very bullish on China reopening prospects and will need to be fed more supportive data points this week. Here, tomorrow sees the Chinese PMIs for January, where sizable rebounds are expected - and required to support bullish positioning. Our game plan sees the dollar staying supported into Wednesday's FOMC meeting (e.g. DXY holding support down here at 101.30/50), but any FOMC-inspired rally in DXY to the 102.50/103.00 area proving temporary. Chris Turner EUR: Drifting into Wednesday/Thursday As above, Wednesday/Thursday could prove the most volatile period of the week. Our core view for the ECB meeting is that the central bank will stay hawkish and push back against the easing priced in for 2024. That should see two-year EUR:USD swap differentials continue to narrow and be positive for EUR/USD. We had cited this narrowing in swap differentials as a major factor when revising our EUR/USD forecasts substantially higher.  Before Thursday's ECB meeting, today sees the release of January economic confidence readings for the eurozone. These are expected to have improved marginally, but any upside surprises would feed the narrative of lower energy and strong fiscal stimulus ensuring that recessions if seen, are mild.  Expect EUR/USD to drift in a 1.08-1.09 range - probably into the US ECI data release tomorrow. Chris Turner GBP: Bank of England could be supportive As we discuss in the BoE monetary policy preview, a 50bp rate hike could prove mildly supportive for sterling. Our base case of a 50bp hike is not fully priced by the market. And with wage pressures remaining firm and base effects not expected to see CPI rolling substantially lower until the second quarter, it looks too early for the BoE to be sounding the all-clear on inflation. Depending on the state of the dollar after the FOMC meeting, GBP/USD could be pressing 1.2500 by the end of the week. Chris Turner CEE: Czech National Bank to confirm stable rates After a busy two weeks in Poland and Hungary, the main focus will shift to the Czech Republic. But first, today, we will see the final GDP number for Poland for last year. On Tuesday, fourth quarter GDP for the Czech Republic will be released. On Wednesday, we'll see the Czech Republic's state budget for January and PMI numbers across the region. We expect sentiment to improve in Poland, to be unchanged in the Czech Republic, and to deteriorate in Hungary. The Czech National Bank is scheduled to hold its first meeting of the year on Thursday. We expect rates and the FX commitment to remain unchanged. The main focus will be on the central bank's new forecast and outlook for January inflation. Thus, given the risk of higher inflation in the first quarter, we expect the tone to remain unchanged with the Bank citing "higher rates for longer" and warning that it does not "rule out a rate hike at subsequent meetings". However, we expect that rates will remain stable at least until the second quarter. In Hungary, S&P on Friday decided to downgrade the rating by one notch to BBB- with a stable outlook, highlighting the impact on the economy due to Covid-19, the Ukrainian war, and delays in EU money flows. The FX market in the region this week will, of course, be driven mainly by the global story and high volatility will not be a surprise. However, overall global conditions should remain positive for the region. Moreover, gas prices are testing new lows again, which is always good news for CEE. On the local front, we expect the Hungarian forint to absorb the negative shock of the downgrade and move back towards 395 EUR/HUF. In our view, the Czech koruna has the heaviest long positioning at the moment and therefore we see no room for the CNB meeting to support a move lower. On the contrary, we believe the koruna is overvalued and should move back towards 24.0 EUR/CZK. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ECB cheat sheet: Wake up, this isn’t the Fed!

ECB cheat sheet: Wake up, this isn’t the Fed!

ING Economics ING Economics 30.01.2023 10:14
A 50bp hike by the European Central Bank, and a repeat of its December guidance, are set in stone but a pushback against subsequent cut expectations will move 5Y euro rates higher Source: ING Front-end pricing talk but it's a red herring Much has been said and written about the next two ECB meetings’ rate hikes. The upshot is, as our colleagues highlight, the ECB still has a licence to hike, and a 50bp increase is pretty much set in stone this week. In all likelihood, guidance for a 50bp March hike will be repeated too but the March meeting will also feature a new set of forecasts that should heavily influence the ECB’s decision. As a result, markets will be tempted to rely more on their anticipation of how the ECB staff forecast will evolve at that meeting, rather than on president Christine Lagarde’s guidance. In all likelihood, guidance for a 50bp March hike will be repeated As our economics team noted in their preview, "If everything else remains the same as it was in December, the ECB’s headline [March] inflation projections could easily be lowered by 0.3 to 0.5 percentage points for 2024 and 2025". Cut-off for the FX, rates, and energy market prices is a little under one month away but, as things stand, this would imply 2025 inflation at 1.8%, under the ECB’s 2% target. Worse, this would be premised on a curve that implies 80bp of cuts between the mid-2023 rate peak and end-2024. To cut a long story short, we wouldn’t overstate the importance of the next two meetings for interest rates markets. We now have more hawkish ECB expectations than the market Source: Refinitiv, ING Eyes on the prize, the belly's where the battle really is The curve is pricing a rapid decline in rates after they reach their peak in 2023. For a central bank expected to hike at least three more times, this is problematic. Lagarde is sure to be asked about this anomaly. If recent history is any guide, she’ll likely take that opportunity to guide market rates higher. We doubt she’ll manage to completely dis-invert the curve, however. The shape of the euro term structure cannot be seen entirely in isolation and some remnant of easing is likely to persist as long as the Fed is expected to cut more than 200bp by end-2024. But, at least, she should manage to delay cut expectations. The part of the curve most likely to be affected is the 5Y point. We think hike expectations are correctly set for the next few meetings which imply that short-dated bonds and swaps, say up to 2Y, are also correctly priced. Longer tenors, on the other hand, depend on more structural factors such as where investors think the long-term interest rate equilibrium lies. This is not something the ECB will change at this meeting. This leaves the maturity in between, aptly called the belly of the curve, as the sector most at risk of a pushback against cut expectations. What happens to the slope of the curve, for instance 2s10s, depends in greater parts on the tone of the ECB from one meeting to the next. We have a view (it will be hawkish) but given its recent unpredictability, we have a greater conviction on our outright (higher rates) and curvature (5Y rates to rise faster than other maturities) calls.  5Y rates are most at risk if the ECB pushes back against rate cut expectations Source: Refinitiv, ING 'Detailed parameters' on quantitative tightening to come, but the market-moving information is already out The ECB has promised “detailed parameters” for the reduction of its asset purchase programme portfolio. With laying out the headline volumes already at the last meeting, the most market-moving aspects are already known. What we could expect is details about whether the reduction will be proportionate across the different asset classes. Within the public sector specifically, how the ECB will maintain alignment with the capital key distribution across countries. We do not anticipate the ECB to diverge from previous targets here, though we might get information on how special situations will be dealt with. For instance when overall redemptions in a month are below the targeted reduction volumes. A rebalancing towards supranational debt with their larger share of green bonds would make sense Keeping in mind the focus the ECB and Isabel Schnabel in her recent speeches have put on “greening” the central bank’s portfolios, there is a chance that this also translates into more concrete action in the public sector portfolio. A rebalancing towards supranational debt with their larger share of green bonds would make sense, and it would not impact the capital key alignment. It would also address the rising prominence of the European Union as an issuer. We doubt though that such tweaks by themselves will impact the market's currently benign take on sovereign spreads. This time they are more likely to take their cues from the overall tilt of the ECB’s communication. This isn't a litmus test for the euro rally While it’s undeniable that the ECB doubling down on its hawkish rhetoric has contributed to the strengthening of the euro since December, we don’t see this week’s policy meeting as a litmus test for the sustainability of the euro rally. The reasons are two-fold. First, EUR/USD may well return to being predominantly a dollar story this week. A Fed approaching peak rate and facing a worsening economic outlook has more room to surprise on the hawkish side, and we think it could offer a breather to the dollar. In contrast, as discussed above, we would not overstate the importance of the next two ECB meetings for rates. The ECB’s communication hiccups have likely eroded the market's trust in Lagarde’s guidance This leads us to the second reason: the ECB’s communication hiccups have likely eroded the market's trust in Lagarde’s guidance. Only a few hours after the December meeting, the news that many members had preferred 75bp was leaked. And if ECB members aligned behind the 50bp guidance in recent weeks, a probably more debated 50bp move in March may well cause sparse communication again after the February meeting. This – in our view – may lead markets to be more forward-looking than what Lagarde will wish them to be. Ultimately, data may remain a larger driver than Lagarde’s guidance for the euro. If gas prices stay capped and economic surveys keep pointing up, a correction in EUR/USD after a hawkish Fed should not last long. We expect EUR/USD to trade around 1.07-1.10 for most of February. Another big break higher may need to wait for an official pivot by the Fed: we see this materialising in the second quarter, where we forecast a move to 1.15.   Read this article on THINK TagsInterest Rates FX ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The German economy underperformed in the Q4 of 2022, GDP declined

German economy falls into winter recession

ING Economics ING Economics 30.01.2023 12:40
So much for reliable statistics! The German economy contracted in the fourth quarter of 2022 after the first tentative statistics pointed to stagnation Germany's economy isn't just cooling, it's facing a winter recession   The German statistical office just released its first official estimate for fourth-quarter GDP growth, and recession fears are back. The economy shrank by 0.2% Quarter-on-Quarter, from + 0.5% QoQ in the third. GDP details will only be released in a few weeks, but private consumption was the main drag on growth according to the statistical office, As a result, annual GDP growth for 2022 was also revised downwards to 1.8%, from 1.9% YoY. Economic outlook anything but rosy Not falling off the cliff is one thing, staging a strong rebound, however, is a different matter. And there are very few signs pointing to a healthy recovery of the German economy any time soon. First of all, we shouldn’t forget that fiscal stimulus over the last three years stabilised but did not really boost the economy. Industrial production is still some 5% below what it was before Covid, and GDP only returned to its pre-pandemic level in the third quarter of 2022. Industrial orders have also weakened since the start of 2022, consumer confidence, despite some recent improvements, is still close to historic lows, and the loss of purchasing power will continue in 2023. Let's also not forget that, like every eurozone economy, the German economy still has to digest the full impact of the European Central Bank's rate hikes. Demand for mortgages has already started to drop and, as in previous hiking cycles, it didn't take long before the demand for business loans also started to drop. In short, the German economy will still be highly affected by last year’s crises throughout 2023. Germany’s economic outlook for this year looks complicated Germany’s economic outlook for this year looks complicated, to say the least, with an unprecedentedly high number of uncertainties and developments in opposing directions. And there is more; the German economy is still facing a series of structural challenges which are likely to weigh on growth this year and beyond: energy supply in the winter of 2023/24 and the broader energy transition towards renewables, changing global trade with more geopolitical risks and changes to supply chains, high investment needs for digitalisation and infrastructure, and an increasing lack of skilled workers. This long list embodies both risks and opportunities. If historical lessons from previous structural transitions are of any guidance, even if managed in the most optimal way, it will take a few years before the economy can actually thrive again. Winter recession remains base case for German economy Today’s GDP numbers once again show that caution, better than hope, is probably the best guidance for predicting German and European economic growth. The warmer winter weather, along with implemented and announced government fiscal stimulus packages, have prevented the economy from falling off a cliff, but a technical recession is still a likely outcome. We stick to our forecast of a winter recession in Germany and a very mild recession for the whole of 2023. Read this article on THINK TagsGermany GDP Eurozone
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Major Currency Pairs Are Waiting For Central Banks Decisions, USD/JPY Pair Rose Above 130.00,

Kamila Szypuła Kamila Szypuła 30.01.2023 13:15
The dollar weakened on Monday to near an eight-month low ahead of a series of central bank meetings this week. The US Federal Reserve is likely to continue to ease the pace of monetary policy tightening at its upcoming meetings and plans to raise interest rates by 25 basis points at its next two policy meetings. USD/JPY USD/JPY pair struggled to hold significant gains above the psychological 130.00 level. The strength of the yen was limited by dovish comments from the BoJ president. BoJ Governor Kuroda continues to maintain his lenient stance on monetary policy. This comes as investors grow optimistic that rising inflation will result in a hawkish move away from the BoJ. Any further hawkish change from the BoJ seems unlikely with Governor Kuroda at the helm and could happen when the governor steps down in April. Driven by the risk associated with key central bank events, investors seem reluctant to bet on an aggressive bear market around the USD/JPY pair. In addition, comments from BoJ chairman Kuroda Haruhiko that the central bank must continue its easing policy and keep the inflation target at 2% limit the gains for the JPY. USD/JPY Pair started the week at 129.8040 and then increased. Currently, the pair is holding above 130.00. EUR/USD Higher Spanish inflation data supported the euro. The euro surged above $1.09 in late January, hovering around its highest level since April last year as investors awaited multiple central bank meetings this week as they digested stronger than expected Spanish inflation figures. The European Central Bank is due to raise interest rates by 50 basis points on Thursday, bringing borrowing costs to their highest level since 2008, while investors will also be on the lookout for signs of slowing the pace of monetary policy tightening at its March meeting. Read next: Glovo Planned To Lay Off 250 Workers Worldwide, The Middle East Is Already Suffering From A Water Shortage| FXMAG.COM EUR/USD pair gained traction and climbed above 1.0900 during the European session, but failed to hold and fell to 1.0893. GBP/USD The cable price (GBP/USD) was similar to the EUR/USD rate, i.e. it rose above 1.24 in the European session, but it did not hold and fell to 1.2384. The slight selling pressure around the US dollar ahead of key central bank policy announcements this week appears to be helping the pair push higher. GBP/USD traders can expect interest rate decisions from both sides of the pair this week, with the US Federal Reserve and Bank of England expected to make February moves on Wednesday and Thursday respectively. The Bank of England is to raise its base rates by half a percentage point. That would take them to 4%, the highest level since the 2008 financial crisis, with further increases expected. However, there have been some objections to the interest rate setting by the Monetary Policy Committee and it seems that a smaller hike is still on the table. AUD/USD AUD/USD prices have fallen to a three-day low of around 0.7075 in the last hour, although any significant drop still seems elusive. The Aussie pair has lost its momentum above 0.7100 but is not falling significantly and is trading at 0.7076. The Australian remains supported by expectations of further policy tightening from the Reserve Bank of Australia amid soaring inflation and China's swift reopening after Covid restrictions have boosted the global economic outlook. Australia's annual inflation rose 7.8% in December, the RBA has already raised the cash rate by a total of 300 basis points at eight consecutive meetings in 2022, bringing borrowing costs to a 10-year high of 3.1%. Source: investing.com, finance.yahoo.com, dailyfx.com
UK Budget: Short-term positives to be met with medium-term caution

The Bank Of England Is Anticipated To Hike Rates By 50 bp As A Result Of A Wealth Of Data

Jakub Novak Jakub Novak 30.01.2023 14:15
After the Bank of England meeting this week, the British pound is still optimistic about future growth since a sharp rise in salaries in the country is probably going to cause inflation to reach a new round and maintain its double-digit level. This decision will be extremely painful for families Investors and experts anticipate that the UK central bank will increase its benchmark interest rate on Thursday to 4%. This will be the fastest increase in three decades and the greatest rate since 2008. This decision will be extremely painful for families who are already trying to cope with the greatest cost of living increase in history. In a protest that their pay is not keeping up with inflation, which increased to a 41-year high last year, more than 1 million employees in the public sector are set to abandon their positions this week. Except for the time that followed the epidemic, politicians led by Governor Andrew Bailey are concerned that wages are rising at the quickest rate in history, raising the possibility of a spiral in which rising salaries lead to rising prices. The supply assessment Officials are currently putting the finishing touches on an annual report on pay fluctuations and an evaluation of the economy's potential for productivity. The supply assessment is likely to indicate a more competitive labor market than anticipated, while the report is likely to focus on future wage increases by businesses in 2023. These elements will cause price increases, which will make it even more necessary to boost rates even when the economy is contracting. At its meeting on Thursday, the Bank of England is anticipated to hike rates by 50 basis points as a result of a wealth of data demonstrating ongoing inflation. Although policymakers are expected to hold off on sending out overt signals that borrowing costs are about to reach their maximum, economists anticipate the action will put the central bank closer to the marginal rate in this cycle of hikes. The Bank of England will need to further cool the economy To avoid the development of a spiral in which wage growth + price growth, the Bank of England will need to further cool the economy by raising unemployment. This is true even though predictions called for a recession this year and a sharp decline in inflation compared to the level predicted in November. Many predicted a 4.8% pay gain in 2022, the highest percentage in the study's 15-year history. According to the most recent official data, average earnings, excluding incentives, rose 6.4% from a year earlier in the three months leading up to November. Since accounting began in 2001, this is the biggest rise. The regulator has few options, particularly if the government of Rishi Sunak continues to offer concessions and raise wages for the populace to ease the worst recent cost-of-living problem. GBP/USD Regarding the technical analysis of GBP/USD, the pound continues to be in demand. Purchasers must maintain their advantage above 1.2350. The only thing that will increase the likelihood of a further recovery to the area of 1.2440, after which it will be possible to discuss a more abrupt move of the pound up to the region of 1.2490 and 1.2550, is the failure of the resistance of 1.2400. After the bears seize control of 1.2350, it is possible to discuss the trading instrument's pressure returning. The GBP/USD will be pushed back to 1.2285 and 1.2170 as a result, hitting the bulls' positions. EUR/USD Regarding the technical analysis of EUR/USD, there is still demand for the single currency, and there is a potential that monthly and annual highs will continue to be updated. To do this, the trading instrument must maintain a price above 1.0850, which will cause it to surge to the area of 1.0900. Above this point, you can easily reach 1.0930 and update 1.0970 in the near future. Only the breakdown of support at 1.0850 will put more pressure on the pair and drive EUR/USD to 1.0805, with the possibility of falling to a minimum of 1.0770 if the trading instrument declines.   Relevance up to 08:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333588
The German economy underperformed in the Q4 of 2022, GDP declined

Germany’s Economy Declines In Q4, Eurozone GDP Is Expected To Slow

Kenny Fisher Kenny Fisher 30.01.2023 14:27
The euro is in positive territory on Monday. EUR/USD is trading at 1.0907 in the European session, up 0.36%. It was a quiet week for the euro, which continues to hug the 1.09 line. I expect to see stronger volatility this week, as the eurozone releases GDP and inflation data, followed by the ECB rate announcement on Thursday. German GDP declines in Q4 Germany’s economy posted a rare decline in the fourth quarter. GDP came in at -0.2% q/q, down from 0.4% in Q3 and shy of the forecast of zero. On an annualized basis, GDP slowed to 1.1%, down from the Q3 read of 1.3%, which was also the forecast. The markets are braced for more bad news out of the eurozone on Tuesday. German retail sales for November are expected to drop by 4.3% y/y, after a decline of 5.9% in November. Eurozone GDP is expected to slow to 1.8% y/y in Q4, compared to 2.3% in Q3. The ECB will be keeping a close eye on this week’s GDP and inflation data, ahead of a key rate decision on Thursday. The central bank has adopted a hawkish stance but is still playing catch-up with inflation, which is currently at 9.2%. The markets are expecting 50-basis points at the upcoming and March rate meetings, but there is uncertainty as to what happens after that. The ECB would love to ease up on rates, but the paramount consideration is curbing high inflation. The cash rate stands at 2.50%, and the markets are forecasting a terminal rate in the range of 3.25%-3.75%, meaning that there is plenty of life left in the current rate-tightening cycle.   EUR/USD Technical EUR/USD is testing support at 1.0907. Below, there is support at 1.0837 1.0958 and 1.1028 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Australian dollar against US dollar: USD may rise on the back of the Republicans and Democrats negotiations

The Aussie Fell This Morning Due To Weak Retail Sales

InstaForex Analysis InstaForex Analysis 31.01.2023 08:00
The Australian dollar lost 47 points yesterday, it led losses, but technically there are no signs of a trend reversal yet. We just assume that the price broke off from the MACD indicator line, and now it is about to do that. There is a chance that the price will meet the MACD line near its intersection with the support level of 0.6873 (low of January 19, low of August 5, 2022). The aussie fell this morning due to weak retail sales in December, which were down 3.9% vs. the forecast of -0.3%. A little later, the Chinese manufacturing activity index for January of 50.1 points against December's 47.0 points stopped the AUD/USD decline. On the four-hour chart, the price settled below the MACD line. Also, the price overcame the support of the local low of January 25 (gray oval). The Marlin oscillator is in the area of the downtrend. We wait for the results of tomorrow's Federal Reserve meeting.   Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333684
Bank of England hikes rates and keeps options open for further increases

The GBP/USD Pair Has The Probability Of A Decline In The Near Future

InstaForex Analysis InstaForex Analysis 31.01.2023 08:04
Yesterday, the British pound fell by 44 points within the framework of sideways movement under the resistance level of 1.2420. From below, the price has the balance and MACD indicator lines (1.2227), and it needs to cross these by Thursday, which is when the Bank of England meeting will be held (it is expected to raise the rate by 0.50%, as well as the increase in the Federal Reserve rate on Wednesday). If the price does not cope with this task, the pound will be aiming for 1.2598-1.2666. On the four-hour chart, the MACD line looks stable for the time being, the Marlin oscillator is in the area of the downtrend. These technical data still increase the probability of a decline in the near future.   Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333685
Rates Spark: Nothing new on the dovish front

The Pressure On The Euro Is Gradually Getting Bigger

InstaForex Analysis InstaForex Analysis 31.01.2023 08:08
On Monday, the euro tried to trade wide, i.e. it tried to go up using the CPI growth in Spain in January to 5.8% y/y against 5.7% y/y earlier, but the German GDP contraction by -0.2% q/q and the manufacturing activity growth by the Dallas Fed in January from -20.0 to -8.4, made the euro close the day with 18 points decrease. The main events will be held tomorrow and on Thursday. The Federal Reserve is expected to raise rates by 0.25% tomorrow and the European Central Bank is expected to raise rates by 0.50% on Thursday. We don't know which way the euro will move. Although, it is quite interesting that market participants have already taken these central bank meetings into account (and not only in the prices, but psychologically). As the ECB's intentions look clear and understandable now, while the US central bank's intentions are still vague, Fed Chairman Jerome Powell's comments will keep investors in the mood to buy the dollar. From the technical side, the pressure on the euro is gradually getting bigger. The divergence on the daily chart is too long and this weakens its influence on the price prospect, but if the signal line of the Marlin oscillator will move into the red zone, the probability of consolidating below the MACD indicator line will increase, and this is a start to a medium-term decline. The first target is the 1.0758/87 range, the second target is the MACD line 1.0727, further to 1.0660. On the four-hour chart, the price settled under the balance and MACD indicator lines, while Marlin is in a stable downward position. The probability of the price decline is much higher than the probability of its growth. Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333687
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The Outlook Of The EUR/USD Pair Price

Torben Melsted Torben Melsted 31.01.2023 08:10
EUR/USD is again testing support at 1.0835. A break below here will confirm that wave B is complete and wave C lower to the ideal target area between 1.0437 - 1.0500 is in progress. Short-term we see minor resistance near 1.0873, which ideally will cap the upside for the expected break below support at 1.0835 for the final decline in wave C of 4 towards the 1.0437 - 1.0500 area, from where wave 5 higher can take over. Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310703
EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

EUR/USD Pair: The Bulls Might Remain Inclined To Be Back In Control

Oscar Ton Oscar Ton 31.01.2023 08:22
Technical outlook: EURUSD dropped through 1.0839 during the New York session on Monday before pulling back. The currency pair had earlier rallied through 1.0911 which was an intraday resistance zone as discussed. The single currency pair is seen to be trading close to 1.0840 at this point in writing as the bears have successfully carved a lower high at 1.0911. Prices ideally stay lower from here on. EURUSD has completed its larger-degree rally, which had begun from the 0.9535 low in September 2022 at 1.0929. A high probability remains for a meaningful pullback of a similar degree towards 1.0400 and 1.0100 in the next few weeks. The bulls might remain inclined to be back in control thereafter and push prices above 1.0929. EURUSD is well placed to find intraday resistance around 1.0880 and it might be taken as yet another opportunity to add short positions. Only a consistent break above 1.0929 will negate the above bearish outlook bringing back the bulls under control. Watch out for the Fibonacci 0.618 retracement around 1.0100 for a potential turn going forward. Trading idea: Potential bearish acceleration against 1.1000 Good luck!     Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310712
Forex: Euro against US dollar - forecast on April 24th, 2023

The Euro May Fall If The ECB Does Not Tighten Its Rhetoric

Paolo Greco Paolo Greco 31.01.2023 08:33
The EUR/USD currency pair began the week as uninteresting as possible. However, it is evident from the illustration above that the pair has been trading in this manner for several weeks. It is merely on the flat and close to the local maximum. There has emerged a paradoxical situation where traders are unable to make additional acquisitions and are unwilling to sell or fix profits on long positions. However, there should still be a solution to this problem. And this week is probably not the best time. This week will be filled with activities and macroeconomic reports. We don't want to say it again, as analysts and experts have only been discussing rates for the past two weeks. This matter is, in our opinion, already resolved. The ECB will increase its rate by 0.5%, while the Fed will do so by 0.25%. We allocate 2% of the chance to a "surprise" of some kind. It is hard to plan for every scenario, but an improbable turn of events should never be fully ruled out. So, we're getting ready for the most likely situation. Additionally, it asserts that the market has already completely factored in both the ECB rate increase and the Fed rate increase. It turns out that only Jerome Powell or Christine Lagarde can deliver unexpected news. However, Ms. Lagarde has talked five or six times recently, and Mr. Powell and his colleagues covered all of their ground two weeks ago. Simply put, none of these individuals had any new facts to modify their statements. One would anticipate that monetary policies would be modestly modified if new inflation reports had been published over the previous week. However, there were no noteworthy reports, so there is also no justification for changing the tone. A surprise from the ECB is still possible. 95% of what is mentioned above is accurate. There is one "but," though, and it cannot be entirely disregarded. The ECB meeting will take place on Thursday, while a new report on inflation in the European Union will be revealed on Wednesday. Thus, Lagarde's rhetoric could still vary slightly. There are some pretty clear-cut explanations for this. The truth is that news of Spain's accelerating inflation broke yesterday. Since they essentially have no impact on market mood, we typically do not take into account certain macroeconomic statistics of specific EU member states. However, the rising inflation in Spain raises the possibility that the rest of Europe may follow the lead. After all, forecasts for the Spanish CPI pointed to a new fall. And given that the ECB frequently increases rates and that oil and gas prices have decreased noticeably recently, a reduction was the most plausible scenario. However, the effect of declining energy prices has already been seen. Either the ECB rate is increasing too slowly, it is increasing slowly, or it is generally an accident. Whatever it was, there is a chance that European inflation may either slow down only slightly (0.1–0.2%) or not at all. And in this instance, we shall get the most crucial answer: by how much does the ECB have the option of raising the key rate? Keep in mind that everyone now believes that the next three meetings will increase by 1.25%. What will happen then? The ECB will have to propose tougher measures to restrain price growth if inflation stops decreasing. The euro currency could gain a new growth component if it achieves this. The euro may fall if the ECB does not tighten its rhetoric in response to Wednesday's poor data, as market players will realize that the European regulator cannot raise the rate as much as necessary. As of January 31, the euro/dollar currency pair's average volatility over the previous five trading days was 67 points, which is considered "normal." So, on Tuesday, we anticipate the pair to trade between 1.0819 and 1.0953. A new round of downward movement will be signaled by the Heiken Ashi indicator reversing downward. Nearest levels of support S1 – 1,0864 S2 – 1.0742 S3 – 1.0620 Nearest levels of resistance R1 – 1.0986 Trading Suggestions: The EUR/USD pair is still moving upward. In the case of a price recovery from the moving average or when the Heiken Ashi indicator reverses upwards at this time, long positions with targets of 1.0953 and 1.0986 might be taken into consideration. With targets of 1.0819 and 1.0742, short positions can be opened after the price is fixed below the moving average line. The flat is still going at this point, which is something to consider. Explanations for the illustrations: Channels for linear regression - allow us to identify the present trend. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333693
FX Daily: Hawkish Riksbank can lift the krona today

The US Dollar Index Has A Potential For Bullish Reversal

Oscar Ton Oscar Ton 31.01.2023 08:35
Technical outlook: The US dollar index dropped through the 101.26-28 intraday lows on Monday to terminate its ongoing triangle consolidation before turning higher. The index has rallied sharply since then and is seen to be trading just below 102.00 at this point in writing. The recent rally could be seen as the first leg of a potential bullish breakout above the 102.20-50 zone. As depicted on the 4H chart here, the US dollar index has completed its larger-degree drop from 114.70, which began in September 2022. Prices are expected to produce a meaningful rally towards 106.50 and up to 109.50. Also, note that the above rally could be corrective and just a retracement of the entire drop between 114.70 and 101.10. The US dollar index could find strong intraday support around the 101.40-50 zone and it might be seen as an opportunity to add further long positions. On the other side, please keep a watch on 102.20, as a break higher would confirm that the bulls are back in control and want to accelerate the rise. Only a consistent break below 101.00 would negate the bullish scenario. Trading idea: Potential bullish reversal against 100.00 Good luck!   Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310718
Technical Outlook Of The Main EUR/USD Currency Pair

Central Bank Meetings Will Determine The EUR/USD Pair's Future Direction

InstaForex Analysis InstaForex Analysis 31.01.2023 08:48
Yesterday, traders received several signals to enter the market. Let us take a look at the 5-minute chart to figure out what happened. Earlier, I asked you to focus on the level of 1.0853 to decide when to enter the market. The euro fell to 1.0853 amid the weak German data. After that, the pair formed a false breakout and a buy signal, which caused the euro to rally back to 1.0889, which made it possible to gain about 30 pips. A false breakout down at 1.0889 gave a sell signal, but the downside movement was only about 15 pips. In the afternoon, a breakout and the retest to 1.0889 gave a buy signal, but the bulls didn't reach the monthly highs. As a result, the upward movement was about 15 pips. First of all, let us focus on the futures market and changes in the COT report. According to the COT report from January 24, the number of both long and short positions increased. Traders who were encouraged by the European Central Bank's officials last week continued to build up their long positions, as they expect aggressive moves from the central bank, as well as less aggressive policy from the Federal Reserve, which may revise the key interest rate hike. Quite weak fundamental data on the US economy, especially a decline in retail sales in December, pointed to the worsening of the overall situation in the country. It means that further monetary policy tightening may lead to even more negative results. Central bank meetings will take place this week, which will determine the pair's future direction. The COT report unveiled that the number of long non-commercial positions rose 9,464 to 237,743, while the number of short non-commercial positions jumped 2,099 to 103,394. At the end of the week, the total non-commercial net position was up 134,349 versus 126,984. All this suggests that investors believe in further growth in the euro but they are still waiting for a clearer picture from central banks on future interest rates. The weekly closing price rose to 1.0919 vs. 1.0833. Conditions for opening long positions on EUR/USD: Several data on eurozone countries will be released today, which may keep the bullish momentum had it not been for the Fed meeting. We will find out the results tomorrow, as well as gloomy forecasts on the growth rate of the European economy. We are expecting figures on the eurozone GDP growth rate for the fourth quarter of 2022. The same data from Germany turned out to be disappointing so we shouldn't expect anything good from the overall eurozone figure. German and Italian unemployment rates as well as consumer price indexes will probably take a back seat. Therefore, I expect a correction from the euro before tomorrow's Fed decision. In case the market reacts negatively to the decision, which is very likely, bulls should prevent the pair from going below the support at 1.0840, which was formed last week. A false breakout at this level will trigger longs on the uptrend and encourage the rebound to 1.0873, and the bears' MAs are located there. A breakout and a downward test of this level will allow the pair to reach 1.0909, and give an additional buy signal with the target at 1.0956. The farthest target is located at a new monthly high of 1.1003. A breakout of this level may continue the bullish trend. It will be wise to lock in profits at this level.If the euro/dollar pair declines and buyers fail to protect 1.0840 during the European session, the euro may show a deeper correction. Only a false breakout of this level around the next support at 1.0806 will lead to a buy signal. It is also possible to go long just after a bounce off the low of 1.0770 or even lower – from 1.0735, expecting an upward correction of 30-35 pips within the day. Conditions for opening short positions on EUR/USD: The bulls did not even reach the monthly highs yesterday, which clearly shows that traders are cautious before the key central bank meetings. The bears have a good chance of entering a bearish correction, especially considering the data that will be released today. The main goal is to protect the resistance level of 1.0873, which was gained yesterday. A false breakout below this level after we receive disappointing eurozone data, which would take the euro to the lower limit of the sideways channel at 1.0840, would be the best time to sell. It is unlikely that there will be a serious struggle for it, because this level has been tested twice. A breakout and settlement below this area as well as an upward test will give an additional sell signal. This will affect bulls' stop orders and push the pair to 1.0806, and will be the first correctional downward movement that may affect the bullish trend. Expect a move beyond that level only if we receive strong U.S. economic data in the afternoon. If the euro/dollar pair increases during the European session and bears fail to protect 1.0873, bulls will keep control over the market. In the event of this, traders should avoid selling the asset until the price hits 1.0909. A false breakout of this level will give a sell signal. Traders may also go short after a rebound from the high of 1.0956, or even higher - from 1.1003, expecting a decline of 30-35 pips. Signals of indicators: Moving Averages Trading is performed below the 30- and 50-day moving averages, which points to the possibility of entering a bearish correction. Note: The author considers the period and prices of moving averages on the one-hour chart which differs from the general definition of the classic daily moving averages on the daily chart. Bollinger Bands In case the pair falls, the lower limit of the indicator located at 1.0820 will act as support. In case of growth, the upper limit of the indicator at 1.0910 will act as resistance. Description of indicators Moving average (a moving average determines the current trend by smoothing volatility and noise). The period is 50. It is marked in yellow on the chart. Moving average (a moving average determines the current trend by smoothing volatility and noise). The period is 30. It is marked in green on the graph. MACD indicator (Moving Average Convergence/Divergence - convergence/divergence of moving averages). A fast EMA period is 12. A slow EMA period is 26. The SMA period is 9. Bollinger Bands. The period is 20. Non-profit speculative traders are individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions are the total number of long positions opened by non-commercial traders. Short non-commercial positions are the total number of short positions opened by non-commercial traders. The total non-commercial net position is a difference in the number of short and long positions opened by non-commercial traders   Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333689
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

Ahead Of The EUR/USD Pair There Is Many Reports From The Eurozone And The US

Jakub Novak Jakub Novak 31.01.2023 08:39
Analysis of transactions and tips for trading EUR/USD The test of 1.0885 occurred when the MACD line was just starting to move above zero, which was a pretty good signal to buy. Accordingly, it resulted in a price increase of around 25 pips. No other signals appeared for the rest of the day. Lower-than-expected Q4 GDP data from Germany led to a sell-off in EUR/USD on Monday afternoon. Most likely, this momentum will continue today as GDP data for the whole Euro area, as well as Germany and Italy's unemployment figures, are expected to show decreases. Meanwhile, price indices from Germany and France are unlikely to affect the pair's direction. In the afternoon, the US will release a report on consumer confidence, which, if shows an increase, could prompt another decline in EUR/USD. The Chicago PMI report, on the other hand, will be of little interest to the market. For long positions: Buy euro when the quote reaches 1.0860 (green line on the chart) and take profit at the price of 1.0895. Growth could occur if the economic data from the eurozone exceeds expectations. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0834, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0860 and 1.0895. For short positions: Sell euro when the quote reaches 1.0834 (red line on the chart) and take profit at the price of 1.0805. Pressure will increase if economic reports from the Euro area turn out to be weaker than expected. Slowing inflationary pressures in Germany and Italy could also prompt a price decrease. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0860, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0834 and 1.0805. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333715
Bank of England raised the interest rate for the 12th meeting in a row

An Aggressive Tone Of The Bank Of England Will All Have A Positive Effect On The British Pound

InstaForex Analysis InstaForex Analysis 31.01.2023 08:52
Yesterday, there were no signals to enter the market. Let's take a look at the 5-minute chart and figure out what happened there. During the European session, we failed to see updates of the nearest levels due to low volatility. During the US session, even though there was a test of the resistance at 1.2403, we didn't get any normal signals. For today, the technical picture has been completely revised. Before we conduct technical analysis, let's look at the situation in the futures market. According to the Commitments of Traders report for January 24, the number of long and short positions sharply fell. However, the decline was acceptable, especially with the number of problems that the UK government is experiencing now, like struggling with strikes and demands to raise wages and at the same time trying to achieve a steady decline in inflation. But for now all that is on the back burner since we have central bank meetings to look forward to. The Federal Reserve and its expected less aggressive policy and the Bank of England, which is likely to maintain an aggressive tone, as it refuses to raise rates by 0.5%. This will all have a positive effect on the British pound, so I expect the currency to appreciate further unless something extraordinary happens. According to the latest COT report, short non-commercial positions decreased by 7,476 to 58,690. Long non-commercial positions decreased by 6,713 to 34,756. Consequently, the non-commercial net position came in at -23,934 versus -24,697 a week ago. This kind of slight change does not significantly affect the balance of power, so we will continue to monitor macroeconomic reports in the UK and the BoE's decision. The weekly closing price of GBP/USD increased to 1.2350 against 1.2290. Conditions for opening long positions on GBP/USD: The pound trades with very low volatility, and it is usually difficult to make correct decisions in such conditions. This is the reason why I try not to look for close entry points, but focus on larger levels, which we have not reached lately. A couple of reports from the UK will be released today, and I don't think they are important. These are reports on the change of M4 money aggregate, the number of approved mortgage applications and the volume of net loans to individuals in the UK. This is past the currency market, so the pair could start a correction ahead of the Federal Reserve and the Bank of England meetings. A false breakout of 1.2312, which is the nearest support, will provide a buy signal and confirm the bulls' presence. This will provide an opportunity to go back to 1.2379. This is also the level where the bearish moving averages pass. Without this level, it will be difficult for the bulls to build a new uptrend. We can expect GBP to rise further, if it climbs above the aforementioned level amid strong UK reports. Afterwards, a breakout of 1.2379 and a downward test can push the price to 1.24441, which is this month's high and where I recommend locking in profits. The farthest target is located at 1.2487. If the quote hits the mark, selling pressure may decrease. If GBP/USD goes down and there is no bullish activity at 1.2312, the balance in the market will be lost, and the bears will push the pair down. In such a case, long positions could be opened after a false breakout through 1.2266. It will also become possible to buy GBP/USD on a rebound from 1.2172, allowing a correction of 30 to 35 pips intraday. Conditions for opening short positions on GBP/USD: Yesterday, the bears managed to recapture the monthly highs and they couldn't update them, which shows that the pair is locked in a sideways channel ahead of the central bank meetings. Now the bears have a good chance to build a bigger correction, but they need weak fundamental reports in order to do so. The downtrend may extend if the pair breaks below 1.2312, which may take place already in the first half of the day. But before we expect a continuation of the downtrend, it would be good to fight back around 1.2379, which will allow the bears to prove their presence in the market. If GBP/USD goes up after the data, a false breakout through 1.2379 will make a sell signal with the target at the nearest support level of 1.2312. A breakout and a retest of this mark to the upside will create a sell entry point with the target at 1.2266. A more distant target is seen at 1.2172 where it is wiser to lock in profits. In case of growth in GBP/USD and the absence of the bears at 1.2379, the bulls will take the upper hand, which will lead to a breakout through the high of 1.2444. A false breakout of this level will give an entry point into short positions with the aim of moving down. If traders aren't active there either, you could sell GBP/USD at a bounce from a high of 1.2487, keeping in mind a downward intraday correction of 30-35 pips. Signals of indicators: Moving Averages Trading is performed below the 30- and 50-day moving averages, which shows that the bears are trying to build a correction. Note: The author considers the period and prices of moving averages on the one-hour chart which differs from the general definition of the classic daily moving averages on the daily chart. Bollinger Bands In case of growth, the upper limit of the indicator at 1.2410 will act as resistance. In case the pair falls, the lower limit of the indicator located at 1.2330 will act as support. Description of indicators Moving average (a moving average determines the current trend by smoothing volatility and noise). The period is 50. It is marked in yellow on the chart. Moving average (a moving average determines the current trend by smoothing volatility and noise). The period is 30. It is marked in green on the graph. MACD indicator (Moving Average Convergence/Divergence - convergence/divergence of moving averages). A fast EMA period is 12. A slow EMA period is 26. The SMA period is 9. Bollinger Bands. The period is 20. Non-profit speculative traders are individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions are the total number of long positions opened by non-commercial traders. Short non-commercial positions are the total number of short positions opened by non-commercial traders. The total non-commercial net position is a difference in the number of short and long positions opened by non-commercial traders.     Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333691
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

The EUR/USD Pair: The Dollar Must Be Supported By The News

InstaForex Analysis InstaForex Analysis 31.01.2023 09:00
The wave analysis of the euro/dollar pair's 4-hour chart hasn't changed much recently and is still complex. Although its amplitude is more appropriate for the impulse section of the trend, the upward section of the trend has a strong corrective and is too extended. The wave pattern a-b-c-d-e that we were able to obtain features a wave e that is far more complex than the other waves. Since the peak of wave e is substantially higher than the peak of wave C, if the wave analysis is accurate, then this pattern's development may be nearly finished. I'm still expecting the pair to fall because we're expected to develop at least three waves in this scenario. The demand for the euro either increased or stayed consistently high throughout the first few weeks of 2023, and the pair was only able to deviate marginally from previously established levels during this time. Failure to surpass the 1.0953 level, which corresponds to the Fibonacci ratio of 161.8%, will be interpreted as a sign that the market is prepared to lower demand for the pair. Unfortunately, there is still a delay in developing the trend correction section. EUR/USD On Monday, the euro/dollar pair decreased by 20 basis points, and the amplitude was low in the morning. As I previously mentioned, the amplitude has decreased significantly recently. However, in my opinion, this is a typical market response to a background of zero news. In January, the market actively countered its forecasts. We may say that the US inflation report catalyzed a new decline in the US dollar, as the majority then decided to slow the Fed's rate of tightening policies once more. However, several weeks have gone by since then, and even in the context of a corrective slowdown, demand for the US dollar is not increasing. Since corrections are a natural component of any trend segment, I think the market's behavior is extremely peculiar. It must take place nonetheless. However, for this to happen, the dollar must be supported by the news. This is how the activity should go in an ideal situation. Without news, the market can boost demand for US dollars, but with news context, it will be simpler and easier. A recession is likely to occur in 2023 I am thus anticipating speeches from Christine Lagarde this week that is "dovish" and rhetoric from Jerome Powell that is "hawkish." Since analysts and economists now believe that the European economy is weak and that a recession is likely to occur in 2023, which may force the central bank to reduce the interest rate increase step again, it will undoubtedly be simpler to wait for the first one. Given that Christine Lagarde has repeatedly warned that the rate will rise due to high inflation, such a turn of events may come as a surprise to the market. This suggests that we won't likely wait for either the first or second possibility. The chance for the dollar, therefore, rests on Friday's labor market data and the European inflation report, from which you should take the lowest value. Conclusions in general I draw the conclusion that the upward trend section's development is about finished based on the analysis. As a result, given that the MACD is signaling "down," it is now possible to consider sales with targets close to the predicted mark of 1.0350, or 261.8% per Fibonacci. The potential for complicating and extending the upward section of the trend remains quite strong, as does the likelihood of this happening. The market will be ready to finish the wave e when a move to break through the 1.0950 level fails. The wave analysis of the downward trend section notably becomes more intricate and lengthens at the higher wave scale. The a-b-c-d-e pattern is most likely represented by the five upward waves we observed. After the development of this section is complete, work on a downward trend section can start.   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333703
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The Market Does Not Now Show Any Willingness To Decrease Demand For The Pound

InstaForex Analysis InstaForex Analysis 31.01.2023 09:02
The wave analysis for the pound/dollar pair now appears rather complex, doesn't call for any clarifications, but starts to differ significantly from the analysis of the euro/dollar pair. Our five-wave upward trend section has the pattern a-b-c-d-e and is most likely already finished. Although the recent increase in the pair's quotes proved to be too powerful, wave b has developed into a form that is too long and is on the edge of cancellation. I assume that the downward section of the trend has started to form and will take at least a three-wave form. The current upward wave will cease to be regarded as wave b if the increase in quotes even somewhat persists, and the analysis for the entire wave will need to be adjusted. However, if the wave analysis is still accurate, I still anticipate the development of a falling wave, and the pair can decline by 500–600 basis points, up to a level of 1.1508, which corresponds to a 50.0% Fibonacci ratio. The validity of the current wave analysis is maintained because the peak of the proposed wave b does not yet surpass the peak of wave e. The British pound could begin a long decline. The pound/dollar exchange rate has been moving recently with horizontal dynamics. Since quotes remain close to the peaks of waves b and e, there is nothing to be said regarding changes in the exchange rate. Although wave b is about to be canceled, the market is still not in a rush to lower demand for the pair. It would be far more sensible and attractive to first develop three waves downward before beginning to develop a new upward trend section. Although the market does not now show any willingness to decrease demand for the pound or increase demand for the dollar, I do not completely rule out the start of the development of a downward wave c this week. It has no desire to participate in the preparation for the Fed or Bank of England meetings. The British economy has been the topic of much discussion recently, and most analysts concur that 2023 will be a very challenging year for the UK. Higher taxes, weaker-than-inflation wage growth, and excessive inflation that the regulator is unable to control just yet. All of this should have prompted Andrew Bailey or other Bank of England members to make new, aggressive statements, but in practice, things can go the other way. A severe recession might be avoided by the regulator's decision. He can anticipate that as energy prices decline over time, inflation will also gradually decline. The markets are uneasy because no one knows for sure what monetary policy the regulator will follow in the first part of the year. Although I believe that rates will continue to rise, I also believe that the tone will gradually shift in favor of "dovish." The pair needs this precisely to create the required downward wave. Conclusions in general The development of a new downward trend section is predicated on the wave pattern of the pound/dollar pair. Currently, sales with targets at the level of 1.1508, or 50.0% Fibonacci, might be taken into account. You can set a stop-loss order above the peaks of waves e and b. The upward section of the trend is probably over; however, it might yet take a longer form than it does right now. However, you must exercise caution while making sales because the pound tends to rise. The display is comparable to the euro/dollar pair at the higher wave scale, but differences still start to show. Currently, the upward correction portion of the trend is almost finished (or has already been completed). If this assumption is accurate, then we must wait for the development of a downward section to continue for at least three waves with the possibility of a decrease in the area of figure 15.   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333705
China Restricts Gallium and Germanium Exports, Heightening Global Tech War

FX Daily: Bracing for volatility

ING Economics ING Economics 31.01.2023 09:18
There are some important data to watch today: the Employment Cost Index in the US, GDP in the eurozone and CPI in France. We think the dollar can stay broadly supported into tomorrow’s FOMC, but the euro could outperform other G10 currencies on the back of rebounding inflation. In the Czech Republic, we will see the last numbers before Thursday's CNB meeting The dollar may stay broadly supported going into tomorrow's FOMC meeting USD: Some support going into the Fed meeting European data and global risk sentiment drove G10 FX dynamics yesterday. A weak start to the week for risk assets kept the dollar supported, especially during the US session, and signalled some market cautiousness ahead of multiple risk events: the FOMC tomorrow, ECB and Bank of England on Thursday, and US payrolls on Friday. Today, the last few pieces of US data before the Fed decision will be watched quite closely. Particular interest will be on the Employment Cost Index (ECI), which is expected to have eased from 1.2% to 1.1% in the fourth quarter. This is a key input in the Fed’s policy equation, and we could see investors shift between pro-hawkish/dovish positions ahead of the FOMC if the ECI surprises on either side. Our view for tomorrow is that the Fed still has an interest in hanging on to a hawkish rhetoric and pushing back against speculation of an early peak and – above all – rate hikes in 2023. The net result for the dollar may be positive. The US calendar also includes the Conference Board Consumer Confidence index – which may have rebounded in January – and the Dallas Fed Services index. We think the dollar can hold on to yesterday’s gains going into the FOMC meeting, and high-beta currencies could remain key underperformers in a risk-off environment. Volatility looks likely to pick up quite markedly during the remainder of the week. Francesco Pesole EUR: Inflation headaches before ECB meeting European rates markets had to deal with a surprising acceleration in Spanish inflation yesterday, which reinforced expectations of multiple 50bp hikes by the ECB. At the same time, the growth picture seems to have deteriorated, as Germany recorded negative growth in the fourth quarter. Eurozone-wide GDP figures will be released today, and are expected to show a 0.1% quarter-on-quarter contraction. However, it seems more likely that CPI figures out of France this morning will have a bigger impact on the euro. After all, a rebound in inflation is a more concerning development for the ECB than soft growth data which were heavily impacted by energy prices. In the section above, we discussed how the dollar may stay broadly supported going into the FOMC meeting. The euro, however, may show more resilience than other G10 peers (especially high-beta currencies) given the shift in the inflation narrative in the eurozone which can surely fuel ECB hawkish speculation. EUR/USD may hover around the 1.0850 handle until tomorrow’s FOMC.  Yesterday, we published our scenario analysis for this week’s ECB meeting: the recent hiccups in communication have heightened the risk that markets have lost some trust in President Christine Lagarde’s guidance. Investors may keep tracking data (EZ-wide CPI data are released tomorrow) more closely than they track Lagarde’s remarks, and the ECB meeting may not have a big impact on the euro after all. Our commodities team just revised their gas price forecasts, now expecting TTF to stay below 80 EUR/MWh throughout 2023. This is a bullish scenario for eurozone sentiment and the euro in the medium term. Francesco Pesole GBP: Standing by before 'super Thursday' There are no key data releases in the UK before Thursday’s Bank of England meeting. Markets are currently pricing in 46bp (our call is for 50bp) at this meeting and an additional 25bp in March. We expect a broadly neutral impact on the pound, and GBP/USD moves may be mostly dictated by the FOMC reaction. EUR/GBP may hold below 0.8800 until “super Thursday” (ECB and BoE meetings), although inflation figures in the eurozone mean the balance of risk is tilted to the upside for the pair. Francesco Pesole CEE: Czech economy pulled down again by automotive Today in the region we will see the first estimate of GDP for the fourth quarter of last year in the Czech Republic. We expect a 0.8% QoQ decline, below market expectations. This would confirm a shallow recession in the Czech economy. Looking ahead, the outlook for the first quarter of this year also does not look good despite better numbers across the region and from the eurozone. Yesterday, the Czech Republic's largest carmaker announced production cutbacks at some of its factories due to chip shortages. The news comes just a week after the country's third-largest manufacturer made the same announcement. This marks the beginning of difficult times for the industry, which is mainly driven by the automotive sector. The situation is dangerously reminiscent of the end of 2021 when chip shortages and automotive production curbs dragged the industry into its biggest slump since the Covid-19 lockdowns. This may also be a piece of the puzzle for the Czech National Bank (CNB) meeting this week, however we will have to wait a few months for proof in hard data. For the koruna, a weaker economic number could be a trigger to correct recent gains and return to 24.00 EUR/CZK. We also see interesting developments in Hungary following the downgrade of the country's sovereign rating. The weakening of the forint that we mentioned yesterday did not materialise and, on the contrary, the currency ended roughly unchanged at the end of the day. It confirmed that the strengthening of the forint is not short-lived and its strengths are of a more permanent nature. In the long term, we expect further strengthening. For now, we see yesterday's market reaction as a possible clearing of long positions while attracting new buyers and consolidating around 390 EUR/HUF. Frantisek Taborsky Read this article on THINK TagsFX Dollar Czech National Bank Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EUR/USD Movement Analysis: False Breakthrough and Volatility Ahead of Powell's Speech

Growing Fears Of Tech War, The USD Was Broadly Higher Against The Entire G10 Pack

Saxo Bank Saxo Bank 31.01.2023 09:29
Summary:  U.S. equities retreated on profit-taking in a risk-off session ahead of central bank policy rate decisions and a heavy corporate earnings calendar. Ford Motor slashed prices of its EV model in response to the price cut from Tesla recently triggered fear of a price war. Chinese technology and internet stocks as well as U.S. semiconductor names dropped on worries of an escalation of the US-China tech war.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) declined in a risk-off session Markets see red on concern FAANG’s will bite into markets, while caution is around that markets mispriced the Fed will cut rates later this year, plus end-of-month rebalancing hits. The risk is the Fed says it has “more work to do”, which could send equities into a tailspin. Ahead of the Fed, ECB, and BOE meeting this week, for the first time in 2023, with the central banks potentially setting the course of interest rates for the year, risk management resulted in traders and investors booking profits, which dragged the S&P500 down 1.3% and the Nasdaq 100 2.1%.  Tesla (TSLA:xnas) dropped 6.3% after Ford Motor (F:xnys) cut prices of its electric vehicles in response to Tesla’s recent price cuts. Nvdia (NVDA:xnas) plunged 5.9% alongside with other chip makers on the risk of an escalation of the U.S.’ ban on exporting chips to China. We think there the short-term correction may last for a while though we are bullish equities in Q1 overall, so potentially consider taking profits and buying downside optionality (puts), and consider tight stops. Secondly, the worry is that major tech company earnings will continue to slump. This is probably why profit-taking in Meta, Apple, Amazon and Google parent Alphabet is occurring ahead of reporting results. Ultimately, we think their outlooks could set the tone for equities this year. Click here for more on US earnings. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) higher on Spanish inflation upside surprise U.S. Treasuries sold off in price with yields 3bps to 5bps higher across the curve following the rise in European bond yields triggered by an increase in Spain’s EU harmonized CPI to 5.8%, a full percentage point above market expectations. The Treasury Department announced a Q1 borrowing plan of USD 932 billion, larger than its previous estimate of USD 576 billion released in last October. The yield on the 2-year rose 4bps to 4.23% and that on the 10-year climbed 3bps to 3.54%. Hang Seng Index retreated; CSI300 pared opening gains Falling 2.7% on Monday, the Hang Seng Index gave back almost all its gain from last week. The Politico story on the Biden administration’s plan to ban U.S. investments from investing in certain high-tech areas in China, such as AI, quantum, cyber, 5G, and advanced semiconductors triggered profit-taking in mega-cap China internet stocks. Alibaba (09988:xhkg), tumbling 7.1% and Tencent (00700:xhkg) sliding 6.7% were among the biggest losers within the Hang Seng Index. Hang Seng TECH Index plunged 4.8%. The Bloomberg story that reported the Netherlands and Japan had agreed to join the U.S. to restrict exports of advanced chip-making machinery to China added to the woes, in particular shares of Semiconductor Manufacturing International Corp (SMIC, 00981:xhkg), down 5%, and Hua Hong Semiconductor (01347:xhkg) falling 5.1%. Home sales in the 40 major cities during the Lunar New Year holiday shrank 14% from last year. Leading Chinese developer Country Garden (02007:xhkg) plunging 8.3% was the top loser within the Hang Seng Index, followed by Alibaba (09988:xhkg) which tumbled 7.1. Macao casino stocks slid on disappointing traffic that reached just 38% of the pre-pandemic level. CSI300 gapped higher by over 2% at the open when the Chinese market returned from a week-long holiday but pared most of it to finish the first post-holiday trading day only 0.5%. Auto, defense, electric equipment, and electronics were among the outperformers in A shares. Australian shares hold steady, defying negative leads from Wall Street. Australian retail sales fall off a cliff, borrowing falls Australia’s share market, as measured by the ASX200(ASXSP200.I) opened 0.3% higher today at 7,501 defying the futures and US markets negative lead. Not only are Australia shares outperforming US shares this year, but also UK’s FTSE . However, given materials prices could be at risk of a shorter term pull-back as mentioned above, it’s worth pointing out the technical indicators suggest the ASX200’s uptrend is weakening. Our Technical Analyst suggests a possible short term correction down to 7,167 should be ruled out. However, over the longer term, we think upside in the ASX200 is intact with mining companies to report some of the strongest earnings on record, and guide for their strongest outlooks in several years amid China reopening. For stocks, ETFs and baskets to watch, click here.  In company news today, Gold Road Resources (GOR) reported a drop in production in the prior quarter and higher costs due to inflationary pressure, but guided for higher grades in 2023. This follows Oz Minerals (OZL) also guiding for higher costs, which paints a picture of what we can expect for full year earnings season next month. In economic news, retail sales fell 3.9% in December, shocking the market, which expected sales to only decline 0.3%. On top of that, borrowing data also missed expectations. Borrowing rose 0.3% in December, vs Bloomberg’s consensus expecting lending to rise 0.5%. Today’s data is telling as it shows interest rates have taken effect on the consumer, and supports the market thinking that the RBA could potentially pause and then cut rates later this year.  FX: Dollar recovers as risk sentiment deteriorates ahead of Fed The USD was broadly higher against the entire G10 pack on Monday as risk sentiment was hurt by higher-than-expected Spanish inflation fuelling concerns on global inflation remaining higher-for-longer. Lower commodity prices also fuelled some profit taking in AUDUSD which is now testing the support at 0.7050. NZDUSD was also marginally lower but AUDNZD remained above 1.09. EURUSD made another attempt at breaking above 1.09 as ECB rate hike bets picked up, but retreated back to 1.0840 at the US close. GBPUSD also slid to 1.2350. Higher yields saw USDJPY back above 130.50. In FX the US dollar picks up, pushing most currencies off course. The US dollar index has bounced up off it lower and risen 0.5% and pressured most currencies lower, with the Aussie dollar (AUDUSD) falling 0.8% from its high, with the Aussie buying 0.7061 US. The Aussie against the US has fallen under its 200-day moving average after commodity prices rolled over, while there is caution the Fed’s Wednesday’s decision could cause the US dollar to rise. Should we see the Fed only hike by 0.25% as excepted and guide for only one more hike, or if the Fed mentions it’s hikes have been effective, or that its sees interest rates having a lag effect, then the AUDUSD could potentially rally back up. Supporting longer term upside in the AUD is the rise of China’s economy and commodity buying picking up. From a technical perspective, the bull may like to hear the 50 day moving crossed above the 200, indicating the longer term rally could remain intact, despite the RSI indicating, there are currently more sellers right now, than buyers.  Commodity short term pull back risk – with prices already down from fresh peaks; oil down 5.6%, iron ore, copper and aluminium lose 2% ahead of the Fed On Monday oil dropped 2.4%, while most commodities lost almost 1%, with the markets awaiting further evidence China is picking up demand - just as BHP, Rio and FMG alluded to. It seems traders are torn between real demand physical materially rising, but awaiting the Fed’s decision this week, which could result in the US dollar spiking, that would ultimately pressure commodity prices down further. So these factors raise the risk of a short-term correction across the board. That said, resources prices have been really strong up 17-70% from their lows. In 2023 alone iron ore and copper are up 9%, Aluminium up 11%, spot gold up 5%. However, with the commodity prices falling - it also raises the alarm that Aussie dollar and the Aussie share market could be at risk of a short term correction or consolidation as well. The key is to watch the US dollar index. Also keep in mind, over the longer term, commodity prices appear underpinned by rising demand amid lower physical supply. For more on commodities, see Saxo’s Commitments of Traders report, that highlights broad buying slowed in recent weeks. Crude oil (CLG3 & LCOH3) prices slumped as dollar gathered steam Oil prices dropped to three-week lows as the new week kicked off, with another interest rate hike on the table by the Fed this week boosting the US dollar. Higher-than-expected Spanish inflation also served as a reminder that rate hikes can continue.. Meanwhile, China returned from a week-long Lunar New Year holiday and all the gains that were built up in anticipation are now being put to test. The market is also cautious ahead of this week’s OPEC+ meeting. President Putin and Prince Mohammed bin Salman discussed cooperation within the group to maintain the stability of the global market. Russia also formalised its ban on sales to nations adhering to the G7 price cap on its fuel. WTI futures fell below $78/barrel while Brent was down to $85.  Read next: Major Currency Pairs Are Waiting For Central Banks Decisions, USD/JPY Pair Rose Above 130.00, | FXMAG.COM What to consider? Spanish inflation fuels concerns on EU inflation surge Spain’s HICP rose 5.8% YoY for January from 5.5% YoY in December, and came in a whole 100bps above expectations of a softer print at 4.8% YoY. This casted concerns on the pace of slowdown in the Eurozone inflation, and marginally increased ECB rate hike bets as well through the middle of the year. There was a resulting sell-off in bonds and European equity futures in the morning hours, and the risk appetite remained weak in the rest of the session as big earnings data and events in the week were eyed. Meanwhile, German GDP contracted for the first time on a QoQ basis since December 2021, down 2% vs expectations of remaining unchanged. The Adani saga poses some key questions on India for foreign investors India’s corporate governance has come back in focus with the Adani rout, alarming foreign investors who had been looking at India as a potential long-term opportunity especially with a shift away from China. While the extent of collateral damage can be contained and Modi’s popularity will be protected by a lack of coherent opposition, the key concern is how deeply the investor confidence gets dented and whether markets start to question India’s premium valuation. Read our Market Strategist Charu Chanana’s full report here. Expecting pickups in China’s PMIs China returns from a week-long Lunar New Year holiday, during which, sales in consumption-related industries grew by 12.2% from the same lunar calendar period last year. Estimates of passenger traffic from various sources all pointed to a strong recovery of activities. The official NBS Manufacturing PMI and Non-manufacturing PMI, scheduled to release this morning, are expected to bounce back strongly to the expansionary territory. The median forecasts from Bloomberg’s survey of economists call for the Manufacturing PMI to rise to 50.1 in January from 47.0 in December and the Non-manufacturing PMI to bounce sharply to 52.0 in January from 41.6 in December. Japan Productivity Center panel hints at policy tweak Several comments from a panel at Japan Productivity Center hinted at making the inflation target of 2% a long-term goal, suggesting that flexibility around inflation targeting may be considered by the new Chief. USDJPY slid below 130 on the report, before recovering later in the session. The panel also suggested that BOJ and the Japanese government should make a new joint statement so as to make responsibilities of the government clearer. FinMin Suzuki responded to the panel this morning saying that it is too early for a joint statement to consider revising the inflation goal. But speculation of a policy tweak will likely continue as the bOJ leadership changes get closer.   For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Market Insights Today: – Profit-taking in a risk-off session, higher inflation in Spain, central bank decisions and corporate earnings ahead, US-China tech war - 31 January 2023 | Saxo Group (home.saxo)
Australian dollar against US dollar - "It seems that the currency will soon hit a price above 0.68"

Commodities See Short Term Pull Back Risks, The Aussie Dollar Down 0.8%

Saxo Bank Saxo Bank 31.01.2023 09:37
Summary:  Markets see red on concern FAANG’s will bite into markets, while there is worry the Fed won’t cut rates this year like the market expects, this has resulted in traders booking profits ahead of end of month. Commodities see short term pull back risks, with prices already down from fresh peaks; oil is down 5.6%, iron ore, copper and aluminium lose 2% ahead of the Fed meeting. While Australian shares hold steady, defying negative leads from Wall Street. In FX the US dollar picks up, pushing most currencies off course, with the Aussie dollar down 0.8%. What's the short vs long term narrative. Markets see red on concern FAANG’s will bite into markets, while there is worry the Fed won’t cut rates this year as markets has priced in Ahead of the Fed, ECB, and BOE meeting this week, for the first time in 2023, with the central banks potentially setting the course of interest rates for the year, risk management resulted in traders and investors booking profits ahead of end of month, which dragged the S&P500(US500.I) down 1.3% and the Nasdaq 100 (NAS100.I) 2.1%. The worry is that the market believes the Fed will only hike by 0.25% this week and 0.25% next month. Two and done, before cutting in July. There is also a risk the Fed says it has “more work to do”, which could send equities into a tailspin. Our view is given financial conditions have improved, and there is a 20% chance of a recession, the Fed can keep rates higher for longer. This is why we think there could be a short term potential correction, so potentially consider taking profits and buying downside optionality (puts), and consider tight stops. Secondly, the worry is that major tech company earnings will continue to slump, with average overall  earnings down 0.3% this quarter, across the 145 of the S&P500 companies. This is why profit taking in Facebook, Apple, Amazon and Google parent Alphabet is occurring ahead of them reporting results. Ultimately, we think their outlooks could set the tone for equities this year. Consider FAANG names like Facebook/Meta are up 61%, Apple is up 10%, Amazon is up 20% and Google’s parent Alphabet is up 12% from recent lows. Click here for more on US earnings. Read next: Major Currency Pairs Are Waiting For Central Banks Decisions, USD/JPY Pair Rose Above 130.00, | FXMAG.COM Commodity short term pull back risk – with prices already down from fresh peaks; oil down 5.6%, iron ore, copper and aluminium lose 2% ahead of the Fed   On Monday oil dropped 2.4%, while most commodities lost almost 1%, with the markets awaiting further evidence China is picking up demand - just as BHP, Rio and FMG alluded to in their quarterly results. It seems traders are torn between real demand physically rising, but awaiting the Fed’s decision this week, which could result in the US dollar spiking, that would ultimately pressure commodity prices down. So these factors raise the risk of a short-term correction across the board. That said, resources prices have been really strong up 17-70% on from their lows. In 2023 alone iron ore and copper are up 9%, Aluminium up 11%, spot gold up 5%. However, with commodity prices falling, it also raises the alarm that Aussie dollar and the Aussie share market could be at risk of a short term correction or consolidation as well. The key is to watch the US dollar index. However keep in mind, over the longer term, commodity prices are supported higher, underpinned by rising demand over course of the year, and lower physical supply. For more on commodities, see Saxo’s Commitments of Traders report, that highlights broad buying slowed in recent weeks. Australian shares hold steady, defying negative leads from Wall Street. Australian retail sales fall off a cliff, borrowing falls Australia’s share market, as measured by the ASX200(ASXSP200.I) opened 0.3% higher today at 7,501 defying the futures and US markets negative lead. Not only are Australia shares outperforming US shares this year, but also UK’s FTSE. However, given materials prices could be at risk of a shorter term pull-back, it’s worth pointing out the technical indicators suggest the ASX200’s uptrend is weakening. Our Technical Analyst suggests a possible short term correction down to 7,167 should not be ruled out. However, over the longer term, we think upside in the ASX200 is intact with mining companies to report some of the strongest earnings on record, and provide their strongest outlooks in several years amid China reopening. For stocks, ETFs and baskets to watch, click here.  In company news today, Gold Road Resources (GOR) reported a drop in production in the prior quarter and higher costs due to inflationary pressure, but guided for higher grades in 2023. This follows Oz Minerals (OZL) also guiding for higher costs, which paints a picture of what we can expect for full year earnings season next month. In economic news, retail sales fell 3.9% in December, shocking the market, which expected sales to only decline 0.3%. On top of that, borrowing data also missed expectations. Borrowing rose 0.3% in December, vs consensus expecting lending to rise 0.5%. Today’s data is telling as it shows interest rates have taken effect on the consumer, and supports the market thinking that the RBA could potentially pause and then cut rates later this year.   In FX the US dollar picks up, pushing most currencies off course The US dollar index has bounced up off it low and risen 0.5% and pressured most currencies lower, with the Aussie dollar (AUDUSD) falling 0.8% from its high, with the Aussie buying 0.7061 US. The Aussie against the US has fallen under its 200-day moving average, while there is caution the Fed’s Wednesday’s decision could cause the US dollar to rise. Should the Fed only hike by 0.25% as expected and guide for one more hike, or if the Fed mentions its hikes have been effective, or that it sees interest rates having a lag effect, then the AUDUSD could potentially rally back up. Supporting longer term upside in the Aussie is the rise of China’s economy and commodity buying. From a technical perspective, the bulls may like to hear the 50 day moving crossed above the 200, indicating the longer term rally could remain intact, despite the RSI indicating, there are currently more sellers right now, than buyers.  Stay tuned to Saxo's inspiration page for trading and investing ideas. For a global look at markets – tune into our Podcast.   Source: Video: Will FAANGs results bite into markets and what if the Fed says it won’t cut rates this year, like the market thinks | Saxo Group (home.saxo)
The Commodities Feed: Specs continue to cut oil longs

Brent Crude Oil Is Testing Support, Stocks In The Hong Kong And Mainland Bourses Extended The Decline

Saxo Bank Saxo Bank 31.01.2023 09:46
Summary:  Markets suffered a jarring reversal in sentiment yesterday, as US stocks posted their worst session in weeks, with the Nasdaq 100 suddenly back below its 200-day moving average ahead of tomorrow’s FOMC meeting. It’s a busy three-day sprint to the end of this week, with a monthly calendar roll into tomorrow after a blistering performance for equities until yesterday, and a heavy US economic calendar and BoE and ECB meetings up Thursday.   What is our trading focus? Equities: Reversal of fortune Ugly session yesterday in equities with S&P 500 futures erasing the gains from the previous two sessions without any big change in interest rates or new macro releases. It was most likely a reversal of positions and the market repositioning itself ahead of crucial earnings and the FOMC rate decision on Thursday. The picture of equities almost priced for perfection remains the same with the downside risks being larger than the upside risks as leading indicators are suggesting a high probability of recession and earnings indicating significant margin compression. Today’s sentiment will be formed by earnings from UPS, Caterpillar, and Snap as the aggregate information from these earnings will provide a broad-based view of economic activity across many different sectors of the economy. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) extended decline Stocks in the Hong Kong and mainland bourses extended the decline from their recent highs on a risk-off day. After the strong gains in January on the positive development in the potential peaking of the exit wave of inflection in China, traders booked their profits ahead of the U.S. Fed’s rate decision as well as fear about the risk of escalation of tension between the U.S. and China on the technology front.  A recent Politico story on the Biden administration’s plan to ban U.S. investments from investing in certain high-tech areas in China, such as AI, quantum, cyber, 5G, and advanced semiconductors triggered profit-taking in mega-cap China internet stocks heightens such concerns. The Hang Seng Index fell by 1.6% and CSI 300 Index declined by 1% as of writing. FX: Dollar recovers as risk sentiment deteriorates ahead of Fed The USD was broadly higher against the entire G10 pack on Monday as risk sentiment was hurt by higher-than-expected Spanish inflation fuelling concerns on global inflation remaining higher-for-longer. Mid-2024 Fed rate expectations are up some 37 basis points from less than two weeks ago, for example. Lower commodity prices and weak AU Retail Sales also fuelled some profit taking in AUDUSD which is now testing the support at 0.7050. EURUSD made another attempt at breaking above 1.0900 yesterday as ECB rate hike bets picked up further after the hot Spanish CPI release, but retreated below 1.0850. GBPUSD also slid to 1.2350 as the UK is the only G7 economy the IMF forecasts will suffer a recession this year. Higher yields saw USDJPY back above 130.50 at one point overnight. Crude oil (CLH3 & LCOH3) slumps as speculators cut positions Crude oil prices tumbled further on Monday with Chinese demand, tomorrow’s Fed meeting and the stronger dollar in focus.  On balance the outlook for crude oil demand looks supportive as China recover while the supply outlook remains uncertain with the upcoming threat to supply from the next round of sanctions against Russian sales of fuel products. However, having failed to break resistance in the $89 to $90 area in Brent last week, speculators have started to sell some of the 127 million barrels they bought during a two-week period to January 24. The trigger has been the stronger dollar ahead of Wednesday’s FOMC meeting. An OPEC+ monitoring meeting on Wednesday as well is expected to recommend no change in production. Brent is testing support at $83.90, the 21-day moving average, with a break signalling further loss of momentum and long liquidation. Gold (XAUUSD) strength being tested Gold trades lower for a fourth day as the dollar strengthens ahead Wednesday’s FOMC meeting which is expected to deliver a 25-basis point hike accompanied by hawkish comments in order to send home a message that cuts are not on the table anytime soon. In addition, US bond yields rose across the curve after Spanish inflation rose 5.8% instead of an expected drop to 5%, highlighting difficulties in getting the inflation genie back in bottle. Gold has rallied by more than 300 dollars since early November, thereby attracting fresh demand from traders, not least from hedge funds who held 107k lots (10.7m oz), a nine-month high, in the week to January 24. Key support remains at $1900 where the trendline from the November low and the 21-day moving average meet. Below, the market may focus on the 38.2% retracement level at $1822.  Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) yielding few clues amidst tight ranges U.S. yields are coiling within tight ranges, wary of a Fed that may express disapproval at tomorrow’s FOMC meeting of the drastically easing financial conditions over especially the last several weeks, now the easiest according to the Chicago Fed’s measure since March of last year. The FOMC meeting tomorrow and US macro data through Friday’s Jan. ISM Service survey and Jan. Job data will likely have a bearing on yields at the front and longer end of the curve. For the 10-year yield, the 200-day moving average is creeping into the picture from below, now coinciding almost exactly with the cycle low of 3.32% from mid-Jan. Read next: Glovo Is Planning To Layoff 250 Workers Worldwide, The Middle East Is Already Suffering From A Water Shortage| FXMAG.COM What is going on? China’s PMI data bounced back to the expansionary territory China’s manufacturing PMI bounced back to 50.1 in January from 47.0 in December as economic activities have picked up as expected. Non-manufacturing PMI rose more strongly than expected to 54.4 in January from 41.6 in December. The services sub-index jumped to 54.0 driven by the release of strong pent-up demand for in-person services, particularly dining, tourism, and entertainment. The construction sub-index improved to 56.4 from 54.4. The headline new orders index surged to 52.2 from 39.1, while the business activities expectation index rose to 64.9, a decade high IMF expects China to grow at 5.2% in 2023 and 4.5% in 2024 In its World Economic Outlook Update released today, the IMF expects China’s real GDP growth to be at 5.2% in 2023 and then to fall to 4.5% in 2024. The medium-term growth rate in China is expected to settle at below 4% due to “declining business dynamism and slow progress on structural reform”. Spanish CPI for January prints far higher than expected It is perhaps too early for the European Central Bank (ECB) to pause. In January, Spain’s Consumer Price Index (CPI) rose 5.8 % year-on-year. This is higher than in December (5.7%). This is also the first increase since July – something which might worry the ECB a bit. Core inflation (which strips out volatile elements) is not improving as hopes either. It was out at 7.5 % year-on-year in January versus the prior 7.0 % in December. Remember that history is littered with central banks who declared victory over inflation too soon. The ECB does not want to make a similar mistake. Samsung and NXP Semiconductors earnings recap NXP Semiconductors reported earnings last night after the US market close with Q4 revenue and earnings in line with estimates while Q1 revenue outlook of $2.9-3.1bn misses estimates of $3.2bn pushing down the shares down by 3% in the extended trading. Samsung Q4 earnings release show significant margin pressure with Q4 operating profit at KRW 4.3trn vs est. KRW 5.8trn due to pricing pressures across some businesses including the memory chip business. Samsung expects demand for chips to fall in the first half of the year in its foundry business, but then sees a recovery in the second half. Mixed messages for Australian dollar: Coal cargoes head to China, but retail sales slump and borrowing disappoints With commodity prices falling across the board from their highs, and the DXY rising, the Australian dollar continued its 3-day pullback, falling below the 200-day moving average. Adding to the negative short-term picture, weaker than expected Australian retail trade for December (with sales down 3.9% MoM), along with weaker than expected borrowing added to the woes. The weak data is pushing RBA expectations for another rate hike next week lower. More Aussie supportive was the news of two cargos of Australian metallurgical coal making their way to China’s steel production centre, officially ending China’s two-year Australian coal ban. BHP struck the deal with China Baowu Steel earlier this month. The other major miners see China picking up iron ore demand through 2023. What are we watching next? Market conditions finally blink ahead of tomorrow’s FOMC meeting The FOMC meeting tomorrow was meant to confirm the Fed’s further downshift in the pace of its rate hikes with a 25-basis point rate hike and offer few surprises. The anticipation of the Fed reaching peak rates after a presumed additional 25 basis point hike at the March or May FOMC meeting has seen the an at times aggressive back-up in risk sentiment, with a powerful easing of financial conditions The Fed continues to object to the market’s expectation of an eventual rate cutting campaign set to begin by later this year, and it may attempt to surprise somehow on the hawkish side after especially the latter part of the “higher for longer” message from the Fed has been ignored. What does that look like? Difficult to say: a 50 basis point move would be bold but would come as a profound shock to markets. Perhaps the most hawkish message the Fed can deliver on rates would be a refusal to guide for an end of the rate-hike cycle just yet, somehow noting that financial conditions are too easy for it to consider that its policy is sufficiently tight. Yesterday’s chunky back-down in sentiment, the monthly calendar roll and a busy economic US data calendar are other important factors in the mix through this Friday. The Adani saga poses some key questions on India for foreign investors India’s corporate governance has come back in focus with the Adani rout, alarming foreign investors who had been looking at India as a potential long-term opportunity especially with a shift away from China. While the extent of collateral damage can be contained and Modi’s popularity will be protected by a lack of coherent opposition, the key concern is how deeply the investor confidence gets dented and whether markets start to question India’s premium valuation. Read our Market Strategist Charu Chanana’s full report here. Earnings to watch Key earnings day coming up today with our focus on earnings from UPS, Caterpillar, and Snap as these companies typically move markets due to their cyclicality; read our earnings preview from yesterday here. Other key earnings to watch today are from ExxonMobil, McDonald’s and Marathon Petroleum which will provide insights into the global energy sector and especially the market for refined products and availability. We are especially curious about whether energy companies are accelerating their capital expenditures. Today: Canadian Pacific Railway, Daiichi Sankyo, Fujitsu, UBS Group, ExxonMobil, Pfizer, McDonald’s, UPS, Caterpillar, Amgen, AMD, Mondelez, Marathon Petroleum, Electronic Arts, Spotify, Snap Wednesday: Novo Nordisk, Orsted, Keyence, Hitachi, GSK, BBVA, Novartis, Meta, Thermo Fisher Scientific, Southern Copper Thursday: DSV, Dassault Systemes, Siemens Healthineers, Infineon Technologies, Deutsche Bank, Sony, Takeda Pharmaceutical, Shell, ING Groep, Banco Santander, Siemens Gamesa Renewable Energy, Nordea, Roche, ABB, Apple, Alphabet, Amazon, Eli Lilly, ConocoPhillips, Qualcomm, Honeywell, Starbucks, Gilead Sciences, JD.com, Ford Motor, Ferrari Friday: Coloplast, Sanofi, Intesa Sanpaolo, Denso, CaixaBank, Naturgy Energy, Assa Abloy, Regeneron Pharmaceuticals Economic calendar highlights for today (times GMT) 0855 – Germany Jan. Unemployment Change / Rate 0930 – UK Dec. Consumer Credit / Mortgage Approvals 1000 – Eurozone Q4 GDP estimate 1330 – Canada Nov. GDP 1400 – US Nov. S&P CoreLogic Home Price Index 1445 – US Jan. Chicago PMI 1500 – US Jan. Consumer Confidence 2130 – API's Weekly Crude and Fuel Stock Report 2145 – New Zealand Q4 Employment and Earnings data 0145 – China Jan. Caixin Manufacturing PMI   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – January 31, 2023 | Saxo Group (home.saxo)
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The Outlook Of The NZD/USD Pair By UOB Group

TeleTrade Comments TeleTrade Comments 31.01.2023 10:00
According to Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group, NZD/USD could navigate within 0.6400 and 0.6535 in the next few weeks. Key Quotes 24-hour view: “We held the view that NZD ‘is likely to trade sideways within a range of 0.6465/0.6510’ yesterday. Our view of sideways trading was not wrong even though NZD traded within a slightly narrower range than expected (0.6465/0.6507). The underlying tone has softened and NZD is likely to edge lower toward 0.6440. The major support at 0.6400 is unlikely to come into view. Resistance is at 0.6490, followed by 0.6505.” Read next: Glovo Is Planning To Layoff 250 Workers Worldwide, The Middle East Is Already Suffering From A Water Shortage| FXMAG.COM Next 1-3 weeks: “Our update from last Thursday (26 Jan, spot at 0.6492) is still valid. As highlighted, NZD is likely to trade between 0.6400 and 0.6535 for the time being.”
The RBA Is Expected To Raise Rates By 25bp Next Week

The Australian Dollar Is Weighed Down By The Disappointing Domestic Macro Data

TeleTrade Comments TeleTrade Comments 31.01.2023 10:04
AUD/USD drops to a one-week low on Tuesday and is pressured by a combination of factors. Disappointing Australian Retail Sales figures weigh on the Aussie amid a modest USD strength. Bets for smaller Fed rate hikes keep a lid on the buck and might help limit losses for the major. The AUD/USD pair remains under some selling pressure for the second straight day on Tuesday and extends its recent pullback from the highest level since June 2022 touched last week. The downward trajectory drags spot prices to a one-week low, below mid-0.7000s during the early European session and is sponsored by a combination of factors. The Australian Dollar is weighed down by the disappointing domestic macro data, which showed that Retail Sales tumbled in December. Apart from this, a modest US dollar strength turns out to be another factor exerting some downward pressure on the AUD/USD pair. The prevalent cautious mood is seen driving some haven flows towards the greenback and undermining the risk-sensitive Aussie. The market sentiment remains fragile in the wake of the uncertainty about a strong recovery in the Chinese economy, amid the worst yet COVID-19 outbreak in the country. This, to a larger extent, offsets the better-than-expected Chinese PMI prints for January and does little to impress traders or provide any immediate respite to the China-proxy Australian Dollar, at least for the time being. Read next: Toyota's Transition To Electric Will Come With A Change In CEO| FXMAG.COM The USD uptick, meanwhile, lacks bullish conviction amid rising bets for a smaller 25 bps Fed rate hike move at the end of a two-day policy meeting on Wednesday. This, along with the flight to safety, leads to a modest downtick in the US Treasury bond yields and acts as a headwind for the buck. This, in turn, warrants some caution before positioning for any further downfall for the AUD/USD pair. Traders might also prefer to move to the sidelines ahead of the critical FOMC monetary policy decision on Wednesday. In the meantime, Tuesday's US economic docket, featuring Chicago PMI and the Conference Board's Consumer Confidence Index, will be looked upon for some impetus. This, along with the broader risk sentiment, could drive the USD and produce short-term opportunities around the AUD/USD pair.
The USD/JPY Price Seems To Be Optimistic

Analysis Of The USD/JPY Pair Situation

TeleTrade Comments TeleTrade Comments 31.01.2023 10:05
USD/JPY picks up bids to pare intraday losses, up for the third week in a row. Yields remain pressured, stock futures grind higher amid growth optimism, Covid-linked news. BoJ Chief Contestant warn of government meddling to defend JPY. Second-tier US data may entertain traders but FOMC is the key. USD/JPY trims daily loss around 130.30 during early Tuesday morning in Europe as mixed sentiment in the market joins a pause in the US Treasury bond yields. Adding to the Yen pair traders’ confusion are the fresh fears of government meddling to defend the Japanese currency. While firmer Japan data recently fuelled fears of the Bank of Japan’s (BOJ) exit from ultra-easy monetary policy, backed by a suggestion from the key policymakers, fears of government’s defense of Japanese Yen (JPY) probe the pair traders. “Hirohide Yamaguchi, among the top candidates to become the next Bank of Japan (BOJ) governor, warned about the danger of signing a joint policy document with the government when he was deputy governor in 2012, minutes of that meeting showed on Tuesday,” per Reuters. Elsewhere, the International Monetary Fund (IMF) recently raised its global growth estimates while also saying that the emerging markets' growth slowdown bottomed out in 2022. The global lender also stated that estimates come with the backdrop of a slight increase in the 2023 global growth outlook helped by "surprisingly resilient" demand in the United States and Europe, an easing of energy costs and the reopening of China's economy after Beijing abandoned its strict COVID-19 restrictions. It’s worth mentioning that the IMF’s fears over inflation seem to tame the optimism afterward. On the same line, receding fears of the COVID-19, after the US White House statement suggesting removal of virus-led activity restrictions, also propel the risk barometer USD/JPY pair. However, stronger Japan data underpin the hawkish bias from the BoJ and weigh on the quote. Against this backdrop, the US 10-year Treasury yields struggle to extend a three-day uptrend near 3.54% while the US Dollar Index (DXY) retreats to 102.20 at the latest. Further, the S&P 500 Futures remain mildly offered and so do stocks in the Asia-Pacific region. Looking forward, the US fourth-quarter (Q4) Employment Cost Index (ECI) and the Conference Board’s Consumer Confidence gauge for January will be eyed for immediate directions. As per the market consensus, the US Consumer sentiment gauge may improve but a likely softer print of the US ECI, to 1.1% from 1.2%, could strengthen the dovish bias surrounding Fed and can recall the USD/JPY bears. Technical analysis A daily closing beyond the 21-DMA hurdle, currently around 130.40, becomes necessary to keep USD/JPY buyers on the table.
EXMO.COM analyst: Currently, Tesla is still trying to conquer the market by prioritising revenue over profit

Tesla Triggers EV Price War, The IMF Raised Its Growth Forecast

Swissquote Bank Swissquote Bank 31.01.2023 10:21
Stock investors kicked off the week on a cautious note, as the Federal Reserve (Fed) is expected to kill joy when it announced its latest decision tomorrow, and earnings announcements may not save the day. S&P500 The S&P500 gave back 1.30% on Monday. US crude fell 2% yesterday and slipped below the 50-DMA this morning. Interestingly, however, the latest news on the macro front is not bad. The Chinese reopening is now well reflected through the first set of economic data. Released today, both the manufacturing and services PMI jumped into the expansion zone. IMF And the cherry on top, the IMF raised its growth forecast for this year by 0.2% to 2.9% citing the resilience of US spending and the Chinese reopening. This is the kind of news that the energy markets normally cheer. But not this time, apparently. Forex In the FX, the US dollar is gaining some positive momentum into the Fed meeting, as investors know that the Fed won’t declare victory over inflation despite the falling inflation, and position accordingly. Fed The Fed will certainly hike by 25bp, but there is little chance it will announce the end of the tightening. But more importantly, Jerome Powell will likely reveal whether we have one more rate hike, or two more rate hikes to go before pause. And that simple ‘s’ could make all the difference. Read next: Glovo Is Planning To Layoff 250 Workers Worldwide, The Middle East Is Already Suffering From A Water Shortage| FXMAG.COM Watch the full episode to find out more! 0:00 Intro 0:21 Market update 2:39 Apple did good in China in Q4 3:47 Tesla triggers EV price war 4:45 Good news from China and IMF (don’t bring oil bulls back…) 7:34 Why Powell will have to pluck some doves’ wings? Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #FOMC #meeting #Apple #Amazon #Google #Meta #Snap #Exxon #earnings #China #PMI #EUR #inflation #IMF #growth #GBP #crude #oil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Apple Q3 2023 Results – Surpassing Expectations and Aiming for New Heights

Eurozone GDP May Put Challenges For The EUR/GBP Buyers

TeleTrade Comments TeleTrade Comments 31.01.2023 09:49
EUR/GBP reverses the previous day’s corrective bounce off one-week low. Euro struggles to defend hawks after downbeat German data challenge hawkish ECB bias. IMF’s warning over the UK’s economic conditions challenge EUR/GBP bears. Preliminary readings of Eurozone Q4 GDP will be crucial for immediate directions, ECB vs. BoE battle eyed. EUR/GBP remains depressed around 0.8780, fading the week-start recovery, as traders await Eurozone Q4 GDP for fresh impulse during early Tuesday. The cross-currency pair managed to begin the key week comprising central bank announcements on a positive side amid fears of the UK drama over tax cuts. However, downbeat prints of German GDP, later on, weighed on the prices. That said, Economic Sentiment Indicator for the Euro area improved to 99.9 in January from an upwardly revised 97.1 prior and 97.0 market forecasts. The Consumer Confidence, however, matched 20.9 market forecast and previous readings during the stated month. That said, the Industrial Confidence and Services Sentiment also improved during January. On the other hand, the preliminary readings of Germany’s fourth quarter (Q4) Gross Domestic Product (GDP) came in softer than 0.0% expected and 0.4% prior to -0.2% QoQ. "After the German economy managed to perform well despite difficult conditions in the first three quarters, economic performance slightly decreased in the fourth quarter of 2022", Destatis noted in its publication. The same raises fears of downbeat Eurozone GDP and challenges the EUR/GBP buyers. Alternatively, the International Monetary Fund’s (IMF) downbeat economic projections for the UK seem to keep the EUR/GBP on the front foot. As per the latest forecasts, the IMF projects the British economy will mark the weakest performance among the Group of Seven (G7) nations. Read next: Glovo Is Planning To Layoff 250 Workers Worldwide, The Middle East Is Already Suffering From A Water Shortage| FXMAG.COM Also read: IMF: Emerging markets growth slowdown bottomed out in 2022, but risks remain Looking forward, the first readings of the Eurozone Q4 GDP, expected 0.0% QoQ versus 0.3%, will offer immediate directions to the EUR/GBP and is likely to witness further weakness unless marking a surprise. However, major attention should be given to Thursday’s monetary policy meetings of the European Central Bank (ECB) and the Bank of England (BOE) for clear directions. Technical analysis Although a convergence of the 100-DMA and the 50-DMA provides strong support to the EUR/GBP price around 0.8740-35, recovery remains elusive unless the quote stays below a 12-day-old resistance line, close to 0.8830 at the latest.
Further Upward Price Movement Of The AUD/USD Pair Is Expected

AUD/USD Pair Remains Under Strong Selling Pressure, The EUR/USD Pair Has Been Falling But Remains Above 1.08$

Kamila Szypuła Kamila Szypuła 31.01.2023 14:48
The US dollar was on an upward trend against its major trading partners early Tuesday ahead of a busy schedule of data releases for markets. The Fed is coming soon. The US central bank is expected to raise interest rates again to fight inflation. However, fears seem to be growing that the price of victory here may be a recession. USD/JPY The Japanese yen (JPY) continues to be supported by fresh speculation that high inflation could lead the Bank of Japan to adopt a more hawkish stance later this year. Also, the overall weaker tone around stock markets further reinforces the safe haven for the JPY. This, along with the underlying bearish sentiment around the US dollar, puts some downward pressure on USD/JPY. The pair lost in the earlier trading hours but is trading above 130.10 again. EUR/USD The euro fell to USD 1.08 in the last session of January, but remains close to nine-month highs. Investors await the ECB's monetary policy decision on Thursday, with the central bank expected to raise interest rates by 50 basis points, bringing borrowing costs to their highest level since 2008. At the same time, data indicating an unexpected growth in the euro area in Q4 2022 by 0.1%, beating market forecasts of a decrease of 0.1%, and fresh CPI data for France and Spain, showing an increase in inflation in January, gave hope that The ECB will soon end its tightening cycle. On the negative side, retail sales in Germany fell by 5.3%MoM in December, much worse than expected. The EUR/USD pair has been falling since the morning, even significantly in the European session, but remains above 1.08 and trades at 1.0850. Read next: The Government Pension Fund Global Suffers Losses| FXMAG.COM GBP/USD The cable continued its decline in the early hours of the Asian session, falling below the 1.2350 level. GBP/USD saw a slight rebound to trade just above the 1.2350 level heading into the European open where the dollar bull returned pushing GBP/USD towards the 1.23000 handle. The GBP/USD pair remains under bearish pressure and is currently trading at 1.2321. The rally on the GBP/USD pair appears to have lost momentum, however, given the key risk events, the move could be due to market participants repositioning ahead of the storm. With the focus on central banks, there is still a real possibility of a policy divergence between the FED and the BoE, which should benefit the cable in some way. The Fed is expected to raise interest rates by 25 basis points while the Bank of England by 50 basis points as it fights persistent inflation. ING strategists said they expected BoE's decision to have a broadly neutral impact on the pound against the dollar. AUD/USD AUD/USD remains under strong selling pressure for the second day in a row on Tuesday and drops to more than a week low ahead of the North American session. The Australian dollar fell towards $0.70, retreating further from recent highs after data showed the country's retail sales fell much more than expected in December as heightened inflationary pressures and higher interest rates dampened consumer spending. Still, Australians are supported by expectations that the Reserve Bank of Australia will continue to fight inflation, expectations for a 25 basis point rate hike in February and China's swift reopening after Covid restrictions have boosted the global economic outlook. Source: investing.com, finance.yahoo.com, dailyfx.com
The RBA Raised The Rates By 25bp As Expected

Retail Sales Were Weak And The Australian Dollar Has Responded With Sharp Losses

Kenny Fisher Kenny Fisher 31.01.2023 14:56
It has been a rough start to the week for the Australian dollar. AUD/USD has dropped 0.68% on Tuesday and is down 1.36% on the week. In the European session, the Australian dollar is trading just above the 0.70 line. Australia’s retail sales sink Retail sales for December were dismal, with a reading of -3.9% m/m, compared to the consensus of -0.3%. This was down from the 1.7% gain in November and marks the third decline in four months. It was the first decline in 2022 and the Australian dollar has responded with sharp losses. The silver lining is that retail sales are traditionally weak in December and the strong November read was a sign that consumers did their Christmas shopping early in order to take advantage of Black Friday discounts. The sharp drop in consumer spending is another sign that cost of living pressures are taking a toll on consumers. Strong consumer spending has enabled the Reserve Bank of Australia to continue raising rates in order to tame inflation. The RBA will not be pleased with the latest retail sales data but it still expected to go ahead next week with a modest 25-basis point increase. The cash rate is currently at 3.10% and the markets are estimating that the peak rate will rise to somewhere between 3.6%-3.85%. This means that more hikes are on the way after February, but the pace of the rates will be data-dependent, especially on inflation reports. The Federal Reserve concludes its 2-day meeting on Wednesday, and a 25-bp increase is priced at close to 100%. This doesn’t preclude volatility in the currency markets, as a hawkish stance from the Fed, either in the rate statement or in comments from Jerome Powell, could provide a boost to the US dollar. The markets continue to talk about a rate cut late in the year due to the weakening US economy, but the markets could be in for a nasty surprise if the Fed reiterates that high rates are here to stay and there are no plans to cut rates. Read next: AUD/USD Pair Remains Under Strong Selling Pressure, The EUR/USD Pair Has Been Falling But Remains Above 1.08$| FXMAG.COM AUD/USD Technical AUD/USD is putting pressure on support at 0.7000. The next support line is 0.6890 0.7071 and 0.7181 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Serious liquidity crisis? According to Franklin Templeton, a massive, but unlikely deposit flight from Credit Suisse would have to happen

The SNB Had Reduced Its Foreign Exchange Reserves And CHF Slipped Below The Parity Against The Euro For The First Time

Conotoxia Comments Conotoxia Comments 31.01.2023 15:04
The past year has been difficult for everyone, especially those invested in financial markets. Moreover, if you are a central bank with a large amount of money, there may be few viable investment opportunities. While a private investor may choose to "sit this one out", central banks may not have that option due to monetary policy and other reasons. Summary Swiss National Bank has reported a loss of 132 billion CHF for the first three quarters of 2022 – 5 times larger than the previous record.  Over the years, SNB had engaged in aggressive foreign exchange purchases accumulating a 1.05 trillion CHF balance sheet intending to keep the Swiss franc from appreciating.  The large exposure to foreign assets suffered massive losses during the first three quarters of 2022 as most currencies, fixed-income securities, as well as equities depreciated.  Due to this, SNB has already announced that it will not be able to provide the annual payout to the Swiss government and cantons (for the second time only since 1908).  Questions remain - will this change investors' view of the franc as a safe haven and is the SNB planning to make changes to its current monetary and investment policy that will not lead to such a loss? Swiss National Bank surprised everyone with the most significant loss in its history, posting an annual loss of around 132 billion CHF, more than 5 times the previous record. Source: Bloomberg Why did it happen? The bulk of the loss - 131 billion Swiss francs - came from the collapse in the value of foreign currency investments accumulated over decades of buying to weaken the national currency.  Indeed, Switzerland has continuously invested large sums in foreign exchange markets and bought foreign equities to keep the franc from appreciating. After the EUR/CHF exchange rate fell from 1.67 in November 2007 to 1.12 in July 2011, the SNB announced that it had decided to do whatever was necessary to keep the EUR/CHF exchange rate above 1.20. Looking back, we know that "whatever it takes" amounted to almost 300 billion CHF until early 2015 when the 1.20 exchange rate ceiling was abandoned.  The last hit was the Covid-19 pandemic which pushed Switzerland to spend 110 billion CHF on the foreign currency markets while trying to apply brakes on the Swiss franc's appreciation as investors fled to safer currencies and other assets. In fact, as a result, the US labeled Switzerland a currency manipulator due to its aggressive foreign exchange market interventions. The US has not been the only country to express objections to Switzerland's activities to keep its currency from appreciating. During its 1.20 exchange rate pledge, it started purchasing German government bonds pushing their yields into negative territory. Graph: investing.com, comments: author As a result of the aggressive policy of the Swiss National Bank, it accumulated enormous amounts of foreign currencies and other assets on its balance sheet. By the end of 2021, the SNB's balance sheet exceeded 1.05 trillion CHF, which equals 144% of the country's GDP. To put this into perspective, the US Federal Reserve's balance sheet at the time was only 34% of the country's GDP, ECB's balance sheet – 67%, and China's – 32%. Since then, the SNB has started to reduce its balance sheet - by December 2022, SNB had reduced its foreign exchange reserves to 784 billion CHF. That affected the national currency, which slipped below the parity against the euro for the first time in history (except one day when the 1.20 rate limit was renounced). SNB's holdings Now, the considerable exposure to foreign currency holdings does not induce losses per se. But last year, financial markets wiped out not one fund and portfolio. And in times like these, it is more important than ever to be well diversified. At the end of the third quarter of 2022, the SNB's foreign exchange holdings included mainly fixed-income securities, equity securities, and cash. At the end of 2021 – before the plunge in the US tech sector – SNB held US stocks worth 166 billion USD, including shares in Apple, Microsoft, Amazon, Tesla, Alphabet, Meta, and others. Source: Swiss National Bank interim results The above graph shows that all key foreign currencies depreciated against the Swiss franc, except the US dollar. Unfortunately, nearly half of the investments in the US dollar were through US stocks, which greatly lost value during this period.  Furthermore, last year was unique because bonds, typically considered a safer alternative to equities during downturn periods, fell together with riskier assets due to increasing interest rates. In total, during the first three quarters of 2022, Swiss National Bank reported a loss of 70.9 billion CHF due to price fluctuations in bonds, a loss of 54.2 billion CHF due to price fluctuations in equities, and an additional loss of 24.4 billion CHF related to exchange rate changes. The full-year report is expected to be published in March 2023. What now? The Swiss cantons are tightening their belts. As a result of the large loss, not only the bank's shareholders will not receive the awaited payments in the form of dividends. Swiss National Bank will not be able to make its yearly payment to the government and cantons. Although the SNB's annual payments tend to fluctuate widely and are not binding, many of the 26 cantons have already started to adjust their spending plans for this year to reflect the lack of payment. Read next: AUD/USD Pair Remains Under Strong Selling Pressure, The EUR/USD Pair Has Been Falling But Remains Above 1.08$| FXMAG.COM Does this affect Switzerland's attractiveness in the eyes of investors? The conclusions drawn by the SNB and investors may be different and uncertain. It is possible that the SNB has abandoned its target of a EUR/CHF rate above 1.20. We can see that although the exchange rate is well below this level, SNB has stopped increasing its balance sheet (potentially due to the harsh earnings results at the end of Q3). The Swiss National Bank's large loss may also be a lesson to other central banks that it is challenging (if not impossible) to regulate the value of the national currency, especially by acting alone, and even more so when the currency represents a negligible part of the world's foreign exchange reserves.    While some investors may have had an impression that the Swiss franc’s value is being affected by its central bank already before, recent developments and the extreme loss of the SNB have attracted the attention of a myriad of investors all around the world. It may lead to investors rethinking their opinion of the Swiss franc as a stable, safe currency that can be trusted during turbulent times.  Furthermore, it will certainly be interesting to monitor the Swiss National Bank and whether or not it chooses to amend its monetary policy to avoid similar situations in the future.    Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement, or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
InstaForex's Ralph Shedler talks Euro against Japanese yen

The Main Scenario Is That The Price Of USD/JPY Pair Will Increase

InstaForex Analysis InstaForex Analysis 01.02.2023 08:06
The Japanese yen is waiting for today's Federal Reserve meeting with more patience than other currencies. On the daily chart, the price is moving strictly sideways along one of the price channel lines for the sixth day. The nearest resistance is the MACD line, the nearest support is 127.27, which is the bottom line of the price channel. The signal line of the Marlin oscillator is consolidating under the upper line of its own descending channel. This consolidation increases the probability of a breakthrough of this channel, to the upper limit of the rising channel of turquoise color. Accordingly, the main scenario is that the price will increase with an attack on the MACD line. Crossing the line will open the second target of 133.77. On the four-hour chart, the price develops above the MACD indicator line. The Marlin oscillator is moving sideways almost along the zero neutral line. Waiting for the Fed's monetary policy decision and the Japanese currency's reaction to it. Relevance up to 03:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333820
Rates Spark: Yields are looking up again

The Cable Pair (GBP/USD) May Drop On The Fed Meeting

InstaForex Analysis InstaForex Analysis 01.02.2023 08:12
Slightly weaker UK economic indicators and the upcoming strike in England with potential participation of 500,000 people weakened the pound by 27 points yesterday. So far we see only preconditions for the price reversal, even the leading Marlin oscillator on the daily chart stays in the positive (growing) area. Actually the price is developing in the upper half of the 1.2155-1.2420 range, above the MACD indicator line (1.2227). Overcoming the MACD line will not ensure the price reversal, because support at 1.2155 (high on November 24) is located below it. Consolidating under the line will open the way to the target level of 1.1933. Further, falling to 1.1737 is possible. On the four-hour chart, price declines under the indicator lines, settling under them since Monday. The Marlin oscillator is also in the negative territory since Monday. Expect GBP/USD to decline on the Fed meeting.   Relevance up to 03:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333822
Small factors combine to pressure credit

The EUR/USD Pair Is Waiting For The Fed Meeting

InstaForex Analysis InstaForex Analysis 01.02.2023 08:16
Here comes day X - the Federal Reserve will announce its monetary policy with a likely 0.25% rate hike. Next the markets are expecting another 0.25% hike and a short-term ceiling of 5.00% and then a rate cut. Investors are expecting the European Central Bank to raise the rate by 0.50% at tomorrow's meeting, another 0.50% at the next meeting and further 0.25% to the 3.75-4.00% level. In such a situation, the rhetoric of the central bank may be the deciding factor, so after today's "X" day, tomorrow's "Y" day will be just as important. To the previously described plans of the Fed and the ECB, we should also consider that the ECB has given the markets a clearer action plan than the Fed, so the US central bank can affect the exchange rate from this side as well, if desired. The problem is that the Biden administration, unlike the Trump administration, has given no hint of the desired dollar exchange rate. We still believe that the White House has not changed its attitude towards the national currency, otherwise, we would have heard some rumors by now. Therefore, our main scenario remains the same - the dollar will strengthen as a result of the important central bank meetings. On the weekly chart, the price paused at the 138.2% Fibonacci level. As you can see, this is a very strong level. The Marlin oscillator turns down from the overbought zone. On the daily chart, there were almost no changes over the past 24 hours, although there was an unsuccessful attempt to attack the upper boundary of the target range 1.0758/87. On the four-hour chart, the price remains under the balance line indicator, the Marlin oscillator is progressing in the area of the downtrend. We expect the euro to fall on the Fed meeting.   Relevance up to 03:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333824
Lagarde's Dilemma: Balancing Eurozone's Slowdown and Inflation Pressure

The Close On The New York Stock Exchange Was Positive For All Indices

InstaForex Analysis InstaForex Analysis 01.02.2023 08:22
At the close on the New York Stock Exchange, the Dow Jones rose 1.09%, the S&P 500 index rose 1.46%, the NASDAQ Composite index rose 1.67%. Dow Jones The leading performer among the components of the Dow Jones index today was Home Depot Inc, which gained 9.93 points or 3.16% to close at 324.17. UnitedHealth Group Incorporated rose 13.40 points or 2.76% to close at 499.19. Dow Inc rose 1.40 points or 2.42% to close at 59.35. The least gainers were Caterpillar Inc, which shed 9.21 points or 3.52% to end the session at 252.29. McDonald's Corporation was up 3.49 points (1.29%) to close at 267.40, while International Business Machines was down 0.57 points (0.42%) to close at 134. 73. S&P 500 Leading gainers among the S&P 500 components in today's trading were Smith AO Corporation, which rose 13.72% to 67.73, International Paper, which gained 10.66% to close at 41.82, and shares of PulteGroup Inc, which rose 9.42% to end the session at 56.89. The least gainers were Phillips 66, which shed 5.77% to close at 100.28. Shares of Corning Incorporated shed 4.89% to end the session at 34.61. NASDAQ The leading gainers among the components of the NASDAQ Composite in today's trading were Motorsport Gaming Us LLC, which rose 713.69% to hit 21.40, Mobile Global Esports Inc, which gained 161.93% to close at 2.58 , as well as shares of Atlas Technical Consultants Inc, which rose 121.76% to close the session at 12.13. Shares of Sidus Space Inc were the least gainers, losing 53.94% to close at 0.41. Shares of Nuvve Holding Corp lost 40.43% and ended the session at 1.37. Evoke Pharma Inc lost 29.74% to 4.04. Numbers On the New York Stock Exchange, the number of securities that rose in price (2579) exceeded the number of those that closed in the red (477), while quotes of 90 shares remained virtually unchanged. On the NASDAQ stock exchange, 2824 companies rose in price, 865 fell, and 175 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.76% to 19.39. Gold Gold futures for February delivery added 0.27%, or 5.20, to $1.00 a troy ounce. In other commodities, WTI crude for March delivery rose 1.54%, or 1.20, to $79.10 a barrel. Brent oil futures for April delivery rose 1.28%, or 1.08, to $85.58 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.20% to 1.09, while USD/JPY fell 0.23% to hit 130.15. Futures on the USD index fell 0.19% to 101.89.   Relevance up to 04:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/310903
EUR/USD Pair Has A Potential For Short-Term Rally

EUR/USD Pair Has Most Likely Completed Its Larger-Degree Rally

Oscar Ton Oscar Ton 01.02.2023 08:26
Technical outlook: EURUSD rallied through the 1.0875 lower high during the late New York session on Tuesday. Please note that the 1.0870-90 zone was marked as intraday resistance in our discussion earlier. Prices did respond in a bearish manner and could resume lower from here towards 1.0400 in the near term. The instrument is seen to be trading at 1.0865 at this point in writing as the bears prepare to firm their grip. EURUSD has most likely completed its larger-degree rally, which began from the 0.9535 low, at the 1.0929 high last week. The currency pair has also dropped through the 1.0800 low since then and is currently producing a pullback. Immediate resistance is seen at 1.0913, followed by 1.0930; while support comes in around 1.0770, followed by 1.0481 levels respectively. A turn here will target 1.0770 followed by 1.0481 levels, confirming the bears are back in control. Also, note that the Fibonacci 0.618 retracement is seen passing through 1.0100 (for the entire rally between 0.9535 and 1.0930). We expect a bullish reversal if prices manage to drop lower and reach 1.0100 potential support. Bearish pressure is likely to remain in the near term. Trading idea: Potential bearish move against 1.1000 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310913
InstaForex's Irina Manzenko talks British pound amid latest events

Analysis Of The GBP/USD Pair In Short And Long Positions

InstaForex Analysis InstaForex Analysis 01.02.2023 08:30
A few entry signals were generated yesterday. Let's take a look at the M5 chart to get a picture of what happened. In the first half of the day, I focused on the 1.2312 level and considered entering the market there. The pair's plunge in the European session resulted in a false breakout through 1.2312. However, after a 20 pips increase, large traders still showed signs of no return. In the second half of the day, a breakout with a buy signal repeated. However, no surge in the price followed. When to open long positions on GBP/USD: Today, the UK will see the release of the manufacturing PMI for January. However, those figures will be of little importance ahead of the FOMC meeting. Therefore, I expect the pair to move slightly up in the sideways channel. With the Bank of England's aggressive rhetoric, the pound is likely to extend growth against the greenback. If the UK's manufacturing PMI comes in disappointing and sparks a negative reaction in the market, a false breakout through 1.2284 may lead to another surge to the 1.2343 mark. In fact, the pair is currently trading near this level. The moving averages limiting the pair's growth potential are also plotted there. Therefore, it will be challenging for the bulls to push the price to the target. Consolidation and a downside retest of this range may drive the price to the 1.2390 high. In the case of the dovish Fed, the pair may go above the range, targeting 1.2444 where I am going to lock in profits. If the bulls fail and lose grip on the 1.2284 level even before the FOMC meeting, GBP/USD will feel an increase in pressure, and a correction will occur. Therefore, long positions could be opened after a false breakout through the 1.2237 low only. It will also become possible to buy GBP/USD on a rebound from 1.2172, allowing a correction of 30 to 35 pips intraday. When to open short positions on GBP/USD: The bears attempted to extend the corrective move yesterday. They almost succeeded. However, US consumer confidence data spoiled everything and limited the pair's downside potential. The fact that GBP/USD is now trading near the moving averages indicates market uncertainty ahead of the meetings of the Fed and the BoE. The bears should protect resistance at 1.2336. The barrier is in line with the moving averages. If the price skyrockets in the first half of the day, a false breakout through 1.2336 will generate a sell signal, targeting support at 1.2284. A breakout and a retest of the mark to the upside will produce a sell signal with the target at 1.2337. A new downtrend will begin if the price tests this level. The most distant target stands at 1.2172 where I am going to lock in profits. If GBP/USD goes up and there is no bullish activity at 1.2336, the bulls will regain control over the market. A false breakout through 1.2390 will create a sell entry point. In such a case, we may see a bear continuation. If there is no trading activity there as well, I am going to sell GBP/USD on a rebound from the 1.2444 high, allowing a bearish correction of 30 to 35 pips intraday. Commitments of Traders: The COT report for January 24 logged a plunge in both long and short positions. However, this drop was within the limits, especially if taking into account the problems the UK is now facing. Its government has to deal with strikes for fair pay and fight against stubborn inflation at the same time. Nevertheless, all eyes are now on the upcoming meetings of the US Fed and the Bank of England. The American regulator is expected to adopt a less aggressive stance on monetary policy. Meanwhile, its British counterpart is likely to stay hawkish and raise the interest rate by 0.5%. In this light, the pound sterling may strengthen unless something extraordinary happens. According to the latest COT report, short non-commercial positions decreased by 7,476 to 58,690, and long non-commercial positions fell by 6,713 to 34,756. As a result, the non-commercial net position came in at -23,934 versus -24,697 a week ago. These are insignificant changes. Therefore, they are unlikely to affect market sentiment. That is why it is important to monitor macroeconomic reports in the UK and the BoE's rate decisions. The weekly closing price rose to 1.2350 from 1.2290. Indicator signals: Moving averages Trading is carried out near the 30-day and 50-day moving averages, indicating market uncertainty. Note: The period and prices of moving averages are viewed by the author on the hourly chart and differ from the general definition of classic daily moving averages on the daily chart. Bollinger Bands Resistance is seen at 1.2336, in line with the upper band. Support stands at 1.2300, in line with the lower band. Indicator description: Moving average (MA) determines the current trend by smoothing volatility and noise. Period 50. Colored yellow on the chart. Moving average (MA) determines the current trend by smoothing volatility and noise. Period 30. Colored green on the chart. Moving Average Convergence/Divergence (MACD). Fast EMA 12. Slow EMA 26. SMA 9. Bollinger Bands. Period 20 Non-commercial traders are speculators such as individual traders, hedge funds, and large institutions who use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions are the total long position of non-commercial traders. Non-commercial short positions are the total short position of non-commercial traders. Total non-commercial net position is the difference between the short and long positions of non-commercial traders   Relevance up to 06:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333844
FX Daily: Hawkish Riksbank can lift the krona today

The US Dollar Index Has High Probability Remains For A Bearish Turn

Oscar Ton Oscar Ton 01.02.2023 08:32
Technical outlook: The US dollar index dropped through the 101.65 low during the early Asian session on Wednesday, testing the 101.63 lows earlier. The pullback was expected and projected with a potential support zone defined as 101.60-70 earlier. Also, note that prices peaked through 102.20-30 before turning lower to produce a meaningful retracement. The near targets are 102.50 and above 103.00. The US dollar index terminated its larger-degree decline, which started from 114.70 earlier, around 101.10 as seen on the 4H chart here. The lower-degree waves seem to be working on the higher side and a sharp rally could be expected from here with 101.25 support intact. The bulls will remain inclined to target 105.35, which serves as strong resistance. The US dollar index might be preparing to retrace its entire drop between 114.70 and 101.00 in the next few weeks. The potential upside targets are 106.50 and up to 109.50. Also, note that 109.50 is the Fibonacci 0.618 retracement of the entire drop between 114.70 and 101.00. So, a high probability remains for a bearish turn if prices reach there. Trading idea: Potential rally against 100.00 Good luck! Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310919
ECB cheat sheet: Difficult to pull away from the Fed

Tips For Trading The EUR/USD Pair In Short And Long Positions

Jakub Novak Jakub Novak 01.02.2023 08:40
Analysis of transactions and tips for trading EUR/USD The test of 1.0834 occurred when the MACD line was just starting to move below zero, which was a pretty good signal to sell. Accordingly, it resulted in a price decrease of around 25 pips. Shortly after, a test of 1.0805 took place, which led to a rebound of about 30 pips. No other signals appeared for the rest of the day. GDP data from the eurozone was good, which indicates that the region had managed to avoid a recession. However, euro did not rise, ignoring also Germany and Italy's unemployment figures. Price increased only in the afternoon, when the US released a weak report on consumer confidence. The upward movement brought the market back into balance. Today, Germany and Italy will release data on their manufacturing activity indices, followed by a report on eurozone consumer price index. The latter may affect the direction of euro and prompt a rise in quotes provided that underlying prices show a decrease. The eurozone unemployment rate will not be of much interest. More important is the Fed meeting in the afternoon, where interest rates could be raised by 0.25%. That will weaken dollar and cause a sharp rise in euro, especially since other data relating to employment and manufacturing activity will be of little interest. Dovish stance of the Fed will also return risk appetite. For long positions: Buy euro when the quote reaches 1.0882 (green line on the chart) and take profit at the price of 1.0910. Growth could occur if the economic data from the eurozone exceeds expectations. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0852, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0882 and 1.0910. For short positions: Sell euro when the quote reaches 1.0852 (red line on the chart) and take profit at the price of 1.0823. Pressure will increase if economic reports from the Euro area turn out to be weaker than expected. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0882, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0852 and 1.0823. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader Relevance up to 06:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333850
Rates Spark: Nothing new on the dovish front

The EUR/USD Pair Is Still Moving Sideways

Paolo Greco Paolo Greco 01.02.2023 08:42
M5 chart of EUR/USD EUR/USD did not show any interesting movements on Tuesday. The pair seesaws around the flat. In general, the pair's movements are unappealing, which is very difficult to work out. This week should be volatile and trendy, but as of Wednesday morning we haven't observed anything like that. Macroeconomic and fundamental backgrounds will start to appear this afternoon. Yesterday, the EU published its GDP report for the fourth quarter, which turned out to be unexpectedly positive and showed a 0.1% growth of the European economy instead of a contraction. As we can see, this report did not help the euro in any way and there was no reaction to it. So, all we can do is wait. At least we have to wait for today's US ISM index and the results of the Federal Reserve meeting in the evening. Yesterday's trading signals were not good, but what else should we expect from the flat? In the beginning, the pair bounced from the critical line, and then it went down to 1.0806. This signal was manageable and it gained 20 pips. The rebound from 1.0806 was also a good buy signal, afterwards the pair returned to the Kijun-Sen line and spent the rest of the day in the 1.0846-1.0868 area. The profit was 20-30 pips. But the Senkou Span B line was located between the critical line and 1.0806, so the entire thing could be considered as one area. Consequently, we couldn't open any deals at all. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 9,500, whereas the number of short positions fell by 2,000. Thus, the net positions decreased by 7,500. Now the number of long positions is higher than the number of short positions opened by non-commercial traders by 134,000. So now the question is: how long will the big players increase their longs? From a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 52,000 (732,000 vs. 680,000). H1 chart of EUR/USD The technical picture on the one-hour chart remains unchanged. The pair is still moving sideways, and the Ichimoku indicator lines are starting to intersect more often. Volatility is weak. I expect more active movements in the second half of the week, but at the same time, let me remind you that volatility may increase, but that doesn't mean the pair would move in a trend. On Wednesday, the pair may trade at the following levels: 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137, and also Senkou Span B (1.0825) and Kijun Sen (1.0866). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On February 1, the EU will release reports on inflation, unemployment and the manufacturing PMI. In the U.S., we can look forward to the ISM index and the Federal Reserve meeting. There will be enough important events to keep the pair in one place. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 05:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333836
The GBP/USD Pair Is Expected The Consolidation To Continue

The GBP/USD Pair May Start A New Round Of Upward Movement

Paolo Greco Paolo Greco 01.02.2023 08:45
M5 chart of GBP/USD GBP/USD continues to move within the sideways channel, which is not surprising, since the pound was mostly flat for about three weeks. We will finally receive important reports starting today, so we can hope for a trendy, volatile movement. At the moment, the pair reached the lower limit of the channel, so according to the technique, it may bounce from it and start a new round of upward movement. If today's reports are not in favor of the USD, the pound may surge, which will occur within the same sideways channel. Yesterday, the pair could not cross the Senkou Span B line twice, so there are not many technical reasons to expect the continuation of the decline. Yesterday, there were four trade signals. The pair initially settled above the critical line, and frankly, this signal was false. The price could not even pass 20 points in the right direction. Then it settled below the Kijun-Sen line, afterwards the pair descended to the Senkou Span B. You could earn about 25 pips on this deal, which covered the loss from the first trade. Two rebounds from the Senkou Span B could be worked out using long positions. In the first case, the deal was closed with Stop Loss at breakeven, in the second case, traders could earn about 15-20 points of profit, and the deal should have been closed manually closer to the evening. Not a bad result, given the flat. COT report The latest COT report showed a decrease in bearish sentiment. In a week, non-commercial traders closed 6,700 long positions and 7,500 short positions. The net non-commercial position grew by 800. The net non-commercial position has been on the rise in recent months. The sentiment of large traders may soon turn bullish. Although the pound sterling has been bullish against the greenback in recent months, its growth can hardly be explained with the help of fundamental analysis. We should not rule out the possibility that the pound may fall against the dollar in the medium term as a correction is needed. Overall, the latest COT reports have been in line with the pair's movement. Since the net position is not bullish yet, the buying spree may go on for several months more. Non-commercial traders now hold 35,000 long positions and 59,000 short ones. We are still skeptical about the pair being bullish in the long term although there are technical reasons for that. However, in terms of fundamentals and geopolitics, this will unlikely be a strong and fast uptrend. H1 chart of GBP/USD On the one-hour chart, GBP/USD is still moving in the sideways channel. You can clearly see this on the charts. Lines of the indicator Ichimoku are not strong now, but we still fixed their last position in order not to form a ton of false signals near them. Now we will wait for the pair to cross both the Ichimoku indicator lines. Otherwise, a new round of growth inside the sideways channel with 1.2429 as the target. On February 1, the pair may trade at the following levels: 1.1974-1.2007, 1.2106, 1.2185, 1.2288, 1.2342, 1.2429-1.2458, 1.2589, 1.2659. The Senkou Span B (1.2298) and Kijun Sen (1.2354) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Wednesday, the UK will only release its manufacturing PMI report, on the other hand, the US will release an important report on the ISM manufacturing index. In the evening, the results of the Federal Reserve meeting will be announced and Fed Chairman Jerome Powell's succeeding press conference. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 06:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333842
The EUR/USD Pair Consolidated In The Downward Trend Area

The Euro (EUR) Currency Is Significantly Overbought

Paolo Greco Paolo Greco 01.02.2023 08:52
The EUR/USD currency pair began the week as uninteresting as possible. The trading on Monday and Tuesday was essentially the same. Volatility has long lagged behind expectations, and recent movements can only be defined as flat. As a result, there is nothing noteworthy happening right now on the market. Furthermore, figuring out this "nothing intriguing" is quite challenging. What should you do with a pair that is stuck in one spot? If you can still open intraday trades on a lower time frame to earn 10–20 points, what should you do on a 4-hour time frame? Simply observe and wait. By the way, it doesn't take long to wait. The Fed will already make the meeting's first results public tonight. Since reports regarding another slowdown in the rate of a key rate increase have been constantly exaggerated for more than a month, one could claim the market is already familiar with them. It should be noted that Fed officials do not use rumors or expectations as a guide for action. In other words, although inflation has decreased to 6.5%, the target level is still being missed. How can inflation expectations be calculated using the rate? This week, the Spain consumer price index stopped falling. Many other nations around the world may see a stop to the decline. What if the Fed now reduces its rate to 0.25% and it turns out that inflation is no longer decreasing because the cost of gas and oil has started to rise once more? Will the Fed be protected from such a situation, or will it choose to "go with the flow"? After all, nothing prevents raising the rate for a longer period than initially anticipated. Therefore, it is likely that the rate will increase by 0.25% after all, and the market has long "determined" this outcome "in advance." However, this does not mean that the market will disregard this event. There are two ways to use the euro currency: logically and illogically. Let's return to the technique once more. Since November 3, the euro has increased by 1200 points in value. This means in less than three months. We experienced one correction of 250 points during these three months. Do you think it's excessive? The euro currency is significantly overbought, in our opinion. Although it may have outstanding long-term potential and increase over the next one to two years, its current growth rate and regression pattern are, to put it mildly, odd. As a result, we only advocate for the necessity of adapting at this time. And how does this fit into the fundamental background? It's very easy. If the euro has been increasing by significant amounts in recent weeks, the Fed's rate hike will be slowed down for a reason that has already been determined. The 0.5% ECB rate increase has the same factor. As a result, the market has no motivation to purchase euros once more. This means that rather than a lack of response, we may witness a backlash in the form of a decline in the euro/dollar pair. The ECB's monetary policy will be significant until the euro currency shows at least some correction (we are anticipating a 300–400 point drop). The most widely accepted scenario at present is that the European regulator will raise rates by 1.25% for three sessions, but nobody knows what will happen after that. Lagarde claims that the ECB will continue to raise rates "to the bitter end," but no one is certain of the condition of the European economy in three to four months. The GDP data released yesterday for the fourth quarter of 2017 showed negligible growth of 0.1% q/q. If you compare it to the expectations from a few months ago, this is simply an excellent value. However, the European economy is still slowing down and may soon enter a slight recession. Therefore, in our opinion, the ECB won't suddenly raise rates. It can settle for inflation of 3% to 4% while establishing a more secure, longer-term target to bring it down over the next few years. In this scenario, one of the key reasons for supporting the euro will be gone. As of February 1, the euro/dollar currency pair's average volatility over the previous five trading days was 70 points, which is considered "normal." So, on Wednesday, we anticipate the pair to move between 1.0789 and 1.0929. A new round of downward movement will be signaled by the Heiken Ashi indicator reversing downward. Nearest levels of support S1 – 1.0742 S2 – 10620 S3 – 10498 Nearest levels of resistance R1 – 1.0864 R2 – 1.0986 Trading Suggestions: The EUR/USD pair has finally consolidated below the moving average. Until the price is fixed above the moving average, you can maintain short positions with targets of 1.0789 and 1.0742. After the price has secured above the moving average line, you can start trading long with targets of 1.0929 and 1.0986. The flat is still going at this point, which is something to consider. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 05:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333832
Analysis Of The EUR/JPY Pair Movement

Analysis Of The EUR/JPY Pair Movement

Torben Melsted Torben Melsted 01.02.2023 08:54
It has been a while since we last looked at EUR/JPY, but then we have seen a triangle developing since late December 2022. This triangle is, however, nearing its completion. So, we should see a breakdown anytime now towards our long-term target near 134. This price action should complete the correction from 148.30 and set the stage for a new push higher towards this top and ultimately above here too, but for now, we will focus on the expected breakdown and a decline towards 134. Short-term a break below 140.53 will indicate that the triangle has been completed and the expected decline to 134 is in progress.   Relevance up to 07:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310933
Services PMIs and Fed Minutes: Analyzing Market Focus and Central Bank Strategy

The Outlook Of The GBP/USD Pair Movement

Torben Melsted Torben Melsted 01.02.2023 08:57
GBP/JPY has been locked in a consolidation since late December and should be close to completing this consolidation for a breakdown towards the long-term corrective target near 145.76. Once this correction is complete, we will be looking for a new impulsive rally above the former peak at 172.13. However, for now, we will concentrate on a break below minor support at 159.50 as the indication that the consolidation has been completed and the expected decline towards 145.76 is unfolding.   Relevance up to 07:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310935
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

FX Daily: Peak? What peak?

ING Economics ING Economics 01.02.2023 09:20
Everything is pointing to the fact that today's well-telegraphed 25bp hike by the Fed will be the penultimate move before ending the cycle. However, Chair Powell and the FOMC may see little interest in sounding materially less hawkish just yet. Ultimately, a push-back against a pivot and rate-cut speculation could hit risk assets and lift the dollar today Federal Reserve Chair Jerome Powell USD: Hawkish Fed can lift the dollar The dollar enters FOMC day after having shown some resilience over the past few sessions, which was likely the consequence of some defensive positioning ahead of key central bank meetings, which kept risk assets capped. Still, the last important piece of data before the Federal Reserve announcement – yesterday’s Employment Cost Index – offered more reasons to think the Fed is indeed close to the peak. Labour costs eased for a fourth consecutive quarter in 4Q, moving from 1.2% to 1.0%, the same levels as the fourth quarter of 2021. This is likely easing some concerns in Washington about inflation stickiness, and underpins a scenario where slowing price pressures favour less hawkish rhetoric. The question is whether such unwinding in the hawkish narrative will already emerge in today’s FOMC announcement. We doubt that. As discussed in our FOMC preview, we expect a 25bp rate hike today, which is the consensus view and is fully priced in by the swaps market. We think that Fed Chair Jerome Powell and his colleagues simply have little interest in sending strong signals that they are indeed close to the peak, which only risks generating a premature fall in interest rates. A reiteration that ongoing rate increases remain appropriate, inflation is high and that the jobs market remains tight despite slowing growth, seems to us the most likely content of today’s communication “package” by Powell. He will most likely be asked about the current market pricing for around 50bp of easing in the second half of the year. Using the same rationale, Powell still has all the interest in pushing back against rate cut speculation. In practice, we suspect the Fed will end up cutting more than 50bp as the US economic slack deepens, but that is not a story for today’s announcement. So, we are in the camp of expecting Powell to maintain his hawkish rhetoric despite this appearing less appropriate given the backdrop of slowing inflation and growth. This outcome may ultimately have some negative implications for risk and give the dollar some support, as bets on a pivot, and potentially on rate cuts, are scaled back. Any communication missteps or deliberate dovish tilts, on the other hand, can surely revive that dollar bear trend that appears to have halted lately. We also have some US data to watch today: ISM manufacturing, ADP payrolls and JOLTS jobs openings. Substantial surprises on those releases are likely needed to drive major dollar moves ahead of such a big event like the FOMC. Francesco Pesole EUR: Inflation surprise already priced in? EUR/USD will inevitably be heavily impacted by the post-FOMC reaction today. In line with our view for a positive impact on the dollar, we think the 1.0800 support could be heavily tested after the Fed announcement. Before that, however, all eyes will be on the eurozone inflation figures, which should show more stickiness than previously thought after evidence of persistent price pressure in Spain and France. We suspect much of this inflation story has now been priced in, and a still quite hawkish pricing for European Central Bank tightening (150bp of hikes by June) suggests the room for further increases in rate expectations – and by extension, for another big ECB-driven EUR rally - has shrunk for now. We think that EUR/USD will ultimately come out weaker from these two days of central bank activity (here’s our ECB market preview). An exploration of the 1.0700-1.0750 range is surely possible in the near term, even though the longer-term outlook keeps pointing to a dollar decline and EUR/USD strength. Francesco Pesole GBP: Downside risks from a hawkish Fed Stronger ECB rate expectations are likely to be blamed for the strengthening in EUR/GBP beyond the 0.8800 level. As discussed in the EUR section above, we think there is now less scope for the ECB to push the euro even higher, which means more fuel to the EUR/GBP rally may be mostly a function of risk sentiment rather than monetary policy divergence. Indeed, since the pound tends to be more sensitive to global risk sentiment than the euro, the risks are skewed to the upside for EUR/GBP today given our baseline scenario for a hawkish Fed weighing on risk assets. Cable may drop to the 1.2200 mark today. Francesco Pesole SEK: Krona undermined by domestic woes The Swedish krona has been a negative standout in the G10 space over the past few days, as unstable risk sentiment offered a breeding ground for rising bearish bets linked to a worsening domestic outlook in Sweden. We analyse this theme in more detail in “Sweden: Krona increasingly pricing in domestic woes”. In short, EUR/SEK is currently 2.5% overvalued in the near term as markets appear to be pricing in the increasing likelihood of a pessimistic scenario for the Swedish property market and the economy. Since we don’t believe the risk of a black swan scenario in Sweden has materially increased, we think that SEK will recover gradually over the coming months. Looking at the very short-term however, SEK’s sensitivity to risk sentiment still puts it in a vulnerable position today ahead of the Fed announcement. EUR/SEK is currently trading around 3% below its historic highs (11.68 in 2009), and risks that those levels will be tested in the short-term (although not our base case) have admittedly risen lately. We still target sub-11.00 levels before the summer, as recently discussed in our EUR/SEK scenario analysis. Francesco Pesole Read this article on THINK
Demand For Gold Rose Around 20% In 2022, Coffee Prices Jumped

Demand For Gold Rose Around 20% In 2022, Coffee Prices Jumped

Saxo Bank Saxo Bank 01.02.2023 09:45
Summary:  Another day brought another sharp direction change as markets rallied steeply from the prior day’s funk, with the Nasdaq 100 index crossing back above the 200-day moving average, which has been in play in recent days. Heavy anticipation ahead of tonight’s FOMC meeting and whether the Powell Fed will confirm the market’s view of imminent peak rates at the next meetings or two after today’s. Key US economic data also up through Friday’s US jobs report. What is our trading focus? Equities: Earnings breathed new life into momentum The earnings releses yesterday helped aggregate earnings q/q to improve for Q4 easing some of the concerns around earnings recession, but despite better than feared Q4 figures many companies are still cautious on their Q1 outlook. Indicators suggesting wage costs are easing in the US also helped drive sentiment back into positive mood on top of the market betting the Fed might blink after all tonight on its monetary policy trajectory. S&P 500 futures rallied 1.9% from the intraday lows yesterday into the close around the 4,085 level. US equity futures are stabilising this morning around yesterday’s close and we expect little action ahead of tonight’s FOMC rate decision. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) pause during lackluster session The Hang Seng Index took a pause in its retreat and consolidated with a modest 0.6% gain. CSI 300 traded sideways and was up 0.3% as of writing. Caixin China Manufacturing PMI came in weaker than expected at 49.2 in January (vs consensus: 49.8; Dec: 49.0), the sixth month in the contraction territory. According to the chief economist at Caixin, optimism has improved in the manufacturing sector but both domestic and external demand, and logistics were yet to fully recover. Baidu (09888:xhkg) and BYD (01211:xhkg) each surged 5.8% and were the biggest winners within the Hang Seng Index. Shares in Baidu, the Chinese search engine, were boosted by chatters that Baidu was developing an AI-powered chatbot similar to ChatGPT. BYD extended yesterday’s gain after reporting a preliminary 2022 profit of RMB 6.7 – 7.7 billion which represents a 425% to 458% growth from a year earlier. ChatGPT concept stocks also advanced in the mainland’s A-share market. FX: Dollar pounded back lower on broad sentiment recovery Yesterday brought another sharp direction change in sentiment, with a souring mood suddenly gathered up by the beginning of the US session yesterday after the US dollar had rallied sharply, seemingly in recognition of the blitz of event risks in coming days, starting of course with tonight’s FOMC meeting. EURUSD found support ahead of 1.0800 and rallied back toward 1.0875 into this morning. AUDUSD found support just below 0.7000 and bounced back, etc. A key test for central bank guidance and how much the market buys into that guidance in coming days, as the market continues to price for imminent peak Fed policy rate, with perhaps one more 25 basis point hike after tonight’s presumed 25 basis point hike before a pause. The ECB, meanwhile, is seen hiking 50 basis points tomorrow and then tacking on at least another 100 basis points of hiking at coming meetings. Will markets listen to central bank guidance, or will incoming data rule the day in coming days and weeks? The market has persistently ignored Fed guidance for policy beyond the next few meetings. Crude oil (CLH3 & LCOJ3) recovers as long liquidation pressures ease ahead of OPEC and Fed Crude oil prices found support on Tuesday as technical, not fundamental, selling pressure from funds started to ease. Money managers added 95 million barrels during a two-week period to January and but the failure to break higher last week triggered a period long liquidation. With that pressure reduced the market may once again focus on current fundamentals which on balance remains supportive as China recover while the supply outlook remains uncertain with the upcoming threat to supply from the next round of sanctions against Russian sales of fuel products. Focus on FOMC meeting, OPEC+ JMMC recommendations, and EIA’s weekly stock report after the API reported a 6.3-million-barrel increase. Gold (XAUUSD) holds its line of support Gold passed its first proper correction attempt since mid-December with flying colours on Tuesday, when a slump to key support in $1900 area was followed by a 30-dollar bounce back, supported by a weaker dollar after it also failed in its correction attempt to move higher. The US employment costs eased last quarter (see below), thereby supporting an expected 25bp rate hike from the FOMC today, action that is expected to be followed up by hawkish comments in order to send strong a message that cuts are not on the table anytime soon. The World Gold Council reported that demand for gold rose around 20% in 2022 to its highest since 2011, driven by “colossal” central bank demand, at 1,136 tons the highest in 50 years. It highlights the reason why gold did so well last year despite surging real yields and the much stronger dollar. Support at $1900 & $1865. Copper’s shallow correction points to more strength Copper, just like gold, managed to find support after an end of month selloff was halted before the technical picture managed to turn negative. HG Copper bounced before reaching its 21-day moving average, today at $4.13/lb (LME at $9100), and its 38.2 fibo retracement at $4.11/lb (LME at $9030). The bounce back being supported by a weaker dollar following the weaker-than-expected US employment cost index. Focus on the FOMC and its impact on the dollar as well as ongoing supply disruptions in Peru underpinning prices while awaiting an expected pickup in demand from China. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) dip as the Employment Cost Index softened. Bids came into the front end to the belly of the Treasury curve following the growth in the U.S. employment cost index, a preferred wage and benefit barometer of the Fed came in at 1% in Q4, below the 1.1% expected, and decelerated from 1.2% in Q3. The 5-year notes outperformed with a 5bp drop in yield to 3.62%. Yields on the 2-year and the 10-year were 3bps lower to 4.20% and 3.51% respectively. Gabriel Rubin and Nick Timiraos of the Wall Street Journal suggested that the cooler worker compensation gains increased “the possibility of a pause in rate rises this spring”. Read next: AUD/USD Pair Remains Under Strong Selling Pressure, The EUR/USD Pair Has Been Falling But Remains Above 1.08$| FXMAG.COM What is going on? US earnings recap: Caterpillar, UPS, and Snap Q4 earnings have been mixed relative to expectations so far but yesterday’s earnings releases lifted the mood. But not all earnings were positive. Caterpillar delivered Q4 revenue of $16.6bn vs est. $15.9bn while EPS missed slightly against estimates. Despite putting out a positive outlook for 2023 due to favourable prices, shares were down 4% during the trading session. Caterpillar said on the conference call that prices in 2023 will offset manufacturing costs and North America construction is seeing good momentum while China is still slow and will be below 2022 levels. UPS misses on revenue but EPS beats despite average revenue per package coming in lower than estimated most likely due to cost cutting exercises. The logistics company is authorizing a new share buyback programme of $5bn. UPS 2023 outlook on revenue came in lower than expected and management said on the conference call that Europe is likely in a recession in the first half of 2023 and China should recover after Q1; it also said that Amazon’s share of volume declined to 11.3% in 2022 from 11.7% in 2021. Snap reported after the market call Q4 revenue of $1.3bn in line with estimates and EPS was $0.14 vs est. $0.11. Snap said revenue was down 7% year-to-date vs their own internal forecast of -10% to -2%. Shares were down 15%. Strong earnings from Novo Nordisk driven by obesity drug Novo Nordisk has reported Q4 earnings this morning in Europe with Wegony (obesity drug) revenue at DKK 2.5bn vs est. DKK 1.7bn helping overall revenue to beat estimates. The company is additionally putting out a very optimistic 2023 outlook on revenue and operating income of 13-19% on top of a big share buyback programme of DKK 28bn. US economic data still supporting a smaller rate hike The Fed’s preferred measure of wage gains, the employment cost index, slowed to 1% last quarter from +1.2% in Q3, coming in a notch softer than the expected at 1.1%. The fall was led by wages and salaries falling to +1.0% from +1.3%, while benefit costs fell to +0.8% from +1.0%. While the report signals that wage pressures may be easing and could mean that the Fed’s against inflation is working, more data will be needed to confirm the trend. Meanwhile, US consumer confidence in January dipped to 107.1, short of the expected 109.0 and the prior, revised higher, 109.0. The present situation index encouragingly rose to 150.9 (prev. 147.2), but the forward-looking expectations index declined to 77.8 (prev. 82.4). Chicago PMI slightly declined in January to 44.3 from 45.1, beneath the expected 45.0. The coffee short squeeze gathers momentum Coffee jumped 6.7% on Tuesday, thereby adding momentum to the strong recovery that has seen the quality bean surge 29% during the past two weeks to reach a three-month high at $1.82/lb. The fundamental driver being a deteriorating outlook for coming season in Brazil forcing a major turnaround from hedge funds who in recent weeks had amassed the biggest net short in more than three years. It highlights the importance of watching the weekly COT update as a change in the technical and/or fundamental outlook can have an outsized impact on elevated positions. What are we watching next? Test of central bank messaging and whether market is listening. The FOMC meeting is up tonight, with the general narrative that the FOMC and Chair Powell will continue to push back against expectations for the Fed to reach peak policy rates after perhaps one more 25 basis point hike after today’s and then begin cutting rates by year-end. But as the market has ignored Chair Powell’s protestations on the market’s forward expectations before, it is tough to see how he makes a strong impression unless taking drastic (and unlikely) measures like hiking the policy rate 50 basis points. Incoming data, starting with the upcoming ISM’s (today and Friday) and the Friday jobs and earnings data, may weigh more in the pricing of the Fed policy rate from here. The ECB is up tomorrow and is expected to confirm the markets view of significant further tightening in the pipeline after another 50 basis point hike. The Bank of England tomorrow is less certain, as the BoE may try to sneak in more cautious guidance, given the weak performance of the UK economy. Earnings to watch Our US earnings focus today is Meta and Southern Copper with Meta likely to reflect the weakness in online advertising that Snap communicated last night in their Q4 earnings release. Meta is expected to report Q4 revenue growth of –6% y/y and guide Q1 revenue growth of –2% y/y which could prove to be too positive given Snap’s indications on year-to-date revenue growth of –7%. Southern Copper is expected to report Q4 revenue growth of –13% y/y and EPS of $0.81 down 31% y/y. Today: Novo Nordisk, Orsted, Keyence, Hitachi, GSK, BBVA, Novartis, Meta, Thermo Fisher Scientific, Southern Copper Thursday: DSV, Dassault Systemes, Siemens Healthineers, Infineon Technologies, Deutsche Bank, Sony, Takeda Pharmaceutical, Shell, ING Groep, Banco Santander, Siemens Gamesa Renewable Energy, Nordea, Roche, ABB, Apple, Alphabet, Amazon, Eli Lilly, ConocoPhillips, Qualcomm, Honeywell, Starbucks, Gilead Sciences, JD.com, Ford Motor, Ferrari Friday: Coloplast, Sanofi, Intesa Sanpaolo, Denso, CaixaBank, Naturgy Energy, Assa Abloy, Regeneron Pharmaceuticals Economic calendar highlights for today (times GMT) 0815-0900 – Eurozone Final Jan. Manufacturing PMI 1000 – Eurozone Jan. CPI estimate 1315 – US Jan. ADP Private Payrolls change 1500 – US Jan. ISM Manufacturing 1530 – EIA's Weekly Crude and Fuel Stocks Report 1900 – FOMC Meeting 1930 – US Fed Chair Powell press conference      2130 – Brazil Selic Rate 0030 – Australia Dec. Building Approvals 0030 – Australia NAB Business Confidence Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – February 1, 2023 | Saxo Group (home.saxo)
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

The USD/CAD Pair Is On The Way To Late 2022 Low

TeleTrade Comments TeleTrade Comments 01.02.2023 09:47
USD/CAD licks its wounds after falling the most in a week. Oil price struggles despite softer US Dollar as markets brace for OPEC+ verdict. Softer US data, yields join bearish bias for the Fed to lure Loonie pair sellers. Canada GDP appeared unimpressive but PMIs may offer intermediate moves. USD/CAD remains defensive around 1.3310 amid sluggish markets on early Wednesday, treading water after reversing from a one-week high the previous day. The Loonie pair’s latest inaction portrays the cautious mood ahead of the Federal Open Market Committee (FOMC) monetary policy meeting. Also challenging the quote is the Oil traders' anxiety before the Joint Ministerial Monitoring Committee (JMMC) of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, known collectively as OPEC+. That said, the WTI crude oil, Canada’s main export earner, grinds higher past $79.00 following a strong reversal from the three-week on Tuesday. It should be noted that Reuters has already turned down the odds of any change in the OPEC+ JMMC’s previous verdict favoring the supply cuts from major producers. On the other hand, the US Dollar Index (DXY) remains indecisive after reversing from a one-week high as an early signal for the US inflation printed downbeat figures. That said, US Employment Cost Index (ECI) for the fourth quarter (Q4) eased to 1.0% versus 1.1% market forecasts and 1.2% prior readings. Further, the Conference Board (CB) Consumer Confidence eased to 107.10 in January versus 108.3 prior. It should be noted that no major attention could be given to the US Chicago Purchasing Managers’ Index (PMI) for January which rose to 44.3 versus 41 expected and 44.9 previous readings. At home, Canadian Gross Domestic Product (GDP) for November grew by 0.1% MoM, matching October's expansion of 0.1% but rose past the market expectation of 0%. It should be observed that the pre-event cautiousness joins China’s Consecutive sixth below 50.0 print of the Caixin Manufacturing PMI, which in turn probes the Oil price and put a floor under the USD/CAD. Additionally, mildly offered S&P 500 Futures act as an additional challenge for the Loonie pair sellers. On the contrary, downbeat yields challenge the US Dollar bulls ahead of the key event. The benchmark US 10-year Treasury bond yields remain sluggish near 3.51% and defend the previous day’s pullback. Looking forward, dovish bias over the Fed joins the likely unimpressive OPEC+ meeting to keep USD/CAD bears hopeful. Also important will be the monthly PMI data for the US and Canada. Technical analysis Unless providing a daily close beyond the one-month-old descending resistance line, close to 1.3380 by the press time, USD/CAD is on the way to late 2022 low surrounding 1.3225.
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The New Zealand Dollar (NZD) Remained Extremely Volatile

TeleTrade Comments TeleTrade Comments 01.02.2023 09:53
NZD/USD is scaling towards 0.6450 as the USD Index has retreated after a short-lived pullback. Federal Reserve is widely anticipated to announce a 25 bps interest rate hike to 4.50-4.75%. Reserve Bank of New Zealand might continue its hawkish stance despite weak Employment data. NZD/USD is testing the consolidation breakdown and is likely to display a fresh downside ahead. NZD/USD has stretched its recovery above the critical resistance of 0.6440 in the early European session. The Kiwi asset displayed a recovery move after testing Tuesday’s low around 0.6415 due to subdued performance by the US Dollar Index (DXY). The USD Index is demonstrating topsy-turvy moves in a 101.70-101.80 range and is likely to display a downside break due to less anxiety among investors than usual ahead of the interest rate decision by the Federal Reserve (Fed). S&P500 futures are failing to square off their losses that emerged in the Asian session, portraying a caution despite overall optimism in the market mood. Widely anticipated expression of further decline in the policy tightening pace by the Federal Reserve is not compelling the market participants to dump risk-sensitive assets. However, emerging United States recession fears due to the expectation of further stretch in the interest rate have shifted investors to the sidelines. The return generated by 10-year US Treasury bonds is hovering around 3.51% after a mild correction. Lower Labor cost and consumer spending bolsters the case of the less-hawkish Fed’s policy The Employment Cost Index (Q4) released on Tuesday was trimmed to 1.0% vs. the consensus of 1.1% and the prior release of 1.2%. Easing negotiation power for labor costs is music to the ears for the Federal Reserve, which is working hard to achieve price stability in the United States. Also, the Personal Consumption Expenditure (PCE) price index released last week showed that consumer spending contracted in December Christmas celebrations, which claims that the downside trend in the US Consumer Price Index (CPI) will continue further. Economists at Goldman Sachs have come up with expectations for dictations by Federal Reserve chair Jerome Powell in February’s monetary policy meeting. They believe that "Since the FOMC last met in December, incoming data on wage growth and inflation have been encouraging, while signals on activity growth have been mixed and at times concerning. This ended up making the case for slowing the pace of rate hikes to 25bp this week quite easy.” For further guidance, Goldman Sachs expects two additional 25bp hikes in March and May, but fewer might be needed if weak business confidence depresses hiring and investment. US Employment data remains key ahead of Federal Reserve policy The tight US labor market is losing its luster as firms are ditching the recruitment process due to a bleak economic outlook. Higher interest rates and lower retail demand has already forced the firms to suspend their expansion plans for some time. Also, a few firms are not operating at full capacity, which has trimmed the requirement of hiring fresh talent. This has also trimmed the negotiation power of employees to determine talent acquisition costs. As per the consensus, the US Automatic Data Processing (ADP) (Jan) Employment data is seen at 170K, significantly lower than the former release of 235K. The declining scale of job additions due to weaker economic projections is going to delight the Federal Reserve as it will trim inflation projections further. Apart from the Employment data, US ISM Manufacturing PMI (Jan) will be of significant importance. Manufacturing activities are expected to be slowed to 48.0 vs. 48.4 in the prior release as firms are not deploying their entire operating capacity. However, the New Order Index is seen higher at 46.1 vs. the former release of 45.2. An upbeat forward demand might provide some cushion to the USD Index. Read next: AUD/USD Pair Remains Under Strong Selling Pressure, The EUR/USD Pair Has Been Falling But Remains Above 1.08$| FXMAG.COM New Zealand Dollar holds strength despite weak job data The New Zealand Dollar remained extremely volatile in the Asian session due to the release of the Employment data (Q4) and Caixin Manufacturing PMI data. The Employment Change dropped to 0.2% from the expectations of 0.3% and the former release of 1.3%. While the Unemployment Rate has increased to 3.4% from the consensus and the prior release of 3.3%.  Apart from that Quarterly Labor cost index has landed at 1.1% lower than the estimates of 1.3% but similar to the prior release of 1.1%. Steady employment bills and declining labor demand might delight the Reserve Bank of New Zealand (RBNZ), which is working with immense enthusiasm and zeal to achieve price stability. Reserve Bank of New Zealand Governor Adrian Orr might continue hiking interest rates as the inflation rate is still above 7%. The Caixin manufacturing PMI landed at 49.2 lower than the expectations of 49.5 but higher than the former release of 49.0. It is worth noting that New Zealand is one of the leading trading partners of China and an unimpressive PMI has a vital impact on the New Zealand Dollar. NZD/USD technical outlook NZD/USD has sensed selling interest after testing the strength of the consolidation breakdown in the 0.6450-0.6470 range on a four-hour scale. On a broader note, the kiwi asset demonstrated signs of bearish reversal after a Double Top chart pattern around December 13 high at 0.6515. An absence of stellar buying interest while attempting to surpass the 0.6515 resistance triggered selling pressure for the New Zealand Dollar. The 50-period Exponential Moving Average (EMA) at 0.6460 is acting as a major barricade for the New Zealand Dollar. Meanwhile, the Relative Strength Index (RSI) (14) has also slipped into the bearish range of 20.00-40.00, which indicates that the downside momentum is active now
SNB stands firm in the face of market turbulence with 50bp rate hike

The USD/CHF Pair Is Expected A Further Downside Movement

TeleTrade Comments TeleTrade Comments 01.02.2023 10:00
USD/CHF remains on the back foot despite latest inaction. Sustained break of fortnight-old ascending trend line, U-turn from 200-EMA favor sellers. Buyers need successful trading below 61.8% Fibonacci retracement to retake control. USD/CHF holds lower ground near 0.9160 during early Wednesday, following a clear downside break of the previous key support line. The Swiss currency (CHF) pair’s latest inaction could be linked to the market’s cautious mood ahead of the Federal Open Market Committee (FOMC) monetary policy meeting. However, the bearish MACD signals and a U-turn from the 200-bar Exponential Moving Average (EMA) seem to join the trend line break to keep sellers hopeful. That said, multiple lows marked during January 18-20, close to 0.9150-45, seem to restrict the immediate downside of the USD/CHF pair. Following that, a previous monthly low, as well as the yearly bottom, near 0.9085 will be in focus. It should be noted that the 0.9100 threshold could act as an additional downside filter for the pair traders to watch during the weakness past 0.9145 while the August 2021 low near 0.9018 may challenge the USD/CHF bears past 0.9085. Meanwhile, recovery moves need to cross the previous support line from January 18, close to 0.9205 by the press time, to recall the pair buyers. Even so, the 200-EMA and the 61.8% Fibonacci retracement level of the pair’s January moves, respectively near 0.9270 and 0.9285, could probe the USD/CHF upside. USD/CHF: Four-hour chart Trend: Further downside expected
Analysis Of The AUD/USD Pair By Markets Strategist Quek Ser Leang And Senior FX Strategist Peter Chia

A Softer Risk Tone Might Hold Back Bulls From Placing Aggressive Bets Around The risk-Sensitive Aussie (AUD)

TeleTrade Comments TeleTrade Comments 01.02.2023 10:09
AUD/USD gains some follow-through traction on Wednesday amid a modest USD downtick. Bets for smaller rate hikes by the Fed continue to weigh on the buck and lend some support. The cautious market mood might cap gains for the risk-sensitive Aussie ahead of the FOMC. The AUD/USD pair builds on the previous day's goodish rebound from the 0.6985 area, or over a one-week low and gains some follow-through traction on Wednesday. Spot prices climb to the 0.7075 region during the early European session, though any subsequent move up is more likely to remain capped ahead of the key central bank event risk. The Federal Reserve (Fed) will announce its decision at the end of a two-day meeting on Wednesday and is expected to further moderate the pace of its rate-hiking cycle. Bets for a smaller 25 bps lift-off were cemented by the US wage growth data released on Tuesday, which showed that labor costs increased less than expected in the fourth quarter. The recent US macro data, however, point to a resilient economy and back the case for the Fed to stick to its hawkish stance for longer. Hence, the focus will remain glued to the accompanying policy statement and Fed Chair Jerome Powell's comments at the post-meeting press conference. Investors will look for cues about the Fed's future rate-hike path, which will play a key role in influencing the US Dollar price dynamics and determining the near-term trajectory for the AUD/USD pair. In the meantime, a modest USD downtick is seen acting as a tailwind for the major and contributing to the intraday positive move. That said, a softer risk tone - as depicted by a mildly negative sentiment around the equity markets - might hold back bulls from placing aggressive bets around the risk-sensitive Aussie. This makes it prudent to wait for a strong follow-through buying before confirming that the AUD/USD pair's pullback from the highest level since June 2022 has run its course. Traders now look to the US macro data - the ADP report, ISM Manufacturing PMI and JOLTS Job Openings - for some impetus.
Analysis Of The USD/SGD Pair By Economists At TD Securities

Analysis Of The USD/SGD Pair By Economists At TD Securities

TeleTrade Comments TeleTrade Comments 01.02.2023 10:22
USD/SGD is down ~8% from its peak in October 2022. Economists at TD Securities believe that the pair could dive below 1.30. SGD typically has a high beta to the USD “USD/SGD has broken below its medium-term uptrend (monthly chart) which may signal a new trading range after holding in the 1.31-1.45 range for the past 8 years.” “We see 1.30 as the next big support level though a break below rests more on USD weakness.” “Our bearish USD house view which sees a plunge in the USD from Q2 may spark the next big move for USD/SGD below 1.30 as SGD typically has a high beta to the USD.”
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

If German Numbers Remain Weak, The ECB Will Have To Consider Easing Up On Rates

Kenny Fisher Kenny Fisher 01.02.2023 12:52
It has been a quiet week for EUR/USD which continues to say close to the 1.09 line. The lack of activity could change in a hurry in the North American session, with the Fed rate announcement. Eurozone inflation slides in January Eurozone inflation is expected to be 8.5% in January, down from 9.2% in December and below the consensus of 9.0%. The key driver behind the decline was energy prices, which rose 17.2% in January, compared to 25.5% in December. Core CPI remained at 5.2%, a notch above the consensus of 5.1%. On a month-by-month basis, Core CPI fell by 0.8%, compared to a 0.6% gain in November and below the forecast of -0.2%. Today’s inflation report is the final key event ahead of the ECB rate decision on Thursday. It’s practically a given that the central bank will raise rates by 50 basis points, bringing the cash rate to 3.0%. After that, the pace of monetary tightening will depend largely on the strength of the eurozone economy and inflation levels. The ECB will be pleased with the drop in headline inflation but concerned that the core rate has been stickier. Germany, the locomotive of the bloc, released dismal numbers this week. Retail sales crashed, with a decline of 5.3% while GDP came in at -0.2%. If German numbers remain weak, the ECB will have to consider easing up on rates with modest hikes of 25 basis points rather than 50-bp moves. The markets are forecasting a terminal rate in the range of 3.25%-3.75%. All eyes are on the Federal Reserve, which is widely expected to raise rates by 25 basis points. This would bring the benchmark rate to 4.75%. Inflation in the US fell to 6.5% in December, marking six straight months of de-acceleration. It appears that inflation has peaked, although the Fed won’t be using the “P” word for fear of an excessive reaction from the markets. The Fed has been more hawkish about rate levels than what the markets have priced in, and if Jerome Powell reiterates this hawkish stance, the markets could be in for a cold shower which would be bullish for the US dollar. Read next: India's Adani Group May Have Passed A Key Test, Positive EU CPI Report| FXMAG.COM EUR/USD Technical EUR/USD is testing support at 1.0878. Below, there is support at 1.0826 1.0921 and 1.1034 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Metals Market Update: Decline in LME Copper On-Warrant Stocks, Zinc and Lead Surplus Continues, Nickel Market in Supply Surplus

USD/JPY Pair Drop Below 130.00, GBP/USD Is Trading Below 1.2330, The Australian Dollar Remains Generally Up

Kamila Szypuła Kamila Szypuła 01.02.2023 13:28
As investors price the Fed nearing the end of its rate hike cycle, the dollar index is far from its 20-year high of 114.78. Investors said Fed Chairman Jerome Powell's words would be watched closely. Aside from the main event of the Fed meeting, investors will also focus on the ISM manufacturing and job vacancies data due for release on Wednesday for further guidance on the state of the US economy and labor market. Moreover, the ECB and the Bank of England are expected to raise interest rates by 50 basis points (bps) on Thursday. USD/JPY USD/JPY has struggled to gain any significant traction and has fluctuated between small gains and small losses throughout the early part of Wednesday's European session. Spot prices remain below mid 130.00 as investors appear reluctant and eagerly await outcome of two-day FOMC meeting. USD/JPY pair trades below 130.00, at 129.7970. Driven by the risk associated with key central bank events, investors seem reluctant to bet on an aggressive bear market around the USD/JPY pair. In addition, comments from BoJ chairman Kuroda Haruhiko that the central bank must continue its easing policy and keep the inflation target at 2% limit the gains for the JPY. EUR/USD On Tuesday, flash readings of gross domestic product (GDP) in the euro zone in the fourth quarter (Q4) increased by 0.1% q/q against 0.0% expected and 0.3% earlier. The year-over-year printouts also showed a rosy picture for the block as it surged above the 1.8% market consensus to 1.9%, down from 2.3% previously. However, retail sales in Germany fell by 5.3%MoM in December, much worse than expected. According to data from the European Union's statistical office, Eurostat, headline inflation in the euro area fell sharply in January, while the core index remained unchanged from the previous month. Investors said that data on inflation in the euro zone are unlikely to influence Thursday's monetary decision of the European Central Bank (ECB). On Thursday, the bloc's central bank will raise interest rates by 50 bps as traders look to see if officials signal they are likely to maintain a similar pace of hikes at the March meeting, or suggest a slowdown in policy tightening. EUR/USD was little changed after the release, with the pair finding and now stuck below 1.0900. Source: investing.com Read next: India's Adani Group May Have Passed A Key Test, Positive EU CPI Report| FXMAG.COM GBP/USD Fed policy makers emphasized the need to keep interest rates at a higher level for a longer period of time in order to lower inflation. This, in turn, suggests that the Fed will continue to sound hawkish, which in turn provides some support for the US dollar and acts as wind in the sails for the GBP/USD pair. As such, investors will look to the accompanying monetary policy statement and remarks by Fed Chairman Jerome Powell at the post-meeting press conference for clues on the path ahead of interest rate hikes. This will play a key role in influencing USD price dynamics and provide a significant boost to the GBP/USD pair. Then focus will shift to Thursday's Bank of England (BoE) meeting. The cable pair was trading close to 1.2300 during the morning trading hours. It then rose above 1.2330 before falling back and trading at 1.2325. AUD/USD The Aussie pair was rising today and traded above 0.7070 in the European session. The next upward move is likely to remain limited ahead of the key US central bank risk. Overall, the Australian dollar remains generally up. Source: finance.yahoo.com, investing.com
Further Upward Price Movement Of The AUD/USD Pair Is Expected

Further Upward Price Movement Of The AUD/USD Pair Is Expected

InstaForex Analysis InstaForex Analysis 02.02.2023 08:00
The Australian dollar managed to reverse the early signs of a reversal and got above the resistance range of 0.7090-0.7130. The Marlin oscillator is now pointing upwards and the price is aiming for 0.7284, the June 2022 high. Data on building permits for December just came out this morning, it showed 18.5% growth. Also, the Bank of England and the European Central Bank are raising rates by 0.50%, which will most likely be reflected in the aussie's growth as well. On the four-hour chart, the price settled above 0.7130 and above the balance and MACD indicator lines. The Marlin oscillator has consolidated in the positive area. I expect further upward price movement.   Relevance up to 03:00 2023-02-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333946
InstaForex's Irina Manzenko talks British pound amid latest events

The Short-Term Trend Of The GBP/USD Pair Has Shifted To Growth

InstaForex Analysis InstaForex Analysis 02.02.2023 08:01
The British pound gained 54 pips yesterday, as it continues the same sideways action under resistance at 1.2420. Risk appetite was tempered by yesterday's sea of protest in Britain as about 500,000 workers joined in the day of mass action. But today the Bank of England is expected to raise the rate by 0.50% to 4.00%. Considering that the pound rose against the Federal Reserve's rate hike by 0.25%, we are waiting for the price to break through the resistance at 1.2420 and further rise to the target range of 1.2598-1.2666 (the highs of the beginning and the end of May last year). On the four-hour chart, the price surpassed the balance indicator line - the short-term trend has shifted to growth, the MACD line is close to the resistance at 1.2420, it is possible to overcome this simultaneously with the price crossing this level. The Marlin oscillator is in the positive area, just ahead is a large space for growth.   Relevance up to 03:00 2023-02-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333948
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The Price Of The EUR/USD Pair Overcame The Target Level

InstaForex Analysis InstaForex Analysis 02.02.2023 08:04
So, the Federal Reserve raised the rate by the expected 0.25%. Markets didn't seem to be enough, the dollar index fell by 0.94%, the euro gained 126 points. The speech of Fed Chairman Jerome Powell was pretty tough, he says it would be premature to declare victory against inflation, that history cautions strongly against prematurely loosening policy. The logic behind yesterday's rally is not quite clear. Perhaps investors didn't believe Powell and are counting on a sooner end to the rate hike cycle. Investors are also waiting for the European Central Bank rate hike of 0.50% today. Anyway, the price overcame the target level of 1.0990 and now it has an equally ambitious target of 1.1200. As for the strong dollar policy, which we mentioned in yesterday's review, probably the time for a decisive offensive has not come yet. The euro may very well miss 1.1270, a correction of 62% of the entire decline since January 2021. On the four-hour chart, the price has settled above both indicator lines, above 1.0990, the Marlin oscillator is in a strong rising position, it may slow down for a resumption of growth after the ECB meeting.   Relevance up to 03:00 2023-02-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333950
The EUR/USD Pair Edged Lower As Expected

Analysis Of The EUR/USD Pair Situation After The Fed Meeting

Torben Melsted Torben Melsted 02.02.2023 08:11
The FED hiked rates by 25 bps overnight, but the tone was somewhat dovish, which was unexpected. That cut the correction in wave 4 short, meaning that we only saw EUR/USD test 1.0802 and quickly push back above support at 1.0835 just to kick off much higher after the press conference where Powell was pretty dovish. The quick regain of support at 1.0835 opened the way for a strong rally in wave 5 towards 1.11 and likely closer to 1.1398 as the next upside target. Support is now seen at 1.0933 and then 1.0872, which we expect will be able to protect the downside for a continuation higher to 1.11 and 1.1398 in the days ahead.   Relevance up to 06:00 2023-02-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311087
Small factors combine to pressure credit

The Euro May Rise Further, As The Dovish Rhetoric Of The ECB Is Not Expected

Paolo Greco Paolo Greco 02.02.2023 08:26
M5 chart of EUR/USD EUR/USD continued to grow quietly during the whole third trading day of the week. Naturally, late in the evening, when the results of the US central bank meeting were announced and Federal Reserve Chairman Jerome Powell's speech took place, volatility increased. The euro grew even more. We don't want to talk about the logic of the movement. Yesterday, the euro rose after the market found out that EU inflation fell and also due to Powell's hawkish rhetoric. Once again we are facing the same situation when the fundamental or macroeconomic background does not matter for the traders. They just use any excuse to open long positions. Yesterday, according to all canons of technical and fundamental analysis, the euro was supposed to start a powerful fall. And that seems to be the reason why it didn't. EUR demonstrated some growth even despite Powell's words about the necessity to keep raising rates and refusing to pause on aggressive monetary policy. What else is there to talk about? The results of the Fed meeting may not be analyzed at all. But traders got lucky with yesterday's trading signals. At the very beginning of the European session, there was a buy signal at 1.0865-1.0868, and the pair managed to rise 40 points till the Fed meeting, which traders could get on a single deal. It was also possible to place the Stop Loss at breakeven before the results of the meeting were announced, hoping for higher profit. In this case, traders could earn about 100 pips. Anyway, the day turned out to be successful in terms of trading. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 9,500, whereas the number of short positions fell by 2,000. Thus, the net positions decreased by 7,500. Now the number of long positions is higher than the number of short positions opened by non-commercial traders by 134,000. So now the question is: how long will the big players increase their longs? From a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 52,000 (732,000 vs. 680,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD left the sideways channel, in which it was for three weeks. At least something positive from yesterday. The euro may rise further, as I don't expect the dovish results of the ECB meeting. But ironically, the euro might fall today. When no one is expecting it anymore. Anyway, be careful, because there is no logic in the pair's movements now. On Thursday, the pair may trade at the following levels: 1.0806, 1.0868, 1.0938, 1.1036, 1.1137, 1.1185, 1.1234, and also Senkou Span B lines (1.0847) and Kijun Sen (1.0917). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On February 2, the results of the European Central Bank meeting will be announced today and there will be as many as two speeches from ECB President Christine Lagarde. Judging from yesterday's events, the euro will rise in any case, but there is no logic in the pair's movements, so we can see absolutely any movement. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 05:00 2023-02-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333962
Bank of England hikes rates and keeps options open for further increases

Today's Movement Of The GBP/USD Pair Will Depend On The Decision Of The Bank Of England

Paolo Greco Paolo Greco 02.02.2023 08:29
M5 chart of GBP/USD GBP/USD also showed good growth, but failed to leave the horizontal channel bounded by the levels of 1.2288 and 1.2429. During the last few weeks, the pound was a bit more grounded than the euro and at least it was able to show a noticeable correction. The pound is also growing without a reason, but at least it corrects from time to time. Yesterday, the pound had exactly one less reason to show strong movement than the euro. The European Union published its inflation report, while there was no important data in the UK. And it doesn't matter that the EU inflation report was supposed to trigger the euro's fall, the market is inclined to buy anyway, that's why any event is interpreted against the dollar. Of course, Federal Reserve Chairman Jerome Powell's speech last night you can find some dovish notes, if you want. But then what is the point of analyzing his speech at all? Just to find dovish overtones and ignore all the hawkish statements? The hit parade of absurdity is just beginning, for today the results of the European Central Bank and Bank of England meetings will be announced. The only trading signal, which should have been really worked out, was the bounce from 1.2342, at the beginning of the US trading session. After that, the pair fell to the Senkou Span B line, and around the same time the results of the Fed meeting began to be summed up. The deal could be closed with the profit of about 25 pips. The pair even managed to settle below the Senkou Span B line and similarly to the euro, we could place a Stop Loss above this line and stay in the market. But the pair went upward, so the Stop Loss worked, and traders could earn the same 25 pips. COT report The latest COT report showed a decrease in bearish sentiment. In a week, non-commercial traders closed 6,700 long positions and 7,500 short positions. The net non-commercial position grew by 800. The net non-commercial position has been on the rise in recent months. The sentiment of large traders may soon turn bullish. Although the pound sterling has been bullish against the greenback in recent months, its growth can hardly be explained with the help of fundamental analysis. We should not rule out the possibility that the pound may fall against the dollar in the medium term as a correction is needed. Overall, the latest COT reports have been in line with the pair's movement. Since the net position is not bullish yet, the buying spree may go on for several months more. Non-commercial traders now hold 35,000 long positions and 59,000 short ones. We are still skeptical about the pair being bullish in the long term although there are technical reasons for that. However, in terms of fundamentals and geopolitics, this will unlikely be a strong and fast uptrend. H1 chart of GBP/USD On the one-hour chart, GBP/USD continues to move in a sideways channel. This is obvious on any chart. The Fed meeting provoked an increase in volatility, but the movement still took place inside the sideways channel. Therefore, the technical picture has not changed at all. Today, everything will depend on the BoE, which is the "dark horse" for the traders. On February 2, the pair may trade at the following levels: 1.1974-1.2007, 1.2106, 1.2185, 1.2288, 1.2342, 1.2429-1.2458, 1.2589, 1.2659. The Senkou Span B (1.2298) and Kijun Sen (1.2354) lines may also generate signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Thursday, the results of the BoE's meeting will be announced and also BoE Governor Andrew Bailey's speech which might provoke a new burst of activity on the market. In the US, there are only secondary reports today, which will be in the shadow of the two central bank meetings. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 05:00 2023-02-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333964
Rates Spark: Action at Both Ends of the Curve - US 10yr Treasury Yield and European Rates

Lower Curde Oil Price Support The Indian Rupee (INR)

TeleTrade Comments TeleTrade Comments 02.02.2023 09:01
USD/INR has shown a rebound move as the USD Index has gauged an intermediate cushion around 100.50. Fresh signals of a decline in inflation projections indicate that the Fed might pause the rate hike cycle. The Indian government has trimmed its fiscal deficit target to 5.9% of GDP below the prior target of 6.4%. The USD/INR pair has rebounded after dropping to near 81.65 in the Asian session. The asset has found demand as the US Dollar Index (DXY) has shown signs of a pullback move after refreshing its nine-month low at 100.50.  The USD Index is still in an extremely negative trajectory, therefore, the pullback move could be capitalized as a selling opportunity by the market participants. S&P500 futures are holding the majority of their extra gains recorded in the Tokyo session above the stellar gains recorded on Wednesday, portraying that the risk-appetite theme is extremely solid. The demand for US government bonds is declining, which has pushed 10-year US Treasury yields above 3.41%. Read next: India's Adani Group May Have Passed A Key Test, Positive EU CPI Report| FXMAG.COM In its interest rate decision, the Federal Reserve (Fed) slowed down its policy tightening pace again to 25 basis points (bps) after slowing it already to 50 bps in December’s meeting. Fed chair Jerome Powell has confirmed that the policy tightening cycle will continue for now as the central bank wants to strengthen itself in the battle against inflation. While the street is expecting that the Fed might pause its interest rate hiking spree due to the availability of various evidence of further inflation softening. On the Indian rupee front, Union Budget presented by Finance Minister Nirmala Sitharaman failed to provide strength to the Indian equities. According to the Fiscal Budget 2023-24, the administration has increased the scale of tax slabs, which will support individuals having annual earnings up to Rs. 7 lakhs. Apart from that, the government has trimmed the Fiscal Deficit target to 5.9% of the Gross Domestic Product (GDP) from the 6.4% announced in the prior period.  A lower fiscal deficit target might strengthen the Indian Rupee ahead. Meanwhile, the oil price has turned sideways after a recovery move from below $76.50. On Wednesday, the oil price plunged after the United States Energy Information Administration (EIA) reported a build-up of oil stockpiles by 4.14M for the week ending January 27. It is worth noting that India is one of the leading importers of oil and lower oil price support the Indian rupee.
The AUD/USD Pair’s Downside Remains Off The Table

The AUD/USD Pair’s Downside Remains Off The Table

TeleTrade Comments TeleTrade Comments 02.02.2023 09:02
AUD/USD clings to mild gains at multi-day top, sidelined of late. Australia Building Permits came in firmer during December. Market sentiment dwindles as traders lick Fed-induced wounds ahead of ECB, BoE. US Factory Orders, hints for Friday’s NFP could entertain Aussie pair traders. AUD/USD remains sidelined at the highest levels since June 2022, mildly bid near 0.7140 during early Thursday, as bulls take a breather after the biggest daily jump in a month. In doing so, the risk-barometer pair portrays the market’s inaction while keeping the Federal Reserve (Fed) inspired gains. Other than the Fed’s dovish rate hike, firmer prints of Aussie housing data also favor the AUD/USD buyers. That said, Australia’s Building Permits rose 18.5% MoM and improved to -3.8% YoY in December versus -9.0% and -15.1% respective priors. Elsewhere, the Fed announced a 0.25% rate hike and matched the market forecast. However, the interesting part was lying in the Monetary Policy Statement which stated that the inflation “has eased somewhat but remains elevated”. Following the initial Fed announcements, the US Dollar paused the early Wednesday’s rebound. However, major moves took place on Fed Chair Jerome Powell’s comments  as he said “We can declare that a deflationary process has begun.” The policymaker also accepts the need for rate cuts during late 2023 if inflation comes down much faster. It should be observed that Fed Chair suggested that a couple more rate hikes are needed to reach the policy pivot but markets seem to ignore the fact. As the Federal Open Market Committee (FOMC) came out dovish, Wall Street rallied and the US 10-year Treasury yields slumped the most in two weeks while testing the lowest levels in a fortnight. Further, the S&P 500 Futures print mild gains around the highest levels since August 2022, tested the previous day. Looking ahead, AUD/USD traders may witness a lackluster day ahead of the monetary policy meetings of the European Central Bank (ECB) and the Bank of England (BoE) as they both are likely to propel the market moves. In addition to that, US Factory Orders for December, were expected 2.3% versus -1.8% prior and the US Preliminary Nonfarm Productivity for the fourth quarter (Q4), expected 2.4% versus 0.8% prior. Above all, Friday’s US jobs report for January will be crucial to follow for clear directions. Technical analysis Although the overbought RSI tests AUD/USD bulls, the pair’s downside remains off the table unless witnessing a daily closing below the six-month-old horizontal support surrounding 0.7130-25.
Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

The USD/CAD Pair Bulls Are Likely To Remain Skeptical

TeleTrade Comments TeleTrade Comments 02.02.2023 09:04
USD/CAD holds lower grounds near 2.5-month bottom, fades bounce off 200-EMA of late. Clear downside break of short-term key support line favors sellers. 50-EMA holds the key to bull’s conviction, 1.3700 appears a tough nut to crack for them. USD/CAD remains pressured around the lowest levels since mid-November 2022 as it pokes the 200-day Exponential Moving Average (EMA) during early Thursday. In doing so, the Loonie pair prints mild losses during the three-day losing streak. It’s worth noting that the quote’s sustained trading below the 50-EMA and a clear break of the eight-month-old ascending support line seems to keep the USD/CAD bears hopeful. Also favoring the sellers is the absence of an oversold RSI (14) line. That said, the Loonie pair bears are very much capable of breaking the aforementioned key 200-EMA support surrounding 1.3260. However, multiple levels marked since July 2022, surrounding 1.3230-20, portray strong support for the USD/CAD sellers to break if they wish to keep the reins. Following that, a 61.8% Fibonacci retracement of the pair’s April-October 2022 run-up near the 1.3000 psychological magnet will be a crucial level to lure the USD/CAD bears. On the contrary, a daily closing beyond the support-turned-resistance line from June 2022, close to 1.3320 by the press time, could activate the pair’s corrective bounce. Even so, the USD/CAD bulls are likely to remain skeptical unless witnessing a daily closing beyond the 50-EMA level surrounding 1.3450. In a case where the quote crosses the 1.3450 hurdle, the odds of its rally toward the multiple hurdles nearing 1.3700 can’t be ruled out. USD/CAD: Daily chart Trend: Further downside expected
Central Banks and Inflation: Lessons from History and Current Realities

The Mass Strikes By Various UK Workers' Unions Exert Downside Pressure On The GBP/JPY Prices

TeleTrade Comments TeleTrade Comments 02.02.2023 09:11
GBP/JPY seesaws around a fortnight low during three-day downtrend. US 10-year Treasury bond yields dropped the most in two weeks on dovish Fed. Hawkish concerns from BoJ, downbeat UK data and workers’ strikes weigh on prices. BoE is expected to announce 0.50% rate hike but hints for policy pivot will be crucial to watch. GBP/JPY remains depressed around 159.20 even as further downside stalls ahead of the key Bank of England (BoE) Monetary policy announcements, up for publishing on Thursday. That said, the cross-currency pair traces a corrective move in the Treasury bond yields while portraying the market’s cautious mood ahead of the key events. It’s worth noting that the US 10-year Treasury yields slumped the most in two weeks while testing the lowest levels in a fortnight the previous day after the US Federal Reserve (Fed) announced its dovish hike of 0.25%. The US central bank unveiled receding fears of inflation and Chairman Jerome Powell showed readiness for cutting the rates if inflation drops faster. The same propelled the risk-on mood and favored Wall Street bulls. Other than the strong yields, hawkish comments from Bank of Japan (BoJ) officials also favored the GBP/JPY bears. That said, Bank of Japan's Deputy Governor Masazumi Wakatabe has said the BoJ will continue to conduct monetary policy to achieve 2% inflation accompanied by wage growth. The Japanese central bank has recently conducted multiple bond market moves to defend the Yields Curve Control (YCC) policy. Elsewhere, the mass strikes by various UK workers' unions challenge the already struggling economy and exert downside pressure on the GBP/JPY prices. “Up to half a million British teachers, civil servants, and train drivers walked out over pay in the largest coordinated strike action for a decade on Wednesday, with unions threatening more disruption as the government digs its heels in over pay demands,” said Reuters. On the same line, the downbeat prints of S&P Global/CIPS UK Manufacturing PMI, which confirmed a consecutive sixth monthly contraction in factory output by flashing 47.0 figure versus 46.7 initial forecasts also pleased the GBP/JPY bears. “Weak demand from clients at home and abroad plus strong price inflation and a shortage of raw materials and staff all weighed on production. Brexit and port problems hurt exports while demand from China was particularly weak,” S&P Global said per Reuters. Against this backdrop, the S&P 500 Futures print mild gains while Japan’s Nikkei 225 follows the suit as traders await another round of central bank comments. That said, the BoE’s 0.50% rate hike is already given and hence the Cable sellers will be more interested in hearing about the easy rate hikes, as well as policy pivot. Other than the BoE, risk catalysts and bond market moves will also be crucial for the GBP/JPY traders. Technical analysis A sustained reversal from the 50-day Exponential Moving Average (EMA), around 161.55 by the press time, directs GBP/JPY bears toward an upward-sloping support line from late September 2022, close to 157.40.
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

The USD/JPY Pair Dropped To Its Lowest Levels In Two Weeks

TeleTrade Comments TeleTrade Comments 02.02.2023 09:16
USD/JPY prints three-day losing streak despite recent bounce off weekly low. BoJ’s Wakatabe appears determined to tame inflation, praises YCC move. US 10-year Treasury bond yields dribble around two-week low. Second-tier US data, other central bank announcements can please Yen bears before Friday’s US NFP USD/JPY pares intraday losses around 128.60 during the three-day downtrend as the market slips into consolidation mode ahead of the second round of central bank dossier amid early Thursday. The Yen pair dropped to its lowest levels in two weeks earlier in the day while extending the Federal Reserve (Fed) induced losses amid downbeat Treasury bond yields. That said, the US 10-year Treasury yields slumped the most in two weeks while testing the lowest levels in a fortnight the previous day after the US Federal Reserve (Fed) announced its dovish hike of 0.25%. The US central bank unveiled receding fears of inflation and Chairman Jerome Powell showed readiness for cutting the rates if inflation drops faster, which in turn drowned the US Dollar and yields. The same propelled the risk-on mood and favored Wall Street bulls. On the other hand, hawkish comments from Bank of Japan (BoJ) officials also favored the GBP/JPY bears. That said, Bank of Japan's Deputy Governor Masazumi Wakatabe has said the BoJ will continue to conduct monetary policy to achieve 2% inflation accompanied by wage growth. The Japanese central bank has recently conducted multiple bond market moves to defend the Yields Curve Control (YCC) policy. BoJ’s Wakatabe was recently heard praising the YCC move of the BoJ. It should be noted, however, that the comments from BoJ’s Wakatabe also ruled out the market’s fears of any immediate move, which in turn allowed USD/JPY to lick the Fed-inflicted wounds. Amid these plays, the S&P 500 Futures print mild gains while Japan’s Nikkei 225 follows the suit as traders await another round of central bank announcements, this time from the European Central Bank (ECB) and the Bank of England (BoE). In addition to the central bank news, US Factory Orders for December, expected 2.3% versus -1.8% prior, and the US Preliminary Nonfarm Productivity for the fourth quarter (Q4), expected 2.4% versus 0.8% prior. Above all, Friday’s US jobs report for January will be crucial to follow for clear directions. Technical analysis The successful downside break of the 13-day-old ascending trend line, around 129.40 by the press time, directs USD/JPY bears towards the previous monthly low of near 127.20.
GBP/USD Trading Plan: Bulls Eyeing Further Growth, Resistance Level Holds Key, COT Report Signals Interest Rate Expectations

The Kiwi Pair (NZD/USD) Keeps Gains After Fed Meeting

TeleTrade Comments TeleTrade Comments 02.02.2023 09:23
NZD/USD retreats from the eight-month high as bulls take a breather ahead of the second round of central bank dossier during early Thursday. In doing so, the Kiwi pair keeps the Federal Reserve (Fed) inspired gains around 0.6530 by the press time. That said, the Fed’s dovish rate hike triggered the strongest bullish options market sign for the NZD/USD traders. A one-month risk reversal (RR) of the NZD/USD pair, a ratio of call options versus put options, prints a +0.080 figure at the latest. With this, the Daily RR prints not only snap a two-day winning streak but also mark the highest level in three weeks. It’s worth noting, however, that the weekly RR still remains negative, suggesting the bear’s dominance, for the third time in a row as it prints -0.165 figure at the latest. Also read: NZD/USD struggles to surpass 0.6530, upside remains favored ahead of US NFP
If The Bank Of England Hike Interest Rates Again Later This Month Will Exert Downward Pressure On The EUR/GBP Cross

The Key Central Banks Event Risk Keeps A Lid On Further Gains For The EUR/GBP Cross

TeleTrade Comments TeleTrade Comments 02.02.2023 09:29
EUR/GBP scales higher for the fourth straight day and touches a fresh multi-month top. Expectations for additional jumbo rate hikes by the ECB continue to underpin the Euro. Speculations that the BoE is nearing the end of the rate-hiking cycle weigh on the GBP. Traders now seem reluctant as the focus shifts to the BoE and the ECB policy decisions. The EUR/GBP cross gains traction for the fourth successive day and climbs to the 0.8900 neighbourhood or its highest level since late September on Thursday. The shared currency continues to draw support from expectations for additional jumbo rate hikes by the European Central Bank (ECB) in the coming months. The bets were reaffirmed by the recent hawkish commentary by several ECB officials, which, in turn, acts as a tailwind for the EUR/GBP cross. The British Pound's relative underperformance could further be attributed to speculations that the Bank of England (BoE) is nearing the end of the current rate-hiking cycle. That said, the prevalent US Dollar selling bias lends some support to the Sterling Pound. Furthermore, signs of inflationary pressures in the Eurozone might have forced investors to scale back expectations for a more aggressive policy tightening by the ECB. This, along with reluctance ahead of the key central bank event risk, keeps a lid on any further gains for the EUR/GBP cross. This warrants some caution before positioning for an extension of the ongoing move-up. Both the BoE and the ECB are scheduled to announce their policy decisions during the mid-European session this Thursday. The market focus, however, will be on clues about the future rate hike path, which will determine the next leg of a directional move for the EUR/GBP cross. Nevertheless, the fundamental backdrop favours bullish traders, though a sustained move beyond the 0.8900 round-figure mark is needed to support prospects for a further near-term appreciating move.
AUD: RBA Maintains Rates as New Governor Upholds Continuity

Meta Announced A Lower-Than-Expected Operating Expense, Gold Reached A Fresh Cycle High

Saxo Bank Saxo Bank 02.02.2023 09:53
Summary:  Traders felt that the FOMC failed to push back sufficiently against market expectations for the Fed to reach peak rates soon and begin cutting rates by year end, which drove a fresh rally in equities and took the US dollar to new cycle lows almost across the board. Let’s see if the key US data up on Friday further encourages the USD bears. In the meantime, the Bank of England and ECB are on tap today. What is our trading focus? Equities: Momentum continues on Powell declaring part victory over inflation While the Fed is still cautious and wants to send hawkish signals including a goal of moving the policy rate to 5% or slightly more, Powell’s comments about inflation is beginning to ease was extrapolated in the equity market. S&P 500 futures rallied another 1% in yesterday’s session and this morning they have opened just below the 4,150 level suggesting traders are eyeing the 4,200 level which was the approximate air pocket area last time S&P 500 futures visited this area back in August of last year. The truth is that Powell did say anything new but as long as the message was not too hawkish the equity market had the excuse it needed for continuing higher. Adding to positive sentiment was Meta’s better than expected outlook announced after the US cash equity market closed. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) little changed in lackluster trading The Hang Seng Index advanced modestly on the back of a strong rally in U.S. equities overnight and less upward pressure on domestic interest rates. Baidu (09888:xhkg), rising 7.3%, extended its strong recent gains on the ChatGPT concept and following BlackRock raised its stake to 6.6% from 5.4% in the Chinese search engine giant. Baidu was the best-performing stock on the Hang Seng Index for the second day in a row. Li Auto (02015:xhkg) climbed 2.4% after reporting delivery of 15,141 units of EV in January,  up 23% Y/Y. On the other hand, NIO (09866:xhkg) slid 4.3% following a 12% Y/Y decline in delivery to 9,652 units in January and on reports that the Chinese EV maker is cutting prices. Chinese mobile gaming stocks traded in the Hong Kong bourse soared with Forgame (00484:xhkg) leading the charge and jumping over 80%.  CSI 300 traded sideways and was flat to yesterday’s close as of writing. ChatGPT concept, eCommerce, Chinese white liquor, machinery, and semiconductor stocks outperformed. FX: USD bears back in action after dovish read of FOMC The USD was weaker across the board after the Fed Chair Powell stayed away from pushing back aggressively on the easing priced in by the markets for this year or the loosening of financial conditions. EURUSD broke above the 1.0930 resistance and was trading above 1.1000 in the Asian session. The ECB may need to match market pricing for further hawkishness today to sustain this level. An interesting test for EURGBP as it trades into the upper reaches of its range near 0.8900, by the way, on possible relative surprises from the ECB and Bank of England meetings today. USDJPY slumped back below 128.50 with focus turning to BOJ Governor nominees to replace Kuroda, who leaves in early April. AUDUSD rose to 0.7150 but USDCAD was choppier as lower oil prices weighed on the loonie. Crude oil (CLH3 & LCOJ3) starting February on the backfoot Crude oil started February by sliding more than 2.5% on Wednesday after US data showed a further inventory built. Crude stocks rose 4.1 million barrels, its sixth consecutive weekly build, to the highest since June 2021. OPEC+ meanwhile reaffirmed their commitment to current output quotas after meeting on Wednesday. It is monitoring the impact of China’s reopening on demand. On February 5, the EU will ban almost all seaborne imports of Russian refined products, and just like Russian crude, diesel is already selling at a heavy discount of more than 25 dollars a barrel. Oil staged a partial, but weak post-FOMC rebound as the dollar weakened. The Brent prompt spread remains in a bullish backwardation structure which points to some underlying strength. Gold (XAUUSD) breaks higher on dovish Fed Gold reached a fresh cycle high after the Fed announced a 25bp hike and Chairman Powell said the committee had concluded the disinflationary process had started, and despite using the phrase “ongoing increases” he failed to push back enough on easing financial conditions. As a result, the market concluded the end of the rate hike cycle is near, and this focus helped weaken the dollar to a fresh cycle low while supporting a rally in gold to $1957, its highest since mid-April 2022. Next on watch will be $1963, the 76.4% retracement of the 2022 correction, following which there is no major level of resistance before the psychologically important $2000 level. Minor support at $1935, $1920 ahead of $1912. Silver (XAGUSD) meanwhile managed, for a change, to keep up with gold resulting in the XAUXAG ratio declining to 81 from above 82.5. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) dropped as hopes for rate cuts in H2 heightened See more on last night’s FOMC dovish meeting below, but the general read is that Fed Chair Powell failed to push back against sufficiently hard against market expectations that the policy rate will soon peak and economic developments will see the Fed in easing mode in the second half of this year.  AFter a soft ISM Manufacturing data point and weak ADP payrolls growth, he yield on the 2-year and the 10-year tumbled 9bps each to 4.11% and 3.42% respectively. A stronger JOLTS job openings data (note: for December) failed to garner much attention. What is going on? Market reads FOMC monetary policy statement and presser as dovish. The Fed delivered a 25bp rate hike, bringing the Fed Fund target to 4.50%-4.75% as widely anticipated and a statement largely unchanged from the previous one, reiterating that “ongoing increases” in the policy Fed Fund target “will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive,” The strong market reactions came from the response to Powell’s dovish statement in the post-meeting press conference. Powell said the Fed “can now say, I think for the first time, that the disinflationary process has started” though he cautioned that “the job is not fully done.”  Powell’s remarks saw the June-Dec 2023 SOFR spread widen to 54.5 bps, fully pricing in 50 bps of rate cuts in the 2nd half of 2023, following another 25bp increase in March. The SOFR futures curve implies further 143 bps of rate cuts in 2024. These implied rates bring the Fed Fund target to 4.25%-4.50% by Dec 2023 versus the Fed’s December dot plot of 5%-5.25%, and to 2.75%-3.00% by December 2024, that is 125bps below the Fed’s projection of 4%-4.25% Meta earnings: greed triumph idealism Mark Zuckerberg did listen to investors after all acknowledging that the idealism of the Metaverse and the huge capital expenditures it requires were too much given the environment. Meta announced a lower-than-expected operating expense and capital expenditures level for FY23 and that was exactly what the market wanted to hear. The shares rallied 20% in extended trading on this aggressive cut in expected expenses. In Q4, the company lost another $4.3bn on its Reality Labs segment (Metaverse bet), but revenue was higher in this segment and overall, in the entire advertising business. On the Q1 outlook revenue guidance was $26-28.5bn vs est. $27.3bn indicating a slightly better performance than Snap indicated yesterday for Q1. Meta also authorized the share buyback programme to be increased to $40bn. US ISM manufacturing was weaker than expected, but Prices Paid above expectations. ISM manufacturing declined for a fifth consecutive month to 47.7 from 48.4, short of the consensus of 48.0. While prices paid lifted to 44.5 (exp. 39.5, prev. 39.4), suggesting upside pressures in inflation sustaining, production and new orders fell to 48.0 (prev. 48.6) and 42.5 (prev. 45.1), respectively. Employment was also softer but still remained above the 50-mark at 50.6 from 50.8 previously. JOLTS job openings in December ramped back up to 11.012mln from the prior 10.44mln, surprising expectations for a fall to 10.25mln and now at their highest level since July. Overall, inflation risks are not going away yet, while growth concerns seems to be settling as well. Eurozone headline inflation softens more than expected, but core inflation fails to drop. January headline inflation data in the Eurozone came in softer at –0.4% MoM and 8.5% YoY from 9.2% YoY mostly underpinned by softer energy inflation, which remains high at 17.2% YoY (vs. 25.5% YoY in December). While the trend seems encouraging, inflation remains elevated at the core at +5.2% YoY versus the small drop to 5.1% expected. This data is unlikely to deter the ECB from staying on course with further tightening. A delayed German inflation print for January is due next week. Read next: USD/JPY Pair Drop Below 130.00, GBP/USD Is Trading Below 1.2330, The Australian Dollar Remains Generally Up| FXMAG.COM China’s President Xi called for moving faster to establish the new development pattern In the second study session of the Chinese Communist Party’s new Politburo, China’s President Xi called for the country to move faster toward establishing a new development pattern, a concept that he first introduced in April 2020. He emphasized the importance of boosting domestic demand and deepening supply-side structural reform. President Xi also pledged to bring forward the construction of more new infrastructure projects and focus on the real economy and new industrialization. He also called for strengthening the measures against monopoly and unfair competition, as well as guiding and supervising the healthy development of private capital according to the law. The readout from the Politburo meeting mentioned neither “preventing disorderly expansion of private capital” nor “common prosperity”. Shell beats on Q4 earnings One of Europe’s largest oil and gas majors reported Q4 adjusted profit of $9.8bn vs est. $8.3bn driven by higher-than-expected oil and gas output for the quarter. Q4 dividends are lifted to $0.2875 per share vs est. $0.285. What are we watching next? ECB and Bank of England up today. The market read on the Fed was dovish after fearing that Powell might be on the warpath against market expectations. Expectations for today’s ECB meeting are rather different as hotter core CPI reads in Europe have the market fearing considerable further ECB tightening – but can the ECB deliver beyond market expectations, with more than 100 basis points after today’s 50 bps hike expected at coming meetings?. After last night’s reaction to the FOMC meeting, the 2-year yield in 2-year's time for the EU and US is virtually at parity coming into today’s ECB meeting. The Bank of England meeting today is less certain, as the BoE may try to sneak in more cautious guidance, given the weak outlook for the UK economy, even if that outlook has improved. Besides today’s expected 50 basis points hike, watch for a potential downshift in guidance to less pre-commitment to further tightening, backed up by possible adjustments to inflation forecasts that are also due for a refresh today. The EURGBP in an interesting pair to watch today for relative central bank surprises as it pushes towards the top of its range into 0.8900. Earnings to watch Today is the week’s big earnings day with key earnings from Apple, Alphabet, and Amazon all being released after the US market close. With the animal spirits unleashed this year and helped by Powell’s comments yesterday better than expected results from these three technology giants could unleash a rally into the weekend. Today: DSV, Dassault Systemes, Siemens Healthineers, Infineon Technologies, Deutsche Bank, Sony, Takeda Pharmaceutical, Shell, ING Groep, Banco Santander, Siemens Gamesa Renewable Energy, Nordea, Roche, ABB, Apple, Alphabet, Amazon, Eli Lilly, ConocoPhillips, Qualcomm, Honeywell, Starbucks, Gilead Sciences, JD.com, Ford Motor, Ferrari Friday: Coloplast, Sanofi, Intesa Sanpaolo, Denso, CaixaBank, Naturgy Energy, Assa Abloy, Regeneron Pharmaceuticals Economic calendar highlights for today (times GMT) 1200 – UK Bank of England Rate Announcement1230 – UK Bank of England Governor Bailey press conference1230 – US Jan. Challenger Job Cuts1315 – ECB Rate Announcement1330 – Q4 Unit Labor Costs / Nonfarm Productivity1330 – Czech National Bank Rate Announcement1330 – US Weekly Initial Jobless Claims1345 – ECB President Lagarde Press Conference1500 – US Dec. Factory Orders1530 – EIA's Weekly Natural Gas Storage Change1730 – Swiss National Bank’s Thomas Jordan to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – February 2, 2023 | Saxo Group (home.saxo)
Issue on the US debt ceiling persists, Joe Biden goes back to the US

FX Daily: A more relaxed Fed powers the rally

ING Economics ING Economics 02.02.2023 10:20
The dollar has broken to new lows for the year after a relaxed-sounding Fed Chair Powell said there were the first clear signs of disinflation. He also failed to push back too aggressively on lower bond yields. Attention turns to Europe, with rate meetings in the eurozone, the UK, and the Czech Republic. Expect European FX to remain bid and the dollar offered The dollar broke to new lows for the year after the Fed's press conference USD: Phlegmatic Powell offers little pushback against the rally The dollar was relatively unchanged on the release of last night's FOMC statement, but Fed Chair Powell's press conference comments sent it around 1% lower across the board. Listening to the press conference, a few things that stood out to us were: for the first time, we can see the disinflation process has started, a refusal to push back against the softening in financial conditions in the form of lower bond yields and higher equities, a data-dependent approach to what the Fed may do with their dot plots in March (lower the expected peak in the tightening cycle?) a near Goldilocks scenario where inflation can come down, while unemployment does not have to rise US rates softened on the press conference, with pricing for the Fed funds rate in December 2023 being cut by 10bp to 4.40%. In fact, one can argue that if US rates are not going to be cut as much as the market expects later this year, it will be because of decent growth, rather than sticky inflation. No wonder equity markets liked the press conference and the dollar softened as investors chased growth stories. As we mentioned in the FOMC review, lower volatility in the rates space will be feeding into lower FX volatility. The MOVE index, an index of implied volatility across the US Treasury curve has dropped back to levels last seen in March 2022. Assuming no major fireworks from today's ECB/BoE meeting or tomorrow's US jobs report, lower volatility will support the carry trade. Here, we like the Mexican peso where high risk-adjusted carry and, unlike the CEE high yielders, positive real interest rates should keep the peso very much in demand. Positioning is probably the biggest factor preventing a further dollar decline right now, but the benign macro story does favour DXY continuing to drift lower to the 100 area. Chris Turner EUR: Too early for the ECB to soften its hawkish stance The European Central Bank announces its policy decision at 1415CET today and President Christine Lagarde holds her press conference at 1345CET. A 50bp hike is widely expected as is a hawkish message that will support market pricing of a further 75-100bp of tightening into the summer. Please see our ECB preview here and also the key factors that will drive FX and rates markets here. Our rates strategists think that Lagarde could push back against 2024 easing expectations and see eurozone rates rise in the five-year part of the curve.  EUR/USD opens in Europe above 1.10 - powered by last night's benign FOMC meeting and press conference. Two-year EUR:USD swap differentials have narrowed into 108bp - the narrowest advantage for dollar rates since late 2021. As we discussed in our EUR/USD forecast revision article, a sharp narrowing in rate differentials stands to become a bigger driver of EUR/USD this year and should carry it to the 1.15 area in the second quarter. For the shorter term - there is not much resistance now until the 1.12 area. But buy-side positioning is the longest in the euro since the summer of 2021 meaning that the rally could prove hard work. The EUR/USD story is positive, however. Chris Turner The Danish central bank (DN) is set to follow the ECB with a rate hike today. There has been increasing speculation that the DN will hike by 10bp less than the ECB to widen the EUR-DKK rate gap. EUR/DKK is trading around 7.4400, so it currently has a cushion against the lower bound of the peg band (which is around 7.4360). With inflation running at 8.7% in Denmark, we think there is a higher chance that the DN will prioritise fighting inflation for now and follow the ECB with a 50bp hike, which should keep a cap on EUR/DKK for now. After all, the prospect of another 50bp ECB hike in March means that the DN will likely have another chance to under-deliver relatively soon, should EUR/DKK come under fresh pressure and FX intervention start to appear unsustainable.  Francesco Pesole GBP: Again, too soon for the BoE to go soft on inflation 1300CET should see the Bank of England hike the Bank Rate 50bp to 4.00%. Governor Andrew Bailey holds a press conference at 1330CET. Please see our full BoE preview here - including voting patterns for the nine MPC members. Some market participants see a pattern of the BoE hiking forcefully and having a hawkish statement, but treading more dovishly in the press conference. On balance, we think Governor Bailey will not want to push back against expectations for further hikes to 4.25/4.50% this summer but may push back against the cut starting to be priced for December. Benign global conditions are supportive for the risk-sensitive sterling and suggest GBP/USD could make a run at the 1.2450/2500 area this week. EUR/GBP has drifted higher again. On balance, we would favour continued outperformance given the greater scope for convergence in eurozone and sterling rates at the shorter end of the curve. EUR/GBP may end the quarter near 0.89, but push up to the 0.90/91 area later in the year. Chris Turner CZK: CNB to confirm wait-and-see approach Today, the Czech National Bank meeting is on the agenda in the region. We expect rates and the FX commitment to remain unchanged, so the main focus will be on the central bank's new forecast and the governor's press conference. With strong rate cut expectations priced in, the main question for today will be what the CNB's expectations are for January inflation, which will set the inflation path for this year. In general, the new forecast should show a higher inflation trajectory compared to the November version, but at the same time, the koruna is more than 3% stronger compared to CNB expectations. The Czech koruna has reached its strongest levels in more than a decade in recent weeks and is, in our view, the most overweight currency position held by investors in the region at the moment. We believe the main driver right now is falling gas prices and improving sentiment in Europe rather than local factors. However, the central bank plays an important role in determining the koruna. Thus, any hint of an end to the FX intervention regime would likely lead to a sharp depreciation. Overall, however, we believe that the CNB and the koruna do not have too much to offer at the moment. Although gas prices may push to stronger levels in the short term, we think the koruna is too strong currently and rather expect a return to the 24.00 EUR/CZK level. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
US Inflation Eases, but Fed's Influence Remains Crucial

Powell Admitted That The US Economy Is Mow In An Era Of Disinflation

Jakub Novak Jakub Novak 02.02.2023 10:53
Euro rose above 1.1000 after the Fed signaled a change in their stance on monetary policy. Their statements during yesterday's meeting were more dovish compared to December, with interest rates increasing by only 25 basis points to a range of 4.5%-4.75%. Powell was not objectively dovish At first, markets did not react much to the news as everyone was waiting for the speech of Jerome Powell. But when the Fed Chairman confirmed that they will no longer be aggressive in terms of interest rates, risk appetite surged. The decision was kind of in line with what everyone was expecting, that is, a more optimistic view of inflation and the economy. Of course, Powell was not objectively dovish, but neither was he overly hawkish, which was enough for the market. Speaking to reporters on Wednesday, Powell said they are forecasting "a couple more" rate hikes, but are ready to adjust their plans if price pressures eased faster than expected. When asked about easing conditions in financial markets that could complicate the central bank's path to return to its 2.0% inflation target, he did not sound particularly concerned. The 25 basis point hike The 25 basis point hike that was made yesterday was another step towards policy normalization after a half-point rate hike in December and four giant hikes of 75 basis points before that. Most likely, the soft inflation data in recent months has been persuasive enough for the Fed to consider suspending their rate hike campaign. Although the committee continues to cite high prices, the hint of two more 25 basis point hikes confirms market expectations of a final rate hike of 5.25%. Powell During the press conference, Powell admitted that the US economy is now in an era of disinflation with cooling price pressures. He stressed that more data is needed before they can declare victory, but did not specify how much they need to ensure that inflation is on the right track.  EUR/USD In terms of the forex market, demand for euro surged, but buyers need to protect 1.1000 in order to maintain the chance of rising above 1.1050. Possible price levels in such a situation are 1.1090 and 1.1125. In the event of a decline, EUR/USD could move below 1.1000 and head towards 1.0960 and 1.0920. GBP/USD For GBP/USD, the sideways trend persists, so buyers need to return above 1.2420 to regain their advantage. Only the breakdown of this resistance level will strengthen the hope of a rise towards 1.2470, after which it will be possible for the pair to reach 1.2540. If pressure returns and sellers take control of 1.2350, the pair will fall to 1.2290 and 1.2230.   Relevance up to 08:00 2023-02-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333996
Deciphering the Economic Puzzle: Unraveling Britain's Mixed Signals

The UK economy could show a good chance of a shallow recession

Jakub Novak Jakub Novak 02.02.2023 11:00
Market players are expecting another surge in pound as the Bank of England is likely to raise interest rates today due to the persistently high inflation in the UK. The bank has no other choice but to do it, especially with the current actions of the government. Rate hike Most likely, the Bank of England will raise rates by half a percentage point to 4%, which is the highest since 2008. They will also release forecasts for inflation and economic growth, possibly indicating the chances of a shallow recession. The recent strikes and demonstrations in the UK Another data to be expected is the review on wage growth, which is actually the reason for the recent strikes and demonstrations in the UK. Its figure could determine whether inflation will remain high as another record hike will force companies to raise prices and consumers to expect further increases in their incomes. GBP/USD  Of course, there is a chance that the central bank will take a different path, increasing rates by only 25 basis points. That would lead to a decline in demand, pushing GBP/USD down rather sharply. In terms of the forex market, the sideways trend in GBP/USD persists, so buyers need to return above 1.2420 to regain their advantage. Only the breakdown of this resistance level will strengthen the hope of a rise towards 1.2470, after which it will be possible for the pair to reach 1.2540. If pressure returns and sellers take control of 1.2350, the pair will fall to 1.2290 and 1.2230. EUR/USD For EUR/USD, demand has surged, but buyers need to protect 1.1000 in order to maintain the chance of rising above 1.1050. Possible price levels in such a situation are 1.1090 and 1.1125. In the event of a decline, the pair could move below 1.1000 and head towards 1.0960 and 1.0920.   Relevance up to 08:00 2023-02-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333998
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

The Australian Dollar Surged Against Its US Counterpart After Fed Meeting

Kenny Fisher Kenny Fisher 02.02.2023 11:56
After a sluggish start to the week, AUD/USD bounced back on Wednesday with gains of 1.18%. The pair has edged lower on Thursday and is trading at 0.7137 in the European session. Powell sends US dollar lower The Federal Reserve raised rates by 25 basis points at the Wednesday meeting, as expected. The Fed noted that inflation has eased but reminded listeners that it remained much higher than the 2% target. Jerome Powell signaled that more rate hikes are coming and said he did not expect to cut rates this year. Sounds hawkish, right? Well, the US dollar initially recorded gains but headed lower after Powell acknowledged that the disinflation process had begun, which was sweet music to the ears of the financial markets. The result was a dovish hike and the Australian dollar surged against its US counterpart. The US dollar index is in retreat and has fallen to 100.99. There are two more inflation reports ahead of the Mar. 22 meeting and if they show inflation continues to fall, the Fed could wrap up the current rate-tightening cycle at that meeting. Besides inflation, the Fed is focused on employment data, which will make Friday’s nonfarm employment report an important factor in the Fed’s rate plans. In December, nonfarm payrolls fell from 256,000 to 223,000 and the downturn is expected to continue, with an estimate of 190,000 for January. The Reserve Bank of Australia meets next week and is expected to deliver a modest 25-basis point hike. The cash rate is currently at 3.10% and the markets are estimating that the peak rate will rise to somewhere between 3.6%-3.85%. This means that more hikes are on the way after February, but the pace of the rates will be data-dependent, especially on inflation reports. Read next: Resumption Of Cooperation Between Airbus And Qatar Airways| FXMAG.COM AUD/USD Technical AUD/USD faces resistance at 0.7181 and 0.7282 0.7071 has switched to support, followed by 0.7000 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Long-Term Yields Soar Amidst Hawkish Fed: Will They Reach 5%?

The ECB Interest Rate Hike Of 50bp Has Already Been Taken Into Account Investors Await Guidance About March Meeting

Jakub Novak Jakub Novak 02.02.2023 13:18
The European Central Bank will increase interest rates by 0.5 percent once more today, but investors will be more focused on any indications of how the cost of borrowing will change following this week's meeting. Figures from Tuesday may change the officials' minds The Federal Reserve System's decision to slow down the rate of interest rate hikes yesterday had a beneficial effect on the positions of the European currencies. If investors do not learn about the ECB's more aggressive strategy in the spring of this year, the bull market could easily change today. Without a new supply of the euro, it will be challenging to maintain current highs, as the second consecutive increase in interest rates by 50 basis points has already been factored into current prices. The pricing figures from Tuesday may change the officials' minds, despite their frequent warnings about high inflation during January and their insistence on continuing the previous pace of rate increases. Since, as I mentioned above, inflation is declining, but at the same time other indicators suggest that additional actions from the ECB may be necessary to suppress the strongest price jump in the eurozone in the last generation, the issue of whether there will be a third 0.5% increase in March or the ECB will still follow the Federal Reserve System is currently the subject of intense debate. The president of the European Central Bank will undoubtedly argue at today's meeting that core inflation is still high. The speeches ahead  In Frankfurt, the ECB will deliver its announcement at 14:15. President Christine Lagarde will speak right away, half an hour after pledging that she and her colleagues will "keep the course" in the fight against inflation. Joachim Nagel, the president of the Bundesbank, and Francois Villeroy de Galhau, the representative of France, have already endorsed two additional measures to raise the rate by half a percentage point beginning with today's meeting. In other words, there is still at least one more meeting in March where the hawks can also get a 0.5% rate increase. The emphasis is now on the language of the ECB statement and Lagarde's statements, which will be studied for signals as other council members argue for a more gradual approach. By May of this year, the ECB deposit rate is anticipated to reach a peak of 3.25%. A further 50 basis point increase is anticipated by economists for next month, followed by a pause in aggressive policy in May. The economic outlook The economic outlook has improved, but it is still uncertain because demand is still declining as a result of the increasing cost of living. Households are probably not significantly impacted by a large decline in natural gas costs at the wholesale level. This won't result in immediate economic growth; it will only help the ECB get inflation back to normal more quickly. Regarding the ECB's effort to reduce its balance sheet, the regulator decided in December to gradually begin selling off its about 5 trillion euro worth of bonds. The total balance is anticipated to decline by 15 billion euros per month from March through the end of June, and the future rates will be adjusted as appropriate. EUR/USD  Regarding the EUR/USD technical picture, the demand for the euro has grown and might continue. To do this, the trading instrument must maintain a price above 1.1000, which will cause it to break through near 1.1050. Above this point, you can quickly reach 1.1090 and have the potential to update to 1.1125. Only if the 1.1000 support fails will the pressure on the pair rise, pushing the EUR/USD to 1.0960 with a possible drop to a minimum of 1.0920 in the case of a decline in the trading instrument. GBP/USD Regarding the technical picture of the GBP/USD, trading continues within the channel. Buyers need to return over 1.2420 to restore their advantage. The only way to increase the likelihood of a further recovery to the area of 1.2470 and, ultimately, a stronger movement of the pound up to the area of 1.2540, is for this resistance to break. After the bears seize control of 1.2350, it is feasible to discuss the pressure on the trading instrument. The GBP/USD will be forced back to 1.2290 and 1.2230 as a result, hitting the bulls' positions.   Relevance up to 08:00 2023-02-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334000
Impact of Declining Confidence: Italian Business Sentiment in August

USD/JPY Pair Is Trading At 128.48 The Aussie Pair Is Above 0.71$

Kamila Szypuła Kamila Szypuła 02.02.2023 13:53
Jerome Powell had a lot to say during the press conference after yesterday's FOMC decision to raise the Federal Funds rate by 25 basis points. He stressed that the inflation risk persisted despite favorable disinflation observed in most sectors. The European Central Bank (ECB) and Bank of England (BoE) will meet later today and both banks are expected to raise their interest rates by 50bps. USD/JPY The dollar slide against the Japanese yen, dropping to as low as 128.07, its lowest in two weeks. Prior to the FOMC event, USD/JPY rose, approaching the falling resistance of the trendline, and then fell. USD/JPY rebounded after finding an intermediate cushion around 128.20 in the Asian session. Considering the risk sentiment in the market, the downtrend is intact. Now the USD/JPY pair is holding above 128.35. As the Bank of Japan keeps the 10-year Treasury yield at 0.5%, the falling US equivalent continues to narrow the interest rate differential, indicating continued declines in the USD/JPY pair. EUR/USD EUR/USD hit a 10-month high at 1.1033 today. EUR/USD pulled back slightly after reaching its highest level since early April at 1.1033 during the Asian trading hours on Thursday. The pair's technical outlook points to overbought conditions in the short term, but market participants may bet on further strengthening of the euro if the European Central Bank (ECB) repeats its hawkish message. The ECB will raise the main interest rate by 50 bp. The decision itself is largely priced in and is unlikely to receive a significant backlash. Some ECB policymakers have advocated a further 50 basis point hike at the next meeting, and the euro could gain strength if a policy statement or ECB President Christine Lagarde confirms such an action. Additionally, EUR/USD could maintain its bullish momentum if the ECB refrains from being optimistic about the inflation outlook. The EUR/USD pair fell below the 1.1000 level but slightly and is trading at 1.0991. GBP/USD GBP/USD drops towards 1.2300 during European trading hours. Sterling remains under slight downward pressure as investors wait for the BOE decision on interest rates. Despite strong selling pressure around the US dollar late Wednesday, GBP/USD's gains remain contained, especially against EUR/USD. On Thursday, the BOE is expected to raise its key rate by 50bps to 4% from 3.5%, but the GBP/USD pair could extend the decline nonetheless. At this point, a BOE rate hike of 25 basis points would be a dovish surprise and weigh heavily on sterling. Read next: Santander Bank Polska Shareholders Can Expect A Solid Dividend ,The ETH Liquid Staking Narrative Is Already Going Strong| FXMAG.COM AUD/USD The Australian dollar appreciated past $0.71 to its strongest levels in nearly eight months, as the US Federal Reserve reduced the size of its rate hike and said it has made progress in the fight against inflation. The aussie also remains supported by expectations that the Reserve Bank of Australia will press on with its fight against inflation and by China’s rapid reopening from Covid curbs. From a technical point of view, the daily chart of AUD/USD suggests that the pair will continue to rise. Source: investing.com, finance.yahoo.com
InstaForex's Irina Manzenko talks British pound amid latest events

The GBP/USD Pair Has The Groundwork For The Long-Term Downward Movement

InstaForex Analysis InstaForex Analysis 03.02.2023 08:01
As a result of yesterday's Bank of England meeting, which raised the rate by 0.50% and made it clear that it wouldn't go for a much higher rate in the future (and investors are waiting for the end of the rate hike cycle in the spring), the pound collapsed by one and a half figures. This fall was just enough for the price to overcome the support of the MACD indicator line on the daily chart and to cross the limit of the area of the downtrend for the Marlin oscillator. The pair is on a downtrend on the daily chart. The nearest target is 1.2155. If we receive good US employment data today, GBP can reach the target. Settling below the level will open the target of 1.1933 (June 2022 low). Crossing 1.2155 has another important factor - it will mean crossing the support of the MACD indicator line on the weekly chart. And this is already the groundwork for the long-term downward movement. Also there is a price divergence with the oscillator. It's a downtrend on the four-hour chart, only the signal line of the Marlin oscillator edges up in order to have time to get rid of it before the US session opens and continue the decline. The MACD line turned down, showing the direction of the medium-term trend.   Relevance up to 03:00 2023-02-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334076
EUR/USD Pair Has A Potential For Short-Term Rally

The EUR/USD Price Should Go Below The Support Range

InstaForex Analysis InstaForex Analysis 03.02.2023 08:03
The meetings of the Federal Reserve, the European Central Bank and the Bank of England are now over. Their results are very confusing, we cannot determine the reason why the dollar index is regaining positions - either on its own strength or on the weakness of the European currencies. Yesterday's collapse by a figure and a half is leaning more towards the second reason. If that's the case, in order to gain a solid signal for a euro reversal, moderately positive U.S. employment data should come out today, and weak euro area retail sales data (December forecast -1.3%) is expected on Monday. In addition to the U.S. jobs data, the ISM Services PMI for January will be released today with a forecast of 50.4/5 versus 49.6 in December. Good data will confirm the dollar's strength. But so far, the reversal signal is weak from the technical side. So far, only a false breakout above the target level of 1.0990 speaks in favor of a reversal. To confirm the signal, the price should go below the support range of 1.0758/87. The Marlin oscillator is more inclined to move in this way, but it also remains in the green zone. On the four-hour chart, the price settled below the MACD indicator line, the Marlin oscillator has entered the area of the downtrend. This is the first sign of the price's intention to reach the target at 1.0758/87. We're looking forward to tonight's US macro data.   Relevance up to 03:00 2023-02-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334078
Bank of Japan keeps the rate unchanged, Tokyo Core CPI increases to 3.5%

The USD/JPY Price Will Climb Above The Resistance Of 129.97

InstaForex Analysis InstaForex Analysis 03.02.2023 08:00
The Japanese yen got a little stronger after the meetings of the three major central banks, but it only strengthened the neutral position and uncertainty, since it is technically staying between the two lines of the price channel at 127.30 and 129.97. The signal line of the Marlin oscillator is in the negative zone, but it has not yet reached the bottom of its own ascending channel (turquoise). Considering the fact that the dollar has been rising against European currencies and the stock market is also rising, I believe that the price will climb above the resistance of 129.97. Then the price may overcome the resistance of the MACD line (131.72), and logically, the breakthrough will end by reaching the resistance of 133.74. The alternative scenario assumes overcoming the support at 127.30 and falling further to the underlying price channel line at 124.10. On the four-hour chart, the price is consolidating under the balance and MACD indicator lines, the Marlin oscillator is rising in the territory of the downtrend with the possible intention to move to the green zone. Let's wait for the resolution of the uncertainty when the US employment data comes out this evening.   Relevance up to 03:00 2023-02-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334074
Markets under Pressure: Rising Yields, Strong Dollar, and Political Headwinds Weigh on Stocks"

At The Close Of The New York Stock Exchange Only The Dow Jones Was Down

InstaForex Analysis InstaForex Analysis 03.02.2023 08:08
At the close of the New York Stock Exchange, the Dow Jones was down 0.11%, the S&P 500 was up 1.47% and the NASDAQ Composite was up 3.25%. Dow Jones  The leading performer among the Dow Jones index components in today's trading was Microsoft Corporation, which gained 11.85 points or 4.69% to close at 264.60. Quotes of 3M Company rose by 4.43 points (3.82%), closing the trades at the level of 120.29. Intel Corporation rose 1.12 points or 3.85% to close at 30.19. The least gainers were UnitedHealth Group Incorporated, which shed 26.17 points or 5.27% to end the session at 470.83. Merck & Company Inc rose 3.29% or 3.52 points to close at 103.46, while Boeing Co was down 2.52% or 5.41 points to close at 209. ,34. S&P 500 Leading gainers among the S&P 500 index components in today's trading were Align Technology Inc, which rose 27.38% to 359.88, Meta Platforms Inc, which gained 23.28% to close at 188.77, and also shares of WW Grainger Inc, which rose 12.96% to end the session at 675.57. The least gainers were Air Products and Chemicals Inc, which shed 7.11% to close at 295.50. Shares of Schlumberger NV lost 6.12% to end the session at 52.29. Quotes of Aflac Inc decreased in price by 5.98% to 68.90. NASDAQ  Leading gainers among the components of the NASDAQ Composite in today's trading were Gaucho Group Holdings Inc, which rose 339.02% to hit 5.40, Biophytis, which gained 73.13% to close at 0.71, and shares of Innovative Eyewear Inc, which rose 58.17% to end the session at 2.42. Shares of Versus Systems Inc became the leaders of the fall, which decreased in price by 41.60%, closing at 0.97. Shares of Motorsport Gaming Us LLC shed 37.95% to end the session at 22.96. Quotes of VivoPower International PLC decreased in price by 35.66% to 0.64. Numbers On the New York Stock Exchange, the number of securities that rose in price (2101) exceeded the number of those that closed in the red (957), while quotes of 92 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,703 companies rose in price, 979 fell, and 193 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 4.81% to 18.73. Gold Gold futures for April delivery lost 0.85%, or 16.55, to hit $1.00 a troy ounce. In other commodities, WTI crude for March delivery fell 0.72%, or 0.55, to $75.86 a barrel. Brent oil futures for April delivery fell 0.91%, or 0.75, to $82.09 a barrel. Forex Meanwhile, in the Forex market, EUR/USD fell 0.68% to hit 1.09, while USD/JPY shed 0.21% to hit 128.66. Futures on the USD index rose 0.49% to 101.53.   Relevance up to 04:00 2023-02-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/311260
Rates Spark: Balancing data and risk factors

Lagarde's Comments Put Pressure On The Euro (EUR)

InstaForex Analysis InstaForex Analysis 03.02.2023 08:11
The European Central Bank increased the interest rate by 50 points at this year's first meeting, while announcing a 50-point hike at the next meeting in March. Despite such hawkish results of the February meeting, the euro came under pressure. The single currency retreated from a multi-month price peak (1.1034) and returned to the area of the 9th figure. Anomalous, at the first glance, market reaction is due to several factors. Spring is near If you assess the February meetings of the Federal Reserve, Bank of England and ECB, you can take note of one general characteristic. On the one hand, central banks declared the continuation of a hawkish course, but on the other hand, they made it clear that aggressive monetary policies are coming to an end. That's why the dollar was under attack at the end of the Fed meeting, the pound was under pressure by the end of the BoE meeting, and the euro was losing ground by the results of the ECB meeting. At the same time, traders actually ignored the fact that the central banks announced further steps to monetary tightening. For example, ECB President Christine Lagarde without any vague wording, which is considered "straightforward", announced that the ECB intends to raise interest rates by another 50 basis points during the next meeting in March. According to her, the disinflationary process hadn't begun, despite the slowdown in the overall consumer price index (core inflation continues to show an uptrend). It would seem that such straightforward hawkish verbal signals should have served as a springboard for the euro. But instead of growth to the resistance level of 1.1090 (the upper line of the Bollinger Bands indicator on the weekly chart), the price turned 180 degrees and was marked in the area of the 8th figure, followed by the retreat to the area of the 9th price level. Why did this happen? First of all, Lagarde, while announcing monetary tightening in March, questioned the further growth of interest rates. According to her, after the March decision "the ECB will evaluate the subsequent path of monetary policy." At the same time, market expectations (in particular, currency strategists at Danske Bank and a number of other large conglomerates) are more hawkish. The assumed scenario includes a 50-point hike in March and a 25-point increase at the next meeting (by 50 points according to some other analysts). Therefore, Lagarde's "wrap-up" sentiment was negatively received by EUR/USD bulls. The single currency was under pressure as traders took the ECB's message as a sign that the central bank nears the end of its rate hike cycle. In my opinion, the market adequately assessed the situation and correctly perceived the signals of the ECB. Secondly, the ECB head emphasized her stance on problematic aspects - in particular, she said that economic activity in the European region has slowed down noticeably. At the same time, "high inflation and tighter financing conditions, these headwinds dampen spending and production,". Such comments put pressure on the euro. Nevertheless, despite the euro's negative response, the EUR/USD pair did not collapse into the area of 7-6 figures, but only retreated from the multi-month price high to the base of the 9th price level. The underlying reason for such stress tolerance is that Lagarde tried to maintain a balance in her rhetoric. On the one hand, she announced a "guaranteed" 50-point hike in March, on the other hand, she questioned further steps towards tightening. On the one hand, Lagarde complained about the slowdown in economic activity; but then she also admitted that the European economy has been more resilient than expected. Moreover, according to forecasts, the economy will show signs of recovery in the coming quarters. At the same time, the ECB head pointed to the optimism of entrepreneurs (obviously referring to the PMI and ifo indices), stable gas supplies to Europe and reduced interruptions. Conclusions Figuratively speaking, the scales are back in equilibrium again: The Fed put pressure on the dollar, and the ECB put almost as much pressure on the greenback. The bulls couldn't conquer the 10th figure, the bears couldn't pull the price down to the 7th figure (and even failed to get a foothold at the 8th price level). Now everything will depend on the values of the key macroeconomic indicators, first of all, in regards to inflation. If core inflation in the European region persistently climbs up, the ECB may raise the rate not only in March but also at the next meeting. The US faces a similar situation: the Fed chief has declared a hawkish course, "tying" the scope of monetary tightening to the dynamics of key inflation indicators. Each inflation report and each inflation component (both in the US and Europe) will be viewed through the prism of further central bank actions. Following the Fed and ECB meetings, the pair remained in the 1.0850-1.0970 range within which it has been trading for several weeks. In my opinion, in the mid-term perspective, the pair will fluctuate in the given price range, alternately pushing back from its limits, reacting to the current information flow.   Relevance up to 01:00 2023-02-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334072
ECB cheat sheet: Difficult to pull away from the Fed

The Euro Should Enter The Long-Awaited Bearish Correction

Paolo Greco Paolo Greco 03.02.2023 08:18
M5 chart of EUR/USD EUR/USD did nothing but fall on Thursday. We have been waiting a long time for the euro to collapse and I said that the market had already worked out the rate hike in February and March. So, if the pair did not rise the day before, we would say that everything progressed logically. However, don't forget that the euro rose on Wednesday evening due to Federal Reserve Chairman Jerome Powell's hawkish speech. If you only look at the results of the meetings and the market's reaction, it is very difficult to understand traders. Essentially, traders were getting rid of the currency whose central bank signaled its willingness to keep raising rates. I believe that the euro can and should enter the long-awaited bearish correction. If it continues to rise after the events of the last two days, it makes no sense to speak about the logic of the market movements at all. Yesterday's movement was very good, but too impulsive. The market ignored the technical benchmarks because it was too focused on the important fundamental background. Therefore, the pair failed to reach 1.1036, and there was no sell signal. Thus, we failed to catch the beginning of the fall yesterday, and the first signals were formed in the US trading session after the outcome of the European Central Bank meeting. I believe that traders should not have entered the market during this period of time since there was a high probability of sharp and frequent reversals and high volatility. COT report The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the uptrend will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often precedes the end of the trend. During the given period, the number of long positions held by non-commercial traders decreased by 9,500, whereas the number of short positions fell by 2,000. Thus, the net positions decreased by 7,500. Now the number of long positions is higher than the number of short positions opened by non-commercial traders by 134,000. So now the question is: how long will the big players increase their longs? From a technical perspective, a bearish correction should have started a long time ago. In my opinion, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to correct. The overall number of short orders exceeds the number of long orders by 52,000 (732,000 vs. 680,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD left the sideways channel and managed to show two powerful turns of movement. First, it rose, then fell. As of Friday morning, the price is between the lines of the Ichimoku indicator, but today won't be a peaceful day. The US will release important macro data, which can trigger a new "storm" in the currency market. On Friday, the pair may trade at the following levels: 1.0736, 1.0806, 1.0868, 1.0938, 1.1036, 1.1137, 1.1185, 1.1234, as well as Senkou Span B (1.0847) and Kijun Sen (1.0917). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On February 3, the EU will only release its services PMI. In the US, we can look forward to the NonFarm Payrolls, unemployment and the ISM non-manufacturing index. Volatility may remain high today. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 05:00 2023-02-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334088
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The EUR/USD Pair Is Back Below The Former Resistance At 1.0933

Torben Melsted Torben Melsted 03.02.2023 08:25
EUR/USD broke strongly above the former top at 1.0933 after the Fed's decision to hike only 25 bps and a follow-up with a dovish press conference. However, the spike was almost as strong as the break was. After peaking at 1.1033 EUR/USD has turned lower with the same force and back below the former resistance at 1.0933 which now opens a possible alternative count that sees the dip from the peak at 1.0933 to 1.0802 as wave A and the rally to 1.1033 as wave B of an expanded flat and wave C lower to the possible target area between 1.0437 - 1.0500 as being in motion. For us to dismiss the alternative count, we need a direct break back above minor resistance at 1.1002 which would call for a continuation higher to 1.1393. Only time will tell, but it's a good reminder that 4 waves can be very complex and hard to read in real-time and we always need to keep the options and possible alternative scenarios open.   Relevance up to 07:00 2023-02-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311272
The EUR/USD Pair Has A Potential For Drop

The EUR/USD Pair Has A Potential For Drop

Oscar Ton Oscar Ton 03.02.2023 08:34
Technical outlook: EURUSD rose through 1.1025 post-FOMC's decision on Wednesday only to find resistance. In less than 24 hours, the single currency pair slipped back below the 1.0900 handle, giving away all gains. This was expected as per the wave structure and a meaningful retracement should be on its way going forward. Ideally, the 1.1025 resistance should hold well for the month of February. EURUSD has now potentially confirmed a top at 1.1025 and has carved an engulfing bearish pattern on the daily chart. The larger-degree wave structure, which began from 0.9535 in September 2022, looks complete now. A corrective drop should be seen breaking below the 1.0481 initial support in the next few trading sessions. EURUSD's potential to drop remains up to 1.0100 which is marked by a rectangle on the daily chart presented here. Also, note that the Fibonacci 0.618 retracement of the entire rally between 0.9535 and 1.1025 is seen passing through 1.0100. A high probability remains for a bullish reversal if prices drop through those levels. Trading idea: A potential bearish move against 1.1100 Good luck!     Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311278
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

ING Economics ING Economics 03.02.2023 08:45
EUR/USD is trading close to 1.0900 after the Fed and ECB meetings, as markets showed little faith in the (modest) attempts by Powell and (fierce) attempts by Lagarde to stay hawkish. Markets’ doubts on ECB guidance may be a larger short-term driver, and delay another big EUR/USD rally to 2Q, when rate differentials may swing meaningfully in favour of the EUR Markets are doubting today's hawkish lines by Christine Lagarde today (pictured) and the ECB on Wednesday Why markets are doubting hawkish communication EUR/USD is trading close to 1.0900 at the time of writing, the same levels observed before Wednesday’s FOMC announcement. Remember, the pair touched a 1.1033 10-month high before the ECB meeting triggered a correction. The recurrent theme of these two days of central bank activity has been the diffidence by markets around the reiteration of hawkish rhetoric. Take the Fed: the message that “ongoing rate increases remain appropriate” was out-shadowed by: Mentions that the disinflation process has started A lack of an explicit pushback against dovish rate expectations An open-ended approach to the direction of Dot Plot adjustments in 2023 Those details, which emerged during Chair Powell’s press conference, triggered a dovish-surprise market reaction, with risk assets climbing and the dollar falling. On paper, the European Central Bank went the extra mile to cement its hawkish message, saying it intends to hike by another 50bp in March following today’s 50bp move. However, the market reaction also went in the opposite direction, with European bonds rallying (bunds -22bp, BTPs -39bp) and the euro falling. This reaction boils down to Lagarde essentially failing to convincingly justify the ECB’s tightening plans,as: The ECB also stated that the inflation outlook is no longer facing upside risk but is now more balanced The reiteration of a meeting-by-meeting approach seemed to clash with a commitment to another 50bp hike in March Lagarde refrained from providing direction on the size or pace of increases after March, offering a breeding ground for speculation on the dovish side Dovish bets on the Fed look more appropriate than on the ECB We think that markets' ongoing dovish repricing of the Fed’s rate expectations has more solid foundations compared to those of the ECB. First, because yesterday’s comments by Powell signalled no urgency to push back against the loosening of financial conditions, while Lagarde explicitly warned markets against not trusting the ECB hawkish guidance. Second, because the Fed’s higher policy rates inevitably leave more room for a readjustment lower by the end of the year, especially given the deteriorating growth outlook and ongoing decline in inflation. We currently estimate 125bp of tightening by the ECB and no cuts in 2023, while we expect only one more 25bp hike by the Fed and 100bp worth of cuts in 2H23. EUR/USD and short-term rate differential Source: ING, Refinitiv EUR/USD: Patience before another big rally All those considerations lead us to reiterate our core view that the EUR-USD rate differential is still more likely to swing in favour of the euro (largely on the back of falling USD short-term rates) this year. However, another big rate-driven EUR/USD rally may not be a story for this quarter, as the March meetings may see the Fed push back against rate cut speculation and the ECB still struggles to sell its tightening plans to the market.   The second quarter of this year is when the ECB-Fed divergence may emerge more distinctly, as we expect the ECB to deliver another 25bp and strongly signal rates won’t be cut for some time, while an acceleration of the slowdown in the US economy and inflation will heavily challenge any pledge by the Fed to keep rates at 5.0% for long. We target 1.15 in EUR/USD in 2Q23, and 1.12 in 4Q23.   Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Czech National Bank Review: Copy paste but still different

Czech National Bank Review: Rates higher for longer

ING Economics ING Economics 03.02.2023 08:49
The Czech National Bank keeps rates unchanged at 7.0%. The CNB's new winter forecast suggests headline inflation accelerating from 15.8% to 17.4% year-on-year, then a gradual moderation to 7.6% in the fourth quarter this year. The CNB is likely to keep rates at 7% for a longer period The Czech National Bank in Prague 7.00% CNB's key policy rate No change As expected CNB on hold, inflation to pick up to 17.6% Unsurprisingly, the Czech National Bank kept its interest rate unchanged in its February monetary policy meeting. Two board members voted for 50bp (very likely Tomas Holub and Marek Mora). The previous hiking cycle finished last June, when the hawkish bank board of CNB Governor Rusnok hiked by 125bp to 7%. Since the start of dovish Governor Michl's term, the new bank board has kept interest rates unchanged.   The new CNB outlook forecasts inflation to pick to 17.6% in January and to decline relatively swiftly from spring towards 7.6% in the last quarter of this year. After a market drop of headline inflation to 2.3% in the first quarter of 2024 the CNB forecast suggests it being mostly flat throughout the whole remainder of the next year. The CNB forecast of GDP shows a shallow recession to end in the second quarter, followed by soft recovery thereafter. Hence the overall GDP growth in 2023 is expected at 0.3%. New CNB forecast Source: CNB Board diverges from rate forecast on hawkish side The forecast implies additional hikes by roughly 100bp in the first quarter followed by 200bp cuts until year-end. According to Governor Michl, however, the board preferred to keep key interest rates unchanged for longer, having regard to the sensitivity scenario which will be presented on Friday, 3 February. In this simulation, inflation falls close to the inflation target in the first half of next year as well. The Governor said the risk of current FX strength for export performance and economic recovery is given lesser weight compared to the priority to slash inflation back to the target. The outcome of today's CNB board meeting is an interesting mix of dovish/hawkish stance. Refusing a rate hike suggested by the new forecast on the one hand, and a resolution to keep rates rather higher compared to forecasts on current already high levels for longer period. It seems the possible reduction in interest rates is limited this year, maybe 50bp or less, while the first possible cut could be delivered in August, a symbolic 25bp, while in the fourth quarter we may see another 25bp in November.  Read next: Santander Bank Polska Shareholders Can Expect A Solid Dividend, The ETH Liquid Staking Narrative Is Already Going Strong| FXMAG.COM What to expect in rates and FX markets Today's meeting gave the koruna another reason to maintain its current record strong values. The intervention regime seems to be here to stay for a longer period of time, and its abolition is out of the question at the moment. Although the CNB last intervened in September last year in our view, the central bank's presence in the market will continue to play a key role. However, as we mentioned in our preview, the main driver at the moment, in our view, are global factors – falling gas prices and a higher EUR/USD. Thus, the CNB is more of a complementary factor why to be positive on the koruna. Moreover, the koruna still offers decent and stable carry. Thus, the main enemy at the moment is the market positioning, which was already the most long in CEE before the CNB meeting in our view. Thus, the koruna may test stronger levels in the short term but the EUR/CZK move lower is limited in our view and the koruna will be rather stable compared to CEE peers. The premature dovish expectations we highlighted in our preview got a direct hit after today's meeting from the CNB governor saying that market expectations are wrong and rates will be higher than the market expects. In addition, next week we will see January inflation which should be on the higher side and support a reassessment of current expectations. On the other hand, the long end of the IRS curve is being pulled down by core rates, which leads us to flatteners as the best positioning for the coming weeks. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Nvidia Is Rolling Out Its Own Cloud Service Together With Oracle

Australia’s Tech Sector Is Starting To Pick Up Momentum, The ECB And The BoE Took Dovish Turns

Saxo Bank Saxo Bank 03.02.2023 09:20
Summary:  The US equity markets extended their gains, underpinned by 23% surge in Meta as it announced a leaner and more decisive vision; while German and UK yields slumped after dovish tilts from ECB and the Bank of England. The NFP jobs report in focus as the next test of the US labor market strength. USD was back in gains while commodities reversed the post-FOMC rally as clear signals on China’s reopening demand are also awaited. The tech rally may start to get some jitters with Apple, Amazon and Alphabet missing their earnings forecasts in post-market.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) surged on Thursday, paring gains in Asia Friday morning following Apple, Google, and Amazon misses S&P500 closed at a new five-month high on Thursday, rising 1.5%, taking its move up to 19% from its October low and its 50-day moving average above the 200-day moving average, in what is usually referred as a “golden cross” in technical analysis. The Nasdaq 100 gained 3.6% after Meta shares jumped 23% on cost-cutting which paves the road for a return to profitability. Refer to Peter Garnry’s  article here for more on Meta. On the back of the dovish comments from Fed’s Powell on the previous day about disinflation having started and the optimism boosted by the surge in Meta’s share prices, Alphabet (GOOGL:xnas) and Amazon (AMZN:xnas) jumped more than 7% in the regular session and Apple (AAPL:xnas) climbed more than 3%, driving the benchmark indices higher before they reversed in the extended hour trading following reporting results missing expectations. Post results, Apple and Alphabet fell more than 3% and Amazon plunged more than 4% in after-hours trading, bringing Nasdaq 100 futures by around 1.3% lower in early Asian hours from its Thursday close. Apple, Amazon, Google, and Ford paint a bumpy picture ahead for equities Apple's profit and revenue missed, but it guided for a pickup in revenue from its iPhone this quarter, as well as its services revenues. Amazon's 4th quarter sales beat, but its outlook was on the weaker side. Google-owner Alphabet’s sales were lighter, suggesting lower demand for its core search advertising which is coming under threat. The US Department of Justice called for a breakup of the search giant’s ad-technology business over alleged illegal monopolization of the market. The company’s flagship search business, which drives most of its ad revenue, may also be under attack from new entrants, with Google declaring “code red” last year after in response to Open AI’s popular chatbot, entering the market. Ford guided for the potential of higher earnings in 2023, but missed fourth quarter earnings expectations. That said, its automotive revenue was higher than expected and it will pay a supplemental dividend of $0.65 per share reflecting the cashflow from taking a stake in Rivian. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) edged down, Bund and Gilt yields tumbled on dovish hikes from the ECB and BOE The yield on the 10-year Treasury dropped as much as 9bps following the massive declines in yields on German Bunds and UK Gilts before paring most of the gain (in prices, fall in yields) in the New York afternoon to finish 2bps richer at 3.39%.  Relative to European and UK bonds, the movements in the U.S. Treasuries were relatively muted ahead of the U.S. employment report today. Yields on the 10-year German Bunds dropped 21bps to 2.07%. The ECB raised policy rates by 50bps as expected and signaled another 50bps in March but indicated that the path of interest rate increases would become data-dependent afterward. Likewise, the Bank of England raised its policy rate by 50bps but commented that it had “seen a turning of the corner” and signaled that future rate hikes would be data-dependent. Yields on the 10-year Gilts tumbled a staggering 30bps to 3.01%. U.S. non-farm production improved to 3% (vs consensus 2.4%) in Q4 from 0.8% in Q3 and unit labor costs growth decelerated to 1.1% in Q4 (vs consensus 1.5%) from 2.4% in Q3. Both were good news to the Fed’s disinflation narrative. Interest rate futures are pricing in 60 bps of rate cuts by the Fed in the second half of 2023 after a 25bp hike in March. The Australian share market rallies to its highest level since April last year Australia’s tech sector is starting to pick up momentum, and the technical indicators are looking interesting, suggesting upside on the weekly and monthly charts. Today the market hit new cycle highs, and its highest leveis also reacting to PMIs rising, a sign Australia’s economy is beginning to strengthen. Next week we will receive financial results from one of Australia’s top 10 banks, Suncorp, as well as real estate tech business, REA. In the following week (the third week of February) earnings season ramps up with CBA and Fortescue reporting Feb 15, BHP on Feb 21, followed by Rio the next day, followed by Qantas. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) were mixed The Hang Seng Index pared early gains to finish the Thursday session 0.5% lower on the back of a strong rally in U.S. equities overnight and less upward pressure on domestic interest rates and currencies spilled over from higher U.S. interest rates down the road. Baidu (09888:xhkg), rising 5%, extended its strong recent gains on the ChatGPT concept and following BlackRock raised its stake to 6.6% from 5.4% in the Chinese search engine giant. Baidu was the best-performing stock on the Hang Seng Index for the second day in a row. Li Auto (02015:xhkg) climbed 1.9% after reporting delivery of 15,141 units of EV in January,  up 23% Y/Y. On the other hand, NIO (09866:xhkg) slid 5.3% following a 12% Y/Y decline in delivery to 9,652 units in January and on reports that the Chinese EV maker is cutting prices. Geely (00175:xhkg) dropped 3.3% after its high-end Zeekr brand delivered 12% fewer EVs from the year-ago period. Chinese mobile gaming stocks traded in the Hong Kong bourse soared with Forgame (00484:xhkg) leading the charge and jumping over 75%.  CSI 300 slid 0.4%. Pharmaceuticals, biotech, retailing, beverage, and coal mining advanced while defense, electric equipment, household appliances, and non-bank financials retreated. FX: USD returns to strength as global yields plunge The 30bps plunge in UK yields after the Bank of England kind of hinting at a pause saw GBPUSD back off from 1.24 to 1.2222. ECB also surprised dovish despite some very hawkish expectations being priced in by the markets, taking EURUSD back from 1.10+ to the 1.09 handle. EURGBP however still above 0.89 with ECB still guiding for another 50bps rate hike in March. Australian bonds also joined the global rally, and AUDUSD reversed back below 0.71. JPY was the clear outlier, ignoring the global bond yields plunge, and USDJPY continued to trade steady around 128.50. Crude oil (CLG3 & LCOH3) prices soften Oil prices saw a modest decline as jitters about Chinese demand and Russian sanction continued to underpin. OPEC output also saw a decline of 60kb/d amid reductions in Saudi Arabia and Libya. Meanwhile, a stronger dollar after the dovish tilts from the ECB and Bank of England weighed on the commodity complex in general. The US jobs report becomes the next test for the markets today, and for the US dollar, after Chair Powell’s comments were paid little heed. WTI futures were below $76/barrel while Brent was below $83. Gold (XAUUSD) reversed from $1960 barrier; Largest global gold ETFs sees strong fund flows Gold broke higher to fresh cycle highs in the post-FOMC euphoria, breaking past $1950, but a stronger dollar returned after ECB and BOE also took dovish turns resulting in steep drops in global bond yields. This made the yellow metal lose some of its shine, and it reversed before the test of the 76.4% retracement of the 2022 correction at $1963 to near-1910 levels. Immediate support at $1900, and the US NFP data along with the ISM surveys will continue to be the next key market movers to watch. Meanwhile also consider, the largest gold ETF fund globally GLD, has seen over $2 billion in inflows since the start of the year, suggesting retail buying is starting to ramp up.  Read next: Santander Bank Polska Shareholders Can Expect A Solid Dividend, The ETH Liquid Staking Narrative Is Already Going Strong| FXMAG.COM What to consider? Bank of England hikes 50bps, but further rate hikes see a high bar As expected, the Bank of England raised rates by 50bps to 4%, with a vote of 7-2 as two of the usual doves opted to keep the rates unchanged. The Bank eased up on its forward guidance, saying that further policy tightening “would be required”, but only “if there were to be evidence of more persistent [inflationary] pressures” and preceding all of that language touting “considerable uncertainties” in the outlook. The previous language was more direct on the need to continue hiking. The latest message with the pre-conditions set for another rate hike suggested that the bank may pause. Accordingly, market pricing moved in a more dovish manner with odds of a 25bps March falling to around 60% from 80% pre-announcement with the chance of a May 25bps move around 12% vs. around 50% pre-announcement. Inflation and growth forecasts also hinted at a dovish turn. The accompanying MPR saw a downgrade to the 2023 inflation forecast to 4.0% from 5.25% with inflation of just 1.5% next year. BoE was less pessimistic on the economy, as peak unemployment was revised down to 5.3% from 6.0% and the peak to trough GDP dip was revised up to -1% from -2.9%. UK 10-year yields saw a massive 30bps drop and the 2-year was also down ~25bps. Dovish ECB despite confirming another 50bps rate hike; German 10-year yields plunge 30bps With very hawkish expectations set in, the ECB had a high bar to surprise hawkish. And it failed to do so. While the European Central Bank raised rates by 50bps to 2.50% and committed to another 50bps rate hike in March; but the statement said that at the March meeting, the ECB will evaluate the subsequent path of its monetary policy. This sent out a message that the most hawkish G10 central bank currently may also be looking at stepping down its pace of rate hikes. Lagarde attempted to stress the longevity of reaching terminal by stating that when the level is reached, rates will need to stay there. However, there was a clear scaling back of hawkish market pricing for 2023 with around 25bps of tightening taken out. Reuters sources later noted that ECB policymakers see at least two more rate hikes, with an increase of 25bps or 50bps in May, which may thrash hopes of a May pause for now. German 10-year yields slumped by 30bps, posting its biggest decline since 2011. Today’s NFP data to be the next big test for US labor market The weekly jobless claims nudged lower again to 183k from 186k for the week ending 28 January, a surprise against the expected rise to 200k. This suggest that the labor market is still tight, as the focus shifts to nonfarm payrolls release later today. Bloomberg consensus expects a modest cooling in the headline NFP gains to 189k from 223k in December. The unemployment rate is also expected to come in a notch higher at 3.6% from 3.5% previously while wage gains may soften slightly to 4.3% YoY from 4.6% YoY previously. A larger-than-expected softness in labor market can further send dovish signals to the market that is still dealing with the post-Powell and ECB/BOE dovishness. Challenges for India’s Adani Group continue to mount The market loss for the Adani Group mounted over $100bn, once again sending concerns of a possible contagion skyrocketing. Challenges for the group continue to mount since the Hindenburg report, with a shock withdrawal of share sales, some banks refusing to take Adani securities as collaterals and then the Reserve Bank of India asking Indian banks for details of the exposure to Adani Group. Furthermore, S&P Dow Jones Indices said that it will remove Adani Enterprises from its sustainability indices effective February 7, which would make shares less appealing to sustainability-focused mutual funds as well and cause foreign outflows. Contagion concerns are widening, but still limited to the banking sector. Focus remains on further risks of index exclusions, while a coherent response on the fraud allegations from the Adani Group is still awaited. Shell beats on Q4 earnings One of Europe’s largest oil and gas majors reported Q4 adjusted profit of $9.8bn vs est. $8.3bn driven by higher-than-expected oil and gas output for the quarter. Q4 dividends are lifted to $0.2875 per share vs est. $0.285.     For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Dovish tilts from ECB and BOE and Meta gains push equities higher; Post-market earnings miss from Apple, Alphabet and Amazon – 3 February 2023 | Saxo Group (home.saxo)
UBS buys Credit Suisse for $3.2bn. Last week was the worst one for equity markets in 2023

The Swiss Franc (CHF) Asset Is Struggling To Extend Gains

TeleTrade Comments TeleTrade Comments 03.02.2023 09:36
USD/CHF is oscillating in a narrow range below 0.9150 as volatility squeezes ahead of US NFP data. The demand for US government bonds is accelerating as the street is considering continuation price index softening. SNB Jordan has confirmed further interest rate hikes amid rising inflationary pressures. The USD/CHF pair is displaying a lackluster action below 0.9150 in the early European session after a gradual upside move. The Swiss franc asset is struggling to extend gains as investors are avoiding making significant positions ahead of the release of the United States Nonfarm Payrolls (NFP) data. After testing Thursday’s high around 101.55, the US Dollar Index (DXY) is facing fragile barriers in extending its upside journey. S&P500 futures are failing to ease losses recorded in the Asian session, portraying a risk-off market mood. The demand for US government bonds is accelerating as the street is considering a continuation of the slowdown in the price index. This has led to a drop in the 10-year US Treasury yields below 3.38%. Friday’s price action banks upon the release of the US NFP data. Analysts at TD Securities expect a 220K increase in payroll and a modest increase in the Unemployment Rate to 3.6%. The economic catalyst that will be keenly watched by the market participants will be the labor cost index data. As per the consensus, Average Hourly Earnings data is seen at 4.9% vs. the prior release of 4.6% on an annual basis. While monthly data is seen steady at 0.3%. Considering the fact that labor demand is exceeding the supply, higher negotiation power in favor of job seekers could dent the Consumer Price Index (CPI) declining trend. Households will be with higher purchasing power, which could trigger retail demand again. Read next: Santander Bank Polska Shareholders Can Expect A Solid Dividend, The ETH Liquid Staking Narrative Is Already Going Strong| FXMAG.COM On the Swiss franc front, Swiss National Bank (SNB) Chairman Thomas J. Jordan has confirmed further interest rate hikes as price pressures are beyond the tolerance power of the central bank.
Australian dollar against US dollar - "It seems that the currency will soon hit a price above 0.68"

According To UOB Group’s Specialists The AUD Is Not Ready To Head Higher

TeleTrade Comments TeleTrade Comments 03.02.2023 09:51
In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, AUD/USD could now trade between 0.7000 and 0.7135 in the short term. Key Quotes 24-hour view: “We highlighted yesterday that ‘the sharp and rapid rise appears to be overdone but AUD could rise above 0.7170 first before easing’. AUD subsequently rose to 0.7158 before dropping sharply to a low of 0.7069. Despite the decline, downward momentum has not improved much. Today, AUD is likely to trade in a range, expected to be between 0.7040 and 0.7110.” Next 1-3 weeks: “We noted yesterday (02 Feb, spot at 0.7145) that despite the advance in AUD on Wednesday, upward momentum has not improved much. However, we were of the view that AUD is likely to trade with an upward bias toward 0.7230. AUD rose to 0.7158 before staging a surprisingly sharp pullback. While our ‘strong support’ level at 0.7050 is not breached, upward momentum has more or less fizzled out. In other words, AUD is not ready to head higher to 0.7230. Instead, it is more likely to consolidate between 0.7000 and 0.7135 for now.”
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

The USD/JPY Pair Seems Poised To Register Losses

TeleTrade Comments TeleTrade Comments 03.02.2023 09:55
USD/JPY oscillates in a narrow range and is influenced by a combination of diverging forces. A modest USD uptick lends support, though weaker US bond yields cap gains ahead of NFP. Expectations for a hawkish shift by the BoJ underpin the JPY and further act as a headwind. The USD/JPY pair struggles to capitalize on the previous day's modest bounce from the vicinity of the 128.00 mark, or a two-week low and oscillates in a narrow range on Friday. Spot prices seesaw between tepid gains/minor losses and hold steady above mid-128.00s through the early European session. The US Dollar edges higher on the last day of the week and looks to build on its recovery from a nine-month low touched on Thursday, which, in turn, is seen acting as a tailwind for the USD/JPY pair. The USD uptick could be attributed to some repositioning trade ahead of the closely-watched US monthly jobs report, due for release later during the early North American session. The US Weekly Initial Jobless Claims data released on Thursday pointed to the underlying strength in the labor market and boosted expectations for strong Nonfarm Payrolls (NFP). This, in turn, forced investors to re-evaluate their expectations for future rate hikes by the Fed and lend some support to the USD. That said, weaker US Treasury bond yields cap gains for the buck. Read next: Santander Bank Polska Shareholders Can Expect A Solid Dividend, The ETH Liquid Staking Narrative Is Already Going Strong| FXMAG.COM The Japanese Yen, on the other hand, continues to draw support from expectations that high inflation may invite a more hawkish stance from the Bank of Japan (BoJ) later this year. The bets were lifted by Japan's Nationwide core inflation, which reached its highest annualized print since December 1981. This is seen as another factor keeping a lid on the USD/JPY pair, at least for now. Bullish traders also seem reluctant to place fresh bets in the wake of the overnight breakdown below a symmetrical triangle and ahead of the key US macro data. Nevertheless, the USD/JPY pair seems poised to register losses for the first time in three weeks.
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

FX Daily: Eyes back on data after Fed and ECB communication troubles

ING Economics ING Economics 03.02.2023 11:06
Markets questioned the hawkish message by both the Fed and the ECB this week, but we think Powell gave more reasons to reasonably fuel dovish expectations. Still, the ECB communication hiccups mean that EUR/USD may struggle to break higher before the end of the first quarter. Today, eyes on payrolls and ISM services: the dollar likely faces downside risks ECB President Christine Lagarde and Fed Chair Jerome Powell USD: Downside risks from data today The dollar has essentially erased all the post-FOMC losses after markets questioned the hawkish rhetoric by the ECB and European rates went on a huge rally yesterday. We analyse what the last two days of central bank meetings have meant for EUR/USD in this note.   It’s been quite clear that markets have doubted both Fed Chair Jerome Powell’s and ECB President Christine Lagarde’s attempts to hang on to hawkish communication, although dovish bets on the Fed appear more strongly founded at this stage. This is both because Powell seemed more relaxed about the easing in financial conditions and did not convey urgency in pushing back against rate cuts, and because the Fed has taken rates into a much more restrictive territory which inevitably leaves a larger room for easing in 2023. What is clear is that markets will continue to focus heavily on data. With volatility abating after the key Fed and ECB announcements and some of those defensive trades (due to the imminence of key risk events) being unwound, today’s non-farm payrolls release in the US brings mostly downside risks for the dollar, in our view. After all, a tight jobs market has already been factored in by the Fed (Powell even admitted inflation might fall without hurting employment), but it’s really the declining inflation story that is suggesting a peak in Fed funds rates is imminent. Accordingly, markets may focus more on the wage growth figures rather than the headline employment print. Any evidence that wage growth is losing pace and/or that hiring is slowing down materially would likely fuel rate cut expectations further, and hit the dollar. US 2-year rates are currently trading 10bp above the psychological 4.00% mark: a break below may exacerbate a dollar slump. Should such dollar weakness materialise, we think that high-beta currencies may emerge as key winners thanks to the positive impact on risk assets. ISM service numbers will also be closely watched after the latest release was a key driver of the negative re-rating in US growth. Francesco Pesole Read next: Starbucks Revenues Are High Despite High Costs| FXMAG.COM ECB: Dealing with unclear communication Should today’s payrolls trigger a dollar contraction, the euro may emerge as a laggard in the G10 space. Markets are strongly questioning the ability of the ECB to keep hiking at a “stable” pace (as the ECB said in its statement) beyond the March meeting. Here are the review notes from our economics team of yesterday’s statement and press conference. As our ECB watcher puts it, Lagarde’s press conference brought more fog than clarity. And we think it is indeed the communication hiccups in Frankfurt that is driving EUR/USD weakness. We remain of the view that at least 75bp of extra tightening will be delivered by the ECB, which still puts EUR/USD in a position for a big rally in the second quarter – when US short-term rates may come off more steadily. The ECB communication troubles may cap EUR/USD before then. Today, the balance of risks is still tilted to the upside for EUR/USD as US jobs data will be the key driver. The question is how comfortable markets are with re-testing 1.1000: we suspect a break above that level is a bit premature unless US figures come in very weak. Francesco Pesole GBP: BoE close to the peak The Bank of England hiked rates by 50bp yesterday, but offered a number of signals that it is indeed close to the peak. As discussed in our economics team’s reaction piece, a key hint that the MPC is laying the groundwork for the end of its tightening cycle is that it has dropped its pledge to raise rates “forcefully” (i.e. by 50bp). Incidentally, the BoE’s two-year inflation projection – a key driver of policy decisions – is now well below target. We still doubt this was the last hike of the cycle, and expect another 25bp move at the next meeting in March. Markets are torn around a move in either March or May, but are still fully pricing in an additional 25bp of tightening. The pound was slightly weaker after an initially positive reaction to the BoE statement. In practice, it appears that the BoE is not diverging much from market expectations, which means that it may be up to data in the UK to drive any large swings in the pound rather than surprises from the BoE. With markets doubting the ECB's hawkishness, EUR/GBP may manage to stay below 0.9000 for now, although a break higher seems highly likely over the coming months. Francesco Pesole CZK: CNB continues to support FX but is not a decisive factor The Czech National Bank (CNB) left rates and the FX intervention regime unchanged yesterday, in line with expectations. However, there was still room for a hawkish surprise. During the press conference, the Governor said that the record-strong koruna is not a problem for the economy and on the contrary, it is a welcome inflation-fighter. He thus implicitly confirmed that the intervention regime will be with us for a long time despite the fact that the CNB last intervened in September last year. Moreover, he told reporters that current expectations of significant rate cuts this year are wrong and rates will remain at higher levels for longer. However, the main driver at the moment, in our view, are global factors – falling gas prices and a higher EUR/USD – and the CNB is more of a complementary factor for the positive koruna. Moreover, the koruna still offers decent and stable carry. Thus, the main enemy at the moment is the market positioning, which was already the longest in the CEE before the CNB meeting in our view. Thus, the koruna may test 23.70 levels in the short term but the EUR/CZK move lower is limited in our view and the koruna will be rather stable compared to CEE peers. Frantisek Taborsky Read this article on THINK TagsFX EURUSD Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

Most European Emerging Market Currencies Ended The Year On A Positive Note

Enrique Díaz-Álvarez Enrique Díaz-Álvarez 28.01.2023 09:36
2022 was one of the most challenging years for FX strategists for some time, with a number of significant economic developments leading to massive volatility in currencies. The US dollar  The most noteworthy move in FX was the sharp rally in the US dollar against almost every other currency worldwide. The US Dollar Index rose to its highest level in two decades in late-September, and at one stage was trading approximately 19% higher year-to-date – one of its most significant periods of appreciation in many years. We attribute the extent of this rally to two main factors. Firstly, we witnessed a general deterioration in risk sentiment throughout much of last year, as sky-high inflation rates caused investors to fret about the possibility of economic downturns and recessions. So far, macroeconomic data has held up reasonably well under the circumstances, though most market participants expect 2023 to bring a slowdown in global activity. The G10 are still in the midst of raising rates Investors also spent much of 2022 ramping up expectations for Federal Reserve interest rate hikes. The Fed led the way with one of its most rapid tightening cycles in many decades last year, raising rates by a total of 425bps between its March and December meetings. Indeed, almost every other major and emerging market central bank hiked interest rates at a very aggressive pace in 2022 in an attempt to combat multi-decade high inflation rates. While many EM central banks have already brought their tightening cycles to an end, most of those in the G10 are still in the midst of raising rates, albeit at a slower pace. Among the major currencies, the ‘best of the rest’ in 2022 was the Swiss franc (-1.3% versus the USD), buoyed by the rather dramatic policy U-turn from the Swiss National Bank. The franc was followed some way behind by the euro. The common currency was one of the better performers in the second half of the year, as investors bet that the worst-case energy scenarios would be avoided, while the European Central Bank took a hawkish turn. The antipodean currencies (AUD and NZD) and Canadian dollar traded around the middle of the pack. The Canadian dollar was actually one of the best performers in H1 2022, although it faltered in the second half of the year amid the drop in oil prices and a policy shift from the Bank of Canada, which appeared to end its hiking cycle in December. Read next: Intentional Depreciation Of The Currency - Devaluation| FXMAG.COM European currencies Most of the remaining major European currencies (particularly SEK and NOK) struggled last year, partly due to their high-risk status and correlation to the economic cycle in Europe. Sterling crashed to a record low against the US dollar in late-September as investors fled UK assets following Liz Truss’ mini-budget misstep. A dramatic reversal in almost all of the tax cuts, and a general stabilisation in UK financial markets did, however, lift the pound back above its pre-budget levels in trade-weighted terms. Japanese yen Meanwhile, the Japanese yen ended near the foot of the G10 performance tracker, underperformed only by the Swedish krona. The yen appeared to lose its safe-haven status in accordance with the Bank of Japan’s ultra-dovish monetary policy stance. The BoJ was the only major central bank in the world to not raise interest rates last year, although we are beginning to see tentative signs of a shift away from this position. Overall, most emerging market currencies fared better than the majors in 2022, a historical rarity during periods of Federal Reserve policy tightening. The MSCI Emerging Market Currency Index ended the year down only 4.3%, versus a 7.2% move lower in the inverse of the US Dollar Index. We attribute this to two primary factors. For the most part, central banks in developing countries raised interest rates at a more aggressive pace than among the majors last year. Elevated commodity prices also kept these currencies well bid, as emerging market economies tend to be more reliant on commodity production than the developed ones. The clear outperformers were those in Latin America, led by the Brazilian real (+5.6%) and Mexican peso (+5.3%), which actually ended the year higher on the US dollar. Asian currencies Rather uncharacteristically, most Asian currencies, with only a handful of exceptions, sold-off quite sharply against the US dollar last year, including the ordinarily stable Indian rupee (-10.1%). This underperformance partly had to do with the Chinese government’s insistence on maintaining the country’s highly-controversial, and heavily criticised, zero-covid strategy. We have begun to see signs of a softening in authorities' stance towards the virus in recent weeks, with a number of the stringent measures now removed. Elsewhere, most European emerging market currencies ended the year on a positive note, reversing some of their losses as markets believed that the worst-case energy scenarios would be avoided. The worst performer of all the currencies that we cover was the Ghanaian cedi, which ended the year almost 40% lower on the dollar, followed by the Turkish lira. Best performing currencies in 2022*: Brazilian real +5.6% Mexican peso +5.3% Peruvian sol +5.1% Russian ruble +1.3% Singapore dollar +0.7% Worst performing currencies in 2022*: Ghanaian cedi -38.9% Turkish lira -28.9% Colombian peso -15.9% Swedish krona -13.2% Hungarian forint -13.1% *of those covered periodically by Ebury’s Market Strategy team Written by: Enrique Diaz-Alvarez, Matthew Ryan (CFA), Roman Ziruk, Itsaso Apezteguia, Eduardo Moutinho, Michal Jozwiak – Ebury’s Market Analysts This article is part of the Ebury report
FX Daily: Time for the dollar to pause?

The Message From The ECB Caused The Euro To Fall Sharply

Kenny Fisher Kenny Fisher 03.02.2023 12:56
The euro is catching its breath on Friday after some sharp swings over the past two days. EUR/USD is trading quietly at the 1.09 line. Fed, ECB send euro on a wild ride This week’s central bank rate announcements sent the euro on a roller-coaster ride. The Fed’s 25-basis point hike pushed the euro higher by 1.16%, while the ECB hike of 50-bp sent the euro down by 0.76%. The end result is that the euro is back to where it started the week, just below the 1.09 line. The Fed rate decision sent the US dollar broadly lower, as investors were heartened by Jerome Powell saying that the disinflation process had begun and that he expected another couple of rate hikes before the current rate-hike cycle wrapped up. The markets are expecting inflation to fall faster than the Fed is thinking and are counting on some rate cuts this year, even though Powell said yesterday that he does not expect to cut rates this year. The markets were looking for a dovish bend to Powell’s remarks and once they found it, stocks went up and the US dollar went down. The ECB meeting came a day after the Fed decision, and the rate hike of 50-bp was expected. Still, the euro fell sharply, perhaps due to a confusing message from the ECB. On the one hand, in its policy statement, the central bank signalled another 50 bp hike in March and kept the door open for additional hikes after March. At the same time, ECB President Lagarde said in a press conference that rate moves would be determined on a “meeting by meeting” basis seemed to veer away from the message in the policy statement. The ECB continues to have trouble communicating with the markets, which will only add to market volatility as investors try to figure out the central bank’s plans. The week wraps up with the US employment report. The Fed has said that the strength of the labour market is a key factor in its rate policy, so today’s release could have a strong impact on the movement of the US dollar. Nonfarm payrolls fell from 256,000 to 223,000 in December and the downturn is expected to continue, with an estimate of 190,000 for January. The ADP payroll report showed a decline in December, but unemployment claims and JOLT job openings both moved higher, making it difficult to predict what we’ll get from nonfarm payrolls. The markets will also be keeping a close look at hourly earnings and the unemployment rate.  Read next: Japanese Startup Aerwins Technologies Will Be On NASDAQ| FXMAG.COM EUR/USD Technical 1.0921 is a weak resistance line, followed by 1.1034 There is support at 1.0878 and 1.0826 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Rolls-Royce share price has increased by over 60% since the start of the year

The Decision Of The Bank Of England Had A Negative Impact On The British Pound (GBP)

Kenny Fisher Kenny Fisher 03.02.2023 13:13
The British pound is showing little movement on Friday, after plunging 1.2% a day earlier. In the European session, GBP/USD is trading at 1.2210. Major central bank announcements have been in the spotlight this week, including the Federal Reserve and Bank of England rate decisions. GBP/USD posted modest gains after the Fed decision, rising 0.43%. Investors liked what they heard from Fed Chair Powell, even though he warned that rates would stay high and the battle against inflation was far from over. The markets are expecting inflation to fall faster than the Fed is thinking and are counting on some rate cuts this year, even though Powell said yesterday that he does not expect to cut rates this year. Powell did acknowledge that disinflation had started, which boosted risk sentiment and helped send the dollar broadly lower. Pound slides after BoE decision The pound fell sharply after the BoE raised rates by 50 basis points for a second straight time. As with the Fed, the markets were cheered by the dovish comments of Governor Bailey who said that inflation had turned a corner and noted that members had removed the word “forcefully” from its forward guidance statement. Bailey warned that inflation pressures remained and inflation risks were tilted upwards, but investors ignored this part of his message. Besides inflation, the Fed is focussed on the strength of the labour market, so today’s US job report could be a market-mover. Nonfarm payrolls fell from 256,000 to 223,000 in December and the downturn is expected to continue, with an estimate of 190,000 for January. The ADP payroll report showed a decline in December, but unemployment claims and JOLT job openings both moved higher, so this week’s employment releases have been mixed. The markets will also be keeping a close look at hourly earnings and the unemployment rate. Read next: Japanese Startup Aerwins Technologies Will Be On NASDAQ| FXMAG.COM GBP/USD Technical 1.2184 and 1.2104 are providing support There is resistance at 1.2289 and 1.2369 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Rates Spark: Crunch time

Today's ECB Policymakers Comments Seem To Help The EUR/USD Pair, The Australian Dollar Fall Against Strong US Dollar

Kamila Szypuła Kamila Szypuła 03.02.2023 14:06
The dollar rose slightly on Friday, maintaining some momentum after jumps in the previous session after a series of decisions by central banks in Europe. The rise in the USD can be attributed to some shift in trading position ahead of the closely watched US monthly employment report. Trading was relatively limited as markets awaited the latest US employment data later in the day, which could change US Federal Reserve policy. Weekly initial jobless claims in the US released on Thursday indicated strength in the labor market and boosted expectations for strong non-farm payrolls (NFP). USD/JPY The US dollar gained on the last day of the week and looks set to continue its bounce from the nine-month low recorded on Thursday, which is seen as a tailwind for USD/JPY. The Japanese yen, on the other hand, continues to benefit from expectations that high inflation could result in a more hawkish stance from the Bank of Japan (BoJ) later this year. Bets were lifted by Japan's nationwide core inflation, which hit its highest annualized level since December 1981. This is seen as another factor keeping USD/JPY in check, at least for now. The USD/JPY pair traded high around 128.80 at the beginning of the day, but fell in the following hours. Currently, the USD/JPY pair is trading below 128.40. EUR/USD Yesterday, the European Central Bank raised interest rates by half a percentage point on Thursday, but the euro fell below 1.0900 after ECB comments. During the ECB press conference, President Christine Lagarde acknowledged that the outlook for the eurozone has become less worrying for growth and inflation.  The ECB noted the likelihood of another similar rate hike next month, the meeting and its aftermath were in line with market expectations. Early Friday, ECB policymaker Gediminas Simkus said an interest rate cut this year was not likely. With a similarly hawkish accent, policymaker Peter Kazimierz noted that he did not see the March interest rate hike as the last one. These comments seem to help EUR/USD contain losses for now. The euro posted slight gains against the US dollar on Friday, thanks in part to news that the eurozone economy saw some gains last month. The EUR/USD pair in the European session is trading above 1.09 again at around 1.0940. Read next: Japanese Startup Aerwins Technologies Will Be On NASDAQ| FXMAG.COM GBP/USD The Bank of England raised interest rates for the tenth time but hinted that its tightening cycle may be coming to an end, while Federal Reserve Chairman Jerome Powell said in a press conference following the Fed's 25 bp rate hike that the process of "disinflation" in the United States seemed to be in progress. Moreover, BoE President Andrew Bailey said that inflation will continue to fall this year and faster in the second half of 2023. In fact, the central bank forecast that the annual CPI inflation in the UK will fall from the current 10.5% to around 4% in 2020. toward the end of the year. This, in turn, has fueled speculation that the current cycle of rate hikes may be coming to an end and weakening the pound sterling. GBP/USD gained momentum during the European trading hours and went positive above 1.2250 during the day. Currently, the GBP/USD pair is on the border of the level. AUD/USD The Australian dollar falls below $0.71, pulling back slightly from nearly eight-month highs on overall dollar strength. Despite this, Australians continue to be supported by expectations that the Reserve Bank of Australia will continue to tighten its policy. Currently, Aussie Pair is trading at around 0.7060. Source: investing.com, finance.yahoo.com
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

Forex Weekly Summary: EUR/USD, GBP/USD And AUD/USD Fell Sharply, USD/JPY Ended Above 131.00

Kamila Szypuła Kamila Szypuła 04.02.2023 12:45
The dollar jumped on Friday after data showed that US employers created many more jobs in January than economists had expected, potentially giving the Federal Reserve more leeway to hold interest rate hikes. The dollar recently rose 1.12% to 102.92 on the day against a basket of currencies, the highest since Jan. 12 and is on track for its best day since Sept. 23. USD/JPY USD/JPY started the trading week at 130.4790. For a day and a half, the pair traded in the range of 129.80-130.45. Subsequently, the USD/JPY pair started its decline below the lower limit and dropped below the 129.00 level. Trading below 129.00 lasted until Friday where in the US session the USD/JPY pair sharply rebounded to above 131.00 and thus ended the trading week at 131.15. The final level was just below the week's high of USD/JPY at 131.1940. The difference between the highest and the nanny level of trading is quite large, because the pair reached the lowest level at 128.1160. EUR/USD The EUR/USD pair started the trading week at 1.0875. For a day and a half, the pair traded below 1.0900. After that, the EUR/USD pair rose above 1.0900 and reached a weekly high of 1.1030. Trading above 1.0900 continued until Friday, where in the US session the EUR/USD pair fell sharply below 1.0800 and thus ended the week of trading at the week's low at 1.0798. The European Central Bank (ECB) raised its key interest rates by 50 basis points as expected and said it intends to make another 50 basis point hike in March, comments from ECB President Christine Lagarde weighed on the euro. Early Friday, ECB policymakers Gediminas Simkus and Peter Kazimierz said an interest rate cut this year was not likely. Read next: The UK Economy Expects A Decline And Is Gearing Up For Recession| FXMAG.COM GBP/USD The Cable Pair started the week at 1.2404. For the next two days, the GBP/USD pair traded around 1.2300 until it broke out at 1.2400, after reaching the weekly high, the pair traded just below this level. The drop below 1.2300 came closer to Friday where the GBP/USD pair plummeted below 1.2100. GBP/USD ended the week at 1.2056, which is the lowest trading level of the week, the lowest since Jan. 6 and its worst day since Dec. 15. The Bank of England, as widely expected, raised its key rate by a further 50 basis points to 4%, its highest level since autumn 2008, indicative of more sustained price pressures. However, the BoE removed the wording that "they will respond with force if necessary." Moreover, BoE President Andrew Bailey said that inflation will continue to fall this year and faster in the second half of 2023. In fact, the central bank forecast that the annual CPI inflation in the UK will fall from the current 10.5% to around 4% in toward the end of the year. This, in turn, has fueled speculation that the current cycle of rate hikes may be coming to an end and weakening the pound sterling. AUD/USD The AUD/USD pair started trading at 0.7111. The pair then traded in the 0.7000-0.7075 range. On Thursday, the pair managed to break above 0.7100 and record a weekly high of 0.7156. Closer to Friday, the couple began their decline. The Aussie Pair ended the week at its lowest level of trade for the week, at 0.6924. The Australian awaits the RBA's interest rate decision on Tuesday 7 February. With the December quarter 2022 CPI print showing headline inflation is still running strong at 7.8 per cent, expectations are for a further increase in the cash rate. Source: finance.yahoo.com, investing.com
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

The AUD/USD Pair's Price May Make A Correction Either

InstaForex Analysis InstaForex Analysis 06.02.2023 08:00
On Friday, the Australian dollar made an initial downward breakthrough as it aims to reverse into a medium-term decline. On the daily chart, the Marlin oscillator transitioned to the area of the downtrend. To fix the condition for a reversal, the price will need to settle under the MACD indicator line, which will probably already coincide with the support level of 0.6873 (low of January 19). After that, the price can reach the 0.6730 target. On the four-hour chart, the price slows down on the sign of the Marlin oscillator turning up. The price may make a correction either from the current levels or after the target level of 0.6873 is reached. Read next: Elon Musk Was Found Not Guilty In The Tweets Case| FXMAG.COM Relevance up to 03:00 2023-02-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334203
Rates Spark: Yields are looking up again

A Good PMI Figure Will Help The GBP/USD Price Take A Bit Of A Breather

InstaForex Analysis InstaForex Analysis 06.02.2023 08:01
The pound fell by 170 points or 1.39% on Friday. At the moment, the price is halfway to the target support at 1.1933 and is hovering in the consolidation range of December 2022. The UK Construction PMI for January will be released today and its forecast is 49.6 versus 48.8 a month earlier. A good figure will help the price take a bit of a breather before continuing to move towards the target of 1.1933. On the daily chart, the Marlin oscillator is slightly reversing upwards, confirming the idea of a short-term consolidation. On the four-hour chart, the price is in a sharp downtrend for the short-term. The Marlin oscillator is also slightly reversing upward. The market can take a break today as we expect weaker readings for Germany, England, Canada and Australia tomorrow. Relevance up to 03:00 2023-02-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334205
Forex: Euro against US dollar - technical analysis - May 18th

The Reversal Of The EUR/USD Pair To A Medium-Term Decline May Be Confirmed

InstaForex Analysis InstaForex Analysis 06.02.2023 08:04
Friday was spent assessing the problem we had in the morning. Why did the dollar index rise? Some believe that market participants have reconsidered how much they trust the Federal Reserve's words and that they don't see rate hikes coming to an end anytime soon, as the American economy shows good growth through the employment indicators. Nonfarm payrolls added 517,000 jobs in January against expectations of 185,000, the December figure was revised upward by 37,000. Unemployment fell from 3.5% to 3.4% with the economically active population rising from 62.3% to 62.4%. Average wages rose 0.3%. In addition, the services PMI rose from 49.2 to 55.2. But we don't quite share the same opinion. The U.S. base rate remains and will remain the highest (4.75%) even if the world central banks agree to wind up the cycle of rate hikes. The reason for such a sharp U.S. dollar reversal (read: falling markets) is due to the difference in economic growth between the U.S. and Europe, although some parameters in the U.S. are formally worse than in Europe (e.g., industrial production). As for the fall of the stock market, it is falling for several reasons: the base rate has become relatively high, which pressures the overcredited business and investors only needed a reason to leave such a risk, inflation is still unsteady, institutional investors can not buy the stock market due to lack of external support from the Fed (QE), individuals are leaving the stock market, as they have to spend on current life the financial backing they received back in the days of Covid. Also, investors are already ready to face the new global crisis based on numerous signs of it, including such a funny one as the "cardboard box index". The euro lost 113 pips on Friday, falling just short of the target support at 1.0758/87. Right below it is the MACD line. Consolidating under the range and the MACD line will confirm the reversal to a medium-term decline. You can take a break both today and tomorrow following the sharp movements on Thursday and Friday. On the four-hour chart, the price has settled and is moving below the balance and MACD indicator lines, the Marlin oscillator has relatively deeply penetrated the area of the downtrend, it can still fall further, but in order to brace for a breakthrough of 1.0758, it is better to unload a bit and rise. Relevance up to 03:00 2023-02-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334207
ECB cheat sheet: Difficult to pull away from the Fed

The Key Issue For The EUR/USD Pair This Week Is The Representatives Of The ECB And The Fed

InstaForex Analysis InstaForex Analysis 06.02.2023 08:09
The EUR/USD pair started the trading week rather quietly, without any gap, almost at the level of Friday's closing. This suggests that Friday's trading fuse has come to naught: the bears managed to pull the price under 1.0800, but further prospects for the downward movement were questionable. However, the quiet start of the trading week does not indicate that the pair will continue to move in the horizontal channel. On the contrary, we've got plenty of volatility ahead of us: bears will try to build on their success (or at least hold their positions within the frame of the 7th figure), while the bulls will be trying to take revenge to win back their lost positions. Every fundamental event will be used by traders to their advantage. Let's look at the main news of the week. Monday On Monday, February 6, markets will focus on European Central Bank President Christine Lagarde's speech. She will take part in a meeting with the president of the European Council, the head of the European Commission and the president of the Eurogroup. There are rarely any specific messages or intentions at this level of meetings, but given Lagarde's previous stance, she may repeat the hawkish signals indicating a willingness to raise rates at the March meeting by 50 points. This message won't have any impact on the euro (as it was mentioned at the ECB's February meeting). However, if the ECB head hints at further rate hikes, that's when the bulls will get a strong reason to launch a counterattack. Tuesday If Lagarde is the main newsmaker on the first trading day, then on Tuesday, February 7, traders will focus on her colleague Federal Reserve Chairman Jerome Powell. He will participate in a discussion hosted by the chairman of the Economic Club of Washington. The event is quite narrowly focused, so Powell is sure to comment on the latest Nonfarm. Let me remind you that the U.S. labor market data, released last Friday, turned out to be a pleasant surprise: the unemployment rate fell to a 53-year low (3.4%), and the indicator of employment growth jumped by 517,000(!). While the wage indicator (in annual terms) continued to show a downtrend. The latest figures allow Powell to be more confident not only about the March 25-point hike, but also about the longer term prospects. As of today, there is a 66% chance of a 25-point rate hike in May (according to the CME FedWatch Tool). But if Powell sounds indecisive in the face of strong Nonfarm (e.g. calling for inflationary growth), the dollar bulls will get a major blow and their position will shake considerably, even in the EUR/USD pair. Wednesday The economic calendar is not very eventful on Wednesday, February 8. The tone of the trades will be set by the Fed members, who will speak during the US trading session. You should pay attention to the stance of John Williams, head of the New York Fed. He has a permanent right to vote in the Committee and is considered one of the most influential members of the Fed. Ahead of the February meeting, Williams said that slowing rate hikes "makes sense" as "the Fed is nearing the end of its policy tightening cycle". If he reiterates that the end is near, the dollar will be under pressure. Actually, that was the reason why the greenback fell across the entire market after the Fed's February meeting: Powell made it clear that the central bank does not intend to exceed the previously declared target (5.25%), and possible calibration of the final point is only possible in the downward direction. If Williams voiced a similar position, the dollar will be under pressure. Also on Wednesday, the other Fed officials, Michael Barr (centrist) and Christopher Waller (predominantly hawkish), will speak. Read next: Elon Musk Was Found Not Guilty In The Tweets Case| FXMAG.COM Thursday Thursday's main report is Germany's inflation data. According to preliminary forecasts, the consumer price index will show an uptrend in January. The CPI may move up after two months of decline and post a reading of 8.9% (y/y). The harmonized consumer price index should similarly reflect an uptrend, coming in at 10.0% (after falling to 9.6%). If the real numbers match the forecasts (not to mention the greenback), the euro will receive substantial support. Let me remind you that last week's report on the growth of pan-European inflation turned out to be very contradictory: amid slowing overall inflation, the core index remained at a record high of 5.2%. The German figures may either reinforce concerns about price pressures in the European region or weaken the ECB hawks' position (the latter looks unlikely). Friday At the end of the trading week, two Fed members, Christopher Waller and Patrick Harker, will speak during Friday's U.S. session. They are considered as representatives of the "hawkish wing" of the Fed, so their comments may provide additional support to the greenback. There is also an important report on the Consumer Sentiment Index from the University of Michigan. It is a very important leading indicator of future consumer spending. According to preliminary projections, the index is expected to rise again (for the third month in a row), rising to 65.0 points (the highest since last April). Conclusions The forthcoming week is not full of important macroeconomic events. The key point is the ECB and Fed representatives (especially Lagarde and Powell) who are likely to assess the latest reports through the prism of future prospects. In addition, the German inflation report may lead to increased volatility in the EUR/USD pair. In general, at the moment, there are no signals that would indicate which position we should prioritize. Obviously, the "Nonfarm factor" has already played itself out for the most part, hence it is risky to enter selling. At the same time, Powell's more hawkish mood might encourage a bearish momentum: in that case, the pair might test the support at 1.0720 (the bottom line of the BB on the daily chart). But the alternative scenario in which the Fed chief (and his colleagues) remain cautious in spite of the strong Nonfarm is not excluded. In that scenario, bulls might seize the initiative (especially if Lagarde sounds hawkish and German inflation exceeds expectations). In this case, the price is likely to return to the range of 1.0850-1.0950. Relevance up to 02:00 2023-02-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334201
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The EUR/USD Currency Pair Finally Displayed A Reasonable Movement

Paolo Greco Paolo Greco 06.02.2023 08:13
  On Friday, the EUR/USD currency pair finally displayed a movement that could be characterized as reasonable and did not require decoding. Several significant reports that were released in the United States on Friday all performed better than expected. Some - a lot. Therefore, the strengthening of the US dollar was ultimately justified, and we did not need to "search for" the causes of such a movement. Remember how the market responded illogically to the Fed and ECB meetings a day or two earlier? Both central banks increased interest rates and maintained their "hawkish" stance. And as a result, the dollar fell first, followed by the euro. Naturally, we clarified that the market had already determined the meetings' well-known outcomes. Therefore, everything is rational. But despite what it may seem like, this conclusion is far from obvious. Back to the reports from Friday. With a forecast of 185–190 thousand, there were 517 thousand non-farms in January. With growth predicted to reach 3.6%, the unemployment rate dropped to 3.4%. With growth forecasts of 50.4-50.6, the ISM business activity index for the services sector improved from 49.2 points to 55.2 points. After such a collection of facts, wages ceased to be of interest to anyone. These statistics have demonstrated that the American economy is in a better state than some analysts have claimed. A recession may be avoided even at the current, high level of the Fed rate. On the one hand, it releases the Fed from its restrictions, which is excellent for the dollar. However, because the Fed has almost achieved the rate's high value, it is already irrelevant for the US dollar. However, a strong economy is preferable to a weak one. As a result, the US dollar may continue to benefit. Formally, the euro may continue to increase in the months to come. After all, compared to the Fed rate, the ECB rate may exhibit a more significant increase in 2023. However, the pair should now adjust lower by a few hundred points. The upward trend will then resume without any opposition. What surprises await us in the upcoming week? Let's now take a look at the week's schedule of events. Let's assume right away that there won't be many significant publications or events. Regarding the number of significant events, last week set a milestone, but it won't be this way every week. On Monday, the European Union will host the next address by ECB President Christine Lagarde, who has spoken five or six times in the past two weeks. We don't anticipate anything interesting from her because it's obvious that she can't make a big deal out of everything at every performance. Additionally, a retail sales report (not the most crucial report) will be released. And that's it for this week. There will also be speeches by Luis de Guindos and Isabelle Schnabel, both of the ECB Monetary Committee, but these are only side events. Additionally, following the European regulator's meeting last week. As a result, macroeconomics and the foundation are largely absent in the European Union this week. This suggests that although volatility may drop significantly, the pair may still move south. The CCI indicator last week hit the overbought level, which happens very infrequently and is a hint for a trend reversal. This is a significant technical point. Additionally, there was a consolidation below the moving average line, changing the local trend from upward to negative. However, the price is still above the crucial line on the 24-hour TF, so this resistance can stop the decline in quotes. Or at the very least, make it wait. In theory, since the underlying background no longer prevents it, now will be a favorable time to fall. We anticipate a further 300–400 point decrease in the value of the euro. Additionally, it will be seen that new figures on inflation or GDP will be published, based on which it will be feasible to predict how central banks will act in March. As of February 6, the euro/dollar currency pair's average volatility over the previous five trading days was 118 points, which is considered to be "high." So, on Monday, we anticipate the pair to trade between 1.0677 and 1.0913. The Heiken Ashi indicator's upward reversal will signal a round of corrective movement. Nearest levels of support S1 – 1.0742 S2 – 1.0620 S3 – 1.0498 Nearest levels of resistance R1 – 1.0864 R2 – 1.0986 R3 – 1.1047 Trading Suggestions: Below the moving average, the EUR/USD pair has been consolidated. Until the Heiken Ashi indication turns up, you can continue to hold short positions with targets of 1.0742 and 1.0677. After the price is fixed back above the moving average line, long positions can be initiated with a target of 1.0986. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones Relevance up to 05:00 2023-02-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334211
Rates Spark: Nothing new on the dovish front

The EUR/USD Pair Could See A Dip Into The Support Area

Torben Melsted Torben Melsted 06.02.2023 08:20
With the break below minor support at 1.0835, it was clear that wave 4 still was in progress in form of an expanded flat correction. We will be looking for more downside progress in wave C of 4 towards at least 1.0762 and possibly even closer to 1.0650. If wave C extends, we could see a dip into the support area between 1.0437 and 1.0500, but the odds for that outcome seem low. Short-term resistance is seen at 1.0876 and a break above here will indicate waves C and 4 being complete and wave 5 unfolding towards 1.1100 and possibly higher.   Relevance up to 06:00 2023-02-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311438
Analysis Of The CAD/JPY Commodity Currency Pair - 06.02.2023

Analysis Of The CAD/JPY Currency Pair Movement

InstaForex Analysis InstaForex Analysis 06.02.2023 08:28
With the success of the CAD/JPY Commodity currency pair breaking above its Penant pattern which was followed by a deviation from the MACD Histogram indicator with price movements that were also above the Moving Average movement, we can conclude that Buyers are starting to return to CAD/JPY which will make this commodity currency pair have the potential to appreciate and rally upwards in the next few days to test the equal high level (liquidity gathering place) at 101.14 and 105.71 will be the targets of both, but if on the way to these target levels there is one and another thing that makes this currency pair return to its original bias (Bearish), especially if it manages to break below the 95.30 level, the upward rally scenario described earlier will become invalid and cancel itself.     Relevance up to 04:00 2023-02-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/118841
The EUR/USD Pair Chance For The Further Downside Movement

The Cable Market (GBP/USD) Is Still Falling Sharply

Paolo Greco Paolo Greco 06.02.2023 08:33
On Friday, the GBP/USD currency pair fell by around 200 points. As we've already mentioned, positive macroeconomic indicators from overseas led to the decline of the pound (or, rather, the rise of the dollar). As a result, the movement of the pound was entirely logical and reasonable. As can be seen in the image above, the "double top" formation has finally developed, and it is now entirely conceivable to anticipate a collapse to the prior local minimum. As previously stated, we expect the pair to undergo another round of negative correction following its rapid increase of 2100 points. Recall that the Bank of England increased interest rates by another 0.5% to 4% last week. However, most market participants anticipate a new reduction in the rate of tightening next month, followed by a complete rejection of the rate hike. As a result, the "rate factor" is rapidly losing its ability to sustain the pound. Recall that the dollar started to weaken last fall when the US inflation rate started to decrease and there were rumors that the Fed would start to ease off on the pace of tightening. Except for a drop in inflation, the UK is currently experiencing roughly the same situation. Formally, it is declining, but only slowly. Despite what Andrew Bailey claims, the British regulator does not have the option of raising rates "until the bitter end." Even at 4%, inflation is not significantly decreasing. As a result, it must be raised to a minimum of 5.5–6%. BA won't be able to afford such a luxury because a far deeper recession than anticipated could occur in the economy. To balance between inflation and recession, the regulator is likely to do so. To lower inflation as much as possible and prevent a major recession, they will attempt to raise the rate as much as possible. The target for the next three to five years is to get inflation down to 2%, which is not likely to happen in the near future. As a result, everything now comes down to BA raising the rate gradually before refusing to tighten. For the pound, this is bad news. The week's most important report is on UK GDP. This week in the UK, there won't be many significant events, but there will be some. On Monday, a secondary index of economic activity in the construction industry will be made public. Reports on the GDP and industrial production are due on Friday. The market will pay attention to the GDP data. Forecasts suggest that the GDP will expand between 0.0 and 0.1% quarterly and between 0.02 and 0.4% yearly. Despite being at extremely low levels, these are nonetheless positive values. The UK economy contracted by 0.3% in the most recent quarter. The fourth-quarter GDP decline will contribute to the pound's further decline against the dollar. With a speech by Jerome Powell on Tuesday, everything will get underway in the United States. We think that this event is also incidental because Powell had last week's Fed meeting and was free to tell the markets whatever he wanted to. He did just that. Therefore, it is not necessary to anticipate hearing anything truly novel from him on Tuesday. The standard report on unemployment benefit applications will be released on Thursday, and the standard University of Michigan consumer confidence index will be released on Friday. 90% of the time, the movement of the pair will not be influenced by macroeconomics or the "foundation" this week. Trading must therefore begin primarily with "technology". An upward correction following a two-day decline is very likely, but it might not even start on Monday. Instead, it might start on Tuesday. Strong fundamentals from the previous week may cause an inertial fall of the pair for an additional one to two days. Volatility should decline in either event. The quotes on the 24-hour TF dropped below the crucial line, which is a huge help for the trend to go south. Over the previous five trading days, the GBP/USD pair has averaged 137 points of volatility. This figure is "high" for the dollar/pound exchange rate. As a result, on Monday, February 4, we anticipate movement that is constrained by the levels of 1.1913 and 1.2187. A round of upward corrective is indicated by the Heiken Ashi indicator's upward reversal. Nearest levels of support S1 – 1.2024 S2 – 1.1963 S3 – 1.1902 Nearest levels of resistance R1 – 1.2085 R2 – 1.2146 R3 – 1.2207 Trading Suggestions: The GBP/USD pair is still falling sharply during a 4-hour period. Therefore, until the Heiken Ashi indicator turns up, it is possible to hold short positions with targets of 1.1963 and 1.1913. If the price is fixed above the moving average line, long trades can be opened with targets of 1.2329 and 1.2390. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 05:00 2023-02-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334213
EUR: German IFO Data and Central Bank Hawkishness Impact Euro/USD Range Trade

FX: Timing the dollar decline

ING Economics ING Economics 06.02.2023 08:51
The dollar is around 10% off the highs seen in late September, and understandably the view is that the dollar bull cycle – which started summer 2021 – is well and truly over. Consensus expects the dollar to weaken further this year, and we agree Dollar bear trend could pick up speed in the second quarter At the heart of the bearish dollar view is the call that the Fed will shift to a reflationary stance in the second half of 2023, US short-dated yields will fall and those yield differentials will move against the dollar. This story should be particularly acute for EUR/USD, where sticky core inflation in the eurozone means that the European Central Bank will not be considering rate cuts until late 2024. At the same time, lower natural gas prices have seen the eurozone terms of trade improve markedly and justify fundamentally higher levels of the euro. Assuming that the China reopening story continues to evolve positively, we think this confluence of factors can drive EUR/USD steadily higher throughout 2023. Most of the gains, however, may come in the second quarter, when US inflation is seen falling quite sharply. Sustained EUR/USD gains beyond 1.15 may be harder to achieve in the second half – especially if US debt ceiling negotiations are pushed to the limit. Some would argue that the US debt ceiling is a bullish factor for the dollar – prompting a flight to quality. Yet the evidence from 2011 proves the contrary. Only were the US very close to an unthinkable sovereign debt default – i.e. extreme risk aversion – would the dollar derive any brief benefit. Read next: Elon Musk Was Found Not Guilty In The Tweets Case| FXMAG.COM USD/JPY should continue to fall throughout the year. Bank of Japan meetings will prove positive event risks for the yen as investors second-guess how quickly a new BoJ governing team will unwind the current very dovish settings. We target 120 here and the yen should outperform on the crosses whenever the benign investment conditions are challenged. Sterling is trading on a slightly steadier footing as the UK government attempts to restore fiscal credibility. The marginally better global investment environment is also helping the risk-sensitive pound. Sterling may hold its gains through the first half of the year as the Bank of England stays hawkish. But clearer signs of easing labour market and price pressures in the second half of 2023 will see conviction build of a forthcoming BoE easing cycle. EUR/GBP may well be ending the year nearer 0.90/91.  TagsFX Dollar   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
US-China Tensions Continue To Ramp Up, Dollar Off Its Highs

The Shooting Down Of The Observation Balloon Has Increased Tensions Between The US And China

Saxo Bank Saxo Bank 06.02.2023 09:00
Summary:  Nasdaq 100 plunged 1.8% and S&P 500 shed 1% in a hectic session weighed on by earnings disappointments and higher bond yields following the smashing January non-farm payrolls and the lowest unemployment rate since 1969. Yields on the 2-year Treasury surged 18bps and those on the 10-year climbed over 10bps. USD strength is back in focus, also aided by reports of Bank of Japan’s Deputy Governor Amamiya (who is seen as dovish) being tipped to be the front-runner for the top job at the BOJ.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) suffered from the double whammy of earnings disappointments and a surge in bond yields Index futures traded south on Friday during Asian hours as Apple (AAPL:xnas), Alphabet (GOOGL:xnas), and Amazon (AMZN:xnas) reported disappointing results. The losses widened when New York came in following the staggeringly hot job data. The benchmark indices managed to pare all losses through New York mid-day but failed to hold onto gains towards the close. Nasdaq 100 and S&P 500 slid back down to finish the choppy Friday session 1.8% and 1% lower respectively. The sell-off in the afternoon was broad-based, seeing all 11 sectors within the S&P500 falling, led by weaknesses in consumer discretionary, communication services, utilities, and real estate. Apple recovered from an early loss to settle at 2.4% higher while Alphabet lost 2.8% and Amazon tumbled 8.5%. Nordstrom soared 24.8% following a report of activist investor Ryan Cohen having built a stake in the fashion retailer. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) jumped across the front end, paring rate cut expectations Following the strong job data and a much better-than-expected ISM Services print, yields across the front end from the 2-year to 5-year Treasuries jumped around 18bps, bringing the 2-year to 4.29% and the 5-year to 3.66%. SOFR futures fully priced back a 25bp rate hike for the March FOMC and shed the rate cuts priced in for the 2nd half of 2023 to 45.5bps from 56bps. In addition to the hot 517K headline for the January payrolls, non-farm payrolls were revised up by 51K on average from July through December 2022. The Household Survey showed employment growth of 894K in January, bringing the unemployment rate down to 3.4%, the lowest since 1969. While the deceleration in average hourly earnings growth to 0.3% M/M and 4.4% Y/Y, supports the Fed’s disinflation narrative and the likelihood of a pause after one more hike in March, the job data poured cold water on the market’s expectations of rate cuts this year. The reaction in the longer end was relatively less volatile. Yields on the 10-year rose 10bps and those on the 30-year finished the session 7bps cheaper. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) in consolidation mood The Hang Seng Index declined 1.4% on Friday, extending the weekly loss to 4.5%. HSBC (00005:xhkg) slid 3% and Ping An Insurance (02318:xhkg) plunged 4.1%. Baidu (09888:xhkg), falling 4.6%, pulled back and pared some of its strong recent gains. Chinese real estate names declined, led by Country Garden Services (06098:xhkg) down 7.25%, while local Hong Kong developers gained following Hong Kong scrapped Covid-test requirements for mainland visitors. China internet and EV names were notable laggards. Southbound money was net outflow every day, for a total net outflow of USD 2.2 billion over the week. CSI300 was down nearly 1% on Friday with real estate, solar, electric equipment, non-ferrous metals, and construction materials leading the fall. Friday was the first time that there was a daily net outflow in Northbound money via Stock Connect since January 3 this year. Over the week, CSI300 inched down 1% and northbound inflows into A-shares amounted to USD 5.1 billion in total. On Friday, economic data were better than expected but they took a backseat to the risk-off sentiment and exhaustion after the Hang Seng Index advanced 10.4% and CSI300 climbed 7.4% in January. Mainland China’s Caixin Service PMI returned to the expansion territory at 52.9, well above the consensus of 51.0 and 48.0 in December 2022. Hong Kong’s PMI bounced to 51.2 in January from 49.6 in December and retail sales grew 1.1% in January while the street consensus and the prior month were expecting a decline. FX: All eyes on JPY again; dollar bid on jobs, geopolitics and BOJ new governor chatter The Japanese yen weakened on Friday after the US jobs report, along with the upside surprise in ISM services, brought the US 10yr yields up over 13bps and 2yr up 18bps. The weakness in the yen was further aggravated this morning in Asia after reports of BOJ deputy governor Amamiya being approached to be the new chief (read below). USD traders will have their eyes on Chair Powell’s speech and a host of other Fed speakers due in the week to assess if last week’s dovish stance is maintained even after the strong jobs and ISM services reports. NZDUSD testing support at 0.6300 after being the weakest on the G10 board on Friday, and AUDUSD testing 0.6900. GBPUSD broke below 1.2100 after being rejected at 1.2400 last week, and the GDP report this week could cause jitters as expectations of a delayed recession have kicked in. EURUSD below 1.0800 while USDCAD tests 1.3400. Crude oil (CLG3 & LCOH3) prices weighed down by risk-off tone A strong US jobs report on Friday sparked a risk-off tone after prospects of rate cuts this year continued to gain traction following the Fed meeting last week. This was exacerbated by concerns of rising inventories and weaker than expected demand in China. EU’s caps on Russian oil products kicked in over the weekend; 100/bbl for premium products, such as diesel, and USD 45/bbl for cheaper products, including fuel oil. Russian Energy Minister stated that there is no reason to sharply reduce output of Russian petroleum products because of the EU embargo, so little disruption to supplies can be expected. But OPEC’s supply cuts still keeps the market tight. WTI futures were slightly higher at $73.50 after slipping from $78 on Friday; while Brent found support at $80 for now. Commodities; metals head south; breakfast commodities charge The most strength is coming in breakfast plate commodities; orange juice, coffee, sugar, and soybeans, with prices mostly being supported by limited supply following the hurricanes last year. While wheat and lean hogs are lower. In metals, we’re seeing price weakness in commodities that have been benefiting from Chinese demand picking up. Iron ore, copper, and aluminium appear to be facing selling pressure, with investors and traders taking profits, awaiting more evidence of a pickup in activity in China. The higher US dollar is also acting as a catalyst to take profits. That said, longer term fundamentals in metal commodities supports higher prices over the longer term. Gold is also seeing a sharp pullback from its fresh cycle highs after the US dollar picked up strength (following that very strong US jobs report). That said, gold ETFs like GLD, have seen increased buying throughout the year. Click here for Ole Hansen’s commodity report. Gold (XAUUSD) broke below $1900 Gold broke back below USD1,900/oz as the prospect of monetary loosening shrank following the strong jobs data. Further strength in the US dollar could continue to weigh on the yellow metal, but rising US-China tensions could provide a leg of support to the safe haven metal. With $1872 support also broken, traders could be watching the next support level at $1845. Read next: Elon Musk Was Found Not Guilty In The Tweets Case| FXMAG.COM What to consider? US January jobs data to question the peak rates narrative   A shocking +517k gain in the US nonfarm payrolls on Friday vs. expectations of +188k, along with a net revision of +71k to the prior two months’ data, continued to suggest that labor market in the US remains far too tight despite abundant news of layoffs in January. Other aspects of the report were also robust. Unemployment rate saw a surprise fall again to 3.4% from 3.5% (exp. 3.6%), the lowest since 1969. Average hourly wage growth was unchanged at the 0.3% M/M pace, while the Y/Y fell to 4.4%, still less than the expected 4.3%, and the prior was upwardly revised to 4.8% from 4.6%. With market focusing on data more that what Fed Chair Powell said last week, this is likely to send some jitters as it questions the peak rates narrative for the Fed and took the 10year Treasury yields over 10bps higher on Friday. Goldilocks US ISM services report for January After the jobs report, ISM services also surprised on the upside on Friday. The index rose to 55.2 for January (vs. expected 50.4) from 49.2, in what was the biggest monthly gain since June 2020. Business activity accelerated to 60.4 (prev. 53.5, exp. 54.5). Employment lifted back into expansionary territory at 50.0 (prev. 49.4), and new orders surged higher to 60.4 (prev. 45.2). Moreover, the inflationary gauge of prices paid dipped a notch to 67.8 from 68.1, but still remained elevated by historical standards. Caixin China PMI in expansion, the first time since September 2022 Caixin China PMI Services came in at 52.9 in January, 4.9 points higher than the December reading beating the median forecast of 51.0. It was back to the expansion territory for the first time since September last year. The output and new orders sub-indices were back into the expansion territory for the first time in five months. The new export orders subindex rose to the highest level since April 2021 and was back in the expansion territory. The employment sub-index, however, stayed in the contraction territory for the third month in a row. Reports of Amamiya being approached to be the next BOJ Governor Japan’s Nikkei reported that the government has approached Bank of Japan Deputy Gov. Masayoshi Amamiya as a possible successor to central bank chief Haruhiko Kuroda. The week was supposed to bring possible BOJ chief nominations, as the nominees list has to be presented to parliament on February 10. However, FM Suzuki refused to confirm Amamiya’s nomination. Amamiya has helped Kuroda since 2013 on monetary policies, and is considered the most dovish among the contenders, which is thrashing hopes that BOJ policy normalization could progress under the new chief. US-China tensions heightened over the Chinese surveillance balloon incident The Chinese surveillance balloon floating over the U.S. soil for multiple days was finally brought down by an American fighter jet on Saturday. Both sides exchanged accusations over the incident. Before that, the U.S. Secretary of State Anthony Blinken announced on Friday that he was postponing his trip to China. For a global look at markets – tune into our Podcast.   Source: Market Insights Today: Hot U.S. jobs data; New BOJ governor chatter – 6 February 2023 | Saxo Group (home.saxo)
Gold Trading Analysis: Technical Signals and Price Movements

FX Daily: Three key themes for this week

ING Economics ING Economics 06.02.2023 09:40
Three threads are influencing market sentiment at the start of this week. First, Friday's very strong US jobs data, which now puts more pressure on Powell to sound less relaxed on lower rates. Second, the setback in US-China diplomatic relations, and possible negative impact on sentiment. Third, speculation on the next BoJ governor. USD may find support Reports suggest Masayoshi Amamiya has been approached to become the next Bank of Japan governor USD: Upside risks this week Three key themes are highly influencing the market mood at the start of this week: 1) Friday’s very strong US jobs data; 2) US-China tensions over the Chinese air balloon; 3) reports about the next Bank of Japan (BoJ) governor. The January jobs report in the US on Friday smashed expectations, showing a half-million increase in employment and the jobless rate falling to 3.4%. As highlighted by our US economist here, such a strong print surprisingly – but clearly – signals employers are still willing to hire despite multi-month falls in industrial production, residential construction output and disappointing consumer spending. One silver lining is that the wage growth slowed from a revised 4.8% to 4.4% year-on-year, a signal that firms are able to hire without offering meaningfully higher salaries despite the very tight labour supply. Still, this is clearly an inflationary jobs market on paper, and a 25bp hike by the Fed looks highly likely now. Fed Chair Jerome Powell in last week’s post-FOMC press conference outlined a potential “goldilocks” scenario where inflation declines without a material rise in unemployment. We’ll see how much confidence he has in this scenario tomorrow as he speaks at the Economic Club of Washington. A rate protest after the post-FOMC market reaction may signal the Fed is not as relaxed as it may have sounded last week about loosening financial conditions. More Fedspeak is scheduled for the rest of the week. The data calendar is rather quiet in the US this week, which leaves geopolitical themes more space to drive market sentiment. Hopes of an improvement in US-China relations have plummeted after the US shot down a Chinese air balloon which they claim contained spy equipment. China has reiterated it was a civilian aircraft that had strayed off course and reached US airspace, and has threatened retaliation. This looks like a major setback in what may have been an important bullish driver for global risk sentiment in 2023, as Beijing’s relationships with the West appeared on track for some relaxation at the same time as China’s reopening of the economy was happening. A rebound to the 6.85-6.90 area in USD/CNY could signal markets are effectively moving to discount more negative trade implications for China, which would buck the recent bullish trend on Chinese sentiment. Finally, USD/JPY briefly traded above 132.00 in early Asian trading after reports that Bank of Japan deputy governor Masayoshi Amamiya was approached by the government to become the next BoJ governor. He was largely seen as leaning on the dovish side and more likely to favour a continuation of Haruhiko Kuroda’s loose policy rather than deploying those structural changes to the yield curve control markets have been speculating on. It is too early to draw conclusions on this, and both data and market dynamics may have a bigger say on potential BoJ policy changes than the new governor: for now, however, markets may be more reluctant to add bearish Japanese government bond (JGB) positions, and USD/JPY could find some support.   All in all, these three themes appear to be pointing primarily at upside risks for the dollar this week. We think DXY could consolidate around the 103.00 mark until new first-tier data in the US are released next week and could reignite the re-rating of US growth and Fed rate expectations. Francesco Pesole EUR: ECB hangover effect This is also set to be a much quieter week in the eurozone. The big rally in EZ bonds after ECB President Christine Lagarde failed in her rate protest last week is another signal that the ECB has lost its grip on the rate market, and this is not great news for the euro. As discussed in our latest EUR/USD note, this could mean that another large EUR/USD may need to wait until the second quarter, when US short-term rates look more likely to drop and markets may gradually align with a “higher-for-longer” narrative by the ECB. Comments by ECB officials are the most interesting risk events to follow in the eurozone this week. We’ll hear from Robert Holtzmann this morning and from François Villeroy, Isabel Schnabel, Klaas Knot and Luis de Guindos over the next few days. Given the ongoing correction and soft momentum in EUR/USD, support around 1.0730-1.0750 in the pair would already be a welcome development for EUR bulls. Remember that the euro is highly exposed to a worsening in Chinese sentiment. We think that any rebound may lose steam around the 1.0870-1.0900 area. Elsewhere in Europe, the Riksbank will announce policy on Thursday. We expect a 50bp rate hike as inflation remains high and wage negotiations should boost wage growth, but the recent deterioration in the economic outlook and housing market instability warns against much more tightening beyond this point. EUR/SEK still faces upside risks this week, even though we remain bearish on the pair in the medium term. Francesco Pesole GBP: Growth data in focus this week Growth data is the highlight of this week’s UK calendar. Our economist expects the British economy to have narrowly avoided a technical recession in the fourth quarter. Still, a 1Q23-2Q23 recession is more than possible, although that could be milder than previously expected thanks to lower energy prices. Today, we’ll hear from Bank of England’s Catherine Mann and Huw Pill, who may start to address the market’s perception that last week’s 50bp hike was a dovish one, and that the BoE is very likely close to the peak in rates. Governor Andrew Bailey will testify before Parliament later this week. So, growth data and BoE speakers will be the two domestic inputs for the pound this week, although global risk sentiment, geopolitical developments and a supported dollar may work against any positive domestic news. Cable may heavily test 1.2000 soon. Francesco Pesole CEE: Inflation numbers as opportunity to reassess dovish expectations This week, we start with hard data from the economy in the CEE region. Today, we will see industrial production in the Czech Republic, which we estimate accelerated slightly in December. Tomorrow, we will see the same figure in Hungary, but there we expect a decline in the annual growth rate. The National Bank of Poland will meet on Wednesday and the National Bank of Romania on Thursday. In both cases, we expect rates to remain unchanged, in line with market expectations. Thus, the main focus this week will be on the inflation prints published on Friday. In Hungary, we expect inflation to increase from 24.5% to 25.5% YoY in January, above market expectations. In the Czech Republic, we forecast an increase from 15.8% to 17.6% YoY, also above market expectations. Also on Friday, the Czech National Bank will release the minutes from last week's meeting and the full new forecast, including the alternative scenario, which is currently the board's preferred path. In the FX market, generally good conditions persist for the CEE region, however, we may see a delayed negative reaction to Friday's downward slide in EUR/USD, especially in the case of the Hungarian forint and the Czech koruna at the start of the week. Nevertheless, we expect a rather quieter week. Friday should be more interesting as we expect inflation numbers to provide an opportunity for the market to reassess current dovish expectations, which should support the falling interest rate differential and support FX. Overall, however, we expect more of a stabilisation around current levels. We see a range of 23.80-24.00 EUR/CZK for the koruna, 388-390 EUR/HUF for the forint and 4.68-4.70 EUR/PLN for the zloty. Frantisek Taborsky Read this article on THINK TagsFX Dollar Bank of Japan Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
SNB stands firm in the face of market turbulence with 50bp rate hike

The Options Market Signals Surrounding The USD/CHF Pair Appear The Most Bullish

TeleTrade Comments TeleTrade Comments 06.02.2023 09:45
USD/CHF prints mild losses around 0.9250 as bulls retreat from a one-week high heading into Monday’s European session. In doing so, the Swiss currency (CHF) pair prints the first daily loss in three as market sentiment dwindles. Even so, the options market signals surrounding the USD/CHF pair appear the most bullish in 10 weeks, suggesting brighter chances of the quote’s further recovery. That said, the one-month risk reversal (RR), the spread between the call options and put options, prints the biggest weekly print since late November, to +0.10% at the latest. Read next: Difficult Decision Ahead Of The RBA, The Market Expects A 25bp Rate Hike| FXMAG.COM The underlying reason for USD/CHF retreat could be linked to the US Dollar’s sluggish moves ahead of Tuesday’s speech of Fed Chairman Jerome Powell. Also challenging the greenback buyers is the lack of major data/events up for publishing during the day. Also read: USD/CHF Price Analysis: Pullback looks favored before an upside break around 0.9280
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

The EUR/JPY Pair Is Expected Limited Upside Movement

TeleTrade Comments TeleTrade Comments 06.02.2023 09:49
EUR/JPY buyers keep the reins at five-week high despite recent struggle to overcome 100-DMA. Bullish MACD signals, sustained rebound from multi-day-old horizontal support keeps buyers hopeful. Convergence of previous support line from March, descending resistance line from late October appears crucial resistance. EUR/JPY grinds higher past 142.00 as bulls struggle to cross the 100-DMA heading into Monday’s European session. In doing so, the cross-currency pair justifies the bullish MACD signals, as well as a clear bounce off a horizontal support line, stretched from late September 2022, to lure the pair buyers. However, the 100-DMA challenges the EUR/JPY upside around the 143.00 threshold. In the case where the EUR/JPY prices remain firmer past 143.00, a convergence of an 11-month-old previous support line and a downward-sloping resistance line from late October 2022, around 145.00, could challenge the pair’s further upside. It’s worth noting that the EUR/JPY run-up beyond 145.00 won’t hesitate to challenge the late 2022 peak surrounding 148.40 while aiming for the 150.00 psychological magnet. On the flip side, pullback moves may initially aim for the 140.00 round figure before testing the 38.2% Fibonacci retracement of the pair’s March-October 2022 upside, near 139.23. Following that, the aforementioned horizontal support line comprising lows marked since late September 2022, near 137.35-30, will be in focus. Even if the EUR/JPY bears conquer the 137.30 support, the 61.8% Fibonacci retracement level near 133.55 can act as the last defense of the buyers. EUR/JPY: Daily chart Trend: Limited upside expected
InstaForex's Ralph Shedler talks Euro against Japanese yen

According To Economists At HSBC A Move Lower In The USD/JPY Pair Will Mostly Rely On The Outlook For BoJ Policy Change

TeleTrade Comments TeleTrade Comments 06.02.2023 09:56
A focus on Bank of Japan (BoJ) succession and prospective policy changes could see renewed JPY strength, according to economists at HSBC. Improving current account balance should also be helping “A move lower in USD/JPY over the coming few weeks will mostly rely on the outlook for BoJ policy change, but other more medium-term forces (such as improving current account balance) should also be helping in the background.”  “BoJ Governor Kuroda’s term ends on 8 April but the process of identifying his successor is likely to become more prominent in February. This will keep the narrative of potential policy change front and center in the coming weeks even if that change may have to wait for a number of months.” “With the JPY still undervalued (based on its real effective exchange rate) and residents underhedged, we think the ingredients are in place for a renewed move lower in USD/JPY.”
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The Downside Of The USD/CAD Pair Remains Limited

TeleTrade Comments TeleTrade Comments 06.02.2023 09:57
USD/CAD struggles to capitalize on a modest bullish gap opening on Monday. An uptick in crude oil prices underpins the Loonie and acts as a headwind. A combination of factors continues to benefit the USD and lends support. The USD/CAD pair fills the modest bullish gap opening on Monday and retreats to the 1.3400 mark during the early part of the European session. Crude oil prices edge higher and recover a part of Friday's slide to over a one-month low, which, in turn, is seen underpinning the commodity-linked Loonie and acting as a headwind for the USD/CAD pair. The downside, however, remains cushioned amid strong follow-through US Dollar buying interest. In fact, the USD Index, which tracks the greenback against a basket of currencies, builds on Friday's solid recovery from a nine-month low and continues to draw support from a combination of factors. The upbeat US jobs data could allow the Fed to stick to its hawkish stance and keep raising rates. The expectations push the US Treasury bond yields higher, which, along with the risk-off environment, is seen benefitting the safe-haven greenback. This, in turn, suggests that the path of least resistance for the USD/CAD pair is to the upside and any meaningful slide is likely to get bought into. There isn't any major market-moving economic data due for release from the US on Monday, leaving the USD at the mercy of the US bond yields and the broader market risk sentiment. Apart from this, traders will take cues from oil price dynamics to grab short-term opportunities around the USD/CAD pair.
The USD/INR Pair Traders Could Be The Cautious Mood Ahead Of The Key Inflation Numbers For India And The US

The Rupee (INR) Can Get Support From The Reserve Bank Of India

TeleTrade Comments TeleTrade Comments 06.02.2023 10:01
USD/INR remained well supported last week, aided by the firmer Dollar last Friday. The Reserve Bank of India (RBI) could provide some support to the Rupee is signals more rate hikes at this week’s meeting, economists at Commerzbank report. RBI set to hike further “The latest S&P Global services PMI for January for India remained strong at 57.2. The report noted new businesses during January which is helping to offset the slowdown in external demand. The other side of the coin however is that cost pressures remain firm. This is consistent with sticky core inflation, excluding food and energy. As such, RBI can’t afford to pivot too early to a neutral tone as yet.” Read next: Elon Musk Was Found Not Guilty In The Tweets Case| FXMAG.COM “We expect RBI to hike by another 25 bps to 6.50% this Wednesday and probably stick to a relatively hawkish bias.”  “Suggestions of more hikes from RBI could provide some support for INR.”
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The NZD/USD Pair Remains Vulnerable To Extend The Recent Pullback

TeleTrade Comments TeleTrade Comments 06.02.2023 10:54
NZD/USD stages a modest recovery from a one-month low, though lacks follow-through buying. A stronger USD, along with the risk-off environment, acts as a headwind for the risk-sensitive Kiwi. The fundamental backdrop supports prospects for an extension of the recent decline for the pair. The NZD/USD pair finds some support near the 0.6300 mark and rebounds a few pips from a one-month low touched earlier this Monday. Spot prices, however, struggle to capitalize on the move and remain vulnerable to extend the recent sharp pullback from the highest level since June 2022 touched last week. A combination of factors assists the US Dollar to build on Friday's strong recovery from a nine-month low and caps the upside for the NZD/USD pair. The upbeat US monthly jobs report forced investors to scale back their expectations for an imminent pause in the Fed's policy-tightening cycle. This, along with the prevalent risk-off environment, further underpins the safe-haven buck and acts as a headwind for the risk-sensitive Kiwi. The headline NFP print surpassed even the most optimistic estimates and showed that the US economy added 517K new jobs in January. Furthermore, the unemployment rate unexpectedly dipped to 3.4% during the reported month and pointed to the underlying strength in the US labor market. This could allow the Fed to keep raising interest rates, which, in turn, pushes the US Treasury bond yields higher and continues to benefit the greenback. Meanwhile, expectations that the US central bank will stick to its hawkish stance for longer fuel concerns about economic headwinds stemming from the continuous rise in borrowing costs. Adding to this, unimpressive quarterly earnings reports from tech companies leads to a further decline in the equity markets. The fundamental backdrop seems tilted firmly in favour of the USD bulls and supports prospects for additional losses for the NZD/USD pair. Read next: The US Judge Denied The FTC's Request, Giving The Meta An Important Victory| FXMAG.COM There isn't any major market-moving economic data due for release from the US on Monday, leaving the greenback at the mercy of the US bond yields. Apart from this, the broader risk sentiment might influence the USD price dynamics and contribute to producing short-term trading opportunities around the NZD/USD pair.
The Commodities Feed: US announces SPR purchase

US Crude Oil Is Back Into Last Year’s Bearish Trend, The Latest US Jobs Data Will Likely Support The USD Bulls

Swissquote Bank Swissquote Bank 06.02.2023 11:52
Very strong US jobs data released last Friday hit the Federal Reserve (Fed) doves, sent equities lower, the US yields and the US dollar higher.And the latest US jobs data will likely support the US dollar bulls this week, as we don’t have much on the economic calendar that could temper Friday’s monstrously strong NFP read, and remind us that the US economy is still slowing. Japan Plus, the fresh selling pressure on the Japanese yen will likely give an extra hand to the Fed hawks, on weekend news that the potential new Bank of Japan (BoJ) Governor, Masayoshi Amamiya will be dovish. In the light of the latest macroeconomic developments, a revision to medium term outlook is necessary. Forex • The dollar-yen’s latest jump above the 130 mark could be sustainable in the short to medium run.• The EURUSD traders may be happy to call it a good trade and retreat to the sidelines. • Cable could sink into bearish consolidation zone. Adani Elsewhere, the Adani selloff enters the third week, and things go from bad to worse as in increasing number of banks don’t accept Adani holdings as collateral anymore. US vs China The Chinese spy balloon that was flying over some strategic points in the US renewed tensions between US and China, and that could throw a floor under the gold’s selloff. Curde Oil And US crude is back into last year’s bearish trend, with however risks of tight supply, and Chinese reopening hanging in the air. Read next: The US Judge Denied The FTC's Request, Giving The Meta An Important Victory| FXMAG.COM Watch the full episode to find out more! 0:00 Intro 0:31 That monstrously strong US jobs data shakes market dynamics 2:39 Next thing to watch! 3:48 Equities dive 5:33 USDJPY to extend gains above 130 6:59 EURUSD to pause rally 8:30 GBPUSD to slip below 1.20 9:43 XAU boosted by US-China’s ballooned tensions 10:14 US crude slips into last year’s bearish trend Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #NFP #wages #jobs #data #Fed #FOMC #inflation #expectations #Powell #USD #EUR #GBP #JPY #XAU #US #China #spy #balloon #Adani #selloff #crude #oil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

The Aussie Pair (AUD/USD) Is Steady On Monday

Kenny Fisher Kenny Fisher 06.02.2023 13:56
After a miserable end to the week, the Aussie is steady on Monday and is trading at 0.6912. The January US nonfarm payrolls was a blowout that shocked the markets. The economy created a stunning 517,000 new jobs, crushing the estimate of 185,000 and well above the previous read of 260,000. The unemployment rate fell from 3.5% to 3.4%, its lowest rate since 1969. There was more positive news as the ISM Services PMI climbed back into expansion territory with a reading of 55.2, up from 49.2 and above the forecast of 50.4 points. The US dollar surged against most of the major currencies after the employment report, while equity markets were down. The Australian dollar plunged by 2.2% on Friday. There had been speculation that the Fed might deliver a “one and done” rate hike in March which would end the current rate-hike cycle, but the job report has poured cold water on those hopes. The labour market is running much too hot for the Fed’s liking and wage growth remains an important driver of inflation. Fed member Mary Daly called the employment release a “wow number” and said that the Fed’s December forecast of a peak rate of 5.1% was a “good indicator” of Fed policy. RBA expected to raise rates The RBA will be in the spotlight on Tuesday with its monthly rate announcement. The central bank is expected to raise rates by 25 basis points, which would bring rates to 3.35%, a 10-year high. This would mark a fourth straight hike of 25 bp, as the RBA continues to fight inflation with steady but modest rate hikes. There are signs that rising interest rates are starting to bite the economy, with today’s retail sales release of -3.9% the latest reminder. The cash rate is projected to peak around 3.6%, although it could rise further if inflation remains stickier than expected. The employment market remains robust, allowing the central bank to continue raising rates as it sees fit. Read next: The US Judge Denied The FTC's Request, Giving The Meta An Important Victory| FXMAG.COM AUD/USD Technical AUD/USD faces resistance at 0.6962 and the round number of 0.7000 0.6841 and 0.6761 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
InstaForex's Ralph Shedler talks Euro against Japanese yen

USD/JPY Pair Is Trading Above 132.00, The Aussie Pair Is Near 0.6900

Kamila Szypuła Kamila Szypuła 06.02.2023 14:35
The US dollar surged against its major trading partners early Monday ahead of a weak week of economic data and speeches by Fed officials resumed. The week starts calmly on Monday without key data. The US Monthly Employment Report (NFP) released on Friday showed that the economy added 517,000 jobs in January. jobs, significantly exceeding the consensus estimate. Moreover, the unemployment rate unexpectedly fell to 3.4%, the lowest level since May 1969. USD/JPY The prevailing risk-avoiding environment – as indicated by the generally weaker tone in equity markets – provides a safe haven for the Japanese Yen (JPY) and acts as a headwind for USD/JPY. The yen came under pressure during the Asian session after it was reported that the Japanese government had approached Bank of Japan (BoJ) Deputy Governor Masayoshi Amamiyi as a possible successor to Governor Kuroda. Market participants are of the opinion that Lieutenant Governor Amamiya will continue the policy of Governor Kuroda. The Japanese government has since dispelled rumors that it had approached Amamiya with a new BoJ governor to be announced in February. So USD/JPY started the week with a pattern above 132.00. Over the course of the day, the pair moved back below 132.00 but has now recovered and is trading at 132.1530. EUR/USD Rising tensions between the United States and China add to the bleak mood. On Friday, President Joe Biden postponed US Secretary of State Blinken's upcoming trip to China after a suspicious Beijing observation balloon that was flying in US skies was shot down. In terms of data, European figures were disappointing. On the one hand, Germany published December's factory orders, which fell by 10.1%YoY, much worse than expected. On the other hand, retail sales in the euro zone fell by 2.7% MoM in January. Moreover, we are likely to hear more aggressive statements from Lagarde, citing higher core inflation and growth forecasts. The EUR/USD pair stopped trading below 1.0790. At the beginning of the week, the EUR/USD pair is holding above 1.0765. Read next: Adani Group Company's Crisis Is Gaining Momentum, Finland Is The Happiest Country| FXMAG.COM GBP/USD The British pound has not enjoyed a good reputation lately. The economic data was not strong enough to support sterling against its rivals, while the ongoing strikes and the threat of more in the coming weeks hit the mood. On Friday, the Office for National Statistics (ONS) will release preliminary GDP data for Q4. Growth in the UK stalled in the fourth quarter of last year and may have reversed, fueling further recession fears. The GBP/USD pair tried to break above 1.2050 on Monday. Currently, the GBP/USD pair is trading above 1.2060. AUD/USD The Australian dollar collapsed on Friday after soaring US non-farm payrolls (NFP) data pushed the US dollar higher. Investors are cautious ahead of this week's decision by the Reserve Bank of Australia, which is expected to raise interest rates by 25 basis points for the ninth consecutive time. Annual inflation in Australia rose 7.8% in December, the largest increase since 1990 and above market forecasts of 7.5%. The Aussie pair in the early hours of trading tried to catch up and climbed above 0.6940 but failed to maintain momentum and the Aussie Pair trades below that level again near 0.6900. Source: wsj.com, finance.yahoo.com
Forex: Euro against US dollar - forecast on April 24th, 2023

The EUR/USD Pair Is Expected To Resume Lower Again

Oscar Ton Oscar Ton 07.02.2023 08:06
Technical outlook: EURUSD dropped through the 1.0709 lows late in the New York session on Monday before finding mild bids. The bears might not be done yet as they prepare to drag further towards the 1.0481 initial support in the near term.The single currency pair is seen to be trading close to 1.0740 at this point in writing and is expected to resume lower again sooner than expected. EURUSD is now looking to produce a larger-degree corrective decline against the 1.1025 high recorded last week. The meaningful initial support is seen at 1.0481 and a break lower will confirm the termination of its initial leg lower. Prices could pull back thereafter and resume lower towards 1.0100-20 to complete the corrective decline. EURUSD would remain well supported in the 1.0100-20 range since it is the Fibonacci 0.618 retracement of its earlier rally between 0.9535 and 1.1025 levels respectively. Alternatively, if the price continues to drop below 0.9860, it could confirm a potential continuation below the 0.9535 lows. Either way, the instrument is looking lower at least towards the 1.0100-20 range in the medium term. Trading idea: Potential bearish move against 1.1025 Good luck!   Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311595
US core inflation hits 5.5% and it's the second lowest reading since November 2021

Intraday Dips Of The US Dollar Index Remain Possible

Oscar Ton Oscar Ton 07.02.2023 08:11
Technical outlook: The US dollar index rallied through the 103.40 highs during the New York session on Monday before finding resistance. The index is seen to be trading close to 103.10 at this point in writing as the bulls prepare for the next run higher up to 104.50. Intraday dips remain possible and support comes in just below 103.00 to consider adding potential longs. The US dollar index is now on its way to carving a meaningful retracement towards 106.50 and up to 109.40 levels in the next several weeks. The initial price resistance is also seen through 105.35, which should be the near-term target for the bulls to break higher. We can expect a meaningful pullback thereafter through 103.00 before the rally could resume. The US dollar index is expected to reach the 109.00-40 zone to complete its corrective rally, which is also the Fibonacci 0.618 retracement of the entire drop between 114.70 and 100.50 levels respectively. A high probability remains for prices to turn lower from there but a persistent push above 111.65 will confirm that the bulls are looking to target fresh highs. Trading plan: Potential bullish wave against 100.50 Good luck!   Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311597
Bank of Japan keeps the rate unchanged, Tokyo Core CPI increases to 3.5%

The USD/JPY Price Is Trying To Reverse The Downtrend

InstaForex Analysis InstaForex Analysis 07.02.2023 08:14
Yesterday, the Japanese yen lost 146 points on news about the next Bank of Japan governor as current BOJ Governor Haruhiko Kuroda is set to leave his position on April 8. Deputy Governor Masayoshi Amamiya, a traditional dove on the Board, was reportedly approached to be the next BOJ head. On the daily chart, the resistance of the MACD indicator line stopped the pair's growth. The opening of the week occurred with a gap, and it is still not closed. The Marlin oscillator is turning down, so it is more likely that the price will close the gap and reach the support at 130.00, rather than continue rising to the target at 133.70. All chart lines are embedded lines of the global hyperchannel of the monthly chart with its beginning from September 2012. Overall, however, the price is trying to reverse the downtrend that reached its lowest point on January 16, so the 137.60 target looks achievable in the medium-term. We can see the intention to close the gap on the four-hour chart, but only the reversal of the signal line of the oscillator confirms this intention, which is still not enough for us to make a trading decision. The decline will probably have a complex form (saw-toothed).   Relevance up to 03:00 2023-02-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334315
InstaForex's Irina Manzenko talks British pound amid latest events

The Current Short-Term Trend Of The GBP/USD Pair Is A Downtrend

InstaForex Analysis InstaForex Analysis 07.02.2023 08:17
On the daily chart, the British pound price has settled below the balance indicator line. The current short-term trend is a downtrend, but the reversal of the oscillator line indicates a possible correction today. Once the correction ends, I expect GBP to fall to the target support at 1.1933. It is likely for the bullish correction to not reach 1.2155, since the nearest resistance is the balance indicator line. On the four-hour chart, a miniature convergence of the price with the Marlin oscillator has been formed. It may serve as a confirmation of today's correction. As a result, the Marlin oscillator will discharge, approach the zero line, and from there it is possible to move downwards.   Relevance up to 03:00 2023-02-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334317
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

It Is Possible For The EUR/USD Pair To Enter A Bullish Correction

InstaForex Analysis InstaForex Analysis 07.02.2023 08:20
Yesterday, the euro managed to overcome the support of the 1.0758/87 target range as well as the MACD line, which has already been embedded. Now the nearest target is 1.0660, followed by 1.0595. The range of these levels represents the consolidation of December. Traditionally, there is a correction after a sharp downtrend, afterwards, the pair will enter growth in the medium-term. It is possible for the pair to enter a bullish correction from the range of 1.0595-1.0660. On the four-hour chart, the price has settled under the lower limit of the 1.0758/87 range, the signal line of the Marlin oscillator slightly turned up, and this range will probably be tested. I expect EUR/USD to fall further   Relevance up to 03:00 2023-02-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334319
Technical Outlook Of The Main EUR/USD Currency Pair

The Euro To US Dollar (EUR/USD) Pair Is Still Moving Lower

Paolo Greco Paolo Greco 07.02.2023 08:22
As predicted yesterday, the EUR/USD currency pair continued to decline on Monday, albeit with less volatility. Given that neither the US nor the EU released any significant macroeconomic information or basic background yesterday, the movement on Monday best satisfies the definition of "inertial." Thus, the euro's value continued to decline entirely as a result of last week's events, notably the outcomes of the Fed and ECB meetings and the American media's publications on Friday. This movement could finish today and an upward correction could start because we predicted it would last for another one or two days. We continue to anticipate that the European currency will continue to decline. A downward trend is the most likely course of action given the pair's recent extreme overbought condition. Additionally, sales signs are also beginning to emerge. The pair was fixed below the moving average line on the 4-hour TF, which is noteworthy. Today, the price can already pass the crucial threshold on the 24-hour TF. When these two signals are merged, the pair can fall by hundreds of points. Additionally, we must keep in mind that there won't be much in the way of macroeconomic and fundamental background this week. There won't be any significant reports, and Christine Lagarde's address didn't reveal any new information. What additional information could there possibly be given that practically all ECB officials have recently stated the necessity of continuing to tighten monetary policy? Since the regulator would have already started a modest slowdown if it wanted to stop its tightening, there is now no question that the rate will increase by at least 0.75%. There will be at least two more increases of 0.5% and 0.25% if it does not slow down at the February meeting. The ECB's planned tightening of monetary policy, however, is a "double-edged sword." Since the market is already prepared for such an event, quotes can already reflect it. Therefore, rhetoric with a longer-term view is needed from Christine Lagarde, Luis de Guindos, or Isabelle Schnabel. If they give any indication or make it clear that they intend to raise the rate in the second half of 2023, this might lead to a new round of buying of the euro since the Fed rate will have undoubtedly risen by then. Read next: USD/JPY Pair Is Trading Above 132.00, The Aussie Pair Is Near 0.6900| FXMAG.COM Can the inflation rate rise again? Another option is to approach the issue differently. Both in the United States and the European Union, inflation has been slowly declining over the past few months. A lot of individuals, who have grown accustomed to this phenomenon, think that the consumer price index will now decline (at some rate or another) until it reaches 2% or such. A year is implied. The fact that inflation has been falling in recent months as a result of lower energy transport prices is not surprising. The impact of this occurrence will eventually stop having an impact on prices, and inflation may then stop accelerating. In a few months, this will likely occur. It is also important to keep in mind that the effects of a rapid rate increase by the ECB and the Fed may eventually "fade into the background." If the rate has increased to 4.75% (in the US), it does not follow that inflation will continue to decline indefinitely. The Fed will need to decrease the key rate quickly to stop inflation. In general, we think that the monetary policies of the Central Bank may be changed more than once in 2023. As a result, making long-term predictions is useless. To make them, too many aspects must be taken into account. By the way, the armed confrontation in Ukraine is still going on and has not ended. Everyone is aware of the terrible effects it had on the pound and the euro last year. This year, history might repeat itself. As of February 7, the euro/dollar currency pair's average volatility over the previous five trading days was 121 points, which is considered "high." So, on Tuesday, we anticipate the pair to move between 1.0614 and 1.0856. The Heiken Ashi indicator's upward reversal will signal a round of corrective movement. Nearest levels of support S1 – 1.0742 S2 – 1.0620 S3 – 1.0498 Nearest levels of resistance R1 – 1.0864 R2 – 1.0986 R3 – 1.1047 Trading Advice: The EUR/USD pair is still moving lower. Until the Heiken Ashi indicator turns up, you can maintain short positions with a target price of 1.0620. After the price is fixed back above the moving average line, long positions can be initiated with a target of 1.0986. Explanations for the illustrations: Channels for linear regression - allow us to identify the present trend. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.         Relevance up to 05:00 2023-02-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334321
The GBP/USD Pair Is Expected The Consolidation To Continue

The GBP/USD Currency Pair Resumed Its Downward Trend

Paolo Greco Paolo Greco 07.02.2023 08:27
Without even an indication that a correction was about to start, the GBP/USD currency pair resumed its downward trend on Monday, which started after last week. As market participants might not have enough time to thoroughly process the outcomes of the Fed and BA meetings, as well as Friday's nonfarm payrolls and unemployment in the United States, we forewarned yesterday that the inertia movement could continue on Monday. That is exactly what happened, but because the overall decline in quotes is already above 300 points, the pair should at least begin to move upward. Even the Heiken Ashi indicator, which often responds the quickest to the start of a correction, has not yet come up at this time. The "double top" is still forming, thus the quotes should eventually decline to their previous local minimum (that is, below the level of 1.1841). As we have stated, we are anticipating both the decline of the British and the European currencies. The market has already fully determined how the Fed and BA rates diverge. In 2023, the British pound might still expand, but this will need new, strong fundamental reasons or factors. The British pound had to adjust downward after increasing by 2,100 points during the previous three months; this should be kept in mind. There was a downward trend developing everywhere you turned. Even though we've been waiting for it previously, it's better now than never. We think that the Bank of England's expected decision to cut down the pace of further tightening of monetary policy at its upcoming meeting may be the main cause of the British pound's decline in the coming weeks. It is unlikely that the regulator can afford to keep raising the rate by 0.5% per meeting given that the BA rate has already gone to 4%. It can increase to 6% at this rate, which is probably not what BA has in mind. In actuality, the UK economy is most susceptible to tighter monetary policy. Andrew Bailey predicts that the recession will persist for at least five quarters. The losses will be roughly 1% of GDP over this time, but if the rate keeps increasing at its current rate, the economic drop might be significantly greater. We believe the regulator is trying to prevent this. To reduce inflation, he will therefore rely on additional factors in addition to his tightening agenda. The UK GDP figure is significant, but it won't support the pound. There will only be one significant report this week: the UK GDP for the fourth quarter, as we have already stated. Experts predict that the indicator, which dropped by 0.3% in the previous quarter, may now rise by 0.1%. A 0.1% increase, however, will undoubtedly demonstrate that the British economy is on the verge of recession and that it is still strong enough to support the pound sterling. Trading still repels the market when it comes to making trading judgments. Recall that a similar situation occurred last year when the euro and the pound were declining as a result of geopolitical events and the Fed's rapid rate hike. The pound has been increasing over the past four to five months due to a strong probability of a reduction in the Fed's pace of tightening policy. Now, a new cycle of long-term depreciation may start due to the possibility that the BA may also slow down its pace to a minimum step. And the GDP report won't make the slightest difference. Currently, inflation is the only report that is truly significant. However, even this doesn't matter much in the UK scenario because the indicator essentially stays the same. If the connection "lower inflation - an increased likelihood of a pause in rate hikes" holds true for other central banks, it does not for the Bank of England because inflation does not decline and the regulator cannot raise rates indefinitely. As a result, for the time being, we think that the pound will keep falling since it lacks growth drivers. The pair confidently consolidated below the crucial level on the 24-hour TF, which is also a strong sell signal. The Senkou Span B line, which at this time runs about the 18th level, is the lowest point to which the quotes can now descend. Read next: USD/JPY Pair Is Trading Above 132.00, The Aussie Pair Is Near 0.6900| FXMAG.COM Over the previous five trading days, the GBP/USD pair has averaged 136 points of volatility. This figure is "high" for the dollar/pound exchange rate. Thus, on Tuesday, February 7, we anticipate movement that is contained inside the channel and is constrained by levels 1.1907 and 1.2180. The Heiken Ashi indicator's upward turn indicates the start of an upward correction. Nearest levels of support S1 – 1.2024 S2 – 1.1963 S3 – 1.1902 Nearest levels of resistance R1 – 1.2085 R2 – 1.2146 R3 – 1.2207 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair is still falling sharply. So long as the Heiken Ashi signal does not turn up, it is now possible to hold short positions with targets of 1.1963 and 1.1907. If the price is fixed above the moving average line, long positions can be initiated with targets of 1.2268 and 1.2329. Explanations for the illustrations: Channels for linear regression - allow us to identify the present trend. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 05:00 2023-02-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334323
Forex: Euro against US dollar - technical analysis - May 18th

The EUR/USD Pair Is In A Downtrend Without Any Correction

Paolo Greco Paolo Greco 07.02.2023 08:30
M5 chart of EUR/USD. On Monday, the EUR/USD pair was bearish. In spite of the empty macroeconomic calendar, traders found a reason to sell the instrument. Yet, a couple of weeks ago, there was the opposite situation. Nevertheless, the eurozone saw the release of several macro reports. Thus, its services PMI rose to 46.1 in January, and retail sales dropped by 2.7% in December. However, the market showed no reaction to the results. The decline in EUR/USD came in the North American session. No macro releases were scheduled for the day in the United States. ECB President Lagarde's speech did not contain any new information or hints. No trading signals were generated on Monday. Technically, there were two signals made. The first one was produced at the close of the market on Friday. The second one was formed on Monday night. Neither of them should have been priced. So, no positions were opened. Unfortunately, a good price movement on Monday was missed. COT report: The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since September. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. In the reporting week, non-commercial traders opened 9,500 long positions and 2,000 short ones. The net non-commercial position grew by 7,500. The number of long positions exceeds that of short ones by 134,000. It now remains to be seen how long large traders will be bullish. From the technical point of view, a bearish correction should have already occurred. Traders will unlikely stay bullish for another 2 or 3 months. Even the net non-commercial position shows that it is time for a correction. In total, there are 52,000 more long positions now among all groups of traders (732,000 vs 680,000). Read next: USD/JPY Pair Is Trading Above 132.00, The Aussie Pair Is Near 0.6900| FXMAG.COM H1 chart of EUR/USD. According to the H1 time frame, the pair is in a downtrend without any correction. On Monday, volatility somewhat decreased. The pair may tumble by 200-300 pips today. The tightening factor was priced by the market in December and January. On Tuesday, important levels are seen at 1.0485, 1.0581, 1.0658-1.0679, 1.0736, 1.0806, 1.0868, and 1.0938 as well as Senkou Span B (1.0856) and Kijun-sen (1.0871). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Don't forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On February 7, the ECB's Isabel Schnabel and the Fed's Jerome Powell will deliver speeches. However, both policymakers are unlikely to share some new information since both central banks held their board meetings only last week. Therefore, the market will pay little attention to the officials' speeches. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.   Relevance up to 06:00 2023-02-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334325
Small factors combine to pressure credit

The Potential Downside Of The EUR/USD Pair Is Becoming Very Limited

Torben Melsted Torben Melsted 07.02.2023 08:34
The expanded flat correction in wave 4/ that has unfolded since the 1.0925 peak is now close to completion. We could still see EUR/USD drop to 1.0650, but the potential downside is becoming very limited. Hence, the bottom and the completion of wave 4/ could be seen anytime now. Short-term we will need a break above minor resistance at 1.0799 as confirmation that wave 4/ has completed and wave 5/ has taken over for a rally towards 1.1108 as the next upside target.   Relevance up to 06:00 2023-02-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311611
According to InstaForex analyst, demand for British pound may not increase soon

Several Technical Indicators Are Signaling The Pound's Decline

Paolo Greco Paolo Greco 07.02.2023 08:44
M5 chart of GBP/USD GBP/USD managed to avoid sharp losses on Monday, but still fell several dozens of points. In general, it moved mostly sideways than downward, so we can say that the market "recovered" from the events of the previous week, which triggered the fall of the British currency by more than 300 pips. There was almost no macro data yesterday. The only thing worth mentioning was the UK construction PMI, which fell by 0.4 points to 48.4 in January. The pound lost about 40 points after this report, but globally it did not influence the alignment of forces between the pound and the dollar. This week, fundamentals and macroeconomics might be weak, so we will probably witness a flat or movement with just a short trend in the coming days. Speaking of trading signals, they were also quite dull. The first and only trading signal was formed in the middle of the US trading session, when the price rebounded from 1.2007. After that it managed to go up about 20 pips, but anyway the signal was formed too late to work it out. Therefore, there were no deals on Monday. After the pair's fall, lines of the Ichimoku indicator have not yet had time to "catch up" to the price, so they are much higher and almost do not participate in the process of forming a signal. COT report The recent COT report on the pound sterling unveiled that the bearish sentiment became weaker. During the week, non-commercial traders closed 6,700 buy contracts and 78,500 sell contracts. Thus, the net position of non-commercial traders increased by 800. During the last few months, the net position was increasing quite stably. The sentiment of big traders could become bullish in the near future. It is still very hard to explain why the pound sterling increased so much against the US dollar. In the mid-term, the British pound could drop as it needs correction. In general, the recent COT reports have been corresponding to the pound's movement. Since the net position is not bullish anymore, traders may buy the asset in the next few months. By the moment, non-commercial traders have opened 35,000 longs and 59,000 shorts. We do not expect long-lasting growth in the pound sterling. Although it has technical reasons for that, the fundamental and geopolitical factors do not presuppose a strong and fast increase. H1 chart of GBP/USD On the one-hour chart, GBP is still moving downward and it is difficult to say what can support the British currency this week. Of course, a purely technical pullback might start and we are likely to see it this week. But at the same time, several technical indicators are signaling the pound's decline. In particular, the Double Top and consolidation below the critical line on the 24-hour chart. For February 7, here are the following important levels: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2288, 1.2342. Senkou Span B (1.2354) and Kijun-Sen (1.2202) lines can also be sources of signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Tuesday, several members of the Bank of England's Monetary Committee will deliver speeches in the UK and Federal Reserve Chairman Jerome Powell will be speaking in the US. We are not expecting any important information from these officials since we've already heard everything from the central banks last week. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 06:00 2023-02-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334329
Federal Reserve preview: A final hike as US recession fears mount

FX Daily: The dollar comeback hinges on Powell, again

ING Economics ING Economics 07.02.2023 09:24
The current market enviornment resembles last week's pre-FOMC one: the dollar is regaining ground as markets position themselves for a hawkish tone from Powell. The difference is that, today, strong jobs gains give Powell an extra incentive to push back against lower rates. The dollar recovery may run a little longer. Expect ECB hawkish comments as well. Source: Shutterstock   We have published our latest FX views and forecasts in the February edition of FX Talking: "Soft landing, hard landing, no landing?" USD: Powell's second hawkish attempt can support the dollar One week ago, we were observing how the dollar had regained the favour of the market as investors were positioning for a reiteration of the hawkish rhetoric by Fed Chair Powell after the FOMC meeting. As we now know, Powell actually conveyed the message of being relatively relaxed with loosening financial conditions last Wednesday. Today, however, we are looking at a market environment that highly resembles last week’s pre-FOMC one. Markets have been squaring short-dollar positions in the past two sessions as expectations have grown that Powell will deliver a hawkish speech at the Economic Club in Washington today. The key difference with last week is that Fed hawkish bets are now backed by a shockingly strong January jobs report (we recommend looking at our economics team’s note on the US labour market published yesterday). Let’s assume that a goldilocks scenario where inflation declines without seriously harming employment is becoming a more central scenario for the Fed. Well, even so, it seems a rather appropriate time for Powell to deliver one last hawkish “hurrah” today. In a way, many are seeing at least some degree of protest against the market reaction to last week’s FOMC as necessary. Yesterday, Atlanta Fed chief Raphael Bostic said that strong job gains could mean a higher peak rate. Indeed, it looks like markets have already positioned themselves for some pushback against easing rate expectations, but the surprise strength of the US jobs report gives Powell ample room to sound more hawkish than expected. Ultimately, the ongoing upward correction may run a little longer before losing steam. Incidentally, the overall environment is doing little to lure markets back into risk assets and away from the safe-haven dollar. US-China tensions are a source of concerns and likely weighing on global sentiment, and the eurozone cannot count on a supportive data flow to keep the growth re-rating process going. It looks like only another under-delivery (i.e. dovish surprise) by Powell can hurt the dollar today. Francesco Pesole EUR: ECB hawks to the rescue EUR/USD has pressed lower and may re-test the 1.0700 support today. There isn’t a whole lot driving the euro slump from the domestic side. In what is now becoming an increasingly common occurrence, ECB members appear to be rushing to the rescue in the week after the ECB meeting. The goal is simple: convince markets the hawkish bias is untouched, hoping to regain some of the market’s trust that President Lagarde seems to have lost. We’ll hear from three ECB hawks - Schnabel, Knot and Kazimir – and one “dove” – Villeroy – who recently aligned its view with the broader ECB message on further tightening. All in all, a slew of hawkish comments and rate protests should be on the cards today. This could give some modest support to the euro, but we believe this evening’s speech by Powell will have broader and longer-lasting implications for EUR/USD. A contraction to the 1.0600-1.0650 area by the end of this week is now looking increasingly likely. A pushback against the dovish market reaction is also what we have seen from BoE officials so far, with Caroline Mann (a hawk) firmly ruling out the peak rate has been reached. Today, we’ll hear from MPC members Ramsden, Pill and Cunliffe. With the rate protest coming from both the UK and the eurozone, EUR/GBP may hover around 0.8900-0.8950 for now.   Francesco Pesole AUD: RBA deliver hawkish hike The Reserve Bank of Australia raised rates by 25bp, in line with consensus, and signalled more rate increases are on their way. As we expected, sticky inflation has forced the RBA to sound more hawkish and to push rate expectations higher. Here is our economist’s review of the meeting. Markets are now pricing in a peak rate at 3.9% from around 3.6% before the announcement, but we think this is still underestimating how far the RBA will go. Our projections see rates hit 4.1% in the second quarter, and a potential first rate cut only in the fourth quarter. We continue to see AUD as the most attractive currency in G10 in the months ahead. Indeed, recent deterioration in US-China relations are a concern, but Australia still seems on track to easing trade tensions with Beijing, and the room for further hawkish repricing in RBA rate expectations means that 0.75 in AUD/USD could be reached during a soft-USD environment in 2Q22. Francesco Pesole CEE: The US dollar brought pain to the region The EUR/USD decline hit CEE FX hard yesterday. The US Dollar may cause pain to the region for a while longer and the local calendar has little to offer today. This morning's data showed Hungary's industrial production for December and the Czech Republic will release retail sales. Later today the Czech National Bank (CNB) will release FX reserve statistics including FX transactions for December. However, we don't suspect the CNB has intervened in this period. In our view, we may have last seen the central bank in the market in late September. However, we think the total intervention bill has reached CZK25.6bn since mid-May last year, roughly 16% of the CNB's FX reserves, and today's numbers won't change that. On the FX front, the key will be which direction EUR/USD goes and regional factors won't do much about it. After yesterday's 1.9% depreciation, the main focus today will be on Hungarian forint. Yesterday's move has certainly eased the pressure on heavy long positioning, but that may not mean the end of the upward journey. In our view, the Hungarian forint has gone too far and our model linked to EUR/USD indicates levels more around 392 EUR/HUF. However, the US dollar move will be decisive factor today. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

The Worst Outcomes For Europe In The Wake Of The EU Shutting Itself Off From Cheap Russian Energy Were Thankfully Not Realised

Saxo Bank Saxo Bank 07.02.2023 09:54
Summary:  Models are used everywhere in the financial world. But what do you do when the models you use don't work anymore? That's what this Quarterly Outlook is all about. An Executive Summary In the introduction to this outlook for early 2023, Saxo CIO Steen Jakobsen argues that our economic models and our assumptions for how market cycles are supposed to work are simply broken. And so should they be, as why should we even want to return to the ‘model’ of central banks engaging in moral hazard and bailing out incumbent wealth, rentiers and risk takers, the rinse-and-repeat we have seen in every cycle since Fed Chair Greenspan bailed out LTCM in 1998? This new post-pandemic and post-Ukraine invasion era we find ourselves in has brought an entirely new set of imperatives beyond bailouts and reinflating asset prices. Instead, we need to brace for the impact of higher inflation for longer as we scramble for supply chain reshoring and redundancy, and as we transform our energy systems to reduce reliance on fossil fuels and reduce our impact on the climate. And it won’t be all pain for all assets. Quite the contrary; it will bring a refreshing return of productive investment and a brighter future for everyone.  The return to more productive deployment of capital will have to mean investing more in the real, physical world to accomplish the new set of supply chain and resource access imperatives, not pouring money into digital platforms that capture excess profits by monopolising markets and user attention. On that note, our equity strategist Peter Garnry looks at whether the multiple decades of underperformance for equities dealing in tangible assets is ending, with intangibles and financials set to underperform after decades of excess financialisation. He also pokes into the geographies that look the most interesting as supply chains diversify.  Our macro strategist Christopher Dembik notes that the worst outcomes for Europe in the wake of the EU shutting itself off from cheap Russian energy were thankfully not realised. Danger and opportunity lie ahead for Europe, which faces the steepest challenges in the new world order, but where the sense of crisis will bring the needed change the quickest. As well, Europe is set to benefit from China, its largest trading partner, coming back online this year. Our market strategist for Greater China, Redmond Wong, looks at where the most potential lies in Chinese equities after China executed a seeming total about-face in its zero-Covid tolerance and other policies that cracked down on the property and technology sectors and were presumed to be the hallmarks of rule under Xi Jinping. Charu Chanana, our market strategist in Singapore, picks up on the rest of Asia, weighing the relative value across several Asian markets. She argues that India and also the traditional exporters will benefit both from renewed demand from China and from investment by both China and OECD countries looking to leverage production – and supply chain diversification potential. In commodities, Ole Hansen looks at the potential for the extension of a bull market in industrial metals as China, the world’s largest commodity consumer, returns in force from lockdowns and not least, as the metal-intensive investment in green energy deepens. The end of China’s lockdowns will also boost crude oil demand by the most in years as China normalises air travel levels. On the supply side, the avoidance of Russian crude and the end of risky, massive drawdowns of much of the US strategic reserves will weigh. Gold could be set to thrive with a turn lower in the USD, but also as a growing roster of countries looks for alternatives to the greenback for maintaining reserves and conduction trade outside the USD system. Our strategist in Australia, Jessica Amir, breaks down what Australia has to offer as a formidable exporter of resources and list of Australian resource companies involved in everything from the EV-battery supply chain to iron ore and gold. With the return of solidly positive interest rates after the seeming endless years of ZIRP and NIRP, especially in Europe, Peter Siks of our CIO office looks at a far better expected return for the traditionally balanced portfolio. This is somewhat ironic, given that 2022 offered the worst nominal returns for traditionally ‘balanced’ stock and equity portfolios in modern memory. FX strategist John Hardy looks at the potential for a turn lower in the USD this year and the likelihood of a much stronger JPY in the first half of the year, chiefly driven by its late-comer status to the central bank tightening party and the exit. Finally, crypto strategist Mads Eberhardt sees the risk of more challenges ahead for crypto, particularly the smaller cryptocurrencies as retail participation risks continuing to wither, even as the longer term prospects will brighten in line with the deepening institutional participation in the space in coming years. We wish you a safe and prosperous 2023.  We strongly believe that markets and the global economy are entering a new era. It won’t be an easy transition, but all great transitions bring exciting new opportunities for those willing to walk away from the old assumptions and to look at how their investments and efforts can contribute to the new world taking shape before us.  Source: Quarterly Outlook Q1 2023 - The models are broken | Saxo Group (home.saxo)
Impact of Declining Confidence: Italian Business Sentiment in August

2023 Is Likely To Prove A Rough Ride For Currencies

Saxo Bank Saxo Bank 07.02.2023 10:36
Summary:  2023 could be a tough year for currencies but EUR and JPY may have some upside. Q4 saw a massive retreat in the US dollar as the market ignored the Fed’s pounding on the table on the need to keep the policy rate ‘higher for longer’, profoundly inverting the US yield curve. Meanwhile, the ECB played catch-up with its tightening cycle, the JPY bounced back with a vengeance on the Bank of Japan arriving to the tightening party just before central banks elsewhere are trying to shut it down, and the Chinese renminbi came back from the brink as well on a disorienting policy about-face. 2023 is likely to prove a rough ride for currencies if the USD bear market fails to continue in a straight line, but EUR and JPY may outperform. As 2023 gets under way we see the market expressing increasing confidence in a disinflationary outcome for the US. Despite the Fed’s persistent ‘higher for longer’ narrative and the FOMC having placed the median dot plot Fed Funds rate forecast above 5 percent for this year at its December 2022 meeting, the market is happy to continue to mark Fed expectations lower by the end of this year. In the early weeks of this year, the market has priced in accelerating rate cuts for 2024 after recent data points have shown significantly weaker ‘soft’ data, including a weak ISM Services survey for December, but also as several inflation data points have come in softer than expected. Emboldening traders to price an easier Fed beyond the hump of perhaps two more 25 basis point hikes over the next couple of quarters is that annualised inflation from the last several months, minus the notoriously lagging and heaviest component of the official CPI data series, the owner’s equivalent rent, is practically back within the Fed’s target range of 2 per cent. As our The Models are Broken theme for this outlook argues, however, we find it highly unlikely that the disinflationary backdrop can persist for long in an under-invested world that is scrambling to transform itself away from fragile, globalised supply chains, to upgrade and green its energy system, and to arm itself for new national security imperatives. Thus, any nominal growth slowdown will prove shallow and growth will re-accelerate on the bounce-back in demand for commodities as China comes back online. In the meantime, the USD may occasionally rally hard if the market has to second guess its expected path for the Fed next year, and if that adjustment sees new bear market lows in risky assets, particularly US stocks. The ingredients for a sustained USD sell-off would include the Fed providing liquidity and a global rebound in risk sentiment, with the latter as important as the former. In the past two cycles, the big USD sell-offs have come only on the Fed providing massive liquidity after some sort of global crunch. But this Fed is still tightening! So how has the USD weakened in Q4 and into early Q1? That has largely been down to falling yields as the market prices the Fed to roll over but easily as importantly, also due to other factors that have helped offset the Fed’s tightening, including a US Treasury that continues to aggressively draw down its account at the Fed, adding liquidity to the system, and banks shifting of reserves and the drawdown in usage of the Fed’s reverse repo facility that can act as a king of ‘stored QE’. The latter is unpredictable, but the US Treasury contribution to liquidity will rapidly run dry in coming months and will then actually drive a liquidity headwind when it rebuilds its account, sooner or later, after the latest ridiculous spectacle of Congress clearing the debt-ceiling issue sometime in Q1.  In the meantime, a slowdown in corporate profits and recession fears could bring a comeback in the USD as a safe haven at times in the first half of this year, even if it falls short of the cycle peak. Further out the curve, far beyond the purview of Q1, when inflation reaccelerates beyond a possible short-term growth scare and the current misleading comedown in inflation, the USD may finally turn significantly lower on the Fed having to provide liquidity to ensure an orderly treasury market, even without significantly cutting rates or cutting them at all. Think QE with no ZIRP – a new paradigm that breaks the old model. Rounding out the G3: win-win for the JPY. EUR steady. The JPY looks the win-win setup for Q1 and possibly into early Q2, even after its significant repricing higher versus the USD from the incredible extension higher in USDJPY to above 150 late last year. December saw a surprise tweak in Bank of Japan (BoJ) policy after Japan drew down a significant chunk of its reserve to defend its yield-curve-control band. While Governor Kuroda failed to follow this up with a further shift in January, the overall sense that Japan is set to exit its extreme monetary policy experiment of the last 10 years continues, with Kuroda set. The ‘win-win’ setup is that the JPY can rise on the anticipation that the BoJ is set to normalise policy at a time when other central banks are easing off the pedal and even if it entirely fails to shift, yield spreads could continue to come crashing down on uglier-than-expected outcomes for the global economy earlier this year, the traditional source of JPY strength. The ideal ingredients near term for further JPY strength are both tepid to lower yields this quarter and a growth scare that further aggravates risk sentiment. A vicious rally in energy prices sooner rather than somewhere in late Q2 or later would challenge the recent JPY rally, unless the BoJ front-loads its shift away from the Kuroda era. Source: Bloomberg and Saxo Graphic: A recap of the chart of G3 currencies (USD, EUR & JPY) from the Q4 outlook. Then, we noted that for the USD and JPY "the jaws are widening perilously!". Well since then, they widened even more before finally beginning to snap back the other way, if somewhat tentatively. Note how modest the JPY comeback has been so far. For the rest of 2023, we would look for the two currencies to continue converging, with the EUR a bit more sedate middle ground, if still firm relative to the US dollar and elsewhere.   For the EUR, we have an ECB that found the rate-tightening religion late in the game at its December meeting and is signalling further strong tightening from here, emboldened by a collapse in natural gas and energy prices on a mild winter (even if these prices are above historic ranges). The fiscal outlook is more robust for Europe than almost anywhere else, and the anticipation of a return of Chinese demand could keep downturn risks very shallow. Long term energy and power issues are a concern for the long term, but supplies concerns are not an issue through this winter. Solidly positive bond yields in Europe, even if real yields remain quite negative, could help to keep a domestic investor focus. The EUR may prove a relatively steady ship in rough seas this year. Sterling would benefit most, meanwhile, from a very soft landing elsewhere and steady global markets. Not sure that is what we will get, and sterling risks getting painted with the same balance sheet challenges noted for the ‘G10 smalls’ below, although it is tricky to understand sterling risks when the currency is already heavily discounted, even after the Truss trauma of last fall. Read next: Adani Group Company's Crisis Is Gaining Momentum, Finland Is The Happiest Country| FXMAG.COM The G10 smalls: balance sheet recessions offsetting eventual commodity strength. The G10 smalls are all small open economies, where housing markets largely got a free ride, or only suffered a bad blip, during the 2008-09 global financial crisis. The G10 smalls suffered horrendous volatility back then, some from over-exuberant carry trading (AUD, NZD and NOK) while others enjoyed pro-cyclical strength on the commodity angle (CAD and SEK), or both, with the exception of SEK. Forced to gut interest rates in a competitive devaluation move post-GFC, housing markets were set on fire in these economies and were super-charged yet again during the pandemic response of 2020-21. Now, with a steep rise in longer lending rates like these economies haven’t seen in decades, housing markets are set for a further massive correction, one that is already under way. Real estate is a notoriously illiquid asset and absorbing the impact of the rate rises in the back will take time. But there will be rolling and tremendous impact on both construction sector activity as well as private balance sheets and likely on consumer sentiment more broadly in these economies, especially for those housing markets highly vulnerable to floating rate mortgages, including Australia, Sweden and Canada. While our longer term commodity outlook is very constructive to say the least and will provide some offsetting strength in the next growth cycle for the commodity have-alls like Australia and Canada, the bloated leverage in the private sectors in all of these smaller economies could significantly offset their upside potential. The risks in Sweden could get downright systemic and require significant intervention. This could already be behind the SEK’s notable weakness in late Q4 and into early Q1.  China and EM: Much has already been priced for the CNY after its powerful comeback from the brink on the huge policy pivot described in Redmond’s outlook for China in Q1. The coming quarter may prove less remarkable in fx terms as investors have already front-run a good deal and China will want to prevent excessive CNY strength on wanting to keep its exports competitive, even as it moves up the value chain. The rest of the EM may be in for a bumpier ride early this year on the global growth scare after very strong performance since late last year as the market pummelled the USD and rates fell, offering strong performance for EM bonds in local currency terms. But value shopping for commodity-leveraged FX in the coming quarter is worth consideration (BRL, IDR, ZAR and others). Source: Latecomers to tightening party, EUR and JPY, may prove safest harbours in the first half. | Saxo Group (home.saxo)
National Bank of Romania preview: waiting for inflation to fall

Romanian National Bank preview: time to talk the talk

ING Economics ING Economics 07.02.2023 12:04
The Romanian National Bank (NBR) will announce its latest policy rate decision on 9 February. We don’t expect any change in the key rate level, but a mildly cautious tone could be employed to balance the obvious easing of monetary conditions since the last meeting The Romanian National Bank in Bucharest 7.00% NBR's key policy rate We expect no change   Looking solely at the market data, one might find it hard to believe that the 10 January policy decision in Romania was in fact a rate hike. Pretty much all of the main developments since then have pointed to a relaxation of monetary conditions: the 3-month rate dropped by some 30 basis points and is now trading quite close to the 7.00% policy rate, carry rates in FX swaps have traded consistently below the 6.00% deposit facility, with only a short-lived spike around the beginning of the new reserve maintenance period, while 10-year government bonds dropped by some 25-30 basis points to the current 7.40% on record high demand. On top of that, the EUR/RON not only departed from the 4.95 resistance area but has even tested consistently below 4.90, likely related to local bond inflows. The root cause for the drop in market rates has undoubtedly been the massive liquidity surplus which, according to our estimates, reached historic highs in January, at over RON21bn. This beats by a wide margin our initial estimates, which were somewhat closer to the December surplus of around RON11bn. It also explains why carry rates remain close to, or even below the 6.00% deposit facility despite a record issuance month for the Ministry of Finance which managed to sell some RON26bn worth of bills and bonds in January.   A no-change decision is widely anticipated, but considering the above, we tend to expect a relatively cautious tone from the NBR which might be fearful of the market being too complacent given these recent developments. Possibly more important than the decision itself will be the February Inflation Report which will contain the updated NBR forecasts. We expect the 2023 year-end inflation rate to be revised much closer to our 7.4% estimate. It will also be interesting to watch for the longer-dated NBR estimates, particularly whether they see inflation entering the 1.5%-3.5% target range over the two-year forecast horizon. Our base case is that headline inflation will not dip below 4.0% over the next two years. What to expect in rates and FX markets On the bond side, Romanian government bonds (ROMGBs) have become rock stars within the CEE region since the beginning of the year. MinFin has taken advantage of record demand and good market levels to secure nearly 30% of ROMGBs issuance and 75% of ROMANI issuance since the beginning of the year. On the local currency side, this is by far the most within the CEE region, which together with a heavy cash buffer puts MinFin in a comfortable position. The potential for a sell-off is thus limited in our view given that MinFin can easily avoid issuing bonds if market conditions deteriorate. We can expect auction results to return to normal in the coming weeks, but the ROMGB picture remains positive. Fiscal policy and FX are basically fixed and, unlike some CEE peers, Romania does not face political conflicts with the EU and is not exposed to energy import dependence. Although the level of ROMGB yields is not as attractive as at the beginning of the year, in relative terms against CEE peers, we still do not find them expensive. Overall, we thus remain positive on ROMBGs. The record demand for ROMGBs is also having a positive impact on the Romanian leu, which has been below the NBR's intervention level most of the time since the beginning of the year. Massive inflows into bonds have helped the RON to test levels below 4.90 EUR/RON several times. Plus, global conditions led by falling gas prices and a higher EUR/USD are positive for FX. On the local side, the FX implied yield remains attractive as well, fluctuating steadily in the 6.60-7.00% range for the 3M tenor, comparable to the Czech koruna and Polish zloty. However, given the NBR's solid track record of managing the RON, potential FX depreciation losses look limited, which gives a distinct advantage, especially against the Hungarian forint and Polish zloty. Thus, we continue to expect the RON to hold below the EUR/RON 4.90 level depending on further inflows into RONGBs. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ECB cheat sheet: Difficult to pull away from the Fed

EUR/USD Drop Below 1.0700$ And GBP/USD Drop To 1.967$, The Aussie Pair Holds Above 0.69

Kamila Szypuła Kamila Szypuła 07.02.2023 14:48
The US dollar was mixed against its major trading partners early Tuesday - up against the euro and pound, down against the yen and the Canadian dollar. Today, Fed head Powell will speak. Powell will have to reconcile last week's decision by the Federal Open Market Committee to slow the pace of interest rate hikes with the exceptionally strong employment data for January released on Friday. In addition to Powell, Fed Vice Chairman for Supervision, Michael Barr, is set to speak at 14:00 ET. For the rest of the week there will be Fed officials. USD/JPY USD/JPY is rising after the US Fed raised interest rates by 25 basis points last week, and Chairman Powell said the central bank could deliver a few more rate hikes to bring inflation down to target. Additionally, reports that Bank of Japan Vice Governor Masayoshi Amamiya could replace the current Haruhiko Kuroda as central bank governor provided some support for USD/JPY as the BoJ's ultra-easy policy is expected to continue. USD/JPY is under some selling pressure on Tuesday and pulls some of the previous day's gains down to around 133.00, a monthly high. After the pair fell below 132.00, it is currently holding just above 132.0190. EUR/USD The EUR/USD pair extended its decline to a new three-week low below 1.0700 as demand for the US dollar prevails ahead of US Federal Reserve (Fed) President Jerome Powell's speech. Investors await speeches from ECB officials and FOMC chairman Jerome Powell. During the European morning, Germany published data on industrial production in December, which fell by 3.1% over the month and by 3.9% a year earlier, much worse than expected. The United States will publish a balance of trade in goods and services in December, which is expected to show a deficit of USD 68.5 billion. Continuing its decline, EUR/USD dropped below 1.0700 to 1.0694 and looks set to drop further. Read next: The Court In Munich Decided In Favor Of BMW| FXMAG.COM GBP/USD Sterling hit a new monthly low against the US dollar on Tuesday as investors expect the Bank of England (BoE) to end and possibly reverse its monetary tightening cycle soon, while the US Federal Reserve may hold interest rates higher for longer. Investors await further comments from the Bank of England and preliminary UK Gross Domestic Product (GDP) data. GBP/USD came under bearish pressure again and hit a month-low below 1.2000 on Tuesday. Despite a slight improvement in risk sentiment, the US dollar holds its ground and weighs heavily on the GBP/USD pair. AUD/USD The Australian dollar rose high after the RBA raised its cash rate target to 3.35% from 3.10%. Since the first increase in May 2022, a total of 325 basis points have been added. The Australian dollar gained above $0.69, bouncing back from monthly lows following the RBA decision. The RBA said in an accompanying statement: "The board expects further rate hikes will be needed in the coming months to ensure inflation returns to target and that this period of high inflation is only temporary." Following the RBA decision, the Aussie Pair holds above 0.69 but the pair has lost momentum and is closer to 0.6900 than close to 0.6930. Source: finance.yahoo.com, investing.com
Saxo Bank Podcast: A Massive Collapse In Yields, Fed's Tightening Cycle And More

Fed Policymakers Expect To Deliver A Couple More Interest Rate Increases

Jakub Novak Jakub Novak 07.02.2023 15:20
Market participants are waiting for another speech by Fed Chair Jerome Powell, especially his comments on the recent labor market report. Federal Reserve Bank of Atlanta President Raphael Bostic said yesterday that a strong January jobs report raised the possibility that the central bank would have to lift interest rates higher than previously anticipated. Economy If the economy keeps growing, "It'll probably mean we have to do a little more work," Bostic said. "And I would expect that that would translate into us raising interest rates more than I have projected right now." According to Bostic, his base case remains for rates to reach 5.1%, in line with the median of policymakers' December forecasts, and stay there throughout 2024. A higher peak could be reached through an additional quarter-point hike beyond the two currently envisioned. GDP Notably, the latest GDP data for the 4th quarter turned out to be well above economists' forecasts and was revised upwards. This allows policymakers to believe that the US economy is relatively strong. Thus, it will be able to survive much higher interest rates than the current ones. This is necessary in order to quickly bring inflation back to the Fed's target of 2.0%. After that, it will be possible to start cutting rates and pumping up the economy with cheap money, developing business, investments, and companies. In January, the economy added 517,000 new jobs, and the unemployment rate dropped to 3.4%, the lowest level since May 1969. Last week, the Federal Open Market Committee raised the short-term federal funds rate by 25 basis points, or 0.25%, to a target range of 4.50% to 4.75%. This move was taken immediately following the December meeting, when the rate was raised by only 0.5%, after four aggressive hikes by 75 basis points before. Raphael Bostic  Raphael Bostic also said that officials needed to understand whether the jobs report was "anomalous" or not. The committee could consider returning to the 50 basis-point increase if necessary. The president of the Federal Reserve Bank of Atlanta did not rule out that economic figures for the next quarter could be stronger than expected, adding that the focus was on an imbalance of supply and demand. Fed Chairman Jerome Powell According to Fed Chairman Jerome Powell, policymakers expect to deliver a couple more interest rate increases before putting their aggressive tightening campaign on hold. He also warned that in order to further ease price pressures, the labor market would have to suffer a bit.  EUR/USD  From a technical point of view, the EUR/USD pair is trading under strong downward pressure. Nobody believes that the European Central Bank will keep its monetary policy tight. To halt the slide, the price needs to consolidate above 1.0720. In this case, the pair will most likely rise to the 1.0770 area. A breakout of this level will make it possible to climb to 1.0800 and then 1.0830. If the price breaks through the support level of 1.0720, the volume of short positions will increase further. Thus, the EUR/USD pair will dip to 1.0680 and probably the low of 1.0650. GBP/USD  As for the GBP/USD pair, after two days of losses, it entered a sideways range. To regain control of the market, buyers need to push the price above 1.2070. If the price breaks through this resistance level, the pair will be able to recover to the 1.2140 area. In this case, the British pound may extend gains, heading for the 1.2200 area. Alternatively, the trading instrument will come under pressure again if bears take control of 1.2010. This will bring the GBP/USD pair back to the levels of 1.1950 and 1.1880. Relevance up to 12:00 2023-02-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334397
Expect the ECB to keep increasing rates at the short-term, at least until the summer

German Industrial Production Decreased, Which Is Bad News For The Rest Of The Eurozone

Kenny Fisher Kenny Fisher 07.02.2023 15:28
The euro has fallen for three straight sessions and has extended its losses on Tuesday. Earlier in the day, EUR/USD fell below the 1.07 line for the first time since Jan. 23. Eurozone data disappoints German and eurozone numbers have been soft this week, adding to the euro’s woes. Eurozone retail sales fell 2.7% in December, worse than the estimate of -2.5% and well off the November read of 1.2%. German Industrial Production came in at -3.2% in December, down from 0.4% in November and below the expectation of -0.6%. Germany is the locomotive of the bloc but the engine is stuttering, which is bad news for the rest of the eurozone. GDP in Q4 contracted by 0.2%, retail sales for December slumped by 5.3% and Manufacturing PMI remains mired in contraction territory. The US dollar received a much-needed boost from the January nonfarm payroll report, as the 517,000 gain crushed expectations. There are no major releases out of the US today, but Fed Chair Powell will participate in a panel discussion. If Powell strikes a hawkish tone, the US dollar could extend its gains. There are a host of Fed members speaking this week, and if they reiterate the “higher for longer” stance that the Fed continues to embrace, the US dollar could continue to move north. How will the Fed react to the stellar employment report?  Fed member Mary Daly called the employment release a “wow number” and said that the Fed’s December forecast of a peak rate of 5.1% was a “good indicator” of Fed policy. With the benchmark rate currently at 4.5%-4.75%, we’re likely looking at two more rate hikes, exactly what Jerome Powell said at the FOMC meeting last week. The spike in job creation has raised hopes that the Fed can pull off a “soft landing” and there is even talk on Wall Street of a “no landing” which would mean that a recession could be avoided. Read next: EUR/USD Drop Below 1.0700$ And GBP/USD Drop To 1.967$, The Aussie Pair Holds Above 0.69| FXMAG.COM EUR/USD Technical 1.0758 is a weak support line, followed by 1.0633 There is resistance at 1.0873 and 1.0954 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Australian dollar - the sharp drop can be attributed to technical factors and hawkish Fed

The AUD/USD Price Paused The Corrective Growth At The Level Of The January 31 Low

InstaForex Analysis InstaForex Analysis 08.02.2023 08:00
After rebounding from the support of the MACD line on the daily chart, the price rose by 75 pips. Of course, the Reserve Bank of Australia rate hike from 3.10% to 3.35% also influenced the growth. But in general, there has been a strong reversal to strengthen the US dollar in the forex market, so the aussie's growth will be limited. Even the signal line of the Marlin oscillator has outlined a downward reversal on the way to the limit of the green zone. The consolidation under 0.6873, respectively under the MACD indicator line, will send the prices in a new wave of downward movement in the medium-term. On the four-hour chart, the price paused the corrective growth at the level of the January 31 low. This might be the limit. But if it crosses this level, the final stop and the reversal may occur from the MACD line near 0.7030. The signal line of the Marlin oscillator is on the zero line and waiting for a signal for further direction. That is, in the current situation on this chart, the oscillator is in the position to lead.     Relevance up to 03:00 2023-02-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334450
Bank of England expects inflation to to fall to 3% within 12 months. US inflation decreases a little

A Reversal Of The GBP/USD Pair Is Possible Today Or Tomorrow

InstaForex Analysis InstaForex Analysis 08.02.2023 08:11
The pound sterling gained 29 points yesterday. Considering that today marks the third day of the correction from the fall of February 2-3, it may already be over. The Fibonacci time zone of the 6th line on the daily chart also indicates that a reversal is possible today or tomorrow. The targets are 1.1933, 1.1737. The Marlin oscillator is in the area of the downtrend, rising behind the price both sluggishly and reluctantly. Convergence on the four-hour chart is almost done, the signal line of the oscillator is very close to the border of the green zone. There is a possibility of a price breakthrough to 1.2155, and according to our main scenario, it will be the last one. Or, also within the main decline scenario, the target level of 1.2155 will not be reached.   Relevance up to 03:00 2023-02-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334452
ECB cheat sheet: Difficult to pull away from the Fed

The EUR/USD Pair Is Trying To Break Through The Range Again

InstaForex Analysis InstaForex Analysis 08.02.2023 08:15
Yesterday, the euro consolidated under the MACD indicator line on the daily chart. It nearly closed the day at the opening level, but the shadows worked out the target levels of support and resistance. However, the lower shadow did not reach 1.0660, but it is possible to be mistaken in calculating the level. The main thing is that the upper shadow has retested the MACD line, thus meeting the minimum technical requirement for renewing the downtrend, to the next target support at 1.0595. The signal line of the Marlin oscillator is reversing upward, which may be a sign that price will once again return to the 1.0758/87 range. Probably, with an attempt to go above it (a false breakout). On the four-hour chart, the price rolled back a bit after crossing 1.0758, now it is trying to break through the range again. The ascending Marlin oscillator is helping it in this process. But the oscillator, when it reaches the zero line, will get weaker, so the price, once again feeling the strength of the resistance, will turn down. If Marlin, after all, penetrates into the green zone, the price will climb above 1.0787, and the growth will end at the last line of the bears' defense at 1.0840, the MACD line.   Relevance up to 03:00 2023-02-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334454
The USD/MXN Pair Could Then Aim To Surpass The February Monthly Swing High

Analysis Of The USD/MXN Currency Pair Movement

InstaForex Analysis InstaForex Analysis 08.02.2023 08:24
After succesfully break above the level 19,104 and after that USD/MXN currency pairs halted by the upward movement by the Dynamic Resistance (MA 200). Now USD/MXN is falling back down to test the 18,762 level. If this level is able to withstand the downward trend of USD/MXN, this currency pair has the potential to rise again if during a downward correction. there was no significant decline that passed below the 18,672 level where if this level was not broken then USD/MXN would have the potential to rally again up to the 19,213-19,398 area level as the first target and the 19,639-19,900 area level as the second target.   Relevance up to 01:00 2023-02-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/119007
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

Analysis Of The NZD/USD Commodity Currency Pair Movement

InstaForex Analysis InstaForex Analysis 08.02.2023 08:27
If we look at the daily chart, NZD/USD commodity currency pairs looked seen a few things: 1. Stochastic Oscillator indicator was in Oversold area. 2. Golden Cross occurs from its MA 50 and MA 200. 3. Kiwi's price movement is in the middle of the MA 50 and MA 200 crossing. From those three things above we can conclude that right now Kiwi is in the Sideways condition however, Buyers have started to enter this commodity currency pair so that in the near future as long as there is no significant movement that causes NZD/USD to fall down and penetrate the 0.6188 level, the Kiwi has the potential to appreciate an upward rally to test the 0.6511 level again as its main target and if this level is successfully broken upwards, Kiwi will potentially continue the rally up to the level of 0.6775. Relevance up to 01:00 2023-02-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/119005
All Eyes On Capitol Hill, Jerome Powell Will Appear Before The Senate Banking Committee

The Fed Chief Made It Clear That Friday's Jobs Report Would Not Change The Central Bank's Approach To Future Interest Rate Hikes

InstaForex Analysis InstaForex Analysis 08.02.2023 08:29
The EUR/USD pair suddenly fell, having tested the 6th figure. Although traders failed to hold steady in this price area, market participants are showing growing interest in the U.S. currency. The greenback was not only supported by Friday's strong Nonfarm Payrolls report, but also by Federal Reserve Chairman Jerome Powell, who sounded some rather hawkish signals on Tuesday. The Fed chief spoke at the Economic Club in Washington, D.C., where he commented on the latest economic data and also spoke on inflation. Powell's ambivalent message The pair initially surged by nearly 100 points amid the general weakening of the U.S. dollar. It reacted this way because Powell mentioned that the disinflationary process has begun in America. He did however clarify that the process, in particular, is observed in goods but hasn't kicked in the service sector yet. The market interpreted these words against the greenback, as Powell's rhetoric was "final" in the context of a possible hawkish rate hike. Such assumptions were reinforced after the Fed chief reacted rather calmly to January's Nonfarm payrolls, making it clear that Friday's jobs report would not change the central bank's approach to future interest rate hikes. In the backdrop of such conclusions, the EUR/USD jumped from 1.0690 to the target of 1.0770 within an hour. But Powell's follow-up rhetoric allowed the bears to test the 6th figure again. Long, long way to go After acknowledging the fact that the U.S. began the disinflationary process, Powell noted that it may take a long time for the consumer price growth rate to slow down. As part of his speech, he highlighted that getting inflation down to 2% will take a "significant period of time." In this context, he used phrases that were different in form (but identical in meaning) - that the Fed would take "a considerable period of time" and that it was "still early in the process" in general. But in the end, Powell was very specific about the timing, which is uncharacteristic of him, stating that inflation in the U.S. won't slow down until 2024. He said the following verbatim: "My guess is it will take certainly into not just this year, but next year to get down close to 2%." Powell expanded on this point by making two other important points. First, he said that interest rates will continue to rise. Since rates have not yet reached an acceptable level for fighting inflation (without specifying what level of the rate is "acceptable"). Secondly, he reassured the markets that the Fed would have to hold policy at a restrictive level for "some time". Again, Powell also did not specify how long the Fed intends to keep the rate at the peak level. However, despite the wording (except for the reference to 2024), Powell made it clear that the U.S. central bank is not going to curtail its hawkish strategy in the foreseeable future. In practice, that means the Fed will increase the rate by 25 points not only in March, but probably at the next two meetings as well. Investors now place a 71% probability of a 25-point rate hike at the Fed's May meeting, according to the CME's FedWatch tool. The likelihood of another round of hikes at the June meeting is estimated at 35% (which is not insignificant given the slowdown in U.S. inflation). Conclusions Despite the fact that bears failed to settle in the area of the 6th figure, bearish sentiment still dominates the pair. As a matter of fact, Powell ruled out the end of the current tightening cycle (thereby, denying the rumors) and announced further steps in the direction of the range of 5.25-5.50%. At the same time, the European Central Bank did not ally itself with the euro at the end of its February meeting. ECB President Christine Lagarde, while announcing the realization of the 50-point scenario in March, simultaneously cast doubt on further rate hikes. According to her, after the March decision "we will then evaluate the subsequent path of our monetary policy,". Euro-area headline inflation has decelerated for the third straight month, and at a fairly brisk pace (it came in at 8.5% in January against a forecast of 9.0%). If the core CPI in February-March repeats the trajectory of the headline inflation, a "post-March" rate hike will be highly questionable. From a technical point of view, the pair is between the middle and bottom lines of the Bollinger Bands indicator, as well as under the Tenkan-sen lines. According to Tuesday's results, the bears were unable to push through the support level of 1.0700 (bottom line of the Bollinger Bands on the D1). If the bears overcome this barrier, the next target will be 1.0600, which corresponds to the upper limit of the Kumo cloud on the same chart.   Relevance up to 00:00 2023-02-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334448
The EUR/USD Pair Edged Lower As Expected

The EUR/USD Pair Edged Lower As Expected

Torben Melsted Torben Melsted 08.02.2023 08:35
EUR/USD edged lower as expected and almost touched our target at 1.0650 as the low was seen at 1.0669. This is close enough to complete wave C/ of 4/ and we are now looking for wave 5/ higher towards 1.1391 and maybe even higher than that. We also acknowledge that as long as minor resistance at 1.0767 is able to cap the upside a final decline lower to test our 1.0650 target remains a possibility. It's not necessary, but can't be excluded. Only a break above minor resistance at 1.0767 will confirm that wave 4/ has been completed and wave 5/ higher to 1.1391 is in motion.   Relevance up to 06:00 2023-02-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311795
The EUR/USD Pair Consolidated In The Downward Trend Area

The EUR/USD Currency Pair Has Pulled Off The Lows

Oscar Ton Oscar Ton 08.02.2023 08:40
Technical outlook: EURUSD dropped through the 1.0670 low during the early New York session on Tuesday before finding support. The single currency pair has pulled off the lows since then and is seen to be trading close to 1.0730 at this point in writing. The price action has produced a Doji on the daily chart with room still left on the south side towards the 1.0481 initial support. EURUSD's drop from 1.1020 still looks corrective, so the instrument is unfolding its initial leg lower. Intraday pullbacks remain possible but prices should likely stay below the 1.1020 swing high. A larger-degree corrective decline could be underway towards 1.0500 and up to the 1.0100-20 area before the trend resumes higher again. The bears eyeing below 1.0481 in the near term to confirm a deeper correction. EURUSD might target the Fibonacci 0.618 retracement of the rally between 0.9535 and 1.1020-25 which is seen passing through the 1.0100-20 range as projected on the daily chart. A high probability remains for a bullish turn if prices reach those levels. A potential Fibonacci convergence could be seen close to the 1.0100-20 mark, which will be displayed in the coming sessions. Trading idea: A potential bearish drop against 1.1025 Good luck!   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311803
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The EUR/USD Pair Reacted Quite Violently To The Fed Chairman's Speech

Paolo Greco Paolo Greco 08.02.2023 08:43
M5 chart of EUR/USD On Tuesday, EUR/USD was bearish for most of the day. The decline was systematic and slow, which is not surprising since the market has already recovered from last week's events. However, when Federal Reserve Chairman Jerome Powell started his speech at the economic forum in Washington, the market reacted rather wildly. In fact, Powell said nothing new. He only reiterated that it could take a long time for inflation to return to 2%. He also repeated his earlier rhetoric that the Fed rate would continue to rise and that the "period of high rates" would take long. So we did not hear anything new, but the pair reacted with a 100 pip growth and suddenly a 100 pip drop. I believe that the correction against the four-day decline started, and Powell's speech was just the catalyst. Generally speaking, Powell's stance remains hawkish, so it would be logical to see a new strengthening of the dollar. As for trading signals, at the European trading session, the pair rebounded twice from 1.0736, afterwards it fell to 1.0669. Traders could earn about 40 pips on this deal. You could have opened two deals, but the first one closed at Stop Loss breakeven. The rebound from 1.0669 could also be priced, and no matter when you closed the position, there was still a profit of at least 30 pips. COT report The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since September. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. In the reporting week, non-commercial traders opened 9,500 long positions and 2,000 short ones. The net non-commercial position grew by 7,500. The number of long positions exceeds that of short ones by 134,000. It now remains to be seen how long large traders will be bullish. From the technical point of view, a bearish correction should have already occurred. Traders will unlikely stay bullish for another 2 or 3 months. Even the net non-commercial position shows that it is time for a correction. In total, there are 52,000 more long positions now among all groups of traders (732,000 vs 680,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD continues to fall sharply. I already warned you that the first days of the week could be moved by momentum, and yesterday the market showed that it is ready to start a bit of a bullish correction. So we might see an uptrend before the end of the week. Macroeconomics and fundamentals are still scarce. On Wednesday, important levels are seen at: 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, 1.0868, 1.0938, and also Senkou Span B lines (1.0917) and Kijun Sen (1.0850). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On February 8, there are no important events in the EU and the US. The Fed will have a new batch of speeches and the stance is unlikely to differ from what Powell said. We reiterate: the market clearly understands what to expect from the Fed in the coming months. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 06:00 2023-02-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334462
Rolls-Royce share price has increased by over 60% since the start of the year

Now A Correction Of The GBP/USD Pair Can Start

Paolo Greco Paolo Greco 08.02.2023 08:49
M5 chart of GBP/USD On Tuesday, GBP/USD also fell by momentum, but it stopped moving down in the evening. Federal Reserve Chairman Jerome Powell's speech, as I mentioned, was not very resonant, but the market reacted strongly to it, as if Powell announced something new. Perhaps, traders, as usual, were trying to find something they wanted in Powell's speech. Whether or not they found it is a complicated question. We took yesterday's "flight" philosophically: the pair should have started a bullish correction after the four-day plunge, and Powell's speech might have been just a pretext. There were no other important events or reports during the day, neither in the US nor in Britain. Therefore, the pair might continue its corrective movement till the end of the week, but it is still difficult for the pound to count on a strong growth. The technical formation of the Double Top pattern has not been worked out yet, and all factors in favor of the pound's growth have already been considered by the market. Speaking of trading signals, the situation was ambiguous. The 1.1974-1.2007 area should be considered as an actual area, but the pair spent most of the day moving around it. Therefore, there were only two signals. During the European session, the price rebounded from this area and went up about 20 pips, which was a bit painful. The second bounce occurred when Powell's speech started. In the first case, the position was closed with Stop Loss at breakeven, in the second one, long positions should not have been opened because the signal was formed too late. COT report The recent COT report on the pound sterling unveiled that the bearish sentiment became weaker. During the week, non-commercial traders closed 6,700 long positions and 78,500 short ones. Thus, the net position of non-commercial traders increased by 800. During the last few months, the net position was increasing quite stably. The sentiment of big traders could become bullish in the near future. It is still very hard to explain why the pound sterling increased so much against the US dollar. In the mid-term, the British pound could drop as it needs correction. In general, the recent COT reports have been corresponding to the pound's movement. Since the net position is not bullish anymore, traders may buy the asset in the next few months. By the moment, non-commercial traders have opened 35,000 longs and 59,000 shorts. We do not expect long-lasting growth in the pound sterling. Although it has technical reasons for that, the fundamental and geopolitical factors do not presuppose a strong and fast increase. H1 chart of GBP/USD On the one-hour chart, GBP is still falling, but it hasn't crossed the important 1.1974-1.2007 support area, so now a correction can start. I don't expect the pair to climb above the Kijun-sen line in the next few days, the downtrend should persist since the price hasn't gone low enough after the last turn of strengthening, which took some months. And there are almost no support factors for the British currency now. On Wednesday, important levels are seen at: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2288, 1.2342. The Senkou Span B (1.2354) and Kijun Sen (1.2178) lines can also be sources of signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. On Wednesday, there are no important events planned in Britain and the US. The only thing that will take place is a series of speeches by representatives of the Fed's monetary committee. They could make significant comments, but they are unlikely to be so important that the market will react the same way it did yesterday to Powell's speech. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 06:00 2023-02-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334464
Would Federal Reserve (Fed) go for two more rate hikes this year? Non-voting Bullard say he would back such variant

The Bulls Of US Dollar Index Are Looking Poised To Push further

Oscar Ton Oscar Ton 08.02.2023 08:51
Technical outlook: The US dollar index rose through the 103.60 high during the New York session on Tuesday before finding resistance. The index dropped over 100 points thereafter to register a low of around 102.63 and is now seen to be trading at about 102.90. The bulls are looking poised to push further toward 104.57 as projected on the 4H chart here in the near term. The US dollar index is producing a larger-degree corrective way potentially towards 106.50 and 109.40 levels. Within the above rally, the bulls are unfolding the first leg higher towards 104.50 and 105.35 at most. A break above 105.35 will confirm that the bulls are back in control and that there is further upside left. Intraday drops should stay above the 100.50 lows. The US dollar index bulls are potentially targeting the Fibonacci 0.618 retracement of the entire drop between 114.70 and 100.50 levels, which is passing through the 109.40-50 zone. A high probability remains for a potential trend reversal lower if prices reach there (109.40). Only a drop below 100.50 would nullify the above bullish scenario. Trading idea: A potential bullish move against 100.00 Good luck!   Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311811
Gold Trading Analysis: Technical Signals and Price Movements

FX Daily: Dodged bullet

ING Economics ING Economics 08.02.2023 09:14
Jay Powell did not rock markets as he acknowledged more strong data can imply a higher peak rate but still appeared to be hanging on to the disinflation story. The dollar still faces moderate upside risks this week, but stabilisation looks more likely today. Separately, Poland may confirm stable rates, with the zloty set to further underperform the region Jerome Powell at the Economic Club of Washington USD: No hawkish surprise by Powell Yesterday’s speech by Federal Reserve Chair Jerome Powell did not include the hawkish surprise some had feared. Ultimately, Powell probably delivered the minimum amount of pushback against dovish speculation required by the strong January jobs report. As we observed yesterday, there was ample room to surprise on the hawkish side, but it clearly seems that Powell is reluctant to drop his relatively sanguine stance on the disinflation narrative. Risk assets probably dodged a bullet yesterday, and the dollar momentum softened for the first time in three days. So, what now for the dollar? We think markets may feel relatively comfortable with the current pricing for a 5.15% peak rate for now, even though risks are skewed towards another 10bp of tightening being added into the curve. This means that the dollar’s upward correction may have a bit more to run, but we doubt this will morph into a sustained USD uptrend from this point on. If nothing else because Powell and other Fed speakers indicated that more evidence from the data is needed to shift to more hawkish guidance. So once again, it will all be about data. Today, the US calendar is rather quiet on this front but there is plenty of Fedspeak. We’ll hear from John Williams, Lisa Cook, Raphael Bostic, Neel Kashkari and Christopher Waller. There is room for the general Fed rhetoric to stay on the hawkish side and while we think the absence of key data can favour some stabilisation in the dollar today, risks are skewed towards another small leg higher in the greenback. Francesco Pesole EUR: EUR/USD mostly a dollar story Yesterday’s decision by the European Central Bank to cut rates on government deposits to encourage fund withdrawals should not have strong implications for the euro for the moment. The policy discussion remains much more central, with Isabel Schnabel delivering hawkish statements yesterday and warning against the risk of inflation becoming entrenched in the medium term. The process of hawkish re-tuning by ECB officials after last week’s market reaction to President Christine Lagarde's press conference looks likely to continue, although it appears to have been largely factored in by markets. There is only one speaker scheduled today, Klaas Knot (a hawk) and no interesting data releases in the eurozone. EUR/USD broke below 1.0700 yesterday before rebounding. We think that further explorations below 1.0700 are possible in the coming days, but it looks like they will mostly depend on dollar moves. Francesco Pesole GBP: Don't read too much into a weaker EUR/GBP Yesterday’s comments by MPC member Jon Cunliffe were mostly focused on paving the way for a “digital pound”, rather than on monetary policy. Despite being a rather interesting discussion for the future, this is not impacting the pound’s exchange rate at the moment. EUR/GBP is pressing through the 0.8900 support this morning, but we doubt this is the start of a longer downtrend in the pair. The Bank of England’s pushback against dovish rate speculation is happening in tandem with the ECB and we don’t see a key catalyst for the two currencies to dramatically diverge in the current environment. The UK data calendar is empty today, and there are no scheduled BoE speakers. Tomorrow, Governor Andrew Bailey will testify to parliament.  Francesco Pesole PLN: NBP to confirm stable rates Today we have a meeting of the National Bank of Poland (NBP) on the agenda. We expect rates to remain unchanged, as they have for the last four meetings. This is in line with market expectations and it is hard to expect any surprises. However, more interesting will be Governor Adam Glapiński's press conference, which we will see tomorrow. Looking ahead, the key to the next steps in monetary policy will be the inflation number for January, which will not be released until next week. Markets are currently pricing in the first rate cut for the September NBP meeting and nearly 100bp by year-end. We do not expect a rate change this year, but today's meeting is unlikely to change those expectations and we will have to wait until next week. In the FX market, the Polish zloty has moved to its weakest level since last October following the US dollar rally, and it is hard for us to find reasons to be positive at the moment, at least until the Court of Justice of the European Union's decision on FX mortgages. Until then, we cannot rule out EUR/PLN touching 4.80. In the short term, the rise in PLN market rates and improvement in the interest rate differential should stop further depreciation for now. Unless we see more pressure from the US dollar side, we believe the zloty will erase some of the recent losses and return to the 4.72-74 EUR/PLN range. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Navigating Inflation and Central Bank Meetings: Assessing Rate Hike Odds

Disney Is Expected To Report Revenue Growth Of 7%, Crude Oil Pirces Was Up

Saxo Bank Saxo Bank 08.02.2023 09:25
Summary:  Bumpy ride for the markets as Fed Chair Powell repeated his disinflationary remark but later added that the Fed will need to do more rate increases. NASDAQ led the gains, supported by Microsoft and Alphabet, despite another day higher in US 10-year yields. USD was broadly softer with JPY leading the gains, while EUR lagged. RBA’s hawkish guidance supported AUDUSD as China demand upturn is still awaited. Gold steady and oil prices jumped higher on improving demand outlook.   What’s happening in markets? US equities (US500.I and USNAS100.I): Short-term strength is still intact On Tuesday the S&P 500 rallied 1.3% in a choppy session to close at 4,164, regaining some short-term strength. Traders absorbed Powell's remarks (for details of his comments, please read below) and took stocks to rebound and close near the day high. So, we’re seeing the technical indicators (the MACD and RSI) behaving - supporting short-term strength, as the VIX Index is too. The advance in the S&P500 was led by energy, communication services, and information technology. Nasdaq rose 2.1% to 12,728, driven by strong gains in mega-cap names such as Microsoft (MSFT:xnas) up 4.2% and Alphabet (GOOGL:xnas) up 4.6%. Take-Twe Interactive (TTWO:xnas) jumped 7.9% after the game software company announced cost-cutting. Du Pont (DD:xnys) surged 7.5% following earnings and margins beat analyst estimates. Royal Caribbean Cruises (RCL:xnys) rose 7.2% on upbeat guidance, citing “a record-breaking Wave season”. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) edged up on Powell’s comments and a weak auction Fed Chair Powell’s comments made at the much anticipated moderated discussion before the Economic Club of Washington, D.C. were less hawkish than feared. He started by repeating that the disinflation process had begun and his remarks saw yields on the front end tumbling 10bps with the 2-year down to as low as 4.38 and the curve bull steepened. The fall in yields quickly reversed after Powell said that last Friday’s payroll report was “certainly strong-stronger than anyone I know expected” and that inflation “will go away quickly and painlessly” is not the Fed’s base case and the Fed has to “do more rate increases”.  More selling came after a weak 3-year action that was awarded 4bps cheaper than the market at the time of the auction, and the bid-to-cover ratio dropped to 2.33 from 2.84 last time. The corporate supply of around USD15 billion of new issues, including USD11 billion from Intel also weighed on the market. The 2-year pared almost all its early gains to settle 1bp richer at 4.46% while yields on the 10-year rose 3bps to 3.67%. Australian equites (ASXSP200.I); short term pressure as RBA hikes by 25bps to 3.35% guiding for more hikes in “months ahead”   ASX200 futures suggest the market will rally 0.46%, and likely erase yesterday’s 0.5% fall. But short-term pressure has built up by the RBA indicating more hikes are needed. Coal prices are down 36% and picked up this week almost 7% after the Australia Energy Market Operator said coal supply and gas supply in Australia is short and will stay short till 2026, so we think the RBA could make upward revisions to underlying inflation forecasts on Friday, despite the Bank keeping its headline CPI, unemployment and activity forecasts broadly unchanged. For investors, this means volatility in the ASX200 could pick up on Friday - financials and insurers could be supported with the RBA seeing more hikes ahead. The services sector is already in contraction, yet the RBA sees GDP slowing to around 1.5% this and next year, expecting household spending to pull back amid tightening financial conditions, as the post-pandemic spending rush has eased. This means, consumer discretionary stocks likely face headwinds. On the flip side, the energy sector is being supported. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) in thin trading; ChatGPT names soared After climbing as much as 1.4% in the morning, Hang Seng Index retraced to close near the day low, inching up 0.4% from Monday. The trading volume was light. The Hang Seng TECH index outperformed and closed 1.2% higher, led by a 15.3% jump in Baidu (09888”xhkg) on confirmation from the company that it is working on a ChatGPT-like product. The three Chinese state-owned oil giants advanced, led by CNOOC (00883:xhkg) up 2.2%. In A-shares, ChatGPT names continued to outperform. Household appliances, media, environmental, and real estate names gained. CSI300 registered a modest 0.2% gain in a choppy and low-volume session. Northbound flows were net selling of RMB3 billion, being outflow for the third day in a row. FX: Yen strength returned as Powell adds little new information Dollar was choppy as Powell initially reiterated his remarks from last week but later made a comment that the Fed could more if the data stays hot. Still, market pricing of the Fed’s path was little changed, and dollar ended the day broadly lower against all G10 currencies. The Japanese yen recouped come strength despite somewhat higher Treasury yields, with USDJPY falling as low as 130.49 before bouncing back higher to 131.50. AUDUSD, although still waiting for the upturn is Chinese demand, was supported by the RBA’s guidance to hike more. AUDUSD above 0.6960 in early Asian hours, with AUDNZD moving above 1.1000 to near 3-month highs. EURUSD was a laggard as it took a look below 1.07 before bouncing back to 1.0720+ levels subsequently. Crude oil (CLH3 & LCOJ3) prices rise on demand outlook and supply concerns WTI prices jumped 4% and Brent was up 3% after Powell stayed away from turning significantly more hawkish after the bumper jobs report last Friday. Meanwhile, demand outlook continues to improve as signaled by Saudi Aramco’s price increases, and API also suggested a draw in US crude stocks. API reported US crude stockpiles declined by 2.2mm barrels last week, compared to expectations of a 2.5mm barrels increase. Both OPEC and EIA have been upbeat on China’s demand recovery as well. The market shrugged off reports that flows through the 1mb/d Ceyhan oil terminal in Turkey will resume shortly, and supply side issues remained in focus as well. The Energy Information Administration lowered its forecast for US crude oil production in 2024. Gold (XAUUSD) strength continues to hold up despite a stronger dollar Gold continues to remain supported around the $1860 level despite another increase in US yields overnight. Buying by central banks remains buoyant, with China raising its gold reserves for a third straight month in January, up 6.9% MoM. The momentum below $1900 appears to be lacking, suggesting the move remains a correction in the larger bullish trend. Eyes on next supports at $1845 and $1828.  Read next: The Court In Munich Decided In Favor Of BMW| FXMAG.COM What to consider? Powell’s balanced narrative unable to spur market caution; Kashkari sees terminal rate at 5.4% Fed Chair Powell’s message last night was only marginally more hawkish compared to last week’s Fed meeting, giving markets enough reasons to continue to give more emphasis to data. Powell qualified his ‘disinflationary’ remark from last week’s Fed meeting by saying it is at a very early stage, and only in the goods sector. He was surprised by the strength of the jobs report, and said that the Fed probably needs to hike rates further and they have still not reached a sufficiently restrictive level. Powell expects 2023 to be a year of a significant decline in inflation, but it will certainly take into next year to get down close to 2% - in fitting with the December SEP's. Market’s pricing of the Fed rate path saw no material change following Powell’s comments. Meanwhile, Fed member Kashkari (voter) was more hawkish saying if he had to pick a rate forecast, would not lower it from his Dec SEP forecast of 5.4% but rates may have to be held at a higher level for longer. He added that markets are more confident than he is about inflation falling. Weak German industrial production, CPI due today Germany’s industrial production for December saw a steeper fall than expected, coming in at -3.1% MoM (vs. est -0.8%) while the November print was revised higher to +0.4%. After a technical delay last week, Germany’s inflation prints for January will be released today. Spain and France printed higher-than-expected CPI for the month, while the region-wide printed was softer last week. This suggests Germany’s inflation likely eased due to energy price increases being more subdued than previously expected. Meanwhile, adjustments in the CPI basket could also likely result in a softer print. Bloomberg consensus expects 10.0% YoY from 9.6% YoY in December, with the MoM print also turning positive at 1.3% from -1.2% previously. Walt Disney to report earnings The entertainment giant Disney is expected to report revenue growth of 7% Y/Y and EPS of $0.76 up 21% Y/Y and a lot of focus will be on Nelson Peltz, the activist investor that has gone into the company, and his quest for higher streaming profitability and potentially changing the asset portfolio of Disney.  Saxo launches in Q1 2023 quarterly outlook: The Models are Broken Saxo’s quarterly outlook released argues that the economic models and assumptions of how market cycles are supposed to work are broken. We explore how this may affect both equities and commodities, as well inflation being higher-for-longer and how could it impact forex and crypto. Read the outlook here.   For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Market Insights Today: Powell adds little new information – 8 February 2023 | Saxo Group (home.saxo)
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

Powell’s Interview Yesterday Was Interpreted By The Equity Market As A Positive Thing

Saxo Bank Saxo Bank 08.02.2023 09:35
Summary:  Equity markets rushed back higher despite treasury yields maintaining altitude, with much of the activity on the day around Fed Chair Powell’s interview, which sparked considerable two-way volatility before the market decided that he wasn’t sending too hawkish a message. With strong risk sentiment, the USD was mixed and commodity currencies are trying to stage a comeback from their recent sell-off. Oil posted its strongest rally in weeks yesterday. What is our trading focus? US equities (US500.I and USNAS100.I): growth vs policy rate Powell’s interview yesterday saying the US jobs market is so strong that more rate hikes are needed was interpreted by the equity market as a positive thing. Investors are clearly weighing growth above the discount rate for now, but that is only until rates hit a level in which it slows down the economy. The downside risk to Powell’s comments is that while inflationary pressures are easing in the goods economy, the services sector, which has more sticky inflation components, could underpin high inflation for much longer than anticipated. If S&P 500 futures can break above the 4,200 level again and close above then the cyclical top around 4,300 from back in August is the next major level to watch out for. Chinese equities: Hang Seng (HIG3) and CSI300: (03188:xhkg) tread water Hang Seng Index and CSI300 tread water and are nearly flat as investors wait for signs of recovery in China after the initial month-long rally that has repriced equities higher to reflect the change in policy directions in China. The benchmark Hang Seng Index was dragged by Meituan (03690:xhkg) which tumbled 6.5% on news that Douyin is launching food delivery service in March. In A-shares, northbound flows returned to net buying after three days of net selling. Real estate names outperformed and solid-state battery concept stocks were among the top gainers. FX: Yen steadies, USD choppy to lower as Powell adds little new information The US dollar was choppy as Powell initially reiterated his remarks from last week but later made a comment that the Fed could do more if the data stays hot (see more blow on Powell’s interview). Still, market pricing of the Fed’s path was little changed, and dollar ended the day broadly lower against all G10 currencies. The Japanese yen recouped come strength despite somewhat higher Treasury yields, with USDJPY falling as low as 130.49 before bouncing back higher to as high as 131.50 overnight. AUDUSD, although still waiting for the upturn is Chinese demand, was supported by RBA’s Tuesday guidance to hike more. AUDUSD above 0.6960 in early Asian hours, with AUDNZD moving above 1.1000 to near 3-month highs. EURUSD was a laggard as it took a look below 1.07 before bouncing back to 1.0720+ levels subsequently. GBPUSD tested its 200-day moving average near 1.1950 but managed a rebound back well above 1.2000 yesterday. Crude oil (CLH3 & LCOJ3) prices rise on demand outlook and supply concerns WTI prices jumped 4% and Brent was up 3% after Powell stayed away from turning significantly more hawkish after the bumper jobs report last Friday. Meanwhile, demand outlook continues to improve as signalled by Saudi Aramco’s price increases, and API also suggested a draw in US crude stocks. API reported US crude stockpiles declined by 2.2mm barrels last week, compared to expectations of a 2.5mm barrels increase. Both OPEC and EIA have been upbeat on China’s demand recovery as well. The market shrugged off reports that flows through the 1mb/d Ceyhan oil terminal in Turkey will resume shortly, and supply side issues remained in focus as well. The Energy Information Administration lowered its forecast for US crude oil production in 2024. Gold (XAUUSD) strength sustains Gold remains supported around the $1860 level despite another increase in US yields overnight. Buying by central banks remains buoyant, with China raising its gold reserves for a third straight month in January, up 6.9% MoM. The downside momentum below $1900 has failed to follow through, so far suggesting the move remains a correction in the larger bullish trend. Eyes on next supports at $1845 and $1828 if selling resumes. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) edged up on Powell’s comments and a weak 3-year auction Fed Chair Powell’s comments made at the much-anticipated moderated discussion before the Economic Club of Washington, D.C. were less hawkish than feared as noted below. Yields and markets swung wildly after he started by repeating that the disinflation process had begun, which saw yields on the front end tumbling 10bps before quickly reversing after Powell said that last Friday’s payroll report was “certainly strong-stronger than anyone I know expected” and that inflation going away “quickly and painlessly” is not the Fed’s base case and the Fed has to “do more rate increases”.  More treasury selling came after a weak 3-year action that was awarded 4bps cheaper than the market at the time of the auction, and the bid-to-cover ratio dropped to 2.33 from 2.84 last time. The corporate supply of around USD15 billion of new issues, including USD11 billion from Intel (discussed below) also weighed on the market. The 2-year pared almost all its early gains to settle 1bp richer at 4.46% while yields on the 10-year rose 3bps to 3.67%. Read next: The Court In Munich Decided In Favor Of BMW| FXMAG.COM What is going on? Powell’s balanced narrative unable to spur market caution; Kashkari sees terminal rate at 5.4% Fed Chair Powell’s message last night was only marginally more hawkish compared to last week’s Fed meeting, giving markets enough reasons to continue to give more emphasis to data on the sense that Powell was not pushing back against the market reaction last Wednesday. Powell qualified his ‘disinflationary’ remark from last week’s Fed meeting by saying it is at a very early stage, and only in the goods sector. He was surprised by the strength of the jobs report, and said that the Fed probably needs to hike rates further and they have still not reached a sufficiently restrictive level. Powell expects 2023 to be a year of a significant decline in inflation, but it will certainly take into next year to get down close to 2% - in fitting with the December SEP's. Market’s pricing of the Fed rate path saw no material change following Powell’s comments. Meanwhile, Fed member Kashkari (voter) was more hawkish saying if he had to pick a rate forecast, would not lower it from his Dec SEP forecast of 5.4% but rates may have to be held at a higher level for longer. He added that markets are more confident than he is about inflation falling. Earnings: Fortinet, Maersk, and Vestas Fortinet, one of the largest cyber security companies on revenue, reported Q4 revenue and EPS that beat estimates and the FY23 outlook on operating margins and revenue were in line with analyst estimates. It was clear that investors had lowered their expectations below that of analysts as the FY23 outlook hitting estimates led to a 16% rally in extended trading. Maersk is reporting lower than estimates Q4 revenue and EBITDA in line, but the FY23 outlook on EBITDA of $8-11bn vs est. $13.5bn is a big miss and maybe a bit too conservative if the cyclical upturn gathers steam. Vestas is reporting a FY23 outlook that signals further challenges and weakness in the wind turbine business with FY23 revenue outlook at €14-15.5bn vs est. €14.8bn and adjusted EBIT margin of –2% to +3%. Shares are indicated down 5% in pre-market trading. Weak German industrial production, delayed Jan. preliminary CPI due today Germany’s industrial production for December saw a steeper fall than expected, coming in at -3.1% MoM (vs. estimated -0.8%) while the November print was revised higher to +0.4%. After a technical delay last week, Germany’s inflation prints for January will be released today. Spain and France printed higher-than-expected CPI for the month, while the region-wide printed was softer last week. This suggests Germany’s inflation likely eased due to energy price increases being more subdued than previously expected. Meanwhile, adjustments in the CPI basket could also likely result in a softer print. Bloomberg consensus expects 10.0% YoY from 9.6% YoY in December, with the MoM print also turning positive at 1.3% from -1.2% previously. Biden State of the Union address includes tough rhetoric on China In Biden’s State of the Union address last night, the US President claimed autocratic regimes were growing weaker and suggested that China and its leadership are in a challenged position, shouting at one point “Name me a world leader who’d change places with Xi Jinping. Name me one, name me one.” and later saying that “I am committed to work with China where it can advance American interest and benefit the world....but make no mistake: as we made clear last week [in shooting down purported Chinese spy balloon] if China threatens our sovereignty, we will act to protect our country, and we did.” Intel places $11bn in bonds in a seven-part deal. To fund its expansion of production facilities, funding working capital and refinancing existing debt, Intel has placed some $11 billion in funds via corporate bond issuance yesterday, a series of 7 bonds with maturities of 3-, 5-, 7-, 10-,20-,30- and 40 years. The last of these features a yield that is 2.15% higher than US 30-year T-bonds, some 20 basis points tighter than anticipated (The US 30-year T-bond yield is currently near 3.70%). By comparison, the current dividend yield on Intel stock is near 5.00%. What are we watching next? String of Fed speakers today, 10-year Treasury auction Incoming data may have more primacy for moving US treasury yields than Fed speakers, but we do have a rather heavy schedule of FOMC voters on tap for today, including the NY Fed’s Williams, who will be interviewed at a live WSJ event. Board of Govern’s members Lisa Cook and Michael Barr are also out speaking as noted in the calendar highlights below. The hawkish Minneapolis Fed president Kashkari and Board of Governors member Waller are out speaking later in the day, the latter of these discussing the economic outlook. After the recent resurgence in treasury yields and yesterday’s weak 3-year treasury auction, plenty of attention as well on today’s 10-year treasury auction. Earnings to watch Today’s US earnings focus is Uber Technologies and Walt Disney. The on-demand ride hailing service Uber will report before the market opens with analysts expecting revenue growth of 47% y/y in Q4 with the EBITDA margin expending further into positive territory as the company prepares to become fully profitable in FY23. Disney reporting after the market close is expected to see revenue growth of 7% y/y in Q4 and EBITDA margin bouncing back from the low point in Q3. Wednesday: A.P. Moller – Maersk, Vestas Wind Systems, TotalEnergies, Societe Generale, Deutsche Boerse, Adyen, Equinor, Yara International, Walt Disney, CVS Health, Uber Technologies Thursday: KBC Group, Brookfield, Thomson Reuters, L’Oreal, Vinci, Credit Agricole, Siemens, Toyota Motor, NTT, Honda Motor, AstraZeneca, Unilever, British American Tobacco, ArcelorMittal, DNB Bank, Volvo Car, Zurich Insurance Group, Credit Suisse, AbbVie, PepsiCo, Philip Morris, PayPal, Cloudflare Friday: Enbridge, Constellation Software Economic calendar highlights for today (times GMT) Poland Base Rate Announcement 1415 – US Fed’s Williams (voter) to speak 1500 – US Fed’s Barr (Voter) and Bostic to speak 1530 – US EIA Weekly Crude Oil and Product Inventories 1730 – US Fed’s Kashkari (Voter 2023) to speak 1800 – US 10-year Treasury auction 1830 – Canada Bank of Canada publishes summary of deliberations 1845 – US Fed’s Waller (Voter) to speak 0001 – UK Jan. RICS House Price Balance Source: Financial Markets Today: Quick Take – February 8, 2023 | Saxo Group (home.saxo)
Indonesia’s trade surplus narrows in March

Analysis Of The Indonesian Rupiah (IDR) By Economists At ING

TeleTrade Comments TeleTrade Comments 08.02.2023 09:51
The Indonesian Rupiah strengthened sharply in January. Economists at ING expect IDR to remain supported by China’s recovery. IDR rally stalled by dovish BI “Bank Indonesia (BI) hiked policy rates by 25 bps to help slow still-elevated core inflation. However, Governor Perry Warjiyo hinted that the current rate hike cycle was ending, which may help to cap further IDR appreciation.” “China’s recovery and support for Indonesia’s commodity exports could help support the IDR this year.” See: USD/IDR set to plunge to 14,500 by end-2023 – MUFG
Australian dollar was boosted by record low Australian unemployment rates, historical local budget surplus and a surprising resumption of cash rate

The Australian Dollar (AUD) Is Unlikely To Weaken Further

TeleTrade Comments TeleTrade Comments 08.02.2023 09:52
According to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, AUD/USD is now seen navigating within the 0.6865-0.7055 range in the next weeks. Key Quotes 24-hour view: “We noted yesterday that downward pressure has eased somewhat and that AUD is unlikely to weaken further.  We expected AUD to trade in a range between 0.6865 and 0.6930. While AUD did not weaken further, instead of trading in a range, it rebounded strongly to 0.6989 before ending the day on a strong note at 0.6960 (+1.12%). The sharp rise appears to be overdone but there is room for AUD to test 0.7000 before easing. The major resistance at 0.7055 is not expected to come under threat. Support is at 0.6925, followed by 0.6890.” Next 1-3 weeks: “After AUD fell sharply, we indicated on Monday (06 Feb, spot at 0.6920) that while AUD could weaken further, the 0.6825 level is expected to offer solid support. However, AUD did not quite test 0.6825 (low of 0.6856 on Monday) and yesterday, it rebounded strongly to a high of 0.6989. The breach of our ‘strong resistance’ level at 0.6980 indicates that the downward pressure has eased. AUD appears to have moved into a consolidation phase and it is likely to trade between 0.6865 and 0.7055 for the time being.”
If The Bank Of England Hike Interest Rates Again Later This Month Will Exert Downward Pressure On The EUR/GBP Cross

The EUR/GBP Pair Is Pressing Through The Support Level

TeleTrade Comments TeleTrade Comments 08.02.2023 10:01
EUR/GBP is hovering around the 0.89 support. However, economists at ING doubt that the pair is to sustain more losses.  Don’t read too much into a weaker EUR/GBP “EUR/GBP is pressing through the 0.8900 support, but we doubt this is the start of a longer downtrend in the pair.” “The Bank of England’s pushback against dovish rate speculation is happening in tandem with the ECB and we don’t see a key catalyst for the two currencies to dramatically diverge in the current environment.”  
Is Gold Ready to Shine Again? US CPI and Fed Policy Insights

Gold’s Upside Is Likely Limited, Yesterday’s Speech From The Fed Chair Powell Was Hawkish

Swissquote Bank Swissquote Bank 08.02.2023 11:09
Another hawkish speech from the Federal Reserve (Fed) Chair Jerome Powell turned into a risk rally yesterday. Equities gained, and the bond yields fell. Fed Yet, yesterday’s speech from the Fed Chair Powell was hawkish. He said that the Fed may hike the rates more than what’s priced in if the jobs market remains unexpectedly strong. Stocks market The S&P500 still eased when Powell said they need ‘substantial evidence’ that inflation slowed, but finally, the index erased gains and ended the session by 1.30% higher. Nasdaq jumped more than 2%. The US 2-year yield eased and the US dollar first jumped, then eased. Zoom and Microsoft In individual stock news, Zoom jumped 10% on news that it will lay off 15% of its workforce, while Microsoft jumped 4% after the company unveiled its new ChatGPT-powered Bing! Forex The EURUSD tipped a toe below its latest bullish trend base, and below its 50-DMA yesterday, and the pair is just at the edge of bullish trend again this morning, with no guarantee that it won’t slide further. Cable rebounded before hitting its 200-DMA, at 1.1950, and is back above the 1.20 mark this morning. Read next: The Decline In Tech Valuations Continues To Hit SoftBank| FXMAG.COM Curde Oil BP shares price jumped nearly 8% to above our mid-term 500p target, after reporting report profit, dividend raise and share buyback, while crude oil jumped more than 4% as API revealed a 2-mio-barrel decline in US stockpiles. Watch the full episode to find out more! 0:00 Intro 0:28 Jerome says one thing, investors hear another thing 1:36 Market update 3:30 One bad, two good news 5:02 Zoom jumps 10% 5:37 Why Microsoft’s AI could be longer-lived than metaverse craze? 7.27 FX update 8:28 BP rallies on profits, oil jumps on US inventories 9:37 Gold’s upside is likely limited Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Powell #speech #inflation #jobs #USD #EUR #GBP #XAU #crude #oil #earnings #Dell #Zoom #layoffs #Microsoft #ChatGPT #Bing #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

Fed Officials Signaled That The Central Bank Still Has A Lot Of Work To Do

Jakub Novak Jakub Novak 08.02.2023 11:26
Euro continues to slump as risk appetite declined after Fed officials made another hawkish comment on Tuesday. Minneapolis Fed President Neel Kashkari said the explosive growth in jobs this January indicates that the central bank still has a lot of work to do as it is becoming increasingly difficult to get inflation back to 2.0%. Economy In short, interest rates will continue to rise and it is likely that it will peak at 5.4% instead of the previously expected 4.75%. Kashkari said they have a target and they know that raising rates can curb inflation, but it is not enough yet so they need to aggressively raise rates and cool the labor market to see a serious impact on the overheated economy. The labor market On Friday, the US Department of Labor reported that non-farm payrolls rose by 517,000 in January, almost triple the economists' expectations. It is the largest growth in the first month since 1946, not to mention it came despite the attempts of the Fed to use higher interest rates to correct the situation. Officials have repeatedly noted that there is an imbalance in the labor market with supply and demand. Average hourly pay also rose 4.4% in January. Kashkari's statement  Kashkari's statement that rates should be raised to 5.4% puts him in a more aggressive position compared to his fellow policymakers, who indicated in December that they see the peak at around 5.1%. The Fed has raised the benchmark federal funds rate eight times after inflation reached its highest level in more than 40 years. The most recent increase took place last week, which was by a quarter of a percentage point, the smallest since the policy tightening cycle began. However, inflation, although falling, is still well ahead of the Fed's target. Thus, policymakers continue to signal further increases at upcoming committee meetings. An example of this is Atlanta Fed President Raphael Bostic, who made a similar suggestion a day earlier. Read next: The Decline In Tech Valuations Continues To Hit SoftBank| FXMAG.COM EUR/USD Talking about the forex market, there is quite a lot of pressure on EUR/USD as no one believes that the ECB will be able to maintain its hawkish policy. To stop the bear market, traders must keep the quote above 1.0720. That will spur a rise to 1.0770 and possibly, to 1.0800 and 1.0830. In case of a decline below 1.0720, pressure will increase, which will lead to a further fall to 1.0680 and 1.0650. GBP/USD In GBP/USD, the sideways trend remains, so buyers need to push the quote above 1.2070 to regain their advantage. Only the breakdown of this resistance will push the pair to 1.2140, after which it will be possible to head towards 1.2200. But in the event that pressure returns and bears take control of 1.2010, the pair will plunge to 1.1950 and 1.1880.   Relevance up to 08:00 2023-02-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/334492
Bank of England is expected to hike the rate by 25bp. Kelvin Wong talks Euro against British pound

The GBP/USD Pair Climbed To Around 1.2100, The EUR/USD Pair Is Above 1.0700

Kamila Szypuła Kamila Szypuła 08.02.2023 13:18
The dollar fell as Powell spoke. The dollar fell Wednesday after Federal Reserve Chairman Jerome Powell refused to significantly tighten his tone on inflation in a closely watched speech, despite last week's strong employment data. USD/JPY The yen tumbled earlier this week as robust US jobs data suggested the Fed had more room for interest rate hikes. Recently, Japan's central bank countered speculation about another policy adjustment by keeping interest rates very low and leaving its yield control policy unchanged. As things stand, it seems that the market is having a hard time assessing the way forward as strong US data brings constant warnings of more hikes, which usually support USD valuations. At the same time, Japan is considering nominations for the top BoJ position for April, as the likelihood of policy normalization at the ultra-dovish Bank of Japan by the new incumbent cannot be ruled out. In the morning, the USD/JPY pair started rising towards 131.30. USD/JPY traded above 131.00 for the following hours of trading but fell below in the European session and is now trading at 130.6910. EUR/USD EUR/USD rebounded towards 1.0750 on Wednesday after falling below 1.0700 late Tuesday but struggled to gain further momentum. In the absence of high-impact data releases, investors will pay close attention to comments from Fed officials. Currently, the EUR/USD pair has fallen below this level, but slightly to the level of 1.0740. On Tuesday, mixed comments from European Central Bank (ECB) officials made it difficult for the euro to gain an advantage over its rivals. ECB politician Francois Villeroy de Galhau said they are not very far from the peak of inflation. On a hawkish note, policymaker Joachim Nagel reiterated that further significant interest rate hikes would be needed, adding that ECB rates were not restrictive yet. Finally, Isabel Schnabel, member of the Executive Board of the ECB, took a neutral tone. Federal Reserve Chairman Jerome Powell said US interest rates may need to be raised while the process of "disinflation" appears to be underway. Read next: Douyin Wants To Enter The Food Delivery Industry| FXMAG.COM GBP/USD At the end of Tuesday, FOMC Chairman Jerome Powell also confirmed good labor market data and reiterated that they will probably have to make further rate hikes. On an optimistic note, Powell said he expected 2023 to be "a year of significant decline in inflation." This remark made it harder for the US Dollar Index to maintain its upward momentum and helped GBP/USD recover some of its losses this week. From the UK's perspective, the strike action remains a concern for the government and civil servants are planning to carry out another strike on March 15. Chancellor of the Exchequer Jeremy Hunt will present his fiscal plan on the same day and will be under additional pressure to possibly reassess inquiries about the pay settlement. Overall, it is bearish for the pound as strike action disrupts the UK economy and challenges UK leadership. GBP/USD pair gained momentum and climbed to around 1.2100 on Wednesday. Currently, the GBP/USD pair is trading above 1.2090$. AUD/USD The Aussie pair is defending support at 0.6950 with the US Dollar generally subdued so far. The Aussie pair surged above 0.6990 today but failed to maintain momentum and is currently trading above 0.6980. Yesterday the RBA raised rates by 25 bp. Source: finance.yahoo.com, investing.com
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

The USD/JPY Price Is Trying To Fight A Difficult Resistance

InstaForex Analysis InstaForex Analysis 09.02.2023 08:00
As you can see on the daily chart, the MACD indicator line is a difficult resistance, and the price is trying to fight it for the fourth day. Even the help of the ascending Marlin oscillator proves ineffective. If we look at the market, we can all see that the dollar is strengthening, but yesterday, the S&P 500 fell 1.11%, and if it doesn't rise, then the USD/JPY pair will just move around the 130.00-133.75 range. The range looks wide, but it would be dangerous to trade in it. In the current situation, I expect the price to overcome the MACD line (132.00) and will move to the target at 133.75. But it may not reach the level, as it happened on January 11 (green check mark). On the four-hour, we have an uptrend - the price is above the indicator lines, the Marlin oscillator in the green zone. If the price goes under the MACD line (130.73), its attempt at climbing to 133.75 may not work out, we can expect the price to fall to 130.00. Relevance up to 03:00 2023-02-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334582
UK Gfk Consumer Confidence index got better fourth month in a row

The Opportunity For Growth Of The GBP/USD Pair Is Very Weak

InstaForex Analysis InstaForex Analysis 09.02.2023 08:01
Yesterday, I put the Fibonacci time frames tool on the daily chart and suggested that on Wednesday or Thursday, i.e. today, the pound will fall even further. Yesterday it was rising, so we will expect a decline today, on the first bar after the 6th timeline. The UK will release an important report tomorrow and it is expected to be weak; the Q4 GDP growth is expected to be 0.0%, December GDP may show a -0.3% decline, annual GDP may be down 0.4% from the previous 1.9%, industrial production for December is expected to be down 0.2%, trade balance is expected to be -16.4 billion pounds from the previous -15.6 billion. Of course, such data is not good for the pound. Investors can already consider this information for today's price. The nearest target for the bears is 1.1933, then the target of 1.1737 will become available. On the four-hour chart, the Marlin oscillator has consolidated in the growth zone, but the price is actually prevented by the balance indicator line, which is already below the target level of 1.2155 and may accelerate the decline. In general, according to the aggregate indicators of the two charts, the opportunity for growth is very weak, we expect the development of the downtrend.   Relevance up to 03:00 2023-02-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334584
Rates Spark: Crunch time

The EUR/USD Pair Has Two Unsuccessful Attempts To Rise Above The Resistance Level

InstaForex Analysis InstaForex Analysis 09.02.2023 08:03
The EUR exchange rate changed a bit at the end of yesterday, there was a weak test of resistance 1.0758. The current support is the balance indicator line on the daily chart. The Marlin oscillator is in no hurry to perform its leading role, lying in the horizon and waiting for a signal from the price. By its nature, the price settles under the resistance of the price level and the MACD line, as a consequence, we might receive a signal to strengthen the decline. The targets are the levels: 1.0660, 1.0595. On the four-hour chart, the signal line of the Marlin oscillator has approached the zero line, the oscillator is released from the oversold area, and now it is ready for a new decline. Here we also see two unsuccessful attempts to rise above the resistance 1.0758. In case we suddenly encounter a sudden breakout, the MACD line near 1.0815 could be the limit of the correction.   Relevance up to 03:00 2023-02-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334586
UBS buys Credit Suisse for $3.2bn. Last week was the worst one for equity markets in 2023

Analysis Of The USD/CHF Currency Pair Movement

InstaForex Analysis InstaForex Analysis 09.02.2023 08:06
After USD/CHF main currency pairs succesfully breaks above Equal High on the level 1,0027 which was the target of the BULL movement on the weekly chart of the currency, now USD/CHF is being pulled down where this has been confirmed by the appearance of a deviation between the price movement and the Awesome Oscillator indicator and the halting of its weekly upward correction movement by the Dynamic Resistance of the 10 weeks average price movement, so that within the next few days USD/CHF will try to move down to get to its BEARISH target level at the level of 0.8925 but if on its way to the target level previously mentioned USD/CHF suddenly undergoes a correction upwards past the level 0.9370 then most likely the current Bearish bias will be restrained and possibly reverse direction so that the scenario previously described will become invalid and automatically cancel itself. Read more: https://www.instaforex.eu/forex_analysis/119123   Relevance up to 03:00 2023-02-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/119123
FX Daily: Euro’s attractiveness on the rise

The EUR/USD Pair Is Now On The Way To Completing Its First Bearish Wave

Oscar Ton Oscar Ton 09.02.2023 08:17
Technical outlook: EURUSD slipped through 1.0709 late on Wednesday before finding interim support. The single currency pair is seen to be trading close to 1.0730 at this point in writing as it continues to drift within a 90-pip range before breaking out. The bears are still left with some more room to drag towards 1.0540 at least. Ideally, they are aiming to break below the initial support at 1.0481. EURUSD has completed its higher-degree rally between 0.9535 and 1.1020-25 as seen on the daily chart presented here. The instrument is expected to produce a meaningful corrective decline towards 1.0480 and up to 1.0100-20 levels in the next few weeks. Once complete, the bulls might be back in control pushing prices above the 1.1020-25 area. EURUSD is now on the way to completing its first bearish wave, which started from the 1.1020-25 zone earlier. It is expected to terminate just below the 1.0500 handle, taking out support at 1.0481 before producing a pullback rally. The third wave lower is then expected to terminate close to the 1.0100-20 area, which is the Fibonacci 0.618 retracement of the earlier rally. Trading idea: Potential bearish move against 1.0100-20 Good luck! Relevance up to 04:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311993
Would Federal Reserve (Fed) go for two more rate hikes this year? Non-voting Bullard say he would back such variant

Analysis Of The US Dollar Index Situation

Oscar Ton Oscar Ton 09.02.2023 08:20
Technical outlook: The US dollar index has rallied through 103.00 after finding support around 102.60 on Wednesday. The index is seen to be trading close to 103.00 at this time in writing as the bulls prepare to push through 104.50-60 and up to 105.35. They might have some more steam left to target the initial resistance at 105.35 before pulling back. Earlier, the US dollar index terminated its larger-degree decline at 100.50 before finding support again. Prices have rallied through 103.60 since then, indicating that a similar-degree corrective rally is underway. The initial target is seen towards 105.35, followed by 109.50 to complete the correction. The bears might be looking to come back in control thereafter (109.50). The US dollar index is looking close to completing its initial rally of a much deeper correction around 105.00 in the near term. We can expect the price to pull back lower thereafter before it produces its final thrust rally towards 109.50 going forward. Also, note that 109.50 is the Fibonacci 0.618 retracement of the entire drop between 114.70 and 100.50 levels respectively. Trading idea: Potential rally against 100.00 Good luck!     Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/311995
The GBP/USD Pair Is Expected The Consolidation To Continue

The Downward Trend Of The GBP/USD Pair Is Likely To Continue

Paolo Greco Paolo Greco 09.02.2023 08:25
Analysis of GBP/USD, 5-minute chart On Wednesday, the pound/dollar pair was mainly trading sideways. Traders priced in all the events of the previous week, including the key interest rate decisions and possible changes in them. The downward inertial movement also stopped. Now, the market needs a new impulse. This could become possible only on Friday when the UK will disclose its GDP data for the fourth quarter. However, the likelihood is really low. In this light, the pair may continue trading sideways and show a slight movement within the channel. Under such conditions, it will be difficult to trade. The volatility is low, which causes additional problems for traders. Yesterday, neither the UK nor the US published a report that could attract traders. Although officials of the Fed and the BoE provide speeches from time to time, they do not give any new information. Traders clearly understand the stance of both regulators. Yesterday, we saw three sell signals near the level of 1.2106. All the signals were accurate. Since the signals were very much alike, it was possible to open only one position. The third attempt allowed the pair to drop by more than 20 pips. Those who closed the position manually received 20-30 pips of profit. COT report The recent COT report on the pound sterling unveiled that the bearish sentiment became weaker. During the week, non-commercial traders closed 6.7 thousand BUY contracts and 7.5 thousand SELL contracts. Thus, the net position of non-commercial traders increased by 0.8 thousand. During the last few months, the net position was increasing quite stably. The sentiment of big traders could become bullish in the near future. It is still very hard to explain why the pound sterling increased so much against the US dollar. In the mid-term, the British pound could drop as it needs correction. In general, the recent COT reports have been corresponding to the pound's movement. Since the net position is not bullish anymore, traders may buy the asset in the next few months. By the moment, non-commercial traders have opened 35 thousand buy positions and 59 thousand sell positions. We do not expect long-lasting growth in the pound sterling. Although it has technical reasons for that, the fundamental and geopolitical factors do not presuppose a strong and fast increase. Analysis of GBP/USD, 1-hour chart On the hourly chart, the pound/dollar pair is trying to rise, but all in vain. The price is located below the critical line, which is acting as strong resistance. Thus, bulls may fail to break it. The downward trend is likely to continue. However, before that, the price may trade sideways for some days. On February 9, there are the following important levels: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2288, 1.2342. The Senkou Span B (1.2218) and Kijun-sen (1.2111) lines can give signals. Rebounds and breakouts of these levels could also act as signals. It is recommended to place the stop loss level at the breakeven when the price covers 20 pips in the right direction. The lines of the Ichimoku indicator could move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels that could be used to fix profits. On Thursday, the UK and the US will hardly provide traders with important information. The US will disclose only its unemployment claims report, which may attract attention only if real data seriously contradicts forecasts. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 06:00 2023-02-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334596
Rates Spark: Nothing new on the dovish front

The EUR/USD Pair Should Correct For A Bit

Paolo Greco Paolo Greco 09.02.2023 08:28
M5 chart of EUR/USD On Wednesday, EUR/USD traded mainly sideways. Fundamental and macroeconomic backgrounds were completely absent on this day, so traders had nothing to react to. I've said before that this week could be boring. In fact, besides the sharp surge during Federal Reserve Chairman Jerome Powell's speech on Tuesday evening, we haven't seen any normal moves yet. First, the pair was falling by momentum, then it just stopped falling and now it is trading sideways. So this kind of movement may persist till the end of the week since the amount of reports and events will obviously not increase. I still believe that the pair should correct for a bit (or trade flat for a while), and after that it will go back to falling. The euro is still overbought and a new uptrend will be formed after a significant bearish correction. Speaking of Wednesday's trading signals, it was not appealing at all. Since the pair was flat for most of the day, the signals were formed accordingly. All of them are near 1.0736. Since all of them were false, traders could try to use only the first two. You could receive about 15 points on the short position, and nothing on the long position, since the price passed 15 points to the upside and the Stop Loss has triggered at breakeven. Not the best trading day, but it could've been much worse. COT report The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since September. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. In the reporting week, non-commercial traders opened 9,500 long positions and 2,000 short ones. The net non-commercial position grew by 7,500. The number of long positions exceeds that of short ones by 134,000. It now remains to be seen how long large traders will be bullish. From the technical point of view, a bearish correction should have already occurred. Traders will unlikely stay bullish for another 2 or 3 months. Even the net non-commercial position shows that it is time for a correction. In total, there are 52,000 more long positions now among all groups of traders (732,000 vs 680,000). H1 chart of EUR/USD On the one-hour chart, EUR/USD continues to fall. I already warned you that the first days of the week could be moved by momentum, afterwards there were several attempts to correct, but so far the pair is trading more flat than a correctional movement. On Thursday, important levels are seen at: 1.0485, 1.0581, 1.0658-1.0669, 1.0762, 1.0806, 1.0868, 1.0938 and also Senkou Span B (1.0917) and Kijun Sen (1.0804). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events in the EU and the US on February 9, unless you consider the trivial Jobless claims report. Today, the pair may remain inside the 1.0669-1.0762 channel. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 05:00 2023-02-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334594
Small factors combine to pressure credit

Analysis Of The EUR/USD Pair Movement

Torben Melsted Torben Melsted 09.02.2023 08:31
As long as minor resistance at 1.0767 is able to cap the upside, a final spike lower to 1.0650 can't be excluded, but the odds are decreasing for this outcome. So, we will keep our eyes on the minor resistance for confirmation that waves C and 4 have been completed and wave 5 is in progress for a rally towards 1.1391. A failure to break above 1.0767 followed by a break below minor support at 1.0709 will call for the final spike to 1.0650 to complete waves C and 4. Relevance up to 07:00 2023-02-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/312023
Bank of England survey highlights easing price pressures

Bank of England: Two data points that will make or break a March rate hike

ING Economics ING Economics 09.02.2023 08:46
In their hunt for signs of 'inflation persistence', policymakers will be paying particular attention to the service sector. They will also want to see further changes in wage and price-setting behaviour in the Bank's own survey of businesses. One final 25 basis point rate hike in March still looks likely 'Inflation persistence' - what does it actually mean? The Bank of England might be done with rate hikes – or at least that was one possible interpretation of the abrupt change in the Bank’s forward guidance last week. Officials said they would now closely monitor indicators of inflation “persistence” to judge whether further tightening is needed. Our own view is that the Bank has one more 25bp hike to come in March. The choice of the word 'persistence' is interesting. It implies policymakers aren’t going to be as beholden to month-to-month swings in headline, or perhaps even overall core, inflation. Instead, the Bank is trying to isolate trends in prices – or price-setting behaviour – that will still be relevant for inflation over a two- or three-year horizon. Our analysis shown in the chart below shows that, unsurprisingly, it is the service-sector components of the inflation basket which are typically less volatile and tend to experience more persistent trends. It's these price categories that policymakers are going to be most focused on. And if we strip out the main exception to that rule, ‘travel services’ (which fluctuate because of airfares), then we end up with a measure of ‘core services’ – something we know the Bank of England closely watches. Service-sector inflation is less volatile and more persistent than goods categories Analysis based on seasonally-adjusted month-on-month changes in various sub-components of the CPI index since 2005. Volatility is measured using the coefficient of variation (standard deviation divided by the mean). Persistence is measured by calculating a simple autoregression on lagged data-points, and taking the sum of the lagged coefficients. This follows similar analysis by the ECB in 2022 Source: Macrobond, ING calculations   Indeed, the fact that core services inflation outpaced the Bank of England’s November forecasts – and indeed is showing little sign of peaking – was probably a major factor in the decision to hike rates by another 50bp this month, rather than following the Federal Reserve into a more modest 25bp move. The Bank's most recent forecasts see core services inflation climbing from 6.5% to 7%, where it’s expected to linger for some time. Core services inflation has continued to edge higher Source: Bank of England Bank's own Decision Maker Panel will be a key dataset to watch We’ll have a couple more inflation readings before the Bank’s March meeting, and any further upside surprises in core services would almost certainly unlock another 25bp rate hike in March (even if the choice of language at last week’s meeting suggests the bar is high for another 50bp move). But ultimately, this is a backward-looking measure – or at least, it doesn’t tell us a great deal about the likely trajectory over coming months. For that, the Bank will be closely monitoring its Decision Maker Panel, a survey of businesses - something we know policymakers appear to place a lot of weight on, much more so than investors perhaps realise. We’ll get the next instalment on 2 March. This is arguably a more forward-looking gauge of pricing behaviour, and at the margin, the most recent data contains hints that the inflation story may be turning. Expected rates of wage growth and three-year-ahead inflation expectations both came down in January, while the proportion of firms experiencing “much harder” recruitment conditions has also tumbled over recent months. The proportion of firms saying it's 'much harder' to recruit has been falling Source: Macrobond (Bank of England Decision Maker Panel)   We think these are trends that are likely to continue. Admittedly, the structural issues in the jobs market – worker illness and lower inward EU migration through Covid – are unlikely to reverse imminently, and that suggests employee availability will remain an issue, even as hiring demand cools. Wage growth, though probably at a peak, is unlikely to cool rapidly. But wages aren’t the only driver of core inflation, and in fact, energy prices are a more commonly cited factor than labour costs as a reason for raising prices in the service sector, according to successive ONS business insight surveys. That suggests the recent collapse in wholesale gas prices should alleviate a key source of pressure on firms and their pricing decisions. The caveat is that some corporates will have locked into electricity/gas hedges at elevated levels, though an ONS survey from the autumn suggested firms with expiring energy fixes before April 2023 were in the minority. The lesson here is that we shouldn’t ignore the impact of falling gas prices on the outlook for medium-term service-sector inflation, even if ordinarily we’d strip out the impact of electricity/gas along with petrol prices when looking at core CPI. Together with the widely-anticipated fall in goods-price inflation, overall core inflation should ease gradually as the year wears on. Energy prices are a common factor in service-sector decisions to raise prices Source: ONS Business Insights Survey wave 74 Data points to one final 25bp rate hike in March What does this mean for the near-term policy outlook? The Bank will want to see more evidence that the trends in pricing behaviour are persisting, and in reality, it’s unlikely to have enough concrete information by the time of the March meeting. Policymakers are clear that the burden of proof is on inflation showing signs of easing, not the other way around.  That suggests we should still expect a 25bp rate hike next month, though we think the Bank will become more relaxed about inflation by the time of the May meeting. However assuming the downtrend in core services inflation is a gradual one, we suspect a rate cut will be less forthcoming in the UK than in the US, where we think policy easing will arrive by year-end. We don’t expect the first BoE rate cut for at least a year. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
FX Daily: Riksbank needs to stay hawkish today

FX Daily: Riksbank needs to stay hawkish today

ING Economics ING Economics 09.02.2023 08:56
The Riksbank should hike by 50bp today, in line with expectations. We think it is necessary to sound hawkish to help restore confidence in the krona, despite a deteriorating economic and property market backdrop. Meanwhile, high-beta FX is on the rise this morning, but the rally may be premature given the scope for more hawkish Fed rate repricing Stefan Ingves is the Governor of the Swedish Central Bank USD: May be too early to jump back on short-dollar bets After only moderately hawkish remarks by Federal Reserve Chair Jerome Powell on Tuesday, other Fed officials delivered more aggressive comments on the prospects for tightening yesterday. Christopher Waller, Lisa Cook, John Williams and Neel Kashkari all pointed at either the need for rates to go beyond 5.0% or reiterated the higher-for-longer narrative. All this prevented a recovery in risk sentiment yesterday and helped the dollar build a temporary floor. This morning, European and US equity futures point to a positive open, and high-beta currencies are in demand. This might be a sign that markets are seeing this moment as the peak in the Fed’s hawkish communication and are now eyeing opportunities to re-enter short-USD pro-cyclical positions at more attractive levels.   However, there is still some room for USD rates to absorb further hawkish repricing in rates expectations, and the rebound in risk currencies may be premature. Markets are pricing in a 5.13% Fed peak rate as of this morning, so still not fully factoring in another hike beyond March. Around 50bp of easing in the second half of the year remains in the price, which reflects both disinflation and recession risks in the US. Probably, the aim of hawkish Fed speakers at this stage is to convince markets that a) rates can go at least to 5.25%; b) that rate cut speculation is misplaced. It is fair to expect that more evidence from data will be required to convince markets of another 25bp after March. Jobless claims are the highlight of the day in the US today, and tomorrow’s University of Michigan sentiment index is the last piece of data in the US for the week. We think that a more patient trading environment could return after this morning’s risk-on mood and last until Tuesday’s pivotal US inflation report. In FX, it appears too early for the dollar to re-enter a sustained downtrend: local stories may instead take centre stage.   Francesco Pesole EUR: German inflation tests ECB hawkish comments German inflation numbers released this morning surprised on the downside. Headline CPI grew 8.7% year-on-year, lower than the forecasted 8.9%. The EU-harmonised print showed a deceleration from 9.6% to 9.2%, while consensus expectations were for a return to double-digit inflation. This will probably test the ability of the European Central Bank to continue pushing back against the bullish reaction in the rates market after last week’s ECB meeting. We’ll hear from Governing Council members Francois Villeroy, Joachim Nagel, Pablo Hernández De Cos and Luis de Guindos today. EUR/USD may struggle to climb back to the 1.0800 handle just yet. Elsewhere in Europe, keep an eye on Bank of England Governor Andrew Bailey as he testifies before parliament. Like in the eurozone, we have seen a good deal of hawkish commentary in the UK following last week’s BoE rate decision, and markets likely expect any policy comments today to fall on the hawkish side of the spectrum too. Weakness in the euro is endorsing the recent drop in EUR/GBP, and 0.8800 might be tested in the near term. Still, we don’t see the pair’s depreciation as sustainable given the grim economic outlook for the UK and no clear policy divergence.   Francesco Pesole SEK: A big day for the Riksbank The Riksbank and its new Governor Erik Thedeen are facing a historic challenge. The Swedish economic outlook looks very bleak, with both GDP and high-frequency data pointing down and the housing market having already corrected 15%. On top of that, inflation remains above 10% and the krona is close to all-time lows against both the euro and in trade-weighted terms. Today’s rate announcement and monetary policy report is of huge importance for the krona. We expect, in line with consensus, a 50bp rate hike today (here is our full preview). This outcome is fully priced in, but more uncertainty lies around the forward-looking tone and rate projections. We think the Riksbank has all the interest in sounding hawkish at this stage, despite acknowledging the risks related to the housing slump and high inflation. Rate projections from November see a peak below 3%: we think today’s revision will take it to at least the 3.25-3.50% region. With wage negotiations in Sweden about to end and a tendency for Swedish data (especially CPI) to be rather volatile, patience should be the name of the game for the Riksbank now. Even in the face of a clearly worsening economic outlook, the Bank should focus on a) halting the slump in the krona; b) keeping inflation expectations in check. To us, this appears a necessary step to restore confidence in Swedish markets. Then, data will undoubtedly need to come to the rescue, but with no policy meetings until the end of April, there is definitely some time for the economic and inflation picture to improve. We think a hawkish 50bp hike by the Riksbank can prevent another leg higher in EUR/SEK: a primary goal is to create a cushion for the pair to the all-time March-2009 11.68 highs. With markets currently attaching around 2.5-3% of risk premium to EUR/SEK due to concerns about the Swedish economy, SEK is not lacking room for recovery (our base case is still for a drop below 11.00 in EUR/SEK by the summer). We doubt this will happen in the near term though, and despite a convincing hawkish message by the Riksbank today, restoring confidence in the krona will require help from data. EUR/SEK may trade around 11.20-11.40 in the coming weeks, and that should already be a welcome development for the Riksbank. Francesco Pesole CEE: NBR's turn to confirm end of hiking cycle After the National Bank of Poland (NBP), today it is the turn of the National Bank of Romania (NBR) to confirm what we believe is the end of the hiking cycle. We don’t expect any change in the key rate level, but a mildly cautious tone could be employed to balance the obvious easing of monetary conditions since the last meeting. On FX side, the record demand for ROMGBs is having a positive impact on the Romanian leu, which has been below the NBR's intervention level most of the time since the beginning of the year. Massive inflows into bonds have helped the RON to test levels below 4.90 EUR/RON several times. Plus, global conditions, led by falling gas prices and a higher EUR/USD, are positive for FX. On the local side, the FX implied yield remains attractive as well, fluctuating steadily in the 6.60-7.00% range for the 3M tenor, comparable to the Czech koruna and Polish zloty. However, given the NBR's solid track record of managing the RON, potential FX depreciation losses look limited, which gives a distinct advantage, especially against the Hungarian forint and Polish zloty. Thus, we continue to expect the RON to hold below the 4.90 EUR/RON level depending on further inflows into ROMGBs. As expected, the NBP left rates unchanged yesterday and the statement did not bring much new information. So the main focus will be on Governor Adam Glapinski's press conference today at 3pm local time. The main questions will be on what inflation numbers the NBP expect for January and February, when inflation is expected to peak, and whether the governor still believes in the possible year-end rate cut he mentioned last time. The Polish zloty stabilised yesterday, but market rates have been volatile in Poland this week, probably also due to the NBP meeting, and the zloty remains fragile. The governor's words are thus likely to determine the zloty's direction. On the one hand, we see market expectations still significantly more dovish than our forecast, on the other, the whole IRS curve is higher by about 20-30bp over the last month. Thus, we expect the zloty to maintain the current 4.73-4.75 EUR/PLN range. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Vestas Wind System FY23 Outlook Signaled Further Challenges And Weakness, The Adani Group Plans To Prepay a $500mn Bridge Loan

Vestas Wind System FY23 Outlook Signaled Further Challenges And Weakness, The Adani Group Plans To Prepay a $500mn Bridge Loan

Saxo Bank Saxo Bank 09.02.2023 09:06
Summary:  U.S. equities pulled back by over 1%, led by a selloff in the tech space. Google’s parent Alphabet tumbled 7.7% after Google's newly introduced Chatbot Bard’s reportedly underwhelming performance. The decline in bond yields following a strong Treasury auction failed to boost the stock market. Investors are excited about the prospect of AI generative content and bid up shares related to ChatGPT-like products and on the other hand, have concerns about the potential disruption to the mega-cap technology companies.   What’s happening in markets? US equities (US500.I and USNAS100.I) lower, dragged by tech selloff US stocks retreated led by a selloff in the technology space on concerns about the disruption caused by the technological advancements in AI-generated content. Alphabet (GOOGL:xnas) tumbled 7.7% after reports of the underwhelming performance and erroneous responses from the company’s newly introduced Chatbot Bard. Meta (META) dropped 4.3%. Lumen Technologies (LUMN), tumbling 20.8% on well-below-expected earnings guidance for 2023, was the biggest lower within the S&P500. S&P 500 drifted down 1.1% and Nasdaq 100 plunged 1.7%. Despite the retracement, the S&P500 and Nasdaq are still in their technical uptrends for now. All 11 sectors of the S&P 500 declined, led by communication services, utilities, and information services. Hawkish comments from several Fed officials also weighed on the market sentiment. Fortinet (FINT:xnas) jumped 10.9% after the cyber security company beat revenue and earnings estimates. Uber (UBER:xnys) gained 5% continuing its uptrend since January, with Uber reporting stronger-than-expected quarterly results. Disney (DIS:xnys) rose 5.5% in extended-hour trading, after reporting earnings beating estimates and planning to cut 7,000 jobs for cost saving. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) pulled back on a strong 10-year auction The reaction in the Treasury market was muted to the chorus of hawkish comments calling for higher for longer from Fed’s Williams, Waller, Kashkari, and Cook.  The action came in after a strong 10-year auction which awarded the notes 3bps richer than the market level at the time of auction and a strong bid-to-offer-cover at 2.66 times, increasing from 2.53 times in the previous auction. Yields on the 10-year fell 6bps to finish Friday at 3.61%. Australian equites (ASXSP200.I): This quarter, focus will be on energy companies and companies benefiting from Chinese students returning ASX200 futures suggest a 0.4% fall on Thursday. However, focus will be on energy companies again with oil markets moving up. In company news, Nine Entertainment (NEC): won the rights to the 2024-2032 Olympic Games so that will excite some. Fortescue Metals (FMG) is hoping its iron project in Gabon will one day rival the giant mines of Australia’s Pilbara, with the West African nation giving the go-ahead for digging to start this year. Also keep an eye on travel businesses and educational firms in the quarter ahead with at least 50,000 students from China expected to return to Australia before the start of semester  - with Beijing’s government ruling that degrees earned online will no longer be accredited. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) lacked of direction Hang Seng Index was nearly flat in directionless trading as investors were waiting for more evidence of recovery in China after the initial month-long rally that had repriced equities higher to reflect the radical change in policy directions in China. The benchmark Hang Seng Index was dragged by Meituan (03690:xhkg) which tumbled 6.5% on reports that Douyin was launching a food delivery service in March. Tech stocks overall were laggards. Hang Seng TECH Index dropped 1.9%. Kuaishou (01024:xhkg) plunged 6.2% following the content-sharing and social platform company banned 500,000 accounts for breaching the company’s policies. SenseTime (00020:xhkg) dropped 6.6% as Softbank trimmed its stake in the AI and vision software maker. Baidu (09888:xhkg) retraced 3.1% to pare some recent strong gains despite southbound flow registering a net buying of HKD 671 million on Wednesday. Online knowledge-sharing platform, Zhihu (02390:xhkg) soared 39.6% on the potential of being benefited by ChatGPT application. NetEase (09999:xhkg) climbed 1.1% as the company is planning to roll out a demo online educational product similar to Chat GPT. Ganfeng Lithium (01772:xhkg) gained 5% following the EV battery maker making breakthrough in manufacturing solid-state power batteries. An EV SUV using Ganfeng’s solid-liquid hybrid lithium-ion batter is expected to come to the market in 2023.  In A-shares, northbound flows registered net selling for the fourth day in a row. CSI300 drifted 0.4%. Media, communication, and defense stocks led the decline. Real estate, transportation, and pharmaceutical names outperformed. FX: Aussie gains stall; sterling outperforms After a strong run higher post-RBA, AUDUSD turned lower overnight on hawkish Fed speak. Pair reversed from 0.6996 highs to 0.6920 and will need either a turn in sentiment or another leg higher in commodity prices to sustain this week’s rally. USDCAD also returned back above 1.3400 despite the surge in oil prices. Sterling bounced off 1.2000 support and bounced back to 1.2100 but still staying below the 38.2% Fibo retracement at 1.2120. UK GDP for Q4 will be released tomorrow. Crude oil (CLH3 & LCOJ3) jumps again despite hawkish Fed and inventory build Oil prices rose 1.7% with WTI to $78.50 and Brent above $85 despite a hawkish rhetoric from Fed members as well as higher inventory levels as demand outlook remains upbeat. The EIA reported US crude stocks building 2.4mln bbls in the latest week, contrasting the private data that indicated a draw of a similar magnitude. On the demand side, TotalEnergies sees oil demand will rise to a record this year, in line with the IEA’s messaging. The International Energy Agency expects oil processing will rise to a record 14.4mb/d over the course of the year. That compares with 13.6mb/d in 2022.  Read next: The GBP/USD Pair Climbed To Around 1.2100, The EUR/USD Pair Is Above 1.0700| FXMAG.COM What to consider? Fed speakers call for higher rates A slew of Fed speakers were on the wires yesterday. While a broad chorus on higher rates was maintained, much of which has been the Fed’s message throughout, markets perceived the messages as hawkish primarily as the January jobs report is still keeping investors concerned. Importantly, all the four speakers last night are voting this year. Christopher Waller said rates may have to stay higher for longer. John Williams called the December dot plot a good guide, adding that rates are "barely into restrictive" territory. He also hinted at a slightly higher terminal rate of 5.0-5.5%. Lisa Cook said "we are not done yet." Neel Kashkari expects the peak to rise above 5% this year as services side of the economy is still hot. Market pricing of the Fed path still pretty much unchanged, with terminal rate priced in at just over 5.1%. European companies outperformed in earnings growth Saxo’s Head of Equity, Peter Garnry, mentioned in his latest notes that European companies are the big winner in the Q4 earnings season with 4.8% earnings growth Q/Q and the highest growth rate in revenue Q/Q compared to US and Chinese companies. European earnings are actually ahead of S&P 500 earnings since Q3 2019. As Peter writes in Saxo’s Q1 Outlook, the comeback to the physical world is also a comeback to European equities. The Q4 earnings season also show that earnings are holding up better than we expected despite margin pressures are still an ongoing theme and could intensify during the year. Maersk guided a downbeat 2023 outlook A.P. Moller-Maersk (MAERSKb:xcse) reported lower than estimated Q4 revenue and in-line EBITDA, but the FY23 outlook on EBITDA of $8-11bn vs est. $13.5bn is a big miss and maybe a bit too conservative if the cyclical upturn gathers steam. Maersk’s guidance for global container trade in 2023 at -2.5% to +0.5% again is at odds with the market’s cyclical growth bet. Maersk’s CEO says that a significant inventory adjustment is taking place and that the world is generally moving to a more normal world. Vestas signals weakness in the wind turbine business Vestas Wind System (VWS:xcse) reported a FY23 outlook that signaled further challenges and weakness in the wind turbine business with FY23 revenue outlook at €14-15.5bn vs est. €14.8bn and adjusted EBIT margin of –2% to +3%. If the cyclical upturn continues, it will most likely put more pressure on industrial metals making it difficult for Vestas to expand its operating margin in 2023. The outlook is at odds with the narrative that Europe is undergoing a boom in green energy as the revenue in 2023 is expected to be the same as in 2020. Judging from analyst estimates, it seems that growth is expected to pick up in 2024 with revenue growing to €17.9bn. One thing is for sure, the lack of great headlines coming out of wind turbine makers will add steam to the movement and support for nuclear power which seems inevitable as part of the solution toward net zero carbon in 2050. Cybersecurity company Fortinet beat estimates Fortinet (FINT:xnas), one of the largest cyber security companies on revenue, reported Q4 revenue and EPS that beat estimates and the FY23 outlook on operating margins and revenue were in line with analyst estimates. It was clear that investors had lowered their expectations below that of analysts as the FY23 outlook hitting estimates led to a rally in extended trading. The outlook on operating margin also confirms that cyber security companies are experiencing little margin pressure. Auto companies Toyota, Honda and Volvo report earnings A bevy of EV and motor companies report today including Toyota Motor, Honda Motor and Volvo Car. We think there could be a risk they report weaker than expected results, similar to Ford; which sent Ford shares 8% lower on Friday. Ford is struggling to make money on its EV business and blamed supply shortages. Metal commodities are a large contributor to car manufacturers costs. And we’ve seen components of EVs rise significantly in price, amid limited supply vs the expectation China will increase demand.  For example consider the average EV needs about 83 kilos of copper- and its price is up 26%, 250 kilos of aluminium are needed - and its price is up 20% from its low. These are some headwinds EV makers are facing, in a market where consumer demand is restricted amid rising interest rates.   Adani prepays bridge loans, earnings support sentiment The Adani Group plans to prepay a $500mn bridge loan due next month, in order to avoid a refinancing at higher rate after the recent sell-off. The effort to deleverage also appears to be a response to banks that had started to step away from lending against Adani debt or a measure to avoid a potential rating downgrade. Recent earnings from Adani companies have also hinted at slower inorganic growth to avoid the need for fresh borrowing, and this is helping to rebuild investor confidence. Markets will wait to see some more such confidence-boosting measures from Adani before we can comfortably put a floor to the allegation-driven declines. MSCI’s quarterly review today will be key for any risks of exclusion.   For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Alphabet tumbled on underwhelming Chatbot performance – 9 February 2023 | Saxo Group (home.saxo)
The Indian Rupee Pair Takes Clues From The Receding Fears Of Hawkish Fed Rate Moves

The USD/INR Pair May Witness Recovery

TeleTrade Comments TeleTrade Comments 09.02.2023 09:09
USD/INR remains pressured for the second consecutive day amid broad US Dollar weakness. RBI rejects dovish hike concerns even as matching market forecasts of 0.25% rate hike. Cautious optimism in Asia, downbeat US Treasury bond yields favor Indian Rupee buyers. USD/INR fades bounce off intraday low as Indian Rupee buyers cheer cautious optimism in Asia, as well as a softer US Dollar, during early Thursday. In doing so, the pair sellers extend the Reserve Bank of India (RBI) inflicted losses to around 82.60 by the press time. Market sentiment in Asia improves amid the risk-positive headlines surrounding China. That said, the receding fears of the US-China jitters, following the China balloon shooting by the US, join hopes of People’s Bank of China’s (PBOC) rate cuts and the restart of the China-based companies’ listing on the US exchanges to favor risk-on mood in the bloc. Additionally favoring the sentiment could be the receding recession woes surrounding China and the US. On Wednesday, global rating giant Fitch inflated China's growth forecasts while US Treasury Secretary Janet Yellen and President Joe Biden recently cheered hopes of growth in the current year. It should be noted that the RBI’s rejection of the market’s dovish hike expectations, by suggesting high inflation fears, also seems to weigh on the USD/INR prices. Following the RBI’s 0.25% hawkish move, analysts at ING and Citibank expect another 25 bps rate hike. Alternatively, hawkish Fedspeak, including Fed Governor Christopher Waller, New York Federal Reserve President John Williams and Fed Governor Lisa Cook, highlight inflation fears and defended higher rates, while also pushing back the talks of rate cuts in 2023. On the same line were comments from the US diplomats as Treasury Secretary Janet Yellen mentioned, “While inflation remained elevated, there were encouraging signs that supply-demand mismatches were easing in many sectors of the economy.” Elsewhere, US President Joe Biden said during a PBS interview that there will be no US recession in 2023 or 2024. Amid these plays, the US 10-year Treasury bond yields which reversed from a one-month high to snap a three-day uptrend on Wednesday, pressured around 3.61% at the latest. The same helped S&P 500 Futures to ignore Wall Street’s downbeat closing and remain mildly bid as of late. Read next: The GBP/USD Pair Climbed To Around 1.2100, The EUR/USD Pair Is Above 1.0700| FXMAG.COM Given the cautious optimism in the market and the US Dollar’s failure to justify hawkish Fed bias, the USD/INR pair may witness recovery if the US Weekly Jobless Claims keep portraying a strong US labor market. Also, fears of more Sino-American tussles and higher Fed rates may allow the Indian Rupee (INR) to pare RBI-inspired gains. Technical analysis USD/INR bears need validation from a convergence of the 100-DMA and a two-week-old ascending support line, close to the 82.00 round figure by the press time, to retake control.  
Sharp drop in Canadian inflation suggests rates have peaked

Oil Price Is Struggling To Stretch Its Upside Move And Will Support The Canadian Dollar

TeleTrade Comments TeleTrade Comments 09.02.2023 09:12
USD/CAD is attempting to deliver a breakout of the Falling Channel for the third time. The Loonie asset has reclaimed the 20-EMA, which indicates that the short-term trend is bullish now. A break into the bullish range of 60.00-40.00 by the RSI (14) will activate upside momentum. The USD/CAD pair has dropped firmly to near 1.3435 after failing to recapture a weekly high around 1.3476 in the early European session. The Loonie asset is following the footprints of the US Dollar Index (DXY), which has surrendered the 103.00 cushion amid a sheer recovery in the risk-on impulse. S&P500 futures have extended their gains firmly as investors’ risk appetite has improved after the market digested the hawkish interest rate guidance from the Federal Reserve (Fed). Meanwhile, the oil price is struggling to stretch its upside move above $78.50. It is worth noting that Canada is a leading exporter of oil to the United States and higher oil prices will support the Canadian Dollar. USD/CAD is attempting to deliver a breakout of the Falling channel chart pattern on a two-hour scale, for the third time after two failed breaks due to the absence of strength in the US Dollar bulls. The Loonie is testing the strength of the breakout near 1.3432. The 20-period Exponential Moving Average (EMA) at 1.3423 is acting as major support for the US Dollar bulls. Meanwhile, the Relative Strength Index (RSI) (14) is struggling to cross 40.00. A break into the bullish range of 60.00-40.00 will activate upside momentum. A break above February 7 high at 1.3469 will drive the asset toward January 19 high at 1.3521 followed by January 6 low at 1.3538. On the flip side, a slippage below Wednesday’s low at 1.3360 will drag the asset toward January 3 low at 1.3321 and February 2 low at 1.3262. USD/CAD two-hour chart  
Australian dollar against US dollar decreased amid weak China CPI data

China Inflation Data Will Be Crucial For The AUD/USD Pair Traders

TeleTrade Comments TeleTrade Comments 09.02.2023 09:23
AUD/USD picks up bids to refresh intraday high. Risk profile improves on US-China, growth chatters amid a light calendar. China inflation, RBA Monetary Policy Statement eyed for clear directions. AUD/USD renews intraday top near 0.6965 as buyers benefit from the broad US Dollar weakness and the risk-on mood during early Thursday’s sluggish session. In doing so, the Aussie pair seems to prepare for the next day’s heavy data flow comprising China inflation and monetary policy statement from the Reserve Bank of Australia (RBA), not to forget the US consumer-centric data. For starters, the risk-positive headlines surrounding China occupy the driver’s seat to propel the risk-barometer AUD/USD prices. Important among them are the receding fears of the US-China jitters, following the China balloon shooting by the US, join the hopes of People’s Bank of China’s (PBOC) rate cuts and the restart of the China-based companies’ listing on the US exchanges to favor risk-on mood in the bloc. On the other hand, the pullback in yields could also be linked to the AUD/USD pair’s run-up, as the same weighs on the US Dollar. That said, yields rely on the market’s reassessment of the hawkish Fed talks as Chairman Jerome Powell hesitated in praising the jobs report but Fed Governor Christopher Waller, New York Federal Reserve President John Williams and Fed Governor Lisa Cook highlight inflation fear to suggest further rate increases from the US central bank. Furthermore, comments from the US diplomats such as Treasury Secretary Janet Yellen and President Joe Biden also amplified inflation concerns, as well as hopes of no recession in the US, which in turn suggests a safe side for the Fed to hike the benchmark rates. Read next: The GBP/USD Pair Climbed To Around 1.2100, The EUR/USD Pair Is Above 1.0700| FXMAG.COM Against this backdrop, US Dollar Index (DXY) traces softer Treasury bond yields to reverse the previous day’s recovery moves, down 0.22% intraday near 103.25 at the latest. That said, the US 10-year Treasury bond yields reversed from a one-month high to snap a three-day uptrend on Wednesday, pressured around 3.62% by the press time. Furthermore, the Asia-Pacific shares grind higher whereas the S&P 500 Futures ignore Wall Street’s losses to print mild gains by the press time. Looking ahead, the US Weekly Jobless Claims can entertain intraday traders while Friday’s RBA Monetary Policy Statement and China inflation data will be crucial for the AUD/USD pair traders to watch. That said, the RBA’s latest hawkish appearance and Beijing-linked optimism will be at test on Friday. Technical analysis AUD/USD run-up appears doubtful unless crossing the 21 and 10-DMA confluence near the 0.7000 psychological magnet.
South Korean Central Bank Left Its Policy Rate Unchanged

Analysis Of The Korean Won (KRW) By Economists At ING

TeleTrade Comments TeleTrade Comments 09.02.2023 09:27
The Korean Won has gained the most ground of all APAC currencies over the last three months. Economists at ING expect the USD/KRW pair to break below the 1200 level. KRW to strengthen despite chip slump “China’s reopening and a possible policy change by the BoJ could encourage further KRW appreciation.” “However, Korea’s chipmakers are experiencing slowing demand and there is a growing possibility that the current account balance may record a deficit during the first quarter of 2023.” “We expect the Bank of Korea to enter an easing cycle in the second half of the year, echoing our expectations for Federal Reserve rate cuts.” “We think the KRW will eventually break 1200 and touch 1180 later this year.”  
GBP/USD Trading Plan: Bulls Eyeing Further Growth, Resistance Level Holds Key, COT Report Signals Interest Rate Expectations

The NZD/USD Pair Is Supported By A Modest US Dollar Weakness

TeleTrade Comments TeleTrade Comments 09.02.2023 09:36
NZD/USD gains strong positive traction on Thursday and rallies to the top end of the weekly range. A positive risk tone undermines the safe-haven USD and seems to benefit the risk-sensitive Kiwi. The prospects for additional rate hikes by the Fed could limit the USD losses and cap the major. The NZD/USD pair attracts some meaningful buying on Thursday and extends its steady intraday ascent through the early European session. The pair is currently placed around the 0.6350 region, just a few pips below the weekly high touched on Tuesday and is supported by a modest US Dollar weakness. The uncertainty over the Fed's rate-hike path fails to assist the USD to build on its post-NFP rally to a one-month high, which, in turn, acts as a tailwind for the NZD/USD pair. Apart from this, a recovery in the global risk sentiment - as depicted by a generally positive tone around the US equity futures - weighs on the safe-haven buck and benefits the risk-sensitive Kiwi. The downside for the USD, however, seems limited amid diminishing odds for an imminent pause in the Fed's policy-tightening cycle. In fact, a slew of FOMC members echoed Fed Chair Jerome Powell's hawkish view on Tuesday that additional rate hikes were likely warranted to control inflation. This, in turn, might hold back bulls from placing aggressive bets around the NZD/USD pair. Read next: The GBP/USD Pair Climbed To Around 1.2100, The EUR/USD Pair Is Above 1.0700| FXMAG.COM Moreover, looming recession risks should keep a lid on any optimistic move in the markets, which should drive some haven flows towards the buck and contribute to capping the NZD/USD pair. Investors remain concerned about economic headwinds stemming from rising borrowing costs and the COVID-19 outbreak. This, along with fears about worsening US-China relations, could weigh on the sentiment. The aforementioned fundamental backdrop makes it prudent to wait for some follow-through buying before confirming that the NZD/USD pair's recent pullback from the highest level since June 2022 has run its course. Market participants now look forward to the US Weekly Initial Jobless Claims data, which, along with the broader risk sentiment, might provide some impetus to the major.
Sweden: How the Riksbank has made the krona’s path to recovery even narrower

Unusual Scale Of The Swedish Krona Weakness, Crude Oil Trades Higher

Saxo Bank Saxo Bank 09.02.2023 09:56
Summary:  Choppy markets yesterday as the US market erased the prior day’s sharp rally in the ongoing struggle between bulls and bears after the S&P 500 recently cleared important resistance but has stalled out. Treasury yields also dipped after a very strong US 10-year treasury auction as the US yield curve is near its most severe inversion for the cycle. Elsewhere, oil prices have jumped sharply off recent lows over the last three days. What is our trading focus? US equities (US500.I and USNAS100.I): tight trading range Yesterday’s trading session did not confirm the cyclical growth bets in equities with S&P 500 futures erasing the prior gains on Powell’s tight labour market comments and the need for higher policy rates. It feels like the market is transitioning into a tighter range before getting new information on which to decide whether to continue to uptrend or reverse lower. The signs are leaning towards a cyclical uptrend, but the signal-to-noise level remains low across many macro indicators. Yesterday’s open price in S&P 500 futures at 4,167 is the key level to watch on the upside. Chinese equities: Hang Seng (HIG3) and CSI300 (03188:xhkg) lacked of direction Hang Seng Index and CSI300 bounced over 1% after a week-long consolidation. Xiaomi (01810:xhkg), surging 9.5%, was the biggest winner within the Hang Seng Index. Lei Jun, Chairman and founder of the mobile phone and electronic device maker, announced on Twitter in the form of Q & A with a Chatbot that the company is launching its Xiaomi 13 Series mobile phone on 26 Feb. Mobile phone hardware suppliers Sunny Optical (02382:xhkg) and AAC (02018:xhkg) surged 5.3% and 4.1% respectively. The technology space outperformed overall, with the Hang Seng Tech Index climbing 2.5%. In A-shares, food and beverage, communication, defense, and internet-of-things stocks led the advance. FX: Aussie gains stall; sterling outperforms After a strong run higher post-RBA, AUDUSD turned lower yesterday after taking a stab at 0.7000, but was choppy overnight in the Asian session, perhaps buoyed into early European hours by a bounce in metals prices. The key levels for that pair to the downside are the recent 0.6856 low and the 200-day moving average another 50 pips lower currently. USDCAD also returned back above 1.3400 despite the surge in oil prices, with the line of resistance for that pair near 1.3475. Sterling bounced off 1.2000 support in GBPUSD and managed a poke through 1.2100 but has found resistance in that area. The 38.2% Fibo retracement at 1.2120. UK GDP for Q4 will be released tomorrow. The EURGBP rally, meanwhile, has partially deflated after the pair broke well above the key 0.8900 area, trading near 0.8875 this morning and threatening a full reversal if it closes much lower in coming sessions. Crude oil (CLH3 & LCOJ3) prices rise on demand outlook Crude oil trades higher for a fourth day as last week’s long-liquidation-driven sell-off continues to be reversed as the dollar softens and on renewed optimism about the demand outlook for oil, especially in China and other parts of the world that may narrowly avoid a recession. The EIA reported US crude stocks building 2.4mln bbls in the latest week, contrasting the private data that indicated a draw of a similar magnitude. On the demand side, TotalEnergies sees oil demand will rise to a record this year, in line with the IEA’s messaging. Brent is currently trading above its 21-day moving average, currently at $84.95 - in WTI at $78.25 - with a close above likely to provide additional positive momentum. Gold (XAUUSD) trades steady but risk of further weakness lingers Gold remains supported around the $1860 level but so far the failure to break decisively higher to challenge support-turned-resistance in the $1900 area is raising concerns that a correction floor has yet to be found. The yellow metal erased earlier gains on Wednesday after Fed members reaffirmed the view that interest rates will need to keep rising to contain inflation. Since hitting a $1861 low last Friday, gold has been trading within an 18-dollar rising channel, currently between $1870 and $1888, and a break to the downside carry the risk of an extension towards $1828, the 38.2% retracement of the run up from early November. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) pulled back on a strong 10-year auction The reaction in the Treasury market was muted to the chorus of hawkish comments calling for higher for longer from Fed’s Williams, Waller, Kashkari, and Cook.  The action came in after a strong 10-year auction which awarded the notes 3bps richer than the market level at the time of auction and a strong bid-to-offer-cover at 2.66 times, increasing from 2.53 times in the previous auction. Yields on the 10-year fell 6bps to finish Friday at 3.61%. What is going on? Credit Suisse sees weak 2023 on significant outflows The Swiss bank reports this morning Q4 net income loss of CHF 1.4bn vs est. loss of CHF 1.1bn, but even worse the bank is expecting a substantial loss before taxes in 2023, but also expect to bounce back to profitability in 2024. Outflows in Q4 totalled CHF 111bn but deposits looked positive in January according to Credit Suisse. Walt Disney announces job cuts and $5.5bn cost-cutting plan The Walt Disney Company reported quarterly earnings after hours yesterday, with profits of 99 cents per share well north of consensus estimates of 74 cents and revenue growing 7.8% y/y to $23.5bn, also above estimates. Disney+ streaming service subscribers fell 1% in the quarter, mostly due to their Indian streaming service loosing streaming rights to cricket games. CEO Bob Iger announced a $5.5bn cost saving plan that will include a $3bn reduction in movie-production budgets and the axing of 7,000 jobs. Shares were up over 5% in late trading last night, near $117.80 per share. Uber shares gained 5% yesterday after reporting earnings. The rise in Uber accelerated yesterday, posting a new 10-month high after Uber reporting stronger than expected quarterly results. Uber expects its first ever year of profits, including for its ride and Uber Eats businesses. Uber reported its highest ever number of trips for the quarter at more than 2 billion and nearly 1mn trips per hour. Meanwhile Uber is also receiving more advertising dollars, and on track to achieve its $1bn ad revenue in 2024. A fourth activist investor joins the move to shake up Salesforce Three activist investors, Elliott Investment Management, Starboard Value LP, and ValueAct Capital Partners, have already put pressure on Salesforce’s management to cut costs and improve profitability. Wall Street Journal writes that a new activist investor Third Point LLC has now also taken a stake in the software maker. This group of investors will put enormous pressure on the software maker to improve results over the coming year. UK House Prices continue to drop sharply, according to RICS Survey. The UK RICS Price Balance survey registered a new low for the cycle at –47%, suggesting that nearly 50% more of surveyed estate agents are seeing falling prices than rising prices, the lowest number since 2009, during the financial crisis. This was slightly worse than expected and a drop from –42%, although estate expectations are improving with only 20% believing in a worsening outlook for the next 12 months versus 42% a month ago. European gas settles at 17-month low on mild weather outlook. The Dutch TTF gas futures, Europe’s natural gas benchmark, settled at €53.69 on Wednesday, its lowest close since September 2021, and around 25 euros above the five-year average for this time of year. A cold spell across Europe this past week have had no major impact on prices with ample supplies to meet demand, and forecasters are now looking for milder than expected weather for the rest of the month than previously expected. EU gas in storage remains 69% full and we may enter the injection season in late March near 60% and unprecedented high level, even compared with the recession hit 2020 when the level was 54%. Fed speakers call for higher rates A slew of Fed speakers were on the wires yesterday. While a broad chorus on higher rates was maintained, much of which has been the Fed’s message throughout, markets perceived the messages as hawkish primarily as the January jobs report is still keeping investors concerned. Importantly, all the four speakers last night are voting this year. Christopher Waller said rates may have to stay higher for longer. John Williams called the December dot plot a good guide, adding that rates are "barely into restrictive" territory. He also hinted at a slightly higher terminal rate of 5.0-5.5%. Lisa Cook said "we are not done yet." Neel Kashkari expects the peak to rise above 5% this year as services side of the economy is still hot. Market pricing of the Fed path still pretty much unchanged, with terminal rate priced in at just over 5.1%.  Read next: The GBP/USD Pair Climbed To Around 1.2100, The EUR/USD Pair Is Above 1.0700| FXMAG.COM What are we watching next? Sweden’s Riksbank to hike today – watching guidance after krona’s woeful weakness. EURSEK recently touched its highest level since the global financial crisis back in 2009, a rather unusual scale of SEK weakness, given strong global risk sentiment and an improved outlook for Europe. The new Riksbank governor Erik Thedeen warned on the concerns that rate rises and high inflation (which hit over 12% YoY a the headline and 10.2% for core inflation in December) are risks for Sweden’s financial system, suggesting that the central bank may be reluctant to continue hiking much more beyond today’s 50 basis point rate rise, which would take the policy rate to 3.00%. With 10-year Swedish government bonds trading with a yield south of 2.00%, the Swedish yield curve is even more steeply inverted than Germany’s, suggesting strong concerns for economic growth. RBA inflation forecasts due tomorrow as Chinese students set to return to AU The AUDUSD has had a volatile week, sentiment was lifted a bit overnight in Australia as the iron ore (SCOA) and copper prices moved up over 1% each. China recently docked its first Australian coal import shipment in two years. In what can only prove a boost to the Australian economy, almost 50,000 Chinese students are expected to arrive in Australia this month- ahead of the start of semester. This is due to Beijing’s government ruling that degrees earned online will no longer be recognized. Tomorrow, the RBA will issue its quarterly economic forecasts and policy outlook in Australia on Friday. Earnings to watch Today’s US earnings focus is PepsiCo and PayPal with analysts expecting PepsiCo to report revenue growth of 7% y/y and EPS of $1.64 up 7% y/y as the beverage and snacks business is resilient during inflation. PayPal earnings will an interesting to watch as Adyen in Europe yesterday spooked markets with a significant decline in the EBITDA margin on more hiring and investments in infrastructure. Analysts expect PayPal to report revenue growth of 7% y/y and EPS of $1.20 up 41% y/y. Thursday: KBC Group, Brookfield, Thomson Reuters, L’Oreal, Vinci, Credit Agricole, Siemens, Toyota Motor, NTT, Honda Motor, AstraZeneca, Unilever, British American Tobacco, ArcelorMittal, DNB Bank, Volvo Car, Zurich Insurance Group, Credit Suisse, AbbVie, PepsiCo, Philip Morris, PayPal, Cloudflare Friday: Enbridge, Constellation Software Economic calendar highlights for today (times GMT) 0830 – Sweden Riksbank Policy Rate 0945 – Bank of England Governor Andrew Bailey to testify 1330 – US Weekly Initial Jobless Claims 1400 – Poland National Bank Governor Glapinski press conference 1530 – US Weekly Natural Gas Storage Change 1900 – Mexico Rate Announcement 0030 – Australia RBA Monetary Policy Statement 0130 – China Jan. CPI/PPI   Source: Financial Markets Today: Quick Take – February 9, 2023 | Saxo Group (home.saxo)
Riksbank hikes by 50bp amid concerns about weak krona

Riksbank hikes by 50bp amid concerns about weak krona

ING Economics ING Economics 09.02.2023 10:53
Policymakers are trying to stem currency weakness but a housing market correction and weaker economic activity suggest there are limits to the number of future rate hikes. The positive reaction by the krona is encouraging, but it will now be up to data to support a further SEK recovery. Short-term turmoil is still a possibility Source: Shutterstock   Sweden’s Riksbank has hiked its policy rate by another 50 basis points, and has made it abundantly clear that it’s worried about the ongoing weakness in the krona. Yet the reality is the Riksbank will need to tread more carefully on rate hikes from now on. That’s clear from its new interest rate projection which points to another 25bp hike in April, and implies there’s a chance it could do the same in July, but that this is likely to be it. The impact of past policy tightening is becoming increasingly evident, in particular in the housing market. Prices are down 15%, and we know Sweden has a comparatively high proportion of households that have a mortgage, and on top of that, the majority are on variable rates. Growth is suffering too, and we’re likely to see a wider impact of the housing problems in consumption and construction as the year goes on. Sweden is likely to be an economic underperformer within Europe. For now, policymakers have half an eye on wage negotiations, which are likely to settle on a higher settlement than in the past. And the near-term policy outlook undoubtedly hinges on the krona, as well as what the European Central Bank decides to do beyond its March meeting. For now, we’re pencilling in one final 25bp hike in March, but wouldn’t totally rule out another over the summer. Read next: Disney Plans To Cut Costs And Jobs, Google Is Now Rolling Out AI Chatbot| FXMAG.COM Riksbank interest rate projections over time Source: Riksbank SEK reaction is encouraging We argued in recent commentaries how a hawkish hike was a necessary step by the Riksbank to help restore confidence in SEK-denominated assets and halt the slump in the krona. The initial market reaction seems to be rewarding today’s rate decision, as EUR/SEK dropped nearly 1% to the 11.25 mark. If those levels hold, we’d be looking at a 40+ big-figure cushion to those March 2009 record highs, which would probably mark a fully-fledged currency crisis in Sweden. Now, the data needs to play its part. We have reasons to believe inflation will start easing in the coming months, although the outcome of wage negotiations could see the jobs market working against a deflationary path. This, and the soft patch of growth data, argues against a straight-line recovery in SEK and short-term turmoil for the krona is still a possibility. We think the Riksbank can be satisfied with EUR/SEK staying around 11.20-11.40 for now.   A sustainable reappreciation of SEK beyond the 11.00 mark against the euro remains the base case for this year, although the path for the Riksbank to fight inflation without triggering an uncontrolled property and economic slump has got narrower, and downside risks remain meaningful. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

Equities Fall On Hawkish Fed Comments, Uber, Disney Jump

Swissquote Bank Swissquote Bank 09.02.2023 12:58
US equities fell yesterday on the back of two important factors: hawkish comments from the Federal Reserve (Fed) members, and the unexpected surge in the American used car prices. Stocks market The S&P500 fell more than 1%, while Nasdaq slid around 1.80%. Inside Nasdaq, Google had a particularly rough day, to say the least. The company posted a Tweet showing Bard in action, and the tweet went wrong, as Bard gave the wrong answer! The stock price slumped by more than 9% at some point. Microsoft Microsoft on the other hand was upbeat on the news, and its valuation shortly surpassed the $2 trillion mark. Uber, Disney Elsewhere, Uber jumped more than 5.5% on stronger than expected results. Disney also jumped by more than 5% in the afterhours, after reporting better than expected results, and the promise to slash $5.5 billion in costs, along with 7000 jobs. The US futures are in the positive at the time I am talking here, but the bears are not far away. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM Forex In the FX, the US dollar remains upbeat, but the 50-DMA offers remain a solid resistance to a bullish breakout. Likewise, the EURUSD remains bid at around the 50-DMA, and the dollar-yen remains offered into the 50-DMA. So that 50-DMA mark is the key resistance that must be cleared to set the dollar bulls free for further appreciation, and de-block the situation in the FX space. Energy In energy, US crude extended gains above its own 50-DMA yesterday. Could it extend gains higher, and by how much? Watch the full episode to find out more! 0:00 Intro 0:50 Equities fall on hawkish Fed comments… 3:45 … and sudden jump in used-car prices 5:54 Bard’s gaffe costs Google more than $100bn in market cap 7:22 Uber, Disney jump after earnings 8:29 USD must clear 50-dma for further appreciation 9:00 Crude’s next challenge Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Google #Bard #AI #gaffe #Microsoft #ChatGPT #Fed #hawkish #comments #inflation #jobs #USD #EUR #JPY #XAU #crude #oil #earnings #Uber #Disney #layoffs #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      
Long-Term Yields Soar Amidst Hawkish Fed: Will They Reach 5%?

Weak Data From The German Economy Will Make It Difficult For The ECB To Make Excessive Interest Rate Hikes

Kenny Fisher Kenny Fisher 09.02.2023 13:11
The euro has posted strong gains on Thursday. EUR/USD is trading at 1.0749, up 0.57%. German CPI ticks higher German inflation came in at 8.7% y/y in January, up from 8.6% in December. On a monthly basis, CPI rose 1.0%, following a -0.8% reading in December. The report shows that German inflation remains high and it’s still too early to talk of a peak. The good news is that nasty double-digit inflation seems behind us, thanks in large part to lower energy prices due to a warm winter in Europe. The ECB raised rates by 50 basis points last week, bringing the cash rate to 3.0%. The cash rate remains well below that of all other major central banks – the Fed’s rate, for example, is at 4.75%. ECB policy makers have noted that core inflation, which is a more reliable gauge than headline inflation, remains stickier than expected. The central bank meets next on Mar. 16 and the markets have priced in a 50-bp hike. What happens after March is uncertain. The ECB could take a pause in order to assess the impact of its tightening cycle or it could continue hiking, perhaps in modest increments of 25 bp, until there is a clear indication that core inflation is coming down. ECB rate policy is primarily focused on taming inflation, but it must also keep an eye on the strength of the German economy, the largest in the eurozone. Recent data has been weak, which will make it harder for the ECB to deliver oversize rate hikes. German Industrial Production came in at -3.2% in December, GDP in Q4 contracted by 0.2%, retail sales for December slumped by 5.3% and Manufacturing PMI remains mired in contraction territory. The Fed paraded four policy makers on Wednesday, each of whom drummed the message that the fall in inflation was welcome but the fight was not yet over. Fed member Williams said that a restrictive policy stance could last for a few years until inflation dropped to the target of 2%. The markets may be listening more closely to the Fed since the blowout employment report on Friday, but continue to underestimate the Fed’s end game. The markets have priced in a terminal rate of 4.6%, while the Fed has projected a terminal rate of 5.1%. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM EUR/USD Technical EUR/USD is testing resistance at 1.0758. Above, there is resistance at 1.0873 1.0714 and 1.0633 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
InstaForex's Ralph Shedler talks Euro against Japanese yen

USD/JPY Is Below 131.00 Again, The Aussie Is Close To 0.70$

Kamila Szypuła Kamila Szypuła 09.02.2023 13:55
The US dollar hovered near the middle of recent ranges compared to majors on Thursday as investors scrutinized comments from many Federal Reserve officials. Overnight, four Fed speakers continue to send their hawkish message to the market. The consistent message is that further interest rate hikes are announced and that the interest rate will have to stay high for a long time. The employment data initially raised expectations that the Fed might return to aggressive monetary policy, but Powell did not lean in that direction in his speech. Investors will be keeping a close eye on the consumer price inflation data that comes out on Tuesday for additional guidance on the policy outlook. USD/JPY During the morning trading hours, USD/JPY held above 131.40 but failed to sustain momentum. USD/JPY has returned to levels below 131.00. EUR/USD EUR/USD maintained its upward momentum and extended its daily gain towards 1.0800 on Thursday. Earlier in the day, data from Germany revealed that the Harmonized Index of Consumer Prices (HICP) fell to 9.2% on an annualized basis in January from 9.6% in December. This reading was much lower than market expectations of 10%, but the negative impact of these data on the euro remained short-lived. With the major European stock indices opening much higher on Thursday, the EUR/USD rate began to rise. At the time of publication, the German DAX 30 and Euro Stoxx 50 indices were up over 1% during the day. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM GBP/USD The Bank of England is concerned that UK inflation will remain stubbornly high. This suggests that the BoE has growing uncertainty about whether further policy tightening is warranted and that the current cycle of rate hikes may be coming to an end. The BoE has hiked interest rates 10 times since December 2021, the last being a week ago, as it battles to bring down sky-high inflation without causing a deep recession. Bank of England Governor Andrew Bailey is joined today by MPC members Huw Pill, Professor Silvana Tenreyro and Professor Jonathan Haskel in the Treasury Committee (TSC). So far, they have been asked whether the central bank is lagging behind in the fight against inflation. So far, the statements of BoE representatives suggest that the MPC is still worried about persistently high inflation and that the British economy may face a prolonged period of weakness. GBP/USD continued to move higher and hit a new six-day high above 1.2150 on Thursday. Cautious comments from BOE policymakers on the outlook for inflation and a risk-prone market environment help the pair keep their balance. On Friday, the UK's Office for National Statistics will publish estimate GDP figures for December 2022. AUD/USD The risk-sensitive Australian dollar gained against gains from US equity futures and the more hawkish Reserve Bank. AUD/USD rebounded strongly from 0.6920 in the Asian session. The New Zealand dollar also appreciated. Australians were rather dissatisfied after the last RBA meeting, which may point to further rate hikes in the future due to inflationary pressure. A slightly weaker dollar this morning is supporting the Australian bulls, including the rise of some key Australian commodities. The Australian pair is currently trading close to the $0.7000 level. Source: finance.yahoo.com, investing.com
Analysis Of The AUD/USD Pair By Markets Strategist Quek Ser Leang And Senior FX Strategist Peter Chia

The AUD/USD Price Can Hit The Next Target Level

InstaForex Analysis InstaForex Analysis 10.02.2023 08:00
On Thursday, the Australian dollar quickly rose by 80 points and just as quickly returned to the opening level of the day. The price is experiencing significant pressure and the bulls will probably give in to this pressure. After reaching the support at 0.6873, the price can hit the next target at 0.6730. On the four-hour chart, the price turned from the MACD line and settled under the balance line; there was a false breakout above the balance line, which considerably raises the probability of building a downtrend. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM The Marlin oscillator is in the positive area. Once the price overcomes yesterday's low (0.6922), it will move into the negative area and will move in the same direction as the price. I expect the price to reach the target level of 0.6730. This basic scenario will be canceled once the price climbs above the MACD line, above 0.7004.   Relevance up to 03:00 2023-02-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334714
The GBP/USD Pair Is Expected The Consolidation To Continue

The GBP/USD Pair Is Waiting For UK GDP Report

InstaForex Analysis InstaForex Analysis 10.02.2023 08:01
My expectation that the British pound would reverse on Thursday did not materialize. On the contrary, the pound is up 50 pips. But the upper shadow is higher by 75 pips, which is a good sign of the reversal. The Fibonacci time zone tool had to be abandoned. Ideally, nothing has changed. I expect the pound to weaken along with other currencies because of the global strengthening of the dollar. The pound may even go ahead of the market today, as weaker economic data is expected for the UK. Q4 GDP is forecast to show zero growth, December GDP may show a decline of 0.3%, annual GDP is expected to decline to 0.4% from the previous 1.9%, December industrial production may show a decline of 0.2%, trade balance is expected to deteriorate to -16.4 billion from the previous -15.6 billion. On the daily chart, the upper shadow pierced the resistance of 1.2155, the Marlin oscillator turned down in the downtrend zone. The nearest bearish target is 1.1933. On the four-hour chart, the growth was stopped by the MACD indicator line. Now the price has settled below 1.2155 and under the red balance line. Marlin turned down. So, we are waiting for today's UK reports and the pound to fall. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM Relevance up to 03:00 2023-02-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334716
FX Daily: Euro’s attractiveness on the rise

The Euro Can Consolidate Under The Specified Target Range

InstaForex Analysis InstaForex Analysis 10.02.2023 08:03
Yesterday, the euro tried to rally but failed, even though the turning point of the rally was above the shadows of the last two days. This time the rally stopped when the price would cross the 1.0787 level (more precisely, the upper limit of the target range at 1.0758/87) and the MACD indicator line on the daily chart. The Marlin oscillator is moving sideways. In general, the euro can consolidate under the specified target range. According to the main scenario, I expect EUR to fall to 1.0595. Staying below the level opens the next target at 1.0470. On the four-hour chart, the consolidation from the last three days looks like a correction from the decline since February 2. Read next: USD/JPY Is Below 131.00 Again, The Aussie Is Close To 0.70$| FXMAG.COM Yesterday the price approached the balance indicator line and turned around, which might signal the end of the correction. The price has settled under 1.0758. The Marlin oscillator is on the limit of the downtrend area, waiting for another signal to move into the lower area. In all likelihood, such a signal will come after the price overcomes yesterday's low of 1.0710.     Relevance up to 03:00 2023-02-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334718
USD/CAD - Canadian economy added 41,400 jobs beating expectations

Weak Canadian Labor Market Data May Reinforce The Market's Dovish Expectations Regarding The Bank Of Canada's Future Actions

InstaForex Analysis InstaForex Analysis 10.02.2023 08:11
The Canadian dollar trades in a wide price range, which limits are marked with the levels of 1.3360-1.3460 (marks correspond to the lines Tenkan-sen and Kijun-sen on the D1 chart). During the entire week ,the pair alternately pushes back against the limits of this 100-point price range, and by and large, it makes no headway. If we look at the pair's weekly chart, we will see that the pair is within the framework of the upward pullback. Last week, the bears made a new near 3-months low (1.3261), but failed to consolidate within the range of the 32nd figure, amid strong US Nonfarm and increasing hawkish expectations of the Federal Reserve's next actions. However, the price growth stalled: traders are waiting for the "Canadian Nonfarm" to be released at the start of the U.S. trading session on Friday. An important report for the Canadian currency Typically, key U.S. and Canadian labor market data is released on the same day and even at the same time. The U.S. Nonfarm set the tone for all of the U.S. dollar pairs, while the Canadian figures are in the shadow: for obvious reasons, few traders are interested in them. In the context of the pair, the loonie follows the greenback, so the Canadian Nonfarm remains in the background compared to the more weighty U.S. report. But this month there was, so to speak, a "de-synchronization" with an interval of a week: the main labor market report in the US was released last Friday, while in Canada it will be released today, February 10. The U.S. report provided support for the bulls, while the Canadian figures could either strengthen the bullish sentiment or trigger a downward momentum. Either way, the loonie will only react to "its" numbers today, as the market has already effectively played back the US report. Take note that preliminary forecasts do not promise a "bright future" for the Canadian dollar. Most likely, the report will be quite weak and that will put more pressure on the loonie, allowing the bulls to overcome the resistance level of 1.3520 (the middle line of the Bollinger Bands indicator on the weekly chart) and stay within the 35th figure. Thus, the Canadian employment report is expected to rise by only 15,000 in January after a strong jump of 104,000 in December. That said, January's 15,000 gain will come mostly from an increase in part-time employment (+10,000), while the full-time component will show a more modest result (+5,000). The "headline" indicator of the report is also unlikely to impress traders: the unemployment rate should rise to 5.1%. In this case the growth is minimal, but a consistent downtrend was recorded during the last two months. The labor force participation rate is likely to fall in January, from 65.0% in December to 64.7%. Possible effects of a weak report At the end of the Bank of Canada's January meeting, the central bank increased the rate by 25 basis points, but actually announced a pause. Bank of Canada Governor Tiff Macklem said that further interest rate increase may not be necessary, because, according to the central bank's forecasts, "economic growth will slow down with a simultaneous decline in inflation". A little later, the governor outlined the central bank's decision in more straightforward terms, saying it was now time to pause to assess whether monetary policy was sufficiently restrictive. In other words, Macklem confirmed rumors following its January meeting that the central bank intends to maintain a wait-and-see approach. Therefore, a weak labor market report will not play a decisive role in this matter (this issue has already been resolved). Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM   However, now there are talks on a different plan - that the Bank of Canada may cut the rate in the second half of this year. The poll of market participants for 4 quarter published by the Canadian central bank on Monday showed that the median forecasts for the rate by the end of 2023 was 4%, i.e. rate reduction by 50 basis points is supposed. And while at the final press conference in January, Macklem said that "it is too early to talk about interest rate cuts," he did not actually rule out such a scenario (as, for example, the U.S. Federal Reserve did, de facto ruling out a rate cut in 2023). Therefore, weak Canadian labor market data may reinforce the market's dovish expectations regarding the Bank of Canada's future actions. Conclusions If the Canadian Nonfarm is in the red zone, bulls may attempt an upward breakout, overcoming the upper limit of the 1.3360-1.3460 range. The closest target will be 1.3520, which is the middle line of the Bollinger Bands on the weekly chart. In case Friday's report turns out to be in the green zone, then most likely, the pair will continue to trade within the aforementioned price range.   Relevance up to 18:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334712
Rates Spark: Nothing new on the dovish front

The Outlook Of The EUR/USD Pair Movement

Torben Melsted Torben Melsted 10.02.2023 08:16
EUR/USD tried to break above minor resistance at 1.0767 but failed. It means a final dip towards the ideal corrective target at 1.0650 to complete wave C of 4 and set the stage for wave 5 higher to 1.1391. In the short term, only a direct break above yesterday's high at 1.0791 will confirm that wave C of 4 already has been completed and wave 5 is in motion. Read next: USD/JPY Is Below 131.00 Again, The Aussie Is Close To 0.70$| FXMAG.COM Relevance up to 06:00 2023-02-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/312175
Technical Outlook Of The EUR/JPY Pair Movement In Short Term

The EUR/JPY Pair Remains Locked Inside The Triangle

Torben Melsted Torben Melsted 10.02.2023 08:20
It has been a while since we have looked at EUR/JPY and for a good reason. EUR/JPY remains locked inside the triangle, that has dominated the picture since mid-December 2022. However, we are in the final stages of this triangle. EUR/JPY is likely to move lower towards 137.55 and the target area between 134.55 - 135.00 to complete the ongoing correction and set the stage for a new impulsive rally towards 170 as the next major target. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM Relevance up to 06:00 2023-02-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/312177
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

Analysis Of The EUR/USD Pair In Long And Short Positions

Jakub Novak Jakub Novak 10.02.2023 08:24
Analysis of transactions and tips for trading EUR/USD The first test of 1.0759 occurred when the MACD line was already far from zero, so the upside potential was limited. But sometime later, there was another test, where the MACD line was in the overbought area and was gradually descending from there. This was a good entry point to sell, but it did not result in a large downward move. A third test in the afternoon showed that buying at 1.0759 only leads to losses as it was wrong to count on the fall of euro in the current conditions. No other signals appeared for the rest of the day. Euro rose on Thursday due to the statements of ECB board member Joachim Nagel and a surprising jump in inflation in Germany. However, today there is nothing that could repeat or continue the momentum as Italy's industrial production report is of little interest to the market. There might be some reaction to the European Commission's economic outlook, but it is unlikely. In the afternoon, the US will release its data on consumer sentiment and inflation expectations, in which a rise in the figures will lead to the further strengthening of dollar. The speech of FOMC member Christopher Waller will also be in favor of the currency. For long positions: Buy euro when the quote reaches 1.0747 (green line on the chart) and take profit at the price of 1.0784. Growth could occur, but it is unlikely that the pair will go beyond the weekly high. Nevertheless, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0717, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0747 and 1.0784. Read next: USD/JPY Is Below 131.00 Again, The Aussie Is Close To 0.70$| FXMAG.COM For short positions: Sell euro when the quote reaches 1.0717 (red line on the chart) and take profit at the price of 1.0685. Pressure may return if statistics from the Euro area come out worse than forecasts. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0747, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0717 and 1.0685. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2023-02-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334736
Uncertain Waters: Saudi's Oil Production Commitment and Global Economic Jitters

Adidas Released A Shockingly Bad Outlook, The US Dollar Traded Weaker

Saxo Bank Saxo Bank 10.02.2023 08:51
Summary:  A downbeat session in the US yesterday took the S&P 500 Index back below the pivotal levels that provided resistance on the way up recently. Long US treasury yields rose again on one of the weakest a weak 30-year T-bond auctions in a year. This helped boost the US dollar again and take gold prices to nearly 1,850 overnight, representing a more than 100-dollar consolidation of the rally since last November. What is our trading focus? US equities (US500.I and USNAS100.I): Failing to hold the line  S&P 500 futures failed yesterday to push higher above that important 4,200 level and lost instead altitude closing below the 4,100 level erasing the gains for February. The US 10-year yield also bounced but the moves are not dramatic, and it feels like the market is waiting for the bond market to make up its mind about long-term yields and inflation. Earnings after the close from PayPal and Lyft that both disappointed also helped lower risk sentiment in US equity futures overnight. FX: USD rolls back higher on weak sentiment. Historic day for SEK The US dollar traded weaker yesterday before firming late in the session as US equities rolled over and posted a weak session, with EURUSD never making a serious challenge of 1.0800  and trading below 1.0725 this morning, while a USDJPY sell-off yesterday quickly aborted on a weak US T-bond auction that sparked a rise in long US yields. This will have USD traders on watch for a follow through higher, which could suggest a proper trending move rathre than a mere consolidation of prior weakness. Elsewhere, an historic day for the Swedish krona yesterday on a powerful broadside to SEK speculators in yesterday’s guidance, but also technical moves to increase liquidity in Sweden’s banking system as noted below. Crude oil (CLH3 & LCOJ3) slides again on US growth concerns Crude oil trades lower for a second day after sentiment across markets received a fresh set back on worries about the US economy's ability to withstand additional Fed rate hikes. Overall, it highlights a market that remains rangebound (since November) with current soft fundamentals likely to remain until the second quarter when, despite concerns about further US rate hikes, improved activity in China should brighten the macro-outlook. Brent trades back below its 21-day moving average, currently at $84.90 - in WTI at $78.40 - with a close above needed to attract fresh buying momentum. Next week, apart from US CPI on Tuesday, the market will look out for monthly oil market reports from OPEC and the IEA. Gold (XAUUSD) weakness resumes with focus on US rates and next week’s CPI print Gold’s attempt this past week to recover from last Friday’s sell-off below support-turned-resistance in the $1900 area received a setback on Thursday when weakness resumed, driving the price down to a $1853 during the Asian trading session. The market had been left vulnerable to further weakness after only managing a small bounce earlier in the week, and with the attention now fully on the prospect for even higher Fed rates to tame inflation, the dollar and Treasury yields have risen to provide some formidable headwind. Furthe weakness carry the risk of an extension towards $1828, the 38.2% retracement of the run up from early November. The main event next week being the US January CPI report on Tuesday. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) back higher on weak 30-year T-bond auction It has been a confusing week for treasury traders this week, as we saw a very weak 3-year auction on Tuesday followed by a robust 10-year auction Wednesday, only to see one of the weakest 30-year T-bond auctions over the last 12 months yesterday, which saw 30-year benchmark yields reversing back higher and posting a new local high close just shy of 3.75%. The 2-10 portion of the yield curve remains near the extreme of its inversion for the cycle, just below –80 basis points, and near the highest since the early 1980s. What is going on? SEK blasts higher on watershed Riksbank meeting The Riksbank met yesterday and impressed the market with its guidance on further rate hikes and additional plans to accelerate the pace of quantitative tightening from April onwards, with additional offerings of “Riksbank certificates” to encourage a rise in rates and foreign investment in Swedish paper. Two-year Swedish rates jumped 10 basis points on the news, and the QT The new Riksbank Governor, Erik Thedeen, also took aim at currency speculators in the press conference yesterday. Ahead of the meeting, EURSEK had risen above 11.40 at one point, its highest level since 2009, in part on concerns that the Riksbank feared the impact of higher rates on Sweden’s housing market, the bottom dropped out yesterday on the Riksbank developments, taking EURSEK all the way back down to range support near 11.10, one of the most powerful strengthening moves in the krona’s history. This was a watershed moment and likely puts a floor under the krona for now. Natural gas lower despite larger-than-expected US draw US natural gas futures (NGH3) only managed a temporary rise on Thursday after the EIA said inventories had declined by 217 billion cubic feet (bcf) last week. This the first above average weekly storage draw this year left total stocks some 5.2% above the long-term average, and despite trading near a two-year low the upside potential remains limited amid robust production, up 6% y/y, and gas demand down y/y by the same percentage. In addition, forecasts are now pointing to much warmer-than-normal weather through February 18 across Central and Eastern states. Adidas reports a disastrous 2023 outlook The German sports clothing maker released yesterday after the market close a shockingly bad outlook. The decision to not sell Yeezy inventory will have an adverse impact on the underlying operating profit which could hit €700mn loss in 2023 with €500mn impact coming from Yeezy items. Adidas also sees €200mn in one-off costs in 2023. Revenue in constant currency terms is expected to decline up to high-single-digit. The shocking revelation is that the majority of Adidas operating profit came from one partnership and design series. PayPal misses Q4 volume estimates but steady Q1 expected The US-based payment company missed on volume in Q4 against estimates but delivered EPS $1.24 vs est. $1.20 in addition to announcing that the CEO Dan Schulman is stepping down by year-end. The Q1 outlook on EPS was $1.08-1.10 vs est. $1.06 and Q1 revenue growth of 7.5% y/y at current spot rates in the currencies. The RBA raised its underlying inflationary forecasts In the RBA’s quarterly economic forecasts and policy outlook (known as the Statement of Monetary Policy) released today in Australia, the Bank increased its “trimmed mean” CPI forecast from 3.8% to 4.3%. The increase was largely driven by sticky consumer durable goods inflation and services inflation. The RBA also upgraded labour costs projections, forecasting wages to rise 4.25% this year versus 3.9% previously. RBA continues to forecast that longer term inflation will ease to within the Bank’s target. Market pricing now suggests the RBA will hike another 75 basis points through the July meeting before a likely pause. US jobless claims rose but still sub-200k Initial jobless claims rose to 196k from 183k, and above the expected 190k. Continued claims also surpassed expectations and printed 1.688mln (exp. 1.68mln), above the prior 1.650mln. While there is a pick-up in claims, it must be noted that it comes from a low level and continues to signal a tight labour market. Hawkish 50 bp hike from Mexico’s central bank Banxico surprised markets with a 50-bp rate hike once again, taking the policy rate to 11.00% and signalled another, smaller hike at the next meeting. Expectations were for a smaller 25-bp hike, followed by a pause. This appears to be in line with what we have seen from RBA and Reserve Bank of India this month, suggesting broad inflation pressures continue to challenge central banks that were hoping to signal a pause.  Read next: USD/JPY Is Below 131.00 Again, The Aussie Is Close To 0.70$| FXMAG.COM What are we watching next? “New” USD CPI next Tuesday as risk sentiment on watch with the break of US S&P 500 Index support. As noted above, the S&P 500 Index broke below the pivotal 4,100 area that was an important resistance line on the way up, suggesting the risk of further consolidation lower from a technical perspective. A more significant level to the downside could be the 200-day moving average coming in near 3,945 on the cash Index, considerably lower, while the Nasdaq 100 Index eyes the important 12,300-12,100 area. What could turn sentiment lower? The most likely source of immediate concern would be any further rise in Treasury yields, but an interesting test awaits the market with next Tuesday’s CPI release, which will be the first release after an overhaul of the calculation methodology, which some argue could engineer a sharper than expected drop. Breaking: Government nominates Kazuo Ueda as new Bank of Japan Governor The name of Kazuo Ueda, an economist and former member of the Bank of Japan’s deliberation committee, was not among the names considered most likely to replace current governor Kuroda on his exit in early April. The first move in the JPY was higher on the announcement. Earnings to watch The earnings calendar is light today with Enbridge, Canada-based energy distributor, being the most interesting to watch. Analysts expect Enbridge to report revenue growth of 3% y/y and EPS of $0.73 down 5% y/y. Next week, the earnings calendar will provide plenty of interesting releases with the three most important releases being Deere, Schneider Electric, and Airbnb. Friday: Enbridge, Constellation Software Next week’s earnings: Monday: Recruit Holdings, DBS Group, Cadence Design Systems, SolarEdge, Palantir Tuesday: CSL, TC Energy, First Quantum Minerals, Toshiba, Norsk Hydro, Boliden, Coca-Cola, Zoetis, Airbnb, Marriott International, Globalfoundries, NU Holdings, Akamai Technologies Wednesday: Commonwealth Bank of Australia, Fortesque Metals Group, Wesfarmers, Shopify, Suncor Energy, Nutrien, Barrick Gold, Kering, EDF, Tenaris, Glencore, Barclays, Heineken, Nibe Industrier, Cisco Systems, Kraft Heinz, AIG, Biogen, Trade Desk Thursday: Newcrest Mining, South 32, Airbus, Schneider Electric, Air Liquide, Pernod Ricard, Bridgestone, Standard Chartered, Repsol, Nestle, Applied Materials, Datadog, DoorDash Friday: Hermes International, Safran, Allianz, Mercedes-Benz, Uniper, Sika, Deere Economic calendar highlights for today (times GMT) 1300 – Poland National Bank releases meeting minutes 1330 – Canada Jan. Net Change in Employment / Unemployment Rate 1400 – UK Bank of England Chief Economist Huw Pill to speak 1400 – ECB’s Schabel in live Q&A on Twitter 1500 – US Feb. Preliminary University of Michigan Sentiment 1730 – US Fed’s Waller (Voter) to speak at Crypto conference 2100 – US Fed’s Harker (Voter 2023) to speak   Source: Financial Markets Today: Quick Take – February 10, 2023 | Saxo Group (home.saxo)
Mexico’s Central Bank Surprised Markets With A 50bps Rate Hike Once Again

Mexico’s Central Bank Surprised Markets With A 50bps Rate Hike Once Again

Saxo Bank Saxo Bank 10.02.2023 08:43
Summary:  Equities erased early gains with S&P500 falling below 4100 as short-end Treasury yields jumped higher and yield curve inversion deepened to a fresh record. Riksbank’s hawkish surprise, along with Banxico’s, is raising concerns that central banks will have to continue to hike rates. Dollar was off its lows, and Gold pulled back to test the $1860 support again. Crude oil prices slid despite risks of lingering supply disruptions, as demand concerns weighed. China’s inflation data due today ahead of more Fed speakers and University of Michigan survey.   What’s happening in markets? US equities (US500.I and USNAS100.I) slide lower on Thursday; Tesla hits a new cycle high The S&P 500 wiped an earlier 1% jump, ending 0.9% lower on Thursday and 1.3% down on the week. It’s the first time in three weeks the benchmark index is in negative territory. That said, the S&P500 hold a gain of about 16% from its October low. On Thursday, options traders piled into bets the Federal Reserve is targeting a peak rate of 6%, nearly a whole percentage point above consensus. The two-year yield traded near 4.5%, and earlier pushed above the 10-year yield rate, by the widest margin since the early 1980s — This is a sign of fading confidence in the US economy’s ability to withstand additional tightening, and weighed on bank stocks. Alphabet (GOOGL) was also a key laggard as the underwhelming chatbot event continued to drag. Walt Disney (DIS) also reversed its gains after reporting earnings and announcing layoffs. Tesla (TSLA) shares were a top performer rising 3% on Thursday, taking its rally to 100% from its January low, bolstered by signs that demand for its EVs are rebounding - particularly with China out of lockdown. Still, Tesla share are down 50% from their record high. The technical indicators on the weekly and monthly charts look interesting – suggesting buying could potentially pick up over the longer term, as reflected in the MACD and RSI.  Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) jump higher The 2-year note Treasury yield rose 6bps to top 4.5% for the first time since November 30th, which means the bond market is beginning to take the Fed more seriously again. The surprise hawkish announcement from Riksbank likely added to concerns that central banks will continue to hike rates. The 10-year yield was up 5bps taking the Treasury yield curve inversion to 86bps, the widest since the 1980s. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) gained as optimism returned Hang Seng Index rallied 1.6% and CSI300 bounced over 1.3% after a week-long consolidation. Xiaomi (01810:xhkg), surging 8.5%, was the biggest winner within the Hang Seng Index. Lei Jun, Chairman and founder of the mobile phone and electronic device maker, announced on Twitter in the form of Q&A with a Chatbot that the company is launching its Xiaomi 13 Series mobile phone on 26 Feb. Alibaba (09988:xhkg) climbed 4% following its announcement of a plan to develop a ChatGPT-like chatbot. The hype on AI-generated content and chatbot spilled over to chip makers with Hua Hong (01347:xhkg) and SMIC (00981:xhkg) each rising over 3%. Mobile phone hardware suppliers Sunny Optical (02382:xhkg) and AAC (02018:xhkg) surged 5.7% and 5.9% respectively. The technology space outperformed overall, with the Hang Seng Tech Index climbing 3.2%. Macao casino operators advanced with MGM, surging 9.2% and other operators gaining 3% to 5%. In A-shares, semiconductors, food and beverage, communication, defense, and internet-of-things stocks led the advance. Northbound flows registered a net buying of over RMB 12 billon. Australian equites (ASXSP200.I) likely to end the week lower, with rate sensitive stocks down the most, while banks and insurers lift ahead of RBA saying more hikes ahead The Energy sector is up the most this week, followed by Materials – with activity in China picking up after Luna New Year holidays. The best ASX200 returns this week so far are from Gold mining giant, Newcrest, up 11%, followed by insurance group Medibank up 5%, while regional bank Suncorp is up 4%. On the downside, Block, also known as Square (SQ, SQ2) fell over 9% this week, after rising for the last 6 weeks. ASX tech logistics giant WiseTech (WTC) fell about 10% so far this week, knock it off its record all time high and ending its four-week strong rally with the logistics industry improving. WiseTech has contracts with global logistics giants including UPS, DHL etc.  FX: SEK outperforms on hawkish Riksbank; JPY awaits new governor The big drag on the USD came from the outperformance of the Swedish krona after Riksbank surprised hawkish (read below). However, the dollar bounced back as Treasury yields picked up in wake of a dismal 30yr auction. Even as EURSEK plunged below 11.20, EURUSD rushed back above 1.0750 and came in close sight of 1.0800, although reversing most of these gains in the wake of dollar strength subsequently. GBPUSD also pushed higher to test the 50DMA at 1.2187 but reversed towards 1.21 later. USDJPY finding it difficult to go below 130 with PM Kishida saying he doesn’t want to surprise the markets with his Governor choice, which is shifting the consensus towards safer bets. AUDUSD failed another attempt at 0.70, awaiting RBA’s quarterly outlook. Crude oil (CLH3 & LCOJ3) dips as investors clip profits WTI oil traded 0.5% lower at $78.06, ending its best three-day rally since December. Some investors moved into profit taking mode, worried about a sagging US economy and that it could drag on oil demand. As the Fed has turned marginally hawkish recently, a large draw in inventories recently is also sending caution about oil demand. This comes despite supply disruptions with exports of Azeri oil from Turkey unlikely to resume until late next week. This has wiped out about 600kb/d of shipments. Meanwhile, Kazakh crude production has been reduced by about 200kb/d due to unplanned maintenance work. Gold (XAUUSD) back lower to test $1860 Gold turned lower again as the surge higher in 2-year yields and the US dollar strengthened, and was testing the $1860 support in early Asian trading hours. A marginally hawkish stance by the Fed members over the last week, coupled with fears from a very strong job market report, continues to bolster the view that interest rates will need to keep rising to contain inflation. Still, if gold manages to stay above the 38.2% retracement of the run up from early November at $1828, the broader uptrend can remain intact.  Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM What to consider? Riksbank’s 50bps rate hike boosts krona The Riksbank hiked the 50 basis points to 3% and guided for “probably” more tightening to come, but importantly also announced an acceleration of bond sales to reduce the balance sheet (QT) in April, which helped boost 10-year Swedish Government bond yields a chunky 20 basis points today, bringing them suddenly close to par against German yields. New Govenror Thedeen’s u-turn on the krona policy helped to bring EURSEK below 11.15, with the 11-handle and 200DMA at 10.81 now in focus. US jobless claims rose but still sub-200k Initial jobless claims rose to 196k from 183k, and above the expected 190k. Continued claims also surpassed expectations and printed 1.688mln (exp. 1.68mln), above the prior 1.650mln. While there is a pick-up in claims, it must be noted that it comes from a low level and still continues to signal a tight labor market. German inflation slows to five-month lows A delayed preliminary inflation print for January was released in Germany yesterday and it retreated to 9.2% YoY from 9.6% in December as government aid to ease the burden on households from soaring energy costs helped ease price pressures. Still, the disinflationary pressure appears to be slower than expected, and the ECB will have to keep its foot on the pedal. Hawkish outcome from Mexico’s central bank Banxico surprised markets with a 50bps rate hike once again and signalled another, smaller hike at the next meeting. Expectations were for a final 25bps rate hike. This appears to be in trend with what we have seen from RBA thins month, as also from the Reserve Bank of India, suggesting broad inflation pressures are still continuing to challenge central banks from considering a pause. China inflation is expected to inch up China’s Inflation may have accelerated as the headline CPI is forecasted to bounce to 2.2% Y/Y in January from 1.8% in December. A surge in in-person service consumption after the reopening may have underpinned some price increases but the upward pressure on the general level of inflation has remained moderate. Rises in vegetable and fruit prices were likely damped by a decline in pork prices. The decline in producer prices is expected to narrow to -0.4% in January from -0.7% in December as industrial metal prices bounced offsetting a decline in coal prices. Australian trade update: Commodity optimism picks up after Lunar New Year, Chinese students to return to AU, RBA inflationary forecasts due today. Could Australian wine tariffs from China be dropped? AUDUSD on watch. Aussie dollar volatility continued this week, with the AUDUSD losing 2% over the last 5 sessions, mirroring commodity prices pulling back. But optimism has started to pick up. The Copper (HG1) price fell 0.6% over the last five sessions, moving up yesterday, while the Iron ore (SCOA) price is 0.6% down on the week, but picked up over the few sessions, with construction kicking off in China - after the Luna New Year break. Plus, a top China economist said interest rates could be cut next quarter. This supports further commodity buying, on top of Fortescue Metals, BHP and Rio Tinto’s quarterly outlooks, hinting China demand will pick up in 2023. China also docked its first Australian coal import shipment in two years yesterday, which supports the Aussie dollar over the medium to long-term, with the market to perhaps see more coal orders. Regardless, the coal export to China will add to quarterly GPD. Supporting Australian GDP this quarter as well - will be the 50,000 influx of Chinese students expected to arrive in Australia this month - ahead of the start of semester. Beijing’s government ruled that degrees earnt online would not be accredited any more. The next catalysts for the AUDUSD might come from the RBA’s quarterly economic forecasts and policy outlook released today. We think the RBA can afford to make upward revisions to its underlying inflation forecasts, given energy prices are expected to pick up later this year - as the AEMO alluded to. Lasty, consider China’s commerce ministry is willing discuss tariffs imposed on Australian wine that began in 2020. Should the tariffs be dropped or reduce, it may encourage China to buy Australian wine again – and add to AU GDP.   For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Market Insights Today: Yield curve inversion unnerves investors – 10 February 2023 | Saxo Group (home.saxo)
The USD/INR Pair Traders Could Be The Cautious Mood Ahead Of The Key Inflation Numbers For India And The US

The Downside Trend Of The USD/INR Pair Appears Limited

TeleTrade Comments TeleTrade Comments 10.02.2023 08:55
USD/INR remains sidelined between four-month-old resistance line and 50-DMA. A convergence of 100-DMA, ascending trend line from late January appears a tough nut to crack for the pair sellers. Indian Rupee sellers need successful break of 82.80 to retake control. USD/INR remains indecisive around 82.60, challenging the two-day losing streak, as Indian Rupee traders seek fresh clues during early Friday. In doing so, the pair also takes clues from the cautious mood in the market ahead of the early signals for the US inflation, namely preliminary readings of February’s US Michigan Consumer Sentiment Index and 5-year Consumer Inflation Expectations. That said, the quote’s trading within the key technical hurdles also challenges the momentum traders of late. It’s worth observing that the bullish MACD signals and firmer RSI (14), however, keep the USD/INR buyers hopeful. On the same line could be the pair’s bounce off the 50-DMA. As a result, the pair’s another attempt to cross the downward-sloping resistance line from October 2022, close to 82.80 by the press time, appears on the table. Following that, a run-up towards the all-time high marked in late 2022 around 83.42 can’t be ruled out. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM   Meanwhile, the 50-DMA restricts the immediate downside of the USD/INR pair to around 82.20 before highlighting the 82.00 support confluence, which includes the 100-DMA and three-week-old ascending trend line. If at all the USD/INR bears keep the reins past 82.00, the odds of witnessing a gradual south run towards the previous monthly low near 80.90 can’t be ruled out. Overall, USD/INR is likely to remain depressed but the downside room appears limited, which in teases buyers to build positions for future gains. USD/INR: Daily chart Trend: Limited downside expected
The USD/MXN Pair Could Then Aim To Surpass The February Monthly Swing High

The USD/MXN Pair Remains Directed Towards The Multi-Month Low

TeleTrade Comments TeleTrade Comments 10.02.2023 09:00
USD/MXN pares Banxico-led losses ahead of US consumer-centric data. Banxico surprised markets with 0.50% rate hike versus 25 bps expected. Recession fears seem to underpin US Dollar rebound after Fed talks, US statistics weighed on the greenback. US Michigan Consumer Sentiment Index, inflation expectations eyed ahead of next week’s US CPI. USD/MXN seesaws around 18.80 as it consolidates the weekly loss, as well as the daily fall, while heading into Friday’s European session. In doing so, the Mexican Peso (MXN) pair fades the Banxico-led moves as the US dollar picks up bids amid a cautious mood in the market. The Mexican central bank, namely Banxico, surprised markets by announcing 50 basis points (bps) rate hike on Thursday. With this, Banxico surpassed market forecasts of a 0.25% rate lift while citing an effort to tame inflation fears with the increase of the benchmark rate to 11.0%. On the other hand, the US Dollar suffered from the increase in the weekly initial jobless claims, as well as the downbeat comments from Richmond Federal Reserve (Fed) President Thomas Barkin. That said, the US Weekly Initial Jobless Claims rose to 196K versus 190K expected and 183K prior. “The advance number for seasonally adjusted insured unemployment during the week ending January 28 was 1,688,000, an increase of 38,000 from the previous week's revised level," said the US Department of Labor (DOL) showed on Thursday. Elsewhere, Fed’s Barkin appeared too dovish while suggesting rate cuts as he said that it would make sense for the Fed to steer "more deliberately" from here due to lagged effects of policy. Previously, Fed Chair Jerome Powell hesitated in cheering the upbeat US jobs report and raised fears of no more hawkish moves from the US central bank. Read next: USD/JPY Is Below 131.00 Again, The Aussie Is Close To 0.70$| FXMAG.COM While delving deeper into the recent moves, the widest negative difference between the US 10-year and 2-year Treasury bond yields since 1980 amplified the recession woes the previous day. The yield curve inversion remains around the same level as both these key bond yields stay inactive near 3.67% and 4.49% respectively by the press time. The same favor the market’s rush towards risk safety and underpins the US Dollar rebound. That said, the US Dollar Index (DXY) prints mild gains around 103.38 at the latest. Moving on, the early signals for the next week’s US inflation data, namely preliminary readings of the US Michigan Consumer Sentiment Index and 5-year Consumer Inflation Expectations for February, will be crucial for immediate directions. Considering the upbeat expectations from the scheduled data, as well as the recession woes, the currency pair is likely to witness further recovery. Technical analysis USD/MXN remains directed towards the multi-month low of 18.50, marked earlier in February, unless providing a daily closing beyond the 50-DMA hurdle surrounding $19.20.    
Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

The USD/CAD Pair Is Expected Further Upside Movement

TeleTrade Comments TeleTrade Comments 10.02.2023 09:02
USD/CAD grinds higher after positing two-day winning streak. Bullish MACD signals, sustained trading beyond weekly support line favor buyers. Convergence of 100-DMA, four-month-old resistance line appears a tough nut to crack for bulls. USD/CAD teases buyers around 1.3465-70 heading into Friday’s European session, after a two-day uptrend, as the Loonie pair traders await crucial statistics from Canada and the US.  In doing so, the quote remains indecisive despite printing minor gains by the press time. Also read: USD/CAD copies Oil’s inaction near mid-1.3400s, Canada employment, early signals for US inflation eyed Even so, the bullish MACD signals join the pair’s successful trading above the weekly support line, around 1.3390 by the press time, to keep the buyers hopeful. That said, the 50-DMA level surrounding 1.3500 guards the USD/CAD pair’s immediate upside before the convergence of the 100-DMA and descending resistance line from early October, close to 1.3540 at the latest. In a case where the Loonie pair manages to stay beyond 1.3540, the previous monthly high of 1.3685 and the December 2022 peak surrounding 1.3705 will act as the last defense of the USD/CAD bears. On the flip side, a clear break of the weekly support line, near 1.3390, will aim for the weekly low of 1.3360 before highlighting the monthly bottom surrounding 1.3260. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM Should the USD/CAD prices remain weak past 1.3260, November 2022 low and the last July’s peak, respectively around 1.3235 and 1.3220, will gain the market’s attention. USD/CAD: Daily chart Trend: Further upside expected
Australian dollar against US dollar - "It seems that the currency will soon hit a price above 0.68"

The RBA Statement Of Monetary Policy Failed To Impress The AUD/USD Buyers

TeleTrade Comments TeleTrade Comments 10.02.2023 09:04
AUD/USD picks up bids to rebound from intraday low amid sluggish markets. Traders pare recent losses amid market’s cautious mood ahead of the key US data. RBA SoMP, China inflation numbers failed to impress AUD/USD traders. Mixed plays of recession and central bank talks offer inactive session ahead of US consumer-centric data. AUD/USD consolidates daily losses around 0.6930, bouncing off the intraday low amid early Friday morning in Europe. In doing so, the quote traders lick their wounds amid cautious sentiment ahead of the key US data, as well as amid indecision due to the mixed catalysts. That said, the quarterly prints of the Reserve Bank of Australia’s (RBA) Statement of Monetary Policy (SoMP) failed to impress the AUD/USD buyers despite posting hawkish economic forecasts and readiness for further interest rate hike. The reason could be linked to the statement saying, “The board is mindful of the rise in interest rates already made and that the policy acts with a lag.” Also read: RBA hawkish-sounding quarterly Statement on Monetary Policy does little for AUD Following that, China's Consumer Price Index (CPI) eased to 2.1% YoY versus 2.2% market forecasts, compared to 1.8% prior, while the Producer Price Index (PPI) dropped heavily to -0.8% YoY from -0.7% previous readings and -0.5% consensus.  Also read: China Consumer Price Index a touch lower than estimates, AUD eyed for reaction It should be noted that the looming fears of the US recession, as favored the US Treasury bond yields’ inversion, underpin the bearish bias surrounding the AUD/USD pair. However, the previous day’s downbeat US Jobless Claims join the Federal Reserve (Fed) officials’ hesitance in praising higher rate to weigh on the US Dollar and put a floor under the price. Read next: USD/JPY Is Below 131.00 Again, The Aussie Is Close To 0.70$| FXMAG.COM Against this backdrop, S&P 500 Futures print mild losses while the stocks in the Asia-Pacific region remain pressured. However, the retreat in the US Treasury bond yields appears to keep the bears at bay. Moving on, early signals for the next week’s US inflation data, namely preliminary readings of the US Michigan Consumer Sentiment Index and 5-year Consumer Inflation Expectations for February, will be crucial for the AUD/USD pair traders to watch for clear directions. Considering the upbeat expectations from the scheduled data, as well as the recession woes, the major currency pair is likely to witness further downside. Technical analysis Unless breaking the 50-DMA support surrounding 0.6870, the AUD/USD price remains on the bull’s radar targeting the 21-DMA hurdle, around the 0.7000 round figure.    
Central Banks and Inflation: Lessons from History and Current Realities

Analysis Of The GBP/JPY Cross-Currency Pair

TeleTrade Comments TeleTrade Comments 10.02.2023 09:14
GBP/JPY clings to mild losses following UK data dump. Preliminary readings of UK Q4 GDP matches 0.0% market forecasts. Yield curve inversion renews recession woes but BoJ talks defend pair buyers. Concerns surrounding the next BoJ leadership, economic slowdown fears are the key to follow for fresh impulse. GBP/JPY stays sidelined near 159.30-20, paying little heed to the UK’s fourth quarter (Q4) Gross Domestic Product (GDP) during early Friday. In doing so, the cross-currency pair portrays the market’s indecision amid mixed signals and cautious mood ahead of the key US inflation precursors. That said, the first readings of the UK Q4 GDP match forecasts on QoQ and YoY figures while declining more for December month. However, the improvement in Industrial Production and Manufacturing Production seemed to have probed the pair buyers. Also read: Breaking: UK Preliminary GDP stagnates in Q4 2022, as expected Earlier in the day, various Bank of Japan (BoJ) officials tried pushing back the hawkish expectations for the Japanese central bank and put a floor under the GBP/JPY price. Recently, Bank of Japan (BoJ) Deputy Governor Masayoshi Amamiya said that (It is) appropriate to maintain the current ultra-loose monetary policy. Before that, BoJ Governor Haruhiko Kuroda said, “The benefits of easing outweigh the costs of side effects.” On the contrary, a pullback in the Treasury bond yields after renewing the recession fears seems to weigh on the GBP/JPY price. That said, the widest negative difference between the US 10-year and 2-year Treasury bond yields since 1980 amplified the recession woes the previous day. The yield curve inversion remains around the same level as both these key bond yields stay depressed near 3.66% and 4.48% respectively by the press time. Read next: USD/JPY Is Below 131.00 Again, The Aussie Is Close To 0.70$| FXMAG.COM Looking forward, the cautious mood ahead of the next BoJ leadership announcements, up for publishing on Monday, could restrict the GBP/JPY moves. However, the fears of recession and a retreat in yield may weigh on the prices amid downbeat UK concerns, including Brexit and workers’ strikes. Technical analysis A daily closing beyond the previous resistance line from January 27, now support around 158.70, keeps the GBP/JPY buyers directed towards the 50-DMA hurdle surrounding 161.20.    
Gold Trading Analysis: Technical Signals and Price Movements

FX Daily: The waiting game is on

ING Economics ING Economics 10.02.2023 10:26
Now that markets have absorbed hawkish reactions by central bankers after the latest rate announcement and data releases, the focus will shift back to data. We think the dollar may lack clear direction until next week’s inflation data. Canadian jobs numbers have the potential of driving large CAD swings today USD: Lack of direction The dollar is struggling to find clear direction in the current market environment. Federal Reserve officials continued to push their hawkish rhetoric this week but had to implicitly and explicitly acknowledge more evidence from data must be gathered before debating the size of further tightening. This is essentially leaving the market with one conviction - a 25bp hike in March - and one outstanding doubt about whether that will mark the peak. Fed funds futures are mirroring this uncertainty by pricing in a 5.14% peak rate. We suspect key dollar crosses will stay rangebound until the next key data releases. While today’s University of Michigan survey could have some market impact, next week’s CPI is the real risk event. And if the general risk environment proves resilient for another session today, the dollar should still find a floor on the back of some defensive positioning ahead of next week’s inflation data, as happened in the run-up to the Fed meeting. Fed communication remains important, but secondary to data. After all, markets have already had the chance to assess the reaction function of the Fed to strong economic data after the latest jobs report and another round of Fedspeak. Additional policy remarks from the Fed’s Christopher Waller and Patrick Harker today are not likely to be a game changer for the dollar. DXY may keep hovering around the 103 handle into next week’s CPI report. The latest jobs figures in the US likely raised the bar for a positive surprise in Canada today, even though the consensus is centred on a rather small increase in the headline hiring figure (+15k). Unlike the Fed, the Bank of Canada has signalled its tightening cycle is probably over, even though it left the door open for more hikes should data argue against the disinflationary narrative. Markets are pricing little to no chance of further rate hikes, but equally seem reluctant to factor in any rate cuts by year-end. This leaves some room on both ends for a pronounced CAD impact from a data surprise today. A weak number could fuel easing bets (risk of cuts is higher than expected anyway, in our view), while a strong number – paired with the recent revision higher in Fed rate expectations – could encourage markets to contemplate one last hike by the BoC. We still expect USD/CAD to test 1.3000 in the coming months, but the key driver may be USD weakness rather than loonie outperformance.  Francesco Pesole EUR: Rangebound for now A brief rally failed to propel EUR/USD back above 1.0800 yesterday, and the pair may mostly trade in the 1.07-1.08 range until next week’s data offers clearer direction to the dollar. Despite an improved risk environment helping the pro-cyclical euro, below-consensus inflation in Germany yesterday may have made investors more cautious about another EUR rally. In this sense, the ability of European Central Bank speakers to lift the euro appears diminished. One of the most prominent hawkish voices in the ECB, Isabel Schnabel, will participate in a live Q&A today, although her message on the need for more tightening has already been passed through to asset prices. Pablo Hernandez de Cos is also scheduled to speak today. Elsewhere in Europe, Norwegian CPI saw a significant upside surprise. We expect a final 25bp hike at the March meeting, though the surprise surge in underlying inflation suggests the committee could add another 25bp move in June. However this is only one input into Norges Bank's thinking, and the fall in oil prices since the middle of last year, and the fact the Fed is reaching the peak, suggest Norway is unlikely to move as aggressively as some of its European peers over coming months. Francesco Pesole GBP: First-quarter contraction looks more likely The UK published GDP numbers this morning and it's a very tough read. Most, if not all, of that 0.5% contraction can be blamed on either strikes (transport & health were both heavy drags) or a lack of Premier League football games in December due to the World Cup. However, the fact that the weakness in the fourth quarter was concentrated in December means the starting point for the first quarter is lower, and almost certainly means we'll get a contraction even if activity through the quarter effectively stagnates. Our own view is we'll get a 0.3-0.4% fall in GDP in the first quarter, and probably a slight fall in the second. Recession still looks narrowly the base case. However, next week’s wage figures are what the Bank of England policymakers will watch much more closely as they assess signs of “inflation persistence”. As discussed by our economics team here, wages and developments in the service sector can make or break a March rate hike. For now, our house call is one last 25bp increase in March. EUR/GBP seems to have lost some of its bearish momentum. As discussed recently, we do not see clear drivers of GBP outperformance and a return to levels above 0.8900 in the pair is our base case. Francesco Pesole Read next: Twitter Co-Founder Jack Dorsey Comments New Twitter's Owner| FXMAG.COM CEE: Inflation reminder Today, we have the first January inflation figures in the calendar. In Hungary, inflation rose from 24.5% to 25.7% year-on-year, beating all estimates, which means an upside surprise by 0.5pp. Later, we will see inflation in the Czech Republic, also expected to rise from 15.8% to 17.6% YoY, above market expectations. As always in recent months, the main issue is energy prices, which we believe saw a massive repricing in January. Also today, the Czech National Bank will publish the minutes of its last meeting as well as the complete new forecast including the alternative scenario preferred by the Board at the moment. This assumes a longer period of stable rates and a first cut only at the end of the year. In the FX market in the region, global factors were again in charge in recent days and apart from the Polish zloty, the CEE region returned to gains. The turnaround in EUR/USD together with gas prices testing new lows and further improvement in sentiment in Europe drove the Czech koruna and Hungarian forint to new lows against the euro. Moreover, higher inflation today should support domestic rates in our view and support both currencies. However, in both cases we see heavy long positioning already, which will make the path to further gains more complicated. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Sweden: How the Riksbank has made the krona’s path to recovery even narrower

Saxo Bank Podcast: Riksbank Meeting Blasted The Swedish Krona Higher

Saxo Bank Saxo Bank 10.02.2023 10:57
Summary:  Today we look at the US market turning lower again yesterday and closing down through an important level that was providing resistance on the way, setting up the technical situation of a risk of downside capitulation. Higher US yields weighed and the US dollar rallied yesterday, although the big news in FX was a watershed Swedish Riksbank meeting that blasted the Swedish krona higher. Breaking this morning was the unanticipated news of the nominee for BoJ Governor, which sparked JPY volatility. We also delve into the disastrous news from Adidas this morning, the earnings calendar this week, commodity developments, the latest on natural gas and the week ahead macro calendar. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it. Read next: Twitter Co-Founder Jack Dorsey Comments New Twitter's Owner| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source; Podcast: Risk off, BoJ Governor nominee, Adidas dump, SEK soars | Saxo Group (home.saxo)
Bank of Japan to welcome Kazuo Ueda as its new governor

Bank of Japan to welcome Kazuo Ueda as its new governor

ING Economics ING Economics 10.02.2023 12:03
The new governor will likely lead the Bank of Japan to a gradual change in its policy stance The Bank of Japan in Tokyo Ueda is expected to shift the BoJ's policy gradually Local wires reported that Prime Minister Fumio Kishida has picked Kazuo Ueda as the next BoJ governor. He is a professor and a former BoJ board member (1995-2005). The news surprised the market as he would bring a bit more of a hawkish tilt to monetary policy than the top contender, Masayoshi Amamiya. Local media also reported that Amamiya refused to take the post.  We believe that the initial market moves - yen and rates up and stocks down - could prove to be temporary. We don't think he is expected to immediately change the BoJ's policy stance based on his previous remarks; he has warned against raising rates too early but has also argued that an exit strategy from the current ultra-easing framework is needed at some point in the future. Therefore, we believe that the market will soon pay attention to incoming data - wage growth and inflation.  The nomination of the two deputy governors is also worth watching as it will form the top leadership of the BoJ. Uchida, one of two nominees, has worked very closely with Amamiya to design a monetary easing programme with the yield curve control policy. Thus, the characteristics of the board remain dovish.  Read next: Tesla Will Increase Output For 2023, Deliveroo Are Planning To Cut Jobs| FXMAG.COM Foreign bonds may have liked the certainty of Amamiya becoming governor, but this does not mean they will jump to hawkish conclusions with Ueda. That said, the appointment comes at a difficult juncture for financial markets as the US disinflationary trend comes into question. The BoJ and Japanese markets will be hoping for a soft US CPI print next week or upward pressure on yields globally will likely resume, including in Japan. Read this article on THINK TagsMonetary Policy Bank of Japan Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Rates Spark: Crunch time

EUR/USD Pair Is Belowe $1.07, USD/JPY Pair Is Back To 131 And GBP/USD Pair Is Slightly Above $1.21

Kamila Szypuła Kamila Szypuła 10.02.2023 12:44
During the American session, the University of Michigan will publish a preliminary consumer sentiment survey for February. The main consumer confidence index is expected to rise to 65 from 64.9 in January. Market participants will keep a close eye on the component of the survey on inflation expectations for the next year, which fell to 4% in January from 4.4% in December. An unexpected increase in this reading could strengthen the US dollar. USD/JPY The yen strengthened on Friday before recovering slightly after Kazuo Ueda, who was reportedly tapped as the next governor of the Bank of Japan (BOJ), said the central bank's monetary policy was the right one. The government is also nominating Ryozo Himino, the former head of Japan's banking regulator, and BOJ director Shinichi Uchida as deputy governors, the Nikkei said. BOJ deputy governor Masayoshi Amamiya was the frontrunner for the role of governor, but the Nikkei reported that he turned down the job. The government is expected to present candidates to parliament on February 14. The BOJ shocked markets in December when it raised the 10-year yield cap to 0.5% from 0.25%, doubling the allowable range above or below zero. USD/JPY managed to rebound towards 131.00 after falling below 130.00 earlier in the day. EUR/USD EUR/USD picked up momentum and climbed to around 1.0800 at the end of Thursday, but lost much of its daily gains and closed below 1.0750. EUR/USD came under slight downward pressure and fell towards 1.0700 during Friday's European session. The US dollar gained strength thanks to rising US Treasury yields. The euro hit a 10-month high against the dollar earlier this month. The prospect of a milder recession thanks to falling energy prices and plentiful natural gas supplies, coupled with China's exit from three years of severe COVID-related restrictions, has generally ignited investors' appetite for European assets. However, this enthusiasm has made the euro look vulnerable, at least in the short term. The Euro is set for a second consecutive week of declines and at the time of writing EUR/USD is trading below 1.07 at 1.6998. Read next: Tesla Will Increase Output For 2023, Deliveroo Are Planning To Cut Jobs| FXMAG.COM GBP/USD The pound weakened on Friday after data showed the UK economy stalled in the final three months of 2022, avoiding a technical recession but recording zero growth. The UK Office for National Statistics said on Friday that the UK economy contracted by 0.5% on a monthly basis in December and came to a standstill in the fourth quarter. On the positive side, industrial production rose 0.3% in December, beating market expectations for a 0.2% decline. The Bank of England forecast last week that the UK would enter a shallow but lengthy recession starting in the first quarter of this year and lasting five quarters. Moreover, Money Markets shows that investors believe that UK interest rates will peak below 4.40% by late summer, from the current 4%. UK consumer inflation data will be released next week and may have a bigger impact on these expectations. The GBP/USD pair previously surged to levels above 1.2130 but lost momentum and is now trading just above 1.2100 and below 1.2110. AUD/USD The Australian dollar held below $0.695, pressured by hawkish signals from Federal Reserve officials who reiterated their commitment to bring down inflation with more rate increases. The Australian Dollar remains supported by expectations that the Reserve Bank of Australia will tighten policy further. The RBA’s latest monetary policy statement showed that the central bank revised its inflation forecasts higher for this year, saying price pressures were spreading into services and wages. AUD/USD is headed towards 0.6900 amid disappointing Chinese CPI and PPI data. The Australian pair is not benefiting from the RBA's hawkish monetary policy statement, currently the Aussie pair holds above 0.6920. Source: finance.yahoo.com, investing.com
InstaForex's Ralph Shedler talks Euro against Japanese yen

The Question Of Who Will Become The Next BoJ Governor Has Resulted In Volatility For The Yen

Kenny Fisher Kenny Fisher 10.02.2023 14:07
It has been a busy day for the Japanese yen, which jumped as much as 1.1% today before paring most of those gains. In the European session, USD/JPY is trading at 131.04, down 0.37%. Report says BoJ has chosen next governor The Japanese yen posted sharp gains after a Nikkei report that Kazua Ueda would be selected as the Bank of Japan’s next governor. Ueda is a former member of BoJ’s policy board and will replace Haruhiko Kuroda in early April. The yen’s gains, although only lasting a short time, indicate that Ueda is expected to take a more hawkish stance than Kuroda, who was the architect of an ultra-loose monetary policy that has largely remained in place even while other major banks have been hiking rates to tackle inflation. The question of who will become the next BoJ Governor has resulted in volatility for the yen. Earlier this week, a report that Deputy Governor Masayoshi Amamiya had been approached for the position sent the yen lower for a brief time, as Amamiya is considered a dove. Amamiya declined the offer and if the latest report is accurate, things should get very interesting under the helm of the hawkish Ueda. US unemployment claims rose for the first time in six weeks, from 183,000 to 196 thousand, which was above the consensus of 190,000. Still, this marked a fourth week of claims below the 200,000 level. The four-week moving average, which smooths out much of the week-to-week volatility, actually edged lower to 189,250. This is an indication that the labour market remains tight, despite reports of mass layoffs by Amazon, Facebook and other large companies.   USD/JPY Technical USD/JPY tested support at 130.71 earlier. The next support line is 129.12 There is resistance at 132.23 and 133.27 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
USD/CAD - Canadian economy added 41,400 jobs beating expectations

Analysis Of The Loonie (UAD/CAD) Price Movement

InstaForex Analysis InstaForex Analysis 13.02.2023 08:03
With the appearance of the hidden deviation on The Loonie price movement with its Stochastic Oscillator indicator that also happens to be on the Overbought level as well as the appearance of Bearish 123 pattern followed by Ross Hook (RH) so that based on those facts, USD/CAD has the potential to depreciated below up to the level 1.3261-1.3225. However, if on the way to the level that has been described, suddenly USD/CAD is corrected up again and up past the level of 1.3520, the downside scenario described earlier will become invalid and automatically cancel itself. Read next: UK Economy Suggest That Inflation Will Drop| FXMAG.COM Relevance up to 03:00 2023-02-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/119293
Bank of Japan keeps the rate unchanged, Tokyo Core CPI increases to 3.5%

The USD/JPY Price Will Probably Continue To Rise

InstaForex Analysis InstaForex Analysis 13.02.2023 08:05
On Friday, the USD/JPY pair reached the support of the embedded global channel line at 130.05. Then there was a rebound to the resistance of the MACD indicator line, which the price is trying to overcome this morning. The signal line of the Marlin oscillator, which is in sideways movement, can perform the function of consolidation; afterwards, the price will probably continue to rise. The bullish target is the next embedded price channel line near the 133.77 mark. Read next: Campbell Bought A $100,000 Plane To Live In It| FXMAG.COM   On the four-hour chart, the price has settled above the balance and MACD indicator lines, the Marlin oscillator starts to rise in the area of the uptrend. I expect the uptrend to persist.     search   g_translate       Relevance up to 03:00 2023-02-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334849
InstaForex's Irina Manzenko talks British pound amid latest events

The GBP/USD Price Is Already Below The Balance Indicator Line

InstaForex Analysis InstaForex Analysis 13.02.2023 08:07
The pound continues to fall this morning, which started last Friday. On the daily chart, the price is already below the balance indicator line (red sliding), the Marlin oscillator is moving downwards in the area of the downtrend. The first bearish target is support at 1.1900 (low of November 30, 2022 and high of August 26), then there is the prospect of the target at 1.1737, the high of September 13. On the four-hour chart, the price is below the balance indicator line, the signal line of the Marlin oscillator lies on the zero line, trying to push it. There is a high probability of success, so let's wait for the price to reach the first target level.   Relevance up to 03:00 2023-02-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334851
Small factors combine to pressure credit

The EUR/USD Price Shows Signs Of Consolidation

InstaForex Analysis InstaForex Analysis 13.02.2023 08:09
The euro fell by 62 points on Friday. The price is very close to 1.0660, the upper limit of the consolidation range of December 16-26. Overcoming the support can push the price to 1.0595, it can fall further to the target level of 1.0470, the lows of June 22 and April 28, 2022. Also, this level is close to the 38% retracement of the entire growth since September 28. The price has overcome the support of the balance and MACD indicator lines, the Marlin oscillator is declining in the red zone - a blatant downtrend. On the four-hour chart, the price shows signs of consolidation before reaching the support of 1.0660, the Marlin has settled in the area of the downtrend. We can also see the price in preparation as it falls further. Read next: UK Economy Suggest That Inflation Will Drop| FXMAG.COM Relevance up to 03:00 2023-02-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334853    
ECB cheat sheet: Difficult to pull away from the Fed

Analysis Of The EUR/USD Pair Price Situation

Torben Melsted Torben Melsted 13.02.2023 08:12
There should be one more spike lower to test the 1.0650 target. This final spike lower should complete wave C and 4 and set the stage for the next impulsive rally above the former peak at 1.1033. In the short term, a break above minor resistance at 1.0710 will confirm that wave 4 has been completed and wave 5 is in motion. The ideal target for wave 5 is seen near 1.1391. Relevance up to 06:00 2023-02-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/312337
The Commodities Feed: US announces SPR purchase

Crude Oil Prices Surged On Friday After Russia Announced A Production Cut

Saxo Bank Saxo Bank 13.02.2023 08:22
Summary:  U.S. stock markets finished Friday mixed with a small gain in the S&P and weakness in the Nasdaq 100 weighed by higher bond yields. Hang Seng Index and CSI300 Index declined as investors waited for fresh evidence of a recovery in the Chinese economy. Growth in outstanding loans in China picked up to 11.3% YoY in January as banks had been encouraged to lend. The nomination of Kazuo Ueda as the next Bank of Japan governor was a surprise to the market. Crude oil prices surged on Friday after Russia announced a production cut.   What’s happening in markets? US equities (US500.I and USNAS100.I) may be on wobble town this week, with CPI out Tuesday S&P 500 edged up 0.2% in a lackluster session while the tech-heavy Nasdaq 100 slid 0.6% on higher bond yields. Energy was the best-performing sector on Friday, rising nearly 4% as crude oil rose more than 2% on the Russian production cut. Markets seem defensive coming into this week after a 1.1% decline in the S&P last week - worried firstly, the Fed can keep rates higher for longer, triggered by the hot employment report the week before followed by hawkish Fed speaker comments last week. This week, the focus will be on the CPI data on Tuesday. In individual stocks, Lyft (LYFT:xnas) tumbled 36.5% after the ride-hailing company guided Q1 EBITDA at USD5 to USD15 million, far below the consensus of USD83.6 million, noting price cuts to keep customers against completion from Uber (UBER:xnys). Paypal (PYPL:xnas) rose 3% on Q4 results and earnings guidance beating analyst estimates. Spotify (SPOT:xnys) gained 3.5% following activist investment company ValueAct Capital Management took a stake in the music-streaming company. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) bear steepened The long end of the curve led the sell-off in Treasuries, with yields on the 10-year jumping 7bps to 3.73% and those on the 2-year climbed 4bps to 4.52%. The University of Michigan consumer sentiment index came at 66.4, above the 65.0 expected and the highest level in 11 months. One-year inflation expectations edged up to 4.2% from 4.0% while the 5-10-year inflation expectations remained unchanged at 2.9% Y/Y. Traders were cautious ahead of the CPI report on Tuesday and the upcoming supply from a 20-year auction this Wednesday. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) declined for the second week Hang Seng Index dropped 2% on Friday to finish the week with a second weekly loss in a row. Technology stocks, consumer discretionary, and healthcare names led the decline. Hang Seng Tech Index tumbled 4.6%. Baidu (09888:xhkg), plunging 7.4%, was the biggest loser within the Hang Seng Index. JD.Com (09618:xhkg) dropped 6.3% despite the e-commerce giant announcing plans to launch its ChatJD and jump on the ChatGPT-like AI-generated content bandwagon. Sportswear stocks were laggards. Shenzhou ( 02313:xhkg ), Anta ( 02020:xhkg ), and Li Ning (02331:xhkg) slid between 4% and 5.6%. Shares of EV makers tumbled, XPeng (09868:xhkg) down 7.9%, Li Auto (02015:xhkg) down 7.6%, Nio (09866:xhkg) down 6.6%. SMIC declined 4.3% after the chipmaker warned of a gloomy 2023 and guided full-year revenue down 10%-13%. Standard Chartered Bank (02888:xhkg) rose 4.2% in Hong Kong trading but its London-listed shares fell 5% after First Abu Dhabi Bank said it is not evaluating an offer. In A-shares, CSI300 slid 0.6% on Friday and was down 0.8% for the week. Solar, lithium, coal mining, non-ferrous metal, auto, and semiconductors were laggards. Investors are waiting for more evidence of a recovery in the Chinese economy. The stronger-than-expected growth in corporate loans in China was released after the market close. Australian equites (ASXSP200.I) could also wobble street, if employment data is hotter than expected and commodities pair back with a higher US dollar This week investors and traders will be focused firstly – Australian employment data out for January, due on Thursday, expected to show employment rose by 20,000 from the prior drop, with the unemployment rate expected to remain unchanged at 3.5%. Also importantly, consider the Aussie share market, may be potentially vulnerable for a pair back as the Australian 10 year bond yield has moved up aggressive to 3.81%- its highest level since January. The reason for this, is that the market is expecting the RBA to make ~78.6bps of hikes before pausing in August. So this means unprofitable tech companies and those businesses that don’t pay a dividend yield are vulnerable. FX: SEK reverses gains, CAD boosted by strong jobs and oil The US dollar continued to gain amid renewed risk aversion on Friday, but gains were somewhat capped by gains in CAD as oil prices soared after the Russian supply cuts and Canadian jobs report smashed consensus expectations ten times over. USDCAD reversed from 1.3450+ levels to 1.3350. Meanwhile, USDJPY ended the week nearly unchanged and may be looking at further volatility with higher yields, rising oil prices and the new BOJ Governor. Meanwhile, SEK reversed from the highs after a hawkish surprise from the Riksbank last week. EURSEK back above 11.15 and EURUSD down to 1.0670 from 1.087 levels last week. Crude oil (CLH3 & LCOJ3) moves higher on Russian supply falling Oil prices jumped higher on Friday, closing the week with over 8% gains, as Russia said it would lower production in response to western sanctions (read below). The OPEC+ alliance, which Russia is key member, signalled they won’t be increasing output to fill in for the reductions, signalling a tight market may be ahead. WTI rose to $80/barrel and Brent touched close to $87, although some profit taking emerged in early Asian hours on Monday. Oil prices still continue to trade within a range that has prevailed since November. Meanwhile, other supply returned to the market with Tanker loadings of Azeri crude docking at Turkey's Ceyhan terminal. Gold (XAUUSD) has its eyes on US CPI this week Gold continues to consolidate near $1860, despite pressure from rising US yields. This week’s US CPI release continues to be on watch to assess if the disinflationary narrative can continue even with a new methodology of calculating. A rhetoric shift in global central banks has been seen last week with more hawkish surprises, and the CPI will be the latest test if that narrative can continue to build. Gold however still getting support from rising US-China tensions. Further weakness carries the risk of an extension towards $1828, the 38.2% retracement of the run up from early November.  Read next: UK Economy Suggest That Inflation Will Drop| FXMAG.COM What to consider? Bank of Japan picks a dark horse for Governor post Japan PM Kishida in a shocking announcement on Friday nominated a dark horse candidate Kazuo Ueda as the next governor for the Bank of Japan after Kuroda steps down in April. BOJ executive director (in charge of monetary policy) Shinichi Uchida and former Financial Services Agency commissioner Ryozo Himino were also nominated as deputy governors. Ueda is an academic and a former member of the BOJ policy board, and digging his prior speeches has revealed that he has more of a neutral stance, compared to the dovish Amamiya who was reportedly offered the role but rejected it. His appointment suggests we could see some tweaks in BOJ’s ultra-easy monetary policy, but expecting an outright removal of yield curve control policy appears aggressive now. Fed’s Harker highlights higher-for-longer rates Philly Fed President Patrick Harker (voter) said the likelihood of the Fed being able to control inflation without triggering a recession is growing, but stressed that the key rate must get above 5% and stay there to ensure price pressures ease. He also hinted at a “couple” more 25-bps rate hikes being in the pipeline, but said that how far the Fed will need to go above 5% will be determined by the data. He also talked about rate cuts, but dismissed the possibility in 2023. Focus turns to Michelle Bowman who speaks at a banking conference today. Russia’s production cut to further tighten the oil market On Friday, Russia announced a unilateral cut in its March crude oil output by 500,000 barrels a day, apparently without consulting with its OPEC+ partners first. Since the introduction of EU and G7 sanctions on crude oil from December and fuel products from early February, Russia has increasingly been forced to cut its selling price as its client base continued to dwindle. If oil prices continue to charge higher, OPEC may need to fill the gap by ramping up production, especially in light of an expected pickup in Chinese demand this year. China’s CPI rose to 2.1% in January China’s CPI rose to +2.1% Y/Y in January from 1.8% in December, in line with expectations. The increase was largely due to the fact that the Lunar New Year fell into January this year while it was in February last year and a larger than expected 6.2% Y/Y food price inflation in January versus 4.8% in December. Excluding food and energy, core CPI came in at 1.0% Y/Y, edging up from 0.7% in December. In January, services inflation picked up to 0.8% M/M but was still benign on a year-on-year basis, coming at 1.0% Y/Y in January, rising moderately from 0.6% Y/Y. Producer price deflation deepened, with PPI falling 0.8% Y/Y, versus -0.5% Y/Y expected and -0.7% Y/Y in December. The larger decline in CPI was driven by falling crude oil and coal prices. Growth of outstanding RMB loans in China accelerated to 11.3% Y/Y New aggregate financing increased to RMB5,980 billion from RMB1,306 billion (revised down from RMB1,310 billion) in December, above RMB5,400 forecasted in Bloomberg’s survey. However, due to a high base last year, the growth in total outstanding aggregate financing slowed to 9.4% Y/Y in January from 9.6% in December. The strength in credit expansion came from a larger-than-expected increase in new RMB loans to RMB4,900 billion versus RMB4,200 billion expected and RMB1,400 billion in December, as regulators instructed banks to provide more credits to support key industries and the economy. RMB4,680 billion of these new loans were extended to the corporate sector while only RMB257 billion went to households. The RMB257 new loans to households were much below the RMB843 billion a year ago. The growth in M2 accelerated to 12.6% Y/Y in January from 11.8% in December, above the 11.7% expected. Geopolitical tensions rising U.S. officials said an “unidentified object” has been shot down by its military over Lake Huron. This is the third time in as many days, after earlier downings in Alaska and Canada, and it is the fourth this month to be shot down over North America by a US missile. As debris from these is being evaluated, now the Chinese government says it has spotted a mystery object over waters near northern port city Qingdao and it is preparing to shoot it down. Singapore’s DBS Bank announces special dividend Singapore’s largest bank DBS Group (D05:xses) reported Q4 earnings this morning, with net income up 69% at S$ 2.34bn vs. estimate of S$2.17bn. Higher interest rates continued to boost its income and more than offset other declines due to volatility in financial markets. The board has declared a final dividend of 42 cents a share for the fourth quarter, up from 36 cents a year ago, and a special dividend of 50 cents a share. This brings the total payout for the full year to $2 a share. Other banks including Oversea-Chinese Banking Corp (O39:xses) and United Overseas Bank (U11:xses) are due to report results next week.   For a global look at markets – tune into our Podcast.   Source: Market Insights Today: New BOJ chief; Russian crude production cut; Strong loan growth in China – 13 February 2023 | Saxo Group (home.saxo)
Central Banks and Inflation: Lessons from History and Current Realities

The GBP/JPY Cross-Pair Consolidates Recent Losses

TeleTrade Comments TeleTrade Comments 13.02.2023 08:30
GBP/JPY pares the previous day’s losses inside fortnight-long symmetrical triangle. Steady RSI backs recent recovery, 200-SMA challenges immediate upside. Multiple supports to test bears on their return. GBP/JPY picks up bids to 158.70 as it grinds inside a two-wee-old triangle formation during Monday’s Asian session. The cross-currency pair prints mild gains after a consecutive two-week downtrend. That said, the recently steady RSI (14) backs the quote’s recovery moves inside the symmetrical triangle. It’s worth noting, however, that the 200-SMA hurdle surrounding 159.30 acts as an immediate upside hurdle for the GBP/JPY buyers to watch before the stated triangle’s top line, close to 159.45 by the press time. In a case where the pair remains firmer past 159.45, the 160.00 psychological magnet holds the key for the GBP/JPY run-up targeting the previous monthly high surrounding 161.85 and then to the last defense of sellers, namely the late December 2022 high near 162.35. Read next: UK Economy Suggest That Inflation Will Drop| FXMAG.COM Alternatively, a downside break of the 158.30 level will defy the triangle formation and theoretically suggest a slump toward the 143.00 mark. However, multiple hurdles do challenge the GBP/JPY bears before allowing them to cheer the multi-month low. Among them, lows marked during February and January 2023, respectively near 156.75 and 155.35, will precede the September 2022 bottom surrounding 148.80 are the key. Also important to watch is the 150.00 round figure. To sum up, GBP/JPY remains sidelined as it consolidates recent losses. GBP/JPY: Four-hour chart Trend: Upside remains more appealing remaining time till the new event being published U.S.: Leading Indicators
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

The Aussie Pair (AUD/USD) Has Attempted A Recovery Move

TeleTrade Comments TeleTrade Comments 13.02.2023 08:33
The recovery move by AUD/USD might meet offers amid the risk-off mood. A surprise rise in the US inflation would accelerate rate hike odds by the Fed. A confident drop below the H&S neckline will trigger a bearish reversal. The AUD/USD pair has shown a responsive buying action after surrendering the round-level support of 0.6900 in the Asian session. The Aussie asset has attempted a recovery move, however, the Australian Dollar could retreat ahead as the risk impulse is quite negative amid airborne threats to the United States. The US Dollar Index (DXY) is expected to recapture the 103.50 resistance ahead investors are getting anxious ahead of the release of the United State inflation data. S&P500 futures are extending their losses as investors are expecting that a surprise rise in the US inflation would accelerate rate hike odds by the Federal Reserve (Fed) and eventually will escalate recession fears. The 10-year US Treasury yields are struggling to extend gains above 3.75%. AUD/USD is completing the last leg of the Head and Shoulder chart pattern on a four-hour scale. The aforementioned chart pattern is a prolonged consolidation and a breakdown of the neckline plotted from the January 10 low at 0.6860 will trigger a bearish reversal. The asset is facing barricades each time encountering the 20-period Exponential Moving Average (EMA) at 0.6398, indicating more weakness ahead. Meanwhile, the Relative Strength Index (RSI) (14) is struggling to sustain itself in the 40.00-60.00 range. A slippage into the bearish range of 20.00-40.00 will trigger the bearish momentum. Read next: Campbell Bought A $100,000 Plane To Live In It| FXMAG.COM A breakdown below the neckline plotted from January 10 low at 0.6860 will drag the asset toward December 28 high around 0.6800. A slippage below the latter will further drag the asset toward December 22 high at 0.6767. In an alternate scenario, a decisive break above the psychological resistance of 0.7000 will drive the asset towards January 18 high at 0.7064 followed by January 26 high at 0.7143. AUD/USD four-hour chart remaining time till the new event being published U.S.: Leading Indicators
Analysis Of Situation Of The USD/INR Pair

The USD/INR Pair Traders May Witness Lackluster Moves

TeleTrade Comments TeleTrade Comments 13.02.2023 08:36
USD/INR picks up bids to pare the previous losses amid risk-off mood. Fears surrounding mystery objects, hawkish Fed roil risk profile and underpin US Dollar after Friday’s upbeat data. Light calendar, cautious mood ahead of key data/events also exert downside pressure on Indian Rupee. USD/INR marches towards 82.80, up 0.30% intraday, as it snaps the three-day downtrend during early Monday. In doing so, the Indian Rupee (INR) pair picks up bids to reverse the pullback from the previous monthly high as the US Dollar remains firmer amid the sour sentiment. That said, the US Dollar Index (DXY) rises 0.20% intraday to 103.80 after a two-week uptrend as Fed talks remain hawkish while the US data appear positive. Adding strength to the greenback could be its safe-haven demand as the risk profile weakens amid geopolitical concerns surrounding unidentified objects that flew over the borders surrounding the US and China. US Military General recently turned down the market’s fears of Chinese spying on the US by saying, “(We) have no reason to think latest objects are Chinese.” Even so, the fact that the US shot down nearly four such objects and China prepares to hit one weighs on sentiment. On a different page, upbeat US inflation expectations and firmer Michigan Consumer Sentiment for February may have allowed Philadelphia Federal Reserve President Patrick Harker to push back the chatters of a Fed rate cut during 2023. However, the policymaker did mention, “Fed not likely to cut this year but may be able to in 2024 if inflation starts ebbing.”  His comments were mostly in line with Fed Chair Jerome Powell’s cautious optimism and hence challenge the US Dollar buyers. At home, recovery in Adani stocks and optimism surrounding the government’s deficit-cutting measures seem to battle with the broadly downbeat sentiment due to the Reserve Bank of India’s (RBI) hawkish bias. It’s worth noting that the exodus of foreign fund outflows, due to the Adani saga, also weighs on the Indian Rupee. Read next: UK Economy Suggest That Inflation Will Drop| FXMAG.COM Amid these plays, the S&P 500 Futures fade the previous day’s corrective bounce off a one-week low, down 0.35% around 4,080 at the latest, whereas the US 10-year Treasury yields remain sidelined near 3.73% after refreshing a five-week high on Friday. Further, the Indian equity benchmarks are mildly offered by the press time. Looking forward, USD/INR pair traders may witness lackluster moves ahead of the US Consumer Price Index (CPI) for January, up for publishing on Tuesday. Technical analysis USD/INR pair’s U-turn from 50-DMA, close to 82.20 by the press time, allows pair buyers to aim for a four-month-old descending resistance line, near 82.90.
Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

The USD/CAD Pair Is Expected A Further Downside Movement

TeleTrade Comments TeleTrade Comments 13.02.2023 08:47
USD/CAD consolidates the biggest daily slump in over a month. 61.8% Fibonacci retracement triggers corrective bounce amid oversold RSI. 200-HMA joins sluggish MACD signals to probe Loonie pair buyers. USD/CAD retreats from intraday high as buyers struggle to overcome the key Hourly Moving Average (HMA) during early Monday in Europe. Even so, the Loonie pair prints 0.20% intraday gains around 1.3375 as it pares the heaviest daily loss in five weeks, marked the previous day. The quote’s recovery could be linked to its bounce off the 61.8% Fibonacci retracement level of February 02-06 upside amid the oversold RSI (14) conditions. However, the 200-HMA level challenges the USD/CAD pair’s immediate upside near 1.3385. Given the bullish MACD signals, despite being sluggish of late, the Loonie pair may remain on the bull’s radar, suggesting a clear break of the immediate HMA hurdle surrounding 1.3385. Read next: Campbell Bought A $100,000 Plane To Live In It| FXMAG.COM Following that, 1.3415 may test the upside momentum before directing the USD/CAD bulls toward the two-week-old horizontal resistance area near 1.3470. In a case where USD/CAD remains firmer past 1.3470, it can aim for a late January swing high near 1.3520. Alternatively, the 61.8% Fibonacci retracement level, also known as the golden Fibonacci ratio, puts a floor under the USD/CAD prices of around 1.3340, a break of which highlights the 1.3300 round figure for the bears. Should USD/CAD breaks the 1.3300 round figure, the monthly low and November 2022 trough, respectively near 1.3260 and 1.3225, will gain the market’s attention. USD/CAD: Hourly chart Trend: Further downside expected
The USD/MXN Pair Could Then Aim To Surpass The February Monthly Swing High

The Hawkish Monetary Policy By The Bank Of Mexico (Banxico) Has Failed To Provide Strength To The Mexican Peso

TeleTrade Comments TeleTrade Comments 13.02.2023 08:49
USD/MXN is struggling to extend its recovery move above 18.70 amid the risk-off mood. A Reuters poll indicates that the monthly headline CPI and core inflation will escalate by 0.4%. Banxico is proving to be an inflation fighter after the departure of Gerardo Esquivel, who was considered a big dove. The USD/MXN pair is struggling to extend its recovery move above 18.70 in the early European session. The asset attempted a rebound move after refreshing the weekly low at 18.63, however, the recovery move looks less confident as the market sentiment is extremely negative. Investors have underpinned the risk-aversion theme as airborne threats on the United States have triggered geopolitical tensions. Also, soaring anxiety among investors ahead of the release of the United States inflation data has added to the risk-off impulse. S&P500 futures are continuously adding losses as investors expect that higher inflation will add to the consensus for higher interest rates by the Federal Reserve (Fed). The US Dollar Index (DXY) has turned sideways after shifting its auction above 103.40 as investors are getting prepared for a fresh upside amid a higher appeal for safe-haven assets. Higher interest rates by the Fed after a surprise rise in inflation will result in more divergence in policy comparison of other economies with the Fed. The alpha provided on 10-year US Treasury yields is holding itself above 3.74% as bets scaled higher for more stubbornness in the US inflation. A Reuters poll indicates that the monthly headline CPI and core inflation that excludes oil and food prices will escalate by 0.4%. The annual headline CPI is seen lower at 5.8% against the former release of 6.5% while the core inflation that excludes oil and food prices is seen lower at 5.4% versus 5.8% in the former release. Read next: UK Economy Suggest That Inflation Will Drop| FXMAG.COM Meanwhile, the hawkish monetary policy by the Bank of Mexico (Banxico) has failed to provide strength to the Mexican Peso. Last week, Banxico hiked interest rates by 50 basis points (bps) to 11%. Analysts at Commerzbank stated their views on the monetary policy “Banxico is proving to be an inflation fighter after the departure of central bank member Gerardo Esquivel, who was considered a big dove, which should in principle help the Peso.” remaining time till the new event being published U.S.: Leading Indicators
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

Fears About The Mystery Objects Flying Over The US And China Propel The USD/JPY Prices

TeleTrade Comments TeleTrade Comments 13.02.2023 08:52
USD/JPY picks up bids to renew intraday high as US Dollar cheers risk-off mood. Hopes of doves to keep the BoJ reins weigh on Yen amid sluggish yields. Upbeat US inflation expectations, hawkish Fed concerns keep buyers hopeful. Japan policymakers verdict on BoJ leader, Japan Q4 GDP and US CPI will be crucial for clear directions. USD/JPY refreshes intraday high around 132.30 during early Monday in Europe. In doing so, the Yen pair reverses the previous week’s losses amid hopes of an easy money policy to prevail for long. Adding strength to the pair’s upside bias is the US Dollar’s demand amid a risk-off mood and also due to the hawkish bias surrounding the Federal Reserve (Fed), not to forget steady yields. Talks surrounding Kazuo Ueda’s appointment as the Bank of Japan (BoJ) Governor backed concerns over the ultra-easy monetary policy and favored the USD/JPY bulls afterward. On the other hand, fears about the mystery objects flying over the US and China underpin the US Dollar’s haven demand and propel the USD/JPY prices. The US shot down nearly four such objects while China prepares to hit one such unidentified object while weighing on the market sentiment and fueling the DXY. That said, the US Dollar Index (DXY), was up 0.20% near 103.80 by the press time. Elsewhere, the mildly hawkish Fed talks join Friday’s strong US Consumer Sentiment and US inflation expectations to offer extra strength to the USD/JPY prices, via US Dollar strength. During the weekend, Philadelphia Federal Reserve President Patrick Harker pushed back the chatters of a Fed rate cut during 2023. However, the policymaker did mention, “Fed not likely to cut this year but may be able to in 2024 if inflation starts ebbing.”  His comments were mostly in line with Fed Chair Jerome Powell’s cautious optimism and hence challenge the US Dollar buyers. Read next: Campbell Bought A $100,000 Plane To Live In It| FXMAG.COM Amid these plays, US stock futures fade the previous day’s corrective bounce while the Treasury bond yields remain sluggish around the multi-day high marked on Friday, which in turn helped the US Dollar Index (DXY) to grind higher after a two-week uptrend. Moving ahead, the preliminary readings of Japan’s fourth quarter (Q4) Gross Domestic Product, up for publishing on Tuesday, will precede the Japanese policymakers’ official selection of the BoJ leaders to direct short-term USD/JPY moves. Following that, the US Consumer Price Index (CPI) for January will be crucial for short-term Yen pair directions. Technical analysis A daily closing beyond the 50-DMA, around 132.20 by the press time, appears necessary for the USD/JPY bulls to keep the reins.
If The Bank Of England Hike Interest Rates Again Later This Month Will Exert Downward Pressure On The EUR/GBP Cross

The EUR/USD Pair Is Expected A Further Upside Movement

TeleTrade Comments TeleTrade Comments 13.02.2023 09:02
EUR/GBP fades bounce off monthly support, grinds near intraday high of late. Sustained trading beyond 200-SMA, looming bull cross on MACD favor buyers. Weekly resistance line guards immediate upside ahead of monthly high. EUR/GBP grinds near an intraday high surrounding 0.8850 during the initial hours of Monday morning in London. In doing so, the cross-currency pair stays above the 200-Simple Moving Average (SMA) despite fading bounce off the monthly support line. It’s worth noting that the impending bull cross on the MACD and steady RSI (14) joins the quote’s successful trading above the key moving average to keep buyers hopeful. That said, a one-week-old descending trend line restricts the EUR/GBP pair’s immediate upside to near 0.8870. Following that, the 0.8900 round figure and multiple hurdles near 0.8910 could act as the last defense of the pair buyers before directing the quote toward the monthly high of near 0.8980. It should be observed that the EUR/GBP run-up beyond 0.8990 will need validation from the 0.9000 psychological magnet to aim for the previous yearly high surrounding 0.9250. Read next: Campbell Bought A $100,000 Plane To Live In It| FXMAG.COM On the contrary, the 200-SMA and an ascending trend line from January 19, close to 0.8835 and 0.8828 in that order, restrict the short-term downside of the EUR/GBP pair. Following that the 61.8% Fibonacci retracement level of the pair’s January-February upside and the late January swing low, respectively near 0.8820 and 0.8760, will be in focus. Overall, EUR/GBP is likely to remain firmer unless offering clear trading below 0.8828. EUR/GBP: Four-hour chart Trend: Further upside expected remaining time till the new event being published U.S.: Leading Indicators
Decarbonizing Steel: Contrasting Coal-based and Hydrogen-based Production Methods

FX Daily: Preparing for deflation reality checks

ING Economics ING Economics 13.02.2023 09:18
Asset markets have now fully absorbed the re-tuning of communication by central banks over the last two weeks. Now, it’s time for data to offer some direction, especially in the US. CPI data tomorrow may help build expectations around a May hike, and the dollar could find a bit more support. On Thursday we will see the ECJ's decision on Polish FX mortgages USD: Data in the driver's seat A key takeaway from the recent fluctuations in major G10 pairs is that, at this stage, data matters much more than central bank communication. The mass of hawkish comments - ranging from modest to aggressive - seems rather predictable in light of the markets’ early-February dovish run and strong jobs data in the US. However, more than providing direction to the market in terms of the next central bank moves, recent communication merely offered some tools to assess central bankers’ reaction function to data, and reinforced the notion that data-dependency is still the name of the game. Arguably, February’s price action so far has been mostly a reaction to strong nonfarm payrolls data in the US rather than to Federal Reserve and European Central Bank meetings: as long as central banks remain data-dependent in the short term, it's really up to the data to drive trends in FX. At this stage, this should be especially true for the Fed and the dollar.  This week sees the release of US inflation, retail sales and industrial production figures. A note of warning: US data in January should be strong throughout, largely thanks to greatly improved weather conditions compared to December. The big jump in hiring seen in the latest jobs report also suggests increased demand. Indeed, the most important piece of data will be inflation (tomorrow). Our in-house projections are in line with the market consensus for a month-on-month rise of 0.5% and 0.4% for headline and core rates, respectively. Auto sales and shelter should contribute to put a floor under core inflation for now, but we think these two components will start declining more sharply from mid-second quarter, which should fuel a more sustained downward trend in inflation. In other words, we don’t expect this setback in the deflationary path to suggest the trend is inverting. Still, this - with the aid of strong retail sales and industrial production figures - will likely be enough to allow markets and FOMC hawks to fully expect a 25bp rate hike in May after the one in March. Any upside surprise may push the peak rate pricing towards the 5.50% mark. From an FX perspective, the dollar appears in a position to at least hang on to recent gains this week. We could see a return to 105.00 in DXY soon. Today’s price action may follow a wait-and-see approach given there are no data releases, but we have observed a tendency of markets to move closer to defensive long-dollar positions into key risk events. The balance of risks appears skewed to the upside for the dollar today. Francesco Pesole EUR: Lacking the domestic push In the midst of the dollar's upward correction, the euro has also lost its idiosyncratic bullish momentum. Hawkish comments by ECB members seem to have only offset the communication hiccups on the day of the ECB meeting but have failed to lift the euro as rate differentials swung back in favour of the dollar. The EUR-USD 2-year swap rate spread is back to 145-150bp in favour of USD, around the lowest this year after having shrunk to the 110bp area in the aftermath of the Fed meeting. Our medium-term view is still one of EUR/USD appreciation over the course of 2023, but we don’t see clear drivers for a EUR/USD rebound this week, especially from the eurozone side. It would probably require a rather low US CPI figure to send the pair sustainably back above 1.0800-1.0850. We see a greater chance of the pair coming under some additional pressure, and a strong US CPI read could mean the 1.0500 support (1.0490 is the 2023 low) is tested. This week does not include key data releases in the eurozone, but just a few more ECB speakers. President Christine Lagarde will speak on Wednesday: expect another attempt to build market expectations around more tightening, although other ECB members have already gone a long way communication-wise and we don’t see her speech as a big risk event for the euro. Francesco Pesole Read next: UK Economy Suggest That Inflation Will Drop| FXMAG.COM GBP: Some key data for the BoE this week The UK dodged a technical recession according to last week’s fourth quarter figures, but that was hardly the key data point the Bank of England was focused on. This week sees the release of jobs, wages, CPI and retail sales. Among those, tomorrow’s wages should be the most important release for the BoE's next policy moves. Our UK economist discusses the relevance of this week’s data releases in this article. We think markets will be given reasons to consolidate their view around a 25bp hike in March, but expectations of further tightening may ultimately prove unfunded. The EUR/GBP drop could extend to 0.8800 but we think markets are running out of reasons to stay bearish on the pair for longer. We continue to see euro outperformance from the second quarter and 0.9000 is our target level in EUR/GBP in the second half of 2023. Francesco Pesole CEE: Zloty is waiting for the ECJ decision This week, we start with the current account December figures from Poland and the Czech Republic. On Tuesday, we will get the GDP numbers for the fourth quarter. For Poland, we expect 2.3% year-on-year in line with expectations, for Hungary 0.4% YoY, below market expectations, and for Romania 5.1% YoY, above market expectations. Also, on Tuesday we will see January inflation in Romania and we expect a slowdown from 16.4% to 15.4% YoY, implying Romania is the only country in CEE where inflation fell in YoY terms in January. January inflation in Poland will be released on Wednesday. We expect inflation to have jumped from 16.6% to 18.1% YoY, above market expectations. And Poland will also be in focus on Thursday when we should see the European Court of Justice's (ECJ) decision on the FX mortgage case, which will impact the local banking sector and Polish assets. In the FX market, it will be challenging for the market to balance between the local and global calendar this week. A higher US dollar should be rather negative for the region. On the other hand, the heavy economic calendar in the region should push the focus onto local drivers. The Polish zloty will be the main focus this week. A jump in inflation should support market rates and interest rate differentials. On the other hand, Thursday's ECJ decision brings a lot of uncertainty and is probably one of the main reasons why the zloty has underperformed within the region this year. However, the outcome may not bring much clarity to the situation. Therefore, the zloty is likely to be very volatile this week, but we remain rather bearish. On the other hand, the Czech koruna and Hungarian forint should stabilise at current levels. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Analysis And Trips For Trading The GBP/USD Pair In Short And Long Positions

Analysis And Trips For Trading The GBP/USD Pair In Short And Long Positions

Jakub Novak Jakub Novak 13.02.2023 09:23
Analysis of transactions and tips for trading GBP/USD The upside potential was limited because the test of 1.2063 occurred when the MACD line was already far from zero. On the second attempt, the MACD line was under zero, which was a good signal to sell. This resulted in a price decrease of about 40 pips. Pound was already under pressure from the speech of Bank of England governor Andrew Bailey last Friday. Most likely, this downward move will continue today as there are no important statistics scheduled to be released in the UK. The risk of further rate hikes in the US will also provide support for dollar, as will the upcoming speech of FOMC member Michelle Bowman, who may once again stress that the Fed is not going to cut interest rates this year. All that will keep GBP/USD down early this week. For long positions: Buy pound when the quote reaches 1.2075 (green line on the chart) and take profit at the price of 1.2126 (thicker green line on the chart). Growth will be possible in the morning. However, when buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can be bought at 1.2036, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2075 and 1.2126. Read next: Campbell Bought A $100,000 Plane To Live In It| FXMAG.COM For short positions: Sell pound when the quote reaches 1.2036 (red line on the chart) and take profit at the price of 1.1992. Pressure will return if there is no activity around the daily high. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2075, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2036 and 1.1992. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.       Relevance up to 07:00 2023-02-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/334879
FX Daily: Time for the dollar to pause?

Forex Weekly Summary: EUR/USD Closed Below 1.07, GBP/USD started the week at 1.2050 and ended that way too

Kamila Szypuła Kamila Szypuła 11.02.2023 14:36
The dollar gained on Friday as investors grew concerned about a U.S. inflation report next week that could show a number that is higher than markets forecast amid data showing expectations for a continued rise in prices over the next year. As the data continued to show positive U.S. momentum, the dollar was on pace for its second weekly rise against a basket of six currencies, a run it has not seen since October. Federal Reserve Chair Jerome Powell has cited the Michigan survey's inflation outlook as one of the indicators the U.S. central bank tracks. USD/JPY The USD/JPY pair started the week trading at 132.12 and, despite the correction, was moving towards 132.50. Above this level on the first day of trading (Monday) it reached a weekly high of 132.88. In the following days, the USD/JPY pair fell below 132.00 until reaching the level of 130.50. The pair then traded in a range of 130.00-131.50 until USD/JPY dropped to 129.9550, which is the pair's weekly low. The pair closed between the highest and lowest levels, i.e. above 131.00, 131.38 to be exact. The yen rose on Friday across the board with Kazuo Ueda reportedly set to become the next Bank of Japan (BOJ) governor but pared gains after he said the central bank's monetary policy was appropriate. The Japanese unit was on track for its first weekly gain versus the dollar after posting losses for three straight weeks. Japanese Prime Minister Fumio Kishida said the government is planning to present the BOJ governor nominee to parliament on Tuesday, but did not answer a question on whether Ueda would be put forward. Read next: Tesla Will Increase Output For 2023, Deliveroo Are Planning To Cut Jobs| FXMAG.COM EUR/USD The EUR/USD pair started the week trading close to $1.08 at 1.0792. In the following hours, the EUR/USD pair reached a weekly high of 1.0804 and then began to fall towards 1.07. On Tuesday, EUR/USD fell below 1.07, then rose again on Wednesday, breaking above 1.0750 on Thursday. The pair failed to maintain this momentum and on the final day of trading fell to a weekly low of 1.0670. After that, EUR/USD rose slightly and closed the week just above the low of 1.0681. GBP/USD The Cable pair started trading at 1.2050. And for the next two days she lingered in this area. On Wednesday, GBP/USD started an upward move towards 1.21. On Thursday, GBP/USD traded close to 1.22 at 1.2191 which is the weekly high of GBP/USD, but fell back on Friday to close the week at 1.2058. The week's low was at 1.1963 for the GBP/USD pair. AUD/USD The Aussie Pair started trading at 0.6910 and fell on Monday to a weekly low of 0.6859. In the following days, the pair stayed above 0.69. On Thursday, AUD/USD broke above 0.70 and hit a weekly high of 0.7011, similarly to EUR and GBP, the Australian pair failed to maintain momentum and dropped Friday to end the week at 0.6921. The Australian and New Zealand dollars found support on Friday as markets continued to ramp up expectations for how high local interest rates might rise, sending bond yields to one-month peaks. Having hiked rates by a quarter point to a decade-high of 3.35% on Tuesday, the Reserve Bank of Australia (RBA) said domestic price pressures were building and spreading into services and wages, so it was unclear how high rates might have to go. Source: finance.yahoo.com, investing.com
The GBP/USD Pair Is Expected The Consolidation To Continue

The British Pound (GBP) Ended The Bullish Correction

Paolo Greco Paolo Greco 13.02.2023 10:29
M5 chart of GBP/USD On Friday, GBP/USD was flat for most of the day. The movements were sharp with frequent reversals, so it was quite inconvenient to trade. The macroeconomic background was strong, but the market did not come to a consensus about how they should process it, and what to do in general. The UK GDP rose 0% in the fourth quarter, which was fully in line with forecasts. However, it is estimated to have fallen by a revised 0.3% in the third quarter. In general, we can consider this report as negative, and the pound fell by the end of the day, so technically it all makes sense. Anyway, I expect the British currency to fall further, as it was rising too long and too much for it to resume its uptrend now. The price is located below the Ichimoku indicator lines, so there are no technical reasons to expect an upward movement now. There will be more important macro data this week, but you should focus on technique. It doesn't even make sense to highlight Friday's trading signals. The price crossed 1.2106 ten times, at the same time, it managed to reach the critical line. Thus, traders could take long positions using the first two signals. In one case, the pair went up the necessary 20 points, in the second case, it didn't. Therefore, one position was closed by Stop Loss at Breakeven, the second one at a loss. In general, the rest of the trading signals should not have been considered. Read next: Amazon Is Slowly Dismantling Tony Hsieh’s Version Of Zappos, Louisa Vuitton Doubled Sales| FXMAG.COM COT report The recent COT report on the pound sterling unveiled that the bearish sentiment became weaker. During the week, non-commercial traders closed 6,700 long positions and 7,500 short ones. Thus, the net position of non-commercial traders increased by 800. And with the net position steadily increasing in the past months, the mood of market players is likely to become bullish in the near future. However, even though the pound has been rising against the dollar in recent months, it is very difficult to pinpoint the exact reason. There is also a chance that it will fall in the future as the currency needs a correction. On the whole, the COT reports are in line with the movement of the pound in recent months. Since the net position is not bullish yet, traders may buy the asset in the next few months. For now, non-commercial traders have 35,000 longs and 59,000 shorts. It is important to note though that it is uncertain whether the pound will have a long-lasting growth. Although it has technical reasons for that, the fundamental and geopolitical factors do not presuppose a strong and fast increase. H1 chart of GBP/USD On the one-hour chart, GBP ended the bullish correction and is ready to move to 1.1974, where the last local low is located. I believe that the pound will continue to fall regardless of any data and "fundamentals", but this week there will be important reports and events, so they may also have a certain impact on the pair's movement. On Monday, important levels are seen at: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2288, 1.2342. The Senkou Span B (1.2188) and Kijun Sen (1.2076) lines can also be sources of signals. Pullbacks and breakouts through these lines may produce signals as well. A Stop Loss order should be set at the breakeven point after the price passes 20 pips in the right direction. Ichimoku indicator lines may move during the day, which should be taken into account when determining trading signals. In addition, the chart does illustrate support and resistance levels, which could be used to lock in profits. There are no important events or reports planned for in the UK and the US. Therefore, we might see weak movement and reduced volatility. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 09:00 2023-02-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/334907
Rates Spark: Crunch time

The EUR/USD Pair Is Still In Bearish Trend

Paolo Greco Paolo Greco 13.02.2023 10:36
M5 chart of EUR/USD On Friday, EUR/USD continued to fall and by the end of the day it was near its local lows. It failed to start a bullish correction and there's a high probability that the euro will continue to fall in the medium term. The pair remains too overbought, and the growth it's shown in recent months seemed unreasonable. Traders have already worked off all the bullish factors on the euro, and a correction has been brewing for more than a month. I believe that all factors are now in favor of the continuation of the quotes' decline. No fundamental and macroeconomic background on Friday. The only thing that stood out was the Consumer Sentiment Index from the University of Michigan, which was slightly above forecasts, but it did not have a strong impact on the pair's movement. The movements were purely technical. And not the best ones at that. At the European trading session, the pair showed several sharp reversals, and also crossed the critical line several times. Thus, false signals began to form immediately. Several of them were formed near the Kijun-Sen line. First of all, there were two buy signals, and they both failed to reach the nearest target level of 1.0762. Then there was a sell signal, which made it possible for traders to earn good profit, because by the end of the day, the pair was near the target level of 1.0669, if not for the two false buy signals before it. So, some traders could open a short position, but it was against the rules of the trading system. In general, the day didn't turn out quite great. COT report The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since early September. The euro started to rise around the same time. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. In the reporting week, non-commercial traders opened 9,500 long positions and 2,000 short ones. The net non-commercial position grew by 7,500. The number of long positions exceeds that of short ones by 134,000. There were no new COT reports in the last two weeks, and it's difficult to explain the cause exactly. So now we have to work with the data we have at our disposal. The correction was formed for a long time anyway, so it's clear even without the reports that the pair should continue falling. Read next: Amazon Is Slowly Dismantling Tony Hsieh’s Version Of Zappos, Louisa Vuitton Doubled Sales| FXMAG.COM H1 chart of EUR/USD On the one-hour chart, EUR/USD is still bearish. The quotes are currently located below the critical line, so the pair will likely fall. In order to fall further, the pair should overcome the 1.0658-1.0669 area. Fundamental and macroeconomic backgrounds are not the priority for now, since the price went up for a long time, often ignoring them. Now it is time for it to fall. On Monday, important levels are seen at: 1.0485, 1.0581, 1.0658-1.0669, 1.0762, 1.0806, 1.0868, 1.0938, as well as the Senkou Span B (1.0850) and Kijun Sen (1.0723) lines. Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. No important events in the EU and the US on February 13. So traders will have nothing to react to. The movements may not be attractive or volatile. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group   Relevance up to 08:00 2023-02-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/334891
Crude Prices Are Rallying After A Mixed Jobs Report Sent The Dollar Lower

Russia Has Announced To Cut Its Production By 500 000 Barrels Per Day, Equities Are Under Selling Presure

Swissquote Bank Swissquote Bank 13.02.2023 10:45
US equities recorded their worst week since the year started. Hawkish comments from many Federal Reserve (Fed) members hammers sentiment, as stress mounts before the much-important US CPI data due Tuesday. US CPI If US inflation hasn’t eased, or eased enough, or God forbid, ticked unexpectedly higher on yearly basis, we could rapidly see the post-NFP optimism, and the pricing on the goldilocks scenario to leave its place to fear and chaos. Fed At the start of the week, the activity on Fed fund futures hints at around 91% chance for a 25bp in the next FOMC meeting, and around 9% chance for a 50bp hike. Forex In the FX, the US dollar index finally cleared the 50-DMA offers on Friday - which I think could be premature if tomorrow’s US inflation number is sufficiently soft. A a wave of fresh buying in the Japanese yen also marked the latest mood in the currency markets, but didn’t last long. The EURUSD, on the other hand, slipped below its own 50-DMA. What’s next depends on the US dollar, as the US dollar is what leads the dance right now. Read next: Amazon Is Slowly Dismantling Tony Hsieh’s Version Of Zappos, Louisa Vuitton Doubled Sales| FXMAG.COM Energy market In energy, US crude oil jumped past the $80pb on Friday, as Russia announced to cut its production by 500’000 barrels per day, which is roughly 5% of its daily production. But gains remain limited by an overall bearish mood and recession fears, and offers remain strong into the 100-DMA, which currently stands near $81pb level. Watch the full episode to find out more! 0:00 Intro 0:27 Investors are tense before US inflation data due Tue 3:30 S&P500, Nasdaq: key technical levels to watch this week 5:27 FX update: USD up, euro, yen down 7:47 UK avoids recession, FTSE at record, BP tops £100bn valuation 9:09 Crude jumps on Russia, but 100-DMA still intact Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #inflation #data #Fed #expectations #EUR #JPY #GBP #FTSE #BP #crude #oil #Russia #output #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Deciphering the Economic Puzzle: Unraveling Britain's Mixed Signals

The Bank Of England Has To Strike A Balance Between Suppressing The Highest Prices In 10 Years And The Recession Of Its Own Economy

Marek Petkovich Marek Petkovich 13.02.2023 11:43
There will be no recession! Or will there be a recession, but later? Britain's economic growth of 0.1% in the fourth quarter, thanks to the activity of fans during the World Cup, allowed the country to avoid a technical recession. Nevertheless, most Wall Street Journal experts believe that GDP will contract in the first six months of 2023, followed by a sluggish growth. The Bank of England predicts that the economy will return to pre-pandemic levels no earlier than 2026, which is five years later than in the United States. The IMF calls Britain the weakest link in the G7. How can GBPUSD not fall in such conditions? You can try to solve problems, or you can postpone the solution in the hope that over time the difficulties will disappear by themselves. Even though the Bank of England raised the repo rate 10 times since the beginning of the monetary restriction cycle and brought it to the highest level since 2008, investors constantly felt that it is watching its back. A weak economy, which may deteriorate further due to aggressive tightening of monetary policy. As a result, the cost of borrowing in Britain rose only to 4%, and in the U.S. to 4.75%. Inflation in the United States slowed down from a peak of 9.1% to 6.5%, and in the UK, from 11.1% to 10.5%. The Fed is doing its job more efficiently than the BoE, and the latter is facing the same difficulties as before. Dynamics of British inflation The central bank has to strike a balance between suppressing the highest prices in 10 years and the recession of its own economy. Its indecision doesn't change the situation. Maybe they should follow the path of the Riksbank, which turned a blind eye to the recession in Sweden and accelerated the process of tightening monetary policy? Read next: Amazon Is Slowly Dismantling Tony Hsieh’s Version Of Zappos, Louisa Vuitton Doubled Sales| FXMAG.COM Moreover, along with high inflation in the UK, the average wage continues to grow. Bloomberg experts predicted that the figure accelerated to 6.5% in the fourth quarter. If we exclude 2021 with its recovery from the pandemic, it will be the highest value in history. Dynamics of average wages in Britain And the situation is unlikely to change dramatically in the near future: according to a survey by the Chartered Institute of Personnel Development (CIPD), 55% of recruiters planned to raise salaries in 2023 as they struggle to find and retain staff in a tough job market. The expected average salary has risen to 5%, the highest level since the beginning of record keeping. Against such a backdrop, the futures market's expectation of a repo rate ceiling of 4.25%, that is only 25 bps higher than its current value, looks more than modest. With CME derivatives giving a 90% chance of a federal funds rate hike above 5%, sterling's fall against the U.S. dollar looks logical. Technically, on the eve of important inflation releases in the U.S. and the UK, the GBPUSD pair took refuge in a consolidation in the 1.195–1.22 range. It makes sense to hold and increase short positions formed on growth to 1.2135 in the event of a breakthrough of the 1.195-1.1965 convergence zone.   Relevance up to 07:00 2023-02-18 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/334873
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

Saxo Bank Podcast: US CPI Ahead, What Might Happen If The Economy Re-Accelerates And More

Saxo Bank Saxo Bank 13.02.2023 12:04
Summary:  Today we look at the market narrative around the coming "landing" and what might happen if the economy re-accelerates and the market has to price in a "no landing" scenario. The key is the long end of the yield curve, which has remained very anchored for a few months. Elsewhere, we discuss the important US January CPI release coming up tomorrow, discuss Interesting stocks to watch as some vulnerable companies seek liquidity and Lyft craters in contrast to Uber's recent report, and look at earnings reports up today. Today's pod features Peter Garnry on equities, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next: Poland’s President Andrzej Duda Said The Decision To Send Fighter Jets To Ukraine Was “Not Easy To Take”| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: Podcast: What does a "no landing" scenario look like? | Saxo Group (home.saxo)
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

Situation Of US Dollar Is A Key Factor Lending Some Support To The NZD/USD Pair

TeleTrade Comments TeleTrade Comments 13.02.2023 12:22
NZD/USD rebounds over 50 pips from the daily low amid the emergence of some USD selling. A modest recovery in the risk sentiment weighs the buck and benefits the risk-sensitive Kiwi. Hawkish Fed expectations, recession fears should limit the USD downside and cap the major. The NZD/USD pair attracts some buyers near the 0.6290 area on Monday and climbs to a fresh daily high during the first half of the European session. The pair is currently placed just below mid-0.6300s, though remains well within a familiar trading band held over the past week or so. The US Dollar fails to capitalise on its modest intraday gains and turns out to be a key factor lending some support to the NZD/USD pair. A softer tone surrounding the US Treasury bond yields acts as a headwind for the greenback. Apart from this, an intraday recovery in the US equity markets further undermines the safe-haven buck and benefits the risk-sensitive Kiwi. That said, worries about a deeper global economic downturn should keep a lid on any optimism in the markets. Apart from this, the prospects for further policy tightening by the Fed could help limit any meaningful downside for the USD and cap the upside for the NZD/USD pair. This, in turn, warrants some caution for bulls and before positioning for further gains. Investors now seem convinced that the Fed will stick to its hawkish stance. The bets were reaffirmed by the Labor Department's annual revisions of CPI, which showed that consumer prices rose in December instead of falling as previously estimated. Separately, the University of Michigan survey's one-year inflation expectations climbed to 4.2% in February from the 3.9% previous. Read next: Poland’s President Andrzej Duda Said The Decision To Send Fighter Jets To Ukraine Was “Not Easy To Take”| FXMAG.COM This raises the risk of higher inflation print for January and dashes hopes for an imminent pause in the Fed's rate-hiking cycle. Hence, the market focus will remain glued to the crucial US CPI report on Tuesday. Heading into the key data risk, traders might refrain from placing aggressive bets around the NZD/USD pair in the absence of relevant economic data on Monday. Technical levels to watch remaining time till the new event being published U.S.: Leading Indicators
The Pound Is Now Openly Enjoying A Favorable Moment

GBP/USD Started The New Week In A Calm Way, EUR/USD Is Waiting For US CPI Report

Kamila Szypuła Kamila Szypuła 13.02.2023 13:11
The dollar approached a five-week high against its major peers on Monday, and investors increased their bets on the Federal Reserve staying on tight monetary policy longer. The most important event this week will be US consumer prices data released on Tuesday, which will strengthen expectations regarding Fed policy. Strong CPI data in the US would increase expectations for monetary policy tightening by the Federal Reserve, which would probably push the dollar up. USD/JPY USD/JPY started the new week at the level of 131.3470, and in the following hours it rose and broke through the level of 132.00. At the time of writing, USD/JPY is trading above 132.50. The asset is expected to refresh a four-day high above 132.00 as investors are extremely risk-averse ahead of the United States inflation report. In January, Japanese investors became net buyers of foreign bonds for the first time in five months as US bond yields fell in a sign that slowing inflation would prompt major central banks to slow down the pace of interest rate hikes. Japanese investors bought foreign bonds net worth 1.56 trillion yen ($11.79 billion) in January, according to data from Japan's Ministry of Finance, marking their biggest buying frenzy since September 2021. Read next: Poland’s President Andrzej Duda Said The Decision To Send Fighter Jets To Ukraine Was “Not Easy To Take”| FXMAG.COM EUR/USD On Friday, a preliminary consumer sentiment survey by the University of Michigan in February showed that annual expected inflation rose to 4.2% from 3.9% in February. The reading helped the US dollar stay strong against its rivals ahead of the weekend and forced EUR/USD to end the week in the red. Early Monday, the US Dollar Index holds strong and limits EUR/USD's gains. The EUR/USD pair started trading at 1.0684 this week. In the following hours, EUR/USD fell towards 1.0660 but rebounded above 1.0680. At the time of writing, the EUR/USD pair is trading at 1.0675. The European Commission raised the EU growth forecast for 2023. The European Commission noted that the EU economy entered 2023 in a better position than predicted in the autumn and raised its growth forecasts for this year to 0.9% in the euro area. The Eurozone looks set to avoid a technical recession, thanks in large part to falling gas prices and a solid labor market. The Commission has also lowered its inflation expectations, with headline inflation now expected to fall to 5.6% in 2023. GBP/USD The GBP/USD pair started the week at 1.2050. Similar to the Euro pair, the GBP/USD pair fell towards 1.2035 during the morning trading hours before rising above 1.2060 again. Currently, GBP/USD is trading at 1.2056. The market awaits this week's data, which could show that unemployment in the UK remained flat in December and weekly earnings rose less than in November. The British economy, similarly to the US, will publish inflation reports this week. UK is expecting inflation to fall. UK retail sales figures for January are expected to show that while consumers continue to spend less, the pace of decline in sales may have slowed in the new year. AUD/USD Markets expects RBA Chairman Philip Lowe to reinforce the bank's hawkish stance at parliamentary hearings this week. Reserve Bank of Australia (RBA) Governor Philip Lowe will testify before the Senate this week. Lowe will appear before the Senate Appraisals Committee on Wednesday, and then on Friday will give his semi-annual testimony to the House Economics Committee. In between these public appearances will be squeezed in employment data on Thursday. The central bank surprised markets last week by signaling at least two more rate hikes after raising the cash rate to a decade high of 3.35%. This stifled any talk of a break and led the markets to price in a final rate of 4.2% The AUD/USD Pair started the week close to 0.6900, where it fell below this level in the following hours. The Australian pair managed to break above 0.6915 and is currently trading above 0.6930. Source: investing.com, finance.yahoo.com
The USD/JPY Price Seems To Be Optimistic

Tomorrow The USD/JPY Pair Will Be In A Zone Of Price Turbulence

InstaForex Analysis InstaForex Analysis 13.02.2023 13:40
The dollar-yen pair is showing increased volatility. On Friday, sellers of USD/JPY updated the local low, reaching 129.84, whereas today, buyers are already testing the 132nd figure. Traders cannot determine the vector of price movement, but the pair fluctuates in a wide price range. The nervousness of market participants is quite understandable since tomorrow, February 14, the next Governor of the Bank of Japan will be known. Moreover, key data on the growth of Japanese economy in Q4 will be published on Tuesday. On top of everything else, a crucial inflation report will be released tomorrow in the USA, which will show the dynamics of consumer price index in January. All of these fundamental factors could cause serious price turbulence. Therefore, current price fluctuations of USD/JPY should be treated with great caution. Is Ueda not an ally of the yen? Last week, the Japanese currency strengthened its position throughout the market after Bank of Japan Deputy Governor Masayoshi Amamiya turned down offer to succeed current Governor Haruhiko Kuroda. His candidacy was to be submitted to Parliament for approval on February 10. Amamiya is a supporter of a soft monetary policy, so his decision not to run for the position of the head of the central bank had an impact on USD/JPY: on Friday, the price updated the weekly low, denoting around the 129th figure. Moreover, the Japanese media (Nikkei Asia in particular) announced the name of the new favorite of the election race: according to the insiders, on February 14, the government will nominate Kazuo Ueda, who was a member of the Governing Council of the Bank of Japan. Initially, the market was dominated by the view that he was more hawkish than Kuroda. However, it turned out later on that was not the case. At least in his brief interview to Reuters, Ueda called the Bank of Japan's policy "adequate." In his opinion, Japanese regulator should continue to implement accommodative policy "by making logical decisions and clearly explaining its position." Such comments disappointed sellers of USD/JPY, so it is not surprising that today the pair is already testing the area of the 132nd figure. However, only journalists have "appointed" Ueda so far: government officials have not commented on the information about his candidacy. Moreover, some analysts urge not to make hasty conclusions and treat media reports with great caution. According to them, in the past, the government eventually nominated other candidates amid harsh criticism of the candidate "announced" by journalists or other political reasons. Therefore, the intrigue remains here, which means that the growth in the price of USD/JPY looks unsteady. Note that the last meeting of the Bank of Japan under the leadership of Kuroda will take place on March 10, and the first meeting of the central bank under its new head will be held on April 28. Read next: GBP/USD Started The New Week In A Calm Way, EUR/USD Is Waiting For US CPI Report| FXMAG.COM Important releases on Tuesday Japan's economic growth data for Q4 2022 will be released on February 14. In Q3, Japan's GDP took an unexpected downturn. The drop in the economy was mainly due to higher prices, which had a negative impact on household spending in the country. Also the downward dynamics was due to the weakening of the yen against world currencies. Since fall last year, the yen has appreciated by more than 2,000 points against the dollar. But inflation in Japan still continues to update multi-year records. According to the latest data, the country's overall consumer price index rose to 4.0%, excluding food and energy prices by 3.0%, and corporate goods price index jumped by 10.2%. At the same time, according to the forecasts of most experts, Japanese economy will show growth in the fourth quarter, leaving the negative area (growth by 0.5% is estimated). While the GDP deflator index may jump to 1.1% (the indicator will rise above zero for the first time since 2020). If the above indicators come out at the forecast level, the yen may receive support, as the market will again increase hawkish expectations regarding possible decisions of the Bank of Japan in the second half of the year. Conclusions Tomorrow, the dollar-yen pair will be in a zone of price turbulence. In addition to the Japanese government's personnel decisions and the Japanese GDP growth data, there will be a report on Tuesday on the Consumer Price Index growth in the USA. Such major fundamental factors can trigger a volatility storm, and it is impossible to foresee the price movement vector here. That is why, for the time being, it would be best to maintain a wait-and-see attitude in the USD/JPY pair, as the high-profile events of Tuesday might "redraw" the fundamental picture considerably.   Relevance up to 10:00 2023-02-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/334921
InstaForex's Ralph Shedler talks Euro against Japanese yen

Markets Saw Kauza Ueda's Appointment As A Signal To Change Policy Of BoJ But Ueda Himself Suppressed This View

Kenny Fisher Kenny Fisher 13.02.2023 14:18
The Japanese yen has started the week with sharp losses. In the European session, USD/JPY is trading at 132.54, up 0.86%. Japan’s GDP expected to rebound There are high hopes for the Japanese economy, which is expected to climb by 2% in the fourth quarter, following a 0.8% decline in Q3. Japan reopened to tourists in October, which fueled a recovery in the services sector and this will likely boost GDP. Even so, the economy has headwinds to deal with such as higher inflation and a weaker global economy, which will likely weigh on growth in 2023 Q1. Ueda to take over at BoJ There has been a guessing game over the successor to Haruhiko Kuroda as Governor of the Bank of Japan and press reports about a successor have generated plenty of volatility from the Japanese yen. Last week, a report that Deputy Governor Masayoshi Amamiya had been approached for the position sent the yen briefly lower, as Amamiya is considered a dove. Amamiya declined the offer and in a surprise move, the BoJ has decided to appoint Kazua Ueda. The news initially resulted in yen buying, as the markets viewed the choice as a signal for fresh thinking and a change in policy. This view was quickly dampened by Ueda himself, who said on Friday that current policy settings were appropriate. This has sent the yen sharply lower on Monday. Ueda may be trying to sound diplomatic in order to avoid any waves ahead of his appointment, and it’s very possible he will tighten policy once he’s in charge. In the meantime, the BoJ is expected to maintain its ultra-loose policy, so the yen won’t be getting any help from the BoJ for the time being. Read next: GBP/USD Started The New Week In A Calm Way, EUR/USD Is Waiting For US CPI Report| FXMAG.COM USD/JPY Technical USD/JPY has support at 131.38 and 130.71 There is resistance at 132.96 and 134.18 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Australian dollar was boosted by record low Australian unemployment rates, historical local budget surplus and a surprising resumption of cash rate

The Bulls Od The AUD/USD Pair Will Try To Move Into The Target Range

InstaForex Analysis InstaForex Analysis 14.02.2023 08:01
Yesterday, the Australian dollar bounced from the support of the MACD line and closed the day up by 47 pips. The price edged down this morning, and the Marlin oscillator shows the intention to turn down as it approaches the neutral zero line. The first sign of its intention to turn down is when the price crosses the MACD line (0.6910). A confirmation is when it crosses the support of 0.6873, which is the January 19 low. In case it succeeds, the 0.6730 target will become available. On the four-hour chart, the price turns down from the MACD indicator line. The Marlin oscillator intends to move into the area of the downtrend for the second time. If the reversal does not succeed, after the price overcomes the 0.0712 high on February 9, the bulls will try to move into the target range at 0.7090-0.7130.   Relevance up to 03:00 2023-02-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/334983
Bank of England hikes rates and keeps options open for further increases

The GBP/USD Price Will Rise To The Nearest Resistance Level

InstaForex Analysis InstaForex Analysis 14.02.2023 08:03
Since the dollar weakened yesterday (-0.30%), the pound rose by 82 points. The price stopped at the resistance of 1.2155. The signal line of the Marlin oscillator is still in the red zone, but if the price simultaneously moves above 1.2155 and oscillator moves into the green zone, the price will rise to the nearest resistance of 1.2275 - to the MACD line on the daily chart. If the same coordinated reversal of the price and the oscillator happens, the price will head towards the support of 1.1900. The first sign of the reversal is when the price crosses the support line of the MACD line on the four-hour chart around 1.2100. A confirmation of the reversal is when the price crosses yesterday's low at1.2030.     Relevance up to 03:00 2023-02-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/334985
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The Euro (EUR) Continued To Move Sideways

InstaForex Analysis InstaForex Analysis 14.02.2023 08:05
The market was calm on Monday, without any upbeat news, the euro could not overcome the technical support at 1.0660, yesterday's growth was 45 pips. The euro continued to move sideways in the 1.0660-1.0758 range. The best thing that the euro can do for the bearish scenario is to pierce the upper limit of the 1.0758/87 range. If the euro settles above the MACD line (above 1.0820), the alternative option is for the price to rise to 1.0990. I expect the price to cross 1.0660 and fall further to 1.0595. On the four-hour chart, the signal line of the Marlin oscillator is in the green zone. This will help the price and if it doesn't overcome the nearest resistance, then it will linger in the sideways movement. At the moment, time is not on the euro's side, since the MACD line is getting closer to the price with each candle, and it increases the pressure.   Relevance up to 03:00 2023-02-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/334987
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

Analysis Of The NZD/USD Currency Pair Movement

InstaForex Analysis InstaForex Analysis 14.02.2023 08:07
If we pay attention on its 4 hour chart NZD/USD commodity currency pairs, there is a few interesting facts: 1. The appearance of Ascending Broadening Wedge pattern, 2. Followed by the formation of Bearish 123 pattern. 3. Stochastic Oscillator indicator which trying to come back down from its Overbought level. Based on those three facts above clearly seen if Kiwi in the nearest future has the potential to continue the downside where currently "Isolated Low" level which is point 2 at the level 0,6286 will try to break down by NZD/USD. If this level successfully broken down then the next level the to aim for is 0.6208 with a note that during the journey to these levels there is no significant upward correction movement to break above 0.6386 because if this level is breaks and exceeded then the downside scenario that has been described Previously it was canceled by itself.   Relevance up to 04:00 2023-02-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/119399
Forex: Euro against US dollar - forecast on April 24th, 2023

The EUR/USD Pair Has Potential For Further Downside Movement

Oscar Ton Oscar Ton 14.02.2023 08:12
Technical outlook: EURUSD might be pulling back towards the 1.0800-50 area before turning lower again. The single currency pair is seen to be trading close to 1.0735 at this point in writing as the bulls prepare to push further. Prices have carved an Engulfing Bullish candlestick pattern on the daily chart indicating a potential short-term counter-trend rally in the near term. EURUSD is facing intraday resistance at 1.0800 and up to 1.0880 as the bears remain inclined to come back in control. The downside potential is seen through 1.0500 and 1.0100 as marked on the daily chat here (Red). Also, note that the Fibonacci 0.618 retracement of the entire rally between 0.9535 and 1.1025 is passing through 1.0100, hence a high probability remains for a bullish reversal. EURUSD faces resistance at 1.1025; while support comes in around 1.0481 as seen on the chart here. A break below 1.0481 will confirm further downside potential and open the door towards 1.0100. A continued break below 0.9860 will confirm that the larger-degree trend has turned lower and prices could drop below 0.9535. Trading idea: Potential bearish move against 1.1025 Good luck!   Relevance up to 05:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/312542
Federal Reserve preview: A final hike as US recession fears mount

The Bulls Of The US Dollar Index Might Be Preparing To Come Back In Control

Oscar Ton Oscar Ton 14.02.2023 08:14
Technical outlook: The US dollar index turned lower from a 103.50 high on Monday and printed a 102.78 low early on Tuesday. The index is seen to be trading close to 102.80 at this point in writing as the bulls might be preparing to come back in control. The potential near-term target is seen towards 104.00 and 104.75 as marked on the 4H chart here (Red). The US dollar index has either completed its first wave between 100.50 and 103.60 or could be near terminating after a push higher one last time through 104.00-75. Near-term resistance is seen at 105.35 as displayed on the chart here and could be taken out as the bulls prepare to push through the lower-degree rally from current levels around 102.80. The trading instrument is unfolding a larger-degree corrective rally towards 106.50 and up to 109.50 as discussed earlier. The first wave is underway from 100.50 and could terminate close to 105.35. We can expect the second wave to dip lower again before the final rally towards 109.50 could resume. Trading idea: Potential rally against 100.00 Good luck!     Relevance up to 05:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/312544
The EUR/USD Pair Consolidated In The Downward Trend Area

The European Currency (EUR) Should Continue To Depreciate

Paolo Greco Paolo Greco 14.02.2023 08:18
On Monday, the EUR/USD currency pair adjusted once again to the moving average line, but it has yet to overcome it. The pair did not remain still, yet their movement was neither resonant nor trend-forming. Simply a regular local upward trend with no specific justification. We think it makes sense at this point to try to see the big picture while removing yourself from specific macroeconomic reports. From our perspective, the European currency should continue to depreciate because it has grown excessively and for an extended period. It might emerge from the overbought state after falling 200–300 points, at which point it will be possible to discuss its growth prospects. However, it is still too high right now. It is important to comprehend the following point. There is a trend (such as the downward one over the past two years), and as a result, the pair moves in a certain direction for very particular reasons. Due to traders closing deals in line with the trend, the trend ends and the correction starts. In other words, the pair is moving in opposition to one another, but it appears to be doing so randomly. Therefore, just 50% of the recent increase in the value of the euro was warranted. Therefore, it is important to consider the essential background in general. Additionally, it demonstrates how well-positioned the US economy is given the current situation. The labor market is strong, the recession has not yet begun, and unemployment is at its lowest level in 50 years. Undoubtedly, certain individual signs could use improvement. Everything in the European Union is not entirely awful either. Although neither the economy nor unemployment has entered a recession, it is important to keep in mind that the key rate in Europe is considerably lower than in America. Even with low oil and petrol prices that made it possible to escape an energy crisis, there will be an economic slowdown if the ECB rate rises further (which is not inevitable). Waiting for an inflation-related resonance value is no longer worthwhile. Reports on inflation are still crucial for the market, but they are starting to mean different things now. It is a truth that inflation cannot go down each month. Since the Fed substantially tightened monetary policy last year, the rate of inflation has fallen six times in a row, each time rather sharply and quickly. But this situation cannot continue forever. Oil and petrol prices won't stay low indefinitely because the Fed is no longer raising the rate by 0.75%. Therefore, at best, we can expect an inflation decrease of 0.2-0.3% per month. There may be months when the consumer price index doesn't indicate any slowdown at all. The point is that while inflation is getting closer to the desired level, it can still be another year before it is achieved. And it's all right. A slight decrease in inflation cannot be viewed as an insufficient outcome of the Fed's efforts. Additionally, minor changes in inflation won't cause a significant market response. Simply said, it makes little sense for the Fed to raise the rate much higher than the current levels. Now, the regulator will move cautiously. Another rate increase will be feasible, for instance, if inflation does not slow down or does so only slightly for a period of two to three months. However, none of these adjustments will significantly alter either inflation or monetary policy. We believe that the pair of the euro and the dollar is entering a lengthy phase of consolidation. In other words, a 24-hour TF is capable of a flat or "swing." An assertive stance by the ECB is required to maintain the expansion of the euro. However, the ECB has already slowed down the pace of tightening itself and can do so again in a single meeting, demonstrating its opposition to such a strategy. Therefore, we think that the euro has almost certainly reached the end of its growth potential. In any case, it is pointless to discuss purchases at this time because the pair is trading below the moving average. As of February 14, the euro/dollar currency pair's average volatility over the previous five trading days was 74 points, which is considered to be "normal." So, on Tuesday, we anticipate the pair to move between 1.0659 and 1.0807. The Heiken Ashi indicator's downward turn will signal the start of a new downward movement. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trading Advice: The EUR/USD pair is still moving south. When the Heiken Ashi signal turns down, we can now consider opening new short positions with targets of 1.0659 and 1.0620. After the price is stabilized back above the moving average line, long positions can be initiated with targets of 1.0807 and 1.0864. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 04:00 2023-02-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/334991
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

The Outlook Of Price Of The EUR/USD Pair

Torben Melsted Torben Melsted 14.02.2023 08:20
EUR/USD moved lower as expected and printed a low at 1.0655 just above our ideal target of 1.0650. The following break above minor resistance at 1.0707 confirms that wave 4 has been completed and wave 5 higher towards 1.1391 now is in progress. As we expect, wave 5 to be in motion also means that the 1.0655 low must not be broken again or we will have to review our preferred count. Now, a break above resistance at 1.0791 will add confidence in our count of wave 5 being in motion and the expected move higher towards 1.1391.   Relevance up to 07:00 2023-02-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/312554
US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

Tesla Believes That Revenue Will Grow 28% To A New Record, The Bank Of England Hinted That The 50bps Rate Hike May Have Been Their Last

Saxo Bank Saxo Bank 14.02.2023 08:48
Summary:  Today is the U.S. CPI day which may set the near-term directions of the stock, bond, and forex market. Investors are cautious about the additional uncertainties from the impact of the new CPI compilation methodology and seasonality. U.S. equities rallied and bond yields slipped modestly. Oil prices were lower as US announced plans to sell more crude from its strategic reserves. Japanese Yen extends weakness awaiting the official announcement of the nomination of Ueda as the new BOJ governor. Hong Kong’s Hang Seng was dragged by rights offering from Link REIT.   What’s happening in markets? US equities (US500.I and USNAS100.I) rallied as inflation expectations dropped After S&P500 made its biggest weekly drop in 2023 last week, US stocks started the week in positive territory, with the S&P500 gaining 1.1% and Nasdaq 100 advancing 1.6%, supported by the New York Fed Survey of Consumer Expectations that showed expectations for household income expectations falling from 4.6% to 3.3%. That’s the largest one-month drop in the nearly 10-year history of the series. We’ve seen investors cautious ahead of US inflation data being released on Tuesday and that may be hotter than expected, with a new CPI weighting being used. All but energy within the 11 S&P 500 sectors gained on Monday, led by information technology, consumer discretionary, and consumer staple. Microsoft was one of the best performers, up 3% on Monday as analysts were upbeat on the tech giant’s growth potential. Twilio gained 2.1% following the announcement to cut 17% of its workforce. Tesla flashes red signals after a record rally; meaning some of its gains could be unwound Tesla was one of the weakest in mega caps on Monday, while suffering its biggest two-day fall since January, losing 6.1%. Tesla shares have been bouncing off their lows and were up as much as 100% from their January 2023 lows, but now investors are trimming gains and Tesla is trading 93% above its low. The market believes the Fed will pause rate hikes in Q2 which supported buying in Tesla, while the company pledged to roll-ahead with scaling up production targets. Consensus believes in 2023 Tesla’s revenue will grow 28% to a new record, with EBITDA expected to swell 20% also to a new record, with 12.5% EPS growth. But, from a technical perspective, Tesla’s relative strength index (RSI) is showing the stock is now in the overbought territory - that could signal a potential reversal. The last time Tesla was this overbought was in November 2021 amid tech enthusiasm. The long end of US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) was well bid In a quiet and choppy session, yields on the 2-year finished unchanged while yields on the 10-year were 3bps richer. The terminal Fed Fund rate, as being priced in by the market, edged up to 5.23%. Fed Governor Michelle Bowman said the Fed is “still far from achieving price stability” and she expects that “it will be necessary to further tighten monetary policy”.  Traders are cautiously waiting for the much-anticipated CPI report today. Hong Kong’s Hang Seng (HIG3) pared losses and China’s CSI300 (03188:xhkg) gained on consumer stock strength Hang Seng Index slipped 0.1%, as shares of Hong Kong local property developers tumbled across the board dragged by a 12.8% collapse in Link REIT (00823:xhkg). The largest REIT in Hong Kong that operates shopping centers and real estate retail spaces announced a rights offering for HKD19.3 billion at a 30% discount to its previous close. New World Development (00017:xhkg) plunged 6.7%; Henderson Land Development (00012:xhkg) declined 4.8%; Wharf Real Estate (01997:xhkg) lost 2.9%. The benchmark index clawed back most losses as Chinese consumer names rallied, with China Resources Beer (00291:xhkg) up 4.9%, Haidilao (06862:xhkg) up 4.7%, Budweiser Brewing ( 01876:xhkg) up 3%, and Li Ning (02331:xhkg) up 2.4%, China Mengniu (02319:xhkg) up 2.2%. Chinese hotpot restaurant chain, Xiabuxiabu (00520:xhkg) surged 8.6%. In A-shares, CSI300 advanced by 0.9% led by Chinese white liquor, beverage, beauty care, marine equipment, and construction materials. Kweichow Moutai (600519:xssc) gained 2.6%. FX: Yen weakness extends despite yields cooling off, commodity currencies gain Dollar gains cooled off slightly on Monday as traders positioned for US CPI release due today, and risk assets rallied with gains in US yields cooling off after the recent run higher. Michelle Bowman added to the Fed chorus insisting on more rate increases to rein in inflation, saying "we are still far from achieving price stability. But the Japanese yen was still pressured lower, and USDJPY took a look above 132.50 as expectations of BOJ governor candidate Ueda altering the policy stance retreated. Upbeat risk sentiment lifted NZDUSD to 0.6360 from sub-0.63 levels earlier in the day, while AUDUSD drifted towards the key 0.70 level as well but calls for RBA governor Lowe’s resignation may keep the gains in check. GBPUSD back higher to 1.2150 and labor market data is on tap today. EURUSD back above 1.0720. Aussie dollar moves back toward 0.70 with commodities moving up The Aussie moved up 0.7% after the US dollar fell back, while commodity prices rose - also supporting the Aussie dollar. Notably, metal prices have been declining for week but moved up overnight, with Copper up 1%. The next catalyst for the AUDUSD pair will be if business confidence out today, is strong expected - it could trigger more upside. Plus the market would want to see stronger than expected Australian employment data for January- on Thursday, to also support the risk-on rally. But there is a risk, AU jobs data won’t be as strong as expected by the market, given the lag interest rates effects in Australia. 20,000 jobs are forecast to have been added, with steady unemployment rate. The Australian bond market suggest less caution is in the air, with the Australian 10-year bond yield down to 3.74% (highest levels since January). But the major catalyst will be the strength of the USD - that could change direction for the AUDUSD pair. Crude oil (CLH3 & LCOJ3) prices choppy as supply fears ease Crude oil prices started the day trying to move higher as traders assessed the impact of Russia’s supply cuts. However, the importance of Russia’s energy supplies has gone down over the last year as Europe has diversified its energy sources and Russia’s oil and gas has continued to flow around the world at discounts of well over 30%. This helped ease fears of a supply shock, also helped by US planning to sell 26mn barrels of oil from its strategic reserves. WTI prices dropped from over $80/barrel to ~$79 while Brent was below $87. The UAE said markets remain balanced and OPEC+ producers don't need to intervene. Elsewhere, the US shale industry remains reluctant to ramp up drilling activity despite strong cash flows.  Read next: GBP/USD Started The New Week In A Calm Way, EUR/USD Is Waiting For US CPI Report| FXMAG.COM What to consider? Japan’s Q4 GDP comes in below expectations Japan's economy grew an annualised 0.6% in the final three months of 2022, bouncing back from the previous quarter's revised contraction of -1.0% but still coming in below expectations of a 2% gain. The return of inbound tourists offset a slowdown in capital expenditure and exports. With economic momentum still weak, new BoJ governor Ueda will continue to face a challenging task in shifting away from the ultra-loose monetary policy. US CPI on the radar - volatility risks higher with uncertain impact of new methodology While investors firmly believe that inflation is on a downward trajectory, month-on-month variations still remain on watch. More importantly, this month brings a change in methodology, which adds further uncertainty to the release. If we take the last few month’s revisions for core CPI into account based on the new methodology, there is reason to believe that the new weights could mean an upward push to inflation. Average core CPI for the last three months of 2022 has gone up from 3.1% to 4.3% with the new seasonal factors released by the BLS. Fed whisperer Nick Timiraos, a WSJ reporter, is warning of a potential upside surprise in January US CPI data due to seasonality. Moreover, milder weather in January compared to December, as well as an upward swing in jobs, could mean demand pressures picked up further traction. Bloomberg consensus expects headline CPI to soften to 6.2% YoY from 6.5% YoY in December, while the MoM picks up to 0.5% from a revised +0.1% previously. January CPI data will be out today at 2130 SGT. UK labor market data due today The Bank of England hinted at the February meeting that the 50bps rate hike may have been their last. This week’s inflation, jobs and retail sales data will however be key to determine if another hike may be seen in March. Labor data is out on Tuesday, and expected to continue to show a tight labor market. The unemployment rate over the last quarter is likely to remain unchanged at 3.7% as per Bloomberg consensus while the employment gains are expected to pick up to 43k from 27k previously. Wage pressures are also expected to sustain with average weekly earnings up 6.2% YoY in the December quarter from 6.4% before. Singapore’s budget today may look at post-Covid fiscal strategy Singapore’s annual budget will be presented today and measures may be taken to phase out Covid-era stimulus as the economy looks to re-balance spending towards longer-term goals. Still, inflation remains high and the low-income groups will likely continue to get support. Still, long-term focus on green transition and digitization is likely to be a key theme. This could bring companies like Sembcorp and Keppel Corp into favor due to their push to reduce carbon emissions. EV adoption push is also likely, helping ComfortDelGrow due to their increasing fleet of EVs. Lithium giant Albemarle earnings ahead This week, the world's biggest lithium company, Albemarle reports earnings. Given its size and scale - with it selling to most EV makers including - Toyota, Ford, Mercedes, GM, Hyundai, Kia, Nissan, Tesla and Renault – we think Albemarle will be a proxy for what we can expect from lithium companies' earnings. Consensus expects operating profits to have improved and rise to $1.05 billion. EBITDA is expected to grow to $1.22 billion, while net debt is expected to drop, with adjusted EPS forecast to grow to 8.19. Coco-Cola reports today Investors can get more information about the state of U.S. consumers and margin trends in consumer staples from the results and management’s comments on the business outlook from Coco-Cola (KO:xnys) today.   For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.       Source: Market Insights Today: All eyes on US CPI today – 14 February 2023 | Saxo Group (home.saxo)
The Indian Rupee Pair Takes Clues From The Receding Fears Of Hawkish Fed Rate Moves

The Indian Rupee (INR) Bulls Are Likely To Remain Solid

TeleTrade Comments TeleTrade Comments 14.02.2023 08:57
USD/INR is aiming to deliver a break above 82.60 as the USD Index is eyeing more weakness.  The market mood is upbeat as investors have digested the consequences associated if US inflation delivers a surprise jump. To tame core inflation, the RBI might hike its repo rate further by 25bps. The USD/INR pair is struggling to extend above the immediate resistance of 82.60 in the Asian session. The upside move in the asset looks favored as the US Dollar Index (DXY) has recorded a fresh day’s low at 102.81. The USD Index is looking for more downside as the overall market sentiment is extremely positive. Investors have digested the consequences associated if United States inflation delivering a surprise jump after declining meaningfully for the past six months consecutively. Therefore, the demand for risk-perceived assets has improved dramatically. S&P500 futures have recovered some of their losses, portraying a recovery in the risk appetite theme. The demand for US government bonds is escalating vigorously, which has trimmed the return generated on the 10-year US Treasury yields to 3.70%. On an overall note, the street is worried that a surprise rise in the core Consumer Price Index (CPI) could force the Federal Reserve (Fed) to maintain higher interest rates for a longer period. Ace editor of the Wall Street Journal (WSJ) Nick Timiraos cited the Federal Reserve’s (Fed) research paper titled, “Residual Seasonality in Core Consumer Price Inflation: An Update,” to justify his expectations stating, “Core inflation has generally come in higher in the first of the year than the second half of the year.” Read next: GBP/USD Started The New Week In A Calm Way, EUR/USD Is Waiting For US CPI Report| FXMAG.COM Meanwhile, the Indian Rupee bulls are likely to remain solid as the Reserve Bank of India (RBI) might look for tightening the policy further to impact the core inflation. Economists at Commerzbank see at least another 25 bps hike in the first half this year and possibly even 50 bps particularly if domestic demand remains firm and core inflation fails to cool. This should provide some support for INR. Meanwhile, the oil price has turned sideways above $79.00 ahead of the release of the US inflation data. It is worth noting that India is one of the leading importers of oil in the world and volatility in oil prices impacts the Indian Rupee critically. remaining time till the new event being published U.S.: Leading Indicators
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The Loonie Pair (USD/CAD) Probes The Two-Day Losing Streak At The Lowest Levels

TeleTrade Comments TeleTrade Comments 14.02.2023 08:59
USD/CAD holds lower ground at weekly bottom, pressured after two-day downtrend. Clear downside break of key EMA, Fibonacci retracement join looming bear cross on MACD to lure bears. Monthly resistance line, descending trend line from October challenge pair buyers. USD/CAD remains depressed around 1.3330 even as bulls and bears jostle during early Tuesday, due to the market’s inaction ahead of the key US inflation data. In doing so, the Loonie pair probes the two-day losing streak at the lowest levels in more than a week. It’s worth noting that the quote’s sustained downside break of the 100-day Exponential Moving Average (EMA) and the 61.8% Fibonacci retracement level of the September-October upside joins a looming bear cross on the MACD to keep USD/CAD sellers hopeful. As a result, a convergence of the ascending trend line from mid-November and the 200-day EMA, around 1.3270 by the press time, gains major attention. Should the pair offers a clear downside break of the 1.3270 key level, the last November’s low near 1.3225 may act as a validation point for the south-run targeting the September 2022 bottom surrounding 1.2955. It should be observed that the 1.3100 and the 1.3000 round figures may act as intermediate halts during the anticipated fall. Meanwhile, the stated key Fibonacci retracement level, also known as the golden ratio, guards immediate USD/CAD rebound near 1.3345, a break of which highlights the 100-day EMA level of 1.3410. Following that, a descending resistance line from January 19 and a four-month-old downward-sloping trend line, respectively around 1.3455 and 1.3530, could challenge the USD/CAD bulls. USD/CAD: Daily chart Trend: Further downside expected remaining time till the new event being published U.S.: Leading Indicators
UBS buys Credit Suisse for $3.2bn. Last week was the worst one for equity markets in 2023

The USD/CHF Pair Is Expected Further Downside Movement

TeleTrade Comments TeleTrade Comments 14.02.2023 09:03
USD/CHF takes offers to renew intraday low, stretching pullback from weekly top. Clear downside break of short-term key trend line, SMA joins downbeat oscillators to favor bearish bias. Recovery remains elusive unless crossing five-week-old resistance line. USD/CHF prints mild losses around 0.9180 heading into Tuesday’s European session, stretching the previous day’s downside break of the key support ahead of the all-important US inflation data. Not only the downside break of the 100-SMA and a two-week-old ascending trend line but bearish MACD signals and downbeat RSI (14), not oversold, also favor the USD/CHF bears. That said, a horizontal area comprising multiple levels marked since January 09, close to 0.9165-60, appears imminent support for the Swiss currency pair to test. Following that, the 0.9100 round figure and the previous monthly low near 0.9085 could act as intermediate halts before directing the USD/CHF bears toward the monthly bottom surrounding 0.9060. Meanwhile, recovery moves appear elusive unless crossing the convergence of the 100-SMA and the aforementioned support line, close to 0.9210. Even if the USD/CHF manages to stay firmer past 0.9210, a downward-sloping resistance line from January 06, near 0.9260, could act as the last defense of the pair bears. Overall, USD/CHF remains bearish as traders brace for the key US inflation data. However, the downside room appears limited. USD/CHF: Four-hour chart Trend: Further downside expected remaining time till the new event being published U.S.: Leading Indicators
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

The New Zealand Dollar (NZD) Is Continuously Facing Pressure

TeleTrade Comments TeleTrade Comments 14.02.2023 09:07
NZD/USD is looking to stretch its recovery move above 0.6350 amid the risk-on mood. Federal Reserve might remain favored for policy tightening continuation despite inflation softening ahead. Reserve Bank of New Zealand inflation expectations has dropped to 3.30% from the prior release of 3.62% for two years from now. NZD/USD is oscillating in an Inverted Flag that favors the downside on a broader basis. NZD/USD has rebounded firmly after a corrective move to near 0.6330 in the Asian session. The Kiwi asset is looking to stretch its recovery move above the immediate resistance of 0.6350 as the US Dollar Index (DXY) has extended its downside to near 102.77. Considering the downside pressure in the USD Index ahead of the release of the January inflation report, it is likely that investors are highly confident that the annual Consumer Price Index (CPI) will continue its declining trend consecutively for the seventh time. S&P500 futures are demonstrating a subdued performance, portraying a minor caution for fresh buying. However, the upside strength shown by the 500-US stocks basket on Monday indicates that the risk appetite theme is extremely solid. The demand for US government bonds is escalating vigorously, which has trimmed the return generated on the 10-year US Treasury yields to 3.70%. Annual US Inflation looks to trim consecutively for the seventh time From the whooping figure of 9.1%, the headline inflation in the United States has already come down to 6.5% in January and investors are expecting further decline as higher interest rates have forced the firms to scale down their production activities. Analysts at RBC Economics expect CPI growth to edge down to 6.2% in January from 6.5% in December (YoY). Food price growth likely also continued to slow, albeit from very high levels. By contrast, we expect energy price growth to tick up for the first time in 7 months – though to an 8% rate that is still well below a June peak of 42%. We look for core inflation to slow further in January, coming in at 5.4% YoY, down from 5.7% in December. All told, recent inflation reports have pointed to a relatively broadly-based easing in price pressures.” Another school of thought believes that the Consumer Price Index (CPI) could deliver a surprise move as the labor market has remained upbeat in January month. Higher demand for labor is contained by offering them higher wages, which carries the potential of propelling the overall consumer spending as households will be equipped with more funds for disposal. Meanwhile, the Federal Reserve Bank of New York's monthly Survey of Consumer Expectations showed on Monday that the US consumers' one-year inflation expectation stayed unchanged at 5% in January. Federal Reserve to continue sound hawkish despite softer CPI release The street is laser-focused on the release of the price index data as it will provide meaningful cues for further monetary policy action by the Federal Reserve. Fed chair Jerome Powell has already cleared that inflation is stubborn in nature and a premature consideration of pausing rates or cutting them could paddle up the inflationary pressures again. No doubt, December’s economic indicators were in favor of a policy tightening pause, however, the stronger-than-anticipated US Nonfarm Payrolls (NFP) stole the spotlight. For interest-rate guidance, Fed Governor Michelle Bowman said on Monday the Fed will continue to raise interest rates, pointing out there will be a lot of data releases between now and the next policy meeting. Read next: Poland’s President Andrzej Duda Said The Decision To Send Fighter Jets To Ukraine Was “Not Easy To Take”| FXMAG.COM RBNZ to consider mega rate hike despite slowing inflation projections The Reserve Bank of New Zealand (RBNZ) has been hiking its Official Cash Rate (OCR) significantly to decelerate the pace of price pressures. After recording a multi-decade high of 7.3%, New Zealand’s inflation dropped marginally to 7.2% in the fourth quarter of CY2022. Led by higher interest rates from Reserve Bank of New Zealand Governor Adrian Orr, employment opportunities have slowed down and the Unemployment Rate has increased to 3.4%. Also, inflation expectations reported by the Reserve Bank of New Zealand have dropped to 3.3% on a quarterly basis from the former release of 3.62% for two years from now. In spite of the indicators favoring further exhaustion in the inflationary pressures, the Reserve Bank of New Zealand might continue to hike interest rates with a big number. The inflation rate is extremely skewed upside from the desired rate of 2%. Therefore, a decision of bumper interest rate hike cannot be ruled out. NZD/USD technical outlook NZD/USD is oscillating in an Inverted Flag chart pattern on a four-hourly scale. The chart pattern indicates a sheer consolidation that is followed by a breakdown. Usually, the consolidation phase of the chart pattern serves as an inventory adjustment in which those participants initiate shorts, which prefer to enter an auction after the establishment of a bearish bias. The New Zealand Dollar is continuously facing pressure from the 50-period Exponential Moving Average (EMA) at 0.6355, which indicates more weakness ahead. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00, which indicates that investors await a potential trigger for a decisive move.     search   g_translate    
The USD/JPY Price Reversed From The Lower Limit

Fears Of The US-China Tension Over The Balloon Shooting Put A Floor Under The USD/JPY Price

TeleTrade Comments TeleTrade Comments 14.02.2023 09:11
USD/JPY prints mild losses while reversing from monthly high. Treasury bond yields remain pressured amid market’s indecision ahead of the key US CPI. Mixed Japan GDP gained little attention as Ueda’s nomination as BoJ leader appears hawkish. USD/JPY bounces off intraday low but remains stuck with mild losses near 132.00 amid early Tuesday morning in Europe. The Yen pair initially cheered the pullback in the Treasury bond yields before the Japanese government’s announcements of Bank of Japan (BoJ) officials triggered hawkish concerns and weighed on the prices. Also favoring the USD/JPY bears is the broad US Dollar pullback as traders brace for a positive surprise from the US Consumer Price Index (CPI) for January. Earlier in the day, Japan’s preliminary readings of the fourth quarter (Q4) Gross Domestic Product (GDP) data printed mixed readings. Following that, the official nomination of Kazuo Ueda as the BoJ leader weighed on the USD/JPY prices. That said, Bloomberg came out with an analysis suggesting further challenges to the Bank of Japan’s (BoJ) easy money policy during the incoming Kazuo Ueda’s reign. It’s worth noting that Ueda previously defended the current monetary policy in his latest public speech. On other hand, the US Federal Reserve (Fed) hawks kept defending the rate hike concerns but the market’s pricing of slower rate lifts and a nearer peak seemed to have weighed on the US Treasury bond yields. As a result, the US 10-year Treasury bond yields drop nearly two basis points to 3.69% at the latest, after reversing from a one-month high the previous day. Read next: GBP/USD Started The New Week In A Calm Way, EUR/USD Is Waiting For US CPI Report| FXMAG.COM Elsewhere, fresh fears of the US-China tension over the balloon shooting also challenge the sentiment and put a floor under the USD/JPY price. US Congress will take a bipartisan look at unidentified aerial objects that have made their way into U.S. and Canadian airspace, and why they were not found sooner,” said US Senate Majority Leader Chuck Schumer. It’s worth noting that a US Military General previously ruled out odds favoring the likely hand of China in the “unidentified objects” which were shot down during the weekend. Against this backdrop, S&P 500 Futures print mild losses whereas Japan’s Nikkei 225 rises 0.65% intraday to near 27,600 by the press time. Moving on, the market consensus anticipates 6.2% YoY print of the US CPI for January but the odds of the positive surprise during the year-start are high, which in turn keeps USD/JPY bears on the dicey floor. Technical analysis USD/JPY extends the early-day pullback from the previous weekly top surrounding 132.90 and forms “Double tops”, a bearish chart pattern. Also justifying the Yen pair’s latest weakness is the RSI (14) line that took a U-turn from the overbought conditions, not to forget the bearish MACD signals.
Bank of England is expected to hike the rate by 25bp. Kelvin Wong talks Euro against British pound

The EUR/GBP Cross-Currency Pair Remains On The Buyer’s Radar

TeleTrade Comments TeleTrade Comments 14.02.2023 09:18
EUR/GBP reverses bounce off key support confluence on strong UK employment data. UK Unemployment Rate stays unchanged but Claimant Count Change drops. Divergence between ECB and BoE policymakers may recall pair buyers if EU Q4 GDP improves. EUR/GBP reverses from intraday high while declining nearly 20 pips to 0.8830 on the upbeat UK jobs report during early Tuesday. In doing so, the cross-currency pair reversed the early-day run-up from the key 0.8830 support confluence. UK’s Unemployment Rate matches market forecasts and reprints the 3.7% figure for three months to December. However, a slump in January’s Claimant Count Change to -12.9K versus -3.2K prior, as well as strong prints of the  Average Earnings Excluding Bonus for the said month seemed to have favored EUR/GBP bears of late. In contrast to the upbeat UK data, a comparatively more hawkish bias at the European Central Bank (ECB) versus the Bank of England (BoE) joins the upbeat European Commission (EC) economics forecasts to underpin the regional currency’s bullish bias. On Monday, the European Commission (EC) released its quarterly economic projections for the Eurozone wherein it revised up the economic growth forecast to 0.9% for 2023 from 0.3% previously expected, projecting 2024 growth unchanged at 1.5%. The EC, however, lowered the Eurozone inflation forecast for 2023 to 5.6% YoY from 6.1% earlier expected. Further, the EC also cut 2024 inflation predictions to 2.5% for 2024, versus 2.6% previously anticipated. That said, European Central Bank (ECB) Vice-President Luis de Guindos said on Monday, “Rate increases beyond March are to depend on data.” On the same line, ECB policymaker Mario Centeno said, “Inflation is going down faster than we expected,” while adding that smaller hikes would need mid-term inflation nearing 2%. On the other hand, Bank of England’s (BoE) policymaker Jonathan Haskel cited a rise in inactivity in the UK labor market and challenged the British Pound (GBP) buyers previously. BoE’s Haskel also mentioned, “I would prefer to make policy with much more attention on the data flow over the next few months.” On a broader front, the cautious mood ahead of the top-tier data/events joins softer US Treasury bond yields to favor the mild optimism in the market, which in turn seems to favor the Euro (EUR). Having witnessed the initial reaction to the British data and EU fundamentals, EUR/GBP pair traders should wait for the preliminary readings of the fourth quarter (Q4) Gross Domestic Product (GDP) data for the Eurozone for clear directions. Given the recently upbeat economic projections from the European Commission and the ECB’s hawkish bias, the EUR/GBP pair is likely to remain firmer unless the EU GDP disappoints. Technical analysis Unless breaking 0.8830 support confluence comprising the 21-DMA and a one-month-old ascending trend line, the EUR/GBP remains on the buyer’s radar.
Rates Spark: Crunch time

The Euro (EUR) Still Has No Reason To Rise

Paolo Greco Paolo Greco 14.02.2023 09:33
5M chart of EUR/USD On Monday, EUR/USD rose by several dozens of points, and by the end of the day it was near the critical line, and even managed to overcome it. But overall, the upward movement did not exceed 70-80 pips, so it can hardly be argued that the downtrend was broken. Neither the EU nor the US issued any important reports, and there were no important events. So this movement was definitely not connected with any event and we just witnessed a normal growth. This week there will be many days when the macroeconomic background will be strong, so things can change very quickly. I expect the euro to fall because I don't believe that the bearish correction has completely ended. Several trading signals were formed on the 5-minute chart. The pair rebounded from the 1.0658-1.0669 area twice during the European session, which were two buy signals. In the first case, the price went up about 10 pips, so traders had to stay in the long position during the second signal. Then the pair started to sharply rise and managed to reach the Kijun-Sen line, where the upward movement ended on Monday. Traders should have locked in profits on the longs, it was not less than 40 pips. With the total volatility of the day about 70 pips, it's not a bad result. Read next: Poland’s President Andrzej Duda Said The Decision To Send Fighter Jets To Ukraine Was “Not Easy To Take”| FXMAG.COM COT report The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since early September. The euro started to rise around the same time. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. In the reporting week, non-commercial traders opened 9,500 long positions and 2,000 short ones. The net non-commercial position grew by 7,500. The number of long positions exceeds that of short ones by 134,000. There were no new COT reports in the last two weeks, and it's difficult to explain the cause exactly. So now we have to work with the data we have at our disposal. The correction was formed for a long time anyway, so it's clear even without the reports that the pair should continue falling. H1 chart of EUR/USD On the one-hour chart, EUR/USD remains bearish despite overcoming the critical line. The Senkou Span B line is stronger, so the bulls won't find it easy to overcome it. The euro still has no reason to rise, so I think the euro will eventually fall this week. The US inflation report, which will be released today, might provoke the strengthening of the dollar, if it turns out to be weak. On Tuesday, important levels are seen at: 1.0485, 1.0581, 1.0658-1.0669, 1.0762, 1.0806, 1.0868, 1.0938, as well as the Senkou Span B (1.0850) and Kijun Sen (1.0722). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On February 14, there will also be interesting events in the EU, there's the GDP report for the fourth quarter. It will be the second estimate, so I don't expect a strong reaction. Nonetheless, the report itself signals the state of the economy so its worth looking into. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group Relevance up to 08:00 2023-02-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335019
Central Bank Policies: Hawkish Fed vs. Dovish Others"

All Eyes Are On The US CPI Today, Kazuo Ueda Has Been Nominated As The Next Bank Of Japan Governor

Swissquote Bank Swissquote Bank 14.02.2023 09:41
Market bulls have endless optimism this year, it is amazing. Whether it is funded or not, is yet to be seen. US CPI Inflation could help answer that question today. A few indicators point at a certain uptick in inflation in January figures, and the expectation is that the US headline CPI may have slowed to 6.2% in January, from 6.5% printed a month earlier, on a yearly basis. A sufficiently soft, or ideally a softer-than-expected CPI read today should give an additional boost to the equity bulls while a stronger inflation read could easily bring the Fed hawks back to the marketplace and send equities tumbling. Forex In the FX, the US dollar has seen a crowd of sellers above the 50-DMA. A strong inflation data could finally send the dollar index sustainably above its 50-DMA, while a soft reading will be a good reason to sell the rebound. The EURUSD continues its own struggle around the 50-DMA. In Japan, Kazuo Ueda has been nominated as the next Bank of Japan (BoJ) governor. There are rumours that the new BoJ leader could scrap the YCC policy. The yen was better bid in Tokyo, but the US CPI data is probably what will determine the short-term direction both in EURUSD and the USDJPY. CPI What everyone wants to see is a soft US CPI figure, a softer US dollar, strong equities, improved bonds, and stronger other currencies. What everyone fears however is a figure that’s not convincingly softer. The only sure thing is, the CPI days are known for their high intraday volatility. Watch the full episode to find out more! 0:00 Intro 0:24 Mixed feelings about the market 3:51 All eyes are on the US CPI today! 7:13 FX update 8:39 Balloon update Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #inflation #data #Fed #expectations #EUR #JPY #XAU #US #China #spy #balloon #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      
FX Daily: Asymmetrical upside risks for the dollar today

FX Daily: Asymmetrical upside risks for the dollar today

ING Economics ING Economics 14.02.2023 10:25
Today's US CPI report looks like a rather binary event for markets. With the deflationary story having come under increased scrutiny, we suspect that a consensus 0.4% MoM read in core inflation may be enough to weigh on risk assets and support the dollar. We still see room for USD outperformance in the near term. In the UK, wage data endorsed a BoE march hike US consumer spending slowed sharply in the fourth quarter of 2022 USD: A consensus reading may be enough to support the dollar We are a bit surprised to see markets have started the week with some (cautious) optimism despite the big risk event represented by today’s US inflation report. A rise in global equities meant the dollar is trading weaker across the board with the exception of the yen, which continues to see elevated volatility as markets struggle to assess the implications of the Bank of Japan appointing – now officially – Kazuo Ueda as next governor. We expect JPY volatility to stay high as Ueda may refrain from offering clear direction on any policy shift before taking the role in April. For now, there are no indications he will favour an abrupt end to the BoJ’s ultra-dovish policy stance. Back to the US, January’s inflation report will be an important litmus test for the disinflation story that has driven the slowdown in Federal Reserve tightening. The market's reaction will likely be driven once again by the month-on-month figure, which our economist expects to match consensus expectations at 0.5% for the headline rate and 0.4% for core inflation. This should translate into year-on-year reads of around 6.2% and 5.5%, respectively. Such a consensus read may be enough to weigh on risk assets and support the dollar, as it should allow markets to fully price in 50bp of additional tightening by the Fed and offer the chance to scale back rate cut expectations (around 50bp priced in for 2H23). Given that core inflation in December came in at 0.3%, a 0.2% print (or below) today should be enough to trigger a dollar correction, and a 0.5% (or above) could trigger a dollar rally. We’ll be paying close attention to the details of today’s releases. Auto sales and shelter are two components that may contribute to a higher reading. The former may boost the CPI number on the back of a reported jump in auto auction prices by 2.5%: this may translate into 0.15pp added to MoM core CPI, given the high weighting of this component on the reference basket. Shelter accounts for approximately a third of the inflation basket and may prove sticky given the lagged effect on data of contracting house prices and new rental agreements. We still think these two components will drive a big chunk of the deflationary effect from the second quarter, but for now may work against any dovish narrative. We see the balance of risks as tilted to the upside for the dollar and to the downside for pro-cyclical currencies. A return to the 2023 highs in DXY (at 105.00) is still a tangible possibility in the near term, even though we continue to favour USD underperformance in the remainder of this year. Francesco Pesole EUR: No other drivers than US CPI EUR/USD should be moved almost solely by the US inflation report today, as the preliminary (i.e. second) release of eurozone growth numbers looks unlikely to impact markets and there is only one scheduled European Central Bank speaker (Gabriel Makhlouf). As discussed in recent notes, we expect to see a rather contained impact from additional ECB commentaries (even from those by Christine Lagarde tomorrow) from now on, as markets have probably absorbed in full the pushback against the dovish reaction to the February ECB press conference and are now switching their focus to key data releases. In line with our dollar view ahead of today’s US CPI, EUR/USD may slip back to 1.0650/1.0700 should core inflation come in at 0.4% or 0.5% MoM. Anything above that would likely trigger a larger contraction and 1.0600 should be tested. We continue to see downside risks for EUR/USD in the very near term as US data may endorse further Fed hikes and the euro lacks any solid domestic support. Francesco Pesole GBP: Sticky wages cement BoE March hike expectations Wage data released this morning in the UK came in higher than expected, lifting the pound. The Bank of England’s preferred measure of wage growth, the 3-month/3-month annualised change has now been consistently above 7% for a few months, and there is very little evidence of that wage slowdown suggested by some surveys. Tomorrow’s CPI release will be another key event for the pound, but we think that given the increased focus of the Bank of England on wage dynamics, today’s data strongly endorses a March 25bp rate hike (which is our base case). EUR/GBP may well break below 0.8800 this week, while GBP/USD could fall back below 1.2100 after the US CPI print. Francesco Pesole CEE: Break-up within the region Before we see any key releases on a global level, the CEE region also has something to say today. We will see GDP numbers across the region for the fourth quarter and an inflation number for January in Romania. The main focus will of course be on the confirmation of the technical recession in Hungary but also on the consumer side of GDP across the region given that January inflation has already surprised to the upside in Hungary and the Czech Republic. In the FX market, the Polish zloty and Hungarian forint secured the main attention at the start of the week. The zloty reached its weakest levels since mid-October last year weighed down by negative EU money prospects and Thursday's looming European Court of Justice (ECJ) ruling in the FX mortgage case. For now, we have not heard from officials how long it will take for the Constitutional Court to review the legislation after President Duda said he would not sign the bill and sent it instead to the court for review. However, the likelihood is growing that Poland will not get EU money before the October general elections. Moreover, there is a risk that Thursday's ECJ ruling will impose additional costs on the banking sector. Overall, it will thus be difficult for the Polish zloty to resist further losses in the days ahead. For now, we expect the zloty to test 4.80 EUR/PLN. On the other hand, the Hungarian forint has reached its strongest levels since last May. Drivers are the same as in recent weeks in our view - falling gas prices and by far the highest carry in the region. In particular, after Friday's upside inflation surprise, the short end of the IRS curve is up roughly 50-60bps, which has brought the interest rate differential back to levels seen at the start of the year and erased bets on an early central bank rate cut. Although in our view, heavy long positioning on HUF is still the main risk and profit-taking cannot be ruled out, we remain bullish on the forint. We expect further gains to be slower, however, the mentioned conditions should persist at least until the March National Bank of Hungary meeting. Thus, we see a good chance for the forint to beat our forecast of 385 EUR/HUF at the end of the quarter. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Analysis Of The USD/THB Pair Movement By Markets Strategist Quek Ser Leang At UOB Group

Analysis Of The USD/THB Pair Movement By Markets Strategist Quek Ser Leang At UOB Group

TeleTrade Comments TeleTrade Comments 14.02.2023 12:07
Markets Strategist Quek Ser Leang at UOB Group notes USD/THB faces a solid barrier at the 34.20 level. Key Quotes “Last Monday (07 Feb, spot at 33.62), we highlighted that ‘deeply overbought conditions suggest USD/THB could consolidate for a couple of days first before heading higher’. While USD/THB subsequently consolidated, it did not make any headway on the upside. That said, short-term upward momentum is beginning to build and the bias for USD/THB this week is tilted to the upside.” Read next: Brazil’s Bank Allows To Pay Taxes Using Cryopto, Ford Will Cut Jobs In Europe| FXMAG.COM “Overall, barring a breach of 33.35 (minor support is at 33.55), the chance of USD/THB breaking 34.00 is increasing. Looking ahead, the next resistance above 34.00 is at 34.20.”
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

Saxo Bank Podcast: US CPI Report Ahead, Tightening Financial Conditions In The Corporate Bond Market And More

Saxo Bank Saxo Bank 14.02.2023 12:14
Summary:  Today we look at the odd session yesterday in the US, with no readily apparent proximate cause to the rally outside, perhaps of traders hedging today's US January CPI release, which could trigger considerable volatility, especially on the impact of heavy 0DTE options trading if the release is a big surprise in either direction. We also note tightening financial conditions in the corporate bond market, talk market reaction to incoming earnings data, including from ThyssenKrupp, SolarEdge and Palantir, and look at today's crop of earnings reports, as well as stories impacting FX & more. Today's pod features Peter Garnry on equities, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next: Brazil’s Bank Allows To Pay Taxes Using Cryopto, Ford Will Cut Jobs In Europe| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: Podcast: Another CPI circus today. Tightening financial conditions? | Saxo Group (home.saxo)
The GBP/USD Pair Is Expected The Consolidation To Continue

GBP/USD Pair Rose Sharply Above $1.22, EUR/USD Pair Also Rose

Kamila Szypuła Kamila Szypuła 14.02.2023 12:49
The dollar fell on Tuesday in anticipation of the eagerly awaited inflation report. Markets are looking at US consumer inflation data for further clues to the Federal Reserve's policy outlook. Investors expect the headline annual CPI to fall to 6.2% from 6.5% in December and the core CPI, which excludes volatile food and energy prices, to fall to 5.5% from 5.7%. USD/JPY The Yen pair initially cheered the pullback in the Treasury bond yields before the Japanese government’s announcements of Bank of Japan (BoJ) officials triggered hawkish concerns and weighed on the prices. Also favoring the USD/JPY bears is the broad US Dollar pullback as traders brace for a positive surprise from the US Consumer Price Index (CPI) for January. Japan’s preliminary readings of the fourth quarter (Q4) Gross Domestic Product (GDP) data printed mixed readings. Following that, the official nomination of Kazuo Ueda as the BoJ leader weighed on the USD/JPY prices. Fresh fears of the US-China tension over the balloon shooting also challenge the sentiment and put a floor under the USD/JPY price. The USD/JPY pair started trading above 132.30 today, but then fell towards 131.90. The yen pair managed to bounce back and traded close to 132.30 again. USD/JPY is currently trading above 132.20. EUR/USD The European Commission's winter economic forecast published yesterday says that the EU economy is geared to avoid recession. The EUR/USD pair held a narrow range of 1.0730-1.0745 in morning trading, but surged up in the European session. The euro maintained its earlier gains against the slightly weaker US dollar, with EUR/USD changing hands around 1.0760. The latest US inflation report due to be released will be another driver of action. Read next: Brazil’s Bank Allows To Pay Taxes Using Cryopto, Ford Will Cut Jobs In Europe| FXMAG.COM GBP/USD The UK unemployment rate remained unchanged for the 3 months to December 2022, as expected. The number of people out of work for up to 6 months has increased, mainly among people aged 16 to 24. The number of people working in the UK increased by 74,000. in the three months to December, well above market forecasts for an increase of 40,000. and after an increase of 27,000 in last month. Meanwhile, from November 2022 to January 2023, the number of vacancies fell by 76,000. up to 1,134,000 UK wages rose 5.9% in December 2022 compared to the same month last year, beating estimates and down 6.4% from the previous print. What will be of concern, however, is the increase in average earnings without bonuses, which rose to 6.7%, beating the 6.5% forecast. The data compares with market forecasts of growth of 6.2% and 6.5%, respectively. In real terms, adjusted for inflation, the increase in total and regular wages fell by 3.1% in the year from October to December 2022 for total wages and by 2.5% for regular salaries. GBP/USD has gathered bullish momentum and climbed toward 1.2200 in the European trading hours. AUD/USD The Australian and New Zealand dollars tried to hold their gains on Tuesday after a rebound on Wall Street boosted global risk sentiment and Australian data underlined the case for further domestic interest rate hikes. Currently, the price of the Australian pair is around 0.6970. Source: investing.com, finance.yahoo.com
Asia Morning Bites - 04.05.2023

The NAB Noted That Firms Are More Optimistic About Global Growth

Kenny Fisher Kenny Fisher 14.02.2023 14:45
The Australian dollar is unchanged on Tuesday, after starting the week with strong gains. In the European session, AUD/USD is trading at 0.6966. Australia’s Business Confidence jumps Australia’s NAB Business Confidence rebounded in January, rising from 0 to 6 and above the forecast of 1 point. Business Conditions rose to 18, up from 13 and higher than the forecast of 8 points. This follows three months of softening in late 2022. The NAB noted that firms are more optimistic about global growth and the jump in business conditions is a sign that the economy is more resilient than previously expected. The positive news failed to send the Aussie higher, as the markets are waiting for today’s US inflation report. Reserve Bank of Australia Governor Lowe will be on the hot seat when he appears before parliamentary committees on Wednesday and Friday. Inflation rose to 7.8% in December, its highest level since 1990. The RBA has hiked rates by some 325 basis points in 10 months, yet inflation isn’t showing signs of peaking. The RBA raised rates by 25 bp last week and Lowe has signalled that more increases will be needed to tame inflation. Inflation isn’t expected to fall to the RBA’s target of 2% to 3% until 2025. Lowe has faced a barrage of criticism in his handling of inflation and interest rate policy and it’s far from certain that he will be reappointed for another term. Lowe is likely to face a grilling from the committee members, who may be thinking that “something isn’t working here”. All eyes on US inflation The US releases January inflation later today. Inflation is projected to fall to 6.2%, down from 6.5%, but there is unease in the markets that headline inflation might be stronger than expected. The sizzling jobs report indicated that the US labour market remains strong and January has seen higher energy and used car prices. The markets aren’t as confident that the Fed will cut rates late in the year and if the inflation report is higher than expected, the markets could fully price in two more rate hikes. This would be a major shift towards the Fed stance, as Jerome Powell has been saying for months that the pace of rate hikes will likely be higher and longer than previously expected. Recent inflation reports have overestimated inflation and the US dollar has responded with sharp losses. Today’s inflation report will likely follow that pattern, and if inflation is weaker than expected, the dollar should lose ground. Conversely, the dollar should get a boost if inflation is higher than expected.   AUD/USD Technical 0.6962 is a weak resistance line, followed by 0.7080 0.6841 and 0.6761 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Fear of Strong Jobs: How US Labor Market Resilience Sparks Global Financial Panic

On The New York Stock Exchange Only NASDAQ Composite Index Rose

InstaForex Analysis InstaForex Analysis 15.02.2023 08:00
Traders are evaluating consumer price statistics that were released prior to the opening of trading. Thus, annual inflation in January slowed down to 6.4% from 6.5% a month earlier. Analysts had forecast the figure at 6.2%. On a monthly basis, consumer prices rose 0.5% in January. Dow Jones At the close in the New York Stock Exchange, the Dow Jones fell 0.46%, the S&P 500 index fell 0.03%, the NASDAQ Composite index rose 0.57%. The leading gainer among the Dow Jones index components today was Boeing Co, which gained 2.80 points or 1.30% to close at 218.45. Nike Inc rose 1.05 points (0.84%) to close at 126.20. Chevron Corp rose 1.31 points or 0.77% to close at 172.32. The least gainers were The Travelers Companies Inc, which shed 3.47 points or 1.85% to end the session at 184.13. Coca-Cola Co rose 1.67% or 1.01 points to close at 59.59, while Home Depot Inc shed 1.58% or 5.10 points to close at 318.43. S&P 500  Leading gainers among the S&P 500 index components in today's trading were IPG Photonics Corporation, which rose 11.56% to 125.55, Tesla Inc, which gained 7.51% to close at 209.25, and shares of Aptiv PLC, which rose 7.37% to end the session at 121.10. Leidos Holdings Inc were the least gainers, shedding 5.42% to close at 95.25. Shares of Marsh & McLennan Companies Inc shed 4.02% to end the session at 167.00. Arthur J Gallagher & Co lost 3.57% to 188.25. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Amesite Operating Co, which rose 81.62% to hit 0.51, Boxlight Corp Class A, which gained 39.47% to close at 0.56. as well as shares of United Insurance Holdings Corp, which rose 37.27% to close the session at 1.51. Top Ships Inc was the least gainer, shedding 44.85% to close at 0.91. Shares of Mobiquity Technologies Inc lost 32.77% and ended the session at 0.35. Quotes Pathfinder Acquisition Corp fell in price by 31.61% to 4.24. Numbers On the New York Stock Exchange, the number of depreciated securities (1581) exceeded the number of closed in positive territory (1446), while quotes of 111 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,952 stocks fell, 1,691 rose, and 217 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 7.03% to 18.91. Gold Gold futures for April delivery added 0.11%, or 2.05, to $1.00 a troy ounce. In other commodities, WTI crude for March delivery fell 1.27%, or 1.02, to $79.12 a barrel. Brent oil futures for April delivery fell 1.14%, or 0.99, to $85.62 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.16% to 1.07, while USD/JPY rose 0.49% to hit 133.05. Futures on the USD index fell 0.10% to 103.14.   Relevance up to 16:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335111
InstaForex's Ralph Shedler talks Euro against Japanese yen

The USD/JPY Pair Is In Uptrend In The Short-Term

InstaForex Analysis InstaForex Analysis 15.02.2023 08:02
On Tuesday, the USD/JPY pair successfully consolidated above the balance and MACD indicator lines, which is confirmed by an attempt to test the point of intersection of these two indicator lines of the lower shadow of yesterday's candle. The signal line of the Marlin oscillator is trying to turn down, but it is still far from the overbought area, so the direction of the oscillator trend is dominant here. The 133.77 target is relevant. A consolidation above the level will open the prospect of growth to the next embedded price channel line around 137.62. The first signal of the reversal is when the price overcomes the support of the MACD line on the daily chart (131.35). The target is 130.08. The price is rising above both indicator lines on the four-hour chart. Marlin is in the green zone. An uptrend in the short-term. This could be supported tonight, after the release of data on retail sales and industrial production in the United States; retail sales in January is expected to increase by 1.8%, while industrial production is seen to increase by 0.5%.   Relevance up to 03:00 2023-02-16 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335123
The GBP/USD Pair Is Expected The Consolidation To Continue

The GBP/USD Price Formally Settled Above 1.2155, But Under Pressure

InstaForex Analysis InstaForex Analysis 15.02.2023 08:04
Yesterday, the British pound reacted strongly to the release of the US inflation report. The January CPI estimate was down just 0.1% from 6.5% to 6.4% y/y against expectations of 6.2% y/y. The pound showed a range of 150 points. This was probably helped by the moderately optimistic UK employment data where 74,000 new jobs were created in December against the forecast of 40,000. On the daily chart, the price touched the MACD indicator line. It closed the day above the resistance of 1.2155, and at the moment, the Marlin oscillator is trying to enter the green zone. Price consolidation, i.e. day closing above 1.2155, will allow the pair to try the strength of the MACD line (1.2285). In case it succeeds, the next target will be 1.2420. Moving below 1.2155 will return the balance of forces to its previous state, as the Marlin oscillator will turn down from its zero line. The 1.1900 level will become a target again. On the four-hour chart, the price formally settled above 1.2155, but under pressure due to the technical situation on the higher chart, the price may fall below the level, and there, an attack on the MACD line at 1.2085. The Marlin oscillator is in the positive area, so the market needs a strong reason to break down. It could be today's big block of data on inflation in Great Britain   Relevance up to 03:00 2023-02-16 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335125
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The EUR/USD Price Made A False Breakout Above The MACD Line

InstaForex Analysis InstaForex Analysis 15.02.2023 08:07
The major currencies traded with increased volatility due to yesterday's US inflation report, but the overall trends, nevertheless, did not change. The upper shadow of the EUR/USD pair, as we estimated in yesterday's review, pierced the upper limit of the target range at 1.0758/87, touched the MACD indicator line and returned below this range. The signal line of the Marlin oscillator grows sluggishly, the bulls' potential after yesterday's unsuccessful surge may be exhausted. On the four-hour chart, the price made a false breakout above the MACD line yesterday, returned under it and settled under this line. The Marlin oscillator, as well as the price, is under pressure. Now the signal for continuing the decline is when the price overcomes yesterday's low at 1.0707. The nearest target is 1.0660, then 1.0595.   Relevance up to 03:00 2023-02-16 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335127
If The Bank Of England Hike Interest Rates Again Later This Month Will Exert Downward Pressure On The EUR/GBP Cross

Analysis Of The EUR/GBP Cross Currency Pair Movement

InstaForex Analysis InstaForex Analysis 15.02.2023 08:09
On the 4-hour chart, the EUR/GBP cross currency pair can be seen that the price movement is continuing its decline to go to the target level 0.8771 as the main target and the 0.8721 level as the second target where this can be seen as confirmation from the movement of the candlestick moving below the moving average. because of the appearance of deviations in price movements with the MACD Histogram indicator, in the near future there will be a upward correction movement to test the 0.8836 level before returning to the original downward movement but the important thing is as long as the upward correction movement does not exceed the 0.8874 level, then a bearish scenario will occur. has been described is still valid.   Relevance up to 02:00 2023-02-16 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/119497
The US Dollar Index Prices Should Stay Below 105.00

The USD Dollar Index Has The Potential To Strengthen Again

InstaForex Analysis InstaForex Analysis 15.02.2023 08:11
On the daily chart of the USD Dollar Index, it can be seen that there was a trendline break (TLB) condition on the CCI (14) indicator which was previously in a bear condition where the Chop Zone (CZ) indicator (levels 100 & -100) was red but after that TLB and CCI move above level 0, so CZ changes color to cyan blue and now the CCI histogram (14) has turned green, followed by Sidewinder color (levels 200 & -200) changes color to yellow (volatile/Trending) and green (very volatile / trending) so that in the future USDX has the potential to be Bullish appreciated going up to the 103.96 level as the first target and the 105.63 level as the second target but before that it seems that USDX will be corrected down to test the 102.19 level and as long as this level is strong enough to hold back the pace correction and does not exceed the level of 100.82, USDX has the potential to strengthen again where this can be seen at CCI 914) is trying to form Zero Line Reject (ZLR) pattern.   Relevance up to 03:00 2023-02-18 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/119499
EUR/USD Pair Has A Potential For Short-Term Rally

The EUR/USD Pair Is Looking For A Successful Break Above Resistance Level

Torben Melsted Torben Melsted 15.02.2023 08:12
EUR/USD rallied nicely and tested strong resistance at 1.0791 but wasn't able to break clearly above on the first try. After a temporary correction towards 1.0684, we should see a new and this time likely successful break above resistance at 1.0790 for a continuation higher towards 1.1109 in wave 5. So, look for a little more downside closer to 1.0684 to complete the minor correction from 1.0804 for a new impulsive rally towards 1.0933 and 1.1109 as the next upside targets.     Relevance up to 06:00 2023-02-16 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/312762
Rates Spark: Nothing new on the dovish front

Reports On The European Economy Are Unlikely To Help Euro Much

Jakub Novak Jakub Novak 15.02.2023 08:17
Analysis of transactions and tips for trading EUR/USD The test of 1.0755 occurred when the MACD line was already far from zero, so the upside potential was limited. Sometime later, there was another test, but this time it was at 1.0789 and the market signal was to sell. It resulted in a price decrease of over 50 pips. Eurozone's growth rate in Q4 remained unchanged, partly helping euro yesterday morning. However, CPI data in the US turned out to be higher than expected, so dollar strengthened during the US session. A number of reports on the European economy are scheduled for today, which are unlikely to help euro much. But more interesting is the speech of ECB chief President Christine Lagarde as she will relay her views on the future of the monetary policy. In the afternoon, a rather serious volatility burst is likely to happen due to the US retail sales data for January. A higher-than-forecasted figure is likely to prompt a further rise in dollar and a drop in euro. Reports on the Empire Manufacturing index and the change in industrial production will be of little interest. For long positions: Buy euro when the quote reaches 1.0745 (green line on the chart) and take profit at the price of 1.0789. Growth will occur if there is a sharp decline in the US retail sales this January. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0711, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0745 and 1.0789. For short positions: Sell euro when the quote reaches 1.0711 (red line on the chart) and take profit at the price of 1.0667. Pressure will return if data on the Euro area disappoints and if Lagarde's statement is dovish. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0745, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0711 and 1.0667. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 06:00 2023-02-16 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335141
InstaForex's Irina Manzenko talks British pound amid latest events

The GBP/USD Pair Is Waiting For The UK Inflation Report

Jakub Novak Jakub Novak 15.02.2023 08:20
Analysis of transactions and tips for trading GBP/USD The test of 1.2159 occurred when the MACD line was just starting to move above zero, which was a pretty good signal to buy. However, there was no price increase, leading to losses. Selling on a rebound from 1.2126 also did not give the expected result. Pound rose on Tuesday amid better-than-expected labor market report in the UK. However, CPI data in the US was also higher than expected, so dollar strengthened during the US session, causing pound to fall. Ahead is a report on UK inflation, which will be decisive in today's movement of GBP/USD. It might push pound down even more, but if prices are better than expected, some buyers will be ready to buy during the European session without waiting for the US statistics. That being said, a rather serious volatility burst is also likely to happen in the afternoon due to the US retail sales data for January. A higher-than-forecasted figure is likely to prompt a further rise in dollar and another drop in pound. Reports on the Empire Manufacturing index and the change in industrial production will be of little interest. For long positions: Buy pound when the quote reaches 1.2175 (green line on the chart) and take profit at the price of 1.2230 (thicker green line on the chart). Growth will be possible if there is news of a sharp slowdown of price pressure in the UK. However, when buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can be bought at 1.2140, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2175 and 1.2230. For short positions: Sell pound when the quote reaches 1.2140 (red line on the chart) and take profit at the price of 1.2080. Pressure will return if the retail sales data in the US exceeds expectations. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2175, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2140 and 1.2080. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 06:00 2023-02-16 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335143
Underestimated Risks: Market Underestimating Further RBA Tightening

The USD/INR await more clues to extend the previous day’s run-up

TeleTrade Comments TeleTrade Comments 15.02.2023 08:40
USD/INR seesaws around multi-day high as firmer US Dollar jostles with sluggish markets, downbeat Oil price. Fed Officials ignore sticky inflation to defend hawkish bias and propel US Treasury bond yields, USD. Upbeat WPI inflation favor RBI rate hike expectations and put a floor under Indian Rupee. US data, risk catalysts eyed for fresh impulse. USD/INR bulls take a breather around the 1.5-month high, flirting with the multi-day-old resistance line near 83.00 by the press time, as markets await more clues to extend the previous day’s run-up. It’s worth noting that the Indian Rupee (INR) dropped to the lowest levels since early January the previous day after the Federal Reserve (Fed) policymakers ignored unimpressive US inflation numbers to defend their hawkish bias and propel the US Dollar. However, upbeat inflation numbers at home seemed to have probed the USD/INR bulls afterward. That said, US Consumer Price Index (CPI) rose past market expectations to 6.4% YoY but posted the slowest increase since 2021 while easing below 6.5% prior. More importantly, CPI ex Food & Energy, better known as the Core CPI, grew 5.6% YoY compared to 5.5% market forecasts and the 5.7% previous readings. On the other hand, India's WPI Inflation grew more than expected 4.54% to 4.73%, versus 4.95% prior, during January, which in turn justifies the Reserve Bank of India’s (RBI) inflation woes and readiness for further rate increases. Other than India’s WPI inflation, downbeat Oil prices also weigh on the USD/INR pair, mainly due to the Asian nation’s reliance on energy imports and the record-high deficit. That said, WTI crude oil drops 0.80% intraday to $78.70 while printing a three-day downtrend by the press time. Talking about the Fed commentary, Dallas Fed President Lorie Logan stated that they must remain prepared to continue rate increases for a longer period than previously anticipated. On the same line was New York Fed President John Williams who noted that the work to control too high inflation is not yet done. Additionally, Philadelphia Fed President Patrick Harker signaled that they are not done (with lifting rates), but they are likely close. Read next: GBP/USD Pair Rose Sharply Above $1.22, EUR/USD Pair Also Rose| FXMAG.COM Amid these plays, US 10-year Treasury bond yields retreat to around 3.74%, after rising three basis points (bps) to refresh a six-week high the previous day whereas the two-year counterpart jumped to the highest level since early November 2022 by poking 4.62%, near 4.61% at the latest. Further, S&P 500 Futures trace Wall Street’s downbeat closing to highlight the mildly offbeat mood and help the US Dollar Index (DXY) to extend the post-US CPI run-up. Moving on, US Retail Sales and Industrial Production details for January, as well as NY Empire State Manufacturing Index for February, should be watched closely to confirm the Fed’s hawkish bias ahead of the next week’s Federal Open Market Committee (FOMC) Minutes. Technical analysis A daily closing beyond the four-month-old descending resistance line, around 83.00 by the press time, becomes necessary for the USD/INR bulls to keep the reins.
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The NZD/USD Pair Is Expected Further Downside Movement

TeleTrade Comments TeleTrade Comments 15.02.2023 08:42
NZD/USD marks the second defeat from 50-DMA, renews intraday low. Three-month-old rising wedge restricts downside ahead of 200-DMA. Bearish MACD signals, downbeat RSI and failure to cross 50-DMA favor sellers. NZD/USD takes offers to refresh the intraday low near 0.6300 as it extends the previous day’s pullback from the 50-DMA hurdle during early Wednesday. In doing so, the Kiwi pair marks the second such failure to cross the key Daily Moving Average (DMA) while staying inside a three-month-old rising wedge bearish chart formation. Other than the failure to cross the 50-DMA, bearish MACD signals join the downbeat RSI (14), not oversold, to keep the bears hopeful. However, a clear downside break of the three-month-old ascending support line, forming part of the stated rising wedge bearish chart formation, near 0.6290, becomes necessary. Read next: Walmart Plans To Close Offices, Ford Invests In Battery Factories | FXMAG.COM Following that, the 200-DMA support surrounding 0.6180 and the mid-November 2022 swing low around 0.6065, could act as the last defense before directing the Kiwi pair toward the theoretical target of 0.5810. During the fall, the 0.6000 round figure may act as an extra filter towards the north. Alternatively, a daily closing beyond the 50-DMA hurdle surrounding 0.6375 could aim for the 0.6400 threshold and the stated wedge’s top line near 0.6540. Though, any further upside appears less lucrative unless crossing the June 2022 high of near 0.6575. NZD/USD: Daily chart Trend: Further downside expected remaining time till the new event being published U.S.: Leading Indicators
Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

Weaker Crude Oil Prices Undermine The Loonie Pair (USD/CAD)

TeleTrade Comments TeleTrade Comments 15.02.2023 08:47
USD/CAD regains positive traction on Wednesday and is supported by a combination of factors. Sliding crude oil prices undermines the Loonie and acts as a tailwind amid sustained USD buying. The prospects for more rate hikes by the Fed and the risk-off mood benefit the safe-haven buck. The USD/CAD pair catches fresh bids on Wednesday following the previous day's post-US CPI volatility and sticks to its intraday gains heading into the European session. The pair trades around the 1.3365 region, up nearly 0.25% for the day, and is supported by a combination of factors. Weaker crude oil prices undermine the commodity-linked Loonie, which, along with broad-based US Dollar strength, acts as a tailwind for the USD/CAD pair. Investors now seem worried that economic headwinds stemming from rising borrowing costs will dent fuel demand. Apart from this, signs of another massive build in US crude inventories weigh on the black liquid. In fact, the American Petroleum Institute (API) report showed on Tuesday that US crude stockpiles grew over 10 million barrels in the week to February 10. The USD, on the other hand, stands tall near a multi-week high amid firming expectations for further policy tightening by the Federal Reserve. In fact, the markets seen convinced that the US central bank will stick to its hawkish stance for longer in the wake of stubbornly high inflation. The bets were reaffirmed by the latest US CPI report released and hawkish commentary by several FOMC officials on Tuesday. This, along with the prevalent risk-off mood, benefits the safe-haven buck and lends support to the USD/CAD pair. The aforementioned fundamental backdrop favours bullish traders and suggests that the path of least resistance for the USD/CAD pair is to the upside. Hence, some follow-through positive move, back towards reclaiming the 1.3400 round-figure mark, looks like a distinct possibility. The focus now shifts to the US economic docket, featuring the release of monthly Retail Sales and the Empire State Manufacturing Index. Traders will further take cues from oil price dynamics to grab short-term opportunities around the pair. Technical levels to watch remaining time till the new event being published U.S.: Leading Indicators
Central Banks and Inflation: Lessons from History and Current Realities

Analysis Of Movement Of The GBP/JPY Cross Pair

TeleTrade Comments TeleTrade Comments 15.02.2023 08:59
GBP/JPY meets with a fresh supply on Wednesday and erodes a part of the overnight gains. The softer UK CPI print eases pressure on the BoE to tighten further and weighs on the GBP. The risk-off mood underpins the safe-haven JPY and also contributes to the intraday decline. The GBP/JPY cross comes under some selling pressure on Wednesday and snaps a two-day winning streak to a fresh YTD peak, around the 162.15-162.20 region touched the previous day. The cross remains depressed through the early European session and hits a fresh daily low, around the 161.15 area, following the release of the UK consumer inflation figures. In fact, the UK Office for National Statistics reported that the headline CPI declined by 0.6% in January, more than the 0.4% fall anticipated. Adding to this, the yearly rate decelerated from 10.5% in December to 10.1% during the reported month, again missing estimates for a reading of 10.3%. Moreover, Core CPI, which excludes seasonally volatile products such as food and energy, came in at 5.8% YoY as compared to the 6.3% previous and 6.2% expected. The data points to signs of easing inflationary pressure and could allow the Bank of England to slow the pace of its policy-tightening, which, in turn, weighs on the British Pound. The Japanese Yen (JPY), on the other hand, is underpinned by speculations that Kazuo Ueda, the Bank of Japan (BoJ) governor candidate, will dismantle the yield curve control. This, along with the risk-off mood, benefits the safe-haven JPY and exerts pressure on the GBP/JPY cross. Read next: GBP/USD Pair Rose Sharply Above $1.22, EUR/USD Pair Also Rose| FXMAG.COM The aforementioned fundamental backdrop favours bearish traders and suggests that the recent move-up witnessed over the past two weeks or so has run out of steam. That said, it will still be prudent to wait for some follow-through selling below the 161.00 mark before confirming the negative outlook and positioning for any further intraday depreciating move.
The Challenge to the Dollar: De-dollarisation and Geopolitical Shifts

A Chorus Of Fed Speakers Have Suggested The Fed Isn't Yet Taking Comfort In The Inflation Trends

Saxo Bank Saxo Bank 15.02.2023 09:09
Summary:  US equities ended mixed but bonds were lower after a hot US CPI raised concerns on the pace of disinflation and the Fed comments that followed pushed the market pricing of terminal Fed funds rate higher. Dollar ended the day mostly flat but higher yields saw the yen plummeting. A bumper UK jobs report for January sent the GBP higher but the wait is now on for the January inflation print. US retail sales will also be on tap today.   What’s happening in markets? US equities supported by strong price performance in Tesla and Nvidia U.S. equities had a choppy session as stocks oscillated between gains and losses following a slower-than-expected deceleration in the CPI prints and hawkish-leaning Fedspeak before the broad benchmark S&P500 settled at nearly flat and the tech-heavy Nasdaq 100 gained 0.7%. Most of the strength in the Nasdaq came from Tesla’s (TSLA:xnas) 7.5% jump and NVIDIA’s (NVDA:xnas) 5.4% rise in share price. Tesla gained following rival Ford (F:xnys), down 0.9%, halted production and shipments of its F-150 Lightning electric pickup trucks due to an unidentified problem with the battery. Tesla also raised the price of its Model Y by USD1,000 to USD58,990. Consumer discretionary, up 1.2%, was the best-performing sector in the S&P500 and Tesla was the top winner. Palantir Technologies (PLTR:xnys) soared 21.3% after the data analysis software company reported better-than-expected Q4 earnings and expects to turn profitable for the whole year in 2023. Airbnb (ABNB:xnas) surged 9.2% in extended-hour trading following reported adjusted EPS at USD0.475, beating the USD0.31 consensus estimate and an upbeat outlook on strong travel demand. Coca-cola (KO:xnys) slid 1.7% despite reporting stronger-than-expected revenue growth and inline earnings. The management gave upbeat guidance for revenue growth of 7-8% and EPS growth of 7-9% in spite of continued cost pressure. US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) bear-flattened as yields on the 2-year jumped 10bps Growth in the U.S. CPI came at a slower pace but slowed less than what the consensus forecast expected. After choppy initial reactions, selling emerged in the front end, seeing the 2-year yield finish 10bps cheaper at 4.61%. The SOFR June-Dec 2023 spread narrowed by 10bps to -24bps from -33bps, signaling a further reduction in the bet of rate cuts in the second half of 2023. Hawkish-leaning comments from Fed’s Logan and Barkin, plus the departure of Fed Vice-chair Lael Brainard to join the Biden Administration as head of the National Economic Council added fuel to the higher-for-longer narrative. Brainard is perceived to be the “most persuasive policy dove” at the Fed, as the Wall Street Journal’s Nick Timiraos puts it. Yields on the 10-year rose 4bps to 3.74%, paring some of the rises in yield after a large block buying of nearly 20,000 contracts in the 10-year futures. Across the pond, yields on 2-year Gilts jumped 19bps on a hot employment report. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) traded sideways In a choppy but uneventful session, Hang Seng Index slipped 0.2%. Hong Kong developers recovered from yesterday’s sell-off and bounced by 1%-2%. Sun Hung Kai Properties (00016:xhkg) gained 2.4%; Wharf Real Estate (01997:xhkg) climbed 1.8%. Healthcare names were laggards, with Wuxi Biologics (02269:xhkg) plunging 4% after forecasting 2022 revenues rising 48.4% and profits growing 30%, which failed to meet the high bar of analyst estimates. Alibaba Health Information (00241:xhkg) dropped 2.8%. Tencent (00700:xhkg), down 2.1%, led the internet space lower. Oriental Overseas (00316:xhkg) slipped 2.6% on analyst downgrades citing falling container freight rates. In A-shares, CSI300 was little changed. Non-ferrous metal stocks outperformed, with North Copper (000737:xsec) up 8.7%, Yunnan Copper (000878:xsec) up 5%, and CMOC (603993:xssc) up 3.3%, leading the charge higher. Household appliances names were among the winners with Zhejiang Meida (002677:xsec) advancing by 10%, hitting the upper price limit. Australia equities (ASXSP200.I) fall back to January 16 levels, dragged down by Commonwealth Bank’s cautious outlook Shares in the biggest bank in Australia, the Commonwealth Bank (CBA) sank 5.2% pulling away from record high territory, after reporting half-year results today that paint a cautious tone for banks for the year ahead. CBA’s share price drop pulled back the broad market. CBA's profit results mostly disappointed, although its net interest margin- the main metric analysts look at for banking profitability - came in at 2.1% - on par with expectations. CBA’s cash profit missed expectations with profit up 8.6% YoY to $5.15 billion (vs $5.17 billion Bloomberg consensus), while CBA’s return on equity improved – but also missed market targets. That spooked the market, along with CBA putting aside more capital for bad debts, as higher price pressures continue to hurt consumers, along with falling home prices.  Even though CBA’s results missed, it announced a $1 billion share buy-back as its headline profit after tax moved to a record, which was supported by a surge in business banking profits. The share buy back should theatrically support CBA's shares over the medium to longer term, coupled with the market expecting 2023 profits to hit another record, with margins to improve.  CBA shares gapped down, wiping out a month of gains - with CBA shares moving into oversold territory.  FX: Wobbly dollar as yen slips but AUD, GBP gain A hot inflation data along with Fed officials starting to float the idea of a higher terminal rate saw the dollar being volatile on the day but ended unchanged. Higher yields underpinned as market pricing of the Fed path shifted higher, and that made the yen as the underperformer for the day. USDJPY surged above 133, after Kazuo Ueda being formally nominated as the BOJ chief yesterday and expectations that he won’t be quick with any policy normalization. Meanwhile, AUDUSD was choppy but could not sustain a move above 0.70. GBPUSD also gave up 1.22 despite the strong labor market data questioning the Bank of England’s pause signal, eyes on inflation due today. EURUSD still above 1.0700 with the preliminary readings of the Eurozone Q4 GDP matching 0.1% QoQ and 1.9% YoY forecasts. Lagarde will be on the wires today, and also keep a watch on US retail sales data. Aussie dollar's 50-day moving average continues to limit downside ahead of AU employment The Aussie dollar has continued to track sideways for the last 7 trading sessions, with the Aussie dollar against the US - the AUDUSD pair - being supported by its 50-day moving average ahead of Australian employment on Thursday. Despite hotter than expected US CPI, the pair is steady - also supported by the fundaments - metal prices have moved higher, with Copper and Iron Ore prices back at June 2022 levels. The next catalyst will be Thursday’s Australian employment data, if we see more than 20,000 jobs added, then we will be watching the resistance levels, at perhaps 0.7114 for the Aussie. On the downside, if Australian employment is weaker than expected, we will be watching for a potential pullback. Support for the AUDUSD is perhaps at 0.6879. But, over the medium-to-long term, should the USD continue to track lower, commodity prices stay higher and AU exports continue to grow to China, we see the Aussie dollar doing well. Crude oil (CLH3 & LCOJ3) prices remain pressured While reports of the US release of crude oil from its strategic reserves continued to nudge oil prices lower, a large stockpile built and inflation concerns also added to a weak demand outlook. WTI dropped below $79/barrel while Brent got close to $85. US private inventories, as reported by API, were up by 10.5 million barrels last week. A hot US CPI printed also raised concerns on the disinflation narrative taking hold, suggesting Fed may have to go for a higher terminal rate and pause there for sometime, which raises concerns on the demand outlook. The slide in oil prices however got some support from the OPEC report, which hinted at a tigher oil market as it nudged up the demand estimate and trimmed its supply outlook. IEA monthly report will be on tap today. Read next: Walmart Plans To Close Offices, Ford Invests In Battery Factories | FXMAG.COM What to consider? US CPI sent confusing signals to the markets, but the cooling isn’t enough The US January CPI came in at 0.5% MoM, in-line with estimates, while the core CPI was at 0.4% MoM also as expected. December prints were however revised higher with headline up to +0.1% MoM from -0.1% previously, and core up to 0.4% MoM from 0.3% previously. Markets were wobbly on the release, as the YoY prints came in higher-than-expected at 6.4% for the headline (vs. 6.2% exp) and 5.6% for the core (vs. 5.5% exp). However, a key measure that Powell has highlighted earlier – core services ex shelter – cooled to 0.3% in the month from 0.4% previously. Housing contributed the most to the monthly increase in the CPI, but it is a lagged measure. Meanwhile, disinflation in goods slowed as core goods prices rose +0.1% MoM vs. -0.1% MoM prior. Overall, there wasn’t enough evidence that core inflationary pressures are cooling enough to support calls for the Fed to pivot. Fed speakers send market pricing for Fed path higher A chorus of Fed speakers last night talked about the slow pace of disinflation, suggesting the Fed isn’t yet taking comfort in the inflation trends. NY Fed President Williams repeated there is "still a ways to go" to control inflation and the current levels of inflation are far too high. His views on the terminal rate also differed slightly, in December he suggested rates between 5.00-5.50% is reasonable before last week changing the view to 5.00-5.25%. However, he has now seemingly switched back his views of the higher upper bound for the FFR to 5.50% in wake of the January inflation data. Philly Fed’s Patrick Harker noted that how far above 5% the Fed needs to go depends on incoming data, and Tuesday's inflation report shows inflation is not moving down quickly. Dallas President Logan stressed that tightening policy too little is the top risk. All three are voters this year. Thomas Barkin, a non-voter said it was about as expected and there's going to be a lot more inertia and persistence to inflation than the Fed thought. However he was slightly more dovish saying that if inflation settles, they may not go as far on the terminal but he stressed data dependence. Markets are now pricing in a higher terminal rate of 5.26% in July, and one rate cut has also been driven out of this year’s pricing. Takeaways and quick reflections from hotter-than-expected CPI  Shelter costs were a large contributor to US monthly prices moving up - with rent prices up 8.6%, while large price jumps were seen in airfares costs, up 26%. Airlines are not only seeing more passengers, but also increasing their fares - and this is translating to higher earnings expectations and thus stronger share price performance in airline industry stocks. American Airlines shares are up 40% from their lows, while aircraft maker Boeing is up 80% off its lows. Across other inflation categories, other significant price moves were seen in eggs, butter, fuel, gas, lettuce, cereals, and pet food. This reinforces Saxo’s bullish and overweight view on Commodities as we see higher prices for longer. Companies such as Shell trade 32% up from their lows, while agricultural company Deere is up 40% from its lows. UK employment data points to much firmer than expected labour market The UK saw a strong surge in Monthly Payrolled Employees of +102k, well north of the +15k expected, while the January Jobless Claims dropped -12.9k and the December claims were revised down to -3.2k vs. +19.7k originally reported. The December employment change registered a gain of 74k vs. 43k expected and the Unemployment rate in December was steady at 3.7%. Weekly earnings ex Bonus were +6.7% YoY in December Vs. 6.5% expected and 6.5% in November. Focus shifts to CPI report due today and another double digit print is expected. Hong Kong Monetary Authority bought HKD to defend the peg The Hong Kong Monetary Authority bought HKD14.87 billion (USD1.9 billion) to cap the USDHKD at 7.85, in defence of the SAR’s link-exchange-rate regime for the first time since last November. For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Markets Today: Choppy markets with a hot US CPI and Fed speak – 15 February 2023 | Saxo Group (home.saxo)
Airbnb's Revenue Exceeded Estimates, Growing 24% y/y

Airbnb's Revenue Exceeded Estimates, Growing 24% y/y

Saxo Bank Saxo Bank 15.02.2023 09:29
Summary:  Markets gyrated wildly on yesterday’s US January CPI release, which showed higher than expected inflation on a year-on-year basis, which kept US treasury yields firm as a number of Fed members chimed in with hawkish comments. Elsewhere, has the consumption led Chinese recovery been oversold as many new consumer credit loans are being funnelled to pay down mortgages and on stock speculation rather than on consumption. What is our trading focus? US equities (US500.I and USNAS100.I): the dilemma in equities As we wrote in yesterday’s equity note in a response to the US January CPI report, the initial positive reaction in S&P 500 futures seemed weird and most likely reflected clearing of hedges and other derivatives positions. The market eventually settled on the interpretation that inflation remains stubbornly high, and the trajectory lower might take longer than expected. The dilemma for investors is that if the economy does not slip into a recession hen high inflation will remain and eventually push on bond yields and likely increase the equity risk premium leading to lower equity valuations. In the case the economy slips into a recession, equity valuations will come down to reflect lower growth and hit to margins. In any case, equities could have seen the best for now and investors might consider reducing equity exposure at these levels. S&P 500 futures bounced back during the session from the lows after the inflation report, but this morning the index futures trade lower again around the 4,127 level with the 4,100 level naturally being the key level to watch on the downside. Hong Kong’s Hang Seng (HIG3) slid and pared its 2023 gain to only 5% Hang Seng dropped 1.6% on Wednesday to levels last seen on 4 January and pared its 2023 gain to only 5%. The Hong Kong Monetary Authority intervened in the forex market for the first time since last November to sell USD1.9 billion against buying the Hong Kong dollar to cap the USDHKD from going about 7.85 the upper limit of the special administrative region’s link-exchange-rate regime. Selling was across the board. Baidu (09888) bucked the market decline and rallied over 5% supported by the somewhat return of the hype on the AI-generated content concept. In A-shares, CSI300 fell 0.6%. AI-generated content concept stocks advanced while domestic consumption, financial, healthcare, and non-ferrous metal names retreated. FX: Choppy dollar on CPI release, eventually settles higher as yen slips on yields rising The USD ended largely unchanged after gyrating wildly in the wake of the January CPI release and Fed comments (more below). After US treasury yields ended the day firmer all along the curve, the JPY was the weakest of USDJPY rallied and took out local resistance, trading above 133.00 into this morning. ay but ended unchanged. Elsewhere, AUDUSD was choppy but could not sustain a move above 0.70 yesterday and stumbled badly in late Asian trading. GBPUSD also gave up 1.22 despite the strong labour market data questioning the Bank of England’s pause signal, eyes on inflation due this morning (breaking news below on that). EURUSD has edged lower toward 1. 0700 overnight with the preliminary readings of the Eurozone Q4 GDP matching 0.1% QoQ and 1.9% YoY forecasts. Lagarde will be on the wires today. Crude oil (CLH3 & LCOJ3) prices remain pressured While reports of the US release of crude oil from its strategic reserves continued to nudge oil prices lower, a large stockpile build and inflation concerns also added to a weak demand outlook. WTI dropped below $79/barrel while Brent slid below $85. US private inventories, as reported by API, were up by 10.5 million barrels last week. A hot US CPI printed also raised concerns on the disinflation narrative taking hold, suggesting Fed may have to go for a higher terminal rate and pause there for some time, which raises concerns on the demand outlook. The slide in oil prices however got some support from the OPEC report, which hinted at a tighter oil market as it nudged up the demand estimate and trimmed its supply outlook. IEA monthly report will be on tap today. Gold (XAUUSD) pummelled further by yield rise post-US CPI release Gold dropped further yesterday, taking out the 1,850 level as US treasury yields closed the day firmer after wild gyrations across markets in the wake of the US CPI release and hawkish talk from Fed speakers (more below). The next important levels include the 1,829 level, which is the 38.2% retracement of the rally off the November lows, the 1,809 area which was broken on the way up, and then the 200-day moving average, currently coming in just above 1,775. Treasuries bear-flattened as yields on the 2-year jumped 10bps Growth in the U.S. CPI came at a slower pace but slowed less than what the consensus forecast expected. After choppy initial reactions, selling emerged in the front end, seeing the 2-year yield finish 10bps cheaper at 4.61%. The SOFR June-Dec 2023 spread narrowed by 9bps to -24bps from -33bps, signalling a further reduction in the bet of rate cuts in the second half of 2023. Hawkish-leaning comments from Fed’s Logan and Barkin, plus the departure of Fed Vice-chair Lael Brainard to join the Biden Administration as head of the National Economic Council added fuel to the higher-for-longer narrative. Brainard is perceived to be the “most persuasive policy dove” at the Fed, as the Wall Street Journal’s Nick Timiraos puts it. Yields on the 10-year rose 4bps to 3.74%, paring some of the rises in yield after a large block buying of nearly 20,000 contracts in the 10-year futures. Across the pond, yields on 2-year Gilts jumped 19bps on a hot employment report. What is going on? Worries that China’s consumer rebound will underwhelm as consumers not spending Bloomberg reports that China’s attempt to engineer a consumer-led recovery may be hindered as funds issued by banks for consumer credit are in many cases funnelled to unintended destinations, especially for mortgage prepayments, but also for speculation in stocks. The rates on the new bank lending are often lower than those for mortgages. UK Jan. CPI out this morning undershoots expectations UK headline CPI out this morning at –0.6% MoM and +10.1% YoY vs. -0.4%/+10.3% expected and 10.5% YoY in December. The core figure was 5.8% YoY vs. 6.2% expected and 6.3% in Dec. US CPI sent confusing signals to the markets The US January CPI came in at 0.5% MoM, in-line with estimates, while the core CPI was at 0.4% MoM also as expected. December prints were however revised higher with headline up to +0.1% MoM from -0.1% previously, and core up to 0.4% MoM from 0.3% previously. Markets were wobbly on the release, as the YoY prints came in higher-than-expected at 6.4% for the headline (vs. 6.2% exp) and 5.6% for the core (vs. 5.5% exp). However, a key measure that Powell has highlighted earlier – core services ex shelter – cooled to 0.3% in the month from 0.4% previously. Housing contributed the most to the monthly increase in the CPI, but it is a lagged measure. Meanwhile, disinflation in goods slowed as core goods prices rose +0.1% MoM vs. -0.1% MoM prior. Overall, there wasn’t enough evidence that core inflationary pressures are cooling enough to support calls for the Fed to pivot. Fed speakers send market pricing for Fed path higher A chorus of Fed speakers last night talked about the slow pace of disinflation, suggesting the Fed isn’t yet taking comfort in the inflation trends. NY Fed President Williams repeated there is "still a ways to go" to control inflation and the current levels of inflation are far too high. His views on the terminal rate also differed slightly, in December he suggested rates between 5.00-5.50% is reasonable before last week changing the view to 5.00-5.25%. However, he has now seemingly switched back his views of the higher upper bound for the FFR to 5.50% in wake of the January inflation data. Philly Fed’s Patrick Harker noted that how far above 5% the Fed needs to go depends on incoming data, and Tuesday's inflation report shows inflation is not moving down quickly. Dallas President Logan stressed that tightening policy too little is the top risk. All three are voters this year. Thomas Barkin, a non-voter said it was about as expected and there's going to be a lot more inertia and persistence to inflation than the Fed thought. However he was slightly more dovish saying that if inflation settles, they may not go as far on the terminal but he stressed data dependence. Markets are now pricing in a higher terminal rate of 5.26% in July, and one rate cut has also been driven out of this year’s pricing. Berkshire Hathaway cuts stake at TSMC Warren Buffett’s investment company cut 86% of its stake in TSMC in the previous quarter in a quick reversal that is unusual for the investor. As the rivalry in chips is heating up between the US and China, Berkshire Hathaway is likely finding it uncomfortable to hold exposure to physical manufacturing in a conflict area. Earnings recap: Airbnb, GlobalFoundries, NU Holdings Airbnb delivered Q4 revenue that beat estimates growing 24% y/y and Q4 adj. EBITDA was $506mn vs est. $435mn, but the Q1 outlook took the market by surprise with Q1 revenue guidance at $1.75-1.82bn vs est. $1.68bn as travel demand remains strong. GlobalFoundries beat slightly on revenue and earnings with Q1 revenue guidance also coming out higher than estimated suggesting strong demand for computer chips. NU Holdings, the parent company behind Nubank, reports Q4 total revenue of $1.45bn vs est. $1.28bn and the second straight quarter of positive net income as the Brazilian bank continues to navigate the credit turmoil in Latin America due to the recent interest rate shock. Commonwealth Bank, Australia’s largest lender, issues cautious outlook as its customers feel ‘significant strain’ CBA’s shares sank almost 6%, falling from their record highs to $103, while also dragging down the broader Australian share market (ASXSP200.I). Australia’s biggest bank and lender reported disappointing profit results and guided for a challenging year ahead - putting aside more capital for bad debts, as higher price pressures continue to hurt consumers, along with falling home prices. Its net interest margin came in at 2.1%, which was on par with expectations, but its cash profit missed expectations, despite rising 8.6% YoY to $5.15 billion (vs $5.17 billion Bloomberg consensus). The big Bank announced a $1 billion share buy-back and consensus also expects 2023 profits to hit another record, and for margins to improve. CBA shares gapped down, wiping out a month of gains. Read next: Walmart Plans To Close Offices, Ford Invests In Battery Factories | FXMAG.COM What are we watching next? US January Retail Sales, Housing Survey set for release today -With the January CPI data leaving observers none the wiser on the future course of inflation, the market may remain sensitive to incoming data that offers signs of whether economic activity remains robust. Today’s focus is the January US Retail Sales data, which is expected to rebound sharply from the weak December numbers, possibly in part on out-of-date seasonal weightings. Consensus expectations are for headline Retail Sales to have risen a chunky +2.2% month-on-month, with the core, ex Auto and Gas figure to show +0.9%. Elsewhere, the February NAHB Housing Market Index, one of the more leading indicators on the US housing market, is also up today, expected to show further marginal improvement after bottoming in December at 31 and surprisingly rebounding to 35 in January. Earnings to watch Today’s US earnings focus is Kraft Heinz and Biogen with analysts expecting revenue growth of 8% y/y in Q4 for Kraft Heinz as the consumer staples company’s revenue track inflation. Kraft Heinz is also expected to expand its EBITDA margin in Q4. The biotechnology sector is still under pressure from higher interest rates and slower pipeline of drugs, so the industry is relying on the old guard to delivering results. However, Biogen is expected to report a –11% y/y revenue growth in Q4 and lower EBITDA compared to a year ago. Wednesday: Commonwealth Bank of Australia, Fortesque Metals Group, Wesfarmers, Shopify, Suncor Energy, Nutrien, Barrick Gold, Kering, EDF, Tenaris, Glencore, Barclays, Heineken, Nibe Industrier, Cisco Systems, Kraft Heinz, AIG, Biogen, Trade Desk Thursday: Newcrest Mining, South 32, Airbus, Schneider Electric, Air Liquide, Pernod Ricard, Bridgestone, Standard Chartered, Repsol, Nestle, Applied Materials, Datadog, DoorDash Friday: Hermes International, Safran, Allianz, Mercedes-Benz, Uniper, Sika, Deere Economic calendar highlights for today (times GMT) 0900 – Poland Jan. CPI 1000 – Eurozone Dec. Industrial Production 1330 – US Feb. Empire Manufacturing 1330 – US Jan. Retail Sales 1330 – Canada Dec. Manufacturing Sales 1400 – ECB President Lagarde to speak 1415 – US Jan. Industrial Production & Capacity Utilization 1500 – US Feb. NAHB Housing Market Index 1530 – US DoE Weekly Crude Oil and Product Inventories 0030 – Australia Jan. Employment Change / Unemployment Rate Source: Financial Markets Today: Quick Take – February 14, 2023 | Saxo Group (home.saxo)
FX Daily: Hawkish Riksbank can lift the krona today

FX Daily: Data can still lift the dollar

ING Economics ING Economics 15.02.2023 10:08
US CPI numbers were in line with consensus yesterday and offered more room for markets to raise Fed rate expectations. This hasn’t translated into a dollar rally, but we could still see at least some support coming the greenback’s way as US data for January should prove strong. Polish inflation should confirm a different inflation story in the CEE region USD: Still eyes on data There were no fireworks in the FX market yesterday as January’s CPI figures matched expectations. Evidence of a slowdown in the disinflation process is giving an opportunity to the Federal Reserve and markets to feel more comfortable about more tightening beyond March. Fed Funds futures are now pricing in 68bp of extra hikes, having added around 7bp in price after the inflation release. This has, however, failed to translate into a materially stronger dollar for now, which is largely a consequence of some resilience in global risk sentiment despite the reinforcing of hawkish Fed bets. We think data will remain the key driver for the dollar and the global risk environment, as the depth of the US economic slowdown is still a key driver of rate expectations, especially when it comes to the timing, size and pace of Fed easing in the medium term. We think that January’s US data may come in rather strong throughout on the back of weather-related factors and this may keep short-term US rates and the dollar supported in the near term. Today, we’ll keep a close eye on retail sales data, industrial production and empire manufacturing, which should all improve.  Francesco Pesole EUR: Lagarde's speech may be a non-event EUR/USD remains primarily a dollar story, and despite having survived the US CPI risk event, we continue to see some downside risks in the near term on the back of raising bets on Fed tightening and a lack of drivers from the euro side. In this sense, we don’t think that today’s speech by European Central Bank President Christine Lagarde will drive major market moves. After her attempts and those (more successful) of her governing council colleagues to keep rate expectations high in the eurozone, we don’t see how there is much she could add to the central bank’s rhetoric at this stage. The release of eurozone-aggregate industrial production data for December should not have any material market impact.  We see room for EUR/USD to slip back to 1.0650/1.0700 by the end of this week on the back of a strengthening dollar.  Francesco Pesole GBP: Bearish story is running out of steam This morning's UK inflation data missed estimates (5.8% vs est. 6.2% year-on-year). Looking at the details, this is also true of 'core services', the index we know the Bank of England is paying closest attention to because it includes the slowest-moving/most persistent components of the inflation basket. It seems like hospitality is doing some of the work here. A word of caution - by definition, the BoE's insistence on looking at 'inflation persistence' means it's not looking at single-month changes in inflation. But this nevertheless goes firmly in the opposite direction of what the central bank has forecast. We would still expect a 25bp hike in March, but if this trend continues then it would heavily lean towards a pause in May. The EUR/GBP fall could extend and force a break below 0.8800, but we think the bearish story may soon run out of steam and we favour a rebound to 0.9000 over the course of 2023. Francesco Pesole PLN: Poland joining the inflation club As usual this week, Poland will be in the spotlight today again. We expect January inflation to jump from 16.6% to 18.1% year-on-year, above market expectations. Last Friday, we saw numbers from Hungary and the Czech Republic surprise to the upside by 50bp and 40bp, respectively, and we should see a similar picture today in Poland. The market has already partially corrected expectations for the first rate cut by the National Bank of Poland in recent days, but we believe there is still room for market rates to go up at the short end of the curve. And today's inflation should provide that impetus. Thus, a further improvement in the rate differential could at least stop the Polish zloty from weakening for a while. However, the Polish story does not end today. On Thursday, we will see the European Court of Justice's decision on the FX mortgage case and on Friday, S&P's rating review will be published. The ECJ decision is probably the main reason why the zloty has been underperforming the region recently. While we do not expect the sovereign rating to be downgraded, after the Hungarian experience, the market may wonder whether the delay in accessing EU money will be a problem for rating agencies in the case of Poland as well. Thus, today the zloty could look towards 4.74 EUR/PLN. However, for the rest of the week we remain bearish and rather expect weaker values near 4.80 EUR/PLN. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

USD/JPY Is Above 133.30, GBP/USD Droped Form $1.21 to $1.20, The Aussie Pair Is Trading Below $0.69

Kamila Szypuła Kamila Szypuła 15.02.2023 12:21
The dollar rose on Wednesday amid stubbornly high US inflation data and sharp interest rate talks from Federal Reserve officials. Year on year prices increased (CPI) by 6.4%. This is down from 6.5% in December, but above economists' expectations of 6.2%. The Core CPI, which excludes volatile food and energy prices, rose 0.4% as expected. More importantly, the underlying details of the report revealed that the core services' inflation, which the Fed pays close attention to, stood at 7.2% on a yearly basis. These figures showed markets that the disinflation has not picked up any steam in January and reminded that the Federal Reserve is unlikely to entertain the idea of a policy pivot. USD/JPY Kazuo Ueda, the Japanese government's nominee to be the next governor of the Bank of Japan (BoJ), will inherit a difficult set of problems when he takes over from incumbent Haruhiko Kuroda on April 8. Japanese inflation y/y reached 4% in December, the highest level since January 1991. The new central banker will have to decide when and by how much the BoJ needs to start reducing its very loose monetary policy in order to keep inflation in check while allowing enough monetary slack to allow for economic growth. As other countries have recently learned, once inflation takes root, it becomes increasingly difficult to bring it down. The yen pair after yesterday closed trading near 133.00 today in the first hours of trading USD/JPY started a decline towards 132.55. The drop in the first hours of trading was not sustained and the pair rose above 133.00. At the time of writing, the yen pair is trading at 133.31. EUR/USD The EUR/USD pair started the day trading above 1.0740 but fell towards 1.0710 in the following hours. EUR/USD gained momentum in the European session and traded near 1.0730 but lost momentum and is now trading around 1.0715. According to ING, remarks by European Central Bank President Christine Lagarde later probably won't move the euro materially. EUR/USD pair should remain driven by dollar moves and faces near-term "downside risks" as the market raised its U.S. interest rate expectations following Tuesday's higher-than-expected inflation data. Read next: In The United States The Demand For Warehouse Space Is Still Growing| FXMAG.COM GBP/USD The British pound fell this morning after the UK CPI. The report showed weaker than expected inflation data, both y/y and m/m, concerning headline and core inflation, respectively. The UK's Office for National Statistics reported on Wednesday that the Consumer Price Index declined 0.6% on a monthly basis in January, causing the annual rate to retreat to 10.1% from 10.5%. The Core CPI also edged lower to 5.8% from 6.3% on a yearly basis, coming in lower than the market expectation of 6.2%. Although it's too early to say how these figures could influence the Bank of England's (BoE) policy outlook, the reaction suggests that markets have scaled back hawkish BoE bets. The Cable pair started trading at a high of 1.2175 on Wednesday, but in the following hours it started to fall initially to 1.2150 and then to 1.2100. Currently, GBP/USD is below 1.2100, at 1.2076. AUD/USD The Aussie pair is just below 0.6900. The AUD/USD pair is under strong selling pressure on Wednesday and is pulling further back from its over-week high. The RBA's latest monetary policy statement showed the central bank revised its inflation forecast for this year higher, saying price pressures were spreading to services and wages. The communiqué suggests two more interest rate hikes in the coming months and possibly a third if inflation remains high. Source: investing.com, finance.yahoo.com
Bank of England hikes rates and keeps options open for further increases

UK Inflation Continues To Fall, But Also British Pound (GBP) Too

Kenny Fisher Kenny Fisher 15.02.2023 14:08
UK inflation falls but remains above 10% The British pound is sharply lower on Wednesday. In the European session, GBP/USD is trading at 1.2069, down 0.88%. UK inflation continues to fall, although it clearly has a long way to go. January’s inflation dropped to 10.1%, down from 10.5% in December and below the consensus of 10.3%. The core rate dropped to 5.8%, down from 6.3% in December and lower than the consensus of 6.2%. These numbers offer room for a bit of optimism, as does the drop in wage growth on Tuesday. Still, inflation is a bumpy road that will feature highs and lows and market participants would be wise not to make decisions based on one release. With headline inflation still in double digits, the Bank of England will have to continue raising rates, with the most likely scenario being a 25-basis increase at the Mar. 22 meeting. In the US, inflation in January ticked lower to 6.4%, down from 6.5% but higher than the forecast of 6.2%. It was a similar story for the core rate, which dropped from 5.7% to 5.6% and was above the forecast of 5.5%. Inflation is still falling but the trend may be stalling, which will provide support for the Federal Reserve’s hawkish stance. After the US inflation release, several Fed members reiterated the “higher for longer” theme. Fed members Barkin, Logan and Harker all had a similar message that the Fed would likely raise rates if inflation did not fall fast enough. The Fed has projected a federal funds rate of 5% to 5.5% by the end of the year, but given the strong economy and high inflation levels, there have been forecasts of a terminal rate as high as 6%.   GBP/USD Technical 1.2180 has strengthened in resistance as GBP/USD is down sharply. 1.2304 is the next resistance line 1.2071 and 1.1947 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
These findings of a review of the Reserve Bank of Australia may surprise you!

The Bearish Trend Of The AUD/USD Pair Will Continue Today

InstaForex Analysis InstaForex Analysis 16.02.2023 08:00
With demand dwindling on Wednesday, AUD/USD fell and reached the target support level of 0.6873, which is also January 19's low. It seems like the bearish trend will continue today as the candlestick opened under the balance and MACD lines. If the pair consolidates under the achieved level, it is likely that the price will head towards the support level of 0.6730. After all, it is firmly fixed under the balance and MACD lines in the four-hour (H4) timeframe. There is a slight struggle around the support level of 0.6873, but since the Marlin oscillator is in negative territory and the daily trend is downward, the level can be overcome soon. After the price fixes under this level, there will be a further move towards 0.6730.   Relevance up to 03:00 2023-02-17 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335249
The EUR/USD Pair Consolidated In The Downward Trend Area

The EUR/USD Pair Consolidated In The Downward Trend Area

InstaForex Analysis InstaForex Analysis 16.02.2023 08:01
Euro has once again broke the support level of 1.0660 after coming from a weekly consolidation. This indicates the determination of the market; thus, it is likely that there will be another breakdown of the support level today. The price could also decline to the target level of 1.0595. A consolidation under it will open the way to 1.0470. The signal line of the Marlin oscillator is completing. There is a consolidation in the negative area (grey rectangle on the chart), and after it there will be a breakdown of the signal line. On the four-hour (H4) timeframe, price has consolidated under the balance line, while the Marlin oscillator consolidated in the downward trend area. The situation on both timeframes is bearish, so there is a high chance that they will approach the target levels.   Relevance up to 03:00 2023-02-17 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335253
Euro against US dollar and British pound - Technical Analysis - May 17th

There Will Be A Further Downward Move In GBP/USD Pair

InstaForex Analysis InstaForex Analysis 16.02.2023 08:02
Pound fell by 140 pips as sellers became active yesterday due to the weaker-than-expected inflation data. It indicated that core CPI fell from 12.9% y/y to 12.6% y/y in January. There was a price reversal on the daily (D1) timeframe, both from the MACD line and the Marlin oscillator. This means that traders have to take the target level of 1.1900 in order to open the way towards 1.1737. On the four-hour (H4) timeframe, the price has consolidated under the balance and MACD lines, while the Marlin oscillator consolidated in the area of the downward trend. This indicates that there will be a further downward move in GBP/USD   Relevance up to 03:00 2023-02-17 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335251
FX Daily: Euro’s attractiveness on the rise

Analysis Of The EUR/USD Pair; Key Support At 1.0655 Is Safe And The Next Part For The Impulsive Rally

Torben Melsted Torben Melsted 16.02.2023 08:04
The correction from 1.0804 pushed lower than expected but stayed nicely above the key support at 1.0655 to confirm the new impulsive rally we have been looking for. Short-term we would like to see a break above minor resistance at 1.0745 to confirm that key support at 1.0655 is safe and the next part for the impulsive rally in wave 5 towards the target area between 1.1108 and 1.1188 is developing. We could see EUR/USD moving above the 1.1108 - 1.1188 target area, but as always let's take the expected rally higher in baby steps. This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/312949
InstaForex's Irina Manzenko talks British pound amid latest events

British Pound (GBP) Took A Hit With Cooler Inflation, Crude Oil Prices Still Depressed

Saxo Bank Saxo Bank 16.02.2023 08:15
Summary:  In yet another sign of likely re-acceleration in cyclical growth, US retail sales surprised on the upside. Although Fed rate pricing was unchanged with terminal rate above 5.25%, US equities reversed early losses to close in some gains after a strong European session. Dollar rose to fresh highs before softening later, as AUD was troubled by tumbling metal prices and GBP took a hit with cooler inflation print. Crude oil prices still depressed despite IEA raising the demand outlook, and Gold is close to testing key support levels.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) advanced despite rate fear U.S. equities declined initially following a strong retail sales report that further reduced the probability of any rate cut in 2023 and to the contrary, increased the odds that the Fed may need to hold rates higher for longer. Nonetheless, the stock market was able to walk away from the good-news-is-bad-news script and spent the rest of the day clawing back the early losses and finishing the session higher.  The S&P500 gained 0.3% and Nasdaq 100 advanced 0.8%. Communication services and consumer discretionary, each rising 1.2%, led the advance in the S&P 500. Airbnb (ABNB:xnas) jumped 13.3% after reporting an earnings beat. Devon Energy (DVN:xnys) was the worst performer within the S&P500. The oil and gas producer plunged 10% after reporting a decline in Q4 earnings. The ADR of Taiwan Semiconductor Manufacturing (TSM:xnys) lost 5.3% following filings showing that Warren Buffett’s Berkshire Hathaway reduced its stake in the chip maker. Cisco (CSCO:xnas) gained 3.5% in the extended-hour trading after reporting quarterly revenues and earnings beating estimates and raising guidance for the rest of the year. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) rose further on solid retail sales Yields on the 10-year Treasury notes jumped 6bps to 3.8% following a stronger-than-expected retail sales report and a rebound in the Empire State Manufacturing Index. Headline retail sales jumped by the most in almost two years. While the 20-year Treasury bond auction received decent demand with bid/cover ratio at 2.54, new issuance of around USD30 billion from corporate, including USD24 billion from Amgen weighed on the market. Yields on the 2-year climbed 2bps to 4.63%. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) dragged by property stocks Hang Seng dropped 1.4% on Wednesday to levels last seen on January 4 and pared its 2023 gain to only 5.2%. The aggregate balance held by banks at the Hong Kong Monetary Authority, a proxy of interbank liquidity, fell to HK80 billion, following HKMA’s intervention to sell USD against HKD to cap the USDHKD from going above 7.85 the upper limit of the special administrative region’s link-exchange-rate regime. State-owned Economic Daily in the mainland warns about the re-emergence of speculative activities in properties in some cities and calls for more targeted approaches in support of genuine household demand for housing. Chinese developers retreated, with Country Garden (02007:xhkg) falling 5.6%, China Overseas Land & Investment (00688:xhkg) losing 4.6%, and Longfor (00960:xhkg) down 3.5%. Sportswear company Anta (02020:xhkg) dropped 3.6% on speculation of majority shareholders moving shares to the CCASS clearing system to get ready for a sale. Baidu (09888:xhkg) bucked the market decline and rallied over 3.8% supported by the somewhat return of the hype on the AI-generated content concept. In A-shares, CSI300 fell 0.5%. AI-generated content concept stocks advanced while real estate, domestic consumption, financial, healthcare, and non-ferrous metal names retreated. Australia equities (ASXSP200.I) moved lower to one-month lows, weighted by CBA. Gold miners and coal companies' results ahead Yesterday Commonwealth Bank, Australia’s largest lender, issued a cautious outlook as its customers are feeling ‘significant strain’. Its shares sank about 6%, falling from their record highs to $103, while also dragging down the broader Australian share market (ASXSP200.I). Australia’s biggest bank and lender reported disappointing profit results and guided for a challenging year ahead - putting aside more capital for bad debts, as higher price pressures continue to hurt consumers, along with falling home prices. Its net interest margin came in at 2.1%, which was on par with expectations, but its cash profit missed expectations, despite rising 8.6% YoY to $5.15 billion (vs $5.17 billion Bloomberg consensus). The big Bank announced a $1 billion share buy-back and consensus expects 2023 profits to hit another record, and for margins to improve – that’s good to know for long term investors. However, for potential traders, it’s worthwhile noting, yesterday CBA shares gapped down, meaning the market may fill that gap and buy the dip today or in coming days. Today we will be watching NAB’s quarterly results as well as results from miners, coal giant Whitehaven Coal and gold company Evolution Mining with the market expecting strong results. FX: AUD and GBP lagged, JPY rallies at Asia open Further gains in the dollar were seen last night as yields continued to surge, albeit at a softer pace, after US retail sales also surprised to the upside. AUDUSD was the biggest loser on the G10 board amid tumbling metal prices and RBA governor Lowe refusing to step down. AUDUSD dropped 40bps as January employment data disappointed with a fall of 11.5k vs. expectations of +20k. GBPUSD plunged below 1.2100 on the cooler-than-expected inflation data. EURUSD also touched lows of 1.0660 despite Lagarde reiterating that the ECB intends to hike by another 50bps next month. JPY gains returned in Asia after USDJPY rose to 134+ levels overnight, with Japan export data surprising to the upside with a rise of 3.5% YoY vs. -1.7% expected. Aussie dollar falls as AU jobs data misses. Watching AUDUSD and AUDGBP The Aussie dollar stumbled again, falling 0.4% after Australian employment data came out weaker than expected, with the unemployment rate surprisingly rising to 3.7% (vs the market expecting a steady rate), while jobs surprisingly fell 11,500 when the market expected 20,000 jobs to be added. We saw the AUD lose its footing yesterday after CBA guided for a cautious outlook, setting to the tone for a pull back on spending in Australia. Also consider watching the AUDGBP after the UK received slightly softer than expected UK CPI, which allows the bank of England to sit on their hands for a little longer, while the RBA can keep hiking following hotter than expected CPI.  Crude oil (CLH3 & LCOJ3) lower on inventory build despite IEA’s bullish demand outlook A series of signals from US CPI reported on Tuesday to retail sales print out last night suggest more ammunition for the Fed to raise rates. This has boosted the market pricing of the Fed terminal rate, and dollar strength is back in focus, weighing on commodity prices. Crude oil prices extended their losses after US oil inventories rose 16.3mn barrels to 471mn barrels against expectations of 1.17mn. WTI prices were still below $79/barrel while Brent stayed close to $85. The International Energy Agency (IEA) raised its demand growth estimates by 0.1mb/d to 2mb/d for 2023, but this was overshadowed by swelling US oil inventories. Gold (XAUUSD) close to testing key support Gold prices fell further to $1830/oz as US yields surged higher after the January CPI print, and a hawkish tilt was also seen in Fed commentaries. Last night, US retail sales was also hot suggesting more room for the Fed to hike rates, which boosted the USD. The next important levels include the 1,829 level, which is the 38.2% retracement of the rally off the November lows, the 1,809 area which was broken on the way up, and then the 200-day moving average, currently coming in just above 1,775. Pressure on gold miners to do more deals is rising, despite Newcrest’s rejection of the takeover bid from the world’s biggest gold miner Newmont (more below).  Read next: USD/JPY Is Above 133.30, GBP/USD Droped Form $1.21 to $1.20, The Aussie Pair Is Trading Below $0.69| FXMAG.COM What to consider? US retail sales jump higher January retail sales in the US jumped higher by the most in almost two years, in another signal that the US consumer demand is holding up strongly despite high inflation and interest rate pressures. Retail sales were by 3.0% from a decline of 1.1% in December and above the 1.8% expected. Strength was broad-based, with ex-gas/autos rising 2.6% from the prior -0.7%. The control group, which is a useful gauge of consumer spending data, rose 1.7%, also beating expectations of 0.8% and above the prior -0.7%. Factory output also beat estimates, rising 1.0%, although industrial production was flat vs. +0.5% gains expected, mostly weighed by reduced heating demand in January. Geopolitics on watch keeps Saxo’s Defense basket in focus Russia said its troops had broken through two fortified lines of Ukrainian defenses on the eastern front, as the one-year mark of the invasion approaches. The advances come as Western allies announced more military aid for Kyiv including artillery rounds. The situation may continue to become more tense as Ukraine forces take the time to get trained with the new US equipment. Meanwhile, China is warnings retaliation against US entities involved in the shooting of the balloon. Biden is considering a public address on the downing of an alleged Chinese spy balloon and other unidentified objects. With geopolitical tensions continuing to be on a rise, Saxo’s equity theme basket on Defense remains worth a consideration. Teher were also reports that Germany is poised to increase its defense budget by as much as €10 billion next year, which continues to suggest strong defense focus in the coming years. Newcrest rejects Newmont's takeover bid  Newcrest Mining (NCM) rejected the takeover by Newmont saying it undervalues the company, but kept the door open to a revised offer. Australia’s biggest gold miner reported broadly stronger than expected results – given the rise of the gold price. Half year earnings (EBITDA) hit US$919m, that was 4% above consensus. And the gold giant declared stronger than expected dividends of $0.15 per share for the half-year and a $0.20 special dividend. However, net debt rose far more than expected. NCM retained expectations for a strong 2H operational performance. For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Markets Today: US retail sales soar in another sign of a hot economy – 16 February 2023 | Saxo Group (home.saxo)
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

NZD/USD Pair Is Likely To Remain Bearish Trend

TeleTrade Comments TeleTrade Comments 16.02.2023 08:18
NZD/USD picks up bids to probe two-day downtrend near six-week low. Support-turned-resistance line from early January guards immediate upside. 200-SMA appears a tough nut to crack for bulls, sellers can aim for 2023 bottom. Downbeat oscillators, sustained trading below the key technical levels favor sellers. NZD/USD renews intraday high near 0.6290 as it bounces off a 1.5-month low marked the previous day during Thursday’s mid-Asian session. In doing so, the Kiwi pair takes clues from the nearly oversold RSI (14) to portray a corrective bounce after declining in the last two consecutive days, not to forget mentioning that it posted the biggest daily loss in two weeks on Wednesday. It should, however, be noted that the recovery moves need to cross the six-week-old previous support line, now resistance around 0.6400, to convince intraday buyers. Even so, a fortnight-old descending trend line and the 200-bar Simple Moving Average (SMA), respectively near 0.6365 and 0.6385 in that order, could challenge the pair’s further upside. In a case where the NZD/USD pair remains firmer past 0.6385, the 0.6400 could act as a validation point for the rally targeting the monthly peak surrounding 0.6540. On the contrary, pullback moves should break the 0.6250 horizontal support to recall the NZD/USD bears. Following that, the previous monthly low of 0.6190 and late November 2022 bottom around 0.6155 will gain the pair seller’s attention. Overall, NZD/USD is likely to remain bearish despite the latest rebound. NZD/USD: Four-hour chart Trend: Bearish remaining time till the new event being published U.S.: Leading Indicators
Australian dollar - the sharp drop can be attributed to technical factors and hawkish Fed

The Aussie Pair (AUD/USD) Is Expected A Limited Recovery

TeleTrade Comments TeleTrade Comments 16.02.2023 08:26
AUD/USD rebounds from 0.6865-70 support confluence to consolidate biggest daily loss in two weeks. Convergence of head-and-shoulders’ neckline, two-month-old ascending trend line challenges bears. Buyers need validation from 21-DMA to retake control. AUD/USD grinds near intraday high surrounding 0.6915 as it reverses the losses post Australian employment data release during early European morning on Thursday. In doing so, the Aussie pair portrays a recovery move from the 0.6865-70 support confluence that encompasses the lower line of the six-week-old head-and-shoulders (H&S) bearish chart pattern and a two-month-old ascending trend line. It’s worth noting, however, that the bearish MACD signals and the steady RSI (14) line join the Aussie pair’s sustained trading below the 21-DMA to challenge the bullish bias unless the quote rises past the immediate DMA hurdle surrounding the 0.7000 psychological magnet. Even so, the weekly near 0.7030 and the monthly peak of 0.7157 could challenge the AUD/USD bulls afterward. In a case where the AUD/USD buyers remain in the driver’s seat past 0.7157, the May 2022 high near 0.7285 will be on their radars. On the contrary, a successful downside break of 0.6865 key support level is necessary for the Aussie pair bears to keep the reins. Following that, the 200-DMA surrounding 0.6800 and the late 2022 low near 0.6630 may act as validation points during the theoretical south-run targeting the 0.6500 round figure. Overall, AUD/USD remains bearish but the downside move needs validation from 0.6865. AUD/USD: Daily chart Trend: Limited recovery expected remaining time till the new event being published U.S.: Leading Indicators
The Indian Rupee Pair Takes Clues From The Receding Fears Of Hawkish Fed Rate Moves

The USD/INR Pair Is Epected A Limited Downside Movement

TeleTrade Comments TeleTrade Comments 16.02.2023 08:30
USD/INR extends pullback from four-month-old resistance line amid sluggish markets. US Dollar pares gains around six-week high as Treasury bond yields retreat. China-linked headlines also weigh on prices amid cautious optimism in Asia. USD/INR takes offers to refresh the intraday low near 82.65 while extending the previous day’s U-turn from the short-term key trend line resistance during early Thursday. In doing so, the Indian Rupee (INR) pair benefits from the mildly positive sentiment in Asia, as well as the US Dollar’s pullback from a six-week high marked on Wednesday. Risk appetite improves in Asia, despite looming Fed concerns and mixed headlines from China, not to forget the US debt ceiling woes. The reason could be linked to a retreat in the US Treasury bond yields. Earlier in the day, China President Xi Jinping crossed wires while showing readiness to deepen industrial and investment cooperation with Asia. Following him were upbeat comments from Chinese Finance Minister Liu Kun who said that the 2023 fiscal revenue will grow this year, though the growth rate will not be too high, per the Chinese state media. Elsewhere, fears of witnessing the US debt-ceiling crisis, as warned by the US Congressional Budget Office (CBO) on Wednesday per Reuters, suggested a faster solution to the big problem in the upcoming days and probed the US Treasury bond yields’ upside. Amid these plays, the S&P 500 Futures print mild gains around 4,165 while extending the previous day’s gains whereas the US 10-year Treasury bond yields retreat following the run-up to a 1.5-month high marked on Wednesday, down two basis points to near 3.78% by the press time. It’s worth noting that the recently firmer Oil prices and the US-data-backed hawkish expectations from the Federal Reserve (Fed) can probe the USD/INR bears ahead of the second-tier US data concerning the housing market, industrial activity and producer prices.   Read next: USD/JPY Is Above 133.30, GBP/USD Droped Form $1.21 to $1.20, The Aussie Pair Is Trading Below $0.69| FXMAG.COM Technical analysis USD/INR portrays a clear U-turn from a downward-sloping resistance line from October 19, poking the 10-DMA support amid easing the bullish bias of the MACD by the press time. With this, the Indian Rupee (INR) pair is likely declining toward a three-week-old ascending support line, close to 82.50 by the press time. However, the USD/INR bears should remain worried unless witnessing a clear downside break of the 50-DMA support of 82.24. Meanwhile, the USD/INR recovery needs validation from the four-month-old descending trend line, around the 83.00 round figure at the latest, to recall the pair buyers. USD/INR: Daily chart Trend: Limited downside expected
USD/CAD - Canadian economy added 41,400 jobs beating expectations

A Modest US Dollar Weakness Weighs On The USD/CAD Pair

TeleTrade Comments TeleTrade Comments 16.02.2023 08:31
USD/CAD meets with some supply and extends the overnight pullback from the weekly high. An uptick in oil prices underpins the Loonie and exerts pressure amid modest USD weakness. Hawkish Fed expectations should help limit deeper USD losses and lend support to the major. The USD/CAD pair comes under some selling during the Asian session on Thursday and moves away from the weekly high, around the 1.3440 region touched the previous day. The pair currently trades around the 1.3380-1.3375 region and is pressured by a combination of factors. Crude oil prices gain some positive traction and snap a three-day losing streak amid hopes for a strong recovery in fuel demand. In fact, both the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) forecast a rebound in crude demand later this year. This helps offset a substantial rise in the US crude inventories and acts as a tailwind for the black liquid, which, in turn, underpins the commodity-linked Loonie. Apart from this, a modest US Dollar weakness weighs on the USD/CAD pair. In fact, the USD Index, which tracks the Greenback against a basket of currencies, extends the overnight pullback from a six-week high amid retreating US Treasury bond yields. This, along with a generally positive tone around the equity markets, is seen denting demand for the safe-haven buck. That said, the prospects for further policy tightening by the Fed should limit the downside for the US bond yields and the USD. This, in turn, warrants some caution before positioning for any further depreciating move for the USD/CAD pair. Investors seem convinced that the US central bank will continue to hike interest rates in the wake of stubbornly high inflation. The bets were lifted by the US CPI report and hawkish comments by several Fed policymakers on Tuesday. Furthermore, the upbeat US monthly Retail Sales figures released on Wednesday indicated that the economy remains resilient despite rising borrowing costs. This should allow the Fed to stick to its hawkish stance for longer and supports prospects for the emergence of some USD dip-buying. Market participants now look forward to the release of the US Producer Price Index (PPI), due later during the early North American session. This, along with the US bond yields and the broader risk sentiment, will influence the Greenback. Apart from this, traders will take cues from oil price dynamics to grab short-term opportunities around the USD/CAD pair.
InstaForex's Ralph Shedler talks Euro against Japanese yen

The USD/JPY Pair Remains On The Bull’s Radar

TeleTrade Comments TeleTrade Comments 16.02.2023 08:34
USD/JPY snaps three-day uptrend as it retreats from six-week high. Convergence of one-month-old previous support line, ascending trend line from the last Friday challenges bears. Firmer oscillators add strength to the upside bias while 200-SMA acts as additional downside filter. USD/JPY prints the first loss-making day in four as bulls take a breather around the 1.5-month high during early Thursday. In doing so, the Yen pair flirts with the 133.60 support confluence heading into the European session. Although the overbought RSI (14) triggered the USD/JPY retreat, a convergence of the resistance-turned-support line from January 18 and a one-week-old ascending trend line challenges the Yen pair sellers around 133.60. On the same line are the bullish MACD signals and the pair’s higher-low formation on the Daily chart. It’s worth noting, however, that the quote’s further recovery needs validation from the 134.00 round figure to challenge the latest high of 134.35. Following that, the previous peak of around 134.80 and the December 2022 top near 138.20 will be in focus. On the flip side, a clear break of the 133.60 support confluence can quickly drag the USD/JPY price towards the 200-Simple Moving Average (SMA) support of 130.70. Read next: USD/JPY Is Above 133.30, GBP/USD Droped Form $1.21 to $1.20, The Aussie Pair Is Trading Below $0.69| FXMAG.COM Should the quote remains weak past 130.70, the 130.00 round figure and the previous weekly bottom surrounding 129.80 could please the USD/JPY bears before directing them to the one-month-old ascending support line, close to 129.00 by the press time. Overall, USD/JPY remains on the bull’s radar despite the latest pullback from the multi-day high. USD/JPY: Four-hour chart Trend: Limited downside expected remaining time till the new event being published U.S.: Leading Indicators
US dollar pressured by Euro and Swiss franc. EUR and CHF supported by data and a rate hike

A Light Calendar May Allow The USD/CHF Pair To Remain Depressed

TeleTrade Comments TeleTrade Comments 16.02.2023 08:37
USD/CHF clings to mild losses while snapping two-day winning streak. Retreat in US Treasury bond yields, DXY joins failure to cross six-week-old resistance to trigger pullback moves. China, US debt-ceiling talks seem underpinning cautious optimism but hawkish Fed bets keep buyers hopeful. USD/CHF prints mild losses around 0.9225 as it portrays the first daily fall in three during early Thursday in Europe. In doing so, the Swiss Franc (CHF) pair benefits from the broad US Dollar pullback amid inactive markets while consolidating the latest gains. Market sentiment improves as Chinese President Xi Jinping shows readiness to deepen industrial and investment cooperation with Asia. Following him were upbeat comments from Chinese Finance Minister Liu Kun who said that the 2023 fiscal revenue will grow this year, though the growth rate will not be too high, per the Chinese state media. On a different page, the chatter surrounding the US debt-ceiling crisis, as warned by the US Congressional Budget Office (CBO) on Wednesday per Reuters, seemed to have raised hopes of a faster solution to the big problem in the upcoming days and probed the US Treasury bond yields’ upside. The same joined a lack of major data/events to challenge the US Dollar Index (DXY) that retreat drops 0.20% to 103.65 at the latest, after rising to the 1.5-month high the previous day. It should be noted that the strong US data propelled the US bond yield and the greenback the previous day amid escalating hopes of more rate hikes from the Fed. On Wednesday, US Retail Sales growth jumped to 3.0% YoY in January versus 1.8% expected and -1.1% prior. Further, The Retail Sales ex-Autos grew by 2.3% in the same period, compared to analysts' estimate of +0.8%. On the same line, the NY Empire State Manufacturing Index for February improved to a three-month high of -5.8 versus -18.0 expected and -32.9 market forecasts. Alternatively, the US Industrial Production marked 0.0% MoM figures for January, compared to analysts’ estimate of 0.5% and -0.7% previous readings, but failed to push back the hawkish bias surrounding the Federal Reserve’s (Fed) next move. That said, the market’s bets on the Fed’s next moves, as per the FEDWATCH tool of Reuters, suggest the US central bank’s benchmark rate is to peak in July around 5.25% versus the December Federal Reserve prediction of 5.10% top rate. Read next: USD/JPY Is Above 133.30, GBP/USD Droped Form $1.21 to $1.20, The Aussie Pair Is Trading Below $0.69| FXMAG.COM Against this backdrop, the S&P 500 Futures print mild gains around 4,165 while extending the previous day’s gains whereas the US 10-year Treasury bond yields retreat following the run-up to a 1.5-month high marked on Wednesday, down two basis points to near 3.78% by the press time. Looking ahead, a light calendar may allow the USD/CHF to remain depressed while the second-tier US data concerning the housing market, industrial activity and producer prices can entertain traders ahead of the next week’s Minutes of the latest Federal Open Market Committee (FOMC) monetary policy meeting. Technical analysis A downward-sloping trend line from January 06 joins the 50-DMA to highlight 0.9250 as the key upside hurdle for the USD/CHF buyers to cross before taking control. Even so, bullish MACD signals and a steady RSI (14) line hints at the pair’s upside potential.
USDX Will Try To Test And Break Below The 103.50 Level

FX Daily: Short end continues to drive the dollar

ING Economics ING Economics 16.02.2023 08:53
The dollar is holding onto recent gains. The continuation of better US activity data this quarter provides leeway for the Fed to remain hawkish and is keeping short-dated US yields firm. It is hard to see this changing in the short term. The data calendar is quiet today, but we have several Fed and ECB speakers. Look out for more on Polish FX mortgage news today USD: A delicate balance Another day and another piece of positive US activity data. Yesterday saw a strong January retail sales release. Though boosted by warmer weather, the data still positively contributes to the first quarter activity story where the Atlanta Fed's GDPNow measure for the first quarter has been revised up to 2.4% from 2.2%. 'Wot recession?' some might ask. The data provides ammunition for the Fed to remain in hawkish mode and for the market to continue to price two to three more 25bp Fed rate hikes by the summer. February's hawkish re-assessment of Fed policy has lifted short-dated US yields by 50bp over the last two weeks and reinserted a little volatility back into the interest rate and FX space. The 2-10 year US Treasury curve remains as inverted as at any point in this cycle - providing the dollar with support. Arguably the dollar could/should have traded even stronger given the backup in US rates. The reason it has not traded stronger is probably down to the risk environment. Equity markets are holding onto early-year gains and recent buy-side investor surveys show that cash levels - though dipping - are still far from levels to suggest the buy-side is fully invested in this equity rally. Indeed, surveys still point to underweight positioning in equity markets.   We suspect this delicate balance between a hawkish Fed and a buy-side still looking to add to risk assets will leave the dollar range-bound for the rest of this quarter. 1.05-1.10 could be the broad range in EUR/USD and something like 128-136 for USD/JPY - the latter also having to deal with a new Bank of Japan governor. For today, the US focus will be on the January PPI numbers (core expected to decelerate to 4.0 from 4.6% year-on-year), initial claims and the Philly Fed business outlook. We will also hear from the Fed hawks Loretta Mester (1445 CET) and James Bullard (1830). DXY should trade within a narrow 103.50-104.00 range. Chris Turner EUR: 1.08 remains our 1Q forecast It looks like EUR/USD is settling into a broad 1.05-1.10 trading range this quarter - leaving us comfortable with the EUR/USD profile we outlined in our latest FX talking publication: 'Soft landing, hard landing, no landing?'. That profile saw EUR/USD ending the first quarter near 1.08 before pushing decisively above 1.10 in the second as the US disinflation story accelerated at a time when China was reopening. The European Central Bank hiking a further 75bp - taking the deposit rate to 3.25% in May - certainly helps too, although the recent repricing in the Federal Reserve cycle is somewhat muting this story. There is not much in the way of eurozone data today and perhaps the most interesting ECB speaker will be Chief Economist, Philip Lane. A 1600CET he delivers the Dow Lecture at the NIESR in London - the lecture entitled: 'The Euro Area Hiking Cycle: An Interim Assessment'. Presumably, he will not want to push back too much against the 115bp of tightening priced by the markets this summer - even though we think it will be closer to 75bp.  EUR/USD is bouncing off the recent 1.0650/0660 lows helped by a slightly positive risk environment coming out of Asia. We would expect it to continue trading well within the confines of a 1.0650-1.0750 range today. Chris Turner GBP: Gains proving hard work Sterling continues to show high sensitivity to monetary policy. This week's slightly softer-than-expected wage and core CPI data have seen sterling hand back a budding rally. We suspect this will be the story for most of this year, where we see EUR/GBP trading in the 0.89/90 area. GBP/USD may, however, get a lift in the second quarter if we are right with our dollar call. The UK data calendar is quieter today ahead of tomorrow's release of January retail sales. Bank of England Chief Economist, Huw Pill, speaks at 1800CET, where he delivers a fireside chat on monetary policy. He's been seen as a little more hawkish recently and may choose to maintain that position until the BoE has finished its tightening cycle. We look for one last 25bp hike at the 23 March meeting - taking Bank Rate to 4.25% - where it will be left until summer 2024.   For today, cable should continue to find support in the 1.1950/2000 area. Chris Turner PLN: FX mortgage saga strikes back Today is a big moment for the Polish banking sector. This morning we should hear the decision of the European Court of Justice (ECJ) in the FX mortgage case. As we mentioned earlier, this dispute is probably one of the main reasons why the zloty has significantly underperformed the CEE region this year. Thus, today's result should show whether the market's fears were real. And what is actually on the table? The ECJ was asked by a local court whether or not banks should receive interest on mortgage capital even when the loan contract had been invalidated by the court due to abusive clauses. Domestic courts are still struggling to judge how mutual obligations should be resolved if the loan is ruled to be invalid. In the event of a negative ruling for the banking sector, this would mean additional losses for the banks, which would of course have negative implications for Polish assets. It is hard to say what to expect today and how clear the decision will be. Another uncertainty is how much this risk is priced in. However, in any case it is an important tail risk for the zloty and Polish government bonds. Our Warsaw team covered all the details of the FX mortgage case in a recent article. It will be tough for the zloty to navigate through this news flow but as we mentioned earlier, we retain a bearish bias and expect the zloty to test 4.80 EUR/PLN. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Rates Spark: Crunch time

Confirmation Of The ECB's Hawkish Stance May Help The Euro Increase

Jakub Novak Jakub Novak 16.02.2023 09:00
Analysis of transactions and tips for trading EUR/USD The test of 1.0711 occurred when the MACD line was already far from zero, so the downside potential was limited. Sometime later, there was another test, but this time MACD was already recovering from the oversold area, which was a pretty good signal to buy. It resulted in a price increase of about 20 pips. The test of 1.0667 in the afternoon allowed traders to buy and led to another 20-pip rise. Changes in industrial production and the eurozone's trade balance had no impact on EUR/USD's direction, nor did a speech from ECB President Christine Lagarde. However, strong US retail sales data for January prompted dollar demand to surge, causing the pair to fall in the afternoon. A trade balance report from Italy and an ECB economic update are scheduled for today, followed by speeches from ECB Board members Fabio Panetta and Joachim Nagel. The latter may help euro rise, but only if they confirm the bank's hawkish stance on rates. In the afternoon, the US will release data on building permits and new foundations, which are part of the most important sectors of the economy. Meanwhile, the weekly jobless claims, producer price index and the Philadelphia Fed manufacturing index are unlikely to affect the market; however, in case the data turns out to be better than expected, another strengthening in dollar and fall in euro will be seen. For long positions: Buy euro when the quote reaches 1.0716 (green line on the chart) and take profit at the price of 1.0763. Growth will occur if there are hawkish comments from ECB representatives. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0686, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0716 and 1.0763. Read next: USD/JPY Is Above 133.30, GBP/USD Droped Form $1.21 to $1.20, The Aussie Pair Is Trading Below $0.69| FXMAG.COM For short positions: Sell euro when the quote reaches 1.0686 (red line on the chart) and take profit at the price of 1.0630. Pressure will return if data on the Euro area disappoints and if the Fed's statements remain hawkish. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0716, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0686 and 1.0630. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trade   Relevance up to 08:00 2023-02-17 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335283
Rolls-Royce share price has increased by over 60% since the start of the year

There Is Nothing That Will Positively Affect The GBP/USD Pair

Jakub Novak Jakub Novak 16.02.2023 09:04
Analysis of transactions and tips for trading GBP/USD The test of 1.2140 occurred when the MACD line was just starting to move below zero, which was a pretty good signal to sell. It led to a price decrease of over 60 pips. Meanwhile, buying on a rebound from 1.2080 gave a 20-pip correction. GBP/USD fell on Wednesday as UK inflation data showed a stronger than expected slowdown in price growth. The good figure led to a large sell-off in the market. There is nothing that will positively affect the pair today, so it is best to stick to selling as long as the price remains below 1.2050. Missing this level could start an active rise in the pair. There are a lot of reports coming out in the afternoon, such as the number of building permits and new foundations, which will show the state of one of the most important sectors in the economy. Meanwhile, the weekly jobless claims, producer price index and the Philadelphia Fed manufacturing index will not affect the market much; however, in case the data turns out to be better than expected, another strengthening in dollar and fall in pound will be seen. For long positions: Buy pound when the quote reaches 1.2052 (green line on the chart) and take profit at the price of 1.2119 (thicker green line on the chart). Growth will be possible, and this will continue the correction. However, when buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can be bought at 1.2017, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2052 and 1.2119. For short positions: Sell pound when the quote reaches 1.2017 (red line on the chart) and take profit at the price of 1.1961. Pressure will return if economic data in the US exceeds expectations. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2052, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2017 and 1.1961. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader   Relevance up to 08:00 2023-02-17 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335285
Riksbank's Potential Rate Hike Amid Economic Challenges: Analysis and Outlook

The Aussie Unemployment Rate Rose, China Is Warning Of Retaliation Against US Entities Involved In The Shooting Of The Balloon

Saxo Bank Saxo Bank 16.02.2023 09:18
Summary:  The US equity market put in a solid advance yesterday even as treasury yields remain near recent highs. Sentiment in Asia recovered smartly overnight after a stumble yesterday. In FX, yesterday's sharp USD advance paused, while in commodities, oil is pushing back higher near important resistance levels and gold is nearing major support after a drop of more than a hundred dollars per ounce in just two weeks. What is our trading focus? US equities (US500.I and USNAS100.I): animal spirits remain strong Strong US retail sales figures for January and the NAHB Housing Market Index both showed yesterday that the US economy is humming along despite the interest rate shock. Equities shrugged off the implications for further rate hikes and potentially higher long-term interest rates and rallied with S&P 500 futures closed the session at the highest close price in six sessions above the 4,150 level. The uptrend remains intact at this point with the 4,200 level still in play. The US 10-year yield hit 3.8% on the close yesterday. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) in choppy session Early in China’s equity session, the Hang Seng Index and CSI300 gained sharply after a strong US session, but sentiment rolled over badly into late trading, with the Hange Seng approximately flat and CSI 300 down about 1% as of this writing. Qiushi Magazine, a mouthpiece of the Chinese Communist Party, published an excerpt of President Xi’s speech delivered in December, in which the Chinese leader highlighted insufficient aggregate demand as the paramount challenge so expanding consumption is a top policy priority. FX: GBP weakest after soft CPI, JPY sharply lower on yield rise yesterday, DXY on backfoot overnight AUDUSD fell sharply yesterday and stumbled again overnight on the release of weak Australian jobs numbers, but bounced on a recovery in sentiment in China and bounce in metals prices, also keeping away from the pivot low of 0.6856 of earlier this month. Elsewhere, sterling weakness from yesterday’s soft UK CPI release lingered. EURGBP jumped back higher yesterday and GBPUSD even tested below 1.2000 briefly before recovering very slightly. The focus there is on the 1.1941 low and 200-day moving average just above that level. USDJPY surged further yesterday on a fresh rise in global yields and as the Bank of Japan’s rear-guard actions to defend its yield curve control policy mean the bank is effectively doing aggressive QE even as markets anticipated a coming shift away from this policy. Focus today on US housing-related data after the Feb. Crude oil (CLH3 & LCOJ3) rebounds amid China optimism and IEA’s bullish demand outlook A series of signals from US CPI reported on Tuesday to retail sales print yesterday suggest more ammunition for the Fed to raise rates. This has boosted the market pricing of the Fed terminal rate, and dollar strength is back in focus, weighing on commodity prices. Crude oil prices extended their losses after US oil inventories rose 16.3mn barrels to 471mn barrels against expectations of 1.17mn suggesting demand concerns. But reports of passenger loads picking up at China’s top three airlines added optimism overnight. WTI prices rose back above $79/barrel while Brent was above $85. The International Energy Agency (IEA) also raised its demand growth estimates by 0.1mb/d to 2mb/d for 2023. Gold (XAUUSD) close to testing key support Gold prices fell further to $1830/oz as US yields surged higher after the January CPI print, and a hawkish tilt was also seen in Fed commentaries. Last night, US retail sales was also hot suggesting more room for the Fed to hike rates, which boosted the USD. The next important levels include the 1,829 level, which is the 38.2% retracement of the rally off the November lows, the 1,809 area which was broken on the way up, and then the 200-day moving average, currently coming in just above 1,775. Pressure on gold miners to do more deals is rising, despite Newcrest’s rejection of the takeover bid from the world’s biggest gold miner Newmont. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) rose further on solid retail sales Yields on the 10-year Treasury notes jumped 6bps to 3.8% following stronger-than-expected 3% headline retail sales and 1.7% control group (ex-autos, gasoline, and building materials) prints and a rebound in the Empire State Manufacturing Index to -5.8 from -32.9. While the 20-year Treasury bond auction received decent demand with a bid/cover ratio at 2.54, new issuance of around USD 30 billion from corporate, including USD 24 billion from Amgen weighed on the market. Yields on the 2-year climbed 2bps to 4.63%, bringing the 2-10 curve 5bps less inverted to -83bps. Read next: USD/JPY Is Above 133.30, GBP/USD Droped Form $1.21 to $1.20, The Aussie Pair Is Trading Below $0.69| FXMAG.COM What is going on? US retail sales jump far more than expected January retail sales in the US jumped higher by the most in almost two years, in another signal that the US consumer demand is holding up strongly despite high inflation and interest rate pressures. Retail sales expanded 3.0% month-on-month after a decline of 1.1% in December and above the 1.8% expected. Strength was broad-based, with ex-gas/autos rising 2.6% from the prior -0.7%. The control group, which is a useful gauge of consumer spending data, rose 1.7%, also beating expectations of 0.8% and above the prior -0.7%. Factory output also beat estimates, rising 1.0%, although industrial production was flat vs. +0.5% gains expected, mostly weighed by reduced heating demand in January. European earnings: Airbus and Schneider Electric Airbus has had a relatively good year as aviation demand is coming back after the pandemic with fiscal year free cash flow beating estimates and dividends per share set to €1.80 vs est. €1.73. Q4 revenue is €20.6bn vs est. €20bn. Airbus is disappointing a but on its FY23 adjusted EBIT outlook relative to estimates and delays its A320 output target of 75/month to 2026. Schneider Electric reports Q4 revenue that beats estimates driven by strong organic revenue growth and it reports FY23 revenue growth of 9-11% y/y and adjusted EBITA margin up 50-80 basis points. Shopify outlook misses estimates The e-commerce platform reported Q4 revenue of €1.73bn vs est. €1.65bn with gross merchandise volume also beating estimates. The company expects the gross margin to expand in Q1 but the Q1 revenue outlook of high-teen growth rate compared to 20% expected by analysts sent shares lower in extended trading. Geopolitics keeps Saxo’s Defense basket in focus Russia said its troops had broken through two fortified lines of Ukrainian defenses on the eastern front, as the one-year mark of the invasion approaches. The advances come as Western allies announced more military aid for Kyiv including artillery rounds. Meanwhile, China is warning of retaliation against US entities involved in the shooting of the balloon. Biden is considering a public address on the downing of an alleged Chinese spy balloon and other unidentified objects. With geopolitical tensions on the rise, Saxo’s equity theme basket on Defense remains worth a consideration. There were also reports that Germany is poised to increase its defense budget by as much as €10 billion next years. Weak Australian jobs report The Aussie unemployment rate rose to 3.7% in January (vs the market expecting a steady rate of 3.6%), while Australian jobs surprisingly fell 11,5k versus market expectations for +20k, and full-time employment actually fell –43k. Yesterday Australia’s biggest bank Commonwealth Bank also warned that its customers are experiencing ‘significant strain’, amid higher price pressures. What are we watching next? US data, including US Housing Related Data after strong NAHB Housing Market Survey. Yesterday, the US February NAHB Housing Market survey surged 7 points from its January reading, suggesting a fading impact from the mortgage interest rate shock last year. The reading was a 5-month high. Today we get further US housing-related data, including the January Housing Starts and Building Permits figures. We’ll also see the latest weekly jobless claims after a string of four readings below 200k. Earnings to watch Today’s US earnings focus is Applied Materials and DoorDash with analysts expecting Applied Materials to deliver revenue growth of 7% y/y and EPS of $1.94 down 1% y/y. DoorDash, which has been part of our bubble basket, is expected to revenue Q4 revenue growth of 36% and EBITDA of $109mn which seems quite unrealistic given EBITDA was $-147mn a quarter ago. Thursday: Newcrest Mining, South 32, Airbus, Schneider Electric, Air Liquide, Pernod Ricard, Bridgestone, Standard Chartered, Repsol, Nestle, Applied Materials, Datadog, DoorDash Friday: Hermes International, Safran, Allianz, Mercedes-Benz, Uniper, Sika, Deere Economic calendar highlights for today (times GMT) 1300 – ECB's Nagel to speak 1330 – US Jan. PPI 1330 – US Housing Starts and Building Permits 1330 – US Weekly Initial Jobless Claims 1330 – US Philadelphia Fed Business Outlook 1330 – US New York Fed Services Business Activity 1345 – US Fed’s Mester (non-voter) to speak 1500 – ECB Chief Economist Lane to speak 1530 – US Weekly Natural Gas Storage Change 1600 – Canada Bank of Canada Governor Macklem before Parliament 1700 – UK Bank of England Chief Economist Huw Pill to speak 1700 – Norway Norges Bank Governor Wolden Bach to deliver annual address 1830 – US Fed’s Bullard (non-voter) to speak 2230 – Australia RBA Governor Lowe to testify before House   Source: Financial Markets Today: Quick Take – February 16, 2023 | Saxo Group (home.saxo)
US Inflation Eases, but Fed's Influence Remains Crucial

The US Jobs Data Remains Strong, All Eyes On US PPI Report

Swissquote Bank Swissquote Bank 16.02.2023 10:22
Do you remember we were predicting a recession, that was supposed to hit the US and the global economy at the start of the year? A recession that would hit equities and boost bonds? Well, forget about all that, it’s not happening. US data The US jobs data remains strong, inflation continues coming lower but the downtrend gives signs of slowing. And yesterday’s US retail sales data came as a cherry on top, with an eye-popping 3% rise in retail sales last month; it was the biggest jump in the past two years. Stocks Market The S&P500 ended the session 0.28% higher, while Nasdaq 100 stocks added almost 0.80%. Treasury yields pushed higher, however, on expectation that the Federal Reserve (Fed) will continue its rate hike policy – and quite aggressively, given that the rate hikes don’t seem to do any harm to the economy. Deutsche Bank revised its terminal Fed rate from 5.1% to 5.6%. Citi believes that the Fed will end up pushing the rates all the way up to 6%. Read next: Apple Is Facing Multiple Lawsuits And Enforcement Actions| FXMAG.COM US PPI Today, the US will reveal the latest producer price inflation data. Producer prices are expected to have ticked higher by 0.4% m-o-m in January, versus a 0.4% retreat printed last month. On a yearly basis, the PPI index is expected to have slowed from 6.2% to 5.4%. Normally, I would expect a positive PPI surprise – meaning stronger inflation figures - to impact the market mood negatively, but at this point, I am not even sure that it matters. Watch the full episode to find out more! 0:00 Intro 0:18 What recession?! 2:36 Market update 3:50 US PPI is out today! 4:37 USD up, EUR, JPY and XAU down 7:18 Crude oil rebounds from 50-DMA 8:34 Glencore’s record profit fails to convince but… Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #strong #economic #data #equity #risk #rally #USD #EUR #JPY #XAU #Crude #Oil #inflation #data #Fed #expectations #Glencore #energy #stocks #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH  
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

According To UOB Group New Zealand Dollar (NZD) Could Dip To 0.6240

TeleTrade Comments TeleTrade Comments 16.02.2023 10:44
According to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, further selling pressure could drag NZD/USD to the 0.6220 in the next few weeks. Key Quotes 24-hour view: “Yesterday, we expected NZD to trade within a range of 0.6300/0.6365. However, NZD plummeted to 0.6253 before rebounding. Despite the rebound, the weakness does not appear to have stabilized. From here, as long as NZD stays below 0.6310 (minor resistance is at 0.6290), NZD could dip to 0.6240 before stabilization is likely. The major support at 0.6220 is not expected to come under threat today.” Read next Apple Is Facing Multiple Lawsuits And Enforcement Actions| FXMAG.COM “Our latest narrative was from two days ago (14 Feb, spot at 0.6360) where NZD is likely to consolidate and trade between 0.6270 and 0.6450. Yesterday, NZD cracked the solid support at 0.6270 and dropped to 0.6253. The rapid increase in downward momentum suggests NZD could drop further to 0.6220, possibly 0.6195. The downside risk is intact as long as NZD stays below the ‘strong resistance’ level, currently at 0.6345.”
InstaForex's Ralph Shedler talks Euro against Japanese yen

USD/JPY Is Trading Close To 134.00, EUR/USD Is Remaining Above $1.07

Kamila Szypuła Kamila Szypuła 16.02.2023 12:26
The dollar stalled on Thursday as investors scooped up higher-risk currencies after a string of strong US economic data bolstered confidence in the global growth outlook, even as the Federal Reserve appears poised to raise interest rates further. However, the question for market watchers is how well the economy can hold up, especially as interest rates are much higher than many initially thought. The US Bureau of Labor Statistics will publish data on the producer price index (PPI) for January. It is forecast that in annual terms the PPI will fall to 5.4% from 6.2% in December and the core PPI will fall to 4.9% from 5.5%. USD/JPY The yen pair started the day trading above 134.00, but the upward momentum was not maintained and USD/JPY fell below that level to 133.70. In the following hours, USD/JPY tried to make up for losses. At the time of writing, the yen pair is close to 134.00 and trading at 133.9520. The appointment of former BJ board member Kazuo Ueda as governor of the central bank cooled speculations about an early normalization of interest rates. In the past, Ueda has warned of the danger of premature interest rate hikes, putting an end to any fears of higher interest rates in the foreseeable future. The perception that Ueda could improve YCC, given accelerating inflation, could at least limit USD/JPY's rise. EUR/USD EUR/USD regained traction after Wednesday's declines and moved into positive territory just above 1.0700 early in the day on Thursday. The EUR/USD pair is trading slightly above 1.07. European Central Bank President Christine Lagarde told the European Parliament on Wednesday that she intended to raise key interest rates by 50 basis points (bps) in March. Lagarde reiterated that core inflation in the euro area is still high and price pressures remain strong. Later in the day, ECB Chief Economist Phillip Lane and ECB Executive Board Member Fabio Panetta will deliver speeches. If ECB officials leave the door open to additional rate hikes after March, euro losses are likely to remain contained in the short term. Read next: Tesla Will Make Supercharger Network, Visa Will Allow The Use Of Cryptocurrencies To Settle Transactions| FXMAG.COM GBP/USD The Bank of England has already signaled it may stop raising interest rates in March, and Wednesday's inflation figures reinforced that view. Softer-than-expected January UK inflation data weighed heavily on sterling during European trading hours on Wednesday. GBP/USD is trading positive around 1.2050 on Wednesday. Positive turnaround in risk sentiment helps pair maintain gains as investors await US macro data releases. The UK inflation data released yesterday surprised negatively, which resulted in lower expectations for rate hikes. This also followed positive employment data, with market participants now pricing in a peak rate below 4.5%. This week's positive data could be the stimulus the Bank of England (BoE) needed to signal an early pause in rate hikes that could see GBP face further selling pressure. AUD/USD The recent decline of the Australian dollar against the US dollar reflects the disparity in the growth prospects of the two economies. This morning's decline from the dismal Australian jobs was no exception - employment fell for the second month in a row in January, while the unemployment rate rose to its highest level since May. The pair has maintained its intraday gains for the first half of the European session and is currently trading near the 0.6920 region. Source: investing.com, finance.yahoo.com
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

Analysis Of The Aussie Pair, Lowe Is Insistent That The Number One Priority Is To Curb Inflation

Kenny Fisher Kenny Fisher 16.02.2023 12:34
It has been a busy session for the Australian dollar, which started the day with losses but has recovered. In European trade, AUD/USD is trading at 0.6919, up 0.23%. Mixed Australian data Australia delivered some mixed data earlier today. The headline Employment Change for January surprised on the downside at -11,500 after -14,600 prior, well below the forecast of 20,000. There was better news on the inflation front, as Consumer Inflation Expectations for February fell to 5.1%, down from 5.6% expected and prior. The Australian dollar initially declined after these releases but has recovered and eked out small gains. The Aussie had a miserable outing on Wednesday, falling 1.1%. This was courtesy of hawkish remarks from RBA Governor Lowe, which unnerved investors. Lowe appeared before a parliamentary committee and confirmed that further rate hikes are on the way. The central bank has tightened sharply but this has not brought down inflation. In December, CPI hit 7.8%, the highest level since 1990, which Lowe admitted was “way too high”. The double whammy of rising rates and red-hot inflation is squeezing households and businesses, but Lowe is insistent that the number one priority is to curb inflation and avoid inflation expectations from becoming entrenched. US retail sales surprised with a huge 3% gain in December, the largest gain since January 2022. This rosy reading comes on the heels of an inflation release that was higher than expected. These strong numbers should have been bullish for the US dollar, as the Fed will likely raise rates even higher in order to put a brake on the strong economy. Investors, however, shrugged off the inflation and retail sales data and sent equities higher on Wednesday with a “bad news is good news” view. With risk appetite still intact, the US dollar hasn’t been able to capitalize on the inflation and retail sales releases. Read next: USD/JPY Is Trading Close To 134.00, EUR/USD Is Remaining Above $1.07| FXMAG.COM AUD/USD Technical AUD/USD is testing resistance at 0.6929. Above, there is resistance at 0.7001 0.6846 and 0.6774 and providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
USD/JPY: Bracing for the second half US recession

Ueda believes that Japan's weak economy requires monetary stimulus

Marek Petkovich Marek Petkovich 16.02.2023 14:17
A new broom sweeps clean. Kazuo Ueda's rise to power at the Bank of Japan was greeted with enthusiasm by fans of the yen. The former board member is considered more "hawkish" than Governor Haruhiko Kuroda or Deputy Governor Masayoshi Amamiya, whom investors predicted for the post. At the same time, whoever leads the BoJ, the regulator's decisions will be dictated by incoming data, which so far does not please the USDJPY bears. Ueda Ueda is notable for his ability to find a compromise. He believes that Japan's weak economy requires monetary stimulus but, at the same time, sympathizes with bankers who complain that low rates reduce their profits. He demonstrates familiarity with the theories that high public debt is not a problem but nods to fiscal "hawks" who fear that the indicator may get out of control. A tough job to do The new governor of the Bank of Japan has a tough job to do. Starting with normalizing monetary policy, including abandoning control of the yield curve, raising the overnight rate, and reducing the overly bloated balance sheet. The slightest error along the way is fraught with serious turmoil in the financial markets. And investors are already showing concern, as reflected in the increased volatility of the yen. Dynamics of the volatility of the yen and the foreign exchange market Kazuo Ueda seems a slippery type. It is premature to expect that a difference in his views from Kuroda's stance, confident that inflation will slow down on its own, will initiate normalization. The new head of the BoJ got a troubled economy, which grew 0.6% in the fourth quarter, against a projection of 2% by Bloomberg experts. Japan's foreign trade deficit reached a record high of £3.5 trillion in January. Export growth slowed sharply to 3.5%, while imports, on the contrary, accelerated to 17.8% amid expensive energy supplies. Dynamics of the trade balance of Japan If the economy continues to show signs of weakness, then Ueda will have no choice but to stimulate it. With the Fed ready to raise the federal funds rate to at least 5.25%, monetary policy divergence is calling USDJPY upward. But the derivatives market gives a 50% chance of three acts of tightening the Fed's monetary policy at 25 bps each: in March, May and June. If all this happens, the U.S. dollar will continue to strengthen. USD/JPY The strength of the U.S. economy also speaks in favor of a continued USDJPY rally. An impressive gain of 517k in January employment was accompanied by the fastest 3% month-on-month increase in retail sales in two years and the first increase in industrial production in three months. Technically, the pullback from fair value triggered a USDJPY correction and gave us a good chance to form longs from the 128–128.5 area. Overcoming the 134.2 pivot level will allow them to build up towards 135.9 and 138.2   Relevance up to 10:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335311
Ipek Ozkardeskaya: BoE will certainly leave the door open for further hikes

The Markets Are Braced For Bad News Form UK Report

Kenny Fisher Kenny Fisher 16.02.2023 14:22
The British pound has steadied on Thursday. In the European session, GBP/USD is trading at 1.2053, up 0.25%. This follows a sharp drop of 1.2% a day earlier. UK inflation continues to fall but remains disturbingly high. Headline inflation fell to 10.1% in January, down from 10.5% in December and below the consensus of 10.3%. The drop in inflation is welcome news, but food prices, a key driver of inflation, surged by 16.8% in January. With inflation still in double digits, the Bank of England will have to continue raising rates, with the most likely scenario being a 25-basis increase at the Mar. 22 meeting. The market probability of a 25-bp hike rose as high as 73% on Wednesday before dipping to 66% today, according to Refinitiv data. In the US, retail sales delivered an impressive gain of 3% in January, above the estimate of 1.8%. This was a strong rebound from the December reading of -1.1% and marked the largest gain since January 2022. This positive release follows the January inflation report that ticked lower to 6.4% but was higher than expected. These strong numbers translated into strong gains for the US dollar on Wednesday, as the Fed will likely raise rates even higher in order to put the brakes on the strong economy. The UK wraps up the week with retail sales on Friday. The markets are braced for bad news, with an estimate of -5.5% y/y for the headline figure (-5.8% prior) and -5.3% for the core rate (-6.1%). A weak retail sales report could sour investors on the pound and send the currency lower.   GBP/USD Technical GBP/USD tested resistance at 1.2071 earlier in the day. The next resistance line is 1.2180 1.1958 and 1.1838 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

The USD/JPY Pair Continued To Rise During The Asian Session

InstaForex Analysis InstaForex Analysis 17.02.2023 08:00
USD/JPY broke through the resistance of the global price channel line at 133.77 on Wednesday, consolidated above the level on Thursday, and then continued to rise during the Asian session today. Now, it is heading towards the target level of 137.62, thanks to the Marlin oscillator being in a positive area. There is also a small consolidation above the level of 133.77 on the four-hour (H4) chart. The Marlin oscillator has released a little tension, seemingly ready for a more decisive rise. And since the pair broke through yesterday's high, it is likely that the quote will hit the target level of 137.62 Relevance up to 03:00 2023-02-18 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335386
InstaForex's Irina Manzenko talks British pound amid latest events

The Margin For Downside Movement Of GBP/USD Pair Is Substantial

InstaForex Analysis InstaForex Analysis 17.02.2023 08:01
Pound is persistently approaching the target support at 1.1900 (November 30 low). Just this morning, it broke through the nearest low of February 7. A consolidation below the level will open the way to the target level of 1.1737 (top on September 13, 2022). Since the Marlin oscillator is slipping into a negative area, the margin for downside movement is substantial. On the four-hour chart, the pair is below the balance line, while the Marlin oscillator is going flat. The latter has a chance of continuation such a move today.     Relevance up to 03:00 2023-02-18 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335388
Forex: Euro against US dollar - forecast on April 24th, 2023

The EUR/USD Pair Is Struggling At The Support Level

InstaForex Analysis InstaForex Analysis 17.02.2023 08:03
Although euro is declining lesser than other currencies, its trend is still bearish. It was able to hold onto the support level of 1.0660 yesterday, but this morning it opened with a breakdown of this level. It seems that the signal line of the Marlin oscillator is trying to break out of its own consolidation downwards. If that happens, the level of 1.0595 could be hit, and this will open the way to 1.0470, which is also the low of April 28, 2022. On the four-hour (H4) timeframe, the pair is struggling at the support level of 1.0660. The Marlin Oscillator is already deep into the downtrend, so it is likely that the quote will hit the first target level of 1.0595 (top on December 5, 2022) soon   Relevance up to 03:00 2023-02-18 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335390
Small factors combine to pressure credit

Analysis Of EUR/USD Pair: Support At 1.0655 Will Now Act As Resistance

Torben Melsted Torben Melsted 17.02.2023 08:07
EUR/USD failed first to break clearly above resistance at 1.0791 and then broke below the short-term key support at 1.0655 which has forced us to review our count for wave 4. With the break below 1.0655, we should expect wave 4 to move closer to support at 1.0498 before setting the stage for the next impulsive rally in wave 5 towards 1.1196 or higher. The former support at 1.0655 will now act as resistance, but only a direct break above resistance at 1.0723 will again shift the focus towards the upside.   This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313138
According to InstaForex analyst, demand for British pound may not increase soon

The Situation Of British Pound (GBP) Will Depend On UK's Retail Sales Report Today

Jakub Novak Jakub Novak 17.02.2023 08:16
Analysis of transactions and tips for trading GBP/USD The test of 1.2052 occurred when the MACD line was already far from zero, so the upside potential was limited. Sometime later, there was another test, but this time the market signal was to sell and there was also no strong price decrease. The test of 1.2017 in the afternoon happened when the MACD line was far from zero as well, so the downward move was rather limited. UK's retail sales report is coming out this morning. Its rise will lead to an increase in demand for pound, which will certainly prompt an upward correction later in the week. But if the data disappoints, another fall is inevitable. In the afternoon, besides the speeches of FOMC members Michelle Bowman and Thomas Barkin, there is nothing that will help dollar, so expect an uptrend in GBP/USD. The import price index and leading indicators are of no interest. For long positions: Buy pound when the quote reaches 1.1960 (green line on the chart) and take profit at the price of 1.2022 (thicker green line on the chart). Growth will be possible, and this will continue the correction. However, when buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can be bought at 1.1930, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1960 and 1.2022. For short positions: Sell pound when the quote reaches 1.1930 (red line on the chart) and take profit at the price of 1.1875. Pressure will return if economic data in the UK are weaker than expected. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.1960, but the MACD line should be in the overbought area as only by that will the market reverse to 1.1930 and 1.1875. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2023-02-18 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335414
EUR/USD Pair Has A Potential For Short-Term Rally

Germany's PPI And France's CPI Could Lead To An Upward Spike In The Euro

Jakub Novak Jakub Novak 17.02.2023 08:21
Analysis of transactions and tips for trading EUR/USD The test of 1.0716 occurred when the MACD line was already far from zero, so the upside potential was limited. Sometime later, there was another test, but this time it was at 1.0686 and the market signal was to sell. But since the MACD was also far from zero, the price decrease was not very strong. Italy's trade balance report and the ECB's economic bulletin failed to help euro recover on Thursday, as did the statements of ECB Board member Fabio Panetta. However, Germany's PPI and France's CPI, which are due out today, could lead to an upward spike in the currency if the figures turn out to be better than expected. The ECB's current account balance will not affect the market's direction. In the afternoon, besides the speeches of FOMC members Michelle Bowman and Thomas Barkin, there is nothing to help dollar, so a slight uptrend in EU/USD can be expected. The import price index and leading indicators are of no interest. For long positions: Buy euro when the quote reaches 1.0656 (green line on the chart) and take profit at the price of 1.0694. Growth will occur if the inflation data for the eurozone exceeds expectations. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0630, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0656 and 1.0694. For short positions: Sell euro when the quote reaches 1.0630 (red line on the chart) and take profit at the price of 1.0596. Pressure may return at any moment, especially considering the current trend. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0656, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0630 and 1.0596. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader   Relevance up to 07:00 2023-02-18 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335412
SNB stands firm in the face of market turbulence with 50bp rate hike

Swiss Q4 Industrial Production Will Be Important For The USD/CHF Pair

TeleTrade Comments TeleTrade Comments 17.02.2023 08:33
USD/CHF takes the bids to refresh weekly top during four-day winning streak. Hawkish Fed bets, upbeat US data and strong yields underpin US Dollar run-up. Risk-off mood adds strength to the upside bias ahead of Swiss Q4 Industrial Production. USD/CHF pleases bulls around 0.9280-85 as it rises for the fourth consecutive day during early Friday. In doing so, the Swiss Franc (CHF) pair follows the general US Dollar strength amid a light calendar ahead of the fourth quarter (Q4) Industrial Production for Switzerland. Be it strong US data or the geopolitical risks emanating from China, not to forget hawkish Fed talks and strong US Treasury bond yields, the US Dollar has it all to justify the latest rise. That said, the US Dollar Index (DXY) takes the bids to refresh a six-week high near 104.30 at the latest. Starting with the US data, Producer Price Index (PPI) for January gained major attention as it jumped the most since June with 0.7% MoM figure. Also positive for the pair was the improvement in the US Initial Jobless Claims for the week ended on February 10, 194K versus 200K expected and 195K prior. On the contrary, a slump in the Housing Starts for January and the Philadelphia Fed Manufacturing Survey for February seemed to have gained a little attention. The upbeat data allowed the FEDWATCH tool, observed via Reuters, to suggest that the interest rate futures market shows US rates could peak close to 5.25% by July before dropping to 5.0% by the end of the year. The same signals a higher policy pivot than the 5.10% peak conveyed by the Fed in the December meeting, which in turn hints at a few more rate hikes from the US central bank and favors the US Dollar. Recently, Cleveland Fed President Loretta Mester teased the recession woes while repeating the previous defense of the highest rates. Before that, St. Louis Federal Reserve's James Bullard bolstered the hawkish Fed bias while saying, “Continued policy rate increases can help lock in a disinflationary trend during 2023, even with ongoing growth and strong labor markets, by keeping inflation expectations low.” On a different page, the fresh US-China tension and Russia’s refrain from stepping back when it comes to attacking Ukraine also weigh on the risk appetite and fuel the USD/CHF pair, due to the US Dollar’s safe-haven demand. That said, US President Joe Biden fired shots at his Chinese counterpart while conveying the expectations for a talk with the Chinese leader, during an interview with NBC News. “I think the last thing that Xi wants is to fundamentally rip the relationship with the United States and with me," said US President Biden per Reuters. Against this backdrop, S&P 500 Futures dropped 0.30% to 4,086 while poking the weekly low marked the previous day by the press time. In doing so, the US stock futures remain depressed after falling the most in a month on Thursday. Additionally, the US 10-year Treasury bond yields rise to a fresh high since December 30, 2022, up five basis points to 3.896% by the press time. On the same line, two-year US Treasury bond yields print mild gains to end Thursday around 4.64%, the highest levels since November 2022, making rounds 4.679% at the latest. Read next: USD/JPY Is Trading Close To 134.00, EUR/USD Is Remaining Above $1.07| FXMAG.COM Moving on, Swiss Q4 Industrial Production, prior 5.2% QoQ, will be important for the USD/CHF pair traders to watch clear directions. However, the bulls are less likely to relinquish control amid the hawkish Fed bias. Technical analysis A successful upside break of a three-month-old resistance line, now support around 0.9235, keeps USD/CHF buyers hopeful.
The USD/INR Traders Seem To Witness Additional Downside Movement

Oil Price Weakness And The Reserve Bank Of India’s (RBI) Hawkish Concerns Seem Challenging The USD/INR Bulls

TeleTrade Comments TeleTrade Comments 17.02.2023 08:38
USD/INR clings to mild gains during the first positive daily performance in three. Upbeat US data, hawkish Fed talks propel Treasury bond yields and the US Dollar. Sluggish Oil price, mixed sentiment in Asia fail to help Indian Rupee in extending previous gains. Light calendar ahead of next week’s FOMC Minutes can keep buyers hopeful. USD/INR remains mildly bid around 82.75-80, after a gap-up opening to 82.80, amid the broad US Dollar strength during early Friday. In doing so, the Indian Rupee (INR) pair snaps a two-day losing streak amid mostly downbeat sentiment. US Dollar Index (DXY) grinds near the six-week top surrounding 104.30, marked earlier in Asia, as it cheers the hawkish concerns about the Federal Reserve’s (Fed) next move amid strong US data and upbeat comments from the Fed policymakers. Producer Price Index (PPI) for January gained major attention by rising the most since June with 0.7% MoM figure. Also positive for the USD/INR pair was the improvement in the US Initial Jobless Claims for the week ended on February 10, 194K versus 200K expected and 195K prior. On the contrary, a slump in the Housing Starts for January and the Philadelphia Fed Manufacturing Survey for February seemed to have gained a little attention. Following the data, the FEDWATCH tool, observed via Reuters, suggests that the interest rate futures market shows US rates could peak close to 5.25% by July before dropping to 5.0% by the end of the year. The same signals a higher policy pivot than the 5.10% peak conveyed by the Fed in the December meeting, which in turn hints at a few more rate hikes from the US central bank and favors the US Dollar. It should be noted that Cleveland Fed President Loretta Mester recently teased the recession woes while repeating the previous defense of the highest rates. Before that, St. Louis Federal Reserve's James Bullard bolstered the hawkish Fed bias while saying, “Continued policy rate increases can help lock in a disinflationary trend during 2023, even with ongoing growth and strong labor markets, by keeping inflation expectations low.” Other than the Upbeat US data, Fed bets and hawkish comments from the Fed policymakers, the fears emanating from China also weigh on the sentiment and underpin the USD/INR rebound. That said, US President Joe Biden fired shots at his Chinese counterpart while conveying the expectations for a talk with the Chinese leader, during an interview with NBC News. “I think the last thing that Xi wants is to fundamentally rip the relationship with the United States and with me," said US President Biden per Reuters. Amid these plays, S&P 500 Futures mark 0.30% intraday losses to 4,086 while poking the weekly low after falling the most in a month on Thursday. Additionally, the US 10-year Treasury bond yields rise to a fresh high since December 30, 2022, whereas the two-year US Treasury bond also renews the highest levels since November 2022, making rounds to 3.88% and 4.68% in that order. It’s worth mentioning that the Oil price weakness and the Reserve Bank of India’s (RBI) hawkish concerns seem challenging the USD/INR bulls amid a light calendar ahead of the next week’s Federal Open Market Committee (FOMC) monetary policy meeting minutes. Technical analysis A sustained bounce off the 10-day Exponential Moving Average (EMA), around 82.60 by the press time, keeps USD/INR buyers hopeful of crossing the four-month-old resistance line near the 83.00 round figure.
Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

Further Upside Movement Of The Loonie Pair (USD/CAD) Is Expected

TeleTrade Comments TeleTrade Comments 17.02.2023 08:39
USD/CAD rises to the highest level in a month, braces for the biggest weekly gains since early December. Successful break of short-term key resistance lines, 200-SMA directs bulls towards 61.8% Fibonacci ratio. Sellers should remain cautious beyond four-day-old support line. USD/CAD takes the bids to a fresh monthly high near 1.3490 during early Friday. In doing so, the Loonie pair rises for the fourth consecutive day while preparing for the biggest weekly run-up since early December 2022. That said, the USD/CAD bulls cheer the upside break of a 12-day-old ascending trend line and one-month-old resistance line, now support, to keep buyers hopeful. Also favoring the USD/CAD bulls is the quote’s successful trading above the 200-SMA. Given the aforementioned technical breakouts and bullish MACD signals, the USD/CAD pair is well-set to poke the mid-January swing high surrounding 1.3520. The same encompasses the 61.8% Fibonacci retracement level of the pair’s January-February downturn. In a case where the USD/CAD remains firmer past 1.3520, the 1.3600 round figure may act as an intermediate halt before highlighting the previous monthly high of 1.3685 for the pair buyers. Read next: USD/JPY Is Trading Close To 134.00, EUR/USD Is Remaining Above $1.07| FXMAG.COM On the flip side, the 12-day-old previous resistance line and a downward-sloping trend line from January 19 put a floor under the USD/CAD prices of around 1.3480 and 1.3455 in that order. Following that, the 200-SMA and an ascending support line from Tuesday, respectively near 1.3400 and 1.3390, could act as the last defense of the USD/CAD buyers. USD/CAD: Four-hour chart Trend: Further upside expected remaining time till the new event being published U.S.: Leading Indicators
Australian dollar against US dollar: USD may rise on the back of the Republicans and Democrats negotiations

The Path Of Least Resistance For The AUD/USD Pair Is To The Downside

TeleTrade Comments TeleTrade Comments 17.02.2023 08:43
AUD/USD remains under some selling pressure for the third successive day on Friday. Hawkish Fed expectations, recession fears underpin the buck and weigh on the major. Technical selling below the 50-day SMA further contributes to the ongoing downfall. The AUD/USD pair extends this week's retracement slide from the 0.7030 area and continues losing ground for the third successive day on Friday. The downward trajectory drags spot prices to the lowest level since January 6 during the Asian session and is sponsored by broad-based US Dollar strength. In fact, the USD Index, which tracks the Greenback against a basket of currencies, hits a fresh six-week high amid firming expectations for further policy tightening by the Fed. Investors seem convinced that the US central bank will stick to its hawkish stance in the wake of stubbornly high inflation. Moreover, the incoming upbeat US macro data points to an economy that remains resilient despite rising borrowing costs. This, along with the recent hawkish remarks by several FOMC members, suggests that the Fed will continue to hike interest rates. The markets are now pricing in at least a 25 bps lift-off at each of the next two FOMC policy meetings in March and May. This, in turn, pushes the yield on the benchmark 10-year US Treasury note to its highest level since late December and is seen underpinning the buck. Meanwhile, worries about economic headwinds stemming from rapidly rising interest rates weigh on investors' sentiment. This is evident from a weaker tone around the equity markets, which further benefits the safe-haven USD and drives flows away from the risk-sensitive Aussie. Apart from the aforementioned fundamental factors, the AUD/USD pair's downfall could also be attributed to some technical selling following the overnight break below the 50-day SMA. This comes on the back of the recent repeated failures to find acceptance above the 0.7000 psychological mark and might have already set the stage for further losses. Moreover, bearish oscillators on the daily chart add credence to the near-term negative outlook. This, in turn, suggests that the path of least resistance for the AUD/USD pair is to the downside. In the absence of any relevant market-moving economic data, any attempted bounce will now be seen as a selling opportunity and remain capped near the 50-day SMA support breakpoint.
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The Geopolitical Fears Have A Double Impact On The Kiwi Pair (NZD/USD)

TeleTrade Comments TeleTrade Comments 17.02.2023 08:54
NZD/USD drops for the fourth consecutive day as bears poke January’s low. Fears of inflation peak in New Zealand, geopolitical concerns probe RBNZ hawks. US data, yields join upbeat Fed talks to keep rate hike concerns on the table and propel US Dollar. Risk catalysts can entertain traders ahead of next week’s FOMC Minutes, RBNZ. NZD/USD bears keep the reins for the fourth consecutive day as the quote drops to the lowest level since early January, following a U-turn from the weekly top on Tuesday. That said, the Kiwi pair sellers attack 0.6220-15 support during early Friday in Europe. Earlier in Asia, New Zealand Financial Minister Robertson said events will exacerbate a slowdown in the economy and that is evidence that inflation has peaked. The same challenges the hawkish bias surrounding the Reserve Bank of New Zealand (RBNZ) ahead of the next week’s monetary policy meeting. On the other hand, a slew of US statistics concerning inflation, employment and output push back the Fed’s policy pivot talks and help the Federal Reserve (Fed) officials to suggest higher rates. The fashion could be witnessed in the latest comments from the Fed officials and the FEDWATCH tool, observed via Reuters. That said, Cleveland Fed President Loretta Mester and St. Louis Federal Reserve's James Bullard were the latest to sound the hawkish alarm. It should be noted that the recent fears of more US-China tussles over the spy balloon and Taiwan also bolster the US Dollar’s safe-haven demand, which in turn weighs on the NZD/USD price. The geopolitical fears have a double impact on the Kiwi pair due to New Zealand’s trade ties with China. Amid these plays, S&P 500 Futures dropped half a percent intraday to 4,086 while poking the weekly low after falling the most in a month on Thursday. Additionally, the US 10-year Treasury bond yields rise to a fresh high since December 30, 2022, whereas the two-year US Treasury bond also renews its highest levels since November 2022. Moving ahead, the next week’s monetary policy meeting minutes of the Federal Open Market Committee (FOMC) and the RBNZ Interest Rate Decision will be crucial for the NZD/USD traders to watch for clear directions. Market forecasts suggest another 0.50% rate hike from the RBNZ before teasing the policy pivot. Technical analysis NZD/USD pair’s sustained downside break of the previous support line from mid-November 2022, now resistance around 0.6300, keeps the pair bears hopeful. Adding strength to the downside bias are the bearish MACD signals and the lower high formation on the daily chart. However, a daily closing below a 2.5-month-long support line, currently around 0.6220-15, becomes necessary for the bears to keep the reins, a break of which can highlight the 200-DMA of around 0.6175.
Earnings season: Tesla stock price slipped after yesterday's news. The best selling car in Q1 was Model Y

Tesla Declined 5.7% Following An Announcement To Recall Over 300,000 Cars

Saxo Bank Saxo Bank 17.02.2023 09:08
Summary:  Equities headed lower after the hot US PPI report and hawkish Fed speakers Mester and Bullard bringing the market’s terminal rate projections up to 5.27%. US 10-year yields surged to a YTD high of 3.9% and the US dollar was broadly higher against all other currencies but the yen recovered some of its losses as the session ended. RBA’s Lowe touted more rate hikes as inflation reigns. Metals saw a rebound with Copper leading, while Gold was still close to $1830.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) retreated on a hot PPI and 50bps hike back on the table U.S. stocks opened sharply lower on a much hotter-than-expected PPI print. The benchmark S&P 500 and Nasdaq 100 managed to claw back all the losses until they reversed following Fed’s Bullard hit the tape at 3 pm New York time with hawkish comments signaling the door to return to a 50bp hike at the March FOMC is open. The Fedspeak hammered stocks across the board with all 11 sectors in the S&P500 declining. At close, the S&P500 was 1.4% lower and the Nasdaq 100 lost 1.9%. Tesla (TSLA:xnas) declined 5.7% following an announcement to recall over 300,000 cars due to a crash risk associated with its Full Self-driving Beta software. Shopify (SHOP:xnys) plunged 15.8% on revenue outlook missing estimates. Toast (TOST:xnys) dropped 22.8% after missing revenue miss. Twilio (TWLO:XNYS) jumped 14.3% on an earnings beat. Cisco (CSCO:xnas) climbed 5.2%. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) climbed on hawkish Fed and producer price inflation Yields on the 10-year surged 6bps to 3.86% on a large jump on the PPI print in January and hawkish comments from Fed’s Mester and Bullard who brought a 50bp hike back to the table at the March FOMC. The selling during the session concentrated in the longer-end of the curve in particular in the 10-year futures contract and 5-year futures vs ultra-long bond contracts steepening trades. The USD9 billion TIPS auction had a bid/cover ratio of 2.38, below 2.69 last time. Traders are cautious ahead of next week’s USD120 billion supply from the 2, 5, and 7-year Treasury note auction. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) failed to sustain an attempt to rally Hang Seng Index rallied as much as 2.4% in the morning before spending the afternoon paring gains and finishing the Thursday session only 0.8% higher from the previous day. Qiushi Magazine, a mouth-piece of the Chinese Communist Party, published an excerpt of President Xi’s speech delivered in December, in which the Chinese leader highlighted insufficient aggregate demand as the paramount challenge so expanding consumption is a top policy priority. Media reports of foreign hedge fund building long positions in Chinese equities added fuel to the positive sentiment. The news that President Xi will be visiting Iran, a foe country with the United States, and China’s Ministry of Commerce imposed fines and sanctions on U.S. defence companies, Lockheed Martin (LMI:xnys) and Raytheon Technologies (RTX:xnys) dented sentiment. Tech stocks outperformed with Hang Seng Tech Index gaining 1.8%. Online pharm platform shares surged on the news that the Chinese healthcare regulator is stepping up insurance coverage for drugs. JD Health surged 5.3%; Alibaba Health climbed 3.5%. Lenovo (00992:xhkg) jumped 6.7% ahead of reporting quarterly results. Chinese developers and property management services names gained. China Resources Mixc Lifestyle (01298:xhkg) rose 4.7%; China Overseas Land & Investment (00688:xhkg) gained 3.1%; Longfor (00960:xhkg) climbed 2.8%. In A-shares, CSI300 advanced as much as 1% in the morning but pared all the gains to close 0.7% lower. Semiconductor, non-ferrous metal, machinery, and defense names led the charge lower. The food and beverage and cloud-computing gaming space bucked the decline and outperformed. Albemarle –the lithium giant beat earnings expectations & gave a sparky outlook – paving a positive course for the lithium sector... ...as per our Quarterly Outlook. Albemarle, the world's biggest lithium company – in size, and scale (selling lithium to most EV makers) rose 4.7% after it delivered a stronger than expected sales outlook – with China’s reopening to provide extra momentum as demand for EVs picks up. It sees net sales growing to $11.3-$12.9 billion, and EBITDA getting as high as $5.1 billion. It expects to maintain positive cashflow even despite increasing capital expenditure. In Q4 - its earnings (EBITDA) swelled to $1.24 billion, beating expectations and marking a mega jump from $229 million (same time last year), as lithium earnings rose more than expected. Adjusted EPS also grew more than consensus expected with EPS, at $8.62. This paves a positive path for what we might expect from Allkem and Pilbara when they report results next week. Click here for Saxo’s lithium equity basket for stock inspiration. Tesla recalls over 362,000 cars for self-driving crash risks; Its shares remain ‘overbought’ Tesla shares fell 5.7% to $202.04, staying around seven-month highs. Although Tesla’s uptrend seems intact  - buying is slowing  - with the relative strength index (RSI) indicating we could see some consolidation here as the stock is in overbought territory. Tesla’s recall affects 362,758 vehicles, including certain Model 3, Model X, Model Y and Model S units manufactured between 2016 and 2023. Although Musk said it’s not a recall, even though Tesla’s full-self driving beta system “may allow the vehicle to act unsafe around intersections”, and increase collision risk if the driver does not intervene, Musk affirmed the issue will be remedies with a software update, by April 15. RBA Governor faces parliamentary grilling after Australian unemployment surprising rose RBA Governor Lowe today hinted that despite Australian unemployment rising to 3.7% in January up from 3.5% - it does not change its hiking guidance. Yesterday, he faced a Senate estimates hearing – saying the cash rate was unlikely at its peak. And today he is back on the podium, saying banks need to do better jobs of passing on rate hikes. Meanwhile Bullock said refinances of mortgages are really high, with consumers shopping around to get better deals. Amid diminishing corporate operational expenditure power  - the unemployment rate will likely pick up this year, in the face of rising inflation and unemployment, meaning Australia faces a staglationary environment. We will continue to watch the AUDUSD and the GBPAUD – as we think the UK BOE could sit on its hands with rate hikes, while the RBA will likley push ahead with hikes in the coming months. FX: Firm king dollar as yields rise; JPY recovers from lows   With US yields maintaining their upward trajectory, the dollar was firmer again on to reach fresh highs since 6 January. Hot PPI, still low jobless claims and Fed speakers opening the door to another potential 50bps rate hike underpinned. Quiet day ahead with no tier 1 data due and only Fed’s Barkin and Bowman speaking. USDCAD rose to 1.3480 amid weakness in oil prices while AUDUSD was flattish as metals prices recovered, despite a weak jobs data yesterday and RBA’s Lowe affirming more rate hikes. USDJPY rose to 134.50 overnight but was back closer to 134 in Asia. EURUSD continues to find support at 1.0650 as ECB speakers continued to highlight another 50bps rate hike at the March meeting. Crude oil (CLH3 & LCOJ3) heads for a weekly loss amid Fed concerns and inventory build Even as some signs of improving Chinese demand started to appear, the broader inflation and interest rate rhetoric nudging higher again this week weighed on crude oil and the commodity complex more broadly this week. A hot PPI overnight, along with Fed members now starting to open the door for another potential 50bps rate hike has further brought the Fed’s terminal rate pricing higher and US yields continue to rise. WTI prices dipped below $78 in Asia, with Brent around $85. Even as OPEC and IEA reports suggested possible uptick in demand as China reopens, US stockpile reports continued to dampen the demand outlook. Saudi Energy Minister Prince Abdulaziz bin Salman also said the current OPEC+ deal on output levels will remain in place until year-end and that he is wary of forecasts of much higher demand from China. Copper prices jump to two-week highs Copper prices rose higher on Thursday as the dollar rally took a bit of a breather before resuming again. Copper stockpiles on the Shanghai Futures Exchange fell for the first time in two months, suggesting that the Chinese demand is picking up. Growth in aluminium inventories also slowed, according to data from Shanghai Metals Market. This comes amid ongoing risks of further supply disruptions. Earlier this week, Freeport-McMoRan Inc suspended operations at its Grasberg copper mine in Indonesia due to landslides. This is adding to disruption to Peru’s output caused by social unrest. Copper prices rose to $4.15 before a retreat to $4.11 in Asia. The key $4 handle support continues to hold up. Read next: USD/JPY Is Trading Close To 134.00, EUR/USD Is Remaining Above $1.07| FXMAG.COM What to consider? Fed speakers boost the market pricing of Fed’s terminal rate Hawkish Fed speak prompted an upward shift in the Fed funds futures pricing for the terminal rate, but there is still more than one full 25bps rate cut priced in for this year. Loretta Mester said she saw a compelling case for a 50bp hike at the January FOMC meeting. A similar message was sent out by James Bullard too. However, both are non-voters although Mester may become a voting member this year if Austin Goolsby is appointed as Fed Vice Chair. Mester also added that she is not ready to say if the Fed requires a bigger rate rise at the March FOMC; said more upside inflation surprises could make Fed policy more aggressive and can accelerate the pace if conditions warrant it. Bullard also reaffirmed his terminal rate projection of 5.25-5.50%. With members still sounding the hawkish alarm despite the market pricing catching up with the December dot plot, it appears to be a signal that the March dot plot may see an upward revision. Hot US PPI further casts doubts on the goods disinflation narrative After the CPI report this week brought back concerns on the pace at which inflation is cooling, January PPI also saw a hotter than expected print. Headline rose 0.7% MoM or 6.0% YoY (vs. 0.4% MoM and 5.4% YoY exp) jumping from the prior month's -0.2% MoM print (revised up from -0.5%) but cooling from 6.5% YoY last month. Both goods and services prices increased, with goods rising 1.2% and services rising 0.4%. This has started to question the goods disinflation narrative and continues to support the thesis that services inflation is sticky. Price pressures were broad with ex food and energy measure also up 0.5% MoM from 0.3% last month and expected. Jobless claims still below 200k Initial jobless claims data was beneath expectations, and still beneath the watched 200k level, printing 194k against an expected 200k – still supporting the case for a tight labor market persisting. Continued claims were in line with expectations at 1.696mln, picking up from the prior 1.68mln. RBA Governor Lowe’s testimony focused on the need for more rate hikes The Reserve Bank of Australia chief Philip Lowe appeared for the second session of his testimony to the economic committee today, and the message emphasized that the RBA still needs to do more to bring inflation under control, despite acknowledging the impact on community. He said that business conditions remain above average and labor market is still strong. He was scrutinized not just on policy but also on transparency, especially after his closed door meetings with private bankers but lack of public address.   For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.     Source: Markets Today: Hot US PPI and Mester/Bullard boost Fed terminal rate expectations – 17 February 2023 | Saxo Group (home.saxo)
Mercedes Is Planning A €4bn Buyback Programme, Copper Prices Rose

Mercedes Is Planning A €4bn Buyback Programme, Copper Prices Rose

Saxo Bank Saxo Bank 17.02.2023 09:14
Summary:  The US equity market stumbled badly yesterday as US treasury yields continue to rise, with another strong weekly claims number and hotter than expected producer prices print weighting. The US dollar is breaking out higher in most USD pairs. A heavy load of options expiry today could aggravate US equity market volatility as weekly futures and single stock options are set to expire. What is our trading focus? US equities (US500.I and USNAS100.I): an echo from a distant past In yesterday’s equity note we wrote about the key risks in equities arguing that the interest rate sensitivity is no longer the dominant risk factor as equity valuations have fallen and interest rates have already got closer to long-term averages. With the US 10-year yield advancing yesterday after comments from Cleveland Fed President Loretta Mester that more rate hikes are needed to tame inflation S&P 500 futures reacted negatively. Higher long-term bond yields do still impact equities through the discount rate on future cash flows, but initial reaction in S&P 500 futures was muted and they fought back during the session before selling off into the close. Higher than expected US PPI figures reported yesterday are also negative for equities as it could indicate margin pressures will continue for companies. S&P 500 futures are continuing selling off this morning trading around the 4,080 level which is at the lower end of the trading range for February. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) pulled back Hang Seng Index slipped 0.6% as investors lowered expectations for a rapid recovery in Chinese consumer spending. Leading Hong Kong jewellers which have large exposure to Chinese tourists as well as stores all over the mainland declined 2-4%. The Chinese traditional medicine names bucked the decline and rose 3-7%. President Xi’s plan to visit Iran and China’s Ministry of Commerce imposing sanctions on Lockheed Martin (LMT:xnys) and Raytheon Technologies (RTX:xnys) also dented the market sentiment. In A-shares, CSI300 dropped 0.7%, with stocks in the tech space retreating while Chinese traditional medicines and childcare products names advancing. FX: Firm king dollar as yields rise; JPY threatens new lows With US yields grinding higher still, the dollar was firmer again and hit fresh highs since 6 January. A hot PPI, still low jobless claims and Fed speakers, together with weakening risk sentiment all supportive for the greenback. It may be a quiet day ahead for macro data, but market volatility elsewhere after yesterday’s unsettling sell-off in risky assets could yet drive significant moves (note options expiry in the US below). USDCAD is pushing on 1.3500 for the first time since mid-January amid weakness in oil prices while AUDUSD rolled over to new lows since the first days of the year, touching below the recent 0.6856 pivot low and threatening the 200-day moving average just above 0.6800. GBPUSD likewise broke below its prior pivot low of 1.1961 and is trading at its 200-day moving average at 1.1940. USDJPY rose above 134.50 overnight, with the 200-day moving average still some distance higher at 136.93. EURUSD broke down through it’s range low of 1.0656 in late Asian trading as well. Crude oil (CLH3 & LCOJ3) heads for a weekly loss amid Fed concerns and inventory build Even as some signs of improving Chinese demand started to appear, the broader inflation and interest rate rhetoric nudging higher again this week weighed on crude oil and the commodity complex more broadly this week. A hot PPI overnight, along with Fed members now starting to open the door for another potential 50bps rate hike has further brought the Fed’s terminal rate pricing higher and US yields continue to rise. WTI prices dipped below $78 in Asia, with Brent around $85. Even as OPEC and IEA reports suggested possible uptick in demand as China reopens, US stockpile reports continued to dampen the demand outlook. Saudi Energy Minister Prince Abdulaziz bin Salman also said the current OPEC+ deal on output levels will remain in place until year-end and that he is wary of forecasts of much higher demand from China. Copper prices fading after posting two-week highs yesterday Copper prices rose higher on Thursday as the dollar rally took a bit of a breather before resuming later, so the new two-week high was only briefly held before prices rolled back down into the range overnight. Copper stockpiles on the Shanghai Futures Exchange fell for the first time in two months, suggesting that the Chinese demand is picking up. Growth in aluminium inventories also slowed, according to data from Shanghai Metals Market. This comes amid ongoing risks of further supply disruptions. Earlier this week, Freeport-McMoRan Inc suspended operations at its Grasberg copper mine in Indonesia due to landslides. This is adding to disruption to Peru’s output caused by social unrest. Copper prices rose to $4.15 before a retreat to $4.09 in Asia. The key $4 handle support continues to be key. Gold (XAUUSD) testing below first key support Gold prices were only corralled briefly by the 1,828 level this week, which is the major 38.2% retracement of the entire rally off the 1614 lows. Overnight, the stronger US dollar and higher US yields are driving new selling below 1,825, with the next levels looming the 1,809 area that was a critical range break level on the way up, and then perhaps the 200-day moving average coming in at 1,776. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) climbed on hawkish Fedspeak and producer price inflation The US 10-year treasury yield surged 6bps yesterday and followed through higher still to the highest level of the year at 3.89% overnight after a large jump in the US PPI in January and hawkish comments from Fed’s Mester and Bullard (see below). The selling during the session concentrated on the longer end of the curve, with the 2-10 yield curve inversion moderating sharply to –78 bps after as low as –90 bps on Wednesday. The $9 billion 30-year TIPS auction had a bid/cover ratio of 2.38, below 2.69 last time. Traders are cautious ahead of next week’s $120 billion supply from the 2, 5, and 7-year Treasury note auction. What is going on? Albemarle –the lithium giant beat earnings expectations and gave an upbeat outlook. Albemarle, the world's largest lithium company – in size, and scale (selling lithium to most EV makers) rose 4.7% after it delivered a stronger than expected sales outlook. It sees net sales growing to $11.3-$12.9 billion, and EBITDA getting as high as $5.1 billion. It expects to maintain positive cashflow even despite increasing capital expenditure. In Q4 - its earnings (EBITDA) swelled to $1.24 billion, beating expectations and marking a massive jump from $229 million last year, as lithium earnings rose more than expected. Adjusted EPS also grew more than consensus expected with EPS, at $8.62. Other lithium producers such as Allkem and Pilbara Minerals report results next week. Tesla shares dive as company to recall 362,000 cars for self-driving crash risks Tesla’s recall affects 362,758 vehicles, including certain Model 3, Model X, Model Y and Model S units manufactured between 2016 and 2023. Although Musk said it’s not a recall, even though Tesla’s full-self driving beta system “may allow the vehicle to act unsafe around intersections”, and increase collision risk if the driver does not intervene, Musk affirmed the issue will be remedied with a software update, by April 15. Tesla shares fell 5.7% to $202.04 on Thursday after trading 15 dollars higher earlier in the session. European earnings: Allianz, Mercedes, Hermes Allianz reports fiscal year operating profit of €14.2bn vs est. €13.7bn and sets the dividend per share to €11.40 vs est. €11.38. On the conference call this morning the CFO of Allianz said that the company does not expect rates to go significantly higher. Mercedes reports this morning Q4 revenue of €41bn vs est. €37.7bn and adjusted EBIT of €5.1bn vs est. €4.5bn as pricing remains strong in the car industry but the German carmaker sees FY23 operating income below the 2022 level. Mercedes is also planning a €4bn buyback programme. Hermes reports this morning Q4 revenue of €3bn vs est. €2.8bn up 23% in constant currency reflecting strong demand for luxury goods. Hermes raised their global prices in January by 7% compared to a year ago. Fed speakers mention idea of 50-basis point hikes Two hawkish Fed members, the St. Louis Fed’s Bullard and the Cleveland Fed’s Mester, neither of whom are voters this year, argued they were in favour of a 50-basis point hike at the Feb 1 FOMC meeting (only 25-bp hike delivered). The market is pricing 28 basis points for the March 22 meeting and a peak Fed Funds rate this year of 5.29%. China’s US Treasury holdings hit a 12-year low in December Data published this week by the US Treasury show that China’s holdings of US treasuries fell for the fifth month in a row and to a 12-year low – to $867 billion and marking a total fall of $173 billion for the 2022 calendar year. What are we watching next? Significant options expiry today, 0DTE options a risk for driving volatility. The options market in recent months has driven significant intraday volatility as options on US S&P 500 futures are available with expiry on all weekdays. It has become increasingly popular to trade the contracts that expire on the same day as they are traded, so called 0DTE, or Zero Days to Expiry options. Such trading in 0DTE options represents nearly half of all traded S&P options, with some noting that this trading represents a significant risk to accelerating market volatility on any given day. With yesterday’s ugly session in the US and other options also up for expiry, including weekly options on single stocks and ETF’s, it is worth noting the background risk that market volatility can drive a reflexive risk of further volatility as options holders rush to hedge their market exposure, which can swell as options move closer to- or deeper into the money. Earnings to watch Today’s US earnings focus is Deere which is expected to report FY23 Q1 (ending 31 Jan) revenue growth of 17% y/y and EPS of $5.53 up 76% y/y as demand remains robust and margins have room to expand. Friday: Hermes International, Safran, Allianz, Mercedes-Benz, Uniper, Sika, Deere Next week’s earnings releases: Monday: BHP Group, Williams Cos Tuesday: Teck Resources, Gapgemini, Engie, HSBC, Walmart, Home Depot, Medtronic, Palo Alto Networks Wednesday: Rio Tinto, Genmab, Danone, Lloyds Banking Group, Iberdrola, Nvidia, TJX, Stellantis, Baidu, eBay Thursday: EssilorLuxottica, Deutsche Telekom, Munich Re, Kuaishou Technology, Eni, Anglo American, BAE Systems Friday: BASF, Monster Beverage Economic calendar highlights for today (times GMT) 1130 – ECB's Villeroy to speak 1330 – Canada Jan. Teranet/Nationa Bank Home Price Index 1330 – US Fed’s Barkin (Non-voter) to speak 1330 – US Jan. Import/Export Price Indices 1345 – US Fed’s Bowman (Voter) to speak 1500 – US Jan. Leading Index   Source: Financial Markets Today: Quick Take – February 17, 2023 | Saxo Group (home.saxo)
Rates Spark: Balancing data and risk factors

According To The ECB Chief The Central Bank Must Keep Taking Aggressive Action

Paolo Greco Paolo Greco 17.02.2023 09:21
On Thursday, the EUR/USD currency pair attempted to resume its downward trend, although the volatility was quite low. Many reports were released in the US throughout the day, but as we had previously warned traders, all of them turned out to be secondary. Perhaps there was a 20–30 point response to a single report, but should we have anticipated such a response? So, we won't even concentrate on macroeconomic data from other countries. The technological picture has significantly improved in terms of interest. If a long-term downward trend has developed on the 4-hour TF and is not reversed, then the pullback we are currently seeing on the 24-hour TF is not particularly convincing. Although the Kijun-sen line has officially been passed, the pair is still extremely close to it, so anything can happen at any time. The major events of this week are all over, so we can't anticipate a lot of volatility or a significant trend change in the coming days. The daily TF, however, clearly demonstrates how weak the current downward correction is in comparison to the prior upward movement, therefore we are still waiting for a further collapse from the pair. We think that the dollar has fallen so much in recent months unfairly and that the euro currency is still significantly overbought. The rhetoric used by ECB and Fed officials is still described as "hawkish," and both sides have made pronouncements and dropped signals about a potential tightening of monetary policy that might be more pronounced than anticipated. As a result, the rates between the euro and the dollar are currently roughly identical. Read next: USD/JPY Is Trading Close To 134.00, EUR/USD Is Remaining Above $1.07| FXMAG.COM Another speech by Christine Lagarde was made this week. The ECB chief has been speaking quite a bit lately, but what new information does she have to share with the market given that everyone is already aware of the regulator's plans? The market anticipated two successive rises of 0.5% and a further 0.25% even before the rate hike in February. As a result, the market was unaffected by Ms. Lagarde's comments regarding an almost certain tightening of monetary policy by half a percent in March. As we just mentioned, since these solutions have been there for a while and are well known, the market has been working on them. The central bank must keep taking aggressive action because inflation is still high, according to Ms. Lagarde. There's nothing new here. At the same time, Gabriel Makhlouf, the president of the Central Bank of Ireland, predicted that the deposit rate would rise over 3.5% and stay there for a considerable amount of time. The key rate is currently 2.5 percent, and the deposit rate is considerably lower. Even a 3.25% rate, in our opinion, won't be sufficient to bring inflation back to 2% in the near future. We, therefore, believe that the ECB rate will increase for more than two meetings. The European Central Bank (ECB) has a considerably greater capacity for tightening than the Federal Reserve, although much will depend on the condition of the European economy, which is on the verge of entering a recession. As a result, the European currency may resume its movement toward the north during 2023. Although we are not opposed to this scenario, we must remind you that trends cannot exist without corrections. As a result, at this point, we anticipate that the pair will keep declining. The road map for future rises is unlikely to clear up by March when there will be a new ECB meeting, but after that, new clues from regulator officials will start to flow in. As a result, the pair can continue to adjust until mid-March. All indications point to a downward trend: the lower linear regression channel is pointing downward, the moving channel is likewise pointing downward, and the price updated its local minimum yesterday. We do not have any leading purchase indications because the CCI indicator did not move into the oversold area. The pair may continue to advance toward Senkou Span B on a 24-hour TF. As of February 17, the euro/dollar currency pair's average volatility over the previous five trading days was 82 points, which is considered "normal." As a result, we anticipate that the pair will move on Friday between 1.0603 and 1.0767. A new round of corrections will be signaled by the Heiken Ashi indicator's upward movement. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trade Suggestions: The EUR/USD pair maintains a downward trend. Before the Heiken Ashi indication comes up, we can now consider opening new short positions with targets of 1.0603 and 1.0620. If the price is established above the moving average line with a target of 1.0864, long positions can be opened. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 01:00 2023-02-18 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335378
Rishi Sunak, The British Prime Minister, Claimed That By Opting For Brexit In 2016, The Majority Of Britons Made A Mistake

Rishi Sunak, The British Prime Minister, Claimed That By Opting For Brexit In 2016, The Majority Of Britons Made A Mistake

Paolo Greco Paolo Greco 17.02.2023 09:25
The GBP/USD currency pair kept moving downward on Thursday, eventually reaching the Murray level of "0/8," or 1.1963. Thus, a "double bottom" of the local scale was created in addition to the "double top" of the senior scale. If a second rebound occurs from the level of 1.1963, this might result in a fairly considerable upward movement, but the "double top" will not be seen as fully worked out, so we should anticipate another round of the British pound's decline. Since there is no justification for the pound to increase, we continue to anticipate a decline. The market has already factored in the BA and Fed's decisions to raise rates once more, as well as the most recent inflation statistics and, in the case of the US, information on the labor market and unemployment. In other words, the majority of the most critical and relevant studies have already been released this month. And for the British currency, we can draw discouraging conclusions. In the United Kingdom, inflation is initially declining slowly. If the BA rate was no longer 4%, this might imply that the Bank of England would continue to adopt an aggressive monetary policy for a considerable period. Hence, the regulator can continue to slow down the rate of interest rate growth even with significant inflation (over 10%). Especially given Andrew Bailey's prediction of a significant reduction in the consumer price index this year. The inflation response to tighter monetary policy probably occurs with a longer lag than in the US. Then, Mr. Bailey's statements make perfect sense. We may be putting a stop to BA's efforts to reduce inflation early as the rate of inflation in Britain started to drop three months ago. To be certain that Chairman Bailey is correct or incorrect, it may be prudent to wait a few more months. Read next: USD/JPY Is Trading Close To 134.00, EUR/USD Is Remaining Above $1.07| FXMAG.COM Rishi Sunak is working to improve relations with the European Union. Yesterday, Rishi Sunak, the British prime minister, delivered a crucial message. He claimed that by opting for Brexit in 2016, the majority of Britons made a mistake, which the UK government will now attempt to right. Despite the referendum results, the administration plans to pursue a course to mend fences with the EU. Mr. Sunak observed that although his country has taken some steps since 2017 to reap the benefits of its non-aligned status, all of these steps have been detrimental to it. They will be canceled repeatedly and gradually. "I believe that the British people have completely recognized over the past seven years that the 2016 choice was incorrect. It's time to move on and forget about this, even if I can't hold him responsible for his choice. We'll carry on as usual with our relationships with our European brothers. Such damaging choices are in no way justified," according to Sunak. As we previously stated, recent opinion surveys of the British population have been repeated, and the results are crystal clear. If only 51.9% of residents backed Brexit in 2016, then the percentage of people in favor of leaving the EU has been progressively declining each year. Far more people regret their decision to leave the EU and desire to return to it. Although a scenario in which Britain rejoins the Alliance is unlikely to occur in the near future, both the EU and the former can gain from this if Britain once more pursues rapprochement with the latter. Additionally, if the Kingdom resumes the process of integrating with the Union, Scotland might reconsider having its vote. From our perspective, this one will take years, but in the long run, it is good news and a sign of the right way for Britain and the British pound, which has lost two times as much value against the dollar since 2007. We are anticipating a further decline because the pound is currently trading below the moving average. It is too early to consider the "double bottom" pattern established. Tomorrow's reduction in quote marks will end it. The overbought or oversold territory for the CCI indicator has not recently been reached. The pair is confidently advancing to the range of 1.1800-1.1850 on the 24-hour TF. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 139 points. This figure is "high" for the dollar/pound exchange rate. So, on Friday, February 17, we anticipate movement that is limited inside the channel and is constrained by levels 1.1886 and 1.2154. A cycle of corrective movement begins when the Heiken Ashi indicator reverses upward. Nearest levels of support S1 – 1.1963 S2 – 1.1902 S3 – 1.1841 Nearest levels of resistance R1 – 1.2024 R2 – 1.2085 R3 – 1.2146 Trade Suggestions: Over the 4-hour timeframe, the GBP/USD pair reversed the downward trend. So, until the Heiken Ashi indicator turns up, it is possible to hold short positions with targets of 1.1963 and 1.1902. If you consolidate above the moving average with targets of 1.2146 and 1.2207, you can start buying. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 01:00 2023-02-18 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335380
Gold Trading Analysis: Technical Signals and Price Movements

FX Daily: Hawks in the ascendancy

ING Economics ING Economics 17.02.2023 09:43
It is a familiar story in FX, but the strong run of US price and activity data has provided a tailwind to Fed hawks. Yesterday it was the turn of Fed's Mester and Bullard to put the idea of more aggressive 50bp rate hikes back on the table. We have another couple of Fed hawks speaking today, Barkin and Bowman, suggesting the dollar can hold gains The Fed's James Bullard said he would not rule out supporting a half-percentage-point hike at the March meeting USD: First quarter of 2023 is proving to be the push-back quarter The dollar continues to quietly reclaim some of the heavy losses seen since last October. DXY has now reclaimed about a quarter of that sell-off. The move has clearly been driven by the re-assessment of the Fed cycle, where the 'higher for longer' camp is in the ascendancy. Yesterday, it was the turn of Loretta Mester and James Bullard to outline how they had favoured a 50bp hike earlier this month instead of the 25bp which was delivered. Equally, they both implied they could support a 50bp hike at the 22 March meeting.  Their comments coincided with an above-consensus US January PPI release and pushed 10-year US Treasury yields a further 6-7bp higher. At 3.89%, the US 10-year yield is now the highest since November. The higher rates for longer thesis has also seen some substantial re-pricing of the Fed curve this month where market pricing for the December 2023 Fed Funds rate has risen to 5.10% from 4.35%. Financial markets are making these substantial adjustments to the Fed cycle – i.e. markets are listening to the Fed hawks – because US activity and price data are coming in stronger than expected. We think the better activity data is partly weather-related and had always thought that the next leg of the US disinflation story would be in the second rather than the first quarter. In short, we think the current dollar rally is probably a correction to an underlying bear trend in 2023. This 1Q23 dollar correction may have a little further to run, however. Today we will also hear from Fed hawks Thomas Barkin and Elizabeth Bowman, plus receive an update on January import prices. We see a scenario where DXY continues to edge up to 105.00, with outside risk this quarter to strong resistance at 106.50 (about 1.8% above current levels), which may then prove the best dollar levels of the year. The next big input to the story will be the FOMC minutes released next Wednesday. Chris Turner EUR: Temporary downside to EUR/USD The hawkish re-pricing of the Fed curve dominates markets and even though eurozone money market rates have risen too, the two-year EUR/USD swap differential has widened back out to levels last seen in mid-December. This now stands at -150bp having narrowed to -110bp at the start of this month. Arguably this spread should not narrow in too much more (unless the market thinks that Fed Funds will end the year near 5.50%), meaning that EUR/USD may not have to fall too much more. We would, however, say the direction of travel is to the 1.0450/1.0500 area, which may be the strongest dollar level of the year for eurozone corporates. There is not too much on the eurozone calendar today apart from the December current account figure and the market seems to be ignoring yesterday's comments from ECB dove, Fabio Panetta, favouring the ECB to move in 25bp rather than 50bp increments. Today we hear from ECB's Francois Villeroy (1230CET), seen more as a centrist these days. Chris Turner GBP: BoE slowdown softens the pound In contrast to the hawkish Fed rhetoric yesterday, comments from Bank of England chief economist Huw Pill pointed towards the BoE shifting towards a slower pace of tightening. As mentioned yesterday, we look for one final 25bp BoE hike to 4.25% next month. The comments have seen sterling very marginally underperform – consistent with our preferred view of EUR/GBP drifting into a 0.89/90 range this year. Away from central banking, the UK press is focusing on a surprise trip by Prime Minister Rishi Sunak to Northern Ireland today. The presumption is that he is trying to win over the DUP nationalist party in support of changes to the Northern Ireland protocol, which could see improved trading relations with the EU. We suspect sterling does not get much of a bounce were a new EU deal announced, with investors quite fatigued on this subject. Chris Turner  PLN: The FX mortgage saga remains on the table Yesterday, the European Court of Justice (ECJ) gave its opinion on the FX mortgage issue in Poland. According to the statement, European Union law does not prevent local law from allowing consumers to claim compensation over and above the compensation already common today. On the other hand, banks cannot charge capital costs if the contract with the client is terminated. However, it seems that a clear interpretation of the ECJ's opinion is yet to be found before assessing whether yesterday's statement is negative or not. From the market reaction, it seems that the first direction was negative, however, during the day the Polish market was rather hit by the global story, and in fact, banking stocks in Poland reversed their direction and erased their initial losses. Of course, this story did not end yesterday, and we will probably see more headlines from local banks and the government in the coming days as to what the expected impact on the banking sector is. As for the market, we are unlikely to see a clear sell-off and a jump-up in the Polish zloty, but the issue remains on the table, and we are more likely to see constant pressure on the zloty to continue to underperform the CEE region. For now, we expect EUR/PLN to stabilise around 4.77. Also today after the end of trading we will see a rating review of Poland by S&P. We expect the rating to remain unchanged and yesterday's decision should not affect the review. However, the August review assumed a smooth drawdown of EU money, which has emerged as a problem for the Polish government in recent weeks. Moreover, the macro picture is also mixed and after the experience with the recent downgrade in the case of Hungary, the market cannot ignore this review. Frantisek Taborsky Read this article on THINK TagsFX Federal Reserve Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more    
Earnings season: Tesla stock price slipped after yesterday's news. The best selling car in Q1 was Model Y

Tesla Has Been The Most Transacted Stock And CFD At Saxo

Saxo Bank Saxo Bank 17.02.2023 09:59
Summary:  We cover the most traded instruments at Saxo for the third week of February, from what the most traded Futures, Stocks, CFDs, options and FX positions were for the week that was. We touch on how some clients are protecting themselves in case Tesla and or the S&P500 pulls back, plus why some clients are trading Commonwealth Bank of Australia shares. Here are the most traded instruments at Saxo Capital Markets Australia for the week ending February 17, 2023In Futures the most traded instrument for the week ending 17 February 2023 was the S&P500 E-Mini. We have been speaking about the S&P500 rally looking vulnerable of a pull back, so clients are expressing that view with perhaps futures.  Tesla (TSLA) has been the most transacted stock and CFD at Saxo for the week ending 17 February 2023. We have seen buying pick in up TSLA shares, but also in options as well; with clients using optionality to protect themselves in case of a potential pull back.  We've been speaking about Tesla shares trading in overbought territory after Tesla shares have run up over 90% from their lows, so perhaps some clients are using options as a protective cushion. Commonwealth Bank of Australia (CBA) is the second most transacted upon stock/CFD at Saxo this week in Australia. Some buyers swooped in after CBA shares shed about 8% over the week. Market consensus expects CBA earnings to grow in 2023 - even despite the headwinds of CBA guiding for an uncertain year ahead - putting capital aside for bad debts with consumers feeling financial strain from inflationary pressures. And in Foreign Exchange (FX), the Aussie dollar against the US, the AUDUSD pair, was the most transacted upon currency pair after the Australian unemployment rate rose. This week at Saxo, there was more Aussie dollar selling, than buying, as the Reserve Bank of Australia’s (RBA) task in rising rates to slow the pace of inflation - just got a little tougher - given the jobless rate surprisingly rose. This was not expected by the market or the RBA. The RBA previously expected the jobless rate to pick up later this year. However, at Saxo, we saw some clients taking a longer term view on the Aussie dollar (the AUDUSD pair), given commodity companies who reported this week, such as Fortescue Metals (FMG) gave bullish outlooks on China's reopening boosting resources demand, and that would theoretically support the Aussie dollar. For more on our bullish outlook on commodities, read our Quarterly Outlook.  Click here to look at more stocks to watch across the metals sector this week.For our team's weekly look at markets, click here. To listen to our global team's take on markets - tune into our Podcast.   Source: Financial Insights: Sharing the most traded instruments at Saxo for the week, including Tesla options picking up | Saxo Group (home.saxo)
Bank of England is expected to hike the rate by 25bp. Kelvin Wong talks Euro against British pound

The Bank Of England's (Boe) Current Rate-Hiking Cycle Might Be Nearing The End And This Acts As A Tailwind For The EUR/GBP Cross

TeleTrade Comments TeleTrade Comments 17.02.2023 10:01
EUR/GBP gains positive traction for the third straight day and climbs to over a one-week high. The upbeat UK Retail Sales for January fail to impress the GBP bulls or provide any impetus. Bets for additional jumbo rate hikes by the ECB support prospects for further near-term gains. The EUR/GBP cross builds on this week's goodish bounce from the 0.8800 mark and edges higher for the third successive day on Friday. Spot prices hold steady above the 0.8900 round figure through the early European session and react little to the latest UK macro data. The UK Office for National Statistics reported that domestic Retail Sales grew 0.5% in January against consensus estimates for a 0.3% fall. Furthermore, sales excluding fuel also surpassed market expectations and rose by 0.4% during the reported month. The better-than-expected prints, however, were offset by a downward revision of the previous month's already weaker readings. This, in turn, fails to provide any meaningful impetus to the British Pound or move the EUR/GBP cross. That said, the softer UK consumer inflation figures released earlier this week fueled expectations that the Bank of England's (BoE) current rate-hiking cycle might be nearing the end. This continues to weigh on the Sterling and acts as a tailwind for the EUR/GBP cross. That said, broad-based US Dollar strength exerts some follow-through downward pressure on the shared currency. This, in turn, holds back bulls from placing aggressive bets and caps the upside for the cross, at least for now. Meanwhile, bets for additional jumbo rate hikes by the European Central Bank (ECB) might contribute to the Euro's relative outperformance against its British counterpart. This, in turn, supports prospects for a further near-term appreciating move for the EUR/GBP cross. Hence, some follow-through strength back towards the 0.8975-0.8980 region, or the highest level since September 2022 touched earlier this month, looks like a distinct possibility. Technical levels to watch remaining time till the new event being published U.S.: Leading Indicators
Central Banks and Inflation: Lessons from History and Current Realities

Generally Weaker Tone Around The Equity Markets Contributes To Capping The GBP/JPY Cross

TeleTrade Comments TeleTrade Comments 17.02.2023 10:08
GBP/JPY regains positive traction on Friday and snaps a two-day losing streak. The uncertainty over the BoJ’s policy path weighs on the JPY and lends support. Speculations that the BoE’s rate hiking cycle is nearing the end caps the upside. The GBP/JPY cross attracts some buying near the 160.50 area on Friday and stalls this week's pullback from the YTD peak. The cross sticks to its gains around the 161.00 mark through the early European session and for now, seems to have snapped a two-day losing streak. The Japanese Yen (JPY) weakens across the board amid the uncertainty over the path of monetary policy under new Bank of Japan (BoJ) Governor Kazuo Ueda, which, in turn, lends support to the GBP/JPY cross. Investors have been speculating that Ueda will dismantle the yield curve control easing mechanism. That said, data released this week showed the world’s third-largest economy grew at a slower-than-expected pace in the fourth quarter and making it prudent for the BoJ to stick to its ultra-lose monetary policy stance. That said, any meaningful upside for the GBP/JPY cross seems elusive, at least for the time being, amid expectations that the Bank of England's (BoE) current rate-hiking cycle might be nearing the end. The bets were lifted by softer-than-expected UK consumer inflation figures on Wednesday, which might have eased pressure on the UK central bank to tighten its monetary policy more aggressively. This, to a larger extent, offsets the better-than-expected UK Retail Sales figures for January and might hold back bulls from placing fresh bets. Apart from this, a generally weaker tone around the equity markets - amid looming recession risks - benefits the safe-haven JPY and further contributes to capping the GBP/JPY cross. Hence, it will be prudent to wait for some follow-through buying before positioning for the resumption of the recent positive trend witnessed over the past two weeks or so. Nevertheless, spot prices remain on track to register first weekly gains in the previous three. Technical levels to watch remaining time till the new event being published U.S.: Leading Indicators
Rates Spark: Escalating into a Rout as Bond Bear Steepening Accelerates

A Mix Of Economic Data Caused Confusion In The Markets

Swissquote Bank Swissquote Bank 17.02.2023 10:18
The equity marathon that kept going on for questionable reasons since Tuesday ended in tears yesterday, with the arrival of a new set of economic data that crushed the optimistic rhetoric of soft landing.  The latest data Released yesterday, the latest data showed that US producer price inflation rose more than expected on a monthly basis, both for headline and core data, and the core PPI eased less than expected – similar to what we saw in the CPI data, BUT the Philli Fed manufacturing index was a disaster with an unexpected drop from -8.9 to -24.3 – the expectation was a -7.4 print. Fed So that crushed the idea that the economy is strong, without however fueling the Federal Reserve (Fed) cut expectations, as the slowdown in inflation needs to be addressed for some more time. And of course, comments from two Fed members were the last nails in the coffin yesterday. Loretta Mester said that she would go for a 50bp hike if she had the right to vote in the latest FOMC meeting. And James Bullard said that he would back a 50bp hike in March, if he could vote this year. The US 2-year yield consolidates a touch below 4.70%, while the 10-year yield hit 3.90% for the first time this year. US Stocks The S&P500 gave back nearly 1.40% yesterday, while the more rate-sensitive Nasdaq fell nearly 2%. European stock US futures hint at further selloff before the weekly closing bell, as in the absence of important data, investors will have to digest the week’s mixed data. And the bad news is, the European stock traders will also have to think whether a further rally in European stocks makes sense, when the EURUSD is trending lower. Watch the full episode to find out more! 0:00 Intro 0:44 Equity investors are victim of mixed economic data 2:33 Rate expectations and yields update 4:35 Equity update 5:16 FX update 6:23 Gold down, Bitcoin up 8:40 There is no such thing as ‘no landing’ Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #mixed #economic #data #Fed #rate #expectations #USD #EUR #JPY #XAU #Crude #Oil #bitcoin #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Caixin Services PMI Data Has Helped The Chinese Yuan (CNH)

Analysis Of The USD/CNH Pair By Economist And Markets Strategist At UOB Group

TeleTrade Comments TeleTrade Comments 17.02.2023 10:25
According to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, USD/CNH is expected to meet a solid up barrier at the 6.9300 level in the near term. Key Quotes 24-hour view: “Yesterday, we highlighted that USD could continue to advance but we indicated, ‘overbought conditions suggest a break of 6.8800 is unlikely’. Our view was not wrong as USD rose to 6.8800. USD traded on a firm note in early Asian trade and edged above 6.8800. Further USD gains are likely but the next major resistance at 6.9000 may be out of reach today. Support is at 6.8650, a breach of 6.8570 would indicate that USD is not advancing further. Next 1-3 weeks: “We highlighted yesterday that ‘the outlook for USD is still positive’. We added, ‘a break of 6.8800 will shift the focus to 6.9000’. USD edged above 6.8800 in early Asian trade. Not surprisingly, the outlook for USD remains positive and the focus now is at 6.9000. Looking ahead, the next major level above 6.9000 is at 6.9300. Overall, only a break of 6.8360 (‘strong support’ level was at 6.8250 yesterday) would indicate that the USD strength that started earlier this month has come to an end.”
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

Kenny Fisher Kenny Fisher 17.02.2023 10:29
The euro is down for a third straight day and fell earlier to 1.0629, its lowest level since Jan. 23. In the European session, EUR/USD is trading at 1.0639, down 0.30%. US dollar flexing muscles The US dollar is showing some strength this week against the majors, as US data continues to shine. Retail sales impressed with a 3% gain earlier this week, and PPI and unemployment claims were both better than expected. Is the disinflation process stalled? The markets didn’t expect such good numbers, but the economy has proved to be surprisingly resilient to rising interest rates. The Fed has been preaching ‘higher for longer’ for some time, but the markets stuck to their dovish stance, expecting that the Fed would have to pivot and even cut rates later in the year. The host of strong US numbers has forced investors to recalibrate, and the markets have revised upwards their peak rate forecast to above 5%. The US dollar has been the big winner of the shift in market thinking, and US Treasury yields are at their highest level this year. Fed member Mester said she saw a strong case for raising rates by 50 basis points at the last Fed meeting, a sign that the Fed could move away from the moderate 25-bp hikes if inflation isn’t falling quickly enough. Mester said that she didn’t see inflation falling to 2% until 2025, which points to a long disinflation process. The ECB raised rates by 50 basis points in February and has signalled that it will do the same at the Mar. 16 meeting. The main financing rate is currently at 3%, well below the Fed (4.5%) and other major central banks. It’s not clear what the Bank has planned after the first quarter, but with inflation running at 8.5%, the risk for further rate hikes is skewed to the upside. The ECB has made it clear that rates will remain high until there is evidence that inflation is falling toward the target, which means that the current rate-tightening cycle isn’t anywhere near its end. Read next: USD/JPY Is Trading Close To 134.00, EUR/USD Is Remaining Above $1.07| FXMAG.COM EUR/USD Technical EUR/USD is testing support at 1.0629. Below, there is support at 1.0581 1.0762 and 1.0847 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
More declines of Bitcoin to US dollar should force the altcoins to drop as well

Wyoming Prohibits Forced Disclosure Of Private Cryptographic Keys By US State Courts, JP Morgan Projections Of FX Market

Kamila Szypuła Kamila Szypuła 17.02.2023 12:42
The cryptocurrency market still requires special regulations, new laws are still being introduced to this market. Wyoming remains the most popular state in the US for this market. JP Morgan is looking at the situation on the forex market. In this article: Wyoming is the most cryptocurrency-friendly states in the US Climate prediction model for wind and solar power The 2023 dollar projections by JP Morgan The Russo-Ukrainian war Wyoming is the most cryptocurrency-friendly states in the US Wyoming passed a bill Wednesday that effectively bans forced disclosure of private cryptographic keys by U.S. state courts. The private key is used to verify cryptographic transactions and prove ownership of a blockchain asset or address. The right includes any private keys associated with digital assets, someone's digital identity, or any other interests or rights that a private key provides. If approved by Wyoming Governor Mark Gordon, the bill will go into effect on July 1, 2023. Wyoming has long been touted as one of the most cryptocurrency-friendly states in the US It was the first U.S. state to declare a decentralized autonomous organization (DAO) as a limited liability company (LLC) in July 2021, having previously considered state-issuing a stablecoin in February 2022, but has not gone very far since then. #cryptonews: Wyoming lawmakers pass a bill prohibiting forced disclosure of #Bitcoin private keys 🇺🇸 — CoinMarketCap (@CoinMarketCap) February 17, 2023 Climate prediction model for wind and solar power Economies around the world are moving towards renewable energy sources. China as the second largest economy in the world is introducing its own models that aim to accelerate and improve the green transformation. China has launched a national climate forecasting model for wind and solar resources to enable provincial governments to forecast energy demand and supply. Looking globally at renewables, unless new and stronger policies are implemented in 2023, global renewable power generation is expected to remain steady compared to 2022. While photovoltaics will break another record in 2023. China launches climate prediction model for wind and solar power https://t.co/DJKqCEH9bt pic.twitter.com/uR4bKzONIy — Reuters Business (@ReutersBiz) February 17, 2023 Read next: Microsoft: Bing With Artificial Intelligence And The First Mistakes And Confusing Answers| FXMAG.COM The 2023 dollar projections by JP Morgan 2022 was a historic year. The US dollar strengthened against almost every other major currency to levels not seen in decades as the Federal Reserve (Fed) aggressively raised interest rates to combat inflation. The US dollar gained over 12% in 2022, hitting a two-decade high in September 2022. The 2023 dollar projections for various currency pairs are more related to country-specific factors that JP Morgan is looking at. The situation of the euro, pound and yen currencies will largely depend on developments in the economy. Currency markets have been volatile. Will we see the return of a strong U.S. dollar? And what’s the outlook for other major currencies? Explore J.P. Morgan Research insights: https://t.co/5Bc5HAn7ix pic.twitter.com/bE292j9fBr — J.P. Morgan (@jpmorgan) February 16, 2023 The Russo-Ukrainian war The situation in Ukraine is getting worse. The Ukrainians, despite almost a year of defense, are still holding on, but Russia is not giving up. Several regions of Ukraine faced a barrage of missile attacks overnight, one of which hit the country's largest refinery. Meanwhile, Russia is increasing the number of reservists it is sending to the front lines as part of its anticipated spring offensive, and is already stepping up ground attacks in eastern and southern Ukraine. In addition, the world's government and military leaders gather in Munich, Germany, for the annual Munich Conference on International Security Policy. The theme of this year's summit is the Russo-Ukrainian war and it takes place just before the anniversary of Russia's full-scale invasion of its neighbour. World leaders convene in Munich; Zelenskyy rules out conceding territory for peace https://t.co/VTIFW9v3Lt — CNBC (@CNBC) February 17, 2023
Impact of Declining Confidence: Italian Business Sentiment in August

EUR/USD And AUD/USD Are In Downward Trend, USD/JPY Hit 135.00, GBP/USD Is Below $1.20

Kamila Szypuła Kamila Szypuła 17.02.2023 13:12
The dollar rose to a six-week high on Friday as strong US economic data and comments from Federal Reserve officials prompted investors to bet on another rate hike. The Fed's target range is currently between 4.5% and 4.75%. Economists at Goldman Sachs on Thursday raised their expectations for Fed rate hikes this year. After previously expecting two more hikes, they said they now expect three more hikes of 25 bp in March, May and June. That would push interest rates to 5.25% to 5.5%. The US Economic Report will not include any macroeconomic data releases that could significantly affect the behavior of the US dollar. As such, market participants will pay close attention to risk perception. USD/JPY The yen pair hit its highest level in almost two months. USD/JPY has been trending up since the start of the day. USD/JPY started the day trading just above 134.07 and has now crossed the 135.00 mark. EUR/USD EUR/USD extended its decline during the Asian trading hours and hit its lowest level since early January below 1.0650. The technical outlook for the short-term pair shows that the bearish bias remains intact. Meanwhile, comments from Federal Reserve (Fed) and European Central Bank (ECB) officials add to the burden on the EUR/USD pair. The euro could weaken further as the market's interest-rate rise expectations for the European Central Bank may be overdone given comments from ECB members about the risks of excessive policy tightening. ECB board member Fabio Panetta said on Thursday that the ECB should consider the risk of unduly tightening policy and argued that the bank should not commit unconditionally in advance to future policy moves. From a more neutral point of view, the ECB's chief economist Philip Lane said he was open-minded about the exact amount of monetary tightening that would be needed to meet the inflation target. On the other hand, Cleveland Fed President Loretta Mester reiterated that the interest rate will have to rise above 5% and stay there for some time for the Fed to control inflation. Read next: Wyoming Prohibits Forced Disclosure Of Private Cryptographic Keys By US State Courts, JP Morgan Projections Of FX Market| FXMAG.COM GBP/USD GBP/USD extends losses towards 1.1900 in the early European morning. The strength of the US dollar (USD) had a big impact on the GBP/USD exchange rate in the second half of the week. Hawkish comments from Fed policymakers and the latest released macroeconomic data have revived expectations that the Fed may decide to make additional interest rate hikes even after May. Data from the UK showed that retail sales rose by 0.5% in January, as compared to market expectations for a fall of 0.3%. While this reading was better than the market's 0.3% decline, December's -1% reading was revised lower to -1.2%, preventing Sterling from taking advantage of the data. AUD/USD Reserve Bank of Australia (RBA) Chairman Lowe's comments did not stop the AUDUSD rate from falling. Governor Lowe warned that the RBA was keeping an open mind and their view was that further rate hikes were needed. Lowe also stated that interest rates are not on a predetermined path as it takes 18-24 months for rate hikes to make an impact in the economy. The pair of the Australian is in a downtrend on Friday. AUD/USD has fallen well below 0.69 and is trading below the 0.6820 level. Source: finance.yahoo.com, investing.com
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

The US Dollar Is Broadly Higher And Has Pummelled The Yen, USD/JPY Broke Above 135.00 Today

Kenny Fisher Kenny Fisher 17.02.2023 13:52
The Japanese yen is down sharply on Friday. In the European session, USD/JPY is trading at 134.93, up 0.73%. The yen fell below 135 earlier today for the first time since December 23. Solid US data sends dollar higher The US dollar is broadly higher and has pummelled the yen, climbing 2.6% this week. Strong US numbers have boosted the dollar, as the Fed is likely to remain hawkish with the economy remaining strong. Retail sales impressed with a 3% gain earlier this week, and PPI and unemployment claims were both better than expected. Consumer inflation ticked lower but was stronger than expected. Is the disinflation process stalled? The economy has proven to be surprisingly resilient to rising interest rates, leading to hopes for a soft landing or even a ‘no landing’. The Fed has been consistent in its message of ‘higher for longer’ with regard to rates, but the markets haven’t really been listening, assuming that the Fed would have to pivot and even cut rates later in the year. The stronger-than-expected releases, from nonfarm payrolls to inflation to retail sales have forced the markets to revise their stance and move closer to the Fed position that the terminal rate will be above 5%. Fed speak remains hawkish Fed member Mester said she saw a strong case for raising rates by 50 basis points at the last Fed meeting, a sign that the Fed could move away from the moderate 25-bp hikes if inflation isn’t falling quickly enough. Mester said that she didn’t see inflation falling to 2% until 2025, which points to a long disinflation process. The depreciation of the yen will be raising eyebrows in Tokyo. The Bank of Japan and the Ministry of Finance have often voiced unease when the yen has plunged and this has led to currency interventions in order to prop up the yen. It’s a delicate time for the Bank of Japan, as Kozo Ueda is set to take over as Governor in April. If the yen continues to lose ground, we’re sure to hear warnings from the BoJ and the Ministry of Finance, possibly with threats of intervention. Read next: Wyoming Prohibits Forced Disclosure Of Private Cryptographic Keys By US State Courts, JP Morgan Projections Of FX Market| FXMAG.COM USD/JPY Technical USD/JPY is testing resistance at 134.47. Above, there is resistance at 136.05 There is support at 1.3355 and 1.3296 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

Fed and ECB seem poised to take interest rates even further into restrictive territory

Ed Moya Ed Moya 18.02.2023 09:25
Wall Street appears to be closing out the week on a down note as investors become rattled over the prospect of more tightening by the Fed. It isn’t just Fed expectations that are rising, traders are also expecting the ECB to send rates much higher. It looks like global growth will definitely take a harder hit as monetary policy gets even more restrictive over the next few months. More from the Fed Fed’s Bowman reiterated inflation is still too high and that they need to continue hikes until we see more progress. She did note the Fed is seeing a lot of inconsistent data in economic conditions. It doesn’t look there is a chance that the Fed will be holding anytime soon, which should keep sending yields higher at the short-end of the curve. Fed’s Barkin however wants to remain flexible and favors a 25 basis point increase. He acknowledges that he is not ready to declare victory on inflation. FX Friday’s sell everything trade initially sent the dollar higher as risk aversion appears to be running wild as Fed tightening jitters make it more likely the US economy is recession bound. The latest round of hawkish Fed speak from Bullard, Mester, and Bowman have swaps pricing rate hikes at the March and May meetings. The dollar pared earlier gains as yields came in around the European close and after Fed Barkin’s comment that he favors 25bp rate hikes for flexibility. Oil Crude prices are falling as supplies are plentiful and as global growth concerns return as the Fed and ECB seem poised to take interest rates even further into restrictive territory. The belief that OPEC+ can keep prices supported wherever they want is waning as global growth outlooks take a turn for the worse. As long as supplies seem ample, OPEC+ will be playing catchup to keep the market tight. Oil is seeing steady selling pressure and the true test will be if prices can break below the $72.00 a barrel level. Gold Gold prices got crushed this week as the bond bears are fully in control now that the market is pricing in more Fed rate hikes. Gold’s vulnerability to further downside however should be limited as central banks appear poised to increase their bullion holdings. Global recession risks are returning and that should lead to some safe-haven flows for gold. Gold should have major support ahead of the $1800 level, which means we might be stuck in a range until we have clearer signs if inflation is going to continue to accelerate here. Crypto Bitcoin is lower on the day as every risky asset sold off on fears of more aggressive Fed tightening and rising recession risks. After Bitcoin tested the $25,000 level and failed to extend higher, many active traders locked in profits. Appetite for risky assets might struggle over the short-term, which could support a Bitcoin consolidation as long as a regulatory crackdown does not take down a key stablecoin or crypto company. Many crypto traders are paying close attention to the reports that Binance might exit relationships with US companies as pressure from regulators intensifies. Binance CEO Changpeng Zhao (CZ) tweeted, “Given the ongoing regulatory uncertainty in certain markets, we will be reviewing other projects in those jurisdictions to ensure our users are insulated from any undue harm.” Binance is the world’s largest exchange and if it abandons key US relationships, that is a major setback for the cryptoverse. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Fear of Strong Jobs: How US Labor Market Resilience Sparks Global Financial Panic

Stock market summary of the week 13-17.02.2023

Conotoxia Comments Conotoxia Comments 18.02.2023 09:29
A surprise in US inflation data, a strengthening US dollar, increased economic activity among consumers and a sharp rally in cryptocurrencies despite their legal woes - these are just some of the events of the past week. What else could we have found out? Macroeconomic data The week started with Japan's GDP data for Q4 2022. It reported growth of 0.2% from the previous quarter, which was lower than economists' forecasts of 0.5% growth. Tuesday saw the release of indicators on the UK labour market situation, including the Average Earnings Index and Claimant Count Change for January 2023. The Earnings Index fell by 0.3 percentage points from the last reading, coming in at 5.9% (6.2% was expected), while the Claimant Count fell by 12.9,000 from the previous month (17,900 was expected). The UK100 Index (UK100) hit new historic peaks this week, reaching 8000 for the time being. Source: Conotoxia MT5, UK100, Daily On the same day, we could learn about the CPI and core inflation readings for January 2023 for the US economy. What seems to have surprised analysts was the higher-than-expected CPI reading of 6.4% (6.2% was expected), while core inflation rose by an expected 0.4% month-on-month. This might imply that the level of disinflation is not going in line with previous assumptions, which could force the Fed to increase interest rates further. Shortly after the release of the data, the S&P 500 Index (US500) fell by 1%, eventually ending the week on a return to the levels seen at the end of last week. Source: Conotoxia MT5, US500, Daily On Wednesday, we learned of the UK's CPI inflation reading. Price dynamics in this economy came in below expectations at 10.1% (10.3% was expected). This is the fourth consecutive month of disinflation in the UK. Indicators of US economic activity, such as the volume of retail sales and core retail sales (excluding car sales), came as a positive surprise on the day. Both indicators beat the most optimistic forecasts, coming in at 2.3% m/m. (0.8% m/m was expected) and 3% m/m. (1.8% m/m. was expected). It seems that, despite the economic slowdown and high inflation, consumers have not stopped their desire to make massive purchases. Thursday brought another batch of data from the United States. First, we learned about the number of new applications for unemployment benefits - 194 000 (200 000 was expected), which may indicate that the US labour market remains in excellent shape. Next, we learned about the sentiment among industrial companies in Philadelphia. The Philadelphia Fed Manufacturing Index turned out to be extremely negative, coming in at minus 24.3 points (minus 7.4 points were expected). This is the worst reading since the pandemic, which may illustrate how much of a slowdown in US manufacturing is expected. Finally, there was another dose of producer PPI inflation, whose reading also came in beating analysts' expectations, at 0.7% m/m in January. (0.4% m/m was expected). This appears to have triggered a correction on expectations for future interest rates, with the spread between 2-year and 10-year bond yields at minus 0.76 percentage points, unseen since 1981. It should be recalled that historically negative values have preceded slowdowns or crises. Source: Fred The stock market The accumulation of negative and positive macroeconomic data may have left the market in dismay. Most sectors ended the week at levels seen seven days ago. The waste sector grew the most, rising 1.5% over the week. We could see this in the performance of the Utilities Select Sector SPDR Fund (XLU). In second place was the energy sector, up 1.3%. Source: Conotoxia MT5, XLU, Daily Key company reports for Q4 2022 included Tuesday's report from beverage maker Coca-Cola (CocaColaHSB). Results came in line with expectations, with earnings per share EPS of 0.45. On the same day, we saw a report from short-term rental platform Airbnb (Airbnb), which reported EPS greater than expectations of 0.48 (0.25 was expected). Source: Conotoxia MT5, AirBNB, Daily On Wednesday, US-based multinational technology company that specialises in computer networking and telecommunications Cisco (Cisco) released better-than-expected financial results. Last year's Q4 EPS was 0.88 (0.85 was expected). The company's shares rose more than 9% during the week. And it was one of the strongest-growing companies in the S&P 500 index. Source: Heat map for the S&P 500 index, https://finviz.com/map.ashx?t=sec&st=w1 Currency and cryptocurrency market In the foreign exchange market, we could see a significant strengthening of the US dollar this week. This was particularly noticeable from the quotations of the USD/JPY pair, which rose by more than 2.7%. Source: Conotoxia MT5, USDJPY, Daily Another strengthening of the US dollar was seen on the EUR/USD pair, which has fallen by 0.4% since the start of the week. This is the third consecutive week of dollar strengthening and declines on this pair. Investors may have been amazed by cryptocurrency listings. Despite high inflation and thus the risk of further interest rate rises, the closure of stacking functionality by the Kraken exchange in the US and the ban on the issuance of new stablecoin BUSD, the value of bitcoin rose by more than 9%. In contrast, the value of the overall stablecoin market may have stalled. Source: Conotoxia MT5, BTCUSD, Daily Grzegorz Dróżdż, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

Forex Weekly Summary: USD/JPY Closed Below 135.00, GBP/USD Ended The Week Above 1.20, EUR/USD Ended At 1.0697 And The Aussie Pair Closed Below 0.69

Kamila Szypuła Kamila Szypuła 18.02.2023 13:33
For the forex market, the most important event was the publication of the US CPI and speeches by representatives of the Fed and the ECB. The Dollar Index (DXY) has seen gains recently thanks to Fed officials, which is somewhat surprising as the markets seemed steady after the Non-Farm Payroll (NFP), CPI and Retail Sales figures. In addition, the Fed's guidance has been largely rejected recently, but as the pressure to maintain tight monetary policy in the US increases, so does its impact on market participants. The Fed's Mester mentioned that "January's CPI figures showed there is still a long way to go in cooling down inflation," again adding to the messages sent by yesterday's speakers giving further support to the dollar. USD/JPY The yen pair started the week trading at a weekly low of 131.5020. Throughout the week, USD/JPY was in an uptrend. The weekly high of USD/JPY was above 135.00 at 135.0840. After that it dropped below 135.00 to 134.1140 where it closed the week. As Federal Reserve officials continued to reiterate their commitment to containing price pressures through tight monetary policy, compelling arguments for another 50 basis-point rate hike at the March FOMC meeting supported the strengthening of the dollar versus the yen. Although Tuesday's appointment of Kazuo Ueda as a possible successor to incumbent BoJ (Bank of Japan) governor Haruhiko Kuroda gave the Japanese yen a slight respite, losses were limited. EUR/USD The euro/dollar pair started trading at 1.0681, and rose for a day and a half to reach a weekly high at 1.0789 on Tuesday. And from this level, the EUR/USD pair was in a downtrend where the pair was heading towards 1.0620. On Friday, in the European session, it approached this level and thus recorded the lowest trading level of the week, and then bounced back and closed the week at a level close to 1.07, 1.0697. ECB Executive Board member Fabio Panetta said on Thursday that the ECB should consider the risks of over-tightening the policy and argued that the bank should not unconditionally pre-commit to future policy moves. Despite the rather dovish comments, money markets priced in a terminal ECB rate of 3.75% for the first time - implying that the ECB still has another 125 bps worth of hikes to come. GBP/USD The Cable pair started the week at 1.2053. And similarly to the EUR/USD pair, the GBP/USD pair remained in a bullish trend until Tuesday's US session. GBP/USD, like EUR/USD, had a weekly high on Tuesday above 1.22 (1.2241), then the pair began its decline. The decline in the pair continued until Friday until GBP/USD reached its lowest trading level (1.1916), after which the cable pair rebounded and ended the week above 1.20 at 1.2044. The UK's Office for National Statistics reported on Friday that Retail Sales increased by 0.5% on a monthly basis in January AUD/USD The AUD/USD trade start was at 0.6916. The movement of the Australian pair was linked to its European counterparts (GBP, EUR). On Tuesday, AUD/USD reached its highest level of the week - 0.7016. In the following days, the pair was falling towards 0.6825, where on Friday below this level, at 0.6814, it reached its lowest level. Towards the end of the trade, AUD/USD rebounded and closed the week at 0.6880. Source: investung.com, finance.yahoo.com
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

Conotoxia Comments Conotoxia Comments 19.02.2023 10:20
Investors' eyes may turn to next week's key macroeconomic indicators from the EU, particularly Germany, the region's largest economy. Tuesday 21.02. 08:30 GMT, Germany Manufacturing Purchasing Managers Index (PMI) February The German Purchasing Managers' Index provides insight into the construction industry's activity level as reported by purchasing managers. This measure provides an understanding of the state of the German construction industry, as it is assumed that purchasing managers have access to first-hand data on the performance of their companies.   A reading above 50 indicates expansion, while a reading below 50 indicates contraction. The last time the German manufacturing PMI was above 50 was in June 2022, and the preliminary reading for February 2023 is forecast to be 47.9. Falling factory activity has been linked to lower orders amid weaker demand from both domestic and foreign customers, especially Chinese, due to high stocks, elevated prices and slowing investment activity. A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could be bearish for the EUR.  Impact: EUR Tuesday 21.02. 10:00 GMT, Germany ZEW Economic Sentiment February ZEW Economic Sentiment is one of the leading economic indicators of Germany. It is created based on interviewing experts from banks and other sectors about their expectations regarding interest rates, inflation rates, exchange rates, stock markets and other measures, such as the economic development of the world's major economies, in order to develop a sentiment for the German economy for the next six months. The ZEW Indicator of Economic Sentiment is calculated by comparing the number of experts with positive versus negative sentiment. For example, if 30% hold positive sentiment, 20% have neutral sentiment, and 50% hold negative sentiment,then the ZEW index would result in -20%. January's ZEW Economic Sentiment was positive for the first time since February 2022, suggesting that German experts may be turning away from their negative sentiment. If the February 2023 data are also positive, this could confirm the above statement. However, it would be a better-than-expected surprise as the current forecast for ZEW Economic Sentiment this month is -15%.  A positive or less negative result than the forecast could be seen as bullish for the EUR, while a lower (more negative) result could be seen as bearish for the EUR. Impact: EUR Wednesday 07:00 GMT, German CPI (YoY) (January) While the German Manufacturing PMI and ZEW Economic Sentiment will provide the first indicators of German economic strength, the CPI later in the week will show whether the ECB's hawkish policy is succeeding in the fight against inflation.  The CPI measures the change in prices paid by consumers for a given basket of goods and services over a specified period. This information shows changes compared to a year ago. The CPI is the main measure of inflation - a higher index means higher inflation. The preliminary data for January inflation showed a slight increase in inflation from December 2022 (8.7% versus 8.6%), showing that inflationary pressure may not be over. Economists are suggesting that Germany's broad governmental support schemes may be extending the inflationary pressure, although at a lower level.  Higher-than-expected data may have a bullish impact on the EUR and a bearish impact on the stock market, while lower-than-expected data may have a bearish effect on the EUR and a bullish impact on the stock market.  Impact: EUR, DAX Thursday 10:00 GMT EU CPI (YoY) (January) The preliminary result of the EU CPI data for January fell to 8.5% from 9.2% in the previous month, despite the 1% rise in German inflation. Possibly, the higher German data may be the reason why the EU CPI for January is expected to be 9.2%, 70 bp higher than the preliminary figure. The inflation outlook for the euro area and Germany appears to be influenced by two opposing factors. On the one hand, lower-than-forecast energy prices may push down inflation faster than previously thought. On the other hand, the pass-through pressure of energy and commodities inflation to production costs is not yet over, keeping the overall inflation high. Furthermore, as the geopolitical situation in Europe is not improving, the ongoing price negotiations within the agricultural sector may result in higher-than-expected prices giving an additional boost to the inflation numbers.  Higher-than-expected data may have a bullish impact on the EUR and a bearish impact on the stock market, while lower-than-expected data may have a bearish effect on the EUR and a bullish impact on the stock market.  Impact: EUR, DAX, STOXX Stocks to watch Walmart (WMT) announcing its earnings results for the quarter ending on 01/2023. Forecast: 1.51. Positive earnings surprise in 8 out of the last 10 reports. Time: Tuesday, February 21, before the market opens. Home Depot (HD) announcing its earnings results for the quarter ending on 01/2023. Forecast: 3.29. Positive earnings surprise in 10 out of the last 10 reports. Time: Tuesday, February 21, before the market opens. NVIDIA (NVDA) announcing its earnings results for the quarter ending on 01/2023. Forecast: 0.8102. Positive earnings surprise in 9 out of the last 10 reports. Time: Wednesday, February 22, after the market closes. Alibaba (BABA) announcing its earnings results for the quarter ending on 12/2022. Forecast: 16.63. Positive earnings surprise in 8 out of the last 10 reports. Time: Thursday, February 23, before the market opens. Dell Technologies (DELL) announcing its earnings results for the quarter ending on 01/2023. Forecast: 1.65. Positive earnings surprise in 9 out of the last 10 reports. Time: Friday, February 24, 21:30 GMT. Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

At The Close On The New York Stock Exchange Only The Dow Jones Rose

InstaForex Analysis InstaForex Analysis 20.02.2023 08:00
At the close on the New York Stock Exchange, the Dow Jones rose 0.39%, the S&P 500 index fell 0.28%, and the NASDAQ Composite index fell 0.58%.  Dow Jones Merck & Company Inc was the top gainer among the components of the Dow Jones in today's trading, up 3.01 points (2.83%) to close at 109.52. Amgen Inc rose 6.31 points or 2.69% to close at 240.53. UnitedHealth Group Incorporated rose 11.73 points or 2.41% to close at 499.08. The least gainers were shares of Chevron Corp, which lost 3.72 points or 2.23% to end the session at 162.85. Intel Corporation was up 2.09% or 0.59 points to close at 27.61, while Salesforce Inc was down 1.75% or 2.94 points to close at 165.17.  S&P 500 Leading gainers among the S&P 500 index components in today's trading were Deere & Company, which rose 7.53% to 433.31, Bio-Rad Laboratories Inc, which gained 5.99% to close at 483.23 , as well as shares of Organon & Co, which rose 4.60% to close the session at 26.02. The least gainers were Albemarle Corp, which shed 9.67% to close at 258.00. Shares of Hess Corporation shed 5.73% to end the session at 135.52. Quotes of Halliburton Company decreased in price by 5.39% to 36.50. NASDAQ The leading gainers among the components of the NASDAQ Composite in today's trading were OKYO Pharma Ltd ADR, which rose 62.96% to 3.74, Pathfinder Acquisition Corp, which gained 46.56% to close at 4.69. as well as shares of Apexigen Inc, which rose 44.21% to close the session at 1.37. The least gainers were shares of Arqit Quantum Inc, which shed 42.09% to close at 1.47. Shares of Universal Electronics Inc lost 33.01% and ended the session at 16.38. Quotes Mountain Crest Acquisition Corp III fell in price by 32.72% to 4.97. Numbers On the New York Stock Exchange, the number of securities that fell in price (1689) exceeded the number of those that closed in positive territory (1288), while quotes of 111 shares remained virtually unchanged. On the NASDAQ stock exchange, 1914 companies rose in price, 1686 fell, and 217 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.74% to 20.02. Gold Gold futures for April delivery added 0.00%, or 0.05, to $1.00 a troy ounce. In other commodities, WTI crude for March delivery fell 2.75%, or 2.16, to $76.33 a barrel. Brent oil futures for April delivery fell 2.55%, or 2.17, to $82.97 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.25% to 1.07, while USD/JPY rose 0.18% to hit 134.18. Futures on the USD index rose 0.01% to 103.81.   Relevance up to 03:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313259
These findings of a review of the Reserve Bank of Australia may surprise you!

It Is Likely That The Trend Of The AUD/USD Pair Will Remain Bearish

InstaForex Analysis InstaForex Analysis 20.02.2023 08:00
AUD/USD broke through the support level of 0.6873 last Friday. It fell down by 60 pips, but by the close of the day came back to the level and is now trying to hold on to it. As the Marlin oscillator has been moving sideways for the third session, another consolidation below it could open the way towards the target support at 0.6730. With the pair being under the balance and MACD lines, it is likely that the trend will remain bearish. However, the micro-consolidation of two candlesticks at 0.6873 on the four-hour (H4) chart could prompt a brief rise to the MACD line at 0.6906. A breakdown of this resistance could push the pair up to 0.6939, which is the top of February 16. It will be difficult for the pair to overcome 0.6906 because the Marlin oscillator will meet resistance around the zero level. It could reverse from it synchronously with the price from the MACD line. A price consolidation under 0.6873 on the H4 would be the first sign of the intention to continue the decline. A consolidation under 0.6873 on the daily (D1) chart will give off the same effect. The target level is 0.6730   Relevance up to 03:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335505
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

It Seems That Euro Is Preparing To Overcome The Support Level

InstaForex Analysis InstaForex Analysis 20.02.2023 08:03
The 60-pip decline of EUR/USD last Friday could not be extended. This is because the pair closed with a small white candle, and this morning went back to the range it was trading at last February 16. Although indicator readings have not changed over the past two days, it seems that euro is preparing to overcome the support level of 1.0660. If that happens, the way towards the target level of 1.0470 will be easier. Market players should look out for the exit of the signal line of the Marlin oscillator, which is marked on the daily (D1) chart with a gray rectangle. On the four-hour (H4) chart, Friday's growth was stopped by the resistance of the balance and MACD lines. The signal line of the oscillator is also turning down, and although there was a similar pattern of simultaneous reversal of the price and the oscillator from last Thursday, the signal this time may turn out to be more significant.   Relevance up to 03:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335509
UK Gfk Consumer Confidence index got better fourth month in a row

The British Pound May Continue Its Sideways Movement

InstaForex Analysis InstaForex Analysis 20.02.2023 08:05
Despite the attempts to hit the target support level of 1.1900, GBP/USD closed with a white candle at 52 pips on Friday. Then, this Monday morning, the Marlin oscillator is attempting a reversal, which is a sign of a possible retest of 1.1900. The successful breakdown of this level will certainly open the way to the level of 1.1737. The pair is above the MACD line on the four-hour (H4) chart. If the oscillator Marlin does not show any intention to turn down, pound may continue its sideways movement. The breakdown of 1.1989, which is the February 15 low, will signal that the pair will once again try to reach the target level of 1.1900. If that happens, the MACD line may also be overcome.   Relevance up to 03:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335507
ECB cheat sheet: Difficult to pull away from the Fed

The EUR/USD Prices Might Continue Dragging Lower

Oscar Ton Oscar Ton 20.02.2023 08:07
Technical outlook: EURUSD dropped close to 1.0600 on Friday before bouncing back sharply. The single currency pair is seen to be trading near 1.0690 at this point in writing and is looking poised to break above the 1.0720 initial resistance in the near term. The pullback has the potential to rally up to 1.0800 and 1.0900 levels in the next few trading sessions. EURUSD is working on a corrective drop towards 1.0500 and potentially 1.0100 after having carved a meaningful top at 1.1025 earlier. Within the correction, it looks like the first wave might have been complete at the 1.0600 lows last week. If the above-proposed structure is correct, the euro could rally towards 1.0850-900 levels before reversing lower. On the flip side, prices might continue dragging lower from here and target below 1.0500 to take out initial support. We can expect a pullback rally thereafter as the second wave unfolds towards 1.0800. The bears will be inclined to drag lower towards 1.0100 as the final leg begins to unfold. Also, note that 1.0100 is the Fibonacci 0.618 retracement of the entire rally between 0.9535 and 1.1025 respectively. Trading idea: Potential bearish continuation against 1.1025 Good luck!   Relevance up to 06:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313267
Federal Reserve preview: A final hike as US recession fears mount

The US Dollar Index Is Facing Immediate Resistance At 105.35

Oscar Ton Oscar Ton 20.02.2023 08:09
Technical outlook: The US dollar index rallied through the 104.33 high on Friday before turning sharply lower. The index is seen to be trading close to 103.60 at this point in writing as the bears are looking poised to remain in control. Potential remains for prices to drop towards 102.00 in the near term, before turning higher through 106.50 going forward. The US dollar index is working on a larger-degree corrective rally from the 100.50 low which was printed on February 02, 2023. The rally between 100.50 and 104.33 could be the first wave within the correction, which has the potential to push through 106.50 and 109.50 respectively. If the above structure holds well, prices could decline towards 102.00 as the second wave unfolds. As projected on the 4H chart here, the US dollar index is facing immediate resistance at 105.35 while support is seen around 102.00 respectively. A push above 105.35 will be constructive for the bulls and further open the door towards 109.50. Besides, note that 109.00-50 is passing close to the Fibonacci 0.618 retracement of the entire drop between 114.70 and 100.50. Trading idea: Potential bullish rally against 100.50 Good luck!   Relevance up to 06:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313269
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

The Preferred Scenario Of The EUR/USD Pair Movement

Torben Melsted Torben Melsted 20.02.2023 08:12
We continue to look for a deeper correction in wave 4 after the break below support at 1.0655. Ideally, we will see wave C of 4 continue lower to the 1.0498 target to complete wave 4 and set the stage for wave 5 moving towards new highs for the entire rally from 0.9536. In the short term, only a break above minor resistance at 1.0723 will question our preferred scenario and call for more upside towards 1.0834.   Relevance up to 07:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313283
InstaForex's Ralph Shedler talks Euro against Japanese yen

The Outlook Of The USD/JPY Pair Movement

Torben Melsted Torben Melsted 20.02.2023 08:15
It has been a while since we last looked at USD/JPY as we have been waiting for wave B to develop into a five-wave rally, which now is the case with the test of 135.12 With the five-wave rally now in place and at the same time testing solid resistance at 134.65, we should not expect wave B to move higher and instead set the stage for the next decline in wave C towards at least 121.40 and more likely the equality target between wave A and C at 112.93 before the next impulsive rally should be expected. In the short term, a break below 133.31 will be a strong indication that wave B has been completed and wave C lower is in progress. A break below support at 131.50 will confirm that wave B has been completed and wave C is unfolding   Relevance up to 07:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313287
Analysis Of Situation Of The USD/INR Pair

The USD/INR Pair Is Likely To Decline Further

TeleTrade Comments TeleTrade Comments 20.02.2023 08:25
USD/INR renews intraday low, after four-week uptrend, on technical breakdown. Downbeat oscillators add strength to the fall targeting 100-SMA, 200-SMA. Weekly descending trend line adds to the upside filters. USD/INR takes offers to refresh intraday low near 82.65 during the initial Indian trading session on Monday. In doing so, the Indian Rupee (INR) pair justifies the early day’s downside break of a one-month-old ascending trend line to print the first daily loss after witnessing four consecutive weeks of a run-up. Not only the trend line breakdown but the bearish MACD signals and the downbeat RSI (14), not oversold, also signals the INR pair’s further downside towards the 100-SMA, close to 82.40 by the press time. However, the 200-SMA level surrounding the 82.00 round figure could challenge the USD/INR bears afterward. In a case where the USD/INR pair remains bearish past the 82.00 threshold, the late January’s swing high near 81.80 could act as the last defense of the pair buyers. On the flip side, recovery moves need to cross the previous support line from January 23, close to 82.75, to recall the USD/INR buyers. Even so, a one-week-old descending trend line could challenge the recovery moves near the 82.85 hurdle. Should the USD/INR bulls remain dominant past 82.85, an upward-sloping resistance line from February 07, close to 83.15 at the latest, may lure the pair buyers. Overall, USD/INR is likely to decline further but the downside room appears limited. USD/INR: Four-hour chart Trend: Further downside expected
The USD/MXN Pair Could Then Aim To Surpass The February Monthly Swing High

Analysis Of The USD/MXN Pair: USD/MXN Remains Pressured

TeleTrade Comments TeleTrade Comments 20.02.2023 08:28
USD/MXN takes offers to refresh intraday low, mildly offered near the lowest levels since April 2018. US Dollar retreat adds strength to the bearish bias amid sluggish session. Risk-off mood, downbeat Oil prices put a floor under the Mexican Peso price. FOMC Meeting Minutes, Mexican Q4 GDP eyed for fresh impulse. USD/MXN remains pressured around the lowest level in nearly five years as it drops to $18.33 during early Monday, keeping Friday’s fall to the multi-day bottom during a three-day downtrend. In doing so, the Mexican Peso (MXN) pair cheers the retreat in the US Dollar amid a light calendar and the US holidays. Adding strength to the lackluster moves could be the cautious mood ahead of this week’s top-tier data from the US and Mexico, as well as mixed headlines surrounding the geopolitical risks emanating from Russia, China and North Korea. Market sentiment dwindles as the Federal Reserve (Fed) hawks take a breather ahead of Wednesday’s Federal Open Market Committee (FOMC) Meeting Minutes. Also, Japan’s calling of the United Nations (UN) Security Council meeting to address the threats issued by North Korea joins the recent tension between the US and China over Taiwan seems to weigh on the risk profile and put a floor under the US Dollar. On the other hand, an absence of US and Canadian traders allows the bond bears to take a breather and hence trigger the USD/MXN weakness. It’s worth noting that Banxico’s surprise 0.50% rate hike propelled the USD/MXN moves earlier in February. However, the USD/MXN traders will look for this week’s fourth quarter (Q4) Mexican Gross Domestic Product (GDP) data, up for publishing on Friday, for clear directions. Should the Mexican economy marks welcome growth figures, the odds of witnessing the pair’s slump towards $18.00 can’t be ruled out. Also important to note is that the Mexican economy relies on Oil exports and the hopes of higher economic recovery in China keep energy buyers hopeful, which in turn weighs on the USD/MXN prices. Elsewhere, better-than-forecast prints of the US Consumer Price Index (CPI) and Retail Sales followed the previously flashed upbeat readings of employment and output data and propelled the US Treasury bond yields, as well as the US Dollar. On the same line could be the hawkish Federal Reserve (Fed) comments and the risk-negative catalysts mentioned above. However, the Fed’s pivot discussions aren’t off the table, which in turn highlights Wednesday’s Fed Minutes for clear directions. Technical analysis Unless providing a daily close beyond a 6.5-month-old descending resistance line, around $18.45 by the press time, USD/MXN buyers remain off the table
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The USD/CAD Pair Remains On The Bull’s Radar

TeleTrade Comments TeleTrade Comments 20.02.2023 08:33
USD/CAD remains pressured after retreating from six-week high. Upbeat oscillators, sustained trading beyond 50-DMA keep buyers hopeful. Convergence of 100-DMA, four-month-old descending resistance line challenge buyers. USD/CAD bulls take a breather around 1.3480, following the run-up to refresh the monthly high, as the upside momentum failed to cross the key resistance confluence the previous day. Even so, the Loonie pair remains on the buyer’s radar on early Monday as it defends the previous week’s upside break of the 50-DMA, close to 1.3465 at the latest. It’s worth mentioning that the 50-DMA breakout joins the bullish MACD signals, as well as the upbeat RSI (14), not overbought, to keep the USD/CAD buyers hopeful. That said, a one-week-old ascending support line, near 1.3440 by the press time, adds to the short-term downside filters for the USD/CAD pair traders to watch on the break of the 50-DMA. Following that, a three-month-old ascending support line, around 1.3280 as we write, becomes crucial to follow as it holds the key to the Loonie pair’s slump towards the 1.3000 psychological magnet. Meanwhile, an upside clearance of the 1.3520 resistance confluence enables the USD/CAD buyers to aim for the previous monthly high of 1.3685. In case where the quote remains firmer past 1.3685, the last December’s peak of 1.3705 may act as an extra check for the USD/CAD bulls before directing them to the October 2022 high surrounding 1.3980, as well as the 1.4000 round figure. To sum up, USD/CAD remains on the bull’s radar unless breaking 1.3440 support. USD/CAD: Daily chart Trend: Further upside expected
Australian dollar against US dollar - "It seems that the currency will soon hit a price above 0.68"

The Continuation Of Expansionary Monetary Policy By The People’s Bank Of China Will Strengthen The Australian Dollar

TeleTrade Comments TeleTrade Comments 20.02.2023 08:36
AUD/USD has touched a high of 0.6900 as the USD Index has surrendered its morning gains. Persistent inflation in the United States has bolstered the odds of more interest rate hikes by the Federal Reserve ahead. The minutes from the Reserve Bank of Australia might remain hawkish for further guidance as inflation has still not peaked yet. AUD/USD has negated the downside break of the H&S pattern and has shifted into a bullish trajectory. AUD/USD touched the round-level resistance of 0.6900 in the early European session. The Aussie asset has been strengthened as investors have shrugged-off uncertainty associated with US-China tensions and the launch of three projectiles from North Korea near Japan’s Exclusive Economic Zone (EEZ). The US Dollar Index (DXY) has surrendered its entire gains added in the Asian session and is looking to continue its downside journey ahead. Meanwhile, the risk appetite theme has regained traction, which is supporting the risk-perceived assets. S&P500 futures have turned volatile ahead of the market holiday on account of Presidents’ Day. People’s Bank of China maintains the status quo on interest rates The Australian Dollar remained in action after the People’s Bank of China (PBoC) kept its monetary policy unchanged. An interest rate decision of unchanged policy was widely anticipated as the Chinese economy is focusing on accelerating the economic recovery after remaining bound by pandemic controls. The People’s Bank of China has kept one-year and five-year Loan Prime Rates (LPR) unchanged at 3.65% and 4.30% respectively. It is worth noting that Australia is a leading trading partner of China and the continuation of expansionary monetary policy by the People’s Bank of China will strengthen the Australian Dollar ahead. Fresh concerns for higher US Inflation call for more rates by the Fed Last week, a majority of economic indicators cleared that it would be early for the Federal Reserve to announce a win in the battle against stubborn inflation as it is set to surprise the market ahead. The United States Consumer Price Index (CPI) landed higher at 6.4% than the projections of 6.2%, Producer Price Index (PPI) released at 6.0% higher than the consensus of 5.4%. And, the release of the monthly Retail Sales data at 3.0% against the consensus of 1.8% was the last nail in the coffin, which cleared that consumer spending is gaining traction. A note from Goldman Sachs states the investment banking firm expects the U.S. Federal Reserve to raise interest rates three more times this year, lifting their estimates after data pointed to persistent inflation and a resilient labor market, as reported by Reuters. Spotlight shifts to Reserve Bank of Australia and Federal Reserve’s minutes This week, the release of the minutes from the Reserve Bank of Australia and Federal Reserve’s and Federal Reserve will lead from the front for the power-pack action in the Aussie asset. Federal Reserve policymakers are aware of the persistent nature of the US inflation, which is why hawkish guidance is expected on interest rates. The minutes from the Reserve Bank of Australia policy announced in the first week of February resulted in a ninth consecutive interest rate hike to 3.35%. Inflationary pressures in the Australian economy have not softened yet amid solid consumer spending, which is bolstering the case of hawkish guidance on the monetary policy. Later this week, Australia’s Labor Cost Index (Q4) data will remain in focus. The economic data is seen at 3.4% vs. the prior release of 3.1% on an annual basis. And, the quarterly data is seen lower at 0.7% against the prior release of 1.0%. AUD/USD technical outlook AUD/USD has negated the downside break of the Head and Shoulder chart pattern formed on a four-hour scale. The responsive buying active from the market participants has pushed the Aussie asset above the neckline of the aforementioned chart pattern plotted from January 10 low at 0.6860. The asset has scaled above the 20-period Exponential Moving Average (EMA) at 0.6888, which indicates that the short-term trend is bullish now. The Relative Strength Index (RSI) (14) has rebounded into the 40.00-60.00 range, which indicates that the asset is no more bearish now
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The Kiwi Pair (NZD/USD) Portrays The Traders’ Cautious Mood Ahead Of The Key Reserve Bank Of New Zealand (RBNZ) Meeting

TeleTrade Comments TeleTrade Comments 20.02.2023 08:40
NZD/USD struggles to extend the corrective bounce off six-week low. Sluggish sentiment, mixed headlines and US holiday challenge Kiwi pair buyers. RBNZ Shadow Board expects 0.50% rate hike but NZ FinMin cites inflation as the key catalysts. Fed hawks need confirmation from FOMC Minutes, second-tier data. NZD/USD seesaws around 0.6240 as it struggles to push back the bearish bias after a four-day losing streak, keeping the bounce off a six-week low during early Monday morning in Europe. In doing so, the Kiwi pair portrays the traders’ cautious mood ahead of the key Reserve Bank of New Zealand (RBNZ) monetary policy meeting and the Minutes of the latest Federal Open Market Committee (FOMC) Monetary Policy Meeting. Earlier in Asia, the RBNZ's Shadow Board recommended 50 basis points (bps) of an increase in the benchmark cash rate by citing strong inflationary pressures. On the same line could be the latest comments from New Zealand (NZ) Deputy Prime Minister and Finance Minister (FinMin) Grant Robertson who said that the RBNZ has a responsibility to address inflation while also adding, “RBNZ needs to look through current events.” It’s worth noting that the flood in New Zealand joins recent downside economic indicators for the Pacific nation to probe the RBNZ hawks. Also challenging the NZD/USD bulls are the geopolitical fears emanating from the US-China tussles, recently about the Taiwan trade deal with Washington and Beijing’s ties with Russia. On a different page, upbeat US data and mixed comments from the Federal Reserve (Fed) officials seemed to have triggered the NZD/USD pair’s corrective bounce off the multi-day low. Also allowing the Kiwi pair traders to push back the bears is the US holiday. Looking forward, natural calamities and the recent weakness in Auckland’s data may probe the RBNZ hawks. However, this week’s 0.50% rate hike is almost given and may not impress the NZD/USD bulls unless offering hints for further strong rate increases. Following the RBNZ meeting, the Fed Minutes will also be crucial for clear directions as the US central bank officials have recently praised the upbeat data surrounding inflation, Retail Sales and jobs. Technical analysis Sustained downside break of the 200-day Exponential Moving Average (EMA), around 0.6275 by the press time, keeps NZD/USD bears hopeful of breaking the three-month-old support line, close to 0.6220 at the latest.
If The Bank Of England Hike Interest Rates Again Later This Month Will Exert Downward Pressure On The EUR/GBP Cross

The EUR/GBP Pair Is Expected Limited Downside Movement

TeleTrade Comments TeleTrade Comments 20.02.2023 08:46
EUR/GBP fades bounce off immediate horizontal support, 200-HMA. Sluggish oscillators suggest limited downside room but bulls need validation from 0.8930. Monthly low lures bears past 200-HMA buyers have a bumpy road to the north to track. EUR/GBP holds lower ground near 0.8880 during the early Monday morning in Europe. In doing so, the cross-currency pair fades bounce off the 200-HMA and eight-day-old horizontal support. Also teasing the pair sellers is the lower high formation, marked since February 07. However, the aforementioned support line, close to 0.8875 at the latest, precedes the 200-Hour Moving Average (HMA) level surrounding 0.8865, to put a floor under the EUR/GBP prices. In a case where the EUR/GBP pair drops below 0.8865, the odds of witnessing a slump toward the monthly low near the 0.8800 round figure can’t be ruled out. It’s worth noting, though, that January’s low near 0.8720 could challenge the pair sellers afterward. Meanwhile, the 50% and 61.8% Fibonacci retracement levels of the EUR/GBP pair’s fall between February 03 and 14, near 0.8890 and 0.8910 in that order, could challenge the short-term upside of the pair. Following that, a downward-sloping resistance line from February 07, close to 0.8930 by the press time, will be the key as a clear break of the same towards the north might endanger the monthly peak of 0.8978. Overall, EUR/GBP is likely to grind lower amid mixed catalysts and sluggish prints of the MACD and RSI. Though, the downside room appears limited. EUR/GBP: Hourly chart Trend: Limited downside expected
US dollar pressured by Euro and Swiss franc. EUR and CHF supported by data and a rate hike

The USD/CHF Pair Remains On The Bull’s Radar

TeleTrade Comments TeleTrade Comments 20.02.2023 08:50
USD/CHF holds lower ground after reversing from five-week high. Sluggish markets, off in US, Canada restrict immediate moves. Risk-negative headlines, hawkish Fed challenges the bearish bias. USD/CHF flirts with the intraday low surrounding 0.9240 amid early Monday in Europe. In doing so, the major currency pair remains pressured toward the previous resistance line from late November 2022. However, a light calendar and holiday in the US, as well as in Canada, restrict immediate moves of the Swiss Franc (CHF) pair. Better-than-forecast prints of the US Consumer Price Index (CPI) and Retail Sales followed the previously flashed upbeat readings of employment and output data and propelled the US Treasury bond yields, as well as the US Dollar. On the same line could be the hawkish Federal Reserve (Fed) comments and the risk-negative catalysts surrounding China, North Korea and Russia. However, Friday’s mixed comments from the Fed officials seemed to have probed the US Dollar bulls and triggered the USD/CHF pair’s U-turn from the multi-day high. That said, Fed Governor Michelle Bowman recently said, “We are seeing a lot of inconsistent data in economic conditions,” as reported by Reuters. On the contrary, Richmond Fed President Thomas Barkin said that they are seeing some progress on inflation with demand normalizing, as reported by Reuters. Elsewhere, North Korea fired two ballistic missiles toward Japan and renewed the fears that the hermit kingdom is up to something serious that can endanger the global economy, mainly due to the nature of the missiles fired as they both were termed as tactical nuclear attack weapons. However, both the missiles were down ahead of Japanese boundaries and allowed traders to take a sigh of relief even as Japan PM Fumio Kishida calls for the United Nations Security Council meeting to discuss the issues. On the same line, the latest meeting between US Secretary of State Antony Blinken and China's top diplomat Wang Yi seemed to have failed in restoring the US-China ties. The reason could be linked to a Chinese diplomat’s comments saying that the US must change course and repair the damage done to Sino-US ties by indiscriminate use of force. On the same line, US ambassador to the United Nations, Ambassador Linda Thomas-Greenfield, said Sunday that China would cross a “red line” if the country decided to provide lethal military aid to Russia for its invasion of Ukraine. Against this backdrop, the S&P 500 Futures print mild losses even as Wall Street closed mixed. It’s worth noting that the US 10-year Treasury bond yields rose to the highest levels since early November in the last week and helped the US Dollar Index (DXY) to print a three-week uptrend, before retreating to 103.90 as of late. Moving ahead, light calendar and holidays in the key markets may offer a sluggish trading session ahead of Wednesday’s key Minutes of the latest Federal Open Market Committee (FOMC) Monetary Policy Meeting. Following that, the second reading of the US fourth quarter (Q4) Gross Domestic Product (GDP) will be important to forecast the USD/CHF moves. Technical analysis USD/CHF remains on the bull’s radar unless breaking below the three-month-old descending resistance line, now support line near 0.9230 at the latest.
EUR/USD Pair Has A Potential For Short-Term Rally

Today, Bundesbank Report And The Eurozone Consumer Confidence Indicator May Have A Impact On The EUR/USD Pair

Jakub Novak Jakub Novak 20.02.2023 09:03
Analysis of transactions and tips for trading EUR/USD The test of 1.0656 occurred when the MACD line was already far from zero, so the upside potential was limited. Sometime later, there was another test, but this time it was at 1.0630 and the market signal was to sell. But since the MACD was also far from zero, the price decrease was not very strong. Although euro fell on Friday after Germany reported a decline in its producer price index, buyers were able to offset the fall due to the closing of many positions at the end of the week. Speeches of FOMC members Michelle Bowman and Thomas Barkin also did nothing to help dollar in the afternoon. Today, apart from the Bundesbank report and the eurozone consumer confidence indicator, there is nothing that will have a significant impact on the market. Thus, it is likely that EUR/USD will rise. In the afternoon, there are no statistics at all, so expect a decrease in volatility and trading volume, which will lock the pair in a horizontal channel. For long positions: Buy euro when the quote reaches 1.0703 (green line on the chart) and take profit at the price of 1.0729. Growth will occur if economic data for the eurozone exceeds expectations. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0679, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0703 and 1.0729. For short positions: Sell euro when the quote reaches 1.0679 (red line on the chart) and take profit at the price of 1.0640. Pressure may return at any moment, especially considering the current trend. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0703, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0679 and 1.0640. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335535
The GBP/USD Pair Is Expected The Consolidation To Continue

The Best Bet Is On A Further Correction Of The GBP/USD Pair Upwards

Jakub Novak Jakub Novak 20.02.2023 09:07
Analysis of transactions and tips for trading GBP/USD The test of 1.1930 occurred when the MACD line was just starting to move below zero, which was a pretty good signal to sell. However, the decline was only 15 pips, after which the pair returned above 1.1930. Sales around 1.2022 in the afternoon resulted in a price decrease of over 20 pips. The UK retail sales report led to a slight drop in GBP/USD on Friday, bringing it to a new monthly low. However, sellers did not stay there for long. Today, the only data that is coming out for the UK is the Rightmove housing price index report, so market players should not expect much volatility. This means that the best bet is on a further correction of the pair upwards. There are also no statistics scheduled to be released in the afternoon, so expect lower trading volume, which will lock the pair in a horizontal channel. For long positions: Buy pound when the quote reaches 1.2054 (green line on the chart) and take profit at the price of 1.2093 (thicker green line on the chart). Growth will be possible as there are no statistics scheduled to be released today. However, when buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can be bought at 1.2027, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2054 and 1.2093. For short positions: Sell pound when the quote reaches 1.2027 (red line on the chart) and take profit at the price of 1.1966. Pressure will return if economic data in the UK are weaker than expected. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2054, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2027 and 1.1966. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader   Relevance up to 07:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335537
US-China Tensions Continue To Ramp Up, Dollar Off Its Highs

US-China Tensions Continue To Ramp Up, Dollar Off Its Highs

Saxo Bank Saxo Bank 20.02.2023 09:14
Summary:  Data was light on Friday and US equity indices ended mixed after markets catching up with the Fed’s December dot plot over the week. Fed speakers Barkin and Bowman were however somewhat less hawkish than Bullard and Mester earlier in the week. Dollar off its highs as US yields retreated lower amid short covering, helping metals regain some footing. US markets remain closed today, and key focus this week on geopolitics as US-China tensions continue to ramp up and one-year anniversary of Russia’s invasion of Ukraine approaches.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) mixed, European indices outperformed in the week The S&P500 was down for the second consecutive week as hot inflation data and steady retail sales supported the case for more rate hikes from the Fed, shifting the market expectations for the Fed path higher. The S&P500 was down 0.3% on Friday, with NASDAQ100 down 0.7%, even though the Dow Jones index recovered later to close 0.4% higher. NASDAQ however closed the week higher, with Tesla notching up gains of ~6% in the week. European indices outperformed in the week, led by France’s CAC 40 (FRA40.I) which was up over 3% and EuroStoxx 50 (STOXX50.I) was up 1.8%. Importantly, US markets are shut on Monday for Presidents Day, however yields remain a key focus this week after the US 2-year yield rose to 4.7%+ levels on Friday and 10-year is getting close to the 4% mark again. Key stock movers On Friday, US farm equipment maker Deere (DE:xnys) led market gains being up 7.5%, Moderna Inc (MRNA:xnas) fell 3.3% after its experimental messenger RNA-based influenza vaccine delivered mixed results in a study. Lithium miners Livent Corp (LTHM:xnys), Albemarle Corp (ALB:xnys) and Piedmont Lithium (PLL:xnas) slumped between 9% and 12% due to concerns about weakness in Chinese prices for the EV battery metal. Agricultural spending bellwether - Deere - drives up, putting the spotlight on the tangible world outperforming and food security Deere was the star performer in the S&P500 on Friday, rising 7.5% after raising its forecasts for the year, and reporting better than expected Q4 results. It reported $6.55 earnings per share from sales of $12.7 billion, beating estimates (of $5.56 per share on sales of $11.28 billion). The bottom line is demand from farmers is strong, and producers are prepared to buy more equipment and upgrade their fleets. Its production and precision ag division which includes autonomous crop planting and harvesting – saw the most sales growth – with quarterly sales up 55% in the quarter, from a year prior. The company has not only evolved from selling ag equipment to automation equipment and farm management systems, which helps farmers optimize their operations using crop data analytics. For the year ahead, Deere sees net income rising to $8.75 billion to $9.25 billion, which is higher than its prior estimate ($8 billion to $8.5 billion). This reinforces Saxo’s bullish view of investments in the physical world outperforming the intangibles. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) suffered a third consecutive week of losses amid regulatory concerns Hong Kong's stocks suffered a third consecutive week of losses, with the Hang Seng Index dropping by 1.3%, weighed down by China's tech and internet shares. The Hang Seng Tech Index fell by 2.5%, and turnover was the lowest in 2023 at HK$89.7 billion. Fears of regulatory crackdowns in China were fueled by the disappearance of high-profile investment banker Bao Fan and speculation that Wu Qing, who was known in the securities industry for iron-fisted handling of market irregularity cases, would be the new chief of the China Securities Regulatory Commission. Fan’s majority-owned China Renaissance took a 28.2% hit while internet giants Alibaba (09988:xhkg), Tencent (00700:xhkg), and Meituan (03690:xhkg), registered loses over 2%. Baidu (09888:xhkg) fell 4.6% as ChatGPT concept stocks retraced in both the Hong Kong bourse and mainland exchanges. Lenovo (00992) slid 3.1% following reporting net income, revenue declines, and job cuts. Hong Kong jewellers with large exposure to Chinese tourists declined 2-4%, while Chinese traditional medicines and childcare products gained. The A-share market in China also closed lower, with CSI300 Index down by 1.4%. Computing, electronics, communication, ChatGPT concept, and electric equipment stocks led the charge lower. Digital China (000034:xsec) and Montnets Rongxin Technology (002123:xsec) plunged over 8%. Meanwhile, Chinese traditional medicine names and COVID-19 drug pharmaceutical stocks bucked the decline. Shangdong Xinhua Pharmaceutical (000756:xsec) went limit up by 10% and its H-shares (00719:xhkg) traded in Hong Kong surged 26.4% following positive comments on a generic drug manufactured by the company. FX: Dollar off its highs, NZD in focus as RBNZ meets this week After a run higher this week with the hawkish tilt in Fed expectations, the US dollar was off its highs on Friday with US 10-year yields turning lower after getting close to the key 4% mark. This helped USDJPY retreat from 2-month highs of 135 but Japan’s CPI due this week along with BOJ governor nominee Ueda’s parliamentary hearings will likely keep the yen volatile. NZD was one of the underperformers last week on slowing 2yr NZ inflation expectations, and remains in focus this week as RBNZ is likely to downshift to a 50bps rate hike with some even considering a 25bps hike amid risks from the recent cyclone. GBPUSD touched lows of 1.1915 but was back above 1.2000 handle on Friday. ECB commentary remains mixed (read below) and EURUSD still close to 1.07. Crude oil (CLH3 & LCOJ3) end last week lower on Fed worries Crude oil prices tumbled over 2% last week amid a hawkish tilt returning in the US data and Fed commentaries, which brought up the prospects of more rate hikes in the current cycle. Moreover, data confirming a pickup in real economic activity in China has been meagre so far, and near-term oversupply fears have pushed WTI prices lower to touch $75/barrel on Friday, while Brent took a look below $82. OPEC and IEA however raised the medium-term demand outlook, but this week’s focus will also be on geopolitics (read below) with US-China tensions ramping up and the one-year anniversary of Russia’s invasion of Ukraine. Copper focusing on supply-side issues Despite the hawkish tilt in Fed expectations, copper ended the week only down 0.4% as the key $4 area continued to provide support. Supply issues also remained in focus. Freeport-McMoRan Inc suspended operations at its Grasberg copper mine in Indonesia due to landslides. This is on the heels of disruptions to output in Peru amid social unrest. Zambia also reported that its copper output fell to a seven-year low in 2022. US yield and dollar trends this week will be key for metals and commodities in general. Gold (XAUUSD) approaching key supports Gold fell to a six-week low last week amid hawkish comments from Fed officials after the CPI report last week and Fed commentaries shifting market expectations for the Fed path higher. Gold took a look below the key support at $1828 on Friday but a subsequent recovery to 1840 was seen as dollar was off its highs. Next key support at $1800 level remains a key focus, followed by the 200DMA at 1776.   What to consider? Fed speakers note inflation and jobs data surprises Fed member Bowman (voter) said she wants to see a consistent decline in inflation and she thought the moderation of inflation before the prior meeting meant we could be seeing the beginning of disinflation, but notes the most recent data however has been surprising. Barkin (non-voter) also said that he does feel the US is making slow progress on inflation. Both also emphasized labor shortages, with Barkin stating clearly that he prefers the 25bps rate hike path. ECB’s mixed messages ECB speakers had mixed messages on Friday with the hawkish Isabel Schnabel saying that investors risk underestimating the persistence of inflation. That bolstered rate-hike bets, with money markets pricing a 3.75% peak in the deposit rate. However, later dovish member Francois Villeroy said that rate are now in restrictive territory and that they may raise above 3% but it’s not automatic. Rainy season in Brazil-putting iron ore supply in question Rainfall at Brazil's largest iron ore mines increased in the second week of February, but remained below historical levels since the start of the year. Despite a dry start to 2023, iron ore supply risks are high ahead of seasonal rainy season peaking in month end. Brazilian Iron ore shipments are down this year, while Australian iron ore shipments are up YTD. We need to see Chinese property stimulus pick up to propel further demand in iron ore which could also act as a catalyst for the next move up in iron ore prices. Vale is the biggest iron ore producer in Brazil. Australia’s largest iron ore producers are BHP and Rio Tinto, who report results over the next two days.  Luxury stocks are the key contributors to the French CAC 40 index’s 2023 performance The French CAC 40 index is recording a strong YTD performance with an increase of +14 %. This is quite astonishing. This is partially explained by the weight of luxury stocks in the index. Kering, L’Oréal, LVMH and Hermès represent about a third of the jump. Other major contributors are Schneider Electric (which directly benefits from China’s economic reopening), BNP Paribas, Vinci (a construction company and operator of toll roads), STMicroelectronics (semiconductors) and Air Liquide (which can be considered as a market maker in his business segment). The French index is now valued at less than 13 times the estimated profits. This is below its 10-year average of 14. This could imply the market can go much higher in the short- and medium-term. The French stock market is the largest one in Europe followed by the UK’s. China’s loan prime rate fixing due today China's loan prime rates will likely stay steady at the fixing today, considering the People's Bank of China's decision to keep its medium-term lending facility rate unchanged earlier this month. The one-year and five-year LPR rates are likely to remain unchanged at 3.65% and 4.3%, respectively. Still, the uncertainty around the rate path is increasing given the increasing focus in China to drive up consumption and growth, and rate cuts remain likely in H1. Geopolitics keeps Saxo’s Defense basket in focus In Saxo’s equity theme baskets, the Defense basket was one of the top performers last week despite the news of China sanctions on US defense companies like Lockheed Martin and Raytheon due to balloon shooting incident. Geopolitical tensions, and therefore the Defense stocks, will remain in focus again this week as we approach the one-year anniversary of Russian invasion of Ukraine on 24 February. Biden will be visiting NATO ally Poland to talk about the importance of the international community’s resolve, and unity in supporting Ukraine, adding that the next weeks and months are going to be difficult for Ukraine’s forces, and the US is going to continue to stand by them. Meanwhile, China’s top diplomat Wang Yi kicked off his week-long tour through Europe in Paris on Wednesday. The diplomat is expected to travel to Italy, Germany, and Hungary – with a final stop in Russia. There were also some reports suggesting that the US has information that China may be considering supplying arms to Russia. Putin will also be giving a state of the nation address, and focus will be on any risks of further escalation noting that 500k Russian troops have been mobilised.   For a global look at markets – tune into our Podcast.   Source: Markets Today: US yields at critical levels – 20 February 2023 | Saxo Group (home.saxo)
RBA Governor Announces Major Changes at RBA Board as US Inflation Expected to Decline

Meta Is Announcing A New Monthly Subscription Model, Deere Was The Star Performer In The S&P500

Saxo Bank Saxo Bank 20.02.2023 09:33
Summary:  US equity markets bounced on Friday after teasing new lows, maintaining the sense of indecision after more than two weeks of choppy, directionless trading. Treasury yields and the US dollar rolled over sharply on Friday after posting new highs for the cycle and stern US warnings to China against providing military aid to Russia have upped the geopolitical risks by an order of magnitude as markets will nervously await China’s response in coming days and weeks. What is our trading focus? US equities (US500.I and USNAS100.I): gains for February have evaporated Friday’s session was weak ending with the lowest close print for February as the market reacted to higher interest rates and data suggesting inflation pressures remain high. Last week, was still a strong week for bubble stock despite the rising interest rates while commodity related companies and Chinese stocks were the weakest links in the global equity market. S&P 500 futures have opened up this week below Friday’s close trading around the 4,085 level with the key 4,000 level still in play on the downside if S&P 500 futures make another lower close in today’s session. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) rallied with A-shares leading China’s A-shares rallied strongly on Monday with the benchmark CSI300 rising 2.3%. Although the 1-year and 5-year loan prime rates remained unchanged at the monthly fixing this morning, the average mortgage interest in the largest 100 cities fell 6bps M/M to 4.04% in February, or 143bps Y/Y for first-home mortgages and 84bps for second-home mortgages.  Construction materials, electronic appliances and telco names led the charge higher in A-shares. Hong Kong’s Hang Seng Index opened lower but spent the rest of the day climbing to 1.1% higher as of writing. China Hongqiao (01378:xhkg), a leading aluminium products manufacturer, jumped over 10%. FX: Dollar reverses lower on sentiment shift Friday, NZD in focus as RBNZ meets this week After a run higher last week on rising US treasury yields and Fed rate hike expectations, the US dollar was off its highs on Friday with US 10-year yields turning lower after trading close to the key 4% mark. This helped USDJPY retreat from 2-month highs above 135. Note Japan set to report CPI this Friday and BOJ governor nominee Ueda’s parliamentary hearings will likely keep the yen volatile. NZD was one of the underperformers last week on slowing 2yr NZ inflation expectations, and remains in focus this week as RBNZ is likely to downshift to a 50bps rate hike with some even considering a 25bps hike amid risks from the recent cyclone. GBPUSD touched lows of 1.1915 last week but was back above 1.2000 handle on Friday. ECB commentary remains mixed (read below) and EURUSD still close to 1.07. Crude oil (CLH3 & LCOJ3) remains rangebound Crude oil rebounded during Asian hours following last week’s selloff which once again confirmed the market remains rangebound, in Brent between $80 and $89, with a demand pick up in China at this stage not being strong enough to offset macroeconomic concerns that was strengthened last week following hawkish comments from US Federal Reserve members. OPEC and IEA raised the medium-term demand outlook but so far, data from China shows a meagre pickup in economic activity, and it has instead left the market focusing on US stock levels which have been rising well beyond seasonal expectations. This week’s focus will also be on geopolitics (read below) with US-China tensions ramping up and the one-year anniversary of Russia’s invasion of Ukraine. Copper focusing on supply-side issues Despite the hawkish tilt in Fed expectations, copper ended the week only down 0.4% as the key $4 area continued to provide support. Supply issues also remained in focus. Freeport-McMoRan Inc suspended operations at its Grasberg copper mine in Indonesia due to landslides. This is on the heels of disruptions to output in Peru amid social unrest and Panama. Zambia also reported that its copper output fell to a seven-year low in 2022. Some support also coming through via rising aluminum prices after smelters in China’s Yunnan province cut capacity due to energy shortages following a period of weak hydro generation. Gold (XAUUSD) focus on dollar and interest rate trajectory Gold traded steady in Asia near short-term resistance at $1845, after managing to find a bid on Friday following weak of rising dollar and yields-led selling. An uptick in geopolitical tensions potentially adding a small bid into a market that otherwise seems preoccupied with the scope for further interest-rate hikes from the Federal Reserve. Investor sentiment has once again been challenged with bullion-backed ETF holdings falling to a fresh three-year low on Friday while open interest in COMEX gold futures has fallen by 16% during the past month as traders cut their exposure, both long and short. Further dollar-led weakness could see gold target support in the $1792 to $1776 area with resistance at $1872. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) reverse lower Friday ahead of long weekend After US Treasury yields all along the yield curve posted local highs for the cycle, a late wave of buying reversed the slide and yields closed lower for the session, with the 2-year closing at 4.62% after hitting 4.71% intraday and the 10-year retreating to close at 3.81% after hitting 3.92% earlier in the session. Today, US treasury markets are closed for a holiday. Heavy treasury supply is incoming this week with 2-year, 5-year and 7-year auctions Tuesday through Thursday. The US data highlight this week is Friday’s January PCE inflation data. What is going on? US Secretary of State Blinken warns China on lethal aid to Russia At the sidelines of the Munich Security Conference, US Secretary of State Antony Blinken warned of “serious consequences” if China were to provide military support to Russia. Blinken suggested that the US has information that China may be considering supplying arms to Russia. China’s top diplomat Wang Yi spoke earlier in the day at the same conference on the US’ “hysterical” response to charges of Chinese spy balloons. Yi will travel to Italy, Germany, and Hungary and make a final stop in Russia. Putin will also be giving a state of the nation address, and focus will be on any risks of further escalation noting that 500k Russian troops have been mobilised. US President Biden will be visiting NATO ally Poland to talk about the importance of the international community’s resolve, and unity in supporting Ukraine, adding that the next weeks and months are going to be difficult for Ukraine’s forces, and the US is going to continue to stand by them. Saxo’s Defense equity theme baskets was one of the top performers last week despite the news of China sanctions on US defense companies like Lockheed Martin and Raytheon due to balloon shooting incident. Meta launches monthly subscriptions Snap already has it and Twitter is rolling it out, and now Meta is announcing a new monthly subscription model to create a new revenue stream that is more stable that online advertising. The monthly subscription comes with extended account verification, direct customer support, and more protection against impersonation. Apple’s major data privacy change back in late 2021 has been a major factor as well as targeting has become more difficult putting downward pressure on advertising pricing. Luxury stocks are the key contributors to the French CAC 40 index’s 2023 performance The French CAC 40 index is recording a strong YTD performance with an increase of +14 %. This is partially explained by the weight of luxury stocks in the index. Kering, L’Oréal, LVMH and Hermès represent about a third of the jump. Other major contributors are: Schneider Electric (which directly benefits from China’s economic reopening), BNP Paribas, Vinci (a construction company and operator of toll roads), STMicroelectronics (semiconductors) and Air Liquide (which can be considered as a market maker in his business segment). The French index is now valued at less than 13 times the estimated profits. This is below its 10-year average of 14. This could imply the market can go much higher in the short- and medium-term. The French stock market is the largest one in Europe followed by the UK’s. Key US stocks on the move Friday, including Lithium names On Friday, US farm equipment maker Deere (DE:xnys) led market gainers, posting a 7.5% advance. Moderna Inc (MRNA:xnas) fell 3.3% after its experimental messenger RNA-based influenza vaccine delivered mixed results in a study. Lithium miners Livent Corp (LTHM:xnys), Albemarle Corp (ALB:xnys) and Piedmont Lithium (PLL:xnas) slumped between 9% and 12% due to concerns about weakness in Chinese prices for the EV battery metal. ECB’s mixed messages ECB speakers had mixed messages on Friday with the hawkish Isabel Schnabel saying that investors risk underestimating the persistence of inflation. That bolstered rate-hike bets, with money markets pricing a 3.75% peak in the deposit rate. However, later dovish member Francois Villeroy said that rates are now in restrictive territory and that they may raise above 3% but it’s not automatic. The German 2-year Schatz yield posted a new high since 2008 at 2.95% on Friday before falling back and closing unchanged at 2.88%. Deere lifts outlook on strong outlook for agricultural spending Deere was the star performer in the S&P500 on Friday, rising 7.5% after raising its forecasts for the year - and reporting better than expected Q4 results. It reported EPS of $6.55 vs est. $5.56 and revenue of $12.7bn vs est. $11-3bn. The bottom line is demand from farmers is strong, and producers are prepared to buy more equipment and upgrade their fleets. Its production and precision agricultural division which includes autonomous crop planting and harvesting – saw the most sales growth – with quarterly sales up 55% y/y. Deere raised its net income outlook to $8.75-9.25bn compared to previously $8-8.5bn. This reinforces Saxo’s bullish view of investments in the physical world outperforming the intangibles. Sweden CPI jumps more than expected at core – SEK surges Sweden reported January CPI data this morning, with the headline slightly softer than expected at –1.1% MoM and +11.7% YoY vs. -1.0%/+11.8% expected, but the core inflation data was firmer than expected at +0.4% MoM and +8.7% YoY vs. -0.2%/+8.2% expected and 8.4% in December. SEK is surging on the anticipation that the Riksbank will have to continue firming its message on tightening policy. What are we watching next? Critical week for geopolitics as we await China’s response to US warnings on aiding Russia US Secretary of State Blinken’s warning to China on aiding Russia’s military (see above) sets up a moment of maximum danger for geopolitics depending on the nature of China’s response in coming days and weeks. Should the latter move to aid Russia’s military with lethal weaponry, it will likely accelerate the deglobalization theme and US sanctions against the country, creating significant disruption risks for global supply chains. The CFTC will start publishing delayed CoT reports this week Last Friday the CFTC once again postponed its weekly publications of the Commitments of Traders report (CoT), bringing the number of weekly reports to three that has been delayed due to the January cyber-related incident at ION Cleared Derivatives, a third-party service provider of cleared derivatives order management, order execution, trading, and trade processing. The CFTC in a statement on Friday, however said that staff intends to resume publishing the CoT report this Friday, starting with the report that was due February 3 but also that they do not expect the backlog will be cleared and “live” data resume until mid-March. BHP and Rio Tinto earnings will set the course for copper and aluminium companies  BHP and Rio Tinto report this week and, if Fortescue is something to go by with stronger than expected profits, then BHP and Rio could surprise to the upside. The focus will be on their outlooks with both BHP and Rio expected to give optimistic forecasts for the year amid Chinese demand picking up. They may also shed light inflationary pressures remaining sticky, such as wages picking up. Iron ore, and copper and coal giant BHP is expected report 2022 earnings (EBITDA) of $40.6 billion, with free cashflows of $26 billion and declare a full-year gross dividend yield of 14%. Iron ore, aluminium and copper giant Rio is expected to report earnings (EBITDA) of $27.1 billion in 2022, free cash flow of $11.2 billion and declare a full-year gross dividend yield of about 11%. Saxo’s preferred commodity exposures include aluminium, copper, and lithium. Earnings to watch Today’s earnings focus is later tonight when BHP Group reports FY23 1H results (ending 31 Jan) with analysts expecting revenue of $26.7bn down 13% y/y from the same period last year. EPS is expected at $1.37 down 28% y/y as iron ore prices have come down their recent highs. The commodity markets have been very muted in their reaction to the Chinese reopening and as such BHP Group’s outlook will be of key interest to investors. Later this week our earnings focus is one Walmart, Home Depot, and Nvidia. Monday: BHP Group, Williams Cos Tuesday: Teck Resources, Gapgemini, Engie, HSBC, Walmart, Home Depot, Medtronic, Palo Alto Networks Wednesday: Rio Tinto, Genmab, Danone, Lloyds Banking Group, Iberdrola, Nvidia, TJX, Stellantis, Baidu, eBay Thursday: EssilorLuxottica, Deutsche Telekom, Munich Re, Kuaishou Technology, Eni, Anglo American, BAE Systems Friday: BASF, Monster Beverage Economic calendar highlights for today (times GMT) US markets closed for Presidents’ Day. 0830 – Sweden Riksbank Meeting Minutes 1500 – Eurozone Feb. Preliminary Consumer Confidence 1900 – UK Bank of England’s Woods to speak 0030 – Australia RBA Meeting Minutes   Source: Financial Markets Today: Quick Take – February 20, 2023 | Saxo Group (home.saxo)
InstaForex's Irina Manzenko talks British pound amid latest events

The GBP/USD Pair Has Good Sign For The Further Downside Movement

Peter Jacimovic Peter Jacimovic 20.02.2023 10:00
Technical analysis: GBP/USD has been trading upside this morning but I found rejection fo the key resistance zone at 1.2050, which is good sign for the further downside movement. Due to the rejection of the key resistance zone and downside trend in the background, I see potential for the further drop. Downside objective is set at the price of 1.1935 Both slow and fast Stochastic oscillator are showing overbought condition and downside cross, which is good sign for the further downside movement. Key resistance zone is set at 1.2050 Relevance up to 09:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313313
USDX Will Try To Test And Break Below The 103.50 Level

FX Daily: Is the dollar rally getting tired?

ING Economics ING Economics 20.02.2023 10:57
FX markets start the week on a quiet footing, with US markets closed for Presidents Day. The US highlights this week will be the FOMC minutes (Wednesday) and January's core PCE deflator (Friday) - both providing input into the Fed's 'higher for longer' policy narrative. We will also get PMI business confidence updates and hearings for the new BoJ governor USD: Price action suggests rally could be running out of steam Dominating global FX and rate markets last week continued to be the Federal Reserve narrative of rates staying 'higher for longer'. Some slightly higher-than-expected inflation prints and hawkish commentary - putting 50bp hikes back on the table - helped drive US yields and the dollar higher. Friday's price action, however, suggested that February's hawkish re-pricing of the Fed story might have come far enough for the time being. US yields reversed from highs seen in early Europe on Friday and DXY dropped quickly from a high of 104.60. On Friday, we had said that this DXY rally could extend to 105.00 or, with outside risk, to 106.50. Yet Friday's price action suggests those levels could be out of reach. Determining whether this month's dollar bounce has any further to go will be two key inputs. The first is Wednesday's release of the FOMC minutes of the February meeting where the Fed hiked 25bp. As ING's US economist, James Knightley, discusses in the week ahead, the focus will be on how close the Fed was to hiking 50bp at that meeting. Watching Fed Chair Jerome Powell's press conference at that meeting, he came across as pretty relaxed and announced that the disinflation process had started. However, the market could be sensitive to suggestions that a 50bp hike had been a close call. On the same subject, Friday's release of the January core PCE deflator - expected at 0.4% month-on-month - will also shed light on the disinflation story. Overall our base case is that February's dollar rally is a correction - but this week will determine whether it runs out of steam or has a little further to go. In addition, this week will see much focus on the anniversary of Russia's invasion of Ukraine and a potential speech from Russian President Putin. In addition, the dollar story could on Friday be driven by USD/JPY. Here, nomination hearings take place for new Bank of Japan Governor, Kazuo Ueda. He is seen as more of a pragmatic academic than the ultra-dove of his predecessor, Haruhiko Kuroda. Any hints of a change to the BoJ's ultra-dovish monetary policy could see USD/JPY sell off again - dragging the broader dollar with it. Expect narrow-range trading in DXY today. Chris Turner EUR: PMIs in focus this week EUR/USD bounced off a low at 1.0613 on Friday - largely as US rates softened through the day. Interestingly, EUR/USD did not seem to take too much notice of comments by the European Central Bank's Isabel Schnabel that the disinflation process had not even started in the euro area. Two-year EUR swap rates jumped 8bp on the remarks, but had completely reversed by the end of the day suggesting market participants feel the hawkish story might have come far enough for the time being. This week, the eurozone focus will be on business confidence in the form of PMIs and the German Ifo. The PMI readings are seen hovering around the 50 area and the market may take more notice of the Chinese February PMI readings which come out later next week. As above, the dollar rally might have come far enough for the time being and EUR/USD found good demand ahead of 1.06. It will probably require quite a hawkish set of FOMC minutes on Wednesday for EUR/USD to break towards 1.05 - where we expect to see good demand ahead of a EUR/USD rally in the second quarter. Elsewhere, the focus will be on Sweden today and the release of the minutes of the central bank's February policy meeting. That meeting delivered a hawkish 50bp rate hike. Let's see whether the minutes shed any further light on how concerned the Riksbank has been with recent weakness in the krona.  Chris Turner Read next: Twitter And Elon Musk Faced A Growing List Of Claims| FXMAG.COM GBP: Sunak struggles to make progress Sterling enjoyed a modest recovery on Friday as the dollar softened through the day. We doubt sterling strength owes much to PM Rishi Sunak trying to make progress on revisions to the Northern Ireland protocol. Here, eurosceptics in the Conservative party, including former PM Boris Johnson, will try to thwart any progress. And Sunak will be reluctant to have to rely on opposition Labour votes to win progress in parliament. Instead, it will probably continue to be monetary policy that drives FX trends. There is little UK data this week, but we will hear from a few more Bank of England speakers. We think BoE rates will peak at 4.25% in March - not that far from market pricing of a peak at 4.35%. Expect EUR/GBP to stay range-bound and GBP/USD to be bounced around by the dollar trend. Chris Turner CEE: Back to gains As we head into the second half of the month, the calendar in the region is lighter this week, but even so, Poland remains in the spotlight. Last Friday, S&P kept its rating unchanged with a stable outlook. Today, we'll see industrial and labour market data for January. We expect industrial production to increase by 4.4% year-on-year, slightly below market expectations. Also tomorrow, Poland will release retail sales for January. Here, we expect a slightly higher number compared to surveys. On Thursday, we continue with unemployment numbers in Poland before moving to the Czech Republic on Friday, where consumer confidence for February will be released. In the FX market, we saw a wave of selling in the CEE region last week but also a boost in interest rate differentials limiting a more pronounced sell-off in our view. The global story should play out this week and with the US dollar running out of steam, the CEE region should return to gains. The main focus will be on the Hungarian forint and Polish zloty. We believe the forint should outperform and benefit from the massive rise in market rates last week. Moreover, the depreciation has eased the pair in a crowded long trade. Thus, we expect a return to 380 EUR/HUF. The zloty should still find its way out of last week's European Court of Justice ruling. We expect stabilisation around the current 4.76 EUR/PLN. However, we are likely to see more headlines following the ECJ ruling which could point to a new direction. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The UK Economy Looks Worse Than The Rest Of The G7 Countries

The UK Economy Looks Worse Than The Rest Of The G7 Countries

Marek Petkovich Marek Petkovich 20.02.2023 11:15
2023 can safely be called a year of pleasant surprises. In January, thanks to warm weather and falling gas prices, the eurozone economy cheered, allowing us to say that there will be no recession. At the beginning of February, investors were reeling from strong macrostatistics in the USA, which made markets put aside the idea of a soft or hard landing and start speculating about a new takeoff. Finally, in the middle of the last month of winter, it was Britain's turn. A faster-than-expected slowdown in inflation, a still strong labor market and a 0.5% MoM spike in retail sales increase the likelihood of a minor recession. Will GBPUSD be able to launch a counterattack? The United Kingdom is following the path of the United States. Despite the increase in unemployment from 3.5% to 3.7%, the figure remains at its lowest point in recent decades. Employment growth accelerated in October–December, and the slowdown in inflation and average wages indicates that the Bank of England is doing its job effectively. Thanks to a strong labor market, consumers feel confident and spend money, which is confirmed by the positive dynamics of retail sales. At the same time, the UK economy looks worse than the rest of the G7 countries because Brexit and the energy crisis, with its crazy household bills for electricity, are added to the general problems in the form of high inflation, the cost of living crisis, and tightening monetary policy. Not surprisingly, Britain is the only major economy that has yet to recover to pre-pandemic levels. Dynamics of economic recovery of the G7 countries However, Britain's problems have been known for a long time, the recession factor is already embedded in sterling quotes, so any positive becomes a reason for it to rebound upwards. In this regard, strong statistics on employment and retail sales, and a faster decline in consumer price growth, allowed the GBPUSD bulls to find the bottom. Read next: Twitter And Elon Musk Faced A Growing List Of Claims| FXMAG.COM They might develop a counterattack if the data on British business activity proves to be better than expected and representatives of the Bank of England choose a hawkish rhetoric in their speeches. On the other hand, politics may add to the pound's problems. London is on the verge of signing an agreement on the Northern Ireland protocol as part of Brexit, but its terms may not please the ardent supporters of a British and EU divorce in Parliament, which will negatively affect the position of Prime Minister Rishi Sunak. His shattered credibility is one of the reasons why GBPUSD fell to 1.1, according to Credit Agricole's forecast. Bank of America is not such a bloodthirsty bear. It recommends selling the pair on the rise, but believes that sterling's cyclical bottom has been passed, and 2023 will be a year of expectation. GBP/USD Technically, the GBPUSD rebound from the 1.196 pivot level and the formation of a pin bar with a long lower shadow signal a bearish counterattack. It makes sense to start short-term buying on a break of resistance at 1.205 Relevance up to 07:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335539
Saxo Bank Podcast: The Risk Of An Escalation In The US-China Confrontation, The Risk Of An Escalation In The US-China Confrontation And More

Saxo Bank Podcast: The Risk Of An Escalation In The US-China Confrontation And More

Saxo Bank Saxo Bank 20.02.2023 11:42
Summary:  Today we look at the solid bounce in risk sentiment on Friday ahead of a three-day weekend in the US (where markets are closed for Presidents Day today) as US treasury yields rolled over and took the USD lower as well, a bearish reversal for the greenback just as it was trying to break free to the upside. In commodities, we focus on copper and crude and the lack of follow-through in the China re-opening narrative. In FX, we touch on the USD reversal, the JPY this week and NZD and SEK. In stocks to watch, a discussion of Deere and its strong results on Friday as well as the busy week ahead in earnings reports, where a wide variety of companies are reporting. But drowning out everything is the risk of an escalation in the US-China confrontation after the US warned China in stark language against providing lethal aid to Russia. This after VP Harris charged Russia with crimes against humanity in its assault on Ukraine. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next: Twitter And Elon Musk Faced A Growing List Of Claims| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.     Source:Podcast: Geopolitical risks crowd out all other considerations for now | Saxo Group (home.saxo)
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

USD/JPY Pair Is Above 134.00, EUR/USD Pair Holds Below 1.07, GBP/USD Pair Managed To Rebound

Kamila Szypuła Kamila Szypuła 20.02.2023 13:22
The dollar fell on Monday but stayed close to Friday's six-week high as a recent wave of positive economic data boosted market expectations for a tightening of the Federal Reserve's monetary policy. USD/JPY The USD/JPY pair started trading at 134.32 and then rose rapidly towards 134.50. The momentum was not extended and the yen fell to 134.00. At the time of writing, USD/JPY is trading slightly above 134.00 at 134.0290. The geopolitical risk intensified over the weekend when North Korea fired ballistic missiles into eastern waters overnight after an intercontinental ballistic missile was launched on Saturday. Saturday's launch landed off Japan's west coast and prompted joint exercises between the US and South Korea as well as the US and Japan. The sister of North Korean leader Kim Jong Un said the use of the Pacific as a "training ground" would depend on the behavior of US forces and warned of the growing presence of US military assets in the region. This comes as rumors swirl of a new Russian offensive in Ukraine and ongoing US-China spy balloon issues. Markets are still awaiting guidance from the new leadership of the Bank of Japan (BoJ), but hopes for a move away from ultra-easy monetary policy may be overly optimistic. EUR/USD European Central Bank (ECB) policymaker Francois Villeroy de Galhau reiterated that inflation in the eurozone is "too fast and probably persistent", while arguing that the ECB needs to be more predictable in its communications and provide a short-term policy outlook. Later in the day the European Commission will release flash consumer confidence index for February, which is expected to slightly improve to -19.0 from -20.9 in January. Poor trading conditions, however, will likely see the pair's shares confined to a narrow channel. The EUR/USD pair started the week at 1.0686 but was falling. After the fall, the EUR/USD pair rose towards 1.07, but failed to maintain momentum and the pair is again around 1.0680. Read next: EY Will Review Darktrace Key Financial And Control Processes| FXMAG.COM GBP/USD After last week's hesitant action, GBP/USD managed to rebound around the mid-1.2000 area early Monday. The cable pair has been falling from above 1.2050 and is currently trading at 1.2025. Sterling could fall if the Bank of England raises interest rates by 25 basis points in March, but signals that this will be the last hike. Some worrisome economic data from the UK dampened additional rate hikes after March, and money markets now appear to favor a break from the May meeting. The widening of the US-UK rate differential has recently weakened sterling, which could get even worse if the BOE formally deems a potential March interest rate hike to be its last, and given the US data still favors a tightening of the rate path interest rates for the Federal Reserve. AUD/USD The AUD/USD pair is based on Friday's good rebound from around 0.6800, the lowest level since January 6, and gaining strong traction on the first day of the new week. The Australian pair was growing towards 0.69. AUD/USD managed to drink through 0.69 and trade above that level. This momentum was interrupted and the pair dropped to 0.6901. Source: investing.com, finance.yahoo.com
Australian dollar - the sharp drop can be attributed to technical factors and hawkish Fed

The Main Growth Driver For The AUD/USD Pair Is The Events In The Global Economy

Marek Petkovich Marek Petkovich 20.02.2023 13:33
Central banks are not to be envied in this cycle of monetary tightening! They have to choose between suppressing the highest inflation in decades and the danger of plunging their own economies into recession. What could be more difficult? Political pressure! The head of the Reserve Bank of Australia has faced unprecedented criticism for high rates. He is accused of intent to cause a recession and advised to choose his words when talking about continuing the cycle of monetary restriction. It is understandable that politicians are not happy with the high cost of borrowing, which limits credit, slows economic growth and creates problems in the labor market. Thus, in January, unemployment in Australia rose to an 8-month high of 3.7%, employers laid off 11,000 people, and the January figure was revised downward to -20,000. When justifying previous cash rate hikes, the RBA figured the strength of the labor market, but if scars from tighter monetary policy begin to appear, shouldn't the process be put on hold? Dynamics of Australian employment In fact, one report is unlikely to change the regulator's outlook. The central bank is doing the right thing, because Australian inflation is not slowing down. Under these conditions, it is necessary to continue the monetary restriction cycle. Yes, there is political pressure on Philip Lowe, but it can hardly be compared to Donald Trump's pressure on Jerome Powell. At one time, the former U.S. president called the Fed chairman America's enemy for his unwillingness to lower the federal funds rate. The central bank's independence is the key to continued monetary tightening, which is bullish for the AUDUSD. However, the main growth driver for the pair is the events in the global economy in general and China in particular. Read next: EY Will Review Darktrace Key Financial And Control Processes| FXMAG.COM Another liquidity injection by the People's Bank of China (PBoC) into the banking system worth 632 billion yuan indicates that the recovery of the Chinese economy after the lifting of the COVID restrictions is in full swing. Yes, the PBoC did not reduce key rates, but the local authorities have already done so for it, which in a directive order, obliged commercial banks to reduce mortgage rates. In fact, the PBoC should be thankful because monetary policy divergence could lead to a serious weakening of the yuan and capital outflows. It is crucial for Australia and its currency that its major trading partner gets better and is ready to provide half of the global GDP growth in 2023. The faster this process goes, the better for the AUDUSD bulls. Technically, a Wolfe wave reversal pattern formed on the daily chart of the analyzed pair. Its target is located near the level of 0.705. The formation of the pin bar with the long lower shadow is the evidence that the AUDUSD has found the bottom. As long as the Aussie is above $0.6886, it should be bought.   Relevance up to 11:00 2023-02-25 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335563
Expect the ECB to keep increasing rates at the short-term, at least until the summer

The Disinflation Process Has Not Started In The Eurozone

Kenny Fisher Kenny Fisher 20.02.2023 14:19
The euro showed some volatility at the start of last week but since then it has been in calm waters and has stayed close to the 1.0.7 line.We’ll get a look at eurozone and German PMIs on Tuesday. ECB signals another 50 bp hike The ECB has been criticized for sending mixed messages to the markets, but Christine Lagarde was crystal clear last week when she told EU lawmakers that “in view of the underlying inflation pressures we intend to raise interest rates by another 50 basis points at our next meeting in March”. Lagarde said the ECB would then evaluate future moves, but with inflation still high, the risks for further rate hikes are skewed to the upside. The ECB’s primary focus is to tame inflation. Headline inflation fell to 8.5% in January, down from 9.2% in December, but is still unacceptably high. Core CPI has been stickier than expected and wage increases are stemming the drop in inflation. ECB member Isabel Shnabel said last that investors risk underestimating inflation, a warning that the Fed has also made to the markets that have consistently been more dovish about rate policy than the Fed. Schnabel noted that the disinflation process has not started in the eurozone, another signal that the central bank will remain in a hawkish mode for the near future. Fed members continue to pound out the message that inflation remains too high and more rate hikes are needed. Investors are clearly concerned that the Fed will make good on these statements, which has sent risk sentiment lower and the US dollar higher. The markets had high hopes that the March rate increase would be a ‘one and done’, but it looks like the Fed will continue raising rates into the second quarter. According to CME’s FedWatch, the markets have priced in an 83% of a 25-bp hike and a 17% of a 50-bp increase. Read next: USD/JPY Pair Is Above 134.00, EUR/USD Pair Holds Below 1.07, GBP/USD Pair Managed To Rebound| FXMAG.COM EUR/USD Technical EUR/USD is testing resistance at 1.0704. Above, there is resistance at 1.0795 1.0604 and 1.0513 are the next support lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Bank of England hikes rates and keeps options open for further increases

The GBP/USD Pair Has A Slightly Bearish Sentiment

InstaForex Analysis InstaForex Analysis 21.02.2023 08:03
GBP/USD closed on Monday at Friday's closing levels. Then, this morning, there is a slightly bearish sentiment, which turned the Marlin oscillator in the daily (D1) timeframe down, pushing it towards a negative territory. It seems that hitting the target level of 1.1900 is becoming more and more plausible. If that happens, the pair will head towards 1.1737, which is the top last September 13, 2022. A price movement below the balance and MACD lines will keep the trend bearish. But on the four-hour (H4) chart, the pair continues a sideways movement, right between the balance and MACD lines. The signal line of the Marlin oscillator is reversing from zero, indicating that it is going to test the MACD line (1.1989), which is also the low last February 15. If it succeeds, the pair will decline further to the target support level of 1.1900 Relevance up to 03:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335621
FX Daily: Euro’s attractiveness on the rise

The EUR/USD Pair Is Still Under Pressure

InstaForex Analysis InstaForex Analysis 21.02.2023 08:05
EUR/USD failed to break out of the support of the important technical level of 1.0660, continuing to consolidate under the indicator lines. The signal line of the Marlin oscillator is also sideways, but it is in a negative area, which keeps the downside potential. Overcoming the level of 1.0660 will open the way towards the nearest target level of 1.0595. The success of that development will make the hike to 1.0470 possible. On the four-hour (H4) chart, the pair is above the MACD line because its movement has only been sideways. The Marlin oscillator also continued its lateral movement along the zero line. For the MACD line to help the pair, it needs to rise high enough (1.0710), preferably to consolidate above the balance line (red indicator). However, it is still under pressure, so market players should wait for the price to hit 1.0595   Relevance up to 03:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335623
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

The USD/JPY Pair May Continue The Rise Towards The Target Level

InstaForex Analysis InstaForex Analysis 21.02.2023 08:08
USD/JPY spent another day at the support line of the global price channel (133.90), probably to continue the rise towards the target level of 137.65. The Marlin oscillator is not pointing to a reversal, which is a sign of a future slow rise in price. This may be due to the February Manufacturing PMI for Japan that came out this morning and showed a decline from 48.9 to 47.4. On the four-hour (H4) chart, the Marlin oscillator is turning up slowly, but a better sign of growth is a reversal of the oscillator from zero. If that happens, yen will move towards the target level of 137.65   Relevance up to 03:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335619
Forex: Euro against US dollar - technical analysis - May 18th

The European Currency Will Continue To Decline For At Least Another Two To Three Weeks

Paolo Greco Paolo Greco 21.02.2023 08:10
On Monday, there was almost no movement in the EUR/USD currency pair. Volatility was low, which can be partially attributed to the absence of significant macroeconomic and fundamental events. Moreover, Mondays frequently feature weak movements. After the weekend, the market needs to "swing," which takes some time. However, the pair continued to trade below the moving average line, indicating that there is currently no flat. An attempt to break over the moving average line was made last week, but it was unsuccessful due to the news on US inflation. The US dollar should have increased in price as January witnessed a very minor slowdown in inflation. As the market recognized its mistake, it stopped selling it and started buying it again. We witnessed a false overcoming of the moving at this point, which was shortly leveled. According to the Heiken Ashi indicator's current downward trend, the pair may fall to the levels of 1.0590 and 1.0620 today. We anticipate that the European currency will continue to decline for at least another two to three weeks. The pair can successfully shift downwards during this period. If the market is set for an upward trend in 2023, it will be sufficient to begin developing one later. As we've already mentioned, the market has already figured out one of the main things that have been helping the euro currency in recent months. The market was able to anticipate a 1.25% rate increase because the ECB had previously disclosed its expectations for the upcoming several months. As inflation is still extremely high, the European Central Bank will probably not stop at this level of tightening, but the market is still in the dark regarding the regulator's next moves. In any case, the euro currency cannot continue to appreciate even if the "hawkish" sentiment holds strong through May and June. In any case, corrections are necessary. Olli Rehn: Interest rates will continue to rise until the summer. The statement by Olli Rehn, a member of the ECB monetary committee, may have been the sole event on Monday. He delivered the speech that was, in theory, required of him. He specifically stated that the rate hike should continue since core inflation is still too high and has not slowed down. The rate should increase by 0.5% again in March. It is advised to keep growing the pace until the summer when it should reach its maximum level. So, for a very long period, the rates will need to be kept high enough for inflation to recover to 2%. In general, all of these theses have been known to the market for a long time, except for the statements regarding the potential continuation of tightening into the summer. As we previously stated, the ECB is expected to maintain its "hawkish" stance, which may support the euro in the medium term. But, it is important to keep in mind that the Fed may also continue to raise interest rates until the summer. And in this instance, the Fed rate will almost certainly be higher by that time than the ECB rate. As a result, in our opinion, the euro will no longer enjoy widespread support. Therefore, it should no longer be justified in a sharp decline in the price parity area. We see the level of 1.0600 as the lowest target for the present downward movement because there is around where the Senkou Span B line intersects the 24-hour TF. The critical line was crossed on the same TF. The pair has been slowly declining to this point, and this week's macroeconomic and fundamental conditions are not expected to stop it. Hence, nothing has altered in our prognosis as of yet. While volatility has recently dropped to a relatively low level of 74 points per day, we continue to anticipate a fall in the pair, albeit a slow one. Market participants appear to indicate that there aren't many reasons to engage in aggressive trading right now. As a result, you must choose between waiting for new, significant publications and events or relying on weak movements right away. As of February 21, the euro/dollar currency pair's average volatility over the previous five trading days was 74 points, which is considered to be "normal." Thus, on Tuesday, we anticipate the pair to move between 1.0590 and 1.0738 levels. A new round of correction will be signaled by the Heiken Ashi indicator's upward movement. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trade Advice: The EUR/USD pair is still moving south. Before the Heiken Ashi indication comes up, we can now consider opening new short positions with targets of 1.0590 and 1.0620. After the price is fixed above the moving average line, long positions can be initiated with targets of 1.0742 and 1.0864. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 05:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335625
The Pound Should Keep Losing Ground Versus The Dollar

The Decrease Of The GBP/USD Pair Will Persist

Paolo Greco Paolo Greco 21.02.2023 08:15
The GBP/USD currency pair failed to get a foothold above the moving average line on Monday, and it adjusted on Friday. The downward trend so persists, but on Monday there were no changes in general. For the pound, the volatility for the day was only about 40 points. You may simply forget about yesterday because neither macroeconomics nor technology offered anything noteworthy. The pound has not yet fallen below its most recent short-term local low, which is 1.1841. Hence, we anticipate that the decrease will persist. As is the case with the EUR/USD pair. It is excellent that the macroeconomic context has caused expectations for both major pairs to decline. When this isn't the case, it creates some cognitive dissonance because the euro and the pound are traded similarly most of the time. The pound has been in a long-awaited correction, much like the euro. Even though there were no compelling reasons for it, the pound managed to increase by 2,100 points in the second half of 2022. In actuality, a retracement away from the worldwide decline was seen. But the surge of 2,100 points also calls for a correction. The British currency has now changed by almost 600 points. This indicates that it is acceptable to drop by 400 points below the previous local minimum. Of fact, the Bank of England's representatives more forceful language could help the bulls in resuming the upward trend. But, the pair has been modified thus far, and we think that this is completely rational and sensible. Under the "Northern Ireland Protocol," the European Union and the United Kingdom can resolve all disputes. Recently, central banks and rates have received all of the market's attention. And in the previous year, geopolitics. The "Northern Ireland protocol," Brexit, and Scotland's desire to leave the United Kingdom all seemed to be forgotten in the shadow of these events. Yet, it should be noted that the new Rishi Sunak government is expressing its intention to start a rapprochement with the European Union while blatantly disregarding the outcomes of the 2016 referendum. Since it becomes more and more obvious that Brexit was a mistake every year, we believe that this is a positive development for the entire UK. What advantages London has gotten from this is still up for debate. The breakdown of long-standing economic and trade connections with the EU costs the UK economy tens of billions of euros per year. The UK economy has the highest likelihood of experiencing a recession, no new trade agreements with other nations have been reached, and inflation in the UK is greater than in the EU and shows no signs of slowing down. London itself is gradually losing its position as a major financial center. Also, Boris Johnson was actively talking with Donald Trump on this matter and was banking on a trade agreement with the United States. Johnson is no longer the British prime minister, and Trump is no longer the US president. Yet, it was recently revealed that the "Northern Ireland protocol" dispute between the EU and Britain would soon be resolved after several years of negotiations. The majority of the unresolved issues, including various customs inspections, have reportedly been agreed upon by the parties, according to unnamed individuals close to the negotiating groups. But, sources also claim that several difficulties, particularly those connected to politics, have not yet been settled. Yet there has been considerable progress, so there is every reason to believe that this issue will be resolved within the next several weeks. Although it is difficult for us to predict if the pound will increase as a result (likely not), this is still good news for the UK. We think it's more crucial for the pound and the British economy to integrate as rapidly as possible with the EU economy. And it will already be important to carefully watch what Rishi Sunak does in this subject. Sunak still needs to collect support to start implementing his plans because not every member of the UK Parliament will be in favor of moving towards the Alliance in the past. But among the British, the desire to rejoin the EU is growing stronger. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 126 points. This figure is "high" for the dollar/pound exchange rate. So, on Tuesday, February 21, we anticipate movement that is held inside the channel and is limited by levels 1.1894 and 1.2146. The Heiken Ashi indicator's downward turn indicates that the downward movement has resumed. Nearest levels of support S1 – 1.2024 S2 – 1.1963 S3 – 1.1902 Nearest levels of resistance R1 – 1.2085 R2 – 1.2146 R3 – 1.2207 Trade Suggestions: Over the 4-hour timeframe, the GBP/USD pair reversed the downward trend. Hence, in the event of a downward reversal of the Heiken Ashi indicator, we can now consider additional short positions with targets of 1.1963 and 1.1902. If you consolidate above the moving average with targets of 1.2146 and 1.2207, you can start buying. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones Relevance up to 05:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335627
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

The EUR/USD Pair Has A Potential For Bearish Movement

Oscar Ton Oscar Ton 21.02.2023 08:16
Technical outlook: EURUSD rallied through the 1.0704 high intraday on Monday before pulling back. The single currency is seen to be trading around 1.0665 at this point in writing as the bears continue retracing lower. Intraday support is seen through the 1.0650-60 zone, and we can expect the bulls to be back in control. Prices could push higher through 1.0750 and up to 1.0850 in the near term. EURUSD is broadly unfolding a larger-degree corrective drop towards 1.0500 and down to 1.0100 as projected on the daily chart. Within the larger-degree drop, prices are setting up for a counter-trend rally towards 1.0750 at least. The bears are expected to be back in control thereafter and drag lower towards 1.0500 and 1.0100 respectively. EURUSD is facing strong resistance at the 1.1025 high while interim support is seen around 1.0600, followed by 1.0481 levels respectively. Ideally, the price should stay below 1.1025 and continue lower towards 1.0500 in the near term. Watch out for a short-term rally towards 1.0750 and possibly up to 1.0850 before the bears are back. Trading idea: Potential bearish move towards 1.0500 and down to 1.0100 Good luck!   Relevance up to 06:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313423
Rates Spark: Nothing new on the dovish front

The EUR/USD Pair Is Moving Down In A Sluggish Manner

Paolo Greco Paolo Greco 21.02.2023 08:19
Analysis of Monday's trades: 30M chart of EUR/USD On Monday, EUR/USD traded horizontally due to an empty macroeconomic calendar in the US and the eurozone as well as a lack of any fundamental factors able to somehow affect the market. Any price movements and volatility are usually untypical for Mondays. In general, the pair is still in a downtrend that is no longer as strong as it used to be. Traders are now more cautious when selling. Anyway, a bearish continuation is likely. The last two weeks of February are going to be rather uneventful. The world central banks will announce new rate decisions in March, and future trends of major currency pairs will depend on that. There is currently neither a trend line nor a channel. The pair is moving down in a sluggish manner. 5M chart of GBP/USD No trading signals were generated on Monday. The pair traded horizontally in the 1.0669-1.0697 range, i.e. a 30-pips sideways channel. Therefore, there was no point in trading for beginners. Rather, they should wait until the price leaves the channel. In fact, that could happen even without any fundamentals and macro data coming. Volatility will increase once Monday is over anyway. On Tuesday, a few interesting reports are set to be released, which could have a strong influence on the pair. Trading plan for Tuesday: In the M30 time frame, there is a bearish continuation. This is also a weak movement with frequent corrections, and therefore it is hard to price. Volatility is low. The macroeconomic calendar for the coming weeks will contain only reports of secondary importance. So, this is going to be an uneventful and quite boring couple of weeks. In the M5 time frame, levels 1.0535, 1.0587-1.0607, 1.0669, 1.0697, 1.0792, and 1.0857-1.0867 stand as targets. A Stop Loss should be set at the breakeven point as soon as the price passes 15 pips in the right direction. On Tuesday, the eurozone and the US will see the release of their manufacturing and services business activity data. The reaction of the market to these reports will depend on how actual results will differ from forecasts. If they come in line, no reaction will follow at all. Basic principles of the trading system: 1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a breakout). The shorter this period, the stronger the signal. 2) If two or more trades are opened at some level following false signals, i.e. those signals that do not drive the price to a Take Profit level or the nearest target, any consequent signals near this point should be ignored. 3) During a sideways trend, any currency pair may form a lot of false signals or produce no signals at all. In any case, a sideways trend is never the best condition for trading. 4) Trades are opened in the time period between the opening of the European session and the middle of the North American one when all trades should be closed manually. 5) We can pay attention to signals coming from the MACD in the 30M time frame only if there is volatility and a definite trend confirmed by a trend line or a trend channel. 6) If two key levels are too close to each other (about 5-15 pips), that is an area of support or resistance. Indicators on charts: Support and resistance levels can serve as targets when buying or selling. You can place a Take Profit near them. Red lines are channels or trend lines that display the current trend and show which direction is better to trade. MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines. Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, it is important to trade as carefully as possible or exit the market in order to avoid a sharp price reversal. Beginner traders should remember that not all trades will be profitable. The development of a reliable strategy and money management is the key to success in long-term trading.     search   g_translate       Relevance up to 20:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335615
Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

Analysis Of The USD/CAD Commodity Currency Pairs

InstaForex Analysis InstaForex Analysis 21.02.2023 08:22
If we look on the daily chart of USD/CAD commodity currency pairs there is a few interesting things as follows: 1. The appearance of Bullish 123 pattern followed by Ross Hook (RH), 2. There is a deviation between price movement with CCI indicator. 3. The appearance of Vegas pattern on CCI Histogram indicator (20). 4. Both Sidewinder indicator in green which means Volatile/ really trending. 5. Chopzone indicator in Blue/Cyan which means = Bullish Trend. 6. Zero Line indicator in green which means Bullish. Based on 6 facts above we can conclude that if The Loonie now is in a healthy Bullish condition so that in the nearest time Ross Hook 1.3537 will try to break by this commodity currency pairs, as long as there is no downward correction beyond the 1.3228 level, USD/CAD has the potential to appreciate to the 1.3705 level as the first target and if the volatility and momentum at The Loonie is still sufficient to support the bull movement then it is possible that the 1.3978 level will become the second target.   Relevance up to 06:00 2023-02-26 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/119883
ECB cheat sheet: Difficult to pull away from the Fed

In The Nearest Time The EUR/USD Pair Will Depreciate Up To The Level 1.0482

InstaForex Analysis InstaForex Analysis 21.02.2023 08:24
With the appearance of deviation between price movement with CCI indicator. The Histogram gave the signal if in the nearest time will depreciate up to the level 1.0482 where this confirmed by Zero Line in red which mean both Bearish condition and Chop Zone indicator is in red means that the bias from Fiber is Bearish. But with the condition that the two Sidewinder indicators are colored red which indicates that the EUR/USD condition is in a non-trending / non-volatile condition, therefore please also pay attention if there is a upward correction not exceeding the 1.0804 level because if this level is successfully penetrated, there is a high probability that the downward scenario described earlier will become invalid and automatically cancel itself. (Disclaimer)   Relevance up to 06:00 2023-02-26 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/119885
The GBP/USD Pair Is Expected The Consolidation To Continue

The Downward Trend Of The GBP/USD Pair Is Still In Place

Paolo Greco Paolo Greco 21.02.2023 08:27
Analysis of the 5-minute chart for the GBP/USD. On Monday, the GBP/USD currency pair was almost completely inactive. Monday was completely boring, with nothing worth analyzing or even highlighting. There were no noteworthy or exciting happenings, or at least none that could have awakened the market. Consequently, given the current situation, all we can do is observe that the downward trend is still in place and that it is just as sluggish as the euro, while also hoping that today's volatility will be higher. On Monday, no trading signals developed at all, just like with the euro. And if the daily volatility was 42 points, what might be predicted? The only time the pair came close to reaching the 1.2007 level was during the Asian trading session. As a result, despite our advice, opening deals yesterday was not necessary. All that is left to do is wait for the market to open. The pound will probably keep going down steadily. COT Report The "bearish" sentiment appeared to be weakening in the most recent COT report on the British pound. The non-commercial group concluded 6,700 buy contracts and 7.5 thousand sell contracts throughout the week. As a result, non-commercial traders' net position increased by 0.8 thousand. The net position indicator has been slowly rising over the past few months, and although it hasn't yet, it suggests that significant players' attitudes may soon turn "bullish." Although the value of the pound against the dollar has increased recently, it is quite challenging to identify the basic reasons behind this growth. While there is still a need for adjustment, we cannot rule out the possibility that the pound may continue to decline in the near (or medium) term. There are no questions because COT reports have generally matched the trend of the pound in recent months. Purchases may continue in the future for a few months, but they must have the right "foundation" underneath them, which they do not now have because the net position is not even "bullish" yet. A total of 35,000 contracts for purchases and 59,000 contracts for sales have now been opened by the non-commercial group. Although there are some reasons to believe that the British currency would increase over the long run, geopolitics does not support such a significant and rapid pound sterling strengthening. GBP/USD 1H analysis The pound/dollar pair showed a new wave of upward movement on the hourly timeframe on Friday and concluded it relatively quickly, as seen by not crossing the crucial Kijun-sen line. As a result, even though the downward trend is weak, it still exists because the pair is below both Ichimoku indicator lines. We highlight the following crucial levels on February 21: 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2288, 1.2342, 1.2429. There are more signal sources, including the Senkou Span B (1.2113) and Kijun-sen (1.2048) lines. These levels and lines can be "bounced" and "surmounted" by signals. It is advised to set the stop-loss level to breakeven when the price has moved 20 points in the desired direction. The Ichimoku indicator's lines might move during the day; therefore, this should be considered when choosing trade signals. Support and resistance levels that can be used to determine transaction profit margins are also shown in the graphic. On Tuesday, statistics on business activity will be released in the US and the UK. We do not anticipate a strong response to these publications since they are only marginally significant. These articles, however, can at least motivate the pair to move on from their fixed position. Explanations for the illustrations Thick red lines represent price levels of support and resistance (resistance/support), where the movement may come to an end. They don't provide trading signals, though. The Ichimoku indicator's Kijun-sen and Senkou Span B lines have been moved from the 4-hour timeframe to the hourly one. The price previously bounced off of the tiny red lines that represent extreme levels. They provide signals for trading. Trend lines, trend channels, and other technical patterns are represented by yellow lines. The net position size of each trading category is represented by indicator 1 on the COT charts. The net position size for the "Non-commercial" category is shown by indicator 2 on the COT charts.   Relevance up to 07:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335637
Central Banks and Inflation: Lessons from History and Current Realities

The Outlook Of The GBP/JPY Cross Pair Movement

Torben Melsted Torben Melsted 21.02.2023 08:29
It has been a while since we looked at GBP/JPY, but then nothing much has happened here. GBP/JPY has been consolidating with a slightly ascending bias over the last two months. We could see GBP/JPY move slightly higher to resistance at 163.00 before renewed downside pressure is expected towards 145.76. Short-term a break below support at 160.10 will confirm that the consolidation has been completed and the next leg lower towards 163.00 is in progress.   Relevance up to 07:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313441
FX Daily: Time for the dollar to pause?

The EUR/USD Pair Is Waiting For PMI Reports From Eurozone And US

Jakub Novak Jakub Novak 21.02.2023 08:38
Analysis of transactions and tips for trading EUR/USD The test of 1.0679 occurred when the MACD line was already far from zero, so the downside potential was limited. Given the low trading volume due to the weekend in the US, no other signals appeared for the rest of the day. The Bundesbank report and the eurozone consumer confidence indicator surprisingly had no impact on euro yesterday. Today promises to be more interesting as ahead are PMI reports for the eurozone. Figures above 50 points will prompt a rise in euro, which will extend if ZEW data on business sentiment and current conditions also show good numbers. In the afternoon, a similar PMI report is expected for the US, but the data are unlikely to be as strong as in the eurozone. Signals of weakening activity will certainly hurt dollar, which will allow euro to continue its rally. Meanwhile, a strong reading will lead to a sharp decline in EUR/USD during the US session. For long positions: Buy euro when the quote reaches 1.0696 (green line on the chart) and take profit at the price of 1.0729. Growth will occur if economic data for the eurozone exceeds expectations. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0665, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0696 and 1.0729. For short positions: Sell euro when the quote reaches 1.0665 (red line on the chart) and take profit at the price of 1.0624. Pressure may return at any moment. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0696, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0665 and 1.0624. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335649
Euro against US dollar and British pound - Technical Analysis - May 17th

The Cable Market (GBP/USD) Remained In A Sideways Trend

Jakub Novak Jakub Novak 21.02.2023 08:42
Analysis of transactions and tips for trading GBP/USD The test of 1.2027 occurred when the MACD line was just starting to move below zero, which was a pretty good signal to sell. However, the decline was only brief as the market lacked the volatility to make strong movements. GBP/USD remained in a sideways trend as the Rightmove housing price index report missed the market. There will be PMI reports for the UK today, in which poor figures will prompt another decline in the pound. Data on industrial orders, meanwhile, will be ignored. In the afternoon, a similar PMI report is expected for the US, but the figures are unlikely to be as strong as in the UK. Signals of weakening activity will certainly hurt dollar, which will allow pound to rally. A strong reading, on the other hand, will lead to a sharp decline in GBP/USD during the US session. For long positions: Buy pound when the quote reaches 1.2051 (green line on the chart) and take profit at the price of 1.2093 (thicker green line on the chart). Growth will be possible if PMI data in the UK exceeds expectations. However, when buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can be bought at 1.2013, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2051 and 1.2093. For short positions: Sell pound when the quote reaches 1.2013 (red line on the chart) and take profit at the price of 1.1966. Pressure will return if economic data in the UK are weaker than expected. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2051, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2013 and 1.1966. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335651
Gold Trading Analysis: Technical Signals and Price Movements

FX Daily: Growth stories back in focus

ING Economics ING Economics 21.02.2023 08:58
It’s PMI day, and we think the euro could benefit from the reinforcement of its growth story after a period of few domestic drivers. With the Fed's hawkish rate repricing having gone a long way, we suspect the USD rally may soon run out of steam, even though risk-off may delay a downtrend. Elsewhere, we expect a hawkish 50bp RBNZ hike, but dovish risks have risen Yesterday's visit by President Joe Biden to Kyiv reiterate the now well-established notion that this will be a long war USD: Supported by risk-off mood, but rally looks tired After a very quiet start to the week in FX due to a US holiday, we should start to see some action today. Yesterday’s visit by President Joe Biden to Kyiv and the pledge for more support to Ukraine don’t have clear implications for markets in the near term, but probably reiterate the now well-established notion that this will be a long conflict. The ramifications for the global economy can still be quite deep, especially in neighbouring Europe, but energy prices have been the main transmission channel from the war to the market, and TTF trading around 50 EUR/KWh is allowing markets to turn a blind eye to longer-term risks. We argued in yesterday’s FX Daily how this could be the week where the dollar rally starts losing some steam. The main reason for this is that the recent hawkish rhetoric and strong data have likely been absorbed by now and a further hawkish repricing in Fed rate expectations (currently embedding a 5.40/45% peak rate) is looking increasingly harder. We think that at this stage, it may be mostly down to external factors – like news from Ukraine/China or a general deterioration in risk sentiment – to push the dollar even higher. The key event on the Fed front this week, the FOMC minutes, may not match the hawkish tone we heard after the strong jobs and inflation data released after the meeting. PMIs will be watched in the US like in the eurozone, but the rebound in other surveys already favoured a positive re-rating in US growth expectations and may have set the bar quite high for a major positive surprise to lift the dollar. Still, signs of deterioration in the global risk sentiment this morning suggest today might not be the day for the start of a dollar downtrend, but – equally – we struggle to see DXY extend the recent rally to 105.00 and we could instead witness the start of a decline again towards 102.50-103.00 in the coming days. Francesco Pesole EUR: A reminder of the improved growth outlook The euro has been left without strong domestic drivers on the data front over the past week, so today’s PMIs will be watched quite closely. Consensus is leaning in favour of some modest improvement in both manufacturing and service gauges, and investors might see this as an opportunity to re-enter strategic medium-term long-EUR positions now that the dollar correction seems to be losing momentum. Instability in global risk appetite today may delay the beneficial effects on EUR/USD today, but we still see the balance of risks tilted to the upside for EUR/USD in the coming days, and a return to the 1.0750-1.0800 range seems possible. Elsewhere, it is a very busy week in Sweden. Despite some easing in inflation expectations in the Prospera survey released this morning, yesterday’s core CPIF inflation print came in hotter than expected at 8.7% (rising from 8.4%), and EUR/SEK dropped on expectations of more Riksbank tightening. While this fits our view for a recovery in the krona over the course of the year, we warn against celebrating too early. Remember that the slump in SEK was originally triggered by concerns about the Swedish economic and housing situation, and while more Riksbank tightening helps SEK in the near term, it raises the risks of a black-swan scenario materialising down the road. We think activity data and the outcome of wage negotiations can still generate significant volatility in the krona, and a sustainable move below 11.00 in EUR/SEK still looks premature.   What the Riksbank surely wants is a stronger SEK, and we have now gotten used to hearing references to the currency from many speakers. The minutes from the latest meeting, released yesterday, did all but confirm that there is a strong hawkish direction at the Riksbank. We have long argued how maintaining such rhetoric is likely the best way to navigate the current policy challenges in Sweden. We’d be surprised to hear any dovish hint from the two speakers today (Floden and Ohlsson) or by Governor Erik Thedeen tomorrow.   Francesco Pesole GBP: Looking unlikely to sustainably outperform EUR The PMIs will also be released in the UK this morning, and the consensus seems to be looking at an improving outlook here as well. Still, UK PMIs should continue to fall below the eurozone ones and therefore continue to point to the UK’s relative economic underperformance. Ultimately, we struggle to see the pound consistently strengthening against the euro, especially as we expect the Bank of England to deliver only one last 25bp hike in March, while markets are partly pricing in further tightening after that. EUR/GBP may stay range-bound or climb gradually at this stage. Francesco Pesole NZD: We expect 50bp by RBNZ, but watch the cyclone risk The Royal Bank of New Zealand (RBNZ) announces monetary policy at 0100 GMT tomorrow and we are aligned with the consensus call for a 50bp rate hike – as discussed in our meeting preview. This is its first monetary policy meeting since November, and policymakers will need to take note of the deterioration in activity indicators, inflation having undershot the Bank’s projections, and a housing market that has remained under pressure. All those factors are enough, in our view, to convince the RBNZ to slow the pace of tightening from 75bp to 50bp, but there is probably little advantage in offering dovish signals to the market. Such signals would not just come with a smaller – 25bp hike – but also by revising the peak rate projections lower, which are currently at 5.50% in mid-2023. We have increasing doubts that the 5.50% level will be reached at all (rates are at 4.25% now). Despite the house price correction having largely been in line with RBNZ projections, lower-than-expected inflation would encourage stopping hikes – and hopefully the housing slump – earlier. It is, however, too premature to review those rate projections lower, in our view, at least until there is more conclusive evidence that the disinflation process has started. There is one key risk to our call though: the impact of the cyclone in New Zealand. This has triggered growing speculation that the RBNZ will only hike by 25bp or even pause, and is probably behind the drop in NZD/USD to 0.6200 this morning.  Admittedly, this downside risk has become more material now, but we stick to our call for a hawkish 50bp hike by the RBNZ, and we think this will lift the New Zealand dollar tomorrow. However, we think this may be one of the last times the RBNZ has a direct positive impact on NZD as many factors suggest a dovish pivot will come soon. Francesco Pesole Read this article on THINK TagsNew Zealand dollar FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Analysis Of Situation Of The USD/INR Pair

Lower Oil Prices Will Support The Indian Rupee (INR)

TeleTrade Comments TeleTrade Comments 21.02.2023 09:03
USD/INR is likely to continue moving north amid declining investors’ risk appetite. The demand for US government bonds is declining ahead of the FOMC minutes. One more 25 bps rate hike is expected from the RBI as the current inflation is beyond its tolerance limit. The USD/INR pair is approaching 82.80 as the US Dollar Index (DXY) has rebounded firmly amid the risk-off market mood. Investors are channelizing their funds into the USD Index amid rising uncertainty ahead of the US opening after an elongated weekend. The USD Index has delivered a breakout of the consolidation formed in a narrow range of 103.45-103.63 as the risk aversion theme is gaining traction. Also, anxiety among investors is accelerating as investors are anticipating hawkish commentary in the Federal Open Market Committee (FOMC) minutes, which will release on Wednesday. The 10-year yields on US government bonds have climbed above 3.85%. S&P500 futures have extended their losses further as rising odds of further interest rate hikes by the Federal Reserve (Fed) might refresh recession fears. The release of the FOMC minutes will provide a detailed explanation behind the rate hike by 25 basis points (bps) to 4.50-4.75% from the Fed. Apart from that, cues about interest rate guidance and current economic fundamentals will be keenly watched. On the Indian Rupee front, higher inflation is still advocating for further policy restriction by the Reserve Bank of India (RBI). Economists at ANZ Bank expect the Reserve Bank of India (RBI) to deliver one more 25 basis points (bps) rate hike. A note from ANZ Bank stated, “January’s CPI inflation at 6.5% was much above the monetary policy committee’s tolerance limit, jeopardizing the RBI’s near-term inflation projections.” Meanwhile, oil prices have dropped significantly below $76.60 as investors are worried about economic projections. Also, the Chinese economy is not delivering recovery as expected, which is impacting the oil price. It is worth noting that India is one of the leading importers of oil and lower oil prices will support the Indian Rupee.  
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The Loonie Pair (USD/CAD) Buyers Cheer Downbeat Prices Of WTI Crude Oil

TeleTrade Comments TeleTrade Comments 21.02.2023 09:04
USD/CAD picks up bids to reverse the week-start losses but previous support line challenges the bulls. Geopolitical fears, return of full markets weigh on sentiment and underpin US Dollar rebound. Oil price bears the burden of firmer USD and fears of slow demand growth, higher inventories. Canada inflation eyed as BoC signaled a pause in rate hikes, US PMIs should be observed too. USD/CAD clings to mild gains near 1.3480 as it reverses the previous day’s losses during early Tuesday in Europe. In doing so, the Loonie pair buyers cheer downbeat prices of Canada’s key export item, WTI crude oil, as well as the full market’s favor to the US Dollar, ahead of the key US and Canadian statistics. WTI crude oil drops nearly 1.0% on a day as it renews its intraday low to near $76.60 by the press time. In doing so, the black gold reverses the previous day’s corrective bounce off a two-week low, the first in six days, amid fears of more supplies from the US and Saudi Arabia as Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said on Monday, “OPEC+ is flexible enough to change decisions whenever required.” Elsewhere, fears emanating from China, North Korea and Russia seemed to have joined the fresh run-up in the US Treasury bond yields, amid hawkish hopes from the US Federal Reserve (Fed), to underpin the US Dollar rebound. That said, the US and China alleged each other over the balloon shooting whereas the US diplomatic ties with Taiwan teased Beijing on Monday. On the same line, the United Nations (UN) Security Council is alarmed by Japan for North Korea’s missile testing and could help the US Dollar to remain firmer due to its safe-haven status. It should be noted that the US Dollar Index (DXY) snaps a two-day losing streak while marking mild gains near 104.00. In doing so, the greenback’s gauge versus the six major currencies traces the US Treasury bond yields, as well as benefits from the traditional haven status. That said, the US 10-year Treasury bond yields pick up bids to near the highest levels marked since early November 2022, mildly bid around 3.86% at the latest. While portraying the mood, S&P 500 Futures declined 0.40% intraday to 4,070 at the latest. Looking forward, the Canadian Consumer Price Index (CPI) for January, as well as the Bank of Canada (BoC) CPI Core for the said month, will be observed closely for immediate directions as the BoC has already teased a pause in the rates. As a result, softer prints of inflation data may allow the BoC to announce the policy pivot and propel the USD/CAD. On the other hand, the preliminary readings of the US Purchasing Managers Index (PMI) data for February will be important for the US Dollar ahead of Wednesday’s Federal Open Market Committee’s (FOMC) Monetary Policy Meeting Minutes. Given the recently hawkish bias for the Fed, versus the BoC’s dovish tone, the USD/CAD is likely to witness further upside unless the Oil prices witness a strong rally. Technical analysis A one-week-old support-turned-resistance line near 1.3490 guards the USD/CAD pair’s immediate upside ahead of the 61.8% Fibonacci retracement level of the pair’s December 2022 to February 2023 downside, near 1.3540 at the latest. Meanwhile, the USD/CAD bears may aim for the 200-Simple Moving Average (SMA), close to 1.3400 by the press time, as an immediate target during the quote’s fresh downside past the latest low of 1.3440. Following that, the monthly bottom surrounding 1.3260 will be in focus.
SNB stands firm in the face of market turbulence with 50bp rate hike

The Cautious Mood Ahead Of The Key Data/Events Favors The USD/CHF Buyers

TeleTrade Comments TeleTrade Comments 21.02.2023 09:11
USD/CHF grinds near intraday high during the first positive day in three. Risk aversion joins firmer yields to underpin US Dollar rebound amid full markets. Geopolitical concerns surrounding China, North Korea and Russia weigh on sentiment. Swiss trade numbers, US PMI eyed for immediate directions, Fed Minutes is the key. USD/CHF remains mildly bid around 0.9240, despite recently easing from the intraday high, as the Swiss pair (CHF) traders benefit from the US Dollar rebound amid sour sentiment. It’s worth noting, however, that the cautious mood ahead of the key data/events favors the USD/CHF buyers. That said, the US Dollar Index (DXY) snaps a two-day losing streak while marking mild gains near 104.00. In doing so, the greenback’s gauge versus the six major currencies traces the US Treasury bond yields, as well as benefits from the traditional haven status. That said, the US 10-year Treasury bond yields pick up bids to near the highest levels marked since early November 2022, mildly bid around 3.86% at the latest. While portraying the mood, S&P 500 Futures declined 0.40% intraday to 4,070 at the latest. While tracing the run-up in the US Treasury bond yields, the fears emanating from China, North Korea and Russia seemed to have underpinned the fresh run-up in the US Treasury bond yields, amid hawkish hopes from the US Federal Reserve (Fed), as well as the US Dollar rebound. That said, the US and China alleged each other over the balloon shooting whereas the US diplomatic ties with Taiwan teased Beijing on Monday. On the same line, the United Nations (UN) Security Council is alarmed by Japan for North Korea’s missile testing and could help the US Dollar to remain firmer due to its safe-haven status. At home, the Swiss National Bank’s (SNB) previous warnings to use open market operations to defend the CHF seemed to have weighed on the USD/CHF prices. However, the cautious mood ahead of today’s Swiss trade numbers for January and the preliminary readings of the US Purchasing Managers Index (PMI) data for February will be important for the US Dollar ahead of Wednesday’s Federal Open Market Committee’s (FOMC) Monetary Policy Meeting Minutes. Overall, USD/CHF is likely to remain directed towards the north unless the US PMIs disappoint the watchers. Technical analysis Given the USD/CHF pair’s rebound from the previous resistance line from late November, close to 0.9225 at the latest, the buyers are likely approaching the weekly top of 0.9332. However, the 50-DMA restricts the immediate upside of the quote near 0.9245.
Bank of Korea puts brakes on rate hike but keeps hawkish tilt

The USD/KRW Pair Remains Below The $1,300 Mark

TeleTrade Comments TeleTrade Comments 21.02.2023 09:17
Bank of Korea (BOK) Governor Rhee Chang-yong said in a statement on Tuesday, “more delicate policy response is necessary as uncertainty is high both externally and internally.” Additional quotes “Difficult to predict future inflation path due to uncertainty over China's reopening, Ukraine war.” “Will respond in a timely manner in case of uneasiness in financial, forex markets.” Market reaction USD/KRW remains on the offers below the $1,300 mark following the above comments, keeping its range trade intact so far this Tuesday.
Australian dollar against US dollar decreased amid weak China CPI data

Economic Activities In The Australian Economy Are Accelerating Despite Higher Interest Rates

TeleTrade Comments TeleTrade Comments 21.02.2023 09:21
AUD/USD has shifted its auction profile below 0.6900 amid the risk-off mood. Federal Reserve policymakers have been citing it would be premature to consider a pause in the policy tightening spell this year. Reserve Bank of Australia also considered the option of a 50 bps rate hike as the Australian inflation has not peaked yet. AUD/USD has confidently shifted above the neckline of the Head and Shoulder formation, indicating a bullish reversal. AUD/USD has surrendered the round-level support of 0.6900 in the early European session as investors getting worried that higher interest rates by western central banks are getting nightmares for the producers. The market sentiment is turning risk-averse ahead of the opening of the United States markets after a long weekend. S&P500 futures have extended their losses as the renewal of higher inflation projections after a significant jump in US Retail Sales has triggered fears of more rate hikes beyond March. The US Dollar Index (DXY) is making deliberate efforts in shifting its auction profile above 103.70. The recovery move by the USD Index in the Asian session was higher confident, however, further range extension is facing pressure. This week, the show-stopper will be the release of the Federal Open Market Committee (FOMC) minutes, which will release on Wednesday. Investors are expecting a sheer hawkish stance on the interest rate guidance as Federal Reserve (Fed) policymakers have been citing it would be premature considering a pause in the policy tightening spell this year. This has trimmed demand for US government bonds. Lower demand for government bonds has propelled the 10-year yields above 3.85%. Hawkish Reserve Bank of Australia minutes fail to support the Australian Dollar It was widely anticipated that Reserve Bank of Australia Governor Philip Lowe and his mates would be advocating for more interest rate hikes as Australian inflation is critically stubborn. The Australian Consumer Price Index (CPI) has refreshed its multi-decade of 7.8% and is showing no signs of softening ahead in spite of the fact that the Official Cash Rate (OCR) has been already pushed to 3.35%. The message from the RBA minutes was clear that more interest rates are warranted as strong consumer demand is not allowing Australian inflation to soften from its peak. According to the RBA minutes, policymakers also considered the option of 50 basis points (bps) interest rate hike considering the persistence of inflation. The RBA members also highlighted that the Unemployment Rate is the lowest in the past 50 years and job vacancies are extremely high, which is delighting households for flushing surplus funds into the economy. Aussie PMI is out, US PMI is due yet Apart from the hawkish RBA minutes, upbeat preliminary Australian S&P PMI (Feb) data has also failed to strengthen the Australian Dollar. The Manufacturing PMI landed at 50.1, higher than the consensus of 49.9 and the former release of 50.0. The Services PMI scaled firmly to 49.2 versus the estimates of 48.4 and the prior release of 48.6. Economic activities in the Australian economy are accelerating despite higher interest rates by the Reserve Bank of Australia, which indicates that consumer demand is extremely robust. In Tuesday’s New York session, preliminary US S&P PMI numbers will be keenly watched. The Manufacturing PMI (Feb) is seen lower at 46.8 vs. the prior release of 46.9. And the Services PMI is seen at 46.6 against the former release of 46.8. There is no denying the fact that producers have trimmed their dependency on borrowings from commercial banks due to higher interest rates by the Federal Reserve. And are exploiting their retained earnings to avoid higher interest obligations. Firms have postponed their expansion plans, therefore, a continuation of contraction in economic activities is highly expected. FOMC minutes to guide further movement to the FX market ahead The minutes from the Federal Reserve will provide a detailed explanation of hiking interest rates by 25 basis points (bps) in the February monetary policy meeting. The street always tries to remain ahead of the Federal Reserve (Fed) policymakers. Therefore, the major focal point for investors in the Federal Open Market Committee (FOMC) minutes is the meaningful cues that could provide guidance on interest rates. Information on the terminal rate and targets for inflation will be keenly watched. AUD/USD technical outlook AUD/USD has shifted its business above the neckline of the Head and Shoulder chart pattern plotted from January 10 low at 0.6860 on a four-hour scale. The responsive buying action from the market participants negated the downside break of the above-mentioned chart pattern. The 20-period Exponential Moving Average (EMA) at 0.6900 is acting as a cushion for the Australian Dollar. The Relative Strength Index (RSI) (14) has rebounded into the 40.00-60.00 range, which indicates a bullish reversal. A break into the bullish range of 60.00-80.00 will trigger the bullish momentum.
New Zealand dollar against US dollar decreased by 1.07% yesterday

The NZD/USD Pair Is Expected To Continue Its Downside Movement

TeleTrade Comments TeleTrade Comments 21.02.2023 09:25
NZD/USD has slipped firmly below 0.6240 as the risk-off market mood has strengthened. Anxiety among investors is soaring ahead of the opening of the US markets after an extended weekend. A promise of a cyclone relief package from NZ Hipkins could propel inflationary pressures further. The NZD/USD pair has slipped below 0.6240 in the early European session. The Kiwi asset is expected to continue its downside movement as anxiety among investors is soaring ahead of the opening of the US markets after an extended weekend. S&P500 futures are showing losses as the US markets are yet to show the impact of US-China tensions. Apart from that, missile launching by North Korea on weekend near Japan’s EEC region event will also be discounted by the market participants. The struggle of the US Dollar Index (DXY) for pushing its auction above 103.70 is intact, at the time of writing. Meanwhile, the 10-year US Treasury yields have trimmed some gains and have slipped to near 3.85%. Investors’ entire focus will remain on the interest rate decision by the Reserve Bank of New Zealand (RBNZ), which is scheduled for Wednesday. February’s monetary policy of RBNZ is extremely important as New Zealand Prime Minister (PM) Chris Hipkins has promised a cyclone relief package of NZ$300 million ($187.08 million). In times, when the New Zealand economy is struggling to tame galloping inflation, the fresh release of the helicopter money carries the potential of propelling inflationary pressures further. The situation is extremely troublesome for RBNZ Governor Adrian Orr as more rates could impact the economic activities ahead. As per the consensus, the RBNZ is expected to announce a hike in the Official Cash Rate (OCR) by 50 basis points (bps) to 4.75%.  
Bank of England is expected to hike the rate by 25bp. Kelvin Wong talks Euro against British pound

Bears Of The EUR/GBP Pair Keep The Reins For The Third Day

TeleTrade Comments TeleTrade Comments 21.02.2023 09:34
EUR/GBP retreats from intraday high to extend Friday’s U-turn from two-week high. Full market’s return, cautious mood probe Euro bulls ahead of Eurozone ZEW Sentiment data, monthly PMI. The British Pound braces for UK PMI amid mixed concerns surrounding Brexit. EUR/GBP holds lower ground around 0.8870, after recently reversing from the daily top, as bears keep the reins for the third consecutive day to early Tuesday in Europe. In doing so, the cross-currency pair portrays the broad retreat in the Euro, as well as the recovery in the British Pound (GBP), ahead of the key data for the bloc and Britain. That said, a fresh run-up in the US Treasury bond yields, and the fears emanating from China, North Korea and Russia seemed to have underpinned the market’s rush for the US Dollar as traders from Washington return after a long weekend. As a result, the Euro witnesses a pullback in the demand due to its contrast with the greenback. It’s worth noting that the recent statistics from the Euro area have been firmer while those from the UK have been mixed, which in turn keeps the pair buyers hopeful ahead of the key numbers. Additionally teasing the EUR/GBP buyers are the hawkish comments from the European Central Bank (ECB) official. That said, ECB governing council member and Finnish central bank Chief Olli Rehn recently said, per Reuters, “ECB should keep raising interest rates beyond March and the rate peak, which should be stuck to for some time, could be reached over the summer.” On the same line, upbeat prints of Eurozone Consumer Confidence matched the market forecasts of -19 versus -20.9 prior. Further, Germany's Bundesbank released its monthly report and noted that the economic outlook was somewhat brighter with the short-term outlook turning more favorable than seen just a few months ago. Alternatively, fears of no imminent Brexit deal should have weighed on the British Pound (GBP) as the UK’s Conservative Members of the Parliament (MPs) dislike the deal with the European Union (EU) on Northern Ireland (NI). Some of them are threatening to resign, per The Times, amid fears of the compromised deal. The news also mentioned that UK Prime Minister Rishi Sunak spent notable time in the House of Commons to convince the MPs that no deal had yet been agreed and talks were continuing. “He was told he ‘hasn’t got a hope’ of succeeding without the support of the Democratic Unionist Party,” per The Times. Amid these plays, stock futures are down and the Treasury bond yields, as well as the US Dollar, are firmer, which in turn weigh on the Euro amid a sluggish start to the key day. Looking forward, Eurozone ZEW sentiment figures for February will precede the preliminary readings of the bloc’s, as well as the UK’s, Purchasing Managers Index (PMI) data for the said month to direct short-term pair moves. Given the cross-currency pair’s latest retreat, backed by the market speculations that the Euro rally is about to end amid the European Central Bank’s (ECB) inability to offer higher rates, the sellers may keep the reins unless the scheduled data mark any surprise. Technical analysis EUR/GBP fades bounce off the 50-day Exponential Moving Average (EMA), around 0.8815 by the press time, which in turn joins bearish MACD signals and failure to cross the 0.8915-10 horizontal hurdle to keep bears hopeful.
Biden Declared Unwavering Support For Ukraine, The Reserve Bank Of New Zealand May Go Back To Raising Rates

Biden Declared Unwavering Support For Ukraine, The Reserve Bank Of New Zealand May Go Back To Raising Rates

Saxo Bank Saxo Bank 21.02.2023 10:10
  Summary:  Markets are quiet as we are now on the other side of a three day weekend in the US and as geopolitical tensions and elevated yields provide a nervous backdrop. Hong Kong’s HSI index is pushing on the lowest levels since the first week of the year. The focus in Europe this morning is on preliminary PMI’s for February as the Eurozone bloc’s economy may show signs of slight expansion in the month. What is our trading focus? US equities (US500.I and USNAS100.I): skating on thin ice US equity futures are picking up from Friday’s weak session after yesterday’s US holiday with S&P 500 futures trading lower at around the 4,066 level putting US equities into negative territory for the month. Today’s key event is naturally the annual speech from Putin as it could ignite fresh geopolitical risks as described in yesterday’s equity note. In the US session earnings from Walmart and Home Depot can also impact sentiment as both companies are expected to show weak revenue growth. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) The Hang Seng Index slipped 1.3% amid signs that Chinese eCommerce platforms are heating up competition for business. JD.com (09618:xhkg) plunged nearly 8% following launching a subsidy campaign to compete with rivals. Alibaba (09988:xhkg), Tencent (00700:xhkg), and Meituan (03690:xhkg) dropped more than 3%. HSBC (00005:xhgk) pared initial gains from an earnings beat and special dividend and slid 1.6%. Meanwhile, Hang Seng Bank (00011:xhkg) rose 2.9% despite an earnings miss due to a jump in loan loss provision for mainland property loans. In mainland China, the CSI300 is flat. Resource names, such as non-ferrous metal, coal, and steel continued to do well, as did the auto stocks. The consumer and AI generated content space declined. FX: Awaiting USD direction after bearish reversal on Friday and long US weekend As US treasury yields rolled over on Friday, the US dollar did likewise and posted a modest bearish reversal on the same day it was trying to break free of resistance. Given the nervous geopolitical backdrop, headline risk is paramount in coming days as we await further resolution in the USD direction. Overnight, hawkish RBA minutes did little for the Aussie, given downbeat markets in Asia,  while the RBNZ meeting tonight could shake the kiwi in either direction, given the uncertainty of the RBNZ’s stance in the wake of disastrous floods in parts of the country, although NZ yields remain near the highs since early January. Crude oil (CLH3 & LCOJ3) fails to hold onto Monday’s gains Brent crude oil futures dropped back to $83 during Asian hours, thereby reversing Monday’s gain in response to fresh dollar strength and concerns about the near-term direction of US interest rates, and despite sustained hopes of a recovery in China’s activity levels, especially following a fresh liquidity injection by the PBoC last Friday. Geopolitical developments remain a worry but so far, the positive impact on prices have been very limited.  Overall, the oil market remains rangebound, in Brent between $80 and $89 and WTI between $73 and $82, as the market weighs the impact of rising demand in China and India versus a potential slowdown elsewhere. Copper receives a boost from BHP outlook Despite the hawkish tilt in Fed expectations which left other metals on the defensive, copper has managed a strong recovery as the key $4 area continued to provide support. BHP, the world’s biggest miner reported its half-year result today, and according to its CEO the company expects domestic demand in China and India “to provide stabilizing counterweights to the ongoing slowdown in global trade and in the economies of the US, Japan and Europe,”. Also supporting prices are continued threats to supply in Peru, Panama and Zambia. . Some support also coming through via rising aluminum prices after smelters in China’s Yunnan province cut capacity due to energy shortages following a period of weak hydro generation. Gold (XAUUSD) focus on dollar and interest rate trajectory Gold traded softer overnight in response to fresh dollar and yield strength following Monday’s US closed session. The market remains on the defensive after recent US economic data strength and hawkish comments from Fed policymakers led to market to adjust higher the trajectory of US Fed funds rate. Apart from a very uncertain geopolitical situation, the market will be focusing on minutes from the Fed’s last meeting on Wednesday as well as personal spending on Friday. Holdings in ETF’s meanwhile dropped again on Monday with the 3.1 tons reduction to 2882 tons, a three-year low, bringing this year's net sales to 34 tons or 1.1 million ounces. In other words, gold for now needs continued demand from central banks to provide a floor under the market. Support at $1820 followed by $1790. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) after Friday reversal. 2-year auction today US Treasury yields reversed sharply on Friday after posting new local highs. A heavy schedule of auctions lies ahead this week, starting with an auction of 2-year notes today after the benchmark traded within 10 basis points of the 15-year high of 4.80% posted last November. A 5-year auction will follow tomorrow and 7-year on Thursday.  The 10-year benchmark yield tested above the December high of 3.90% on Friday, but trades 3.85% this morning. The US data highlight this week is Friday’s January PCE inflation data. What is going on? The cost of sea freight is back to pre-Covid levels The cost of sea freight is now back to pre-Covid levels, which is positive news on the inflation front. The drop in prices is both explained by cyclical (1) and structural (2) factors. The U.S. consumer is very resilient, as shown by the recent release of the U.S. retail sales. But this is not the case in other countries. The rise in the cost of living is causing a drop in global consumption (1). In addition, the sea freight market is facing a surplus of containers. And this will get worse in the months to come. The number of container ships under construction represents nearly 30 % of the fleet that is currently operational. That’s three times more than normal. Companies in the sector have misjudged the evolution of global demand in the post-Covid period. Wrongly, they anticipated it would remain unchanged or it would even increase. The fall in prices is likely to continue all this year and perhaps partially in 2024. The market consensus expects a drop in transported volumes of around 4 % this year. Downshift in RBNZ’s rate hike trajectory could signal NZD weakness The Reserve Bank of New Zealand meets on Wednesday, 22 February and consensus expects a return to 50bps rate hikes after a 75bps in November when even the possibility of a 100bps was debated. Economic data has been soft since the last meeting, with 2-year inflation expectations easing and unemployment rate seeing a slight uptick. However, Cyclone Gabrielle has brought fresh risks of inflation pressures in the short-term. Calls for no rate hikes have also picked up although Finance Minister Robertson was out calling for the RBNZ to address inflation yesterday. Still, risks of further kiwi weakness loom large after NZD has weakened 1.7% against the USD so far this year. If RBNZ signals that the peak for the current rate hike cycle is near, the 38.2% retracement of NZDUSD uptrend from the October low at 0.6146 could be challenged. AUDNZD broke above 1.1030 and its 200-day moving average yesterday, posting a new 3-month high. BHP guides for a pick up in metals and readies its balance sheet to become a copper giant BHP - the world’s biggest miner saw profits in the six months to December 2022 decline by more than expected but sees the ongoing price recovery extend into the second half year and beyond as it sees demand picking up in China, but also in India - and this offsetting the slowdown in trade with the US, Japan and Europe. All in all, it also guided for mining production costs to be markedly higher than before the Covid-19 pandemic – amid higher energy, labour and other input costs. Its HY results were impacted by lower realised prices in copper, iron ore and coal across the last six months of 2022. Wet weather also impacted on its coal business’ production and pushed up unit costs – and there were difficulties in securing enough staff. This resulted in underlying attributable profit falling to $6.6 billion - vs the $6.96 billion expected by consensus (from continuing operations). BHP’s interim dividend was trimmed to $0.90 per share – down from last year’s record $1.50 per share. Still BHP’s payout ratio is 69% and that’s BHP’s 5th highest dividend on record. We also believe the lower dividend payout reflects that BHP is readying itself for the $9.6 billion takeover of Oz Minerals which, if approved, will occur in May. What are we watching next? Putin speech today. China said to hope broker peace deal over Ukraine after US warns China on lethal aid to Russia Biden made a surprise visit to Ukraine  yesterday and met with President Volodymyr Zelenskiy, declaring "unwavering support" as Russia's invasion nears the one-year mark. China is said to be promoting a peace plan for Ukraine as China’s top diplomat will arrive in Moscow today, but German and US authorities are already declaring themselves sceptical on China’s intentions and accuse it of taking sides. European source familiar with the plan (cited by Bloomberg, the officials asked not to be identified) said it would likely include a call for a cease-fire and the cessation of arms deliveries to Ukraine. Putin is set to make a speech today in Moscow, with added interest given the presence of a top Chinese official. In Saxo’s view, the playbook for the week should be risk-off given the possibility of any ugly turns in geopolitics. That would mean long JPY and USD, long commodities, long defense stocks and lowered exposure or hedging of risky assets. Once we are past this week with hopefully no further escalations, focus will shift back to inflation concerns and driving Fed rate cut expectations further into 2024. Earnings to watch Today’s US earnings focus is Walmart and Home Depot with analysts expecting Walmart to report revenue growth of 4.4% y/y and EPS $1.52 down 1% y/y as volume of goods sold is expected to be under pressure. Analysts expect Home Depot to report revenue growth of 0.6% y/y and EPS of $3.27 up 1.8% y/y reflecting lower volume across US home improvement industry. Tuesday: Teck Resources, Gapgemini, Engie, HSBC, Walmart, Home Depot, Medtronic, Palo Alto Networks Wednesday: Rio Tinto, Genmab, Danone, Lloyds Banking Group, Iberdrola, Nvidia, TJX, Stellantis, Baidu, eBay Thursday: EssilorLuxottica, Deutsche Telekom, Munich Re, Kuaishou Technology, Eni, Anglo American, BAE Systems Friday: BASF, Monster Beverage Economic calendar highlights for today (times GMT) 0815-0900 – Eurozone Flash Feb. Manufacturing and Services PMI 0930 – UK Flash Feb. Manufacturing and Services PMI 1000 – Germany Feb. ZEW Survey 1330 – Canada Dec. Retail Sales 1330 – Canada Jan. CPI 1445 – US Flash Feb. Manufacturing and Services PMI 1500 – US Jan. Existing Home Sales 1800 – US 2-year Auction 0030 – Australia Q4 Wage Price Index 0100 – RBNZ Official Cash Rate Source: Financial Markets Today: Quick Take – February 21, 2023 | Saxo Group (home.saxo)
Unraveling UK Inflation: The Bank of England's Next Move

The Pound Gained After The Publication Of PMI Reports, Euro Is Below 1.07, USD/JPY Pair Is Above 134.50

Kamila Szypuła Kamila Szypuła 21.02.2023 12:54
The dollar was parked below recent peaks on Tuesday, as a three-week rally faded and traders waited on economic data to figure out whether it's warranted to push the dollar up any further. Strong U.S. labour data and sticky inflation have raised U.S. rate expectations and supported the dollar's rally this month - Tuesday's European and U.S. manufacturing data and Friday's core PCE price index will guide the next steps. After an unannounced visit to Kiev, US President Joe Biden will visit Poland on Tuesday. Biden will reportedly talk about strengthening Poland's security by increasing NATO's presence in the country. USD/JPY USD/JPY regains positive traction on Tuesday and maintains its bidding tone throughout the first half of the European session. The pair is gradually approaching the level of 135.00. The yen pair at the time of writing is close to 134.70. The services PMI in Japan turned out to be much better than expected and from the previous reading. The manufacturing PMI was well below expectations, falling month-on-month. On the policy front, the European Central Bank has continued to aggressively tighten policy, despite signs that inflationary pressures may have peaked. The European Central Bank raised interest rates by 50 basis points at its February meeting to the highest level since late 2008, marking another hike of the same magnitude next month and reaffirming its commitment to fighting inflation. Source: investing.com EUR/USD The euro stayed below USD 1.07, oscillating around the weakest level since January 6. In the eurozone and Germany, the manufacturing PMIs turned out to be weak, below expected levels. Services PMI rose. And also ZEW economic sentiment showed an improvement in sentiment. Source: investing.com Read next: Baltic Pipe Is Alternative Energy Source For Poland| FXMAG.COM GBP/USD The data on public finances in the UK released this morning exceeded estimates. The pound strengthened on Tuesday after data showed an unexpected rebound in UK business activity, suggesting the economy could avoid a deep recession. The pound managed to break through 1.2100 and is currently trading just above. UK data showed private sector business activity surged in early February with the Composite PMI rising to 53 from 48.5, providing a boost to sterling. As the UK private sector is resilient to strong inflation, the Bank of England is likely to continue to raise its key rate without worrying about a deep recession. British Foreign Secretary James Cleverly said late Monday evening that they would hold further talks with the EU over the Northern Ireland Protocol in the coming days. Cleverly is also reportedly planning to address Tory MPs on Wednesday to give an update on the negotiations. Source: investing.com AUD/USD The minutes of the RBA meeting revealed most of what was already known to the market. The outlook for the Australian economy has many positive aspects, but a potential concern is that the CPI outperforms both PPI and wage inflation. The year-on-year CPI by the end of 2023 was 7.8%, and the PPI in the same period was 5.8%. Tomorrow the Australian Bureau of Statistics (ABS) will release the Wage Price Index. The AUD/USD pair came under renewed selling pressure on Tuesday and reversed much of the positive move from the previous day. The pair remains below the 0.6900 level for the first half of the European session. The Aussie pair is above 0.6880. Source: investing.com, finance.yahoo.com
RBNZ preview: Fiscal spending argues for a hawkish 25bp hike

The RBNZ Is Widely Expected To Deliver A 50-Bp Increase

Kenny Fisher Kenny Fisher 21.02.2023 14:17
The New Zealand dollar is slightly lower on Tuesday. NZD/USD declined over 0.50% earlier but has pared most of these losses and is trading at 0.6240, down 0.20%. RBNZ expected to hike by 50 bp The Reserve Bank of New Zealand will meet on Wednesday, its first policy meeting this year. The Bank last met in November, at which time it hiked rates by a record 75 basis points, bringing the cash rate to 4.25%. There had been expectations of another 75-bp increase at tomorrow’s meeting, but Cyclone Gabrielle has thrown a monkey wrench into the decision. The cyclone, which caused damage in the billions of dollars, has raised concerns about the economy and the RBNZ is widely expected to lower gears and deliver a 50-bp increase. In the short term, the major disruptions from the cyclone are projected to raise inflation, which is already running at 7.2%, its highest level since 1990. Aside from Gabrielle, there are signs that inflation may have peaked. Inflation Expectations eased in Q1 to 3.3%, down from 3.6% in Q4 2022. Inflation hit 7.2% in the final quarter of 2022, lower than the RBNZ’s forecast of 7.5%. The RBNZ still has its foot on the brake, but if inflation continues to head lower, we can expect the Bank to ease up on the pace of rates in the coming meetings. In the US, we’ll get a look at the February PMI reports. Recent US numbers have beaten expectations, including employment growth, retail sales, and inflation. This is not a complete picture of the economy, as the services and manufacturing sectors have been in contraction territory for months, with readings below the 50.0 level. This negative trend is expected to continue, with Manufacturing PMI expected at 47.3 and Services PMI at 47.2 points. Read next: Baltic Pipe Is Alternative Energy Source For Poland| FXMAG.COM NZD/USD Technical There is resistance at 0.6275 and 0.6357 0.6162 and 0.6080 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Russia will suspend participation with the new START treaty and that they would test nuclear weapons if the US does it first

Russia will suspend participation with the new START treaty and that they would test nuclear weapons if the US does it first

Ed Moya Ed Moya 21.02.2023 14:25
US stocks are declining after retail earnings suggest margin worries are here and it will only get worse as the Fed is likely to deliver more tightening into early summer. Treasury yields are surging here as a tight labor market will force the Fed to do more tightening.  Retailer earnings are suggesting it is going to be a tough year ahead and that should keep the pressure on stocks.  Geopolitics Russia’s Vladimir Putin’s State of the Union speech suspended participation in a key nuclear arms pact with the US.  Putin said, Russia will suspend participation with the new START treaty and that they would test nuclear weapons if the US does it first. Putin’s speech comes three days before the one-year mark of the Russian invasion of Ukraine. He added that Russia will push farther if longer-range arms are supplied. Ukrainian officials have voiced their concerns that they expect the Russians to increase their offensive.  China China is also pushing back against calls that say Taiwan is next.  China Foreign Minister Qin Gang said, “We urge certain countries to immediately stop fueling the fire, stop shifting blame to China and stop touting Ukraine today, Taiwan tomorrow.” China’s economic outlook if fragile right now and they are trying to avoid any major obstacles as their reopening from COVID continues. Home Depot Home Depot shares tumbled after a tight labor market is making them invest an additional ~$1 billion in annualized compensation for frontline, hourly associates. Wall Street initially could only focus on the added expenses and not the mixed earnings and dividend boost.  While most companies are announcing cost-saving measures, Home Depot is in position that will require them to spend more.  The EPS beat of 3 cents and slight revenue miss of $35.83 billion was accompanied by comparable sales of -0.3%, not as bad as the consensus estimate of -0.87%.  The world’s largest home improvement retailer is going to have a margin problem over the couple of quarters and that could get uglier if the housing market does not bottom out soon.  Walmart Walmart shares tumbled despite a top and bottom line beat as their EPS guidance fell short of the analyst estimates.  Walmart’s earnings slides noted that “general merchandise sales reflected softness in discretionary categories including toys, electronics, home, and apparel.” Walmart’s poor outlook after a strong holiday season is having many investors abandon ship here as rough waters are clearly ahead.  Walmart had the largest sales volume in its history in December. Oil Crude prices are struggling as global growth concerns return after soft European manufacturing activity data is accompanied with a surge in global bond yields. Central banks globally are about to take policy into even more restrictive levels and that is countering China’s reopening momentum. WTI crude is finding a home between the mid-$70s and the $80 a barrel level.      Read next: The Pound Gained After The Publication Of PMI Reports, Euro Is Below 1.07, USD/JPY Pair Is Above 134.50| FXMAG.COM Gold/FX Gold prices are weakening as investors await the Fed Minutes that could confirm the bank has more work to do. The dollar is getting a bid here as more traders start to price in 75 basis points in more tightening by the Fed. If the bond market selloff gets uglier, gold might soften more, but it probably won’t drop as much as equities.  Rising geopolitical risks will likely drive some flows towards bullion and Wall Street is getting close to pricing in peak Fed tightening.  Bitcoin Bitcoin traders appear to be ignoring a laundry list of bearish macro drivers that include; a return of the stronger dollar as the bond market rally returns, downward pressure on stocks as investors price in more Fed rate hikes, and on worries that stablecoin regulation could put further pressure on cryptos.  It appears that Bitcoin’s correlation with most risky assets is changing.  The crypto winter that saw prices collapse from $68,911 to $15,485 appears to have priced in enough of the bad news.  Bitcoin is still respecting the key $25,500 level, but a break could open the door for momentum traders to target a bigger move higher. Initial resistance would come from the $28,000 level, but most traders may have their eyes for the psychological $30,000 level.  This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

The Reserve Bank of Australia keeps getting in the way of the Australian dollar

Kenny Fisher Kenny Fisher 21.02.2023 14:45
The Australian dollar is in negative territory on Tuesday. In European trade, AUD/USD is trading at 0.6876, down 0.50%. RBA minutes indicate concern over inflation The Reserve Bank of Australia keeps getting in the way of the Australian dollar. RBA Governor Lowe appeared before a parliamentary committee last Wednesday and confirmed that further rate hikes were on the way as inflation was still unacceptably high. The Aussie responded by dropping 1.1%. The RBA minutes were released today and members expressed concern at the upside risk to inflation, noting that there was “more breadth and persistence” in inflation. The hawkish tone of the minutes has boosted rate-hike bets but the Australian dollar remains under pressure over concerns that the RBA is having trouble getting a handle on inflation, despite its aggressive rate-tightening cycle. Again, the Aussie has responded with losses. How much higher will interest rates go? That will depend to a large extent on upcoming data, starting with Wednesday’s Wage Price Index for Q4. Wages are expected to have climbed 3.5% y/y in Q4, up from 3.1% and the highest level since September 2012. Wages are an important driver of inflation and higher wages will make it more difficult for the Bank to curb inflation. The RBA minutes also indicated that members debated whether to raise rates by 25 or 50 basis points. Ultimately, the RBA opted for a modest 25-bp increase, which brought the cash rate to 3.35%. The money markets are projecting a terminal cash rate of 4.25% by August, which means that the RBA will likely be busy in the coming months. We’ll also hear from the Federal Reserve on Wednesday, with the release of the minutes from the February meeting. The Fed didn’t have any surprises and raised rates by 25 basis points. The markets will be looking to see how close the Fed was to hiking by 50 basis points. If the rate decision was a close call, the US dollar could continue to rally. Read next: The Pound Gained After The Publication Of PMI Reports, Euro Is Below 1.07, USD/JPY Pair Is Above 134.50| FXMAG.COM AUD/USD Technical AUD/USD is testing support at 0.6907. Below, there is support at 0.6784 There is resistance at 0.7001 and 0.7124 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The EUR/USD Pair Chance For The Further Downside Movement

The EUR/USD pair is showing signs of strength

InstaForex Analysis InstaForex Analysis 22.02.2023 08:00
Overview : The EUR/USD pair continues to move downwards from the level of 1.0733. Yesterday, the pair dropped from the level of 1.0733 (this level of 1.0733 coincides with the double top - 38.2% of Fibonacci retracement levels) to the bottom around 1.0649. Today, the first resistance level is seen at 1.0712 followed by 1.0733 (the daily pivot point), while daily support 1 is found at 1.0613. Also, the level of 1.0733 represents a weekly pivot point for that it is acting as major resistance/support this week. Amid the previous events, the pair is still in a downtrend, because the EUR/USD pair is trading in a bearish trend from the new resistance line of 1.0785 towards the first support level at 1.0670 in order to test it. If the pair succeeds to pass through the level of 1.0670, the market will indicate a bearish opportunity below the level of 1.0670. So, we expect the price to set below the strong (first) support at the level of 1.0670; because the price is in a bearish channel now. The RSI starts signaling a downward trend. Consequently, the market is likely to show signs of a bearish trend. If the trend breaks the major support at 1.0670, the pair will move downwards continuing the bearish trend development to the level 1.0623 in order to test the daily support 2. The EUR/USD pair is showing signs of strength following a breakout of the lowest level of 1.0550. The market is indicating a bearish opportunity above the above-mentioned support levels, for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. However, if a breakout happens at the resistance level of 1.0733, then this scenario may be invalidated.   Relevance up to 00:00 2023-02-23 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313559
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange, 2689 Of Securities Fell In Price

InstaForex Analysis InstaForex Analysis 22.02.2023 08:02
Experts note that against the backdrop of the latest macroeconomic statistics for the country, in particular on the labor market and inflation, traders rejected the expectations of the Fed's policy easing, which have recently contributed to the rally in the markets. The next meeting of the US Federal Reserve will be held on March 21-22. According to CME Group, 76% of analysts expect the regulator to raise the discount rate by 25 basis points, to 4.75-5%. It also follows from these data that the proportion of those who expect a 50 basis point increase has recently increased. At the close in the New York Stock Exchange, the Dow Jones fell 2.06% to a one-month low, the S&P 500 fell 2.00%, and the NASDAQ Composite fell 2.50%. Dow Jones Walmart Inc was the top performer among the components of the Dow Jones index today, up 0.89 points (0.61%) to close at 147.33. Procter & Gamble Company fell 0.10 points or 0.07% to close at 139.91. The Travelers Companies Inc shed 0.50 points or 0.27% to close at 185.25. The least gainers were Home Depot Inc, which shed 22.45 points or 7.06% to end the session at 295.50. Intel Corporation was up 5.61% or 1.55 points to close at 26.06, while 3M Company was down 3.31% or 3.74 points to close at 109.25 . S&P 500  The leading gainers among the S&P 500 index components in today's trading were General Mills Inc, which rose 4.42% to 80.16, Organon & Co, which gained 3.94% to close at 27.05, and also shares of Molson Coors Brewing Co Class B, which rose 3.13% to end the session at 53.65. The least gainers were Generac Holdings Inc, which shed 8.72% to close at 115.72. Shares of DISH Network Corporation shed 8.62% to end the session at 12.93. Home Depot Inc lost 7.06% to 295.50. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Atlas Lithium Corp, which rose 51.52% to hit 10.94, Meihua International Medical Technologies Co Ltd, which gained 49.94% to close at 39. 00, as well as Arbe Robotics Ltd, which rose 47.13% to end the session at 6.40. The least gainers were CVRx Inc, which shed 58.84% to close at 7.08. Shares of Aileron Therapeutics Inc lost 37.77% to end the session at 1.46. Quotes of TC BioPharm Holdings PLC decreased in price by 32.62% to 5.02. Numbers On the New York Stock Exchange, the number of securities that fell in price (2689) exceeded the number of those that closed in positive territory (382), while quotes of 57 shares remained virtually unchanged. On the NASDAQ stock exchange, 3,017 companies fell in price, 697 rose, and 149 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 7.72% to 22.87, hitting a new monthly high. Gold Gold futures for April delivery lost 0.35%, or 6.45, to hit $1.00 a troy ounce. In other commodities, WTI April futures fell 0.50%, or 0.38, to $76.17 a barrel. Brent crude for April delivery fell 1.47%, or 1.24, to $82.83 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged at 0.34% to 1.06, while USD/JPY advanced 0.56% to hit 134.99. Futures on the USD index rose 0.34% to 104.14.   Relevance up to 03:00 2023-02-23 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313561
InstaForex's Irina Manzenko talks British pound amid latest events

The GBP/USD Pair Is Expected Another Consolidation

InstaForex Analysis InstaForex Analysis 22.02.2023 08:05
GBP/USD rose by 0.59% (70 pips) on Tuesday despite the 0.31% increase in the dollar index. The reason was the latest business activity data in the UK, which came out better than expected. Manufacturing PMI reportedly increased from 47.0 to 49.2 in February, while Service PMI was up from 48.7 to 53.3. If US data does not change the market sentiment until the end of the week, pound can grow up to 1.2300, which is also where the MACD line is located in the daily (D1) timeframe. But to achieve this, there should be a consolidation above the nearest resistance level of 1.2155. There is a high chance (65%) of seeing this scenario as the Marlin oscillator is already up. On the four-hour (H4) timeframe, there was a reversal from the support of the MACD line, which is also where the low of February 15 was located. It consolidated above the balance line (red), indicating that the mood of speculators is to buy. Expect another consolidation above 1.2155.   Relevance up to 03:00 2023-02-23 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335742
Australian dollar against US dollar - "It seems that the currency will soon hit a price above 0.68"

The AUD/USD Pair Consolidated Under The Indicator Lines

InstaForex Analysis InstaForex Analysis 22.02.2023 08:09
AUD/USD closed below the support level of 0.6873, which is what it has been unable to do since January 10. It continued to move down this morning. It seems that the target is the nearest support line at 0.6730 as the Marlin oscillator keeps on sliding down. Arriving in the oversold zone is possible. On the four-hour (H4) timeframe, the pair consolidated under the indicator lines and the resistance level of 0.6873. The Marlin oscillator is down, which suggests that the pair could reach the target level of 0.6730 soon. Relevance up to 03:00 2023-02-23 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335740
Forex: Euro against US dollar - forecast on April 24th, 2023

The EUR/USD Pair May Now Make An Attempt To Rise To The Target Range

InstaForex Analysis InstaForex Analysis 22.02.2023 08:12
EUR/USD fell by 35 pips on Tuesday, breaking through the support level of 1.0660. However, the decline is short-lived as the pair is already trying to get back above 1.0660 during today's Asian session. This is already the second unsuccessful attempt to go under the support level. The first one was on February 17. Under the new circumstances, the pair may now make an attempt to rise to the target range of 1.0758/87. If the Marlin oscillator continues to move sideways or go down, the pair will not be able to climb up. After all, a consolidation has been going on since February 6, and a breakout is most likely to occur downward. If that happens, the pair will decline below 1.0595 and go further towards 1.0470. On the four-hour (H4) timeframe, the pair is under the indicator lines and the Marlin oscillator is moving sideways. Wait for a consolidation above or below 1.0660 and watch for further developments. Relevance up to 03:00 2023-02-23 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335744
RBNZ preview: Fiscal spending argues for a hawkish 25bp hike

Analysis Of The NZD/USD: The NZD/USD Has The Potential To Fall

InstaForex Analysis InstaForex Analysis 22.02.2023 08:18
With the appearance of the Double Top pattern and deviations between price movements with the Awesome Oscillator indicator and the DMI indicator (-) which is above and the Moving Average which gives a negative cross, it gives a hint that in the near future, Kiwi has the potential to depreciate downwards to break below the 0.6188 level if If this level is successfully broken down, the NZD/USD has the potential to fall to the level of 0.5738 provided that on the way to these targets there is no upward correction that exceeds the 0.6387 level because if this level is successfully exceeded then all of the downside scenarios described previously will be become invalid and automatically cancel by itself. (Disclaimer)   Relevance up to 04:00 2023-02-27 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/119975
Small factors combine to pressure credit

Good Germany's Data On Inflation Will Allow Euro To Rise

Jakub Novak Jakub Novak 22.02.2023 08:34
Analysis of transactions and tips for trading EUR/USD The test of 1.0665 occurred when the MACD line was just starting to move downwards, which was a good signal to sell. There was no strong price decrease during the first test, but on the second the pair managed to fall down by 20 pips. No other entry points were achieved for the rest of the day. PMI data for the eurozone was ignored by markets even though the figures were better than expected. They only reacted with similar reports from the US, prompting a rise in USD. Key reports for today are Germany's data on inflation, as well as reports on business conditions, present situation and economic expectations from the IFO. Good numbers will allow EUR to rise and get out of the pressure from sellers. In the afternoon, there is only the Fed's minutes, which is unlikely to have a strong impact on markets as much has already changed since the meeting. For long positions: Buy euro when the quote reaches 1.0681 (green line on the chart) and take profit at the price of 1.0722. Growth will occur if economic data from Germany exceeds expectations. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0650, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0681 and 1.0722. For short positions: Sell euro when the quote reaches 1.0650 (red line on the chart) and take profit at the price of 1.0616. Pressure may return if there is no reaction to IFO data. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0681, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0650 and 1.0616. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader Relevance up to 07:00 2023-02-23 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335762
The GBP/USD Players Have All Chances To Continue The Bullish Scenario

The GBP/USD Players Have All Chances To Continue The Bullish Scenario

Jakub Novak Jakub Novak 22.02.2023 08:41
Analysis of transactions and tips for trading GBP/USD The test of 1.2013 occurred when the MACD line was just starting to move below zero, which was a pretty good signal to sell. However, the decline was only brief as the pair rose again and updated 1.2051. This time, the MACD had just started to move above zero, which was a good signal to buy. Resultantly, the pair gained as much as 50 pips. Selling on the rebound from 1.2093 led to losses. GBP/USD saw gains on Tuesday, thanks to the strong PMI data on the UK. However, the increase was halted in the afternoon as similar and quite good reports in the US prompted a rise in dollar demand. Nevertheless, there are no UK statistics scheduled to be released today, so market players have all chances to continue the bullish scenario. The Fed's minutes is also the only important thing in the afternoon, and it is unlikely to have any strong impact as much has already changed since the FOMC meeting. For long positions: Buy pound when the quote reaches 1.2119 (green line on the chart) and take profit at the price of 1.2170 (thicker green line on the chart). Growth will be possible as there is a new bullish trend. However, when buying, make sure that the MACD line is above zero or is starting to rise from it. Pound can be bought at 1.2079, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2119 and 1.2170. For short positions: Sell pound when the quote reaches 1.2079 (red line on the chart) and take profit at the price of 1.2035. Pressure will return if there is no activity at the weekly highs. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2119, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2079 and 1.2035. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader. Relevance up to 07:00 2023-02-23 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335764
Impact of Declining Confidence: Italian Business Sentiment in August

FX Daily: Geopolitical risk strikes back

ING Economics ING Economics 22.02.2023 09:06
We remain doubtful that the dollar has further to run on the Fed story, and today’s FOMC minutes may struggle to match the recent hawkish Fedspeak. However, a resurgence in geopolitical risk means that defensive USD positions may linger. Elsewhere, the RBNZ 50bp hike was paired with a hawkish tone, but the risk of undershooting rate projections is high In a speech on Tuesday, Putin said Russia would pull out of its last remaining nuclear treaty with the US USD: Helped by geopolitical uncertainty We recently argued that the dollar rally would run out of steam, as the hawkish repricing of Federal Reserve rate hikes has likely peaked, and that external factors would be a more likely cause of further USD appreciation. This has indeed been the case since market action resumed after Monday’s US holiday, as a return of geopolitical risk weighed on global risk assets and buoyed the safe-haven dollar. The focus is now on Russia’s next moves on the Ukraine front ahead of a potentially turbulent anniversary of the invasion, at a time when China – a key ally for Russia – has seen a rapid deterioration in its relationship with the US. An important point is that geopolitical themes had a clear channel with assets through energy prices, and the drop in gas prices observed over the winter has broken that link. This means both that there is room for more geopolitical risk to be priced in, but also that impact should not be as direct and forceful as last year unless energy prices materially bounce back. On other fronts, markets will watch with great interest the content of the FOMC minutes today. We must remember that the 1 February meeting was held before the strong jobs and inflation figures, and crucially before the hawkish repricing in Fed expectations. With markets pricing in close to a 5.50% peak rate, we would essentially need to see evidence that multiple members voiced the desire to hike by 50bp at the start of February. That would back the cause for a 50bp move in March, and likely lift the dollar. However, the bar is set quite high after the recent hawkish comments, and we don’t see a very high chance of a hawkish surprise today. The current instability in the geopolitical picture warrants caution and a bit more support to the dollar may be on the cards, even though we see a good chance that the USD upside correction has peaked. Francesco Pesole EUR: Rebound delayed? Yesterday’s PMIs clearly pointed to an improving picture in the eurozone, and we had previously signalled how the data could have encouraged some to re-enter strategic medium-term euro longs. However, the resurgence of geopolitical risk in Russia/Ukraine is inevitably curbing appetite in the common currency: markets may need to get some reassurance on that before jumping back into EUR/USD longs. We think that, at this stage, support around 1.0640-1.0660 is enough of an encouraging sign for EUR/USD given the strength of the dollar against other pro-cyclical currencies. A hawkish surprise in the FOMC minutes and/or more geopolitical risk being priced in would likely put the 1.0600 support at risk. But unless those two risks materialise, a good Ifo reading in Germany today and stabilisation in sentiment may actually start to favour a move back to 1.0700-1.0750 before the weekend. Francesco Pesole GBP: Enjoying good momentum The pound has continued to display very good resilience despite a re-strengthening in the dollar, this time thanks to very strong PMI readings yesterday. A big (and unexpected) jump from 48.5 into expansionary territory (53.0) in the composite gauge is favouring a re-rating of growth expectations in the UK, which is ultimately translating into rising bets on Bank of England tightening – the biggest driver of GBP performance of late. The OIS pricing for the BoE peak rate has jumped by around 15bp since Monday, and now falls around the 4.55% area - i.e. fully factoring in at least two more hikes. There’s another factor that may play a role here: government borrowing figures for January surprisingly came in £22bn short of the Office for Budget Responsibility’s forecasts. This essentially gives Chancellor Jeremy Hunt plenty more ammunition to deploy fiscal support. The initial impact on the pound from those figures was not positive, but there are reasons to believe this could prove beneficial for GBP further down the road. We are not convinced the BoE will ultimately deliver more than one hike, and given the pound’s high sensitivity to the BoE story, we are struggling to see a sustainable outperformance of sterling against the euro in the coming months. But we have to admit that a break below 0.8800 in EUR/GBP is a tangible possibility in the very near term, and a recovery from those levels (which is our base case) may only be gradual. Francesco Pesole NZD: RBNZ stays hawkish The Reserve Bank of New Zealand's decision overnight was fully in line with our expectations: a 50bp rate hike to 4.75%, a hawkish tone, and unchanged rate projections. The New Zealand dollar is trading stronger after the announcement and press conference by Governor Adrien Orr, but it still seems like the instability in global risk sentiment is putting a cap on NZD/USD gains at the moment. The acknowledgement of slower inflation and a subdued economic outlook were included in the statement, as well as an analysis of the potential impact on growth (negative) and inflation (positive) of cyclone Gabrielle. Ultimately, the reiteration that the monetary policy strategy has a medium-term horizon was clearly aimed at detaching market rate expectations from such short-term events. Interestingly, the new RBNZ projections included an even larger (and longer-lasting) slump in the housing market. This seems to us another attempt to sound hawkish and to re-link the market pricing with the 5.50% projected peak rate, as the housing correction appeared to many – including us – as the main reason to stop hiking earlier. We still think there is a high risk that the 5.50% peak rate will not be reached unless the impact of the cyclone effectively stops the deflationary process. Markets are pricing in 35bp for the 5 April meeting: it’s important to note that there are no key data releases except 4Q GDP before that date. A 25bp increase looks more likely, but we wouldn’t exclude one last 50bp move before data deteriorate in the second quarter. This means that the RBNZ could offer support to NZD into the start of 2Q, but we then think that a worsening in data and slower inflation should leave further NZD/USD upside heavily dependent on a favourable external environment. We still target 0.67 by the third quarter. Francesco Pesole Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Sharp drop in Canadian inflation suggests rates have peaked

The Loonie Pair Struggles To Defend USD/CAD Bulls

TeleTrade Comments TeleTrade Comments 22.02.2023 09:12
USD/CAD seesaws around six-week high after rising the most in three weeks the previous day. Descending resistance line from early November 2022 guards immediate upside. Upside break of 100-DMA, four-month-old trend line keeps buyers hopeful. USD/CAD grinds near a 1.5-month high during early Wednesday, after crossing the key moving average and resistance line the previous day. That said, the Loonie pair struggles to defend USD/CAD bulls as a downward-sloping resistance line from early November 2022, close to 1.3555 at the latest, challenges the immediate upside of the quote. The upbeat performance of the USD/CAD price could be linked to the strong RSI (14), not overbought. It should be noted, however, that the January 2023 peak surrounding 1.3685 and late 2022 top near 1.3705, could act as the last defense of the USD/CAD bears. As a result, the USD/CAD upside appears to have limited room towards the north. Meanwhile, a daily closing below the 100-DMA and the previous resistance line from early October 2022, respectively near 1.3515 and 1.3505, precede the 1.3500 round figure and could recall the USD/CAD bears. Following that, the 50% Fibonacci retracement level of the pair’s August-October 2022 upside, near 1.3355, will challenge the USD/CAD bears before directing them to the 200-DMA and the 61.8% Fibonacci retracement level of 1.3210, also known as golden Fibonacci ratio. Overall, USD/CAD remains on the bear’s radar even as the road to the north appears bumpy. USD/CAD: Daily chart Trend: Further upside expected
A Slump In The Turkish Current Account Balance Allowed The USD/TRY Pair To Print The First Daily Gains

The CBRT appears the biggest driver for the USD/TRY upside

TeleTrade Comments TeleTrade Comments 22.02.2023 09:17
USD/TRY bulls take a breather as markets turn cautious ahead of Fed Minutes. Mixed concerns on rate positions, earthquake at home challenges the Turkish Lira pair sellers. Upbeat US data underpins hawkish Fed bets but mention of policy pivot could weigh on prices. CBRT has been holding rates steady in the last three monetary policy meetings at 9.0%. USD/TRY slides to $18.81, retreating from the all-time high marked the previous day, as the US Dollar eases ahead of the key Federal Open Market Committee’s (FOMC) Monetary Policy Meeting Minutes. Adding strength to the pullback moves could be the Turkish Lira (TRY) traders’ cautious mood before Thursday’s Central Bank of the Republic of Türkiye (CBRT) Interest Rate Decision. It should be noted that the earthquake in Turkiye and Syria appeared the latest worry for the nations. However, the Turkish inflation eased in the last two months and hence defends the CBRT’s latest inaction surrounding the 9.0% interest rate. On the other hand, strong prints of the preliminary US S&P Global PMIs for February joined the hawkish Fed bets to underpin the US Dollar Index’s first daily positive in three the previous day, down 0.07% intraday near 104.11 at the latest. It’s worth observing that the monetary policy divergence between the US Federal Reserve (Fed) and the CBRT appears the biggest driver for the USD/TRY upside. Elsewhere, comments from US Secretary of State Antony Blinken and Russian President Vladimir Putin weigh on the market sentiment and tease USD/TRY bulls as both suggest further tension between Moscow and Kyiv, which also includes indirect participation of the West and China of late. Though, an absence of major updates in Asia seemed to have paused the risk-off mood. Against this backdrop, the US 10-year and two-year treasury bond yields seesaw around the three-month highs marked the previous day while S&P 500 Futures print mild gains despite Wall Street’s negative closing. Looking forward, Turkish Capacity Utilization and Manufacturing Confidence for February could entertain USD/TRY traders ahead of the Fed Minutes. However, major attention will be given to Thursday’s CBRT Interest Rate decision for clear directions. Technical analysis Overbought RSI joins the $19.00 psychological magnet to challenge the USD/TRY bulls. The downside moves, however, remain elusive unless providing a daily closing below the 50-DMA support near $18.75
UBS buys Credit Suisse for $3.2bn. Last week was the worst one for equity markets in 2023

Further upside movement of the USD/CHF Pair is expected

TeleTrade Comments TeleTrade Comments 22.02.2023 09:20
USD/CHF pares the biggest daily gains in three weeks by reversing from golden Fibonacci ratio. Multiple trend lines, 200-SMA stand tall to challenge downside move, RSI conditions also suggest further grinding towards the north. Buyers seem to have a smooth road ahead of 0.9350 hurdle. USD/CHF seesaws around 0.9265 as it consolidates the previous day’s gains with mild losses heading into Wednesday’s European session. In doing so, the Swiss Franc (CHF) pair makes a U-turn from the 61.8% Fibonacci retracement level, also known as the golden Fibonacci ratio, to pare the biggest daily jump since early February. Even so, the most steady RSI (14), above 50, joins the bullish MACD signals, despite being sluggish of late, to keep the USD/CHF buyers hopeful. That said, a one-week-old ascending trend line restricts the immediate downside of the USD/CHF pair near 0.9245. Following that, the 50% Fibonacci retracement level and the 200-SMA could probe the bears around 0.9235 and 0.9220 in that order. It’s worth noting that an upward-sloping support line from February 01, close to 0.9185 at the latest, appears the last defense of the USD/CHF bulls. On the flip side, a clear break of the aforementioned key Fibonacci retracement level of 0.9275 could quickly propel the USD/CHF prices toward the 0.9300 round figure before highlighting the latest swing top near 0.9335. Though, multiple hurdles near 0.9350 seem to challenge the USD/CHF pair’s upside past 0.9335, a break of which could easily challenge the previous monthly high surrounding 0.9490. USD/CHF: Four-hour chart Trend: Further upside expected
New Zealand dollar against US dollar decreased by 1.07% yesterday

Reserve Bank of New Zealand has hiked its Official Cash Rate (OCR) to 4.75%

TeleTrade Comments TeleTrade Comments 22.02.2023 09:23
NZD/USD is demonstrating a volatility contraction ahead of Federal Open Market Committee minutes. A recovery in the odds of policy tightening continuation by the Federal Reserve sent US Treasury yields on fire. Reserve Bank of New Zealand has hiked its Official Cash Rate by 50 bps to 4.75%. NZD/USD might display a sheer downside after surrendering the horizontal support plotted from 0.6190. NZD/USD has turned sideways around 0.6230 in the early European session after wild movements showed post-hawkish monetary policy by the Reserve Bank of New Zealand (RBNZ). Volatility in the Kiwi asset has squeezed dramatically as investors have shifted their focus towards the release of the Federal Open Market Committee (FOMC) minutes, which are scheduled in the late New York session. Investors’ risk-taking ability is improving gradually as the risk-sensitive assets have shown some recovery after observing sheer weakness on Tuesday. S&P500 futures have added some gains after recording the worst day of 2023. The US Dollar Index (DXY) is gradually marching towards 103.90. Weak momentum in the USD index could spoil the upside bias ahead. However, investors are expected to remain anxious ahead of the release of the FOMC minutes. US yields print a three-month high after upbeat PMI figures The tight labor market and solid monthly Retail Sales released this month already triggered fears of a rebound in the declining Consumer Price Index (CPI) in the United States. And, now upbeat preliminary S&P PMI (Feb) data have bolstered the case of a sheer revival in consumer spending. On Tuesday, the preliminary S&P Manufacturing PMI (Feb) climbed to 47.8 from the consensus of 47.3 and the former release of 46.9. The Services PMI soared to 50.5 from the estimates of 47.2 and the prior release of 46.8. Economic activities in the United States were contracting in the past three months and investors started anticipating that the Federal Reserve (Fed) would consider a pause in the policy tightening spell this month. However, Fed chair Jerome Powell was reiterating that inflation is persistent and it would be premature to consider a pause or rate cut in the current monetary policy. Now, a sheer expansion in the scale of economic activities is conveying that the current monetary policy is not restrictive enough to tame stubborn inflation. A recovery in the odds of policy tightening continuation by the Federal Reserve sent US Treasury yields on fire. The return generated on 10-year US Treasury bonds printed a fresh three-month high at 3.96%. Federal Open Market Committee minutes hog the limelight Investors are keenly awaiting the release of the Federal Open Market Committee (FOMC) minutes, which will provide a detailed explanation behind the 25 basis points (bps) interest rate hike by the Federal Reserve in its February monetary policy meeting. Apart from that, the minutes will determine what authorities are planning for the terminal rate and targets decided for inflation for the current year and a roadmap for achieving the 2% inflation target. Recently, Cleveland Fed President Loretta Mester and St. Louis Fed President James Bullard have advocated for another 50 basis-point hike, which should be on the table for upcoming decisions, as reported by Bloomberg. A strong consideration for 50 bps rates might propel recession fears in the United States. Reserve Bank of New Zealand hikes OCR by 50 bps to 4.75% Inflationary pressures in the New Zealand economy have not peaked yet as the domestic demand is extremely solid. And Cyclone Gabrielle, considered as the worst storm, has created havoc that the price index could propel further. To strengthen the monetary tools in the battle against inflation, the Reserve Bank of New Zealand has hiked its Official Cash Rate (OCR) by 50 bps to 4.75%. In November monetary policy, Reserve Bank of New Zealand Governor Adrian Orr pushed interest rates by 75 bps. A bumper rate hike was already expected by the RBNZ amid the fresh release of the helicopter money as New Zealand Prime Minister (PM) Chris Hipkins has promised a cyclone relief package of NZ$300 million ($187.08 million). Meanwhile, the labor market has started demonstrating devastating effects due to the continuation of policy tightening by the Reserve Bank of New Zealand. In the monetary policy statement, Reserve Bank of New Zealand Governor Adrian Orr was loud and clear that the economy will see a recession in the period of nine to twelve months. He further added, “The central bank is encouraging savings by increasing deposit rates to avert inflation”.  The central bank sees no evidence that inflation targets should be raised. NZD/USD technical outlook NZD/USD has been declining for the past few weeks after forming a Double Top chart pattern on a four-hour scale, which conveys a bearish reversal. The Kiwi asset has dropped to near the horizontal support plotted from January 6 low at 0.6190. A slippage below the above-mentioned horizontal support will trigger the downside momentum. The 20-period Exponential Moving Average (EMA) at 0.6242 is acting as a major barricade for the New Zealand Dollar. Meanwhile, the Relative Strength Index (RSI) (14) is on the verge of slipping into the bearish range of 20.00-40.00. An occurrence of the same will trigger a downside momentum.
Comments Of The South Korean Ministry Of Finance Helped The USD/KRW Pair

Comments Of The South Korean Ministry Of Finance Helped The USD/KRW Pair

TeleTrade Comments TeleTrade Comments 22.02.2023 09:29
An official at the South Korean Finance Ministry said on Wednesday, he “plans to meet FX dealers later on Wednesday and listen to the opinion on the current market situation.” “Won's recent pace of weakening faster than other currencies,” the official added. On Tuesday, Bank of Korea (BOK) Governor Rhee Chang-yong noted that they “will respond in a timely manner in case of uneasiness in financial and forex markets.” Market reaction USD/KRW is defending the $1,300 mark on the above comments, trading 0.24% lower on the day at $1,303, as of writing. The pair jumped to the highest level in two months at $1,314.53 on a broad-based US Dollar strength.
Central Banks and Inflation: Lessons from History and Current Realities

The Bank Of Japan (BoJ) Concerns Seem To Exert Downside Pressure On The GBP/JPY Prices

TeleTrade Comments TeleTrade Comments 22.02.2023 09:39
GBP/JPY holds lower grounds as it pares the biggest daily gains in a week. Firmer UK PMIs bolster hawkish BoE bets but Brexit, wage talks probe buyers. Mixed Japan data, BoJ concerns join a retreat in yields to weigh on prices. GBP/JPY bulls take a breather around 163.30, after rising the most in seven days during early Wednesday. The cross-currency pair’s latest gains could be linked to the upbeat UK data and hawkish concerns surrounding the Bank of England (BoE). However, sluggish yields and the Bank of Japan (BoJ) concerns seem to exert downside pressure on the GBP/JPY prices. Also likely to challenge the pair’s moves are the mixed data from the UK and Japan. Earlier in the day, Reuters Tankan Manufacturing Index for Japan came in as -5.0 for February versus -6.0 in January. On the same line, Tankan Non-Manufacturing Index eased to 17 for the said month versus 20.0 prior. Elsewhere, Brexit woes loom as the Eurosceptic Conservatives challenge UK Prime Minister’s talks with the European Union (EU) over the Northern Ireland (NI) border issue. The leader of Northern Ireland's largest unionist party (Jeffrey Donaldson, leader of the Democratic Unionist Party) said on Tuesday there was still work to be done to find a resolution to a dispute between Britain and the European Union over their post-Brexit trading arrangements with the province, per Reuters. Alternatively, the preliminary readings of the UK S&P Global/CIPS data for February reported that the Manufacturing PMI rose to 49.2 versus 46.8 expected and 47.0 prior while Services PMI jumped to a seven-month high of 53.3 compared to 48.3 market forecasts and 48.7 previous readings. Further, Japan’s wage talks and signals for higher payments to workers in Tokyo seem to underpin the need for hawkish Bank of Japan (BoJ) action even if the latest chatters favor Governor Haruhiko Kuroda’s one last shot at the ultra-easy monetary policy before he retires in April. It should be noted that the expectations of stronger Fed bets and strong US data also underpin the US Treasury bond yields and propel the GBP/JPY prices. Amid these plays, the US 10-year and two-year treasury bond yields seesaw around the three-month highs marked the previous day while S&P 500 Futures print mild gains despite Wall Street’s negative closing. Looking ahead, a light calendar and cautious mood ahead of the Federal Open Market Committee’s (FOMC) Monetary Policy Meeting Minutes may restrict immediate GBP/JPY move. However, the hopes that BoJ Governor Haruhiko Kuroda will play one last shot before his retirement seem to underpin the bullish bias. Technical analysis A downward-sloping resistance line from late October 2022, close to 163.85 by the press time, challenges GBP/JPY buyers amid overbought RSI (14)
Hungary's Economic Outlook: Anticipating Positive Second Quarter GDP Growth

Domino’s Pizza shares in gapped down in Australia, Putin vowed to press on with his faltering invasion of Ukraine

Saxo Bank Saxo Bank 22.02.2023 09:56
Summary:  Volatility charged higher as economic data continued to push for an upward repricing of the Fed path. US yields surged to fresh YTD highs, pushing S&P500 to close below 4,000 and NASDAQ 100 approaching 12,000. Fed’s terminal rate is now priced in at 5.37%, and dollar pushed higher with geopolitical concerns also still in play. Consumer stock earnings from Walmart and Home Depot sent margin pressure warnings. FOMC minutes will be dated, but may provide cues on what to expect from the March dot plot.   What’s happening in markets? The major US indices, the Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) fell ~2% while bond yields rose to new 2023 highs The risk off tone was set by geopolitical tensions picking up, as well as economic prints showing the US services and manufacturing PMIs improved more than expected – with swaps now projecting the Fed can keep pushing rates higher — with the market indicating 25-basis-point hikes are coming at the March, May and June meetings.  Sentiment was also weighed by downbeat outlooks from consumer spending bellwethers – Walmart (WMT) and Home Depot (HD). All while investors await Wednesday's Fed minutes release. Also ahead are earnings results from mining giant Rio Tinto (RIO), tourism and casino giant Ceazers Entertainment (CZR) and smartwatch and gadget business Garmin (GRMN). The three major indices shed at least 2%, with the Dow erasing 2023’s gains. On the weekly chart - the S&P500’s fell below its 50-day moving average –indicating there are more sellers than buyers – while also possibly indicating the market is likely to pull back to a cycle low. Pressuring sentiment - bond yields hit new 2023 cycle highs - with the 10-year note up 14 bps, while the dollar strengthened. Hong Kong’s Hang Seng Index (HIG3) fell amid intensifying competition among China’s eCommerce platforms Hong Kong stocks slipped on Tuesday amid signs that Chinese eCommerce platforms are heating up in competition for business. JD.com (09618:xhkg) plunged 8.5% following the eCommerce giant launching an RMB10 billion subsidy campaign to compete with rival Pinduoduo (PDD:xnas). Meituan (03690:xhkg) dropped more than 4.1% after the mainland food delivery giant announced hiring had started in Hong Kong, paying as much as HKD35,000 a month for delivery riders to prepare for an expansion to Hong Kong. Alibaba (09988:xhkg) and Tencent (00700:xhkg) also fell over 4%. HSBC (00005:xhkg) pared initial gains from an earning beat and special dividend as investors sold the shares of the banking giant citing concerns about a softer 2023 profit guidance and saw the shares down nearly 2% during Hong Kong trading hours. Meanwhile, Hang Seng Bank (00011:xhkg) rose 3.3% despite an earnings miss due to a jump in loan loss provision for mainland property loans. In mainland China, the CSI300 edged up 0.3%. Non-ferrous metals, coal, steel, and auto gained while beauty care, media, food and beverage, and retailing declined. Australia equities (ASXSP200.I) also seem pressured by the RBA’s fresh hawkishness The Australian share market has fallen about 3.5% from its new cycle high that it hit on Feb 3. Pressure on the ASX200 comes after the RBA indicated it has more work to do to keep inflation and wage pressure in order. The ASX200 now appears to be pulling back, with Saxo’s Technical Analyst reinforcing the technical indicators suggest the ASX200 could drop further. However, if the ASX200 closes above 7,477, the uptrend can resume. Today, Origin Energy (ORG) is the best performer in large caps, up 13% after receiving a revised takeover offer from the Brookfield Asset Management-led group following months of due diligence. Meanwhile Domino’s (DMP) is the worst performer down 19% on reporting weaker than expected half year results. Meanwhile, BHP (BHP) shares are up slighted after reporting a stronger outlook yesterday. For more on the world’s biggest mining company, and BHP’s expectations for stronger fundamentals this and next year click here – also note BHP remains in a technical uptrend. Ahead are earnings from Rio Tinto (RIO). FX: Yields and risk sentiment in play The US dollar was modestly higher as US 10-year yields reached a YTD high and in close sight of the key 4% mark, closing at 3.95%. Higher-than-expected PMIs in the US further faded recession concerns, bringing the market expectations of Fed terminal rate to a new high of 5.37%. USD gains were more restrained in that view, which also got a push higher from escalating geopolitical tensions as Putin suspended the Nuke deal with the US. GBP was the outperformer after very strong UK Flash PMIs, which suggested falling near-term recession concerns and pushed higher the odds of a 25bps rate hike from the BOE in March. GBPUSD touched highs of 1.2147 from 1.1987. AUDUSD was hurt by falling risk sentiment despite hawkish RBA minutes out yesterday and fell to 0.6848. AUDNZD still held up above 1.10 with the RBNZ expected to take a dovish turn today. USDJPY again testing 135 with FOMC minutes on tap, while EURUSD unable to sustainably break below 1.0650. Crude oil (CLH3 & LCOJ3) still pressured lower Crude oil prices dipped further with dollar strength in play as the expectations of rate hikes from the Fed continued to ramp up. WTI crude traded close to $76/barrel while Brent was below $83. Geopolitical concerns still running high this week, potentially providing a floor to oil prices. Meanwhile, an expected pickup in Chinese demand is also supporting. Overall, the oil market remains rangebound, in Brent between $80 and $89 and WTI between $73 and $82, as the market weighs the impact of rising demand in China and India versus a potential slowdown elsewhere.   What to consider? Putin suspends Nuclear pact with the US, threatens to push war in Ukraine Putin, in his State of the Nation address, announced a suspension of participation in the New START nuclear arms control treaty with the US. This was the last accord limiting their nuclear arsenals. He also vowed to press on with his faltering invasion of Ukraine. This has spurred the next leg of escalation concerns, invoking a response from President Biden in Poland saying that Russia will never win the war and pledging more support to Ukraine. The focus is now on China which needs to back up its peace treaty words with action after being accused of supplying arms to Russia. Senior Chinese diplomat Wang Yi is now visiting Russia and there are reports that President Xi could be visiting Moscow to meet with Putin in April or May. US S&P PMIs topped expectations, fading recession concerns Flash S&P PMIs for the US were better than expected, with services returning to an expansion territory of 50+. Manufacturing PMI also picked up traction coming in higher at 47.8 from 46.9 previously while Services and Composite both rose back into expansionary territory to 50.5 (exp. 47.2, prev. 46.8) and 50.2 (exp. 47.5, prev. 46.8), respectively. The report further pointed to fading recession concerns, while input price pressures also eased despite a shaper rise in output prices. Australian wage growth and construction data to keep the RBA on its hiking path for now With the RBA now being more hawkish and data dependent, today’s wage growth data and construction work done seemingly validate Australia’s central Bank, can keep on its hiking path for now. Australian wage growth grew 3.3% YoY, up from the revised higher read of 3.2% YoY prior. Despite wage growth growing less than 3.5% expected  - construction work done began to roll over  - falling 0.4% in Q4 – marking a slight fall the prior quarter’s revised jump of 3.7%. So despite both reads being softer than expected – we still need more data to validate core inflation could slow – especially as it’s still well above the RBA’s target. Money markets softened to imply a peak cash rate of 4.2% in August 2023 (down from 4.3%). The next data the RBA will look at - will be next week’s release of retail sales, private sector credit and net exports of GPD. More green shoots in the EZ data but… The EZ February PMIs are quite good at first glance. The French PMI composite was out at 51.6 versus prior 49.1 – this is a 7-month high and the first expansion above the 50 threshold since October 2022. The German PMI composite is in the expansion zone too (at 51.1). But if we dig beneath the surface, this is not as good as expected. In France, the PMI report contains a warning about new export orders: “Overall, this marked a twelfth successive monthly decline in new export orders. Notably, manufacturers recorded the steepest slump since the first COVID-19 lockdown period in the first half of 2020”. We see a similar weakness in German data with a stagnation of exports to non EU countries in January. Basically, in both cases, the order book and the manufacturing side look challenged while the services are the main drivers of the PMI composite. We still expect the eurozone will avoid a recession this year. Overall PMI for the bloc was also pushed higher by services sector outperformance which recorded a PMI of 53.0 (vs. 50.8 last month and 51.0 exp) while manufacturing lagged at 48.5 (vs. 48.8 last and 49.3 exp). Baidu (09888:xhkg) announces Q4 results Baidu is scheduled to announce its Q4 results on Wednesday. Investors are prepared for weaker advertising revenues, slower growth in its cloud business, and some margin compression. Analysts surveyed by Bloomberg are expecting adjusted EPS to fall by 22.4%. Walmart and Home Depot send margin pressure warnings Despite an earnings beat, Walmart’s profit forecast for this year fell short of analyst estimates and a cautious outlook suggested a lingering impact from the inventory buildup of last year as well as shifting consumer demand patterns in light of the higher inflation and interest rates. Meanwhile, home improvement retailer Home Depot missed expectations and gave a dull operating margin guidance – expecting FY operating margin at ~14.5% due to the extra wage costs, compared to an estimate of 15.1%. The results send a warning for other retailers like Target and Lowe’s due to report on March 1. Pizza chain Domino’s Pizza reports weaker than expected earnings amid inflationary pressures In the Australia session today, Domino’s reported underlying EBIT fell 21% Y/Y to A$113.9 million in the HY - with sales growth coming in weaker than expected and inflation also affecting earnings. Its European operations faced significant geopolitical disruptions, and the highest inflation levels across its business- while Asian sales were materially stronger than pre-Covid- but EBIT was lower. All in all, Domino’s financial metrics were down Y/Y, except its store count rose 16% Y/Y to 3,736 stores. The company also cut its half year dividend to A$0.674 per share. As for its - outlook that also disappointed - as customer counts have not met expectations since December - especially in Europe and Asia  - which is lowering store profitability. New store openings will continue to grow in FY23 - but could be below Domino’s medium-term outlook for +8-10% growth. This implies there is less franchisee demand to open stores. That said, management is confident it will return to positive same store sales growth once customer demand increases. Domino’s Pizza (DMP) shares in gapped down in Australia , erasing 2023’s gains – taking DMP to A$57.97 – November 2022 levels. We will also be watching Domino’s in the US – DPZ, as well the London listed business – DOM. The Chinese Communist Party’s Central Committee to hold a plenary session next week The Chinese Communist Party’s Politburo held a meeting on Tuesday and announced after the meeting to hold a Central Committee plenary session from Feb 26 to 28 to decide on key issues in preparation for the “two sessions” meeting of the government scheduled t commence on March 4. FOMC minutes on tap today The minutes of the February 1st Fed meeting will be out later today (3am SGT), and will be key for the cues on inflation expectations and terminal rate forecasts as a gauge for what to expect in the dot plot in March. Still, the hotter than expected inflation print for January (both CPI and PPI) were released after the FOMC meeting and that has shifted the narrative to a hawkish. The criteria for a pause may be on the lookout, and whether that is any push to driving the market’s rate cut expectations further out.   For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Markets Today: US yields at fresh highs; FOMC minutes ahead – 22 February 2023 | Saxo Group (home.saxo)
The RBA’s aggressive rate tightening cycle will be continued

Australian Wage Growth Rose, UK February PMI Reports Suggested Solid Expansion In The UK’s Services Sector

Saxo Bank Saxo Bank 22.02.2023 10:13
Summary:  Equity markets took it on the chin yesterday, dropping to a new 1-month low on the close and below the bottled-up range of the last few weeks as a fresh lift in the entire US yield curve weighed on sentiment. The S&P 500 Index closed just below the psychologically pivotal 4,000 level and the 200-day moving average lies a percent and a half lower. European equity markets have yet to show signs of contagion, but yields are steadily applying pressure there as well. What is our trading focus? US equities (US500.I and USNAS100.I): wage pressures and inflation pressures haunting again US equity futures moved big yesterday as the US 10-year yield hit 3.95%, the highest level since November, with S&P 500 futures declining 2% closing at 4,005 putting the 4,000 level into as play as we have highlighted for week. If S&P 500 futures decline below the 4,000 level, then the 200-day moving average at the 3,981 level will quickly be tested. Home Depot earnings release was received very negatively by the market sending its shares down 7% as the home improvement retailer indicates that the wage pressures are still excessive. This could accelerate the margin compression theme in equities when the Q1 earnings are out in April and May. FX: USD rebounds as US treasury yields lift to new highs The US dollar was modestly higher as US 10-year yields reached a YTD high and in close sight of the key 4% mark, closing at 3.95%. Higher-than-expected preliminary February PMIs in the US further faded recession concerns, bringing the market expectations of Fed terminal rate to a new high of 5.37%. The USD has also perhaps founds support from escalating geopolitical tensions as Putin suspended the Nuke deal with the US. GBP was the outperformer after very strong UK Flash Feb. PMIs (more belowø). GBPUSD touched highs of 1.2147 from 1.1987 before pulling back. AUDUSD was hurt by falling risk sentiment despite hawkish RBA minutes out yesterday and fell toward the range lows in the low 0.6800’s overnight, with the 200-day moving average a bit lower still. AUDNZD reversed sharply lower on the RBNZ’s surprisingly hawkish turn (more below). FOMC Minutes tonight in focus for the US dollar. Crude oil (CLJ3 & LCOJ3) still pressured lower Crude oil prices dipped further with dollar strength in play as the expectations of rate hikes from the Fed continued to ramp up. WTI crude traded close to $76/barrel while Brent was below $83. Geopolitical concerns still running high this week, potentially providing a floor to oil prices. Overall, the oil market remains rangebound, in Brent between $80 and $89 and WTI between $73 and $82, as the market weighs the impact of rising demand in China and India versus a potential slowdown elsewhere. Gold (XAUUSD) soft as maximum pressure applied by USD and yields Gold is slightly softer but holding up reasonably well, given the pressure from the stronger US dollar and US treasury yields rising to new highs for the cycle. The support zone below the recent lows is critical for the status of the trend in gold, as 1,800-1,810 was pivotal on the way up, and the 200-day moving average looms below at 1,776. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) lift to new cycle high US Treasury yields lifted to new cycle highs all along the curve as the Fed is priced to reach a terminal rate near 5.35% this year now (so effectively three further 25 basis point rate hikes expected from the Fed this year. A two-year auction was middle of the range in terms of bidding metrics, but well below the strong prior auction. The 10-year yield nudged higher to 3.95% yesterday, a new high since November of last year. A 5-year T-note auction is up today, and 7-year auction tomorrow. What is going on? Strong UK Services PMI not cooperating with the recession playbook The preliminary UK February PMI’s were released yesterday and suggest solid expansion in the UK’s Services sector, sparking a strong 17 basis-point surge in 2-year UK rates on the implications for further Bank of England tightening. The February reading for the services sector was 53.3 versus 49.2 expected and 48.7 in January, while the Manufacturing PMI reading was 49.2 versus 47.5 expected and 47.0 in January. More green shorts in the EZ data but… The EZ February PMIs are quite good at first glance. The French PMI composite was out at 51.6 versus prior 49.1 – this is a 7-month high and the first expansion above the 50 thresholds since October 2022. The German PMI composite is in the expansion zone too (at 51.1). But if we dig beneath the surface, this is not as good as expected. In France, the PMI report contains a warning about new export orders: “Overall, this marked a twelfth successive monthly decline in new export orders. Notably, manufacturers recorded the steepest slump since the first COVID-19 lockdown period in the first half of 2020”. We see a similar weakness in German data with a stagnation of exports to non-EU countries in January. Basically, in both cases, the order book and the manufacturing side look challenged while the services are the main drivers of the PMI composite. We still expect the eurozone will avoid a recession this year. Earnings recap: Walmart, Home Depot Despite beating against earnings estimates, Walmart’s profit forecast for this year fell short of analyst estimates and a cautious outlook suggested a lingering impact from the inventory build-up of last year as well as shifting consumer demand patterns considering the higher inflation and interest rates. Walmart shares recovered after gapping lower and closed higher for the session. It was a different story for home improvement retailer Home Depot, which missed expectations and gave a dull operating margin guidance – expecting FY operating margin at around 14.5% due to the extra wage costs, compared to an estimate of 15.1%. Home Depot shares plunge to close almost 7% lower and below the 200-day moving average. The results send a warning for other retailers like Target and Lowe’s due to report on March 1. Domino’s Pizza Enterprises crushed 23% in Australia after reporting earnings Dominos Pizza Enterprises is the Australian based franchise owner of Domino’s Pizza in Australia, New Zealand, Japan, Taiwan and several European countries. Its EBIT fell 21% Y/Y to A$113.9 million in the HY, with sales growth coming in weaker than expected as customers turned away from its higher prices. European operations faced significant geopolitical disruptions and were hit by the highest inflation levels across its business. Asian sales were materially stronger than pre-Covid - but its EBIT was lower. Guidance was weak and it cut its half-year dividend to A$0.674 per share. Domino’s Pizza shares fell 23% to A$54.71, which erased 2023’s gains. Australian wage growth comes in below expectations, AUD weaker Australian wage growth rose 3.3% YoY in Q4, slightly below the 3.5% expected and seen raising few new alarm bells at the RBA after evidence of a more precautionary hawkish shift recently. Construction data was weak in the quarter at –0.4% QoQ vs. +1.5% expected, but the Q3 data was revised up to 3.7% from 2.2%. Australian 2-year yields dropped 10 basis points, with money markets pricing a peak rate near 4.2% in August 2023. AUD weakened overnight, reversing back below 1.1000 in AUDNZD terms on a hawkish RBNZ meeting, while AUDUSD is heavy ahead of the range lows near 0.6800, with the 200-day moving average looming slightly lower still.  The next data the RBA will look at - will be next week’s release of retail sales, private sector credit and net exports of GDP.  RBNZ surprises hawkish, reaffirms expected terminal rate of 5.5% The RBNZ hiked the rate 50 basis points to take the policy rate to 4.75% and reaffirmed a forecast for the peak policy rate to reach 5.5%,  if over a longer period than previously. With recent disastrous floods raising expectations that the RBNZ might go with a smaller hike or no hike at all, this decision read hawkish and NZD sjumped versus the AUD and was somewhat resilient against the firmer US dollar. What are we watching next? FOMC minutes on tap today The minutes of the February 1st Fed meeting will be out later today (3am SGT), and will be key for the cues on inflation expectations and terminal rate forecasts as a gauge for what to expect in the dot plot in March. Still, the hotter than expected inflation print for January (both CPI and PPI) were released after the FOMC meeting and that has shifted the narrative to a hawkish. The criteria for a pause may be on the lookout, and whether that is any push to driving the market’s rate cut expectations further out. Earnings to watch Today’s key earnings release is Nvidia reporting FY23 Q4 earnings (ending 31 Jan) after the US market close with analysts expecting revenue of $6bn down 21% y/y and EPS of $0.81 down 32% y/y. With cryptocurrencies rallying lately there might be an upside surprise in the outlook as crypto mining activity might have increased the demand for GPUs. Wednesday: Rio Tinto, Genmab, Danone, Lloyds Banking Group, Iberdrola, Nvidia, TJX, Stellantis, Baidu, eBay Thursday: EssilorLuxottica, Deutsche Telekom, Munich Re, Kuaishou Technology, Eni, Anglo American, BAE Systems Friday: BASF, Monster Beverage Economic calendar highlights for today (times GMT) 0800 – Sweden Riksbank Governor Thedeen to speak 0900 – Germany Feb. IFO Business Climate Survey 1800 – US 5-year US T-note auction 1900 – US FOMC Minutes 1910 – New Zealand Governor before parliament committee 2130 – API's Weekly Crude and Fuel Stock Report 2230 – US Fed’s Williams (Voter) to speak on inflation   Source: Financial Markets Today: Quick Take – February 22, 2023 | Saxo Group (home.saxo)
Worst behind us for UK retail despite fall in sales

The Likelihood Of An Economic Recession In The UK Has Greatly Lessened

Jakub Novak Jakub Novak 22.02.2023 10:33
Yesterday, the British pound gained significantly against the US dollar, although the UK economy is undergoing the most severe cost-of-living crisis in several generations. Yet, as it turned out, it is handling things better than economists and the Bank of England's policy had anticipated, which improves the likelihood that the nation will escape entering a recession. PMI index  According to PMI index figures released yesterday, private sector output increased for the first time in seven months, accompanied by significant increases in tax collections and higher-than-expected retail sales. All of this suggests that the economy remains stable, defying official and expert predictions. Difficult task Prime Minister Rishi Sunak and his Conservative Party, who have a difficult task ahead of them to win the general election, might take solace in this kind of news. The resulting number, however, might force the Bank of England to keep up the sharpest rate increase in the last three decades to bring inflation back to the target level of roughly 2.0%. Recession The facts to date only show that the likelihood of an economic recession has greatly lessened when compared to before, but the heightened inflationary pressure has not subsided and unquestionably continues to be the regulator's top concern. Bank of England As mentioned above, yesterday's statistics showed a substantial rise in activity in the service sector, which caused the pound to rise and the weekly maximum to be updated. The Bank of England had previously revised and improved its prediction earlier this month, anticipating a contraction of less than 1% over the following five quarters. In actuality, this is a protracted period of stagnation rather than a full-blown recession. Energy demand The Treasury's demand for cash has decreased as a result of lower-than-anticipated interest payments on debt and the highest-ever income tax receipts. A warmer winter lowers energy demand, enabling government subsidies for citizens to pay their electricity and natural gas bills to be reduced. Remember, though, that the British Finance Minister rejected calls for a significant tax cut and declined to grant the unions' requests for salary rises, both of which, in theory, would have reduced inflationary pressure and limited future inflationary pressure. Hunt's statement "Given that debt is at its highest level since the 1960s, we must stick to our plan to reduce it in the medium term. Debt reduction will require some difficult decisions, but it is extremely important to reduce the amount that will be spent on debt interest so that we can protect our public services," Hunt said in a statement. Inflation Inflation is not declining as quickly as anticipated, even if some indicators show a significant improvement. The most recent value of 10.1% is far from the Bank of England's targets, although being one percentage point lower than the peak in October. GBP/USD Regarding the GBP/USD's technical picture, the bulls were able to halt the bear market. The bulls must ascend above 1.2140 to stabilize the situation. The only way to increase the likelihood of a subsequent recovery to the area of 1.2215, after which it will be feasible to discuss a more abrupt movement of the pound up to the area of 1.2265, is if this resistance fails to hold. After the bears seize control of 1.2065, it is feasible to discuss the return of pressure on the trading instrument. The bulls' positions will be hit if this range is broken, which could push the GBP/USD back to 1.1980 with a potential return of 1.1920. EUR/USD  Regarding the EUR/USD technical picture, the pair's pressure was maintained. Breaking above 1.0660 will cause the trading instrument to snap to the 1.0720 level and halt the bear market. Above this point, you can easily reach 1.0760 and update 1.0800 in the near future. I anticipate some activity from significant purchasers if the trading instrument only declines in the vicinity of 1.0615. It would be preferable to wait until the 1.0565 low has been updated if no one is there before initiating long positions   Relevance up to 08:00 2023-02-23 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335768
GBP/USD Trading Plan: Bulls Eyeing Further Growth, Resistance Level Holds Key, COT Report Signals Interest Rate Expectations

The RBNZ Gave The New Zealand Dollar (NZD) A Brief Boost

Kenny Fisher Kenny Fisher 22.02.2023 12:43
The New Zealand dollar jumped after the Reserve Bank of New Zealand meeting but has pared most of these gains. In the European session, NZD/USD is almost unchanged at 0.6216. RBNZ hikes by 50 basis points The RBNZ delivered a 50 bp rate increase today, bringing the cash rate to 4.75%, its highest level since 2009. The move was widely expected, but a hawkish tone from the central bank gave the New Zealand dollar a brief boost. The rate statement noted that while there are signs that inflationary pressures are easing, CPI remains too high. The statement said that the cash rate “still needs to increase” in order to get inflation back to the Bank’s target of 1%-3%. There is plenty of life left in the RBNZ’s rate-tightening cycle, as the central bank has forecast a peak rate of 5.5% later this year. The next rate meeting is in April, and as things stand, we can expect another 50-bp hike at that time. Inflation is running at a 7.2% clip and a 75-bp hike was a strong possibility at today’s meeting before Cyclone Gabrielle hit and caused damage in the billions of dollars. This is expected to dampen growth in the slow term, although the rebuild should boost inflation. In the US, Manufacturing PMI was almost unchanged at 47.8, while Services PMI improved to 50.5, an 8-month high. The 50.0 level separates contraction from expansion, and both services and manufacturing have been in decline for months, as high inflation and rising interest rates have dampened activity in these sectors. The Fed will release the minutes of its February meeting, when it delivered a 25-basis point hike. The markets will be interested in the extent of support for a 50-bp hike at the meeting. The blowout employment report and a strong retail sales release have forced the markets to come closer to the Fed’s stance, and there is now talk of more rate hikes this year, when only a few weeks ago the markets were confidently projecting rate cuts in late 2023. Read next: Sweden And Finland Are Getting Closer To Becoming NATO Members| FXMAG.COM NZD/USD Technical There is resistance at 0.6245 and 0.6357 0.6162 and 0.6049 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

The Aussie (AUD) Is Trading In The Wake Of The U.S. Currency (USD)

InstaForex Analysis InstaForex Analysis 22.02.2023 12:53
The AUD/USD currency pair continues to decline steadily, despite hawkish signals from the Reserve Bank of Australia. The minutes of the RBA's February meeting, published yesterday, reflected the strong attitude of the regulator's members, who expressed their willingness to raise the interest rate within the next few months. The central bank refuted circulating rumors of a possible pause. But AUD/USD traders actually ignored this message: the aussie continues to follow the greenback, which, in turn, continues to strengthen its position across the market. What the RBA minutes say The AUD/USD pair was under pressure a few weeks ago after the release of key data on the growth of the Australian labor market in January. The data turned out to be weak in all respects: the unemployment rate rose to 3.7%, and the increase in the number of employed again turned out to be in the negative area. With a growth forecast of 20,000, a decrease of 11,500 was recorded. The negative dynamics of this indicator was due solely to the decline in full-time employment, while the part-time employment indicator, on the contrary, showed a strong growth. Note that the December Australian non-farm report also reflected the worsening situation in the labor market, so many analysts assumed that the minutes of the February meeting of the RBA would be dovish, even despite the growth of inflation indicators (consumer price index in Q4 unexpectedly exceeded forecast values). But the document published yesterday was clearly hawkish. In particular, the text of the minutes indicated that the Governing Council was considering a 25 or 50 basis point rate hike in February. The option of a pause was not considered at all. Recall that the RBA slowed down the pace of tightening of the monetary policy (up to 25 points) as far back as last autumn, that's why the announced option of a 50-point hike, which was "on the table" of the members of the regulator, demonstrates the hawkish attitude of the central bank. It signals that the RBA is considering two scenarios: either the central bank maintains the current pace or doubles down on the effort, returning to a 50-point rate of increase. That said, the minutes indicate that the further pace and duration of monetary tightening will "depend directly on incoming data and the Board's assessment of the inflation and labor market outlook." This is a rather streamlined phrase, which suggests that the RBA has "tied" its further decisions to the dynamics of inflation growth. In general, the document released yesterday reflected the intention of the RBA to raise the rate not only in March, but also in May (it is too early to talk about further prospects). At the same time, judging by the text of the February minutes, the central bank is considering two options: raising the rate by 25 points or by 50. Thus, the central bank de facto ruled out the option of a possible pause and guaranteed the maintenance of a hawkish rate at least until the end of the spring. Such hawkish attitude should promote the development of the upward trend. However, the aussie has received support from the RBA at a time when the greenback is gaining momentum across the market. Waiting for Fed minutes At the end of the U.S. session on Wednesday, another important document will be released: the minutes of the Fed's February meeting. The hawkish tone of this document may provide additional support to the U.S. dollar, which already feels quite confident against the background of strong non-farm payrolls and the combative mood of many representatives of the Federal Reserve. For example, one of the most influential members of the Fed—New York Fed President John Williams—has repeatedly stated that the regulator is likely to raise the rate to 5.5% (previously, the final level was assumed at 5.1%). At the same time, he urged the Fed to keep the rate at a high level "for several years." In one form or another, the hawkish position was voiced by other representatives of the Fed. The general essence of the voiced messages is that the regulator "has a lot of work to do" to control inflation. Conclusions The apathetic reaction of AUD/USD traders to the hawkish minutes of the RBA suggests that the Aussie is trading in the wake of the U.S. currency. The U.S. dollar, in turn, enjoys support from the Fed, whose representatives have tightened their rhetoric in response to a slowdown in inflation. Such a fundamental background contributes to the further development of the downward trend. Technically, the pair on the daily chart has overcome the 0.6850 support level (upper boundary of the Kumo cloud on D1) and is currently falling towards the bottom of the 68th figure. The next price barrier, which acts as the nearest target for the downward movement, is 0.6770. The main target of the downward trend is the level of 0.6720 (the lower boundary of the Kumo cloud on the same timeframe)   Relevance up to 10:00 2023-02-23 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335794
Australian dollar against US dollar: USD may rise on the back of the Republicans and Democrats negotiations

The AUD/USD Pair Remains Under Selling Pressure, The GBP/USD Pair Is Below 1.21 Again

Kamila Szypuła Kamila Szypuła 22.02.2023 13:38
The dollar rose slightly on Wednesday, continuing to trade near six-week highs on the back of strong economic data. Survey data released on Tuesday showed U.S. business activity unexpectedly rebounded in February to reach its highest in eight months. In the euro zone, a survey-based gauge of activity also surged, hitting a nine-month high. Investors' focus now turns to the release of the minutes from the Fed's latest meeting later on Wednesday, which could offer more insight into policymakers' plans. USD/JPY One pair is moving in a sine wave pattern today. In the first hours of trading, USD/JPY dropped to around 134.60 and then rose to around 1134.95. This move has been repeated once again, and USD/JPY is now heading down towards 134.65. Bond purchases and BOJ loans dominate the headlines in Japan. The Japanese yen found some support against the US dollar on Wednesday morning, while the Bank of Japan (BOJ) had to buy 10-year government bonds due to the yield breaking the upper limit set by the BoJ (0.5%) of their policy range. It was the second consecutive trading session during which this took place. BOJ's Tamura gave mixed messages, stating that loose monetary policy is now required, but future policy changes will be crucial at some point in the future. EUR/USD The movement of the EUR/USD pair in Asian Russia and at the beginning of the European traded in the range of 1.6550-1.6650. In the European session, the pair fell and is currently trading around 1.6300. Yesterday's data from the euro zone showed further improvement, with flash PMI beating estimates in the services sector, while production fell slightly. The Zew Sentiment Survey reflected an improvement in sentiment and optimism, with expectations and current conditions outperforming estimates in both the Eurozone and Germany. This morning brought German inflation data for January up from December, confirming comments from ECB President Christine Lagarde about a 50 basis point hike at the upcoming meeting Read next: Sweden And Finland Are Getting Closer To Becoming NATO Members| FXMAG.COM GBP/USD The cable pair in the Asian session kept its momentum above 1.21. The European session is not favorable for the gunt pair and the pair is below 1.21. At the time of writing, GBP/USD was trading at 1.2090. Sterling pulled back on Wednesday after rising sharply on stronger-than-expected British business activity as traders awaited consumer confidence data and focused on Britain's political headaches. The latest UK PMIs beat forecasts and showed business activity in the UK, especially in the services sector, picking up sharply in February. The latest data suggest that the UK economy may be improving, giving the Bank of England more wiggle room to increase interest rates. UK inflation is on the way down, but at a current level of 10.1% is sharply higher than the Bank of England’s (BoE) mandate of around 2%. Inflation is expected to fall quickly over the coming months, according to the BoE, as energy prices and the cost of imported goods fall. AUD/USD The AUD/USD pair adds to the significant losses from the previous day and remains under selling pressure for the second day in a row on Wednesday. The Aussie Pair is holding below 0.69. At the beginning of the day, AUD/USD started to fall to the level of 0.6830 and in the Asian session kept trading in the range of 0.6830-0.6840. In the first hours of trading in the European session, the Australian pair fell below 0.6820, but managed to rebound and at the time of writing was just above 0.6830. Source: finance.yahoo.com, investing.com
The USD/JPY Price Seems To Be Optimistic

If The Support Remains Unbroken, The USD/JPY Pair's Slow Rise Will Continue

InstaForex Analysis InstaForex Analysis 23.02.2023 08:00
Yesterday, the yen did not react much to the general strengthening trend of the US dollar - the USD/JPY pair even fell by 10 points. Today is a national holiday in Japan, and the general uptrend, which was confirmed on Tuesday, may not be supported either. The signal line of the Marlin oscillator is decreasing on the daily chart, so there is a probability of a retest of support of the blue channel price line (133.82) before further growth to the upper line of the price channel to 137.70. On the four-hour chart, the price remains in the ascending position above both indicator lines. The risk of a corrective decline is created by the Marlin oscillator, which has been moving along the zero line since the 20th and is not growing. The MACD line (134.38) is an obstacle to the deep correction, which coincides with yesterday's low. If the support remains unbroken, the pair's slow rise will continue.   Relevance up to 04:00 2023-02-24 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335868
UK Gfk Consumer Confidence index got better fourth month in a row

The Main Scenario Of The GBP/USD Pair Is Still A Downtrend

InstaForex Analysis InstaForex Analysis 23.02.2023 08:02
The pound's outstanding action on the 21st was neutralized by yesterday's 64-point drop, followed by the dollar strengthening by 0.32%. The price failed to do the main thing in order to continue to rise - to come above resistance 1.2155. The price has a small chance to do that, however, it needs to wait for the signal line of the Marlin oscillator to enter the area of positive values, because the current situation on the daily chart is fully bearish, there are no signs of growth. The main scenario is still a downtrend and includes a breakthrough of the nearest support at 1.1914 and further slide to 1.1737, the peak of September 13,2022. The 1.1644 level, the October 27 high, is a more solid target support. On the four-hour chart, the price is still above the balance line (red) and the MACD indicator (blue), the Marlin oscillator is rising. The situation is upward. But if the dollar continues to attack currencies and commodities (and oil fell in price by 2.90% yesterday), the barrier in the form of the MACD line (1.1985) will soon be overcome.   Relevance up to 04:00 2023-02-24 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335870
Rates Spark: Crunch time

The EUR/USD Price Settled In The Consolidation Range

InstaForex Analysis InstaForex Analysis 23.02.2023 08:04
On Wednesday, the euro did not provide any surprises and went 43 pips down to the target level of 1.0595, missing it by only 4 pips. The price settled in the consolidation range of December 16-29, which, following the main scenario, will move down quite quickly, since the signal line of the Marlin oscillator has already moved down from its consolidation. Now we are waiting for the price to settle under 1.0595 and reach the target range of 1.0443/70 (the low of April 2022 - low of December 17). The four-hour chart has all the prerequisites for quickly moving away from the achieved range to the downside. This is the current price development under both indicator lines, decline in the signal line of the Marlin oscillator, as well as in its own descending channel. I expect the price to settle under 1.0595.     Relevance up to 04:00 2023-02-24 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335872
The GBP/USD Pair Has Experienced An Average Volatility - 14.03.2023

The British Pound Is Trading Within An Uptrend Channel

InstaForex Analysis InstaForex Analysis 23.02.2023 08:06
GBP/USD is trading below the 21 SMA and below the 200 EMA. We can see on the 1-hour chart that the British pound is trading within an uptrend channel formed since February 17 and below a downtrend channel formed since February 21. The US dollar index (USDX) continues to rise. If the British pound fails to break the 1.2175 zone in the next few hours, we could expect a resumption of the bearish cycle. With a sharp break below the psychological 1.20 level, we could expect a drop towards the 2/8 Murray located at 1.1962. Encouraging UK PMI data revived hawkish expectations from the Bank of England (BoE) and boosted the sterling. In case GBP bulls continue to hold the price above 1.2085, it could reach 4/8 Murray at 1.2207. Our trading plan for the next few hours is to buy the British pound above 1.2030, with targets at 1.2073 and 1.2090. Additionally, a break of the downtrend channel around 1.2090 will be a signal to buy with the target at 1.2207.   Relevance up to 04:00 2023-02-28 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313733
Australian dollar against US dollar decreased amid weak China CPI data

Analysis Of Movement Of The AUD/JPY Cross Currency Pairs

InstaForex Analysis InstaForex Analysis 23.02.2023 08:09
Although this time on the daily chart AUD/JPY cross currency pairs is moving in a channel that dips downwards which means that the main bias is still bearish but currently AUD/JPY is experiencing a correction rallying upwards which is marked by the appearance of the Bearish Continuation Ascending Broadening Wedge pattern even though the Bullish 123 pattern has appeared which is followed by the appearance of several Ross Hooks (RH) , while the level that will be tested in the near future is the 92.98 level. If this level is successfully penetrated and as long as it does not return to its initial bias and goes below the 90.74 level, AUD/JPY in the next few days has the potential to test the 93.58 level as its first target and the 94.37 area level. -95.22 as the second target if the momentum and volatility are enough to support Relevance up to 05:00 2023-02-28 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120035
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The EUR/USD Bears Are Looking Inclined To Drag The Price Lower

Oscar Ton Oscar Ton 23.02.2023 08:11
  Technical outlook: EURUSD dropped to the 1.0599 low during the late New York session on Wednesday before pulling back. The single currency is seen to be trading close to 1.0620 at this point in writing as the bulls prepare to unfold a counter-trend rally soon. The near-term resistance is seen around 1.0700 and a push higher will confirm a bottom in place at 1.0599. EURUSD bears are looking inclined to drag the price lower toward 1.0500 from the current levels. A consistent break below 1.0600 will open the door to a drop further toward the 1.0480-1.0500 support as marked on the daily chart here. If the above scenario unfolds, the proposed counter-trend rally will be further delayed. Either way, the larger-degree wave structure is indicating that EURUSD is heading lower towards 1.0100 in the next several trading weeks. Also, note that 1.0100 is the Fibonacci 0.618 retracement of the earlier rally between 0.9535 and 1.1025 respectively. If the drop unfolds as corrective, a high probability remains for a bullish reversal from 1.1025. Trading idea: A potential drop against 1.1025. Good luck!   Relevance up to 07:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313743
Would Federal Reserve (Fed) go for two more rate hikes this year? Non-voting Bullard say he would back such variant

The US Dollar Index Prices Should Remain Above 100.50

Oscar Ton Oscar Ton 23.02.2023 08:13
Technical outlook: The US dollar index rallied through 104.24 during the New York session on Wednesday before pulling back. The index is seen to be trading close to 104.00 levels at this point in writing as the bears are ready to drag the price lower towards 102.00. On the other hand, if prices break above 104.30 consistently, the bulls would want to take out resistance at 105.35 before giving up. The US dollar index is carving a larger-degree corrective rally, which began from 100.50 on February 02, 2023. The above corrective rally is expected to terminate close to 106.50 and up to 109.30 in the next few weeks. Within the above structure, a counter-trend drop could unfold dragging prices below 102.00 before the bulls are back. Ideally, prices should remain above 100.50 to keep the above bullish structure intact. Furthermore, a push above 105.35 will confirm and open the door towards 106.50 and 109.30 as projected on the 4H chart here. Also, note that 109.30 is the Fibonacci 0.618 retracement of its earlier decline from 114.70 to 100.50, hence a bearish reaction is possible. Trading idea: A potential bullish move to continue against 100.50 Good luck! Relevance up to 07:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313745
ECB cheat sheet: Difficult to pull away from the Fed

The EUR/USD Pair Is Seeing Resistance Near 1.0650 That Ideally Will Cap The Upside For The Expected Decline

Torben Melsted Torben Melsted 23.02.2023 08:15
EUR/USD continues to follow the expected path lower in wave C of 4. Ideally, we will see wave C continue lower to test the ideal target seen at 1.0498 before completing wave C and wave 4. This should be setting the stage for wave 5 to take over for the next impulsive rally to above the former top at 1.1033 and ideally, closer to the 1.1360 - 1.1390 target area. We see resistance near 1.0650 that ideally will cap the upside for the expected decline towards 1.0498, but only with a break above resistance at 1.0723, we will review our count.     Relevance up to 07:00 2023-02-24 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313747
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

Technical Outlook Of The EUR/JPY Cross Pair

Torben Melsted Torben Melsted 23.02.2023 08:17
EUR/JPY has likely seen a small overthrow to complete the ending diagonal in wave c of B and should be ready to challenge the downside for a break below minor support at 142.82 indicating a top being in place, while a break below support at 142.33 will confirm the top and renewed downside pressure as wave C continues lower towards the ideal target seen at 134.10. Read more: https://www.instaforex.eu/forex_analysis/313749 Relevance up to 07:00 2023-02-24 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313749
The USD/MXN Pair’s Further Moves Rely On The Mexican Inflation Data

Further Downside Movement Of The USD/MXN Pair Is Expected

TeleTrade Comments TeleTrade Comments 23.02.2023 08:24
USD/MXN grinds near the lowest levels since April 2018. Nearly oversold RSI conditions challenge bears on their way to three-month-old support line. Two-week-long descending trend line challenges bulls before $18.50 resistance confluence. Sustained trading below the key trend line, moving average joins bearish MACD signals to favor sellers. USD/MXN bears take a breather around $18.40 during early Thursday, following a slump to a nearly five-year low the previous day. In doing so, the Mexican Peso (MXN) pair takes clues from the RSI (14) conditions to probe the sellers. However, bearish MACD signals and the quote’s sustained trading below the previous support line from early February, as well as the 10-DMA, keep the bears hopeful. That said, the latest multi-month low near $18.30 appears immediate support for the USD/MXN bears to watch during the quote’s fresh downside. Following that, a descending support line from late November 2022, close to $18.20 by the press time, will be crucial to challenge the pair’s further declines. In a case where USD/MXN remains bearish past $18.20, the April 2018 low near the $18.00 threshold should lure the sellers. On the contrary, recovery moves may initially aim for the fortnight-old resistance line, close to $18.40 by the press time. Following that, a convergence of the 10-DMA and the support-turned-resistance line from February 02, close to $18.50, will be crucial to watch before welcoming the buyers. USD/MXN: Daily chart Trend: Further downside expected
South Korean Central Bank Left Its Policy Rate Unchanged

South Korean Central Bank Left Its Policy Rate Unchanged

TeleTrade Comments TeleTrade Comments 23.02.2023 08:28
Bank of Korea (BOK) Governor Rhee Chang-yong said at the press conference following the monetary policy meeting said that “Thursday's decision should not be taken as indicating the tightening cycle is over.” Earlier on, the South Korean central bank left its policy rate unchanged at 3.50%, as expected. The BOK lowered its inflation forecast from 3.6% to 3.5% for this year. Additional quotes Board member Cho Yoon-je dissented to Thursday's rate decision. Sees recent Won weakening as having little to do with domestic issues. Five board members wanted to keep chances for terminal rate reaching 3.75%. Downgrade of inflation forecast mostly due to oil prices. Short-term money market has mostly returned to stability. Thursday's decision was based on expectation that inflation will head down from March. It is time to stop and watch if inflation trend goes along expected path. No comment on whether herd behaviour is behind Won's recent movement. Market reaction USD/KRW is consolidating the latest downswing, triggered by the BOK policy announcement. The pair is trading 0.55% lower at 1,295.78, having tumbled sharply from near the 1,302.50 region.
If The Bank Of England Hike Interest Rates Again Later This Month Will Exert Downward Pressure On The EUR/GBP Cross

The EUR/GBP Cross Pair Is Expected To Display More Weakness

TeleTrade Comments TeleTrade Comments 23.02.2023 08:32
EUR/GBP looks vulnerable around 0.8800 as hawkish BoE bets soar after a recovery in UK preliminary PMI data. UK’s Hunt is facing calls from within his Conservative Party to cut taxes and raise pay for public service workers. ECB Lagarde is set to continue its policy tightening spell of 50 bps to March. The EUR/GBP pair is struggling to find any direction in the Tokyo session amid the absence of a potential trigger. The cross is juggling around 0.8800 and is expected to display more weakness as an economic recovery in the United Kingdom and a shortage of labor is demanding the continuation of policy tightening by the Bank of England (BoE). Investors were in a dilemma whether the Bank of England (BoE) should pause policy contraction as the economic outlook was expected extremely bleak or continue pushing rates higher to tame stubborn inflation. Shortage of labor and escalating food inflation is continuously maintaining havoc that the inflation could be underpinned anytime to new highs. No doubt, the UK Consumer Price Index (CPI) has eased in the past few months, however, the headline CPI figure is still in double-digit and sufficient to trouble households. Meanwhile, a recovery in the economic activities shown by the preliminary S&P Global PMI (Feb) data, released this week, indicates that labor demand could be fueled further and BoE Governor Andrew Bailey should consider continuation of policy tightening. A figure below 50.0 for the preliminary Manufacturing activities indicates contraction, however, the pace of decline in activities has squeezed significantly. BoE panel sees the interest rate peak around 4.5% and the continuation of the rate hike in the March monetary policy meeting looks warranted. Meanwhile, UK Finance Minister (FM) Jeremy Hunt is facing calls from within his Conservative Party to cut taxes in his March 15 budget and from trade unions to raise pay for public service workers, as reported by Reuters, which could propel inflationary pressures further. On the Eurozone front, clarity on the extent of the rate hike by the European Central Bank (ECB) President Christine Lagarde has eased some uncertainty. ECB Lagarde has announced a continuation of 50 bps rate hike spree for March to keep the downside momentum in Eurozone inflation intact.
The USD/INR Traders Seem To Witness Additional Downside Movement

The USD/INR Pair Might Find Further Resistance Around 83.50

TeleTrade Comments TeleTrade Comments 23.02.2023 08:33
USD/INR is displaying wild moves as investors are discounting the impact of the release of the overnight FOMC minutes. Fed policymakers are favoring the continuation of policy tightening to avoid fears of a recovery in US inflation. The asset is testing the breakout of the Descending Triangle chart pattern around 82.70. The USD/INR pair is displaying wild moves in the opening session as investors are discounting the impact of the release of the hawkish Federal Open Market Committee (FOMC) minutes. According to the FOMC minutes, Federal Reserve (Fed) policymakers were loud and clear that a strong labor market and upbeat January Monthly Sales are posing a threat of pause in the declining trend of the United States Consumer Price Index (CPI). Therefore, the Fed should reach to terminal rate to bring down inflation to the 2% target. The US Dollar Index (DXY) has dropped to near 104.00 after printing a three-day high of 104.20 as the risk aversion theme has eased. S&P500 futures have added significant gains in the Asian session, portraying a sheer recovery in the risk appetite of the market participants. USD/INR is testing the breakout of the Descending Triangle chart pattern on an hourly scale. A breakout of the aforementioned chart pattern results in a volatility expansion after a sheer contraction. The downward-sloping trendline of the triangle is plotted from February 14 high at 83.04 while the horizontal support is placed from February 14 low at 82.57. The mighty 200-period Exponential Moving Average (EMA) at 82.73 is providing support to the US Dollar bulls. Meanwhile, the Relative Strength Index (RSI) (14) is looking for a cushion around 40.00 after a healthy correction. Should the asset break above February 22 high at around 83.00, US Dollar bulls will drive the asset toward October 23 high at 83.29. A breach of the latter will expose the asset to unchartered territory. The asset might find further resistance around 83.50, being a round-level number. On the flip side, a break below February 14 low at 82.57 will drag the asset toward February 10 low at 82.33 followed by January 31 high at 82.07. USD/INR hourly chart  
RBNZ preview: Fiscal spending argues for a hawkish 25bp hike

The Kiwi Pair (NZD/USD) Has Extended Its Recovery

TeleTrade Comments TeleTrade Comments 23.02.2023 08:36
NZD/USD has displayed a sheer recovery to near 0.6250 as the risk-on mood solidifies. The Kiwi asset is attempting to deliver a breakout of the Symmetrical Triangle. The RSI (14) is on the verge of delivering a break into the bullish range of 60.00-80.00. The NZD/USD pair has recovered dramatically after sensing a buying interest around 0.6210 in the Asian session. The Kiwi asset has extended its recovery to near 0.6250 after a responsive buying action and is looking to drive its range extension further as the risk-on impulse has solidified. Investors have digested the fact that galloping inflation in the United States needs immediate treatment, therefore, the Federal Reserve (Fed) cannot pause the policy tightening spell as it could dampen the efforts yet made to bring it down. The US Dollar Index (DXY) is resisting in continuing the downside further after correcting to near 104.00. However, the positive market sentiment could continue sending pressure on the safe-haven assets. NZD/USD is attempting to deliver a breakout of the Symmetrical Triangle chart pattern that indicates a sheer volatility contraction on an hourly scale. The downward-sloping trendline of the above-mentioned chart pattern is placed from February 20 high at 0.6262 while the upward-sloping trendline is placed from February 17 low at 0.6204. The Kiwi asset has successfully shifted its auction above the 50-period Exponential Moving Average (EMA) at 0.6233, which indicates more upside ahead. Meanwhile, the Relative Strength Index (RSI) (14) is on the verge of delivering a break into the bullish range of 60.00-80.00, which will trigger the upside momentum. For further upside, the Kiwi asset needs to surpass January 8 low at 0.6272, which will drive the asset towards January 9 low at 0.6320, followed by February 7 high at 0.6363. Alternatively, a breakdown of January 6 low at 0.6193 will drag the asset toward November 28 low at 0.6155. A slippage below the latter will expose the asset for more downside toward the round-level support at 0.6100. NZD/USD two-hour chart  
USD/CAD - Canadian economy added 41,400 jobs beating expectations

Future Movement Of The Loonie Pair (USD/CAD) Might Be Downside

TeleTrade Comments TeleTrade Comments 23.02.2023 08:39
USD/CAD holds lower ground near intraday low, snaps two-day uptrend. Bearish MACD signals, downbeat RSI hints at further downside of the Loonie pair. Convergence of 100-HMA, support line of two-week-old ascending triangle restricts short-term declines of the USD/CAD pair. USD/CAD drops 0.25% intraday during the first loss-making day in three heading into Thursday’s European session. In doing so, the Loonie pair drops to 1.3520 by the press time. That said, the USD/CAD pair’s latest moves appear forming a fortnight-old ascending triangle formation. The same joins downbeat RSI (14) and bearish MACD signals to favor the bearish chart formation. However, a clear downside break of 1.3500 becomes necessary as the 100-Hour Moving Average (HMA) joins the stated triangle’s lower line to increase the strength of the stated support confluence. Following that, tops marked during late January and early February, respectively near 1.3520 and 1.3475, could probe the USD/CAD bears before directing them to the theoretical target surrounding 1.3200. On the contrary, USD/CAD buyers may aim for the latest swing high surrounding 1.3570 before poking the stated triangle’s top line, close to 1.3585 by the press time. In a case where the Loonie pair remains firmer past 1.3585, the bearish chart formation gets defied as the bulls brace for a late 2022 swing high surrounding 1.3700. To sum up, USD/CAD slips off bull’s radar but the sellers await clear break of 1.3500 to retake control. USD/CAD: Hourly chart Trend: Limited downside expected
Analysis Of The USD/TRY Pair: The Turkish Lira Weakness Has Persisted

Turkish Lira (TRY) Traders Await The Central Bank Of The Republic Of Türkiye (CBRT) Interest Rate Decision

TeleTrade Comments TeleTrade Comments 23.02.2023 08:41
USD/TRY struggles for clear directions after two-day downtrend. Turkish government announces economic support for quake-hit areas. CBRT expected to leave benchmark rates unchanged for the fourth consecutive month. US Dollar struggles to justify hawkish Fed bets, geopolitical fears amid sluggish session. USD/TRY seesaws around $18.85-90 as Turkish Lira (TRY) traders await the Central Bank of the Republic of Türkiye (CBRT) Interest Rate Decision on early Thursday. The quote’s latest inaction could also be linked to the pullback in the US Dollar and mixed concerns surrounding Türkiye. As per the latest earthquake updates from Ankara, “The number of people killed in Turkey in this month's devastating earthquakes has risen to 43,556, the country's Interior Minister Suleyman Soylu said overnight,” reported Reuters. The news also quotes the Diplomat as saying to the state broadcaster TRT Haber that there had been 7,930 aftershocks following the first quake on February 6 and that more than 600,000 apartments and 150,000 commercial premises had suffered at least moderate damage. To battle with the natural calamity, the Turkish government unveiled a temporary wage support scheme on Wednesday and banned layoffs in 10 cities to protect workers and businesses from the financial impact of the massive earthquake that hit the south of the country, per Reuters. On the other hand, US Dollar Index (DXY) retreats from the weekly high, down 0.16% intraday to 104.35, as the US Treasury bond yields lack momentum during Japan’s holidays. That said, the US 10-year and two-year Treasury bond yields snapped a two-day uptrend the previous day before marking inaction around 3.92% and 4.70%. It’s worth noting that a retreat in the US inflation expectations, per the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED), also weighs on the US Dollar. Meanwhile, hawkish Federal Open Market Committee’s (FOMC) Monetary Policy Meeting Minutes and comments favoring further rate hikes from St. Louis Fed President James Bullard, as well as from Federal Reserve Bank of New York President John Williams, probe DXY bears. On the same line are the US-China tussles over Beijing’s ties with Moscow. Against this backdrop, S&P 500 Futures bounced off the monthly low to print mild gains around 4,020 whereas the Treasury bond yields remain sidelined amid off in Japan. Looking forward, CBRT is likely to leave the benchmark rate unchanged at 9.0% for the fourth consecutive time, especially amid the natural calamities. The same can allow the USD/TRY to print some gains ahead of Friday’s US Core Personal Consumption Expenditures (PCE) Price Index data, the Fed’s favorite inflation gauge. Technical analysis Although the overbought RSI (14) challenges USD/TRY buyers, the downside remains elusive unless the quote stays firmer past the 50-DMA, near $18.75 by the press time.      
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

A Lack Of Major Events Could Restrict USD/JPY Moves

TeleTrade Comments TeleTrade Comments 23.02.2023 08:45
USD/JPY fades bounce off intraday low, prints mild losses to snap four-day uptrend. Treasury bond yields remain lackluster on Japan holiday. Retreat in US inflation expectations joins mixed geopolitical, Fed headlines to probe momentum traders. USD/JPY retreats to 134.80 as bears appear determined to retake control, after a four-day absence, during early Thursday. Even so, Japan’s holiday and hawkish Fed concerns join geopolitical fears to challenge the downside momentum. As a result, the yen pair prints mild losses during the first downbeat day in five. Starting with the Yen positive headlines, the retreat in the US Treasury bond yields and inflation expectations, per the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED), seem to exert downside pressure on the USD/JPY price. On the same line are the receding fears of nuclear war as US President Joe Biden thinks that his Russian counterpart isn’t up to using nuclear arms by backing off an international treaty. Furthermore, hawkish concerns surrounding the Bank of Japan (BoJ), due to the nearness to the end of Governor Haruhiko Kuroda’s term, also weigh on the USD/JPY pair. Alternatively, Fed policymakers are all in for further rate lifts, per the latest Federal Open Market Committee’s (FOMC) Monetary Policy Meeting Minutes, which in turn propels the US Dollar demand. Further, the fears surrounding the Ukraine-Russia war are far from over, with the latest edition of the West and China escalating the matter to the worse. Amid these plays, S&P 500 Futures bounced off the monthly low to print mild gains around 4,010 whereas the Treasury bond yields remain sidelined amid off in Japan. That said, the US Dollar Index (DXY) drops 0.20% to 104.35 by the press time. Looking ahead, a lack of major data/events could restrict USD/JPY moves but central bankers’ speeches can entertain the pair traders ahead of Friday’s US Core Personal Consumption Expenditures (PCE) Price Index data, the Fed’s favorite inflation gauge. Also important to watch will be the geopolitical headlines surrounding Russia, China and the US. Technical analysis Wednesday’s Doji candlestick joins overbought RSI on the daily chart to challenge USD/JPY bulls.
Australian dollar - the sharp drop can be attributed to technical factors and hawkish Fed

Analysis Of The AUD/USD Pair: Bears Keep The Reins

TeleTrade Comments TeleTrade Comments 23.02.2023 08:49
AUD/USD picks up bids to defend the bounce off key DMA, pokes five-week-old previous support. Bearish MACD signals, downbeat RSI keeps sellers hopeful. Buyers need to cross 0.6975 to retake control. AUD/USD holds onto the day-start rebound from a seven-week low as bulls attack the previous support line near 0.6835 during early Thursday morning in Europe. In doing so, the Aussie pair defends the bounce off the 200-DMA to print the first daily gains in three. It’s worth noting, however, that the recovery remains elusive amid bearish MACD signals and the downbeat RSI (14). Adding strength to the downside bias is the AUD/USD pair’s sustained trading beneath the support-turned-resistance line from late December 2022. That said, the AUD/USD bears are on the watch and waiting for a clear break of the 200-DMA, around 0.6800 at the latest, to initiate fresh short positions. Following that, a slump toward the previous monthly low surrounding 0.6685 can’t be ruled out. However, the last December’s bottom surrounding 0.6630 could challenge the AUD/USD bears afterward. On the flip side, a daily closing beyond the immediate hurdle, namely the support-turned-resistance line of 0.6835-40, can challenge the weekly high of 0.6920. Even so, the upside momentum remains unclear before the AUD/USD crosses a bit longer previous support line, close to 0.6970 at the latest. Also acting as an upside hurdle is the 0.7000 threshold and the mid-February swing high near 0.7030. Overall, AUD/USD rebound remains unimpressive as bears keep the reins. AUD/USD: Daily chart Trend: Bearish
Escalated Geopolitical Tensions Are Here To Stay, China And Russia Confirming Stronger Ties

Escalated Geopolitical Tensions Are Here To Stay, China And Russia Confirming Stronger Ties

Saxo Bank Saxo Bank 23.02.2023 09:04
Summary:  Rate hike worries were kept alive by the FOMC minutes, even though these were from the pre-January economic data prints that have been more hawkish than expected. US equities closed mixed as yields stayed near recent highs, while Chinese equities on the backfoot again amid escalating geopolitical tensions. USD strength pressuring AUD despite hawkish RBA. Crude oil prices slumped about 3% and Gold is back to testing key support at $1820 again.   What’s happening in markets? The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) fall for the second session with bond yields remaining at three-month highs US equity markets remain pressured as the US 10-year yields trades in the neighborhood of three-month highs at ~3.92% with the FOMC meeting minutes showing more tightening is on the horizon. The Nasdaq 100 fell for the second day, closing at its lowest level since February 1. The S&P500 also fell the second session - moving under the key 4,000 level, at 3,991, bringing the 200-day moving average just ~1% away - at the 3,941 mark - which will quickly be tested. Intel shares were a laggard down 2.2% after the computer processor giant cut its dividend 66% - declaring a quarterly payout of 12.5 cents a share. This followed on from Intel reporting one of its weakest quarterly earnings forecasts in its history. All in all, this highlights that companies are trying to preserve capital amid margin compression – and that’s been a major theme of earnings seasons and we think it will continue to play out in Q1 earnings reports.  Yesterday, Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) slid with A-shares leading Hong Kong's Hang Seng Index (HSI) fell by 0.5% on Wednesday, with ongoing tensions between the U.S. and China over the latter’s alleged support to Russia, reports about China instructing state-owned enterprise to phase out the big-4 audit firms as their auditors for national security considerations, and overnight U.S. equity market weaknesses weighing on investor sentiment. Shares of banks outperformed but failed to offset losses in technology and industrial stocks. HSBC (00005) surged 5.3% and Hang Seng Bank (00011:xhkg) climbed 2.7%, being the top two gainers in the benchmark Hang Seng Index. Techtronic (00669:xhkg), plunging 6.9%, was the biggest loser. JD.com (9618:xhkg), down 3% led the decline in the China interest space. Hong Kong released its budget for this fiscal year, including HK$5000 per head in consumption vouchers, stamp duty reduction for first-time homebuyers, and support for airline operators. Hong Kong retail and property developer stocks rallied, with Chow Tai Fook (01929) rising 2.2%, Wharf Real Estate Investment (01997:xhkg) up 2%, and Henderson Land (00012:xhkg) up 1.6%. After Hong Kong market close, Baidu (09888:xhkg) reported revenues and earnings beating market expectations despite weaker advertisements in Q4. The search engine giant announced a share buyback programme of up to USD5 billion.  Baidu’s ADR (BIDU:xnas) fell 3.7%. In mainland China, the CSI300 slid 0.9%. Construction materials, media, brokerage, and non-ferrous metals led the decline.  Australian equities (ASXSP200.I) fall for third day -  but reopening stocks in logistics and car dealing seem supported on stronger earnings.  The Australian share market is being pressured by Australian bond yields rising, with the 10-year yield at its highest levels since January 4 - after the RBA affirmed it will continue to hike rates in the months ahead. The ASX200 fell briefly under its 50-day moving average with mining giants BHP and Rio trading lower after Rio reported weaker than expected numbers after the market close yesterday – but guided for a stronger 2023.  Travel stocks are continuing to gain attention on the revival of the travel sector – with a lack of fleet becoming an issue to keep up with strong demand. Qantas posted a record profit of A$1 billion in the six months to Dec 31, and announced A$500 million share buy back – as its sees relentless flight demand in 2023 - underscoring the surge in travel, post the pandemic. In fact, Qantas’ flagged higher than expected spending being needed to buy an extra aircraft, including nine Airbus A220s to keep up with surging passenger demand. Capital expenditure in the financial year ending June will rise by as much as A$400 million to between A$2.6-A$2.7 billion and will get as high as A$3.2 billion in the following 12 months. Despite guiding for strong demand, shareholders didn’t like hearing costs will need to rise – which send Qantas shares down 6% to $6.02, below its 100-day moving average. Qantas’ outlook underscores the pace and intensify of the travel industry’s recovery. Logistics giant, Qube is trading up 10% after its half year profit rose 41% to $125 million and it also noted it sees stronger growth ahead in 2023 – supported by China’s reopening. Car dealership giant, APE is up by about 7% after its results beat expectations, and it guides for a stronger year ahead with demand for new vehicles continuing to outstrip supply. Today’s earnings highlight the reopening trade is gaining pace and also growing beyond market expectations – this could be a driver of the Australian equity market in the half year, while commodity companies continue to guide for a stronger year ahead – backing our bullish commodity outlook. FX: A stronger US dollar – pressures the Australian dollar lower With ‘a few’ FOMC members supporting a larger hike to curb inflation - with James Bullard still favouring hiking rates to 5.375% as fast of possible, the US dollar gained the upper hand, pressuring most G10 currencies lower including the Aussie dollar. The AUD/USD pair closed below trend support, which opens up for a move lower to 0.6629, being the December low. The AUD/NZD pair however made a cleaner break down lower - with the Aussie against the Kiwi falling below its 50-day moving average. Weight on the pair also came after Australian wage growth data and construction work done were softer than expected, meaning the path of RBA hikes could slow after the RBA makes its tabled hikes in the ‘months’ ahead, versus the RNBZ, that just hiked by 50bps yesterday but gave a hawkish guidance.  Crude oil (CLJ3 & LCOJ3) prices slump ~3% A firmer dollar and expectations of more rate hikes from the Fed gathering pace saw a bearish momentum return in commodities on Wednesday, even ahead of the release of the marginally hawkish FOMC minutes. Crude oil prices slid by close to 3% with WTI below $74/barrel and Brent at $80 despite a Reuters report stating that Russia intends to cut crude exports from its western ports by a quarter in March/February, after prior reports that the country is cutting production in March by 500k BPD. API inventories were however higher, with crude stockpiles increasing by 9.9mn barrels last week suggesting demand weakness. Gold (XAUUSD) slumps to support again Gold gave up its recent gains amid the renewed pressure from USD and higher yields which are now close to their cycle highs despite some softening yesterday. The yellow metal is now close to the $1820 support, which held up last week after inflation concerns escalated. A break below will bring the 200DMA at 1776 in focus.  Read next: The AUD/USD Pair Remains Under Selling Pressure, The GBP/USD Pair Is Below 1.21 Again| FXMAG.COM What to consider? FOMC minutes marginally hawkish Despite the FOMC minutes being pre-January inflation print, they sounded hawkish at the margin suggesting there may be room for further escalation of that rhetoric given how the economic data has fared since the Jan 31-Feb 1 Fed meeting. A few of the participants favoured raising the rates by 50bps, and all agreed more rate hikes are needed thrashing pivot hopes. It also noted that a number of participants observed that financial conditions had eased in recent months, which some noted could necessitate a tighter stance of monetary policy. While this risk of a recession was noted, data since the meeting including the most recent PMI numbers this week have continued to ease recession concerns. US considering release of intel on China’s potential arms transfer to Russia No reports of a peace treaty, and instead Chinese senior diplomat Wang Yi’s visit to Moscow was accompanied with China and Russia confirming stronger ties and President Xi’s visit to Russia in the coming weeks. This is suggesting that these escalated geopolitical tensions are here to stay, and our Defense equity theme basket provides a good way to hedge geopolitical risks. The red line for US and Europe will be if there is evidence that China is supplying weapons to Russia, and that could threaten a potential escalation of the war into a confrontation between Russia and China on the one side and Ukraine and the US-led Nato military alliance on the other. A WSJ article reported that Western nations have picked up on intelligence that Beijing might end its previous self-imposed restraint on weapons supplies to Russia, according to U.S. and European officials, although it appears that China hasn’t yet made a final decision. Rio Tinto’s profits and dividend slide in 2022, but Rio guides for a stronger 2023 - underpinned by ‘climate change scenarios’ Shares of Rio Tinto in NY fell 3.3% overnight and are down 3% on the ASX today after the world’s second largest miner reported underlying profit fell 38% to $13.28 billion in 2022 - vs the expected $13.96 billion consensus forecast. Rio’s profit fell after realised commodity prices fell from their records in the second half of 2022 – while earnings were also impacted by higher energy, raw materials prices and wages. Rio’s free cash flows fell 49% Y/Y in 2022 to $9.01 billion, resulting in Rio cutting its final (HY) dividend to $2.25 a share (down from $4.17), taking its total 2022 dividend to $4.92 - that’s a 60% pay-out ratio. Similar to BHP, Rio’s output looks stronger in 2023 with Rio guiding for higher copper, alumina, aluminium and iron ore production (but lower diamond production). It sees commodity prices being underpinned by ‘climate change scenarios’ which drive demand. Also note - in recent weeks - signs of a recovery in China have fuelled iron ore and copper prices up -with iron ore prices up 15% year to date. Rio is expanding its copper-gold presence, with the purchase of Turquoise Hill Resources- that will see Rio double its stake in the Oyu Tolgoi copper-gold project in Mongolia. Rio is also progressing the Rincon Lithium Project in Argentina – cementing itself in lithium. And despite the Serbian Government quashing its lithium mine Rio is ‘continuing to explore possibilities’. UOB (U11:xses) reports higher Q4 earnings Singapore bank UOB reported 13% increase in Q4 net income on higher net interest income offsetting the drop in fees from wealth management and rising impairment charges. Core net profit, after adjusting for one-off expenses related to the acquisition of Citigroup’s Malaysia and Thailand consumer businesses, rose 37% to S$1.4bn. UOB has recommended a final dividend of 75 cents a share. Together with the interim dividend of 60 cents a share, the total dividend for the full year will be $1.35 a share, representing a payout ratio of 49%. OCBC (O39:xses) reports results on Friday. NVIDIA (NVDA:xnas) jumps on AI chips outlook NVIDIA reported stronger than expected Q4 results with EPS of $0.88 on revenue of $6.05 billion, compared to analyst estimates of $0.81 on revenue of $6.01 billion. After-market gains were however driven by a strong outlook for artificial intelligence processors which is helping to offset the slowdown in PCs. Q1 revenue guidance at $6.50 billion, vs. expectations of $6.35 billion. Alibaba (09988:xhkg/BABA:xnas) and NetEase (09999:xhkg/NTES:xnas) are reporting earnings Reporting results on Thursday after the Hong Kong market close but before the U.S. market opens, Alibaba and NetEase are scheduled to announce earnings. Analysts are expecting Alibaba’s results from last quarter to be soft, with the Adjusted EPS expected to fall slightly to RMB1.999 from RMB2.015 a year ago. Investors’ focus will be on the outlook regarding the current quarter. Analysts are expecting NetEase to achieve growth in both revenues and earnings on strength in the Justice Mobile and Eggy Party games.   For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source:Markets Today: Pre-CPI FOMC minutes suggest more rate hikes – 23 February 2023 | Saxo Group (home.saxo)
Navigating Uncertainties: RBNZ's Inflation Gamble, Election Dynamics, and Kiwi Dollar's Path Ahead

Travel Stocks Are Continuing To Gain Attention

Saxo Bank Saxo Bank 23.02.2023 09:10
Summary:  The Nasdaq 100, and S&P 500 fall for the second session with bond yields remaining at three-month highs as the FOMC meeting minutes show more tightening is on the horizon. CPI is ahead. Australian equities fall for third day on bond yields remaining at January highs. Reopening bellwethers in logistics, car dealership and air travel guide for stronger earnings ahead. Qube and APE shares lift, while Qantas needs to splurge on more aircraft to keep up with demand. Plus what to know about Rio's results and why to watch the AUDNZD. What’s happening in markets?   The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) fall for the second session with bond yields remaining at three-month highs    US equity markets remain pressured as the US 10-year yields trades in the neighborhood of three-month highs at ~3.92% with the FOMC meeting minutes showing more tightening is on the horizon. The Nasdaq 100 fell for the second day, closing at its lowest level since February 1. The S&P500 also fell the second session - moving under the key 4,000 level, at 3,991, bringing the 200-day moving average just ~1% away - at the 3,941 mark - which will quickly be tested.  Intel shares were a laggard down 2.2% after the computer processor giant cut its dividend 66% - declaring a quarterly payout of 12.5 cents a share. This followed on from Intel reporting one of its weakest quarterly earnings forecasts in its history. All in all, this highlights that companies are trying to preserve capital amid margin compression – and that’s been a major theme of earnings seasons and we think it will continue to play out in Q1 earnings reports.   Australian equities (ASXSP200.I) fall for third day -  but reopening stocks in logistics and car dealing seem supported on stronger earnings The Australian share market is being pressured by Australian bond yields rising, with the 10-year yield at its highest levels since January 4 - after the RBA affirmed it will continue to hike rates in the months ahead. The ASX200 fell briefly under its 50-day moving average with mining giants BHP and Rio trading lower after Rio reported weaker than expected numbers after the market close yesterday – but guided for a stronger 2023.    Travel stocks are continuing to gain attention on the revival of the travel sector – with a lack of fleet becoming an issue to keep up with strong demand. Qantas posted a record profit of A$1 billion in the six months to Dec 31, and announced A$500 million share buy back – as its sees relentless flight demand in 2023 - underscoring the surge in travel, post the pandemic. In fact, Qantas’ flagged higher than expected spending being needed to buy an extra aircraft, including nine Airbus A220s to keep up with surging passenger demand. Capital expenditure in the financial year ending June will rise by as much as A$400 million to between A$2.6-A$2.7 billion and will get as high as A$3.2 billion in the following 12 months. Despite guiding for strong demand, shareholders didn’t like hearing costs will need to rise – which send Qantas shares down 6% to $6.02, below its 100-day moving average. Qantas’ outlook underscores the pace and intensify of the travel industry’s recovery. Logistics giant, Qube is trading up 10% after its half year profit rose 41% to $125 million and it also noted it sees stronger growth ahead in 2023 – supported by China’s reopening. Car dealership giant, APE is up by about 7% after its results beat expectations, and it guides for a stronger year ahead with demand for new vehicles continuing to outstrip supply. Today’s earnings highlight the reopening trade is gaining pace and also growing beyond market expectations – this could be a driver of the Australian equity market in the half year, while commodity companies continue to guide for a stronger year ahead – backing our bullish commodity outlook. FX: A stronger US dollar – pressures the Australian dollar lower  With ‘a few’ FOMC members supporting a larger hike to curb inflation - with James Bullard still favouring hiking rates to 5.375% as fast of possible, the US dollar gained the upper hand, pressuring most G10 currencies lower including the Aussie dollar. The AUD/USD pair closed below trend support, which opens up for a move lower to 0.6629, being the December low.The AUD/NZD pair however made a cleaner break down lower - with the Aussie against the Kiwi falling below its 50-day moving average. Weight on the pair also came after Australian wage growth data and construction work done were softer than expected, meaning the path of RBA hikes could slow after the RBA makes its tabled hikes in the ‘months’ ahead, versus the RNBZ, that just hiked by 50bps yesterday but gave a hawkish guidance.   What to consider with Rio Tinto's results?  Rio Tinto’s profits and dividend slide in 2022, but Rio guides for a stronger 2023 - underpinned by ‘climate change scenarios’  Shares of Rio Tinto in NY fell 3.3% overnight and are down 3% on the ASX today after the world’s second largest miner reported underlying profit fell 38% to $13.28 billion in 2022 - vs the expected $13.96 billion consensus forecast. Rio’s profit fell after realised commodity prices fell from their records in the second half of 2022 – while earnings were also impacted by higher energy, raw materials prices and wages. Rio’s free cash flows fell 49% Y/Y in 2022 to $9.01 billion, resulting in Rio cutting its final (HY) dividend to $2.25 a share (down from $4.17), taking its total 2022 dividend to $4.92 - that’s a 60% pay-out ratio.Similar to BHP, Rio’s output looks stronger in 2023 with Rio guiding for higher copper, alumina, aluminium and iron ore production (but lower diamond production). It sees commodity prices being underpinned by ‘climate change scenarios’ which drive demand. Also note - in recent weeks - signs of a recovery in China have fuelled iron ore and copper prices up -with iron ore prices up 15% year to date. Rio is expanding its copper-gold presence, with the purchase of Turquoise Hill Resources- that will see Rio double its stake in the Oyu Tolgoi copper-gold project in Mongolia. Rio is also progressing the Rincon Lithium Project in Argentina – cementing itself in lithium. And despite the Serbian Government quashing its lithium mine Rio is ‘continuing to explore possibilities   To listen to our global team's take on markets - tune into our Podcast.   Source: Financial Insights: S&P500 and ASX200 pressured. But Travel, Logistics & Car dealerships see stronger earnings ahead | Saxo Group (home.saxo)
Nvidia Is Rolling Out Its Own Cloud Service Together With Oracle

Nvidia Is Rolling Out Its Own Cloud Service Together With Oracle

Saxo Bank Saxo Bank 23.02.2023 09:17
Summary:  Sentiment remains under significant pressure as higher global yields and a firmer US dollar are pressuring sentiment and financial conditions around the world. Europe remains resilient, but can’t expect to hold out on its own if the negative pressure persists. In currencies, focus will swing to Bank of Japan Governor nominee Kazuo Ueda, who will testify before Japan’s Lower House on Friday in Japan. What is our trading focus? US equities (US500.I and USNAS100.I): watch the bond market for clues on direction US equity futures were wobbly yesterday finishing lower with S&P 500 futures closing at the 3,999 level, the first close below 4,000 since 20 January, after intraday briefly flirting with the 200-day moving average. The equity market has now erased a good portion of this year’s rally and the upcoming inflation figures and the bond market’s reaction will determine where we go from here. As we wrote in our equity note yesterday, the next potential themes getting attention is margin compression during the upcoming Q1 earnings in April and May and the discussion about structural inflation. US equity futures were lifted late last night by a better-than-expected outlook from Nvidia. S&P 500 futures are trading around the 4,015 level in early European trading hours. Hang Seng (HIG3) and CSI300 (03188:xhkg) failed to sustain an attempt to rally The Hang Seng Index and CSI300 bounced in early trading but the attempt to rally failed to sustain itself. Both the Hong Kong and mainland benchmarks slipped by about 0.3%. Techtronic (00669:xhkg) plunged 17% and was the biggest loser within the Hang Seng Index, following a forensic research firm published a report alleging the tool maker inflating profits by capitalizing expenses as assets. Baidu (09888:xhkg) lost 1.1% despite reporting revenues and earnings that beat market expectations and announcing a share buyback programme of up to USD5 billion. The hype of ChatGPT concept cooled down somewhat as AI-generated content names were sold on mainland bourses. FX: USD eases off the pedal ahead of BoJ Governor nominee Kazuo Ueda testimony The US dollar eased back lower as risk sentiment stabilized in the wake of another nervous session yesterday and after EURUSD nearly touched 1.0600, AUDUSD took a stab at its 200-day moving average, and USDJPY rose toward 135.00. Risk sentiment will likely continue to drive USD pairs in coming session, with the Friday PCE inflation data the next more important event risk on the calendar (though a weekly refresh of the US labour market data is up with today’s weekly claims number.) Elsewhere, plenty of attention on the Japanese yen later today, as Japan reports its January CPI figures tonight, but even more importantly as the nominee to replace Kuroda as governor of the BoJ will speak at a confirmation hearing at the Lower House of Japan’s parliament overnight. Crude oil (CLJ3 & LCOJ3) prices steady after slumping around 3% A firmer dollar and expectations of more rate hikes from the Fed gathering pace saw a bearish momentum return in commodities on Wednesday, even ahead of the release of the marginally hawkish FOMC minutes in the US session. Crude oil prices slid by close to 3% with WTI below $74/barrel and Brent at $80 despite a Reuters report stating that Russia intends to cut crude exports from its western ports by a quarter in March/February, after prior reports that the country is cutting production in March by 500k BPD. API inventories were however higher, with crude stockpiles increasing by 9.9mn barrels last week suggesting demand weakness. Prices recovered marginally overnight in Asia. Gold (XAUUSD) slumps to support again Gold gave up its recent gains amid the renewed pressure from USD and higher yields which are now close to their cycle highs despite some softening yesterday. The yellow metal edged closer to the $1820 support again yesterday, but has rebounded above 1,830 overnight. A break below 1,810-1,800 would bring the 200DMA at 1,776 in focus. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) ease back from cycle highs US Treasury yields eased back slightly from new cycle highs yesterday, with a strong 5-year auction showing bidding metrics at the higher end of the longer term range. A 7-year auction is up today and US January PCE inflation data is out Friday. The Japanese government bond market could sway global fixed income if nominee Kazuo Ueda makes any pointed comments in his confirmation hearing tonight. What is going on? FOMC minutes marginally hawkish Despite the FOMC minutes stemming from the FOMC meeting three weeks ago and prior to the January US CPI print, they sounded hawkish at the margin suggesting there may be room for further escalation of that rhetoric, given how the economic data has fared since the Jan 31-Feb 1 Fed meeting. A few of the participants favoured raising the rates by 50bps, and all agreed more rate hikes are needed thrashing pivot hopes. It also noted that a number of participants observed that financial conditions had eased in recent months, which some noted could necessitate a tighter stance of monetary policy. While this risk of a recession was noted, data since the meeting, including the most recent PMI numbers this week have continued to allay recession concerns. Apple announces ability to monitor blood sugar non-invasively Apple’s Exploratory Design Group, a previously secretive outfit within the company, is reporting success in measuring blood glucose levels without needing to break the skin to test via a blood sample, with a method using semiconductor chips and silicon photonics. The project has been ongoing for years. The hope is to integrate the technology longer term into the Apple Watch, helping to boost Apple’s effort to grow its presence in health care. US considering release of intel on China’s potential arms transfer to Russia Chinese senior diplomat Wang Yi’s visit to Moscow was accompanied with China and Russia confirming stronger ties and President Xi’s visit to Russia in the coming weeks. This is suggesting that these escalated geopolitical tensions are here to stay. The red line for US and Europe will be if there is evidence that China is supplying weapons to Russia, and that could threaten a potential escalation of the war into an outright proxy-war style confrontation between Russia and China on the one side and Ukraine and the US-led Nato military alliance on the other. A WSJ article reported that Western nations are considering making public the intelligence they possess that Beijing might end its previous self-imposed restraint on weapons supplies to Russia, according to U.S. and European officials, although it appears that China hasn’t yet made a final decision. Nvidia jumps on AI chips outlook Nvidia reported last night Q4 revenue of $6.05bn in line with estimates with the gaming segment beating estimates while the data center segment disappointed. Q4 EPS came in at $0.88 vs est. $0.81 driven by a higher than estimated Q4 gross margin of 66.1% vs est. 65.8%. Nvidia guides Q1 revenue of $6.5bn +2/-2% vs est. $6.35bn driven by strong demand in gaming and data center segments. The company is also rolling out its own cloud service together with Oracle which will later be offered by Microsoft and Google. Nvidia does not expect more downward pressure on GPU prices and thus the inventory risk is largely behind the company. While Nvidia keeps ignoring the cryptocurrency industry’s impact on demand we guess that the acceleration in speculation in cryptocurrencies and higher mining activity is what is driving Nvidia’s higher demand this quarter. Shares rose 8% in extended trading. BAE Systems sees muted 2023 revenue growth The UK-based defence company reports this morning higher than expected FY22 revenue at £23.3bn and underlying EBIT of £2.5bn. The earnings statement the company states that it expects 3-5% revenue growth in 2023 and 4-6% growth in EBIT suggesting expanding margins on pricing power amid surging demand. In our view, the revenue guidance seems a bit conservative given the signals over the weekend from the Munich Security Conference. Rio Tinto’s profits and dividend slide, guides for a stronger 2023 Rio Tinto shares declined 3.4% after reporting underlying profit fell 38% to $13.3bn in 2022 vs est. $14bn. Rio’s profit fell after realised commodity prices fell from their records in the second half of 2022 while earnings were also impacted by higher energy, raw materials prices and wages. Rio Tinto’s free cash flows fell 49% y/y in 2022 to $9bn, resulting in the miner cutting its final (HY) dividend to $2.25 a share down from $4.17, taking its total 2022 dividend to $4.92. Rio Tinto’s output looks stronger in 2023 with higher copper, alumina, aluminium and iron ore production What are we watching next? Market sentiment is fragile after recent break lower in equities – next moves pivotal Rising global yields and the firmer US dollar have risk sentiment and financial conditions under significant pressure, particularly in the US indices, but also in emerging markets and credit spreads on corporate bonds. European equities have fared better, but have lost their upside momentum. With the break of key supports in the US, the next levels of even more critical support are not far away to the downside (200-day moving average in the US S&P 500 at 3,941 on the cash index, for example). Volatility expansion is a prominent risk on a capitulation in sentiment, with further pressure from rising yields or rising concerns of geopolitical tensions possible triggers. Earnings to watch Today’s key earnings are in the European session, so the impact from earnings in the US session is minimal. Thursday: EssilorLuxottica, Deutsche Telekom, Munich Re, Kuaishou Technology, Eni, Anglo American, BAE Systems Friday: BASF, Monster Beverage Economic calendar highlights for today (times GMT) 1000 – Eurozone Final Jan. CPI 1100 – Turkey Rate Decision 1330 – US Jan. Chicago Fed National Activity Index 1330 – US Q4 GDP Revision 1330 – US Weekly Initial Jobless Claims 1530 – US Weekly Natural Gas Storage Change 1600 – US Feb. Kansas City Fed Manufacturing Activity 2330 – Japan Jan. National CPI BoJ Governor Nominee Kazuo Ueda confirmation hearing 0001 – UK Feb. GfK Consumer Confidence   Source: Financial Markets Today: Quick Take – February 23, 2023 | Saxo Group (home.saxo)
FX Daily: Time for the dollar to pause?

The EUR/USD Movement Is Weak Since There's Almost No Important Market Events Right Now

Paolo Greco Paolo Greco 23.02.2023 09:19
M5 chart of EUR/USD EUR/USD continued to trade the same way it did a few days before. A rather weak downward movement, which is completely justified and expected. I have already mentioned that I expect the euro to continue to fall, because the factors that have been pushing the pair up for several months have been worked off by the traders more than once. Now it needs a technical bearish correction, which is hardly over. Besides, the European Central Bank is not in a hurry to toughen its hawkish rhetoric, while the Federal Reserve gladly does. The problem of inflation is more acute for the ECB, not the Fed. Generally, I think that the pair's systematic decline will continue for some time to come. There were only two signals yesterday, and there were no important events during the day, except the Fed minutes. Therefore, all the reversals during the day were not related to fundamental events. The first rebound from 1.0658 triggered the 20 pips decline, which was enough only for the Stop Loss to Breakeven. The pair returned to 1.0658 and rebounded from this level again, which created the second sell signal. This time the price went down about 50 pips, but traders had to close the position earlier, closer to the evening and manually. Therefore, the profit was probably about 20 points. COT report: Due to a technical glitch, fresh COT reports have not been released since January 24. Therefore, we can only analyze reports published before this date. The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since September. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. In the reporting week, non-commercial traders opened 9,500 long positions and 2,000 short ones. The net non-commercial position grew by 7,500. The number of long positions exceeds that of short ones by 134,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue. H1 chart of EUR/USD EUR/USD is still bearish and trades below the Ichimoku indicator lines. The downward movement is not strong, but at the same time it is stable. The movement is weak since there's almost no important market events right now, so the pair is moving according to our forecasts, but it's still too slow. But such movement is still better than a flat. On Thursday, important levels are seen at 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0762, and also Senkou Span B lines (1.0708) and Kijun Sen (1.0653). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On February 23, the EU will release its second estimate of inflation for January. It is unlikely to differ much from the first, so I don't expect the market to react to this report. In the U.S. the GDP report for the fourth quarter will be published in the second estimate, so I don't expect the market to react to this report either. All other events of the day will be even less important than those listed above. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders. Relevance up to 08:00 2023-02-24 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335890
US core inflation hits 5.5% and it's the second lowest reading since November 2021

FX Daily: Dollar bears will have to be patient

ING Economics ING Economics 23.02.2023 10:47
Last night's release of the February FOMC minutes provided little comfort to dollar bears who were looking for signs that the Fed was increasingly buying into the disinflation/slowdown narrative. Yet the subsequent rise in US yields and strengthening of the dollar has been quite muted. It's a quiet day for data in the G10 space, but EM FX is interesting USD: FOMC minutes can keep the dollar supported Despite Federal Reserve Chair Jerome Powell sounding quite relaxed at the 1 February press conference and declaring that the 'disinflation process has started', the minutes of that meeting were largely hawkish. The consensus agreed that further rate increases were needed and that inflation remained unacceptably high. There were no hints of a pause and very little to divert market pricing of three more 25bp hikes from the Fed over the March, May and June meetings. This backdrop can keep the dollar supported in the near term and potentially into the 22 March FOMC meeting, where the debate will focus on whether the Fed Dot Plots will retain a median view of a 100bp easing cycle in 2024. For dollar bears, both activity and price data will have to soften over the coming weeks to make an impact on an otherwise hawkish Fed. The next set of meaningful US data is tomorrow's core PCE data for January - but even that is likely to see the core month-on-month reading rising to 0.4% from 0.3%. And for today, the market should not take too much notice of revisions to the strong fourth quarter GDP data -  driven by an inventory build and weaker imports. Our first quarter game plan is that DXY does not hold onto these gains. But for the time being, it looks like DXY wants to probe higher to the 105.00 area with outside risks this quarter to the 106.00/106.50 area. Chris Turner EUR: PMIs drowned out by hawkish Fed The better run of European PMIs earlier this week has rather been drowned out by the hawkish Fed. And actually, the German Ifo proved something of a reality check, where the current assessment of business conditions continued to deteriorate. The good news for EUR/USD is that the re-pricing of the European Central Bank cycle has nearly matched that of the Fed - meaning that the two-year EUR:USD swap differential has not substantially widened in favour of the dollar. In fact, it was interesting to read in the FOMC minutes - under the market developments section - that the Fed felt it was interest rate differentials and the improved Rest of World growth prospects that had been weighing on the dollar into January. These are the factors we have been using in our scenario analyses.  For the short term, EUR/USD remains soggy and it is hard to rule out a break under 1.0600 towards the 1.05 area. Our game plan remains that 1.04/1.05 could now be some of the lowest EUR/USD levels of the year - but it feels like EUR/USD could trade on the offered side for a few weeks yet. Chris  Turner EUR/SEK has seemed to find support at the key 11.00 level for two consecutive sessions after rising bets on Riksbank tightening had put pressure on the pair. We could see a temporary break below 11.00, but our view is that a sustained SEK rally is premature. Our short-term fair value model shows how there is no risk premium left on EUR/SEK: in other words, markets have priced out the risk of a collapse in the housing market in Sweden and a consequent slump of the whole economy. While hawkish Riksbank rhetoric is helping the krona, markets may have moved too quickly on the optimistic side. Upcoming data may underpin the rising risks to the Swedish economy, and could trigger a rebound in EUR/SEK before a sustainable move below 11.00 can materialise - we think from the end of the second quarter onwards. Francesco Pesole GBP: BoE's Mann speaks today Sterling is just about holding onto Tuesday's gains when strong PMI data triggered a sharp re-pricing of the Bank of England curve. Markets now price a further 50bp of BoE hikes by June - taking the Bank Rate to 4.50% - and the policy rate being kept there until early 2024. For today, the focus will be on a speech at 1030CET by the BoE's Catherine Mann. She speaks at the Resolution  Foundation on 'The results of rising rates: Expectations, lags and the transmission of monetary policy'. This sounds like it could be a dovish speech - i.e. let's pause and see what prior tightening has done. However, she is a hawk and with no clear signs of an easing in tight labour market conditions we doubt she will want to knock the current market pricing of the BoE cycle. We think EUR/GBP probably traces out a 0.8750-0.9000 range for the first half of the year, while cable should find support under 1.20. Also - whisper it. Sterling offers quite attractive risk-adjusted yields in the G10 space. Chris Turner ZAR: Seeking alpha There is much talk of 'stock-picking' or 'seeking alpha' this year as financial markets may no longer be purely risk on/risk off. In other words, local stories are having a greater bearing and that is certainly true in the EM FX space. We are no longer looking at the kind of homogeneous returns driven purely by the Fed/China story.  Here we will quickly look at two topics. The first is that some emerging currencies are lagging as politicians start to resist high interest rates and question central bank independence. This has been a loose fear in Brazil with the new Lula administration questioning whether the central bank needs to lift its inflation target. The Brazilian real has lagged gains in EM FX this year and we expect it to continue underperforming. More surprising have been events in Israel, where the Foreign Minister heavily criticised the central bank for hiking rates 50bp on Monday. Normally an outperformer, the Israel shekel was hit hard on the news and the Israeli government has spent the rest of the week trying to re-affirm the independence of the central bank. We like the shekel and see USD/ILS trading back to 3.30/3,40 later this year. But we will now have to watch political developments closely. Meanwhile, the South African government yesterday announced a major financial support plan for state utility, Eskom. The plan has been greeted well by Eskom bondholders, though the support means South Africa's sovereign debt to GDP profile deteriorates. The South African rand has been an underperformer this year and near 8% implied yields through the three-month forwards and the China recovery story have not been enough to provide support. We think investors will continue to pause for thought before chasing yields in the rand. For those investors wanting to take exposure in EM FX, we continue to think the Mexican peso remains attractive. It has one of the highest risk-adjusted yields in the EM FX space (implied yields corrected by implied volatility from the FX options market) and the Mexican sovereign trades on a narrower CDS than most after Mexico refused to add on debt during the pandemic. USD/MXN looks biased to the 18.00 area. Chris Turner Read this article on THINK
Rates Spark: Crunch time

The Euro Fell Below 1.06, The USD/JPY Pair Is Close To 135.00

Kamila Szypuła Kamila Szypuła 23.02.2023 13:00
The dollar held shy of multi-week peaks against other major currencies on Thursday, a day after minutes from the Federal Reserve's last policy meeting supported, but did not add to markets' view the central bank will raise rates further. Minutes from the Federal Reserve meeting released last night confirmed the hawkish rhetoric of Fed officials over the past two weeks. The key takeaway, of course, is that the Fed is committed to keeping interest rates higher for longer to bring inflation down to the 2% target. The impact of the protocol was somewhat dampened as the meeting was preceded by a series of metrics released in February, most notably employment figures, which showed the US economy was doing well, leaving more room for the Fed to raise interest rates to bring down inflation. Markets will be focused on US GDP as well as the accompanying labor market data in the form of jobless claims. US GDP is expected to come in marginally weaker than the previous. USD/JPY USD/JPY struggles to gain any significant traction on Thursday and trades in a tight band just below the psychological 135.00 mark for the first half of the European session. The yen pair started the day above 134.90, in the Asian session USD/JPY fell towards 134.70. In the European session, USD/JPY increased and is now just below 135.00. In addition, the USD/JPY pair is also weighed down by hawkish concerns around the Bank of Japan (BoJ), due to the imminent end of the term of governor Haruhiko Kuroda. Alternatively, Fed policymakers are poised for further interest rate hikes, according to the latest Federal Open Market Committee (FOMC) meeting minutes, which in turn is fueling demand for the US dollar. EUR/USD EUR/USD in the Asian session was above 1.06, and the pair traded close to the 1.0630 level. In the Asian session, EUR/USD fell below 1.06. This morning brought data on inflation in the euro zone for January, in which annual inflation fell to 8.6% in the euro zone and to 10.0% in the EU. In January, food, alcohol and tobacco accounted for the largest contributors to the euro area's annual inflation rate, followed by energy, services and non-energy industrial goods, according to data released by Eurostat. In addition, EU members will hold further talks on a new package of sanctions against Russia after failing to reach an agreement on Wednesday. According to Reuters, the proposed package includes trade restrictions worth more than €10 billion. Russia is reportedly planning to cut oil production in response to Western sanctions. The heightened risk of rising energy prices, which will contribute to stronger inflation in the eurozone, could help the euro hold its position in the short term, as such a situation would force the European Central Bank (ECB) to raise interest rates further after March. Read next: Tesla Opens Its Global Engineering Headquarters In Palo Alto, California| FXMAG.COM GBP/USD The cable pair in the Asian session was rising towards 1.2070, but in the European session it lost momentum and fell to the level of 1.2020. Currently, GBP/USD is at 1.2022. GBP/USD extended its decline towards 1.2000 early Thursday after reversing much of the PMI-driven gains on Wednesday. Markets will be keeping a close eye on US stocks and Brexit developments for the remainder of the day. AUD/USD The AUD/USD pair was rising towards 0.6840 in the first hours of trading. Then the pair of the Australian fell and rebounded again. In the European session the Aussie Pair traded below 0.6820, currently the AUD/USD pair is trading above 0.6820. Australian capital expenditure data beat estimates across the board (reaching its highest level since Q4 2021) showing optimism in these sectors. Source: investing.com, finance.yahoo.com
Market Focus: European Data Releases, ECB Survey, US FOMC Minutes, and UK Bond Supply

The RBNZ Raised Rates And New Zealand Dollar (NZD) Moved Higher But Quickly Pared Those Gains

Kenny Fisher Kenny Fisher 23.02.2023 14:08
The New Zealand dollar remains in calm waters, with little reaction to the Reserve Bank of New Zealand’s rate hike or the FOMC minutes. The RBNZ raised rates by a half-point on Wednesday, as the central bank remains aggressive in its battle to curb inflation. The move was in line with expectations and the New Zealand dollar moved higher but quickly pared those gains. The increase brings the cash rate to 4.75%, its highest level since 2009. With inflation running at a 7.2% clip, the RBNZ will have to keep raising rates until there is clear evidence that inflation has peaked. There was a strong possibility that the RBNZ would deliver a second straight hike of 0.75%, but Cyclone Gabrielle, which caused massive damage, led the bank to opt for a more modest hike of 0.50%. RBNZ Governor Orr said that it was too early to assess the monetary policy implications of Gabrielle but Orr noted that the rebuilding efforts would add to inflationary pressures. The rate statement was crystal clear with regard to future policy. The statement said although there are signs of inflation falling, the core rate and inflation expectations are too high and “monetary conditions need to tighten further” in order to bring inflation back down to the target of 1%-3%. FOMC says more hikes needed The FOMC minutes sounded a lot like the RBNZ statement, with Fed policy makers saying that there were signs that inflation had eased but more rate hikes were needed to lower inflation back to the 2% target. The minutes noted that the labour market remains robust, which is contributing to continuing upward pressures on wages and prices.” The Fed meeting took place before the blowout January employment report, and concerns over a hot labour market will be even more amplified. An important takeaway from the minutes is that although the vote to hike by 0.25% was unanimous, two members (Bullard and Mester) saw a case for a 0.50% increase. The Fed has been consistent in its hawkish stance, and what has changed over the past few weeks is that market pricing is more aligned with the Fed, with the markets no longer projecting a rate cut late in the year. Still, market pricing could shift again if the next batch of key data weakens ahead of the March 22 meeting. Read next: Tesla Opens Its Global Engineering Headquarters In Palo Alto, California| FXMAG.COM NZD/USD Technical There is resistance at 0.6275 and 0.6357 0.6162 and 0.6080 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Australian dollar against US dollar - "It seems that the currency will soon hit a price above 0.68"

The Australian Dollar Has A Potetial For Continue To Decline To The Support

InstaForex Analysis InstaForex Analysis 24.02.2023 08:00
The Australian dollar traded with a range of 30 pips yesterday, closing the day near the opening level. The currency pair is rising in today's Asian session, the Marlin oscillator is also turning up. The correction to the nearest resistance at 0.6873 (low of January 19) was probably outlined. Once the correction ends, I expect the pair to move to 0.6730. On the four-hour chart, the price converges with the oscillator, the signal line of which is about to move into positive territory. The first resistance is the MACD line near 0.6848. Going beyond this level will allow the price to continue rising up to 0.6873. If the price overcomes yesterday's low at 0.6784, it will continue to decline to the support at 0.6730.   Relevance up to 04:00 2023-02-25 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335990
The GBP/USD Pair Has Experienced An Average Volatility - 14.03.2023

The GBP/USD Price Paused The Decline At The MACD Line

InstaForex Analysis InstaForex Analysis 24.02.2023 08:01
Yesterday, the pound closed the day down by 32 points. The price is aiming for the target support at 1.1914, but it is hindered by the Marlin oscillator, which is persistently approaching the neutral zero line. The oscillator moving into positive territory will help the price to develop the movement to the target resistance of 1.2155. The main news for today will be reports on consumer spending and income data in the U.S. for January. Spending is expected to increase by 1.3%, while income by 1.0%. Such figures may prevent the pound from developing a correction. On the four-hour chart, the price paused the decline at the MACD line. The Marlin oscillator in the area of the downtrend. If the MACD line is attacked again and successfully at that, once the price surpasses 1.1985, the downtrend will prevail, and the price will try to reach the support at 1.1914. Consolidating below this level opens the way to 1.1737 (high on September 13, 2022). The price may rise once it crosses the signal level of 1.2073, the high on February 16. Relevance up to 04:00 2023-02-25 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335992
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

The EUR/USD Pair Waiting For The Development Of Events With The Formation Of Confirming Signs

InstaForex Analysis InstaForex Analysis 24.02.2023 08:02
On Thursday, the euro showed some volatility, not being able to break away from the target level of 1.0595. This morning, the quote is also fluctuating near that level, but the Marlin oscillator started reversing upward, so it might correct to the resistance at 1.0660. If the price finds the strength to settle under 1.0595, then next week we can expect a hike to the target level of 1.0443/70. On the four-hour chart, the nearest resistance to the corrective growth is the MACD indicator line (1.0622). Once it overcomes this line, we can expect further price growth. The Marlin oscillator, which has come out of its own descending channel upwards, counts on the bulls' potential success. There is a traditional nuance - a false exit of the examined line beyond the boundary of the geometrical construction, so we're waiting for the development of events with the formation of confirming signs, both for bulls and bears. Relevance up to 04:00 2023-02-25 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335994
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The EUR/USD Pair Recovered 50% Of Its Losses From The Downward Trend

Paolo Greco Paolo Greco 24.02.2023 08:07
On Thursday, the EUR/USD currency pair maintained its rather weak downward trend. Although corrections continue to occur frequently, the pair is not losing much daily. On the other hand, it happens virtually daily and steadily. Recall that following a several-month increase of about 1,500 points, we have frequently warned that the European currency is severely overbought. Sincerely, there weren't any fundamental causes for this increase. There was another trend, a downward one that lasted two years, right before this one. Understandably, a correction of at least 400 points was required following such a significant and protracted downward trend. So we succeeded. The pair recovered 50% of its losses from the downward trend, raising the question: why should the euro continue to rise? While the ECB and Fed both raise rates at the same time, the Fed does it more quickly and forcefully. In other words, the dollar side is where this advantage lies. 90% of the time, the US economy won't experience a recession, but the EU economy could still get caught in a "trap." The US is experiencing a harsher, faster, and longer decline in inflation than the EU. The Fed's continued use of tough and aggressive rhetoric benefits the US currency as well. As a result, practically all factors continue to be in favor of the US dollar, which has declined significantly over the past six months. And now it has a legitimate reason to recoup its losses. Nevertheless, on the 24-hour TF, the pair figured out the Senkou Span B line, which we've discussed numerous times. The 38.2% Fibonacci level is 1.0609 as well. The fall might continue since there hasn't been a rebound from these supports yet. And if it persists, the pair runs the risk of dropping to prices of $1.03 and $1.02. This means that the euro may be priced similarly to the dollar within the next month. Except for the senior linear regression channel, all indicators on the 4-hour chart point downward. As a result, the downward trend continues and is not cause for concern. Even the CCI indicator cannot enter the oversold area and create a warning signal regarding an upward reversal since the downward movement is too weak. The "moderately hawkish" Fed policy. As we've already stated, in general, we don't think the Fed minutes are a big deal. Rarely do they contain crucial information, but they occasionally do. That was not the case on Wednesday night. The only thing worth mentioning is the regulator's monetary committee's continued "hawkish" stance, which still aims to raise the rate without pausing. However, as it turned out, several committee members decided to endorse a 0.5% rise all at once at the previous meeting. They certainly remained the minority, though. We feel that this fact should not mislead traders, because, for example, in the last three meetings of the Bank of England, two out of nine committee members voted against tightening. Even still, the rate continues to rise by 0.5% as 7 additional members support them. As a result, unless there is "more than half" of them, "a few officials voting for 0.5%" in the United States do not matter. Also, the likelihood of this decreases with each meeting. Even so, the rate is still increasing by 0.25%. Yet, it is already 4.75%. Even if inflation slows down, it will eventually stop growing. We, therefore, think that it will grow by a quarter point for however long it takes, rather than a predetermined number of times as many experts prefer to forecast. We think the Fed will respond to each inflation report and take appropriate action. For instance, we can already predict that the rate will rise by 0.25% in March with a 100% likelihood. Only a 0.1% yearly decline in inflation in January was unsatisfactory to the regulator. As a result, additional tightening is necessary. The public debt and its ceiling were also discussed in the protocol, which may soon cause the financial system to run into them once more. It is noteworthy that at least twice a year, a new season of the series "raising the debt ceiling in the United States" is released. And each time, the corresponding conclusion is reached following a protracted debate in Congress and the Senate. As a result, we think that this is rarely a problem and not even worth paying attention to. The key rate is expected to rise consistently throughout the first half of 2023, thus the dollar is still growing steadily. We think that the euro/dollar pair can decline for a few days in relative calm. As of February 24, the euro/dollar currency pair's average volatility over the previous five trading days was 60 points, which is considered to be "normal." Thus, on Friday, we anticipate the pair to move between 1.0525 and 1.0645 levels. A new round of correction will be signaled by the Heiken Ashi indicator's upward movement. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trade Advice: The EUR/USD pair is still moving downward. Unless the Heiken Ashi indication turns up, you can continue to hold short positions with targets of 1.0525 and 1.0498. If the price is fixed above the moving average line with a target of 1.0742, long positions can be opened. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. The short-term trend and the direction in which to trade right now are determined by the moving average line (settings 20.0, smoothed). Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones. Relevance up to 01:00 2023-02-25 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335986
Small factors combine to pressure credit

The EUR/USD Pair Might Still Have Room To Drop Towards 1.0480

Oscar Ton Oscar Ton 24.02.2023 08:13
Technical outlook: EURUSD slipped through the 1.0575 low on Thursday before finding bids coming. The single currency pair is seen to be trading close to 1.0600 at this point in writing as the bulls prepare to come back in control. A pullback could happen from here or from 1.0500 in the near term towards 1.0800 and up to 1.0900 levels. The bears will enter the market thereafter. EURUSD might still have room to drop towards 1.0480 to take out initial support and then produce the much-awaited pullback rally. On the other hand, if prices manage to break above 1.0700 which is short-term resistance, it would confirm that a meaningful bottom is in place at 1.0575. The bulls will be inclined to push the price higher through 1.0800. EURUSD is unfolding a larger-degree corrective drop towards 1.0500 and 1.0100 in the medium term. Also, note that 1.0100 is close to the Fibonacci 0.618 retracement of the earlier rally between 0.9535 and 1.1025 respectively. A high probability remains for the larger-degree trend to resume higher towards 1.1025 and further from 1.0100 strong support. Trading idea: The potential drop against 1.1025 in the medium term Good luck!   Relevance up to 07:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313917
Analysis Of The GBP/USD Pair Over 6- 10.03 Week

The GBP/USD Currency Pair Resumed Its Bearish Trend

Paolo Greco Paolo Greco 24.02.2023 08:17
On Thursday, the GBP/USD currency pair resumed its downward trend and once more consolidated under the moving average line. We specifically covered this in earlier articles. Although the pound does not yet have the basis for significant growth, it may occasionally adjust fairly sharply. This causes consolidation above the moving average, which some people may misinterpret as a change in trend. Remember that the UK released a package of rather optimistic, but not noteworthy, statistics this week. The British pound experienced a considerable increase in February across all three business activity indicators. This growth is what caused the price to consolidate above the moving average. The very following day, however, traders forgot about business operations and focused on the technical picture and overall fundamental background, which indicated that the pound should decrease rather than increase. Recall that, following a long and strong downward trend, the value of the British pound has also increased significantly in recent months. It was therefore required to make a technical correction upward in global terms. The question of why the pound will keep growing occurred after the pair had adjusted (like the euro currency) by 50%. Since there was no response, at least now a downward correction is required before it can be observed. Now, a lot will depend on the BA and the Fed's monetary policy, which in turn will depend on the dynamics of inflation in 2023. On the 24-hour TF, however, the movement over the past few months appears to have been more of a flat than a trend. The pair alternately determines the upper border of the channel and then the lower one as they move between 1.1900 and 1.2440. As a result, the long-term flat rate for the pound is already official. Although we still anticipate its conclusion and the restart of the downward movement, we first need to clear the level of 1.1900. The pound is generally in an unfortunate position and does not appear to want to keep declining. Perhaps the UK's high inflation rate is to blame, which leads market players to anticipate more and more rate increases from the Bank of England. It is still the case. Can BA keep up with inflation? As we've already mentioned, inflation is still the most crucial indicator for the foreign exchange market, and it often has a unique significance in the UK. This is so because despite raising the rate to 4%, the Bank of England was unable to significantly limit the rate of increase in consumer prices. The rate of inflation remained above 10%. However, some economists and government representatives are already concerned about a new global acceleration of inflation in 2023. It should be kept in mind that oil and gas, whose prices have dropped dramatically over the past six months, played a big influence in the collapse of this indicator. Thus, if energy costs start to increase once more, this might very well catalyze a new rise in inflation. Moreover, the rate has already been increased by the Bank of England ten times. Theoretically, they could raise it to at least 10% and ruin its economy, but it seems improbable that they would do so. It turns out that the crucial concern right now is how far the regulator can tighten monetary policy, if at all. And the pound will change in 2023 based on the response to this query. In the UK, wages are another major issue because they keep going up as a result of a labor shortage in many sectors. We previously reported that many migrant workers decided to leave the UK after Brexit because the process of acquiring work documents was difficult. There is a labor shortage in Britain as a result of their covert work in other European nations. Because of the shortage, workers now have a choice in which company they want to work for. Therefore, businesses are compelled to provide more enticing terms to recruit an employee for themselves. All of this raises salaries, which raises inflation. According to Catherine Mann's statement from yesterday, some companies will raise salaries by 6-7% only to keep employees. She also pointed out that even for the following year, inflation estimates are significantly higher than the desired 2%. Hence, Britain may have been caught in an inflation trap for a long time, and getting out of it will be very challenging. If the Bank of England is unable to consistently tighten monetary policy, the pound may sooner or later start to weaken again globally. We anticipate a decline in the following days to a level of 1.1900, which is just below the recent local minimum on the 4-hour TF. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 104 points. This value is "average" for the dollar/pound exchange rate. As a result, on Friday, February 24, we anticipate movement that is limited by the levels of 1.1890 and 1.2098. The upward reversal of the Heiken Ashi indicator will signal a new round of upward correction. Nearest levels of support S1 – 1.1963 S2 – 1.1902 S3 – 1.1841 Nearest levels of resistance R1 – 1.2024 R2 – 1.2085 R3 – 1.2146 Trade Suggestions: In the 4-hour timeframe, the GBP/USD pair once again stabilized under the moving average. So, until the Heiken Ashi indication turns up, it is still possible to hold short positions with targets of 1.1902 and 1.1890. If you consolidate above the moving average, you can start trading long with targets of 1.2098 and 1.2146. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. The short-term trend and the direction in which to trade right now are determined by the moving average line (settings 20.0, smoothed). Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.     Relevance up to 01:00 2023-02-25 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335988
Rates Spark: Nothing new on the dovish front

The Euro (EUR) Is Moving Slowly To The Downside

Paolo Greco Paolo Greco 24.02.2023 08:20
5M chart of EUR/USD EUR/USD was trading flat for most of the day, although we saw a bit of a downward bias. Thus, in general, everything goes according to plan. The euro is moving slowly to the downside, which we've been waiting for quite a long time. The macroeconomic and fundamental background is nearly absent, so it is very difficult to expect a strong movement now. Yesterday, the EU published its second estimate inflation report, which did not have any particular meaning or impact on market sentiment. It was the second estimate of the indicator for January. The same goes for GDP in the US, also the second estimate. With the overall volatility of the pair around 50 pips, it is hardly necessary to talk about any reaction of traders to these reports. Technically there is always a reaction, but who cares about 20 pips movement? Speaking of trading signals, everything is still disappointing. The first trading signal was formed closer to the evening, when the price reached 1.0581. Naturally, there was no sense to work it out at night. Therefore, traders should not open positions on Thursday, if they are guided by our signals and tips. Such weak movements can persist for another week or two. COT report: Due to a technical glitch, fresh COT reports have not been released since January 24. Therefore, we can only analyze reports published before this date. The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since September. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. In the reporting week, non-commercial traders opened 9,500 long positions and 2,000 short ones. The net non-commercial position grew by 7,500. The number of long positions exceeds that of short ones by 134,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue. 1H chart of EUR/USD On the one-hour chart, the pair maintains the bearish mood and trades below the Ichimoku indicator lines. The downward movement is not strong, but at the same time it is stable. The movement is weak since there's almost no important events on the market now, so the pair is moving according to our forecasts, but it's still doing it too slowly. Formally, we have a trend, but it looks like a flat most of the time. On Friday, important levels are seen at 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0762, and also Senkou Span B lines (1.0708) and Kijun Sen (1.0641). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On February 24, there are no important events planned in the European Union. In the US, we only have the Personal Income and Spending data and the University of Michigan Consumer Sentiment Index. Completely secondary reports that are unlikely to provoke any reaction. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.   Relevance up to 01:00 2023-02-25 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335982
RBNZ preview: Fiscal spending argues for a hawkish 25bp hike

The Kiwi Pair (NZD/USD) Is Likely To Remain Directionless

TeleTrade Comments TeleTrade Comments 24.02.2023 08:32
NZD/USD is sensing heat in climbing above the 0.6240 resistance despite a firmer appeal for risk-sensitive assets. A promise of a cyclone relief package by NZ PM Hipkins in an already inflated environment will worsen the situation further. An upbeat US labor market and consumer spending could propel the US PCE Inflation data. The NZD/USD pair is facing barricades in overstepping the immediate resistance of 0.6240 in the Tokyo session. Earlier, the Kiwi asset displayed a solid rebound from the round-level support of 0.6200 as investors shrugged off hawkish Federal Reserve (Fed)-inspired volatility. The asset is likely to remain directionless as investors are awaiting the release of the United States Personal Consumption Expenditure (PCE) Price Index for fresh cues. The US Dollar Index (DXY) is demonstrating signs of volatility contraction amid a mixed market mood. The recovery moves from the risk-sensitive assets are bizarre in comparison with the price action by the USD Index. S&P500 futures have recovered their entire losses as investors have stopped worrying about higher rates by the Fed for a longer period in its battle against persistent inflation. Accordingly, the 10-year US Treasury yields have dropped further below 3.87%. The recent promise of a cyclone relief package by the New Zealand Prime Minister (PMI) Chris Hipkins has set inflation projections on fire. It is worth noting that the New Zealand economy is already suffering from galloping inflation and now further inducement is making the inflation situation more vulnerable. Regarding interest rate projections, Reserve Bank of New Zealand (RBNZ) Assistant Governor, Karen Silk cited “The projected cash rate peak is not set in stone.” He further added that all rate hike options are on the table for the April meeting and the RBNZ will do all it takes to control inflation. The week is expected to end with a power-pack action propelled by the release of US PCE Inflation data. The street is expecting a rebound in the price pressures as the US labor market is getting stronger each day and households’ spending has recovered dramatically.  
Analysis Of Situation Of The USD/INR Pair

Strong Oil Prices Recently Weighed On The Indian Rupee (INR)

TeleTrade Comments TeleTrade Comments 24.02.2023 08:36
USD/INR picks up bids to pare the biggest daily loss in a month. Firmer Oil price, hawkish Fed bets weigh on Indian Rupee. US Core PCE Price Index eyed for clear directions on US inflation conditions and Fed’s next move. USD/INR prints mild gains around 82.70 as it consolidates the biggest daily loss in a month during early Friday. In doing so, the Indian Rupee (INR) pair struggles to cheer cautious optimism in the Asia-Pacific region as Oil price extends the previous day’s rebound from the monthly low. Markets in the Asia-Pacific region appear slightly positive, ex-China, as government nominees for the Bank of Japan (BoJ) board appear in no mood to challenge the easy money policies. Alternatively, mixed headlines surrounding China, due to its peace plan for Ukraine and ties with Russia, join the US-China readiness for trade talks despite not sharing the details and criticizing each other on various issues to challenge the market sentiment. Elsewhere, India is yet to recover from the Adani-led equity fiasco and the government’s push for cutting the budget deficit, which in turn raises doubts about one of the top Asian economies’ growth prospects. It’s worth noting that strong Oil prices recently weighed on the INR due to India’s reliance on energy imports. While portraying the mood, Wall Street closed on the positive side but the S&P 500 Futures recently failed to extend the recovery moves from the monthly low by retreating to 4,015, down 0.10% intraday at the latest. Further, the US 10-year Treasury bond yields seesaw around 3.87%, making it less active on the day, whereas the US two-year bond coupons stay inactive near 4.69% by the press time. Moving on, USD/INR traders should pay attention to the risk catalysts for clear directions ahead of the Federal Reserve’s (Fed) favorite inflation gauge, namely the Core Personal Consumption Expenditures (PCE) Price Index. That said, the latest slew of positive US data keeps buyers hopeful. Also read: US PCE Inflation Preview: Can the US Dollar turn bullish for good? Technical analysis Although a four-month-old descending resistance line, around 82.95 by the press time, keeps challenging USD/INR bears, 50-day Exponential Moving Average (EMA) level surrounding 82.25 puts a floor under the price.
InstaForex's Ralph Shedler talks Euro against Japanese yen

Bank Of Japan Ueda Cited The Current Policy Easing As Appropriate To Achieve Pre-Pandemic Growth

TeleTrade Comments TeleTrade Comments 24.02.2023 08:42
USD/JPY is showing a volatility squeeze after some wild moves post-speech from BoJ Governor Nominee Kazuo Ueda. Bank of Japan Ueda considered the current monetary policy as appropriate for achieving the persistent 2% inflation target. Federal Reserve to continue policy tightening spell as upbeat US labor market could propel inflation ahead. USD/JPY is auctioning in a Rising Wedge which indicates a loss in the upside momentum and cements a bearish reversal. USD/JPY remained in vigorous action in the Asian session as Bank of Japan (BoJ) Governor Nominee Kazuo Ueda delivered his first speech after his selection. The asset displayed wild gyrations in the 70-pips range and returned to its mean. The major has turned sideways as a volatility expansion is generally followed by a contraction in the same. At the time of writing, the pair is demonstrating a back-and-forth action around 134.70 and is expected to continue to remain sideways till the release of the United States Personal Consumption Expenditure (PCE) Price Index for fresh impetus. The US Dollar Index (DXY) is struggling to find a decisive move as investors have shifted to the sidelines ahead of the US PCE data. S&P500 futures have turned volatile amid dubious gestures from the Chinese government toward the ongoing Russia-Ukraine war. The war situation between Russia and Ukraine has entered in the second year and the street is expecting some bold moves from Russia, which could accelerate geopolitical tensions further. Earlier, the United States and Germany warned Beijing not to deliver weapons to Russia, as reported by DER SPIEGEL. The warning from the US and Germany came after the headlines of negotiations between China and Russia for the purchase of 100 strike drones by Moscow. Bank of Japan Ueda cites current monetary policy as appropriate The street was keenly awaiting the speech from BoJ Ueda as the Japanese administration promised that the government will consider an exit from the decade-long expansionary monetary policy with the novel Bank of Japan’s leadership. Bank of Japan Ueda cleared that the decade-high inflation is backed by higher import prices and has nothing to do with the domestic demand and labor cost index, which are extremely weak. Bank of Japan Ueda cited the current policy easing as appropriate to achieve pre-pandemic growth levels. Apart from that, the Bank of Japan Ueda cited that the central bank will look for normalization of the stimulant monetary policy after confidently achieving the 2% inflation target. The BoJ Kuroda successor refrained from discussing specifics of the Yield Conversion Control (YCC) for now. Investors should be aware that the Bank of Japan stretched the YCC on the Japanese Government Bonds (JGBs) to 0.5% from above and below zero in its December monetary policy. Context of a pause in Federal Reserve’s policy tightening spell looks over After a quarter of sheer inflation softening in the United States, the street started anticipating that the Federal Reserve (Fed) would pause the rate hike cycle for a while and would allow the current monetary policy to tame the stubborn inflation. However, the US inflation turned out to be extremely persistent and started showing its true colors. The US Consumer Price Index (CPI) looks set to rebound after a declining spell led by the tight labor market and a solid revival in consumer spending. The upbeat labor market is characterized by declining jobless claims, multi-decade lowest Unemployment Rate, and rising demand for fresh talent if we sideline some lay-off announcements by giant techies. USD/JPY technical outlook USD/JPY is auctioning in a Rising Wedge chart pattern that indicates a loss in the upside momentum on an hourly scale. The aforementioned chart pattern results in a bearish reversal after a breakdown. The asset is struggling to reclaim an auction above the 50-period Exponential Moving Average (EMA) at 134.75. Meanwhile, the Relative Strength Index has surrendered oscillation in the bullish range of 60.00-80.00. A confident break into the bearish range of 20.00-40.00 will result in activation of the downside momentum.
Bank of England is expected to hike the rate by 25bp. Kelvin Wong talks Euro against British pound

The EUR/GBP Cross Pair Is Expected Further Downside Movement

TeleTrade Comments TeleTrade Comments 24.02.2023 08:46
EUR/GBP retreats from intraday high, snaps two-day rebound from monthly low. One-week-old resistance line, key Fibonacci retracement level challenge immediate upside. 0.8840 appears a tough nut to crack for the EUR/GBP bulls. Multiple levels surrounding 0.8760 can probe bears afterward. EUR/GBP bears return to the table, after a two-day absence, as the quote eases from the intraday high to 0.8815 during the initial hour of Friday’s European session. In doing so, the cross-currency pair fades bounce off the lowest levels since January 31 while retreating from the convergence of the one-week-long descending trend line and 61.8% Fibonacci retracement level of January 19 to February 03 upside, close to 0.8820 at the latest. Adding strength to the pullback moves is the sluggish RSI (14) near the 50 levels, as well as the pair’s previous downside break of the support lines from late January. As a result, the EUR/GBP bears are all set to revisit the latest trough surrounding 0.8780. However, multiple levels marked during late January could challenge the pair sellers near 0.8760 then after. Should the quote remains weak past 0.8760, the odds of witnessing a fresh low of the year 2023, currently around 0.8720 can’t be ruled out. On the contrary, a successful break of the 0.8820 resistance confluence isn’t an open welcome to the EUR/GBP bulls as the previous support line from January 30, around 0.8830 by the press time, could challenge the upside moves. It’s worth noting that the support-turned-resistance from January 19 joins the 200-Simple Moving Average (SMA) to highlight the 0.8840 as the key upside hurdle. EUR/GBP: Four-hour chart Trend: Further downside expected
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The USD/CAD Pair Traders May Witness Lackluster Moves Ahead

TeleTrade Comments TeleTrade Comments 24.02.2023 08:51
USD/CAD picks up bids to pare day-start losses, reverses the previous day’s pullback from seven-week high. Oil price cheers hopes of economic recovery, geopolitical tension amid sluggish session. Talks surrounding Fed concerns join mixed moves of bond market to probe Loonie traders. USD/CAD grinds near intraday high as it reverses the day-start losses, as well as dialing back the previous day’s u-turn from a seven-week high, around 1.3545, heading into Friday’s European session. In doing so, the Loonie pair fails to justify the firmer prices of Canada’s main export item, namely WTI crude oil. That said, the black gold rises 0.65% intraday to $76.15 by the press time, extending the previous day’s rebound from the two-week low. While tracing the reasons, the recently firmer statistics from the US and Europe, as well as other major economies, join China’s readiness to infuse the economy towards more output to propel Oil prices. Additionally favoring the WTI bulls are the news suggesting more geopolitical tensions surrounding Russia and Ukraine, as well as the Sino-American tussles. Elsewhere, the US Dollar Index (DXY) snaps a three-day uptrend as it grinds near 104.55 while DXY bulls struggle for clear directions after refreshing a seven-week high the previous day. The US Dollar’s latest weakness could be linked to the dicey markets as the market’s fears that the strong US data and further Federal Reserve (Fed) rate hikes are already priced in. The same seemed to have weighed on the US Treasury bond yields. On the same line could be the mixed headlines surrounding China, due to its peace plan for Ukraine and ties with Russia, as well as due to the US-China readiness for trade talks, despite not sharing the details and criticizing each other on various issues. Against this backdrop, the S&P 500 Futures fade recovery moves from the monthly low by retreating to 4,015, down 0.10% intraday at the latest. Further, the US 10-year Treasury bond yields seesaw around 3.86%, making it less active on the day, whereas the US two-year bond coupons stay inactive near 4.69% by the press time. Given the dicey markets and cautious mood ahead of the key US data, namely the US Personal Consumption Expenditures (PCE) Price Index for January, the USD/CAD pair traders may witness lackluster moves ahead. However, hawkish hopes from the Fed’s preferred inflation gauge may not hesitate from disappointing the Loonie pair buyers if printing downbeat numbers. Also read: US PCE Inflation Preview: Can the US Dollar turn bullish for good? Technical analysis Although Thursday’s bearish spinning top lures the USD/CAD sellers, the nearness to the 100-DMA support of 1.3510 and bullish MACD signals suggest limited downside room for the pair
Gold Trading Analysis: Technical Signals and Price Movements

FX Daily: Geopolitics sees pro-risk trades unwind

ING Economics ING Economics 24.02.2023 09:07
US data and Fed commentary is keeping the dollar bid. At the same time, geopolitics and reports that China is preparing to increase its support for Russia are also seeing an unwind of 2023 global recovery trades. February and March are seasonally strong months for the dollar and 4.50% overnight deposit rates can keep the dollar supported a little longer  Incoming Bank of Japan Governor Kazuo Ueda USD: Dollar strength is not just a Fed story It has been quite surprising to see USD/CNH move back above the 6.90 area and also see USD/KRW stay bid above 1300. The 2023 narrative was meant to be about US disinflation, China re-opening and $/Asia playing a major part in the broad dollar decline. That has not been the case. Away from the US disinflation/Fed story, the rally in USD/Asia and USD/CNH may also be down to a re-appraisal that: a) Asian trade surpluses may be harder to come by given the slowdown in Europe and the US, plus b) geopolitics creeping into investment decisions. For example, reports overnight suggest that China may be preparing to up its support for Russia consistent with recent briefings out of Washington. The fear of an escalation in US sanctions may be prompting investors to re-appraise some of their investment holdings along geo-political lines.  This comes at a time of the year when the dollar is seasonally strong (February and March) and the bar to put money to work outside of 4.50% yielding overnight dollar deposits is not particularly low. Away from geopolitics, yesterday's US fourth quarter GDP revision saw the core deflator revised up to 4.3% annualised, from the 3.9% originally reported, and today should see the January core PCE deflator at a sticky 0.4% month-on-month. In other words, the US disinflation/bearish dollar narrative will find little from today's data. DXY looks like it can continue to press 105.00 and should USD/CNH trade back up to 7.00 on geopolitics, we could be looking at 105.60/106.00 on DXY.  Chris Turner EUR: Eurozone core inflation strikes new high Yesterday's revisions to eurozone January inflation saw core inflation revised to a new cycle high of 5.3% year-on-year. No wonder ECB officials such as Isabel Schnabel are keen to dispel any ideas that the disinflation process has started. And a core view slowly permeating through the market is that the ECB has perhaps another 100bp+ of tightening to do, but crucially will be leaving rates at those high levels throughout a large chunk of 2024. This should be a key factor in keeping EUR/USD supported on a multi-quarter view.  The eurozone calendar is light today, but given the dollar bid on the back of US data/geopolitics, the EUR/USD bias looks to a press of 1.0575 support and a potential move to 1.0500. Chris Turner GBP: A good week for UK data Following on from Tuesday's strong PMI release, the UK outlook has received another boost today in the form of a big jump in GFK consumer confidence. This has now returned to levels not seen since last April. At the margin, this will make the Bank of England's life harder as it seeks to cool aggregate demand to soften inflation. Markets are now quite comfortable in pricing the BoE's Bank Rate at 4.50% at the end of this year – pricing 25bp hikes in March and May. Slightly better growth prospects, sticky inflation and some further monetary tightening are the story across the US, the eurozone and the UK at the moment – suggesting bilateral FX rates do not need to move too much. This has seen three-month GBP/USD implied volatility drift under 10% and would tend to favour more modest moves in the spot. We think support levels at 1.1850/1950 may hold over the next couple of weeks. BoE dove Silvana Tenreyro speaks at 1730CET today. Chris Turner JPY: Few bombshells from BoJ Governor nominee The Japanese yen event risk has been overcome today in the form of testimony from the nominee Bank of Japan (BoJ) Governor Kazuo Ueda. The yen and Japanese government bond (JGB) yields moved little on his remarks that a dovish policy setting was still appropriate, but that normalisation would be needed were the BoJ to conclude that inflation had achieved 2% on a stable basis. The forward market for 10-year JGB yields does, however, price a further widening of the 10-year JGB band (+/- 50bp around zero) within the next three months. And the FX options market prices volatility around the key BoJ monetary policy dates of 10 March and 28 April. Our view is that this corrective dollar bounce could carry USD/JPY up to the 136/137 area over the next couple of weeks. But assuming that we are correct with the US disinflation story dominating again in the second quarter, USD/JPY should be back towards 125/126 into the summer. Chris Turner Read this article on THINK TagsYen FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
InstaForex's Ralph Shedler talks Euro against Japanese yen

Traders Are Now Realizing That Ueda Is Unlikely To Provide Any Tightening Of Monetary Policy Signs Anytime Soon

Ed Moya Ed Moya 24.02.2023 09:19
Central bank watchers knew it would be a surprise if BOJ governor nominee Kazuo Ueda gave any substantial hints about how he will consider policy normalization.  Ueda reiterated that the BOJ’s current policy is appropriate. He noted that “Japan’s trend inflation is likely to rise gradually. But it will take some time for inflation to sustainably and stably achieve the BOJ’s 2% target. FX traders were not surprised that Ueda did not signal he was in a rush to tweak Yield Curve Control (YCC). Ueda has not made a decision at a policy meeting since 2005, so he will likely refrain from providing any hints that lock him into any monetary policy stances. The Japanese yen has rallied quite a bit on expectations that Governor Kuroda’s replacement would likely be quicker in abandoning YCC and eventually ending negative rates. Every BOJ watcher read Ueda’s opinion piece that said the BOJ must consider an exit strategy from its ultra-loose monetary policy and review its extraordinary stimulus.  Traders are now realizing that Ueda is unlikely to provide any tightening of monetary policy signs anytime soon, especially before a policy review. The yen won’t be rallying on tightening bets ahead of Kuroda’s last dance (March 10th meeting) and with incoming Governor Ueda’s first policy meeting in April. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Forex: Euro against US dollar - technical analysis - May 18th

Analysis Of Movement Of The EUR/USD Pair In Short Term

Torben Melsted Torben Melsted 24.02.2023 09:54
EUR/USD continues to follow the expected path lower towards the ideal corrective target seen at 1.0498 to complete wave 4 and set the stage for a new impulsive rally in wave 5 towards 1.1360 - 1.1390. Short-term we see minor resistance near 1.0626 that ideally will cap the upside for more downside pressure towards the 1.0498 target. Relevance up to 09:00 2023-02-27 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313937
Technical Outlook Of The EUR/JPY Pair Movement In Short Term

Technical Outlook Of The EUR/JPY Pair Movement In Short Term

Torben Melsted Torben Melsted 24.02.2023 09:56
EUR/JPY was rejected nicely after the throw-over failure and should continue lower in the days ahead. We are looking for wave C lower towards 134.10 to complete the corrective decline from 148.30 and set the stage for the next impulsive rally higher. Short-term we expect minor resistance at 143.03 to be able to cap the upside for a continuation lower to strong support near 140.00 and ultimately a break below here too for the expected decline towards 134.10.     Relevance up to 09:00 2023-02-27 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313939
Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

The USD/CAD Pair Has Good Sign For The Further Upside Movement

Peter Jacimovic Peter Jacimovic 24.02.2023 10:48
Technical analysis: USD/CAD has been trading upside and there market respected the rising trend-line, which is good sign for the further upside movement. Due to the strong upside movement and the upside momentum, I see potential for the higher price towards the upside structural objectives. Upside objectives are set at 1.3610 and 1.3660 Stochastic oscillator is showing fresh bull cross, which is another good sign for the further upside movement. Key support is set at 1.3525   Relevance up to 10:00 2023-02-25 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313957
Saxo Bank Podcast: The Bank Of Japan Meeting And More

The Inflation Report Remained Obscured By Kazuo Ueda's Conflicting Signals

InstaForex Analysis InstaForex Analysis 24.02.2023 11:03
The release of data on Japan's inflation increase and Kazuo Ueda's speech, the new president of the Japanese Central Bank, caused the dollar-yen pair to fall below the base of the 134th figure during Friday's Asian trading session. Ueda's controversial messages Despite the southern momentum, Ueda's inconsistent statements prevented the USD/JPY bears from building on their profits. On the one hand, he asserted that the monetary policy's existing parameters "remain reasonable" and commendable. Ueda did, however, maintain the flexibility for adjustment should inflation continue to show upward dynamics. Such contradictory signals stopped the downward momentum, and the USD/JPY pair thereafter moved back to the 135th figure's margins. Nevertheless, notwithstanding the sellers of the pair's ambiguity, it can be assumed that the Bank of Japan will continue to support the yen over the long term. It is clear that Ueda wants to keep things the same, but his rhetorical style also suggests that he may be open to change in the future. Speaking before the Japanese parliament, Kazuo Ueda asserted that rising import costs for raw materials, rather than strong consumer demand, are mostly to blame for the country's inflationary acceleration. He also stated that the future of the national economy is "very uncertain." One of Ueda's words worked in the yen's favor. According to him, the Central Bank may think about normalizing monetary policy if trend inflation "substantially increases" and the Bank of Japan target can be achieved over the long term. One way to read the expressed phrase is as a warning to the markets to be wary. Nonetheless, Ueda argued that the Central Bank should take its time making the right decisions and that, for the time being, it "should maintain ultra-low interest rates to support a fragile economy." In other words, Kazuo Ueda made it apparent that he currently does not disagree with the course of action taken by the Bank of Japan's current governor. If adjustments are needed in the future, they will be made gradually, consistently, and smoothly; there won't be any sudden 180-degree turns. It should be highlighted that Kazuo Ueda still retains the option of normalizing the monetary policy's settings, in contrast to Kuroda. This is a crucial aspect that will come up later (likely in the second half of the year), especially if Japan's inflation rate gains momentum. The current state of affairs is consistent with this scenario, at least as far as Japanese inflation is concerned, as today's announcement eloquently attests. Report on Japan's rising inflation The scenario is as follows. The consumer price index as a whole increased by 4.3% in January, which is the fastest pace of growth since December 1981. The 40-year record was also updated by the core CPI, which includes energy prices but excludes fresh food. Excluding food and energy costs, the consumer price index increased by 3.2% from the previous year in October. Nearly every aspect of the aforementioned report performed better than expected in the green zone. It is important to note that for the past ten months, inflation has been higher than the Bank of Japan's target rate of two percent. According to the release's structure, prices for food, clothing, furniture, and household products all increased in Japan last month, while prices for medical care, education, and transportation services decreased. The price of utilities increased by 15% all at once, with gas and electricity rising by 20% and roughly 25%, respectively. It is important to note that several major Japanese organizations and businesses have recently started actively raising pay in light of the recently released inflation report. Particularly industry giants like Toyota and Honda. The day before yesterday, representatives of Toyota said that the firm will abide by the union's requests regarding pay and bonuses: wages would increase "at the fastest pace in the last two decades." Honda, a manufacturer of cars, followed suit and declared that it will adhere to all pertinent union obligations. The business announced the biggest pay boost since 1990, a 5% compensation increase. Conclusions The inflation report remained obscured by Kazuo Ueda's conflicting signals. Certainly, Japan's inflation is still on the rise, but Haruhiko Kuroda's replacement made it plain that he would not "jump into war" right once after assuming office (i.e. in early April). At the same time, he acknowledged that the Japanese regulator might need to change its normalization strategy, but it is still too early to discuss this in detail. This stance exerted pressure on the yen, which struggled to maintain its position when paired with the dollar. I believe that the USD/JPY pair will soon follow the dollar, which is anticipating the most significant inflation report regarding the expansion of the underlying PCE index (to be published at the start of the American session on Friday). Making trading decisions on the pair after its publication is thus advised. The key price target in this situation will be 136.50, which corresponds to the upper line of the Bollinger Bands indicator and the upper limit of the Kumo cloud on the D1 timeframe.   Relevance up to 09:00 2023-02-25 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336024
The German economy underperformed in the Q4 of 2022, GDP declined

The German economy underperformed in the Q4 of 2022, GDP declined

Kenny Fisher Kenny Fisher 24.02.2023 14:28
The euro is down slightly on Friday. EUR/USD has been slowly moving lower and is down 1.1% this week. German GDP misses estimate The German economy, the biggest in the eurozone, underperformed in the fourth quarter of 2022. GDP declined by 0.4% in Q4 2022 q/q, below the 0.5% gain in Q3 and shy of the forecast of -0.2%. On an annualized basis, GDP slowed to 0.9%, down from 1.4% in Q3 and below the forecast of 1.1%. It was a rough end to 2022 for the German economy – the energy crisis, high inflation and the end of fuel subsidies all contributed to negative growth in the fourth quarter. The German consumer spent less in Q4 compared to Q3, but the silver lining is that consumer confidence continues to rise. GfK Consumer Climate is estimated to have improved to -30.5 in March, up from -33.8 in February. Consumer confidence is still deep in negative territory but has now accelerated over five consecutive months. The Federal Reserve remains in hawkish mode, as members continue to remind the markets that inflation is too high and more rate hikes are coming. The recent employment and retail sales reports helped convince the markets that the Fed means business, and investors are no longer talking about a ‘one and done’ rate hike in March with rate cuts before the end of the year. The markets appear to have bought into the ‘higher and longer’ stance that the Fed has been pushing, and expectations of a 0.50% hike in March have risen. According to CME’s FedWatch, the markets have currently priced the odds of a 25-basis point hike at 76% and a 50-bp increase at 24%. Earlier this week, the split was 83% for a 25-bp hike and 17% for a 50-bp rise.   EUR/USD Technical 1.0604 is a weak resistance line. Above, there is resistance at 1.0704 There is support at 1.0513 and 1.0413 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

EUR/USD, GBP/USD And AUD/USD Drop, USD/JPY Rose Above 135.00

Kamila Szypuła Kamila Szypuła 24.02.2023 13:25
The dollar index rose to seven-week highs on Friday as investors braced for an extended hold on higher US interest rates after a series of strong economic data in the US. Investors await data on the US Personal Consumer Expenditure (PCE) Price Index. The annual core PCE price index, the Fed's preferred measure of inflation, is projected to fall to 4.3% in January from 4.4% in December. The core consumer price index (CPI) fell to 5.6% y/y in January from 5.7% in December. A modest fall in core PCE inflation should not come as a big surprise at this point. The PCE Core Price Index is expected to increase by 0.4% m/m. In the event that the monthly value exceeds the market consensus, the US dollar may gain strength. It is worth noting, however, that markets are already fully pricing in two more Fed rate hikes of 25 basis points in March and May. USD/JPY USD/JPY started the day with a decline towards 134.20. Then the yen pair moved upwards. USD/JPY hit 135.00 and is now trading at 135.3850 The Japanese yen may fall further after the new governor of the Bank of Japan, Kazuo Ueda, signaled that very loose monetary policy should be maintained. Ueda's comments after his approval in the lower house of Japan's parliament did not produce any clear hawkish signal that could fuel a resurgence of speculative demand for the yen in the near term. EUR/USD EUR/USD traded above 1.06 in the Asian session, mostly in the 1.0605-1.0610 range. In the European session, the EUR/USD pair lost momentum and returned to levels below 1.06. Currently, the pair is trading just below 1.06 at 1.0580. The euro started the European session weaker after worse than expected data on German GDP. GDP data showed that the German economy contracted (-0.4%) in the fourth quarter of 2022 and brought recession talk back. Moreover, a weaker-than-expected rise in monthly core PCE inflation could trigger a USD correction and help the EUR/USD rebound ahead of the weekend. Read next: Visa Success At The Expense Of Small Businesses| FXMAG.COM GBP/USD The cable pair in the Asian session and in the beginning of the European session traded around 1.2020. The GBP/USD pair lost momentum and fell below 1.20, at 1.1987. British consumers have become more optimistic about their personal finances and economic outlook, but their sentiment is much lower than it was before the COVID-19 pandemic, research firm GfK said on Friday. Improved consumer sentiment does not always translate to improved spending, as evidenced by the flat retail sales reading for February from the Confederation of British Industry on Thursday. However, energy prices are finally backing down from last year's highs and the UK economy is not looking as bad as expected just a few weeks ago, according to this week's Purchasing Management Index (PMI) business activity survey that showed an unexpected rebound in early February. AUD/USD The pair of the Australian in the Asian session stayed above 0.6819, but with the start of the European session it began to fall below 0.68. Currently the Aussie Pair is trading below 0.6870 The Australian yen gained in value after the alleged head of Japan's central bank maintained the status quo on monetary policy and was apparently in no rush to end its massive stimulus programme.. Source: investing.com, finance.yahoo.com
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

The BoJ is hoping that the government’s massive stimulus package will help bring down inflation

Kenny Fisher Kenny Fisher 24.02.2023 13:45
The Japanese yen is slightly weaker on Friday. In the European session, USD/JPY is trading just above the 135 line. Ueda pledges to continue easy policy Incoming Bank of Japan Governor Kazuo Ueda appeared at a parliamentary hearing on Friday and the markets were all ears. The buzz-word from Ueda was ‘continuity’, which really wasn’t a surprise. Ueda has already said that the current policy is appropriate and he maintained this stance at the hearing. Ueda said that ultra-low rates are needed while the economy is fragile and ruled out fighting inflation by tightening policy. With inflation running at 4%, above the BoJ’s target of 2%, there is pressure on Ueda to abandon or at least adjust the Bank’s yield control policy (YCC), which is being criticised for distorting market functions. Ueda treated this hot potato with caution. He acknowledged that the YCC had caused side effects but said that the BoJ should evaluate whether recent steps such as widening the band around the yield target would ease these problems. The takeaway from Ueda’s testimony is that he is in no hurry to shift central bank policy. Still, there is strong pressure on Ueda to address YCC, which is damaging the bond markets. Investors should not discount the possibility that Governor Kuroda could widen the target yield band at the March meeting in order to relieve pressure on Ueda. If Kuroda doesn’t act, the bond markets could respond with massive selling before Ueda takes the helm of the BoJ in April. The inflation pressures facing the BOJ were underscored by National Core CPI for January, which rose from 4.0% to 4.2%. This was just shy of the 4.3% estimate, but still the highest reading since 1981. The BoJ has insisted that inflation is temporary (remember that line from the ECB and the Fed?), and is hoping that the government’s massive stimulus package, which includes subsidies for electricity, will help bring down inflation.  Read next: Visa Success At The Expense Of Small Businesses| FXMAG.COM USD/JPY Technical USD/JPY is testing resistance at 134.85. Above, there is resistance at 135.75 1.3350 and 131.90 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  Source: Yen edges lower after BoJ's Ueda testimony - MarketPulseMarketPulse
Impact of Declining Confidence: Italian Business Sentiment in August

Forex Weekly Summary: EUR/USD Ended The Week Below 1.06 And GBP/USD Below 1.20, USD/JPY Ended The Week Higher Above 136.00

Kamila Szypuła Kamila Szypuła 25.02.2023 20:01
The dollar climbed to seven-week peaks on Friday, after data showed U.S. inflation accelerated while consumer spending rebounded last month, reinforcing expectations that the Federal Reserve may need to hike interest rates a few more times this year to curb the surge in prices. On Friday, the core PCE index in the US amounted to 4.7% y/y at the end of January against expected 4.3% and 4.6% earlier. USD/JPY USD/JPY started the week at 134.1140. The weekly trend of the yen pair was up as the dollar was supported by strong data from the US economy and no support came from Japan. By Wednesday, USD/JPY was trading around 134.75. The first break above 135.00 was on Thursday but the momentum did not hold, USD/JPY rose again on Friday and passed 136.00 and recorded the highest trading level of the week at 136.4960. USD/JPY closed the week at 136.4060 The Japanese yen weakened past 135 per USD, dropping to its lowest level in over two months after incoming BoJ Governor Ueda stated the central bank must maintain its ultra-low policy stance for the time being. The official also discarded immediate changes to the bank’s yield curve control, supporting bond prices worldwide. The dovish policy is set to stay despite the steady increase in Japanese consumer prices. Headline inflation jumped to 4.3 percent in February EUR/USD It was a difficult week for the EUR/USD pair. The euro pair managed to fall below 1.05 this week. The euro pair started the week at 1.0683 and then fell. Weekly high above 1.07 (1.0705). The trend was down and the lowest level was reached by the EUR/USD pair at 1.0540. The week will close at 1.0547. S&P Global's Composite Purchasing Managers Index for the currency bloc hit a seven-month high of 50.3 in January. That was above both December's 49.3 and the flash reading of 50.2. For the first time in seven months, the number was above the key figure of 50 that separates expansion from recession. The data came after better official Eurostat data from the beginning of the week. They showed that the eurozone economy grew by 0.1% in the last quarter of 2022, beating expectations for a decline of 0.1%. GBP/USD For the cable pair, the week was mixed. GBP/USD started trading for the week at 1.2043, closing the week was much lower at 1.1942. The best day for the cable pair was Tuesday as the pair received support from the UK economy (positive PMI readings) and GBP/USD traded above 1.21, which was the week's high (1.2141). Trading lows occurred at the end of the week, with the all-time low at 1.1935. The British pound fell below $1.20, hovering around its lowest level since January 5, as data pointing to a still-tight US labor market and sticky US inflation fueled expectations that the Federal Reserve would keep interest rates higher for longer. At the same time, the Bank of England will raise the interest rate by another 25 basis points to 4.25% next month to combat double-digit inflation before the end of the current tightening cycle. AUD/USD The Aussie pair started trading at the 0.6869 level and on the first day rose above the 0.69 level. Above 0.69, the AUD/USD pair reached a weekly high of 0.6922. The Australian couple did not enjoy an increase for long and in the following days it decreased. Similar to European counterparts, AUD/USD reached its lowest level on Friday. The weekly low was at 0.6721. The Aussie Pair ended the week trading at 0.6727. Source: finance.yahoo.com
ECB cheat sheet: Difficult to pull away from the Fed

EUR/USD Pair Has Maintained A Moderate Downward Trend

Paolo Greco Paolo Greco 26.02.2023 12:29
Long-term outlook. Throughout the current week, the EUR/USD currency pair has maintained a moderate downward trend. As we have repeatedly stated in recent weeks, we anticipate the European currency to decline because it has increased excessively over the last six months, as is seen in the above illustration. Everything is normal from the perspective of a correction against the downward trend, given that the trend itself lasted two years and that a correction must be made against it. It is time and an honor to know, but the growth of the euro was not driven by fundamental or macroeconomic issues, thus the correction is a correction. This week, the macroeconomic and fundamental backdrops were mostly absent. You may remember several speeches by Fed officials, a report on the US economy, or a report on inflation in the European Union, but we have mentioned before that the significance of these publications lies solely in their signboard. The second estimate included GDP and inflation. Unsurprisingly, the market did not respond particularly well to this data. Also, it did not adhere to the so-called "moderately hawkish" Fed policy. We think that the market is now dominated by technical factors. Because the pair successfully passed the Kijun-sen line on the 24-hour TF and now has a strong probability of consolidating itself below the Ichimoku cloud, we think the fall may continue up to the levels of 1.0312 or 1.0200. In reality, the euro can achieve price parity and distance itself from its multi-year lows by doing just that. The betting component is still, in our opinion, crucial. The Fed is not going to ease down and occasionally gives hints of a more significant rate hike than anticipated. The euro is overbought at this time. The hikes that were previously known have been determined by the market, and the ECB has not yet indicated that it will tighten monetary policy further. It appears that the euro is falling and has a very good chance of continuing to move south. COT Technical difficulties prevented the delivery of COT reports for over a month, but on Friday, one of the delayed reports for January 31 was made available. Since a month has gone by since then and we still don't have access to the data from the subsequent reports, which are more or less relevant, this report is not meaningful. As a result, we keep looking at the available data. The illustration accurately reflected market conditions for the euro currency during the past few months. The aforementioned illustration makes it very evident that, from the start of September, the net position of significant players (the second indicator) has been improving. At about the same time, the value of the euro started to increase. Although the net position of non-commercial traders is currently "bullish" and growing virtually weekly, it is the relatively high value of the "net position" that now permits the upward trend's impending end. The first indicator, which frequently occurs before the trend's end and shows that the red and green lines are very far apart from one another, signals this. Although the euro has already begun to decline, it is still unclear if this is just a brief pullback or the start of a new downward trend. The number of buy-contracts from the non-commercial group increased by 9.0 thousand during the most recent reporting week, while the number of short positions declined by 7.1 thousand. The net position thus increased by 16.1 thousand contracts. Currently, there are 148 thousand more buy contracts than sell contracts for non-commercial traders. Nonetheless, the correction has been developing for a while, so it is obvious even without news that the pair should keep falling. Analysis of fundamental events In addition to the aforementioned activities, business activity indices in various industries were released in the United States and the European Union, while in Germany, an inflation report revealed an acceleration in consumer price growth. Again, there was essentially no response to these figures; nevertheless, it should be emphasized that business activity in the service sectors improved while output declined. Regarding the German inflation news, Jerome Powell and a few other central bankers specifically discussed it. After this process was finished, the price of oil and gas, which has been declining for the previous six months, either started to rise or stopped falling. Consequently, it is safe to divide into two all pessimistic predictions for the return of inflation to 2% during the next year or two. To combat excessive rates of price growth, central banks will have to continue their efforts rather than simply lowering the rate and waiting. As a result, we anticipate seeing plenty of financial surprises this year that will have an impact on how the pair moves. Trading strategy for the week of February 27 to March 3: 1) The pair started moving lower on the 24-hour period, surpassing the Kijun-sen line and the 38.2% Fibonacci level, or 1.0609. As a result, targets in the range of 1.0200-1.0300 can still be reached if the Senkou Span B line does not halt the descent. Sales, in our opinion, are currently appropriate. 2) The purchases of the euro/dollar pair are no longer significant. You should now wait for the price to return above the critical Ichimoku indicator lines before you start to think about long positions. There are currently no circumstances in which the euro currency can start moving higher again. But, in the present world, anything can happen at any time. Explanations for the illustrations Fibonacci levels, which serve as targets for the beginning of purchases or sales, and price levels of support and resistance (resistance/support). Take Profit levels may be positioned close by. Bollinger Bands, MACD, and Ichimoku indicators (standard settings) The net position size of each trading category is represented by indicator 1 on the COT charts. The net position size for the "Non-commercial" category is shown by indicator 2 on the COT charts.   Relevance up to 09:00 2023-02-27 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336091
Analysis Of The GBP/USD Pair Over 6- 10.03 Week

The Bank Of England's Monetary Policy Continues To Have A Significant Impact On The Value Of The Pound

Paolo Greco Paolo Greco 26.02.2023 12:34
Long-term outlook. This week, the GBP/USD currency pair has traded somewhat differently than the EUR/USD pair. Second, the value of the pound increased somewhat at the start of the week. The power differential between the pound and the dollar was unaffected by this growth, but it did reduce the market's "bearish" attitude, making the pair's overall decline relatively mild. And it is obvious from the following image that the pair is moving sideways rather than downward if you pay great attention to it. Even closer examination reveals that the pair has been trading in the range of 1.1840 and 1.2440 for some time. Thus, we are currently dealing with a flat. Despite rising by more than 2,000 points over the last six months, the British pound shows more resistance than the euro. It's difficult to determine how this is connected. The UK's business activity figures, which many were surprised to see turned out to be substantially better than predicted values, helped the pound this week. Generally speaking, we think that the level of 1.1840 will reveal what will happen to the pair moving forward. If it is overcome, a much more logical downward correction with the potential to fall by another 300–400 points will commence. A rebound from 1.1840 signals the start of a new cycle of growth within the side channel. The Bank of England's monetary policy continues to have a significant impact on the value of the pound, but the market essentially lacks knowledge about it. If everyone is aware of what to anticipate from the Fed for the foreseeable future, then not from the Bank of England. While they talk relatively frequently, BA representatives don't often make loud pronouncements. Although this issue with the ECB and the Fed has already been handled by 99%, it is now completely unknown even how much BA will increase the rate in March. Even after ten rate increases, there is still hope that the British regulator will use all available means to bring inflation back to 2%. Moreover, "everything feasible" refers to tightening monetary policy even further. COT evaluation. COT reports for the British pound have not been made public in the past month. The report for January 31 was released a month ago, although it was only made public on Friday. There were not many changes as reported. The non-commercial group opened 1,4000 buy contracts and closed 4,1000 sell contracts throughout the week. As a result, non-commercial traders' net position has increased by over 10,000. The net position indicator has been increasing gradually over the past few months, but the major players' outlook is still "bearish," and even though the pound sterling is strengthening against the dollar (in the longer term), it is quite challenging to determine the basic reasons why. We utterly do not rule out the possibility that the pound will decline in the foreseeable future. Although it has officially started, thus far it appears to be flat. Furthermore observe that both main pairs are currently moving quite similarly, but the net position on the euro is positive and even suggests that the upward momentum will soon come to an end, while it is negative on the pound. A total of 54 thousand sales contracts and 36 thousand purchase contracts have now been opened by the non-commercial group. As we can see, the difference is still pretty significant. While there are technical reasons for this, geopolitics certainly do not support such a significant and quick rise of the pound sterling, thus we continue to be wary about the currency's long-term growth. Analysis of fundamental events This week in the UK, there was essentially nothing interesting. Business activity indices helped the pound at the start of the week, as we've already mentioned, but there was nowhere else to turn for assistance. This week, fairly unimpressive and worthless GDP data was made public in the United States. Even though the second evaluation turned out to be lower than the first, it is still pretty high. In particular, given recent reports that America is set to enter a recession. The labor market is in excellent shape, and the GDP numbers indicate that there is no recession. As a result, we think that this will contribute to further US dollar growth. Of course, the Fed's key rate's continued increase is another important aspect. Powell's most recent statements allow another 3–4 hikes this year. This information is especially important in light of the January slowing in the rate of inflation decline. Trading strategy for the week of February 27 to March 3: 1) The pound/dollar pair is currently in the side channel between 1.1840 and 1.2440. Short positions are therefore more pertinent right now, although it's unlikely that the pair will emerge from the side channel anytime soon. Thus, we suggest delaying additional sales until the 1.1840 level is broken. Then, taking short positions with a target 300–400 points lower will make sense. 2) Purchases won't be important unless the price is fixed above the crucial line or there is another strong signal. Yet, given the flat market, even fixing above Kijun-sen does not ensure that the recent rally would continue. Moreover, purchases are permitted when returning to the side channel's lower border to reach the top border. Explanations for the illustrations: Fibonacci levels, which serve as targets for the beginning of purchases or sales, and price levels of support and resistance (resistance and support). Take-profit levels may be close by. Bollinger Bands, MACD, and Ichimoku indicators (standard settings) The net position size of each trading category is represented by indicator 1 on the COT charts. The net position size for the "non-commercial" category is shown by indicator 2 on the COT charts.   Relevance up to 10:00 2023-02-27 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336095
Taming the Dollar: Assessing Powell's Hawkish Tone Amidst BRICS Expansion

US Stocks Market: Dow Jones Fell 1.02% To A One-Month Low

InstaForex Analysis InstaForex Analysis 27.02.2023 08:00
Earlier on Friday, it became known that the income of the US population in January rose by 0.6% compared to December, while consumer spending increased by 1.8% in monthly terms. At the same time, analysts had expected revenue growth of 1% and cost growth of 1.3%. The University of Michigan Consumer Sentiment Index was also released, reflecting the degree of household confidence in the US economy. Thus, the University of Michigan (Michigan Consumer Sentiment Index), the index in February increased to 67 points from 64.9 points in January, with an initial estimate of 66.4 points. At the close on the New York Stock Exchange, the Dow Jones fell 1.02% to a one-month low, the S&P 500 index fell 1.05%, and the NASDAQ Composite index fell 1.69%. Dow Jones Dow Inc was the top gainer among the components of the Dow Jones in today's trading, up 0.60 points (1.05%) to close at 57.79. JPMorgan Chase & Co rose 0.90% or 1.26 points to close at 140.93. Verizon Communications Inc rose 0.21 points or 0.55% to close at 38.74. The least gainers were Boeing Co, which shed 9.98 points or 4.80% to end the session at 198.15. Microsoft Corporation was up 2.18% or 5.55 points to close at 249.22, while Intel Corporation was down 1.84% or 0.47 points to close at 25.14.  S&P 500 Leading gainers among the S&P 500 index components in today's trading were Linde PLC, which rose 4.75% to 347.64, Edison International, which gained 4.21% to close at 68.63, and Coterra Energy Inc, which rose 3.61% to end the session at 25.56. The biggest gainer was Autodesk Inc, which shed 12.95% to close at 192.53. Shares of Live Nation Entertainment Inc shed 10.08% to end the session at 68.78. Quotes of Adobe Systems Incorporated decreased in price by 7.63% to 320.54.  NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Bridger Aerospace Group Holdings Inc, which rose 78.73% to hit 7.90, Cyren Ltd, which gained 61.90% to close at 0.34. as well as Connexa Sports Technologies Inc, which rose 49.43% to end the session at 0.21. The least gainers were Fulcrum Therapeutics Inc, which shed 56.09% to close at 5.66. Shares of Sellas Life Sciences Group Inc lost 53.66% to end the session at 1.71. Quotes of ObsEva SA decreased in price by 50.77% to 0.08. Numbers On the New York Stock Exchange, the number of securities that fell in price (2,150) exceeded the number of those that closed in positive territory (867), while quotes of 88 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,731 stocks fell, 914 rose, and 169 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 2.51% to 21.67. Gold Gold futures for April delivery shed 0.47%, or 8.55, to hit $1.00 a troy ounce. In other commodities, WTI crude for April delivery rose 1.53%, or 1.15, to $76.54 a barrel. Brent futures for April delivery rose 1.34%, or 1.10, to $83.31 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.43% to 1.05, while USD/JPY rose 1.28% to hit 136.43. Futures on the USD index rose 0.61% to 105.17.     Relevance up to 03:00 2023-02-28 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314036
Bank of Japan keeps the rate unchanged, Tokyo Core CPI increases to 3.5%

The Prospect Of The USD/JPY Pair Growth Is Great

InstaForex Analysis InstaForex Analysis 27.02.2023 08:01
On Friday, the yen showed its intention to break through the 137.70 target. Overcoming the resistance of this embedded price channel line will allow the pair to try and hit 138.90, 140.90 as well as other target levels. However, this brilliant plan is hindered by the Marlin oscillator, which is very reluctant to continue rising on the daily chart. The prospect of its growth is great, but the potential for a reversal to the downside is also great. It is very likely that before the price climbs above 137.70, the correctional decline to 133.90 will follow. On the four-hour chart, so far, the situation supports the growth scenario - the price is above the indicator lines, and after the reversal from the MACD line, the Marlin oscillator is in a position to rise. We're waiting for the completion of the growing branch of the 133.90-137.70 range.     Relevance up to 03:00 2023-02-28 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336119
Bank of England hikes rates and keeps options open for further increases

The GBP/USD Pair Is In The Territory Of The Downtrend

InstaForex Analysis InstaForex Analysis 27.02.2023 08:02
At the end of Friday, when we found out that US consumer spending shot up 1.8% in January and new home sales rose 7.2% m/m, the pound fell 71 points. The price is near the target support at 1.1914, and the signal line of Marlin oscillator retreated below the linear support of the daily chart (turquoise) suggests that the price can not only overcome 1.1914, but also stay there with the prospect of rising to 1.1737 (high on September 13, 2022). This plan can be disrupted once the price leaves the area above the signal level of 1.2030, which is the low of February 13. In this case, the price will try to climb above the resistance of 1.2155. According to the data that will be released today, the report on US durable goods orders is expected to fall by 4.0% in January, so we might witness growth (at least for one day). On the four-hour chart, the price settled below the MACD indicator line, while the Marlin oscillator is in the territory of the downtrend. The main trend is a downtrend. Watch the price's behavior at 1.1914   Relevance up to 03:00 2023-02-28 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336121
EUR/USD Pair Has A Potential For Short-Term Rally

The EUR/USD Price May Fall In The Specified Target Range

InstaForex Analysis InstaForex Analysis 27.02.2023 08:04
Last Friday, the euro made a big deal. It settled under the support of 1.0595. The signal line of the Marlin oscillator is declining, the next thing to do is to reach the target range of 1.0443/70. Consolidating under the range can push the price to fall to 1.0290, the low of November 30, 2022. On the four-hour chart, the price decreases under the indicator lines, the Marlin oscillator is on the downside, and though it turned to the upside, it has no divergence forms, or triangular or other geometric patterns. As a consequence, we don't expect the corrective growth to be deep, at the end of which I expect the price to fall in the specified target range.   Relevance up to 03:00 2023-02-28 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336123
Rates Spark: Nothing new on the dovish front

The EUR/USD Pair Continues To Trend Downward

Paolo Greco Paolo Greco 27.02.2023 08:07
On Friday, the EUR/USD currency pair maintained its consistent downward trend. Without any correction or rollback, inertia has probably already taken place. This is the exact scenario we anticipated from the pair. The only issue is that the performance started a little later than we anticipated. The unjustified growth of the euro currency could not, however, continue indefinitely; sooner or later, a significant downward correction had to start. It is easier to detect the upward movement on the 24-hour TF, which must be adjusted downward to anticipate any new trend. According to our assessment, the pair has the requisite ability to achieve price parity within the next one to two months. Although the price is unlikely to fall to exact parity, it may still do so and reach $1.02. This is confirmed by the fact that the most recent macroeconomic statistics from overseas were very strong, particularly when the most important labor market and unemployment reports are considered. Despite a slower rate of reduction in January, inflation did not especially disappoint either. Even more significant is the Fed's willingness to tighten its "hawkish" stance on monetary policy to stop the high inflation period from lasting for several years. James Bullard, for instance, stated last week that the rate should be raised further to prevent a repeat of the situation from the 1970s when high inflation accompanied the economy for more than ten years. As a result, the rate might finally become significantly higher in 2023; we'll talk about this later. On the 24-hour TF, it is also very obvious that the pair may soon break through the Ichimoku cloud, which would be a strong sell signal. Since we do not now see any factors that could push the euro below 0.9500, we are not currently evaluating the possibility of restarting a long-term downward trend. However, in the foreign currency market, no option can be completely ruled out. The euro currency may fall precipitously if the ECB begins to lose support on the subject of raising the key rate. Also not mentioned is the ongoing geopolitical situation in Ukraine. The most popular plan for 2023 is to increase the Fed rate to 5–6% and then keep it there for at least a year. Back in January, the market predicted that 1-2 rate rises would be expected, followed by a pause. Real inflation statistics, however, demonstrate that, in reality, anything is possible. The majority of experts and analysts base their predictions of the rate merely on the simple fact that inflation has decreased over the past seven months. This is a slightly incorrect strategy, in our opinion, because the US inflation rate declined due to both the worldwide decrease in energy costs and the Fed's tightening of monetary policy. Prices have steadied over the past month, and inflation in the US has already begun to slow down. It should be kept in mind that there is a delay between the rate rise and the way the economy responds to it. If it has been several months, then inflation has not yet shown its final decline. Nevertheless, who can definitively state at what point the rate should be increased to bring inflation back to 2% within a year? After all, the Fed is deciding on the rate based solely on the most recent figures on consumer prices. This makes it appear as though it is operating almost blindly. The needed rate level is determined by the "Taylor rule," which takes GDP and the desired inflation rate into account. The Fed and other central banks allegedly pay attention to this rule. It predicts that in 2023, the rate will increase to 8–9%. Of course, it is nearly impossible to believe this now, but it is important to keep in mind that Fed officials, particularly James Bullard, the Fed's most aggressive "hawk," spoke of a high rate of 3.5% at the beginning of 2022. The rate has since increased to roughly 5%, and the regulator is considering many additional rises. As a result, we first think that inflation may slow down in its decline to the point where its pace becomes nominal. Inflation in Germany started to increase in January. Second, if inflation data is unsatisfactory, the Fed may increase the rate to 6–7%. Yet a very important question is how much the ECB can raise the rate. The euro currency may eventually fall below price parity if the European regulator backs down. As of February 27, the euro/dollar currency pair's average volatility over the previous five trading days was 58 points, which is considered "normal." Hence, on Monday, we anticipate the pair to move between 1.0488 and 1.0604. A new round of correction will be signaled by the Heiken Ashi indicator's upward movement. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trade Suggestions: The EUR/USD pair continues to trend downward. Unless the Heiken Ashi indication turns up, you can continue to hold short positions with targets of 1.0498 and 1.0488. If the price is fixed above the moving average line with a target of 1.0742, long positions can be opened. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 01:00 2023-02-28 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336115
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

The EUR/USD Pair Trades Below The Ichimoku Indicator Lines

Paolo Greco Paolo Greco 27.02.2023 08:09
5M chart of EUR/USD EUR/USD fell on Friday. It retained the bearish trend and was partly supported by the macroeconomic background in the second half of the day. At the same time, the Personal Income and Consumer Spending data was released in America, as well as the University of Michigan Consumer Sentiment Index. All three reports turned out to be better than expected, but the US dollar had started rising much earlier. So I think that the pair would have continued to fall anyway. As I have mentioned many times before, a decline is the most logical outcome right now, because the euro has been rising for a long time without any definite reason to do so. Now it's time for a correction, which the pair has been showing for several weeks. The farther into the forest, the more reasons to expect a deeper decline from the euro. There were only two trading signals on Friday. First, the pair rebounded from 1.0581, but it failed to move up 15 pips, which would be enough to place the Stop Loss at Breakeven. Therefore, the long position closed with a loss of about 17 pips, when the pair settled below 1.0581. This sell signal could have been priced too, and this time the price passed in the right direction at least 20-30 pips, which traders could have gotten by closing the deal manually closer to the evening (there was no other option). COT report: Due to a technical glitch, new COT reports have not been released for almost a month, but on Friday, one of the reports for January 31 was released. This report does not make much sense, because since then, a month has passed, and the data from the next reports (which are more or less up-to-date) are still not available. Therefore, we will analyze the data that are available. The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since September. Around the same time, the euro started to rise. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. The euro has already started to fall, but it is not clear yet, is it a pullback or a new downtrend? In the reporting week, non-commercial traders opened 9,000 long positions while the number of shorts decreased by 7,100. Correspondingly, the net position increased by 16,100. The number of long positions exceeds that of short ones by 148,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue. 1H chart of EUR/USD On the one-hour chart, the pair maintains the bearish mood and trades below the Ichimoku indicator lines. We also formed a descending trend line, consolidating above which will determine the end of the downtrend. However, for the time being, the pair might continue a slight but steady decline. On Monday, important levels are seen at 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0762, as well as Senkou Span B (1.0708) and Kijun Sen (1.0641). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On February 27, no important reports or events are scheduled in the European Union. In the US, we will just receive a report on Durable Goods Orders which is unlikely to cause a strong reaction in the market. Monday is likely to be as dull as usual, but the pair may continue to move down due to the momentum. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders     Relevance up to 01:00 2023-02-28 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336111
UK Gfk Consumer Confidence index got better fourth month in a row

A Descending Trend Of The GBP/USD Pair Line Has Been Formed

Paolo Greco Paolo Greco 27.02.2023 08:11
5M chart of GBP/USD GBP/USD also fell on Friday, almost identical to EUR/USD. Even the trading signals were similar. There were no important events in Britain and in fact almost all the most important data has been already published this month. I think that the market has worked out all the bullish factors for the euro and the pound, so sterling should continue to fall for purely technical reasons. But it is quite enough for the trend to be preserved. On the one-hour chart, a descending trend line has been formed, so now traders have an excellent reference point. Speaking of trading signals, the situation did not look great. At the beginning, the pair rebounded from 1.2007 and only managed to go 20 points up. It was enough to set the Stop Loss to Breakeven, and the long position was closed by this order. Then a sell signal was formed when the price settled below 1.2007, but it was rather ambiguous, since the price almost immediately turned out to be at the next level of 1.1974. As a result, traders could gain profit once the price settled below 1.1974, after which the pair went down about 20-30 points. That's how much they could earn by closing the deal manually closer to the evening. COT report: The COT report for the British pound has not been out for a month. The report for January 31 became available on Friday, which makes no sense since it came out a month ago. This report showed minimal changes. In the reporting week, non-commercial traders opened 1,400 long positions while the number of shorts decreased by 4,100. Thus, the net position of non-commercial traders increased by almost 10,000. The value of the net position has been steadily rising in recent months, but large market players are still bearish, and the GBP is rising against the USD (in the medium term), but from a fundamental perspective, it is very difficult to answer the question why it does it. The pound could start to fall in the near future. Formally, it has already started, but so far it looks like a flat. Take note that both major pairs are moving in a similar way, but the net position of the euro is positive and even implies an end of the upward movement, while it is negative for the pound... The non-commercial group of traders has a total of 54,000 long positions and 36,000 shorts. I am still rather skeptical about the long-term uptrend in the pound. The fundamental and geopolitical backgrounds do not favor a strong and swift rise in the British currency. 1H chart of GBP/USD On the one-hour chart, GBP/USD resumed the downward movement, and is below all lines of the Ichimoku indicator and the trend line. Therefore, there is no reason (yet) to assume that the British currency will grow. At the same time the pair is approaching its last local low, from which a bounce may follow. On February 27, it is recommended to trade at the key level of 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2288. The Senkou Span B (1.2091) and Kijun Sen (1.2036) lines can also generate signals. Rebounds and breakouts from these lines can also serve as trading signals. It is better to set the Stop Loss at breakeven as soon as the price moves by 20 pips in the right direction. The lines of the Ichimoku indicator can change their position throughout the day which is worth keeping in mind when looking for trading signals. On the chart, you can also see support and resistance levels where you can take profit. On Monday, the UK macroeconomic calendar is empty, and there's only one report in the US, which can theoretically provoke market reaction. It is the Durable Goods Orders report. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders. Relevance up to 01:00 2023-02-28 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336113
The GBP/USD Pair Is Expected The Consolidation To Continue

The GBP/USD Pair Once Again Stabilized Under The Moving Average

Paolo Greco Paolo Greco 27.02.2023 08:15
The GBP/USD currency pair dropped to its most recent local low on Friday and was almost as low as its prior and subsequent lows near the level of 1.1841. As a result, despite multiple upward corrections, the downward trend persisted as expected. All indicators point to a downward trend at this point because both of the linear regression channels are already pointing downward. Recall that we have been anticipating a significant decline in the value of the pound for a considerable amount of time and that this decline currently appears to be substantial only on the 4-hour TF. For instance, a strong round of 50% upward movement from the prior downward trend, which lasted two years, is readily visible on a 24-hour TF. However, the pair has been trading in the side channel between the levels of 1.1840 and 1.2440 for three months, so the subsequent decrease so far appears to be more of a bland flat. The movements in this channel on the 4-hour TF look serious and cannot be regarded as flat. On the daily TF, however, flat movements are also possible, so we do not rule out the possibility that a rebound from 1.1840 would start a new wave of upward movement of 400–500 points. It is now crucial for the British pound to break through the Ichimoku cloud on the 24-hour TF, near where it is currently situated. If you're fortunate, the likelihood of a further fall (which would make the most sense) will increase. Additionally, we think that the pound may be under pressure from the Bank of England's lack of remarks or announcements regarding potential changes to monetary policy. After ten rate increases, traders just do not know what to expect from the British regulator. Especially given the likelihood of a recession within the next five quarters. After all, the more interest rates rise, the deeper and stronger the recession becomes. However, the British economy is already experiencing difficulties due to the current circumstances (Brexit, the pandemic, highway reforms, tax rises, and high inflation). So, it is doubtful that the BA will tighten without first taking a step back to get inflation back to 2%. Also, there is no urgency on the part of the indication to decrease. Even after accounting for the sharp decline in energy prices. The increase in wages is an issue for the States as well. When employees spend more when they have more money, as we have already shown, Bank of England officials are terrified of high pay growth. Prices are beginning to grow even more quickly as a result of the rising demand for products and services. So, in a perfect world, wages would either not grow at all or grow considerably more slowly than 6%. Nevertheless, this is what the regulator believes, not common British citizens whose salaries have declined because of inflation of 10%. It turns out that a comparable issue also exists in the United States. In particular, Philip Jefferson, a member of the Fed's monetary committee, claimed that wage growth in the US is too high and that it falls short of forecasts for a swift return of inflation to 2%. He added that the disparity between the supply and demand for labor indicates that inflation would likely be high for a considerable amount of time. It most likely means what Hugh Pill and Andrew Bailey already discussed. There is a labor shortage in some places as a result of the low level of unemployment. Businesses are compelled to increase wages to attract the workers they require. That is rather intriguing given the constant news coverage that huge corporations are laying off employees as a result of the Fed's strict monetary policies. Generally speaking, we also think that eventually, inflation will start to formally slow down (by 0.1-0.2% each month) or stop growing entirely. There are fewer uncertainties in the context of the Fed because it has ample opportunities to keep raising the rate. The market now expects no more than two tightenings in 2023, so the more he raises it, the stronger the US dollar will become. Although there might be a lot more of them. We think that the BA meeting and Andrew Bailey's speech will be the most significant of the upcoming regulatory meetings in March. The pound can be prevented from falling if the rate increases by 0.5% once more. But, there are still at least two weeks before the summit, which is more than enough time for the pound to lose another few hundred points. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 100 points. This value is "average" for the dollar/pound exchange rate. Hence, we anticipate movement inside the channel on Monday, February 27, with movement being limited by levels 1.1837 and 1.2037. A new round of upward correction will be indicated by the Heiken Ashi indicator's upward reversal. Nearest levels of support S1 – 1.1902 S2 – 1.1841 S3 – 1.1780 Nearest levels of resistance R1 – 1.1963 R2 – 1.2024 R3 – 1.2085 Trade Suggestions: In the 4-hour timeframe, the GBP/USD pair once again stabilized under the moving average. So, until the Heiken Ashi indication turns up, it is still possible to hold short positions with targets of 1.1902 and 1.1841. If there is a consolidation above the moving average, long positions with targets of 1.2085 and 1.2146 can be opened. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 01:00 2023-02-28 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336117
How investors can best position themselves amid unclear Federal Reserve rate outlook?

The PCE Deflator For January Came In Hotter-Than-Expected, Japanese Yen Is The Weakest G10 Currency

Saxo Bank Saxo Bank 27.02.2023 08:16
Summary:  Equities and bonds took a hit on Friday amid another hot inflation data from the US as the January PCE came in higher-than-expected. That saw a hawkish shift in market expectations of the Fed path, bringing the terminal rate pricing to 5.4% and reducing the rate cuts priced in for 2023. US 2yr yields surged to fresh highs with the dollar higher as well, and Japanese yen being the weakest G10 currency amid Ueda’s neutral stance at the testimony. Focus this week on geopolitics amid China’s peace proposal, while more convincing signs of a pickup in Chinese activity are also awaited.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) tumbled as expectations of the Fed rate path shifted The white-hot Personal Consumption Price Indices released on Friday weighed on U.S. equities as investors increased rate hike expectations to 25 basis points each in the March, May, and June FOMC meetings as well as the expectation for rate cuts in the second half of 2023 almost completely vanished. The S&P 500 lost 1.1% and the Nasdaq 100 plunged 1.7%, bringing the weekly losses of the two benchmark indices to 2.9% and 3.8% respectively. Nine of the 11 sectors of the S&P 500 declined on Friday, with the rate-sensitive real estate sector and information technology sector, each down 1.8%, leading the charge lower. Autodesk, a leading computer-assisted design software firm tumbled 12.9% on releasing downbeat Q1 earnings guidance below analyst estimates and was the biggest loser in the S&P500 and Nasdaq 100 on Friday. Boeing (BA:xnys) lost 4.8%, following the aircraft manufacturing giant halted deliveries of the 787 Dreamliner jets due to documentation problems. Live Nation Entertainment (LYV:xnys) plunged 10% amid concerns over the COVID reopening play having peaked and increases in regulatory scrutiny. Farfetch (FTCH:xnys), an online luxury apparel product retailer, jumped 11% following an upbeat outlook for 2023. Farfetch is one of the constituent stocks in Saxo’s newly released Luxury Goods theme basket. US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) extended a five-week losing streak Treasuries tumbled in price, rising in yields after the stronger-than-expected PCE reports which registered strong upticks in January (including upward revisions of December data). Powell’s favoured measure, PCE Services less Housing jumped to 4.6% Y/Y in January from 4.3% Y/Y in December. The market has moved to completely price in at least a 25bp hike each at the March, May, and June FOMC meeting plus about a 25% chance that the hike in March is 50bps, bringing the terminal rate to 5.4. SOFR Jun-Dec 2023 spread narrowed 11bps to -11.5bps, eliminating expectations for rate cuts in the second half of 2023. Yields on the 2-year surged 12bps on Friday or 20bps over the week to 4.81%, the highest level since 2007. Yields on the 10-year climbed 7bps on Friday or 13bps over the week to 3.94% Hong Kong’s Hang Seng (HIG3) lost nearly 12% from January highs Hong Kong's Hang Seng Index declined 1.7% bringing the 4th weekly loss in a row to 3.4% or nearly 12% from its intraday high on 27 January. China Internet names reported quarterly results generally in line with market consensus estimates but investors tended to trim positions as sentiment was dampened by resurge of tension between the U.S. and China over Russia and Ukraine and the lack of substantive recovery in the Chinese economy aside from credit expansion and survey data. During the week, JD.com (09618xhkg) was down 15%, Alibaba (09988:xhkg) down 9.5%, and Meituan (03690:xhkg) down 6.8%, as concerns about competition heating up among eCommerce platforms. Alibaba announced results beating estimates but the shares of the eCommerce giant plunged 4.6% on Friday following management comments on the need to increase investments to stay competitive in the year ahead. On Friday, NetEase (09999:xhkg) plunged 11.2%, following an earnings miss dragged down by recognition of royalty fees on expiration of game licence. Techtronic (00669:xhkg) bounced 4.4% but was still down more than 22% over the week on an alleged overstatement of earnings by capitalizing expenses. The auto space was sold, led by a 9.1% decline in Great Wall Motor (02333:xhkg). Baidu (09888:xhkg) slid 6% in the Hong Kong bourse while A-share ChatGPT concept names rallied in mainland bourses. Digital China (000034:xsec) advanced by 6.8%. CSI300 slid 1% on Friday but managed to finish the week 0.7% higher and stay above its 50 and 200-day moving averages. Financial, food and beverage, and new energy vehicle stocks led the charge lower on Friday while defense and computing names bucked the decline. Australian equities (ASXSP200.I) are continuing their short term down trend That said, stocks benefiting from the economic reopening are up the most this year, including Flight Centre, Eagers Automative which are trading up over 20% this year. In terms of the ASX200 sectors- the Consumer Discretionary sector is up the most, up 8%, YTD, followed by the Information Technology sector up 6%. While the Mining (Materials) and Finanical sectors have been pulling back, which is pressuring the market. Some investors were spooked by weaker than expected results from BHP and RIO last year, while big banks such as CBA are allocating more capital for the year ahead - for bad debts provisions, as consumers are felling the pinch of higher interest rates. All in all, the ASX200 is continuing its short term downtrend/correction amid the RBA’s more hawkish tone. For the technical levels to watch, read our Technical Analyst, Kim Cramer Larsson’s note. Australia’s oil and gas giant - Woodside Energy (WDS) reported results today; delivering profits that more than trebled in 2022 - with bottom line profits up 228% - fuelled by the oil and gas price rallies, but also as it acquired BHP’s oil and gas business. Woodside reported a larger final dividend with of US$1.44 a share, up from US$1.05 a share at the same time last year. Its full year pay-out stands at US$4.8 billion thanks to cash flows surging. This sets the tone for energy companies for 2023. Keep in mind at Saxo, we expect the oil price to stay around $80 this quarter and move up to $90 next quarter. FX: Japanese yen at YTD lows, GBP in focus with Brexit talks The dollar strength was back in focus as PCE data on Friday in the US continued to push upwards the repricing of the Fed’s path. With 2year yields surging to their fresh highs, along with BOJ governor nominee Kazuo Ueda’s continued push for a loose monetary policy coming against market’s hawkish expectations, saw the Japanese yen plunge to its lowest levels this year. USDJPY now back top testing 136.50 and Ueda’s testimony in the upper house will be in focus today. Also worth watch will be AUDUSD which plunged in close sights of 0.67 with risk sentiment and commodity prices taking a beating. UK PM Sunak is making headlines with reports saying that he may have won big concessions in the looming Brexit deal, with reports suggesting that an agreement between the UK and European Union on Northern Ireland appears to be very close. UK PM Sunak and EU head Ursula Von Der Leyen will hold talks mid-day on Monday. There are being described as 'final talks'. This will be followed by a news conference and Sunak’s statement to the parliament. GBPUSD dropped below 1.20 with the 200DMA at 1.1928 in focus. Crude oil (CLJ3 & LCOJ3) reversed higher on Friday Crude oil prices jumped back higher recording gains of 1.2% on Friday, and extended gains in the Asian morning hours amid reports of further supply disruptions as Poland’s largest oil company unexpectedly stopped receiving oil via Russia’s Druzhba pipeline. Still, unconvincing signs of a pickup in demand from China so far continues to keep oil prices range-bound, and focus this week will be on geopolitics as well as China’s PMIs. WTI futures are now back above $76/barrel after taking a look below $74 last week, while Brent is above $83. Copper broke the $4 support With the US PCE data further aggravating concerns on Fed’s rate hike path and bringing the 2-year yields to fresh highs, base metals plummeted. Copper prices plunged below the key $4 support to $3.95, closing Friday with a weekly loss of 4%. Incongruent signs of a pickup in Chinese demand also continue to underpin, and the PMI reports this week will be key to signal whether activity levels are picking up. However, with supply potentially struggling to keep up with demand, we view the current weakness as temporary and part of the general loss of confidence that has hit markets this month. Gold (XAUUSD) breaks support but losses still contained Higher US dollar in the aftermath of hot US data and higher yields has weighed on the yellow metal. Gold prices broke below the $1820 support to lows of $1809 bringing the key 1800 level in focus. Risk remains of a further weakness towards $1788 followed by the 200DMA at $1776 amid a tough macro environment. US ISM PMIs in focus this week, along with more Fed speakers, as a guide to high how interest rates could go. Silver (XAGUSD) fell harder, down 2.5% on Friday and closing with a weekly loss of 4.5%, breaking below the 200DMA at $21.   What to consider? Hot US PCE brings terminal rate expectations up to 5.4% The PCE deflator for January came in hotter-than-expected, and together with upward revisions to the previous month’s prints these sent a strong hawkish signal to the markets reinforcing the Fed’s higher-for-longer message. Core PCE rose 4.7% Y/Y, accelerating from the upwardly revised 4.6% and above the expected 4.3%. The M/M rose 0.6%, hotter than the expected and upwardly revised prior of 0.4%. This brought an upward repricing of the Fed path, with increasing calls for 50bps at the March meeting and the terminal rate now priced in at 5.4% and only one rate cut being priced in for this year from three previously. US consumer confidence also rose in February to its highest in a year, with University of Michigan sentiment accelerating to 67 from 66.4 in January. Personal incomes grew 0.6% MoM in January, a notch below expectations but consumer spending was higher-than-expected at 1.8% due to low savings rates and increased use of consumer credit. Resilient spending, along with sustained wage growth, means Fed could continue to find it tough to bring inflation back to its 2% target. Fed members continue to remain cautious on the path of inflation Fed voter Jefferson spoke about labor market strength on Friday, saying that ongoing imbalance between supply/demand for labour suggests high inflation may come down only slowly and said the argument that policymakers should accept that disinflation will be costly is well-reasoned. Bullard (non-voter) was on the wires again as well, and reaffirmed the need to move quickly to shield credibility. Collins, also a non-voter, said that recent US data affirms the case for more rate hikes. Mester (non-voter) said the Fed has to do "a little more" on rate hikes saying the new inflation data affirms the case for more rate hikes to get inflation back to target. BOJ Ueda’s upper house testimony on tap today After Friday’s testimony in the lower house of the parliament, Bank of Japan governor nominee Kazuo Ueda now moves to the upper house today. His initial policy stance appeared to be confirming continuity of the current ultra-easy monetary policy in Japan, coming against market’s hawkish expectations. This saw the yen plunge 1.3% on Friday against the USD and being the weakest currency on the G10 board. Today markets will be looking at more hints on what tweaks may be considered by Ueda and lack of further color could mean more weakness in the yen, especially with global yields surging to new highs. Geopolitics remains in focus with China’s peace proposal talks After threats from US about making public the information on China supplying weapons to Russia, China came up with a 12-point peace proposal on Friday to be a neutral mediator in the Russia-Ukraine conflict. Reports suggested that China’s proposal took a clear anti-West stance, condemning NATO extension and sanctions against Russia, but Ukrainian President Volodymyr Zelensky has signaled he's open to China's new ceasefire plan and meeting President Xi. How these events turn this week will be key to watch, especially US comments and support to Ukraine if it was to accept China as a mediator. China’s Q4 Report on the Execution of Monetary Policy emphasized stability and signalled not to induce excessive investment, debts, and bubbles China’s central bank, the People’s Bank of China, said in its Q4 Report on the Execution of Monetary Policy that the primary objective of countercyclical monetary policy was to smooth the volatility in aggregate demand so as to avoid the destructive effects of excessive fluctuations of aggregate demand on the factors of production and the wealth of the society. The report emphasizes that the force of monetary policy must be stable and not bring about excessive liquidity that induces excessive investment, a surge in debts, and asset bubbles. In support of the real economy, the Q4 Report emphasizes stability and sustainability of credit growth but omits the stronger wording of “more forceful” and “increases of credit support” that were in the Q3 Report. China may be sending a signal to lower the expectations of the market on monetary easing.   For a global look at markets – tune into our Podcast.   Source: Markets Today: Hot US PCE brings 2yr yields to fresh highs – 27 February 2023 | Saxo Group (home.saxo)
The USD/INR Pair Traders Could Be The Cautious Mood Ahead Of The Key Inflation Numbers For India And The US

The USD/INR Pair Portrays The Traders’ Anxiety Ahead Of The Key Q3 GDP Of India

TeleTrade Comments TeleTrade Comments 27.02.2023 08:24
USD/INR struggles for clear directions after five-week uptrend, grinds higher of late. Hawkish Fed concerns, upbeat US Treasury bond yields underpin US Dollar strength. RBI’s hawkish mood contrasts with fears of easy growth figures to weigh on Indian Rupee. US data, risk catalysts eyed for clear directions past India Q3 GDP. USD/INR seesaws around 82.90 as bulls take a breather following a five-week winning streak during early Monday. In doing so, the Indian Rupee (INR) pair portrays the traders’ anxiety ahead of the key third quarter (Q3) Indian Gross Domestic Product (GDP) for the Fiscal Year 2023 (FY2023). Despite the pre-data anxiety, the hopes of softer FY2023 Q3 GDP figures, 4.6% versus 6.3% prior, join the hawkish Federal Reserve (Fed) concerns to keep USD/INR buyers hopeful. That said, the Reserve Bank of India’s (RBI) readiness to tame inflation, even at the cost of higher rates, seems to challenge the Indian Rupee bears. Even so, the strong US inflation clues join geopolitical fears surrounding China and Russia, as well as hawkish Fed concerns, to keep the USD/INR buyers hopeful. That said, the US Dollar Index (DXY) makes rounds to its intraday high of around 105.30 following the initial pullback from a seven-week high. In doing so, the greenback’s gauge versus the six major currencies remains firmer for the fifth consecutive day. It’s worth observing that market bets for the Fed fund futures hint at the 5.30% interest rate for late 2023, versus the US central bank’s forecast of a near 5.10% peak rate. Against this backdrop, the US 10-year Treasury yields reverse the early-day losses of around 3.95%. Further, the two-year counterparts jump back towards the highest levels since November 2022, marked the previous day, as bond bears poke the 4.83% level by the press time. Further, the S&P 500 Futures lick its wounds with mild gains after the Wall Street benchmark posted the biggest weekly slump of 2023. Looking forward, a light calendar on Monday and the pre-data anxiety may restrict USD/INR moves. Technical analysis A three-week-old rising wedge chart formation suggests a short-term upward grind of the USD/INR prices between 83.25 and 82.65.
The USD/MXN Pair Could Then Aim To Surpass The February Monthly Swing High

The USD/MXN Pair Seesaws Around The Intraday High

TeleTrade Comments TeleTrade Comments 27.02.2023 08:28
USD/MXN retreats from intraday high, fails to extend the previous week’s rebound from the lowest levels since April 2018. US Dollar struggles for clear directions after posting the heaviest run-up since September 2022 amid hawkish Fed concerns. Mixed risk catalysts, sluggish bond markets keep Mexican Peso illiquid ahead of US Durable Goods Orders. USD/MXN aptly portrays the market’s inaction during early Monday as the Mexican Peso (MXN) pair seesaws around $18.40, after bouncing off the lowest levels in nearly five years. In doing so, the USD/MXN pair seesaws around the intraday high as the US Dollar seeks the next catalyst to extend the previous week’s run-up. It should be noted that the upbeat US data, mainly surrounding inflation, joined hawkish Fed talks and upbeat Treasury bond yields to underpin the US Dollar’s biggest weekly run-up since September 2022 the last week. That said, the US Dollar Index (DXY) renews its intraday high around 105.30 following the initial pullback from a seven-week high. In doing so, the greenback’s gauge versus the six major currencies remains firmer for the fifth consecutive day. Mixed concerns surrounding Russia and mildly offered Oil price seems to challenge the USD/MXN traders amid a light calendar ahead of the US Durable Goods Orders for January, expected -4.0% versus 5.6% prior. Adding strength to the market’s inaction are the dicey US Treasury bond yields. While tracing the same, the US 10-year Treasury yields reverse the early-day losses to around 3.95%. Further, the two-year counterparts jump back towards the highest levels since November 2022, marked the previous day, as bond bears poke the 4.83% level by the press time. Against this backdrop, t the S&P 500 Futures lick its wounds with mild gains after the Wall Street benchmark posted the biggest weekly slump of 2023. At home, hawkish concerns after Banxico’s latest 0.50% rate hike keep the USD/MXN bears hopeful. Moving on, US PMIs for February and second-tier data from Mexico will entertain USD/MXN traders amid an anticipated corrective bounce. Technical analysis Thursday’s Doji near multi-month low joins oversold RSI (14) to suggest corrective bounce in the USD/MXN prices. However, buyers remain off the table unless witnessing sustained trading beyond January’s low surrounding $18.56.
InstaForex's Ralph Shedler talks Euro against Japanese yen

Dovish Commentary From Bank Of JapanGove rnor Nominee Kazuo Ueda Is Impacting The Japanese Yen

TeleTrade Comments TeleTrade Comments 27.02.2023 08:33
BoJ Ueda sees the current monetary policy as appropriate to achieve the 2% inflation target confidently. USD/JPY has delivered a breakout of the Inverted H&S pattern that conveys a bullish reversal. An oscillating in the bullish range of 60.00-80.00 by the RSI (14) indicates more upside ahead. The USD/JPY pair is struggling to extend recovery above the immediate resistance of 136.40 in the early European session. The asset has turned sideways as investors are awaiting the release of the United States Durable Goods Orders data for fresh cues. The US Dollar Index (DXY) has faced barricades around 104.90 but is expected to continue its upside to near the 105.00 resistance as investors’ risk appetite has faded dramatically. Meanwhile, dovish commentary from Bank of Japan (BoJ) Governor Nominee Kazuo Ueda is impacting the Japanese Yen. BoJ Ueda sees the current monetary policy as appropriate to achieve the 2% inflation target confidently. USD/JPY has delivered a breakout of the Inverted Head and Shoulder chart pattern on a four-hour scale that conveys a bullish reversal after a prolonged consolidation. The impulse of the asset has turned bullish after a confident break above the horizontal resistance plotted from December 28 high at 134.50. The US Dollar bulls are getting strength from the 50-period Exponential Moving Average (EMA) at 134.60. An oscillating in the bullish range of 60.00-80.00 by the Relative Strength Index (RSI) (14) indicates a continuation of the upside. Read next: The Effect Of Shifting The Aggregate Demand Curve - Demand Shocks| FXMAG.COM Should the asset break above the intraday high at 136.56, US Dollar bulls will drive the asset toward December 12 high at 137.48 followed by the horizontal resistance placed from December 15 high at 138.18. Alternatively, a confident break below February 16 low at 133.60 will negate the Inverted H&S formation and will drag the asset toward February 6 high around 133.00 and February 10 high at 131.65. USD/JPY four-hour chart  
Australian dollar against US dollar - "It seems that the currency will soon hit a price above 0.68"

More Downside In The Aussie Pair (AUD/USD) Looks Favored

TeleTrade Comments TeleTrade Comments 27.02.2023 08:35
AUD/USD has refreshed its seven-week low at 0.6700 amid geopolitical tensions and rising hawkish Fed bets. The USD Index has refreshed its day’s high above 104.90 and is expected to recapture the 105.00 resistance. A higher-than-projected Australia GDP will accelerate troubles for the RBA. The AUD/USD pair has refreshed its seven-week low near the round-level support of 0.6700. More downside in the Aussie asset looks favored as investors are channelizing their funds into the US Dollar Index (DXY). Investors are favoring investment in the USD Index to dodge volatility inspired by a revival in consumer spending in the United States and escalating geopolitical tensions. The USD Index has refreshed its day’s high above 104.90 and is expected to recapture the 105.00 resistance. Western nations are still concerned about the rumors of China’s support to Russia in providing arms and ammunition against Ukraine. United States National Security Advisor Jake Sullivan said on CNN’s “State of the Union,” China’s stance on the Russian invasion of Ukraine puts it in an “awkward” position internationally and any weapons support to Russia would come with “real costs.” Risk-perceived assets like S&P500 futures are facing heat of the geopolitical tensions. The 500-stocks futures basket has surrendered the majority of gains earned in morning, portraying further strengthening of the risk-aversion theme. Meanwhile, the return generated on 10-year US Treasury yields is hovering around 3.94%. Higher-than-projected US consumer spending in January has highlighted the fact that the battle between the Federal Reserve (Fed) and the sticky inflation is getting brawled further. Fed chair Jerome Powell has been left with no other option than to tap hawkish measures to bring down the stubborn inflation. Read next: The Effect Of Shifting The Aggregate Demand Curve - Demand Shocks| FXMAG.COM On the Australia front, recession fears are escalating as inflation is not showing signs of deceleration, which is bolstering the case of further policy tightening by the Reserve Bank of Australia (RBA). This week, Australia’s Gross Domestic Product (GDP) (Q4) numbers will be keenly watched. The quarter GDP is seen higher at 0.9% vs. the former release of 0.6%. This might create more troubles for RBA Governor Philip Lowe as higher activities will favor further hikes.  
Central Banks and Inflation: Lessons from History and Current Realities

The GBP/JPY Cross-Currency Pair Has Potential For Further Downside Movement

TeleTrade Comments TeleTrade Comments 27.02.2023 08:39
GBP/JPY takes offers to extend pullback from one-week-old horizontal resistance. Looming bear cross on MACD, RSI retreat add strength to downside bias. 50-SMA restricts immediate downside, bulls need validation from monthly high. GBP/JPY prints mild losses around 162.75-80 as it pares the previous day’s gains around the intraday low heading into Monday’s London open. In doing so, the cross-currency pair justifies the early-day Doji candlestick formation, as well as the U-turn from a one-week-old horizontal resistance line. Adding strength to the downside bias is the RSI (14) retreat from the +50.0 area, often considered an overbought zone, as well as the looming bear cross on the MACD. That said, the GBP/JPY bears are well-set to visit the 50-SMA support near 162.00. Following that, a two-week-old ascending support line precedes an upward-sloping trend line from February 03 to challenge the GBP/JPY bears around 161.45 and 161.20 in that order. It should be noted that the pair’s weakness past 161.20 will have the 161.00 round figure as the last defense, a break of which could make it vulnerable to challenge the mid-month swing low surrounding 160.00. On the contrary, recovery moves remain elusive below the immediate resistance line, around 163.25 by the press time. Following that, the monthly high of 163.76 may act as an extra filter towards the north. If the GBP/JPY bulls keep the reins past 163.76, the early December 2022 low near 164.00 will be in the spotlight ahead of directing the quote towards the last September’s peak of 167.22. GBP/JPY: Four-hour chart Trend: Further downside expected
New Zealand dollar against US dollar decreased by 1.07% yesterday

The NZD/USD Pair Maintains At The Lowest Levels

TeleTrade Comments TeleTrade Comments 27.02.2023 08:41
NZD/USD drops to the lowest levels in three months, grinds near intraday low of late. Downbeat NZ Retail Sales, comments from RBNZ’s Conway keep bears hopeful. US Dollar cheers strong inflation clues, hawkish Fed talks amid upbeat yields. US Durable Goods Orders, risk catalysts eyed for fresh impulse. NZD/USD bears keep the reins at the lowest levels since November 2022, down half a percent near 0.6130 during early Monday, as downbeat New Zealand (NZ) catalysts contrast with the US Dollar demand. That said, NZ Retail Sales marked -0.6% QoQ figure for the fourth quarter (Q4) earlier in the day, versus 1.5% expected and 0.4% prior. On the other hand, Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway said, “As interest rates rise, I expect consumption to slow.” Meanwhile, strong US inflation-linked data joined the Fed policymakers’ support for higher rates to propel the Fed fund futures to above 5.30%, versus 5.10% expected by the US central bank in December. The same joins the latest bout of sanctions on Russia from the West to escalate the market’s fears of more geopolitical tension, which in turn underpins the US Dollar’s haven demand. US Dollar Index (DXY) renews its intraday high around 105.32 following the initial pullback from a seven-week high, while tracing upbeat US Treasury bond yields. It’s worth noti Read next: The Effect Of Shifting The Aggregate Demand Curve - Demand Shocks| FXMAG.COM ng, US 10-year Treasury yields reverse the early-day losses to around 3.95%. Further, the two-year counterparts jump back towards the highest levels since November 2022, marked the previous day, as bond bears poke the 4.83% level by the press time. Further, the S&P 500 Futures lick its wounds with mild gains after the Wall Street benchmark posted the biggest weekly slump of 2023.   Moving ahead, the US Durable Goods Orders for January, expected -4.0% versus 5.6% prior, will be important to watch for clear directions ahead of Wednesday’s official activity data from China. Technical analysis A daily closing below the 200-DMA, around 0.6170 by the press time, directs NZD/USD bears towards July 2022 low near 0.6060.
FX Markets React to Rising US Rates: Implications and Outlook

In Europe Core Inflation Continuing To Edge To Record Highs, The DAX Posting Its Biggest Weekly Fall

Michael Hewson Michael Hewson 27.02.2023 08:53
When we started 2023 most of the narrative had been centred around when we would see start to see a Fed pivot and the timing of the first rate cut. Once it became apparent that this was somewhat wishful thinking, this narrative started to shift towards a Fed pause, even in the face of mounting evidence of a remarkably resilient US economy.     Even when the Fed downshifted the pace of its current rate hiking cycle to 25bps at the start of February, there was some disquiet that they might be sending the wrong signal to the market, about their determination to crack down on inflation.   The resilience of the January payrolls report which came in ahead of expectations at the beginning of this month started to sow the first seeds of doubt into the pause narrative, and while bond markets started to react to these shifting sands, the equity markets still held out the hope that a Fed pause was only a few weeks away. On Friday all notion of a possible pause appears to have gone the way of the dodo, in the face of a series of better-than-expected economic data releases, with markets now pricing in another three 25bps rate increases at the March, May, and June Fed meetings.   There had already been signs that the January core PCE numbers might have been susceptible to an upside surprise after retail sales in January surged by 3%, however, Friday's sharp jump in the Federal Reserve's preferred inflation measure to 4.7%, was as unwelcome as was the upward revision to December's number from 4.4% to 4.6%. Throw in the biggest upswing in personal spending in 12 months, by 1.8%, and you have all the ingredients of a US economy that shows few signs that higher prices are weighing on demand.   US 2-year yields reacted accordingly, jumping by 11bps, above their previous peaks in November last year, to close at their highest level since 2007, at 4.813%. It wasn't just yields in the US that moved sharply higher, with German 2-year yields rising to their highest levels since October 2008, closing above 3% Equity markets reacted as you would expect, falling back sharply, with the DAX posting its biggest weekly fall since mid-December. The FTSE100 also rolled over quite sharply wiping out the previous week's gains in the process, although both indexes remain in their uptrends from their October lows.     The S&P500 fell sharply but managed to hold above and rebound off its 200-day SMA, even as it fell to a one-month low, with the Nasdaq 100 also rebounding off its 200-day SMA as well.   This recovery off key technical supports should offer European markets a modest rebound when they open later this morning, after last week's sharp falls. As we look towards a new week, and the end of the month tomorrow, last week's falls have called into question whether markets in Europe can hold onto their February gains, while US markets have already slipped into negative territory for the month, after last week's sharp falls.   The US dollar appears to have accelerated its upward momentum, rising for the fourth week in a row, and is in sight of its highest levels this year, and on course to post its first positive month since September last year.   On the data front the main focus this week, in the absence of the February jobs report which has been pushed out to the 10th of March, is the latest ISM services report which is due at the end of this week and could be instrumental in reinforcing the hawkish narrative that has started to take hold in the last few weeks. A similarly strong report following on from the January report will further reinforce the case for 3 more 25bps rate hikes at the next few meetings.   In Europe, the narrative around sticky inflation appears to be evolving along similar lines, with rapid declines in headline inflation but core inflation continuing to edge to record highs.   This week we'll get to see the latest flash numbers for February, from Germany, whose economy could already be in recession, France as well as the EU, where core prices hit a record high of 5.3% in January and could well stay there in numbers due to be released towards the end of the week.     EUR/USD – the next support lies at the January lows at 1.0480/85, a break of which opens up the prospect of a test of the 200-day SMA at 1.0320. Currently have resistance at the 1.0620/30 area, and behind that at the 50-day SMA. GBP/USD – currently sitting on support at the 200-day SMA at 1.1930, a break of which retargets the 1.1830 area. Resistance currently at the 50-day SMA at 1.2150. EUR/GBP – continues to edge higher with the next resistance currently 0.8870. Support comes in at the 0.8780 area. USD/JPY – closing in on the 200-day SMA and Kumo cloud resistance area at 136.90/00. Interim support at 133.60, and below that at 132.60, and 50-day SMA.   FTSE100 is expected to open 32 points higher at 7,910. DAX is expected to open 48 points higher at 15,457 CAC40 is expected to open at 35 points higher 7,222   Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
Central Bank Policies: Hawkish Fed vs. Dovish Others"

FX Daily: Sticky inflation keeps dollar higher for longer

ING Economics ING Economics 27.02.2023 09:00
The dollar remains broadly bid after Friday's release of US PCE inflation data argued that the Fed needed to push rates higher and for longer. 25bp Fed hikes are now priced for March, May and June. Expect the dollar to hold gains this week, although China's February PMIs (Wednesday) and the US ISM Services (Friday) may prove a challenge USD: Hard to argue with dollar strength near term Friday's release of US core PCE inflation data for January completed what has been a very bond bearish/dollar bullish set of US data this month. We have learned that US inflation is proving much stickier and US activity firmer than we were led to believe in December and January. Understandably, investors are now taking the Federal Reserve hawks more seriously and have priced three more 25bp rate hikes from the Fed in March, May, and June. This hawkish run of data also questions what the new set of Fed Dot Plots will look like when they are released on 22 March. The Fed's current median expectation sees Fed Funds at 5.00-5.25% by the end of 2023 and 4.00-4.25% by end-24. Both of these projections could be revised higher. This prospect could well dissuade investors from re-entering dollar short positions over the next few weeks. At the same time, the US 2-10 year yield curve is now inverted the most since the Paul Volcker tightening of the mid-1980s - creating a headwind to risk assets. It is hard to see global equity markets pushing much further ahead until there are clearer signs that the Fed - and other central banks - can relent in their tightening cycles. For this week, we think the macro highlights will be the ISM business confidence data in the US. The manufacturing component (released Wednesday) is expected to remain soft at 48. More interesting will be Friday's release of ISM services. Was the bounceback in the January services release merely weather-related or did it reflect much better optimism? This could help set the trend in US data through March. Investors will also be looking at the Chinese February PMIs released on Wednesday. A strong showing here could provide some support to the renminbi and to activity currencies in general - although as we discussed on Friday, geopolitics does seem to be weighing on the renminbi too. What does this all mean for the dollar? DXY broke above 105.00 on Friday and the multi-week bias looks towards resistance at the 106.20/106.50 area - some 1.00/1.20% above current levels. Through March we will better assess whether these prove the best dollar levels of the year. Chris Turner EUR: Dollar strength to keep EUR/USD heavy Like the Fed, the European Central Bank remains very much in hawkish mode. Investors fully subscribe to the ECB's message of a 50bp hike on 16 March and then price a further 80bp of tightening into year-end. This should be the key difference between the Fed and the ECB cycles. We think the Fed could be in a position to cut by year-end, while the ECB looks likely to keep rates at their peak throughout the majority of 2024. There is not too much eurozone data this week but today sees eurozone business and consumer confidence for February - all expected to improve modestly. For EUR/USD, we think the strong dollar view will dominate. Expect 1.0500 to be tested, with a chance that it briefly trades down to the 1.0460 area.  Chris Turner Read next: The Effect Of Shifting The Aggregate Demand Curve - Demand Shocks| FXMAG.COM GBP: Northern Ireland trade deal yet to provide a sterling boost So far, sterling seems to be taking little notice of potentially improved trading and political relations between the UK and the EU. Later today, expectations are building that a deal will get announced between the two to soften the trade barriers on the Irish sea. It will be interesting to see whether this will be sufficient to get the DUP back into government in Northern Ireland.  An improvement in UK-EU relations probably does little for sterling in that it will not improve the broader trading environment between the UK and the EU. Instead, the macro-monetary settings of the two will continue to dominate. The ECB looks like it has much further to hike than the Bank of England and suggests that EUR/GBP continues to find support under 0.88. GBP/USD will be vulnerable to continued dollar strength and risks a move to 1.1850 this week. Chris Turner CEE: NBH to assure market that it is too early for change More action returns to the region this week. We start on Tuesday with the National Bank of Hungary meeting. In line with the market, we expect rates to remain unchanged. There is no discussion on the macro side. Central bankers are waiting for a tangible and sustained improvement in domestic and external risks and it is clear that the developments so far are positive but still insufficient for the NBH to reverse course. From a market perspective, however, the main question is whether the central bank can maintain the hawkish tone it set in January. PMI indicators for February across the region will be released on Wednesday. We expect a slight improvement in sentiment in Poland and the Czech Republic and a deterioration in Hungary. We will also see the final GDP numbers for the fourth quarter of last year across the region during this week. On the ratings side, we have two interesting reviews in the CEE region this week - Moody’s in Hungary and Fitch in the Czech Republic. More interestingly, Hungary received a negative outlook and rating downgrade recently from Fitch and S&P and we expect a negative outlook from Moody’s as well. In the Czech Republic, Fitch downgraded the outlook already last year to negative. In our view, the risk of a rating downgrade has diminished since the last review in October but is still significant. In the FX market, this week the main focus will be on the Hungarian forint to see if it can extend its rally. The main driver will be NBH and its efforts to maintain a hawkish tone. Given market expectations, the central bank may only deliver a small push to the forint, but it's still worth being bullish and testing new levels below 380 EUR/HUF, in our view. However, at the end of the week, Moody’s will remind us that there are still a number of issues on the table in Hungary led by EU money access, which should bring the forint back to or above 380 EUR/HUF. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  
The Commodities Feed: US announces SPR purchase

Crude Oil Remains Anchored Near The Lower, US PCE inflation data on Friday spooked the market

Saxo Bank Saxo Bank 27.02.2023 09:42
Summary:  US PCE inflation data on Friday spooked the market as the Fed terminal rate for this year was taken higher still, with discussion of the risk of larger hikes even afoot. Both the US S&P 500 Index and Nasdaq 100 touched their 200-day moving averages intraday on Friday as yields jumped. This week’s focus still on geopolitical developments, faltering confidence in the China re-opening narrative and US Feb. ISM Surveys Wednesday and Friday, with the key US employment figures not up until next week. What is our trading focus? US equities (US500.I and USNAS100.I): bonds will continue to dictate where equities go US equities continued their decline on Friday with S&P 500 futures declined 1.1% to the lowest close since around mid-January as US inflation figures (PCE deflator) surprised to the upside. As we have explained in recent equity notes the equity market will be driven by the talk about structural inflation over the coming months and how that discussion recalibrates long-term US bond yields to higher levels. In late April and May when the Q1 earnings are released the discussion about margin compression will heat up again, so there are plenty of downside risks still in equities in 2023. Hang Seng Index (HSI.I) and CSI300 (000300.I) slid amid economic, policy, and geopolitical uncertainties Hang Seng Index and CSI300 extended their declines with both indices falling around 0.4-0.5%. Investors trimmed positions as sentiment was dampened by resurge of tension between the U.S. and China over Russia and Ukraine and the lack of substantive recovery in the Chinese economy aside from credit expansion and survey data. China’s central bank emphasized in its Q4 Report on the Execution of Monetary Policy that the monetary policy must be stable and not bring about excessive liquidity that induces excessive investment, a surge in debts, and asset bubbles. Investors interpreted that as a signal to lower the expectations of the market on aggressive monetary easing. The CCP’s central committee is holding a meeting from 26-28 February to decide on the recommendation list of candidates for top government posts to be sent to the National People’s Congress to finalize during the latter’s meeting commencing from 5 March. FX: Japanese yen touched YTD lows, GBP in focus with Brexit talks The dollar strength was back in focus as hot core January PCE inflation data on Friday took the repricing of the Fed’s path higher once again. With 2-year yields surging to their fresh highs, along with BOJ governor nominee Kazuo Ueda’s continued push for a loose monetary policy coming against market’s hawkish expectations, the Japanese yen plunged to its lowest levels this year, with USDJPY testing 136.50 overnight. Also worth watch will be AUDUSD which plunged in close sights of 0.67 as risk sentiment and commodity prices are taking a beating. Elsewhere, UK PM Sunak is making headlines with reports saying that he may have won big concessions in the looming Brexit deal, with reports suggesting that an agreement between the UK and European Union on Northern Ireland appears to be very close. UK PM Sunak and EU head Ursula Von Der Leyen will hold talks mid-day on Monday. These are being described as 'final talks'. This will be followed by a news conference and Sunak’s statement to the parliament. GBPUSD dropped below 1.20 with the 200DMA at 1.1928 in focus. Crude oil remains anchored near lower end of range Crude oil remains anchored near the lower end of its the established range that has prevailed since the end of 2022, in Brent between $80 and $89, and WTI between $82 and $73. Overall, the sentiment across markets, including commodities, suffered another blow last week after traders and investors in response to another hot US inflation data increased forecasts for US interest rates. Higher rates may hurt economic growth and with that fuel demand from consumers. China meanwhile remains on a recovery track but for now it has only prevented an even deeper selloff in crude oil. A disruption in oil supply to Poland via the Druzhba pipeline from Russia, a day after Poland delivered its first Leopard tanks to Ukraine, is having a limited impact. Speculators meanwhile hold an elevated long position in Brent according to COT data released on Friday (see below). In focus this week, the annual International Energy Week which kicks off in London on Tuesday. Gold (XAUUSD) slumps towards next area of support The US dollar reached a multi-week peak in the aftermath of hot US data and together with higher yields have weighed on the yellow metal, with gold risking further weakness towards the 200DMA at $1776 amid a tough macro environment. US ISM PMIs in focus this week, along with more Fed speakers, as a guide to high how interest rates could go. Silver (XAGUSD) fell harder, down 2.5% on Friday and closing with a weekly loss of 4.5%, breaking below the 200DMA at $21. The gold-silver ratio meanwhile has spiked to 87.80 high, a 16% underperformance relative to gold since mid-December. Copper trades below $4 support With the US PCE data further aggravating concerns on Fed’s rate hike path and bringing the 2-year yields to fresh highs, base metals plummeted. Copper prices plunged to a seven-week low below the key $4 support with the next key support being the 200DMA at $3.77, the break above which triggered January’s surge. Incongruent signs of a pickup in Chinese demand also continue to underpin, and the PMI reports this week will be key to signal whether activity levels are picking up. However, with supply over time potentially struggling to keep up with demand, we view the current weakness as temporary and part of the general loss of confidence that has hit markets this month. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) jump after hot core PCE inflation data The hot core US January PCE inflation data released on Friday (more below) shocked US yields to new cycle highs, with the 2-year treasury benchmark yield reaching above 4.8% for the first time since 2007 as the market moved to completely price in at least a 25bp hike each at the March, May, and June FOMC meeting plus about a 25% chance that the hike in March is 50bps, bringing the terminal rate to 5.4. The Jun-Dec 2023 spread narrowed 11bps to -11.5bps, almost entirely eliminating expectations for rate cuts in the second half of 2023. Ten-year yields poked toward the recent cycle highs just shy of 4.00% and the 2-10 yield slope closed the week at a new multi-decade inversion record of –89 basis points (an intraday spike on Feb. 15 saw it briefly below –90 bps). What is going on? Hot US PCE brings Fed terminal rate expectations up to 5.4% The PCE deflator for January came in hotter-than-expected, and together with upward revisions to the previous month’s prints these sent a strong hawkish signal to the markets reinforcing the Fed’s higher-for-longer message. The Core PCE rose 4.7% Y/Y, accelerating from the upwardly revised 4.6% and above the expected 4.3%. The M/M rose 0.6%, hotter than the expected and upwardly revised prior of 0.4%. This brought an upward repricing of the Fed path, with increasing calls for 50 bps at the March meeting and the terminal rate now priced in at 5.4% (82+ bps of further hiking from current level) and the end-2023 expectation at –12 bps relative to peak rates, Fed members remain cautious on the path of inflation Fed voter Jefferson spoke about labor market strength on Friday, saying that ongoing imbalance between supply/demand for labour suggests high inflation may come down only slowly and said the argument that policymakers should accept that disinflation will be costly is well-reasoned. Bullard (non-voter) was on the wires again as well, and reaffirmed the need to move quickly to shield credibility. Collins, also a non-voter, said that recent US data affirms the case for more rate hikes. Mester (non-voter) said the Fed has to do "a little more" on rate hikes saying the new inflation data affirms the case for more rate hikes to get inflation back to target. Geopolitics remains in focus with China’s peace proposal talks After threats from US about making public the information on China supplying weapons to Russia, China came up with a 12-point peace proposal on Friday to be a neutral mediator in the Russia-Ukraine conflict. Reports suggested that China’s proposal took a clear anti-West stance, condemning NATO extension and sanctions against Russia, but Ukrainian President Volodymyr Zelensky has signaled he's open to China's new ceasefire plan and meeting President Xi. How these events turn this week will be key to watch, especially US comments and support to Ukraine if it was to accept China as a mediator. COT data shows unwavering support for higher Brent prices The ICE Futures Europe exchange released four weeks' worth of delayed COT data on Friday with reporting now up to date following the January cyber-attack on ION Trading UK, which caused delays in trades being reported. The US CFTC meanwhile released one COT report for the week ending January 31 with data unlikely to be up to date for another three weeks. ICE Brent data showed unwavering support for higher prices with funds holding a net long of 277k lots, a 16-month high and the weakest gross short position at 28k since 2011. The ICE gasoil (diesel) net long meanwhile dropped to 33.7k lots and lowest since November 2020. The futures contract (FPH3) trades near a one-year low with refinery margins under pressure as Middle East and Asian shipments replace supply from Russia. Food price inflation continues to ease One year on from the Russian attack on Ukraine which triggered a surge in wheat, corn and edible oils we a seeing prices continuing to deflate. Global wheat prices remain under pressure from a flood of Russian supplies forcing EU and US sellers to lower prices to stay competitive. In Chicago the soon to expire March wheat contract trades near a 17-month low, down 48% from the March 2022 panic peak while Paris Milling wheat has declined by 38%. The focus is turning to the outlook for global wheat crops this year. According to Bloomberg, US farmers are likely to plant more than analysts expect, and nearly all of France’s soft-wheat crop is in good to very good shape. Traders are also watching talks on the Ukraine grain-export deal, which is up for renewal in March. Berkshire Hathaway Q4 operating earnings miss estimates Warren Buffett’s holding company Berkshire Hathaway announced over the weekend operating earnings of $6.7bn vs est. $7.3bn driven by weaker results in its railroad and insurance businesses due to higher input costs for materials and labour. Berkshire Hathaway is still striking a positive outlook on the US economy. Warren Buffett also talks about the repurchases saying that they are not all bad if they are bought below the fair value. Woodside Energy reported profits triple in 2022 Following the theme of strong energy company earnings reports Woodside’s bottom line profits rose 228% fuelled by the rise of oil and gas prices, but also as Woodside output rose over 70%, after it acquired BHP’s oil and gas business. Woodside reported a larger final dividend of $1.44 per share, up from $1.05 a year ago. Its full year dividends payout stands at $4.8bn. On top of that, Woodside is now seeking opportunities to expand again narrowing in on potential buying assets in the Gulf of Mexico. Woodside’s record profit results follow a set of strong numbers from oil and gas producers including Shell, BP and Santos. This also sets the tone for energy companies in 2023. Woodside Energy shares ended 1.5% higher on Monday in Australia. Keep an eye on US and London listed Woodside.  Read next: Pfizer Is In The Early Stages Of An Acquisition Of Biotech Company Seagen, Twitter's Staff Has Shrunk Since Elon Musk Took Over| FXMAG.COM What are we watching next? China Government Work Report is delivered on 5 March This year’s Government Work Report will be delivered on 5 March. This will provide more details on policy action for urbanization and the property market. There will likely be two main points of interest: affordability (measures to increase accessibility to mortgage loans) and rural construction (focus on rural land transfers and reduction of complexity in regulation). With further stimulus measures in sight, we are confident that China will probably announce a higher GDP target at the upcoming National People’s Congress – meaning 5.5 %. US ISM surveys to be the next test for yields and US dollar The recent data out of the US has shown firm inflation and growth dynamics, prompting an upward repricing of the Fed’s path and bringing yields to critical levels. The ISM surveys this week will be key to watch for further direction, with the manufacturing survey out on Wednesday and services out on Friday. The consensus is for the manufacturing ISM to improve to 48.0 in February from 47.4 in January, but still in contraction (below 50) for a fourth consecutive month. The ISM services index saw a surge to 55.2 in January after a drop to 49.2 in December, partially a reflection of winter weather trends. Gains are likely to moderate, and consensus expects 54.5. EVs in focus – Tesla Investor Day and Li Auto and NIO report earnings China reopening theme is under strain, with the Asian reporting season underway, and this week brings earnings reports from two large EV manufacturers. Li Auto (02015:xhkg/LI:xnas) reported on Monday before China open while Nio (09866:xhkg/NIO:xnas) reports on Wednesday. It will be key to watch how Tesla’s steep discounts and the end of government subsidies impacts the outlooks for these two Chinese EV manufacturers which got off to a slow start this year, and whether the decline in lithium prices lifts the outlook higher. Tesla (TSLA:xnas) will hold an Investor Day event on March 1 in what could be one of the key days of the year for the electric vehicle giant. Nio, Li Auto and XPeng (09868:xhkg/XPEV:xnys) also report February deliveries this week, and China’s EV and battery giant BYD (01211:xhkg/BYD:xnys) should release February sales by Friday. Occidental earnings preview Oil and gas companies have again reported the best earnings growth this US and Australian corporate reporting season - with increased profits and higher dividends from Shell, BP and Santos. Occidental Petroleum’s outlook will be a focus today, as well as Canadian Natural Resources results later in the week. Occidental is expected to report its highest-ever Q4 net income, with the US energy giant set to benefit from high energy prices amid tight supplies. The oil and gas giant generated about $2.8bn in free cash flow in the period after years of austerity and debt reduction, according to Bloomberg consensus. Investors will closely monitor its 2023 spending and capital-returns outlook with adjusted EPS of $1.79 expected. Occidental's shares are down 6.6% this year. Earnings to watch Today’s key US earnings releases are Occidental Petroleum, Li Auto, and Zoom Video with a preview of Occidental Petroleum in the section above. Zoom Video will be watched as many retail investors still have a big interest in this pandemic winning company with analysts expecting FY23 Q4 (ending 31 Jan) up 3% y/y and EBITDA of $353mn up from $278mn a year ago. Li Auto is also in focus as the electric vehicle adoption continues to accelerate with Chinese production expected to expand more rapidly in 2023 as the zero-Covid policy has ended. Analysts expect Li Auto revenue growth of 66% y/y. The three other key earnings we are watching this are Salesforce, Snowflake, and Coupang which we highlight in our earnings watch note from last Friday. Monday: Woodside Energy, Alcon, Occidental Petroleum, Workday, Li Auto, Zoom Video Tuesday: Bayer, Moncler, ASM International, Target, Monster Beverage, HP, First Solar, Coupang, Rivian Automotive Wednesday: Royal Bank of Canada, Beiersdorf, Reckitt Benckiser, Kuehne + Nagel, Salesforce, Lowe’s, Snowflake, NIO Thursday: Anheuser-Busch InBev, Argenx, Yunnan Energy New Material, Toronto-Dominion Bank, Fortum, Veolia Environment, Merck, Hapag-Lloyd, CRH, London Stock Exchange, Haleon, Flutter Entertainment, Universal Music Group, Broadcom, Costco, VMware, Marvell Technology, Dell Technologies Economic calendar highlights for today (times GMT) 1000 – Eurozone Feb. Confidence Surveys 1330 – US Jan. Preliminary Durable Goods Orders  1530 – US Feb. Dallas Fed Manufacturing Activity 1530 – US Fed’s Jefferson (Voter) to speak 1700 – ECB Chief Economist Lane to speak 2350 – Japan Jan. Industrial Production 0000 – New Zealand Feb. ANZ Business Confidence 0030 – Australia Jan. Retail Sales Source:Financial Markets Today: Quick Take – February 27, 2023 | Saxo Group (home.saxo)
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The Path Of Least Resistance For The USD/CAD Pair Is To The Upside

TeleTrade Comments TeleTrade Comments 27.02.2023 09:54
USD/CAD attracts some dip-buying on Monday and draws support from a combination of factors. Sliding Oil prices undermines the Loonie and acts as a tailwind for the pair amid a stronger USD. The fundamental backdrop favours bullish traders and supports prospects for a further move up.  The USD/CAD pair attracts some buying following an intraday dip to sub-1.3600 levels on Monday and hits a fresh daily high during the early European session. The pair is currently placed around the 1.3625 region, though remains below its highest level since January 6 touched on Friday. Crude Oil prices meet with a fresh supply on the first day of a new week, which is seen undermining the commodity-linked Loonie and lending support to the USD/CAD pair. Worries that rapidly rising borrowing costs will dampen economic growth and dent fuel demand overshadow the prospect of lower exports from Russia. This, in turn, fails to assist Oil prices to build on a two-day-old recovery move from a nearly three-week low touched last Thursday. Apart from this, bets that the Bank of Canada (BoC) will pause the policy-tightening cycle, bolstered by softer Canadian consumer inflation figures released last week, weighs on the domestic currency. In contrast, the Federal Reserve is expected to stick to its hawkish stance in the wake of stubbornly high inflation. This, along with a softer risk tone, keeps the safe-haven US Dollar pinned near a multi-week high and acts as a tailwind for the USD/CAD pair. The prospects for further policy tightening by the Fed were reaffirmed by the stronger US PCE data on Friday, which indicated that inflation isn't coming down quite as fast as hoped. Adding to this, the incoming positive US macro data points to an economy that remains resilient despite rising borrowing costs and fueled hawkish Fed expectations. This remains supportive of elevated US Treasury bond yields and continues to boost the Greenback. Read next: Pfizer Is In The Early Stages Of An Acquisition Of Biotech Company Seagen, Twitter's Staff Has Shrunk Since Elon Musk Took Over| FXMAG.COM The aforementioned fundamental backdrop seems tilted firmly in favour of bulls and suggests that the path of least resistance for the USD/CAD pair is to the upside. Further, the technical picture also indicates a bullish continuation pattern may has formed after Friday's strong up day, which also helped to confirm the major trendline break of the previous two sessions. This continuation pattern could see prices rise up to the 1.3800 level conditional on confirmation from a break above Friday's high at 1.3665.  Market participants now look to the US economic docket, featuring the release of Durable Goods Orders and Pending Home Sales data. This, along with Oil price dynamics, should provide a fresh impetus to the USD/CAD pair and allow traders to grab short-term opportunities.
Analysis Of The USD/CNH Pair By Economist Lee Sue Ann And Markets Strategist Quek Ser Leang At UOB Group

Analysis Of The USD/CNH Pair By Economist Lee Sue Ann And Markets Strategist Quek Ser Leang At UOB Group

TeleTrade Comments TeleTrade Comments 27.02.2023 10:12
According to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, the continuation of the upside bias could encourage USD/CNH to retest the 7.0000 region ahead of 7.0200 in the next weeks. Key Quotes 24-hour view: “Last Friday, we indicated that ‘as long as 6.8900 is not breached, USD could rise to 6.9300 before the risk of a more sustained pullback increases’. While USD did not break 6.8900 (low has been 6.9118), the anticipated USD strength exceeded our expectations by a wide margin as USD rocketed to a high of 6.9820. Further USD strength is not ruled out but deeply overbought conditions suggest the major resistance at 7.0000 is unlikely to come into view today. Support is at 6.9650, followed by 6.9550.” Next 1-3 weeks: “We have expected USD to move higher since the start of the month. In our most recent narrative from last Friday (24 Feb, spot at 6.9160), we indicated that USD ‘has to break above 6.9300 within the next 1-2 days or the risk of an end to the USD strength will increase quickly’. Our view was not wrong even though we did not quite expect the manner in which USD blew past 6.9300 and surged to a high of 6.9820. The boost in upward momentum is likely to lead to further USD strength. The resistance levels to watch are at 7.0000 and 7.0200. The upside risk is intact as long as USD stays above 6.9220 (‘strong support’ level previously at 6.8700).”
Commodity: The World's Two Biggest Commodity Consuming Nations, Both Delivered Price Softening News

The New Week Starts With Little Appetite, Metals And Energy Are Under Pressure

Swissquote Bank Swissquote Bank 27.02.2023 10:20
The week starts on a cautious note, as the Federal Reserve (Fed) rate hike expectations intensify the selloff in global stocks and bonds, while pushing the US dollar higher against most majors. PCE data Friday’s PCE data showed that not only inflation didn’t slow in January, but headline figure ticked higher to 5.4% from 5.3% printed a month earlier, and core inflation ticked higher to 4.7% from 4.6% printed a month earlier. The latter fueled the Fed hike expectations, because a slower-than-expected easing in inflation is one thing, but rebound in inflation is another thing. US Yields As a result, the US yields keep pushing higher, and equities lower.In the FX, it becomes increasingly clear that we will see a pause in the USD downside correction. EUR/USD The EURUSD could further fall to and below 1.05, and renewed euro softness could weigh on European equities. Commodities In commodities, rising US yields and the stronger US dollar hint at further decline in gold prices, as well, while crude oil continues struggling. Read next: Pfizer Is In The Early Stages Of An Acquisition Of Biotech Company Seagen, Twitter's Staff Has Shrunk Since Elon Musk Took Over| FXMAG.COM Europe In Europe, Britain’s Rishi Sunak and EU’s Ursula von der Leyen will meet today to finalize the Northern Ireland drama. Watch the full episode to find out more! 0:00 Intro 0:21 Rebound in US inflation sends stocks, bonds tumbling 3:48 USD appreciation is also bad for European stocks 6:35 Metals, energy under pressure 8:11 Light at the end of Northern Ireland tunnel? 9:12 Tesla’s investor day coming! Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #inflation #selloff #Fed #ECB #expectations #EUR #GBP #Brexit #Northern #Ireland #XAU #Crude #Oil #Copper #DAX #Stoxx #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
RBNZ preview: Fiscal spending argues for a hawkish 25bp hike

The Kiwi Pair (NZD/USD) Touched Its Lowest Level

Kenny Fisher Kenny Fisher 27.02.2023 14:07
The New Zealand dollar has extended its losses on Monday, after a dismal end to the week. In the European session, NZD/USD is trading at 0.6151, down 0.20%. Earlier, NZD/USD touched a low of 0.6131, its lowest level since Nov. 23. The US dollar flexed its muscles against the majors on Friday, courtesy of a sharp rise in the US personal consumption expenditures price index (PCE), the Fed’s preferred inflation indicator. Headline PCE inflation climbed 0.6% m/m in January, up from 0.2% in December and above the estimate of 0.5%. Core PCE inflation also rose 0.6% m/m, above the December reading of 0.4%, which was also the forecast. As well, Personal Spending in January surged 1.8%, compared to -0.1% in December and an estimate of 1.3%. The uptake from the better-than-expected inflation and consumer data is that the economy remains resilient and the Fed may have to raise rates even higher, perhaps closer to 6%. The markets have quickly shifted from expecting a hold in rate cuts to pricing three more rate increases this year, and the US dollar is showing gains on expectations that more rate hikes are coming.  Following the PCE release, Fed member Mester said she wasn’t surprised by the strong numbers and said that the Fed needed to do more to put inflation on a “sustainable downward path to 2%”. New Zealand retail sales decline In New Zealand, retail sales for Q4 disappointed at -0.6% q/q, down from an upwardly revised 0.6% reading in Q3 and shy of the estimate of 1.5%. This marks the third decline in four quarters. The core rate fell by 1.3%, compared to an upwardly revised 0.6% in Q3 and an estimate of 1.5%. The central bank remains in aggressive mode and raised rates by 0.50% last week, bringing the cash rate to 4.75%. The decline in retail sales signals that the extensive tightening is taking a bite out of economic activity, which is necessary in order for inflation to decline. Read next: BNP Paribas Sued For Providing Financial Services To Companies That Allegedly Contribute To Deforestation Of The Amazon Rainforest| FXMAG.COM NZD/USD Technical 0.6124 is under pressure in support. Below, there is support at 0.6049 0.6193 and 0.6245 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Gold Trading Analysis: Technical Signals and Price Movements

EUR/USD Pair Is Trading Around 1.0560, USD/JPY Is Above 136.20, GBP/USD Gained

Kamila Szypuła Kamila Szypuła 27.02.2023 14:03
The dollar fell from a seven-week high on Monday as investors took stock of last week's strong US economic data and outlook for global interest rates. Friday's data showed that US consumer spending rose sharply in January, while inflation accelerated. Traders now expect the Fed to raise interest rates to around 5.4% by the summer. USD/JPY The first day of the new week for the USD/JPY pair was mixed in both the Asian and European sessions. The pair started the week at 136.4430, but fell to 136.00 during the day. At the time of writing, the yen was trading at 136.2970. In late February, the Japanese yen weakened above 136 to the dollar, hitting its lowest level in more than two months as Ueda, nominated governor of the Bank of Japan, doubled down on the bank's very restrictive monetary policy. The new governor of the Bank of Japan, Kazuo Ueda, said on Monday that the benefits of the bank's current monetary policy outweigh the costs, stressing the need to maintain support for the Japanese economy with very low interest rates. The comments reinforced signals that the bank will not turn away from its dovish attitude anytime soon. Previously, Ueda had opposed monetary tightening in response to cost-driven inflation and rejected immediate changes to the bank's yield curve control, warning that such measures would deeply hurt growth. EUR/USD EUR/USD started the week at 1.0556. In the Asian session, it mostly traded near 1.0550 and even 1.0560, then fell below 1.0540. In the European session, the euro was rising towards 1.0570. Currently, the EUR/USD pair is trading around 1.0560. The US currency has benefited widely from the view that its central bank has more power and leeway to counter inflation. Meanwhile, the Eurozone has to meet the varying needs of its twenty national economies, some of which will struggle to cope with even minor further interest rate increases. Interest rate differentials are likely to dominate euro fundamentals this week, although some key domestic data is emerging, most notably official eurozone inflation data. Due for release on Thursday and the annual base rate is expected to remain unchanged at 5.3% Read next: BNP Paribas Sued For Providing Financial Services To Companies That Allegedly Contribute To Deforestation Of The Amazon Rainforest| FXMAG.COM GBP/USD The movement of the cable pair resembles the movement of EUR/USD. GBP/USD started the week at 1.1950, but during the day GBP/USD fell towards 1.1930. In the European session, it gained an upward momentum and exceeded the level of 1.1980. Politically, European Commission President Ursula von der Leyen is due to travel to the UK today to meet Prime Minister Rishi Sunak on a new Brexit deal. This could see a resumption of trade between Northern Ireland and the UK, but it has not really translated into the GBP yet. AUD/USD The AUD/USD pair is the worst performer among the major currency pairs. The Aussie Pair started the day above 0.6730 but fell towards 0.6700 in the next session. In the European session, AUD/USD has slightly increased and at the time of writing it is just above 0.6710. The Australian dollar weakened to around $0.67, trading at its lowest level in nearly 2 months as better-than-expected US economic data boosted expectations that the Federal Reserve would need to raise interest rates further to stem rising inflation. Weak domestic employment data also affected the currency with Australia's unemployment rate unexpectedly rising to 3.7% in Q4 despite expectations to hold steady at 3.5%. Meanwhile, the Reserve Bank of Australia's latest monetary policy statement showed it had revised its inflation forecast for this year higher, saying price pressures were spreading to services and wages. Source: investing.com, finance.yahoo.com
Lagarde's Dilemma: Balancing Eurozone's Slowdown and Inflation Pressure

At The Close Of The New York Stock Exchange All Indices Gained

InstaForex Analysis InstaForex Analysis 28.02.2023 08:00
At the close of the New York Stock Exchange, the Dow Jones rose 0.22%, the S&P 500 gained 0.31% and the NASDAQ Composite rose 0.63%. Investors remain wary of more hawkish action from the US Fed amid high inflation, which recent data showed is slowing down at a slower-than-expected pace. Dow Jones Caterpillar Inc was the top performer among the components of the Dow Jones index today, up 3.81 points or 1.61% to close at 239.98. Quotes of Boeing Co rose by 2.31 points (1.17%), ending trading at 200.46. JPMorgan Chase & Co rose 1.23 points or 0.87% to close at 142.16. The least gainers were Walgreens Boots Alliance Inc, which shed 0.41 points or 1.15% to end the session at 35.39. Intel Corporation was up 0.95% or 0.24 points to close at 24.90, while Walmart Inc was down 0.72% or 1.03 points to close at 141.44.  S&P 500  Leading gainers among the S&P 500 index components in today's trading were Union Pacific Corporation, which rose 10.09% to 212.17, Enphase Energy Inc, which gained 5.94% to close at 210.78, and also shares of SolarEdge Technologies Inc, which rose 5.89% to end the session at 313.63. The least gainers were DISH Network Corporation, which shed 8.06% to close at 12.20. Shares of Lumen Technologies Inc shed 4.49% to end the session at 3.40. Quotes of Charles Schwab Corp fell in price by 3.37% to 77.88. NASDAQ  Leading gainers among the components of the NASDAQ Composite in today's trading were Lucira Health Inc, which rose 264.29% to hit 0.51, ContraFect Corp, which gained 52.90% to close at 4.74, and shares of Blackboxstocks Inc, which rose 47.27% to end the session at 0.81. The least gainers were Mount Rainier Acquisition Corp, which shed 46.22% to close at 5.05. Shares of Smith Micro Software Inc lost 36.40% to end the session at 1.59. Quotes of Apexigen Inc decreased in price by 33.22% to 0.87. Numbers On the New York Stock Exchange, the number of securities that rose in price (1813) exceeded the number of those that closed in the red (1217), and quotes of 95 shares remained practically unchanged. On the NASDAQ stock exchange, 2042 companies rose in price, 1656 fell, and 197 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 3.32% to 20.95. Gold Gold futures for April delivery added 0.39%, or 7.05, to hit $1.00 a troy ounce. In other commodities, WTI April futures fell 0.72%, or 0.55, to $75.77 a barrel. Futures for Brent crude for May delivery fell 0.86%, or 0.71, to $82.11 a barrel. Forex Meanwhile, on the Forex market, EUR/USD rose 0.59% to hit 1.06, while USD/JPY shed 0.17% to hit 136.23. Futures on the USD index fell 0.52% to 104.61   Relevance up to 03:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314214
Analysis Of The AUD/USD Pair By Markets Strategist Quek Ser Leang And Senior FX Strategist Peter Chia

There Is No Sign That The AUD/USD Price Could Break Through The Resistance At 0.6873

InstaForex Analysis InstaForex Analysis 28.02.2023 08:01
Yesterday, the Australian dollar started the day with a strong decline, but it failed to consolidate under 0.6730. In fact, now we see support being pierced, and in case it climbs to 0.6873, a false breakout. In the current technical conditions, there is no sign that the price could break through the resistance at 0.6873, so we will consider the beginning of the correction on the lower chart. On the four-hour chart, the price is above 0.6730, the Marlin oscillator is attacking the zero neutral line. There are all the conditions for the MACD line resistance at 0.6795. Keeping the price above this line will allow it to continue rising up to 0.6873. Consolidation below 0.6730 along with overcoming yesterday's low (0.6698) will open the target level of 0.6640 again.   Relevance up to 03:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336241
Rates Spark: Yields are looking up again

The GBP/USD Price Has Consolidated Above Both Indicator Lines

InstaForex Analysis InstaForex Analysis 28.02.2023 08:02
Yesterday, the pound made a big gain ahead of the currency market (122 points). The price overcame the signal level of 1.2030 and now it is aiming for the target level of 1.2155. On the daily chart, the signal line of the Marlin oscillator turned out to have made a false plunge under the graphical linear support (turquoise line). The oscillator's move into positive territory has now dramatically increased the odds. An important sign of the price reversal in the medium-term growth will be its consolidation above 1.2155, the final sign - over the MACD line (1.2315). But this, of course, is an alternative scenario. In current conditions, I don't expect the pound to climb above 1.2155. If such growth happens, it is very likely to be false. On the four-hour chart, the price has consolidated above both indicator lines, the Marlin has settled in the uptrend zone. We are waiting for the end of the pound's bullish correction. The opposite signal, confirming the reversal in the medium-term decline, will be the price moving below the MACD line (1.1980)   Relevance up to 03:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336243
Rates Spark: Nothing new on the dovish front

The EUR/USD Pair Is In The Bearish Momentum

InstaForex Analysis InstaForex Analysis 28.02.2023 08:05
On Monday, the market showed a renewed interest in risk: S&P 500 +0.31%, Euro Stoxx 50 +1.66%. But the main reason why the euro grew was increasing market expectations on the European Central Bank's rates, which sharply rose up to 3.9% by the beginning of 2024. As a result, the price overcame the resistance of 1.0595 and it is already aiming for 1.0660, deepening the correction, which we estimated was not deep. On the daily chart, the signal line of the Marlin oscillator turned up, helping the price reach the upper limit of the 1.0595-1.0660 range. On the four-hour chart, the price tentatively consolidated above the balance and MACD indicator lines, the Marlin oscillator rooted in the growth area. The price could reach the 1.0660 target resistance. The general trend is a downward one, there are no reversal conditions, as before. Consolidating below 1.0585, i.e. under the MACD line, will bring back the bearish momentum with the intention to reach the target range of 1.0443/70   Relevance up to 03:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336245
Technical Outlook Of The Main EUR/USD Currency Pair

The EUR/USD Pair Is Seen To Be Trading Just Below The 1.0590 Mark

Oscar Ton Oscar Ton 28.02.2023 08:07
Technical outlook: EUR/USD rallied through the 1.0620 high intraday on Monday before pulling back. The pair is seen to be trading just below the 1.0590 mark at this point in writing as bulls remain poised to push further toward the 1.0640-50 zone. Intraday support is seen around the 1.0570-75 range, and bulls are expected to come back strong if prices drop from here. EUR/USD is unfolding a larger degree corrective wave after prices pushed through 1.1025 swing highs on February 02, 2023. It is quite possible that the first wave is complete between 1.1025 and 1.0535 levels. If the above structure holds well, the quote could stage a rally toward 1.0700 and up to the 1.0800-1.0850 range. Prices should stay above 1.0535 for the above structure to remain intact. EUR/USD is facing immediate resistance around 1.0700-20; while support is seen at 1.0480 levels. The expected pullback should materialize from current levels or after breaking below 1.0481. Please note that bears are targeting 1.0100 levels before the corrective wave terminates. A high probability remains for a bullish bounce from 1.0100 since it is the Fibonacci 0.618 retracement of the earlier upswing. Trading plan: Potential short-term rally to 1.0700-800 zone before turning lower. Good luck!   Relevance up to 06:00 UTC+2 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314232
FX Daily: The ideal mix for the dollar – for now

The US Dollar Index Is Broadly Unfolding A Larger Degree Corrective Rally

Oscar Ton Oscar Ton 28.02.2023 08:09
Technical outlook: The US dollar index dropped through 104.24 lows intraday on Monday before finding bids again. The index is seen to be trading close to the 104.45 mark at this point in writing as bears prepare to drag further toward 104.00 levels in the near term. Intraday resistance could be seen close to the 104.55-60 zone for bears to be back in control. The US dollar index is broadly unfolding a larger degree corrective rally since hitting 100.50 lows early in February. The index might have terminated its first wave close to 105.00 over the last week and could be preparing for a corrective pullback toward 102.50 at least. We can expect the final wave to go higher toward 106.50 and further thereafter. The US dollar index is facing immediate resistance at 105.35; while support comes in around 103.40, followed by 102.40 levels respectively. A continued drop towards 104.00 will add further confidence to the fact that Wave B is progressing. On the flip side, if prices push beyond 105.35 from here, it could open the door toward 106.50 sooner than expected. Trading plan: Potential drop to 102.50 near term then rally resumes. Good luck!   Relevance up to 07:00 UTC+2 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314234
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

Analysis Of Movement Of The CAD/JPY Commodity Currency Pair

InstaForex Analysis InstaForex Analysis 28.02.2023 08:10
From the weekly chart it appears that there is a correction rally going up on the CAD/JPY commodity currency pair where the price movement is above the 10 EMA now the CAD/JPY commodity currency pair is trying to test the Bearish Fair Value Gap area level and if this level strong enough to hold back the pace and as long as this rally does not continue to break above the 104.06 level, there is a high probability for CAD/JPY in the next few weeks it will depreciate down again to test the 94.62 level and if this level is successfully broken then CAD/JPY will continue its decline to level 89.22 as the first target and level 84.88 as the second target. (Disclaimer)   Relevance up to 05:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120293
These findings of a review of the Reserve Bank of Australia may surprise you!

The AUD/USD Commodity Pair Has Potetial For Break Below The 0.6630 Level In The Near Future

InstaForex Analysis InstaForex Analysis 28.02.2023 08:13
After testing the area level of its Bearish Fair Value Gap-nya which is strong enough to hold the rate of rise of this commodity currency pair made the AUD/USD fall again, especially when it was confirmed by the appearance of the Bearish Flag pattern and deviations between price movements and the Stochastic Oscillator indicator and price movements that are below the EMA 10, it is certain that sellers are in the currency pair AUD/USD commodity money is currently dominating so that in the near future AUD/USD will try to test and break below the 0.6630 level. If this level is successfully broken down, then the 0.6586 level will be the main target, and the Bullish Fair Value Gap area level will be the second target level. with a note that if on the way down there is no significant correction again, especially if the level 0.6923 is successfully penetrated upwards because if this level is successfully penetrated then all scenarios of decline with the targets outlined earlier will become invalid and cancel automatically. (Disclaimer)   Relevance up to 05:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120315
Small factors combine to pressure credit

The EUR/USD Pair Maintains The Bearish Mood

Paolo Greco Paolo Greco 28.02.2023 08:15
5M chart of EUR/USD EUR/USD traded higher on Monday. It was unexpected for many people, but in general, we just witnessed a standard growth, and as a result, the pair was near the critical line. The only report that traders could pay attention to was the Durable Goods Orders. European Central Bank President Christine Lagarde had an interview, but she did not mention anything that was particularly new, just reassured that the rate will continue to grow as part of the fight against high inflation. And the Durable Goods Orders report was weak enough for the dollar to hold its current positions. It did not. As a result, the pair rose about 70-80 pips. There were few trading signals on Monday. The first one was formed in the US session, when the pair broke through 1.0581. The Kijun-Sen line was very near, so the price was close to it almost immediately. However, it was possible to earn about 15 pips on a long position. The same profit was possible on a short position upon a rebound from the critical line. And the last buy signal could have been ignored, as it was formed too late. But 30 points of profit is not a bad result either. COT report: Due to a technical glitch, new COT reports have not been released for almost a month, but on Friday, one of the reports for January 31 was released. This report does not make much sense, because since then, a month has passed, and the data from the next reports (which are more or less up-to-date) are still not available. Therefore, we will analyze the data that are available. The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since September. Around the same time, the euro started to rise. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. The euro has already started to fall, but it is not clear yet, is it a pullback or a new downtrend? In the reporting week, non-commercial traders opened 9,000 long positions while the number of shorts decreased by 7,100. Correspondingly, the net position increased by 16,100. The number of long positions exceeds that of short ones by 148,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue. 1H chart of EUR/USD On the one-hour chart, the pair maintains the bearish mood and trades below the Ichimoku indicator lines. We also formed a descending trend line, consolidating above which will determine the end of the downtrend. Despite the correction on Monday, the downtrend could easily resume with a bounce from the Kijun-Sen and the trend line. On Tuesday, important levels are seen at 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0762, as well as the Senkou Span B (1.0708) and Kijun-sen (1.0615). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On February 28, there are no important events planned in the European Union and the United States. In theory, with an empty fundamental background, the bulls will not have enough strength to overcome the critical line and the trend line. Therefore, I expect the euro to fall today. Otherwise, we'll have an uptrend. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders   Relevance up to 01:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336237
Analysis Of The GBP/USD Pair Over 6- 10.03 Week

The GBP/USD Pair Started A Fairly Strong Correction

Paolo Greco Paolo Greco 28.02.2023 08:17
5M chart of GBP/USD GBP/USD was also trading higher on Monday. The British currency was rising in the European trading session, when there were no important events and reports. So we can conclude that traders would have bought the pair yesterday anyway, regardless of the nature of the report on the US Durable Goods Orders report. The critical line was surpassed during the day, but the pair failed to settle above the Senkou Span B line. Therefore, the pair has a high chance of falling. Moreover, we did not see good reasons for the pound to rise on Monday. There will not be much news and events this week. If the pound manages to bring back the uptrend in such circumstances, it will be the most unexpected. I still expect the pair to fall. There were plenty of trading signals on Monday, but most of them were too difficult to work out. The first sell signal turned out to be a false one, but the pair managed to pass 20 points down, so traders managed to place a Stop Loss at breakeven. The second buy signal was not bad, but the price was also near 1.2007. Upon overcoming 1.2007, the price was also near the critical line. And after crossing the critical line it was too late to buy, because the pair had already risen 130 points from the daily low. Therefore, traders could try to work out some of the individual signals. They were probably even profitable, but it was inconvenient to trade on Monday. COT report: The COT report for the British pound has not been out for a month. The report for January 31 became available on Friday, which makes no sense since it came out a month ago. This report showed minimal changes. In the reporting week, non-commercial traders opened 1,400 long positions while the number of shorts decreased by 4,100. Thus, the net position of non-commercial traders increased by almost 10,000. The value of the net position has been steadily rising in recent months, but large market players are still bearish, and the GBP is rising against the USD (in the medium term), but from a fundamental perspective, it is very difficult to answer the question why it does it. The pound could start to fall in the near future. Formally, it has already started, but so far it looks like a flat. Take note that both major pairs are moving in a similar way, but the net position of the euro is positive and even implies an end of the upward movement, while it is negative for the pound... The non-commercial group of traders has a total of 54,000 long positions and 36,000 shorts. I am still rather skeptical about the long-term uptrend in the pound. The fundamental and geopolitical backgrounds do not favor a strong and swift rise in the British currency. 1H chart of GBP/USD On the one-hour chart, GBP/USD started a fairly strong correction and even settled above the downtrend line. While it has not overcome the Senkou Span B line, we can consider that the downtrend persists. The pair can still fall, but take note that the pair is in the sideways channel on the 24-hour chart, which is important. On February 28, it is recommended to trade at the key level of 1.1760, 1.1874, 1.1927-1.1965, 1.2106, 1.2185, 1.2269. The Senkou Span B (1.2091) and Kijun Sen (1.2034) lines can also generate signals. Rebounds and breakouts from these lines can also serve as trading signals. It is better to set the Stop Loss at breakeven as soon as the price moves by 20 pips in the right direction. The lines of the Ichimoku indicator can change their position throughout the day which is worth keeping in mind when looking for trading signals. On the chart, you can also see support and resistance levels where you can take profit. On Tuesday, no important data or reports are expected in the UK and US. Traders will not have much to react to, but on Monday, the pair showed that it is ready to move quite actively. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders   Relevance up to 01:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336239
What are the possible scenarios for EUR/USD? Euro against US dollar - inidicator analysis

The Euro (EUR) Currency Is Still Highly Overbought

Paolo Greco Paolo Greco 28.02.2023 08:20
The EUR/USD currency pair traded unusually on Monday. In reality, the pair frequently corrects on Friday following a long fall. This is because some traders set profit targets for positions before the weekend. At the same time, the downward trend continued on Friday, and the pair adjusted to the moving average on Monday. This pair's movement was somewhat supported by macroeconomic data. Yesterday, the United States released one more or less significant report on long-term goods orders. Although we have previously stated that we do not anticipate a significant response to this report, the dollar declined by around 60 points as a result of its release. We believe it is more likely a coincidence. The report itself revealed a considerably more significant decline in order volumes than was anticipated, disappointing buyers of dollars. As a result, the pair is currently trading close to the moving average line but has not yet surpassed it. We still don't know why the European currency can demonstrate observable growth, but if there is a consolidation above the moving average, then the bulls can take the lead for a while. The fundamental (global) background has not changed at all recently, and the euro currency is still highly overbought. On the 24-hour TF, the situation gets a little complicated on Monday. Meanwhile, the price is below the crucial level of 1.0609 (38.2% Fibonacci), but it has not yet been able to penetrate below the Senkou Span B. If not, the pair may quickly return its steps to the critical level, which is now located close to the level of 1.0780. Therefore, the pair must at least overcome the moving average on the 4-hour TF to anticipate growth. The rhetoric remains unchanged under Christine Lagarde. Christine Lagarde's speech, meanwhile, was already delivered this week. More specifically, it was a meeting with the Financial Times. Lagarde asserts that the ECB may require a further tightening of monetary policy and that the question of the level of the rate hike in March has nearly been completely addressed. As the rate hasn't been a secret for very long, traders now anticipate another 0.5% increase. Remember that the ECB effectively declared a 1.25% rate increase at the next three meetings a few months ago, and so far it has followed through on that plan. Consequently, Lagarde's remarks on Monday may have potentially supported the euro, but what would have caused the market to respond if there had been no new information? Ms. Lagarde added that the regulator is ready to increase the key rate once more if required to maintain 2% inflation. And this will certainly be necessary. A report for February will be released this week, and it predicts that the consumer price index may slow to 8.2%. We wouldn't jump to conclusions, however, given that Germany's inflation has already shown signs of growth. Ms. Lagarde may not want to shock the markets with strong pronouncements just yet because doing so will not be beneficial. What will the ECB do if inflation begins to rise again? There are already rumors that rates below 6% may not be sufficient to guarantee price stability by 2%, especially in the United States, where inflation has been declining for 7 consecutive months. It is far from certain that the ECB will be able to tighten monetary policy as sharply and enthusiastically as the Fed, given how much more complicated things are in Europe as a result of a rate hike. In general, as previously stated, 2023 may bring surprises, and all current inflation or rate projections are subject to another 1,000 changes. Remember how many experts forecast an impending recession in the US and the EU last fall and summer? And the Fed rate was at its highest point at 3.5% at the beginning of last year. As a result, this year's predictions will probably need to be updated more than once. As of February 28, the euro/dollar currency pair's average volatility over the previous five trading days was 69 points, which is considered "normal." Thus, on Tuesday, we anticipate the pair to move between the 1.0538 and 1.0676 levels. The downward turn of the Heiken Ashi indicator will signal the beginning of a new downward movement. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trade Advice: The EUR/USD pair is still moving downward. At this point, we can take into account new short positions with targets of 1.0498 and 1.0488 if the Heiken Ashi indicator reverses its upward trend. After the price is fixed above the moving average line, long positions can be initiated with targets of 1.0676 and 1.0742. Explanations for the illustrations: Channels for linear regression - allow us to identify the present trend. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 01:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336235
The Indian Rupee Pair Takes Clues From The Receding Fears Of Hawkish Fed Rate Moves

The Indian Rupee Will Display A Power-Pack Action After The Release Of The Q3 GDP Data

TeleTrade Comments TeleTrade Comments 28.02.2023 08:32
USD/INR has shifted its range below 82.70 amid an overnight correction in the USD Index. The Indian Rupee will display a power-pack action after the release of the Q3 GDP data. S&P500 futures have further added gains after a modest positive Monday, portraying ease in the risk-off mood. The USD/INR pair has shifted its business below 82.70 in the Asian session led by an overnight sell-off in the US Dollar Index (DXY). The asset has slipped as investors have ignored clouds of uncertainty associated with accelerating consumer spending in the United States amid an upbeat labor market. US tight labor market has shifted the bargaining power in the favor of job seekers from the hiring agencies amid a shortage of labor. This has flushed significant liquidity in the palms of households for disposal, which is fueling retail demand efficiently. No doubt, the fears of more rates by the Federal Reserve (Fed) are skyrocketing. But for now, the risk-off profile has eased gradually. S&P500 futures have further added gains after a modest positive Monday session, portraying an improvement in the risk appetite of the market participants. The alpha generated on 10-year US treasury bonds has turned lackluster around 3.92%. Meanwhile, the Indian Rupee will display a power-pack action after the release of the Q3 Gross Domestic Product (GDP) data for FY2022-23. The Indian economy showed double-digit growth in Q1 as helicopter money released by the Indian administration and expansionary monetary policy by the Reserve Bank of India (RBI) was spurting overall growth. In the second quarter, GDP started moderating and trimmed to 6.3% as the administration started contracting liquidity to bring down galloping inflation. The RBI projected the real GDP growth for 2022-23 at 6.8% and for the third quarter at 4.4%. On the oil front, the oil price has recovered to near $75.80 as the economy is betting on China’s reopening after a prolonged lockdown to contain the pandemic. It is worth noting that India is one of the leading importers of oil in the world and higher oil prices can impact the Indian rupee.  
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The Loonie Pair (USD/CAD) Remains On The Bull’s Radar

TeleTrade Comments TeleTrade Comments 28.02.2023 08:37
USD/CAD picks up bids to reverse the week-start pullback from monthly top. Cautious optimism underpins WTI rebound amid sluggish session. US Dollar remains on the way to posting the first monthly gain in five amid hawkish Fed concerns. Canada's Q4 GDP could help Loonie pair buyers on matching downbeat forecasts. USD/CAD prints a gradual rebound from intraday low amid a sluggish end to February, picking up bids to 1.3585 heading into Tuesday’s European session. In doing so, the Loonie pair fails to justify the recent rebound in Canada’s key export item, namely WTI crude oil, as traders brace for the fourth quarter (Q4) Canadian Gross Domestic Product (GDP) data. That said, the WTI crude oil bulls attack $76.00 while the refreshing intraday top, as well as reversing the previous day’s pullback from a one-week high. It should be noted that he hopes of easing US-China tension and hopes of upbeat inflation, as well as manufacturing activity in China, add strength to the black gold’s latest rebound. On the other hand, the US Dollar Index (DXY) prints mild gains around 104.80, following a downbeat start of the week, as greenback bulls cheer hawkish Fed bets despite mixed US data amid an unimpressive day so far. Talking about the risk catalysts, market sentiment improves on headlines suggesting the fact that the US offers an olive branch to Chinese companies despite its political differences with the dragon nation. “Despite fraying relations with Beijing, US President Joe Biden is expected to forego expansive new restrictions on American investment in China, denying a push by some hawks in his administration and Congress,” reported Politico late Monday. However, US National Security Advisor Jake Sullivan’s comments on China suggest that the political tussle among the world’s top two economies stays on the table. “China’s stance on the Russian invasion of Ukraine puts it in an “awkward” position internationally and any weapons support to Russia would come with ‘real costs,’” said US Security Adviser Sullivan on CNN’s “State of the Union” on Monday. That said, mixed US data jostled with the hawkish Fed speak and the US-China tension contributed to the lack of market clarity. That said, US Durable Goods Orders slumped -4.5% in January versus -4.0% expected and 5.1% prior. However, the Nondefense Capital Goods Orders ex Aircraft grew 0.8% versus 0.0% analysts’ expectations and -0.3% previous readings. On the same line, the US Pending Home Sales rallied 8.0% MoM versus 1.0% expected and 1.1% prior. At home, Canada’s Q4 Current Account Deficit grew to -10.64B versus -8.41B. Against this backdrop, the S&P 500 Futures print mild gains around 3,995, extending the week-start rebound from the monthly low, whereas the US two-year Treasury yields remain sidelined near 4.79% after reversing from a three-month high on Monday. That said, the US 10-year Treasury bond coupons seek clear directions near 3.92% following a downbeat start of the week. Looking ahead, Canada’s Q4 GDP Annualized, expected to ease to 1.5% versus 2.9% prior, could keep the USD/CAD buyers hopeful. Also important to watch will be the second-tier US data, namely Conference Board’s Consumer Confidence, Chicago Purchasing Managers’ Index and Richmond Fed Manufacturing Index for February, as well as the preliminary US trade numbers for January. Technical analysis Unless dropping back below the previous resistance line from early November, around 1.3570 by the press time, USD/CAD remains on the bull’s radar.
Bank of England is expected to hike the rate by 25bp. Kelvin Wong talks Euro against British pound

The EUR/GBP Cross Pair's Recovery Remains Elusive

TeleTrade Comments TeleTrade Comments 28.02.2023 08:43
EUR/GBP remains depressed around 0.8790, refreshing the monthly low, as traders brace for Tuesday’s European session. In doing so, the cross-currency pair extends the previous day’s pullback from the 50-DMA hurdle amid bearish MACD signals. Also keeping the EUR/GBP sellers hopeful is the pair’s lower high formation, as portrayed by a three-week-old descending resistance line surrounding 0.8850 by the press time. That said, the pair sellers appear well-set to drop towards an upward-sloping support line from December 19, 2022, close to 0.8760. However, the pair’s further downside is likely to be limited by the 100-DMA support level near 0.8750. In a case where the cross-currency pair remains weak past 0.8750, the lows marked in January 2023 and late December 2022, respectively near 0.8720 and 0.8690, could act as additional downside filters. Meanwhile, EUR/GBP recovery remains elusive unless the quote stays below the 50-DMA hurdle of 0.8831. Even if the quote rises past 0.8831, the aforementioned three-week-old resistance line could challenge the pair buyers near 0.8850. Following that, the mid-February swing high surrounding 0.8930 appears the last defense of the EUR/GBP bears. EUR/GBP: Daily chart Trend: Further downside expected
InstaForex's Ralph Shedler talks Euro against Japanese yen

The USD/JPY Pair Bulls Seem To Run Out Of Steam

TeleTrade Comments TeleTrade Comments 28.02.2023 08:47
USD/JPY remains sidelined, fails to extend week-start pullback from two-month high. Impending bear cross on MACD, bearish chart formation challenges Yen pair buyers. 50-SMA adds strength to the 135.00 support holding the door for sellers. USD/JPY seesaws near 136.30-40 during the initial hours of Tuesday’s European session. In doing so, the Yen pair fails to extend the previous day’s U-turn from the two-month high while staying inside a three-week-old rising wedge bearish chart pattern. In addition to the rising wedge and lackluster moves, the impending bear cross on the MACD also keeps USD/JPY sellers hopeful unless the quote defies the bearish chart pattern. For that, the Yen pair needs to remain successfully beyond the 136.90 immediate hurdle, as well as cross the 137.00 round figure. It’s worth observing that the mid-December 2022 high near 138.20 acts as the last defense of the USD/JPY bears, a break of which could quickly propel the prices towards the 140.00 psychological magnet. Meanwhile, a convergence of the 50-SMA and the aforementioned wedge’s bottom line highlights the 135.00 round figure as the short-term key support. Should the USD/JPY bears keep the reins below the 135.00 support confluence, the early month high near 133.00 may probe sellers during the theoretical south run targeting the monthly low of near 128.00. Overall, USD/JPY bulls seem to run out of steam after posting the biggest monthly jump in four months. Though, bears are far from entry unless the quote stays beyond 135.00. USD/JPY: Four-hour chart Trend: Limited upside expected
RBNZ preview: Fiscal spending argues for a hawkish 25bp hike

Bearish Bets For The New Zealand Dollar (NZD) Are Escalating

TeleTrade Comments TeleTrade Comments 28.02.2023 08:50
NZD/USD is exposed to 0.6130 after retreating from 0.6180 as the risk-on mood has faded. The 10-year US Treasury yields have jumped above 3.93% amid rising fears of more rates by the Fed. Investors are expecting an increase in the Caixin Manufacturing PMI to 50.2. The NZD/USD pair delivered a downside break of the sideways auction formed in a range of 0.6160-0.6182 in the Asian session. The Kiwi asset has now slipped further and is declining towards 0.6130 in the early European session as the risk-on profile has retreated after a recovery move. The US Dollar Index (DXY) has extended its revival move to near 104.50 as galloping consumer spending from households in the United States economy is bolstering the case of continuation of policy tightening by the Federal Reserve (Fed). S&P500 futures have surrendered their entire gains added in the Asian session, portraying a sheer recovery in the risk aversion theme. Also, the 10-year US Treasury yields have jumped above 3.93%. Bearish bets for the New Zealand Dollar are escalating as investors are getting anxious ahead of the release of the Caixin Manufacturing PMI (Feb) data, which will release on Wednesday. Investors are expecting an increase in the PMI figures to 50.2 from the former release of 49.2. The reopening of the Chinese economy with a promising economic outlook due to fiscal stimulus has backed bullish bets for the Caixin PMI data. It is worth noting that New Zealand is one of the leading trading partners of China and higher manufacturing activities will also strengthen the New Zealand Dollar. Inflationary pressures in the New Zealand economy could decelerate ahead as retail demand has dropped firmly. The Retail Sales data for the fourth quarter of CY2022 has contracted by 0.6% while the street was expecting an expansion of 1.5%. This might provide some relief to the Reserve Bank of New Zealand (RBNZ).
Central Banks and Inflation: Lessons from History and Current Realities

The Recently Agreed EU-UK Brexit Deal Also Seems To Tease The Sellers Of The GBP/JPY Cross-Currency Pair

TeleTrade Comments TeleTrade Comments 28.02.2023 08:52
GBP/JPY holds lower ground near the intraday bottom, snaps two-day uptrend. Doubts over Brexit deal’s capacity to gain British Parliamentary approval probe the earlier hopes of overcoming month-long political deadlock. Yields grind higher amid month-end positioning mixed sentiment. Unimpressive Japan data, incoming BoJ policymakers’ defense of easy money policy keep buyers hopeful. GBP/JPY pares the monthly gain as it retreats from the seven-week high to 164.15 during early Tuesday. In addition to the month-end consolidation, receding optimism over the recently agreed EU-UK Brexit deal also seems to tease the sellers of the cross-currency pair. The initial agreement between UK Prime Minister Rishi Sunak and European Commission President Ursula von der Leyen over Northern Ireland Protocol (NIP) is yet to gain parliamentary approval and hence doubts about the same probe GBP/JPY buyers. On the same line is the news shared by BBC News saying, the leader of the Democratic Unionist Party (DUP) has said he and his colleagues will take their time to examine the new Brexit deal for Northern Ireland. Daily Express news also challenges the Brexit optimism by saying, “Boris Johnson has privately urged the DUP to be cautious about backing Rishi Sunak's Brexit deal.” Alternatively, odds favoring the continued existence of the Bank of Japan’s (BoJ) easy money policy challenge the GBP/JPY bears. That said, the incoming Bank of Japan (BoJ) Deputy Governor Shinichi Uchida testified before the Japanese parliament’s Upper House while defending the central bank’s easy money policy. In doing so, Uchida rules out hopes of altering the 2.0% inflation target, as well as hopes of bolstering the Yield Curve Control (YCC) policy. Earlier in the day, BoJ Deputy Governor Masazumi Wakatabe said, “Central banks must remain on guard against the potential dangers of secular stagnation and low inflation as price rises driven by cost-push factors do not last long,” per Reuters. It should be noted that the mixed Japan data and yields fail to offer clear directions to the pair traders. That said, Japan’s Industrial Production shrunk 4.6% in January versus -2.6% expected and 0.3% prior growth. However, the Retail Trade grew 1.9% MoM on a seasonally adjusted basis from 1.1% prior and -0.2% market forecasts. Against this backdrop, the US 10-year and two-year Treasury bond yields regain upside momentum around 3.93% and 4.80% respectively, despite being lackluster of late. Further, the S&P 500 Futures also trace Wall Street’s gains by the press time. Looking ahead, Brexit headlines and BoJ updates are key to watch for the GBP/JPY pair traders for clear directions. Technical analysis The monthly bullish channel keeps GBP/JPY buyers hopeful even as the overbought RSI hints at a pullback toward the 200-DMA support of 163.40.
Australian dollar - the sharp drop can be attributed to technical factors and hawkish Fed

Downtrend Of The AUD/USD Pair Is Still Far From Being Over

TeleTrade Comments TeleTrade Comments 28.02.2023 09:01
AUD/USD struggles to capitalize on its modest uptick amid renewed USD buying. Hawkish Fed expectations, elevated US bond yields help revive the USD demand. Recession fears offset the upbeat Australian Retail Sales and act as a headwind. The AUD/USD pair attracts some sellers following an uptick to mid-0.6700s and stalls a modest recovery from its lowest level since January touched the previous day. The pair retreats to the lower end of its daily range, around the 0.6730-0.6725 region during the early European session and is pressured by reviving US Dollar demand. The prospects for further policy tightening by the Fed remain supportive of elevated US Treasury bond yields and continue to act as a tailwind for the USD. In fact, the markets seem convinced that the US central bank will stick to its hawkish stance for longer in the wake of stubbornly high inflation. The bets were reaffirmed by the stronger US PCE Price Index released last Friday, which indicated that inflation isn't coming down quite as fast as hoped. Market participants, meanwhile, remain worried about economic headwinds stemming from rapidly rising borrowing costs. Apart from this, geopolitical tensions keep a lid on the overnight optimistic move in the equity markets, which further benefits the safe-have Greenback and contributes to capping the upside for the risk-sensitive Aussie. This overshadows better-than-expected Australian Retail Sales and does little to lend any support to the AUD/USD pair. In fact, the Australian Bureau of Statistics reported that Retail Sales grew by 1.9% in January against consensus estimates for a 1.5% rise and the 3.9% downfall recorded in the previous month. The AUD/USD pair's inability to gain any meaningful traction in reaction to the upbeat domestic data suggests that the downtrend witnessed since the beginning of this month is still far from being over. Bears, however, might wait for a sustained break below the 0.6700 mark. Traders now look to the US economic docket - featuring the release of regional manufacturing PMI and the Conference Board's Consumer Confidence Index. This, along with the US bond yields and the broader risk sentiment, might influence the USD price dynamics and provide some impetus to the AUD/USD pair later during the early North American session. Nevertheless, the fundamental backdrop suggests that the path of least resistance for spot prices is to the downside.
Impact of Declining Confidence: Italian Business Sentiment in August

FX Daily: Risk sentiment too fragile for a big dollar correction

ING Economics ING Economics 28.02.2023 09:16
The dollar is restrengthening this morning after a soft start to the week. Still, the data flow is not endorsing any unwinding of Fed hawkish bets and further improvements in risk sentiment may become harder to sustain. Today, keep an eye on French and Spanish inflation, and on the Norges Bank FX purchases announcement UK PM Rishi Sunak and EC President Ursula von der Leyen at a press conference on a new post-Brexit trade arrangement for Northern Ireland USD: Not trusting a big rebound in risk sentiment The dollar is trading stronger across the board this morning after suffering a correction yesterday that was due to a rebound in global equities and probably some month-end flows. We have recently highlighted how the narrative for the greenback has turned more structurally supportive, meaning that a return to a USD downtrend will take time and may only be very gradual. That is unless incoming data start painting a different picture for the US economic and inflation outlook, which would force some unwinding of recent hawkish bets on the Fed. This week’s key data releases will be the ISM surveys, and in particular Friday’s ISM services index, which served as a benchmark for the rapid swings in US growth sentiment over the past two prints. Still, we have some interesting data points to monitor today. The Conference Board consumer confidence indicator is expected to rise after a small contraction in January, the Richmond Fed Manufacturing Index is also expected to improve, while wholesale inventories may hold at 0.1% month-on-month in the January read. US data may not move the market dramatically today, so the dollar may be primarily driven by global risk sentiment. We struggle to see a material and sustained recovery in global equities in such a worsening valuation environment, and with data still supporting the Fed’s hawks for now, the dollar’s short-term bias still appears neutral/modestly bullish. A return above 105.00 in DXY seems possible in the ISM services release on Friday. Francesco Pesole EUR: Regional CPI figures in focus Inflation figures for January are the main highlight of the week in the eurozone, and today’s numbers out of France and Spain may already start moving the market. Remember that inflation rebounded in both of those countries in January, which underpinned the recent ECB hawkish narrative. Today, consensus sees a stabilisation in the EU-harmonised French inflation at 7.0% and a slowdown from 5.9% to 5.7% in Spain. Unless we see a material surprise on the downside – that would suggest a more widespread easing in price pressures across the eurozone – today’s regional CPI figures may fail to dent hawkish expectations for ECB tightening. Markets are currently pricing in around 130-140bp of tightening before reaching the peak. This could offer some floor to the euro, and we expect any re-strengthening of the dollar to see high-beta commodity currencies more at risk than the euro for the time being. Still, the risks of 1.0500 being tested in the near term remain elevated. Francesco Pesole GBP: Impact of new Northern Ireland deal may be only short-lived The pound is one of the best-performing currencies since the start of the week after the confirmation of a new UK-EU deal on Northern Ireland. The “Windsor Framework” reviews some sticky points of the existing NI protocol, essentially reducing the number of checks on trade between Northern Ireland and the rest of the UK. The direct impact on the UK economy should not be significant, but markets are probably welcoming the conciliatory steps in UK-EU trade relationships. It seems hard, however, that the pound will find sustained support simply based on the new NI deal. The central bank story should instead remain the most central driver of GBP, and given the lack of data today, markets will watch three Bank of England speakers today: Jon Cunliffe, Huw Pill and Catherine Mann. A 25bp move in March is fully in the price, and the debate appears to be much more centred on whether the Bank will need to keep tightening beyond March: markets are definitely swinging on the hawkish side, expecting a total of 80bp of tightening before reaching a peak. For now, the global central bank narrative and improving UK data are not giving many reasons to unwind such hawkish expectations, and the pound may continue to prove more resilient than other pro-cyclical currencies. Francesco Pesole Scandinavia: Grim data in Sweden and Norges Bank FX sales in focus Swedish growth data came on the soft side this morning. The second print of fourth-quarter data showed a larger contraction (0.9%) than previously estimated (0.6%). Although this is clearly backward-looking data, the ongoing tightening by the Riksbank, a very fragile housing market and high inflation continue to point to a rather grim economic outlook in Sweden. Remember that we are approaching the end of wage negotiations in Sweden, which may suggest even more monetary tightening will be required. We see the recent good performance of SEK as unsustainable unless data start pointing at an improvement in the growth outlook. A return to 11.10+ in EUR/SEK (paired with elevated volatility) is a tangible possibility in the coming weeks. In Norway, we’ll keep a close eye on Norges Bank’s announcement of daily FX purchases for the month of March this morning. Net purchases were increased to 1.9bn NOK for February after three months of reductions from the 4.3bn peak in October 2022. With NOK being the worst-performing currency in G10 this year and risk sentiment instability continuing to pose downside threats (remember the krone is the least liquid currency in G10), some support in the shape of lower FX purchases may come from Norges Bank today. This may avert – or at least delay – another decisive break above 11.00 in EUR/NOK. Francesco Pesole Read this article on THINK TagsFX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
UK Gfk Consumer Confidence index got better fourth month in a row

Sterling (GBP) Modestly Firmer In The Wake Of Post-Brexit Settlement Between The EU And UK

Saxo Bank Saxo Bank 28.02.2023 09:23
Summary:  In FX, The US equity market tried to rally yesterday after Friday’s pummeling on hot inflation data, but generally failed to maintain altitude and dropped back close to unchanged on the session as key support remains in place. End of month flows could drive volatility today. In FX, sterling modestly firmer in the wake of post-Brexit settlement between the EU And UK on the Northern Ireland border issue. What is our trading focus? US equities (US500.I and USNAS100.I): S&P 500 futures remain in limbo US equities bounced back yesterday at point engulfing the entire selloff from last Friday before S&P 500 futures gave up its gains towards the end of the session. This morning the index futures opened higher but have sold off trading around the 3,984 level in early European trading hours. Equities have moved into a short-term hibernation until the market gets more clearer evidence of where the bond market wants to go and whether growth is picking up in China following the reopening of the economy post its zero-Covid policy. Hang Seng Index (HSI.I) pared early gains as tech names tumbled The Hang Seng Index jumped over 1% in early trading before paring all the gains and headed south, losing about 0.3% in the absence of headline drivers. Chinese developers, technology, and solar names led the charge lower. While A-share solar, energy storage, and chemical stocks retreated, the CSI300 was supported by consumer, textile, and pharmaceutical names and managed to advance 0.5%. FX: GBP rallies on Brexit trade deal, AUD still a laggard The USD softened in early Monday trading in the US yesterday, nearly erasing all of Friday’s gains as yields fell and stocks jumped in a risk-on environment, but the risk rally faded and the USD rebounded slightly. US durable goods data missed estimates, cooling off some of the momentum in short US yields. However, inflation fears continue to spell caution and no reversal in Fed’s tightening expectations was seen. Most of the USD softness came on the back of GBP strength on UK-EU finalizing a deal to smoothen Northern Ireland trade. GBPUSD surged from 1.1923 to 1.2060 and EURGBP slid below 0.88. AUDUSD failed to break below 0.67 handle but remained near recent lows even as metals recovered a notch. Crude oil remains anchored near lower end of range Crude oil futures slipped again on Monday before finding a bid overnight in Asia. Developments that continue to see the price action being confined within a narrowing range. Crude oil may nevertheless be heading for a fourth monthly loss as concerns about tighter monetary policies raises concerns about a hard landing and with that weaker demand for crude and products. While a slower than expected start to the year has triggered price downgrades from banks, the consensus still points to a pickup in demand and prices above $90 later in the year. A view shared by Vitol, the world’s largest independent oil trader who sees oil rise later in the year in response to a 2.2 million barrels a day jump in 2023 demand. In Brent we find ascending trendline support at $80.70 with resistance at $83.60. Copper back above $4 amid risk-on, Lithium supply concerns return A broad recovery in base metals was seen on Monday as the focus turns to this week’s Two Sessions gathering in Beijing where traders will be looking for fresh signals from the government. Copper trades back above $4 after finding support around $3.94, the December high. Also, in focus this week is China’s PMI releases due on Wednesday to assess the pickup in Chinese activity after Covid restrictions have been eased. Aluminum also gained following four weeks of losses amid ongoing supply concerns. Zinc and aluminium smelters in Yunnan have been asked to reduce output due to power rationing. Concerns about Lithium supply are also likely to rise as China investigates illegal mining. Operations in Yichun have been ordered to halt work indefinitely. The move could impact between 8-13% of global supply. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) flat ahead of end-of-month US Treasury yields rose slightly again yesterday to new 15-year highs after Friday’s jump on hot US PCE inflation but then eased back to approximately unchanged. It’s been a tough month for treasuries, with the 2-year yield benchmark surging some 60 basis points this month and the 10-year benchmark yield up over 30 basis points. Today is the last trading day of February and could see month-end rebalancing as we await incoming US data. Read next: EUR/USD Pair Is Trading Around 1.0560, USD/JPY Is Above 136.20, GBP/USD Gained| FXMAG.COM What is going on? UK-EU Brexit deal on Northern Ireland trade sealed The UK and EU reached a deal on Northern Ireland's trading arrangements aimed at ending years of friction caused by Brexit. The deal, known as “Windsor Framework”, aims to considerably cut customs paperwork and checks on goods moving from Great Britain but destined to stay in Northern Ireland. Existing requirements on trade from Northern Ireland to the UK will be removed. GBPUSD surged on the news to 1.20+. Yellen in Kyiv to show support Janet Yellen made an unannounced trip to Ukraine to highlight US support. She met with Zelensky and PM Shmyhal and also announced a disbursement of $1.25 billion in fresh economic aid, the first out of a total $10 billion pledged by the administration. It was also reported that the dignitaries discussed additional sanctions on Russia, including confiscating frozen Russian assets to benefit Ukraine's recovery, despite legal obstacles. Tesla shares gains 5% on German production ramp up Reuters reported yesterday that Tesla’s German car plant production hits 4,000 cars/wk which is ahead of schedule boosting sentiment. At this point, we do not know how big the cannibilazation is against its Shanghai production plant which has been the main exporter to Europe. On Friday, one of its more prolific investors Ross Gerber pulled his activist board seat bid suggesting shareholders are holding back from their criticism. Overnight one of Tesla’s suppliers, South Korea based L&F, announced that it had won a KRW 3.8trn cathode materials order, again suggesting demand is ramping up for Tesla. Zoom video rallied over 7% in post-market trading on a strong profit outlook The company reported slightly weaker sales than expected, but forecast Q1 profit of 96-98 cents per share versus analyst consensus of 87 cents and full year profits and especially 2024 profits well above analyst estimates. Zoom is reporting growth in enterprise customers while a shrinking revenue from individual consumers and small businesses. Energy giant Occidental reports disappointing results Occidental reported record quarterly earnings, but missed expectations after costs rose more than expected. The company guided for higher spending ahead, including on its direct air carbon reduction project. For the year ahead, it expects capital expenditure to be as high as $6.2b - vs $5.66b expected. OXY increased its dividend by 38% and announced a new $3 billion share buyback. Its adjusted EPS came in at $1.61, missing the $1.79 Bloomberg consensus. The miss also comes as it received lower than expected realised prices for natural gas - while realised prices for oil were slightly higher than expected.  Warren Buffett’s Berkshire Hathaway is the largest shareholder. A conference call to discuss the results for OXY is at 1 pm ET on Tuesday. Occidental shares fell 1% after hours. Occidental is the only major oil company reporting recently that missed market expectations – while Shell, BP and Woodside all beat. What are we watching next? Softer Eurozone flash February CPI may not be a big relief Broader expectations are for the Eurozone flash CPI to ease to 8.2% YoY in February from 8.6% last month amid lower energy prices. However, the core measure is still expected to be firm at 5.3% YoY, underpinned by higher non-energy industrial goods. This continues to suggest that the underlying price pressures remain firm, and another 50bps rate hike from the ECB remains likely in March. The minutes from the last ECB meeting are also out on Thursday, and the path after the next 50bps rate hike remains on watch. Lagarde previously noted that the ECB will not be at peak rates in March and there will most likely be ground left to cover, which suggested that hopes for a pause in May could be disappointed. France and Spain report preliminary Feb. CPI figures today, while Germany reports CPI tomorrow. Earnings to watch Today’s key US earnings to watch is Coupang and First Solar with the former being part of our earnings preview from last Friday and analysts expecting Coupang to announce 7% revenue growth and EBITDA of $197mn up from $-248mn a year ago as the company is under pressure to increase profitability. Coupang reports its Q4 earnings releases after the US market close. First Solar is expected to report its Q4 earnings after the US market close with analysts expecting 10% revenue growth y/y and EBITDA of $48mn down from $262mn a year ago. Tuesday: Bayer, Moncler, ASM International, Target, Monster Beverage, HP, First Solar, Coupang, Rivian Automotive Wednesday: Royal Bank of Canada, Beiersdorf, Reckitt Benckiser, Kuehne + Nagel, Salesforce, Lowe’s, Snowflake, NIO Thursday: Anheuser-Busch InBev, Argenx, Yunnan Energy New Material, Toronto-Dominion Bank, Fortum, Veolia Environment, Merck, Hapag-Lloyd, CRH, London Stock Exchange, Haleon, Flutter Entertainment, Universal Music Group, Broadcom, Costco, VMware, Marvell Technology, Dell Technologies Economic calendar highlights for today (times GMT) 0745 – France Feb. Flash CPI 0800 – Spain Feb. Flash CPI 1215 – UK Bank of England Chief Economist Huw Pill to speak 1330 – Canada Dec. GDP 1400 – US Dec. S&P CoreLogic Home Price Index 1500 – US Feb. Consumer Confidence 1500 – US Feb. Richmond Fed Business Conditions 1530 – US Feb. Dallas Fed Services Activity 1930 – US Fed’s Goolsbee (Voter 2023) to speak 2130 – API's Weekly Crude and Fuel Stock Report 0030 – Australia Q4 GDP 0030 – Australia Jan. CPI 0130 – China Feb. Manufacturing/Non-manufacturing PMI 0145 – China Feb. Caixin Manufacturing PMI     Source: Financial Markets Today: Quick Take – February 28, 2023 | Saxo Group (home.saxo)
The USD/JPY Price Seems To Be Optimistic

Saxo Bank Podcast: The Struggling JPY, Tesla's Incoming Investor Day And More

Saxo Bank Saxo Bank 28.02.2023 11:59
Summary:  Today we look at yields remaining near cycle highs, with US equities struggling into the close after an odd, intraday rally stumbled. Note that end of month is rolling into view today after a terrible month for bonds, with the US 2-year yield up 60 basis points month-to-date into today. On that note, we delve into whether yields really have any bearing on company investment. Elsewhere, pondering what inspires crude to pull itself out of the range, forward curves in the commodity space, the struggling JPY, Tesla's incoming Investor Day and much more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next: Elon Musk Is Richest Man Again, The State Bank Of India Had Raised $1 Billion From Global Banks| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Can yields also be the cart and not the horse? | Saxo Group (home.saxo)
ECB cheat sheet: Difficult to pull away from the Fed

FX: EUR/USD Is Above 1.06 Again, GBP/USD Also Gained

Kamila Szypuła Kamila Szypuła 28.02.2023 12:44
The U.S. dollar resumed its rally on Tuesday after dipping against sterling and the euro a day earlier, putting it back on track for its first monthly gain since September. The greenback's rally gathered momentum in recent weeks as upbeat economic data led to mounting expectations that the U.S. Federal Reserve will have to raise interest rates more than initially expected. The US economic report will include the Conference Board's Consumer Confidence Survey for February. In January, the annual expected consumer inflation component of this survey rose to 6.8% from 6.6% in December. The latest inflation data for January showed that price pressure remained higher than expected. If consumers' inflation expectations continue to rise, the US dollar could gain strength in the second half of the day. USD/JPY In the Asian session, the yen traded in the range of 136.20-136.30, but in the Asian session there was a sharp increase and at the time of writing USD/JPY is trading at 136.6930. Recent comments from new BOJ vice-president Shinichi Uchida and current BOJ governor candidate Kazuo Ueda had a dovish tone during testimony before the upper house of the Japanese parliament. Ueda confirmed his intention to stick to "abenomics" and defend the central bank's monetary policy stance. Japanese data released overnight were mixed as industrial production was weaker than expected and retail sales rose. Industrial production recorded the first decline in 3 months, when production fell in January by 4.9%MoM. Retail sales rose by a solid 1.9% m/m, with clothing and motor vehicles having the largest share. Manufacturing in Japan remains an area of ​​concern; however, consumption looks good and is indeed on track to recover. EUR/USD The euro pair fell in the morning session from levels above 1.06 to levels around 1.0585. In the European session, the EUR/USD pair rose significantly above 1.0620. At the time of writing, the EUR/USD pair is trading around 1.0615. However, deteriorating market sentiment seems to be limiting the pair's gains for now as the focus shifts to the Conference Board's US consumer confidence survey. The consumer price index (CPI) in France rose to 7.2% y/y in flash estimates in February from 7% in January. Similarly, the annual CPI in Spain rose to 6.1% from 5.9% in the same period. After stronger-than-expected inflation figures from major eurozone economies, markets are almost fully pricing in the European Central Bank's (ECB) final interest rate at 4%, down from 3.75% last week, with hawkish ECB betting helping the euro hold its ground. GBP/USD The cable pair in the Asian session maintained a downward trend and in its decline headed to the level of 1.2028. The European session provided a positive impulse for GBP/USD and the pair rose above 1.2090. The pound pair managed to break above the 1.21 level but failed to hold and is currently trading below that level at 1.2098. Meanwhile, British Prime Minister Rishi Sunak announced late Monday that he had reached an agreement with the European Union to replace the Northern Ireland Protocol with the Windsor Framework. While it's too early to tell whether these developments could have a lasting impact on sterling's valuation and the Bank of England's (BOE) policy outlook, the initial market reaction helped the pair to gain momentum. UK Prime Minister Sunak also noted that MPs would vote on the new deal and that they would respect the results of the vote. Later in the session, several BOE decision makers will give speeches. AUD/USD In the Asian session, the Australian pair recorded a significant drop from the 0.6750 levels to the 0.6710 levels. In the European session, the AUD/USD pair is rising again and trading around 0.6730. Source: investing.com, finance.yahoo.com, dailyfx.com
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

Whether The RBA Will Be Able To Avoid A Recession?

Kenny Fisher Kenny Fisher 28.02.2023 14:46
The Australian dollar remains under pressure and has edged lower on Tuesday. AUD/USD dropped below the 0.67 line on Monday for the first time since Jan. 3. Australian retail sales bounce back Australian retail sales jumped 1.9% m/m in January, following an upwardly revised 4% decline in December and beating the consensus of 1.5%. The data indicates that consumer demand remains resilient despite rising interest rates and higher inflation. For the RBA, the upswing in consumer spending is a sign that the economy can continue to bear higher rates. The central bank has hiked some 325 basis points since May 2022 in a bid to curb inflation. The cash rate is currently at 3.35% and the markets have priced in a peak rate of 4.3%, with four rate hikes expected before the end of the year – one more than what is expected for the Fed. The RBA meets on March 7 and is widely expected to raise rates by 25 basis points. Wednesday could be a busy day for the Australian dollar, as Australia releases inflation and GDP reports. Inflation for January is expected to ease to 7.9% y/y, following an 8.4% gain in December. GDP for the fourth quarter is projected to slow to 2.7% y/y, after a robust gain of 5.9% in Q3. A decline in inflation and in GDP would indicate that high interest rates are having their intended effect and slowing economic activity. The question is whether the RBA will be able to guide the slowing economy to a soft landing and avoid a recession. In the US, a recent string of strong numbers has raised speculation that the Fed could raise interest rates as high as 6%. The unseasonably warm weather in January may have played a part in the better-than-expected numbers and we’ll have to see if the positive data repeats itself in February. The markets have shifted their stance from a final rate hike in March with rate cuts late in the year to pricing in three more rate hikes in 2023. If upcoming inflation, employment and consumer spending reports point to a weaker economy, we can expect the markets to revert to pricing in a dovish pivot by the Federal Reserve.   AUD/USD Technical AUD/USD has support at 0.6656 and 0.6586 There is resistance at 0.6788 and 0.6858 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

There Is A Strong Chance Of The Canadian Economy Tipping Into A Recession By Mid-2023

Kenny Fisher Kenny Fisher 28.02.2023 14:57
Canadian GDP expected to slow in Q4 It’s a very light data calendar for Canadian releases this week, with today’s GDP report the sole tier-1 event. Canada’s economy is expected to slow to 1.5% y/y in the fourth quarter, following a solid 2.9% gain in Q3. A slowdown in economic activity is what the Bank of Canada is looking for, as inflation remains public enemy number one.  CPI is moving in the right direction as it fell to 5.9% in January, down from 6.3% in December. The BoC is optimistic that the downturn will continue, with a forecast that inflation will fall to 3% by mid-2023 and hit the 2% target by the end of the year. The BoC will have to tread carefully in this tricky economic landscape. The economy is cooling and while inflation is easing, it remains much higher than the 2% target and will require additional rate hikes which will make a soft landing a difficult endeavour. If growth continues to weaken in 2023, there is a strong chance of the economy tipping into a recession by mid-2023. The Bank meets next on March 8 and the markets are expecting a 0.25% hike for the second straight time. The Bank would like to take a pause in its tightening cycle but this will require a substantial drop in inflation. In the US, strong employment and consumer data and stubborn inflation have supported the Fed’s hawkish stance and there is talk of the Fed raising rates as high as 6%. It was only a few weeks ago that the markets were talking about a ‘one and done’ rate hike in March, followed by a long pause and perhaps some cuts by year’s end. This has all changed as the US economy has proven to be surprisingly resilient, despite rising rates and high inflation. The markets are currently pricing in three more rate hikes this year, but that could change in a hurry if key releases in February show that the economy is slowing down.   USD/CAD Technical There is resistance at 1.3701 and 1.3794 1.3570 is under strong pressure in support. 1.3478 is the next support line This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

The USD/JPY Pair Has A Good Signs Of Growth

InstaForex Analysis InstaForex Analysis 01.03.2023 08:00
Amid the dollar index's rise by 0.33%, the USD/JPY pair avoided falling towards the support of the embedded hyperchannel line with the 134.00 mark. The day closed at the opening level, this morning, the price is trying to continue rising. It is aiming for 137.75. The Marlin oscillator is decreasing, it is an obstacle to growth, but this decrease can be interpreted as the oscillator discharging before it grows further, which, however, does not completely eliminate the risk of reversal. On the four-hour chart, the indicator lines remain in force - yesterday, it stopped declining and turned upward before touching these lines. The signal line of the Marlin oscillator reversed from the support of the zero line. These are signs of growth. Signs of a reversal into a correction is the price converging with the Marlin oscillator. The convergence is weak, but if there are any catalysts (which is unlikely yet as the US ISM Manufacturing PMI for February may show an increase from 47.4 to 48.0 today), it could materialize with all its hidden potential. A technical first sign of a reversal would be for prices to move below the MACD line, below 135.73.   Relevance up to 03:00 2023-03-02 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336359
The GBP/USD Pair Is Expected The Consolidation To Continue

The GBP/USD Price Needs To Settle Under The MACD Line

InstaForex Analysis InstaForex Analysis 01.03.2023 08:01
The British pound was very bullish yesterday, rallied 117 pips, but it missed its 1.2155 target, stopping on the way to the February 21 high. The day closed under the signal level of 1.2030, breaking through it reveals the 1.1914 target. The technical situation has become more complicated over the past two days. Now to confirm the primary signal, the signal line of the Marlin oscillator should return under its own inclined support of turquoise color, in order to neutralize the previous false-breakout below it on February 24 (tick). We expect such a development, but it will take at least a day to materialize. The nearest target for the bears is 1.1914, which plays the role of an intermediate level in the current situation; then we expect a development to 1.1737, the high on September 13, 2022. On the four-hour chart, the price needs to settle under the MACD line (1.1997), and that is what today will be for. Also, the Marlin oscillator should consolidate in negative territory, and then the price can reach the target level of 1.1914 without a lot of effort   Relevance up to 03:00 2023-03-02 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336361
Forex: Euro against US dollar - forecast on April 24th, 2023

The EUR/USD Pair May Fall To The Specified Target

InstaForex Analysis InstaForex Analysis 01.03.2023 08:03
The bullish momentum the euro showed on Monday was not enough, yesterday, it did not even reach the target level of 1.0660, and it went back under 1.0595. Obviously, it can now take the target range of 1.0443/70 without too much movement. French and Spanish CPI indicators showed growth again, but investors' worries were not so much about the European Central Bank's monetary policy as about inflation as a sign of recession - Swiss and Canadian GDP for Q4 showed zero growth, while Canadian GDP for December was already down 0.1%. On the four-hour chart, the price has settled under the MACD indicator line, the Marlin oscillator is moving into the downtrend area. The situation is completely downward on both charts. I expect the pair to fall to the specified target   Relevance up to 03:00 2023-03-02 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336363
Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

Analysis Of Price Movement Of The Loonie Pair (USD/CAD)

InstaForex Analysis InstaForex Analysis 01.03.2023 08:07
If we look on the 4 hour chart The Loonie then there will be 2 important things: 1. The appearance of Bearish 123 pattern. 2. There is a hidden deviation between Price movement with Stochastic Oscillator indicator. Based on two things above then as long as USD/CAD back to break above the level 1,3658 on the nearest time has the potential to go down to test the level of 1,3533. If this level successfully broken then level 1,3440 will become the next main target to pursue and level 1,3356 will be the second target to test later. (Disclaimer)   Relevance up to 04:00 2023-03-02 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120403
Rates Spark: Crunch time

Analysis Of Price Movement Of The EUR/USD Pair

Torben Melsted Torben Melsted 01.03.2023 08:09
EUR/USD tried to break above resistance at 1.0628 but failed, indicating a final spike lower to test the ideal corrective target at 1.0498 to complete wave 4 and set the stage for the next impulsive rally higher towards 1.1197 and likely closer to 1.1350. That said, we are clear in the final stages of the corrective decline in wave 4 and we should expect wave 4 to bottom on this next decline toward 1.0498.   Relevance up to 06:00 2023-03-02 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314418
The US Dollar Index Prices Should Stay Below 105.00

The US Dollar Index Prices Should Stay Below 105.00

Oscar Ton Oscar Ton 01.03.2023 08:18
Technical outlook: The US dollar index slipped through 104.00 during the New York session on Tuesday before finding support. The index managed to pull back from the overnight lows and is seen to be trading close to 104.50 at this point in writing. Ideally, prices should stay below the 105.00 level as the bears prepare to drag the price lower towards 102.50 at least. The US dollar index is unfolding a larger-degree corrective wave structure, which began around 100.50 in early February. The projected targets are seen at around 106.50 in the near term, followed by 108.00. Within the proposed corrective rally, the index might have terminated its first wave close to 105.00 as seen on the 4H chart. If the above is correct, prices should stay below 105.00 and drag lower to 104.00 and 102.50 in the next few weeks. A drop below 104.00 will confirm the same and accelerate the move towards the 102.50-103.00 area. Also, note that 102.50 is the Fibonacci 0.618% of the recent rally between 100.50 and 105.00 levels, hence the probability for a bullish turn remains high. Trading idea: Potential short-term drop to 102.00, then resume higher Good luck!     Relevance up to 08:00 2023-03-29 UTC+2 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314426
The European Economy Has Demonstrated Amazing Resiliency Following The Supply Shock Of The Russian Invasion Of Ukraine

ECB Terminal Rate Pricing Briefly Touched 4%, Focus Today Is On Commodities

Saxo Bank Saxo Bank 01.03.2023 08:22
Summary:  Hot Spanish and French inflation data, along with a soft US consumer confidence report and month-end flows, made for a bumpy ride in equities and bonds to close the month of February. Dollar strength however prevailed at the close of the month despite a bump higher in EUR and GBP earlier in the day. A big miss in Australia’s Q4 GDP and January inflation saw AUDUSD plunge 30bps. Target beat earnings estimates but missed margins and lowered annual guidance. On watch today will be China PMIs, German inflation and US ISM manufacturing.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) slipped on falls in consumer confidence and Chicago PMI The major U.S. equity indices posted their second negative month in three - despite starting the year higher. Treasury yields are denting sentiment amid fears that higher Fed Reserve rates would remain in place for longer after inflation fears have been creeping back into the market - while stronger European inflation data strengthened the case for more hikes. On Tuesday, the S&P 500 dropped 0.3% and Nasdaq 100 slipped 0.1% following an unexpected decline in the Conference Board Consumer Confidence and a weaker Chicago PMI print. Most sectors within the S&P500 were down while materials, communication services, and financials inched up. Target (TGT:xnys) gained 1% after the discount store chain beat earnings estimates but missed margins and lowered annual guidance. With traders again reducing bets that the Fed will cut rates this year, the S&P 500 was down 2.6% last month. In contrast, European indices closed in gains for the month of February, with France’s CAC up 2.7%, Euro Stoxx 600 up 1.8% and German DAX up 1.6% despite a big surge in European yields as well. Yields on the short end of the US Treasury curve (TLT:Xmas, IEF:xnas, SHY:xnas) climbed on hotter-than-expected inflation prints in France and Spain Yields on U.S. Treasuries climbed in early trading following the sell-off in European government bonds in response to hot inflation prints in France and Italy. The long end of the Treasury curve recovered after the Chicago PMI, Richmond Fed Manufacturing Index, and Conference Board Consumer Confidence unexpectedly slipped. The 10-year notes pared most losses and finished Tuesday only 1bp cheaper at 3.92% while the yield on the 2-year was 4bps higher at 4.82%. The 2-10 year curve flattened to -89. Hong Kong’s Hang Seng Index (HSI.I) and China’s CSI300 (000300.I) ended a three-month streak of gains The Hang Seng Index and CSI300 index finished February with the first monthly loss since October 2022, ending a three-month streak of gains. In February, Hang Seng Index fell sharply by 9.4% while A-shares’ broad benchmark CSI300 outperformed, sliding moderately by 2.1%. The weakness in Hang Seng Index was driven by large declines in mega-cap e-Commerce platforms. Weighed on by the prospect of intensifying competition, JD.com (09618:xhkg) tumbled 25%, Meituan (03690:xhkg) down 22.4%, and Alibaba (09988:xhkg) down 19.6% over the month. Baidu (09888:xhkg) bucked the market trend and weakness among peers, climbing 1.8% on traction gained in AI-generated content solutions. In the near term, investors will be having a gauge into the strength of the economic recovery from the official NBS Manufacturing PMI, Non-manufacturing PMI, and Caixin China Manufacturing PMI scheduled to release today. After that, the focus will be on the State Council’s Government Work Report which includes, among other items, the growth target for 2023, delivered to the National People’s Congress on 5 March, and then the reshuffling of top leadership in the State Council and other key offices of the Chinese government during the National People’s Congress. Australian equities (ASXSP200.I) retreat back to January levels, with markets pricing in more Fed and RBA hikes Focus today is on commodities – with oil and copper moving higher, while the broad market is being pressured with markets adjusting to higher for longer CPI. We will be watching the reaction to China PMIs - which are expected to boost sentiment in commodities. Short term pressure continues for the Australia dollar after GDP and CPI slowed Australian GDP data showed fourth-quarter economic growth slowed down to pace of 2.7% YoY as expected- quashed by higher inflation and interest rates. Meanwhile, headline monthly CPI showed inflation is cooling – falling to a pace of 7.4% YoY vs the 8.1% price growth forecast. This theoretically pressures the Aussie dollar lower in the shorter term, while the US dollar is continuing to move up – with the dollar index up 4% from its lows - with the market pricing in more Fed rate hikes and potentially no Fed cuts this year – which is in line with our view. Our view is that the Aussie dollar could see strength return in Q2, and we maintain a longer-term bullish view on the Aussie dollar in line with our positive commodity outlook. In other news, Sydney property prices, the bellwether of the Australia market, rose for the first time in 13 months in February in - this is a positive sign for home values – but goes against the grain of what the RBA expected and supports the notion of the RBA keeping rates higher for longer. FX: AUD and JPY were the laggards last month as dollar regained ground The dollar closed firmer at the end of the month which spelled inflation concerns coming back and sent the short-end yields surging to record highs. AUDUSD was the weakest on the G10 board as a beating of the risk sentiment and weaker metal prices saw pair test 0.67 despite the return of RBA’s hawkish stance. Yen had a double blow from surging yields and Ueda’s dovish read, and USDJPY tested 137 last night before getting back below 136.50. EURUSD touched highs of 1.0650 after the French/Spanish inflation prints last night but is back below 1.0570 now. GBPUSD also got in close sights of 1.2150 but back closer to 1.2000 now. Commodities: Copper and oil nudge up - we think the commodity bull market run will be on pause till Q2   The oil prices rose 1.5% with traders reading between the lines at IEA commentary - which alluded to Chinese demand rising - while there is a bigger worry for the EU - should there be a complete halt to Russian flows - which would be a bullish scenario for oil and perhaps see prices move back up to last year's unsustainable highs. As for other commodities - Copper moved further above the key $4 mark after rising almost 2%. Aluminium rose 0.6%, while other metals were lower. At Saxo - our view is that the Commodity bull market will be on pause - before restarting strongly in Q2 with material demand expected to rise from China. Crude oil showing some early signs of life A rally in crude oil prices to the top of last week’s trading range is suggesting some early signs of a recovery towards the top of the trading range that has been established since late 2022. With the Fed rate hikes now well priced in by the markets, focus is moving back to sanctions on Russia that continue to threaten supplies. Meanwhile, sentiment on China demand recovery may be back with the Two Sessions likely to announce a strong policy commitment to growth rebound this year. This is offsetting global demand concerns emanating from API data showing a 10th straight weekly crude build. WTI prices touched $78 overnight and Brent was at $84.   What to consider? US consumer confidence in a surprise drop, labor market strength intact The Conference Board's US consumer confidence index saw a surprise fall to 102.9 in February (vs. exp 108.5) from January’s 106 which was also revised lower from 107.1. The present situation index looked resilient at 152.8 from 151.1 and reaching its highest levels since April 2022, but the forward expectations index declined to 69.7 from 76.0 previously. While the headline figures may be a small input for the Fed, the labor-supply mismatch has become more evident from the consumer confidence report. The report showed that the labor differential improved to 41.5 in February from 37 in the prior month, rising for a third consecutive month and reaching its highest levels since April 2022. The differential represents the percentage of respondents who say jobs “are plentiful” less those who say jobs “are hard to get”. Its rise could be an early indication of labor market strength heading into next week’s payrolls and JOLTs reports. Focus turns to ISM manufacturing survey today which is expected to accelerate but still remain in contraction. ECB rate hike bets pick up after higher French and Spanish inflation Consumer prices in France jumped by a record 7.2% YoY in February as food and services costs increased, while Spain saw a stronger-than-expected 6.1% YoY advance. The strong inflation now results mostly from companies passing through to consumers higher prices in the service sector and higher food prices. Looking at the French data, food prices (price increase of+14.5% YoY) contribute twice more to inflation than energy prices. The increase of prices in the service sector (which represents about 50% of the CPI basket) is another source of worry. Expect it to get worse in the short-term. We also see a similar trend in most European countries (the situation is even uglier in the CEE region), with the first print of German February inflation due today and the Eurozone print due tomorrow. Euro bonds slid with German yields up 7bps and Spanish yields up 6bps as ECB terminal rate pricing briefly touched 4%. China PMIs are expected to show further recovery in the economy Scheduled to release on Wednesday, the official NBS Manufacturing PMI, according to survey from Bloomberg, is expected to bounce further into expansion at 50.6 in February from 50.1 in January and the Non-manufacturing PMI is forecasted to climb to 54.9 from 54.4. Despite the sluggishness in exports, Caixin China PMI is expected to return to the expansionary territory at 50.7 in February, from 49.2 in January. The Emerging Industries PMI jumped to 62.5 in February from 50.9 in January adding to the favourable forecasts for the NBS and Caixin PMIs. Target’s earnings beat with stronger-than-expected sales growth but margins missed and annual guidance weaker-than-expected Target (TGT:xnys) reported FYQ4 (ending Jan 31, 2023) EPS of USD1.89, nearly 28% above the consensus estimate of USD1.48. The earnings beat was driven by a stronger-than-expected 0.7% Y/Y growth in same-store sales and a 1.3% Y/Y growth in total sales, while both were expected to fall. Notable strength was found in food and beverage, beauty, and household essentials. Discretionary categories remained soft. Weakness, however, showed up in the gross margins which declined to 22.7% in Q4 from 25.7% in the prior-year quarter. EBIT margins fell to 3.7% from 6.8% a year ago. For the current fiscal year’s annual guidance, the management is expecting between a low-single-digit decline and a low-single-digit increase in same-store sales and a below-consensus operating income of about USD 4.9 billion. Brewers results on watch amid the reopening trade   Budweiser Brewing Co (1876 HK), the Asia distributor - is due to release results today. Q4 revenue is expected to get a little boost from the FIFA World Cup trading - but is still expected to dive. Its outlook could be tainted as higher beer taxes are ahead for South Korea - while Budweiser’s APAC brands are on notice with proposed liqueur taxes there looming – which could slow business growth. The world’s largest brewer Anheuser-Busch InBev SA/NV (BUD) reports on Thursday, and could see higher volatility - for more click here. EV makers on watch: Tesla bolsters efforts to boost production, Rivian gives lacklustre outlook Tesla is continuing to march ahead with its lofty EV production goals - and now looks set to build a plant in northern Mexico. The news precedes Wednesday's reveal of Elon Musk's next phase "master plan," which will test the resurgent enthusiasm for the EV maker. Further details of the Mexico plan are expected to also be released this week. Meanwhile, Tesla’s competitor, Rivian forecasts 50,000 EVs will be produced this year – which was weaker than the market expected. Its fourth quarter revenue also missed expectations making $663 million – vs the $717 million consensus expected.     For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Markets Today: Crude oil and copper recover – 1 March 2023 | Saxo Group (home.saxo)
SNB stands firm in the face of market turbulence with 50bp rate hike

The Market’s Fears Of Higher Inflation And Interest Rates Keep The USD/CHF Buyers Hopeful

TeleTrade Comments TeleTrade Comments 01.03.2023 08:34
USD/CHF takes offers to renew intraday high even as risk-aversion prevails. US Dollar struggles to track upbeat yields amid strong China data, softer statistics at home. Downbeat  Swiss GDP, hawkish Fed bets favored buyers the previous day. USD/CHF renews its intraday low around 0.9410 as bulls take a breather following the strong February performance during early Wednesday. In doing so, the Swiss currency pair fails to justify the market’s mildly offbeat tone amid fears of higher rates and inflation. The reason could be linked to China as recent activity data from the world’s largest industrial player came in impressive for February. That said, China’s Caixin Manufacturing PMI traces official activity data per NBS Manufacturing and Non-Manufacturing PMI to mark a strong economic rebound in February. Even so, China Finance Minister Liu He said after the data release that the foundation of China's economic recovery is still not stable. It should be noted that the month-start consolidation and the recently softer US data also seem to favor the USD/CHF bears. On Tuesday, the US Conference Board’s (CB) Consumer Confidence dropped for the second consecutive month to 102.9 versus 106.0 prior (revised) while US Housing Price Index drops 0.1% in December versus -0.6% market forecasts and -0.1% prior. On the same line, the S&P/Case-Shiller Home Price Indices grew 4.6% YoY during the said month compared to 6.1% market expectations and 6.8% previous readings. Furthermore, Chicago Purchasing Managers’ Index for February eased to 43.6 from 44.3 previous readings and 45.0 market consensus whereas the Richmond Fed Manufacturing Index for the said month eased below 11.0 prior and -5.0 expected to -16. Even so, the market’s fears of higher inflation and interest rates keep the USD/CHF buyers hopeful. While portraying the mood, the S&P 500 Futures track Wall Street’s mild losses around 3,960. Further, the US 10-year Treasury bond yields rose two basis points (bps) to 3.93% while the two-year counterpart rises four bps to 4.84% by the press time. With this, both the key bond coupons march towards the three-month high marked in February after printing the biggest monthly gain since September 2022. Read next: Elon Musk Is Richest Man Again, The State Bank Of India Had Raised $1 Billion From Global Banks| FXMAG.COM Apart from the risk-off mood, downbeat data at home also could keep the USD/CHF buyers hopeful. Swiss Gross Domestic Product (GDP) arrived at 0% in the fourth quarter (Q4) of 2022 vs. a growth of 0.3% and 0.2% recorded in the third quarter. Moving forward, Swiss Real Retail Sales for January can direct immediate USD/CHF moves ahead of US activity data for the said month. However, major attention will be given to the next week’s monthly jobs report, Federal Reserve (Fed) Chairman Jerome Powell’s testimony and the Federal Open Market Committee (FOMC) monetary policy meeting for clear directions. Technical analysis USD/CHF pullback remains elusive unless the quote drops back below the 100-day Exponential Moving Average (EMA) level surrounding 0.9385.
Analysis Of The USD/IDR Pair By Economists At ING

The Indonesian Inflation Data And Strong China PMI Should Have Weighed On The USD/IDR Prices

TeleTrade Comments TeleTrade Comments 01.03.2023 08:40
USD/IDR remains mildly bid for the second consecutive day despite upbeat Indonesia Inflation. Indonesia Inflation and Core Inflation both grew more than expected in February. Upbeat yields challenge US Dollar’s retreat after the biggest monthly gains since September 2022. US PMIs, risk catalysts eyed for immediate directions, Fed talks will be the key. USD/IDR struggles to justify strong Indonesia Inflation early Wednesday as it picks up bid to $15,560 during the two-day uptrend at the latest. The reason could be linked to the mixed sentiment in the markets as traders brace for the key March month. Indonesia's Inflation grew 5.47% YoY versus 5.44% expected and 5.28% prior but the MoM figures eased to 0.16% from 0.34% previous readings while crossing 0.11% market consensus. Further, Core Inflation dropped to 3.09% during the stated month versus 3.26% estimations and 3.27% prior. Apart from the Indonesian inflation data, strong China PMI also should have favored the market sentiment and weighed on the USD/IDR prices. However, anxiety ahead of the key data/events, as well as firmer US Treasury bond yields seems to propel the USD/IDR prices. That said, China’s Caixin Manufacturing PMI traces official activity data per NBS Manufacturing and Non-Manufacturing PMI to mark a strong economic rebound in February. Even so, China Finance Minister Liu He said after the data release that the foundation of China's economic recovery is still not stable. Read next: Elon Musk Is Richest Man Again, The State Bank Of India Had Raised $1 Billion From Global Banks| FXMAG.COM Amid these plays, the S&P 500 Futures trace Wall Street’s mild losses around 3,960. Further, the US 10-year Treasury bond yields rose two basis points (bps) to 3.93% while the two-year counterpart rises four bps to 4.84% by the press time. With this, both the key bond coupons march towards the three-month high marked in February after printing the biggest monthly gain since September 2022. Looking ahead, US S&P Global and ISM PMIs for February could direct immediate moves but major attention will be given to the next week’s monthly jobs report, Federal Reserve (Fed) Chairman Jerome Powell’s testimony and the Federal Open Market Committee (FOMC) monetary policy meeting for clear directions. Technical analysis Despite the latest run-up, the USD/IDR bulls need validation from the 50-DMA, as well as an upward-sloping resistance line from the mid-January, respectively near $15,265 and $15,300, to push back the bearish bias.
The Indian Rupee Pair Takes Clues From The Receding Fears Of Hawkish Fed Rate Moves

The USD/INR Pair Is Prone To The Downside As The Risk-Of Impulse Has Faded

TeleTrade Comments TeleTrade Comments 01.03.2023 08:46
USD/INR has turned volatile as investors are discounting India’s weak GDP numbers. India’s Q3 GDP has slipped lower to 4.4% from 6.3% and 13.5% figures recorded in Q2 and Q1 respectively. Upbeat Caixin Manufacturing PMI has improved investors’ risk appetite. The USD/INR pair has shown a recovery move after dropping firmly to near 82.35 in the Asian session. The asset is displaying volatility as investors are discounting overnight sell-off in the US Dollar Index (DXY). The major is prone to the downside as the risk-off impulse has faded after the release of the upbeat Caixin Manufacturing PMI data. The US Dollar Index (DXY) has sensed support after printing a day low at 104.47. The corrective move in the USD Index is the outcome of disappearing fears of more rates announcement from the Federal Reserve (Fed). Meanwhile, the alpha generated on the US government bonds looks still solid. At the press time, the 10-year US Treasury yields are hovering around 3.94%. S&P500 futures are on the verge of shrugging their entire losses reported in the Asian session, portraying a meaningful rebound in the risk appetite of the market participants. A power-pack performance is expected from the USD Index amid the release of the United States ISM Manufacturing PMI data. According to the preliminary estimates, the economic data is seen at 48.0 from the former release of 47.4. Apart from that, the New Orders Index that conveys forward demand is expected to rebound to 43.7 from the prior figure of 42.5. The Indian Rupee remained in action on Tuesday over the release of the Gross Domestic Product (GDP) Q3 data. Restrictive monetary policy by the Reserve Bank of India (RBI) in wake of achieving price stability has resulted in a slowdown in economic activities. The Q3 GDP has dropped to 4.4% in which crude oil output has dropped firmly by 1.1% on an annual basis. In the Q2 and Q1, GDP was measured at 6.3% and 13.5% respectively.  
Australian dollar against US dollar decreased amid weak China CPI data

The Outlook For The AUD/USD Pair Looks Gloomy

TeleTrade Comments TeleTrade Comments 01.03.2023 08:53
AUD/USD is struggling to extend recovery above 0.6760, upside looks favored amid the risk-on impulse. Federal Reserve might turn more hawkish if US ISM Manufacturing PMI delivers a surprise jump. A sense of relief has been observed by the Reserve Bank of Australia as inflation has softened significantly. AUD/USD looks failing to turn bullish despite a responsive buying move amid an Inverted Flag formation. AUD/USD has stretched its V-shape recovery move above to near the 0.6760 resistance in the early European session. The Aussie asset witnessed a sell-off in the Asian session after the release of the downbeat Australian Gross Domestic Product (GDP) and a sheer decline in the monthly Consumer Price Index (CPI). The downside bias in the Australian Dollar faded after the release of the upbeat Caixin Manufacturing PMI data, which infused fresh blood into the Aussie and resulted in a V-shape recovery. S&P500 futures have turned positive after recovering significant losses posted in the Tokyo session, portraying a sheer recovery in the risk appetite theme. The US Dollar Index (DXY) has refreshed its day low below 104.47 as investors have ignored the uncertainty associated with hawkish Federal Reserve (Fed) bets. Also, the safe-haven assets are struggling to find a cushion as investors have underpinned the risk-on mood. Contrary to the positive market sentiment, the return offered on the 10-year US Treasury bonds looks still solid around 3.94%. RBA senses relief as Australian Inflation softens and GDP trims Investors dumped the Australian Dollar in the Asian session after the Australian Bureau of Statistics reported significantly lower monthly Consumer Price Index (CPI) figures than anticipation. The monthly Consumer Price Index (CPI) (Jan) dropped significantly to 7.4% from the expectations of 8.0% and the prior release of 8.4%. A mammoth decline in the inflation data is going to provide a big relief to Reserve Bank of Australia (RBA) policymakers. The Reserve Bank of Australia has been making efforts in bringing down inflationary pressures by the continuation of policy tightening. Reserve Bank of Australia Governor Philip Lowe has already pushed its Official Cash Rate (OCR) to 3.35% in order to tame the stubborn inflation. And, more rates must be in pipeline to achieve price stability sooner. Apart from the monthly CPI, Australian Gross Domestic Product (GDP) (Q4) has dropped to 0.5% from the consensus of 0.8% and Q3 figure of 0.6%. On an annualized basis, the GDP has remained in line with expectations at 2.7%. A decline in GDP numbers also showcases lower demand from households, which will trim inflation projections ahead as producers will be forced to scale down the prices of their offerings. Upbeat Caixin Manufacturing PMI strengthens the Australian Dollar It was widely anticipated that China’s manufacturing sector will outperform after the rollback of strict lockdown measures. Chinese administration and the People’s Bank of China (PBoC) are dedicated to spurring economic recovery by improving domestic demand. The IHS Markit reported the Caixin Manufacturing PMI data at 51.6, higher than the expectations of 50.2 and the former release of 49.2. Apart from that, China’s National Bureau of Statistics (NBS) Manufacturing PMI (Feb) landed higher at 52.6 vs. the consensus of 50.5 and the prior release of 50.1. The Services Manufacturing PMI exploded to 56.3 against 54.4 released in January while the street was anticipating a downbeat figure at 49.7. It is worth noting that Australia is the leading trading partner of China and a sharp recovery in the Chinese economy is also supportive of the Australian Dollar. ISM Manufacturing PMI- the next trigger for the US Dollar The street is awaiting the release of the United States Institute of Supply Management (ISM) Manufacturing PMI data. As per the consensus, the economic data is seen at 48.0 from the former release of 47.4. Apart from that, the New Orders Index that conveys forward demand is expected to rebound to 43.7 from the prior figure of 42.5. It is worth noting that the Manufacturing PMI is in a contraction phase consecutively for the past three months. A figure below 50.0 is considered as a contraction in the extent of activities. Federal Reserve policymakers are expected to keenly watch the PMI figures as a surprise upside could strengthen the expectations of more hikes ahead. AUD/USD technical outlook Despite a responsive buying action near the round-level support of 0.6700, the outlook for AUD/USD looks gloomy as the asset is forming an Inverted Flag chart pattern. The chart pattern indicates a sheer consolidation that is followed by a breakdown. Usually, the consolidation phase of the chart pattern serves as an inventory adjustment in which those participants initiate shorts, which prefer to enter an auction after the establishment of a bearish bias. The 100-period Exponential Moving Average (EMA) around 0.6760 is acting as a barricade for the Aussie bulls. Also, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range, indicating a consolidation ahead
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The USD/CAD Pair Is Likely To Register Further Downside

TeleTrade Comments TeleTrade Comments 01.03.2023 08:58
USD/CAD takes offers to renew intraday low, reverses from “double top”. 100-HMA, two-week-old ascending trend line restrict immediate downside. RSI’s pullback from overbought territory, bearish MACD signals favor sellers. 200-HMA, 1.3530 act as crucial supports for Loonie pair bears to watch. USD/CAD welcomes March with a bearish bias as it renews its intraday low near 1.3620 during early Wednesday morning in Europe. That said, the Loonie pair marked the biggest daily gain in a week the previous day, as well as posted the heaviest monthly jump since September 2022 by the end of February. The quote’s latest pullback could be linked to its inability to cross the late February swing high of 1.3665. In doing so, the pair portrays the double top around 1.3660-65 region. The chart formation also takes clues from the bearish MACD signals to lure sellers. On the same line could be the RSI (14) pullback from the overbought territory. Hence, the USD/CAD pair is likely to register further downside. However, a convergence of the 100-Hour Moving Average (HMA) and an upward-sloping support line from mid-February, near 1.3580, appears a tough nut to crack for the bears. Also adding to the downside filter are the 200-HMA and the weekly low, respectively near 1.3540 and 1.3530. In a case where the USD/CAD drops below 1.3530 support, the pair confirms the bearish “double top” chart formation, which in turn suggests the theoretical fall towards 1.3400. Alternatively, a sustained break of the 1.3660-65 hurdle could aim for January’s peak of 1.3685 and the last December’s high near 1.3700 before allowing the USD/CAD bulls a free zone to rule. USD/CAD: Hourly chart Trend: Limited downside expected  
The USD/JPY Price Reversed From The Lower Limit

Dovish Comments From The Incoming Bank Of Japan (Boj) Governor Kazuo Ueda Along With Signs Of Stability In The Equity Markets Weigh On JPY

TeleTrade Comments TeleTrade Comments 01.03.2023 09:08
USD/JPY struggles to capitalize on a modest uptick on Wednesday and remains below the YTD top. The BoJ’s dovish outlook, weaker Japanese PMI undermine the JPY and continue to lend support. Hawkish Fed expectations, elevated US bond yields act as a tailwind for the USD and favour bulls. The USD/JPY pair edges higher following the previous day's two-way price swings and trades with a mild positive bias through the early European session. The pair is currently placed below mid-136.00s and remains well within the striking distance of its highest level since December 20 touched on Tuesday. A combination of factors undermines the Japanese Yen (JPY), which, in turn, acts as a tailwind for the USD/JPY pair amid the underlying bullish sentiment surrounding the US Dollar. Data released earlier this Wednesday showed that Japan's manufacturing sector remained in contraction territory in February. This comes on the back of dovish comments from the incoming Bank of Japan (BoJ) Governor Kazuo Ueda and Deputy Governor nominee Shinichi Uchida, stressing the need to maintain the ultra-loose monetary policy. This, along with signs of stability in the equity markets weigh on the safe-haven JPY. The USD, on the other hand, remains pinned near a multi-week high amid firming expectations for further policy tightening by the Fed and lends additional support to the USD/JPY pair. In fact, the markets now seem convinced that the US central bank will have to raise interest rates for longer to tame stubbornly high inflation. This remains supportive of elevated US Treasury bond yields and continues to act as a tailwind for the Greenback. That said, indications that the Fed's rate hikes were beginning to have their intended effect of cooling the economy seem to cap any meaningful gains for the buck. Investors remain worried about economic headwinds stemming from rapidly rising borrowing costs. The fears were fueled by Tuesday's disappointing release of the Conference Board's US Consumer Confidence Index, which fell to 102.9 in February from 106 in the previous month. Furthermore, the Chicago PMI business survey for February also came in weaker-than-expected and dropped to 43.6 in February, marking the sixth straight month in contraction territory. The Richmond Fed also released its survey of manufacturing activity for February and reported a decline to -16 from -11 in January 2023. The aforementioned mixed fundamental backdrop is holding back traders from placing aggressive bets and keeping a lid on any meaningful gains for the USD/JPY pair, at least for the time being. Market participants now look to the US economic docket, featuring the release of ISM Manufacturing PMI later during the early North American session. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus to the USD/JPY pair. Apart from this, traders will take cues from the broader risk sentiment to grab short-term opportunities around the major.
Economic Data From China Positively Affected Copper, Aluminum, Zinc And Iron Ore

Economic Data From China Positively Affected Copper, Aluminum, Zinc And Iron Ore

Saxo Bank Saxo Bank 01.03.2023 09:22
Summary:  US equities posted an uninspiring session, as the price action is bottled up ahead of the key support of the 200-day moving average in the major indices. Overnight, China’s official Manufacturing PMI ripped higher in February with its strongest reading since 2012, strong suggesting that the China re-opening is swing into motion. Hot inflation data from France and Spain pulled ECB expectations sharply higher yesterday, with German Feb. CPI up today. What is our trading focus? US equities (US500.I and USNAS100.I): caught between growth and inflation US equities headed lower yesterday with S&P 500 futures closing at the 3,975 level. The index futures are trying to rebound this morning following stronger than expected China February PMI figures suggesting the economy is responding positively to the reopening. This growth impulse lifted Hang Seng futures by 4.2% and breathed fresh air into commodities. The growth impulse from China will keep inflation pressures high in the global economy and that could force long-term bond yields in the US and Europe higher from current levels which will make equities caught between responding positive to growth or negatively to inflation and potentially higher interest rates. Hang Seng Index (HSI.I) and CSI300 (000300.I) jumped on strong China PMIs Hang Seng Index surged 3.5% and CSI300 gained 1.7% by in the morning session following the release of strong PMI data much above consensus estimates. The headline official NBS Manufacturing PMI surged (more below). The NBS non-manufacturing PMI and the Caixin Manufacturing PMI, also released today, both bounced strongly and signaled economic expansion. Mega-cap China internet names surged 5-7% and EV stocks jumped 5-8%. In A-shares, telcos, digital economy, software, gaming, and media stocks led the charge higher. FX: AUD and JPY were the laggards last month as dollar regained ground The dollar closed firmer at the end of the month as inflation concerns returned and sent the short-end yields surging to 15-year highs. AUDUSD was the weakest on the G10 board as a beating of the risk sentiment and weaker metal prices saw pair test 0.67 despite the return of RBA’s hawkish stance. Yen had a double blow from surging yields and the dovish read of Ueda’s nomination hearing for the Bank of Japan governorship, and USDJPY tested close to 137 yesterday before reversing back below 136.50. EURUSD touched highs of 1.0650 after the French/Spanish inflation prints yesterday but is back below 1.0600 this morning. GBPUSD nearly hit 1.2150 yesterday after the N. Ireland border announcement, but is back closer to 1.2050 this morning. Crude oil recovers as strong China PMI re-ignites demand focus Brent crude trades near $84 and WTI at $77.50 as both futures markets continue to recover from the latest the macroeconomic related selloff. With a hawkish Fed having been priced in, the dollar has started to weaken allowing traders to return their focus to an ongoing recovery in China. The strength of which was confirmed overnight when China’s PMI data showed across the board strength. The official headline surged to 52.6 and highest since 2012 while production and new orders improving markedly and new export orders move well above 50 and into expansion territory for the first time in 23 months. Increased tightness is being signaled through steepening prompt spreads with Brent trading at 59 cents a barrel from a recent 34 cent low. Also supporting are reports that Russia is struggling to find new buyers with million of barrels currently stored at sea. Ahead of EIA’s weekly stock report, the API said US inventories rose 6.2m barrels last week. Short-term momentum indicators point to higher prices with Brent once looking to challenge the downtrend from last March around $84.50. Silver led gold higher, but more work needed to shift sentiment Precious metals trade higher for a third day after the market concluded the latest round of hawkish comments from US FOMC members and additional rate hikes were now being fully priced in. Continued strength in US yields, near recent highs, have been offset by weaker dollar, allowing buyers once again to gain the upper hand. Silver, down around 12% in January, led the recovery which gathered speed overnight following the release of stronger than expected economic data in China (see below). The gold-silver ratio which yesterday hit a four-month high at 88.4 (ounces of silver to one ounce of gold) has since retraced to around 86.80. Gold as a minimum needs to break $1864, and silver $22 to signal an end to the current corrections Industrial metals jump on strong China rebound Copper and not least aluminum, zinc and iron ore traded higher following a batch of economic data from China showed improved factory activity as well as rising home sales, both driving expectations for an accelerated demand recovery, thereby once again replacing concerns about the economic impact of additional US rate hikes. Having found support below $4, the HG copper futures contract trades back above its 21DMA, a sign momentum is turning positive again. Since mid January the price has traded within a 30 cents downward trending channel, and for that to change, the price needs to break above $4.20, some 2% above the current level. Focus now turns to on China’s “Two Sessions” starting at the weekend. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) steady near recent highs US Treasury yields staid pinned near recent cycle highs, with the 2-year trading above 4.8% this morning again and the 10-year benchmark hovering just below 4.00%. Yields were dragged higher yesterday by a fresh surge in European short yields on the French and Spanish CPI data for February (see below) and stayed elevated in the US despite the weak February Consumer Confidence print. The next test for the US treasury market is perhaps the February ISM Services survey on Friday. What is going on? China's economy shows strong recovery as PMI’s beat expectations The official NBS China Manufactuing PMI surged to 52.6 in February, the highest level since 2012, from 50.1 in January. The strength was across the board with the Production sub-index and New Orders sub-index improving markedly to 56.7 and 54.1 respectively. When a diffusion index goes above 50, it signals expansion. The export sector, which has until now been sluggish, showed signs of a strong recovery. The New Export Orders sub-index in the NBS survey unexpectedly surged to 54.1 in February from 46.1 in January and was the first time returning to the expansion territory in 23 months. The Caixin Manufacturing PMI, which covers smaller and more private enterprises in the export-oriented coastal regions of China relative to those covered in the NBS survey, also recovered strongly to 51.6 in February from 49.2 in January and the new order sub-index in the Caixin survey bounced to 52.2 from 49.3. The NBS non-manufacturing PMI continued to accelerate well into expansion, rising to 56.3 from 54.4. Both major sub-indices rose further, with the Services sub-index advancing to 55.6 and the Construction sub-index soaring to 60.2. US consumer confidence in a surprise drop, labor market strength intact The Conference Board's US consumer confidence index saw a surprise fall to 102.9 in February (vs. exp 108.5) from January’s 106 which was also revised lower from 107.1. The present situation index looked resilient at 152.8 from 151.1 and reaching its highest levels since April 2022, but the forward expectations index declined to 69.7 from 76.0 previously. While the headline figures may be a small input for the Fed, the labor-supply mismatch has become more evident from the consumer confidence report. The report showed that the labor differential improved to 41.5 in February from 37 in the prior month, rising for a third consecutive month and reaching its highest levels since April 2022. The differential represents the percentage of respondents who say jobs “are plentiful” less those who say jobs “are hard to get”. Its rise could be an early indication of labor market strength heading into next week’s February Payrolls data. Focus turns to ISM manufacturing survey today which is expected to improve but still remain in contraction. ECB rate hike bets pick up after higher French and Spanish inflation Consumer prices in France jumped by a record 7.2% YoY in February as food and services costs increased, while Spain saw a stronger-than-expected 6.1% YoY advance. The strong inflation now results mostly from companies passing through to consumers higher prices in the service sector and higher food prices. Looking at the French data, food prices (price increase of+14.5% YoY) contribute twice more to inflation than energy prices. The increase of prices in the service sector (which represents about 50% of the CPI basket) is another source of worry. Expect it to get worse in the short-term. We also see a similar trend in most European countries (the situation is even uglier in the CEE region), with the first print of German February inflation due today and the Eurozone print due tomorrow. Euro bonds slid with German yields up 7bps and Spanish yields up 6bps as ECB terminal rate pricing briefly touched 4%. AUD swings to a gain after China’s economy shows signs of a stronger rebound After China's manufacturing activity hit a decade high as noted above, the Australian dollar against the US dollar (AUDUSD) rose sharply. Iron ore, copper and aluminium prices all gained. This supported the AUDUSD pair rebounding from 10-week lows, which it hit earlier after Australian GDP slowed to pace of 2.7% YoY in Q4 as expected while headline monthly CPI cooled to 7.4% YoY, vs the 8.1% growth forecast. Short covering also added to the Aussie dollar whipsawing higher. What are we watching next? Tesla Investor Day Tesla’s annual ‘Investor Day’ is scheduled for tonight at 21:00 GMT and will be livestreamed on Tesla’s website. Elon Musk has teased in tweets that the Investor Day presentation will revolve around the part 3 in his ‘Master Plan’ which was first announced back in 2006 and Elon Musk has specially written that the ‘Master Plan 3’ is about ‘the path to a fully sustainable energy future for Earth...’ suggesting it might be around energy. One the key variables in the path to electrifying society is about energy production, energy storage, and the electric grid, and as such it might be that Tesla will aim solve these issues so Tesla’s growth is not constrained too early by the lack of investments and solutions on the infrastructure side of the equation. Germany’s Feb. CPI data today, Eurozone Feb. CPI tomorrow After French and Spanish February CPI readings sparked higher expectations for the ECB as noted above, we will get a look at German regional CPI releases this morning for February and the nationwide data this afternoon at 1300 GMT, with the German 2-year yield having leaped to nearly 3.20% yesterday after starting the weak below 2.9%. Expectations are for a reading of +0.5% MoM and +8.5% YoY vs. +8.75 in January, with the “EU Harmonized” reading seen slowing to +9.0% YoY vs. 9.2% in Jan. Earnings to watch Today’s key US earnings releases to watch are Salesforce (reporting after the close), Snowflake (reporting after the close), and NIO (reporting before the open). Analysts expect Salesforce to report 9% y/y revenue growth for the quarter that ended in January and EBITDA of $2.67bn up from $1.02bn a year ago as the software application maker is under pressure from several activist investors to improve profitability. Analysts expect Snowflake to report revenue growth of 50% y/y in the quarter that ended in January and EBITDA of $25mn up from $-146mn a year ago. NIO, that finally ramped up its EV production in Q4 after several quarters of slow increases, is expected to report 73% y/y revenue growth but still delivering an operating loss of CNY -3.4bn. Wednesday: Royal Bank of Canada, Beiersdorf, Reckitt Benckiser, Kuehne + Nagel, Salesforce, Lowe’s, Snowflake, NIO Thursday: Anheuser-Busch InBev, Argenx, Yunnan Energy New Material, Toronto-Dominion Bank, Fortum, Veolia Environment, Merck, Hapag-Lloyd, CRH, London Stock Exchange, Haleon, Flutter Entertainment, Universal Music Group, Broadcom, Costco, VMware, Marvell Technology, Dell Technologies Economic calendar highlights for today (times GMT) 0815-0900 – Eurozone Final Feb. Manufacturing PMI 0855 – Germany Feb. Unemployment Change / Claims 0930 – UK Jan. Mortgage Approvals 1000 – UK Bank of England Governor Andrew Bailey to speak 1300 – Germany Feb. CPI 1500 – US Feb. ISM Manufacturing 1530 – EIA's Weekly Crude and Fuel Stock Report 1830 – Mexico Central Bank Inflation Report 0030 – Australia Jan. Building Approvals   Source:Financial Markets Today: Quick Take – March 1, 2023 | Saxo Group (home.saxo)
FX Daily: Upbeat China PMIs lift the mood

FX Daily: Upbeat China PMIs lift the mood

ING Economics ING Economics 01.03.2023 09:50
Financial markets are caught between the two narratives of a softer landing (helped by China's reopening) and sticky inflation keeping policy rates higher for longer. That will probably keep bond markets on the back foot and FX markets volatile in ranges. Today's highlights will be PMI releases around the world and presumably high German inflation USD: Foreign Direct Investment trends of interest The dollar has softened marginally in Europe and emerging market currencies are generally bid after China released an encouraging set of February PMIs. There were strong rebounds for both the manufacturing and service sectors which are feeding the narrative that a 2023 China recovery is the real deal. The PMIs come ahead of this weekend's 'Two Sessions' political gathering where we expect a growth target of 5.5-6.0% to be outlined. So far, so good and the China PMI data trumped some local news where AUD/USD has ended up higher on the session despite some softer-than-expected GDP and CPI data. Catching our eye this morning has been a survey by the US Chamber of Commerce (AmCham) that only 45% of American companies see China as their top three investment destination, compared to 60% a year ago. Clearly, geopolitics is driving this. Of the 24% of companies which said they might relocate out of China, one-third said they would relocate to the US. This topic of re-shoring/friendshoring will be an important multi-year factor driving Foreign Direct Investment (FDI) trends and could provide some resistance to those looking for the secular decline of the dollar. On that subject, we also note that Tesla will be building its next plant in Mexico. That only adds to the attraction of the Mexican peso, which remains our high yield/EM currency of choice. Back to today. The US releases ISM manufacturing data which should remain soft at 48. More interest will be had in Friday's services ISM. We suspect the China PMI story might dominate FX trading today and maintain a slightly offered tone for the dollar. Yet DXY will probably trade well within Monday's range of 104.55-105.35. Chris Turner EUR: Inflation, inflation, inflation EUR/USD got a lift yesterday from data showing Spanish February core inflation pushing to a new cycle high. The fact that Spanish core inflation includes food may not mean such a large read-through to tomorrow's eurozone core CPI data which is expected at 5.3% year-on-year. Yet our team thinks that this figure could now push up to a new cycle high of 5.4/5.5%. The worrying trend in prices continues to feed into European Central Bank expectations where the market looks to be pricing an extended tightening cycle into 2024, with the deposit rate (now 2.50%) possibly being raised as high as 4.00%. Feeding into that story today will be German CPI, which is released around 14CET. The continued re-pricing of the ECB curve is providing EUR/USD with some support against higher US rates and suggesting 1.05 will be the bottom of the EUR/USD's first quarter range after all. Certainly, the disinflation story is taking a back seat this month.  Today, we have a few ECB speakers and we should expect a relatively quiet 1.0565-1.0645 range for EUR/USD. The more aggressive ECB pricing is also providing some support to EUR/CHF, which looks like it might end March near our 1.00 target. Chris Turner GBP: More focus on the Northern Ireland deal Yesterday, we wrote a piece on what the new Northern Ireland deal - or 'Windsor Framework' - meant for sterling. While welcome news, we doubted that it would prove a game changer for sterling. Some other FX strategists felt that the news could be a lot more positive for sterling - even triggering a 2/3% rally in the pound were the DUP to come on board, support the deal and return to government in Northern Ireland.  We think the small rally in the pound that was seen (and has since partially reversed) is probably sufficient in that it reflects a warmer political relationship between the UK and the EU. We doubt any approval by the DUP makes much difference to the pound. As we discussed in the article, weak UK growth and an increasingly hawkish ECB will probably keep EUR/GBP supported for most of the year.  We do note, however, that some of last year's policy uncertainty is still being taken out of sterling via the FX options market. For example, the one-year EUR/GBP risk reversal - the price for a EUR call option over an equivalent EUR put option - has fallen to 0.95% from 2.5% last September. And one-year EUR/GBP traded volatility has fallen to 7% from 11%. But those moves may well have come far enough for the time being. Our baseline sees EUR/GBP staying supported under 0.88. Look out for a speech by Bank of England Governor Andrew Bailey at 11CET today. Money markets price the Bank Rate at 4.75% into September. Our team thinks that BoE rates will not need to be hiked that far, yet with inflation staying high for the time being, Governor Bailey may find it too early to disabuse the markets of that pricing. GBP/USD could drift back to 1.2100 on the slightly softer dollar today. Chris Turner CEE: Gas prices support the region again The National Bank of Hungary (NBH) left rates unchanged yesterday. Even though at face value it looks like nothing has changed, our impression is that the central bank still means business when it comes to fighting inflation and was able to sound a bit more hawkish. The central bank will not be distracted by promises and outliers. The NBH wants to see a permanent improvement in every aspect and will not rush policy easing. However, looking at the market reaction, it is clear that the market already understood the NBH's message in January and the February meeting did not bring much fresh news. As we mentioned in our NBH preview, we expect the forint to take a break in March and the central bank meeting is the last chance for gains below 380 EUR/HUF for now. We remain positive on the forint, but the current drivers have run out of steam. Plus we could see some negative news in the EU story in the coming days and a downgrade in the outlook from Moody's this Friday.  Today, we will see the PMIs across the region for February. We expect a slight improvement in sentiment in Poland and the Czech Republic and a deterioration in Hungary. In Hungary, the PPI for January will be published. The Czech Republic's state budget numbers for February will also be revealed, which could shed more light on the financing and issuance of CZGBs.  In the FX market, we have seen new gains for CEE again in recent days. The Czech koruna, in particular, has attracted attention, breaking below 23.50 EUR/CZK for the first time since 2008. The main reason, in our view, is the renewed decline in gas prices and the testing of new lows. However, the rest of the market does not indicate favourable conditions for the koruna and the region. With core rates rising further, interest rate differentials have compressed across the board and the US dollar is once again on the stronger side. Thus, we are hard-pressed to find reasons to see the current gains as sustainable.  Frantisek Taborsky  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Euro and European bond yields decreased after the ECB decision. The end of tightening may be close

European Markets Look Set To Start The New Month Higher

Michael Hewson Michael Hewson 01.03.2023 10:44
After such a positive start to the year, with two successive monthly gains, European markets have performed remarkably well against a backdrop of a sharp rise in interest rates. US markets on the other hand closed lower as well as giving up some of their January gains.   Year to date we've seen the DAX rise 10.3% and the FTSE100 add 5.7%, against a backdrop that has seen German and UK rates surge against a backdrop of stickier than expected inflationary pressure.   These gains have inevitably prompted speculation as to how sustainable they are, and for now the progress we've seen thus far does look steady and sustainable. Much will depend on how high rates eventually settle and in that there are many strands of opinion.   Markets are continuing to price in the prospect that rates will eventually fall back to a lower baseline, with very few investors willing to countenance the idea that rates are likely to remain high for some time to come, and even longer.   Much will depend on high sticky inflation is likely to be, and on current evidence there is little sign that it is slowing, which means we could see at least 2-3 more rate hikes in the coming months, and rates could stay at these levels through 2024 and into 2025.   Today's final manufacturing PMIs from Spain, Italy, France, Germany and the UK are set to point to a mixed outlook when it comes to economic activity, with manufacturing expected to show an improvement to 49 and 51 in Spain and Italy and declines to 47.5 and 46.3 in France and Germany respectively.   Yesterday inflation in France hit a record high of 7.2% in February, driven by increases in food and services prices, while in Spain it edged back up to 6.1%. While we've seen slowdowns in the price of energy which generally tends to help the manufacturing sector, there has been divergent reactions to the milder winter. Italy and Spain appear to be more resilient, however France and Germany appear to be heading in the wrong direction.   One part of that is higher inflation, with today's German CPI for February expected to only decline modestly to 9%, from 9.2%, however there is a risk of an upside surprise given yesterday's readings from Spain and France. The sticky inflation outlook is already shifting rate hike expectations for the ECB, and a possible 4% pause rate.   We also have more economic data from the UK, where consumers are being similarly squeezed by higher prices and some shortages.  UK manufacturing PMI is expected to be confirmed at 49.2, an increase from 47.   Mortgage approvals have also been in decline in the face of the slowing economy and falling house prices. At the end of last year approvals fell to their lowest levels since May 2020 at 35.6k and could see a modest pickup in January to 38.5k, however it is clear that higher rates are weighing on demand for mortgages, as well as property.   Net consumer credit has slowed from the levels we were seeing in the summer, falling to £500m at the end of last year. This could see a modest pickup to £800m in January.   Moving on to the US economy, we have ISM manufacturing which will tee us up nicely for the services report on Friday, which helped reinforce the hawkish tilt that we saw post January payrolls.   Manufacturing ISM is forecast to improve modestly to 48, still in contraction, along with prices paid which is currently disinflationary at 44.5. European markets look set to start the new month higher after Asia markets got a lift from the latest China manufacturing and services PMI numbers for February, which showed that manufacturing activity jumped to its highest level since 2012 at 52.6. Services also improved to 56.3, giving the China reopening story some added legs, after what has been a slow start since restrictions started to get eased back in December.   EUR/USD – looks to have posted a bullish day reversal off support at the 1.0530 area earlier this week. We need to push through the 1.0640 area to open up a move higher, and back towards the 50-day SMA at 1.0730. While below 1.0730, the bias remains for a test of the January lows at 1.0480/85. GBP/USD – retested the 50-day SMA at 1.2150 yesterday, and which needs to break to retarget the 1.2300 area. Support remains at the lows this week at the 200-day SMA at 1.1920/30. A break of 1.1900 retargets the 1.1830 area. EUR/GBP – slipped back from the 0.8830/40 area and has drifted down to the 100-day SMA at 0.8750. While below the 0.8830 we could see further declines towards the 0.8720 level. USD/JPY – ran into resistance at the 200-day SMA at 136.90/00. Interim support at 133.60, and below that at 132.60, and 50-day SMA.   FTSE100 is expected to open 20 points higher at 7,896 DAX is expected to open 37 points higher at 15,402 CAC40 is expected to open 5 points higher at 7,281 Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
Asia Morning Bites - 10.05.2023

Saxo Bank Podcast: PMI Reports From China Suggest The Fastest Rate Of Expansion In China's Manufacturing Sector In More Than A Decade

Saxo Bank Saxo Bank 01.03.2023 11:16
Summary:  Today we look at the stunning official February Manufacturing PMI numbers out China overnight, which suggested the most rapid pace of expansion in China's manufacturing sector in over a decade. We look at how this development propagated through commodities and currencies, as well as the impact on EU rates after hot CPI numbers from France and Spain yesterday. Thoughts on inflation and real growth, stocks and earnings to watch, weakening US Consumer Confidence expectations and what that signals and more also on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next: Elon Musk Is Richest Man Again, The State Bank Of India Had Raised $1 Billion From Global Banks| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com Source: Podcast: The China reopening narrative tries to get back on the rails | Saxo Group (home.saxo)
The USD/JPY Price Reversed From The Lower Limit

Euro Is Rising, USD/JPY Falls Below 136.00, The Aussie Pair Also Gains

Kamila Szypuła Kamila Szypuła 01.03.2023 13:32
The dollar weakened and the Chinese yuan gained on Wednesday after Chinese manufacturing activity rose at the fastest pace since April 2012, while the euro gained after regional price data in Germany boosted inflation concerns. The Australian and New Zealand dollars also benefited from strong Chinese economic data that beat expectations, with the official Industrial Purchasing Managers' Index (PMI) rising to 52.6 last month from 50.1 in January. Upbeat China PMI data showed that Chinese economic activity continued to gain momentum following the decision to reopen the economy in December. The situation sparked a rally in major Asian stock indices, with the Euro Stoxx 50 index opening in the red. USD/JPY The yen traded above 136.25 in the Asian session, but fell sharply below 136.00 in the European session. The USD/JPY pair has dropped significantly to 135.30 in the last hours. USD/JPY at the time of writing is just above 135.30 (135.3040). The Japanese yen (JPY) strengthened slightly after data released today showed the Manufacturing PMI (Feb) was better than expected. EUR/USD On Wednesday, the trade of the euro pair is significantly positive, the EUR/USD pair has been rising since the beginning of the day. At the time of writing, the EUR/USD pair is trading around 1.0670. Data released on Tuesday showed accelerating inflation in France and Spain, the eurozone's two largest economies, raising the European Central Bank's (ECB) expectations for interest rate hikes. The pair is taking advantage of the ECB's hawkish expectations and the significant weakness of the US dollar. All eyes are on German inflation and US ISM PMI data. Markets expect the Harmonized Index of Consumer Prices (HICP), the European Central Bank's preferred measure of inflation, in Germany to fall to 9% yoy in February from 9.2% in January. If the annual HICP unexpectedly approaches or even exceeds January's value, the euro's initial reaction is likely to outpace its rivals. Markets are almost fully pricing in the ECB's final interest rate at 4% in 2023, and a strong inflation print from Germany should allow the ECB's hawkish bets to dominate the euro's valuation. Read next: Developer Vanke Is Selling 300 Million Shares To Allocate For The Proceeds To Debt Repayment| FXMAG.COM GBP/USD The GBP/USD pair is not doing as well as EUR/USD, despite rising to levels above 1.2080 in the Asian session. In the European session, the cable pair fell towards 1.2020, but rebounded and rose above 1.2050. Sterling rose marginally against a weaker dollar on Wednesday, trimming gains made earlier in the session after Bank of England Governor Andrew Bailey said nothing had been decided in terms of whether interest rates would need to rise again. Meanwhile, British Prime Minister Rishi Sunak reportedly told his MPs to give the Democratic Unionist Party (DUP) time and space to study the details of the new deal. The recent UK-EU deal or "Windsor Framework" has given the pound some momentum but it has struggled to maintain said gains. The reasons for this may be partly because the economic impact of the deal is unlikely to be significant for the UK economy as it does not improve trading conditions between the rest of the UK and the EU. A recent poll by the Bank of England found Brexit no longer a key uncertainty for UK businesses. AUD/USD AUD/USD gains on Wednesday. The Aussie Pair fell significantly at the beginning of the day, but then rebounded and maintained its upward trend. The Australian pair is trading above 0.6775 at the time of writing. The Australian dollar fell below 67 cents after Q4 quarter-on-quarter GDP was 0.5% instead of the 0.8% forecast and compared to the previous 0.7%, which was revised up from 0.6%. The currency trimmed losses later in the day thanks to solid data from China. Annual GDP by the end of December was 2.7%, in line with expectations. Today's GDP figures come ahead of the Reserve Bank of Australia's monetary policy meeting next Tuesday. They are expected to raise their target cash rate by 25 basis points (bps) to 3.60%. If it does, it will be the tenth increase since it started in May last year. The latest inflation reading is well above the RBA target range of 2-3% at 7.8% year-on-year. Source: finance.yahoo.com, investing.com
The RBA Is Expected To Raise Rates By 25bp Next Week

The RBA Is Expected To Raise Rates By 25bp Next Week

Kenny Fisher Kenny Fisher 01.03.2023 14:17
The Australian dollar is showing strong gains for the first time in a week. AUD/USD is trading at 0.6764 in Europe, up 0.53%. Australia’s inflation eases Australia’s inflation fell to 7.4% in January, down from 8.4% in December and below the estimate of 8.0%. Australian Treasurer Jim Chalmers said that he was “cautiously hopeful” that inflation has peaked, but inflation still remained the economy’s biggest challenge. The GDP report was not as positive, with a gain of 0.5% q/q in Q4, below the Q3 gain of 0.7% and the forecast of 0.8%. On an annualized basis, GDP slowed to 2.7% in Q4, down sharply from 5.9% in the third quarter. The RBA’s rate-hike cycle has slowed economic activity and is responsible for the drop in inflation as well as the soft GDP. The central bank will have to consider how aggressive it should be with regard to future rate increases. Inflation needs to come down much further, but further rate hikes raise the risk of the economy tipping into a recession. The RBA is expected to raise rates by 25 basis points next week but may pause at the April meeting if the data, particularly inflation, allows the Bank to take to a breather. The Aussie received a boost today from strong Chinese PMIs. Manufacturing and Non-manufacturing PMIs improved in February and beat expectations, with readings of 52.6 and 56.3, respectively. A reading above 50.0 indicates expansion. China is Australia’s largest trading partner and a stronger Chinese economy means greater demand for Australian exports, which is bullish for the Australian dollar. China’s transition from zero-Covid to reopening the economy has gone well so far and a rebound in China is important not just for China and the region but for the global economy as well. Read next: Euro Is Rising, USD/JPY Falls Below 136.00, The Aussie Pair Also Gains| FXMAG.COM AUD/USD Technical AUD/USD has support at 0.6656 and 0.6586 There is resistance at 0.6788 and 0.6858 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Lagarde's Dilemma: Balancing Eurozone's Slowdown and Inflation Pressure

On The New York Stock Exchange Only One Index Rose (Dow Jones)

InstaForex Analysis InstaForex Analysis 02.03.2023 08:02
The main reason for the pessimism of investors is the risks associated with the future actions of the global central banks. Against the backdrop of the persistent high inflation, traders are waiting for toughening the monetary policy of regulators and further raising rates. Traiders also evaluate statistics on the country on Wednesday. The USA Manuapacturn Industry Index in February increased to 47.7% from the January 47.4%. The indicator was predicted at 48%. At the time of closing on the New York Stock Exchange, Dow Jones rose 0.02%, the S&P 500 index dropped by 0.47%, the NASDAQ Composite index fell by 0.66%. Dow Jones The leaders among Dow Jones index components in today's trading were Caterpillar Inc. shares, which gained 9.12p (3.81%) to close at 248.67. 3M Company gained 2.47p (2.29%) to close at 110.21. Salesforce Inc. gained 3.74p (2.29%) to close at 167.35. The least gainers were the Home Depot Inc shares, the price of which fell by 5.75 p. (1.94%), completing the session at the mark of 290.79. Apple Inc shares rose 2.10 p. (1.42%), closed at 145.31, and Walmart Inc decreased in price by 1.98 p. (1.39%) and completed the auction at the mark of 140.15 . S&P 500  The leaders in growth among components of the S&P 500 index in today's trading were shares of Valero Energy Corporation, which gained 5.74% to 139.29, Freeport-McMoran Copper & Gold Inc, which gained 4.95% to close at 43.00, and shares of Phillips 66, which gained 4.56% to close the session at 107.24. The least gainers were the Lowe's Companies Inc shares, which decreased in price by 5.56%, closing at the mark of 194.31. Lumen Technologies Inc shares lost 5.00% and completed the session at 3.23. The Alexandria Real Estate Equites Inc quotes decreased in price by 4.59% to the mark of 142.91. Nasdaq In the growth leaders, among the components of the Nasdaq Composite index, according to the results of today's trading, there were Arcadia Biosciences Inc shares, which went up 1.00% to 8.60, Reata Pharmaceuticals Inc, which scored 198.91%, closing at 93.17, and Also, the Cardio Diagnostics Holdings Inc shares, which increased by 91.30%, completing the session at 6.60. The least gainers became the Performance Shipping Inc shares, which decreased in price by 56.88%, closed at 1.16. The shares of China Jo-Jo Drugstores Inc lost 47.45% and completed the session at the level of 3.92. Xometry Inc quotes decreased in price by 39.49% to 18.40. Numbers On the New York Stock Exchange, the number of cheaper papers (1634) exceeded the number of closed in the plus (1395), and the quotes of 111 shares practically did not change. On the NASDAQ Stock Exchange, 2055 companies fell in price, 1578 grew, and 188 remained at the level of the previous closure. The CBOE VOLATILITY INDEX volatility index, which is formed on the basis of options for the Office Trade on S&P 500, fell by 0.58% to the mark of 20.58. Gold Futures for gold futures with a supply in April added 0.43%, or 7.85, reaching $ 1.00 for a troika ounce. As for other goods, the prices for WTI oil futures with delivery in April rose 0.83%, or 0.64, to $ 77.69 per barrel. Futures for Brent oil futures with delivery in May rose by 1.09%, or 0.91, to the mark of $ 84.36 per barrel. Forex Meanwhile, on the Forex Forex EUR/USD market, 0.86% to 1.07 increased, and USD/JPY quotes fell by 0.02%, reaching 136.18. Futures on the USD index sank by 0.44% to 104.36.   Relevance up to 03:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314593
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

The Aussie Pair (AUD/USD) Will Try To Take A High Target Level

InstaForex Analysis InstaForex Analysis 02.03.2023 08:04
The Australian dollar gained 32 pips yesterday and closed the day with a white candlestick and settled above support at 0.6730. The Marlin oscillator behaves with restraint. This morning, there was already an attempt to attack this support. The attempts will probably be repeated, since the situation on the smaller chart is consistent with such a plan. A success will allow the price to establish itself in the starting positions for a breakout to the next support at 0.6640. In case it crosses yesterday's high (0.6786), the aussie will try to take a high target level at 0.6873 (January 19 low). On the four-hour chart, yesterday's rise was stopped by the resistance of the balance and MACD lines. The Marlin oscillator is in the positive area, but since it belongs to the leading oscillators, it can fall and return to the negative area. The signal is when the price settles below the 0.6730 level   Relevance up to 03:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336495
Bank of England hikes rates and keeps options open for further increases

On The Technical Side, Nothing Has Changed For The Pound

InstaForex Analysis InstaForex Analysis 02.03.2023 08:07
Yesterday, the pound showed increased volatility while the dollar index fell by 0.57%, the trading range was 120 pips with the day closing 8 pips above its opening level. On the technical side, nothing has changed for the pound. The Marlin oscillator, as before, develops sideways movement. But there is one difference - the pound started today by falling, whereas yesterday, it started with growth. This increases the potential for downward movement, and we can already say that an attack on the target level of 1.1914 has begun. A consolidation under that level opens the target at 1.1737, which is the high on September 13, 2022. On the four-hour chart, the price breaks through under the MACD indicator line, being under the balance line. The Marlin oscillator is in negative territory, which was not the case yesterday morning, and this is also an argument for a good starting position for the bears. We are waiting for the breakout of 1.1914   Relevance up to 03:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336497
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

EUR/USD Pair Is Still Trying To Overcome The Support

InstaForex Analysis InstaForex Analysis 02.03.2023 08:10
Yesterday, the euro rallied 90 pips without any fundamental or technical reasons, breaking through two target resistances, 1.0595 and 1.0660. The trading volume was the highest since the 16th of February, there was probably a hunt for the bears' Stop Losses, who were above 1.0650. If that's the case, then the euro's further growth looks really strange. With a great stretch it is possible to assume that market participants expect this a higher rate from the European Central Bank than the Federal Reserve, but, first of all, such a version hasn't drawn much attention in the western press yet, and secondly, the rate difference even in the long term will be in favor of the Fed and the dollar. What we hear more is the version that risk appetite increased due to upbeat Chinese PMI for February. The manufacturing PMI increased from 50.1 to 52.6 points. But the stock market did not benefit from this as the main indices closed in the red zone. Today, the European CPI for February is expected to decline from 8.6% y/y to 8.2% y/y and the number of initial jobless claims in the US might stay at a relatively low level for the last 6 weeks - the forecast is 195,000. The signal line of the Marlin oscillator of the daily chart is in the negative area and shows the first sign of a downward reversal. If the price closes today below 1.0660, then further fall to 1.0595 will resume and, what we expect according to the main scenario, further advance to the target range of 1.0443/70. An alternative scenario, the probability of which, however, has increased, suggests that the price settles above 1.0660 (i.e. closing the day with a white candlestick), Marlin's transition into the positive zone and further growth to the target range of 1.0758/87. On the four-hour chart, the price has consolidated above the balance and MACD indicator lines, it is still trying to overcome the support at 1.0660, the Marlin oscillator turns down sharply, which is an early sign of price reversal   Relevance up to 03:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336499
Small factors combine to pressure credit

The Trend Change Of The EUR/USD Pair Are Now Required

Paolo Greco Paolo Greco 02.03.2023 08:13
On Wednesday, the EUR/USD currency pair was trading higher, and, for the first time in a while, it broke through the moving average line. As a result, the trend is now formally upward. "Formally" – as overcoming the moving is not a significant signal by itself. This is merely a cautionary note that the trend might change. Signals confirming the trend change are now required. Furthermore, such signals might not exist. The pair may close tomorrow below the moving average due to strong statistics from the USA or weak figures from the European Union. Here, it's important to pay close attention to both the signs on the 24-hour TF and the fundamental background. Additionally, I'd like to point out that we continue to anticipate a decline in the value of the euro. To be honest, it should be said that it is becoming increasingly difficult to think that the value of the euro would decline every day. We shall discuss the ECB's problems in more detail below, but for now, let's focus on the basic issue: no one knows how much a given central bank should raise interest rates to get inflation back to 2%. Most likely, there is no response to this query because the economy has a complicated structure that makes it difficult to foretell such occurrences. All central banks, therefore, attempt to operate "in the course of the play." And given this, it is quite challenging to predict which way the pair will move over the next two to three months. Tomorrow, Christine Lagarde will announce that the ECB will increase interest rates three more times by 0.5%. Of course, the euro will instantly experience strong growth. Jerome Powell will announce the Fed will speed up the tightening of monetary policy the day after tomorrow, and the dollar will already be more expensive. As a result, traders must now take action and be ready for any changes in the course of events. The pair's failure to overcome the Senkou Span B line on the 24-hour TF (so far) raises serious red flags regarding the potential end of a downward correction. On top, there is a Kijun-sen line that must be crossed for the upward trend to resume. As of now, a decline in prices is still something we may anticipate, but now strong factors are required for the devaluation of the euro. One noteworthy incident from yesterday will be remembered. In a speech, Joachim Nagel, the head of the German central bank, warned that many more additional tightenings in monetary policy may be necessary following the ECB's 0.5% rate hike in March. Also, he pointed out that in Germany, inflation won't drop below 2% in 2023, 2024, or 2025. It's still unclear what Nagel meant. The reality that inflation will remain over target for a long time because the ECB is just not prepared to tighten monetary policy for an extended period? Or the fact that inflation will continue to be high regardless of how much the rate is raised? We think that Nagel's statements currently only reflect his perspective. Since the ECB is the central bank of a group of nations, the monetary committee of the ECB is not just present, and its other members may have different opinions. Also, it is necessary to consider each party's interests. In our opinion, the European regulator won't be prepared to increase the rate to 5 or 6%. In other words, it might take a while for the consumer price index to recover to the desired level, at least in the coming years. By the way, Germany's inflation has already begun to increase once again. Not just in Germany, either. Today, a European inflation indicator will be issued, which may disappoint markets. But how will it disappoint them? In light of Nagel's statement, the euro appreciated significantly as the likelihood of a prolonged rate hike increased multiple times. The euro may continue to rise if inflation today shows only a slight slowdown or no decline at all since the probability will only increase. High inflation is therefore more beneficial than detrimental for the euro currency. The euro may well continue to be supported by this factor for a few more days, after which the Fed and US inflation will control everything. The Federal Reserve, a more active central bank, might also tighten its rhetoric if the consumer price index starts to increase in the US. Also, traders respond to speeches by Fed members far more enthusiastically than they do to similar statements by ECB members. As a result, such "swings" may very well be present on the market soon. But for the time being, we continue to think that the value of the euro will decline. As of March 2, the euro/dollar currency pair has experienced 83 points of "average" volatility over the previous five trading days. Thus, on Thursday, we anticipate the pair to move between the 1.0566 and 1.0732 levels. The Heiken Ashi indicator's downward turn will signal a potential continuation of the downward movement. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 100986 Trade Suggestions: The attempt to begin an upward trend by the EUR/USD pair can only be a technical corrective. Until the Heiken Ashi indicator turns down, you can continue holding long positions with targets of 1.0732 and 1.0742. After the price is fixed back below the moving average line, short positions can be initiated with targets of 1.0566 and 1.0498. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 01:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336489
The Pound Should Keep Losing Ground Versus The Dollar

The Pound Should Keep Losing Ground Versus The Dollar

Paolo Greco Paolo Greco 02.03.2023 08:15
During the past few weeks, the GBP/USD currency pair has been in "swing" mode. This is readily obvious on the 4-hour TF, and on the 24-hour TF, we generally have a flat in the channel with a width of 500 points. As a result, we are now dealing with a "swing" inside a higher-order flat. Given how challenging it is to resolve frequent pair reversals, the situation is not ideal. It is advisable to trade right now on the lower timeframes because these movements appear to be fairly successful on the lower timeframes. But we also need to examine what is occurring in the older ones. At the very least, you must comprehend what is happening. This is what is now taking place. After a protracted downturn, the pair corrected by 50% and then really stopped moving. The downward correction wasn't strong enough to satisfy us. We think that the euro and the pound should keep losing ground versus the dollar. If certain growth factors begin to emerge in the case of the euro, then there are no such factors in the situation of the pound. We've already stated in recent publications that Bank of England officials hardly ever discuss monetary policy or reveal the regulator's goals. Of course, this kind of information is occasionally obtained, but it is extremely uncommon. As a result, nobody in the market knows what to anticipate from the British regulator at this time. As a result, the pound is not increasing but neither does it tend to decrease. In general, the situation is virtually at a standstill. Moreover, we would argue that since the pair is in a flat, they still need to be able to escape, and technical considerations are now more important. Yet, we will most likely receive some information from Andrew Bailey, who is not pessimistic. The UK's inflation rate is still not expected to fall as quickly as the regulator anticipates, and ECB official Nagel stated yesterday that the drop in energy costs did not affect the inflation slowdown. Hence, the decline in oil and gas prices may be making us wait in vain for the CPI to decline. If this is the case, lowering inflation to 2% will be even more challenging because, even at a 4% pace, it has slowed down by a total of 1%. The effects of the change in monetary policy are undoubtedly long-term, but if they were to occur at all, they would already be evident. The Senkou Span B line is rising on its own, but the pair haven't yet been able to break out of the Ichimoku cloud on the 24-hour TF. The important level is 1.1841, which is the side channel's bottom limit. It is unlikely that Andrew Bailey will use hawkish rhetoric. Leading experts from across the world have already started to evaluate the speech that BA Chairman Andrew Bailey is scheduled to give this week. Commerzbank, for instance, thinks that Mr. Bailey won't set himself out with "hawkish" rhetoric and that as a result, the pound may once more experience sales. The bank thinks that a smaller-than-anticipated slowdown in the British economy could release some of the regulator's restrictions. The signature of an agreement between the EU and the UK on the "Northern Ireland Protocol" also raises certain expectations. Experts warn that this process won't completely take into account all of the effects of Brexit on the Kingdom. According to Commerzbank analysts, Bailey won't live up to the market's expectations given the rigidity of the rhetoric surrounding the rate. We predict that BA will increase rates by 0.5% again in March before carefully considering each additional tightening. If the British regulator does not tighten monetary policy at the same rate when inflation is above 10%, it will face a barrage of criticism. As a result, we think we're in for at least one more significant rate increase. Yet once more, it's crucial to comprehend what the Fed will do in the coming months. To determine whether the January figure was an accident, you must view the next inflation report. If so, then the pound will have a significant advantage over the dollar since BA will raise the rate more quickly. If not, the pound could decline as a result of the Fed's potential decision to speed up tightening once more. Absolute "swing," in both technical and fundamental terms. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 118 points. This value is "high" for the pound/dollar pair. As a result, on Thursday, March 2, we anticipate channel movement that is limited by the levels of 1.1876 and 1.2112. A new upward round of movement within the "swing" will be indicated by the Heiken Ashi indicator moving upward. Nearest levels of support S1 – 1.1993 S2 – 1.1963 S3 – 1.1932 Nearest levels of resistance R1 – 1.2024 R2 – 1.2054 R3 – 1.2085 Trade Suggestions: In the 4-hour timeframe, the GBP/USD pair has once again stabilized below the moving average. The pair is currently in a "swing" movement, which allows you to trade on a recovery from the levels of 1.1932 and 1.2115. Alternately, trade on the lower TF, where it is simpler to spot moves using shorter-term and more precise signals. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones   Relevance up to 01:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336491
InstaForex's Ralph Shedler talks Euro against Japanese yen

The USD/JPY Pair Will Potentially Continue Strengthening Up

InstaForex Analysis InstaForex Analysis 02.03.2023 08:22
Currently on the daily chart, USD/JPY main currency pairs seems trying to test and break above the level 138,17 where the rally movement above confirmed by the price movement which is above the EMA 10 and CCI indicator successfully break above the level -100,0 & 100 which indicates that buyers are dominating this market so that if the 138.17 level is successfully broken, USD/JPY will potentially continue strengthening up to 142.24 in the next few days. However, it should be noted if there is a downward correction beyond the 129.81 level and/or the CCI indicator penetrates below the up trendline, it is very likely that the Bull scenario previously described will become invalid and cancel itself. (Disclaimer)   Relevance up to 05:00 2023-03-05 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120487
EUR/USD Pair Has A Potential For Short-Term Rally

Analysis Of EUR/USD Pair: It Is A Bullish Factor For The Euro

Paolo Greco Paolo Greco 02.03.2023 08:26
5M chart of EUR/USD EUR/USD continued to rise on Wednesday. Yesterday, there were quite specific reasons for such a movement, although they can be questioned. For instance, yesterday, Germany published its inflation report, which showed that there was no slowdown. And last month, it was rising almost to its peak. Thus, prices are not slowing down in the EU's largest economy and traders can expect a slowdown in the rate of decline of pan-European inflation. This will only mean that the European Central Bank needs to keep up its momentum and keep raising the rate as fast as it can. Naturally, it is a bullish factor for the euro. Joachim Nagel also gave a speech stating that the monetary tightening cycle may last much longer than it is expected now. This is also a bullish factor for the euro. The only problem is that the euro rose on Wednesday first, and then there was a speech and the release of the report... Technical signals can be divided into the European and the US sessions. At the European session, there was a buy signal near the critical line, afterwards the pair rose to 1.0658. The price rebounded from the level, so the long position should have been closed at that moment. Profit at 35 pips. The sell signal at 1.0658 also should have been executed, but it turned out to be false and brought in a loss of 25 pips. The price started to move from side to side, the signals were formed often and were mostly false. The levels 1.0658, 1.0669 and 1.0690 were very close to each other, so we shouldn't open any positions between them. When the sell signal formed when the pair settled below 1.0658, the ISM report was released in the US, so we should have ignored that one too. Moreover, the initial reaction to it was illogical. COT report: Due to a technical glitch, new COT reports have not been released for almost a month, but on Friday, one of the reports for January 31 was released. This report does not make much sense, because since then, a month has passed, and the data from the next reports (which are more or less up-to-date) are still not available. Therefore, we will analyze the data that are available. The COT reports on EUR/USD have been in line with expectations in recent months. The net non-commercial position has been on the rise since September. Around the same time, the euro started to rise. The bullish non-commercial position rises with each new week. Taking into account this fact, we may assume that the uptrend will soon come to an end. The red and green lines of the first indicator are far apart, which is usually a sign of the end of a trend. The euro has already started to fall, but it is not clear yet, is it a pullback or a new downtrend? In the reporting week, non-commercial traders opened 9,000 long positions while the number of shorts decreased by 7,100. Correspondingly, the net position increased by 16,100. The number of long positions exceeds that of short ones by 148,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue. 1H chart of EUR/USD On the one-hour chart, the trend is shifting upward. The trend below the Senkou Span B line isn't completely canceled, but the fact that the pair settles above the critical line and the trend line already says a lot. Therefore, until it overcomes the Senkou Span B line, the pair can still restore the downtrend. On Thursday, important levels are seen at 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0762, 1.0806, and also Senkou Span B (1.0690) and Kijun Sen (1.0613). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On March 2, the ECB will publish the most important inflation report for February. The ECB and the Fed will also deliver some speeches. The day promises to be very interesting. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.   Relevance up to 01:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336484
ECB enters final stage of tightening cycle

The Former Resistance Of EUR/USD Pair At 1.0628 Is Expected

Torben Melsted Torben Melsted 02.03.2023 08:24
There was no time for EUR/USD to spike lower to the ideal target at 1.0498 as we saw a small dip to 1.0565 followed by a clear break above resistance at 1.0628 confirming that EUR/USD has completed its corrective decline in wave 4 and a new impulsive rally now is unfolding towards 1.1102 and ideally closer to 1.1400. Short-term the former resistance at 1.0628 is expected to act as a floor for the next rally higher, but only an unexpected break below support at 1.0565 will revive the corrective decline in wave 4 and the 1.0498 target before completing wave 4 and setting the stage for a new impulsive rally higher in wave 5.   Relevance up to 06:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314611
The GBP/USD Pair Has Experienced An Average Volatility - 14.03.2023

GBP/USD Pair Is Trading In A Swing Mode

Paolo Greco Paolo Greco 02.03.2023 08:30
5M chart of GBP/USD GBP/USD showed a downtrend on Wednesday, but there were constant reversals in different directions, which significantly complicated the trading process. There were at least 5 global price reversals. The most interesting thing is that, actually, the only important report of the day - ISM manufacturing activity index - was priced in a very strange way. At first, the dollar gained 50 points, but in the next hour, it fell down just as much. The report itself turned out to be slightly better than the last month, but worse than expected. It is difficult to say why the pair had been changing its direction before the report was published. However, in my last articles, I already mentioned that the pair went in a "swing" mode. The Ichimoku indicator lines are ignored or can be ignored most of the time. Now is not the most favorable time to trade. There is almost no point in considering Wednesday's trading signals, because all but one were formed near the critical line. Naturally, most of them turned out to be false. Traders could try to work only the first two. First, the pair settled below the Kijun-Sen line, then above it. In the first case, there was a 30 pips loss. In the second case, Stop Loss triggered at Breakeven. The next signal available for execution was formed near 1.1965, which was also executed by some miracle. The buy signal made it possible for traders to earn about 35 pips, covering the loss of the first trade. Thus, the day ended even with the least amount of profit, but, of course, traders do not count on such trades. COT report: The COT report for the British pound has not been out for a month. The report for January 31 became available on Friday, which makes no sense since it came out a month ago. This report showed minimal changes. In the reporting week, non-commercial traders opened 1,400 long positions while the number of shorts decreased by 4,100. Thus, the net position of non-commercial traders increased by almost 10,000. The value of the net position has been steadily rising in recent months, but large market players are still bearish, and the GBP is rising against the USD (in the medium term), but from a fundamental perspective, it is very difficult to answer the question why it does it. The pound could start to fall in the near future. Formally, it has already started, but so far it looks like a flat. Take note that both major pairs are moving in a similar way, but the net position of the euro is positive and even implies an end of the upward movement, while it is negative for the pound... The non-commercial group of traders has a total of 54,000 long positions and 36,000 shorts. I am still rather skeptical about the long-term uptrend in the pound. The fundamental and geopolitical backgrounds do not favor a strong and swift rise in the British currency. 1H chart of GBP/USD On the one-hour chart, GBP/USD is trading in a "swing" mode rather than a trend. This is noticeable even on the one-hour chart, not to mention the higher ones. Thus, the lines of the Ichimoku indicator are losing their strength. After the price has settled above the descending trend line, in fact, nothing has changed. It did not move up and the pair failed to renew even its last local high. On March 2, it is recommended to trade at the key level of 1.1760, 1.1874, 1.1927-1.1965, 1.2143, 1.2185, 1.2269. The Senkou Span B (1.2091) and Kijun Sen (1.2031) lines can also generate signals. Rebounds and breakouts from these lines can also serve as trading signals. It is better to set the Stop Loss at breakeven as soon as the price moves by 20 pips in the right direction. The lines of the Ichimoku indicator can change their position throughout the day which is worth keeping in mind when looking for trading signals. On the chart, you can also see support and resistance levels where you can take profit. On Thursday, Huw Pill from the Bank of England will speak in the UK and Christopher Waller from the Federal Reserve will speak in the US. These are all interesting events. Subject to important statements, market reaction may follow, but the probability is low. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders   Relevance up to 01:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336487
FX Daily: Time for the dollar to pause?

EUR/USD Pair Is Projected To Trade Lower

Oscar Ton Oscar Ton 02.03.2023 08:33
Technical outlook: EURUSD rallied through the 1.0691 intraday highs during the early New York session on Wednesday. Prices remained shy of a few pips from the 1.0700 resistance and pulled back. The single currency pair is seen to be trading close to 1.0635 at this point in writing and could slip further towards 1.0820 before finding support again. The instrument is looking higher thereafter. EURUSD is carving a larger-degree corrective decline which began from the 1.1025 highs in February. The pair has managed to carve the first wave of the corrective drop towards 1.0531 recently. The price could be progressing towards 1.0720 and up to 1.0850 as the second wave unfolds. We can expect prices to resume lower to 1.0100 later. EURUSD is projected to trade lower in the medium term and drag towards 1.0100 before resuming its rally. Also, note that the Fibonacci 0.618 retracement of the previous rally between 0.9535 and 1.1025 is seen passing through the 1.0100-10 zone. A high probability remains for a bullish bounce if prices manage to reach there. Trading plan: Potential rally to 1.0720 and 1.0850 in the near term, then lower again Good luck!   Relevance up to 08:00 2023-03-30 UTC+2 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314619
Musk Said Tesla’s Next Phase Of Growth Will Be Built Around Building Clean Energy Sources

Musk Said Tesla’s Next Phase Of Growth Will Be Built Around Building Clean Energy Sources

Saxo Bank Saxo Bank 02.03.2023 08:39
Summary:  China’s PMI data came in stronger than expected and signaled the economic recovery is picking up steam. The data triggered sharp rallies in the Hang Seng Index and commodity prices, particularly industrial metals. U.S. bond yields rose and equities slid, following the ISM price paid index rising to 51.3 and Fed officials’ hawkish comments keeping a 50-bp hike in the March FOMC on the table.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) slump to new lows on higher Fed rate bets Stocks were pressured after fresh economic data highlighted persistent inflationary pressures remain – pushing the S&P500 to close at its lowest level in six weeks after shedding 0.5%. It’s the second straight day the S&P closed under its 50-day moving average. While most sectors declined within the S&P500, energy rallied strongly by nearly 2%. The strong China PMI data helped sentiment in the materials and industrial sectors, both rising on Wednesday. Nasdaq 100 slid 0.9%. The extra pressure on equities came as the prices paid component of the ISM in surging above the 50 expansion/contraction threshold and higher for longer comments from Fed officials (see below). Key U.S. company news In regular trading, First Solar (FSLR:xnas) shares surged about 16% to its highest since 2009 after the panel maker’s backlog of orders look like they’ll take the 2nd half of the decade to fill. The surging demand comes as the company is benefiting from the Inflation Reduction Act- signed last year by President Joe Biden. Meanwhile, after close of trade - software giant Salesforce (CRM:xnys) gave a surprisingly upbeat forecast for the year ahead - and plans to step up share buybacks to $20 billion, which is positive vs its $167b market cap. Operating margins will be about 27% in fiscal 2024, exceeding Bloomberg consensus estimates of 22.4% growth. This also potentially eases pressures CRMs faces from a group of activist investors. Salesforce shares rose 14% in post market trade, after closing at $167.35 in normal trade. Next, we will be watching - Campbell Soup (CPB:xnys) which reports after market close Thursday. US Treasury curve (TLT:Xmas, IEF:xnas, SHY:xnas) sold off on Fed comments The 10-year yield breached above 4% briefly during the session before closing a touch below that at 3.99%, following comments from the Fed’s Kashkari saying undecided between a 25bp and 50bp hike at the March FOMC and Bostic’s 5-5.25% “well into next year” remarks. Yields on the 2-year notes rose 6bps to 4.88%, the highest level since 2007. The jump of the ISM Prices Paid (see below) also added fuel to the selloff. Hong Kong’s Hang Seng Index (HSI.I) and China’s CSI300 (000300.I) jumped on strong China PMIs Hang Seng Index surged 4.2% and CSI300 gained 1.4% on Wednesday following the release of strong PMI data in China much above consensus estimates. Hang Seng Tech Index jumped 6.6% as technology hardware, China internet, and EV makers advanced sharply. The percentage increase in the Hang Seng Index was the largest since early November and turnover in the Stock Exchange of Hong Kong reached HKD154 billion, the highest since late January. Chinese developers were among the top winners, with Longfor (00960:xhkg) up 9.6% and Country Garden (02007:xhkg) up 8.3% leading the charge higher. The chairman of Country Garden announced retirement. ASMPT (00522:xhkg) jumped 9% after the semiconductor equipment maker reported Q4 revenues beating estimates. After market close, Techtronic (00669:xhkg) reported H2 EPS of USD0.27 and revenues of USD6.2 billion, both below the consensus estimates due to soft demand for power tools.  In A-shares, telco, digital economy, software, gaming, media, and AI-generated content stocks were the top winners. Australian equities (ASXSP200.I) rise to four-day highs on commodities rebounding  - beware of companies going ex-dividend ahead After China PMIs beat expectations, with new orders surging back to 2017 level - focus is on commodities strongly rebounding - with the iron ore (SCOA) price rising to a five-day high $126.70, the spot Copper (HG1) price trading at a five-day high, while aluminium is also higher. Coles (COL), Woolworths (WOW) go ex-dividend today, along with Pilbara Minerals (PLS).  As a reminder – dividend paying giants, BHP and Rio go ex-dividend this time next week, which could pressure equities. FX: Dollar unable to bask in yields glory The US dollar was weaker on Wednesday mostly pressured by the gains in Chinese yuan in the Asian session after the upbeat China activity data sent the China reopening theme roaring once again. USDCNH dropped from 6.96 to sub-6.88. Some reversal in the dollar was seen in the US session but it was not enough to reverse earlier losses. Some other currencies also got a bid from the China theme, particularly EURUSD that surged to highs of 1.0691 also underpinned by rising hawkish ECB expectations after hot regional inflation prints. NZDUSD was the outperformer in G10 FX, rising to 0.6276 with Q4 terms of trade returning to positive territory at 1.8% from last month’s -3.9% QoQ. GBPUSD stayed below 1.2100 despite Bailey signaling more BOE hikes may be needed, and saying that the experience in the 1970s showed that doing "too little with interest rates now" may mean more increases later on.   AUD reverses course, rising above its 100-day moving average The Australian dollar against the US (AUDUSD) advanced for the first time following four days of losses, after China's manufacturing activity boosted sentiment – hitting a decade high – with new orders improving in February, surging to 54.1 - the highest level since September 2017. This enthusiasm is buoying commodity prices on the notion that demand will rise – the iron ore (SCOA) has risen to a five-day high of $126.70, spot Copper (HG1) hit a five-day high, while aluminium is also higher. This optimism is offsetting the slowing Australian prints released yesterday- with GDP grinding down to pace of 2.7% YoY in the 4Q as expected- while monthly CPI cooled to 7.4% YoY vs the 8.1% price growth forecast. It’s also important to note, short covering has also added to the Aussie dollar rising. Our view is that the Aussie dollar could see strength return in Q2, in line with our view that the commodity bull market will strongly restart in Q2. Crude oil struggling to lean on Asia/Europe vs. US demand Crude oil prices remained near recent highs despite the strong signal on Chinese demand recovery from upbeat PMI data. In addition, the inventory data was also bullish signalling a recovery of demand in Asia and Europe. US commercial crude oil inventories gained less than expected last week, rising only 1.2 million barrels as US exports of crude hit a record daily high of 5.6 million barrels last week (+22.4% w/w). However, on the other hand, US ISM data and hawkish Fed speakers continued to highlight inflation fears are here to stay and sparking some US demand concerns. WTI futures traded just below $78/barrel while Brent touched $84.50. Metals complex excited about China Copper, aluminum, zinc and iron all traded higher following the outperformance of Chinese PMI data on Wednesday, driving a return of focus to the China reopening theme. Copper, which earlier found support at $4 surged to $4.17 in the Asian morning today, and may take another look at $4.20. However, our head of Commodity Strategy Ole Hansen wrote that the next sustained move higher is unlikely to be triggered until the second quarter or later, the timing to a certain extend depending on the economic outlook for the rest of the world and whether recession, as we believe, will be avoided.   What to consider? Mixed US ISM survey details – but steady message on inflation The US ISM manufacturing marginally rose to 47.7 from 47.4, coming in below expectations of 48.0. New orders lifted to 47.0 (prev. 42.5), while employment fell to 49.1 (prev. 50.6), entering contractionary territory. But the message on price pressures continued to roil markets. ISM priced paid rose back into expansionary territory to 51.3, well above the prior 44.5 and the expected 45.1, re-affirming that it may be too soon to call goods inflation disinflationary. Hawkish Fed talk brings 10-year yields to top 4% Fed member Kashkari (voter) signaled an openness for a 50bps hike at the March meeting, saying he is open to both 25bps and 50bps. Still, he emphasized that the terminal rate is more important than the size of rate hikes, where also he hinted that it could be revised higher from December. Another member Bostic (non-voter) maintained his view that the Fed policy rate needs to rise to 5.00-5.25% range, but said that the rate should be left there “until well into 2024”. 10-year Treasury yields rose above the key 4% mark for the first time since November, sending another warning signal to equities. China’s PMIs signaled recovery picking up steam The headline official NBS PMI surged to 52.6 in February, the highest print since 2012, from 50.1 in January. The strength was across the board with production and new orders improving markedly and the new export orders unexpectedly surging to 52.4, the first time into the expansion territory in 23 months. The NBS non-manufacturing PMI and the Caixin Manufacturing PMI, also released today, both bounced strongly and signaled economic expansion. Readers can find more on China’s PMI here. Hot German inflation print creates further pressure for the ECB Coming on the heels of hotter than expected inflation prints in France and Spain for February, German CPI print was also hotter than expected at 9.3% YoY (vs. +9.0% exp and +9.2% prior). The message on disinflation has therefore continued to weaken, and both Fed and ECB are likewise pressured to do more on policy tightening to ensure the inflation comes back to target. Th aggregate Eurozone print is out today and expectations of a softening to 8.3% from 8.6% last month may be tested. Tesla plots a path to renewable energy at Tesla Investor Day As part of Tesla’s “Master Plan” for the company, Musk said Tesla’s next phase of growth will be built around building clean energy sources – that can serve a much larger world population - without great economic sacrifice. Moving into sustainable energy might mean moving into heat pumps- as they can dramatically cut home and office heating costs. Tesla dubs them one of the low hanging fruits in the sustainable energy transition. Tesla’s shares are up 97% from their January low.   For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Markets Today: Sharp rise in China’s PMI data; inflation concerns in the U.S. - 2 March 2023 | Saxo Group (home.saxo)
The Indian Rupee Pair Takes Clues From The Receding Fears Of Hawkish Fed Rate Moves

USD/INR Pair Is Aiming To Extend Gains Further

TeleTrade Comments TeleTrade Comments 02.03.2023 08:44
USD/INR has displayed a sheer recovery to near 82.60 as hawkish Fed bets have fueled US yields. A formation of an Ascending Triangle indicates volatility contraction with a bullish bias. The 50-period EMA at 82.30 is likely to provide a cushion to the US Dollar bulls. The USD/INR pair has picked strength after gauging significant buying interest around 82.35 in the Asian session. The asset has scaled sharply to 82.60 and is aiming to extend gains further as US Treasury yields are skyrocketing on expectations that the Federal Reserve (Fed) will push borrowing rates above 5% by summer. The US Dollar Index (DXY) is gathering strength to deliver a break above the immediate resistance of 104.30. The 10-year US Treasury yields have printed a fresh three-month high at 4.03%. Meanwhile, S&P500 futures have extended their losses further, portraying a risk-aversion theme. USD/INR is forming an Ascending Triangle chart pattern on a daily scale that indicates volatility contraction with a bullish bias. The upward-sloping trendline of the chart pattern is placed from November 14 low at 80.48 while the horizontal resistance is plotted from October 19 high at 83.10. The 50-period Exponential Moving Average (EMA) at 82.30 is likely to provide a cushion to the US Dollar bulls. Meanwhile, the Relative Strength Index (RSI) (14) has slipped into the 40.00-60.00 range from the bullish range of 60.00-80.00, indicating a lackluster performance ahead.  A decisive break above March 01 high at around 82.62 will drive the asset toward February 28 high around 82.75 followed by February 27 high around 82.95. On the flip side, a confident break below March 1 low at 82.34 will drag the major toward the round-level support of 82.00 and January 17 high at 81.89. USD/INR daily chart  
Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

The Loonie Pair (USD/CAD) Is Likely To Remain Sidelined

TeleTrade Comments TeleTrade Comments 02.03.2023 08:49
USD/CAD clings to mild gains after defying a bullish chart formation. Upbeat oscillators, sustained trading beyond previous resistance line keep buyers hopeful. 100-DMA appears the key support, Loonie buyers have multiple hurdles on the north. USD/CAD bulls struggle to keep the reins around the 1.3600 threshold during early Thursday in Europe. The Loonie pair’s latest grinds could be linked to the mixed technical signals witnessed on the Daily chart, as well as the market’s inaction. That said, the USD/CAD pair slipped beneath a two-week-old bullish channel’s lower line the previous day, which in turn suggested the quote’s declines towards the resistance-turned-support from mid-December 2022, close to 1.3550 by the press time. However, the 100-DMA level surrounding the 1.3500 threshold and multiple tops marked during late January, as well as early February, near 1.3470, could challenge the USD/CAD bears past 1.3550. Alternatively, the bullish MACD signals and upbeat RSI (14), not oversold, keeps USD/CAD buyers hopeful of bouncing back beyond the previous support line of the stated channel, near 1.3620. Following that, the tops marked in February and January, respectively around 1.3665 and 1.3685 will precede the December 16, 2022 swing high of 1.3705 to challenge the USD/CAD buyers. To sum up, USD/CAD is likely to remain sidelined between the previous support line surrounding 1.3550 and the immediate channel’s lower line of near 1.3620. USD/CAD: Daily chart Trend: Limited upside expected
Analysis Of The USD/TRY Pair: The Turkish Lira Weakness Has Persisted

USD/TRY Pair May Keep Grinding Higher Amid A Lack Of Major Data

TeleTrade Comments TeleTrade Comments 02.03.2023 08:52
USD/TRY keeps poking the all-time high marked in February, grinds higher of late. US Dollar traces US Treasury bond yields to reverse week-start losses. Downbeat Turkish data, geopolitical tension and CBRT’s hesitance to raise rates keep buyers hopeful. Friday’s Turkish CPI, US ISM Services PMI appear crucial for clear directions. USD/TRY tests bullish commitments around 18.90 amid a sluggish session during early Thursday. In doing so, the Turkish Lira (TRY) pair takes clues from the firmer US Treasury bond yields while also portraying the cautious mood ahead of Turkish inflation data for February, up for publishing on Friday. Hawkish comments from the key central bankers join fears surrounding China and Russia to renew the market’s economic pessimism, which in turn drowns the US Treasury bonds amid a lack of major data/events. The same joins mostly firmer US data, versus downbeat Turkish statistics, to favor the USD/TRY bulls. Against this backdrop, the US 10-year Treasury bond yields rose to the highest levels since early November 2022 by piercing the 4.0% mark whereas the two-year counterpart rallied to the highest levels since June 2007 by flashing the 4.92% mark at the latest.  The jump in the US Treasury bond yields portrays the market’s fears, which in turn probed bulls on Wall Street and weigh on S&P 500 Futures as of late. It should be noted that the US ISM Manufacturing PMI flashed upbeat details and allowed Minneapolis Federal Reserve (Fed) President Neel Kashkari to reiterate his hawkish bias. However, the Turkish Gross Domestic Product (GDP), trade numbers and economic confidence have all been softer in their latest readings and propelled the USD/TRY prices. Apart from the data imbalance and hawkish Fed concerns, as well as the yields, the Central Bank of the Republic of Turkiye’s (CBRT) hesitance in lifting the benchmark interest rates joins the latest earthquake in the nation to keep the pair buyers hopeful. Moving on, USD/TRY may keep grinding higher amid a lack of major data/events scheduled for release on Thursday. However, tomorrow’s Turkish Consumer Price Index (CPI) for February and the US ISM Services PMI for the said month will be crucial for the pair traders to watch for clear directions. Technical analysis Unless breaking the year 2021’s high surrounding 18.40, the USD/TRY bulls seem gradually rushing toward the 20.00 psychological magnet.
New Zealand dollar against US dollar decreased by 1.07% yesterday

The Kiwi Pair (NZD/USD) Has Sensed Pressure

TeleTrade Comments TeleTrade Comments 02.03.2023 08:57
NZD/USD has printed a fresh day low at 0.6222 amid the risk-off mood. A mean reversion to near 50-EMA is offering a bargain buy to investors. The RSI (14) is expected to find a cushion around 40.00. The NZD/USD pair has refreshed its day low at 0.6222 in the early European session. The Kiwi asset has sensed pressure and soaring US yields have dampened the market mood. The 10-year US Treasury yields have jumped to near 4.03% and are showing no signs of exhaustion yet. S&P500 futures have tumbled in the Asian session as investors are worried about the recession situation in the United States economy, considering the fact that the Federal Reserve (Fed) will push rates above 5% and will keep them steady beyond 2023. The US Dollar Index (DXY) has refreshed its day high above 104.70 amid the risk-off market mood. NZD/USD has corrected to near the 50-period Exponential Moving Average (EMA) at around 0.6223 after failing to extend its bullish reversal above the horizontal resistance placed from February 21 high at 0.6263 on an hourly scale. A scrutiny of the Relative Strength Index (RSI) (14) indicates that the momentum oscillator has already delivered a bullish reversal. The oscillation range of the RSI (14) has already shifted to 40.00-80.00. Therefore, the momentum indicator is expected to find a cushion at 40.00. The Kiwi asset is offering a buying opportunity near the 50-EMA at 0.6223, which could push the major toward March 1 high at 0.6276 followed by the round-level resistance at 0.6300. In an alternate scenario, a breakdown of January 6 low at 0.6193 will drag the asset toward November 28 low at 0.6155. A slippage below the latter will expose the asset for more downside toward the round-level support at 0.6100. NZD/USD hourly chart  
Australian dollar was boosted by record low Australian unemployment rates, historical local budget surplus and a surprising resumption of cash rate

The Aussie Pair Extends The Previous Day’s Pullback

TeleTrade Comments TeleTrade Comments 02.03.2023 09:00
AUD/USD takes offers to extend pullback from late February. Previous resistance line, weekly horizontal support can challenge Aussie pair bears amid descending RSI towards oversold territory. U-turn from immediate upside hurdle, bearish MACD signals keep sellers hopeful; bulls need validation from 200-HMA. AUD/USD holds lower grounds near the intraday bottom surrounding 0.6730, reversing the previous day’s gains heading into Thursday’s European session. In doing so, the Aussie pair extends the previous day’s pullback from the February 23 swing low amid bearish MACD signals. Adding strength to the downside bias is the lower-high formation since late Wednesday, as well as the quote’s sustained trading below the 200-Hour Moving Average (HMA). Amid these plays, the AUD/USD pair is all set for further downside. However, a convergence of the previous resistance line from February 20 and a horizontal area comprising the lows marked so far during the current week, around the 0.6700 round figure, appears a tough nut to crack for the sellers. Not only the stated support confluence but the RSI (14) line also challenges the Aussie pair’s further downside by speedily dropping towards the oversold territory. In a case where the AUD/USD remains bearish past 0.6700, a quick fall toward December 2022 low surrounding 0.6630 can’t be ruled out. On the flip side, a successful break of the aforementioned horizontal resistance near 0.6785 guards the AUD/USD pair’s immediate upside. Following that, the 200-HMA level of near 0.6800 may act as the last defense of the bears. AUD/USD: Hourly chart Trend: Limited downside expected
InstaForex's Ralph Shedler talks Euro against Japanese yen

The Cautious Market Mood Could Cap The Upside For The USD/JPY Pair

TeleTrade Comments TeleTrade Comments 02.03.2023 09:14
USD/JPY catches fresh bids and climbs back closer to the YTD peak amid resurgent USD demand. Hawkish Fed expectations push the US bond yields higher and provide a fresh lift to the Greenback. The divergent Fed-BoJ policy outlook favours bullish traders and supports prospects for further gains. The USD/JPY pair is seen building on the overnight late rebound from the 135.25 area and steadily climbs back closer to the YTD peak during the early European session on Thursday. The pair currently trades around the 136.70 region, with bulls now awaiting a sustained strength beyond the 100-day Simple Moving Average (SMA) before placing fresh bets. The US Dollar regains positive traction and reverses a part of the previous day's sharp retracement slide from a multi-week high amid a further rise in the US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond climbs further beyond the 4.0% threshold, hitting its highest level since November 2022, and remains well supported by expectations for further policy tightening by the Fed. The markets seem convinced that the US central bank will keep interest rates higher for longer than previously estimated in the wake of stubbornly high inflation. The bets were lifted by the overnight hawkish remarks by Atlanta Fed President Raphael Bostic, reiterating the view that the policy rate needs to rise to the 5.00%-5.25% range and remain at that level well into 2024. Adding to this, Minneapolis Fed President Neel Kashkari reiterated that inflation in the US is still very high and that their job is to bring it down. Karikari also noted that the risk of under-tightening is greater than the risk of over-tightening.  Furthermore, the US ISM Manufacturing Index showed that the Prices Paid sub-component accelerated to 51.3 in February from 44.5. The Japanese Yen (JPY), on the other hand, is undermined by the recent dovish remarks by the incoming BoJ Governor Kazuo Ueda and Deputy Governor nominee Shinichi Uchida, stressing the need to maintain the ultra-loose monetary policy.  That said, the cautious market mood - amid looming recession risks - could benefit the JPY's safe-haven status and cap the upside for the USD/JPY pair. Hence, it will be prudent to wait for a convincing breakout through the 100-day SMA barrier before positioning for an extension of the recent appreciating move witnessed over the past month or so. Market participants now look forward to the release of the usual Weekly Initial Jobless Claims data from the US, due later during the early North American session. This, along with the US bond yields, will drive the USD demand and provide some impetus to the USD/JPY pair. Traders will further take cues from the broader risk sentiment to grab short-term opportunities ahead of speeches by influential FOMC members during the Asian session on Friday.
InstaForex's Irina Manzenko talks British pound amid latest events

Sterling Was Thrown Overboard On Dovish Comments From Bank Of England Governor Bailey

Saxo Bank Saxo Bank 02.03.2023 09:36
Summary:  US equity futures are edging lower overnight and are below the critical support at the 200-day moving average that has been tested of late, setting up a compelling test of animal spirits in coming sessions. The treasury market is providing fresh headwinds as the US 10-year treasury yield edged above 4.00% for the first time since November. Sterling was thrown overboard on dovish comments from Bank of England Governor Bailey, while the euro remains firm on hot inflation data this week. What is our trading focus? US equities (US500.I and USNAS100.I): the ‘ketchup effect’ in US bond yields is here US equities continued their slide lower with S&P 500 futures making a new lower close at 3,956, the lowest level since 20 January, and this morning the index futures have continued lower trading around the 3,932 level. This suggests investors are sceptical that China’s reopening will make a significant difference for global growth in the first half. The decline also reflects that the US 10-year yield has finally pushed above the 4% level this morning trading around 4.04% which is a significant breakout and pushing interest rates to the highest level since 10 November. With S&P 500 futures breaking below many key levels over the past couple of session the 3,900 level is definitely in play now. Hang Seng Index (HSI.I) and CSI300 (000300.I) retreated after yesterday sharp gains Hang Sang Index slid 0.8% and CSI300 inched down 0.3%. China Internet names led the decline with Alibaba (09988:xhkg) falling 4.3%. Container liners outperformed, with Orient Overseas (00316:xhkg) rising 4.4% and COSCO Shipping (01919:xhkg) up 3.8% as yesterday’s new export orders sub-index in the PMI surveys signaled an improvement in China’s export outlook. Following the Ministry of Industry and Technology ‘s statement in a press conference that China will accelerate the rolling of 6G infrastructure, A-share telcos and communication equipment makers advanced. FX: GBP blasted on Bailey comments, USD edges higher as sentiment wilts The US dollar found only hesitant support in places yesterday on a fresh surge in treasury yields, where the longer portion of the yield curve finally tested a bit higher and the 10-year Treasury benchmark yield poked above 4.00% for the first time since November. But as the focus in recent days has been on hot EU inflation data and yesterday’s hot German CPI number, EU yields have led the charge higher this week, so the euro is quite firm togethe with the greenback. The JPY remains under pressure as EURJPY returned back above 145.00. Elsewhere, sterling was thrown overboard after Bank of England Governor Bailey’s noncommittal comments on inflation risks and policy tightening (see more below). GBPUSD south of 1.2000 this morning and EURGBP has now rejected its test below 0.8800 and what semed a capitulation back into the lower range, surging to nearly 0.8900. Crude oil weighs China demand against hawkish Fed speak Crude oil prices trade near recent highs supported by the strong signal on Chinese demand recovery from upbeat PMI data. In addition, the inventory data was also bullish signalling a recovery of demand in Asia and Europe. US commercial crude oil inventories gained less than expected last week, rising only 1.2 million barrels as US exports of crude hit a record 5.6 million barrels a day last week. However, on the other hand, US ISM data and hawkish comments from Atlanta Fed Bostic continued to highlight inflation fears are here to stay and may spark some US demand concerns. WTI futures traded just below $78/barrel while Brent touched $84.50. Gold trades lower on ISM and Bostic comment Financial markets, including the investment metals, have gone back to worrying about inflation, interest rates and growth after the prices paid component of the ISM index for February rose for a second month to 51.3. In addition, the Atlanta Fed’s Bostic said rates could rise to 5.25% and stay there well into 2024. Currently the market has priced a terminal rate around 5.65%. Gold gave back some of Wednesday’s strong gains after ten-year US yields topped the closely watched 4% and the dollar drifted higher. With +3 additional 25 basis point hikes priced in, the selling pressure on gold and silver have eased but for the current recovery to attract support from technical buyers, prices as a minimum need to break $1864, and silver $22 to signal an end to the current corrections. Metals complex excited about China, but.. Copper drifted lower in Asia with profit taking emerging after futures in New York and London failed to build on yesterday’s strong China PMI-led gains. The report reignited the reopening theme but as we wrote in are recent update, the next sustained move higher is unlikely to be triggered until the second quarter or later, the timing to a certain extend depending on the economic outlook for the rest of the world and whether recession, as we believe, will be avoided. For now, the 30-cent wide downward sloping channel is providing some resistance at $4.2/lb in HG and $9115/tons in LME. US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) sold off on ISM Price Paid Index The 10-year US Treasury yield breached 4% briefly during the session and edged higher overnight following a ISM Price Paid index shooting up above the expansion/contraction threshold. The implied terminal Fed Fund rate rose above 5.5% at one point yesterday. Comments from the Fed’s Kashkari saying he is undecided between a 25bp and 50bp hike at the March FOMC and Bostic’s 5-5.25% “well into next year” remarks added fuel to the selloff. Yields on the 2-year notes rose 6bps to 4.88%, the highest level since 2007. What is going on? Mixed US ISM Manufacturing survey details – but steady message on inflation The US ISM manufacturing marginally rose to 47.7 from 47.4, coming in below expectations of 48.0. New orders lifted to 47.0 (prev. 42.5), while employment fell to 49.1 (prev. 50.6), entering contractionary territory. But the message on price pressures continued to roil markets. ISM priced paid rose back into expansionary territory to 51.3, well above the prior 44.5 and the expected 45.1, re-affirming that it may be too soon to call goods inflation disinflationary. Hawkish Fed talk brings 10-year yields to top 4% Fed member Kashkari (voter) signaled an openness for a 50bps hike at the March meeting, saying he is open to both 25bps and 50bps. Still, he emphasized that the terminal rate is more important than the size of rate hikes, where also he hinted that it could be revised higher from December. Another member Bostic (non-voter) maintained his view that the Fed policy rate needs to rise to 5.00-5.25% range, but said that the rate should be left there “until well into 2024”. 10-year Treasury yields rose above the key 4% mark for the first time since November, sending another warning signal to equities. Hot German inflation print creates further pressure for the ECB Coming on the heels of hotter than expected inflation prints in France and Spain for February, German CPI print was also hotter than expected at 9.3% YoY (vs. +9.0% exp and +9.2% prior). The message on disinflation has therefore continued to weaken, and both Fed and ECB are likewise pressured to do more on policy tightening to ensure the inflation comes back to target. The aggregate Eurozone print is out today and expectations of a softening to 8.3% from 8.6% last month may be tested. Bank of England Governor Bailey comments pound sterling The Bank of England governor preferred to keep in question whether the Bank of England will continue to tighten policy or pause here, which looks especially dovish at a time when especially ECB expectations are ratcheting higher on hot inflation data for February released this week. “I would caution against suggesting either that we are done with increasing Bank Rate, or that we will inevitably need to do more....nothing is decided.” EURGBP rallied hard from the lows since January near 0.8750 to nearly 0.8900 yesterday. Tesla shares down 5% on Investor Day presentation There was little for Elon Musk to present. No new magic around boring tunnels or making robots run or thinking. It felt empty all along and shareholders agreed sending shares down 5%. The only real new news, which had already been leaked, was the new EV manufacturing plant in Mexico which would increase Tesla’s production capacity. At the very end of the presentation Elon Musk talked about the need for a significant increase in renewable energy production without sacrificing economics, but that was as concrete as it could get this time. A more detailed plan would be announced later. For all the showman Elon Musk is, there was a lot to support the grandiose show. Earnings recap: First Solar, Salesforce, and Snowflake First Solar shares surged about 16% to its highest since 2009 after the panel maker’s backlog of orders look like they will take the second half of the decade to fill. The surging demand comes as the company is benefiting from the Inflation Reduction Act, signed last year by President Joe Biden. The software giant Salesforce gave a surprisingly upbeat forecast for the year ahead - and plans to step up share buybacks to $20bn, which is positive vs its $167bn market cap. Operating margins will be about 27% in FY24 exceeding Bloomberg consensus estimates of 22.4%. This eases pressures Salesforce faces from a group of activist investors. Salesforce shares rose 14% in post market trade, after closing at $167.35 in normal trade. Snowflake shares fell 6% in extended trading following Q1 revenue guidance fell short of expectations and the fiscal year guidance on revenue was $2.7bn vs est. $2.8bn as companies are cutting down on their cloud spending. What are we watching next? China’s “two sessions” in focus Following on from Wednesday’s stronger than expected PMI which supported the view that China’s economy is picking up steam, focus now turns to the Chinese government and what they will do to further help along a post-lockdown economic recovery. The first session of the 14th National Committee of the Chinese People's Political Consultative Conference (CPPCC) will begin on March 4 and followed up the following day by the 14th National People’s Congress (NPC. During what is collectively known as the “two sessions”, Chinese officials will release a set of social and economic development goals and various policy measures to achieve them. Earnings to watch Today’s key US earnings releases are Dell Technologies and Broadcom both reporting after the close. Analysts expect Dell to report FY23 Q3 revenue growth of -16% y/y and EBITDA of $2.39bn down from $4bn a year ago as declining technology spending is hitting technology providers such as Dell hard. Analysts expect Broadcom to report FY23 Q1 (ending 31 Jan) revenue growth of 16% y/y and EBITDA of $5.6bn up from $4.4bn a year ago. Thursday: Anheuser-Busch InBev, Argenx, Yunnan Energy New Material, Toronto-Dominion Bank, Fortum, Veolia Environment, Merck, Hapag-Lloyd, CRH, London Stock Exchange, Haleon, Flutter Entertainment, Universal Music Group, Broadcom, Costco, VMware, Marvell Technology, Dell Technologies Economic calendar highlights for today (times GMT) 1000 – Italy Feb. Preliminary CPI 1000 – Eurozone Feb. Preliminary CPI 1230 – ECB Meeting Minutes of Feb. ECB meeting 1330 – US Weekly Initial Jobless Claims 1500 – UK Bank of England Chief Economist Huw Pill to speak 1530 – EIA's Weekly Natural Gas Storage Change 1900 – US Fed’s Waller (Voter) to discuss economic outlook 2100 – New Zealand Consumer Confidence Survey 2300 – US Fed’s Kashkari (Voter 2023) to speak 2330 – Japan Tokyo Feb. CPI 0145 – China Feb. Caixin Services PMI   Source: Global Market Quick Take: Europe – March 2, 2023 | Saxo Group (home.saxo)
The USD/JPY Price Seems To Be Optimistic

The Short-Term Trend Of The USD/JPY Pair Is Bullish

Peter Jacimovic Peter Jacimovic 02.03.2023 10:48
Technical analysis: USD/JPY has been trading upside this morning and I found potential for the upside continuation of the downside correction. Key intraday support zones are set at 136.40 and 1.36.20 (Fibonacci confluences) I see potential for the upside continuation after the downside correction. Upside objective is set at 137.40 The short-term trend is bullish....   Relevance up to 09:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314661
USDX Will Try To Test And Break Below The 103.50 Level

The Rally Of US Dollar Index Will Resume

Oscar Ton Oscar Ton 02.03.2023 11:17
Technical outlook: The US dollar index rallied through the 104.45 highs intraday on Thursday after carving a low at 102.72 earlier. The index is seen to be trading close to 104.35 at this point in writing as the bears prepare to drag the price lower again. The index is also facing the past support-turned-resistance zone around 104.30-40. The instrument is looking lower from here in the near term. The US dollar index has carved a larger-degree bearish boundary between 114.70 and 100.50 in the past several weeks. The same is being retraced since early February 2023. The index is expected to reach 106.50 at least in the next few weeks. As the corrective wave unfolds, a short decline towards 102.50-105.00 cannot be ruled out. The recent boundary being worked upon is between 100.50 and 105.00 and prices are expected to drag towards 103.25 in the near term. A potential remains for a drop through 102.50, which is the Fibonacci 0.618 retracement of the above rally. The bulls would be poised to be back in control thereafter. Ideally, prices should stay above 100.50 in the medium term. Read next: Twitter Employees Are Overburdened As Elon Musk Tries To Run Twitter With Fewer Staff| FXMAG.COM Trading idea: A potential near-term drop through 102.50 and then the rally will resume. Good luck!   Relevance up to 12:00 2023-03-30 UTC+2 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314677
What are the possible scenarios for EUR/USD? Euro against US dollar - inidicator analysis

Despite The Decline Euro Remains Above 1.06, GBP/USD Is Trading Below 1.20

Kamila Szypuła Kamila Szypuła 02.03.2023 12:52
An improvement in risk sentiment after the publication of upbeat macroeconomic data from China made it difficult for the US dollar to find demand on Wednesday. USD/JPY The USD/JPY pair in the Asian session recouped losses and rose towards 136.80. At the beginning of the European session, the yen dropped significantly to 136.2540, but quickly began to recover. At the time of writing, USD/JPY is trading at 136.7450 So far, the Japanese yen has been stable this week in a period where the US dollar has weakened significantly against most of its G-10 peers. The yen's lack of strength may reflect the belief that the new Governor of the Bank of Japan (BoJ) Kazuo Ueda will maintain the very loose monetary policy of his predecessor. EUR/USD The euro pair is in a downtrend. It started the day high above 1.0670 but dropped to trade around 1.0620. The euro fell against the dollar on Thursday after data showed inflation in the euro zone was not as high as investors had feared based on national readings in recent days. Eurozone inflation eased to 8.5% in February from 8.6% a month earlier on lower energy prices. The core inflation rate in the Euro Area rose for a third successive month hitting a fresh record high of 5.6% in February. The core CPI which excludes prices of energy, food, alcohol and tobacco went up 0.8%. The core number reinforces the idea that without decreases in energy prices inflation remains sticky and adding credence to the recent hawkish rhetoric from ECB policymakers. Investors now see the ECB's 2.5% deposit rate rising by a combined 100 basis points in March and May, then to around 4.1% at the turn of the year. Read next: Tesla Intends To Cut Assembly Costs, The White House Released The National Cyber Strategy | FXMAG.COM GBP/USD The pound pair against the euro is down today. GBP/USD traded below 1.20 again. GBP/USD extended its decline and dropped below 1.2000 on Thursday after failing to capitalize on Wednesday's US dollar (USD) weakness. The couple looks delicate. The British pound loses against the US dollar this Thursday as the dollar finds some support. Last night, Fed officials (Kashkari and Bostic) maintained their hawkish stance. From the UK's perspective, the Brexit deal between the Prime Minister and the EU. Trade disputes with Northern Ireland have now been resolved, but the most surprising aspect of the deal was the favorable reception from some senior Brexiteers who praised the new concessions. While this is positive for the overall UK economy, the currency remains driven by central bank policy. The Brexit deal could bring short-term relief to the pound against the USD. AUD/USD The Australian movement is similar to its European counterparts. The AUD/USD pair remains above 0.67 despite a significant drop from 0.6767 to 0.6730. Source: finance.yahoo.com, investing.com
Japanese yen increased by over 0.5% on Friday. Japanese monetary policy may change soon

The Yen Is Currently Unable To Withstand The Greenback

InstaForex Analysis InstaForex Analysis 02.03.2023 14:06
The dollar-yen pair continues to besiege the 137th figure, despite the general weakening of the greenback. The Japanese currency is under pressure from the dovish rhetoric of the Bank of Japan, whose leadership will change next month. A few months ago, many traders and currency strategists pinned their hopes on Haruhiko Kuroda's successor, especially as the favorites of the pre-election race were economists with hawkish views. But the choice of the Japanese authorities fell on Kazuo Ueda, who instantly dashed the hopes of the hawks. Judging by his statements (and those of his future deputies), the Bank of Japan will follow the course set by Kuroda, at least for the foreseeable future. The dollar is in disgrace, but the yen looks even weaker The USD/JPY pair has been trading in a 136.00–136.90 range this week, with an apparent upward bias. During the last three days, sellers tried to pull the pair down to the base of the 136th figure, but in each case buyers took the initiative and returned the pair to the 137th price level. On the one hand, there is a common flat, a sideways price movement. But on the other hand, such price fluctuations took place at the background of the general weakening of the dollar. Several macroeconomic reports came out in the "red zone" in the USA, and risk appetite increased in the market after strong data from China (PMIs surprised traders with considerable growth). While in the U.S., the ISM manufacturing PMI was in the negative territory, only rising to 47.7 (vs. the forecast of 48.5). In particular, the employment index declined to 49.1 (from the previous reading of 50.6). The day before this release, the U.S. consumer confidence indicator was also in the red zone, coming out at 102.9 (the downward dynamic has been recorded for the second month in a row). The Richmond Fed Manufacturing Index was also disappointing, falling to -16 points. Nevertheless, despite the greenback's poor condition, buyers of USD/JPY kept the pair from plunging and returned it to the 137th figure. This shows that the yen looks unattractive in the eyes of the traders, even against the limping dollar. Such "unattractiveness" is primarily due to the rhetoric of Ueda and his future deputies, who will head the central bank in April. Inflation rises, rhetoric stays the same At the end of last month, key data on inflation growth in Japan were released. The general consumer price index in January rose by 4.3%, the strongest growth rate of the indicator since December 1981. The core CPI, which does not include fresh food but includes energy prices, also hit a 40-year high. Almost all components of the report came out in the green zone, exceeding the forecast levels. Inflation has been above the 2% target of the Bank of Japan for the past ten months. Kazuo Ueda commented on this release "in the spirit of Haruhiko Kuroda." He said that he intends to continue a large-scale program of monetary policy easing of the central bank. In his view, the rise in consumer inflation is mainly due to higher import prices, not higher demand. "Therefore, the Bank of Japan should maintain ultra-loose monetary policy," Ueda stressed. He expressed confidence that price growth factors would "probably slow down soon" and inflation would fall below 2% by the end of this year. The new governor of the Bank of Japan also stressed that "at the moment," the advantages of the current monetary policy outweigh its disadvantages. Ueda's future deputies voiced the same position. To be fair, Kuroda's successor hypothetically allowed monetary policy to be calibrated, but he said the necessary adjustments "would vary depending on changes in the economy." At the same time, he added that it is too early to talk about how and when the central bank will change its policy. This dovish rhetoric has allowed USD/JPY buyers to ignore the weakening greenback as the pair continues to show an upward mood. Conclusions The current fundamental background for the USD/JPY pair contributes to the development of the upward trend. The yen is currently unable to withstand the greenback, even in the face of a decline in the U.S. dollar index. The technical indicator also speaks about the attractiveness of longs. The pair on the daily chart is trading between the middle and upper lines of the Bollinger Bands indicator, which indicates the priority of the upward movement. In addition, the price is above all lines of the Ichimoku indicator, including above the Kumo cloud. The nearest upward target is 137.00 (upper line of the Bollinger Bands indicator on the 4-hour chart). The main target is slightly higher, at 137.70, which is also the upper line of the Bollinger Bands indicator, but already on the D1 timeframe.   Relevance up to 11:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336551
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

The Downtrend Of The UD/JPY Pair Will Be Fueled Even More

InstaForex Analysis InstaForex Analysis 03.03.2023 08:00
The yen is moving up so far, according to our main scenario, to the 137.75 target level. But the technical pressure on the pair is increasing every day. The signal line of the Marlin oscillator is being pushed down, against the rising price. The pair might not reach the 137.75 target. The pair can continue to rise if the dollar continues a massive attack in all markets, including commodities, then the oscillator's decline will transform before it rises further. And then the price could overcome the target level of 137.75 and the rally will continue to reach 138.90 (July 21, 2022 high). There is a double divergence on the four-hour chart. If the price goes under the MACD line, below the 136.28 mark, it will also correspond to the move of the Marlin oscillator into the downtrend area. The downtrend will be fueled even more, once the price hits the 134.00 target. A full-fledged growth will start once the price surpasses yesterday's high (137.10).   Relevance up to 03:00 2023-03-04 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336626
InstaForex's Irina Manzenko talks British pound amid latest events

It Is Unlikely For The GBP/USD Price To Climb Above 1.2012

InstaForex Analysis InstaForex Analysis 03.03.2023 08:04
The pound fell by 80 pips yesterday. There was no attack on the support at 1.1914. Perhaps, the pound is preparing to overcome it with a run-up, which speaks about the probable sharp declines on the daily chart in the near future. However, the Marlin oscillator, as a leading indicator, declines slowly, so the decline may have a more complex structure. If the situation develops according to this favorable scenario, the target is 1.1737. On the four-hour chart, the price and the oscillator turn slightly upwards. These reversal movements occur below the indicator lines and in the area of negative values at the oscillator, and it is a local corrective coordinated movement. If there is no obstruction on the decline, then it is unlikely for the price to climb above 1.2012 - above the MACD line on the four-hour chart. If the price settles above this line, then the chaotic sideways chaotic movement in a wide range will persist. Relevance up to 03:00 2023-03-04 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336628
Forex: Euro against US dollar - technical analysis - May 18th

The EUR/USD Price Is Moving Away From Yesterday's Low

InstaForex Analysis InstaForex Analysis 03.03.2023 08:07
Yesterday, the euro returned to the support level at 1.0595. The lower shadow reached Tuesday's closing level and Wednesday's opening level - at that time the level was stable. The signal for further downward movement, to the target range of 1.0443/70, will be when the price surpasses yesterday's low (1.0577). The Marlin oscillator in the area of the downtrend, the downward movement is developing again. On the four-hour chart, the MACD indicator line held back the price from falling even deeper. Also, the price could not overcome the support of the balance indicator line. The price moving away from yesterday's low means that the price has also overcome these indicator lines. The Marlin oscillator struggles with the resistance of its own zero line. We are waiting for the price to fall according to the main scenario. The alternative scenario will come into effect once the price climbs above 1.0660 and settles there Relevance up to 03:00 2023-03-04 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336630
Rates Spark: Crunch time

The Minor Correction Of The EUR/USD Pair Became Slightly Deeper

Torben Melsted Torben Melsted 03.03.2023 08:18
The minor correction, we were looking for from 1.0691, became slightly deeper than we expected, but short-term important support at 1.0565 has held firm and should continue to do so as EUR/USD moves higher through minor resistance at 1.0616 and more importantly through resistance at 1.0677 that calls for a continuation higher towards 1.1108 and likely closer to 1.1400. Only an unexpected break below the short-term key support at 1.0565 will confirm that the corrective decline from 1.1033 still is in motion for a final dip closer to 1.0490 to complete wave 4, before moving higher in wave 5.     Relevance up to 06:00 2023-03-06 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314772
Would Federal Reserve (Fed) go for two more rate hikes this year? Non-voting Bullard say he would back such variant

The US Dollar Gained Broadly Against Major Currencies

Saxo Bank Saxo Bank 03.03.2023 08:35
Summary:  Despite U.S. bond yields continuing to climb and the 10-year going above 4% in yield, U.S. stocks managed to rebound nearly 1% on Fed Bostic comments. Hong Kong and China stocks slid and gave back some of the gains from the previous session in the absence of notable headlines ahead of the “two sessions” meeting starting this weekend. The US dollar gained broadly against major currencies. Crude oil continued to climb with WTI crude finishing Thursday at USD78.2.   What’s happening in markets? Nasdaq 100 and S&P 500 rebounded on Fedspeak The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) clawed back early losses after dovish comments were made by the Fed’s Raphael Bostic  - seeing the indices gain 0.9% and 0.8% respectively. All sectors in the S&P 500 except consumer discretionary and financial advanced. Salesforce (CRM:xnys) shares rose 11.5% on a Q4 earnings beat and upbeat guidance – making it the top gainer in the S&P500. Kroger (KR:xnys) rose 5.4% after the grocery chain reported sales and earnings beat. Tesla (TSLA:xnas) fell 5.9% as investors were somewhat disappointed with the EV giant’s Investor Day held on the prior day. US Treasury curve bear steepened, 10-year yield at 4.06% US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) sold off across the curve in the morning following an upward revision of Q4 unit labour costs to 3.2% from the previously reported 1.1% and initial jobless claims continued to come in below 200K. After Atlanta Fed Bostic’s comments in favour of a 25bp hike at the March meeting and the Fed could pause by mid to late summer saw yields on the 2-year paring much of the loss from an intra-day high yield of 4.94% to finish at 4.89%. Yields on the belly of the curve however remained 6bps higher by the time of closing, with the 5-year yield at 4.31% and 10-year at 4.06%. The Treasury Department announced the auction of USD40 billion of 3-year notes, USD32 billion of 10-year notes, and USD18 billion of 30-year bonds next week. Hong Kong’s Hang Seng Index and China’s CSI300 retreated after yesterday’s sharp gains Hang Sang Index (HSI.I) dropped 0.9% and CSI300 (000300.I) slid 0.2% on Thursday after rising sharply the day before. China Internet names led the decline with Alibaba (09988:xhkg) falling 4.7% without notable news. Bilibili (09626:xhkg) plunged 7.8%.  After the Hong Kong market close, the online entertainment platform reported Q4 earnings beating the consensus estimate. Nio (09866:xhkg) tumbled 13.2% on a Q4 margin miss and a weaker-than-expected Q1 2023 guidance. Container liners outperformed, with Orient Overseas (00316:xhkg) rising 6.7% and COSCO Shipping (01919:xhkg) up 4.1% on an improved outlook of China’s exports. In A-shares, telcos and communication equipment makers advanced, following the news that the Ministry of Industry and Technology said that China will accelerate the rolling of 6G infrastructure. Australian equities (ASXSP200.I) trade lower for the fourth week  - markets prices out rate cuts – PMIs rise   So far this week - Monday to Friday the market is trading lower - marking its fourth straight week of losses. It comes as the Australian share market prices out rate cuts this year – and looks ahead to the RBA interest rates decision and commentary next week - with another 25bp hike expected. Today - hotter Australian and manufacturing prints showed PMIs rose back to expansionary phase, pushing Australian bond yields higher, up 6 bps to 3.92% - that’s near YTD highs of 4%, which is a cautionary signal given this is a better return than the average yield for the Australian share market.    FX: GBP edges below 1.2000 on dovish Bailey The US dollar was broadly in gains on Thursday as yields continued to surge higher despite supposedly dovish comments from Fed member Bostic. SEK was the underperformer on the G10 board amid risks of a deepening recession in Sweden. GBPUSD continued to tumble further below the 1.20 handle after dovish comments from BOE governor Bailey this week attempting to engineer a pause in market expectations. EURUSD also gave up some of its post-regional CPI gains to inch below 1.06. AUDUSD still in close sights of 0.67 as risk sentiment deteriorates while pickup in metals prices remains unconvincing for now. Crude oil volatility continues Oil fluctuated with traders weighing up a revival in demand from China, vied with inflation fears and OPEC boosting supplies. OPEC increased supplies by 120,000 b/d to 29.24 million a day in February – with Nigeria accounting for two-thirds of the increase - with its output hitting a one-year high. Meanwhile Russian seaborne diesel exports stranded at sea hit new records. This comes all while nations such as Turkey are trimming purchases of Russian crude. What to consider? Fed officials hinting at a higher dot plot The biggest headlines today are referring to Fed member Bostic’s (non-voter) comments as dovish, while he said he is firmly in favour of a 25bps hike path (to reduce the possibility of a hard outcome) and even said we could be in a position to pause by mid-to-late summer which appears to be exactly in-line with current market expectations. If his comments suggest 25bps rate hikes each at the March, May and June meetings, we still may end up in the 5.25-5.50% terminal rate which is higher than what the December dot plot suggested. Waller (voter) also hinted at an upwards shift in the dot plot, more clearly so, saying that Fed may need to raise rates beyond December's central tendency view of 5.1-5.4% if the incoming job and inflation data does not pull back from strong readings for January. US labor market strength sustains, focus shifting to ISM services US initial jobless claims fell by 2k to 190k last week from 192k prior and 195k expected, continuing to signal a tight labor market. Unit labor costs climbed an annualized 3.2% in the fourth quarter from the initial 1.1% read, well above expectations for a rise to 1.6%. Increased labor costs keep concerns of a wage-price spiral alive, and will likely keep the Fed on its toes in tightening policy. ISM services for February will be on watch later today, and is expected to ease to 54.5 from a big jump to 55.2 last month, but still remain comfortably in expansion. Attention will also be on the prices paid component after a similar component from the manufacturing print this week created jitters and services prices are likely to be more sticky. Worrying inflation prints in the Eurozone Yesterday, the eurozone core inflation rose to 5.60% year-over-year in February with both core goods (6.8%) and services (4.8%) reaching new record highs. This is much higher than expected (5.3%). We pay more attention to core inflation as it can show how entrenched inflation is. As a matter of that, it appears the inflation headache will remain an issue for most of the year. All the country prints which were released earlier this week came in above expectations: Germany 9.3% vs 9.0% exp. France 7.2% vs 7.0% exp. Spain 6.1% vs 5.7% exp. In these circumstances, talks about a potential monetary policy pause are ill-timed. From a monetary policy perspective, we think the ECB is unlikely to slow the pace of tightening until we see the first signs of underlying inflation peaking. Expect at least two other 50 basis point hikes in March and in May (there is no meeting in April). The market consensus forecasts that another 25 basis point hike could happen in June. It will depend on the evolution of inflation, of course. China and Australian trade relations are improving – adding to our optimist view that the commodity bull run could resume in Q2 China and Australia resumed diplomatic and economic discussions to stabilize and improve bilateral relations. It comes as China’s Foreign Minister Qin Gang met with counterpart Penny Wong at the G-20 summit in India. This is supporting commodity prices today – with the Iron Ore (SCOA) price trading higher for the fourth session following on from stronger-than-expected Chinese manufacturing data - showing overall Chinese orders are back at 2017 levels. Despite this the Aussie dollar vs the USD (AUDUSD) is little changed on the day and week at 0.6729 after losing 0.5% on Thursday. Downside is still in play with the Aussie trading below the d Qantas hires 8,500 workers – underscoring the aviation industry’s growth trajectory Qantas Airways (QAN) plans to hire 8,500 more workers in the next decade - which is about the same number it cut during in the pandemic. This highlights the aviation’s growth trajectory less than a year after the crisis. The hires include pilots, cabin crew and airport staff – with about 300 new aircraft arriving in the next 10 years – and Qantas also planning to open an engineering academy to help maintain its feet. For more on the travel sector, refer to Saxo’s Asia Pacific Travel equity theme basket.  We are in the early inning of the comeback of European equities European equities have previously outperformed US equities over long periods of time, but the relentless bull market in US technology stocks over the past 13 years has erased our memory of European equities being an interesting market. But since October last year, European equities have significantly outperformed US equities and clients are most interested than ever. In an article yesterday, Peter Garnry, Saxo’s Head of Equity Strategy, provides an overview of how Europe's equity market is constructed and how it differs from the US equities, and also why they are more interesting for investors amid the comeback of the physical world. His three main points are: Europe lost the digital technology race to the US with a 13-year-long period of significant underperformance, but since October 2022 things have turned around and maybe we are in the early inning of Europe’s comeback. European equities have 20 super-sectors and the diversification of European equities is much better compared to US equities. European equities are cheaper relative to US equities and they have recently improved their operating margins while US equities have seen a significant margin compression. China’s Caixin Services PMI is expected to rise to 54.5 Caixin Services PMI is expected to confirm the continuous expansion of activities in the services sector as indicated in the official NBS PMI survey. According to Bloomberg, Caixin Services PMI is expected to rise to 54.5 in February from 52.9 in January. China’s “Two Sessions” meeting commences this weekend China is holding the annual meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference, which together are known as the “Two Sessions, this weekend. Premier Li will deliver the Government Work Report on 5 March, in which the focus will be on the GDP growth target for 2023. The weighted average of provincial GDP targets released was around 5.6% and economists are expecting a national target of between 5% and 5.5% for 2023. Investors will also pay attention to the fiscal deficit target and quota for bond financing. In addition, investors will pay close attention to the leadership reshuffle at the State Council and other top government bodies. It is widely expected that Li Qiang will be the new Premier and He Lifeng will be one of the Vice Premiers and given the portfolio of economic and financial affairs. Japan’s Tokyo CPI for February hinting at sticky prices Japan’s Tokyo-CPI for February came in at 3.4% YoY for the headline, softer than last month’s 4.4% but still hotter than the 3.3% expected. The slower print is partially a result of PM Kishida’s latest stimulus announcement to support utilities prices which included a 20% discount on household electricity rates. Core CPI at 3.3% YoY matched estimates while the core-core measure (ex-fresh food and energy) was a notch higher at 3.2% YoY vs. 3.1% expected. Inflation continues to be sticky and above the BOJ’s 2% target although the incoming Governor Ueda is unlikely to rush into any monetary policy moves at this point. Bilibili earnings beat, non-GAAP net loss narrowed as operating margin improved Q4 Revenues in Bilibili rose 6% Y/Y to RMB6.14 billion, slightly higher than the RMB6.12 billion expected. Non-GAAP net loss came in at RMB1.31 billion, better than the consensus of RMB 1.43 billion and 20.6% smaller than in Q4 last year. Mobile games revenue falling 12% Y/Y and advertisement revenue falling 5% Y/Y  were weaker than expected. Revenues from E-Commerce and others grew 13% Y/Y and those from Value-added Services rose 24%, both above consensus estimates. The number of monthly active users increased 20% Y/Y to 326 million. India’s Adani Group gets foreign interest as prices drop After a drop of over $100 billion in market value, Adani group stocks got a respite with US boutique investment firm GQG Partners purchasing shares worth $1.87 billion in four Adani group companies. The deal shows investor interest may be returning to Adani after record drops in its share prices, and any further interest from foreign investors could potentially put a floor to near-term pressures for the conglomerate. This week, the group told bondholders it had secured a $3bn credit line from investors including a sovereign wealth fund.   For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Global Market Quick Take: Asia – March 3, 2023 | Saxo Group (home.saxo)
Caixin Services PMI Data Has Helped The Chinese Yuan (CNH)

Caixin Services PMI Data Has Helped The Chinese Yuan (CNH)

TeleTrade Comments TeleTrade Comments 03.03.2023 08:41
USD/CNH has refreshed its day low near 6.8900 as Caixin Services PMI performed better than anticipations. The US Dollar Index (DXY) is struggling to sustain above the immediate support of 104.80. A bear cross, represented by the 20-and 50-period EMAs at 6.9144, adds to the downside filters. The USD/CNH pair has sensed immense selling pressure and has refreshed its day low at 6.8900 in the Asian session. The Chinese Yuan has been strengthened after the release of the solid Caixin Services PMI data. The economic data has landed at 55.0, higher than the consensus of 50.5 and the former release of 52.9. Solid Services PMI figures after strong Manufacturing PMI released on Wednesday indicating an all-round recovery in the Chinese economy after dismantling pandemic controls. The US Dollar Index (DXY) is struggling to sustain above the immediate support of 104.80. S&P500 futures are continuously adding losses, fading the impact of Thursday’s recovery and portraying a sheer drop in investors’ risk appetite. USD/CNH sensed selling pressure after failing to sustain above the 50% Fibonacci retracement (plotted from February 27 high around 6.9900 to March 01 low at 6.8634) at 6.9260. The asset is declining toward the horizontal support placed from February 20 low around 6.8545. A bear cross, represented by the 20-and 50-period EMAs at 6.9144, adds to the downside filters. Meanwhile, the Relative Strength Index (RSI) (14) is on the verge of drifting below 40.00. A slippage below the same will trigger the downside momentum. Going forward, a slippage below the intraday low at 6.8900 will drag the asset toward the horizontal support placed from February 20 low around 6.8545 followed by February 14 low at 6.8056. Alternatively, an upside move above the 61.8% Fibo retracement around 6.9400 will drive the asset toward February 27 high around 6.9900. A breach of the latter will expose the asset to psychological resistance at 7.0000. USD/CNH hourly chart  
The USD/INR Traders Seem To Witness Additional Downside Movement

The USD/INR Traders Seem To Witness Additional Downside Movement

TeleTrade Comments TeleTrade Comments 03.03.2023 08:44
USD/INR prints five-week losing streak as bears attack the lowest level in nearly a month. Hopes of robust economic recovery in India, hawkish RBI bets underpin INR strength. Fresh chatters surrounding Fed’s policy pivot weigh on prices. US ISM Services PMI should be eyed for intraday directions. USD/INR takes offers to refresh multi-day low near 82.20 amid a broad US Dollar pullback during early Friday. In doing so, the Indian Rupee (INR) pair drops to the lowest levels since February 09 during the five-day downtrend. US Dollar Index (DXY) traces US Treasury bond yields to print mild losses around 104.90 by the press time. That said, the 10-year coupons drop two basis points to 4.05% whereas its two-year counterpart seesaws around 4.89% by the press time. It should be observed that the US 10-year Treasury bond yields rose to a fresh high since early November 2022 while piercing the 4.0% threshold whereas the two-year counterpart rallied to the highest levels since 2007 to 4.94% on Thursday. The latest pullback in the US Treasury bond yields and the US Dollar could be linked to the fresh fears of the Federal Reserve (Fed) policy pivot. Also underpinning the USD/INR weakness could be the cautious optimism in Asia, mainly due to the strong China data. However, the anxiety ahead of the US ISM Services PMI for February seems to probe the pair sellers of late. At home, hopes of witnessing a strong recovery of the Indian economy, despite marking downbeat Gross Domestic Product (GDP) figures for the fiscal third quarter (Q3) figures published in the last week. Also, hawkish bias surrounding the Reserve Bank of India’s (RBI) next move seems to exert downside pressure on the USD/INR pair. Amid these plays, the USD/INR traders seem to witness additional downside unless hitting the 100-DMA support near 82.15. However, upbeat prints of the US ISM Services PMI, expected at 54.5 versus 55.2 prior readings, could propel the pair prices. Also read: ISM Services PMI Preview: Strong figure set to catapult US Dollar to new highs Technical analysis Despite the latest fall, a daily closing below the 100-DMA, around 82.15 by the press time, becomes necessary for the USD/INR bears to retake control. It’s worth noting that the RSI retreats on the daily chart and the MACD also prints bearish signals, which in turn favor the Indian Rupee pair’s latest weakness.
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

The US-China Tension At The Group Of 20 Nations (G20) Meeting Checks The Aussie Pair’s Upside Momentum

TeleTrade Comments TeleTrade Comments 03.03.2023 08:47
AUD/USD grinds near intraday high, defends the first weekly gains in three. Bulls keep the reins amid hopes of US-China peace on trade, upbeat China data and mixed Aussie statistics. Fresh talks of Fed’s pivot trigger retreat in yields and propel Aussie pair. Markets remain dicey ahead of US ISM Services PMI, limiting AUD/USD moves. AUD/USD appears well-set to snap a two-week downtrend as it seesaws around the intraday top of 0.6752 during early Friday in Europe. In doing so, the Aussie pair cheers the US Dollar’s pullback amid risk-positive headlines about China. However, the cautious mood ahead of the US ISM Services PMI and mixed Aussie data, not to forget chatters of the Reserve Bank of Australia’s (RBA) policy pivot, seems to probe the bullish bias. Talks surrounding the resumption of the Sino-American trade dialogue seemed to have triggered the market’s optimism of late, which appears to favor the AUD/USD buyers. On the same line could be the hopes for an easy monetary policy from the People’s Bank of China (PBOC). However, the US-China tension at the Group of 20 Nations (G20) meeting, amid the former’s push for sanctions on countries having strong ties with Russia and aiding Moscow in the war with Ukraine, pokes the optimism and checks the Aussie pair’s upside momentum. It should be noted that the firmer China data and mixed Aussie figures, as well as the unimpressive US statistics, also challenge the pair traders. That said, China’s Caixin Services PMI traced the latest activity data for the dragon nation while printing 55.00 figures for February, versus 50.0 market forecasts and 52.9 previous readings. At home, Australia’s S&P Global PMIs for February came in firmer and help the AUD/USD buyers to keep the reins. Though, downbeat prints of Australia Home Loans and Investment Lending for Homes, for January, seem to cap the quote of late. On the other hand, the US Jobless Claims dropped to 190K during the week ended on February 24 versus 195K market forecasts and 192K prior. Further, Nonfarm Productivity for the fourth quarter (Q4) eased to 1.7% from 3.0% prior and 2.6% market forecasts while the Unit Labor Costs jumped 3.6% versus 1.6% analysts’ estimations and 1.1% previous readings. Elsewhere, Thursday’s statements from Federal Reserve Bank of Atlanta President Raphael Bostic renewed concerns about the Fed’s policy pivot as the decision-maker said, “The central bank could be in a position to pause the current tightening cycle by mid to late summer.” It should be observed, however, that Boston Fed President Susan Collins kept supporting the higher rates for longer as she said, “More rate hikes are required to bring inflation back in control.” Against this backdrop, the 10-year coupons drop two basis points to 4.05% while its two-year counterpart seesaws around 4.89% by the press time. Further, S&P 500 Futures struggle for clear directions after mild losses. The latest Reuters poll suggesting a peak in the RBA rate during the second quarter (Q2) of 2023 joins the polls suggesting the Fed’s policy pivot to challenge the AUD/USD traders. To overcome the indecision, today’s US ISM Services PMI, expected at 54.5 versus 55.2 prior readings, will be crucial ahead of the next week’s key events. Technical analysis AUD/USD portrays a one-month-old falling wedge bullish chart formation. However, a clear break of the 0.6775 hurdle becomes necessary for the buyers to retake control.
Japanese yen increased by over 0.5% on Friday. Japanese monetary policy may change soon

USD/JPY Pair Is Aiming To Recapture The Immediate Resistance Of 137.00

TeleTrade Comments TeleTrade Comments 03.03.2023 08:50
USD/JPY is looking to recapture the 137.00 resistance despite the risk appetite having improved. Modest dovish commentary from Federal Reserve Waller has triggered volatility in the USD Index. Bank of Japan might infuse more liquidity to fade the impact of a fresh decline in the Tokyo inflation. USD/JPY is struggling to shift its auction above the 38.2% Fibo retracement plotted at 136.85. USD/JPY is juggling in a limited range around 136.60 in the Asian session. The asset has rebounded from 136.50 and is aiming to recapture the immediate resistance of 137.00 as the Tokyo Inflation has softened dramatically for the first time after a nine-month period escalation. Lower food and energy prices have trimmed the headline Consumer Price Index (CPI) while the core inflation that strips off the impact of food and oil steadily improved. The US Dollar Index (DXY) is on the verge of delivering a downside break below 104.80 amid an absence of recovery signals. The downside pressure in the USD Index has built amid modest dovish commentary from Federal Reserve (Fed) Governor Christopher Waller. Fed Waller cited February’s inflation recovery as a one-time blip and the price pressures will resume their downtrend from next month. S&P500 futures have recovered the majority of losses recorded in the Asian session, portraying a decent recovery in the risk appetite of the market participants. The demand for US government bonds has recovered marginally amid ease in the risk aversion theme. This has pushed the 10-year US Treasury yields below 4.05%. Upbeat US Services PMI could fuel hawkish Fed bets Anxiety among the market participants is gradually escalating ahead of the release of the United States Institute of Supply Management (ISM) Services PMI data. The economic data is seen lower at 54.5 from the former release of 55.2. The New Orders Index which conveys the forward demand is expected to decline to 58.5 from the prior figure of 60.4. Earlier, the US Manufacturing PMI displayed a fourth-time contraction, however, the New Orders Index was exceptionally higher. A surprise rise in the Services New Orders Index along with the already upbeat Manufacturing demand outlook will clear that the overall forward demand is in an expansionary mode and could propel the Consumer Price Index (CPI), which will bolster expectations of more rates from the Federal Reserve. Atlanta Fed Bank President Raphael Bostic said on Thursday that the central bank could be in a position to pause the current tightening cycle by mid-to-late summer. He favors a 25 basis points (bps) rate hike in March but has left room opened for more hawkish rate outlook if inflation and labor market data come in stronger. Tokyo Inflation surprisingly decline Bank of Japan (BoJ) policymakers are spending sleepless nights, designing strategies for achieving a stable 2% inflation. The central bank is infusing stimulus into the Japanese economy to fuel wages and domestic demand. Japan’s inflation was fueling constantly, however, a recent decline has alarmed the Bank of Japan policymakers. The annual headline CPI has dropped to 3.4% from the consensus of 4.1% and the prior release of 4.4%. Contrary to that, the core CPI that excludes the impact of energy and food prices have improved to 3.2% from 3.1% as expected and the former release of 3.0%. It seems like the inflationary pressures have been exceptionally battered by the recent fall in food and energy prices. Reuters reported that “The pace of inflation slowed due in part to the government's energy subsidies to ease the pain on households from soaring electricity bills.” Commentary from Bank of Japan Governor Nominee Kazuo Ueda on a fresh decline in the Tokyo CPI will be keenly watched. Meanwhile, Japanese Prime Minister Fumio Kishida has ordered the ruling party to draft additional measures to counter price hikes, as reported by the Kyodo news agency. The agenda behind that would be supporting households to offset the impact of items such as food and energy, which are highly inflated. On the economic front, a poll by Reuters reported Japan's economy is likely to grow a tad faster than initially estimated in the fourth quarter. Revised Gross Domestic Product (GDP), scheduled for March 9, might grow at 0.8% annualized in October-December, versus an initial estimate of 0.6%. USD/JPY technical outlook USD/JPY is making efforts in overstepping the 38.2% Fibonacci retracement (placed from October 21 high at 151.94 to January 16 low at 127.22) at 136.85. A bear cross, represented by the 20-and 50-period Exponential Moving Averages (EMAs) at 133.27, adds to the downside filters. The Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates that the bullish momentum is already active.
Sharp drop in Canadian inflation suggests rates have peaked

The USD/CAD pair is currently placed around the 1.3575

TeleTrade Comments TeleTrade Comments 03.03.2023 09:02
USD/CAD meets with a fresh supply on Friday and is pressured by a combination of factors. Bullish Oil prices underpin the Loonie and act as a headwind amid a modest USD weakness. Recession fears, hawkish Fed expectations should limit losses for the USD and lend support. The USD/CAD pair attracts some sellers near the 1.3600 round-figure mark on Friday and maintains its offered tone through the early European session. The pair is currently placed around the 1.3575 region, down just over 0.10% for the day, though any meaningful downside still seems elusive. Crude Oil prices hold steady near a two-week high touched on Thursday amid the latest optimism about a strong fuel demand recovery in China - the world's top importer. This, in turn, is seen underpinning the commodity-linked Loonie, which, along with a modest US Dollar downtick, exerts some downward pressure on the USD/CAD pair. That said, growing worries that rapidly rising borrowing costs will dampen global economic growth and dent fuel demand could cap gains for Oil prices. Apart from this, hawkish Fed expectations support prospects for the emergence of some USD dip buying and should contribute to limiting losses for the major. The US CPI, PPI and the PCE Price Index released recently indicated that inflation isn't coming down quite as fast as hoped. Moreover, the incoming upbeat US macro data, including the Initial Jobless Claims on Thursday, pointed to a resilient economy. Adding to this, a slew of FOMC members backed the case for higher rate hikes to tame stubbornly high inflation and remains supportive of elevated US bond yields. In fact, the yield on the benchmark 10-year US government bond rose to its highest level since last November and the rate-sensitive two-year Treasury note shot to levels last seen in July 2007, which, in turn, favours the USD bulls. Apart from this, speculations that the Bank of Canada (BoC) could pause the policy-tightening cycle, bolstered by the softer Canadian CPI report released last week, warrant caution before placing aggressive bearish bets around the USD/CAD pair. Hence, it will be prudent to wait for strong follow-through selling before confirming that the recent upward trajectory witnessed over the past two weeks or so has run its course. Traders now look to the release of the US ISM Services PMI, due later during the early North American session. Apart from this, Oil price dynamics should provide some meaningful impetus on the last day of the week.
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

FX Daily: The ISM litmus test

ING Economics ING Economics 03.03.2023 09:08
After grim December numbers and encouraging January ones, today’s ISM services index will tell us which of the last two reads was the aberration in the series. All seems to point to December being a one-off drop, and levels above 54 will be enough to endorse the Fed’s hawkish tone and support USD. At the ECB, a 4.0% peak rate is now seemingly on the table   Join our economists and strategists for a live discussion on the upcoming US Federal Reserve, European Central Bank and Bank of England meetings. We’ll run through our expectations and what the meetings could mean for financial markets. 9 March 2023, 15:00-15:40 CET, via Microsoft Teams. REGISTER HERE USD: Consensus expects a stabilisation in ISM services Volatility, rather than trend, has been the name of the game in G10 FX this week. The dollar continues to draw benefits from the hawkish Fed narrative and good US data, but strong Chinese PMIs on Wednesday worked as a reminder that China can do the heavy lifting to restore global risk appetite. Today, all eyes will be on the US ISM service index for the month of February. Remember that a surprise drop to 49.2 (i.e. recessionary territory) in the December read was the trigger for a dovish repricing in Fed rate expectations and a weakening in the dollar. The sharp rebound to 55.2 in the January read (pretty much the same level as November) posed a serious counterargument to recession speculation and paired with strong jobs data to send expected Fed rates and the dollar higher. So, the February figures released today will essentially tell us whether the aberration in the ISM Service series was in December or January. Given the very strong correlation between levels below 50 in the index and a US recession, the impact on markets can be sizeable. Consensus is centred around a marginal decrease from 55.2 to 54.5, which would confirm speculation on recession is too premature and would continue to endorse the Fed’s hawkish rhetoric. We think this should allow further stabilisation of the dollar around current levels. A return to sub-50 levels is seen as rather unlikely and would cause a significant unwinding of hawkish Fed bets and probably the start of a new dollar downtrend. A read in the 50-53 area would probably be enough to generate some dovish repricing and should weigh on the dollar. However, as long as jobs data remain strong (payrolls are released next week), we shouldn’t see a dollar downtrend fully materialise. We’ll hear from some Fed speakers today (Lorie Logan and Michelle Bowman) after the ISM release, in the build-up to next week’s Senate and House parliamentary hearings by Fed Chair Jay Powell. Barring huge surprises on today’s ISM figures, we should continue to hear a hawkish data-dependent narrative, which should keep capping high-beta FX and supporting DXY above 104.00. Francesco Pesole EUR: 4% narrative shielding against USD strength The good news for the euro in this environment of consolidating dollar outperformance is that the hawkish repricing in the eurozone is also breaking new highs. After some reasonably hawkish ECB minutes, the ECB’s Pierre Wunsch explicitly put the 4.0% peak rate idea on the table – something markets had been flirting with for a few days. The OIS curve now fully prices in a 4.0% depo rate by October, and no rate cuts until well into 2024. This is 50bp above our economics team rate expectations, and probably looks too premature to even discuss such a large commitment now, but the interest in sounding as hawkish as reasonably possible at this stage is very clear: the latest inflation data pointed at building core price pressures and the ECB desperately needs to keep eurozone rates well supported. The fact that this is also preventing another large decline in the euro is also a welcome effect for the ECB: the two-year EUR-USD swap rate differential has started to narrow again, currently at -133bp after touching -150bp last week. Let’s see whether this 4.0% narrative gains more momentum among other ECB speakers today. Wunsch will speak again, along with Robert Holtzmann, Luis de Guindos, Bostjan Vasle and Madis Muller. The eurozone calendar includes final PMI reads for February and PPI numbers for January, but the US ISM services numbers are likely to be the only true data release to watch for EUR/USD today. Rangebound volatility in the 1.0550-1.0650 area may be the norm into next week. Francesco Pesole GBP: BoE cannot match ECB hawks EUR/GBP has stabilised after Wednesday’s big rally. The ECB’s narrative has fallen more convincingly on the hawkish side compared to the BoE’s, and yesterday’s Decision Makers Panel survey signalled that firms now expect to raise prices and wages at a slower pace, which favours a more cautious monetary policy approach. We still think the BoE will hike by 25bp on 23 March, but the market’s pricing for an additional 50bp of tightening after that seems too aggressive. Today, we’ll hear from BoE official Andrew Houser, while the UK calendar only includes the final PMI read. EUR/GBP may continue to find support beyond the 0.8900 level for now as the euro may gain more momentum in the crosses and unstable risk sentiment should hit GBP harder. Francesco Pesole CEE: Rating reviews in Hungary and the Czech Republic Today's calendar offers less interesting data such as the trade balance in Hungary and the final GDP numbers from the Czech Republic. The Czech GDP report will likely confirm the previously published flash estimate that the economy declined in the fourth quarter of last year, making it two consecutive quarters of decline, pushing the Czech economy into a mild recession. The recession has mainly been driven by a continuous strong decline in consumer spending as households are facing the burden of high energy prices on their purchasing power.  However, the main topic will come after the end of trading. We have two interesting rating reviews in the CEE region today – Moody’s in Hungary and Fitch in the Czech Republic. More interestingly, Hungary received a negative outlook and rating downgrade recently from Fitch and S&P and we expect a negative outlook from Moody’s as well today. In the Czech Republic, Fitch already downgraded the outlook last year to negative. In our view, the risk of a rating downgrade has diminished since the last review in October but is still significant.  The situation in the FX market in the CEE region remains complicated. On the one hand, the return of US dollar strength has led to a retracement of previous gains in the region, but at the same time we have seen another rise in market rates that could help FX in CEE to gain again. Of interest in this context will be the Czech koruna, whose market interest rate has jumped by 20bp at the short end of the curve versus euro rates. If the US dollar allows, we should see the koruna retest new gains today on the way to 23.30 EUR/CZK. The Hungarian forint could move back below 375 EUR/HUF, however Moody's rating review should bring the topic of EU money and the delay in accessing it back on the table which should bring the forint back to 380 EUR/HUF.  Frantisek Taborsky  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

The EUR/USD pair lasted less than a day above the moving average line

Paolo Greco Paolo Greco 03.03.2023 09:39
On Thursday, the EUR/USD currency pair decreased. If you recall, we stated in the article from yesterday that simply fixing above the moving average is not a strong signal to reverse the trend. This is merely a caution that the trend might change and that traders might gradually start to think about making reverse trades. Well, it happened this time. The euro/dollar pair lasted less than a day above the moving average line before rapidly falling below it. But it should be observed right away that yesterday's macroeconomic and fundamental backgrounds did not lend themselves particularly well to the decline of the euro. For instance, the February inflation report revealed a further reduction in the rate of price growth. Indeed, it was minimal, which is depressing in and of itself. Yet, this aspect was intended to help the euro because there is now a greater likelihood that the ECB will tighten monetary policy for a longer period. We've already mentioned that compared to the Fed, not everything is as apparent when it comes to the ECB or the Bank of England. The economy, labor market, and unemployment rates are all favorable for the Fed. The unemployment rate in the European Union, which is nearly twice as high as that in the US, stayed at 6.7% in January. The economy has already reached zero growth rates, at a pace of only 3%. The European economy will undoubtedly enter a recession, making it vulnerable to further tightening of monetary policy if we assume that the rate needs to be hiked to at least 5%, if not more. Also, it should be kept in mind that the European Union is a commonwealth of almost thirty nations; therefore, the regulator cannot carelessly raise the rate while concentrating solely on Germany or France. The situation is significantly worse in the UK because there has been no decrease in inflation there and the rate has already increased to 4%. There is no doubt that a recession will occur; the only question is when it will begin. As a result, unlike the Fed, the Bank of England cannot continuously raise the rate at any level of inflation. It turns out that the time has arrived when the European Union or Britain should no longer maintain a combative "hawkish" attitude due to excessive inflation. The ECB or the BA will most definitely not continue tightening monetary policy, prolong the cycle of rate hikes, or quicken the pace of tightening if inflation starts to grow tomorrow. As a result, the euro and the pound are losing one of their main sources of support and could continue to decline. Christine Lagarde on EU inflation. Every speech by Christine Lagarde is interesting. She claimed yesterday that there has been no consistent drop in European Union inflation, which is still at a high level. She added that she is certain that the consumer price index will fall further and that the rate will rise by another 50 points in March. A longer cycle of rate increases may be necessary, Ms. Lagarde added. Although there are numerous ways to read her statements, market participants undoubtedly anticipated hawkish rhetoric in response to the February inflation report. In our opinion, the euro currency was quite able to show growth yesterday, but this didn't happen, and in our opinion, this is a very important development. If the market stops buying when there are valid reasons to do so, this could indicate that the sentiment has shifted to one of bearishness. As a result, we continue to support the decline of the European currency. The pair is still inside the Ichimoku cloud on the 24-hour TF, but this won't last forever. The price is already getting close to the Senkou Span B line. As a result, one way or another, the pair will leave in the near future. The downward mood is still below the critical level. The pair's decline to the level of $1.02 is now completely supported by the technical picture as well. In theory, it will be extremely difficult for the European currency to count on observable growth if nothing changes in the foreseeable future. And not much can change now. The Fed will continue to increase interest rates "until the bitter end," and the ECB will respond to the situation while keeping an eye on the economy. The euro currency can quickly regain price parity if the market is fully aware of this fact. Then, new fundamental factors will determine every aspect of life. We do not anticipate a continuation of the upward trend that has been developing over the last five to six months. It is unlikely that anything will change at the Fed and ECB meetings in March. As of March 3, the euro/dollar currency pair has experienced 92 points of "average" volatility over the previous five trading days. Thus, on Friday, we anticipate the pair to move between 1.0496 and 1.0680. A new round of upward movement will be signaled by the Heiken Ashi indicator turning back to the top. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0864 Trade Suggestions: The EUR/USD pair has reconsolidated below the moving average line. Unless the Heiken Ashi indication turns up, you can maintain short positions with a target price of 1.0498. If the price is stabilized back above the moving average line, long positions can be initiated with targets of 1.0680 and 1.0742. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. The short-term trend and the current trading direction are determined by the moving average line (settings 20.0, smoothed). Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 01:00 2023-03-04 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336622
The GBP/USD Pair Is Expected The Consolidation To Continue

There Are No Solid Foundations For The Pound's Growth

Paolo Greco Paolo Greco 03.03.2023 09:42
During the past few weeks, the GBP/USD currency pair has been in "swing" mode. On the 4-hour TF, this is very evident, and on the 24-hour TF, we have a flat in a channel that is 500 points wide. As a result, the technical picture as it stands now is not the best for trading. Although there were no fundamental or macroeconomic foundations for either the dollar or the pound sterling, yesterday ended up being another failure for the pound sterling. Nonetheless, we cautioned that the pair might move rather actively in the side channel even in the absence of reports and events. The pair fell to a level of 1.1932 during the day, which is regarded as the lower limit of the side channel on the 4-hour TF. Now the pair must confidently pass through this level if traders are to anticipate further declines in the quotes. A further decline in quotes may be limited by the fact that on the 24-hour TF, the side channel's border passes a bit lower, at the level of 1.1841. The pair left the Ichimoku cloud on the 24-hour TF yesterday, but as previously stated, the decline in quotes can only continue if the level of 1.1841 is overcome. As a result, this victory has no meaning. In the very long term, the pound continues to be unchanged. It appears as a "swing" on a 4-hour TF. But keep in mind that the pair still tends to drop further because the price is taking its time returning to the channel's upper limit. At the moment, there are no solid foundations for the pound's growth. In recent months, it has increased by more than 2,000 points, while just 500 points have been lost or gained. As a result, we still support continuing the downward trend. A lot now depends on the Bank of England, among other things, and a lot of contradictory information keeps coming from behind. The Bank of England's governor has not changed his rhetoric. The next performance by Andrew Bailey took place this week, despite not even being mentioned in the news calendars. It should be emphasized that while Mr. Bailey rarely conducts interviews or delivers speeches, each of them is given more attention. Even less frequently, Mr. Bailey speaks out in a loud manner. There was no exception the day before yesterday. No one will sacrifice the economy, as the Bank of England chairman made clear to the market. And this can only indicate that the regulator is on the verge of another slowdown in the rate of tightening monetary policy. It's hard to say with certainty how many rate increases traders already factored in when purchasing the pound between September and December 2022. At that time, the pound was quickly increasing, plainly anticipating a future tightening of monetary policy. After all, it was only last fall when US inflation started to decline and rumors of a slowdown in the Fed's crucial rate hikes first emerged. This is where the pattern changed because the Bank of England was late in responding to the Fed. Right now, the situation is the exact opposite. First off, the pound has reacted pretty sharply to the two-year downward trend. Second, the market has legitimate concerns about the British regulator's willingness to continue tightening after it has already increased the key rate 10 times. All of this suggests that a downward correction is already necessary. For all currencies, the rate problem is still present and quite complicated. The fact is that nobody knows what the rate increase in the UK or the EU will be at its highest point. Both central banks have adopted the most covert stance and are keeping the impending tightening a secret. As a result, estimating peak rates is quite challenging. And the answer to this question determines how both of the major currency pairs behave. Nevertheless, since the market itself lacks an answer to this query, it must rely on the information at hand to make decisions. And there isn't much of it right now. Everything now just comes down to whether the market believes that the ECB and BA will be willing to tighten policy as far as is necessary. We don't think so. Yet, there is confidence in the Fed, so we will continue to support the dollar's rise in the near term. When all central banks meet regularly in the middle of March, perhaps the situation will slightly improve. There can be some surprises or crucial remarks. Yet, it is now simply impossible to draw any further conclusions. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 124 points. This value is "high" for the dollar/pound exchange rate. So, we anticipate movement inside the channel on Friday, March 3, with movement being limited by levels of 1.1815 and 1.2063. A new upward round of movement within the "swing" is indicated by the Heiken Ashi indicator's upward reversal. Nearest levels of support S1 – 1.1932 S2 – 1.1902 Nearest levels of resistance R1 – 1.1963 R2 – 1.1993 R3 – 1.2024 Trade Suggestions: In the 4-hour timeframe, the GBP/USD pair once again stabilized under the moving average. The pair is currently in a "swing" movement, which allows you to trade on a recovery from the levels of 1.1932 and 1.2115. Alternately, trade on the lower TF, where it is simpler to spot moves using shorter-term and more precise signals. Although there is a chance of going beyond 1.1932, the following negative impulse can already be weak. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. The short-term trend and the current trading direction are determined by the moving average line (settings 20.0, smoothed). Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.     Relevance up to 01:00 2023-03-04 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336624
Assessing 'Significant Upside Risks to Inflation': Insights from FOMC Minutes

According To Schiff's Opinion Customers Must Cut Back On Their Spending

Jakub Novak Jakub Novak 03.03.2023 11:24
By the end of the week, the euro and the pound had deteriorated sharply when compared to the US dollar, but today could be different, especially in light of statistics showing a sharp increase in activity in the services sectors of the eurozone and the UK. This will likely lead to new discussions about the impending spring inflationary pressures that these nations will face. Now, though, I want to briefly discuss something else. There is constant discussion in the US about whether the Federal Reserve is acting morally by putting the economy at risk and sacrificing the labor and housing markets to get inflation back to its pre-crisis level. Comments by economist Peter Schiff  Recent comments by economist Peter Schiff on this topic revealed some of his preconceptions, according to which the US economy may suffer greatly from the Federal Reserve's battle against inflation. Schiff stated: "We had experienced months of lowering inflation very recently, but suddenly everything has shifted." Schiff was referring to recent economic statistics, notably the personal consumption price index, which increased by 0.6% in January. The economist argued that the Fed's campaign against inflation is entirely ineffectual, noting: "If the Fed is serious about battling inflation, which I doubt, it would have to fight much harder than it is right now. The rates should increase significantly more than the levels anticipated." Nevertheless, in Schiff's opinion, simply raising interest rates won't be sufficient. "Moreover, consumer lending should significantly decline. Loan rates must rise to a point where consumers will exercise financial restraint," he said. "People are making purchases. Their credit card debt increases. Inflation rises as a result of this. Customers must cut back on their spending." The economist emphasized that instead of spending, people should work, produce, and save. Also, according to Schiff, the federal government must take charge of the expenditure issue: "Government spending needs to be significantly reduced. Because it drives up costs, the government cannot just hand out cash to the populace." Jerome Powell  Since Fed Chairman Jerome Powell has recently repeatedly mentioned the imbalance between supply and demand, it is clear that Schiff is on the right track. If we can somehow influence this demand—which can be done by reducing consumer lending—then it will return to normal inflation levels a little more quickly. Another factor is that this will slow down GDP growth, but the Biden administration will still criticize the Fed in this case, especially in the years leading up to the elections. After the conversation, Schiff warned that if nothing is done, the Fed's activities will trigger a financial crisis or, even worse, an economic catastrophe. Additionally, he issued a warning that the Fed might even force the US government to take legal action against Social Security and Medicare cuts. In light of this, it is not surprising that there is sensitivity to and demand for the US dollar as a safe-haven asset. EUR/USD  Regarding the EUR/USD's technical picture, the pair is still under pressure, although today there is a potential for an upward correction. To restart the bull market, 1.0600 must be held and 1.0630 must be broken. You can easily advance from this level to 1.0660 and 1.0730 with the chance of doing so soon. If the trading instrument declines, I only anticipate activity from significant buyers around 1.0600. If no one is present, it would be preferable to hold off on initiating long positions until the 1.0565 low has been updated. GBP/USD Regarding the technical analysis of the GBP/USD, the bulls have even more difficulties. Buyers must rise above 1.2000 to regain control of the situation. The only way to increase the likelihood of a subsequent recovery in the area of 1.2030 and 1.2070, after which it will be able to discuss a more rapid movement of the pound up to the area of 1.2220, is if this resistance fails to hold. The breakdown of this range, which would occur if the bears took control of 1.1950, would strike the bulls' positions and drive the GBP/USD back to 1.1920 with potential growth to 1.1870.   Relevance up to 08:00 2023-03-04 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336654
Bank Of England Will Probably Be Unable To Avoid A Significant Easing Of Policy

Bank Of England Will Probably Be Unable To Avoid A Significant Easing Of Policy

Jakub Novak Jakub Novak 03.03.2023 11:30
The pound tested a key support level in the area of 1.1920 for the third time, a breach of which will result in the resumption of the bear market and another significant drop in the pair. But before we discuss the technical picture of the GBP/USD pair, I'd want to draw attention to some recent remarks made by Michael Saunders, a former Bank of England official who was known for being one of the most hawkish individuals in the institution. We are all aware that the Bank of England will probably be unable to avoid a significant easing of policy in the near future due to the inflation situation. In a recent interview, Saunders, a former committee member, shocked everyone by declaring that he would vote to slow the rate of an interest rate increase. Raising Rates? If he were still a member of the nine-member Monetary Policy Committee, the economist said he would favor raising the key rate by a quarter point to 4.25%. Saunders asserts that it would be incorrect at this time to raise rates by 0.5%, as was done at the last two sessions. Saunders According to Saunders, the economy is starting to suffer from the fastest cycle of monetary policy tightening in the past three decades, and there is not much more that can be done by policymakers to accomplish the desired effect of containing inflation. "Based on the evidence that we have at the moment, and with only a couple of weeks until the next MPC meeting, I would vote for a rise, but by 25 basis points rather than the 50 and 75 that we have seen in the last couple of quarters," Saunders said in an interview. "I don't believe we need to take any further action." Bank of England Recall that the Bank of England increased the base rate by 390 basis points to 4% at the end of 2021, the highest level since 2008. At the upcoming meeting on March 23, investors are very likely to predict an increase of another quarter point, with a top of 4.75% by the end of September. Although Bank of England Governor Andrew Bailey stated this week that the bank should terminate its strong monetary policy soon, it is clear that traders have lowered their expectations for further, more aggressive rate hikes. "We are seeing signals that interest rates are impacting many areas of the economy considerably harder than we expected - especially the housing market," said Saunders, who is currently a senior economic consultant at Oxford Economics. In light of this, the pound continues to decline since the Federal Reserve System's policy is anticipated to be more aggressive than previously thought in the near future. GBP/USD Regarding the technical analysis of the GBP/USD, the bulls have even more difficulties. Buyers must rise above 1.2000 to regain control of the situation. The only way to increase the likelihood of a subsequent recovery in the area of 1.2030 and 1.2070, after which it will be able to discuss a more abrupt movement of the pound up to the area of 1.2220, is if this resistance fails to hold. The breakdown of this range, which would occur if the bears took control of 1.1950, would strike the bulls' positions and drive the GBP/USD back to 1.1920 with potential growth to 1.1870. EUR/USD Regarding the EUR/USD's technical picture, the pair is still under pressure, although today there is a potential for an upward correction. To restart the bull market, 1.0600 must be held and 1.0630 must be broken. You can easily move from this level to 1.0660 and 1.0730, with the chance of doing so soon. If the trading instrument declines, I only anticipate activity from significant buyers around 1.0600. If no one is present, it would be preferable to hold off on initiating long positions until the 1.0565 low has been updated   Relevance up to 08:00 2023-03-04 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336656
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

Adani Group Stocks Got A Respite With US Boutique Investment Firm GQG Partners Purchasing Shares

Saxo Bank Saxo Bank 03.03.2023 11:32
Summary:  Equities came back from the brink yesterday, as US stocks rallied late in the session after the major indices had broken below the 200-day moving average earlier in the day. Still, considerable tension afoot here as the 10-year US Treasury yield rose above 4.00% on further signs of a tight jobs market and ahead of today’s February ISM Services survey. European stocks have been choppy of late, but are generally resilient despite the jump in ECB rate tightening expectations this week on hot February inflation data. What is our trading focus? US equities (US500.I and USNAS100.I): can S&P 500 futures climb above 4,000? US equities rallied yesterday on no real news, so we expect it to be mainly flow driven rather than driven by changes to fundamentals. S&P 500 futures closed at the 3,985 level still failing to push above the 4,000 level, and if the US 10-year yield remains above the 4% our view is that US equity futures will struggle to maintain momentum into the close before the weekend. The upside risk to that view is of course the ISM February report out later today which could send another bullish signal on the US economy extending the rebound in economic activity we saw in January. Hong Kong’s Hang Seng Index (HSI.I) and China’s CSI300 (000300.I) rallied ahead of the Two Sessions Hang Seng Index advanced over 1% and CSI 300 climbed 0.3% ahead of the Two Sessions, which are the annual meetings of China’s legislature and top political advisory body, commencing this weekend. Caixin Services PMI rose to 55 in February from 52.9 in January, echoing the strength of the recovery in the official NBS PMI survey earlier in the week. Hang Seng TECH Index gained 2.8%, with China internet names leading the charge higher. BiliBili (09626:xhkg) surged 11.2% following the online entertainment firm reporting a smaller net loss in Q4. In A shares, shipping, semiconductor, and lodging stocks gained. FX: USD firm on higher US treasury yields The US dollar rose sharply yesterday on a surge in US treasury yields after another firm weekly jobless claims print & upward revision in Unit Labor Costs for Q4 (see below), but perhaps as well on the 4.00% psychological resistance in the US 10-year benchmark treasury yield falling. The greenback’s strength faded in late trading as risk sentiment managed to stage a comeback, with US equities avoiding a meltdown after testing below key support. The February ISM Survey is in focus today, but as we emphasize below, trust in this survey may be weak. Crude oil rises on China demand optimism Crude oil prices are heading for a weekly gain but overall remain stuck within a narrowing range as China demand optimism is being offset by concerns about US monetary policy as the battle against inflation remains a key focus. Overall, however, with the dollar trading down on the week and prompt spreads indicating a tightening market, prices have managed to recover. Brent trading above its 21-DMA for a third day may add some technical support with the next level of resistance being the February high at $86.90. Focus on China where the annual National People’s Congress kicks off this weekend (see below). Gold supported by China comeback and sticky inflation Gold is heading for its best week since mid-January following a week that saw a hot EU inflation print and strong economic data from China, a top buyer of gold. The result being a softer dollar and gold has moved higher to challenge the 21-DMA, currently at $1844 for the first time since February 3. Atlanta Fed’s Bostic saying rates could rise to 5.25% and stay there well into 2024 has been shrugged off as the market is already pricing a terminal rate around 5.5%. It is also worth noting that this week's 10 basis point jump in US 10-year bond yields has primarily been driven by rising breakeven rates (inflation) leaving real yields close to unchanged. For the current recovery to attract support from technical buyers, prices as a minimum need to break $1864, and silver $22 to signal an end to the current corrections. US natural gas rally pauses after weekly stock report US natural gas prices fell on Thursday following a six-day rally which lifted the front month futures price by 29% in response to signs of lower production and rising exports. In addition, a current cold spell through mid-March has also supported the short-term demand outlook. The small correction seen yesterday came after the EIA reported an 81 bcf drop in stocks compared with a five-year average decline of 134 bcf for this week. The smaller than normal draw lifted total stocks to 2,114 bcf, some 19.3% above the 5yr avg. for this time of year, and highest surplus since May 2020. A mild winter suppressing not only demand but also producers’ willingness to maintain record production levels has created a very volatile market in recent months. US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) sold off on ISM Price Paid Index The 10-year US Treasury yield surged above the psychologically important 4.00% that appeared to be supporting the treasury market of late, rising as high as 4.09% before retreating overnight to 4.03% in early European trading this morning. The sharp rise in EU yields has lead global yields higher this week on a series of hot inflation numbers across the bloc, capped by a further acceleration in the EU core CPI yesterday. But short yields in Europe retreated several basis points from new cycle highs yesterday, as did the US 2-year yield, which trades this morning at 4.87% after as high as 4.94% in the immediate wake of yesterday’s US data. The Treasury Department announced the auction of $40 billion of 3-yr notes, $32 billion of 10-year notes, and $18 billion of 30-year bonds next week. What is going on? Worrying inflation prints in the eurozone Eurozone core inflation rose to 5.60 % year-over-year in February with both core goods (6.8 %) and services (4.8 %) reaching new record highs. This is much higher than expected (5.3 %). We pay more attention to core inflation as it can show how entrenched inflation is, and it appears the inflation headache will remain an issue for most of the year. All the country prints which were released earlier this week came in above expectations, topped by Germany’s 9.3% vs 9.0%. In these circumstances, talks about a potential monetary policy pause are ill-timed, and from a monetary policy perspective, we think the ECB is unlikely to slow the pace of tightening until we see the first signs of underlying inflation peaking. Expect at least two more 50 basis point hikes in March and in May (there is no meeting in April). Depending on the trajectory of inflation, the market consensus forecasts that another 25-basis point hike could happen in June. Fed officials hinting at a higher dot plot The biggest headlines today are referring to Fed member Bostic’s (non-voter) comments as dovish, while he said he is firmly in favour of a 25bps hike path (to reduce the possibility of a hard outcome) and even said we could be in a position to pause by mid-to-late summer which appears to be exactly in-line with current market expectations. If his comments suggest 25bps rate hikes each at the March, May and June meetings, we still may end up in the 5.25-5.50% terminal rate which is higher than what the December dot plot suggested. Waller (voter) also hinted at an upwards shift in the dot plot, more clearly so, saying that Fed may need to raise rates beyond December's central tendency view of 5.1-5.4% if the incoming job and inflation data does not pull back from strong readings for January. US claims and unit labor cost data feed the inflation narrative US initial jobless claims fell by 2k to 190k last week from 192k prior and 195k expected, continuing to signal a tight US labor market. Unit labor costs were revised sharply higher to an annualized 3.2% in the fourth quarter, versus the initial 1.1% read. Increased labor costs keep concerns of a wage-price spiral alive and will likely keep the Fed on its toes in tightening policy. Japan’s Tokyo CPI for February hinting at sticky prices Japan’s Tokyo-CPI for February came in at 3.4% YoY for the headline, softer than last month’s 4.4% but still hotter than the 3.3% expected. The slower print is partially a result of PM Kishida’s latest stimulus announcement to support utilities prices which included a 20% discount on household electricity rates. Core CPI at 3.3% YoY matched estimates while the core-core measure (ex-fresh food and energy) was a notch higher at 3.2% YoY vs. 3.1% expected. Inflation continues to be sticky and above the BOJ’s 2% target although the incoming Governor Ueda is unlikely to rush into any monetary policy moves at this point. India’s Adani Group gets foreign interest as prices drop After a drop of over +$150 billion in market value to $83 billion, the Adani group stocks got a respite with US boutique investment firm GQG Partners purchasing shares worth $1.87 billion in four Adani group companies. The deal shows investor interest may be returning to Adani after record drops in its share prices, and any further interest from foreign investors could potentially put a floor to near-term pressures for the conglomerate. This week, the group told bondholders it had secured a $3bn credit line from investors including a sovereign wealth fund. Four days of gain this week has seen the total market capital across the ten companies in the group rise to $103 billion. What are we watching next? February US ISM Services in focus today after erratic readings in Dec. and Jan. The US ISM services survey for February will be on watch later today and is expected to ease to 54.5 from a big jump to 55.2 last month but remain comfortably in expansion. The last two months of this data series have shown erratic moves, with a bizarre collapse in the survey December to 49.2 after 55.5 in November and then the January survey resurgent at 55.2. Can we trust this data series? Attention will also be on the prices paid component after a similar component from the ISM manufacturing survey this week created jitters and services prices are likely to be stickier. China’s “two sessions” in focus Following on from Wednesday’s stronger than expected PMI which supported the view that China’s economy is picking up steam, focus now turns to the Chinese government and what they will do to further help along a post-lockdown economic recovery. The first session of the 14th National Committee of the Chinese People's Political Consultative Conference (CPPCC) will begin on March 4 and followed up the following day by the 14th National People’s Congress (NPC. During what is collectively known as the “two sessions”, Chinese officials will release a set of social and economic development goals and various policy measures to achieve them. Earnings to watch There are no important earnings releases today. We have highlighted next week’s most important earnings releases below with the most market attention going earnings from Adidas, CATL, and JD.com. Adidas has a huge inventory of Yeezy sneakers following the abrupt end to the partnership with Ye that caused a massive writedown in the previous quarter and investors have generally lost short-term trust in Adidas following a string of bad results. Analysts expect Adidas to report Q4 revenue of €5.2bn up 1% y/y and EBITDA of €-419mn. CATL is the world’s largest battery maker and is firing on all cylinders with analysts expecting Q4 revenue growth of 87% y/y and EPS of CNY 2.65 down 11% y/y as the company has not passed on all input costs to its EV customers after a significant surge in lithium carbonate prices last year. Monday: Trip.com Tuesday: Ashtead Group, Sea Ltd, Ferguson, Crowdstrike Wednesday: Ping An Bank, Thales, Adidas, Geberit Thursday: CATL, Deutsche Post, JD.com Friday: Daimer Truck, AIA Group, Oracle, DiDi Global Economic calendar highlights for today (times GMT) 0815-0900 – Eurozone Final Feb. Services PMI 0930 – UK Feb. Final Services PMI 1000 – Eurozone Jan. PPI 1330 – Canada Jan. Building Permits 1445 – US Feb Final Services PMI 1500 – US Feb. ISM Services 1600 – US Fed’s Logan (Voter 2023) to speak 1700 – ECB's Wunsch to speak 2000 – US Fed’s Bowman (Voter) to speak Source: Global Market Quick Take: Europe – March 3, 2023 | Saxo Group (home.saxo)
Are crude oil prices rebounding on the back of a possible debt ceiling deal?

Strong China Data Boosts Energy, Eurozone Core CPI Hit A Record

Swissquote Bank Swissquote Bank 03.03.2023 11:59
The Eurozone’s flash CPI estimate looked as ugly as it smelled beforehand. Inflation in the Eurozone is estimated to have barely eased to 8.5% from 8.6% printed a month earlier, while core inflation advanced to a record of 5.6%, from 5.3% printed previously. CPI The latest CPI update confirmed the European Central Bank (ECB) hawks’ aggressive positioning for further rate hikes and pushed the European yields further up yesterday, but despite higher yields across the board, the Stoxx 600 closed Thursday’s session 0.50% higher. Jobs data Across the Atlantic Ocean, fresh jobs data came to fan the inflation worries yesterday in the US. US Yields US yields advanced but the S&P500 could avoid a further selloff, though it briefly stepped below the most-watched 200-DMA. EU and  US stock markets But for both the European and US stock markets, the rising yields call for downside correction. Watch the full episode to find out more! 0:00 Intro 0:32 Higher Eurozone inflation boosts EZ yields 2:24 … but Stoxx resist 5:01 Latest US jobs data points at heated inflation, as well 6:38 … S&P500 also resists to rising yields 8:36 USD upbeat, dollar-yen clears key resistance 8:58 Strong China data boosts energy, but… Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Eurozone #inflation #US #jobs #data #Fed #ECB #rate #hike #EUR #USD #JPY #Crude #Oil #Stoxx #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The USD/JPY Price Seems To Be Optimistic

USD/JPY Pair Comes Under Some Selling Pressure, EUR/USD Holds Above 1.06 While GBP/USD Remains Below 1.20

Kamila Szypuła Kamila Szypuła 03.03.2023 14:31
The US dollar declined against its major trading partners early Friday ahead of the release of service sector data for February from S&P Global. The US economic docket will feature the ISM Services PMI report on Friday. Recession fears could return if the headline PMI comes in below and the US Dollar could come under pressure ahead of the weekend. The Fed appearance schedule is also full on Friday. Dallas Fed President Lorie Logan is scheduled to speak followed by Atlanta Fed President Raphael Bostic, Fed Governor Michelle Bowman and Richmond Fed President Tom Barkin. Logan and Bowman both vote on the Federal Open Market Committee in 2023. USD/JPY The yen pair traded in the range of 136.60-136.70 in the Asian session. In the European session there was a dip to close to 136.00, but USD/JPY rebounded and traded at 136.19 Following the previous day's sharp slide from a multi-week high, the US Dollar (USD) was back in demand amid a further rise in the US Treasury bond yields and turned out to be a key factor acting as a tailwind for the major. The Japanese Yen (JPY), on the other hand, is weighed down by expectations that the Bank of Japan (BoJ) will stick to its dovish stance for the foreseeable future. In fact, the incoming BoJ Governor Kazuo Ueda stressed the need to maintain the ultra-loose policy to support the fragile economy and said earlier this week that the central bank isn't seeking a quick move away from a decade of massive easing. The market focus now shifts to the upcoming BoJ monetary policy meeting, scheduled next week. In the meantime, the divergent Fed-BoJ outlook should continue to lend support to the USD/JPY pair. EUR/USD The last day of the trading week for the euro pair was up in the Asian session. Also in the European session, the EUR/USD pair was increasing with moments of decline. Currently, the pair is at the level of 1.0614 ECB Governing Council member Pierre Wunsch said early Friday that a terminal rate of 4% could not be excluded if core inflation in the eurozone remains persistently high. Meanwhile, Morgan Stanley said in its latest research note that they have updated the ECB terminal rate projection to 4% following "material revisions" to inflation forecasts. GBP/USD A pair of cable makes up for losses all Friday. GBP/USD started the day at around 1.1950 and is now trading above 1.1990 The pound rose on Friday, boosted by data that showed business activity rose at the fastest rate in eight months in February, bolstering investors' view that UK rates would continue to rise after March. The final version of the S&P Global/CIPS UK Services Purchasing Managers' Index (PMI) rose to 53.5 last month from 48.7 in January, the strongest rate of increase since June last year. Any reading above 50 means expansion. AUD/USD The Austalitic exchanged similarly to the pound today, but fell in the European session and is currently trading above 0.6750. Source: investing.com, finance.yahoo.com
Rates Spark: Crunch time

FX Weekly Summary: Euro Holds At 1.06, The Main Focus Of AUD Now Is On The RBA's Interest Rate Decision

Kamila Szypuła Kamila Szypuła 04.03.2023 18:57
The U.S. dollar slid from a 2-1/2-month high versus the Japanese yen on Friday, on track for its largest weekly loss since mid-January against a basket of six major currencies, as traders stepped back to gauge the path for Federal Reserve policy. At the beginning of the week, optimistic PMI data for manufacturing from China allowed risk flows to return to the markets and hindered the strengthening of the USD. USD/JPY The yen pair started trading at 136.3840 for the week. Throughout the week, USD/JPY held above 136.00 except on Wednesday, where it traded below that level, recording a weekly trading low of 135.27. The next day, the yen pair rose and registered its highest trading level of the week at 137.05. The pair failed to maintain momentum and fell below 136.00 on the last day of trading to end the week at 135.8310. The Japanese Yen is weighed down by expectations that the Bank of Japan (BoJ) will stick to its dovish stance for the foreseeable future. In fact, the incoming BoJ Governor Kazuo Ueda stressed the need to maintain the ultra-loose policy to support the fragile economy and said earlier this week that the central bank isn't seeking a quick move away from a decade of massive easing. EUR/USD The beginning of trading in the EUR/USD pair was at weekly lows. The euro pair started trading at 1.0550 and for the first two days of the week rose above 1.06. This increase did not last long and the EUR/USD pair fell below 1.06. The beginning of the new month was very favorable for the euro pair as it gained and reached the highest trading level of the week at 1.0689. The exemplary momentum did not last long and the pair found themselves under pressure to fall towards 1.0580 again. The pair last day rebounded and traded above 1.06 (1.0638). GBP/USD The beginning of the week and at the same time the end of the month was favorable for the pound and the GBP/USD pair gained and thus reached the highest trading level of the week (Tuesday) at 1.2140. The new month brought a downward move to the cable pair and the pair tested below 1.20 again. On the last day, GBP/USD made up for the previous day and managed to cross the 1.20 level and close the trade at 1.2045. The British pound found some support on Friday thanks to the UK Services PMI data, as well as renewed risk appetite after better-than-expected China PMI data. From the UK's perspective, the focus will be on British GDP, which is likely to fall below 0%, and if the actual figures are confirmed, fears of recession will return, possibly hampering GBP growth. AUD/USD For the Australian, trading in the week was mixed, with both highs and lows. For the first days of trading, the AUD/USD pair gained in the direction of 0.6760, then fell sharply to open the week's low at 0.6698. After falling, the Aussie Pair rose until it reached a weekly high at 0.6783 before falling back towards 0.6710. The last day of trading was up for the AUD/USD pair, the pair ended the week close to the week's high, at 0.6771. The decline in the Australian dollar stalled after surprisingly strong data on manufacturing and services in China. However, for the AUD/USD rebound to be sustainable, a reversal in Australia's monetary policy and growth divergence with US monetary policy may be necessary. The macro data from Australia since early March has been disappointing. The Australian economy expanded at its weakest pace since last quarter, while monthly consumer prices rose less than expected in January. Building permits have fallen the most in history, suggesting the housing market is in the throes of interest rate hikes by the Reserve Bank of Australia. The main focus now is on the RBA's interest rate decision scheduled for March 7 - the central bank is widely expected to raise the cash rate by 25 basis points. Source: finance.yahoo.com, investing.com
US core inflation hits 5.5% and it's the second lowest reading since November 2021

FX: Dollar disinflation trade gets postponed

ING Economics ING Economics 05.03.2023 07:37
February proved a counter-trend month in FX markets, where firm US activity and price data saw the dollar reclaim a third of its losses since last October. March looks set to be a mixed month for FX, where presumably a hawkish Fed can keep the dollar supported a little further. It looks like the broader dollar bear trend will have to take a short raincheck In this article In data we trust Further adjustments to FX forecasts   Shutterstock U.S. Federal Reserve Chair Jerome Powell In data we trust Dollar strength in February was really a function of incoming data rather than central bank speak. In fact, Federal Reserve Chair Jerome Powell proudly started the month by saying that the broad disinflation trend had started – a view quickly shelved by the market after the strong January releases of US jobs and core PCE price data. Will February’s dollar gains be quickly reversed? There is a scenario where US activity data reverses lower this month from inflated January levels – those high readings driven by warmer weather and aggressive seasonal adjustment factors. And should the housing slowdown start to feed into official rental statistics, core PCE could reverse lower too. Yet the reason we doubt investors are ready to jump back into short dollar positions is the 22 March FOMC meeting. Here, the Fed will have little choice but to sound hawkish. And some upward revisions to the Dot Plot fed funds expectation should support the recent hawkish re-pricing of the Fed curve. We have mentioned this several times before, but a severely inverted US yield curve is not conducive to the kind of benign dollar decline that seemed likely in January. And central banks tightening into slowdowns will generate greater headwinds for risk assets. This again is not a particularly positive story for pro-cyclical currencies such as the euro – at least in the immediate future. Further adjustments to FX forecasts Last month, we raised our EUR/USD profile and had felt that the second quarter could be the best quarter of the year for this pair. Sticky US inflation suggests that clear signs of disinflation may not emerge until the summer. We are therefore revising lower our EUR/USD forecast for the second quarter, where we now see volatility in a 1.05-1.10 range depending on the data. And we are pushing back our 1.15 EUR/USD forecast to the fourth quarter when our macro and rate strategy teams now look for the substantial compression in two-year EUR:USD swap differentials – a key driver of the spot rate. Elsewhere, the Chinese recovery will continue to help the commodity FX bloc – though broader gains in this segment will not emerge until the second half when the Fed has greater confidence in disinflation. And one of the best-performing currencies in the world should remain the Mexican peso. This has been buoyed by some of the highest risk-adjusted yields and Mexico’s position as a major beneficiary of ‘friendshoring’ direct investment trends.   TagsFX Dollar     Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Rates Spark: Escalating into a Rout as Bond Bear Steepening Accelerates

Stock Market Summary Of The Week 27.02-3.03.2023

Conotoxia Comments Conotoxia Comments 05.03.2023 09:17
There were a number of significant developments in the markets this week, including surprising inflation readings, declines in the cryptocurrency market and hopes for China's industry, which posted its best performance in more than a decade. In addition, many other events took place in the financial markets. What else could we have learned? Macroeconomic data We began our macroeconomic data with Monday's reading of home sales under construction for January in the United States, which rose by as much as 8.1% m/m. (1% m/m was expected). This is the highest reading since September 2020. Could this mean that, despite high interest rates, the property market is starting to recover for this economy? We started Tuesday with the publication of the US CB Consumer Confidence index. The reading fell short of expectations, coming in at 102.9 (108.5 was expected). On the same day, we learned about the PMI Industrial Sentiment Index for the Chinese economy, which positively beat expectations, coming in at 52.6 (50.5 was expected). This is the highest reading for this economy in more than 10 years! The ChinaH index rose by almost 5% this week. Source: Conotoxia MT5, CHINAH, Daily Wednesday brought us data from Germany, such as the PMI industrial business sentiment index, which came in at 46.3 points (46.5 points were expected). In addition, we learned about the CPI inflation reading for February, which came in at 8.7% (8.7% was expected). However, it appears that despite further interest rate increases in the euro area, inflation does not want to fall. The US manufacturing PMI came in slightly worse than analysts' consensus, at 47.7 points (48 points expected). Thursday seemed to be crucial for this week. First, we had a look at inflation in the euro area, which, like inflation in Germany, surprised negatively. It turned out to be higher than expected at 8.5% (8.2% was expected). On the same day, we learnt the reading of new claims for unemployment benefits in the United States, which came in at 190,000 (195,000 was expected). It seems that the labour market remains as strong as ever for this economy. The stock market A large proportion of sectors ended the week on declines. The largest declines of at least 2% included the utilities sector and the retail services sector. The largest increases of 3.4% came from the materials sector. In second place was the industrial companies sector with an increase of 1.66%. Source: https://www.sectorspdr.com/sectorspdr/tools/sector-tracker The companies that had the biggest changes during the week were Tesla's (Tesla) shares down more than 5%, the shares of online short-term rental platform Booking.com (Booking) up more than 6%, or rail holding company Union Pacific Corporation, which rose almost 10%. Source: https://finviz.com/map.ashx?t=sec&st=w1 Currency and cryptocurrency market The US dollar has been weakening in the foreign exchange market against other currencies, with the EUR/USD pair rising by 0.6%. This may be linked to expectations of an interest rate increase in the euro area due to higher-than-expected inflation. The only one of the major pairs to rise during the week is the New Zealand dollar pair against the US dollar. Source: Conotoxia MT5, EURUSD, Daily At the end of the week we saw declines in the cryptocurrency market. The price of bitcoin fell by almost 4% during the week. It seems that this may be related to the so-called Silvergate, the bank that disconnected the ability to make transfers for one of the largest cryptocurrency exchanges Coinbase. Additionally, as is the case every week, investors can look forward to an influx of fresh funds into this market, which could be measured by, among other things, stablecoin capitalisation, which is down by as much as 2.1% m/m. Source: Conotoxia MT5, BTCUSD, Daily Grzegorz Dróżdż, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

The Gap Will Close And The AUD/USD Price Will Hit 0.6786

InstaForex Analysis InstaForex Analysis 06.03.2023 08:00
Visually, the Australian dollar is consolidating at the support level of 0.6730 with short-term price retreats below the level by the lower shadows of the daily candlesticks. The overall consolidation range is marked by a gray rectangle. Currently, the gap is still open, so the price will likely head towards the upper limits of the range (0.6786). The Marlin oscillator is rising ahead of the price, and so far it is interpreted as a slowdown before it falls further. The price can reach the target support at 0.6640, the area where the November 29, 2022 low is located. On the four-hour chart, the price is above the MACD indicator line, the Marlin oscillator is in the area of growth, suggesting that the gap will close and the price will hit 0.6786. The Australian dollar as a whole is set for tomorrow's Reserve Bank of Australia meeting, where the consensus forecast is that the rate will be raised to 3.60% from the current 3.35%. Relevance up to 03:00 2023-03-07 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336759
The GBP/USD Pair Is Expected The Consolidation To Continue

There Is A Sign Of A GBP/USD Price Reversal Into A Medium- Or Long-Term Trend

InstaForex Analysis InstaForex Analysis 06.03.2023 08:00
The British pound rose 98 pips on Friday, overlapping Thursday's black candlestick. The Marlin oscillator refuses to move into the area of growth. At the moment, there is a situation of one or two more days of potential growth without the target level of 1.2155. The MACD indicator line is turning down on the daily chart, a sign of a price reversal into a medium- or long-term trend. This struggle will probably continue in a wide range of 1.1914-1.2155, which began on February 7. According to the main scenario we are waiting for the bears' victory. On the four-hour chart, the price is above the balance and MACD indicator lines, the Marlin oscillator is in the positive area. An uptrend. It is impossible to say how long or what level this trend will last, because there are many strong levels within the 1.1914-1.2155 range. However, if the price returns under the MACD line with consolidation, below 1.2012, there might be another attempt to reach support at 1.1914   Relevance up to 03:00 2023-03-07 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336761
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

The EUR/USD Price Decided To Continue To Move Sideways

InstaForex Analysis InstaForex Analysis 06.03.2023 08:02
On Friday evening, investors tried to win back European Central Bank President Christine Lagarde's statements about the Bank's intention to raise the rate by 0.50%. Over the weekend, Mary Daly, head of the San Francisco Fed, countered Lagarde's statement by suggesting a higher finish to the rate hike cycle and a longer hold on that rate should stronger economic data come in. The focus has been on the labor market, so Friday's jobs data will be the main event of the week. But it is the anticipation of key data that adds to the uncertainty. On the daily chart, the signal line of the Marlin oscillator slowed growth, because it has the zero line resistance ahead - the boundary of the growth area. The resistance is 1.0660. The price decided to continue to move sideways in the 1.0595-1.0660 range. As it was earlier, on March 1, the false move above the upper limit of the range is quite possible. On the four-hour chart, the price bounced from the MACD line. Now the price seems to be stuck above both indicator lines. The Marlin oscillator is rising in the green zone. There is a high probability that the price will reach the target level of 1.0660, but I'm not sure that the optimism will extend to the price hitting the target range of 1.0758/87. Market participants are set for action on Friday.   Relevance up to 03:00 2023-03-07 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336763
Japanese yen increased by over 0.5% on Friday. Japanese monetary policy may change soon

Analysis Of Movement Of The USD/JPY Main Currency Pairs

InstaForex Analysis InstaForex Analysis 06.03.2023 08:04
On the 4 hour chart, USD/JPY main currency pairs seems moving inside the channel that go upward however by the appreance of deviation between price and Awesome Oscillator indicator then in the near future has the potential to go down until the level of 135,27 as the main target and 134,07 as the next target during the journey to these levels it was not corrected upwards which exceeded the level of 136.66 because if this level manages to break above then all the scenarios of the decline that have been described earlier will become invalid and cancel automatically. (Disclaimer)   Relevance up to 03:00 2023-03-07 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120655
If The Bank Of England Hike Interest Rates Again Later This Month Will Exert Downward Pressure On The EUR/GBP Cross

The Price Movement Of The EUR/GBP Cross Currency Pairs

InstaForex Analysis InstaForex Analysis 06.03.2023 08:06
On the daily chart EUR/GBP cross currency pairs you can see that the price movement is moving in a downward channel and the appearance of deviations between price movements and the MACD indicator strengthens the potential for a decline in EUR/GBP in the future where currently the 0.8754 level will try to be broken down if this level is successfully broken down and there is no upward correction that passes level 0.8928, EUR/GBP in the next few days will potentially fall down to the 0.8721 level as the first target and the 0.8546 level as the second target. (Disclaimer)   Relevance up to 03:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120657
Rates Spark: Crunch time

In The Medium Term, The Downtrend Of The EUR/USD Pair Is Likely To Resume

Paolo Greco Paolo Greco 06.03.2023 08:09
M5 chart of EUR/USD On Friday, EUR/USD was in a flat trend. In the 1-hour time frame, it showed a sluggish movement. In the 5-minute time frame, it was in a flat. The lines of the Ichimoku indicator have almost merged, indicating a flat trend. In terms of macro statistics, the reports that had come, including the ISM non-manufacturing PMI, had no effect on the price. All in all, we could see a minor bullish correction. In the medium term, the downtrend is likely to resume. Speaking of trading signals, the pair hovered near the psychological line during the day. So, it was almost impossible to yield some profit at least. Traders who had tried to price the first two signals near this line were bound to losses. There was no point in continuing trading afterward. COT report: Due to a technical glitch, the Commodity Futures Trading Commission will likely publish reports with a month delay. Clearly, analyzing such reports will be of no use. Anyway will continue doing so. The situation may change for the better in the future. So far, we can say that the coming reports have been in line with developments in the market in recent months. According to the COT report from February 7, the net non-commercial position of large traders (second indicator) has risen since September 2022. The net non-commercial position is bullish and continues to increase with each new week, allowing us to expect the uptrend to stop shortly. Such a signal comes from the first indicator, with the green line and the red line being far apart, which is usually a sign of the end of a trend. The euro has already begun its bear move against the greenback. So far, it remains unclear whether it is just a downward correction or a new bear trend. According to the latest report, non-commercial traders closed 8,400 long positions and 22,900 short ones. Consequently, the net position rose by 14,500. The number of long positions exceeds that of short ones by 165,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue. H1 chart of EUR/USD In the 1-hour time frame, we can see attempts to resume the uptrend. Consolidation above or below any of the Ichimoku lines does not matter. Despite the flat trend, corrections constantly occur. On Monday, trading levels are seen at 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0762, 1.0806, Senkou Span B (1.0618), and Kijun-sen (1.0626). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On March 6, eurozone retail sales will be the only interesting macro report. However, figures will trigger a reaction only if they seriously miss market expectations. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders   Relevance up to 01:00 2023-03-07 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336751
FX Daily: Euro’s attractiveness on the rise

The EUR/USD Pair Can't Exclude A Final Spike Lower To Test Support

Torben Melsted Torben Melsted 06.03.2023 08:11
EUR/USD still needs to break above minor resistance at 1.0694 to confirm the end of the wave 4 correction that has dominated the chart since the peak at 1.1033. A break above minor resistance at 1.0694 will confirm that wave 5 towards 1.1103 and likely closer to 1.1400 is unfolding. We have to keep in mind that as long as minor resistance at 1.0694 remains untouched, we can't exclude a final spike lower to test support at 1.0493. The odds for this outcome are small but nonetheless a possibility.   Relevance up to 07:00 2023-03-07 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314962
Kelvin Wong talks JGB, US dollar against Japanese yen and more

Japan's "Shunto" Spring Wage Talks Will Be Key To Watch This Month

Saxo Bank Saxo Bank 06.03.2023 08:16
Summary:  US stock indices had a strong finish to the week, with the Nasdaq 100 rising 1.6% and the S&P 500 surging 2%. Despite the fading expectations for interest rate cuts in 2023, the S&P 500 has risen 5.4% and the Nasdaq 100 has soared 12.4% since the beginning of the year. Yields on the 10-year Treasury notes reversed and returned to below 4%, settling at 3.95% to close the week on Friday. On the first day of the First Session of the 14th National People’s Congress, China's Premier Li delivered his last Government Work Report. The report set a target of around 5% for the real GDP growth for 2023, which was at the lower end of expectations.   What’s happening in markets? US equities bounced on Friday to finish the week higher Nasdaq 100 (NAS100.I) rose 1.6% and S&P 500 (US500.I) surged 2% on Friday, securing a weekly gain of 1.9% and 2.6% respectively. All 11 sectors within the S&P 500 advanced, led by information technology, consumer discretionary, and communication services. Meta (META:xnas), First Solar (FSLR:xnas), and Broadcom (AVGO:xnas) were among the top gainers, rising more than or nearly 6%. Apple (AAPL:xnas) gained 3.5% after announcing the departure of its cloud business head next month. Rivian (RIVN:xnas) jumped 7.6% following raising its EV production target by 24% to 62,000 units. Since the beginning of the year, the S&P 500 has risen 5.4% and the Nasdaq 100 has soared 12.4% despite the expectations for interest rate cuts in 2023 having largely faded. NVidia (NVDA:xnas) up 65%, Tesla (TSLA:xnas) up 63%, and Meta up 53.9% were among the best-performing stocks that drove the indices higher. US Treasuries rallied with the 10-year yield reversing to below 4% After spending one day above 4% on Thursday, yields on the 10-year Treasury notes reversed and returned to below 4% and settled at 3.95% to close the week on Friday. Headlines were light. The decline in the ISM Services Index in February was smaller than expected and initially saw the short-end lower in prices and higher in yields before the losses faded and reversed as strong bids emerged in the long ends in the afternoon. The 2-10-year spread bull flattened 7bps to -91. Hang Seng Index and China’s CSI 300 advanced ahead of the Two Sessions On Friday, Hang Seng Index (HSI.I) was up 0.7%. Hang Seng TECH Index (HSTECH.I) was up 2.1% ahead of the Two Sessions in China, annual meetings of China’s legislature, and top political advisory body. Technology, auto, and Chinese developer stocks led the charge higher. Closing at 20567, Hang Seng Index was up 2.79% over the week.  Hang Seng TECH Index gained 2.8%, with China internet names leading the charge higher. Bilibili (09626:xhkg) surged 10.3% following the online entertainment firm reporting a smaller net loss in Q4. TVB (00511:xhkg) soared 51.6% on heavy volume after the television broadcaster announced cooperation plans with Alibaba’s Taobao for live-streaming broadcasts.  Wynn Macau (01128:xhkg) fell 4.3%, weighed on by hedging flows after the Macao casino operator issued a USD600m of convertible bonds. Benchmark A-share indices advanced. The CSI300 (000300.I) climbed 0.3% on Friday and gained 1.7% over the week. The Shanghai Stock Exchange Composite Index gained for the fifth day in a row, closing at 3328.39, the highest level since July 2022. The net purchase of northbound funds was RMB 2 billion. Large state-owned companies in strategic industries, typically those starting with the prefix “China”, were among the top gainers ahead of the Two Sessions. Australian equities remain pressured The Australian share market fell for the fourth straight week last week. And with BHP and Rio and Woodside all going ex-dividend this week, it could be very volatile week. For more on what to watch this week, refer to Saxo’s Week Ahead. FX: GBP recovers post-Bailey losses The USD was broadly weaker last week after a run higher in February on expectations that most of the Fed’s tightening is priced in and yields are potentially reaching close to their peaks. This week brings a test of this rhetoric with Chair Powell’s testimony and the US jobs report scheduled for release. GBPUSD once again found support at 1.1920 despite a dovish turn by BOE Gov Bailey last week, and returned to 1.2040. AUDUSD worth a watch again this week with support at 0.67 being eyed as the RBA meets this week and China’s lower growth expectations may weigh. USDJPY has reversed back below 136 as yields gains ease, but if US yields continue their run higher and/or Governor Kuroda stays overly dovish at his final Bank of Japan meeting this week then a return to 137+ remains likely.  Crude oil whipsaws but bulls in control Crude oil prices faced 2-way action on Friday with an initial move lower by over 2% on a WSJ report saying the UAE is debating internally whether to leave OPEC. But these reports were denied later on, and enthusiasm of the oil bulls going into China’s policy meetings over the weekend with policy stimulus expectations running high helped crude oil make a quick reversal. WTI prices got close to $80/barrel from a dip to $76 earlier, while Brent rose to $86 from $82.50. A modest weakness is coming back again this morning in Asia, keeping the range intact. However, China’s weaker than expected growth target set over the weekend may still keep oil prices choppy, with eyes also on any possibility of hawkish remarks from Chair Powell this week or the US jobs report.    What to consider? China’s 2023 GDP growth target at “around 5%” China sets a real GDP growth target of "around 5%" for 2023 in the Government Work Report to the National People's Congress. This target is at the lower end of expectations ranging from 5% to 5.5% going into the meeting. Other key macroeconomic targets include adding 12 million jobs to urban area employment for 2023, a consumer inflation target of 3%, and a fiscal deficit target of 3% of nominal GDP. The report emphasizes the importance of boosting domestic aggregate demand, particularly household consumption, and aims to deepen the reform of state-owned enterprises while encouraging private enterprises to grow. For more details, see our note here. US ISM services stays strong The headline ISM services cooled less than expected in February, falling to 55.1 from 55.2 in January, better than the expected 54.5. The prices paid component, which raised concerns again about the disinflation rhetoric from the manufacturing ISM report last week, cooled only slightly to 65.8 from 67.8 in January, showing sticky services prices. Employment rose to 54 from 50.0, matching the highest since March 2022 and therefore showing more signs of a tight labour market. New orders accelerated to 62.6 from 60.4 but business activity slowed to 56.3 from 60.4.  China’s Caixin Services PMI came in at the highest level since Sept 2022 Caixin Services PMI rose to 55 in February (consensus estimate: 54.5), the highest level since September 2022, from 52.9 in January, echoing the strength of the recovery in the official NBS PMI survey earlier in the week. Both the business activities component and the new order components were in the expansion territory. The Biden administration is drafting new rules to prohibit some U.S. investments in China In reports sent to Congress, the Biden administration told lawmakers that the Treasury Department and the Commerce Departing are drafting new regulations to prohibit U.S. companies from making advanced technology investments abroad, which is understood as focusing on China. Fed members continue to sound hawkish, eyes on Powell Fed member Mary Daly was on the wires over the weekend, and sounded hawkish as she raised the prospects of an upward shift in the Fed’s dot plot as well. She said that inflation is still high, and the Fed has to think about 'continuous tightening', signalling higher rates and remaining at elevated levels for a longer period of time, if inflation stays hot. Another member Barkin also clearly said that there will be no rate cuts this year. Focus will be on data in the run upto Fed’s March meeting, but Chair Powell’s testimony and the February jobs report this week will be key for the markets. Japan unions pushing for record wage increase The Japanese Trade Union Confederation (JTUC, more commonly known as Rengo) says its survey of 2000+ unions in the country shows an average pay rise request of 4.49% this year. This is the highest since 1998's 4.36% and is much higher than the 2.97% sought in 2022. The Bank of Japan continues to highlight that wage growth is key for achieving sustained demand-pull inflation. Japan's "shunto" spring wage talks will be key to watch this month as any larger than expected increase in wages will fuel more tightening expectations for the Bank of Japan, having a profound impact on global liquidity as well. COT reporting on Brent and (delayed) gold  Speculators or hedge funds raised bullish bets on Brent crude oil by 9.4k lots to near a 15-month high at 286k lots in the week to February 28. The cost of holding a short position in Brent, reflected through the current backwardation, supported a continued collapse in the gross short to a 12-year low at 22k lots.  While the ICE Europe Exchange is up to date in its reporting, the US CFTC is still catching up following a January 31 cyberattack on ION Cleared Derivatives, a third-party software and service provider for derivative trading. The latest report covered the week to February 7, when gold reached $1975 before crashing to $1885, triggering a 29% drop in the gold net long to 79k. The CFTC is expected to be up to data around mid-March.  Moving Visa, Mastercard, and Paypal from IT to Financials in the S&P500 Starting from 17 March, the S&P 500 will move Visa (V), Mastercard (MA), and Paypal (PYPL), which specialize in payment services from its Information Technology sector to the Financials sector, and Automatic Data Processing (ADP), which provide human resources services from the Information sector to the Industrials sector. For what to watch in the markets this week – read or watch our Saxo Spotlight.  For a global look at markets – tune into our Podcast. Source: Global Market Quick Take: Asia – March 6, 2023 | Saxo Group (home.saxo)
Disappointing activity data in China suggests more fiscal support is needed

The Chinese Government Signalled That This Year's GDP Target Would Be 5%

Michael Hewson Michael Hewson 06.03.2023 08:21
Despite another week of rising yields, European markets still managed to finish last week higher over concern that various inflation measures are starting to tick back higher again, having been in decline over the last few months.   The German DAX had a particularly good week posting its highest daily and weekly close in over a year, as confidence over falling energy prices and a more resilient global economy as China's economy reopens helps to foster a slightly less negative outlook about growth prospects.     The FTSE100 found itself lagging weighed down by underperformance in some of its more defensive names.      US markets also managed to finish the week higher, breaking a losing streak that had lasted three weeks in a row. Both the S&P500 and Nasdaq 100 managed to rebound after finding support at their respective 200-day SMA's.   Friday's rebound came against a backdrop of a sharp decline in US 10-year yields which fell back from their highest level since November, above 4%. Friday's ISM services report showed little sign that the big rebound in the US economy in January was a one-off, with the headline number falling slightly to 55.1, from 55.2, with further gains in employment to 54, and new orders rising to 62.4.   Prices paid did slow, but still remained high at 65.4.   As a leading indicator for this week's delayed non-farm payrolls number for February, it's a further indication that the US labour market continues to remain very resilient, with ADP and job openings (JOLTS) data also likely to add insight.     As we look ahead to this week the main focus, apart from Wednesday's ADP, and Friday's payrolls report, will be on Fed chair Jay Powell's testimony to US lawmakers tomorrow and Wednesday where he is likely to be quizzed on how he sees the US economy in light of recent strong data, and what measures the Fed might feel inclined to take if the data continues to come in strong.   It's unlikely that he will give too many clues given how close to the next meeting we are, and the main takeaway is likely to be data dependence, however, don't be surprised if markets pore over every single nuance just so that they can reinforce their own particular mindset.   We do have two other important rate decisions this week, namely from the RBA tomorrow, and the Bank of Canada on Wednesday, where the central bank may have cause to rue their decision to signal a pause at their last meeting given the strength of recent economic data.   Over the weekend the Chinese government signalled that this year's GDP target would be 5%, which comes across as a little on the low side given that last year saw a 5.5% target under more difficult circumstances. It's also potentially disappointing when it comes to the prospects for global GDP as a more restrained China means less potential for demand.   The lower-than-expected target might also suggest that Chinese officials are less likely to push stimulus into the economy as it strives for stability over anything else.   It could also be an acknowledgment that recent protectionist measures have damaged confidence in China as an investment opportunity, and consequently, investors could well be more cautious over the next 12 months.   This less-than-ambitious target appears to be weighing on commodity prices with Asia markets broadly positive as we look ahead to the start of today's European session, and a positive start to the week.   EUR/USD – struggled to get above the 1.0700 area last week but has remained above the bullish reversal of last Monday at the 1.0530 area. We need to push through the 50-day SMA at 1.0730 to open up 1.0820. While below 1.0730, the bias remains for a test of the January lows at 1.0480/85. GBP/USD – last week saw us ping between the 1.1920 area and the 200-day SMA, and the 50-day SMA at 1.2150 which remains a key resistance area. A break of 1.1900 retargets the 1.1830 area, while a break of the 1.2150 area is needed to retarget the 1.2300 area. EUR/GBP – failed to push above trend line resistance at 0.8900 from the January peaks last week. Above 0.8900 targets the 0.8980 area. We need to push below support at the 0.8820/30 area to retarget the 0.8780 area. USD/JPY – the failure to push through the 200-day SMA at 136.90/00 last week has seen the US dollar slide back. Support comes in at the 135.20 area. We also have interim support at 133.60. A break above 137.00 could see a move to 138.20.   FTSE100 is expected to open 5 points higher at 7,952 DAX is expected to open 47 points higher at 15,625 CAC40 is expected to open 37 points higher at 7,385 Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
Adidas And CALT Results Will Be On Watch, China’s Modest Growth Targets For 2023

Adidas And CALT Results Will Be On Watch, China’s Modest Growth Targets For 2023

Saxo Bank Saxo Bank 06.03.2023 08:33
Summary:  The US Treasury yields have started the week softer, but the narrative that the Fed’s hawkishness is priced in by the market may be put to test as Chair Powell appears for testimony and the US jobs data for February comes out in the week ahead. China’s modest growth targets for 2023 set at the weekend meetings may spur some caution and further policy announcements remain on watch. In addition, central bank meetings from Australia, Canada and Japan are likely to create short-term FX volatility, while company earnings from Trip.com, CATL, JD.com, Oracle and others will be on the radar. Powell’s testimony and US jobs data to keep markets wobbly The next test of the US economy comes at the tail end of this week as the February jobs data is reported. Over the last few weeks, data out of the US has been far more resilient than expected, fueling bets that the Fed will have to raise rates beyond what was communicated earlier and rates will stay elevated for longer as well. Bloomberg consensus expectations point to another strong jobs report after the blowout report of January, with headline jobs expected to come in again at 200k+, but risk of disappointment remains given the scope of correction from +517k in January. The unemployment rate is expected to remain unchanged at 3.4%, while wage growth is projected to accelerate. Most early indicators such as the business surveys from S&P pointed to an acceleration in hiring, while applications for unemployment benefits remained historically low.  Ahead of Friday’s jobs report, investors will also be watching Congressional testimony from Fed Chair Jerome Powell on Tuesday and Wednesday. He is expected to keep a hawkish stance in light of the strong data over the last few weeks. US yields and the US dollar can continue to run higher in that case, but if the message from Powell remains neutral then equities could continue to rally again. RBA expected to be more aggressive with its tone on Tuesday and Wednesday The RBA is expected to hike rates again by 25bps. However, the key is to watch RBA commentary - and if the RBA continues with its more hawkish tone. Consider the RBA’s aggressive rhetoric of making further hikes has pressured the Australian equity market, with the market now expecting interest rates to peak at 4.2% in September, with potentially no rate cuts this year. Should the RBA maintain its aggressive shift, the Aussie dollar (AUDUSD) could knee-jerk higher. RBA Governor Philip Lowe speaks the next day, on Wednesday, at the AFR Business Summit. Key agenda items to watch on China’s Two Sessions this week The key events to watch on the agenda of the National People’s Congress (NPC) this week are the presentation of the state institution reform proposal on Tuesday and the announcements of the appointment of top leaders and senior officials from Friday to Sunday. The NPC will conclude next Monday morning, March 13. China’s outstanding aggregate financing expected to rise as loans and bond issuance picking up While seasonality may drive a fall in new aggregate financing in February from January, the year-on-year growth of the outstanding amount is expected to pick up steam due to increases in bank loans and government bond issuance. The growth in CPI is expected to slow to 1.9% Y/Y in February from 2.1% in January and PPI to contract further to -1.3% Y/Y but the week’s highlight in the data front will be on the aggregate financing. Bank of Japan Governor Kuroda’s final meeting This week will be the last Bank of Japan meeting for its current Governor Kuroda, and there remain risks that he may part with sparks. Inflation and wage growth continue to pick up pace in Japan, even though growth signals have been bleak lately and are relying on a strong pickup in Chinese demand. Incoming Governor Ueda has also signaled policy continuity, with hints that he echoes Kuroda’s views on inflation being externally-driven and likely to come off soon. Tokyo CPI for February also came off its January highs, but mostly driven by PM Kishida’s subsidies that reduced the electricity price burden. If Kuroda ends his term with a very dovish tone, that could spell trouble for yen, especially if US yields continue their run higher this week. Company news to watch this week All eyes will be CATL - which is Tesla’s battery supplier and the world’s largest battery maker. The market is expecting revenue growth of above 80% and full-year EPS of 2.65. We think CATL’s results could be a pleasant surprise to the market, given it sold its $856 million stake in Australia’s biggest lithium company, Pilbara Minerals. CATL’s outlook will also be watched closely – as a guage of how much car makers battery costs could rise in 2023. Adidas results will also be on watch. As reported in Saxo’s Quick Take on Friday, the company accrued a large amount of Yeezy sneaker-inventory after Adidas abruptly ended Ye’s partnership. After a poor string of results, analysts expect Adidas to report Q4 revenue of €5.2bn up 1% y/y and EBITDA of €-419mn.Also on watch, are CrowdStrike (CRWD), Campbell Soup (CPB), JD.com (JD) and Oracle (ORCL) results. We cover what’s worth watching with these industry proxies in our Week Ahead report, which you can access here. The world’s largest commodity miners go-ex-dividend; which could trigger a rise in volatility   Woodside goes ex-dividend on March 8, followed by BHP and Rio on March 9. For investors it means they will  have a volatile week, while option holders of these stocks won’t see a change. For other investors implications and what else to know, click here.   Macro data on watch this week: Monday 6 March South Korea CPI (Feb) Eurozone S&P Global Construction PMI (Feb) Germany S&P Global Construction PMI (Feb) United Kingdom S&P Global/CIPS Construction PMI (Feb) Eurozone Retail Sales (Jan) United States Factory Orders (Jan) Tuesday 7 March South Korea GDP (Q4, revised) Australia Trade Balance (Jan) China (Mainland) Trade (Feb) Australia RBA Cash Rate (7 Mar) Germany Industrial Orders (Jan) Taiwan CPI and Trade (Feb) United States Wholesale Inventories (Jan) Fed Chair Powell’s Testimony Before Senate Wednesday 8 March Japan Current Account (Jan) Germany Industrial Production and Retail Sales (Jan) Eurozone GDP (Q4, revised) United States ADP National Employment (Feb) United States International Trade (Jan) Canada Trade Balance (Jan) United States JOLTS Job Openings (Jan) Canada BoC Rate Decision (8 Mar) Fed Chair Powell’s Testimony Before House Thursday 9 March Japan GDP (Q4, revised) China CPI, PPI (Feb) Malaysia Overnight Policy Rate United States Initial Jobless Claims Friday 10 March Germany CPI (Feb, final) United Kingdom monthly GDP (Jan) United Kingdom Goods Trade Balance (Jan) United States Non-Farm Payrolls, Unemployment, Average earnings (Feb) Canada Unemployment Rate (Feb) Japan BOJ Rate Decision (10 Mar) China M2, New Yuan Loans, Loan Growth (Feb) Earnings on watch this week: Monday: Trip.com Tuesday: Ashtead Group, Sea Ltd, Ferguson, Crowdstrike Wednesday: Ping An Bank, Thales, Adidas, Geberit, Cathay Pacific Thursday: CATL, Deutsche Post, JD.com, Prada Friday: Daimer Truck, AIA Group, Oracle, DiDi Global   Source: Saxo Spotlight: What’s on the radar for investors & traders this week? | Saxo Group (home.saxo)
Analysis Of Situation Of The USD/INR Pair

The USD/INR Pair Remains In Bearish Mood

TeleTrade Comments TeleTrade Comments 06.03.2023 08:38
USD/INR bounces off multi-day low to consolidate the first weekly loss in six. Convergence of 100-DMA, 23.6% Fibonacci retracement guards recovery moves. A 4.5-month-old symmetrical triangle advocates volatility; 200-DMA appears extra filter towards the south. USD/INR prints mild gains around 81.85 as the bears lick their wounds early Monday. In doing so, the Indian Rupee (INR) pair rebounds from the lowest levels since February 02, marked the previous day, to consolidate the biggest weekly loss since early November. It’s worth noting that the quote marked the first weekly negative closing in six by the end of Friday’s North American session. Overall, the USD/INR pair remains inside a broad symmetrical triangle comprising multiple levels marked since October 2022, currently between 82.90 and 81.30. That said, the bearish MACD signals and downbeat RSI (14) raise doubts about the USD/INR pair’s corrective bounce off the multi-day low. Even if the quote remains firmer, the 100-DMA and 23.6% Fibonacci retracement level of the pair’s August-October 2022 upside, near 82.15-20, appears a tough nut to crack for the USD/INR bulls. On the contrary, the USD/INR pair’s fresh weakness could aim for the stated triangle’s support line of around 81.30 before challenging the 200-DMA support of near the 81.00 round figure. Should the USD/INR pair remains weak past 81.00, lows marked during January 2022 and the last November, respectively near 80.90 and 80.35, might gain the market’s attention. USD/INR: Daily chart Trend: Bearish
RBNZ preview: Fiscal spending argues for a hawkish 25bp hike

The NZD/USD Pair Is Likely To Grind Lower Further

TeleTrade Comments TeleTrade Comments 06.03.2023 08:41
NZD/USD fades bounce off three-month low, holds lower ground of late. Bearish MACD signals join failure to cross the convergence of 100-SMA, one-month-old resistance line to lure sellers. Fortnight-long horizontal support area restricts immediate downside ahead of February’s low. NZD/USD remains depressed around 0.6210 as it pares the previous week’s gains, the first in five, heading into Monday’s European session. In doing so, the Kiwi pair portrays the bear’s dominance between the key trading area between the 0.6245-50 resistance confluence and 0.6200-6190 support zone. That said, the bearish MACD signals join the pair’s failure to cross the 0.6245-50 resistance confluence, including the 100-bar Simple Moving Average (SMA) and a one-month-long descending resistance line, to keep sellers hopeful. However, multiple levels marked since late February could challenge the NZD/USD pair’s immediate downside around 0.6200-6190. Should the quote remains weak past 0.6190, the odds of witnessing a quick drop to the previous monthly low of 0.6131 can’t be ruled out. Though, July 2022 low of 0.6060 and the 0.6000 psychological magnet could restrict the pair’s further downside. Alternatively, a successful break of the 0.6250 hurdle becomes necessary to direct the NZD/USD buyers toward the 200-SMA hurdle of 0.6335. Following that, the mid-February high surrounding 0.6390 and the 0.6400 round figure could become important to watch for the bulls. Overall, NZD/USD is likely to grind lower and advocates further volatility. NZD/USD: Four-hour chart Trend: Limited downside expected
The USD/MXN Pair’s Further Moves Rely On The Mexican Inflation Data

The Mexican Peso (MXN) Pair Tracks The Market’s Consolidation Mode

TeleTrade Comments TeleTrade Comments 06.03.2023 08:43
USD/MXN licks its wound near the lowest levels since April 2018. Mexican Peso marked the biggest weekly gains in seven months amid broad US Dollar declines. Key data/events eyed for clear directions, Fed Chair Powell needs to defend hawkish bias to avoid further USD fall. USD/MXN prints mild gains around 17.98 as it pares the biggest weekly loss in seven months during early Monday in Europe. In doing so, the Mexican Peso (MXN) pair tracks the market’s consolidation mode ahead of the top-tier data events. Even so, the US Dollar’s failure to regain the upside momentum, mainly due to the downbeat Treasury bond yields, joins the fresh concerns suggesting a monetary policy divergence between the US Federal Reserve (Fed) and Banxico to probe the USD/MXN buyers. The recently mixed concerns surrounding China and the weakness in Oil prices could be linked to the USD/MXN pair’s latest rebound. That said, the National Development and Reform Commission of the People's Republic of China (NDRC) recently said, it “Will further release the potential for consumption,” while also adding that China's economy steadily improving, per Reuters. Earlier in the day, market sentiment turned sour after China’s annual session of the National People's Congress (NPC) appeared a grim event due to its growth target and geopolitical concerns. Elsewhere, the Fed policymakers’ indecision and mixed US data contrast with Banxico’s hawkish bias to keep the USD/MXN bears hopeful. During the weekend, San Francisco Federal Reserve Bank President Mary Daly highlighted the importance of incoming data to determine how high the rates can go. Previously, Atlanta Fed President Raphael Bostic renewed concerns about the Fed’s policy pivot while Federal Reserve published a semi-annual Monetary Policy Report on Friday wherein it clearly said, “Ongoing increases in the Fed funds rate target are necessary.” The report also stated that the Fed is strongly committed to getting inflation back to 2%. Talking about the data, softer prints of the latest US Consumer Confidence, ISM PMI and Durable Goods Orders seem to challenge the US Dollar bulls. Alternatively, Mexico’s upbeat outcomes of the seasonally adjusted Trade Balance and Unemployment Rate for January seemed to have favored the USD/MXN bears. Against this backdrop, US 10-year Treasury bond yields, rose to the highest levels since November 2022 in the last week before easing to 3.95% by the end of Friday, making rounds to the same level at the latest. More importantly, the US two-year bond coupons rose to the highest levels last seen in 2008 before retreating to 4.85% by the press time. That said, the S&P 500 Futures print mild gains, tracking Wall Street’s moves amid a light sluggish start to the key week. Looking forward, Fed Chair Jerome Powell’s Testimony, China’s inflation data and Friday’s US jobs report for February, are likely to be the key catalysts to watch for clear directions. At home, Mexican Inflation data for February, up for publishing on Thursday, will be crucial for the guide. Technical analysis Although April 2018 low near 17.93 restricts immediate USD/MXN downside, the pair’s recovery moves remain unimpressive below the previous support line from late November 2022, close to 18.15 by the press time.
USD/CAD - Canadian economy added 41,400 jobs beating expectations

A Modest Pullback In Crude Oil Prices Undermines The Commodity-Linked Loonie

TeleTrade Comments TeleTrade Comments 06.03.2023 08:47
USD/CAD struggles to gain any meaningful traction and oscillates in a range on Monday. Retreating US bond yields keeps the USD bulls on the defensive and acts as a headwind. A modest downtick in Oil prices undermines the Loonie and lends support to the major. The USD/CAD pair kicks off the new week on a subdued note and seesaws between tepid gains/minor losses, around the 1.3600 mark heading into the European session. The pair, meanwhile, remains within Friday's broader trading range and is influenced by a combination of diverging forces. A softer tone surrounding the US Treasury bond yields keeps the US Dollar bulls on the defensive, which, in turn, acts as a headwind for the USD/CAD pair. That said, a modest pullback in Crude Oil prices - amid worries that a deeper global economic downturn will dent fuel demand - undermines the commodity-linked Loonie and lends some support to the major. The fears resurfaced after China set a lower-than-expected target for economic growth and forecast that the economy would expand by 5% in 2023. Apart from this, growing acceptance that the Federal Reserve will stick to its hawkish stance favour the USD bulls and support prospects for the emergence of some dip-buying around the USD/CAD pair. The incoming US macro data indicated that inflation isn't coming down quite as fast as hoped and pointed to an economy that remains resilient despite rising borrowing costs. Adding to this, a slew of FOMC members backed the case for higher rate hikes and opened the door for a 50 bps lift-off at the March policy meeting. Hence, the market focus will remain glued to Fed Chair Jerome Powell's semi-annual congressional testimony on Tuesday and Wednesday. Powell's comments will be closely scrutinized for clues about the Fed's future rate-hike path, which will play a key role in influencing the near-term trajectory of the USD. Investors this week will also confront the release of the closely-watched US monthly jobs report, popularly known as NFP on Friday, to determine the next leg of a directional move for the USD/CAD pair and before placing aggressive bets. Heading into the key event/data risks, the US bond yields and the broader market risk sentiment will continue to drive the USD demand and provide some impetus to the USD/CAD pair. Apart from this, Oil price dynamics should allow traders to grab short-term opportunities in the absence of any relevant market-moving economic releases on Monday, either from the US or Canada. Nevertheless, the aforementioned fundamental backdrop favours bullish traders and suggests that the path of least resistance for the major is to the upside.
Central Banks and Inflation: Lessons from History and Current Realities

Further Upside Movement Of The GBP/JPY Pair Is Expected

TeleTrade Comments TeleTrade Comments 06.03.2023 08:51
GBP/JPY picks up bids to pare intraday losses, mildly offered after three-week uptrend. 50-EMA, one-month-old ascending trend line restricts immediate downside. Sluggish oscillators channel buyers on their way to refresh 2023 top. GBP/JPY marks a consecutive fourth bounce off a one-month-old ascending trend line, as well as the 50-bar Exponential Moving Average (EMA), as it consolidates the daily loss around 163.35 during the early hours of Monday’s trading in London. It’s worth observing that the sluggish prints of the MACD signals, mostly bearish, join the steady RSI (14) line to challenge the cross-currency pair’s immediate moves. Also acting as an immediate upside hurdle is the 23.6% Fibonacci retracement of February’s upside, near 163.80. Following that, 164.50 and 164.80 can act as extra filters to the north before directing the GBP/JPY bulls towards the previous monthly high, also the highest level of 2023, surrounding the 166.00 round figure. Should the quote remains firmer past 166.00, the last December’s peak of 169.30 and the 170.00 psychological magnet might lure the GBP/JPY buyers ahead of highlighting the previous yearly top of 172.13 as the next target. On the flip side, a clear downside break of the 163.00 support confluence could quickly fetch the GBP/JPY price towards the mid-February peak of near 162.20. If the cross-currency pair remains weak past 162.20, the 50% and 61.8% Fibonacci retracement levels, around 161.35 and 160.30 in that order, can lure the bears. GBP/JPY: Four-hour chart Trend: Further upside expected
Analysis Of The AUD/USD Pair By Markets Strategist Quek Ser Leang And Senior FX Strategist Peter Chia

The Australian Dollar is unlikely to advance much further

TeleTrade Comments TeleTrade Comments 06.03.2023 08:59
In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, AUD/USD has now likely moved into a consolidative range. Key Quotes 24-hour view: “Last Friday, we expected AUD to trade sideways between 0.6700 and 0.6760. While AUD rose to 0.6775, there is no marked improvement in upward momentum. Today, AUD is unlikely to advance much further. Instead, AUD is more likely to trade between 0.6735 and 0.6780.” Next 1-3 weeks: “We have a negative AUD view since the middle of last month. In our latest narrative from last Thursday (02 Mar, spot at 0.6755), we indicated that ‘downward momentum is waning rapidly and the odds for AUD to weaken further have diminished considerably’. In NY trade, AUD rose to a high of 0.6775. While our ‘strong resistance’ level at 0.6800 is not breached, downward momentum has more or less fizzed out. In other words, the weak phase in AUD has ended. The current price actions are likely the early stages of a consolidation phase and AUD is likely to trade between 0.6695 and 0.6820 for the time being.”  
InstaForex's Ralph Shedler talks Euro against Japanese yen

The Downside For The USD/JPY Pair Seems Cushioned Amid The Divergent Bank Of Japan-Federal Reserve Monetary Policy Outlook

TeleTrade Comments TeleTrade Comments 06.03.2023 09:02
USD/JPY drifts lower for the second successive day on Monday, albeit lacks follow-through. Retreating US bond yields keeps the USD bulls on the defensive and exerts some pressure. The divergent Fed-BoJ policy outlook limits losses ahead of this week’s key event/data risks. The USD/JPY pair remains under some selling pressure for the second successive day on Monday and moves further away from the YTD peak, around the 137.10 region touched last week. The pair, however, recovers a few pips from the daily low and trades just above mid-135.00s during the early European session, down around 0.20% for the day. The US Dollar kicks off the new week on a subdued note amid a modest downtick in the US Treasury bond yields and turns out to be a key factor weighing on the USD/JPY pair lower. Apart from this, looming recession risks seem to benefit the safe-haven Japanese Yen (JPY) and contribute to the offered tone surrounding the major. Worries about a deeper global economic downturn resurfaced after China set a lower-than-expected target for economic growth and forecast that the economy would expand by 5% in 2023. The downside for the USD/JPY pair, meanwhile, seems cushioned amid the divergent Bank of Japan-Federal Reserve monetary policy outlook. In fact,  the incoming BoJ Governor Kazuo Ueda stressed the need to maintain the ultra-loose policy to support the fragile economy and said last week that the central bank isn't seeking a quick move away from a decade of massive easing. In contrast, the US central bank is universally expected to stick to its hawkish stance and keep rates higher for longer to tame high inflation. The incoming US macro data indicated that inflation isn't coming down quite as fast as hoped and pointed to an economy that remains resilient despite rising borrowing costs. Adding to this, a slew of FOMC members backed the case for higher rate hikes and opened the door for a 50 bps lift-off at the March policy meeting.  This should act as a tailwind for the US bond yields and favours the USD bulls, which supports prospects for the emergence of dip-buying around the USD/JPY and warrants caution for bears. Traders might also prefer to move to the sidelines ahead of this week's key event/data risks, starting with Fed Chair Jerome Powell's semi-annual congressional testimony on Tuesday and Wednesday. Investors will look for fresh clues about the Fed's future rate-hike path, which will play a key role in influencing the near-term USD price dynamics. This will be followed by the BoJ monetary policy meeting on Friday and the release of the closely-watched US monthly employment details, popularly known as NFP.
Metals Market Update: Decline in LME Copper On-Warrant Stocks, Zinc and Lead Surplus Continues, Nickel Market in Supply Surplus

FX Daily: Climbing the wall of worry

ING Economics ING Economics 06.03.2023 09:10
FX markets have opened the week on a steady footing, buoyed by a strong end to last week from equities and appearing to shake off a slightly lower-than-expected growth target from China. This week's focus will very much be on central bankers and activity data - the highlights being Fed Powell testimony (Tuesday and Wednesday) plus US jobs growth (Friday) USD: How strong is the US economy and what will the Fed do about it? After a few weeks where US price data has taken centre stage, this week will all be about activity data and Fed speak. On the activity side, Friday's release of February US jobs data should shed light on whether January's +517,000 surge was an aberration powered by seasonal adjustment factors or a genuinely strong number. Our US economist, James Knightley, tends to favour the former interpretation - although conviction levels are low. Running up to Friday's job data will be Wednesday's release of JOLTS and ADP data - again providing insights as to whether tight conditions in US labour markets are starting to ease. The other US highlight this week will be testimony to the Senate (Tuesday) and House (Wednesday) from Federal Reserve Chair Jerome Powell. He will be testifying on the Fed's semi-annual monetary policy report which was released on Friday. The market will be interested to hear what he thinks about re-accelerating the pace of hikes to 50bp from 25bp (+30bp is priced for the 22 March meeting) and any indication on what the terminal rate might be. Recently, we have been writing that an upward revision to the Dot Plots on 22 March will discourage investors from aggressively re-establishing dollar short positions. This week also sees central bank policy meetings in Japan, Australia, Canada, and Poland. Of these, the Reserve Bank of Australia (RBA) is the only one expected to hike rates (+25bp). However, Friday's Bank of Japan (BoJ) meeting will prove interesting as will tomorrow's release of Japanese wage data for January. Another widening of the BoJ's 10-year JGB target band on Friday would be a big surprise and drag USD/JPY lower. What does this all mean for the dollar? In today's session, the dollar has not found too much support from a slightly lower-than-expected Chinese growth target for 2023 at 5.0% (5.5-6.0% had been expected). Equally, equities continue to hold up quite well despite last week's big rise in bond yields and are providing a little support to pro-cyclical currencies. In all, we suspect it is another range-bound week for the dollar, where DXY continues to trade in a 104.00-105.50 range and local stories can win out.  Chris Turner EUR: ECB helps build the 1.05 EUR/USD floor European Central Bank speakers continue to point to a 50bp hike at the 16 March meeting as being a done deal. The market then prices a further 150bp of tightening by year-end - which looks a little aggressive. Still, the tough ECB talk has kept the EUR:USD interest rate differential supported at the short end of the market and firmed up the 1.05 support zone for EUR/USD this month. We think EUR/USD probably ends March in the 1.07/1.08 area. For today, the eurozone focus will be on January retail sales and the March Sentix Investor survey. Improvements are expected for both, although may not move markets. We also have ECB Chief Economist, Philip Lane, speaking in Dublin at 11 CET. He has recently shifted over to the hawkish side and it is probably too early for him to push back against the market's pricing of the ECB deposit rate at 4.00%. EUR/USD probably trades well inside a 1.0600-1.0700 range today. Elsewhere in Europe, Switzerland sees February CPI. The market expects some deceleration from January's firm readings. Any upside surprise could pressure EUR/CHF in its latest 0.9900-1.0000 range. Chris Turner GBP: Steady sterling this week This week it is hard to find a UK catalyst for sterling to break out of recent ranges. We doubt any further progress on the Windsor Framework deal is worth much more to sterling. And having heard from Bank of England big hitters (Andrew Bailey and Huw Pill) last week, we doubt that this week's BoE speakers make much of a dent in market pricing of the BoE cycle. Activity data for January looks like it could come in on the softish side, although the services sector will be in focus following the recent jump in the services PMI reading. In all, EUR/GBP should trade well within a 0.8800-0.8900 range, while GBP/USD will be bounced around on this week's big inputs from the US events calendar. Chris Turner CEE: Inflation numbers leave no room for rate cuts A busy calendar awaits us this week in the CEE region. Today, we start with labour market data in the Czech Republic, key for the Czech National Bank, and retail sales in Hungary. On Tuesday, industrial production for January will be released, which should confirm a weakening economy. On Wednesday, we will also see February inflation in Hungary, as the first number within the CEE region. We expect only a slight drop from 25.7% to 25.4% year-on-year, in line with market expectations, but also slightly higher core inflation. Later on, we will see the decision from the National Bank of Poland. In line with the market, we expect interest rates to remain unchanged. However, the main focus will be Governor Adam Glapinski's press conference a day later. The central bank will also publish a new forecast. While inflation was lower than expected in January, core inflation remains high. So the question will be how the governor's tone will change since the last forecast and whether he will officially announce the end of the hiking cycle or mention a possible rate cut later this year. We then move to the Czech Republic on Friday, where industrial production and inflation data will be published. CPI, in our view, fell slightly from 17.5% to 16.9% YoY, above the market and CNB forecasts.  In the sovereign rating space, Fitch maintained a negative outlook for the Czech Republic on Friday. In Hungary, Moody's again did not publish a rating review as it did in September, which means that the outlook and rating remain unchanged, and presumably, the agency is waiting further for developments in the negotiations between the Hungarian government and the European Commission regarding access to EU money.  On the FX side, global conditions for the CEE region remain mixed. The US dollar will hamper EM currencies, on the other hand, gas prices broke 45 EUR/MWh on Friday indicating a further rally in the Hungarian forint and Czech koruna. February inflation data should be a boost to both currencies, confirming the current hawkish market pricing, leaving no room for early rate cuts. On the other hand, a dovish NBP may bring pain to the Polish zloty. Thus, it will be key to watch for indications of a first rate cut during the governor's press conference on Thursday. The Czech koruna could retest levels below 23.40 EUR/CZK and the Hungarian forint below 375 EUR/HUF. However, the Polish zloty should test weaker levels above 4.740 EUR/PLN again.  Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Crude Prices Are Rallying After A Mixed Jobs Report Sent The Dollar Lower

Crude Oil Declined After China Announced Cautious Growth Targets

Saxo Bank Saxo Bank 06.03.2023 11:17
Summary:  Equity markets surged higher on Friday as the treasury market suddenly found solid support on Friday, taking the US 10-year yield back below 4.00%. At the weekend, China set a “modest” growth target of around 5% at key meetings. The week ahead is thick with central bank action, starting with the RBA on Tuesday, with Fed Chair Powell testimony up tomorrow and Wednesday, and Friday’s Bank of Japan meeting the likely highlight of the week, as it is Governor Kuroda’s last meeting. What is our trading focus? US equities (US500.I and USNAS100.I): strong rally as bond yields decline US equities rallied strongly on Friday with S&P 500 futures gaining 1.7% pushing above the 4,000 level closing at 4,050 with the momentum extending this morning. The rally in US equities came on the back of a ISM report showing the US economy is still humming along. US bond yields declined on Friday together with a weaker USD helping lift sentiment in equities which was an odd move given that inflation expectations were rising last week. This week we have Fed President Powell’s speech that could impact equities (read our preview below). In S&P 500 futures the 4,100 is a key upside level to watch if momentum extends. Hang Seng Index and CSI 300 oscillated on a modest Government Work Report The Hang Seng Index and CSI 300 Index oscillated after China set out a modest GDP growth target for 2023 and signalled a measured approach to fiscal and monetary policies as well as balanced support to the housing sector with avoiding systemic risks as a key priority. Lenovo (00992:xhkg) rising over 4% and reaching a new high, was the biggest gainer. The PC and server maker gained following its arch-rival in the server business, Inspur (000977:xsec) might be having difficulties in getting US parts after Inspur’s parent being put on the US ‘entity list’. FX: GBP recovers post-Bailey losses The USD was broadly weaker last week after a run higher in February on expectations that most of the Fed’s tightening is priced in and yields are potentially reaching close to their peaks. This week brings a test of this rhetoric with Chair Powell’s testimony and the US jobs report scheduled for release. GBPUSD once again found support at 1.1920 despite a dovish turn by BOE Gov Bailey last week, and returned to 1.2040. AUDUSD worth a watch again this week with support at 0.67 being eyed as the RBA meets Tuesday and China’s lower growth expectations may weigh. USDJPY has reversed back below 136 as yields gains ease, but if US yields continue their run higher and/or Governor Kuroda stays overly dovish at his final Bank of Japan meeting this week then a return to 137+ remains likely. Crude oil whipsaws with no clear direction yet to emerge  Crude oil prices faced strong two-way action on Friday with an initial move lower by over 2% on a WSJ report, later denied, saying the UAE is debating internally whether to leave OPEC, before finishing on a strong note on short covering after across market risk appetite improved and traders looked to China’s policy meetings over the weekend for support.  Overnight, however, crude declined after China, the world’s top oil imported, announced cautious growth targets and avoided any larger stimulus measures. Crude oil remains stuck within narrowing ranges, Brent between $81 and $89 with focus returning to the US and speeches from Powell to policy makers on Capital Hill Tuesday and Wednesday, as well as Friday’s job report.    Gold supported by drop in US real yields Gold rallied strongly last week after the market started pricing in higher long-term inflation, thereby challenging the FOMC’s own targets. While support was provided by US ten-year yields dropping back below 4% on Friday to end the week close to unchanged, it was developments in Breakeven (inflation) up 14 bps on the week and real yields, down 13 bps that helped support gold’s recovery. The close back above the 21-DMA on Friday, now at $1844, signaling a return of positive momentum, the strength of which may still be challenged this week with Powell speeches and Friday's job report the focus. For the current recovery, to attract support from technical buyers, prices as a minimum need to break $1864, and silver $22 to signal an end to the recent period of weakness. Copper takes China’s cautious growth target on the chin Copper trades close to unchanged after China set a cautious economic growth target with no major new stimulus measures being announced. With the focus primarily on supporting and stabilizing the economy, the metal could still be challenged in the short term by long liquidation from bulls having bet too heavily on the recovery story and increased spending towards infrastructure projects. Especially considering the recent buildup in inventories monitored by futures exchanges in London and not least in Shanghai. We maintain our long-held bullish outlook for copper and industrial metals in general but with China not providing growth stimulus, the short-term outlook may equally depend on whether other large economies can avoid a recession. US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) rallied with the 10-year yield reversing to below 4% After spending one day above 4% on Thursday, yields on the 10-year Treasury notes reversed and returned to below 4% and settled at 3.95% to close the week on Friday. Headlines were light. The decline in the ISM Services Index in February was smaller than expected and initially saw the short-end lower in prices and higher in yields before the losses faded and reversed as strong bids emerged in the long ends in the afternoon. The 2-10-year spread bull flattened 7bps to -91. What is going on? China’s 2023 GDP growth target at “around 5%” China sets a real GDP growth target of "around 5%" for 2023 in the Government Work Report to the National People's Congress. This target is at the lower end of expectations ranging from 5% to 5.5% going into the meeting. Other key macroeconomic targets include adding 12 million jobs to urban area employment for 2023, a consumer inflation target of 3%, and a fiscal deficit target of 3% of nominal GDP. The report emphasizes the importance of boosting domestic aggregate demand, particularly household consumption, and aims to deepen the reform of state-owned enterprises. For more details, see our note here. COT reporting on Brent and (delayed) gold Hedge funds raised bullish bets on Brent crude oil by 9.4k lots to near a 15-month high at 286k lots in the week to February 28. The cost of holding a short position in Brent, reflected through the current backwardation, supported a continued collapse in the gross short to a 12-year low at 22k lots.  While the ICE Europe Exchange is up to date in its reporting, the US CFTC is still catching up following a January 31 cyberattack on ION Cleared Derivatives, a third-party software and service provider for derivative trading. The latest report covered the week to February 7, when gold reached $1975 before crashing to $1885, triggering a 29% drop in the net long to 79k. The CFTC is expected to be up to data around mid-March. US ISM services stays strong The headline ISM services cooled less than expected in February, falling to 55.1 from 55.2 in January, better than the expected 54.5. The prices paid component, which raised concerns again about the disinflation rhetoric from the manufacturing ISM report last week, cooled only slightly to 65.8 from 67.8 in January, showing sticky services prices. Employment rose to 54 from 50.0, matching the highest since March 2022 and therefore showing more signs of a tight labour market. New orders accelerated to 62.6 from 60.4 but business activity slowed to 56.3 from 60.4. Fed members continue to sound hawkish, eyes on Powell Fed member Mary Daly (non-voter in 2023) was on the wires over the weekend, and sounded hawkish as she raised the prospects of an upward shift in the Fed’s dot plot as well. She said that inflation is still high, and the Fed has to think about 'continuous tightening', signalling higher rates and remaining at elevated levels for a longer period of time, if inflation stays hot. Another member Barkin (non-voter in 2023) also clearly said that there will be no rate cuts this year. Focus will be on data in the runup to the Fed’s March meeting, but Chair Powell’s testimony before the Congress and the February jobs report this week will be key for the markets, as noted below.. Japan unions pushing for record wage increase The Japanese Trade Union Confederation (JTUC, more commonly known as Rengo) says its survey of 2000+ unions in the country shows an average pay rise request of 4.49% this year. This is the highest since 1998's 4.36% and is much higher than the 2.97% sought in 2022. The Bank of Japan continues to highlight that wage growth is key for achieving sustained demand-pull inflation. Japan's "shunto" spring wage talks will be key to watch this month as any larger than expected increase in wages will fuel more tightening expectations for the Bank of Japan, having a profound impact on global liquidity as well. What are we watching next? Busy agenda this week for central banks, topped by BoJ on Friday It’s a busy week for central bank messaging this week. First up is the RBA, which we expect will hike the policy rate another 25-basis points to 3.60%. This is not fully priced into market expectations, and the market has priced a total of 52 basis points of tightening over the next three meetings, including tonight’s.  The terminal rate is currently priced near 4.15%. On Wednesday, the BoC will discuss the pace of monetary policy, but at its last meeting signaled that it would like to pause the hike cycle to assess the economy, given the steep pace of policy tightening. We expect interest rates will remain unchanged at 4.5% after eight consecutive hikes. In the US, Fed Chair Powell will testify before Senate and House panels on Tuesday and Wednesday, respectively, on the economy and monetary policy. He will face hours of questioning and political posturing from Congress members. Finally, the most anticipated central bank meeting of the week will be Friday’s Bank of JA France general strike against pension reform France will face a rolling general strike against the pension reform starting tomorrow. The strike is likely to be prolonged for at least 10 days according to the trade unions. This could push the country’s GDP into contraction this quarter. Union representatives at EDF warned of the risk of reduced power output from France’s nuclear power plants due to the strike. US February labor market data up on Friday The US Feb. Nonfarm payrolls change report for February will be released on Friday. In January, US job creation increased at a very strong pace (507k). Consensus expectation look for a return to trend in February (consensus at +200k). The February unemployment rate is expected to marginally increase to 3.5% from the multi-decade low of 3.4% posted in January. Overall, the U.S. labor market is still very resilient, in a very good shape. This is unlikely to influence the Fed’s monetary policy decisions in the short-term. Earnings to watch This week’s most important earnings releases are listed below with the most market attention going to earnings from Adidas, CATL, and JD.com. Adidas has a huge inventory of Yeezy sneakers following the abrupt end to the partnership with Ye that caused a massive writedown in the previous quarter and investors have generally lost short-term trust in Adidas following a string of bad results. Analysts expect Adidas to report Q4 revenue of €5.2bn up 1% y/y and EBITDA of €-419mn. CATL is the world’s largest battery maker and is firing on all cylinders with analysts expecting Q4 revenue growth of 87% y/y and EPS of CNY 2.65 down 11% y/y as the company has not passed on all input costs to its EV customers after a significant surge in lithium carbonate prices last year. Monday: Trip.com Tuesday: Ashtead Group, Sea Ltd, Ferguson, Crowdstrike Wednesday: Ping An Bank, Thales, Adidas, Geberit Thursday: CATL, Deutsche Post, JD.com Friday: Daimer Truck, AIA Group, Oracle, DiDi Global Economic calendar highlights for today (times GMT) 0930 – UK Feb. Construction PMI 1000 – ECB Chief Economist Lane to speak 1000 – Eurozone Jan. Retail Sales 1500 – Canada Feb. Ivey PMI 1500 – US Jan. Factory Orders 2330 – Japan Jan. Labor Cash Earnings 0030 – Australia Jan. Trade Balance 0330 – Australia RBA Cash Rate Target announcement    Source: Global Market Quick Take: Europe – March 6, 2023 | Saxo Group (home.saxo)
Despite The Improvement In The Outlook Due To Falling Energy Prices, The Economic Environment In Britain Remains Difficult

Despite The Improvement In The Outlook Due To Falling Energy Prices, The Economic Environment In Britain Remains Difficult

Marek Petkovich Marek Petkovich 06.03.2023 12:33
Unlike the Fed, whose officials are pretty clear about what they are going to do, the Bank of England prefers to be dramatic. It was the first among the world's major central banks to predict a recession in Britain's economy, and now it is trying to put a barrier in the way of the futures market, expecting to raise the repo rate to 4.6%. Before Andrew Bailey's speech, the peak forecast was even higher, at 4.8%, but the BoE head added drama. Bailey believes that the futures market is overestimating the expected repo rate peak. The Bank of England, at its last meeting, abandoned the presumption of the need for further increases, and now it would be a mistake to talk about both the end of the cycle of tightening of monetary policy, and that the cost of borrowing will necessarily rise. Everything will depend on the data, and the situation in Britain is fundamentally different from the U.S. Indeed, although consumer prices in the UK are still measured in double digits, core inflation slowed substantially in January from 6.3% to 5.8%. Dynamics of repo rate ceiling expectations Despite the mixed macro statistics for the UK, the futures market raised the anticipated repo rate ceiling on the assumption that the BoE would follow the Fed. Central banks usually move in packs, massively tightening or loosening monetary policy following their leader, the Fed. Nevertheless, history shows it is a mistake to count on the BoE blindly copying the actions of their U.S. counterparts. If the monetary restriction cycle in Britain comes to an end in March and continues in the U.S. until June, GBPUSD risks falling. In this regard, the Reuters consensus forecast of its growth to 1.22, 1.23 and 1.26 in 3.6 and 12 months looks too optimistic. Moreover, according to the results of three months, ending in January, the UK economy is expected to stagnate due to high inflation and the impact of high interest rates on household finances and business activity. According to Investec, despite the improvement in the outlook due to falling energy prices, the economic environment in Britain remains difficult. The service sector was unable to fully recover the December losses in January, including due to strikes. However, there are always two currencies in any pair, and no matter what problems the pound is experiencing, the weakening of the U.S. dollar against the background of disappointing U.S. employment statistics for February may become the basis for GBPUSD purchases. According to Bloomberg experts, the indicator will increase by 215,000, which is close to the late 2022 figures. According to FOMC member Christopher Waller, if all goes well, the federal funds rate will not exceed 5.5%. GBP/USD Technically, there is consolidation in the range of 1.194–1.214 on the GBPUSD daily chart. A breakout of its upper limit will increase the risks of growth to 1.22 and 1.23. On the contrary, a successful assault on support at 1.194 will be the basis for sales with a target of 1.182. Relevance up to 08:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336799
The RBA Raised The Rates By 25bp As Expected

Important Week For The Australian Dollar And Japanese Yen, BoJ And RBA Monetary Policy Decision Ahead

Kamila Szypuła Kamila Szypuła 06.03.2023 13:45
The US dollar weakened on Monday as investors awaited testimony from Federal Reserve Chairman Jerome Powell ahead of February's employment report later in the week, which is likely to influence how much more the US central bank raises interest rates. After making massive hikes last year, the Fed raised rates by 25 basis points in its last two meetings, but a plethora of resilient economic data fueled market fears that the central bank might return to an aggressive path. USD/JPY The yen pair started the week at 136.0380 but failed to stay above 136.00 and fell to 135.3890. After this fall, the USD/JPY pair rebounded, but at the beginning of the European session it fell again. Also after the second drop, the pair rebounded and managed to break above 136.00, but failed to hold. USD/JPY is trading below 136.00 at 135.94. The Japanese yen strengthened above 136 to the dollar amid general dollar weakness as investors cautiously awaited Tuesday and Wednesday's congressional testimony from Federal Reserve Chairman Jerome Powell. Meanwhile, the yen remains more than 6% below its January highs as Ueda, nominated governor of the Bank of Japan, doubled down on the bank's ultra-easy monetary policy. During the second parliamentary hearing of the approval process, Ueda stated that the benefits of the BJ stimulus outweigh the negative effects for the current economic scenario, adding that a move to more restrictive policies would only be necessary if inflation increased significantly. Ahead this week, the Bank of Japan’s (BoJ) monetary policy decision will be made on Friday although the market is not expecting any changes there. EUR/USD The EUR/USD pair started trading at 1.0628 and initially traded in the range 1.0625-1.0630. The euro pair then rose to levels around 1.0650, then to above 1.0660. This increase in the European session did not last and the pair dropped to levels around 1.0625. The euro may end the month slightly higher against the dollar, supported by signals from the European Central Bank about further interest rate hikes. ECB officials continue to point to a 50bps rate hike at its March 16 meeting as a deal done, with the market pricing in another 150bps hike by year-end GBP/USD The cable pair started trading at 1.2032 and held in the range of 1.2025-1.2040 in the Asian session. In the European session, the GBP/USD pair, as well as the EUR/USD pair, fell below 1.20, but rebounded and at the time of writing is at 1.2008. Sterling trading could be stable this week as it's hard to find a catalyst to break the currency out of recent ranges. Any further progress on the UK-EU deal to review post-Brexit trade arrangements in Northern Ireland is unlikely to be worth much more than pound sterling. AUD/USD The Australian pair started the week with a dip to the 0.6757 level and then fell to the 0.6743 level. After this decline, the AUD/USD pair rose to 0.6770 but failed to maintain momentum. The last hours of the Asian session for the Australian were in the range of 0.6750-0.6760. With the start of the European session, the AUD/USD pair began a decline, and at the time of writing it reached the level of 0.6728. The Australian dollar lost some of its gains Monday morning after the Chinese National People's Congress (NPC) released more conservative 2023 GDP forecasts. The forecast is currently at 5%, as opposed to the expected range of 5.5-6%, which could be disappointing for commodity-exporting countries like Australia, but a lower base could allow for a better chance of an upside surprise. Looking ahead, the Reserve Bank of Australia (RBA) will be in the spotlight tomorrow morning with its interest rate decision. The consensus is in favor of another 25 bp rate hike, which will be the 10th rate hike in a row by the central bank. This could cause the Australian dollar to find some support against the US dollar Source: investing.com, finance.yahoo.com
The RBA’s aggressive rate tightening cycle will be continued

The RBA’s aggressive rate tightening cycle will be continued

Kenny Fisher Kenny Fisher 06.03.2023 14:00
The Australian dollar is under pressure at the start of the new trading week. AUD/USD is trading at 0.6735 in Europe, down 0.50%. RBA expected to hike by 25 bp The RBA is widely expected to raise rates by 25 basis points on Tuesday, which would bring the cash rate to 3.60%, the highest level in a decade. The RBA’s aggressive rate tightening cycle has not been as effective as the central bank had hoped, as inflation has been stickier than expected. Australia’s monthly CPI for January dropped to 7.4%, down from 8.4% a month earlier. This drop indicates that rate hikes are having an impact on the economy, but there is a long road ahead before inflation falls back to the RBA’s target of 2-3%. There was some positive news on Monday, as the Melbourne Inflation gauge for February showed a drop in core inflation to 4.9% y/y, down from 5.3% in January. The headline figure remained unchanged at 6.3% y/y. Australian Treasurer Jim Chalmers has said he is “cautiously hopeful” that inflation has peaked, but it’s likely that the RBA will have to hike rates at least one more time before it can hit the pause button. Investors will be keeping a close eye on Governor Lowe’s rate statement, which will likely be hawkish given the stubbornly high inflation levels. Any hints about the need for further rate increases would likely be bullish for the Australian dollar. In the US, it promises to be a busy week. The key events are Fed Chair Powell’s semi-annual testimony before Congress and the nonfarm payroll report, both of which could move the US dollar. The markets will be keeping a close eye on Powell’s remarks and whether he will sound less hawkish, given the recent string of unexpectedly strong US releases. Nonfarm payrolls sizzled in January with 517,000 new jobs, but this is expected to be a one-time bump, with the estimate for February standing at 200,000. The surprisingly resilient labour market has the Fed concerned about wage pressures, and a strong wage growth release could raise expectations for further rate hikes.   AUD/USD Technical AUD/USD is testing support at 0.6749. Below, there is support at 0.6660 There is resistance at 0.6862 and 0.7025 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Lagarde's Dilemma: Balancing Eurozone's Slowdown and Inflation Pressure

At The Close Of The New York Stock Exchange Only NASDAQ Composite Fell 0.11%

InstaForex Analysis InstaForex Analysis 07.03.2023 08:00
At the close of the New York Stock Exchange, the Dow Jones rose 0.12%, the S&P 500 rose 0.07%, and the NASDAQ Composite fell 0.11%. Markets are also awaiting information from the US labor market, which will be published on Friday. According to market strategist at Nikko Asset Management John Weil, the data for February may turn out to be worse than in January, and this will calm investors a bit in their fears of too sharp tightening of monetary policy. Dow Jones Merck & Company Inc was the top performer among the components of the Dow Jones index today, up 4.22 points or 3.95% to close at 111.10. Apple Inc rose 2.80 points or 1.85% to close at 153.83. Coca-Cola Co rose 0.92 points or 1.55% to close at 60.36. Shares of Dow Inc became the leaders of the fall, the price of which fell by 1.21 points (2.07%), ending the session at 57.11. Walgreens Boots Alliance Inc was up 1.77% or 0.64 points to close at 35.45, while Intel Corporation was down 1.55% or 0.41 points to close at 25.99 S&P 500 Leading gainers among the components of the S&P 500 in today's trading were Lumen Technologies Inc, which rose 4.10% to 3.30, Merck & Company Inc, which gained 3.95% to close at 111.10. as well as Enphase Energy Inc, which rose 3.77% to end the session at 225.35. DexCom Inc was the leading gainer, shedding 7.87% to close at 113.25. Shares of Newell Brands Inc shed 7.23% to end the session at 13.48. VF Corporation (NYSE:VFC) was down 5.37% to 24.85. NASDAQ The top performers in the NASDAQ Composite Index today were Appreciate Holdings Inc, which rose 152.89% to hit 3.06, Unicycive Therapeutics Inc, which gained 153.06% to close at 1.24, and also shares of Bellerophon Therapeutics Inc, which rose 94.11% to end the session at 3.51. The leading gainers were Aclaris Therapeutics Inc, which shed 44.68% to close at 7.07. Shares of Rubius Therapeutics Inc shed 33.55% to end the session at 0.08. Quotes of Embark Technology Inc decreased in price by 32.81% to 2.56. Numbers On the New York Stock Exchange, the number of depreciated securities (1981) exceeded the number of closed in positive territory (1051), and quotes of 109 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,420 companies fell in price, 1,237 rose, and 143 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.65% to 18.61. Gold Gold futures for April delivery lost 0.12%, or 2.15, to hit $1.00 a troy ounce. In other commodities, WTI April futures rose 1.10%, or 0.88, to $80.56 a barrel. Futures for Brent crude for May delivery rose 0.55%, or 0.47, to $86.30 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged at 0.44% to 1.07, while USD/JPY edged up 0.06% to hit 135.93. Futures on the USD index fell 0.21% to 104.27.   Relevance up to 03:00 2023-03-08 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315102
Bank of Japan keeps the rate unchanged, Tokyo Core CPI increases to 3.5%

The USD/JPY Price Is Under The Balance And MACD Indicator Lines

InstaForex Analysis InstaForex Analysis 07.03.2023 08:01
Yesterday's attempts to win back positions against the dollar were suppressed, and the pair ended the day above Friday's closing level by 9 points. The Marlin oscillator is persistently decreasing on the daily chart, but it also creates the potential for the oscillator to move into the overbought zone. We still have an uptrend, and the target is the nearest embedded line of the price hyperchannel around 137.75. If the price overcomes yesterday's low (135.38), it can continue to fall to the bottom line of the price channel around 134.00. On the four-hour chart, the price is under the balance and MACD indicator lines. The Marlin oscillator reverses upward, but it still needs to move into the positive area to support the bulls. In order for the pair to continue rising, the price needs to break through the MACD line at 136.53   Relevance up to 03:00 2023-03-08 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336879
Bank of England hikes rates and keeps options open for further increases

The GBP/USD Price Is In A Neutral Position

InstaForex Analysis InstaForex Analysis 07.03.2023 08:03
Yesterday, the pound fell by 18 pips. The price is in a neutral position - in the middle of a wide consolidation, bounded by levels 1.1914 and 1.2155. The Marlin oscillator is also indicative - it is getting closer to the zero line, but has never crossed it since February 3 - a wedge is forming, and the exit from this wedge may most likely be downward. An alternative scenario assumes that the price could rise maybe once or twice and break through 1.2155. The Marlin oscillator will then exit the wedge, and move into the area of the uptrend. On the four-hour chart, conditions for growth remain. Yesterday, the price received good support from the indicator lines, the signal line of the Marlin oscillator, when trying to overcome the zero line from top to bottom, reversed and went back to the area of growth (arrow). Basically, the price is consolidating on the MACD line, it can wind up on it, the more so because the MACD line itself lies in a horizontal trend, so until some decisive and fundamentally important moment, local signals for growth and decline will alternate. Investors are waiting for the key US employment data on Friday   Relevance up to 03:00 2023-03-08 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336881
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

There Are Conditions For The EUR/USD Price To Fall Below 1.0660

InstaForex Analysis InstaForex Analysis 07.03.2023 08:04
The euro rose 45 pips on Monday, breaking through the resistance level of 1.0660. The signal line of the Marlin oscillator tries to move into the area of the uptrend. Yesterday, I mentioned a possible false breakout above the target level, and right now there are conditions for the price to fall below 1.0660, first of all, it is a possible reversal of the Marlin from the zero line to the downside. If these don't stop the euro's correction, it could result in a target range of 1.0758/87. On the four-hour chart, the price forming a divergence with the oscillator also indicates the probable end of the correction. This will be confirmed once the price settles below 1.0660. We can only talk about bringing back the downward movement in the medium-term once the price breaks through the MACD line and the support level of 1.0595. However, the price is not in a hurry, because the US employment data will be released on Friday   Relevance up to 03:00 2023-03-08 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336883
Technical Outlook Of The Main EUR/USD Currency Pair

Technical Outlook Of The Main EUR/USD Currency Pair

InstaForex Analysis InstaForex Analysis 07.03.2023 08:07
Even though on the 4-hour chart the main EUR/USD currency pair shows a Bullish 123 pattern followed by Ross Hook (RH) but with the appearance of the Ascending Broadening Wedge pattern and the deviation between price movements and the Awesome Oscillator indicator it seems that in the near future Fiber will return to The initial bias is Bearish where if the correction to the upward rally does not break above the 1.0725 level then EUR/USD has the potential to depreciate to the 1.0566 level as the main target and the 1.0533 level will be the next target to go. (Disclaimer)   Relevance up to 04:00 2023-03-08 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120759
USDX Will Try To Test And Break Below The 103.50 Level

US Dollar Index Has The Potential To Go Downside

InstaForex Analysis InstaForex Analysis 07.03.2023 08:09
There is a few interesting things on the USDX 4 hour chart : 1. Bearish 123 pattern followed by the appearance of Ross Hook (RH). 2. Move inside the downside channel. 3. Move under the EMA 10. From those three things abobe seems like #USDX will continue the downside until if it manages to break below level 104,06. If this level successfully broken then #USDX has the potential to go downside up to the level 103,73 as the main target and the level 103,50 as the next target to be addressed as long as there is no upward correction passing through the level 104,97 because if this level successfully broken above then all the downward scenario that has been described before will cancel itself. (Disclaimer)   Relevance up to 04:00 2023-03-08 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120767
EUR/USD Pair Has A Potential For Short-Term Rally

EUR/USD Pair Has A Potential For Short-Term Rally

Oscar Ton Oscar Ton 07.03.2023 08:11
Technical outlook: EURUSD rallied through the 1.0696 high late during the New York session on Monday. The single currency pair is still seen to be trading just below 1.0690 at this point in writing as the bulls prepare to push through the 1.0720-40 zone. Immediate resistance is seen around 1.0720, which could put pressure and drag prices lower again. EURUSD is unfolding a corrective wave higher towards 1.0850 before the bears are back in control to drag prices below the 1.0500 interim support. The instrument is progressing within a larger-degree corrective wave towards 1.0100 in the next several weeks to come. Please note that the current rally from 1.0535 is just a retracement as the bears will be ready to come back from 1.0850. EURUSD faces resistance around 1.0720-40, followed by 1.0850; while interim support comes around the 1.0530 mark. Also, note that 1.0850 is the Fibonacci 0.618 retracement of the recent downswing between 1.1030 and 1.0530 levels respectively. Hence, the probability remains high for a bearish turn if prices manage to reach there. Trading idea: Potential short-term rally towards 1.0700-20 and 1.0850 then lower again Good luck!     Relevance up to 07:00 UTC+2 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315124
US core inflation hits 5.5% and it's the second lowest reading since November 2021

Bears Of The US Dollar Index Are Looking Inclined To Drag Lower

Oscar Ton Oscar Ton 07.03.2023 08:14
Technical outlook: The US dollar index slipped below 104.00 in the early Asia session on Tuesday. After carving an intraday low of 103.78, the index is seen to be trading above 103.85 at this point in writing. Bears are looking inclined to drag lower toward 103.20-25 in the near term before finding some bids coming. The US dollar index has carved a meaningful larger degree bearish boundary between 114.70 and 100.50 in the past several weeks. Since then, the index has been retracing higher and is projected toward 106.50 at least. In fact, the 0.618 Fibonacci retracement of the above bearish boundary is seen passing through 109.30, which could be the second target. The US dollar index has carved its first wave of the above corrective rally between 100.50 and 105.00. It is currently progressing lower towards 103.25 and up to 102.50 levels as the second wave unfolds. We can expect a rally toward 106.50 and 109.30 levels thereafter. Ideally, prices stay above 100.50 interim support. Trading plan: Potential near-term drop to 103.25 and 102.50 before the rally resumes. Good luck!     Relevance up to 08:00 UTC+2 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315128
Small factors combine to pressure credit

Analysis Of EUR/USD Pair: Support Is Now Seen Near 1.0650

Torben Melsted Torben Melsted 07.03.2023 08:15
EUR/USD has rallied nicely and is currently challenging the neckline resistance of a S/H/S bottom. A break above the neckline at 1.0704 will call for a continuation towards 1.0790 as the next hurdle to overcome. This should only be a temporary obstacle. Once broken, the next target is seen at near 1.1103 and likely closer to 1.1400. Support is now seen near 1.0650 which ideally will act as a floor for the expected break above the neckline resistance at 1.0704.   Relevance up to 07:00 2023-03-08 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315130
Rates Spark: Crunch time

There Was No Justification For The Increase In The Euro

Paolo Greco Paolo Greco 07.03.2023 08:21
The new week began with growth for the EUR/USD currency pair. For the previous week, the price frequently reversed its direction of movement, nearly always surpassing the moving average. We cannot rule out the possibility that this week will see a similar event. There was no justification for the increase in the euro on Monday, at least. Let's discuss the underlying context in greater detail below. We currently have a mild upward trend from a technical perspective. We think the negative trend that started a few weeks ago is still in place because the pair is still trading below the crucial line and inside the Ichimoku cloud on the 24-hour TF. As was already mentioned, Monday essentially had no noteworthy news or events. The head economist of the ECB, Philip Lane, delivered a speech, and a report on retail sales in the European Union was also released. Philip Lane reiterated everything Christine Lagarde and her colleagues in the "transport shop" mentioned last week as retail sales declined significantly more than traders had anticipated. Hence, there was no justification for the current development of the euro. In addition, there wasn't anything for traders to react to during the day. As a result, we think that Monday's increase in the value of the euro was entirely technical. Following the pair's prolonged decline, an upward correction was necessary, which is what we are currently witnessing. The explanation of what is taking place is kept as basic as possible. This week is full of significant events, but none of them take place in the European Union. As there was nothing noteworthy to write about on Monday, we decided to produce a "Preview of the Week" article on Tuesday. It might as well have been released on Wednesday as traders will also have access to some crucial information on Tuesday. The fun will start on Wednesday. The third assessment of the European Union's GDP report for the fourth quarter will be released on this day. The final value is predicted to be between 0 and 1%, and it is doubtful that the third estimate will significantly change from the first or second. Unless this report surprises us in some way, we don't anticipate a response. Christine Lagarde, the head of the ECB, will deliver her subsequent speech on Wednesday as well. We don't expect anything noteworthy from them, though, because members of the monetary committee have already stated their position: the rate will rise by 0.5% in March, and the rate will continue to grow after that. There isn't much else to be said about this. The next event in the European Union this week will be another speech by Christine Lagarde, but this time on Friday evening. We can say the same thing about this event. As it turns out, there won't be any significant events taking place in the EU this week. Ms. Lagarde might be able to inform the market of something significant, but the likelihood of this happening is low. As a result, traders will be able to focus solely on American data and events. Nonetheless, there appear to be numerous significant events, but in reality, everything revolves around Friday Nonfarm and unemployment. But in the article on the pound/dollar, we'll discuss the American calendar. As a result, the situation is as follows: the pair must gently adjust upwards before they may begin falling again. In any case, we do not anticipate a significant increase in the pair's value because we think the downturn should last for several weeks or perhaps months in the future. As of March 7, the euro/dollar currency pair's average volatility over the previous five trading days was 84 points, which is considered "normal." Thus, on Tuesday, we anticipate the pair to move between 1.0599 and 1.0767 levels. A new round of downward movement will be signaled by the Heiken Ashi indicator turning back downward. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trade Suggestions: The EUR/USD pair has resumed consolidation above the moving average line. Until the Heiken Ashi indicator turns down, you can continue holding long positions with targets of 1.0742 and 1.0767. After the price is fixed below the moving average line, short positions can be opened with a target of 1.0498. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 01:00 2023-03-08 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336875
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

The Key Focus Will Be On How Powell Sees The US Labour Market

Michael Hewson Michael Hewson 07.03.2023 08:36
We saw a broadly positive start to the week yesterday, with the France CAC40 posting a new record high of 7,401, while the FTSE100 lagged over disappointment around China's GDP target for 2023. This disappointment weighed on the mining sector yesterday after China set its 2023 GDP target at a fairly modest 5%, pointing to weaker demand for commodities. This target, which is below last year's 5.5% target, suggests that the Chinese government is less likely to be as generous when it comes to helping to stimulate demand and economic activity. This focus on stability appears to be an acknowledgment that recent years have been far too generous and created areas of financial instability and that the focus now is a more conservative approach. Today's China trade numbers for February have seen a marked improvement in the wake of the sharp slowdown seen in the last 2 months of 2022, which saw the various rolling restrictions and lockdowns impact the Chinese economy markedly. In Q4 the Chinese economy stagnated to the tune of growth of 0%, equating to annual GDP growth of 3%. With today's trade numbers for the months of January and February covering the period over the Chinese New Year, we now have a better idea of how much the relaxation of lockdown restrictions may have unleashed pent-up demand, although they also come against a backdrop of the stronger comparatives of a year ago before the Omicron wave had taken hold. Today's numbers have seen exports slide by -6.8%, which was slightly better than expected, while imports slid by -10.2% which was more than expected. The Reserve Bank of Australia also raised rates as expected by 0.25% to 3.6%, as the central bank continues to navigate concerns about upending the mortgage market, against a backdrop of inflation that still looks very sticky. While the guidance was hawkish there was a slight softening bias suggesting the bank might be close to a pause, with the Australian dollar slipping back a touch. Today's main focus will be on the first day of testimony from Fed chairman Jay Powell to US lawmakers with questions likely to focus on the resilience of the US economy. There'll be the usual showboating by some US politicians who will want the Fed to go easy when it comes to future rate hikes, along with those who think the Fed has dropped the ball when it comes to inflation. The key focus will be on how Powell sees the US labour market, and whether the FOMC think that economic conditions have improved or deteriorated since the last Fed meeting. Markets will also be paying attention to whether Powell continues to peddle the same narrative of disinflation, which was a hallmark of his last press conference. If he acknowledges that inflation could be much stickier than the Fed thought over a month ago, that could prompt a pullback in US equity markets. What is notable is that while US equity markets have recovered to the same levels, they were at the time of the February Fed meeting, after another strong finish yesterday, bond yields are much higher, with the US 2-year yield over 80bps higher, which suggests that once again there is a disconnect between what bond markets are pricing on inflation, and what equity markets are pricing. Today's European open looks set to be a positive one on the back of yesterday's strong US close. On the currencies front the euro outperformed yesterday as more ECB policymakers touted the prospect of further multiple 50bps rate hikes in the aftermath of the expected 50bps hike that is due to be delivered next week. Austrian central bank governor Robert Holzmann said the ECB should do 50bps hikes in March, May, June, and July, potentially taking the main financing rate to 5%. These comments followed comments from ECB chief economist Philip Lane who also acknowledged the need for further hikes, beyond next week's meeting, stating that current high levels of inflation continue to be a concern for the ECB, and that core inflation momentum remains strong. EUR/USD – continues to range trade between the recent peaks around the 1.0700 area and above trend line support from the recent 1.0530 lows. We need to push through the 50-day SMA at 1.0730 to open up 1.0820. While below 1.0730, the bias remains for a test of the January lows at 1.0480/85.GBP/USD – continues to range trade between the 1.1920 area and the 200-day SMA, and the 50-day SMA at 1.2150 which remains a key resistance area. A break of 1.1900 retargets the 1.1830 area, while a break of the 1.2150 area is needed to retarget the 1.2300 area.EUR/GBP – retesting trend line resistance at 0.8900 from the January peaks last week. Above 0.8900 targets the 0.8980 area. We need to push below support at the 0.8820/30 area to retarget the 0.8780 area.USD/JPY – still below the 200-day SMA at 136.90/00 which is currently capping further gains. Support comes in at the 135.20 area. We also have interim support at 133.60. A break above 137.00 could see a move to 138.20. FTSE100 is expected to open 13 points higher at 7,943DAX is expected to open 17 points higher at 15,670CAC40 is expected to open 9 points higher at 7,382Email: marketcomment@cmcmarkets.comFollow CMC Markets on Twitter: @cmcmarketsFollow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
The RBA Raised The Rates By 25bp As Expected

The RBA Raised The Rates By 25bp As Expected

Ipek Ozkardeskaya Ipek Ozkardeskaya 07.03.2023 08:40
The week started with worries that China setting its growth target to 5%, a meagre target for a post-pandemic kick-off, could mean a slower global growth ahead.   Today, the latest, and mixed trade figures further raised a couple of eyebrows regarding whether we are expecting too much from China. The decline in Chinese exports was less dramatic than expected, but imports fell more than 10% in February from a year ago.     Nasdaq's Golden China Dragon index kicked off the week down, while the S&P500 was better bid at the open, with gains up to 1%. But the gains melted to the close and all three major US indices closed Monday's session flat to very slightly positive. Still the S&P500 is heading to Powell's semi-annual testimony above the 4000 mark.   Today, all eyes and all ears are on  Federal Reserve (Fed) Chair Jerome Powell and what he thinks about the latest set of economic data.   Since the latest FOMC meeting, we saw a blowout NFP number, an uptick in inflation figures, lower-than-expected decline in the S&P500 earnings, and overall encouraging economic activity data.   And that's a problem. The fact that the US jobs market, or economic activity don't react to higher Fed rates is a problem for Fed, because it makes the Fed's arms less efficient for fighting against inflation. Many would argue that changes in rates take time to filter into the economy but the Fed's tightening campaign began in November 2021 - 17 months ago, the rate hikes began roughly a year ago. It's about time we start seeing the impact of higher rates through data.   Alas, half-a-million NFP read, with the lowest unemployment rate of the past half a decade and uptick in inflation are indeed worrying.  US crude above 100-DMA  Disenchanting growth target from China was expected to keep the oil bears in charge of the market, but the 100-DMA got surprisingly cleared to the upside yesterday.   Warning of tight global supply and rising Chinese demand from CERAWeek conference and Estonian foreign minister's idea that the EU should halve the Russian oil cap helped pushing the price of a barrel above the critical 100-DMA level.   Tight global supply, war, sanctions on Russia oil and the rising Chinese and global demand tilt the balance for higher oil prices in the medium run. But higher energy prices mean higher inflation, and higher inflation means tighter monetary policies which, in return, increase the global recession odds, and could weigh on oil prices.   Elsewhere  The Reserve Bank of Australia (RBA) raised the rates by 25bp as expected and said that there could be more rate hikes on the pipeline depending on the data, but the AUDUSD slipped below 67 cents.   The EURUSD extended gains and flirted with the 1.07 mark yesterday on the back of a surprisingly softer US dollar into Powell's testimony.   Gold sold off into the $1860 mark.   Hawkish Powell could reverse losses in the dollar later today. 
New Zealand dollar against US dollar decreased by 1.07% yesterday

The Kiwi Pair’s (NZD/USD) Bears Remains Weak

TeleTrade Comments TeleTrade Comments 07.03.2023 08:42
NZD/USD grinds higher around intraday top, stays firmer past the key supports. Upbeat MACD, RSI signals hint at the Kiwi pair’s further run-up. One-month-old horizontal resistance area challenges bulls; 200-DMA restricts immediate downside. NZD/USD seesaws around intraday high near 0.6210, up 0.40% on a day, as bulls cheer the previous day’s inability to conquer the 200-DMA support amid early Tuesday. In doing so, the Kiwi pair buyers also benefit from the upbeat oscillators while heading into a short-term key resistance. A looming bullish cross on the MACD joins the RSI (14) rebound towards the 50 line to underpin the hopes of the NZD/USD pair’s further recovery. However, a horizontal area comprising multiple levels marked since early February, near 0.6270-75, appears a tough nut to crack for the Kiwi pair buyers to cross for conviction. Following that, a run-up towards the mid-February swing high near 0.6390, quickly followed by the 0.6400 threshold, can’t be ruled out. On the flip side, the 200-DMA support level of 0.6165 restricts short-term declines of the NZD/USD pair. Even if the Kiwi prices drop below 0.6165 DMA support, the previous resistance line from early February, near 0.6130 at the latest, could challenge the bears. It’s worth noting that the 0.6130 level also becomes important as it encompasses the previous monthly low. Should the NZD/USD bears remains weak past 0.6130, the odds of witnessing a slump toward the mid-November 2022 low near 0.6060 can’t be ruled out. NZD/USD: Daily chart Trend: Sideways
Australian dollar against US dollar - "It seems that the currency will soon hit a price above 0.68"

AUD/USD Pair Is Showing A Tad Longer Consolidation

TeleTrade Comments TeleTrade Comments 07.03.2023 08:45
AUD/USD has failed to capitalize on the hawkish RBA policy. The RBA continued the 25 bps rate hike spree and pushed the OCR to 3.60%. Australia’s monthly CPI indicator suggests that inflation has peaked. The AUD/USD pair is displaying a sideways auction in the early European session after a Reserve bank of Australia (RBA)’s monetary policy-inspired volatility. The Aussie asset looks vulnerable above the 0.6700 support despite the upbeat market mood. In the interest rate decision, RBA Governor Philip Lowe pushed the Official Cash Rate (OCR) by 25 basis points (bps) consecutively for the fifth time to 3.60% to sharpen monetary tools in the battle against persistent Australian inflation. RBA’s Lowe cited “The monthly CPI indicator suggests that inflation has peaked in Australia,” as reported by Reuters. Further downside in the US Dollar Index (DXY) looks likely amid the absence of recovery signs after printing a fresh day low near 104.16. S&P500 futures have reported more gains, indicating that investors have underpinned the risk-appetite theme. AUD/USD is showing a tad longer consolidation in the range of 0.6700-0.6784 on an hourly scale. The 50-period Exponential Moving Average (EMA) at 0.6737 is acting as a major barricade for the Australian Dollar. A slippage by the Relative Strength Index (RSI) (14) in the bearish range of 20.00-40.00 is indicating a downside momentum ahead. A downside move below March 01 low around 0.6700 will drag the Aussie toward December 07 low at 0.6669 and December 20 low at 0.6629. In an alternate scenario, a confident break above March 01 high at 0.6784 will send the asset toward the round-level resistance at 0.6800 followed by February 06 low at 0.6855. AUD/USD hourly chart  
The USD/MXN Pair Could Then Aim To Surpass The February Monthly Swing High

The Mexican Peso (MXN) Pair Can Extend Its Bearish Mood

TeleTrade Comments TeleTrade Comments 07.03.2023 08:47
USD/MXN takes offers to reverse the week-start corrective bounce off multi-month low. Bearish MACD signals, sustained trading below 50-DMA keep sellers hopeful. Convergence of previous support line from November 2022, one-month-old descending trend line appears crucial hurdle towards the north. USD/MXN bears are back to the table, following a one-day absence, as the Mexican Peso (MXN) pair drops to 17.99, down 0.10% intraday during early Tuesday in Europe. In doing so, the currency pair reverses the previous day’s corrective bounce from the lowest levels since April 2018. It’s worth noting that the USD/MXN pair’s latest losses take clues from the bearish MACD signals, as well as the sustained trading below the 50-DMA. Adding strength to the bearish bias could be the quote’s failure to cross the $1,810 resistance confluence during the previous day’s rebound. That said, a downward-sloping trend line from early February and a 14-week-old descending trend line, previous support, together constitute the 18.10 resistance confluence. Should the quote rises past the 18.10 hurdle, the pair’s run-up towards a five-week-old horizontal resistance near 18.50 can’t be ruled out. However, the USD/MXN bears remain hopeful unless the quote trades below the 50-DMA level of 18.75. On the contrary, the latest bottom of around 17.95 and April 2018 low of 17.90 lure the USD/MXN pair sellers of late. Following that, September 2017 low and the year 2017 trough, close to 17.60 and 17.45 in that order, may flash on the bear’s radar. USD/MXN: Daily chart Trend: Further downside expected
InstaForex's Ralph Shedler talks Euro against Japanese yen

The Bank Of Japan Is Expected To Remain Dovish

TeleTrade Comments TeleTrade Comments 07.03.2023 08:51
USD/JPY is oscillating around 136.00, downside looks favored amid the risk-on mood. An upbeat market mood has pushed the 10-year US Treasury yields below 3.96%. The BoJ is expected to remain dovish as current inflationary pressures in Japan are the outcome of international forces. The USD/JPY pair is displaying a back-and-firth action around 136.00 in the early European session. The asset has turned sideways as investors are awaiting fresh triggers for further guidance. Right from Federal Reserve (Fed) chair Jerome Powell’s testimony to the interest rate decision by the Bank of Japan (BoJ) and the United States Employment report, plenty of events will be held this week. Meanwhile, S&P500 futures have picked some bids after a choppy Monday, portraying a cheerful market mood. The US Dollar Index (DXY) is demonstrating signs of recovery after printing a day low at 104.16. The USD Index bulls could retreat amid the risk appetite theme, underpinned by the market participants. An upbeat market mood has also improved demand for US government bonds and has pushed the 10-year US Treasury yields below 3.96%. Two-day Fed Powell’s testimony before Congress will provide meaningful cues. The street is having mixed responses toward commentary as one school of thought expects a hawkish commentary amid higher inflationary pressures while the other school of thought sees a neutral stance as many things bank upon February’s data. Going ahead, if United States inflation continues to persist, the Unemployment Rate remains at lower levels, and consumer spending remains resilient, Fed Powell would have no other option than to push rates higher. On the Tokyo front, the interest rate decision by the BoJ will remain in action. The BoJ is expected to remain dovish as current inflationary pressures in Japan are the outcome of international forces as the economy is struggling to accelerate wages and domestic growth.  
Sharp drop in Canadian inflation suggests rates have peaked

The Divergent Fed-Boc Policy Outlook Suggests That The Path Of Least Resistance For The Loonie Prices Is To The Upside

TeleTrade Comments TeleTrade Comments 07.03.2023 09:05
USD/CAD extends its sideways consolidative price moves through the early European session. Bullish Oil prices underpin the Loonie and act as a headwind amid a modest USD weakness. The downside remains cushioned ahead of Fed Chair Jerome Powell’s semi-annual testimony. The USD/CAD pair continues with its struggle to gain any meaningful traction on Tuesday and remains confined in a familiar trading range around the 1.3600 mark through the early European session. The latest optimism over a fuel demand recovery in China pushes Crude Oil prices to the highest level since last January, which, in turn, underpins the commodity-linked Loonie. Apart from this, a generally positive risk tone is seen weighing on the safe-haven US Dollar and acting as a headwind for the USD/CAD pair. The downside, however, remains cushioned as traders seem reluctant to place aggressive bets ahead of this week's key event/data risks and await a fresh catalyst before positioning for the next leg of a directional move. Tuesday's key focus will be on Fed Chair Jerome Powell's semi-annual congressional testimony, which will be looked upon for clues about the future rate-hike path amid bets for a 50 bps lift-off at the March FOMC meeting. The expectations were lifted by the incoming US macro data, which indicated that inflation isn't coming down quite as fast as hoped and pointed to an economy that remains resilient despite rapidly rising borrowing costs. Adding to this, a slew of FOMC policymakers recently backed the case for higher rate hikes. In contrast, the Bank of Canada (BoC) had signalled in January a likely pause in its tightening cycle and is now expected to leave rates unchanged at the upcoming policy meeting on Wednesday. This will be followed by the monthly employment details from Canada and the US (NFP), which should help determine the near-term trajectory for the USD/CAD pair. Nevertheless, the divergent Fed-BoC policy outlook suggests that the path of least resistance for spot prices is to the upside and any meaningful dip is likely to get bought into.
The Indian Rupee Pair Takes Clues From The Receding Fears Of Hawkish Fed Rate Moves

Analysis Of The USD/INR Pair By Société Générale

TeleTrade Comments TeleTrade Comments 07.03.2023 09:06
USD/INR has evolved within a sideways consolidation since last October. Analysts at Société Générale expect the pair to challenge the 80.80/50 support zone. Next supports at 81.20 and 80.80/80.50 “A pullback is taking shape; the pair is expected to drift towards an ascending trend line at 81.20 and the lower part of the formation at 80.80/80.50 which is also the 200-DMA. This is an important support zone.”  “Defence of the 200-DMA could result in a bounce. However, a break above 82.95/83.30 would be essential to affirm the next leg of uptrend.”
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

Fed Chair Powell Will Begin His Two-Day Testimony

Saxo Bank Saxo Bank 07.03.2023 09:11
Summary:  As the market awaits Powell’s testimony to Congress and jobs figures, the stock market ran out of puff, with the Nasdaq 100 closing slightly in the black and the S&P500 nudging further above its 50-day moving average. The Australia dollar is in danger, of hitting 0.67, but could the RBA’s decision today avert its course? Meanwhile the EUR is higher on a hawkish ECB. Gold’s next move hinges on Powell’s testimony which kicks off today. And why CATL’s results could have ripple effects, along with a TikTok ban.   What’s happening in markets? Mixed start to the week for the Nasdaq 100 (NAS100.I) and S&P 500 (US500.I)  As the market awaits Powell’s testimony to Congress and jobs figures, the stock market ran out of puff, with the Nasdaq 100 closing slightly in the black and the S&P500 nudging further above its 50-day moving average. Six S&P500 sectors rose, while five closed in the red. Apple shares were a standout, rising 1.9% after a US investment bank initiated a “Buy” on the company. Meanwhile, Tesla shares fell about 2% after its Model S and Model X prices were slashed for the second time this year, after lithium price retreated. Meanwhile, Meta shares fell about 0.2% despite the TikTok potential ban gaining momentum in the US - with several countries in Europe considering the same thing. US Treasuries pared early gains in an uneventful session With a light economic calendar and ahead of Fed Chair Powell’s testimony at the Senate Banking Committee, Treasuries took clues across the pond from German Bunds and were pressured in the afternoon after ECB’s Holzmann signalled potentially four or more 50bp rate hikes in the Eurozone. Hedging flows also weighed on Treasuries as corporate supply picked up with around USD 17 billion in new issues. Th e 10-year pared early gains to finish at 3.96%, 1bp higher in yield.  Hang Seng Index and China’s CSI 300 oscillated on a modest Government Work Report The Hong Kong stock market experienced a mixed session as investors digested the economic targets set in China’s Government Work Report, which came in with a modest GDP target set at around 5%. Hang Seng Index (HSI.I) managed to finish 0.2% higher with Chinese SOE names in the telecommunication outperforming as China is accelerating the construction of 5G infrastructure and development of 6G. China Tower (00788) surged 7.9% and China Mobile (00941:xhkg) gained 3.2%. Chinese property developers were laggards during the session following the Government Work Report emphasized again “housing is nor living in, not for speculation” and warned against the “disorderly expansion of capital” of property developers. China Merchant Bank (03698:xhkg) plunged 4.2% on its high exposure to the Chinese housing sector.  In A-shares, CSI300 retreated 0.5%. Property developers, coal mining, and financials were the top losers while telecommunication, solar energy, and tourism advanced. Australian equities are on edge, awaiting the RBA’s decision and commentary The RBA is expected to hike interest rates for the 10th straight time today, with a 25bps hike expected, which will likely impact forward earnings of Australia’s consumer discretionary, tech and real estate sectors. The RBA’s rate hikes mount despite, bellwethers, such as Commonwealth Bank of Australia, flagging that some households are likely remain under duress this year  - amid inflation and rising interest rate pressures – with Australia’s biggest bank putting aside a capital cushion for bad debts provisions and delinquencies. Philip Lowe’s guidance for further tightening will be on watch, especially as the last several economic readings have been weak. Interest rate futures suggest rates will peak at 4.1% in September, with no rate cuts this year. The Aussie dollar could notch fresh YTD lows, but if RBA is more aggressive than expected, the Aussie dollar (AUDUSD) could knee-jerk higher.  FX: AUDUSD is close sight of 0.67 ahead of RBA; EUR higher on hawkish ECB The USD started the week on the backfoot before equity markets got jittery about Powell’s speech later today. A soft GDP target out of China however weighed on AUD, with AUDUSD hitting a low of 0.6717. The AUD is now down 6.5% from its Feb 2 high. The RBA meets today with another 25bps rate hike expected, although focus will be more on Lowe’s comments on the path of interest rates from here. NZDUSD was also pushed lower to 0.6173. EURUSD however pushed above 1.0680 on hawkish ECB chatter (read below). Swiss inflation data came in hotter than expected at 3.4% YoY for February from 3.1% exp and 3.3% previous. USDCHF pushed lower to test the 0.93 handle while EURCHF wobbled.  Crude oil trades flat  The oil price is steady at just over $80 amid CERAWeek - the world's premier energy conference. Commentary made alluded to a pickup in demand, while supply remains somewhat restricted. It was said at the conference that 75% of global oil demand growth will come from China this year, while companies such as Chevon are working on options to export natural gas to Europe this year. Meanwhile, Estonia called for the EU to halve the $60 price cap on Russian oil this month. And US natural gas plunged on forecasts for milder-than-expected weather.  Gold eying Powell’s testimony Gold (XAUUSD) prices inched up to their highest levels since mid-February on Monday before a reversal from the peak at $1858 to 21-DMA at $1844 in the Asian morning today as caution on Fed Chair Powell’s testimony today starts to set in. The surge higher earlier came despite China’s modest growth target and risk of more rate hikes from the Federal Reserve. However, it must be noted that the recent rise in yields has come with higher breakeven inflation as well, suggesting that the market is now looking at inflation to settle higher in the medium-term. This has kept real yields under pressure, supporting the yellow metal. For the recovery to stay intact, however, support at 200DMA of $1840 and the last week’s low of $1805 will be eyed.    What to consider?   Powell’s testimony kicks off today Fed Chair Powell will begin his two-day testimony before the Senate and the House committees today. Over the last few weeks, data out of the US has been far more resilient than expected, fueling bets that the Fed will have to raise rates beyond what was communicated earlier and rates will stay elevated for longer as well. Most Fed members have also sounded hawkish, raising the prospect of a shift higher in March dot plot. If a similar message is conveyed by Chair Powell, we could see US Treasury yields getting above critical levels and USD reversing back to an uptrend.  Hawkish ECB chatter supporting EUR ECB’s Holzmann called for interest rates to be raised by 50bps at each of the next four meetings, and suggested a restrictive policy rate would start from ~4%. President Lagarde and Chief Economist Lane were also on the wires suggesting more rate hikes as well. One of the investment banks, as a result, came out with a terminal rate forecast of 4.25% in wake of Holzmann's remarks, and this led to a drop in EU bonds and a surge higher in EUR crosses.  Why CATL’s results could have ripple effects  CATL, the world’s largest battery maker - and Tesla’s battery supplier - reports results on Thursday. It’s expected to report revenue growth of over 80%. However, there is room for a positive surprise - given strong battery and energy storage demand. CATL is also expanding overseas - teaming up with Ford to build a battery manufacturing plant in Michigan, which we will hopefully get details on. As for its outlook - we expect it to be strong, as CATL’s increased its war chest, after selling its $856 million stake in Australia’s biggest lithium company, Pilbara Minerals. We also think guidance could be upgraded - given auto sales in China are expected to rise in 2023, following years of lockdowns. CATL outlook’s will be closely watched by not only EV makers - but also by EV investors – as they could give a gauge on how much car maker’s battery costs could rise.  TikTok ban making progress in the US  Senate Intelligence Committee Chairman Mark Warner is set to unveil a bill Tuesday that would allow the US to ban the popular video-sharing app TikTok and other Chinese technology. He said that the law will give the US the power to ban or prohibit foreign technology where necessary, considering companies like TikTok do not keep American data safely and is also a propaganda tool. US tech stocks Snap (+9%), Alphabet (+1.6%) and Pinterest (+1%) rallied on reports. Iron ore majors face rising volatility    China’s top economic body, the NDRC held a meeting with some industry experts over potential measures to curb iron ore price rises. The iron ore price has risen 62% from its October low - amid rising demand from China, and expectations this will continue - while supply remains tight. It’s not the first-time accusations have come from China. But this time - its allegedly some in the industry are calling on the Chinese government to tighten futures and spot markets oversight and punish those for hoarding and price gouging.  BHP and Rio make over 50% of their annual revenue from iron ore, Fortescue makes about 90%. Shares in Fortescue are trading lower for the third day, while BHP trades 2.3% lower at A$47.27, and Rio Tinto has fallen for the second session, losing 2%. Be mindful, BHP and Rio go ex-dividend on March 9. For potential implications on ex-dividends, click here.   Trip.com beats estimates Trip.com beat revenue and EPS forecasts as it reported Q4 results yesterday, fueling more weight to the case for the upcoming surge in Chinese outbound travel demand. We had launched the APAC tourism basket to get exposure to this trend, and Trip.com is also included in this basket. Trip.com reported revenue of $729mn (vs. $709mn expected) and EPS of 11 cents (vs. loss of 3 cents expected).   Corporate calendar to watch, including results and companies going ex-dividend   On Tuesday March 7, CrowdStrike (CRWD) reports results well as Darktrace (DARK) its peer. Ashtead Group, Sea Ltd, Ferguson also report.  On Wednesday March 8, Adidas (AD) and Campbell Soup (CPB) are due to report results, along with Ping An Bank, Thales, Geberit. Woodside (WDS) goes ex dividend.  On Thursday March 9, CATL (300750) is due to release results, as well as Jd.com (JD) and Deutsche Post. BHP (BHP) and Rio Tinto (RIO) go ex dividend, along with CSL (CSL), Occidental (OXY) and eBay (EBAY).  On Friday March 10, Oracle (ORCL), DocuSign (DOCU), Daimer Truck, AIA Group, and  DiDi Global are due to report.   For what to watch in the markets this week – read or watch our Saxo Spotlight. For our short black style Week Ahead – read or watch The Week Ahead.For a global look at markets – tune into our Podcast.   Source: Global Market Quick Take: Asia – March 7, 2023 | Saxo Group (home.saxo)
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Euro Pair Has Potential For The Further Downside Movement

Peter Jacimovic Peter Jacimovic 07.03.2023 09:28
Technical analysis: EUR/USD has been trading sideways at the resistance Fibonacci confluence zone 1.0690. Due to the strong resistance zone in the background and the downside cycle, I see potential for the further downside movement. Downside objectives are set at the price of 1.0580 and 1.0545 Stochastic and MACD oscillators are still showing upside reading but watch for potential bear cross to confirm further downside direction... Key resistance is set at the price of 1.0700-1.0730   Relevance up to 08:00 2023-03-08 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315164
Australian dollar - the sharp drop can be attributed to technical factors and hawkish Fed

RBA hikes, Aussie Falls, Chinese Stocks Under Pressure

Swissquote Bank Swissquote Bank 07.03.2023 10:46
Disenchanting growth target from China was expected to keep the oil bears in charge of the market, but the 100-DMA got surprisingly cleared to the upside yesterday. Forex Stocks closed flat and the dollar softened. The Aussie fell after the Reserve Bank of Australia (RBA) announced 25bp hike and the EURUSD flirted with the 1.07 mark. Fed Today, all eyes and all ears are on Federal Reserve (Fed) Chair Jerome Powell and what he thinks about the latest set of economic data. Since the latest FOMC meeting, we saw a blowout NFP number, an uptick in inflation figures, lower-than-expected decline in the S&P500 earnings, and overall encouraging economic activity data. The S&P500 is above 4000 into Powell’s testimony, and the dollar is soft. Could Jay Powell reverse that? Watch the full episode to find out more! 0:00 Intro 0:38 Chinese stocks under pressure, US stocks zen pre-Powell 3:02 Powell will sound hawkish but investors may chose not to listen 6:24 US crude clears 100-DMA resistance 9:00 FX update: RBA hikes, Aussie falls, dollar bulls in retreat Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #Powell #testimony #inflation #jobs #economic #data #China #growth #target #energy #crude #oil #RBA #rate #decision #USD #AUD #EUR #XAU #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      
Assessing 'Significant Upside Risks to Inflation': Insights from FOMC Minutes

Saxo Bank Podcast: RBA announced a dovish hike, Fed Chair Powell testimony starting today

Saxo Bank Saxo Bank 07.03.2023 11:40
Summary:  Today we look at the choppy equity market failing to extend the upside momentum for now as we triangulate mid-range ahead of a series of event risks, among these two days of Fed Chair Powell testimony starting today. Overnight, Australia's RBA announced a dovish hike, clearly looking for excuses to pause its tightening regime - is this a policy mistake in the making? We also look at evidence on what may have driven China's about-face on stimulating its economy, crude oil, natgas and wheat & other grain markets and much more. Today's pod features Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.  
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

EUR/USD, GBP/USD And AUD/USD Is Decreasing, USD/JPY Is Trading Close To 136.00

Kamila Szypuła Kamila Szypuła 07.03.2023 13:01
The U.S. dollar held steady on Tuesday ahead of testimony before Congress by Federal Reserve Chair Jerome Powell, while the Aussie slid after the Reserve Bank of Australia hinted it might nearly be done with monetary tightening. The RBA is no exception in warning of further tightening. Central bankers, including the US Fed and European Central Bank, said more work needed to be done to fight inflation. The prospects for further policy tightening by the Fed continue to act as a tailwind for the US Dollar (USD), the markets seem convinced that the US central bank will stick to its hawkish stance and keep rates higher for longer in the wake of stubbornly high inflation. The bets were lifted by the incoming US macro data. Investors will also face the release of the closely watched monthly US employment data, popularly known as the NFP, this week. USD/JPY The USD/JPY pair started trading above 136.00 on Tuesday and traded above 136.10 in the first hours. The yen pair failed to hold and fell below 136.00 and tested the level of 135.8440. In the European session there was an even greater drop to 135.60. Currently, the pair has managed to rebound and the hadel takes place close to 136.00. The decline, however, remains contained amid expectations that the Bank of Japan will maintain very loose policy to support a fragile domestic economy. In fact, the new BoJ governor, Kazuo Ueda, said last week that the central bank is not aiming for a quick turnaround from a decade of massive monetary easing. As such, the BoJ's monetary policy decision, scheduled to be announced on Friday, is unlikely to give the JPY any respite. EUR/USD The euro pair traded high above 1.0680 in the Asian session. In the European session, the EUR/USD pair fell below 1.0660. At the time of writing, the EUR/USD pair is just above 1.0660. Looking ahead, it seems that comments from central bank officials could be a driving force for the EUR/USD rate along with other FX markets and bond markets in general. The ECB is scheduled to meet on Thursday, March 16 ahead of the Fed, which begins its meeting next week on March 22. An additional risk of events may also be data on GDP in the whole euro, which will be released on Wednesday. GBP/USD The cable pair started trading above 1.2020 and traded around this area in the Asian session. GBP/USD managed to rise above 1.2060 but lost momentum and fell below 1.20. The pound pair is at the time of writing just below 1.20, at 1.1992. Although the US dollar came under renewed selling pressure on Monday, the GBP/USD pair struggled to gain traction. Furthermore, a sense of stability has returned to the UK property market after last year's turmoil, with a second consecutive month of gains after falling in December 2022. However, prices remain at 2.5% q/q, and underlying activity continues to indicate a downtrend. AUD/USD The pair of the Australian started trading above 0.67, but had already fallen to 0.66 earlier in the Asian session. The Aussie pair is currently trading below 0.6670. The Reserve Bank of Australia raised its benchmark interest rate by 25 basis points in an attempt to control inflation reaching its highest level in three decades. The Reserve Bank of Australia raised its cash rate by a quarter of a percentage point to 3.60% and said further monetary policy tightening would be needed. Source: finance.yahoo.com, investing.com
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

The Dovish Tone Of The Statement Has Sent The Australian Dollar Lower

Kenny Fisher Kenny Fisher 07.03.2023 14:12
The Australian dollar continues to lose ground and is sharply lower on Tuesday. In the European session, AUD/USD is trading at 0.6676, down 0.81%. Earlier, the Australian dollar fell as low as 0.6674, its lowest level since December 23rd. RBA delivers a ‘dovish hike’ There were no surprises from the RBA, which hiked rates by 25 basis points and raised the cash rate to 3.6%. This marked a fifth consecutive increase of 25 bp, as the central bank continues to raise rates in modest increments in a bid to curb inflation without choking economic growth. This rate decision was noteworthy in the language of the rate statement, which suggested that the RBA could be nearing the end of the current rate cycle. The statement removed a reference in the February statement to needing to raise rates “over the months ahead”, and instead stated that “tightening of monetary policy will be needed to ensure that inflation returns to target. The markets picked up on this change in language as a dovish signal. As well, the statement explicitly said that inflation had peaked, another hint that multiple rate hikes may not be needed. The dovish tone of the statement has sent the Australian dollar considerably lower today. In the US, Federal Reserve Chair Powell testifies today on the semi-annual monetary policy report. The Fed has been consistently hawkish about the need to continue raising rates and the markets have aligned their expectations closer to the Fed. It was only a few weeks ago that the markets were projecting a pause followed by rate cuts, but this has changed to expectations for three more rate hikes this year. There is a lot of uncertainty in the air about inflation and interest rates after a host of stronger-than-expected data in January, such as a blowout employment report. These strong numbers may have been a blip, and it will be interesting to see if Powell reiterates a hawkish stance and ignores the January numbers. The markets are widely expecting a 25-basis point hike at the March 22 meeting, but a 50 bp increase cannot be discounted, as the Fed has said that the pace of rate hikes could be ‘higher and longer’.   AUD/USD Technical AUD/USD is testing support at 0.6749. Below, there is support at 0.6660 There is resistance at 0.6862 and 0.7025 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
US dollar pressured by Euro and Swiss franc. EUR and CHF supported by data and a rate hike

The SNB Does Not Provide Forward Guidance For Its Rate Policy

Kenny Fisher Kenny Fisher 07.03.2023 14:16
USD/CHF has rebounded on Tuesday, ending a rally that saw the Swiss franc climb over 1%. In the European session, USD/CHF is trading at 0.9344, up 0.40%. Swiss inflation higher than expected Switzerland released the February inflation report on Monday and the reading was higher than expected. CPI rose 0.7% m/m, up from 0.6% in February and above the 0.4% forecast. On an annualized basis, CPI climbed 3.4%, edging up from 3.3% and higher than the forecast of 3.1%. These inflation numbers would be a dream come true for most major central banks, which are struggling with inflation levels two or three times higher. Still, the Swiss National Bank is concerned about high inflation, as its target is 0-2%. The SNB was widely expected to raise rate by 50 basis points at the rate meeting on March 23 and the uptick in February inflation cements the likelihood of such a move. Swiss National Bank Chair Jordan will make an appearance later today and is likely to address the rise in inflation. The SNB does not provide forward guidance for its rate policy, but the central bank has projected an inflation rate of 2.4% for 2023. With the cash rate currently at 1%, it’s a safe bet that we’ll see another hike in June of either 25 or 50 basis points. The continuing tightening should provide a boost to the Swiss franc, but traders should keep in mind that the SNB has not hesitated to intervene in the foreign exchange market when the Swiss franc became too strong for its liking. In the US, Federal Reserve Chair Powell will be in the spotlight as he testifies before a Senate committee later today. The Fed has remained hawkish and after a host of strong January releases, the markets have shifted their expectations closer to the Fed’s stance. It was only a few weeks ago that the markets were projecting a pause followed by rate cuts, but this has changed to pricing in three more rate hikes this year. There is a lot of uncertainty in the air about inflation and interest rates and the markets are hoping that Powell’s comments will provide some clarity.   USD/CHF Technical There is resistance at 0.9381 and 0.9420 0.9304 and 0.9224 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
InstaForex's Ralph Shedler talks Euro against Japanese yen

The US Dollar Was Up 122 Points Against The Yen

InstaForex Analysis InstaForex Analysis 08.03.2023 08:01
The USD/JPY kept the monthly uptrend until yesterday's attack, set by Federal Reserve Chairman Jerome Powell's hawkish speech in the Senate. The dollar was up 122 points against the yen. Japan's balance of payments for January was released this morning, showing a significant decline from 0.03 trillion yen in December to -1.98 trillion, and a seasonally adjusted decline from 118.4 trillion yen to 21.6 trillion. The 137.75 target level set by the embedded global channel line is nearby. Passing the level will open the target at 138.90, a local peak on July 21, 2022. Next, it could climb to 140.90, the next price hyperchannel line. On the four-hour chart, the price has settled above the balance and MACD indicator lines, the Marlin oscillator turns down, but it is already reliably and highly fixed in the area of the uptrend. We will probably see a small respite before a decisive attack on 137.75.     Relevance up to 03:00 2023-03-09 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337004
According to InstaForex analyst, demand for British pound may not increase soon

The GBP/USD Price Is Now Heading Towards The Nearest Support

InstaForex Analysis InstaForex Analysis 08.03.2023 08:03
Under pressure from the dollar's widespread attack, a massive withdrawal from risk, the pound declined by 200 points yesterday. The support level of 1.1914 was left far behind. The signal line of the Marlin oscillator, as we expected, came out of its own wedge to the downside. The price is now heading towards the nearest support at 1.1737, the high on September 13, 2022. Overcoming the level will open the 1.1644 target, the high of October 27. On the four-hour chart, the Marlin oscillator is reversing upward. It has penetrated deep down, though not into the oversold zone, now it needs a slight release to resume a more confident decline. A consolidation under yesterday's low (1.1820) will allow the price to move even closer to the target level.   Relevance up to 04:00 2023-03-09 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337006
Rates Spark: Nothing new on the dovish front

The EUR/USD Price Overcame The Support Of 1.0595 With Stunning Success

InstaForex Analysis InstaForex Analysis 08.03.2023 08:05
The euro collapsed 130 pips yesterday. The beginning of the dollar's general onslaught and the markets' collapse was caused by the Australian dollar, which started falling after the Reserve Bank of Australia's decision to raise the rate by the expected slight 0.25% and the soft comments of the accompanying statement. At the same time, RBA Governor Philip Lowe expressed doubts about a soft landing of the economy. In the evening, Federal Reserve Chairman Jerome Powell appeared before the U.S. Senate Banking Committee and said he was ready to tighten policy (i.e., raise the rate by 0.50% at the next meeting) if the data came in well. Investors put the probability of such a scenario in federal funds futures at 54.3% from 31.4% the day before. The U.S. S&P 500 stock index was down 1.53%. On the daily chart, the reversal of the signal line of the Marlin oscillator from the zero line was confirmed. The price overcame the support of 1.0595 with stunning success, now the obvious target of 1.0443/70 is just ahead. The MACD indicator line turns down, this is a sign of the beginning of a medium- or long-term downtrend. On the four-hour chart, the price has settled below 1.0595 and both indicator lines. The Marlin oscillator has moved deeply into the negative territory, and with the price near the low of February 24 and 27, there might be a consolidation or even a slight correction today, in order to let the oscillator release the tension, and then, on Thursday and Friday, to continue the decline.   Relevance up to 04:00 2023-03-09 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337008
The GBP/USD Pair Could Continue Its Downtrend

The GBP/USD Pair Could Continue Its Downtrend

InstaForex Analysis InstaForex Analysis 08.03.2023 08:07
Early in the European session, the British pound (GBP/USD) is trading below the 21 SMA and the 200 EMA. We can see a strong bearish move due to Jerome Powell's speech. He said that the Fed is willing to speed up interest rate hikes. GBP/USD fell more than 240 points from 1.2064 to 1.1819 in light of Powell's comments that the ultimate size of interest rates would likely be higher than previously anticipated. This increased risk aversion and investors sold the GBP, which generated a fall in the pair as seen on December 15, 2022. According to the 4-hour chart, GBP/USD could continue its downtrend until it reaches the bottom of the downtrend channel formed since February 10. This level coincides with the 0/8 Murray line located around 1.1718 and could become significant support. In case GBP/USD rebounds above 1.1840 in the next few hours, it is expected to reach the resistance that had formed around 1.1913 towards 1.1925. Once the price climbs to this zone, it will be seen as an opportunity to sell with targets 1.1840 and 1.1718. Strong volatility is expected in the American session due to the fact that the results of the Fed meeting will be known. We must be careful because unexpected movements could occur. For this, we must locate the weekly support and resistance levels and the Murray levels as pivot points. The British pound is expected to continue falling in the next few hours, so we could sell below 1.1840 with targets at 1.1778 and 1.1718. In case of a technical bounce above 1/8 Murray, we should wait for the pound to reach the daily pivot point at 1.1901 and take this as an opportunity to resume selling.     Relevance up to 04:00 2023-03-13 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315273
Technical look: Euro against US dollar - what can we expect from the pair?

The EUR/USD Pair Broke Below The Right Shoulder's Low

Torben Melsted Torben Melsted 08.03.2023 08:09
The S/H/S-bottom neckline is held firm. Instead, EUR/USD broke below the right shoulder's low, which is viewed as an S/H/S-failure. Instead of measuring the upside target, we can predict the downside target from the failure, which measures a target near 1.0407 from where the next impulsive rally should be expected. We now see resistance near 1.0650 that ideally will cap the upside for a move closer to the 1.0407 target to complete wave 4. Relevance up to 06:00 2023-03-09 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315279
USD/CAD - Canadian economy added 41,400 jobs beating expectations

Analysis Of Movement Of USD/CAD Commodity Currency Pair On The Daily Chart

InstaForex Analysis InstaForex Analysis 08.03.2023 08:17
There is a few interesting things on the daily chart USD/CAD commodity currency pairs: 1. The appearance of three Wiseman signal. 2. There is a deviation between price movement with Awesome Oscillator indicator. 3. The price moves above the open Alligator gaping upwards. 4. The appearance of Bullish 123 pattern follow by 2 or Ross Hook (RH). Based on the facts above we can predicted in a few days ahead that the Loonie will try to tested level 1,3977. However if on its way to to those levels suddenly corrected down below the level of 1,3554 the Bulls scenario that has been described earlier will become invalid and cancel by itself. (Disclaimer)   Relevance up to 05:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120877
China’s Foreign Minister Qin Gang Downplayed Russia’s Invasion Into Ukraine

China’s Foreign Minister Qin Gang Downplayed Russia’s Invasion Into Ukraine

Saxo Bank Saxo Bank 08.03.2023 08:29
Summary:  Equities tumbled as 2-year Treasury yields surged above 5% and dollar reached its YTD high on Powell opening the door for a bigger rate hike and a higher terminal rate. As risk sentiment deteriorated, AUD was a notable underperformer with RBA also going for a dovish hike. CAD in focus today with Bank of Canada expected to pause. China import data also remained mixed, and oil prices slumped by over 3% while Copper broke below the key $4 mark.   What’s happening in markets? S&P fell below 4000 after Powell’s testimony The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) retreated following Jerome Powell’s testimony to the Senate. Powell warned that the FOMC would probably hike rates more and possibly faster than previously anticipated, given the latest data has come in stronger than expected. The S&P 500 fell 1.50% to 3986, below the 4000-handle and the benchmark’s 50-day moving average, while the Nasdaq 100 lost 1.2%. Rivian (RIVN:xnas) plunged 14.6% after the EV maker announced a private offering of USD1.3 billion convertible notes. Tesla (TSLA:xnas) shares fell over 3.2% and Apple (AAPL:xnas) lost 1.5%. Facebook’s parent Meta Platforms (META:xnas) closed almost steady after it was reported the social media giant plans another round of layoffs that could affect thousands of workers. Meanwhile, in Europe, stock markets also closed in the red - the benchmark Euro Stoxx 600 fell 0.8% with Santander being one of the worst performers, losing 2.4% most despite the business moving to target institutional clients. 2-year US Treasury yield jumped above 5%, for the first time since July 2007 Following Fed Chair Powell opening the door for a 50bp rate hike at the March FOMC meeting, investors sold the front-end of the Treasury curve and saw the 2-year finishing the session at 5.01%, the highest level since July 2007. The longer end of the curve, however, recovered from their intraday lows with the 10-year yield closing only 1bp cheaper at 3.96% and the 30-year yield 2bps richer at 3.87%. The 2-10-year yield curve flattened to -105bps, the deepest inversion since September 1981. The interest rate futures are pricing an over 60% chance for a 50bp rate hike at the next FOMC and a terminal rate at around 5.64% by September this year. The USD 40 billion 3-year auction went well with strong demand. Hang Seng Index and China’s CSI 300 dropped as SOE telcos rally faded to reverse lower After the follow-through rally, n central-government-owned enterprises in Hong Kong and mainland bourses in the telecommunication space lost steam, and the Hang Seng Index and CSI 300 dropped 0.3% and 1.5%. China Telecom (00728:xhkg) slid 4% and China Mobile (00941:xhkg) retreated 2.7%. China Tower came down 2.1%, paring some of the strong gains yesterday. On the other hand, SOE oil and gas giants managed to sustain gains and finish Tuesday higher with PetroChina (00857:xhkg) up 4.4%, Sinopec (00386:xhkg) up 4.2%, and CNOOC (00883:xhkg) up 3.3%, Chow Tai Fook (01929:xhkg) plunged 6% following the departure of the jeweller’s mainland operation chief. SJM (00880:xhkg) slid 4.1% after the loss widened to HKD7.8 billion in FY22. Australian equities slide after Powell’s comments Despite the RBA today suggesting it is at a closer point of pausing rate hikes, the Australian share market’s benchmark, the ASX200 has fallen 0.93% - taking it below its 50-day moving average. The pressure on Aussie market comes after Fed Chair Powell gave hawkish remarks to the US Senate – the FOMC would possibly hike rates faster than previously anticipated. Some of the day’s laggard on the ASX include Woodside (WDS) which has fallen 1.8% after going ex-dividend. BHP and Rio Tinto down by 0.5% ahead of going ex-dividend tomorrow. For what ex-dividend means for investors and traders, click here for possible implications. Despite the overall tone being negative today – as set by the Fed - the best performing companies are those that are benefiting and are likely to continue to benefit from China’s reopening  - with Qantas and Webjet trading over 1.4% higher, with Webjet hitting a 52-week high of $7.01. US dollar notches its biggest gain in a month. The Aussie dollar sinks over 2% After Powell said the US central bank is likely to raise rates higher than previously thought, the US dollar index surged to a fresh cycle high, moving back to levels not seen since December. That resulted in the Aussie dollar tumbling over 2%. Compounding on the AUD pressure, the RBA Governor said today, it is closer to where it's appropriate to pause rate rises. This comes just a day after Australia’s central Bank hiked interest rates for the 10th straight meeting, taking the cash rate to 3.6%. The RBA said monthly inflation had ‘peaked’, goods prices were expected to moderate in the months ahead, and the Bank alluded to services inflation being only temporary. Futures markets now suggest Australia’s cash rate could peak at 4% in September. The Aussie dollar against the US (AUDUSD) trades at 0.6585. Further declines could see the pair move to the next support level, at perhaps the 0.649 level. FX: JPY descent continues; CAD in focus With Powell’s hawkish remarks, 2-year Treasury yields jumped over 5% after a 12bps gain and the USD was pushed to fresh YTD highs. AUD and NZD were hurt by the deterioration in risk sentiment, with the former also pressured by a dovish turn from the RBA. Widening yield differential between US and Japan weighed on the yen, and USDJPY was seen testing 137.50 in the Asian morning session despite volatility risks from the Bank of Japan meeting scheduled on Friday. GBPUSD broke below the 200DMA to reach YTD lows, with BOE’s Mann commenting that sterling could weaken further. EURUSD dropped below 1.06 paring some of the hawkish ECB Holzmann reaction earlier in the week. CAD could be in focus today with a potential pause coming from BOC (read below), with USDCAD likely to take a look at 1.38+ levels. Crude oil drops over 3% on hawkish Powell After touching the top of the recent range, crude oil prices slid on Tuesday as Powell hinted at bigger and longer rate hikes, raising concerns of demand weakness. This comes along with a weaker-than-expected growth target from China for this year which continues to limit the optimism on Chinese demand recovery. Meanwhile, short-term supply concerns are subdued. OPEC Chief Haitham Al-Ghais also said that slowing oil consumption is US and Europe poses a concerns for the market, despite strong growth from Asia. EIA also released its short-term energy outlook and lowered its crude oil production forecasts for US supply for both this year and next amid signs of subdued growth and higher costs. WTI prices touched lows of $77 while Brent was back at $83 from $86+ earlier. Copper broke below $4 mark Base metals were broadly pushed lower on Tuesday as dollar surged to fresh YTD highs on remarks from Powell’s testimony opening the door for a bigger hike in March and a higher terminal Fed funds rate. China import data also gave mixed signals on the first two months of the year, with mined copper ore imports increasing but inflows of refined copper declining. Supply constraints from Peru also seemed to ease as the Peruvian government expects shipments of copper and zinc will normalise with days, following months of social unrest prompted by the impeachment of former President Pedro Castillo. Copper prices fell 2.8% to close below the $4 mark, bringing last week’s low of $3.93 and the 100DMA at $3.86 into focus. What to consider? Powell’s testimony opens the door to a 50bps rate hike in March Fed Chair Powell, in his prepared remarks to Congress, said if incoming data indicates faster tightening is required, the Fed is prepared to increase the pace of rate hikes, warning that the ultimate level of interest rates is likely to be higher than previously anticipated given the string of hot January data. This is another signal that March dot plot could see an upward shift. Not just that, but Powell has also opened the door to a 50bps rate hike in March and market pricing has shifted more in favor of a bigger hike on March 22. Terminal rate expectations have shifted higher to 5.63% from 5.48% previously. Remarks brought the 2-year yields above 5% and the deepest inversion in the 2-10 year yield curve. China’s exports and imports dropped further in February China’s exports fell 6.8% Y/Y and imports dropped 10.2% in February. The larger-than-expected decline in imports was partially due to the fall in commodity prices while commodity import volume grew. China to establish the Ministry of Science and Technology and the National Data Bureau At the National People’s Congress, China announced the establishment of the Ministry of Science and Technology to promote innovation in technology, the National Financial Regulation Bureau to replace the China Banking and Insurance Regulatory Commission (CBIRC) and take over from the People’s Bank of China the regulation of financial holding companies and from the China Securities Regulatory Commission investor protection, and the National Data Bureau to promote the development of the digital economy. The overhaul of the financial regulatory authorities, as we noted in our Two Sessions preview, is to strengthen the Chinese Communist Party’s leadership in the institutional setup, the division of functions, governance. China’s Foreign Minister reaffirmed the strategic partnership with Russia In a press conference on the side-line of the Two Sessions, China’s Foreign Minister Qin Gang reiterated the “China-Russia comprehensive strategic partnership of coordination for a new era” and downplayed Russia’s invasion into Ukraine to that the “Ukraine cries has complex historical fabrics and practical reasons with the underlying nature being the eruption of the conflicts in the security governance of Europe”. The pro-Russian stance, as opposed to the more conciliatory-leaning stance in recent months toward the West, added to investors’ concern over the Sino-American relationship. The Bank of England (BoE) worries about core inflation Yesterday, BoE’s Catherine Mann, former Global Chief Economist at Citibank, expressed concerns about the persistence of core inflation in the United Kingdom. It is currently running at 5.80% year-over-year versus a long-term average of 1.84%. Mann embraced a hawkish tone, highlighting the need for further interest rate hikes. She indicated that the terminal rate is beyond forecast horizon now. The monetary market forecasts it will be at 4.75 %. This implies three consecutive hikes of 25 bp in March, May and June. She also mentioned that the evolution of the sterling plays a very important role for monetary policy due to the high levels of imports. Despite worries about the state of the UK economy, the sterling has been rather resilient this year. It is down only 0.47% against the euro YTD. Most economists still expect the UK economy will go through a period of recession in 2023 (drop of GDP estimated at 0.6%). But a minority of them even expect the UK economy could avoid a recession if the decrease in energy prices continues. This is quite a change compared to forecasts initially released at the end of 2022. Iron ore price steady ahead of peak Chinese construction season Iron ore  - the steel-ingredient is trading slightly lower today, down 0.2% at $126.75, but holds around 2023 highs, after its price rose 2.1% yesterday. China is expected to increase demand - as it usually does ahead of China’s peak construction season. Around this time of year, steel mills typically start restocking iron ore, ahead of building work ramping up amid supportive weather. Adding to sentiment, yesterday Rio Tinto (RIO) said it’s seeing good demand from China - with the country shaking off pandemic restrictions. BHP and Rio go ex-dividend tomorrow, March 9. For implications of ex-dividends click here.   Bank of Canada meets next After RBA’s dovish hike, the stage is set for the Bank of Canada to pause on its tightening cycle at the meeting today. In light of the weaker-than-expected data and BOC’s signal from the January meeting, market is not expecting any rate hikes today although the message is likely to convey policy flexibility. Read our full preview here to know what it means for the CAD as the divergence of BOC to the Fed widens. Investing with a Gender Lens Gender Lens Investing is a strategy which puts weight on gender-based considerations in your investment decisions, so you can in some way contribute towards efforts to close the “gender gap”. As today is the International Women’s Day, we explore why and how we can invest with a gender lens in this video. We also look at some ETFs and Saxo's Women in Leadership equity theme basket which can help you get exposure to this theme. Here’s wishing everyone a very happy International Women’s Day from Saxo   For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Global Market Quick Take: Asia – March 8, 2023 | Saxo Group (home.saxo)
The USD/INR Pair Traders Could Be The Cautious Mood Ahead Of The Key Inflation Numbers For India And The US

The USD/INR Pair Is Expected To Remain Volatile

TeleTrade Comments TeleTrade Comments 08.03.2023 08:39
USD/INR has climbed to near 82.30 amid a strengthening risk-off mood. The demand for US government bonds has dropped dramatically, which has pushed the 10-year US Treasury yields above 4.0%. Fed’s Powell believes that the terminal rate is likely to be higher than earlier expected. The USD/INR pair has witnessed stellar buying interest at the opening as investors have started discounting the impact of the overnight jump in the US Dollar Index (DXY). The USD Index has printed a fresh three-month high above 105.80 as the Federal Reserve (Fed) chair Jerome Powell has endorsed a higher terminal rate to tame the persistent inflation. S&P500 futures have surrendered their nominal gains generated in the Asian session, portraying an increase in the strength of the risk-aversion theme. The demand for US government bonds has dropped dramatically, which has pushed the 10-year US Treasury yields above 4.0%. It seems that January’s above-targeted inflation figures, resilience in consumer spending, and surprising heavy addition of payrolls in the labor market forced Fed’s Powell to sound extremely hawkish for interest rate guidance. Fed’s Powell cited “Ultimate level of interest rates is likely to be higher than previously anticipated,” after the “latest economic data have come in stronger than expected.” The USD/INR is expected to remain volatile ahead of the release of the United States Automatic Data Processing (ADP) Employment Change data. As per the preliminary estimates, the economic data is seen at 200K, higher than the former release of 106K. On the oil front, oil prices have dropped below $78.00 amid the mounting risk of recession in the US economy. From a longer-term perspective, Haitham Al Ghais, the Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC), said, “China is expected to account for 500k-600K bpd (barrels per day) of new oil demand this year.“ He further added, “We are cautiously optimistic about China, but Europe is a concern.” It is worth noting that India is one of the leading importers of oil and higher oil prices will support the Indian Rupee.
Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

The Canadian Dollar Is Expected To Deliver Power-Pack Volatility

TeleTrade Comments TeleTrade Comments 08.03.2023 08:40
USD/CAD has printed a fresh four-month high at 1.3774 as the risk-aversion theme has strengthened further. Federal Reserve Powell has confirmed that the risk of persistent inflation is real and a higher terminal rate is expected than prior. Bank of Canada might keep interest rates steady as announced earlier. USD/CAD is running higher with sheer momentum considering the bullish message from indicators and oscillators. USD/CAD has printed a fresh four-month high at 1.3774 in the Asian session. The Loonie asset witnessed a stellar buying interest after extremely hawkish remarks by Federal Reserve (Fed) chair Jerome Powell on Tuesday. The major has continued its upside journey as the impact of Federal Reserve Powell’s hawkish remarks has not been fully discounted yet. S&P500 futures have retreated after an extremely weak recovery in the Asian session, portraying a healthy risk-off mood as the recovery movement has been capitalized by the market participants for making fresh shorts. The US Dollar Index (DXY) has refreshed its three-month high above 105.80 and is gathering strength for making more gains. A confirmation of bigger rates from Federal Reserve’s Powell has resulted in more fuel for US Treasury yields. The return on 10-year US Treasury bonds has recaptured the 4.0%. Rising US yields might result in a heavy sell-off in growth and tech stocks as their future cash flows will be discounted at a higher rate. Fed Powell endorses a higher terminal rate than previously anticipated The street is aware of the United States' persistent inflation and the need of bringing it down quickly to comfort households from rising payouts. The US inflation was declining at a higher rate than anticipation till December. However, January’s above-targeted inflation figures, resilience in consumer spending, and surprising heavy addition of payrolls in the labor market have renewed fears of stubborn inflation. This forced Fed’s Powell to sound extremely hawkish for interest rate guidance. Fed’s Powell in his testimony before Congress cited “ultimate level of interest rates is likely to be higher than previously anticipated,” after the “latest economic data have come in stronger than expected.” US Employment to provide more clarity on interest rate guidance This week, Federal Reserve (Fed) Governor Christopher Waller cited February’s strong economic indicators as a one-time blip and the price pressures will resume their downtrend from next month. Contrary to that, Federal Reserve’s Powell was extremely harsh on interest rate guidance. For clarity, investors are keenly awaiting the release of the United States Automatic Data Processing (ADP) Employment Change data, which is seen at 200K, higher than the former release of 106K. An upbeat US ADP Employment data will bolster the case of a bigger rate hike by the Fed in its March monetary policy meeting. As per the CME FedWatch tool, the chances of 50 basis points (bps) rate hike have reached 72%. Bank of Canada to keep monetary policy steady The Canadian Dollar is expected to deliver power-pack volatility as the Bank of Canada (BoC) will announce the interest rate decision ahead. Bank of Canada Governor Tiff Macklem has already announced a pause in the policy tightening spell as the central bank believes that the current monetary policy is restrictive enough to tame Canada’s sticky inflation. An unchanged monetary policy by the Bank of Canada and rising chances of bigger rates from the Federal Reserve will lead to a divergence in the Fed-BoC policy. USD/CAD technical outlook USD/CAD has come out of the previous seven-day consolidation and has also delivered a breakout of the Descending Triangle chart pattern on the daily scale. The downward-sloping trendline of the chart pattern is plotted from October 13 high at 1.3978 while the horizontal support is placed from November 15 low at 1.3226. Advancing 10-period Exponential Moving Average (EMA) at 1.3634 indicates that the upside momentum is extremely powerful. The Relative Strength Index (RSI) (14) is oscillating in the bullish range of 60.00-80.00, indicating that the bullish momentum is already active.
The USD/MXN Pair Could Then Aim To Surpass The February Monthly Swing High

The USD/MXN Pair Is Likely To Remain Depressed

TeleTrade Comments TeleTrade Comments 08.03.2023 08:43
USD/MXN struggles to extend two-day rebound from multi-month low, sidelined of late. Failure to cross 50-EMA, one-month-old falling trend line recalls bears. One-week-long horizontal support area can restrict immediate downside. USD/MXN retreats from intraday high, snapping a two-day uptrend, as it drops to 18.10 heading into Wednesday’s European session. In doing so, the Mexican Peso (MXN) pair fades the early-week rebound from the lowest levels since April 2018. USD/MXN rose the most in more than a month the previous day on crossing the one-week-old horizontal resistance area surrounding 18.03-07. The recovery moves also surpass a downward-sloping trend line from February 06. However, failure to cross a convergence of the one-month-long descending resistance line and 50-bar Exponential Moving Average (EMA), around 18.15-16 by the press time, recalled the USD/MXN bears. Even so, the previous support line from early February, around 18.10 restricts the quote’s immediate downside ahead of the resistance-turned-support zone near 18.07-03. Following that, the 18.00 round figure could prod the USD/MXN bears before directing them to the recently flashed multi-month low of 17.94. On the contrary, a clear upside break of the 18.15-16 resistance confluence becomes necessary for the USD/MXN bulls to take entries. Though, the Mexican Peso pair buyers remain off the table unless witnessing a clear upside break of the one-month-old horizontal resistance, around 18.50. Overall, USD/MXN is likely to remain depressed even as the buyers managed to keep the reins in the last two days. USD/MXN: Four-hour chart Trend: Further downside expected
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

Limited Recovery Of The Aussie Pair Is Expected

TeleTrade Comments TeleTrade Comments 08.03.2023 08:45
AUD/USD picks up bids to pare the biggest daily loss in a month. Short-term support line joins oversold RSI (14) to trigger corrective rebound. Previous support line from February, 50-SMA restrict recovery moves. Multiple levels to prod the Aussie pair bears around 0.6540-20 region. AUD/USD recovers from a four-month low surrounding 0.6565 as it approaches the 0.6600 threshold heading into Wednesday’s European session, poking 0.6595 by the press time. In doing so, the Aussie pair bounce off a two-week-old descending support line while paring the biggest daily loss since February 03. Not only the downward-sloping support line from February 17 but the oversold RSI (14) also puts a floor under the AUD/USD price. The recovery moves, however, remain elusive as the previous support line from February 06, close to 0.6625 at the latest, guards the pair’s nearby upside. Following that, the 50-SMA hurdle surrounding 0.6725 can challenge the AUD/USD buyers. It should be noted that the upside break of 0.6725 isn’t an open invitation to the AUD/USD bulls as the monthly high near 0.6775 appears the key hurdle. Meanwhile, a downside break of the aforementioned support line, close to 0.6565 at the latest, could drag the Aussie prices towards the 0.6540-20 support zone as multiple levels marked in October 2022 might challenge the bears afterward. In a case where the AUD/USD pair remains bearish past 0.6520, the odds of witnessing a slump toward the previous yearly low surrounding 0.6170 can’t be ruled out. AUD/USD: Four-hour chart Trend: Limited recovery expected
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

Expectations That The Bank Of Japan Will Maintain The Ultra-Loose Policy Settings, Is Pushing The USD/JPY Pair Higher

TeleTrade Comments TeleTrade Comments 08.03.2023 08:59
USD/JPY touches a fresh YTD peak on Wednesday amid sustained USD buying interest. Rising bets for a 50 bps Fed rate hike in March, elevated US bond yields boost the USD. The risk-off mood lends some support to the safe-haven JPY and caps gains for the pair. The USD/JPY pair gains traction for the second straight day on Wednesday and climbs to its highest level since mid-December. The pair maintains its bid tone through the early European session and is currently placed around the 137.60 region, just above a technically significant 200-day Simple Moving Average (SMA). The overnight hawkish remarks by Federal Reserve Chair Jerome Powell pushes the US Dollar to a three-month high, which, in turn, is seen acting as a tailwind for the USD/JPY pair. In the prepared remarks for his semi-annual congressional testimony, Powell indicated that interest rates might need to go up faster and higher than previously anticipated. Powell added that the Fed is prepared to increase the pace of rate hikes to combat stubbornly high inflation and warned against prematurely loosening policy. This, in turn, lifts bets for a 50 bps rate hike at the March policy meeting and remains supportive of elevated US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond is holding steady near the 4.0% threshold and the rate-sensitive two-year Treasury note stands tall near its highest level since 2007. This continues to lend support to the Greenback, which, along with expectations that the Bank of Japan (BoJ) will maintain the ultra-loose policy settings, is pushing the USD/JPY pair higher. It is worth recalling that the incoming BoJ Governor Kazuo Ueda last week stressed the need to maintain the ultra-loose policy to support the fragile economy.  Ueda also said that the central bank isn't seeking a quick move away from a decade of massive easing. This marks a big divergence in comparison to the Fed's hawkish stance and supports prospects for a further appreciating move for the USD/JPY pair. That said, the risk-off mood benefits the JPY's safe-haven status and keeps a lid on any further gains for the major. Nevertheless, the fundamental backdrop seems tilted firmly in favour of bullish traders. Market participants now look forward to the US economic docket, featuring the release of the ADP report on private-sector employment and JOLTS Job Openings data. Apart from this, Powell's second day of testimony before the House Financial Services Committee should influence the USD price dynamics and provide some impetus to the USD/JPY pair. The focus will then shift to the BoJ meeting and the US NFP report on Friday.
Analysis Of The USD/IDR Pair By Economists At ING

Analysis Of The USD/IDR Pair By Economists At ING

TeleTrade Comments TeleTrade Comments 08.03.2023 09:42
The Indonesian Rupiah in February lost some of the gains it made in January. Economists at ING expect the USD/IDR pair to move gradually lower over the coming months. IDR could lag regional peers “Bank Indonesia (BI) Governor Perry Warjiyo, declared victory against inflation, opting to keep rates untouched at the February meeting despite headline inflation staying well-above target. The end of the BI rate hike cycle means the IDR will be leaning heavily on the trade surplus for support.”  “We expect the IDR to recover slightly given expectations for the trade balance to remain in surplus, but the end of the BI rate hike cycle means the IDR could lag regional peers.”       “USD/IDR – 1M 14,900.00 3M 14,600.00 6M 14,450.00 12M 14,350.00”
New Zealand dollar against US dollar decreased by 1.07% yesterday

The Broader Risk Sentiment Should Influence The NZD/USD Pair

TeleTrade Comments TeleTrade Comments 08.03.2023 09:46
NZD/USD languishes near its lowest level since November amid sustained USD buying. The USD remains pinned near a multi-month top amid bets for aggressive Fed rate hikes. The prevalent risk-off environment further acts as a headwind for the risk-sensitive Kiwi. The NZD/USD pair seesaws between tepid gains/minor losses, around the 0.6100 mark through the early European session and consolidates its recent decline to the lowest level since November 17 touched earlier this Wednesday. The US Dollar builds on the previous day's blowout rally led by more hawkish remarks by Federal Reserve Chair Jerome Powell and climbs to a fresh multi-month top, which, in turn, is seen acting as a headwind for the NZD/USD pair. Powell surprised investors and raised the possibility of larger rate hikes to tackle sticky inflation. In the prepared remarks for the semi-annual congressional testimony, Powell warned that interest rates might need to go up faster and higher than previously anticipated. The markets were quick to react and started pricing in a greater chance of a 50 bps lift-off at the March FOMC policy meeting, which remains supportive of elevated US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond is holding steady near the 4.0% threshold and the rate-sensitive two-year Treasury note stands tall near its highest level since 2007, which, along with a fresh wave of the global risk-aversion trade, continues to lend support to the safe-haven USD. The market sentiment remains fragile amid worries about economic headwinds stemming from rapidly rising borrowing costs. Adding to this, fading optimism over a strong Chinese economic recovery, along with US-China tensions, temper investors' appetite for perceived riskier assets. This is evident from a sea of red across the equity markets, which further benefits the Greenback's status as the global reserve currency and contributes to capping any meaningful upside for the risk-sensitive Kiwi. That said, the extremely oversold Relative Strength Index (RSI) on hourly charts helps limit losses for the NZD/USD pair, at least for the time being. Nevertheless, the fundamental backdrop seems tilted firmly in favour of bearish traders and suggests that the path of least resistance for spot prices is to the downside. Hence, any attempted recovery move is more likely to get sold into and runs the risk of fizzling out rather quickly. Investors look forward to the US macro data for a fresh impetus. Wednesday's US economic docket features the release of the ADP report on private-sector employment and JOLTS Jobs Opening data later during the early North American session. This, along with the US bond yields and Powell's second day of testimony before the House Financial Services Committee, will drive the USD demand. Apart from this, the broader risk sentiment should influence the NZD/USD pair and allow traders to grab short-term opportunities.
Rates Spark: Bracing for more

Decision Of The Bank Of Canada Ahead, Powell’s Comments Sent The Rate Hike Expectations Significantly Up

Swissquote Bank Swissquote Bank 08.03.2023 10:09
Investors got a double shot of hawkishness from Federal Reserve (Fed) Chair Jerome Powell’s semi-annual testimony before the US Senate yesterday. Powell Powell’s comments sent the rate hike expectations significantly up and wreaked havoc across the US treasury and equity markets and the US dollar. Data Moving forward, the next few data points will be VERY important in cementing the expectation of a 50bp hike at the March 21-22 FOMC meeting. Today, the ADP report and job openings data. JOLTS data would better soften this month, after last month’s booming figure of 11 mio.On Friday, February jobs report will be released. We’d better see an easing here as well after last month’s blowout half-a-million NFP read. Finally, the latest CPI update is due next Tuesday. And again, it’d better head sufficiently lower after last month’s disinflation disillusion. Fed If the fresh data doesn’t go where the Fed wants to see them, bigger rate hikes will be on the menu, and hope of soft-landing and easy disinflation could fade away. USD And with all the hawks in the air, the US dollar went straight up yesterday and there is no reason to bet on a softer US dollar for the next couple of days. The dollar will likely consolidate and extend gains against most majors. Bank of Canada Bank of Canada (BoC) is expected to keep the rates unchanged at today’s monetary policy meeting. Watch the full episode to find out more! 0:00 Intro 0:35 Powell the Hawk 4:07 Data Watch 5:48 FX update: USD up, EUR, AUD down 8:31 BoC to do nothing Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #Powell #testimony #inflation #jobs #economic #data #BoC #RBA #rate #decision #USD #AUD #EUR #CAD #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

The European Currency Experienced Significant Pressure

Paolo Greco Paolo Greco 08.03.2023 10:15
The EUR/USD currency pair traded on Tuesday as though it were paying attention to our recommendations and forecasts. In recent days, we have frequently discussed how the price frequently reverses its direction of movement and surpasses the moving average line. The upward movement appeared to have started on Monday and might have continued, but on Tuesday the pair simply collapsed downward. Also, this is exactly what we anticipated given that we have recently been discussing the overbought European currency, its unwarranted increase in the second half of the year 2022, as well as the lack of growth factors. Yet, we think that Jerome Powell's statement was simply a trigger for the current strengthening of the US dollar that eventually occurred. In any event, Powell's "hawkish" statement accidentally caused the US dollar's decline when it was scheduled to start growing again. In the next few sections, we shall discuss the Fed chairman's speech, but for now, allow us to state the following. In the medium term, a new wave of movement to the south may well begin with the current collapse of the European currency. The market has already demonstrated recently that it is not prepared to purchase the euro. The European currency experienced significant pressure even in those years when growth would have been reasonable or at least not at odds with the underlying conditions. Hence, a new fall was coming. Of course, the pair may simply follow the British pound's lead and remain flat, but given that it has already departed its side channel, it may instead continue to decline. So, both pairs, which frequently move in the same manner, have fantastic potential to advance in the direction that we recently anticipated. The two once more rested on the Senkou Span B line on the 24-hour TF. If it is overcome, there is a greater possibility that quotes may decline more. In this instance, it may go all the way to the level of 1.0200. We think that such a move would be entirely appropriate, even from a fundamental perspective. The US rate will remain higher than the rate in the European Union for a considerable amount of time since the Fed continues to maintain a more hawkish stance than the ECB. The Fed's chairman made a hint about a longer rate increase. What specifically did the Fed chairman say to Congress, then? If readers recall or familiarize themselves with our most recent publications, they will be able to verify what we have repeatedly stated: the US rate will need to be raised considerably more than 5.25%, as many are currently anticipating. The basic calculation indicates that it will only take 1-2 more rises to bring inflation back to 2%. Nevertheless, the Fed intends to return to price stability as soon as feasible and will not prolong the pleasure for a long time. Even so, in the European Union or the UK, this scenario would take far longer. The rate should therefore keep rising in any event. In addition, we noted that since energy prices have declined, which has an impact on the costs of practically all goods and services, inflation has slowed down over the past six months in many nations throughout the world. But, the decline in the price of oil and gas could not endure indefinitely, thus this positive inflationary factor eventually had to be leveled. And that's what occurred. The Fed also enjoys a strong economy, a low likelihood of a recession, a strong labor market, and record-low unemployment. As a result, the Central Bank not only has the capability but also the motivation to actively fight rising inflation. Jerome Powell essentially acknowledged that on Tuesday in front of Congress. He predicted that the struggle against inflation would be long and uneven, and that interest rates would have to be raised much more than previously anticipated. There was a chance that inflation would stall in February or March because it barely slowed down in January. The likelihood of a 0.5% rate hike in March has now increased to roughly 50%, although traders were not even seriously considering this possibility a week ago. According to Powell, the regulator is prepared to speed up the tightening of monetary policy once again if necessary. To be honest, we did not expect such a dramatic reaction to Powell's speech, but we must say that the Fed chairman was exceptionally open and truthful this time. His speech could not help but strengthen the dollar, though it could have been lower, as only such a situation could have been foreseen recently. And given the recent figures on the nonfarm sector and inflation, what else might we anticipate? As of March 8, the euro/dollar currency pair's average volatility over the previous five trading days was 95 points, which is considered "high." Therefore, we anticipate that the pair will move on Wednesday between the levels of 1.0470 and 1.0660. A new phase of upward movement will be signaled by the Heiken Ashi indicator turning back to the top. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0964 Trade Suggestions: The moving average line has been reclaimed below by the EUR/USD pair's consolidation. Unless the Heiken Ashi indication turns up, you can continue to hold short positions with targets of 1.0498 and 1.0470. If the price is fixed above the moving average line with a target of 1.0742, long positions can be opened. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. The short-term trend and the direction in which to trade right now are determined by the moving average line (settings 20.0, smoothed). Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 01:00 2023-03-09 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337000
Bank of England Faces Dilemma: Will They Raise Rates by 25bps or 50bps?

The Likelihood That The GBP/USD Pair Will Continue To Decline Will Increase

Paolo Greco Paolo Greco 08.03.2023 10:41
The GBP/USD currency pair also began a decline on Tuesday, which few predicted. In addition, we anticipated that the decrease would occur gradually rather than rapidly. The pair had been in "swing" mode for several weeks, but yesterday it managed to break through the level of 1.1932, which served as the bottom border of the side channel in which the "swing" was realized. If you look closely at the chart above, you will note that even in flat conditions, each succeeding price peak was lower than the one before it. The price attempted to break through the 1.1932 level at least three times, each time rebounding off it by a smaller distance. That is why we have consistently stated that we expect the pair to collapse again. The British pound is still overbought, as seen by its 2,100-point increase in just three months towards the end of the previous year. The British pound frequently increased irrationally and too rapidly reversed a two-year decline by 50%. There aren't many reasons right now that could help the pound rise and the ones that did earlier have long since been figured out by traders. Hence, a new decline in the value of the pound was inevitable. The only uncertainty was the exact commencement time. Although we could not fully rule it out, we did not anticipate it to begin yesterday. Jerome Powell didn't mention anything fundamentally new in Congress. The mood of market participants is undoubtedly affected whenever the head of the Fed publicly states his willingness to speed up the tightening of monetary policy once more, but as we previously stated, everything has been leading up to this for a very long time. If the market did not understand this, then everything makes sense, because it received grounds for additional dollar purchases "straight in the forehead" yesterday. The pair fell to the crucial Fibonacci level of 38.2% (1.1842) on the 24-hour TF. The likelihood that the pair will continue to decline will increase with a confident passing of this level, which from our perspective would be quite rational. Additionally, near the level of 1.1842, the Senkou Span B line ran for a while, which had only recently moved higher. As a result, overcoming 1.1842 will allow bears to fall further. Then, the targets will fall between 1.13 and 1.15. What is the British pound currently capable of? This week in the UK, there won't be many particularly significant publications. Of course, we're referring to the GDP and industrial output numbers that will be released on Friday. These are viewed in the same way as Jerome Powell's congressional speeches. If there is no "surprise" or outright surprise, there will almost certainly be no reaction. It is a fact that the GDP data will be released monthly rather than quarterly, and that the report on industrial production has not recently piqued the curiosity of traders. It is also challenging to anticipate support for the pound from US news and events. Powell is unlikely to modify his rhetoric today when he speaks in the same Congress but before a different committee. What else is in store for us this week? Only the nonfarm and unemployment reports from Friday. It is doubtful that unemployment will increase, at least not much. Therefore, a 0.1% increase will not justify selling the dollar. The Nonfarm data for February might even fall short of expectations, but all will depend not on the actual number but rather on the projection and how closely the actual figure corresponds to it. Consequently, even if the projection is overly optimistic, it will still cause the dollar to increase. The British pound can only increase if Non-Farm Payrolls have a dreadful value. And not for long, because the market is already expecting the Fed to tighten its monetary policy or accelerate rate hikes. And this is the most "bullish" aspect that can exist, negating all the others. Thus, we do not anticipate significant growth of the pair in the foreseeable future. When Andrew Bailey releases a "hawkish" report, perhaps something will change. We do not currently see any way that the "bearish" market sentiment can change to "bullish," whether it is before or after the Fed and BA's next meetings. You need to make a small adjustment after yesterday's collapse, but the Heiken Ashi indicator should identify the corrective and not try to predict when it will start. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 124 points. This value is "high" for the dollar/pound exchange rate. As a result, on March 8 we anticipate movement that is contained inside the channel and is limited by levels 1.1719 and 1.1967. A round of upward corrective is indicated by the Heiken Ashi indicator's upward reversal. Nearest levels of support S1 – 1.1841 S2 – 1.1780 S3 – 1.1719 Nearest levels of resistance R1 – 1.1902 R2 – 1.1963 R3 – 102024 Trade Suggestions: In the 4-hour timeframe, the GBP/USD pair once more stabilized under the moving average. Unless the Heiken Ashi indication turns up, you can continue to hold short positions with targets of 1.1780 and 1.1719. If the price is stable above the moving average, long positions with targets of 1.2024 and 1.2085 may be taken into account. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. The short-term trend and the direction in which to trade right now are determined by the moving average line (settings 20.0, smoothed). Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 01:00 2023-03-09 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337002
Japanese yen increased by over 0.5% on Friday. Japanese monetary policy may change soon

USD/JPY Is Above 137.00, The Aussie Pair Is Trading Below 0.66, GBP/USD And EUR/USD Are Also Lower

Kamila Szypuła Kamila Szypuła 08.03.2023 12:55
The dollar hit multi-month highs against most other major currencies on Wednesday after Federal Reserve Chairman Jerome Powell warned that US interest rates may need to rise even faster and higher than expected to contain stubborn inflation. Powell told lawmakers on Capitol Hill on Tuesday that recent economic data from the United States was better than expected, so the pace and size of future hikes may also need to be stepped up, pushing expectations for short-term US interest rates higher. Higher interest rates are good for the dollar as they improve its yield and investors seek safety while global stock markets fall. The dollar also surpassed its 200-day moving average against the yen for the first time this year. The dovish slope from the RBA contrasted with the hawkish Jerome Powell. USD/JPY The yen pair started the day trading above 137.40 and rising towards 137.90. After this increase, the USD/JPY pair began to fall. At the time of writing, the USD/JPY pair was above 137.40, but has the potential to fall further towards 137.30. On the Japanese front, during the final political meeting with Governor Haruhiko Kuroda this week, the Japanese central bank will maintain a very loose monetary policy. Data on Tuesday showed Japan's real wages fell by the most in nine years in January, as four-decade high inflation erodes Japan's purchasing power. EUR/USD The EUR/USD pair started trading above 1.0545, but quickly started a decline towards 1.0530. After this decline, the EUR/USD pair started rising towards 1.0545 and kept trading in the 1.0540-1.545 range. At the time of writing, papra has dropped to 1.0540 and is now at 1.0537. German data released today showed that retail sales weakened more than expected, while industrial production rose sharply, easily beating forecasts. Moreover, the hawkish tone of Powell's comments also seems to have an impact on expectations of interest rate hikes by the European Central Bank (ECB). According to Reuters, markets see a 65% probability that the ECB's final interest rate will be 4.25% this year, compared to a 4.00% final interest rate last week alone. The ECB's hawkish bets could help the euro limit losses in the short term. GBP/USD The cable pair started trading above 1.1825 but similarly to the euro then fell. After falling to the level of 1.1810, the GBP/USD pair rebounded and rose towards 1.1840. After breaking above 1.1845, the pound pair fell back towards 1.1830. The pound reacted negatively to Fed Chairman Jerome Powell's more aggressive guidance during yesterday's appearance before the Senate Banking Committee. UK OIS markets are now fully pricing in a 25 basis point (BoE) rate hike for the first time since February 27. While BoE expectations are hawkish, the policy divergence is more pronounced than ever with CME Group's FedWatch tool pointing to a 75% probability of a 50 bp rate hike at the next Fed meeting. AUD/USD The movement of the Australian pair is similar to that of the pound-euro pair. After falling to the level of 0.6570, the AUD/USD pair broke again and broke above 0.66, but did not hold and fell to the level of 0.6698. The Australian dollar fell to a four-month low on Wednesday as diverging interest rate expectations between the US and Australia sent local yields to their biggest discount to government bonds in nearly four decades. Source: finance.yahoo.com, investing.com
Australian dollar against US dollar - "It seems that the currency will soon hit a price above 0.68"

AUD/USD Pair Sustained Its Second Most Bearish Day

Kenny Fisher Kenny Fisher 08.03.2023 13:02
The Australian dollar has stabilized on Wednesday after a dreadful outing a day earlier. In the European session, AUD/USD is trading just below the 0.66 line. AUD/USD sustained its second most bearish day this year on Wednesday, with a staggering decline of 2.1%. Earlier today, the Australian dollar touched a low of 0.6567, its lowest level in four months. A combination of a dovish rate hike by the Reserve Bank of Australia and hawkish comments from Fed Chair Powell sent the Australian dollar reeling. The RBA hike of 25 basis points was practically business as usual, but investors picked up on the removal of a reference to raising rates “over the months ahead”, a possible signal that the RBA could be near the end of the current rate-tightening cycle. The rate statement explicitly said that inflation had peaked, clearly a dovish signal from policy makers. Earlier today, Governor Lowe used a second “p” word which weighed on the Australian dollar, saying that a pause in rate increases was closer. Does that mean that the April meeting will be a “one and done”? Perhaps, but Lowe has said previously that the Bank will make its rate decisions on a meeting-by-meeting basis, after evaluating the data. This means that the next inflation and employment reports will have a critical impact on what the RBA does at next month’s meeting. In the US, Fed Chair Powell remained in hawkish mode in his testimony on Capitol Hill. Powell pointed to the recent string of strong releases and said the Fed would likely need to raise rates more than it had anticipated. Powell said that the Fed would evaluate the need to increase the pace of rate hikes based on the “totality of the data”. The remarks caused a huge shift in market pricing, with the likelihood of a 50-bp at the March 22 meeting rising to 70%, up from 25% prior to Powell’s testimony, according to the CME Group.   AUD/USD Technical 0.6565 is a weak support line. Below, there is support at 0.6402 There is resistance at 0.6626 and 0.6749 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The Bank Of Canada Is Widely Expected To Maintain The Cash Rate At 4.50%

Kenny Fisher Kenny Fisher 08.03.2023 14:04
The Canadian dollar has steadied on Wednesday, after sliding 1% a day earlier. Later today, the Bank of Canada meets for its monthly meeting. BoC likely to pause The Bank of Canada is widely expected to take a pause at today’s meeting and maintain the cash rate at 4.50%. This would mark the first pause in rate hikes since the current tightening cycle began in January 2022. The BoC has raised rates by 425 basis points during this time and the tightening has had a dampening effect on the economy – GDP in Q4 flattened out and inflation has fallen under 6%. There is a possibility that the BoC will continue to hold rates, but that will depend on the data, particularly inflation and employment. The shift in policy is bearish for the Canadian dollar, especially with the Federal Reserve expected to continue raising rates. Currently, there is only a 25-bp differential in rates between the US and Canada, but if the Fed keeps raising and the BoC stays on the sidelines, the divergence in rates will weigh on the Canadian dollar, which has plunged some 3% since its February high. It’s a very different story south of the border, where the US economy is churning out strong numbers and the disinflation process appears to be on hold. In his testimony on Capitol Hill, Fed Chair Powell noted that the latest (January) data was stronger than expected and signalled that the Fed would respond with higher rates than it had previously anticipated. Although the January numbers may have been a blip, the markets are marching to the Fed’s tune and have now priced in a 50-bp hike at the March 22 meeting at 75%, up from 25% prior to Powell’s testimony, according to the CME Group.   USD/CAD Technical 1.3701 and 1.3784 are the next resistance lines 1.3571 is a weak support line, followed by 1.3478 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Lagarde's Dilemma: Balancing Eurozone's Slowdown and Inflation Pressure

S&P 500 And NASDAQ Composite Rose, Only Dow Jones Fell

InstaForex Analysis InstaForex Analysis 09.03.2023 08:00
At the close of the New York Stock Exchange, the Dow Jones fell 0.18%, the S&P 500 rose 0.14% and the NASDAQ Composite rose 0.40%. Fed chief Jerome Powell said the regulator will continue to raise the discount rate in the fight against inflation. According to CME Group, most analysts now expect the regulator to raise the discount rate immediately by 0.5 percentage points, to 5-5.25% per annum. Dow Jones Shares of Intel Corporation led the way among the components of the Dow Jones index today, which gained 0.45 points (1.76%) to close at 25.98. Quotes of Caterpillar Inc rose by 2.58 points (1.05%), closing the session at 248.72. Home Depot Inc rose 2.88 points or 1.00% to close at 291.49. The least gainers were Merck & Company Inc, which shed 2.99 points or 2.69% to end the session at 108.28. The Travelers Companies Inc (NYSE:TRV) was up 2.60 points or 1.44% to close at 177.77, while Verizon Communications Inc was down 0.38 points or 1.00%. and finished trading at 37.53. S&P 500  Leading gainers among the components of the S&P 500 in today's trading were Advanced Micro Devices Inc, which rose 3.97% to hit 85.37, Arista Networks, which gained 3.90% to close at 148.44, and also shares of NVIDIA Corporation, which rose 3.83% to end the session at 241.81. The least gainers were Norwegian Cruise Line Holdings Ltd, which shed 4.20% to close at 15.29. Shares of Brown Forman lost 4.20% to end the session at 63.48. Regeneron Pharmaceuticals Inc fell 3.70% to 745.20. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Kimball International Inc, which rose 84.35% to hit 12.37, Castor Maritime Inc, which gained 75.93% to close at 0.95, and also shares of Maxeon Solar Technologies Ltd, which rose 44.00% to close the session at 27.00. The least gainers were SRAX Inc, which shed 62.03% to close at 0.60. Shares of Intelligent Bio Solutions Inc shed 42.66% to end the session at 3.40. Quotes of ETAO International Co Ltd decreased in price by 40.75% to 1.89. Numbers On the New York Stock Exchange, the number of securities that rose in price (1564) exceeded the number of those that closed in the red (1446), while quotes of 111 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,934 stocks fell, 1,682 rose, and 194 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.40% to 19.12. Gold Gold futures for April delivery lost 0.10%, or 1.75, to hit $1.00 a troy ounce. In other commodities, WTI April futures fell 1.37%, or 1.06, to $76.52 a barrel. Brent oil futures for May delivery fell 0.94%, or 0.78, to $82.51 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.01% to 1.05, while USD/JPY rose 0.13% to hit 137.32. Futures on the USD index rose 0.05% to 105.64.   Relevance up to 03:00 2023-03-10 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315420
Australian dollar against US dollar: USD may rise on the back of the Republicans and Democrats negotiations

The AUD/USD Price Started The Day Lower

InstaForex Analysis InstaForex Analysis 09.03.2023 08:00
The Australian dollar traded in a 60-point range yesterday, shedding tension after Tuesday's strong decline. The upper limit of the correction was the target level of 0.6640. The price started the day lower, but it is unlikely to fall below support at 0.6550, as market participants are preparing for tomorrow's U.S. labor report. A breakthrough of 0.6550 will open the target at 0.6455. On the 4-hour chart, the price is falling ahead of the oscillator, and if the price falls today, ahead of the important U.S. report, it will turn into a local convergence. And so the aussie's sideways movement is supported. Let's wait for Friday   Relevance up to 03:00 2023-03-10 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337088
The GBP/USD Pair Is Expected The Consolidation To Continue

The GBP/USD Pair Is Expected The Consolidation To Continue

InstaForex Analysis InstaForex Analysis 09.03.2023 08:02
The pound was slightly up yesterday (16 pips) as part of the consolidation before Friday's US employment data. Today I also expect the consolidation to continue. The intermediate level of 1.1840 (low of January 6) prevents the upward movement, while a number of supports, formed since last July, prevents the price from falling further. In other words, a good fundamental factor is necessary for a breakthrough, which could be the employment report. The first target is the September 13, 2022 high at 1.1737, while the second target is the October 27, 2022 high (1.1644). On the four-hour chart, the signal line of the Marlin oscillator is rising, which keeps the price from falling prematurely. So, we are waiting for the price to fall starting tomorrow.   Relevance up to 03:00 2023-03-10 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337090
EUR/USD: Examples of things that could get the market moving are US treasury yields moving out of the range on data improving or deteriorating

The EUR/USD Price Is Still Pulling Towards The Target Range

InstaForex Analysis InstaForex Analysis 09.03.2023 08:04
Yesterday, the currency market took a bit of a breather after Tuesday's big drop. Today, the market is preparing for Friday's U.S. jobs report. Such preparation might be in the form of an ongoing sideways price movement, or with some loss of positions against the dollar, as the US stock market closed mixed yesterday and the yields on the government bonds are slightly rising in the Asian session. There are no changes on the daily chart, the price is still pulling towards the target range of 1.0443/70. The Marlin oscillator is directed upward, but now it looks like its natural correction before it falls further. The situation on the four-hour chart repeats the technical picture of the daily chart. The price develops under both indicator lines, the MACD line turns downward, the Marlin oscillator discharges before falling further.   Relevance up to 03:00 2023-03-10 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337092
UK Gfk Consumer Confidence index got better fourth month in a row

The GBP/USD Pair Could Reach The 2/8 Murray Zone

InstaForex Analysis InstaForex Analysis 09.03.2023 08:09
Early in the European session, the British pound is trading around 1.1840 above the 21 SMA and around the 1/8 Murray line. The GBP/USD pair has remained consolidated for the last 24 hours at the same trading levels because the market has discounted Powell's aggressive tone. The key data that could give strong volatility to the British pound is the nonfarm payrolls which will be released on Friday. Meanwhile, a recovery is expected in the next few hours only if the British pound consolidates above 1.1840. If GBP/USD continues to trade above support at 1.1840 which gives the bulls the opportunity to buy at a good price, the pair could reach the 2/8 Murray zone at 1.1962 and could even reach the psychological level of 1.20. A change in trend could occur if the British pound breaks the top of the downtrend channel and consolidates above 1.2065. Above this level, the upside target will be 1.2207 (4/8 Murray) and could even go as high as 1.2446 (January high). Conversely, if the British pound trades below the 200 EMA located at 1.1962, the instrument could decline towards 1.1775 and projections of 1.1640. On the 1-hour chart, we can see a downtrend channel formed since February 24 and an inverted pennant pattern. In case the British pound falls below 1.1820, the sell signal could be activated and the instrument could reach 1.1775. After breaking the channel, it could reach 0/8 Murray at 1.1718. Our trading plan is if the pound trades above 1.1840, it will clearly be a signal to buy with targets at 1.1962. On the contrary, if it falls below 1.1820 we can sell with targets at 1.1770 and 1.1718 (0/8 Murray). The eagle indicator is giving oversold signals, so GBP/USD is likely to have a technical bounce in the next few hours.     Relevance up to 04:00 2023-03-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315432
Japanese yen increased by over 0.5% on Friday. Japanese monetary policy may change soon

Technical Outlook Of Movement Of The USD/JPY Pair

Torben Melsted Torben Melsted 09.03.2023 08:11
USD/JPY has tested the 38.2% corrective target at 138.17, which also happens to be close to the peak of wave iv of A, which came in at 138.18. This is enough to complete wave B and set the stage for wave C lower towards the equality target between wave A and C at 115.99. Short-term we need a break below minor support at 136.19 and more important, we need a break below support at 135.36 to confirm that wave B has completed and wave C is unfolding.   Relevance up to 06:00 2023-03-10 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315434
The USD/CNH Pair Remains On The Bear’s Trend

China’s Reopening Has Failed To Propel Domestic Demand

TeleTrade Comments TeleTrade Comments 09.03.2023 08:34
USD/CNH has scaled above 6.9750 as the Chinese economy has registered a deflation by 0.5%. Producers have lowered prices of goods and services at factory gates due to sluggish demand. Upbeat US ADP Employment data has confirmed that January’s strong data was not a one-time blip. The USD/CNH pair has jumped above 6.9750 as China’s National Bureau of Statistics (NBS) has reported a sense of deflation in the Consumer Price Index (CPI) (Feb) data. Monthly CPI figures have contracted by 0.5% while the street was anticipating a decline to 0.2% from the former release of 0.8%. The prices of goods and services in China have accelerated by 1% annually, lower than the consensus of 1.9% and the prior release of 2.1%. Apart from that, the annual Producer Price Index (PPI) has contracted by 1.4% vs. the consensus of 1.3% contraction and 0.8% contraction in the prior release. This indicates that producers lowered the prices of goods and services at factory gates. The reason behind lowering prices could be sluggish demand. It seems that China’s reopening has failed to propel domestic demand. A sense of deflation might force the People’s Bank of China (PBoC) and the Chinese administration to inject helicopter money into the economy to support the overall demand. The US Dollar Index (DXY) is gathering strength as United States President Joe Biden has proposed an increase in corporation taxes from 21% to 28%. US Biden wants a 25% billionaire tax and large levies on rich investors. He has also proposed a tax on income over $400,000 at 39.6% in the budget. More taxes on US individuals will be considered as contracting Fiscal policy, which might support the Federal Reserve (Fed) in bringing down the stubborn inflation. Fed chair Jerome Powell has confirmed a higher terminal rate than previously anticipated as the battle against sticky inflation is getting complicated. Also, upbeat US Automatic Data Processing (ADP) Employment data has confirmed that January’s strong data on the labor market and consumer spending was not a one-time blip.  
Further Downside Of The AUD/JPY Cross Pair Is Expected

Further Downside Of The AUD/JPY Cross Pair Is Expected

TeleTrade Comments TeleTrade Comments 09.03.2023 08:37
AUD/JPY renews seven-week low as China prints downbeat CPI, PPI for February. Convergence of two-month-old ascending trend line, 50% Fibonacci retracement challenge bears amid oversold RSI (14) line. Recover remains elusive unless crossing 91.75 hurdle; MACD teases buyers. AUD/JPY sellers attack the short-term key support around 90.20 after China released downbeat inflation data early Thursday. Also weighing on the cross-currency pair are the headlines suggesting challenges to sentiment emanating from US President Joe Biden’s budget proposal for 2024, up for publishing on Friday. As per the latest inflation data from the National Bureau of Statistics of China, the headline Consumer Price Index (CPI) dropped to 1.0% YoY versus 1.9% expected and 2.1% prior while the Producer Price Index (PPI) also declines to -1.4% from -0.8% previous readings and -1.3% market consensus. Also read: China CPI in at 1.0% vs 1.9% expected, AUD unchanged With the downbeat inflation numbers from Australia’s key customer China, as well as the risk-off mood, AUD/JPY bears poke a convergence of the two-month-old ascending trend line and 50% Fibonacci retracement level of the pair’s January-February upside, near 90.20. It’s worth noting that the oversold RSI (14) joins the looming bull cross on the MACD to challenge the quote’s further downside. Also acting as an important nearby support is the 90.00 round figure. Should the quote breaks the 90.00 mark, the odds of witnessing a slump toward the 61.8% Fibonacci retracement level surrounding 89.55, also known as the golden ratio, can’t be ruled out. Meanwhile, AUD/JPY rebound needs validation from the 38.2% Fibonacci retracement level surrounding 90.90. However, a convergence of the 200-SMA and a 12-day-old descending resistance line, around 91.75 at the latest, appears a tough nut to crack for the AUD/JPY buyers. AUD/JPY: Four-hour chart Trend: Further downside expected
The USD/JPY Price Seems To Be Optimistic

Analysis Of The USD/JPY Pair Movement In H1 And H4 Chart

TeleTrade Comments TeleTrade Comments 09.03.2023 08:39
USD/JPY bulls committing to the price on the front side of the micro bull trend.  Bulls eye a break of the 200 DMA.  USD/JPY remains on the front side of the bull trend with the US Dollar still perched near a three-month high on Thursday. Traders have repriced a more aggressive pace of interest rate hikes in the wake of Federal Reserve chairman Jerome Powell's comments. Fed funds futures are now implying a 70% chance the Fed will raise rates by 50 basis points this month. This is up from just about 9% a month ago and favouring USD/JPY bulls as the following illustrates: USD/JPY H4 charts The 4-hour chart shows the bulls in control in and around the 200 DMA following a pullback into the Fibonacci scale.  USD/JPY H1 chart A meanwhile micro trendline has formed on the hourly chart and bulls appear to be committing to the price on the front side so far. 
The USD/MXN Pair’s Further Moves Rely On The Mexican Inflation Data

The USD/MXN Pair’s Further Moves Rely On The Mexican Inflation Data

TeleTrade Comments TeleTrade Comments 09.03.2023 08:42
USD/MXN retreats towards multi-year low as US Dollar struggles to cheer risk-off mood. US Dollar grinds despite President Biden’s controversial tax proposal, higher yields and hawkish Fed bets. Banxico shows more clarity over rate hike than Fed with no talks of policy pivot fueling Mexican Peso. USD/MXN eases to 17.96 during early Thursday, after a failed attempt to recover from the lowest levels since September 2017, tested the previous day. The quote’s latest weakness pays little to the risk-off mood while bracing for the key Mexican inflation data. Market sentiment sours as US President Joe Biden’s proposal for higher taxes appears an extra economic burden amid the looming recession woes. That said, Biden proposes raising corporation tax from 21% to 28% in his latest budget guide ahead of Friday’s release. The US Leader also aims for a 25% billionaire tax and large levies on rich investors. Additionally, disappointment from China’s inflation data also dims the prospects of recovery in the world’s second-largest economy and weighs on the risk profile and should have favored the US Dollar’s haven demand. On the same line Fed Chairman Powell repeated his hawkish calls of readiness to lift the rate while highlighting stronger-than-expected inflation pressure. The same bolstered bets for the Fed’s 50 bps rate hike but the Testimony 2.0 didn’t have anything new from what’s already heard on Tuesday and hence the US Dollar traders were mostly afraid of taking any major steps. Alternatively, Banxico appears more clear in its hawkish monetary policy bias and has already signaled a further rate hike in its latest monetary policy meeting where the Mexican central bank lifted the benchmark rate by 50 bps. Against this backdrop, S&P 500 Futures reverses the previous day’s bounce off a one-week low while refreshing the intraday bottom around 3,985. On the same line, the US 10-year Treasury bond yields rise to 3.99%, up one basis point (bp), whereas the two-year counterpart pares intraday losses near 5.05% at the latest. It’s worth noting that US yield curve inversion widened to the highest levels since 1981 and propelled the recession fears the previous day. Although the bears are in the driver’s seat, the USD/MXN pair’s further moves rely on the Mexican Inflation data for February. That said, downbeat forecasts for the Headline Inflation, Core Inflation and 12-month Inflation, join the recent challenge to sentiment to prod the bears. Technical analysis A daily closing below April 2018 lows surrounding 17.93 becomes necessary for the bears to keep the reins. That said, the oversold RSI (14) challenges USD/MXN pair’s further downside.  
Indonesia’s trade surplus narrows in March

The Indonesia Rupiah (IDR) Pair Retreats From A Two-Month High

TeleTrade Comments TeleTrade Comments 09.03.2023 08:43
USD/IDR holds lower ground near intraday bottom after reversing from multi-day top. Indonesia Retail Sales growth plummets to multi-month low in January. US Dollar’s pullback amid sluggish markets, positioning for Friday’s NFP seem to probe pair buyers. USD/IDR remains sidelined near 15,440, recently making rounds to the intraday low, even as Indonesia Retail Sales flashed disappointing data early Thursday. In doing so, the Indonesia Rupiah (IDR) pair retreats from a two-month high while snapping a three-day uptrend amid a broad US Dollar retreat. That said, Indonesia’s Retail Sales marked a 0.6% YoY contraction in January versus 0.7% previous rise. With this, the key statistics dropped to the lowest levels since September 2021 while snapping the 15-month winning streak. US Dollar Index (DXY) prints the first daily gains in three while keeping the early Asian session pullback from the highest levels since December 01, 2022. That said, the DXY’s latest moves seem to pay a little attention to the sour sentiment as the greenback buyers brace for Friday’s all-important US jobs report for February amid upbeat early signals. Talking about the sentiment, the S&P 500 Futures struggles for clear directions after bouncing off a one-week low the previous day. On the same line, the US 10-year Treasury bond yields rise to 3.99%, up one basis point (bp), whereas the two-year counterpart pares intraday losses near 5.05% at the latest. It’s worth noting that US yield curve inversion widened to the highest levels since 1981 and propelled the recession fears on Wednesday. However, an absence surprise in Fed Chair Powell’s Testimony 2.0 and mixed US data seemed to have triggered the US Dollar’s latest pullback. On Wednesday, the US ADP Employment Change rose to 242K in February versus 200K market forecasts and 119K prior (revised). Further, the US Goods and Services Trade Balance dropped to $-68.3B from the $-67.2B previous reading (revised) and $-68.9B analysts’ estimations. It should be noted that the US JOLTS Job Openings for January improved to 10.824M versus 10.6M expected but eased from 11.234M revised prior. It should be noted that the risk profile weakened early Thursday amid headlines suggesting US President Joe Biden’s proposal for higher taxes, which in turn appears an extra economic burden amid the looming recession woes. Looking forward, US Initial Jobless Claims for the week ended on March 03 will join the Challenger Job Cuts for February to entertain intraday traders of the USD/IDR. Technical analysis Despite the latest retreat, a daily closing below the 100-DMA level surrounding 15,420 becomes necessary for the USD/IDR bears to retake control
Australian dollar against US dollar - "It seems that the currency will soon hit a price above 0.68"

The Australian Dollar Might Continue To Face Selling Pressure

TeleTrade Comments TeleTrade Comments 09.03.2023 08:46
AUD/USD is attempting to scale above 0.6600, however, the risk-off mood is still intact. A Doji candlestick formation indicates indecisiveness among market participants. An oscillation in the 20.00-40.00 range by the RSI (14) indicates that the bearish momentum is currently active. The AUD/USD pair is displaying a subdued performance below 0.6600 in the Asian session. The upside in the Aussie asset seems restricted as Reserve Bank of Australia (RBA) Governor Philip Lowe has considered a pause in the rate-hiking spree and the Chinese economy is struggling to accelerate domestic demand despite significant reopening measures. S&P500 futures have witnessed immense pressure as a sense of deflation conveyed by Chinese Consumer Price Index (CPI) and Producer Price Index (PPI) data indicates that the economy will take plenty of time to strengthen its economic outlook. The US Dollar Index (DXY) is auctioning in a limited range above 105.20 as investors are awaiting the release of the United States Nonfarm Payrolls (NFP) data for fresh impetus. AUD/USD has formed a Doji candlestick pattern, which indicates indecisiveness among the sentiment of market participants for further direction. Usually, a Doji formation indicates a reversal after an established trend. However, it requires more filters to confirm a reversal. Also, the negligence of Doji is considered as the continuation of the ongoing trend. The Australian Dollar might continue to face selling pressure from the 10-period Exponential Moving Average (EMA) at around 0.6700. An oscillation in the 20.00-40.00 range by the Relative Strength Index (RSI) (14) indicates that the bearish momentum is currently active. The momentum indicator is not shown any sign of divergence and a situation of oversold. Going forward, a breakdown of Wednesday’s low at 0.6568 will drag the asst toward the horizontal support plotted from October 4 high at 0.6547 followed by the round-level support at 0.6500. In an alternate scenario, a break above Doji’s high at 0.6629 will push the Aussie asset toward December 22 low at 0.6650. A break above the same might expose the major to February 27 low near 0.6700. AUD/USD daily chart  
Analysis Of Situation Of The USD/INR Pair

Analysis Of Situation Of The USD/INR Pair

TeleTrade Comments TeleTrade Comments 09.03.2023 08:48
USD/INR extends the previous day’s pullback from one-week high, pressured around intraday low of late. US Dollar bulls take a breather at three-month high as traders await the key employment data amid mixed feelings. Cautious optimism in Asia adds strength to the Indian Rupee’s rebound. Second-tier data, risk catalysts eyed for intraday directions. USD/INR clings to mild losses around 81.85-90 during early Thursday in Europe, extending the previous day’s pullback from a one-week high. In doing so, the Indian Rupee (INR) pair cheers the US Dollar’s positioning for Friday’s jobs report amid sluggish early hours of trading. Adding strength to the USD retreat could be the inaction in the bond market as major yields remain sidelined after posting. With this, US Dollar Index (DXY) prints the first daily loss in three while keeping the early Asian session pullback from the highest levels since December 01, 2022. It should be noted, however, that the cautious optimism in Asia, mainly due to the sluggish S&P 500 Futures joining downbeat China inflation data, seems to cap the INR strength. On the same line could be the downbeat Japan growth numbers and downbeat sentiment in India after the Holi holidays. Elsewhere, an absence surprise in Fed Chair Powell’s Testimony 2.0 and mixed US data seemed to have triggered the US Dollar’s latest pullback. Furthermore, the US 10-year Treasury bond yields seesaw near 3.99% whereas the two-year counterpart pares intraday losses around 5.05% at the latest. It’s worth noting that US yield curve inversion widened to the highest levels since 1981 and propelled the recession fears on Wednesday. It’s worth observing that the mixed US data seemed to have favored the USD/INR bears even if the early signals for Friday’s employment report are upbeat. That said, the US ADP Employment Change rose to 242K in February versus 200K market forecasts and 119K prior (revised). Further, the US Goods and Services Trade Balance dropped to $-68.3B from the $-67.2B previous reading (revised) and $-68.9B analysts’ estimations. It should be noted that the US JOLTS Job Openings for January improved to 10.824M versus 10.6M expected but eased from 11.234M revised prior. To sum up, USD/INR is more likely a technical play than a fundamental as the pair’s inability to cross the 100-DMA keeps bears hopeful despite the likely improvement in the US Dollar. Technical analysis USD/INR’s failure to cross the 100-DMA hurdle during the previous day’s run-up, around 82.13 by the press time, keeps the bears hopeful of witnessing a slump towards an ascending support line from early November, close to 81.35 at the latest
RBNZ preview: Fiscal spending argues for a hawkish 25bp hike

Analysis Of The Prospects Of A Kiwi Pair (NZD/USD)

TeleTrade Comments TeleTrade Comments 09.03.2023 08:56
NZD/USD seesaws around intraday high while keeping the bounce off 3.5-month low. 50-HMA, two-week-old horizontal resistance area restrict immediate run-up inside short-term bullish channel. Oscillators suggest slower grind towards the north but buyers need validation from 0.6200. NZD/USD pares weekly losses around 0.6120 amid the early Thursday morning in Europe. In doing so, the Kiwi pair prints mild gains while snapping the previous three-day downtrend, as well as keeping the early-day rebound from the lowest levels since November 17, 2022. While portraying the quote’s latest rebound, an ascending trend channel from Tuesday gains major attention. That said, the NZD/USD price currently pokes a convergence of the fortnight-long horizontal resistance area, as well as the 50-Hour Moving Average (HMA), around 0.6130 by the press time. It’s worth noting, however, that the bullish MACD signals and the recently firmer RSI (14) hint at the Kiwi pair’s further recovery, which in turn highlights the stated bullish channel’s top line near 0.6140. In a case where the NZD/USD price remains firmer past 0.6140, a downward-sloping resistance line from March 01, close to 0.6195 by the press time, lures the buyers, a break of which could quickly propel the quote towards the monthly high of 0.6277. On the flip side, a clear break of the stated bullish channel’s bottom line, around the 0.6100 round figure, could trigger a south-run targeting the 0.6000 psychological magnet. Though, the early September 2022 low near 0.5995 can act as an extra filter towards the south. Overall, NZD/USD remains on the bear’s radar despite the latest corrective bounce. NZD/USD: Hourly chart Trend: Limited recovery expected
Astonished by the week ahead? Barclays, NatWest Group and Microsoft earnings are also released shortly

Apple Reorganization From China To India, The Final Bank Of Japan Meeting With Kuroda At The Helm Ahead

Saxo Bank Saxo Bank 09.03.2023 09:13
Summary:  After Wednesday’s sentiment shock on hawkish Fed Chair Powell testimony, yesterday saw markets frozen in their tracks, awaiting key incoming data that will determine whether the Fed must continue turning the rate tightening screws, starting with the US February jobs data up tomorrow. In Asia’s Friday session tonight, we await the final Bank of Japan meeting with Kuroda at the helm before his exit next month. Will he surprise again as in December or leave the next steps in the direction of normalization for his successor? What is our trading focus? US equities (US500.I and USNAS100.I): more wait and see Following the big move in Tuesday’s session on Powell’s hawkish comments on policy rates and inflation yesterday’s session had much lower energy and ended with a small rebound in S&P 500 futures gaining 0.1%. Stronger than expected ADP job figures had a small initial negative impact as the jobs data continue to suggest a strong US labour market despite the higher interest rates underpinning the structurally higher inflation case. This morning the low energy in US equity futures continues and it feels like the equity market is back at the wait-and-see mode on inflation and the economy. As we have said before, it is the bond market that will dictate where equities go from here. If S&P 500 futures slips below Tuesday’s close, then the 3,950 level is the next level to watch and the approximate area for the 200-day moving average. Chinese equities (HK50.I and 02846:xhkg): oscillated in a lacklustre session Hang Seng Index and CSI 300 Index swung between small gains and losses. China’s CPI growth slowed to 1% Y/Y in February, much lower than the consensus estimate of 1.9%. Growth in food prices decelerated to 2.6% Y/Y from 6.2% Y/Y while growth in non-food prices halved to 0.6% Y/Y in February from 1.2% in January. PPI slide 1.4% Y/Y in February, bringing the producer prices deeper into deflation. Semiconductor Manufacturing (00981:xhkg) and Hua Hong Semiconductor (01347:xhkg) advanced, as investors expect the domestic chip making leaders to benefit from government policy initiatives and import substitution. COSCO China Shipping Energy Transportation (01138:xhkg) jumped 11.5% as investors anticipated the Chinese tanker and dry bulk shipping operator to benefit from recent rises in freight rates. FX: USD strength eases ahead of data. JPY firms. CAD weak on BoC The USD strength on the back of Fed Chair Powell testimony failed to find further momentum as the market awaits key incoming US data tomorrow (Feb. jobs report) and next Tuesday (Feb. CPI) for further conviction. With the rise in yields easing slightly, the JPY perked up after USDJPY failed to close above the 200-day moving average and as the market awaits a possible surprise from the outgoing Kuroda at tonight’s (Friday in Asia) Bank of Japan meeting (preview below). The Bank of Canada confirmed its prior guidance and did pause its rate tightening cycle at its meeting yesterday, continuing to signal a wait-and-see stance, which looks dovish in this environement. This saw CAD weak across the board yesterday, and USDCAD traded above 1.3800 at one point for the first time since November. Crude oil holds Powell-led losses, but support is not far away Crude oil futures remain stuck near a one-week low as the negative sentiment around further monetary tightening more than offset a surprise drop in US stocks, the first in ten weeks. Brent and WTI trade below their 21-day moving averages for a second day but the loss of momentum has yet to see either of them challenge trendline support, in Brent at $81.40 and WTI at $73.50. Rangebound for months and in no hurry to change that amid a balanced flow of supply and demand related news, the market is likely to pay close attention to the general level of risk appetite which is currently being dictated by the FOMC and its close attention to incoming data. With that in mind the next major market moving event is likely to be Friday’s US job report. Gold trades near key support on Powell’s higher, faster and longer threat Gold trades near support in the $1800 area as traders continue to digest Fed chair Powell’s comment on Capitol Hill that interest rates could go higher, faster and for longer. In the short-term with Powell signalling an incredible data dependency, the focus now turns to incoming US data, and ahead of Friday’s job report, another report showed US job openings drop to 10.8 million, still a number too high for the Fed. However, given the level of elevated rate hike expectation currently priced in, any weakness in incoming data may now trigger a stronger positive response than otherwise called for. Below the $1800 area the next level of interest is the 200-DMA at $1775. Yields on U.S. Treasuries moved higher on hot JOLTS job openings and a poor 10-year auction The Treasuries market did not react much to the hotter-than-expected ADP employment data and Powell’s second-day congressional testimony. Short-covering flows especially in the futures contracts drove the market higher and yields lower in the morning until selling emerged following the JOLTS job openings data which was stronger than estimates. Demand in the 10-year auction was weak as the auction stopped at nearly 3bps cheaper from the market level at the time of the auction and had a bid-to-cover ratio of 2.35, lower than 2.66 last time. The Treasury is auctioning USD 18 billions of 30-year bonds today. The 2-year yield rose 6bps to 5.07% and the 10-year yield edged up 2bps to 3.99%, inverting the curve further to -109bps. What is going on? The Netherlands proposing a chip gear export restriction to China As part of the US CHIPS Act the US pushing its trading partners to also restrict semiconductor technology to China which has hurt chipmakers including Nvidia. So far, the Dutch-based ASML, the world’s largest lithography machine makers for chip production, has said that those restrictions did not apply to them. However, non-compliance by ASML and other equipment makers would make it possible for China’s semiconductor industry to circumvent the intentions in the new US policy on semiconductors. Yesterday, the Dutch government announced that the Netherlands is proposing chip gear export restrictions to China and will include DUV (deep ultraviolet) lithography machines which are the most advanced machines for chip production. ASML says that the new export restrictions will not affect the 2023 outlook nor the long-term outlook, but the latter part might be a stretch and only time will tell. Apple to put more focus on India growth Apple is revamping its global sales unit shifting its focus to India from China with a new separate sales office and reporting line in India. This move follows the decision to increase production capacity of various Apple products to India from China underscoring the shifting geopolitical interest for the US and its corporate sector. With Apple being one of the most important companies in the US this is an important signal to other US companies about how to change global supply chains and where to get revenue exposure. WASDE adds further downside pressure on corn and wheat futures Chicago corn and not least wheat futures extended their slump on Wednesday after the USDA said domestic stockpiles rose by more than expected in response to lower exports. The agency also boosted the outlook for Ukraine corn exports while wheat, already under pressure from Russian sales and expectations the Ukraine grain corridor deal will be extended, dropped to an 18-month low after the agency raised production estimates for Kazakhstan, Australia and India. Soybeans meanwhile found support after the USDA slashed production from drought-stricken Argentina by more than expected. The world’s biggest exporter of soymeal and soyoil will harvest 33 million tons of beans this year, the smallest crop since 2011 and a 20% decline from its February estimate. More hot job data coming out of the US The ADP Employment report had a 242K increase in jobs in February, rising from 119K (revised from 106K previously reported) in January and way above the 200K consensus estimate. JOLTS Job Opening also came in stronger than expected at 10,824K (consensus estimate: 10,546K; January 11,234K). Bank of Canada confirms pause in rate tightening regime The Bank of Canada confirmed its guidance from the prior meeting and did not hike the policy rate yesterday, a particularly jarring divergence relative to the hawkishness we saw this week from Fed Chair Powell which has the market debating a re-acceleration in the pace of Fed hikes, and at a time when the ECB, for example, is priced to hike another 150 basis points or more this year. The Bank of Canada continues to expect that inflation in Canada will ease to “around 3%” by mid-year. The guidance on further in the policy statement remained unchanged: "Governing Council will continue to assess economic developments and the impact of past interest rate increases, and is prepared to increase the policy rate further if needed to return inflation to the 2% target.". One particularly complicating factor for the Canadian economy is the heavy load of private debt, much of it in mortgages, with a large minority of Canadians financing with adjustable rate mortgages and even fixed rate mortgages adjust their rate every five years, which will stress the budgets of a growing portion of Canadian households with every month that passes at the current yield levels – several multiples of where rates were for the 2020-2021 timeframe. Powell largely repeated his message on the second day of his testimony On the second day of his congressional testimony, this time to the House Financial Services Committee, Powell told lawmakers that no decision had yet been made on the size of the rate hike at the March FOMC while he reiterated that the Fed was likely to bring the policy rate higher than previously anticipated and could move at a faster pace. What are we watching next? Bank of Japan meeting tonight will be Kuroda’s last after 10 years as Governor Significant two-way volatility potential for the JPY tonight on the Bank of Japan meeting as the market well remembers the surprise decision from Governor Kuroda to expand the yield-curve-control “band” for 10-year Japanese Government bonds (really a cap in this era of higher interest rates) to +/- 0.50% from the prior 0.25%. One-week implied volatility in USDJPY options remains very elevated at almost 19% in anticipation of tonight’s decision and guidance, as the market is uncertain whether Kuroda might significantly tighten policy at his last meeting as a kind of declaration of victory on succeeding in bringing more sustained inflation to the Japanese economy, or whether he will leave the bulk of the tough process of policy normalization to his likely successor, Kazuo Ueda. USDJPY rose above its 200-day moving average this week at 137.20 and traded most of the way to 138, but has retreated this morning to well below 137.00. The market is only pricing a policy rate (the short rate) of positive 0.15% by the end of this year, versus –0.10% currently. More likely for the Bank of Japan to focus on loosening yield-curve-control for now rather than tinkering with the policy rate. Earnings to watch Today’s key earnings release to watch are CATL and JD.com which will provide fresh information from China’s corporate sector. JD.com is expected to report FY22 Q4 earnings before the US market open with analysts expecting revenue growth of 7% y/y down from 23% y/y a year ago, and EBITDA of CNY 8.06bn up from CNY 5.08bn a year ago. The outlook from JD.com matters a lot this time as it will reflect management’s confidence and expectations related to the Chinese reopening. CATL is expected to report sometime after the Chinese equity market close and is expected to report Q4 revenue growth of 87% y/y reflecting the strong demand for electric vehicles and batteries. Thursday: CATL, Deutsche Post, JD.com Friday: Daimer Truck, AIA Group, Oracle, DiDi Global Economic calendar highlights for today (times GMT) 1200 – Mexico Feb. CPI 1230 – US Feb. Challenger Job Cuts 1330 – US Weekly Initial Jobless Claims 1400 – Poland National Bank Governor Glapinski press conference 1530 – EIA's Weekly Natural Gas Storage Change 1800 – US Treasury to auction 30-year T-bonds 1845 – Canada Bank of Canada Deputy Governor Rogers to speak Asian session: Bank of Japan meeting   Source: Global Market Quick Take: Europe – March 9, 2023 | Saxo Group (home.saxo)
Saxo Bank Podcast: The Bank Of Japan Meeting And More

Saxo Bank Podcast: The Bank Of Japan Meeting And More

Saxo Bank Saxo Bank 09.03.2023 11:01
Summary:  Today we look at a market that is holding its breath in anticipation of incoming US data to refresh the probabilities that the Fed feels forced to re-accelerate the pace of rate hikes at the March 22. But as well, all traders need to consider the Bank of Japan meeting risk up overnight tonight as a surprisingly large adjustment from Kuroda could set even global bond and equity markets on edge, not just the Japanese yen. We also look at interesting stories in equities, from the latest on ASML to CATL and other companies. Today's pod features Garnry on equities, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Bank of Japan could cast a very long shadow over global markets | Saxo Group (home.saxo)
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

AUD/USD Rose Above 0.66, USD/JPY Drop Below 137.00

Kamila Szypuła Kamila Szypuła 09.03.2023 11:40
The dollar held near a three-month high on Thursday, backed by a message from Federal Reserve Chairman Jerome Powell that interest rates will need to go higher and possibly faster. On the second day of his testimony before Congress on Wednesday, Powell confirmed his message, though he made a cautious point, saying that the debate over the scale and path of future interest rate hikes is still ongoing and will depend on the data. USD/JPY The yen pair has been in a downtrend since the beginning of the day. During the day, USD/JPY dropped from 137.2360 to 136.2230. Concerns about a deeper global economic downturn continue to weigh on investor sentiment, which in turn favors a safe haven for the Japanese yen (JPY) and puts some downward pressure on the major currency. Market concerns were further fueled by the latest Chinese inflation data, which showed that domestic demand remains weak and weakened hopes for a strong recovery in the world's second largest economy. However, any significant pullback in USD/JPY still seems elusive amid expectations that the Bank of Japan (BoJ) will remain dovish to support a fragile domestic economy. In fact, the new BoJ governor, Kazuo Ueda, recently stressed the need to maintain ultra-loose policy settings and said the central bank is not aiming for a quick turnaround from a decade of massive easing. Bets were further raised after the release of the final GDP print, which showed Japan's economy narrowly avoided a technical recession in the final months of 2022. EUR/USD The euro pair started the day with a drop from 1.0556 to 1.0542. After this decline, the EUR/USD pair started an upward move towards 1.0570. After this move, the EUR/USD pair fell to the level of 1.0562. EUR/USD remains close to monthly lows after the recovery faded near 1.0570 during the US session. The US dollar failed to pick up a new leg, but maintained its recent gains. The dollar looks solid as markets are priced at "higher for longer" US interest rates. Data released on Wednesday helped consolidate expectations. Market participants also see a more hawkish European Central Bank (ECB) as recent research points to a higher final rate. Thursday's economic report does not include first-tier reports for the eurozone and preliminary claims for US unemployment benefits. Markets will continue to weigh Powell's message as they prepare for non-farm payrolls. GBP/USD The beginning of trading in the GBP/USD pair started trading with the application to the euro. Then, still in the Asian session, it rose slightly. The cable pair recorded a significant increase at the beginning of the European session and exceeded 1.1880. Currently, the level of the GBP/USD pair is above 1.1870. A permanent rebound seems unlikely as buyers refrain from betting on sterling further strengthening due to policy divergence between the US Federal Reserve and the Bank of England, although BoE expectations are hawkish. AUD/USD The Australian pair traded in the 0.6580-0.6595 range at the beginning of the Asian session. Still in the Asian session there was a significant increase above 0.6610. After this surge, AUD/USD traded in the 0.6610-0.6615 range. At the time of writing, the Aussie pair is trading at 0.6612. The Australian dollar is trying to bounce back this Thursday after Tuesday's decline. The morning started with weak economic data from Australia in the form of building permits and private home permits for January. Both sets of data printed in line with estimates but reached levels last seen in January 2022. This deterioration in the housing and construction sectors is a reflection of the high interest rate environment created by the Reserve Bank of Australia (RBA). Source: investing.com, finance.yahoo.com
InstaForex's Ralph Shedler talks Euro against Japanese yen

The Governors Of The Bank Of Japan Are Unlikely To Make Policy Changes

Kenny Fisher Kenny Fisher 09.03.2023 12:32
The Japanese yen is showing strength on Thursday. In the European session, USD/JPY is trading at 136.27, down 0.79%. Kuroda’s last hurrah After 10 years at the helm of the Bank of Japan, Governor Kuroda chairs his final policy meeting on Friday. Traditionally, BoJ governors have not made policy changes at their last meeting, and in all likelihood, Kuroda will not go out into the night with guns blazing. Still, Kuroda likes to keep the markets guessing and his tweak of the 10-year yield target range in December completely blindsided traders and jolted the financial markets. This has kept the markets on alert for Kuroda tweaking or even abandoning the BoJ’s yield curve control (YCC) policy. The bond market remains dysfunctional due to the YCC, even with the band widening in December. Governor-elect Ueda has stated that the current policy is appropriate, but this is to be expected at this sensitive time of changing the guard at the BoJ. Ueda will be under pressure right away to make changes to the YCC, and that could occur as soon as he takes over in April. Fed Chair Powell didn’t add anything new at a second day of testimony on Capitol Hill, but the markets have been scrambling since his hawkish comments to lawmakers a day earlier. Powell’s said that the Fed would accelerate the pace of interest rate increases if that was what the data dictated. The markets have fallen in line and have priced a 50-basis point hike at the March 22 meeting at 77% according to the CME Group, compared to 25% before Powell’s testimony on Tuesday. Powell’s hawkish stance has also fuelled expectations that the peak rate will be higher than expected. In December, the Fed projected a rate of 5.1%, but that is clearly out of date. The markets have priced in a peak rate of around 5.5% and Blackrock, the world’s largest asset manager sees rates peaking at 6%. Currently, the benchmark rate stands at 4.75%.   USD/JPY Technical 136.06 is under pressure in support. 13502 is next 136.86 and 1.37.90 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
US core inflation hits 5.5% and it's the second lowest reading since November 2021

Nonfarm Data Can Strengthen The U.S. Currency, Provoking Another Dollar Rally

InstaForex Analysis InstaForex Analysis 09.03.2023 12:49
The EUR/USD pair consolidated within the fifth figure, thanks to Jerome Powell, who voiced hawkish rhetoric in the walls of the U.S. Congress. But despite the strengthening bearish moods in the pair, the sellers could not overcome the 1.0520 support level, corresponding to the lower line of the Bollinger Bands indicator on the D1 timeframe. It is an important price barrier, overcoming which will open the way to the area of the 4th figure. Obviously, traders need additional information impulse for the next downward spurt. The February Nonfarm Payrolls report, which will be released tomorrow, March 10, could be such momentum. Powell and Nonfarm The U.S. Nonfarm Payrolls is important in its own right, but in light of recent events, the significance of this release has increased in many ways. Speaking to Congress, Fed Chairman Powell said that the labor market is "extremely tight" and contributes to inflation. By and large, Fed officials have been saying the same thing for weeks, ever since the January Nonfarm Payrolls (which showed a half-million gain in employment) were released. The market, in particular, has started to talk about a possible "second order effect," whereby rising wages further unwinds inflation in a wage-price spiral. Responding to questions from congressmen, Powell suggested that some easing in the labor market is needed to bring inflation under control. He said this is necessary so that "inflation will come down in the broad service sector, a labor-intensive part of the economy where prices continue to rise." What the ADP report said Yesterday, the U.S. ADP employment report was released, which can be considered as a "preview" of Friday's nonfarm report. The ADP report came out in the "green zone," stating the creation of 242,000 jobs in the private sector. This result was somewhat surprising, since most experts predicted a more modest increase of 180,000. But the actual result exceeded the analysts' forecast. It is worth noting that recently the report has shown a fairly high correlation with the official release, so the good February figures from ADP suggest that the main components of the release tomorrow will please dollar bulls with a "green color." Preliminary forecasts for February Nonfarm Payrolls also suggest that the U.S. labor market will not disappoint, at the very least. Unites States unemployment should remain at January levels, i.e., at 3.4%. The nonfarm payrolls growth figure should show a more modest result than the previous month, but we should not forget that there was a half-million gain in January. February is expected to see an increase of 205,000. The private sector of the economy is projected to grow by 210,000. In light of Powell's recent statements, the wage component of the release is especially important. According to forecasts, the salary index should resume growth, rising to 4.7%, after the January decline to 4.4%. The trend itself will be important here, as with the major inflation indicators (CPI, core PCE index). Conclusions If nonfarm data comes out in the green zone on Friday, the dollar will again strengthen its position throughout the market. A strong report would suggest that the Fed will accelerate the pace of rate hikes at its March meeting and announce a hawkish stance on the prospects of monetary tightening. We are talking about an almost guaranteed 50-point interest rate hike in March. The regulator may also revise the level of the final rate—tentatively to 5.5% (possibly up to 5.75%). And while much will depend on the dynamics of the February and March inflation indicators, this scenario looks the most realistic. According to the CME FedWatch Tool, the likelihood of the 50-point scenario materializing in March is now nearly 75%. As to further prospects, the market is still fluctuating. As of today, the probability of a 25-point rate hike in May is 59%, while the 50-point increase is 25%. In anticipation of such a significant release, it is advisable for traders of the EUR/USD pair to maintain a wait-and-see attitude. Nonfarm data can strengthen the U.S. currency, provoking another dollar rally. But they can also put pressure on the greenback. From the technical point of view, the pair on the daily chart is between the middle and lower lines of the Bollinger Bands indicator, as well as below all the lines of the Ichimoku indicator. It is important for the EUR/USD bears to consolidate below the lower line of the Bollinger Bands (i.e., below 1.0520) – in this case, they will be able to test the area of the 4th figure, and in the future – the 1.0450 support level (Kijun-sen line on the same timeframe).   Relevance up to 11:00 2023-03-10 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337134
The USD/JPY Price Reversed From The Lower Limit

The USD/JPY Price Reversed From The Lower Limit

InstaForex Analysis InstaForex Analysis 10.03.2023 07:42
After reaching the target level on the hyperchannel line on Wednesday, the price retreated by about 175 pips. The signal line of the Marlin oscillator approached the zero neutral line, now it shows the intention to reverse from it to the upside. If this happens, the price can overcome the resistance around 137.80 and it will climb higher to reach the 138.90 and 140.90 targets. On the four-hour chart, the price reversed from the lower limit of the hypothetical upward local price channel. The Marlin oscillator turned sharply upwards and forcefully entered the area of the uptrend. The price is already returning above the MACD indicator line (136.82). Retreating below the signal level of 135.38 would make it possible to develop an alternative scenario with the 134.05 target - support of the embedded line of the price hyperchannel and the low of February 24. But this option is already unlikely.   Relevance up to 03:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337207
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

The GBP/USD Price Formally Settled Above 1.1914

InstaForex Analysis InstaForex Analysis 10.03.2023 08:01
Yesterday, the British pound found the strength for a deep correction worth 80 points. It reached the target level of 1.1914. This level is supported by the wide consolidation range of the second half of February, so the correction has likely ended. Now we wait for the release of the U.S. labor data in the evening, and expect the British currency to weaken further, as Nonfarm Payrolls are expected to be moderately strong. The short-term target is 1.1737, which is the high on September 13, 2022. On the four-hour chart, the price formally settled above 1.1914, but the consolidation was performed by the candlestick with very small bodies, so it is weak. The Marlin oscillator is in the green and it gives the price optimism. But it can also quickly return to negative territory. Consolidating above the MACD line (1.1985) can reveal an alternative scenario and send the price higher to 1.2060   Relevance up to 03:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337209
The EUR/USD Price May Fall Under 1.0660

There Is A High Probability That The EUR/USD Price Will Reverse To The Downside

InstaForex Analysis InstaForex Analysis 10.03.2023 08:03
Yesterday, the euro managed to develop a correction so that it can reach the target level of 1.0595 this morning. The price returned to the consolidation range of the second half of December 2022, and can stay there until the release of the US employment data. Also, the price may settle below 1.0595, as the trading volumes have noticeably decreased in recent days. We expect today's Nonfarm Payrolls to be good as weekly jobless claims are coming in at a consistently low 196,000 on average over the past month. A month earlier, the average was 189,000 and then, in January, Nonfarm Payrolls showed an increase of 517,000 new jobs. Forecast for February is 205,000, the data is likely to be better than forecast. I expect the euro to fall to the target range of 1.0443/70. On the four-hour chart, the price has stopped rising in the area where the MACD indicator line coincides with the target resistance of 1.0595. The signal line of the Marlin oscillator closely approached the zero neutral line.There is a high probability that the price will reverse to the downside. In the main bearish scenario, the price can also climb above the resistance, but this will be a false breakout.   Relevance up to 03:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337211
The Pound Is Now Openly Enjoying A Favorable Moment

The GBP/USD Pair Extended The Technical Bounce

InstaForex Analysis InstaForex Analysis 10.03.2023 08:04
Early in the European session, the British pound is trading around 1.1910 above the 21 SMA and within the downtrend channel formed since February 13. We can see a recovery of the pair that could continue in the next few hours. The GBP/USD pair extended the technical bounce from 1.1801 recorded on March 8. This was its lowest level since November 2023. The 1/8 Murray line (1.1840) has become strong support for the British pound. This level gave strong bullish momentum and the instrument reached 1.1937. This was a strong support area last month, which gave GBP/USD a triple bottom and has now become strong resistance. In case the British pound trades above 1.1899 in the next few hours, it is expected to resume its bullish cycle and the price could reach 2/8 Murray located at 1.1962 (2/8 Murray). If the bullish force prevails, GBP/USD could reach the top of the downtrend channel around 1.2017 and finally, it could reach the 200 EMA located at 1.2052. The US employment report will be published in the American session. It could trigger a strong volatile movement in the GBP/USD pair. Hence, we could expect it to fall to the support level of 1.1840 if the nonfarm payrolls are upbeat. On the contrary, the price could climb to the resistance zone of 1.2017. In the next few hours, we could expect the British pound to continue to bounce. For this, we should watch the key point of 1.1840 and any technical correction above this zone could be seen as an opportunity to buy with targets at 1.2052.   Relevance up to 04:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315600
The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

The EUR/JPY Pair Is Expected To Start A New Zig-Zag Correction

Torben Melsted Torben Melsted 10.03.2023 08:06
EUR/JPY is correcting the rally from 114.42 to 148.40 and has likely just completed an X-Wave. The instrument is expected to start a new zig-zag correction towards 134.00 anytime now. Short-term we would like to see a break below minor support at 143.60 to confirm that wave X has completed at 145.32 and the expected zig-zag towards 134.00 is unfolding. Only a break above resistance at 145.32 will keep the X-wave alive.   Relevance up to 06:00 2023-03-13 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315602
Technical look: Euro against US dollar - what can we expect from the pair?

The Euro's Technical Picture Looks More Like A Swing Than A Trend

Paolo Greco Paolo Greco 10.03.2023 08:13
5M chart of EUR/USD EUR/USD continued a very weak, upward, corrective movement on Thursday. Volatility was very low again, but there was a very concrete explanation in the form of a complete absence of fundamental and macroeconomic events. The pair could not crawl even to the nearest Ichimoku indicator line, although it has been correcting for two days. Therefore, there is no new conclusion regarding the pair's movement and outlook over the past two trading days. We have to wait for the reports, which may determine the dollar's future, until the next FOMC meeting, which will be held on March 21-22. I still expect the pair to fall, i.e. the rise of the USD. However, today it might take a different scenario, as there is no guarantee that the Nonfarm Payrolls report will be much higher than the forecasted value again. Speaking of trading signals, the situation wasn't good on Thursday, but why is it so surprising if the pair managed to go "even" 50 pips in a day? Of course, you should not expect that the pair would provide a lot of strong and profitable signals. At first the pair rebounded from 1.0581, and then was down 15 points, which at least let you place the Stop Loss to Breakeven. Further, the pair traded along 1.0581, but by that time it was clear that trading was not active on Thursday. Therefore, traders could quietly close the terminal and leave the market, waiting for a more interesting Friday. COT report: On Friday, traders had to learn once again the COT report from February 7. This report was published a month ago. It seems that the Commodity Futures Trading Commission will now publish reports with a month's delay instead of a three-day delay as it was before. In the event of this, the reports will hardly be of great importance. However, we will continue to analyze them. Maybe in the future, the situation will change for the better. So far, we can say that in the last few months, the overall picture has been corresponding to the market situation. On the chart above, we see that the net non-commercial position of large traders (second indicator) has risen since September 2022. The net non-commercial position is bullish and continues to increase with each new week, allowing us to expect the uptrend to stop shortly. Such a signal comes from the first indicator, with the green line and the red line being far apart, which is usually a sign of the end of a trend. The euro has already begun its bearish move against the greenback. So far, it remains unclear whether it is just a downward correction or a new downward trend. According to the latest report, non-commercial traders closed 8,400 long positions and 22,900 short ones. Consequently, the net position rose by 14,500. The number of long positions exceeds that of short ones by 165,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue. 1H chart of EUR/USD On the one-hour chart, the pair sharply fell, but after that ended it started a correction for two days. Unfortunately, the chart shows that the downtrend can't be considered as completely revived yet. Now the euro's technical picture looks more like a "swing" than a trend. If the data turns out to be disappointing today, the pair might go back to 1.0692, which will make us believe in the "swing". On Friday, important levels are seen at 1.0340-1.0366, 1.0485, 1.0537, 1.0581, 1.0658, 1.0692, 1.0762, 1.0806, 1.0868, and also Senkou Span B (1.0615) and Kijun Sen (1.0610). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On March 10, the market will pay attention to the U.S. NonFarm Payrolls and the Unemployment report. However, European Central Bank President Christine Lagarde is also going to give a speech in the EU. All in all, it will be a rather volatile and active day. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.   Relevance up to 01:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337199
The British Pound Continues To Trade In A Swinging Mode

The British Pound Continues To Trade In A Swinging Mode

Paolo Greco Paolo Greco 10.03.2023 08:15
5M chart of GBP/USD GBP/USD continued its bullish correction on Thursday, and by the end of the day, it had worked off the critical line. It did not manage to overcome this line, which gives hope for restoring the fall on Friday. However, keep in mind that today almost everything will depend on the U.S. macro data. As a whole, the British pound continues to trade in a "swinging" mode. While earlier it was a swing in the horizontal channel, now it is a swing with a downward bias. If the U.S. data turns out to be weak today, the pair might go up, which will lead us to a "swing". Reminder: the pair managed to get out of the horizontal channel (on the 4H-chart, not on the 24H-chart), because of Federal Reserve Chairman Jerome Powell's speech on Tuesday. Apart from that, there was nothing to support the dollar this week. That said, in my opinion, the dollar should continue to rise, as most of the fundamentals are working in its favor. Speaking of trading signals, they weren't great at all. Two buy signals were formed near 1.1874, and traders could open a position on them. After that, the price reached the next target, the critical line and 1.1927, where it could make a profit. However, the target was very close, so it was not possible to make much profit. However, for a completely empty day in terms of macroeconomics and fundamentals, this result was quite good. COT report: The latest COT report on GBP/USD dates back to February 7. Due to a technical glitch, there have been no fresh reports for about a month. Naturally, analyzing outdated reports is of no use. Anyway, that is better than nothing at all. According to the latest data, non-commercial traders opened 10,900 long positions and 6,700 short ones. The net position grew by 4,200. The net non-commercial position has been bullish in recent months although sentiment remains bearish. The pound has been on the rise against the greenback for some unknown reason. We should not rule out the possibility of a strong decline in price in the near term. Technically, it has already started to decline although it seems to be a flat trend. In fact, the movement of GBP/USD is now akin to that of EUR/USD. At the same time, the net position on EUR/USD is positive, signaling the upcoming end of the bullish impulse. Meanwhile, the net position on GBP/USD is negative. Non-commercial traders now hold 61,000 sell positions and 47,000 long positions. There is still a gap. We are still skeptical that the pair will be bullish in the long term and expect a steep drop. 1H chart of GBP/USD On the one-hour chart, GBP/USD collapsed on Tuesday, but it is already recovering. A new downtrend line has been formed and the price is located below the Ichimoku indicator lines. That's why so far everything says that the downward movement will continue. However, today's macroeconomic background might have a strong influence on the market mood, so by the end of the day the pair might be anywhere. On March 10, it is recommended to trade at the key level of 1.1486, 1.1645, 1.1760, 1.1874, 1.1927, 1.1965, 1.2143, 1.2185, 1.2269. The Senkou Spahn B (1.2030) and Kijun Sen (1.1930) lines can also generate signals. Rebounds and breakouts from these lines can also serve as trading signals. It is better to set the Stop Loss at breakeven as soon as the price moves by 20 pips in the right direction. The lines of the Ichimoku indicator can change their position throughout the day which is worth keeping in mind when looking for trading signals. On the chart, you can also see support and resistance levels where you can take profit. On Friday, the UK will publish not the most important Industrial Production and GDP reports for January. In America, we have the important NonFarm Payrolls and unemployment data. The market might show a significant reaction to the data, but there could be some movement in the morning as well. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.   Relevance up to 01:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337201
Rates Spark: Nothing new on the dovish front

The EUR/USD Pair Has Formed A Consolidation Below The Moving Average Line

Paolo Greco Paolo Greco 10.03.2023 08:18
On Wednesday and Thursday, the EUR/USD currency pair was trading much more calmly. The initial impact of Powell's speech quickly subsided, and it is now uncertain what will happen next. On the one hand, the pair has formed a consolidation below the moving average line, which offers great prospects for further decline. Yet, the pair has only surpassed the moving average five times in the past week, so further consolidation below the moving average line is meaningless. Hence, all we can say at this point is that the market may go downward, but in reality, a lot depends on the American statistics that will be announced today. More on it is covered below. Powell's second address to the US Congress contained no new information, as was to be expected. We are taken aback by how the market reacted to the Fed chairman's statement on Tuesday because every argument made was foreseeable. We've stated time and time again that the Fed rate needs to be increased to at least 6% and that any discussion of "the regulator's reaction to reports" or anything similar is nothing more than "a good mine with a poor game." Hence, we were not surprised by Powell's statement regarding the need to speed up the pace of monetary policy tightening once more. The Fed made it clear from the start that it wanted to raise the rate to 2%. And not in the next 5–10 years, but as soon as possible. The topic would be very different if the American economy was on the verge of recession. Nevertheless, very reliable macroeconomic data are being released every month, giving the Federal Reserve every opportunity to tighten monetary policy as required. Following Powell's remarks, the dollar increased as expected, and we think that it will do so going forward. On the 24-hour TF, the pair continued to gain ground beneath both the Ichimoku cloud and the 38.2% Fibonacci line. As a result, the likelihood of a future decline in the quotes has grown, and we have another sell signal. If today's US reports are successful, the pair might decline another 100 points. Non-farm and unemployment in the US won't change market sentiment. We think the debate over raising the rate by 0.5% in March is nearly settled. Jerome Powell rarely makes unsupported claims or assertions that lack substance. If he indicated that there is a chance that the rate of growth will accelerate, the regulator would be preparing for this. Powell's attempt to "step back" in his address on Wednesday was futile, and nobody believed him. The likelihood of a 0.5% rate increase at this point is already more than 50%. Furthermore, this market belief won't be altered by today's reports (in our opinion). Let's analyze it. Will the Fed still go forward with its intentions to raise the rate by 0.5% even if today's non-farm data is weak and unemployment increases? No, we believe. Thus, it's important to consider the entire dynamics and trend rather than just one particular report. Nonfarms consistently perform at a high level. Unlike other experts, we have consistently asserted that adding 200–300 new jobs each month represents an excellent value. Hence, even if there are 150,000 non-farms today, for example, the overall situation will not change. It's the same with unemployment. It is already down 3.4% and is still going down. It is now even preferable for the Federal Reserve to somewhat cool the economy so that inflation does not re-accelerate. The question already exists: should rates be raised to slow the economy and boost unemployment rather than to cut inflation? When there is a labor shortage, salaries start to rise, which in turn causes inflation to accelerate. Meanwhile, the UK is reporting a similar issue. We, therefore, think that the rate will rise by 0.5% with any nonfarm and unemployment. This aspect can significantly assist the dollar over the coming few months in the conflict between the euro and the dollar. The ECB will likewise increase the rate, but it won't be until much later than the Fed rate, and it's unlikely that it will increase to 6% as it did in the US. As a result, the pair has adjusted by 50% from the previous decline, but it simply lacks new growth factors. As of March 10, the euro/dollar currency pair has experienced 75 points of "average" volatility over the previous five trading days. As a result, we anticipate that the pair will move on Friday between 1.0505 and 1.0655. The Heiken Ashi indicator's downward turn will signal a potential continuation of the downward movement. Nearest levels of support S1 – 1.0498 S2 – 1.0376 S3 – 1.0254 Nearest levels of resistance R1 – 1.0620 R2 – 1.0742 R3 – 1.0964 Trade Suggestions: The EUR/USD pair has consolidated below the moving average line once more. Currently, short positions with targets of 1.0505 and 1.0498 can be taken into account if the Heiken Ashi indicator reverses direction upward. After the price is established above the moving average line, long positions can be initiated with targets of 1.0655 and 1.0742. Explanations for the illustrations: Channels for linear regression - allow us to identify the present trend. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.     Relevance up to 01:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337203
InstaForex's Irina Manzenko talks British pound amid latest events

The GBP/USD Pair Continues To Be In A Side Channel

Paolo Greco Paolo Greco 10.03.2023 08:21
The GBP/USD currency pair returned to the moving average line on Wednesday and Thursday, as expected after a sharp drop on Tuesday. The most important thing is to avoid continuing the "swing" that we have seen in recent weeks. To accomplish this, the price must be below the moving average at the end of today; otherwise, the process will restart. And for this to happen, the dollar must receive local support from today's solid American statistics. But, the pair might theoretically resume falling even without the support of the macroeconomic backdrop. How many times has it happened that strong data or the foundation triggered movement in both directions in a short period, only for the market to settle down and return to its previous positions? We anticipate a decline for both the pound and the euro over the next few months. After increasing by more than 2,100 points in a short period, we continue to think that the pound sterling has not adjusted sufficiently. The best view of this is on the 24-hour TF. Sadly, it is also plainly obvious on the same 24-hour TF that the pair continues to be in a side channel with a width of 600 points. It has been inside of it for a while. Consequently, it is quite challenging to predict that the downward trend will continue until the 1.1841 level is crossed. But, there are still no particular causes for the pound to increase. Thus, it is extremely harder to plan for long-term growth. Much, as before, is now dependent on the monetary policies of the Bank of England and the Fed, and things are not looking good for the pound. We have often stated that we have serious doubts about the ECB and BA's capacity to stay up with the Fed on the issue of rates. As of now, our expectations are perfectly warranted because the UK consistently sends out indications that the rate of tightening monetary policy will slow down once again and that the cycle of rate hikes is quickly coming to an end. The Fed, however, is simultaneously raising the rate and will do so for as long as necessary. Given this fundamental background, the dollar may increase by another 500–600 points. American statistics are both significant and empty. Today in the UK, completely worthless data on the GDP and industrial production will be made public. They might be followed by a minor market reaction, but even that won't mean much. Merely because monthly GDP data has never been essential for the market, and industrial production is no longer that important. Regrettably, only the Bank of England can prevent the pound from falling further. Yet, given that the rate has already been raised 10 times and inflation is still at 10%, what can we expect from the Bank of England at this point? There will undoubtedly be a recession in the UK economy, and the higher the interest rate, the more likely it is that this recession will be protracted and severe. Like the Fed, the British regulator simply does not possess the justifications for an endless rate hike. Hence, even if the rate in Britain goes to 5%, it will not fundamentally change anything. The Fed's rate will remain higher, and a drop in inflation to 2% will not be possible with just 5%. As a result, we think that the pound will eventually collapse. The pound is currently holding on with all of its remaining strength, but this will not continue forever. In his last speech, Andrew Bailey did not endorse the pound; rather, his rhetoric was rather inconsistent. It is not expected by the market for BA to act aggressively again, making it very difficult to think that rates will continue to rise. What else, in theory, could now sustain the pound? A falling economy - no, high inflation with a weak BA ability to maintain tightening - no, strong GDP and business activity - no. So, we think that the market will gradually push the pound down. Because the ECB rate is currently even lower than the BA rate, the British pound is currently holding slightly better than the euro. Nevertheless, we are now comparing the pound to the dollar rather than the pound to the euro. The pound's stronger resistance to the US dollar does not guarantee that it will not decrease in the future. Over the previous five trading days, the GBP/USD pair has averaged 114 points of volatility. This value is "high" for the dollar/pound exchange rate. As a result, on Friday, March 10, we anticipate movement that is limited by the levels of 1.1803 and 1.2031. The Heiken Ashi indicator's downward turn will indicate that movement towards the south has resumed. Nearest levels of support S1 – 1.1902 S2 – 1.1871 S3 – 1.1841 Nearest levels of resistance R1 – 1.1932 R2 – 1.1963 R3 – 1.1993 Trade Suggestions: On a 4-hour timeframe, the GBP/USD pair is still trading below the moving average. In the case of a downward reversal of the Heiken Ashi signal or a price recovery from the moving average, it is currently viable to take into account new short positions with targets of 1.1841 and 1.1810. If the price is fixed above the moving average, long positions with targets of 1.1993 and 1.2024 may be taken into account. Explanations for the illustrations: Channels for linear regression - allow us to identify the present trend. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.     Relevance up to 01:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337205
Central Banks and Inflation: Lessons from History and Current Realities

Analysis Of Price Movements Of The GBP/JPY Pair

Torben Melsted Torben Melsted 10.03.2023 08:23
A break below minor support at 161.19 will confirm that wave iv has been completed and wave v lower to 145.76 is in motion. The decline to our ideal target at 145.76 will complete the entire correction from April 2022 and should set the stage for the next major rally higher to 203.00. However, for now, our focus should be on a break below minor support at 161.19 which should cause a decline to the 145.76 target.   Relevance up to 07:00 2023-03-13 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315614
Astonished by the week ahead? Barclays, NatWest Group and Microsoft earnings are also released shortly

The US And India Are Looking To Sign Semiconductors Agreement

Saxo Bank Saxo Bank 10.03.2023 08:37
Summary:  U.S. banking stocks tumbled on Silicon Valley Bank’s liquidity crisis and bond portfolio losses as well as the winding-down of Silvergate Capital, a crypto-focused bank. The KWB Bank index tumbled 7.7%. Yields on the 10-year Treasuries dropped to 3.90%. All eyes today are on the Bank of Japan meeting and the U.S. employment report.   What’s happening in markets? US equities slide with banking stocks being heavily pressured Banks were front and center in yesterday’s sell-off in U.S. equities. Financials plunged 4.1% and were the biggest loser among the 11 S&P 500 sectors. The KWB Bank Index tumbled 7.7%, its biggest drop since June 2022. The S&P 500 broke below its 200-day moving average, a key support level, and ended 1.9% lower, while the Nasdaq 100 shed 1.8%. SVB Financial (SIVB:xnas), parent of Silicon Valley Bank, suffered a record 60% crash in share prices after the bank said it suffered from a liquidity crisis and sold off a swad of securities in a portfolio that’s been hit by significant losses. Silvergate Capital (SI:xnys) plunged 41.8% following the crypto-focused bank said that it was winding down and returning deposits to customers. Bank of America (BAC:xnys) plunged 6.2%; JP Morgan Chase (JPM:xnys) shed 5.4%. Oracle (ORCL:xnys) dropped 4.1% in extended-hour trading following reporting inline revenue and earnings beat but a miss in cloud license and on-premise license. Yields on U.S. Treasuries dropped on a spike in jobless claims and bank stocks woes A bounce in initial jobless claims to 211K (consensus 195K) from 190K triggered the short-covering in the front end ahead of the employment report which is scheduled to release on Friday. The buying intensified as banking stocks tumbled on woes on Silvergate Capital and SVB Financial. Large block buying emerged in the June 2023 SOFR contracts. Yields on the 2-year plunged 20bps to settle at 4.87%. The 10-year yield dropped 9bps to 3.90%. The 2-10-year yield curve steepened to -97bps, Hang Seng Index and China’s CSI 300 retreated as the Sino-American tech friction escalated Hang Seng Index dropped 0.6% and CSI 300 Index slid 0.4%. China’s CPI softened to 1% Y/Y and PPI declined 1.4% Y/Y in February did not excite investors with monetary stimulus expectations but added to the worries about the strength of the economic recovery in China. China consumer names were under selling pressure. Restaurant chains Xiabuxiabu (00520:xhkg) and Haidilao (06862:xhkg) plunged 7%  and 4.5% respectively. China Resources Mixc Lifestyle Services, a leading property management name, dropped 4.7% and was the biggest loser within the Hang Seng Index on Thursday. The latest announcement from the Netherlands to impose additional restrictions on exports of advanced microchip equipment to China and the U.S. moving close to banning TikTok caused concerns of escalation of the technology friction and geopolitical tension between China and the U.S. The Dutch company ASML is the world’s largest and most dominant supplier of advanced chip-making equipment including the immersion DUV lithography machines in the latest export ban. State-owned telcos continued to rise, with China Telecom (00728:xhkg) surging 4% and China Mobile (00941:xhkg) climbing 3.1%. COSCO China Shipping Energy Transportation (01138:xhkg) jumped 12.5% as investors anticipated the Chinese tanker and dry bulk shipping operator to benefit from increases in freight rates. In A-shares, consumer stocks were among the biggest losers with Chinese white liquor, retailer, catering, and tourism stocks leading the charge lower. Semiconductor names gained on anticipation of import substitution. Australian equities (ASXSP200.I) slide 1.6% on Friday, but are almost steady over the week Despite the S&P500 sliding 3% Monday to Thursday, the ASX200 is managing to hold almost steady, and is down 0.2% Monday to Friday (at the time of writing). Today most sectors are under water today, bar the defensive, Utility sector, while Financials down the most following alarm bells being rung in the banking sector on Wall Street. Pressure is also being felt in lithium stocks after CATL’s results beat expectations. Meanwhile BHP is trading 2% lower, despite the iron ore (SCOA) price moving up 1% to $129.10. FX: USD modestly weaker ahead of BOJ and NFP The rise in jobless claims on Thursday saw yields dipping lower, taking the dollar off the recent highs as well. The Japanese yen saw a recovery with lower yields, and focus now shifts to Bank of Japan meeting which can cause significant volatility. USDJPY finding support at 136 for now after reaching 3-month highs earlier this week on Powell’s hawkish testimony. GBPUSD rose back above 1.19 ahead of UK data dump today likely to show that a recession has been delayed, but focus will shift to NFP later as the key USD driver. CAD remained the underperformer, with USDCAD rising to 1.3830, as Fed-BOC divergence widened and oil prices remained weak. The choppiness in crude oil prices continued WTI prices ended the day below $76/barrel after touching highs of $78 earlier, while Brent dipped below $82 from $84 earlier. Even as the jobless claims data cooled, markets were in a flight to safety mode ahead of NFP as jitters on a tighter monetary policy remained. Demand concerns remained despite crude inventory recording its first weekly fall after several weeks of gains. EIA inventory report showed crude stocks down 1.7mn barrels last week vs. expectations of +1.6mn. Signs of a pickup in Chinese demand also remain mixed. The highs earlier in crude oil prices were reached on the back of supply concerns arising out of French refineries because of the nationwide strikes in France. Gold reverses back higher from support Gold caught a bid in the run upto the jobless claims release last night, reversing higher from near its support levels at $1800 to reach $1835. Focus turns to NFP today after Fed Chair Powell in his testimony this week opened the door to a 50bps rate hike in March. Now, data will need to confirm the need for that, else expectations may be quick to reverse. Support at 100DMA at $1806 remains key to hold.   What to consider? Jobless claims cool, focus now on NFP data today Initial claims rose 211k in the week of 4th March, above the 190k prior and the 195k expected. It was the first time that the jobless claims came above the 200k mark since January, and it was the highest claim YTD. The continued claims also rose to 1.718 mn from 1.649 mn, coming in above estimates as well. While this may have raised some concerns that the US labor market is softening, the print is still strong and eyes now turn to the February payrolls data out today in the US. Our full preview is here, which says that Overall message, despite a potentially softer headline print, is likely to be that US labor market is still tight and there are millions of open positions even as layoffs continue to ramp up in some of the sectors. Headline jobs are expected to come in again at 200k+, but risk of disappointment remains given the scope of correction from +517k in January. A strong print could further cement the case for a 50bps rate hike this month. SVB’s nosedive of 60% highlights the venture capital and tech bubble is spilling to banks- Is this just the beginning? Investors were spooked by Silicon Valley Bank announcing its  taking emergency steps to shore up capital after suffering a $1.8 billion after-tax loss in the first quarter. SVB sold about $21 billion of securities from its portfolio and plans to raise $2.25 billion. SVB’s shares tumbled 60% on the announcement, taking its shares to its lowest level since September 2016, while erasing $9.6 billion in market value. This reflects the pain of higher interest rates and tighter liquidity on the venture capital start-up bubble and how that’s heavily flown right to banks - who are also now suffering a liquidity crisis. It seem a vicious cycle. While, at the same time, people’s trust in the financial system is weakening, which is why we saw the banking sector heavily sold off on Thursday, with the KWB Bank Index tumbling 7.7%, its biggest drop since June 2022. Not only have we seen floundering prominent startups go bust – such as FTX, but banks have been making exuberant investment in such firms for years. This is all despite banks slowing their pace of investing and offering stingier terms. This not only reflects the hot air been blown into starts up - yet banks have become heavily reliant on such risky and volatile businesses.Also on Thursday, another California lender, Silvergate Capital Corp, which is targeting cryptocurrency firms, such as FTX, announced its winding down operations, following the meltdown of its financial strength, after digital assets plunged, seeing Silvergate lose billions in deposits. After announcing plans to liquidate, it says it will repay all deposits in full. Silvergate was previously scrutinised by regulators for its dealings with fallen crypto giants FTX and Alameda Research. Silvergate shares sank 40%. Bank of Japan is the biggest event risk While data and commentary from officials has been less supportive of the case for further tweaks in Bank of Japan policy, outgoing governor Kuroda is known for his surprises. At his last meeting on Friday, he may want to part with some sparks resulting in a numb yen in the run upto the meeting. We discussed all this and more in our central banks note this week, and significant scope of two-way volatility in the yen is seen. China’s CPI softened sharply to +1% Y/Y, PPI deep into deflation at -1.4%Y/Y China’s CPI growth slowed to 1% Y/Y in February, much lower than the consensus estimate of 1.9%. Growth in food prices decelerated to 2.6% Y/Y from 6.2% Y/Y while growth in non-food prices halved to 0.6% Y/Y in February from 1.2% in January. PPI slide 1.4% Y/Y in February, bringing the producer prices deeper into deflation. US-India ties expand into semiconductors The US and India are looking to sign an agreement to boost coordination of their chip industry to focus further on information sharing and policy dialogue, as India forges ahead to boost its presence in the global technology supply chain amid China’s crackdowns on the private sector and growing geopolitical issues. CATL delivers stronger than expected results underscoring surging EV demand China’s Contemporary Amperex Technologies Limited (CATL), the world's biggest battery maker and Tesla’s battery supplier, delivered results eclipsing estimates, amid stronger EV demand, while its results also cement CATL as the industry leader. Net income surged 93% y/y, to 30.72-billion-yuan, vs 28.8 billion yuan expected – with both its power battery and energy storage division’s revenue growing far more than expected amid clean energy demand. Power battery revenue rose to 236.59 billion yuan, up from the 91.49-billion-yuan same time last year - while exceeding the 228.46-billion-yuan consensus expected. That said, its power battery gross margin came in at 17.2%, on par with estimates – as EV sales growth in China slowed in Q4 as the economy was hit by a wave of COVID-19 infections with Tesla cutting output in Shanghai, with CATL suffering rising inventory. That said, CATL’s outlook seems bright and it’s continuing its global expansion, planning to set up 13 production bases, including in Germany and Hungary, with five R&D centres. It recently licensed its LFP battery technology for Ford to use in a new $3.5 billion EV battery plant – which Ford will run in Michigan.  We expect CATL’s results will continue to grow strongly given COVID disruptions came to an end. Fitch suggests EV sales in China will account for 35% of vehicles sales this year, up from 27% in 2022. EV sales grew 60% in 2022 to 10.4 million units and are expected to reach 13.9 million units this year, with most growth in China, according to Bloomberg. This also reflects strong demand for EV batteries ahead, as well as the key battery components including lithium, copper, graphite and aluminium. You can explore some of the companies in this space in Saxo's Lithium- Powering EVs equity theme basket.  CATL's had 37% share of EV battery global market in 2022, which is testament to its cheaper-to-produce lithium-iron-phosphate batteries. In joint second place, South Korea’s LG Energy Solution and China’s BYD Co, with a 13.6% share each. JD.COM gave a downbeat Q1 revenue guidance citing cautious Chinese consumers JD.COM (09618) reported Q4 revenue of RMB 295 billion, rising 7% Y/Y, in line with consensus estimates. Benefiting from a 1.4pp Y/Y improvement in operating margin to 2.5%, the e-commerce giant’s non-GAAP net profit came in at RMB 7.66 billion, a 115% increase Y/Y and nearly 40% above consensus. However, the share price of its ADRs plunged 11.3% overnight or 6.2% from its Hong Kong closing price on Thursday, on downbeat guidance on Q1 revenues. JD.COM expects JD Retail’s sales to fall by a low-to-mid single-digit percentage Y/Y in Q1, below analysts’ estimates of 1-3% growth. The Company’s management said the sentiment of Chinese consumers is still fragile and consumers have become more prudent on discretionary items. Reopening might also divert some of the online purchasing to off-line consumption such as dining and traveling.   For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Global Market Quick Take: Asia – March 10, 2023 | Saxo Group (home.saxo)
The Indian Rupee Pair Takes Clues From The Receding Fears Of Hawkish Fed Rate Moves

The USD/INR Pair Is Likely To Recover

TeleTrade Comments TeleTrade Comments 10.03.2023 08:50
USD/INR bears attack a convergence of 50-SMA, one-week-old resistance line. Upbeat oscillators suggest further recovery but 200-SMA acts as additional upside filter. Ascending trend line from Monday restricts immediate downside. USD/INR struggles to extend the previous day’s recovery moves as it retreats to 82.00 round figure heading into Friday’s European session. In doing so, the Indian Rupee (INR) pair steps back from a convergence of the 50-bar Simple Moving Average (SMA) and a downward-sloping resistance line from February 27. Even so, the bullish MACD signals and upward-sloping RSI (14), not overbought, keep USD/INR buyers hopeful of crossing the immediate 82.15 resistance confluence. Following that, the 200-SMA level surrounding 82.35 acts as the last defense of the pair bears, a break of which could quickly propel the USD/INR prices toward the 23.6% Fibonacci retracement level of its late January-February upside, around 82.55. It should be noted that the Indian Rupee’s weakness past 82.55 could help the USD/INR bulls to refresh the monthly high, currently around 83.10. In that case, the October 2022 peak of near 83.43 will be in focus. On the flip side, USD/INR pullback may initially aim for the weekly support line, close to 81.80 at the latest. However, the 61.8% Fibonacci retracement level and the monthly low, respectively near 81.70 and 81.60, could test the USD/INR bears before giving them control. Overall, USD/INR is likely to recover but the road to the upside is long and bumpy. USD/INR: Four-hour chart Trend: Further upside expected
New Zealand dollar against US dollar decreased by 1.07% yesterday

The NZD/USD Pair Is Likely To Decline Further

TeleTrade Comments TeleTrade Comments 10.03.2023 08:55
NZD/USD fades bounce off the lowest levels since late November 2022, grinds lower of late. 50-EMA pierces 200-EMA from above to portray death cross suggesting further downside of the Kiwi pair. Oversold RSI conditions, lows marked during mid-November challenge bears. Buyers need a successful break of 0.6265 to retake control. NZD/USD extends the previous day’s pullback from mid-0.6100s as bears flirt with the 0.6100 threshold during early Friday.  In doing so, the Kiwi pair justifies Thursday’s failure to cross the late February swing low. That said, the 50-bar Exponential Moving Average (EMA) pierces the 200-EMA from above and portrays the death cross, which in turn suggests further downside of the NZD/USD. However, the RSI (14) line is oversold and hence, lows marked during mid-November 2022, around 0.6060, may act as strong support for the NZD/USD bears to watch. In a case where the Kiwi pair refrains from bouncing off 0.6060 support, it becomes vulnerable to drop towards the early November 2022 peak surrounding the 0.6000 psychological magnet. Alternatively, a downward-sloping resistance line from February 14, close to the 0.6200 round figure, seems to challenge the NZD/USD pair’s immediate recovery. It’s worth noting, though, that a convergence of the 50-EMA and 200-EMA, around 0.6265, appears a tough nut to crack for the NZD/USD bulls, a break of which could trigger a run-up targeting the mid-February swing high near 0.6390. Overall, NZD/USD is likely to decline further but the room towards the south appears limited. NZD/USD: Daily chart Trend: Further downside expected
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

TeleTrade Comments TeleTrade Comments 10.03.2023 08:57
USD/JPY has turned sideways around 136.65 as investors await US NFP for further guidance. BoJ Kuroda continued expansionary monetary policy as the domestic demand and wages have failed to spur inflation. The RSI (14) is gathering strength for shifting into the bullish range of 60.00-80.00. The USD/JPY pair is displaying a volatility contraction around 136.65 after sheer volatility inspired by the continuation of an ultra-easy monetary policy by the Bank of Japan (BoJ). BoJ Governor Haruhiko Kuroda continued expansionary monetary policy as the domestic demand and wages have failed to spurt inflation in the Japanese economy. The US Dollar Index (DXY) is gathering strength in extending its recovery above the immediate resistance of 105.35. The USD Index has been extremely quiet as investors are awaiting the release of the United States Nonfarm Payrolls (NFP) data. S&P500 futures are continuously accelerating losses as fears of aggressive interest rates by the Federal Reserve (Fed) are skyrocketing. Meanwhile, the demand for US government bonds is soaring, which has trimmed the 10-year US Treasury yields further below 3.82%. On an hourly scale, USD/JPY has rebounded firmly from the upward-sloping trendline plotted from March 06 low at 135.37. The asset has extended its recovery above the critical resistance of 136.45, which has turned into support for the US Dollar bulls. The recovery move in the USD/JPY looks full of strength as the asset has scaled above the 20-and 50-period Exponential Moving Averages (EMAs) at 136.40 and 136.55 respectively. Meanwhile, the Relative Strength Index (RSI) (14) is making efforts in shifting into the bullish range of 60.00-80.00. An occurrence of the same will trigger the upside momentum. Going forward, a break above the intraday high at 137.00 will drive the asset toward March 08 high at 137.90 followed by November 28 high at 139.43. Alternatively, a downside move below the intraday low at 135.82 will drag the asset toward March 01 low at 135.26. A slippage below the latter will expose the asset to February 24 low at 134.06. USD/JPY hourly chart  
Bank of England is expected to hike the rate by 25bp. Kelvin Wong talks Euro against British pound

Analysis Of Price Movement Of The EUR/GBP Cross Pair

TeleTrade Comments TeleTrade Comments 10.03.2023 09:02
EUR/GBP takes offers to refresh intraday low, prints three-day downtrend. UK GDP improved in January, Industrial Production, Manufacturing Production deteriorated. Hopes of Britain’s economic rebound due to the latest reshuffle in governing policies, Brexit allow GBP to remain firmer. BoE versus ECB drama could check pair sellers as the key data begins in London. EUR/GBP slides 10 pips to refresh intraday low near 0.8860 as the UK’s Office for National Statistics releases the monthly Gross Domestic Product (GDP) on early Friday. It should be noted that the optimism surrounding the British economic transition and mixed sentiment, as well as likely challenges for the Euro, seem to exert additional downside pressure on the cross-currency pair. UK GDP grew 0.3% MoM in January versus 0.1% expected and -0.5% previous, which in turn pushes back the recession woes and propels the British Pound (GBP) despite mixed readings on the other fronts. That said, UK Industrial Production figures reversed the 0.3% previous expansion with -0.3% MoM marks whereas the Manufacturing Production growth dropped to -0.4% compared to -0.1% market forecasts and 0.0% prior. Also read: UK Manufacturing Production declines 0.4% MoM in January vs. -0.1% expected Elsewhere, hopes of economic recovery and more stock market listings seem to help the Cable pair amid a light calendar during the week. “The country's economy is on track to shrink less than expected this year and avoid the two-quarters of negative growth which mark a technical recession,” the British Chambers of Commerce (BCC) forecast on Wednesday per Reuters. Further, Britain’s finance ministry said on Wednesday it will launch a review into how investor research on companies could be improved to attract more listings, a step that follows a decision by UK chip designer Arm Ltd to only list in New York, reported Reuters. On the same line, Britain's revamped financial market rules will largely be aligned with U.S. and European Union regulations to minimize disruption to global companies, its financial services minister Andrew Griffith said on Thursday per Reuters. It should be noted that Bank of England (BoE) policy maker Swati Dhingra warned against interest rate hikes on Wednesday while saying that overtightening poses a more material risk at this point. On the other hand, fears of more economic pain for the bloc amid geopolitical tensions with Russia and sticky inflation, as well as higher rates, seem to drag the Euro. It should be noted that the risk-off mood underpins the US Dollar’s haven demand and reduces the demand of its major rival, namely the EUR. Having witnessed the initial market reaction to the UK’s data dump, EUR/GBP pair traders may concentrate on European Central Bank (ECB) President Christine Lagarde for clear directions. Also important to watch will be a slew of top-tier data from the US and Canada that can entertain the momentum traders across the board. Technical analysis Failure to overcome the 0.8930 horizontal hurdle joins the EUR/GBP pair’s clear downside break of a one-week-old ascending trend line, around 0.8895 by the press time, to direct bears towards the 100-DMA support of 0.8765.
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

The Outlook Of EUR/USD Pair In Short And Long Positions

Jakub Novak Jakub Novak 10.03.2023 09:20
Analysis of transactions and tips for trading EUR/USD The pair tested 1.0561 at a time when the MACD line was just starting to move above zero, which was a good reason to buy. It resulted in a price increase of about 20 pips. No other market signal appeared for the rest of the day. Contrary to expectations, the lack of statistics yesterday led to a further correction in EUR/USD. But today, there is a chance for growth as Germany's CPI data could prompt a rise in demand. The increase, however, will not be large because later in the day, ECB President Christine Lagarde and Board member Fabio Panetta will give a speech, which are unlikely to be good. Upcoming reports on the US labor market are also expected to strengthen dollar as a fall in unemployment rate, jump in non-farm payrolls and increase in average hourly earnings are reasons to buy the currency. Of course, if the data actually disappoints, euro will get a chance to see gains. For long positions: Buy euro when the quote reaches 1.0600 (green line on the chart) and take profit at the price of 1.0640. Growth is possible, but it will only be as an upward correction and nothing more. Nevertheless, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0574, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0600 and 1.0640. For short positions: Sell euro when the quote reaches 1.0574 (red line on the chart) and take profit at the price of 1.0538. Pressure will return if the US releases a strong labor market data. However, make sure that when selling, the MACD line is under zero or is starting to move down from it. Euro can also be sold at 1.0600, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0574 and 1.0538. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337241
The EUR/USD Pair Chance For The Further Downside Movement

The EUR/USD Pair Chance For The Further Downside Movement

Peter Jacimovic Peter Jacimovic 10.03.2023 09:24
Technical analysis: EUR/USD has been trading upside but I found that price has reached important intraday resistance Fibonacci at 1.0600 and there is chance for the further downside movement. Due to the longer-term downside trend and the rejection of the Fibonacci, I see potential for the further downside movement. Downside objectives are set at 1.0530 and 1.0400 DPO oscillator is showing extreme bull reading and potential for the downside rotation.... Key resistance is set at the price of 1.0600     Relevance up to 08:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315638
Japan: stronger-than-expected GDP supports BoJ policy normalization

The Bank Of Japan Kept Its Policy Unchanged, Lower Yields Saw The Dollar Trade Softer

Saxo Bank Saxo Bank 10.03.2023 09:36
Summary:  Financial market turbulence returned on Thursday after steep losses in two small US lenders, SVB Financial and Silvergate Capital Corp triggered a 7.7% sell off in the KBW Bank Index which includes major US banks. The S&P 500 fell to the lowest since January 19 while bond yields reversed sharply lower to surrender most of the gains triggered by Fed Chair Powell’s combatant statements on Capitol Hill earlier in the week. Lower yields saw the dollar trade softer while the loss of risk appetite sent crude oil and industrial metals lower. Before the banking woes took center stage, stocks had gained after a bigger than expected jump in weekly jobless claims raised speculation about a soft US job report due later today. What is our trading focus? US equities (US500.I and USNAS100.I): a warning shot has been fired The equity market has moved into risk-off mode following the 60% plunge in SVB Financial (indicated down again pre-market) as the bank has been forced to sell a considerable amount of its bond holdings causing big losses and the need raise more equity and hybrid capital. The S&P 500 Banks Index plunged 6.5% with JPMorgan Chase down 5.4%. We have seen a more muted reaction in the VIX Index only increasing to 22.6 which is a low figure given the risks coming into the market. Bill Ackman, a hedge fund manager, has said that the US government should consider bailing out SVB Financial as the bank is important the Silicon Valley ecosystem and for funding of start-ups in the US. The discussions about zero-days to expiry options (0DTE) and to what extent they can cause a big intraday move in the market will be tested today if the US jobs report fails to calm the market. Chinese equities (HK50.I and 02846:xhkg): tumbled on cautious consumer and tech war Hang Seng Index plunged 2.6% and CSI300 shed 1%. Investors were selling China internet and consumer names following downbeat comments from JD.COM on Chinese consumers.  The management of the Chinese e-commerce giant said that the sentiment of Chinese consumers is still fragile and consumers have become more prudent on discretionary items. In addition, reopening might also divert some of the online purchasing to offline consumption such as dining and traveling. JD.Com (09618:xhkg) tumbled 11.2%. Meanwhile, Hang Seng TECH Index dropped 3.2%. EV stocks fell sharply, led by an 8.7% decline of BYD (01211:xhkg). The tech war on semiconductors may extend from advanced equipment to materials. Investors are concerned that Japan may impose restrictions on the export of essential chemicals such as photoresist to China. The U.S. banking stock turmoil overnight in the U.S. also weighed on sentiment. FX: USD modestly weaker as risk sentiment weakens, JPY sold on unchanged BOJ The rise in jobless claims as well as the broader risk off arising from the SVB scare on Thursday saw yields dipping lower, taking the dollar off the recent highs as well but the decline remained modest with the USD coming in favor on the safe haven bid as well. Swiss franc also got a safe haven bid, and USDCHF plunged below 0.93 bringing the 50DMA at 0.9269 in focus. Bank of Japan’s unchanged monetary policy saw the JPY being the underperformer in the Asian session on Friday, but USDJPY could not pierce above 137. GBPUSD rose back above 1.19 ahead of UK data dump today likely to show that a recession has been delayed, but focus will shift to NFP later as the key USD driver in the very near-term. USDCAD continued to surge to fresh highs as Fed-BOC divergence widened and oil prices remained weak. The choppiness in crude oil prices continued Crude oil is heading for a weekly loss following another choppy session on Thursday which in the end took its cue from another loss of risk appetite as stress emerged in the US banking sector. Brent trades back below $81 after breaking below the trendline going back to the December low. While the signs of a pickup in Chinese demand remain mixed, the market has also been spooked by Powell’s combatant mood on Capitol Hill earlier in the week where he basically said recession was a price worth paying to get inflation under control. Gold finds support as stock market weakness drives bond yields sharply lower Gold caught a bid on Thursday in response to the high US jobless claims number and later a steep drop in US bond yields as the US banking sector slumped. The terminal US Fed fund rate dropped back to 1.5% while the market priced in a 1.25% rate cut in the following 12 months, developments that highlights the potential for US rates not being raised to the extend Fed chair Powell led the market to believe earlier in the week. Focus now turns to today’s job report after Fed Chair Powell in his testimony said the strength and duration of future rate hikes would be data dependent. Gold is once again testing the 21-day moving average resistance at $1835 ahead of at $1858 while support in the $1800 remains firm. Yields drop on financial market turbulence and spike in jobless claims A bounce in initial jobless claims to 211K (consensus 195K) from 190K kicked off the short-covering in the front end ahead of the employment report, due later today. The buying intensified later in the US on safe haven buying after the banking sector suffered its biggest drop since June 2020, with stocks in troubled Silvergate Capital and SVB Financial both tumbling. Yields on the 2-year plunged from 5.08% to 4.78% while the 10-year yield trades down to 3.82% from above 4% earlier in the week. The 2-10-year yield curve steepened to –97bps from –111 bps earlier in the session. What is going on? SVB’s 60% slump highlights the venture capital and tech bubble is spilling over to banks Investors were spooked by Silicon Valley Bank announcing it taking emergency steps to shore up capital after suffering a $1.8 billion after-tax loss in the first quarter. SVB sold about $21 billion of securities from its portfolio and plans to raise $2.25 billion. Having ended the regular session down 60% at 106 it went on the drop another 22% to 83 in afterhours trading. This reflects the pain of higher interest rates and tighter liquidity on the venture capital start-up bubble and it triggered heavy selling across banking stocks with KBW Bank Index tumbling 7.7%, its biggest drop since June 2020. Also on Thursday, another California lender, Silvergate Capital Corp, down 80% this month, which is targeting cryptocurrency firms, such as FTX, announced its winding down operations, following the meltdown of its financial strength, after digital assets plunged. Oracle shares down on cloud miss The software and database maker reported FY23 Q3 revenue growth of 18% y/y and adjusted EPS of $0.71 down 17%, but the disappointment was mostly in the outlook and especially in Oracle’s cloud business as customers are reducing spending growth. Oracle shares were down 4% in extended trading. Bank of Japan’s Kuroda ends term without sparks The Bank of Japan kept its policy unchanged at Governor Kuroda’s last meeting of his decade-long tenure. The target band for the 10-year JGB yield was kept unchanged at around 0%, with an upper limit of 0.50% after being raised in December. The BOJ held its short-term rate at -0.1%. Although data and recent communication had hinted at no change in monetary policy, there were some apprehensions given Kuroda is famous for giving surprises to the market. However, the outcome carried his usual dovish tone, ensuring a smooth handover to incoming Governor Kazuo Ueda who has conveyed policy continuity in his first remarks after being nominated. Jobless claims cool, focus now on NFP data today Initial claims rose 211k in the week of 4th March, above the 190k prior and the 195k expected. It was the first time that the jobless claims came above the 200k mark since January, and it was the highest claim YTD. The continued claims also rose to 1.718 mn from 1.649 mn, coming in above estimates as well. While this may have raised some concerns that the US labor market is softening, the print is still strong and eyes now turn to the February payrolls data out today in the US. Our full preview is here, which says that Overall message, despite a potentially softer headline print, is likely to be that US labor market is still tight and there are millions of open positions even as layoffs continue to ramp up in some of the sectors. Headline jobs are expected to come in again at 200k+, but risk of disappointment remains given the scope of correction from +517k in January. A strong print could further cement the case for a 50bps rate hike this month. US-India ties expand into semiconductors The US and India are looking to sign an agreement to boost coordination of their chip industry to focus further on information sharing and policy dialogue, as India forges ahead to boost its presence in the global technology supply chain amid China’s crackdowns on the private sector and growing geopolitical issues. CATL delivers stronger than expected results underscoring surging EV demand CATL, the world's biggest battery maker and Tesla’s battery supplier, delivered results eclipsing estimates, amid stronger EV demand, while its results also cement CATL as the industry leader. Net income surged 93% y/y, to CNY 30.7bn vs est. CNY 28.8bn with both its power battery and energy storage division’s revenue growing far more than expected amid clean energy demand. What are we watching next? The Australia, UK and US alliance thrusts the Defence and Nuclear sectors into the spotlight US President Joe Biden will host a meeting with the UK Prime Minister Rishi Sunak and Australian Prime Minister Anthony Albanese in San Diego on Monday, where they are expected to decide on how to move ahead with a multibillion submarine plan, which could involve Australia buying as many as five US Virginia class nuclear-powered submarines in the 2030s. They are also expected to deliberate on how to get other high-tech weaponry to Australia. This is all a part of the AUKUS alliance, which was formed 18 months ago, aimed at the countries sharing defence and military capabilities, to protect the Indo-Pacific region, and counter China. For the investor, it makes one reflect on the capital being spent in the industry, which may present as a potential investment opportunity to explore. So, we break down the next steps of the AUKUS alliance, where the vessels will be built, the potential financial outlay, the likely companies involved and Saxo’s Equity Defence and Nuclear theme equity baskets to watch. Read our article here. Earnings to watch Today’s key earnings releases are not market moving and thus the focus is on next week’s earnings with the most interesting earnings releases being Volkswagen, BMW, Adobe, and FedEx. Friday: Daimer Truck, AIA Group, DiDi Global Next week’s earnings releases: Tuesday: Foxconn, Volkswagen, Generali Wednesday: Constellation Software, BMW, E.ON, Ping An Insurance, Prudential, Inditex, Adobe, Lennar Thursday: Verbund, Rheinmetall, KE Holdings, Enel, FedEx, Dollar General Friday: Vonovia Economic calendar highlights for today (times GMT) 1330 – US Feb. Nonfarm Payrolls Change 1330 – US Feb. Unemployment Rate 1330 – US Feb Average Hourly Earnings 1330 – Canada Feb. Employment Data   Source: Global Market Quick Take: Europe – March 10, 2023 | Saxo Group (home.saxo)
USD/CAD - Canadian economy added 41,400 jobs beating expectations

The USD/CAD Bulls Might Prefer To Take A Breather

TeleTrade Comments TeleTrade Comments 10.03.2023 11:44
USD/CAD continues scaling higher on Friday and touches its highest level since October. Bearish crude Oil prices undermine the Loonie and remain supportive of the momentum. The risk-off mood benefits the USD’s relative safe-haven status and acts as a tailwind. Traders now look to the monthly jobs data from Canada and the US for a fresh impetus. The USD/CAD pair adds to its strong weekly gains and climbs to its highest level since October 17, 2022, around the 1.3860 area during the first half of the European session on Friday. The selling pressure around Crude Oil prices remains unabated for the fourth straight day, which undermines the commodity-linked Loonie and acts as a tailwind for the USD/CAD pair. In fact, the black liquid remains on track to register its worst fall since early February amid worries that slowing global economic growth will dent fuel demand. Apart from this, the fact that the Bank of Canada (BoC) became the first major central bank to pause its rate-hiking cycle on Wednesday is seen as another factor weighing on the Canadian Dollar. The aforementioned factors, to a larger extent, helps offset a modest US Dollar weakness and continue to push the USD/CAD pair higher. Data released on Thursday showed a larger-than-expected rise in the US Weekly Jobless Claims, which was seen as the first sign of a softening labor market. This, in turn, forced investors to re-evaluate the possibility of a  50 bps lift-off at the upcoming FOMC meeting on March 21-22, leading to a further decline in the US Treasury bond yields and exerting some follow-through pressure on the Greenback. That said, the prevalent risk-off environment - amid looming recession risks - helps limit losses for the safe-haven buck, at least for the time being. The market sentiment remains fragile in the wake of worries about economic headwinds stemming from rising borrowing costs, which is reinforced by a further deepening of the yield curve. Adding to this, the incoming softer Chinese macro data dashed hopes for a strong recovery in the world's second-largest economy. This, in turn, tempers investors' appetite for perceived riskier assets. The USD/CAD bulls, meanwhile, might prefer to take a breather amid a slightly overbought Relative Strength Index (RSO) on the daily chart and ahead of the closely-watched US monthly employment details. The popularly known NFP report is more likely to overshadow the Canadian jobs data and play a key role in influencing the pair's near-term trajectory. The focus will then shift to the latest US consumer inflation figures, due for release next Tuesday.
Euro's Rally Stalls as Focus Turns to Inflation and Data Disappointments

USD/JPY Is Close To 137.00, EUR/USD Is Below 1.06, GBP/USD Is Trading Below 1.20

Kamila Szypuła Kamila Szypuła 10.03.2023 12:18
The dollar index was steady on Friday, a rare spot of calm in volatile global markets ahead of key U.S. payrolls data later in the day, while the yen weakened after the Bank of Japan kept stimulus settings steady. The focus for today is the publication of the non-farm payroll (NFP) in the US with forecasts of 205,000. USD/JPY With the beginning of the trade, USD/JPY traded later at 136.00, but quickly bounced back to 136.75. In the following hours of the Asian session, the prices of the yen pair were above 136.50. At the beginning of the European session, the pair's exchange rate fell to the level of 136.25, but this time it managed to recover. At the time of writing, USD/JPY is trading above 136.95 but still below 137.00. In his last meeting as the BOJ Governor Haruhiko Kuroda left policy settings steady, in line with expectations, given the Japanese central bank adjusted the yield band as recently as December. Incoming BOJ Governor Kazuo Ueda has said the central bank must maintain its current ultra-easy policy for now until there are signs that inflation has sustained above BOJ’s 2% target EUR/USD The euro pair trading on Friday is quite mixed. In the Asian session, the EUR/USD pair was held just after 1.06 and above 1.0585. In the European session, the euro was both above 1.0605 and below 1.0580. At the time of writing, the EUR/USD pair is below 1.0590. The euro rises against the dollar after heavy losses at tech-focused U.S. lender SVB Financial and could extend its gains on potentially softer U.S. jobs data later. The euro gained some support this Friday morning thanks to slightly weaker dollar and better than expected German CPI data. Although the actual numbers were printed as forecast, the figure of 8.7% underscores heightened and persistent inflationary pressures in Germany. As Germany is the largest economy in the Eurozone, the inflation release acts as a proxy for the wider region, reinforcing hawkish sentiment on the part of the European Central Bank (ECB). To close the trading session from a EURUSD perspective, ECB's Christine Lagarde is due to speak and may reiterate the need to suppress inflation after today's German data. GBP/USD The pair of the pound, contrary to the euro, trades calmly. In the zajastj session, the cable pair held around 1.1930, but was mostly below this level. With the European session, the GBP/USD pair began to grow. The GBP/USD pair managed to get close to the 1.20 level, but did not maintain momentum and at the moment of writing the text is trading after 1.1977. Sterling rose on Friday after Britain's economy was shown to have grown by more than expected in January, further allaying fears of a recession. The Office for National Statistics (ONS) said Britain's economy expanded 0.3% month-on-month, after a drop of 0.5% in December. AUD/USD The movement of the pair Aussie equals and z is mixed. At the beginning of the Asian session, the AUD/USD pair fell towards 0.6570 and then increased towards 0.66. In the following hours, the Australian pair remained in the range of 0.6585-0.6595. After a surge, AUD/USD has fallen again and is now trading below 0.6590 Source: investing.com, finance.yahoo.com
Softer New Jobs Reading Would Likely Weigh On The Canadian Dollar

Softer New Jobs Reading Would Likely Weigh On The Canadian Dollar

Kenny Fisher Kenny Fisher 10.03.2023 13:00
The Canadian dollar continues to sag and has dropped 1.9% this week. Hold onto your hats, as we could have some further volatility from USD/CAD in the North American session, with the release of the US and Canadian employment reports. All eyes on NFP The highlight of the day is the US nonfarm payrolls report, which is expected to head back to earth after a blowout gain of 517,000 in January. The consensus for February stands at 205,000 and a wide miss of this figure on either side will likely shake up the US dollar.  A weak reading would fuel speculation of a Fed pivot and likely weigh on the US dollar, while a strong figure would support the Fed’s hawkish stance and should be bullish for the greenback. The ADP payroll report, which precedes the nonfarm payroll release, improved to 242,000, up from an upwardly revised 119,000 and above the estimate of 200,000. The ADP reading is not considered all that reliable at forecasting the nonfarm payrolls report so I wouldn’t read too much into it. Still, the US labour market remains strong despite the Fed’s tightening, and I would not be surprised to see nonfarm payrolls follow the ADP’s lead and beat the estimate. In addition to nonfarm payrolls, the Fed will also be keeping a close eye on wage growth. Average hourly earnings is expected to rise to 4.7% y/y in February, up from 4.4% y/y in January. The Fed is focussed on lowering inflation and an acceleration in wage growth could prompt the Fed to be more aggressive with its pace of rate increases. Canada also recorded a sharp gain in new jobs in January, with a reading of 150,000, up from 104,000 prior. The markets are braced for a small gain of 10,000 in February, and a soft print of 5,000 or lower would likely weigh on the Canadian dollar. The unemployment rate is expected to tick up to 5.1%, up from 5.0%.   USD/CAD Technical There is support at 1.3787 and 1.3660 1.3927 and 1.4190 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Kuroda Stayed On The Sidelines And The Yen Responded With Losses

Kuroda Stayed On The Sidelines And The Yen Responded With Losses

Kenny Fisher Kenny Fisher 10.03.2023 13:30
The Japanese yen is trading at 1.36.83 in the European session, down 0.52%. USD/JPY fell 0.90% on Thursday but has recovered much of those losses today. Kuroda exits with a whimper Bank of Japan Governor Kuroda didn’t fire any final shots at his final meeting today. The BoJ maintained interest rates at -0.1%, where they have been pegged since 2016, and didn’t make any changes to its to yield curve control (YCC) policy. Traditionally, BoJ governors do not make waves at their final meeting, but there was an outside chance that Kuroda might buck the trend. Kuroda has surprised the markets in the past, most notably when he widened the yield curve band in December and jolted the markets. This time, Kuroda stayed on the sidelines and the yen responded with losses as some investors were disappointed that he didn’t tweak the YCC. Kazuo Ueda takes over as BoJ Governor next month, and there is growing speculation that Ueda will change forward guidance and tweak or even abandon YCC, as distortions in the yield curve are damaging the bond markets. Ueda may not press the trigger when he chairs his first meeting in April but is expected to shift policy in the coming months. The US releases its February employment report, highlighted by nonfarm payrolls, later today. The blowout January reading of 517,000 is widely seen as a blip, although the labour market remains surprisingly resilient, despite the bite of rising interest rates. The estimate for February stands at 205,000 and a wide miss of this figure on either side will likely shake up the US dollar.  A weak reading would fuel speculation of a Fed pivot and likely weigh on the US dollar, while a strong figure would support the Fed’s hawkish stance and should be bullish for the greenback. The Fed will also be keeping a close eye on wage growth, in addition to nonfarm payrolls. Average hourly earnings are expected to rise to 4.7% y/y in February, up from 4.4% y/y in January. Higher wages drive inflation higher and an acceleration in wage growth would complicate the Fed’s battle to curb inflation.   USD/JPY Technical 136.06 is under pressure in support. 13502 is next 136.86 and 1.37.90 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
The Results Of The March Meeting Of The Bank Of Japan Are Rather Symbolic

The Results Of The March Meeting Of The Bank Of Japan Are Rather Symbolic

InstaForex Analysis InstaForex Analysis 10.03.2023 13:55
The Bank of Japan kept all monetary policy parameters as they were in March, voicing dovish rhetoric. The regulator left the short-term interest rate on deposits of commercial banks at -0.1% per annum, the target yield of 10-year government bonds is about zero. In addition, the central bank has maintained the range within which the yield on 10-year government bonds can fluctuate—plus/minus 0.5%. We can say that the March meeting was of a "passing" nature, as the regulator voiced its usual rhetoric and retained all the parameters of monetary policy. But today was a notable event for the USD/JPY traders. The end of an era The fact is that today's meeting is the last under the leadership of Haruhiko Kuroda, who has led the central bank for the past 10 years. In such cases, they say "the end of an era"—and this is true, given that Kuroda consistently and throughout his entire term in office implemented a soft monetary policy. The Bank of Japan remains the only central bank in the world with negative interest rates. Loose monetary policy caused the Japanese currency to collapse to a 32-year low last year, forcing the Japanese authorities to intervene in support of the yen. Despite rising inflation in Japan, Kuroda remained true to his conviction to the end—for example, today, he again announced the readiness of the central bank to take further steps towards easing the monetary policy. At the same time, the head of the regulator stressed that the positive effects of soft monetary policy "far outweigh the side effects." During his press conference, Kuroda advised his successor to continue easing monetary policy "to encourage companies to raise wages." In fact, the main intrigue of the coming months lies precisely in this question: will Kuroda's successor maintain his course, or will he still decide on a gradual calibration? As you know, the Japanese parliament this week approved Kazuo Ueda as the next head of the central bank. He will head the Bank of Japan next month, on April 8, when Haruhiko Kuroda's term expires. The next meeting of the regulator's members (April 28) will be held under his leadership. Is Ueda a Kuroda 2.0? Ueda has repeatedly stated that he intends to continue to adhere to the large-scale monetary easing program of the Central Bank. In his opinion, the growth in consumer inflation is mainly due to rising import prices, not increased demand. He expressed confidence that price drivers "are likely to slow down soon" and inflation will fall below 2% by the end of this year. It's funny, but Ueda repeated word for word Kuroda's phrase that the advantages of the current monetary policy outweigh its disadvantages, at least for now. And yet, despite such a dovish mood, market participants are still preparing for the fact that the new head of the Japanese regulator will follow the path of policy normalization. Here it is necessary to emphasize one important nuance. Unlike Kuroda, Kazuo Ueda still allows the option of normalizing monetary policy parameters. On the one hand, Ueda repeated several times the thesis that today he does not question the policy pursued by the current head of the Bank of Japan. On the other hand, he noted that if trending inflation "strengthens significantly" and there is room for sustained achievement of the BOJ's target, the central bank may consider normalizing policy. At the same time, Ueda made it clear that if any changes are required in the future, these changes will be carried out slowly, consistently and smoothly: there will definitely be no sharp rate hikes in the spirit of the Fed. In general, the results of the March meeting of the Bank of Japan are rather symbolic – this is the last accord of Haruhiko Kuroda, who has been at the helm of the Central Bank since 2013. The market expectedly ignored Kuroda's rhetoric, who again repeated the usual theses. At the same time, we should not expect sharp movements and dramatic changes from Kuroda's successor, Kazuo Ueda. If he does decide to initiate any shifts in policy, it will not be until the second half of this year. Conclusions All this suggests that USD/JPY will follow the greenback for the foreseeable future, which, in turn, is gaining momentum against the hawkish statements of Fed Chairman Jerome Powell. The February Nonfarm Payrolls may strengthen the dollar's position, allowing buyers of USD/JPY to approach the borders of the 138th figure. From a technical point of view, the pair on the D1 timeframe is between the middle and upper lines of the Bollinger Bands indicator, above all the lines of the Ichimoku indicator, except for Tenkan-sen. The current fundamental background contributes to the development of the upward trend, but longs should be opened after buyers consolidate above the mentioned Tenkan-sen line, which corresponds to 136.60. The main target of the upward movement in the medium term is 138.00, which is the upper line of the Bollinger Bands on the daily chart.   Relevance up to 10:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337265
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

FX Weekly Summary: USD/JPY Ended Above 135.00, GBP/USD Was At 1.2032, EUR/USD Ended At 1.0643, AUD/USD Was Below 0.66

Kamila Szypuła Kamila Szypuła 11.03.2023 09:31
The dollar weakened on Friday after U.S. labor data for February showed slower wage growth, suggesting an easing of inflation pressures may keep the Federal Reserve's pace of interest rate hikes modest and thereby reduce the greenback's appeal. USD/JPY The yen pair started trading this week at 135.9770. For the first two days, USD/JPY traded mostly below 136.00. After that, the yen pair rose and reached a trading high of 137.8850. After reaching the top, the pair turned down and the pair fell towards 136.00. The lowest trading level was recorded on the last day of trading at 134.1710. The USD/JPY pair traded at 135.0480 . In his last meeting as the BOJ Governor Haruhiko Kuroda left policy settings steady, in line with expectations, given the Japanese central bank adjusted the yield band as recently as December. Incoming BOJ Governor Kazuo Ueda has said the central bank must maintain its current ultra-easy policy for now until there are signs that inflation has sustained above BOJ’s 2% target. EUR/USD The euro pair started trading at 1.0632. For the first two days of trading, the EUR/USD pair rose towards 1.0695, but failed to maintain momentum and plummeted below 1.06. After this drop, the euro remained below 1.06 for the next trading days, reaching its lowest level at 1.0529 on Wednesday. Despite the low level below 1.06, the pair was increasing its level day by day. The highest level was recorded by the EUR/USD pair on the last day of trading and it managed to exceed the level of 1.07 (1.0701). The trading session closed at 1.0643 . Moreover, the hawkish tone of Powell's comments also seems to have an impact on expectations of interest rate hikes by the European Central Bank (ECB). The ECB is scheduled to meet on Thursday, March 16 ahead of the Fed, which begins its meeting next week on March 22. GBP/USD The cable pair started trading at 1.2033. For the first two days of trading, GBP/USD traded in the 1.2000-1.2050 range, but failed to maintain momentum and plummeted below 1.19. After this decline, the pound pair remained in the range of 1.1810-1.1850 for the next trading days, and the lowest level was recorded in the range at 1.1812. The GBP/USD pair broke the high end of the range in the second half of Thursday and has been on the rise since then, crossing the 1.19 level. The highest level of the week was reached by the pair on the last day of trading at 1.21107. The closing of the trading session was at 1.2032. AUD/USD The Australian pair started the week trading at 0.6755. The AUD/USD pair was falling, but remained above 0.67 for the first few days. Already on Tuesday in the American session, the AUD/USD pair recorded a significant drop to levels below 0.66. Over the next few days, AUD/USD traded in the 0.6575-0.6625 range. The lowest level was also recorded by the Aussie pair in this range, at 0.6572. The highest level of the week was in the first trading days on Monday at 0.6771. The AUD/USD pair ended the week at 0.6584 . Weak economic data from Australia in the form of building permits and private home permits for January arrived this week. Both sets of data printed in line with estimates but reached levels last seen in January 2022. This deterioration in the housing and construction sectors is a reflection of the high interest rate environment created by the Reserve Bank of Australia (RBA). The Reserve Bank of Australia raised its cash rate by a quarter of a percentage point to 3.60% and said further monetary policy tightening would be needed. Source: finance.yahoo.com, investing.com
US core inflation hits 5.5% and it's the second lowest reading since November 2021

Watch: Dollar bear trend takes a rain check

ING Economics ING Economics 11.03.2023 10:01
As it becomes increasingly clear to financial markets that inflation is proving far stickier than most had felt at the start of the year, our Global Head of Markets Chris Turner says a return to the disinflation and weaker dollar narrative will have to wait   FX Talking: Dollar bear trend takes a rain check What can be expected for FX over the month ahead? The main focus in the G10 space will be on US activity data and upcoming major central bank meetings, while continued strength for the US dollar and key local stories also remain in the spotlight. Find all the latest details from our team here: FX Talking: Dollar bear trend takes a rain check   Read this article on THINK TagsUS FX Asia Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

Stock Market Summary Of The Week 6-10.03.2023

Conotoxia Comments Conotoxia Comments 12.03.2023 10:19
The Fed announces that it will raise interest rates and one of the big Silicon Valley banks has liquidity problems. As the news becomes widespread, this bank's shares fall by 60% in a single session. This seems to have had a knock-on effect on the shares of the entire financial sector. Could other banks really be in trouble because of this, and what else have we learned during the past week? Macroeconomic data Monday's reading of the UK construction sector sentiment index came as a surprise at the start of the week. The data beat analysts' expectations, coming in at 54.6 points (49.1 points were expected). This is the first reading in two months heralding an improvement in the health of the sector. Tuesday's key event was a speech by Fed Chairman Jerome Powell, who said, among other things: "If the totality of the data indicated that faster tightening of financial policy was warranted, we would be prepared to increase the pace of interest rate hikes." Following Powell's speech, the S&P 500 Index (US500) began to fall, ending the week at minus 3.6%. Source: Conotoxia MT5, US500, Daily Wednesday brought us the US non-farm employment forecast report (ADP). The document, created from the payrolls of US companies, seemed to predict the final readings of the change in non-farm employment quite well. The current reading was better than expected at 242,000 (200,000 was expected). This would indicate that the US labour market is still strong, which may encourage the Fed to raise interest rates further. The Bank of Japan's interest rate decision seemed to come to the fore on Thursday. The institution's new governor chose not to change the negative level of interest rates. Japan's Nikkei index (JP225) was able to gain in anticipation of the announcement of the decision, before returning to levels seen earlier in the week. Source: Conotoxia MT5, JP225, Daily In Germany, CPI inflation for February came in at 8.7%, unchanged for three consecutive readings, as forecast. An important news item for the US market could be the non-farm employment reading, where an increase of 205,000 is expected. The stock market In Thursday's session, we learned of the problems of SVB Financial Group bank, whose shares slumped by as much as 60%. This seems to have caused declines in the entire US financial sector. It ended the week with a performance of more than minus 5%, as could be seen in the listing of the Financial Select Sector SPDR Fund (XLF). Source: Conotoxia MT5, XLF, Daily Source: https://www.sectorspdr.com/sectorspdr/tools/sector-tracker Among the companies whose shares fell the most this week are the aforementioned SVB Financial Group bank, whose shares slumped by more than 60%. Shares of electric car manufacturer Tesla fell by almost 10%. Among the few companies whose shares rose are: Apple, up 3.2%; Meta (Facebook), up 4.1%; and General Electric (GE), up 6.8%. All key changes can be seen below. Source: https://finviz.com/map.ashx?t=sec&st=w1 Currency and cryptocurrency market In the foreign exchange market, we could see another week of strong strengthening of the US dollar. The EUR/USD pair exchange rate fell by 0.4%. The biggest changes in USD quotations could be seen on the pair with the Australian dollar. The USD/CAD exchange rate rose by 1.8%, approaching resistance levels of 1.4. Source: Contoxia MT5, USDCAD, Daily The value of cryptocurrencies is plummeting as a result of the issues surrounding Silvergate bank, a key player in the market. Bitcoin has lost more than 12% of its value over the past week, falling below $20,000, while ethereum has shrunk by 11.6%. The situation appears to be unfavourable for cryptocurrencies. The weekly change in stablecoin market capitalisation, which determines the value of capital in the market, has now fallen by 2% m/m. Grzegorz Dróżdż, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.     search   g_translate    
Rates Spark: Crunch time

Analysis Of The EUR/USD Pair Over This Week

Paolo Greco Paolo Greco 12.03.2023 10:22
Long-term outlook. Over this week, the EUR/USD currency pair was able to trade both ways. The start of the week was very dull, but by Tuesday, the market was aggressively working through Jerome Powell's speech to the US Congress. We think the head of the Fed did not report anything spectacular or unexpected because all of the ideas he expressed could have been predicted. The only unexpected thing was that nobody knew when they would be announced. The US dollar rose after this speech, as it turned out that Mr. Powell plans to express them in front of senators. But as it increased, it also decreased. If we assumed the euro's decline would continue on Wednesday, it became evident on Friday that we should not jump to conclusions. After all, Friday's statistics proved to be unclear while yet being extremely significant. Going ahead a little, it should be noted that Nonfarm once more came in over expectations, and the unemployment rate increased from 3.4% to 3.6%. Yet, given that the unemployment rate is still very close to its lowest level in 50 years, we think that even with these statistics, the dollar should have grown. The indicator's growth of 0.1-0.2% is not particularly significant. For instance, each consecutive increase would be significant if the unemployment rate had been growing for several months in a row. The outcome was that the pair spent the entire week in "swing" mode, as is evident on the 4-hour TF. The pair was fixed below the Ichimoku cloud on the 24-hour chart, not because it was aggressively decreasing but rather because the Ichimoku cloud rose. Moreover, the price was unable to establish a solid base below the 38.2% Fibonacci level. It is therefore impossible to conclude that the decreasing trend is still present now. To put it more precisely, it is conceivable to come to a resolution regarding saving but not to move further. We believe that the US dollar should already be continuing to strengthen based on the Fed's highly likely increase in aggressiveness, but the ECB has just started to convey clear signs of a higher rate hike. COT evaluation. A new COT report for February 21 was made public on Friday. It was about a month ago, around the time that the report for February 14 disappeared. It appears that the Commodities Futures Trading Commission will continue to provide reports from a month ago even if they are no longer very important. Note that the CFTC's efforts were unsuccessful, which is why we are currently receiving irrelevant information. Thus far, we can claim that the picture accurately reflects what has been happening in the market during the past few months. The aforementioned image unequivocally demonstrates that since the start of September 2022, the net position of significant players (the second indicator) has been increasing. At about the same time, the value of the euro started to increase. Although the net position of non-commercial traders is currently "bullish" and growing virtually weekly, it is the relatively high value of the "net position" that now permits the upward trend's impending end. This is indicated by the first indicator, which frequently occurs before the end of a trend and on which the red and green lines are quite far apart. The euro has already started to decline, although it's unclear if this is just a short pullback or the start of a new downward trend. The number of buy contracts from the "Non-commercial" group fell by 0.1 thousand during the most recent reporting week, while the number of shorts increased by 1.3 thousand. Therefore, the net position has grown again by 1.2 thousand contracts. For non-commercial traders, there are 165 thousand more buy contracts than sell contracts or three times more buy contracts than sell contracts. Nonetheless, the correction has been building for a while, so it is evident even without news that the pair should keep falling. Analysis of important events. This week's major event was scheduled to be the US Nonfarm Report, but it ended up being Jerome Powell's speech and the unemployment data. Powell's statement was what ultimately caused the pair to fall, as the news provoked an increase in quotes and prevented the market from correctly and logically calculating non-farm payrolls. We consider the NonFarm Payrolls report to be more significant than the unemployment rate, as it shows a considerable excess over the predicted values for the second consecutive month. Thus, it makes no difference that the value for January was reduced. An adjustment of 20–30 thousand jobs does not matter when 0.5 million new employees are created versus a prediction of 200 thousand. As a result, on Friday, the US dollar should have risen against the euro, but this is not what happened. In the future, this situation will need to be leveled. In other words, the dollar may increase the following week during times when there are no clear-cut grounds or reasons for doing so. We are still anticipating a decline in the euro/dollar pair. Trading strategy for the week of March 13–17: 1) The pair is in a downward trend and is still situated below the Kijun-sen on the 24-hour period. As a result, the fall might continue with targets around 1.0200–1.0300. Although we still think that sales are appropriate, Friday's unemployment report confused the market. 2) The purchases of the euro/dollar pair are no longer significant. You should now wait for the price to return above the critical Ichimoku indicator lines before you start to think about long positions. There are currently no factors that would allow the euro currency to resume growing in the medium term. But, in the present world, anything can happen at any time. Explanations for the illustrations: Fibonacci levels, which serve as targets for the beginning of purchases or sales, and price levels of support and resistance (resistance/support). Take Profit levels may be positioned close by. Bollinger Bands, MACD, and Ichimoku indicators (standard settings) (5, 34, 5). The net position size of each trading category is represented by indicator 1 on the COT charts. The net position size for the "Non-commercial" category is shown by indicator 2 on the COT charts   Relevance up to 14:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337338
Analysis Of The GBP/USD Pair Over 6- 10.03 Week

Analysis Of The GBP/USD Pair Over 6- 10.03 Week

Paolo Greco Paolo Greco 12.03.2023 10:27
Long-term outlook. During the current week, the 4-hour TF side channel's lower limit has been broken by the GBP/USD currency pair. The lower border of the side channel for the 24-hour TF, which is plainly shown in the image above, runs 100 points lower. The price, which had dropped by 200 as a result of Jerome Powell's speech to the US Congress, was resting at this limit on Tuesday. Remember that Powell openly acknowledged that the rate of monetary policy tightening might be increased once again and that the key rate might rise for a longer period than anticipated. Consequently, with such a spike in "hawkish" rhetoric, there could be no other option except for the dollar to rise again. On the 24-hour TF, however, it was not possible to break out of the channel, so a rebound from its lower border and new growth of the pair on Wednesday, Thursday, and Friday followed. The pair continues to be inside the side channel even though the minimal downward slope is still present. As a result, we must wait till the level of 1.1841 (38.2% Fibonacci) has been overcome. The Ichimoku indicator's lines are now largely irrelevant. We're still waiting for the British pound to fall since there aren't any other options right now. Remember that the pair increased by 2,100 points in a short period or 50% of the entire downward trend that lasted for two years. There has been a frank flat in the last three months, so generally speaking, nothing long-term interesting is happening right now. Like the Fed, the Bank of England will keep raising interest rates, but nobody is certain of the extent or upper bound. And the answer to this issue will determine the future of the British pound. From a fundamental standpoint, we think the dollar has a greater justification for growth. Likewise with technical. COT evaluation. The most recent COT report for the British pound, which hasn't been accessible for over a month, shows developments for February 21. Undoubtedly, the significance of these reports has decreased over the years, but they are still better than nothing. The Non-commercial group opened 3.3 thousand buy contracts and 4.9 thousand sell contracts during the most recent reporting week. Therefore, there was a 1.6 thousand fall in the net position of non-commercial traders. The net position indicator has been increasing gradually over the past few months, but the major players' outlook is still "bearish," and even though the pound sterling is strengthening against the US dollar (in the longer term), it is quite challenging to determine the basic reasons why. We utterly do not rule out the possibility that the pound may start to decline more rapidly in the near future. Although it has officially started, so far it seems more like a flat. Furthermore take note that both main pairs are currently moving quite similarly, but that the net position for the euro is positive and even suggests that the upward momentum will soon come to an end, while the net position for the pound is negative. A total of 67 thousand sales contracts and 46 thousand purchase contracts have now been opened by the non-commercial group. We continue to be pessimistic about the British pound's long-term growth and anticipate further declines. Analysis of important events. This week in the UK, there was essentially nothing interesting. Reports on the GDP and industrial production were only made public on Friday. Yet, considering the current circumstances and fundamental backdrop, industrial production had no possibility of attracting traders, and the GDP report was not quarterly, but monthly. Consequently, despite the pound's continuous growth on Friday, these numbers had essentially little impact on the pair's movements. But how can we connect the strengthening of the pound on Friday with UK data when industrial production turned out to be worse than expected and even negative, and GDP in January was only slightly above expectations? In general, something can no longer be considered reasonable if there was a reaction. We recall that the Wednesday growth of the pair was triggered by a rebound from the level of 1.1841, which was considerably more significant. As we've already mentioned, Powell's speech took place in the States, which was very beneficial to the dollar, and reports on unemployment and nonfarm payrolls were released, which collectively caused the dollar to fall "from heaven to earth." As a result, we once again have a flat, a "swing," or any movement other than a trend. Trading strategy for the week of March 13–17: 1) The pound/dollar pair is presently in the side channel between 1.1840–1.2440. Short positions are therefore more pertinent right now, although it's unlikely that the pair will emerge from the side channel anytime soon. Thus, we suggest delaying additional sales until the 1.1840 level is broken. Then, taking short positions with a target 300–400 points lower will make sense. 2) Purchases won't be important unless the price is fixed above the crucial line or there is another powerful signal. Yet, given the flat market, even fixing above Kijun-sen does not ensure the rise would resume. Also, purchases are conceivable with recovery from the side channel's lower border with the aim of the higher border, but even in this scenario, things are not always simple because the price may not reach the upper border. After all, the minimal downward trend is still intact. Explanations for the illustrations: Fibonacci levels, which serve as targets for the beginning of purchases or sales, and price levels of support and resistance (resistance/support). Take Profit levels may be positioned close by. Bollinger Bands, MACD, and Ichimoku indicators (standard settings) (5, 34, 5). The net position size of each trading category is represented by indicator 1 on the COT charts. The net position size for the "Non-commercial" category is shown by indicator 2 on the COT charts     Relevance up to 14:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337340
Taming the Dollar: Assessing Powell's Hawkish Tone Amidst BRICS Expansion

At The Close Of The New York Stock Exchange All Indices Were Down

InstaForex Analysis InstaForex Analysis 13.03.2023 08:00
At the close of the New York Stock Exchange, the Dow Jones was down 1.07% to hit a 3-month low, the S&P 500 was down 1.45% and the NASDAQ Composite was down 1.76%. Unemployment in the US rose to 3.6% in February from 3.4% the previous month, while analysts believed that the figure would not change. And the number of people employed in non-agricultural sectors of the economy increased by 311,000, with a projected increase of 205,000. Statistics on the labor market and consumer prices are of great importance for investors, since these are the two main indicators that the US Federal Reserve relies on when determining its further actions in monetary policy. Dow Jones The leading performer among the Dow Jones index components in today's trading was Intel Corporation, which gained 0.78 points or 2.95% to close at 27.22. JPMorgan Chase & Co rose 3.31 points or 2.54% to close at 133.65. The Travelers Companies Inc rose 1.76 points or 1.01% to close at 175.68. The least gainers were Caterpillar Inc shares, which lost 13.95 points or 5.79% to end the session at 227.01. Shares of Goldman Sachs Group Inc climbed 14.42 points or 4.22% to close at 327.67, while American Express Company shed 6.42 points or 3.73% to close at 165.70. S&P 500 Leading gainers among the S&P 500 index components in today's trading were Intel Corporation, which rose 2.95% to hit 27.22, JPMorgan Chase & Co, which gained 2.54% to close at 133.65, and also shares of AbbVie Inc, which rose 1.61% to close the session at 149.72. The least gainers were shares of Signature Bank, which fell 22.87% to close at 70.00. Shares of First Republic Bank lost 14.84% to end the session at 81.76. Charles Schwab Corp fell 11.69% to 58.70. NASDAQ  Leading gainers among the components of the NASDAQ Composite in today's trading were EUDA Health Holdings Ltd, which rose 54.20% to 2.02, Unicycive Therapeutics Inc, which gained 30.10% to close at 2.68. as well as shares of Cingulate Inc, which rose 25.00% to close the session at 1.85. Shares of Loyalty Ventures Inc became the least gainers, which decreased in price by 58.39%, closing at 0.24. Shares of Allbirds Inc lost 47.03% and ended the session at 1.25. Quotes of Cepton Inc decreased in price by 45.75% to 0.42. Numbers On the New York Stock Exchange, the number of securities that fell in price (2594) exceeded the number of those that closed in positive territory (463), while quotes of 75 shares remained virtually unchanged. On the NASDAQ stock exchange, 3,044 stocks fell, 595 rose, and 150 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 9.69% to 24.80, hitting a new monthly high. Gold Gold futures for April delivery added 2.08%, or 38.15, to $1.00 a troy ounce. In other commodities, WTI April futures rose 1.03%, or 0.78, to $76.50 a barrel. Futures for Brent crude for May delivery rose 1.21%, or 0.99, to $82.58 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.57% to hit 1.06, while USD/JPY shed 0.91% to hit 134.90. Futures on the USD index fell 0.67% to 104.60.   Relevance up to 03:00 2023-03-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315761
Australian dollar against US dollar - "It seems that the currency will soon hit a price above 0.68"

The AUD/USD Price Can Climb Up To 0.6730

InstaForex Analysis InstaForex Analysis 13.03.2023 08:00
The Australian dollar showed restraint on Friday, as the U.S. dollar fell 0.59% (USDX). This morning, the aussie is trying to grow as far as the technical factors allow it. Resistance is at 0.6640, the Marlin oscillator is rising ahead of the price and this boosts the chances of the price settling above this level. In case it succeeds, the price can climb up to 0.6730. But ideologically, the AUD/USD is still late with growth. And in today's Asian session, commodity prices fell, and Australian government bonds have barely made it out of the yield pit after a two-week decline from 3.73% to 3.15% (5-year bonds). On the four-hour chart, the price encountered resistance from the MACD and balance lines. Convergence with the oscillator is almost worked out, but the signal line is intensively growing. Therefore, I expect growth after AUD climbs above the MACD line at 0.6655. Nevertheless, this is still an alternative scenario, though there is still a high probability of its realization. As for the main scenario, I expect the price to settle below 0.6640 and fall to 0.6550. We're waiting for a resolution to this scenario Relevance up to 03:00 2023-03-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337350
Bank of England hikes rates and keeps options open for further increases

The GBP/USD Price Will Turn Down From The Intermediate Level Of 1.2060

InstaForex Analysis InstaForex Analysis 13.03.2023 08:03
On Friday, the pound rose by 108 points while the dollar weakened. This morning, it opened with a rising gap. This makes it difficult for quotes to rise to the target level of 1.2155. The signal line of the Marlin oscillator has shifted into the positive area and now it helps the price to increase even more. Resistance is the balance indicator line. Bearish factors are the stock market's decline, both on Friday and in today's Asian session, and attempts to restore the growth of the U.S. government bond yields. The four-hour chart indicates the probability that the price will turn down from the intermediate level of 1.2060, because it has not yet climbed above it. The impact of the high upper shadows can be downplayed by the chaotic nature of the current situation, since today's gap shows that there aren't many trading positions in the range of 1.2030/80, which means that they were closed on Friday, and this is already a speculative game. The Marlin oscillator is rising on the four-hour chart, but it will reverse downwards if the price starts to fall. The main criterion and confirmation of the reversal is when the price crosses the MACD line, and price falls below 1.1985. Let's wait.     Relevance up to 03:00 2023-03-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337352
Rates Spark: Nothing new on the dovish front

The EUR/USD Price Is Above The Target Level Of 1.0660

InstaForex Analysis InstaForex Analysis 13.03.2023 08:04
Friday's US jobs data, however downplayed by the business media, came out good. Non-farm payrolls data was better than expected: 311,000 vs 205,000. January's index was revised downwards to 504,000 from 517,000, but that's not a significant change. The unemployment rate rose from 3.4% to 3.6%, but the percentage of the economically active population rose from 62.4% to 62.5% and, importantly, average hourly earnings for the month rose 0.2%, indicating a still unsaturated labor market. Investors did lower the probability of a 0.50% rate hike at the next Federal Reserve meeting from 78% to 50% and the yield on 5-year government bonds fell from 4.19% to 3.97%, but in this situation, we consider the stock market as the main indicator of market sentiment and it fell by 1.45% (S&P 500), which means that strategic investors consider Friday's surge a temporary phenomenon and keep withdrawing from risk. In fact, we saw the shift of funds from stocks to bonds on Friday. Finally, the Consumer Price Index for February will be released tomorrow; the forecast suggests a monthly growth of 0.4% and the year-on-year decrease to 6.0% from January's 6.4%, which is still a big number and we will know how the FOMC members will take it very soon. On the daily chart, the price is above the target level of 1.0660, but the closing of the day will likely take place below it, since the day opened with a rising window, and it is not closed. The balance indicator line restrains price growth this morning. On the four-hour chart, the Marlin oscillator turns downwards, this is the first sign that the bulls are exhausted. The first stage of the reversal is when the price falls below 1.0660 and the subsequent consolidation under the lower level of the "window" at 1.0643. Then we are waiting for an attack on the MACD line near 1.0615. This is the main scenario. An alternative is surpassing today's high at 1.0703 and one more attempt to reach the target range at 1.0758/87.   Relevance up to 03:00 2023-03-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337354
Euro against US dollar and British pound - Technical Analysis - May 17th

The GBP/USD Pair Is Likely To Continue To Rise In The Next Few Hours

InstaForex Analysis InstaForex Analysis 13.03.2023 08:10
Early in the European session, the British pound is trading around 1.2071 above the 200 EMA above the 21 SMA. We can see that the GBP/USD pair opened this week's trade with a bullish gap. The market sentiment is bullish and is being supported by the 200 EMA. It is likely to continue to rise in the next few hours and reach the maximum of 1.2140, the level seen on February 21 and 28. This zone between the levels of 1.2140 -1.2161 (daily resistance_1) could act as a strong barrier for the British pound since in February, it acted as strong resistance twice. In case of a pullback towards 1.2140 - 1.2161, we could sell with targets of 1.2085 (3/8 Murray) and 1.2050 (200 EMA). If the British pound falls below the 200 EMA and trades on 4-hour charts below this level, we can expect it to fill the gap left around 1.2030 and reach support at 2/8 Murray at 1.19162. In the event that the British pound trades below 4/8 Murray located at 1.2207 or any technical rebound in this area, we could see a signal to sell. In this case, the pair could reach 1.2000 in the next few days and even could fall to 1.1840 (1/8 Murray).   Relevance up to 05:00 2023-03-18 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315773
US Flash, that is to say preliminary, PMI for April came in at a better-than-expected 50.4 versus a downwardly revised 49.2 in March and a forecast 49

Nonfarm Payrolls In The US Rose By 311k Last Month, Less Than The January's Print

Saxo Bank Saxo Bank 13.03.2023 08:14
Summary:  A slight recovery in sentiment was seen into the Monday open as US regulators stepped in to prevent further fallout from the SVB crisis and announced an emergency bank term funding program assuring SVB depositors they will be fully protected and have access to their money as the week begins. US jobs data on Friday was mixed, putting focus on the CPI this week, although the banking crisis reduces the case for a 50bps rate hike this month.   What’s happening in markets? US equites pulled back on Friday after the Silicon Valley Bank fuelled fear The futures turned green, indicating Monday could potentially see buying return. Market jitters were calmed after the Fed announced an emergency bank term funding program, with SVB depositors to have access to all money from Monday. On Friday though, markets were hurting, SVB parent, SVB Financial Group’s (SIVB:xnas) demise was felt through markets, triggering a sharp sell-off in US equities with the Nasdaq 100 and S&P500 falling 1.4% on Friday and wiping off 3.8% and 4.6% over the week. The banking sector was hit hard, as investors worried about the risk of contagion after 16th largest bank failed, which lead to selling in other banks, and deposit withdrawals – with American losing faith in the banking system. The KBW Bank Index shed 3.9% on Friday, and 15.7% over the week. PacWest Bancorp (PACW:xnas) tumbled 37.9% on Friday and a massive 53.7% since Thursday. US equity futures rallied on Monday Asian hours after the Fed assured depositors in the Silicon Valley Bank they will be fully protected. Treasury yields plunged on safe-haven bids amid banking woes and Fed speculation Safe-haven demand and reduced likelihood of aggressive rate hikes drove down Treasury yields. Meanwhile, asset markets were jolted by the Silicon Valley Bank incident, leading to a surge in safe-haven buying of Treasuries. Prices of Treasuries climbed, and yields fell sharply, with the front end and belly of the curve seeing the best performance. Traders are now speculating whether the contagion of the crisis to other banks, and the widening of credit spreads will sway the Fed in favor of keeping the next hike at a modest 25bps, or perhaps even pausing earlier than expected. These speculations are supported by the slight 0.2% month-over-month or 4.6% year-over-year increase in average hourly earnings, and an increase in the labor force participation rate to 62.5% in February. Interest rates implied by SOFR contracts fell significantly, with June, September, and December 2023 plunging 28 basis points, 44.5 basis points, and 52.5 basis points, respectively. This brought the terminal down to 5.29% in June 2023, from 5.70% in September 2023 just two days earlier on Wednesday. The 2-year Treasury yield tumbled an astounding 28 basis points to 4.59%, while the 10-year yield dropped by 20 basis points to 3.70%. As a result, the 2-10-year yield curve steepened by almost 7 basis points to 89 basis points on Friday. Given the ongoing banking crisis, Treasuries are likely to remain in high demand. Hang Seng Index and China’s CSI 300 plummeted amid concerns about consumption recovery in China The Hang Seng Index and CSI300 experienced sharp declines on Friday, with losses of 3% and 1.3% respectively, resulting in weekly losses of 6.1% and 4%. This was attributed to investors selling China internet and consumer names after JD.COM's (09618:xhkg) downbeat comments on consumer spending prospects in China, causing JD.Com to plummet by 11.5%. The Hang Seng TECH Index also dropped significantly by 3.8%. Auto stocks, particularly BYD (01211:xhkg) and Great Wall Motor (02333:xhkg) took a major hit, with declines of 8.1% and 6.2% respectively, due to an intensification of price war prompted by Dongfeng (00489:xhkg) and other Chinese automakers' price cuts. Auto names were among the largest losers in A-shares on Friday. The tech war involving semiconductors may extend beyond advanced equipment to materials, leading to concerns about Japan restricting the export of crucial chemicals like photoresists to China. In addition, the turmoil in U.S. banking stocks overnight further weighed on sentiment. Australian equities (ASXSP200.I) somewhat unscathed following global rout. Gold miners charge After the demise of the US’ 16th largest bank, SVB with other US banks in jeopardy, Australia’s market has so far outperformed global equity markets, falling 1.9% last week, while the S&P500  shed 4.6% and Hong Kong’s Heng Seng slumped 6.1%. The prudential regulation over Australia’s banks is keeping ASX listed banks relativity unscathed, however smaller non-financial companies with less financial strength are being penalised. The worst performing ASX200 stocks today are BrainChip, and Lake Resources, both down over 4.6%. While capturing upside and lot of bids are, gold miners, with Capricorn Metals, Ramelius Resources and Regis Resources all up 7-9%. FX: Dollar on the backfoot on chatter of SVB bailout After slumping to fresh lows on Friday to get in close sights of 104, the US dollar reversed higher into Friday’s close but gains were short-lived as the announcement on a potential backstop funding from the Feb for distressed bank SVB brought risk trades back to the table. AUDUSD pushed back above 0.66 to highs of 0.6647 in early trading amid thin liquidity and a recovery in sentiment. NZDUSD also took another look at 200DMA at 0.6166. GBPUSD testing 1.21 handle again with this week’s focus being the Spring budget and the labor market data. ECB’s hike remains in focus, and EURUSD taking another hit at 1.07 as risk sentiment improved this morning in Asia. Crude oil prices jumped higher on Friday but closed with a weekly loss Fears of further monetary tightening, coupled with risks of a financial contagion, raised concerns of a demand weakness and saw crude oil prices slide lower last week. The weak sentiment was compounded by high crude oil inventories in the US. This dominant narrative continues to overshadow signs of stronger demand in China. Some respite was however seen on Friday and into early Asian trading on Monday as US regulators announced measures to protect depositors and let them withdraw money from SVB starting Monday. WTI prices touched $77 from lows of sub-75 on Friday and Brent was above $83 from sub-81 levels earlier. The spread between Brent and Dubai narrowed to USD2.70/bbl, as Dubai crude gained against the global benchmark, suggesting robust Asian demand. Gold making a fresh stride higher despite easing banking sector crisis concerns Gold prices saw a big jump on Friday and gains were extended further on Monday morning in the Asian session as a mixed US jobs report and risks of a contagion in the banking sector spooked investors and prompted safe-haven demand. Expectations of a rapid Fed tightening also eased, and Fed swaps fully priced in a 25bps rate cut by year-end. This, along with rising inflation (breakeven) expectations and a sharp drop in yields, has made gold attractive for investors with precious metal charging higher and breaking above key resistances. Gold prices touched highs of $1890 this morning before easing slightly.   What to consider? SVB fallout spreads; Fed announces plans to fully protect Silicon Value Bank and potentially Signature Bank After the demise of the US’ 16th largest bank, SVB, on Friday and its takeover by the FDIC – which marked the largest bank failure since the 2008 financial crisis, the fallout spread. Regulators took control of another bank, Signature Bank. Unlike SVB which supports venture capital firms, Signature bank specialises in providing banking to law firms. The Fed stepped in and announced an emergency bank term funding program, assuring SVB depositors they will be fully protected and have access to their money from Monday, with agencies said to enact a similar program for Signature Bank. All this follows the Venture Capital community urging startups to withdraw funds, which led to civilians taking their money out of banks. Regulators are seeking buyers for SVB. Meanwhile, the Fed said it’s providing additional funding to banks. US nonfarm payrolls remained elevated in February Nonfarm payrolls in the US rose by 311k last month, less than the January's blowout print of 504k (revised down from an initially stated 517k) but still remaining elevated and above consensus expectations of 215k. While the headline continued to reaffirm a tight labor market, other indicators from the report were rather weak. Average hourly earnings rose +0.2% MoM in February, lower than the expected and last month’s +0.3% MoM. The annual rate of averag hourly earnings rose from +4.4% in January to +4.6% YoY, a touch short of the 4.7% that the market was expecting. The unemployment also picked up by 0.2% pts to 3.6% against market expectations of no change, likely as participation rose 0.1% pt to 62.5%. The data remained short of cementing a 50bps rate hike possibility for March, also given the recent concerns on the US banking sector from the SVB collapse. Focus now turns to CPI release on Tuesday to further shape Fed expectations. China's February aggregate financing surged beyond expectations with 9.9% Y/Y Growth China's aggregate financing growth in February was much better than expected, reaching RMB 3160 billion, far above the RMB2300 consensus estimate. The outstanding aggregate financing growth also accelerated to 9.9% year-on-year (Y/Y) in February, up from 9.4% Y/Y in January. Furthermore, M2 increased at a faster pace in February, growing 12.9% Y/Y, up from January's 12.6%. The surge in outstanding RMB loans played a major role in driving the credit growth, increasing by 11.6% Y/Y in February, compared to January's 11.3% Y/Y. Corporate loans were the primary driver, while household loans remained weak. Bank of Japan’s Kuroda ends term without sparks The Bank of Japan kept its policy unchanged on Friday at Governor Kuroda’s last meeting of his decade-long tenure. The target band for the 10-year JGB yield was kept unchanged at around 0%, with an upper limit of 0.50% after being raised in December. The BOJ held its short-term rate at -0.1%. Despite some expectations of another tweak, the outcome carried his usual dovish tone, ensuring a smooth handover to incoming Governor Kazuo Ueda who has conveyed policy continuity in his first remarks after being nominated. Incoming data will be key to watch for what tweaks the next governor Ueda can bring, but near-term focus shifts to US data on inflation, as well as the extent of fallout in the US banking sector as the market appears to be a panic mode after SVB’s collapse which may bring some safe haven flows to the yen.   For a global look at markets – tune into our Podcast. Source: Global Market Quick Take: Asia – March 13, 2023 | Saxo Group (home.saxo) 
Forex: Euro against US dollar - forecast on April 24th, 2023

The Last Situation In EUR/USD Pair Will Continue Today

Jakub Novak Jakub Novak 13.03.2023 08:30
Analysis of transactions and tips for trading EUR/USD The pair tested 1.0604 at a time when the MACD line was just starting to move above zero, which was a good reason to buy. It resulted in a price increase of as much as 100 pips. No other market signal appeared for the rest of the day. Germany's CPI data was ignored by markets, while a sharp rise in US unemployment rate led to a weakening of dollar on Friday afternoon. Most likely, the situation in EUR/USD will continue today as there are no important statistics scheduled to be released today. Market players should stick to trading further along the trend, which is now on the side of buyers. The Eurogroup meeting and speech from Bundesbank representatives will be of little interest. For long positions: Buy euro when the quote reaches 1.0734 (green line on the chart) and take profit at the price of 1.0775. Growth is possible, but it will only be amid disappointing US reports and emerging banking sector problems. Nevertheless, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0702, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0734 and 1.0775. For short positions: Sell euro when the quote reaches 1.0702 (red line on the chart) and take profit at the price of 1.0671. Pressure will return if the attempt to consolidate at the monthly highs fail. However, make sure that when selling, the MACD line is under zero or is starting to move down from it. Euro can also be sold at 1.0734, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0702 and 1.0671. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2023-03-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337374
Decline of Canadian retails sales plays in favour of holding the rates by Bank of Canada

The Better-Than-Expected US Nonfarm Payrolls (NFP) Join The Bank Of Canada’s (BoC) Dovish Play To Weigh On The Loonie Prices

TeleTrade Comments TeleTrade Comments 13.03.2023 08:31
USD/CAD takes offers to extend pullback from five-month high. US regulators unveil plans to tame SVB, Signature Bank inflicted risk. Fed rate hike expectations ease amid looming fears on US banks. Oil price cheers softer US Dollar with eyes on EIA, OPEC monthly reports. USD/CAD stands on slippery grounds, declining nearly 0.80% intraday to 1.3720 heading into Monday’s European session. In doing so, the Loonie pair sellers cheer the broad US Dollar weakness, as well as the recent recovery in prices of Crude Oil, Canada’s key export item. US Dollar Index (DXY) drops to the lowest levels in a month, down 0.80% near 103.80, as risk-on mood joins easing hawkish Fed bets to drown the greenback’s gauge versus the six major currencies. On the other hand, WTI crude oil rises for the second consecutive day, up 0.50% intraday near $77.00 at the latest. After witnessing the stock and bond market rout on Friday, the market sentiment improved as the US Treasury Department, Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) took joint actions to tame the risks emanating from the Silicon Valley Bank (SVB) and Signature Bank during the weekend.  “All depositors of Silicon Valley Bank and Signature Bank will be fully protected,” said the authorities in a statement released afterward. While reacting to the US regulators’ actions, US President Joe Biden said, “American people and American businesses can have confidence that their bank deposits will be there when they need them.” It should be noted, however, that the latest fallout of the SVB and Signature Bank flagged fragile conditions of the US bank, which in turn pushed back hopes of more rate hikes from the US Federal Reserve (Fed). With this in mind, Goldman Sachs expects to rate hike in March while the Fed Fund Futures also cut previously upbeat odds favoring a 0.50% rate lift in the Fed rate in March. Alternatively, China’s dislike for the US interference in Taiwan matters and the better-than-expected US Nonfarm Payrolls (NFP) join the Bank of Canada’s (BoC) dovish play to weigh on the Loonie prices. On Friday, US Nonfarm Payrolls (NFP) grew more than 205K expected to 311K in February, versus 504K (revised), while the Unemployment Rate rose to 3.6% for the said month compared to 3.4% expected and prior. Further, the Average Hourly Earnings rose on YoY but eased on monthly basis for February whereas the Labor Force Participation increased during the stated month. At home, Canada’s Net Change in Employment rose to 21.8K versus 10K market forecasts and 150K prior while the Unemployment Rate remained unchanged at 5.0% compared to 5.1% expected. Looking ahead, Tuesday’s US Consumer Price Index (CPI) for February to direct immediate market moves. Following that, the Retail Sales and preliminary readings of the Michigan Consumer Sentiment Index for March, up for publishing on Wednesday and Friday, will be crucial for clear directions of the USD/CAD traders. Technical analysis Friday’s Doji at multi-day high joins overbought RSI to favor USD/CAD pullback towards the late 2022 peak surrounding the 1.3700 round figure.
InstaForex's Ralph Shedler talks Euro against Japanese yen

Further Downside Movement Of The USD/JPY Pair Is Expected

TeleTrade Comments TeleTrade Comments 13.03.2023 08:36
USD/JPY holds lower ground after refreshing a one-month bottom. U-turn from the DMAs, rejection of bullish channel and the strongest bearish MACD signals since early February to favor sellers. Early February tops may test Yen pair bears ahead of 50-SMA. Buyers remain off the table unless witnessing a clear break of 200-DMA. USD/JPY bears keep the reins for the third consecutive day heading into Monday’s European session. In doing so, the Yen pair seesaws around the lowest levels in one month, marked earlier in the day, as sellers poke the 134.00 threshold. A clear U-turn from the 200-DMA, as well as a downside break of the 100-DMA, joins a sustained downside break of a five-week-old bullish channel to favor USD/JPY sellers. On the same line could be the strongest bearish MACD signals since early December 2022. With this, the Yen pair appears all set to slump toward the 50-DMA support of 132.50. However, the early February swing highs near 132.90 seem to prod the USD/JPY sellers of late. In a case where the USD/JPY price remains bearish past the 50-DMA, the 130.00 round figure and the previous monthly low surrounding 128.00 will be in the spotlight. On the flip side, a convergence of the 100-DMA and the aforementioned channel’s lower line, close to 135.85, holds the key to USD/JPY pair’s recovery. Even so, the 200-DMA can test the upside momentum near 137.50 before directing prices towards the aforementioned channel’s top line, close to 139.50 at the latest. USD/JPY: Daily chart Trend: Further downside expected
The USD/INR Pair Traders Could Be The Cautious Mood Ahead Of The Key Inflation Numbers For India And The US

The USD/INR Pair Traders Could Be The Cautious Mood Ahead Of The Key Inflation Numbers For India And The US

TeleTrade Comments TeleTrade Comments 13.03.2023 08:39
USD/INR keeps the previous day’s U-turn from key DMAs to refresh multi-day lows, rebounds from intraday low of late. Cautious mood ahead of India CPI, mixed sentiment in Asia probes Rupee buyers. US Dollar bears the burden of SVB-inspired risk-on mood, receding hawkish Fed bets. USD/INR picks up bids to pare intraday losses around 81.95 during early Monday morning in Europe. In doing so, the Indian Rupee (INR) pair struggles to cheer the US Dollar’s weakness amid mixed concerns in Asia, as well as the broad US Dollar weakness. Also challenging the pair traders could be the cautious mood ahead of the key inflation numbers for India and the US. Asia-Pacific equities trade mixed as they’re yet to overcome Friday’s bond and stock market rout, as well as bear the burden of China-linked fears. A new term for China’s President Xi Jinping keeps the Sino-American tension on the table as he said earlier on Monday that they must resolutely oppose the interference of external forces, 'split' of Taiwan. It’s worth mentioning that Wall Street saw the red on Friday while the US bond yields also dropped the most in a month amid fears emanating from the Silicon Valley Bank (SVB) and Signature Bank fallouts. However, the US Treasury Department, Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) took joint actions to tame the risks during the weekend.  While reacting to the US regulators’ actions, US President Joe Biden said, “American people and American businesses can have confidence that their bank deposits will be there when they need them.” Amid these plays, S&P 500 Futures bounced off a 2.5-month low, up nearly 1.60% around 3,960 by the press time, whereas the US Treasury bond yields reverse the early-day rebound from monthly low amid fresh challenges for the hawkish Fed bets. That said, the fallout of the SVB and Signature Bank flagged fragile conditions of the US banks, which in turn pushed back hopes of more rate hikes from the US Federal Reserve (Fed). With this in mind, Goldman Sachs expects to rate hike in March while the Fed Fund Futures also cut previously upbeat odds favoring a 0.50% rate lift in the Fed rate in March. Hence, the risk-on mood underpins the US Dollar’s weakness but the cautious mood ahead of India’s key inflation data and mixed sentiment in Asia challenges the USD/INR bears. Looking forward, India Consumer Price Index (CPI) for February precedes Tuesday’s WPI Inflation numbers and the US CPI for the said month to direct short-term USD/INR moves. In a case where the schedule data portray inflation fears, the US Dollar may pare some of its latest losses, which in turn probes the pair bears. Technical analysis USD/INR bears keep the reins unless witnessing a clear upside break of a convergence of the 50-DMA and 100-DMA, around 82.10-15 at the latest.
Analysis Of The AUD/USD Pair By Markets Strategist Quek Ser Leang And Senior FX Strategist Peter Chia

Analysis Of The AUD/USD Pair By Markets Strategist Quek Ser Leang And Senior FX Strategist Peter Chia

TeleTrade Comments TeleTrade Comments 13.03.2023 08:44
In the opinion of Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia, a potential drop to the 0.6500 region in AUD/USD seems to be losing traction in the short term. Key Quotes 24-hour view: “Last Friday, we held the view that AUD ‘is likely to trade with a downward bias but 0.6560 is expected to offer strong support’. AUD subsequently dropped to 0.6565 before rebounding to a high of 0.6641. While there is no significant improvement in upward momentum, AUD could advance further to 0.6660. The strong resistance at 0.6700 is unlikely to come under threat. On the downside, a breach of 0.6580 (minor support is at 0.6600) would indicate that AUD is unlikely to advance further.” Next 1-3 weeks: “In our most recent narrative from last Wednesday (08 Mar, spot at 0.6585), we highlighted that AUD ‘is likely to weaken further but any weakness is likely to be at a slower pace’. We added, ‘The major support at 0.6500 may not come into view so soon’. Last Friday, AUD dipped to 0.6565 before rebounding sharply. Downward pressure is beginning to ease and the odds of AUD dropping to 0.6500 have diminished. However, only a break of 0.6700 (no change in ‘strong resistance’ level) would indicate that AUD has moved into a consolidation phase.”
According to InstaForex analyst, demand for British pound may not increase soon

The GBP/USD Pair Shot Up Again As Demand For Dollar Fell

Jakub Novak Jakub Novak 13.03.2023 08:51
Analysis of transactions and tips for trading GBP/USD The pair tested 1.1932 at a time when the MACD line was just starting to move above zero, which was a good reason to buy. It resulted in a price increase of about 50 pips. No other market signal appeared for the rest of the day. A rise in UK GDP led to a price increase in GBP/USD. However, data on the UK industrial production and manufacturing output were slightly disappointing, so pressure returned. Sometime later, the pair shot up again as demand for dollar fell amid a disappointing US unemployment report. There are no statistics scheduled to be released today, so market players will have to rely purely on technical analysis and short-term levels. For long positions: Buy pound when the quote reaches 1.2126 (green line on the chart) and take profit at the price of 1.2175 (thicker green line on the chart). Growth is possible as part of the newly formed trend. However, when buying, traders should make sure that the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.2092, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2126 and 1.2175. For short positions: Sell pound when the quote reaches 1.2092 (red line on the chart) and take profit at the price of 1.2057. Pressure may return if there is no bullish activity at the monthly highs. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2126, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2092 and 1.2057. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2023-03-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337376
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

FX Daily: Policymakers move to limit SVB fallout

ING Economics ING Economics 13.03.2023 08:59
Over the weekend US policymakers have taken measures to restore confidence and halt the deposit run in parts of the US banking system. Expect a nervous market to closely track US banking stocks today. The dramatic re-pricing of the Fed curve and the bullish disinversion of the US curve is a dollar negative. Expects the Swiss franc and Japanese yen to stay bid USD: Policymakers move swiftly to restore confidence US policymakers have acted quickly to restore confidence in the US banking system after Friday's second-largest bank failure in history. The Federal Reserve, US Treasury, and Federal Deposit Insurance Corporation have together announced two key measures. The first is that all uninsured depositors of SVB will be made whole.  This addresses the fear that uninsured depositors (in this case in the venture capital/tech sector) would lose deposits and would pull funds from other banks with high ratios of uninsured deposits (reports suggest 96% of SVB's deposits were uninsured). The second key measure has been the Fed announcing a new liquidity programme - the Bank Term Funding Program (BTFP). This will allow eligible financial institutions to access dollar liquidity in return placing US Treasuries, Agencies, or Mortgage-Backed Securities as collateral. Importantly the collateral values will be taken at par, meaning no write-downs. This addresses SVB's problem of the need to meet deposit outflows with sales of securities - a move that forced SVB to realise losses and burn through equity capital. Read our article for more. For today, investors will watch US banking stocks carefully to gauge whether the above measures have been enough to restore confidence. Worryingly over the weekend another bank, Signature Bank in New York, was also taken into administration by US authorities. One clear read for the market is that the Fed is not going to be able to deliver a 50bp hike on 22 March if, at the same time, it is introducing new liquidity measures for the US banking system. The market has now scaled back expectations for this month's FOMC to +25bp, with some high-profile names now calling unchanged rates. Indeed, the pricing of the December 2023 FOMC meeting is now 75bp lower than in the middle of last week. For FX this means the following. The first major US financial crisis since 2008 has seen a significant bullish disinversion of the US yield curve - which is dollar bearish. We have been arguing for some that time that bullish disinversion would be required to send the dollar lower - but had felt that it would be US disinflation or weak activity data - not a financial crisis - which would be the trigger. Expect investors to remain wary this week and continue to prefer the CHF and JPY over the dollar. In a way, we are going back to former periods of risk aversion - when selling the dollar and buying US two-year Treasury notes was the key strategy in a crisis. DXY to probably trade alongside the US KBW banking index - particularly the Regional banking Index - today. Risks lie to the 103.50 area and potentially 102.50 this week. Chris Turner  EUR: Spreads narrow markedly in favour of EUR/USD The dramatic re-pricing of the Fed policy curve has seen two-year EUR:USD swap rate differentials narrow inside 100bp - the narrowest since October 2021. This is EUR/USD positive. Unless there is a massive rally in US banking stocks today which suggested that US authorities had been incredibly successful in putting the genie of US banking sector risk back in the bottle, we would say EUR/USD is biased to the 1.0780/1.0800 area. On Thursday this week, the European Central Bank policy meeting will be challenging. Presumably, it will have to push ahead with a 50bp hike for fear of adding even more volatility to the markets. Chris Turner GBP: Bailouts and budgets Sterling did a lot better than we were thinking on Friday. We very much struggle to buy into sterling as a safe-haven currency, given the UK's large current account deficit and large financial sector exposure. Instead, we suspect deleveraging and the unwinding of short sterling positioning played a role. Today the focus will be on the UK's support of the tech sector in response to SVB's UK arm. As in the US, depositors in the UK are being made whole and the government is looking to address the working capital needs of those exposed. The market still expects the Bank of England to push ahead with a 25bp hike on 23 March. This still may be at risk of being priced out, given the BoE was not far away from a pause anyway. We could easily see EUR/GBP retracing back up to 0.8900, while we would not chase GBP/USD over 1.22. Chris Turner CEE: Forint and koruna should reverse losses The second half of the month in the Central and Eastern Europe (CEE) region traditionally offers a weaker economic calendar and given the global story, we assume that regional factors will not be the driver this week. Romania's inflation for February was released this morning and rose by 15.52% year-on-year, slightly above market expectations. Tomorrow, we will see in Romania, industrial production and on Wednesday we will see labour market data. Also, on Wednesday we will see this week's highlight, Poland's inflation number. We expect an increase from 17.4% to 18.7% YoY, above market expectations, which should be the peak inflation this year in our view. However, the number has a lot of uncertainty due to the consumer basket weight update. Then, on Thursday, we will see the current account results across the region and on Friday, core inflation will be published in Poland.  In FX markets, given the global story, it will be difficult for the CEE region to find its way. However, risk aversion seems to be declining and a higher EUR/USD should help the region correct some of the losses from the end of the last week. Moreover, in the case of the Czech koruna and Hungarian forint, which faced the biggest losses, the biggest jump in gas prices since June last year played a role as well, making room for new gains. In our view, these two currencies should see a positive start to the week. In the case of the koruna, however, the falling interest rate differential will play against it. Thus, we expect the koruna to move lower to 23.60 EUR/CZK and for the forint to 380 EUR/HUF.  Frantisek Taborsky  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
New Zealand dollar against US dollar decreased by 1.07% yesterday

The Reserve Bank Of New Zealand Continued To Delay Their Dovish Pivot

TeleTrade Comments TeleTrade Comments 13.03.2023 09:03
The Reserve Bank of New Zealand (RBNZ) could hike rates less than expected but the NZD/USD pair is still seen higher over the coming months, economists at ING report.  RBNZ pivot may not come in April “The RBNZ continued to delay their dovish pivot. There is a good probability that April won’t see a pivot either. What will tilt the balance on the dovish side for the RBNZ, in our view, will be the disinflation process (which may well start earlier than they are projecting) and/or property market weakness rather than well-telegraphed evidence of a recessionary environment.” “We expect the RBNZ to end up short of their projected 5.50% peak rate, but that should not prevent NZD to touch 0.66 in 2H23.” “NZD/USD – 1M 0.62 3M 0.64 6M 0.66 12M 0.67”
Japanese yen increased by over 0.5% on Friday. Japanese monetary policy may change soon

The USD/JPY Pair Has The Potential Upside Continuation

Peter Jacimovic Peter Jacimovic 13.03.2023 10:11
Technical analysis: USD/JPY has been trading downside on Friday and I see that key Fibonacci support Agreement zone at 133.60 held this morning, which is good sign for the potential upside continuation. Due to the strong bullish trend on longer frames and test-reject of the key Fibonacci support zone, I see potential for the further upside continuation.... Upside objectives are set at 135.80, 137 and 137.80 Stochastic and MACD oscillators are showing bullish divergence and fresh bull cross, which is good sign for the further upside movement. Key support is set at the 133.60   Relevance up to 09:00 2023-03-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315818
Analysis Of The USD/TRY Pair: The Turkish Lira Weakness Has Persisted

Analysis Of The USD/TRY Pair: The Turkish Lira Weakness Has Persisted

TeleTrade Comments TeleTrade Comments 13.03.2023 10:18
The Turkish Lira is deceptively stable on a day-by-day basis. But, the slow and steady depreciation trend very much persists in the background, Tatha Ghose, FX Analyst at Commerzbank, reports. Slow, creeping Lira depreciation takes its toll “As Lira weakness has persisted despite the recent ‘photo ops’ of CBT receiving $5 bn deposit from the Saudi government, fresh tightening of restrictions were deemed necessary. CBT issued guidance to all banks last week to widen their spreads on retail Dollar purchases which tantamounts to some ad hoc price control.” “Weekly regulator data showed that Turkish banks are running a net deficit FX position amounting to 2.1% (of equity) for state banks and 1.3% deficit for the sector, overall. In other words, they will look to buy FX at some point.”  “An ad hoc price control has little potential to stop the relentless depreciation trend in the background, let alone address any underlying economic imbalance.”  
Inflation Numbers Signal Potential Pause in Fed Rate Hikes Amid Softening Categories

US regulators closed Signature Bank, HSBC has announced to acquire SVB’s UK

Saxo Bank Saxo Bank 13.03.2023 10:23
Summary:  US equity futures are rallying, the dollar is lower, and Treasury yields have extended their declines following a busy weekend which resulted in regulators backstopping uninsured bank deposits at SVB Financial and Signature Bank. Traders have dialed back Fed rate-hike bets to just one while the yield curve has flattened as bank deposits are being converted to short maturity bonds. Gold jumped in response to these developments but whether the overall improved risk appetite can be maintained remains to be seen, and for this we need to watch credit spreads and default swaps. What is our trading focus? US equities (US500.I and USNAS100.I): be wary of the short-term celebration A busy weekend in the US for regulators have ended with a backstop of all insured and uninsured deposits of SVB Financial and Signature Bank including a new “Bank Term Funding Program” that will offer 1-year loans to banks on easier terms than normal. The Fed is also relaxing terms for lending through its discount window. US equity futures are rallying this morning with S&P 500 futures up 1.4% trading around the 3,955 level (just above the 200-day moving average), but our stance is that investors should be extremely cautious of celebrating too early. The lessons from the Great Financial Crisis and the Euro Crisis are that the early cracks and the first rescue attempt by regulators are often not enough as these events to not happen in vacuum. At this point we simply do not have enough information to guess the secondary effects from this event so investors should remain cautious. Investors should monitor money market spreads, yield curve shape, flows in USD etc., instead of equities this week for information what is happening in the system. Chinese equities (HK50.I and 02846:xhkg): Rally as US backstops depositors Hong Kong and Chinese stocks rallied as U.S. regulators rolled out plans to prevent the woes in Silicon Valley Bank and Signature Bank to turn into systemic risks. Hang Seng Index jumped 1.8% and CSI300 rallied 0.6%. China’s Two Sessions concluded this morning. President Xi secured a third term and his ally Li Qiang took the position of Premier, both being widely expected. The People’s Bank of China’s Yi Qang unexpectedly remains as the central bank’s governor. Nonetheless, his appointment is likely to be transitory pending the establishment of the National Financial Supervision Bureau. Energy, consumer, and internet stocks led the advance of the Hang Seng Index. In A-shares, SOE telcos outperformed. Belt-and-Road-Initiative-related stocks were well bid. FX: Dollar on the backfoot as Fed rate hike expectations recede on financial risks The dollar trades sharply lower following the Sunday announcement from the US authorities that it will backstop bank deposits to avert a deepening crisis after the SVB collapse. With short-end US yields collapsing and the market pricing just one rate hike before a December cut, the dollar index has dropped to a near a one-month low while the euro after finding firm support around €1.035 last week has rallied back above €1.07. AUDUSD pushed back above 0.66 to highs of 0.6672 in Asian session amid a recovery in sentiment. NZDUSD also pierced above the 200DMA to reach 0.62. GBPUSD rose above the 1.21 handle again with this week’s focus being the Spring budget and the labor market data. ECB’s hike remains in focus, and EURUSD taking another look above 1.07 as risk sentiment improved this morning in Asia.  Crude oil prices bounce as risk sentiment improves but economic outlook still weighing Crude oil prices continue to ebb and flow with the general level of risk sentiment and prices are higher overnight after US authorities stepped in over the weekend to restrain the SVB contagion. The result being a commodity supportive drop in the dollar as interest rates collapse and rate hikes are being priced out of the market. However, the risk of a US recession has strengthened on the back of these developments and with that in mind the short-term outlook points to continued range bound trading. Meanwhile, the spread between Brent and Dubai narrowed to USD2.70/bbl, as Dubai crude gained against the global benchmark, suggesting robust Asian demand. Both Brent and WTI will be facing resistance at their 21- and 50-DMA levels, both currently meeting at 83.75 and 77.70 respectively. Also, in focus this week are monthly oil market reports from OPEC and IEA Gold making a fresh stride higher despite easing banking sector crisis concerns Gold together with US government bonds have seen strong safe-haven demand since Friday as the SVB fallout has led to concerns about contagion in the banking sector. Two of gold’s main engines, the dollar and treasury yields have both seen a sharp drop since Friday and together with technical levels being broken and hedge funds holding a much-reduced long position, the market briefly managed to touch $1890 overnight. Despite the Sunday announcement from the US authorities, gold will likely benefit from continued worries about the financial system, increased recession worries and a swap market now pricing in just one rate hike ahead of a December cut. Support at $1871 and $1858 while a break above $1900 is needed to signal a reversal of the February correction. Treasury yields plunged on safe-haven bids amid banking woes and Fed speculation The Silicon Valley Bank Incident has since Friday driven continued safe-haven demand for bonds while the swap market is now pricing in just one more 25 bps rate hike, down from four since Thursday, with the first cut now priced in for December as recession worries and financial stability takes centre stage.  Prices of Treasuries climbed, and yields fell sharply, with the 2-year yield falling to 4.4% after briefly trading above 5% last week. Traders are now speculating whether the contagion of the crisis to other banks, and the widening of credit spreads will sway the Fed in favour of keeping the next hike at a modest 25bps, or even pausing earlier than expected. These speculations are supported by the slight 0.2% month-over-month or 4.6% year-over-year increase in average hourly earnings, and an increase in the labor force participation rate to 62.5% in February. Given the package rolled out by the regulators will backstop depositors but not unsecured creditors and the Fed may downshift, the front end of the Treasury curve is likely to remain in high demand. What is going on? US authorities step in to restrain the SVB contagion – what to watch from here? The US authorities have stepped in with a liquidity backstop of uninsured deposits and announced a new lending program for banks to prevent the risks of contagion from the collapse of Silicon Valley Bank (SVB) on Friday. Fed pause bets for March are increasing, but the authorities’ response on containing the financial risks suggests that the room to fight against inflation has been maintained. Risks to inflation also tilt further to the upside with the added liquidity measures, and the long-run impact on US tech sector innovation will remain key to consider in portfolios. Read more here. HSBC acquires SVB’s UK unit HSBC has announced to acquire SVB’s UK unit after meetings over the weekend highlighted the importance of SVB UK in relation to the UK’s VC and startup ecosystem risking wider economic implications if a plan to safeguard deposits was not found. Signature Bank closed by US regulators Yesterday, US regulators closed Signature Bank which was another smaller US bank that came under pressure Thursday and Friday last week. The bank is less connected to the startup ecosystem but has connections to the cryptocurrency industry which was rattled with the liquidation of Silvergate Capital last week. Signature Bank’s insured and uninsured deposits will be accessible to customers on the same basis and under the emergency process as with SVB Financial. ECB monetary policy meeting on Thursday There is little doubt the ECB will hike interest rates by 50-basis point this week, to 3 %. The uncertainty about the magnitude of the monetary policy tightening beyond the March meeting is high, however. Our baseline is that the ECB will certainly signal another 50-basis point hike in May and give no real guidance after that. There is another possibility: the ECB could confirm it will continue hiking rates by 50-basis point in the coming meetings and could open the door to a faster reduction of holdings after June. This would be a hawkish scenario, in theory good for the euro. But we think the likelihood it will happen is small. Ahead of Thursday's meeting, the money market forecasts that the terminal rate in the eurozone will be slightly above 4 %. Nomura is currently the most hawkish bank. Its economists call for 50-basis point hikes in March, May, June followed by 25-basis points in July, leaving the terminal rate at 4.25 %. US nonfarm payrolls remained elevated in February Nonfarm payrolls in the US rose by 311k last month, less than the January's blowout print of 504k (revised down from an initially stated 517k) but remaining elevated and above consensus expectations of 215k. While the headline continued to reaffirm a tight labor market, other indicators from the report were weak. Average hourly earnings rose +0.2% MoM in February, lower than the expected and last month’s +0.3% MoM. The annual rate of average hourly earnings rose from +4.4% in January to +4.6% YoY, a touch short of the 4.7% that the market was expecting. The unemployment also picked up by 0.2% pts to 3.6% against market expectations of no change, as participation rose 0.1% pt to 62.5%. The data remained short of cementing a 50bps rate hike possibility for March, also given the recent concerns on the US banking sector from the SVB collapse. Focus now turns to CPI release on Tuesday to further shape Fed expectations. China's February aggregate financing surged beyond expectations with 9.9% y/y Growth China's aggregate financing growth in February was much better than expected, reaching RMB 3160 billion, far above the RMB2300 consensus estimate. The outstanding aggregate financing growth also accelerated to 9.9% year-on-year (Y/Y) in February, up from 9.4% Y/Y in January. Furthermore, M2 increased at a faster pace in February, growing 12.9% Y/Y, up from January's 12.6%. What are we watching next? US inflation figures Tomorrow, the first estimate of the US February CPI will be released followed on Wednesday by the February PPI. The CPI is certainly the most important data point to focus on this week. This is the latest major US data release before the FOMC March meeting of 21-22 March. The Cleveland Fed produces nowcasts of inflation based on recent publicly observable price moves. According to their latest forecast, the monthly inflation will come in at a similar level to January for February. If so, that is not encouraging. A 50-basis point interest rate hike is certainly not a done-deal in March. But this is a clear possibility. Credit and money markets Besides the focus on US inflation figures this week, we will be watching financial conditions in the financial markets with a key focus on credit and money market rates and spreads to gauge risks in the banking system. In addition, Bitcoin will be monitored for understanding risks in the wider cryptocurrency system as this part of the market is where the highest marginal risk-taking takes place. Finally , June and December Fed Funds Rate futures should be monitored for assessing the market’s pricing of monetary policy off this event. Earnings to watch This week’s key earnings are Volkswagen, BMW, Adobe, and FedEx with tomorrow’s focus on Volkswagen where everything is about the EV outlook as it is increasingly looking like VW is having difficulties to keep up with the production ramp up at Tesla and BYD. Analysts expect FY23 revenue growth of 2% y/y for Volkswagen which if realized will prove to low to satisfy investors when the leading EV-makers such as Tesla and BYD are growing much faster. Later this week we will focus on Adobe and FedEx. Tuesday: Foxconn, Volkswagen, Generali Wednesday: Constellation Software, BMW, E.ON, Ping An Insurance, Prudential, Inditex, Adobe, Lennar Thursday: Verbund, Rheinmetall, KE Holdings, Enel, FedEx, Dollar General Friday: Vonovia Economic calendar highlights for today (times GMT) No major releases today Source: Global Market Quick Take: Europe – March 13, 2023 | Saxo Group (home.saxo)
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The British Economy Is Looking Better Than Previously Expected

Marek Petkovich Marek Petkovich 13.03.2023 10:58
In Forex, it is not a frozen picture—static—that is important, but dynamics. How do investors see the economy? Does it meet their expectations? What difference does it make that Britain's GDP is still 0.2% below the pre-pandemic level, and the American counterpart has long exceeded it, if this factor has already been taken into account in GBPUSD quotes? Another thing is when the latest data show that the UK economy looks better than expected, and the labor market and the U.S. banking system are cooling down. Then it's time to buy the pound against the U.S. dollar. Due to the forecasts of the IMF, the Bank of England, and other reputable organizations, investors are used to seeing Britain in the black. Unlike other G7 countries, its economy has not returned to pre-pandemic levels. Along with the pandemic, it has taken hits from the armed conflict in Ukraine, the energy crisis, and Brexit. However, what once appeared to be a negative may end up as support. The agreement between London and Brussels on the terms of trade in Northern Ireland and the fall in gas prices in Europe by 90% from the peaks of summer 2022 have a stimulating effect on UK's GDP. Dynamics of G7 economies The figure rose 0.3% in January, exceeding Bloomberg's forecast, which along with accelerating business activity, allowed Prime Minister Rishi Sunak to declare that things were better than people had expected. That the basic fundamentals of the economy are strong. It remains to strengthen fiscal discipline, which Chancellor Jeremy Hunt is sure to do in an updated budget plan. Importantly, Britain is likely to avoid a recession, even though the Bank of England predicted a five-quarter recession. This allowed the futures market to raise the expected repo rate ceiling from 4.6% to 4.75%, which helped strengthen the sterling. The expected peak of the federal funds rate after the publication of statistics on the U.S. labor market for February and the announcement of the bankruptcy of the Silicon Valley Bank (SVB), on the contrary, fell sharply from 5.5% to 5%, which weakened the U.S. dollar. Despite the growth in employment by 311,000, the unemployment rate increased from 3.4% to 3.6%, and the growth rate of average wages slowed down to 0.2% MoM. Dynamics of U.S. Non-Farm Employment Thus, the British economy is looking better than previously expected, allowing investors to expect higher rates from the Bank of England. In contrast, the U.S. economy is not doing as well as expected based on January statistics. This may lead to a recession and a "dovish" reversal of the Fed. Divergences in economic growth and central bank monetary policy paint an optimistic future for the GBPUSD. Technically, on the daily chart of the pair, due to the implementation of the reversal patterns Three Indians and False breakout, conditions have been created for the recovery of the upward trend. While GBPUSD is holding above fair value at 1.202, the recommendation is to buy the pound in the direction of $1.235 and $1.26.   Relevance up to 08:00 2023-03-18 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337382
These findings of a review of the Reserve Bank of Australia may surprise you!

AUD/USD Pair Tested 0.6639 In Resistance Earlier In The Day

Kenny Fisher Kenny Fisher 13.03.2023 12:56
The Australian dollar is considerably higher on Monday. In the European session, AUD/USD is trading at 0.6617, up 0.58%. Earlier in the day, AUD/USD rose 95 points before paring much of those gains. Bank collapse clouds Fed policy The week is starting off with a light data calendar, but the markets are abuzz after the Silicon Valley Bank (SVB) suddenly collapsed. The failure of SVB has raised contagion fears but so far the damage seems contained and hasn’t weighed too much on the large banks. The Federal Reserve and Treasury Department stepped in quickly and said SVB depositors would be protected, which calmed down jittery markets to some extent. The SVB debacle was the largest failure of a US bank in 15 years and has dramatically shifted market pricing of interest rates expectations. Before the collapse, the markets had priced a 50-bp hike at 70% and a 25-bp at 30%. Currently, there is a 70% of a 25-bp increase and a 30% chance of the Fed taking a pause. This shift away from a 50-bp hike is weighing on the US dollar, which has lost ground against the major currencies as a result. Still, if it becomes clear that no further banks are in danger of failing, we could see the markets again price in a 50-bp increase. Besides the contagion issue, investors will be keeping a close eye on Tuesday’s inflation report. The February US employment report on Friday was hot/cold. Job growth came in at 311,000, blowing past the estimate of 225,000. The rest of the report was not as impressive and lent support to the view that the labour market may be about to cool. Wage growth ticked lower to 0.2% m/m, down from 0.3% in January and a consensus of 0.3%. As well, the unemployment rate rose to 3.6%, above the prior reading of 3.4%, which was also the estimate. Australia releases consumer and business confidence indicators on Tuesday, with both expected to show improvement. Westpac Consumer confidence is expected to post a gain of 0.1% after a miserable -6.9% reading, while National Australia Bank’s Business Conditions are projected to improve to 21, following a reading of 18 prior.   AUD/USD Technical AUD/USD tested 0.6639 in resistance earlier in the day. Above, there is resistance at 0.6713 There is support at 0.6508 and 0.6434 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

The Fed May Likely Take A Pause In March Until U.S. Regulators Provide Significant Liquidity

InstaForex Analysis InstaForex Analysis 13.03.2023 13:16
The EUR/USD pair soared at the start of the new trading week, testing the 7th figure. The dollar was under pressure amid the unfolding crisis in the U.S. banking sector. The collapse of Silicon Valley Bank triggered the price turbulence at the currency market, and this turbulence was not in favor of the U.S. currency. Yesterday it became known that another large bank (Signature Bank) collapsed in the United States, thereby increasing panic moods among investors. Additional pressure on the greenback came from Goldman Sachs, whose currency strategists have radically revised their expectations regarding the prospects for a Fed rate hike in March. As a result, the U.S. dollar index updated almost a month low today, reflecting the general situation in the foreign exchange market. Bank Crash and its Consequences Signature Bank closed this week, which had $110 billion in assets at the end of last year. It had an extensive network of branches (about 40 in most states of the country) and almost 2,000 employees. The regulator decided to close the bank "because of systemic risks." The U.S. Treasury, Federal Reserve and the Federal Deposit Insurance Corporation issued a joint statement saying depositors will receive reimbursements—taxpayers would not suffer any losses. Recall that at the end of last week, another large bank went bankrupt in the United States—Silicon Valley Bank—whose assets were estimated at more than $200 billion. The U.S. authorities are now taking active steps to address the growing concerns of bank customers about the security of their deposits. And not only of a verbal nature. For example, the Federal Reserve announced the creation of a credit fund for the country's banks. A new Bank Term Funding Program will be created, offering loans for up to one year to banks, pension funds, credit unions and other institutions secured by U.S. Treasury obligations, agency debt obligations, etc. Representatives of the Fed did not name a specific figure for the size of the new loan program, but made it clear that it would be very significant. According to the statement of the U.S. Treasury Department, the agency plans to allocate up to $25 billion from the Exchange Stabilization Fund to support financing of the program. At the same time, the Fed, according to the statement, "does not expect that there will be a need to use these additional funds." During Monday's U.S. trading session, U.S. President Joe Biden will issue a special statement on the banking sector to calm the panic that apparently still hovers among investors. SVB, Goldman Sachs, and the Fed The SVB bankruptcy is the largest since the 2008 financial crisis. Overall, the collapse of two large banks is a serious stress test for the U.S. financial system. But still, according to many experts, this situation will not trigger a major financial crisis in the U.S. (with the same analogy in 2008). But how would this affect the resolve of the Fed members, who have been hawkish for the past weeks? Less than a week ago, on Tuesday, the market began discussing the increased probability of a 50-point hike at the Fed's March policy meeting. Whereas today there are already opposite assumptions—that the Fed might not raise rates this month. At least, that was the forecast made today by Goldman Sachs strategists. In their opinion, the regulator will take a short-term pause in the light of the serious stress in the U.S. banking system. As for the further prospects, Goldman Sachs analysts expect three 25-point hikes in May, June and July. Such a sharp reversal in expectations put pressure on the greenback, which sank across the market. Conclusions The Fed may likely take a pause in March until U.S. regulators provide significant liquidity to banks facing deposit outflows and build depositor confidence. According to the CME FedWatch Tool, there is now a 92% chance of a 25-point rate hike at the end of the Fed's March meeting. Meanwhile, at the beginning of last week the market was almost certain (75%) that the regulator would implement a 50-point scenario. As you can see, the hawkish expectations are indeed declining, putting pressure on the dollar. The complexity of the situation is also in the fact that from today the so-called "silence mode" is in effect: within 10 days before the meeting, members of the Fed do not have the right to announce their position in public. This puzzle will get more complicated tomorrow (March 14) when the data on U.S. inflation growth will be released. If the CPI comes out in the green again, the dollar will regain some of its lost ground. If inflation slows down more than expected, the EUR/USD might hit the upper boundary of the Kumo cloud, i.e., 1.0800 resistance level. In conditions of such uncertainty for the pair, it is advisable to maintain a wait-and-see attitude.   Relevance up to 10:00 2023-03-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337404
lower Corporate Supply Expected in H2 2023, Forecasting €85-100bn Total Supply

Analysis Of The Malaysian Ringgit Pair By Markets Strategist Quek Ser Leang At UOB Group

TeleTrade Comments TeleTrade Comments 13.03.2023 13:19
In the view of Markets Strategist Quek Ser Leang at UOB Group, USD/MYR could have printed a near-term top near 4.5300. Key Quotes “We highlighted last Monday (06 Mar, spot at 4.4670) that ‘overbought conditions combined with waning upward momentum suggest USD/MYR is unlikely to advance further’ and we expected USD/MYR to consolidate between 4.4500 and 4.4900. Our view of consolidation was incorrect as USD/MYR rose to 4.5290 before closing at 4.5180 on Friday (+1.01%).” “USD/MYR fell sharply upon opening today, and this combined with rapidly waning upward momentum suggests 4.5290 is a short-term top. However, it is too early to expect a major reversal. This week, USD/MYR is likely to edge lower but any decline is viewed a lower trading range of 4.4500/4.5150.”
The USD/JPY Price Seems To Be Optimistic

The USD/JPY Price Seems To Be Optimistic

InstaForex Analysis InstaForex Analysis 14.03.2023 08:00
On Monday, the USD/JPY pair dropped 177 pips, breaking the support of the embedded price channel line at 134.05. As a result, the price was in a suspended state between this resistance of the trend line and the nearest support of the MACD line (131.10). If the price does not return above 134.05, by today or tomorrow, it might fall to 131.10. The signal line of the Marlin oscillator shows an intention to turn up, but it is still in the red, so hopes for further growth are based only on the fact that yesterday's decline below support was a false breakout. On the four-hour chart, the bulls' situation is not much better. Marlin turned up, but still in the red. The price seems to be optimistic and it might overcome the resistance of 134.05. Such a quick return shows that the previous decline was false. We are waiting for the development of events.   Relevance up to 04:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337470
There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

There Are No Obvious Reversal Of GBP/USD Pair Signs Yet

InstaForex Analysis InstaForex Analysis 14.03.2023 08:01
The pound continued its irrepressible growth yesterday, adding one and a half figures and overcoming the target level of 1.2155. It did not settle above this level, and this morning, it fell below it. Most likely, the price can now head to close the opening gap of the week (1.2028). The Marlin oscillator has marked the beginning of the reversal. On the four-hour chart, there are no obvious reversal signs yet, the signal line of the oscillator should decrease even more. The first step will be the price settling under 1.2155. If the price is able to exceed yesterday's high of 1.2198, it may continue to rise to the MACD line around 1.2272 on the daily chart.   Relevance up to 04:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337472
The EUR/USD Price May Fall Under 1.0660

The EUR/USD Price May Fall Under 1.0660

InstaForex Analysis InstaForex Analysis 14.03.2023 08:03
The euro's growth, as well as other counter-dollar currencies, while the stock market is falling is a delayed response. Of course, this is due to investors' worries about the Federal Reserve's easing of the monetary policy due to the start of the banking crisis - the bankruptcy of Silicon Valley Bank, the 16th largest bank by capitalization in the U.S.. Market participants are now laying odds of an 82% rate hike at the next Fed meeting of 0.25%. If we go back to 2008, then the crisis began with the bankruptcy of the investment bank Bear Stearns (ironically - on March 14, and 2 days later it was bought by JPMorgan Chase for a whopping $236 million). But in the spring of 2008, besides Bear Stearns, about 10-15 banks went bankrupt, and this had almost no effect on the markets, the optimism of unbridled growth was so great, and oil was already approaching $120 per barrel (a record of 147.27 WTI in July 2008). But now the Fed's response to Silicon Valley Bank's bankruptcy was swift, providing credit financing to all needy banks for 1 year. But if the banks "go bust," this is already a crisis, and the dollar will rise on it. In the current situation, the dollar may be helped by today's U.S. inflation data. The core CPI for February is expected to rise by 0.4%, on an annualized basis it may decrease to 5.5% from the previous 5.6%. Overall CPI for the month may also show an increase of 0.4%, and in annual terms may be down to 6.0% from 6.4% y/y in January. Earlier we wrote that CPI at 6.0% is high enough and unlikely to be able to influence a softening of the FOMC stance. Now we can add to that that the Fed does not believe in a crisis either. We think the markets have rushed to the other extreme, forgetting to think about a 0.50% rate hike at the next central bank meeting. So, this morning the EUR/USD pair turned down, without reaching the target range of 1.0758/87. Perhaps this is no longer necessary, since yesterday, according to brokers, the stops above 1.0700 were knocked out of the market. The signal line of the Marlin oscillator is already turning down on the daily-chart. Now, the price may fall under 1.0660 and finally close Monday's gap. The second target is 1.0595. On the four-hour chart, the Marlin oscillator is preparing a relatively strong pivot. But in order to confirm the reversal it is necessary to overcome 1.0660. Let's wait and observe.     Relevance up to 04:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337474
The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

The Entire Movement Od EUR/USD Pair Still Appears More Like A Swing Than A Trend

Paolo Greco Paolo Greco 14.03.2023 08:05
5M chart of EUR/USD On Monday, EUR/USD continued to trade in "Friday mode". That is, quite volatile and at the same time, with a clear upward bias. In our fundamental article, we have already analyzed the reasons for the euro's growth (or more exactly, the dollar's fall). On the 5-minute chart, you can see that the pair managed to grow considerably as well as fall during the day. And this happened despite the fact that there were no macro data released during the day. However, U.S. President Joe Biden delivered a speech and the FOMC meeting was held, at which the issue of the stability of the banking system after the collapse of two large banks was decided. This news became the drivers on Monday, though it was rather difficult to say which one of them had an effect on the pair and at what time. Speaking of yesterday's trading signals, everything was as simple as possible. The price fell to the area of 1.0658-1.0669 in the middle of the European session, from which it bounced. After a buy signal appeared, the pair went up about 50 pips, which traders could take advantage of by opening a long position and closing it manually in the evening. So, the day was quite good, in terms of trading. Although the movements, of course, were mixed. COT report: A new COT report came out on Friday... for February 21... That was almost a month ago, while the report of February 14 has disappeared... It seems that the Commodity Futures Trading Commission will now publish reports with a month's delay for some time. In the event of this, the reports will hardly be of great importance. Recall that there was a failure in the CFTC, so the data we receive now is considered irrelevant. So far, we can say that in the last few months, the overall picture has been corresponding to the market situation. On the chart above, we see that the net non-commercial position of large traders (second indicator) has risen since September 2022. At about the same time, the euro started to rise. The net non-commercial position is bullish and continues to increase with each new week, allowing us to expect the uptrend to stop shortly. Such a signal comes from the first indicator, with the green line and the red line being far apart, which is usually a sign of the end of a trend. The euro has already begun its bearish move against the greenback. So far, it remains unclear whether it is just a downward correction or a new downward trend? According to the latest report, non-commercial traders closed 100 long positions, and 1,300 short ones. Consequently, the net position rose by 1,200. The number of long positions exceeds that of short ones by 165,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue. 1H chart of EUR/USD On the one-hour chart, EUR/USD surged, but in general, the entire movement still appears more like a "swing" than a trend. I am quite sure that the pair might start to sharply fall this week, since it did not have such strong reasons to grow. The market is still in an impulsive state, but sooner or later it will calm down. During that time, we should expect a resumption of more or less logical and reasonable movements. On Tuesday, important levels are seen at 1.0537, 1.0581, 1.0658-1.0669, 1.0762, 1.0806, 1.0868, 1.0938, and also Senkou Spahn B lines (1.0610) and Kijun Sen (1.0637). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On March 14, the market will be focused on the U.S. inflation report. There are no important reports or events planned for the EU. In addition, the market may continue to be under the impression from the bankruptcy of the two U.S. banks. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.   Relevance up to 01:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337460
The Pound Is Now Openly Enjoying A Favorable Moment

The Pound Is Now Openly Enjoying A Favorable Moment

Paolo Greco Paolo Greco 14.03.2023 08:07
5M chart of GBP/USD On Monday, GBP/USD also traded higher for most of the day. And for exactly the same reasons as EUR/USD. So let's just say that the pound is now openly enjoying a favorable moment, but the fundamental situation has not changed. It is still trading inside the horizontal channel at the 24-hour chart and the current growth is just the pair turning inside this channel. Of course, on the lower charts, these movements look like independent and good trends, but even according to the trend lines you can see how often the trends on the hourly chart change. That is why I believe it will stop rising. But when making trading decisions, we need to rely on specific signals, rather than speculation and conjecture. Speaking of trading signals, they were quite difficult. The first good sell signal was formed at night, and by the opening of the European session, the price was not far from the point of formation. Therefore, you could open a short position. Though, the pair failed to reach the nearest target level (only 15 pips), so it's unlikely that traders gained profit on that trade. Then the price settled above 1.2143, but rose only to 1.2185. And it happened in the evening. If traders opened a long position here, they could earn literally 20 pips. COT report: The latest COT report on GBP/USD dates back to February 21. Naturally, these reports are of little use now, but it's still better than nothing at all. According to the latest data, non-commercial traders opened 3,300 long positions and 4,900 short ones. The net position fell by 1,600. The net non-commercial position has been bullish in recent months although sentiment remains bearish. The pound has been on the rise against the greenback for some unknown reason. We should not rule out the possibility of a strong decline in price in the near term. Technically, it has already started to decline although it seems to be a flat trend. In fact, the movement of GBP/USD is now akin to that of EUR/USD. At the same time, the net position on EUR/USD is positive, signaling the upcoming end of the bullish momentum. Meanwhile, the net position on GBP/USD is negative. Non-commercial traders now hold 67,000 sell positions and 46,000 long positions. There is still a gap. We are still skeptical that the pair will be bullish in the long term and expect a steep drop. 1H chart of GBP/USD On the one-hour chart, GBP/USD has overcome another short-term trend line, which only confirms my assumptions about the "swing". Formally, the pair might continue rising for some time, but all the factors for growth should have already been worked off by the market. Swings persist, so the pair could fall this week. Although much will depend on today's U.S. inflation report. On March 14, it is recommended to trade at the key level of 1.1760, 1.1874, 1.1927, 1.1965, 1.2143, 1.2185, 1.2269, 1.2342, 1.2429. The Senkou Span B (1.1972) and Kijun Sen (1.1997) lines can also generate signals. Rebounds and breakouts from these lines can also serve as trading signals. It is better to set the Stop Loss at breakeven as soon as the price moves by 20 pips in the right direction. The lines of the Ichimoku indicator can change their position throughout the day which is worth keeping in mind when looking for trading signals. On the chart, you can also see support and resistance levels where you can take profit. On Tuesday, the UK will release data on unemployment, jobless claims and wages. It is not the most important data but it might provoke some reaction as well. The main event of the day will be the U.S. inflation report. A result closer to forecasts might cause a weak reaction, but a sharp deviation might set off a new storm in the market. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders   Relevance up to 01:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337462
Technical look: Euro against US dollar - what can we expect from the pair?

The Pair EUR/USD Has Stabilized Once More

Paolo Greco Paolo Greco 14.03.2023 08:10
The EUR/USD currency pair demonstrated on Monday what to anticipate from it this week. To be more exact, market participants' present sentiments were reflected in the second half of last week. We have already mentioned that the moves on Wednesday, Thursday, and Friday are very difficult to call reasonable and logical. But, although two extremely significant events occurred last week, this is the case. These are the Friday release of labor market data and the Tuesday address by Jerome Powell to Congress. As we can see, these events were sufficient to cause traders' short-term mood to change to "bullish," and both technical pictures were in danger of being canceled. Recall that we have been anticipating a decline in the euro and the pound for a while, but something stands in the way of this possibility every time. In addition to the ECB meeting, other macroeconomic indicators will be released in the upcoming week. Even though we do not anticipate any surprises from the European Regulator, it is important to keep in mind that market reactions can occasionally be abrupt and forceful. And once again, everything will depend on how the market perceives the facts. And it is free to be interpreted (in its present form) as you like. It should be highlighted that the technical picture has not yet been broken and may continue in its current form before moving on to the analysis of forthcoming events. To be more exact, everything now rests on overcoming the key line on the 24-hour TF. The departure of the pair from the Ichimoku cloud increased predictions of a further drop. Yet, as we can see, things are shifting far too quickly. Currently, a new fall of the pair, which objectively should be stronger than the level of 1.0515, can easily be triggered by Kijun-sen's rebound. Yet, growth may continue for a while if it consolidates above the crucial line, and the last local maximum is not too far away. The market is currently in an exciting mood, so we can anticipate any developments, but we see no reason to resume the upward trend. It's going to be a great week. The first European Union data will only start to come in on Wednesday. The release of the January industrial production report will be the catalyst for everything. This report is very difficult to categorize as "important" at the moment, but it has the potential to generate a 20–30 point response. The ECB will then hold a meeting on March 16, during which time the key rate may increase by an additional 0.5% to 3.5%. We continue to believe that the market has already factored in this increase and that a total rate of 3.5% or even 3.75% (if we include the next increase in May) will be insufficient to appreciably slow inflation. So the euro shouldn't increase, on the one hand, and Christine Lagarde's rhetoric might take on new "hawkish" overtones, on the other. She earlier stated that rates will likely need to be raised more than initially anticipated, along with nearly all other members of the ECB monetary committee. Nevertheless, who believed that a 3.5% interest rate would be sufficient to reduce inflation from "over 10%" to "2%"? The need to increase the rate to a minimum of 5–6% was clear from the start. Another question is whether the ECB can afford to tighten monetary policy so drastically. We have our doubts about this, and Ms. Lagarde can respond to them. The February inflation report will be released on Friday. Forecasts predict a "mind-boggling" slowdown from 8.6% to 8.5%, which supports the necessity of tightening monetary policy even more. And, once again, everything will be determined by Lagarde's rhetoric on Thursday, her pronouncements and speeches, and her colleagues in the next few weeks and months. If concurrently similar signals from the Fed are not given, the tightening of rhetoric will help the euro. A slight decrease in the consumer price index at this time is by no means a guarantee that the rate will increase in strength and duration. The capabilities of the ECB and the condition of the European economy will be crucial factors in everything. And the only sources from which we can learn about this are the pertinent reports and the members of the monetary committee. As of March 14, the euro/dollar currency pair's average volatility over the previous five trading days was 96 points, which is considered "high." Hence, on Tuesday, we anticipate the pair to move between 1.0646 and 1.0838. The Heiken Ashi indicator's downward turn will signal a potential continuation of the downward movement. Nearest levels of support S1 – 1.0620 S2 – 1.0498 S3 – 1.0376 Nearest levels of resistance R1 – 1.0742 R2 – 1.0864 R3 – 1.0986 Trade Suggestions: The pair EUR/USD has stabilized once more above the moving average line. Until the Heiken Ashi indicator turns down, you can continue holding long positions with targets of 1.0838 and 1.0864. After the price is fixed below the moving average line, short positions can be opened with a target of 1.0498. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 01:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337464
EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

EUR/USD Pair is Structurally Working On A Larger-Degree Upswing

Oscar Ton Oscar Ton 14.03.2023 08:14
Technical outlook: EURUSD rallied past 1.0740 on Monday before hitting resistance and pulling back. The single currency pair slipped below 1.0700 in the early hours on Tuesday and is seen to be trading close to 1.0705 at the time of writing. If prices break above 1.0740 from here, the bulls will attempt to push through the 1.0800-50 zone before giving up. On the flip side, a drop below 1.0650 will indicate that the bears are poised to drag towards 1.0600 at least before EURUSD could find the next support. The near-term wave structure indicates a slight corrective drop towards 1.0600 before resuming higher again. The key level to watch out for is 1.0524, which should hold for the bulls to remain in control. EURUSD is structurally working on a larger-degree upswing between 0.9535 and 1.1030. The single currency is unfolding a corrective wave, which has the potential to terminate towards 1.0100 going forward. A high probability remains for prices to test the 1.0800 zone before the bears are back in control. Ideally, prices should stay below 1.1030. Trading idea: A potential drop will resume towards 1.0100 soon. Good luck!     Relevance up to 08:00 UTC+2 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315941
The GBP/USD Pair Has Experienced An Average Volatility - 14.03.2023

The GBP/USD Pair Has Experienced An Average Volatility Of 156 Points

Paolo Greco Paolo Greco 14.03.2023 08:12
The GBP/USD currency pair steadily increased on Monday, finishing the day marginally above its recent local highs on the 4-hour TF. The reasons why the dollar fell substantially across the board in the market have already been discussed. It has more to do with the market's panic than it does with a rational response to the events that are occurring. For instance, Joe Biden stated in a speech yesterday that the US government will protect the banking system and prevent a "chain reaction." The Fed promptly took action to provide the banking sector with emergency lending. In general, even in the United States, when the economy crashes occasionally, it doesn't necessarily signal the start of a new financial crisis. As a result, we don't think the dollar will keep losing value for very long. The 4-hour TF's technical image is currently excellent. Look at how frequently the pair has overcome the move in the past month and a half. This is all the information you require regarding the current market situation. If we use the 4-hour TF, it is neither "bullish" nor "bearish." Moreover, the pair has been flat on the 24-hour chart for a while. As a result, the pair grew for three whole days and can now pleasantly fall for the following three days. Trading concerning the moving average simply doesn't make sense right now. The same applies when attempting to identify the current trend using a 24-hour flat. Only the "swing" to be observed or traded on the smallest TF is left. This week in the UK, there won't be much in the way of news or events. The same as last week. The most intriguing things will all be happening today. Reports on unemployment, wages, and unemployment benefit applications will be available. Although these statistics are "quite important," we do not anticipate a strong response. Be careful; the market is currently believing that other, far more significant events have occurred. Although the pair may engage in active trading at night, in the morning, and in the afternoon, this does not necessarily indicate that British statistics are causing the movements. The UK won't have any more significant occasions till the end of the week. But everything will be as enjoyable as normal in the States. Joe Biden's emergency speech, as well as the Fed meeting "behind closed doors," took place yesterday. The first paragraph gave a brief overview of these events' outcomes. The release of the inflation data, which could be considered the "event of the week," will take place today in the United States. By the end of February, inflation is predicted to fall to 6–6.1% y/y, although, in our judgment, the decline might be less dramatic. There is no reason to speculate in any situation. The dollar can be supported by a milder inflationary decline than one that is strong enough to devalue it. But, we want to remind you that right now the market is agitated and viewing everything through the prism of the failure of two big banks and the effects these events will have on the economy. As a result, the response to inflation may be completely illogical. On Wednesday, reports on retail sales and producer prices will be released. That is also "relatively important" data, with a possible reaction of up to 50 points. On Thursday, there will be a typical and uninteresting report on applications for unemployment benefits, and on Friday, the University of Michigan will release its secondary industrial production and consumer sentiment index. As you can see, there aren't many truly significant events, but when taken as a whole, they have the power to affect a few. At the same time, we are unsure of what information regarding Silicon Valley Bank's collapse will be released before the week's end. These findings can cause a more significant reaction than the inflation report. Yet, there is now no need to make a guess. Just keep in mind that the two can "fly" from side to side this week. As a result, surprisingly, the rate factor and the future Fed and ECB meetings have lost importance. This only complicates fundamental analysis and forecasting. The 24-hour TF, which contains the most significant benchmarks and the most powerful indications, deserves the most focus right now. Since intraday trends are currently much easier and quicker to track, you can also trade on the most junior TF. The pound typically "swings," and at the moment, this aspect is crucial. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 156 points. This value is "high" for the dollar/pound exchange rate. So, we anticipate movement inside the channel on Tuesday, March 14 with movement being limited by levels of 1.2039 and 1.2351. A new round of movement to the south will be indicated by the Heiken Ashi indicator turning downward. Nearest levels of support S1 – 1.2146 S2 – 1.2085 S3 – 1.2024 Nearest levels of resistance R1 – 1.2207 R2 – 1.2268 R3 – 1.2329 Trade Suggestions: In the 4-hour timeframe, the GBP/USD pair once more consolidated above the moving average. Unless the Heiken Ashi indicator turns down, you can continue holding long positions with targets of 1.2268 and 1.2329. If the price is fixed below the moving average, short positions with targets of 1.1963 and 1.1902 may be taken into account. Explanations for the illustrations: Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction. Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction. Murray levels serve as the starting point for adjustments and movements. Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day. A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.   Relevance up to 01:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337466
UK PMI Weakness Supports Pause in Bank of England's Tightening Cycle

US CPI Still A Key Focus Ahead, Gold Broke Above The $1900 Barrier

Saxo Bank Saxo Bank 14.03.2023 08:20
Summary:  Banking sector concerns continued to roil markets as the SVB fallout still remains a big unknown despite measures from US authorities to stem contagion. Flight to safety accelerated further with 2-year Treasury yields slumping by a massive 60bps, and Fed rate expectations continued to shift lower with terminal rate expectations now down to 4.8% from 5.7% last week. Dollar was broadly sold and gold and silver were in favor on yield drop. US CPI still a key focus ahead but a softer print can prompt a further shift lower in the expectations of the Fed tightening path.   What’s happening in markets? US equities assess the probability of Fed rate cuts, while both the recession and volatility indexes spike After the sweeping failure of regional lenders, including Silicon Valley Bank, and ahead of the all-important US inflation read, tech stocks edged cautiously ahead, while bond yields fell - as SVB’s collapse severely complicated the Fed's rate path. Meanwhile, the NY Fed probability of a recession index, climbed to its highest level since the GFC, while the Volatility index hit its highest level since October last year. As such we remain cautious. The swaps market is now showing a less than 1-in-2 chance probability the FOMC can continue to hike rates, while also showing a probability of several rate cuts this year. So, the two-year treasury (bond) yield plunged 61 bps to below 4%, the biggest one-day slump in decades, while the 10-year yield dropped 16 bps. While the US dollar plummeted, sending the kiwi, yen and Aussie all up by 1.2% or more. Fed launches probe into the supervision of SVB. Bank stocks continue to tumble, notching biggest decline since the COVID19 crash The Federal Reserve will launch an internal probe to the supervision of Silicon Valley Bank after its collapse sparked criticism by the central bank oversight, with Michael Barr leading the review, which is said to be publicly released by May 1. Not only the Fed is concerned, but so too is Washington and investors alike. The KBW Bank Index shed 12% on Monday, continuing last week’s rout that saw the index slide 16%- with the index collectively notcing its biggest monthly pull back since COVID19. First Republic Bank shares tanked 62% on Monday, with other regional banks such as Western Alliance Bancorp falling 47%, and California-based PacWest Bancorp down 21% - as investors fret about the strength of liquidity in the lending market. Larger companies also are not immune to the sell off- Charles Schwab shares slid 12% with traders also de-risking and even perhaps shorting some financial institutions. As mentioned on Monday’s Podcast - we think the rout of several lenders in Silicon Valley could have a profound ripple effect on the innovation eco system – and future lending meaning access to liquidity in the VC and cryptocurrency market could be limited – and this could also impact the private equity market. All this reinforces Saxo long held belief that the physical world will continue to outperform the intangibles (the technology sector). This view was reinforced in our Quarterly Outlook. Massive bull steepening as investors flocked to 2-year Treasuries On the back of U.S. regional bank turmoil, investors quickly repriced the front end of the Treasury curve and removed additional future rate hikes in this tightening cycle. Investors flocked to 2-year Treasuries in safe-haven bids and traders closed out curve-flattening positions. Yields on the 2-year plunged 61bps to 3.98% while the 10-year yields fell “only” 13bps to close at 3.57%. The 2-10-year curve steepened to -46bps, after hitting as inverted as -110bps last week. Hang Seng Index and China’s CSI 300 rallied on U.S. regulators’ decision to backstop depositors Hong Kong and Chinese stocks rallied as U.S. regulators rolled out plans to prevent the woes in Silicon Valley Bank and Signature Bank to turn into systemic risks. Hang Seng Index advanced 2% and CSI300 climbed 1%. China’s Two Sessions concluded this morning. President Xi secured a third term and his ally Li Qiang took the position of Premier, both being widely expected. Premier Li Qiang’s remarks at the press conference had a pro-growth and market-friendly tone. Energy, telco, China consumption, and China internet stocks drove the advance of the Hang Seng Index. Hang Seng TECH Index gained 2.9%. Bilibili (09626:xhkg) jumped 10.7% following the video-sharing platform being included in the Stock Connect. In A-shares, SOE telcos outperformed. Belt-and-Road-Initiative-related stocks were well bid. Australian equities (ASXSP200.I) trade lower for the sixth week. Swaps show RBA’s hiking cycle is over After not only the dovish commentary from the RBA but the recent demise of several large VC and cryptocurrency lending banks in the US, now we are seeing that the RBA’s interest rate hiking cycle could be over. That’s according to the swaps market, which reflects that there is just a 50% chance for an increase in the RBA’s cash rate for the rest of this year. FX: Expectations of a less aggressive Fed weighing on the dollar The USD continued to slide on Monday as Fed expectations were revised further lower (read below) but some floor was being found in early Asian trading. AUDUSD touched highs of 0.6717 before reversing to 0.6650, while NZDUSD surged to 0.6250+ before heading back towards the 0.62 handle. GBPUSD could not move above 1.22 and focus turns to labor market data in the UK today before the budget announcement tomorrow. EURUSD touched 1.0750 with a 50bps rate hike still on the table this week. Safe haven JPY and CHF continued to outperform as bank risks reign, with USDJPY staying below 134 and USDCHF testing support at 0.91. Crude oil prices slump amid risk off Oil prices closed lower by 2.5% on Monday as banking sector concerns continued to spell caution on risk assets. However, expectations of a less aggressive Fed monetary policy helped crude oil to recover from its lows, and focus now turns ahead to the US CPI data due today. WTI futures still trading below $75/barrel while Brent is at $80. OPEC is scheduled to issue its monthly market report later Tuesday, while the International Energy Agency follows with its release on Wednesday, providing on snapshot on the outlook for supply and demand, but focus is unlikely to be back on fundamentals until market concerns ease. Gold and Silver benefitting from the drop in yields Gold broke above the $1900 barrier as flight to safety continued despite the efforts of US regulators to reduce the risk of contagion from the SVB collapse. The massive drop in 2-year Treasury yields of the order of 60bps as well as market pricing in as many as 4 rate cuts this year have seen the dollar come off considerably from its highs and brought the precious metals back in focus. Additional demand for Gold from momentum traders looking for a fresh upside attempt, could bring Gold towards the January high around $1950. Silver was up over 6% on Monday as well breaking the $21.70 resistance which will be followed by $22 and $22.27. What to consider? Bank worries bring a significant shift in Fed expectations Bonds continued to soar as markets digested the measures of the US regulators to stem contagion from the collapse of SVB. But that continued to complicate the path of monetary policy with the Fed having broken something. As markets continued to re-assess the path of monetary policy from here, 2-year Treasury yields plunged 61bps to below 4%, the biggest one-day slump in decades, while 10-years dropped 16bps. The CME FedWatch tool now shows a 35% chance of no move from the Fed next week, and 65% probability of a 25bps rate hike. Fed Funds futures are now pricing in a terminal rate of 4.8% as early as May (down from 5.7% in July earlier) and as much as 100bps of rate cuts this year (compared to one 25bps rate cut expected last week). Upside in US CPI is also unlikely to make Fed go for 50bps in March US inflation has been the talk of town for several months now, although the focus has lately turned to financial contagion risks that may stop the Fed from switching back to a higher rate hike path trajectory. In fact, several banks are now calling for a pause next week, with one also expecting a rate cut and an end to quantitative tightening. Still, February CPI – due to be released on Tuesday – will be a big test after last month’s print reversed the disinflation narrative in goods inflation, and continued to point at sticky services inflation. Headline consumer prices are expected to rise +0.4% MoM in February, cooling slightly vs the +0.5% in January, with the annual rate seen easing to 6.0% YoY from 6.4% previously. Core CPI is expected to rise +0.4% MoM in February, matching the January pace, though the annual rate is likely to fall to 5.5% YoY from 5.6% in January. Overall message is likely to remain that inflation remains stubbornly high, especially after tough weather conditions in California, but the risk of a 50bps rate hike from the Fed in March remains low as the central bank becomes wary of “something breaking”. Submarine deal moves ahead  - the market is still awaiting further detail The US, Australia and the UK unveiled further plans for a new fleet of nuclear-powered submarines when the country heads met in the US on Monday. There will be an initial budget of about A$9 billion through to June 2027, with the tri nations deepening their Aukus Defense partnership that formed 18 months ago, to counter China in the Pacific. The market awaits further detail with much of the discussion remaining confidential. To read more on what to expect, click our article here. Chinese peak construction season ramps up. Iron ore makes green shoots. Iron ore stocks follow higher The iron ore (SCOA) price has extended its rebound - with the steel ingredient's price is up 2.7% so far this week, after rising 2.7% last week. All in all, the iron ore is now trading 8% higher year to date, and above the $132 for the first time since April last year. We’ve been speaking a lot about how iron ore buying usually picks up around this time of year, with Chinese steel mills getting ready for peak construction season - which runs from March through to June. Fresh data released on Friday showed by both steel stockpiles and iron ore inventories fell last week, which implies there is a need to top of up stockpiles. We think buying of iron ore will likely continue in 2023, as the re-opening of China’s economy pick up, all while iron ore supply remains short. And this is underpinning price strength, despite some in Beijing accusing iron ore market participant's of price manipulation. Australian pulse checks: business and consumer confidence and jobs numbers   Australian business and consumer confidence, numbers released today – show consumer confidence is somewhat improving, while businesses remain cautious - feeling the aftereffects of the RBA’s 10th rate hike. Despite the RBA’s comments previously alluding to a potential pause on rate hikes soon - business confidence fell by 4 points in February. The next gauge we will get on Australia’s economy is due on Thursday - with all-important unemployment rate released for February. Bloomberg’s consensus is suggesting the jobless rate will fall from 3.7% to 3.6%, with 50,000 jobs expected to be added last month. If the data shows employment is rising, contrary to what the RBA expects, then the Australian dollar would likely gain pace, as the RBA would gain power to keep rising rates by 0.25%. UK labor data on watch today for the path of BOE The UK labor market data will be released on Tuesday and investors will be scrambling to gauge how much room does the BOE have to tighten further. Bloomberg consensus expects the unemployment rate to rise to 3.8% in the three months to January from 3.7% previously, with headline jobs growth likely to ease to 60k from 102k in January. However, even with a slightly softer jobs report, the BOE is expected to continue its hiking cycle in March as activity data has been stronger than expected, but the trend in labor market from here will be key to see where BOE could pause its tightening cycle. Focus also turns to UK’s budget announcement tomorrow. For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.
EUR/USD Pair Has Potential For The Downside Movement Today

EUR/USD Pair Has Potential For The Downside Movement Today

Peter Jacimovic Peter Jacimovic 14.03.2023 08:22
Technical analysis: EUR/USD has been trading upside in the background but I found rejection of the key resistance Fibonacci zone at 1.0720 Due to the rejection of the key resistance zone and overbought reading, I see potential for the downside movement today. Downside objective is set at the price of 1.0580 Stochastic oscillator is showing fresh downside cross, which is another good sign for the further downside movement. Key resistance is set at the price of 1.0720/40   Relevance up to 08:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315963
The Indian Rupee Pair Takes Clues From The Receding Fears Of Hawkish Fed Rate Moves

The Indian Rupee Pair Takes Clues From The Receding Fears Of Hawkish Fed Rate Moves

TeleTrade Comments TeleTrade Comments 14.03.2023 08:29
USD/INR pares the biggest daily gains in seven weeks amid sluggish session. Indian equity rout, downbeat inflation data drowned Rupee the previous day despite broad US Dollar weakness. Fed pivot chatters highlight US CPI for February as SVB-led market fears ease. USD/INR sticks to mild losses near 82.35 as it consolidates the biggest daily gain in nearly two months during early Tuesday. In doing so, the Indian Rupee pair takes clues from the receding fears of hawkish Fed rate moves amid a sluggish session ahead of the US Consumer Price Index (CPI) data for February. Interest rate futures hint at the US Federal Reserve’s (Fed) policy pivot, especially after the recent fallout of the Silicon Valley Bank (SVB) and the Signature Bank. “The US Fed Fund Futures have priced in a 69% chance of a 25-bps hike at next week's Fed policy meeting, with a more than 30% probability of a pause,” said Reuters while also adding that the market last week was poised for a 50-bps increase prior to the SVB collapse. On the same line could be the CME as it mentioned, “Traders see 33% chance Fed holds rates this month, market pricing shows rate cuts expected as early as June.” On the other hand, the US Treasury bond yields’ corrective bounce should have underpinned the USD/INR pair’s run-up but couldn’t as the Indian Rupee (INR) pares the previous day’s gains, mainly levied due to the downbeat India Inflation data and the equity market rout. That said, India Consumer Price Index (CPI) for February, rose 6.44% YoY versus 6.35% expected and 6.52% prior. The receding inflation fears raised concerns that the Reserve Bank of India (RBI) may refrain from further rate hikes now that the Fed bets suggest a policy pivot. Even so, the Indian equities failed to cheer receding hopes of hawkish monetary policy actions amid the equity rout during early Monday. It should be noted that India’s benchmark BSE Sensex dropped to the five-month low the previous day before printing mild gains of around             58,300 by the press time. On a macro level, traders witnessed heavy bond buying the previous day as the US banking regulators rushed to defend the SVB and the Signature Bank after their fallouts. US banking regulators undertook joint actions to tame the risks emanating from SVB and Signature Bank during the weekend.  While announcing the plan, US President Joe Biden noted on Monday that investors in those banks will not be protected and reminded that "no one is above the law." However, the US President also vowed to take whatever action was needed to ensure the safety of the US banking system, per Reuters. Amid these plays, Wall Street closed mixed and the S&P 500 Futures print mild gains at the latest. Moving forward, India’s WPI inflation for February will precede the US CPI for the said month to direct immediate USD/INR moves. Given the latest blow to the hawkish Fed bets, any more softening of the US inflation numbers could allow the pair to recall the sellers. Technical analysis A daily closing beyond the convergence of the 100-DMA and 50-DMA, around 82.15-10 by the press time, keeps USD/INR bulls hopeful.
A Slump In The Turkish Current Account Balance Allowed The USD/TRY Pair To Print The First Daily Gains

A Slump In The Turkish Current Account Balance Allowed The USD/TRY Pair To Print The First Daily Gains

TeleTrade Comments TeleTrade Comments 14.03.2023 08:31
USD/TRY struggles for clear directions after snapping two-day downtrend trend previous day. Corrective bounce in US Treasury bond yields defends US Dollar bulls but talks of Fed policy pivot weigh on prices. An increase in the Turkish Current deficit probe Lira buyers ahead of US CPI. USD/TRY treads water around 18.95 during early Monday in Europe. In doing so, the Turkish Lira pair seek clear directions amid mixed catalysts from Turkiye and the US. Also likely to restrict the pair’s moves could be the cautious mood ahead of the key US inflation data, namely the Consumer Price Index (CPI) for February. It’s worth noting that a slump in the Turkish Current Account Balance for January, to $-9.849B versus $-5.91B, allowed the USD/TRY pair to print the first daily gains in three despite the broad US Dollar weakness. That said, the US Dollar Index (DXY) dropped the most since mid-January as fears emanated from the Silicon Valley Bank (SVB) and the Signature Bank. fallout, despite the US authorities’ defense, put a floor under the greenback. Adding strength to the US Dollar rebound could be the recently firmer US Treasury bond yields. US 10-year Treasury bond yields print mild gains of around 3.57%, after bouncing off the monthly bottom of 3.418%, whereas the two-year counterpart rebounds from the lowest levels since September 2022 to print mild gains of around 4.19% by the press time. It should be noted that the US two-year Treasury bond yields dropped the most since 1987 the previous day while the latest rebound could be a U-turn from the 200-DMA support ahead of important US data. Alternatively, the recently downbeat concerns surrounding the Federal Reserve’s (Fed) policy pivot, especially after the recent US government efforts to rescue the SVB and the Signature Bank seem to challenge the USD/TRY traders amid a sluggish session. “The US Fed Fund Futures have priced in a 69% chance of a 25-bps hike at next week's Fed policy meeting, with a more than 30% probability of a pause,” said Reuters while also adding that the market last week was poised for a 50-bps increase prior to the SVB collapse. On the same line could be the CME as it mentioned, “Traders see 33% chance Fed holds rates this month, market pricing shows rate cuts expected as early as June.” Looking forward, the US CPI will be important for intraday directions but major attention should be given to the risk catalysts and the yields. That said, the US CPI is likely to ease to 6.0% YoY versus 6.4% prior while CPI ex Food & Energy may slide to 5.5% YoY from 5.6% prior. Technical analysis Unless providing a daily close below the late 2021 peak surrounding 18.40, the USD/TRY bulls remain in the driver’s seat.
Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

Any Upside Momentum For AUD/USD Is Likely To Remain Capped At Monday’s High

TeleTrade Comments TeleTrade Comments 14.03.2023 08:34
AUD/USD hits the high at 0.6716 and retraces. Risk-averse environments keeping a lid on AUD/USD price appreciation. US CPI could reinforce the pair to break major support at 0.6560.    AUD/USD hits the ceiling on a descending trendline after a rebound from the four-month low at 0.6564. The sharp rebounds came on Monday upon the US Dollar's weakness. Receding bets for a 50-bps Federal Reserve (Fed) rate hike have prompted AUD/USD to surge higher, although the downside bias is likely to remain intact, in a risk-averse environment led by SVB fallout.   Any upside momentum for AUD/USD is likely to remain capped at Monday’s high around the 0.6713 mark, which is a support-turned-resistance and coincides with a descending trendline starting from February on a daily chart. A break above will lead the pair to confront the next resistance at around 0.6766 which is pegged with 21-day Moving Average (DMA). Both the 21-DMA and 50-DMA are pegged above the current price level, which is technically exerting overhead price pressure on AUD/USD and also confirming the bearish bias for the pair.  Downside support is seen at 0.6560, which is a key support level for the AUD/USD. A convincing break below will likely put the pair in a vacuum without any major support for a long distance. Regarding the said level, the pair has respected it on the last three attempts and AUD/USD looks resilient above that price point. The intermediate support lies at the psychological 0.6500 level.     AUD/USD: Daily chart  
RBNZ preview: Fiscal spending argues for a hawkish 25bp hike

Further Downside Movement Of The Kiwi Pair (NZD/USD) Is expected

TeleTrade Comments TeleTrade Comments 14.03.2023 08:37
NZD/USD holds lower ground near intraday low, snaps two-day winning streak. RSI retreat backs the Kiwi pair’s U-turn from 200-EMA, one-month-long resistance line. Receding bullish bias of MACD signals, failure to cross key upside hurdles keep sellers hopeful. Fortnight-old horizontal support area lures bears past 100-EMA break. NZD/USD sticks to mild losses near 0.6210 during the first downbeat day in three heading into Tuesday’s European session. In doing so, the Kiwi pair struggles to break the 100-bar Exponential Moving Average (EMA) amid sluggish trading hours. That said, the quote rose the most in nine weeks the previous day before retreating from 0.6265. The pullback moves could be linked to the NZD/USD pair’s inability to cross the 200-bar EMA, as well as a downward-sloping resistance line from mid-February. Adding strength to the pullback moves could be the RSI (14) retreat from the overbought territory, as well as the receding bullish bias of the MACD signals. It’s worth noting, however, that a clear downside break of the 100-bar EMA, around 0.6200 by the press time, becomes necessary for the NZD/USD bears to take control. Following that, a south-run towards the two-week-old horizontal support zone near 0.6130 and then to the monthly low of 0.6084 can’t be ruled out. On the contrary, the aforementioned trend line and 200-EMA restrict short-term NZD/USD recovery to around 0.6230 and 0.6245 in that order. In a case where NZD/USD remains firmer past 0.6245, the odds of witnessing a rally targeting the mid-February high of 0.6390 can’t be ruled out. NZD/USD: Four-hour chart Trend: Further downside expected
SNB stands firm in the face of market turbulence with 50bp rate hike

The US CPI Will Be More Important For The USD/CHF Pair Traders

TeleTrade Comments TeleTrade Comments 14.03.2023 08:43
USD/CHF bounces off five-week low to print the first daily gain in five. US Dollar traces corrective bounce off yields to pare recent losses. Interest rate futures raise doubts on further USD/CHF advances unless US inflation markets notable jump. USD/CHF seesaws around intraday high during the first positive day in five heading into Tuesday’s European session. In doing so, the Swiss Franc (CHF) pair traces the US Dollar’s latest corrective bounce amid a recovery in the US Treasury bond yields ahead of the Consumer Price Index (CPI) data. It should be noted, however, that the recently downbeat market concerns surrounding the Federal Reserve (Fed) seem to test the buyers ahead of the key US data. That said, US 10-year Treasury bond yields print mild gains of around 3.58%, after bouncing off the monthly bottom of 3.418%, whereas the two-year counterpart rebounds from the lowest levels since September 2022 to print mild gains of around 4.19% by the press time. It should be noted that the US two-year Treasury bond yields dropped the most since 1987 the previous day. A major slump in the US Treasury bond yields could be linked to the fears emanated from the Silicon Valley Bank (SVB) and the Signature Bank fallouts, despite the US authorities’ defense. While talking about the Fed bets, CME said, “Traders see 33% chance Fed holds rates this month, market pricing shows rate cuts expected as early as June.” On the same line Reuters mentioned that yhe US Fed Fund Futures have priced in a 69% chance of a 25-bps hike at next week's Fed policy meeting, with a more than 30% probability of a pause,” said Reuters. The news also added that the market last week was poised for a 50-bps increase prior to the SVB collapse. Amid these plays, Wall Street closed mixed and so do stocks in the Asia-Pacific region while S&P 500 Future snap three-day downtrend by bouncing off the lowest levels since early January. Looking ahead, the US CPI will be more important for the USD/CHF pair traders as the Fed bets have already reversed. As per the market forecasts, the headline US CPI is likely to ease to 6.0% YoY versus 6.4% prior while CPI ex Food & Energy may slide to 5.5% YoY from 5.6% prior. Also read: US Inflation Preview: Five scenarios for trading the Core CPI whipsaw within the SVB storm Technical analysis A clear downside break of the five-week-old ascending support line, now resistance around 0.9335, keeps USD/CHF bears hopeful of testing the previous monthly low of 0.9060.     search   g_translate    
Japanese yen increased by over 0.5% on Friday. Japanese monetary policy may change soon

The Corrective Downfall In USD/JPY Was Started Earlier This Week

TeleTrade Comments TeleTrade Comments 14.03.2023 08:45
USD/JPY is taking a pause on a corrective phase amid softer US Treasury yields. Surging borrowing costs are causing liquidity traps. US CPI data will pave the way for the next FOMC meeting.  USD/JPY rebounded after hitting the monthly low of 132.34. The short covering just comes ahead of the US Consumer Price Index (CPI) release. The corrective downfall in USD/JPY was started earlier this week on the back of falling US Treasury bond yields. The Silicon Valley Bank’s (SVB) fallout has prompted investors to revisit their rate-hiking expectations about the Federal Reserve's (Fed) plans to increase interest rates during the March FOMC meeting., which was surging exponentially prior to the last Nonfarm Payrolls (NFP) release.  When borrowing costs increase, it's natural for highly leveraged businesses to experience pressure in repaying their debts. The recent rise in US Treasury bond yields, which reflects the lending rates in the US economy, has resulted in a decrease in the value of US government bonds purchased during a low-yield market period. Therefore, the credit side has loosened the original value amid surging yield and a liquidity trap is emerging among the businesses. Fundamentally, this situation is quite similar to the UK’s bond market incident that happened a while ago, where the pension funds have struggled with liquidity. Since the Fed commentary is muted for further clarity on the underlying US financial ecosystem, investors are refraining to put fresh bets on risky assets. Meanwhile, US Consumer Price Index (CPI) is on the cards. The market is expecting a slightly downbeat CPI release from prior releases on Tuesday. As it is always said “devil in the details”, market participants will likely jump to the service-led inflationary portion, since the Fed has made concerns regarding this in many instances.
USD/CAD - Canadian economy added 41,400 jobs beating expectations

USD/CAD Pair Has Delivered A Sheer Downside Move

TeleTrade Comments TeleTrade Comments 14.03.2023 08:48
USD/CAD is facing hurdles in stretching its recovery above 1.3740, volatility is expected ahead of US Inflation. Federal Reserve could continue a smaller rate-hike regime to avoid the United States recession. Bank of Canada may be required to resume its policy-tightening process to tame inflation recovery. USD/CAD might display a downside momentum if RSI (14) skids into the bearish range of 20.00-40.00. The USD/CAD pair is facing barricades while extending its recovery above the immediate resistance of 1.3740 in the early European session. A sideways performance is expected from the Loonie asset till the release of the United States Consumer Price Index (CPI) data. Earlier, the asset rebounded after a five-day low of 1.3677 as investors got anxious ahead of the US inflation release and improved appeal for safe-haven assets. The US Dollar Index (DXY) is displaying a back-and-forth action below 104.00. It seems that the USD Index is gathering strength to stretch its recovery as the release of the US Inflation will prepare the ground for the interest rate decision from the Federal Reserve (Fed), which is scheduled for next week. S&P500 futures are attempting to hold gains generated in the Asian session. However, the risk appetite is still weak as global stocks are facing the heat of the Silicon Valley Bank (SVG) collapse. The return delivered on 10-year US Treasury bonds has rebounded to near 3.57% on hopes that US inflation data could fuel safe-haven's appeal. Upside risk for US inflation looks favored The major catalyst of the week- US inflation, will release on Tuesday and is expected to deliver a power-pack action in the FX domain. Considering the resilience in the overall demand, strong employment bills, and upbeat strong labor market, an acceleration in the US inflationary pressures cannot be ruled out. Last week, the US Bureau of Labor Statistics reported a significant jump in the number of payrolls generated by the US economy in February than anticipated. The Unemployment Rate increased to 3.6%. And, Average Hourly Earnings were increased to 4.6%, lower than the consensus of 4.7%. Despite an increase in the jobless rate, the US labor market looks upbeat as firms are continuously escalating their recruitment process to add more people. And, employment bills are still in a rising trend, which indicates that households are equipped with sufficient funds to trigger inflation again. Analysts at Wells Fargo expect “Another monthly increase of 0.4% in the overall CPI in February, which would put the annual rate at 6.0%. We still see inflation set to grind lower, but the process is likely to be bumpy and take time. Despite some directional improvement over the past couple of quarters, prices are still growing well above the Fed's 2% target, and the tight labor market suggests that there are still inflationary pressures that could forestall a full return to 2% inflation.” Upbeat labor market to compel Bank of Canada to rollback rate-hiking process The Bank of Canada (BoC) has already confirmed that the current monetary policy is restrictive enough to contain Canadian inflation. BoC Governor Tiff Macklem decided to allow the current monetary policy to display its potential and has therefore kept monetary policy steady in March. However, a surprise increase in the Employment numbers and higher employment cost index indicate that inflation could be propelled again. Along with an unchanged monetary policy, Bank of Canada Tiff Macklem kept the room open for more rates if inflation surprises to the upside. Meanwhile, oil prices have witnessed a sell-off as the street is worried about the overall demand ahead. It is worth noting that Canada is a leading exporter of oil to the US and lower oil prices would impact the Canadian dollar. USD/CAD technical outlook USD/CAD has delivered a sheer downside move after a breakdown of the Head and Shoulder chart pattern formed on a two-hour scale. The asset rebounded but has now found barricades near the horizontal resistance plotted from March 08 low at 1.3745. The US Dollar bulls are expected to find a cushion near support placed from March 01 high at 1.3659. The 20-period Exponential Moving Average (EMA) at 1.3745 is expected to act as a major resistance for the US Dollar. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range. A breakdown into the bearish range of 20.00-40.00 will trigger the downside momentum.
The USD/CNH Pair Remains On The Bear’s Trend

The USD/CNH Pair Remains On The Bear’s Trend

TeleTrade Comments TeleTrade Comments 14.03.2023 08:51
USD/CNH portrays corrective bounce near one-month low, mildly bid of late. 50-DMA probes sellers but clear downside break of five-week-old ascending trend line, bearish MACD signals push back buyers. 100-DMA, monthly high act as final defence of China Yuan pair bears. USD/CNH prints mild gains around 6.8660 as it struggles to defend the bounce off a one-month low during early Tuesday. In doing so, the offshore Chinese Yuan (CNH) pair justifies the bearish MACD signals, as well as the downside break of a five-week-old ascending support line, now resistance, while portraying a rebound from the 50-DMA. That said, the USD/CNH pair’s latest recovery remains elusive unless the quote stays below the support-turned-resistance line from early February, around 6.9350 by the press time. Even if the Yuan pair crosses the 6.9350 hurdle, the 100-DMA and the monthly high, respectively around 6.9620 and 6.9970 could test the bulls. It should be observed that the 7.0000 psychological magnet acts as an extra upside filter before giving control to the USD/CNH bulls. On the flip side, a daily closing below the 50-DMA, around 6.8360 at the latest, appears necessary to recall the bears. Following that, multiple tops marked during late January around 6.7900 can act as an intermediate halt before directing the USD/CNH bears towards the year 2023 low, marked in January around 6.6975. Overall, USD/CNH remains on the bear’s radar even if the 50-DMA challenges the pair’s immediate downside. USD/CNH: Daily chart Trend: Further downside expected
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

The Federal Reserve Will Launch An Internal Probe To The Supervision Of Silicon Valley Bank

Saxo Bank Saxo Bank 14.03.2023 09:11
Summary:  An historic move in interest rates accelerated yesterday as investors rushed to price an end to the current Fed hiking cycle and even an eventual easing starting as early as Q3 after US officials moved to prevent contagion in the US banking sector. The US 2-year treasury yield, which traded above 5.0% mid-last week, traded below 4.0% late yesterday. The US dollar is down sharply, gold and bitcoin are soaring, and equities can’t decide whether to sell off on the uncertainty or celebrate the sharp drop in yields. What is our trading focus? US equities (US500.I and USNAS100.I): has the dust settled post SVB Financial bailout? Yesterday’s session saw big moves across US government bonds with especially the US 2-year yield declining 60 basis points as many corporates likely converted deposits into short-term bonds to reduce deposit risk. In equities mega caps were seen as safe havens with Apple shares gaining 1.5% while the broader S&P 500 Index was flat, and the Russell 2000 Index was down 1.5%. US financial conditions tightened to the tightest levels since late September and thus under those circumstances the S&P 500 Index should be trading closer to 3,600 than the close of 3,855 yesterday. Moves in times of crisis are always exaggerated and often not consistent so investors should continue to be cautious and not celebrate too early despite equities help up yesterday. The key indicators to monitor remain US bond yields, USD, FRA-OIS spreads (interbank stress), VIX, credit default swaps, and banking stocks. FX: USD weakens as market prices imminent end of Fed hiking cycle The USD continued to slide on Monday as US yields at the front end of the curve suffered an historic collapse, with Fed expectations revised lower (read below), although a floor in US rates was found in early Asian trading near 4.00% for the US 2-year yield. AUDUSD touched highs of 0.6717 late yesterday before reversing to 0.6650. GBPUSD found resistance ahead of 1.22 and focus turns to labor market data in the UK today before the budget announcement tomorrow, although incoming data feels suddenly less urgent than just a week ago, given the uncertainty the turmoil in the financial sector has generated since late last week. EURUSD touched 1.0750 with a 50bps rate hike still on the table this week from the ECB, although the probability for a hike of that size has dropped significantly, and ECB tightening expectations have seen a sharp downgrade since late last week. JPY and CHF continued to outperform, with USDJPY staying below 134 and USDCHF testing support at 0.91. Crude oil tests strength of support near bottom of current range Crude oil prices closed lower by 2.5% on Monday as banking sector concerns continued to challenge growth and demand dependent commodities from cotton and copper to crude oil. However, expectations of a less aggressive Fed monetary policy helped crude oil find support with WTI and Brent both finding support in the bottom 20% of their current ranges. In Brent, the prompt month backwardation remains elevated around 50 cents while the contango in WTI has not widened despite the current weakness, both signalling a discrepancy between current robust fundamentals and the overall weak sentiment. Ahead of today’s US CPI print, OPEC is scheduled to issue its monthly market report, while the International Energy Agency will follow on Wednesday. Gold and silver benefitting from the yield collapse Gold broke above $1900 barrier on Monday as flight to safety continued despite the efforts of US regulators to reduce the risk of contagion from the SVB collapse. The massive drop in 2-year Treasury yields of the order of 60bps as well as market now pricing in as many as four rate cuts this year (from four hikes less than a week ago) have seen the dollar come off considerably from its highs and brought the precious metals back in focus. Since the SVB news broke late Thursday, gold has gained 4.2% while silver has added a massive 8.5%, and with several rate cuts now priced in, and short end yields unlikely to continue their decline, the risk of a profit taking ahead of the CPI print has risen. Support levels that may get challenged in gold are 1900 followed by 1890 and 1872. Copper looks to China for support Copper trades back above $4 after managing to find support around $3.94, the December high. With the arrival of the peak season and the drop in copper prices, consumption in China is expected to continue to recover, potentially offsetting growth concerns elsewhere Massive bull steepening in US Treasuries as investors flocked to 2-year Treasuries On the back of U.S. regional bank turmoil, investors quickly repriced the front end of the Treasury curve and removed additional future rate hikes in this tightening cycle. Investors flocked to 2-year Treasuries in safe-haven bids and traders closed out curve-flattening positions. Yields on the 2-year plunged 61bps to 3.98% while the 10-year yields fell “only” 13bps to close at 3.57%. The 2-10-year curve steepened to -46bps, after hitting as inverted as -110bps last week. What is going on? Fed launches SVB probe as bank stocks tumble the most since the Covid-19 crash The Federal Reserve will launch an internal probe to the supervision of Silicon Valley Bank after its collapse sparked criticism by the central bank oversight. The KBW Bank Index declined 12% yesterday extending last week’s rout that saw the index slide 16%. In biggest declines were among banks such as First Republic Bank (-62%), Western Alliance Bancorp (-47%), and California-based PacWest Bancorp (-21%) as depositors and investors were nervous about smaller financial institutions. Larger financial institutions were not immune to the risk-off with Charles Schwab shares declining 12%. Credit Suisse has found material weakness in financial reporting The Swiss-based investment bank was forced to postpone the release of its annual report last week due to US regulators and the morning the bank says that it has identified material weaknesses in its financial procedures for 2021 and 2022. The bank is working on remediating those errors. Credit Suisse 5-year CDS prices hit a new all-time high yesterday at 485. Bank worries bring a significant shift in Fed expectations Bonds continued to soar as markets digested the measures of the US regulators to stem contagion from the collapse of SVB. But that continued to complicate the path of monetary policy with the Fed having broken something. As markets continued to re-assess the path of monetary policy from here, 2-year Treasury yields plunged 61bps to below 4%, the biggest one-day slump in four decades, while 10-years dropped 16bps. The CME FedWatch tool now shows a 35% chance of no move from the Fed next week, and 65% probability of a 25bps rate hike. Fed Funds futures are now pricing in a terminal rate of 4.8% as early as May (down from 5.7% in July earlier) and as much as 100bps of rate cuts this year (compared to one 25bps rate cut expected last week). What are we watching next? US CPI will still get some attention, even if incoming data’s importance has fallen sharply US inflation has been the talk of town for several months now, although the focus has lately turned chiefly to financial contagion risks that may stop the Fed from switching back to a higher rate hike path trajectory. In fact, several banks are now calling for a pause next week, with one also expecting a rate cut and an end to quantitative tightening. Still, the US February CPI – due to be released today – will be a big test after last month’s print reversed the disinflation narrative in goods inflation and continued to point at sticky services inflation. Headline consumer prices are expected to rise +0.4% m/m in February, cooling slightly vs the +0.5% in January, with the annual rate seen easing to 6.0% YoY from 6.4% previously. Core CPI is expected to rise +0.4% m/m in February, matching the January pace, though the annual rate is expected to fall to 5.5% y/y from 5.6% in January. Despite the SVB’s failure, we still believe the February CPI release will be particularly relevant for the FOMC’s March policy decision as the Fed may try to pretend that it can focus on business as usual. Evidence of economic resilience and persistent price pressures would prolong the Fed’s tightening cycle. However, by year-end, we expect the U.S. economy will start to experience more significant disinflationary pressures. NFIB survey for February Given that small businesses are particularly sensitive to domestic economic dynamics, sentiment among small business owners will provide an update on inflationary conditions and the labor market situation. Earnings to watch Volkswagen earnings are the big focus today at 9:00 CET but VW’s investment plans have already been surfaced increasing to €180bn in investments during 2023-2027 which is 13% higher than previously announced and with 70% going to EV. Next key US earnings are Adobe and Lennar tomorrow with analysts expecting Adobe’s revenue growth at 9% y/y which is unchanged from a year ago suggesting the growth rate is stabilising. Analysts are also expecting Adobe to show meaningful improvement in operating income as the software maker has reduced costs. Lennar is expected to report -3% y/y and –41 q/q revenue growth for FY23 Q1 (ended 28 Feb) and a significant hit to EBITDA at $725mn down from $1,527mn. Tuesday: Foxconn, Volkswagen, Generali Wednesday: Constellation Software, BMW, E.ON, Ping An Insurance, Prudential, Inditex, Adobe, Lennar Thursday: Verbund, Rheinmetall, KE Holdings, Enel, FedEx, Dollar General Friday: Vonovia Economic calendar highlights for today (times GMT) During the day: OPEC’s Monthly Oil Market Report 1230 – US Feb. CPI 1230 – Canada Jan Manufacturing Sales MoM 2030 – API's Weekly Crude and Fuel Stock Report 2120 – US Fed’s Bowman (Voter) to speak   Source: Global Market Quick Take: Europe – March 14, 2023 | Saxo Group (home.saxo)
The USD/MXN Pair Could Then Aim To Surpass The February Monthly Swing High

The USD/MXN Pair Could Then Aim To Surpass The February Monthly Swing High

TeleTrade Comments TeleTrade Comments 14.03.2023 10:25
USD/MXN gains traction for the fourth straight day and trades near a one-month high set on Monday. Bulls now await a move beyond the 100-day SMA and 38.2% Fibo. confluence before placing fresh bets. Weakness back below the 18.35 horizontal support is needed to offset the near-term positive outlook. The USD/MXN pair attracts some buying for the fourth successive day on Tuesday and maintains its bid tone through the early part of the European session. The pair steadily climbs back above the 19.00 mark and remains well within the striking distance of over a one-month top touched on Monday. Given that oscillators on the daily chart are holding in the positive territory and are still far from being in the overbought zone, the technical setup favours bullish traders. That said, the overnight failures to find acceptance above the 100-day Simple Moving Average (SMA) and the 38.2% Fibonacci retracement level of the July 2022-March 2023 downfall warrant caution. This makes it prudent to wait for a convincing break through the said confluence barrier before positioning for any further appreciating move. The USD/MXN pair could then aim to surpass the February monthly swing high, around the 19.30 region and climb to the 50% Fibo. level, around the mid-19.00s. The upward trajectory could get extended towards testing the 19.75-19.80 horizontal support breakpoint, which now coincides with the 61.8% Fibo. level and should act as a pivotal point. A convincing breakthrough will set the stage for an extension of the recent strong recovery move from sub-18.00 levels, or a multi-year low touched last week. On the flip side, the 23.6% Fibo. level, around the 18.65 area, now seems to protect the immediate downside ahead of the 18.35 horizontal support. Sustained weakness below will suggest that a one-week-old uptrend has run out of steam and make the USD/MXN pair vulnerable to retesting the 18.00-17.90 support zone. USD/MXN daily chart  
If The Bank Of England Hike Interest Rates Again Later This Month Will Exert Downward Pressure On The EUR/GBP Cross

If The Bank Of England Hike Interest Rates Again Later This Month Will Exert Downward Pressure On The EUR/GBP Cross

TeleTrade Comments TeleTrade Comments 14.03.2023 10:31
EUR/GBP drifts lower for the fifth straight day and drops to a nearly two-week low on Tuesday. The GBP’s relative outperformance comes amid rising bets for additional rate hikes by the BoE. The mixed UK jobs data fails to push back against hawkish BoE expectations or lend any support. Speculations for more jumbo rate hikes by the ECB warrant caution for aggressive bearish traders. The EUR/GBP cross remains under some selling pressure for the fifth successive day on Tuesday and drops to a nearly two-week low during the early European session. The selling bias remains unabated following the release of the mixed UK monthly employment details and drags spot prices below the 0.8800 mark, with bears now eyeing to challenge a technically significant 100-day Simple Moving Average (SMA). In fact, the UK Office for National Statistics reported that the number of people claiming unemployment-related benefits fell by 11.2K in February, less than the 12.4 decline anticipated. The slight disappointment, however, was offset by a sharp downward revision of the previous month's reading to show a drop of 30.3K in the Claimant Count Change against the 12.9 fall estimated. Furthermore, the jobless rate held steady at 3.7% during the three months to January as compared to a modest uptick to 3.8%, while the rolling three-month average indicated that the UK wages are cooling. Nevertheless, the data is strong enough to allow the Bank of England (BoE) to hike interest rates again later this month, which continues to underpin the British Pound and exerts downward pressure on the EUR/GBP cross. Apart from this, a goodish pickup in the US Dollar demand is seen weighing on the shared currency, which further contributes to the heavily offered tone surrounding the EUR/GBP cross. That said, the recent hawkish comments by several European Central Bank (ECB) officials, stressing the need for more interest rate hikes beyond March, could lend some support to the Euro. Traders might also refrain from placing aggressive bearish bets ahead of the ECB monetary policy meeting, scheduled on Thursday. The focus will then shift to the BoE meeting next week, which should help determine the next leg of a directional move for the cross. Hence, any subsequent decline is more likely to find decent support near the 100-day SMA, which should act as a pivotal point ahead of the key central bank event risks.
Saxo Bank Podcast: A Massive Collapse In Yields, Fed's Tightening Cycle And More

Saxo Bank Podcast: A Massive Collapse In Yields, Fed's Tightening Cycle And More

Saxo Bank Saxo Bank 14.03.2023 10:37
Summary:  Still very early days, as we ponder the ongoing fallout from the turmoil in the US banking system, which has triggered a massive collapse in yields as the market brings forward the end of the Fed's tightening cycle. One significant danger is that we risk a credit crunch as banks are forced to scramble for funding and deposits. We highlight areas and indicators that are flashing red, the impact of the situation into currencies, precious metals, and equity sectors. Today's pod features Garnry on equities, Ole Hansen on commodities, and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Careening toward a credit crunch? | Saxo Group (home.saxo)
Gold Trading Analysis: Technical Signals and Price Movements

EUR/USD, GBP/USD And AUD/USD Is Trading In Red, Only USD/JPY Is Positive

Kamila Szypuła Kamila Szypuła 14.03.2023 11:34
The dollar rose in somewhat calmer trading on Tuesday after collapsing on Monday following the collapse of Silicon Valley Bank (SVB) as investors waited for the release of US consumer inflation data later in the day. Tuesday's data on the Consumer Price Index (CPI) could potentially fuel further volatility in global markets, coming a day after fears of a potential banking crisis caused traders to quickly lower their expectations of a Federal Reserve rate hike. Over the weekend, US authorities took emergency action in response to the collapse of the SVB, promising depositor protection to bolster bank confidence. US President Joe Biden on Monday announced measures to ensure the security of the banking system. USD/JPY The yen pair started the day at 133.0870. The USD/JPY pair rose towards 134.00 in the first hours of trading, but failed to maintain momentum and fell towards 133.25. From then on, USD/JPY traded around 133.50 until the end of the Asian session. In the European session there was an upward impulse and the yen pair breaks through 134.00. At the time of writing, USD/JPY is above 134.10. EUR/USD The Asian session for the euro pair, which started Tuesday's session at 1.0727, was bearish. At the end of the Asian session, EUR/USD fell below 1.07. The European session brought an upward impulse to the EUR/USD pair and the trade rebounds above 1.07 again. The euro is trading cautiously this morning which is to be expected as markets prepare for the upcoming US CPI report. Meanwhile, markets are also trying to figure out whether SVB collapse will influence the European Central Bank's (ECB) rate decision later this week. ECB policymaker Yannis Stournaras said on Tuesday that he does not see any impact from the collapse of Silicon Valley Bank (SVB) on Eurozone banks. Although the ECB is in quiet period, the Euro could stay resilient against its rivals in case other ECB policymakers deliver similar comments. GBP/USD The cable pair started Tuesday's session at the level of 1.2168 and, just like the euro pair, was in a downward move in the Asian session. Towards the end of the Asian session, the GBP/USD pair got a strong upward impulse towards 1.2180. In the European session, the pound pair again started to fall towards 1.2150. At the time of writing, GBP/USD is trading above 1.2160. Early Tuesday, the data published by the UK's Office for National Statistics showed that the Unemployment Rate remained unchanged at 3.7% in three months to January. More importantly, annual wage inflation in the three months to January, as measured by Average Earnings Including Bonus, declined to 5.7% from 6% in December. Similarly, Average Earnings Excluding Bonus retreated to 6.5% in the same period from 6.7%. AUD/USD The Aussie pair started trading at 0.6656 and like the European pairs the first move was down. Still in the Asian session, the AUD/USD pair rebounded and grew towards 0.6672. The upward momentum was not maintained in the European session and the pair of the Australian pair started a downward move towards 0.6645. At the time of writing, AUD/USD is trading at 0.6651. Most Asian currencies weaken against the USD in the morning session amid higher Treasury yields. Source: investing.com, finance.yahoo.com
USD Stable as Oil Prices Rebound Ahead of US CPI Report Release

EUR/USD Pair And GBP/USD Pair May Back To Their Bearish Moods

Jakub Novak Jakub Novak 14.03.2023 12:33
The unexpected crisis in the US banking sector has crushed all hopes for a new acceleration in the pace of interest rate hikes. Goldman Sachs economists said they no longer see the Fed raising rates next week, even after US authorities took steps to contain the crisis caused by the collapse of Silicon Valley Bank and Signature Bank. This caused two-year Treasury bond yields to fall by 18 basis points to 4.34%, reaching its sharpest three-day drop since October 1987. Expectations of a less aggressive policy stance and sharp demand for German bonds also affected the euro. Interest rate Most likely, Fed officials will announce a pause in interest rate hikes this week ahead of their meeting on March 21-22. Economists were expecting to see around 0.25% to 0.5% increase earlier, but everything changed since last Sunday, when US authorities had to act very quickly in order to contain the spreading of SVB's problem to other US banks. The Fed had to open an emergency line of credit, allowing banks to pledge a range of high-quality assets to obtain cash for a period of one year. They also pledged to fully protect uninsured depositors in SVBs, as well as relax lending conditions through the Fed's discount window. These measures should provide liquidity shortages to banks. Now, the Fed is expected to raise the rate by a quarter point next week, which means that the peak will be around 5.1% in six months, slightly lower than the previously projected 5.74%. USD The current situation is quite negative for dollar as it most certainly raises risk appetite. However, market players should keep in mind that if the crisis in the US banking sector is not solved quickly, it will spread to other regions, which will result in a collapse in other currencies such as euro and pound. US economy Ahead is an important US report, that is, the inflation data for February this year. Economists are predicting that the index will show a 0.4% increase, slightly lower than the previous month's 0.5%. Yearly data should be 5.5%, which is also lower than the 5.6% earlier. Euro Demand for euro has intensified after all the news, so buyers have a chance to continue building the new upward trend. However, the quote needs to stay above 1.0700 as only by that will euro go beyond 1.0730 and head towards 1.0770 and 1.0800. Should the quote decline below 1.0700, EUR/USD will slip to 1.0666. Pound In GBP/USD, bulls also control the market, but the quote needs to stay above 1.2130 so that pound could have the chance to break through 1.2170 and head towards 1.2215 and 1.2265. If bears manage to gain control, the pair may dip to 1.2080 and 1.2050.a     Relevance up to 08:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337507
UK Gfk Consumer Confidence index got better fourth month in a row

The Pound Has Not Reacted To The Release Of Data

Kenny Fisher Kenny Fisher 14.03.2023 14:27
The British pound has reversed directions after an impressive rally that saw GBP/USD climb 370 points. In the European session, GBP/USD is trading at 1.2154, down 0.24%. US dollar recovers The collapse of the Silicon Valley Bank (SVB) on Friday sent the financial markets into turmoil on Monday. US bank stocks declined sharply, while safe-haven gold powered higher. The US dollar retreated against the major currencies and the 2-year Treasury yield fell almost a full point. Tuesday has brought better news, as the markets appear to have settled down. The US dollar has regrouped and is higher against the majors. There is an uneasy calm in the air, but that doesn’t necessarily mean that this latest crisis is behind us. Investors are on alert and will be very sensitive to new developments and any negative news could renew market volatility. The Fed and Treasury Department acted quickly to protect depositors and President Biden sent a reassuring message at an impromptu television address, but the collapse of the 16th largest lender in the US means it’s unlikely to be “business as usual” for some time. It was just a week ago that Fed Chair Powell’s hawkish testimony on the Hill raised expectations of the Fed delivering a 50-bp increase at the March 22 meeting. Those expectations have vanished into smoke, with the markets now expecting a 25-bp hike, with an outside chance of a pause.  We could see further market repricing after today’s CPI report, with headline CPI expected to fall to 6.0%, down from 6.4%. In the UK, the employment report was within expectations. The unemployment rate remained at 3.7%, shy of the estimate of 3.8%. Hourly earnings fell to 5.7%, as expected, down from an upwardly revised 6%. The pound hasn’t reacted to the release and the data is unlikely to change minds at the Bank of England, which is expected to raise rates by 25 bp at the March 23 meeting.   GBP/USD Technical GBP/USD tested resistance at 1.2113 earlier in the day. Above, there is resistance at 1.2294 There is support at 1.1984 and 1.1854 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Australian dollar - the sharp drop can be attributed to technical factors and hawkish Fed

The Aussie Could Not Build On The Success Even Against The Background Of The Extremely Weak Positions Of The Greenback

InstaForex Analysis InstaForex Analysis 14.03.2023 15:03
The AUD/USD pair updated its 4-month price low last Friday, hitting 0.6567. The bears managed to end the trading week within the 65th figure, despite the general weakening of the U.S. dollar. At the beginning of the current trading week, the buyers took the initiative but their achievements remain relatively modest. On Monday, the pair sharply surged to 0.6720, but by the end of the trading day it retreated to the 66th figure, where it drifted. The Aussie seems to be the outsider on the backdrop of the other major currency pairs. For instance, the pound gained almost 300 points against the greenback, and the yen gained 400 points. The Australian dollar, in its turn, could not take advantage of the situation to the full extent: the buyers of AUD/USD are wary of the upward price surges and take profit at the first opportunity (thus canceling the upward momentum). This skepticism towards the Aussie seems an echo to the March RBA meeting, the outcome of which was not in favor of the Australian dollar. The RBA is getting ready to draw a line Reacting to the outcome of the Reserve Bank of Australia's latest meeting, the AUD/USD pair plummeted almost 200 pips despite hawkish decisions by the central bank. The regulator increased the interest rate by 25 points (i.e., to 3.60%) and simultaneously announced that the central bank will discuss further tightening of monetary policy. However, the formal results did not impress traders, while the rhetoric of the accompanying statement disappointed AUD/USD buyers. The RBA significantly softened the wording of the final communique. For example, the text of the February statement was very straightforward. The Central Bank then indicated that in the coming months, the regulator will need to further increase the interest rate "to ensure the return of inflation to the target level." While the March text of the accompanying statement looks completely different. In particular, the central bank refused to talk about future interest rate hikes and instead applied a more vague wording, noting only the need for further tightening of monetary policy. Such a verbal signal was interpreted by the market unambiguously—as a softening of the RBA's rhetoric. In addition, the Reserve Bank announced another important phrase—that inflation in Australia has reached its peak. Recall that the consumer price index in January fell sharply to 7.4%, with an estimate decline at 8.1%. At the same time, the RBA drew attention to the slowing growth of the Australian economy: according to the latest data, the volume of Australian GDP in Q4 2022 increased by only 0.5% against the forecast growth of 0.8%. In other words, the tone of the RBA's rhetoric was clearly "terminal." According to a number of currency strategists (in particular, Societe Generale), the Reserve Bank will announce a pause in rate hikes at the next (April) meeting. The Australian jobs report, which will be published Thursday, March 16, may play a certain role in this. Australian Jobs Report According to preliminary forecasts, the unemployment rate in Australia in February will decrease to 3.6% after a slight increase in January to 3.7%. The employment growth rate should enter positive territory (after two months of being below zero). According to forecasts, almost 50,000 jobs were created in February. The Australian consumer inflation estimates (a good indicator of current household inflation sentiment) is also expected on Thursday. According to forecasts, this indicator will again demonstrate a downward trend, reaching 4.9% (the lowest value since March last year). Conclusions Despite the upward corrective pullback, the downward trend for the AUD/USD pair is still in force. If the above macroeconomic reports come out in the "red zone," the Aussie will come under additional pressure, as the likelihood of a pause from the RBA will increase again. In general, the current dynamics of AUD/USD is indicative: the Aussie could not build on the success even against the background of the extremely weak positions of the greenback. All this suggests that as soon as the USD stabilizes (for example, if inflation in the United States starts to gain momentum again), the downward trend will resume, as the Aussie will not be able to pull the price up by itself. The technical picture tells the same. The pair on the daily chart is between the middle and lower lines of the Bollinger Bands indicator, as well as below all lines of the Ichimoku indicator (including the Kumo cloud). The main target of the downward movement in the medium term is the lower line of the Bollinger Bands indicator on the D1 timeframe, which corresponds to 0.6530.   Relevance up to 10:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337533

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